INFLATION RESTRAINT ACT (continued)
The House resumed at 8:02 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.
Mr. Di Santo: Mr. Speaker, at the end of the sitting this afternoon I was saying that the government has not been able to make a good case for Bill 179, and I was trying to justify that action for it. I was thinking aloud to try to justify the reasons it introduced the bill. I could not come up with any good reason, but for the benefit of the assembly I want to give the reasons mentioned by the Treasurer (Mr. F. S. Miller) when he introduced Bill 179.
The first reason he mentioned was -- and I will quote from a speech the Premier (Mr. Davis) made in Halifax and which he repeated in this Legislature in September, and therefore I assume it is the position of the government:
"Public sector cost reductions can be passed through to the private sector through the tax system and through other charges for government services. These reductions alone will have a significant impact on the performance of the consumer price index and will contribute to reduced inflation in the private sector."
That is a quote from the speech the Premier made at the first ministers' conference in Halifax and repeated in this Legislature on September 23.
If we look at it objectively we can all see that there is no evidence whatsoever that public sector cost reductions that are passed to the private sector will have a significant impact on inflation. In fact, the assumption that the private sector has borne public sector costs in the past is not true. We know it is more likely the general public, the family sector, which has borne those costs.
The Conservative budget introduced on May 13 in this Legislature increased personal income taxes but did not increase corporate taxes, they remain unchanged. If there is one sector that has been burdened with the costs of the public sector, it is surely the public of Ontario, the individuals of Ontario, the families of Ontario, certainly not the corporate sector.
Remember that 20 years ago corporate income taxes made up 25.1 per cent of the provincial budget of Ontario. From individuals and families came 15.4 per cent. That was in 1962. From then until today, this Tory government has worked out a formula that has allowed its friends to escape the constraints of taxation, so that today corporations provide only seven per cent as opposed to 25 per cent 20 years ago, while the contributions of individuals have increased from the 15.4 per cent of 20 years ago to 27 per cent in 1982.
That does not include Ontario health insurance plan premiums, which are a favourite target of the Tory government. Of all the prices and costs which are regulated and subjected to restraint, OHIP alone escapes. This means individuals and families will be subjected to a further burden by this government.
Even if the percentage of corporate taxes is unchanged there is a further element, that of decreased profits, which will increase even more the public sector costs to be borne by the citizens of the province. In 1981, profits dropped 10.5 per cent over the previous year. In the first quarter of 1982, profits have fallen by 50.1 per cent.
Since this means the contribution of the corporate sector to the Treasury of the province will be massively reduced, somebody will be bearing the increased costs of the government -- mainly the citizens of Ontario and certainly not the corporate sector.
The second reason given by the government for introducing this infamous bill is that there is a downturn in the private sector. In fact, the Treasurer of the province, in his statement in the Legislature on September 23, 1982, said:
"In the last year, the Ontario public sector saw an employment increase of more than 15,000 people almost entirely in the education and health fields. During that same period, the private sector saw employment drop by 82,000 jobs. When policy makers are faced with that sort of situation, I think their duty is clear. The program we announced on Tuesday is a response to that situation."
Members may question the logic of this reasoning. I fail to understand the government's logic when it tells us it wants to come to grips with the economic problems of the province. I am more and more convinced that this government, used as it was to a situation of affluence and continuous economic boom -- without any effort on its own part, because resources were plentiful and the economy was developing and growing despite the government -- is facing these problems for the first time. It is a serious crisis, and with these economic changes taking place the government does not know how to deal with it; first, because it does not understand the situation; and second, because it makes no effort.
As I said in a jocular way yesterday, perhaps the Treasurer would be better to go back to selling used cars.
Mr. Laughren: He is an expert on odometers. He repaired them.
Mr. Di Santo: That was an extreme example of how this government and the banks deal with the economy of the province.
Mr. Stokes: Would you buy a used car from him?
Mr. Di Santo: The member for Lake Nipigon asks a very proper question. I would never buy a used car from the Treasurer.
Since I have in front of me the member for Elgin (Mr. McNeil), I want to mention in a friendly way an example that struck me. After the last election there was a proposal for development of 3,000 acres in Vaughan township. The staff of the Ministry of Agriculture and Food recommended against approving the development. Somehow, for reasons which probably will never be known to the public as long as the Tories form the government of this province, the then Minister of Agriculture and Food went before the Ontario Municipal Board and recommended the development.
When he was asked by the former Leader of the Opposition why he had given approval to a development his staff was opposed to, the minister said, "I sent Ronnie up to look at the land." When the member for Elgin was asked, "What was your assessment?" the member -- waving his hands, which are not as big as the hands of the former Minister of Agriculture and Food -- said, "That land was hilly and therefore not good for agricultural purposes."
That is the approach of this government to economic problems. It is the attitude of a dilettante. This is a government which has been dealing with a situation of continuous boom for years and years and all at once it is faced with a thankless situation. Government members do not know where to put their hands and only hope that somebody will bail them out.
That is the bottom line of this bill. By producing this bill they hope to buy time, because in their thinking, for some strange reason that nobody has explained to us, the people of Ontario will blame the civil servants for the inflation we are faced with and they hope at some time there will be an upturn in the economy and they will be running the store again and the people will vote for them.
I said this afternoon, and I want to repeat it now, that the government is totally wrong, because these are very difficult times. They are exceptional times, as the Minister of Labour (Mr. Ramsay) has repeated in this Legislature in the past few days. He said that in principle, as a Conservative, he is opposed to controls but due to the exceptionality of the times we need exceptional measures and these are the exceptional measures that will resolve the government's problems.
I think the government is wrong. These are exceptional times that require not only exceptional measures, they require also exceptional people who are able to solve the problems. Unfortunately, the people sitting on the government benches are too mediocre to either understand the situation or try to deal with it.
Interjections.
Mr. Di Santo: I know the member for Scarborough-Ellesmere (Mr. Robinson) and the member for Ottawa East (Mr. Roy) are very anxious to speak, but I think it will be extremely educational for both of them to listen to my speech. They will understand why the position of the government is wrong and why the position of the Liberals, who are supporting the government, is doubly wrong.
Mr. Elston: You will understand why the posturing by the NDP will get them nowhere.
Mr. Laughren: It's called opposition.
Mr. Kerrio: Rae does not talk the same tune on the hustings as you fellows in here.
Hon. Mr. Ashe: Isn't that par for the course ? The things they say and the things they do are always different.
Mr. Speaker: I recognize the member for Downsview who is going to address Bill 179.
Mr. Di Santo: Thank you, Mr. Speaker.
Mr. Laughren: Move over, George, let the alliance show.
Hon. Mr. Ashe: The things they say and the things they do are always different.
Mr. Laughren: As opposed to your free enterprise philosophy.
Mr. Speaker: Does the member for Nickel Belt want to trade places with the member for Downsview?
Mr. Laughren: Mr. Speaker, I could never fill his shoes.
Mr. Speaker: Then be quiet and let him speak.
Mr. Di Santo: I appreciate the statement made by the member for Nickel Belt because, in this party, one of the virtues is humility. This interruption has been quite timely because the member for Huron-Bruce (Mr. Elston) interjected by saying that is why the NDP is going nowhere.
If I had time I would explain to the assembly why that interjection is the result of a totalitarian understanding of reality which goes along with the same way of thinking as the government that introduced this bill. They feel that they are right and therefore there is no room for anybody else and either we do what they want or it is wrong. That is why the Liberal Party is making a mistake.
