Hansard Transcripts 1983-Jan-20 | Legislative Assembly of Ontario

Hon. Mr. Davis: Mr. Speaker, I wish to inform members of the House of the very sad news that Mrs. Alice Nixon, the wife of the former Premier of our province, Harry Nixon -- I know this is known to the members of the party opposite, but perhaps not all have heard -- passed away quietly this morning in St. George, not far from the Nixon family farm where she spent many happy years. She would have been 93 years old on February 24 of this year.

I would like to express my heartfelt sympathy to her son Robert, who, following in his father's footsteps, has served this Legislature for many years, and to her other children, Kay and Margaret.

I recall with pleasure the time just slightly over three years ago when Mrs. Nixon was recognized in the Speaker's gallery together with her family. The date was October 22, 1979, and I attended a luncheon on that occasion with some other members of the House commemorating the occasion of the 60th anniversary of the first election of the late Harry Nixon to this Legislature. I paid tribute to the family on that occasion as a family that has made a major contribution to the political life of this province for six decades. Today I would like to pay a special tribute to a very gracious lady who I know was very much at the heart of that contribution.

Alice Nixon was married to the late Harry Nixon in 1914, a year after graduation from the Macdonald Institute at the Ontario Agricultural College, which is now the University of Guelph. She has been described as a tower of strength at his side, both on the farm and in his political life, until his death in 1961. Farquhar Oliver was a member of this House for 41 years and served some 35 years with Harry Nixon. When told that Mrs. Nixon had left us, he said: "She was an inspiration. She knew how to build fences."

My thoughts are with the Nixon family today, recalling a very great lady who, with her husband Harry, has left a legacy to their family and to this province.

Mr. Peterson: May I join with the Premier and say that I am sure all members of the government, all members of the Legislature, and indeed all of Ontario, sincerely and deeply mourn the passing of Mrs. Alice Nixon, mother of our House leader, Bob Nixon, and widow of former Premier Harry Nixon.

Apart from her relationship to these two outstanding public figures in Ontario, she was a truly remarkable person in her own right. Everyone who knew her will attest to that. She was loved and respected by all who knew her.

Although her contribution to the province was not as public as that of her husband and her son, it was none the less very important. For more years than many members of this House have lived, she has been widely recognized as a person of unique wisdom, compassion and courage.

In September 1979 I was privileged to participate with some 650 people at a testimonial dinner celebrating 60 years of service by the Nixon family. That occasion merited, indeed inspired, many fine speeches by members from all sides of the House. I am sure all members would agree the star of that family was Alice Nixon.

She was undeterred by the fact that she was surrounded by experienced politicians and cabinet ministers. She gave an outstanding speech; witty, wise and warmly humourous. At that time she was 90 years of age yet she was an inspiration to us all, combining her remarks with the skill of a talented professional and the grace of an intelligent and loving woman who had never, in all her years, backed away from a challenge.

To our colleague Bob Nixon, and to all the Nixon family, I extend the very sincere and heartfelt sympathy of my caucus colleagues and all members of the Liberal Party of Ontario. Alice Nixon's pride in Ontario and the contribution made to it over the years by her husband and son are equalled only by the family's and the province's pride in her as a truly remarkable human being, whose loss is a great sadness to all.

Mr. Rae: Mr. Speaker, on behalf of the members of my party, I want to extend to the Nixon family, and especially to our good friend and colleague Bob Nixon, our sympathy at this time in the death of his mother, Alice Jackson Nixon.

It has been mentioned, of course, that her husband was a cabinet minister in the first farmer-labour government in 1919. For a very brief time he was the Premier of this province. He was a figure of great colour and life in the history of this province. Alice Nixon's son Robert, twice leader of the Ontario Liberal Party, is someone who has contributed tremendously not only to this Legislature but to the wellbeing of the whole province.

In contemplating the death of someone who has given so much of herself and whose family has given so much to this province, someone who has been able to live such a full and clearly such a happy life, perhaps it is appropriate that we not so much mourn that she has now gone but that we give thanks to celebrate that she was here.

Mr. Speaker: Thank you. I am sure all members join in extending condolences to the family and to Robert Nixon in particular. As a mark of our respect, I think it would be appropriate to observe one minute of silence, if you would care to rise with me.

2:10 p.m.

The House observed one minute's silence.

TRIBUTE TO ANATOLI SCHARANSKY

Mr. Breithaupt: Today, Mr. Speaker, you will be aware that there is a vigil being held outside this building to honour Anatoli Scharansky whose 35th birthday it is. It is hoped that, with the interest not only of those members in the Legislature who serve on the Committee for Soviet Jewry but of people in many other parts of the province, there will be concern about the punishment this man is undergoing.

I hope that, as we now are in the 115th day of his hunger strike to protest the denial of exit from the Union of Soviet Socialist Republics, we will have a moment to think of him and to think of the fragility of human rights in many parts of the world. For those members of the Legislature who may wish to send their views to the ambassador of the USSR in Canada, I have postal cards available.

STATEMENTS BY THE MINISTRY

BOILER EXPLOSION

Hon. Mr. Wiseman: Mr. Speaker, I would like to inform the House that work is continuing at the present time to restore normal temperatures by the end of today to all the buildings affected by the boiler explosion of Tuesday morning. These include the Legislative Building, the buildings of the Queen's Park complex, 880 Bay Street, 2 Surrey Place, St. Joseph's College and the Banting Institute.

To this point my ministry has been relying on steam provided by the Toronto General Hospital as a temporary heat source. This has been assisted by a portable boiler which was set up just in the back of the Legislature. Very shortly we should be able to tap into the Toronto district heating system. This will ensure a full supply of heat for all our buildings, as well as St. Joseph's College School. At the same time our own No. 3 boiler has been repaired and testing is nearing completion so that we may fire it up.

This morning when our government employees returned to work we were still in the process of managing and distributing a limited supply of heat. Our hardworking crews reported this morning that it was a very difficult night with some crucial moments. At times it was necessary to reduce the feed of steam from the hospital in order to meet the hospital's needs. We also experienced difficulties with the portable boiler heating the Legislative Building. For these reasons, and also because of extremely low temperatures throughout the night, we did not have as much steam this morning as we had anticipated. Some buildings were cooler than others.

I am pleased with the substantial progress that has been made in returning the heating system at Queen's Park to normal. Many people have assisted us over the last few days in getting our system up to full steam, and I would like to recognize them at this time. Many times throughout our lifetime we hear that people do not come out and support us as much as they once did. Coming from a rural community where that is still done -- and some people think it is not done in the city -- I would like to say it has happened in this case and to recognize those people. Without the support of the Toronto General Hospital, the Toronto District Heating Corp. and Women's College Hospital, we would not be as warm as we are here today and much damage would have been caused.

I also would like to thank the media, who often are ridiculed for not being helpful. Without their support in getting the news out to our employees and the people of Ontario many would not have known what was happening here. So we want to thank them as well.

When I visited Sister Dorothy and all her staff at St. Joe's College, they were down to the mid-50s, but she was her usual pleasant self. Today I am happy to report they are now up to almost 70 degrees and are able to carry on with examinations; I am sure the daughter of the member for Sudbury (Mr. Gordon), who attends that school will be very happy about that.

To the Banting Institute, and to my friend Carl Rubino from the great county of Lanark, who is the administrator of Surrey Place, and the staff of those institutions, we are sorry for the inconvenience they were caused.

We also thank all government staff members who were affected, both the members' staff or civil servants. Even though they were told on Wednesday they could stay at home if they wished, many of them turned up for work. In some cases it was almost business as usual.

I also wish to thank the workers and staff in my own ministry. Approximately 100 people worked for 32 hours straight without sleep. Also, I wish to thank the food contractors in our building who supplied the meals to these people. The coffee and doughnuts, etc., were very much appreciated.

Thanks also go to the switchboard girls and fellows who stayed on the job, with the aid of portable heaters, and answered the phones. I also wish to thank the security staff. Two or three cabinet ministers have told me how pleased they were that nothing was touched while they were gone from the buildings, because of our security.

I also thank the Metropolitan Toronto Police, my colleague the Minister of Consumer and Commercial Relations (Mr. Elgie) and the inspectors of his ministry who were on the job, the fire marshal's office, the Metropolitan Toronto Fire Department and the Ministry of Labour inspectors.

Just to show the members how dedicated these employees are, when we really needed heat, one of our employees, who used to be in the heating area, phoned in at five o'clock in the morning and said: Mr. Minister, there is a line there that you may not be familiar with. It was cut off 10 years ago but I think it will still be operational and that some steam can be rerouted through it." We did that, and were able to get another 7,000 pounds of steam that we would not have had.

So, the members can see the amount of co-operation we received, along with their own. We thank you all very much.

[Applause]

Interjections.

Mr. Speaker: Order.

Ms. Copps: Mr. Speaker, on a point of order: In that long thank-you list, the minister forgot to thank the most important group in this exercise. This group could not be found in Toronto, so the minister brought in men from the Hamilton Boiler Works to keep this building going. It just goes to show the government that all the hot air in Ontario does not come from Toronto.

2:20 p.m.

ONTARIO RENTER-BUY SYSTEM

Hon. Mr. Bennett: Mr. Speaker, I would like to take a few moments this afternoon to provide the honourable members with the final results of the Ontario renter-buy program, one of the most successful housing initiatives ever undertaken in this province or, indeed, in this country.

When we announced this program last year we listed several objectives: first, to free up needed rental housing as quickly as possible; second, to stimulate the home-building industry, and finally, to create thousands of jobs in construction and related trades.

I am pleased to announce this afternoon that this program has achieved every one of these objectives. As of today the number of applications received exceeds 16,000. Allowing for a small fall-off of the applications as they go forward for the approval process, we can say with confidence that the result of this program will be that more than 15,000 new housing units will become occupied in this province.

The purchase of new homes occurred in every corner of the province, from the major metropolitan areas such as Toronto, Ottawa and Hamilton to small communities such as Alexandria and Simcoe, and in the northern municipalities from Iroquois Falls to Ear Falls. In fact, almost all municipalities, townships and districts had new homes being built and sold under this program, and I have sent to each of the members a full list of all the communities that have participated in the program.

Of the total units, some 59 per cent, or more than 9,400, have been purchased by people living in rental accommodation; the remainder were first-time home buyers. So this program met a major goal by freeing up some 9,400 rental units. In addition it helped to reduce the pressure on rental housing by ensuring that thousands of potential renters became home owners in our province.

The renter-buy program, along with our very successful Ontario rental construction loan program, will go a long way in addressing the problems of rental housing in our province. As I said during the estimates of my ministry, some 15,730 units of new rental construction proceeding in this province are directly attributable to the interest-free loans provided by that program.

As I said earlier, the thousands of homes and condominiums sold under the renter-buy program mean jobs for Ontarians. Going on the industry average of 2.5 person-years of work per unit, this program will account for between 37,500 and 40,000 person-years of work in building and related trades. This is in addition to the 40,000 person-years of work guaranteed by the Ontario rental construction loan program and does not include the additional economic stimulus resulting from the new home owners buying stoves, refrigerators, washing machines, carpets and other items that will add to the work force opportunity.

I would be remiss if I did not acknowledge the contribution of other participants who helped make this program a success. First and in particular we must express our thanks to the leaders of the housing industry in Ontario, who formed a partnership with the federal government and with my ministry to create and conduct the first-ever government/private-industry marketing program in housing in Canada. I believe that in the future we will look back on the renter-buy program and see that first marketing partnership as a truly major step in the housing industry in Ontario. In fact new possibilities for co-operation are already under discussion with the industry.

Finally, I think credit is also due to the staff of my ministry, and particularly those in the Ontario Land Corp. who had the task of administering the program, checking and approving the applications and, very important, ensuring that the renter-buy loans were in the hands of the purchasers at the time of their closing. Except for a few temporary clerical personnel the entire program has been handled by existing staff in the Ontario Land Corp. They took an average of more than 400 phone calls every working day in addition to the many applicants who arrived in person at their office. They dealt with the builders and with the lawyers.

It has been an extremely rewarding performance by the people in the ministry. The quality of the work performed by our staff matched the quality of the renter-buy program. Indeed, they were both winners.

INDIAN BAND AGREEMENT

Hon. Mr. Pope: Mr. Speaker, I would like to inform the Legislature today of some of the pertinent facts about the fishing agreement I signed on December 17, 1982, with most of the status Indian people of Ontario. In view of the sensitive nature of this agreement I think it is necessary to clarify the roles of the province of Ontario and the status Indian people regarding the use and management of our fisheries resource.

After outlining the historical framework of this agreement for members, I would like to describe its important terms, the potential benefits to the people of Ontario, provisions for public consultation and the regulatory mechanism for implementation.

It is important for us to recognize that the Indian people of Ontario have historically had special status accorded to them by the crown. Honourable members will recall the Robinson treaties of 1850 gave the Indian people special status regarding hunting and fishing. The British North America Act of 1867 recognized the special status of Indian people. This special status continued to be recognized in Treaty 3, signed in 1873; Treaty 5, signed in 1871, and Treaty 9, signed in 1905 and 1929, particularly by affirming special hunting and fishing rights.

Further, the Canadian Constitution of 1982 reaffirms the special rights of the Indian people. This Constitution, under section 37, specifically guarantees that a conference of first ministers will be held within a year of its signing to identify and define these rights. The First Ministers' Conference on Aboriginal and Treaty Rights is scheduled to be held in Ottawa on March 15 and 16.

The agreement I signed last December is not intended to affect the aboriginal, treaty or constitutional rights of the Indian people. These rights will be resolved in other forums. The government of Ontario has always acknowledged the special rights of the province's status Indian people. In 1979, the Ontario Ministry of Natural Resources recognized the existence of treaty rights relating to fishing and the social and economic needs and interests of the Indian people in fishing for their personal consumption. A policy of exercising leniency with respect to the laying of charges against status Indian people fishing for food for themselves was developed and applied consistently throughout Ontario.

A legal basis for this policy was never established. As a result, the administrative limits of the policy were being tested by the Indian people and ministry staff in some areas of Ontario. In some cases, this has led to increasing confrontation and antagonism. Simultaneously, there was a growing interest in asking the courts for interpretation of aboriginal and treaty rights. The Constitution will create a framework by which we can address the recognition and definition of these rights on a long-term basis. However, there was a need for an interim agreement of understanding between the Indian people and the governments with respect to the fisheries resource. Such an agreement would ease growing confrontation and administrative problems while relieving the pressure on the courts to define aboriginal and treaty rights.

Honourable members are aware that I have, on several occasions, expressed our willingness to negotiate with the Indian people and the federal government to reach agreement on changes to the various game and fish laws that are seen to be in conflict with the Indian treaty rights. I wish to take this opportunity to reconfirm this. On February 10, 1982. the government of Ontario signed a memorandum of understanding with the government of Canada and the status Indian people that was intended to resolve issues and develop a co-operative and mutually acceptable management system until treaty and aboriginal questions were resolved within the constitutional forum.

From February 1982 until December 17, 1982, we held tripartite negotiations in which I represented Ontario. The result was the agreement I signed on December 17, an agreement I am confident will be signed with only very minor modifications by the federal government. We anticipate that discussions will end soon and that the federal government will sign the document in February.

I also wish to point out that before the signing of this agreement, the native people did not recognize the authority of government to control in any way their traditional fishing activities nor did they accept our policy of leniency. I would like to quote from a resolution passed by the Indian people in August 1979 regarding this matter: "Be it resolved that we, the All Chiefs Assembly of Ontario, do hereby reject in the entirety of the recently issued guidelines contained in the May 10, 1979, communiqué from the Ministry of Natural Resources."

2:30 p.m.

There has been some criticism that there was a lack of public consultation leading to the signing of the December 17 agreement. I am sure honourable members understand that the sensitivity of the negotiations, especially in the absence of a legal or constitutional framework, meant that the principles of the agreement were discussed primarily among the three parties, the governments of Ontario and Canada and the status Indian people of Ontario.

As negotiator for the province, I ensured that the interests of all users in Ontario were presented, but I wish to advise the House today that after the first draft of the agreement was reached in August 1982, I did involve interest groups in discussions of this matter.

On August 14 and November 25, I met with the executive members of the Northern Ontario Tourist Outfitters' Association to bring them up to date on my negotiations and how I expected they would change fishing regulations. They provided me with criticisms and comments, some of which affected the final terms of the agreement and the understanding of the parties concerning fishing issues. I also held consultations with representatives of the Ontario Federation of Anglers and Hunters in December to bring them up to date and to solicit their advice.

Now I wish to review briefly some of the more important articles in the agreement as it now stands.

Article I is an outline of the purpose I described earlier.

Article 2 explains the role of the independent biologist. This biologist is to study the fisheries resource in areas where it is of significance to the Indian people, then offer a biological position from a neutral source. The independent biologist also will be expected to liaise with the Indian people and the ministry regarding the biological basis for commercial fishing licence conditions. This should help develop support and respect among Indian people for my ministry's biological judgements concerning commercial fisheries.

Article 3 offers the first step towards both legally recognizing the practice of harvest fishing and controlling this practice in the interests of conservation for the benefit of all the people of Ontario. This is particularly significant in that the Indian people have recognized the role of government in managing what they perceive as an aboriginal right. I should also note that the Minister of Natural Resources will have the authority to limit and control harvest fishing with a view to conservation of the resource and that such restrictions will be enforceable by regulations under the federal Fisheries Act.

Article 5 ensures that laws governing commercial fishing will continue to apply equally to Indian and non-Indian fishermen. However, the agreement provides for more extensive consultation between my ministry and the Indian people relating to commercial licence conditions to ensure that they have input into decisions concerning their livelihood.

Article 6 establishes a variety of zones to protect the traditional interests of Indian people. This will also ensure that the Indian people have input into the resource management decisions as well as economic development activities. These zones do not become effective in law until the appropriate amendments are made to the Ontario fishery regulations and/or the Fisheries Act.

