Legislative Assembly of Ontario

The House resumed at 8 p.m.

BUDGET DEBATE (CONTINUED)

Resumption of the adjourned debate on the amendment to the motion that this House approves in general the budgetary policy of the government.

Mr. Swart: Mr. Speaker, I was taking part in the budget debate when we adjourned at six o’clock on Monday, and I am pleased to continue at this time.

I made it clear when I rose at that time that my comments would refer almost exclusively to the matter of escalating prices in our society, the harm that it was causing to those particularly on low income and what we in this party felt should be done about it.

I pointed out, and I believe I proved it with statistics, that the escalating prices were hurting most those people on low incomes and that the contrast between the low-income groups and the high-income groups in our society was increasing rather than lessening.

I pointed out that, in fact, the average standard of living in our society was falling but that was due mostly to the fact that it was falling rather dramatically for those on lower incomes.

I said we must take some action with regard to holding the level of prices and we should recognize that the old system of relying totally on competition in a corporate-dominated society, particularly one that is dominated by corporations not owned in this country, must give way to, or at least be supplemented by, some kind of fair prices commission that would give protection to the consumer.

I dealt with that in several respects. I pointed out that the competitive system was failing for a number of reasons, one of them being the high degree of corporate concentration within our society; there were fewer and fewer corporations, but they were larger and larger, having more and more power; and the consumer did not have the necessary clout in that kind of a society to get a fair break in prices.

Tonight I want to go to the second of those items which I mentioned, to a factor that is causing the competitive system to be ineffective in controlling prices; that second factor is that our economy is foreign-dominated to a very large degree. I want to give some examples of what is happening in this regard, and I think everyone will be conscious that those examples are accurate.

First of all, let me take the automobile industry. We know that our automobile industry in total is an appendage of the United States automobile industry; whether we get investment here, and the prices we pay for the automobiles, is determined by the parent companies in the United States.

This evening I am going to go into the issue of the lack of investment, both in capital and in research and development. But I want to point out that traditionally, since we have had the auto pact and even before we had the auto pact, the retail price of an automobile here, less the taxes, runs from something like three per cent at the very lowest to 10 to 15 per cent higher than the price of the same automobile in the United States.

The statistics have shown over and over again that we have a greater efficiency per man-hour of output. The automobile industry in this nation is greater in terms of efficiency than it is in the United States; so they cannot be charging more because their costs are higher. The statistics also show that traditionally the profits made by the automobile companies on investments in this country are something like 60 per cent higher on the average, year by year, than they are in the United States.

If one has that kind of higher profit, if one has that greater efficiency and greater output, why then should the consumer prices for automobiles be higher here than they are in the United States? The answer, I think, is fairly apparent. It is simply because it is the United States companies -- we are just an appendage here -- determine that the prices are going to be higher here to Canadians. It is not competition operating; it is a determination by the automobile companies.

The next item I want to mention is our fruit industry. It has been mentioned in this House many times that the fruit canning industry in the Niagara Peninsula is being bought out by American companies to the point where we only have one canning company of any consequence left, Canadian Canneries, and that has now been bought out by Del Monte. The competition has been totally removed for Del Monte; they now control the industry. It is perfectly apparent to anyone in the industry and to consumers that if Del Monte wants to close that plant down for the safety of its profits, the company can and will do it, and the fruit canning industry in this province -- for that matter, in this nation, because that is the centre of it -- will be destroyed, and Del Monte and the other foreign corporations will be able to charge what they see fit in this country. Once again, foreign domination has eliminated the competition which should be controlling the prices in this nation and in this province.

Another item I want to mention regarding foreign corporations is that they are ripping off -- if I may use that term -- Canadians in the matter of coffee. Members of this House will know it is almost two years since my colleague the member for Etobicoke and I started an investigation at the request of consumers into the prices of coffee here compared with the prices of coffee in the United States. Briefly, I want to review that tonight.

I live in the Niagara Peninsula and for many years many of my neighbours, and I to a lesser extent travelled to the United States to buy coffee and other items. We know what the prices are in the United States. For many years coffee was 10 to 15 per cent higher in Canada than it was in the United States. I’m talking now from 1970 right on to 1977, 10 to 15 per cent higher, 10 to 15 cents a pound more on the average, although sometimes coffee was up to $1.19; sometimes up to $1.30.

Then in 1977 the price of coffee beans rose at a tremendous rate to a tremendous level, partly because of a frost which took place in Brazil in 1975 and killed some of the coffee trees. Now it has become apparent that rise was also caused partly from the manipulation of the large corporations that control the coffee companies and for that matter the coffee plantations.

When that took place in 1977 the differential in the coffee prices between Canada and the United States rose from that 10 to 15 per cent to 30 to 50 per cent. We documented that and it was never disputed. The difference was $1, $1.50, even up to $2 a pound more that the Canadian consumers were paying for their coffee in comparison with the American consumers in New York state and the other heavily populated states.

At one time even the present Minister of Consumer and Commercial Relations (Mr. Drea) was enraged about what was taking place. He was then the Minister of Correctional Services. He said, and I quote, “They were profiteering and making an enormous amount of money,” speaking about the coffee companies. When he was chastised by his cabinet colleague who at that time was Minister of Consumer and Commercial Relations (Mr. Grossman), who suggested he really didn’t mean that, his reply was, “Oh, yes. I do mean that. When I say ‘ripoff’ I know what ‘ripoff’ means.” That was back on November 9, 1977.

Since that time he has become the Minister of Consumer and Commercial Relations and it is now a very different story. When the issue was raised again last December 1, just one year later, in the Legislature by me and a number of others in this party, this was his comment: “Now, if you take into account that the Canadian dollar has skidded from the time that you made your first report a year ago, from $1.01 American down to 85 cents, if you really look at the prices, and based upon the fact that Canadian coffee grinders and processors have to buy at a fixed price in New York in American dollars, I am very much surprised today honestly that the price of coffee is as low as it is in Ontario.” That was the Minister of Consumer and Commercial Relations one year later.

What were the facts at that time? One fact was that the differential was just as great then as it was when he said it was a ripoff and he knew a ripoff when he saw one. Nothing really had changed except the position of the Minister of Consumer and Commercial Relations. He had become the paper tiger once he had got into a position of doing anything about consumer prices.

I have a chart here which I brought into the House because I didn’t have any other forum. It shows the kind of markup that has taken place from the green bean price. The Minister of Consumer and Commercial Relations speaks of the cost of coffee on the United States market and our dollar value being lower now. I want to point out that he said there was a ripoff. Our dollar then wasn’t worth $1.01 to the United States dollar; it was worth about 95 cents. Now it’s down to 85 cents.

It has to be recognized that the cost of the green bean is less than half of the price of the coffee on the shelf. If we’re going to blame it on that, we can only apply it to the green bean price because that’s the commodity market in New York. We buy it there with Canadian dollars, but from there on it is processed here. Unfortunately, it is processed here largely by American corporations. That is why we’re paying such a high price.

This chart shows the green bean price on the commodity market in New York, taken from their own figures. It shows the retail price of coffee in Canada, which is taken from the official food basket price. It shows the differential between the two over those three years. It shows there was a differential of roughly 75 cents back in 1975, when coffee was something under $1.50 here. It shows that that differential of 75 cents between the green bean price and retail price of coffee stayed approximately the same until the spring of 1977.

Then, all of a sudden, that 75 cents blossomed into $2, and we have this wide gap. That has continued the same right up to the present time. Here are the two figures at present, It shows the green bean price is about $1.40 and the average coffee price is about $3.40 to $3.49 in this province. Nothing has changed, except the attitude of the minister towards that.

I have here two recent reports which bear this out rather forcefully. Last November 8, 1978 -- that was only three weeks before the minister said there was nothing wrong with the coffee prices here -- a reporter from the London Free Press went over to Port Huron in the United States to see what the difference is in the price of coffee. It’s a lengthy article but I will just pick out a couple of items.

He said: “The same Eight o’Clock brand of coffee beans in the three-pound bag, for which we paid $5.89 in the United States, cost $10.69 in London -- a difference of $4.80.” Nescafe instant, 10 ounces, was priced at $5.99, or $1.55 higher than the Port Huron price of $4.44. Taster’s Choice freeze dried, eight ounces, was $6.29, or $1.32 higher than the Port Huron price of $4.97.

If we want to bring that a little bit more up to date --

Mr. Blundy: That’s right. A lot of people go over to Port Huron to buy groceries every week.

Mr. Conway: Down with socialist “hoard.”

Mr. Swart: That’s right. A lot of people go over to Port Huron to buy groceries every week.

Mr. Ruston: They don’t need coffee.

Mr. Swart: Not only groceries but other commodities too. A lot of people from the Niagara Peninsula go over to New York state to buy a variety of products, including groceries. They do this on many occasions because the price here in Canada is fictitiously high. I’m going to be dealing with that a little further in a minute.

On April 17, a report in the Globe and Mail in the Consumer Game column written by Ellen Roseman makes these comments. She writes: “While in Florida on my holidays I spent some time checking the supermarkets and found that coffee prices were a lot lower than they are here. For example, a 16-ounce package of ground coffee costs $3.49 in Toronto, $2.33 in Miami. A 10-ounce jar of instant coffee is $5.99 here, $3.93 there.” Then she goes on to give some other prices all along the same line.

There has been no change in the last year and a half or almost two years in the differential between coffee prices in this country and in the United States and in this province and in New York state. The present Minister of Consumer and Commercial Relations simply refuses to take any action whatsoever, even after the statement he made a year and a half ago about the consumers here being ripped off. That is due to the fact that we have only a few coffee roasters and coffee processors in this province and in this nation and they are foreign-controlled. The competitive system simply is not working to protect the consumer.

I would like to make one more quote, before I leave the coffee issue, by Ellen Roseman from her article on April 17. She said: “George Beatty, a spokesman for General Foods” -- and, of course, General Foods is by far the largest roaster and processor in Canada and in the United States --

Mr. Makarchuk: They not only roast coffee, they roast people as well.

Mr. Swart: They roast the consumers, believe me. To continue: “(he) explains that Miami is a very competitive market and retail prices are very low there and he mentions another interesting point. In Canada, coffee drinkers have adjusted to the higher prices and demand is back to pre-frost levels. In the United States, consumption still hasn’t returned to normal.”

Because we like our coffee here, they admit they keep up the price level. With those kinds of corporations, consumers just haven’t got the kind of clout that is necessary to get a fair break in prices. The government has to intervene if they’re not going to be ripped off.

I want to mention a third factor. These factors, incidentally, are all connected, whether we’re talking about concentration adversely affecting the consumer, the competitive system, foreign domination or not. They’re all tied together. The third point I want to make now is about the United States dollar influence in this country. The influence of the high United States dollar compared to our low dollar is also, not only legitimately raising some of the prices to the consumers here where we have to import from the United States, but it is being used as a technique again to rip off the consumers in this province and in this nation.

I want to deal with two of these issues. The first is lumber. Members of this House will know that back in January I started doing some investigation into the tremendous escalation in the price of lumber. It was brought to my attention, I say quite frankly, by two separate lumber merchants who were appalled at the price which they were having to charge for lumber to their customers and asked if I would sit down with them. They opened up their books fully to me.

