The House met at 2 p.m.

Prayers.

STATEMENTS BY THE MINISTRY

AID TO CHRYSLER

Hon. Mr. Grossman: Mr. Speaker, following several months of discussions and weeks of intensive negotiations, our government over the weekend has agreed to offer Chrysler Canada Limited assistance in financing a $20-million automotive research and development facility in Windsor. Construction of this facility will commence no later than 1982.

Funds will be disbursed to Chrysler by the province on a matching basis. Chrysler will be reimbursed for 50 per cent of any approved construction and equipment expenditures to a maximum of $10 million. These expenditures will also be fully audited before any funds can be drawn down by the company. In the event of a failure of Chrysler, the Canadian research and development centre and all related equipment will become the property of the province of Ontario. When construction is completed, Chrysler Canada Limited will employ a research, engineering and technical staff of at least 150 people.

Chrysler’s Canadian research and development centre will be used by the company to undertake research and development in aluminum and plastics applications for lightweight, fuel-efficient automobiles. The centre will be equipped with an engineering and manufacturing laboratory to support the development and testing of structural plastics components to replace steel, including seat frames, wheels, bumpers and small components.

The facility will also provide for the engineering and manufacturing development of a light-weight aluminum casting process to permit the economic substitution of aluminum for cast iron in cylinder heads, engine manifolds and small castings. Chrysler’s Canadian research and development facility will be equipped with highly sophisticated plastics compounding, forming and injection machinery; aluminum remelt and casting equipment; a complete machine shop, and a full range of laboratory and analytical testing equipment to support its research.

The agreement indicates the importance the Ontario government places on the role of research and development in the medium and long-term health of the auto industry in Ontario. The trend toward lighter, more fuel-efficient vehicles requires that the industry, by necessity, increase its expertise in working with new materials, such as plastic, aluminum, magnesium and high-technology electronics systems. The construction of Chrysler’s Canadian research and development facility represents a major step towards meeting those objectives.

The Ontario government’s offer of a $10- million grant for the construction of Chrysler’s Canadian research and development centre is expressly predicated on the company’s meeting both the spirit and the letter of its undertakings to the federal government. The continuation of Chrysler Corporation and Chrysler Canada Limited is important to this country. We wish Chrysler success in the future and look forward to participating with the company in its renewed strength and viability.

NEW CAR PURCHASES

Hon. F. S. Miller: Mr. Speaker, there has been some speculation this morning that the province may be considering a retail sales tax rebate program for new car purchases.

The Premier (Mr. Davis) and I met today with mayors of communities most affected by the current situation in the auto industry. At that meeting we were presented with a recommendation that the province should implement a sales tax rebate plan similar to the program undertaken in 1975. To clear up any confusion that may exist, I wish to make it clear that the province is not considering a program of this nature at the present time.

As members know, we did undertake a very temporary selective sales tax rebate for new 1979 cars during the month of February. This was done to eliminate the inventory glut that had to be removed if sales of 1980 models had any chance of success. That program accomplished what was intended. Over 80 per cent of the Big Three 1979 car inventory was cleared away.

When we look at the current situation, we are witnessing a major, fundamental change in the auto industry as consumers move to more energy-efficient vehicles. While the negative impact of the change is exacerbated by the downturn in the United States economy, I would question whether short-term provincial measures to stimulate demand could have a major impact on a market that is undergoing such a basic readjustment.

Moreover, as members know, it is constitutionally impossible for the province to limit a sales tax incentive to vehicles covered by the auto pact. Yet it is precisely here that the problem lies. Sales of imported cars have been‘holding up reasonably well. If we stimulate demand now through a sales tax cut or some other measure, it is conceivable that we could worsen the problem of import penetration in the market

2:10 p.m.

This government is very concerned about the situation in the auto industry. We are concerned about the immediate problems of unemployment and we are concerned about the longer-term future of the Canadian sector of the assembly and parts industries. We have made our views known to the federal government and will continue to work towards the development of effective policies.

We endorse and will take appropriate action to assist an awareness campaign encouraging purchase of North American vehicles which is now being carried out by the auto manufacturing cities and we will request a meeting with the leaders of American auto manufacturing states to request their support for this campaign in the United States.

I am continuing to monitor the situation in the auto industry very closely and, if we get to the point where immediate and direct tax actions would genuinely help the situation, then I will be prepared to consider them.

ORAL QUESTIONS

MINISTRY OF HEALTH ADVERTISING

Mr. S. Smith: Mr. Speaker, I will direct my first question to the Premier with regard to the advertising program begun today by the Ministry of Health in three Toronto newspapers and, I would imagine, in most of the 41 other dailies in Ontario, for which the cost must surely be about $50,000 minimum just for today. Could the Premier explain how this advertising, with which I am sure he is familiar, would help anyone who reads it to maintain good health or to obtain better health? The Premier surely would agree that health advertising should be to help people maintain their health or to inform them of some new government service they might wish to make use of. All this advertising does is announce that hospitals in many communities are going to be getting a lot more money than they used to. How does this help anybody’s health?

Hon. Mr. Davis: Mr. Speaker, perhaps it helps people’s mental health.

Mr. T. P. Reid: The political health of the Tory Party.

Hon. Mr. Davis: It is very good. It is excellent.

Mr. Nixon: You are in a terminal stage.

Hon. Mr. Davis: I can only say to the member for Brant-Oxford-Norfolk that the health of our party compared to the health of his party is such that I am quite content with the way things are at the moment

Mr. Nixon: The Tory government is spending public money on it.

Hon. Mr. Davis: The member for Brant-Oxford-Norfolk is interrupting. He is talking about the health of the party. I am trying to answer his leader’s question and he is interrupting me.

I have not seen the particular ads. I would be delighted to consult with the Minister of Health (Mr. Timbrell) and have him explain, as I am sure he will, to the total satisfaction of the Leader of the Opposition, the public necessity of the question of communication in informing the public as to the activities of that ministry. I expect he will be here tomorrow afternoon and I will have him prepare to answer that in some detail for the member.

Mr. S. Smith: By way of supplementary: We will look forward to the minister’s answer, of course, but since the Premier has not seen the ad I must just read the first paragraph. First, there is a list of communities, allegedly in alphabetical order, with two mistakes, by the way. The alphabetical order is apparently not known to people in the ministry.

Mr. Nixon: The government will have to hire a new alphabeticist.

Mr. S. Smith: The message basically says: “Over the next three years hospitals in all these communities will be among those that will share in $360 million the Ontario government is providing to upgrade Ontario’s public hospitals.”

Mr. Nixon: That is not even an impressive bribe.

Mr. S. Smith: Undoubtedly, Mr. Speaker, this increase is based on publicly funded, public opinion polls which told the government it had to do it. But would the Premier please explain why taxpayers should have to pay for the government to get that particular message across in order to increase its own sagging popularity? Would the Premier not agree that the people who should pay for this kind of ad are not the taxpayers of Ontario, already overburdened, but the Progressive Conservative Party, which is the only beneficiary of this ad?

Hon. Mr. Davis: With great respect, I do not want to get into matters of polls of a partisan nature except to say I am sure the Leader of the Opposition has been doing his own fairly recently. If he has not, he should have. He will find what he suggested a little earlier to be factually incorrect. But that is a subject for another occasion.

Mr. S. Smith: Why don’t we let the people decide that? Let us go today.

Hon. Mr. Davis: The Leader of the Opposition has asked a supplementary question. He wants to have a $25-million election by the people of this province. We would rather use that $25 million to help the farmers of this province. That is what we want to do. The Liberal Party would rather spend it on an election than help the farmers. Its rural members are very upset.

Mr. Speaker, I would also suggest that I do not know anything about who set the type for this advertisement.

Mr. S. Smith: Who called the last election?

Hon. Mr. Davis: The opposition did. You people defeated us.

Mr. Speaker: That is not a question.

Hon. Mr. Davis: I have to tell you, Mr. Speaker, and I have said this before, we learn by experience. That is one thing the member has not yet learned.

Mr. Makarchuk: It cost the taxpayers $20 million for the Premier to learn from that experience.

Hon. Mr. Davis: The members opposite were the ones who were enthusiastic about it. I can recall it so vividly. I remember what the former NDP leader said on that occasion. He welcomed it. He thought the time had come. I remember the rhetoric as only Stephen Lewis could produce it. He did it very well. Where did I leave off?

Mr. Speaker, dealing with the ad that I have not seen, I cannot account for the fact that there may be some errors in the alphabetical order. I would ask if Peel Memorial Hospital is on the list? I don’t know whether it is on the list or not, but I would make this observation: I think the ministry does have a right to communicate what the ministry is doing because some members opposite, not all, but some, have been endeavouring to suggest that in terms of the health-care system of this province the hospitals were not getting sufficient moneys. There were attempts made, even by the member for Hamilton West, to create this impression in many speeches he made around this province. Surely, the ministry has an obligation --

Mr. S. Smith: The public doesn’t pay for me to make those speeches.

Hon. Mr. Davis: Fine, but surely the ministry has an obligation to tell the people what the facts are and not what the Leader of the Opposition has tried to portray them to be.

Mr. Cassidy: Mr. Speaker, a supplementary: I think what the Premier is trying to say is that the Liberal Party was so committed to the question of having an election on interest rates that the federal finance minister was not prepared to offer a nickel to relieve home owners in Ontario or across the country. I might mention as well that the Liberal Party --

Mr. Speaker: That is not a supplementary question. If the member has one, please place it forthwith.

Mr. Cassidy: If the Premier gets away with it, I don’t see why I shouldn’t as well. Mr. Speaker, I was thinking about that 70 per cent of Toronto electors who said they didn’t want an election right now.

I was going to say to the Premier, my supplementary --

Mr. Speaker: Supplementary, the member for Renfrew North.

Mr. Conway: Mr. Speaker, I have a question for the Premier: Recognizing that it must surely be presumption in the extreme to suggest through the budget and this kind of advertising to the people of Ontario that after five years of strangling the public hospital sector of this province within an inch of its life, he is now going to advertise that he is --

Mr. Speaker: Order.

Mr. Conway: Is the Premier prepared to indicate that we will never again return to the kind of budgetary restraints we saw last year in particular, and that these public hospitals in this province will get the funding to which they are clearly entitled?

Hon. Mr. Davis: Mr. Speaker, I would just remind the member for Renfrew North that I think it was his leader who, four years ago or three years ago or whenever, was going to cut another $50 million out of the health budget. That is what I recall him saying.

Mr. S. Smith: It was the fat in the budget.

Hon. Mr. Davis: Sure it was; he said as much here in the House. The Leader of the Opposition was going to reduce the health budget even further. He was so committed in those days to restraint.

Hon. Mr. Norton: As recently as last year, he was still saying the same thing in Frontenac-Addington.

Hon. Mr. Davis: I recall him saying it.

I would say to the member for Renfrew North, it is just the kind of statement he made just now about a stranglehold or whatever on the hospital system that was never factually true, about which the ministry, I assume, through this public information campaign, is endeavouring to assure the people of this province that in spite of what he says, the facts are as presented in that public information ad.

Mr. Cassidy: Mr. Speaker, since the government’s announcement about hospital spending is a direct result of a response to the NDP’s health-care campaign and of the 279,000-signature petition we submitted to this Legislature last fall, will the Premier undertake, rather than spending public money to publicize the government’s change of heart on the cutbacks in health care, that in future this government will no longer engage in a cutbacks mentality, but will ensure adequate funding for social and health services in Ontario?

Hon. Mr. Davis: Mr. Speaker, I am the last one to suggest that the extensive campaign conducted by the New Democratic Party of Ontario last fall was not constructive. I would just go once again by memory, but my recollection is that it was in June, well before the campaign, that the government of this province recommended the additional 60 million. It was before the NDP even thought of the campaign.

INCO EMISSIONS

Mr. S. Smith: Mr. Speaker, a question for the Minister of the Environment: Does the minister have any reason to dispute the statement made in the federal House by the federal Minister of the Environment when he said, and I quote, “That Inco emissions alone account for approximately 30 per cent of the sulphur deposition in Ottawa, and with respect to the Muskokas, which are particularly susceptible to damage from acid rain, approximately 40 per cent of the sulphur deposition originates from this source”? Does the Minister of the Environment dispute the figure that 40 per cent of the sulphur falling on the Muskokas comes from Inco?

Hon. Mr. Parrott: Mr. Speaker, I haven’t seen that particular quote, I was just handed it.

There is a great deal of information out there that I think the federal minister and I share as being fact. After a fairly lengthy discussion with Mr. Roberts, we have agreed, and I noted he had agreed in those comments in the House with his predecessor, Mr. Fraser, that we do accept those kinds of facts. More particularly, and extremely important, he and I have agreed that we should sit down together with our officials and come up with a definitive study on all of the facts and not just take one quotation out of context, as that can, on occasion, be misleading.

I think the federal-provincial task force will put in perspective all of the information we share.

Mr. S. Smith: By way of supplementary: Since the facts that Mr. Roberts quoted are included in a study that will be published at the end of the month, I am surprised that the Ministry of the Environment would not even know about this and didn’t even bother to read Mr. Roberts’s speech, since it is the same speech in which he said nice things about the minister.

2:20 p.m.

Mr. Speaker: Is there a question there someplace?

Mr. S. Smith: How can the minister go about putting orders on Inco without even knowing that 40 per cent of the sulphur falling on Muskoka comes from Inco? In view of that, can the minister please explain to the House why his publication called Cottage Country says, “If we eliminated every Ontario source of sulphur or nitrous oxide, it would have virtually no impact on the continuing damage to our lakes”? It goes on to compare that to the United States. If 40 per cent comes from Inco, wouldn’t that he quite an impact?

Hon. Mr. Parrott: I think again in this whole area it is so easy to take one study or one statement in isolation and not put the perspective to it that is absolutely essential. I think the study, taken when Inco was down for such a long period of time, gives substance to the comment the honourable member has just read.

I am very pleased that the federal minister and the members of his staff are not at loggerheads with our staff and ministry, nor should they be. It is a common problem that we must all work together on and solve. It is a fine thing that the two governments are putting their collective resources together along with, I might say, members of the private sector to come to a full understanding of this problem. I don’t see anything productive in being forever in controversy with my federal counterpart in Ottawa on this matter.

I think perhaps the most major step that has been taken to address the problem of acid rain is that we are putting our resources together. We will come with a common and an agreed-upon position. There might be some heavier reliance on one study rather than another. But I think in the final analysis we will find that the joint federal-provincial task force will resolve many of the controversies there have been here in this province and in this country and, I guess, in North America on the subject of acid rain.

Mr. Laughren: Supplementary, Mr. Speaker: In view of the fact that for these many years Inco has argued that it cannot extract much more of the sulphur from the ores because it would create an excess of sulphur for which there is no market, and in view of the comment made by the federal people as well, would the minister be prepared to initiate on this government’s behalf, either by itself or as a joint venture, a program to utilize the phosphates of north-eastern Ontario and the sulphur from Inco and Falconbridge to establish a good fertilizer industry in northeastern Ontario?

Hon. Mr. Parrott: Mr. Speaker, I don’t think there is any doubt that is one of the things this task force will be investigating. I think it is an important matter. If those details are able to be worked out, and there are some significant problems standing in the way of that --

Mr. Laughren: Nobody knows. They have never studied it.

Hon. Mr. Parrott: I am saying to the member that is one of the studies that will be part of the task force. If he is asking if we will study that particular aspect of the total problem, the answer is yes, we will.

Mr. Laughren: Has the minister seen the federal study?

Hon. Mr. Parrott: I have not seen that federal study.

Mr. Laughren: Why not?

Hon. Mr. Parrott: It will be coming to our officials. They have seen it briefly. We will be taking in all of these studies. Let me report a dozen times if necessary that I think it is very important that we work in a co-ordinated way on all of the studies, in both the private and public sectors. The time has gone when we can afford to be going off in different directions without making a very concentrated effort to get all of the information we need on a co-ordinated basis.

That is happening not just between the federal government and ourselves, but the mechanism is very clearly in place between ourselves and the US. I feel very confident that the studies the member is asking for will be part of the activity of the federal-provincial task force in this coming year.

Mr. S. Smith: By way of supplementary: Can the minister explain why with this, the number one environmental problem in Ontario, the minister himself hasn’t demanded to see all the relevant material and read it himself so that he doesn’t have to wait for some of his officials to tell him what might be discussed with the other level of government? May I also ask whether the minister has told the member for Muskoka, the provincial Treasurer (Mr. F. S. Miller), that 40 per cent of the sulphur falling on his lakes happened to be coming from Inco? Does he know about that and, if so, what did he say?

Hon. Mr. Parrott: Contrary to the method of the Leader of the Opposition, Mr. Speaker, I do not choose to use one study as the definitive study. It seems to be something that the Leader of the Opposition is so apt to do. He picks out a particular study, picks out a particular segment of the information on that study, and then uses it as the total package of information on which he bases all his assessment. That is not a very responsible approach to a very complex problem. We need a very comprehensive study, and I have no apologies to make whatsoever. There are dozens and dozens of studies on this subject matter and they must all be co-ordinated. That is precisely what the ministry officials are doing and what they should be doing.

