Legislative Assembly of Ontario

The House met at 2 p.m.

Prayers.

STATEMENTS BY THE MINISTRY

AGRICULTURAL INSURANCE

Hon. Mr. Drea: I have for introduction an Act to amend the Corporations Act, the provisions of which will substantially strengthen the premium note farm mutuals in Ontario and provide expanded insurance services to the farming community. The amendment is in response to the growth and changing nature of farming and the needs of rural Ontario society.

These mutual fire insurance corporations, which have traditionally insured farms against fire and associated risks, have been doing business in Ontario since the mid-1800s. Until 1954 the corporations could write only fire and lightning insurance on agricultural land and related stock. Gradually this has been expanded to include windstorm, theft and liability insurance.

All of these coverages, however, are written as endorsements to basic fire insurance coverage on agricultural or rural property. The corporations have not been empowered to undertake classes of insurance open to joint stock insurance companies and cash mutuals under the Insurance Act.

The advent of more expensive and sophisticated farming techniques such as the corporate and part-time farmer has created some uncertainty as to whether mutual fire insurance corporations are empowered to cover certain risks. At the same time, these corporations may be the only insurers willing to provide a full range of insurance protection in certain rural areas of the province.

Historically, the assessable premium note has been basic to the operation of these corporations as a protection for policyholders and claimants.

Twenty years ago, however, the Ontario Mutual Insurance Association, which represents the 52 mutual fire insurance corporations in the province, set up the Farm Mutual Reinsurance Plan. The plan not only has provided stability to the industry but the strong financial base has allowed the expansion of additional coverages in keeping with modern requirements.

In addition, the Insurance Act was amended in 1975 to establish the fire mutuals’ guarantee fund, which guarantees the ability of insurers to meet obligations.

The industry has demonstrated its financial stability and responsibility towards those whom it insures. It has asked my ministry to remove these restrictions which preclude further growth and provision of service. Accordingly, this amendment removes restrictions on mutual insurance corporations and the farm mutual reinsurance plan and empowers these corporations to undertake and transact any class of insurance for which a joint stock insurance company may be licensed under the Insurance Act.

I ask your support in the passage of this amendment which will provide positive and direct benefit to the rural community in Ontario.

TAX APPEALS

Hon. Mr. Maeck: Mr. Speaker, this government places the highest priority on the delivery of the best possible service to the people of Ontario, and we are continually looking for ways to improve customer services.

Mr. Peterson: Five-dollar licence plates.

Hon. Mr. Maeck: That’s one good way.

In line with this policy and its application within the Ministry of Revenue, today I am most pleased to inform the honourable members of new measures taken by Revenue to assist taxpayers in their dealings with my ministry.

On Monday, May 7, a new revenue tax appeals service opened at 1200 Bay Street. On Friday afternoon, October 12, the Premier (Mr. Davis) took part in the official opening of the new office. This is a further indication of the Premier’s personal commitment to his government’s heightened service to the public.

The tax appeals office has been created to deal with all appeals and hearings related to our tax statutes. Together with day-to-day administrative duties required by the tax collection process, appeal activities were previously the responsibility of the individual tax branches.

During fiscal year 1977-78, my ministry received less than 1,300 appeals, which is by no means a large number when compared to the considerable number of taxpayers, corporations and businesses on our tax rolls, as well as the number of tax transactions involved.

We are proud of our record and we are convinced that the consolidation of the appeals function in one separate office can only serve to increase the level of efficiency of my ministry’s service to the taxpaying public. I would emphasize that my ministry deliberately located tax appeals out of head office and away from the administration of taxation specifically in order to provide an added measure of impartiality and independence.

In addition, we will be in an excellent position to ensure consistency in our handling of appeals across all of the taxes we administer. As a result, taxpayers will have greater confidence that they are receiving fair and equitable hearings. Revenue tax appeals will handle all appeals related to the tax statutes administered by my ministry except appeals filed under the Succession Duty Act, the Gift Tax Act and the Land Speculation Act. These will remain the responsibility of the succession duty and land taxes branch because these taxes have been repealed and we are currently winding down related operations.

Our major intent is to streamline rather than change tax appeals. Alterations with existing procedures will be made with this purpose in mind. We will endeavour to keep taxpayers informed as the streamlining process continues. Although tax appeals will be separated from line tax operations, information available to appeals officers will be increased and improved.

Improvement in the appeals process will also be important to my ministry in our ongoing efforts to clarify tax legislation and make our operations more efficient. As well, this amalgamation will make it possible for us to issue comprehensive explanatory material on appeals procedures and to better inform taxpayers of new rulings and decisions.

I know members will agree that the payment of taxes will never be an activity in which any of us will indulge by choice; but certainly I consider it an important responsibility of the Ministry of Revenue to make the process as convenient and understandable as possible. I am sure that amalgamation of the appeals function under revenue tax appeals will provide the taxpayer with easier and more direct access and will make a significant contribution to the efficiency of my ministry’s dealings with the public.

Finally, it is important to emphasize that the benefits of the new appeals service will not be confined to Metropolitan Toronto only. Our appeals officers will continue to travel regularly to other parts of the province to deal with appeals where it is not convenient for taxpayers and their representatives to come to Toronto. Indeed, we believe that the establishment of the new office will allow us to readily improve such regional services, using our existing 13 district tax offices.

VISITOR

Mr. Speaker: Before we proceed to oral questions, I would like to draw to the attention of all honourable members of the House the presence under the Speaker’s gallery of the Honourable Harold Fanjoy, Minister of Supply and Services for the province of New Brunswick. Will you please welcome him?

ORAL QUESTIONS

HYDRO ADVERTISING

Mr. S. Smith: I have a question for the Minister of Energy. Will the minister explain to this House why the consumers of power in Ontario should have to pay an extra $1 million or so for their power to support the placing of ads, such as this roller coaster ad or the television commercials, the yo-yos and roller coaster commercials on the --

Mr. Hennessy: You’re a yo-yo all right.

Mr. Breithaupt: You’ve got a problem with your string, though, that’s the difficulty.

Mr. S. Smith: Amazing, you know; I just mention the word yo-yos, and immediately there is a chord struck across the way.

Mr. Speaker: Is there a question in there some place?

Mr. S. Smith: I was trying to get to one, but they were so excited about the notion of things going up and down.

Would the minister please explain why it is that the users of electricity in Ontario should have to pay an extra $1 million, when Hydro’s mandate is to produce electricity at cost, simply so that the public may be regaled on the television and in the newspapers by stories trying to explain Hydro’s rather poor planning, and trying to put the best possible face on the excess generating capacity? What possible use is that to the users of electricity? Why should we all be paying more for what is basically propaganda?

Hon. Mr. Welch: Mr. Speaker, the honourable Leader of the Opposition had directed this particular question to my predecessor by letter some several weeks ago. As he knows now -- he’s had a reply, both from my predecessor and I understand from the chairman of Hydro, so that a lot of this information was shared with him -- without commenting on the dollars and cents implications of the particular public relations program to which he makes reference, I think it was quite clearly set out that when one considers the implications of making these particular forecasts with respect to power needs, they do in fact reflect on what the consumer will ultimately pay. I think that in view of all the confusion that is generated by conflicting points of view as to what particular process be used in order to arrive at these forecasts, the public of this province are entitled to know and entitled to have the information, which these public relations advertisements share.

I think it’s a very responsible thing for Hydro to do to share this information with the people of the province.

Mr. S. Smith: By way of supplementary: Would the minister not agree with me that the public are entitled not only to know the extent to which Hydro has overbuilt the system, but also they are entitled, unfortunately, to have to pay for the degree to which the system has been overbuilt? Can the minister please explain to me why it makes sense to him that the public should further pay to have the opportunity to see these advertisements trying to defend the poor planning? How does the public conceivably benefit from a program of advertising simply attempting to justify the poor planning of Hydro?

Hon. Mr. Welch: Mr. Speaker, I think it’s important to clarify that what Hydro is doing isn’t attempting to defend anything but rather to share the process, and to make sure that the public have the information they are entitled to have. Indeed, I think it goes without saying that we are very fortunate in this province to be in our present position with respect to the supply of hydroelectric power.

Mr. MacDonald: Since the minister’s own energy policy, as enunciated on October 1, is that we should have conservation and the development of renewable resources, what justification is there for the consumers’ money being spent for advertising to justify continuous building of a system which already has excess generating capacity?

[2:15]

Hon. Mr. Welch: If the member for York South is making reference to the question of the Leader of the Opposition, that program is directed to explaining to the people of the province the process by which load forecasts are undertaken.

Mr. S. Smith: A supplementary then: Since the minister clearly does not have a rationale for these ads, will he see to it that these ads are immediately stopped and not resumed; and would he explain why he hasn’t taken such action in the past?

Hon. Mr. Welch: The simple answer is no. I am satisfied it is in the interests of the electricity customers of this province to have this information.

Mr. Makarchuk: Would the minister care to inquire as to which ad agencies were invited to bid on the program by Hydro, and on what basis was the final selection made for the ad agency that is currently being used by Hydro?

Mr. Peterson: And how much are they making?

Mr. Makarchuk: And how much is the total cost of the advertising?

Hon. Mr. Welch: If the honourable member would place this question on the Order Paper, this information will be along in the usual way.

Mr. Makarchuk: The minister wants two weeks to dream up an answer.

Mr. Peterson: In view of the words the honourable minister has expressed about sharing all of the relevant information from Hydro, would he be prepared to share with them the results of a recent poll on Hydro matters, I understand commissioned by Gallup, with the people of this province?

Hon. Mr. Welch: I wonder if I could have some clarification of the question. What poll is the honourable member making reference to?

Mr. Peterson: In response to the minister, just so I include everything, any he has in the last year on Hydro matters, commissioned either by Hydro or the Ministry of Energy; but I refer more specifically to one I understand was taken about two to three months ago. Will he share that with the people of this House, with his new forthcoming and generous attitude that he has demonstrated here today?

Hon. Mr. Welch: I don’t have any firsthand information in connection with such a poll, so I can’t really respond to the question.

Interjections.

Mr. S. Smith: Mr. Speaker, I have a feeling this will be the first minister who actually mugs himself in the corridors of power.

ACID RAIN

Mr. S. Smith: I have a question for the Minister of the Environment. Despite his wrigglings about having referred only to what was going up and not what was coming down with regard to acid rain, and now that it must be clear even to him that he spoke of acid rain which is sort of downward moving, is he now prepared to take proper action with regard to the sources of pollution within Ontario?

I ask specifically, for instance, what action he intends to take with regard to Inco and to all the other polluters. Inco is not the only one. Given that he now realizes Ontario itself is a source of a good deal of Ontario’s problems, far more than he previously thought, is he prepared now to take strong action in Ontario? Precisely what will that be in the case of Inco?

Hon. Mr. Parrott: I have to say first of all, as I did yesterday, this is indeed a complex issue. Quite frankly, any of the statements that were made yesterday relative to the report were not in disagreement.

I am still very persuaded that one must not take one statement in isolation and draw conclusions from it. I think practically every authority on that subject will caution exactly the same way as that. I am afraid we have been indulging a bit in comparing apples and oranges.

So let me first of all, as I reply to that question, try to address the ratios that have been bandied about in the last 24 hours. There have been two or three of them. There was the 50:50 ratio, the 80:20 ratio, and indeed a 13:1 ratio put forward in the committee.

The ratio of 50:50, from a study released yesterday, referred to the fact that as much total sulphur comes north across the border as is emitted in eastern Canada. It is wrong to infer from this that the acid rain problem is also a 50:50 split. I tell you, Mr. Speaker, that is not my comment, but indeed a summation of the scientists who have worked on this.

My comment on that is the study refers to sulphur emissions only. We don’t argue the 50:50 split as it relates to sulphur, but we strongly believe you must also include nitrous oxide emissions as well. That leads us to some other very interesting ratios, and indeed that’s what we were talking about. The 80:20 ratio was in the Muskoka study. It stated very clearly “that 80 per cent of the acidity in our rainfall” -- and as the member says “of the stuff that comes down” -- 80 per cent of that “came from outside Ontario borders”. As a matter of fact, no scientist is disagreeing with that ratio.

Let me give you additional information from the report that was quoted at some length yesterday. Following page four it states: Canadian/United States emissions: sulphur dioxide (metric tonnes) 25.7 US : 5.0 Canadian; nitrous oxide -- and this is the startling one -- 22 US : 2 Canadian. To be more precise it says 22.2:1.9. If you add those figures you will find the ratio is about 47:7, or nearly 7:1 US versus Canada.

We’ve said in Ontario it’s 13:1 using those figures. All I’m trying to do, Mr. Speaker, is set to rest as best I can --

Mr. Martel: Snow jobs.

Hon. Mr. Parrott: -- the various figures, the various ratios about which none of us are in disagreement. Nor did I take exception to any of the ratios yesterday. Independently, they are all correct, but they must, in my mind, be dealt with collectively. No erroneous conclusions should be drawn from one.

To come to the latter part of the question asked by the honourable leader of the Liberal Party, it really dealt with the issue of who is to blame. As I have said on many occasions, I believe we all are.

I would like to read into this record a letter that was printed in the Globe and Mail.

Mr. M. N. Davison: Is this a statement?

Hon. Mr. Parrott: No, it’s not a statement. It happens to be a fairly long answer, to a pretty important question, to people of Ontario; I’d like to get the facts on the record.

Mr. McClellan: Table it.

Mr. Warner: Table your resignation while you’re at it.

Hon. Mr. Parrott: Mr. Speaker, may I read the letter as the final part of the answer to the leader of the Liberal Party?

It’s a letter from myself to the editor, which was printed, and it reads as follows:

“It should be noted that while Ontario has stated that the majority of acidic precipitation occurring in the Haliburton-Muskoka area has its source in the south, it has never stated that sources in Ontario are not contributing to the total problem.

“The question to be answered is: To what extent and where are Ontario sources having an effect? Ontario is prepared to take action in conjunction with the rest of Canada and the individual US states who have the enforcement responsibility.

“In summary, Ontario’s existing control program has resulted in significant air quality improvements. Ontario is willing to do its part, as we have always been, in this international environmental matter.”

I think that very clearly says we are prepared to take our full responsibility in concert with the US and our Canadian counterparts.

Mr. S. Smith: Supplementary, Mr. Speaker: I must say what I am really trying to find out from the minister is the extent to which he is now going to take some strong action with regard to Inco. May I ask him, by way of elucidating the attitude of the government toward Inco, why it was that the deadline on the control order on their iron ore recovery plant -- to July 31, 1979 -- was extended to March 31, 1980, allegedly because of the strike which happened at Inco, when in point of fact his officials never even bothered to ask the union whether they could have carried on with that work during the strike, permission which I suspect, and which the union says, would have been granted?

Why doesn’t the minister get serious with Inco?

Mr. Laughren: The union doesn’t say that.

Hon. Mr. Parrott: I am prepared to get as serious with the issue as it is possible to do. I also ask the leader of the Liberal Party to get serious about that kind of question. The fact of the matter is, what we were asking to be done in that control order was a study of stack emissions. That means when the plant is in operation. Will the member explain to me how in the world, when the plant is shut down, one could do a study? I submit to the member that is impossible.

Mr. S. Smith: The necessary equipment could have been installed.

Hon. Mr. Parrott: That’s what the leader is saying we didn’t even ask the company to do. It was totally physically impossible to do that study at the time the plant was closed down. I am sure the member would agree. Therefore, there was no alternative but to extend the deadline. That should be as reasonable and as rational as anything could possibly be.

Mr. S. Smith: The equipment could have been installed.

Mr. Laughren: Supplementary, to the Minister of the Environment: When is the minister going to put aside the red herrings and issue a new, specific control order on Inco regarding its emissions from the superstack, particularly in view of the fact that this document from Inco itself in 1975 indicated that within four years it could be down to 1,500 tons a day --

Mr. J. A. Taylor: Are you going to table that report?

Mr. Laughren: -- at a cost of under $300 million? If there is any escalation since then, and the minister uses the figure of $2 billion, surely it has been caused largely by the delays in the minister’s refusal to enforce the control order in the first place.

When will the minister issue a new, firm control order requiring Inco to get down to at least 1,500 tons in four years, which this document says it technically can do; and then get down further to 750 tons, as outlined in the original control order?

Hon. Mr. Parrott: Mr. Speaker, I am prepared to answer that question at great length. But having discussed that report, also at great length, during the committee hearings of last year, I would refer the honourable member to the very same question that he asked and that was answered at great length during that committee debate. I think it would be unwise to go through it again.

Mr. Swart: A short answer.

Mr. Warner: Trying to duck the issue.

Hon. Mr. Parrott: Let me again state Ontario’s position in this matter. As we have said so many times, it is absolutely essential that on both sides of the border we attack the problem simultaneously.

An hon. member: You are waiting for them.

Mr. Laughren: Exactly.

Mr. Warner: You have to ask the Americans when you can do something.

Hon. Mr. Parrott: It is absolutely essential. It would be foolhardy, in my mind, for any jurisdiction to single out any specific industry and say, “You alone, in isolation, must change the problem.” The truth of the matter is that approach won’t work.

As a matter of fact, I take some pride in the fact that I have, I think, on various occasions raised this issue to national prominence. I don’t think there’s any doubt about that.

Mr. Warner: Baloney. You’ve got the leadership of a turtle with its shell on backwards.

Hon. Mr. Parrott: That being the case, as I stated in the Globe and Mail article, I will do, inch for inch, everything any other jurisdiction will do, or that any other company must do. I tell you today, and I put it firmly on the record, we will be as strident with our industries as any other jurisdiction will be with their industries. I don’t think anybody can ask for more.

Mr. Sargent: Mr. Speaker, I have a supplementary to the minister.

In view of the mounting concern in this area, why doesn’t the minister prevail upon our Prime Minister to call a crash conference of all the governors of the adjacent Great Lakes states to bring this problem totally into focus?

[2:30]

Hon. Mr. Parrott: I welcome that question, Mr. Speaker, because quite frankly I think that’s precisely what is happening. There’s no doubt the Premier (Mr. Davis) had written to the former Prime Minister of Canada and those wheels were set in motion. In conference with my counterpart in Ottawa, I’m absolutely assured that the Prime Minister of Canada sees this as a major issue for his discussions with his counterpart, the US President.

I am very pleased to be able to tell members that I believe it was because of our actions in this province -- I’m not going to say myself in isolation; I’m trying partly because of the deliberations that were given so much press in the standing resources development committee -- because of all that background I am positive the Prime Minister of Canada has that as his top priority, or one of his top priorities, with the US.

Mr. Sargent: Why can’t he do something?

Hon. Mr. Parrott: What more could you ask?

Mr. S. Smith: Point of privilege: It seems to me the minister has inadvertently misled the House in his point that the control order naturally required that the plant be in operation for such emissions to be monitored. The control order calls for two things: the installation of equipment and the monitoring of emissions. Therefore, I trust the minister would withdraw his statement that he cannot understand, and correct the record. The equipment could have been installed during the shutdown.

Hon. Mr. Parrott: Mr. Speaker, if that is a contentious issue with the member opposite, I’m more than happy to let the record show it was both. I didn’t intend by any stretch of the imagination to say it was only one. The case I was making then, and still believe --

Mr. Roy: Apologize.

Hon. Mr. Parrott: -- is that a study was essential and it had to be while the plant was in operation. That was the point I was making. If the member wants to amplify it, so be it.

ONTARIO ENERGY CORPORATION

Mr. Cassidy: I have a question of the Minister of Energy arising out of the recent financial report of the province of Ontario. Could the Minister of Energy explain why the government has stripped the Ontario Energy Corporation of $120 million in capital which could have been used for investment in the areas of energy conservation and renewable energy supply and left that corporation with only $37 million, rather than the $157 million it could have had as a result of its sale of Syncrude?

Hon. Mr. Welch: Mr. Speaker, I think that’s a question properly to be directed to the Treasurer of the province.

