Hansard Transcripts 1981-Oct-13 | Legislative Assembly of Ontario

Mr. Speaker: The Lieutenant Governor transmits supplementary estimates of certain additional sums required for the services of the province for the year ending March 31, 1982, and recommends them to the Legislative Assembly. Signed by John B. Aird, Lieutenant Governor, Toronto, October 13, 1981.

FIRST CLERK ASSISTANT

Mr. Conway: Mr. Speaker, I rise on a point of personal privilege. I am concerned about what I believe to be the most basic and the most important of all parliamentary privileges, namely, the independence of this Legislative Assembly.

I have before me, sir, your letter to Dr. E. E. Stewart, Deputy Minister, Office of the Premier, dated August 18, 1981, in which you indicate that you "will not be recommending the reappointment of Mr. John A. Holtby, first clerk assistant of this assembly."

I read your letter with great care and attention. I have also read it with greater concern and disappointment. You spoke, Mr. Speaker, in that letter of August 18, of difficulties that had to be resolved, of personality conflicts that were irreconcilable and, from your point of view, were very troubling and rendered the operations of this assembly something less than you would have liked them to have been.

There can be no doubt, sir, that your action regarding the dismissal of the former first clerk assistant has dealt very directly with some of that problem. Unfortunately, your actions, as outlined in the August 18 letter, are incomplete from my point of view and will be perceived as such on at least two counts. There can be no doubt in my mind that all honourable members share with you the very difficult job which is yours to perform on behalf of all 124 other members in this assembly. We would be dishonest if we did not all publicly and privately agree that there are difficulties, as will naturally occur when you put 125 people in the function we all share.

But in my view, sir, as I said earlier, your action is only a partial response to a very serious problem. The fact is that it will be seen as a partial response to a serious internal problem. That reality and indeed that perception, taken together with an equally important consideration, which I would briefly describe as the incomplete and imperfect consultation that preceded the actions of August 18, will in my humble view jeopardize in a significant way the independence of this Legislature.

I also say that there can be no doubt in my mind -- and I profess to speak only as a private member -- that your actions in this respect will be hailed by some but not all. I dare say that, privately if not publicly, your actions will meet with far greater approval on the government side of this House than on the opposition benches. That is the nub of the difficulty as far as the independence of this Legislature is concerned.

As the Camp commission so eloquently pointed out, this assembly has had a long and very difficult time in coming to terms with the development and evolution of a genuinely independent role for itself. In the second report of the Camp commission, tabled in December 1973, on page four, there is a very timely and useful bit of advice. I quote briefly from one sentence of that second Camp commission report: "It is the belief of the commission that the administration of the affairs of the Legislature ought not to depend on personalities. Instead, a permanent administrative framework should be created, strong and durable enough to function regardless of personality."

I will conclude, sir, by simply advising of my very personal and deep concern about the impressions and the realities that will flow from your action of August 18. As well, I strongly advise you and other members interested in this most important of parliamentary matters to look seriously and again at the recommendation of my friend and colleague the member for York South (Mr. MacDonald), who on April 3, 1980, discussed a private member's resolution that sought to establish the kind of administrative framework that would remove from you, sir, and from many others, the kind of difficulties into which, in the absence of this kind of framework, we have fallen in this instance.

In conclusion, I regret again that the actions have been taken without the complete consultation with the principals of this assembly. Your letter speaks of consultation, but it is my impression, having spoken with a number of members of this assembly, that the consultation of the leadership of all political parties in this assembly was not as complete as it ought to have been. I strongly encourage that the resolution of the member for York South, seeking as it does to establish and entrench the administrative framework so that this kind of consultation can be put in place, ought to be proceeded with as soon as possible.

2:10 p.m.

Mr. MacDonald: Mr. Speaker, may I add a few words in general endorsation of the thrust of the remarks by the member for Renfrew North (Mr. Conway)?

He has referred to my resolution of something over a year ago which was debated in this House. While some reservations were expressed in various portions of the House, I think the principle of it was generally accepted. I would like to believe that principle is going to be adhered to and is going to be implemented.

Even more important, the whole thrust of the report of the Camp commission some six or seven years ago was that, if we were going to be able to get this Legislature back on track in terms of British parliamentary experience, the Legislature would have to be set up as an independent body, independent of the government in many respects. It made specific recommendations, many of which have been implemented, I hasten to say.

However, there is one area that is critical, that of the posts of Speaker of the House, Clerk of the House and first clerk assistant. I could go further but I will not do so today. If we are going to live up to that principle, the people who are servants of this House and who are answerable to this House must be chosen by people who speak for this House; in my view, by the House leaders.

If I have any objection, and I do have an objection, I think the letter to the secretary of cabinet was in keeping with the old pattern which I thought was part of a closed chapter that we were now going to forsake, namely, informing the clerk of the cabinet, and through him the cabinet, that you did not see fit to appoint a servant of this House. In my view, that is a point that should be discussed by the House leaders.

I make only this point in conclusion: I understand that process is now being grappled with. Henceforth, when we are appointing servants of this House -- you and your successors in the years ahead, but more immediately people around the table -- I trust that decision will be made in consultation with the House leaders, who can speak on behalf of all the parties in the House. If that is done, these people not only will be perceived to be servants of the House but also in reality will be servants of the House, which they should be, and not servants of the government, either in perception or in reality.

I trust the efforts that are now being made, the discussions that are now going on among the House leaders, will be pursued so that by a process of osmosis, if not automatic implementation, the spirit of my resolution a year or so ago will be accepted and implemented.

Hon. Mr. Davis: Mr. Speaker, I want to comment briefly on this matter so that the perception the member for Renfrew North was endeavouring to create does not become a reality. The perception he was trying to create, that there were a number on the government side of the House who took some satisfaction or were pleased with what has transpired is just factually untrue.

While I am not going to debate today the basis of the resolution standing in the name of the member for York South, because that to me is not the issue at this precise moment, I understand from the government House leader that arrangements have been made already with you, Mr. Speaker, to discuss how the first clerk assistant, if that is the correct terminology, is to be appointed.

I must remind members of the House that, while they always take great delight and pleasure in saying how independent the Legislature must be from the government -- and I accept that principle with enthusiasm -- I also sense that, when things do not go too smoothly here in the House, it is the government by and large that is held responsible, not the independent officers of the assembly on all occasions.

Mr. Martel: And well it should be; you are accountable for your actions.

Hon. Mr. Davis: That is fine. But all I am saying is, my honourable friend cannot have it both ways.

I do not mean to be provocative, Mr. Speaker. You were faced with what was a regrettable situation in terms of the relationships that existed amongst officials of this House. I think it is fair to state that the former Speaker was aware of this.

I think the former Speaker could say that in my capacity as Premier I never tried to interfere with his functioning nor sought special favours, other than maybe a cup of tea -- I did not even seek that -- in all his time as Speaker of this assembly. I would be very surprised if he could say anything to the contrary. I never sought from him any special consideration in terms of debates or as to whether something was an emergency or not. That was, in my view, the proper type of relationship.

I think it would be unfair for the member for Renfrew North to create the impression that you, Mr. Speaker, exercised anything other than a reasonable judgement, faced with a difficult situation. On behalf of the members on this side of the House, in my view, a decision has been made. It was not easy. I am one of those who is prepared to stand up and wish John Holtby extremely well in his new career. I say that on behalf of all the government members in the House.

STATEMENTS BY THE MINISTRY

TRIBUTES TO LEADER OF THE OPPOSITION

Hon. Mr. Davis: Mr. Speaker, I have one or two statements to make. At the outset, I must say that the first one is not a prepared statement, and I do apologize to the Leader of the Opposition (Mr. Smith) for not having it prepared in advance. But, in that we are starting the fall session of the new parliament, and recognizing how feelings were last spring and accepting that the Leader of the Opposition and I have had, shall we say, the odd verbal confrontation, I am most sincere in saying to the member for Hamilton West -- not that I totally regret his decision; I have mixed views on that -- that as one who knows something of the sacrifice that is made being in public service, while I have not had the experience, and I hope never will, of being Leader of the Opposition, I know how difficult a task it is, particularly when I look at some of his colleagues across the House and know how some of his caucuses must have been.

Mr. Peterson: Like the member for Prince Edward-Lennox (Mr. J. A. Taylor), you mean?

Hon. Mr. Davis: Listen, don't provoke me today, because I can recite chapter and verse some of the honourable member's antics. He is part of the problem.

Mr. Martel: You should look to your left.

Hon. Mr. Davis: I say to the member for Sudbury East (Mr. Martel), unlike him I do not look to my left but either straight ahead or a little bit to the right.

Mr. Speaker: Will the Premier please carry on with his statement?

Hon. Mr. Davis: Yes, I will carry on with my statement. Knowing something of the personal sacrifice that is involved in terms of one's family and one's profession, I fully appreciate what the Leader of the Opposition has gone through and what he has contributed in his period as Leader of the Opposition here in Ontario. I know it is not coming to an end today. That does not happen, I guess, until whenever it is in March, but I do offer to him my sincere best wishes, and I say this most sincerely, for the future. I cannot promise him any public sector responsibility that is necessarily approved by this government, but I would be more than willing to make a representation to the government of Canada that, for instance, a seat in the Senate would be most appropriate for the member for Hamilton West. I speak quite seriously --

Mr. Sargent: You lack class.

Hon. Mr. Davis: I hope the honourable member is being as kind to his leader as I am.

I say to the Leader of the Opposition, in a very personal sense and speaking for my cabinet and caucus colleagues, that we wish him well in whatever career -- I hope nonpolitical -- he may wish to pursue.

2:20 p.m.

Mr. Smith: Mr. Speaker, I might briefly respond by thanking the Premier for his gracious comments. I do not quite feel ready for the upper house at the federal level -- not that I have been offered it -- in fact, there are times in this House when I feel ready for retirement from the upper house at the federal level.

I do not intend to view politics from that lofty a height. I hope during the next few months to make life as interesting as possible for the Premier of Ontario and for his colleagues, who certainly vary from each other in their comments on matters such as human rights -- as from time to time even my own colleagues have been known to vary from each other.

Mr. Nixon: Very rarely.

Mr. Smith: I will have occasion to address a few comments, I am sure, when it comes time for me to actually step down as leader. At that time I presumably will speak at greater length. But today I simply want to say I intend to be as vigorous an opposition leader as possible for the next little while.

I certainly have appreciated the exchanges that have occurred between the Premier, the leader of the New Democratic Party and myself. I respect them as gentlemen and hope we can continue a relationship at that civilized level for the remainder of my term here as Leader of the Opposition. I simply want to say thank you to the Premier for his kind comments.

Mr. Cassidy: Mr. Speaker, I too want to express my sympathy to the leader of the official opposition for the difficult decision I know he had to go through this summer. I have been that route before; so that makes two of us now. I suspect that in a few months' time the member for Hamilton West and myself could get together and write our memoirs jointly of the last three or four years in the Ontario Legislature. He could psychoanalyse the government and I could chronicle what they have done. We might come up with some truths as a consequence.

It is a bit too soon to write the obituary of the member for Hamilton West. He, like I, is passing on to that role of elder statesman within his own party, which allows one a bit more licence, a bit more freedom to speak truth and to act independently. He has certainly put in long hours and a great deal of effort and energy over a period of some five and a half years in seeking to take his party to power, as I have with mine. It has been a frustrating experience for both of us, but I certainly wish his successor well as I wish my successor well.

Both of us will be watching with interest, because I understand there are not two but, in fact, three battles which may be fought over the coming years for the succession. We will be watching the government benches to see what the pretenders are doing on that side as eagerly as the government will be watching these benches here.

CONSTITUTIONAL DISCUSSIONS

Hon. Mr. Davis: Mr. Speaker, I want to leap in and say the next statement I make has nothing to do with my political plans for the future.

Mr. Bradley: Mayor of Brampton.

Hon. Mr. Davis: Not a bad job.

Again, I will apologize for the very brief verbal report on the constitutional discussions. I have had my notes updated only in the last few minutes; so I have no written report. The best information I can share with honourable members of the House is really what I said at the press conference, and they have probably read that in the press.

I made it quite clear that I was ready to go to a meeting today. I was ready to go this coming Thursday. There may be a meeting of all 10 Premiers on Monday; I am not completely sure of that yet. The Premier of British Columbia is meeting with the Prime Minister this evening, I believe. The Prime Minister has indicated he would now meet -- instead of today or Thursday -- next Tuesday.

I said to the press conference that, if there could be some greater measure of consensus, Ontario would be delighted to participate in that. We would have some measure of flexibility in terms of the charter itself. We have said from the outset that we have an open mind with respect to an amending formula, and we still have that.

As events unfold, I will share with members of the House any information I have. But at the moment it appears as though there could be a meeting of first ministers on Tuesday. There probably will be a meeting of Premiers on Monday. If I am invited to that meeting, I shall be there and will report to the House on my return.

ONTARIO ENERGY INVESTMENT

Hon. Mr. Davis: Mr. Speaker, I do have a formal statement to make. I am pleased to advise the House that an agreement in principle has been reached between Sun Company Incorporated of Radnor, Pennsylvania, and Ontario Energy Resources Limited, a subsidiary of the Ontario Energy Corporation, to purchase 25 per cent of the shares of Suncor Incorporated.

The negotiated price for this interest is $650 million.

Final arrangements for the sale will be worked out over the next few weeks and will be subject to satisfactory agreements and other conditions being achieved.

As members know, the Canadianization and crude oil self-sufficiency goals outlined in the federal government's national energy program pose enormous financing challenges to Canada when one considers the very large asset base of the petroleum industry.

Mr. Cassidy: You wouldn't do this for Denison.

Mr. Speaker: Order.

Hon. Mr. Davis: Denison is Canadian-owned.

Mr. Smith: That is a new distinction for you.

Hon. Mr. Davis: Yes, there is a distinction; I hope the Leader of the Opposition understands it.

This purchase will assist in the Canadianization of the petroleum industry and fulfils a policy commitment announced by the Minister of Energy (Mr. Welch) a year ago for greater Ontario participation in the Canadian petroleum industry.

The government has been assured by Sun Company Incorporated that it intends to continue to seek other Canadian investors so that at least 51 per cent of Suncor shares will be owned by Canadians as soon as possible.

The agreement provides for additional opportunities for Ontario Energy Resources to negotiate a further percentage interest from Sun, if necessary, in order to facilitate the Canadianization process.

As a result of this acquisition, Ontario Energy Resources Limited has the right to nominate a proportionate number of members to the Suncor board of directors.

Over the past several months, the Ontario Energy Corporation has considered a number of potential opportunities to determine which investment could most effectively contribute to Canadianization of the industry and other policy objectives, including a stronger voice for Ontario and its people in the energy business. Its financial consultants, McLeod Young Weir Limited and Price Waterhouse and Company, have exhaustively reviewed the assets and business of Suncor and have advised that the negotiated price is a sound investment for Ontario taxpayers.

As members may know, Sun Company Incorporated first invested in Canada in 1919. During that time its investment has grown so that today Suncor is one of Canada's largest integrated oil companies and was the first to tap the enormous potential of the Alberta oil sands on a commercial scale.

Suncor explores for and produces conventional crude oil and natural gas in Canada's western provinces and is active in the search for oil and gas in the frontier areas, including the Arctic islands, the Mackenzie Delta and offshore Labrador. As well, Suncor manufactures, distributes and markets gasoline, petrochemicals, home heating oil, heavy fuel oil, lubricants and specialty products as well as owning and operating a refinery in Sarnia.

The initiative I have announced today signals a new phase in the activities of the Ontario Energy Corporation and represents a commitment by this government to contribute to crude oil self-sufficiency for Canada and to provide Ontario with a stronger voice in the determination of energy policy in this country.

Interjections.

Mr. Speaker: Order. I ask those leadership hopefuls to please maintain order in the chamber.

BUSINESS OF THE HOUSE

Hon. Mr. Wells: Mr. Speaker, I would like to make a few remarks, not as Minister of Intergovernmental Affairs but as government House leader. I do not have a copy of this but, since we are all here again for this fall session, dedicated to the beginning of a very workmanlike and productive session, I thought I might outline at this earliest possible time the business of the House.

As will be very obvious to members from the list of estimates considerations still remaining on the Order Paper, the bulk of the time in our four main standing committees will be spent on estimates. On our Order Paper today we see that there are 240 hours of estimates work still to be done. However, I am sure the committees will be able to handle this job.

2:30 p.m.

Without in any way prejudicing later decisions of the House, Mr. Speaker -- as you know, you have two motions before you for an emergency debate -- I would like to indicate the business of the House which has been arranged through the usual channels with the other House leaders.

If it is decided that legislation should proceed this afternoon, we will call Bills 100, 47, 22 and 6. At eight o'clock tonight, immediately after the supper recess, we will call Bill 84 and then return to Bill 6, the Business Corporations Act, for the remainder of the evening if time remains.

On Wednesday, the general government, resources development and administration of justice committees may meet in the morning. On Thursday afternoon we will have private members' public business, and I expect to be putting a motion to the House later this afternoon which will affect one of the two items.

On Thursday evening, we will take into consideration the final 1980 report of the standing committee on public accounts. While there is no motion for adoption of this report, I think there are a number of items in the report that will be of very topical interest to all the members.

On Friday, we will enter into debate on the final three bills from the 1981 budget, Bills 71, 79 and 80. I point out that we will also continue with consideration of these pieces of legislation next Monday afternoon.

Looking into other business likely for the House during this session, I expect that we will be calling Bill 68, the Metropolitan Police Force Complaints Project Act, as soon as it is reported from committee, which I assume will be in the not-too-distant future. The same will apply for Bill 7, The Human Rights Code, 1981, when the work of the committee on that bill has been concluded and it is back here in the House.

On the Order Paper there are about 16 bills, and we intend to proceed with all of those. Looking at the future, I see about another 24 bills that will be introduced very shortly, and we hope the House will be able to consider those before Christmas. To show that we are really moving ahead, four or six of those bills will be introduced today, and I expect by the end of the week that another six or so will have been introduced.

