Hansard Transcripts 1982-Oct-08 | Legislative Assembly of Ontario

Yesterday there were some questions raised by the Leader of the Opposition (Mr. Peterson) to the Minister of Industry and Trade. The questions related to the minister's information that some 800 jobs would be created by the transfer of some important production lines to the St. Thomas plant of Clark Equipment Company of Canada Ltd. The Leader of the Opposition challenged the minister with respect to his assertion, making reference to earlier comments by a company official.

In point of fact, the company has apologized to the minister and has now issued a press release supporting his figures. To quote from that press release: "Clark Equipment Company of Canada Ltd. clarified today employment figures which were announced yesterday by company officials and the Honourable Gordon Walker, Minister of Industry and Trade.

"According to Charles A. Kiorpes, vice-president and general manager for Clark's construction machinery division, Mr. Walker's employment figures are correct because the addition of products to the St. Thomas plant will gradually add approximately 800 jobs to the area.

"We apologize for any embarrassment to Mr. Walker regarding this misunderstanding."

It is now clear that St. Thomas has received some very good news. I am confident that this assembly will treat it as such. If there is any further elaboration needed on the quality, the nature and so forth of the apology, why do members not read the London Free Press?

Mr. Peterson: Mr. Speaker, we have seen the Free Press this morning, or at least have had it read to us, and I am aware of some of the circumstances that surrounded this unfortunate incident. I want to say I am very happy about those jobs even though there is some question about how many there are and in whose judgement there will be certain numbers of jobs, either direct or indirect, in the area.

I just wanted to put this on the record to make sure there is no misunderstanding. At 11:45 a.m. yesterday Mr. Gilbert, the same person who presumably released the statement my friend is quoting from and which was in the Free Press this morning, said that the consolidation was taking place immediately, but he had no idea, at 11:45 a.m. yesterday, where the 800-job figure or the 2,000-job figure came from. How far the company got to the 160 laid-off employees would be totally dependent upon the economy, hopefully by mid-year, he said.

At 2:50 p.m. yesterday there was a further conversation with Mr. Gilbert, the president of Clark Equipment of Canada Ltd. He confirmed having had confidential discussions with the minister. Obviously there were some discussions with the ministry at this point because the embarrassment of this incident was coming to their mutual attention. He discussed, among other things, future speculative levels of production and employment. The figure of 800 jobs at 2:50 p.m. yesterday was not related to the plant exclusively, but to the area at large. He would not comment on the question of whether he authorized the Minister of Industry and Trade to release the figures.

We also know that Mr. Kiorpes, the vice-president who was quoted on the radio yesterday, said, "I don't know who Gordon Walker is. I am sure whoever he is and wherever he got his statistic, he believed he was correct." There is obviously a great deal of misunderstanding on this question. It is obvious to me that because of the ministry's embarrassment, they got to Clark Equipment yesterday, as they do in their ways, to get them to retract. That is fine. They are quite entitled to do that, but I just want the record to show that that is the way the whole incident progressed. I gather they felt the pressure and that somehow in the corridors of power they were mugged like everyone else.

Hon. Mr. Drea: Mr. Speaker, in the absence of the Minister of Industry and Trade, may I say I am sure the Leader of the Opposition did not really intend to put a conveyance on the phrase "the ministry got to" that might be misunderstood.

Mr. Peterson: It's obviously the same way you got to Morley Rosenberg.

Mr. Nixon: Actually, Morley got to them.

Hon. Mr. Drea: Mr. Speaker, in the absence of my colleague, I was prepared to be relatively calm about this. The Leader of the Opposition yesterday started out by saying he wanted to end some confusion. I would suggest the confusion is ended. To quote again from their release, the minister's employment figures are correct. The company put that out.

It is very difficult, in the absence of the minister, to raise things such as the credibility of the ministry and so forth, but I would think that the assembly might be best advised to accept the statement of the company in the light that it is issued. In that light it is to clarify the matter of exactly what production facilities will be transferred to the St. Thomas plant and how many jobs will be created. Above all, it is certainly a most remarkable event for the community of St. Thomas, which has been buffeted very severely by the recession.

Mr. Speaker: I understand the matter has been clarified exceedingly well.

COMMONWEALTH PARLIAMENTARY ASSOCIATION

Mr. Speaker: If I may have the concurrence of the House just for a moment to read a statement I did not have earlier. I would like to make a brief announcement.

The pages are now distributing to each member lapel pins for the use of members of the Ontario branch of the Commonwealth Parliamentary Association. The design of the pins has been adopted for the use of the Ontario branch of the CPA and establishes a symbol which is separate from the coat of arms used by the Legislative Assembly and from the symbol used by the headquarters secretariat of the Commonwealth Parliamentary Association.

10:10 a.m.

The new symbol was designed by Bob Carter of the office of the chief election officer. The pin has two component parts. The first is the mace, which is a symbol of the authority of the Speaker and the House. The second is the silhouette of the province. The colours, gold and green, are the colours assigned to the province by royal warrant issued by Queen Victoria on May 26, 1868: the gold of the three maple leaves shown in the gold of the mace, and the green of the field of the crest shown within the boundaries of the province.

The pins are not for general distribution but are for the use of members of the Commonwealth Parliamentary Association.

ORAL QUESTIONS

UNEMPLOYMENT

Mr. Peterson: Mr. Speaker, I would like to put a question to the Premier, in the absence of the Treasurer (Mr. F. S. Miller), about the alarming unemployment statistics that came out this morning.

No doubt the Premier is aware that the national figures are flat, the same this month as they were last month. No doubt he is aware that in Ontario the situation has deteriorated over the last month and the actual unemployment rate has increased from 10.1 per cent to 10.3 per cent. Seasonally adjusted, it increased from 10.8 per cent to 11.1 per cent. In fact, there are 25,000 fewer people working this month in the province than there were last month.

When is the government going to come in with some job creation programs?

Hon. Mr. Davis: Mr. Speaker, I think the Treasurer has covered this in the last two or three days on a number of occasions. Any answer I might give would be somewhat repetitious, but I shall repeat what he said.

I think the Treasurer has outlined this government's concern with respect to the unemployment figures, which we find totally unacceptable. I have just had some rather hurried information with respect to the Ontario figures. I think they reflect the still rather stagnant or difficult experience in the auto sector which, of course, also has an impact upon the steel industry. It also reflects the lack of demand in the marketplace for some of the base metals: nickel and many others. I think the Treasurer clearly indicated that we are more than prepared to sit down with the government of Canada to deal with some national economic policies.

I will not get into the musical chairs that have been played and some of the delays which have occurred and which, quite frankly, are understandable in terms of a response from the government of Canada. As recently as Wednesday evening, I urged the Prime Minister of this country to convene a meeting of first ministers, hopefully after a meeting of ministers of finance and treasurers to deal on a co-operative basis with some national economic recovery program.

The Treasurer has outlined that if no national approach is taken this government is prepared to take certain initiatives. I should say to the honourable member, because he should be familiar with the basic problem facing the economy of this province, that while this government is prepared to take certain initiatives, they will not alter the problems in the auto sector or the steel sector. Those really depend to a degree on economic recovery in the United States as well as economic recovery here.

In some respect, this province is somewhat more vulnerable than some of our sister jurisdictions because of our dependence on the manufacturing sector. If the member would take a look at the figures, say, from Quebec -- I have not had a chance to analyse those -- I think he would find they would be somewhat similar. If he looked at the United Stated unemployment figures which were released yesterday and which I guess have reached an all-time high, I think he would find, once again, that in comparative jurisdictions, such as Michigan, Ohio, New York, Pennsylvania, etc., the same sort of circumstances are having an impact in those jurisdictions where the manufacturing sector has not yet experienced any real measurable degree of recovery.

This does not in any way suggest that this government is not prepared to take certain initiatives, but they will be determined only after the discussions we hope will take place with the government of Canada. If they do not materialize, the Treasurer will have certain propositions to make to this House.

Mr. Peterson: I can understand the Premier's desire to compare our province with Detroit so he can show up a little rosier than he might otherwise, but the reality is that compared to the rest of Canada we are in worse shape. We are in worse shape than the national average.

The Premier is obviously also aware of the unemployment figures in certain municipalities. Sudbury went from 26.9 per cent to 32.9 per cent unemployment; fully one third of the work force of that city is unemployed. Toronto went from 8.8 per cent to 9.1 per cent last month; St. Catharines-Niagara went from 12.4 per cent to 13.9 per cent; London went from 11 per cent to 11.8 per cent, and it is not particularly dependent on the automotive industry; and Windsor went from 13.8 per cent to 14.3 per cent.

Some of these problems are a function of the downturn in the automotive and steel industries and a variety of others, and it is obvious that an upturn in the United States would help us. We understand that. But it is also obvious to us that we can take some action here in the province. Is it going to be continually the Premier's response just to wait for the federal government and do nothing, even though he has taken many other initiatives on his own in the past, even though in the budget of last year he said, and I am going to quote back to him, "Since the federal government has failed to respond with a decisive and comprehensive set of programs, the government of Ontario has decided to implement new job creation initiatives on its own"?

We have established that there are certain savings as a result of the restraint program, at least over budget. There are moneys available that could be put into --

Mr. Speaker: Supplementary, please.

Mr. Peterson: -- the emergency programs now. Surely that is the Premier's responsibility. Why can he not do something now?

Hon. Mr. Davis: Just to review those communities the Leader of the Opposition outlined in his supplementary question, I think it is fair to state -- and the member in our caucus, I think, would agree -- that the prime problem in the city of Sudbury relates to the downturn in the nickel markets. There is no question that the price of nickel in the world marketplace today is low. The demand is also low, and I guess there is some suspicion on the part of some that other nickel producers in other parts of the world perhaps are selling at below cost. That is a circumstance over which this government has very little, if any, control whatsoever.

I would point out that when the Leader of the Opposition relates the figures in the city of Windsor, I do not think there is any question that they are primarily related to the auto sector and the fact that the marketplace, particularly in the United States, has not recovered in that particular field. If he takes the figures in St. Catharines, another community he mentioned, there is no question that, once again, the auto sector has had some prime impact on that situation. Even if he looks at the city of London, he may find the odd auto parts supplier or machine tool supplier whose situation is more than related to the auto sector as well.

I would point out to the Leader of the Opposition that this government has not in the past been reluctant to take certain initiatives. I should also point out to him that he, more so than some, attempts in economic terms to have issues both ways. When he was finance critic for the party, after very careful deliberation he kept reminding the Treasurer that he should be reducing his deficit, moving towards a balanced budget and restricting expenditures even further. I think that was his position not very many months ago.

Interjection.

Hon. Mr. Davis: If the member for St. Catharines (Mr. Bradley) wants to take time out and leave the chamber, be my guest. His contribution outside the chamber probably will be a lot better than it is here.

Interjection.

Hon. Mr. Davis: I would say to him that I doubt he is ever in a state of grace.

The Treasurer has already indicated, barring some national co-operation, some national program, this province is prepared to take certain initiatives. He also pointed out that we are limited in those things we can do. We cannot create a market for automobiles; we cannot create a market for combines; we cannot create a market for nickel. Those things are really beyond our capacity. I confess that to him.

Mr. Foulds: Mr. Speaker, does the Premier recall the slogan in the recent provincial election, "Davis can do it"? Now he is telling us he cannot do a thing about unemployment in this province.

Would the Premier specifically take a look at the startling and disturbing figures for youth unemployment in this province of 17.3 per cent? The number of unemployed there is 183,000, and there has been a six per cent increase in the last 12 months. Will he tell us specifically what the youth secretariat and the Minister of Labour (Mr. Ramsay) are going to do to alleviate that disturbing problem?

10:20 a.m.

Hon. Mr. Davis: Mr. Speaker, I recall the last election very vividly. Quite obviously the honourable member recalls it as well, as do the members of the official opposition, because apparently they have not recovered from it yet. That frustration is still there.

I am the first to confess to the member that there are some things this government can do and there are some things this government cannot do. As I pointed out to the Leader of the Opposition, and I repeat it for the member if he was not listening or could not hear me, we cannot, though I wish we could, determine the market for automobiles in the United States. That is beyond our capacity. We cannot determine the price of nickel in the international marketplace, nor can we determine its demand. I would say to the member we cannot dictate to American purchasers how many combines or harvesters they are going to purchase.

I would say to the member we are quite familiar with the youth unemployment figures. I think we should point out to him that in terms of programs for youth in this province we have taken a back seat to no other provincial jurisdiction and that will continue to be the case.

Mr. Peterson: Mr. Speaker, how long do the unemployed people in this province have to wait before the Premier does something?

Hon. Mr. Davis: Mr. Speaker, that is rather a silly and infantile question. I have had reports on a couple of his tapes. Maybe he wants to get some people to research where Highway 1 is. I think he told Gordon Sinclair he would do that.

Maybe he could get a research assistant to read for him Duplessis by Conrad Black because he thought it too thick, too heavy, and could not accommodate it. One person who saw the program was not sure whether the Leader of the Opposition was preparing for his after-life by trying to get on Conrad's board.

Interjections.

Mr. Speaker: Order.

Mr. Cunningham: What has Conrad Black got to do with it? He is not answering the question.

Mr. Speaker: I was just going to say that those people who are doing the complaining must bear a lot of the responsibility for the responses. If you are not going to have any self-respect, how can you have any respect for the chamber?

The Premier may continue.

Hon. Mr. Davis: May I point out to the Leader of the Opposition that the budget of last spring, which was not supported by the members opposite, I know with some reluctance, as it relates to the housing sector did show a real initiative on the part of this government. I think it is beginning to have some significant impact in terms of the construction industry.

I think it is fair to state in terms of the dollars that have been allocated by way of lost revenue to the small business sector, in spite of their many problems one will find a lot of small businessmen in this province who are totally in support of that program. That does in fact relate to the economy.

