INFLATION RESTRAINT ACT (continued)
The House resumed at 8 p.m.
INFLATION RESTRAINT ACT (CONTINUED)
Resuming the debate on the motion for second reading of Bill 179, An Act respecting the Restraint of Compensation in the Public Sector of Ontario and the Monitoring of Inflationary Conditions in the Economy of the Province.
The Deputy Speaker: The member for Riverdale had the floor.
Mr. Renwick: Mr. Speaker, it is with some great pleasure that I yield the floor to the Minister of Colleges and Universities.
The Deputy Speaker: My mistake. The honourable minister.
Hon. Miss Stephenson: Mr. Speaker, it is with some pleasure that I rise to participate in this debate on Bill 179. I first would like to congratulate the member for Riverdale, who has demonstrated in the past two days that his recovery from the vascular difficulty with his coronary arteries is obviously complete. Anyone who can manage to exude that amount of air for that period of time has to be in excellent physical condition. I should like to congratulate him.
Mr. R. F. Johnston: Try to be as succinct as he was.
Hon. Miss Stephenson: Succinct? That was succinct? Oh, well, the member's definition is somewhat different from mine.
I have listened with some interest to a good deal of the debate, and I use that word advisedly, on Bill 179 over the past several days. From the content that has been delivered, one would have to judge that some members of the opposition have been contributing from a point of view that is either deliberately obfuscating or based on abject nescience.
There is no doubt about the fact that the wisdom of the world does not reside totally within Queen's Park. I have been the first to make that statement, and I will probably continue to make it from time to time as well, although I may be the last to make it. But from the contributions provided by certain members of the opposition, it is completely clear that the expertise necessary to judge whether there has been good financial management in this province is sadly lacking.
I refer members to an interesting article which appeared in the Montreal Gazette during July 1982, in which the financial editor of that meritorious newspaper strongly suggested that the reason Ontario could survive in these difficult days was that it had been well managed, unlike its sister province.
In the Toronto Star of July 30, there was a report by Eric Starkman of its financial department which reported cleanly and clearly that Moody's Investors Service had again given this province a triple-A rating based on the fact that this rating is the highest and unqualified endorsement of the province's financial health and stability as a result of good management.
On September 20 in the Toronto Star the editorial staff of the business and administration area reported that the Canadian Bond Rating Service had given Ontario's debentures a triple-A low rating in its first evaluation of the province's economy. It stated that "Ontario's financial management is 'excellent,' and the province has 'a good record of forecasting its revenues and its expenditures.'"
But I remind members that it went on to say that "a disturbing financial trend is that Ontario will receive lower transfer payments" this year from the federal government, "which are mainly used to finance health, university and college expenditures." And it expressed its concern about the future of Ontario based on the unilateral actions of the federal government of this country.
I should like to state to my honourable friends that in most newspapers the most important news of the day is on the front page. There is one small item I noticed a little while ago; it appeared on the front page of the Globe and Mail, which is certainly an all-important area because it was on that front page, although it was under the heading 'Your Morning Smile." I should like to quote it: "This morning opportunity knocked at my door. But by the time I pushed back the bolt, turned the two locks, unhooked the chain and shut off the burglar alarm it was gone."
Mr. Wildman: You sound hoarse. Are you hoarse?
Hon. Miss Stephenson: Very. I have had a very bad cold. Thank you for remarking about my health.
Mr. Cooke: You should see a doctor -- an opted-out one.
Hon. Miss Stephenson: Just as good as any other.
I believe that the restraint package before this House is a point of opportunity for Ontario and its people, and the government of this province after very thoughtful consideration has chosen to seize that opportunity.
Ontario's five per cent initiative, I remind members, is a much more equitable package than the federal government's six and five program, which is indeed an illusion, and has more significance than just the numbers involved. It is a signal to the citizens of this province -- in fact, to all of us -- that we have been living a little bit too high on our expectations. We have all been guilty of taking out of the economy more than we have been putting in. That is a fact, and each one of us in this House knows it in his individual heart to be true.
I cannot think of any area in our society that has been buffeted quite as severely by the effect of high expectations as the education system. In many instances even the schools have been asked to take on responsibilities that others traditionally had assumed but now have abdicated. I believe that in this province and this country we have to rediscover our responsibilities, and in so doing we may very well have to re-evaluate our self-interests and expectations, which very frequently are quite unrealistic, in an effort to bring about a greater sense of the whole of this society. There is no doubt that this is going to involve some sacrifice.
Now, from whom was this contribution?
Mr. R. F. Johnston: The member for Riverdale.
Hon. Miss Stephenson: Thank you very much, member for Riverdale.
Mr. Riddell: Take a bottle of Tylenol.
Hon. Miss Stephenson: And Visine to you, too.
8:10 p.m.
Mr. Speaker, there is no doubt that this will involve some sacrifice on the part of all of us. It will mean restraint in income, and in education it will mean temporary suspension of sanctions to ensure a degree of stability during the one-year life of the program. It will also be a time for us to catch our breath, to reflect upon the future as well as on the past and the present and to move towards combating inflation, which has been a virulent attack on our spiritual and physical wellbeing over the past decade.
There is no doubt at all that there are those in our society who will continue to disagree with the program; they will still want to take out more than they are willing to contribute. We have witnessed their disagreement and we read their thoughts; we see them on placards, in advertisements and on tee-shirts. It is my belief, however, that those who lead the fight against this government's restraint package should take a little time now and then to look over their shoulders, because I believe they will perceive an ever-diminishing following.
It became very clear in recent weeks that action had to be taken in the interests of the public of this province and this country. I believe the government's restraint initiatives address this urgent reality. In my view, the people of this province, including those in the public service, have demonstrated a strong willingness to work together to achieve the objectives of the restraint program.
It may be of some small interest to report that as of late last Friday afternoon, the government had received 1,400 telephone calls related to the restraint program. I should say as an aside that in any average week, the two ministries for which I have responsibility receive about 2,000 telephone calls of public inquiry.
The point is that there is a wide acceptance of Bill 179, which is before this House. I might add that of the 1,400 telephone calls received on the restraint program, 400 were made on the day immediately after the announcement and the majority of the calls related to education came from those seeking clarification on how the program would affect teachers and trustees.
As all members of the House know by this time, the salaries of public servants, including teachers, will be limited to a five per cent tunnel for one year. Those whose contracts expired between October 1, 1981, and September 30, 1982, will have their contracts extended for one year and the increase will be limited to up to nine per cent. Once that expires, the contracts will come under the one-year, five per cent program.
The five per cent ceiling applies only to matters of compensation and in no way inhibits the possibility and the reality of bargaining between teachers and school boards on all other issues, including those related to working conditions, parent-teacher activities, curriculum and the structure and distribution of teachers. In addition, this applies to the teaching and support staffs within the community college system in this province and to the universities.
The restraint on compensation imposed by Bill 179 will affect the remuneration set by school trustees. As members will recall, only very recently in Bill 46 the Education Act was amended to give school trustees almost precisely the same rights as those enjoyed by members of municipal councils and other elected representatives in establishing their own level of remuneration.
As most members know, before that amendment the maximum allowance for trustees of our largest school boards was $7,200 a year, with an additional allowance of up to one half of that amount for the chairman of the school board. I remind members that this schedule had not been changed since the passing of the Education Act in 1974.
In recent weeks, however, I am sure every member of the House has had an opportunity to read about some of the increases that have been decided upon by certain members of school boards since the amendment of the Education Act. The trustees established these increases in the past few weeks because the Education Act amendment provided that the outgoing board must determine the remuneration for the incoming board and for the entire term of that incoming board.
Some increases have been set by trustees by resolution. Some of them have been up to the level of 140 per cent. They have been large, there is no doubt about that, but I am pleased to report as well that some boards decided upon no increases at all, and some upon very modest increases.
All trustees will come under the influence of Bill 179, and the limit for their increases for the period beginning December 1, 1982, which is the first date that Bill 46 could have come into effect, may be up to the five per cent ceiling. It may also be less than that.
Trustees, however, should take whatever action they decide is appropriate before the November 8 municipal elections. That resolution, which they must pass, should incorporate and state the level of remuneration for the succeeding years, and that information must be made available to the public for their consideration so that trustees can be held accountable for the raises they vote for the incoming board of education.
I remind members that the new board elected as of November 8, 1982, will be able to do one of two things. It will be able to uphold the resolution of the past board, announced well before the November 8 election, or it will be able to reduce that amount. I believe it is up to every elector to determine the position of each of the trustees in the board areas for which they have some responsibility so that the elector may support a trustee who best represents the fiscal position which that elector feels is appropriate.
Turning to tuition fees, the Premier (Mr. Davis) has announced that the increase for Canadian students for the next academic year, 1983-84, will be limited to five per cent. In the past the Ontario student assistance plan has been improved to accommodate the tuition fee increase for eligible students, and I fully expect that this practice will continue this year.