Ms. Bryden: Final supplementary, Mr. Speaker: The minister says he does not rely on one study alone, but he keeps citing the study of what happened when Inco was closed down due to the strike as evidence that even if he put tougher controls on Inco there would be no effect on the acid rain. Can I ask him when we will be able to see that study? When will it be tabled in this House? He has cited it, but we have never seen it yet.

Hon. Mr. Parrott: Mr. Speaker, we will be glad to have all of that information ready for the estimates. It might be an excellent idea for the members opposite to avail themselves of the opportunity to make some of these presentations at the public meeting that will be held in Sudbury in the next three or four weeks. I would encourage the members to go to Sudbury, make these statements up there, and get this information on the record. I think it would be a very helpful, fruitful exercise. We will be there. I do not mean I personally will be there, but our ministry will be there. I think it would be just great if the members opposite would go to Sudbury and make some of those presentations.

AID TO CHRYSLER

Mr. Cassidy: Mr. Speaker, I have a question to the Minister of Industry and Tourism regarding the announcement with respect to Chrysler Corporation. Does the minister agree with the federal government’s estimate that the result of the package, in which Ontario has a small but significant part, will be the creation or the resumption by Chrysler of 15,900 jobs by 1984? If not, would the minister share with the House what Ontario’s projections are as to the likely employment by Chrysler Canada Limited in Canada over the course of the next four years?

Hon. Mr. Grossman: Mr. Speaker, on the basis of the information filed with us during the course of the negotiations. it would appear the job target being talked about, that is, about 15,900 persons working in Chrysler’s operations in Canada by 1985, will be reached only if all the facilities in Ontario are operating at maximum capacity. That would mean, in turn, only if their cars and products were selling as strongly as Chrysler expects they will. In other words, it is the optimal market number that is being talked about at 15,900.

Reaching that, as compared to the current levels of about 8,500 or less, is very much a function of the market, notwithstanding the assistance given by the federal government. Therefore, I can only say to the leader of the third party that I think what the federal government has done is ensure there are new facilities in Windsor, and that will be very helpful. In terms of the job levels, it will continue to be very much a function of the market. I can repeat what I said last week In the House: with or without the aid package, I expect the number of workers in Chrysler’s operations in Ontario next year to be down to about 6,000 people.

Mr. Cassidy: A supplementary question: I hear the minister saying quite clearly that there will be a drop in Chrysler employment, that he is not satisfied with the job guarantees. The minister knows that, as far as our party is concerned, we felt no loan guarantees should be granted without job guarantees. We feel relatively positive about the single specific involvement of Ontario in getting a breakthrough and having a major facility for research and development in Windsor as a result of Ontario’s involvement in the Chrysler deal.

Ontario was originally considering a commitment of $50 million in loan guarantees to Chrysler and has now cut that back to a $10-million grant for the research and development facility. Given the fact that there will be very substantial levels of unemployment in the auto industry in the Windsor area over the course of the next few years, can the minister say whether Ontario is prepared to undertake that the remaining $40 million it was prepared to commit to Chrysler will be used to create jobs in the parts industries or other sectors of the automobile industry in Windsor, and whether those jobs should start to be created right now?

2:30 p.m.

Hon. Mr. Grossman: As I, and the Treasurer (Mr. F. S. Miller) as well, have indicated in this House on earlier occasions, we welcome opportunities to invest in the automobile industry in Windsor. Whether it is that figure, $40 million, or a higher figure indeed, what we seek are opportunities to make investments in the auto industry in Windsor and other parts of this province.

This government will not hesitate, in spite of some of the criticism we have received on other counts, to make whatever investments are reasonable and sensible. As we have seen in the Chrysler situation, we will make only those investments that are reasonable and sensible to reinforce the auto industry in this province. We are prepared to do that.

Mr. S. Smith: Mr. Speaker, given that our view is that the deal that was struck was actually a reasonably good one on all three sides, could the minister explain why he chose to criticize the federal aspect of the deal on the radio this morning?

Mr. Laughren: That is the branch plant Liberal Party speaking.

Mr. S. Smith: The reason the Liberal Party has branches is that it happens to be alive and has roots, which the New Democratic Party has none of.

Could the minister explain why he felt free to criticize the federal side since, if it is a bad deal federally, 40 per cent or 45 per cent of that money comes from Ontario taxpayers? The federal government made it very clear that if Ontario didn’t want the deal to go ahead, it simply had to say “no deal” and the deal would not have gone ahead. It was Ontario’s action that allowed the trigger to occur that allowed the federal deal to go through. If the minister thought it was so bad for Ontario people, why didn’t he just cancel it, which he had the power to do? We think he thought it was a good deal, but he is trying to have it both ways.

Hon. Mr. Grossman: Mr. Speaker, may I say to the Leader of the Opposition we were quite prepared to do that. In fact, as is fairly evident now, last Thursday’s announcements compromised a federal announcement to go ahead with the program and an Ontario announcement that we were not participating at the time.

The federal government then chose not to go ahead. On Friday the Prime Minister of this country indicated, I suspect with a tongue in his cheek, that Ontario thought it knew better and Ontario thought a better deal could be had at some risk. He was hinting that we were risking the whole deal.

I think it is interesting to reflect now that we were, with respect, quite right. Notwithstanding the reservations of Mr. Trudeau -- and I understand those reservations -- we did get a better deal because of our refusal to go ahead on Thursday. The federal government was quite free to go ahead on Thursday and it chose not to.

The Leader of the Opposition suggests that if we hadn’t participated the federal government would not have participated. He says that. He may not be entirely accurate in saying that. I think they were still prepared to go ahead. Whether he is right or I am right, the fact is that we would not today be involved in the transaction if we didn’t get what we needed for Ontario taxpayers. If we had not got the research and development centre, we would not have been part of the deal, and the federal government could have made whatever decision it wanted.

In fairness I would like to take this opportunity to say that had we not had the time pressures that always occur on morning radio telephone broadcasts that we are all involved in at some stage or another, I would have expanded a bit on my comments to indicate that my job was to look at it from the standpoint of the Ontario taxpayers’ investment and that we had made very clear we were not going to go ahead without job guarantees.

That being the case, the federal government had other concerns and other considerations. In their judgement, they found the job guarantees satisfactory from their point of view. That is up to them, and their judgement may prove to be right. I think to date ours has been proved to be right. We got something we had no prospect of getting until this government stood very hard and firm on those job guarantees. In lieu of our inability to extract those job guarantees, we got something that no one has succeeded in getting from Chrysler in any of the jurisdictions in which they have done business, which is a world-leading research and development institute for our province.

Mr. Cooke: Mr. Speaker, I would just like to say thank goodness we have the NDP in the Ontario Legislature because we are the ones who forced that government into the deal.

My supplementary is to the Minister of Industry and Tourism. Since the minister did not spend the $50 million and since we do recognize he is trying to get offshore automobile parts facilities in Ontario -- we realize it will take some time for those facilities to be built and tooled along with the Big Three, which are retooling -- would he fulfil a commitment he made to me in a letter on November 8? In the letter he said, “In the event there develops a clear, long-term Chrysler employment crisis, then a job creation program may be required.” Is he willing to create short-term make-work projects in Windsor to help the unemployed get over the next two or three years in transition?

Hon. Mr. Grossman: May I begin, Mr. Speaker, by breaking the illusion the honourable member might have. On Saturday at 2 a.m. -- I don’t know how to tell him this -- but neither his body nor his spirit nor his thoughts were paramount in my mind as we did the negotiations. The best interests of the taxpayers of the province were foremost in my mind, as always is the case.

I am interested in the member’s comments as he reflects upon the need for, as he calls it, “offshore firms.” Now that he agrees we need some of them he doesn’t want to say “foreign multinational firms.” He wants to call them “offshore firms” so I will use that term this afternoon.

We are hard at work attracting those “offshore firms” in the interim. If the member will reflect on the letter he refers to and the other letters I have exchanged with him, both publicly and privately, he will find it has long been my opinion and that of my colleague the Minister of Labour (Mr. Elgie) that the proper responsibility for those programs, as has historically been the case, lies in Ottawa. I am sure, in view of the arrangement struck, they will be pleased to carry through on those undertakings. I have heard nothing from either Mr. Gray or Mr. Axworthy that indicates they don’t intend to fulfil those undertakings and commitments.

VISITORS

Mr. Cassidy: I would like to draw attention to the presence of the executive of the First Canadian Portuguese Club, Mr. Speaker. In the members’ gallery are Mr. Lorenzo, Mr. Nunes and Mr. Estevans.

FAMILY BENEFITS

Mr. Cassidy: My question, Mr. Speaker, is to the Minister of Community and Social Services. Is the minister aware that various organizations such as the Canadian Council on Social Development, the Social Planning Council of Metropolitan Toronto and Statistics Canada have computed how much it would take for families to live in this province without having to live in poverty? Does the minister consider those calculations are well-founded and does he agree that no family should have to live in poverty in Ontario?

Hon. Mr. Norton: Mr. Speaker, perhaps I could deal with the last part of that question first. Certainly we on this side of the House, and I am sure all members of the Legislature, are committed to attempting to alleviate those problems that confront people on limited incomes and to deal with the circumstances of poverty. I think the honourable member opposite would agree that in our society there are relative matters when one compares our standard of living with the standards that exist in other jurisdictions.

I think the honourable member would also recognize that in the establishment of the guidelines he has referred to there are many subjective decisions implied. It is very difficult to arrive at any absolute standard that really deals with the questions of definition of what poverty is and what ought to be an appropriate level of income to ensure that persons are not living in poverty.

2:40 p.m.

The practical approach to that is to deal with the matter on the basis of applying the maximum amount of resources available, which is precisely what we are doing in addressing the problems of low-income members of our society.

Mr. Cassidy: A supplementary question:

The Legislature will be dealing with some bills this week that relate to the levels of income available to people who are among the poorest in our society. The minister suggests that the CCSD, the social planning council and the Statistics Canada guidelines for the poverty line are subjective kinds of guidelines. Would he agree to table in this Legislature, before those debates take place this week, an objective measure of what it would require for a family to live over the poverty line in Ontario?

Would he have that tabling explain how it is possible for people on family benefits in this province to survive when the family benefits available to a mother with two children are 53 per cent, 61 per cent or 65 per cent respectively of the social planning council, Statistics Canada and the CCSD estimates of the poverty line in this province?

Hon. Mr. Norton: Mr. Speaker, I am not sure there is a clearly objective measure available. The guidelines the honourable member cites are surely, in themselves, to some extent indicative of the fact that there are subjective judgements, since no two of them are at the same level. They cannot be lumped together, since they are taking into consideration different matters.

I suggest to the honourable member that he also take into consideration the much-criticized -- by some members of his party -- work incentives program we instituted in January of this year. It would be interesting for him to recognize -- and I can provide him with some data on that as it becomes available -- that the 700 or more people who have availed themselves of that program have on average more than doubled their levels of income.

Mr. B. Newman: Mr. Speaker, may I ask of the minister, since the housing component of the level of income is extremely high in many municipalities, whether he is prepared to increase that housing component so that at least it would be the going rate in the community and not the small amount he provides for that housing component?

Hon. Mr. Norton: Mr. Speaker, as I have attempted to explain to the honourable members on a number of occasions, for several years we have admitted that the housing component, as it is repeatedly referred to, is retained primarily to meet the requirements for cost-sharing under the Canada Assistance Plan.

We have been progressively trying to move away from specific categories or allocations of income from within the family benefits in order to approach the family benefits on the same basis as anyone else’s income is received -- as, if you wish, a pay package.

I would be the first to agree there is not much relationship between that component as it exists now and the reality of rents in this province. I have admitted that for the last three years and tried to explain to you why it is the case. When the family benefits levels are increased, the total income package is increased at the same rate, but that component is one we have moved away from. It is only there to continue to meet the requirements of CAP.

That is not to suggest that is an indicator of a realistic rent in the community. When we receive income as members of this Legislature, no particular portion of our income is earmarked for shelter. People who are in receipt of family benefits ought to have their income treated in the same way rather than allocated for specific things.

Mr. Cassidy: Mr. Speaker, I would like the minister to say whether he could meet his own needs and the needs of two children under the age of 10, including the cost of housing, on $533 a month. If not, why do he and this government expect a single mother with two children under the age of 10 to get by and to maintain all her needs and the needs of her two children on $533 a month, which is what she gets under family benefits, including the child tax allowance and family allowances? If he cannot do it, why should a single mother with two kids have to do it?

Hon. Mr. Norton: Mr. Speaker, that is an extremely hypothetical question, since the honourable member knows my status. I do not purport to give him a straight answer on this, but I would caution him that he may be asking the wrong person, because he happens to be asking a person who has been accustomed, for a long time, to leading a very frugal life.

ABSENCE OF MINISTER

Mr. Riddell: Mr. Speaker, once again I am deprived of the opportunity to ask a question of the Minister of Agriculture and Food (Mr. Henderson) for very obvious reasons; so I rise on a point of privilege.

My colleagues and I, for a number of weeks, now have had questions that we wanted to put to the Minister of Agriculture and Food. He comes in for the leaders’ questions; then, at the end of the opposition leaders’ questions, he disappears. I wondered where he went; so last Friday I went to the back lobby and I found the minister out there. Why is it that he cannot stay in this House and answer questions that we want to put to him and we have wanted to put to him now for a number of weeks?

Hon. Mr. Norton: Mr. Speaker, I don’t know that this is appropriately a matter of personal privilege, but I think it is appropriate that the honourable member opposite know that the Minister of Agriculture and Food had to leave by virtue of a health condition which required his attendance at a doctor’s office. He asked me, if this kind of attack took place, that I advise the House that is where he had to go.

Mr. Riddell: If that is the situation, Mr. Speaker, then I have to apologize, but I do not think that has been the case for the last three weeks. I do not think it has been his health that has been making him leave the House. If he cannot stay in the House to answer questions, then it is up to the Premier to see that there is a minister put in his place so that at least we can get some of these important agricultural questions asked and answered.

Hon. Mr. Davis: I have always tried to be obliging, Mr. Speaker. While ministers are not always here, with great respect, members of the opposition are not always here either; and I would be delighted to give chapter and verse.

If the honourable member has had a question related to agriculture and the minister was not here, if he has asked me the question, I think in most cases I have been able to provide the answer for him, or somebody has, the following day. If he is all upset, if he is hot and bothered, please let him ask the question and I will get an answer for him at two o’clock tomorrow afternoon. I say to him, don’t make such a fuss and don’t be so childish about it,

MILK QUOTAS

Mr. Riddell: I will put the question to the Premier, Mr. Speaker.

In view of the fact that Ontario currently is allocated 38 per cent of the total manufacturing milk supply in Canada, and yet 40 per cent of the national industrial milk product supply is consumed in Ontario, and since the national market sharing quotas plan does not consider market conditions in allocating market sharing quota, would the Premier not think it wise to sign a one-year agreement, rather than a long-term, five-year agreement, with the Canadian milk supply management committee -- that’s the job of the Minister of Agriculture and Food (Mr. Henderson) -- for provincial milk sharing quota now under review, until Ontario is allocated a more equitable share of industrial milk supplies?

Hon. Mr. Davis: Mr. Speaker, if the honourable member had had the courtesy to send me, or somebody, before two o’clock, the question, which obviously has been written for him, I would have had a written answer for him to that written question. It is so simple. If he really wants that today, that’s all he had to do --

Mr. Nixon: Maybe you couldn’t write that question -- but he could and he did.

Hon. Mr. Davis: I am delighted to get the information for him. The honourable member had it ‘all written out; why didn’t he just send it across? I’ll get the information.

My recollection, Mr. Speaker, is that the question of allocation of quota, is one that the Minister of Agriculture and Food has dealt with; he has debated it here on a number of occasions. I am only going by memory, but I think part of the problem is the quotas or the policy of the government of Canada. I may be wrong in that as it relates to this issue, but I do not think so. I still have a few milk producers in the great riding of Brampton. Part of the problem regarding quotas for industrial milk does relate to the honourable member’s federal colleagues in the national capital. I will get a more detailed answer for him for some time after two o’clock tomorrow afternoon.

2:50 p.m.

Mr. Riddell: Despite the fact that the question might have been written out, it is a question I happened to write out because there was some factual information in it which I wanted to get across to the Premier.

I am asking the Premier whether he knows that all the provincial ministers are signatories to the agreement that is currently being considered. I am simply asking that the minister look at a one-year agreement rather than a five-year agreement until we get a more equitable share.

As a supplementary: In view of the fact that Ontario now is producing only about 95 per cent of our provincial milk supply allotment, will the minister introduce a provincial program to provide financial support on a long-term basis for possible overproduction of milk to encourage farmers to produce up to our allotment and to take some of the risk out of overproduction? In other words, they were gun-shy because of the penalties they had to pay two or three years ago. We want them to produce more milk now, but they do not want to do so for fear that they are going to be penalized. Is there some kind of provincial assistance?

Hon. Mr. Davis: I think the honourable member may find we are producing at this moment only 93.5 per cent of the quota, not 94 per cent.

I say to the honourable member, if he will send me over the supplementary question, which obviously he has prepared, I will get that information for him as well.

I would remind him that the minister on a number of occasions, both in this House and outside the House, has argued strenuously with the government of Canada that we were not getting our fair share. He will never catch the Minister of Agriculture and Food of this province not speaking out for the farmers of this province. No one does it as eloquently, as articulately, with greater sense and logic, as the member for Lambton.