I would say to the honourable member, and I repeat it once again, because I know he is embarrassed -- I see even in Broadview the Liberal executive are advising their people not even to vote for his party; although he went to the dinner with the Prime Minister the other evening, I understand, I know he is embarrassed by it -- part of the real problem at this precise moment is that the government of Canada is not prepared to sit down with the other provinces, the other treasurers or ministers of finance, to come to grips with a national economic recovery program.

Our Treasurer has said that that is important prior to this government taking certain initiatives. If the Leader of the Opposition does not believe in that national concept, he should say so; but he should not really try to defend the government of Canada, he is making a mistake in doing so.

HYDRO RATES

Mr. Peterson: Mr. Speaker, I have a question for the Minister of Energy. He is aware that very soon Ontario Hydro is going to have to come out with its new rate increase for next year. He is also aware that many people will be looking at Hydro and at the increased rate to see whether the anti-inflation program of this province, the restraint program, is going to have real teeth and whether the Premier can indeed hold that rate increase to five per cent.

The Ontario Energy Board, in reviewing Ontario Hydro, did not have access to a number of the programs it wanted to review and felt it should review. It did not have details of the field contracts through the hearings. It did not examine the capital cost overruns. It did not examine in any detail the net income requirements and it was prohibited from examining the system expansion program.

Given the fact that there is probably a great deal of room to move in those areas, and the board has recommended no more than an 8.8 per cent increase, would the minister not agree with me that Hydro should be able to come in at no more than a five per cent increase to give efficacy and force to the government's program?

Hon. Mr. Davis: TransCanada came in with 16 per cent.

Mr. Kerrio: That's a copout and you know it. Hydro is out of control.

Mr. Speaker: Order.

Mr. Kerrio: It's the type of thing you do every time.

Hon. Mr. Ashe: Why don't you jump into the Niagara River?

Mr. Speaker: Order. It seems the Leader of the Opposition has some opposition within his own ranks. I would ask the member for Niagara Falls to please --

Mr. Mancini: On a point of privilege, Mr. Speaker: I think that was a very unfair and very poor statement for the Speaker to make.

Mr. Speaker: Order. The member is out of order. Sit down, please.

Interjections.

Mr. Speaker: Order. The member will resume his seat, please. This is the oral question period. The leaders of the two parties have the first two questions. You all know that. If you are not going to respect that, maybe we can open it up to the private members. Maybe that should be given consideration. The Minister of Energy has been recognized.

Mr. Conway: On a point of privilege, Mr. Speaker: I recognize the concern the Speaker has expressed. I sat here and listened to that last exchange. I heard distinctly an intervention from my colleague the member for Niagara Falls, and I would not be fair if I did not acknowledge that. But I similarly heard two very distinct and repeated interventions from my friends the members for Durham West (Mr. Ashe) and Ottawa South (Mr. Bennett). I think they, too, have to accept some responsibility. I would hope that in your adjudication of these difficult matters you would take that into account.

Mr. Speaker: I will indeed, but the point I was trying to make was that the Leader of the Opposition was using the time allotted to him for asking questions. Now, the Minister of Energy.

Hon. Mr. Welch: Mr. Speaker, in response to the question of the Leader of the Opposition, I would point out, as we have pointed out on several other occasions, that the effect of Bill 179, presently being debated in the House, will apply to Ontario Hydro; there is no question about that. So the compensation restraint that is anticipated by the legislation will be applicable.

I would also remind the Leader of the Opposition that the whole question of 1983 rates was sent to and was examined thoroughly by the Ontario Energy Board. They have had full public review. The Ontario Energy Board was asked to come in with its recommendations as to a rate that would be the lowest feasible consistent with sound financial management with respect to the utility.

We now have the results of a public review of the 1983 rate with all of the interventions that were made. We now have the legislation, Bill 179, the impact of which has been communicated to Ontario Hydro. As the member knows, by virtue of its legislation the Hydro board has the responsibility ultimately to establish the rate.

Mr. Peterson: I beg to differ with the minister. The reality is that we have not had a thorough public review of Hydro. I refer to the energy board report which stated, "However, the board must admit that system costs are heavily impacted by the capital program and that little can be done by the board in the way of economy measures to reduce such costs without effective participation in the determination of the systems expansion program," which they did not look at.

Last year it said, "It is recommended that an examination of capital expenditures and cost controls be undertaken by the board in the near future." In fact, there has not been a thorough public review by anyone, let alone the Ontario Energy Board, of all the cost components that go into Hydro.

I am asking the minister for that. Does he not feel we should have a thorough review? Since the energy board cannot do it, why would we not reconstitute the select committee on Ontario Hydro affairs to look into those matters thoroughly in order to keep the rates down?

10:30 a.m.

Hon. Mr. Welch: Mr. Speaker, I repeat that the Ontario Hydro board communicated with the Minister of Energy some months ago indicating what its revenue requirements would be for 1983. These are then communicated to the Ontario Energy Board in accordance with the legislation, and it is asked by the minister to review these particular requirements and the components that go into them and to make a recommendation establishing the lowest feasible rate consistent with sound financial management of the public utility.

The Leader of the Opposition quite properly makes reference to the fact that Hydro was invited by that board to review its capital program. As I responded in answer to a question last week from the deputy leader of the New Democratic Party, the Ontario Hydro board is in the process of reviewing its total capital program.

Mr. Foulds: Mr. Speaker, has the minister sent a letter to the chairman and the president of Ontario Hydro similar to the one he sent to the Ontario Energy Board, dated September 23, outlining in some detail the criteria for increasing prices? Can he table those letters in the House, both the one to the Ontario Energy Board and the similar one he presumably sent to Ontario Hydro, since Ontario Hydro has the sole jurisdiction for establishing its own prices, because it is not bound by the decision of the OEB?

Hon. Mr. Welch: Yes, Mr. Speaker.

Mr. Peterson: The minister will be aware that counsel for the board put forward the argument that the revenue requirements of Hydro could be reduced by some $260 million to $304 million. In addition to that, the restraint program will save some $53 million in terms of salaries over the next year. The combination of those two could easily bring any proposed increase into the five per cent range without any strain on Hydro.

Does the minister not agree with that? Why does he not issue those instructions to Hydro?

Hon. Mr. Welch: I hope the Leader of the Opposition has some confidence in the Hydro board responding to its mandate as set out in the legislation. I repeat once again, the effects of Bill 179 will be implemented and Hydro has been asked to take that into consideration when it make its final determination with respect to rates.

I do not have the report in front of me, but it seems to me there are several paragraphs in that report indicating that the Ontario Energy Board itself recognized the economic situation in which this rate application was being considered and applied that when it was coming up with its recommendation.

Keep in mind that on the basis of the revenue requirements that were submitted to the board, Ontario Hydro wanted an average increase of 13.9 per cent. After a very careful review, the energy board felt, having listened to all the interventions, after days of public hearings -- and I am not sure whether the Leader of the Opposition attended any of those hearings: it might have been a good forum to express the opinions he has expressed in this House before the board that has some responsibility --

Mr. Peterson: I was there about the same amount of time the minister was.

Hon. Mr. Welch: It seems to me that after all that review the board came in with a recommendation that it felt Hydro could get along with revenue somewhat less than it had submitted by way of application, coming up with an average rate for 1983 by way of an increase of 8.8 per cent. That is a reduction of five per cent, even as a result of that particular hearing.

UNEMPLOYMENT

Mr. Foulds: Mr. Speaker, I would like to return to the Premier concerning the unemployment situation in Ontario. Can the Premier tell us very directly, without any equivocation, how he feels to be Premier of a province that is running contrary to the national trend of levelling off of unemployment and having an actual increase from 10.8 to 11.1 per cent?

Does he recall saying in his opening statement on Bill 179 that is now before us, "It is Ontario's view that sustaining and creating employment should continue to be this nation's highest priority"? If I understood him correctly in previous statements this morning, he said the federal government was not prepared to sit down and discuss unemployment.

Does he not think it is time for him to bring in a job-creation and job-sustaining program in Ontario within the next two weeks? Otherwise, the people of Ontario will be facing disastrous levels of unemployment through a very hard and cruel winter.

Hon. Mr. Davis: Mr. Speaker, I am quite familiar with what I said in that statement. The government of Canada has indicated so far that it is not anxious to sit down and meet, but I think the Treasurer (Mr. F. S. Miller) indicated he has had an initial discussion with the new Minister of Finance and has not totally given up on the possibility. He suggested he wanted some time before saying to me or to his cabinet colleagues that there is no possibility for any national approach to the situation.

I reiterated my request the other evening and I intend to continue to pursue that. I have not said that in my view that meeting will never happen. I have been discouraged to date that it has not, but that does not mean we will not continue to persist. That is the answer to one part of the question.

On the other part of the question, I am aware of what I said in the statement. Am I concerned as Premier of the province? My answer to that is obviously yes, although I would point out to the honourable member that one has to be fairly careful in drawing comparisons between our province and, say, Prince Edward Island or Saskatchewan, where the impact in terms of their economic base is somewhat different from ours.

I know the Leader of the Opposition gets upset when I compare our situation in a more realistic way to those states of the union that have a similar economic base to the one we experience in this province, where their figures are really much higher than our own. The Leader of the Opposition is reluctant to mention that. However, during the last campaign, the former leader of his party took great delight in doing so until he got caught.

Mr. Foulds: Can the Premier tell us how long he is prepared to wait while the people of Ontario continue to go out of work at the rate of 500 a day, every single day, as they did in September? Why does he not take some initiative now so the people of this province can have some hope?

Hon. Mr. Davis: I think we have to be very realistic. The Treasurer is contemplating certain possible initiatives. As I tried to explain to the Leader of the Opposition, if one looks at those sectors where the unemployment figures have increased, they are sectors over which this government does not have control. That has to be understood by all of us.

I would urge the member to speak to some of his members from the Windsor and Essex county areas. There is no program that we as a province can introduce that will lead to an upturn in the auto sector in the United States. It is to be hoped the fairly recent reductions in interest rates, both in the United States and here, will begin to have some impact in terms of consumer confidence and the purchasing outlook in that country.

The member sometimes diminishes the efforts of this government in terms of what we have done. I understand that; it is his job. I would point out to the leader of the New Democratic Party -- in an acting capacity for several weeks yet and I hope for several months -- that he does not give us much credit for the initiatives that have been taken. Let us try to be fair on occasion.

Mr. Foulds: Name one.

Hon. Mr. Davis: I would ask the member to take a look at the auto sector, at what we have done with respect to the Ford plant in Windsor and what that has done. I would ask him to review very carefully with his Windsor colleagues the initiatives we took, along with the government of Canada, for the establishment of the diesel plant in Windsor which will be a significant plus in the short and long term.

Incidentally, that was opposed by the NDP members but it was supported by the head of the United Auto Workers of Canada because he knew exactly what was happening. That was an initiative that will have not only short-term but long-term positive results for the employment factor there.

I could go through a litany of several other initiatives we have taken. I know the member is trying to hide a smile behind his hand because he knows we have done these things, but it is very difficult for him in his capacity to acknowledge it.

Mr. Conway: Mr. Speaker, some days ago the Treasurer indicated he had submitted a list of proposals to the new federal Minister of Finance in their first meeting. Since there is great interest in this House, and undoubtedly outside among the hundreds of thousands of unemployed Ontarians, to quote that lovely Clarkian phrase, about "the totality of the specificity" of the Ontario Conservative economic package, could the first minister of this government indicate to the House this morning what specific proposals his Treasurer put before the federal Minister of Finance some days ago?

10:40 a.m.

Hon. Mr. Davis: Mr. Speaker, I am not in a position to do that. I think the Treasurer did outline them in general terms. Some of that is public information. Some of the more definitive specifics he is not prepared to outline to the House until we get some reaction from the nation's capital.

Mr. Mackenzie: Mr. Speaker, does the Premier not realize that after seven consecutive months of increased unemployment in Ontario, seasonally adjusted, we also have well over 160,000 over the 504,000 who show as unemployed, the hidden unemployed who have run out of benefits in this province, and these figures do not show the trend we are seeing in cities such as Hamilton, where we will have another 3,000 out over the next couple of months?

Does he not realize that what we have, with the seven consecutive months of increased unemployment, is literally tens of thousands of additional workers over and above the current 160,000 who will be running out of unemployment insurance benefits this winter, exactly when their costs are highest, and the effect on their families is going to be most severe?

Does he not realize that if specific proposals are not put in place now, rather than the negative "I can't do anything" answers we are getting, we are going to have a real tragedy with tens of thousands of people not only out of work but out of benefits in Ontario and thrown on to the welfare rolls, with all that does to people and their families?

Hon. Mr. Davis: Mr. Speaker, I am quite aware of the figures and, with great respect, these are not separate but somewhat different issues. The honourable member is raising his concern as it relates to, say, in his community the number of people who are laid off at this moment, whether from Dofasco, Stelco, International Harvester or whatever company.

That relates, by and large, to market situations over which I think even he might quietly acknowledge this government has very little control. The issue he is raising concerns the position of these people in X number of weeks or months in relation to their benefits. I say that is a related but somewhat distinct issue. We are aware of that and quite concerned about it.

WAGE AND PRICE RESTRAINT PROGRAM

Mr. Foulds: Mr. Speaker, I have a question for the Minister of Consumer and Commercial Relations about his price review program, which purports to control prices by controlling profits.

Why did he take this approach of trying to control prices by controlling profits when the administrator of the program, Mr. Jack Biddell, does not believe it will work? I quote from an article Mr. Biddell wrote in January 1980 that is entitled, Yes, We Can Beat Inflation in Canada: By Keeping the Prices Right.

The article says: "My major concern is the futility and regressive effect of attempting to achieve price control through profit control. In my opinion, this approach greatly limits the effectiveness of any inflation control program." Mr. Biddell has argued instead for controlling prices directly. Why did the minister ignore that advice from Mr. Biddell?

