The House met at 2 p.m.

Prayers.

STATEMENTS BY THE MINISTRY

AUTO DEALERS BANKRUPTCIES

Hon. Mr. Drea: Mr. Speaker, last week I was asked a question regarding two automobile dealerships in the Ottawa area. At that time, I promised to look into the dealerships to determine if any deposit money was involved.

Orleans Chrysler Dodge is indeed bankrupt. However, there were no customers of that dealership who did not receive a return of their deposit.

Parkway Chrysler, on the other hand, is not bankrupt but in receivership. This distributorship was inspected in February of this year by my staff, and at that time the trust account was properly designated, and the registrar of the Motor Vehicle Dealers Act put the dealership on notice to keep trust account entries current. There was $17,519.26 in the account at that time.

The bank and the receiver have been put on notice that the trust account is not to be touched until they receive directions from the registrar.

I want to emphasize that we have no record of any complaints concerning the deposits. However, an inspection of the books of account will be carried out shortly to ascertain the trust account liability. When this is known, arrangements will be made to return deposits to the customers or to have the vehicles delivered to them.

It is the common practice, if there is any remaining money in the trust accounts that is not claimed, that it is turned over to the receiver for distribution for general creditors.

TAX PAYMENT SERVICE

Hon. Mr. Maeck: Mr. Speaker, honourable members are well aware of the government’s commitment to improving services to the public. This, coupled with my belief that government should do business in a businesslike fashion, has led quite naturally to a new taxpayer service program.

Effective May 1, Ontario’s taxpayers may pay their monthly retail sales tax and corporations tax instalments at their local chartered bank. From the taxpayer’s perspective, this optional payment service is essentially the same as that currently utilized in the payment of credit card and utility bills. However, this new service will be provided without any bank service charge to the taxpayer. Moreover, taxpayers will also avoid the postage and mailing costs incurred under the present system.

I wish to stress that the service will be entirely optional. Any taxpayer who wishes to continue to remit tax payments by mail or by personal delivery at any of our offices may continue to do so.

I would like to take a few moments to discuss the mechanics of our new system. In very general terms, the taxpayer merely presents his or her remittance form to a teller at any bank where he or she normally conducts business, along with the appropriate payment. The teller validates the receipt portion of the form and returns it to the taxpayer. The receipt completes the taxpayer’s records respecting the transaction. The funds and information flow through the banking community to the credit of the government in general and the taxpayer’s account in particular.

The system, geared to provide a cost-effective vehicle which would permit taxpayers to fulfil their obligations during the course of normal banking activities, was designed with the help of the Bank of Nova Scotia, the bank chosen through tender to act as the province’s representative in the banking system for the provision of this service.

Honourable members should also note that, while this system was designed primarily for the benefit of the taxpayers, it will have the added advantage of protecting provincial revenue flows from future disruptions in postal services, should they occur.

We will be monitoring the acceptance of this service. If our expectations are met, the option will be offered in other tax programs maintained by my ministry.

In closing, I would like to add that this initiative is an important part of the Ministry of Revenue’s overall plan of customer support and deregulation. I can assure honourable members that I will be reporting from time to time on other ministry endeavours in these areas.

FOREST MANAGEMENT AGREEMENT

Hon. Mr. Auld: Mr. Speaker, I am happy to inform the members that this morning I signed a forest management agreement with Mr. R. C. Gimlin, president of Abitibi-Price Incorporated, covering the Iroquois Falls forest.

This forest area in northern Ontario, northeast of Timmins, is the source of most of the wood for Abitibi’s Iroquois Falls newsprint mill. The productive forest area under agreement is 7,352 square kilometres, or 2,839 square miles.

With this initial agreement we have the beginning of a new relationship between my ministry and forest-based companies -- in the first instance, the pulp and paper industry. It means that the government and the industry will be working towards ensuring a continuing production of wood for the betterment of the economy of this province and its people.

As required by the Crown Timber Act, I am tabling today a copy of the agreement I have signed with Abitibi-Price, which also includes schedules and the forest management manual for agreement areas. The management plan and operating plan will be prepared according to the agreement during the next year.

If any member wishes to explore the details of the agreement and the forest management practices involved, my forest resources staff will be happy to make themselves available for discussion and will provide copies of the agreement, as requested.

Forest management agreements with three other companies are nearing completion, and I shall be tabling them in the House as soon as they are signed.

CORRECTIONAL SERVICES SELF-SUFFICIENCY PROGRAM

Hon. Mr. Walker: Mr. Speaker, I would like to report about an absence from the Chatham Jail last week, in the middle of the night.

It is that time of year when a man’s thoughts turn to going fishing; and that’s exactly what inmates and staff of the Chatham Jail did last week. They went fishing along the shores of Lake Erie and enjoyed excellent results. Their catch -- approximately 1,600 pounds of fish -- is a bonus for the jail and other correctional institutions and represents a cost saving under the ministry’s self-sufficiency program, which I announced recently.

Chatham Jail superintendent John Pinder and two of this staff who volunteered for the assignment took four minimum security inmates out smelt fishing last week. During four nights of fishing, they netted approximately 1,600 pounds of smelts. Between 800 and 900 pounds of fish were cleaned by a crew of eight inmates for use at the Chatham jail. It is estimated that this supply will be sufficient to enable the jail to serve fish once a week for the next eight to 12 months. In addition, approximately 500 pounds of smelt were transported to Burtch Correctional Centre, for use by that institution and the Brantford Jail. The remaining 200 pounds of fish were sent to the Windsor Jail.

The whole project was completed at a minimal cost to the jail and the ministry. A total of 22 inmate work days were utilized in the netting and cleaning of the fish. A side benefit is that the fish heads and remains are being used as fertilizer in the jail’s garden, where inmates will grow fresh vegetables for use in the jail’s meals.

2:10 p.m.

I wish to commend the superintendent of the Chatham Jail and his staff on their initiative, and to thank the inmates for their work to ensure the project’s success. This is an excellent example of how ingenuity, determination and hard work can be employed to achieve the ministry’s avowed goals of cost reductions through self-sufficiency. I am pleased to inform honourable members that, in view of the success of this initiative, we intend to continue and expand it next year to include other correctional facilities.

CAISSE POPULAIRE LAURIER LIMITEE

Hon. Mr. Drea: Mr. Speaker, on a matter of correction, and in the absence of the member for Ottawa East (Mr. Roy), on page 1013 of Hansard, dated April 22, there was a notation that we, from the ministry, are looking at a credit union called the Caisse Populaire Vanier Limitée. That is incorrect. The correct name of the institution is the Caisse Populaire Laurier Limitée. The member for Ottawa East and myself attempted to correct the record. For the sake of the record, I would want a correction.

Mr. Speaker: I am sure our Hansard officials have duly noted the minister’s comment.

ORAL QUESTIONS

JAIL REMANDS

Mr. Nixon: Mr. Speaker, I have a question of the Premier that concerns the statement made by the Provincial Secretary for Justice (Mr. Walker) some days ago in which he indicated that in his view, based on a report available to him, there were 17,000 people in Ontario unnecessarily detained. When they came to trial, he said, they were not even in jeopardy of being detained.

I would ask the Premier if he concurs with the statement made by the Attorney General (Mr. McMurtry) in the Justice estimates some days ago when this matter was raised. I quote from page J-1140-1, when I was questioning the honourable minister about the 17,000 detainees:

“Hon. Mr. McMurtry: I can assure you the policy secretariat does not speak for the Ministry of the Attorney General. When we talk about spokesmen, I want that absolutely clear.”

Would the Premier not agree that the indication is that either the Attorney General does not believe these people are unnecessarily in jail or, if they are, he does not consider it his responsibility? Since there is this dichotomy of view, would the Premier not feel that he should enter into this matter since it does relate to something that should concern all of us?

Hon. Mr. Davis: Mr. Speaker, if the honourable member is suggesting that I reconcile, so that he will agree with whatever reconciliation takes place, points of view that may or may not be totally the same, I would be delighted to endeavour to do that. However --

Mr. Breithaupt: The Premier will do it first; then we will try the second.

Hon. Mr. Davis: I am not personally familiar with the exact figures, but if the acting leader of the Liberal Party would like me to check into this further I will make an effort to do so.

Mr. Nixon: I can hardly credit that the Premier is not aware not only that his policy secretary made the statement, but perhaps also that his Attorney General does not agree with it fully and, as a matter of fact, thinks it is asinine, not to put too fine a point on it.

I personally believe that it is the Premier’s responsibility to make a statement in this connection, since those of us not learned in the law believe there are people in jail who should not be there. If we feel the minister’s statement would be a helpful one, would the Premier not feel that, in a matter of this import, it is not sufficient simply to say he is not aware of the controversy and will report later? If that is all he can say, of course, then that is the end of it.

Hon. Mr. Davis: With great respect, that is not what I said. I am quite aware of what the Provincial Secretary for Justice said in his statement. I am aware of what the Attorney General said here in the House in reply to questions on that statement I sensed in those replies that there was some measure of understanding. I am not familiar with the specific words used by the Attorney General in the estimates committee.

What I did say to the acting leader of the Liberal Party was not that I was not familiar with what was said, but that I could not speak from personal knowledge or study of the papers as to whether there are or are not 17,000. What I am prepared to do is to discuss it further with the two ministers to see if some further reconciliation can take place that would be understandable and acceptable to the acting leader of the Liberal Party. I think that is really what I said.

Mr. Warner: Mr. Speaker, since it is quite obvious that there is a profound disagreement between the Attorney General and the Minister of Correctional Services (Mr. Walker), and since the Minister of Correctional Services made it clear that he is not willing to come before the justice committee at the same time the Attorney General is there, and since we are all operating under some cloud of confusion over how many people are actually in jail needlessly, why can the Premier not make a clear statement before the assembly as to the situation in the Ontario jails today?

Hon. Mr. Davis: We then get around to the questions of definition, Mr. Speaker. I might be able to make a statement, but whether the member for Scarborough-Ellesmere would describe that statement as being clear and acceptable to him would be very debatable, because I cannot recall any statement I have made in here that he would have accepted as being clear, definitive or answering the particular question.

Mr. MacDonald: How about a statement reconciling the differences between your own ministers?

Hon. Mr. Davis: I am being interrupted again, Mr. Speaker. What does a fellow do?

Mr. Speaker: I am ignoring them. I suggest you do the same thing.

Hon. Mr. Davis: Mr. Speaker, in your very lofty position, you can afford to ignore them. I would like to be able to ignore them but I cannot totally.

However, as I said to the member for Brant-Oxford-Norfolk (Mr. Nixon), I will endeavour to get some further information for members of the House to the extent I can, and perhaps I will have something further to say on it.

Mr. Nixon: I do not think it requires a full survey of all the figures to respond to the statement already quoted to the Premier where the Attorney General says: “I can assure you the policy secretariat does not speak for the Ministry of the Attorney General. When we talk about spokesmen, I want that absolutely clear.”

Does the Premier agree that the policy secretary, in matters of this moment, does not speak for the Attorney General and, in fact, does not speak for the government?

Hon. Mr. Davis: I think it is quite often the case that a policy secretary may talk in general terms, but when it comes to responsibility for the administration of a system where there is the Solicitor General, Attorney General or any minister responsible for an operating ministry, then the minister obviously speaks for that ministry. I think the honourable member understands the difference. It is not new, or unique, and I do not think that is --

Mr. Nixon: A statement like this is unique.

Hon. Mr. Davis: No, no. I don’t think it is unique at all.

Mr. Nixon: One of these birds is going to have to go.

Hon. Mr. Davis: Mr. Speaker, I expect I will be here as long as the member opposite is there. I have to say to him, if we do not reorganize the Senate over the next few months, he would be a great appointment to that body.

Mr. Nixon: I am in the Senate.

Hon. Mr. Davis: Mr. Speaker, I want Hansard to record that the member for Brant-Oxford-Norfolk says publicly that he is now in the Senate. I would never have described his party that way, but I think it is a very excellent way to leave that discussion.

HAZARDOUS WASTES DISPOSAL RESEARCH

Mr. Nixon: Mr. Speaker, I have a question for the Minister of the Environment. Has the minister followed up on his commitment made on television in Kingston, Ontario, after visiting the plasma arc installation at the Royal Military College, that he would seek additional financing so they could carry on with their development?

Can he indicate further his awareness that this development at the Royal Military College is probably the best way to solve the problem of the elimination of PCBs and 2,4,5-T that has been developed in this province and that, if we are not already, we should be, extending support to the researchers there so we can get on with this important task?

Hon. Mr. Parrott: Mr. Speaker, I think that is a very valid question. I believe we have tried to give all the people there as much co-operation as we possible could. They needed some immediate help, and they received that. There is no doubt that we are hopeful for that being the ultimate solution. We would like it on stream as soon as possible, and we have tried to do so. We are expecting to be able to announce something in a not-too-distant time from now. I believe we have done everything we can to be of assistance to them.

2:20 p.m.

One of the problems is the multi-jurisdictional problems that have to be ironed out. Not only is the federal government involved, but several departments in the federal government also are involved, and that is making it more complicated for us. We are attempting to do so. I can assure the member we do have funds allocated to be of any assistance they require.

Mr. Nixon: It was found recently that the project would have to be concluded at mid-June if additional financing were not available. Since the minister is planning to build a temporary storage for PCBs at a cost of $5 million and since this procedure which the minister has seen and according to his statement, which I think is a good statement, may be a better solution than the storage, would he not talk to his colleagues and perhaps to his opposite number in Ottawa to see that the jurisdictional problem is put aside so that we can get on with the research? Surely it would be better to leave the PCBs where they are as they come out of service and take this portable plasma arc that has been developed here in Ontario around to where they are accumulating them and destroy them there, particularly if the cost is only a fraction of what is currently planned.

Hon. Mr. Parrott: Quite frankly, there is nothing but agreement by myself on the member’s remarks. We totally agree on what he has just suggested. If money is the requirement and if that were the sole problem, we do have the funds set aside to deal with the necessary allocation. That is not the problem. I have spoken to my counterpart in Ottawa. More particularly, I wish he would speak to his counterparts. I do not say that in a provocative way, but I appreciate that there are two or three different jurisdictions involved from their point of view. I have spoken to him. Perhaps what I should do today is refresh his memory of the urgency, and I will.

Ms. Bryden: Mr. Speaker: Has the minister also looked into the method of destroying PCBs which has been discovered in Palo Alto, California, and which was reported on a Saturday night television program, What Will They Think of Next? Has he looked into that proposal, which involves a portable machine that destroys them and which could be moved around the province to wherever PCBs are located?

Hon. Mr. Parrott: Mr. Speaker, I am very happy to say that in my rather limited technical ability, I believe the research and the technology developed in Kingston are superior to theirs. That is somewhat of a layman’s point of view, but I feel very confident that the technology here is as good as, if not better than, theirs.

Mr. Gaunt: Mr. Speaker, would the minister not agree to flow funds to this research even though an agreement cannot be worked out with the federal government and the other parties in this respect? It does seem to be a matter of funds. If the province could come in with money immediately, this research could go ahead, as I understand it.

Hon. Mr. Parrott: Mr. Speaker, I think they have practically completed their research. I do not understand that they need too much more in the way of dollars for the research end of it. I think they have to prove the research, and the TAGA 3000 will be an important piece of equipment to prove the completeness of the destruction of the PCBs.

As I understand it, there are two or three aspects that have to be tested rather than experimented with. We will co-operate in that regard. I think we have the equipment to prove or disprove whether PCBs can be destroyed to 99.9 per cent. If they can, this is obviously the way to go. I think the next step is to use the technology we have in our ministry to prove it or, it is to be hoped not to disprove it. But if that is what results, then of course we have to admit it. I think it is more to determine who is the owner of the machine, whether it is RMC or the professor or External Affairs. I do not know. They have a bit of a problem. I wish they would sort it out quickly. We are not hung up on assisting them in the testing of their equipment. It is theirs, but we want to use it.

NIAGARA ESCARPMENT HEARINGS

Mr. Cassidy: Mr. Speaker, I have a question for the Premier. I want to ask him about the biased procedures being used in the hearings on the Niagara Escarpment plan, currently under way in the escarpment.