Mr. Kerrio: There is not much room for you, Odoardo, but just a little.
Mr. Speaker: Never mind the interjections. Get back to Bill 179 please.
8:20 p.m.
Mr. Di Santo: If the member for Niagara Falls wants to attack me on my physical dimensions, I give up.
Mr. Kerrio: I was talking about your party, not you, my friend.
Mr. Di Santo: I am soberly realistic, and if the member wants to discuss ideas, then I invite him to stand up in his place and discuss the ideas.
Mr. Ruston: You won't give us time to speak.
Mr. Di Santo: I am making a very serious effort with people like the member for Niagara Falls, who is a small businessman and who should share with the people in his condition my way of thinking. If the small businessmen are suffering today, it is because of the wrong policies of both the federal and the provincial governments. If he would use his brains instead of his partisan loyalty he would probably understand that we are the people who are saying the right things, and he should join us.
Going back to Bill 179, the Treasurer, in his thankless task of trying to justify Bill 179, said the public sector is the one that has seen an increase of 15,000 people employed while the private sector has suffered 82,000 job losses, therefore, in his words, "This program is a response to that situation." As I said before in my preface, I fail to understand the logic this government is using, not only on this occasion, but in the way it deals with general economic questions.
I would like to ask the Treasurer, and I hope at some point he will be able to answer, if the public sector had not seen an increase of 15,000 people employed, does he not think we would have a higher rate of unemployment at this time? Am I wrong; or do I not understand the figures?
Also, that statement was made in this Legislature on September 23, 1982, and contradicts the statement he made yesterday, when, probably forgetting what he had said two weeks ago, the Treasurer said, "Yes, I am in favour of a job creation program as long as it is a joint program between the federal government and the provinces."
If the Treasurer was adamant in September against the public sector creating jobs while the private sector is losing jobs, why does he now want to spend public funds to create new jobs? Is there any logic in his position, or are we faced with a government that lives day by day with expediencies, trying to survive and hoping that somebody will bail it out at some time?
I think the Treasurer has not been able to respond to the questions we have been asking. It is the responsibility of the government to explain why it is axing the wages of 500,000 public employees, supposedly to solve all the economic problems, while at the same time the Treasurer does not know whether the public sector should be a vehicle to create jobs, and the next day he comes out saying it should be a vehicle as long as it is a joint effort with the federal government.
Since the 1930s we have known -- and I do not want to repeat this because it has been said so many times -- there is a role for the government, not only when it is called to bail out bankrupt companies like Dome Petroleum, not only when the so-called private sector, the capitalists of this country, the Conrad Blacks, abandon Massey-Ferguson because they do not know how to deal with a situation that is bigger than them --
Mr. Wildman: He got a good deal out of it.
Mr. Di Santo: He got a good deal out of it, but I also think we have known since the 1930s that there has been a role for the public sector in creating jobs along with the private sector. Everybody accepts that, and to perpetuate a myth does not do any good, not even for the government, because they have been involved time and again in the past and have even made colossal mistakes.
I ask the Treasurer to stand up and say why they spent so many millions of dollars for Minaki Lodge, how many jobs they created and if there was not a more intelligent way of creating jobs in Ontario by spending public money.
The third reason the government gave, and again I have to quote the Treasurer on September 23, 198 2, when he said, "Mr. Speaker, in my remarks on Tuesday I indicated that one of the main objectives of this program is to lessen the burden of government on the economy." By "this program" he meant, of course, Bill 179.
According to the Treasurer, if this program works according to the forecast made by the government -- and I am very doubtful that they are right, because just last spring when he produced the budget the Treasurer forecast an upturn in the economy in the second half of the year that never materialized, so I do not know if he is accurate in forecasting a saving of between $440 million and $840 million over the life of the program -- but assuming that $440 million could be saved in one year, which is highly unlikely --
Mr. Wildman: Very unlikely.
Mr. Di Santo: I want to tell the member for Algoma that he had forecast a much lower deficit in the budget, and three months later that deficit was much higher.
Mr. Wildman: Almost as bad as MacEachen.
Mr Di Santo: Even assuming that $440 million could be saved in one year, it would reduce the projected expenditures in 1982-83 by only two per cent. That is all that will happen this year if the Treasurer is accurate.
More to the point, because we have to look at the total picture, it would reduce government expenditures as a share of the gross provincial product from an estimated 16.8 per cent to 16.5 per cent, which means that $440 million will amount to only 0.3 per cent of the projected gross provincial product.
If the Treasurer wants to convince us that 0.3 per cent will lessen the burden of the public sector on the economy, let me tell him very respectfully that is a laughable proposition.
8:30 p.m.
I have said before that this is not the first recession but it is the most serious. We are faced with problems that are no longer cyclical. We are faced with much deeper structural problems. If we look at the recession of 1973-75, the government's expenditure as a share of the gross provincial product ranged from 15.6 per cent in 1973-74 to 17.5 per cent in 1976-77. In other words, it is lower now than it was in 1976 because public expenditure as a share of the gross provincial product now is 16.8 per cent. Therefore, the Treasurer cannot even make a case that public expenditure as a share of the gross provincial product is so high now that it is necessary, in his words, to lessen the burden of the public sector on the economy.
The second point I want to make is that the major problem is the reverse of the Treasurer's statement and could be expressed as the burden of the economy on the government. In fact, the Treasurer's budget has been shot full of holes by the deepening recession and the failure of his anticipated economic turnaround, which never materialized, in the second half of this year. If we had a turnaround, we would have more revenues and we would not be debating now whether to save $400 million.
When the figures for the third quarter are published, we will see that the revenues of the province will be far short of the $440 million. At that time I want to hear the Treasurer justify the shortcomings of his forecast and the shortcomings of the general economic policies of this government.
We have been saying that many times. I said yesterday that even conservative people who are enlightened now understand that. If the government were serious about creating jobs, as we proposed in our counter-budget proposal, we would be in a much better situation now because we would have much less of the work force idle, we would not have 489,000 people unemployed and the Treasury would have received an influx of revenues that has not come because people are not working, not producing, not taking home wages and therefore not contributing their taxes to the Treasury.
If the government had understood that proposition, we would be in a different situation, but it does not. As I was saying, conservative people in other countries understand that. Last week, when the conservative leader of the Christian Democratic Party replaced Chancellor Schmidt in West Germany, he said, "The first objective of this government is to create jobs because unemployment is our enemy."
Interjection.
Mr. Brandt: It's a good idea.
Mr. Wildman: If it is a good idea, why don't you do something about it?
Mr. Di Santo: I know the member for Sarnia has been awakened by the fact that I mentioned capitalists. One day when we were talking in a friendly way, I was amazed when he said, "We capitalists." I must confess for a moment I was confused because when we talk of capitalists, I think of Conrad Black or --
Mr. Wildman: Ian Sinclair.
Mr. Di Santo: Ian Sinclair, E. P. Taylor or --
Mr. Wildman: Harold Ballard.
Mr. Di Santo: I had a moment of reflection and thought, "It is all right if people like to see themselves as being in the big league, that is fine."
Mr. Brandt: I could get more jobs together in a day than you could in a lifetime.
Mr. Wildman: Why don't you then ?
Mr. Speaker: Order.
Mr. Di Santo: I am very glad, Mr. Speaker, he wants to make a point of privilege.
Mr. Speaker: Back to Bill 179, please.
Mr. Di Santo: Mr. Speaker, I understand you are trying to protect the member for Sarnia. I will go back to Bill 179.