Hon. Mr. Elgie: Mr. Speaker, as the member knows, Mr. Biddell has written extensively on the issue of wage and price controls. I think his philosophy is understood by most people. He has spoken in the past about the issue of price control in the private and public sectors. This government felt it had to acknowledge reality. It had to acknowledge that there were some components we could control and some we could not and that one thing we should be looking at, in the few regulated industries where profits are an element, is to make certain they do not increase beyond the five per cent level.

The member may not think that is an important part of the criteria, and that we should let profits be unrestrained during this period of respite from inflation. I know that is not the member's usual party philosophy, but if it is their philosophy now, I am delighted to hear it. I hope the press will record that they are in favour of no control over profits.

Mr. Foulds: We would rather take the approach of directly controlling and freezing prices, and the minister well knows that. Does he not admit that on the price side, his kind of program is, and I quote from Mr. Biddell's article again, "A price control system that meets its political and administrative requirements far more effectively than it meets its primary objective -- to contain price increases"?

Does he not admit that, according to Mr. Biddell, the administrator of his program, his kind of program is simply a political gimmick that does not meet its objectives?

Hon. Mr. Elgie: No, I do not admit that.

Mr. Bradley: Mr. Speaker, the credibility of the program is at stake. I realize we have dealt on a number of occasions with this political issue, but new revelations are coming forward to members of this Legislature about an increase in the Consumers' Gas price of 17 per cent and an additional cost in equal billing.

Could the minister tell us how he is going to ensure that costs such as these are explained to the public, or if he is going to have them rolled back so that people may see the program as being the credible program I am sure the minister wants it to be?

Hon. Mr. Elgie: Mr. Speaker, if that is what the member wants, I have no problem at all in assuring him and the public that the cabinet does, indeed, have the power to roll back prices.

But the member knows and I know that there are certain real cost pass-throughs that the gas companies face. There have been recent announcements about the equal billing practices of the gas companies from which we understand that by the end of August there will be a credit balance for some customers and a debit balance for others.

If there are any other issues related to a price increase that have not been approved by the minister, they will be referred to him initially and then to the cabinet committee for further review. There should be no doubt that any price increases will be reviewed.

Mr. Swart: Mr. Speaker, pursuant to Mr. Biddell's views, the minister must be aware that the Attorney General (Mr. McMurtry) has stated in writing that this assembly does have the power to "authorize the Minister of Consumer and Commercial Relations to regulate, control or roll back prices in the province of Ontario."

I am sure the minister is aware that Ontario exercises much less control over prices than most other provinces. Examples are auto insurance, where four provinces exercise control, and milk prices, which are controlled by seven provinces. The minister will be aware, too, that I introduced Bill 153 as a private member's bill, an Act to provide for the Fair Pricing of Products and Services sold to Consumers in Ontario.

In the light of all this, and if the minister is at all sincere in wanting to limit prices, will he bring in legislation to provide such ad hoc intervention so he can control excessive prices?

Hon. Mr. Elgie: Mr. Speaker, the member knows well that the bill before the House with respect to prices relates to prices over which the government has some direct or indirect administrative control. It has no intention to introduce a private sector program, which the Premier has said very clearly is a program that has to be national in character.

Hon. Mr. Davis: Which the member would oppose anyway.

Hon. Mr. Elgie: Which he would oppose, no doubt. So let us not pretend that the member wants the national power to control prices and wages.

Hon. Mr. Davis: The member is caught on the horns of a dilemma.

Hon. Mr. Elgie: That is right. The member really is caught.

He has spoken about other things, such as insurance rates. I recall very clearly reading the Hansard of estimates in which he said, very proudly, that if the competitive forces were working then he thought that was great stuff. I can tell him that the competitive forces work very effectively in the insurance industry to keep the rates in this province equal to those in any province.

HEALTH CARE SYSTEM

Ms. Copps: Mr. Speaker, I have a question for the Minister of Health. I realize he is probably disheartened over the recent Conservative executive choices, but I hope he will stop lobbying and come back to his seat.

Mr. Bradley: He had about as much luck as Gord Walker in controlling the Tory executive.

Hon. Mr. Timbrell: You have not heard the expression, sarcasm is indicative of a diseased mind?

Ms. Copps: Would the former Minister of Health repeat that remark, please?

Hon. Mr. Timbrell: I will pray for you.

Ms. Copps: Please do.

Last weekend, the minister in his speech to district health councils across Ontario said, "Ontario has one of the finest health care systems in the world." It is unfortunate, but perhaps understandable, that the government members do not read Globe and Mail editorials.

Mr. Speaker: Question, please.

Ms. Copps: Nevertheless, in almost the same breath the minister said, "The ministry has been pressed into crisis management, creating a climate in which ad hoc solutions were the only ones possible in our system." Which is it? Is it crisis management or is it the finest health care system in the world?

10:50 a.m.

Hon. Mr. Grossman: Mr. Speaker, I must say I have not been able to travel the world, as the opposition critic has.

Mr. Bradley: Mr. Speaker, I know the Minister of Health would want to indicate to the House that when the member for Hamilton Centre travels, she travels at her own expense.

Hon. Mr. Grossman: Are you sure of that?

Mr. Speaker: In answer to the question.

Hon. Mr. Grossman: Are you sure of that, really? Do you really think she paid her own way to China and back? I expect the gallery will ask her afterwards whether she did or not.

Mr. Speaker: Now for the question, please.

Mr. Riddell: It sure wasn't taxpayers' dollars.

Hon. Mr. Grossman: He says she paid her own way. We will see.

Interjections.

Mr. Speaker: Order. Will the minister resume his seat, please?

The question before the House is not the travelling habits of the members. There was a specific question, to which the minister will address himself, please.

Hon. Mr. Grossman: No promises, Mr. Speaker. May I say that I do hope, however the member got to China, that the district health council of Peking did talk to her. I assure the member I did not instruct the district health council of Peking not to talk to her.

May I say that if she read the speech, and I am sure she did, it was a speech that was intended to reaffirm that our system remains one of the best health care systems in the world and that in order to do that we cannot allow a plethora of special interest groups, who inundate us with very good projects from time to time, to force us into continued ad hoc decision-making. When we have a system where all we get are ad hoc suggestions for a variety of programs from a variety of groups, then the natural result is the same types of decisions.

I might say that this was adequately and, I think, perfectly reflected in the so-called report that the member for Hamilton Centre herself prepared. It was, indeed, not a strategy; it was not a plan. There was an analysis of a bunch of ad hoc concerns and a bunch of ad hoc complaints.

You need his help; do not tell him not to whisper to you.

Ms. Copps: He was talking about the Premier's Australian travels.

Hon. Mr. Grossman: Oh, was he? I see. Well, we did not get to China. That is all I can tell you.

In any case, I have the quote here. I was having so much fun I could not find it, but I will if she asks me a supplementary. I have the quote that the member made. I think it was to the Owen Sound radio station and the Owen Sound newspaper. If her member were here, we could confirm it with him. The Owen Sound Sun Times, I believe it was, quoting her from the radio station where -- guess what? -- the member said that Ontario has one of the finest health care systems in Canada. That we agree on.

Ms. Copps: This week in another speech the minister told the Ontario Dietetic Association that our problems were the fault of hospitals that were hoarding huge reserves of money while they were going to the government and begging for funds. Last week in a speech to the district health councils the minister blamed our problems on society for failing to reach a consensus on health care.

As far as I understand it -- and the minister may correct me again if I am wrong -- his government has been the government in this province for almost 40 years. His ministry has been delivering --

Interjections.

Mr. Speaker: Order.

Ms. Copps: His ministry, presumably, maybe not under his directorship but under the directorship of previous ministers who were equally as incompetent, has been responsible for developing rational policies.

How can the minister state, at the same time as he calls it the finest health care system in the world, that the system's provincial manager, the Ministry of Health, has been pressed into a pattern of crisis management? Which is it? Is it crisis management or is it a situation where in the last month there have been two rapes that have gone untreated in Toronto hospitals? Is it a situation where a chief of surgery in a Toronto hospital is threatening resignation? Is it a situation where a hospital in Barrie is about to go broke?

Would the minister like me to repeat it? I will repeat it.

Mr. Speaker: Order. No.

Ms. Copps: At the behest of the minister, I will repeat it. How can the minister continue to mouth empty platitudes, notwithstanding his own words that this speech was not just a bunch of empty platitudes? How can he say he is not mouthing empty platitudes when he continues to put the blame for the problems in this system on other people, on other sources, and not where it should lie, which is directly in the lap of the Ministry of Health of this province?

Hon. Mr. Grossman: To quote my learned and temperate critic from the Liberal Party, the member for Hamilton Centre herself said -- and she has saved me the problem of finding the quote because she has confirmed it today -- that Ontario has one of the finest health care systems in the world.

I read Chairman Sheila's Red Book. I must say --

Interjections.

Mr. Speaker: Order.

Hon. Mr. Grossman: I ask, not as shrilly as the member for Hamilton Centre, which is it? Is it the collection of overheard, overused, special interest complaints that she recited, including the complaint under that very comprehensive section: one page on doctors, where she did not have the courage to take a position as to whether we were paying the doctors too much or too little?

Mr. Van Horne: That's nonsense.

Hon. Mr. Grossman: The honourable member thought we were paying them too little when he was Health Critic.

Mr. Speaker: Back to the question.

Hon. Mr. Grossman: Instead of being the courageous person that the honourable member held herself out to be during the Liberal leadership convention, she cited a doctor who said: "We work 72 hours. Sometimes we wonder what it is all about. The income --"

Ms. Copps: Why don't you just answer the question?

Hon. Mr. Grossman: What am I talking about? The member should not have asked.

I will just read the section for the member. Here it is, page 7. She could look it up, as they say in baseball. Here it is.

"On the subject of physicians' job dissatisfaction, Dr. Deborah Copes of the Medical Reform Group of Ontario wrote: 'Working longer hours is not what one wants to continually look forward to. Performing more services per hour is feasible up to a point, as a doctor becomes more and more experienced and more efficient with his time, but at some level the quality of service must begin to suffer. Charging higher fees is only possible now if the doctor opts out of OHIP.'"

What does the Leader of the Opposition say about that? What does he think? Is that consistent with his demand to us to bring them into the restraint program? Which is it?

Interjections.

Mr. Speaker: Order.

Mr. Breaugh: I hate these family squabbles all the time in here, Mr. Speaker. I want to ask a question --

Mr. Kerrio: Let the health councils be heard.

Mr. Speaker: Order. The member for Oshawa.

Mr. Breaugh: Watch the blood pressure, Vince. Don't let it get too high.

Mr. Speaker: It must be Friday.

11 a.m.

ONTARIO NEIGHBOURHOOD IMPROVEMENT PROGRAM

Mr. Breaugh: Mr. Speaker, I would like to ask the Minister of Municipal Affairs and Housing about an allocation of $200,000 under the Ontario neighbourhood improvement program for the village of Richmond, which is rather remarkable considering that the city of Toronto received $450,000.

How does the minister feel about these quotes from the widely read Stittsville News? Mayor Betty Hill of Goulbourn township says, "We did not qualify for a plugged nickel," and township clerk Greg Gagne says, "This application was not quite above board." How does he feel about that?

Hon. Mr. Bennett: Mr. Speaker, I have never tried to compare Richmond or the township of Goulbourn, which is the one we are really referring to, with Metro. I have looked at those municipalities that really require the greatest amount of help and assistance in trying to improve the quality of services to their people.

The Ontario neighbourhood improvement program has been under way for some time. Prior to that, we had the community services contribution program, to which the federal government used to pay a portion and then it decided to withdraw and leave the responsibility to the province and to the municipalities to continue to upgrade services.

In the case of Goulbourn and Betty Hill, the mayor of that community, I am not sure whether she was completely and accurately quoted. I would not want to venture into that area. I leave that up to the local member. I have to say it is amazing in this particular year, a municipal election year, that there are a number of quotes going back and forth from those who are in office and those who would like to be in office. I do not intend to become the judge and jury as to who made what statements or why they were made.

I say very clearly that in the assessment of the application by Goulbourn, in the great eastern part of Ontario, I had it reviewed and analysed, and let me suggest very clearly to this House, so there is no misunderstanding, that the application is made by the municipality. Certain projects will take place if funding is provided through the Ontario neighbourhood improvement program.

In this case, Goulbourn did make the application, and it appeared in every way, shape and form to qualify under the criteria set down by this province for the allocation of those funds. In my assessment of the application during the past week or so, I reviewed the situation at the request of the Provincial Secretary for Justice (Mr. Sterling). I give him full marks. He was far ahead of the member for Oshawa (Mr. Breaugh) in asking for the review. I gather that the minister reads the widely circulated Stittsville News.

Mr. Conway: As do the rest of us.

Hon. Mr. Bennett: I am sure there are a few in this House who subscribe to it.

Hon. Mr. Davis: We all do.

Hon. Mr. Bennett: I cannot imagine why the honourable member would not. He could see some of the ads that are in there as well. I am sure there are one or two people in that area representing his political cause who are likely running for municipal office and he would like to keep track of them through that newspaper.

We did review the application, and I must say to this House that Goulbourn is entitled to the funding; I am sure that when they draw it down and do the work that is necessary, it will be for the long-term benefit of that community on the advice of their mayor.

Mr. Breaugh: I want to ask the minister about the role of the member for Carleton-Grenville (Mr. Sterling), who is quoted in the same Stittsville News as saying, "In the past five years the township has received more than its share of extra provincial funding." He also says, "I have always lobbied strongly on their behalf and will continue to do so." But then he goes on to say, "Unfortunately, I am left with no alternative but to ask the minister to hold all approvals until the application for the ONIP grant for Richmond is re-examined." Has the minister done that?

Hon. Mr. Bennett: Let me assure the House that Richmond is a great community. The town of Richmond has been a good, strong Tory empire for many years. George Dunbar, a former Minister of Municipal Affairs, came from that area. George Drew represented it federally. Indeed, the Bennett clan came from Richmond, so I might have some degree of partiality towards that community.