Are we to take from the Premier’s support for the decision of the hearing officer last week not to allow any representations for the expansion of the Niagara Escarpment planning area and from the fact that the Niagara Escarpment Commission, under the direction of this government, has allowed 90 per cent of the development control applications to be approved over the five or six years since it has been created, that the government is no longer committed to that section of the Niagara Escarpment Planning and Development Act that called to provide for the maintenance of the Niagara Escarpment as substantially a continuous natural environment? Are we to take it that he has now abandoned that commitment made six years ago?

Hon. Mr. Davis: Mr. Speaker, I could take a long period of time to answer that question or I could answer it very simply by saying no, it is not our intent.

Mr. Cassidy: In view of the fact that the hearing procedure is so biased, because the hearing officer will allow people to talk only about reducing the planning area, which is only 37 per cent of the original area the government intended to protect, and in view of the fact that the hearing officer will not allow anybody to suggest that the planning area be expanded, would the Premier agree to bring in a resolution to this Legislature to confirm what the government’s opinion is about what the planning area should be? Then we would know whether the government intends to keep any part of the escarpment, or whether it is the government’s intention to fiddle while the escarpment is allowed to disappear.

Hon. Mr. Davis: I do not have the exact acreage figures, but my recollection is that the initial suggested planning area was X thousand. If 37 per cent of it is the right percentage -- and I cannot comment on that -- it still is thousands and thousands of acres.

I know the one area fairly well, the town of Caledon. I do not know it as well any more as the very distinguished member for that area. The planning area was somewhat reduced, but it still has a very substantial impact on that community. There are still thousands of acres involved in it.

I am not taking sides with, against or beside the hearing officer. He has been given a responsibility, and he is making his determinations. I have never discussed it with him; nor should I. The point I was trying to make was that the hearings had been established to allow those people whose properties are being affected -- I had a brief discussion with the member’s colleague from Riverdale (Mr. Renwick) -- that this is the process whereby they can register objections before the hearing officer as to the impact of the planning area on their individual pieces of property.

I think it is fair to state that when the process is finished, this will come by way of resolution to the House and we will have an opportunity to debate it. If there are those parts of that geographic area that the honourable member feels should be included in the final plan of the escarpment, then I would be quite prepared to hear about them. But that was not the concept of the hearings.

It was not the policy followed -- and I am trying to draw a parallel for the honourable member -- for the parkway belt hearings. I think this is the experience, to a certain extent, that is being used. But nothing precludes additions at some point further down the road. I assume the hearing officer feels his responsibility is to deal with those people whose individual rights in terms of the property they own or have an interest in are being affected, so that he can make his determination on the representations made on those issues. I cannot see any other reasonable alternative to that.

I would remind the honourable member, because I remember a little bit about the history of it, that we had a private bill in this House. I think I am right on this. I think the member for Grey (Mr. McKessock), supported by the member for Grey-Bruce (Mr. Sargent), brought in legislation that attempted to define the escarpment even more narrowly. The members opposite can correct me, because the honourable member is not here, but I can recall some debates on it. In fact, I think we had the pleasure of being visited by a number of property owners from the escarpment area. I think the member for Grey sort of orchestrated their visitation to us.

An hon. member: What does that mean?

Hon. Mr. Davis: Orchestrated means he sort of initiated it, I think, to a certain extent.

2:30 p.m.

There is no question that the planning area has been reduced. I think it is fair to state there was always the contemplation that a portion of it would be reduced. I do not want the honourable member to feel that if it is 37 per cent -- and I do not know the figures -- we are now talking about a small piece of geography. We are not. We are talking about many thousands of acres.

Mr. Swart: Mr. Speaker, if I can have the Premier’s attention: Recognizing that unlike the Parkway Belt Planning and Development Act, and unlike any other planning act passed by this Legislature, the determination of the planning area and any amendment to it rests with this Legislature before the plan is made, and recognizing the Niagara Escarpment planning area as established by this Legislature comprises some 2,000 square miles but the plan prepared covers only 742 square miles, can the Premier explain the legal grounds on which the hearing officer refuses to hear any submissions on parcels of land outside the arbitrary boundaries which now have been set? I do not know if they have been set by the Provincial Secretary for Resources Development (Mr. Brunelle) or by the commission itself, but they have never been passed by this Legislature. What are the legal grounds for doing that?

Hon. Mr. Davis: Mr. Speaker, I am very reluctant to give a legal opinion. As I said on Friday, and I know the member for Welland--Thorold would share this point of view, I have confidence in Mr. McCrae. If memory serves me correctly, he is a former resident of Welland. Is that correct? The member for Welland-Thorold would be the last one to question his capabilities in dealing with this issue.

I think the honourable member will find that this is not dissimilar to the parkway and that people had an opportunity to discuss what was in the final recommendations of the commission. I met with some of the people. They were in the cabinet room and we had a lengthy discussion. I believe a very distinguished lady, a Mrs. McMillan -- I think I am right in this -- was making a representation to extend or at least to keep part of the escarpment area that other people were seeking to have removed.

The honourable member will recall -- I do not know whether there were meetings in Welland or not -- that there were certainly meetings throughout the escarpment area where the commission went in and discussed it with the local municipalities and with residents within the community. The bulk of the pressure was to remove from the planning area some number of acres; so the opportunity to discuss it was there.

Mr. Swart: Not here -- not in this Legislature.

Hon. Mr. Davis: No, no. Let me get to “here” in a minute. My understanding, and the advice we have had from the lawyers, is that the process to be followed is that the hearing officer listens to those people making representations about their land that is being affected, then he comes in with a recommendation to the government, and the government makes its determination on what the planning area should be. That is brought into the House and it is debated before it becomes the official plan or however we designate it. That is my understanding of the process. To me, it is relatively --

Mr. Swart: It is wrong.

Hon. Mr. Davis: Mr. Speaker, with great respect, the honourable member says it is wrong.

The reverse of that is that we would, in our wisdom, make a determination on the planning area without consulting the property owners who are affected, then put it out to a hearing officer who would make certain judgements and then, in my view, it would have to come back to this House.

I think the honourable member is putting the cart before the horse. This House will have an opportunity, but based on the hearing officer’s recommendations. It seems to me relatively simple. I think the honourable member’s leader has an understandable point. There are people who have no interest in the property per se. Their rights are not being affected. Certain groups are there making representations, saying that 100 acres should be in. They do not live on it. They are not being affected by it, but they would like to see it included. I say to the honourable member I understand that, but part of the discussion did go on at one point in time and most of the pressure was to reduce the planning area. Very frankly, the member for Grey wanted it reduced much less than it is at present. I think I am right in that recollection.

INCO EMISSIONS

Mr. Cassidy: Mr. Speaker, I have a new question for the Minister of the Environment. Could he say what new information has come to the attention of the federal Department of the Environment and its minister which has led them to conclude that Inco now can afford the cost of major reductions of its sulphur dioxide emissions in Sudbury, when this ministry has been insisting over the course of the last five years that Inco could not afford it and therefore has been acting like a patsy, rather than insisting that Inco cut its emissions?

Hon. Mr. Parrott: Mr. Speaker, replying to the last question first, in the last year and three quarters or nearly two years I have never suggested it was impossible for Inco to afford it. I do believe the federal government has commissioned a new study that has indicated there are some things Inco could do, but I have not personally seen it.

I also must say to the honourable member I think a good deal of that information is not particularly new. Mr. Roberts is doing some recycling of previous information and putting it in new clothes. I will be making a very comprehensive statement about our control order here in the House on Thursday.

Mr. Cassidy: Since the minister now says the information is not new, are we to take it that the Ministry of the Environment in Ontario has been aware over some period of time that Inco could afford a substantial reduction in sulphur dioxide emissions? Will the minister now undertake at the very least to accept the recommendation of the standing resources development committee that Inco be required to reduce to the 1,500 tons-per-day level within the next four years?

Hon. Mr. Parrott: I think I would be wrong to pre-empt anything which might be said on Thursday. I would like to deal with the total subject at that time. It will be a rather long statement, but I think that will be a more appropriate time to deal with the question.

Mr. Cassidy: If the government starts to talk tough on Thursday about Inco’s reducing its emissions, can the minister assure us the government will not be replaying history, where in the past this government talked tough about Inco but, when it came down to the crunch, it backed away from insisting that it reduce its emissions from being the largest polluter with sulphur dioxide on the North American continent?

Hon. Mr. Parrott: For two years now we have been on a program which very clearly said our orders would be reasonable and practical but enforced. I can assure the honourable member every single order we have asked for is being enforced. He need not worry about us backing down.

Mr. Laughren: You cancelled the last one.

Mr. Martel: You backed down on the last one. You are always backing down.

Hon. Mr. Parrott: The members opposite keep saying that, but look at the record for the last two years.

Mr. Martel: You did nothing.

Hon. Mr. Parrott: I don’t care. Let them look at the record. It says very clearly we are doing an excellent job on enforcement. There is no doubt about it.

Ms. Bryden: Mr. Speaker, can I ask the minister if the delay in issuing the new control order is to give the minister time to consult with Inco on the timetable for the installation of the new equipment to reduce the emissions? The vice-president of Inco is quoted in the newspaper as saying the government always discusses its plans in advance with Inco. Is that the reason for the delay?

Hon. Mr. Parrott: No, Mr. Speaker. I do not think there is an undue amount of delay. More particularly on this particular order, I recognize the significance of an order on Inco, and not just in a symbolic way to attack the problem of acid rain and the total commitment this government has to do something about it and not talk about. I understand the importance of attacking that symbol, but I also understand the importance of making sure that order is well thought-out and is one we can deliver and enforce. And that is what we are going to do.

2:40 p.m.

YOUTH EMPLOYMENT

Mr. Blundy: Mr. Speaker, I have a question for the Minister of Industry and Tourism. Is the minister aware that, because of the lengthy time elapsing between the students’ summer employment months and the date of payment by the province of the provincial share, some small businesses are not going to hire summer students under this program this year?

Hon. Mr. Grossman: Mr. Speaker, I presume the question relates to the Ontario Youth Employment Program, does it?

Mr. Blundy: Yes.

Hon. Mr. Grossman: Perhaps my colleague who is responsible for that, the Minister of Intergovernmental Affairs, might be in a little better position to deal with the question.

Mr. Blundy: Did the minister understand the question? I have had complaints about the lengthy time between the payment of the provincial share for the student program and the summer employment period. Is the minister aware that some small businessmen are complaining of this and are saying they will not employ students in this program this summer?

Hon. Mr. Wells: Mr. Speaker, I would be happy to look into that and see if it does present a problem. I must say in the three or four years we have funded this program we have never had any problem in carrying on the program and in having thousands and thousands of jobs provided through it. There have been certain problems. I can sympathize with a small businessman if he cannot get his money quickly enough; it does present a problem and I will certainly look into that. I have never had that complaint brought to my attention.

Mr. Blundy: I have the names of two small businessmen who, for the summer employment period of 1979, received their cheques for the provincial portion in January 1980. In this period of high interest rates for small businessmen, does the minister not agree that is a difficult situation for the small businessman?

Hon. Mr. Wells: If my friend will give me the names I will certainly look into it and I will be happy to report to him why they did not get their money sooner.

I want to indicate, however -- and my friend will recall this -- I think it was that party over there which wanted us, a few years ago, to audit every home grant that was given out in this province. This government is very careful when money is paid out. Very often when we check the complaints from people who have not been paid, we find the forms were not filled out correctly, or perhaps they claimed for something that was not eligible and there had to be an exchange of letters and so forth to get the proper information, which I am sure the member would want us to do to carry out the program in a proper, businesslike manner. But if the member will give me the names, I will find out exactly why they did not get their money earlier.

Mr. B. Newman: Mr. Speaker, can the minister assure us that in the hiring of students no employee will be laid off for that period of time during which a student has been taken on? That has been brought to my attention over the weekend by a constituent of mine.

Hon. Mr. Wells: Mr. Speaker, if the honourable member will indicate who the firm is and what the circumstances are, we will certainly investigate it. This program has not been created to displace people and have someone else take their jobs. It is for new jobs, above the number now working there, that are created for summer students. Certainly, if that were the case, the person so hired would not be eligible for the government assistance.

AID TO CHRYSLER

Mr. Cooke: Mr. Speaker, I have a question to the Minister of Industry and Tourism. I take it the minister is aware that today or some time this week Mr. Gray will be announcing the federal government package of Chrysler aid. Since Mr. Gray has said he expects this government to be responsible for 40 per cent of the package, as he believes the Ford deal was the precedent, I was wondering if the minister is aware of the federal government agreement with Chrysler. Is the minister supportive of the safeguards that have been put in that agreement and has the minister insisted on certain safeguards being put into that agreement? Finally, the minister was quoted in the Windsor Star a week ago as saying he does not support aid to the Chrysler Corporation at all, and that he is looking at alternatives to aid Windsor. I wonder if the minister could spell out for the Legislature what those alternatives are and when they will produce jobs for the 24,000 people who are unemployed in Windsor?

Hon. Mr. Grossman: Mr. Speaker, I think the answers to the first three questions are all yes. I will have to look at Instant Hansard later to make sure I am entirely safe in saying yes to all three.

Let me respond in a more general way by saying, first, I have kept in close contact with the negotiations with Chrysler. Second, I would think Mr. Gray and I have talked perhaps 20 times in the last five days. Third, as of last Wednesday, we began direct discussions with Chrysler as had been agreed upon several months ago. It was agreed that when the negotiations and discussions reached a certain stage, we would begin face-to-face discussions on our own behalf with Chrysler. That commenced last Wednesday.

The situation right now is that we are looking at all the alternatives. We are in contact with the federal government on a minute-to-minute basis at this time. I cannot, and I should not, comment any further than that at present.

May I only add that in the light of the quote the member referred to from the Windsor Star last week, what I was indicating last week, and have been indicating in this House and other places, since the entire Chrysler episode began, was that in deciding the extent of this government’s participation in Chrysler, in the context of making those decisions, we should look at other alternatives. If there are other alternatives which we feel are reasonably current and urgent, we should look at those alternatives for solidifying the auto industry in Windsor specifically.

To that end, I should tell the member that as long ago as a year ago, we began at the senior levels of my ministry to work intensely with the Japanese auto parts people. I was over there myself and spent an entire day with the Japanese auto parts people, with a view to ensuring that we got some of that investment. I hope some of that investment will come to this province as a result of that initiative.

I notice, most recently, that the United Auto Workers are now supportive of that initiative, which the member for Downsview (Mr. Di Santo) criticized quite dramatically in this assembly last year. That is one of the alternatives.

Other alternatives are being pursued by us through initiatives in Europe, where we began by contacting 300 to 400 companies some months ago, before the layoffs began to occur. We have now worked that number down to a list of about a dozen or so which are reasonably urgent, reasonably imminent.

I do not want to hold out false expectations. All of those firms, as a result of the intense work we have done in this ministry and in this government, now are looking at Ontario as an investment alternative. They are looking at other sites, in the United States mainly, and there is no question but that the United States is putting a great deal of political and other pressure on those firms to locate there.

We are working intensely on that situation, and I only mention it in the context of the other alternatives. Ultimately, we will make our decision based on the reality of the guarantees we might get from Chrysler, the urgency of the situation and the security and the job commitments from Chrysler we can get in exchange in the event we choose to participate.

Mr. Cooke: The minister has still not said clearly whether the province intends to participate in a deal with Chrysler and the federal government. Is he going to go on record today as supporting participation? If he is going to do that, is he supportive of Mr. Gray’s position that the province should kick in 40 per cent?

If we do go that route, how long will it take for a final deal to come about between the provincial and federal governments? Are the people of Windsor going to be kept in a state of anxiety for a further number of months while the federal and provincial governments work that out?

Finally, has Chrysler informed the minister of further layoffs it is planning at plant three, of 1,000 to 1,500 workers, when it goes down to one shift in that particular plant this May?

Hon. Mr. Grossman: I cannot say offhand whether, in the latest layoff notices I received, that particular one is on that list.

I can let the honourable member know very shortly.

2:50 p.m.

On the member’s first question -- which is, will I say this afternoon, directly, that we will support Chrysler Corporation -- let me say, in cognizance of the concerns which I expressed in this House last December, and which the member and his party and all responsible members have expressed in this House, obviously it would be careless for any government to say, “We will support Chrysler in any event.”

