INTERIM SUPPLY

MINISTRY OF COLLEGES AND UNIVERSITIES AMENDMENT ACT (CONTINUED)

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The House resumed at 8 p.m.

INTERIM SUPPLY

Hon. F. S. Miller moved, seconded by Mr. Robinson, resolution 11:

That the Treasurer of Ontario be authorized to pay the salaries of the civil servants and other necessary payments pending the voting of supply for the period commencing July 1, 1983, and ending October 31, 1983, such payments to be charged to the proper appropriation following the voting of supply.

Mr. T. P. Reid: Mr. Speaker, I would have hoped the Treasurer could have brought in some of his supporters in his leadership bid, at least to surround himself this evening to hear -- Hon. F. S. Miller: There they are.

Mr. T. P. Reid: I think they are all second- ballot and third-ballot support.

We are here to give authority to the government to have interim supply unti1 October 31, 1983. In effect, what we are doing is giving the government a blank cheque of $8.3 billion or so and saying we are going to allow the government to spend this money until we have gone through the estimates period. We know there will probably be another such motion at the end of October. I presume we will all he here, since the leader of that party saw the light early and decided not to take part in the blood bath in Ottawa this weekend.

It is interesting that the news media had the Premier (Mr. Davis) pulling away in his limousine, packed with baggage and wife, presumably. and all who travel with the Premier, before the last ballot was even announced, so one can only presume that --

The Acting Speaker (Mr. Cousens): I am having trouble with how the member for Rainy River, who is such an astute politician, is making this add up to motion 11.

Mr. T. P. Reid: I wanted to ask whether or not some of the $8.3 billion we are going to vote on for the Treasurer tonight went to pay the expenses of the cabinet to go to Ottawa to participate in what can only be called a highly partisan Conservative exercise, which, as my colleague the member for Renfrew North (Mr. Conway) points out, seems to happen with somewhat monotonous frequency, almost every two or three years it would seem. The Joe Clark forces are out trying to gather all the leadership review buttons they can find so they will have them in place for the fall.

I do not wish to rehash my budget remarks which the Treasurer listened to so carefully and replied to so briefly. It is a shame that we are here to deal with $8.3 billion which we will do with the wave of a hand. It is interesting that I had a call the other day from a member of the press who said: "Why are you people not after Miller and his budget? Why are you not doing something about this?" I said: "What would you have us do? We made our remarks the day the budget was released." The official critic for the New Democratic Party and I made our budget responses. Those remarks received the usual slavish attention of media just dying to hear what we had to say and duly report it.

It is a sad commentary on the media attention in this province. The budget responses of the two official opposition critics do not seem to be very worthy of media attention at all. It is a symptom of the fact that the Premier and others have convinced those who run and own the media that very little of import -- I think I will wait until the Treasurer finishes his other conversation.

The Acting Speaker: I am sure he is listening, if the honourable member would continue.

Mr. T. P. Reid: I am going to call a quorum in that case.

The Acting Speaker: There is a quorum.

Mr. T. P. Reid: I do not think I am even going to bother. It is really a shame that our Legislature has come to this pass. I suppose I am as much to blame as anyone else. Except for about three set pieces in this place, nobody bothers to listen to anybody else. Frankly, we might all be better off -- and the taxpayers would certainly be better off -- if we reverted to the old system of meeting for about six weeks in the spring, doing all our business and then adjourning, and of course being paid commensurately.

It seems to me it is really up to the government benches to set a standard in this respect. I think it is uncommonly indecent for the government benches, particularly the cabinet, not to have at least the minister who is responsible in his place and at least appearing to have some interest in the proceedings.

I intend to speak very briefly about two issues only. One is unemployment. The day after the Treasurer brought down his budget in which he told us he was going to spend on behalf of the taxpayers of the province a little less than $25 billion, he also told us, on page 37 of the budget:

"Employment growth will accelerate through the year. Since last November's low point, seasonally adjusted employment has risen by 24,000. However, the average level of employment for the year is not expected to exceed the 1982 average level. Consequently, the average unemployment rate for 1983 is likely to be 11.7 per cent." Those are actual figures presumably.

The figures for the end of May indicate we have an unemployment rate of something like 527,000 in this province, depending on how one keeps one's books. My friends to the left use the figure of 750,000 on occasion.

Unemployment is made up of a number of different levels or sections, according to most people. There are those the economists say are almost permanently unemployable. There are always two or three per cent who either will be moving between jobs or have not been able to find a job. The Fraser Institute says there are those who are unemployed because of government legislation such as minimum wages and other factors like that. There are obviously those who have been temporarily laid off because of a decrease in the demand for product, and there are those who are laid off because of technological change in their industry.

8:10 p.m.

It is this last group of people about whom I want to address my remarks tonight, because there has been a great deal of controversy about technological unemployment and what should or should not be done about it.

It is interesting that at York University today and tomorrow there is a conference sponsored by that university on science, technology and the economy. It is a phrase I have tried to inject into my budget remarks, including a bill that I presented setting up a ministry of science, technology and productivity.

I want to deal with those people who are caught in the technological world. Members will recall that the Luddites in England tried to march, rally and burn the newfangled machinery that was going to put them all out of work. They were led by Ned Ludd.

Mr. Conway: I remember it well.

Mr. T. P. Reid: The Treasurer, who was around in those days, would remember that well.

These days the people who are opposed to high technology, particularly robotics and computers and so on, for them the phrase has been coined as chipites. They fear the chip and the effects it is going to have on employment in Canada and across the world, particularly in Ontario.

There are those who think technology is going to permanently replace a lot of people. I do not think that has been proved. As a matter of fact, I suppose the standard or example most used is Japan. If one looks at Japan, which is probably the most highly technologically advanced country in the world, unemployment there is about three per cent, although it seems to be growing, but productivity in the last 11 years has more than doubled. Canada's, and presumably therefore Ontario's, which has the highest industrialization and manufacturing, has doubled only in the last 30 years.

The question is, how are we going to deal with this unemployment? What can we, as the Ontario government, do about it? It is interesting that the government has made a move in this direction with the technology centres in an attempt to diffuse the information that is available and the technology that we have in the world that might be of assistance to our manufacturers and industrialists in Ontario. I think that is generally a good idea as far as it goes. We have the Innovation Development for Employment Advancement Corp. which is to give some kind of momentum, incentive and thrust to this kind of thing.

By the by, maybe the Treasurer would like to address himself to this question. I have been attempting, through my assistant, to find out what the people hired by the IDEA Corp. are going to be earning, paid for by the grateful Ontario taxpayer. If they have one idea, that idea is they are not going to tell us. Taxpayers' money is being used to set up a corporation that presumably is supposed to assist in technologically developing Ontario and new enterprises, but we are not to know as legislators just exactly what the cost to the taxpayer is going to be for that.

Mr. Conway: The Chairman of Management Board (Mr. McCague) is not going to stand for that. He is going to tell us.

Mr. T. P. Reid: There used to be something called freedom of information over on that side until the Attorney General (Mr. McMurtry), that great civil libertarian, got at that with his broad-axe as well.

Mr. Conway: I cannot believe the Chairman of Management Board would not want the people of Dufferin-Simcoe to know how much is being spent in that connection.

Hon. Mr. McCague: I will tell them.

Mr. T. P. Reid: I think the minister, along with his colleagues, will not tell us because he would be embarrassed to. That is another story.

In any case, my point is simply this, that moving in these directions, which I think we have to if there is going to be a future for us in international trade for Ontario, we have yet to deal with these problems of unemployment and how we are going to solve them. There are only two ways to provide employment opportunities, through the private sector and through the public sector. The Treasurer, along with his federal counterpart, but this Treasurer particularly, has thrown in his lot with the private sector and has said to us in his budget and in his other speeches that it is up to the private sector to employ people.

I am not so sure I entirely disagree with that, but it seems to me there is going to be at some point a transition period. How long that period may be I cannot say, but there will be a time when the government is going to have to provide more jobs, albeit in a relatively short period of time. I am not talking under one or two years; I am talking maybe five, maybe 10. The government is going to have to pick up the slack for those people who are unemployed and are going to be unable to find themselves opportunities in the private sector because of the thrust of technology and the jobs that will be available.

It is interesting that all this ties into productivity, which again seems to be a word the Treasurer shies away from to a great extent. I noticed and I took a little pride in this -- I know I should not and I am sure the Treasurer will say it was purely mischance -- that he mentioned in his budget this year the word "productivity." It appeared once, if not twice. Again, the two are tied in. Employment, unemployment and productivity are all part of the larger picture, but we do not seem to be dealing with those kinds of things in that sense.

I said before and I will say again, the Treasurer's budget was badly deficient and sadly deficient in the sense that it dealt simply with the short term -- and the short term existing from this budget till the next one, whenever it may come. According to the Treasurer's own words it may be as early as this fall.

Where is the forward thinking we used to have, in the sense of the long term, of where we are going to be when we hit the 1990s? How are we going to carry ourselves through to the year 2000? I think we are kidding ourselves if we do not address ourselves to the fundamental issues of productivity, the labour market and the employment opportunities that may or may not be available. I do not think this society can sustain an 11.7 per cent unemployment rate. People will not put up with it.

If the private sector at some point does not kick in with the jobs the Treasurer thinks it will, then it is going to be up to the Treasurer or his successor, whoever sits there, to come up with some of kind of program. It is sad that a government that has been in for 40 years should be in such disarray in terms of job planning, job markets and job training.

I can recall sitting here in the early 1970s and discussing the Dymond report that talked about the need for apprenticeships and skilled jobs. Yet for the last decade, and obviously we are going to continue doing so, we have been bringing people from overseas to Canada, particularly Ontario, to fill some 40,000 to 50,000 skilled jobs, which some economists and some market forecasters say we are going to need.

The other thing that concerns me is the fact that we still are not pulling together as a country and as a province. It distresses me to read in the newspaper some of the comments of Mr. McDermott of the Canadian Labour Congress and some other labour leaders. I say to them, I say to the Treasurer and I say to business, if we do not all start working together for common goals and with common aims, 11.7 per cent unemployment is going to look pretty good in a couple of years, because I do not believe we are in the common business cycle that a lot of people think we are in.