I would like to outline for the House now the types of zones included in the agreement.

Zone 1 includes waters primarily adjacent to reserves and provides for exclusive use of the fishery resource by the Indian people. If there is a substantial non-Indian sport fishery, the water will be a zone 1-A to allow use by non-Indian anglers.

Zone 2 includes waters traditionally used by Indian people where there is very little, if any, non-Indian fishing activity. In this zone Indian people will have the exclusive opportunity to fish commercially under licence. It will be established only in areas where non-Indian commercial fisheries do not exist and where Indian commercial fisheries do exist. Zone 2-A provides the Indian people with exclusive opportunities for commercial fishing and other economic activities such as tourist camps. Zone 2-A will include waters where Indian people have such economic development interests and non-Indian people do not. Sports fishing activities will continue in zones 2 and 2-A.

Zone 3 will accommodate waters significant to the Indian people, but will in no way restrict other users.

I also wish to state that all persons will be allowed free and unimpeded access into and through all bodies of water, regardless of the zoning. I should also stress that zones must be accepted by Ontario and be incorporated into the Ontario fishery regulations under the federal Fisheries Act before they become effective. As part of the provincial approval I have stated that other interest groups will be consulted.

The Ministry of Natural Resources will prepare management proposals for the use of the fishery resource within each zone once it has been established. These will include rules proposed by the Indian people. All such proposals are subject to Ontario's approval and must be put into regulation under the Fisheries Act before they become effective.

Article 7 provides for the initial appointment of 20 Indian conservation officers to improve communications and involve the Indian people in resource management. The salaries of these conservation officers will be paid by the federal government. These officers will have the same powers and complete the same training as ministry conservation officers and will be supervised by the ministry and located in ministry offices.

Article 8 provides for the appointment of an independent umpire, agreed to by all parties, who will hear disputes put forward by any of the parties with respect to the interpretation and application of the agreement. An appeal of the umpire's decision is heard by the Lieutenant Governor in Council.

Article 10. as I mentioned earlier, says the agreement does not define or recognize treaty or aboriginal rights and will not prejudice. affect or derogate the outcome of constitutional discussions designed for this purpose.

As I noted earlier, I wish to stress that public consultation is a vital aspect of this agreement. In order to implement this agreement once it is ratified, I propose to establish two advisory bodies. I have, to date, invited the Ontario Federation of Anglers and Hunters, NOTOA, the chambers of commerce, municipal organizations and the Indian band councils to suggest names of people to sit on these committees. In this manner, I will ensure that all interests are considered before I make specific decisions or before recommendations are made to cabinet.

First, there will be regional committees with members of representative interest groups who will be asked to consider and offer advice on band bylaws, fisheries management prescriptions proposed by the Indian people, zoning allocations and harvest fishing limitations based on conservation. Then we will have a provincial committee to consider and offer advice on changes to provincial regulations and issues of broad provincial interest, including the comments of the regional committees.

This agreement can come into effect only by amendments to the Ontario fishery regulations. Until these regulations can be reviewed by the provincial committee and passed by the cabinet, the status quo will remain.

The suggestions of both advisory committees will be presented to the Minister of Natural Resources, and he will review them with cabinet, along with amended or new fishing regulations. When regulations are issued, these recommendations will be filed with this House. The Ontario fishery regulations must then be approved by the federal government.

I should stress that this agreement will not significantly affect any existing commercial or tourist fishing business on any water body. The signatories to the agreement have all acknowledged the rights of these groups. In addition, there will be minimal impact, if any, on sports and commercial fishing in areas of intensive non-Indian use. This includes Lake Simcoe, Lake Nipissing, the North Channel, Manitoulin Island and Lake of the Woods.

I would like to conclude by briefly highlighting some of the prime benefits I feel this agreement will achieve once it is ratified.

It will alleviate confrontation between my ministry and the status Indian people of Ontario in fisheries management and administration, particularly law enforcement. As such, it will provide a more positive relationship between the Indian people and other user groups.

It will provide a way to recognize legally the needs and traditional interests of Indian people to fish for personal consumption as well as offering the government of Ontario a way to control such activities legally. Overall, this will improve the government's ability to manage the fishery in a way that recognizes conservation and all user groups.

I expect that once the agreement is ratified, the Indian people of Ontario will find it unnecessary to proceed with matters before the courts now dealing with questions of aboriginal and treaty rights. I am sure the constitutional discussions will provide for the negotiation of such rights.

It will allow us to improve fishery biological data, so the Ministry of Natural Resources can allocate fish among all user groups.

It will provide for increased law enforcement, something that will help protect fish stocks.

It will allow Indian people to play a bigger role in the management of the fisheries resource, helping them to understand fisheries management in relation to all user groups.

It will help the Indian people to increase their involvement in economic developments making use of the fisheries resource. Again, this will improve their understanding of the economics of such ventures, while helping them to co-operate with the commercial fishing and tourist fishing industries.

Above all, it will provide agreement on the paramount importance of conservation in the management of our fisheries resource, resulting in better fisheries management and increasing the availability of fish stocks for all user groups.

I trust I have clarified some of the important points in this agreement.

2:40 p.m.

TRUST COMPANY SECURITIES

Hon. Mr. Elgie: Mr. Speaker, the recent movement of assets from the Crown Trust Co. offices to the vaults of the Bank of Canada has given rise to certain questions and expressions of concern, particularly on the part of persons doing business with Crown Trust Co. In order to reduce the concern about this movement of assets, I would like to make the following comments.

There are two very distinct kinds of securities under the management or control of Crown Trust Co. The first kind is securities held in a fiduciary capacity, on behalf of estates, trusts and agency operations. These are not securities owned by Crown Trust; rather, they are securities entrusted to the company for management, for example, as the executor or administrator of an estate. Woods Gordon, acting under the direction of the registrar of loan and trust corporations, was required to take possession and control of these securities and to account for all the securities being held for individual accounts.

The Woods Gordon review of these fiduciary operations indicates that the management processes and procedures being followed in respect of these securities is sound. These securities being held on account of others are under good control and are appropriately accounted for and segregated from the securities belonging to Crown Trust. Woods Gordon is satisfied that none of the lending deficiencies that I reported on Monday relates to these fiduciary operations.

The estate, trust and agency operations were not involved in the movement of securities by the Canada Deposit Insurance Corp., and dealings with those securities (i.e., the fiduciary securities) should have returned virtually to normal by now. There is a qualification of this statement in that the cash flow in respect of some individual accounts was commingled with cash belonging to Crown Trust, and it was necessary to impose the limit of $20,000 on withdrawals of this cash.

Under the arrangements by which the Canada Deposit Insurance Corp. made its funds available to Crown Trust, the trust company was required to provide security to CDIC. The security pledged was its own assets, including stocks and bonds owned by the trust company, not the fiduciary assets. These securities, as indicated above, are held separate and apart from those held in a fiduciary capacity for others. It was these company-owned securities that were turned over to a trustee on behalf of CDIC in accordance with normal operating procedures in such circumstances. While these securities now are being physically held by the Bank of Canada under the terms of the agreement with CDIC, Crown Trust still maintains the responsibility for the management of the portfolio, as it did before.

The final point I wish to make relates to the future and to the staff of Crown Trust. As I indicated on Monday, I believe a new arrangement should be made to enable Crown Trust to make payments to its depositors without restriction in amount as such deposits become due. Further, I stated that the new arrangement would contemplate an early transfer of the company or its business and assets to new acceptable ownership.

I wish to make it clear that it is still our intention to proceed in this manner and that in the process we expect that the present staff will largely continue in their present functions. Woods Gordon have advised me that they are impressed with the apparent competence of virtually all the officers and employees of Crown Trust, and I would not want any of my comments about the financial management of the company to reflect unfairly on its staff. Since the registrar has been in possession, we know that the staff of the company have been providing highly professional services to Crown Trust clients and customers, and we are sure they will continue to do so.

RESPONSE TO ORAL QUESTIONS

Mr. Rae: On a point of order, Mr. Speaker: We in this party are awaiting the answers to two previously asked questions which, if answered now, would give us a chance to ask perhaps slightly better questions when we come to question period.

Mr. Speaker: That is not really a point of order. I draw to the honourable member's attention that this is Thursday afternoon and time is pressing a bit. If we get on with oral questions, then he can ask at the appropriate time.

ORAL QUESTIONS

REGULATION OF TRUST COMPANIES

Mr. Peterson: Mr. Speaker, I have a question for the minister in charge of trust companies. I want to remind him of his statutory obligations under the Loan and Trust Corporations Act, and I refer, in case he has not read it, to two specific sections, particularly subsection 150(1), which says:

"The registrar shall prepare for the minister, from statements filed by the corporations and from any inspection or inquiries made, an annual report, showing particulars of the business of each corporation as ascertained from such statements, inspection and inquiries, and the report shall be printed and published forthwith after completion."

Then I refer him to subsection 154(1):

"The registrar personally shall visit or cause a duly qualified member of his staff to visit at least once annually the head office of each registered corporation and he shall inspect and examine the statements of the condition and affairs of each corporation and make such inquiries as are necessary to ascertain its condition and the registrar shall report thereon to the minister as to all matters requiring his attention and decision."

Then back to subsection 150(2), because it is very important as it relates thereto: "In the report, the registrar shall allow as assets only such of the investments of the several corporations as are authorized by this act or by their acts of incorporation or by the general acts applicable to such investments."

Subsection 3: "In the report, the registrar shall make all necessary corrections in the annual statements made by the corporations herein provided and is at liberty to increase or diminish the assets or liabilities of the corporations to the true and correct amounts thereof as ascertained by him in the examination of their affairs at the head office or any other branch thereof or otherwise." In other words, he can alter the amounts shown in the corporation's books to conform with reality as he sees fit.

Very clearly, the operative word is "shall." It imposes a positive duty on the registrar to make such inspections and reports back to the minister, and it gives him the power to increase or diminish the figures and the assets as he sees fit.

My question is, when was the last annual inspection of the trust companies, and did his registrar alter any of the figures presented by the companies in his report to the minister?

Hon. Mr. Elgie: Mr. Speaker, let me once again make it very clear that I have asked for an internal review of all the administrative procedures, and I have asked for comments with respect to the resources within that division. That internal review will include matters such as the one being raised by the Leader of the Opposition. He can continue to raise individual questions daily about them, but I will be making a full and complete report on it once I have that report or if I feel a further report by an external body is indicated. I have said that before.

Mr. Peterson: That is not very satisfactory. Let me remind the minister of what his predecessor said on June 11, 1981.

Mr. Wrye: Where is Gordon?

Mr. Peterson: I do not know where he is today. If I were he, I would be too embarrassed to be here.

The minister said in reference to the Re-Mor Astra situation: "We now have much more extensive internal communications ... we feel we have new systems in place for capturing potential problems and bringing them to the attention of top management and ensuring circulation whenever there is any kind of a problem."

He went on to say, in response to questions about the administrative and regulatory capacity of his ministry: "We have something called a supplementary information list, which is a special computerized list of people who might be considered problem people. This is circulated and updated on a daily basis. We have a much more extensive investigation process today. We feel that we have done an awful lot of things and, frankly, many of the things the member" -- that is, the member for Ottawa East (Mr. Roy) "is suggesting are just not needed."

That was a year and a half ago. The minister is aware that there would be untoward transactions going on under his ministry's nose. Is he just going to stand in this House daily giving no response to the very serious questions that are being asked, using personal references rather than addressing the subsequent questions. and go on forever trying to protect an incompetent ministry? Is that his approach now?

Hon. Mr. Elgie: Exactly the opposite. My intention is to have a full and complete review of it and give that information to the House when it is appropriate.

The member has raised the issue of what the previous minister said. Some months ago, I happened to read the estimates of that last year when my colleague was the minister. I also read the reports that were made by members of the staff on changes they had made in procedures with respect to exchanging information. I did not hear anybody talking about any great dissatisfaction with the improvements that had been made, nor did I hear at estimates in November that there was any dissatisfaction with the improvement in the changes that the minister indicated and reported on at those estimates.

Mr. Peterson: How would we know?

Mr. Speaker: Order.

2:50 p.m.

Mr. Rae: Mr. Speaker, it is a foundation of our legal system in this province that no person and no body should he a judge in his own case and in his own cause. Surely we and the public of Ontario are entitled to an independent public investigation into when this ministry first learned of problems with respect to any of these three companies or, indeed, any other companies.

May I ask the minister one specific question? Is he prepared to table any and all correspondence between his ministry and the federal department or the federal inspector general of banks, any internal memoranda and any indications of any phone calls from the industry itself with respect to any of these three companies or, indeed, any other companies that may be in trouble?

Hon. Mr. Elgie: Mr. Speaker, again, and I cannot emphasize this too strongly, the kind of internal review I have asked for, together with the statements I have clearly made -- that an external review will be done if it is needed and that, in either case, I will be reporting to this House and including that aspect of things in the white paper -- add up to the open reporting relationship that the honourable member is talking about and that I want.

Mr. Peterson: I just want the minister to know that I have no faith in his internal review. We have had assurances from his government, and now his response is that we should have brought those matters to his attention, when he had the positive duty under the law to do certain things that, it appears to me at least, were not done. Surely that is a cause for concern.

Is the minister aware that his annual report of 1978 was filed 11 months after the fact? The 1978 report was due and complete on November 30, 1979. The 1979 report was completed December 15, 1980, 11½ months after the fact. The 1980 report was completed on August 5, 1982, 19 months after the fact. We still do not know where his 1981 report is. Presumably it is at the printers, but we do not know what it is and he is not prepared to share it with us.

He is asking us to have faith in him. That is all he is saying, "Have faith, because I am a nice fellow and I care about these things." What I want is some answers to those questions. Where were his regulators, where were the people charged with the specific responsibility of looking at these numbers and having the power to alter them? Where were they when all these things were going on up to two years ago?

Hon. Mr. Elgie: First of all, the member is making a lot of assumptions that may not be quite accurate. What I have indicated is that, rather than acting on inaccurate assumptions, I have asked for a review of the facts, and that is what I have done.

Mr. Speaker: New question; the Leader of the Opposition.

Mr. Kerrio: The investors in Astra and Re-Mor aren't wondering. What is the minister going to tell those people dragging it through the courts now for years?

Mr. Speaker: I have recognized the Leader of the Opposition.

SALE OF RENTAL UNITS

Mr. Peterson: Mr. Speaker, I have another question for the Minister of Consumer and Commercial Relations. He is aware of the concerns of the tenants of the Cadillac Fairview buildings, which were flipped over. He is also aware that there is going to be a tenants' meeting tonight to try to consider their options and protect their interests. They are trying to rest assured that their rents can be properly safeguarded and that they can be applied to the cost of living in the buildings.

The tenants do not know who the owners of those buildings are. There is some question now as to whether the property manager is in the process of attempting to sell that company. They do not know the security of that company, and I assume the minister does not know. We have enough questions with the people about whom we do have some idea, let alone about the ones who are in New York City.

These people are meeting tonight. They are contemplating several courses of action. One, of course, is to pay their rents into trust and to look after the administrative costs of the buildings themselves. I want to ask the minister this question. What is his advice for those Metro tenants who are meeting tonight, who are trying legitimately, I believe, to think of options, at least, to protect their own interests?

Hon. Mr. Elgie: Mr. Speaker, I can appreciate and understand the concerns of those tenants. All I can say at present is that the concern they have regarding the upkeep of their buildings and the payment of rents is something we have under active consideration as well, and I hope to have some comments to the House very shortly.

With respect to what I should tell them to do, I am sure the honourable member knows full well that they should seek careful legal advice before they take any steps.

Mr. Peterson: Has the minister any lawyers he would like to share with them?

I want to ask the minister about the proposed sale that has been reported from Maysfield Property Management to a company called International Capital and Development Corp. He is aware that this company apparently is in New York, but there is very little information as they are not speaking on the telephone. According to Dun and Bradstreet, it derives most of its income from investment advisory services to offshore clients. It is in the shipbuilding and repair business and in real estate development in Miami. It does not appear to be a conventional property management firm. We cannot see any information in its background that gives us any assurance that it has the capacity or the feeling for managing these kinds of units.

Can the minister share with us his knowledge of this company? What is the state of that sale? Has he sent a letter to the Foreign Investment Review Agency, giving his view? Is he prepared to step in and prevent the sale from happening until we solve all the problems that are immediately in front of us?

Hon. Mr. Elgie: From what I have been advised about this particular prospect, I understand that if an agreement has been reached, it is an agreement in principle. The issue of any such sale is under active consideration by the legal staff representing the ministry. When I have information to convey to the Legislature about it, I will do so.

Mr. Rae: Mr. Speaker, that is a rather incredible answer. Is the minister not even prepared to indicate to the House how the government views yet another sale in this whole bizarre series of transactions which have been going on since November? Is he seriously putting forward a point of view that this sale is somehow going to advance the interests of the tenants or any of the people of Ontario? If so, how?

Hon. Mr. Elgie: Mr. Speaker, no, I do not think I left any suggestion that the government was contemplating the value of this sale to tenants. What I said very carefully and, I think, distinctly was that the issue of this sale and some matters related to it were matters that were under active consideration by the government and by lawyers representing the government.

Mr. Peterson: Time is closing in on not only a number of events but also the minister personally. Apart from that, since the minister is aware of the fragility of the Kilderkin situation at present in that it is unable to bank and is having trouble refinancing a number of its mortgages that are out and around the marketplace, let me ask him whether he recognizes that it is increasingly fragile as a property manager.

There is a great deal of uncertainty surrounding the situation. As I suggested a few days ago, he may very well end up being responsible for all of this whether he likes it or not.

My question again is, what plans does the minister have? The tenants are meeting tonight and are suggesting taking some action. I would think he would want to have some advice for them. What is it?

Hon. Mr. Elgie: I have nothing to add to my previous answer.