I trust we will be able to enjoy a very profitable session of this Legislature. I might say, in making that wish, I welcome all the members back. I am particularly pleased to see that the member for Dovercourt (Mr. Lupusella) is back with us again, and I know that the members of the House would like to welcome him back. Mr. Speaker, I am sure we will all be co-operating to help you make this a very workable centre of democracy.

Mr. Breithaupt: Mr. Speaker, with respect to the announcement made by the government House leader (Mr. Wells), he mentioned 240 hours and yet the Order Paper shows 375. Has this now been agreed as to all the changes?

Hon. Mr. Wells: It is my understanding that is the amount of legal time left according to the Order Paper. If you add up the estimates columns, the amount of time left comes to about 240 hours. We are not yet filling up the complete time. That is the time that would remain to you.

HEATING GRANT PROGRAM

Hon. Mr. Ashe: Mr. Speaker, later today I will be introducing two bills which will implement the program for temporary home heating assistance announced by the Treasurer of Ontario (Mr. F. S. Miller) on June 23, 1981.

The bill to amend the Ontario Pensioners' Property Tax Assistance Act will enact the temporary home heating grant. This grant is designed to offset some of the impact of home heating costs -- cost increases that senior citizens are likely to experience over the next three years.

Persons 65 years of age or older who have incurred occupancy costs for their family home will automatically receive their temporary home heating grants in the spring of 1982, 1983 and 1984. The amounts of the grants will be $60 for 1981, $40 for 1982 and $20 for 1983. The bill to amend the Income Tax Act will enact the temporary home heating credit. This credit is intended to reduce the impact of home heating costs for other low-income and fixed-income Ontarians for the next three years.

Individuals who own or rent their homes will be able to claim the temporary home heating credit by filling out the Ontario tax credit form in their income tax returns. The maximum amounts of the credits again will be $60, $40 and $20 for the respective years 1981, 1982 and 1983. Because the home heating credit is geared to the income of taxpayers, the credit will be reduced by one per cent of their taxable income for the year.

Other amendments in this bill to amend the Income Tax Act will bring the administrative provisions of the Ontario act into line with the federal Income Tax Act. Under the terms of the Canada/Ontario tax collection agreement, Ontario's individual income tax and tax credits are administered for the province by the federal government. The proposed amendments will facilitate the common administration of the federal and Ontario income tax.

Mr. Speaker: Before proceeding with oral questions, I would like to draw to the members' attention the presence of Senator James Mills, who represents the 40th district of the California state Senate. I would ask you all to join with me in welcoming Senator Mills.

ORAL QUESTIONS

ONTARIO ENERGY INVESTMENT

Mr. Smith: Mr. Speaker, may I inquire of the Premier in regard to the statement he has made concerning the purchase of 25 per cent of the shares of Suncor, could the Premier share with the House some further information? First, is it his understanding that this 25 per cent interest will give Ontario Energy Corporation a controlling interest in Suncor as of now, even before additional buyers are found within the country? Second, can he give us some indication of what return he is anticipating on the investment Ontario is making, taking into consideration the interest costs, which undoubtedly have been calculated, in raising the $650 million?

Hon. Mr. Davis: Mr. Speaker, I am not an expert in the matter of what constitutes control, but if 51 per cent constitutes control, then obviously we do not and are not intending to acquire control. Our involvement really is to pave the way for Canadianization of this particular integrated energy company, with the desire to have somebody or some companies acquire the additional 26 per cent.

I think it is fair to state, with my limited knowledge of corporate affairs, that 25 percent, while it is not technical or legal control -- because Suncor is very closely held in the United States, as I am sure the Leader of the Opposition knows -- does give us a measure of input into determination of what it is doing. But in terms of, say, voting rights, the 25 per cent in itself would not give control.

Mr. Smith: By way of supplementary, may I ask the Premier if he would refer himself to the second part of my question when he rises again, namely, the return he anticipates and the interest costs on the money. Could he tell us where he is going to raise the money? Is he going to raise the money here in Canada and spend it in the United States, in apparent contravention of what Mr. MacEachen was asking the banks to do some time ago, or is he going to raise the money elsewhere? Can he tell us exactly what the financing arrangements are?

Hon. Mr. Davis: We are having a press conference at four o'clock, and I would invite the Liberal energy critic to be there, when much of this detail will be made public. Of the $650 million, which represents the 25 per cent cost, my recollection is that 50 per cent is by way of notes back to, or paper back to, Suncor. The other $325 million will come from Ontario and will be from moneys obtained here in Ontario.

In terms of the investment or the rate of return, it is not easy to give a guesstimate on the rate of return, because part of the judgement obviously is predicated on guesstimates with respect to the price of crude, anticipation with respect to some of the offshore potential, and what ultimately may emerge in terms of what will be produced. The people who have been advising us, who are some of the most knowledgeable people in the industry, advise us that the return will be significant and, if things go well, it will be a very worthwhile investment for the taxpayers of the province.

2:40 p.m.

Admittedly, as there always are with arrangements of this kind, there are certain intangibles related to what may emerge in terms of price, although I am constantly reminded by members opposite, particularly their critics, that the price has only one way to go and that is up. We are relatively confident the rate of return will be justified.

Mr. Nixon: On a point of order, Mr. Speaker: The Premier is aware that any ministerial statement requires a compendium of information. With a statement of this importance it is obvious the information asked for should be tabled. Does the Premier have such a compendium as is required under the rules?

Hon. Mr. Davis: Mr. Speaker, I am not sure a statement per se requires a compendium, but we will certainly make sure any information that is available for the press at four o'clock will be available.

Some hon. members: What about us?

Hon. Mr. Davis: We will get that for the members as well.

Mr. Cassidy: A supplementary question, Mr. Speaker: I trust the Premier will be tearing up some of his speeches now that the government has acknowledged what we have said for a long time, that there is a constructive role for government in investing in the major industries of our country. We hope very much the government will take this approach with respect to the natural resources of Ontario as well.

To complement this step of taking ownership of a major oil company, is the government now prepared to institute a warm-up-Ontario program that will ensure we have real conservation and save as much energy within Ontario as we will produce through Suncor now that Ontario has a stake in it?

Hon. Mr. Davis: Mr. Speaker, I think it is fair to state that this government, as well as other significant utilities here in Ontario -- including that very significant energy producer called Ontario Hydro, which the member so enthusiastically supports, as does the member for York South (Mr. MacDonald) -- has introduced some significant energy conservation programs; in fact, some were so successful that some members opposite were complaining about them.

I can recall some observations made about those excellent TV commercials that were instituted in the name of energy conservation, which some members of the House thought were not totally appropriate. This government is very energy-conservation minded. Its programs are directed that way and that will continue.

Mr. J. A. Reed: A supplementary question, Mr. Speaker: I wonder if the Premier could tell us if the $650 million is a true reflection of the Suncor assets that are located in Ontario? Could he tell us how much Ontario-produced oil Suncor controls?

Hon. Mr. Davis: Mr. Speaker, surely of all members opposite, the expert in energy, the member for Halton-Burlington, knows that one of the few problems we have in Ontario is the lack of large supplies of crude oil. We have some limited amounts of natural gas but, unfortunately at this time -- who knows what may be found in Hudson Bay or wherever -- crude oil is not in abundance yet in this province that we know of.

Quite obviously Suncor, and this is true of all the major companies in the business, has its prime producing areas in some of our sister provinces, although I should point out that Suncor has a fairly significant facility in the Chemical Valley just outside Sarnia. I had better not offend the Minister of Agriculture and Food (Mr. Henderson), but a part of it may be shared with the city of Sarnia. I think it is fair to state that any involvement of a meaningful nature by the public of this province in the energy field in oil, and probably in gas, means that it will be in other parts of this country.

Mr. Speaker: New question.

Mr. Peterson: On a point of order, Mr. Speaker: With a statement of this significance, with no information given to this House, as was brought out by the House leader of this party, surely we have the right to question the first minister on this matter.

Mr. Speaker: The members do indeed. However, I am not going to debate it since I am not allowed to debate it.

ACID RAIN

Mr. Smith: Mr. Speaker, I have a question for the Minister of the Environment. I assume he will recall the exchange last summer -- actually in May 1980 -- between his predecessor and me in which his predecessor pretended to be tough with Inco. When I demanded that he insist on a new furnace and a limit of under 1,000 tons by 1985, I was told not to be ridiculous.

In view of the fact that he undoubtedly remembers that, can the minister explain why this secret report which was leaked to me in the last few days, an exhaustive and complete report prepared for his ministry and entitled Nickel Market Conditions and Sulphur Dioxide Control and Inco Limited, has been sitting on his desk for over a year? Why has this report not been acted upon and why has it been kept a secret when it states plainly that Inco could and should clean up to 750 to 800 tons a day by 1985 by the installation of a new furnace?

Hon. Mr. Norton: First of all, Mr. Speaker, I must say I do not recall the specific exchange -- I am sure it took place; I am not questioning that -- nor do I recall offhand from the member's reference having seen that specific report. I think, though, in view of the action we have taken, which my predecessor initiated with Inco in terms of the control orders, that he is unjustified in suggesting that no action has been taken or that it has been too soft.

I think if the member checks with his federal colleagues he will realize we have established a federal-provincial group, which is looking at the situation in Inco to determine where we should go once the company has complied with the existing order, which will be next year. As I understand it, one of the problems is that the new technology has to be developed as the improvement takes place. In fact, Inco is working now on the technology to achieve next year's standard. I am optimistic, on the basis of discussions I have had with them, that they will achieve that and that they know it is not the end, that there will be further steps following that. What we are now trying to determine through the work of the federal-provincial task force is what an appropriate next step would be in terms of available technology.

Mr. Smith: By way of supplementary, Mr. Speaker, given the fact that in this report, Still Waters: The Chilling Reality of Acid Rain, signed by members of all three parties of the federal House who have studied the matter exhaustively, they say the subcommittee recommends that the Inco Limited smelter at Copper Cliff be compelled to reduce its sulphur dioxide emissions to 750 tons per day and that this level be attained within five years; given that that is what I said should be done and what Mr. Parrott said was impossible, and he left them at their 2,000 or 1,950 limit; and given this secret report, which the minister has now hidden for over a year, sitting on his desk and his predecessor's desk, which says that it could be done, that it should be done and that much of the technology was available in 1953, at least in the copper refinery, now will the minister finally not continue to open us to criticism from the Americans, who could poke holes in the arguments we made in Washington, and finally clean up our own act here so that we have some authority when we ask the Americans to do the same?

Hon. Mr. Norton: Mr. Speaker, if the Leader of the Opposition knows precisely where that report is on my desk I wish he would tell me. I must say I do not believe it is or ever has been on my desk.

I think the member seriously underestimates the credibility of the arguments we have been making with the Americans. If he feels we are being less than vociferous in the pursuit of the abatement of sulphur dioxide in this province, I would invite the Americans and any other neighbouring jurisdiction to be as lax as we are being, because we are making progress and we are achieving results. That is more than most of them can say.

If the member wants to quote from the Still Waters report, the federal parliamentary committee report, in terms of its general thrust I certainly support what it is saying about the need for further abatement. I have never taken exception to that kind of statement. Where that report has fallen seriously short is that it has simply failed to take into consideration the measures that have been taken in this country, and it does not give appropriate credit either to the Ontario government or to any other level of government in this country.

2:50 p.m.

Mr. Smith: It's a scathing indictment of Ontario from cover to cover.

Hon. Mr. Norton: If the member reads it carefully he can say it is a scathing indictment of everybody, in simply saying that more has to be done; sure it does. All I am saying is that we are the one jurisdiction that is doing something about it. I have never said there is not more to be done, and as soon as the technology is available, it will be required.

Mr. Laughren: Supplementary, Mr. Speaker: In view of the minister's statement that he does not believe the technology is at present available to get the emissions down to the levels recommended in the Still Waters report, does that mean he has not been informed by officials within his own ministry of the 1975 internal Inco report that indicated that for $300 million they could get down to 1,500 tons a day from a level of something over 3,000 tons a day?

Is the minister not aware of that internal document which has now been substantiated by this federal task force report? If not, why has the minister not inquired of his officials? If he does know about it, why has he not put the pressure on Inco to get their emissions down to a level they admitted they could get down to? Then they decided to withdraw it because they said it was too expensive.

Is the minister aware of that internal report? Is he absolutely certain the technology is not now available to get down to the level recommended by the task force report?

Hon. Mr. Norton: Mr. Speaker, I have not seen any internal document from Inco. I can assure the honourable member that --

Interjections.

Hon. Mr. Norton: I have not seen this report. Maybe the members opposite have. If they have, they have to ask themselves whether or not it said in the report that the technology was at present available.

At one time, as the members know, there was an order that required reduction to 750 tons. That was subsequently altered because of the fact that technology did not exist. On the basis of the best information I have available to me now, I do not believe the technology exists to reduce it to 750 tons by 1985 at this time.

Mr. Speaker: Order. Final supplementary, the Leader of the Opposition.

Mr. Smith: How can the minister say that, on the basis of information available to him, he does not believe the technology exists, when he has had this specific report from October 1980 by Brian Felske and Associates Limited, which states that the flash-furnace technology most certainly does exist and admits that Inco wants to try a different technology, the electric furnace, to see if it might be even better, but that under neither circumstance should the company be permitted to go beyond 1985 in continuing to pollute at the present or even the slightly improved level of which he is so proud? In either circumstance, the report says -- and I am coming to a close, Mr. Speaker -- that Inco could and should clean up by 1985 down to 750 tons or so. Why is this report still secret? Why does the minister continue to say they are doing all they can?

Hon. Mr. Norton: Mr. Speaker, if the report is secret, it has been up to this point secret for me as well. I have not seen it. But I do not believe --

Interjections.

Mr. Speaker: Order.

Hon. Mr. Norton: The one thing that the members ought to try to understand -- I will see if I can get a copy of that immediately and have a look at it -- is I think members have to make a distinction between the recommendation of a consultant and the development of the necessary technology. Can the members say with certainty before this House that they know of such technology that is already developed, in place, in operation and working effectively?

Interjections.

Hon. Mr. Norton: In which case, then, the members have to be careful in making those kinds of assumptions.

INTEREST RATES

Mr Cassidy: Mr. Speaker, I have a new question for the Treasurer with regard to the impact of high interest rates on the 200,000 people who will be renegotiating their mortgages in Ontario over the course of the next year. Given that those people will be facing an interest rate which will be almost double what they are paying on their homes now, and given the number of foreclosures and the number of people being forced to put their homes on the market because they can no longer afford to stay in them, does the Treasurer not agree that it is now time for the federal government to bring the interest rates in Canada down? What actions will Ontario take to put pressure on the federal government to give us a made-in-Canada interest rate policy that will spare the home owners facing renegotiated mortgages?

Hon. F. S. Miller: Mr. Speaker, do I agree that the government of Canada should take steps to bring the interest rates down? Yes, I do. In fact, just a week or so ago in Ottawa at a finance ministers' meeting, I made strong representations to the Minister of Finance for Canada to take measures to do so. I hope and trust he listened to the cumulative advice of all the ministers of finance that day.

Mr. Cassidy: Supplementary, Mr. Speaker: The Treasurer hardly seems moved to passion or concern by the fact that there are many families across the province right now who are losing their homes. This is not an academic question, but something that is a reality for many people in Ottawa, Toronto, Windsor and every corner of the province.

Would the Treasurer be prepared to institute in Ontario now a moratorium that would require that any mortgage coming up this fall for renewal be renegotiated for a period of at least six months, or maybe a year, at the present rate? Would the government be prepared to bring that measure in, to enlist on the side of getting a made-in-Canada interest rate policy the banks and all the financial institutions who are, right now, profiting from the high mortgage rates rather than contributing to bringing them down?

Hon. F. S. Miller: Mr. Speaker, I question whether any of us, except those who are lucky enough to have deposits on account, are profiting from high interest rates in our economy. They are affecting the economy in many areas, not just homes. That is why it is of vital interest to all of us to make sure the governments of Canada and the provinces take steps to bring down interest rates. They are higher than they need to be. There can be, to a degree, a made-in-Canada rate. I am afraid we may have a made-in-Canada rate higher than it should be, because of lack of confidence in the federal government.

Mr. Smith: By way of supplementary, Mr. Speaker, since the advice given by the Treasurer to the federal government consisted essentially of, "Do as I say and not as I have just done myself," in telling them not to raise taxes and not to increase the deficit -- all the things he himself did at record levels only a few months ago -- can the Treasurer tell us whether he is prepared to take some provincial responsibility in this regard and bring in some relief, as the Premier (Mr. Davis) promised in 1975 he was prepared to do when interest rates were comparatively high then, and as other provinces have done?

Is the Treasurer prepared to do something to keep the promises made about the Ontario economy and help those in small businesses, homes and farms who are affected by high interest rates, or will the Treasurer just pass the buck to Ottawa totally?

Hon. F. S. Miller: Mr. Speaker, rather than agree with the member's statement that I have asked people to do as I say and not as I do, may I suggest to him that, at the conference in Ottawa a week or so ago, the one point made by finance ministers from other provinces was that, of the 10 provinces in Canada, Ontario provides the best example of how to tackle the major problems of growth in the size of government, growth in the spending of government and therefore contributions to inflation.

Mr. Philip: Final supplementary, Mr. Speaker: Would the minister not agree that the Province of Ontario Savings Office, which was set up by the farmer government in 1921, falls under provincial jurisdiction, and that it now has savings of about $650 million? Why has this government not shown the same kind of leadership as the Alberta government in expanding that office, and in making loans available to ordinary people and businessmen who need them, through this body, which is under provincial jurisdiction?

Hon. F. S. Miller: Would I agree that it is under provincial jurisdiction? Of course, but it is strictly a deposit agency, not a lending agency. It has been that for some time, and I believe it should stay that way.

UNEMPLOYMENT

Mr. Cassidy: Mr. Speaker, I have a new question for the Treasurer, if I can recall his attention to the statement of the government on interest rates of about a year ago. It was said quite clearly that, even though interest rates then were at 11.8 per cent, high interest rates would reduce economic growth, would lower job creation and would raise the unemployment rate. Now that we have had in September the biggest increase in unemployment for years, an increase to almost 300,000 people unemployed in Ontario, would the Treasurer say what Ontario specifically is going to do in order to combat the unemployment, which arises in part because of the high interest rates? What does this province intend to do to get our workers back on the job?