I found out that the price of two-by-fours and staples in the lumber industry had increased by something like 70 per cent in two years. In fact, they went so far as to provide me with some documents and tables from the companies themselves which showed the price increases over those years and to which, I guess, only the lumber merchant themselves were supposed to be privy. In 1978, for instance, the price of two-by-fours of a standard length went up from $195 a thousand to $265. Now the price is up to $285 a thousand.

In 1978, three-eighth-inch rough spruce plywood went up from $185 a thousand square feet to $245. During that time they switched a good part of that plywood production to the metric system, reduced the thickness by between 10 per cent and 16 per cent, but that price increase took place just the same, from $185 to $245.

Some of the increases were even worse than that. I have a letter here from a major millwork and cabinet company. After my comments had been reported, they sent me a copy of a letter which they sent to the Architectural Millworkers Association of Ontario, their organization, in which they said:

“The drastic increases in the price of lumber and plywood have been receiving much publicity of late. We are enclosing a letter recently sent by Mel Swart, MPP for Welland-Thorold. Mr. Swart’s letter refers generally to construction lumber and plywood but, nevertheless, we as millwork manufacturers support his position on this subject.

“The dramatic increase in the price of upper-grade hardwood lumber and plywoods in the past two years has been completely unrealistic. These increases are particularly discouraging to firms in the millwork industry as we are not in a position to pass these increased costs on to our customers due to fixed-price contracts. As the association is aware, many of our contracts are completed two and three years after the tender date.

“We are providing you with the following example of what has happened to the price of three-quarter-inch veneer core birch plywood in the past one and one half years -- plywood manufactured in the provinces of Ontario and Quebec.”

Then he gives these dates and prices per thousand square feet: May 11, 1977, $581; November 15, 1978, $814; and February 5, 1979, $995. In other words, the price of that plywood which they use in making their cabinets has increased by 71 per cent in 21 months.

The profits of the forest industry last year increased by 86 per cent, up from $263.8 million to $491 million. We all recognize now that there is an integrated forest industry in this province and in this nation which produces paper, lumber and all other forest products. During the period from 1975 to 1978 the value of lumber exports went from $900 million to $2.6 billion.

When I was given this information by the lumber merchants and started to do some investigation and found out the amount of lumber that was going to the United States, I went over there to find out what our lumber was selling for there. I found that our lumber was selling, in United States dollars, cheaper than it was here in Canada -- substantially cheaper. Lumber selling here at $285 is selling to Bailey Lumber in Buffalo at $264.50. Frontier Lumber in Buffalo is buying lumber at the wholesale price of $255, while the price here is $285.

[8:30]

I found out what the lumber companies were doing was pricing their lumber in the United States just a few dollars a thousand below the United States producers so they could get into the market and then they raised our lumber prices here up to the United States level. Their profits show that. The increase in the price of lumber here over that period of time shows this -- a 70 per cent increase in two years. The amazing thing about this is that these same companies who produce paper sell it at the Canadian price in Canada and at the United States price in the United States. No longer ago than this afternoon I priced newsprint per ton. It sells in Canada at $335 a ton. It sells in the United States at the United States price of $345 a ton; that is $393 a ton Canadian price.

Why is it? It’s legitimate to ask why, with the same companies, we have one price in Canada for paper, $345 a ton, and in the United States they get $393 a ton for it. Yet when it comes to lumber and certain other products we pay exactly the United States price for it here. I suggest there’s just one reason: their customers for paper, whether it’s the Globe and Mail or the Toronto Star or the chain of Thomson newspapers, have enough clout that they don’t dare raise the price of paper here to the exorbitant figure they get for it in the United States. But the lumber merchants and the customers who buy the lumber, the builders and so on, don’t have that kind of clout, so they have raised the price of lumber to the United States level.

It’s hurting our economy; let’s make no mistake about it. One of the big builders in Ottawa says there is $6,000 worth of lumber in an average house -- this was in 1978. Just two years before that it was only costing $4,000. This has to have an effect on housing construction. It’s part of the reason -- not the major part -- housing starts in this province are down something like a third this year over what they were last year.

I’ve raised this issue in the House twice, about the increase in the price of lumber, with the Minister of Consumer and Commercial Relations and with the Minister of Housing, and both of them have just ignored it. In fact the Minister of Housing went so far as to say he didn’t think the increase in the price of lumber and other things going into housing had anything to do with the increase in the price of housing. How he would figure that out, I am not sure.

But this happening to Canadian consumers, this happening here to the housing industry, appears to matter not to the government over there. It’s hands off, regardless of what happens to the consumer.

If that example of lumber isn’t bad enough, I would like to deal with the relationship between Canadian and US prices of copper tubing and for that matter copper generally. Once again a major builder brought to my attention that the price of standard half-inch copper tubing used in the construction of houses had increased 38 per cent between last October and the end of March this year. The profits of the copper-producing companies, when I started to look into it, were just absolutely fabulous.

Anaconda, one of the major producers of copper in this country, had increases in profits last year of something like 50 per cent and they predict they are going up this year another 40 to 50 per cent.

These are the profits of Anaconda, our major producer here.

Once again, I did a comparison and tried to find out the price relationship between Canada and the United States and why our copper tubing was so much more expensive. I was able to obtain a copy of the Allpriser, which is a Canadian publication that recommends the retail price of copper. I found standard copper tubing had gone up, as I said, 38 per cent since last October and now was at the level of 81.33 cents. I also got a copy of the similar publication in the United States and found the price over there was 55.5 cents per foot. Those are the suggested retail prices. That means our price for copper tubing is 45 per cent higher than in the United States, yet basically we have the same companies producing it.

We don’t have to buy the raw copper or the copper plate from the United States. We make it here. We pay Canadian wages here, not the wages they have to pay in the United States at the United States dollar level. Why should it be 45 per cent higher here than in the United States?

I found out, first of all, the price of copper produced in Canada is set at the United States prices. The publication, just in the last two weeks, shows the price of copper in the United States is $1.01 a pound. The price of copper here in Canada, from the same company, Anaconda, is $1.17 a pound. They have raised the price to the United States level even though, as I said, they use our natural resource, and they use our labour which they pay at Canadian rates. Yet they have raised that price to the United States level.

Even that doesn’t account for it, so I looked into it a little bit further and I found out the price in Canada is equal to the price in the United States at United States dollars, plus the amount of duty that is levied if you bring copper tubing from the United States to Canada. Not only have they set the price at the United States level without any justification, but they have increased it to just below the total amount with import duty, so they don’t get any competition from the imports. People here are paying 45 per cent more for their copper tubing than they are in the United States.

I went to a large plumbing firm in the Niagara Peninsula to buy some copper tubing just to get some comparison in prices. They charged me 80 cents a foot for the tubing. I just went in and asked for 12 feet of tubing. They charged me $9.60. I went across the border into Niagara Falls, New York, to the Hysens Supplies Incorporated, another plumbing concern of about the same size, and asked for 12 feet of copper tubing. He said they didn’t sell it in 12-foot lengths. He said they sold it in 20-foot lengths. That’s the smallest length they sell. I said: “Okay, I will take 20 feet.” I said: “How much will that be?” He worked it out and said 20 feet will cost $8.60. I paid $9.60 for 12 feet of it here in Canada.

In neither place did they know who I was. I just went and asked for it off the shelf. Now, I admit in the United States they gave a 20 per cent discount to all retail customers. I am sure you can probably get that same thing in some of the plumbing establishments here in this province, but even if you do, it is still 45 per cent higher here than it is in the United States simply because the companies here have determined it will be at that level. Can anyone really say competition in something like that is working in our society? Of course not. The consumers here are just simply being ripped off.

The fourth item I want to mention briefly, Mr. Speaker, with regard to its effect on competition in the kind of a society we have, is the power of manipulation used by advertisers and sales techniques. It has become a science whereby they can sell to many customers and consumers, things they don’t want, at a price which is exorbitant. I suggest this is an area at which we have to look rather closely.

There was a comment made in the Canadian Grocer magazine, which states: “For large-scale advertising to work, the buyer must be only partially informed about the nature of the product and the product must be complex enough so that precise evaluation is not possible.” In other words, advertising must to some degree misinform us.

We are all aware of the type of packaging used to fool the consumer. As I say, the advertising and the packaging and all of these kinds of manipulations have reached the point where many of the consumers really cannot effectively judge which is the best buy when they go into the supermarket or any other store.

There has been some discussion in this House recently about the changeover to the metric system from the Imperial system being used to increase prices, because the consumer doesn’t notice a little difference in the size of the can when it is changed from one to the other and the prices aren’t changed. Our leader had brought in two cans. One was substantially less, I think it was down from 450 grams to 385, and the price had only dropped from 46 to 45 cents. The Minister of Consumer and Commercial Relations a couple of days later got up and said he investigated it, and it had been a mistake on the part of the clerk in this particular store and the price should have been 42 cents.

The day after that took place I went into some of the stores in the St. Catharines area. The price wasn’t 42 cent in the Penn Centre Miracle Mart; the price was 45 cents for that metric can. In Loblaws Penn Centre it was 45 cents, in the Dominion at the Penn Centre it was 44 cents, and in the IGA in Thorold it was 46 cents. I want to say it was our leader who was right the other day and not the Minister of Consumer and Commercial Relations.

Mr. Warner: That same clerk has been into 23 stores.

Mr. Swart: Yes, they really move that clerk around.

Another way they get the consumer to buy what they want him to buy is by the location on the shelf. Evidence has been given on this at the hearings into the kick back on food and so on, and I am not going to make any quotes on that. That is all in evidence. That it is taking place is in the records of this House. If they want to move something, they put it a certain place on the shelf. It is all part of the manipulation of the consumer.

I suggest there is ample evidence, from what I said and from what anybody else can find if he wants to do an investigation, to show there are places where competition is not adequately controlling the price to the consumer. We have to look for some supplementary mechanism if we are concerned about the consumer, particularly those on the lower incomes.

[8:45]

The profit records are such that they show competition is not working. When last year Canadian corporations showed an increase of 25.6 per cent in profit, when this year -- just on May 1--corporate operating profits were reported to be 53.3 per cent higher than a year ago, something in the competitive system as far as the consumer is concerned is breaking down badly.

Mr. Makarchuk: Poor little fellows. They are hard done by, aren’t they? They have to collect some money for donations to the Tories and the Liberals for the election.

Mr. Swart: Yes, maybe that is one of the reasons.

Mr. Kerrio: How many people went bankrupt trying to run a business in this country? You don’t even mention those, do you?

Mr. Swart: That is right. I am glad the member for Niagara Falls brought that up. That is part of the system.

Mr. McClellan: How many of them were builders, Vince? Or dealers in copper tubing?

Mr. Swart: We have reached a point in the system now in certain areas that corporate concentration has got so great that no little person can survive there any more. By one method or another those giants can force them out and then charge what they want to charge.

Mr. Warner: Repeat that for the member from under Niagara Falls.

Mr. Swart: We say in this party that there has to be a fair prices commission established by the government of this province as well as by the federal government. I think we all know that constitutionally the province does have the power over retail prices. There is no question about that. When we have a province of this size and the population we have -- a bit more than one third of the population of Canada -- any fair prices commission here which deals with retail prices and consumer prices can have a major effect all across Canada, but have an effect in great depth within this province.