KILDERKIN INVESTMENTS

Mr. Rae: Mr. Speaker, in answer to a question that was asked earlier this week, the Minister of Consumer and Commercial Relations indicated that Kilderkin Investments had met the payments required on the first and second mortgages on the former Cadillac Fairview buildings.

Since the minister did not say this to the House and has not indicated it elsewhere, has Kilderkin met the payments on the third mortgage to Seaway, Greymac and Crown Trust that it was required to make on January 10?

Hon. Mr. Elgie: Mr. Speaker, those and other matters are being reviewed by both Woods Gordon and Touche Ross in respect of the different companies. When I have information to provide to this House, I will do so.

Mr. Rae: The minister has seized the assets. Does he not even know whether payments were made 10 days ago on mortgage payments to three companies whose assets he has seized? Is he telling the House that he does not even have that information yet?

It is appalling. If Kilderkin is in default on these mortgages, why has the government not acted to protect the remaining assets of the trust companies by exercising its right to foreclose on the mortgages and to take possession of the building? Surely, if the payments are not being made, some action has to be taken on behalf of the tenants and on behalf of the depositors.

Hon. Mr. Elgie: I do not say this in any hostile way, but we can continue to project about the future and "what if" and "what can," but I am telling the members quite candidly that as information evolves, steps to deal with the problems arising from that information will be taken and the House will be advised.

Mr. Peterson: The Ontario Securities Commission issued an order today prohibiting trading in the shares of Greymac Credit and freezing the funds and the securities under Greymac Credit. That is a new wrinkle in this whole situation. Does that situation in any way bear on the minister's assertion in his statement that some $130 million of assets are undersecured, missing, in some way unaccounted for or not financed properly? Is that a response to the insecurity the minister has expressed?

3 p.m.

Hon. Mr. Elgie: Mr. Speaker, as the Leader of the Opposition knows, and as critics for his party have commented many times along with myself, the independence of the securities commission is an important part of the operation of that industry so I am not advised as to when or why it is doing things. I can only speculate, as I am sure he has, that --

Mr. Conway: To whom does the OSC report?

Hon. Mr. Elgie: Is the member for Renfrew North saying the minister should have more control over the OSC to tell it what to do and what not to do? If he is saying that and laughing about that then we have a problem in this Legislature and in this province because its independence is important.

I can only speculate, as I am sure the member has. He will recall about a week ago a cease-trade order was lifted.

Mr. Rae: To get back to the original question, everybody knows that the rents from the Cadillac Fairview tenants do not even cover the first and second mortgages, much less the payment of interest on the third mortgages. Therefore, I would like to ask the minister, first, whether he has considered the possibility that Kilderkin is using the trust company's own money, $152 million of it, to make the payments on those mortgages?

Second, and perhaps most important, why is the government so reluctant to take any action on the buildings with respect to Kilderkin Investments when they are so central to the whole deal and when only Mr. Player knows what happened to $152 million of the trust company's money?

Hon. Mr. Elgie: I cannot recall anyone ever suggesting a reluctance to ask questions relating to Kilderkin. As I have told the member already, there are representatives related to Kilderkin who are at present under oath by Mr. Morrison and that situation may resume shortly. I have said clearly that if the investigations under way leave some information gaps, steps will be taken to correct them. That has never been a problem for me. It may have been for the member but not for me.

Mr. Rae: I think the minister is the one with problems right now.

REGULATION OF TRUST COMPANIES

Mr. Rae: Mr. Speaker, I would like to ask the minister a question with respect to some correspondence he had on June 15, 1982, with an individual who has asked that his name not be made public. The minister may recall he had some correspondence with an individual who had a mortgage bond with a company known as Eaton Bay Mortgage Corp. which was subsequently bought by Seaway Trust.

As the minister will know, this individual wrote him asking how it was he was having such difficulty getting his money out of Seaway when he had made his original investment of all his life savings with a company whose bona fides he had no reason to question. He suggested at that time he did not have quite the same degree of confidence with respect to the investment in Seaway. That individual wrote the minister and the ministry staff was able to help him. He had to pay a penalty but eventually he was able to get his money out of Seaway and put it elsewhere.

The individual wrote the minister and asked whether the minister did not think that the legislation should be changed, and whether the minister did not think it was strange that individuals did not have the right to withdraw their money and were not able to find out more about the bona fides and more about the precise nature of the companies that were engaged in the trust company business. This individual warned the minister that perhaps we were looking at the possibility of another Astra ReMor situation. How wise that individual now seems in the light of everything that has happened.

I would like to quote to the minister his answer to that letter, in which he says. and I am quoting from the minister's reply, "There appears to be no justification at this time to change the Loan and Trust Corporations Act regarding the bond holder's rights in this area, as to do so would make the requirements for a change of ownership in this industry different and more onerous to those of all other corporations." This was on June 15, 1982, and I am sure it was an answer that was prepared for the minister.

Can the minister tell us when he personally was first advised, either by the registrar, by some other individual in his department or by someone in the trust company business, that there were problems with Seaway, with Greymac or with Crown? Can he give us the information as to when he was personally advised that there were problems?

Hon. Mr. Elgie: Mr. Speaker, I do not want to seem to be at odds with the member, because I want it very clearly understood that all of the information with respect to these trust companies will be thoroughly reviewed and reported to the House. That is the kind of information the member will get. and I am not prepared to add to it further at this time until the whole situation is seen in its whole context, which I have not as yet seen.

Mr. Rae: The minister is suggesting to this House that he is going to be judge and jury in his own case, that the ministry is going to be judge and jury in its own cause and that there is going to be no independent inquiry.

Mr. Speaker: Order. I have been patient with the honourable member in asking his questions. Now I would ask him to place a supplementary without further comment.

Mr. Rae: Is the minister not prepared today to give us a simple answer to a simple question: When was he first advised with respect to problems concerning Seaway Trust?

Hon. Mr. Elgie: Again, the leader of the third party knows very well that I have already committed a report to this Legislature with respect to the administrative practices within that division, and it is being reviewed at this moment. He also knows full well that there are a number of legal actions and potential legal actions surrounding the minister, the government and others and there are many complicating factors. When I have that information, when I can report it to this Legislature, I will do so as expeditiously as possible.

Mr. Peterson: Mr. Speaker, surely that information is not secret; it is not going to be a part of some great report. What investigation of Seaway Trust was made by the registrar before it came before the cabinet twice in 1982 for certain approvals?

Hon. Mr. Elgie: Mr. Speaker, as I have said before, I am satisfied that the registrar and his staff were carrying on their regular duties, and I have also advised the Leader of the Opposition before, very clearly, that the recommendation of the registrar was that the asset bases of those companies should be increased and that his other option was to increase their borrowing ratio. This was his view as to the correct approach that should be taken.

Mr. Rae: Mr. Speaker, I wonder if the minister is prepared to answer yes or no to this question: Was he ever advised, either by the registrar or by people in the trust company industry, before November that there were problems with Seaway Trust? Is he prepared to answer yes or no to that question?

Hon. Mr. Elgie: I find it quite incredible that here we are in the midst -- I mean this seriously -- of the Morrison special examination of those five companies --

Mr. Rae: That has nothing to do with this.

Hon. Mr. Elgie: Yes, it has. Here we are with the registrar in occupation and investigating them, and with a minister who has said he is reviewing the administrative procedures within his ministry and that if it is needed we will have an external review and report to the Legislature. I have no further comment.

TAKEOVER OF TRUST COMPANIES

Mr. Epp: Mr. Speaker, I have a question of the Minister of Consumer and Commercial Relations. On Tuesday, my leader asked the Premier (Mr. Davis) what he was going to tell municipal agencies that have money invested in Crown Trust and cannot get it out.

The minister will recall that one week ago the treasurer of the city of Kitchener sent him a copy of a letter to Crown Trust's treasurer Alex Wilson by certified mail. The letter stated the city's urgent need to recover its $1-million short-term deposit. which came due and was rolled over by provincial authorities on January 10.

Today, Kitchener treasurer Robert Eby has indicated that the city will be forced to borrow $500,000 tomorrow and that additional funds may also be required to pay its gas bill and its current payroll. The regional municipality of Ottawa-Carleton will have to borrow $1.8 million next week if its guaranteed income certificate for that amount at Crown Trust, which came due on January 10, is not frozen.

3:10 p.m.

I would like to ask the minister, will these municipalities be able to retrieve their assets and is it the intention of the provincial government to reimburse them for any losses they sustain as a result of the minister's mismanagement, or will property taxpayers be forced to make up the difference?

Hon. Mr. Elgie: Mr. Speaker, if I may answer in reverse, first, the minister does not acknowledge the last part of the member's statement that there was mismanagement. Second, the Premier answered the second part of his statement. Third, I indicated in my statement very clearly on Monday, and I have repeated it, that it is the intent of the government -- and at this time discussions are going on between the Canada Deposit Insurance Corp. and ourselves -- that in the very near future, very shortly I hope, the limit imposed on withdrawal of deposits would be lifted and we would hope that normal operations could resume.

Until I have a final determination made with respect to those issues, I am afraid I have no further answer with respect to the first part of the question.

Mr. Epp: Is the minister aware that the combined assets of the regions of Waterloo, Ottawa-Carleton, Haldimand-Norfolk, Niagara, Metropolitan Toronto and Hamilton-Wentworth, as well as the cities of Kitchener, Ottawa and Oshawa, that are tied up in Crown Trust total $29.5 million? Region of Niagara treasurer Sidney Mowder has stated that any interest costs accruing from the end of next week for an amount of up to $3 million are a direct result of frozen Crown Trust assets.

This situation may cause cash-flow problems for the city of Ottawa, whose $5-million short-term deposit is due today, if the assets are not unfrozen by mid-February. The region of Waterloo would have needed to borrow money in February even if its $2-million term deposit at Crown Trust had not been frozen. If the present circumstances do not change, they will be forced to borrow even more. For other municipalities, investment potential is lost.

Is the minister not at all concerned about these losses, which will ultimately raise property taxes in some areas? Furthermore, another $4 million is invested in Greymac by the region of Hamilton-Wentworth, the city of Mississauga and the borough of East York. If the minister's gloomy innuendoes of Monday are believed, these municipalities may never recover their assets. How does the minister intend to resolve this particular problem?

Hon. Mr. Elgie: The only thing the member seems to have overlooked is why the government moved, why we had this Legislature approve legislation in December to allow the moves that have taken place, and why they were taken. They were taken to protect depositors, creditors and shareholders, and that is what we have done. As to the ultimate disposition of these events and the companies, I indicated clearly on Monday the status as I knew it then and when I have more to report with respect to the outcome of events, I will do it.

Mr. Breaugh: Mr. Speaker, the member for Durham East (Mr. Cureatz) was quoted in Oshawa newspapers as stating that the government's position was that it was prepared to guarantee those investments to the municipalities. I must say I read the statements so far to be slightly different from that. Could the minister clarify it to that extent on those two points? First, is the government now prepared to guarantee the investments by the municipalities in those trust companies? Second, is it prepared at least to address itself to any financial losses which might be sustained by municipalities during the period when the assets were frozen?

Hon. Mr. Elgie: Mr. Speaker, what the member is really asking is that in the event there was a shortfall -- and I have no information yet to report to the House that would confirm that -- he is asking that a preference be given to one individual over another. Is that what he is really suggesting? At this stage of the game, clearly no more can be said on that. I believe the Premier has answered quite clearly his view with respect to any other guarantees.

CHRYSLER PRODUCTION

Mr. Cooke: Mr. Speaker, in the absence of the Minister of Industry and Trade (Mr. Walker), I have a question for the Premier. The Premier will remember that in the last few years Chrysler Corp. has closed its truck plant in Canada, has closed its engine plant in Canada, has announced closure of its spring plant, has cancelled its research and development facility and has unilaterally cancelled the loan guarantee agreement to which this government was a party.

What is the Premier's position on this very serious matter? Specifically, does he think it would be proper for this country to allow this company to continue to exist only with the production of vans and van wagons and no production of cars, which now seems to be the case since car production will now be going to St. Louis rather than staying in Ontario?

Hon. Mr. Davis: Mr. Speaker, I am endeavouring to check. I am not sure a decision has in fact been made. As I recall the history of it, and the honourable member has been somewhat closer to it perhaps, the original contemplation by Chrysler was to move out the rear-wheel-drive auto production. That was part of the initial arrangement.

I think what has happened in the interim is that market conditions for the rear-wheel-drive vehicles have been maintained. In fact, they have been beyond the predictions of Chrysler and this is true of some of the other auto producers as well. The plan initially called for moving auto production out of the particular plant where the van production was to go, so that was part of the understanding some two years ago. The member can correct me if I am wrong.

The only thing that has altered that original position is the question of the spring plant. The question of the diesel operation came up well after the original understandings were reached. The member is shaking his head, but that is factually correct.

Mr. Cooke: They were going to have cars.

Hon. Mr. Davis: I am just giving the member all the components of the particular question he has asked.

The projected diesel operation came to the fore last June, according to my recollection. It was further dealt with early in September and even at that stage the Chrysler people, along with Massey Ferguson and Perkins, were optimistic about the market. Since then, and I cannot account for this, the market conditions have altered to where the people at Chrysler feel there is some question as to the viability of moving a significant part of their production towards diesel.

That happens to be a judgement made by Chrysler, one that is supported by others in the industry. Do not ask me why. Whether it is the price of gasoline or the fact that people prefer gasoline-driven vehicles to diesel, I am not an expert in that area, but that is the history.

With respect to the research facility, that was the involvement of this government in terms of the understanding that was reached a couple of years ago. It was part of what we suggested would be necessary for Ontario to support. They have not approached us to draw down any of those funds and we are under no obligation to Chrysler Canada.

I expressed reservations at the time the initial agreements were made with respect to having a single product. At the same time, that was accepted by the United Auto Workers, as I recall. The only component that has altered is the closing of the spring plant. If the member goes back historically, he will find there was no commitment with respect to the production of passenger vehicles going back those two years.

If the member is asking me whether I personally would like to see continued passenger vehicle construction or assembly by Chrysler in this country, the answer to that would be yes, but I am factually trying to give him my recollection of the understandings.

Mr. Cooke: The Premier might try to refresh his memory. When the van wagons were to go into the present car plant, the van plant was going to be retooled for cars. A deal was struck and changed that there would be no car produced here when there was an agreement for a diesel engine.

Chrysler unilaterally cancelled the diesel engine. Now the variety of products that will be produced by Chrysler in Windsor will be vans and van wagons, making that city incredibly vulnerable. We will probably see that van plant go from two shifts to one and perhaps no shifts whatsoever within two years.

Since this company has unilaterally cancelled the loan guarantee agreement by cancelling the engine plant and closing the spring plant, what are the Premier's expectations? What role will this government take in negotiating a new loan guarantee agreement? Will the Premier make a commitment that it will be the position of this government that cars must be produced in this country if they are going to get assistance from this government?

3:20 p.m.

Hon. Mr. Davis: I regret that the Minister of Industry and Trade is not here. My recollection is that we are not committed to any loan guarantees at this moment, nor are we being requested to provide any. If I am incorrect in my recollection, and I am going totally by recollection, I will be the first to acknowledge it tomorrow. The way things have unfolded, if the member goes back I think he will find we are not committed to any loan guarantee for Chrysler Canada.

Mr. Cooke: Because they have opted out.

Hon. Mr. Davis: They said they did not want the guarantee. I remember the member's rhetoric: when we got into loan guarantees, he was unalterably opposed to them. Now Chrysler are saying they do not want a loan guarantee, he is saying we should give it to them, force it upon them. He is being totally inconsistent and contradictory. He is altering his position once again on this issue, and he and I both know it.

To get back to the diesel plant, I was involved in some of the discussions. There was no firm decision to move ahead with this new diesel facility. Perkins and this government were enthused about it but it was not part of the initial "loan guarantee." If the member wants me to reiterate that I would be delighted to support something other than just the van production, there is no problem. I would like to see a greater diversity of product.

I also suggest it is unfortunate that he is as pessimistic about the marketability of the new van. Once again, I will not say I think it is going to be successful --

Mr. Cooke: That is not what I said about the new van.

Mr. Speaker: Order.

Hon. Mr. Davis: That is what the member said about the van plant; he was trying to negate.

I am not defending Chrysler, but he should look at the figures in terms of employment in this country vis-à-vis the United States. He should then ask himself, in all objectivity and fairness, if it is possible for him to be objective and fair on this issue, whether we have not maintained a fair share in terms of total employment within Chrysler, both US and Canada.

Mr. Wrye: Mr. Speaker, while we are looking at employment, I suggest the Premier might also have a look at the car sales vis-à-vis Canada and the United States. I think he will find the Canadian market has been a very good one for Chrysler.

Let me remind the Premier of the climate of uncertainty of two or three years ago as to the very survival of the Chrysler corporation when the first loan guarantee agreement was struck and the amended agreement continued a clause in which the company could not close the spring plant without ministerial approval. He knows that approval has not been forthcoming, as of this date, from the federal minister. He will also remember that this government committed a $10-million grant to Chrysler for a research and development facility that apparently he had some expectation that Chrysler would draw down on.

Is it the view of the Premier and of this government that the loan guarantee agreement should be upheld by this company, keeping in mind that all its Canadian facilities are in Ontario, including the spring plant? Can the Premier tell us his view in terms of the company's failure, which he expected them to follow, to draw down any of the money and set up research and development? What are the Premier's views on these matters?

Hon. Mr. Davis: Mr. Speaker, I think the member is perhaps asking the wrong person with respect to two or three of those questions. The federal minister cannot live more than three or four miles from the member when he returns to his constituency on the weekend, and the commitments that were contained in the initial agreement were commitments to the government of Canada. Our involvement related to the possibility of us providing some funding for an R and D facility. At this moment it appears that Chrysler is saying to the government of Ontario: "We do not need your money. We are not going to draw down that money." That is where we stand.