Hon. F. S. Miller: Mr. Speaker, the moneys left in the Ontario Energy Corporation were the profits on the Syncrude investment. The balance returned to the province was the initial investment plus interest in the intermediate time. That money was used in the Employment Development Fund this year to create jobs -- as it should -- in the province.

Mr. Cassidy: Supplementary: Can the Treasurer explain how we are to believe the government’s assurances about the concern for keeping Petro-Canada as a viable, integrated, publicly-owned national oil company when at the first opportunity available this government turns around and guts the Ontario Energy Corporation of almost all of its resources?

Hon. F. S. Miller: Mr. Speaker, I’ve given up trying to make the member believe anything.

Mr. Warner: Just give up. Resign today.

Mr. Martel: You should give up being Treasurer, because you’re a clown at it.

Mr. Cassidy: Supplementary: Can the minister then explain why it is that the government strips the energy corporation of its assets on the one hand and then suggests in its policy statements that the province should give financial support to the oil companies to develop renewable energy? Is it the government’s position that only the private sector can develop renewable energy? Why can’t the energy corporation be used for that task?

Hon. F. S. Miller: It’s both their right, of course. We had an immediate problem about which I heard a great deal from the member’s party this year; that was the need to create employment in Ontario now -- and we did.

Mr. Peterson: Supplementary: Why did the minister, when he extracted this money out of the Ontario Energy Corporation, set the investment up in the Employment Development Fund as a capital asset when, in fact, there will be no return from that money to the province at all in the future? In fact, it is an operating expenditure.

Mr. T. P. Reid: Slippery financing.

Mr. Peterson: Why did he change his accounting practice with that particular transaction?

Hon. F. S. Miller: The honourable gentleman is more learned in the accounting procedures than I am. I don’t deny that.

Mr. Peterson: I haven’t got the Treasurer’s faith.

Hon. F. S. Miller: I can safely say to the member that we had put $105 million at risk in the interests of oil self-sufficiency in Ontario in Syncrude at a time when other people weren’t willing to put their money where their mouth was.

Hon. Mr. Davis: And you people were critical of it.

Hon F. S. Miller: That turned out to be a success, or it appears to be a success.

Mr. Peterson: That’s not the question.

Hon. F. S. Miller: At the same time we have chosen, in a year when we believed --

Mr. J. Reed: The government could have done better; it could have bought gold.

Hon. F. S. Miller: -- we had a need to stimulate employment, to use that money in the most advantageous way.

Traditionally, money flows back into the consolidated revenue fund. We were simply able to say there was an offset there. We’ve had a bonus of income that might as well be used in Ontario this year to solve the immediate problem, and it was done.

Mr. Peterson: Clearly, that’s not the question. Give the Treasurer a course in accounting.

Mr. Sargent: Supplementary: Did the Treasurer take the $339-million advance to Denison against their $7-billion uranium contract out of the energy fund or where did it come from?

Hon. F. S. Miller: I don’t think that follows the original question.

Mr. Sargent: Doesn’t the Treasurer know about the $7-billion commitment to Denison?

Mr. Speaker: Order.

Mr. Sargent: Where did the $339 million come from?

Mr. Peterson: He won’t answer.

Mr. Speaker: Order. A new question, the member for Ottawa Centre.

HEALTH SERVICE CHARGES

Mr. Cassidy: I have a question of the Minister of Health. Can he explain how it’s possible for any patient in this province to be billed extra by an opted-out doctor without having been told ahead of time, when the minister said in this House on March 29 that the OMA had agreed that all patients would be told in advance? Is the minister also aware that doctors who are not members of the OMA say that they are not bound by that agreement?

Hon. Mr. Timbrell: First of all, let me put this into some kind of perspective. By the time the 11 health insurance plan district offices close today, we will process and pay approximately 250,000 claims for services provided in the main by physicians and other practitioners in the province.

In the agreed-on principles between the government and the medical association as to how the plan should work, clearly, the patient should be told first and, if he is not told he should not pay. The medical association has been very active in assisting individual patients to resolve these kind of problems. I’ve encouraged members of the NDP and all parties, as well as the general public, to draw particular problems to the attention of the medical association so it can act in this role which, as I say, has been fairly successful.

If the member would like to give me the name of this individual, I will personally forward it to the medical association and I think they will be able to resolve it for the individual.

Mr. Cassidy: Supplementary: Perhaps I can give the minister a name, the name of a Mr. Bernie Kelly of Emeryville, near Windsor, who was operated on by Dr. Yovanovich on July 21 and was then billed $113 extra for his broken arm without being told beforehand.

Is the minister saying that, in his opinion, the patient is not obliged to pay this extra fee? What is the minister doing about doctors who say that they do not have to abide by an agreement between the OMA and the hospital association or the ministry?

Hon. Mr. Timbrell: If I remember correctly, this is the same gentleman whose name was used in an open letter to me on September 4 or thereabouts from the member for Windsor-Riverside (Mr. Cooke). I checked at the time and found that the medical association had not, in fact, ever been contacted by the patient, the member or anyone on his behalf.

Mr. Warner: The doctor doesn’t belong to OMA.

Hon. Mr. Timbrell: I will follow this up with the medical association to get its assistance in resolving this particular problem --

Mr. Warner: The minister hasn’t answered the question.

Hon. Mr. Timbrell: -- between this individual patient and that individual doctor as one of the 250,000 services provided today.

Mr. Warner: Oh no; nice try.

Hon. Mr. Timbrell: By the way, nobody has ever told me, but I assume that he got good medical care and that his arm is healing.

Mr. Warner: What an apologist the minister is.

Mr. Conway: Supplementary: On the general question of opting out and balanced billing, can the minister indicate to this House at this time whether or not he will, on behalf of this government, be making a presentation to Mr. Justice Hall’s review of medicare with specific reference to offering advice in this very troublesome question of opting out and the balanced billing that does result therefrom?

Hon. Mr. Timbrell: I do anticipate that we will be meeting with, and making a presentation to, Mr. Justice Hall and whatever staff he engages to assist him in his six-month review. I indicated, as well, at the last federal-provincial conference of health ministers, that I believe that while the learned justice’s review is under way, the federal government should call on the Deputy Ministers of Health to work on clearer definitions of the five, or depending upon your point of view four, underpinning principles of medicare. Clearly, any concerns that exist about medicare in this country relate to the fact that the fathers of medicare very imprecisely defined those principles.

Mr. Cooke: Mr. Speaker, maybe we can get the Minister of Health to answer the question. There was also a second case; that of a Mrs. Hornsey who was operated on by Dr. Kleider in Windsor. She was charged an extra $100, and was billed two days after her operation.

Would the minister be specific and tell us how the OMA can possibly deal with these problems when these doctors are not members of OMA and have informed their patients that they, the doctors, are not obliged to follow the agreement because they do not belong to OMA? Do we have to raise every case in this bloody Legislature? Why don’t you deal with them?

Hon. Mr. Timbrell: I suspect that no matter what the answer is, the member will do what he pleases to get whatever headlines he wants to get.

Mr. Martel: Why don’t you try answering the question?

Hon. Mr. Timbrell: My experience has been, in the last number of months, that we’ve been very successful with the individual cases --

Mr. Makarchuk: Your experience isn’t relevant to the brutality out there.

Hon. Mr. Timbrell: -- in getting these matters resolved, using the good offices of the medical association.

Mr. Cooke: These have been dragging on since June.

Hon. Mr. Timbrell: Since I stood in this House on March 29, and reiterated the principles on which the plan operates, we have paid out of the medicare plan --

Mr. Warner: This is nonsense.

An hon. member: Answer the question.

Mr. Cooke: How are these cases dealt with?

Mr. Warner: You’re a disgrace.

Mr. Makarchuk: Whose money was it?

Mr. Cooke: How about these cases?

Hon. Mr. Timbrell: -- out of OHIP, over 30 million claims.

Interjections.

Mr. Speaker: Order, order. If you’re going to put these questions to the ministry, at least you should have the decency to allow them to be heard in response to them.

Hon. Mr. Timbrell: I am not for a moment dismissing the significance of this to the individual patient. I’m saying that there is a mechanism which has worked well. I may say to you, too, repeat, what I indicated in a written answer to a question last week, that we will in the next few weeks, complete the development of a guide, a list of all participating physicians in the province, and publish that list, which will be available widely to all referring physicians and to the general public.

Mr. Speaker: The Minister of Community and Social Services has the further answer to a question asked previously.

ALGOMA CHILDREN’S AID SOCIETY

Hon. Mr. Norton: In further response to a question raised by the member for Bellwoods (Mr. McClellan) yesterday, relating to the situation at the moment in Sault Ste. Marie: he raised, particularly, a concern about certain outstanding court orders that he was concerned might not be being adequately supervised.

I have made further inquiries through my staff and I am advised that those orders are, to the best of our knowledge at the moment, being adequately supervised. There is at present, I understand, a staff complement of 20, providing high-risk services to high-risk cases. That is compared with the normal staff complement of the society, I believe, of approximately 34.

In response to an earlier concern, we have asked, also, that the society provide us with a breakdown of all of the supervisory orders, since there are a variety of kinds of supervisory orders that the court can issue. On October 9, a statistician was, in fact, retained to carry out that exercise, that to lead to a further meeting with the regional director of our ministry and the supervisory staff to review the list and to ensure that they were being adequately supervised, and to plan for whatever further action might be required.

In further response to the member’s specific concern about whether the society might be found in contempt, I can assure the member it is our opinion that as long as all of these supervision orders of high-risk cases are being supervised -- and it is my information they are -- there is really no likelihood a judge is going to find the agency or staff in contempt.

[2:45]

The member was also making reference to some statements by the director of the agency. I would point out there was a meeting on October 2 with the board of directors and some of our senior staff from the ministry at which the director presented a report to the board outlining which additional staff in his view would be needed to ensure that high-risk cases are serviced. It is my understanding that at that meeting the board gave the director the authority to seek to hire whatever additional staff was necessary in order to meet the obligations under the act. That has led, as I understand it, to the present level of 20 persons trying to discharge that legislative responsibility.

Mr. Wildman: Can the minister indicate whether or not the 20 figure he uses includes supervisory staff? If so, how many of those 20 have been hired since the strike began, how many of them are working full time and how long have they been on staff? In other words, how long have we had the kind of supervision he is talking about which is taking place right now?

Hon. Mr. Norton: That is the total complement of staff. That would include those carrying out administrative duties. But it is my understanding all of the administrative staff is engaged in the supervision of the activities of the society in terms of high-risk cases and responding to emergencies at the present time.

Specifically how many of those have come on to assist to meet the obligations of the act during the period of the strike, I can’t be certain; but according to my recollection, permanent supervisory staff who predated the beginning of the strike constitute only four persons. Presumably, then, the additional staff has been brought on. Whether they are full-time or part-time, I can’t be certain. I assume they are full-time, but temporary.

ROYAL ONTARIO MUSEUM

Mr. T. P. Reid: I have a question for the Minister of Culture and Recreation.

According to press reports the minister made a deal with the federal government in regard to Loto Canada. In making that deal with them he assured them the province and the Royal Ontario Museum would be withdrawing its request from the federal government for something like $12.5 million for the Royal Ontario Museum expansion program.

Can the minister explain why he sold out the province in this regard and where he is going to find the $12.5 million the federal government had been asked for? How does he square having done this and his supposed promise to provide the funds with his remarks before the public accounts committee that more provincial funds were not forthcoming for the expansion program?

Hon. Mr. Baetz: Mr. Speaker, there was no sellout on the part of the provinces to the federal government.

Interjections.

Hon. Mr. Baetz: As a matter of fact, as the press has reported well, the provinces made a very good deal with the federal government.

Mr. Roy: So you say.

Hon. Mr. Baetz: So we say and so everybody else says. We can work with this government, which is more --

Interjections.

Mr. Speaker: Order.

Hon. Mr. Baetz: On the matter of the condition of the turnover of Loto Canada to the provinces, a number of provinces agreed to certain conditions. Some agreed to pay for the arenas out of the new lottery fund. In Ontario we agreed to assume responsibility for the expansion only of the Royal Ontario Museum. We will more than make up for the extra money we will have to remit to the Royal Ontario Museum to guarantee they will have enough money to complete the three phases of their expansion program and give us here in Toronto a museum of world status.

We were committed to that. We are delighted to be able to do that. That money will be coming from lottery funds. We have the money. I don’t know why the honourable member is so concerned. It is a success story; it is a victory all the way for the Royal Ontario Museum, for the province of Ontario, for the people of Ontario and for all Canadians.

Mr. T. P. Reid: By way of supplementary, it is interesting the minister now knows something about what is going on at the museum. Would the minister not agree with me that he has been suckered by the Royal Ontario Museum into their expansion program of $44.5 million, the money for which they didn’t have when they embarked on the program? They put the minister and this government behind the eight ball and said, “You either provide the money or we can’t complete this expansion.” The minister said, “Aye, ready, sir,” when he found out what, in fact, was going on. Does he really believe that kind of planning by the Royal Ontario Museum and by his ministry and the civil servants in it is any way to run a province?

Mr. Bolan: The minister is going to be the first exhibit in the museum, the prehistoric monster.

Hon. Mr. Baetz: Mr. Speaker, I reject out of hand the allegation we got suckered into any kind of deal. The Royal Ontario Museum was very clear about its three-phase expansion program. We knew what it would cost. We are happy to be able to find the funds --

Mr. Bolan: A burnt-out Minister of Energy.

Hon. Mr. Baetz: -- to make this a world- prestigious museum. There was no suckering and no bad planning. If the honourable member would only read his own report of the public accounts he would understand. If he just reads the report he will see --

Mr. T. P. Reid: They haven’t reported yet.

Hon. Mr. Baetz: -- there was good solid planning all the way down the line. On the three phases, the money was there. The honourable member should read his own report and get his own answer.

Mr. Makarchuk: Supplementary: Would the minister give assurance at this time that this world-standard museum will maintain its world-standard rock and mineral collection in the new building?

Hon. Mr. Baetz: As it is now, Mr Speaker, as it is now.

Mr. O’Neil: Supplementary: It is very hard to understand when the minister says he knew what was going on at the museum, because it didn’t appear that way in committee. I would like to ask the minister: Is the minister prepared to give this Legislature his assurance that the expansion figure of approximately $44 million will not rise above that amount, especially when suggestions have been made to us that costs may escalate to somewhere between $50 million and $60 million? If this happens, what is he prepared to do?

Hon. Mr. Baetz: I am planning to make a statement next week which will deal not only with the expansion program but also with our operating grant to the Royal Ontario Museum. I think once we make that statement those questions that have just been raised will be well answered.

COPAYMENT FEES

Mr. R. F. Johnston: My question is for the Minister of Health. What advice does the minister have for senior citizens with spouses in chronic-care facilities who after paying his ever-rising deterrent fee, find themselves in jeopardy of losing their homes through lack of funds? Would it be the same as was given to a constituent of mine, who was advised by a chronic-care facility to rent out rooms or to sell her home? Would he advise them to undertake an involuntary separation from their spouses in order to receive more money?

Hon. Mr. Timbrell: This copayment was recommended by all parties in the House, of course, a year ago tomorrow.

Mr. R. F. Johnston: It was not.

Mr. McCaffrey: Yes, it was.

Hon. Mr. Timbrell: The chairman of the committee reminds me it was, in fact, signed by all members of the committee. I think it has worked amazingly well considering it’s only been in for about six months now.

Mr. Cooke: According to you, everything works well.

Hon. Mr. Timbrell: The individual hospitals and members of my staff are dealing with any individuals who have particular problems, but generally speaking we are finding, as we found in the nursing homes since 1972 when nursing-home care became a benefit, that those kinds of things are not in fact in the cards, and families do become involved, as they should, in assisting their elderly to cope with this situation.

Mr. R. F. Johnston: Supplementary: In view of the fact that my constituent will receive about $65 a month more income by which to maintain her home by opting for an involuntary separation from her husband of long standing, and has chosen to do so in order to get that extra $65, will the minister tell us if it’s the policy of this government to divide long-time marriage partners who are already suffering separation through health problems, or is he going to exempt senior citizens from this cruel tax?

Hon. Mr. Timbrell: Mr. Speaker, I am not entirely familiar with what the member refers to as an involuntary separation. I do know that when the previous federal government changed the increases in the old age pension for couples it did build in a provision that if either of the spouses was institutionalized that spouse could apply for a reinstatement of that amount.

I take it that’s what he is referring to, or what he must be referring to, and that has nothing whatsoever to do with the copayment. That has to do with an individual being in a home for the aged, in a chronic hospital, an acute-care hospital, a nursing home, anywhere. It has nothing to do with that and of course we are not promoting the separation of couples.

I invite him to go back and re-examine the rationale, the arguments that were made by the senior citizens’ advisory council of this province, by the select committee, on which members of his own party sat, and by several other bodies which have recommended that we have this kind of charge in this province that would equalize the cost across the long-term-care field, and also ensure that in the provision of moneys for income maintenance for the elderly they don’t, in effect, end up paying twice; they don’t pay whatever it is, $60, $70, $80, sometimes $100 a day for a chronic-care bed, and also continue to pay completely income that is meant to maintain the individual and that previously was building up, in the main, in the interests of the children and their heirs and not being used for the purpose for which it was intended.

Mr. Conway: Supplementary: Can the minister indicate whether he or his officials have maintained any kind of statistical count on the implementation of the copayments? If so, would he make that information available to this House at an early time so that we could perhaps examine more precisely the impact of the copayment scheme?

Hon. Mr. Timbrell: My officials have been meeting regularly with representatives of chronic-care hospitals. We fully anticipated, of course, that with a new program like this there would be problems, and there have been some. We have been arguing them out as we have gone along. If the member could be a little more precise today, or place an Order Paper question, or whatever, as to what he would like to know, I would be glad to try to assist in getting the information.

Mr. Conway: I would like to re-put that question. Very simply, have ministry officials undertaken any kind of study to ascertain exactly the impact of that particular copayment? How many people have been paying over the course of the past numbers of months? Does the minister have those kinds of figures? If he does would he make them available to this House at an early opportunity so that we might more fully examine the precise impact of that scheme upon the health-care delivery system?

Hon. Mr. Timbrell: Mr. Speaker, I will be glad to pull together the statistics we have.

Mr. Breaugh: Supplementary: I wonder if the minister would consider circumstances such as have been outlined by the member for Scarborough West as grounds for exemption under the chronic-care deterrent fee, or better yet, get rid of the fee altogether?

Hon. Mr. Timbrell: I took the member for Oshawa’s advice in implementing it --

Mr. Warner: Totally misled and you know it.

Hon. Mr. Timbrell: Oh yes, oh yes, I took his advice, and no matter how he tries to change the record, as he keeps trying to change the September 12 press release of his, the words of his party and its members are in cold hard print. I took his advice in implementing it. I still think he was right and, of course, I indicated the exemptions would be kept under constant review.

CHILD SUPPORT PAYMENTS

Mr. Breithaupt: Mr. Speaker, I have a question of the Attorney General concerning recent interpretations of section 27 of the Family Law Reform Act, which states that the court may enforce an order for support “upon the request of a person entitled to support,” which interpretations appear to deny a mother, or indeed would deny any parent or guardian, the right to claim support on behalf of an infant or minor child. My question is in two parts, as initially set out in my letter to the Attorney General on October 3, to which I have not as yet had a reply.

First, if the decisions are correct in law, will the Attorney General bring an amendment before us this fall to correct the situation and have the terms “parent” or “guardian”, or however they may be, added after the word “person”? Second, if the decision is not correct in the view of the minister and of his advisers, does he intend to appeal the decisions or to instruct the judges of the family division in this regard?

[3:00]

Hon. Mr. McMurtry: I am sorry, but I have not seen the honourable member’s letter. I will certainly make efforts to get a copy of it as soon as possible, and when I have had the opportunity of reading the decisions to which he refers I will be in a position to reply to him, which I hope will be in the very near future.