I anticipate that the transfer payments to boards of education, community colleges and universities will be announced in the usual way at the usual time. I do not have information at this time on what those levels will be.
As I said earlier, I believe the government's restraint program is a positive opportunity for the people of Ontario to work together in a co-operative and anticipatory way to meet the demands of times, which are exceedingly difficult. There are very few members of this House, with the exception of the member for Stormont-Dundas-Glengarry (Mr. Villeneuve), the member for Essex North (Mr. Ruston) and perhaps the member for Riverdale (Mr. Renwick) and myself, who recall the difficult times of the late 1920s and early 1930s. I do recall them, and I do not want to see this country sink into the morass that encompassed and involved all Canadians at that time.
In spite of the totally inappropriate interjections of the opposition, this bill is designed to remove us from that kind of possibility. Whether the opposition does so or not, I have faced the fact that all Ontarians can work together in a nonpartisan way to bring about a more stable and more secure future not only for ourselves but also for our children and our grandchildren. That is what I believe each one of us must set about to do today and in the future.
8:20 p.m.
Mr. McGuigan: Mr. Speaker, this is the second time in my five years in this chamber that the Premier (Mr. Davis) has called the Legislature to a special session. The first was to bring a halt to the Toronto transit strike. This special session has a far more formidable task before it: to try to do whatever Ontario can and must do to adjust to the worldwide economic recession and to halt the slide into an economic catastrophe.
Already economists and political figures from every quarter have described the situation as the worst that has faced us in 50 years. Perhaps our efforts will be in vain. I remind the honourable members that history is not on our side.
Mr. Wildman: It is on our side.
Mr. McGuigan: Perhaps so. I will think more about that later.
Quite predictably, depression has visited the world economy every 50 years: in 1929, 1879, 1829 and earlier. Our current downturn had its beginnings in 1979, and it would appear it has not yet hit bottom. Perhaps Ontario's share of the world's economy is too small to have any impact. Perhaps the Premier has moved too late, too carefully, too deliberately, too politically and too long after the polls indicated public support for a restraint program.
As small, late and feeble as this government's reaction has been, when the economy has crashed and then slowly recovered or become manageable, when the downturn has slowed and recovery is taking hold, surely the people of Ontario deserve the right to look back and say, "Well, at the very least the people we elected, the people we entrusted with our votes and confidence in 1981, when the dark clouds were just appearing on the horizon, that government did something."
We are told that wars are not won by generals who make the perfect move but by generals who make some move. I can understand the Premier's hesitation and reluctance to move. He and his ministers have endeavoured to project an impression of good management through almost 40 years of unprecedented expansion in population and scientific advances, resource exploitation and real rises in income, at least until the 1970s.
The Premier has claimed credit for these advances. Understandably, he does not want to claim credit for our reverses by admitting that the government can do anything about the present malaise. How tempting it has been to sit back and blame all the troubles on Ottawa. Fortunately the opposition, led by the member for London Centre (Mr. Peterson), forced the government to act and we are here today to deal with the problem. He forced the government to act by picking up a program that we advanced.
Some three years ago, I and the member for Huron-Middlesex (Mr. Riddell) attended a memorial lecture at the University of Guelph in honour of Professor McLean, one of the very honoured professors at that university. The speaker, a noted United States economist, entitled his lecture, "The Great Hamburger Society." It seems a rather strange title, but he was addressing the changes in the US and Canadian meat trade and the economy of the North American continent over the past 30 years. He described how the Great Depression of the 1930s was triggered by unregulated, wild speculation in the stock and real estate markets, people buying worthless paper on 10 per cent margins and reaping tremendous profits, until finally margins were called and the whole bubble burst and we had the crash of 1929.
He said we would see the same in the 1980s -- and I hoped he was talking about the late 1980s; I did not realize it was that close -- but for a different reason: the inability of governments and individuals to service their debts. He said to pay off the debt of the US government would take the entire income of the US population, allowing not a dime for consumption, for a period of three years. Of course, that was an academic exercise, but it illustrates the magnitude of the job.
What are the choices facing us as a province and as a country? We can let the economy take its course, sit back as we have been doing and do nothing. We can let individuals and companies go bankrupt, thus eliminating their debts. That simple solution was allowed to run its course in the 1930s. We must give some credit to Franklin Roosevelt and Lord Keynes for trying to correct the situation with the Reconstruction Finance Corp. spending. It helped. Nevertheless, the bare truth of it is that US unemployment was in the millions up until the Second World War. It took the huge demands of the world for US arms to finally bring about recovery.
Mr. Wildman: Is that what you are saying, that we need a good war?
Mr. McGuigan: No. There are people calling for similar actions in spending today. Both the federal and provincial governments are moving in this direction, but it is not enough now, as it was not enough in the 1930s. Thank God, so far the world has rejected a third world war as a way to recovery.
We could reflate the economy once again. We could try one more round of hyperinflation, as the Mexicans, the Argentinians and many other failed economies have tried. We could set the money presses in motion to destroy the value of our present savings and whatever faith is left in our monetary system. Most thinking people reject that notion. We could adopt Reaganomics, destroy our social programs, put our people to work in the arms race and, while bowing to the gods of restraint, run up even greater deficits.
Interjections.
The Deputy Speaker: Order. Someone is asleep at the mike. From time to time we have difficulties in the public galleries. It would be nice if we did not have difficulties in the chamber.
Mr. McGuigan: While on that point, Mr. Speaker, I might remind my friends to the left that when they target my riding and send their speakers into my riding, it is no problem for me to deal with that when I pull out sections of Hansard and see how much respect they give to people who speak from an agricultural point of view.
Mr. Wildman: Mr. Speaker, on a point of order: It was my understanding that the Speaker was calling the Tory benches to order, not the NDP benches.
Mr. McGuigan: There is another option, an untried and unknown route: to seek a consensus among Canadians and Ontarians to adopt a plan that at least offers to rational thinkers a chance of spreading the burden, of stabilizing the economy, of offering some hope of returning to an economic climate in which people can plan and invest in Canada and take part in a great experiment -- and, of course, it is a great experiment.
The early part of this century saw the capitalist system in place. It worked for two or three decades until it resulted in a concentration of power that threatened the entire system. In the next 50 years there was a splitting of power between government, industry, unions, farm marketing boards and professional associations that worked quite well.
8:30 p.m.
Today, each one of these groups seems to have conquered its particular field; to different degrees, of course, and I would not expect everybody would agree, but at least they have conquered the worst problems they faced and now the body is at war with itself.
Farm marketing boards have squeezed most of the inefficiencies out of the marketing system. I suppose I will not get much agreement on this, but unions have squeezed most of the exploitive elements from the work force, though certainly not all. As time goes on, our view of exploitation keeps changing. I hope it always does keep changing and moving forward.
Governments have squeezed all of the taxes they dare to and professional organizations have perhaps squeezed more than their share from all of us. Industry has the balance sheets to show that it is being squeezed to death. I submit the only people left to squeeze are those who are unorganized, those on fixed incomes, the people who are unemployed and those on welfare. If present trends continue, these people will be squeezed right out of the picture.
It is recognized by a great many thinking people that the time has come when we need a national consensus, not based on political affiliation or party but on a recognition of our problems, to try to work our way out of the situation and at the same time to try to save everyone in the process. I trust it will save everyone. Certainly we in Canada reject the notions from the United States where the poor and the defenceless are asked to carry the burdens. We have a different type of society in Canada and we should preserve it.
I might just mention a trip I made to the state of Arkansas about four years ago. A group of us from Kent county were touring waste handling plants and there was one in Arkansas. We stayed at the Holiday Inn in Little Rock -- the rather infamous place --
Mr. Renwick: How do you distinguish that Holiday Inn from the Holiday Inn in Orillia?
Mr. McGuigan: I have never been in Orillia. That is Stephen Leacock's birthplace; it is famous for that.
At six or seven o'clock in the morning, the temperature outside was already in the 90s. The window of my room happened to look out on the backyard and there were several of those big dustbins that commercial companies use to take away their waste.
From my nice air-conditioned room, I looked out upon a pickup truck in which two ladies drove up. The younger of the ladies scrambled into the dustbin and started throwing out the cardboard cartons. The older lady, and she was quite an old lady, took these cartons, disassembled them, stamped on them and put them in the truck.
I would not say that work is undignified. I think all work is dignified. I have done some pretty dirty jobs myself in the way of labour. Nevertheless, it struck me then -- that was three or four years ago -- that was a hell of a way to run a country, in that the people of that economic bracket had to make their living out of the dustbins, I really reject that, as would every one of us here.
Our leader, the member for London Centre (Mr. Peterson), sees the possibilities and he has been called naïve. The people who do the calling are seeing their way failing. Their way is failing but, like the generals of the First World War, they are calling for one more massive charge. Such tactics sacrificed up to 100,000 men at a time.
Mr. Wildman: We are going to sacrifice 500,000.
Mr. McGuigan: Well, that is five charges. It was only at the last great battle, I remind the members, that the Allied generals changed their tactics: they retreated, they let the enemy advance into the mud of no man's land and then they defeated them.