3 p.m.

Hon. F .S. Miller: Mr. Speaker, I am not very happy about the figures in September, nor should any of us be, but in that month the number of people employed in Ontario also increased, something the member tends to forget. It went up by 2,000 people in September, even though the overall Canadian figures were at one of their worst levels. There were about 127,000 more people at work in Ontario at the end of September than there were a year ago. Ontario has been leading in the growth of jobs in this country.

Mr. Cassidy: Supplementary: Would the Treasurer explain why he changed his views so radically when he went to Ottawa and spoke at the finance ministers' conference a couple of weeks ago? Why is it that back in the spring the Treasurer was saying unequivocally that he thought interest rates in the country should be brought down, but in the fall the Treasurer went to Ottawa and said we should cut taxes on the rich, and we should cut government spending and therefore cut government services to people on modest incomes and people who were poor?

Why, in other words, did the Treasurer go to Ottawa and advocate for Canada a policy that is borrowed from Ronald Reagan in Washington and which involves continuation of the high interest rates that are wreaking such havoc on their economy and on ours?

Hon. F. S. Miller: I do not believe I did.

Mr. Cassidy: Supplementary: It is quite clear from the minister's statement that the minister has been entranced by some economic pundits who have been advising the Republican administration in the United States. This has reached the point where he now believes that if we soak the poor and spare the rich, if we continue the kinds of policies being followed there, which include monetary restriction and high interest rates, that is somehow going to bail us out in this country; and where he now believes that rather than bringing interests rates down now --

Mr. Speaker: Does the member have a question?

Mr. Cassidy: -- we should bring them down some time in the distant future when all these other things begin to take effect.

Mr. Speaker: Question.

Mr. Cassidy: Would the Treasurer explain why he has changed his stance since then and how we can get lower interest rates in Ontario if even the Treasurer of Ontario is not prepared to fight for them?

Hon. F. S. Miller: I do not know how to explain it to the member if I have not made him believe I am fighting for lower interest rates and doing so through sound --

Mr. Foulds: You have not done one single thing.

Mr. Speaker: Order.

Hon. F. S. Miller: The member will have his forum and his day and good luck.

Mr. Speaker, we suggested the federal government should carefully look at the growth of a number of the costs of its own direct spending. We in no way suggested that assistance programs to people in need, or in fact transfers to the provinces, should be cut.

Some people have said that was inconsistent; it was not. If one analyses the transfer payments and the growth of spending at the federal level, the transfer payments for health and postsecondary education have been among the lower percentages in growth. We pointed out they are letting their civil service grow unnecessarily quickly and not taking the tough measures we have done.

The interest rates in this country will drop only when Canadians and other investors have enough confidence in this country and in government at the federal level to leave their money in the country.

NIAGARA RIVER POLLUTION

Mr. Kerrio: Mr. Speaker, I have a question of the Minister of the Environment. Is the minister aware of the frightening report called The Ravaged River, released yesterday by the New York State Public Interest Research Group? Does he know the most dangerous threat to the Niagara River is the Hyde Park dump in the upper Niagara above the falls?

The cleanup settlement of that site was a subject of nine days of judicial hearings in Buffalo very recently. This Environment ministry did not provide financial, technical or any other kind of assistance to Pollution Probe. It did not question the settlement on the record or involve itself in any way at the hearings, other than to send Mr. Ray Stewart, who claimed it was a waste of time to attend those hearings.

Given that the proposed settlement will not stop dioxin, one of the most deadly chemicals known to man, from leaching into the river, and given that the estimated half pound of dioxin could be joined by some 2,000 pounds resting in that dump site, why did the ministry not oppose the settlement and actively participate in those hearings, as I asked it to do on many occasions, to protect the integrity of the Niagara River?

Hon. Mr. Norton: Mr. Speaker, to answer the first part of the question: I believe the member for Niagara Falls described it as a frightening report that was released within the last couple of days. I believe the member said yesterday, but I am not sure of the precise timing of that. I am aware of it through the media. We have been trying to get a copy of that report ever since we heard about it. We have not yet been successful.

We have been in touch with the regulatory agencies in the United States, who also claim they have not received a copy of that report. When I get a copy, I will be in a better position to comment upon the accuracy of the report and whether any new information is contained in it or whether it is simply a compilation of existing public information. I do not know that.

As to the allegations that there have been lies and a coverup on the part of American officials, all I can say at this time is that I have no indication that there has been any such withholding of information.

I look forward to getting a copy of the report. I would have thought the agency, if it were as deeply concerned as I am sure it is, would have taken the trouble of trying to ensure copies were available for those of us on this side of the river, as well as those on the other side, who have some responsibility in terms of ensuring the water quality in the Niagara River is maintained at a high level.

With regard to the Hyde Park site, we have had staff present throughout those hearings. The decision was taken not to intervene because frankly, on a technical basis, we felt we did not have any substantial grounds for making a formal intervention. However, as I say, we have been monitoring it.

It is true we did not provide funding to any intervention group, but we have offered technical assistance and have done so, I understand from my staff, on more than one occasion. To date, to the best of my knowledge, the offer of technical assistance has not been taken up by the participating agencies who are intervening. That offer still stands, and we have staff available to assist them if they wish to take advantage of the expertise of our staff.

Mr. Kerrio: I want to raise a question with the minister as it relates to the indecision to attend those hearings as it related to the settlement.

I wonder if the minister is aware of the fact that when the settlement was made, the minister's director -- that was Grant Mills -- did not do an independent assessment of the settlement. Instead, he called John Spagnoli of the New York Department of Environmental Conservation, who was one of the co-authors of the settlement with Hooker and the U.S. Environmental Protection Agency and who, of course, told Mills there was nothing wrong with the settlement. In essence, the ministry was an accomplice to an activity that could have severe repercussions for millions of people.

Furthermore, will the minister not agree that, based on his lack of opposition to the Hyde Park dump settlement and the SCA pipeline, his ministry has been almost criminally negligent in its duties in providing for the protection of the people of Ontario and the protection of that river?

Hon. Mr. Norton: If the honourable member would like to reflect upon that last statement for a moment, I think he at least would be willing to retract the allegation or suggestion that the conduct of my ministry has been almost criminally negligent. That is just nonsense.

We have acted throughout this whole difficult situation very responsibly. In fact, in terms of the staff recommendations that the member referred to, I am certain there was communication seeking information and details on the proposed settlement between our staff and the staff of the Department of Environmental Conservation in New York state. I can assure the member that the opinions that came to me were the opinions of my staff as a result of an evaluation of that proposal.

Mr. Kerrio: They are the culprits.

Hon. Mr. Norton: No, they are not culprits at all. One obviously seeks information where the information is available. I think my staff has acted very responsibly. If the member has any hard information to the contrary, then he should share it with me. Until I have seen it, I maintain my position that the staff have acted responsibly, and I will continue to do so.

3:10 p.m.

I might also add, the member may or may not be aware of the fact that in the near future -- the precise date has not yet been established, although the agenda is being prepared -- there will be a meeting with the Premier (Mr. Davis), Governor Carey, myself and Commissioner Robert Flacke from New York state dealing with the situation in the Niagara River and the Niagara Frontier. It will also deal with some of our joint efforts in acid rain. I can assure the member that on some of those things we have repeatedly gone after them about, for example, the sewage treatment plant in Niagara Falls, New York, which has not worked for the last three years, we will press them once again.

I cannot confirm that information, because I have not been given a copy of the report and I cannot get one yet, but I hope to have one before the end of the day. It is one thing to take that information and sensationalize it -- I am not trying to minimize the seriousness of the situation if any of the allegations in that report are correct -- but I have no grounds on which to assume that there has been any information withheld from us or that anyone on our side has acted irresponsibly.

Mr. Charlton: Mr. Speaker, I would like to pick up on a comment the minister made in his initial answer to the member for Niagara Falls. He said, "to those of us who have some responsibility for protecting." It seems to me, and it seems fairly clear to most people in the province, that responsibility means action.

Does the minister think this latest sensational report should not be the kind of thing that causes paranoia? Is it not his opinion that the information that has been available all along in the case of Hyde Park, about the 80,000 tons of extremely toxic materials in that dump, presented a very serious danger to the Niagara River and to Canada, to Ontario and to Lake Ontario, and that he has a responsibility on behalf of the people of the province to intervene in that process, to protect the interests of Ontario?

Hon. Mr. Norton: Mr. Speaker, I agree that responsibility means action, and this government has taken action in many instances. I understand that every polluter on the Ontario side is now meeting standards under control orders that have given them specific targets. We have made very substantial progress and have discharged our responsibility within the province.

As far as the Hyde Park site is concerned, one has to be very careful in terms of jumping to the conclusion that the proposed alternative of simply moving the waste from that site is the best answer. I am not in the position to make that judgement as an expert; however, I think one must be cautioned by the risks involved in trying to move it. It may be much more hazardous than finding an appropriate way to contain it on that site, and I understand that is what these hearings are trying to come to grips with.

CHRYSLER LAYOFFS

Mr. Cooke: Mr. Speaker, I have a question for the Minister of Labour. I am sure the minister is aware of the 1,500 layoffs that Chrysler Corporation announced last Thursday, October 8, at 3 p.m. I would like to know the minister's opinion of a corporation that lays off 1,500 workers at three o'clock and gives them less than 24 hours' notice about a mass layoff to that extent. Does the minister condone that kind of action on the part of a corporation that received $150 million in loan guarantees from the federal government and a $10-million grant from this government to build a research and development centre in Windsor?

Hon. Mr. Elgie: Mr. Speaker, first of all, to clarify the facts, this government did not give a grant of $10 million and it does not take effect until, I believe, 1982 or 1983 -- the Minister of Industry and Tourism (Mr. Grossman) can correct me -- by which time it should be established whether the automotive industry can get out of the difficult time it is in. That is not a surprise to the member for Windsor-Riverside. He knows very well that industry and that particular company are under a great deal of stress at the present time.

Having said that, let us understand that nobody wants those workers to be laid off, certainly not I. The member knows very well that I have worked very hard in the area of layoffs, protection and severance pay, but those particular groups of workers have received temporary layoff notice within the provisions of the Employment Standards Act; so the action taken by the company was perfectly proper, within the legal framework.

Mr. Cooke: Some Minister of Labour we have! We might as well call him the sub-Minister of Industry and Tourism, because all he defends are the corporations in this province.

Is the minister aware that, of the 1,500 who were laid off, 700 individuals are one to two weeks short of being eligible to go back on the unemployment insurance rolls and, because of that short period of time that they need to re-qualify, they are going to have to go directly back on the welfare rolls in the city of Windsor? In fact, because of the silly welfare rules we have in this province -- thanks to the minister's colleague sitting to his left -- they won't even qualify for welfare in October since they have had an income in October.

Further, is the minister prepared to amend the Employment Standards Act so that adequate notice is given for mass layoffs like this that occur throughout the province of Ontario?

Hon. Mr. Elgie: First, with regard to the initial ad hoc remark, let there be no doubt that this minister has always interested himself very efficiently and I hope has endeavoured effectively to represent the legitimate interests of the labour movement and labour people in this province. There is no doubt about that; so the honourable member can stop that little bit of ad hockery.

Second, as the member knows quite well, the federal government has designated certain areas in this country as areas of special need because of their higher unemployment, and Windsor is such a region. It is my understanding that the federal government is now trying to determine exactly how many of those employees are short by the two weeks to determine whether they would be eligible for assistance under the special program for that designated area.

Mr. Wrye: Mr. Speaker, given the fact that this is not the first instance of this company giving such short notice for layoffs of this magnitude, will the minister indicate to the company and to companies in Ontario in general, and amend the Labour Standards Act if such amendments are needed, that in layoffs of this magnitude -- of more than 1,200 and many as high as 1,500 workers -- notification in these cases should be much longer than an inadequate 26 hours?

Hon. Mr. Elgie: Mr. Speaker, we had extensive debate in this Legislature some time ago about the issue of layoff notices. It was our opinion as a government that the layoff notices provided in our legislation are comparable to or better than any other province or any other state. Let us not talk about catching up with other places. We already are right out in front.

Let us also understand that the workers who have been laid off are on temporary layoff. If in the future that becomes a permanent layoff or an indefinite layoff, then the honourable member knows full well they will become eligible for termination pay.

MINISTRY-TEACHERS' CONSULTATIONS

Mr. Sweeney: Mr. Speaker, a question to the Premier: My question deals with the resolution passed unanimously by the Ontario Teachers' Federation on August 27. It refers to the deteriorating consultative mechanism between the Minister of Education (Miss Stephenson) and themselves. Did the Premier know about this deterioration? What has he done about it since that resolution was passed to him, and what direction has he given to the minister to repair this breach?

Hon. Mr. Davis: Mr. Speaker, having spent a limited amount of time in that ministry myself --

Mr. Smith: Time enough to do harm.

Mr. Nixon: You ruined the system.

Hon. Mr. Davis: I contributed more to the system than almost anybody over there.

Mr. Smith: What about the Hall-Dennis report?.

3:20 p.m.

Hon. Mr. Davis: How many has the member contributed to the system?

Interjections.

Hon. Mr. Davis: I will boast about having five kids any time.

Mr. Speaker: Order. Please address your remarks to the question, Premier.

Hon. Mr. Davis: Mr. Speaker, I am aware of some concern expressed by some members of the federation. I have to say --

Mr. Sweeney: A unanimous resolution.

Hon. Mr. Davis: The honourable member has unanimous positions from his caucus that I know five minutes later are less than unanimous. Who is trying to kid who? Is that correct grammatically? The member is a former superintendent. I remember when he used to extol the virtues of the ministry during the Hall- Dennis period. I remember it so vividly. I may remind him of that during a certain convention.

Interjections.

Hon. Mr. Davis: Oh, I have a long memory, I would say to the honourable member.

I can only say that in my experience the present Minister of Education has a very excellent relationship with the teaching profession, the trustees, the taxpayers and, most important, the students. She discharges her responsibilities with great sensitivity, great talent and great judgement; she is an excellent Minister of Education, and I am sure that is going to continue for many years yet to come.

Mr. Sweeney: Is the Premier not aware of the fact that in September 1979 the teachers of this province censured the minister in a like manner?

Second, is the Premier not aware of the fact that the minister herself said it would be immoral for her to comment on the proposals in the secondary education review program commission report until there had been consultation?

Is the Premier further not aware of the fact that in February 1981, when the continuing education third report came out, no provision was made for consultation with the public, and there was a great deal of reaction to that?

Surely the Premier, as the first minister, should be conscious of the fact that some change has to be made here.

Hon. Mr. Davis: The Minister of Education just leaned across and whispered to me that most of what the honourable member has said was less than factually correct. I could use the rural term that she used, but I shall not. I do not want to offend the honourable member.

Mr. Sweeney: The Premier is on weak ground.

Hon. Mr. Davis: I am not on weak ground at all. As I say, I can just quote back to the member his points of view and positions on educational matters over the last 15 years, which are going to embarrass him at that convention like nothing else.

Mr. Sweeney: We remember when you were the minister.

Hon. Mr. Davis: I remember when the member was a superintendent.

Hon. Miss Stephenson: Mr. Speaker, on a point of personal privilege: I should like the honourable member to know, at least to state publicly and to understand, that what he has been mouthing is a bunch of pious, unbased platitudes that have been developed in other areas. I respect his integrity, and I would anticipate that he would not repeat such untruths within this House.

If you are going to ask me to withdraw that word, Mr. Speaker, then I shall do so if you insist; but they were untruths, which were reported in a newspaper. The amount of consultation with the Ontario Teachers' Federation amounts to several thousand hours per year. There are mechanisms for consultation on every single major report that is developed, there are mechanisms for consultation on a day-to-day basis at the staff level and there are mechanisms for consultation on a regular basis with the minister.

Simply to mouth the kinds of things the member was saying is less than charitable on his part.

Mr. Sweeney: Mr. Speaker, I have to respond to that point.

Mr. Speaker: There is nothing to respond to, really.

Mr. Sweeney: The minister raised a point of privilege. I have an opportunity to respond, surely, Mr. Speaker.

Mr. Speaker: A short response, then, please.

An hon. member: The untruths only.

Mr. Sweeney: Only the untruths?

An hon. member: Just the untruths.

Mr. Sweeney: Okay. In September 1979, the board of governors of the Ontario Teachers' Federation voted to censure the Minister of Education. Some called for her resignation.

The then president of OTF reported, "I really regret that she has done this on the public platform after she accepted and then rejected our invitation to speak to us."

David Hughes, president of the Ontario Secondary School Teachers' Federation, said on August 28: "I have become very tired of dealing with the minister when the only way we can get her attention is the OTF equivalent of hitting her over the head with a two by four."

An hon. member: Even then it does not hurt.

Mr. Sweeney: George Meek, president of OTF, is "sick and tired of being surprised by the minister's actions."

Margaret Wilson, the past president of OSSTF, describes the minister as "the captain who has not abandoned the ship but indeed she has never come on board."

Those are not my words; they are theirs. They are the words of the OTF. Is it yes or no?

Mr. Speaker: Order. Nobody's privileges have been abused.

NURSES' ARBITRATION

Mr. McClellan: Mr. Speaker, I have a question of the Minister of Health. In view of the fact that nurses in Ontario are denied free collective bargaining rights by the Hospital Labour Disputes Arbitration Act, which forbids them the right to strike, can the minister explain to us why he seems to have turned the arbitration procedures under that act into a pure farce by permitting the board of arbitration to stall, stall and stall since March 17, 1981, without bringing in a report, while nurses in Ontario are being paid at 1979 wage rates?

Hon. Mr. Timbrell: Mr. Speaker, if the member will read the first part of the act, he will see that the Hospital Labour Disputes Arbitration Act is not a piece of legislation for which I am responsible. It comes under the Minister of Labour (Mr. Elgie). Perhaps he would like to redirect his question.

Mr. McClellan: I will redirect it to the Minister of Labour, since the Minister of Health wants to take a bye on it.