The third reason the Treasurer gave to try to justify this unjustifiable bill was that introducing wage controls in the public sector would have a demonstration effect. I like the word "effect." The Treasurer said to the Legislature on September 23, "I believe our actions will help the fight against inflation in three ways," and he mentioned the two ways I have already spoken about.
The third way is "the demonstration effect, signalling an era of lower wage settlements to the private sector. Of all those effects, I think the third is the most important because the problem this country faces today is as much a psychological problem as it is an economic problem." These are the usual antics of the government. The psychology is, "If people think like us, everything will be okay." That is not the case, as I have already explained. By making this statement, the Treasurer is actually trying to prove the unnecessary because restraints in the private sector are not the result of an imposition of legislation by any government, they are the result of the necessities of life.
Everyone who reads a newspaper or listens to the news knows that the workers at Ford and General Motors have signed contracts at much below the inflation rate, and so have an incredibly high number of other workers. I remind the Treasurer that the workers at Kelson Spring Products Ltd., a plant in the great riding of Oakwood, represented by my friend Mr. Tony Grande, were on strike for six months and signed a contract at the end with a pay increase of seven per cent. So it is proving to be absolutely unnecessary for the Treasurer to say that this bill will set an example for the private sector.
The Treasurer's statement implies that workers in the private sector have been settling at rates much higher than inflation in the past, while we know very well that since 1977, for five years, according to Statistics Canada, the workers in the private sector have settled their contracts at a rate that for them meant a loss of 10.5 per cent of their purchasing power. That is a great contribution to the economy of this country. The workers in the private sector have given up a lot to fight inflation.
8:40 p.m.
I think it is wrong of Treasurer to imply that it is somehow some mysterious greedy will in the workers that has provoked this inflationary spiral. When we talk of workers from 1977 to today, those who have settled and lost 10.5 per cent of their purchasing power, we are talking of organized labour, of the workers who belong to unions, of the workers who have a contract. But what about those thousands of workers without contracts? Two thirds of the workers in Ontario are unorganized. I could show example after example of workers working in the sweatshops near this place, around Spadina, who are making barely above the minimum wage, when they make the minimum wage, because of the piecework situation that exists now.
I am sure members are aware that today with the slack in our economy many workers are required to work more hours for less wages and, in many instances, they make even less than the minimum wage. Those people are not part of the statistics that Statistics Canada records as having lost 10.5 per cent of their purchasing power from 1977 until today. For the Treasurer to try to find a scapegoat in the workers of this province is not only ungenerous, it is beneath him.
In 1982, referring again to organized workers with contracts -- I cannot talk of the thousands of people without contracts -- the wage settlement in the second quarter of this year was 7.8 per cent. I am not afraid to state that the government time and time again says the public sector, the public employees, the civil servants, are the nonproductive or less productive segment of our society. The member for Oakwood (Mr. Grande) told me that one of the Liberal members said in a television program recently that the civil service is the least productive sector of our society and therefore it is fine that its wages have been cut back.
Mr. Grande: He is not here right now.
Mr. Di Santo: No, and I do not want to mention his name because I really feel I should not.
When we talk of public sector employees, I like to think of the caretakers in the schools of our city, the people who clean our streets, the garbage men. I like to think of the hospital workers who work long hours, night and day, for a wage that is not that great. Certainly it is not the same wage as the executives of Dome Petroleum, where the president's wage has been increased by 100 per cent, reaching $400,000 in salary and $100,000 in fringe benefits.
No public worker makes that much money. Pointing out that they have job security and trying to put them against the workers in the private sector does no good. It is wrong if the government thinks that all the workers in the private sector will say: "The government is right because those bastards in the public sector have secure jobs. I do not have a job and why should they have increases higher than six per cent." The people of Ontario have much more common sense than the Tory caucus has. They will realize that when we talk of the civil service we are not talking only of the mandarins and the people appointed to the positions that the patronage system of the Conservative Party dispenses in the province but we are talking of working people who go out to work for wages, that in many circumstances are very meagre.
Interjections.
Mr. Wildman: When is the member for Timiskaming going to speak in this debate?
Mr. Havrot: I would not waste the time of the House with frivolous things like those your members take up time with.
Mr. Wildman: It would be a waste of time.
Mr. Havrot: We believe in facts, not fairy tales.
Mr. Wildman: That is why you never speak.
Mr. Speaker: Order.
Mr. Di Santo: Mr. Speaker I know that you are anxious to listen to the member for Timiskaming, but I think you must be content with what he said because that will be his contribution to this debate.
Mr. Havrot: What you are saying does not make sense, so it is all right.
Mr. Speaker: The member for Downsview. Back to Bill 179, please.
Mr. Havrot: Nobody is listening to him.
Mr. Speaker: Order.
Mr. Di Santo: Mr. Speaker, the member for Timiskaming is insulting the assembly and the members because he is saying that you are not listening and we are not listening.
Mr. Speaker: I can assure you that I am.
Mr. Di Santo: Thank you, Mr. Speaker.
I want to tell the member for Timiskaming, if he is listening, that the Speaker is only proving he has common sense.
Interjections.
Mr. Di Santo: Mr. Speaker, I find it difficult to capture the interjections of the member for Timiskaming. I would be delighted if he could speak louder because I know that he is stimulating.
Mr. Speaker: Would you just address your remarks to me, please?
Mr. Di Santo: I am, Mr. Speaker. That is why I find it difficult to listen to him at the same time. I hope he will take part in the debate later on because we are very anxious to be enlightened by his discourse.
Mr. Havrot: You wouldn't let me talk. You would interject all the time as you always do when I get up to speak.
Mr. Speaker: Order.
Mr. Di Santo: At this time I must make a solemn promise that I will not interject if the member for Timiskaming stands up to speak. I will also talk to my colleagues.
Mr. Speaker: Back to 179 now, please.
Mr. Di Santo: Going back to Bill 179, I have mentioned the four reasons the government has given in order to justify this infamous bill. Now I will mention the fifth one.
Mr. Wildman: What is it?
8:50 p.m.
Mr. Di Santo: The fifth one is a reason that in abstraction must make ordinary people wonder at the complexity of the government and how it understands the economy. It is that the program decreases the government's demands on the capital market. The Treasurer said in this House on September 23, "I believe our actions will help the fight against inflation in three ways," and one of the ways is "decreased government demands on the capital markets to ease pressure on interest rates."
I had thought it was quite obvious that interest rates are playing a very important role in the present predicament of the economy. I had understood that interest rates had something to do with the policy of the federal government and of the Bank of Canada. I had also understood that in view of the fact that we live in one of the most reactionary -- in monetary terms -- capitalist countries, the government of Ottawa was unwilling to make any decisions on the way of controlling capital.
I had understood that the government did not want anything to do with exchanges and that it refused flatly to control the exchanges. I had understood, or I thought I had understood, that it was relying heavily on the fact that perhaps the economy of the United States would rebound and therefore interest rates would go down there and, as a result, interest rates in Canada would go down.
Now along comes the Treasurer of the province, who says: "No; only if we limit the wages of the civil servants of the province will interest rates go down." I am totally at a loss at this point because I am not an economist; I do not understand very well the intricacies of the economy. But I think the Treasurer has a responsibility to explain why he is making this statement. I think the Treasurer has not got a case.
Mr. Wildman: It is a ridiculous argument.
Mr. Di Santo: It is a ridiculous argument. I said before, and I want to repeat now, I am at a loss to understand the logic that governs that side of the House.