If the member is asking me whether I would like to see more R and D, whether it is by Chrysler, General Motors, Ford or American Motors-Renault, the answer to that obviously is yes. If he is suggesting to me that, in terms of our agreement, Chrysler has negated the agreement, I have to answer in the not totally legal sense that it is not obliged to come to us saying: "We have $20 million for an R and D facility. Where is your 50 per cent?" There was no obligation to do that. That was the extent of our commitment. I think perhaps the member is confusing our involvement in the initial agreement with that between Chrysler and the government of Canada.

Mr. Kolyn: Mr. Speaker, I have a question for the Attorney General (Mr. McMurtry), but I notice he has left the chamber. I will defer the question until tomorrow.

Mr. Wrye: Mr. Speaker, I have a new question.

Mr. Speaker: Just before you place your question, the Minister of Consumer and Commercial Relations has the answer to a question asked previously.

TAKEOVER OF TRUST COMPANIES

Hon. Mr. Elgie: Mr. Speaker, on Monday and Tuesday of this week, the leader of the third party posed the question of whether Guaranty Trust or the Trust Companies Association of Canada acted on insider knowledge in withdrawing or attempting to withdraw funds from Crown Trust.

On Tuesday, I said in the House that I was awaiting information from Mr. Alan Marchment, chief executive officer of Guaranty Trust, and Mr. William Potter, president of the trust companies association. I have since received letters from both individuals and I have spoken to them as well. I would like to read the relevant portions into the record.

The letter from the trust companies association, referring to its transfer on January 7, 1983, of $60,465 from Crown Trust, states in part: "This transfer was made by the appropriate officers of the association from demand funds for the purposes of meeting current expenses and has been used for that purpose.

"In view of the statements made in the media in connection with this transfer, it might appear that the association received an advantage over the depositors of Crown Trust Co. at large. In order to dispel this impression, the association has determined to redeposit with Crown Trust Co. the amount of $60,465 and to leave such deposit with Crown Trust Co. until its position has been clarified. Further, the association will not withdraw the funds until it is determined it can do so without prejudice to other depositors."

The letter from Guaranty Trust, referring to the --

Mr. Foulds: Would you buy a used security from this man?

Mr. McClellan: You are putting the cookie back in the cookie jar.

Hon. Mr. Davis: You have left yourself very vulnerable. Some might describe you as being one of those cookies.

Hon. Mr. Elgie: I wouldn't speak too soon. The member opposite should just hang on for five minutes before he puts his foot in his mouth again.

The letter from Guaranty Trust, referring to its attempted withdrawal of a $1-million deposit certificate, states in part:

"Guaranty Trust itself does not have any deposits with Crown Trust or own any of its securities. It does, however, have estate, trust and agency accounts which have Crown Trust deposits and securities. Crown Trust short-term time deposits of 30 days to 180 days, although bearing a specific term, have always been treated as callable on demand and, on request, have been redeemed by Crown Trust prior to maturity.

"Increasing media speculation regarding the affairs of Crown Trust, Greymac and Seaway led our investment department to consult with, and at the request of an investment adviser to an estate, to ask for early redemption of a large 38-day time deposit due January 14, 1983.

"As was customary, our investment department telephoned this request to Crown Trust, but was advised subsequently that their short-term paper was no longer callable on demand and therefore would not agree to early redemption.

"In every respect, this matter was carried out in the routine course of trust company operations on behalf of customers, without any involvement of or the knowledge of the chief executive officer of Guaranty Trust, who maintains strict and complete confidentiality."

Mr. Speaker, I have just been handed a note this moment from the Ontario Securities Commission, indicating that it is issuing a news release now, announcing that it has made inquiries about Guaranty Trust and the trust companies association and is satisfied that they did not make use of insider information.

EMPLOYMENT AGENCIES

Mr. Wrye: Mr. Speaker, I have a question for the Minister of Labour. It concerns the discussion paper which was released by his ministry last month on the subject of employment agencies and discrimination.

At the time of its release, some quite properly demonstrated the absurdity of one of the report's proposed remedial measures to detect discrimination. I am referring, as the minister well knows, to a method of keeping records to identify minority applicants which is described on page 22 of this report. This method would have employment agencies and perhaps at some stage even government officials clearly violating the law in order, theoretically, to uphold that very law.

Will the minister now completely rule out this method as even a possibility for consideration? As reported in one press account, why has the minister not simply decided to use the option of charging agencies under the existing laws or of moving to remove their licences where they are violating the code?

3:30 p.m.

Hon. Mr. Ramsay: Mr. Speaker, the document in question is exactly what it is called -- a discussion paper. It is nothing more than that. Obviously it has already provoked some discussion and comment. We hope it will provoke considerably more and that we will be able to look at it in the total context once all the representations have been made on that paper.

Mr. Wrye: Does the minister not understand that by not now ruling out this possibility of violating the law in order to uphold the law, he continues to raise the possibility for some that this is exactly how the ministry will proceed? It will focus the entire attention of the public on this discussion paper and on those who wish to respond to it on this very issue, which may indeed be a smokescreen.

Why does the minister not rule out any possibility of moving on this option so that people can look at the rest of the paper clearly and decide what other options ought to be followed? Why does he not just stand up and remove it now?

Hon. Mr. Ramsay: I will be pleased to take that suggestion under consideration.

ASSISTANCE TO FARMERS

Mr. Swart: Mr. Speaker, in the absence of the Minister of Agriculture and Food (Mr. Timbrell) I would like to ask the Premier a question. I am sure the Premier recognizes the serious and worsening financial plight of the farmers in this province.

As indicated by the figures released by the Department of Consumer and Corporate Affairs yesterday, farm bankruptcies are 58 per cent higher than in 1981. Forty-three per cent of all bankruptcies of farmers took place in Ontario although we only have 25 per cent of the census farms. Will the Premier recognize that this disproportionate share of bankruptcies occurring in Ontario is due to the inadequacy of the government's farm policies, specifically under the Ontario farm adjustment assistance program?

The minister pledged $60 million to go to those farmers and has only paid out $16 million as of now. Unless there is a change in the eligibility criteria, it will not pay more than $20 million at the most by the end of the fiscal year. Will the Premier give a commitment to this House as head of the government that, either by changing OFAAP or by some other program, all of the $60 million will be used in this fiscal year to assist those farmers who are in real need?

Hon. Mr. Davis: Mr. Speaker, I --

Mr. Stokes: Yes.

Hon. Mr. Davis: Who said that?

Mr. Laughren: Nobody; answer the question.

Mr. Swart: That was you.

Mr. Speaker: Order.

Hon. Mr. Davis: Mr. Speaker, in answer to the first part of the question, yes, I am aware of the concerns in the farm community. The member also asked whether this government was concerned with respect to the financial position of a number of farmers; the answer to that is yes.

As the member has pointed out, we have programs we think have assisted in a substantial way a number of the farmers in this province. Of course those programs are ongoing. I cannot say to the honourable member whether the total of $60 million, which is part of that program, will be entirely used by the end of the fiscal year or not. I cannot answer that question except to say this government has always recognized the needs of the farm community. We have always supported them and we will continue to do so.

Mr. Swart: Surely the Premier must recognize that in spite of the lower interest rates, because of the fall in farm prices, farmers are in worse condition now than they have been for many decades. Would he specifically answer whether he is willing to use the full clout of his office with the banks and the federal government to bring about refinancing of all fixed-term farm loans which are substantially above the present current interest rates? In these cases the banks should take some of the load and responsibility in these times.

Also because of the dramatic drop in farm commodity prices, will he discuss the matter with his Minister of Agriculture and Food and arrive at a program whereby substantially advanced provincial income stabilization payments on the 1982 crops will be made? These payments otherwise will not be paid until the fall of this year.

Hon. Mr. Davis: Mr. Speaker, the supplementary on my count contained roughly four questions, and I will not endeavour to answer all four. The last one is freshest in my mind. Will I consult with the Minister of Agriculture and Food related to that question? The answer to that part is yes.

Mr. McKessock: Mr. Speaker, is the Premier aware that other provinces in Canada are supporting their farmers considerably more than Ontario is -- all farmers in general but particularly the beef farmers? Is he aware that some of the provinces are assisting the Farm Credit Corp. by giving interest assistance to those farmers who have farm credit mortgages to reduce the mortgage to eight per cent for the first five years and 12 per cent for the following five years? Would he consider doing that for Ontario farmers to see that they have the same competitive opportunities as farmers in other provinces?

Hon. Mr. Davis: Mr. Speaker, I am aware of the policies in some of our sister provinces. This has been discussed in this House on many occasions. The member always equates those policies, with respect to the other fiscal policies of those governments, with other programs or tax levels that impact upon the farm community. If he would sort all of that out, he would find our policies here are not really that dissimilar to those of some of our sister provinces.

I think the second part of the one question was, would we consider doing something similar to what is done by some of our sister provinces. We have never been reluctant to reassess any of our programs or to find ways and means of improving them. That does not mean they necessarily would be the same as our sister provinces, because they may not suit the needs of the people of this province.

Mr. Conway: Ultimate Davis equivocation.

Mr. Speaker: Order.

INVESTIGATION OF TRUST COMPANIES

Hon. G. W. Taylor: Mr. Speaker, in answer to a question from the member for Riverdale (Mr. Renwick) on January 18, the Ontario Provincial Police anti-rackets branch is conducting an investigation that covers the purchase of Cadillac Fairview properties and therefore includes Crown Trust, Seaway Trust and Greymac Trust.

Detective Inspector J. E. Szarka and Inspector R. W. Smith are directing the investigation. They are being assisted by members of the Royal Canadian Mounted Police, commercial crime section, Toronto, and investigators from the Ministry of Consumer and Commercial Relations. Legal advice and assistance is being provided to the Ontario Provincial Police by John Takach, QC, acting as the Assistant Deputy Attorney General, criminal law division, and Howard Morton, QC, director of the crown law office, criminal, of the Ministry of the Attorney General.

The investigation commenced December 6, 1982, after consultation both in November and early December involving the Ministry of Consumer and Commercial Relations, the criminal law division of the Ministry of the Attorney General, and the Ontario Provincial Police.

I realize I have not provided all of the specifics required by the honourable member but I am not able to comment further at this time on the specifics of the investigation.

Mr. Renwick: Mr. Speaker, perhaps the minister might respond to one supplementary question. He was reported this morning in the Globe and Mail to have indicated that Kilderkin Investments was not a part of that investigation. Yet his statement today spoke about an investigation of the transaction respecting Cadillac Fairview apartments. Does the investigation net extend more broadly than simply over the three trust companies about which I asked him earlier this week?

Hon. G. W. Taylor: I prefer not to comment on the matter any further than I have. I am under the same difficulty as that of my colleague the Minister of Consumer and Commercial Relations (Mr. Elgie) since there are ongoing investigations. There are people being asked questions under oath and it presents some difficulty for me to comment any more than I have done. I hope the honourable colleague will bear with us at this time on my reply to the question as he has presented it.

3:40 p.m.

SUPERVISION OF VISA SCHOOLS

Mr. Bradley: Mr. Speaker, my question is to the Minister of Education. As the minister is aware, two more private schools in Toronto -- and I am referring to those that cater for the most part to people from the Caribbean and from Asia -- have gone out of business. That makes four since last fall that have gone out of business.

I recognize I could ask the question as easily to the Minister of Consumer and Commercial Relations (Mr. Elgie), but can this minister report to the House what kind of supervision takes place in these schools? I recognize they are private schools, but in order to grant high school certificates they must have inspections from her ministry.

What kind of supervision takes place in these schools, most specifically in regard to the financial viability of these schools and their business practices?

Hon. Miss Stephenson: Mr. Speaker, it is my understanding that as a part of the requirement for the issuance of -- I do not suppose it is called a licence -- some kind of permission to establish a private business, which is what these schools are, there is an examination of the capability of the principals to manage. There is also a determination of the financial background.

The Ministry of Education is not involved in that kind of examination. Our responsibility relates to continuing supervision of the curriculum and the delivery of the education program. If the honourable member is asking whether I can give him a history of careful examination of all of these schools within the past year I can provide him with that within a day or so because we have it documented.

Mr. Bradley: In view of the fact that we have had these recent experiences, will the minister give an undertaking to the House that an investigation will be conducted into the financial viability of all of these -- for want of a better word -- visa schools that exist in Ontario? The investigation should determine whether or not they have the necessary financial backing to continue to operate on a proper basis -- bonding, for instance, or some way to ensure there is sufficient backing.

People who are lured to Canada through the advertisements that appear in newspapers and other places in Asia and the Caribbean might then feel they are going to get their money's worth. Also she would know that Ontario is operating in good conscience a business that is respectable in all ways.

Hon. Miss Stephenson: I can certainly attempt to determine the requirements that are laid down for the establishment of such schools. Since the responsibility for carrying out such an investigation would belong to my colleague the Minister of Consumer and Commercial Relations, I shall speak to him about that. We do not have the capability for that kind of examination.

But I object just slightly to the honourable member's use of the word "lured." Indeed, the advertisements that may appear in certain foreign newspapers are no more alluring than those that are published by various other private schools in various other jurisdictions. Also there are several public school boards that have made such advertisements available in foreign newspapers. I do not think they have been either alluring or lurid, but they have ensured that the students who have arrived to attend those schools have received an excellent education program.

I would also like the member to understand, and for the information of the House, that the other members of the group of organizations that provide this kind of education have until this point banded together to ensure that the students' education program is not interrupted by the demise of one or more of the private visa schools. I think they are continuing to do so. Those students have been absorbed into other similar schools for the most part, and their education program is continuing at no additional cost to them.

PETITION

ANNUAL REPORT, REGISTRAR OF LOAN AND TRUST CORPORATIONS, 1979

Mr. Renwick: Mr. Speaker, I have a petition signed by 20 members of the opposition parties, pursuant to standing order 33, to refer to the standing committee on the administration of justice the statutory annual report of the registrar of loan and trust corporations for the year 1979 to the Minister of Consumer and Commercial Relations (Mr. Elgie), being the latest such report presented to and laid before the House. This would be for committee consideration of the practices and state of affairs within each of Crown Trust Co., Greymac Trust Co., Seaway Trust Co., Greymac Mortgage Corp. and Seaway Mortgage Corp., that are or may be prejudicial to the public interest or to the interests of the depositors, other creditors or others having trust, contractual or business relations with such corporations. This would include without limitation the circumstances surrounding the involvement of each of such corporations in any or all of the transactions relating to the Cadillac Fairview apartments.

Mr. Speaker: I would like to take that under advisement and report back to the House later. I am not sure whether it falls within the standing orders.

Mr. Renwick: Mr. Speaker, if that one does not fall within the standing orders of the House I would be extremely surprised.

Mr. Speaker: We may all be extremely surprised.

Mr. Peterson: Mr. Speaker, there may be a simpler way to resolve it. Rather than tax you and your very well trained and efficient officials in drafting a response, you may just want to agree to unanimous consent now, sir, to avoid all that difficulty and we can proceed with dispatch.

Therefore, I would ask you, sir, to ask the government House leader for unanimous consent to proceed with the very fine petition presented by my friend from Riverdale.

Hon. Mr. Wells: I think it would be a good exercise to have the Speaker of this House exercise his judgement in the matter and we can see what he has to say.

Mr. Renwick: Perhaps, before you were to presume to come to any adverse decision with respect to that matter, we would have an opportunity to present our views with respect to it?

Mr. Speaker: I am not sure whether or not I need the exercise, but I do not have the list in front of me and I would like to consult the appropriate list to see if the request for the petition as presented by the member for Riverdale does indeed fall within the standing orders.

Mr. Renwick: Perhaps, Mr. Speaker, I can comment about that. I have examined the list, sir, and the list is not an accurate list.

Mr. Speaker: I am very pleased to hear that but I do not have a copy with me. I shall reserve judgement.

Mr. McClellan: Perhaps I may just make a comment with respect to this point, sir. I think it would be helpful if, at the same time you are looking at the list, you would look closely at the language of the standing order. It has a subordinate clause that empowers you to consider a statutory report that has been laid before the House by a minister, whether or not that report is on the list. So you have two pieces of evidence to study before you render your decision.

Mr. Peterson: On the same point, if I may. I know that in your deliberations you will be spending the majority of your evening delving into this question. I agree with my friends from Riverdale and Bellwoods, but in addition there is precedent for this point. I would respectfully submit, if you check your precedent book, the original inquiry into the Re-Mor matter was by a referral under the same standing order of the report of the Ministry of Consumer and Commercial Relations.

If you hesitate on the point of the member for Riverdale because you have a different judgement, the report of the registrar is a statutory report and should be able to be referred under the rules of this House. I say that to assist you in your deliberations.

Mr. Speaker: I shall give this matter my very serious consideration and report back as quickly as I can.

REPORT

STANDING COMMITTEE ON REGULATIONS AND OTHER STATUTORY INSTRUMENTS

Mr. Eves from the standing committee on regulations and other statutory instruments presented the following report and moved its adoption:

Your committee begs to report the following bills without amendment:

Bill Pr27, An Act respecting the City of Ottawa;

Bill Pr42, An Act respecting the Corporation of the City of Pembroke.

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

Bill Pr48, An Act to revive Glanworth Investments Ltd.;

Bill Pr51, An Act to revive Beth Sholom Synagogue.

Your committee would recommend that the fees, less the actual costs of printing, be remitted on Bill Pr51, An Act to revive Beth Sholom Synagogue.

Motion agreed to.

MOTION

COMMITTEE SITTING

Hon. Mr. Wells moved that the standing committee on resources development be authorized to sit Monday evening, January 24.

Motion agreed to.

ORDERS OF THE DAY

PRIVATE MEMBERS' PUBLIC BUSINESS

ONTARIO HYDRO

Mr. J. A. Reed: Mr. Speaker. before proceeding with the motion at hand I rise on a point of personal privilege to point out to the House that the spelling of the name of the author of the ballot item in the Order Paper is different from that in the business for Thursday and to advise the House that they represent the same person.