Mr. T. P. Reid: Does your interoffice mail arrive by stage coach, Roy?

Mr. Breithaupt: As a supplementary: Since there are in Waterloo region alone some 80 of such applications each month and since we also have arrears of about $1.25 million at the present time in that region alone, would the minister not agree that this interpretation might do much to disturb, certainly, the operations of the family court? Would he not also agree that clearly the intention of the Legislature to allow and encourage proper applications to be made would be frustrated unless an amendment was attended to?

Hon. Mr. McMurtry: I am not prepared to comment on the correctness, or otherwise, of the decision unless I have an opportunity of looking at it, but I agree with the honourable member that the matter is obviously important. We will look into it right away.

Mr. Roy: Supplementary: I wonder if I might ask the Attorney General, when he is looking at the Family Law Reform Act regarding possible amendments to the section that has been referred to by my colleague from Kitchener -- and he may have had complaints on this certainly from the profession or from the general public -- and recent decisions from the Supreme Court of Ontario pertaining to interpretations of section 18(4), that is, the decisions that allow the court to interfere with domestic agreement, and to section 4(4) which talked about unequal division of family property, whether he might look at these sections and advise this House whether he feels those interpretations are in line with what was intended by the members of this Legislature when the act was passed?

Hon. Mr. McMurtry: I shall pursue that.

CLEANUP OF SPILLS

Mr. Wildman: I have a question for the Minister of the Environment. Since Eldorado Nuclear Limited now has the approval of the Atomic Energy Control Board to transport approximately 5,000 gallons of radioactive sulphuric acid in tanker trucks every two weeks to Rio Algom in Elliot Lake, can the Minister of the Environment explain what, if any, contingency plans his ministry has for the cleaning up of a spill of radioactive acid in northern Ontario if an automobile accident occurs while this is in transit?

Hon. Mr. Parrott: I think with any luck at all we will have the legislation on spills completed within a matter of days. Certainly it has been debated at great length, and although it hasn’t been proclaimed, I don’t think there is any doubt that the terms are very clearly spelt out and agreed to by all parties on the cleanup of spills.

I would like to think that the legislation is one of the best pieces of legislation we have seen in a long time, and with the support of the opposition in getting it through committee in the next day or two, the very best of conditions will have been set out in this bill introduced by ourselves not too long ago.

Mr. Wildman: If the minister is saying that other than the legislation there are no particular contingency plans for dealing with radioactive waste that might be spilled in transit, can he indicate to us whether or not he thinks it is appropriate for this type of material to be transported in tanker trucks over long distances, from Port Hope in southern Ontario to Elliot Lake, and, if so, is he aware that the Algoma District Municipal Association has passed a resolution requesting the Ontario government to restrict the movement of this dangerous material on the provincial highways? What is his response?

Hon. Mr. Parrott: The control of radioactive waste, as I am sure the member knows, is not under our jurisdiction.

The movement of that waste is controlled under the bill, and it is very clear that the company must indeed deal with whatever spill, whether it is this hazard or another hazardous waste, so that a contingency plan obviously would be the responsibility of the company. I think they are prepared to accept that. All companies must accept that responsibility.

Each spill will require a different amount of expertise to clean up. We don’t have an overall game plan. We have a specific game plan for a particular material. The owner or person in control of that must know those plans and must notify the ministry. All that is very clearly set out in the bill. I would recommend members read it in full detail -- the member probably has. But surely that says all of those contingencies are taken care of in that legislation.

Mr. B. Newman: A supplementary of the minister: Not all liquid wastes, radioactive or otherwise, are carried in motor vehicles. Sometimes they’re transported by rail.

Would the minister request the federal government to see to it that the Ministry of the Environment here is informed at any time when there is a spill? I bring this to the minister’s attention because four railroad cars were derailed in the Windsor area carrying sulphuric acid, not radioactive at all. It was two days later that the ministry was informed.

Mr. Speaker: The question has been asked.

Hon. Mr. Parrott: Again the bill very clearly spells out that failure to notify us -- the Ministry of the Environment, province of Ontario -- of any spill in this province is a violation of that act. It’s one of the very first things the owner or person in control must do. Indeed they are subject to penalty if they do not. So the member need not worry again that we will be advised of a spill.

WINTARIO GRANTS

Mr. O’Neil: Mr. Speaker, I have a question of the Minister of Culture and Recreation. Will he tell us when the present freeze on Wintario capital funding imposed by his ministry will be lifted so that the many municipal and other projects in the planning stage can be proceeded with?

Hon. Mr. Baetz: We are still continuing our study of the new criteria and the new policies which should be governing the capital program. We anticipate we should be concluding that by the end of this calendar year and sometime in the winter months we will be announcing the new criteria, the new principles, and carry on from there.

Mr. O’Neil: I wonder if the minister can say why many groups -- one of them being the Toronto Theatre Alliance Group with close to 70 members -- have stated that only one of their members was approached for his views on the capital funding survey? If this is the case, is this survey truly an input or mainly so he can catch up on the backlog of applications he has on hand?

Hon. Mr. Baetz: This has been a very thorough study. We have interviewed thousands of people throughout the province, including people from the arts community, municipal officials and other provincial officials. We have had a great deal of very valuable input to this study. My only point of regret in getting information and ideas on this study on what our new capital program was, is from that party over there. It developed one solid decision that simply said: “Do not co-operate with this study in any way, shape or form -- politicize the thing when he gets it here.”

Mr. Breithaupt: That’s right. We’ll ask our questions here.

Hon. Mr. Baetz: For that I thank them not one whit.

Mr. Makarchuk: Easy come, easy go.

DOMESTIC EMPLOYEES

Mr. Charlton: Mr. Speaker, I have a question of the Premier. In view of the fact we debated a bill last Thursday which would have given domestic servants coverage under the Employment Standards Act, and in view of news articles this morning indicating the Minister of Industry and Tourism (Mr. Grossman) seems to have very little concern for the ability of domestic employees to earn a decent living -- paying a wage, if what the employees say is true, of $1.21 per hour -- would the Premier kindly tell the House whether or not on votes on bills or in standing to block bills ministers are required to declare conflict of interest?

Hon. Mr. Davis: Mr. Speaker, I recognize the member is relatively short of important questions to ask.

Mr. Makarchuk: Some of us work 14 hours a day, and you don’t care.

Hon. Mr. Davis: I would just say that if those people opposite declared their own intellectual and, in fact, material conflicts of interest as well as we do on this side of the House, they would be a lot better served.

MOTION

REFERRAL OF ESTIMATES

Hon. Mr. Wells moved resolution 7:

That the estimates of the Ministries of Housing and Energy be withdrawn from the standing resources development committee and referred to the standing general government committee to be considered following the completion of the estimates of the Office of the Provincial Auditor.

Resolution concurred in.

INTRODUCTION OF BILLS

CORPORATIONS AMENDMENT ACT

Hon. Mr. Drea moved first reading of Bill 144, An Act to amend the Corporations Act.

Motion agreed to.

FISCAL PLAN ACT

Mr. Van Horne moved first reading of Bill 145, an Act to provide for Fiscal Planning in the Government of Ontario.

Motion agreed to.

Mr. Van Horne: The purpose of this bill is to require that a five-year fiscal plan be submitted by the Treasurer of Ontario to the Legislative Assembly when the budget is presented each year.

The bill provides for the establishment of a committee of the assembly, to be known as the standing committee on government finance and the economy, to study and make recommendations concerning the fiscal plan.

RULES OF THE HOUSE

Mr. Speaker: Before the orders of the day, I would like to call to the attention of members of the House that yesterday the NDP House leader, the member for Sudbury East (Mr. Martel), raised a point of order with respect to the debate to be held today on sessional paper 181, Oil Pricing and Security: A Policy Framework for Canada, and sessional paper 182, Energy Security for the Eighties: A Policy for Ontario.

An interesting discussion then took place with respect to the authority for the procedure of putting an order on the Order Paper for consideration of a sessional paper or papers without a motion for that purpose. While it is, of course, correct to say that as a general rule all business is brought before this House by way of a motion, there are, as the House is aware, exceptions to this rule.

[3:15]

There is the provision of the present standing order 30(b) by which a committee report may be placed on the Order Paper for discussion simply at the request of the committee in the report or at the request of 20 members. There is, also, the procedure made use of with respect to today’s order. While I agree that this procedure has not been defined by the standing orders, and that in the majority of instances the order has been put on the Order Paper as a result of a motion for that purpose, still there is the clear precedent in 1976, alluded to yesterday, at which time the decision of the House leaders was announced on Friday, April 30, by the then government House leader and the order was placed on the Order Paper for the following Monday, May 3.

I am therefore ruling that, as far as the order of today is concerned, the discussion is in order and will be permitted to proceed. I would, however, ask that the procedural affairs committee examine this procedure and as quickly as possible make its recommendation with respect thereto, perhaps for an addition to the standing orders of the House if that is the committee’s decision.

ORDERS OF THE DAY

ENERGY POLICY PAPERS

Consideration of sessional paper 181, Oil Pricing and Security: A Policy Framework for Canada, and sessional paper 182, Energy Security for the Eighties: A Policy for Ontario.

Hon. Mr. Davis: Mr. Speaker, I welcome this discussion in the Legislature on pricing and energy security. I regret I won’t be able to listen to all the contributions because of the timing of the debate, but I say in advance to the Leader of the Opposition (Mr. S. Smith) that I have read in great detail, and with some interest, the paper that was presented a few weeks ago, that great efforts were made to communicate to members of the press and newspapers.

I won’t say anything about some conversion in attitude or policy during that period of time. I am intrigued by it. I don’t really expect we’ll get any unanimity today or agreement on the proposals that have been advanced by the province. That doesn’t surprise me or disturb me. But it is my hope that we will speak as one, and in that essence, as strong and tolerant Canadians.

For my part I would like to be as nonprovocative as possible. I would like to address several of the key issues raised in the paper. It’s not my intention to restate all of them, but I want to clear up one or two points for the Leader of the Opposition before I proceed in what will be a relatively nonpartisan approach. I’ll try to put these couple of distractions behind us.

First -- and I know he’s listening very carefully -- I have not, nor has the government, entertained supporting or advocating a $5 increase in 1980 in the price of crude oil. I don’t want to impose on the intelligence of other members of the House. Nevertheless, for the sake of the Leader of the Opposition, who prefers to interpret rather than to read what has been proposed, I will restate precisely what I said on August 15.

“The position of the government of Ontario is:

“1. Immediate pricing policy: Ontario recognizes external pressures for crude oil price increases. Moreover, Ontario is determined to play an active, positive role in national energy policy. Nevertheless, bearing in mind Canada’s continuing capacity to choose its own policy, the present dangers already before our economy and the impact of price increases under present pricing arrangements, Ontario is opposed to any immediate price increase beyond the current January 1980 agreement, which calls for a dollar-per-barrel increase.

“2. Comprehensive adjustment policy: If Canadian oil prices are allowed to rise substantially at any time there must be a basic change in revenue flows and energy and economic policies to (a) achieve national oil self-sufficiency, (b) avert an unnecessary recession, (c) avert undue hardship on the consumer, and (d) enhance industrial adjustment.”

I don’t quarrel with the right of the Leader of the Opposition to agree totally with what is said either there or in the policy paper itself. In fact, this is part of his responsibility as Leader of the Opposition, although I would give him a little friendly advice, if I could, in the spirit of this debate. He might find it politically more beneficial to himself and members of the party -- and I think at this moment they need a little benefit -- if he were on occasion to recognize that government does things right. He’d be amazed at the response he might get from intelligent people in this province -- and that includes all of the people of this province -- if he were, on occasion, to say to the people that the government is right on this issue and it is doing something right.

He’d be surprised at how people react to the constantly negative approach. I expect it from the New Democrats. This is their mindset. It has been their lifestyle for generations, and I never expect it to change.

Mr. Martel: That’s why there are more than eight of us here now.

Hon. Mr. Davis: But it hasn’t always been the approach of the Liberal Party of Ontario. I can recall the former leader on occasion even complimenting the government -- not too many times but at least on sufficient occasions to give some credibility to the rather negative approach that any Leader of the Opposition must take. Anyway, I’m just giving a little gratuitous advice which I know won’t be accepted.

Mr. Nixon: The Premier will give it anyway.

Hon. Mr. Davis: I would ask him as a gentleman and as a member of this House that he really not go around the province distorting what I’ve said.

Mr. Mancini: He certainly wouldn’t do that.

Mr. Nixon: You seem to be doing that yourself.

Hon. Mr. Davis: In fairness -- and I know he wants to be fair or at least I think he wants to be fair -- he can’t go around this province and say that I am or the government is, as he has said to other people, advocating a $5 increase per barrel.

Nothing I have said since then or in the discussions that have taken place since the paper was issued has contradicted or watered down my basic approach. I have opposed and will continue to oppose any change in the existing price agreement that would generate windfall profits rather than oil security and economic recession rather than shared national growth.

Secondly, while we are not out to divide Canada, I do confirm to members of this House that the very fundamental issues here are real. I assure them that we are serious about what we are advancing. In this respect -- and this is the second of only two observations to the Leader of the Opposition, just to get the record straight -- I find it to be somewhat personally insulting, though I’m used to that, and in certain aspects it may frustrate our chances of success.

On September 14 he referred to the honest differences I have with fellow Conservatives in Ottawa and in Alberta as shadow-boxing. That’s fine.

Mr. S. Smith: Exactly.

Hon. Mr. Davis: It is ironic that he would say that because for years he has been in basic agreement, when the first debates on energy took place in 1973-74 and then again in 1975-76, with the federal government that we must accept the inevitability of world prices in oil. And I’ll get around to the specific wording of it.

I suppose I cannot complain about such a term as shadow-boxing since I have made reference, which he now does -- as he adopts so many of the good things we do -- to our kissing cousins in Ottawa which used to be his kissing cousins. Why don’t they find something original? Why do they have to copy what we have suggested?

Mr. Nixon: Joe Who hesitates to think what your relationship is.

Hon. Mr. Davis: I told the member for St. George (Mrs. Campbell) how she should be very careful how she defines my relationship.

Then he went on to say, and this is a quote -- and if the Leader of the Opposition was wrong in this or if he was misquoted I’d be more than delighted to have him say so -- “They appear to be seeking a resolution to protect their party, not the citizens of Canada.”

Mr. Mancini: That’s true.

Hon. Mr. Davis: The Leader of the Opposition doesn’t say these things in the House. He doesn’t say them even when some of his members are around to hear him say these things. I know he says them without thinking, which doesn’t surprise me a great deal. But to imply the existence of what is a conspiracy is really laughable. He has to mature, grow up and understand the political process in this country to suggest that I am compromised because I am a Conservative. That is total, utter nonsense.

Frankly, the member opposite seems incapable of understanding that there is a distinction between partisan gamesmanship -- and I play that too, I confess it -- and what is a suggested innuendo that is, I think, unfair, unwarranted and is not worthy of a Leader of the Opposition in this province. And I believe that.

Mr. Nixon: Why don’t you deal with the issue rather than taking that --

Hon. Mr. Davis: I’m going to deal with the issue. But I think it’s only fair, I would say to the member for Brant-Haldimand-Norfolk, or whatever great areas he represents, that it is fundamental at this rather sensitive time in our history that the facts be presented on a factual basis and that our position not be misinterpreted as it is in question of price and with respect to the debate that is going on at present.

I make no apology for having supported Joe Clark as our national leader --

An hon. member: You’ll live to regret that one.

Hon. Mr. Davis: I’m not one of those kind of people who in political life will go around and quietly say, “I hope my leader is defeated,” not go out and support him on the hustings, and separate his party from the federal Liberal Party in order to try to create a separate identity.

I’m going to tell the Leader of the Opposition -- I’m giving him some more friendly advice -- there are a lot of federal Liberals in this province who will not forget the fact that those people over there did not help the former Prime Minister of this country.

Mr. Makarchuk: Is this a political lesson?

Hon. Mr. Davis: The truth of the matter is, I have probably more respect for the former Prime Minister in intellectual terms than has the Leader of the Opposition. I’ve dealt with him. I’ve disagreed with him. We fought. But I tell the House, I would never leave my leader under those circumstances and not give him the kind of support that as party members we’re expected to give.

I would say to the Leader of the Opposition there is a distinction between party loyalty at times of elections and determining the interests of the people of this province, in both a parochial and an important sense, and also trying to create some interest in a national policy with respect to energy, oil pricing and supply.

That is the extent of my nonprovocative comments. I will now try to deal more objectively with the issues.

Mr. Roy: We’ll turn down the background music now.

Hon. Mr. Davis: If they turned down the background music, the member for Ottawa East would be the first one to fall asleep, but I understand that. I respect that and I’m looking forward to reading his participation in this debate. I’m certainly interested in it.

Mr. Roy: It won’t be as sanctimonious as yours.

Hon. Mr. Davis: One thing I am not is sanctimonious --

Mr. MacDonald: You’re being provocative.

Hon. Mr. Davis: -- but one thing I am, I like to think, is relatively fair when it comes to some of these issues. I don’t go around misinterpreting the member or his party on one or two sensitive issues although I could. I don’t do it. It’s a temptation, but I don’t.

Ms. Gigantes: Oh, Holy Bill.

Mr. Makarchuk: No, but you do on all the others.

Mr. Speaker: Order. This is a debate, but I’d like to hear one at a time.

Hon. Mr. Davis: I agree with you, Mr. Speaker.

I have now dealt with motivation, sincerity et cetera. I hope that because I haven’t -- well, never mind.

I’d like to go back a little bit and indicate how I saw as Premier of the province the choices before us early this summer when it became apparent that a significant price increase was under active consideration.

There were essentially three courses available to use, as I sensed them. First, we could accept the fashionable notion that swift movement towards world price is inevitable and help lock in a quick national agreement to that effect. That would have been one route to go.

Second, we could take the extreme position of opposing even the present agreement to raise the price by $1 next January and leave it to others to address the complexities and define the compromises.

Third, we could enter the debate early as an advocate and place before Ontario and the country at large the range of issues and dangers before us.

Quite obviously, we chose the last approach, because we were convinced that the only effective way to protect this province is to advance by ourselves -- not to look to others -- policies worthy of the total country and to help inform the public about what is at stake before their governments act.

I should go back over some of the chronology of this. Regarding the price agreements -- and I emphasize this -- as between the governments of Canada and Alberta, there is some impression in the minds of some -- I don’t say the members opposite -- that Ontario is a party to agreement. We’re not party to any agreement. The agreement is between the producing provinces and the government of Canada.

There was the postponement of the July 1 increase -- I won’t suggest that was for partisan motivations at the time of the federal election. We said at that time that while we weren’t happy with the increase the agreement should continue, the agreement does go into 1980 and we understand this.

[3:30]

We also very carefully assessed the very large fiscal and economic distortions world pricing entails and we were obliged to consider the challenge of enhancing rather than further eroding crude oil securities. In our view, the energy security of the country must come first and thus I felt a deep obligation not to obstruct the urgent need to find a workable national energy policy and to consider carefully the view, sincerely held by many, that world pricing is in the national interest.

I would refresh the minds of the members opposite, particularly the members in the Liberal Party who -- and as I say, we do this on occasion -- like to relate what is said in the nation’s capital to what they think is our point of view here. I really am quite intrigued as to how people’s points of view change when they move from responsibility to non-responsibility.

The suggestion of the new energy critic of the Liberal Party of Canada is they really quite support the government of Ontario’s position. I would just recall to the minds of the members here, Mr. Speaker, there were members in the former administration in Ottawa who argued sincerely for world price. They did it at the time of the first debate. I think the member for London Centre in this House, in a very objective and analytical sort of approach, reminded us of the need to go to world price for energy. I think the records of Hansard will show that, as will speeches he made elsewhere -- and I believe it was a sincerely held point of view; I think it’s fair to state to the Leader of the Opposition this was the point of view held by --

Mr. Peterson: Read the statement. It is right here. Do you want to read it?