The Treasurer's statement that wage controls will decrease the government's demands on the capital market is based on two assumptions. The first is that the government crowds with the private sector into the capital market in order to borrow billions of dollars. The second refers to the relationship among government deficits, inflation and interest rates.
Speaking to the first aspect, which is the assumption that the government is out there in the capital market with the private sector trying to seize as much capital as is available, I want to say that either the Treasurer made this statement just for the sake of making a statement or he did not even read his own budget, the one he presented to this House last May. According to the budget, the government has not gone to the capital market since 1978-79. In fact, the Ontario government has been retiring its publicly held debt and not increasing it. In 1980-81, $143 million was retired; in 1981-82, $62 million was retired; and projected to be retired in 1982-83 is $43 million.
If the government has not gone at all to the public market since 1977-78, if the government has been retiring its own debt consistently in the last few years, how can the Treasurer make the statement that wage control will help to decrease the government's demands on the capital market? The government is not on the capital market at all. We know very well that the government is borrowing from nonpublic sources such as the Canada pension plan, the teachers' superannuation fund and other private funds.
If there is somebody who is crowding anyone in order to borrow money, it is Ontario Hydro. I am really flabbergasted by this government, which is perceived by the public as being efficient and speaking with one voice. That is exactly contrary to what has happened. The Premier said: "We cannot control Ontario Hydro because they have expenses and costs that perhaps cannot come within Bill 179 and therefore we cannot control them." The Treasurer should explain why Ontario Hydro this year has borrowed $2.3 billion -- in fact, two weeks ago $450 million.
If the government is telling the people of Ontario it is restraining the wages of civil servants because it wants to fight inflation and lessen the government burden on the capital market, and if the Treasurer really means that capital is needed there to promote investment and create jobs, while at the same time Ontario Hydro is drying up the capital market by borrowing such huge amounts of money, I do not think the government can make any credible argument at all to convince either me or the public of Ontario.
The second point the Treasurer made, which is very dear to all the right-wingers, the reactionaries --
Mr. Wildman: Like the Minister of Industry and Trade (Mr. Walker).
Mr. Di Santo: Yes; I will be speaking about the Minister of Industry and Trade and his failure to deal with the problems in the manufacturing sector, but that will probably happen today or Tuesday.
9 p.m.
In the United States, Britain and Canada, ever since Friedman infused some wrong ideas in the heads of people who have not been used to thinking for such a long time that they almost collapse when they try to deal with ideas, the argument goes that government deficits are ruining the economy of the nation. In fact, that is what the Treasurer said: that government demands would decrease on the capital market to ease the pressure on interest rates.
If we look in all seriousness to the past 20 or 25 years, we see that the deficit and the province's debt has not been ballooning. In fact, if we look at the deficit of the entire government sector expressed as a percentage of the gross national expenditure, we see that in 1978 it was 3.207 per cent, in 1979 it was 1.913 per cent, in 1981 it was 0.699 per cent and in 1982 it is 0.116 per cent.
If we look at the deficit in absolute terms, then of course there has been an increase. But everything has been increasing since the upward inflation spiral began. If one looks at the deficit in the public sector in relation to the performance of the economy, it has been decreasing; as I said, from 3.207 per cent to 0.699 per cent, which is not that much.
I think it is a very interesting game that all Conservatives are playing because it is fashionable and because many people are not very well informed. It is just common sense that when you ask a family whether it can spend much more than it makes, the answer is "No." So why should government spend more than it gets in revenue? The answer should be "No."
In the United States during the past two or three years we have seen Reaganomics at work: take the government off the backs of the people, reduce government expenditures, deregulate so that the government does not rule the economy. That is what has been going on in the United States. Many people have become convinced that this is perhaps the right course. Obviously those sitting on the Tory benches and in the Tory caucus have been convinced.
But if the illustrious economists of what we call capitalism, the Adam Smiths, the David Ricardos and the John Stuart Mills were listening to our debate and to the debate that is going on in the western world, they would be absolutely shocked.
When we say that the economy must be sound, that expenditures must be wisely made, we all agree; but we all know that public debt is not an invention of the devils of 1982 or, going back to the Depression of the 1930s, to Roosevelt and his advisers or to Keynes. Public debt and deficit spending go back many years -- actually many centuries -- to the Middle Ages, when the Italians cursed human posterity with the banking system. Ever since then, public debt and deficit spending have been a fact of life.
We have to realize -- and I want to talk plain, common sense language -- that there is a difference between current expenditures and capital expenditures. When people ask, "In your family would you spend more than your income?" then of course you say, "No;" but you know very well that if you buy a house, as I did -- and I am burdened with a mortgage of 20 per cent, which is no fun, nor was it my choice -- you do not spend money that you have, you put a mortgage on your future. When you buy other goods -- for example, if you buy a car -- you are lucky if you can pay cash, but most likely you will pay in instalments and you will put a mortgage on your future.
Why should the government be any different? If the government invests the money of its citizens to create the promise of future prosperity, then the government should be entitled to a public debt.
What about corporations? We know what happened to Dome Petroleum, those geniuses of the private sector. They got on the verge of bankruptcy with a $7-billion deficit. Did the government say: "That's bad practice. Let's liquidate Dome Petroleum"? No. They said, "Let's rescue them." When it comes to the government, public deficit spending is bad; when it is the private sector, it is good.
I want to mention that small companies, like IBM --
Mr. Charlton: Small companies?
Mr. Di Santo: That is right. That small company, a corner store operation, has a debt of more than $344 million. But listen to this: The American Telephone and Telegraph company, the famous Ma Bell, has a public debt of $48 billion. Do we see the shareholders crying and going to the president of Ma Bell, saying: "You are a bad businessman. We are going to hang you"? No.
Only when we come to the public sector is deficit spending bad; but it is not bad when they make the wrong decisions, as when they spent millions of dollars to buy a share of Suncor. I do not know what good it will do for the people of Ontario, but certainly it did not do any good in controlling what is going on there.
Those are the arguments the Treasurer made to justify controls. If we look at each one of them individually, as I did, we find that the private cost reductions, the public sector burden on the economy, the private sector downturn, the decreasing government demands on the capital market and the demonstration effect are spurious arguments; they do not make sense.
9:10 p.m.
The Treasurer made absolute statements without justifying them. I do not think he is willing or able to justify or substantiate them. I think that when any government makes such a serious decision as to impose on some 500,000 people in the province a bill like this, which is dictatorial and arbitrary in its conception, it at least has the moral responsibility of giving a justification that makes some sense. The government is unable to do that.
It is even more ridiculous when we have people like Ian Sinclair, chairman and chief executive officer of Canadian Pacific Enterprises, who made $556,228 in 1980, in charge of the federal government's monitoring body to see whether those civil servants should receive more than six and five per cent wage increases.
Mr. Philip: Even the Speaker, who pays $200 for a veal cutlet, does not earn that much money.
Mr. Conway: And we won't talk about Gordon Cressy.
Mr. Di Santo: I want to tell my friend that the comparison is not very good.
I want to mention those people who are not affected by Bill 179 and tell members how unfair the bill is. The president of Alcan Aluminum makes $530,000. What will his salary increase be in 1982? Do members think that going through Bill 179 will tell them how much his increase will be? We do not know. But even assuming that his salary increase will be five per cent, he will have an increase of $25,000. If there is any justice at all in our system, the salary of the president and chief executive officer of Alcan Aluminum should be one of the salaries under control; but it is not.