8:20 p.m.

I do not know whethcr we are in the Kondratieff business cycle of some 50-odd years, which I recall studying in economics some few short years ago. The fact remains that we are undergoing some fundamental changes, not only in Ontario but obviously across the world, changes that we admit over here we do not have full control of. But we see little on this side for the $8.3 billion we are going to allow the Treasurer to have without critical examination, or as critical as it should be, without dealing with the fundamental problems of productivity in our society. Productivity does not necessarily mean the loss of jobs. and Japan, as I mentioned, has proved that it need not necessarily be; in fact, it can be quite the opposite.

I have a large riding and in my job as opposition finance critic I talk to a lot of people -- I am sure not as many as the Treasurer does. The fundamental problem we seem to have as an economic unit comes back to productivity. I am sure the Treasurer hears it from the businessmen and everyone he seeks advice from, and from those who give their advice to him gratuitously, I am sure, on many occasions. There are some things that still make the Treasurer smile, I am glad to see.

In any case, I have suggested before and will suggest again on behalf of this party that the Treasurer and the government should set up something akin to a productivity centre, a productivity council; that we should have the three -- labour, management and government -- sit down together and ask: "How can we approach this problem in harmony? How can we best co-operate?" I cannot for the life of me see how things are going to improve without that kind of co-operation.

The Treasurer himself -- perhaps like you, Mr. Speaker, if I may suggest something partisan -- has just come through a situation in which he has seen what confrontation and internal fighting can do among a group of people; and it is not until we all work together that we will be able to overcome these problems and bring the average unemployment rate for 1983, likely to be 11.7 per cent, down to some figure that all of us can live with.

So I reiterate one more time that the Treasurer should address himself again to the productivity issue and give serious consideration to a productivity council, which I understand from very good authority the Premier was prepared to entertain, if not accept and implement, back around 1975. I need not tell the members what happened at that time in history.

In any case, I again put those views before the Treasurer with the hope that at some point he will deal with it.

Mr. Cooke: Mr. Speaker, I have just a very few comments to the Treasurer. I assume that this will likely be the last time we will address the member for Muskoka (Mr. F. S. Miller) as Treasurer of Ontario; that soon, in July, we will have a new Treasurer of Ontario. To my colleague the member for Rainy River I say it could be worse: it could be the member who is just about ready to enter the chamber.

Mr. T. P. Reid: Is that the new Treasurer?

Mr. Cooke: Maybe she will be the next Treasurer of Ontario and we will have to deal with her in the fall.

Hon. Miss Stephenson: The member is about the worst prognosticator I know.

Mr. Cooke: We shall see. The minister has been wrong before. I have been wrong before, too, but we hear all these rumours.

I want to agree with some of the comments the member for Rainy River made about the process in this Legislature. I must say, when one puts a lot of work into the response to the Treasurer's budget on behalf of one's party and then opposition statements are reported to the extent that they were the last time around, it really makes one wonder why so much time was spent preparing those responses.

I remember when I prepared my response to this year's budget, I got a call from my local reporter on the Windsor Star that day. I thought he was calling to find out if I could give him a copy of my speech ahead of time. He was not calling about that; he was calling about an open letter I had written to the Minister of Transportation and Communications (Mr. Snow) about Elmer the safety elephant, and he indicated to me that was going to be the story of the day. My statement on the budget had taken about 12 hours to prepare but it was not going to be reported. The Windsor Star wanted to report on Elmer instead.

At that point, I sort of put my -- I was going to say my whole career flashed in front of me, but six years can flash in front of me in any case. It really put everything in perspective --

Mr. Conway: You fail to understand the genius and dynamics of Ontario politics.

Mr. Cooke: At that point, I really did begin to understand what the interest is: something that takes two minutes to comprehend is reported, printed and people are forced to read it. I really do believe that if opposition positions were more adequately and more thoroughly reported we would have a better system in this Legislature.

This applies even to the way emergency debates are operating around this place. The last time I remember an emergency debate that was responded to by the government and in which all members of the Legislature participated was an emergency debate, I think in 1978, on the massive layoffs at Inco. Since then, when we have emergency debates here, we are lucky if we have 20 members in the Legislature at the time; that is if we can get past the Speaker and some of the rulings that have been made to eliminate the possibility of emergency debates in this place.

It really makes us wonder, at times, why we should put an effort into acting as a responsible opposition. On the one hand, the government pays no attention; on the other hand, nothing gets reported out of this place except governmental statements, which are usually some kind of gimmick to convince people the government is trying to do something.

This government is a master of gimmicks. and certainly the last budget demonstrates that more than anything. The five per cent surtax this government brought down and named the social service maintenance tax, was the most ridiculous gimmick that has been brought down by this government in my six years here. Unfortunately, it fooled the majority of the people in this province. Whoever dreamed up the name, perhaps the Treasurer did himself; a majority of people were convinced the tax was being put in a special pot that would be helping people who were unemployed, that it was actually going to be used to create jobs for those who were unemployed in this province.

I guess we have to give the government credit in that it can come up with these gimmicks, defuse major issues and try to convince people it is really doing something. It seems to me, in terms of the problems that are being faced by this government and by the people of this province, the government has become a government of firefighters. All it does is put the fires out. It never responds to the real problems that exist in this province.

In the auto sector we have had a crisis that has existed since the mid-1970s and it has not been responded to by this government or by the federal government. If Peter Lougheed in Alberta responded to the oil and the energy issue the way this government responded to an industry which is as important to Ontario as energy is to Alberta he would be out of office.

This government, for some reason, gets away with completely neglecting that industry, putting no pressure on the federal government to bring in the auto task force report. It will not even agree to bring in an all-party resolution to try to convince the federal government that task force report has to be implemented so that the 80,000 jobs -- that is the number of jobs that can be created both directly and indirectly if the recommendations are implemented; and they would be primarily here in Ontario. Yet this government refuses to respond. The same kinds of problems exist in the housing industry.

8:30 p.m.

This government could take action on job protection and requiring justification for plant closures. My colleague the member for Rainy River (Mr. T. P. Reid) talked about the lack of response by the provincial government over the years on job training. He mentioned a report on job training that was done in the early 1960s.

Another report was made by a royal commission established by this government in the early 1960s on the auto industry. However, the source of the cars has been changed. Instead of importing them from Europe we now import them from Japan, but all the recommendations from that royal commission are exactly the same as the recommendations now being made federally. They are not implemented either at the provincial level or the federal level. It is very frustrating to say the least.

Another area where this government could act was raised in question period today by my leader, the member for York South (Mr. Rae). This is in the area of lowering of interest rates.

I will give the members one example from my riding concerning a fellow by the name of Dave Warne who lives at 7845 Clairview in Windsor. He locked himself into a five-year mortgage last year at 19.25 per cent thinking that interest rates were going to go even higher and that such a mortgage would offer him some protection. Now he must sell his home because he has a job outside our community. He is in a position to be able to sell his home but Royal Trust Co., the mortgage holder, says: "If you want to sell your home and destroy the mortgage contract, there is a $5,000 penalty." The $5,000 penalty represents 10 per cent of the worth of his home. It is hardly worth paying that kind of penalty to get rid of his house or sell it.

This government could act in that area as well by bringing in the presidents of the banks or even looking at some of the legislation in order to protect some of the home owners in this province.

The same problems, the same ramifications of high interest rates, exist in the agricultural industry; but again this government refuses to respond.

This government has not responded to the economic crisis. It has not responded to the ramifications of high interest rates even in areas where they have the sole jurisdiction to act. It is very disappointing. This government has become a master at defusing issues and at shifting its responsibility onto the federal government even in areas where it can act. I hope one of these days its inaction will come back to haunt it. I hope the people will begin to understand this government has neglected them at a time when they most needed a government to show some leadership.

I hope that whatever ministry the Treasurer takes on next he will decide to take a little more of an interventionist point of view. I hope he understands the role of government; and I am glad the member for Rainy River now understands the public sector does have a major role to play in job creation, not just three- or four-week jobs as the Treasurer has proposed.

Perhaps one of these days that view will also get through to this government; the view that it has a major role in industrial strategy and job creation. Perhaps then it will achieve the goal I believe is achieveable in Ontario; that is the goal of full employment.

Hon. F. S. Miller: Mr. Speaker, I thank my colleagues for their concern about my future. I suspect if they remain critics of Treasury they will still be debating with me five years hence.

Mr. Conway: How much would you like to bet?

Mr. Martel: Is it 11-2?

Hon. F. S. Miller: Those are odds that I rather got to like. I have not made one prediction in the last three months in the political scenario that has been right so I do not know why I should start now.

Mr. Martel: Like your budget last year.

Hon. Miss Stephenson: Margaret Thatcher.

Hon. F. S. Miller: I was not asked about Margaret Thatcher.

Mr. Speaker, the member for Rainy River talked about employment and unemployment. Those two words are used to suit the point a person wants to make in a debate. I looked at the sheets that came out today from Statistics Canada. I heard the member refer quite accurately to them. But the statistic he did not use was the fact that 128,000 more Ontario people were at work last month than were at work the month before.

I do not deny this is fewer than a year ago. There were 4,080,000 people at work in Ontario at the end of May in actual count -- 4,040,000 on the adjusted basis. But even the adjusted basis showed an improvement of 21,000 people last month and that is probably the sixth or seventh month in a row when the number of people at work has improved.

I continue to say that I focus on the number of people at work as being the only statistic I can get a handle on, since the number of workers is not a constant. It is very difficult. We can have all kinds of debates about the true number of unemployed people in the province. I do not deny opposition members sometimes are quite accurate when they say not all people report. It is always very difficult to keep track of the real number. But I look at the number working and I see that month by month it is improving. That is really very encouraging to me.

He also got on to the question of productivity. Perhaps we have had a higher level of productivity than some partially developed countries did in the last 30 years. It has been much harder to add to our productivity base while they were coming from a relatively low level to their present high levels. They have passed us in many countries, I do not deny that.