CALEDON VILLAGE CONDOMINIUM DEVELOPMENT

Mr. R. F. Johnston: Mr. Speaker, I have a question of the Attorney General, who was absent when I asked a question of the Minister of Consumer and Commercial Relations (Mr. Drea) on Thursday.

Has the minister begun investigating the Caledon Village condominium problems, as requested by the North York council, which is concerned that a judicial inquiry may be required? Will he involve the Minister of Consumer and Commercial Relations in that investigation? Has he, as yet, received the books of the York Condominium 46, which must be examined before a decision to proceed can be made?

Hon. Mr. McMurtry: Mr. Speaker, I am not aware of the matter the honourable member has raised. It may be that there has been some communication with my office. I am sorry, but it has not been brought to my attention. I will inquire further and report back to the member.

Mr. R. F. Johnston: Is the minister, therefore, not aware that at the end of last week the member for Wilson Heights (Mr. Rotenberg) was given custody of the books which Canada Mortgage and Housing Corporation has been trying to acquire and which have legal implications for CMHC, the property managers and the condominium corporation? Is he not aware that those books are in the possession of the member for Wilson Heights?

Hon. Mr. McMurtry: No. I repeat, I am not aware of the matter at all. It follows, therefore, that I am not aware of the facts that have just been related to me by the member.

Mr. S. Smith: Mr. Speaker, if I am not mistaken, it is my understanding that North York council had voted to request an investigation into this matter. Was that not transmitted to the Attorney General’s office? If he does find it in his files, will he agree to an investigation?

Hon. Mr. McMurtry: Mr. Speaker, I was not aware of the matter. A note has been passed to me indicating that the matter apparently has been brought to the attention of my office; some of the senior law officers are reviewing it right now, but they have not brought it to my attention. I expect they will shortly.

SUDBURY STUDENTS’ CREDITS

Mr. Nixon: Mr. Speaker, I want to direct a question to the Minister of Education, now that the secondary schools in Sudbury have been back in operation on a full-time basis for more than a week. By the way, I want to congratulate the minister for her role in achieving that. In fact, I expected one of her colleagues to bring that to our attention more forcefully.

Has the minister seen reports that the staff of most of the secondary schools there have decided not to have any kind of final examinations but simply to recommend promotion on the basis of the students’ responses during these last few days of the truncated school year? Does she share any of the concern I have that perhaps in some few instances this is not a fair way to decide on promotion for all the students? Does she not agree that there ought to be an examination for the good of those students who perhaps are not adept at impressing teachers with their cooperation?

Hon. Miss Stephenson: I am sure the honourable member is aware that there probably is a greater proportion of students with the capability of impressing the teachers with their knowledge and their co-operation in a classroom setting than the number capable of providing that kind of impression through written examinations of the traditional type.

I am aware, at least, that there was a suggestion made specifically by a group of teachers within Sudbury that this might be the appropriate route to providing the credits to a certain number of young people within the secondary system for this year.

We have expressed the concern of the ministry regarding this to those responsible in Sudbury for the educational program. As I suggested very strongly in this House last week, or the week before last, there are ongoing discussions with the board, with the director of education through the regional office, in order to ensure that the most appropriate program is developed for each of the young people. There are some young people who have made decisions, apparently, not to return to school this year, which I find most unfortunate, and there are those who have decided to return. The program, because the requirements of the young people are not equal in all circumstances and not totally similar, must be tailored as carefully as possible to the needs of each of the young people. Simply asking for responses in class and not providing any extra instruction or any extra activity, I think, is an inappropriate way to ensure that the educational program is delivered in full measure to those young people.

Mr. Nixon: I would be interested in knowing whether the minister has any information as to what additional assistance or instruction will be provided by the teachers now that they are back in the classrooms, or will it be business as usual, with the normal spares, the normal professional activity days, no exams and just looking into the pupils’ eyes and saying, “You have survived” and “You have not”?

Hon. Miss Stephenson: I am not sure whether that was the traditional role of the teacher when the honourable member was teaching, but I do not think it is in many circumstances today. There are a number of programs which have been suggested strongly. In some schools, I am aware, the number of spares has been reduced dramatically or eliminated, and in other situations there are programs for extra assistance to students.

As I said, the program is not precisely the same for all students even within the same school, because it depends upon the needs of the students. However, we are continuing conversations with the board of education in Sudbury, which is discussing the kind of arrangements for the large groups of students for whom it is responsible. These arrangements have not been finalized at this point, to my knowledge.

Mr. Martel: Mr. Speaker, when will the minister be in a position to indicate to the House whether the school year will be extended, or whether Saturdays or additional hours per day will be used, to make sure that students get the basic requirements that are necessary to carry them on into either a community college or a university?

Hon. Miss Stephenson: Mr. Speaker, the problems related to grades 12 and 13 are particularly acute. I would anticipate that we will have some final arrangement established through the discussions between the board and the teachers before the end of this week. I am anticipating that we will have some further information by that time.

CANADIAN PURCHASING POLICY

Mr. Bounsall: Mr. Speaker, I have a question of the Minister of Industry and Tourism. I first want to congratulate the minister in not participating on behalf of Ontario as an add-on to the federal $200-million loan guarantee program which produced nothing in the way of fair-share job guarantees, parts production, or research and development, all of which is absolutely necessary.

However, did the minister obtain any guarantees from Chrysler that, in return for the $10 million of Ontario money for either the construction or the renovation to create the research and development centre, all the construction companies, labour, material and supplies will be Canadian and, in addition, that the research equipment for the centre will be either produced or purchased here in Canada -- all matters which, of course, were not obtained for the Ford engine plant construction, with the resulting involvement of American construction companies and American labour?

3 p.m.

Hon. Mr. Grossman: Mr. Speaker, those matters were understood between the parties, although they are not yet reflected in the formal exchange of Telexes that was carried on hurriedly at noon on Saturday, but I can assure the honourable member that will be part and parcel of the ultimate contract entered into.

Mr. Bounsall: Can the minister indicate from his knowledge of the federal negotiations if there will be an expansion of the Windsor van plant to accommodate the new van-wagon production? If so, did the federal government place any conditions on the loan guarantees for Canadian construction companies, labour, material, supplies and equipment to be used at that van plan?

Hon. Mr. Grossman: The construction deal does involve an expansion of the van plant.

With regard to the second part of the question, regarding sourcing for the products used, I would have to refer that question to my federal counterpart, as I am not privy to the final Telex reflecting the final agreement between the federal government and Chrysler Corporation. Since we did not participate in that deal, as the member has noted, I am not privy to that particular communication.

Mr. B. Newman: Mr. Speaker, can the minister tell the House if there was any assurance in the agreement as far as the research and development was concerned that the personnel there was essentially going to be Canadian?

Hon. Mr. Grossman: Again, Mr. Speaker, to the largest extent possible, that will be the case. I suspect we will have to have some American engineers moving into the area to provide some of the expertise that only they have currently. If we are successful in doing that, I think that will be an important part of the transaction.

POLICE GRANTS

Mr. T. P. Reid: A question for the Solicitor General, Mr. Speaker: Is the Solicitor General aware of the appearance before the public accounts committee of his deputy, at which time the deputy was questioned about the per capita grants for policing across Ontario and the mish-mash of grants that are available to regional municipalities, to municipalities which provide their own police forces and so on? Can the Solicitor General indicate what action he is taking to ensure there is some kind of rationale for grants to police forces across Ontario?

Hon. Mr. McMurtry: Mr. Speaker, the officials in my ministry have been working with officials in the Ministry of Intergovernmental Affairs to rationalize the policy. Certainly there are some inconsistencies, which we have long conceded, and we would hope there will be a policy. I assume the Treasurer (Mr. F. S. Miller) will become involved in these discussions at some point as well, and we are working towards that end.

Mr. T. P. Reid: Is the Solicitor General aware that his deputy said he did not really know what was going on; that there was a group composed of Intergovernmental Affairs staff and the Justice policy field which was looking at this, but the Solicitor General’s ministry was not involved and he, the deputy, thought obviously they should be? If the minister is not aware of that, will he check into it and bring the House up to date on where that group is and who is on that group?

Hon. Mr. McMurtry: I cannot imagine the Deputy Solicitor General ever stating he did not know what was going on, but I will be discussing the matter with him.

HAZARDOUS WASTES DISPOSAL

Ms. Bryden: Mr. Speaker, I have a two-part question for the Minister of the Environment. Does the minister agree with the federal Minister of the Environment, John Roberts, as reported in today’s Globe and Mail, that Canada’s disposal system for toxic wastes is in a shocking state? When can we expect the minister here to produce a comprehensive plan for the safe handling and disposal of 60 million to 70 million gallons of toxic wastes in Ontario, as was recommended by the resources development committee 18 months ago and last August by the MacLaren report, which the ministry commissioned?

Hon. Mr. Parrott: Mr. Speaker, I think that interview probably stemmed from the council of ministers’ meeting in Halifax which I was pleased to attend last Thursday. I do not think there is any doubt that my confreres at that meeting recognized that Ontario is well advanced on a comprehensive plan by comparison with any other jurisdiction in Canada.

I think it would be more accurate to say that my ministry put forward a comprehensive plan to deal with our liquid industrial wastes; many of the things we said we would do have been done and others are in the process of being done. I do not think there is any doubt we will see the completion of that proposal put forward by the ministry, by myself, and which met with concurrence of the committee. It perhaps would be inaccurate to suggest it was the reverse -- in other words, put forward by the committee.

If the member will recall, we had a long discussion on a seven-point program that I think we tabled about February 1979. We are proceeding very nicely with that plan, but it certainly is not all in place yet. But I was very pleased in Halifax to see this jurisdiction singled out in advance of all other jurisdictions in Canada.

Ms. Bryden: The MacLaren report found the present facilities put up by private industry were completely inadequate. So far we have had only three or four isolated hit-and-miss facilities proposed by the private sector which will not cover anywhere near the 60,000 to 70,000 -- the 60 million to 70 million gallons. Some of these are only temporary.

Mr. Speaker: Does the member have a supplementary?

Ms. Bryden: Yes, Mr. Speaker. Has the minister started to look for the government site which the MacLaren report recommended the government should acquire in order to provide facilities which private enterprise has failed to provide?

Hon. Mr. Parrott: The second part from MacLaren is in the advanced stages. Perhaps we will be able to discuss that second report in the near future. l am glad that the member corrected herself on the figures 60 million to 70 million. Unfortunately her quote received some publicity not too long ago -- that there were 60,000 million gallons. I hope that figure will not become fixed in members’ minds, as the volume. A thousand-times-wrong error is one of considerable magnitude. We have enough. Let us not make it appear it is any larger than it is.

FLOOD DISASTER RELIEF

Mr. O’Neil: Mr. Speaker, I have a question of the Minister of Intergovernmental Affairs. Some time ago when there was serious flooding in Port Hope, both the town of Trenton and myself wrote to him about assistance for that town. I wonder if the minister could bring this Legislature up to date on the decision that was made. I have been told a letter is coming, but it has been almost two weeks since it was signed and It has not been received either by the town of Trenton or by myself.

Mr. Eakins: Have you mailed it yet?

Hon. Mr. Wells: Oh yes. Unfortunately, we don’t run the post office, so I cannot guarantee what happens after we mail it.

I certainly recall signing it. The answer to my friend’s question is that we looked at the situation very carefully, and field staff from our ministry were on the site and talked with various municipal people. It was decided not to recommend that Trenton be designated a disaster area under our disaster relief assistance program. But it was decided that Trenton and, as I recall, the Hastings-Northumberland area and Peterborough county were to be designated as an area where the low interest loans from the Ontario Development Corporation would apply to those who had been affected by the floods.

Mr. Speaker: Time for oral questions has expired.

3:10 p.m.

QUEBEC REFERENDUM

Mr. Renwick: Mr. Speaker, I rise on a matter of privilege to correct the editorial in the Globe and Mail on Saturday, May 10, entitled, Yes Won’t Get You No, in so far as it relates to my argument in the debate last week on national unity. It substantially misrepresents my argument and must be corrected.

My position then and now is as follows: Whatever the outcome of the referendum on May 20, the New Democratic Party is committed to the negotiation of a new constitution for Canada. Whatever the outcome of the referendum on May 20, there will be a substantial yes vote and a substantial no vote. If there is a majority yes vote, this party will not turn its back on the substantial number of people in Quebec who vote no and will attempt to win over to a new constitution for Canada some at least of those who may vote yes. I have no illusion about the position of the government of Quebec or the meaning it gives to the term “sovereignty-association.”

My position is not similar to, nor does it overlap with, that of the group referred to in the editorial as the Grant-Watkins group. A delegation from the Grant-Watkins group met with our caucus last week. It was clear to me that the members of that delegation were not prepared to support the resolution then before this assembly. This party supported that resolution unanimously.

The sentences attributed to me and quoted in the editorial were in a letter to the editor of the Globe and Mail on Saturday, May 3, from the co-chairman of the policy committee of the federal Liberal Party (Ontario) and, while referred to in my remarks, were certainly not the chief point in my position.

I called upon the assembly to say clearly, distinctly and unanimously that the meaning of the resolution is a commitment to negotiate a new constitution for Canada, whatever the result of the referendum may be on May 20.

MEMBER’S ANNIVERSARY

Hon. Mr. Davis: On a matter of personal privilege, Mr. Speaker: I know it is not the custom to introduce people in the gallery prior to Orders of the Day, and there are some strict rules on that, but I would like to introduce to the members of the House the member for Cochrane North (Mr. Brunelle), who is celebrating his 22nd anniversary as a member of this Legislature. He may have forgotten it but I haven’t, and I wish to extend our congratulations to him.

MOTION

COMMIITEE MEETING

Hon. Mr. Wells moved that, the select committee on company law be authorized to meet this afternoon concurrently with the House.

Motion agreed to.

EQUIPMENT PROCUREMENT

Mr. Conway: On a point of privilege, Mr. Speaker: I would like to correct the record. On April 10 in this House I raised with the Minister of Health (Mr. Timbrell) a matter concerning the equipment procurement policies of the new Ottawa Health Sciences Centre.

I have since had the opportunity to assess some of the information provided to me at that time. While in no way regretting the questions that were put, because I certainly see them as very much part of my parliamentary responsibilities, I do want to state for the record that I am completely satisfied with the response of the Minister of Health in stating his position that the hospital in question has pursued a right and proper course of action with respect to the equipment procurement for that facility and that it is equipping the hospital to the very best of ifs ability with the best equipment available.

I, for my part, regret any inconvenience or embarrassment to the new Ottawa Health Sciences Centre General Hospital which has arisen, as a result of allied information, from my question.

Mr. Speaker: You are correcting the record then.

INTRODUCTION OF BILLS

DISTRICT MUNICIPALITY OF MUSKOKA AMENDMENT ACT

Hon. Mr. Wells moved first reading of Bill 69, An Act to amend the District Municipality of Muskoka Act.

Motion agreed to.

Hon. Mr. Wells: Mr. Speaker, this bill proposes to give the district council of Muskoka the authority to provide such benefits as group life, accident, medical and hospital-care insurance to members of council. In addition, it proposes to remove the requirement that the district council pass a road consolidation bylaw every five years and to delete a provision which refers to a section in the Homes for the Aged and Rest Homes Act which no longer exists.

Finally, it proposes to permit the district council to purchase and rent machinery for the municipality’s purpose and seeks to validate all such past purchases and rentals.

The Honourable the Lieutenant Governor of Ontario entered the chamber of the Legislative Assembly and took her seat upon the throne.

ROYAL ASSENT

Hon. Mrs. McGibbon: Pray be seated.

Mr. Speaker: May it please Your Honour, we, Her Majesty’s most dutiful and faithful subjects of the Legislative Assembly of the province of Ontario in session assembled, approach Your Honour with sentiments of unfeigned devotion and loyalty to Her Majesty’s person and government, and humbly beg to present for Your Honour’s acceptance, a bill entitled An Act granting to Her Majesty certain additional sums of money for the Public Service for the fiscal year ending March 31, 1980.

3:20 p.m.

Clerk of the House: The Honourable the Lieutenant Governor doth thank Her Majesty’s dutiful and loyal subjects, accept their benevolence and assent to this bill in Her Majesty’s name.

The Honourable the Lieutenant Governor was pleased to retire from the chamber.

ANSWERS TO QUESTIONS ON NOTICE PAPER

Hon. Mr. Wells: Mr. Speaker, before the orders of the day, I wish to table the answers to questions 43, 142 to 144, 146 to 141 and the interim answers to questions 139, 140 and 145 standing on the Notice Paper. (See appendix, page 1801.)

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF INTERGOVERNMENTAL AFFAIRS

Hon. Mr. Wells: Mr. Chairman, I have a few comments I would like to offer as we consider these estimates for this year. I am very pleased again to be opening discussion here in the House on the estimates of the Ministry of Intergovernmental Affairs.

It is not yet two years since this ministry was established to provide co-ordination between the government of Ontario and other governments and to act as a catalyst leading to increased co-operation among this government, the municipalities of Ontario, the federal government, our sister provinces and; indeed, foreign governments as well. Even in this short time I think the need for this central role has been demonstrated time and time again. The whole business of harmonious intergovernmental relations at all levels is becoming more vital and more important in this day and age.

