The House met at 2 p.m.

Prayers.

STATEMENTS BY THE MINISTRY

PQ WHITE PAPER

Hon. Mr. Wells: Mr. Speaker, it has been about three weeks since the government of Quebec presented its long-awaited white paper on sovereignty-association.

This House will recall the Premier of this province (Mr. Davis) has already spoken for this government in expressing our fundamental disagreement with the white paper proposals regarding sovereignty-association. I am sure, Mr. Speaker, you were glad, as I was glad, to see the views that were expressed here were endorsed by the Leader of the Opposition in this House (Mr. S. Smith) and by the leader of the third party (Mr. Cassidy).

I hope this statement today, made on behalf of the government, will make clear to members and other Ontarians the specific reasons why sovereignty-association is not in our best interests or in their best interests, and why this government will continue to reject any notion of negotiating such an arrangement with the government of Quebec.

It seems to us that the white paper is based on three fundamental misconceptions.

First, the white paper asserts the only choices facing Quebeckers in terms of their relationship with Canada are either sovereignty-association or the status quo. This, of course, is just not so. Virtually all governments in Canada, provincial and federal, are in a realistic mood to renew federalism and are seriously prepared to accommodate many contemporary interests -- some regional, some economic, some social, some linguistic and cultural.

Second, the white paper says it is directed exclusively to Quebeckers, but it is not merely a blueprint for Quebec. It is a blueprint for Ontario and indeed for the whole of Canada, and it is not an acceptable one. This is our country the white paper is proposing to divide. Moreover, if there are advantages for the people of Quebec in its proposals, and this I would say is indeed a very big “if,” there is unquestionably some very large disadvantage for the people of Ontario and the rest of Canada.

Third, the white paper states sovereignty and association are inseparable. Logically, then, if economic association cannot be achieved, the whole proposition should crumble. However, the paper refuses to come to this conclusion. Therefore, we can only conclude that sovereignty itself, the political independence of Quebec, is the ultimate goal the white paper is pursuing.

In addition to these basic criticisms, we note that the white paper is a smooth piece of political persuasion, written by Quebeckers to appeal to Quebeckers and, of course, pro-Quebec all the way. However, this approach provides a too-simple analysis of a very complex problem.

Possibly the most obvious aspect of the proposal for sovereignty-association, which Ontarians and other Canadians should note, is the implicit assumption in the white paper that Canadians outside Quebec will calmly accept the dismemberment of their country and will then sit down willingly and work out economic arrangements with the very government that caused the rupture in the first place. Ontarians have worked closely with Quebeckers, as have their governments, on many matters of common concern to us, as Canadians, over the years. Even though we would continue to be geographic neighbours, it would be naive to expect the same spirit of co-operation would automatically continue.

We believe we speak for the vast majority of Ontario residents when we say no kind of separation of Quebec from Canada could be amicable. The Parti Quebecois is fooling itself if it believes that life would be “business as usual” after such a drastic event. Ontarians are not unemotional when challenged on matters about which they care deeply, such as their country.

Even if it were possible to overcome these deep emotions, we would have to ask ourselves if sovereignty-association were attractive in terms of the political and economic interests of Ontario. The answer, we say, is a clear no.

There are 10 provincial partners in Confederation, each with varying populations and economic strengths, but 10 partners nonetheless. At the intergovernmental conference table, everybody has an equal voice. The white paper would make representation 50:50 -- 50 per cent Quebec and 50 per cent all the rest of Canada. The attraction of such an arrangement to Quebec is obvious, but there is no attraction to Ontario. Nothing would compel us to accept. Yet that is exactly what the white paper concludes. It does so because it makes, I think, two very debatable assumptions.

First, it assumes that political relationships must be based almost exclusively on linguistic and cultural communities. The proposal for an economic association of two politically independent states then flows from this assumption. The definition of political units and relationships has to take into consideration social and economic interests, as well as those which are linguistic and cultural.

Second, the white paper compounds this error by downplaying the real differences in economic and other interests that exist among Canadians outside Quebec. The current debate over oil and gas pricing is but one example of the significance of these differences. According to the white paper, Ontario and the eight other provinces, with the government of Canada, are expected to resolve any differences among them and come up with a single Canadian position. This position would then have to be further compromised to accommodate Quebec’s interests.

Even if our concerns regarding our interests could be overcome, which they cannot, we would have to ask ourselves whether the particular proposals put forward by the white paper make practical sense. In our view, the answer is, again, no, because the white paper sets out a model of economic association that simply will not work. The proposed new joint institutions, such as the community council and the commission on experts, are a recipe for deadlock, indecision and disastrous delay. Policies could not be determined if the two governments could not agree. There would be stalemate in the absence of any authoritative institution to resolve such policy disputes.

The authors of the white paper try to meet this objection by suggesting that in spite of the political and legal equality of the two governments in the economic association, in practice, one or the other would exercise predominant influence on particular issues. Asbestos is put forward as an example of an issue where the Quebec partner would likely predominate, whereas an example of a concern where the Canadian partner would lead is wheat.

Yet, elsewhere in the white paper, the wheat and grain policy is cited as an issue where the present federal system has allegedly discriminated against Quebec’s interests. If the white paper’s authors believe their own analysis, we must doubt that the Canadian partner would be permitted to have the major influence over wheat policy.

If the potential for conflict is so apparent in an area where the white paper already concedes predominance to one partner, the difficulties that could arise over truly contentious matters such as tariff policy or transportation priorities are obvious. In each case there would be no mechanism to settle any disagreement or to break any deadlock.

The white paper also tries to anticipate this objection with regard to the joint monetary authority. Each partner is represented on the authority in proportion to the relative size of its economy. This would mean the Canadian partner would have majority representation.

According to the white paper, this would pose no problem because the monetary policy interests of Canada and Quebec would not differ to any significant decree. Yet only a few months ago, in its blueprint for the Quebec economy entitled Batir le Quebec (Challenges for Quebec), the Quebec government was highly critical of current federal monetary policy because of its orientation towards the problems of inflation and the exchange rate. We question how the white paper’s proposed solution would resolve such differences.

If differences in policy exist now, surely we can expect that they will arise in the future. If so, how long will the Quebec partner be willing to play second fiddle on the monetary authority? If it demands equality, how will policy differences between the partners be settled?

The emotional atmosphere surrounding the political rupture of Canada would ensure that no Ontario government would be inclined to negotiate sovereignty-association. In any event, it would not be in our interests to do so, and the proposal, as it has been put forward before us, simply will not work. On this basis of workability alone, we might rest our case.

However, the white paper appeals to Quebeckers to make a critical decision, but in doing so, it does not put all the salient facts before them. It is unclear on far too many issues, it is one-sided on others, and it simply ignores still others.

The white paper claims that federal policy has regularly disregarded Quebec’s interests, citing as an example the auto pact. This claim simply ignores the fact that the auto industry was established in Ontario long before the auto pact. Moreover, its concentration in our province had little to do with government policy, federal or provincial. Rather, its presence here is explained by our geographical proximity to the focus of this industry in the United States. There is nothing about sovereignty-association that would change this reality.

The white paper implies that Quebec alone has been the champion of respect for provincial responsibilities within the federal system. One need only consider Ontario’s leadership with regard to deconditionalizing several of the major shared-cost programs, and with regard to disentangling federal and provincial responsibilities, to determine that Quebec has rarely, if ever, been alone in this regard. Readers would never know from the white paper about the increase in flexibility the provinces have now obtained, for example, as a result of the Established Programs Financing Act which came into effect in 1977

The white paper says nothing about how the fiscal transfers from the federal government to Quebec will be replaced. Transfers for this fiscal year to the Quebec government alone are projected to be $4.9 billion. Add to this the estimated $1.6 billion to be paid to Quebec workers by the Unemployment Insurance Commission and the $1.4 billion oil parity payments on behalf of Quebec consumers.

Federal funds for these purposes are obviously raised in Quebec as well as in other provinces but such pavements as a whole amount to a net transfer to Quebec of wealth created elsewhere in Canada. We share willingly now because it is our obligation as fellow citizens. We must ask if this obligation would be consistent with the existence of two politically separate countries.

The white paper contrives to picture federalism as an inflexible, uncompromising system of government. However, the distinct Canada and Quebec pension plans, the different approaches Quebec takes to family allowances, the opting-out provisions of the major shared-cost programs, and the federal-Quebec immigration agreement are all examples of how particular Quebec interests have been accommodated within the federal system.

The white paper proposes in one breath that sovereignty-association include broad mobility of goods, capital, labour and services, and in the next breath it speaks of introducing exemptions in such areas as agriculture, investment and categories of labour. If Quebec is to be allowed such exceptions, it must also expect that the Canadian partner will put forward its list of exceptions. We fear the association would soon be one in name only.

[2:15]

Finally, the white paper is highly selective in its use of statistics. For example, it states that Quebec has 0.9 miles of railways per 1,000 population against Ontario’s 1.2. The implication is that Quebec has somehow been discriminated against. However, it is easy to find statistics that prove exactly the opposite point.

Consider the fact that Quebec has 4.8 railway workers per 1,000 population, whereas Ontario has only 3.7. Or consider that in Montreal, both major railways maintain commuter services without federal or provincial assistance, whereas in Toronto, the Ontario government has been obliged to finance its own GO commuter bus and rail service. We do not believe it would be logical to conclude from these examples that Confederation has been a bad deal for Ontario, or for Quebec.

In sum, there is nothing compelling in the white paper itself or in the arguments put forward by its proponents that could lead to the conclusion that Ontario would enter into an economic association with a separate Quebec state. It would amount not to a new deal but a bad deal for all.

This government is convinced we can achieve within federalism new and fair arrangements. This is the only constructive course for Canada. This conviction is not new to the government of Ontario. In November 1977 the Premier spoke to the members of the Task Force on Canadian Unity here in Toronto. He reasserted to them his view that a wide range of constitutional change was necessary, that what the circumstances demanded was, in effect, a new constitution.

During the past few years, the government of Ontario has specifically supported constitutional change on the following matters:

1. Measures to eliminate barriers to the free flow of people, goods and services across the country so as to enhance the economic ties within Confederation;

2. A more precise definition of the essential powers needed by the federal government to run the national economy;

3. A clearer provincial responsibility in social and cultural matters, such as family law and cable communications;

4. The clarification of provincial ownership and legislative powers over natural resources;

5. A clear commitment to the enlargement of regional economic opportunities as a goal of Confederation and as a test of national policies;

6. Provisions that would allow for more flexibility in certain areas of jurisdiction so that some provinces, such as Quebec, could take on more responsibilities than the others if they so desired;

7. A provincial role in determining where the federal spending power could be exercised in areas directly affecting the provinces;

8. The entrenchment of the fundamental and democratic rights of Canadians;

9. The recognition of English and French as the two official languages of Canada, including the entrenchment of the right to minority language education in all provinces;

10. The reform of existing national institutions, such as the Senate, to allow for the fuller expression of regional or provincial interests;

11. Provincial participation in the appointment of judges to the Supreme Court of Canada, and

12. Patriation of the constitution and a relatively flexible formula for constitutional amendment.

I think this list clearly illustrates the breadth and scope of our commitment, and indicates without reservation that this province believes Canada’s constituent parts can be strengthened, while the country as a whole can be kept most effective on those matters of concern to us all.

I think it also needs to be said we are not alone in our commitment to change. Among the constitutional proposals being considered today, British Columbia, Saskatchewan, Nova Scotia, Newfoundland -- indeed, virtually all of the provinces -- have put forward their ideas for change to reflect more effectively what each regards as Canada’s current needs and interests.

Another significant contribution to the process of constitutional reform has been the report of the Task Force on Canadian Unity. It is inaccurate to state, as does the white paper, that the report has been shelved in the rest of the country. To the contrary, the main tenor of its recommendations is clearly representative of concerns expressed in many parts of Canada and is reflected in the inter- governmental discussions on the constitution.

We recognize fully the task force’s conclusion that any renewed federal arrangements must acknowledge both the regional and dual elements in this country’s makeup, and must ensure that we have a federal government that can speak for Canada on matters of national importance.

Furthermore, Quebec federalists are now in the process of preparing their proposals for constitutional change in Canada. We look forward to these proposals, as I know all members of the House do, as an important contribution to the debate and as a thoughtful basis for serious discussion.

Our real choice as Canadians, as Jean-Luc Pepin and John Robarts so aptly put it, is a future together. It is the choice of continuing to work together to share common future within a renewed Canadian federation.

We will not always agree; we will not always have our particular interests realized; we will not always get our own way. But we will continue to experience success and adversity together, sharing our advantages when we have them and being helped by our co-citizens when we are in need.

The challenge we face is working together within Confederation. This is the common purpose we all should now pursue.

Mr. Breithaupt: Point of order, Mr. Sneaker: with respect to the tabling of a compendium of background information, as rule 26(c) suggests should occur after the making of a statement, can the minister advise if such a compendium will be tabled? Also, can he say whether or not it will include any results of public opinion polls that have been commissioned with respect to the subject matters referred to in the statement?

Hon. Mr. Wells: Mr. Speaker, it was my understanding and belief that the compendium required for this statement was the Quebec white paper. That has been sent to all the members of this House. This statement was prepared without the use of any particular public opinion polls.

ALGOMA CHILDREN’S AID SOCIETY

Mr. Wildman: Mr. Speaker, I want to raise a point of personal privilege arising from comments made by the Minister of Community and Social Services about my position on the children’s aid society strike in Sault Ste. Marie and Algoma. This is a situation that has degenerated to the point where, according to the Sault Ste. Marie Star, the Ontario Humane Society has had to provide food for two neglected children because the CAS could not respond to their needs.

These comments by the minister were quoted in Friday’s edition of the Sault Star. In response to a question of a reporter about the position of the Canadian Union of Public Employees, Local 1880, that the minister’s advice to the Algoma CAS board to hire outside social workers constitutes strikebreaking, Mr. Norton stated I had taken the same position in this House. He tried to leave the impression I am opposed to his carrying out his mandate to protect the children at risk.

In fact, I have repeatedly stated in this House and elsewhere that the minister and the CAS were not fulfilling their respective mandates during this dispute, which has been prolonged by the use of outside workers. I’ve stated they should use the funds used for these outside workers to bring about a resolution of the dispute and to get the striking workers back to work, protecting children at risk rather than having their needs met by an agency like the humane society.

Hon. Mr. Norton: Mr. Speaker, I may be incorrect, and if I am, I apologize to the honourable member but my recollection is that the honourable member has, on occasion in this House, made reference to the role of my ministry in providing support assistance to ensure the children’s aid society in Algoma was able to minimize the risk to which children might be exposed during the period of this labour dispute.

My comment to the press was simply that if it was felt our actions were inappropriate, there was an alternative open to the honourable member. That was that he could take action to relieve me of my responsibility under the act by introducing a private member’s bill that would have that effect in terms of amending the legislation. That comment was made in response, as I recall it, to his raising a very serious concern about the role of the ministry in providing some assistance to this children’s aid society so they might meet their obligations.

With respect, specifically, to his reference to the involvement of the humane society, that was a story that was brought to my attention. It seems to me there were some very serious inaccuracies in the specific case to which the newspaper article referred and the one in which the Canadian Union of Public Employees’ administrator from that area communicated to me on Friday, I believe, by telegram.

It is my information that during the time the report was made to the children’s aid society, on two occasions within one week children’s aid society workers visited those children in that family and on neither occasion did they find the children to be in need, abandoned or without food. I believe it was subsequent to those two visits then that the principal of one of the schools in the area -- I don’t know whether he had feedback indicating those two visits had taken place -- but apparently a call was placed to the humane society asking it to check to see whether the pets were being adequately fed. That then gave rise to the visits from the humane society.

But there was not a lack of response from the children’s aid society. In fact, I am told there were two visits within less than a week following the report.

SUPERMARKET PRICING AND CHECKOUT SYSTEMS

Mr. Swart: On a point of privilege, Mr. Speaker: It concerns comments made by the Minister of Consumer and Commercial Relations last Friday. I realize he is not in his seat today but I believe it is incumbent upon me to bring it before the House at the first opportunity.

During the question period last Friday, the Minister of Consumer and Commercial Relations (Mr. Drea) said, in referring to Loblaws instituting universal product codes, that if it were not for his sharing his information with this party in the estimates of his ministry we would never have found out about it. Then he quoted me as saying to him in the justice committee, where his estimates were dealt with, and I quote from last Friday’s Instant Hansard: “I thank you very much. I would never have known about it.”

Knowing I did not make such a statement, I have examined the justice committee Hansard for the whole period during his estimates. It contains no such remarks by me whatsoever. In view of this and the many previous misstatements made by this minister, I ask the Speaker to direct the minister to withdraw his statement last Friday falsely attributing those comments to me.

Mr. Speaker: I’m sure the honourable minister will be made aware of the member’s alleged point of privilege.

An hon. member: Alleged?

Mr. Speaker: I haven’t heard the other side of the story.

VISITORS

Mr. Speaker: I would like to draw to the attention of honourable members, the presence of two distinguished guests in our gallery. We have the Honourable Howard Pawley, Leader of the Opposition in Manitoba. I don’t know whether they’re talking to one another, but under the Speaker’s gallery is the Very Reverend Donald M. Malinowski who is the member of the Legislative Assembly for Point Douglas in Manitoba.

ORAL QUESTIONS

HYDRO RATES

Mr. S. Smith: I have a question of the Minister of Energy. The minister has undoubtedly by now reviewed the Ontario Energy Board report on Ontario Hydro’s bulk power rates for 1980. Since the board’s function in these matters is advisory rather than regulatory, can the minister tell us whether he has approved these rate increases, which will amount to some 16.4 per cent on January 1?

Hon. Mr. Welch: As the Leader of the Opposition knows, it’s not a question as to whether the Minister of Energy approves. The procedures were followed with respect to this whole operation. Ontario Hydro has proceeded accordingly and has accepted the recommendations and the advice of the Ontario Energy Board with respect to some modifications.

[2:30]

Mr. S. Smith: Supplementary, Mr. Speaker: Since it would appear the minister feels powerless to influence the course of these rates and is quite prepared to accept what the energy board does -- although one of his predecessors, the now president of Union Gas, didn’t take matters quite so lightly in his term -- I would ask specifically whether the minister is prepared to accept the suggestion repeatedly made by the member for Grey-Bruce (Mr. Sargent) of a life-line concept, whereby the people buying a certain basic, fundamental amount of electrical energy for a residence can receive that at the cheapest rate, rather than the way it is now where the first most-fundamental amount is charged at the most expensive rate and the more you use the less you pay per unit.

Is the minister prepared, at the very least, to do that, so the people who need just the fundamental amount of energy this winter will be able to get the cheaper rate and not have to pay at the most expensive rate?

Hon. Mr. Welch: Mr. Speaker, as I get to the question I was actually asked, I didn’t particularly appreciate the comments that were made prior to putting the supplementary question. It would come as no surprise to the Leader of the Opposition to learn the present minister feels the law is to be followed and the system, which of course was introduced by this government as a very important feature for the determination of rates by Hydro, provides for a full review of those particular rates.