Hon. Mr. Davis: I know; I have read it. I would say to the Leader of the Opposition that former Ministers of Energy, I think by implication and what they suggested, and what they felt in terms of principle, were basically in support of world price. That includes the former Minister of Finance, who was Minister of Energy for a time. I know the Leader of the Opposition holds him in very high regard these days and wouldn’t dispute his point of view on almost anything.

I understand my point of view is so overwhelming one of my colleagues --

Mr. S. Smith: He fell asleep. You shouldn’t fall asleep when your leader is speaking.

Hon. Mr. Davis: We have in good conscience acted on both of those issues I mentioned, precisely to help expedite rather than frustrate the task we see ahead. We proposed what we feel are national solutions to the question of supply and distribution, and did so, taking into account the legitimate interest beyond our own jurisdiction.

Above all, we attempted to present constructive ideas to assure a regionally balanced pursuit of energy self-sufficiency. We have also not disguised the difficulties, because they are obvious to all of us.

Before tackling the crucial pricing issue, I want to deal with two matters which relate more directly to the pursuit of adequate energy supplies; Petro-Canada and Ontario’s capacity to better meet its own energy requirements.

To reiterate, our government believes the present national responsibilities of Petro-Canada should be retained and the federal government should retain ownership of Petro-Canada as a national, publicly owned petroleum institution.

We have advanced this position on several occasions with the federal government and I sense on this matter, at least in this debate today, we are reflecting a point of view that might find greater unanimity than on one or two other areas of discussion.

I do not believe a new federal government absolutely must retain every bit of this company, or should not even review its structures or relationships to Parliament. I am sure the Leader of the Opposition would be quite upset, for instance, if we were to say there is no need for a select committee to review the activities of Ontario Hydro, that it is inviolate, that it doesn’t need to have its mandate questioned or its activities questioned. I think that would apply as well to a federal crown corporation as much as it would to --

Mr. Cassidy: Why aren’t you expanding Petro-Canada?

Hon. Mr. Davis: We are in favour of Petro-Canada remaining in the public domain.

Interjection.

Hon. Mr. Davis: I would like to refer very briefly to the October 1 paper presented by the Minister of Energy (Mr. Welch), and he will be dealing with this in more specific terms. His main purpose was to indicate at this time not only what we feel is required nationally, but what can be accomplished within our own province.

The minister outlined the main features of a program to achieve in Ontario 35 per cent of our future energy needs from our own resources.

This, too, was misunderstood a little bit by some members opposite. We will never be a major energy economy; that’s not going to happen. However, it is well within our capacity to reduce our demands on others, and to this extent I hope we can strengthen both our own economy and the national one. I believe it is important that they be understood across Canada if we are to play an effective role in defining national energy policy.

To imply from this that Ontario is or intends to be part of a drive toward provincial self-sufficiency, is, to put it mildly, very silly. No one suggests this. Some have interpreted it.

I think it is sensible and in the national interest to pursue the 35 per cent objective. It will benefit the country but it will not substitute for a strong national drive to crude oil self sufficiency. Ontario’s energy security is ultimately a national challenge, it does impact on the rest of the country. A national agreement on new oil developments in Alberta and Saskatchewan and in the frontier remains our most immediate concern.

I do not accept the somewhat defeatist notion of the Leader of the Opposition, outlined in May, 1976, and reissued the day I released our paper this August -- and if he had asked me first I would have advised him to save his paper for a day or two; it might have received more attention and I would have passed that information and advice on very helpfully -- that “Canadian oil supplies will probably be depleted within a decade.” That’s close to four years ago when that statement was made. “Thus it is urgent to prepare our industry and consumers for the advent of world oil prices.” That’s four years ago roughly, three and a half.

In specific terms, we support the federal government’s commitment at Tokyo to reduce our forecasted demand levels. I think that’s essential for all of us. It is an obligation that all of us must assume. However, I do not believe that we are compelled for either international or domestic reasons to assume world oil prices. I debated this with the Leader of the Opposition then, I debate it again now. I am encouraged to see that he will not acknowledge that he has changed his mind but that obviously the Liberal position, in essence, has somewhat altered.

Mr. S. Smith: Tell the truth.

Hon. Mr. Davis: It has. While defining and then forecasting the world price of oil as either futile or fanciful, one thing is certain, chasing after world price means a continental pricing policy for Canada.

If Canada is to bear the cost of oil independence then it is only consistent that our consumers continue to enjoy the right to participate in setting independent Canadian crude oil prices.

To a real extent how much we consume is everybody’s business. I think that’s fair on a global basis. However, when it comes to pricing, our unique energy flexibility should allow us, as Canadians, to choose our own particular course. Whether we use this opportunity wisely or foolishly is of legitimate concern. Nevertheless, the existence of this opportunity to decide for ourselves cannot and must not be denied.

If the decision of the American government to be at world prices for oil by 1981 holds up -- and this is their stated policy now, and that’s only roughly a year and a half away -- it will not be because of a firm understanding about massive price increases in oil consumption or a perceived need to create massive windfall profits for the petroleum sector. The extra pressure in the United States for higher prices is born partially of a regulatory mess, a fiscal bind which this country has largely been able to avoid.

Effectively, over 80 per cent of oil consumed in Canada is produced in Canada. The revenues are retained here as well. Consequently, we have been able to finance with little difficulty a one-price oil policy across Canada which is well below world price patterns. To put it into perspective, we are at $13.50 to $14.00 a barrel. World price is at $22.50 to $23 a barrel, although with Libya, and whoever else yesterday, increasing it by $2, and others perhaps to follow, one might argue world price is another $1 to $1.50 up. We are roughly $10 below world price, probably around $8 below the Chicago blended price; and these figures too, I might suggest with respect to the members opposite, didn’t come about by way of accident. I am not one who goes around looking for a lot of political credit but I can tell you this --

Mr. J. Reed: He’s sitting there with a straight face.

Hon. Mr. Davis: Now listen, I will tell members this, I will make a very objective analysis of the past five years, because I was in those discussions. If the former government of Canada had had its way and the producing provinces had had their way, because the other provinces of Canada were not objecting to moving fairly rapidly to world price, we would have had a much higher price in Canada today if it had not been for the efforts of the government of the province of Ontario. I say that very modestly, very modestly.

Mr. Roy: Do you think Joe Clark will listen as well?

Hon. Mr. Davis: I don’t know. I certainly am making an effort. The United States is facing a very different set of circumstances. They now import almost half their oil requirements, and next year that figure will be over the 50 per cent. Consequently, with such horrendous outflows of petro-dollars, the American government cannot cushion import prices. This is the bind they find themselves in.

Furthermore, for those who feel pricing is the key to conservation, and I have heard this argued, that if you have a higher price you are going to have a lower consumption, I would argue that once again our circumstances in Canada are different. According to the most up-to-date figures compiled by OECD for 1977, Americans individually consumed 25 per cent more gasoline than Canadians. This gap of some 85 imperial gallons per person cannot be explained away simply by comparing prices. For those who suggest that on the basis of gasoline we are a larger per capita consumer, the figures don’t bear this out. I acknowledge that Ontario is a leading consumer of oil if we take into account home heating oil, and I believe as we continue to grow we will still face this but I think we can moderate the demand.

Indeed, we have proposed in the second paper released a variety of measures to reduce automobile consumption and to assist individuals and industries to switch to more abundant sources of energy, of which electrical resources of Ontario Hydro and natural gas from western Canada are two of the primary areas.

Nevertheless, I want to emphasize that simple comparisons -- and this is what one runs into when you discuss this issue with people outside Canada -- simple comparisons with our major trading partners do not demonstrate that without “world prices” we are squandering energy at an intolerable rate. I agree we have got to do better. However, it should be kept in mind that our rate of oil consumption has been determined essentially by our unique needs. Our distances are great. If you are travelling in countries that I very briefly visited, in the public interest of course, Holland, Belgium and so on, the distances there aren’t quite as great as they are in this country.

Our resource industries are energy intensive -- that is one of the reasons we are a large oil consumer -- and our climate is more demanding than some others. Furthermore, our growth imperative in terms of needing to build the economy to provide job opportunities really has been unparalleled, certainly anywhere in western Europe.

There may be evidence that the price increases we have experienced are encouraging more energy efficiency in our society. That may be the case, Mr. Speaker. However, I could find no honest consensus that significant oil price increases by themselves lead effectively to reduced consumption. I don’t think that just pricing alone is a sufficient vehicle for reduced consumption or conservation. The only thing we do know is that a massive increase in the price of oil can stall economic activity and slash employment growth. That much we do know.

I will oppose this course so long as I am charged to serve this province. We are not a have-not province, but we are not going to be bled white in this process either.

Fortunately, in our view, the options before the government of Canada are more manageable than they would be in a lot of other countries. It has the fiscal and constitutional capacity to permit only moderate price increases. Also, it can allow prices to rise at a faster rate and capture the windfall profits which would accrue to the petroleum industry in the producing provinces. Either of these approaches could be designed to allow the economy to grow and to protect personal incomes for those people on fixed incomes, in terms of say home heating oil.

[3:45]

Let me stress again that this is not our position. These choices are not yet fully accepted or understood by other governments across Canada. I want to make sure the member understands this, before he says they are all Tories -- which is a great thing; their points of view when they were not Tories and when there were other governments in charge were really very similar.

I have faced, ever since we have been debating this issue in this country, a minimum amount of support from the other provinces of Canada with respect to the debate on world oil price, including the producing province of Saskatchewan. I haven’t had a lot of support.

Mr. Cassidy: They made proposals four years ago that we could have supported.

Hon. Mr. Davis: They were almost in agreement with some of what is in our paper; not --

Mr. Martel: You are four years too late.

Hon. Mr. Davis: No, no; just a second now; no, no.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Davis: They still wanted the increase in price. With what happened to it afterwards, they still wanted the increase in price. The member can look back in the record.

Mr. Martel: They were prepared to do something different, but then you were befriending Alberta.

Interjections.

Hon. Mr. Davis: The single-minded free market advocates and provincial rights purists suggest that prices be allowed to rise substantially without any adjustment to revenue flows. This is what is being suggested by some. To me, this notion does not make sense economically and depreciates what our Confederation is all about.

Ultimately, if we are in fact one country, windfalls occurring to provincial treasuries can no more be exempt from national needs than those enjoyed by private companies. That is not a popular concept in the province of Alberta, but I restate it.

Mr. T. P. Reid: It wasn’t very popular in Ontario a little while ago, either.

Hon. Mr. Davis: Oh, yes; this assertion, not only our opposition to world prices, is hotly contested by other governments.

The stark reality before all of us is that the differences over the pricing of crude oil really have less to do with energy policy than they have to do with conflicting aspirations and convictions about the management future of our Confederation. That is what really has, I think, come to the fore to a greater extent in the past few months than was the case in 1974-75.

An extraordinary and profound debate over what this country means is unfolding. I am not avoiding this issue. It might be more comfortable to avoid it and deal with the price aspect only, but that, to me, would be dangerous. The risks of dividing the country, as has been suggested in some circles in the west, I understand that. We understood it from the beginning. Certainly this concern has disciplined what we have been saying and was basic to our decision to put forward what some have described as a compromise position.

We have drawn a very clear line on price -- I want no misunderstanding -- and the reinvestment of petrodollars; but our position is not extreme and does recognize the interests of others as well as our own, and I think that has to be understood in the context of Confederation. I am absolutely convinced this is the right way to proceed.

Specifically, we urge the federal government, in the first instance, to negotiate with the producing provinces. Furthermore, we have not and will not propose that the federal government tear up the present agreement with Alberta and Saskatchewan and seize by way of an excise tax those additional revenues they had expected to receive in 1980. In other words, the agreement that has the dollar price increase in January 1980, we respect.

I regret the Leader of the Opposition (Mr. S. Smith) sees this as a soft bargaining position. I only wish he were there for part of the discussions. However, I am sure he doesn’t really mean that.

Mr. Peterson: You could have used him.

Hon. Mr. Davis: I’m sure. I notice how well he did with his fellow Liberals out in Winnipeg. They loved him. I noticed how well.

I don’t welcome any price increase in 1980. However, to deny the agreement that is in place for the right of the producing provinces to any further additional return on an asset owned by the people of Saskatchewan and Alberta would be irresponsible and would only weaken our security and our chances of success.

In acknowledging these realities and in seeking a new consensus rather than a unilateral power play by the federal government we can appeal to the fairness and the citizenship of the people of Alberta, because we are trying to be fair and are determined to act as Canadians. Mr. Speaker, I hope I am properly representing the true spirit of our Legislature, at least on this matter.

It would be quite wrong to imply that our policy could not be implemented under any circumstances without the acceptance of the government of Alberta. It remains my hope that a voluntary agreement can be achieved as between the government of Canada and the producing provinces. Nevertheless, I stated quite clearly in our position paper of August 15, and I quote:

“It should be well understood by the federal government that it is charged with the responsibility and has the legitimate constitutional authority to avert an intolerable economic and social danger. If necessary” -- and I underline the “if necessary” -- “the federal government must use its influence and constitutional authority to direct oil and gas revenue flows in accordance with agreed and national objectives.”

If that quite straightforward assertion of federal powers and responsibilities has been overlooked by anyone in this chamber, Mr. Speaker, I can only say to the members opposite, if they didn’t see that part of the statement it didn’t escape the Premier of Alberta and other premiers at the first ministers’ meeting in August.

Now while I appreciate as well the sensitivities that they have on this matter, many of which I share, I feel this had to be said. I reject any suggestion that it is our intention to change the operating principles of Confederation. This has been suggested by some. As the Treasurer (Mr. F. S. Miller) said in Calgary recently: “We are not arguing for an extension of the federal jurisdiction, but we do believe it has the authority and, more important, the responsibility to protect the national interest.”

I believe in the provincial control of resources as presently defined in the constitution of Canada. However, that control does not now, as I tried to explain the other day in the House, and cannot in future, override a compelling national interest.

Mr. Peterson: Who are you threatening?

Mr. T. P. Reid: How do you arrive at that?

Hon. Mr. Davis: I’m not threatening anything. I’m just telling the members what our point of view is. To isolate resources from the national interest come what may would enfeeble the capacity of the Parliament of Canada to protect in advance our national economy.

Premiers do consider the interests of Canada as a whole. They are good Canadians. But it would be foolhardy and I think even presumptuous for us to assume that we always know, as Premiers, what is best for our country. In the final analysis it is the government of Canada which accounts directly to all of the people of Canada. If it is to negotiate effectively and to govern well, others must understand its unique mandate and paramount authority to articulate the nation’s interest. That’s what a national government is all about.

Mr. T. P. Reid: Meanwhile he is giving away control.

Hon. Mr. Davis: Not control. One has to draw the distinction between control -- that is the rate at which a resource may be taken out; the environmental controls that are used in terms of the extrication of that resource, et cetera -- and the ability of the national government, as they have done. That’s why we have prices today below world price because they have the constitutional authority, right, obligation to do what they are presently doing.

There is a distinction between control or management and the question of economic or national involvement by the government of Canada.

Mr. T. P. Reid: Was that a sham he’s playing with --

Hon. Mr. Davis: No, no. Became they will still have the ultimate, as they have with Alberta -- and this is what Alberta doesn’t enthuse over, I’m sure you understand that; that’s what part of the debate is all about. That’s why Alberta doesn’t agree to an amending formula that doesn’t have total unanimity, because they’re concerned about somebody deciding the majority that they amend with respect to the resource. That’s what that debate is all about. I’m sure the member followed it carefully and understands it.

Interjections.

Hon. Mr. Davis: Last week in the Alberta House, Premier Lougheed stated that the future of his province will require a federal government that “doesn’t look to protecting central Canadian industry, but looks to what’s going on in the rest of Canada.” I’m quoting directly from the Premier of Alberta.

Mr. Speaker, we’re not wedded to the status quo in this province. We’re not out to frustrate the development of western Canada, or to construct an industrial policy on the illusion of cheap energy. Indeed, I am confident there is a consensus that we must be expansive in facing change, and that to turn inward would be futile and diminish the future of all of us.

We are not saints here in this province; I acknowledge that. Certainly we’re not; the members over there, I am sure, figure they are.

Mr. Kerrio: You’re not that far right.

Mr. Breithaupt: We are somewhat closer.

Hon. Mr. Davis: You do have that saintly look about you, James; you really do. You’ve had it for years.

Hon. Miss Stephenson: Cherubic, not saintly.

Hon. Mr. Davis: Cherubic.

We’re not saints in this province, Mr. Speaker. But we have, as a people here, helped build this country. We have shared our abundant wealth with other Canadians in each and every region of this country and there have never been strings attached.

What I take exception to on occasion, as I discuss these issues with my counterparts in other provinces, is the feeling that in some way or other, Ontario has been the economic beneficiary of Confederation to the detriment of the rest of Canada. They always use automobiles, because you can buy an automobile in Brampton more cheaply than you can buy an automobile in Edmonton.

Mr. Kerrio: Where’s Brampton?

Hon. Mr. Davis: Where’s Brampton? It’s 28.6 miles northwest of here, not too far from Norval, which used to be -- well, it is a lovely community. Just a modest change in representation the last couple of times, but that will change again. It’s a nice community, Norval.

I try to explain to those people who raise this with me that Ontarians paid more for their automobiles for years than the people in Buffalo, Detroit, Chicago -- anywhere in the United States -- until the automotive agreement. We paid more.

Mr. di Santo: We still pay more.

Hon. Mr. Davis: We paid more for a lot of things because we thought there was something unique and worthwhile about being a Canadian. If in this country we start to equate everything to the bottom line, then I think we are heading for some difficulty. Ontario has never taken the position that we want all of the economic activity concentrated in central Canada. I would argue, vigorously, that we have shared our good fortune with our sister provinces, because this is what Canada is all about.

I take exception to those who suggest that national policy should be predicated on seeing that central Canada now assumes a greater share of the cost. Our industries can compete; that is not the issue. They can compete in terms of the ordinary marketplace. But I argue very strenuously that when we have something that can be uniquely Canadian, in terms of a resource like energy we would be foolhardy as a nation to accept the concept of world price.

I know this flies in the face of a lot of economists and a lot of people who are far more knowledgeable in the world marketplace than I am, but I will continue to put this position very strongly, not only to the government of Canada, but to my colleagues in the other provinces of this nation.

As I say, it has been somewhat lonely, because the other provinces do not seem to share the same concern about world price. Perhaps it is because in some provinces they see resources ultimately being the same sort of asset to them as they presently are to Saskatchewan and Alberta.

I don’t know the reasons, but I do know this: when the Fathers of Confederation sat together to develop the rationale for this country it was not formed on the basis of individual or regional economies. It was done on the basis of trying to develop a national, or shall we say a coast-to-coast economy, where people right across the country would feel some identity, would feel part of what was to be a great nation, and not really look at it in a totally provincial or regional context.

I say to the members of this House, this sort of debate isn’t going to finish in the next two weeks or three months. It is very basic, not just as it relates to the price to the consumers but as it relates to the question of distribution fiscally within Canada and what this country is all about.

I am one of those who are optimistic, as I am on almost every issue, that we can as Canadians demonstrate those qualities to our friends and others; that the resourcefulness, the real anticipation of what Confederation was to be about, can in fact be achieved. It will not be done by a lot of rhetoric. It won’t be done by suggesting to other people that they are less than good Canadians. It will be done, I hope, by an intelligent, logical, but somewhat emotional approach to this very basic issue.

[4:00]

I’m speaking now not just to members of this Legislature but particularly to people in the producing provinces when I say we are not saying in our papers that we do not respect the rights of those provinces or their rights to a return for the resource that is theirs. We are saying simply there has to be more to Confederation than the bottom line of any provincial balance sheet.

In any consideration by the government of Canada as to the resolution of this, it has a responsibility to look at it, not just to pacify our interests or those of the producing provinces but to develop a policy that is national in context and which recognizes the unique opportunity that is available to us as Canadians. That was really the main thrust and direction behind that modest paper that was tabled some time in August for discussion here this afternoon.