Interjections.

Hon. Mr. Bennett: Second only to Brampton, I will admit that. Goulbourn is a great, progressive community in eastern Ontario. I am sure the member for Renfrew North (Mr. Conway) would agree with that. We have a mayor there who does not usually express her views very forcefully -- not much -- and sometimes her verbiage is something that is easily understood by most people.

Mr. Conway: You and Charlotte made a much more charming couple.

Hon. Mr. Bennett: I beg your pardon.

Mr. Speaker: Never mind.

Hon. Mr. Bennett: There is a slight difference there.

Mr. Speaker: Back to the question, please.

Hon. Mr. Bennett: Yes, maybe it is just as well we let that one slip by. We will let the member for Renfrew North take on that responsibility in the relationship with the mayor from Ottawa. There are times when the member for Renfrew North and she have somewhat similar political views.

As to Goulbourn and Richmond, I can assure the member that at the request of the member for Carleton-Grenville we have gone through and reviewed it. I say to this House, without any equivocation, we believe all the criteria have been met. Goulbourn will use the funding; it will upgrade the services that have been asked for.

DISPOSAL OF NUCLEAR WASTES

Hon. Mr. Norton: Mr. Speaker, I would like to supplement briefly for the honourable members the answer to a question that was raised in the House yesterday by the member for Niagara Falls (Mr. Kerrio) and the member for Hamilton Mountain (Mr. Charlton) and that had previously been brought to my attention by the member for Brock (Mr. Welch) relating to the Lewiston, New York, ordnance work site and the question of the report for the US Department of Energy done by the Bechtel Group.

In communication with the officials in the United States, we have now confirmed that report has been rejected by the Department of Energy. They have found it wanting in the investigative work as well as in the conclusions it reached. Apparently, the Bechtel Group have now been directed to go back to the drawing board and report mainly on the matter of containment and any health effects that might relate to the site.

Mr. Kerrio: Mr. Speaker, is it not very obvious to the minister that there should be some liaison in the future between those states that border on this great waterway so that we know when such things are being contemplated? Are we not fortunate, indeed, that they did not decide to go on with that armament site as a place to store their nuclear wastes? Is it not time the minister took the initiative and had some kind of rapport with our American friends to find out when these things are being considered in the future?

Hon. Mr. Norton: As a matter of fact, that clearly is going on through a number of agencies, including the International Joint Commission. as well as a variety of special working groups and task forces that have been established. The honourable member is well aware of the fact that there is such a group involving four governments -- two national, one state and one provincial -- directing their efforts primarily to the Niagara frontier area, the Niagara River.

The fact that we were able to get this information so readily and quickly is testimony to the fact that there is a good flow of communications. In this instance, the report had been commissioned by the federal government in the United States. Presumably, since it had been rejected, there may have been no reason to bring it to our attention. But certainly communications are open at the moment.

LAWYERS' FEES

Mr. Nixon: Mr. Speaker, I would like to put a question to the Attorney General in the absence of the Provincial Secretary for Justice. As our chief law officer, will he give the House his opinion on the proposal from the county law societies that lawyers who do not charge the full tariff rate for their services should be barred from participating in legal insurance?

Hon. Mr. McMurtry: Mr. Speaker, I have read some newspaper comments with respect to the proposal, and a concern has been expressed by some members of the Law Society of Upper Canada in relation to the so-called allegation of fee cutting. I am not aware of just what, if anything, has been proposed in this area by the law society.

Obviously, there should be a very high degree of freedom for lawyers to charge to an individual client what they, as individual professionals, believe to be appropriate taking into consideration, as they must, the resources of the individual client as an important consideration.

I am not aware of any formal proposal from the law society to deal with this matter. Until I am a little more aware of the details, I really cannot comment any further.

11:10 a.m.

Mr. Nixon: I would be under the impression that the Attorney General would be better informed on these matters than most of us. All I can go on is the news report that the president of the Mississauga bar association, speaking for the presidents of all the county associations, has made this as a formal proposal.

I ask the Attorney General, is he aware that the Law Society of Upper Canada has recommended to its members that they hold their price increases to the federal ceiling of six per cent? They did that at the same time that they raised the professional fees for lawyers by 65 per cent.

The thing that must concern us is the possibility that, while they are to be commended for insisting that the increases be no more than six per cent, at the same time there seems to be a move in the profession to stop any lawyer who might have the temerity to charge less than the agreed fee under those circumstances.

That concerns me, and I suggest that it should concern the Attorney General and his policy group so that there would be no possibility that this might become effective in this province.

Hon. Mr. McMurtry: I am a member of the Law Society of Upper Canada, as are some others of our colleagues in the Legislature, and none of us personally was particularly happy, I can tell my friend, about that 65 per cent increase in fees.

Interjection.

Hon. Mr. McMurtry: Hold it a moment. I would not say that.

Mr. Nixon: But you never heard about it. Just send the cheque, Roy; nobody will bite your head off.

Hon. Mr. McMurtry: It was a very unhappy announcement as far as I was concerned.

If the president of the county law associations is really serious about his proposal, I expect he will be communicating with me as well as with the law society. I think I share the tenor of the member's concerns. If they are serious about it, I think they will let us know. To date I have not heard anything from that association.

PUBLIC OPINION POLLS

Mr. T. P. Reid: I rise on a point of order, directed through you, Mr. Speaker, to the government House leader, concerning my question on the Order Paper relating to the tabling of public opinion polls taken by the ministry.

We have been through this a number of times before, but I am still missing a number of the polls, particularly from the ministries of Natural Resources and Agriculture and Food, the Provincial Secretariat for Social Development, the Ministry of Tourism and Recreation and some of those from the Ministry of Transportation and Communications.

I wonder, since the government believes so strongly in a freedom of information act, if the government House leader could bestir his colleagues to see that we get these polls.

Hon. Mr. Wells: I am just going from memory, Mr. Speaker, but I recall the answer to the question was that the polls would be released and that it would be up to the individual ministries to release them. I think my friend should ask the people who have not released the polls when they are going to do it.

Hon. Miss Stephenson: I do not have any.

Mr. McClellan: Mr. Speaker, I have a related point of order dealing with standing order 81(d), which deals with written questions on the Notice Paper. It states, "The minister shall answer such written questions within 14 days ... "

I want to draw attention to question 230, tabled June 28; question 231, tabled June 28; and questions 232, 234, 235, 237, 238, 239, 242, 243, 244, 245, 246, 247, 248, 249, 250, 254, 255, 256, 257 and 258. There are 22 questions in all on the Notice Paper, some of which have been sitting there awaiting an answer since July 6.

I hope this does not mean the standing order is being deliberately violated. I am sure that this is some kind of terrible oversight and that we shall have some kind of an adequate response.

Mr. Speaker: I am quite sure the appropriate ministers will take note of your inquiry and will respond.

Mr. Boudria: On the same point, Mr. Speaker: I placed a question on the Order Paper on May 18. I was supposed to get an answer to it originally on June 3. Subsequently, that date was changed to June 30. It is question number 159. I am still awaiting a reply.

ORDERS OF THE DAY

INFLATION RESTRAINT ACT (CONTINUED)

Resuming the adjourned 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. Robinson: Mr. Speaker, it is with some surprise that I find myself on my feet at 11:15 this morning. I say that with respect to the member for Downsview (Mr. Di Santo), who adjourned the debate last night after making what can best be described as lengthy remarks salient, I am sure, to Bill 179. I noted his attendance in the House this morning and was certain he would be continuing today. I hope this is in no way taken as any reflection of stifling of free speech by any member of this House.

I was concerned, though, as the member's remarks progressed, that his speech might outlast the control period identified in the bill; and it did come close. I was also concerned that these brief remarks, certainly brief by comparison to almost everything else that has been said to this point, which were fresh when they were written, could well be historical by the time they were delivered. I am glad, though, to have the opportunity to participate in the debate.

By embarking on a program that restrains the level of compensation increases throughout the public sector in Ontario, this government will contribute to the lessening of the inflationary burden under which our country is suffering. It would be premature, though, to try to make any major pronouncements, or to make any guesses at this time, as to the exact monetary impact it will have in the long run.

However, I know that all members of this House are encouraged by the ongoing statements of the Treasurer (Mr. F. S. Miller), that the restraint measures proposed by him will have the effect of accelerating a drop in the inflation rate within the next six months.

I think we all realize that this province, or any other acting on its own, can achieve only limited successes in a war being waged against inflation and to save very real jobs.

The Premier (Mr. Davis) made it clear in his own remarks, and he reinforced it again today, that national recovery can be achieved only by a program that encompasses Canada as a whole and in which all provinces and the federal government work in concert. We can, however, accomplish certain objectives by acting on our own, and the legislation that has been introduced is something that can be enacted; that is our duty to the people of Ontario. As with many duties, and I am sure all members of the House will agree, this one may not be pleasant. If it were pleasant, it would probably be called something else. But this in no way diminishes the necessity of what we have to do.

While Bill 179 may be confined to the public sector in its power, this legislation will reach beyond the groups directly affected by it. Cutting down on inflation, the private sector will be able to create more jobs -- jobs that are more productive than any public sector make-work scheme would be. This will benefit businesses not just in Ontario, but across the country.

We should not forget unemployment. It continues to run at a post-Depression high. Cruel as unemployment may be in this province, it is higher in the rest of Canada, in many other areas and in many specific industries.

To cope with the economic problems facing them, hundreds of companies in the private sector have already implemented some type of restraint program. According to one recently published newspaper article, 38 per cent of businesses surveyed had implemented some sort of restraint measures by the end of August. One quarter of the businesses surveyed had already decided to either start or remain in a restraint program in 1983.

11:20 a.m.

All of us in this chamber know too well that many of the restraint measures the private sector employers have had to embark upon are much more severe and stringent than those being proposed by this or any other government anywhere in this country. The measures before us will make it easier for the public sector employers to afford to maintain existing levels of workers.

In all the statements made by my government there has been no suggestion whatsoever of having to cut down significantly in raw numbers. There has been no talk of layoffs, reduced work weeks or reduced money. That is not the case anywhere in the private sector. I am sure other members of this House realize that the only alternative to what we are doing would be a program that would involve significant layoffs.

I was pleased to hear my colleague the member for Brant-Oxford-Norfolk (Mr. Nixon) make mention this morning of the Law Society of Upper Canada, a society, Mr. Speaker, in which you have some personal and ongoing interest. I know you were as taken aback by his comments about increased fees as every other member of the legal profession in this House.

However, when we talk about groups that are related to the public sector and where the public sector may have some influence, it is important to note that the benchers did vote in convocation recently, late in September, to urge their whole membership to maintain their fees -- even you, Mr. Speaker, if you were able to charge them, which you are not -- at a level in line with the federal program. That is significant.

We rail upon the doctors. We like to single out the doctors. I think we have seen a very good example of members of a tradition-ridden professional group taking action into their own hands, restraining themselves and urging restraint on their members. I have confidence in the doctors in our province. I think they will come forth with a similar program in the very near future.

All the steps we have proposed under Bill 179 go a long way to maintaining the trust the private sector has in this government, If this kind of confidence-building can be made to work in every province, territory and at the national level, the country will be headed towards a speedier economic recovery. I believe employers from the private sector and the majority of their employees have looked at the public sector and have raised serious questions as to whether governments are actually willing to take the necessary steps to control their own spending.

Mr. Boudria: I am glad you brought that up.

Mr. Robinson: And rightly so. I am pleased the member for Prescott-Russell is following along. Their displeasure has been mainly aimed at Ottawa. I am sure that is where I will lose the member for Prescott-Russell, because the fact is that the largest increases of spending have taken place at the federal level. Even the member for Prescott-Russell is nodding his head in agreement. I am glad to be able to do this today when he is here to be agreeable.

Although I was not a member of this House at the time the government of Ontario undertook special measures to control expenditure and public service growth back in 1975, I take members back to that budget, because it was then that the government announced a reduction of 2.5 per cent in the civil service complement. In addition, all ministries were required to absorb all in-year cost increases resulting from inflation. Government programs and organizations were reviewed as well with a view to streamlining or doing away with those that had largely outlived their usefulness.

That is a program that continues even today. I am sure some members here will remember that the hiring cuts imposed in 1975 produced a drop in the civil service of 2.4 per cent. What they may not know is that in the same year the Ottawa bureaucracy grew by 5.2 per cent.

Mr. Gillies: How much was that?

Mr. Robinson: By 5.2 per cent. I am sorry I am not speaking clearly enough for my friend the member for Brantford.

Mr. Gillies: No. I just wanted you to repeat that.

Mr. Cunningham: They dragged you kicking and screaming into the program.

Mr. Robinson: Just so we understand what those percentages actually mean before we become confused by exactly what we are talking about, in Ontario there was a drop of 2,000 civil servants in 1975. In Ottawa that 5.2 percentage, however maligned the member for Wentworth North (Mr. Cunningham) wants to make it, was an increase of 16,000 civil servants federally.

Since 1975, the size of the Ontario public service has actually decreased by 6.1 per cent or, in real numbers, we have decreased the public service in Ontario by 5,283 people. That is a lot of people. That figure includes both classified and unclassified staff and other crown employees and dispels any myths that may have arisen that the number of our civil servants was decreasing while the number of people on contract was going up.

Figures were released again this morning, and I was trying to lay my hands on them during question period. I would not try to fool this House with the exact number but, once again, it is indicated that in the most recent reporting period there has again been a very significant increase in the size of the federal bureaucracy, even now when they are preaching restraint through section 5.

Mr. Boudria: Does Paul Cosgrove know the member is saying this?

Mr. Robinson: Who?

Mr. Boudria: He was your boss.

Mr. Robinson: I remember Paul Cosgrove. He was the minister who went down 19 positions last week.