Second, the Leader of the Opposition also knows we are awaiting a very complete study on the whole question of the costing of electricity. Once I, as the minister, have that particular study and the recommendations contained therein, I will perhaps be in a much better position to comment on it, along with the suggestions to which the Leader of the Opposition has made reference.

Mr. MacDonald: Mr. Speaker, since part of the report of the Ontario Energy Board is an acceptance of the proposals of Ontario Hydro that henceforth the profits from export sales will not be used to cushion the impact to the consumer, has the government accepted that? Or will the government reconsider it so the Ontario consumers, who have to carry the burden of an excessively large system, will at least have the cushion of the export from that excessive generation capacity?

Hon. Mr. Welch: Mr. Speaker, the government hasn’t accepted that particular recommendation as yet, as the honourable member has indicated.

Certainly the whole question of Hydro rates will be the subject matter of fairly intensive review once we have the reports to which I have made reference, and indeed, we have the benefit of the advice and the recommendations that are contained in the report of the Ontario Energy Board.

Mr. Nixon: Mr. Speaker, surely the minister recalls, does he not, that the rates were rolled back at the behest of a select committee’s recommendation made to the Minister of Energy, which is the area referred to by my colleague, the leader of the party. Would he not agree this five to six per cent of the increase is as a result of the end of the Anti-Inflation Board mandate, and that since the Anti-Inflation Board directives have returned $250 million in reduced rates to the consumers it would be reasonable and sensible for him as Minister of Energy to approve only an increase equivalent to the cost of living increase during this last year?

Hon. Mr. Welch: Mr. Speaker, the honourable member knows it doesn’t lie with the Minister of Energy to make such a decision. The procedures are quite public; Ontario Hydro presents its case, it makes all the evidence available and it is referred to the Ontario Energy Board. Hearings are held and, indeed, as a result, recommendations are made to which Hydro responds. The honourable member knows it was Hydro that accepted the recommendation of the select committee.

Mr. MacDonald: Mr. Speaker, the minister indicates the government hasn’t come to a conclusion with regard to this aspect of the report on use of the profits for export sale. Will he be making a decision on that within the next few weeks so it can apply for the next calendar year and, it is hoped, cushion the increase to the consumers?

Hon Mr. Welch: I don’t see that as coming as any particular relief as far as the upcoming calendar year is concerned. I indicated to the honourable member that obviously would be taken into account when we review the whole question of the cost of electricity, which, as he knows, is the subject matter of a fairly intensive study.

Mr. Speaker: Final supplementary.

Mr. S. Smith: Given that the government of Ontario feels it can’t do much about the higher oil prices its Tory friends in Ottawa are landing on us; given that it thinks it can’t do anything or doesn’t want to do anything about the higher interest rates we are getting from its friends in Ottawa, and given that this is something that is within provincial jurisdiction, why does the minister once again plead impotence on this matter -- although he does it very convincingly, I may say -- when he knows full well it is within the power of the cabinet in Ontario to make it clear to Ontario Hydro to roll back such an increase if it so desires?

Hon. Mr. Welch: Mr. Speaker, I would think the Leader of the Opposition would share in the pride which is ours in this province to have electrical power provided at cost to the consumers of the province.

Hon. Mr. Davis: Lowest anywhere in North America, with the exception of Quebec.

Hon. Mr. Welch: If after all these reviews we have established the cost of providing that -- and indeed as the leader of this government points out, at the lowest cost of any jurisdiction in North America, with the exception of the province of Quebec -- then surely to goodness if there is to be any change in that policy it has to be paid in some way, and obviously the Leader of the Opposition is advocating that we take money from the consolidated revenue fund to subsidize these rates.

Interjections.

Mr. S. Smith: Mr. Speaker, it is not every day one is given advice on borrowing oneself into bankruptcy from the world’s expert on that matter.

Mr. Speaker: Is that your supplementary? Would the Premier agree?

INTERMEDIATE CAPACITY TRANSIT SYSTEM

Mr. S. Smith: I will ask a question of the Premier in the absence of the Minister of Transportation and Communications (Mr. Snow). The Premier may be aware that earlier this month the minister was quoted in the Globe and Mail as saying that more public dollars will have to he invested in the Urban Transportation Development Corporation’s intermediate capacity system in order to prevent this experiment from becoming something of a white elephant.

I want to ask first of all whether the province intends to invest any more taxpayers’ dollars into the ICTS project in Kingston; and if so, how much does the province intend to so invest?

Hon. Mr. Davis: Mr. Speaker, I was just checking monthly residential electrical bills. Toronto is the lowest on the list, with the exception of --

Mr. Speaker: That wasn’t the question.

Ms. Gigantes: What about your rural rates?

Hon. Mr. Davis: I will give them to you compared to any rural customers anywhere.

Mr. Speaker: Order. The question dealt with transportation.

Hon. Mr. Davis: I was really trying to get around to the transportation cost of kilowatts in the rural areas, which compares favourably with any other rural jurisdiction. But I won’t do that, Mr. Speaker.

As regards the question on the UTDC, Mr. Speaker, I think the Minister of Transportation and Communications was asked this question a few days ago.

Mr. S. Smith: No, he wasn’t.

Hon. Mr. Davis: With great respect, he was asked a question similar to it. He was asked about an article that appeared in the Toronto Star. I think that is the article you are referring to.

Mr. S. Smith: That is totally different.

Hon. Mr. Davis: Well, all right, so it is totally different. I sense a similarity because I was here when the question was asked. If the Leader of the Opposition says it was totally different, I will accept his view that it is totally different. Now I may proceed to answer the question on the assumption that I think there is a great similarity.

The Minister of Transportation and Communications indicated that the UTDC experiment in Kingston had been singularly successful. My recollection is there was an interjection from the member, one behind the Leader of the Opposition, when the Minister of Transportation and Communications reminded him just how effusive he was in his compliments to UTDC when he was visiting Kingston. That is my recollection of the discussion.

The minister pointed out that there were two proposals before the government of Canada: the possibility of having one prototype system in the city of Hamilton and one in the city of Toronto. The minister stated in his answer, which was contained in an interview that I know of -- perhaps it was a different one -- where he indicated that this participation was necessary for the next phase of the UTDC experimentation.

We have not yet heard from the government of Canada as to whether or not they will participate in either one or both of those particular prototype suggestions. Our hope is that they will, at which time we will be in a position to inform the members of the House just what the financial obligations will be.

It is the expectation that this possible service in Hamilton and/or perhaps in the city of Toronto, would be the kind of experiment that would make it possible for people from other jurisdictions to view this in an operating situation. I would also report to the members of the House, dealing with the Urban Transportation Development Corporation, that the minister raised this with the Japanese officials. They are quite interested and some extensive discussions are going on at this moment between them and UTDC regarding the licensing arrangements in Japan.

Mr. S. Smith: By way of supplementary, I take it then that more provincial dollars will be put into this. I ask the Premier, is he aware of the fact that when the program was announced in April 1975, it was clearly stated that the last two phases, which are the ones he’s talking about now, “are expected to be undertaken by the private sector,” and that’s a quote from the introductory document at the time? Now the Premier says we are dependent upon federal money if this is to carry on.

The federal government was never asked to make any commitment when this was started, when this was undertaken, when $61 million were invested. Why doesn’t the Premier admit right now that he’s looking to be bailed out by the federal government, in this instance, in order to make this $61 million waste of money possibly pay off, and to take it off his hands because it is a notorious failure?

Hon. Mr. Davis: Mr. Speaker, the Leader of the Opposition always likes to look at the negative side of just about everything in life. I don’t expect him to be any different on this particular issue although I find it totally inconsistent with his speeches about research and development, more Canadian participation and all of the rest of it. His point of view on this is just totally contrary to those things he says on other occasions, as is the case on so many issues.

I would make it quite clear that the initial documents indicated the manufacturing part of this facility will be done by the private sector, and this will still be the case if it does proceed. We do not intend to get into the fabrication of vehicles. We do not intend to get into the manufacturing of the command and control systems or the linear induction motors.

I think it is also fair to state, and I hope even the Leader of the Opposition would understand this, that if there is to be a customer for this, which is an experimental or a prototype situation in this province, the customer is bound to be some level of government. So, if it proceeds, the purchaser obviously is going to be partially the city of Hamilton, partially Metropolitan Toronto, and we anticipate, if it does go ahead, the government of Canada will see its way clear to participate in it.

The manufacturing will be done by the private sector, but quite obviously, the public sector has to be involved because it is the public sector that will be the purchaser.

Mr. Cunningham: I would like to ask the Premier if he is in a position to report to the House about the prospective customers, say, in North America alone, to which the UTDC might sell their wares. Are we successful at this point in any contracts? What is going on? Is there any status report? Are we selling anything?

Hon. Mr. Davis: Mr. Speaker, I think it would be more appropriate for the Minister of Transportation and Communications to answer that question. I will give my own guess. There have been representatives from a number of communities who have been to the Kingston site, to look at the hardware, to look at how the system functions.

I think it is fair to state there is some genuine interest. I think it is important to realize and this is why the ministry is involved in discussions with the government of Canada, that a lot of potential purchasers are looking to see an operating system functioning. This is why the next phase is to be some development, probably in Hamilton, perhaps even in Metropolitan Toronto, where the system can be installed and operated and, in this way, to demonstrate its potential to possible purchasers.

I happen to know there is a great deal of interest, not only in the United States, but elsewhere. My guess is, if there is an interest in Japan it will not be in the export of hardware.

Quite obviously, it would be done by way of a licensing agreement and the fabrication of the vehicles would be done, as is the case in so many other situations, in the jurisdiction where the system is being purchased. But even if it is only the export of the technology or by way of licensing, this, in turn, will repay certain dividends to the people of this province. I would think, as is not now the attitude of the members opposite, they really should be somewhat excited and interested in the potential of this experiment.

Mr. Philip: Supplementary: Can the Premier tell us who, specifically, in any elected office in Metropolitan Toronto has actually shown an interest in this system? Or is Metropolitan Toronto going to be persuaded, for the interests of the government, to go along with the system or to buy a system in which all elected representatives I have talked to have said they are not interested?

[2:45]

Hon. Mr. Davis: I don’t think there has been any formal discussion. There have been informal discussions I know with some members of the TTC. They are aware of it. They know the possible location of this, but we are not moving ahead with it until we get some answer from Ottawa as to whether they will share in this or not. The community that has expressed an interest and a fairly committed interest -- in fact, it has gone a fair piece down the road -- is the city of Hamilton.

If the government of Canada says it can only fund one, since the city of Hamilton is there and wants it done, then that is probably the place where it will happen. I would just hope some consideration would be given to having it done in both places, but it may be Hamilton and not Metropolitan Toronto.

PQ WHITE PAPER

Mr. Cassidy: I have a question for the Minister of Intergovernmental Affairs arising out of his statement today on the question of sovereignty-association. I would welcome the fact that the minister took a rather softer tone than the Premier’s because he is undoubtedly aware of the very negative reaction in Quebec to the original statement three weeks ago.

Could the minister say what new proposals the government intends to make that may be attractive to Quebeckers in the current constitutional debate and thereby aid the chance they will vote for federalism in the referendum when it comes up in the new year?

Hon. Mr. Wells: I think this statement outlines about 12 of the positions we have taken. Some of them have nearly reached fruition in the continuing committee of ministers; others are still in the discussion stages. The itemizing of them here is meant to show to the people of Quebec we do believe in a renewed federalism and that there are within these 12 items, and certainly others we are willing to look at, the opportunity to renew the constitution.

They are spelled out here. As I say here, the next step is probably to find out what position is put forward by the committee that will be opposing a “yes” vote in the referendum. They will be putting out a statement soon. When we see what they are putting forward, we will then be able to offer some comments on those particular positions and see how they mesh with the particular position we have put here.

I should say there is no inconsistency between my statement and the statement issued by the Premier. I think the Premier in his statement indicated his initial response was to set out very clearly no negotiation of sovereignty-association and some of the dire effects of it. I think it was universally hailed across this province as a strong statement, expressing the wishes of, I would say, about 90 per cent of the people of Ontario including all parties in this House which I heard applaud it very strongly. I think that is a very significant thing.

This statement today is a follow-up in more specific terms of what we really meant. I want to stress to my friend there is no inconsistency between these two statements at all.

Mr. Cassidy: Since members of this party want to make it very clear we don’t believe either that the people of this province would ever agree to sovereignty-association as a new basis for the country, but since we also feel it’s important to talk in a civilized and positive tone with the people of Quebec, could the minister say whether the government intends to make some new proposals with relation to recognizing the linguistic and cultural community in Quebec? Would he not agree that Ontario should be making positive proposals in that particular direction, rather than simply waiting to react to the statements, first, by the Parti Quebecois and then, subsequently, by the “no” committee in a few weeks’ time?

Hon. Mr. Wells: Without getting into a long discussion on all the proposals, let me just give the member one example. We have made positive proposals. Well over a year and a half ago or perhaps even two years ago, the Premier indicated this province was in favour of a constitutional amendment to guarantee minority language rights in education. We have again emphasized that in this paper. We have stressed it at various meetings. To this date, that proposal has been, I think on all occasions, opposed by the present government of Quebec. It has been opposed, as they opposed entrenchment as proposed by the federal government in Bill C-60, as I recall. As one example, we have very consistently and positively put forward that as something that should be in a new constitution, something which we think would benefit the people of Quebec, Ontario and all of Canada.

Mr. Sweeney: Supplementary: Is it any wonder that the province of Quebec reacted the way they did, with respect to the protection of language rights, when they see what you have done in places like Penetang?

Hon. Mr. Wells: That really is a very unfair question because I want to tell the honourable member that the ministers of education -- the council of ministers -- as part of the minority language education debate, were asked to do a survey across Canada of minority language education in all the provinces. That survey was done and presented to all the first ministers.

That report showed that in Ontario practically everyone who declared French as his mother tongue and wanted French-language education, was getting it, so much so that I recall -- and I hope I am not breaking a confidence -- the Premier of Quebec looked at it and said, “I didn’t realize this was happening in Ontario.”

We said, “We told you this, and we have told you this many times, and we have told the people of Quebec.”

“Well,” he said, “we didn’t really believe it.”

The fact is that as far as Penetang and other places are concerned, this province guarantees one’s schooling in French if it is a minority language, is one’s mother tongue, and there are 20 or more pupils in secondary school. The law in this province guarantees one will get that education.

Mr. Sweeney: In an English-language school.

Hon. Mr. Wells: It guarantees one will get that education. I suggest that we all recognize the concern and certainly I recognize very deeply the concern that some have for an individual building. At some times, such as in Essex, there is a need for the building; in others the need is for a viable French-language school entity. That is what the possibilities are.

Mr. Samis: Supplementary: Could the minister tell us what communication, if any, his office has had with the Leader of the Opposition in Quebec in the formulation of his position? Second, can we expect a public statement once that position is announced?

Hon. Mr. Wells: We have regular ongoing discussions with staff who are working to develop the positions of the umbrella group, the “vote no” group, in Quebec. As soon as their paper is presented we will be able to assess it, and then we will be able to comment on it.

It is very difficult to comment on something when you don’t know what the details of it will be, but I must say they have shown great interest in both reports of the Ontario advisory committee; they found those reports were very helpful. I think the publication of what comes out of Quebec is going to be very helpful, but we must wait for it and then we will comment on it.

Mr. Cassidy: Final supplementary: Since the government is keeping itself in contact with the work done by the committees on both sides in Quebec, and since some members over here are doing the same thing as well, would the government not now commit itself to agree to the proposals that have come from the member for Lakeshore (Mr. Lawlor) and the member for Riverdale (Mr. Renwick)? Would the government agree that before Christmas this House will establish a small select committee which will inquire publicly into the questions around the future of the country, and the constitutional proposals now on the table, so that we can bring the public into our confidence in this discussion in Ontario?

Hon. Mr. Wells: I think we debated this during private members’ hour at one point, and I think the pros and cons have been put forward on this. I think we have to have a debate in this House, but it seemed to be the agreement that, because the referendum is now going to be held in June, the time for that debate will probably be early in the new session.

I want to reiterate that the facilities that were available before to all of us are still available. Certainly the staff of my ministry and any of the advisory committee, or anyone else, is available to help any caucus group which wishes to study and have available any of the papers that are available on the constitution, the Quebec white paper, or the referendum. Everything is available, and they will be glad to help the honourable members in carrying out their own studies over the next couple of months.

NIAGARA ESCARPMENT DEVELOPMENT

Mr. Cassidy: Mr. Speaker, I have a question for the Premier. In view of the commitment which was reiterated by the Provincial Secretary for Resources Development (Mr. Brunelle) last week that the Niagara Escarpment is a unique area and that we should have no fear, the area will be preserved, can the Premier explain why no money has been spent by the government this year to acquire land in the escarpment area? Could he say how the escarpment commission can continue to refuse development permits if it has no funds to acquire lands which are of high priority?

Hon. Mr. Davis: My memory, once again, is subject to correction, but I think a question similar to that was asked last Thursday or Friday. I think the Provincial Secretary for Resources Development gave -- if not the honourable member, some member of his caucus -- an answer to that particular question. If the member will review Hansard he will find it there.

However, I will ask the Minister of Natural Resources (Mr. Auld) to give the members of the House a bit of an update on the numbers of acres acquired, et cetera. I think it should also be pointed out to the leader of the New Democratic Party that to a certain extent purchases relate to the commission’s final report. That report is now final, except that it is subject to the hearings going on.

I can only repeat what the Provincial Secretary for Resources Development said; we intend to move ahead with certain property acquisitions. I think it is also fair to state that we have various priorities in front of us when we have to find moneys to allocate for the new hospital the Minister of Health (Mr. Timbrell) is announcing in Mississauga and the potential of an addition to the Peel Memorial Hospital in Brampton -- all of those other things that the honourable member likes to talk about, depending on just which subject interests him on a particular day. Our task over here is to sort out the priorities and I think it’s fair to state that we cannot afford to do all of these things at the same time.

I’m delighted to see the leader of the New Democratic Party has broadened his vision, even modestly, from the provision of medical services to the acquisition of land in the escarpment commission area.

Mr. Cassidy: Supplementary: Since the Niagara Escarpment Commission states in its plan proposals that action is needed on priority areas in Tobermory by the time that the official plan or review process or the hearings have been completed; and since there’s now an application by Angus Ralph pending before the escarpment commission to start building a marina in the south end of Russel Island near Tobermory -- in the number one priority area for acquisition as laid out by the escarpment commission -- will the Premier undertake that the funds be provided for that acquisition this year rather than putting the commission into a position where it has no choice but to agree to that development?

Hon. Mr. Davis: With great respect, Mr. Speaker, the commission does have a choice. The leader of the New Democratic Party may not understand that, but the commission does have a choice. I think what the commission is saying is that they feel it is unfair -- and I happen to agree with this -- to say to the owner of a parcel of land that could be used for the public domain that we can’t buy it yet, but we won’t issue a permit. This is where it is always very difficult to reconcile the public interest with the private interest.