Mr. Speaker: There was never any doubt.

Mr. J. A. Reed moved, seconded by Mr. Kerrio, resolution 40:

That in order that Ontario Hydro be made accountable to the people of Ontario, in the opinion of this House the government should:

(1) Immediately introduce legislation requiring the Minister of Energy on behalf of the government to issue on or before the first day of July 1983 a comprehensive policy directive setting out the policy framework in respect of the production, generation, transmission, distribution, supply, sale, use and development of energy resources in Ontario within which Ontario Hydro must operate.

The policy directive and any amendments shall be tabled in the Legislature and shall contain: (a) a statement of the respective duties and functions of the government of Ontario and Ontario Hydro in relation to energy matters; (b) a specification of the policy objectives of the government of Ontario in relation to energy matters; (c) a specification of the financial objectives of Ontario Hydro; (d) a specification of the limitations that may be imposed upon the operations of Ontario Hydro by the government of Ontario and the conditions under which these limitations may be imposed; and (e) a description of the future operations to be conducted by Ontario Hydro in order to fulfil its responsibilities and assist in achieving the policy objectives established by the government of Ontario, including an estimate of the extent to which these operations will require financial assistance from the government of Ontario. And:

(2) Immediately appoint a committee of the Legislature to review Ontario Hydro's proposed system expansion program, its performance in relation to the above-mentioned policy framework and such other matters as the committee may consider relevant for its purposes.

Mr. Speaker: Before proceeding I would like to remind the honourable member that he has up to 20 minutes for his presentation and may reserve any portion of that time for his windup.

Mr. J. A. Reed: Mr. Speaker, I would like to reserve about five minutes for a windup at the end of this debate.

The thrust of this idea has been presented to this Legislature before. It has been the policy of my party that a committee of the Legislature, either a select committee or a standing committee, be reconvened so that we may address the objectives as outlined in this resolution so those things are clear.

I think the debate should take on a new light as we discuss the need for the adoption of this resolution. I am not a financial expert, and would not pretend to be. Neither are most of the people who pay electric power bills in Ontario. However, I think it is worth while for all of us to spend a few minutes so that we may understand the financial situation that Ontario Hydro is now encumbering the people of Ontario with, and the direction the utility is headed.

The thing boils down to what is called, in the financial world, the debt ratio. The debt ratio is something that is not fully understood. To oversimplify it, it is the percentage of the total capital investment that is still debt, compared with the amount of capital investment that is actually owned. Ontario Hydro's debt ratio -- or, as it is usually called, debt-equity ratio -- is 84 per cent. It has slipped to that abysmal point.

In talking with some business people who are expert in the field of company solvency, I learned that a debt ratio of 40 per cent would be considered responsible and one of 50 per cent should precipitate some action to correct it and return it to the 40 per cent level. But Ontario Hydro's debt ratio, I repeat, is now 84 per cent and slipping daily. What that means is that the difference between the responsible operation of a corporation and the 84 per cent is representative of unpaid debts owed by Ontario Hydro. There is only one place the utility can collect that unpaid money and that is from the electric power consumers in Ontario.

I suggest that since the time of the presentation of the last private member's bill in 1979, we have moved to an oversupply of electric power potential in Ontario of 49 per cent. We are doing it primarily with the cost of building the Darlington nuclear plant. At the same time, we know that while Ontario has never espoused the policy of the export of electric power, Ontario Hydro now is desperately searching for electric power customers outside the province.

We know, as well, that Ontario Hydro has found it very difficult to compete with other utilities. I would put on record the experience with the proposed sale of electric power to General Public Utilities in the United States and GPU's turndown of Ontario Hydro because it found a more competitive utility, namely, Detroit Edison, inside the US.

4 p.m.

It is particularly embarrassing that we should have an 84 per cent debt ratio when fully one third of our electric power potential is virtually paid for -- written off that is the hydraulic system, most of which was put in place many years ago.

Mr. McKessock: I will bet the plant of the member for Halton-Burlington is paid off too.

Mr. .J. A. Reed: As a matter of fact, it is.

As I say, it is particularly embarrassing that one third of the power system is essentially paid for and yet we have an 84 per cent debt ratio. It is difficult to contemplate how we are going to extricate ourselves from this problem, but let us point out that this 84 per cent debt ratio represents 50 per cent of Ontario's borrowings. If there ever was a constraint on Ontario's ability to recover financially and become prosperous once again, much of that constraint lies with the bondage it has been placed in by this utility's debt ratio.

I can only say the direction it is headed in is a worsening of this situation. Yet we are asked to accept the waste, the cost overruns and the failure of Ontario Hydro's management forces to control this galloping empire. We are asked to accept the overbuilding. We are asked to accept the cost overruns in all the recent projects.

We are also asked to accept the fact that the Minister of Energy (Mr. Welch) is not responsible for Ontario Hydro. We were treated to a memorandum of understanding that was five years in the making and was tabled on December 22, the day after the Legislature closed. It had to be so embarrassing to the government of Ontario that it signed the agreement on November 8 and would not table it until December 22, and an embarrassment it is. I am almost embarrassed for the government.

My colleague the member for Niagara Falls (Mr. Kerrio) is going to have more to say about the memorandum of understanding, but I want to give the salient line in this memorandum. It says, "The minister is not responsible, however, for the control and direction of the business and affairs of Ontario Hydro."

The minister is not responsible. We are asked to accept all these cost overruns. We are asked to accept the take-or-pay oil contract, which the minister has never been allowed to see. He has never even seen it, and yet it has cost the taxpayers of this province some $33 million or $35 million for heavy oil not used. It is take-or-pay. We are bears for punishment.

The only control that exists in terms of Ontario Hydro lies with the Treasurer (Mr. F. S. Miller), whose predecessor was the only person on the government side who ever tried to exert any control over Ontario Hydro. At that time, he imposed a $6-billion cut in Hydro's massive expansion program. The members will remember, reading the press of the day, that Ontario Hydro then held a press conference and said, "We are going to have brownouts and blackouts in Ontario." What absolute nonsense. Today we have an oversupply of 49 per cent. The only justification that has ever been given for the 49 per cent is that it is better to have too much than too little. From here on in, we are going to pay dearly for those excesses.

In opposition, we proposed a constructive alternative to this dilemma. The constructive alternative consists of simply legislating the Ministry of Energy, through the Energy Act, to produce an energy policy that will provide a framework within which Ontario Hydro can operate. The same legislation would contain an amendment to the Power Corporation Act to force the utility to accept it. It sounds oversimplified, and perhaps it is, but it seems to me that kind of thrust would make the Minister of Energy, for the first time in history, answerable to the people of Ontario, in the Legislature, for Ontario Hydro.

We also proposed the creation of a committee of this Legislature to examine Ontario Hydro. Indeed, the prospect has been considered, not unfavourably, by the Minister of Energy and by the Premier (Mr. Davis). We did have a select committee on Ontario Hydro affairs that made a profound impact on the utility. In spite of the time and effort it took on the part of its members, I believe it turned out to be a very positive force. It disappeared with the realities of March 19, 1981, but we believe it still has a very important role to play. It seems to us that the taxpayers and electric power consumers of Ontario deserve no less.

These are constructive suggestions we have made to the government. We feel implicitly that they are more important, more current and more valid this afternoon than they were in the spring of 1979, when we introduced the act respecting the public accountability of Ontario Hydro.

We have no place to go but up. We are at the bottom. How far can the utility be allowed to slip? Can it be allowed to slip into total bankruptcy? Can it be allowed to go right down to the bottom? Can we continue to justify the overexpansion of the system with short-term, highly capital-intensive projects that seem to double or treble in price by the time they come on stream? Is that the kind of economic renewal we need and want in Ontario?

I suggest it is sheer madness. We have gone from a Darlington nuclear plant booked in at $5 billion, to a currently projected completion figure of $11 billion. I dare say it does not take a very hazy crystal ball to predict that when the project is completed, we are going to have an idle plant that will have cost in the neighbourhood of $16 billion or $17 billion, which is about the equivalent of the whole capital investment of Ontario Hydro at present.

I do not know how these things can be tolerated any longer. Everything Hydro is doing now is affecting Ontario directly in terms of its borrowing. We are in a box, and we have to get out of it. The only way we can get out of it is by a responsible change in the way we operate Ontario Hydro.

I know I am going to be accused of wanting to take over the day-to-day operations of the utility. That was thrown at me in 1979. They said. "All you want to do is have political control." That is not the case.

Let us make it clear that what Ontario Hydro needs, expects and deserves is a policy framework within which to work and to understand its role. Executives of Ontario Hydro should not have to be thrown into the political fray as happens on a continuing basis at present. They should continue to do what they do best, and that is generating electricity. To do that, they will have to have, for the first time, a clear understanding of where they are now and where they are headed. The Minister of Energy, for the first time, should become the person responsible to the people of Ontario for that great utility.

4:10 p.m.

Mr. Foulds: Mr. Speaker, I wonder whether I can have unanimous consent to have a cup of coffee brought in to me to lubricate my throat because I have a cold. I am quite serious.

lnterjections.

The Acting Speaker (Mr. Cousens): No. There is water available.

Mr. Foulds: Thanks a lot.

Mr. J. A. Reed: Can we not have unanimous consent so the member can speak? He is obviously having trouble with his throat this afternoon.

Mr. Williams: Water does it better than coffee.

Mr. Foulds: Mr. Speaker, I rise in support of the honourable member's resolution, I think, if I can get through some of the initial wording which gave me a little difficulty.

The resolution gives us a perfect opportunity to talk about political leadership, the will to govern and the direction of this province. When it comes to Ontario Hydro, this Conservative government has no leadership or direction and no will to govern. Ontario Hydro has taken advantage of the situation, but it is not Ontario Hydro's fault. The fault lies with the government's failure to accept its responsibility. It lacks the will to govern and actively avoids accepting responsibility for Hydro.

Ontario Hydro is one of the largest corporations in Canada. Who controls it? It would appear nobody. The Conservative government theoretically thinks that, like all capitalist enterprises, and it considers Hydro a capitalist enterprise, it should control itself.

Therefore, there has always been an enormous ambivalence in the Conservative government's attitude towards Hydro. It has a laissez-faire attitude, on the one hand, when it suits it, and, on the other, proposes active direction and intervention in Hydro's affairs; for example, the Board of Industrial Leadership and Development document in the last election when that suited the government's purposes.

The government, and in particular the government of the present Premier, has always played games about its relationship with Hydro.

The Liberal theory is that Hydro should be broken up, dismantled and turned over to private enterprise. That is what I hear coming from their benches, particularly from the current Energy critic --

Mr. J. A. Reed: On a point of order, Mr. Speaker: The accusation made by the honourable member is probably worthy of debate, but that theory certainly has not come from these benches.

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

Mr. Foulds: I certainly thought I heard that said during the debate on the estimates of the Ministry of Energy by the current Energy critic for that party. However, I will be glad to be corrected during the course of this debate.

Finally, I want to say that this party believes the government should control Hydro, guide it and use it for the benefit of the people of Ontario. Ontario Hydro must be truly responsible and accountable, but that will only happen when there is a government with the will to do it.

In the past couple of days, there have been two momentous happenings regarding Hydro. First, there has been the resignation of Hugh Macaulay, the present chairman, before his term was up; I will withhold comment on that for the time being. Second, the memorandum of understanding between the government of Ontario and Ontario Hydro finally has been made public.

This memorandum of understanding, which has been laboured over officially in excess of three years and I suspect somewhere between five and seven years, turns out to be an enormous disappointment. After five years of labour, Hydro and the government have produced a mouse. Maybe that is what is wrong with their long-range planning. After years of dithering and delay, the memorandum of understanding is dated, as has been said, November 8, 1982, but was not tabled until December 22, 1982.

The memorandum confirms two of our suspicions. First, this government has abdicated powers that it should have over Ontario Hydro. For example, it is clear, in my view, that the government should have control over the establishment of hydro rates. It should be clear in legislation that both the Ontario Energy Board and the cabinet have the right to roll back Ontario Hydro rates. That is the one absolutely essential amendment to the Power Corporation Act that should be passed this session.

Second, the memorandum proves the government does not use its present powers, especially the power to disallow new borrowing. Almost a decade ago, Darcy McKeough had the courage or the bluster to bring Hydro into line by using the power of the Treasurer to disallow new borrowing, thereby putting a cap on Hydro's expansion program. Lest we praise Mr. McKeough too much, he did not move to control the setting of rates. Since that time, even his kind of political leadership has been lacking.

A former Minister of Energy -- who I regret to say is not present in the House today -- the member for Prince Edward-Lennox (Mr. J. A. Taylor) said candidly and floridly that he "had walked the so-called corridors of power only to be mugged in the back alleys of bureaucracy." Frankly, I believe he got mugged in the back rooms of Tory democracy; and the Conservative government treats democracy like a smoke-filled back room.

The real problem here is that there are three ministers to which Hydro has some relationship: the Minister of Energy, the Treasurer and the Premier. The trouble is that the least important of these is the Minister of Energy; that is where the problem lies. Neither the Treasurer nor the Premier is willing to give up his long-standing and chummy relationship with Hydro.

Article 8(3) of the memorandum of understanding enforces this point. It also reinforces the point that the present Minister of Energy has not been able to wrest the power from the Treasurer or the Premier.

The basic problem is the Premier has 51 per cent of the votes in cabinet, or 51 per cent of the votes or more on the Hydro board. When all is said and done, the Premier makes the final decisions about Hydro: whom he appoints as chairman and whether an unnecessary nuclear station like Darlington is proceeded with.

The problem here is that the Premier is not influenced by common sense and economic vision. He is influenced by his obsession with technological toys such as nuclear power stations, with the subsequent effect that those nuclear power stations suck out of the economy capital that could be better put to use in creating jobs in other manufacturing sectors and in diversifying industry in northern Ontario.

It is my contention, therefore, that it is the Premier and the Treasurer who are mugging, and will continue to mug, the Minister of Energy in the corridors of power. This clearly emerges from an analysis of the minister's attempt to establish a comprehensive policy framework within which Hydro must operate.

Inadequate though it was, in September 1979, the Minister of Energy released a paper called Energy Security for the Eighties, which challenged the traditional policies of Ontario Hydro. For example:

(a) There were to be no more nuclear commitments through to 1995. However, by 1981, Hydro and the Premier, or somebody, had somehow bullied their way into a policy of building new nuclear plants for exporting power to the United States. Only lack of demand for electricity in the United States controls this uneconomic and silly proposal. Whether the minister was bullied by Hydro or the Premier, the Treasurer or Hugh Sega! and the same people who got us 25 per cent of Suncor is, of course, up to the minister to reveal.

(b) Energy Security for the Eighties decided that the development of small-scale hydraulic plants should be pursued. However, despite verbal support for this, Hydro has curtailed these developments so much that this is no longer a serious element in government policy.

What has been the result of not sticking to these two original policies? The Minister of Energy has become a patsy for Hydro, the Premier and the Treasurer -- so much so that government spokesmen, including the Minister of Energy and even the Deputy Minister of Energy, who should know better, now have become among the more ardent advocates of nuclear power and, therefore, betrayers of the document titled Energy Security for the Eighties.

The Acting Speaker: One minute.

Mr. Foulds: Finally, the real problem is not the inadequate memorandum or the lack of a comprehensive policy framework. These are mere shortcomings and mere symptoms of the problem. I suggest that four steps could be taken that would bring Hydro under democratic control.

1. It must be clear that power to control Hydro is vested in the Minister of Energy. His veto power over Hydro's capital programs, operational budget and setting of rates must be paramount.

2. We must establish a permanent committee of this Legislature to consider Hydro and other energy matters. Such a committee must have the right to independent counsel and staff.

3. Hydro's expansion plans must be subjected to a technical review by the Ontario Energy Board, such as that which took place in 1974, every two years.

4:20 p.m.

The Acting Speaker: The member has exhausted his time.

Mr. Foulds: Finally -- there is only one sentence left, Mr. Speaker --

The Acting Speaker: I thank the member. It is not fair to all other members when there is an agreed-upon time. I now call upon the next honourable member to participate in this debate.

Mr. Williams: Mr. Speaker, I appreciate the opportunity to speak to the extremely important resolution that is before the House this afternoon. I point out that the resolution actually is asking for two things. First, it is asking for a policy directive from the government to be issued by July 1, 1983.

The fact of the matter is that a policy directive already has been issued by the government and the request is redundant. We find that policy directive clearly spelled out in the memorandum of understanding tabled in this Legislature before the Christmas recess -- in fact, six and a half months ahead of the time the Liberal Party wanted to see such a directive issued. Clearly the Liberal Party is very much asleep at the switch.

What does this policy directive do? Clearly it speaks to all of the issues detailed in the resolution put forward by the member for Halton-Burlington. It clarifies the objectives and priorities of Ontario Hydro, and it sets out the operating relationships between the agency and the minister that the member for Halton-Burlington has been looking for for so long. We knew what they were, but he obviously had to have them spelled out, and they are clearly spelled out in this memorandum of understanding.

The memorandum of understanding also deals with the responsibilities of the Hydro board in a very clear and concise manner so that there can be no misunderstanding as to what those responsibilities are. In turn, article 4 on page 6 sets out the responsibilities of the minister so that his responsibilities are clearly defined within the memorandum of understanding.

There can be no misunderstanding as to any duplication or overlapping of responsibilities. It is very clear from the memorandum that the two work hand in glove, the one responsible for setting policy and the other responsible for the actual operations of the hydro utility.

What is set out on page 7 is really the nub of the memorandum of understanding, because what it says on that page with regard to government policy is, "The minister recognizes that government energy-related policy has an important impact on the decisions of the Hydro board and on the business and affairs of Ontario Hydro and agrees to keep the Hydro board informed as to government energy-related policy affecting Ontario Hydro." In turn, it clearly sets out in item 5.2, "The Hydro board agrees to carry out its responsibilities in harmony with government policy." How much clearer can it be?