I am delighted to see a plant like the Windsor plant of Chrysler going to robotics for the new "garageable" van --

Mr. Cooke: With 500 fewer people.

Hon. F. S. Miller: Well, okay; there are 500 fewer people in that plant, but they are in Canada. That is the point I want to make.

Just a couple of weeks ago, during a very thoughtful session at a high school, a young student said to me, "Mr. Miller, what is your government going to do about the new industrial revolution of productivity -- robotics, computers?" I said, "Help it as much as we can. Not to help it is automatically to condemn our workers to be jobless while other nations apply the new technology."

There is no more fear today in my mind about the eventual outcome of improvements in productivity than there was in the days when the Luddites marched. In effect, the average person's disposable income for things he wants has been improved through productivity increases and I think we should all share that.

The issue, though, and my friend the member for Rainy River touched on it quite properly, is what do we do to help people make that transformation. How do we keep our share of the growing demand for items? That, of course, gets down to the retraining the member talked about, the attempt to get people trained for the new jobs. We could go on about that at great length.

My colleague the Minister of Colleges and Universities (Miss Stephenson), who I assume will follow me tonight with some of her legislation, has been very successful with her two training in business and industry programs, TIBI I and TIBI II. We have talked to people on production lines in factories where technology is not quite as good as that of, say, the Japanese automobile workers. We have found there is great apprehension about the future, about the security of their jobs, about their ability to adapt to something that is mysterious and new. I, as an engineer, get frightened about the computer. I keep on saying I am a "PC engineer" -- I am a poor computer engineer. I would never survive in the world of today's engineer.

But the fact is that we can train, we must train and we are training people to adapt. And there is a great desire on the part of people on the production lines of Ontario to be trained for the jobs as they come along.

Hon. Miss Stephenson: Ninety thousand.

Hon. F. S. Miller: My friend says there are 90,000 at this moment.

We have touched briefly on the IDEA Corp. salaries. I think this question is better addressed to the Minister of Industry and Trade (Mr. Walker); I do not know them myself. My sunshine bill of last year -- Bill 16, I think it was -- required all such people to have their salaries made public. Therefore, in principle --

Mr. T. P. Reid: We never passed that one.

Hon. F. S. Miller: We did not have to because Bill 179 took its place.

Mr. Conway: They backed you off that one.

Hon. F. S. Miller: No, they did not. Bill 179 came along; and the purpose of Bill 16, if the member will recall, was to stop large increases in that sector. But we legislated them, and having legislated them there was --

Mr. Conway: That was not the only purpose.

Hon. F. S. Miller: That bill is not dead. The bill is not on the order paper today, but it can be quickly --

Mr. T. P. Reid: It is as dead as Joe Clark's career.

Hon. F. S. Miller: We can apply cardiopulmonary resuscitation, mouth to mouth, if the member wants -- if there is a need to. I like mouth to mouth. That way --

Mr. Conway: Unlike your cabinet, I support you on Bill 16.

8:40 p.m.

Hon. F. S. Miller: I knew the member did. I am simply saying there is a time and a place for that kind of information and it may well come forward.

My friend from Windsor-Riverside (Mr. Cooke) also gave me a few pieces of advice and said we are firefighters. I guess we are to a degree. We do deal with the problems of the day in a pragmatic way as they come up in this government. We also think well ahead.

Much as the Board of Industrial Leadership and Development in this province is laughed at, sneered at and made fun of. I take all that as a token of respect. I know the members opposite well enough to know that any time something is good we hear about it in many little ways.

It is nice to see articles in Alberta saying, "Look to Ontario's program," nice to see articles in Quebec saying, "Look to Ontario's program," nice to see the federal government copying it almost blatantly -- without any shame at all -- because it works. It is working and it will work.

I want to say one last thing on mortgages and mortgage interest. I think my friend knows better than to say one can expect a person who advances money at a fixed rate to back off if the market moves to his or her advantage. I just paid off my mortgage. It had about 10 years to go at seven and three-quarters per cent. It was a 25-year mortgage taken out hack in the days when the lenders wanted long terms to guarantee their return.

I recall thinking in 1968 that I was foolish to lock myself up for that long because seven and three-quarters per cent, would you believe, was thought to be high in 1968. It touched nine and one quarter the year before and I thought the sky had been reached, so I put off building my house for a year. It may interest members to know that I paid a penalty to pay off a seven and three-quarters per cent mortgage.

Mr. T. P. Reid: And you are Treasurer of Ontario?

Hon. F. S. Miller: I am Treasurer of Ontario. Through this I was losing four per cent because, under the foolish income tax laws set by the government of Canada, one cannot contra earned interest against paid interest. Earned interest should be set against paid interest so that people have a degree of flexibility. I am paying 50 per cent on the seven per cent I earn at the bank and I have no write-off on the seven and three quarters I pay. It is cheaper to pay it off. It is kind of crazy but that is the arithmetic of the day, so I paid a penalty.

The point I am trying to make concerns why there is a penalty. What would have happened had that person been right and the rates had gone up? Would he have expected that company to come back and raise the rate? No, because a contract was made. Those trust companies -- this was not a bank, it was a trust company, which is where most of the money comes from -- are now matching their moneys in the main. It means somebody out there is holding a certificate. It may be 15 per cent. That person probably had a five-year certificate at 15 per cent and in turn the company reloaned it on the assurance of a five-year guaranteed cost of money.

We all have to make those business decisions. I think we have been phenomenally fortunate to see the interest rates drop. It is terrible to see those kinds of rates applied. The fact remains that both the lender and the borrower gained that advantage. The mortgage company in the middle has always acted on a spread. I think it is very unfair for us to put the lenders on the spot when many of us are sitting with those very certificates, waiting for the period of time and saying we will not cash them in because they have been to our advantage. Those are the laws of the marketplace.

One of the trust companies got in trouble a couple of years ago because it started loaning long and borrowing short. Members will remember that almost all of the savings and loan companies in the United States got very badly caught on that.

Mr. Conway: Lennie Rosenberg and Carlo Montemurro?

Hon. F. S. Miller: I will not get into anybody else. I am just talking about --

The Acting Speaker (Mr. Cousens): The minister is deviating from the government motion.

Hon. F. S. Miller: Mr. Speaker, I recognize that but I am replying to the point he was allowed to address in his speech and I thought it proper I should do so. I am finished.

Motion agreed to.

MINISTRY OF COLLEGES AND UNIVERSITIES AMENDMENT ACT (CONTINUED)

Resuming the adjourned debate on the motion for second reading of Bill 42, An Act to amend the Ministry of Colleges and Universities Act.

Mr. Conway: Mr. Speaker, as the Treasurer departs the precincts, I note that his final words in the debate were, "I am finished." It invites again a certain anticipation about whether he is talking in parables in that connection.

Hon. F. S. Miller: Like MacArthur, I shall return.

Mr. Conway: I have no fear of that. I expect to see him, unlike Michael Wilson. in high places.

I must say to my friend the Speaker it is a pleasure to return to the second reading debate on Bill 42. I must say to my blue-suited friend the member for Durham East (Mr. Cureatz), who is sitting in the chair, that I was reviewing the debates of Tuesday evening last, when we first dealt with second reading of this legislation. It seems to have been a fairly vigorous debate. I was just looking at the number of interventions and one scarcely sees four lines before there was an interruption of sorts.

I promise tonight not to excite my friend the member for Brantford (Mr. Gillies), who the other night seemed to take some umbrage at what I had to suggest about his private ambition for Brantford city. I will not even ask him to give us that great Joe Clark routine that he was entertaining us with here on Thursday of last week. I suspect that will be an act that will stand him in good stead years down the road.

I will start tonight by apologizing, almost, for a misunderstanding that was mine in part. The minister (Miss Stephenson) and I and her assistant deputy minister Mr. Wilson, who is not here tonight I note -- or at least I cannot see him at this point -- were discussing in a sort of round robin what the primary and secondary intervention spoken of in the Ontario Council on University Affairs memo 82(5) really meant.

After rereading the document, as I did on a couple of occasions upon leaving the chamber, I am prepared to admit in an act of relative contrition that I may have misunderstood what is intended by the secondary intervention. So upon rereading it on the express advice of the Minister of Colleges and Universities I probably did take something out of pages 16 to 18 of that memo that perhaps were not intended.

I also noted on page 9 of the memo, "Council recognizes the serious definitional and procedural problems which are likely to be encountered in applying the process outlined above." I just want to tell the people over at OCUA that I think they are right. There is a certain possibility for confusion and I was apparently confused. I want to straighten that out lest the minister continue to feel she and I are on a completely different wavelength as to what was intended by the council in its memo.

As I indicated the other night it is certainly the view of my Liberal colleagues that Bill 42, An Act to amend the Ministry of Colleges and Universities Act, is a flawed piece of legislation. It is a piece of legislation that we have great difficulty supporting. I want to review briefly the reasons for our difficulty in that connection and then to conclude my remarks by a discussion, not too long a discussion, of the central issue as we see it.

However, before I begin that, I was reading the Hansard of the June 7 proceedings and I will read a paragraph from page 1511 of that transcript, which comes towards the end of the minister's opening statement. I would like the minister's attention, because I think this is fairly important.

It says: "This bill also requires the universities to make financial reports to the Minister of Colleges and Universities containing such information and by such date as the minister may require. This provision will allow the ministry to monitor compliance with the legislation and the general financial health of the universities."

This is where it gets very interesting and where I and others in the university community were left a little perplexed.

8:50 p.m.

The minister says in her opening statement on June 7, 1983: "We have been somewhat concerned in recent years with respect to the timeliness of financial reports from those institutions. We expect that this provision will indeed he used to remedy this situation."

I would be very pleased to hear the minister in her remarks at the end of second reading debate to clarify that by elaborating upon what specifically she means when she suggests there has been concern in the Ministry of Colleges and Universities in recent years with respect to "the timeliness of financial reports from those institutions." I may be wrong but the way I read that she certainly creates the impression that universities in this province, either individually or collectively, have been somehow tardy or negligent in their filing of the already required financial data.

Hon. Miss Stephenson: Tardy, not negligent.