There was a debate in this House just a week ago on a resolution by my colleague, the member for Hamilton Centre (Mr. M. N. Davison), asking the government to establish this. It was a good resolution; it made all kinds of sense. Since that time I have had the opportunity to read over the comments made by some of the speakers in this House -- including yourself, Mr. Acting Speaker (Mr. MacBeth) -- and also the comments which were made on the proposal in the federal House by the national leader of the party with which I am proud to be associated.

The Liberals in the federal House gave exactly the reasons the Conservatives in this House gave for not wanting to have a fair prices commission. If I may say this while you are in the chair, Mr. Acting Speaker, you made a comment -- I happen to have it here -- that it sets up another bureaucracy, creates more cost to the people. They gave exactly the same argument there. In fact all of the arguments were totally duplicated between the Liberals in Ottawa and the Conservatives in Ontario.

Mr. Makarchuk: Tweedledum and Tweedledee.

Mr. Swart: I want to say that with all the conviction they have, those arguments are not sound enough to prevent the creation of a fair prices review board. The evidence in need of it far overwhelms the arguments against a fair prices review board.

We say this fair prices review board does not need to be a big bureaucratic body; there is no need for that. In the United States John Kennedy effectively controlled the price of steel. He ordered a rollback in the price of steel because he had the power to do it. He didn’t have a long investigation into that. He just knew that the profits were excessive and he said, “You must roll back the price of steel in the United States.”

We could set up a fair prices commission in this province with a very small number of people. We’re not going to control a great number of prices. The very fact that they are there will deter some of these companies from the unjust price increases which they have assessed against the people of this province.

Finally I want to say that there is no other way open to us at this time but to have some form of a prices review board which can examine those increases which appear to be unjust and if they find them so, to roll them back. I point out that even this government has moved away from the pure competitive system. When it was forced into it on the rent issue, it did pass rent review legislation.

Mr. Warner: They were dragged kicking and screaming.

Mr. Swart: The Treasurer (Mr. F. S. Miller) stated just a few days ago that he wouldn’t think of abandoning it. He said 80 per cent of the people were in favour of it. I suggest to the government if it has a prices review commission it will be able to have the same beneficial effects. I regret very much that it was not even mentioned in the budget speech.

Mr. Philip: It was too bad they didn’t have the same heart for the condominium people.

Mr. Lane: Mr. Speaker, I would like to take this opportunity to congratulate the Treasurer on his first budget since becoming Treasurer of this great province. I think that most people will agree with me when I say it is a good common-sense budget and certainly cannot in shape or form be considered an election budget.

The removal of the succession duty tax as a form of government income was a surprise to many people. I agree with the Treasurer that this province will gain more than it will lose by deleting succession duties. A great deal of investment money from Ontario has been going into other provinces and countries that have no succession duty tax. Many of these investors would not have been required to pay succession duties because only about three per cent of Ontario estates have been subject to it.

The amount collected from this source this year, had it not been deleted, is estimated at approximately $28 million. However, many people had visions of their businesses being liquidated to pay succession duties. As I have already pointed out, because of this concern they were investing the bulk of their money in places other than Ontario. Now it will no longer be a cause for concern and should help improve the local investment and will certainly result in more jobs and a better economy.

Mr. Philip: I don’t know what you’re talking about. All my capital gains are made in Ontario.

Mr. Lane: I was indeed surprised to hear the member for Scarborough-Ellesmere refer to the budget in his address on this matter as a portrait of failure. I really do not know how the honourable member or his party could expect to have any credibility within the rank and file throughout this province if they class this fine document presented to us by the Treasurer on the evening of April 10 as a categorial failure. I honestly believe that many people in Ontario will examine this budget and realize what a man of vision the Treasurer is. I think this feeling will be proved to be right in the weeks and months ahead.

I think the Small Business Corporations Act that the Treasurer proposed in his budget and is now before the House in the form of Bill 49 will result in bringing out many local investors and will improve job opportunities in --

Mr. Philip: There will be more internationals taking over our companies.

Mr. Lane: -- our economy and will in most cases prove profitable to the investors.

Mr. Makarchuk: The Treasurer says it won’t.

Mr. Lane: There should be a great increase in the percentage of Ontario investment in our own province.

Mr. Makarchuk: Didn’t you see the interview in the Globe and Mail? He said it won’t. He didn’t know what it would do.

Mr. Lane: The Employment Development Fund for Ontario will also prove to be the right way to go. We have examples of how this works in the automotive and pulp and paper industries. These are just a few of the items contained in the budget that will prove to the people of Ontario that our Treasurer is indeed a man of great vision.

I was very pleased with the emphasis the Treasurer placed on the opportunity for youth, not only for the $79 million expected to provide 70,000 jobs for our young people but also for the opportunities to train, or in some cases, retrain, in areas that will provide long-term employment. A good example of this is the hospitality industry. This industry now provides jobs for over 400,000 people in this province. An incentive offered in last year’s budget and again this year will provide opportunities for more jobs in this industry. I could go on and give other examples.

I have mentioned some of the items in the budget that will improve the economy and provide jobs.

Mr. Kerrio: Tell us about that gallon of red ink.

Mr. Lane: While we are all very concerned about unemployment, I think we should recognize the main reason for it is the fact there are many more people in the labour market than ever before. Unemployment is not caused by the loss of jobs. In fact, in January 1979 there were some 135,000 more people working than there were a year ago. This figure varies from month to month. But it is an encouraging one, and as far as I am aware it’s at an all-time high. Very few of the 135,000 new jobs were created by government. In fact, Ontario, in the same month, had about 2,600 fewer civil servants than it had a year before.

Mr. Eakins: Which department is that in?

Mr. Lane: Most individual Canadian businessmen are optimistic about 1979 --

Mr. Eakins: It sure isn’t the Ministry of Industry and Tourism.

Mr. Lane: Automobile manufacturers, who produce one job in six in Ontario, say it will be a better year than last year. The pulp and paper industry is currently running flat out.

Mr. Philip: That’s why you give them more tax concessions.

Mr. Lane: The lumber business has been good. The price of metals and the demand for them has improved, so I think this is good reason for us to be reasonably optimistic about the future. I always like to be completely honest.

Interjections.

Mr. Lane: For the benefit of the members in the House, Mr. Speaker, I would like to repeat that. I think it was lost in the noise coming from across the way. I always like to be completely honest.

Mr. Eakins: Always nice to have a little humour in here.

Mr. Lane: In order to continue with my --

Interjections.

Mr. Lane: If you would listen to me you would hear something.

I think it is fair to say I should discuss some items in the budget that I do not like, as well as expand on those I can give my whole-hearted support to.

I was sorry to see the increase in the gasoline tax. I know there has been no increase in this tax for a number of years. I also know revenues from this source fall far below that required for spending on highways, roads and related services, and each year the cost of building and keeping highways in a good state of repair is increasing.

Mr. Philip: Just another slap against the trucking industry.

Mr. Lane: However, any increase in fuel taxes really hurts us in the north country. Not only must we pay the increased tax but we must drive farther and use more fuel to do business in the north than any other place in this province.

Mr. Eakins: What is your licence fee up there?

Mr. Lane: I’m going to tell you about that in a minute.

Many of my colleagues will ask me, when I mention this problem, what my complaint is when northerners only pay $10 for a licence plate. I reply that many of us drive 40,000 or 50,000 miles a year in the north to carry on our business, so in reality the $10 licence does not recognize the cost of driving. It does, however, recognize the distance problem. At some point, this government has to come to grips with this problem.

As you will recall, I had a private member’s bill before this House last year. The bill was defeated. But I am putting the government on notice that if some way is not found to give northerners a better deal on fuel, I will be back with another bill in the near future.

[9:00]

Mr. Philip: They don’t listen to you on that any more than they listened to your excellent ideas on the regulation of the trucking industry.

Mr. Lane: Another matter of concern to me in the budget was the need to increase Ontario Health Insurance Plan premiums. I admit that it is a very modest increase, and goodness knows we are all aware of the increased cost of health care. None of us wants our present level of health care to be downgraded in any manner, but I do know that many people find the cost of OHIP premiums a real hardship. I hope we can find some money from other sources to help pay for the increase in cost and not have to continue increasing premiums.

Another criticism that I direct to the budget is the lack of incentive to prospectors and the lack of overall interest in the development of new mines and the discovery of new resources in this province. There was considerable benefit in the budget for small mines now in operation; however, I feel there could have been more of an effort to bring about more new development in this field.

My support of the Treasurer in his first budget far outweighs my criticisms. As I said at the beginning of my remarks, in his first endeavour the Treasurer deserves congratulations on a very good budget.

Mr. Kerrio: Mr. Speaker, I am pleased to join in this budget debate and, to ease the budgetary problems of the people of Niagara Falls, I have put a brochure in every member’s mailbox, encouraging them to come down to Niagara during our blossom festival. It’s the 20th anniversary of our festival, and it runs from April 29 to May 21. When members look at the schedule of events, they will find that people from all across the province, and any other visitors who might visit our city, will be well received. We really do treat you royally in Niagara, and I invite all members to come down at their convenience.

Mr. Speaker, I will address my remarks to two or three areas of the budget which I am particularly interested in. The areas that concern me most have to do with creating an atmosphere in Ontario that would have us training our own tradesmen to become good producers and, indeed, to do that with our own forces so that we do not have to make stop-gap programs for the short-term involvement of members of our labour force, whether young or middle-aged.

I say that with a great deal of concern because, having been on the select committee on Ontario Hydro affairs and having listened to the kind of expertise that has been developed in the technology of this particular area of hydro development in terms of the Candu reactor, it’s a sad state of affairs, when it takes seven, eight or even 10 years to get a nuclear reactor on stream, that we have not seen fit within our educational system and within Hydro itself to train the people to man these plants which we take so much pride in building.

Very recently, it has become very obvious that we are not only not training those people where we have direct jurisdiction, but in many related areas we are also still advertising overseas to bring people to this country in this day and age. There has to be some reassessment of this whole program as it relates to training tradesmen and redirecting our education system so that there is not the elitist type of involvement where we are training people to be professionals and not paying much attention to the people who are really going to make this country run with the skill that we would develop in their hands.

My main theme tonight relates to the environment, and it is very appropriate that the Minister of the Environment is with us this evening. I would like to say to him that it is my impression, living in Niagara Falls and next to the border, that we have a very serious problem as it relates to that specific area. There is a very good reason for that.

People who live in the area of Love Canal and Bloody Creek in upper New York state, an area that is among the largest producers of chemicals in North America -- yes, in the world -- somehow have resigned themselves to the fact that because they produce these chemicals, they should be willing to accept their area as a dump site. If the minister is listening, because they have that frame of mind and are drawing dangerous chemicals from all parts of North America, they don’t dispose of them but rather bury them and get them out of sight within a very short distance of one of the great waterways in the world.

I would like to share with you a little bit of information that came to my attention when I visited with some people in Lewiston, New York, who have come together to fight their government and those people in charge of their environment. It seems a great pity that citizens, housewives and workers have to band together after hours to form a committee to be certain these chemical plants don’t pollute our environment. Here is a sad, sad fact.