Hon. Mr. Drea: Mr. Cosgrove is a friend of mine and he is a very fine minister.

Mr. Robinson: I am sorry. I have managed to offend the Minister of Community and Social Services (Mr. Drea) by speaking of his friend here in the House. I would not do that, I have great respect for Mr. Cosgrove.

Before we decided to debate the federal cabinet shuffle, I was going to say that in 1975 there was one Ontario civil servant for every 94 residents of the province. In March of this year, there was one Ontario public servant for every 106 people in Ontario.

Mr. Shymko: You must be kidding.

Mr. Robinson: I assure the member for High Park-Swansea that I would not kid him on an important matter like this.

These facts show that our government not only has a talent but also has a well-established tradition, which it is maintaining, for controlling the size and cost of government.

In recent years, the government of Ontario has ably demonstrated that it does not require a rapidly growing bureaucracy to maintain and improve service to the people of Ontario. I am sure no one would dispute that.

However, to ensure that none of my colleagues on the other side arrives at the mistaken conclusion that this government has taken restraint measures only in 1975 and again this year, I want to point out that the tight controls on spending have been with us constantly over recent years. For example, 1976 saw a further reduction in the civil service complement, while again the federal bureaucracy grew by almost 6,000.

Internal cost-cutting measures also realized considerable savings for the government. Management controls were also tightened up. In 1977, the growth rate of provincial expenditures again decreased, even though a considerable number of new measures were undertaken to stimulate job creation. Government operations were further streamlined in 1978. In particular, the province reduced its borrowing from internal pension funds, allowing the money to be redeployed to the private sector.

Mr. Boudria: Talk about when you borrowed German marks and see how well you did that time.

Mr. Robinson: I like this style of debate, where I offer a point and the member for Prescott-Russell offers a counterpoint. This is really democracy in action.

Mr. Shymko: Talk about the expense accounts of some members. The member for Prescott-Russell could use some constraints and restraints.

Mr. Boudria: Go ahead. Why don't you talk about the service you are not giving to my constituents? See how far you get.

Mr. Stokes: And they are supporting you.

Mr. Robinson: That is right; they are supporting us. Thank you.

To continue, ignoring the interjections and having had that additional bit of assistance, in 1980 the size of the bureaucracy was again reduced and provincial expenditures again took a smaller proportion of the gross provincial product. By limiting hiring in the public service in recent years we have made significant strides in improving public service efficiency. Over those years, salaries and wages paid to our public servants and bargaining units have exceeded the rate of increase in the consumer price index. Only at management and senior appointment levels have salary increases lagged behind inflation.

11:30 a.m.

Even so, a greater proportion of this government's 1982 spending goes into salaries and benefits than in 1975. In 1975 about 10 cents of every expenditure dollar went for salaries. Today it is 11 cents. One penny on a dollar may not seem like much when looking at the overall level of provincial spending, but it becomes a very significant amount.

The members sitting across from us believe, and would have us believe day in and day out, that they are the only ones capable of deciding what is fair and what is justifiable. I am afraid sometimes, I am reluctant to say so, they want to make up their minds without consulting the historical facts, without looking at what has happened before. I do not have the time to dwell on the history of the subject and I am sure that will give them great pleasure in any event.

Interjections.

Mr. Shymko: The member for Downsview (Mr. Di Santo) had three days, so the member might as well take it easy and keep going.

Mr. Robinson: Despite what they would have us believe, I do have faith in the public servants of this province. I do believe the vast majority of them realize how protected they actually are in relation to their counterparts in the private sector. In the private sector one demonstrates if one loses one's job. In the public sector, it seems, one demonstrates if one gets a five per cent increase. That is a strange phenomenon. This is not an extreme example.

There are a great many private sector employers out there who are in no position to give their employees an increase of even five per cent. Private sector employees have taken various measures to restrain their own spending at a time when profits have fallen dramatically. These employers have had to increase hours of work without increasing pay, actually reducing salaries, reducing benefits and reducing the number of days or hours worked and paid. Their measures have been much harder than any that this government has proposed.

With any law in democracy, we do not expect everyone to be completely and wholeheartedly in favour. That is unrealistic. I have no difficulty in saying to this House that of the 70 of us who make up the government caucus, there was no unanimity in putting the program together. It would be foolish to believe that there could be in such a thing that has such dramatic and far-reaching effects. But we do believe that most people agree that such measures should be taken, if only as a starting point to economic recovery.

We also believe that those who disagree have many different ways of conveying their opinions, either through members of this assembly or other legitimate channels, but they might also want to consider, as we should too, in terms of that five per cent increase, in terms of what they call only a five per cent increase, that there are more people in the public service of this province than there are unemployed. There are many qualified people out there who, without any hesitation whatsoever, would welcome the chance, would grab at the chance to be a member of the public service of this province with no increase whatever in this year or in the foreseeable future.

I promised to be brief and I have been. In conclusion, I was looking forward to hearing the remarks by the member for Ottawa East (Mr. Roy) which were to follow. However, as it is Friday, and this was probably too much to expect, we will now hear, I understand, from the member for Huron-Middlesex.

Mr. Riddell: Mr. Speaker, I cannot say I consider it a pleasure to participate in this debate. As I have listened to the many speeches, some of them very lengthy, particularly those from the New Democratic Party, I have really come to the conclusion that debating bills in this Legislature has become somewhat redundant. This place has become something of a joke, and I say this in all seriousness. It is no wonder that the people no longer want to participate in the political game when they know that the deck is full of jokers. Is it any wonder that we have to advertise to get people to go to the polls when they have lost their faith in the members, when they see the sheer hypocrisy that we see on the part of my friends on the left?

Why do I say that? We have heard my friends on the left say that the doctors should not be getting their increases. Yet when their leader, Bob Rae, was in my riding speaking to the Ontario Medical Association, he preferred to talk on the subject of preventive medicine. He really did not want to get involved in talking about the increases the doctors were permitted. Do members know what he did say in that regard?

Mr. Boudria: Tell us.

Mr. Riddell: This is an article that appeared in the Toronto Star on September 30, 1982, about the Premier (Mr. Davis) meeting with the doctors behind closed doors. I quote from the article:

"The doctors won't willingly perform the surgery Davis seeks. Last week OMA leaders told the Star that Davis had told them 'a deal is a deal' seven years ago when they sought to reopen a four per cent increase they'd agreed to at his request to lead the fight then against inflation. They said they'd remind him: 'A deal is a deal. He knows we remember.'

"Last night in Goderich New Democratic Party leader Bob Rae echoed that sentiment when he spoke to an OMA district meeting in Goderich. Rae said he wouldn't break any contracts to either private or public sector groups if he was in power. Promises and contracts made by government should be kept by government and by all other parties."

Here we have listened to every one of these members get up and say: "What about the doctors? Cut them back." Yet their leader is going out in the boondocks and saying, "No, leave the doctors' fees the way they have been contracted."

Mr. McClellan: Mr. Speaker, on a point of order: I am sure the member is either deliberately misinforming the House or is misinformed fairly grossly himself. At no time has any member of this party said that anybody on this side supports the notion of abrogating signed contracts, including the contract signed with the Ontario Medical Association with respect to the Ontario health insurance plan fee schedule. We have pointed out the hypocrisy of the program and we are opposed in principle to the entire program. We do not intend to play the politics of --

The Deputy Speaker: All right. Order.

Mr. Riddell: Mr. Speaker, that is just a further example of the convoluted arguments from these people that we have been listening to now for some time.

There is no question that the NDP is on the horns of a dilemma. They know that the popular vote is for a restraint program, but they argue one way in this Legislature because they want to consolidate their base support. But their leader is struggling for a seat in the by-election, and he hopes to get more seats in the Legislature if he does get elected, so he goes out into the boondocks and talks a different story. That is hypocrisy. That is the reason members of Parliament no longer have credibility with the people in Ontario.

11:40 a.m.

I have listened to the various debates on Bill 179. I did not realize that the assembly consisted of so many instant expert economists. We have the New Democratic Party, on the one hand, believing that inflation is not the problem which this country is facing, but that it is high unemployment which is the cause of the country's economic woes. The Conservatives, on the other hand, believe that inflation is the number one problem and that it must be wrestled to the ground by putting an armhold on the public sector. Liberals believe that inflation, unabated, will drive this country into a deeper recession and that all of society must share the responsibility of bringing it under control.

I am going to deal with the economics of the situation. I will adhere strictly to the principle of Bill 179 and will not wander around like the NDP. I have listened to them talk about everything from the Vaughan township land severance deal almost to what was taking place in their own family life. We have heard everything.

I make no apologies about dealing with the economics of the situation because I read the Ontario Secondary School Teachers' Federation newsletter and their provincial executive memo. They listed all the members who voted "aye" and those who voted "nay" on first reading of the bill. I really think it is time that the people of Ontario, including teachers, realize that we are going through very difficult times and that one does not control inflation, which is the number one problem, I do not care what anybody says, by throwing money at it. So I am going to deal with the economics.

I have done a lot of research in my preparation of this speech, and when teachers come to ask me why we voted in favour of a restraint program, I will give them a copy of my speech and say, "Now, you refute what some of the top economists in this country have said."

I really think that teachers, by and large, believe that we have to take measures to control inflation. Teachers came to me at the ploughing match which was held in my riding last week and said they understand the problem and that there must be restraints, but they are bitter because the problem is apparently to be fought on the backs of the public sector. They would support a restraint program if it was an across-the-board program pertaining to both wages and prices, and I would have to agree with them on that. It is unfortunate that the economic conditions of this country have reached the point where legislation of this nature must be imposed on the people of this province, or any province for that matter, but it is more unfortunate that we as a society have failed to learn from our past mistakes.

Not too many members of this Legislature remember the crash of 1929 and the depression which followed it. In retrospect, 1929 was the watershed year of the 20th century, the start of the Great Depression which swept away all that had gone before and which forever changed the economic face not only of this country but of the world. Yet, by the latter part of 1979, only a half century later -- the twinkling of an eye, as history goes -- the world seems poised to change again. The post-Depression economic mechanisms which fostered great growth also set an inflationary fire that no one knows how to put out.

When I was taught economics at the Ontario Agricultural College, which at that time was affiliated with the University of Toronto but is now part of the University of Guelph, I distinctly remember my professor getting up and saying: "We will never witness another depression again because governments now know how to control it. We have gone through it, we have learned from our past mistakes and it will not happen again."

Hon. Miss Stephenson: What year was that?

Mr. Riddell: I graduated in 1957. I imagine the economics course I took was from 1953 to 1957.

Balanced against the government's intervention in everyday life that the Depression brought on is the growing demand for less intrusive government. The success of the Organization of Petroleum Exporting Countries has broken up the well-ordered industrialized world and has forced every nation to fight for its economic life for costly and scarce energy.

The world could change as completely between 1979 and 2029 as it did between 1929 and 1979. I imagine when the economic professors were teaching back in the 1950s they did not dream of the oil crisis; they did not dream of OPEC ever entering the scene. We are seeing an example of history repeating itself. Let us briefly recall the combination of causes that led to the last depression.

They included: a grievous miscalculation of the American monetary authorities which eased instead of tightened prior to the crash, spawning the inflationary bubble that burst in 1929; the spread of political unrest in Europe that sapped confidence as Nazism became a major political force in Germany; capital shortages in central Europe left over from the First World War which dislocated the channels of investment; the inability of the world's economic system to absorb shocks and adjust to changes, thanks to the actions of various governments to strengthen commodity cartels and labour unions; technical improvements in agriculture, which produced sharply higher yields and caused sharply lower prices for farmers, while the goods they bought were rising in cost; a proliferation of giant frauds in business; a change in attitude that led to heavy borrowing by individuals, corporations, and government; economic policies that propped up weak businesses instead of allowing them to fail; and, finally, after the slowdown started, the imposition of trade barriers to protect domestic manufacturers, which also impeded the flow of goods and capital around the world.

Mr. Speaker, if you were listening to that --

The Deputy Speaker: I was.

Mr. Riddell: -- considering the events which have taken place over the last 50 years, can one not see the parallel with the conditions leading to the Great Depression of 1929? Yet we hear our friends in the New Democratic Party asking for more government intervention and expenditure of money and, yes, even nationalization of industries and banks; more individual corporation and government borrowing; more consumer spending leading to more inflation; and more trade barriers to protect domestic manufacturers, the very things that led to the last depression.

If this country followed the NDP leadership, we would encounter a depression that would make the Great Depression of 1929 look rosy by comparison. I say that in all honesty, and I really think the people of Ontario would give very serious thought to the philosophy of these people on the left before they would ever decide to cast their vote for one of these characters.

Mr. McClellan: Talk about hypocrisy. Trudeau for what?

Mr. Riddell: I do not happen to be a member of the federal government. I happen to be a member of the provincial government and I am going to be dealing with provincial affairs.

Mr. Stokes: A Liberal is a Liberal, says Sheila.

Mr. Riddell: When my leader was speaking on second reading of Bill 179, the NDP, the instant economic experts they are, interjected throughout his speech, suggesting that high interest rates were the cause of our economic problems. The NDP does not seem to understand that high interest rates flow from an anti-inflationary restrictive monetary policy and are not a means within themselves of combating inflation.

In the opinion of some of the best economists in the country, and I have read many of their works, a restrictive monetary policy supplemented with temporary wage and price controls represents the best policy choice if society wants to permanently lower the inflation rate.

Mr. Cassidy: And look where they have got us.

Mr. Riddell: Economists who are far more knowledgeable about the subject than any member in this assembly --

Mr. Cassidy: They are totally confused.

Mr. Riddell: -- believe that to lower the inflation rate and to sustain a lower inflation rate, the government must restrict the growth rate of the nominal money supply.

Mr. Cassidy: That's mumbo-jumbo.

Mr. Riddell: If you think you know anything about economics, then stand up and make a great speech.