Mr. S. Smith: Mr. Speaker, I shall try to address the number one issue of today, which is the energy problems facing Ontario. I shall try to address the last 33 minutes of the Premier’s remarks, which were in fact pertinent to the matter and which were in many ways remarks that I can share. I regret the first 12½ minutes of his talk were basically devoted to what I regarded as attacks on me personally and on my character. It lowers the level of debate and I will not respond in this House at that level.

The first thing we should be very clear about in this Legislature is that the problem we have in front of us now is not so much an energy problem as a problem with regard to oil. Let’s be very plain about this. As my colleague from Halton-Burlington has said many times, the crisis we’re facing is not a crisis at the wall plug, it’s a crisis at the gas pump and where we obtain our heating oil as well.

In electricity we are doing very well, to the extent that it could be argued we are doing too well and that we have built too much electrical generating capacity. But when it comes to oil, we are facing very serious problems in the province of Ontario.

The manufacturing base of this province and our provincial economy generally will be very badly damaged, if we have to continue to make very large transfer payments out of the economy of this province to other parts of the world and even to other parts of Canada. If called upon to pay a much higher price for oil in the coming year, we will face an almost certain serious recession.

The Conference Board in Canada suggests that no more than 10,000 new jobs will be created in this province in the coming year. If that were to be true and if that pans out as predicted, it would be an utter disaster for Ontario. To pile on top of that a large price increase for the basic commodity of energy would be a great blow to the economy and something from which we might never recover.

Let me put it to you this way, Mr. Speaker. The manufacturing industries in Ontario have to retool. We have to be competitive. We have to be able to have the latest in equipment if we’re to compete on a worldwide basis. Because the Canadian dollar is down, some of our manufacturing industries have done reasonably well in the last year or so, but still not enough to make the investment which is absolutely necessary.

When Alberta refuses to consider oil and gas in its equalization payments, it’s an interesting matter that it always points to the fact that oil and gas somehow are not renewable. Our manufacturing sector is not renewable either. Our manufacturing sector, once it becomes obsolete, once the machinery is not productive, and once it’s not the most modern available in the world, is useless. An old piece of machinery which cannot compete with the latest equipment from Japan, western Europe and the United States of America is as useless as an empty oil well. We, too, in Ontario have need to replenish the resource which manufacturing represents.

As a consequence of that I think it’s very important we recognize that for the next year at the very least -- and probably a little longer than that -- our manufacturing sector is being renewed. It has to be renewed or it is as useless to us as a depleted well which formerly held oil, gas, or anything else.

It’s interesting that if oil, gas and other non-renewable resources were considered in the equalization formula, Ontario would have been the beneficiary this year alone of $1.4 billion. It shows, to my way of thinking, that wealth is wealth whether it comes from manufacturing, which can become obsolete, or whether it comes from oil wells which can become empty. It’s still wealth. Under these circumstances, we have every right in Ontario to ask for consideration from the rest of Canada for a fair and equitable oil pricing policy.

The world price is an artificial price. It’s a price established by the OPEC nations. Alberta is not a member of OPEC and should not act as though it were a member or even half a member of OPEC.

Saudi Arabia does not pay world price for oil inside Saudi Arabia. Libyans do not pay world price for oil inside Libya. Venezuelans don’t pay world price inside Venezuela. And it’s interesting that even in Alberta, where the Premier of Alberta says you have to have something like world price to encourage conservation, they don’t have a road tax on their gasoline the way every other province of Canada does.

Mr. Bolan: Leo, put the barrel over your head.

Mr. S. Smith: If they were that interested in the notion of paying high prices domestically to encourage conservation, how come they don’t even have a gasoline tax to pay for the roads which their automobiles use? So they don’t mind a two-price arrangement within Alberta, but they don’t like a two-price arrangement vis-à-vis the rest of the world when Canada is concerned.

The idea on pricing put forward by the government of Ontario in the document entitled Oil Pricing and Security makes the statement plainly at the beginning that no price increase is desired. But then it devotes something like 20 pages to show how, in the event of a $5 increase, it might be acceptable to Ontario if the first $2 were treated in the old way of dividing up between the producing provinces, the oil companies and the federal government, but the next $3 should go into some kind of fund.

When the Prime Minister of Canada arrives to talk to his cabinet colleagues about Ontario’s position and waves this document in front of the cabinet and they say, “What does it say, Joe?” the Prime Minister is going to say, “It says they don’t want any increase at all, but if we raise it $5 it would be okay, provided $2 is treated the old way and $3 by some form of recycling the money into a fund.” That’s a natural and reasonable response which anybody reading this document is going to have.

I say that Ontario should not be taking a position which can in any way be interpreted as saying that a $5 increase might be acceptable, provided $2 is divided the old way and $3 the new way. A $5 increase is a disaster for Ontario.

Hon. Mr. Welch: The summary on page four of this document is quite clear.

Mr. S. Smith: The Minister of Energy points out that the summary is clear, and I accept that. The summary is clear that Ontario wants no increase but simply had nothing better to do than produce 20 pages as to how a $5 increase might be acceptable if divided the right way.

This is not just my interpretation; it’s also the interpretation of Douglas Hartle, who came up with his own proposal on radio. He clearly understood the Ontario government was prepared to do business on the basis of the proposals in this book, including the idea that a $5 increase could be divided this new way.

I’m saying that was not a good strategy for Ontario to take when we’re fighting for something as serious as the preservation and the survival of our manufacturing sector and our economy.

There would be nothing to talk about as far as oil prices are concerned if cheap oil were available to us for the foreseeable future. There would be no need to discuss it at all. Obviously, we would be in the same position as Venezuela or Saudi Arabia; we wouldn’t even be talking about world prices or any kind of prices at all. We would take whatever advantage we could of our good fortune to have the oil and we would use it to our advantage. That’s obvious to everybody on every side of the House.

The problem, of course, is that we are not going to have cheap oil available from the western sedimentary basin for very much longer in historical terms. The fact is that, little by little, we have become a net importer of oil and little by little that proportion of imports is growing. Right now it’s about 30 per cent, but it’s growing. The fact of the matter is that we’re not going to have cheap oil available forever.

Consequently, at some point we will be exposed to the world price, if we have to import our oil -- inevitably. Inevitably we are going to have to face world price when we import everything. There’s a possibility that we will produce our own oil from the tar sands, from the frontier areas, and that may allow us to escape the world price. But we all know that the cost of production of that oil at the frontier and from the tar sands will be very high indeed and perhaps not totally out of the ball park of what is presently considered world price.

So, it is perfectly understandable that we are facing at some point -- and not in the too distant future -- something like world price, replacement price. We could argue as to whether it will be OPEC price or whether it will be tar sands price, but a much higher price than we’re presently paying.

Hon. Mr. Welch: It will be a Canadian price.

Mr. S. Smith: Indeed, as the Minister of Energy says, it will be a Canadian price and we fervently hope so. We hope and pray that we will be successful in our frontier explorations and that there will be further research in oil sands technology and all of that. But the minister must concede that when the cheap oil from the sedimentary basin of western Canada runs out we will be facing expensive oil, be it OPEC oil or be it a Canadian set price for the more expensive oil to be produced from the tar sands. He has to concede that.

All right, so the question we are facing is, should we keep the price of oil forever down as low as possible to gain a manufacturing advantage in the short run and then suddenly face overnight a need possibly to double the price of oil? Or should we expose our industries and our economy to some small gradual increase little by little, in anticipation of the fact that there will come a day shortly when we’ll have no choice but to pay those amounts?

Of course, we have said, and I continue to say, that it’s necessary to have some gradual exposure because otherwise we will be like dinosaurs. Otherwise, we will be used to using oil as though it were as cheap as water practically and the rest of the world will develop new ways of producing items which don’t require much oil because they’ll have been forced to do that. Their technologies will outdo our technologies the day that we are forced to pay the same price they’re forced to pay, because we’ll be used to using two barrels of oil for the same process that they’ve learned to do using one barrel of oil. We will be dead across the board in manufacturing.

We need to have some small price increase gradually to adapt ourselves in that regard. That’s why it is not reasonable, ethical, or sensible for the government to give the impression, as it has over the years, including this year, that it wants no increase at all. There must be some increase, because we know that inevitably we’re going to come upon an increase which will be too steep to swallow if we’re not ready for that last step when it comes.

There’s another reason why there has to be some increase. Because we’re a net importer and because the OPEC nations have raised their price, we have to pay more for oil across the country, then all of us will have to pay more for the oil we use so that we can keep a balance and make sure that all of us as Canadians are starting from the same base price. That’s reasonable.

But all that would require in this year is approximately 60 cents. If we were to pay 60 cents a barrel more, for instance, that would be all that would be required to bring the import compensation fund into balance. The question is, why are we speaking in terms of dollars when 60 cents could do it?

I’ll explain why we’re speaking in terms of dollars. First of all the reason we in the Liberal Party have suggested $1 in January and $1 in July is because we believe we have to have that amount of increase to make sure that we don’t become obsolete in our manufacturing, to make sure we continue to get some price signal to modernize and keep up to date.

[4:15]

Secondly, because the money in the past has been divided up 45 cents of every dollar to the oil-producing province, 45 cents approximately to the oil companies and 10 cents to the federal government, clearly, if you are talking about raising 60 cents that way, Mr. Speaker, you are talking about a $6 increase. That, of course, is what the federal government is talking about.

But if the government does what we are suggesting and what the government should have suggested on behalf of Ontario -- and what this House should be voting on now so we could express ourselves to the government of Canada -- what we should have been suggesting is that the increase this year be entirely by way of federal excise tax without having to divide the money between Alberta, the oil companies and the federal government. Then we could easily accomplish the 60 cents we require to balance the price of imports and obtain some of the benefits required by having a slightly higher price, and obtain about a billion dollars to get started in the area of conservation and renewable energy.

That is what we are proposing that requires Alberta to forego an increase for this year; but, let’s face it, its Heritage Fund will go from $5 billion to $6 billion this year, even without an increase. It also requires that the oil companies not get the $840 million which the Davis government seems quite prepared to see them get out of that first two dollars it seems ready to accept in terms of the conventional way of sharing oil price increases.

I feel our position is unassailable. Our position is something which the government of Ontario should have adopted, and if the government of Canada was truly looking at the interests of Ontario and the manufacturing sector here, it would say to Alberta, “For this year, Alberta, all the money is coming by way of excise tax increase and that is perfectly understandable. You are doing very well, but eastern Canada needs this break at this time.”

But the government of Canada will not do that. When I say that what we see there are three Tories talking to each other, not wishing to do harm to their party, the Premier accuses me of a political statement. Of course it is a political statement.

But I say this to you, Mr. Speaker. A government truly fighting for Ontario would tell the government of Mr. Clark that it should use the excise tax route to keep the increase at a minimum level and still achieve the federal objective of balancing the fund. In that way Alberta would, for a year, give Ontario some breathing space and our manufacturing sector space which we desperately need if our sector is going to be able to compete with the manufacturers of foreign nations, which so far have been beating us hollow.

What is one of the serious benefits of raising the price which we have not yet considered? One of the very important benefits, of course, of any price increase is that because the price goes up, one learns to use less of the product. It is important that we start using less because whether Alberta likes us or doesn’t like us, or anything else, the world is running out of oil, never mind just Canada and North America. It is important that we get on to renewables and use less of what is becoming a depleting resource.

The other aspect, of course, which I almost touched on just now, is, as the price goes up, there is an encouragement to switch to other forms of substitutes for oil. Synthetic gas, for instance, is one possibility; synthetic oil or, as I suggested, fuel alcohol possibly -- other substitutes which are expensive by comparison today but which, once the price goes up for the oil we are presently using, will look cheap by comparison and people will then use.

In a sense, that is a benefit of having a higher price. It is essential that we conserve and that we switch to renewables.

The Premier says the price shouldn’t go up very much. I say the price shouldn’t go up very much. If we are going to say the price shouldn’t go up and we don’t want the price signal, then what mechanism do we have to suggest for getting conservation under way and for getting renewables under way?

It is not good enough for the Premier of Ontario to stand up and say the price shouldn’t go up and recommend absolutely nothing by way of mechanism by which we can make certain to conserve and make certain to bring in the renewables. He’s got to have a substitute for the price signal.

If the price signal is not to be because it will hurt our economy very badly -- and it will indeed -- we must have some other mechanism. We hear nothing from this government in that regard. That is a shocking omission from the government.

I say we have to have mandatory conservation programs of the kind we suggested in the 1977 election. Does the Premier remember that? We said there should be mandatory insulation programs across Ontario. We shouldn’t be heating the air outside our neighbourhoods using the scarce resources, the precious resources which our children would need.

What did the Premier say then? He laughed. He said, “Dr. Smith’s program won’t work. The government has no place in the attics of the nation.” It was very amusing.

Mr. Bolan: Very original.

Mr. S. Smith: Very amusing indeed, but the laugh is somewhat hollow now as we look and see what has happened in these years, years when we could have been progressing in this way, but we did not do so because of a lack of political courage and political will on the part of the government of Ontario, which can yell about keeping the price down but do nothing about encouraging conservation and developing renewables that we desperately need.

Mr. T. P. Reid: Tired old bunch.

Mr. S. Smith: We need the building codes, we need the public transit approach, and of course we need the development of renewables. In this regard I can’t let the moment pass without referring to this marvellous document, this slickly printed document, Energy Security for the ‘80s, which the Minister of Energy put out.

It was a marvel to hear him. A $30-billion program he said; $30 billion for some degree of self-sufficiency in energy. Wasn’t that impressive? My, you could almost fall off your chair hearing that, $30 billion. Listen to what it is.

Fourteen billion for nuclear, which we passed I guess some four years ago, which is old stuff which we’ve known about before I even came into the Legislature. Then some $16 billion or so for renewables. I thought, “My goodness, $16 billion for renewables, they are really on their way that’s fantastic, what an investment, what a sacrifice.” He puts on his best preaching face and he says to the television cameras, “I know that $30 billion seems like a very big bite indeed but, you know, the stakes are high; the damage done to this economy by the payments we have to make is enormous,” and I don’t think he said this but what he meant was, we’ll have to bite the bullet. My goodness, my heavens. He isn’t ready to bite sunflower seeds, let alone bullets.

I tell you, Mr. Speaker, do you know what the man did? Nobody would believe this. What the man did was he got some kind of calculation as to -- let’s say there will be heat exchangers, just as an example, by 1995. He calculated how many heat exchangers are likely to be around in private use by then in people’s houses, figured out the cost of all these heat exchangers and wrote that down as part of the investment which is going to occur in renewable energy.

Mr. T. P. Reid: He took the credit for it.

Mr. S. Smith: But good grief, none of this is going to happen unless the rules are altered in such a way as to drive the private sector into that area, unless investments by government are done in such a way that instead of building more and more nuclear plants we start using some of that money to build the plants that could produce some of the renewable energy resources.

Unless we start to use government money the program is meaningless. It’s obviously a sham, it’s a farce. We have to have a genuine program. The people in Alberta are not stupid. I have just had, as the Premier well knows, some publicized debates with certain of our friends from western Canada within what has been termed the dissident faction -- incorrectly termed, I may say -- in the Liberal Party.

They want to know what we are going to do if we don’t get the price signal. What are we going to do in Ontario, where we are such massive consumers of energy? What are we going to do to shape up? What are we going to do to improve our manufacturing? What are we going to do to get into renewables? What are we going to do to promote conservation?

To hand them this document is to invite laughter. It’s certainly not going to invite co-operation. If we show them we are serious, and not by PR ploys, if we show them that we are serious some of them might be good enough Canadians to agree with us and to give us the break we need. But we can’t get that from them with this kind of farcical document. We have to start putting money into renewable energy, vast sums of money into renewable energy, and quickly so. We can’t get away with simply paying lip service to the notion in some pious hope that the private sector will in fact make the investment for us.

Mr. Roy: It’s a PR exercise and the minister knows it. He is strong on PR. It reminds me of Krauss-Maffei.

Hon. Mr. Welch: I will bet you haven’t even read it.

Mr. Roy: Have you read it?

An hon. member: Answer the question, Albert.

Hon. Mr. Welch: You haven’t even read it.

Mr. Acting Speaker: The minister wants me to call for order.

An hon. member: Take five minutes and read it, Bobby.

Mr. S. Smith: I hesitate to disturb you, Mr. Speaker, but I have the feeling things are getting a little out of control here.

Mr. Acting Speaker: I will call for order and see if it gets any results. Order.

Mr. S. Smith: The blinding flash of insight represented by my remarks has obviously stirred the Minister of Energy to the quick. He’s aroused and I feel we have to bring him under some control at this point, Mr. Speaker.

Mr. Breithaupt: He wrote it on two stone tablets; and that hasn’t been done well for years.

Mr. Kerr: You should have seen him in Lewiston.

Mr. S. Smith: All right. What I say then, Mr. Speaker, is simply this. We have to have a policy in Ontario to get our manufacturing industry working again. We have to plead with the governments of Canada and Alberta to recognize the needs of the people of this province, but we have to show that we, too, are serious.

If we will defend ourselves against the price signal, as economists like to put it, if we will defend ourselves against the impact of high prices, then we should do so first of all, by proposing an intelligent way to do it. I believe I have, with regard to an excise tax of $1 in January and $1 in July.

Secondly, we should show how we are going to get into renewable energy and other substitutes for oil, right now.

Thirdly, we must have an enormous program of conservation tactics, things which the government has been unwilling to do up to this point.

We have to be very strong and resolute. We must speak with one voice from Ontario and let the Prime Minister of Canada know it’s not just the question of him having to find some solution which does the least harm to his Tory colleague in Ontario, he has to find a solution that does the least harm to the people of Ontario. That’s a vastly different thing.

Mr. Acting Speaker: The honourable leader of the New Democratic Party.

Mr. Cassidy: Thank you very much, Mr. Speaker. On behalf of my party, I welcome this energy debate and I speak today in the hope our proposals will be accepted by the government, even if the experience of the recent and the distant past doesn’t give me entire confidence in that particular area.

The fact is the record of this province in energy policy is not encouraging and neither is the government’s performance. I say this to the Minister of Energy now the Legislature is back in session.

Today, the minister, who didn’t know about it, had his colleague, the Treasurer (Mr. F. S. Miller), confirm the government has stripped $120 million from the Ontario Energy Corporation, a step which certainly runs against the stated intention in that blue paper of the government to have a new corporation that will provide leadership in the field of renewable energy. Yesterday, and then again today, the Premier has defended keeping Petro-Canada in the public sector, but it has taken him five months to do so and his terms are so muted I am not really sure Joe Clark has heard what the Premier has had to say.

Hon. Mr. Welch: He told Joe Clark last July.

Mr. Cassidy: Not in the terms we need to hear from this province, Mr. Speaker. Today and yesterday in the House of Commons, the new federal Minister of Energy said the oil supply situation in this province is fragile. That goes distinctly against what this Minister of Energy is trying to tell us in the province of Ontario.

The Minister of Energy has continued to steadfastly oppose making available to the Legislature and the people of this province, the essential information we need to judge for ourselves and which the businesses and consumers need to judge for themselves, as to whether or not we are going to pull through in terms of heating oil and gasoline supplies over the top of this winter.

On top of that, the Minister of Energy of Ontario tells us this province has no contingency plan in case there are shortages of gas or fuel oil over the course of this winter. “Let’s rely on the feds,” he says, “we haven’t got a plan ourselves.”

Mr. Speaker, no one doubts the importance of the energy issue, particularly when every family in Ontario is now spending more than $1,100 a year for oil which is imported into Ontario, mainly from the west, but what is open to doubt is the credibility of this government and its record in anticipating the energy problems we face as we move on into the 1980s.