In the context of the kinds of issues and problems today confronting virtually all governments, and with complexity as one of the primary underlying facts of life with which all governments must increasingly cope, we all work in an environment where improved liaison and co-operation is absolutely essential for the continuance of good government on behalf of the people we serve, no matter what level or order of government each of us finds himself serving in.

Over the course of this debate the Ministry of Intergovernmental Affairs is presenting for approval a budget of $410 million for the fiscal year 1980-81. Included in this is $428 million in transfer payments to municipalities.

Let me remind members of this House that in March we obtained through supplementary estimates an amount of $135 million in order to prepay some unconditional grants to municipalities, which grants would normally have come out of the 1980-81 estimates. This means that a total of $563 million will actually be transferred to municipalities in respect of the calendar year 1980. This compares with a figure of $511 million which was included in last year’s estimates and represents an increase in unconditional grants to municipalities of just over 10 per cent.

As in previous years, the bulk of our expenditures, over 91 per cent of this ministry, is allocated to transfer payments, and as I have said, the two largest types of payments are the unconditional grants to municipalities, which I’ve just talked about, and the payments to employers under the Ontario Youth Employment Program, which amount to $28.8 million.

Salaries, wages and employee benefits take up less than $8 million, or 1.1 per cent of the total budget of this ministry. Goods and services comprise $4.3 million, or just under one per cent of the total budget of this ministry.

Before getting into some of the broad areas of activities that occupied much of the time and effort of the ministry during the past year, I think it is most appropriate to ask members to recognize the first-class contribution of the staff of this ministry.

The men and women who, through their daily efforts, make our operations run smoothly and make them run effectively do not comprise a large force in numerical terms. We are really a relatively small ministry. However, the energy and competence that is continually demonstrated by all staff is such that I think all honourable members and, indeed, the people of this province, have reason to appreciate.

I would like to make particular mention of the contribution of my parliamentary assistant, the member for Wilson Heights (Mr. Rotenberg). His wide range of experience in municipal government and his considerable understanding of the municipal sphere of government has been a great practical help to me and to many others in the ministry.

Don Stevenson, my deputy minister, continues to fulfil his responsibilities with great dedication and competence. I’m sure members will remember that Mr. Stevenson also wears the other hat of co-ordinator of French-language services for the government, and here too he has performed very effectively.

The other members of our senior management team also deserve recognition at this time. They are Eric Fleming, the executive director of the local government division; Ed Greathead, executive director of the office of intergovernmental affairs, and Sam Clasky, the executive co-ordinator of the planning and co-ordination group.

Mr. Chairman, these four senior officials, of course, represent just the tip of the iceberg in the sense that they are supported by others too numerous to mention, but who all contribute enormously to the overall effectiveness of the Ministry of Intergovernmental Affairs.

When we last discussed the budget of the ministry in this chamber, starting in June 1979, I mentioned three key organizational aspects and I’m pleased to report that on all fronts there has been positive and beneficial action in the interim.

First of all, most of the staff of the ministry are now physically moved into the Mowat Block, and already this has added considerably to our internal co-ordination and effectiveness on a day-to-day basis.

Second, the ministry has taken under its wing, from the Ministry of Treasury and Economics, much of the staff of the municipal finance branch, including its director, Larry Close, and some of the staff of the intergovernmental finance and grants policy branch. This was a move of the greatest significance and I’ll mention some of its implications in a few moments.

Third, we’ve assumed responsibility for the major protocol services of the government, which moved into our realm of operation from the Ministry of Government Services. The chief of protocol, Walter Borosa, and his very capable staff, constitute the office of protocol and provide a variety of protocol, hospitality and public events services.

The issuing of congratulatory scrolls and other government documents remains a function of the official documents section in the Ministry of Government Services.

The office of protocol maintains official liaison with 61 foreign government consular posts in Ontario, and handles matters pertaining to privileges and immunities accorded to foreign government representatives in Ontario. During this year, arrangements were co-ordinated for 74 official visits to this province. These included visits by Her Majesty the Queen Mother, Her Royal Highness the Princess Anne, our new Governor General of Canada and Mrs. Edward Schreyer, the Prime Ministers of Thailand and Lesotho, the King of Nepal, 30 senior ministers and delegations, and 24 ambassadors accredited to Canada.

3:30 p.m.

The office of protocol also arranged 121 functions, offering Ontario hospitality to some 34,000 visitors and guests. The office also assisted in arrangements for 42 ceremonies and public events, including the At Queen’s Park series of 19 concerts and exhibitions.

For a few minutes I would like to highlight for the members some of the activities and priorities of the office of intergovernmental affairs. This is the component of the ministry that deals primarily with governments outside Ontario. It consists of two branches: the federal-provincial and inter-provincial affairs secretariat, headed by Gary Posen, and the external activities co-ordination secretariat, under the direction of John Carson.

During the past year, the normal course of federal-provincial and interprovincial activities has been significantly interrupted and disrupted because of the two federal elections that have occurred. However, while such outwardly visible activities as federal-provincial conferences have diminished through this period, the work load in the intergovernmental area has kept us very busy indeed, especially our continuing efforts to propose reforms and adjustments to Confederation and to respond to the constructive suggestions of others.

At the same time, we have been engaged in a wide variety of operational issues and problems which, while perhaps not as dramatic as those matters related to Confederation and the constitution, are none the less vital to the continuing good health of Ontario’s external relations with Ottawa and with the other provinces.

At all times, and especially today, with the strains of the national debate on Confederation enveloping us, it is extremely important that Ontario’s relationships with all provinces be close, frank, open and friendly, whatever our current policy differences may be. Ontarians and all Canadians expect their governments to co-operate, and rightfully so. This has always been the modus operandi of the Ministry of Intergovernmental Affairs. The strength of this country in large measure depends upon the personal contacts that must be maintained across all our internal borders.

As I documented in the House last week during the Confederation debate, our Quebec relationship is naturally historic and special. Despite the current referendum friction, we have expended particular efforts to maintain this relationship for its own sake, and not to the detriment of any other Canadian relationships.

Ontario and Quebec are neighbours by geography, friends by tradition, and compatriots by agreement. In this context, it is not surprising that Ontario’s most regular ongoing relationships are with Quebec. In this connection, a great deal is accomplished through the Ontario-Quebec permanent commission, which has played a very constructive and beneficial role for the last 11 years. The continuing work of this commission is enough to give anyone cause for optimism.

While we obviously differ, and we do, on some very fundamental questions with the present government of Quebec, I firmly believe that the commission’s mandate remains as important as ever. It acts as a facilitator of cultural and educational exchanges between our two provinces. It is reflective of my hope and intention to work towards increasing co-operation and collaboration with every province in this country, Quebec included, in the future.

Meanwhile, as this kind of effort continues, the impending referendum in Quebec naturally looms large in the consciousness of all Ontarians and all Canadians. Certainly it has received a great deal of continuing attention by the Ministry of Intergovernmental Affairs, not only in our frequent contacts with Ottawa and Quebec but also with the other provinces as well.

For the purposes of our discussion today, I don’t think it’s necessary to list our recent activities or reiterate our previously stated positions with regard to the Quebec referendum. This ground was extensively, and I think very well, covered in this House last week during our debate.

As many of us said during last week’s debate, history was made. I think the debate did indeed pass the message of the elected representatives and, from them, of the people of this province to the people of Quebec. It also did something else. Last week’s debate, during which over 80 members of this House participated in something I can never remember the likes of having occurred in this House before, did indeed bring to the attention of the people of Ontario, in a very dramatic way, exactly what is going on.

I don’t know whether other members have had the same reaction, but I was surprised and very pleased to find people at various events over this last weekend come up to me and say they really appreciated the motion of this Legislature and the fact that we were all working together to keep Canada united and speaking on their behalf to the people of Quebec. It highlighted to me the fact that this debate, because it was on television and through the coverage that the media gave to it, made the people of Ontario even a little more aware of our role and of our message to Quebec.

That message seemed to be the message the people of this province wanted transmitted to Quebec. I think we can say that the members of this House contributed positively and vigorously to all the activities related to the Confederation issue, just as the members of my ministry staff have been working on these issues for many months now.

I think that debate and the resolution of this House put very clearly our position that we believe in a strong, united Canada with Quebec as a full partner, as a full province along with all the other provinces. We believe that renewed efforts must be made to rejuvenate the constitution, to reshape it, and that intergovernmental relationships must be strengthened in this country. Through that, this country can be kept as one.

We also put very clearly a position that this government and this province have held for a long time. Our position, of course, is that we stand very strongly with the proposition that under no circumstances will we negotiate sovereignty-association, with the government of Quebec. What we are for is change, in the coming weeks and months you can be sure that in the spirit of the resolution of this House, that course will be the one that we are actively pursuing. I am confident that as the select committee of this House begins meeting and as we carry on the discussions after the Quebec referendum, much of our time will be taken, and much of our effort will be expended in this direction. The intergovernmental affairs branch of our ministry will be ready, willing and, I am sure, able to participate on behalf of the government and the members of this House in this very important task.

Let me turn briefly to our activities in co-ordinating Ontario’s intergovernmental relationships with governments outside Canada, and specifically, some of the more important themes and issues that come within the purview of the external activities co-ordination secretariat.

As we all know, this province’s most significant relationship outside Canada is with the United States. We are closely involved in the widest variety of matters with our American neighbours. At the moment, policies related to economic, commercial, environmental and energy matters dominate this relationship and will probably continue to do so into the foreseeable future.

In discussions on these and other matters, the secretariat works to ensure that Ontario’s connections with the United States government, and with individual border states, are effective, productive and maintained in a friendly spirit of constructive two-way cooperation. Thus, the secretariat maintains effective linkages with other ministries of the Ontario government that have specific functional responsibilities as well as with the federal Department of External Affairs and with other federal departments on a frequent and continuing basis.

The co-ordination of provincial and federal policies and activities in trans-border relations is essential. One of the secretariat’s vital functions is to facilitate the melding of Ontario’s best interests in each particular issue with Canada’s position as it is articulated in advance by the Department of External Affairs.

Of course, Ontario’s interests are not limited to relations with the United States. The external activities co-ordination secretariat also functions in a monitoring role to help maintain our good connections in western Europe, both with individual nations and with the European community as a whole. Paralleling this activity are similar involvements with the Middle East, Latin America and the Pacific Basin, for example, once again, for the purposes of keeping us alert to developments that may have an impact on this province.

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One of the positive offshoots of this type of international activity has been the provision of Ontario grants to assist distressed countries and their people following a natural disaster or a major disruption caused by political events. During the past year, the following grants were made: $7,000 to the island of St. Vincent following a volcanic eruption in April 1979; $20,000 through the Canadian Red Cross to Yugoslavia following an earthquake in April 1979; $20,000 to Dominica through the Canadian Red Cross after Hurricane David swept through there in September 1979; and $315,575 to the Canadian Red Cross on a matching grant basis for South Asian refugee work in November 1979.

Up to $50,000 is to be presented very shortly to Toronto’s fund-raising committee for earthquake victims in the Azores, the decision to make this grant having been made in March 1980. In addition, $100,000 went to the Canadian Red Cross towards an international appeal for the Afghan refugees in Pakistan, this grant being made in March 1980.

With that brief overview of some of our activities in relationships with governments outside Ontario, perhaps I can now turn my attention to the very important local government side of the Ministry of Intergovernmental Affairs.

As I stressed last year in introducing the ministry’s estimates and as I have continued to stress since, we have adopted a co-operative and responsive style of operation in our dealings with local government. The best interests of all citizens, I would say, demand a harmonious partnership between the provincial and municipal levels of government and between municipal governments themselves.

I have continued over the last few months to establish closer personal contacts with as many municipalities as possible. At the same time, local governments have been very active in helping us shape policies by playing a much greater contributory role than ever before. Our decision-making process is not a one-way street. We make decisions only after consulting the people directly affected. Only then do we feel we are ready to arrive at solutions which best suit the needs of local government. As a result, the municipalities are today, I think, better equipped than ever to deal with complex situations.

If anyone needs tangible proof of the merits of a consultative approach to problem-solving, a very good example is available in the approach that has been taken to finding a solution to that very sensitive issue of local boundary disputes. A recent agreement was reached in the Brant-Brantford area. What has emerged there is an approach that will provide a key to unlocking situations in other areas of this province that are facing similar boundary problems. It came about only because of a consultative stance among all parties, including this ministry. I will say more about the Brant-Brantford situation in a few moments.

An important part of all this has been the shape and form of our formal consultative process with the municipalities. Since the first provincial-municipal conference at the Ontario Science Centre in April 1970, the various municipal associations that represent municipalities across Ontario have worked together as the Municipal Liaison Committee, or the MLC, as it is known. The MLC has acted as a focus and a forum for developing advice to the government of Ontario on issues affecting local government.

Over the years, this has been a very helpful and very effective process but, as in all things, circumstances and conditions change and from time to time established arrangements need review. The associations that compose the Municipal Liaison Committee are currently reviewing their own relationships with each other. They have formed a special committee comprising the presidents and past presidents of AMO, ACRO and ROMA, that is, the Association of Municipalities of Ontario, the Association of Counties and Regions in Ontario and the Rural Ontario Municipal Association respectively. These people are studying their relationships, one with the other.

Michael Smither, the editor of Municipal World, is acting as chairman of this group. The members of this committee will be reporting to their associations in late June or July. I look forward to reviewing their comments and recommendations. I might say, as they look at their relationships, particularly vis-à-vis the Municipal Liaison Committee, we are looking at the relationship between the Municipal Liaison Committee and the Provincial-Municipal Liaison Committee in the kind of forum that has been established, whether it is still the effective one, or how better the total municipal needs can be served and interface with the province.

As Mr. Smither and his committee reports, we will be reviewing our side of the process and by next fall we hope we will have arrived at perhaps an even better and more streamlined process for provincial-municipal liaison and co-ordination.

Our interests are so inextricably tied together that we must continue to recognize some type of liaison forum. The forum must be capable in this very complex world of local government issues to bring some coherent process to bear on the development of rational and effective authority for the governing of our communities across this province as conditions and circumstances change. That is the kind of vehicle we will be looking for.

Co-operation and consultation, of course, are a two-way street. In this regard I want to recognize publicly the positive contribution of so many of our municipal leaders during the past year. They have realized that ultimately all of us share the same responsibilities and that the challenges we face must be tackled in that spirit. While we may not always agree on solutions, it is essential we continue to address the problems together.

Obviously, one of the most pressing challenges ahead will be coping with the economic realities of the day. In this connection, I am very pleased about the recent shifting of some key municipal financial personnel into this ministry from the Ministry of Treasury and Economics, which is something I mentioned just a few moments ago.

This was a two-part move; the municipal finance branch was transferred, with the exception of staff dealing with property tax policy and the local borrowing corporations, and some staff of the intergovernmental finance and grants policy branch were also transferred, reflecting our responsibility for developing policy for the administering of the unconditional grants program.

The result of these shifts will be to increase our ability to assist municipalities in financial matters and to better enable us to assess municipal needs in a manner closely related to our own perceptions as a result of our own experiences in consultation with local governments.

I might mention that an information bulletin was prepared for municipalities to explain these changes and to outline the various functions now performed by all the branches within the local government division. The new responsibilities have been allotted among a number of branches in such a way as to maximize co-ordination and services to municipalities.

It might be helpful if I could outline the overall financial assistance that will be provided to municipalities by the government in 1980. The first point is that total government transfers to municipalities and their agencies in calendar year 1980 will be more than $2 billion -- $2,045,000,000, to be precise -- which is an increase of $252 million or 14 per cent over 1979 funding. I should emphasize that the $2 billion includes $30.5 million for modifying the impact of the new equalization factors and, of course, significant funding for capital projects. Of the total, the unconditional grants package administered by this ministry will rise to $543 million from $486 million, which is an increase of 11.9 per cent.

I would like to describe for the members very briefly some of the unconditional grant programs.

The total 1980 resource equalization grant entitlements will be about $144 million, up over 27 per cent from 1979. Three major changes have been made to this grant for 1980.

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First, the farm and residential assessment is now weighted at 85 per cent to reflect more accurately local property taxation capacities. The problem of dramatic de-. creases in grant entitlement caused by a minor loss of population has been alleviated by using either the 1980 grants population or the average of the 1978, 1979 and 1980 grants population, whichever is greater.

The 1980 resource equalization grant standards have been increased to $21,200 per capita on the basis of the new equalization factors and to $11,050 on the basis of the old equalization factors. The 1980 grants will be reflected in the 1980 county and region apportionments so that current apportionments will reflect current grants.

Second, the total 1980 general support grant entitlements will be about $166 million, up 12.4 per cent from $148 million in 1979. The grant rate will continue to be six per cent of the net local levies.

Mr. G. I. Miller: Must be an election coming up.

Hon. Mr. Wells: No, no; just the good work of the government and all the members of this House in their relationships with the municipalities.

Third, the total 1980 northern Ontario special support grant entitlement will increase 12.7 per cent to about $46 million. The grant rate will remain unchanged at 18 per cent of net local levies.

Fourth, the 1980 per capita grant entitlements will total $177 million. This includes $77 million for the general grant, $94 million for the police grant and $6 million for the density grant. The grant rates are unchanged from 1979. However, as with the resource equalization grant, the greater of the 1980 grants population or the averaging of 1978, 1979 and 1980 grants population will be and can be used for the per capita grants this year.