What the member would expect of us is exactly the opposite; that is, we will support Chrysler under certain terms and conditions directly related to jobs, directly related to the amount of new investment occurring in this province, and directly related to the reality of whatever guarantees might be given by that corporation in return for getting some taxpayers’ dollars.

It is only if we get sufficient guarantees for the workers, particularly in Windsor, that we would support Chrysler because, after all, the object of this exercise is related to finding, keeping and securing employment for the auto workers in this province. It is not directly related to helping out Chrysler itself in a vacuum.

If we get the proper guarantees for the workers in Windsor, if the job commitments are there, if the investment commitments are there, and there is sufficient guarantee, if all that fell into place, it would become a good investment for us and we would consider, and are considering, participation at the present time.

Finally, the member suggested there was some difficulty between the federal and provincial governments. Let me say that I cannot remember an instance in which the two governments have worked together better. There is joint communication and joint dialogue. Our staffs are working together. Mr. Gray and I are working together. There have been no disputes and in no way have the discussions held up whatsoever the negotiations with the governments involved in Canada and Chrysler Corporation.

Mr. B. Newman: Mr. Speaker, can the minister assure us that, in addition to getting our fair share of jobs as a result of this agreement, we will get a fair share of research and development?

Hon. Mr. Grossman: Mr. Speaker, I can assure the member that, as I said last December in this House, research and development, among other items -- I have referred to them already -- is the chief item among the things we will be looking at and have been looking at with regard to the Chrysler situation.

Mr. Di Santo: On a matter of personal privilege, Mr. Speaker: I think the Minister of Industry and Tourism misrepresented my position when he said before that I spoke vehemently last year against his agreement with the Japanese companies in the automobile industry. What I said at that point was that we are in favour of import replacement rather than boosting exports.

Mr. Speaker: That is not a matter of personal privilege; it is a difference of opinion or interpretation.

BOY SCOUTS OF CANADA

Mr. Breithaupt: Mr. Speaker, I have a question of the Minister of Education. Why has the minister cut off the operating assistance grant of $17,500 to the Boy Scouts in Ontario and, therefore, had Ontario lead the way in being the only province in Canada not to support this organization?

Hon. Miss Stephenson: Mr. Speaker, the miscellaneous grants fund available to the Minister of Education is a relatively limited fund designated for purposes of educational programs for young people. When we explored the financial state of the Boy Scouts of Canada and examined the program, which tangentially, I suppose, has an educational flavour, it was felt that there were other institutions much more in need of support and with much more direct educational programs in terms of young people.

The honourable member may be interested to know that as a result of further exploration of the Boy Scouts’ activities we have divined that there is a very important leadership activity with the Boy Scouts, which is adult education, and a grant has been made to the Boy Scouts from the Ministry of Colleges and Universities this year.

Mr. Breithaupt: Can the minister advise us of the amount of that grant?

Hon. Miss Stephenson: I believe it was $15,000.

HOUSING CONSTRUCTION

Mr. Laughren: Mr. Speaker, I have a question for the Treasurer, if I can get his attention. May I assume that when he was drawing up his budget he was very carefully perusing the forecast of housing starts for Ontario for 1980? If that is the case, in that he saw very clearly there was going to be a significant drop in housing starts to 50,000 this year from 57,000 last year and 72,000 the previous year, why did he not make a commitment to build affordable housing in Ontario this year?

Hon. F. S. Miller: Mr. Speaker, the member is quite right. I did spend a good deal of time looking at the forecasts for the housing market. In fact, I met with two groups from the industry in my pre-budget meetings. Affordable housing is a function of a number of things, not the least of which these days is the interest rate charged on the mortgage. We have had a great deal of discussion on that topic in the last few weeks, and I am sure we will have more yet. We are continuing to negotiate and discuss with the federal government ways and means of doing that, all the while studying the matters we promised we would do by mid-May.

I would also point out that it was surprising to learn from the industry that the demographics of the Ontario population are such that some declines in starts were inevitable simply because of a change in the demand. On a comparative basis, we are one of the better-housed parts in North America and in the world. We are still very anxious, because of the importance of that industry, to see the full need for housing construction, both in rental and ownership housing.

I assure the member that my colleague the Minister of Housing, who is charged mainly with providing programs of that nature, continues to study that. I have been occupying my interest with the basic need and the interest rate problem.

Mr. Laughren: Is the Treasurer aware that the unemployment rate in the construction trades is 30 per cent in Toronto and 35 per cent in northeastern Ontario? Could he tell us what plans he has to ease that unacceptable high unemployment rate in the construction trades, not just in Metro and not just in northwestern Ontario, but all over the province?

Hon. F. S. Miller: One of the things I have been very pleased with is the fact that industrial construction is up -- and I am not talking about machines, but buildings. I have talked about the problems of the Ford plant, pointing out that all the labour involved with Ford was in the construction industry. I have been delighted to see that the Employment Development Board through its grants has stimulated investment in the province which, in effect, causes the first wave of employment in the construction industry.

HAZARDOUS WASTES DISPOSAL

Mr. Kerrio: Mr. Speaker, my question is to the Minister of the Environment. Is the minister aware of the report that was released some time in mid-April by the International Joint Commission recommending that both the Canadian and US governments (1) prepare inventories of waste disposal sites located in the Great Lakes basin, (2) tighten legislation to ensure the safe storage, transportation and disposal of toxic wastes around the basin and (3) prohibit the production, sales, transportation and use of insoluble toxic compounds? If the minister is aware of the report, how has he reacted to the particular directions recommended here by the International Joint Commission?

Hon. Mr. Parrott: Mr. Speaker, I am aware of it and, quite frankly, I think how we have reacted is what we did a year and a half ago; if the honourable member has been following what we have been doing in liquid wastes, which I think he has, he will know we have made great inroads in solving that particular problem without our ministry. It is not solved yet, but we are making a very concentrated effort to do so. I do not know why the member would not have full knowledge of that, but if he does not, I will be glad to send him more information.

Mr. Kerrio: I certainly have a full knowledge of it. But why was this report given out in mid-April if the International Joint Commission did not have full knowledge? Those people are working on it every day.

The question I would like to pose to the minister is, if he is aware of the problems they were pointing up in mid-April, is he going to resolve some of the problems by addressing himself to them and reporting back to the House as to what he is going to do in a meaningful way as it relates to about five other specific areas here?

3 p.m.

Hon. Mr. Parrott: I cannot quite understand how the honourable member would not know the many programs we have. Does he want me to recite them here? We are talking about the safe storage of certain materials, about solidification processes in various places, about facilities we need for other materials, about incineration units. We are talking about what we put through in the last session in Bill 24 to make sure that people handled their materials correctly. We are talking about a waybill system, which we now have in place. I could go on and on about what we have done -- not what we are promising to do. We have done it.

ENGLISH AS A SECOND LANGUAGE

Mr. Grande: Mr. Speaker, my question is to the Minister of Education. In view of the fact that the federal government has announced 10,000 more Asian refugees will be coming to Canada, and in the last estimates of her ministry she made a commitment to provide boards of education with the up-front funds they need to set up English-as-a-second-language programs and special education programs, can the minister explain why is it to this day the area boards of Metropolitan Toronto have not received one cent to set up those programs?

Hon. Miss Stephenson: Mr. Speaker, my response in the November estimates to the question raised by the honourable member was that we would investigate the possibility of current funding of an English-as-a-second-language program. That is precisely what we have done in the 1980 general legislative grants. The boards are funded on a current basis for English as a second language. The difficulty in the Metropolitan Toronto area, I gather, is the rate at which the money flows through the metropolitan board to the area boards in Toronto.

Mr. Grande: Is the minister aware, the longer her ministry or the Metro board fouls up, that 948 elementary and secondary school students in Toronto alone, and many more in the other area boards in Metro Toronto, have been bumped off the programs they need in order to look after the Asian refugees enrolment? Because those are the people who have the most urgent needs, the children who have less urgent needs are bumped off the programs.

Hon. Miss Stephenson: There is no foulup as far as the Ministry of Education is concerned. We are having conversations with the Metropolitan Toronto board to try to streamline the procedure at that level.

DARLINGTON NUCLEAR POWER STATION

Mr. Bradley: Mr. Speaker, I have a question of the Minister of Energy. Now that it has been revealed that the Pickering B nuclear generating station and the problems encountered there with Babcock and Wilcox Canada Limited will cost Ontario power consumers some $500 million, according to Ontario Hydro officials who were quoted last week, and because of the concerns expressed about the quality of work provided in the past, upon reflection, is the minister now giving consideration to asking Hydro to retender that portion of the project which is affected by the provision of boilers at Darlington?

Hon. Mr. Welch: No, Mr. Speaker.

Mr. Bradley: Could the minister assure us then that the reason this aspect of the project is not going to be retendered is not that the silent part of the deal between Hydro and Babcock and Wilcox was that the project would not be retendered? Would the minister also comment upon a suggestion that some considerable amount of the repair work be fanned out to other companies in the business?

Hon. Mr. Welch: The minister is not knowledgeable about any silent aspects of any particular deal. I might remind the honourable member if he is available tomorrow night, starting at seven o’clock, the officials of Ontario Hydro will be before the resources development committee in connection with the ministry’s estimates. No doubt they would be quite anxious to answer any questions he might have with respect to these matters.

AID TO PENSIONERS

Mr. Di Sato: Mr. Speaker, I have a question for the Treasurer. In his announcement in the budget of the tax grant to pensioners, the requirement he put was that they be drawing old age security. There are a number of citizens who are drawing Canada Pension disability but are not drawing old age security because they are not 65, and they are excluded from the minister’s scheme. If nothing else, from an income point of view does he not think that should be corrected and that those in that group should be included?

Hon. F. S. Miller: Mr. Speaker, that would be broadening the pensioner tax credit for those over 65 to an altogether new base, which I would think would be inappropriate.

Mr. Di Santo: Is the Treasurer aware that there are a number of Canada Pension Plan beneficiaries who are also drawing family benefits? If the government decides they qualify for the $500 grant, can the Treasurer tell us whether the Ministry of Community and Social Services will subtract the same amount of money from their family benefits?

Hon. F. S. Miller: I would have to look at the arithmetic the ministry uses before commenting on that. I would reserve my answer until I got a chance to do so.

POLICE USE OF FIREARMS

Mrs. Campbell: Mr. Speaker, my question is to the Solicitor General. Has he been reviewing or following the inquest in Petrolia into the fatal shooting of one Mr. Powell, particularly with reference to the expert evidence given last week? If he has not would he be prepared to order transcripts so that he might be in a position to report to this House on the occasion of the conclusion of that inquest?

Hon. Mr, McMurtry: As the member knows, Mr. Speaker, I think the inquest terminated only last Thursday. A question was asked of me on Friday, and I indicated at that time I would be reviewing the inquest and reporting back to the House. It is a little premature to determine whether actual transcripts of the inquest will be necessary, but it is something that will he taken into consideration when we determine how we can most effectively report back to the members of the Legislature.

Mrs. Campbell: Would the Solicitor General not consider that according to the evidence we have, which is exclusive of transcripts, there seems to be a great dichotomy in the evidence in that case and that surely should be a matter of concern to him?

Hon. Mr. McMurtry: I am not sure from my brief knowledge of the case that there is that dichotomy. It may have appeared so in some of the press reports, but I think the member for St. George more than most people in this House appreciates the danger of attempting to make any judgement on fragmentary reports in the media.

Mrs. Campbell: That is why I want transcripts.

EVICTION OF TENANT

Mr. Martel: Mr. Speaker, since the Minister of Housing (Mr. Bennett) is not here, I have a question for the Premier regarding Mrs. Timmins. In view of the fact that the Workmen’s Compensation Board last week wrote off approximately a $13,000 overpayment to a worker in Windsor, will the Premier use his good offices and ask the Minister of Housing to write off the $2,000 that is owed by Mrs. Timmins, a 72-year-old widow, with respect to a complication that arose as a result of a pension she was receiving?

Hon. Mr. Davis: Mr. Speaker, if memory serves me correctly, the honourable member sent me a note about this on Friday and I said I would try to get some information for him.

I did not have it by two o’clock. I expect that I or the minister will have it tomorrow afternoon.

OCCUPIERS’ LIABILITY AND TRESPASS BILLS

Mr. McKessock: Mr. Speaker, I have a question for the Attorney General which, if he wants to, he can redirect to the government House leader (Mr. Wells). I would like to ask when the occupiers’ liability bill and the trespass to property bill will be coming up for third reading.

Secondly, can he tell me why the Ontario Federation of Agriculture was told last Wednesday that it was the opposition that was holding up these bills when, in fact, we are waiting for them to come through for approval?

Hon. Mr. McMurtry: Mr. Speaker, I think the members of the official opposition are just as interested as I am to proceed with third reading. We hope that will be done shortly.

Mr. McKessock: Can the minister tell me why the federation was told the opposition was holding up these two bills from coming to third reading?

Hon. Mr. McMurtry: I have had no communication recently with the federation, so I have no knowledge of the matter to which the honourable member is referring. I am not aware that was said.

3:10 p.m.

SAFETY CAR

Mr. Young: Mr. Speaker, I would like to ask the Minister of Industry and Tourism whether, during the discussions with Chrysler, the matter of the introduction of the safety car has come up? This car was built by Chrysler itself through Calspan, and is light in weight, safe and energy-efficient. Has the phasing in of that car during the down-sizing process been seriously discussed between the government and Chrysler?

Hon. Mr. Grossman: Mr. Speaker, I would like to be more helpful to the member, but I really cannot comment on that and other parts of the discussion at this time. I would be happy to do so at the conclusion of the discussions and negotiations.

INTRODUCTION OF BILLS

Hon. Mr. Auld: Mr. Speaker, I would like to ask the consent of the House to move a bill that amends the Game and Fish Act. Honourable members will recall, I think it was two weeks ago yesterday when we passed Bill 15 for the member for Etobicoke (Mr. Philip), I indicated that I would be producing a bill, one part of which would be a duplication of his bill, with his agreement, so that the amendments which we are putting forward and which also relate to trapping would all be in one place. If I have the consent of the House, I would like to introduce the bill.

Mr. Speaker: The minister did not make it clear to me why he required unanimous consent to introduce anything. Was it on an agreement he had given that he would not do this? He will have to elaborate. I do not know what the question is at issue.

Hon. Mr. Auld: I am sorry, Mr. Speaker. I am told one cannot introduce a bill that contains a portion similar to, or in this case exactly the same as, another bill which is still on the Order Paper. The other bill is no longer on the Order Paper. It has been given third reading but I understand it has not yet reached royal assent. This bill will incorporate the contents of that bill and has a section which will repeal that bill.

Mr. Speaker: Do we have unanimous consent?

Agreed to.

GAME AND FISH AMENDMENT ACT

Hon. Mr. Auld moved first reading of Bill 59, An Act to amend the Game and Fish Act.

Motion agreed to.

CITY OF STRATFORD ACT

Mr. Edighoffer moved first reading of Bill Pr19, An Act respecting the City of Stratford.

Motion agreed to.

ANSWERS TO QUESTIONS ON NOTICE PAPER

Hon. Mr. Wells: Mr. Speaker, I wish to table the answer to question 118 standing on the Notice Paper. To give the member for Windsor-Sandwich (Mr. Bounsall) something to do for the next couple of days, I will table the answer to question 36. (See appendix, page 1212.)

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

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

Mr. Peterson: Mr. Speaker, I am sorry the Treasurer (Mr. F. S. Miller) isn’t here to hear these words of wisdom. We would all probably be further ahead had we missed his budget last week. As a matter of fact, maybe I will decide next year not to show up for it. That said, he probably won’t be in a position to present the budget for next year.

Interestingly enough, this is my fourth response and everything we predicted last year in our budget response came true with the exception of one small prediction. I predicted at that point that we would be in the government’s position and we would be presenting the budget for this year. We were wrong. However, next year we will be on that side and will be prepared to share our view of the Ontario economy with the opposition, as it then will be, and our friends to the left.