Mr. Conway: In case Hansard did not pick up that interjection. I know the financial officers for Ontario's universities will be very anxious to hear it. The minister intervened to say the reality was that they were tardy, not negligent, in complying with the requirements by the ministry for financial reports.

That is interesting because that is not the impression of most people in the university community. They are going to he very interested to hear it is the minister's view they have been tardy in submitting the financial reports which are required, and were required prior to this legislation.

I do not quite understand, since it has been put around and about by even the minister, why it is said Bill 42 might never have to be used. I stand to be corrected, but this has certainly been suggested by some in the ministry, it is more a psychological impediment to any bad boys or girls, or bad ladies or gentlemen, in the university community who might consider running deficits since it is stated that Bill 42 is never really going to be implemented. It is simply there on the shelf to warn university administrators and boards of trustees.

If the act is not going to be applied I do not understand how that earlier part of her statement is going to come to fruition. In the absence of the act being applied for the purposes it intends, she or her successor the current Treasurer is not easily going to be able to improve the financial reporting. I will be very interested, however, to discuss in the coming weeks with a number of the financial officers throughout the university community in Ontario specifically how they feel they have, or have not complied with the requirements of the minister and/or her ministry for financial filing.

I said earlier in the debate on Tuesday last that one of the reasons we had difficulty with this legislation is simply that while there had been a pattern of difficulty, particularly in the 1979-82 period where a number of Ontario universities had run deficits -- the minister's compendium sets out a couple of fiscal years where the various universities and their deficit positions are clearly spelled out -- it is well known to the minister and most members of the Legislature that in recent months there has been a marked improvement in the financial health of many of those institutions.

Let the record show that the minister smiled when I related reality in the late spring of 1983 as I understand it.

Hon. Miss Stephenson: Why should I not smile?

Mr. Conway: Why should she not smile? Perhaps the question is why should we entertain this legislation if the problem that was there a couple of years ago is being very effectively handled by the various boards of trustees?

Hon. Miss Stephenson: Because of its --

Mr. Conway: Because of what? No answer.

It is our understanding the universities in this province are well on their way to repairing any of the deficit damage the minister was so concerned about. I can just imagine the minister's chagrin when a few years ago at least one university in my part of the province, if my memory serves me correctly, was reported as saying it was not at all prepared to consider deficits in order to continue to offer quality programs. If the minister was confronted with intransigence on the part of the university community that they were going to continue to operate with ever-increasing and accumulating deficits as a matter of public policy, then I would argue she might have some cause.

It is our reading of the current situation that most universities have responded responsibly to the minister's injunction. Brock is well on its way to recovering from its worrisome financial situation of 18 months ago.

We talked last Tuesday about the problems of the university community in northeastern Ontario. The minister's compendium points out very clearly what I think most if not all members know -- that Laurentian, Algoma, Nipissing and the College de Hearst are in some difficulty. I should not include Nipissing because only Laurentian, Algoma and Hearst were in that category as of April 30, 1982. Nipissing was showing a strong surplus.

Mr. Harris: They are doing very well, thank you.

Mr. Conway: My good friend from North Bay informs me they are doing quite well. Let the record show he suggested to the minister with a sense of nervous anticipation it was his hope that this very esteemed college in that fair city would continue to do very well. I suspect our sphinx-like friend, the Minister of Education, knows more in that connection than either the member for Nipissing or I.

Hon Miss Stephenson: The Parrott commission has not reported.

Mr. Conway: In fact, the Parrott commission has not reported.

I think it is important that this Legislature understand that a large part of the difficulty in deficit financing in this province dealt with that situation in northeastern Ontario. The minister shakes her head. I tend to differ with her on that because her own data supports the strength of my contention.

Mr. Harris: Are you against funding?

Mr. Conway: Of course I am not. I am not at all opposed to funding. I am simply taking the minister's own compendium which sets out that there is a well-defined difficulty in northeastern Ontario, at three of the four campuses, with respect to the deficit problem the minister is so exercised about. All I wanted to say is there are some good reasons why there are local conditions creating pressures on those institutions. That is why we appointed the Parrott commission. I would want my friend from North Bay to know what I am sure he knows: that --

Mr. Martel: He feels pretty sensitive about it all.

Mr. Conway: My friend the member for Sudbury East talks about sensitivity --

Hon. Miss Stephenson: He's equally sensitive.

Mr. Foulds: Nobody has ever accused the member from North Bay of being sensitive.

Mr. Conway: I hear from people out there in television land that a couple of Saturday nights ago most of them were prepared to conclude there was a visual image on television that was rugged, dynamic and a variety of other things. I cannot report all that because it is not fair to my friend from Sudbury, but he made quite an impression.

In the data provided by the ministry, I pointed out that as of the end of April 1982, Laurentian, Algoma and Hearst were all in deficit situations. At the end of fiscal 1981, according to the minister's own data. Laurentian, Algoma and Hearst were in a similar situation. Nipissing on both occasions was --

Hon. Miss Stephenson: There are others as well.

9 p.m.

Mr. Conway: I accept that. I am simply looking at her profile and I am trying to establish the argument that we have institutions such as Brock, for example, which is, as I understand it from talking to senior people at that administration, well on the road to recovery. They feel confident they have a plan that will rehabilitate their deficits. I point out only that the northeastern grouping is being looked at separately through the Parrott commission.

What is this great problem about which the minister has such worries? In 1983 where is the exact problem she feels must be addressed by this very Draconian legislation, Bill 42? She winces when I say it is Draconian.

As my good friend the member for London North (Mr. Van Home) will tell her in private or public conversation, Dr. George Connell, the distinguished president of the distinguished University of Western Ontario, feels and is reported in the University of Western Ontario News, May 19, 1983, to be very worried about the widesweeping powers being given to this supervisor as set out in section 13 of Bill 42.

I will simply read from that news report, "Dr. George Connell, president of the University of Western Ontario and chairman of the Council of Ontario Universities, has expressed concern at the broad powers over academic and financial matters that such a provincially appointed supervisor would have."

Dr. Connell goes on and appropriately indicates that, "The supervisor would have under Bill 42 more power than a university president or board of governors because the supervisor would not be bound by the checks and balances of the university system."

I think the Legislature has a responsibility to take that kind of statement seriously from so prominent and distinguished a leader in the university community. It concerns every single member of this Liberal opposition that the bill establishes and empowers the supervisor as it does. We feel it is --

Mr. Martel: It sounds like Biddell all over again.

Mr. Conway: The member for Sudbury East says, "It sounds like Biddell all over again."

As I said, and I will not go on at length repeating, what it really sounds like, as the deputy leader of the New Democratic Party will know, is the bill we had a couple of years ago, Bill 113, An Act to amend the Public Hospitals Act. We had a specific problem at the Toronto East General Hospital. While he was Minister of Health, my friend the member for Don Mills (Mr. Timbrell) brought forward a wide-sweeping amendment that gave the Ontario government the absolute right to go in and take over that or any other public general hospital by virtue of a trustee -- I think he was called a supervisor -- with extraordinary powers that no hospital board --

Mr. Van Home: A broad axe.

Mr. Conway: A broad axe perhaps, as the member for London North suggests.

The president of the University of Western Ontario and chairman of the Council of Ontario Universities, and a host of other people are very concerned, as we are, that the minister is proceeding with legislation, potentially setting up a dictator for university affairs in this province.

I see Mr. Wilson smiling underneath the gallery. Maybe he is not smiling. I hear a lot of favourable reports about the assistant deputy minister and I know he will want to share with me the concern we have about the kind of potentate he is creating with section 13 of his legislation. George Connell and a lot of others are extremely concerned about the powers that particular section and function is going to have in the years ahead.

Coming back to the first point, I would be pleased if the minister could come forward and indicate today the exact nature and extent of the deficit problem as it is now and, quite frankly, as she expects it to be in the next 18 months.

I am sure she is sitting over there saying, when she is not chatting with the Minister of Community and Social Services (Mr. Drea): "What Conway and the Liberals do not know is that when our Bill 179 is lifted, there are going to be great problems in the university community. We are going to have so many deficit situations that we are really going to need and want a Bill 42 to protect us against that reality."

If that is what she is thinking, if that is her view of the intermediate future, it would be very useful if the minister would stand in her place and say as much. Because, in the here and now, there does not appear to be an argument for this kind of legislation. It appears that every single university administration in this province understands the need to operate a balanced budget.

As I indicated last Tuesday, we have boards of trustees across this province, in so far as the universities are concerned, that are an adornment to the communities from which they come. They are good managers. I noted that Bill Jones, the incoming president of the Ontario Confederation of University Faculty Associations, was reported just the other day as saying, "Universities have managed with an exceptional degree of financial responsibility in the face of severe difficulties produced by the underfunding policies." He went on to deplore the innuendos that some universities are badly managed.

I agree with incoming President Jones of OCUFA. This bill represents a slap in the face, not only to the administrators of Ontario universities, but to every single trustee and board member. To suggest, as this bill does, that they cannot and will not manage their affairs as they are obligated to do in a responsible way is simply not a fair thing for the Minister of Colleges and Universities to do.

I simply wanted to put on the record tonight the concerns of people such as Dr. Connell and Mr. Bill Jones from OCUFA, whose suspicions and worries, in our view, are very legitimate indeed.

The principal reason we have difficulty of a great and grave nature in this party in accepting the principle of Bill 42 is simply this: For a number of years now, we have seen report after report fall into this jurisdiction, fall often into this very assembly, which indicate clearly that since about the mid-1970s, the Ontario government has premeditatively and consistently underfunded its post-secondary and especially its university community.

Let me deal with just two of those reports. I know my friend the member for Hamilton West (Mr. Allen) is anxious to get on. I do not intend to prolong this unduly, but I want quickly to review one of the most important and central documents I have seen in my eight years in this Ontario Legislative Assembly. As I began to indicate at the termination of my remarks last Tuesday evening, that is the report of the committee on the future role of universities in Ontario. That report is essentially in two parts. The first was the preliminary report of March 1981; then the final report, which came five -- not six months later as I suggested -- in August 1981.