Fifth, last fall I announced a special apportionment protection grant which pertains to the apportionment of regional and county levies for the 1980 municipal fiscal year. Members will recall that a five per cent ceiling on a municipality’s apportionment increase was originally set by the province to cushion the adverse effects on any local government and its taxpayers caused by the new equalization factors.

Since that time we have become aware that the upper-tier levy increases in general throughout the province are estimated to be more significant this year than I think we had anticipated. In mid-April I announced that this grant will be enriched by a further $8.5 million in order to offset completely any potential tax increases that could be caused by the new assessment equalization factors. All municipalities were informed of this about mid-April.

Sixth, on March 20 last year I announced special ad hoc grants totalling $6.6 million to assist 49 municipalities most adversely affected by frozen equalization factors under the province’s resource equalization grant program. It was hoped that the 1980 resource equalization program, with its greater emphasis on updated property values, would eliminate the need to consider further compensatory assistance in 1980.

It is now clear, however, that a one-year extension is going to be necessary for 33 of these municipalities to avoid undue property tax increases. This revision will require additional payments of approximately $3.8 million. I might add that these municipalities probably will just have been informed this week -- that is, the 33 receiving a one-year extension of some form of ad hoc grants.

Before leaving the subject of unconditional grants, I would also like to mention our recent announcement stating that we would advance the payments for the first instalments of certain 1980 grant payments by four to six weeks. As a result, in March, municipalities received a total of about $135 million for advanced interim payments of the 1980 general support, general per capita, density and northern Ontario special support grants. These payments would normally have been made in April and May of the year. We have also advanced the 1980 police per capita grant to the tune of $7.8 million. This amount was advanced about five weeks ahead of when those grants would normally have been paid.

When all the advanced payments of more than $143 million of first instalments on these grants are made, we believe they will serve to reduce temporary municipal borrowing at current high interest rates and ease some of the financial pressures our municipalities face.

In addition to the Ontario unconditional grants payments we will be transferring another $19 million to municipalities and I would like to highlight six of these programs.

First, the 1980 payments in lieu of taxes on land and buildings owned and occupied by the province will be $14.6 million. This is about 0.7 per cent less than was estimated for 1979.

Second, payments to reimburse municipalities for taxes on provincially owned properties that are tenant-occupied will remain at $2.1 million for 1980.

Third, payments to assist municipalities in repairing and preventing flood damage because of high water levels on the Great Lakes are estimated at $440,000, $10,000 less than the 1979-80 figure.

Fourth, payments to municipalities with provincial parks will be increased by 3.3 per cent to $310,000 in 1980-81. This increase covers the payments for a newly designated park.

Fifth, our continuing program to provide training and experience in municipal government to students and recent graduates deserves mention. In 1980-81, $75,000 will be paid to municipal governments under the Involvement in Municipal Administration (IMA) program and the Ontario Municipal Training (OMT) program. Under the IMA program we will reimburse municipalities at a rate of 80 per cent of the salary costs to a maximum of $125 per week for 20 weeks per student. The new OMT program will utilize $60,000 of the $750,000 allocated to provide 10 training positions to municipalities in 1980 at 50 per cent of salary cost to a maximum of $6,000 this year and $4,000 in 1981.

Sixth, total grants for the local government bilingualism program will remain at $550,000 for 1980-81. The rate of fiscal assistance remains at 80 per cent for the first year and decreases by 20 per cent each year thereafter for four years.

I would like to return to a subject which I mentioned briefly a few minutes ago, namely, the development of a new process to resolve boundary and related problems in our major urban areas outside the restructured areas or the regional government areas. I think members are aware that negotiators from municipal councils in the Brantford area were successful, after intensive discussions beginning last September, in agreeing on a package which they have recommended to their council. This promises to be a real milestone in the municipal affairs of this province.

On August 21, 1978, about thee days after I assumed this responsibility, I spoke to the annual meeting of the Association of Municipalities of Ontario. In that statement I made a firm pledge that a top priority of this new ministry would be to find a better way to handle annexation and amalgamation disputes. In the intervening two years I spent a great deal of time discussing this matter. Only a month after I spoke to AMO, a delegation from 15 major urban municipalities in the province met with the Premier (Mr. Davis), myself and several of my cabinet colleagues, and they underlined in very strong and cogent terms the problems they faced. They made an urgent appeal for a less expensive, less cumbersome, more reasonable and more co-operative approach to boundary adjustments and readjustments. I agreed with their ultimate objective of finding some reasonable way for all parties to deal with rationalizing urban boundaries.

4 p.m.

At that time rural Ontario responded swiftly to the urban brief and informed us in no uncertain terms that they found some of the urban position presented to us, some of the specifics that were presented, unacceptable.

Later I referred to this period in a number of speeches and remarks as a preface to the great Ontario border war. Urban and rural municipal groups started to line up on opposing sides on this issue, and common ground was becoming very difficult to find. I would like to say it is a credit to the municipal leaders in this province that they persevered and that by the spring of 1979 a consensus emerged that a new process was needed.

Last May I asked the Provincial-Municipal Liaison Committee to establish an inter-association working group to assist and to attempt to agree on the characteristics of a new process. This group met several times and on August 10 advised me of the areas of agreement and disagreement that had been reached.

Ten days later I announced the government’s response to the working group’s suggestions. Almost a year to the day since my first address to AMO, the consultative approach had allowed me to outline a pilot project to test the elements of the new process. The essence of this process is the application to boundary issues of collective bargaining techniques. We established a negotiating phase, a mediation phase and, if it was required, an arbitration phase.

I do not have to review here the problem that the previous system of resolving boundary disputes created for all parties. Members are well aware of the adversarial, expensive arid divisive nature of the OMB and court proceedings on these matters.

Thus it was that last September the city of Brantford, the township of Brantford and the county of Brant agreed to participate in the pilot project to attempt to negotiate an agreed settlement to one of the longest-standing boundary disputes in this province.

Negotiations were conducted by elected representatives of the thee municipalities, assisted by a team of fact-finders from this ministry. From September to March of this year the negotiators met in regular session 25 times and in caucus on a great many more occasions. The process was thoroughly tested, since virtually every issue of an inter-municipal nature was raised and became part of the negotiations that were carried on.

Early last month, of course, I was able to announce to this House that an agreement had been recommended to their councils. It is with considerable satisfaction that I can now report that all three councils, following an active public debate, have endorsed the agreement and have recommended it to me. I intend, therefore, to introduce legislation this session to implement the proposals in that agreement

This dramatic demonstration of the capacity of municipal leaders to solve local problems without recourse to legal remedies provides us with a real opportunity to develop a new annexation and amalgamation process for this province. It is my intention to press firmly ahead and establish the new method on a province-wide basis as quickly as possible.

It is a very highly complex area, and the process must be carefully constructed to ensure that it can deal with the wide variety of issues with which it will be faced as it becomes more general across this whole province. I do not intend to rush into a general process. Rather, we will now consult closely with the interassociation working group, which was working with us last summer, but I hope to be able to introduce legislation this autumn to provide a new approach to annexations across this province.

It is with considerable satisfaction that I compare where we are today with this very issue and where we were 12 months ago. We may never solve all annexation problems, but through the co-operative approach I think we have found a way to deal with them now in a more reasonable and more cost-effective manner.

I would like to say a few words about the status of the five regional review reports that are commonly known to all of us as the Robarts, Mayo, Archer, Stewart and Palmer reports. During the mid-1970s the Metropolitan Toronto council and the Ottawa-Carleton, Niagara, Waterloo and Hamilton-Wentworth regional councils all passed resolutions asking the provincial government to support reviews of local ‘governments in their areas. In response to these requests, the Robarts commission was established in Metro, the Mayo commission in Ottawa-Carleton, the Archer commission in Niagara, the Palmer commission in Waterloo, and the Stewart commission in Hamilton-Wentworth.

When the Robarts, Mayo and Archer commissions submitted their reports in 1976 and 1977, the government invited briefs from interested citizens and municipal councils. Based upon analysis of these briefs, the government presented white papers in May 1978 proposing a number of changes in the electoral and functional arrangements in Metro Toronto, Ottawa-Carleton and Niagara.

The reaction to those proposals showed there was not sufficient support among citizens and in the Legislature for the government to proceed with wide-scale changes at that time. I do not believe those situations have been significantly altered by subsequent events.

The Stewart commission and the Palmer commission submitted their reports in 1978 and 1979 respectively. Strong public opposition immediately developed to the Stewart commission’s proposals for a one-tier system in Hamilton-Wentworth. In response, the government stated it was committed to continuing with the two-tier system, giving it time to evolve and mature.

This is a position to which we are still committed, and it is my hope that the leaders in Hamilton-Wentworth will carry on with their system in the spirit of cooperation and good faith which I believe they can.

A unique approach has been adopted for the follow-up to the Palmer report. A committee composed of the regional chairman and the local mayors was formed to study the recommendations, and its report will be discussed locally and then forwarded for our consideration.

It is not accurate to say that nothing has been done on the recommendations contained in the other commission reports. In the case of Ottawa-Carleton, for example, the government has sponsored legislation over the last two years, incorporating the western growth area as the city of Kanata, erecting Nepean township into a city, and adjusting the composition of the regional transit commission.

We will be introducing legislation to correct the most important imbalances in the distribution of seats on regional council and the city of Ottawa on its own initiative has secured the abolition of the board of control, as recommended in the Mayo report.

In the case of Niagara, the regional act has been amended to give St. Catharines an additional seat on the regional council, and no other changes there are felt to be needed in the near future.

The government has rejected the recommendations for boundary changes and direct elections in Metropolitan Toronto, because the present system seems to be working fairly well and because we want to ensure stability for the next few years.

Unless proposals for change are certain to provide substantial benefits and have the support of the municipalities and residents involved, I believe it is unwise to tinker with institutions that are emerging from growing pains into effective instruments of local government.

The functional issues raised by the Robarts report are being dealt with on a selective basis through the usual channels. Planning issues are being looked at as part of the review of the Planning Act, health boards are being reviewed within the Ministry of Health, and public housing is the subject of negotiations with the Ministry of Housing and the Treasurer of Ontario (Mr. F. S. Miller).

I believe it is a serious mistake to judge the success or failure of any of the commission reports by the amount of immediate or abrupt change they may happen to produce.

I agree with the editorial position taken by one of the Ottawa newspapers, and I would like to quote that editorial at this time:

“By that standard, the Mayo report might be considered a waste of most of the $250,000 that it cost. But this overlooks the fact that change is usually evolutionary and that a study may often confirm, inadvertently or otherwise, that no change is necessary yet.” As for the question of future reviews in regional municipalities, let me repeat what I have said before: Any new reviews should be initiated by the regional municipalities that wish to carry them out. It is a legitimate function of any government to step back from itself from time to time to review its functions and its operations.

I would commend to any regional municipality in this regard the work of the Waterloo review commission as a model. While we are not prepared to enter into a direct financing of any future studies, we are prepared to offer any appropriate staff assistance from this ministry.

4:10 p.m.

Another important activity in my ministry is what I would call the modernization of the Municipal Act. This forms part of the government’s overall policy on regulatory reform, but it is also being done in recognition of local needs and circumstances. We are constantly amending the Municipal Act and related acts, as members know, to make sure that municipalities have the power and authority to deal adequately with the problems of a changing society that they find in their own areas.

We are also aware that the Municipal Act needs updating in some of its existing provisions, and we are doing something about it. We have three major goals in this regard: to remove the archaic provisions, to eliminate redundant provisions and to modernize the language.

The act has many sections that certainly appear to be archaic. A discussion paper on bylaw powers identified 18 provisions which are probably archaic. These proposals were generally acceptable to the MLC committee on the Municipal Act. An example of such an archaic provision is the power of local councils to prohibit “the hauling of dead horses, offal, night soil or any other offensive matter or thing along any highway during the hours of daylight.” We might ask ourselves how long it has been since a municipality has had to order a stop to the hauling of a dead horse along a road during daylight.

There are a number of matters like this that we are examining which we think could help to bring the act up to date and make it perhaps a little more usable and even a little smaller. There are a number of matters we are examining which we think could help to reduce and rationalize the Municipal Act and make municipal governments more responsible and effective. Some examples are: updating the power of municipalities to make agreements; reviewing and revising status distinctions between municipalities; and removing provincial approvals of municipal actions wherever possible.

The complete revision of the Line Fences Act also represented an important updating of provisions affecting local matters. The new act clarifies, as members know, municipal responsibilities and duties and eliminates a number of redundant and archaic provisions. To aid municipalities in the implementation of these improved procedures, nine seminars were conducted across Ontario by the ministry, all of which were well attended and very well received.

A general goal in all this legislative revision is to make local governments more meaningful and more responsible for their own actions. Where possible, we will make every effort to limit regulatory provisions to those areas where they are clearly in the public interest. We have made some progress in this field. In conjunction with representatives of municipalities, we have reviewed the ministerial and ministry approvals required under the Municipal Act, and many of these have already been removed.

I would like to bring to members’ attention a number of other key areas of activity during the past year. Chief among these is the considerable experience and skill we have had to develop -- and I say unfortunately -- in responding to disasters in this province through our responsibility for the province’s disaster relief assistance fund. In 1979-80, an unprecedented 12 disasters caused by natural calamities occurred in Ontario. All of the affected areas were declared to be disaster areas for the purposes of providing financial assistance through our fund on a matching grant basis. The ministry and this government handled more disasters in this one year than in the previous 12 years during which this program has been in place.

Activities in the four areas of Iron Bridge, Paris, Searchmont-Goulais and White River have all been finalized. We are still active with the funds in Dover, Nipissing North, Himsworth, Onaping Falls-Walden, Oxford-Brant-Haldimand-Norfolk, West Carleton, Nepean, Renfrew and West Nipissing. In all of these cases, ministry staff from the local field offices co-ordinated the efforts of the affected municipalities and other ministries in cleaning up the immediate damage and in restoring municipal services.

In both Woodstock and Port Hope, for example, staff were on the scene within hours to contribute their time and expertise to all the parties involved. In Woodstock, staff coordinated the long-term, ongoing provincial response.

In addition, the subsidies branch of the Ministry of Intergovernmental Affairs has provided assistance in establishing disaster relief committees and in working with both committees and municipal councils in their fund-raising, appraisal and settlement efforts. The subsidies branch of this ministry has also been responsible for payments of the provincial contributions. They initiated advance payments in 1979-80 to help the local committees’ cash flow in making settlements and keeping bank interest charges down as low as possible.

In 1979-80, a total of $3.5 million was paid in interim and final contributions to nine of the 12 local disaster relief committees. The amount included in the 1980-81 estimates represents a contingency based on our experience prior to 1979.

To date, in this fiscal year, one disaster area has been declared -- Port Hope -- where the province will be contributing $3 for each dollar raised through local efforts. The provincial contribution was originally estimated at about $3 million but, based on estimated damages now, it looks as though it might total about $4 million. It appears now, however, that both figures may be lower than the early estimates.

Finally, may I make a closing comment about the financial assistance provided by the ministry to municipalities which provide certain municipal services in French as well as in English. The province pays a share of the cost of language training for municipal staff and the translation of municipal documents into French.

When this program was initiated about five years ago, municipalities wishing to apply for funds were required to pass a bylaw or to adopt a resolution committing the municipality to provide one or more services in French. The provision now has been changed so that municipalities no longer have to pass a bylaw or to adopt a resolution to be eligible for this assistance. We have just held two seminars, in Hawkesbury and Sudbury, with municipal politicians and officials from eastern and northeastern Ontario, on ways in which this program might be improved to facilitate the provision by municipalities of French-language services to their residents.

With this general overview, I think it becomes clear to the members of this House that the responsibilities of the Ministry of Intergovernmental Affairs are infinite in their variety, complexity and importance. We are moving on many fronts to serve the people of Ontario and, we think, serve them well in countless ways which affect them both directly and indirectly.

I look forward to carrying on discussions with the critics of both of the other parties who are very knowledgeable in these matters and whose advice and comment I have welcomed over the last year. There are several critics on these topics in each of the parties, some of them very expert and very skilled in municipal affairs. Many of them have served in various capacities. I welcome their comments on these estimates as together we review them so that all of us can better serve the people of this province.

Mr. Epp: Mr. Chairman, it is a pleasure for me to participate in these estimates. I, too, want to take the opportunity of commending the members of the minister’s staff who work very hard under his direction. They have given me the utmost co-operation every time I have called them on a number of matters during the course of the year.

Before I get into the full context of my statement, I want to draw the minister’s attention to something he referred to earlier when he said he was pleased to make a statement in this chamber. I had thought that, although his estimates had been dealt with in this chamber last year and the year before and the year before that, some effort was going to be made to have them in a committee room, not because of any reluctance on our part to participate in the chamber, but because we felt our turn should come with respect to the discussion of the estimates in the committee room where we could be a little more informal. As the minister and everyone here knows, the procedures in the chamber are a little more stylized, a little more formal, than they might be in a committee. I would hope that maybe next year we could be in a committee room.

4:20 p.m.