I always choose a text for my response for the budget. It is part of my United Church upbringing. I believe it puts it into context and puts some focus into my response. Over the years I have quoted various luminaries. I have used Darcy McKeough. I even went down from there once and used the Bible. This year I am going to use a little story from Mark Twain. He told a story you probably know, Mr. Speaker, because you have a veritable fount of little stories.

It is a story about a chap who was walking down the street and he saw the local hotel on fire. As he looked up he saw a chap standing on a ledge not knowing what to do. The chap walking down the street had a brilliant idea. He ran and got a rope and threw the chap the end of the rope and said: “Grab the rope, tie it around your waist and I will pull you down.” The Treasurer is the man throwing the rope and the taxpayers, the good people of the province, are in the position of the man on the ledge.

We are seeing a singularly deficient budget in terms of equitable distribution of wealth, a budget which in our judgement ignores the economic realities of this province and this country at this time. There is no vision, there is no thrust. This is a government that is used to governing by poll. They haven’t taken a creative act in this government in the time I have been here. This government uses polls like a drunk would use a lamp pole. They use it for support and not for illumination. There is yet to emanate from this government a vision or the kind of thrust that we need.

Before I start this diatribe, and I don’t want to drive my colleagues out of the House, they are all welcome to stay if they want because the best is yet to come -- I want to thank many people. We are privileged in this party to have a number of very competent advisers, both inside and outside the government. It is interesting to note how many people are anxious to share their expertise with us this day because they are angry and frustrated. A lot of them are former Tories who just can’t see this government going on any longer because they have lost the vision, they have lost the right to govern.

I am grateful to all of them. I won’t name them, because if I name them they will probably be moved down in their places in the syndicates or they will be cut off some of the patronage they got used to in the past. Suffice to say I have been the beneficiary of a great deal of advice and wisdom and I am grateful for that.

3:20 p.m.

In addition, we have a first-class research team in the Liberal caucus today and I want to thank particularly three people -- Jane Shapiro, Sandie Giles, Norma Graber -- who worked very hard and conscientiously all weekend and for several months before to get this into shape to present our view of where things should be.

It was interesting, the juxtaposition of the budget a week ago last Tuesday night. What was so very interesting is because the federal Minister of Finance decided to have his own view of the Canadian economy laid before the people the night before. The stark juxtaposition of those two spaces and the view of the realities of the marketplace were in very distinct difference. Mr. MacEachen, to his credit, at least had the courage to lay before the people of this country the reality. The realities are not nearly what the rose-coloured, glassy-eyed view of the Treasurer of this province expressed. Maybe it’s because he feels his own essential vulnerability in this matter. Maybe he is frightened that he can’t go and share the realities with the people.

But in the absence of that view it prevents him from clearly defining the problems, from clearly proceeding with some of the solutions. Unless he has the vision to recognize and define the problems he will never come up with the solutions. At least Mr. MacEachen has made the first step. The Treasurer has made no steps along this process.

I say to the minister very seriously, every respected economist in this country has a view of the economic realities very different from the Treasurer of this province. He has never pretended to be an economist, to his credit, but even any pretence he made about being respected is gone with this budget. Optimism is very nice, but it is simply not an adequate response.

The Premier (Mr. Davis) and his cabinet colleagues may run around the province protesting in speeches about the doom and gloom emanating from some quarters. But it’s not doom and gloom, it’s a realistic assessment of the realities. It is impossible to ignore the facts, and they are as follows; during the 1970s Ontario dropped from a prominent ranking to last place among the provinces in average annual percentage growth in gross provincial product, in per capita GPP, in per capita income, in per capita personal disposable income, in the rate of public investment, in residential construction and, very importantly for a province in which manufacturing is predominant, to last place in value added per capita.

To be very clear about this, Ontario, the much-touted “province of opportunity,” is declining while all of our sister provinces are growing. This is not just a relative decline. We understand the redistribution of wealth in the country. We understand that Alberta is getting more because of its favoured position at the moment. But this is, in a real sense, a genuine weakening of Ontario’s economy -- a genuine weakening in absolute terms.

It was only after careful study and analysis that the federal Department of Regional Economic Expansion concluded in December:

“The future of Ontario is up for review. Traditional advantages have been weakened, old development attitudes are no longer applicable, and the international economic situation has changed drastically. No longer can Ontario’s continued growth be taken for granted by any level of government.”

Ontario, formerly the leader in Confederation, has now become and is becoming a national problem. Any decline in manufacturing is critical to Ontario since it accounts for about 30 per cent of the province’s real output. Yet between 1970 and 1979 Ontario placed eighth in Canada in average annual percentage growth of manufacturing investment and eighth between 1970 and 1978 in average annual percentage growth in the estimated value of manufacturing shipments by province of origin. In this area, Ontario’s share declined from 51.8 per cent in 1970 to 49.4 per cent in 1978. We should be growing: we are contracting.

Capital investment in manufacturing, both for construction and machinery and equipment, showed actual declines in 1978 and minimal growth in 1979. So when the Treasurer expressed with great pride that these investment intentions -- remember these are only initial intentions on the basis of a survey, not real facts yet -- when he says that for manufacturing firms they are up almost 40 per cent this year, it is 40 per cent more than almost nothing. Further, this growth is not widespread but is mostly limited to two basic areas -- transportation equipment and the primary metals.

I want to draw the members’ attention to the Conference Board in Canada’s study. That study, contrary to the Treasurer’s view, predicted a 0.6 per cent decline in real growth. That means a recession. It says Ontario will experience a four per cent decline in manufacturing output in 1980, while other provinces will grow quite dramatically, for example, Alberta by six per cent. Saskatchewan and Manitoba will both experience strong performances in that sector. Indeed, Ontario is expected to lag behind the national average in manufacturing growth yet again this year, after a decade of decline.

Because of this consistent under-performance, average real family income in constant 1971 dollars in Ontario sank from $13,518 in 1976 to $12,916 in 1978. To put that in relative terms, data from the Department of National Revenue indicates that the average income by tax filer in 1977 for Ontario was $11,080 -- $34 less than the average national income.

Despite Ontario’s regional priority budget, certain parts of the province, in the north and the east, have average incomes which are lower than the slowest growth areas of this country. This is not a fact to be proud of.

Last fall, a Toronto newspaper reported that more than $3 billion worth of Ontario-based money and nearly 30,000 people, many of them skilled workers, were leaving the province and moving west during the course of that year.

It is not surprising that in 1977, for the first time, Ontario qualified for equalization payments from the federal government as a have-not province. The term “have-not” has been widely used. It emanates from a gentleman who teaches at the University of Western Ontario by the name of Dr. Tom Courchene, who interestingly enough was a federal Conservative candidate in the 1979 election. He is the one who brought this country’s attention to the fact that since 1977 Ontario has become a have-not province.

As a matter of fact, under the existing formula Ontario will be owed $800 million by the end of this year. It is noteworthy that while one of the reasons Ontario has become a have-not province is due to the great growth in provincial oil and gas revenues in western Canada, equally important is the slow growth in revenues from Ontario’s traditional tax sources -- personal and corporate income taxes.

It is clear this province has not been holding its own. We have been sliding economically relative to our own performance in the 1950s and the 1960s and relative to the rest of the country. To deal with this critical decline we are given a budget which tinkers and putters, which has no vision, no overall thrust, no direction, and, needless to say, no answers. Someone said to me it is impossible to drive forward looking in the rear-view mirror.

If we use the analogy of the stock market, Ontario today would not be worthwhile investing in because of its declining growth. If we were investors, we would have to say this is a stock in decline, and we would not put any premium on the management of this province today.

I want to quote something I found over the weekend. It says this: “There can be no betterment in the standard of living by any distribution of unearned moneys. Nothing but a distribution of goods needed by humanity can help the standard of living, and these goods must first be brought into being. You cannot leverage a country into prosperity any more than a lawyer can make his client rich by drawing up his will.” Those words were spoken by Arthur Meighen. I assume some people over there will have recognized that.

Today the standard of living we have experienced over the past decades in this province is under threat, because we are not putting the vision into creating the wealth, in order to redistribute it in a fair, just and equitable way so that our children will be able to live as well and as happily as we have.

I am not an alarmist. I am not a doom-and-gloomer. I will say to the House that we have the potential, we have the resources, we have the young people, we have the educated populace, we have all of the advantages; but we do not have the vision, we do not have the bold thrust and we do not have the leadership. That is a reality.

3:30 p.m.

I want to look at the budget in some detail, having pointed out, I hope, the relative position that we are in today. Looking at the budget itself we see that during the member for Brampton’s term as Premier budgetary expenditures have quadrupled, rising from $4.2 billion to $16.7 billion. That is an average annual rate of increase of 13.5 per cent. During the same period, a budgetary surplus of $150 million in 1970 has been replaced by a deficit totalling $1.4 billion this year.

I am glad to see the Treasurer back, Mr. Speaker, particularly since he is smiling. Had he been here listening to the facts in the past 15 minutes or so, I can tell the honourable members they would not see that smile on his mug right now. It is time somebody pointed out the realities to him.

The budgetary deficit is forecast to increase by $236 million this year, some 20 per cent this year alone. The net cash requirement will rise by an incredible 44 per cent in 1980-81, adding almost $1 billion to the deficit that we and our children must carry. I pointed out to this House on Friday that those figures were fudged. In reality, the net cash requirements are up 163 per cent, because the Treasurer took advantage of a technical device.

Interjections.

Mr. Peterson: I have no idea what is bothering the Minister of Consumer and Commercial Relations right now.

Hon. Mr. Drea: Mr. Speaker, I will rise on a formal point of order. If the member for Halton-Burlington (Mr. J. Reed) wants to look better for the cameras by taking another seat that is fine, but he should not interject or anything else unless he is in his own seat. Exactly the same thing that his House leader or his deputy leader does to me, I am doing to him.

Mr. Peterson: I welcome that exchange, Mr. Speaker. I think it is a good one and we have now seen that the honourable minister will be on national television. He has not been getting a great press lately so I am willing to assist him.

I want to go back to the point that I made in this House on Friday. In reality, the Treasurer preflowed some $217 million worth of expenditures from this year to last year. That is because he had an embarrassment of riches last year. His corporate income taxes were coming in away above schedule, and there were some accounting errors in terms of federal transfers. For all of these reasons he ended up with a far lower net cash requirement than he predicted.

That was an embarrassment. This year he wanted to create an election budget, he wanted to make the appearance of giving away a lot more money, but he was embarrassed at the same time to increase his net cash requirement because of previous commitments to keep lowering the net cash requirements and balance his budget some time in the 1980s. Of course, the House will remember the first commitment was in 1981. He has put it back to 1983 or 1984, and the good Lord knows what the view of the government is today. Because of those embarrassing circumstances, he preflowed $217 million worth of expenditures which, in accounting terms, elevated his deficit last year and lowered it this year, so he says it increased only 44 per cent. In fact, by any generally accepted accounting method, that deficit increased by 163 per cent. In fact, the net cash requirements this year are over $1.1 billion. Everyone recognizes that.

Hon. F. S. Miller: That is not right and the member knows it.

Mr. Peterson: That is absolutely true. The Treasurer’s own officials will not deny that. If he denies it why does he not stand up in this House right now and deny it?

Hon. F. S. Miller: Mr. Speaker, I will deny it. I will deny it right now, because the member knows I also double-counted payments this year to the elderly of some $200 billion so that the cash requirement is exactly, within a very few dollars, the proper amount for this year.

Mr. Deputy Speaker: The member for London Centre has the floor.

Mr. Peterson: That is not correct, and the Treasurer knows it is not correct. I will grant him that there was a double payment for political reasons, which we will discuss shortly, of some $200 or so million because he wanted to get the cheques out this year. Let the honourable members ask him about his own motives for doing that. I will get to that further on in my speech when I will prove to him that it is the most inequitable thing in his entire program. It is a disgraceful program and he should be ashamed of it.

He wanted to get the cheques out and he wanted to get them out with his name on them, so he double-paid. But even without that double payment for property tax and senior citizens relief this year, there was a real increase in expenditures of 9.6 per cent. Look at the Dominion Securities Limited bulletin that came out last week, Mr. Speaker.

People can see through the Treasurer’s cheap charade. Let me tell him, he is not that bright; his people are not that bright. We can see what he is doing.

In fact, this is not a restraint budget. This is not in form with the previous history, but deficits and restraints don’t mean anything to the Treasurer. He takes a poll, he decides what he thinks the people of this province want, and then he reacts accordingly.

He used deficits and surpluses exclusively as a political device with no substance or long-term planning in them. As I said, Dominion Securities said in its bulletin last week that even if one discounts the double payment because of the property tax relief this year, in fact expenditures went up 9.6 per cent, not eight per cent as the Treasurer would have us believe.

Mr. Ashe: How much did they go up in Ottawa?

Mr. Peterson: If the member for Durham West would look at the books, although I don’t expect he will understand, everyone will agree that our analysis of this situation is correct. I am surprised more people aren’t up in arms about this particular distortion of the budgetary facts.

Again this year one of the largest increases in expenditure is to service the public debt. Interest on the public debt is now more than $1.6 billion, close to 10 per cent of the total provincial budget. It is an increase of 14.7 per cent over last year, one of the largest increases in expenditure in the budget, and that will continue year after year after year as our children inherit this legacy. What that says, in simple terms, is something like $4.4 million a day going to service the debt through interest payments on accumulated debts.

Over the last decade Ontario’s funded debt increased 207 per cent, from $5.3 billion to $16.2 billion. On an annual basis, compared to the rate of inflation, the increases have been noteworthy. In 1972, inflation grew by 4.8 per cent, the funded debt by 19.5 per cent. In 1973, inflation was at 7.5 per cent and funded debt at 11.2 per cent; in 1974, 10.9 per cent versus 12 per cent; 1975, 10.8 per cent versus 25.2 per cent -- one of the greatest distortions in the budgetary history of this province.

In 1976, 7.5 per cent versus 11 per cent;

1977, eight per cent versus 13.4 per cent;

1978, nine per cent versus 13.5 per cent.

Finally, in 1979 -- perhaps in 1980 we will see a bit of a turn around -- it was coupled with a 44 per cent increase, on the Treasurer’s figures, in the net cash requirements -- really a 163 per cent increase -- and a 20 per cent increase in the budgetary deficit.

If you go back to Darcy McKeough and ask him about the chief cause of inflation in this country and in this province he will tell you it is government overspending. This government is one of the principal contributors to inflation in this country. I have no idea how the myth of the great economic managers was ever ascribed to this government. We are here and we are going to expose that myth. In the process of so-called managing and husbanding the resources of this province, this government has virtually stripped every available pension dollar with the exception of this year. I welcome the program to put the pension fund money into Ontario Hydro.

If you will look back, Mr. Speaker, over the last three or four years, we have advocated that vociferously and we have said that had that money not been available to spend the province probably wouldn’t have spent it. Had that money gone into productive assets, into productive capital -- and Ontario Hydro is one example -- our industrial infrastructure would not be in the bad shape it is in today. We needed the investment and they spent it.

Fortunately, they are now starting to follow our point of view. We will look at it and monitor it daily. As I said, we don’t believe this budget has come to grips with the fundamental issues in this province over the last decade. We in the Liberal Party have demonstrated that we are willing, indeed determined, to face those realities.

Last year at this time we released an industrial strategy for Ontario. Our proposal contained a comprehensive package of incentives and programs to encourage the growth of the manufacturing sector. We realize Ontario’s problems are complex and their solutions cannot be ad hoc or disjointed, but they must form a complete and wide- ranging plan or strategy.

We realize the government can no longer afford to play a passive role, watching from the sidelines. Government must get involved, must assist the private sector, must intervene directly to help create jobs, to allocate scarce resources selectively to those sectors with the greatest potential to contribute for the benefit of all Ontarians. We are prepared to make those decisions.

3:40 p.m.

I know my Socialist friends to the left are jumping up with great excitement at that. I want to say at the beginning I am no great fan of government, but I also recognize the realities of today. I am not one of those who runs around and advocates government involvement just for the fun of it, as my friends to the left in the NDP would do. That is a matter of principle to them; the results are less important than the fact government is involved.