How much does the president and chief executive officer of Bell Canada make? Bell Canada is always making applications to the Canadian Radio-television and Telecommunications Commission. They were granted 27 per cent because they were able to demonstrate that they had increased costs and therefore deserved increases in our bills.
The president of Bell Canada, Mr. de Grandpré, poor guy, makes $626,000. How much will his salary increase be in 1982? We do not know. Perhaps even the members of the Conservative caucus do not know, because people like the president of Alcan Aluminum, the president of Bell Canada and the president of Canadian Pacific Enterprises are the people who really run the country.
The people sitting on the other side of the House are the executors of orders that come from they do not know where but, because of loyalty and their personal predicament, they have to follow the orders.
Mr. Philip: From the federal Liberal government too.
Mr. Di Santo: Of course; they also run the federal government there. I will be speaking about that later.
I have explained why the justification given by the government does not make sense. The Treasurer and the Premier have made statements without having the decency or the ability to substantiate them.
Let us see how Bill 179 affects the people. First of all, provincial and municipal agencies, boards, commissions, university and school board workers; second, Brewers' Retail prices for beer; third, hospital and nursing home workers, including physicians on salary at hospitals, ambulance service drivers and group home workers; fourth, crown corporation employees, tuition fees, Toronto Transit Commission workers, elected officials and judges and employees of charitable organizations funded by the province, such as children's aid societies -- these are the people who are in.
Let us see who is out: doctors who provide services for a fee; workers earning less than $15,000 a year in otherwise controlled jobs, who will get slightly more than five per cent, between $750 and $1,000.
What is controlled? Hydro and natural gas rates, Blue Cross and Green Shield insurance premiums, GO Transit and intercity bus fares, government licence fees and Ontario Place admission.
What is not controlled? TTC fares, Ontario health insurance plan premiums and most private insurance premiums, Bell Canada telephone rates, rent hike ceilings, public housing rents and food marketing boards.
Fairness was one of the concepts mentioned by the Premier when he said these controls were inequitable but necessary. Is it fair that TTC fares are not included?
Mr. Foulds: Certainly not.
Mr. Di Santo: Certainly not, and somebody must explain to us why they are not included when the salaries of the people who use the TTC are included.
I do not want to express a personal opinion, but I wish the people sitting on the other side of the House had read the Globe and Mail, which is a journal that is in the sphere of thinking to which they belong. That newspaper had a long article on the subway systems in London and Paris. While in London they have the same system as we have in Ontario -- high fares to balance the budget -- in Paris they have low fares. The article told what it called the tale of two public transportation systems and went on to say why the system in Paris is successful but the one in London is a flop. In London, the costs are increasing every day and every year and the ridership is going down, therefore defeating the purpose of a public transit system.
9:20 p.m.
I can understand why Bell Canada's telephone rates must be exempted: they have always been exempted. In this country, Bell Canada is one of the monopolies that have been virtually uncontrolled, even though there is the farce of applications to the Canadian Radio-television and Telecommunications Commission. They dictate to the government what they want, even though they do not do that brutally or openly.
That is probably one of the reasons the salary of the president of Bell Canada went up from $514,000 in 1980 to $626,000 in 1981, an increase of only $112,000. Of course, to sustain that increase next year as well, it is necessary that Bell Canada squeeze more money from the users; therefore, the government thought it was wise to exempt them.
Who is out? The doctors. An argument has been made that the doctors are not civil servants. Everybody knows that. We know the doctors are not civil servants. We also know that the doctors draw most of their incomes from the Ontario health insurance plan. OHIP happens to be a public plan in Ontario.
In addition, we know that the Premier is holding secret meetings with the doctors -- secret to the point that not even the Treasurer participates in those meetings, as he told us the other day: "I was not privy to those meetings; so I do not know anything." They are secret to the point that only the Premier sits down with the doctors. There must be a good reason, because time and again we have heard the Minister of Health (Mr. Grossman) and the Premier say: "We want to protect that benevolent profession. We do not want to attack them."
The government did not think twice when it had to attack the civil service because, as far as the government of this province is concerned, the civil service is made up mostly of lesser human beings, second-class citizens. But the doctors cannot be touched. The Premier and the Minister of Health have always said: "We will go and talk to them. We will go to the president of the Ontario Medical Association. They are reasonable people, and they will understand." But for the civil servants there is the axe, Bill 179.
Last week, the deputy leader of my party said that the doctors are drawing from the budget, only because of their increase, $1.6 billion more than the whole of the civil service, 55,000 civil servants, draws in wages. But the government did not even think for a moment to ask the doctors to make a sacrifice on the basis that it would be the fair thing to do since we are asking the civil servants to make a sacrifice. Incidentally, when the government is not dealing with wages, the civil servants are always outstanding; but when it comes to a restraint program, they are the first ones to be axed.
The government could have told the doctors that since the civil servants are being asked to make a sacrifice, they perhaps could slightly reduce their increase, not their incomes. One of the mystifications of our age is the fact that we always use statistics and when we talk about five per cent, it is an abstract that does not reflect reality. If we are talking about a five per cent increase on a salary of $10,000, then it means something. But if we are talking of a salary of $100,000, it means something completely different. We are talking of $500 and of $5,000.
If the government had told the doctors of this province that they had to make a sacrifice and slightly reduce the increase of their take from OHIP, I think the doctors would have accepted that. I think they realize that we are in difficult times, that any sacrifice which must be made should apply to every group in our society and that they cannot escape public criticism if they do not accept a reduction in their salaries.
The government does not have the moral fortitude to go to the doctors and ask them what they would have done. That is what happened in British Columbia. When the government of British Columbia expressed the idea of reducing salary increases to civil servants, the doctors of the province went to the government and said, "We will give back $60 million because we want to participate in this program of restraint." But not so in Ontario.
A former president of the Ontario Medical Association sits in the cabinet, and in her speech on Tuesday night she did not mention doctors at all. She was the Minister of Health a few years ago and knows what is going on. She knows that OHIP premiums are increasing constantly in Ontario and are the highest in Canada, and that we are one of the few provinces that charge premiums. Yet she made no mention of this.
Mr. Philip: She is opted out, isn't she?
Mr. Di Santo: She is opted out. My friend the member for Etobicoke leads me to the next point, why OHIP premiums are not controlled. While no one could convince me that they are not an administered price, an even more important aspect is that in this province, the law of Ontario -- which is the law of the Tories, because they have a majority in this Legislature -- allows the doctors to bill the patient above the OHIP schedule, to be paid by OHIP and to bill extra. That is a very serious matter for all those people who must go to a gynaecologist or other specialist in small towns where the doctors are opted out and they must pay more than the fee paid by OHIP. This is a contradiction of the concept of universal coverage, which I thought was one of the achievements of this society.
The government of Ontario and the Minister of Education (Miss Stephenson) do not have the moral fortitude to even mention this problem; and it is a problem. In many areas in my riding, Downsview, old people whose sole income is their pensions are required to pay very substantial doctors' fees.
9:30 p.m.
It is fine for the government to roll back the $15,000 to $18,000 wages of civil servants, hospital workers, caretakers, teachers, but the salaries of the doctors are untouchable.
I am going to talk about rent ceilings and rent increases.
Mr. Philip: I have already done that. Read my speech.
Mr. Di Santo: My friend the member for Etobicoke, invites me to read his speech. I would be very honoured to do that, but if I did I would not sound very genuine because my learned friend expresses himself in a way that I will never be able to do. Therefore, I will try to make my case in the simple words I can use in this Legislature, hoping that my friends will not be ashamed of me.