Briefly, for members who may not recall, I think it was in 1980 when a number of groups, and most especially the Council of Ontario Universities, came before the Premier (Mr. Davis) of this province and said: "Mr. Premier, you, as the architect of much of this great post-secondary system that we have constructed after the Second World War, ought to know that it is in dire straits, It is in very real and immediate jeopardy and something must be done." To give the Premier credit, something was done. A distinguished group of people was put together on this panel. It was chaired by Dr. H. K. Fisher, Deputy Minister of Colleges and Universities, and it included such people as R. J. Butler, G. E. Connell, G. A. Harrower, to name but three of about a dozen people. The resource person, of course, was Dr. E. J. Monahan.

9:10 p.m.

Just quickly turning through that report, both the preliminary and the final report, it is extremely clear. Let me read from page 5 of the preliminary report of March, 1981: "The universities face the future with considerable uncertainty. Enrolments have fluctuated. From a peak in 1976-77, enrolment fell five per cent by 1978-79, and participation rates dropped with enrolment. Enrolment has now recovered, having risen by about four per cent in the last two years. but it is not yet clear that current enrolment growth reflects higher participation by Ontario residents since the increase includes a rising number of visa students." We have done something to dampen that, have we not?

"After 1983, a sharp decline in the size of the traditional university age group, 18-24, is expected, about 17 per cent between 1983 and 1996. In addition, enrolments are shifting among programs according to students' preferences, but universities are losing the flexibility to respond to these changes. This loss of flexibility results from a number of factors. A moratorium on capital grants for new construction was imposed in early 1970, and capital funds have since remained at a low level. During the 1960s and 1970s, operating grants measured in constant dollars rose annually until 1976-77, but fell each year thereafter. The adequacy of library holdings is being threatened. Scientific equipment is not being properly maintained and replaced.

"Faculty and staff complements have now begun to decline. Salaries and benefits in universities have lagged behind those in the public and private sectors. Morale has declined. Formal labour relations processes are replacing the former collegial style of management. There is increasing recourse to litigation. The adaptive capacity of universities is under stress."

This is a picture in March 1981 that is, to say the least, worrisome. Then we move on to the final report where it is indicated very clearly that by the summer of 1981 in its conclusion, the panel, the blue ribbon committee, the so-called Fisher group has concluded there are some very real and immediate worries.

Allow me to quote briefly from a couple of those, citing now from page 23, talking about funding levels from the final report:

"Ontario has made an enormous capital investment in its universities. The 1981 replacement value of this investment has been estimated at $2.3 billion. The province's moratorium on capital has been in effect now for nine years. Annual capital grants are much below the amount needed to repair, replace and renovate the universities' physical plants which are seriously deteriorating. All of the foregoing presents great uncertainty. Uncertainty about government funding levels is inevitable, given the unknowns of inflation levels and rates of real economic growth. There is also some uncertainty about the scope of the IDEA corporation". God bless them, there is as much uncertainty two years later as there was then.

Going on to a very important point, under governments, let me read from the final report of the Fisher group, quoting from page 30: "The committee's preliminary report dealt with the matter of government at considerable length. The general thrust of the preliminary report" -- I am almost like Joe Clark here, with his hand. I am sorry if I am disturbing my Conservative friends opposite. "The general thrust of the preliminary report was that government-university relations are closely linked with the issue of funding levels."

I think it is important we consider what is being suggested there. Let me repeat that: "The general thrust of the preliminary report was that government-university relations are closely linked with the issue of funding levels. The more severe the financial constraints, the more likely central intervention becomes."

Well, well, well; the screw has been turned routinely and increasingly since the mid-1970s and, as was predicted in this report, now two years old, "The more severe the financial constraints, the more likely central intervention becomes." Let me tell members, Bill 42 is nothing if it is not the central intervention spoken of and anticipated by the Fisher report of two years ago.

There is an interesting comment about university autonomy that I would like to refer to briefly. Citing from page 35 of the final report: "When universities receive a major proportion of their finances directly from public funds, they must be accountable for the expenditure of these funds. Autonomy is also limited to the extent that in a multi-university system it is unreasonable to expect that each institution will be publicly funded to offer any program it might want."

I think the minister and her officials are right in saying there is obvious support for the legislation which she has introduced. I dare say that what this particular report does so very well for many of us is to talk far more importantly about the broad context, the general landscape, into which this legislation falls, and against which landscape this legislation must be understood.

On page 51 -- I am not going to quote it at any great length -- the Fisher report concludes in the summer of 1981, by warning the government of Ontario that its university sector is in serious difficulty, that it has been underfunded for a long time, that its physical plant is eroding and deteriorating and in some places is almost a shambles, that there are morale problems and that if the government of Ontario is not prepared -- and we are now talking about two years ago -- seriously to enter into a longer term commitment for a funding formula that they recommended to match inflation, with a multimillion dollar commitment for capital replacement, then they would face a very difficult situation.

In fact, the Fisher panel suggested that if the government was not prepared to fund to inflation and a little above for a number of years -- well into the 1980s -- it would be well-advised to scale down the system dramatically to fit the fiscal cloth that was available and was going to be offered by the Treasurer.

Most importantly, perhaps, the Fisher panel suggested that while the situation was immediate, there were ways out, both positive and negative, but it strongly encouraged and warned the Minister of Colleges and Universities and her boss, the Premier, that the worst of all alternatives was to do nothing and try to muddle through.

I suggest what we have seen in the past two years has been the worst of the possible alternatives. I know there have been some dramatic battles at the Executive Council of Ontario and, in fairness to the minister, I can well understand how she has fought valiantly and on some measures she has won. On the broad question she has not, in any way, been able to deal with the central reality posed by the Fisher group.

In fact, an effort, undertaken from 1981 through to about the summer or early fall of 1982 to work out a framework of understanding with the affected universities in Ontario, came to naught, as I think I recall the minister saying, "Because the universities really could not get their act together, there was no real consensus." We all expected a statement by the minister on behalf of her government in response to the critical, vital and immediate questions of the report of the committee on the future role of Ontario universities.

In that connection, I was looking at a recent report of the Council of Ontario Universities entitled Squeezing the Triangle. In that, the critical issues of underfunding in the Ontario university community are addressed perhaps more effectively than they are elsewhere.

From page four of that document, now about a year old: "Just how generous v.as this allocation" -- meaning the minister's operating grant allocation for 1982-83---"in the eyes of the universities can be illustrated by referring to the spring 1982 COU brief to OCUA. entitled somewhat forlornly, Once More With Feeling. The cumulative system shortfall developed since 1977-78 ... "

That was almost the time when the distinguished member for York Mills (Miss Stephenson) took over the stewardship.

Hon. Miss Stephenson: Not until 1978.

Mr. Conway: August 1978, I believe; the year was 1977-78, so it is since that time the minister has been in charge of this vital department.

"The cumulative system shortfall developed since 1977-78 is estimated to stand now at $354.2 million, more than 27 per cent of the projected system revenue for 1982-83. Approximately half of this amount is attributable to foregone salary increases; the remainder involves real reductions in faculty and staff complements and in a range of nonsalary expenditures, most importantly library acquisitions, equipment replacement and physical plant renewal."

9:20 p.m.

It goes on, on page 5, "A good indication of the extent of underfunding in Ontario universities is provided by data on interprovincial comparisons of expenditures on universities." The summary of those data by the Council of Ontario Universities indicates that in 1981-1982 Ontario stood 10th and last in a number of vital categories.

I know it excites the Minister of Colleges and Universities, as it excites most of the Conservatives opposite, to hear members on this side indicate with hard and fast data generated by independent outside experts that their record in a vital sector is, in interprovincial comparisons, 10th and last. But sorry to say, there it is on page 5 of Squeezing the Triangle, from the Council of Ontario Universities.

It goes on to say on page 6, "Notwithstanding the loss of the revenue guarantee component of the EPF arrangement," and I will quote again from just one paragraph of page 6, "the potential implications for the universities of Ontario are very grave." It is talking about the federal-provincial quarrel over EPF. "An analysis by COU" --

Mr. Harris: It did not make any more sense then than it does now.

Mr. Conway: Well, I want to say to my friend the member for Nipissing that these data are not mine; they are offered by the Council of Ontario Universities --

Mr. Harris: But you used them in the last election and they make as much sense now as they did then; none at all.

Mr. Conway: I know the member for Nipissing will want --

Mr. Harris: You can keep campaigning on them for the next 100 years. I'm happy.

Mr. Conway: Just let me finish, Mr. Speaker. I appreciate the involvement of the member for Nipissing, and I anxiously await his participation in this debate.

But if I can go on with this: "An analysis by COU of EPF transfers from Ottawa to Queen's Park since 1977 employing the figures provided by the federal government on the total dollar amounts transferred to Ontario on behalf of universities shows that an increasingly large share of the Ontario government's grants to universities ultimately derived from federal funds."

I know this is at best a problematical analysis. But I say to the minister and her friend from Nipissing that there is a body of evidence out there to indicate, I think fairly strongly, if not absolutely, that the record of the Ontario government with respect to the funding of the university system it built from the Lakehead to Ottawa, and from Windsor to Hearst in the recent past is not good. They have refused to fund the system they built to an adequate level.

Let me quote from that publication by the Council of Ontario Universities: "Ontario universities now face an extremely stark vision of the future. In this starkness, however, there is clarity. The major issues confronting Ontario universities are clear. What is urgently needed is an acceptance, especially by government, of their reality and a concerted approach by government and the universities to their resolution.

"In recent years the lament of the universities has been underfunding, the complaint that universities are expected to maintain the same general scale of activities while accommodating to substantial changes within them with effectively fewer financial resources. This lament, at first plaintive, is now increasingly passionate."

What I want to say by quickly referring to these data is that I hope it is obvious to the members that there are serious issues unresolved and, in some cases, unaddressed by the Minister of Colleges and Universities. With my friend the member for Hamilton West in our estimates last year, I almost begged the minister to come forward in a creative and vigorous way to seize the initiative, to demonstrate leadership, to give to the university community of this province a sense of where she wants it to go in the 1980s, what kind of funding levels they are going to receive, and what kind of broad policy in terms of fiscal and financial development she expects. We have seen very little of that.