These people say: "Well, that is naïve. Keep asking for one more charge." I say we need to retreat, every one of us; to reduce our demands and become cost competitive in world markets, to set aside more of our national income to service our debts, to invest in the future and ensure the continuance not only of our individual wellbeing but also the wellbeing of the country.
All we lack is the national will to carry out such a program. We do not lack the brains or the civility. In spite of the rhetoric that each group by force of habit keeps spewing out, we in Canada are among the most civil people in the western world. We have regional tensions, we have regional disparities, but we are trying to overcome them and we are doing so with some success.
Our Charter of Rights and Freedoms has already struck a blow for civility in education. If we in Ontario reciprocate, these tensions can be reduced, in spite of the rhetoric from Robert White, a very astute labour politician -- and I expect he is a very astute man -- who has had forced on him the new realities of the marketplace; and in spite of political differences the Premier and Trudeau can co-operate, as they have demonstrated in the past.
If we fail it will be because of false pride, political self-interest and individual self-interest; and if we fail we will deserve the consequences that will follow.
Most people agree that inflation is the problem and the results are economic robbery of the savings of the elderly and economic corruption of the youths. Inflation destroys the savings of the elder members of society and encourages profligate spending by the young on the assumption that they can pay back their debts with cheap dollars. Thousands of young people have already faced the fallacy of that assumption. They have lost their homes, they have lost their automobiles and their furniture and, more important, they have lost their self-respect.
Many of these people will never make up for their losses. They have been given a setback both economically and psychologically that will be difficult to overcome. Older people who have retired on what appeared to be adequate incomes find that their dollars are buying less and they cannot live on their own resources.
I wonder if all of us in this chamber have really thought out the simple process of inflation. Have we thought out that if one borrows $100 and pays it back at the end of a year in which inflation has advanced at a 12 per cent rate, the $100 returned to the lender has a purchasing value of only $88? To be fair to the lender, one has to add another $12, and one is then paying back only the purchasing value of $100.
To pay an economic rent for the use of the money, one has to add another $3 to $4. The inflation rate of 12 per cent therefore generates an interest rate of 15 to 16 per cent. But such an interest rate becomes a huge burden on borrowers to invest in the plants and inventories that supply our jobs and our needs.
If I could just digress, a few days ago I visited a plant in my riding that makes windows. This plant was actually very busy, very active. I could not really get an explanation of why so many windows were being ordered, but they had actually put on extra shifts to cover the demand for the windows.
They said that part of the problem when the spring came and the demand for these windows appeared was that they had a low inventory, brought about, of course, by the high cost of maintaining inventory with money that would cost them 18 to 20 per cent.
They then put on the extra people and they ordered supplies from their suppliers, from aluminum companies, plastic companies and glass companies, and they found some of these people did not have inventories because they too had misjudged the market or perhaps were unable to even carry that inventory.
8:40 p.m.
The system feeds on itself until it reaches a saturation point, such as now, and the whole system is threatened. It stops the megaprojects. It is easy to toss around huge numbers but some of the figures that we have been seeing of projects on the shelves from now till the end of this century run as high as $400 billion.
Actually we will need the products of these megaprojects in the oil and petroleum field to carry our economy into the next century. Because of the front-end costs, the tremendous amount of money that is required to be put up to build such plants, and because of the high interest rates, most of these megaprojects are stopped.
Mr. Speaker, I thank you for your note about Bill 179. I have now mentioned Bill 179.
It is not fair to pick out one segment of society for restraint; namely, the public service sector.
Mr. Wildman: Is that what you mean?
Mr. McGuigan: Yes. It is not fair to pick out one group. We in this party can support at least the concept of the present bill, because we hope to add several amendments to it to change it to make it more fair.
We can read the figures. Farm income is down 23 per cent. Industry profits are down by 60 per cent. There are plant closures on every hand. The unemployment roll is being swelled by 10,000 to 12,000 people a month.
I believe the system is running down. I know if there is a time lag in operations, when it catches up in six months -- or in a year, but likely in six months -- the restrained public employees will themselves agree that they are now in a favoured position. I see these forces at work in my riding, on both the agricultural economy and in the industrial sector.
I would just ask, as a rhetorical question, what brings about good times? The answer is population growth. As all of us know, there is not a very great population growth in Canada at the present time.
New discoveries, new scientific developments would bring about new products, but unfortunately the products we are discovering and working on now seem to be taking jobs away from people. I hate to admit to any tendencies towards being a Luddite, but I really believe we have passed a watershed and many of the machines we are now bringing in are destroying rather than making jobs, as they always have in the past.
National projects, such as railroads, city building and canal building in the past have provided the engine for good times. We have, as I mentioned, megaprojects. but we cannot go ahead with those now because we cannot finance them.
I would like to give a bit of the agricultural background of my riding and why we find ourselves in such difficult straits today. In 1972, only 10 years ago, the USSR decided to enter the world grain market. Prior to that time, they met recurring grain shortages by slaughtering their livestock, followed by several years of low-meat diets for the people. Gradually, as grain stocks recovered, they would increase their livestock production.
The people in the USSR accepted such deprivation under the iron rule of their government. The result was that when they went into the market in 1972 they decided that because of a change in policy they would no longer slaughter the livestock.
A result of this was that wheat went from $1.65 to $5 a bushel and all surpluses disappeared. The next step was that the US government put into production some 60 million acres of land that were held in the land bank program and it meant fence-to-fence planting in the grain belts of not only the USA but also of Canada, Australia, the Argentine and in countries such as India. It will probably surprise many of us to realize that today India is either self-sufficient or very close to being self-sufficient in grain production.
The new prices encouraged grain production throughout the world, but in 1973, when prices ran as high as $12 a bushel for soybeans, the US government put an embargo on exports in order to guard their domestic economy. Again, in 1979, under the Carter administration, they put an embargo on grain as a result of the USSR invasion of Afghanistan.
I think most of us in this chamber sympathized with that move. But the USSR decided that the US was an unreliable supplier so they have increased their investment in any country that is willing to supply grain to them. They are receiving grains from those countries at the present moment.
It is ironic for us, with this huge crop of grain we have, to realize that the Russians actually need somewhere between 40 million and 70 million tons of grain. They have a short crop. They need our grain. But astute traders that they are, buying through one office they are manipulating the world grain trade -- and I suppose looking at their side of it, one could not blame them because they feel aggrieved by the actions of their suppliers -- they are going to wait until the grain prices are driven down as low as possible and we expect that they will then gradually come back on the market. In the meantime, many of our farmers will be bankrupt.
A result of this bit of history was that farm investment skyrocketed, land and equipment prices soared. But now the second event, the creation of surpluses of grain, brought about a 20 per cent increase in corn prices since 1973, and 150 per cent increase in tractor prices for the last year.
With a prospect of an 8.3 billion bushel corn crop in the USA, Ontario prices, after drying charges are deducted, are in the area of $2 a bushel versus the cost of production, a figure produced by the Ministry of Agriculture and Food, of $3.78 per bushel.
Some producers who have yields greater than average would have somewhat lower production costs. But in no event can one see a return on labour. This means that such farmers are not looking at a 50 per cent reduction in a possible 1983 increase in salary; they are looking at a salary of zero in labour income.
Mr. Wildman: That's right, but what does this bill do about that?
Mr. Speaker: Never mind the interjections please.
Mr. McGuigan: In addition, many will also have a zero and perhaps even a negative investment income. As an example, one of the ag reps in a part of the two counties I represent told me he was reviewing the case of one of the young farmers for whom he had done a farm adjustment this last spring.
I must tell members this was in the eastern part of the riding which received excessive rains this year, just a reverse of the water pattern in 1981. He said that one young farmer could expect losses of $260 per acre even though he had followed all of the management practices recommended by his office. This, no doubt, is an extreme case partly caused by bad weather, but price made a bad situation worse.
The agriculture representative last spring figured corn at $3 per bushel and soybeans at $7 per bushel. The reality today is $2 for corn and approximately $5.50 for soybeans, and they have not yet seen the harvest low prices.
8:50 p.m.
The federal people are predicting a 23 per cent drop in farm income. It could be greater because last year I would guess that farmers unloaded inventory they may have been carrying over from previous years for tax-saving purposes. Such a cushion is probably not available this year.
Farmers who have contracts for specialty crops such as tomatoes, peppers, cucumbers and tobacco, and who hold their livestock quotas, will fare better. But these people are a relatively small proportion of the farm numbers in 1982.
The effects are hitting other people. Farm implement people are hard hit. Many in the farm machinery industry feel that farmers will soon be back in the market. For the sake of members from Brantford and other areas, I hope they are right. But the fact is that we farmers are very well equipped today. Tractors that cost $30,000 to $75,000 and combines that cost $50,000 to $150,000 are well built and last for years.