I would say, once again, to the leader of the New Democratic Party that we do not have sufficient capital moneys to do all of the things that are essential. I cannot give a commitment there will be moneys for this particular acquisition, except to say, as the Provincial Secretary for Resources Development said to him on either Thursday or Friday in answer to a similar question, “There will be capital funds in 1980-81.” Exactly where they will be spent in the commission area, I can’t tell the honourable member.

I want to reiterate, though, to that very distinguished member, that I’m delighted to hear him talk about land acquisition. We intend to build a few hospitals. When we allocate money for hospitals I don’t want him coming back here saying we should have spent it in the Niagara Escarpment Commission area.

Mr. Cassidy: Final supplementary: Bearing in mind that only $12,000 was spent on land acquisition in the escarpment last year and that not a nickel has been spent this year; and bearing in mind that at that rate it would take about 35,000 years for the commission to acquire the land that has been recommended in this plan; would the Premier not agree that the lack of funds for the commission threatens the escarpment plan, either because priority areas will be lost to development, or because public support of the plan will be irretrievably undermined because of the impact on land owners who can neither develop their land nor sell priority-area land to the commission?

[3:00]

Hon. Mr. Davis: Once again, I am delighted today: the leader of the New Democratic Party actually recognizes there are certain individual rights in land. I find that a refreshing change.

I am informed there is actually in this year’s budget $1 million allocated for purchases within the escarpment area. My guess is some of that will be spent before the end of the fiscal year. I can assure the leader of the New Democratic Party we will not be waiting the number of years he suggests. He won’t be around to make that determination and neither shall I.

I would just reiterate, when his party keeps pressing us for the expenditure of public funds for land acquisition in the Niagara Escarpment initiated by this government we will do a fair amount. But we cannot do that and all of the other things those members mention to us seven days a week. I just hope the next time they are talking to a health group they will remind them they have been pressing us to spend money on land in the escarpment area at the same time as they are trying to tell them they are not getting enough for their hospitals.

Mr. Cassidy: A point of privilege, Mr. Speaker.

Mr. Speaker: Which one of your privileges is being abrogated?

Mr. Cassidy: My privilege to have correct information from the government, Mr. Speaker. Only $36,000 was allocated for land acquisition in the estimates for the Ministry of Natural Resources this year.

GROUP HOME FUNDING

Mr. G. I. Miller: I have a question for the Minister of Community and Social Services in regard to the Haldimand Association for the Mentally Retarded, which is trying to provide a group home in the town of Dunnville for mentally retarded adults.

In view of the fact the association has a piece of property that is properly zoned and was approved by the Ontario Municipal Board in July 1979, and in view of the fact that the ministry indicated funding would be available in 1978, will the minister now give consideration to providing funding to that group home in Haldimand?

Hon. Mr. Norton: I think it would be more correct to say the society has two properties, both of which are properly zoned, on one of which there is presently a residence which would, I believe, be zoned for occupancy by up to five adults. On the other there is no structure at the present time, but it is zoned such that it could be, if transferred into the association’s ownership, a site for building a group home.

I have indicated to the members of that association and also, I believe, to the municipal representatives with whom I met a couple of weeks ago, together with the honourable member, that I would welcome a proposal from the association for the mentally retarded with respect to the second piece of property. If they wish to make such a proposal, the procedure for doing that involves going to the district working group. I have indicated to them there would not be money in our budget this year, but if they were to proceed immediately through the district working group we would be able to consider their application in establishing the priorities for next year’s expenditures.

In the meantime, I recognize they do have a property which is appropriately zoned now for five adults and there is nothing I could do to change their intention one way or the other with respect to whether they would proceed with that. I understand they have no legal restrictions upon their proceeding with that one immediately.

Mr. G. I. Miller: Supplementary: I wonder if the minister is aware that plans are going ahead for the home despite objections from the town of Dunnville and the region? I think the community would work more close together if funding was made available. Does the minister not agree?

Hon. Mr. Norton: Mr. Speaker, I am not sure what the question was.

CORRECTIONAL SERVICES DISPUTE

Mr. Mackenzie: I have a question for the Chairman, Management Board of Cabinet.

In view of the fact that employees of the Ministry of Correctional Services have been requesting a separate bargaining unit category for at least five years, a request backed by Judge Shapiro in the Royal Commission on the Toronto Jail and Custodial Services, can the minister consider a very positive and much appreciated move to improve the labour relations climate by permitting the establishment of a separate bargaining category for these employees?

Hon. Mr. McCague: Mr. Speaker, we have had representation from the union over the years to have a separate category for correctional officers. This has been resisted. The main reason we have resisted it is that over that period of time we have had other requests to set up categories for what might have been smaller groups. We feel there would be a proliferation of the bargaining system if we set up a group for everyone who asked for it.

Judge Shapiro, in his remarks to the royal commission on the Toronto jail, did mention this subject. He did say in his report they should be granted a separate category, if that’s what is necessary to set up a different pay scale for them. We don’t feel it’s necessary to have a separate group in order to have a separate pay scale. In fact, in some small way we have recognized that in previous settlements.

Mr. Mackenzie: Supplementary, Mr. Speaker: given the total agreement with the workers involved, the lack of any real affinity between the hospital workers and the correctional workers in that unit and the fact that a separation does exist in many other jurisdictions, does the minister not understand the depth of feeling of those involved and the merit of the request to defuse a touchy situation? If he does understand that -- and I think the minister may -- is this ministry and this government deliberately inviting a strike by these public service workers?

Hon. Mr. McCague: The honourable member knows full well we’re not inviting any illegal strike whatsoever. I think I’ve given him the reasons. There are many groups within the civil service which could ask for special recognition for a special group. We did agree to eight categories some three years ago. It has worked well.

The main thrust seems to be that there is not parity with either Ontario Provincial Police officers or federal corrections people. We recognize that. We are prepared to consider that in our negotiations this year. We feel the major request for the union can be addressed in the negotiations.

Mr. Bradley: Mr. Speaker, within the bargaining unit there are some 9,000 individuals and when they go to the bargaining table, or even before they go to the bargaining table, they feel their views are submerged in the total process. Considering the fact this involves about 3,000 people, not 400 or 500, would the minister not consider it would be wise to change the decision of the cabinet? I detected in the Minister of Correctional Services (Mr. Walker) a little softening of attitude in this regarding an earlier question. I was wondering whether his counsel would be heeded in this regard and if he would change that circumstance and avoid what is going to be a pretty catastrophic situation in the province if they do decide to go on strike.

Hon. Mr. McCague: Mr. Speaker, I think the honourable member fails to realize there are a lot of other groups with large segments to them. One in particular, for instance, would be the nurses who are in a category of 4,000 and they make up half the category. We have all kinds of those groups within the civil service. We’re trying to stick to the eight categories. That doesn’t stop us from recognizing special interests within that group.

JUNIOR HOCKEY COMMITMENT

Hon. Mr. Baetz: Mr. Speaker, last Friday the Leader of the Opposition raised questions about Canada’s representation in the forthcoming world junior ice hockey championships in Finland.

The commitment to participate in those championships is made by the national body f r hockey, the Canadian Amateur Hockey Association. A request for funding was submitted by that organization to the federal government agency responsible for sport -- namely, Sport Canada. Sport Canada declined to provide the funding.

As many honourable members know, there is a division of jurisdiction between the government of Canada and provincial governments on the matter of supporting participation in international sport. Simply stated, Mr. Speaker, the government of Canada and national sports organizations have exclusive responsibility for Canadian representation in world championship events, regardless of the province of origin of the participants.

Canada’s representative in the forthcoming junior world championship is the Peterborough Petes Hockey Club. The Petes roster will be supplemented by eight additional players from other Ontario teams. In Finland, however, the Petes will play as a Canadian team, not as an Ontario team nor as a Peterborough team.

Some people, no doubt, will argue that since Loto Canada has been transferred to the provinces Ontario has both the obligation and the dollars to pay for international representation in sport. No such proposals for such a realignment have been made nor, as far as I know, is one being contemplated.

Let me point out, however, that the federal-provincial agreement on Loto Canada calls for the return of $24 million a year to the federal government, half of which I understand, will go to sports.

I’ve been advised the Peterborough hockey organization is highly committed to attending these championships. Therefore, the possibility of Canada being relegated to the second division in international junior hockey for failing to field a team is not present.

Many honourable members will be aware that the matter of whether Hockey Canada or the Canadian Amateur Hockey Association represents Canadian interests in international hockey is not at all clear. The controversy over the funding for these championships is probably more a product of the conflicts and the squabbling among these two organizations and the federal government than it is a matter of the availability of funds.

The commitment to participate in this tournament was made by the CAHA, the national body responsible for hockey. Funding for world championships is, as I have indicated, traditionally a function of the government of Canada and national sports organizations. Given those two facts, I do not believe an intercession by the provincial government at this time would serve any useful purpose.

Mr. S. Smith: By way of supplementary: In view of the fact the morning news seemed to imply the matter was being settled -- and, perhaps, as we stand here now it has been settled, I don’t know -- could the minister, at the very least, get hold of his federal counterpart and make darned certain that in one way or another that group of Ontario boys gets over to Finland to represent this country and not make Canada the laughing-stock of international hockey dealings? Whoever may be at fault in the matter, let the government offer them money if it has to but in one way or another would the minister please get together with his kissing cousins in Ottawa and make sure we get a team there?

Hon. Mr. Baetz: I’d hate to think of Mr. Paproski as a kissing cousin. I would like to assure the Leader of the Opposition however, that I did have a long talk with Mr. Paproski on Saturday. I’ve been in touch with some people in Peterborough and in all likelihood the matter will be resolved and Canada will be represented by the team from Peterborough, augmented by others, and I do hope we’ll win the championship.

Mr. Hennessy: Mr. Speaker, I rise in support of the Peterborough Petes. I think Ontario should have representation. I’ve been in hockey quite a few years myself.

Mr. Speaker: Would any other member like to give his support?

DREE AGREEMENT

Mr. Eakins: My question is of the Treasurer, Mr. Speaker. Some weeks ago he mentioned an agreement was imminent within a few days between the federal and provincial governments in regard to DREE funding. Could he bring us up to date as to whether that agreement is near completion? Will he soon have some information for the people in the Muskoka, Victoria-Haliburton and Peterborough areas?

Hon. F. S. Miller: Mr. Speaker, I made a point during the first ministers’ meeting in Ottawa to see the minister responsible for DREE, the Honourable Elmer MacKay, to follow up the very points the member is discussing. He assures me it is going through the process of approval and I will have the document approved to sign in the substance originally agreed to. However, that does not, so far, include the member’s riding or mine.

A recent letter from him implied that did not prevent a second or northern agreement including those areas. He simply said the eastern Ontario agreement would not.

[3:15]

Mr. Eakins: Supplementary: In view of the fact that agreements have recently been signed with British Columbia and Alberta for $50 million and Manitoba and Quebec why is it so difficult for Ontario to get an agreement with the federal people? Does the minister not have the power and the clout with them that he thought he had?

Hon. F. S. Miller: Mr. Speaker, I am satisfied that progress has been made through the bureaucratic hurdles the present government has inherited from the previous one.

FRENCH-LANGUAGE EDUCATION

Mr. Samis: Since the Penetang question is no longer merely a regional or provincial question, but a symbolic issue; and since Premier Levesque has used the Penetang situation to attack the Premier’s position in the original white paper, doesn’t the Premier think it would be an act of goodwill, a demonstration of Ontario’s interest in preserving national unity and a positive contribution to the upcoming referendum if his government were to resolve the matter once and for all by granting the Franco-Ontarians the type of school they are asking for, the type of school they deserve, realizing it is more than a question of just bricks and mortar?

Hon. Mr. Davis: Mr. Speaker, I am not sure to what extent Mr. Levesque has used that particular situation --

Mr. Samis: In the National Assembly.

Hon. Mr. Davis: Listen, I stayed so the honourable member could ask the question. He very politely sent me a note. I am staying to answer it, so would the honourable member please let me answer without interruption The member put in a fair amount of editorial comment. He didn’t ask a straight question. I think I am permitted to give a little editorial comment in reply. Is that not fair? Just so we play by the same ground rules.

Mr. Speaker: Get back to the question.

Hon. Mr. Davis: I think it is fair to state, going back historically, that the position of the government of Quebec has been they really have no concern and they don’t think it is appropriate for them to comment on what policies exist in the field of education outside Quebec. If Mr. Levesque at this moment is trying to exploit the Penetanguishene situation, then it is totally inconsistent with the point of view his government has taken on the question of educational language rights to date in this discussion.

I raised it with him, with respect to the policy in Quebec. As the Minister of Intergovernmental Affairs (Mr. Wells) stated -- and he was quite right and he was not betraying any confidences -- I was at the same meeting where the Premier of Quebec was surprised when he discovered that of the 5.6 per cent of the youngsters in this province who declare French as their mother tongue, 5.4 per cent are getting their education in the French language.

When one looks at Penetang, Mr. Speaker, you have to recognize there is another issue as well; that is the position of the Simcoe county board; the feelings of the people in Penetanguishene. A large number of the francophones in Penetanguishene did not want to have a separate school entity, separate and apart from the existing facility. I think it is important for the Premier of Quebec, if he understands what the debate is about, that he understands we are not debating the provision of French-language education.

We are faced with a situation where we have a relatively new school plant. I was there on one occasion to assist in its opening. We have a declining enrolment. The number of youngsters in Penetanguishene -- a tiny township which happened to funnel their youngsters into the Penetang high school -- is diminishing. We have a situation where within four to five years, if there was a new separate individual school, there would be perhaps a 50 to 60 per cent attendance and there would be citizens in that community saying, “What are you doing with the other 50 per cent of a relatively new high school facility?”

There would be the problem of the combination of courses that are available. The proposal from the ministry is that they can have a principal whose language obviously would be French and a totally French-language program in the same physical plant.

When one gets right down to it, Mr. Speaker -- and this is something perhaps the member for Cornwall doesn’t understand -- one is talking about the ambience, one is talking about the milieu, if that is the terminology, one is also talking in terms of that community of probably a 40- to 50-minute period in the school day, which would be the lunch period when the youngsters wouldn’t be part of that French-language milieu.

I’ve got news for the member. I know that community fairly well. They will go to the same pop stands after school and to the same social areas where young people congregate. There is less than unanimity on the matter. It is quite different from some other communities. A very substantial number of the francophones in Penetanguishene did not see the need for, nor do they support a separate school facility.

The combination makes sense. I think it would be unwise of the Premier of Quebec, to comment without understanding the realities of the situation, without understanding the practical implications and without his acknowledging that our legislation in terms of its impact on francophone youngsters in this province is far more positive than their legislation in Quebec.

We don’t ask anyone in Penetanguishene who wants to take a course in the French language: “Where were you born? What generation are you?” The member won’t find that to be the case under the law in Quebec.

Mr. Samis: Since the so-called solution proposed by the Minister of Education (Miss Stephenson) has been rejected by every francophone and French-Canadian group in Canada and since the positive action committee is so upset by the decision that the president, Alex K. Paterson, and Storrs McCaul felt it necessary to issue a public letter to La Presse last Friday asking this government to change its position on Penetanguishene, could I ask the Premier what role he intends to play in the upcoming referendum debate and how he intends to be accepted with credibility by the French-speaking, non-separatist people of Quebec if his government can’t resolve this problem in Ontario?

Hon. Mr. Davis: I think it fair to state we will not always be able to solve every problem in this province. If the member for Cornwall is suggesting the point of view as expressed by this --

Mr. Warner: You should be solving problems that the Minister of Education creates.

Hon. Mr. Davis: This is a subject the member for Scarborough-Ellesmere does not understand Why doesn’t he let me debate it with his colleagues?

Mr. Warner: I understand it.

Mr. Speaker: Order. The member for Scarborough-Ellesmere is wasting time.

Hon. Mr. Davis: I think it is fair to state, when it comes to the question of education, this province can take a position relative to the separatist forces in Quebec whereby our legislation will stand the light of day. The member can shake his head as much as he wants. If he compares their legislation to our legislation, he will see what we have accomplished here. I don’t care what somebody has written by way of a letter.

I happen to know the situation in Penetanguishene fairly well. The youngsters came up to my cottage. They drove up in a relatively new Grew boat made in Penetanguishene. They were a great group of young people. Three of the leaders of the group happened to come from other than Penetanguishene. I have to tell the member that part of my responsibility certainly is this province’s general perception in Quebec, but I would say with respect that they understand the actual facts in Penetanguishene when they understand we are committed to the provision of French-language education. We are prepared to entrench it or enshrine it in the constitution, which the Parti Quebecois is not prepared to do.

I just ask the member to make an objective evaluation if he can; sort himself out from his political philosophy which he is attempting to exploit on this particular issue.

COPIES OF STATEMENTS

Mr. McCaffrey: I will be brief about this. Being one who complained about this matter in the past on two occasions, I want to thank publicly the Minister of Intergovernmental Affairs for having the courtesy to provide all members with a copy of the statement on the PQ white paper.

UNIVERSITY RESEARCH

Mr. Kerrio: Mr. Speaker, I have a question of the Minister of Colleges and Universities. I would have liked the Minister of the Environment to be here as well because it is a related question.

Is the minister aware of the International Joint Commission Science Advisory Board public seminar held on November 7, 1979, here in Toronto entitled Research in Universities in the United States and Canada Committed to Cleaning up the Great Lakes? Is she aware also that in the United States in the Great Lakes basin some $14 million was given to colleges and universities for this kind of research and that on our side, particularly in Ontario and those colleges close to the Great Lakes basin, the commitment was some $150,000?

The question I would like to raise is, was there anyone from the Ministry of Colleges and Universities at this seminar? Or maybe she could ask the Minister of the Environment (Mr. Parrott) if there was any attendance there from his ministry to bring themselves up to date on research in universities as it relates to the cleaning up of the Great Lakes.

Hon. Miss Stephenson: Mr. Speaker, I am aware such a program was held in Toronto. It was my understanding there were representatives there from the Ministry of the Environment. I understand there were also some staff members of one or two universities in this area who attended that conference. But I would remind the honourable member the funding of universities in Ontario is quite different from the funding of any portion of university activity in the United States. Indeed, instead of $14 million, the universities of this province last year were provided with $789 million by Ontario.

A significant portion of that is to encompass the role of the universities in their research capacity on behalf of the community and the province in which they exist. We do not direct funds specifically to universities within this province except on contractual arrangements with certain ministries. They carry out basic research on the basis of the funding which is provided to them by the Ministry of Colleges and Universities.

Mr. Kerrio: Supplementary: We happen to be situated in that part of the Great Lakes basin where there seems to be a great deal of polluting of the environment -- witness that one can eat the fish that’s caught in Lake Erie, but not the fish that’s caught in Lake Ontario. Something is happening at Niagara. I wonder if there shouldn’t be a commitment in our universities because of this grave problem as it relates to the cleaning up of the Great Lakes? Would it be beyond the minister’s jurisdiction to get them to upgrade their research capability in helping clean up the Great Lakes?

Hon. Miss Stephenson: Mr. Speaker, I am sure those researchers in biology -- specifically in the water biology area -- have as grave a concern as the honourable member does in terms of this activity and many of them are carrying out research. That research is supported through the funding provided by this government to the universities in this province.