We understand that even the effort by the universities to engage the minister in an important debate about the nature of the funding formula, such as whether or not it should be as student sensitive as it has been over these past years, has been postponed. That is of great concern to all of us who have an immediate responsibility in this debate.

The minister has in the past shown little hesitation in taking on all comers in the primary and secondary levels of education --

Mr. McClellan: On all subjects.

Mr. Conway: In all subjects, as my friend the member for Bellwoods (Mr. McClellan) says. Who among us will forget the defeated look of the member for St. George (Ms. Fish), the Attorney General (Mr. McMurtry) and the Minister of Health (Mr. Grossman) on Bill 127. She stared them down not once, hut she stared them down many times.

Why has this minister of such vigour and such energy on other subjects been so nervous to do anything of a definitive kind when it comes to setting university policy for the Ontario of the 1980s?

I have not seen the minister stand in this place, or in any other, and respond definitely and creatively to the want of confidence in her administration that was authored by, among others, her own deputy minister. It would be very useful if members of this assembly could have the benefit of the minister's response to the want of confidence which is exactly and precisely what I see the Fisher committee report to be.

Why the Liberal Party of Ontario is so opposed to Bill 42 is because we see it as the only response in the past years to critical questions in the university community. It is a meagre response. It is a selective response and it is a profoundly negative response.

It would be very useful if the minister would stand in her place later today, or at another time in the near future, and tell us specifically what she intends to do about the many vital questions raised by Fisher et al. and would give us some sense, as my friend the member for Kitchener-Wilmot (Mr. Sweeney) would say, of whether or not she is going to offer a level of funding commensurate with the Fisher recommendation, or if the universities are going to face the kind of funding regime talked of by the Treasurer (Mr. F. S. Miller) in his 1981 budget. That is a vital question for the client community.

If she would talk about what kind of base for operating grants she imagines for the 1980s and beyond, it would be very useful. If she would proceed to bring forward the report of the Parrott commission, if she would tell us that what she is doing in northeastern Ontario is a provincial response to a local regional difficulty and no more, it might be useful. But there are many in the university community and some in this place who imagine it to be the thin edge of a greater wedge that will be dealt with in other communities at a not too distant time in the future.

If the architect of Bill 42 would draw back and give us some sense of her broad vision for the universities in this province for the foreseeable future, we might be prepared to consider Bill 42. But in the absence of any general guiding policy for the universities in this province for the future, I suggest no reasonable member could easily or otherwise support Bill 42, for which I indicated there is a problem the minister has not deigned to define in its current reality.

It is for those kinds of reasons, but most important because this minister has backed away, retreated from an important obligation which is hers in this connection -- to set policy, to chart a course, one would hope a course of vision and progress -- that I cannot and will not recommend to my colleagues any support for Bill 42.

9:30 p.m.

To give the minister credit, I was actually delighted that she was prepared to accept my invitation, supported by my good friend the member for Hamilton West (Mr. Allen), that what we will do in the coming months is give the universities of Ontario and others in the community who have an interest, the opportunity to do something that we rarely if ever do, certainly we have not done in my time that I can recall: have a good legislative debate or perhaps a legislative inquiry into the issues raised by and addressed by Bill 42.

I was delighted, Mr. Speaker, that your colleague from York Mills was prepared to accept my offer that Bill 42 be referred to a standing committee for, I think, a four-day discussion in September that would be entered not only by members of this assembly, but by members and leaders of the university community, so that we could all gather together in one room, at one time, to focus our attention and the attention of this assembly to a critical issue; namely, the current health and future prospects of our Ontario universities.

Notwithstanding the fact that we strongly object to the principle of Bill 42, setting out as it does a very inadequate, partial and negative response to these critical questions of university finance, none the less we look forward, as I know hundreds of people in the university community do, to the opportunity to gather together in nine or 10 weeks time in a standing committee of this Legislature to subject Bill 42, and the specific and broad issues with which it deals, to the kind of parliamentary examination that I believe these issues require.

Mr. Allen: Mr. Speaker, like my colleague and fellow critic for the Ministry of Colleges and Universities, the member for Renfrew North (Mr. Conway), I rise to oppose Bill 42, An Act to amend the Ministry of Colleges and Universities Act by prospectively reining in the deficits of those said universities.

At a time when the university system of this province needs to have new prospects open before it; when it needs to have new horizons in which to move, and to have more appropriate and substantial funding for the core educational enterprise in the undergraduate level, which then underlies the energy of subsequent graduate research which, in turn, must feed the industrial and economic recovery of this province; when I see, in the light of that, a piece of legislation which in effect wraps a prison around the financial prospects of the university system; when I hear it couched in terms suggesting that this ministry does not like to intervene in the university system and, in so saying, intervenes in a most decisive manner; when I see the ministry arguing that the university system must be adequately accountable for an expenditure of public funds, thereby ignoring a history of accountability which I think is beyond repute in this country, then it seems to me we are confronted with a bill that is simply an offensive piece of legislation.

I also want to argue that it is an entirely unnecessary piece of legislation. I want in the beginning to set beside the minister's suggestion that the universities must be adequately accountable for the expenditure of public funds, a remark that, of course, goes without saying. I have assumed all along there is a moral stature in the university administrations of this province that renders them accountable, and there is no need for the ministry to undertake this kind of act to move them in that direction.

University presidents tell me with very simple and plain logic: "You can always balance a budget. It is what you have left when you are finished that really concerns me." When I hear that, then it seems to me I see the contrast between the two statements. I see a ministry that is trying to hedge a university system in the confines of its rather narrow conception of that system.

I see a man labouring year after year at the head of a university administration which, like so many other university administrations in recent years, has gone about turning out half the lights in the hallways; has gone about turning down the heat in the heating system; has gone about turning down the hot water temperature levels; has gone through the exercise of again and again paring back support staff; has gone through the exercise of not keeping up the equipment levels that even the support staff need in their cleaning operation in some instances; has gone through the exercise of riding out, on the backs of university faculty the storm with underfunding, letting them drop further and further behind equivalent salary levels in the rest of the economy for people of their training and skills. When I see all that, then I find this piece of legislation an utterly offensive piece of paper.

Not only does this legislation insult boards of governors who have worked desperately hard to maintain the operation of their institutions in difficult funding years; it also undermines the moral authority that hung around the administrators of the university system as they attempted to weather those years. It also threatens the faculty of our universities as they see no possible escape from the prison of consistent underfunding, and this is the piece of legislation that will keep that policy in place, which is the only policy this ministry seems to have.

It alarms hard-pressed students who see the rigid confines now hemming them in, with the prospect that the fee system, which is in place and has been relatively equitable across the board in the university structure, will now be amplified into all sorts of patterns of incidental fees of one kind or another, varying from institution to institution, depending upon each institution's special problems with underfunding, and adding, step by step, year by year, to the cost of a university education for those students.

I want to suggest that this legislation is not just that insult, that undermining of moral authority, that threat to faculty and to students, it also is a smokescreen to cover government underfunding. It is a method of loading the responsibility on to the victims, of victimizing the victims. It is a significant intrusion upon academic freedom, and it is a neat dodge to avoid, as my colleague the member for Renfrew North has said, the overall policy formation and restructuring of the system as a whole that might well be undertaken if the ministry had the nerve to move in that direction.

In the first instance, the ministry was not well served by the Ontario Council on University Affairs' memorandum, requested in February 18, 1982. That advice was requested for the benefit of the ministry as it looked ahead to formulating this deficit control legislation. There is no convincing case in that memo. It simply assumes that what the ministry requested was right, was a good course to follow, was the appropriate direction to take, and then moved on from there without any justification for the essential assumption in the case.

9:40 p.m.

Second, I want to argue that the minister's argument itself sensationalizes an already unconvincing memorandum of the Ontario Council on University Affairs. After all, of course, the ministry had asked for it, and it could say that this memorandum was its own property and it had a right to sensationalize it if it wished. That indeed is what it does, as I will show shortly.

The cumulative effect of the whole piece is entirely unconvincing. I want to suggest the degree to which this legislation victimizes the victim; that the resort to interprovincial comparisons is highly misleading; that academic freedom and accountability are in fact hindered, undermined by the legislation, even though the ministry attempts to pretend that that is not the case; and to suggest that the whole once more under-girds the policy failure of this ministry and this government with respect to the universities of this province.

When I take in hand the Ontario Council on University Affairs' memorandum I find a very unconvincing case there. I read at the bottom of the first page, "There are few if any other jurisdictions in which publicly funded universities have autonomy as complete as that which is possessed in universities in Ontario."

Does the council then go on to ask itself whether there is any substantial warrant for moving out of that situation? Is there any reason for abandoning those circumstances? Is there any reason for modifying substantially that degree of university autonomy? The only argument presented is that somehow there is an abstract case to be made for rendering that autonomy somewhat more limited by virtue of the fact that the moneys received by the universities come from public sources.

They have come from public sources for quite a long time so why are we getting this legislation now? Why indeed, if one can argue, as I think my colleague the member for Renfrew North did successfully, that the university system has accounted responsibly for its funding to date? I will come back to that point. Why, then, is there some need to move beyond that remarkable state of autonomy that the universities in Ontario have held, still do hold, and prospectively, if the minister will withdraw this bill, will hold in the future?

But the Ontario council has not weighed that question, and that is my primary point. It has not weighed the question of whether there is any real need to move beyond the current status of Ontario universities. The case is unmade. The ministry already assumed the case, but that should not release the Ontario Council on University Affairs from going through the exercise and satisfying itself that this indeed was necessary.

One asks oneself, further looking at the memorandum, what the council is resting upon in arguing its case. It plays its hand very interestingly. It reads, "The proposed requirement that no university should incur an unmanageable deficit is, in the council's view, a logical and necessary extension of the principle of financial accountability."

Okay, nice logic. But then what does it go on to say about the facts of the situation? "Council considers the issue important at this time because restricted funding from government has made it increasingly difficult for universities to balance income and expenditures."