The capacity of these machines is such that they are used very few hours a year. A neighbour of mine who farms 1,600 acres puts in only 300 hours a year on his big four-wheel-drive tractor. When that machine is 10 years old it will just be in its prime.
There are farm tractors in Ontario from a former age that have been in use for thousands of hours. I have two, built in the 1940s. I have them for a special purpose but they still run. Our meters have frozen up and locked, but I would estimate they would have to be around 10,000 hours.
Mr. McKessock: Do you have your own museum?
Mr. McGuigan: I really have, yes. You must come down and see it.
For the farmers to come back into the market two things must happen. Corn prices would have to double. The chances of this happening are unfortunately dim. The arms race currently devours $1 million a minute around the world. I was astounded when I read that figure but I took the time to work it out. It comes to something like $500 billion a year. That is a little over $1 million a minute.
The low price of gold, around $500 per ounce in Canada compared to $800 per ounce in the heady days of Russian purchases in the early 1970s, practically guarantees low grain prices. Russia pays for grain with gold and many people suspect the gold is mined, at the worst by slave labour and at best by people directed to work in the mines.
The other requirement, of course, is lower interest rates. This government, of course, realizes that the economy is winding down and the government delayed getting into the program until it was certain that inflation was already declining. They then decided that it was safe to follow and then claim credit for the success of the program.
It reminds me of a personal incident. In the orchard business we are bothered by starlings. One of the ways we used to get rid of them was with a good old shotgun. I got fairly proficient at shooting them on the ground so I decided to try my hand on the wing. I had very little success. I seldom, if ever, hit one.
Finally, one day, a pair of birds were crossing my line of sight. I thought I took a pretty good lead on the head bird, perhaps 20 feet. I pulled the trigger. To my amazement, the second bird fell. The second bird was trailing the first by 20 or 30 feet.
I believe this government takes aim at the tail bird and hits the lead bird. If they follow their usual practice, they will present weak legislation that is easy to apply to the public sector but largely ignores the business world. Monitoring shows concern, but not monitoring without action; and as we know from past experience, inaction is the hallmark of this government.
I want to give a couple of examples that people in my riding know very well. Some time in the late 1960s, a grain company went bankrupt in Kent county and farmers were not paid for the grain they delivered, so the government brought in the Grain Elevator Storage Act, which provides for two inspectors for all the grain elevators in Ontario. These have been expanding at a rapid rate as grain production has expanded easterly in Ontario.
The act provides that a storage receipt be issued when grain is delivered, or that a warehouse receipt be exchanged for a storage receipt within a short time. The act further says that at all times the operator must have on hand, in his own or in a terminal elevator, grain sufficient to cover the storage receipts.
This created a problem. In order to have grain to offer to the grain trade at times when farmers were not selling their receipts, the grain operators had the farmer sign a deferred contract, which meant the farmer was paid on the basis of the Chicago price related back to Chatham. or at prices related to the Chatham track price at the time the contract was closed out.
The legal reality was that the ownership of the grain passed to the elevators when the contract was signed and the Grain Elevator Storage Act ceased to protect the farmers at that point, but, unfortunately, many farmers felt they were protected.
In any event, the protection consists only of punitive action against the elevator operator. There was never any money protection. All that could ever be done under the act was to put the fellow in jail. Farmers who had grain in the Tilbury Farmers' Co-operative are still counting their losses, and the act is virtually worthless.
I understand the government now has some changes pending to the act, but following their practice of not fixing something if it is not broken, this government waits until a few people are broken and then it uses their agony to justify the change. They rush in as heroes and fix something they have knowingly overlooked. This is a total abdication of their expected role, which is to provide leadership to the people of Ontario.
Mr. Ruston: Same as the livestock protection.
Mr. McGuigan: That is my next subject. The Farm Products Payments Act is another case in point. Owing to bankruptcies in the meat packing and canning industries which devastated some producers, they brought in this act in 1975. It provided up to $250,000 in seed money for insurance funds that would take over in cases of bankruptcy, but gave enabling authority for marketing boards and producer groups to request that a deduction be made from all or certain classes of marketing to build up a fund deemed to be sufficient for the purpose.
Naturally, farmers divided into two camps. Those who were fortunate enough to sell directly to, say, Heinz or Libby and other large processors, felt they were at no risk so did not want to take deductions to pay for other growers who might be at risk. Similarly, livestock producers who sold directly to such large packing plants as Canada Packers felt no need to subsidize their neighbours who sold to more risky accounts. So no action was taken and the legislation remains a cruel farce. It is the old shell game of now you see it and now you don't.
When the McIntyre sales yard collapsed, forcing the collapse of an assembly yard in my riding, the minister moved quickly to implement the act. He did not wait for a consensus to develop. He did not hold a referendum. He simply brought in the act and made it active, but not until one of my constituents lost $60,000. My colleague the member for Essex North (Mr. Ruston) had a producer constituent who lost $160,000.
In my constituency there is a long-time beef farmer who is at present in the process of phasing himself out of farming and turning his interest over to his son. Imagine the terrible setback to this operation. Most of that $60,000 is capital, but even if $50,000 was capital and not subject to tax, one can calculate that the loss has imposed an annual cost to that business of $8,000, in interest cost at the most favourable rates today. It may well prove more than a young farmer can bear, in addition to the burdens he will assume in transferring the farm assets from one generation to the next.
9 p.m.
At least we now have an insurance fund, but we find that licences were issued to livestock buyers on a conditional basis. Producers are protected, except for those who sold cattle and accepted postdated cheques for them. In my view, accepting postdated cheques implies that the seller is taking some risk, but I know of no moral or legal constraint to the practice. This practice can help business people pass over a particularly tight money situation. Perhaps they have experienced some extraordinary expenses of a nonrecurring type and need some short-term bridge financing. In fact, the very issuing of the licence gave some assurance to the seller in the case that the company was on good grounds.
Farmers were not told the licences were conditional. I believe, unless there is something illegal or immoral about accepting postdated cheques, the government should make a decision that the title changed and the sale was made when the invoice was made out and not when the cheque was dated. I realize there are some pretty deep legal questions involved, but I do not think this should be a legal question. I think it is a political question that was long ignored by this government. Its actions in some way contributed to the events that happened. I think it has a moral obligation to assist producers who were caught in that particular trap.
I have brought these matters to the attention of the House as examples of showcase legislation, legislation that looks like it is doing something when, in fact, it is doing something for only one segment of the economy.
Mr. McKessock: Like Bill 179.
Mr. McGuigan: Like Bill 179. We must remember what we are talking about.
The doctors are a case in point. Today we are dealing with a new generation of doctors, people who have either forgotten or did not operate in the days when doctors collected only a portion of their fees. About three years ago I attended the funeral of a doctor in my riding who had served as both a doctor and as a warden of the county. I am speaking of Dr. McPherson from Muirkirk. He was close to 90 years of age when he was stricken with a spinal illness while making his rounds at the Four Counties Hospital. That part of the county is full of stories about this man. He worked for days without sleep through the flu epidemic in 1919. There were stories told at his funeral about his coming back from his county rounds with his buggy loaded with farm produce in return for his services.
Young doctors do not relate to such stories. They pick up their guaranteed payments from OHIP and hunger for more. I suspect a deal has already been made by this government with the doctors. I say that because this government does not act precipitously. Every move has been well worked out in advance. Of course, they will have to go through a ritual shadow-boxing match with the doctors, but in the end they will reluctantly adjust their 1983 increase to only six or seven per cent.
This past summer I was assailed on every hand by Tories in my riding about the jet. I wish I had been able to put it on the public record, but what I told them was that the jet would never see the light of Ontario skies. I told the people that perhaps two people or two events rubbing against one another would create friction and heat and the hangar would burn down. I was half right. There was not a fire but they became fire engines.
Mr. Watson: Tell them about the airport.
Mr. McGuigan: That is a horror story, the airport in Chatham.
Why does the government not announce that because of the times, which speaker after speaker across the House has acknowledged are not normal, things must be done to take care of this situation? Sadly, I believe they are not normal; but if they are not normal for public sector employees they are not normal for doctors.
Some of the arguments in this debate find little sympathy with me. Productivity is one of the sacred cows that must be put in its proper place. Of course we must be as productive as our competitors. In some areas we are and in some we may have fallen behind. Recently I visited a manufacturing plant in my riding where they showed me a row of machines, perhaps double the length of this chamber. I suppose there were six or seven separate machines there. The work piece was passed from machine to machine and from worker to worker and each operation brought that piece closer to completion. Then they demonstrated a single machine that did all of the operations and with greater accuracy than the hand-controlled machines. The machine had a console like a calculating machine and the operator pressed the button and the machine carried out all of the operations going from one operation to another.
Mr. Haggerty: Made in Japan too. There is no research and development here at all.
Mr. McGuigan: Yes, it was. They made the brake assembly for trucks, the casting; the big casting that is the anchor for all of those brake assembly parts. The worker was not a particularly highly trained person. He was, as I recall, educated to a grade 10 level and had only to punch in a prearranged program.