Further, I point out with regard to auditing and reporting, which the sponsor of this resolution dwelt on for such a considerable period of time in the first part of his remarks, that he has only to turn to page 14 of the memorandum of understanding and there he will find, again clearly set out, what the responsibilities of Hydro are with regard to accounting in the financial field. There it clearly states in article 9:

"Under the Power Corporation Act, after the close of each fiscal year Ontario Hydro is required to file with the minister an annual report on the affairs of Ontario Hydro, which the minister is required to submit to the Lieutenant Governor in Council and then lay before the Legislature."

How much more open and above board can you be so that the people of Ontario know clearly what the financial integrity of Ontario Hydro is?

The second point is this. The honourable member's resolution asks for a policy directive because, he implies in his resolution, Hydro has to be accountable to the people of Ontario. Let us find out what some of the people in Ontario are saying about the accountability of Ontario Hydro.

Let us first of all turn to the prestigious organization with national stature known as the Science Council of Canada, of which I am sure the member is aware, given the fact that his former leader decided to retire to that august body. What do they say? "Ontario Hydro can legitimately claim to place greater emphasis on assessment than any other corporation of similar size and allows for greater public input than any other Canadian company." Interesting.

Let us take another quote from a very objective man who is well known in public places in Ontario, one Donald MacDonald, who used to be the chairman of the select committee on Ontario Hydro affairs. In the Toronto Star on January 7, 1981, he was quoted as saying that he "never doubted that it," Ontario Hydro," was the best-run utility in the world." Need I say more as to what the public is saying about the accountability of Hydro?

Let us back up those views taken by objective individuals who are well known and respected in the community for their public utterances. What about the facts? In a formal sense, we know well that the capital borrowings of Ontario Hydro, the power contracts, the property acquisitions and the construction programs all have to receive the approval of the Ontario government.

Let us turn to the question of how Ontario Hydro has been accountable in the informal sense. First, let us point out what has been happening since the 1970s as far as the accountability of Ontario Hydro is concerned.

Ontario Hydro has been involved in numerous public hearings, beginning with Task Force Hydro back in the early 1970s which was established by the government to review the structure of the former Hydro-Electric Power Commission of Ontario. The province accepted virtually every recommendation of that report.

More recently, in 1974, the Ontario Energy Board started to deal on a yearly basis with Hydro rate proposals and had to scrutinize each and every one of them before Hydro could get approval for the rate setting for each year. During that time, Hydro's financial policies and systems expansion were considered by the Ontario Energy Board.

Principles for electric costing and pricing from 1977 to 1979 were also considered by the OEB, all during an eight-year period when a sum of money in the area of almost $6 million -- $5.9 million -- was spent on hearings from 1974 to 1981 to ensure that an objective, independent body assessed the financial viability of Ontario Hydro.

The member for Halton-Burlington seemed to take these significant statistics in a rather blasé and indifferent fashion. I want to illustrate in a much more graphic fashion, with the assistance of some of the pages in the Legislature this afternoon, exactly the extent to which we have involved ourselves in the public hearing process.

Jeff Anderson, the page from Lambton, and Robbie Howells from Stormont-Dundas-Glengarry, along with Jeff Bangs from Parry Sound and Neil Keon from Ottawa South are going to lay before the Legislature this afternoon clear evidence of just how and to what extent -- and the member who sponsored this resolution will clearly understand the extent -- there has been careful, in-depth public scrutiny of Ontario Hydro.

I am placing before the Legislature, and in particular before the member who placed this resolution, boxes and boxes and reams and reams of transcripts of evidence and exhibits that have been before the select committee on Ontario Hydro affairs and other committees of this Legislature for an absolutely open-book approach by Ontario Hydro on all its operating activities, whether they had to do with rate structuring -- I see we are now up to nine boxes full of transcripts that clearly demonstrate what evidence was produced in the hearings -- nuclear safety; mining, milling and smelting, or the safety of nuclear waste and residue. That member will well remember how we sat for hours and hours hearing the open debate on these subjects.

Since 1974, more than $11.5 million has been spent on public hearings before select committees of this Legislature. I might point out, to emphasize the point even more, that since the beginning of the 1970s, Ontario Hydro has spent more than 612,000 hours, that is, 25,500 days, in preparation and attendance at the Ontario Energy Board, in the select committee and at other hearings. The costs to Hydro are estimated at $17,521,000.

4:30 p.m.

Mr. Kerrio: Mr. Speaker, if I did not know better, I would think the member for Oriole (Mr. Williams) was a paid apologist for the government of Ontario as well as Ontario Hydro.

Mr. Foulds: He is an unpaid apologist.

Mr. Kerrio: But now I agree with the member that he is an unpaid apologist. The fact that he brought all of those documents before us in the Legislature to prove a point only proves that the people of Ontario were well served by a minority government. That is the only reason those boxes are there and for no other reason.

We could not get into Ontario Hydro before minority government and I have to tell the members that that was one of the best times the people of Ontario ever had, as a citizen in Ontario could begin to look behind those closed doors. Such had not been the case before and I am afraid those doors are closing on us more and more as each day goes by. That is why there is a need for such a resolution as appears before us today.

Mr. Williams: On a point of order, Mr. Speaker: I would just point out to the member that all of the committees, select or standing, that dealt with these reports were all-party committees, so we have always had a good consensus from all sides of the House on these issues.

Mr. Kerrio: I never doubted that, but it has disappeared now with a majority government. Why doesn't that committee exist now, if such were the case?

The way I see Ontario Hydro and the resolution which is before us starts with Ontario Hydro having been put before the people as a company of trust, if you will. It seems like a parallel today that there are those people who were entrusted to look after the citizens and the investors of Ontario in trust companies and they have very badly let them down. It seems as though Ontario Hydro, in the initial instance, was put before the people of Ontario as something in trust to provide a service at a reasonable cost and to do that in the best interests of the people of Ontario.

I am sorry to say it has not continued that way. The fact of the matter is that as we talk of empires and empire-building, as the member for Rainy River (Mr. T. P. Reid) has spoken to, I would say Ontario Hydro epitomizes empire building in its very extreme. They were given a mandate that is answerable to only the chairman and board of directors of Ontario Hydro. It goes no further. It is not answerable. This memorandum that is before us does not change one iota the chairman's role and the board of directors of Ontario Hydro in having total control over Ontario Hydro.

The thing this bill would attempt to do has nothing to do with taking over Ontario Hydro, but in a more reasonable way having Ontario Hydro fit into the new order of things as it would relate to a modern government that would have an energy policy which would have some meaning to the people of Ontario.

Hydro itself has been excluded from very many meaningful things which would indicate that it does not compete on the same basis as even other areas and other ministries. For instance, Ontario Hydro did not have to suffer with what one might call environment in the environmental hearings in many instances. They were excluded from province-wide bargaining that industry accepted and thought was in the best interests of the worker, the construction companies and the people in that business.

The fact of the matter is that Ontario Hydro does not have to answer to the Ontario Energy Board. Ontario Hydro goes through the farce of appearing before the Ontario Energy Board, like other people who have energy to sell, but it does not have to live up to any kind of commitment or any kind of determination by the Ontario Energy Board.

I say they should save the time and the embarrassment of going, because they are not even obliged to give all of the documents that the Ontario Energy Board asked for at those hearings. The member for Oriole knows that and it has been one of those things we feel should be part of the responsibility of Ontario Hydro through the Minister of Energy.

The thing I wanted to talk about more specifically has to do with the contradictions that exist within Ontario Hydro that should not even be within its purview. It has to do with the things that are in direct contradiction to Ontario Hydro's overbuilding and attempting to sell more power. I would mention the fact that renewable energies, conservation, those things that have to do with public relations and reviewing its own capital programs, should not be left to Ontario Hydro's determination.

How, in all conscience, can we expect someone who is attempting to sell power to be in the conservation business? How can we expect someone who wants to sell electricity to be interested in alternative energy? Those are the sorts of things we feel should be taken from Ontario Hydro. Given its responsibility through a meaningful direction from the Minister of Energy, that does not necessarily mean Ontario Hydro is going to be governed in any way by the Minister of Energy. Over the years, Ontario Hydro has taken a position it was never intended to have.

I will explain that by quoting from an interview with Mr. Hugh Macaulay. No doubt his replacement will feel the same way, because I imagine it is government policy. The question to Mr. Macaulay was: "Hydro appears to be a major instrument in the government's determination to stimulate the provincial economy. Can you comment on this?" Mr. Macaulay's answer was: "The Ontario government has called Hydro's power system a cornerstone of the provincial economy and said that continued vitality and development of that system is essential to sustaining Ontario's economic growth. That kind of thinking, coupled with a new awareness of the value of indigenous energy resources and the need to end our dependence on fossil fuels, has resulted in new approaches to planning at Ontario Hydro."

This is the part I am concerned about: "Instead of working merely to meet anticipated demand, we are now looking at a wider role for Ontario Hydro and considering the effects our large construction projects, our exports" -- I emphasize the word "exports" -- "our rates and, in fact, all our activities can have on the social, environmental and economic life of the province."

When it was first brought on stream, with Niagara's hydraulic project being the prime source at the time, I do not think it was ever envisioned that Ontario Hydro was to be given the latitude it has taken on itself through this huge bureaucracy. What could we expect, given the mandate it was given, with no control: "Do what you will, if you want to go nuclear, if you want to go thermal, if you want to do your thing"? Ontario Hydro has done it all.

I do not think that was ever the intention of the people who put Hydro in place. The comparison I made very early on related to a trust I think the people envisioned at the inception of Ontario Hydro -- reasonable, cheap power for the users of Ontario. It was never envisioned that we would be talking about exporting power -- more particularly, nuclear power -- leaving the waste here in Ontario and sending the clean electricity to the United States. I do not think that was ever envisioned. I do not think it was ever envisioned that Ontario Hydro would become involved in all kinds of alternative energy schemes, in all kinds of other determinations. I do not think that was in the original mandate.

If we keep expanding the mandate that was given to Ontario Hydro, it will continue to grow, it will continue to become further and further removed from the government and it will become more and more unanswerable to the people of Ontario whom it was meant to serve.

4:40 p.m.

Mr. Swart: Mr. Speaker, this resolution, as we know, contains two parts.

The Deputy Speaker: I might remind the honourable member that according to the time schedule you have seven minutes, not the allotted 10, before this resolution is terminated.

Mr. Kerrio: Is that still seven?

The Deputy Speaker: Yes it is. Sorry.

Mr. Swart: This resolution contains two parts. I support both of them, and I suspect that everybody on this side of the House does. The resolution calls for a legislative policy directive to be tabled by the government and proposes that a committee be appointed to examine in particular the expansion and other matters with regard to Ontario Hydro.

In fact, what this really proposes is only that the Legislature should have some hand in the general overall policy-making of Ontario Hydro; not in the details, but it should be involved, and the general policy-making should be debated in this Legislature and there should be input from all sides. It is just that simple, and therefore it seems to me a very reasonable resolution.

I come at this from three directions. First, I come at it from the direction of the exhaustive work that has been done by Donald MacDonald on Hydro over a great many years. The member for Oriole quoted Donald MacDonald as an expert. He quoted him, of course, out of context.

Anybody who has listened to Donald MacDonald speak, and even in the very article he talks about, knows very well that although he, like the rest of us on this side, supports the principle of the public operation of Hydro, we know it has been rather badly mismanaged. He has said that continuously and, of course, he took him out of context in what the member said.

Donald MacDonald has had over the years a better handle on this matter than even the minister or Hydro itself. If they had followed the suggestions of Donald MacDonald, it would not be in the mess it is in at the present time.

I come at this, too, from the direction of consumer prices. The unrealistic policy, the overexpansion, has cost and is costing the consumers of hydro in this province literally millions and millions of dollars needlessly. I come at it from the direction of the inequality to the rural customers, because this has been an issue for many years, and I suggest that if this resolution is passed and acted on -- we know, of course, that it will not be -- we would perhaps have the opportunity to get at these things.

The tremendous overexpansion of Ontario Hydro by itself -- nothing else, leave everything else aside -- dictates the need for the two measures that are proposed in this resolution. Ontario Hydro simply has shown exceedingly bad judgement and has exercised bad management in recent years. The government cannot get away from accepting some of the responsibility, because all of this expansion in the end had to be approved by it. I am not sure whether it was Hydro that told the cabinet to pass this -- they are quite powerful -- or whether they did it on their own, but they had the power to prevent this from happening.

I am not going to document at all this constant backing off, but we know that in 1976 the select committee, the Hydro committee at that time, said we had ample power well into the 1980s and we did not need to proceed with this. Hydro said, "No, we are going to be short of power." The government okayed all of these billion-dollar expansions of Ontario Hydro, and then continuously from then on it had to back off and postpone because it was finding out that what Donald MacDonald and the committee had said was correct, that we did not need all of these expansions to meet hydro consumption in this province, and those were overbuilt to the point, as members know, where there is a 49 per cent surplus.

They have now closed down two hydro stations. One is the Lennox generating station, and I am not sure whether that was justified or not on the basis of economics, but they have also closed down the Hearn generating station now.

So we have two of these plants that cost hundreds of millions of dollars to the Ontario taxpayers that are not being used. What a waste of the public's money.

I want to deal with the setting of prices in the just about two minutes that I have left. We know how the price is set now to the consumers of hydro, whether the consumer be the hydroelectric commissions or whether it is the rural consumers who buy directly from Hydro.

The member for Niagara Falls (Mr. Kerrio) mentioned this. I have to say I fully agree that the Ontario Energy Board should be setting these prices on the same terms as it does on all other rates on energy. There is no question about that. Why should it be only a recommendation?

I have the figures here, which I do not intend to read, which show that by and large the recommendations have been followed through; not always, but over the years they have been followed and the recommendations have been accepted. If it is going to accept those recommendations, then why should it not be a decision? It has the power to appeal that to cabinet. Why should Ontario Hydro have the authority to set its own rates and to deviate from what the Ontario Energy Board decides?

Mr. Andrewes: It was below the recommendation this year.

Mr. Swart: Some were below and some were above, but why not have the Ontario Energy Board make the decision? The other problem in that, as the parliamentary assistant must know, is that the hearings that take place do not have the equality of input from the consumer side as well as from the Ontario Hydro side and, therefore, they are unfair. We need a public advocate to appear on behalf of the public at these hearings where they will make a final decision, and so there will be no overpricing to the consumers of this province.

The Deputy Speaker: At this time I will not recognize the member for Oshawa (Mr. Breaugh), but I will recognize the member for Halton-Burlington.

Mr. J. A. Reed: Mr. Speaker, as I wind up I would like to thank those who have entered into this debate this afternoon. I would like to thank even the member for Oriole for his theatrical presentation. It is not often that we are so well entertained by the member for Oriole, but this afternoon he outdid himself.

As a matter of fact, he probably presented to us one of the best arguments for reviving a legislative committee on Ontario Hydro affairs. He spoke glowingly of the accomplishments of that committee. He and I both have some close connection with what happened there. I should think the member would be supporting this resolution because it does call for the re-establishment of that committee.

I would like to comment on the remarks of the member for Port Arthur (Mr. Foulds) and his call for legislation placing control for rates in the hands of the government. I do not want to be critical of the member. He is supporting the resolution, but I should point out to him that the thrust of this resolution is on a broader basis. I really feel we should not necessarily support legislation and amendments that are ad hoc when it comes to such a broad base as Ontario Hydro. It may very well be that we would support an amendment on hydro rate control, but it should be done in the context of a broader debate.

The member for Oriole talked about the policy directive in terms of the memorandum of understanding which was signed on November 8 and tabled the day after the Legislature closed. I received it on my desk the day before yesterday. Really and truly, let me say this must be such an embarrassment to the government and to Ontario Hydro.

4:50 p.m.

I would point out a couple of things. He suggests this is a directive and he points out on page 7, "The Hydro board agrees to carry out its responsibilities in harmony with government policy." If the honourable member's support for this kind of statement is any indicator, then it is the greatest indictment of the government of Ontario, of his own government, we have ever had.

If the capital expansion program is in harmony with government policy, and he is suggesting it is and will continue to be, it is incomprehensible because the construction program is not in harmony with the need in Ontario and it has not been in harmony with the need since 1976. The first evidence that came to the select committee showed the growth was slowing down.

It was not until 1979 that Ontario Hydro began to recognize its econometric model but not believe it. It was only after that that it decided the 55 million it had spent in building an econometric model to look at the projected growth rate was valid. Consequently, we went for a number of years committing billions of dollars to nongrowth. It was a most serious miscalculation. If the member is saying this is in harmony with government policy, then his government stands indicted for endorsing that miscalculation.

I see the way out on the previous page of this so-called directive, this memorandum, 4.1 on page 6: "The minister is not responsible." I would say one other thing. I do not want to enter the nuclear debate, but those fellows are killing the nuclear industry by overbuilding it unnecessarily, because it will have no place to go when it finishes Darlington. They are going to burst the bubble and kill it.

We have one objective with this resolution. It is lower hydro rates in Ontario. We intend to pursue that when we form the government of Ontario after the next election. The people of Ontario can be sure that the Ontario Hydro program from then on will be responsible and in keeping with government policy.

COMPULSORY ARBITRATION SYSTEM

Mr. Runciman moved, seconded by Mr. MacQuarrie, resolution 38:

That this assembly, while acknowledging the world leadership role of the Ontario compulsory arbitration system, is cognizant of the need for continuing review to maintain that role and thus supports the initiation of a study, by a committee of this Legislature, to include, but not be limited to, the following: (i) the concept of a permanent panel of arbitrators vested with guaranteed tenure; and (ii) the establishment of a set of guidelines for arbitrators which would require that arbitration awards be confined to evidence adduced at an arbitration hearing and that such evidence must include an assessment of the economic conditions of the regions that will be affected by their rulings.

Mr. Runciman: Mr. Speaker, as most members are aware, over a considerable number of years there has been significant criticism of the arbitration process in Ontario.