In meeting with those people, I was extremely well received. They realized I wasn’t a politician going into a jurisdiction where I didn’t belong, but that pollution knows no bounds and I was very welcome if I was able to help their cause. They enlightened me in this way.

When George Kerr was Minister of the Environment we were led to believe PCBs were taken from places where there was a danger in the disposal of them, through some kind of incineration or safe disposal in Niagara Fails, New York. Let me read something to you which would make you think differently.

In the environment violation by a company attempting to put in a landfill site in Niagara Falls, New York there is a photo and a recorded date. “During September 1977, 24 trailer loads of dirt upon which PCBs had spilled four years ago in North Bay, Ontario, were hauled to Lewiston, New York, and dumped in landfill number six.”

It is a terrible tragedy that we could take PCBs and while the people of Ontario thought they were being disposed of, they were shipped across the border and, lo and behold, dumped in a site very near the Niagara River. The sad part of this was, if landfill was going to be the accepted way, until we had a better way of disposing of PCBs, there were in all probability many areas in heavy clay far removed from any international or large-flow water bodies like Niagara to dispose of those PCBs. It only came to light because of the involvement of these people in Niagara Falls, New York, who have seen fit to band together to form a group called Operation Clean to try to get those people responsible for the environment of New York state to toughen up on their laws not to allow these kinds of involvement in that area.

Imagine a span of 30 or 35 years, from a time when there was commercial fishing in the Niagara River, licensed fishermen with traps catching up to one ton of pickerel each night in each trap to some 30 years later when not a fish of that description is left in that river.

For some reason, those people thought we were only polluting that small part of the environment. If you have read a little of Cousteau’s work as it relates to his travelling all over this globe into the far reaches of the Arctic and Antarctic, you will find pollution is reaching every corner of the universe. It is a tragic thing because in this area we have to be among the worst polluters in the world.

I think the minister is a sincere individual and tries to do a job. He has to face the fact that we have a neighbour who is not so inclined and is accepting many dangerous chemicals from all over the United States of America.

I’d like to read into the record a letter that I received from a citizen of Niagara-on-the- Lake, the Deputy Premier’s (Mr. Welch) constituency.

Mr. Eakins: Where is he tonight?

Hon. Mr. Elgie: He is down in his riding trying to defeat you guys.

Mr. Kerrio: I might say at the outset that he has agreed with myself to oppose the granting of a permit to SCA Chemical Waste Services in the town of Porter, New York. I’m happy to join with him to be put on the list. I should read this letter into the record. I’ve written a letter to Mr. George K. Hansen, chief, permit section, Environment Protection Agency at Albany, New York. It reads:

“Dear Mr. Hansen:

“I oppose the granting of a permit to SCA Chemical Waste Services Incorporated, town of Porter, New York, without the benefit of a hearing. The reason for my opposition and concern is that my constituency bounds on international waters and the quality of those pollutants being discharged into the Niagara River, the effect on the environment as well as the transportation of toxic wastes through residential areas, and possibly entering the USA from Ontario, are very important to me and my constituents.

“I am anxious to participate in a forum which will discuss the problems and, hopefully, I will be able to help in some kind of resolution. I request to be noted as an interested party to an adjudicatory hearing which will be held in the evening at Stella Niagara in Niagara Falls, New York.”

I think the Deputy Premier has sent the same kind of letter. That was in response to this appeal by those people and those citizens, not only on the US side but on our side as well. I have a letter here dated March 18 from Niagara-on-the-Lake.

“Dear Mr. Kerrio:

“I have read in the Niagara Falls Review of your concern over the proposal of SCA Services Incorporated, a chemical waste disposal company located in the town of Porter, New York, to dump two million gallons of treated aqueous waste daily into the Niagara River. You are no doubt aware of the outrage felt by the citizens of this area.” If the minister recalls, I posed a question to him as it relates to this concern. “The New York State Department of Environmental Conservation has made a tentative determination to approve the application -- ”

This is the part where I want to refer to the fact that they are not stringent enough in Niagara Falls, New York, and New York state, because the state of New York has given that company tentative approval unless the public voices opposition to it, which is grossly unfair. To go back to the letter:

“The New York State Department of Environmental Conservation has made a tentative determination to approve the application for modification of the state pollutant discharge elimination system permit. Our own Ontario Ministry of the Environment seems to feel there is no danger of pollution to the town of Niagara-on-the-Lake water supply. We do not agree with this. Our concern is not only with the large volume of discharge -- ” and this is where it becomes significant “ -- but with the contents containing such things as various metals, arsenic, cyanide, phenol, hydrocarbons, polychlorinated biphenols and many more.

“We are also concerned because of the past history of environmental violations by this company. They have been fined on several occasions, the latest, just recently, a $15,000 fine for the mishandling of PCBs. We do not believe that a company with such a history should be allowed to discharge treated aqueous wastes into an international waterway, especially when this discharge may adversely affect the health and welfare of so many people downstream.

“We are also concerned because SCA Services will be allowed to monitor their own operation. Petitions have been circulated in this area, and we enclose copies of these petitions.”

As I said before, I’m gravely concerned that while the minister may have been given to feel the effluent that’s going to be discharged from that treatment plant is safe to our environment, we have the history of a company that has been deceitful, has been fined and has been dumping chemicals with hoses and other ways at night, to the extent that they cannot be trusted.

[9:15]

That leads me to my final point. I would like the ministry to consider something that has been studied in the United States. In fact, I have been disappointed in some of the reports we get from our government, but you haven’t seen anything until you have seen some of the American proposals. One was commissioned by Senator Edmund Muskie; and I am certain he did not get into upper New York State, because the book would have been four volumes thicker. It has to do with a study on pollution taxes, effluent charges and other alternatives for pollution control. It’s an area we have to investigate and make some kind of determination so the phrase that has been used in years past might become a reality; that is, “The polluter will pay.”

Mr. Eakins: Who said that?

Mr. Kerrio: Golly, many of the ministers said it.

Mr. Ruston: The main one was the member for Burlington South (Mr. Kerr). The former Solicitor General.

Mr. Samis: The $25-million man.

Mr. Kerrio: While we may be well intentioned, I am afraid we have a neighbour that may not be, and we must take a very keen interest in what’s happening there. We may not have the support of politicians over there, but we certainly have support of the citizens in every sense of the word; they are very concerned, and they have a very good right to be.

When the minister said today there will be no Love Canals in Canada, I would hope that would never happen; and it should not deter us from going across the border and helping in any way we can to suggest to those people that it’s not good enough to take PCBs from North Bay, Ontario, just to get them out of Canada, and to bury them in Lewiston, New York, where they are going to leach into the Niagara River. We have to destroy those chemicals.

We have to see to it that every chemical that is put on the market to perform some kind of function is followed right through the function and ultimately, when it is no longer of any use, it must be destroyed. It should in no way be put into the environment for some future generation to have to cope with. So I say, while the minister is well intentioned --

Hon. Mr. Parrott: Mr. Speaker, would the member entertain a question?

Mr. Kerrio: Yes.

An hon. member: Order.

Mr. Samis: What about parliamentary procedure here?

Hon. Mr. Parrott: I wonder if the member would put on the record whether or not he thinks high-temperature incineration is a method of destruction for PCBs? I would be interested to know his response.

Mr. Kerrio: Yes, I would like to respond to that question, and I would like to share something very timely with the minister. While that has been the accepted method, in my perusal of this concern that the Operation Clean group had in Lewiston, New York, I met with a very knowledgeable chemical engineer, just retired, who explained to me that they are intimidated by some of the plants they work with and prevented from making a high-profile resistance to the dumping of the chemicals. But he also shared with me something very significant and important. He said, that, while it was accepted until now that high-temperature incineration was the only method of disposing of PCBs, very recently -- and I will send the information to the minister -- there had been a breakthrough in the United States where they are talking about microwave destruction of PCBs. He was very enthusiastic about the possibility and potential of using that method, because it had a very low ratio of energy demand.

Hon. Mr. Parrott: At two pounds a week, it would take us 1,000 years to get rid of it.

Mr. Kerrio: Fine. So we are on the same wave length.

Hon. Mr. Parrott: Yes, but it isn’t ready yet.

Mr. Kerrie: The minister was testing me, and I hope I came through the test.

Hon. Mr. Parrott: You came through but you didn’t pass.

Mr. Kerrio: In any event, the Love Canal and Bloody Creek are only two examples of what is leaching into the Niagara River. The great sadness of the whole thing is that that body of water has a flow of somewhere between 150,000 cubic feet per second up to 250,000 or 275,000 cubic feet per second, and what makes that change is nature herself. When we get southwesterly winds it carries the water down, builds the head up at the lower end of the lake and we get increased flows. Hydro has taken advantage of that, because when the flow increases they close the gates, send the water through the tunnels and put it in the man-made lakes, and we have a great capacity to generate a tremendous extra amount of power without destroying the beauty of the falls.

In addition to that, because it has such a tremendous flow, it is so easy to take advantage of the diluting ability of that great flow to dispose of many chemicals, and we have what might be really described as a drainage ditch for the Great Lakes. The effluent discharges come from Cleveland, Detroit, Buffalo -- some of the big communities on the other side are chemically involved, as well as having large numbers of people live there, so we have a tremendous job ahead of us. Very recently a statement by the International Joint Commission on water quality said that chemical dumps on both sides of the border must be found and cleanup must become top priority with both governments.

Now, while all of that effluent is dumped into that river, we now have an applicant attempting to dump some 100,000 to 200,000 gallons a day and who expects us to accept that without any kind of resistance. I don’t think that company is going to get the permit, and I will give you a good reason why, Mr. Speaker. The second largest producer of chemicals in America happens to be in New Jersey and this same company has been refused a permit for this kind of disposal in the state of New Jersey. The people in Lewiston are ecstatic about this. The people there feel that that is enough evidence, based on this company’s record, that they shall not be given an okay to go ahead there. I want to add that the company that was going to put this in was going to be left much on their own technology, and that is a real concern of mine.

I would like to just close by reading just a little bit from a statement that I have prepared because I would like to see if the minister might consider this as a way of dealing with this problem.

Goods formerly free, including land, air and water, are becoming scarce and unusable. I am sceptical as to whether present economic institutions will solve our ecological problems; therefore, some form of intervention by the government is required.

When we realize the difficulty of enforcing environmental regulations, it becomes clear that only some form of effluent charges or pollution taxes, by which companies pay to pollute, will be effective. The charge or tax has two distinct advantages over regulations. First, it stirs an economic incentive for adopting pollution control measures. Second, a tax system represents a more powerful enforcement technique.

If these taxes or charges are so advantageous why have they not been formulated and implemented? I suggest that there may be some politics involved.

Hon. Mr. Parrott: No.

Mr. Kerrio: Effluent charges or taxes have not been effectively tried in Ontario, but I say they would work. However, there are enormous political obstacles to overcome.

Effluent charges would be assessed to industrial polluters. The problem is that many legislators are supported by constituents who are affiliated with the industries that pollute. When campaign time rolls along some would be at a disadvantage to propose this kind of involvement.