Precisely. But then why does the council not follow through that line of argument to its logical conclusion? Instead, it immediately drifts away from the point and moves on to something quite irrelevant. Indeed, it even begins to suggest that it is rumour and opinion that is the basis of this policy. It says, "Some proponents argue that only by running large deficits can an institution convince government that underfunding is real."

One must, of course, wonder at the experience it would require to persuade this ministry that underfunding is real. Obviously, for several years all sorts of expedients have been resorted to and they have been totally ineffective. It would not surprise me if some administrators asked themselves in their early, waking moments, or at that time of the day when all of us review the most dismal prospects of our lives and find them most unappetizing, whether that might not be a useful recourse.

I have not heard any university administrators I have talked with arguing that way in the cold light of day. The council does not name names, does not cite universities, does not propose documentation of the point. It simply passes it over. It goes on to say that when the deficit of an institution becomes large enough, government will be forced to bail out that institution. I understand that is the way the hospitals argued and there may have been some case for moving in with deficit legislation in that case. But if there is no evidence other than this sort of hearsay stuff that is wafting across the air, what foundation does one have for the case that one must move on to deficit legislation in Ontario? As far as I can see, none at all.

The council goes on to talk about other provincial approaches and outlines for us the ways in which some other provinces handle this situation. Some of them are interesting. The council then goes on to say, which I find highly relevant, "The relative success of various approaches adopted in other provincial jurisdictions is difficult to assess, primarily because none exists or operates in isolation from other related policies or circumstances."

Again, one must ask oneself precisely what specific policies and circumstances can one cite as the context in which this legislation comes forward in Ontario? It comes forward in precisely the context we have all tried to drive home to the minister for so long; namely, a consistent decade and an exaggerated six years of dramatic underfunding of the university system.

If one turns the page, one reads at the bottom of the next page, "Finally, the relative level of funding experienced by the different provincial systems has to some extent affected the type of deficit restrictions established and the ways in which they have been applied."

Again, I submit that if the council had followed the logic and pursued the context it is specifically referring to, then surely it would have discovered that the primary need in this province is not for deficit legislation but for appropriate funding and responsible policy making to guide the system as a whole. Lacking those two requirements, it is entirely irresponsible for a minister to bring forth this kind of legislation at this time.

Again, the point is, why did the council not follow the logic of its own argument? Why did it abandon it, and at yet another point follow on to devise a system it had been requested to devise in the first place.

It goes on to suggest this approach for Ontario with its identification stage, its evaluation stage, its adjustment stage and its intervention stage; all the stages of primary intervention in order to cope with an imaginary problem the ministry is trying to wrestle to the ground.

Finally, it comes to the point of secondary intervention and suggests that perhaps at that point the more dramatic action of possibly closing down a university or taking over a board of governors is perhaps too extreme for legislative action and ought not to be indulged in. At this point in its argument it suggests that secondary intervention would provide for the possibility that a supervisor might fail to achieve the required result. It goes on to argue that this kind of intervention ought to be engaged in on a case-by-case basis only.

I submit that the logic of the whole document produced by the Council of Ontario Universities suggests that an approach to the university issue in this province with respect to the deficit problems facing given universities ought in the first place to be tackled on a case-by-case basis, simply because no two universities really are essentially in the same position in the continuum of history, financing or any other aspect of their lives.

9:50 p.m.

It seems to me that when one turns to the last page of the text of that document, one asks oneself, "Has all this labour been expended simply to bring forth this mouse?" What the council recommended to the minister is far from what the ministry took out of the recommendation that was offered it; namely, that legislation should be passed to cover the following provincially assisted universities: Algoma College Association, le College de Hearst, Nipissing College, Ryerson Polytechnical Institute, the Ontario Institute for Studies in Education and the Ontario College of Art.

When I isolate from that list the group that is now being addressed through the specific means of the Parrott commission, the emerging university group of northeastern Ontario, what am I left with? I am left with the Ryerson Polytechnical Institute, the Ontario Institute for Studies in Education and the Ontario College of Art. When I ask myself which of those three remaining institutions has a significant deficit in hand, the only one I can find is the Ontario College of Art, at something like six per cent.

Again, where are we left? We are left with the need of one or two case studies and perhaps some assistance from the ministry; quite apart, perhaps, from the general policy question or the underfunding issue. That was essentially what the advice of Ontario Council on University Affairs' boiled down to, nothing more, nothing less. Not this document that we have before us now, Bill 42, with this massive intrusion into the university system.

When I come to the ministry's argument as it is outlined in the first couple of pages that accompany the document prepared by the Council of Ontario Universities, what do I find? I find a reference to 14 of 21 institutions incurring operating deficits in the 1981-82 year. That is cited as an alarming situation. All of us must shudder in our financial shoes until we turn again to the advice the minister gets from the Ontario Council on University Affairs.

What does it say there? It says an operating deficit in a given year is not a significant problem in a university. All universities, virtually every university in Ontario at some point in the last five years has had an operating deficit. There is nothing for us to be concerned about in that, but the ministry cites it as an alarming statistic.

Second, when I look at the other part of the statistical evidence, six institutions have cumulative operating deficits for 1981-82 in excess of $1 million or above 10 per cent of their total operating income. Again, that is indeed very interesting. That seems to get us down to bedrock, empirical evidence, that hard stuff we cannot really get around that really shakes us mentally and forces us to the minister's conclusion that this piece of legislation is necessary.

Then I look at the surplus/deficit table at the end of the documentation in the compendium. My goodness, isn't it interesting? I discover again that three of those six institutions that either have a cumulative deficit of over $1 million or over 10 per cent exist in the constellation of le College de Hearst, which is being addressed as a separate, discrete problem in the university system. As it should be; why not?

If that is the case and that situation is being addressed responsibly by the Parrott commission and will be addressed responsibly by the ministry in terms of the funding implications of establishing a respectable and substantial university entity, a university of northeastern Ontario in that sector of the province, then I must in my own mind mentally abstract that group from this problem we are confronted with as we ask ourselves whether indeed university deficit legislation is necessary in this province.

Having extracted those three, that leaves me with three. What am I left with? First, I am left with Trent University. In 1980-81, Trent University had a deficit of 9.9 per cent cumulatively. The next year, 1981-82, the deficit was 10.2 per cent. It is getting a little alarming. Then, as we know, Trent took its own future in hand, examined its circumstances and has been improving its deficit situation ever since. It is expecting an 8.05 per cent deficit this year and anticipating a 5.5 per cent deficit the year after.

The circumstances appear healthy, the university is on a rational course of deficit removal; no problem there.

Now I have subtracted another one, I have two cases left. What do I still have in hand? I have Ryerson in hand. In 1980-81, it had a 3.8 per cent deficit. For the year the ministry cites in its table it had a 2.1 per cent deficit. Ryerson tells us that deficit is still going down. Again, there is no problem, it is an institution moving responsibly, dealing with its problems; no issue, no problem.

The final institution is York University which, of course, does have a large deficit, somewhat over $4 million. Again, when one looks at it in terms of the scale of the university's operations, one finds that while that insitution had a 2.2 per cent deficit in 1980-81 and it climbed to 4.3 per cent in 1981-82, the deficit now, while we cannot learn it exactly, is obviously going down. Enrolment was up dramatically at York this year. The income from the granting system was up very dramatically, the highest of the system as a whole, and that deficit is going down.

Once more, when I review the hard data we are offered, I can only conclude that what the ministry has undertaken to do is to sensationalize the memorandum that was sent to it by the Ontario Council on University Affairs in order to alarm us all and to provide some kind of spurious financial grounding for putting forward a such a bill without any really substantial justification.

The argument for me simply melts away as I examine the situation. I look forward with interest to the minister's response to that argument, because it seems to me it is fundamentally unanswerable. There is another tactic and another strategy this ministry ought to be adopting besides a strategy which is so insulting, so morally undermining and so threatening. Were it to take a case-by-case, friendly approach to the university problems and given institutions, it would recognize that the problem is not a problem of massive proportions for the system as a whole. As a whole, it would be very difficult to find any $1.3-billion enterprise in this province or in this country that has managed any better than the university system has.

If, in the course of the refined funding system we have in place it still is impossible for some universities to escape from some of the problems of their historic situation in the system as a whole, then it ought to be the responsiblity of the ministry to take on the substantial funding implications that situation seems to dictate.

I find a very interesting figure of speech in the midst of the Ontario Council on University Affairs document. It suggests to me how far the council has abandoned a sense of independence with respect to this question when it scouts the alternatives. They say: "Of course, what the ministry could do is simply wind down the funding of a given university. It could withdraw that financial support." Then it goes on to use this analogy: "Such an action would not necessarily stop the leak in the sinking ship. Rather it would shut down its pumps."

10 p.m.

I puzzled and puzzled over that analogy to try to figure out what the leak was; what the water coming into the ship represented; what the pump was that was being operated; where the pump was pumping the bilge water, etc., etc. It did not make any sense.

Mr. Conway: It sounds to me like the Wreck of the Mary Deare.

Mr. Allen: That is the kind of sense it made to you. It made about the same kind of sense to me. Then I realized that the analogy was entirely inappropriate.

Obviously, the analogy ought to have been that the university ship had not simply sprung a leak and was faulty and had a leaking sill, and therefore the administration had to pump all the money that the government was pouring into the ship out into the waste expanse of the ocean; rather the ship -- the universities -- was floating on a tide and now had run aground as the tide of university funding had receded. Now, of course, we are stuck on the shoals and are unable to make any further progress. What is needed in that circumstance, obviously, is a return of the tide to an appropriate level to move it off the shoals.

But that analogy said to me how willing not only the ministry but, apparently, the council was to engage in a kind of process which we have seen so often; namely, the victimization of the victim. Because what it was saying in that analogy essentially was that the ship was at fault. Somehow it had come apart at the seams, and there had been some desperate action going on in the ship itself among its various operators to keep it afloat.

It is true that kind of activity had been going on in some desperation, but it has not been a matter of manning pumps and pumping out bilge water.