The lion's share of that criticism has originated with the Association of Municipalities of Ontario, but other bodies involved in the process, such as the Ontario Nursing Homes Association, the Municipal Police Authorities and the Ontario Hospital Association have also registered concerns.

I should add that arbitrators such as Martin Teplitsky and Paul J. J. Cavalluzzo have also supported the need for review. I apologize to Hansard for that.

We have heard some public comments recently, one in Halifax at the Premiers' convention and two others at the AMO convention in Toronto, which I am going to quote. In Halifax, the Premier (Mr. Davis) called for a review of the arbitration system, as to its role in perpetuating the inflation cycle.

The mayor of St. Catharines complained that out-of-touch arbitrators have been awarding pay increases of 30 per cent in communities where many private sector employees are being laid off. The director of personnel for the city of Waterloo said: "Awards for police are compared with other police awards, fire with other fire departments and hospital workers with other hospitals. Yet the arbitration system operates in a complete vacuum, divorced from all financial realities." As I said, these comments were made prior to the introduction of Bill 179.

On the other side of the fence, in the past few months I have been contacted by the Ontario Professional Fire Fighters Association and the Municipal Police Authorities expressing their concerns regarding any possible changes to the present system.

The implied and expressed contentment of these groups with the system is in stark contrast to the widespread dissatisfaction apparent within the organizations bargaining with these groups. That almost complete satisfaction versus almost complete dissatisfaction has to raise doubts, in my view, as to just how fairly and equitably the process is working.

Dealing with some specific concerns, I would first mention the problem of choosing an arbitrator. I will use the Hospital Labour Disputes Arbitration Act as an example. Under the present system, the Minister of Labour (Mr. Ramsay) is responsible for appointing the chairman of the arbitration board. Both parties appoint nominees, who sit with the chairman to assist in his or her deliberations.

The minister looks to the parties for consensus in the area of choice of an arbitrator. Unfortunately, a consensus is almost never achieved. Instead, the parties exchange lists of their employee and employer favourites, each side rejects the other's lists and ultimately, after considerable delay, they turn to the minister, who appoints an arbitrator.

Arbitrators themselves are keenly aware of this process and consequently recognize their frequency of employment depends, at least in part, upon remaining in the good graces of both labour and management. As a result, there is some motivation on the part of arbitrators, however judicious, to mediate in terms of results between the parties rather than to apply sound or consistent economic evidence, principles and guidelines.

An arbitrator is charged with accomplishing an equation of result with what might have been anticipated in the private sector. His or her ability to do so is hampered by the history and precedent of bargaining and other arbitration awards between the parties. The further the parties are removed in time from the private sector and free collective negotiation, the greater the likelihood exists of skewing the relationship and fracturing the equation being sought.

Some arbitrators seem to take it as given that the employees who are deprived through the compulsory arbitration process of the right to strike, are entitled to compensation for that loss of bargaining power. While in certain economic times there is merit to that approach, it neglects the countervailing right that is lost to employers, namely the right to lock out.

In times of high unemployment, there is a tipping of the balance of strength in favour of the right to lock out vis-à-vis the right to strike. It is nonsensical to attempt to compensate for loss of the right to strike.

Also, there is a vast fluctuation at any given time between awards from arbitrator to arbitrator. While a certain amount of differentiation is inevitable, it is desirable that the distance between the poles or extremes be narrowed.

While certain factors will always weigh in favour of a given employer or employee group more heavily than another, the fundamental guidelines applying in the arbitration process ought not to vary from one arbitration to the next.

For this reason, it would also be desirable that a permanent panel of arbitrators were selected. It would operate on a full-time basis, thereby reducing the number of arbitrators and militating towards greater consistency of decision-making.

5 p.m.

While undoubtedly a permanent panel of arbitrators would develop its own guidelines for decision-making over time, it would be desirable that compulsory arbitration results equate with the reality of the private sector. If this goal is to be realized, then reference should first be made to average wage increases in that area.

To date, arbitrators have consistently relied too heavily upon comparables in the compulsory arbitration setting. Such comparisons are part official and, it goes without saying, wholly unrelated to equating results to the private sector. This is one explanation for the fact that public sector wage increases during early 1982 outstripped the increases in the private sector. Such a situation is untenable over a prolonged period of time and is undesirable for any period of time.

In a recent article in the Ottawa Citizen, columnist Wendy Warburton quoted a Ministry of Labour spokesman as saying "that the arbitration process is being reviewed by a special internal committee and that the ministry objects to a public study, saying the internal one is adequate."

My resolution, of course, proposes that the arbitration system be reviewed by a committee of this Legislature. I must admit that at the outset of this venture I was unaware of the complexities of the process and how involved such a review might be. I suspect the appropriate forum for such a review would be a select committee of the House rather than a standing committee, but I do feel quite strongly that the system should be looked at in depth by the elected members of this assembly. It should not be left solely to the faceless bureaucrats.

I do not believe that the criticism one hears and reads about is a condemnation of interest arbitration per se but a cry for a public review. Such a review could serve the twin purposes of reiterating this arbitration process in the public mind, while at the same time learning about the need for change and the direction that change should take. I have difficulty understanding the Minister of Labour's objections, because this is simply taking the case to the people. If we, as elected members, are to be bypassed in this process, should the participation of affected parties and other knowledgeable and interested citizens also be ignored?

In the 22 months I have been a member I have frequently heard concerns expressed about the relevance of this assembly and individual members. Endorsement of my resolution is a step in the direction of ensuring that we, as elected representatives, do play an important role in the governmental process and are not simply rubber- stamp artists for the bureaucracy.

Lest it be construed that this resolution is an attempt to freeze wages and salaries -- as I believe the member for Hamilton East (Mr. Mackenzie) suggested, according to that Warburton column -- nothing could be more removed from the truth. I think and hope that my labour background should preclude any such thoughts.

I do not believe this resolution should be condemned out of hand by our friends in the New Democratic Party. They are publicly on record as being opposed to binding arbitration. If a new system could be devised to work to the better interest of all parties concerned, would they be opposed to a system that could contribute to labour peace and happier relations? I believe a review at this time, while we have the breathing space created by Bill 179, could take us along the road to that objective.

Questions have been raised that the ability to pay should not be a consideration in the arbitration process. I cannot believe that in this day and age anyone, certainly not a political party, can subscribe to such a position. Where is the basis in reality in attempting to get blood from a stone unless one has a supreme being as leader?

I happen to believe that any review of this process should involve all those affected. I feel they should meet in open forum, with the right for all to make a contribution to any decision or decisions that may be made in regard to change. We do not want change just for the sake of change but change that will result in solutions that will attempt to address everyone's concerns.

I will close with a biblical thought that should guide the arbitration process: "Do unto others that which you would want them to do unto you."

The Deputy Speaker: I would remind you that you have 10 minutes' time remaining. You still require two minutes. Could staff work that into the timing? He requests two minutes.

I might also bring to the attention of all honourable members that we are having trouble with the heat again, I believe. The suggestion is we could try to turn on the electric fan. Shall we try that? If it gets too noisy, we will turn it off.

Mr. Wrye: Mr. Speaker, this is a veritable heat wave compared to what we had to put up with in room 228 yesterday. So I really have no problem. I am ready to consider that I am almost down in the sunny south.

I rise to indicate in my few remarks that I shall not support this resolution. I believe it takes what may be a minimal problem and overkills it. It seems to me this resolution seeks to turn the balance of the interest arbitration process against one side. It would move to set up a full, permanent panel of arbitrators when the evidence is that that would be a major setback for the arbitration process.

What is the objective of the resolution? Its purpose is apparently twofold. First, it is to establish a legislative committee -- and the member for Leeds (Mr. Runciman) has suggested it would be a select committee -- to study the compulsory arbitration system. According to the member, the system is faulty and calls for correction. Therefore the second purpose of his resolution is to set in motion the modification of the system.

I wonder whether the issue is such that it merits the striking of a committee to study the matter. For example, where in the list of priorities of the Ministry of Labour would such a study fall? If there is a problem with the system, does it require the creation of a committee to resolve it?

I was interested to hear, as I am sure the member was, the comments of the Minister of Labour, who said the arbitration processes were currently under study by a special internal committee. He said: "I do not think it is timely right now, with the right to arbitrate being restrained, to have this done in a public forum."

He suggested the internal study was an adequate one and I would certainly agree. If the ministry wishes to review the arbitration system as it reviews other aspects of labour matters from time to time, then I think that should be adequate.

Also, we might consider some of the other issues that might be looked at in the field of labour and ask ourselves whether they are not more important to a large variety of people than this one. I can point, for example, to issues related to the very disgraceful situation of women in our working force; the upgrading of the Employment Standards Act; employment adjustment with the advent of microtechnology in Ontario; the social and economic implications of mandatory retirement; the protection of the rights of workers to organize; first contract bargaining and labour practices by the employer; strikebreaking; industrial espionage and sabotage. It seems to me these subjects are at least as worthy, and in most cases more worthy, of a review by a select committee.

The apparent justification for a review of this system is based upon the inflationary impact of public sector awards. I found it noteworthy the member did not offer any statistics -- not one. There was not one statistic in his resolution other than a comment from the mayor of St. Catharines, that great progressive mayor, to the effect that there was a settlement somewhere in a nursing home, somewhere in Ontario, that was 30 per cent and it seemed to him it was high.

I wonder, in the absence of that, whether there are any statistics indicating precisely where the balance has been in arbitrated settlements as opposed to those settlements that have not gone to compulsory arbitration. In addition, what proportion of awards is settled by compulsory arbitration as opposed to full concurrence awards? The actual number of awards concluded by compulsory arbitration may be fairly small in relation to awards concluded by other means. If this is the case, the system cannot be faulted as the cause of the problem.

I notice that in the Warburton column, Martin Teplitsky, whom the member referred to, indicated he supports a review but for different reasons. In commenting on the inflationary aspect of arbitration awards, he said: "I suspect that an independent review may disclose that the responsibility for inflation cannot be laid at the door of compulsory binding arbitration. If our awards are inflationary it is ordinarily because the freely negotiated settlements both in the private and public sector are inflationary."

5:10 p.m.

The member has suggested in his remarks that the balance began to tip in the early part of 1982. He may be able to trot out a few statistics that will show that did indeed happen over a couple of quarters. It seems to me we have put a system in place that the member has praised. If there is small tipping of the balance at what is undoubtedly one of the most difficult economic times for this province, that is no reason to start throwing out the whole system. I will suggest some other solutions as my remarks continue.

In most cases compulsory arbitration applies to situations where the right to strike has already been removed -- police and firemen, hospital workers and so on. I wonder what kind of signal is being sent to workers by this resolution. In that regard, I will read a letter that was sent to the honourable member by the police association in the city of Brockville. If I could read it, I think this would bring to the member's attention the kind of concern this kind of resolution would cause, if it was carried by this Legislature.

"Dear Mr. Runciman: I read with grave concern an article in the Recorder and Times on October 6 of last year in which you are proposing changes to our current arbitration system. As members of the public service we are denied the right to strike; therefore, I am sure you can understand our deep interest in this matter since binding arbitration is our only recourse should negotiations fail.

"At an arbitration hearing, both parties concerned have an opportunity to present their demands, views and opinions. Hopefully, all of these can be supported by hard facts and evidence. In this regard the municipalities have always had the opportunity to refer to local economic conditions and other matters that they feel may be relevant. The arbitrator must then weigh the facts presented, and only those facts, and reach a fair and impartial decision. If the city does not include this pertinent information in its brief to the arbitrator he cannot take it into consideration in the first place.

"All things being considered, if both parties approached negotiations in a serious manner with the intention of negotiating in good faith, then I suppose we could do away with arbitrators entirely. Unfortunately this is not always the case and our only recourse is to the arbitration system." Even before the resolution is debated we have here the first of many expressions of concern from those working men and women who would be affected by the arbitration process.

I want to deal very briefly with one aspect of this resolution that calls for a permanent panel of arbitrators vested with guaranteed tenure. I am drawn by the debate before the Association of Municipalities of Ontario and by the remarks during that debate of Kenneth Swan, who is a professor at Queen's University. I had the opportunity to listen to him at Lake Couchiching last weekend. It is too bad my friend from Leeds was not also there to hear Mr. Swan.

I think that he points out that it would be very simple for arbitrators such as himself to agree with such a proposal. But he suggests there are a number of reasons for that, and I will not go into all of them. He says, first, that "Experience demonstrates that the 'half-life' of permanent arbitration tribunals is about two to three years. The parties are far too quick to identify the tribunals as the cause for all their woes and to become very quickly disenchanted with the tribunal and, therefore, unprepared to accept its notional authority."

He raises the possibility of having a permanent panel. In addition, he suggests some arbitrators realize the only way to go is to come down with a very unpopular decision. Now they can be removed from the process until such time as I suppose one side or the other can forget.

There were many other remarks I wanted to make on this resolution but I am sure my friends will do so. In conclusion, it seems to me this resolution proposes a solution to a problem the nature of which is undefined. This is at the heart of my nonsupport for this resolution. It seems to me that in this resolution the member approaches the problem as if he already knew the answer.

Mr. Mackenzie: Mr. Speaker, I rise on behalf of my party to oppose the resolution that is before us. The member for Leeds should not be surprised at this position. If he had been attempting to get a fair review of the arbitration procedures he would not have submitted the resolution he did.

I wonder about it on two counts: the timing of it, considering what we have just gone through on Bill 179, and also the rumours about tightening up the arbitration procedures in Ontario. I have reservations about the first part of the resolution -- the concept of a permanent panel of arbitrators with vested tenure -- but not nearly the reservations I have about the second part. This is why I say that if he were really looking for a fair review, we would not have this resolution before us, because it is certainly restrictive and is certainly going to affect workers very directly.

I really wonder if the honourable member does understand that arbitration is a right won, particularly in the public sector, at a considerable cost. Before 1944, as the member should know, any union that went on strike during the life of a contract risked being prosecuted under common law or under the Combines Act. Labour arbitration in Canada can really be traced to the turn of the century when a few unions such as the garment industry union in Hamilton were able to negotiate the provisions in their agreements. That is where it really started.

The system was carved in stone in Canada in 1944 by a federal government order in council meant at the time to ensure no work disruptions during the war years. In 1950 the Ontario government passed the Ontario Labour Relations Act which formally recognized unions and established an arbitration system. At the same time unions could not legally strike during the life of a contract.

In other words, workers have already sacrificed rights in return for which they have achieved compulsory arbitration. Sure, we in this party have some serious reservations about that, but we also understand that this is the route some of our unions want to go whether or not I particularly like it, and also it is the route they have to go as a result of this government.

I think it is important that members of this House understand that we have gone through studies of the arbitration procedures already. A few comments are appropriate from a brief that was submitted by the Ontario Federation of Labour to the industrial commission of inquiry into the grievance arbitration system under the Labour Relations Act. I am referring to 1977 in Ontario. It is useful to recognize a couple of the comments that were made in this brief by the federation.

As an aside, the member, apart from the submissions I think he said he had from the firemen's and the police associations, sure as blazes did not go very far afield. If he had he would have found out about some of the reaction from the public sector unions, the industrial unions or their major bodies, the federation or the Canadian Labour Congress. They certainly do not have much use for this resolution of his that is now on the Order Paper.

I am quoting from the Ontario Federation of Labour brief: "The handling of a worker's grievance on the job is possibly the single most important function of trade unions between contract negotiations. Management's rights have traditionally been sustained by the law of property; the rights of workers have been made subservient to them. That is why a collective agreement is the Magna Carta of the work place. It regulates the terms of the relationship between worker and employer. Any violation of the agreement that is not settled by mutual agreement is determined by the unilateral decision of management unless the union has reserved the rights of its members to strike if it cannot agree with management.

"The reservation of the right to strike during the term of the contract is prohibited in this province, and thus any management action which deprives a worker of a benefit of the protection of the agreement, such as ..." and there are any number of things that could be affected, "until arbitration confirms it, modifies or reverses management action."

We simply have to have that kind of protection for workers, and this is all the more reason why unions have insisted that if arbitration is to take the place of strikes and walkouts in midterm, it has to provide for certain, prompt settling of disputes.

5:20 p.m.

The area of concern there is how we achieve a proper cost in arbitration cases and an early settlement of disputes. It is one of the few things I give the Ministry of Labour a lot of credit for in the stepped-up mediation efforts we have seen in this House. There are a number of other things that probably could be done through the internal review going on by the Ministry of Labour.

One of the things that concerns me with this resolution by the member is that we could see more of this and not less; I am talking now about court proceedings. But arbitration was also meant to avoid the alternative of going through the slow, costly and complex proceedings of the courts.

The Ontario Federation of Labour points out the things we were trying to achieve with the arbitration process in Ontario. They were as follows.

"Unlike a judge, the arbitrator would not have to follow a rigid set of legal rules developed over a long period of time. He could rely upon his own opinion, case by case, in rendering an award." The restrictions on the rules which are suggested in part (ii) of the member's resolution scare the heck out of me.

"Time and expense could be saved. Except for the arbitrator's fee, there would be no counsel fees, filing fees, transcript fees and so on. Laymen could participate fully in the process. Representatives of either party need not be lawyers and might well have firsthand knowledge of the circumstances out of which the grievance arose.

"Proceedings could be carried on without resort to hard-to-understand legal language. Choice of an arbitrator would not be restricted to members of the bench. Privacy of hearings may very well be desirable in the stages of a hearing. Finally, arbitration could provide the parties with the guidance impossible to obtain in a court of law that would help them to administer the collective agreement from day to day without recourse to outside adjudication."

I have not read in detail all the points they made in outlining what they were expecting of it. After they pointed out what were its strengths, they did go on to some of the deficiencies of the system. But none of them were covered, I might say, by a further restriction or a hard set of rules on workers.