Hon. Mr. Elgie: Mr. Speaker, I trust that the member for Bellwoods knows there were some complications with that arbitration process. He knows there were well over 100 briefs. They were lengthy briefs. He knows that during the course of it all both of the sides' people had to retire and new people had to be obtained; so it was indeed a very arduous and lengthy process, for which I am sure everyone expresses a great deal of regret.

As the honourable member knows, many hospitals have indeed granted some interim wage increases to help overcome this very difficult time. However, I am advised that the arbitration award will be brought down before the end of this month.

Mr. McClellan: I really would like an explanation from the government as to why they think they can have it both ways, on the one hand denying workers the right to strike and, on the other hand, turning the arbitration procedures under the legislation into a piece of nonsense.

May I ask the minister specifically why he did not invoke section 12 of the act -- at least the section 12 of the act that I possess -- which states, "In the case of an unreasonable delay the minister may, after consulting the parties and the board, issue whatever orders he considers necessary in the circumstances to ensure that a decision will be rendered without delay"? Surely the minister will agree that seven months is intolerable.

Hon. Mr. Elgie: I hope the member will agree that this is a very unusual situation. I tried to point out some of the unusual circumstances. We have been in touch with the arbitrator, the chairman and the two sides, and they have had difficulty in getting together themselves to review their opinions on it. But I am now advised that this report will be forthcoming. I assure the member that I have endeavoured to keep in touch with the process, I have tried to appreciate some of the reasons for the delay and I ask him to understand that this is a very unusual event.

Mr. Ruston: Supplementary, Mr. Speaker: With this long delay in the nurses' arbitration and since his money is going to be advanced to the hospitals eventually, is there not any way the minister could tell the hospitals that they can give the nurses a partial increase for the time being until such time as an arbitration board hearing is finished?

Hon. Mr. Elgie: Mr. Speaker, as I mentioned, many hospitals have, on their own, granted certain interim increases. I am sure, if the honourable member wishes to speak to his own hospital board to discuss this, that is an avenue open to him. Otherwise, he might question the Minister of Health, who is, as he knows, directly responsible for those events.

3:30 p.m.

ELECTION SPENDING

Mr. Bradley: Mr. Speaker, I have a question for the Minister of Intergovernmental Affairs concerning the Election Finances Reform Act.

In view of the fact that the Progressive Conservative Party of Ontario spent, I believe, more than twice as much as the two opposition parties combined on a provincial basis and consistently spends more money than the opposition candidates on a riding-by-riding basis, will the minister give assurance to this House that he will introduce legislation designed further to limit campaign expenditures so that the democratic process in this province cannot be further subverted by money?

Hon. Mr. Wells: Mr. Speaker, it is my understanding that the present Election Finances Reform Act does provide for limits on expenditures in those important areas where limits are necessary. If and when a bill comes before this House, there will be plenty of time to consider all the various aspects of campaign financing.

Mr. Bradley: Will the minister not agree that in a political jurisdiction the governing party already enjoys far too many advantages; for instance, the ability to spend government money for advertising, to make appointments and to give out money on a city-by-city basis? Does the minister not feel that, to overcome those advantages and make the system fairer, it would be wise to introduce the kind of legislation that would limit all aspects of campaign expenditures so that one minister cannot spend $90,000 after raising more than $100,000, which really makes the system unfair in this province?

Hon. Mr. Wells: Sitting over there, the member may feel that way. I think he would agree we have to campaign under the pressure of taking responsibility for all the actions, many times, of a number of governments. I certainly would not accept the member's statement that we operate under an advantage; we certainly do not in a campaign.

Mr. Martel: A supplementary question, Mr. Speaker: Will the minister tell us what other limitations there are that they are bound by, aside from the limitation on publicity, which I believe is $1.3 million? How is it that 65 of the members over there spent at least $40,000? What is happening to the democratic process when they have to buy their way back to power?

Hon. Mr. Wells: Mr. Speaker, I know my friend well enough to know that he really does not mean that anybody is buying his way back to power. The fact remains that we have a very fine act in this province. No individual in this province can contribute more than $500 and basically no corporation can give more than about $8,000 in total. There are a couple of reasons why this party is able to raise the kind of money it does.

Mr. Foulds: It's called patronage.

Hon. Mr. Wells: Will you be quiet and listen?

Interjections.

Mr. Speaker: Order. Will you give the minister an opportunity to reply?

Hon. Mr. Wells: The reason this party is able to raise the money it can from all kinds of people -- and believe me, I even have labour union people who donate to us -- is the quality of the candidates we have and the policies of this government.

Interjections.

Mr. Speaker: Order. Order. New question, the member for York South.

ASSISTANCE TO FARMERS

Mr. MacDonald: Mr. Speaker, the Minister of Agriculture and Food no doubt is aware that Ontario and Prince Edward Island are the only provinces that do not provide any subsidies for the crushing interest rate burden farmers are suffering today, and PEI has a grant program to compensate for the lack of actual subsidization. In view of the Treasurer's (Mr. F. S. Miller) promises after the protest meeting last June that some $100 million was going to be made available for agriculture -- and he was considering a range of programs; six were mentioned in one news story -- is the government considering that at least one of them might be belatedly a pickup on the subsidy for high interest rates for farmers? The government had it in its program before the election but washed it out last March 31.

Hon. Mr. Henderson: Mr. Speaker, there was no subsidy program in our election promises. If the honourable member would recall, I went before the Ontario Federation of Agriculture. He and the critic for the Liberals went on radio with me. It was definite that our party was not promising any subsidy whatsoever; that was quite clear.

Mr. MacDonald: In the government's program was at least $25 million to subsidize high interest rates to the farmers. They washed it out on March 31 when they had only spent $5 million. Has the minister, despite his bulk, not got enough weight in the cabinet to be able to get the cabinet to spend money that has already been appropriated, and therefore do something like other provinces by way of assistance to the farm community?

Hon. Mr. Henderson: This honourable member has been in this House quite a number of years. If he could let his mind reach back halfway to the time he was first elected here, to 1969, he no doubt sat in his place -- I know some of his colleagues were here that day -- when the then Minister of Agriculture and Food made a major announcement. He announced that an agreement had been reached. The then Minister of Agriculture for the government of Canada had agreed that the federal government would be the lending institution for all agricultural projects in Canada.

ONTARIO ENERGY INVESTMENT

Mr. Foulds: Mr. Speaker, on a point of order: Would you ensure that the privileges of this House are kept up and rule 26(c) is enforced with regard to the Premier's (Mr. Davis) statement over the acquisition of shares in the oil company referred to this afternoon? Would you ensure that compendium is tabled in this House before the press conference at four o'clock, particularly in view of the massive reversal of government policy entailed since they sold their 10 per cent holding in Syncrude some time ago?

Mr. Speaker: I shall indeed be pleased to pass that message on to the Premier.

ACID RAIN

Mr. Laughren: Mr. Speaker, I have a point of privilege which I hope will correct the record. The Minister of the Environment (Mr. Norton), in responding to the questions on emissions from Inco at Sudbury, replied that he did not know if the technology was available to lower the limits. I would like to read into the record a letter from the senior vice-president of Inco to the Ministry of the Environment, if I might, in order to set the record straight. It is to Mr. R. E. Moore, regional director of the northeastern region, Ministry of the Environment, dated September 26, 1975.

"Dear Mr. Moore:

"On May 23, 1975, we made a presentation to you regarding a proposed sulphur emission abatement program at Sudbury, written copies of which submissions were forwarded to you with my letter of May 27. Our submission pointed out that the proposed project was not without technical, financial and economic risks. It also indicated that in order to achieve our proposed schedule we had already started engineering.

"Within the past few weeks, our engineering work, with the necessary corollary cost estimation, has revealed an increase in capital costs which indicates that our May estimate of $200 million must be increased to at least $300 million and considerably more if potentially necessary additions of ancillary equipment prove to be necessary.

"This situation obviously requires a complete reassessment of our position, since the economic and commercial feasibility of the proposed project has fundamentally changed. A program which is not economically and commercially feasible is in fact not technologically feasible.

3:40 p.m.

"Accordingly, and regretfully, we must ask that you defer any action on our proposal of last May until such time as we are able to provide you with a complete re-evaluation. I will be in touch with you in that regard just as promptly as possible, and also in regard to such alternative courses of action as there may be. It must be appreciated, as all the work we have done has demonstrated and each submission we have made has stressed, that there is no way the December 31, 1978, emission level could be attained other than by drastic cutback in our Sudbury operations.

"Yours sincerely, John McCreedy."

The point being, at the end of the letter, that that letter was based on this submission, an Ontario Inco study, which indicates that for $300 million the emission levels, which were then in excess of 3,000 tons a day, could he lowered to 1,500 tons a day by December 1979. It should come as no surprise to the minister, or the officials in his ministry, that the federal task force would now be suggesting the technology is there to get down to 750 tons per day.

There is no question whatsoever that the technology is available. What is at question, however, is whether the Minister of the Environment is being informed by officials within his ministry as to just what is possible, in terms of reducing the emissions from the superstack at Sudbury. It is important that the record be corrected in that regard.

HANSARD INTERJECTIONS

Mr. Mancini: On a point of privilege, Mr. Speaker: You may be aware that over the past year and a half I have made appearances before the members' services committee to discuss the matter of Hansard and the Hansard recording of the proceedings of the Legislature. I have raised, at those meetings, the view that all comments that are made in the Legislature, which are able to be taken down accurately by the interjectionists who sit on the floor of the House, should be included as part of the Hansard record.

It has been brought to the attention of the members' services committee by the director of Hansard that he has, in the past, issued instructions to his editors that they delete as many interjections as possible, thereby not making the proceedings of the House entirely accurate.

You must surely be aware, having sat in this House for a good number of years, that an interjection could be just as important as a question, or just as important as a lengthy speech, depending on what the interjection is. I want to say to you that I do not believe it is right or proper for the proceedings of this House to be edited by a civil servant after he has, by himself, decided that the Hansard should look like a magazine instead of looking as it should, with all the interjections included.

I wish to say, having tried to raise this matter in the members' services committee and having tried to get it cleared up there, and having been unable to do so, that I appeal to you to protect me, as a back-bench member in this House, and to protect all members of this House.

How are we able to give this responsibility to a civil servant, knowing full well that the Premier (Mr. Davis) himself, or one of the cabinet ministers, or the leader of a particular party, may make an interjection that he feels should not be recorded after it has been duly taken down by the interjectionist? Why should we leave this vital responsibility up to a civil servant?

My final question is, why do we have the interjectionists on the floor at all, if it is the policy of Hansard and its director practically to eliminate the interjections? I appeal to you to instruct the Hansard director to ensure that the interjections, which are able to be taken down by the people here and which are able to be recorded, appear in the Hansard reports.

Mr. Speaker: Thank you very much. I must point out to you and to all members that I am guided by standing orders. Under standing orders, all interjections are out of order.

Mr. Mancini: Mr. Speaker, again on that point of privilege, why then in the past, for all these many years, have interjections been recorded? If anyone has the time or wishes to do so, he can certainly go through the records of Hansard, as far back as I have looked anyway, which covers many years. I have gone through some of the Hansards to see just how much this has changed in the past 18 months because of the new directions by the director of Hansard.

I say to you, Mr. Speaker, why have they been there all these years and why do some interjections still appear to be recorded in Hansard if they are entirely out of order? My point is that some interjections are recorded, others are not. This is entirely unfair because we leave this matter in the hands of a civil servant. We leave this matter in the hands of a bureaucrat to decide how Hansard shall look. In my view this is completely not in accordance with what is going on in the House, since many of the interjections we heard today had an influence on what took place today.

Mr. Speaker: Order, please. Order. I just want to say that I will be pleased to take a look at it. I just wanted to make the point that under our standing orders, interjections are out of order and that is what we are guided by.

Mr. Martel: Might I ask the Speaker what that has to do with recording what is going on in the House? There are occasions when things are definitely out of order and they are ruled out of order by the Speaker, yet they appear. What my friend is saying is that what is being stated in this House should appear in Hansard.

As the Speaker knows, it was about a year ago when I objected strenuously to the decision of the government to take out of the Legislature what we called the garbage track. At times there are statements made that are pretty cutting. It seems to me that garbage track would serve a purpose in preventing some of those comments from being made, because people who do not want them in print would not say them. I think if anything was going to be done, it would be to make sure that the garbage track was brought back and that everything stated in this Legislature should be in Hansard, because that is what this House is all about. That is where it is recorded.

Mr. MacDonald: Mr. Speaker, I do not want to be repetitive here but I think there are two points to be made. One, I think it is time we got into the real world. If our standing orders say that every interjection is out of order, it is time we changed the standing orders because that is nonsense. Every interjection is not out of order. If the interjection happens to be an interjection to the Premier, and if the interjections to his speeches were not put in, his speeches would be incoherent because half of his speeches are replies to the interjections all the time.

The honourable member's point is very valid. Who makes the choices as to what interjection is put in? I suggest we change the standing orders, join the real world and recognize that interjections, that repartee, are part of the whole exchange in public life in this day, and that we get back to putting the so-called garbage track on to the record.

Mr. Speaker: As I assured all members earlier, I will take a look at it and we will see what can be done, yes.

REPORT

STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE

Mr. Treleaven from the standing committee on administration of justice presented the following report and moved its adoption:

Your committee begs to report the following bill with certain amendments:

Bill 68, An Act for the establishment and conduct of a Project in the Municipality of Metropolitan Toronto to improve methods of processing Complaints by members of the Public against Police Officers on the Metropolitan Police Force.

Report adopted.

Ordered for committee of the whole House.

3:50 p.m.

MOTIONS

PRIVATE MEMBERS' PUBLIC BUSINESS

Hon. Mr. Wells moved that, notwithstanding standing order 63(d), Mr. McClellan and Ms. Bryden exchange positions in the order of precedence for private members' public business.

Motion agreed to.

REVISION OF BILLS

Hon. Mr. Wells moved that legislative counsel be instructed to revise and reprint the bills standing on the Order Paper, making such changes as are necessary to have reference to the Revised Statutes of Ontario 1980, and that the bills as revised and reprinted be considered in place of the bills as now printed.

Motion agreed to.

SELECT COMMITTEE ON THE OMBUDSMAN

Hon. Mr. Wells moved that the select committee on the Ombudsman, in addition to its terms of reference dated July 2, 1981, be authorized to complete the work of its predecessor committee on the resolution passed by the House on May 29, 1980, namely:

"That this assembly request the select committee on the Ombudsman to consult with the United Nations Commission on Human Rights, Amnesty International and the International Commission of Jurists and others, if advisable, with a view to reporting to this assembly on ways in which this assembly may act to make its voice heard against political killings, imprisonment, terror and torture."

Motion agreed to.

ESTIMATES

Hon. Mr. Wells moved that the estimates of the various ministries and offices be deemed to have been referred to the committees of the House as outlined in his statement of June 23, 1981.

Motion agreed to.

INTRODUCTION OF BILLS

MILK AMENDMENT ACT

Hon. Mr. Henderson moved, seconded by Hon. Mr. Bernier, first reading of Bill 136, An Act to amend the Milk Act.

Motion agreed to.

Hon. Mr. Henderson: Mr. Speaker, the Milk Act requires the Ontario Milk Marketing Board to distribute to the producers moneys received from the sale of milk. The purpose of the bill is to amend the Milk Act to permit the Ontario Milk Marketing Board to distribute such moneys on the basis of the amount, content and grade of the milk supplied by the producer; the amount and kind of quota held by the producer, and the sales to the marketing board of the various classes of milk.

ONTARIO PENSIONERS PROPERTY TAX ASSISTANCE AMENDMENT ACT

Hon. Mr. Ashe moved, seconded by Hon. Mr. Leluk, first reading of Bill 137, An Act to amend the Ontario Pensioners Property Tax Assistance Act.

Motion agreed to.

Hon. Mr. Ashe: Mr. Speaker, I indicated in an earlier statement the contents of this bill and of the bill I would now like to introduce.

INCOME TAX AMENDMENT ACT

Hon. Mr. Ashe moved, seconded by Hon. Mr. Leluk, first reading of Bill 138, An Act to amend the Income Tax Act.

Motion agreed to.

SOCIETY OF MANAGEMENT ACCOUNTANTS OF ONTARIO ACT

Mr. Williams moved, seconded by Mr. Kennedy, first reading of Bill Pr 17, An Act respecting the Society of Management Accountants of Ontario.

Motion agreed to.

LATVIAN CANADIAN CULTURAL CENTRE ACT

Mr. Williams moved, seconded by Mr. Kennedy, first reading of Bill Pr30, An Act respecting the Latvian Canadian Cultural Centre.

Motion agreed to.

CHICOPEE SKI CLUB ACT

Mr. Sweeney moved, seconded by Mr. Riddell, first reading of Bill Pr20, An Act respecting the Chicopee Ski Club.

Motion agreed to.

CITY OF KITCHENER ACT

Mr. Breithaupt moved, seconded by Mr. Sweeney, first reading of Bill Pr16, An Act respecting the City of Kitchener.

Motion agreed to.

CONSUMER PROTECTION AMENDMENT ACT

Mr. Wrye moved, seconded by Mr. Van Horne, first reading of Bill 149, An Act to amend the Consumer Protection Act.

Motion agreed to.

Mr. Wrye: Mr. Speaker, the purpose of this bill is to clarify the fact that the lender is responsible for delivering to the borrower at his last known address a clear, written statement showing the current status of his account.

4 p.m.

CITY OF LONDON ACT

Mr. Van Horne moved, seconded by Mr. Mancini, first reading of Pr8, An Act respecting the City of London.

Motion agreed to.

CANDORE EXPLORATIONS LIMITED ACT

Ms. Fish moved, seconded by Mr. Piché, first reading of Pr27, An Act to revive Candore Explorations Limited.

Motion agreed to.

PLANNING AMENDMENT ACT

Mr. Swart moved, seconded by Mr. Charlton, first reading of Bill 140, An Act to amend the Planning Act.

Motion agreed to.

Mr. Swart: Mr. Speaker, the purpose of this bill is to give a greater degree of permanency to official plans and to establish the principle in the Planning Act that the minister shall not refer official plans or parts thereof to the Ontario Municipal Board for a hearing when the same subject matter has been dealt with by the OMB within a five-year period preceding the request. Provision is made for the minister to waive the five-year limit if the matter is essential and urgent.