In addition, I am aware there are contracts which are let by the ministries of Natural Resources and the Environment to specific researchers for specific purposes. I am sure that commitment will be carried out this year because I know the university community is as concerned about the quality of the water on the Great Lakes as is the provincial government.

TRANSPORTATION OF DANGEROUS GOODS

Mr. Wildman: I have a question of the Attorney General: In view of the major disruptions that resulted from the train accident in Mississauga and the collision involving a tanker truck carrying sulphuric acid near Serpent River over the weekend, and following on the statements made by the minister and his colleagues the Minister of the Environment and the Minister of Transportation and Communications (Mr. Snow) in this House, can the minister inform us who is the owner or person in control of the radioactive waste sulphuric acid which is being trucked from Eldorado in Port Hope to Rio Algom in Elliot Lake?

Can the minister assure the House that the provincial government and all municipalities between Port Hope and Elliot Lake are notified of the route, amount and nature of cargo, and departure and arrival times of each shipment of this nuclear waste by the firm responsible?

Hon. Mr. McMurtry: I’ll certainly be happy to discuss this question with the Minister of the Environment and with the Minister of Transportation and Communications. They have I think the fundamental responsibility regarding the honourable member’s concerns. I will convey his concerns to both of my colleagues in that respect.

Mr. Speaker: Time for oral questions has expired.

DEATH OF HENRY JACKMAN

Mrs. Scrivener: Mr. Speaker, just before the orders of the day, I wish to pay tribute to a most distinguished Canadian, Henry Rutherford Jackman, QC. Mr. Jackman died last Thursday and was taken to his final resting place from Metropolitan United Church at noon today.

[3:30]

A lifelong citizen of this province, Harry Jackman, as he was known to his friends, gave tirelessly of himself to his church, his community, to the arts and to government. His philanthropies were legion.

One gift which drew wide attention and acclaim was his acquisition in 1969 of an equestrian statue of King Edward VII from the government of India. At considerable personal expense, he arranged to have the five-ton statue transported from India to Toronto, where he presented it to the province of Ontario. It now stands overlooking the north façade of the Parliament Building as an historic reminder that it was Edward VII, as Prince of Wales, who, when in Toronto in 1860, dedicated Queen’s Park to his mother, Queen Victoria.

Mr. Jackman also presented a bronze statue of Winston Churchill to the city of Toronto and this statue can be seen in Nathan Phillips Square.

At the time of his death he was finalizing arrangements to erect a sculptural tribute to the Canadian airmen of both World Wars. This undertaking was inspired by Air Marshal Billy Bishop, Canada’s greatest air ace in the First World War. Mr. Jackman believed in the recognition of heroes as an important example for young Canadians.

Born on November 5, 1900, in a house on Tranby Avenue in Toronto’s old Yorkville area, Mr. Jackman was the only son of Henry B. and Sarah Anne Rutherford Jackman. Such Toronto streets as Jackman Avenue, Bowden and Playter Boulevard are named for members of his family. His early education was received at Huron Street and Rosedale Public Schools and the University of Toronto Schools. At the age of 17 his education was interrupted for a year when he joined the Royal Air Force. He was a pilot in training at the conclusion of the First World War.

Mr. Jackman continued his education at the University of Toronto and Osgoode Hall Law School and, later, Harvard Business School. He was called to the bar in 1924. Commencing his business career in Toronto with Dominion Securities he moved to Traders Finance. As his financial interests broadened, he acquired an interest in a number of financial corporations. Because of his wise perception of business and people and his boundless energy, he was invited to sit with numerous boards and advisory bodies during his lifetime.

In addition to being an honorary director of the Bank of Nova Scotia, at the time of his death Mr. Jackman was president of the Dominion and Anglo Investment Corporation Limited; director of the Economic Investment Trust Limited; honorary chairman of the Empire Life Insurance Company; past-chairman of Burns Food Limited; past-president of the Debenture and Securities Corporation of Canada; and honorary director of the Canadian International Investment Trust Limited, E-L Financial Corporation, the Casualty Company of Canada Limited and of the Harvard University Association in Canada. There were a number of other corporations with which he had been associated over the years.

Mr. Jackman believed in public service and gave it. President of the Rosedale Riding Conservative Association from 1936 to 1938, he was elected member of Parliament for Rosedale in 1940, retiring in 1949. He was a founder and life member of the Commonwealth Parliamentary Association and a member of the national executive committee of the Canadian Institute of International Affairs. He was an officer of the Order of Canada, an honour bestowed in recognition of his public service. He was a Knight of the Order of St. John of Jerusalem and Knight Grand Cross of the Order of St. Lazarus of Jerusalem. As well, he was a trustee and past president of the Art Gallery of Ontario, a director of the Mendelssohn Choir and had served as chairman of the national finance committee for the Canadian Red Cross.

Internationally, he was a benefactor to certain organizations in the United States and Great Britain. For instance, he established a chair in church history for St. Andrew’s University in St. Andrew’s, Scotland, and assisted with the restoration of Grey Friars Abbey at Canterbury Cathedral.

Mr. Jackman had a lifelong interest in agriculture and owned a beef farm complex near Nobleton. He was among the first to import Charolais stock from France during the 1960s, expending considerable time and energy on herd improvement.

Within the confines of his own family, Harry Jackman has been heard to remark that many men can make fortunes, but few give them away. Mr. Jackman gave away several fortunes in his lifetime to charities and worthy causes too numerous to count. Latterly, he established the Jackman Foundation as a further means of assisting charitable organizations.

When Metropolitan United Church suffered a disastrous fire in January of 1928, Mr. Jackman gave strong leadership in raising the necessary funding for its restoration and endowment. He continued to work for that church and for the United Church of Canada until his death.

I have given a very brief outline of the life and works of a man who has been an outstanding citizen of Ontario. For all his success, Harry Jackman retained a personal modesty. His good deeds were his personal demonstration of his beliefs.

I believe members of this Legislature will wish to join with me in extending to Mrs. Jackman and members of her family our deepest sympathy at their loss.

ANSWERS TO OUESTIONS ON NOTICE PAPER

Hon. Mr. Wells: Mr. Speaker, I would like to table the answers to questions 277 to 280, 309, 351, 353, and interim answers to questions 350 and 352 standing on the Notice Paper.

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS

Mr. Chairman: As is the custom, there are usually leadoff statements. Does the minister have an opening statement?

Hon. F. S. Miller: Yes, Mr. Chairman.

Mr. Conway: Where have you been the last 10 days?

Hon. F. S. Miller: I have been in hospital.

Mr. Peterson: Do you want to adjourn right now?

Hon. F. S. Miller: Why don’t you just avoid my statement by passing my estimates and let me go back?

I would like to open by making a statement, if I may, before we begin the detailed discussion of my estimates. This is the second time I have had the honour to be presenting Treasury’s estimates. I also understand that later we will be considering the supplementary estimates for the Employment Development Fund.

As you know, the activities of this ministry touch upon a great many areas. However. I will confine these introductory remarks to a few highlights of the province’s economic and fiscal policies. In particular, I would like to review the progress we have made in implementing some of the major parts of the 1979 budget and briefly discuss the current economic climate.

The main thrust of the 1979 budget was to create jobs in the private sector. We undertook a number of specific actions designed to accomplish this, including the elimination of succession duties, new and extended sales tax exemptions for the hospitality industry and modification of the mining and capital taxes.

We also undertook two major initiatives. These were the creation of the Employment Development Fund and the small business development corporations legislation. The Employment Development Fund was established to make sure that Ontario received its fair share of the new investment for which other jurisdictions outside Canada are so aggressively competing. The fund has now been in operation for some months and based on our experience to date I am satisfied we are on the right track in creating this new program.

As you know, the fund is administered by the employment development board, which is chaired by myself. The Minister of Industry and Tourism (Mr. Grossman) is the vice-chairman, and the other member of the board is the Provincial Secretary for Resources Development (Mr. Brunelle). The bulk of the staff work is done within the Ministry of Industry and Tourism, with the exception of applications from the food-processing industry which are handled by the Ministry of Agriculture and Food before they are considered by the board.

There are really two parts to the fund. One relates the pulp and paper industry and the other relates primarily to manufacturing. With respect to pulp and paper, we are now heavily immersed in the process of negotiating agreements which will affect virtually all of the mills in Ontario. The agreements will result in major investments in both modernization and pollution control systems. I should emphasize that in all cases the lion’s share of investment will be made by the corporations themselves.

We are also involved in discussions with the federal government, which has agreed in principle to pick up about one third of the government’s share of these investments.

Overall, Mr. Chairman, I expect that our contribution -- which we still estimate to be some $100 million -- will generate investment worth over $1 billion. This will provide lasting employment for thousands of workers and ensure continuing prosperity for many communities.

With respect to the manufacturing side, the board has reviewed a very large number of cases and has approved over 30 proposals. We examine applications from the point of view of a number of criteria, including job creation, potential for export development and import replacement, the creation of new technology and the stimulation of key industries and regions.

We also give preference to Canadian-owned companies. Where they are not 100 per cent Canadian owned, we look for a number of things before accepting an application, including a strong Canadian research and development commitment; an independent purchasing policy and global export mandate; independent Canadian management; and a commitment for reinvestment in Ontario. Naturally these criteria, where relevant, apply to Canadian-owned companies as well.

Another and obviously the most important consideration is whether or not the project would proceed without incentives provided through the Employment Development Fund. I’m confident that we’ve created an effective, hard-nosed operation which is making a genuine contribution to the economic future of our province. As many applicants who have been turned down can testify, this is not an easy giveaway program.

Mr. Chairman, the members may wish to go into further detail on the operation of the EDF and I look forward to receiving their comments and suggestions.

I would like to turn briefly to the small business development or corporations legislation. You are aware that the grants paid under this program will come under the supplementary estimates for the employment development program. I’m sure most of you know the basic provisions of the SBDC legislation but let me refresh your memory as to how it all works.

The act provides for registration with the Ministry of Revenue of small business development corporations. Individual investors in an SBDC receive a grant equal to 30 per cent of the initial investment. Corporate investors receive a credit against their Ontario corporation income tax.

The SBDC, in turn, is empowered to invest in eligible small businesses. These small businesses must be Canadian controlled, with no more than 100 full-time employees and with 75 per cent of the salaries and wages paid in Ontario. They must be primarily involved in manufacturing and processing, tourism or mineral exploration and development. They must also operate at arm’s length from the SBDC.

The response so far to this new SBDC program has been encouraging. To date, 18 SBDCs have been registered with the Ministry of Revenue. Most of them are still in the very early stages of operation and have not issued share capital. Therefore, it’s still too early to assess the results of the program.

When the act was debated in this chamber I indicated that path-breaking legislation such as this requires a degree of flexibility. At the beginning it is impossible to foresee every circumstance or to predict accurately the response of the private sector. I therefore indicated, and would reiterate, that as we gain experience with this program we will consider modifications. I’m sure that the members of this committee will have some constructive suggestions and I look forward to hearing them.

I’ve been talking about some of the specifics of the 1979 budget. I would like to review briefly how the overall budget is progressing as we move well into the second half of the fiscal year.

As the members will know from the last publication of Ontario Finances, we have been experiencing more buoyant revenue than I had originally projected. This has been caused mainly by higher than anticipated retail sales and corporate profits. However, to some degree these revenue collections lag behind current economic performance and I look to the second half of the year with, at best, guarded optimism.

[3:45]

When we examine our spending growth rate this year it is interesting to reflect upon the outstanding success of the government’s restraint program.

In 1974-75, Ontario was coping with the rate of expanding growth of over 24 per cent. We were only one of many jurisdictions faced with this problem. For example, federal government spending at the time was growing at an annual rate of about 28 per cent.

Ontario was unique in one respect. We acted faster and more effectively than other governments to deal with the problem. By 1978-79 our total rate of spending growth had been reduced to 6.4 per cent and that is a very significant accomplishment.

In the current fiscal year we are projecting expenditures to grow by 8.4 per cent. That is up from last year, but it is still well below the projected growth rate in the Ontario economy. The latest forecasts for the economy run in the area of 11 per cent in current dollars.

This year’s spending growth rate reflects the creation of the Employment Development Fund. In addition, we must make provision for a disaster relief for the spring flooding in the north, the Woodstock tornado and the failure of much of the tobacco crop. The Mississauga situation could also have applications for our spending this year, but that remains to be seen.

On the other hand, we are continuing with our policy of imposing in-year spending constraints on ministries and the result of this will balance off some of the spending pressures. The progress in reducing spending growth which we have made over the past four years has allowed us to make a substantial cut in the provincial deficit level without major increases in taxes. I originally projected a deficit level of $1.153 billion for the current fiscal year. By the time the year is over, I hope to have improved upon that.

Mr. Chairman, I believe that our long-term objective must be to continue to reduce net cash requirements. However, this can only be done in a manner that is consistent with broad economic and fiscal policy objectives. It is interesting to reflect upon the substantial reduction that has already taken place. In 1975-76, the deficit represented almost 16 per cent of total spending. This year the equivalent figure will be about seven per cent.

The deficit levels over the past several years have been well within the financing capacity of the province’s non-public borrowing sources. Mr. Chairman, you may be aware the province has not done any long-term borrowing in the public markets on its own account since 1975. In fact, this year we will be eliminating some $389 million of public debt.

I would like to make one final observation on our restraint program. Ontario’s spending now accounts for 15.5 per cent of the gross provincial product, which is a significant reduction from the high of 16.4 per cent four years ago. That translates into about $1 billion in the hands of the private sector this year alone.

I would like to turn now to the economic outlook. When I brought down the budget last spring, I believed that 1979 would be a year of solid performance and events have borne that out. I mentioned earlier that so far our revenues have been buoyant, reflecting a brisk pace of economic activity in the province.

The rate of job creation in Ontario has been particularly strong. There are 170,000 more people working in Ontario today than there were a year ago. While all of this is very encouraging, Mr. Chairman, nevertheless the current high levels of domestic interest rates and the economic outlook for the United States concern me, because of the implication for Canadian exporters, particularly the auto industry. An American recession is anticipated next year as a result of world oil prices and high interest rates in the US. More OPEC price increases and further instability in world oil markets could deepen and prolong that recession.

As the members know, this is one of the main reasons why Ontario is deeply concerned about the possibility of price increases of oil and gas in Canada. We feel that price increases beyond the previously agreed levels will be difficult for our economy to sustain without suffering a severe setback.

We’ve also pointed out that if the federal government does not heed our advice and does opt for the significantly higher prices, which are really tax increases under another name, the bulk of the funds should, in the short term, be recycled back to the economy in order to cushion the impact.

On this subject, I hope I’m preaching to the converted so I need not go on. I said at the beginning of my remarks I would not try to cover all aspects of my ministry, since that would take too much of the committee’s time. At this point, I shall conclude.

Mr. Peterson: Mr. Chairman, in keeping with the minister’s leadership in restraint I won’t be too long today either, because I’m not very happy with the whole estimates procedure, let alone the opening statements, the great diatribes that nobody really cares about; I’m more interested in having a chance to converse with the minister.

I must say at the outset I’m a mite disappointed we’re back in the House this year. I was under the impression there was generally going to be a shift from the House to committees outside the House. Frankly, I find that a far more fruitful kind of forum for discussion with the Treasurer or whatever minister is involved, particularly when one has an opportunity to chat with the senior civil servants.

I’m not sure why we ended up here this year. I asked my own House leader. He said the NDP, for some reason, wanted it back here. I’m not sure of the veracity of that, but I hope very much that next year we will end up back in committee, although I highly suspect there will be a very different set of players at that time. I assure the Treasurer that at that time I will forthrightly answer any questions he may have as the opposition critic.

I’m sad to hear the Treasurer has been in the hospital. I hope he’s feeling better. If this is too much of a trial for him, I for one would happily adjourn until he is feeling first class. Frankly, I wasn’t even aware he was away, and I don’t think anybody else was aware he was away. Maybe that is one of the problems he has as Treasurer of this province, creating a profile. It’s fun to have him here, in any event, to chat briefly about some of our concerns.

In a sense, as he rightly points out, this is his first year. He came in last year under a wee bit of a cloud. There were a lot of promises made for which this Treasurer didn’t feel totally, personally responsible; justifiably so, to some extent. That’s an old and respected tradition of his government; if in doubt or in trouble switch ministers, because it’s really pretty tough to hang the new minister with the old minister’s policies.

It will be interesting to see if he is here next year. I suspect he won’t be, at least not in the same position. The Treasurer came in last year and created his own first budget, something he feels personally committed to.

There are some good things about it; I want to tell him that at the outset. At budget time the Treasurer presented us with one of the more responsible sets of numbers I have seen in my brief tenure in this House. He was close to his targets. He didn’t have the predilection that some other Treasurers and some other ministers had to overstate figures. Certainly his second quarter review came in better than budget, and in most cases I compliment him for that.

It is most important that Treasurers in particular have the capacity not only to tell people but their own colleagues the grim realities. Maybe I shouldn’t even say this, but I for one am somewhat attracted, certainly not in all respects but somewhat attracted to at least some of the postures of the new Minister of Finance in Ottawa.

I’ve never met the man, but it seems to me -- and I hope he can sustain it, I hope he has the political clout to do it -- he is appearing to tell people the grim reality of the kinds of problems we’re facing, he’s not offering any simple panaceas. I wish he had had the political clout to get out of that silly mortgage interest deductibility program they have, even though it’s a watered-down version.

I think we are collectively coming, and I hope it’s transmitting through to the populace, to the point that we in government and I don’t have to take responsibility because I’ve always been in opposition, have been foisting a lot of irresponsible things on people and burying some of the long-term problems. I can tell you this, a price will be paid; that price is going to be paid, to a large measure, by our children, and it will be far more substantial than the price we’re paying now. That concerns me.

I’ll talk briefly about that in a moment when I talk about pensions, about some of the borrowing practices. Those are areas where your government has been particularly vulnerable to the charge of mortgaging our future, stealing from our future to maintain the pretense of at least some kind of fiscal integrity at the current time.

One of the things I don’t like about your statement, and I just saw it, is that all of your comparisons are against the years 1974-75 and 1975-76. You weren’t the Treasurer then, yet you say to yourself, “What a wonderful fellow I am because my performance is so much better than it was in 1975-76 when the figures were so much worse.”

That was an election year, and this government had one of the most cheap, bogus, irresponsible set of election promises I’ve ever seen in my life. Let’s not forget that a lot of your treasury officials were here in the same positions then as they are now, so what you’ve got is yourself running against yourself, or you running against your own government.

Mr. McKeough got blessings for all his noise about restraint. He was the businessman’s politician, and history will tell you that he was the biggest-spending Treasurer in the history of this province. If you want to run against Darcy McKeough you can run against Darcy McKeough, but don’t try to run against us or the NDP, who as irresponsible as they are probably wouldn’t have approved of some of those giant giveaways in the 1975-76 campaign.

I remember it well; I remember it because that was my first election, Mr. Chairman. We had the $100 million worth of first-time home owners’ grants in retrospect terribly administered and poorly conceived program. There were the sales tax cuts on automobiles, a high percentage of which were imported from abroad; and the across-the-board cut in sales taxes. Most people have learned, after the fact, that our system was not all that responsive to sales tax cuts because such a high percentage of our consumer goods are imported from abroad.