Mr. Cassidy: I intend to.

11:50 a.m.

Mr. Riddell: I will be listening but I do not happen to think, apart from journalism, you have all that much knowledge about economics. Economists, let me repeat -- I have to go back when I get these silly interjections -- who are far more knowledgeable about the subject than any member in this assembly believe that to lower the inflation rate and then sustain a lower inflation rate, the government must restrict the growth rate of the nominal money supply.

Unfortunately, the adjustment costs of such an anti-inflationary restrictive monetary policy could be very severe. Gearing the economy down from a high inflation rate to a low inflation rate will in all probability entail a prolonged period of high unemployment and high interest rates.

Mr. Cassidy: But you don't care.

Mr. Riddell: Listen, I am interested in controlling inflation and getting this country moving again. I will not adopt your policies whereby we would continue to feed inflation to the point where we would end up in the worst depression the country has ever faced.

Mr. Cassidy: You are going to rescue the country on the backs of the unemployed.

Mr. Riddell: For such a restrictive monetary policy to be successful, it must accomplish two objectives. First, it must indeed lower the actual inflation rate. Second, and more difficult, it must lower inflation expectations. If inflation expectations are not lowered, then inflation will continue to feed on itself and any lowering of the actual inflation rate will be only temporary as firms and labour market participants continue to make price and wage decisions on the basis of a higher expected inflation rate.

The key element of any anti-inflationary policy is wringing inflation expectations out of the economic system. Behind this painful adjustment path, accompanying a restrictive monetary policy, is the economists' ubiquitous assumption of a competitive market system. In particular, investment expenditures are assumed to respond to changing interest rates and inflation is assumed to vary with the level of unemployment. Under competitive market conditions, a declining rate of inflation requires excess supply conditions which can be generated either by increasing supply relative to demand or by reducing demand relative to supply.

Since aggregate supply is the result of a demographically determined labour force, a capital stock accumulated over many decades and technology, it is not easy for the government to affect aggregate supply, at least in the short run.

Mr. Stokes: Who wrote this?

Mr. Riddell: I will tell you I have researched work done by the economists and I have yet to run across an article where the economists would refute the things I am saying. If you can come up with it --

Mr. Stokes: How many did you consult?

Mr. Riddell: I got all the material and articles I could out of the library and I have yet to come across an economist who would refute the things I am saying. If you can do it, then get up and make a speech.

Mr. Kerrio: The Socialists made speeches in Sweden and every other country they ruined.

Mr. Riddell: And France. Any government-induced increases in aggregate supply to dampen the inflation rate are likely to be too little, too late.

Mr. Stokes: Like Dome or Maislin.

Mr. Riddell: No, I am going to be addressing that. I do not agree and many of my colleagues do not agree with pouring money into Dome Petroleum or into Maislin Transport. I happen to be one who does not particularly agree with bailing out Massey-Ferguson or Chrysler but I will have more to say about that. Just hang on.

Mr. McClellan: A Liberal is a Liberal is a Liberal.

Mr. Kerrio: A lot of Socialists are Communists.

Mr. Riddell: As a consequence, to generate excess supply conditions, the government restricts aggregate demand, investment, and consumer durable demand in particular, by raising short-term interest rates. Thus the term "anti-inflationary monetary policy" should be understood as a euphemism for restricting demand, rising interest rates and rising unemployment. The cutting edge of an anti-inflationary, restrictive monetary policy is a large pool of unemployed workers who will increase the competition for jobs and thereby restrain wage and price increases. The economic cost of a tight monetary policy to lower the inflation rate is a short-run increase in the interest rate and the unemployment rate. The magnitude and duration of this short-term pain depends crucially on how quickly the market system adjusts to changing economic circumstances.

If wages and prices are relatively insensitive to changing aggregate demand conditions, then the short-run adjustment period will be prolonged. Given the likelihood of a painful and prolonged adjustment period accompanying a restrictive monetary policy, a number of economists have advocated the implementation of temporary wage and price controls along with a restrictive monetary policy.

Rather than waiting for the economy to slowly and painfully gear down to a new lower inflation rate under a restrictive monetary policy, the government could impose temporary wage and price controls to expedite its anti-inflationary monetary policy. The government could directly intervene in the economy to control the size of wage and/or price increases and thereby force the rate of inflation down to the government's new low target inflation rate. These are the measures the federal government and most provincial governments are taking in one form or another.

The sole purpose of a temporary income policy is to ease the economy down to a lower long-run inflation rate and minimize the cost associated with a restrictive monetary policy. If successful, wage and price controls would legislate the rate of inflation down to a new lower rate consistent with the new lower rate of monetary expansion and then hold it there until inflation expectations had been lowered. Rather than waiting for high interest rates and rising unemployment to slow the economy down and moderate the inflation rate, wage and price controls are used to force the inflation rate down directly.

Once inflation expectations have been lowered, the government could terminate its wage and price control program. If labour does not try to catch up with the lower government wage control rate settlements during the period of controls, the economy will remain at this new lower inflation rate, which is validated by the new lower rate of monetary expansion.

To repeat, wage and price controls might alleviate some of the unemployment and high interest rate hardships that accompany anti-inflationary restrictive monetary policy. First, we have the restrictive monetary policy, and to expedite that so we can get the inflation rate down, governments then impose wage and price controls. It is simple and pure economics.

The New Democratic Party believes the way to tackle the inflation problem is from the supply side, especially by cutting taxes. The argument is simply that inflation results from an excess demand over supply and there is no sense in correcting that by the painful method of restricting demand, when it could be done by the pleasant way of raising supply. The answer is, of course, equally simple. What we can do on the supply side is not big enough to solve the problem.

We have demand growing by about 12 per cent a year and supply growing by about two per cent a year, which yields 10 per cent inflation. To increase the rate of growth of supply by 50 per cent from two per cent a year to three per cent a year, which is a difficult task, would still leave enormous inflation, especially if the increase of supply is accomplished by means such as cutting taxes, which at the same time increases demand.

Mr. Cassidy: Unbelievable.

Mr. Riddell: We will be waiting to hear from the member. If he cannot make any more contribution than he has made over the past 10 years since I have been in this Legislature, then I am sure I do not have too much to look forward to.

In simple terms, economists believe that whatever else may need to be done to bring inflation under control, it is absolutely essential to keep the rate of monetary expansion within reasonable limits. Any program that did not include this policy would be doomed to failure. There is no way of preserving its value if money is created on an excessive scale. High unemployment and high interest rates flow from this anti-inflationary monetary policy.

To expedite gearing the economy down from a high inflation rate to a low inflation rate, the government imposes temporary wage and price controls. It is unfortunate, however, that a policy of so-called monetary gradualism will not bring the inflation rate down without a major recession.

12 noon

As I listened to my friends on the left, they seemed to be saying that restraints should be removed and more emphasis should be placed on creating jobs than on controlling inflation.

The New Democratic Party does not seem to understand that giving up restraint would clearly mean more inflation and probably larger government deficits than we now have; and unless we are concerned only with a short-term recovery and a temporary reduction in unemployment, giving up restraint raises the question whether more inflation and larger deficits, incurred as a matter of policy with a view to stimulating the economy, are compatible with steady growth and high employment over the long run.

It is the belief of most economists that more inflation and large deficits are not compatible, as they used to be when inflation was lower and deficits were smaller, with steady growth and high employment. The debate over whether government should give up the fight against inflation in order to increase output and employment is, therefore, a false one for two reasons.

The first reason is general and has to do with the effects of inflation on economic prospects and planning. Capital investment is necessary for economic growth. It requires confidence on the part of investors and borrowers who spend, not to mention of lenders who save. But, of course, the NDP does not understand how business operates. They do not understand very much about capital investment.

Mr. Swart: We understand how you are operating now: going broke.

Mr. Riddell: This in turn requires as little uncertainty as possible with respect to future demand, supply, prices and costs. More and more capital projects are long term, both from the point of view of the lead time required to bring them into production and from the point of view of how long they will continue to produce from then on.

Inflation, and especially accelerating inflation which gives the impression of being out of control, destroys confidence in the future stability of the factors that determine whether an investment ought to be made or not. Inflation is unsettling to business and inimical to steady growth. Businessmen and bankers have made this point many times. No serious attempt has been made to refute it.

The governor of the Bank of Canada has said: "Inflation has not encouraged good economic performance. By adding greatly to the element of uncertainty in economic matters it has reduced the chances of efficient planning. It has thereby militated against both current output and investment needed to sustain future economic growth.

"But the damage to our society goes much beyond this. The inflationary process is profoundly unfair and socially divisive. It rewards handsomely activities that contribute little or nothing to economic output at the expense of those who concentrate on productive efforts. It erodes people's trust in the fairness of the economic system and leads them to depend for protection on adversarial rather than co-operative reactions. Inflation melts the glue that holds free societies together."

More inflation will melt the economic fabric on which investor confidence depends all the faster. More inflation would therefore lead not to more employment but to less.

The second reason falsifying the debate over whether government should give up the fight against inflation has to do with the effect of inflation on interest rates. There are two rates to be considered: the nominal rate and the real rate, which is the nominal rate minus the rate of inflation. When we talk about historic interest rates at the banks, what we are talking about is the inflation rate plus about three per cent. That is the historic norm.

I think it can be taken for granted that the nominal rate cannot be deliberately held down below the rate of inflation. In the long run the real rate must be at least zero and probably positive. Although there have been negative rates of two or three per cent for short periods, for the authorities to try to maintain a negative real rate for a prolonged period would require an accelerated expansion of the money supply, which would itself be highly inflationary.

It follows that if the rate of inflation is 10 per cent a year, interest rates in the long run must be at least 10 to 12 per cent. If the rate of inflation rises to 15 or 18 per cent, interest rates must rise correspondingly. With inflation at 10 per cent a year or more, a positive real rate of interest can only be the result of some restraint and a monetary policy that, among other things, is intended to restrain inflation.

The historic norm for the real interest rate is three per cent, but over the last year or two in Canada it has been running at between five and 10 per cent. However, high nominal interest rates, even with a real rate of zero to two per cent, are disruptive. They frighten people, and most household budgets simply cannot accommodate them.

If business and consumers nevertheless do borrow, it can only be in the expectation that inflation will continue and raise their prices and incomes enough to cover the high rate. Small businesses, farmers and everyone else with incomes that do not keep up with inflation pay the price. If inflation later subsides and a high real rate is added to high nominal rates, the burden becomes impossible.

Because of the uncertainty created in the last few years, long-term loans now carry variable rates. Five-year renewable mortgages were an innovation a few years ago, but three-year and even one-year mortgages are now the rule. The housing and auto industries are vivid examples of the havoc caused by high interest rates. Would-be home owners cannot afford the mortgage payments involved. The mortgage companies will not lend, because the buyers do not qualify, whatever their prospects for rising incomes in the future may be, and the housing industry withers on the vine.

People who bought houses five years ago at the then low interest rates are hit with huge increases, increases that are among the reasons trade unionists give to support higher wage demands. Meanwhile, thousands of people faced with mortgage renewals they could not afford have lost their homes. A healthy and growing housing industry is simply not possible with interest rates high enough to cover a high, let alone a rising, rate of inflation. The same is true of the auto industry and other consumer durables, which depend heavily on instalment buying.

High interest rates thus seem to be a key link between the two aspects of stagflation, which is defined as inflation on the one hand and recession on the other, and this is something we really have not encountered in the past. They are an inevitable consequence of inflation. By adding to costs, prices and the demand for high incomes they also contribute to inflation. At the same time they contribute to stagnation, because they inhibit the borrowing, investment and consumer spending on which growth depends.

Although the addition to inflation can be significant, and the national income figures for the last few years show that it has been, the restraining effect in the sense that, without high interest rates inflation would be worse, is even greater. If this were not so, it would logically follow that low interest rates would be a better prescription against inflation than high ones and zero interest rates would be best of all.

Proposals to lower interest rates in ways that would accelerate inflation are a contradiction in terms and would soon aggravate rather than alleviate stagnation. It follows that if tight money and high interest rates will not cure inflation, neither will an inflationary loosening of the brakes cure stagnation. In other words, stagflation, which again is a combination of inflation and stagnation, does not consist of two separate phenomena, both of which happen by ill luck to be afflicting us at the same time. On the contrary, inflation and stagnation are two sides of the same coin; inflation contributes to stagnation, and stagnation contributes to inflation.

So this once again brings us to wage and price controls, which seem to offer the only way out of the tangle. The heart of the problem is to devise a controls program that is both fair and is seen to be fair, one that is at least grudgingly accepted by both business and labour.

A policy limited to the control of public sector wages does not pass this test. It is difficult to see why this particular group should be singled out for controls, especially when commercial sector wage settlements have been running slightly ahead of the noncommercial sector in the past year. Such a limited program may also be expected to have a correspondingly limited effect on the inflation rate.

An essential condition for success is that people subject to controls believe that others will also be subject to the same treatment. If everybody accepted a reduction in the rate of increase of their income at the same time, then wage and price inflation could come down together and people would not necessarily be any worse off in real purchasing power or living standards. If only one group in isolation accepts the lower income increase, then that group will certainly be worse off.

12:10 p.m.

While the Premier was sitting on the fence waiting for the opinion polis to tell him what measures he should take in Ontario to control inflation, my leader announced a program that was designed to fit in a national thrust and one that was equitable and fair. It did not single out any one sector of society; I have to stress that point.

Our program called for across-the-board wage and price controls notched at the lower levels of income as a first step, and only as a first step, to an economic recovery program. We also called on the government to practice fiscal restraint and to slash government waste, a feature of an economic recovery program which I will deal with later.

As I mentioned earlier, governments need to cut spending and reduce deficits despite the objections about the political or economic difficulty of such measures. Too many of these objections are simply an excuse for avoiding the painful task of cutting back cherished government programs. Of course it is not fun, for those huge deficits are leaving too little room for interest rates to come down to where they should be. They are reducing the availability of funds for productive development of the economy.