Usually there are two speakers from this side who make opening statements. The member for Ottawa East (Mr. Roy), who usually handles interprovincial and federal-provincial affairs as opposed to the municipal aspect, is not here today. As a result, he will be making some comments later. The area he is primarily interested in was covered at some length last week during the referendum debate and therefore he will make his remarks a little later.

In 1966, the province launched its multi-phase Design for Development program, which embraced three major programs: regional development, regional government and local government fiscal reform. When that program of regional government was officially launched in late 1968, both the then Premier, the Honourable John Robarts, and Municipal Affairs Minister Darcy McKeough hailed the event as an historic landmark in municipal history, as important as the passage of the Baldwin Act of 1849.

Its paramount aim was to strengthen local government in Ontario; yet the reality is that there has been little devolution of power from the provincial to the municipal level. The province has failed to solve the problem of municipal finance which is the key to increasing local autonomy. The province has failed to deal with the problems of property tax reform. The province has failed to implement grant reform, the purpose of which was to increase flexibility in municipal spending.

By introducing a new set of equalization factors, the province has succeeded only in creating new problems for municipalities without offering any answer to the overall question of property tax reform or reform of municipal finance which it had promised so many years ago.

The province continues to treat municipalities as children, as caretaker governments. Regional government in Ontario remains a source of widespread dissatisfaction in this province. The province has done nothing about improving the municipal structure of government despite widespread support for the introduction of a three-year term and despite expensive studies, such as the $1.5-million Robarts study on Metropolitan Toronto.

In dealing with specific issues, such as the Toronto Island issue, the province has failed to deal with urban problems in a fair and satisfactory manner. Above all, despite all the rhetoric about strengthening local government which we heard back in the 1960s, hopes for a long-term revenue-sharing agreement, which local governments need if they are to be able to plan in advance, continue to receive setback after setback.

In the minister’s statement of August 7, 1978, before the AMO annual meeting, he spoke about the three Cs -- co-ordination, cooperation and consultation -- and he reiterated some of those again today. The fact is that the three Cs have been replaced by the three Ps: platitudes, procrastination and paternalism. In my remarks today I intend to elaborate on the points I have just raised and to give some indication of the approach which the Ontario Liberal Party thinks is the right one.

First, with respect to property tax reform: The Progressive Conservative record on property tax reform is a dismal one. The move to reform Ontario’s property tax system began 12 years ago. The original intent was full-scale reform, reassessment of all properties at market value, broadening the tax base by removing exemptions and by taxing public property and altering the tax burdens borne by different classes of properties.

On January 4, 1978, the minister’s predecessor, Mr. McKeough, outlined his proposal. But it soon became clear that Mr. McKeough’s scheme would create major shifts in tax burdens and severe hardship for many home owners, farmers and small businessmen across this province.

Unfortunately, this government made no attempt to ascertain the impact of its proposals on individual property owners and, therefore, had not designed any phase-in or cushioning process programs to lessen the negative effects. Thus, back in June 1978, the government was forced to shelve the province-wide reform of property tax, despite 11 years of study and a costly commission, all calling for changes and, we might say, major changes.

We know the need for reform has not gone away. Ontario’s property tax system is riddled with inequities. Indeed, reassessment by appeal is on the increase, and municipalities are seeing their tax bases eroded by successful appeals. For instance, the city of Toronto has lost more than $6 million in 1978 and 1979. Hamilton has lost about $2.3 million as a result of appeals.

I have a few other examples of the problems that both the imposition of section 86 and the equalization factors have caused across the province. In the town of Niagara-on-the-Lake, where section 86 of the Assessment Act has been applied, they are using 1975 market value assessments which have been factored to bring them more in line with current market values. It would have been preferable for them to have 1978 market values rather than to rely on those of 1975, both for grant purposes and for apportionment purposes.

As a result of the equalization factors, the town will experience a 24 per cent to 30 per cent increase without the limitations which this government has proposed. In addition, they have commissioned a $4,500 study to show what effect the new factors will have on that municipality.

It is quite obvious that the only people who will benefit by the refusal of the provincial government to provide all the information to the municipalities when they apply section 86 are the consultants who have to be hired to help clarify the situation. For instance, one property owner found his property taxes from 1978 to 1979 had increased to $980, an increase of about 90 per cent.

I want to present another problem with respect to the appeal hearings being held across the province. More specifically, it has to do with one that was held in the city of Kitchener in March of this year. At that time, the judge planned to hear approximately 1,700 appeals in two days. This was not an assignment court, as some people have pretended, where cases would be assigned for future hearings. I checked this out with some people who were involved. It was supposed to be a hearing of 1,700 appeals in two days. Instead, these 1,700 cases, divided among 40 individuals and companies, were to be heard in two regular days of hearings. I have drawn this to the attention Of the Attorney General (Mr. McMurtry) and the Minister of Revenue (Mr. Maeck), who are directly responsible for such cases.

It would appear to me that the people of this province have a right to better treatment than was scheduled at that time, If we did a little arithmetic on this matter and allowed eight hours a day without a coffee break for the two days of hearings, we would have a total of 960 minutes, which divided by 1,700 would make about half a minute per individual property case. I think the minister would agree with me that is no way to treat the appeal process and, furthermore, no way to treat individuals in this province, or indeed, in any jurisdiction in the world. There were thousands upon thousands of dollars involved and the judge had allowed only two days to hear 1,700 cases.

It is understandable that there was a great outcry, from individuals, lawyers representing various clients, the media and elected representatives who were made aware of the situation. Consequently, the judge indicated he was going to use a few days as an assignment court and then would hear the various cases over a period of many weeks so adequate time would be given to each of the cases. This is the way it should have been done in the first place.

4:30 p.m.

In speaking of the Kitchener-Waterloo area, I want to draw the minister’s attention to some real inequities which have developed in the regional municipality of Waterloo. As the minister knows, six of the seven municipalities have adopted section 86 of the Assessment Act, the lone exception being the city of Waterloo.

It certainly was the feeling of many people involved, that once the ministry adopted that section and went for equalization within classes, that there would be some kind of equalization of school costs and regional costs for the properties dl the same market value. This, however, is not the case.

Residential properties in Woolwich township, for example, which have an assessment of $60,000, let’s say, will pay substantially more for education and regional services than similar properties in the cities of Waterloo, Kitchener or Cambridge. Does the minister not believe that, since the people of Woolwich are receiving the same regional and educational services, their taxes for similar properties should be the same as for those in other municipalities within the same region?

Let me give a third example. Although this relates more to the educational levy, nevertheless it is the municipalities that have to collect the education tax and therefore it obviously affects them. It is also the local taxpayer who ends up paying the local, regional and education taxes.

In the city of Nepean, which went this section 86 route, there was a feeling that since they had been paying in excess of what they felt their educational share should he, with the equalization of the factors and with the five per cent limit the province had applied, the educational portion of their taxes would decrease by five per cent from that which was exercised the previous year.

I would have thought they had a legitimate right to expect such a decrease, Instead of using the school board equalized factor, the province used a provincial average. Thereby, Nepean only had a decrease of 2.18 per cent and subsequently lost about $586,000 which they would have received had the school board average been applied. The continual postponement of market value assessment and property tax reform, with accompanying tax and grant reform, is leading to a state of chaos in this province. It is management by crisis. Whenever there is one crisis, the government fries to respond and creates several other crises.

My last example comes from the editorial of the March issue of Municipal World. Dennis Date, the former finance commissioner of the city of London and the former treasure of that municipality, states with respect to section 86:

“Having persuaded the council of the city of London to pursue a revised assessment roll utilizing the statutory provisions of section 86 of the Assessment Act, I think it appropriate to comment on one feature of this process which does not fit my concept of equity from a municipal standpoint.

“In theory, a revised assessment roll issued in accordance with section 86 should return to the municipality the same taxation base that is enjoyed prior to revision with the assessments within a class, having been adjusted to reflect a common ratio to market value, as established at a particular point in time.

“To accomplish this result, the assessments within the class are adjusted either up or down to reflect the common ratio to market value. It is the intention that the changes made offset each other so that the total assessment within the class remains the same as it was under the previous assessment roll, prior to the revision made under section 86.

“Although one would expect errors to affect assessments up or down, it was no surprise to learn that the result of this exercise was to reduce the overall taxable assessment base.”

The city of London discovered that approximately $400,000 would be lost in taxes that would not have been lost had the original assessment been used. It should be remembered that these changes were administrative and not assessment appeals which might represent additional losses for the city of London.

This government’s present approach of using section 86 to equalize assessments within classes of property based on 1975 market value for municipalities that request this is unsatisfactory for many reasons. It leads to unfair shifts in taxes in counties and regions where only some of the member municipalities have had reassessment. It will not create a uniform province-wide base; so a fair distribution of provincial grants or a fair system of cost sharing within counties and regions is not possible. It will not stop assessment appeal.

I would like to know how the minister intends to solve these problems and whether he intends to try to make good the promises made by his government in the late 1960s.

The next point I want to deal with is the equalization factor. The province’s new equalization scheme, introduced in October 1979, is not a happy solution. The scheme, with all the modifications introduced to minimize its effects, is so complex that less than a handful of people in the province are able to understand it. It makes a mockery of one of the original objectives of property tax reform; namely, to make the system clear to the public.

It is only a one-year solution and offers no answer to the question of property tax reform. While the new factors seek to relate grants and cost sharing within a two-tier system to market value, the property tax system itself in most municipalities has not moved to market value. In many municipalities, taxes are levied on values going back 30 and 40 years.

Until the fundamental problem of property tax reform is tackled, Ontario will continue to sink deeper and deeper into a quagmire of schemes taking us farther away from an honest solution. It is another example of the ad hockery which has characterized this government’s approach to municipalities and which is the worst possible basis for provincial-municipal finance.

I am concerned about some of the apparent inequities arising out of the new factors. Even though these new factors were published last July, municipal officials only now are beginning to figure out their impact.

Let us look at the impact on Haldimand-Norfolk. We have received a number of letters from outraged citizens detailing tax increases of up to 200 per cent. That regional municipality’s decision to implement market value assessment in the city of Nanticoke has added to the confusion. We see residents of one area being forced to accept disproportionately high increases while others in an adjacent community are not hurt. This example highlights the need for a long-term solution. The minister himself acknowledges that the new factors were intended only as a one-year solution, and I would ask him whether he plans to continue with this ad hoc, year-by-year approach.

The next item I want to speak to is with regard to regional government. The minister spoke about regional government, but he was more enamoured by the proposal and the solution that has been proposed and is being enacted in Brantford and Brant township. As I stated earlier, regional government remains a source of widespread dissatisfaction across this province. To date, the Archer report for Niagara, the Mayo report for Ottawa-Carleton, the Stewart report for Hamilton-Wentworth and the Palmer report for Waterloo have been virtually ignored by the government, a waste of at least another $2 million. With the exception of the Waterloo report, it is doubtful that much more will happen to these except to gather dust on the shelves of the Ministry of Intergovernmental Affairs.

The minister is also aware of the incredible mess the Hamilton-Wentworth regional council finds itself in. Only a few weeks ago all the regional councillors, except those from Hamilton, walked out on the council proceedings. A similar exercise was exhibited last year in Haldimand-Norfolk when the representatives of one participating municipality walked out so that the council would not have a quorum. I would like to know what solution the minister proposes for Hamilton-Wentworth.

It appears the government of Ontario may have learned something by its mistake in imposing regional governments on almost a dozen areas in Ontario, as evidenced by the greater consultation that is going on in the annexation dispute in Brantford. Although the present process may not be perfect, the ministry’s efforts, together with those of Brant township and the city of Brantford in seeking a solution to the touchy annexation problem, are to be commended.

4:40 p.m.

On grant reform, in the last few years the dependence of municipalities on transfers from the province as a source of municipal revenues has increased. In 1978, Ontario municipalities received about 40 per cent of their revenue requirements in provincial transfers. Three years ago the extensive report of the provincial-municipal grant committee chaired by the minister’s very able deputy minister, called for a major reform of the grant system. It contained about 100 recommendations proposing a reduction from 87 to 36 conditional grant programs.

The reality is that attempts at reforming the provincial-municipal grant system in this province have accomplished little. The dependence on a transfer system as a source of revenue for the municipal sector has increased, not decreased.

Design for Development perhaps should have been called a design for municipal dependency. As a result, Ontario municipalities remain, as former Toronto Mayor David Crombie so aptly described them a few years ago, “caretaker governments tied to regressive, inelastic revenue sources which are required to turn over half of their revenues to autonomous school boards and which spend most of the rest of the money on roads, sewers, fire and police protection, general government expenses and carrying charges on debt.”

Does the government intend to bring in any constructive reform in the provincial-municipal transfer system during the next year or in the near future for that matter? Does it intend to deconditionalize any of the grants? As we know, revenue sharing is a very important matter as far as municipalities are concerned.

Legislative transfer payment agreements now exist in New Brunswick, Manitoba, Saskatchewan and British Columbia. This feature is absolutely necessary because it gives a degree of certainty and continuity in a transfer system that is now lacking in this province. If the province is sincere in talking about strengthening local government and local autonomy, surely it must do something about making a multi-year, revenue-sharing agreement with the municipalities that is certain, predictable and set out in a provincial statute.

Surely few municipal issues have been longer awaited, longer studied and longer needed. The formula proposed by the Municipal Liaison Committee was as reasonable and as fair a proposal as could possibly have been expected by the government. It is one the minister participated in, yet his government turned it down. This proved to be the straw that broke the camel’s back for the AMO. AMO has pulled out of the PMLC because of the government’s inaction and hypocrisy.

You will recall that notices were sent around within the last two months saying there was not a sufficient amount of items to be discussed in the PMLC context. That is obvious, because the AMO is a larger municipal organization and it no longer participates in the discussions. The reason it does not participate is that it felt it was double-crossed last year with the Premier stating quite categorically he did not want to give it any kind of revenue-sharing agreement. That was something they thought they would be receiving if they agreed to dispense with the Edmonton commitment. it is time for the government of Ontario to stop treating the municipalities like children who never grow up. it is time for the government of Ontario to stop playing games with the revenue-sharing system. It is time to end the humiliating dependency of municipalities on annual provincial handouts. To us, municipalities are more than mere creatures of the province. We are pledged to the establishment of a three-year revenue-sharing agreement, a legislative commitment I might say.

With respect to Metropolitan Toronto, the report of the Royal Commission on Metropolitan Toronto has proved to be an exercise in futility. It found that certain major changes were needed, and yet the minister has recently stated the system appears to be working well. If the Metro system is working so well, then why undertake the studies in the first place and spend $1.5 million?

There is widespread agreement that a three-year term would be desirable for Metro as well as for other large Ontario municipalities. Will the minister reconsider introducing a three-year term within regions and within separated cities as a start?

The Toronto Island issue remains unresolved. The government’s bill would mean death to the community by attrition and our party will not permit this. Last year, a member of our party put forward a resolution aimed at restoring ownership of the land and the 250 remaining island homes to the city of Toronto. This Liberal resolution was passed with the support of members of all three parties in this House. Why has the minister not accepted this approach?

We continue to support the island homes and believe that, as a community, it helps to make the islands, for all Torontonians, a safe and interesting place to visit. It is quite clear that all the land is not needed for parkland, as had been anticipated back in 1956 when the land was first transferred to the Metro council.

Our party agrees with the city of Toronto that the community must not be destroyed. A few weeks ago, I introduced a private member’s bill which would implement the proposal to have these lands transferred back to the city and which, I might add, is essentially the same as that proposed in 1975 by the minister’s colleague, the member for St. Andrew-St. Patrick (Mr. Grossman). I urge the minister to support our resolution, or our solution, and our private member’s bill to have the residential lands on the Toronto Island sold back from the Metropolitan council to the city of Toronto for the purpose of saving this community, which has existed there for generations.

To conclude, I urge the province of Ontario to take steps to make good on its promise of 12 years ago. The time has come to begin to treat Ontario municipalities as equals, not subordinates, to share information openly and to consult on decisions that affect these municipalities, even if there is no legal requirement to do so.

It is clear that we need a new forum for this communication and consultation. The Provincial-Municipal Liaison Committee is now dead as a result of the government’s habit of using this body as a press-release forum where ministers showed up at their pleasure. Even the minister admitted, just last month “the PMLC process is not the best process for provincial-municipal liaison,” and that it has really become a place for role-playing rather than grass-roots problem solving. I presume that the role-playing was by the provincial ministers and not the municipal politicians.

Our party feels the minister should now consider the creation of a legislative select committee so the concerns of municipalities could be brought to Queen’s Path in a more meaningful way. This forum would allow municipalities to have real input and to make their own initiatives instead of just simply responding to ministerial statements.

Municipal concerns, whether they be the need for a disaster relief fund or a better process for negotiations with public employees, would be expressed and solutions arrived at on the basis of genuine consultation. I challenge the minister to return to the three Cs that he talked about and to put an end to more platitudes, procrastination and paternalism.

4:50 p.m.

Mr. Swart: I just want to say at the beginning, Mr. Chairman, that as you are aware, this party will also be having two speakers on the lead-in remarks, and, unlike the party to my right, we’re both here to make our contribution, whatever that may be.

I want to commend the staff of this ministry, as the minister and the critic for the Liberal Party have done.