It was a neat election ploy. The government used it then, and now you’re trying to prove what a decent fellow you are by not doing it again and by telling us how much better your figures are. I want you to know I don’t buy that; I’m not very impressed with those kind of arguments.

I’ll say this to you. If the logic that was used at that time to stimulate the economy was correct, I can tell you there’s a lot more argument, and there has been subsequent to the 1975-76 fiscal year, for stimulation now. I can tell you this, Mr. Chairman: things are going to be very much worse in the next year than they were in 1975-76. Who knows, there may even be an election, so you may want to review your policies.

I can tell you that anyone who pretends there’s been a consistent, coherent, economic philosophy running through this government, encompassing the tenure of the Treasurer here, is sadly mistaken. This government’s economic philosophy has been to go with the present breezes, to bend with whatever seems to be the mood of the day.

The assessment of the government is that restraint is the mood of the day. Frankly, you know my position well. It’s no secret I happen to share that point of view, in general terms anyway, so I’m not squawking about that in general, although I reserve the right to squawk about it in specifics at a later time.

This is our annual review of the Treasurer. I compliment him on the relative veracity of his numbers. I think the Treasurer probably doesn’t have the problem of waking up in the middle of the night saying, “My God, I lied to the people;” because he hasn’t. He’s been fairly consistent, with a few exceptions where programs were a little ill-conceived or poorly thought out. We told him when we were debating them in the House, and I’ll tell him again today, where we thought they went wrong, but at least his numbers aren’t too far off

[4:00]

However, the Treasurer has, most conscientious I gather, almost buried himself. I don’t pretend to understand him, decent man that he is, Mr. Chairman. Certainly the Treasurer hasn’t had the profile, in the last year, of the previous Treasurer. Apart from the few numbers he produces, we have had some difficulty determining what he actually stands for in various areas. We have not had to have him deal with some of the fundamental problems that are sitting there, like property tax reform and things like that. He has hived those off and isn’t getting involved with them.

We certainly used to know from the previous Treasurer, from the three or four speeches a week that he made, all in printed form; at least there was a constant flow of junk that one could peruse if one had trouble sleeping at night, at least we knew his position on various issues. But we have trouble with this Treasurer, knowing exactly what he thinks about anything; except of course what colour a chap’s socks should be or what colour jacket to wear in public.

Mr. Laughren: That is very true, and he needs new advice in that area, too.

Mr. Peterson: I agree with you, he probably could use some advice in that area.

The question of interest rates is an interesting one. We went through an exercise in the House; various people had various and different points of view on the interest rate questions. Certainly some of my colleagues -- my colleague to my left from Huron-Middlesex, for example, who thinks very deeply what this is doing, what it has done and what it is going to do to the sector that he represents, which is the agricultural community; he has suggestions of the kind of relief that should be tendered in that particular area.

This Treasurer, Mr. Chairman, has the classic lawyer’s two-handed approach to these problems. While on this hand he listens to this bit of advice, on the other hand he listens to an equivalent number of internal economists with a different point of view, and he ends up basically down the middle doing nothing. I really have no idea what this Treasurer thinks about that question; or whether he has the clout in Ottawa or the influence or the personal friendships or whatever, to go to the Minister of Finance and say, “Look, this is what it is doing to Ontario,” and that he is either for it or against it. My guess is Darcy McKeough would have stood up in this House and said, “Look, that is a reality, I am for it. If you don’t like it, that is your problem.”

I still have no idea what the Treasurer thinks about this. He is trying to appeal to all constituencies in this particular area. It wouldn’t hurt the Treasurer, and I pass on this advice as generously as I can, to take a stand on some of these issues and be prepared to fight it out. You can pretty well predict what the NDP is going to say. You never know exactly for sure about us, but take your chances on that one. We may have a fight with you, but as long as you are right we will support you.

Hon. F. S. Miller: I am always right.

Mr. Peterson: Therein lie all of the problems.

I want to mention a few things that I think the Treasurer should be doing, and these are in a general sense. I told you earlier I am not very happy about the estimates procedure. I don’t think it provides a very meaningful forum for the kind of debate that one should have.

I supported a bill by my colleague from London North about two weeks ago -- you weren’t in the House, as I recall -- suggesting that we should have a five-year fiscal plan filed in this House, very much along the lines set out by the Lambert commission from Ottawa.

I will grant you that Ottawa probably was in a worse situation than Ontario. It probably didn’t recognize some of the operating necessities that have been recognized here longer. I think it would be a worthwhile thing, a discipline, to establish a set of standards against which governments could be measured. Let us not forget that one of the most difficult things in bringing relevance to the parliamentary procedure is a set of standards against which the government performance can be judged.

The best set of standards perhaps, is the set of standards the government sets for itself, At least we can tell by looking at the deviations from its projections to see if there is reasonable explanation. The government can do that, in a sense, on its budgeting procedure once a year. It measures up at the end of the year to see what it has done. I think it would be a good thing for you, for your staff and for this province, if you were forced to file a five-year plan, which you referred outside of the House to a government committee on expenditure, where we could have a full debate about the fiscal performance of your government and the projections thereof.

One has to go into that with a certain set of assumptions. One would assume the tax system will remain basically as is. Of course it does change, certainly those numbers can be changed on an annual basis; but it would force two things, in my judgement. It would force a discipline on your government to think ahead for five years and to reflect on some of the serious questions you are going to have to face and which you have never faced up to. You have oozed concern about such things as financing of deficits and repayment of the Canada Pension Plan and the teachers’ superannuation fund, but you have never faced up to some of those long-term program problems that are very important to the financing of this province. It would force you to think ahead about those things. I have seen no evidence whatsoever that you have thought ahead about those problems, let alone that you understand them.

The other thing it would do is generally upgrade the quality of the input from the back-benchers and the opposition members. Let’s have some full discussion, questions and answers, about some of those kinds of questions. I am talking in a sense about relating revenues and expenditures.

Frequently it is just a question of reviewing estimates. Most members come here with a particular constituency beef and say, “I wish you were spending more in this area or this other area.” We have all got more ideas on how you can spend money. That is a natural outgrowth of the kind of procedure we have in this House.

We never, except for an odd debate, sit down and seriously reflect on where the revenue is going to come from. We do not suggest how to tax more or tax more equitably. We do not have an opportunity to cross-examine the civil servants and have suggestions for them. Granted that comes up sometimes in question period. The NDP has its ideas, we have some of our ideas; but it doesn’t come up in terms of a meaningful kind of discussion.

I think if this committee functioned properly we should have an opportunity to have the Treasurer before it, to have the deputy minister, to have some of the senior economists; perhaps even have the governor of the Bank of Canada come in and give us his points of view. I think those things would be worthwhile for a province of this size, one that has grown from a budget of $3 billion or $4 billion at the beginning of the decade to $15 billion today. It is a giant organization you are running here. The more you can discipline yourself and get your parliamentary colleagues involved, the more we will have better, more responsible, more responsive government making fewer mistakes. Also it will have more effective stewardship of the taxpayers’ dollars.

A piece of legislation I would like to see introduced, and I have introduced private legislation along this line, is a tax expenditures law. Every time you give away money by way of a tax cut, tax credit, tax deferment or whatever, you should have to file a set of objectives, showing why that is being done, what you expect back.

When Darcy McKeough was Treasurer he brought in a bill to accelerate the capital cost allowance in this province. That is federal legislation. The Liberal Party brought in an amendment forcing him to come back within a year to review that. In a sense that was a kind of tax expenditure program. We could look at what he was doing, compare it with his objectives and see whether that was a worthwhile expenditure of those funds, because a tax cut is an expenditure any way you cut it. If you are going to cut yourself out of $100 million worth of revenue, then we should say was that worthwhile or should that money have been collected and spent in some other area; that is another area in which I would like to see the minister get himself involved.

There are a myriad other things we have suggested. For example, economic impact studies on all legislation. I still think that is worthwhile. It has the problem of binding up a government, but it forces it to think through some of these questions and to make them public. Then if it is wrong in its guesstimates that becomes public knowledge.

I assume a lot of these things are done privately now, through the staff or in cabinet; but at the same time when we see a minister bring a piece of legislation into this House saying, “I have no idea how it is going to work or whether it is a very good idea at all,” it doesn’t give us all that much faith. I am referring to the small business development corporations legislation you brought in this year. We will look at that in a moment to see whether it was worthwhile or not, I think we will have more conversation on that later.

I want to mention a few other points that I think are relevant at this time. We talked about one of these over here. It is one of which the Treasurer is probably aware. He instituted a poll at a cost of $60,000 to figure out the public’s view of his restraint programs and his government’s spending programs. It is our view the results of that should be rightfully in the public domain. He makes himself a victim of a very serious accusation that those are being used for partisan political purposes, which I have no doubt they are. In order to go at least as far as he can to dispel that, he has an obligation as a minister who prides himself on integrity to make that kind of thing public. We are going to use every resource we can to extract that out of his hide. We think that rightfully should be in the realm of public knowledge. He is deceitful not to make it such.

I was interested in reading the Treasurer’s September 30 Ontario Finances. I take him back to the budget two years ago, and budget paper C, as I recall, on page four. The long-term projections were that if he could keep the differential between revenues and expenditures to about 2.5 per cent he would balance the budget in the fiscal year of 1983-84. He came up with that 1984 figure in response to a considerable amount of pressure when he became Treasurer.

Let’s not forget the previous Treasurer had promised to balance the budget in 1981 as part of the great Brampton charter, as part of the great campaign before the last election in 1977. He knew, and I feel very confident he knew deep down, that was totally unrealistic. Even he couldn’t have achieved that, but it seemed like a catchy kind of figure. That’s all the press cottoned on to, balance the budget in 1981.

Then, of course, the present Treasurer came in and he took a little different view of the situation. He said 1984 to everyone looking for that magic year when he was going to balance it. But in his September 30 figures there is only a differential of about 1.5 per cent. That means, if we extrapolate those out, his own figure for balancing the budget is going to turn out to be quite unrealistic and probably we are closer on current trends, to 1987, 1988 or 1989.

I would be interested when the Treasurer responds to me and if he doesn’t, I’ll ask him questions about it later, what his current view of balancing the budget is, in spite of the apparently better performance for the first six months of this year.

I think that better performance, particularly his understated revenue projection, is going to come true by the end of the year, that is the way it appears to most economists today. The only optimistic economist I know today, and he is not really an economist, is Tommy Kierans who happens to work for the Treasurer -- at least he is a principal contributor to the Tory economic policy conventions and also chairman of the Ontario Economic Council. I understand he is a man very much on the inside, or at least he used to be. He is the only optimist I know.

All it means to me is that you guys sit around and smoke the same stuff because most of the people outside -- the Conference Board in Canada, various banks, Wood Gundy or whoever we want to talk about -- are fairly pessimistic about the prospects in the short term. If I was doing the budgeting I would be doing it on that basis, very clearly. Even though I congratulate the Treasurer for the first six months, I wouldn’t suggest that’s going to carry on for the next year or so.

I probably will save my remarks on the SBDCs for later down in the estimates. From the latest figures I have, which I’m not suggesting are correct and the Treasurer may be able to bring me up to date, 14 have been registered, I believe, representing some $432,000 worth of investments.

Hon. F. S. Miller: Eighteen.

Mr. Peterson: Eighteen; he may also have the numbers for how much has been invested by the SBDCs and so-called eligible corporations, and how much has been given out by way of tax rebates.

[4:15]

I am a little concerned about that; I’ll maybe mention it now. When that was established, the Treasurer will recall, there was a great fanfare shortly after it was announced that Wayne Beach of Aurelian had established the first one.

I have no idea how many investments he has made, but I would like to know. If the minister doesn’t have it, I would ask his staff to provide for me, if they possibly could, a list of the eligible investments, who has invested in what. I assume that’s public knowledge because they are, to a large measure, public funds. I would like to examine that in the course of these estimates.

It’s interesting that when we had that major debate we were all talking about directing money into risk capital kinds of projects: new kinds of projects with high technology, creating a “nursery for entrepreneurs, a nursery for capitalists,” in this country and in this province. But then came Wayne Beach, the president of Aurelian, and he is quoted as saying that his company has been deluged with requests from people wanting us to invest in their pet projects. “We are not interested in inventions or startups.”

To a large measure, that defeats, to some extent, the stated purpose; particularly when the minister made the statement at the time of the introduction of the SBDCs that “I believe it is vitally important to make sure there’s a stream of equity capital available to new enterprise.” The minister will recall that at the time one of our fears -- and we had many fears, some less well founded than others -- was that this system would become only an alternative source of conventional capital and would not be creating new capital to go into new kinds of high risk propositions. One would only come to a SBDC as an alternative to going to the bank, because one could get it at a lower rate even though he or the company was bankable at the bank.

I may be wrong. I have to look at the specifics before I know that. I would be grateful if the minister would look at that and assist me in getting rid of that view of the situation, because it may well be an incorrect one.

I will leave the talk of unemployment to my friend the member for Nickel Belt (Mr. Laughren). Needless to say it had a dramatic jump in the last month, something the Treasurer must be concerned about. I think it bodes poorly for the future, in spite of the fact the minister says he has created another 177,000 jobs this year. Our unemployment rate is up, particularly in the 15 to 24 year old group, to 10.5 per cent, well ahead of a year ago. I see this as a portent of things to come; I would hope the Treasurer would have something to say about that. It looks like his so-called “leaving it to the marketplace” programs aren’t necessarily going to mop up the extra unemployment being created by a number of circumstances, albeit a lot of them external to ourselves.

There are three or four other things. It wasn’t my intention to go on for too long, but I want to talk about a couple of other things, particularly this matter of equalization, Mr. Chairman.

We have had a number of discussions in this House about the whole equalization. I think we caught the Treasurer off guard at the beginning when we suggested that the province of Ontario had an entitlement to equalization under the current formula. He ran out of the House and said, “That isn’t right. It has been removed by Bill C-26 by the federal government.” Then I guess one of his staff got to him and said, “That isn’t the case, because Bill C-26 was never passed by the federal government.”

I am not sure how much we are entitled to. It varies -- depending on whom you talk to and the current formula, and that’s oil leases included in the classical way as opposed to the new way that Bill C-26 wanted to treat them -- somewhere between $400 million and $500 million over the past three years in equalization. The question, of course, to the Treasurer or to the Premier, is why don’t you collect this?

Then they start into a moral argument: “Well, you know, the purpose of equalization is not to subsidize or to assist provinces with higher than average per capital income.” Mr. Chairman, I tell you that has nothing to do with the purpose of equalization. It is to equalize per capita provincial revenues, not per capita income. There is a profound difference; if the Treasurer doesn’t believe me, read the act. That being said, we have a positive entitlement; finally, after questioning in the House, he admitted that and said, “Gee, I think you are right.”

The next obvious question is why not collect it? His response was: “It is, sort of, not morally correct. That is not the intention of the act. We are really a kind of ‘have’ province and we are really not a ‘have not’. Gee, we don’t think we should. In any event, if we collect it, you know that 40 per cent of that -- or whatever, 40, 45, or 35, depending on how you view it -- will come out of the Ontario taxpayers’ pockets anyway, because equalization, as we all know, comes out of the federal coffers. It is not contributed to by the provinces except indirectly through their income tax and various other forms of taxation; but it is not a transfer between provinces per se, it is a transfer by the federal government to provinces.”

So, I guess, originally they used the legal argument, saying we are not entitled. But clearly we are entitled. Bill C-26 was never passed. I have no idea what the federal government’s intention is on Bill C-26, but I can tell you this government should fight it with everything that it is worth.

When the Treasurer and the Premier are running around this province, around this country; saying basically that we are getting shafted, we are getting it stuffed to us by the producing provinces; when they are mounting this one-province campaign against the federal government, saying it is going to destroy our manufacturing industry, it is going to cost us jobs, it is going to cost investment and everything else and we are the ones who are going to lose the most; surely, the morality of the situation is that we are entitled to collect that money. I can’t for the life of me understand why this government doesn’t go to the federal government and say, “That is our share and we want it.” Many people have asked me: “Gee, I really can’t understand this, why wouldn’t the provincial government collect that money?” And I don’t know.

The only explanation I have is it is because of pride. If one could see a picture of -- I guess the Premier (Mr. Davis) fears the cartoons; one of himself, with his grey hair and ample, well-vested tummy, kneeling in front of Joe Clark with a tin cup, having equalization dropped into it; I guess that would offend the Premier’s pride, I have no idea. I can see the Duncan Macpherson cartoon right now, and it could be catchy.

Those are the realities under the law, and I would say that our position is totally morally defensible today, particularly in view of the things that the Treasurer and the Minister of Energy (Mr. Welch) arid the Premier have said. Go and collect it, because I have an awful lot of good ideas on how that money can be used to insulate Ontario against the impact of higher energy prices. We have an obligation to cushion our consumers, to cushion our industry, to cushion our people on fixed incomes and our senior citizens against those kinds of shocking price increases that are going to come along.

I can say right now, the prices are going to go up. The Premier has wasted so much verbal energy on trying to keep them down. I guess it was a good try because everybody thinks he is the hero of the consumer, even though he knew it was a losing bloody battle when he walked into it. I guess he got the headlines he wanted. I guess he thinks people will walk out and say: “Davis fought the good fight. Isn’t he a good friend of the little guy?” But he knew he was going to lose. He should have used his energy, his moral suasion, his power of persuasion and all the great staff he has to devise a scheme on how to fairly distribute those oil price increases. That is where the energy should have gone, because he knew it was going to go up. Everybody knew: my grandmother knew; my kid knows, and he is two years old.

That is the reality of the situation, Mr. Chairman, and he blew his credibility. Maybe the Premier has got political kudos out of this; I have no idea, he is going to judge that. He is probably taking a poll right now to figure out how he fared. But in the long run I don’t think this government did itself, or the people of this province any good, and I think its energies could have been far more intelligently employed in other areas. That is one more onslaught, along with interest rates and a lot of other things, that are seriously going to affect the financial future of this province. We are running down with our creaky industrial machine, with our deficiency in capital investment, manpower programs and everything else.

One doesn’t have to be very intelligent to project ahead and see the kinds of problems we’re going to have. Even as a father, if the minister’s son came to him today and said, “Dad, what should I do? Where should I go?” my guess is he’d look him in the eye and say, “You know, son, the best advice I could give to you is go to Alberta, because there is going to be more opportunity there.”

That’s a real moral dilemma faced by a lot of people I know today because they don’t see: One, a recognition of these problems in totality; two, the effects that they’re going to have on this province; three, any kind of plan of action; or four, any determination to solve them. I would say very seriously, forget the pride and admit that these problems are serious.

I just got a letter from my stockbroker. Things are not good, I told the minister they weren’t good.

Hon. F. S. Miller: You are lucky you can still buy stocks.

Mr. Laughren: Listen to these two capitalists going at each other.

Mr Peterson: Here our little friend from Nickel Belt is going to start in. You see how I woke him up? I was worried my little friend from Nickel Belt wasn’t enjoying the speech and I just thought I’d throw that in to wake him up and get his blood stirring, because he’s going to be up next and I want him to get angry and mean.