Additionally, polluting industries are fully aware that effluent charges or taxes would completely eliminate their current political and delaying tactics towards regulation and are, therefore, wholly against such a system.

I strongly suggest that the Minister of the Environment, the Minister of Revenue, the Minister of Treasury and Economics and the Minister of Intergovernmental Affairs should be involved in formulating and implementing such a tax scheme. The government of Ontario can set an example for the rest of North America by instituting such a system.

I wonder, is this government willing to consider this type of solution to our environmental problems? I am confident that the revenue from these taxes can serve a useful purpose in this province, providing not only incentive to develop pollution control devices but as a way of making the polluter pay.

Mr. Samis: Since I did not get an opportunity to participate in the throne debate, I want to take this opportunity, first of all to congratulate you, Mr. Speaker, on the fine job you have been doing for us in the House; and secondly to extend personal congratulations for the excellent manner in which you served as leader of our delegation recently on the exchange visit to the good people of Barbados. I thought you conducted yourself with aplomb, dignity and a great deal of authority. I know the government officials there were duly impressed, as was the good member for Essex North (Mr. Ruston) and all the other members of our delegation.

This is the first time I have participated in a budget debate where the author of the budget was not the duke of Kent, the famous and lamented Darcy McKeough -- lamented by the far right I am saying, of course. This is the first time I have had the opportunity to speak on a budget by the new Treasurer. I noticed in the Globe and Mail, I think it was on the 14th of last month, he said this budget essentially was a political document done in the context of minority government. All I can say to that is, heaven help us if that side ever gets a majority if this is what he can produce as part of a minority government.

In short, the government socks it to the average man and woman in Ontario while it panders to the well-to-do. It is a typical high Tory budget, although I noticed one journalist even referred to it -- are you ready for this, Vince? -- as a Social Credit type budget. I am not sure if my friend the good member for Niagara Falls would agree with that, but it is certainly an obvious right-wing budget in its tone and underlying philosophy, and I notice the Treasurer openly proclaims it as such as he speaks to various groups around the province.

Darcy McKeough was certainly a voluble, high-powered, brazen exponent of small “c” conservative economics. But even in his least expansive, least arrogant moments, never did he talk about such fantasies as nurseries of contented capitalists, or some fanciful Ontario version of Milton Freedman or Ronald Reagan’s utopia in the manner that our current Treasurer seems to indulge. In fact, this Treasurer almost comes across as some sort of recycled dogmatic fiscal fundamentalist.

The style of the budget is a little different from that of Darcy’s in that instead of hitting the little man with one mighty wallop of a tax increase in one main area, this one achieves the same end by jabbing the taxpayer in a series of vulnerable areas. Obviously the member for Muskoka (Mr. F. S. Miller) is no Darcy McKeough but he can certainly inflict as much damage with his repeated jabs at the taxpayers’ weaker parts as Darcy did with his alleged knockout punch.

In terms of the taxpayers in my riding and I suspect in most areas of the province, their reaction to this budget was obviously based on what affected them in the budget. Most people, obviously, judge a budget by the taxes, whether they go up or down; in this sense, obviously, this budget was a bad news budget for the man on the street.

Most people, I think, are resigned to increases in the alcohol and tobacco taxes and regard them as virtually the inevitable price of indulgence; but the same people are angry and upset when they see the Davis government is raising the gasoline tax, raising the already obscenely high cost of OHIP premiums, and worst of all imposing a brand new telecommunications tax, especially on cablevision.

What really angers people, and rightly so, is the lack of equity and fairness in this budget. The little guy, the man who works in a factory or plant or office, the small businessman, the retired person, the paper worker, the textile worker, the chemical worker, the office worker, the cab driver, the hospital worker, the maintenance worker, the school teacher, the fireman; none of these people would seriously object to a tax increase if they knew that the burden of the tax increase was going to be equally shared by all sectors and classes of society. But obviously that is not the case in this budget and that is what is so wrong with this Miller budget.

[9:30]

Let me illustrate that point. While we increase the most expensive medical care premiums in all of Canada a further $24 a year or five per cent per family, at the same time we are giving away $100 million to the pulp and paper industries in this province, despite the fact that they had an average increase in their profits last years of 94 per cent. While the average worker received an increase of only six per cent in wages last year, the pulp and paper companies increased their profits by 94 per cent, and in some cases by as much as 150 per cent. Who do we take the money from? The worker who gets a six per cent increase. Who do we give the money to? The companies that average a 94 per cent increase.

While we impose a brand new tax on cablevision we completely remove the succession duties on estates of over $300,000 in value. In a town like Cornwall, where most people now have cablevision, that means this new tax will hit the vast majority of the residents, while the removal of the succession tax will benefit only a tiny minority of our citizens.

While we impose a two cents per gallon tax on the average man in terms of gasoline and inevitably drive up his cost of living at the same time, we reduce the mining taxes for poor little enterprises like Inco, Falconbridge, Denison Mines and Rio Algom, some of whom are already the worst examples of corporate welfare. It’s almost staggering that we can raise taxes on the little man, yet companies like Denison scored a profit of over $1 billion on the uranium deal and we’re giving further concessions. We gave them what I think was a $300 million interest-free front-end loan at the beginning of it all. So here we are: Steve Roman getting our money interest free, plus further tax concessions, and we hit the little guy on the street.

While we again increase the cost of licence fees and the cost of such essentials as milk, bread, hydro, this government proudly announces it is going to give away another $200 million to the manufacturing sector in the name of employment, rationalization and modernization.

We see in the paper just this week that milk has gone up four cents; we hear on radio and TV today that Hydro wants an 18 per cent increase for next year; and we all recall that automobile licence fees went up earlier this year.

Is it any wonder the average taxpayer, who is already fighting a losing battle with the cost of living, is so critical and so cynical when he sees such glaring and obvious inequities in the budget? He sees his own government in Ontario fuelling the fires of inflation while at the same time telling the taxpayer to lower his expectations and to exercise greater restraint and greater self-discipline.

Yesterday my notice was caught by a little item in the Toronto Star entitled, “Family Taxes Cost More Than Food.” I would like to quote very briefly from it because I think it has a lot to say.

“The average family spent more paying personal taxes in 1976 than it did on food and medical care combined. The federal agency, Statistics Canada, discovered the average family used 18.7 per cent of its budget to pay personal taxes. Food expenditures were 16 per cent, shelter 15, clothing seven, transportation 12.3, medical and health two per cent.”

Those were the latest statistics, 1976, and taxes were taking the greatest single proportion of a family budget. Since then in Ontario we know tax increased in terms of OHIP, sales tax, retail taxes. Imagine what that figure would be today for an average family earning $15,000. As if it was the worker who was causing the price of hydro, the price of gasoline, home heating oil, medicare, meat, produce, canned goods, et cetera, to go up. That is what makes it so maddening to the taxpayer. He’s a victim of the rising cost of living, yet when he tries to catch up -- not keep abreast but merely catch up -- with those increases, he is told that he’s the cause, he’s the source of the problem. What a farce. What a travesty.

I would like to turn my attention now to some of the specific taxing policies of the budget and suggest some alternatives.

First of all we have the infamous increase on OHIP premiums. Ontario charges the highest premiums in all of Canada, and yet in the past two years this government has raised those premiums by over 62 per cent when they were already the highest premiums in all of Canada. Now we are being asked in this budget to raise them yet another five per cent. I’ve heard of punching a guy in the belly, I’ve heard of kicking someone when they’re down, but this is tantamount to gouging his eyes and scarring his face.

We’re hitting at people who are already paying the highest medicare taxes in all of Canada and here we are telling them to pay another five per cent on top of that. This is all at the same time the Minister of Health is continuing to cut back on hospital beds, closing some hospitals reducing some services, and when more than 18 per cent of our doctors have opted out of OHIP and are actively charging OMA rates which are at least 30 per cent higher than the OHIP rates. We all know that extra 30 per cent comes from only one place -- the pocketbook of the same beleaguered and now bloodied taxpayers. It’s no wonder a family man earning $15,000 in Ontario pays the highest taxes in all of Canada, if one includes all the taxes he really pays at the provincial level.

Now, to make matters worse, we read in the papers the OMA wants to inaugurate the nefarious practice of double billing in this province. In other words, they want the advantages of OHIP, plus the advantages of a second billing. I don’t want to go into this in any great detail today, but let me say I certainly hope the Minister of Health is going to display more guts and more backbone in dealing with this demand than he did with the recent credit card question. I believe he has a solemn duty to stand up for the taxpayers of the province and fight for their interests on this issue, instead of caving in, as he did on the credit card issue.

I notice this issue has aroused quite a bit of controversy in the Toronto press. Even the Toronto Globe and Mail and the Toronto Star have combined today to condemn the OMA for its demands. We in this party believe very strongly in the need for medicare, the need for a universal system, where everybody has accessibility. We will fight any such demand for double billing.

I notice the party to my right, the Liberal Party, has endorsed the same position. The Minister of Health has said the same thing. I point out the Toronto Star has said the same thing. The Globe and Mail has said the same thing. There’s virtual unanimity in this House that we cannot afford any system of double billing. It would be a retrograde proposal, unacceptable to the vast majority of the people of Ontario, and it would deprive patients in Ontario of their just rights to have adequate medical services.

Getting back to the tax itself, our party has made its position clear; namely, the premiums should be abolished and the program should be paid out of general tax revenue, as it’s done in six other provinces.

I notice that the Economic Council of Ontario -- certainly no hotbed of NDPers or social reformers -- spoke of the fundamental inequities of the OHIP system.

Mr. Sargent: Got to look after their friends, George.

Mr. Worton: Excuse me, could we have a quorum call, please?

Mr. Speaker called for the quorum bells.

On resumption:

Mr. Speaker: The member for Cornwall may continue.

Mr. Samis: I’m glad to see such a vast audience, especially considering the competition this evening. As I was saying earlier in my speech, referring to the recent report by the Ontario Economic Council, Update 1979, I’d like to quote from their comments on the whole system of OHIP premiums. They point out what they regard as seven fundamental weaknesses. I quote from them in point form:

“Premiums impose a disproportionate burden on low-income families. Although the poor are exempted, the near poor pay as much in premiums as do others. However, their judgement that a certain tax -- for this purpose, we may treat premiums as taxes -- considered in isolation is regressive is not enough to condemn it. The equity of the whole tax system is what matters. Moreover, as a result of inflation, the premium system is now, despite recent increases, a less regressive feature of the whole system than it was earlier.

“Finally, a significant fraction of the total premium income of the province is paid in the first instance by an employer for their employees.

“A uniform family rate means that a family of two pays the same rate as a family of eight.

“Premiums are relatively costly to administer.

“Premiums are not likely to have a significant impact on patients’ use of health services because they’re not experience-related.

“Premiums do not promote consumer awareness of the costliness of health care because the revenues collected through them are not earmarked for health-care purposes and represent only a small proportion of total costs incurred. Indeed, they may create a false impression in the minds of the public that those costs are lower than, in fact, they are.

“Most of those eligible for full or partial premium assistance have not applied for it, being unaware of their eligibility or of the application procedure involved. The system has been, so far, unable or unwilling to enforce universality, though it is likely that this deficiency could easily be corrected.