Mr. Philip: I am never ashamed of you. I am ashamed of those rascals over there.
The Acting Speaker (Mr. Cousens): On Bill 179?
Mr. Di Santo: Mr. Speaker, the speech of my friend the member for Etobicoke was on Bill 179.
The rent ceilings are not controlled. The government knows very well what is going on in Ontario and Toronto, thanks to the policies of the right-wingers at Queen's Park and municipalities outside of Metropolitan Toronto. That is another aspect, an abhorrent aspect of public life in this province, that the Tories, by hiding behind the "independent" label, have been able to occupy all public positions in the municipalities and school boards for an incredible length of time. Therefore they have been able to impose on the public their policies, disguised as independent policies.
Thanks to the policies of this government and the municipalities we have seen, especially in Metropolitan Toronto, a new phenomenon that has literally deprived people of access to rental accommodation. Increasingly in the last few years, we have seen small and not so small rental buildings transformed into condominiums, in many cases luxury condominiums, with the blessing of the municipalities and the Tories and the Liberals in the city of Toronto.
Because of that process, right now in Metropolitan Toronto the rate of vacancies --
Mr. Philip: Here comes the Minister of Transportation and Communications (Mr. Snow) with his tuxedo on. Did you pay another $200 for dinner tonight?
Mr. Di Santo: I must say that of the whole Conservative caucus the minister's shirt is the only bright spot. The Minister of Revenue (Mr. Ashe) is envious.
Mr. Philip: Is he not growing penicillin on that lapel?
Mr. Di Santo: I am intrigued by the conversations which are going on and which are quite interesting. They make me a little bit anxious, because I quite often have to struggle to keep the line of thinking of my speech.
I was talking about rents and I was saying that because of the policies instituted, especially in Metropolitan Toronto -- this is the only situation of which I am aware, but I suspect the same situation applies to other major cities in Ontario, like Ottawa, Hamilton, Windsor and London, but I can only talk about Metropolitan Toronto -- the rate of vacancy is so low that for the first time in many years it is far below one per cent.
What does that mean? It means that if there are no rental accommodations available, if many buildings are transformed into condominiums or luxury condominiums, then the people who are looking for apartments or any other rental accommodation are put in the most thankless position of either accepting high rents or living in the open. Since they cannot live in the open, then the rents are going up to levels that are totally unacceptable. For many people, it becomes really a suicidal proposition.
Mr. Roy: Why do you punish us like this?
Mr. Di Santo: The member for Ottawa East is asking me why I am punishing him. I must reiterate for his benefit and for the benefit of the assembly, through you, Mr. Speaker, that we are prolonging this debate because we know that Bill 179 is a wrong bill and we want the people of Ontario to become aware of the unfairness of this bill.
Hon. Mr Ashe: You just do not grasp the reality of the real world out there, what people are saying and thinking.
Mr. Mancini: He has the right to speak. He was elected just like you.
Hon. Mr. Ashe: You were not listening. Go back to sleep. That is not what I said.
Mr. Di Santo: The Minister of Revenue is invoking the realities of March 19. There will be another March and it will not be March 19 and --
Mr. Speaker: Back to the realities of Bill 179.
Mr. Di Santo: -- I am not so sure that the minister will be re-elected, because the same trick will not work twice.
9:40 p.m.
Mr. Speaker: Never mind the interjections.
Mr. Di Santo: Mr. Speaker, that is an open provocation, let alone an interjection.
Mr. Roy: What did we do to deserve this? Them, not us.
Mr. Di Santo: With respect, I do not know why we deserve that government; but I did not elect them, and the member for Ottawa East is right.
I was talking about rents. I was saying that, given the fact that rental accommodation is decreasing substantially because of the policies of the municipal Tory and Liberal politicians and this government, therefore the rents that tenants are asked to pay are excessively high. Ironically, even the former Minister of Agriculture and Food -- I do not know what he is minister of now --
Mr. Philip: Minister of patronage.
Mr. Di Santo: -- had to appeal to the rent review commission because his rent was increased to some $700 or $800 a month. Not everybody is as wealthy as the member for Cochrane North (Mr. Piché), who can pay $1,000 a month for rent.
Mr. Havrot: How do you know that? It is only $850.
Mr. Di Santo: The member for Cochrane North told me; that is how I know. I said not everybody is as wealthy as the member for Cochrane North, who can pay $1,000 a month for rent.
Mr. Speaker: I do not think that has anything to do with Bill 179.
Mr. Di Santo: Mr. Speaker, it is to the point. I know the member for Cochrane North accepts my remark as a compliment.
I was saying that because of the situation created in the rental market, many people are now virtually excluded from renting an apartment or a house. Therefore, if it was necessary to control anything at all, rents should have been at the top of the list. Instead, the government said, "No ceilings on rents," when we know that rental accommodation in buildings built after 1976 is totally exempt and that buildings built before this date are subject to the rent review process, which has become a total farce.
I mentioned earlier the example of some of my constituents who live on Trethewey Drive in Downsview, who have been asked for a 54 per cent increase in their rent. Of course, among them there are senior citizens. A couple of senior citizens in their late seventies are absolutely devastated and do not know how to handle the situation because they thought their rents would go up by six per cent.
Instead, I am now going to represent them at the rent review hearing. They are faced with a huge rent increase and do not know what to do. Most likely they will be faced with a landlord who either has recently bought the buildings -- four buildings are involved -- or has refinanced the buildings. The rent review legislation also allows the landlord to refinance and to charge 70 to 85 per cent of the mortgage to the tenants.
If something should have been controlled in order to give at least a semblance of fairness to the controls imposed on civil servants, rents should have been one of those controls. But the government chose to ignore rents, either because of expediency or because landlords usually contribute to the campaigns of the Tory candidates.
In fact, after the last election I went to the election expenses commission and glanced at the returns of many Conservative Party candidates in Metropolitan Toronto. I noticed that in many cases Cadillac Fairview had been very generous and had contributed to each of the 32 candidates in Metro.
I wonder whether the government went to Cadillac Fairview and tried to understand why suddenly it decided to get out of the apartment buildings that it owned and get rid of them. Who is going to benefit from that? Is it not a scheme to trap the tenants in a situation where they could be faced with incredible increases in their rents?
I really do not know that, but we have seen no reaction from the Minister of Municipal Affairs and Housing (Mr. Bennett). We have seen no statement at all. We are faced with what I think is a major decision of a major company that bears quite a weight in rental accommodation.
If Cadillac Fairview's action results in an inordinate increase in rents then I think the government has the moral responsibility to look into that deal. More, it has the moral responsibility to impose some rational ceilings on rent increases so that people who are renting apartments can look forward to a situation of not being faced with increases which in many instances amount to a great chunk of their wages.
I do not want to mention the senior citizens, pensioners, disabled people, single parents, all those people who are less able to fight inflation, less able to absorb increases that are much higher than their income.
It is for this reason we in this party have been saying that this bill is wrong, not only because it does not solve any of the problems it is purported to solve, but also because it applies to only one group of citizens. It does not apply to prices. In fact, the control of prices is a farce. The Premier and the Treasurer have said time and again that they appeal to the private sector to control wages; they appeal to the private sector to control prices, but they are certainly not controlled by Bill 179.
9:50 p.m.