I am not a member of the Luddite society, but I do recognize that by constantly squeezing people out of jobs through the production productivity demand, we are sentencing people to the economic scrap heap. Do we tax those who are working sufficiently to pay the others not to work; or do we borrow enough so that these demands create a demand on the money market where money needed for investment is not available at reasonable interest rates?
From my experience in marketing farm products in the days before we had marketing boards, I often ask myself and others what price does the buyer really want. He wants it low, but how low? If it costs me $1 a unit to produce and I am selling it for 75 cents, is that not low enough? The answer was always clear. They wanted it at a price lower than the price offered to their competitors.
A farmer could take a load of produce to a buyer and be received by the announcement: "We are having a special sale this week and the price agreed upon over the phone has now been changed to 10 cents lower a unit." But the seller maintained his markup on the product. The sale was done at my expense. I think some of these people who are calling for constant greater productivity want to have an object cheaper than anybody else in the world and let it sell by price alone. They are not willing to put their merchandising efforts into it nor are they willing to take a lower profit themselves. They want the producer, whether he is an agricultural producer or a labour producer, to carry the burden.
By extension, as the price went to zero to all buyers, then a buyer would go on to a negative price. The product costs a certain sum of money. There must be some limit unless we are gradually going to eliminate an ever-increasing portion of our people from the labour market.
9:10 p.m.
In years gone by the agriculture industry was a safety valve for employment. People could always turn to agricultural jobs in southwestern Ontario. For the first time in many years I see good people looking for fall harvest jobs. They were not very noticeable during the summer months, but the fact remains that they are looking for work now. This is the first time in probably 15 or 20 years that we have seen any of these people, and for the most part the jobs are not there.
The tomato industry has mechanized so that today about half the tomatoes are harvested by machines, machines that cost up to $150,000 for a complete electric eye sorting machine. The contention is that within five years the harvest will be almost totally mechanized. In 1980 Kent county farms produced a little over 8,000 acres of tomatoes with a value of $14 million.
The sour or tart cherry harvest is totally machine-harvested. The wine and grape industry is almost totally machine-harvested. This government, in an effort to recapture the frozen strawberry market, is investing money to put the finishing touches on a strawberry harvester. There are good economic arguments for doing so because we import about $10 million worth of frozen strawberries each year, mostly from Mexico and Poland and in order to compete with that we have to have lower harvesting costs. What I am pointing out to the members is that the jobs are not there.
The other safety net has always been the housing market. We all know it is cheaper to buy than it is to build in today's market.
To go back to tomatoes, I would point out that there are opportunities to grow more. In my tour of plants I visited a plant producing tomato products. Sitting on a spur line on the railroad track were several carloads of paste tomatoes. I suppose they had probably come from California or Mexico. The product is sterilized in these tank cars and can actually sit there for weeks or even years without spoiling, although the flavour would go. When the local run is over, this plant will continue with the paste. If they were to make all of their products from Canadian tomatoes, they would have to double or perhaps triple the size of their plant in order to take tomatoes in our very short harvest season, which is only about six weeks, and therefore it would double their overhead costs.
The Board of Industrial Leadership and Development has given money to another plant in order to replace imports. I hope the effort is successful, but to be successful our costs would have to be competitive with the costs of imports. We have not been competitive in the past, and if we are to recapture our own markets, let alone export markets, our rate of inflation, which currently exceeds that of most of our competitors, must be slowed. I would remind the members that the six and five or nine and five programs are only designed to slow inflation; they are not designed to stop inflation.
It is interesting to note that over the last 25 to 30 years federal governments in Canada, US governments and now the provinces that have tried to wrestle inflation to the ground have set their target at half the rate. Whatever rate is in effect at the time, the target is half. If inflation is eight per cent, the target is four; if inflation is 12 per cent, the target is six or five.
I would not support this bill if I considered it an assault on the right of either public or private employees to organize themselves in unions. It is a temporary freeze for one year.
Mr. Cassidy: One to three years. Read the bill.
Mr. McGuigan: The operative time is really, in the main, one year.
I know why they find it necessary to organize and at times strike to get their fair share of the economic rewards. In my business I buy a great many items -- paper, corrugated paper for packaging purposes. It does not matter what supplier or location I ask for a bid. If the specifications are the same, that is the exact size of carton and the exact type of material in the carton, the price comes back the same.
There was a time when companies were in a lot of competition with one another, trying to redesign the cartons to shave a little bit of material off here and a little off there to the point where it became very ridiculous because the buyer of the commodity never knew what kind of package he was getting. I was the chairman of a group in the 1960s that brought all the various packing companies together. They agreed on standard-sized packages, and from that point on there was no difference in the price.
If we look over agricultural chemicals and take a whole list of 200 to 300, we might find three or four items where the price per case might be $70.10 in one company and $70 in the others, just enough so that they could not be brought in by the anticombines people.
Let us take trucks. I have bought several trucks in my day and I have got to the point where it is hardly worth my time to compare specifications. If one lays out a body length on an axle weight, front and rear, and specifies the type of transmission, cab, motor and so on, he will find that among the Big Three the price will vary no more than $100 -- and I am speaking of a $10,000 truck. I have not bought one for a few years myself. My son bought the last one. A truck today would be $20,000, and perhaps by extension one might find $200 between the prices of those two trucks. I really cannot believe that those companies all have exactly the same operating expenses. Workers realize this and they realize that things are stacked against them so they have had to organize themselves. Farmers have had to organize themselves into marketing boards.
I do not support Reaganomics. I was asked this question during an all-candidates meeting sponsored by the Ontario Federation of Agriculture. I refused to answer on the basis that it was a hypothetical question. They asked me what I would do in the event that the government brought in that sort of program. I said I would answer one thing: if Reaganomics meant a drastic reduction in the food stamp program, which was one of the first announcements -- food stamps provide the one good meal that many school children in the US receive, and perhaps the time was coming when school children in Ontario and in Canada would need food stamps -- if that was an example of Reaganomics, I would not support it.
It is kind of interesting to note that the member for Chatham-Kent (Mr. Watson) was at that meeting. Just last week we were at a similar meeting, and the gentleman who had posed that question was asking for support for the beef industry. It depends on whose ox is being gored, does it not?
I support the program for one year simply on the basis that it will, if successful, help to spread the burden of trying to survive in the face of the assault that is being made by President Reagan and his advisers on the people, not only of Canada but of all the free world, in saying we have to run our economy the way they do.
Mr. Grande: So you are supporting Reaganomics in Ontario because of the assault by Reagan on our economy.
Mr. McGuigan: A one-year freeze is not Reaganomics, my friend.
Mr. Ruston: He would not know the difference.
Mr. McGuigan: We have a different view in Canada, and I suppose it started with the building of the railroads. We tied Canada together with the building of the railroads, and the railroads are owned largely by the people. If members have ever ridden on a US railroad, and I have, I can tell them that on some of them the only time one knows the train has jumped the tracks is when the train starts to run smoothly. They have the worst transportation system in the world.
9:20 p.m.
If one drives through Florida on Highway 75, and I suppose none of us will from this point on, one has to take along a back brace because that road is in horrible condition. I hate to give so much credit to the government about Highway 401, but it is like a road to heaven compared to Highway 75 in the USA.
If we look at our airlines, our airlines in Canada actually make a profit, or at least they did until last year. The airlines in the United States are going bankrupt. We have a different view of government and of how we treat one another. I believe the time has come when we must divest ourselves of our individual wants and bow to the wants of the country.
We had a quotation this afternoon from Thoreau, a great liberal economist. According to Thoreau, inflation can be reduced in a number of ways: through mandatory price and wage controls, a major recession, tight money policies, a balanced budget and voluntary control, or a combination of all or some of these policies. The issue is not what solutions, because all of them will work; the issue is what is the political price one must pay, who shall bear that price and will it be acceptable to the people.
It is not difficult to find solutions to inflation, unemployment or high interest rates; it is finding solutions that are politically acceptable that is the challenge. A balanced budget can easily be obtained by dramatically increasing taxes. Major recessions can be provoked simply by driving up interest rates at various levels. Mandatory price and wage controls will bring down inflation. Each and every one of these decisions creates political problems. Can we expect Canadians to accept tacitly a major recession with all the obvious social consequences? Can we withstand a policy of interest rates over 25 per cent, for instance, with all the obvious impacts on the economy?
I have one more paragraph before I pass it over to another speaker. In short, it is politics that sets the limits for economics. What, then, must be the guidelines in determining the proper policies? Should we sacrifice labour-intensive sectors for high technology? The previous speaker spoke about that. If so, what is our moral obligation to the innocent victims we are supposed to be saving? Shall we turn our back on the farm community and eliminate marketing boards in order to bring down the price of food? Our policies, as Thoreau reminds us, should spread burdens and sacrifices as widely as possible rather than imposing them indiscriminately on weak and defenseless groups.