[4:30]

How is it that up until now the government has concentrated almost its entire policy on building electrical generating capacity, giving us a system which has been developed so intensely that we have 20 per cent more capacity than even the outside forecast of what reserves are required? How is it that this same government is relying on a mythical free market to carry seven-eighths of the projected cost of increasing our commitment to renewables over the course of the next 15 years, $14 billion from the private sector and only $2 billion from the public sector?

How can we have confidence in a government which argues for $800 million more in revenues for the oil companies, even though the companies themselves admit they have reached their limit in terms of what they can now spend on exploration and development? How much confidence can we have in a government which argues for a national energy and employment adjustment program in the case of oil, but which in February 1978 resolutely turned its back on the chance to take windfall profits from uranium here in the province of Ontario and give them to the taxpayers of Ontario rather than to Denison Mines and Rio Algom?

You ask yourself about that inconsistency, Mr. Speaker, particularly when you see that, thanks to the generosity of this government and thanks to the financial security which has been conferred by the cost-plus contracts that have been given by Hydro to Denison and to Rio, Denison is now engaged in a half-billion dollar bid for Reserve Oil and Gas, a company whose oil assets in Saskatchewan and Alberta could have been of enormous importance in guaranteeing petroleum security for us here in the province of Ontario. The minister and his government left that in the private sector. We could and should have had that energy profit in the public sector to help protect Ontarians.

If this debate on energy focuses only on what Ontario should demand from the federal government, it will address only part of the problem. In stating in September that security of crude oil supply is Canada’s number one energy problem today, the Minister of Energy is also only looking at part of the problem. The questions we should be facing are what can Ontario do to protect our own energy future and what should we have done by now?

The number one energy problem today for Ontario and for Canada is to improve the productivity of energy, the efficiency with which we use energy supplies, which are still relatively abundant by world standards. Our energy use per capita is higher than that of any other country. That is why it is so discouraging to have the government suggest that we go on as we were, if only we can ensure that the supplies are secure.

The fact is that the cost of replacement energy is rising so rapidly that we have to undergo some fundamental changes in the way that we use energy. We have no choice but to make the most out of every unit of energy we use, and that is why productivity of energy has to have priority. Back in 1977, the Ministry of Energy said something very much in that vein when it concluded that investments and measures to increase efficiency and reduce energy demand are likely to be more productive in the long run than the supply investments which are displaced. But the record shows too many times that Ontario has gone in the opposite direction.

Just suppose that Ontario had supported Allan Blakeney four years ago, when he proposed the creation of a Canadian energy security fund back in 1975. That fund by today could have invested billions of dollars in windfall oil revenues, in helping this country towards oil self-sufficiency and in helping this country to make the investments that are required to ensure that renewables play a major role. If Premier Davis had supported Allan Blakeney then, rather than recycling him four years later, surely agreement among the provinces would have been far easier to achieve than it is going to be today, if only Ontario had not sat on its hands.

Back in 1977 this party proposed taking $200 million out of the inflated capital budget of Hydro and putting that money into projects which by today could be improving the productivity of energy use in Ontario; in other words, reducing the amount of energy we have to take in from outside of the province. We suggested low-interest loans to insulate 100,000 homes a year. We suggested building a pilot plant for methanol in northern or eastern Ontario. We suggested a subsidy for 20,000 home solar-heating units a year in the province of Ontario. Those are just a few things that could have been begun in order to put this province on to a different path in terms of energy policy and energy needs.

Those are lost opportunities but they underline the fact that for Ontario to have credibility in the area of energy policy we must do everything we can and not just preach at others. Moreover, it’s unrealistic to expect that rapid increases in price will do a great deal for conservation in the short term. I say that both to the government and also to the official opposition. That’s because energy is an area where the market system just doesn’t work with ease.

On the other hand, we don’t have to wait for higher prices in Ontario to develop a genuine and strong commitment to more productive uses of energy. That’s why this party rejects the position which is implicit in the recent Ontario paper on energy pricing that Ontario has to wait for the revenues from higher oil and gas prices before making any major commitment to conservation programs and alternative sources of energy supplies. That’s what comes through from the document in the summer and that is what comes through from the document the Minister of Energy released just a few weeks ago.

If this province were to reassess its energy priorities competently, it would find ample resources to finance programs in renewable energy supplies and in conservation for many years into the future. We can’t help feeling skeptical when the government puts forth initiatives for zero growth in crude oil demand but puts them forth as possibilities rather than commitments. People in this province are prepared to respond if they get leadership from the government of Ontario.

The potential savings are very impressive. In the US there are studies that suggest we could save 30 or 40 per cent of energy needs for primary energy consumption without reducing the standard of living and without major changes in personal habits. If they can do that with technical fixes in the United States we can do that in this province as well.

I want to make some very specific proposals. I want to say very clearly to the government that it’s not good enough to say, as it did until mid-September, that only two per cent of our energy needs by the turn of the century could be met by renewables or from alternative sources of energy. It’s not good enough, as it says now, to suggest that four or five per cent of those energy needs could come from renewables but shove all the burden of meeting this target onto the private sector or onto the federal government.

It’s time to reassess the amount of investment that Hydro is putting into electricity generation -- the $1.8 billion that Ontario taxpayers will guarantee in Hydro’s borrowing this coming year. It’s time to measure that priority against the paltry $16 million this government is prepared to put into conservation and renewable energy this year.

I want to make some specific proposals, Mr. Speaker. First, insulation: we proposed it in May 1977; I’ll propose it again today. A program along the lines of the Warm-Up Saskatchewan program which is now successfully in force in that great sister province of ours.

In Saskatchewan they’re offering loans up to $1,000 for insulation, for weather stripping, and for improvements in glazing. We would propose such a program for single- and multi-family dwellings in this province with a target of 100,000 homes to be retrofitted every year. If we had started that program in May 1978, one year after the NDP proposed it, we would by now have saved enough heating oil to meet the needs for 35,000 this winter alone. We’d have saved a lot of natural gas and electricity as well. And we would have created 4,000 jobs in the province of Ontario.

Building codes: it’s about time we took the lessons of the Ontario Hydro building and Saskatchewan’s Conservation House, models of their kind, and made them a norm rather than the exception in the province of Ontario. It’s about time we had energy efficiency standards as part of our building code for commercial construction in Ontario. It’s about time that we started to complete and enforce the energy standards for residential construction in this province.

We need those energy efficiency standards for all new construction in the province. They should include not just heat loss, but also the use of appliances and also the electrical load.

The Ministry of Energy has a computer program for evaluating the use of energy in larger commercial buildings. Why not make that a requirement today for all new commercial construction? Why not make the exceptions, like the Hydro building, into the rule?

Transportation: the Ministry of Transportation and Communications outlined a year ago a program that could have cut 10 per cent or 110 million gallons a year from our gasoline consumption for transportation in Ontario. The program talked about mass transit systems; about car and van pooling; it talked about special lanes for vehicles with many passengers; and it obviously made assistance to transit a key component.

This year the NDP proposed a transit ridership improvement program as a first step to improving public transportation in Ontario cities for reasons both of energy and equity. The Conservatives now talk so glibly about the need for improving public transportation but back in the spring they preferred to raise transit fares.

The commercial sector, the hotels and offices and stores of this province have experienced an enormous growth in energy use over the past decade, yet the potential for improving their productivity and using energy is enormous. In downtown Toronto, 22 per cent was saved with a project the ministry was involved in. There is a car dealership in Scarborough that has cut its energy use by 65 per cent. I visited a shoe factory in Picton which has cut its oil use by 90 per cent, thanks to the use of energy-efficient techniques.

These are still exceptions. They should become the rule. And it is up to the government of Ontario to provide positive direction, financial incentives and regulations where necessary, to see that that happens.

Hydro rates: why do we have to continue with the discounts that are given to large industrial users who account for 25 per cent of Ontario Hydro’s energy sales? If that discount rate is removed, they are given a powerful incentive to start saving on the electricity they now use. Beyond this, we should be looking at removing the discounts that make residential power cheaper the more you use, and penalize low-income consumers and people who tend to conserve energy.

Solar heating: it’s about time this government brought in a series of measures to make solar heating on the same scale as nuclear power and oil and gas, and the other sources of energy which are so heavily subsidized in the province. We need a strong and active commitment, if any kind of target for solar heating is going to be met.

We think there needs to be continued remission of the sales tax on solar components. There should be grants to cover 10 per cent of the cost of solar heating installations. There should be low-interest, long-term loans on the remainder of the cost of solar installations. There should be legislation to protect sun rights.

There should be legislation to protect solar consumers against higher property taxes, and to ensure that the solar components sold in Ontario are of high quality and are reliable. We need to have siting standards for new subdivisions to ensure the best use of available sunlight for passive and for active solar heating.

One of the welcome benefits of that strategy would be, again, to create jobs which we are in danger of losing because of the rapid increase in oil prices in Ontario. A solar strategy could directly employ almost 4,000 people by 1990 and 11,000 in Ontario by the turn of the century.

Methanol: two years ago we made proposals that methanol be experimented with in a pilot plant in northern or eastern Ontario. It’s about time that plant got under way, Mr. Speaker, to use our forest wastes and give us an alternative source of energy to petroleum-based fuels from western Canada. We should be aiming to make commercial methanol production a reality in this province by the mid-1980s, but to date we have seen no action from the government.

In all this we envisage a much-expanded role for the Ontario Energy Corporation as a sponsor of research and development, as an investor in fields like methanol and production, and as a financing vehicle for conservation programs. Not a corporation to be cut to the quick, to be cut down by the Treasurer because he wants to find a few extra dollars, a vehicle for a major initiative by this government in the renewable energy field.

It is not encouraging at all to see the government neglecting the Ontario Energy Corporation. It is even less encouraging to hear the Minister of Energy talking about giving financial incentives -- I couldn’t believe it -- to the oil industry to develop solar energy. Not only should we pay 60 to 140 per cent of the cost of their frontier exploration in western and northern Canada, but now we should allow them to get on the ground floor in the solar energy field at the expense of small Canadian-owned businesses that are establishing themselves in Ontario right now.

What about Solartech and Temperature Specialties and Enersol, companies which are struggling to develop technological sovereignty and production capability in this promising field, and companies which are already active here in Ontario? We say that the Ontario Energy Corporation should not be allowed to suffer the same fate provincially as Petro-Canada is now being threatened with at the federal level.

I want now to turn to the national questions which relate to Petro-Canada and to the efforts of this government’s Conservative friends in Ottawa to move Canada very rapidly towards world price for oil. As I’ve said before, the government’s position on Petro-Canada is confused. I say it’s confused because every time somebody speaks about it they come up with a different position.

[4:45]

The Premier said yesterday that Petro-Canada’s retail operations could be sold off and that Petro-Canada shouldn’t be doing things the private sector could do better. But he also said that Petro-Canada needed the cash flow from refining and marketing to continue to carry out the national interests in frontier oil exploration and development. That’s precisely the point that we in this party have been trying to make all along.

Forgive me if I sound a bit of a nationalist, but I think there’s a lot of people in this country who would be proud if they could drive into a service station in Scarborough or up in Perth, or down in Windsor and buy a tankful of gas from a station that said Petrocan instead of saying Exxon, or Gulf, or BP, or some other of the seven sisters.

Bob Coates, national president of the Progressive Conservative Party, said: “Joe Clark, don’t sell off Petrocan.” I think Bob Coates has a better idea of what the people of Canada want than Joe Clark himself.

Petro-Canada is a tribute to what public enterprise can achieve when it is matched to a sense of national purpose. In just four years Petro-Canada has grown to be the largest Canadian oil company. Its assets approach $4 billion. The voices that support keeping Petro-Canada come from the oil industry, for God’s sake.

Hal Wyatt, the chairman of the Canadian Chamber of Commerce -- we couldn’t accuse him of being a socialist -- and Bruce Willson, a former president of Union Gas, say keep Petro-Canada, as does the Canadian Organization of Small Business -- they’re not socialists -- and Bob Coates. Most important of all, two Canadians out of every three oppose the federal Conservative government’s plan to dismantle Petro-Canada and this government has got to speak out on behalf of the people of Ontario and say absolutely unequivocally that every part of Petro-Canada is an essential function, it’s all essential, and unequivocally Ontario believes that no part of Petro-Canada should be sold off or given away to the private sector.

The evidence, though, is that the federal Conservatives don’t understand the problem or have simply decided that the shareholders of the huge oil companies are more important than the vast majority of Canada’s men and women. How can this province of oil consumers, how can our federal Conservative MPs from Ontario justify giving away to the people of Canada something the people of Canada already own? How do we justify turning a successful national oil company into a welfare service for the multinational oil industry whose public arm keeps the losses and the debts, while the profits are transferred into the private sector?

Mr. Martel: That’s Conservative thinking.

Mr. Cassidy: Doesn’t this Minister of Energy find it rather chilling that Imperial Oil has taken over Petro-Canada’s negotiations for oil supplies from Mexico? Remember Imperial, the company which last winter diverted Venezuelan supplies from Canada to other parts of its multinational empire? But now Joe Clark is saying, “That’s okay. You can handle it. We don’t believe we should have a real national oil company any more in this country.”

The multinational oil corporations have held the Canadian public to ransom throughout this century. Now, with Petro-Canada, we can protect ourselves. But the Conservatives up in Ottawa want to give the hostage back to the kidnappers, and we say that’s wrong.

Mr. Speaker: I wonder if I might interrupt the honourable member for just a moment to do something that’s required under the standing orders to be done before 5 p.m.?

NOTICES OF DISSATISFACTION

Mr. Speaker: Pursuant to standing order 28, the member for Ottawa East (Mr. Roy) has given notice of his dissatisfaction with the answer to his question by the Minister of Education (Miss Stephenson) concerning French-language education. This matter will be debated at 10:30 p.m.

Similarly, the member for York Centre (Mr. Stong) has given notice of his dissatisfaction with an answer provided by the Attorney General (Mr. McMurtry), concerning the integrity of the justice system. This also will be debated at 10:30 p.m.

Thank you very much. I apologize for having to interrupt.

ENERGY POLICY PAPERS (CONTINUED)

Mr. Cassidy: I think it’s no secret, Mr. Speaker, what I was to say next. As far as the New Democrats are concerned, we believe that Petro-Canada should remain as a viable, publicly owned and fully integrated national oil company.

We would like to see the Minister of Energy and the Premier telling Joe Clark it’s about time Petro-Canada expanded its operations into eastern Canada rather than simply stopping at the Lakehead. We’d like to see Petro-Canada used as a means of guaranteeing that the small, independent oil retailers and service stations of this province are not frozen out into the cold by multinationals who are determined to drive them out of business and put self-service oil stations in their place.

Mr. Martel: Ask Fern Guindon the news they put to him.

Mr. Swart: Ask Robins Fuels of Fenwick.

Mr. Cassidy: If the Conservatives in this House won’t be absolutely unequivocal about that, I ask them to explain how consumers in this province are better protected by letting Petro-Canada be transferred into the private sector; by letting it become a large oil corporation, just like the others, a large oil corporation whose duty to its private shareholders will have to come before its duty to the people of Canada, the people who paid for its accumulation of assets.

If this province were now to set a course of using our energy more productively, and if we knew that Petro-Canada was able to play a major role in defending our interests in petroleum, it would be easier to face with equanimity the question of future oil prices in Canada. But, as things stand now, we have a privately owned oil industry which is taking more than a billion dollars a year from taxpayers for exploration with no guarantee that there will be a return for Canadians.

We have our Minister of Energy estimating that from 1978 to 1995, primary energy use in Ontario will rise by some 50 per cent to the equivalent of 718 million barrels of oil a year. We have a government in this province which, for all of its brave talk about price, is in close alliance with the federal Conservatives and worked actively to get Joe Clark elected to power. Will loyalty to the power of their fellow Tories outweigh the interests of the people of Ontario? The jury is still out on that question.

But the jury in the market place, long ago, returned its verdict in the interest of the oil companies. You just have to look at the profits of the oil multinationals to understand that the oil pricing policies in this country are very much in the interests of these foreign-controlled companies.

Just take the first six months of 1979. Six of those companies, six of the seven sisters, Texaco, Gulf, BP, Shell, Imperial and Petrofina, had net earnings of $569 million in the six months to June 30, 1979. In the corresponding period of 1978 their earnings were $410 million, so they had an overall increase of 38.6 per cent in net income, the poor dears.

Mr. Martel: Poor beggars.

Mr. Cassidy: In the case of Shell, last year, I believe, it paid no income taxes at all but its profits were up by 53 per cent. In the case of Petrofina, poor dears, profit was up by 278 per cent.

Mr. Martel: Do you think they can stand it?

Mr. Cassidy: Look at the way, as well, that the taxpayers of this province, and of Canada, are making a massive contribution to the profits of these corporations by way of interest-free loans and deferred taxes. These same six foreign companies have a total of over $1.6 billion in deferred taxes as of December 31, 1978. In the case of Imperial, it was $577 million, more than half a billion dollars, in interest-free loans from the province of Ontario and from the rest of Canada. Yet, the government sucks away a few million dollars from the energy corporation because it doesn’t believe in getting into that line of business.

Mr. Martel: They’re screaming all the way to the bank.

Mr. Cassidy: As I said, the jury is certainly in on oil company profits.

We in this party have made it absolutely clear that we’re opposed to world price increases along the lines that are now being proposed by the Joe Clark government. The thought that the price will go up by $1 a barrel in January and by $3 a barrel in July is unacceptable to the New Democrats in Ontario.

The idea that Ontario Conservatives, or federal Conservatives, after all their history of subservience to the private sector, will be able to effectively tax windfall profits accruing to the multinational oil corporations is, frankly, hard to believe. The Liberals weren’t doing it before and the Conservatives aren’t going to do it either. But we have to say that this government’s suggestions about protecting low-income consumers in Ontario are also hard to credit. It’s not enough for Ontario to say that it hopes the federal government will do something. Nor is it enough to say that there should be a cushion for a year or so for people on low incomes but, after that, they will have to pay the full cost no matter what the hardship.

This government is saying that it will approve a $1 a barrel increase in the price of oil on January 1, but is leaving unstated what’s to come next. As far as New Democrats are concerned, we believe that Ontario should oppose oil price increases because of the harm they will do to consumers, to industry and to jobs in this province.

We should be saying to the federal government that if the federal government is going to insist on raising the oil price there should be irrevocable commitments in a number of areas: irrevocable commitments that windfall profits not flow to the multinationals; that we will set our prices independently and not use the world price as a standard; that the proceeds of the price increase the federal government wants to impose are used to implement the creation of sustainable sources of energy and conservation; that those proceeds are used to protect jobs in industry as it becomes more energy-efficient; that those proceeds are used to permanently cushion low-income consumers as well as small businesses from the damaging impact of energy price increases.

The subsidies from the taxpayers to multinational oil companies for exploration and development; the minister knows they’re as high as 140 per cent of the cost. When you spend a buck you get $1.40 back, if you’re in the right tax bracket in this country right now. Those subsidies are so scandalous that they too must be restructured as part of any commonsense policy by the federal government. I look forward to hearing this government say that as well, if Joe Clark insists on carrying forward his ideas of oil price increases.

Those subsidies must be restructured so that when hundreds of millions of dollars of taxpayer’s money go to multinational corporations -- if that’s to continue -- people of Ontario and Canada will be repaid in reasonable prices, will be repaid in secure supplies and, most of all, will be repaid in real progress in bringing this foreign-dominated oil industry under Canadian control.

Mr. Martel: It’s the only solution.

Mr. Cassidy: That’s right, 80 per cent foreign-controlled, 75 per cent foreign-controlled. How on earth can we hope to run an oil industry, run an energy policy in Canada when the major source of supply is still under foreign domination and there’s not a peep from this government? As far as the federal level is concerned, it’s giving up Petro-Canada, the only bulwark we have.

Mr. Laughren: What a silly Prime Minister we have.