I just wanted to talk about that equalization. I want the minister to talk about it when it’s his turn because in the absence of renegotiating some formulas -- and I’m not saying they shouldn’t be renegotiated -- but renegotiating those formulas right now looks to me as though it’s going to be as difficult to do that as to change the patriation parts of the constitution. This is a very fundamental and serious argument.

What we are doing now collectively is going to pave the way for the future, and I can tell the minister there’s a statement I want to read that I don’t like at all. It’s on page six of the minister’s statement: “The bulk of the funds should, in the short term, be recycled back to the economy in order to cushion the impact.”

Short term should have been taken out, because that’s wrong. The agreements that are going to be reached now are going to impact for the next 10, 20 and 30 years. It’s very important to understand this. This is just the first critical round; in a sense it’s not even the first round, because lots of people knew all these things that are happening today were going to happen in 1973 and 1974 when the whole started. The minister should have known but he didn’t know it and his government didn’t know it; but now at least he knows.

The prospects of $30, $40 and $60 oil are not silly. He can’t look me in the eye and say. “You know, Peterson, if you predict $60 oil in 1986 you’re crazy,” because I’m probably not. What the minister has to do is develop the program for recycling of those windfall oil moneys now, because what he does now and the input he has now in those discussions is going to impact four or five years from now. It is very difficult to change the fiscal arrangements in this province.

Don’t talk to me about the short term; what he is doing now impacts dramatically on the long-term health of this province and he should be doing it. I would like to see what he is going to take to the next Ministers of Finance conference with suggestion for redoing the fiscal arrangements of this country.

If he wants my ideas I’d happily go with him, because I have a lot of ideas and besides that I’m a lot of fun.

Hon. F. S. Miller: You are a lot of fun?

Mr. Peterson: I am a lot of fun in spite of it. You make me angry. I get a little cranky when I’m in your presence but in spite of that I am a lot of fun.

Hon. F. S. Miller: We will go jogging together. Bring your dog. Your dog licks my hand.

Mr. Peterson: Okay, I’ll bring my dog. He’ll bite you. My dog would have you for breakfast.

[4:30]

There are a couple of other areas. I just keep getting into this, and I was planning on being finished half an hour ago. I’ll leave the Employment Development Fund. I have no idea why the Treasurer is introducing supplementary estimates. I thought we voted for those before, except you move them around so much. I cannot understand your budgeting procedure. You included those in part of the capital investment in your last budget as investment, long-term capital investment, and it has been jiggled away and some of it taken into building hospitals. It is most confusing. If the Treasurer can make sense of it for me I will get into that in more detail later.

One of the things I am concerned about is Hydro and the effect it is having on our collective borrowing capacity. We have seen, in the past month, virtual collapse of the bond market in North America with the rise in interest rates. Granted there has been a rally in the last couple of days, but most people think that is a technical rally. Most analysts think there is going to be at least one more increase in interest rates, which is going to depress the bond market further.

I would like to know your plans: number one, on what Hydro is doing to the fiscal integrity of this province, because we have seen a deterioration in debt to equity ratio, of Hydro. We have seen a senior vice-president, Mr. Nastich, respond at the rate hearings that he just wasn’t sure of the effect it was going to have on the province, and he indeed was concerned about it, as are a lot of other thoughtful people.

Ultimately, that decision comes down to a decision of the Treasurer. I assume you have to have your nose in Hydro whether you like it or not. The former Treasurer did. He unilaterally cut a couple of billion dollars worth of expenditures, which proved to be, by accident, one of the more intelligent decisions that man ever made. He did it for fiscal reasons, not for the projected load forecast reasons as a lot of other people would have tried to do at the time. I would be interested in your views on Hydro and how that is affecting the fiscal integrity of this province.

I have two other points. We are now seeing a budget, Mr. Chairman, of which about 9.2 per cent is going to repay interest on our debts, that is the most dramatically increasing part of the annual budget. It was up something like 14 per cent last year, and 16 per cent the year before that. I am taking the numbers off the top of my head, I might be a trifle off. Every year the biggest single increase in the budget is to finance the debt. There is no end to that, and that is the tragedy. We see the cutbacks in transfers to other areas. We see them necessarily cut back because of the dramatic and sizeable increases in money needed to pay back the provincial debt.

That, in itself, has led one forecasting agency -- a week or so ago I read in the press -- to say the provincial governments will never be able to -- and you are not alone, you are not totally alone.

Mr. Ziemba: You can do what Iran does. Just refuse to pay the tax.

Mr. Peterson: There is a suggestion from my friend from High Park, do what Iran did. That is a clever kind of approach. I never thought of that.

Mr. Laughren: You have no imagination.

Mr. Peterson: Maybe he is right. Maybe I do have no imagination.

Again, that statistic bodes very poorly for the capacity of your government to ever balance the budget without some wrenching reforms, without increases in taxation or dramatic cuts in expenditure. All of those things conspire together to probably put a galling economic yoke on our children who are coming after us. That leads me, I guess, to my very favourite subject, the whole question of what you have stolen from the pension funds over the past 10 years.

I have yet to see a response from the Treasurer. I have tried my very best, by harping and by telling him about the financing crisis we are facing in this province. I have sent him books, I have yapped at him, I have chatted with him; and I have sent him articles to impress upon him the gravity of this situation. I know his response today would be: “Well gee, you know we have to wait until the Haley commission report comes down and it will be next spring.” It was supposed to be this fall and before that it was supposed to be last spring. God knows when Donna Haley is going to come down with her commission’s report on pension reform and presumably deal with some of the questions of the financing. I gather the provincial governments, and particularly Ontario, are in debt something like $8.7 billion to the Canada Pension Plan. When is it going to pay back that capital amount of money without substantially invading the capital markets, without competing with private enterprise and having an inflationary effect?

God bless the old Toronto Star; the Toronto Star had a headline today, “You Could Pay Double to Keep the Pensions Alive.” Of course, you will pay double. That’s a tax. It’s increased from 3.6 -- 1.8 contributed by the employee and 1.8 by the employer -- you’re suggesting it be increased up to seven per cent to keep that fund alive.

Responsible people know that the contribution rate has got to go up in order to keep that fund from going bankrupt between 1995 and the year 2000. What I don’t like about that is that it’s just another temporary salvation for the provincial government to borrow more money. I’ve advanced before the availability, the fed-demand thesis; you look at how much you could borrow internally, add it all up and then spend it. That’s exactly what you have done, on balance, over the past decade; and that is an irresponsible approach to budgeting, in my judgement.

Darcy McKeough isn’t going to be here when it all has to be paid back; and I say, respectfully, the present Treasurer isn’t going to be here either. He will not be here as Treasurer. He will walk out, they’ll have a great dinner of celebration, and he can make his comments about what a good fellow he was. Some poor clod who is going to be Treasurer of this province in 1984 has a hell of a problem. I’m just afraid it’s going to be me, that’s what worries me; I’m going to have to pay back this legacy of debt.

It’s a terrible problem. I have yet to see this Treasurer recognize the severity or the gravity of the problem with any kind of plan, even an interim plan, to solve that financing problem. It has yet to be determined.

As I said before, after we run out of negative tax flow with the Canada Pension Plan in the early 1980s, not only are we going to have to pay back the interest, at least a billion dollars a year by that point, we’re also going to have to look after the capital amounts we’ve drawn down, starting about the year 1995. In addition, we are going to have to pick up the unfunded liability of $1.4 billion from public service superannuation funds and from the teachers’ superannuation fund. It’s an incredible fiscal nightmare.

I go back to my original point. If the Treasurer, with his officials, were forced to sit down and file a five-year fiscal plan, I can tell him he would be a far more serious man about the problems he is facing here.

I know it’s not easy. I know politicians -- and he’s no worse than I am -- are trained to think in four-year cycles, or less than four- year cycles in a minority situation. I know that, I know the pressures. I also know that a lot of politicians are punished for thinking ahead; for thinking past the next election, for saying there are some serious economic problems we’re going to have to face.

There are easy ways to buy your way out of any one of them, but almost every simple solution buys a higher price that you pay later on. I want to see the Treasurer, not only as the Treasurer but as a concerned human being -- and he is concerned about what’s going to be happening 10 and 20 years from now -- wrestle with this program, discuss the plan, get some legislation in this House and at least start the pension debate.

My friend the member for Hamilton East (Mr. Mackenzie) introduced a resolution on pensions the other day, and I thought it was a good contribution. I would like to see at least a start to some of the aspects of this whole question; not necessarily the financing parts of it that I’m talking about today, we just need that kind of debate.

I hope that when the Haley commission report comes down the Treasurer strikes a select committee of this House, sits at it daily, and that we wrestle through this problem together by studying the Haley report and coming up with some very serious recommendations for this province. I hope she deals with the significant issues.

It leads back to my original point. The Treasurer is going to have to impress me and other people that he understands the long-term implications of some of these things. hopefully be will some come back with some conclusions, albeit tentative, to deal with these things.

In a simple sense, at least, as I said earlier, I happen to think that the new Minister of Finance in Ottawa is at least addressing some of these problems, except for the silly things he was trapped into politically. I hope, desperately, that on December 11, when he brings down his budget, he’s got the guts and the courage to face these things and doesn’t bend to those politicians and those political influences that aren’t, in the long term, in the interests of this country but are only, in the short term, in the political interests of a party which happens to be in power at the time.

I’ve gone on much longer than I wanted to. I apologize for that; I got carried away. The Treasurer looked like a very receptive pupil today. I felt compelled to go on and orate just a little more than I wanted to.

Hon. F. S. Miller: Orate and debate.

Mr. Peterson: We will pursue some of these matters later; thank you for the opportunity, Mr. Chairman, of participating.

Mr. Deputy Chairman: The member for Nickel Belt.

Mr. Laughren: That applause was appreciated. This may sound strange to you, Mr. Chairman, but I actually look forward to these estimates debates. They force me to crystallize my thinking --

Hon. F. S. Miller: You can’t crystallize something that’s amorphous.

Mr. Laughren: I’ll be specific today. I’ll be very specific.

It does force me to crystallize my thinking on the whole question of the Ontario economy. I hope it gives the Treasurer pause, as well, that some of the ideas that flow from this side can have some validity and should not be rejected out of hand. It’s an opportunity for us to make some suggestions that we haven’t made before, either in the budget debate or the question period as the session progresses. It also allows us to predict the future. I know the Treasurer doesn’t like to predict the future, other than to say that everything is going to be fine. Hence the name by which he has become known, “the Jolly Miller from Muskoka.”

In Ontario, this Treasurer is in keeping with the times. He’s got a very low key kind of approach to his job. He likes to project that very folksy, back-home kind of image and style, and sell the virtues of less government intervention, more personal initiative and almost unbridled, free enterprise. The Treasurer goes about doing that. I’m always struck, in the interviews the columnists have with the Treasurer, by how he goes to great pains to ensure that’s exactly the image that’s given. I’m sure he makes sure he wears a particular kind of sock, or a particular kind of jacket, when he has those interviews.

That view about the lack of government involvement and the virtues of free enterprise from this Treasurer wouldn’t bother me so much if we weren’t having problems, if the economy was booming and there was not a high unemployment rate; but that’s not the case now, and the Treasurer should understand that eventually the economic problems we face will be manifested in social problems. That’s something we find unacceptable, as a matter of fact we find it downright dangerous both in social and economic terms.

Before the Treasurer accuses me of being a nabob of negativism, or whatever other word he would choose to use, let me assure him that we New Democrats are very optimistic about the potential of Ontario. We know that Ontario has a very enviable mix of the things that go towards making a very industrialized, progressive, wealthy, sharing province. We have the mineral and timber resources. We have the fruit land and the farm land. We have the manufacturing structure; it’s in trouble, but it’s there. We also have an infrastructure of social and health services that are important to us. We know, I suspect better than the Treasurer knows, that the infrastructure of social, health and educational services is built on the assumption we’ll have a healthy economy down the road; that’s the assumption on which those are built. It’s also an assumption that our people will continue to be industrious and government will provide leadership in co-ordinating the efforts of the private sector and the public sector. I am worried that the Treasurer doesn’t really understand that, and that he is not prepared to provide that role.

[4:45]

We New Democrats, Mr. Chairman, are concerned about the apparent will of this government to carry out certain responsibilities as we see them. We see the government’s responsibility as one of leadership, co-ordination, and in some cases ownership. We see that as a role for the government, with the Treasurer being the person who should be articulating those roles and providing those functions,

This government, for example, must provide the leadership necessary to begin the process of rebuilding our manufacturing sector. I hope the Treasurer responds about the manufacturing problem. I will talk a little bit about it later, because I think he has bordered on the misleading in his statements about manufacturing in Ontario.

This government simply must co-ordinate the efforts and the activities of the private sector; it is not simply enough to express your faith in them and then stand back and hope for the best. They need co-ordination, and quite frankly they won’t object if you provide some leadership in that respect.

The government must take an active role in what is happening with our non-renewable resources. This government has a blind spot when it comes to the resources of Ontario. That is something the Treasurer should know a little bit about, having been a Minister of Natural Resources.

We on this side do not say that public ownership of the minerals in this province, for example, would solve all the problems of Ontario; but, Mr. Chairman, it would provide us with the key to unlocking the economic development of a large part of this province, and it ties in with our good manufacturing strategy as well. The minister, I hope, will understand that.

The New Democrats know that when we do form the government in Ontario -- and we won’t get into a debate this afternoon as to when that will be, because that might be a long debate -- we are going to require a healthy private sector as well. We are prepared, we have policies that indicate we are prepared, to work with the private sector, whether large or small firms, to ensure that the economy of Ontario is healthy. We do not stand in our place and talk about delivering a wide range of improved health, social and educational services without understanding they have to be paid for by the wealth-creating sector out there. We understand that very well, and we want to assure you that is a continuing commitment.

We understand, as well, that it is much easier to deliver those kinds of services when you have an economy that is growing and creating new wealth; it is much easier to redistribute wealth when you have a growing economy. We have stated, in reply to the budget last spring, that we are committed to the redistribution of wealth, whether the economy is growing or not. We stand firm in that commitment, but we also know that you can do a lot more when the economy is growing.

We know, too, that when economic instability occurs, it creates a distortion in both social and economic priority. We know that what we want to build is an Ontario that is stable, fully employed and more equitable than the one the present government presides over.

I will speak very bluntly to the Treasurer. We do not think he is doing a good job. I know it will come as a great surprise to him. We think it is wrong for him to sit back and let things happen out there. He is the only man I know who should have such enormous influence but who still believes in the invisible hand of the marketplace. He still believes in it. Despite all the evidence out there, this Treasurer still believes in Adam Smith.

Mr. Speaker, he ignores economic projections and simply dismisses them as being too pessimistic. He dismisses his own quarterly reports on the economy. The most recent one indicated that one of the problems was stagnating exports. He is saying that while global product mandating as articulated by the Minister of Industry and Tourism is still the cornerstone of his economic policy, it is faltering and he hasn’t come to grips with that. He doesn’t even admit that is the problem.

He fails to put in place any new programs in anticipation of a further downturn in the economy, despite what is already happening in the United States and despite the certainty that is going to spill over into the Ontario economy.

The Treasurer is silent on any adjustment programs as a result of the GATT negotiations. He hasn’t made a public statement that I am aware of. He has introduced no program to cushion the effect of higher interest rates -- either on the small-business community or on home owners -- despite all the evidence of the problems that is going to cause.

He has done nothing to soften the impact of the increased oil and gas prices which are going to hit Ontario manufacturers. He has put in place no new property tax reform, despite the very dire need for that in Ontario. He has been strangely and ominously silent on the whole question of the decline in our manufacturing sector. That probably bothers me as much or more than any of them -- particularly the problems in the auto pact.

He has failed to provide the leadership that could have been provided for Ontario manufacturers to take advantage of the lower Canadian dollar. Once again, he just assumed the lower Canadian dollar would solve the problem and that Ontario manufacturers would respond; yet the predictions now are that the lower Canadian dollar is not going to solve that problem. One need look no further than the problem south of the border to know why that won’t work.

I was struck by the way the Treasurer was used in Ottawa in the negotiations over the oil prices. He sat there beside his Premier, while that gentleman made arguments for not moving toward world prices of oil. The Treasurer was, in my opinion, politically opportunistic. He sat there, listening to the Premier make the argument that we should not move towards world oil prices because we need the competitive edge our resources should give us in this country, and Ontario is the heartland of the manufacturing industry.

While the Premier was saying that, however, the Treasurer had no program in place in case Ontario had won the argument in Ottawa and the Prime Minister had said: “You’re right, Mr. Davis. We had better not do it. The manufacturing sector is a real wealth-creating sector. We simply aren’t going to do it. We are going to take advantage of the natural edge that resource should give us, be more competitive on world markets, and solve all sorts of problems out there with balance of payments and so forth.” He should have established priorities for rebuilding particular manufacturing sectors. Instead, the Treasurer sat there, basking in the glow of this performance by the Premier; he didn’t carry out his responsibility to have programs in place. The Premier did his job, but the Treasurer didn’t do his, and that is wrong.

The Treasurer still has no plans so that, if oil prices don’t go up to world price, our manufacturing industries will take advantage of that. It is a painful process. I agree with the Premier’s attempts to stop the increase to world price, but I was really dismayed at the Treasurer sitting there and playing the role of opportunist, without doing his job of putting in place a plan to rebuild the manufacturing sector in Ontario.

Put bluntly, there are no new ideas or programs emanating from the Treasury. The Treasurer has abdicated his responsibility, it would appear, to the Minister of Industry and Tourism -- that lean and hungry minister, the Cassius of the Davis court.

The Minister of Industry and Tourism trips across the province -- I keep track of his comings and goings -- always substituting puffery for policy. I am sure that in the history of this province, there has never been a minister who talked more and said less than the Minister of Industry and Tourism. I know if we were just having a quiet coffee together the minister would be nodding his head much more vigorously than he is now.

I didn’t come here just to criticize the Treasurer or his good personal friend and colleague the Minister of Industry and Tourism. I came here to provide some alternative suggestions as well. Let me remind the Treasurer that, when we make suggestions, we do it in what I think is a constructive and positive way. It’s necessary to use the data available to determine whether the problem is serious enough to warrant the kind of programs we are suggesting.

The Treasurer should know, despite the typically almost Pollyanna approach in his opening statement, all is not well. I was reading the Conference Board in Canada’s quarterly provincial forecast of November of this year. I know the Treasurer doesn’t like the conference board figures because they tend to give him a jolt, but no one should question that the conference board is an objective forecasting body. It has no axe to grind in predicting figures that are pessimistic or optimistic. I believe it is an objective body in terms of its statistical work.

This is what the conference board has to say about Ontario: “The current outlook for Ontario calls for a continuation of the trend, begun in the early 1970s, of a declining share in national output. In relation to the August quarterly provincial forecast, the current forecast for Ontario 1980 has little changed, but it would now appear that the province will grow by only 1.8 per cent in 1979, not the 2.7 per cent previously expected.