Let me say that I have had a little bit of experience in other countries. I know the extent of state involvement in Japan. I know the extent of state involvement in some of our competitive trading partners today. Today our competition is coming from Düsseldorf, from Seoul in Korea, from Osaka and all over the world. If we sit here naively thinking government doesn’t have to be involved, I can say we don’t understand the realities of the international marketplace.

I would suggest to my old friend there, Rip Van Miller, to get the dust out of his eyes and look at it. He has to get going.

Hon. F. S. Miller: Why didn’t you complain about the Employment Development Fund?

Mr. Peterson: I will get to that in a moment, because political slush funds aren’t the solution to this kind of problem.

For my more right-wing friends, let me just quote Rowland Frazee, the chief executive officer of the Royal Bank, who, interestingly enough, has made some interesting speeches on the subject. He said: “I’m not scared of an industrial strategy. We in the Royal Bank do strategic planning. Why shouldn’t the government do strategic planning?” I guess it has been a matter of philosophical purity with this government over the past not to admit that a plan is required and that everybody in today’s complicated, complex and modern world must do some planning. Government has to get involved. We think there are responsible ways to do it and cheap ways to do it which will give maximum results.

I want to talk about the program in the budget on increased assistance to senior citizens. That is something we in principle in this party are very much in favour of, but we are not in favour of it in the way this government has chosen to do it. In essence, they want to give more to the rich at the expense of the poor. The Treasurer is no Robin Hood; he is the Sheriff of Nottingham.

The Treasurer himself in his budget paper admits that 135,000 tax credit claimants will receive less under his new scheme. He also claims that many of these will have their losses counterbalanced by an increase in Gains payments. What he didn’t mention is that Gains is available only to those pensioners with incomes under $5,000, or well under half the pensioners in Ontario.

I would like to read into the record some concrete examples of how this program will actually work, especially for those most in need. Let us take the case of single pensioners with incomes of about $6,000 -- and remember that means they are not eligible for Gains -- who are perhaps fortunate to be living with relatives or maybe living alone at a very cheap rent. They claim no property tax credit and, therefore, would not be eligible for a grant. I am talking only about that example where there is no property tax credit.

Under the old system, those pensioners would have received no property tax credit, a sales tax credit of $43.10 and a pensioner tax credit of $110 for a total of $153.10. Under the Treasurer’s new system, they will receive no property tax grant and a sales tax grant of $50. These old people will receive over $100 less under the Treasurer’s marvellous new plan. Any pensioner who pays no property tax and moderate rent or no rent will lose the pensioner tax credit without gaining any benefits from the enriched -- for some -- property tax grant.

To take another example, pensioners with incomes over $5,000 and under about $8,000 who rent rooms for, say, $75 per month, under the old scheme they would have received a property tax credit of $198, a sales tax credit of $43.10 and a pensioner tax credit of $110 for a total of $351.10. Now they will get a property tax grant of $180 and a sales tax grant of $50 for a total of $230. These pensioners, on their own with few resources, will receive $121 less from the government of Ontario, but they will receive it by way of a cheque from the Treasurer or from the Premier. Ask them if that compensates for the loss of the assistance they require?

Mr. Ashe: What a ridiculously narrow example.

Mr. Peterson: It is a real example. At $100 a month rent, pensioners will lose $67. In fact, any pensioner with a low gross income paying less than $131 a month rent loses under this plan.

What about the case of pensioners earning between $5,100 and $8,000? This represents probably close to 200,000 pensioners who pay the average for pensioners of $574 in property taxes. Under the old system they received a property tax credit of $237.40, a sales tax credit of $43.10, a pensioner tax credit of $110, for a total of $390.50. Now they will receive a property tax grant of $500 and a sales tax grant of $50, for a total of $550. They benefit from this plan, but let’s see how much they benefit as compared to their wealthier counterparts.

These pensioners, also paying an average of $574 in property taxes, but with incomes of over $20,000 a year, like the Treasurer and his friends, also benefit. They receive an additional $451, while the poorer beneficiaries receive a paltry $159 more. What kind of priority is this, that those who need it the least get the most? I would wager that many of those who receive the greatest benefit would be the first to declare that this scheme is wrong and it is their less-well-off fellows who should be on the receiving end.

If we look at how the distribution of additional funds under this new plan breaks down, we will see that out of the additional $75 million, the 353,000 pensioner tax filers earning less than $5,000 share some $3.8 million of the increase, or five per cent of the increase. The 212,000 pensioner tax filers earning between $5,000 and $10,000 share another $10.1 million. Those 101,000 pensioners with incomes between $10,000 and $15,000 share $16.7 million, or 22.3 per cent of the increase. The 48,000 pensioners with incomes between $15,000 and $20,000 share $13.9 million, or 18.5 per cent of the increase and, incredibly, hear this, those 70,000 pensioner tax filers earning over $20,000 get $31 million more, or 41 per cent of the additional funds for their use. This is a shameful transfer, from the poor to the rich.

Mr. Kerrio: Those are not isolated cases.

Mr. Peterson: Those are real cases. Those are broken down by block. I challenge the Treasurer to respond to this, and we will have more words when this legislation is introduced. In sum, 85 per cent of the Ontario pensioner tax filers -- those with incomes under $15,000 -- get $31 million more of the increase, while the nine per cent who earn more than $20,000 share the same amount, $31 million.

This government has clearly not decided in favour of the principle of equity, although when he was campaigning for re-election three years ago the Premier talked about it. At that time he said, “The government is committed over the next three years to enriching the Ontario property tax relief system so that all but the most wealthy pensioners have all their property taxes reduced, no matter where they live in the province.” Three years later the most wealthy pensioners have their property taxes reduced the most.

The chart contained in the budget paper tells the story: For those with incomes of $5,000 per year or less, the new grant system provides increased assistance of five per cent toward payment of their total property taxes. For those with incomes of more than $20,000 per year, the new grant scheme provides increased assistance of 1,000 per cent towards payment of the total property taxes of this group.

We believe this scheme is unjust, inequitable and, quite simply, wrong. It should be amended to ensure that at the very least no pensioner in Ontario receives less under the new scheme than he or she received under the old system.

It is also worth remembering what this new assistance plan is really all about. It is politics. The Premier and the Treasurer want to be able to send out their cheques twice a year to the pensioners in Ontario with their names on them, and for this the most needy of our old people will receive less benefit.

The Treasurer, under persistent questioning, finally admitted that this new scheme is going to cost more to administer than the existing tax credit plan which is administered by the federal government. There is no limit to the moves this government is prepared to make to stay in power.

3:50 p.m.

I want to turn to another group that in my judgement is seriously in need of assistance and has been neglected by the government’s budget, and that is the young people of this province. In fact, nothing of substance is proposed for the 340,000 people currently unemployed in the province.

In March, the unemployment rate in Ontario was almost eight per cent. Forty-six per cent, or 157,000, of the unemployed are young people under age 25. Equally appalling, the number of unemployed in their peak earning years, from 25 to 54, who are often the sole support of their families, was almost as high, 155,000, for almost another 46 per cent of Ontario’s unemployed. Yet for the fourth consecutive year, acknowledging that the unemployment rate is expected to rise in Ontario this year by almost 11 per cent, this government has not introduced even one permanent job creation proposal.

The Treasurer expects the labour force to grow by 92,000, yet predicts employment growth of only 59,000, meaning at least an additional 33,000 people will be added to the number of unemployed in this province, without considering layoffs and permanent job losses. That is optimistic, according to the Conference Board in Canada, which forecasts employment growth of almost 20,000 less than the Treasurer -- only 40,000 jobs for Ontario in 1980.

Direct job creation programs are essentially and desperately called for and we have ideas how to do it. The do-nothing attitude is simply not an acceptable response to the continuing, record-high unemployment levels.

Youth unemployment is now at the highest level we have experienced in this province since the Depression. The 157,000 unemployed young people in March represent an increase of 23 per cent over last month alone, yet the government is proposing to spend a total of $1.7 million less this year than it was prepared to spend last year for youth employment programs.

This brings up another astonishing point. How is it possible for the government to underspend its budget for youth employment programs by $2 million last year when 147,000 young people were unemployed in July 1979? If the private sector didn’t take up the programs fully, surely it was the government’s responsibility to fill the gap, rather than let our young people go without work?

The government’s approach to the critical problem of youth unemployment is both heartless and cavalier. The implications of a generation beginning their working careers with the experience of being unable to find a job bodes very poorly for the future. This problem demands and deserves a real solution.

One way to alleviate the problem is to implement meaningful apprenticeship programs. It is incredible to me that we have been importing skilled workers into Ontario for decades to fill shortages we knew existed and would exist in the future when we have hundreds of thousands of unemployed people in this province who could be trained to fill those jobs. Indeed, industry cannot attract enough workers to Canada and is desperately short of skilled manpower. This government’s response has been to talk about apprenticeship programs, but that is virtually all that has happened over many long years -- talk.

This year the throne speech once again states: “Proper manpower development and deployment will be of utmost importance as one of the cornerstones of a healthy and growing economy in the 1980s. The key area of focus will be to produce sufficient numbers of skilled personnel from within our own work force to meet the needs of the Ontario economy.” The budget devotes a whole paragraph to the same theme.

Since 1963, about the time the member for Brampton became Minister of Education, at least half a dozen government reports have strongly recommended expansion of alternatives to formal institutionalized educational training. They have recommended enhanced apprenticeship programs. This year, after some 17 years of study, we get more talk when more action is what is needed. Action is long overdue.

As far back as the 1977 election, the Ontario Liberal Party came forward with a proposal for an improved and expanded apprenticeship program. More recently, in our industrial strategy paper we extended our programs to provide jobs for skilled workers and skilled workers for available jobs. In the light of government inaction it is appropriate that, in brief, I reiterate our position now,

We believe the education system and guidance facilities must be brought into line with current labour market reality. Our schools have failed to teach the skills and technology necessary to succeed in an economically lagging province. We must start being honest with the young Ontarians about the bleak job prospects in many areas. They must not be misled into believing that higher education automatically guarantees higher paying work. The traditional jobs just aren’t there any more.

We believe all students wishing to take specific courses must be made aware at the outset of their prospects of finding employment in the career they have chosen. Enrolment must be encouraged in areas where there is an identified shortage and severely limited in areas where there is a surplus of qualified people.

If this country and this province are to survive and prosper, we desperately need to benefit from the talents and skills of all our people. We cannot risk losing great numbers of Ontarians to other provinces and other countries because there are no career opportunities at home.

A proposed apprenticeship program is one way of increasing our skilled labour force and preventing a brain and talent drain out of this province. Thoughtful people are very concerned about this, because if the economy turns up again, and we all hope it does, we will not have the skilled people upon whom to build the economy of the future. We cannot just crank up again when we are losing our skilled people to other jurisdictions. Given the net migration figures out of this province that has to be a very serious concern.

Another way of preventing such a drain of our human resources is through imaginative employment programs. In our industrial strategy paper, we endorsed the experimental Employment Opportunities and Product Development program which was launched by the federal government in January 1978. The program expired in September 1978, but the results have convinced us that, if reintroduced by the federal government, the government of Ontario should participate directly in the program to increase funding and provide more jobs. This one program created 1,366 jobs in 770 companies.

Some of the results of that program are these: 49 per cent of the participating companies were small businesses with fewer than 20 employees; 42 per cent of the jobs created were in product design and development, something we desperately need here; 25 per cent of employers said the jobs created under the EOPD would be permanent; 17 per cent anticipated employment duration of between six and 12 months; 70 per cent of the participating firms were involved in manufacturing.

Many companies stated the program had enabled them to develop new products more quickly, penetrate new markets and increase sales volume. Many companies felt the program had improved business so that they were able to hire other new workers on their own account. The delivery of the program was widely perceived as rapid and effective with a minimum of paper work and red tape. Fifty-four per cent of the jobs were created in Ontario.

This program fulfilled a number of important objectives that we strongly believe in. It created jobs for skilled young people, stimulated research, development and design, and was particularly beneficial to the small business aid manufacturing sectors. It is the kind of creative employment program Ontario has badly needed for years but which the present government has never offered nor ever had the vision to see.

Something else suggested by my leader in the House some weeks ago is that we should assist the transition of auto workers, who are in trouble today, to work in the fighter aircraft industry. We need active involvement and we cannot sit back and say the state has no role. The state has a very definite role. We should be moving on that right now.

The Premier’s only response when asked was, “Well, it’s not a new idea.” In many respects, there are not all that many new ideas, but there are a lot of good old ideas the government has passed up. If that is a good one, they should be working on it immediately.

Another area related to skills training which received only two paragraphs of consideration in the budget is that of research and development. The Treasurer claims the measure he proposed -- an extension of the retail sales tax exemption for machinery and equipment to manufacturers in research activities -- “will reinforce the province’s commitment to expand the amount of research and development undertaken in Ontario.” I would like to point out that the government’s commitment to research and development in this province amounts to 0.018 per cent of this year’s budgetary expenditure. There are very few observers anywhere who do not bemoan the fact that we are one of the least technologically oriented advanced economies in the world. It is a major disgrace and it has to be a major priority for this government.

The government program was a pittance. The budget contains no measures other than the usual plea for federal government action: no incentives, no assistance to replace antiquated equipment in university or private research labs, no stimulus to small business and other industries to expand their existing research and development efforts or start up new activities. That tells us about this government’s commitment to research and development.

Let us not forget that we are most vulnerable in this province. We in the Ontario Liberal Party made our commitment to research and development clear in our small business paper three years ago. We expanded that commitment in our industrial strategy paper last year. Rather than simply asking the federal government to take steps, we are prepared to implement additional measures, especially for the small business sector.

4 p.m.

If the Treasurer wants to create a nursery for capitalists, I can tell him he has gone about it the wrong way. This is the single most important area where he should he putting his focus.

However, in order to avoid the confusion inherent in having different incentive packages offered by the two levels of government, we have made our proposals complementary to the federal measures already in place. We believe the federal measures do not adequately address the problem of maintaining existing R and D programs as opposed to expanding or initiating new R and D programs.

The 100 per cent write-off for all R and D expenses is really no better for current expenditures and only marginally better for capital expenditures than that offered as a general business expense for other manufacturing investments. The Ontario Liberal Party therefore proposed that Ontario offer an additional 50 per cent deduction, bringing the total deduction against provincial corporation tax payable to 150 per cent for R-and-D-related expenses.

We realize that federal measures are required to make such initiatives really meaningful, since additional deductions against federal taxes are worth far more than further deductions against the provincial corporation tax. We hope the federal government would join in the scheme. However, if it did not, we are prepared to go without it. This deduction would apply to all firms operating in Ontario, but in order to be eligible, foreign-based multinationals would have to guarantee that the product of the R and D would be developed in Canada rather than exported and developed and marketed elsewhere.

We know small businesses face unique cash-flow problems. They often suffer acute cash-flow problems and may not generate taxable income in the years they undertake R and D expenditures. A grant in the year of expenditure -- rather than an unutilized deduction that would be afforded a carry-forward provision -- is necessary. Besides, a business deduction discriminates against small companies because their marginal tax rates are lower. In sum, many small businesses do not generate any taxable income and therefore need cash, not credit. They are simply unable to take advantage of the federal credit to the full amount because they do not pay taxes.

Small businesses earning a profit receive a rebate from the federal government of up to 25 per cent of their R and D expenses. Those earning no profit receive nothing. The Ontario Liberal Party proposes that the province of Ontario issue a cash rebate equivalent to 15 per cent of R and D expenditures to Canadian controlled small businesses in Ontario. Any money received via the federal credit will be deducted from the provincial grant. The proposal would be an immediate, tangible and effective incentive to small businesses to undertake and continue research and development in this province.

The credit will cover all R-and-D-related costs, including personnel, materials and outside fees. The cost to the provincial Treasury would be partially offset by an increase in corporate taxes, not only from the firms receiving grants but also from other firms as a multiplier effect of R and D is felt throughout the economy. We believe that all tax incentives for R and D must remain in place for at least 10 years in order to provide firms with enough certainty and security to be effective.

This time frame is also important because R and D can be a long process from startup to product completion. The risk of failure exists throughout. Years of investment and development do not guarantee a marketable product and even successful projects may take years before they generate any real return on investment. It is essential, therefore, that tax incentives be co-ordinated between both levels of government and within government departments. What is given by one should not be taken away by the other.