I am not sure just what the real purpose of this kite-flying resolution is, but forgive me if I am concerned over its potential use to further restrict the rights of workers. I am cynical enough to suspect that a clear intention is to kick it in at the end of the current workers' wage control legislation in Ontario and prevent any efforts by workers to catch up or to obtain parity with other workers in the province, because it certainly could be used that way.

One might even wonder out loud whether this was not part of the Premier's own revenge for the arbitration awards of the Peel teachers and the University of Toronto faculty staff. That was undoubtedly one of the reasons that caused him to come down on the side of the restrictive legislation we got in Bill 179.

Regardless of the real purpose, let me raise some real concerns that all members should have and should take into consideration before supporting this resolution. It smacks of industrial relations courts and state control that is a feature of bargaining in many of the Third World countries, a feature we do not want here.

Tories, of all people, should be concerned about this kind of approach. Surely the open and more innovative approach we try to, but do not always, achieve in Canada, but which we see in the Scandinavian countries, is a much better one. All matters can be submitted to arbitration; there is a much broader interpretation of the issues and consideration of all the factors on a much broader base. That seems to me to be conducive to a heck of a lot better industrial relations than setting a set of firm restrictions on the things an arbitrator can deal with.

With the restricted terms of reference we will be involved in and the arguments over what does come under those restricted terms of reference in arbitration cases, I suggest there is little doubt that we will further remove the parties' direct involvement and ability to handle their own grievances as we set these restrictions in place. I think that will lead to even more involvement of disputes over what can be covered in the courts. It may benefit the legal community but certainly not the workers of Ontario.

It is also interesting to speculate how this further extension of control over the workers' rights to bargain in Ontario will square with an unwillingness of this government to initiate controls on doctors, lawyers, profits or prices, or with how this government can argue for province-wide bargaining for construction workers, as it does vehemently, while going exactly the reverse and more restrictive route by putting restrictions on the arbitration procedure for public sector and other workers.

I suggest to the members, and I do it with respect to the member who put this resolution on the Order Paper, that this bill is dangerous. It does not have the support of the working community and is going to be seen as yet one further step against the workers in the province. It is dangerous and restrictive of their rights; it should be opposed in this House, and we should proceed first with a look through the internal committee of the Ministry of Labour.

Mr. MacQuarrie: Mr. Speaker, I would like to make a few remarks in support of the resolution presented by my colleague the member for Leeds (Mr. Runciman), particularly in so far as the need for study is concerned.

The issue of interest arbitration or compulsory arbitration of collective agreements is one with which I think every member of this Legislature should have some familiarity, because it can involve constituents in every one of our constituencies. It is of particular interest to those of us who have had some municipal experience, who have seen difficulties with arbitration awards and who sometimes wonder where arbitrators are coming from.

Interest arbitration is the final step used to arrive at a contract where the right to strike has not been given to a particular group of employees. Through various statutes, interest arbitration in Ontario extends to policemen, hospital workers, firemen and crown employees.

As a result, a substantial number of employees are subject to legislation which can result in compulsory arbitration. It is safe to say, however, that a very small percentage of these employees are ever subject to compulsory arbitration itself.

In 1978, a total of 2,848 collective agreements were negotiated covering more than 581,000 employees. Only three per cent of these agreements were reached through binding arbitration. In 1979, the figure was five per cent of a total of 3,309 agreements. Nevertheless, even these small percentages represent thousands of employees, and constructive suggestions with respect to improving the process might well make it work even better.

Interest arbitration in Ontario is still comparatively young when compared with other aspects in the history of labour relations. We should not presume for a moment that we have an ideal system. The key questions are: Is the present arbitration process deficient? If so, are there ways in which the arbitration process can be improved?

The present system allegedly suffers from a number of deficiencies. There is a certain lack of uniformity as between the statutes. In the Police Act we have a single arbitrator. With The Fire Departments Act, we end up with three arbitrators. A second deficiency that has been brought forward from time to time is sort of a lack of meaningful collective bargaining as between the parties.

When a fire department knows there are no intermediate steps, no intermediate provision with respect to compulsory mediation, it and the municipality -- both; I am excusing neither -- take very guarded positions. They end up in Mexican standoffs, with the result being that they end up with arbitration and that the potential settlement is bypassed along the way. Some intermediate step, such as compulsory conciliation, might well tend to overcome this obvious weakness.

5:30 p.m.

Another complaint raised from time to time is that there is a lack of trained arbitrators, that they are not politically accountable and that their decisions sometimes overlook regional economic conditions and introduce very gratuitous elements into awards, all of which can have a tremendous impact on the level of taxes, services and expenditures.

While I am talking of interest awards here as opposed to rights awards, a situation comes to mind where a group of disabled dispatchers was hired by a municipality to man the dispatch booths during the International Year of the Disabled. Because an arbitrator had gratuitously inserted a condition in the collective agreement that the municipality was prohibited from hiring out, the municipality was compelled to dismiss the employees it had hired.

The main problem that has been raised, and the most serious deficiency of all, is that the arbitration and the arbitrators in police and fire department arbitrations do not have a clear set of guidelines or criteria to follow and consequently proceed on a more or less ad hoc basis. Although compulsory arbitration has its deficiencies, it is conceded that it has provided employees with a certain amount of protection and has certainly compensated them for the loss of the right to strike.

I feel confident that most employee groups subject to compulsory arbitration, despite their public stances, would not be happy to lose it. Statistics show that arbitration awards for firefighters in 1981 actually were higher than those reached in freely negotiated settlements, a distinction of approximately 14.53 per cent as opposed to 12.98 per cent. In the first instance there were 12 settlements and in the second instance there were 56 settlements.

A number of suggestions have been forwarded with respect to improvements in the process. One of them is in the Association of Municipalities of Ontario Reports 40, entitled Compulsory and Binding Arbitration, which I would commend to the members. I am confident that most members are in possession of copies but, none the less, I commend it very strongly to their attention.

As I have mentioned, deficiencies have been noted and problems have been experienced with the compulsory arbitration process. A number of suggestions have been put forward concerning improvements on the way the arbitration awards are reached, and I would like to see a number of them acted on.

One is the establishment of guidelines or criteria under which arbitrators can act. This, in itself, would introduce an element of consistency into the arbitrators' decisions. Although arbitration is held out as an adjudicative process, where legal rules or criteria are applied to evidence, instead it is rather an ad hoc sort of approach, with both sides providing masses of almost inconsistent evidence.

Of particular interest to me is the first recommendation of the AMO report, which is "that compulsory conciliation, mediation, or other nonbinding intervention be employed before continuing to binding arbitration." Conciliation has been introduced with respect to the police forces, under amendments to the Police Act, and has worked extremely well there. With respect to fire departments, it would tend to make for more meaningful bargaining assessments and would avoid the Mexican standoffs.

I have a lot more to say on this, Mr. Speaker, but my time has run out.

The Acting Speaker: The member for Essex South.

[Applause]

Mr. Mancini: I really appreciate the applause from my colleagues, Mr. Speaker, as I rise to join the debate on resolution 38, introduced by the member for Leeds (Mr. Runciman).

The honourable member wishes the Legislature to make some changes in the arbitration system that we have in Ontario. He starts off his resolution by saying that Ontario has been in the forefront of arbitration, and he even goes so far as to say that we are world leaders as far as the arbitration system is concerned. If indeed we are world leaders in the arbitration system, I wonder why the member wishes to tear the same system down. On the one hand he talks about how great it is, and on the other hand he wants to make so many changes that the two will not be the same.

I am quite interested in his recommendation concerning the appointment of a select committee to study this problem. Of course, while all of us would want to serve on such a prestigious and important select committee, which I am sure would have the opportunity to travel worldwide to look at other jurisdictions and see how other arbitration processes work, this might not be in the best interests of labour and industrial relations across the province.

I would like to say something about his recommendation, though, concerning the establishment of a select committee. During these past two years I have regrettably come to the conclusion that whenever such a committee is established -- or even, for example, in the standing committees -- we do not get a full view of what the Legislature wants. We get the imposed view of what the government party members want, and we see this on a day-by-day basis.

The member's select committee to look into this matter, which he perceives and believes to have problems, is not going to solve anything because of the views we put forward. It will solve it to his satisfaction by the government's dominance in the House. It will be the government's dominance in the House that will resolve the problems that the member perceives here.

I want to make a comment concerning the second part of the resolution, which calls for the establishment of a set of guidelines for arbitrators to follow. While it is true that there are no legislated lists of considerations to which an arbitrator must apply his or her mind when arriving at a decision, I would ask the member whether it is even desirable that these guidelines should be imposed from above.

Arbitrators conduct themselves, theoretically, in accordance with the principles of administrative law and the procedural precedents of common law. To the extent that they stray, usually guidelines of sorts are imposed by the appellate courts. This is how it should be. There must be an initial presumption of bona fides and competence on the part of the arbitrators, one which warrants faith in their discretion.

5:40 p.m.

The honourable member further states in his resolution that the "awards be confined to evidence adduced at an arbitration hearing." The member must know that the awards require that this evidence be produced at these hearings. Indeed, there is the Judicial Review Procedure Act, which authorizes an appeal from an award which is based on evidence not adduced during the hearing. That is the way it is.

Those, along with the question of economic conditions that he wishes to impose on the arbitration system, appear to be the main issues. As far as economic conditions are concerned, one will never be able to find a community, organization or any employer who will say voluntarily, "Yes, I can pay and afford more." That is just never going to happen. The member will never be able to show that to this Legislature or be able to point to a municipality -- and most municipalities go through this arbitration process for some of their employees -- which willingly says, "Yes, we can pay more." and they start from that basis.

When we talk about the economic evidence, it is up to professional people such as the arbitrators, who are skilled in these matters, who are familiar with the economic conditions of the province and who are familiar with labour relations, to make these determinations.

I have gone through the member's list of objections to the present arbitration process. The first is that there should be guidelines, and we can see that there are already guidelines to some extent. The second is that evidence should be adduced at hearings, and we already know that evidence is produced at hearings and judgement is made on that evidence. The third concerns economic consideration, and we are very well aware of the fact that economic consideration is taken into consideration before arbitrators make their rulings.

Therefore, I have come to the conclusion that the member really does not have a beef or a concern with the present arbitration system. Possibly, he has some concerns with awards he has perceived to be too high in some areas; perhaps even in his own constituency where groups have gone through the arbitration process.

Mr. Bradley: The new mayor will fix that.

Mr. Mancini: Yes, I am sure the new mayor will take care of that.

Probably he is concerned about that, and his excessive reaction to some of these awards that he is not in favour of has led him to introduce a resolution that would tear down the present arbitration system. That is exactly the fundamental issue of the problem as the member for Leeds sees it.

Mr. Speaker: One minute.

Mr. Mancini: I appreciate that he has listened intently. I will conclude, Mr. Speaker, now that you have informed me I have very little time left. What would the member replace the arbitration system with after he strangled it with this type of resolution? He does not want to give those workers the right to strike. He does not want to have policemen, firemen and people in that type of employment leave the general public vulnerable. He wants them to perform their duties in the most professional way, yet at the same time he does not want them to have any leverage at all while they are bargaining. I have to conclude by saying that he does not even want the views of a third party.

Mr. Speaker: The member for Riverdale has two minutes.

Mr. Renwick: Two minutes will be ample.

Mr. Speaker, I can well understand why the member for Leeds brought this resolution before the assembly: because of the words to which he referred, which the Premier (Mr. Davis) used when he spoke at the premiers' conference on August 26, 1982, when he raised up front and centre the problem, as he saw it, of arbitration awards in the public sector system. I would say to the member for Leeds and the member for Carleton East (Mr. MacQuarrie) that the very fact there is dissatisfaction on one side and some satisfaction on the other is not a reason for trying to find some other solution to the problem.

The system in fact is working very well, and for the member to interfere with the process of interest-dispute arbitration in the industrial relations system of this province means basically that he wants to intrude the government, through some kind of quasi-judicial system, into the industrial relations system in the public sector so that the politicians who are elected can divorce themselves from their responsibilities with respect to effective settlements of disputes in those areas where people are entitled to adequate wages.

It is very interesting that we are now having a discussion in this society that it is not the question of the adequacy of a dignified life for working people that is to be the criterion, it is going to be the question of national policies that is going to be the criterion. Economic policies are going to be added as a criterion.

It is disguised in many ways. The member for Carleton East referred to its being a young system, and pretty soon someone will say it is a homespun idea for anyone to think a working man should be entitled to proper wages in this society. If we analyse the compulsory arbitration system, we will find that we are trying to solve problems that cannot be solved at the expense of working people.

Mr. Runciman: Mr. Speaker, I am not going to try to respond to all the comments, especially those of the member for Essex South (Mr. Mancini), who was rambling on and apparently coming up with some ideas about my motivation in this. Obviously he has been having visions. He is apparently a Mackenzie King Liberal.

The member for Hamilton East (Mr. Mackenzie) questioned the timing and something related to Bill 179. I assure him it is purely accidental. There are no terrible motives behind this. The reasoning behind this is primarily based on my experience as a municipal councillor, and these concerns have been raised for a great number of years by municipal councils across this province.

My exposure to the arbitration process has been primarily through grievance arbitration, and if I had anything to do over again I would strike the section of the resolution dealing with anything after establishing a committee of the Legislature, because the other sections are red herrings and they simply suggest areas that should be looked at by a committee. These are concerns that have been expressed by many municipal councils across this province. I am not endorsing them; I am not suggesting that is the way to go. I am simply saying those are two areas that should be looked at.

5:50 p.m.

The member for Hamilton East suggested I do not have the support of the working community. The member for Windsor-Sandwich (Mr. Wrye) indicated a letter from the police association, but after I contacted them and explained the intent of this resolution, what we are attempting to do, which is to take a public look at the situation, they registered no concerns or objections about that at all.

I am really disappointed that at least three members opposite supported the idea of the bureaucracy looking at this and not a committee of this House. That is extremely disappointing.

In my opening remarks, I mentioned that endorsement of my resolution is a step in the direction of ensuring that as elected representatives we do play an important role in the governmental processes and I strongly believe that.

Mr. Speaker: The member's time has expired.

Mr. Runciman: Let us not let the opportunity slip by.

5:57 p.m.

ONTARIO HYDRO

The House divided on Mr. J. A. Reed's motion of resolution 40, which was negatived on the following vote:

Ayes

Allen, Bradley, Breithaupt, Bryden, Charlton, Conway, Cooke, Copps, Cunningham, Di Santo, Edighoffer, Epp, Grande, Kerrio;

Mackenzie, Mancini, Martel, McClellan, McGuigan, McKessock, Miller, G. I., Newman, Philip, Rae, Reed, J. A.; Renwick, Ruprecht, Stokes, Swart, Sweeney, Worton, Wrye.

Nays

Andrewes, Ashe, Baetz, Barlow, Brandt, Cousens, Cureatz, Dean, Eaton. Eves, Gillies, Gordon, Gregory, Havrot, Henderson;

Hodgson, Johnson, J. M., Kennedy, Kerr, Kolyn, Lane, Leluk, MacQuarrie, McCaffrey, McCague, McLean, McNeil, Miller, F. S., Mitchell, Norton, Piché, Pollock, Pope, Robinson, Runciman;

Scrivener, Sheppard, Shymko, Snow, Sterling, Stevenson, K. R., Treleaven, Villeneuve, Watson, Wells, Williams.

Ayes 32; nays 46.

6 p.m.

COMPULSORY ARBITRATION SYSTEM

The House divided on Mr. Runciman's motion of resolution 38, which was agreed to on the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Breithaupt, Cousens, Cunningham, Cureatz, Dean, Eaton, Edighoffer, Epp, Eves, Gregory, Havrot, Henderson, Hodgson, Johnson, J. M., Kerr, Kerrio, Kolyn, Lane, Leluk;

MacQuarrie, McCaffrey, McKessock, McLean, McNeil, Miller, F. S., Miller, G. I., Mitchell, Norton, Piché, Pollock, Pope, Reed, J. A., Robinson, Runciman, Scrivener, Sheppard, Snow, Sterling, Stevenson, K. R., Sweeney, Treleaven, Villeneuve, Watson, Williams.

Nays

Allen, Bradley, Brandt, Bryden, Charlton, Conway, Cooke, Copps, Di Santo, Gillies, Gordon, Grande, Kennedy, Mackenzie, Mancini, Martel, McCague, McClellan, McGuigan, Newman, Philip, Rae, Renwick, Ruprecht. Shymko, Stokes, Swart, Wells, Worton, Wrye.

Ayes 48; nays 30.

BUSINESS OF THE HOUSE

Hon. Mr. Wells: Mr. Speaker, I would like to outline the business of the House for tonight and next week. Tonight we will deal with concurrence in supply for the Ministry of Consumer and Commercial Relations.

On Friday, tomorrow morning, we will deal with concurrence in supply for the Provincial Secretariat for Social Development and for the Ministry of Education.

On Monday afternoon, we will deal with the supplementary estimates of Treasury, followed in the afternoon and evening by concurrences in supply for the Provincial Secretariat for Justice, and ministries of the Solicitor General, Attorney General and Transportation and Communications.

On Tuesday, January 25, in the afternoon and evening, we will deal with legislation, beginning with any private members' bills on the Order Paper, followed by third readings of Bills 159 and 194, second reading and committee of the whole, if required, of Bill 193, and second reading and committee of the whole, if required, on Bills 178, 177, 7, 139, 183, 203 and 197.

On Wednesday, January 26, the usual three committees, justice, general government and resources development, may meet in the morning.

On Thursday, January 27, in the afternoon, we will have ballot items standing in the names of the member for Essex North (Mr. Ruston) and the member for Algoma-Manitoulin (Mr. Lane). In the evening, we will continue with concurrences not completed on Monday, followed by concurrences for the ministries of Education and Energy, continuing on Friday morning with the Ministry of Education if it is not completed.

On Friday, January 28, we will continue with any concurrences that were left over from Thursday night.

The House recessed at 6:07 p.m.

January 20, 1983