“Rates require periodic upward adjustment, if the revenues deriving from premiums are to continue to be pegged to a fixed ratio of total health costs incurred. Moreover, the exemption levels for those receiving full or partial assistance in inflationary periods, also need adjustment on a periodic basis.”

As for the new taxes contained in the budget, namely, the telecommunications tax and especially the cablevision tax, which I find regressive, deplorable and unfair, I’d like to say that obviously the purpose of the tax is to raise money for the government, which is legitimate. But in the case of the cablevision tax, we’re talking about a princely sum of $7 million.

Everyone knows that once a tax is imposed in any society, it becomes a reality. There is only one direction in which that tax can go, and that is up. That’s been the history of the income tax, the customs tax, the excise tax, the retail sales tax and virtually every other tax imposed on the consumer. As sure as we’re here in the Legislature tonight, I can guarantee that once the government gets its foot in the door on this tax, it will go up. I’d be willing to bet that within three years it will be at least double what it is tonight, if we pass this tax.

[9:45]

Instead of taxing the senior citizens and the working men and women who are overtaxed as it is, I would strongly suggest that we scrap this nebulous tax altogether and raise the capital tax rate on the wealthy behemoths of high finance, which keep recording fantastic profits every year -- namely the banks -- from a mere 0.6 per cent to a full one per cent, instead of the proposed 0.8 per cent. Goodness knows the chartered banks can certainly afford to pay the extra 0.5 per cent. The people of Ontario would regard this as far more equitable and meaningful if we did make such a change. We, in the NDP, would support such a change and I dare say the overwhelming majority of the citizens of Ontario would do so as well.

One tax I would like to discuss briefly is the portion of retail sales tax that grants a maximum $700 rebate on solar heating equipment. My point is that while I support the rebate, I believe it would have been far better had we introduced a decent home insulation program that would have reached far more people than this measure. Such a program, as proposed by this party over two years ago, would have produced over 8,000 jobs. It would have reduced the heating bill for the average consumer. It would have reduced Ontario’s overall consumer demand for heating fuel and would have been an excellent long-term investment by the government of Ontario.

In terms of the mining tax reduction and the abolition of succession duties for estates of over $300,000, I would like to state briefly in the context of the tax impositions of this budget, they represent another fundamental inequity in the budget. For us to reduce taxes on Denison mines after the colossal profit it made on the recent uranium deal with Ontario Hydro, and to grant further concessions to a company like Inco with its abysmal pollution record, its callous investment policies and its contempt for the people of Sudbury, verge on the obscene and repulsive. It certainly makes a mockery of any lip service ever paid to the concept of equity and fair play in our tax system.

I would like to turn my attention to the strategy and philosophy underlying the budget because there are two basic premises or concepts with which I take strong issue.

First of all, implicit in the government’s creation of the Employment Development Fund, alias the corporate Wintario program, is the idea that whatever ails our economy can be remedied by healthy giveaways of public funds and there need not be any substantial or even minor structural changes in the shape of our economy. In other words, we accept the economic status quo, we tinker with it a bit and we hope things will run better or more efficiently. That approach towards the economy I just can’t accept.

When I look at Ontario’s economy and see how much of our economy is foreign owned, I cannot accept a situation where we exist in a neocolonial economic status. When we see that over 55 per cent of our manufacturing industry is foreign owned, 82 per cent of our chemical industry, 99 per cent of our rubber industry, 74 per cent of our electrical industry and over 90 per cent of our automobile industry, it is no wonder our research and development record is one of the worst in the entire industrialized world; or that we lead the industrialized world in the importation of high technology goods; or the Canadian deficit on fully manufactured end products is $12 billion; or our percentage of the GNP spent on R and D has actually declined in the 1970s; or that from 1951 to 1976 the percentage of jobs created by the manufacturing sector has actually declined by 25 per cent; or that from 1970 to 1975 our share of the world export market has declined from 5.4 per cent to 3.8 per cent, a decline of almost 30 per cent; or that high technology foreign manufacturers have increased their penetration of the Canadian market from 32 per cent in 1964 to 52 per cent in 1975. I could go on, but the point is very simply the problems are structural and they are fundamental.

The Science Council of Canada has convincingly documented how foreign ownership of our economy has had a crippling effect on the development of our technology, our own R and D, and our own overall competitiveness in the world market.

I notice on a more regional level the percentage of the workforce in manufacturing declined in the 1970s, if I look at the statistics put out by Statistics Canada. I emphasize these are the StatsCan larger-firm data statistics for the cities of Belleville, Brockville, Cornwall and Kingston. The percentage of the workforce employed in manufacturing, from September 1971 to September 1978 declined in Belleville from 63 per cent to 57 per cent. In Brockville, we are talking of a decline from 75 per cent to 71 per cent. In Cornwall, we are talking of a decline from 64 per cent to 58 per cent. In Kingston we’re talking of a decline of 47 per cent to 36 per cent.

Those figures, even in eastern Ontario, the least industrialized part of the province, again clearly illustrate how the manufacturing sector is not creating the jobs that it used to. The Treasurer and the Minister of Industry and Tourism (Mr. Grossman) do not speak to these realities. Instead they tend to gloss it over and say that the government must only act at the behest of the private sector and only act to make the existing structure of the private sector healthy again. I cannot accept such a simplistic and defeatist policy.

There’s no mention or no stated intention of aiming for any type of economic or technological sovereignty. There’s no new or meaningful thrust to stimulate Ontario-based research and development by the private sector in this budget. There’s no commitment to use the leverage of government to get us out of our truncated colonial position in the field of technology. There’s no commitment made to Canadian manufacturing as distinct from the multinationals. There’s no commitment to getting greater control over our natural resources, or at least of getting a greater return for our nonrenewable resources as Saskatchewan has done so successfully. There’s no commitment whatever to greater processing in refining of our natural resources in Ontario.

In the absence of any commitment in any of those vital areas, any so-called industrial strategy has to be a mere Band-Aid, half-hearted, superficial excuse for a dynamic, substantial, overall structurally-oriented industrial strategy.

In the creation of the Employment Development Fond we’re merely putting the taxpayers’ money into a huge trough and then inviting the public sector to line up and gorge themselves at the public expense. Haven’t we had enough of this sort of ad hoc-ery in Ontario?

Mr. Philip: We sure have.

Mr. Samis: We in the NDP are positive about Ontario’s economy and we believe that Ontario can achieve full employment; that our economy can become healthy; that we can develop a high technology, competitive manufacturing sector; that we can create more jobs in the natural resource sector by asserting our sovereignty; that we can modernize our electronics industry so it can be more competitive in a difficult but booming electronics market; that we can, and we must, stop the trend towards slithering into the recesses of the US-based multinational corporate empire; that our forest products industry can be competitive and expand in the future; that the talent, the ingenuity, the drive, the ambition of the people of Ontario can be mobilized into breaking our near total dependence on the branch plant economy; and that we can become sovereign in a variety of selective but key sectors of our economy.

We believe that the government and the private sector can work together, but not on the giveaway terms of the Tories. We fully recognize that the government will have to provide incentives to achieve some of those goals. We want to get the most for our money, but we don’t intend to give it away in the absence of any overall economic plan that will produce basic structural changes in our economy.

My colleague the member for Nickel Belt (Mr. Laughren), our formidable Treasury critic, in his response to the budget outlined the basic conditions that we in this party would want to see met in our incentive plan, and I think it’s important that they be remembered.

Very briefly: One, an economic plan must be in place, specific sectors of the economy selected and a major commitment made to their growth and success; two, economic sovereignty must be a key part of that economic plan and incentives must be designed to meet that goal; three, import replacement must be a central consideration in any incentive program; four, specific sectors must receive a major commitment so the goals of self reliance and job creation are pursued with vigour and consistency in order to avoid the shotgun approach of this government; five, incentives must have built into them individually tailored agreements based on the combination of job creation, equity participation, research and development guarantees, environmental commitments, buy-Canadian commitments and the reinvestment of profits in Canada; six, regional development must be an essential consideration before any incentives are dispersed, we certainly do not want to duplicate the Tory policy of building up the golden horseshoe at the expense of slow- growth regions like eastern and northern Ontario; seven, there must be a serious, comprehensive employment impact study carried out before -- and I emphasize that -- before any applications are approved. We are not prepared to accept the policy of grants and handouts without rigid, specific, concrete commitments of job creation in any sector that’s receiving public funding. The example of Inco was a lasting testimonial to the bankruptcy of the policy of no-strings handouts and giveaways.

The second basic premise of this budget I would like to discuss is the whole question of the strategy involved in the Employment Development Fund and how it is to be used. What worries me is a speech made by the Minister of Industry and Tourism on February 21. He said: “In the dispensing of grants and loans, the government must abandon its policy of universality in favour of aggressive selectivity. I believe the time has come for the government to try backing winners, putting money into sound enterprises that need to become stronger or larger and on potential winners that may need an extra bit of help to come into their own.”

If one is to gung-ho back these so-called winners, as the minister envisages them, I think we can imagine what’s going to happen to eastern and northern Ontario. We know that the so-called strong are primarily located in the golden horseshoe and we know that the small, innovative Canadian entrepreneurs beyond the horseshoe are going to be virtually ignored by the fund and the ministry.

The minister fails to talk of the crucial need for regional development and the need to modernize his regional development policy. All one has to do is look at the unemployment figures beyond Metro. For example, in February in northeastern Ontario, we are talking about an unemployment rate of 9.4 per cent; eastern Ontario, 8.3; Peterborough, nine; Hamilton-Niagara, 10.7; St. Catharines, 14.5: and Sudbury, 12.1. I think the figures speak for themselves. The government just cannot ignore the needs of northern Ontario, eastern Ontario and Niagara. I am really afraid that the development fund and the policy advocated by the Minister of Industry and Tourism will serve to aggravate the already substantial regional disparities that exist in this province.

While I accept the emphasis on the need to build up certain sectors of our economy, I also strongly believe that the government must stimulate development in the slow-growth areas at the same time because we simply cannot divorce our economic needs from our social needs in this society.

I came across a speech made by the member for Brock (Mr. Welch), which I think reflects the fears and concerns of many of us who don’t live in the Metro area. It was made at the Armourdale PC Association, of all places, on March 5. He said: “We are continuing to recognize that all programs developed by this government must be complementary in guaranteeing that our development and growth are geared to the benefit of all and that our resources are truly directed to developing both greater quality and greater equality among people as well as in our economy.

“I guess the essence of what I am trying to say is that there’s a strong relationship between what we do economically and what we can do in the social services. While we must continue to be concerned about the creation of new jobs, we must also continue to direct our efforts to making sure that some of those jobs are available to those who need them most.

“Our industrial development incentives should have social as well as economic priorities built into them. As part of the program, we will continue to devote greater effort to offering incentives and subsidies to industries willing to create jobs in communities where they are most needed and able to give training and jobs to those who are otherwise left behind. How else can a government or a party keep in touch with the human dimension?”

I don’t think much more needs to be said beyond the fact that I would hope that the minister and the member for Brock, who is one of the few remaining red Tories on the government side, will be able to convince the Minister of Industry and Tourism to pay heed to those concerns and to those fears because we on this side certainly share them.