“This more pessimistic impression stems directly from a downward revision in our national outlook and a more ominous gathering of the clouds on the US economic horizon. Next year Ontario’s performance remains one of extremely weak growth. The goods and the service industry components of the provincial economy are still both expected to underperform their national counterparts in 1979-80. This will represent the first time since 1975 that both will lag behind their national counterparts and the first time in 20 years that this has occurred for two consecutive years.”

I notice in the Treasurer’s opening remarks he used the figure that we are going to have an 11 per cent increase in growth in Ontario this year in current dollars. Where does the Treasurer get off using those kinds of statistics? Does he not deflate at all to find out what the real growth is out of that 11 per cent figure? What is it? Two per cent? That’s a very shabby way of presenting his case.

The conference board goes on: “The construction industry is forecast to decline by nine per cent this year, the largest drop in activities since 1961. In 1980, the goods sector will display a decline in activities” -- and I want the minister to listen to this -- “as the manufacturing sector, which accounts for approximately 75 per cent of the goods produced in Ontario, is forecast to produce some 2.5 per cent less in real terms than it did in 1979. This represents an upward revision in the last forecast but only because 1979 now appears weaker. In 1980, the manufacturing weakness will not be concentrated in a few industries as in 1979. The majority of manufacturing industries, textiles, clothing, wood, machinery and electrical products, to name a few, will suffer from a drop-off in domestic and foreign demand.”

So it’s not just foreign demand and it’s not just domestic demand, it’s both, and that is serious. “The overall number of additional jobs created will diminish to the lowest level since 1962.” The minister should be thinking about those figures, because they are very serious, and not continually fall back on simple glib clichés about how hopeful we are.

I was struck by the comments about Ontario in relation to the national output as a whole. I went through the conference board material. I looked at the gross domestic product at factory cost for Ontario which is 9.6 per cent but for Canada as a whole is 10.6 per cent. We are below the national level. For real domestic products, it is 0.8 per cent for Ontario and 1.6 per cent for Canada as a whole, or twice as high.

[5:00]

I look at employment; it will grow by 0.8 per cent in Ontario but by 1.4 per cent in Canada as a whole. Only Manitoba will have a slower growth rate than Ontario. I think that says something about the management of Manitoba as well.

This year the Treasurer, in making his opening statement, said there are 170,000 more people working in Ontario this year than a year ago. Isn’t that fine? If he thinks his government is going to be judged on what happened between 1978 and 1979 and people will ignore what’s about to happen in 1980, he is sadly mistaken. The conference board predicts only 30,000 net new jobs in 1980. That figure terrifies me. A few months ago they were saying 10,000, and they revised that upwards to 20,000. I tell the Treasurer that I hope they are wrong with that 30,000. What does that mean to us? It means a great deal.

In terms of our labour force, only Quebec, Manitoba and Nova Scotia will have a slower growth rate. In terms of the unemployment rate, British Columbia and the Maritimes are the only ones that will have higher rates than Ontario. In average weekly wages and salaries, only British Columbia will have a lower growth rate than Ontario.

The conference board puts a great deal of stake in its credibility, and I would like to know some of the Treasurer’s figures in that regard. We think it’s unacceptable to be faced with even the possibility of that kind of projection and not have the Treasurer presenting us with programs to anticipate this kind of problem with unemployment in Ontario. I don’t know what his programs are. We are not talking simply about programs in terms of make-work projects or work projects in the public sector. We are talking about jobs in both the public and the private sector to create new and real wealth in this province.

I don’t know what the Treasurer has in mind. We would certainly like to hear from him. We New Democrats are always talking about manufacturing and resources; not just service jobs and not just public service jobs.

Hon. F. S. Miller: You sound like the CPR.

Mr. Laughren: No, no. I am not the CPR; I do have plans for the CPR, though.

Manufacturing and resources, we think, are the key -- not that transportation is part of the manufacturing that we would like to talk about. But we are worried about the manufacturing sector. Look at manufacturing as a percentage of total employment in Ontario. In February 1967, manufacturing represented 33.2 per cent of all employees in Ontario. Ten years later, it had dropped to 26.3 per cent. In September 1978 it was 24.9 per cent. In September 1979, it was 25.4 per cent, an increase from 1978 to 1979 but still considerably less than 1977 or 1967, in particular.

There has been a slight blip on the scope in manufacturing employment in the last year. But the Treasurer shouldn’t deceive himself, us or the public at large by pretending that means the manufacturing sector is healthy. That is simply not true.

Look at the deficit in manufactured goods. To me, that’s a very critical figure. It has implications regarding our resources, balance of payments and so forth. I picked up a newsletter that was sent out by L. R. Douglas, who is vice-president of Canadian General Electric. Mr. Douglas was chairman of the export committee of the Canadian Manufacturers’ Association through most of the GATT negotiations, and latterly was chairman of the trade policy committee of the Canadian Business and Industry International Advisory Committee; so he has obviously immersed himself in the whole question of manufacturing activities. This is what Mr. Douglas has to say:

“Canada’s trade deficit in manufactured goods amounted to some $12 billion in 1978. At the present rate, this year’s deficit will approach $17 billion.”

Those figures jumped off the page at me. He is predicting we go from a $12-billion deficit in 1978 to a $17-billion deficit in 1979. That is more than a 40 per cent increase in the deficit of manufactured goods in one year alone, in one year alone. I think that is simply outrageous.

I dug up some figures on this year to date that make me think Mr. Douglas is absolutely correct. These are on the manufactured goods balance; they are Canadian figures, but the heart of manufacturing is in Ontario. In 1976, we had a deficit of $10 billion on manufactured goods; in 1977, it was $11 billion; in 1978, it was $12.3 billion. In 1979 -- in case you think Mr. Douglas is exaggerating -- from January to August, which is eight months, or almost two thirds of the year, we have a deficit of $11.8 billion. If you round that off to $12 billion -- which is easier for my mind to do -- then you come up with a figure of an $18-billion deficit for 1979.

Let’s be cautious. A $17-billion deficit on manufactured goods, up from $12 billion last year, is unacceptable. Ontario has the most to lose. Yet the Treasurer will sit there and assume that invisible hand in the marketplace will resolve the problem. That is living in a fool’s paradise.

That is completely unacceptable to us. With that deficit, the Treasurer sits there and is a complicit conspirator with the Minister of Industry and Tourism as he trips across the province talking about global product mandating. I have never heard such nonsense in all my life. Do you know what global product mandating assumes, Mr. Chairman? It assumes we have the manufacturing infrastructure here already; that we can go out there and compete on world markets. We are not even meeting the domestic demands. How in the world can we be a global product mandator if we can’t even meet our domestic demands?

The Treasurer should know that, for heaven’s sake; he should stop all that silly nonsense the Minister of Industry and Tourism is trying to pull off. The Treasurer is part of it, and he should know better. I have always had a sense that the Treasurer of a province or any jurisdiction should somehow remove himself from that kind of nonsense and deal directly with the people on the problems in the economy, and this Treasurer has fallen into the trap.

The real problem with this government -- and the Treasurer exacerbates the problem because he thinks small; that is the problem, the more I think about it. He has read Schumacher’s book, which says small is beautiful. Who am I to argue with small not being beautiful? But I want to tell the Treasurer, that too is a fool’s paradise, given the world we live in out there.

Hon. F. S. Miller: A thing of beauty is a joy forever.

Mr. Laughren: The Treasurer is not running Santa’s Village, is what I am trying to tell him. He has to start thinking bigger. The problems are bigger than that, and he has to start coming to grips with that.

Does the Treasurer know what he is like? I don’t want to personalize this, Mr. Chairman, but the Treasurer is like a mechanic: He sees a car that needs a ring job so he cleans --

Mr Peterson: He turns back the odometer.

Mr. Laughren: Yes, he turns back the odometer, or he cleans the plugs. That’s what he does. He is not dealing with the enormity of the problem. I am optimistic about the potential for Ontario’s economy, but not if the Treasurer sits back and lets the invisible hand look after things.

Until the Treasurer faces the fact that there are structural deficiencies in the Ontario economy, we are not going to solve the problem. Until the Treasurer is prepared to deal with the whole question of foreign ownership in the Ontario economy, we are not going to solve that part of our problem. Until the Treasurer is prepared to say we are going to rebuild certain sectors of the Ontario economy, we are always going to be in trouble.

We’re just not getting good government. The Treasurer is not doing his job. I hate to be so blunt to the Treasurer, but I really feel I have an obligation to do so.

This is not just me speaking as an opposition critic, Mr. Chairman. I wouldn’t want you to think that. When was the Treasurer made Treasurer? Was he Treasurer in the fall of 1977? No. Then just before he became Treasurer, Ontario made a submission to the government of Canada while the GATT negotiations were going on. I’m very worried about the Treasurer’s thinking that only I would think this and maybe take advantage of him. This is what Ontario’s submission included: “Ontario believes that the economic climate will continue to be sluggish into the 1980s and that, consequently, there is an urgent need for policies which will focus upon stimulating the development of internationally competitive industries. The federal adjustment proposals have not tackled the root causes of the problems facing Canadian manufacturers today -- problems which will only be worsened with free trade -- but instead have concentrated on industries and regions expected to decline.”

The Ontario government commission gave evidence of the structural imbalance they talk about. They talked about the deindustrialization of Ontario, the decline in international competitiveness that has led to a deteriorating merchandise trade performance and erosion of technological strength and capability in the manufacturing sector.

Then they go on to say: “Within the manufacturing sector, Canada’s position as a net importer of medium- and high-technology products has worsened considerably. Since 1970, Canada has experienced growing deficits in 18 or 19 higher-technology industrial product groups identified by the Science Council of Canada as vital to the maintenance of a viable industrial base. The overall deficit in these product classifications of $7.9 billion carries significant implications for Canada’s balance of payments.”

That’s the understatement of the decade. Finally, this Ontario body says what Ontario’s role is. “Ontario recognizes that the provincial government has a role to play in alerting its manufacturing industries to prepare for an increasingly competitive international trading environment. Import-sensitive firms will have to step up innovation, increase specialization, improve their domestic and international marketing channels and work to reduce costs and increased productivity.

“While Ontario will not shirk its responsibilities to its manufacturing industries, the province would stress that the program’s resources and the influence of the government of Canada, particularly in fiscal and competitive policies, are such that the federal government will have to assume the major responsibility for an assistance program to aid manufacturers over the multilateral trade negotiation adjustment period.”

That’s Ontario’s submission. It is a very frank and forthright statement to the federal government and much more frank and honest than the Treasurer is being with us or with anybody else in the province. I’d like to know what Ontario is doing. I think that analysis is correct about the Ontario program, but that’s two years ago. What has Ontario done since then? I’d like to have the documentation. Would the Treasurer table that? What has he done to maintain his promise that his government would not shirk its responsibility to Ontario’s manufacturing industries?

I know the Treasurer will know better than to stand up and say he created the Employment Development Fund, because that is not rebuilding the key manufacturing sectors in Ontario. Like my colleague from London Centre (Mr. Peterson), we can get into the Employment Development Fund in some detail later.

I’d like the Treasurer to stand up in his place, when he replies, to talk to us about the problems he sees that will ensue from freer trade and that will flow from the GATT negotiations, because we’re not satisfied with the answers we’ve received from the Treasurer and, as a matter of fact, from the Premier as well. These estimates are going to be going on for a month or so. I’d put some very specific questions to the Treasurer and hope he would respond.

[5:15]

One of the big advocates of freer trade is the Economic Council of Canada. I’m sure John Crosbie will appreciate them. This is what the council said as its number one recommendation:

“We recommend that in order to shift Canada’s industrial structure away from highly protected, labour-intensive and standard-technology activities in which comparative advantage clearly lies with the Third World countries, the federal government agree with the relevant provinces on the establishment of an industrial adjustment and redeployment fund and the creation of a comprehensive joint regional development strategy to be put into force as soon as possible.”

They also recommend that “the total expenditures of the fund be fixed at $4 billion spread over a period of approximately 15 years and that the life of the fund and related institutional machinery be terminated at the end of this period as settled by legislation in advance.”

The Economic Council of Canada based those figures on the assumption that 250,000 workers would need to be redeployed. That was its projection.

I would like to put some very specific questions. If the Treasurer doesn’t want to answer them, we will come back to them again and again until he does.

Question number one: Does Ontario agree with the economic council’s position of the need for that redeployment fund and the amount involved and the number of workers? What has happened since the GATT negotiations were concluded? What is the federal government prepared to do to work with Ontario to ensure there is not undue hardship on Ontario industries and its workers? What will the cost be to Ontario? What negotiations have been held with the federal government in this regard? Would the Treasurer table any correspondence or other documentation? This is assuming he supports his colleagues in Ottawa’s freedom of information bill.

Question number two: What about those 250,000 jobs? What proportion of them will be in Ontario? Which sectors will they be in? Who is monitoring what is happening now that the negotiations have been completed? Where will these people be employed if they are redeployed? What negotiations or plans have been made with the federal government? What are Ontario’s plans? Would the minister table any documentation or correspondence in that regard?

Question number three: If redeployment is to occur, what kind of schedule is in place? How soon will the impact of the trade negotiations he felt? Is the 85-86 per cent capacity of manufacturing industries a problem in redeployment? The Treasurer talks about manufacturing being 85-86 per cent utilized, and he seemed to think that is very good. We know you cannot have 100 per cent because of any number of problems.

Does that utilization figure of 85-86 per cent create a problem in terms of other industries absorbing the people who will be shifted from industries hurt by the GATT negotiations? Have successor industries been selected in this redeployment program? Where is the capital to come from? What about regional development? Will redeployment be used to alleviate the present regional under-development in Ontario, particularly in the east and in the north? What about the retraining of workers? Has the Treasurer thought about retraining a lot of these workers, particularly workers who are 50 and over? What kind of program is he putting in place for them? What kind of sharing will there be on retraining? Will the federal government share those retraining costs? What about the obligation to the private sector? What has been done about that? Would the Treasurer table any documentation or correspondence he has in that regard as well?

We know the GATT negotiations are complete, and we know the Treasurer did not negotiate the terms of the agreement. We understand that. But we think he has an obligation to react in a very aggressive and positive way since those negotiations are complete.

We are worried about several sectors. I mentioned textiles. Some people seem to think that textiles and clothing were not affected at all by the negotiations when they were -- particularly the man-made fibres. We know that.

Machinery is a major concern. We know we have a deficit of about $4 billion on machinery. It is not very surprising. I was reading a Machinery and Equipment Manufacturers’ Association of Canada document. After the GATT negotiations were concluded, this is what Pat Laval, of the Automotive Parts Manufacturers’ Association of Canada, had to say:

“I can see no aspect of gain anywhere for us. Overall, we are disappointed. We are rather more apprehensive and pessimistic about the things that will continue to hurt us on the nontariff side. Further, the proposals advanced for tariff redirection in the Canadian automotive sector are not reciprocal in that they do not provide the Canadian parts industry with any increased degree of market access, while at the same time the Canadian market is being further exposed to import competition.”

That was the Automotive Parts Manufacturers’ Association of Canada. It may not be the result of the GATT negotiations, but look at the shambles our balance of trade is in with the auto pact right now. Yet this government doesn’t even refer to it. When the Treasurer brings down his opening statement, he makes no mention of the real problems facing Ontario.

I think it was the Treasurer or the Minister of Industry and Tourism who, when the GATT negotiations came down and they were talking about machinery, expressed happiness that Canadian companies now would be able to buy machinery more cheaply. Isn’t that a sophisticated response? In fact, what it is going to do is increase the deficit on machinery, which is already unacceptable at $4 billion a year. That’s no kind of response to make. How is that going to rebuild the machinery industry? It is a key industry -- it should be a key one for Ontario -- and that kind of response should be made.

I’ve got another question for the Treasurer; it’s number four. What is the long-run projection for jobs and deficits in the auto parts trade with the United States? Does the reduction in tariffs, from 15 per cent to 9.2 per cent, mean more production in the United States and the product simply being sold here?

Has the Treasurer had any meetings with the automotive parts manufacturers’ association and the industry to resolve the problem? If so, when? Could he tell us the results, and could he table any documentation?

Question five, concerning machinery and a similar drop in tariffs, from 15 per cent to 9.2 per cent: What are the projections here for deficits and for jobs? How will Canada benefit if we don’t have the machinery to export in the first place? How can we turn around that really critical $4-billion deficit? What plans does the government have, if any, to deal with the machinery sector?

Before I leave the issue of freer trade, I do want to express concern that the Treasurer will regard the results of freer trade as just one of those things that shakes things down and guarantees efficiency, makes inefficient industries go under, forces us to take advantage of what’s known as the law of comparative advantage, and concentrate on industries that we’re strong in.

That’s the traditional Adam Smith kind of thinking. It really worries me if these are what the Treasurer’s views are. It’s our view that the Treasurer simply has to get involved in this whole question of readjustment as a result of the GATT negotiations.

We know that freer trade means 80 per cent free trade with the United States and 90 per cent with our tariffs below five per cent. That’s virtually free trade. We hear arguments that our industrial tariffs are averaging nine per cent to 10 per cent, and that puts us at the highest level of industrial tariffs in the world. But we also know that we have the highest volume of duty-free trade in the world as well. It’s 63 per cent now, and it’s going to go up to 70 per cent as a result of these negotiations.

These aren’t just my opinions. There was a fellow by the name of William Cline from the Brookings Institute in the United States, where I’m sure the Treasurer has been invited to speak on numerous occasions. He did a study on who would gain and who would lose from freer trade. He gave Canada a plus score of 62 per cent, compared to 80 per cent for the United States and 96 per cent for the European Economic Community. He saw Canada as gaining less.

More specifically, if we moved towards freer trade, he predicted Canada would lose 45,000 jobs as a result of imports, particularly in the following sectors: machinery, transportation equipment, chemicals, base metals, precision instruments, plastics, rubber and textiles.

One word of caution: When Mr. Cline did that study, he was assuming a bigger reduction, not a complete reduction, but elimination of tariffs in sectors. Nevertheless, there has been a substantial reduction, and we should think about that problem.

There are a number of actions I would like to suggest the Treasurer take. I know he wouldn’t want me just to stand up and criticize. He would want me to be specific about what I thought he should do. I think that’s fair game; so I will be specific. This is what I’d like the Treasurer to do and, if he needs my advice, I’ll be prepared to give it to him.

First, I think he should prepare detailed plans for rebuilding particular sectors. I’ll name these somewhat arbitrarily. If the minister has others which he thinks are more important, I’m very flexible. These are machinery in general, particularly things like pollution control machinery, food processing and electrical products. That’s number one, namely, to prepare detailed plans on rebuilding particular manufacturing sectors.

Second, he should insist on Canada’s fair share under the auto pact. This year we’re going to have a $3-billion deficit -- probably a little more than that -- in the auto pact. We find that unacceptable. I don’t know whether the Treasurer was in the House when we asked the Minister of Industry and Tourism about it a week ago. I was appalled with his answer. His words were to the effect, “What do you mean by free trade?” I guess he hadn’t read the Ontario government’s submission back in 1977, I think it was, which dealt with free trade. They gave their definition of free trade. What did he mean standing up here as a flimflam man and telling us that he didn’t know what free trade is? When we’re talking about fair share, we mean in terms of the balance of trade, research and development, skilled jobs and new investment in this country.