The same also applies to public housing rents. Initially, when public housing was instituted in Ontario, it had the purpose of responding to the needs of people who could not go to the so-called free market and rent an apartment or house. Because of their income, because of their health, because of their family situation, they were forced to rent houses that were lower priced than those in the market and were related to their income. Initially, rents in public housing were set through the public housing authority at roughly 25 per cent of the incomes of the people who entered. In this bill there is no control at all on public housing rent increases.
I want to bring to the attention of the House what was reported to me just recently. The fact that rents in public housing are not subject to rent review control means in effect that at 710 and 720 Trethewey Drive the rents have been increased from 18 to 27 per cent in the last year alone. That could be checked by the Minister of Municipal Affairs and Housing, and I plead with him tonight to check into that. Regardless of the increase in the incomes of the tenants, last night I had a senior citizen in my office, Mrs. Dorothy Wellwood. She is a pensioner who lives by herself. Her rent was increased by 18 per cent this year, but her pension was not increased by 18 per cent.
The original role of setting the rents of the people who live in public housing at 25 per cent of their income does not hold any longer. In fact, if the government had respected that initial agreement with its tenants, it should have increased the rent only by as much as the pensions have been increased.
When we amended the Residential Tenancies Act, the government pretended that this was not a problem and rejected an amendment presented by us that included public housing tenants in the rent review process. They are now excluded and they have no recourse. They are totally at the mercy of the Ministry of Municipal Affairs and Housing.
I thought, and any person of common sense would have thought, that since the government is bringing in a control program, the rents of the people who live in public housing should be controlled as well. Instead, they are exempted.
Interjection.
Mr. Di Santo: What is the Minister without Portfolio saying?
Mr. Laughren: How do you guys justify it? You cannot.
Hon. Mr. Eaton: They already are controlled. Their rent is geared to income.
Mr. Di Santo: Instead, the rents in public housing are totally excluded. If there was a rationale for controlling something. I think rents in public housing should have been at the top of the list as well.
Hon. Mr. Eaton: How do they arrive at the rent in public housing?
Mr. Di Santo: Common sense dictates that people with low incomes who have an agreement with the government that they will pay 25 per cent of their income in rent, which was the original agreement, have a right to expect the government to respect that agreement. If the government asks them in 1982 for an 18 to 26 per cent increase in their rent, while their incomes do not increase by more than six per cent and their pensions will not increase by more than six per cent, then somebody is violating an agreement, and that is the government, not the tenant.
I mentioned the case of one of my constituents. I challenge the minister of -- what? -- the minister of nothing, the member for Middlesex (Mr. Eaton), since he has a lot of time, to check into the case of Dorothy Wellwood, who lives at 720 Trethewey Drive, apartment 804.
Interjections.
Mr. Di Santo: The Minister without Portfolio was saying the figures I mentioned are not correct.
Mr. Speaker: That has nothing to do with Bill 179.
Mr. Di Santo: Yes, it does. With all respect to you, Mr. Speaker, I was --
Interjections.
Mr. Speaker: Interesting as this may be, I am sure the member for Downsview has some very important observations to make on Bill 179.
Interjection.
Mr. Speaker: Order.
Mr. Laughren: On a point of privilege, Mr. Speaker: I cannot recall whether or not you were in the chair a week or so ago when the member for Cochrane North was speaking and spent an hour talking about why the Premier should have this little toy called a jet. At that point no one called the member to order. I would assure you I did not get on my feet now just to give the member for Downsview a rest either.
Mr. Speaker: I think the member for Downsview has some very important observations to make.
Mr. Roy: Odoardo, why are you doing miss to us?
Mr. Di Santo: Mr. Speaker, I am very sympathetic to my friend the member for Ottawa East, but I think he must understand that this is a very crucial bill. We cannot have this bill passed without a thorough debate and that is what we are doing.
Mr. Roy: I agreed with you six hours ago. Why do you do this to me?
Mr. Speaker: Never mind the interjections. Proceed, please.
Mr. Di Santo: Mr. Speaker, I know I have your sympathy and I thank you.
Hon. Mr. Norton: It is not a matter of sympathy.
Mr. Di Santo: I want to tell the Minister of the Environment that tomorrow I will be talking about his ministry as well.
10 p.m.
If Bill 179 has any justification at all, then there should be some compensation on the side of prices. I mentioned today what Mr. Gerald Bouey told the Canadian Chamber of Commerce when he said the prices of some major commodities have been increasing way over six per cent, but unfortunately the government had no choice but to restrain wages. Also on the issue of prices, there is a survey by Statistics Canada of the annual increase in the price of goods and services, both under and outside federal regulation. The study shows that regulated prices increased 17.7 per cent from April 1, 1981, to April 1, 1982, while unregulated prices rose 9.1 per cent. In the same period, the consumer price index rose by 11.3 per cent.
That tells us that, if the government was really serious about controls, before introducing controls on the wages of public employees, it should have taken a very serious look at regulated prices that are under the control not only of the provincial government but also of the federal government. Perhaps it would have found a way to control them as well.
It is true that some prices cannot just be rolled back. We understand the realities of the economy, but we also understand that if unregulated prices, the prices on the market, have risen by 9.1 per cent, there must be some justification for the increase in regulated prices. The government has not made any attempt to bring under control the prices that are directly dictated by the government.
It is not difficult. I believe it is greed on the part of the government. What the government does, time and time again, whenever there is money to grab from taxpayers through direct or indirect taxation, is immediately to come down on them very heavily.
The Minister without Portfolio is laughing. He should try to explain to his constituents why the government changed the provincial tax on gasoline and imposed the ad valorem tax. Why? Because with the ad valorem tax, it is ripping off more money than it was before.
That is the same rationale used by the federal and Alberta governments for their price agreement on the increase of oil products. It was not for the good of Canada, in order to promote self-sufficiency, as the Energy minister said at the time, but because it increases the share of money that is going into the federal budget and, in this case, the provincial budget. That does not always work according to plan. By increasing their share of taxes from oil products, the federal government thought they could reduce the federal deficit and therefore come to the people of Canada as the good administrators they are, but it did not work that way. They introduced a budget last November with a $10-billion deficit. Six months later they came out with a budget with a $20-billion deficit. Despite the ripoff of the people who are using oil products, their deficit increases.
If there was any justification to this program, there should have been something on the side of prices, but prices have remained untouched. The unfairness of wage controls becomes even more evident when one realizes that the prices of most essential items, including fuel, rent and food, will keep going up at rates higher than five per cent. Since they are not regulated, there is no way that they can go up by just five per cent.
Consider these items: Gasoline went up nine per cent in September. More increases are scheduled for January and June of 1983. The accord between Alberta and the federal government provides for increases that have no relationship with inflation, productivity or performance of the economy, but the price will go up until it reaches the world market price. And they will go up in Ontario twice because of the ad valorem tax, which is a gift the government of Ontario has given to the consumers of this province.
Interjections.
The Acting Speaker (Mr. Cousins): Order. The member for Downsview has the floor and is speaking on Bill 179.
Interjections.
The Acting Speaker: Order. It is very difficult for the member to continue his presentation with these interjections.
Mr. Di Santo: I am very anxious to proceed if the members, including the Minister of Revenue, will have the courtesy to allow me to speak.
I said that while there is a control imposed on the wages of civil servants by Bill 179, gasoline prices will go up because of the accord between the Alberta and federal governments. The automobile insurance industry will impose increases on us poor mortal people. The increases will not be five per cent. They will be between 30 and 35 per cent. There is no control on them.
10:10 p.m.