KLEVEN BROTHERS LIMITED ACT

Mr. Piché moved, seconded by Mr. Treleaven, first reading of Pr13, An Act respecting Kleven Brothers Limited.

Motion agreed to.

MOTION TO SUSPEND NORMAL BUSINESS

Mr. Smith: Mr. Speaker, prior to the orders of the day, I move that the ordinary business of the House be set aside --

Mr. Speaker: Order.

Mr. Martel: I do not want to be too technical, Mr. Speaker, but I know what my friend is about to attempt to do. Since we placed our motion last Friday, I believe, on the question of mortgages, and it was therefore on the Order Paper first, I ask Mr. Speaker to recognize my leader, because that is the way the business runs in this House.

Mr. Nixon: On a point of order, Mr. Speaker: While the remnants of the NDP are applauding that comment, I bring to your attention the fact that the deadline for the introduction of those notices to you is 12 noon on the day of the debate. You got the notice from the official opposition well before the deadline, and I certainly call on you, sir, to do your duty and recognize the leader of Her Majesty's loyal opposition.

Mr. Speaker: Thank you very much. However, I must in all fairness accept these in the order of priority. In actual fact, Mr. Cassidy had filed his motion last Friday afternoon. I was here and I received a copy of it -- late in the afternoon, I might add. In all fairness, I think there is no option -- in fact, I know there is no option -- but to accept Mr. Cassidy's motion.

An hon. member: Well, then, you ought to write new rules. What are you basing the ruling on?

Mr. Speaker: Order. Order. I thought I had made it abundantly clear that I was basing it on priority. Mr. Cassidy had his in first.

Interjections.

Ms. Copps: On a point of order, Mr. Speaker: Can you table with this House the standing order under which authority you are acting?

Mr. Smith: I will solve it for you, Mr. Speaker. We will abide by your ruling, of course. What I would like to say --

Interjections.

Mr. Smith: Frankly, there is no standing order under which the Speaker is acting, and the member knows that. But the --

Mr. Martel: It is a precedent.

Mr. Smith: No, there is no precedent, either, on that. But as a general --

Interjections.

Mr. Smith: Let us not be silly. The only precedent, as the member for York South (Mr. MacDonald) knows, is that the official opposition is normally recognized first. But, as a matter of courtesy, it is perfectly understandable that the Speaker may wish to rule otherwise.

I might just explain, however, that this is not a very important question, frankly, and it is not a question for us of who has the privilege of putting the thing forward. It is simply that the motion suggested by the NDP, although we can support it fully, does not include some groups that I know they would wish to have discussed during the course of this debate. We merely wish to broaden the motion that the NDP presented to include small businesses and farmers.

Mr. MacDonald: It is out of order.

Mr. Smith: That is fine, but the problem is that one cannot amend a motion like that, as the member for York South is aware. And, frankly, it is our wish to be able to discuss more than just the impact on home owners, however severe that might be. But it is certainly up to the Speaker to rule as he wishes, and we have no grave objection to it. We might just make some comments about those other groups when we have an opportunity to speak.

4:10 p.m.

Mr. Cassidy: Mr. Speaker, I want to comment on the five-minute time available to talk about why we should have this motion now and why we should suspend the regular business of the House in order to talk about the impact of high interest rates on home owners.

As the Leader of the Opposition says and as we are very much aware, because we intend to raise this issue again and again this fall, the interest rates are driving thousands of people across Ontario out of their homes through foreclosure or by forcing them to sell their homes. They are also having a punishing impact on small businessmen, farmers and every other sector of our economy.

We intend to raise that because all through the summer, while this Legislature has been adjourned, people have talked to me of nothing else but the impact of the interest rates. At 16 per cent, the government itself admitted back in June 1980 that 20,000 home owners would face hardship in renewing their mortgages. Now we have mortgage interest rates above 20 per cent, 200,000 people who face having their mortgages renewed in the course of the coming year and unprecedented high interest rates, which mean the price of housing for those people is going to be far higher than the 30 per cent of income which it was traditionally felt they would be able to afford.

Up until now, the situation was that people in the assisted home ownership program houses were losing their homes because they could not afford to stay in them. Now it is extended to all in the market who are on modest incomes and who cannot face just about a doubling of the cost of their mortgages when they come up to have those mortgages renewed.

Not only is the effect now being felt in sectors of the housing market for home owners but it is also being passed on to people who are tenants, because the landlords are renegotiating mortgages and have to pass those costs through, as they are entitled to do under rent review.

The effects of the high interest rates are now hitting home owners who are drawing on income that could be used for buying cars, for buying durables, for buying goods in the market to create jobs in Ontario. They are sucking that money out of the market and, as a consequence, they are helping to contribute to the high unemployment we are facing in our province today.

We believe this matter has to be discussed now in the Legislature as a matter of emergency because, if we do not take action in Ontario now to protect people who are home owners from losing their homes, we are going to have a situation that will get more and more critical, not just in the coming year but starting right now. It is an emergency that has built up over the course of the summer.

In addition to that, we feel the government of Ontario has to take action and treat this as a matter of urgency and emergency. The Treasurer (Mr. F. S. Miller), unfortunately, does not believe that to be the case, but we think there has to be action by the federal government to bring interest rates down. That will benefit everybody in this province as soon as it is done.

We think there has to be action by Ontario, not just to make speeches but also to put pressure on the federal government. That pressure could be brought in particular if we legislated in Ontario to put such pressure on the financial institutions that they would tell the federal government to bring the interest rates down.

Today in question period I called for a moratorium that would ensure that any mortgages coming up for renewal over the next six months would have to be renewed at the existing rate. That would be a means of enlisting the banks and financial institutions on the side of the people of Ontario to get action by the federal government to bring the interest rates down.

That would be a period of pause, a period during which it would be possible to put new measures in place that would ensure we had interest rates that people in this province and in this country could afford.

I have said before, and I say again, it is time now for Ontario to look at a tax on the excess profits of the banks and financial institutions. Why should they pay a tax rate that is one third the tax rate of the average family in Ontario when their income has gone up by 46 per cent in the first half of this year compared with last year? Why should the banks profiteer and not contribute at all to relief for people who are being hit by the high interest rates?

We believe that Ontario is in a position as the largest province to take action and not just to debate the matter here. We believe the Legislature must first be seized of the urgency of the question and begin to indicate to the government that we care about it, that it is a priority and not just something that is way down the line.

We believe Ontario must do more than what the Treasurer was saying two weeks ago in Ottawa when he suggested we should have Reaganomics in Canada rather than a policy that would bring our interest rates down and give us a made-in-Canada interest rate policy. We need the debate right now, because we need to initiate action to protect the people of this province who otherwise will lose their homes.

If a roof over one's head is not a basic social right in Ontario, I do not know what is. This province should be committed to assuring every family in Ontario that they have the right to have shelter at a price they can afford, and that means at an interest rate they can afford.

Mr. Cassidy moved, seconded by Mr. MacDonald, pursuant to standing order 34, that the business of the House be set aside so that the House may debate a matter of urgent public importance, that being the crisis confronting vast numbers of Ontario home owners who are facing usurious interest rates as they renew mortgages over the next six months.

Mr. Cassidy: It is a fundamental responsibility of government to ensure that citizens in the province have access to decent housing. The government has failed to meet this trust, either by pressuring the federal government to abandon its disastrous interest rate policy or by acting on its own to alleviate the disaster facing many home owners in Ontario.

Mr. Speaker: The notice of motion was received in time and complies with standing order 34. I will be pleased to listen to the honourable members for up to five minutes as to why they think the ordinary business of the House should be set aside.

Mr. Smith: You have already heard from them, Mr. Speaker. It certainly seems to me that the ordinary business of the House should be set aside to discuss not only this very important matter but also the closely related matter of help with the high interest rates that have to be paid by people renewing mortgages, by people who want to build rental accommodation -- a problem that has reached crisis proportions in Ontario -- by farmers who are at risk of losing their farms and by small businesses that will be going bankrupt at a record rate this winter.

The Treasurer is well aware of the fact that Ontario's small businesses, the backbone of our economy, will be going bankrupt at a record rate this winter, and he cannot deny that.

It seems to me that in Ontario we have always taken the view that free enterprise meant the ability of ordinary individuals to go into business for themselves, to have a family farm or to own a home if they were able to work long enough and reasonably enough to put away some savings. These fundamental values in Ontario are being undermined now by a high interest rate policy which derives not so much from Ottawa, although certainly they have followed it, but from Washington, from President Reagan, whose policies the Treasurer is entering into so many rhapsodies about in recommending the same Reagan policies for the Dominion of Canada.

There was a time when the Ontario government was listened to in the federal-provincial annals of this country. Unfortunately, that time has passed. The parish-pump attitude of the present Premier (Mr. Davis) and the totally incomprehensible do-as-I-say-and-not-as-I-do attitude of the Treasurer have combined to render Ontario into a laughing-stock at federal-provincial meetings.

The real question is whether we are going to continue the fundamental values that Ontario has stood for over the years or whether we are going to allow these to be eroded by the high interest rate policy.

Monetary policy of a high interest rate type makes people pay a price for inflation, but the price is paid unevenly. Large corporations do not have to pay the same price as small corporations. People who have assets to invest actually do not have to suffer the way people who do not have assets to invest must suffer. High interest rates cause a burden, but the burden is not shared equally or even close to equally by various members of society. The Treasurer knows that. He is reasonably intelligent and not an ignorant man. He knows that.

4:20 p.m.

Other policies, such as fiscal policies, fall on different groups in society, but the present policy is hurting certain groups. Just as high oil prices affect certain groups -- and the government has moved in a very inadequate and halfhearted way, but at least it has moved a little to help those affected by high oil prices -- surely it is the provincial government's responsibility to do something to assist those who are affected most by the impact of high interest rates.

For instance, if the government of Ontario were to insist that people be allowed to use their registered retirement saving plans to invest in their own mortgage, that would be a tremendous help to a lot of people who happen to have registered retirement savings plans. Of course, it would not help those people who are not in a position to have such RRSPs, but it would be a start. People could borrow to put money into RRSPs if required, as the Treasurer well knows.

The Treasurer will remember the exchange we had in the House some time ago when I told him that the Bank of British Columbia gave rates for their loans under prime for the small businesses of British Columbia, and I asked him to invite the bank presidents here to ask them to do the same thing in Ontario. His answer at the time was that the banks were not making sufficient profits.

Perhaps the Treasurer recalls that brilliant answer of only a few years ago when he said he could not impose on the banks because their profits were not high enough. I will read from Hansard if he likes, if his memory has dimmed in the intervening months and years. Surely the bank profits are high enough now, and if the province of Ontario can find $650 million to buy a minority position in an American company that is developing an Alberta resource --

Mr. Speaker: Mr. Smith, time.

Mr. Smith: -- surely this government can find some money to help those hardest hit by the high interest rates.

Hon. F. S. Miller: Mr. Speaker, the point I will try to make today is not whether this is a serious matter or indeed an urgent matter, but whether this is the forum for the debate. It will be accepted by all of us, no matter which party we are in, that the problems faced by individuals -- be it of their own making or be it by the chance of the marketplace -- are very grave when their mortgage rates are increased, as many are, by a factor of two after a period of one, two, three or five years.

Nothing is as difficult for families to face as a potential loss of their homes. Nothing is as likely to destroy their faith in the system we espouse in this nation. But it has been consistently recognized that interest rate policy, the factor causing this change in the mortgage rates, is not a creature of the provincial government. It is the creature, in the scheme of things in Canada, of our federal government. Even there, to give the devil his due, it is not entirely within the competence or management of the government of Canada. Governments as strong as that of West Germany have called upon the United States of America to soften their high interest rate policy in the interest of world economies, not just their own.

When the leader of the New Democratic Party says in his resolution that we have failed to meet this trust by not pressuring the federal government to abandon its disastrous interest rate policy, first he recognizes one thing; it is a federal interest rate policy.

On the other hand, he is quite incorrect when he says we have failed to pressure them. I have made statements -- quite vigorous statements -- last year in December and again in September of this year to that effect and to point out that we need a lasting solution to inflation if we are going to have any solution to the high interest rate problem. That depends very heavily upon the confidence Canadians have in their federal government.

Monetary policy alone cannot be used to fight inflation just through high interest rates. They have to tackle the problems of government deficits here and in the United States, and we have to work on a national economic policy to do so.

These problems do require, as I pointed out, federal initiative and leadership. We expressed that quite clearly in the document I am sure all members got a copy of, which I presented as Ontario's position at the most recent finance ministers' conference, a conference where we felt just a bit used. We were called in to give advice for the budget coming up, I hope, in a week or so. I felt we may have been called after the budget was written, and I expressed that opinion at that time. However, I make the point that a federal budget is imminent. A federal budget is the proper place to tackle this problem, and the proper forum is the federal House.

Mr. Speaker: I would point out to all members of the Legislature that, on April 23 and April 27 of this year, there were two very similar motions put before the House which were ruled out of order at that time. However, I point out that the reasons for that ruling no longer exist, and I have listened to the argument presented with great care and with great interest. While it is interesting, too, to hear the remarks of the Treasurer, in my view the matter is of such public importance that I am going to put the question under standing order 34(a). The only question before this House is, "Shall the debate proceed?"

All those in favour will please say "aye."

All those opposed will please say "nay."

In my opinion the ayes have it.

INTEREST RATES

Mr. Cassidy: Mr. Speaker, thank you for your ruling. I am glad you appreciate that the situation has changed since April. In fact, the very rapid increase of interest rates began again in December, acquired momentum about the time we were having the debate in April and took the Bank of Canada interest rate over the 20 per cent level, has taken mortgages up to 22 per cent and 23 per cent, and now is having an impact in every corner of the economy.

In August, I visited a home up in Ottawa, in Evelyn Gigantes' old riding in Carleton East, and there a lady came in and said, "You know, I am going to lose this house next year." As far as she was concerned, there were no if, ands or buts; she knew she could not stay. As soon as her mortgage came up for renewal, that was the end.

When I was canvassing in the Spadina by- election, I ran into people who said: "We cannot stay here. We have been here for four or five years. We have put our life into this place. We wanted it. We are doing our best to keep it, but $700 a month is more than we can afford, and we are going to have to move out."

Of course, if a young couple with children move out of a home they have struggled to buy, where the devil are they going to go and find a place even to rent in Metropolitan Toronto? Rents have been rising so high and accommodation for families is so limited that they are just as badly off outside as they are struggling to pay the mortgages.

We are faced with an uncaring federal government that has decided to follow blindly policies set in the United States. People are looking somewhere for leadership, not just for buck passing by politicians. Mr. McEachen and Mr. Trudeau try to pass the buck to Washington or to the provinces, and people like the Treasurer of Ontario try to pass the buck to the federal government.

We are looking for leadership in dealing with the crisis in mortgage rates, which, as I said earlier, will lead to 200,000 people having to renegotiate their mortgages just in the coming months, often with dramatic and unaffordable increases in mortgage payments. Make no mistake, I am talking about increases going from $350 to $600 a month, from $500 to $800 a month, from $650 to $1,000 or more a month; these are typical increases in the mortgages people are having to pay.

Moreover, the term of a mortgage is getting shorter. More and more people are finding they cannot plan their lives. They are having to pay for homes at the same kind of interest rates people used to have to expect to pay for cars. If one looks at the car market today, one can buy a car a lot cheaper in terms of the interest rate one has to pay on payments than one can buy a home for or renegotiate a mortgage.

The high interest rates in housing have led, in turn, to a catastrophic drop in housing starts. They have led to unprecedentedly low vacancy rates in terms of rental housing. They have led to a situation where we are not now building enough housing to meet the needs of ordinary people. Instead, the only housing going up is $250,000 condominiums, luxury units, high-rise palaces for the various rich, or for people who are able to speculate in today's inflationary environment, with nothing at all for ordinary people.

4:30 p.m.

We are looking for leadership in turning that situation around. That leadership is not just to come from the federal government. We believe that leadership can and should come from Ontario. This province is the biggest province in Confederation. We have 8.5 million people, a third of the population of Canada. We have enough clout, it seems to me, to put such pressure on the federal government that they will have no choice but to act.

That is why we are looking to the government for short-term action to help people out of the present emergency. We are looking for action that will ensure we bring the interest rates down permanently so that home owners, tenants and all the other groups affected by high interest rates can get through the crisis now facing them.

That is why we do not believe the government can just sit by and watch a rising tide of foreclosures and repossessions and quit claims. This government cannot just allow the federal government to follow its disastrous course and say, as the Treasurer (Mr. F. S. Miller) has said, "It is time to do something, but it is going to take a long time to work its way out."

We cannot afford a policy that says we have to follow the lead from Washington rather than going it alone. It is time we sought a made-in-Canada economic policy, a made-in-Canada interest rate policy. It is time Ontario was prepared even to see our borders shut with exchange controls as a means of insulating ourselves from the disastrous impact of the interest-rate policies that are now prevailing in Washington.

That does not need to go on forever; it can go on for only a short period of time. But if we do not do something, there will be tens if not hundreds of thousands of people who simply will be thrown out of the market. There will be chaos in the housing market in Ontario -- a chaos we can afford neither in economic terms nor in social terms.

That is why I am proposing that the government of Ontario should legislate the extension of all mortgages that come up for renewal for a further six months at their current rate -- at the least six months. I am proposing that should take place beginning now. We will be happy to co-operate to see the legislation passed. I propose that should prevail for six months, or for a year if needs be, as a means of giving short-term relief to people in Ontario and as a means of putting real pressure on the federal government.

It is clear that when the Treasurer of Ontario hits the Minister of Finance over the head with a handful of limp spaghetti it is not going to have the necessary impact on the federal government. It is clear that speeches by the Premier (Mr. Davis) cut no ice in Ottawa. They got Ontario's support on the constitution. They do not need this province's support any more. They do not seem to give a damn what the Premier has to say.

It is clear that words alone are not going to stop the disastrous course of action coming from the federal government. It is clear as well that the actions by the provincial Leader of the Opposition (Mr. Smith) and his caucus cut no ice with the federal Liberals. What we need to do is to start to make the financial institutions hurt to the point that they will put the pressure on for a made-in-Canada interest rate policy.