Cutting costs has never been more important. If it is important in the sectors of society that create the wealth, it is even more important in the sectors that spend the wealth. A government that is not cutting its deficit and cutting inefficient, nonproductive spending is contributing more to the problem than it is to the solution. In spite of all the rhetoric about cuts, on the bottom line of too many government budgets the total expenditures continue to rise by 10, 15 or 20 per cent. It is simply unacceptable and it must stop.

After all the long years of deficit spending as an economic stimulus, governments need to adapt to current reality. If deficit spending is such a massive spur, we can hardly have a more stimulative fiscal stance than the current federal budget, but the state of the economy makes it plain that is not the answer. We do not need to talk just about the deficit spending of the federal government but by the provincial governments as well. If deficit spending ever did work, it is not working any more. Those who continue to feel that even more spending is what we require to get us out of trouble need look no further than the disastrous results such policies produced in France, and the recent abandonment of those policies.

Not only has the federal government been guilty of deficit spending, but the provincial governments have been just as guilty. The need for restraint extends to all levels of government, including municipal governments. Many municipalities in some provinces have already recognized the need, but all governments should be urged and encouraged to be just as hard-nosed with public spending as any citizen is with his own money at this time in our history.

Bill 179 is a first step in dealing with the problems that have developed over a period of many years and for which we are all responsible: governments and the private and public sectors alike. The attitude of individuals in business until relatively recent times has been to spend freely, disregarding the fact that the economic climate will not always be favoured with cloudless, sunny days.

Rather than getting 100 cents of productive value for every dollar spent, business has simply ignored good management principles, and rather than streamline, consolidate, automate, eliminate, defer or cut programs, services, work, procedures, projects and jobs, they have simply incurred more debt to meet the expenditures of doing business, assuming that there will always be a demand for their product and services at any price.

Business could get away with this type of management during the good times that followed the Second World War, but this practice, combined with the industrial revolution in other countries, contributed to inflation.

The resulting effect of inflation is that it has radically changed our spending and financing patterns. There are corporations and consumers whose debt loads are too high. There are cases where the lack of discipline that inflation allows has put productivity out of whack with international competition. Those distortions and excesses have to be corrected and in fact are being corrected, however painfully.

Corporations of every stripe are trimming costs and re-examining budgets and spending plans to see where money can be spent more productively and efficiently. The financial situation of many businesses is still weak and various actions by management in restraining costs is a vital first step towards recovery.

Personally, I do not believe governments are helping the situation by bailing out businesses that are on the verge of bankruptcy for no other reason than mismanagement and failure to do a complete re-examination of how they do business in a changing economic climate. I firmly believe the federal government made a mistake in bailing out such businesses as Dome Petroleum and Maislin Transport.

Although I do not get unanimous support from my own colleagues, I feel the provincial government, by bailing out Massey-Ferguson and Chrysler, has set a precedent which is going to be difficult to live with. I am sure there will be other businesses lining up for government handouts. At what point does the government cut off the list? I will have more to say about government's contribution towards inflation in a minute or so.

Another thing that greatly disturbed me was the way the then Minister of Industry and Tourism (Mr. Grossman) handled the White deal. He has turned that company over into the hands of an American concern that does not give a damn about the prosperity of that company in this province.

As far as I am concerned -- and I have heard it from several sources -- the person who ended up getting that company could be considered nothing less than a con artist. I am told he will milk the system in this province and then he will declare bankruptcy, retreating to the United States, having made all the profit he can out of the system.

My colleague questioned the minister about this deal. He tried to encourage the minister to keep that company under Canadian ownership. But the guy who ended up with ownership was just a notch smarter than the minister. We are going to see that company milked to death and the chap will retreat to his own country, having made all he could possibly make out of it. I think it is a crime.

Not unlike corporations, individual Canadians have been cutting costs as well as revising their lifestyles: bringing debts under control, altering consumption patterns and delaying major purchases. It has been a slow process, but individuals finally have come to the realization that they must be extremely sensible and careful about managing their finances until such time as the clouds of recession pass by. Even then, it is to be hoped that good management will prevail in order to avoid another round of inflation.

In the public sector, there are two methods available to fight inflation. One which I have already alluded to is monetary restraint. The other, which I want to deal with briefly, is fiscal restraint.

If ever there was a finger to be pointed at the major cause of inflation, it must be pointed at governments. As far as fiscal restraint is concerned, the record of governments has not been good. It is a simple fact that governments need to cut spending and reduce deficits and they need to start now.

Before the NDP accuses me of advocating a cutback in social services, I want to say that in these times of economic hardship the government commitment must be, first, the reinforcement of the safety net for those who fall victim to hard times and, second, the development of an industrial strategy that will create jobs.

Until 1973, growth in the post-war economy was relatively sufficient to support the expansion of our social services. What has happened since then is that we have not reinvested enough in our economic engines to support the social programs we have in place. It is not that government has spent too much on social programs; our sins are sins of omission. We have failed to ensure the modernization, innovation and industrial development that is so necessary to sustain our social commitments.

12:20 p.m.

The knee-jerk reaction that we can solve many of our problems by throwing money at them will not bring a long-term cure. Yet we need more money, but not printed money or borrowed money or even taxpayers' money. What we urgently need is new money, new money from new wealth, new revenues from new industries, and new income taxes from new employment.

We need a two-pronged policy of more assistance to those who are suffering most from the economic crunch and more assistance to enterprise that can produce real wealth for our people by competing effectively in the world.

Not too long ago, Larkin Kerwin, president of the National Research Council, said that a real commitment to research and development could produce 650,000 jobs for Canadians. High technology, sophisticated manufacturing processes, resource husbandry and development, skilled manpower training, the information society -- these are the places where governments with a singular determination should be investing for people and encouraging investments by people. Rather than throwing money at the problems first, we should be putting money into the solutions.

Let us take a look at the Ontario government's priorities over the last number of years. During the 1970s, the government spent $1.9 million of taxpayers' money on public opinion polls. They still have not learned. They are still governing by public opinion polls, and it is a sheer waste of taxpayers' money.

There can be no question in anyone's mind that the Premier and his crew govern by public opinion polls. In the 11 months preceding the 1981 election, the government spent a further $609,737 on 25 polls to decide when the election should be called and what goodies it should hand out to woo the voters.

The government has invested a total of $508 million in land banking schemes, some of which are now being used to grow poplar trees and some of which are in direct competition with housing developments in the private sector. Various royal commissions set up by the Ontario government have cost Ontario taxpayers over $22 million. While some may have been justified, at least one produced 87 recommendations almost all of which were totally outside the jurisdiction of the provincial government.

The government spent $20.7 million on advertising in 1979-80 and, in 1980-81, the year preceding a provincial election, it spent $34.3 million advertising government programs. I will admit that some government advertising is justified, such as providing information to the general public that Ontario health insurance plan premium assistance is available.

However, the government is wasting taxpayers' money with advertisements telling people to get out and vote in the municipal elections and telling people that Ontario is a wonderful place to live and that they should preserve it and conserve it. People do not need to be told that Ontario is a wonderful place to live. If they thought it was any different, then I am sure they would pull up roots and establish elsewhere.

The government's imposition of regional government and centralization of school boards has resulted in escalating local government costs in some areas. The building of new schools during the good times was a pet plan of the member for Brampton (Mr. Davis), both in his capacity as Premier and in his former portfolio as Minister of Education.

The end result is that we have witnessed over the past few years the closure or part closure of schools throughout the province. On one hand, we have built all these wonderful luxurious schools and on the other hand, when times started to get tough, we decided we were going to close or partly close these schools.

In the same vein, luxurious hospitals were constructed throughout the province with what seemed to be a never-ending supply of money during the good times. However, when the economic climate changed, we saw a concerted effort on the part of the government to close hospitals. The people of rural Ontario will never forget this government's attempt to close their hospitals, which were being cruelly used as scapegoats for the government's past mistakes.

If ever there was an incredible waste in government spending it was in the purchase of Minaki Lodge in northern Ontario. To protect $550,000 in loans from the Northern Ontario Development Corp., the government purchased Minaki Lodge. Since then the lodge has come to represent a public investment of about $25 million. An additional $13 million was spent fixing a road leading to Minaki Lodge and I am not certain that they have bedrooms in the lodge for people to sleep in.

Finally, the purchase of a $10.6-million executive jet at this critical time in our history simply boggles the mind. We welcomed the announcement by the Premier that the Ontario government had cancelled the jet, but we all know there will be costs associated with this cancellation.

I have mentioned various government projects which could be considered nothing more than thoughtless and wasteful expenditure of taxpayers' money. If time permitted, numerous other projects could be mentioned as well. The selling of the jet and the offer to sell some of the land owned by the government should be the first step in a series of cutbacks in wasteful expenditure in the interests of a serious restraint program. It is time for the government to swallow its pride, admit its mistakes and prevent any further drain on the taxpayers' pocketbook.

Before concluding my remarks -- and I have not said too much about the farming situation at this time -- I will read into the record a letter which I think sums it up very well. This letter was written by Dianne Harkin, national co-ordinator for Agri-Food Week being sponsored jointly by the Ontario Federation of Agriculture, Women for the Survival of Agriculture and the Canadian Advisory Council on the Status of Women. It is not very long.

"At this point in our economic crisis, Canada has a choice to make. We can continue to waste money on nonproductive and inefficient government programs such as large corporate bailouts, energy self-sufficiency and ad hoc work programs which provide only a temporary stall in our economic decline, or we can start to recognize the importance of the basic resource industries that built this country and made it prosperous, such as agriculture, forestry, fishing, mining, etc. By stabilizing and supporting these industries now, we can stop the economic decline, re-establish our base and get on the road to recovery.

"Let us take agriculture as an example. According to a government study, it was found that for every $1 million generated by farmers into the economy, 100 other people in the nation are provided with jobs. This means that in 1981, 1.7 million Canadians were employed because Canada's 318,000 farmers generated approximately $17 billion into our economy.

"However, since 1980, because of high interest rates, spiralling input costs together with disastrously low selling prices for many commodities, net farm incomes have eroded. Many farmers have gone bankrupt and most others have had to sell off assets, increase their debt positions, seek off-farm employment or reduce their purchases.

"The net effect is less money being circulated into the economy at the grass-roots level. This is destroying rural Canada and is now penetrating our urban society with increasing thousands being laid off at companies like Massey-Ferguson, International Harvester, Dofasco, Stelco, railways, etc., etc. The ripple effect continues to the smallest of businesses and to individual Canadians. Agriculture's $130-billion capital investment is probably the largest of any industry in Canada. Affect the farmer's purchasing power and you have serious economic problems.

12:30 p.m.

"According to Agriculture Canada's July forecast, net farm income is expected to decline again for 1982, this time by 17 per cent. This is a reduction of about $700 million, leading to approximately 70,000 more nonfarm jobs lost. A further decline is also expected for 1983.

"Financial restraint is only part of the solution. Stabilizing the economy through support of our essential basic resource industries is also necessary if economic recovery is wanted."

I believe I referred to this in my speech, Mr. Speaker. "Preserve the base now or perish tomorrow."

"Emergency income stabilization programs are immediately required for many farm commodities if society wants these farmers to survive. Farmers cannot wait any longer for their provincial and federal ministers to decide on realistic national programs. Nor can the country survive as a whole if the separate and unequal provincial stabilization schemes are allowed to continue. Federal and provincial jealousies and differences must be set aside to resolve these problems in agriculture today. We must also stop listening to the ridiculous debate on marketing boards and meaningless environmental issues by the space cadets in our society.

"Low farm commodity prices are the result of a surplus supply. But farmers are in a catch-22 situation. They cannot afford to grow the crops, nor can they afford not to. Society has benefited from the production efforts of our farmers for a long time, but now comes the time when society has to share the costs and risks in order that we may all prosper again. Canadians may have to pay farmers not to grow crops, buy up surpluses, increase exports or share in some way the cost of stabilization and recovery.

"Our government financial and investment policies have led to a situation where we are deeply concerned about the lack of foreign and business investment, yet we understand that Canadians' personal savings accounts now total into the billions of dollars. Imagine the potential if government business investment incentives were changed. Imagine the potential for job creation if individual Canadians could receive tax advantages through investment in certain industries. We did it for the Canadian movie industry. Imagine if agriculture, food and other important basic industries could be partly unburdened from their high interest costs. Farmers alone paid $2.2 billion in interest costs on their debts in 1981, an increase of $600 million from 1980. It would seem that more Canadians would benefit by having that money percolate up from the grass roots rather than go directly into financial institutions.

"There are many other possibilities that can be explored. For example, in 1980 Canada exported close to $8 billion in food products and imported about $5 billion worth. This gave Canada a trade surplus of $2.7 billion, a very positive gain. However, about $3.5 billion of these imports consisted of identical products grown in Canada. Buying Canadian-grown and processed products could have provided an additional 350,000 jobs in the nonfarm work place. There is also great potential in export sales in the future.

"Let's rearrange our priorities while there is still some remaining hope and confidence.

"As goes agriculture, so goes the nation."

In conclusion, I want to say that controlling inflation in this country is everyone's responsibility. Inflation cannot be fought on the backs of the public sector alone. It has been clearly stated in articles that I have read on the matter that, whatever else may need to be done to bring inflation under control, it is absolutely essential to keep the rate of monetary expansion within reasonable limits.

To expedite its anti-inflationary monetary policy, government imposed wage and price controls. I believe the wage and price controls should have been a mandatory national program and should have included both the public and private sectors. Failing that, the provincial governments have a responsibility to implement such a restraint program. Unfortunately, the Ontario government has chosen to fight inflation on the backs of the public sector.