We on this side also strongly believe that while this government has paid lip service to the idea of decentralization, it has failed to deliver the goods, even its own ministries, not to speak of economic development. I refer to the promise to transfer the OHIP office and stall to Kingston, or should I say the aborted move to Kingston? There was a great hullabaloo in the last election. The government had finally realized the error of its ways and decided to atone for its many sins by announcing that 800 employees of OHIP would be transferred to Kingston. Here we are almost three years later, and how many have moved? In fact, I think the question is now, will any of them be moving to Kingston?

We can see how the government has recently reduced the role of the development corporations in eastern and northern Ontario; how much the publicized industrial park showcase in Edwardsburgh proved to be a complete election promise and busted wide open; how the government failed to develop the mining machinery industry in northern Ontario, despite the convincing arguments presented by the members of this caucus from northern Ontario; how the government has failed to create jobs in northern Ontario by allowing so much of our natural resources to be exported elsewhere; how the independently owned cheddar cheese factories in eastern Ontario have been allowed to virtually disappear and be gobbled up by Kraft and the multinationals; and how the so-called Design for Development PR programs have proved to be empty and devoid of any commitment or any real thrust for the development of eastern and northern Ontario.

[10:00]

We have seen how this government has failed to decentralize and failed to develop any coherent, meaningful, aggressive regional development policies for either eastern or northern Ontario. The slow-growth record of those two areas makes it much more critical that the employment development fund not all be funnelled into the golden horseshoe, or used solely to assist the so-called strong industries located primarily in southern Ontario.

We in this party recognize the need, the role, the vitality, the importance of Canadian entrepreneurs in Canadian small business, especially beyond Metro Toronto. We know that small business is a crucial force in the task of creating jobs in Ontario and we know that recent studies clearly demonstrate that vitality and importance. In fact, recent statistics indicate that whereas in 1961 to 1971 small business created 20 per cent of the jobs, and in 1971 to 1977 58 per cent of the jobs, in 1977 small business created 53,596 new jobs. In other words, 88 per cent of the new jobs created in that year were created by small business.

In terms of overall employment, small and medium-sized Canadian-owned enterprises represented about 40 per cent of private sector employment, and in terms of the crucial manufacturing sector, small firms created 34,271 new jobs in the period 1971 to 1977, or about 55 per cent of the total new jobs in manufacturing, a virtual 900 per cent increase over the period 1961 to 1971.

We believe the government must pay more attention to the small business sector, and we are firmly opposed to the growing trend of corporate takeovers and the subsequent concentration of power in the hands of fewer and fewer and fewer people. It is not healthy for the consumers of Ontario, it is not healthy for the small business sector when, for example, the Thomson interests can effectively control the Bay, Zellers, Simpson’s and part of Simpsons-Sears.

We believe that competition is healthy for the private sector and we favour government supporting the growth of smaller enterprises, rather than the corporate cannibalism we are witnessing in the retail sector recently in the forest products industry. We are strongly opposed to cartels, monopolies, or oligopolies, and we believe that the recent manifestations of vertical integration are an ominous danger to the competitive nature and health of the private sector.

We are not opposed -- and I want to emphasize this -- to mergers in the manufacturing sector, which are designed to improve the efficiency of the firms to create more R and D, and more and better technology. But when we are talking about foreign takeovers, which this government has done nothing to resist, or corporate cannibalism, we are strongly opposed to it, because we want to protect the interests of the consumer and the Canadian entrepreneur.

I believe that a strong, healthy, competitive Canadian-owned manufacturing sector is the backbone of our economy in Ontario, and I believe that this government is not giving enough attention to the Canadian-owned sector and is giving too much money and too much attention to the American and other foreign-owned interests in the private sector.

While I applaud the creation of the Small Business Development Corporation, I note the failure of the previous VIC program, and the headline in the April 14 edition of the Globe and Mail section on business was, “Miller Concedes Program of Aid for Small Business May Not Work.” In a speech to the Toronto Association of Business Economists, the Treasurer places great hope in the “fun and profit instincts” of businessmen, and while I certainly regard the SBDC program as a definite improvement over the discarded VIC program, the fact remains there are still some obstacles to be overcome for it to be a success; namely, Ottawa’s approval for tax purposes; whether or not entrepreneurs will want to give up 49 per cent of their business, or whether investors will be satisfied with a minority interest; or whether the banks and trust companies will invest money in a company they would not have loaned money to or invested in anyway. Let me emphasize, I hope the program succeeds because the small business sector is in need of this kind of venture capital stimulation, but the jury is still out on this one at the present time.

Before leaving the topic of small business, I want to point out that the NDP government in Saskatchewan has operated a very successful program to assist small business since it introduced its five-point program in 1978. That program has aided companies with sales of less than $500,000 a year with forgiveable loans; it provided financial aid for product testing, modifying or improving existing products and developing new products. It also helped share the costs of management consultants and subsidized travelling costs incurred in attending management upgrading courses.

It provides for assistance for small town merchants in its Main Street Program to improve their store fronts. It provides for assistance to municipalities to provide parking, lighting, sidewalks, et cetera, and it also provides loans for the establishment of new businesses or purchasing and existing business. It has worked well, Mr. Speaker, and I only point to the Globe and Mail as proof of that.

We in this party believe in curbing the power of the cartels, the monopolies and the combines, and building up our Canadian and small business sector. Although I do not have time to go into detail, I want to emphasize that our party presented a detailed job-creation program over a year ago in this Legislature. We calculate if that program were to be implemented it would create upwards of 45,000 new jobs in Ontario. It is a specific eight-point program. It is costed out at $350 million, and in contrast to the $300 million interest-free loan to Denison, to the $100 million giveaway to the pulp and paper industry and the $200 million corporate Wintario give away it is guaranteed to create a specific number of jobs and provide a definite return on the investment. This budget was noticeably devoid of any specifics on job creation and as such it was cold comfort to the 350,000 citizens of this province without jobs.

Before closing I would like very briefly, to point out that the good people of eastern Ontario still have a concern about the longstanding problem of the Quebec construction workers. It is a matter we dealt with, I think last June, in this Legislature. We passed legislation -- I am glad to see the minister is still here -- but we still have not resolved the problem. I know he has been engaged in negotiations with Gerhardt Johnson, but we have had that story with his predecessor (Miss Stephenson), as well, and we still have no agreement.

We have no legislation for the workers of Ontario either, because we have not sent it to committee and we have not sent it for third reading. So the workers in eastern Ontario are caught between the two. Obviously there are differences of opinion in this House as to what should be done, but I know in my constituency the opinion still is that in the absence of any agreement, and it does not look like we are going to get one, we should proceed with the bill and make it law.

I would hope the minister would proceed on that basis if there is no immediate hope of agreement, because we have been negotiating for I think about two years now -- at least 18 months -- and we have been unable to reach any form of agreement.

Mr. Philip: They are dumping on our dump trucks too.

Mr. Samis: Speaking of dumping, the good people of Cornwall are concerned about the Ontario Hydro development program in eastern Ontario. The number of sites has been narrowed down to I believe two in the Prescott-Iroquois area, but after what has happened in Pennsylvania and after recent revelations at Pickering, and more immediately Bruce, and some of the inadequacies at Bruce and Pickering, we do not want to be the latest addition to the family of nuclear-dominated communities. We do not have confidence the nuclear power option is anywhere near as infallible as its proponents would have us believe, and we do not share Hydro’s unblemished faith in the safety of the nuclear option. We in eastern Ontario would far rather see a meaningful conservation program and reduction in Hydro’s vast capital expansion program, rather than construction of any form of nuclear plant in eastern Ontario.

Two final points: I noticed recently in the newspaper the new summer theatre near Upper Canada Village may be in danger of not operating this summer. I would appeal to the Minister of Culture and Recreation (Mr. Baetz) not to allow that to happen. We in eastern Ontario badly needed something like this. It has only been operating for one year but it is so important to the expansion of tourism in the summertime that we cannot allow this new venture to succumb to bankruptcy or to close. We must do everything possible to assist the efforts of George Blackburn and other people to make sure that summer theatre operates this year. If changes have to be made, fine, but in no way should we ever allow that theatre to go under.

Speaking of going under, I want to make my final comments about those good residents of eastern Ontario, the milk producers, who are having all sorts of problems with their cheddar cheese. We have seen the province of Quebec prosper. We have seen the size of their milk pool increase by something like 22 per cent. We have seen the situation in Gananoque where 80 employees lost their jobs in a cheese processing plant that was capable of producing one million pounds a day. Ironically enough, the company that bought that plant was a Quebec-based plant which is now operating in the Rouyn-Noranda region in northwest Quebec, and every pound of their product is being sent to Toronto to supply the Ontario market. Yet our cheddar cheese factories in eastern Ontario are crying for more milk and operating at only 49 per cent of their quota capacity.

Ninety per cent of the cheddar cheese produced in Ontario is produced in eastern Ontario and our production last year dropped by something like 16 per cent while Quebec’s production increased by 15 per cent. The number of our producers since 1976 has declined by 24 per cent, while Quebec’s figure has increased in the same period from 1966 to 1976 by a whopping 94 per cent.

Quebec now processes 82 per cent of the butter and 81 per cent of the skim milk. We don’t begrudge that. We realize their problems with the national quota. But we just can’t sit idly by and see our cheddar cheese industry in eastern Ontario fall victim to bankruptcy or the whole political situation in terms of allotting quota.

It’s a vital industry in rural eastern Ontario. It’s a long-established industry in eastern Ontario. It has provided the people of Ontario with some of the finest products in the dairy field and we feel this government has a definite obligation to continue the cheddar cheese industry and do whatever it can to negotiate a better quota arrangement and a better deal for the cheddar cheese manufacturers.

In closing, Mr. Speaker, I want to thank you and the members for your attention and on behalf of the people of Cornwall once again I express my disappointment in the policies of the budget and I would urge that the needs of eastern and northern Ontario receive far greater consideration in the upcoming months.

Mr. Havrot: Mr. Speaker, I would first like to thank you for the opportunity I have this evening to speak during the budget debate. I might add that I concur with the remarks of the member for Cornwall with regard to cheddar cheese manufacturing. I have some good news for the member -- of course, it’s coming into my riding -- that Balderson Cheese Limited have purchased a small cheese factory in the Earlton area and will be consuming the 36 million pounds of surplus milk that is going but of the riding of Timiskaming over to the Quebec side of the Rouyn-Noranda area which the member has mentioned.

Aside from a few of my concerns relating directly to northern Ontario and my riding of Timiskaming itself, there is one other issue which I would like to discuss and this relates to the matter of the health premium increase which was announced in the budget.

Some members have found fault with our government’s decision to move away from a balanced budget by 1981 and seek what now appears to be the more realistic target of 1984. I would say that this flexible and pragmatic approach to fiscal strategy is one which the former Treasurer himself adapted. Indeed, the Treasurer’s opening remarks upon presenting the 1977 budget went as follows:

“Our objective is to have the capacity to balance the Ontario budget by 1981. This is not an inflexible commitment. Indeed, economic conditions or social needs may make it inappropriate or even impossible to achieve this target by 1980-81.”