The hurt is a relative matter. The profits of the banks are up by 46 per cent this year. They can certainly afford to bring the interest rates down on renewals of mortgages. They can afford a few months when perhaps they will be paying as much out on the deposits as they are getting in on their mortgages.

Nobody will actually lose income from the proposal we are making. It is a means of making those financial institutions hurt to the point where they say to the federal government: "Enough is enough; bring the interest rates down."

It is time to act now. Ontarians and Canadians can no longer afford the kind of long-term policy of monetarism that has had such a destructive impact on our economy, our society, our country and our province over the course of the last four and half or five years.

The government has to accept affordable housing as an absolute social right; that means housing at an interest rate people can afford. It may take a bit of time to draft the specific policies that will ensure that right is a reality for ordinary families across Ontario.

But while those policies are being created, surely those people whose mortgages are coming up for renewal should not be made the victims of the negligence and delays we have been seeing from the Ontario government and from the federal government.

We cannot, we must not, we should not allow the current crisis to destroy what so many people in our province have built for themselves. That is why we argue there should be a moratorium now.

My colleague the member for Etobicoke (Mr. Philip) said to the Treasurer, "Let's have a change in the mandate of the Province of Ontario Savings Office so that it can bring together provincial savings and put them in the hands of people who need mortgages." The Treasurer is so blind and so shortsighted that he replied, "That is not its mandate right now." No, it is not its mandate right now, but surely the times cry out for some imagination and some initiative on behalf of this government, not just simply stonewalling and buck passing, which is what we are seeing now.

The Treasurer referred us to his statement on building a stronger economy which he delivered at the finance ministers' conference in Ottawa.

The Acting Speaker (Mr. Cousens): One minute.

Mr. Cassidy: One minute, thank you.

That statement was an abdication. In it the Treasurer said we should cut the capital gains tax, we should cut taxes on people earning big incomes, we should cut corporation tax, we should encourage foreign investment, we should abandon our efforts to revise competition policy, we should abandon efforts to strengthen the Foreign Investment Review Agency, we should promote a sound business climate, we should cut the deficit, we should cut spending, we should do everything that is being done by the Reagan administration in Washington.

That is exactly what is happening in Washington right now and it is not working down there. What the Treasurer failed to mention in his statement in Ottawa the other day was that Reagan's policy embraces monetarism. It embraces the high interest rates which he now tries to back away from.

The Treasurer cannot have it both ways. He cannot be so hypocritical as one day to say he is opposed to high interest rates and the next day to buy every aspect of a high interest rate monetarist policy being adopted by the Americans. The Treasurer has to lend his voice and his action; this government has to lend its voice and its time and its legislation to every effort and every means that can be dug up to bring the interest rates down on behalf of home owners in Ontario.

Mr. Riddell: Mr. Speaker, I want to make a few remarks about the serious situation that one sector of our society is facing and that, of course, is the farmers. Farmers, too, own homes, which are very much a part of their farming business. This is well recognized by the Income Tax Act. Not only are these farmers facing the possible loss of their farms, but also they are losing their homes with the farms and wondering where they are going to go in order to live and survive.

We have brought this matter up in the House for more than two years now and we hear the same response -- that monetary policy is a responsibility of the federal government and we should speak to our federal brethren about the high interest rates. That is fine; I will admit that monetary policy is the responsibility of the federal government and I am not happy with its policy of letting interest rates go to 23 and 24 per cent.

I have talked to economists. I well recall Dr. Ken Galbraith, who is the head of the economics department at Harvard University, saying it is entirely wrong for governments to allow interest rates to go to that level. He was even suggesting that we follow a restricted wage and price program. In other words, he was calling for wage and price controls and lower interest rates in order to try to bring this economy back to some reasonable measure.

The farmers are in trouble. There is no question about it. We are seeing demonstrations now; we saw them in Owen Sound taking their tractors up the main street, holding up traffic for hours, setting up loudspeaking systems at every bank. We have seen people meeting Eugene Whelan no matter where he goes. He was in Kincardine the other night and he was met by more than 200 farmers who stand to lose their farms unless something is done.

4:40 p.m.

I was at the Ontario Federation of Agriculture meeting in Huron county just the other night when 1,200 letters from farmers were presented to the federal member to take back to Ottawa. So, sure, Ottawa has a responsibility here, but I maintain the provincial government also has a responsibility.

If I had the time I could tell you, Mr. Speaker, exactly what programs are available to assist the farmers through this tough period in every other province except Prince Edward Island -- but they have assisted their farmers through grants. I also have a list of the programs the Americans have to assist their farmers through this period of inflation and high interest rates.

Sure, we follow the American example; we like to say it was the United States that let the interest rates go and we had to follow suit. But by the same token the Americans were very quick to come to the aid of their farmers with a number of very excellent programs, which I will deal with when we start the estimates tonight rather than taking the time now.

At this time last year 81 farmers had gone bankrupt, and to the end of August this year 103 farmers in Ontario have gone bankrupt; more have gone bankrupt since these figures came out. So in total for the last two years in Ontario about 200 farmers have gone bankrupt.

But that does not tell the whole story; we do not know how many farmers sold their farms before they went bankrupt. It has been estimated that for each farmer who declares bankruptcy, 10 more sell out voluntarily. If you multiply the 200 who have gone bankrupt by the 10 more, that is 2,000 farmers. If you consider that these farmers farm an average of perhaps 300 acres, you can see that we have something like 600,000 acres of land that have now been vacated by the farmers who have farmed that land generation after generation. We cannot afford to have these farmers go out, because in the long run it is going to mean a shortage of food.

A lot of this land is being sold to foreign investors who are doing nothing more than speculating. They do not particularly care whether there is a crop growing efficiently on that farm or not. They would probably like to see a crop, they would like to make a profit; but they are not going to farm that land as efficiently as the farmer who has some stake in it and who knows how to farm it.

The land being sold in Bruce county because farmers cannot hold on has to be given special treatment because of its nature, its topography, the stones found in the land. These farmers know how to farm that land, but if they go out of business we are not going to replace them with farmers who know how to farm that land. It is going to lead to a shortage of food, which of course means higher prices to the consumer, compounding the problems the consumers now have with high mortgage rates, et cetera.

I see that the parliamentary assistant to the Minister of Agriculture and Food is here. He will recall when Bill Stewart, the former Minister of Agriculture and Food, set up a committee to look at the whole matter of agriculture, of farming. That committee came out with a report called The Challenge of Abundance. One of the recommendations in the report was for farmers to expand and become more efficient. I think the government has advocated that every year since The Challenge of Abundance came out.

If the members go back to the throne speech given at the beginning of this session of parliament they will also find that the government was talking about more efficiency, more expansion. So really the government have been the ones telling the farmers, "You have got to get bigger. You have got to get more efficient." These are the very farmers who are now in trouble, the guys who followed that advice, the fellow who borrowed money when the interest rates were reasonable at 12 and 13 per cent. All of a sudden he finds he is paying 24 per cent on his expansion program.

Let us not say it is the inefficient farmer who is going out of business. It is not. As the parliamentary assistant well knows, it is a lot of the good, efficient farmers who have followed the government's advice who are now in trouble. They are going to go under unless there is some immediate relief from government at both levels.

I heard the Minister of Agriculture and Food (Mr. Henderson) interviewed on a television program. Of course, like his colleagues he says it is a federal responsibility and that he has no control over interest rates. I admit to that, but the minister also went on to say that if the federal government does not come to the aid of farmers in Ontario, then he and his government will provide some kind of relief program.

If that is the case, I think he should be bringing forward this program without undue delay, without any further delay, because there are a lot of farmers who are just holding on by a thread. They were hoping to have a good crop and good prices this fall, but that is not the case.

We saw what happened to the bean crop because of the weather -- decreased yields and a bad sample. We know what the price of corn is right now. Farmers are looking at $2.50 or $2.60 corn this fall. They just cannot do it and pay the high interest rates.

I am saying the provincial government had better step in and provide some kind of relief program to keep these efficient farmers in business or we are going to find an increasing number of farm bankruptcies and land that is not going to produce efficiently, which is going to lead inevitably to higher food costs to the consumers.

Mr. Robinson: Mr. Speaker, I think it is interesting to note at the outset two or three obvious facts about the interest rates and the housing crisis here in Ontario and in Canada. It is interesting that all sides of this House can agree with some passion and emotion that there is a very real problem in both of these areas that affects very real people.

We are not talking about something that is intangible or distant, about some corporation or a gigantic social institution. We are talking about the house a person lives in, that I live in, that the people down the block live in, that the farmer has on his land. It is something that could hardly be any more fundamental or any more personal, but that does not really help a great deal in trying to arrive at a solution to the problem.

Let us examine for a moment where the problem lies. It is interesting to note that both the third party and the official opposition note that the problem and, indeed, the area of responsibility is in the first instance within the purview of the federal government. They know full well they have been pressing their federal colleagues, their federal counterparts for action in this area, particularly in the case of the opposition. They know this government has been pressing the federal government for action in these areas, for relief for these serious problems. Both also equally note that all those demands have met with very little response.

Where does that leave us? That seems to leave the opposition now asking the government of Ontario to substitute for the responsibility that is being abdicated by the federal government, to take over and find some relief for our taxpayers and our citizens on its behalf. It is interesting, when one looks closely at the federal scene, to note the matter of the economy is obviously not the most important issue in the mind of the Prime Minister. He seems hell bent without substitution that until the matter of the constitution is completed, he is not going to direct the attention of his government in a real or positive way towards the ultimate problem that faces Canadians as related to the economy.

It is interesting that when the federal government does pay some lip service to the economy, Mr. Paul Cosgrove, the federal Minister of Public Works, has difficulty relating to Mr. Allan MacEachen, the federal Minister of Finance. Then Mr. MacEachen seemingly has difficulty relating to the Prime Minister, all of which leaves every citizen of this province without any hope or program designed to give relief from either high interest rates or rising housing prices. But if there were to be a relief program, if the Ontario government were somehow able to cross that jurisdictional boundary and offer the kind of relief program the federal government should be offering, where might that relief come from?

4:50 p.m.

Would it come from the banks? Should we tamper with the free enterprise system and instruct the banks somehow that no matter what their policies are, no matter what they are paying out on money that is put in trust with them by way of savings, they should somehow automatically and without further consideration -- I heard it suggested earlier in this debate -- cut the interest rate on mortgages in half? I really do not know how they can do that and still maintain the private enterprise system that has become the fundamental cornerstone of our province.

Perhaps we should consider a major subsidization program here in Ontario. Perhaps the people of Ontario should pay for those other people who are on the verge of losing their houses. I am hearing rumblings from down the way -- it is interesting that they do not have the answer to the problem either. How should this action be addressed? Should we try to find something in the short term for here, today and tomorrow? That is hardly going to solve the problem of high interest rates, which is a fundamental fault of our economy in this day and age; it is hardly going to bring permanent relief to those people who are now suffering.

I take you back, Mr Speaker, to that brief period of time when Joe Clark was Prime Minister of this country, and I take the members back to a program that was called mortgage deductibility, a program there was never an opportunity to bring into force, a program that then seemed not necessarily in keeping with the economic times. But had that program been in force now, I would suggest those people facing the loss of their homes through mortgage renewal might not be under nearly the same pressure they are under today.

Where is the real problem then? The real problem is either with the federal government in the first instance, or perhaps beyond, in the broader economic context of the fiscal policy of the United States government and President Reagan. It is easy to say that President Reagan's made-in-Washington interest policy, which has been adopted by Ottawa, is having a negative impact on citizens, and it is. It is also having a negative impact on the government of Ontario; that is you and I and everyone else here. Such things as our farsighted Urban Transportation Development Corporation program have been greatly curtailed because of United States budget cuts, which have absolutely nothing to do with us but affect our economic base here at home.

In conclusion, I would say it has been a privilege for me to take part in this debate. It is unfortunate that where the pressure needs to be directed, at the federal government of this country, to tell it to put aside the constitution if need be for the moment or at least to find somehow the capacity to take a little bit more on its plate and deal not only with the matter of the constitution -- which I can tell the House is not nearly of such real concern to the people of Ontario as the prospect of losing their homes -- but get on with the very important job at hand.

NOTICE OF DISSATISFACTION

The Acting Speaker: Pursuant to standing order 28, the member for Nickel Belt (Mr. Laughren) has given notice of his dissatisfaction with the answer to his question given by the Minister of the Environment (Mr. Norton). This matter will be debated at 10:30 p.m. tonight.

INTEREST RATES (CONTINUED)

Mr. Wildman: Mr. Speaker, I just have to respond somewhat to that last speech from the member for Scarborough-Ellesmere (Mr. Robinson), which really was no more than a bit of fed-bashing and old-line free enterprise protection of the banks. It really is hard to take in this House, to have people sit there, whether they be supporters of the federal Liberal government or supporters of the provincial Conservative government, who will countenance usury to continue in this country, in this province.

In the Middle Ages, if there had been any approach to interest rates at this kind of level, the church would have taken action against it. To have that kind of thing accepted in this day and age, when we have got away from feudalism and actually do believe that people have a right to own homes, is really hard to understand.

Why is it that we can hear supporters of both the federal Liberals and provincial Conservatives standing in this House and basically saying, "It is not my job, it is the other guy's," when in fact what they both mean is, "Neither one of us wants to touch it. Neither one of us wants to do anything."

There is no question that not only are home owners facing very difficult times with the high interest rates that we have but many other groups, especially small businessmen and farmers, are facing very serious difficulties, and there are increasing numbers of bankruptcies.

I have a couple of comments to make about the remarks that have been made in the debate regarding small business. I have had many small businessmen come to me and say, "We need to refinance but the change in the interest rates is making it terribly difficult for us to carry inventories. We cannot compete." Many of them, who have never ever countenanced asking for government assistance in the past, come to us saying, "Is there anything the government has to offer at the federal or provincial level? Is there anything that can be done? Are there any grants available?"

Basically, to the small businessman we have to respond that in Ontario or Canada there are no grants for small businessmen but only grants for big businessmen. There are loans for small businessmen. There are the Northern Ontario Development Corporation, the Ontario Development Corporation, the Eastern Ontario Development Corporation, but they have to be big to get a grant. They have to be in the pulp and paper industry; they have to be Chrysler or they have to be the Ford Motor Company.

There is nothing for the small businessman despite the arguments that are made on many occasions about support for small business being the centre of our economy.

In terms of farmers, the same is the case. In my area there are the farmers and beef producers. This fall, in the latest sale in my area, they received an average of 60 cents a pound for beef on the hoof, which, as anyone who has had contact with the beef industry knows, is completely unacceptable. It does not come anywhere close to meeting costs, and it makes it almost impossible for the beef producer to continue. The main reason for those low prices is the high interest rates that the buyers of those cattle will face in having to carry those cattle over the winter before they are sold.

So we have a situation where one farmer said to me at the latest sale, "At least in Soviet Russia, Stalin killed off the kulaks, but here they make us starve to death." That was a pretty extreme statement to come from a Conservative, as a matter of fact, but to me it is interesting that he would feel that way in the face of the economic plight that the farmers face.

Mr. Mancini: Who made that statement?

Mr. Wildman: It was a local farmer in my area in reaction to the very low prices that beef producers received in the latest sale in the area.

I find it rather strange in that context to have Eugene Whelan going around attacking the banks and bank profits. I certainly do not support the kind of profits the banks have received in the last year or two years. It is something to have the minister of a government that is responsible for high interest rates attacking the banks that are profiting from them. He is really trying to have it both ways.

I want to speak specifically about housing. I recently had a constituent of mine contact me. He built a modest house two years ago. He built it himself, as many people do in northern Ontario. He took what he thought to be a small mortgage in this day and age. It was a $30,000 mortgage, one that he could afford. He got it at 10¼ per cent. He felt he could afford that. He has a wife and three children, and his wife remains at home with their children because they are young and they both felt they wished to have the opportunity to have her raise the children at home. He has to renegotiate his mortgage next month; he is one of those 200,000 people we were referring to.

He contacted the mortgage institution to ask them what the new rate would be. They speculated that rates might drop somewhat but he was facing something like 20¾ per cent. In other words, it was double or more than double what he is now paying. That means his payments will rise from about $400 a month to $800 a month for a modest home. It means that if his wife can get a job outside the home, they might still be able to maintain their home and pay for the house, but that means she is not going to be with her children. It also means she is going to have to hire a baby-sitter or handle it in some other manner. Certainly, there is no day care in our area she could avail herself of. That is just one example.

5 p.m.

The Treasurer alluded earlier to some people who may have brought themselves into this situation or found themselves at the mercy of the market through poor planning or whatever. I do not think this individual I am talking about can be referred to in that way. He did not build a big house; he did not build a house he could not afford -- at least he did not think he did until now, when he has to renegotiate his mortgage.

He called me and said, "What can we do?" How do you respond to that, Mr. Speaker? I suppose you have been in the same situation. How do you respond when a young person who is just starting out in life suddenly has his world collapse around him and he calls and says, "Is there anything that can be done?"

Unlike the previous participant in the debate, I think there is something that can be done. I do not think we need to continue to follow slavishly the US policy on mortgage rates. I agree with the Treasurer that it is the responsibility of the federal government to lower interest rates; I do not debate that. I find it a little hard to understand some of his comments where he seems to be supporting the Reaganomics that MacEachen is following. But he does on occasion say he thinks lower rates should be brought about by the federal government. Obviously the federal government is not prepared to act at this time. I deplore that, but that does not mean this government should just sit back and say, "It is their job and they are not doing it. Isn't it awful?"

Other provincial governments have responded. They have responded in ways I do not agree with, frankly. The Nova Scotia government, for instance, has a subsidy program. Basically it means just subsidizing more bank profits and subsidizing those who do not really need assistance.

We face a situation that was raised with the Treasurer by my colleague the member for Windsor-Riverside (Mr. Cooke), when he mentioned that something in the range of 600 homes are being repossessed. He asked what could be done and the Treasurer replied in a letter to my colleague that he was very encouraged by the innovative financing arrangements now being considered by private lenders to ease home owner payment burdens. I wonder what the Treasurer is talking about. Is he talking about the proposal to lengthen the time of a mortgage and to cut the interest rate that is paid now so that one pays it later? Or is he supporting the temporary home interest stabilization program proposed by the Bank of Montreal and the Bank of Nova Scotia?