We in the Liberal Party will be supporting the principle of restraint as only a first step towards an economic recovery, but we will endeavour to amend the bill to make it fair and equitable for all. We will also be encouraging the Ontario government to take the challenge of reindustrialization seriously. We have half the formula right: we are starting to restrain consumption and wage demands in the fight against inflation. But the second stage of the fight against inflation is productivity and real economic growth. What we cannot and must not restrain is investment --

Mr. R. F. Johnston: Especially foreign investment.

The Acting Speaker (Mr. Cousens): Order.

Mr. R. F. Johnston: We are just agreeing with the honourable member.

Mr. Riddell: The Minister of Labour (Mr. Ramsay) stood up and made a little statement in the House. It is unfortunate that kind of statement had to be made, but I will tell the honourable members, there is far more truth than fiction in what he had to say.

The Acting Speaker: I will not ask which statement. Please continue your presentation on Bill 179.

Mr. Riddell: I am pleased that you do not, because I was just about ready to give it.

Let me repeat: We will also be encouraging the Ontario government to take the challenge of reindustrialization seriously. We have half the formula right: we are starting to restrain consumption and wage demands in the fight against inflation. But the second stage of the fight against inflation is productivity and real economic growth. What we cannot and must not restrain is investment in human and physical capital and in intellectual and natural resources.

Whether the restraint on wage and prices is six and five or nine and five, it should be balanced by a much larger percentage to be spent on research and development. It is in this sense that governments must implement policies of growth, not restraint, and strategies of investment rather than retrenchment.

Mr. Conway: On a point of order, Mr. Speaker: Before my friend for Welland-Thorold (Mr. Swart) rises in his place, and in the presence of the member for Riverdale (Mr. Renwick), I want to express my personal surprise as one member who over the past three days has sat listening attentively and at some length to our colleague the member for Downsview (Mr. Di Santo) that the member for Downsview did not appear today to conclude his 40 hours of observation on this bill.

The Acting Speaker: That is not a point of order.

Mr. Swart: Mr. Speaker, if the honourable member had been listening to our colleague the member for Downsview and if he had looked at the last paragraph or two of the Instant Hansard of our colleague's remarks, he would have realized that our colleague was winding down his speech at that time.

Mr. McClellan: Mr. Speaker, speaking to the point of order: I had understood that my colleagues in the Liberal Party were anxious to have some time to speak in the debate. They were accommodated by the member for Downsview, who yielded his place. In the face of such ingratitude, I can only ask the member for Welland-Thorold to remedy any injustice that may be felt on the part of the members of the Liberal Party. He will now proceed to do that.

12:40 p.m.

Mr. Swart: I just want to say to you, Mr. Speaker, that I obey the orders of my whip.

The Acting Speaker: And of the House.

Mr. Swart: I rise to speak on this bill with a mixture of anger and pleasure. After listening to the member for Huron-Middlesex (Mr. Riddell), perhaps I have a bit more anger than pleasure. My anger is really at the government for bringing in this kind of a bill. My pleasure is that I have the opportunity in a free society to get up and speak against such dictatorial legislation.

I also want to say that I rather enjoy speaking after the member for Huron-Middlesex. I was a bit surprised at the right-wing nature of his speech. I should not have been. After listening to him, all I can say is: "Move over, Ronald Reagan. Jack Riddell is coming through." I noticed he was applauded by the Conservatives over there, especially the right-wing Conservatives. Occasionally, he was not even applauded by some members of his own party. I doubt very much that he speaks for all members of the Liberal Party in the comments he made. He certainly was not speaking in a Liberal way.

It has been the practice of many of the members in this party to speak at substantial length on this bill, and I have just been given my marching orders on this. Actually, I did not need them, and neither do our other members here; we think this bill is pretty serious. Personally, I think it may be the bill with the most serious consequences of any bill that has been brought before this Legislature in the seven years I have been a member.

It is a philosophical bill. It sets out the Liberal and Tory philosophy for dealing with Ontario's economic problems. There can be no question about that. This is the first piece of legislation we have had before us that is meant to deal with the economic problems we are faced with in our society. It makes it perfectly clear that the Liberals and Conservatives -- and it does not matter whether it is the Liberals in Ottawa or the Liberals here on this matter -- think the first priority in fighting our major economic problems is to impose wage restraint on the public sector. There is no question about that. The federal Liberals did it under their six and five program, and now the Tories are doing it here under their nine and five program.

We should clearly understand, and I think we all do, the difference in the positions between the parties here. The Liberals are supporting this legislation but say it does not go far enough. They want it to go all the way: wage controls generally across our society. The Tories have stated they really want that too but, as a first measure because of the difficulties a province has in dealing with general wage controls by itself, they have not gone that far.

Let us not make any mistake about it, and let us make it equally clear, we in this party are opposed to this. When the member for Huron-Middlesex talked about this party, he made it very clear in his statement that, somehow or other, we were supporting public sector wage control but did not want to reduce the doctors' incomes. Nothing could be further from the truth. We object to all of this. We believe contracts should be honoured. There is no question about that. The member for Bellwoods (Mr. McClellan) made it clear in his point of order.

We are going to point out, if the government is bringing in wage controls for the public sector and leaving the doctors out, that there is something unfair about that, is there not? Wage controls themselves are unfair, but the government is compounding the unfairness; that is the point our members have been making. But no member in this party will stand up and support the wage controls and the breaking of contracts in any manner.

Nothing so clearly separates us from the Liberals and the Tories as this bill does. I guess the member for Huron-Middlesex made that very clear. It is not just on the issue of wage controls that we disagree; it is because this is their first, foremost and only answer to the three problems of inflation, economic stagnation and massive unemployment, the only answer to date of the Liberals federally or here, or the Conservatives, to the tremendous economic problems that we have in our society.

By contrast, we are convinced that this measure will worsen the economic situation and really do nothing for inflation. In fact, we say this bill is dangerous, because it really turns the focus of the Liberal and Tory governments, as they want it to do, on unions and wages instead of on the real issues and on the real solutions. It creates a red herring. It creates a target. It creates a scapegoat.

The member for Huron-Middlesex indicated this when he was speaking. He was talking about the problems of the farmers, and he was saying that interest rates had to be high. Go out and talk to the farmers about that. Here is an agriculture critic for the Liberal Party saying, "Yes, we must have high interest rates to fight inflation." I am not misquoting him; that is what he said. Then in his next breath he is saying: "It is the unions and the working people who are causing this inflation." So he is using them as the target, particularly the public sector.

An hon. member: On a point of order, Mr. Speaker --

The Acting Speaker: The member for Huron-Middlesex cannot have a point of order. He is not sitting in his place.

An hon. member: On a point of privilege then.

The Acting Speaker: No. You are not in your place.

Mr. Riddell: All right. I will move back to raise a point of privilege, Mr. Speaker. I defy the honourable member to get a copy of Hansard and show where at any time I stood in my place and blamed the labour unions for the situation we are in today. I defy him to do it.

Mr. Swart: Mr. Speaker, I can read Hansard, and he can read Hansard. Whether he intended to say it or not, the blame was put on the working people and the unions for the present situation.

Mr. Riddell: I want to see that, because I say you are lying.

Mr. Swart: The member can see it and read it. He will get his opportunity.

The Acting Speaker: Order.

Mr. Stokes: Did you hear that?

The Acting Speaker: Did the member for Huron-Middlesex use some unparliamentary language?

Mr. Riddell: I guess maybe I did, Mr. Speaker. I said he was lying. I guess I am entitled to my thoughts, but in words I will withdraw it.

The Acting Speaker: Thank you very much.

Mr. Swart: It is just as well, because he is wrong anyway.

Mr. Riddell: You prove it, Swart.

12:50 p.m.

The Acting Speaker: Order, please. We have 10 minutes to go.

Mr. Swart: I have a lot more than 10 minutes to go, Mr. Speaker, but we will do the rest of it on Tuesday.

The fact is that the member for Huron-Middlesex did defend high interest rates in the fight against inflation. The single greatest problem facing the farm community, the single greatest problem that has caused bankruptcy is high interest rates, and he is defending them and trying to put the blame on high wages and public servants.

The government, with the assistance of the Liberals, is trying to find a scapegoat. They think it is popular, as my colleagues have said frequently, and this is the real reason for the bill. It is a political bill. It really has nothing to do with the reality of the situation. The polls showed the public was in favour of some kind of wage restraint; so this bill was introduced. Of course, public employees can always be bashed. That is acceptable to the public. So this bill is designed to serve a political purpose.

I do not think, at least I did not think so up until the member for Huron-Middlesex spoke, that the Liberals, and perhaps even the Tories, believe this provides the answer or any part of the answer to our economic problems. It is just a political move designed for political purposes.

Interjections.

The Acting Speaker: Order.

Mr. Breaugh: There's a demonstration in the front benches over there. Throw the Minister of Health out. He's creating a disturbance.

Mr. Swart: It is a good thing there are two security people standing beside him. They are in the right location.

Mr. Breaugh: Grab him and hustle him out of here.

Mr. Foulds: How's your riding office, Larry? Crowded?

Hon. Mr. Grossman: It's always crowded. They get service in my place.

Mr. Foulds: Crowded with your head.

The Acting Speaker: Order.

Mr. Breaugh: Throw him out. Clear the front benches.

The Acting Speaker: Order, please. The member for Welland-Thorold has the floor.

Mr. Shymko: On a point of order, Mr. Speaker: I am trying to follow the logic of the member for Welland-Thorold, but there is disorder here, and I would like to have some order.

The Acting Speaker: I really would like to have the member for Welland-Thorold continue.

Mr. Swart: Mr. Speaker, I really do not mind being interrupted by the members in this corner of the House, because whatever they say makes so much sense, and they feel so strongly against this bill we have before us, especially against the Liberals, who rise with great hypocrisy and try to criticize this bill.

I have to say that the member for Huron-Middlesex was one member who was not hypocritical. I have to say that for him. He has said, for all the world to hear, that there should be high interest rates. It does not matter if farmers go bankrupt, it does not matter if small business goes bankrupt, there should be high interest rates.

Mr. Riddell: On a point of privilege, Mr. Speaker: Once again, if the honourable member wants to check Hansard, he will see that I said high interest rates flow from an anti-inflationary monetary policy, which the government adopted to bring inflation under control. I indicated that interest rates were not of themselves a way the government uses to control inflation; they are a result of the measures they take to control inflation. Therefore, I did not advocate high interest rates.

Mr. Stokes: What does that mean?

Mr. Riddell: I can understand that you would not understand.

Mr. R. F. Johnston: On a point of order, Mr. Speaker: My point has to do with the business of giving a speech twice. I am wondering whether I can have an opportunity to rehash my speech as well at some point.

The Acting Speaker: The member for Huron-Middlesex was making a point of clarification on his speech; it was a point of privilege.

Mr. Philip: On a point of order, Mr. Speaker: In question period yesterday, the Minister of Municipal Affairs and Housing made a statement about what I had said in my opening remarks in a question. Therefore, if the member for Huron-Middlesex is going to be able to rehash his speech, I should be able to rehash my question and correct the record.

The Acting Speaker: No. The member for Welland-Thorold now has the floor.

Mr. Swart: The member for Huron-Middlesex causes me to make another comment about interest rates; he said they are a result of inflation. They did not happen automatically. It was a conscious policy of the Liberal government in Ottawa to make high interest rates. Anyone who has listened to Governor Bouey knows that. One will hear it every week from Governor Bouey, and when he speaks in that way is he reprimanded by the Liberal government in Ottawa?

Mr. Foulds: No, he is applauded by it.

Mr. Philip: Bouey was MacEachen's ventriloquist, for heaven's sake.

Mr. Swart: In addition to opposing this legislation for its ineffectiveness, for the negative effect, which is what it is going to be, and for its authoritarian nature, there are two other reasons why we in this party oppose it.

First, it is grossly unfair. That is because the government has taken one class, the public sector, and said to them, "Your wages are going to be limited." It has nothing to do with their needs or with their income being too high. It has to do with the fact that they are a group employed by the government, and a group which the government thinks it can clobber and get public support for doing it. The unfairness is even compounded by exempting the doctors.

There is no question about it, this government has done it for political reasons. The polls show that the public generally wants something done. The polls show that the public generally wants some restraints imposed. But this government has done this in such an authoritarian, uneven and unfair manner that I suspect when the realization of what it has done gets through to the public, two or three months from now, it is going to lose more support than it is going to win by this. This is going to backfire politically on the government.

I see members in the Tory benches shaking their heads. I guess that gives evidence that is the reason for doing it. They are shaking their heads to indicate that they are not going to lose popularity.

In addition to the fact that the bill is not going to be effective in doing anything about inflation and is unfair, the third reason for our opposition is that the part of the bill dealing with prices is largely a façade. It is really a joke. It is a hoax on the public.

This government's record of giving any price protection to consumers is a blank, it is an empty page, and this legislation administered by this government will be full of sound and fury signifying nothing.

I want to amplify my views in the three areas: the ineffectiveness of the legislation, the unfairness of the legislation -- and I shall be using examples of the public health nurses in the Niagara region, some of whom are in rather a desperate situation at present -- and the area of the ineffectiveness or uselessness of the legislation with regard to consumer pricing.

There is no question about it, I repeat; it was a political decision. The government said: "If we are going to bring in the wage controls, and as we want to save money and win public support, if we are going to win that public support I guess we will have to put something in there about prices. We will have to let the public think that we are going to control prices as well."

It is going to be no more effective than the Anti-Inflation Board. But before I get into amplifying these three areas, I will recognize the clock.

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

BUSINESS OF THE HOUSE

Hon. Mr. Wells: Mr. Speaker, before moving the adjournment of the House, I might just remind the House that I indicated the other day we will be continuing with this debate, on second reading of Bill 179, on Tuesday afternoon and evening.

The Acting Speaker: There is a band from Germany performing on the main staircase of the Legislature at one o'clock. Members may find it necessary to use the side stairways. This is in an exchange between Markham District High School and a school from Germany.

The House adjourned at 1 p.m.

October 8, 1982