As things have turned out, the pace of economic recovery has been slower than anticipated and this has slowed revenue growth appreciably. In addition, our co-operation with the federal government last year in reducing the retail sales tax temporarily further reduced revenue yields. Since the revenue side of the equation was not what we might have wished, it has been necessary to take a long, hard look at the spending side. Any successful attempt to contain government spending must focus on the size of the public sector and its wage bill.

We do not intend to allow restraint for ourselves, however, to mean hardship for others. The government continues to allocate most of its resources to areas of high social priorities including health, education and social service institutions.

For example, the budget of the Ministry of Community and Social Services has been increased by 6.9 per cent to provide greater emphasis on support services to the elderly and handicapped, and the existing high quality of Ontario’s health services is being upgraded with the extension of the home-care program for the chronically ill into additional centres in the province.

As I said, I would like to make some mention of my thoughts regarding the means by which health care services are financed.

[10:15]

The largest portion of health cost will continue to be financed through general revenues. Even though premiums have become subject to this moderate increase, over the years premium increases in this province have not been a cruel, calculated attempt to extract tax dollars unfairly; they have been a legitimate attempt to maintain the flow of funds from citizens wanting coverage through health insurance, with the government picking up a large part of the tab in any event, and the government further telling those who couldn’t afford even the premiums not to worry, that either part of the premium or the whole thing would be written off.

I’ve heard a lot of talk about how the health system might better be financed. I’m certainly prepared to say that since the system is not perfect, there is obviously room for improvement; but before we throw the baby out with the bathwater, I think we should remind ourselves that premiums aren’t entirely a bad thing, and in fact do serve a greater purpose than simply filling government coffers.

People paying premiums, either directly or through their employers as a taxable benefit, are reminded that this whole health system is not just a big arm of an ever-increasing government. In a very real sense our Health system revolves around a private relationship between patient and health-care practitioner, or if you like between consumer and retailer.

As a government we try to help both sides, but we know that by swallowing the whole thing up we would probably do great damage to the system. If we swallowed up the system on what economists would call the demand side, we would simply abolish premiums and use the phrase consolidated revenue fund to help convince people that the whole thing was a free ride.

If we swallowed up the equation on what economists call the supply side, we would turn doctors into civil servants and tell them that big brother always knows best.

Mr. Philip: You might turn them into professionals instead of just merchants.

Mr. Havrot: As it is, Mr. Speaker, we’re walking a very difficult tightrope, and I might add a very expensive one.

The bill for health services this year is expected to be over $4 billion. I think those vital health dollars are being raised in a fair and honest way. I think my constituents will well understand the government’s need for an additional $2 per month per family, especially when they consider that this 5.3 per cent increase will be less than the growth in the cost of insured services, which are projected to increase by 5.5 per cent.

Mr. Philip: Equivalent to the estate tax you just took off.

Mr. Havrot: As a citizen of Ontario, I am interested in changes within the social service spending programs.

Mr. Philip: You do more about the dead than you do the living.

Mr. Havrot: While northerners are just as interested as southerners in health-care financing, we do intend to look at the budget, just as we look at government itself, somewhat differently.

Anyone from a northern riding is bound to look at the provincial budget more from the perspective of what it will do to ensure economic prosperity and stability in the north than its effect upon our deficit. Those of us from northern Ontario represent a region which contains only 10 per cent of the total provincial population but almost three fourths of its land mass. There are some pretty special conditions which the geography, as well as the dispersed population, present in the provision of government programs and services.

I know all areas of Ontario have serious problems with unemployment. However, it is still true, I think, that such items as job security, high standards of living and convenient social amenities are things which we in northern Ontario have not yet been able to take for granted.

The member for Chatham-Kent (Mr. Watson), who spoke in this debate pointed at five economic priorities which he felt this government had identified. He mentioned the introduction of incentives to speed the absorption of a highly-educated work force into the labour market. Reducing the rate of inflation was another. Encouragement of domestic investment, integrating the national economy within Canada and also improving our access to foreign markets, were the remainder of that list.

Few of us, if any, can argue with these priorities, because from a long-term perspective ensuring economic health is the only means to strengthen our tax base and thereby improve our social services without increasing deficit spending.

However, something left out of this formula, this macro-economic scheme, is the fact that northern Ontarians economically are in unique, very peculiar circumstances. While someone from southern Ontario will point to the Employment Development Fund and remark that this program will ultimately aid in achieving our goal of a balanced budget, a northerner will likely suggest that we now have a mechanism to inject new vitality into specific communities. Often in the north it is the case that whole towns are dependent on one source for job security. One industry supports the population. Without it, there would cease to be any need or reason for the community’s continued existence. These towns are not blessed with the economic diversity found in the south.

The Employment Development Fund, therefore, has a special significance in the north because, while it does not broaden the economic base of these centres or reduce their dependence on specific industries, it will strengthen the competitiveness of the whole area.

The pulp and paper industry has been much talked about in this House lately. We have heard the statistics about the need for modernization and the cyclical nature of the business; so I will not repeat all that. What I really wanted to do was to bring to the members’ attention that often things are viewed so differently in the northern setting.

My own riding, while not subject to the fluctuations of the pulp and paper industry, does have a unique reliance on tourism as well as on the mining industry. Neither of these activities is of a nature that readily lends itself to becoming a beneficiary of the incentives which are available through the Employment Development Fund, yet both these sectors of the northern economy are of vital importance and have suffered setbacks as a result of the slowdown in our national economy.

During the last three years, if memory serves correctly, there has not been a major mine opened in northern or southern Ontario. Many things have been happening with government and government programs that will ultimately be of great assistance to the mining industry.

The Ministry of Northern Affairs geological survey program will come to completion during 1980. A reconnaissance study such as this, touching on engineering, terrain, mineral characteristics and the aggregate capability of the north will provide us with a basis for future planning and development.

Nevertheless, several factors have greatly reduced the attractiveness of investment in the mining sector of northern industry. The recent depression of copper and zinc prices, as well as a glut in the world nickel market, have made mining prospects less lucrative and have created the nickel surplus being experienced at Sudbury. Also, of course, technological improvements facilitating the recovery of iron from various types of ore have brought many new competing interests on to the international scene.

Ontario’s mining industry is faced with very serious problems. The mining scenario is not totally bleak, however.

Mr. Laughren: Gloom and doom.

Mr. Havrot: That’s right; there’s gloom and doom on that side, but not on this party’s side. We are for ever optimistic.

Texasgulf’s $130-million investment at Kidd Creek, and its $275-million copper smelter and refinery near Timmins, are encouraging undertakings. It warrants mentioning that instrumental in attracting these investment dollars was the northern Ontario mining tax allowance.

I am in wholehearted support of any measures seeking to redirect investment capital to this province. The changes in the Mining Act this year, the reduction of the top marginal tax rate and the mining profits exemption increase, follow on the heels of the former Treasurer’s moves to exempt new mines and major mining expansions from tax; to ease the burden of the mining tax over the whole mineral processing cycle; to remove mandatory minimum deductions of depreciation, exploration and development expenditures; and, finally, to give full allowance of foreign processing costs incurred in processing of Ontario ore.

These measures will no doubt aid the mining industry in northern Ontario. However, I am not sure what they will do for its development. I am still very disturbed that we have failed to greatly stimulate exploration expenditures over the last five years. Sooner or later, a situation such as this is bound to reflect itself upon the economy of the north.

I have had occasion in the past to ask myself precisely how much more clout the mining division, now within the Ministry of Natural Resources, might have if it were more closely affiliated with the Ministry of Northern Affairs.

In three years of operation, Northern Affairs has become recognized as serving a purpose which is singularly vital and important. Most people see it as the co-ordination of all government functions in the north by one body whose sole purpose is to deal with the concerns and needs peculiar to northern Ontario.

Some of the accomplishments of the Ministry of Northern Affairs have been truly dramatic.

Mr. Laughren: Abysmal.

Mr. Havrot: The matter of transportation is one of these accomplishments. In co-operation with the Ministry of Transportation and Communications which has effected the actual construction, the Northern Affairs Ministry is assisting in the expansion of several bypasses, the grading and resurfacing of other roadways and also, quite importantly, the creation of sorely needed passing lanes.

Mr. Laughren: Why can’t MTC do that?

Mr. Havrot: We are getting a lot of roads now since the new ministry has come into being. Maybe it’s the member in the riding that has the drive to attain this goal.

Mr. Laughren: They are terrified of Bob Bain. That’s why.

Mr. Havrot: If there is a key word in economic development of the north, it certainly has to be accessibility. The creation of norOntair and the expansion of its route to include 20 communities in the north is also of great significance.

Mr. Laughren: You are lucky there is a quorum.

Mr. Havrot: In conjunction with the federal Department of Economic Expansion, several major undertakings have resulted from initiatives in the Ministry of Northern Affairs. I have already mentioned the aerial mineral surveys which make up part of the $90 million in DREE agreements signed last year.

The $71.5 million forest management agreement for northwestern Ontario is another major DREE project that will generate jobs and assist in the maintenance and the enhancement of one of the north’s most vital industries.

Mr. Laughren: Are you sure you wrote this?

Mr. Havrot: I did. The ministry has made available to both large and small communities alike services taken completely for granted by residents in southern Ontario. I am speaking of water treatment, sewage treatment facilities, fire protection equipment and a variety of other such things.

The ministry has brought medical and dental services to the north to people who in the past might have had to travel 100 miles or more to see a doctor or dentist. This has been done through such programs as the medical bursary program and the provision of travelling dental coaches.

Mr. Philip: That sure has improved transportation.

Mr. Havrot: How long have you lived in the north?

Mr. Philip: Quite a long time.

Mr. Havrot: You’ve been on Finch Avenue or some place; you don’t even know where the north starts.

Mr. Philip: Tell us about the bread in Chapleau.

Mr. Havrot: You and your bread in Chapleau.

Mr. Ruston: He’s giving you a chance to make a speech.

Mr. Havrot: I don’t trust him.

Hon. Mr. Elgie: He thinks Thornhill is the outer boundary of Canada.

Mr. Havrot: These are just a few of the things the ministry has been doing in the north. The ministry is helping to transform the face of northern Ontario. This is why I would like to see Northern Affairs take over the responsibility for mining in this province.

Mr. Laughren: Oh, my goodness!

Mr. Havrot: The mining industry is a very important factor in the economy of Ontario. In 1977, for example, it generated over $2.7 billion and over 47,000 people were employed in the industry that year. This industry will continue to play a very important role in the economy of Ontario, especially northern Ontario.

Mr. Laughren: Do you know what we got out of it? Just $39 million.

Mr. Havrot: What concerns me is the fact that in the 1978 statistics of the Ministry of Natural Resources, five pages have been allotted to the division of mines out of 104 pages. Therefore, I am proposing that the Ministry of Northern Affairs assume the responsibility of the mines division that is under the Ministry of Natural Resources at the present time.

Mr. Laughren: The Minister of Northern Affairs couldn’t run a peanut stand.

Mr. Havrot: That is why I think Northern Affairs should be administering the mining industry. The ministry would give it the aggressive progressive push that we have seen it do for other things of importance to the north. It would generate expansion opportunities for this industry and increased employment and financial benefits would naturally follow. Mining is important to the people of the north. This ministry would give it the attention it has earned.

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

The House adjourned at 10:30 p.m.