The minister made the comment that some of us on this side of the House have been involved in municipal affairs for quite some time, and I just want to say that during that period there were at least two senior people in the ministry who had a long association, close and favourable. They were Ron Farrow and Eric Fleming. I think perhaps they are typical of those I have known for shorter periods of time in the service they are giving to the minister and to this province.

I also want to commend the minister, at the outset -- although it may not carry all the way through -- for the attitude he has taken in many respects with regard to co-operation with the municipalities and his commitment to endeavour to get them to work together. The example that has been put forward is Brantford. At this period of time, when it appears there are difficulties in some areas in intergovernmental affairs, I look upon the minister as the best choice in the government benches, with his ability to co-operate and his ability to mediate, for this position.

I am not going to talk about constitutional reform today or the Quebec sovereignty-association issue, as the position of this House on that matter has already been stated. It was debated at great length -- and I think usefully -- last week. It would be an appropriate forum here, and perhaps the debate may continue at the time the decision is made in Quebec. The estimates here can be a useful place for debate after the vote is taken.

I am also not going to spend very much time on municipal matters, as my colleague, the member for Wentworth (Mr. Isaacs), will state our views on various aspects of municipal reform in a very comprehensive way. As he will explain, the NDP has been giving a great deal of attention to municipal policy. We are concerned about the growing injustice of the property tax, particularly on the lower- income earners.

We are concerned about structural problems, as recently demonstrated in the Hamilton-Wentworth region. I urge the minister and the other members of this House to give close attention to the proposals put forward by the municipal affairs critic for the NDP. They will provide policies for greatly improving the functioning of local government in this province.

At the outset of my remarks I want to applaud the minister for moving the municipal finance department from the Ministry of the Treasury to the Ministry of Intergovernmental Affairs. I think it makes eminent sense for its functions to be attached to this ministry. I will not enumerate them, but they certainly are all functions which I believe should come directly under the minister’s control.

He stated, in making the announcement -- and I’m only going to mention one paragraph -- that the realignment “reflects the range of responsibilities of the Minister of Intergovernmental Affairs and enhances the ability of the ministry to assist and advise local governments and the government of Ontario on all issues relating to municipal finance, organization and management.” I agree with that statement.

It is perhaps not unreasonable for us in this party to think we deserve some credit for this change. The minister will know that at the time the Ministry of Treasury, Economics and Intergovernmental Affairs was divided into two ministries I urged that these responsibilities be brought from the Ministry of the Treasury into the Ministry of Intergovernmental Affairs.

At that time we could not get support for that proposal. We had lengthy debates on the bill to establish the Ministry of Intergovernmental Affairs. I moved an amendment at that time which would have provided for administering and co-ordinating a program of financial assistance to the municipalities, in stead of just co-ordinating.

At that time, the minister spoke against that. The party to my right spoke even more strongly against it. I think it is fair to say that he left the door open a bit, but the party to my right spoke against it and when it came to a vote we lost that amendment from this party.

Again, last year in the estimates of this ministry I spoke rather strongly in support of having those functions transferred and again the minister spoke in opposition, but I am glad now to see, after this period of time, they have been moved to this ministry. I think all in this House will ‘agree they will function even more effectively than before.

Hon. Mr. Wells: I just want to tell my friend that I came very close to accepting his amendment when that bill was going through the House.

Mr. Deputy Chairman: Maybe he should have pressed a little harder.

Mr. Swart: I think it would have been impossible to press it any harder than we did at that time. However, the minister has now done it; I don’t know whether he will give us any credit, but we are glad that change has taken place.

I want to say with increasing emphasis that I would like to see the minister take another function into his ministry. As I have stated before on at least two Occasions in these estimates, I would like to see this ministry take over the provincial jurisdiction for municipal planning and development.

I never could understand why that function of municipal planning and development was put into the Ministry of Housing. It is a ministry, by and large, that does not have a great deal of contact with the municipalities. I have always suspected that perhaps it was patterned after the British system with the Ministry of Housing and Municipal Affairs -- I hope that is the right terminology, -- without realizing that there is no comparison between the two places. They have, of course, extensive municipal housing and the municipalities practically have control of all the housing within their jurisdiction.

These are two reasons I think it should come under Intergovernmental Affairs. First of all, planning and development is a municipal responsibility. In recent years it has become more so, because where we formerly had a great many planning boards which were not composed of municipal council people, in the major areas of this province planning is now handled by the municipal councils themselves, certainly where there are regional governments. So this too should have a direct relationship, I suggest, between the Ministry of Intergovernmental Affairs, which, of course, is the ministry of municipal affairs, and the municipalities which administer the planning.

Second, the responsibilities of this ministry are much more related. It seems to me the new Planning Act should be discussed in this House within the municipal framework, within the framework of the hard servicing where decisions have to be made with regard to grants, to property taxation policies, in fact, to all of those things that pertain to the local municipalities. I suggest this minister should be piloting the new Planning Act through this House. His commitment to negotiation needs to be injected into planning matters as well as into matters of amalgamation of municipalities.

I would like to use what is happening in the Niagara region as an example where, perhaps, from the time of the start of the Niagara regional plan until it is finalized, a period of at least 10 years will have passed, where those who are interested in preserving the prime agricultural land in that area proposed negotiations to try to iron out some of the differences which existed with the municipalities and with the developers, but where no negotiations took place and where the people of that area are now being subjected to a tax levy to date, just for the hearings, of at least half a million dollars.

5 p.m.

The government is being criticized because it gave the Preservation of Agricultural Lands Society $40,000 out of public funds. There is an unreasonable and excessive cost and a tremendous delay. It seems to me that could have been resolved with the right kind of approach.

The government, under the late Mr. Rhodes, made a statement that there had to be 3,000 acres cut out of the Niagara regional plan. He spoke of the unique land which was included in the Niagara regional plan and he told the council there on two or three occasions it must cut it back. When it did not cut it back he had the courage, if I may say so, to say, “This is the area which you will cut.” Then his next statement was “If you don’t like that, you can refer it to the Ontario Municipal Board.”

I am sure the minister is aware of the situation there now. Not only were the 3,000 acres that had been cut back referred to the Ontario Municipal Board, but another 1,000 acres or so which had been outside the boundaries in the first place were referred to the Ontario Municipal Board, and the Preservation of Agricultural Lands Society referred another 1,500 acres to have the area cut back further.

These lengthy hearings have now taken place. If there had been a continuing minister there who would have said to the regional municipality of Niagara, “We are saying to you 3,000 acres must be cut back in that unique plan. If you do not like the areas where we cut back, then make other suggestions, but the end result is going to be 3,000 acres,” I suggest the regional municipality could have suggested that and we would have saved hundreds of thousands of dollars for the taxpayers there.

Therefore, I am suggesting that if the planning function were to be brought into the Ministry of Intergovernmental Affairs where, may I suggest, the minister has the temperament and the ability to negotiate and has some clout, then many of these conflicts and costly planning matters could be resolved, On all counts, I think it is desirable to have the planning and development, as far as responsibility to the province is concerned, brought under the Ministry of Intergovernmental Affairs.

From this side of the House, we have been urging the government for the last three or four years to sweeten the property tax credit substantially. It has been pointed out over those years that not increasing the credits in line with tax increases has done a rather horrible injustice to the lower-income earners. I have submitted figures year after year to substantiate this.

Last year I pointed out in the Ministry of Revenue estimates that there had been an increase of only some 18 per cent in the overall amount of property tax credit from the years 1974 to 1979, although average taxes had increased during that period of time by something like 65 per cent. That meant almost everyone who received a tax credit had a net increase in taxes greater than 65 per cent because the tax credit as a percentage of total taxes paid had been dropping substantially.

I demonstrated -- and I am not going to go into this, for obvious reasons, at the present time -- that a senior citizen with an income of $5,000, paying $500 in taxation, would have had an increase in that period of something like two and three-quarter times in the net taxes he had been paying.

I asked the Minister of Revenue (Mr. Maeck) if he would check out my figures if I was wrong. He wrote back to me last fall. I believe it was on November 30 after I had discussed this in his estimates. He confirmed almost exactly the figures which I had given him. I said it would have increased by two and three-quarters times over that period from 1974 to 1979. His figures showed that they did in fact increase about two and one-third times. There was a slight difference. As one knows, in all of these things one has to make certain suppositions. We know people on those low incomes who had the tremendous increase in their net property taxes paid.

The government has made a major adjustment in the senior citizens’ credit and we on this side of the House are pleased to see it. I think it is not unfair to say once again that the pushing by myself and my party may have had some bearing on bringing about this result. There was the very real improvement the government had made in the tax credit to most senior citizens, particularly those on low incomes. But there was also the matter of paying the funds directly, to them -- a simple method whereby they do not have to find the money to pay their taxes and get the rebate a year later or at some later time. I want to commend the government for that.

I am not at all sure that when we have the tax being paid this fall and then another portion next spring and another portion next fall it may not have some implications relative to the possibilities of a provincial election. There may be some motivation there in that regard. Be that as it may, I think it is a practical and a fair way of providing the tax credit.

I shared the concern -- perhaps the minister shared it with me and I’m sure this applies to his party -- that the system which we had not only did not provide the rebates at the time they needed them and didn’t provide the rebates in the amount that they needed, but also it was a complex system. Few of them understood it and it was a system whereby they didn’t realize they were getting a tax rebate directly related to the taxes they were paying. I think that has solved some of those problems.

Having said that, I do have some fault to find with ‘what the government has not done and a bit with hat has been done in this regard. The straight $500 will go to some people who won’t need it or need it very little. Some will get less than they did previously and that could even be some people who are in the needy category, where the senior citizens may have owned a fairly expensive home, had fairly good jobs, a good income and then retired. Where the taxes are exceedingly high they may now be getting less than they were at that time.

I think that is regrettable and perhaps if the option had been loft for either one it would have been desirable, although I know it creates some administrative problems in doing that sort of thing.

What I am really concerned about is that the only needy group where this improvement has been made -- granted it is a group where there is a higher percentage of needy people in it than in any other -- is to the senior citizens, unless the government is prepared to come up with some package I don’t know about at this time.

According to the government’s own figures, there were some three million people getting the property tax credit, of which some 700,000 or in excess of that were senior citizens.

5:10 p.m.

Granted, a great many of those others who are getting the property tax credit, those other 2.3 million, didn’t have nearly as great a need as the senior citizens, but it is also true to say -- and I hope the minister may have some statistics on this matter -- that there were hundreds of thousands of people receiving the property tax credit, both owners and people who rented, who were in as needy positions as those senior citizens, people on minimum wages or close to minimum wages, people on family benefits and quite a large number on Workmen’s Compensation Board partial permanent disability.

They are getting no benefit and they have had almost the same kinds of increases in net property taxes as the senior citizens have, though not as great. I know the limitation of funds, but I suggest the minister should take a look at this, particularly for those on the lower incomes, those in the neighbourhood of perhaps $7,000 to $10,000 or $12,000. He should take a look at that and see if there isn’t some way he can adjust the property tax credit for them.

It is now not only the injustice of the net property tax increase, but also the fact that many of them, whether they live in apartments or own their own homes, the younger people perhaps more than the senior citizens, are going to have tremendous increases in the interest rates they will have to pay on mortgages and owning a home is going to become more difficult. Because of this, housing costs are going to increase substantially on the average, so I hope he will take a look at the property tax credits for those on lower incomes to see if there is some way he can provide assistance to that very needy group.

I want to turn to another matter which was touched on briefly by the minister. That is the matter of disaster relief, which comes under his authority. I notice that last year there was something in excess of $500,000 -- I think that is correct -- spent on disaster relief, most of it international relief; this year there is only something like $271,000 in the budget for that. This means there will be little or nothing -- in fact, I think the minister has decided there will be nothing -- in the way of provincial relief for those refugees both in and out of Kampuchea, more commonly known as Cambodia.

This government was asked last fall for a $1 million contribution to help alleviate the disaster that was taking place within that nation and outside of that nation. It is my understanding that was turned down by this government in January of last year. I very much regret that this request was turned down, because if ever there was money needed to relieve human suffering and to save human lives it was, and is, needed in Cambodia. Perhaps I should emphasize that need continues.

I wrote to the Premier on this matter and received a reply from him on December 11, 1979, in which, after saying he had real sympathy with my active efforts to provide relief and support to these beleaguered people, he said: “I have asked Mr. Wells to inform you of the results of our deliberations on Kampuchea. Please be assured that this matter is receiving our close attention.” I think I am right in saying I was never informed as to the decision and found out only through the Red Cross that the government had turned down the request to provide that money.

New information has just been released by the Red Cross. The International Red Cross by the end of this year, December 31, will need something like $262 million to provide the necessary assistance to those in the camps both in and out of Kampuchea. It is expected that Canada will provide some 10 per cent of that amount, which is the sort of traditional amount Canada has been providing. That would be some $26 million. The Canadian government had originally pledged $15 million last year. Then it dropped it back. It was the government to which the minister’s party had some allegiance which dropped that back from $15 million to $10 million to transfer some additional funds to the Indo-Chinese coming here. I understand now it may go back to $15 million.

It means that from Ontario the Red Cross needs, in public subscriptions and government assistance somewhere between $3 million and $5 million. The figure which I have given of $262 million is a figure they assure me can be usefully used and is the absolute minimum necessary to give relief and to provide sustenance for the hundreds of thousands of refugees in and around Kampuchea.

By way of further information, I would like to point out they need $100,000 every three months for each of the four health and medical teams, doctors and nurses, they have within that country or adjacent to it. One of those teams comes from this province. It might not be a bad idea at all, it seems to me, if the provincial government could at least provide the necessary amount of money to fund that one Ontario team which is caring for so many people in and around that unfortunate country.

The Red Cross tells me there may be great need for Afghanistan too before the year is over. I would urge the minister to give higher priority in the matter of disaster relief aid internationally.

I want to come now to the main theme of what I want to talk about. I am not going to spend a great deal of time on it. I refer to federal-provincial fiscal relationships, which are in a very difficult stage and at a stage which is going to be a real disadvantage to us. I suggest this is a prime function -- or ought to be -- of the minister and the Ministry of Intergovernmental Affairs. The minister and I had a very brief discussion about this matter one day. He suggested to me it really didn’t come under the responsibility of his ministry. The minister, as a person who has been here for many years, will recognize that the act is certainly broad enough that he can and should be making real input into this.

May I say again -- no way in a flattering sense -- I think this minister has the kind of personality which can be very useful in the very difficult negotiations that are going to be necessary and will inevitably take place on this whole matter of equalization payments and fiscal relationship. I would urge him to give new consideration to that.

5:20 p.m.

Subsection 5(1) of the Ministry of Intergovernmental Affairs Act says: “The minister is responsible for making recommendations to the Executive Council on the programs and activities of the government of Ontario and its agencies in relation to federal-provincial, interprovincial and international affairs.” I would suggest, Mr. Chairman, that is broad enough, and he certainly should deeply involve himself in making recommendations in this field.

The negotiations in this matter of equalization payments and transfers generally will likely be part of the whole discussion on changes in the constitution, and it certainly should be. It is always a major part of any relationship between governments, and I am sure all of us are aware, from the budget paper if from nothing else, of the dramatic changes that have taken place in the equalization payments, the formulas, the application of those formulas and the need to change them.

We are very much aware that the status of this province has changed dramatically in the last two or three years from that of an economic leader to one of a much more inferior position in Confederation. The significance of the oil and gas resources has been the main factor, but there are others as well. This is all documented in the budget paper, Equalization and Fiscal Disparities in Canada. I have had the opportunity to read that and to study it, and perhaps it is done a bit more independently in the Canadian Tax Journal and the federal-provincial fiscal arrangements research paper of the economic division of the research branch at Ottawa.

Nothing has more clearly demonstrated the shift in Ontario’s position as has reaching the point where we are entitled under the present formula to equalization payments from the federal government. As the minister is aware, during 1979 it was found that Ontario qualified for equalization payments starting in 1977-78. For that year it was $110 million, $203 million for 1978-79 and $255 million for 1979-80, for a total of some $568 million to which this province is entitled in equalization payments from the federal government according to the existing formula.

The attitude of this government was to reject it. I think I am not misquoting when I say this government concurred totally in the federal bill to stop Ontario from getting those payments. That bill, which incidentally was first introduced in 1978 and again in 1979, I believe is now Bill C-24 -- is that correct? It was tabled once again, but has not yet been debated.

My leader and the leader of the Liberal Party have both raised this issue in the House. I suggest this government made a mistake in rejecting those equalization payments and did a real disservice to the taxpayers of this province. Just think, if Ontario had that money, or even this year’s entitlement, it could introduce a comprehensive mortgage assistance program, it could pay the increased property tax credit to those people I mentioned a few moments ago, it could introduce a denticare plan for children and it could bring family benefits up to the poverty line.

It will do no harm to summarize very briefly the history of the equalization payments. Equalization grants were first introduced in 1957, although recommended in 1940. The basic principle was, and I quote from one of the cabinet ministers at that time, “To enable all provinces to provide a given standard of social services to their citizens without needing to resort to levels of taxation which are excessively stringent by the standards of the richer provinces.”

From $200 million 20 years ago, those equalization payments have now reached $2.5 billion. They are thus a major source of revenue for the provinces and the fourth largest single expenditure by the federal government.

The amount of equalization entitlement, if any, is based on the tax resource capabilities of the respective provinces. The formula is automatically reviewed every five years, It has been changed many times to allow for changes in the situations of the various provinces. It is complex both in the method of establishing the base comparison, as well as the 29 revenues considered for that base.