I do not think anyone here should support that. All that means is more and more profits to the banks. They are already up 45.6 per cent over last year in the first half of 1981. The banks are not suffering. The banks can afford to maintain the current rates on mortgages if this government has the gumption to tell them they must do so. If it would do that, then perhaps we would get some action, because the banks would put some pressure on the federal government. I do not think we should sit back and accept the situation. People should not be forced out of their homes.

Mr. Mancini: I wish to join in this debate and to support the motion that has been put forth by the New Democratic Party.

In my opening comments I would say that I am disappointed with the New Democratic Party on two counts specifically concerning high interest rates. First, I am disappointed they would not let the Leader of the Opposition (Mr. Smith) introduce and proceed with his more expanded motion so that we could deal with the problems high interest rates are causing farmers and small businessmen. We certainly do not want to neglect the problems these other sectors of our economy are facing, and I am disappointed we will not have the opportunity to debate that fully this afternoon.

Second, before the last election, the Ontario Liberal Party put forward a paper and presented it to the Legislature which outlined a plan whereby the provincial government could assist farmers, home owners and small businessmen. If at that time we had had the support of the New Democratic Party, the people we are now talking about, the home owners who are being pressed to the wall because of high interest rates, would probably already have been receiving some form of assistance.

At that time, it served the political purpose of the New Democratic Party not to support assistance for home owners, small businessmen and farmers. I now take it things have changed and their political purpose is going to be served by the motion they have put before the House today.

Mr. Speaker, as you have sat in the chair since last spring, you may recall that on several occasions I rose in the House to question the Premier and the Treasurer as to what they intended to do to alleviate the situation for people being forced from their homes, for people being forced to give up their farms and for people being forced to close up small businesses.

I wanted to know from them specifically what they had in mind and what they were going to do since they had this new mandate to deal with the problems Ontario is faced with. What we received last spring was nothing but an evasion of the questions put to them. We received no concrete proposals.

Therefore, we find ourselves here today, during the first couple of weeks in October after a prolonged stint of high interest rates, once again debating the basic problems of the situation. We find ourselves once again asking the government what steps it proposes to take. We find ourselves once again debating the issue instead of the government taking action and moving forward, instead of the government proposing a plan to assist people to stay in their homes, to keep their farms and to be able to operate their small businesses.

We know there is money in the government coffers, we were shown there is money in the government coffers, because over the past summer the Treasurer of Ontario was able to find $10.6 million to buy the Premier a new executive jet so he could fly across Ontario in first-class luxury. They were willing to put the Premier in a first-class luxury jet --

Mr. Philip: What's wrong with de Havilland? They can't even buy it in Ontario.

Mr. Mancini: As his colleague the member for Windsor-Riverside has probably told the member for Etobicoke (Mr. Philip), there are several hundred people in the area of Windsor alone who are being forced from their homes. I want to make sure they can stay in their homes. If my priority were to decide between an executive luxury jet for the Premier or to assist people to stay in their homes, I would assist people to stay in their homes. I know exactly where my priorities are.

I can understand the frustration many of the people in the province feel. There is money for luxury jets, but there is no money to assist home owners who are being forced to the wall. The old song that this is a federal responsibility is wearing a little thin. We have a mandate given to a party that was able to capture 70 seats, and the only thing it has done since it captured office is to blame all the ills on Ottawa. They have thrown up their hands and claimed they cannot do anything. They jet across the country in luxury jets to ensure that at every stop they make they go first class.

5:10 p.m.

This government put itself on record clearly in 1975, not just by an ordinary back-bencher, not just by a member of the cabinet, but by the Premier himself. The Premier made a speech, a copy of which I happen to have, back on September 11, 1975, when he was in Waterloo. He was speaking to an audience, and he said to them -- and I am quoting the Premier:

"What we would propose, if we are forced to act, is to extend tax relief to present and prospective home owners through a new tax credit which would offset three quarters of the mortgage interest costs which are above 10¼ per cent. Such relief would be allowed to a maximum of $500."

The question is, if 10¼ per cent interest rates were driving people from their homes in 1975, what are 22 per cent interest rates doing today? Why was it proper for the Premier of Ontario to offer assistance in 1975 when rates reached 10¼ per cent, but it is not proper today when people are literally turning in their keys, when they are being forced to the wall?

I, like other members, have received many phone calls and many visits by individual constituents at my constituency office explaining to me their plight. No one could have foreseen the doubling of interest rates. No one can be expected financially to pay such a drastic increase in payments on a monthly basis over so short a period of time.

What have we received from this government? A flat nothing. Now they even try almost not to acknowledge the comments that were made by the Premier -- not only comments but the promise that was made by the Premier. If the Premier of Ontario cannot be trusted with such a promise, I dare say there were many home owners who bought homes and who increased their mortgages because of this promise.

I dare say the government does have a responsibility. They encouraged this; they encouraged people into big mortgages with their $1,500 first-time home owner grant and with this proposal that was made by the Premier. They have obligations as the government of Ontario. They have been elected to serve the needs of the people; instead, they sit there and throw up their arms.

The Treasurer goes to Ottawa and gives all kinds of instructions to the Minister of Finance of Canada. The Leader of the Opposition pointed out today that the Treasurer went to Ottawa and said: "Cut spending. Do not increase your deficit. Do not do this. Do not increase taxes." Yet only last May the Treasurer did exactly all of the things he told the Minister of Finance of Canada not to do.

This government has an obligation; it has been elected to perform. We will sit here on the opposition benches and remind them of their obligations; and we hope they take them seriously before too many people are forced to leave their homes.

Hon. Mr. Bennett: Mr. Speaker, I guess nobody more than myself over the last number of months has heard about the high mortgage interest rate program in Ontario and indeed in Canada. I have heard from home owners in every part of this province about the difficulties they are experiencing.

Our ministry, along with the Treasurer's ministry, has worked on trying to bring Ottawa to some understanding of the situation. At the time we realized there also had to be an increase in the amount of rental stock that would be available in our province. We have taken the opportunity of reviewing programs in Ottawa and, indeed, as the member for Algoma (Mr. Wildman) has said, of reviewing programs that have been offered by other provinces.

But I think we have to realize that the problems today are not only those that relate to new housing construction, which most of the provinces have zeroed in on. I would have to say that if one point has been brought home it has been that it is not so much new housing stock that we have to be concerned with, because as one notices from the advertisements in the press across this province, most of the developers are writing down the mortgage interest rate to 14.5 to 15.5 per cent. That is in the range of what appears to be somewhat affordable in today's market. If it is not, then I would have to say that the remarks made by the general public in relationship to interest rates would not support that position.

Mr. Philip: And they are tacking it on to the price. What difference does it make? What difference does it make when they take it from one end and put it on to the other?

Hon. Mr. Bennett: Mr. Speaker, I ask the member for Etobicoke to sit and wait his turn. I do not think there was any interruption from this side while the members of the opposition were speaking. I would appreciate the same courtesy.

Mr. Renwick: We saved you from foreclosure.

Hon. Mr. Bennett: We will take that up on another occasion.

I was saying very clearly that we have the situation where the programs are not related only to new construction by any stretch of the imagination. The Treasurer, my ministry and others have been to Ottawa. We have discussed their responsibilities with the federal treasury. Let me say that the opposition party today is in agreement that it is a federal responsibility. It does not singularly rest with the province of Ontario; it is a collective problem in this country.

Ultimately, the financial and fiscal responsibility of this country rests with the federal government. I believe if we are going to make some major changes in the interest rate program through the Bank of Canada -- and I am pleased to see that over the last few weeks the rate has continued to drop, and I would hope that we might experience a similar adjustment downward in this week's rate; I do not know, but I would hope that we would. Indeed, it has significantly dropped in the last few weeks, if one wants to look at a point and a half as being rather significant.

I want to say very clearly that we have suggested various types of programs to the federal government. I am sure that when the Treasurer speaks during the latter part of this debate he will try to cover them. We have suggested ways that we believe could be of some assistance in putting mortgage money to work. But let me remind members that, when we talk about the banks backing off and the banks doing this and the banks doing that, most of the money on deposit happens, as has already been said, to belong to the private individual depositors in this country who have trust and faith in the chartered banks of Canada and who are anticipating some return.

I want to recite a little story that happened to me just the other day when discussing the situation relating to interest rates. A real estate agent of some renown, who now is retired, was indicating clearly that he thought the mortgage rates were atrocious in this country and they should back off. He felt there should be some position taken with the federal government in trying to reduce that position. The next remarks were very simply this: "But they dare not interfere with the 90-day or 119-day short-term money that we have on deposit at the bank, because we want to maintain that 19.5 per cent or better interest that we have been paid by the banks on short-term deposits." Obviously we are talking about one and the same number of dollars that happen to finance mortgages or other portions of the economy of Canada.

I want to touch on the problem of rental construction. We introduced a program, the Ontario rental construction loan program, which we thought would bring on stream something in the range of 10,000 units in Ontario. There was a rather substantial number of people who took up the offer of the province, to the point where it was adjusted upwards to accommodate more applications from across our province. We had a total of something better than 20,000 units applied for in 221 projects. Certainly some applications have fallen by the wayside as a result of one or two things; either that type of unit was not required in their community or because, financially, the company did not want to proceed with them.

Overall, we have approved something in the range of 14,000 units, of which about 6,600 are under construction. There is some question about whether the other 8,000 will proceed.

I have to say that when CIPREC, the Canadian Institute of Public Real Estate Companies, and the others that have come in to see me put their position clearly to us, it is difficult even from a government point of view to suggest that we should force them on to construction.

There are a couple of problems. First, interest rates obviously are the basic problem, because the rate they originally were predicated on was 18.5 per cent. If the rate went back to 18.5 per cent, the private sector would take the opportunity of developing at least the 15,000 rental units, if not more. But at 22 per cent or a rate in that range, it takes it completely out of all proportion economically for the developer.

The second point -- and certainly I am going to refer to Canada Mortgage and Housing Corporation, because we have had some long discussions with them -- is that the federal government has two problems I see that are somewhat impeding the progress of development rental construction in Ontario.

One problem is that the federal government will not participate in a piggyback of the program, the Ontario rental construction loan program at the moment. I have some faith that they will turn around in the budget in the near future and come forward with some type of program that will offer some assistance to encourage rental construction, because just a week ago the federal government acknowledged through CMHC that it now recognizes there is a rental shortage in major portions of Canada and it will now come to the table and offer some assistance.

5:20 p.m.

The other area is multiple-unit residential buildings, which is a tax incentive program. Without MURBs, the rental construction loan program on its own does not really make much sense. I said that at the time of the introduction and I repeat it here again today.

I am encouraging the federal government, through the Treasurer of this province, to continue the MURB program beyond the conclusion of the current year. I think it is important that some definite position by the federal government be given at the time of the budget as to what will happen with MURBs.

The third situation -- and I suppose it has maybe a greater effect today on trying to get rental construction going in Ontario, and maybe in other parts of Canada, than the previous two items I raised -- is the mortgage insurance program of CMHC.

For a long time the mortgage insurance program would insure large rental construction programs in the range of 85 to 90 per cent of capital costs. As the interest rates moved up, the mortgage insurance program went down. The percentage being offered by CMHC arrived at somewhere around 75 to 80 per cent. Once the interest rates exceeded 19.5 per cent, the federal government's mortgage insurance program dropped to between 50 and 60 per cent.

I might say to the members that a project in Scarborough was discontinued by a developer for the simple reason that the mortgage insurance dropped to 51 per cent, which means that somewhere along the line the equity factor by the developer has to be 49 per cent, a ridiculous situation in terms of the cost of money in today's market.

I am suggesting strongly, as I have suggested to Mr. Hession and Mr. Cosgrove, that some adjustments be made in the CMHC policy that would allow, even in the light of the economics and the projection of a project at 19.5 or 20.5 per cent, whatever it happens to be, the portion of mortgage insurance to be something greater than 50 or 60 per cent because, without a greater portion of mortgage insurance, I can assure this House that the possibilities of bringing other construction under way are very doubtful.

I know they will tell me, as they have in the discussions with my staff, that unfortunately it is a long legislative process to make these adjustments in the Canada Mortgage and Housing Corporation Act to allow for greater mortgage insurance. I would like to suggest, as have my staff in their discussions in recent days with CMHC and with the present CMHC, that at least Mr. MacEachen, at the time of his budget, could say very clearly that he is preparing to make these changes in the mortgage insurance program and that he will entertain them at certain rates today and that he will be able to accommodate them.

Mr. Speaker, I tell you very honestly that, while we recognize the difficulties, I believe it is incumbent upon the federal government, not singularly to this province, nor singularly to any other province, but collectively to find some solution to the situation. We know what the difficulties are. We know very well that in the marketplace today something in the range of -- for those seeking help -- 35,000 unit owners will be using more than 30 per cent of their income to maintain their residences at a 22 per cent interest rate. That drops rather interestingly over the next two or three percentage points.

Frankly, I hope we will find in the federal budget of the next few weeks some movement and some assistance that will afford Ontarians and other Canadians the opportunity to retain their homes.

Mr. Philip: Mr. Speaker, last year around this time the mortgage interest rate was above 13 per cent. This year we are facing mortgage interest rates upwards of 20 per cent. Indeed, if we look at the recent list of mortgages available on a one-year basis, we are talking about well over 20 per cent: Bayshore Trust, 21.5 per cent; Canada Permanent, 21.5 per cent; Monarch, 23 per cent; National, 22.5 per cent -- and I could go on down the list.

This problem is considerably worse when we look at what speculation has already done to the cost of housing, particularly in some of the urban areas in Ontario. In July 1980, the average cost of a house in Metro Toronto was $76,793. By July 1981, the average jumped to $103,946, an increase of more than 35 per cent in one year alone.

This government has failed to do anything about the effect of foreign capital coming in and acting as a force in driving up the price of housing and therefore driving up the total amount required for mortgages on that housing when it is purchased. The minister has even refused to investigate the inflow of foreign capital and speculative capital into the Metro Toronto housing area, where the crisis is getting worse by the day.

Even minor fluctuations caused by high interest rates in the last month are no excuse for the fact that housing has increased dramatically in cost, and this government has done nothing about it. This government has failed to do anything about the effects of speculation. It does not even want to know who the speculators are.

The Minister of Municipal Affairs and Housing (Mr. Bennett), who has his own house subsidized and therefore can live in the urban downtown area, tells others that they should live in the more modestly priced suburban areas. But even those of us who have chosen to live in Scarborough, Rexdale or Mississauga are faced with the fact that even there many average families cannot afford the new mortgage interest rates.

The lowest mortgage interest rate now available, as I mentioned, is more than 20 per cent; this means that to carry a $50,000 mortgage over 25 years on a five-year term would cost just over $10,000 a year. That is not including the cost of maintenance fees in the case of condominium owners -- and if you are quoting a home at $50,000, you are probably buying a condominium -- or indeed the cost of property taxes. Of course, most purchasers must find a mortgage for over $50,000 if they live in any urban area in Ontario. The result is an affordability crisis. An average family in Metro, with a total income of about $33,500 a year, simply cannot afford more than $10,000 a year for housing.

Let us take a look at that $50,000 home, assuming one were able to find one in an area like Toronto. If we check the multiple listing service for houses listed at that price, an average small family requiring a three-bedroom house cannot find one. Assuming a 10 per cent down payment and property taxes at a low estimate of $70 a month, an average family could only carry a $40,000 mortgage and buy a $44,000 home.

I ask the minister, who likes to tell people to go to the suburbs to find the cheaper housing accommodation, to show us how many homes are listed at $44,000 or less. Any survey of the multiple listing service would clearly show there are very few available.

I visited with a constituent the other day who experienced in very real terms what high interest rates can do to him and his family. Not only has his home come up for remortgaging, a matter that will cost him an extra $500 a month, but he also owns a furniture store where much of the inventory is purchased with borrowed dollars. If he doesn't have the furniture in the showroom, he doesn't sell. If he does stock his store, he must sell each item within two months or his profits are entirely eaten up by the high interest rates. He is getting a double whammy from the government. He gets it on the remortgaging of his home. He also gets it on his business. That is what businessmen and farmers and others are faced with across the province and across the country.

The Minister of Municipal Affairs and Housing promised to get 15,000 rental units built. So far, only 6,000 have been started. When we talk to builders, they simply tell us it is not because people don't want to buy their homes, but rather they cannot put up the huge amounts required because of soaring interest rates. Even though the province promised them interest-free loans of up to $6,000 per unit, high interest alone is the major factor for not building.

5:30 p.m.

Tenants are not only facing the problem of not being able to afford to purchase homes and enter into the home owner market, but also many of them are finding it increasingly difficult to pay high rents, which result from remortgaging a building at the time of a sale or sometimes even at the time when a second mortgage comes due.

I can give some very specific examples I have run into just recently. In the North York-Don Mills area, a 26 per cent increase resulted from a sale of $2.9 million. The existing mortgage was at eight per cent. The new or second mortgage was $2.1 million at 18.25 per cent -- a floating mortgage in April. By the time this landlord got to the rent review in August the interest rate was 20.25 per cent. Only nine per cent of the increase he was seeking could be related to increases in the costs of maintenance and other things not related directly to interest rates. The other was entirely related to his increased financing costs.

On Thursday of this week, at 9:30 in the borough of Etobicoke council chambers, I will be dealing with a case of a new building at 46 Panorama Court in Rexdale. These tenants are facing a large increase. The new mortgage adds more than $200,000 per year to the cost of that building in financing costs.

The landlord was fortunate that he happened to get his commitment for a mortgage a few months ago. If it were today, the tenants would be facing an even higher rental cost. Unfortunately, in their case the mortgage is only for one year. Unless something is done very dramatically by the federal and provincial governments, they will be facing another large rent increase next year.

In meeting with them, I told them very simply: "Under the rent review system, landlords have the ability to pass on their costs to you. I have examined the landlord's books and, quite frankly, I do not see how he is not able to justify a major portion of his costs."