Mr. Cassidy: Ontario should also be insisting that the link between natural gas prices and the price of oil should be severed. This province should make its priority for natural gas clear by withdrawing its support for the new National Energy Board reserves formula which promises to allow export to the United States of a further two trillion cubic feet of natural gas. The issue is technical, but the NEB has changed its formula to allow two more trillion cubic feet of natural gas, of low-priced supplies from western Canada, to go to the United States. Ontario hasn’t opposed that. Ontario’s gone ahead and said, “Yes, the NEB is on the right track.”

Mr. Martel: You sound like Joe Greene again: “If you don’t take my oil, you can’t have my gas.”

Mr. Cassidy: That’s right. As far as we’re concerned, the lesson of the 1960s, when Canada sold off vast amounts of natural gas at bargain prices, must not be ignored.

In planning for our energy future, improvements in energy productivity are just as important as what Ontario says to Ottawa. If we make our use of electricity more efficient, we can divert capital funds to more immediate energy needs. If we invest in saving oil or natural gas, we can extend the life of our current supplies and postpone the transition to higher cost reserves. If we invest in renewable energy technology, in research and development, we can create jobs in Ontario and start the transition to an economy that’s based largely on sustainable sources of energy.

Exhortations to the federal government are not enough. Hand wringing over oil prices is not enough. We’ve got to have more than words. We need action here in Ontario by the government of this province.

Hon. Mr. Grossman: Mr. Speaker, I am of course, pleased and anxious to have an opportunity to contribute to this debate on the energy supply and price problems faced by Ontarians and, I suppose, as we sometimes tend to forget, Canadians generally. As all members of this House have acknowledged, the issues of crude oil supplies and the security of their supply are questions which are of paramount importance to the people of this province and to the people of Canada as a whole.

[5:00]

It is, of course, entirely appropriate that the elected representatives of the people of Ontario have indicated their concerns here in this Legislature: their concerns about the amount of any proposed price increase in crude oil, about the various methods of imposing future price increases, about the timing of those price increases, and about the whole question of the disposition of oil revenues and their possible very great impact on the nature and level of growth of this country.

These issues are complex. All three political parties in this House have differing formulae on how we might deal with the issue of pricing and distribution of oil revenues, although sometimes one has a greater deal of difficulty ascertaining the views of the opposition. Nonetheless, I think our overriding concerns are fairly clear.

Firstly, our concerns specifically are: (1) the timing of any increases; (2) the direct and indirect economic impact of an oil price increase; (3) their possible effects on the future health of our manufacturing industries; (4) the lack of any national adjustment program that would ensure there is minimum damage to our economy.

On the question of timing, I believe it is important this Legislature now express the clear view that it is not now the time to go beyond the $1 per barrel increase scheduled for January 1, 1980, that was previously agreed upon between the federal government and the producing province. The simple fact is our Canadian economy just can’t take an increase greater than that at this time without some severe potential of hardship.

The hard, cold reality is that there is now a recessionary situation in the United States and the economic condition will likely continue over the next period of time. The impact of that, of course, will be to slow the rate of growth of our own economy here in this province. With the United States facing the prospect of a negative real growth for the rest of 1979 and the very strong possibility of an eight per cent unemployment rate in 1980, the demand for Ontario-produced goods in our largest traditional export market may be expected to decline.

My concern, of course, is that if oil prices are raised significantly the economy of this country would have to bear the cost of adjustment during a period of economic downturn, while at the same time we are just now beginning to make the necessary adjustments to the widespread changes in tariffs in the trading environment following the Tokyo round of the General Agreement on Tariffs and Trade negotiations.

Mr. Kerrio: It sounds like you are on our side there.

Hon. Mr. Grossman: You have been trying to jump on our position the last few days. I can’t help that. You are jumping to the most popular position day after day. You are just proving our position is popular and that is because it is right. I can’t help it. We’re used to you piggybacking on us.

Mr. Speaker, I would like to deal with some of the direct, clear effects of an increase as high as $5 per barrel.

Mr. Kerrio: Funny you should use that figure.

Hon. Mr. Grossman: I don’t want to read that the Leader of the Opposition once again is not only accusing us of this, but stating it as though it were a fact, that this government is supporting a $5 per barrel increase. I want to choose my words very carefully.

Mr. J. Reed: You stand accused.

Mr. Cunningham: You supported Clark.

Hon. Mr. Grossman: If you want to go on that basis, you fellows supported Trudeau and you know how fast he wanted to move them up. You couldn’t wait to embrace that. Now that he has gone, where are you going?

Mr. Cunningham: It was convenient on May 22, but it’s not convenient now. You can’t have it both ways. He didn’t know what his policy was on May 22.

Hon. Mr. Grossman: Who didn’t know what his policy was? He didn’t know what his policy was, you didn’t know what his policy was; but we sat here and listened to you jumping for a world price for oil for two or three years until it looked like it might happen. Then you got scared of the issue. Then you moved somewhere else, Lord knows where. I’m not sure where you are today.

Mr. Haggerty: Joe picked that up, and then he loused it up.

Hon. Mr. Grossman: Except we know you are trying to embrace our policy papers because they seem to be going well for us.

Mr. Speaker, the direct effects of an increase of $3 per barrel, which we are not supporting but fearing, would be as follows --

Mr. Kerrio: Three dollars for Frank Miller.

Hon. Mr. Grossman: -- a regular negative income gross of minus one; a 2.2 percentage point jump in the consumer price index; an increase of over $1.5 billion in Ontario’s total oil and gas bill; and a direct home-heating and automobile-operating cost increase of $220 per year for a typical Ontario family.

Aside from those immediate, direct costs of rising oil prices on the economy, we must not forget that there are potentially far more serious and more harmful indirect costs which can result over the longer term. These indirect costs would include: the effect on consumers’ demand and purchasing power; the effect on inflation and the resulting pressure on wage bargaining; and of course, the effect on investments.

A $4 per barrel increase in the price of oil, with natural gas indexed, effectively removes $4 billion from the purchasing power of Canadians. It affects consumers in every province. In effect, it is a tax, a tax which reduces the purchasing power of Canada’s citizens immediately and, of course, helps to create double-digit inflation. The problem is that economic growth would be cut because purchasers would obviously have many fewer dollars to spend and, thus, consumer demand would be reduced.

Mr. Peterson: Is he trying to convince us?

Hon. Mr. Grossman: Inflation would also be aggravated by rapid oil price increases because workers, understandably, would demand wage increases aimed at recovering the costs of energy, increases which could not be paid for out of the Canadian economy unless we had dramatic improvements in productivity at the same time. Of course, we are not going to be able to achieve the increased productivity we would have liked because of these very same oil price increases. Consequently, a wage-price spiral almost certainly will follow.

Also, it is important to understand just how great an impact this type of increase in the price of oil would have. Because there is some consideration being given to doing it in one fell swoop, we have a situation where, instead of phasing certain inflationary elements into our economy, we can take our current inflation level and add a clear, identifiable portion to it.

I think history will record that when there is that direct, invisible increase on top of our already extant inflationary rate, that in itself tends to have a more direct and clear impact on the inflation psychology and the demands of people to try to keep up than would be the case if it were more subtly done and introduced over a longer period of time. This is not to say that choosing the second method is good, but simply to say that an immediate, one-fell-swoop type has more dramatic and worse implications in terms of inflation than the latter.

In relation to wages, Canada has only recently recovered from a situation in which unit labour costs were above United States levels. The depreciation of the Canadian dollar and the commendable moderation in wage demands assisted this recovery. However, that moderation has resulted in an erosion of real income gains which I suspect labour will not willingly accept much longer in the face of further oil-price induced inflation. Rapidly increasing oil prices will no doubt lead to pressures to recoup the wage-earners’ position, pressures which will intensify where oil price rises substantially increase the rate of inflation. It must be stressed also that reduced demand, completed with a higher rate of inflation, would have serious consequences for our much needed new investment, investment which is so crucial to improving the competitiveness of Canadian industry and to realizing the necessary real income gains for all Canadians.

The two key determinants for investment, one the rate of return and secondly product demand, would both be reduced respectively through the inflation and reduced spending that would be brought on by increased oil prices.

Mr. Peterson: You are giving us a grade eight economics report.

Hon. Mr. Grossman: When you are listening, I have to do it to that level.

Now, Mr. Speaker, if there are to be increases, it is in the interest of all Canadians to have the assurance that we can adjust to those increases without creating irreparable harm to our economy and without causing difficult adjustment problems for our manufacturing enterprises. Within the nationwide debate taking place right now, and in the debate taking place here in this Legislature, Ontario can and should speak up for manufacturers. It should be an advocate of the kinds of policies that are needed to permit our manufacturing base to grow, just as Saskatchewan will speak for wheat, the eastern provinces for fishing, and Alberta for oil price increases.

We have to emphasize that we are not against the improvement, upgrading and diversification of other provinces’ economies; but from Ontario’s view and, indeed, from a national view, I must say that for too long here in Ontario we have somehow been resented for, and too often have fallen into the trap of apologizing for, our manufacturing strength and our geographical location which gives us that manufacturing strength.

We do not resent Alberta’s oil, or the Maritimes’ fisheries; but neither will we allow them to think that we achieved our manufacturing strength at their expense. We didn’t. Indeed, we have shared, and will continue to share, the benefits of our manufacturing base.

I understand in its own self interest the province of Alberta wants increased oil prices. If increased oil prices in fact occur, then, Mr. Speaker, Ontario must play a national role in ensuring maximum benefits for all Canadians. We feel that this is achievable through proper timing and the use of any additional revenues.

Let’s have a quick look at manufacturing in Ontario. It employs more people than agriculture, mining, forestry, construction, finance, insurance, real estate and transportation combined. About one million people, or 25 per cent of all the jobs in Ontario, are directly involved in manufacturing. For every 100 jobs in manufacturing, there are about 68 other jobs, it is estimated, created in service, support and supply work through the various linkages that exist in our economy.

The fact is, Mr. Speaker, that over the next number of years, manufacturing will, if anything, become even more important as an employer in this province. So a growing share of the new jobs we need must, and we believe still will, come from manufacturing.

The fact is that until the last year the trends in manufacturing employment were not all that encouraging. There was good growth in manufacturing employment in 1978, but previous to that there was an actual loss in manufacturing employment in this province in the previous two years. The growth in manufacturing employment in Ontario and across Canada would most certainly be jeopardized by significant oil price increases.

There is, therefore, a need for governments to develop and apply sensible strategy that will help our manufacturing industries to build the industrial strength that will be needed to compete throughout the 1980s.

I think it’s important to understand that while we argue the case for manufacturing, which is indeed our mandate and our responsibility, we are not simply arguing a one-sided case on behalf of our manufacturers. We, as a government, recognize that if Canada is to prosper, we simply cannot permit a balkanization of the various sectors of our economy.

We cannot have manufacturing somehow competing with farming, fishing competing with energy, or pulp and paper competing with mining. Each of these sectors is important to our overall economic strength and each must grow. The challenge, of course, is to marshal all of the resources of this country, including our energy resources, to permit each to grow.

[5:15]

An hon. member: What they need is another Manning out in Alberta.

Hon. Mr. Grossman: I will tell the House what we don’t need in Alberta. We don’t need this fellow, Mr. Taylor, the leader of the Alberta Liberal Party. He was kind enough to say at this vaunted meeting in Winnipeg where the Ontario Liberal leader went over so well, “Albertans don’t want to pour money endlessly into poorly-run central Canadian industries merely to keep a bunch of incompetents -- or even worse, foreign subsidiaries -- going.”

That’s the kind of Canadian we need. That’s great stuff. That is the Alberta Liberal leader. I am glad the member found an opportunity for me to get that in.

Mr. Ruston: He’s an Alberta Liberal.

Mr. Conway: You are a fifth-column Tory.

Hon. Mr. Grossman: Our manufacturing sector in Canada is, unfortunately, energy inefficient compared to our major competitors. The facts are our existing industrial mix is very energy intensive by international standards. The fact is that higher energy prices have left Canada with a substantial part of our capital stock and existing plants energy inefficient when compared to our major competitors in other countries. Also, unfortunately, comparatively little research and development until now has been done by our industry on renewable energy technology.

Mr. Laughren: And you’re proud of it.

Hon. Mr. Grossman: I am proud we are now beginning to see a response, as the Minister of Energy indicated in his paper last week. I am proud to say there are many approaches being made to our ministry for assistance in doing this. As always, both the employment development fund and our regular on-line ministry programs are available and beginning to be used by our manufacturers to get into those energy technological developments.

In the light of the fact that energy-efficient techniques and products have been introduced by Canada’s major trading partners, it is clear our industry must adjust if it is to remain competitive in our increasingly energy-conscious world. The potential for increased energy efficiency is, as the Minister of Energy has said, substantial, but it can only be realized by increasing substantially the expenditures on new energy-efficient products and processes.

My ministry has conducted a study of the financial investment required in a number of industries that would enable them to adjust to higher energy prices through the acquisition of new energy-efficient capital equipment. The investment requirements are enormous by any standards. The size of the total investment involved for industry to adjust to, say, a $4 per barrel increase is in excess of $1.8 billion.

For the four heaviest industry energy users -- the food and beverage industry, paper, primary metals, and chemicals -- the estimated investment required to offset an energy price increase of $4 per barrel is over $1.7 billion. However, increased oil prices also, of course, bring with them new opportunities -- opportunities to develop these new energy-efficient products and techniques. To take advantage of these opportunities, Canadian industry must substantially increase their expenditures on research and development.

As this House well knows, as a percentage of total output our present rate of R and D spending is less than half of that of West Germany or the United States. In terms of total dollar investment in R and D, Canadian research and development spending simply does not compare with the resources being deployed for those purposes by other nations.

Clearly then the cost of adjustment for our manufacturing industries is enormous. What is urgently required are government strategies designed to assure that capital expenditures are encouraged on research and development and on increasing our industries’ energy efficiency.

The fact of the matter is that Canada needs a coherent policy directed to help key Canadian industries to adapt to the increased cost pressures that will result from increased oil prices and to take advantage of new energy-related opportunities. I’m not talking about a program to prop up inefficient industry.

Government revenues generally, including oil revenues, should not be squandered in support of fundamentally inefficient or declining industries. We never said that. Throughout Canada our resources should be used to reinforce the position of our competitive sectors needing unusual and temporary aid to adapt to abrupt changes in production, transportation and other costs.

This approach parallels the position that this government has taken on gas adjustments. We believe that the assistance must be carefully directed and must be timely and temporary. Therefore, in addition to the gas adjustment program we have been seeking, we also need a national industrial energy price adjustment program.

We believe that the federal government would be prudent, if prior to any decision on the amount of any added price increase on July 1, it undertook to: first, monitor and assess the impact of the United States economic situation on the Canadian economy over the next few months so as to ensure that the amount of any July 1 increase is adjusted to the realities of what the economy can handle at that point in time --

Mr. Laughren: That’s obvious already. We know that.

Hon. Mr. Grossman: -- second, develop a comprehensive energy and industrial adjustment strategy that can go into effect by that same July 1, 1980, date and make a final decision on the mechanism for finding the new capital required to fund an adjustment program.

Mr. Kerrio: He can’t even find his luggage.

Hon. Mr. Grossman: Clearly then the federal government ought to ensure that measures like an adjustment program are in place prior to any decision on the extent and timing of future price increases.

Mr. Haggerty: What are Sinclair Stevens’ views on the uranium cartel in Ontario?

Hon. Mr. Grossman: I think it’s important that if we are serious about trying to create a strong set of national policies for economic growth, we have to bring to that discussion as well a sensitivity to the desires of other provinces to build their own capabilities, based on industries in which they enjoy an existing or potential strength too.

Ontario has always recognized that the producing provinces have a right to a fair price and, indeed, an increasing price as their supplies become more expensive to secure. But it should also be remembered that Ontario has over the years indirectly, but quite willingly, contributed a large share of the expenses of Canadian nationhood. Through revenues raised from our workers, consumers and businesses, we have supported federal regional development efforts in all parts of our country.

Transfer payments have gone from Ontario to help provide services in lagging areas throughout this country. Even now our major revenues, paid through the federal treasury, are offsetting drilling subsidies for new oil supplies in Alberta. We have assumed our responsibilities as a well-to-do province within Confederation without hesitation and without regret.

The cost of oil exploration in the west and environmental safeguards along our ocean shores are quite properly being borne by all of us. For this arrangement to continue to mutual advantage, we must also share the benefits.

We must be able to expect, therefore, a secure supply of western and eastern energy and some excellent consideration on matters of price. More than that, what Ontario is saying is that energy in total, our entire supply of energies gleaned from this great nation’s natural resources, is a great and important national tool. It is a strength, in fact, few nations have. If we fail at this point in time to marshal those vast resources, to use that great national tool --

Mr. Nixon: It sounds like a leadership speech.

Hon. Mr. Grossman: -- for the benefit of all of our common wealth --

An hon. member: Did the public pay for this speech?

Hon. Mr. Grossman: -- then we will have failed as a nation.

Mr. Haggerty: Your best friend in Ottawa was Trudeau.

Hon. Mr. Grossman: We do believe the federal government has the authority and -- let us be clear -- the responsibility to protect those national interests it has been charged to serve by the electorate across Canada.

Mr. Laughren: Oh? Hyperbole now.

Hon. Mr. Grossman: The Ontario government has taken what we believe to be a wholly constructive position on the question of the distribution of any new oil and gas revenues.

Mr. Haggerty: Your best friend over there in Ottawa was Trudeau; your worst enemy is Clark.

Mr. Deputy Speaker: Order.

Hon. Mr. Grossman: You know the feeling, don’t you?

We have pointed out the potential magnitude of the eventual flows of oil and natural gas revenue --

Mr. Kerrio: You’re going to find out what it’s like.

Hon. Mr. Grossman: -- is such that unless the federal government addresses the issue head-on, the country will be severely strained in both economic and social terms.

Mr. Nixon: That’s fine, but what are you going to do about the island homes?

An hon. member: Larry’s going to buy them.

Hon. Mr. Grossman: The fact is a national issue needs national leadership.

Mr. Nixon: Let’s play some hardball on that one.

Hon. Mr. Grossman: It’s always better than softball.

The fact is the distribution of government revenues across Canada is now severely unbalanced. As a result, the equalization system that has served us for many years is no longer anywhere near as effective as it used to be.

Petro-dollars, not constitutional lawyers, are rewriting our federal system. Without a referendum or a mandate, these money flows are quickly destroying the authority of our federal government to pursue its historic responsibility.

Mr. Laughren: That’s Frank Miller’s line. Who writes that stuff?

Hon. Mr. Grossman: Doesn’t the member wish he knew?

Simply, the goals of shared economic opportunity, nationwide social advance and adequate employment growth without rapid inflation may soon be unattainable.

As members of this House know, the fiscal imbalances between the provinces have already grown dramatically since 1973. The Alberta Heritage Fund has now accumulated almost $5 billion, of which our consumers here in Ontario have contributed approximately 29 per cent.

Mr. Grande: Where’s the Ontario heritage fund?

Hon. Mr. Grossman: A further price increase in the range of $4 to $5 a barrel would mean a massive shift of $4 million to $5 million per day from consumers to producers. If that kind of shift in capital occurs, the federal government must understand it will have created a situation in which our national economy will have a great deal of difficulty recovering from.

The federal government must develop some type of an adjustment program that recognizes both the rights of consumers and producers. Mr. Speaker, may I say that --

Mr. Peterson: In closing.

Hon. Mr. Grossman: I never dare say that; they applaud when one says that.

May I say I was interested, though not surprised, to hear earlier in the debate today all the comments about “kissing cousins” and the suggestion that this government would somehow get into bed with the other Conservative provinces and the federal government. I think it is interesting to note this policy initiative taken by this government was taken early on in the new regime in Ottawa. There was no suggestion that even a honeymoon period was allowed. Indeed, if this government had followed a different path and opted for any one of the other alternatives the Premier outlined at the start of his remarks this afternoon, then the accusation we were getting in bed with our friends or making life easier for them would have some validity.

Mr. Nixon: Start low, finish high.