The public service union, I submit, is not the weakest and most defenseless group of people we have in Ontario today. The weak and defenseless people are the ones who are out of jobs, the unorganized, the people on welfare. These are the people. I believe that with a little bit of goodwill and civility we can spread these burdens and we can come out of this. We can defy Reaganomics. I certainly believe that some of the measures proposed by the member for Riverdale (Mr. Renwick) are also part of that picture.
We must convince this government that it has to have a total picture. Our party will add some amendments to this bill to try to make it as fair as we possibly can. Thank you, Mr. Speaker.
Mr. Di Santo: Mr. Speaker, I rise in opposition to this bill, not only because my party is opposing the bill, but because I have been listening very carefully to the speakers of both the Liberal Party and the government party. I must admit I have tried to understand if there was something that was escaping me that I could not understand, but I have not heard one single convincing argument to this point.
The last brilliant example was the Minister of Education (Miss Stephenson). She repeated all the clichés and all the stereotypes the Treasurer (Mr. F. S. Miller) repeats day after day in this Legislature. She wants us to believe that by lowering the funds for education we are going to get better education. The same argument was used centuries ago when the aristocracy said the people did not need education because if they were not educated they were better citizens. It is the same reactionary argument repeated in a different way.
The Minister of Education said there is widespread acceptance of this program in Ontario. It is true -- she read the Toronto Star, the same newspaper I read last Sunday -- that the newspaper says an overwhelming majority of Metro residents are willing to limit their wage increases to six per cent, according to a new Star poll release. It goes on to say how many people and what percentage of people are overwhelmingly in support of the program. My colleague the member for Windsor-Riverside (Mr. Cooke) reminds me the minister forgot to mention at all in her speech the doctors, her colleagues. She knows them very well since she was president of the Ontario Medical Association. She knows how many sacrifices the doctors are making and how constrained they are and how many hours they work and how they should be exempted from any restraint. We know that.
The Minister of Education did not read today's Star because if she had she would have read what the Star says about the workers at SKF. Not too many workers, but some workers come also from her riding. The heading is "Workers Left Desperate by Plant Closing: Study." What does the article say? "The plight of ex-workers of a Scarborough ball-bearing plant who lost their jobs 10 months ago 'is becoming more desperate,' a new study says. Only 119 of the 350 workers of SKF Canada Ltd. who lost their jobs when the plant closed have found new jobs, the study by Atkinson College professor J. Paul Grayson says."
If the minister stopped repeating the clichés the government of which she is part repeats day after day, as its members try to convince themselves and the public of Ontario why we have this situation, perhaps she would understand that the program being inflicted on the civil service of Ontario is totally wrong.
I am going to try to debate at quite some length why I think this program is wrong, why it does not respond to the needs of the people of Ontario at this time, why it is deleterious for the social relationships among groups in our society and why the route the government has taken is devastating to our society.
The proposed program is destructive and will not bring the consensus the Tories and the Liberals, the last speakers, are talking about. On the contrary, it will bring a conflict in our society, because it is intended to punish one sector without touching the privileges of other sectors, without touching the economic problems that are the results of the wrong policies of both the federal government and the provincial government in Ontario.
9:30 p.m.
I will try to demonstrate not only that this bill is the wrong way to attack inflation but also that it is wrong because it does not touch the basic problems of our economy. It will not solve the problem of inflation to begin with, because it is quite irrelevant. The Treasurer himself admitted that even if it works, the Treasury will save $420 million, a minimal percentage of the provincial budget and an even lower percentage of the gross provincial product. But even if it works, it will not do anything about solving the real problems we are faced with.
The real problem is not the fact that we will lower the public debt by one per cent. The real problem is that in August 1982 we had 489,000 people out of work as opposed to 256,000 one year earlier. More than 220,000 jobs were lost in one year.
This government may win this battle, because the civil service is in a weak position; its members are totally under the control of this government, and with a majority government, of course, they are an easy target. The government may win this battle, but it will not win the serious battle, the battle of rebuilding the economy in Ontario. They are not equipped to do the job, because they do not understand the complexity of the problem.
Imagine all the people on the Tory benches, with their foreheads so vainly broad, thinking in economic terms. They can only repeat clichés. If they had to use their brains and think, I think there would be a general collapse over there. Everybody would collapse, because the effort would be so incredible for them that they would not survive.
I believe the government is convinced that since there is support in public opinion, since the perception of the public is that there must be some control and since we can control these people, who are quite a limited group in our society, then the government can get away with it, as it has in the past. But the government does not realize that we are going through economic times that are quite different from those in the past. We are not faced with a cyclical crisis, as we have been in the past. when we had a short recession followed by an upswing in the economy and everything fell into place, jobs were created again and the government kept being re-elected. We have very serious problems in the structure of the economy of Ontario.
In the New Democratic Party we have been pointing time and again to the structural problems in our economy. We have made a very serious analysis of the deficiencies of the manufacturing sector in Ontario. We have been pointing out to the public that Ontario, which was the manufacturing and economic hub of Canada, is receding slowly but consistently. For the past three or four years Ontario has had the lowest economic growth of any province in Canada. The government does not understand that. I do not think it will ever be able to understand that.
Before going into an analysis of the economic situation and trying to illustrate what our point of view is on the problem of inflation and before providing our alternative to the prescription of the provincial government, I must say that one is quite confused by reading the bill. The explanatory note of the bill says in part: "The bill also provides that, by regulation, coverage may be extended to include employees of other public sector organizations or other compensation plans in the public sector."
From reading the bill, I do not know what the other compensation plans in the public sector will be. I could not figure out whether the government had in mind compensation plans in the public sector as being the Workmen's Compensation Board, for instance.
I have been quite upset in the past few weeks by the attitude of the Minister of Labour (Mr. Ramsay), who keeps rising in this House and crying like a crocodile, saying he is opposed to controls on principle but, given that we are going through extremely difficult times, we should have these unique and controversial controls.
During the past two weeks, I have been urging the Minister of Labour to make a commitment to this House, to the people of Ontario and to the injured workers of Ontario to review their benefits. As members know, the last time this government -- and I must point out that it was a minority government -- introduced amendments to the Workmen's Compensation Act was in July 1981; since then there has been nothing.
We have been fighting, trying to convince the government that the Workmen's Compensation Act, which was instituted in 1913, does not respond any longer to the needs of today's Ontario, because in 1913 Ontario was mostly an agricultural province while today we are dealing with very complex industrial problems. We are dealing with occupational problems that were nonexistent 79 years ago.
Initially, I personally made a very serious effort to try to understand the Minister of Labour, because he was new to the job. Even though he comes from an industrial city, Sault Ste. Marie, I thought that he was involved in other businesses and perhaps did not understand the plight of the injured workers and the problems they are experiencing because of the insensitivity of this government.
We gave him time. We kept reminding him that his predecessor as Minister of Labour, now the Minister of Consumer and Commercial Relations (Mr. Elgie), had made a commitment to this House in a public statement, that he would appoint Professor Weiler to make a study and that, after the study, by July 1981 he would introduce a bill to reform the Workmen's Compensation Board. That never materialized. We had the white paper with the draft legislation attached. Time went by, but no reform was introduced. So we asked the minister what he was going to do. We had a commitment on the public record of this House, but the minister was only able to say that a committee would be set up and would report to the House and that the government would eventually make up its mind.
9:40 p.m.
This is a wonderful institution that governments have found everywhere in the world. Whenever they are faced with serious problems they appoint a commission or a committee. The Minister of Labour appointed a committee of the Legislature to study the Weiler report, the white paper and the draft legislation. The federal government made an announcement that it was going to give mortgage relief to home owners. What did it do? It appointed a committee. When the committee reported yesterday -- it is in today's newspaper -- the government said it needed more time to make a further study. In the meantime, the home owners wait and the injured workers wait.
Even though we were sceptical of the process, my colleague the member for Nickel Belt (Mr. Laughren) and I said: "Okay, we will participate in the work of the committee. We want to have this committee make a report." In fact, we moved a motion in the committee asking that the committee made an interim report suggesting to this Legislature that the Workmen's Compensation Act should be amended and the benefits increased. What happened was that our request was ruled out of order. Can the members believe it?
After one year and three months this group in our society, the injured workers, is the only group that have not received an increase. Even pensioners who are receiving the Canada pension plan, old age security or disability pensions, along with the members of the Legislature, the public employees and any other group in our society have received increases -- although they are trying to chop the increases of the public servants now. Everybody, except the injured workers, has received increases.
The Minister of Labour one day will have to justify why the injured workers must be the only group in our society to be excluded. If he can bring in another example, then I promise I will not stand up any more in this Legislature. But he told us, as recently as last week, "Revisions of the Workmen's Compensation Act have taken place once in a while."
For the minister, that is a justification for ignoring the fact that inflation last year was almost 12 per cent; this year it is as high as 11 per cent, although now it is a little bit lower. There should be some compensating mechanism.