That is what we are facing when we go before that rent review officer on Thursday. Sure, we will argue that perhaps his heating bill is inflated or a few things like that. But, when one considers that 60 per cent of the average amount of revenue from rent goes to financing, one can see the cost that is being passed on to tenants by the landlords. They have very little choice but to pass on their costs of refinancing or the high interest on the second mortgage when it comes due.

I can give other examples: Willowdale, a 40 per cent increase resulted because of a resale and because of the new mortgage; Yonge and Davisville, a 44 per cent increase, again because of a mortgage; Bathurst and Eglinton, a 46 per cent increase.

When I asked the Treasurer (Mr. F. S. Miller) today about the Province of Ontario Savings Office, he said it was not its responsibility to be anything more than a savings office. When that office was set up in 1922 by the last progressive government in this province, money was deposited with the savings office to be used to make low-cost improvement loans to farmers. The Alberta government does that, and it has expanded that operation to the point where $1.9 billion was available to businessmen and consumers in the last year. I wonder why this government does not show the imagination other governments have shown.

Mr. Ruston: It is really a sad situation right now, Mr. Speaker. In the Depression days, people were losing their property because they had no jobs and no money. Now there is an oversupply of money; so governments, for some reason, seem to think they should raise interest rates to discourage people from borrowing money. This has happened in the United States and, since our federal government feels they have to be lock-step with whatever happens over there, they follow the same plan.

Personally, I do not believe that is necessary, and the reason is I do not think we have to have our money tied to theirs. I do not give a damn what our money is worth compared to theirs. If we get our economic situation going right, it will take care of itself over the long run. To be locked in step with theirs is not necessary. It is a foolish policy we are going by at this time.

If we want to get down to the real reason we have inflation, it is because of governments running huge deficits. There is no other reason. I have an article -- I wish I had the time to read it all -- called "Inflation 101" in "Our Opinions" in the Detroit News of September 23, 1978. I would be glad to send one of these over to the Treasurer.

There is no reason why any layman cannot read that and understand what it is doing. What it is doing is, the government cannot borrow the money it needs from the banks when it runs a huge deficit because it would take the money away from businesses and other people who have to borrow, so it has to go to the bank, give it a note and then it can print all that new money. Until governments learn that one has to pay for things at some time, we are going to have these problems.

I suppose the present Treasurer, sitting here, says, "Ottawa has a big deficit, bigger than ours per capita." That is true. The central government probably does carry a higher deficit proportionately than any provincial government. The United States deficit is so high now that they have quit counting. They cannot even figure it out. I think it is a trillion now. No one can even add that up on the little computers we have around today. We know the cause of it, but no one seems to know what to do.

I sent a letter to Mr. MacEachen, the federal Minister of Finance, the other day. I suppose he gets so many letters that mine will end up in file 13. I suppose everyone knows what file 13 is; that means thrown in the waste-paper basket. I came out very forcefully in my letter and I am not afraid to give figures of what I think we should be heading for.

I have heard statements thrown out in Ottawa by Mr. Broadbent, the leader of the federal New Democratic Party. Everyone here who has spoken so far today has not mentioned what interest rates should be. I heard somebody say 10½ per cent. I am not sure it would be a fair interest rate if one could obtain a mortgage at 10½ per cent when one considers there are many people, many aged people, who have put money away, hoping to have some interest to live on.

With inflation at the rate it has been, many of them have been losing money. I will say the last six months have helped them more than they expected, although many of them have had their investments tied in for many years and are still not getting any advantage from this.

I told Mr. MacEachen in my letter that he should set the government bank rate at 14 per cent. Figuring that out to the rate that mortgages would be at, they would probably be somewhere in the vicinity of 14½ to 15 per cent. That is quite a jump from what some people have, but maybe our mortgage rates have not kept pace with the inflation rate, and people who have had this money and have been hoping it would keep them and give them a living during their older years are looking forward to it and need it because they were losing money on inflation. They were not getting as much as what inflation was each year. Many of them were losing money by having saved money and were not getting enough interest to cover what the loss was at the end of the year.

The bank rate should be set by Ottawa at 14 per cent. Then the prime rate would be governed by that and would be around 15½ or 16 per cent. Mortgage rates would be somewhere from 14½ to 15½ per cent. I think we could live with that if we had that in a staged program over a year or two. If inflation goes down, that definitely should go down also.

We all get up and rant and rave about what is going on, but I have not heard anybody here give any figures. I am not afraid to quote a figure. I know somebody will say, "That is too high." Maybe it is too high but at least it is 10 times better than it is today.

I can take you to many business people who have to borrow money to operate. They borrow it on a demand note and, of course, whenever the interest rate goes up that means they have to pay a higher rate. It is a sad situation. These are business people who were operating in good, sound financial situations, but when interest rates jump by 100 per cent in a matter of three or four months no businessman can protect himself under those circumstances.

5:40 p.m.

This government can and must take some action. I do not think we should wait until the federal budget comes in, If it is going to be a couple of weeks I can stand for that, but at that time if there is no action taken by the federal government throughout all of Canada then this government must take action. It has a mandate from the people of Ontario; it has a majority government, and it is its responsibility to see that the people do not lose their homes, businesses and farms.

Sure, some will overbuy; you will have the odd one. I have had a number call me, but among all those who called me there was only one who overbought. I told him, "You have overbought so much that even the Treasurer of Ontario could not help you." He was expecting that inflation would put the price of his house up, and he thought that in three years he would sell it and make $25,000 on it. Instead the house went down about $10,000, $15,000 or $20,000. He put a $20,000 down payment on it, so he is going to lose his $20,000 if he loses the house. But he did overbuy. His income was not near that. His payments for two years were about 55 per cent of his income, and nobody can do that. We did not tell him to do that; he did it on his own at 12.5 per cent interest.

That is the odd one, Mr. Speaker. But there are thousands in Ontario who need help, and need help right away. It must be done. It is the responsibility of the Treasurer and of us here in the Legislature to see that that is done, and we must do it within this month.

Hon. F. S. Miller: Mr. Speaker, the problem we are talking about today deals with a specific emotion. It deals with a specific part of a problem that affects us all whether we are borrowers or lenders. We are talking specifically, though, about those people who have had to have a mortgage on their homes today. How does it affect those of us who do not have mortgages?

First of all the price of everything we buy today is affected by the interest rates in this country, because every retailer, as a number of speakers have pointed out, has the burden of inventory costs and every manufacturer has the burden of increased borrowing costs and increased money costs for machinery, for buildings, for whatever it takes to produce the product. The people who apparently have no debt and apparently lend the money at these high rates to the banks and other lending institutions are in effect very often paying 60 or 70 per cent of that back in taxes -- very often more back in taxes than inflation leaves them. Even the lender with high rates and a 50 per cent tax bracket can end up losing money. So I think we have to recognize that it affects everyone.

But what a great luxury it is to sit in the opposition and be able to decry the incompetence, the inadequacies of those of us who sit in the treasury benches of any government, be it mine or the federal government. At least there is grudging acceptance of the fact that the problem is federal. There has to be a realization that if we put some stringent rules on Ontario's lending institutions, and some other provinces did not do it, money could move very quickly out of this province to other places, a fact that some of the speakers have tended to ignore.

Through the comments made on the other side there were a couple of consistent points. The first was hatred of the banks. I am not going to defend them. I would point out that banks probably are not lending more than 10 or 12 per cent of all the mortgage money in Canada. They have lent 23 per cent, I am told, of all the institutional mortgages. We have no idea what percentage of the total the institutional mortgages are, but perhaps half would be fair.

Second, there was a consistent statement that somehow someone could lower interest rates by the stroke of a pen or by just dashing off his signature on a piece of paper. Let me tell the House, if it could be so it would be so.

The idea that we live in an economic vacuum needs to be dispensed with; we do not. Money is one of the most portable of all assets. One can move it from one jurisdiction to another. As one speaker said, "Let it go and let the dollar drop, it does not matter to me." He would be back next week telling me about all those things that are in the food basket of the average Canadian that go up immediately because of the cost of the lower Canadian dollar.

Mr. Cooke: What about all those who have been thrown out of work?

Hon. F. S. Miller: That is another byproduct of high interest rates, the very real spectre of lack of return on invested capital; no question about it.

What I am trying to point out is that a problem that was 15 years in the making neither has quick fixes -- something we can do today and get it over with -- nor easy fixes. I do not know that high interest rates will work. They are predicated upon some certain theories of economics. They assume that the byproduct of high interest rates is unemployment. The proponents say that if there is enough unemployment there will be lower demand, and if there is lower demand, there will be lower settlements in all areas of business and therefore there will be lower inflation.

I do not know whether the pain, which we certainly have, is going to be followed by a resolution of the basic problem of inflation, but I surely hope so and I hope the members opposite would hope so too. We have been 15 years getting here and we obviously have to take serious measures to see that this problem is resolved.

I would like to point out to a couple of my friends across the House that fiscal policy is important. In fact, I began to wonder if the member for Essex North (Mr. Ruston) a few moments ago was not reciting my own admonitions to his federal finance minister. Of course, government deficits matter and governments have been one of the biggest offenders. Our federal government has to be the biggest of the bigger offenders.

The member talked about the American rate and he tried to make it look --

Interjection.

Hon. F. S. Miller: Nowhere near it. My deficit requirements this year are in the range of five per cent of my spending; theirs are in the range of 16 to 20.

Mr. Ruston: It is higher than that, Frank.

Hon. F. S. Miller: Five per cent at the present time; $1 billion out of $20 billion is my cash requirement. The federal government has had somewhere between 16 and 25 per cent.

The member referred to the American government, but he tends to forget that their cash requirements in the US are about on a par with Ontario's -- nowhere near the federal government's. We therefore said the federal government could put its house in order; in fact that was one of the fundamental first steps towards solving the problem. Another one was the confidence of Canadians and others in our long-term economic future. I think it is good, but we have had a government in Ottawa for the last few years that has totally destroyed the average Canadian's confidence in his own future.

With that, we have seen a flight of capital from this country that has affected interest rates in a way we have never seen before. Seventeen billion dollars are fleeing this year from a government that has not put the economy first. As a matter of fact, one of my friends over there said just that, and I agree with him completely, that the federal government has not put the economy first. It is time, my friends, that it did. When it does, we will have the solutions.

Mr. Cooke: Mr. Speaker, I am really surprised at what the Treasurer has just said. His Premier (Mr. Davis) goes around this province and says the federal government must lower interest rates, yet he has effectively just told us that the federal government cannot lower interest rates. What is the policy of this provincial government? Are they simply saying things about interest rates? Is the Premier simply saying things about interest rates for political consumption or is he convinced that interest rates can be lowered? What is the greatest evil? Is unemployment more of an evil or is it better to have lower interest rates and have a devalued dollar in the short run?

The Premier has heard time and time again about the problems we have in the automobile industry in this province. It would be better to have a devalued dollar and have people working than it is for them to be thrown out of work and thrown on the welfare and unemployment insurance rolls.

The Treasurer talked about the outflow of capital and there is no doubt at all that there is a lot of outflow of capital in this province and this country because of foreign ownership. It is this government that encourages more and more foreign investment in this province, rather than coming to grips with an industrial strategy of Canadianization, not only of the energy sector but of the manufacturing sector, so that we have a truly Canadian-owned and Canadian-controlled economy. Then perhaps we can set our own interest rates.

Foreign investment has a lot to do with this problem of interest rates, yet this Premier and this Treasurer refuse to recognize that. If in the short run we need to look at some currency controls in order to keep capital in this country, then again I say that type of control is much better than the unemployment, the massive interest rates and, yes, the inflation that result from 20 and 21 per cent rates and consumer loans that are 24 per cent in many instances.

5:50 p.m.

This Treasurer is afraid to criticize the banks, and that does not surprise any of us in this party. But he knows that the bank profits in this province and this country are up 46.5 per cent compared with 1980 for the first half. In the trust and loan companies, they are up 58.6 per cent. While the provincial Treasurer talks about the tax rates the banks pay, the fact is that the effective tax rate they pay, after all the loopholes they can take advantage of, is only 15.3 per cent. It is lower than corporation taxes; it is certainly lower than personal taxes.

It seems to me another short-term solution we should be looking at is an excess profits tax on banks and trust companies in order to make some of that money available. If we have to look at a subsidy, then that is where the money could come from. That suggestion was put forward by my leader in the spring.

Car sales and the demand for other consumer goods have dropped dramatically this year because of the interest rate problem. For the first eight months of this year, General Motors sales in Canada are down 14.6 per cent; Ford is down 5.5 per cent; Chrysler is down 10.9 per cent; AMC is down 21.1 per cent. As a result, literally thousands of auto workers in the parts sector are unemployed. I visited Chatham a few weeks ago and found the extreme problems they have in that area, even though the member for Chatham-Kent (Mr. Watson) never talks about them down here.

Large numbers of auto workers are unemployed, and a large number of home owners in the Chatham area have lost their homes. In St. Thomas, a car plant that has been retooled for small sports coupe cars by the Ford Motor Company has been closed down since mid-August and is not looking at resuming production until at least mid-November. Again, that is the result of a decrease in demand and the extremely high interest rates that have affected consumer loans.

Just a week ago I wrote a letter to the provincial Treasurer about statistics that became available to me through a real estate company in Windsor about a number of people who have lost their homes in the Windsor-Essex area. I have not seen these kinds of statistics for the province as a whole; none the less, they are available in our area. The figures were devastating to say the least.

Mr. Fred Mitchell from Bob Pedler Real Estate Limited indicated to me that 250 homes right now are on the market that have been repossessed in our area, and that another 250 to 375 of those homes have already been repossessed and are being held off the market because the market is already so saturated with houses for sale. In the Essex county area alone, there are something like 3,500 homes available for sale now, and in the month of September just over 100 of those were sold.

We are finding that all across the Essex county area, and I assume all across the province, people are not bothering with the procedure of having to go to court to get a writ of possession. They are simply going to the banks or the mortgage companies and saying, "Here are my keys; I cannot afford to keep my home." That is happening in many instances. What really upsets me with what is happening is that the banks have repossessed these homes, and they are putting them back on the market at three and four per cent below the mortgage rates. In Windsor, they are putting them back on the market at 17 and 18 per cent. So they repossess them at 21 per cent, and they put them back on the market at 17 and 18 per cent to try to get rid of them. That to me shows a total lack of compassion.

If the Treasurer wonders why we express anger on this side of the House towards the banks in this country, it is very obvious why; because they do not have any compassion. Their profits are up significantly and they will not negotiate with the home owners. They simply move in, as this real estate agent said, often without a letter, without a phone call, and just take whatever legal action has to be taken and tell people that they have lost their homes.

A young woman called me the other day at my home and indicated her mortgage was coming up for renewal. She has first and second mortgages. Her payments are going, if I remember, from $250 a month on the first mortgage and $100 a month on the second mortgage to something in the neighbourhood of a total of $600 a month plus municipal taxes. She is a single-parent mother attempting to do her best to provide for her family. She works; she gets $182 take-home pay per week.

She went to Canada Mortgage and Housing Corporation to talk to them about the problem and they were very nice. They said to her:

"Your mortgage comes up for renewal at the beginning of December. Do not worry about it. We will not take legal action until January." So instead of being kicked out of her house at the beginning of winter, she will be kicked out in the middle of winter.

These problems, and the ramifications of high interest rates, are incredible. I think this government has been gutless in its approach with the federal government. It criticizes the federal government because federal-bashing is popular. I certainly do not agree with Mr. MacEachen and his policies. I do not believe that high interest rates are the way to fight inflation, but this government has not put one clear proposal forward as to what it expects from the federal government.

The Premier and the Treasurer can go around this province and this country criticizing all they want, but this happens to be the province that is the most populous. This is supposed to be a have province, even though things have been declining considerably over the last decade; the Premier and the Treasurer have the responsibility to be very clear as to what they expect the federal government to do.

We have indicated what we expect on this side of the House, in this party, as has my federal leader, Mr. Broadbent, indicated what he expects. Now it is time for this government, on behalf of the people of Ontario, to express its views on the direction it would like the federal government to go in.

I would just like to finish up by saying we had a meeting yesterday in Windsor with the three federal cabinet ministers, Mr. MacGuigan, Mr. Gray and Mr. Whelan. I was certainly happy to see that Mr. Whelan had indicated he was willing to resign from the federal cabinet if appropriate action was not taken for the farmers of this province. I can indicate that Local 444 of the United Auto Workers and I tried to convince Mr. MacGuigan and Mr. Gray that they should have the guts to do the same thing, because it was Mr. Gray who said on the Morty Shulman show in February 1980 --

Mr. Nixon: I remember it well.

Mr. Cooke: Yes, I remember it well too. What he said was that if a federal Liberal government did not lower interest rates, and he was part of that government, he would quit that cabinet. That was when the prime interest rate was 15.5 per cent. Now the prime rate is close to 20 per cent and has been over 20 per cent.

We need some leadership from the federal cabinet but we also need some guts and leadership from this government, leadership that we have not seen to date.

The Deputy Speaker: The time has expired for this debate.

BUSINESS OF THE HOUSE

Hon. Mr. Wells: Mr. Speaker, in view of the fact that this debate has gone on this afternoon, I would like to suggest that we proceed at eight o'clock tonight with, first, the second reading, and committee of the whole if required, of the eighteenth order, An Act to amend the Ministry of Community and Social Services Act, followed by Bill 47, The IDEA Corporation Act, followed by Bill 22 and then Bill 6. We will leave the Livestock Community Sales Act, Bill 100, to be considered first thing on Friday morning, before the legislation that I had mentioned before.

The Deputy Speaker: I trust there is agreement from the House.

NOTICE OF DISSATISFACTION

The Deputy Speaker: Just prior to the dinner break, I would like to bring to the House's attention that, pursuant to standing order 28, the member for Nickel Belt (Mr. Laughren) had given notice of his dissatisfaction with the answer to his question given by the Minister of to the Minister of the Environment (Mr. Norton).

Since that time it has been indicated that the Minister of the Environment will not be available this evening. This member for Nickel Belt has been told that. He is in agreement that at the first opportunity, at 10:30 on the appropriate evening, his particular concerns will be expressed to the Minister of the Environment.

The House recessed at 6 p.m.