That is our party’s commitment to R and D in Ontario. I say to the government and I say to the Treasurer, there is an urgency here that he has not recognized. He must move quickly. There is an integrated program for his consideration. He should have moved three years ago; he could move tomorrow if he had the imagination.

I want to talk about energy briefly. We have dealt with the energy problem in this province at great length in the last three budget responses because, as the House knows, it is one of the single most important issues facing this province. We are the highest per capita consumers of energy. We are energy consumptive and energy poor; we are importing about 80 per cent of our energy. Energy conservation rated two paragraphs in this year’s budget, one of which told us of the retail sales tax measures already in effect, and the other explained that the government’s enhanced commitment will represent 0.08 per cent of this year’s budgetary expenditure. It was more than research and development got, but not by much.

As the honourable members will recall, there will be the removal of sales tax on weather stripping, caulking materials and chillers.

Among the government’s proposals is one to remove the sales tax on cars that run on nonpetroleum-based fuels, none of which is available for sale in Ontario. By way of contrast, in February, my colleague, the member for Halton-Burlington (Mr. J. Reed), who is the expert in this House on these kinds of issues, despaired at the lack of imagination.

We have submitted more comprehensive proposals for energy conservation and for alternative forms of energy than they have ever seen. Were we in power, this province would be moving very quickly.

We proposed a comprehensive plan to develop a fuel alcohol industry in Ontario, based on methanol. Methanol can be produced in Ontario from wood, municipal garbage, the Treasurer’s speeches, farm crops, all of which are renewable, and from lignite and peat. A gradual conversion to 100 per cent methanol use in fuelling automobiles would reduce our oil consumption by a full 35 per cent. We have the resources to do it.

In fact, if the commitment to develop and distribute methanol were made today, we could make gasoline totally unnecessary as a transportation fuel by the turn of the century.

Our proposal is made even more attractive by the fact that even our wood requirements for methanol would be reduced by as much as 60 per cent if hydrogen were applied as a feedstock to the production process. Hydrogen would be produced on-site by the electrolysis of water -- an Ontario designed technology, using Ontario Hydro’s own off-peak or surplus power capacity.

The economic side effects of large-scale conversion to methanol are significant. We estimate that each commercial-sized plant would produce more than 2,000 new jobs, both directly and indirectly. Even a modest methanol production program of 13 plants could produce more than 20,000 jobs and almost $300 million in salaries which would be spent and taxed in Ontario.

The effect on the environment of this clean-burning fuel is enormous, as are the benefits of using our municipal waste in the process and replenishing our forests. We believe Ontario should consider a methanol development program to replace all gasoline use in the province. The program would involve joint federal-provincial funding to build at least one commercial-scale wood residue methanol plant in Ontario and 10 small-scale municipal waste plants.

Under such a program, discussions would begin immediately with the automotive industry to effect the necessary design changes in car engines for use in Ontario after 1985, so they can be compatible with both methanol and gasoline fuels. We continue to believe there is no valid reason why methanol cannot be phased into wide use in Ontario within the decade.

It’s time the government stopped tinkering and moved to implement a comprehensive and serious energy conservation policy, including the development of alternative plans. This is a particular case for bold and imaginative thrusts. Again, the government is wanting.

I want to speak briefly about the farming and tourism sectors, both of which are suffering from very high interest rates and from down-turns in our economy. It would have been less insulting if the Treasurer had done nothing, rather than offer them the token gestures he has included in his budget.

What he says in his budget is, “The economic health of Ontario’s farmers is always a matter of high priority with the government.” It is noteworthy that the agricultural budget of this government has been decreasing consistently as a percentage of total budgetary expenditures, and is now one of the lowest in all of Canada.

In 1977-78, the budget of the Ministry of Agriculture and Food represented 1.3 per cent of the total budgetary expenditures. In 1978-79, it decreased to 1.25 per cent. In 1979-80, it went down further, to 1.05 per cent. In fact, last year’s actual expenditure was down by $17 million from the proposed budget. They are not even spending what they are allocated. That would go a long way right now to help the interest rate problems suffered by some of the farmers and alleviate some of the hardships felt on a daily basis, not in the middle of next month, but now.

The budget projection for this year is about one per cent of the total budgetary expenditures. Coupled with no concrete measures on interest rates, it is clear that the government expects fanners to fend for themselves.

This budget, like this government, takes an ad hoc, hit-and-miss view of our problems and our potential. It is the budget of a government bereft of ideas, of imagination, of incentives, of good sound leadership, and it is bereft of good management. It is the budget of a government whose only priority is to retain power. In a time of great economic and consequent social uncertainty and change, it is very disturbing that the government would let all of these matters lie fallow.

4:10 p.m.

We in the official opposition have proved that our approach is different. As the opposition of this province -- and I point out to my friends on the left, the only opposition in this province -- we have produced more solid, comprehensive policy positions in the last three years than this government has done in a decade. That is something I am incredibly proud of. There is not an issue this party has not put its resources behind, the brains in this party and a lot of help from a lot of outsiders to produce comprehensive policies. We have yet to know what the NDP thinks about anything.

Nothing new has been done by them in the last 10 years. We are not afraid to stand on anything we have done in the party in the last 10 years. We are proud of it. We are prepared to go to the people tomorrow with the programs, with the vision and with the views we have shared with the people of this province.

We introduced a comprehensive small business policy three years ago. We introduced a policy on tourism. We have introduced a policy on education which the government stole -- and that is their prerogative. Steal some more of them. They are wonderful programs.

Mr. S. Smith: They did with small business.

Mr. Peterson: They steal them all. That, of course, is one of the problems of being in opposition, but we don’t mind because we will continue to think of them.

Recently, we developed a serious proposal on interest rates. This is a major omission from the budget this year. It is the major issue of the day, bar none. I am talking about today, I am talking about next week and I am talking about the week after that. We all share the view, I think, that this problem will hopefully go away. Most economists tell us it will start to disappear later on this fall and in the next year, but that is not good enough because there are real, serious and immediate problems. This government cannot continue to deny responsibility for this issue and push it on to the federal government.

I would agree with the Treasurer that national initiatives would be best, but in the absence of federal programs to alleviate this critical and immediate problem this government must accept the responsibility and act. A discussion paper to review the alternatives and analyse national policy alternatives is just not adequate.

If this government does not consider itself responsible for home owners, small businessmen and farmers in this province then for whom is it responsible? We will be discussing the government’s abdication of its responsibility in this area much more fully when we debate our want of confidence motion on Thursday night. I don’t want to be repetitive, so I will keep the majority of my remarks on this very critical issue for next Thursday night. It will be very interesting to see what our friends from the NDP have to say next Thursday night when they will bemoan the state of the economy, when they will scream and yell about the sorry state of home owners, small businessmen and farmers in this province, but then when it comes down to the crunch they will all line up and say, “Aye me, Aye me, sir,” and vote with the government. This is too critical for them not to act on at this moment.

We in the Ontario Liberal Party believe the current record high levels of interest rates constitute an emergency situation. It is our view that immediate action must be taken to remedy the crisis. Certain segments of our society facing mortgage renewals in the 1980s and small businessmen and farmers facing bankruptcy must be assisted through this potentially disastrous period. We have proposed a short-term interest rate program specifically designed to provide immediate assistance to those most in need. Our program would be retroactive to April 1 and would last to December 31, 1980.

I can only continue to try to impress upon this government the urgency of this critical problem. In my own area of southwestern Ontario business bankruptcies in February of this year increased by 46.3 per cent over the level in February a year ago. For the province as a whole, including the poorer eastern and northern regions, business bankruptcies in February rose by an incredible 52.2 per cent to 242 bankruptcies over the same month in 1979.

The damage a situation like this can do to the viability of our small business sector is devastating and has serious implications for the future health of this vital segment of our economy. It is these small businesses that are being hit the hardest. They are usually Canadian owned companies and it is to them we must look if we are trying to regain control of our economy and build a strong domestic industrial base. If we cannot ensure their future prosperity we will not be able to ensure our own.

We in our party believe very strongly in the importance of this sector and our industrial strategy paper proves that commitment. We believe foreign domination of our industry, particularly in the manufacturing sector, is one of the main causes for what the Science Council of Canada sees as the “sluggish industrial development, perhaps even the deindustrialization of Canadian society.”

Much of Canada’s manufacturing is concentrated in Ontario and much of the control of this sector is concentrated in the hands of foreign multinational corporations through branch plants established in Canada in order to overcome tariff barriers to goods entering this country. Designed to serve the domestic market, branch plants frequently discourage the emergence of Canadian owned firms in the same industry. The essential problem of a branch plant economy such as ours is that we cannot control it and the economic objectives of the multinational corporations seldom coincide with those of Canada or those of Ontario.

Foreign multinational corporations are not interested in the development of Canadian markets overseas, in making Canadian industry more efficient and globally competitive. This would be a direct contradiction of the purpose for which a branch plant was established in the first place.

Perhaps more importantly, a branch plant economy and a branch plant mentality perpetrated by that government entails low levels of research and development undertaken by subsidiaries in Ontario. Canada spends far less on research and development -- we have dealt with this earlier -- and it is far more dependent on foreign sources than most of the industrialized countries in the western world. Largely as a consequence of this low level of spending, the development of entrepreneurial skills and expertise is inhibited. For the multinational it is more economical to develop technology at home and to export knowhow and professional managers to its Ontario subsidiary.

This may initially appear to have some advantages for us in terms of receiving a ready-made package and therefore not needing to invest in such development ourselves. However, in the long run this process serves to increase our dependence, for we have neither the base nor the expertise to build on. Because technology is supplied directly to the subsidiary we may ultimately receive no usable benefit at all.

Industrial research has been largely marginal, rather than innovative of basic work. This has wide repercussions for our international position, the lack of indigenous, innovative industrial research and technological development in this country, especially in this province, has placed us at a distinct disadvantage in terms of global competition.

Another consequence of the small amount of research and development has been the emigration to the United States of Canadian-born engineers, scientists and technical people. It is a circular problem, a vicious circle. It is the lack of ongoing research work that eventually compels Canadians to seek better opportunities elsewhere, yet we need those experts to rectify the problem.

It is evident that Ontario’s industrial structure must be strengthened and that time is very much of the essence. Independent, Canadian owned and controlled industries must be encouraged, developed and supported to the full extent of the resources available to us. It is these industries that will make the economic decisions which will best serve our interests.

The government has begun to talk about the importance of Canadian owned and controlled businesses in our economy and even has begun to make small, token gestures in that direction. However, at the same time it has continued to make an even larger real gesture to foreign companies, urging them to come to Ontario and take what they can.

I want to show members an ad that appeared in the Dallas Morning News on Friday, April 11, 1980. It said: “Where in the world is Ontario? Where in the world was the telephone invented, insulin and the electron microscope? Where was Pablum invented?” This Treasurer invented Pablum in his budget of last Tuesday night.

Then it goes on to say: “You can make money in Ontario, you can make money with Ontario. What’s more, you can bring that money home safe and sound.” Of course we know the effects of that, later in the year, in the fourth quarter when we start shipping moneys across the border -- the royalties, dividends and all the money in the services account. We see the Canadian dollar take another dive, one manifestation of the ill effects of a foreign owned economy.

4:20 p.m.

It is the same old thesis: run around the world cap in hand trying to buy off the problem for another few years. But no matter what we do, the extension of that policy is wrong. Granted we aren’t going to rectify that tomorrow, and granted there is still a place for foreign investment, but as a principal emphasis for this government it is completely wrong, because all we are doing is further selling out the heritage of our children.

If one thinks we have problems today with mounting debt, with the energy problem, let me say the problem of our foreign owned economy is going to be much more serious 10 and 20 years from now. Their approaches are short term and superficial. Their emphasis is on the wrong place.

Perhaps this is the clearest indication that this government has really decided the old ways are the best ways, which are the ways they know best, and they want to continue encouraging this branch plant economy.

The publication earlier this year of a book called The Profit Centre, is the slickest and most expensive campaign we have seen in this province to date to attract foreign ownership. The government spent $138,750 printing 15,000 copies of this item at $9.25 each to give away to prospective investors. It is a handsome book and it promises to assist the foreign investors in getting around the law. It promises to assist them in getting their money out of the province. Never once, does it mention the kinds of real commitment we need to this province in the manufacturing sector in order to make it grow. It says that in five years of operation the Foreign Investment Review Agency has allowed 92 per cent of all applications and if they have trouble the government will help them.

Another great program is the creation of the Employment Development Fund last year. It is further evidence of the government’s priorities. In last year’s budget, $200 million was set aside to assist large corporations, most of which are doing very well. They are going to do even better. This year, less proud of his program, the Treasurer sort of buried it in his budget and quietly mentioned he is adding another $125 million to his fund.

I will ask you, Mr. Speaker, because the Treasurer doesn’t understand it, to check that budget. He doesn’t chalk that up as a current expenditure, be chalks it up as a capital investment. That is one of the most ridiculous accounting principles I have heard of. If you talk about the creative accounting methods of this government, you have never in your life -- and I know you personally have a great deal of experience with this -- seen a government better able to masquerade the truth than this government.

It is noteworthy by way of comparison that small business got a grand total of $4 million last year through the small business development corporations and is projected to get no more than $10 million this year. It should also be mentioned that in dollar terms 45 per cent of the Employment Development Fund grants went to foreign owned corporations. Just look at some of the firms the government felt needed its assistance to expand in Ontario: Dominion Twist Drill, a US company with a 1979 profit of $189 million, received a grant of $450,000. Hayes-Dana Incorporated, another US firm which was able to increase its dividend last June to 48 cents a share -- surely at least some measure of a prosperous operation -- just received a grant of $1.5 million. Westinghouse Canada Incorporated, also based in the US, increased its dividend from 50 cents to 62.5 cents in December, recorded a profit of $26 million and received a grant of $1.6 million from the government of Ontario.

Of the Canadian firms receiving money, the largest amount went to the pulp and paper firms. These companies refused to clean up and modernize their operation without government assistance despite the fact that all of them had healthy profits last year. Some even threatened to close down their operations altogether, so this government obliged them. Rather than standing firm, using the power it has, and it has a lot of power -- who controls the timber rights and the cutting rights in this province? -- rather than insist the companies comply with the pollution regulations and the laws of this province, the government backed down and let the industry walk all over it.

The E.B. Eddy Company received a grant of $16.6 million from Ontario, even though its 1979 profit was $77 million. During the year ending December 31, 1979, its net income rose by 30 per cent and in January this year dividends rose from 26 cents to 31 cents. Domtar received $10.5 million in grants while recording a 1979 profit of $98 million and a year-end increase in net income of 55 per cent.

Great Lakes Forest Products Limited, a subsidiary of Canadian Pacific, got $25.3 million while recording a profit of $50 million and after announcing, a year ago, a dividend increase to $1 per share.

Finally, Abitibi-Price Incorporated received a grant of $15 million after having a profit of $115 million in 1979 and after announcing that in the nine months ending September 1979 its net income rose by 51 per cent. They also managed a dividend increase from 35 cents to 40 cents. After receiving the grant, Abitibi-Price announced an agreement to buy $20 million worth of paper machinery in Finland.

We are giving huge amounts of money to firms which are profitable, which have made a habit of polluting our environment and which spend our money on foreign products. On top of all this, these grants to the pulp and paper polluters are going to pay for the loss of 600 to 800 jobs.

We have suggested before that the EDF would be more aptly named the unemployment development fund or, if you want to keep the initials, the employment depletion fund.

Hon. F. S. Miller: The member should give that speech in Iroquois Falls.

Mr. Peterson: I’ll give it in Iroquois Falls. I am not like you. I don’t have different speeches wherever I go.

The government has steadfastly refused to make public the contracts with any firms receiving EDF money. Apparently the contracts contain details about the number of jobs to be created -- or in some cases lost -- job training commitments and capital investment intentions. We believe each contract should contain commitments by the firm receiving government assistance with regard to research and development here in Ontario, exports from Ontario, the number of skilled jobs to be created, procurement of parts and components and machinery in Canada, subcontracting and reinvestment of those profits here in Canada.