I always remember when the present Minister of Education (Miss Stephenson) was Minister of Labour, she used to say, "We will introduce amendments in the fullness of time." I was a new member in this Legislature and I was fascinated because the fullness of time looked to me like a new Jerusalem. I said, "When the fullness of time comes, then the problems of injured workers will all be solved." Then, after a long time, they came with a five per cent increase. Five per cent of $60 is $3, by the way.
The member for Nickel Belt and I participated in the committee, and we were faced with the blind opposition of the Tory members.
Mr. Wildman: Were they willing to exempt them from this legislation?
Mr. Di Santo: That is the point I am trying to raise, because I do not quite understand. When the bill talks of other compensation plans in the public sector, does the government have in mind the Workmen's Compensation Board? If so, then I would be not only shocked but also ashamed of belonging to this Legislature, because I do not think there is any moral justification for that.
In the committee's last two weeks there were five sittings, and we had delegation after delegation of injured workers come to us and vividly describe their plight. On a personal level even the Tory members must have been moved to see disabled people, some with missing limbs, some who were blind, talking to us about their problems; they must have been moved to see widows who are getting $496 a month and living in poverty and who are effectively deprived both in their economic and emotional lives. The Tories must have been touched by those cases of human beings who are suffering because of a system that is cruel and faceless.
The government has delegated its moral responsibility to a bureaucracy at 2 Bloor Street East which manipulates the more than 400,000 workers who are injured every year in Ontario because of lax legislation, because of the lack of safety and preventive measures and because of a system that does not rehabilitate the workers. It is a system that is based totally on what is very dear to the hearts of the Tories, the preservation of the private sector and the profitability of companies.
The government is wrong if it has in mind singling out civil servants and employees of municipalities, school boards, hospitals, public and parapublic organizations as well as injured workers, because I promise that we will be speaking forever on this. They will have to pass this legislation over our dead bodies.
In the usual sanctimonious and hypocritical statement made by the Premier, he said that even though this bill is not fair in the sense that it singles out one group in our society, nevertheless it is necessary because it is needed to create conditions that will help to revive our economy or, as the Minister of Education said, it is an opportunity for Ontario.
9:50 p.m.
I do not understand what opportunity. She did not elaborate and I do not think she could. If this is an opportunity to redress some wrongs, then the government should think about the wrong that is being perpetrated because of its legislation.
I am not at all sure -- in fact, I am sceptical -- that the Minister of Labour (Mr. Ramsay) will ever have the moral courage to stand up and say: "Yes, this is a situation that must be rectified. I will take the moral responsibility. I will go to the cabinet and tell them it is unfair that a widow gets $496 a month. It is unfair that the minimum for a person who is totally disabled in Ontario today is $650 a month."
If the minister had the moral courage to do that, perhaps the government could stand in this chamber and before the people of Ontario and ask that we pass this legislation. Perhaps then people would think there is a sense of justice in Ontario after all.
But we are faced with the totally negative attitude of the government; there are no openings at all. The last time I questioned the minister, he said he would see, in the new year when the report is back. I want to bring to his attention that since his boss the Premier decided to introduce this legislation, the committee has been disbanded. It is therefore no longer in a position to report.
What is the minister going to do? He is indicating that he wants to respond.
The Deputy Speaker: With all due respect, the member for Downsview, as he knows, has the floor of the House. We are not in question period. I know the minister would like to respond and he will be able to do so in the fullness of time, I am sure.
Mr. Di Santo: The minister probably has a point of information.
Hon. Mr. Ramsay: On a point of privilege, Mr. Speaker --
The Deputy Speaker: What is your point of privilege?
Hon. Mr. Ramsay: I have every intention that the committee finish its sessions and report as soon as possible. I spoke of that just this morning with the government House leader. I very much want it to finish its report as soon as possible.
Mr. Di Santo: I can only say that 70,000 disabled workers on permanent partial disability are waiting for the day when this government will introduce even a partial reform, even an increase of the benefits.
I want to say this to the minister and perhaps it will be useful for him to listen. I know he had some figures that were cooked by some inexpert staff person in his ministry. The minister must know, if he read Weiler's figures, that from 1975 to 1980 the injured workers lost 27 per cent of the purchasing power of their pensions, and if he looks at the consumer price index, the average industrial wage index and the workmen's compensation pension index he will see there is a very wide gap.
The figures he mentions were given to him by somebody in his ministry who should be fired, because he is incompetent. I ask the minister why he gave any credibility to Professor Weiler and why he paid Professor Weiler such a huge amount of money to present a report that his own staff contests. Either Professor Weiler provided the ministry with figures that are credible or the minister's staff is wrong. In Latin, they say tertium non datur.
lnterjections.
Mr. Di Santo: If the minister is convinced that the gap exists because the consumer price index in the last seven years went up by 78.3 per cent -- and it is not difficult to consult Statistics Canada, Mr. Speaker -- and the average industrial wage went up by 75.8 per cent, and the pension went up 55 per cent -- not 88 per cent as the minister said, with all due respect -- we are not economists, we are not specialists in high calculations, but we can do addition. If we add 10 per cent, plus 10 per cent, plus 11 per cent, plus nine per cent, plus six per cent, we get 55.
I am sure the minister will clarify to the House that Workmen's Compensation Board compensation is not a compensation plan as outlined in the bill that should be covered under the restraint program. I hope when he speaks, if he speaks, he will say that publicly because there are some apprehensions.
He must know that not everybody understands the jargon of the legislation we debate. I think he should take upon himself the task of clarifying that the workmen's compensation plan is not one of the plans that will be under this bill. If he does, he will do a service to many people who are very vulnerable in our society and who were forced because of an accident to be idle, to leave, as it is called with bad words, the labour market, and who have no way of reacting, because they cannot work, they cannot find another job and they are disabled. I think the minister should do that.
10 p.m.
I was starting to explain why I am against this bill. In the newspapers in the last few weeks there seems to have been a fixation on the part of all the reactionary right-wing free enterprisers with whatever is public. The government of Ontario, as usual, is jumping on the bandwagon --
Mr. Roy: Odoardo for leader.
Mr. Di Santo: I thank the member for Ottawa East, particularly because I was one of his supporters when he ran for the Liberals. Minorities support minorities.
Interjections.
Mr. Di Santo: It is intriguing, because on a personal level I sympathize with the members of the Liberal caucus, even though I understand their difficulty and their predicament vis-à-vis this bill. I know they are squeezed between the federal government and the provincial government.
They listened very carefully to the member for Kent-Elgin (Mr. McGuigan). He said this nine and six program -- which will not last one year, by the way; it will last up to three years -- is a first step, but we should have a broader picture. I do not understand what a broader picture for the Liberals is.
The fact is that this bill is the result of a philosophical approach that is right wing and reactionary. In a nutshell, it is a philosophical approach that is intended to isolate one sector of our society, wage earners, and punish them because it is part of a scheme of redistribution of income that will affect only one sector, the public servants, and will leave other incomes totally untouched -- not only incomes of individuals but also profits and incomes of companies.
I want to tell the member for Kent-Elgin that he is choosing one sector, forgetting that his friends the farmers will suffer as a result, because that government and his friends in Ottawa are unable to tackle the problems that the farmers are suffering now. He knows very well that the problem for the farmers --
Mr. McGuigan: Tell us about the farmers in the Socialist countries. Tell us about the farmers in Poland.
Mr. Di Santo: In Poland?
Mr. Philip: Maybe you can tell us which kind of administration you are in favour of. You are a kind of 50 per cent Bolshevik; you want to go half way.
Mr. Di Santo: Mr. Speaker, I was trying to analyse in an intelligent way the speech of the member for Kent-Elgin, but after his interjection I must withdraw what I said and I must say to him that it was pure nonsense.
I want him to go back to the farmers in his riding and explain to them why they are losing their farms. Is it because the civil servants are getting nine per cent instead of six per cent, or is it because the farmers are paying interest rates that they cannot afford?
If he does not understand that, if the Liberal caucus does not understand that, then either they are acting in bad faith or they are totally incapable of understanding reality.
Mr. Roy: Mr. Speaker, on a point of order: I want to say to my good and dear friend the member for Downsview that I have great respect for his words of wisdom. But when he attacks my colleague the member for Kent-Elgin, especially in the area of the farming community and the defence of the farmers, I say to my dear and good friend the member for Downsview that he is dead wrong.
If someone knows the community and has the pulse of that community it is the member for Kent-Elgin. The member should respect his views.
Mr. Speaker: Order, order.
Mr. Roy: Wasn't that a point of order?
Mr. Speaker: Not really, no. I would have to ask the member for Downsview to address his remarks to me, not to the Liberal caucus or other caucus.
Mr. Di Santo: Thank you, Mr. Speaker, and I would like to thank you for your wise words of advice. From now on I will address myself to your chair.
Interjections.
Mr. Di Santo: I will say that the approach of the Liberals and the Tories is the same. It comes from the same philosophy. They think that by perpetuating some --
Mr. Epp: How can you say that? We haven't been in power for 20 years.
Mr. Wildman: You have in Ottawa.