[5:30]

Hon. Mr. Grossman: We must.

I remind the members of this House that this government developed a comprehensive policy; did not hide it in a drawer until a federal-provincial conference came along; did not let it lie in the woodwork but brought it out here on the floor of this House; took it to Ottawa; spoke about it in places across this country and took it forcefully to the federal government.

Clearly, the position of this government is having an impact on those decisions, as indeed it should.

Mr. J. Reed: You don’t believe that.

Hon. Mr. Grossman: I remind members that one of the reasons we take this course, urge these decisions and have followed this pattern of dialogue with the federal government is to drive home to them the importance of the decisions they’re making, not just to Ontario, not just to Ontario’s manufacturers, not just to Ontario consumers, but to consumers and manufacturers, indeed to citizens throughout this country, no matter what province, whether it is a producing province, a consuming province or a province that relies on fisheries, wheat farming or whatever. These are national problems and national challenges requiring appropriate national leadership of the type that the government of Ontario is showing right here.

Mr. Peterson: If the honourable minister is finished with his speech, perhaps he could pass it down the row because someone else is going to want to study it before he reads it.

Hon. Mr. Grossman: I suggest you read it.

Mr. Peterson: It’s interesting what the Premier has done. He’s arranged two bookends for the front bench. They’re about matching in size, matching in width and matching in charm. They are two diminutive members. It’s so aesthetically arranged, with all those comic books between them.

Unfortunately, from the way we have organized this, I have only 10 minutes and I want to hit some of the high points. I am very happy this debate is taking place today. It’s long overdue. It’s the first time I recall that we’ve had a meaningful discussion on an issue like this, even though it’s been systematically repetitive from the government side so far.

Interjections.

Mr. Peterson: This issue is one of the most significant issues that we as legislators will ever have to deal with. It’s something we’ve failed to deal with. We failed to see the signals collectively in 1973 and 1974, as these problems started to escalate. Now the things we do collectively are going to set on course a pattern that is going to very much influence the destiny of our children and the people who come after us. It’s going to take some very hard decisions.

I can tell you, Mr. Speaker, that I don’t think the government has effectively made that decision to bite the bullet and do the tough things it is going to have to do. We have had a series of reactions by this government over a period of years. Do members remember those famous 90-day price freezes just at election time? Remember the famous blended-price proposition of this government? It was systematically hooted out of every hall it had ever been presented in. We’ve seen a whole series of politically-inspired initiatives in response to a particular set of circumstances at a particular time, but I have yet to see a cohesive energy policy. I have yet to see an appreciation of the fundamental difficulties and a recognition of the price we are going to have to pay.

The minister tried to make some noise about that a couple of weeks ago with his new $30-billion policy. Anyone who read that was left flat and disappointed. We all thought it was a progressive move to appoint this man into the Ministry of Energy. But let us not forget that we in the opposition have argued continually -- certainly since I’ve been in the House and before -- that the Ministry of Energy should be one of the central ministries in this province, if not the most important ministry after the Premier.

They responded with a series of people who were either on their way up or on their way down. No one of substance has been put into that job. When we looked at this last appointment, we said perhaps we have a man with clout --

Mr. Nixon: A heavyweight.

Mr. Peterson: -- a heavyweight, who is going to contribute something substantially, as opposed to just keeping the government out of trouble. So far that’s all he’s done. He has not shown very well. I take the charitable view. Let’s give him another week or two to get a grasp on that portfolio, even though in my judgement it is a pretty insignificant one at the present time, certainly from the way it has been run.

We have always argued that the Energy portfolio is an extremely important one, given Ontario’s particularly vulnerable situation as the highest per-capita energy consumers in the entire world, and given the fact that we import about 80 per cent of our energy. In addition to that, we are running about a $9 billion to $10 billion bill -- roughly 10 per cent of the gross domestic product of this province -- and 80 per cent of that being imported from other places.

That is a serious set of circumstances and I, for one, don’t feel the problem is going to be solved just by carping that the other people shouldn’t raise the price, or we must need another year or two to put off the inevitable consequences. It is historically inevitable that we will go to world prices. I don’t like it and I’m not at all happy about it. But we on this side of the House have always had the courage to say it’s going to happen, rather than just feeding people pap you think you might be able to sell at election time or some other time politically to your advantage, and trying to fight off the wolf at the door. The wolf is at the door, and he’s starting to come in the door.

Had we had the vision, had we put the same energy into some programs we had into political rhetoric four or five years ago when we had all the signals, we could be further down the road than we are today.

Any energy strategy in this province has to be necessarily a defensive kind of strategy. Obviously, we have to worry about supply. We have to worry about pricing. All of those things are important. They’ve been very ably dealt with by my leader already today. My colleague, the energy critic, will deal with some of the alternative sources of energy. But we do have certain indigenous advantages here, and we should be taking advantage of them. My colleague will talk about those.

I say only that the whole orientation of this ministry is wrong. Rather than just a policy secretariat that has become extremely rigid, as I see it in the last little while, this ministry has to take a far more activist role.

I for one very much regret the virtual dismantling of the Ontario Energy Corporation. I think that could be used extremely creatively in our own interest. There are a myriad of things that can be done with that -- from encouraging renewable forms of energy to encouraging exploration here in our own province to working with some of the resources that we have -- because we still do have some. I hate to see that company raped.

I do not like to see the deputy sitting as chairman of that company because that’s a total mistake. Let’s get someone who is imaginative; let’s get someone who is creative; let’s bring some “free enterprise mentality” into that kind of company. Let’s work with private enterprise in this province to create renewable grants for research and development, renewable forms of energy, grants to individuals, and all the myriad things I can think of that we have argued about for years in this Legislature.

A year and a half ago in the budget response we came out with a 30-point comprehensive and detailed energy strategy which is financially-related in that every dollar we save is a dollar that creates more jobs in this province. But to have as your strategy only a posture that wails against someone else -- in this case Ayatollah Lougheed from the west -- is not going to get us very far.

I wish, fundamentally, there was an honest realization of the facts and what’s going to happen next year and what’s going to happen the year after that. Then we can honestly deal with the problems. But until we have that fundamental realization, I am despondent about moving not only the government bureaucracy, but private enterprise and all citizens of this province, into the right course of action.

We have had the courage, I say with some pride, to advocate extremely tough compulsory conservation measures in this province. The Premier’s response is, “Do you want the government in the attic of the bedroom?” It’s a very catchy response, but indicative of a lack of fundamental awareness of the problem. I blame the Premier for putting them into that job; for not realizing himself the seriousness of that portfolio.

I want to say a couple of words about the oil pricing matter. I regard it not as a question of if it’s going to happen or not; it’s a question of when and how much. But the fundamental question is who gets it and what we are going to do with it collectively as a nation, and what share the other provinces are entitled to.

I read the projections that Alberta will have something like $25 billion or $30 billion or $35 billion by the end of the ‘80s -- it’s already the largest pool of free capital in the western world invested in short-term securities. It’s the most embarrassing position for the Treasurer of Alberta today, because he doesn’t know how to invest it. It’s such a disruptive pool of capital, because they have trouble finding places to place it on a short-term basis.

I assume -- I take him at face value -- they’re looking for long-term placements for that kind of money. They are prepared to lend it to other provinces. All that means, of course, is that the province of Ontario will end up in debt to Alberta, rather than to the Canada Pension Plan, or various insurance companies in the United States. It doesn’t fundamentally change our position, because our position today is a very difficult one.

The imposition of extra price increases which we are going to have to take and absorb are going to be highly disruptive. We are facing a 0.7 per cent real growth in this province this year, when our prospects for the immediate future are not particularly optimistic. When we don’t see any particular light at the end of the tunnel, then we are facing another series of wrenching adjustments. That is why I come back and say to the government, we need a defensive strategy, we have to be tough, and we have to do it now. We have to adopt many, many programs, all of which will affect the total problem a little bit, at least.

One of the things I said I wanted to see resurrected as a functioning, viable unit is the Ontario Energy Corporation. I also want to see a massive program of oil-to-gas conversion here in this province.

I have just bought a new home, Mr. Speaker, and I tried to convert it. If I told you all the problems I had to go through with Union Gas and your dear friend the former Treasurer -- it has the most inept organized program I could possibly imagine.

Union Gas won’t even take out the oil that’s sitting there. There are 200 gallons of oil. They won’t pump that out. There’s no return value for your old furnace.

What I’m saying is they make it so difficult to convert, when the government should, as a matter of public policy -- and Union Gas surely should; it wants to sell gas I would assume -- make it so much easier. I can tell you, Mr. Speaker, most people facing those kinds of problems are going to give up and say, “I will stay with oil.”

I can’t imagine an exclusive distributor, under provincial jurisdiction, getting away with the incompetence that they have got away with. I have been negotiating with them for four months. The issue is still not resolved. But I expect that the minister will look into that kind of situation and come up with some kind of an assistance or some kind of a program, at least, that Union Gas deals fairly with the various people who want to convert. That is in our interest, very clearly.

That’s just one suggestion. My friend at the end of the row will have many more suggestions. The government has heard them for years. I say to the minister only -- I’ve got a note that says “time,” Mr. Speaker -- just do it. We will support -- I know we will -- the tough measures.

This is a time for leadership. This is a time in that we have a chance to influence the destiny of those that come after us and in making the tough decisions today. Don’t just rail and carp, and hoot and holler, and try to get elected by making everybody mad at Alberta. Everybody’s tried those tricks. We understand the politics of this game. There’s far more at stake than that, far more at stake than that.

I feel very confident, with the support of the New Democratic Party and the support of this party, that they are prepared to show some leadership on this issue. We have yet to see the leadership from the minister.

Mr. MacDonald: Mr. Speaker, one of the documents upon which this debate is focused is entitled A Policy Framework for Canada. The second one is A Policy for Ontario. Therefore I assume that what we have finally is a policy with regard to energy that this government has espoused.

That being the case, I want to say to the minister, emphatically at the outset, that it is a policy that is shot through with conflict, with contradictions, with uncertainty; that there’s more gap than substance, there are more questions than there are answers. In fact, it bristles with questions, particularly when one tries to fit into the picture that the minister is sketching Hydro, on which I want to lay my major emphasis in my comments this afternoon.

Even more important, there is no real commitment -- certainly no adequate commitment -- on the part of the government to achieve the stated objectives that the minister has spelled out for the government policy.

[5:45]

Let me start with the minister’s press conference on October 1. It was something of a discomfiting experience for the minister. It was obvious it wasn’t the most enjoyable thing in which he had ever engaged. About two thirds of the way through, one of the media boys was brutal enough to say to him, “Why did you hold a press conference?” The minister could only lamely say, “Well, I’ve been the minister for a month and I thought you would like to meet the minister.” It wasn’t very persuasive for the boys who were looking for news.

Let me take a look at what the minister unveiled, this grandiose $30 billion. Now $14 billion was in the conventional ongoing program. As has been pointed out already this afternoon, we knew all about it. There was nothing new in it at all, except one thing; namely, this new Minister of Energy expects to produce 1,000 megawatts at a price tag cost of $1 billion from the Onakawana lignite resources up in northern Ontario.

By chance, Mr. Morison, one of the top men -- one of the vice-presidents -- of Hydro, was before our committee the next day, and we asked him about it. Mr. Morison said, “I wasn’t aware the government was making this statement. In fact, our studies are to go on until the year 1981.” Is this just straight window-dressing to build a great facade, when it is still under study for the next couple of years?

Let me proceed to another rather intriguing thing about it. We listened to the minister talk about his 15-year program. In the course of talking about his 15-year program he emphasized three or four times that involves no new nuclear commitment, just the existing commitment. This was for a 15-year period up until 1995.

The reality of the program at the moment is that Darlington will be completed in 1990, and there is an intriguing gap between 1990 and 1995. Are there going to be no more nuclear plants?

Well, we asked Mr. Morison the next day when he was before the committee. It was very useful and fortuitous that he should come the very next day and give us this clarification.

Mr. Makarchuk: You guys should have got together before that.

Mr. MacDonald: I wonder what goes on between the Ministry of Energy and Ontario Hydro. He said to us, “I didn’t know anything about the statement that was being made. I’m not aware of the fact there is a gap in the program, because our plans call for a new nuclear plant in the year 1993.” Mystification fell upon us all.

I repeat: question mark, question mark, question mark, throughout the whole thing, not only with regard to the substance but with regard to the co-ordination between the Ministry of Energy, which is presumably speaking on behalf of Hydro, and Hydro itself.

Mr. J. Reed: Don’t presume, because they are not.

Mr. MacDonald: Let me go to the next part of the program, and that is, of course, with regard to renewables. Of that dazzling $16 billion which was going to be spent on renewables and which awed the Leader of the Opposition so that he was almost speechless -- he was certainly impressed -- $2 million of it is going to be in renewables of hydraulic power.

If I can avoid arousing the member for Halton-Burlington about this whole issue, a year or two ago Hydro was saying, “nonsense,” with regard to developing these new sites. Now 17 of the 43 are going to be developed; 2,000 megawatts, something approaching $2 billion.

Fine, that is a commitment and we had it from Hydro before. Nothing new, I repeat, a recycling, but at least it is a commitment. Then the minister has the colossal effrontery to argue that the other $14 billion, almost half of this dazzling, Cecil B. De Mile production amount of $30 billion, was going to be picked up by the private sector.

Interjections.

Mr. MacDonald: What a commitment! Has the minister forgotten -- don’t talk to the member for Cochrane South (Mr. Pope).

He’s not in the picture yet. He’s the next Minister of Energy when you are out.

Mr. Nixon: He doesn’t want it either.

An hon. member: The kiss of death.

Mr. MacDonald: Has the minister forgotten -- and this question I address to him -- that the last time the government wanted to develop something in the energy field, namely with regard to heavy water, Darcy McKeough went out on bended knee to plead for the private sector to develop heavy water plants? What answer did he get? None.

There is nothing in that experience to suggest the private sector is going to pick up the development of renewables. You’ve set it as your objective; it is a desirable objective. You are counting on somebody who on the basis of all past experience plus the whole ethic and approach of the private sector, is not going to respond.

Nobody knows if this is a profitable sector. The private sector isn’t going to move in if they are not assured it is profitable. You will want the minister to finance it and when he has proved it profitable, they will be glad to move in, but that means he has the initial action.

Let me proceed because time is so short.

Last spring, when we were discussing the surplus we have in this country, the Premier’s answer to our comment on the surplus was: “We should be delighted. The rest of the world has got a shortage of energy and here we are with this surplus.” He was suggesting, if not actually stating, electrical energy is a substitute for the shortage of oil.

Just let me make this point quietly to the minister, because I think he knows it.

Mr. J. Reed: I’ll make it louder --

Mr. MacDonald: Electrical energy is not a substitute for oil. Marginally, it may be and when, inadvisedly, electrical energy is used for heating purposes when one doesn’t happen to have enough oil, that may be a good thing, but electrical energy is complementary to oil, not a substitute for it. For the foreseeable future, at least until GM gets out electrical cars and a lot of other developments of that nature, the prospect of electrical energy -- even if it were desirable and it isn’t -- being used for mass transportation is I think out of the question.

Let us examine this surplus of 4,000 megawatts, the equivalent of $4 billion. The equivalent of two Pickering As, is the excess capacity of Hydro. If I may pick up on a comment of the Leader of the Opposition with regard to the ads, I can’t understand the justification for Hydro spending consumers’ money to advertise and say to the people of the province that some construction must continue to make sure the future of electricity demands of a growing population will be met.

We have 4,000 megawatts. The advertising is off target. What has Hydro done?

Hydro today is made up of a group of hard-nosed businessmen and those hard-nosed businessmen knew they had a profoundly embarrassing situation on their hands. They were producing far more than the market could absorb and they had to carry the debt involved with that excess generating capacity.

This is something the people of the province of Ontario really don’t yet grasp. What has Hydro done, not everybody else? What has Hydro done? I’ll tell the members. After spending $300 million, they have stopped and stored Wesleyville to the 1990s.

Having spent over $200 million on a half of a heavy water plant D up in Bruce, they have stopped and stored it indefinitely. They are now completing the other half at a cost of some hundreds of millions of dollars. When it is finished, there will be no market for its products -- AECL has stated it emphatically -- so they have to mothball it.

They spent $36 million on the Keith plant down in Windsor. Having done that, they got a rehabilitated plant because it was an old plant they closed up in 1976. Now they have mothballed the $36 million rehabilitated plant.

Mr. Nixon: They’ve got money to burn.

Mr. MacDonald: They have mothballed five of the eight generators in the Hearn plant. They have extended the construction program for Bruce B, for Atikokan and for Darlington in order to avoid adding more excess embarrassing productive capacity.

Mr. Nixon: Fortunately Nanticoke won’t work.

Mr. MacDonald: Yes, that’s one of many questions.

In other words, they hope by the year 1990 they will have absorbed this excess productive capacity.

Mr. Speaker, let me introduce you to something which to my mind was one of the most challenging, one of the most exciting things that has emerged out of our select committee. We all know Hydro’s historic growth has gone from seven per cent down to something less than the six when Darcy McKeough imposed upon them by his capital limitations, and down to a 4.2 until the end of the century. It will be down to 2.2 according to the model of the Ministry of Energy. This year, Hydro’s estimate for this year is 2.9, and for the first half of the year their growth was only 1.9. For the first nine months it was only 2.7, so they may live within the 2.9 for this year.

In other words, the proposition that the incredibly wasteful use of energy in this province could be brought to a halt, the proposition that we could reduce our annual growth in electric needs in this province to one or two per cent is not a totally unrealistic proposition.

This was a spectacular thing that was given to our committee, namely, if we could reduce our annual growth in electrical energy in the province of Ontario to two per cent, we would need no new generating capacity beyond Darlington before the year 2004. If we could reduce our annual growth to one per cent, we would need no new generating capacity beyond Darlington until the year 2040.

Ms. Gigantes: We wouldn’t need Darlington.

Mr. MacDonald: Let’s not get into that for a moment.

Mr. J. Reed: In other words, shut up.

Mr. MacDonald: Darlington, for better or worse, happens to be there.

Is it realistic? I want to suggest to you, Mr. Speaker, that in the countries of Europe, where they have had a high level of economic development, they have maintained and expanded their standards of living. They have done it using one third to one half less energy than we are doing in the province of Ontario. The challenge in terms of conservation and the more efficient use of energy is massive. In the continent of Europe they have developed cogeneration, where industries will use their waste materials to produce power for their own needs. We have done very little of it, and then we have renewable resources which we are only now getting around to.

This is the objective which the minister has set for himself. I suggest it is the kind of objective which is realistic and, if we can bring our growth in electric power down to that kind of level, not only will we be saving resources but we will be saving a massive expenditure in capital that is now going into the Hydro setup and which would be available for some of these other things.

To the extent that we can’t do that, we can bridge the gap by bringing in the renewable resources. As has been pointed out to the minister many times, we are spending over $1 billion every year on developing our existing Hydro system and only $16 million on renewables. That’s the kind of set of Tory priorities that is just mind-boggling. I am not going to add in the $14 billion that the minister hopes to get from the private sector.

Let me conclude my remarks by setting up for the minister a reminder. The Premier spoke to the CNA a few months ago. He said -- and it was a magnificent steal from NDP statements for many years -- that nuclear energy was an inescapable, unavoidable bridge from traditional, fossil-fired generation of electricity, namely, oil and coal, over to the renewables.

Our major complaint about the situation in Ontario is that we are spending well over $1 billion every year to extend the bridge, while we are spending a measly commitment of $16 million for what’s going to be at the end of the bridge, what’s beyond it and what will be the ultimate source of energy for people, not only in this country but in this world. What we would like to see is not only the objective which the minister has set, but a commitment really to follow through on it. Then the government might be able to realize the vision which in a moment of great clarify, like Saul on the road to Damascus, the Premier happened to see in NDP terms.

I invite the government to do something about it instead of making these idle commitments that the private sector will pick it up.

The House recessed at 6 p.m.