One of the offshoots of what the Treasurer has done is he has turned every corporate manager into a beggar. He has rewritten the handbook on free enterprise, and no corporate manager worth his salt today can go back to his board of directors if he has not come begging to the Treasurer and his little discretionary committee that makes these decisions.

The Treasurer has helped to corrupt the so-called ethic of free enterprise, which presumably his party has stood for over the years, more than anyone. It is a distortion of that system, and when that money runs out they will not have any more friends. It is like the poor old lady at Hallowe’en; when the candy runs out the kids do not come any more. That is what is going to happen here.

Mr. Haggerty: That’s a good analogy.

Mr. Peterson: I just thought of it. It was quite good, wasn’t it?

Mr. Haggerty: Very creative.

Mr. Peterson: One positive, constructive way of encouraging Canadian companies to grow and prosper is though a government procurement policy. This government is content to give Canadian business a meagre 10 per cent preference, an amount any medium-sized foreign firm can easily afford to underbid, especially since the preference often only applies to a component of a product. We in the Liberal Party believe that meaningful procurement policies are essential. We believe that a captive domestic market is crucial as a base upon which domestic firms can build and become strong and large enough to expand internationally. The only way to guarantee this domestic market is through procurement policies.

In our industrial strategy paper we proposed that a Liberal government in Ontario would undertake all of its purchasing, wherever possible and reasonable, from Canadian controlled firms or from foreign controlled firms which comply with the code of corporate behaviour which we developed. Those firms would receive preferential treatment as to the price vis-à-vis imports and noncomplying foreign firms. This preference could extend to as much as 40 per cent in some cases.

Our primary objective is to support Canadian manufacturing firms. To this end, qualifying firms would have to obtain a certificate from the government stating that at least half of the value of their product is added in Canada. This purchasing policy would extend to all the arms of government, to Ontario Hydro, the hospitals, the colleges and universities.

We would never let a situation arise like the one that occurred last spring when a small Canadian company, Canadian Applied Technology -- you will recall this, Mr. Speaker, because it was a matter of some discussion in this House -- lost a Ministry of the Environment contract even though the president was told his system was adequate to do the job, his bid was the lowest and his bid had the highest Canadian content; 82 per cent versus 32 per cent for the winning bid by a firm based in Texas.

The ministry’s technical evaluation committee managed to get to Texas to evaluate that proposal, but it could not make it to Buttonville, just north of Toronto, to assess the Canadian proposal on site. How they love to travel!

4:30 p.m.

The minister’s letter to Canadian Applied Technology, which explained its rejection, was written only after pressure in the House and was full of such terms as, “there was some doubt,” or, “we did not feel” -- hardly objective terms for rejecting a Canadian contract bid. It was not as if this company’s work was unknown; it had previously successfully completed several contracts for the same ministry.

While this government talks up a storm about buying Canadian, its actions demonstrate the reality: This government simply didn’t have enough confidence in this firm to support it over a big American competitor, even though it had proved itself in the past and it was judged more than adequate to do the job. If we don’t support our own companies, how can we ever expect others to? The government here has a very important lead role to play.

The Ontario Liberal Party has been trying for two and a half years to get this government to accept the Small Business Act or introduce its own. We believe small business in Ontario deserves our legislative support and commitment. We also believe that before we can take seriously either this government’s commitment to buy Canadian or its alleged commitment to small business, it must begin to differentiate in its own purchasing between Canadian owned and operated businesses and subsidiaries of foreign multinationals. Let me tell you, Mr. Speaker, other governments around the world do it; why do we have to be so generous?

Our Small Business Act has a definition which provides for such differentiation. Our act also establishes a standing committee of the Legislature to look into and report on all matters relating to small business. The fiasco of Canadian Applied Technology’s rejected bid would never have happened had our act been in place.

The House is familiar with another giveaway this year, on a smaller scale than the Employment Development Fund but with the same remarkable lack of soundness and logic and that was the sales tax rebate on automobiles. The Treasurer allocated some $15 million for this program and ultimately ended up spending something like $8 million or $9 million to assist car dealers to clean up their 1979 car inventory during the month of February. Frankly, no one in the House, be it in this party, my Socialist friends to the left, or even in the Treasurer’s own party, could understand that program.

He explained that he was jogging around Queen’s Park and his brains were rattled and he came back and presented this program to his officials and made them implement it. Of course, there are other explanations. One is that he is a used-car dealer by training, by persuasion and by predisposition. It proves you can take the chap out of the used-car lot, but you can’t take the used-car lot cut of the chap. I don’t know what the explanation is. Perhaps my leader, who has certain training in analysing these kinds of things, can be of assistance.

Mr. S. Smith: It is beyond me, I am afraid.

Mr. Peterson: It is beyond him. The Treasurer is beyond help. We should commit him to an institution and leave him there. In reality, what he did was punish the efficient car dealers who had already sold their 1979 inventory without his help. They were faced with cancellation of their 1980-model car orders from customers who wanted to take advantage of the rebate. It was the inefficient dealers who reaped the benefits. They were saved from having to lower their prices to get rid of their 1979 inventory. For a man who professes to believe in market forces, his scheme was the most misguided interference in the marketplace and represents a gross misuse of public funds, a terrible misuse of public funds.

It was not only wrong in principle, it was implemented without proper controls, so it was easy to find cases of abuse. Some dealers took advantage of the rebate scheme to raise their prices on particular cars, after the plan came into effect, and reap a windfall. Others imported cars from across the border and took advantage of the program. What progress was made in monitoring these abuses and seeing that remedial action was taken? There was none.

What were the real results of this foolhardy scheme? The Treasurer reports that more eight-cylinder cars than usual were sold. That means the government was using public funds either to subsidize buyers who wanted to purchase gas guzzlers or to subsidize car dealers to get rid of these white elephants. In either case, it seems to me there were other industries suffering from an unusually mild winter who had a far greater inventory problem and had as great a claim on assistance.

What about the snowmobile industry? What about the cross-country-skiing industry? What about all those tourist resort operators in Collingwood who were crying this year? How can the Treasurer possibly single out the car dealers for this assistance in inventory clearance?

It was unjust and it was inequitable. I can tell the House, a government which brings in that kind of a program loses credibility not only with the opposition members of the House but also with its own members. Many government members have told me privately they thought it was a ridiculous program and couldn’t imagine what kind of funny tobacco the Treasurer had been smoking that day. They couldn’t understand it and now he has no credibility.

Despite all this, the Treasurer claims the program was a success, with no serious repercussions for the 1980-model car sales. I would caution him that it is rather early to come to such a conclusion. I would remind him of the Canadian Tax Journal study that came out after the sales tax cut in 1975 which said the one effect was that the future sales would slump, essentially because the people changed the timing of their purchases, not the volume. It didn’t sell any more cars; it only accelerated purchases.

The final point is that this scheme had no impact whatever in the all-important area of car production. In fact, Canadian automobile output in the first three months of 1980 was down 29 per cent from a year earlier.

While I am on the subject of misuse of public funds, I want to talk briefly about land assembly. In the early 1970s the government began buying up land for the new industrial sites for new cities it envisaged in the near future. John White, sitting in his office, had this new vision for Ontario. In 1974, the government bought the Edwardsburgh site in eastern Ontario for over $7 million. The proposed industrial site was never developed, and in 1978 the Edwardsburgh assembly was transferred to the Ministry of Natural Resources at a book value of $8.8 million for a not-so-successful experiment in growing trees. Some trees were already there.

But that’s not the end of the Edwardsburgh story. Several weeks ago the Minister of Energy (Mr. Welch) announced Edwardsburgh’s third proposed incarnation -- none of them has actually taken place yet. Edwardsburgh is to be studied to assess the feasibility of producing methanol and other forms of renewable energy from wood. It would be nice if this proposal, or some other proposal yet to come, justified buying the land in the first place.

In 1975, the government spent over $30 million buying land in South Cayuga that wasn’t needed and still isn’t needed. To date, the government has spent over $34 million acquiring South Cayuga and $7.5 million carrying it.

The most recent and expensive unnecessary land assembly which has come to light is North Pickering. There the government spent well over $270 million before deciding to shelve the proposed community indefinitely. It should have realized the project was not required in 1975, when the Pickering Airport was cancelled, but it took it until the spring of 1980 to, as the Minister of Housing (Mr. Bennett) so aptly put it, “know enough to cut your losses and not be foolish enough to extend them.”

As of March 31, 1979, the Ontario Land Corporation reported over $481 million invested in land assembly. Was any of it worthwhile? According to a study undertaken by the Toronto Real Estate Board, “land values would have to double in the next seven years for the Ontario Land Corporation to break even on its investment. In 1985, the Ontario Land Corporation will have over $650 million tied up in these three properties alone -- Townsend, North Pickering and South Cayuga, even if it does not buy one more acre.”

Our party has moved through public accounts for a complete investigation of this and other fiascos in the land assembly business. We expect to subject this to thorough scrutiny, hopefully sometime this fall, in a committee wider the able chairmanship of my colleague from Rainy River (Mr. T. P. Reid).

Minaki Ledge is another example of total mismanagement and misuse of public funds. What is remarkable about this one is they can do it with no shame. In 1974, the government acquired Minaki Lodge in order to protect the loans of about $600,000 advanced by the Northern Ontario Development Corporation. It was estimated by the government that, including NODC loans and operating costs, the ledge could have been written off for about $1.5 million in 1974 instead of buying it. In the summer of 1974 the ledge was closed because of major renovations that proved unnecessary. It has never reopened.

To date, the lodge has cost $8.5 million and the government has now decided to spend a further $10 million in the hope of opening it in two years. That will push the total renovation bill to $23 million at least, and our judgement is that it will be far more than that. If it is ever reopened, it will certainly cost more to stay at Minaki Lodge than the average Ontario tourist can ever afford.

4:40 p.m.

This is the kind of behaviour we have come to expect from those so-called “great managers.” Mismanagement has become ingrained. It has been managed for political reasons, not for substantive reasons; rigor mortis has set in.

This budget is further evidence, if such were needed, of the inefficiency, ineffectiveness and ineptitude of this government. This patchwork budget has nothing in it for northern Ontario, nothing in it for eastern Ontario, nothing for our young people, and nothing for the average family frying to make ends meet in very difficult times. In fact, despite the Treasurer’s proud claim of “no tax increases,” his own figures show that even without changes in tax rates the average Ontario family will pay something like $235.50 more in provincial taxes this year. What is given is either so little as to be absurd or is given so inequitably that it hurts those who need the help the most.

I want to close with just a quote from a marvellous article -- at least from my point of view -- which appeared in the Toronto Star and was written by Jean Edward Smith. I thought it capsulized the whole thing very well:

“Instead of dynamic economic and social leadership, the best Davis can offer is the patent smugness of decades of responsibility -- the fatigued, churlish arrogance of too many years at Queen’s Park which confuses the victories of yesterday with the battles of tomorrow.

“Encrusted by years of power, today’s Tories have confused bureaucratic tidiness with good government. The slickness the Tories brought to Queen’s Park once concealed a dynamic almost crusading drive to move forward. Today the retention of power rather than its exercise is all that is left.”

Where is George Drew or Leslie Frost or John Robarts when we need them? They would be very much embarrassed by what has transpired in the last decade, so it will come as no surprise that I am going to move an amendment to the budget motion.

Mr. Deputy Speaker: Mr. Peterson moved that all the words in the budget motion after “that” be struck out and the following substituted therefor:

“This House finds that the government’s failure to implement an economic strategy has contributed significantly to the economic decline of Ontario. It criticizes the government for a decade of irresponsible spending practices and high levels of public debt. It condemns the government for giving public monies to companies that have no need of such grants, especially without guarantees of important benefit to Ontario in terms of job or wealth creation. It indicts the government for its failure to introduce programs to ameliorate record high levels of unemployment, especially among our young people. It deplores the fact that, in provision of additional assistance to senior citizens, the government has chosen to do so in an inequitable manner, giving less to those most in need.

“And further, this House finds that the government lacks the ability and the leadership to respond to the challenges facing Ontario. It has failed to provide policies to support research and development activities, to assist and encourage Canadian owned enterprises, to train our young people to meet the skilled manpower needs of industry, to promote conservation programs and alternative sources of energy.

“For all these reasons, this House declares it has no confidence in this government.”

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

THIRD READINGS

The following bills were given third reading on motion:

Bill 32, An Act to amend the Telephone Act.

Bill 33, An Act to amend the Public Transportation and Highway Improvement Act;

Bill 34, The Elevating Devices Act, 1980.

Mr. Nixon: On a point of order, Mr. Speaker: Perhaps you could use your influence to have the lights dimmed a bit now that the main business has been completed so successfully?

RAILWAY FIRE CHARGE REPEAL ACT

Hon. Mr. Maeck moved second reading of Bill 38, An Act to repeal the Railway Fire Charge Act.

Mr. Deputy Speaker: Does the honourable minister have an opening statement?

Hon. Mr. Maeck: A very short one, Mr. Speaker. This bill provides a step forward in this government’s commitment to deregulate. It repeals a tax, outdated by today’s standards, which provides minimal revenue and which is applicable to only 29 taxpayers who are inequitably taxed when compared to other similar taxpayers in the unorganized areas of Ontario.

Only one of the four major railroads operating in northern Ontario is liable for this tax. Such railroad lands will still be taxable for provincial land tax purposes, a tax which, because of its base being established on assessed value, is more capable of recovering all service costs, including fire protection.

This bill will preserve the public’s right of access to these lands for hunting and fishing purposes, but will remove a tax of questionable value which affects few taxpayers. It is in complete accord with both this government’s and the ministry’s commitment to deregulate.

Mr. Haggerty: Mr. Speaker, I want to address myself to this bill, An Act to repeal the Railway Fire Charge Act. I was listening to the minister’s comment when he said it is a matter that relates to the deregulation of certain acts or amendments or sunset laws. He said the legislation may be out of date.

If I look at the background information which the minister was so kind to provide me with, I suppose it relates to the old steam locomotives that used to run across the railroads in Ontario. Many of them in those days didn’t have a fire arrest to control the sparks.

It may seem to be outdated, but I would have to question the minister about the matter of the Mississauga train wreck. The background information does give a summary of the fire statistics related to accidents on railroads. It mentions brake shoes. If one looks at a brake shoe on a locomotive, or even on an oil tank car or any other boxcar or freight car, that can cause a fire. I suppose it could cause a serious railroad accident. With the chemicals that are being transported on railroads, this could cause rather a serious fire. We’ve seen it in Mississauga.

I can relate one case to my area. At one time, my riding used to take in the municipality of the town of Pelham. I can recall a train accident back in the 1970s. That has never been settled yet. I can’t recall that any of the property owners were compensated for the damages that occurred then, This relates to crown land and railroad lands that are owned by the railroad and those tenants who may be renting land from them.

It goes on to mention the steam locomotives and diesel locomotives. I suppose there are a certain amount of hot sparks that can come from a diesel engine that can cause fires. So I question it when he says it is outdated legislation.

4:50 p.m.

I am beginning to think there is more of a need today to amend the act to include revisions so that where there is a fire which originated from an accident or an incident along a railroad and where damage does occur, that person can be compensated instead of having to go to a higher court to try to get a settlement. I suggest that when the minister repeals this act we should be looking for a revamped act there.

The matter was raised about the loss of almost $89,000 in revenue generated from this. It may come from about 29 property owners who share the land with the railroad for the services provided. I don’t know who provides the fire protection. It relates to an unorganized municipality. The Ministry of Natural Resources may be called in to fight a fire and put it out.

Surely there is going to be some cost involved if 100 persons are sent in to fight a fire that has occurred along the railroad track. Somebody is going to have to pick up that cost. So I suppose when one looks at $88,000 or $90,000 that we don’t generate from those persons who receive the benefit, it means that perhaps we would be looking to the consolidated revenue fund to pick up this cost.

When I look at the number of acres of land which is owned by the railroad in northern Ontario, and even in southern Ontario, it is a considerable amount. We look at the certain tax concessions that are given on municipal taxation for assessment purposes, and there are some benefits given, because they are not really assessed for the value of the land. They can sit on valuable land that could be used for development purposes such as industrial sites but they don’t have to move that land in a sense. Yet in the case of a fire, a train wreck or something, special people such as a fire department or emergency crews have to be called in. There is usually a cost.