Mr. Speaker: Order. Everybody wants to make a speech. I have recognized only the member for Downsview. He will continue.
Mr. Di Santo: Thank you, Mr. Speaker. I do not have a written speech and it is from the heart. It is very difficult to respond to a very concerted effort of a platoon of economists of the Treasury. But I want to express my genuine concerns, which are the concerns of a common person with common sense, which expresses the concerns of the people I represent, people who are unemployed at the present time.
10:10 p.m.
I was canvassing last weekend and met people who have been out of work for 11 months, people who worked in the construction industry and who have not worked a single day in 1982, people who work at Camco Inc. and who, because of the policies of the Conservatives and the Liberals, will be losing their jobs in stages. The bill that the Conservatives passed is flawed in such a way that this company will be able to fire 49 people every three months without any of them receiving a single penny in severance pay, and some of them have worked there for 20 or 30 years. The assistant of my colleague the member for Dovercourt (Mr. Lupusella) has been there for 29 years and is in his late 50s. He will be unemployed as a result of the policies of the Conservative Party and the Liberal Party.
Ironically, the federal Minister for Indian Affairs and Northern Development is providing an incentive grant to Camco to move from Weston to Hamilton, although the jobs will be phased out in two or three years because Camco will become part of a multinational company which will be rationalized, that is, absorbed in the production of the multinational company, and Canadian production will disappear.
When we talk about Bill 179, we are talking of the problems of the real people of Ontario. This problem, as I said earlier, is the result of a philosophical position shared by the Liberals and the Tories. The member for Waterloo North (Mr. Epp) said, "We have not been in power for 40 years," but if he reads the newspapers he will know that as recently as three days ago his friend in Ottawa, Mr. Trudeau, completed the second stage of his cabinet shuffle. In order to please the business community, it was a shift towards the right.
In a recent interview by the New York Times he referred to President Reagan as a great man. Members will remember that last year at Montebello he yelled to the reporter who was asking a question of the president, "Ask Haig." In other words, he meant that the president could not answer for himself. But now Reagan is a great man, comparable to Eisenhower or Churchill.
The motive for Trudeau's about-face is that he wants to have peace with his neighbour. So Canada will no longer take a nationalist stand, which means that Trudeau is taking exactly the same position as Clark. We are continentalists -- mild continentalist, not really continentalist. That means that built into the Liberal and the Tory philosophy is a complex of colonialism that can be camouflaged but which emerges when we come to the crunch time and time again. In fact, in the speech from the throne in March, the Premier announced that our main objective should be streamlining the Foreign Investment Review Agency and that is what Clark is proposing and that is what the new minister will do.
Mr. Wildman: Isn't that what Walker said?
Mr. Philip: He did not say streamline the limousine; he said streamline FIRA.
Mr. Di Santo: I do not expect he would suggest his limousine be streamlined. It was far from my mind. I have nothing against his limousine, especially because of the grey colour that reflects very well the person who rides in it.
In the throne speech the Premier of Ontario said that one of the objectives from the economic policy of Ontario should be streamlining FIRA. What is Trudeau doing now? He is replacing a nationalist minister with Mr. Lumley, a good friend of my friend the member for Cornwall (Mr. Samis).
What is the reason for that? It is because he is a good friend of business and he will use FIRA with discretion. What does that mean? It means that both the Tories and the Liberals pretend they are two different political animals -- and they succeed in good times. When there is a boom the Liberals are more open to certain social needs, while the Tories in their genuine and theological certainty of being the repository of the truth always maintain that the government should not interfere with the lives of the citizens, that the government should not interfere with business, that regulation should be scrapped even though they introduced Bill 179.
When we come to the crunch, then we will see that they take exactly the same position, the position in FIRA of capital, the position against the working people. If we look at Bill 179, it is an extreme exemplification of this position. In Canada, when we are faced with a situation when we have an economic crisis and the government must choose whether to regulate labour or capital, the Liberals and the Tories always regulate labour but never capital. We have never heard the Premier of this province or the Prime Minister of Canada mentioning that perhaps there is another way we can control our exchange so that we can protect the dollar. We can have made in Canada interest rates. It is done in other countries.
Mr. Wildman: Ian Sinclair would not like that.
Mr. Di Santo: Ian Sinclair would not like that, of course. Why? It is much easier to control labour because labour in this country is pretty weak, even though the mythology goes that the big unions, the big labour bosses, are those who dominate the life of the country. Well, I can say, and I do not have any fear of saying it, that one of the reasons we have so many economic problems in Canada is that labour is very weak in Canada.
10:20 p.m.
The Treasurer (Mr. F. S. Miller), who incidentally would have been more at ease in his old job selling used cars than in dealing with economic problems, stands up and asks: "What about France? The Socialist president has imposed controls for four months." But if he had made any intellectual effort to try to understand what is going on in the world, he would understand that in West Germany as soon as the new Chancellor, Mr. Kohl, took power the first thing he said was "The main objective of this government is unemployment and how to fight unemployment." This is rightly a Conservative government but a government that is confronted with the reality in its society that the social forces are balanced.
In Canada we have an imbalance. We have a labour movement that cannot even protest against an authoritarian position like Bill 179. The only thing they can do is to come into the chamber and sit in the galleries in their tee-shirts with their insignia, and they are thrown out because they are carrying their political message. I think that is typical.
We have seen demonstrations of 250,000 people in West Germany and of 300,000 people in Paris. Democracy in West Germany and in France has not collapsed. It is vital, actually more vital than ever. If our government had any intellectual perspicacity, it would understand that if things are run differently in those countries, then there must be some reason. The people in those countries are not much more intelligent than we are; they do not have a higher intelligence quotient than we do. It must be the social forces that are at work in those nations that produce better governments and better policies.
The imbalance exists in our society. It is shown exactly by the reaction to this bill. It is unconscionable that the government comes along with a bill that singles out 500,000 people, the civil servants and the employees of the parapublic sector, and they cannot even react. Why? Because they are in a weak position. If they had any bargaining power at all, they would have put this government under such pressure it would not even have dared to single out their group in our society. The government, before introducing this bill, would have sat down and discussed and debated it.
Now we are in a situation where, if the Premier does not want to talk to the union leaders, he is seen as a hero by that public that is expecting that some control somehow will solve the problems of our economy and their problems. We know that is not true. We know we are going through a deep crisis and in saving $420 million from the provincial budget we will not solve any problem at all. Unemployment will be high as it is now.
The manufacturing industry in our province, which is obsolete in many instances and which is suffering because it is part of a branch plant economy, will follow the events that are dictated elsewhere. Our mining industry will go with the upturn and downturn of the economy. This bill will not solve any one of those problems.
It will not solve the problem of the automobile industry and the thousands of people whose jobs are threatened because we entered into an auto pact that is working against the best interests of Canada. They work in an industry where the greed of the three big car manufacturers in the United States did not allow them to see the world was changing, as new approaches were emerging and new companies were producing better cars, and that an oil crisis was coming up that they were not able to face. This bill will not do anything for the workers in the automobile industry.
This bill will not do anything for the workers in the textile industry, where I used to work before I was elected to this House, because it is an industry that is becoming obsolete. The Canadian businessmen who were owners of the companies in the textile sector for years have not been able to invest one single penny and have not been able to understand the changes that were going on in the emerging nations. Now they are faced with tough competition and they do not know what to do. They cry like babies asking the government to protect them.
That is the history of the great private sector that is glorified every day by the Treasurer. When they do not have tax incentives, when they do not the protection of a very high tariff barrier, when they do not have all kinds of incentives, they do not know what to do and they cry for protection. Then they accuse us of being the party that wants a major involvement of the government in the economy.
Have members ever seen the small businessman, that incredible character Mr. Bulloch, who preaches against labour day and night, dreaming up the most awful things about the workers? Every time a budget is announced he asks for tax deferrals and tax incentives. When the interest rates rise, which is the force of the market that he should accept because it is free enterprise, he cries like a baby and wants the government to intervene and lower interest rates and give relief to the small businessman. That is fine. It is part of our program too. But it illustrates the contradictory position of certain sectors in our society which are happy now because the government has singled out somebody else, the public sector.
Mr. Speaker: I draw the honourable member's attention to the clock.
On motion by Mr. Di Santo, the debate was adjourned.
BUSINESS OF THE HOUSE
Hon. Mr. Wells: Mr. Speaker, perhaps I could indicate to the House the order of business for the next few days. On Thursday afternoon and evening, October 7, and on Friday morning we will continue the debate on second reading of Bill 179.
The House will not be sitting on Monday, October 11, since Monday is Thanksgiving Day. On Tuesday next in the afternoon and evening we will continue the debate on second reading of Bill 179. In that regard, if I could have the consent of the House, I would like to move a motion to dispense with private members' business this Thursday afternoon.
Agreed.
Hon. Mr. Wells moved that, notwithstanding, standing order 64, private members' business will not be considered on Thursday, October 7.
Motion agreed to.
The House adjourned at 10:32 p.m.