The main change in the situation, as I’ve already mentioned, has been the tremendous additional tax revenue accruing to some provinces -- most notably BC, Alberta and Saskatchewan -- because of oil and gas revenues. The sharp increase started six or seven years ago. Total provincial revenues from those sources grew at an annual rate of nearly 46 per cent from 1972-73 to 1979-80 -- actually from $400 million to $5.5 billion in those seven years. Ontario, the have-not province with respect to those kinds of energy resources, had no increase in its revenue.

The revenue which is traditional for this province, such as personal income taxes and corporation income taxes, grew much more slowly. Personal income tax in Canada grew from 2.8 billion to $10.4 billion, which was only 20 per cent a year compared to 46 per cent on energy. Corporation income tax grew from $0.9 billion to $2.2 billion, or just 13 per cent a year over those seven years.

The equalization entitlement is based on the weighted average of the top two provinces. Yet when they pulled so far ahead that we became entitled to payments here, Ontario agreed to forgo them. Ontario did this even though tremendous concessions had been made in the equalization formula on oil and gas revenues to the producing provinces.

First of all, as I know the minister and the House are aware, they only consider 50 per cent of those revenues now -- a change in the formula over the years -- in the base computation. They have phased out, for the basis of computation, the revenue from the sale of crown leases, and this has been a major factor. And there has been a cap put on so no more than one third of the total revenue relates to these revenues from the nonrenewable resources.

In other words revenue from income tax, from corporation tax, from hospital premiums, from forestry revenues, from school property taxes, all are figured in at 100 per cent. But the nonrenewable is considered at 50 per cent, minus various other deductions.

The end result has been that although the annual rate of growth of the oil and gas revenues is at 46 per cent per year, the amount considered grew at less than 30 per cent per year. So surely the oil and gas producing provinces, vis-à-vis Ontario, have been given adequate consideration.

The second major reason for Ontario moving into the equalization entitlement category is that our nonresource revenues have declined proportionately during the 1970s. Ontario’s share of the basic federal income tax paid by Ontario people has dropped from 44.7 per cent of the total to 39.8 per cent. Ontario’s share of the basic corporation income tax dropped from 45.2 per cent to 36.3 per cent. This is the picture for the last seven or eight years, and in the last year it has worsened substantially.

5:30 p.m.

First of all, I guess for the first time in many decades, we have seen more people leaving this province, more emigration than immigration. There was a net deficit last year of something in excess of 5,000 people. That was even in the situation where we had a large influx from Quebec because of the situation there.

We know the situation of the auto industry. There is a deterioration to the point where something like 30 per cent of the auto workers are unemployed. Thirty per cent of workers in the construction industry are unemployed. Even the government’s budget gives recognition to this serious situation. It estimates that only 59,000 new jobs will be created in this province this year compared to 161,000 last year.

We know very well -- to put this whole thing in perspective -- there are going to be substantial hikes in energy prices this year and in the years ahead, to give a further imbalance to the situation, and not in favour of Ontario. Our tax resource base is bad. It is going to worsen. The government should have been, and should now be, opposing Bill C-24 to cut us off equalization payments, not just for this year but for succeeding years as well.

The budget states that for each $2 increase in the price of oil, it will take from the Ontario consumers something like $640 million annually. Yet the government is opting out of getting anything in return from the federal government or from the other provinces for that $640 million we are going to lose for each $2 increase in the price of oil. They have disadvantaged Ontario vis-à-vis every other province in Canada by refusing equalization payments.

All of the other provinces continue to use the formula, and the have-notes get increases based on that formula. If the formula is not right for us, I suggest to the minister the formula is not right for them.

The budget paper uses the term over- equalization in many places. If it is over-equalized for us, and therefore we should reject it, it must be overequalized for the other provinces as well. Yet the people in this province have to dig into their pockets to pay federal taxes to pay equalization to other provinces which we are rejecting here. There is something wrong with that.

The producing provinces get that extra energy tax resource. We have only the two categories: those who produce the energy, and therefore are going to get an additional resource on their own; and the others, who get equalization payments -- or should get equalization payments. All the other provinces are taking those additional equalization payments, except Ontario. This government has given up what we are entitled to.

The very conservative Canadian Tax Journal deals with equalization and shifting provincial revenues in its November-December 1979 edition, and expresses great concern about Ontario’s position. It says: “In summary, Ontario’s positive equalization for natural resource revenues has increased rapidly” -- when they say positive, if anyone here doesn’t know how that term applies, it means positive in moving towards, and now past, getting equalization payments -- “and its relatively stable offset of negative equalization for nonresource revenues is no longer large enough to prevent it from qualifying for equalization. The proposed exclusion of Ontario from equalization has the appearance of being rather arbitrary and creates obvious problems for equalization programs.

“There are, however, certain reasons why the federal government might wish to make such an exclusion. The cost of making payments to Ontario would be rather substantial, running into some hundreds of millions of dollars. Given the large federal deficit, it is questionable whether payments of this magnitude would be appropriate. Thus, if one assumes that Ontario is already able to finance a reasonable level of public services from its own resources, there may be valid grounds for not making payments to Ontario.”

We will stop at the end of that quote for just a moment and point out that even if it does cost millions of dollars, if we are entitled to it out of their formula and the other provinces are getting it, then why should we not get it as well? Even though we may be able to finance our social services and our other services in this province on a reasonable basis -- certainly, we are not as poor as many of the other provinces -- the fact remains that if we are entitled to it we should be getting it because they have been paying it to the others for as long as that formula has been in existence.

I quote again: “It may also be argued that making payments to Ontario when its personal income per capita continues to be well above the national average per capita would weaken the overall credibility of the program. These may be valid arguments for not paying Ontario; however, they cannot be applied over any extended period of time if Ontario continues to qualify for equalization. It is therefore clear that the treatment of Ontario is one of the principal matters that will have to be examined in establishing a new equalization formula.”

I say the minister should immediately re-examine the basis on which we have refused these equalization payments and make sure the people of this province, in the situation we are in at the present time with our massive unemployment and our economy at a much lower level than it has been, have the advantage of getting our fair share of these equalization payments.

I want to say that I recognize, first of all, on this whole issue of equalization payments, that there is some justification for treating nonrenewable resources differently to renewable resources because they are going to run out and those provinces will not always have them.

I recognize Ontario taxpayers will pay much of the additional tax because federal taxes are not levied on the basis of additional oil arid gas revenues. We are going to have to pay a substantial proportion of the $400 million that we receive. I also recognize that Ontario is not yet a have-not province in relationship to the averages of the other provinces, but I also recognize we are paying our share of equalization to other provinces and that we are now no better than fourth in the ‘have provinces. Compared to the top two or three, we are a have-not province.

I also realize, and this is something that I suggest was not dealt with in the budget paper properly, that there is no net cost in equalization payments. The budget paper constantly speaks of the costs to the federal government. Obviously, they may have to raise more of it in taxes, but if this province gets its $560 million or so from the federal government to which it is entitled, that is money that we don’t have to raise in taxes. There is no net cost to the taxpayer of this province in having n fair equalization, so we are getting our fair share.

I also recognize that our economy is sagging badly. We are 10th in the rate of growth. I am not sure this is to our credit, but the expenditures per capita in this province for all of these services is less than for any other province in this nation. None of us likes to brag about higher expenditures, but I want to say that to some extent at least this is made on the backs of the farmers who have not been getting the low interest rate loans that they have in all the other provinces. This is made in the provision of services at a lower level than in many of the other provinces, such as Saskatchewan, where they have a denticare program. We should be getting some of this money to use for those purposes.

5:40 p.m.

I am a bit confused by the budget paper, I have to admit, and perhaps the minister would like to comment on this when he gets up, because on the one hand it decries the present disparity and even more the prospects of it increasing -- I am sure the minister would agree that the budget paper does that -- and on the other hand it talks about exempting in the various formulas that are put forward the energy resource revenue from equalization calculations, so as to keep down federal taxation, or the amount of taxes required for the payment.

I suggest to the minister we can’t have it both ways. Either he equalizes, with all the volume of taxes that that involves -- recognizing it is an equalization, not new taxes -- or if he doesn’t, the disparity increases between the provinces. I don’t see any other way out of that unless the minister gets some voluntary contributions, and I know some of these formulas provide that, even on a lesser scale than the present formula that is in existence now with regard to equalization.

The scenarios for the forum and for equalization are good study papers, I suggest, but we must not lose the transfer payments that are due to this province in the meantime until those new formulas are actually worked out. I urge the minister to make a recommendation to the cabinet immediately under section 5 of the act that it reverse its decision, accept the equalization payments to which we are entitled and fight for their continuance while developing a new formula. This year and next year, according to the budget, we are talking of a total of about $1 billion revenue to this province.

While we are talking about equalization payments and agreements, while we have had an agreement federally now for these equalization payments for 23 years, it seems appropriate to mention the absence of agreements between the provincial government and the municipalities on the transfer payments. This was mentioned by the member for Waterloo North (Mr. Epp) and we in this party have repeatedly raised with the minister that there should be legislated revenue sharing between this province and the municipalities.

Doesn’t it strike the minister as a bit odd that there were 24 pages of the budget paper on the subject of equalization and fiscal disparities in Canada? It mentions all the agreements, revisions and new scenarios for this subject at a provincial-federal level, but not one word about provincial-municipal legislated agreements.

In conclusion, I just say to the minister that two of the most important issues facing him are, first, getting everything to which we are entitled under the formula, a fair sharing from the federal government to the province, and second, the agreement that provides a fair sharing between the province and the municipalities.

Mr. Isaacs: Mr. Chairman, it is a pleasure to rise and participate with the minister in the consideration of his estimates for the second time. I want to thank, as well, my colleague the member for Welland-Thorold for leaving the major municipal issues for discussion by me in this debate. Municipalities are facing difficult times and the taxpayers within those municipalities are facing difficult times.

I want to comment, first of all, on a remark the minister made towards the conclusion of his own introduction to these estimates earlier this afternoon. The minister said the responsibilities of his ministry are infinite in their variety, complexity and importance. I want to suggest that not only the responsibilities but also the actions of the Ministry of Intergovernmental Affairs are often infinite in their variety and complexity and perhaps in their importance too.

I want to ask the minister to think very carefully about that word “infinite.” Infinity is something that is beyond all of us and bigger than all of us. Infinity is where parallel lines meet. Infinity Is where property taxes become so burdensome they are unimportant. Infinity is an incredible goal for a ministry as important as the Ministry of Intergovernmental Affairs, If the minister is telling us that the responsibilities are infinite in their complexity, then no wonder the taxpayers outside and the municipal elected officials and the municipal appointed officials are unable to understand what is going on in that ministry.

I want to propose in this lead-off address that the minister should have come before us today with a charter for municipal government. We are desperately lacking a direction for municipal councils in this province. Municipal councils themselves don’t know exactly where they are headed. I am convinced, after watching a year of relative inaction on the important problems that municipal government faces, that the ministry itself does not understand the direction of municipal government.

I want to suggest that the charter for municipal government should define in very broad terms the direction in which municipal governments should be heading. It should outline the responsibilities of municipal councils in the areas of planning; in the provision of local services; in the matter of charging of taxpayers for those local services; and ensuring that the people who live within organized municipalities know clearly what the responsibilities of the level of government closest to them should be and will be. Instead of that charter for municipalities, we have the Municipal Act which, as the minister has indicated, is archaic, is too specific, is impossible for any but the most experienced municipal lawyers to interpret properly.

In his example, the minister dealt with the provision of the Municipal Act which allows municipalities to provide by bylaw restrictions on the hauling of dead horses, offal, night soil or any other offensive matter or thing along any highway during the hours of daylight. The minister has suggested that provision was one that should be removed from the Municipal Act

If he removes that from the Municipal Act, he is taking away a power which local government presently has. I want to suggest that within a few days of taking away that power I will guarantee someone will start dragging dead horses along a highway. I will guarantee a municipal council will be coming here to tell us this Legislature needs to take action to regulate the dragging of dead horses along highways.

We can’t deal with things in terms of those specifics. We have to have general powers that say local government does this and provincial government does this, in the same way that we have the British North America Act, a constitution of sorts, that says the provincial government does this and the federal government does the other. The British North America Act is not perfect -- we are all aware of that -- but it deals in general terms with the responsibilities of the two levels of government.

I strongly suggest to the minister that is the kind of charter we need for municipal government in this province. We need an outline of the responsibilities that municipal government has so that when taxpayers have problems they know where to turn, they know who to vote out of office for the things they don’t like that are happening or who to vote into office in order to get things they want to happen, and so that it is dear in the minds of elected officials, appointed officials and taxpayers at all three levels who does what in the matter of government in this province.

5:50 p.m.

I want to comment further with regard to the quote the minister brought out of the Municipal Act and that I repeated, that while one might kid around on the matter of hauling of night soil, there is a neighbourhood very close to the neighbourhood in which I live where night soil collection goes on to this day. Indeed, the local municipal council voted just two years ago to privatize that operation because it was unhappy with the way it was being handled by municipal staff.

The hauling of night soil is important in some parts of the province, and we can’t deal with things by playing around at this level with those kinds of specific details. We must have the broad overview as to the responsibilities of municipal government so that local councils can get on with their thing and we get on with our thing.

I want to take it one step further: We need to put in place a mechanism to ensure that local government does not become the scapegoat for the inadequacies of the provincial government. On many occasions we see situations where questions are answered by ministers in this House in the vein of, “It’s a municipal responsibility.” That is okay if we clearly understand those areas that are a municipal responsibility and if they are defined in a charter as being a municipal responsibility. But so often we see the situation where the provincial government finds something too hot to handle and it therefore transfers the responsibility, passes the buck to the local government, in the hope that the matter will get lost or dealt with or so befuddled that no one will know who to blame.

When we look at matters of waste disposal, when we look at matters of new hospitals, when we look at matters of provision of social services, we see that going on all the time.

In addition, the provincial government should make a commitment that it will act on behalf of municipal governments so that when municipal governments collectively have a problem they can come to the province and say, “Province, help us deal with this problem.” The provincial government then would make its resources available to help the municipal level of government deal with that problem, to find its solution province-wide, instead of having the present situation where literally millions of dollars are wasted because individual municipalities are hiring different consultants, or using their own staff, and all of them are studying the same problem.

The area of property taxes is one where it is clear that many municipal councils are putting much effort into trying to come to grips with the problem of property taxes, yet the problem is a common one across all municipalities.

Similarly in the area of waste disposal, particularly industrial waste disposal, that needs to be dealt with at the provincial level because there just is not the resource in any one municipality to deal with it.

At the moment, individual municipalities are spending hundreds of thousands, probably millions, of dollars in preparing for Environmental Assessment Board hearings and hiring consultants on how to build landfill sites and how to dispose of industrial waste, both solid and liquid. We have to get that kind of thing centralized because it is a common problem that all municipalities face now or will face in the future, and it is a problem in an area where the provincial government does have the expertise.

That is the view I have of a charter for municipal government, a two-way street in which the province sets out clearly the responsibilities of the municipal level of government and it also accepts a responsibility to work on behalf of the municipal level of government. If all or part of that charter can be shared with our sister provinces and can be incorporated into a revised Canadian constitution, as my colleague the member for Scarborough West (Mr. R. F. Johnston) talked about last week, then so much the better. But as a first step let’s at least get away from looking at the specific detail that is contained in the Municipal Act and let’s allow municipalities a framework within which to carry out their kind of business.

The minister may have noted that the charter I have been talking about has ignored the matter of special-purpose bodies. I have been talking about the provincial government and the municipal government. I think the problem of special-purpose bodies is a serious one. I think it is one the provincial government is going to have to come to grips with and again I am disappointed the minister made no reference to it in his leadoff statement. I hope we can get into it again later, because we have special-purpose bodies at the moment to deal with all kinds of things -- to deal with the police; to deal with so-called conservation which is often now getting into the area of running recreation facilities; to deal with libraries; to deal with harbours. There are special-purpose bodies all over the place.

Those special-purpose bodies are very remote from the taxpayer, from the city and from the voter. They are not directly accountable to anybody and indeed they are often set up, in my view deliberately, to avoid being accountable. I think we have to come to grips with that and I think we have to ensure that even where a special-purpose body may be justified it is clearly and directly accountable either to the municipal government or to the provincial government. Then if taxpayers and electors are upset about the actions of that special-purpose body, they can go to the appropriate level of government and say, “Please deal with this because we can’t have that body going on the way it is.”

I think the minister is aware of the problems that have been discussed by municipal councils and by the AMO and others over the years and I hope he can tell us later that there is some direction being made on this matter of accountability of special- purpose bodies.

The next area I want to get into is the matter of property taxes. Property taxes continue to be the single most important and most unfair problem facing taxpayers, both home owners and tenants, as well as business and industry across this province.

I notice, Mr. Chairman, you are looking at the clock and I wonder whether this would be an appropriate place to break. I could continue my important remarks about property taxes next day.

Mr. Chairman: If you expect your remarks to be lengthy, this would be the appropriate time.

Mr. Isaacs: My remarks will very definitely be lengthy on the important matter of property taxes, Mr. Chairman.

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

The House adjourned at 6 p.m.