Look at General Motors. They made a big production about announcing a $2-billion investment in Ontario. Basically, their investment in Canada is in Ontario. They’re making a $38-billion investment in total by the year 1985. We don’t think $2 billion is a fair share of that investment.

They talk about the Big Three, which plan to spend $60 billion by 1983. Do we want to use market shares as a criterion? We should be getting more than $5 billion of that. Do we want to bet we get it? The Treasurer knows we won’t get that much, unless he knows something I don’t -- and that’s highly unlikely. That works out to about $650 million a year. In the 1970s, we got about $80 million a year. The Treasurer should insist we get our fair share. We have a little deficit on vehicles, but on auto parts alone the deficit this year is going to be more than $4 billion. We think that’s outrageous.

Unlike the Treasurer, I think we’ve got leverage. The Treasurer, the Premier and the Minister of Industry and Tourism, that incredible triumvirate, think we have no leverage. That’s why they’re getting defeated at the bargaining table year after year. We have leverage. We have a very lucrative market. We are a very important part of the North American automobile market. As a matter of fact, we’re a more lucrative market than the one south of the border. If you don’t call that leverage, I don’t know what is. There are other alternatives as well. That’s the other suggestion I have for the Treasurer.

The third suggestion is that government procurement policies be implemented that are aggressive and selective. Currently, the Ontario government has a preference of up to 10 per cent. But the government presides over this policy with benign neglect. There is no better evidence of that than the Grumman Reed purchase in Peel. Does the Treasurer recall that? Does he recall the Peel bid on tenders for a waste recovery plant? The only company bidding was Grumman Ecosystems, a huge American company.

[5:30]

There are Canadian companies that didn’t even bother to bid. Even though the Ontario government is putting $10 million into the program, the government sat there and let the one bid take place. What kind of competitive bidding nonsense is that? Does the Treasurer call that a government procurement policy? That is outrageous, simply outrageous; yet the government sat back and let it happen.

I read a federal government study on procurement policy, in which they selected one category; I believe it was called communications equipment. They looked at that and said, given all the factors involved, you could have -- and this sounded high to me when I first read it -- you could have a procurement advantage of 76 per cent, and it would still pay you to buy Canadian with that product. They said that because it must be labour-intensive; it must be high-technology; the government must be a large buyer; there must be a high Canadian content of the parts that go into it; and it must be in the wealth-creating sector such as manufacturing.

When we do that, the spin-off benefits are enormous. My colleague from Downsview (Mr. di Santo) raised this in the Legislature; my leader raised it in the legislation; it was raised in the estimates of the Ministry of Industry and Tourism last week. Mr. Chairman, do you know what that incredible minister said? He said, “Are you saying the taxpayers should pay 76 per cent more?” What kind of response is that? He didn’t know what he was talking about, and he was just trying to cover up with that kind of nonsense.

That was an area where it was a good sector; it was a great future in the waste recovery field, and it would have given the Canadian companies a foothold in an industry of the future. If any one company in Canada couldn’t put together the necessary expertise to do it, this government had an obligation -- and this is where we differ from the Tories -- this government had an obligation to say to the three companies that were capable of doing some work on it, “Tell you what: We will help you form a consortium to do this.” That is what we have to do. If we just sit back, we are encouraging the status quo; we are exacerbating the problem. What is the sense of having a government procurement policy that is not active but accepts the status quo?

Why didn’t either the Minister of the Environment or the Minister of Industry and Tourism -- or even the Treasurer if they insist on not getting involved -- say: “Hold the phones. We are not going to allow one bid from an American company get this, there must be Canadian companies that can do this job. And if one can’t, we will work with you to ensure that that job is done here in Ontario or some place else in Canada.” What a sad joke for a procurement policy the government has.

The fourth thing I wish the Treasurer would do is reduce foreign ownership in the Ontario economy. The Treasurer and I may have some common ground on some of the issues I have talked about today or will talk about. But I suspect on this one we are poles apart. I know the Treasurer sees and thinks that there is a need for capital out there, supposedly to create jobs and to pay for our deficits on the current account. What we say is that either we reverse this trend of selling out our wealth, or we guarantee ourselves that we will be perpetually on a treadmill of ever-increasing current account deficits, which can only be paid for by selling out more of our wealth. That is a treadmill, and we want to get off it. Even a casual examination of the figures shows that this is true. In the last five or six years the problem has become increasingly serious. It is not just the fervent nationalists who are talking about it and are worried about it.

In my casual reading I picked up a document from a company called Pitfield, Mackay, Ross. It may be the broker for my colleague from London -- who knows? Pitfield, Mackay, Ross is expressing some concern about what is happening as well. I quote; this is dated August 1979. “Over the last decade the deficit of manufactured goods trade has risen from $3 billion to $13 billion” -- they are using $13 billion -- “primarily on account of import growth.”

Do you hear that, Mr. Treasurer, import growth? You don’t think import replacement is the answer; you think global product mandating is. That’s a laugh.

Pitfield, Mackay, Ross goes on: “It is interesting to note that the merchandise trade surplus had stopped growing and began to decline prior to the most recent slowing in the US economy. Additionally, the evidence is that large-scale devaluation has produced no measurable improvement in our overall trade balance.” Think about that, if you will, Mr. Treasurer. “Further, our projections anticipate sharply-reduced merchandise trade surpluses this year and next, in response to the US recession. We would point out that these estimates are quite a conservative measure of the difficulties that can materialize on merchandise accounts.

“Historically” -- get this -- “US recessions have produced actual deficits in the Canadian merchandise trade balance.” That means not only is our service deficit going to be growing like crazy, we are now going to have a deficit on our merchandise account. What are you going to do then? Sell off more; that’s what you will do because you are bankrupt of policies on economic self-determination. You are nowhere. You have nothing to say on it.

Finally: “The large and rapidly-growing deficit on service accounts presents a more fundamental problem than do the merchandise account difficulties. The service account is not at all amenable to large or rapid improvement. Foreign borrowing and interest payments are the driving forces behind the service account problem.” Well, we knew that.

“The exceptional levels of foreign borrowing required to finance both the current account deficit and a large-scale flight of capital are having a predictable impact on foreign indebtedness. We estimate that outstanding foreign debt had risen to $43 billion at the end of last year, compared to $20 billion three years earlier and $14 billion five years ago.

“The debt-service burden associated with this borrowing has been rising exponentially. Interest payments last year amounted to $3.4 billion, compared to $1 billion five years ago.

There are lots of statistics to indicate what is happening to our economy and those are just some of them.

I will give you services account balance alone -- just services. In 1974 it was minus $3.7 billion, and the prediction is $9.6 billion for 1979 and over $10 billion for next year. That is services alone. That has to be paid for and you know how it is paid for: by selling out even more.

Those are Pitfield, Mackay, Ross figures. Fry Limited figures are even more frightening. As a matter of fact, when I read the Burns, Fry figures I thought, “You can’t even have economic and social stability if those kinds of figures are ever realized.” I am talking about what they produced last year. The Treasurer had better be thinking about that.

There is one other ominous sign that bothers me a great deal and that is the whole impact of oil-price increases on our balance of payments. Ontario is the economic heartland of this country and we should be very worried about it because -- let’s face it -- every dollar that goes to the company with the oil price increase goes to one of two places. It goes into new investment -- and that is going to demand a return in the future -- or it goes, in the form of profits or dividends, back to the almost entirely foreign owners.

I can see an increase problem with the increased price in oil and gas. It is going to increase our foreign indebtedness, either in the form of dividends in the future or in interest and dividend payments today. It will be one or the other; there is no other place for it to go.

What is Ontario’s response to this problem? It is approval of virtually every application that comes before the Foreign Investment Review Agency. It approves virtually everyone, including the ones in the high technology areas. You should really be ashamed of that. Don’t tell us it creates jobs.

I was looking at figures for just the last five years -- from March 1974 to March 1979. Does the minister know how much has gone out of this country in interest and dividend payments? It’s $18.2 billion. That is not a figure I am proud of. The Treasurer sits over there along with the Minister of Industry and Tourism and they approve virtually every application before FIRA, whether it’s a new investment or whether it is a takeover of an existing one. It’s the lack of selectivity; it’s just a virtual blank cheque. Let them fill it in, it doesn’t matter.

The Minister of Industry and Tourism sent me over the form they use when they are evaluating whether or not they should approve a new takeover or a new investment. It’s like a form one would give a group of grade seven students on a field trip. Did they see any dogs; did they see any groundhogs; what did they see? It’s silly and it doesn’t do an analysis of the impact on the Ontario economy at all. It’s a total and outright copout.

It is outrageous to sell off our future that way, because that’s what’s happening with the high technology goods, but the Treasurer doesn’t seem to understand that. We’re just going to have to run faster and faster simply to hold our own as the years go by.

The other thing that ties in with that is the interest rate policy. It is madness. The Treasurer supports the high interest rate policy of the federal government.

Hon. F. S. Miller: I never did.

Mr. Laughren: We didn’t object to it. And the Minister of Industry and Tourism said, “It’s one of those things we have to live with in the short term.” I have a speech he made indicating this. I presume the Treasurer wouldn’t disagree with his good friend and colleague the Minister of Industry and Tourism, so I have to make the assumption that he agrees with it as well.

We know the theory behind it -- about paying for the current account deficit and so forth. But the higher the deficit, the more money we are going to need to attract. In order to attract all that we need a higher interest rate and the higher the interest rate differential will have to be with the United States. It’s stupidity beyond belief.

Let me say in more specific terms what I think the minister should do. I know there are ramifications in my suggestions; I am not that silly. But I am saying he should fight for lower interest rates first of all. If we won, we know what would happen. Imports would cost more because the value of the Canadian dollar would drop. If the Treasurer sees a flaw in my logic I wish he would tell me.

There will be fewer imports therefore. Because of fewer imports we will start to rebuild our domestic industries. As we rebuild those key sectors we will start to meet domestic demand for those products and that will reduce imports.

Then, as we build up those domestic industries we develop the expertise and the economies of scale and the first thing we know we are breaking into world markets. Then he can say with some legitimacy we believe in global product mandating because we think now we can compete on world markets with these exports. That is what the Treasurer should be doing. At the same time he reduces the dependency on foreign capital. That’s my fourth suggestion.

My fifth suggestion to the Treasurer is that he examine very carefully -- obtain independent and objective opinions and make them public -- a report on the role of the public sector in the economic development of Ontario.

[5:45]

The Treasurer is an avowed free enterpriser, but I suspect even he understands that there is a role for the public sector in today’s world. I suspect the Treasurer agrees with his Premier, for example, that Petrocan should stay in place. I suspect the Treasurer doesn’t disagree with the Premier in that regard. Surely the Treasurer would agree that blind, dogmatic, sectarian ideology has no place in the decision-making process necessary to reinforce and rebuild the Ontario economy.

We New Democrats say to the Treasurer that for social and economic reasons there is a critical role for the public sector in economic development in Ontario. We have been saying for some time -- and I know this won’t surprise the Treasurer -- that the resources belong in the public sector.

Saskatchewan provides a model of how government and the private sector can work together. The revenues from the resource sector are enormous and quite frankly they make Ontario’s revenues look sick. Exploration in Saskatchewan is many times that of the exploration going on in Ontario now. In September, the Financial Post held a conference on Saskatchewan resource development -- I think there were something like 600 people attending the conference. The private sector there expressed some very positive views on working with the public sector. They said that once you know the rules of the game, it’s fine; they were really quite happy. And the revenues are flowing into the Saskatchewan government.

This government prefers what they would regard as purity of free enterprise. I think it’s the poverty of free enterprise, when I think of resources. That blindness the Treasurer has cost us millions of dollars in resource revenues. It costs us thousands of jobs. It causes a boom-and-bust economy in resource-based communities in the north and we still have no strategy at all.

We allow our iron ore mines to be closed out while we import our iron ore. We allow large companies to stockpile nickel and then precipitate a strike while they work on their inventories. We allow the resource industries to extract the ore until it is depleted, then shut down and virtually steal off into the night, leaving a town to fend for itself. We allow resource companies to export the raw material for processing elsewhere. That costs us thousands of jobs.

We allow resource companies to invest $1 billion in other jurisdictions. That’s money that was earned here and we continue to receive a pitiful amount of revenues from the resource sector; I think it’s less than $40 million and there’s $2 billion worth of minerals extracted in Ontario.

Mr. Chairman, I am telling the Treasurer that we need public-sector involvement in the resource industries. It simply has to come because the present state of affairs is costing Ontario too much in the loss of revenues, thousands of jobs and a more industrialized economy. The Treasurer can take comfort, if he likes, in the assurances of the Ontario Mining Association, the Canadian Manufacturers Association, the chamber of commerce and the Rotary Club, but he’s fundamentally wrong in leaving the resources in the private sector.

There are other areas. I don’t want to just dwell on the resources, but I will tell you something. The summary for me -- the way I think about it, at least, and the way this party thinks about it -- is that you don’t find us running around saying we would bring every conceivable operation into the public sector. We are very thoughtful about it. But if the private sector abandons an industry, or a sector, or neglects it, we think there’s an obligation for the public sector to move in, close that gap and rectify the problem. That’s what we believe.

I will give you, as an example, the aerospace industry. When the federal government bought de Havilland -- I guess it was in 1974 -- it was too risky an industry for this country -- an industry, not just a company but an industry. Other countries realize that. Every country has public involvement in the aerospace industry except the United States and they have put so much public money into it they virtually have a stake in it as well.

Canada must remain a presence in the aerospace industry. If the federal government insists on disposing of de Havilland, then the Ontario government has an obligation to step in and be prepared to buy it to ensure we retain that sector here in Canada. To us it is important that there be a public presence in the aerospace industry, because of the engineering research, the jobs, the skills, all the research and development that spin off benefits into other sectors. And they’re spun off into other critical sectors, too -- mass transit, pollution control, industrial machinery, electronics, and all the spinoff benefits in industries that live off the aerospace industry. There are only 4,800 employees at de Havilland, but that company alone supports about 10,000 because of contracting out to other companies.

It would be very nice to have government leverage when it comes to negotiations, such as are being conducted right now over the new fighter aircraft. We think the de Havilland company is especially critical. It is a world leader in its field. It is a successful company. It had the infusion of public money already -- $38.8 million the federal government paid for it -- and it has put another $89 million into it for development of the Dash 7 alone.

Mr. Williams: Why don’t you support the Dash 7?

Mr. Laughren: We do support the Dash 7. De Havilland is a world leader in the development of STOL aircraft. It has an exciting future and we must not let it be sold to the likes of Boeing or even to the Alberta heritage fund, which was a rumoured purchaser for heaven’s sake. It is important to Ontario. The federal government is not prepared to extract any guarantees at all from any potential buyer -- on research and development, on jobs in Ontario, on including the further development of the Dash 7.

Maybe the Treasurer could stand in his place and tell me if he agrees we should just let de Havilland be sold without any guarantees on Canadian ownership, or on research and development expenditures, on technical excellence, on jobs. It is very strange the Treasurer will go to that degree to support his colleagues in Ottawa.

The third example of the need for a public- sector presence is in mining machinery. I have a passion for mining machinery. The private sector has chosen to neglect it. We are second in the world in mineral production; we are third in the world in consumption of mining machinery; and we are first in the world in importing mining machinery. We simply have to correct that.

Ninety-one per cent of the mining machinery industry consumed in this country is imported. That is a $400 million market. If the private sector neglects an industry like that, one that is so critical -- we have a domestic market here -- that argument can’t be used. Much smaller countries have surpluses on mining machinery, countries that don’t have our resource base. Yet here we are with an enormous deficit in mining machinery. That is simply a disgrace. That the Treasurer can sit there and let the invisible hand of the marketplace look after that problem leaves me cold. The Treasurer also should not forget this deficit on mining machinery contributes to that enormous debt on manufactured goods.

There are other examples, but at this point I would like to ask the Treasurer some very specific questions. This is question number six in case he has lost track. What plans does the Treasurer have to increase revenues from resource extraction? Does he intend to leave the processing exemption in place for Falconbridge?

They’re having a very good year this year; they’ve had more than 45 years in Sudbury without a refinery.

What about the iron mines? Does he intend to allow the private sector to continue to close iron ore mines while importing ores from the United States?

What plan does he have for the one-industry resource-based communities in the north?

Does he think profitability is the only criteria for deciding whether or not to close a mine?

What input has he had, as Treasurer, into the cabinet committee on northern communities that was announced by the Premier? Will he provide us some documentation on that?

I think the Treasurer was chairman of that committee at one time, when it was first formed. It was nothing but puffery. The last time we checked it it had never met and that’s about two years ago.

Hon. F. S. Miller: It met many times.

Mr. Laughren: If it did meet, would the minister table the minutes and tell us what went on? Nobody else knew it had met, that’s very interesting.

Hon. F. S. Miller: It was a cabinet committee. I chaired many meetings.

Mr. Laughren: That’s your ultimate out, isn’t it? Yes. I’ll believe that when I see the minutes.

Concerning the aerospace industry and de Havilland in particular, does the Treasurer agree with his Premier and the Ministry of Industry and Tourism that it’s just fine for the federal government to sell de Havilland with no guarantees of any kind? What representation has he made to the federal government on guarantees to protect jobs in Ontario?

Will the Treasurer assure us he will be part of any negotiations to dispose of de Havilland? Will he assure us that he will not allow it to be sold to foreign interests? Will the Treasurer assure us that it will not be sold to anyone without a guarantee that the funds will be provided to proceed with development and production of the new Dash X -- I think there’s another name for it and I’ve forgotten it -- the new 30-seat STOL aircraft.

On this particular matter, could the Treasurer confide in us in this chamber to how the Premier could assure us there’d be guarantees when the federal government said there’d be none? How did the Premier stand in his place one day during question period and tell us there’d be guarantees to protect Ontario jobs when the federal minister, Mr. de Cotret, said, “There will be no guarantees”? Perhaps the Treasurer could sort out that seeming inconsistency between Ottawa and Queen’s Park.

Eight: Regarding mining machinery -- I’m almost finished -- does the Treasurer think it appropriate for us, a world leader in mining, to be number one in the importing of mining machinery? Is the Treasurer aware that in a recent trade show in Sudbury, only about $40 million of equipment was represented, out of a potential market of $400 million? Will the Treasurer assure us that the private sector will be told to either produce their machinery domestically or go into joint ventures with the government?

If the private sector fails to fill this disgraceful gap in the machinery sector, will the Treasurer undertake to put in place a crown corporation that will do it? Would the Treasurer not agree that a mining machinery complex in the north would reduce regional disparities, reduce the deficit of the current account, provide thousands of jobs, and reduce the dependency of places like Sudbury on their mines?

Mr. Chairman, I’ve asked the Treasurer eight specific questions to which we expect answers. I have put forth to him specific economic suggestions or strategies. We shall pursue some of them in more detail as we proceed through the estimates debate but we are very serious about our suggestions and we expect more than the traditional bland assurances from the Treasurer.

On motion by Hon. Mr. Gregory, the committee of supply reported progress.

The House recessed at 6 p.m.