In southern Ontario, through municipal taxation, they do pay for fire protection. Again, I think of the Mississauga fire. Will they actually get the true cost of that fire to the municipality? I don’t think we’ll find that true cost because that fire burned for almost a week, and involved all the fire apparatus and special firemen. I wonder if we should not be updating the legislation when we appeal this so that provisions are in there for a special charge for those who need special fire services.

As I said, on unorganized territories I know the government has now come forward with policies under which it is buying fire equipment for unorganized municipalities. I imagine a volunteer fire department is going to be called out and could spend days fighting a fire in northern Ontario. These men are going to be losing considerable wages. Who is going to pay that cost?

I know some industries in southern Ontario where, when a volunteer fireman leaves his place of employment for one or two hours, or four hours a day or two days, normally there it is the practice that the company will pay his wages. Maybe some companies in northern Ontario can’t pay those wages. So I think the government is repealing something here because it relates to the old steam locomotive, but when I look at the accidents related to locomotives and equipment travelling on railroads, there is quite a number of accidents.

For example, for brake shoes, the number of fires is 192. This relates to the 1976 statistics. For diesel locomotives it is 56. They have steam locomotives here as well. They do not show the acreage but they list eight fires. Are there still steam engines in northern Ontario? Maybe there are. They may be around some mines or in someplace like that. The figure for journals, related to hot bearings, is 10. Fuses are another area. If one travels by train one knows there is a fuse box located in the passenger car. I imagine there are some located in the locomotive itself. It is quite a good-sized fuse box. I suppose they can burn, create a fire there and maybe throw out a hot fuse which may catch on fire. There is a list of them there. Power lines along the railroad, for that matter, can cause fires.

I can say we support the bill in principle, but I think the minister should be looking at a new bill that is really going to cover the cost of providing this new protection. Once it is removed, he is going to have to pick up $88,000 or $90,000 and perhaps take it out of consolidated revenue. Other railroads have not been paying the tax when they probably should have. That is where the minister should have been making amendments so that everyone was treated alike in Ontario, regardless of what railroad it is.

We will support the bill repealing the act, but I would suggest the minister should be looking forward to bringing in a whole new bill that covers all accidents along the railroad. If a property owner has some damage done either by an acid soil or another problem along the railroad where there is an accident, sometimes it takes him years to get a settlement in compensation for the damages done to land. This is where we need an act whereby these persons shouldn’t have to fight different levels of government agencies to be compensated for the damage.

I said we would support the repeal of the act, but I am hoping the minister will be bringing forward new legislation to give coverage. I can also agree with the minister on the subsection he is going to put in under the Game and Fish Act. The new subsection 10 says: “Except in accordance with a system established and approved by the Lieutenant Governor in council, no patentee of railroad lands and no owner or tenant who is a subsidiary or affiliated with a patentee of railroad lands shall charge any fee for the use of his railroad lands for the purpose of hunting and fishing.

I commend the minister for putting this particular section in under the Game and Fish Act so that there will be no charge to any person who wants to use those lands for hunting or fishing purposes.

Mr. Charlton: Mr. Speaker, my understanding of Bill 38 is somewhat different from that of my colleague from Erie. It is my understanding -- and the minister can perhaps clarify all of this when he wraps up second reading debate -- we are in this instance talking about repealing a charge which creates for some people a double charge.

It is also my understanding that in those instances where a fire in the unorganized areas is attributed to the railway they are charged for the costs of handling that particular fire. In the minister’s note he says,

“In addition, persons held responsible for fires are charged for the cost of service,” meaning the cost of servicing that fire; that is, putting it out. Perhaps the minister can clarify whether anybody who is now covered under the Railway Fire Charge Act in future will have the full cost of fighting that particular fire which he may cause charged to him, regardless of the fact that this act has been repealed.

I also take it from the minister’s notes on the bill that although it doesn’t specifically say so, the costs of the fires that are caused by railways would be in the millions of dollars as opposed to the $88,900 which would be collected from the Railway Fire Charge Act tax. It would seem to us, most likely as a result of that, any other method which is used which would recoup a more satisfactory amount of the costs of putting out that particular fire than the obvious amount in this act which in no way reflects even a small percentage of the total cost of putting out the fire.

5 p.m.

We are going to support the bill because, first of all, we do not want railways that have their land grants from the province charged in a different fashion and charged more than federal railways and other land owners in the unorganized areas of northern Ontario. We want to see them being dealt with fairly and in the same fashion as everyone else.

I might comment, before I conclude, that as soon as you put “railway” or “tax” or “charge” into the name of the bill everybody wants to know if we can move an amendment to that bill to include something else. I was asked if we could amend this bill to extend the GO service and if we could amend it to repeal the income tax in Ontario. Unfortunately, I had to tell my inquirers that we could not, but it was a nice thought at any rate.

We are going to support the bill. It seems that the minister will confirm the things I have suggested and that this will be a fairer way of dealing with it. They will probably recoup closer to the real cost of some of these fires, and the railways in question will be dealt with in the same fashion as everyone else.

Mr. B. Newman: Mr. Speaker, I do not intend to be lengthy if the minister replies to the question I pose to him. Does this bill deal solely with unorganized territories? If it does not, then I have some extensive comments I would like to make.

Mr. Maeck: Yes, it does.

Mr. B. Newman: All right then, thank you.

Hon. Mr. Maeck: Mr. Speaker, very briefly, I think the member for Erie (Mr. Haggerty) misunderstood what this bill means. What we have at the present time is really a double taxation. This is a very old piece of legislation that I believe was brought in before provincial land tax -- at least I think it was. I am not sure of that, but I believe it was in existence because there was no other way of collecting damages for fires.

At the present time, because of the way the bill is written, the tax applies only to railway lands that were granted by Ontario. It excluded all the other railways such as CNR and CPR which were federally granted lands, and it also excluded the Ontario Northland Railway, in the main because it is crown land. So the way it is written at the present moment it is a very inequitable bill in that some people are paying and others are not. It means that those people are paying a double taxation because they also have to pay provincial land tax. It deals strictly with unorganized areas. It has nothing to do with municipalities as such or organized areas.

The member mentioned the city of Mississauga fire. Of course, there are other means of dealing with those situations rather than this act, which would never have covered it under any circumstances because Mississauga is an organized municipality.

Basically what we are doing here is taking away an act that has been inequitable. The railway that actually is paying most of the $88,000 we are talking about is the Algoma Central Railway, which happens to be located on lands granted by the province. We feel it is not fair that they should continue to pay. If there is a fire now on the railway right of way, and if it can be proved that it was the railway’s fault, then they would be expected to pay the damages for the fighting of that fire. If it cannot be proved, of course, it is taken out of the general revenue fund which is built up by the provincial land tax. Basically, that is all there really is to the act. I think that answers all of the questions that were raised.

Motion agreed to.

Ordered for third reading.

House in committee of the whole.

CREDIT UNIONS AND CAISSES POPULAIRES STATUTE LAW AMENDMENT ACT

Consideration of Bill 31, An Act to amend the Credit Unions and Caisses Populaires Act, 1976, and to provide additional powers in certain other Acts with respect to Credit Unions and Caisses Populaires.

Sections 1 and 2 agreed to.

On sections 3 to 6, inclusive:

Mr. Renwick: Mr. Chairman, I only have one comment. Section 81(1) of the Credit Unions and Caisses Populaires Act provides that no credit union shall accept deposits from persons other than its members, and I take it that sections 3, 4, 5 and 6 authorize certain insurers, certain loan corporations, certain trust corporations and certain trustees to invest their funds by way of deposit in term deposits in the credit unions of the province.

In the definitions section of the Credit Unions and Caisses Populaires Act, in which I may of course have missed some particular point, it states that “a member means a person who is a member or enrolled as a member of a credit union under this act, the articles and the bylaws of the credit union governing membership.”

I guess my question simply is, is there a contradiction? If there is a contradiction appearing to me, could the minister resolve my contradiction for me?

Hon. Mr. Drea: Mr. Chairman, I don’t think there is a contradiction. First of all, a corporation can be a member of a credit union. What we are doing here is giving the credit union the opportunity to accept certain kinds of deposits that previously were precluded from it by very specific acts other than the Credit Unions and Caisses Populaires Act.

The honourable member will recall on second reading he raised the point about the fact that under the Credit Unions and Caisses Populaires Act a credit union was entitled to provide guaranteed student loans, and why was it necessary to amend the Ministry of Colleges and Universities Act. He will recall I replied that while it was in the Credit Unions and Caisses Populaires Act that they could accept, under the other act there indeed was a contradiction because that loan could not be provided under the guarantees in the Ministry of Colleges and Universities Act.

5:10 p.m.

In this case, on all of those sections, the particular person or the particular corporation will become a member of the credit union as a prerequisite of depositing that trust account or that trust document. It doesn’t provide a mechanism for control. They will have one voting share just as any other member. There are three trust companies operating in the province owned by credit unions. If they wish to put some of their funds or their trust accounts in the very credit unions that own them, they have every right to do so.

Perhaps I misunderstand the honourable member but I fail to see where there is a contradiction or anything other than what would be a normal business procedure with respect to the Credit Unions and Caisses Populaires Act. The fact is that the amendments the honourable member is referring to at this time were designed to open up a new field of deposits, a new field of account, that the credit unions or caisses populaires could compete for.

As I said last week, there is a potential -- it is not an absolute guarantee -- to provide them with the opportunity. I am very confident this will expand enormously the competition in the financial community. If you want new business you have to motivate somebody who is doing business with somebody else to come forward. That is precisely what we want in the financial marketplace, that it not be a restricted narrow area, that, within the definitions of responsibility, it be a very competitive sector of the economy.

Mr. Renwick: Mr. Chairman, my point has nothing to do with the purpose of the substance or the intention of the bill with which we agreed on second reading. That wasn’t my problem.

My problem is a very simple one: Is it going to improve the potential capacity of the credit unions? I find it passing strange if National Trust Company, for example, is saying, “My, the Legislature has just passed this amendment and we will now take some of our funds under this duly-authorized investment opportunity, and we will find a credit union and deposit these moneys by way of term deposits with that credit union.” So it goes to the credit union and somebody says, “You will have to join first.” That applies, apparently, to each real estate or business broker who may want to take advantage of it -- each trustee under the Trustee Act, or each loan corporation or each trust company.

I would have assumed that the anomaly of using the term that a trust company may invest its funds in the term deposits of a credit union would have meant in a very direct way that you would have carved out an exception for the requirement of membership so you do not clutter up the membership roles of a credit union by having them make a note on their books that the National Trust Company is a credit union member or that A.E. LePage Limited is a credit union member or such and such an individual who is a trustee is a member of the credit union.

I can realize that your lawyers, skilled in the devices open to corporate lawyers, would have derided this could be done. But I think in a funny way it is a minor inhibition against this kind of investment being made by these kinds of organizations to have to go through the anomaly of becoming a member when that has nothing to do with the day-to-day business world of the credit union. So, as I say, it was a contradiction to me and it was an anomaly.

That was the only point I wanted to make and it is the identical point on sections 3, 4, 5 and 6. I have a further comment or question to ask of the minister under section 7, to which he referred very briefly.

I think, in case anybody is looking at the record of this debate, we should point out that while the reference is to only section 150(1) of the Loan and Trust Corporations Act, which of course refers only to a registered loan corporation, nevertheless, by virtue of the provisions of section 153 of the Loan and Trust Corporations Act, it is made available to a trust company also to participate in this enlarged investment field.

It will be interesting to see whether or not the credit union movement and the caisses populaires benefit in fact over a period of time from this enlarged investment power. I would hope there might be some occasion a year from now, in the estimates of the minister or his successor, whoever that is, when we could ask for that kind of information about the way in which this has contributed, if at all, to improving the liquidity capacity and potential of the credit union movement and the caisses populaires.

Sections 3 to 6, inclusive, agreed to.

On section 7:

Mr. Renwick: Again, Mr. Chairman, my question is simply relating to a section of the Credit Unions and Caisses Populaires Act which states that a credit union may make guaranteed loans under and in accordance with the provisions of the Canada Student Loans Act, the Farm Improvement Loans Act or the Fisheries Improvement Loans Act, all of which are acts of the federal Parliament of Canada. I am curious, simply by way of a question, as to whether or not there is any correlative amendment required in the Credit Unions and Caisses Populaires Act because of the intention to permit the proposed amendments to the Ministry of Colleges and Universities Act, allowing the credit unions to make guaranteed student loans -- that is, loans, as I understand it, guaranteed by the ministry of this government.

Hon. Mr. Drea: As I said before, section 84 of the Credit Unions and Caisses Populaires Act permitted a credit union to make that type of guaranteed loan under the Canada Student Loans Act, but the Ministry of Colleges and Universities Act in Ontario did not recognize a credit union for that purpose. It had the traditional line, “a chartered bank,” and therefore we had to amend the Ministry of Colleges and Universities Act to recognize the right of a credit union, as well as a bank, to make student loans.

The honourable member is absolutely correct. The Credit Unions and Caisses Populaires Act said, “Yes, you can do it,” except that the only place it could be done was under the auspices of the Ministry of Colleges and Universities and that act said the guaranteed student loan had to be obtained from a chartered bank. What we’re doing is amending it so that it can be obtained from a chartered bank and/or a credit union.

What has been happening is that the credit unions have wanted to handle this business, the Legislature has recognized that they are responsible to do it because it is in their act, and for some peculiar reason, until I started these amendments there was no initiative under the Ministry of Colleges and Universities Act to permit it.

5:20 p.m.

Mr. Renwick: Perhaps I’m not being as direct as I should be. I would have thought that section 84 required an amendment which would read somewhat to the effect, “A credit union may make guaranteed loans under and in accordance with the provisions of the Canada Student Loans Act or under the provisions of the Ministry of Colleges and Universities Act, 1972.”

I would have thought it was necessary to amend section 84 or to designate the Ministry of Colleges and Universities Act as an act by regulation which would permit the guarantee to be given by the Ministry of Colleges and Universities. That was my understanding.

Let me try again. The Ministry of Colleges and Universities Act, as I understand it from this amendment, will be able to guarantee loans made to students by credit unions. It would guarantee the return of the principal and the payment of the interest on loans made by credit unions. I would, therefore, have assumed that section 84 would have required one of two things: either an amendment to section 84 designating the Ministry of Colleges and Universities Act, 1972, of this province as one of the statutes enumerated in section 84, or it would be done by way of regulation because the concluding words of section 84 state, “and such other act as may be designated by the regulations.” Is that a real question or is it not?

Hon. Mr. Drea: In fairness, I think it is a legitimate question, but in the drafting of these amendments it wasn’t felt we really had to go that far. What really happened is when the Credit Unions and Caisses Populaires Act was passed by the Legislature in 1976 there was every expectation that, following proclamation, other ministries with particular statutes would individually amend their statutes to provide what we are doing in this bill.

Piecemeal that began to happen. The Municipal Act was amended, and so forth. The municipalities and boards of education could put their funds into credit unions. But it was the feeling at this time that we should go the omnibus route, rather than have a bill a session for four or five years with all of the difficulties and time constraints there. Therefore, we are amending the Ministry of Colleges and Universities Act to say those guaranteed loans can be provided by a credit union.

I think it would have been very difficult to do it by regulation, I say to the member. It could have been done on an individual basis had Colleges and Universities as a ministry moved it. But, remember, we are moving it from the other side. We have spent most of the winter consulting with other ministries as to how far we could go in terms of an omnibus type of procedure. At the end, we did.

I think this method accomplishes exactly what the honourable member wants. It may not be legally as clean and tidy as the remedy or benefit he suggests, but in the interests of accomplishing the intent of what the credit unions wanted and what the Legislature obviously wanted four years ago, we thought this was the most expeditious and practical route to follow.

Mr. Renwick: Mr. Chairman, I will leave a question for the minister which in due course he can say yes or no to after the act is passed. Does it require a regulation to be passed under section 84 designating the Ministry of Colleges and Universities Act, 1972, as an act that may be designated pursuant to that section?

Section 7 agreed to.

Bill 31 reported.

On motion by Hon. Mr. Drea, the committee of the whole House reported one bill without amendment.

The House adjourned at 5:26 p.m.