If they have to justify why the increases will be so substantial, they can find a number of reasons. The government will listen to them and say: "Well, they are right. The rate of accidents is higher, the costs of repairs are going up; therefore, they are justified in asking for an increase of 30 per cent." But the civil servants are not. They are the people who have to pay more for gasoline and insurance premiums, but their wages will go up by only five per cent.
OHIP premiums will go up by 17 per cent on October 1, mainly to pay for the 41 per cent fee increase won by Ontario doctors over the next three years, a wage hike that has not been rolled back. Now, if there is a price the government could have controlled easily, it is OHIP premiums. I said that before. OHIP premiums in Ontario are the highest in the country, and only two other provinces have premiums; in seven provinces there are no premiums.
I do not think the government can make a case by saying that since we in Ontario have the highest premiums in the country, we have the best medicare in the country. We know very well that Ontario is the province where the rate of opted-out doctors is the highest and where the cost of medical care is going up incredibly year after year to the point where many people are wondering whether it will work in the future and whether we will be able to retain a public system of medicare in this province.
What has the government done in this area? Nothing. Zero. OHIP premiums will be excluded from Bill 179. Who will pay for that? The president of Bell Canada, the president of Alcan, the president of Canadian Pacific Enterprises? Not at all. The ordinary citizens of Ontario, the ordinary workers, the white collars and blue collars of the province; and those who are unemployed, will pay.
Many people are losing not only their jobs but also their fringe benefits, unemployment insurance benefits and other benefits, including OHIP coverage. Those people are called upon to pay an increase of 17 per cent on October 1, and they can least afford it. For them there is no justice, no fairness. The government will not control increases.
As established in advance, the OHIP premiums will go up, by 17 per cent on October 1, 1982. In many cases, because of the opted-out doctors in the province, that not only means an increase in OHIP premiums, which are not regulated by Bill 179, but also means that on top of the OHIP premiums those citizens will be asked to pay higher fees to the doctors because the fees of the doctors have not been regulated. In fact, the Ontario Medical Association schedules are only indicative. I do not think that is fair.
If we are talking of fairness, then somebody must explain to me why on one hand the government wants to cut back the wages of the civil servants and on the other hand it does not control a price that is clearly administered by the province.
Another price that has not been controlled is rents. In Metropolitan Toronto the average rent increase in 1981 was 18.8 per cent. This year twice as many landlords are seeking increases above the proposed six per cent as previously. I am summarizing what I said before. There is no justification for leaving out rents from Bill 179 but the government, in its wisdom, chose to do that.
Ontario Hydro has asked for a hike of 13.9 per cent in its wholesale bulk power rates for 1983. I said before that when the Premier was asked whether Hydro rates would be controlled, he said flatly: "No. There are costs that Hydro must pass on to consumers, because they are either unforeseeable costs or costs they cannot absorb; otherwise, Ontario Hydro must go to the capital market and increase its debt position."
We know very well, as I said before, that this year Ontario Hydro has borrowed some $2.2 billion and, only two weeks ago, $450 million. So the Premier's argument makes no sense at all.
Union Gas, a company that is probably dear to the heart of the Tories because the president is the former Treasurer of the province, has asked for an increase of, I think, 17 per cent. It was in the Globe and Mail today. They will get 17 per cent. The consumers of Ontario, including the civil servants of the province, all will pay a 17 per cent increase because the government has chosen not to control the rates of gas in the province.
The Inflation Restraint Board will not even deal with this issue. We know that the act provides it will dealt with by a cabinet committee, which means there will be no public input. The public will be completely unaware of the dealings that will go on between Mr. Macaulay and the Premier. They are good friends and understand each other's language. The public will not know anything of the dealings that will go on between Mr. McKeough, the former Treasurer, and the Premier. They are good friends. Mr. McKeough had to resign his seat because the Premier would not make room for him, but they are still good friends.
The public will be completely cut off from any discussions, but they will pay for the increases in prices that they will decide in a friendly way, talking around the fireplace, without public input. And what happens to the consumers of Ontario? How will they be protected? There will be nobody to protect them. But the civil servants, yes, their wages can be axed. They will have cutbacks and the bill will call on them to make sacrifices.
10:20 p.m.
There is a question that must be asked: Will curbs work at all? We have said before that we do not understand the justification, we do not understand the logic behind this type of control. But will it work? It is interesting to see what some of the major economists of the nation say.
One of the most qualified economists, Professor Lorie Tarshis, is 71 and a pensioner. She said: "I am a pensioner, and I am one of those most interested in seeing that inflation comes down. I am living on my pension, and my pension is not indexed." She said that controls will not work, that governments throughout the world are preoccupied with fighting inflation when they should be trying to revive sick economies. I must say that Professor Tarshis is not a Socialist like me, but on broad lines could probably be defined as a liberal in the American sense. Professor Tarshis said we are taking the wrong medicine.
I want to mention two other economists, Professor Morley Gunderson and Frank Reid of the University of Toronto Centre for Industrial Relations. They said, "There is little evidence to support the widespread belief that public sector wage settlements have been an important factor in the recent inflation." This is a euphemism meaning that public wages have risen in the past five years below the inflation rate.
Professor Gunderson said his own studies have shown that public sector employees have had only a slight wage advantage over private sector employees and that it exists mainly among lower-paid female workers.
"I do not think that a school of thought exists anywhere that public sector controls are the answer," Professor Reid said.
Professor Gunderson said, "We suspect the federal and provincial programs were politically motivated and timed to make them look successful." "Whether or not the public sector controls were needed, it looks good," he said. "If the programs succeed in reducing government deficits," Professor Reid said, "there will be less spending and fewer jobs for the private sector. It is going to worsen the recession."
Professor Tarshis also said that if the programs reduce spending by those whose wages fail to keep up with inflation, the reduced demand for goods and services could lead to more business failures and more unemployment.
Professor Gunderson said something that we had always suspected and that Senator Keith Davey made quite clear and blatant when he distributed his red book to all the Liberal MPs in Ottawa. He said that the success of the six-five program will be the success of the Liberal Party; if it does not work it will be bad for the Liberal Party, and we should give the impression that the economy is in progress.
Professor Tarshis also said something that is understood by everybody, all the people in the street: If you substantially reduce the wages of one group in our society, then there is less demand for goods. If there is less demand for goods, there is in turn even less work for those workers who produce goods and therefore there is more unemployment. Since the economy is a circle, if there is more unemployment the people who are unemployed will demand fewer goods, and then the circle will perpetuate itself.
We can see this right now in the construction industry, where high unemployment is producing further unemployment in the industries that supply goods and products to the construction industry and therefore to the service industries related to that industry.
Unless we break that circle, I think the government is playing a very dangerous game. By curbing the wages of the public service, the government is not solving the real problem of Canada and Ontario: the real problem of jobs, the problem of an economy that is languishing and needs to be revitalized with ideas that are vital, not with these games that are trying to save the government or, as Professor Tarshis said, to make the government look good.
This is not a gimmick. We are dealing with the problems of hundreds of thousands of people who are suffering because of a critical economic situation, who are looking to the government for a sign of hope and who are receiving an axe from this government. They are receiving an answer that is totally unsatisfactory.
The government knows that by axing the wages of the public service, it does not solve any problems in this province. The government knows very well that we need much more than that. The government knows very well that the problems of our economy are much deeper. What is lacking is the political will. I hope the government will withdraw this bill.
On motion by Mr. Di Santo, the debate was adjourned.
The House adjourned at 10:30 p.m.