When I looked at the Council of Ontario Universities' references to the other provinces, I found, as I indicated, some rather wise observations. But what it directs one's attention to, of course, is the problem this university system in Ontario confronts. In that respect, my colleague the member for Renfrew North (Mr. Conway) has delivered a pretty heavy bill of goods with which I do not disagree in particular. I would like to Cite them once more because I think they bear repeating until not just this Legislature understands their implications but the public of Ontario finally hears what has been happening to the funding of this provincial system of universities.

Of course, the Ontario Council of University Affairs knows very well, and cites for us chapter and verse in its own annual report noting, for example, that over the period 1971-81, university operating grants for full-time equivalent students declined in real terms by 16.8 per cent, while provincial support for elementary and secondary school pupils increased 50.1 per cent from the provincial contributions; and the teachers' superannuation fund is included. That gives us the overall picture. If one looks at the specifics of the ways in which the university system is measured by the Council of Ontario Universities in eight separate categories, one finds in the latest report that the university system in Ontario ranks eighth in two of those categories, ninth in three of them, and 10th and last in two of them.

Only one of those indicators offers any hope at all, any suggestion there might be any other story to be told, and that, of course, is the one the minister always likes to come back to. It is not the one where operating expenditures as a percentage of gross domestic product indicate anything hopeful. There, for example, the rest of Canada runs at a level of 1.2 per cent, whereas this government runs at 0.9 per cent. And it is not grants per student, because the rest of Canada runs at $5,700 and Ontario runs at just over $4,200.

Number 6 reads, "Grants, plus student aid, as a per cent of gross general expenditure." That looks very nice, third in the whole country, until one turns to the recent budget document of our beloved Treasurer (Mr. F. S. Miller). One discovers a lovely chart on page 22 that shows us this province spends by far the lowest percentage of its total output as public expenditure. Naturally, in expending the lowest percentage, the percentage of that gross public expenditure spent on grants and student aid rises significantly. Only because of that distorting fact does that particular item manage to be a happy one for the Minister of Education to cite.

Looking historically over the past decade, one finds that Ontario ranked alongside her sister provinces as follows: In 1974-75, seventh; in 1975-79, eighth; in 1979-80, ninth; and from 1981 onward, 10th. I do not cite statistics like that in order to deprecate or denigrate the university system in Ontario. In spite of the difficulties it has gone through in recent years with this particular minister and ministry and government, it has nonetheless managed to maintain a remarkable record of education in the face of extreme difficulty.

I have to underline that when I look at charts that compare the expenditures for full-time equivalent students, and I see them dramatically outlined with the west hovering somewhere slightly above the average, Quebec likewise, the Atlantic provinces just below average, and Ontario, ever since the mid-1970s, running below that, then I get alarmed and a little embarrassed as well.

When I look at the relationship between expenditures and hospitals, schools and universities as social sector expenses of this government over the years from 1971-82, and I see the other two climb dramatically skywards while university funding falls significantly earthwards, I get alarmed and embarrassed.

When I see that over the years from 1972-73 to 1982-83, a decade of university funding, in the first year, 6.6 per cent was the universities' claim on provincial budgetary expenditures but in 1982-83, the last year, it has sunk by almost a percentage and a half to 5.2 per cent, then I become alarmed and somewhat embarrassed.

When I look, in particular, at the indexes of library acquisitions, in which real dollar expenditures are now 42.1 per cent of what they were a decade ago, then I am alarmed and embarrassed for the university system in Ontario.

When I look at the fact that the effective termination of capital grants early in the 1970s lost for the university system much of the money for equipment replacement, then, again, I find myself not only alarmed but embarrassed.

I have read, as we all have read in recent years, of university students wheeling sophisticated equipment out of washrooms; of science faculties that have sophisticated equipment to use but do not have the overhead capacity to plug the stuff in; of leaking laboratory roofs; and of the inability to use photographic equipment in some labs because the buildings are so unstable that the streetcars going by shake the apparatus.

I am embarrassed also for the university students who, more and more, are having to face that pattern of irregular harassment that the incidental fees which are multiplying in our university system burden them with.

10:10 p.m.

I have to conclude that the policies of this administration with respect to the universities leave one without much doubt. One would be surprised, indeed, if they managed to escape running up deficits. The problem, therefore, is not in the universities themselves, that they are somehow weak administrators, or that they have not got a grip on their financial futures but, rather, they are coping with a desperately difficult situation as this ministry attempts, by an irrational device, to shrink the system.

My colleague from Renfrew North cited chapter and verse from the Fisher report. I do not want to reiterate that document. I have read it through. I recognize its recommendations: the alternatives of restructuring, the alternatives of up-funding to meet quality requirements of the system one way or the other, the failure of the ministry to respond to either.

I happen to think we are in a kind of post-Fisher situation right now, however much the ministry has refused to respond to that situation. The two-year old Fisher report is almost like an ancient document so much seems to have passed under the bridge in the last number of months.

The minister has referred, from time to time, to her policy of rationalization. Yet, whenever we have pressed her to explain what rationalization of the university system means, we have had no hard goods in response. That is a policy which, apparently, is inexplicable, and a policy which is inexplicable is no policy at all.

What we have, in fact, is a ministry that is rationalizing in the psychological sense of the term. It is using language to try and explain away an absence of responsibility on its own part.

We are confronted, in this bill, with an exercise in crisis management. This is, if one likes, a response to Fisher. This is the response of the ministry to the problem of policy formation, and it is a structure which will take in hand, university by university, crisis by crisis, as it afflicts single universities turn by turn and will, somehow, wrestle each one into place without any reference at all for overall policy for the university system.

I would like to go on and add some remarks on the question of academic freedom. There is an issue there that remains. The ministry has negotiated with the universities various particulars of the bill that has accommodated a few of them. There is still, to my mind, in place section 13 in which a supervisor with rather significant, large powers, those in excess of the chairman and the chief executive officers of most universities, would exercise within the university system.

I am concerned also about the frame of reference out of which that supervisor would work in terms of the whole approach to accountability and accounting. In that respect, there are a number of matters which I will not go into that give me some alarm.

Among them, for example, is the document tabled by the Treasurer accompanying his budget on the whole question of research and development in Ontario. In that document one saw a complete absence of respect for research in and through the university. An industrial model entirely was followed.

The possibility of an imaginative mix of university-type research activity with industrial activity in that domain was bypassed in that document.

I see the minister frowning. If she wants to look at a nicer view of that document by the Ontario Council of Universities faculty associations, recently issued in May, then I suggest she read that document. It puts the point very succinctly.

In short, at a time when the university system is, in the outset, crying out for the opportunity to address the expanding horizon that the economic, the social needs of our time beg of it, this minister offers to them another noose; a short rope to tie them into a policy which to date has only begun to wreak the havoc that in future, if persisted in, it will wreak for the university system of Ontario.

Whether the universities themselves rise or not to react vigorously, as they should, to this legislation which so clearly and piously shifts the burden of cause onto the burden of results and both of them onto the backs of the universities of this province, this party and myself refuse to have any part of this legislation.

We oppose it totally, and we, with the member for Renfrew North, urge its reference to an independent committee which will evaluate, respond,and give us some basis for coming back later at another session to look at this, and at that time, we would hope, thoroughly and vigorously to reject it.

Hon. Miss Stephenson: Mr. Speaker, I would remind the honourable members that although the final response and the total response to the Committee on the Future Role of Universities in Ontario has not been forthcoming, as a result of a number of factors over which the ministry and this government have no control at this stage of the game, that will be forthcoming; but within that document there was a recommendation that this kind of action be taken in order to ensure that the universities not get themselves into such financial situations which could invalidate the possibility of continuing viability.

The request which was made of the Ontario Council on University Affairs was indeed responded to by OCUA in a very reasonable fashion, and I would remind the member from Hamilton West that when he reads, he is reading the total list of the post-secondary university-type institutions in this province. It was not restricted to Algoma College, le College de Hearst, Nipissing College, Ryerson Polytechnical Institute, Ontario Institute for Studies in Education and the Ontario College of Art; it was indeed the provincially assisted universities and that other list, and the honourable member would then realize that the OCUA was intending to cover the total list of those institutions.

The member for Renfrew North has suggested that, since the institutions are now in better financial strait than they were a year ago, we should forget about the legislation. I am delighted to tell the honourable members that since we first announced the intention to introduce the legislation back in February 1982 there has been a concerted effort within the university system to rid themselves of large deficits or to reduce them to more reasonable levels. I am delighted to see that the result has been as positive to this point as it has been.

I believe, however, that the impetus of the bill had a good deal to do with it, and I believe it is necessary to continue with the bill in order to maintain that direction.

The member for Renfrew North alleged that the universities were not happy with the reporting requirements being imposed on them in connection with the legislation. The reporting requirements have been worked out in co-operation with the committee of finance officers of the universities of Ontario, and they do understand the forms. They helped to draft the forms, and they conceded that they would be appropriate.

One of the things that is going to happen as a result of this is that within a relatively short period of time the ministry will have the kind of information which will help the ministry to determine whether the universities are going in the direction in which they themselves wish to be or whether there is a problem.

At the present time, the reporting mechanism permits the universities -- does not permit but almost encourages the universities -- to report on their financial statements somewhere about seven to eight months after the end of their fiscal year. We are practically at the beginning of another fiscal year before we know what the situation has been in the fiscal year 12 months earlier.

This new mechanism will allow the universities to report within three months and it certainly will allow both the institutions and government to determine whether the objectives are being met in the financial activities which the universities are undertaking. To my knowledge there certainly is no institution that is unhappy about complying with that.

10:20 p.m.

The universities that are not in excess of the two per cent deficit limit will not be required to produce further reports; those that are in excess of it will be required to submit further evidence, but I do not think this is an unreasonable requirement, and we certainly have not heard from a single institution that does think it is an unreasonable requirement.

The honourable member also suggested that there was a very damning letter from the chairman of the Council of Ontario Universities regarding the legislation, and I think I should read to the 1-louse the transcript of a Canadian Broadcasting Corp. Ottawa program.

Mr. Conway: Mr. Speaker, on a point of privilege, because I just want to be clear: I do not believe I said there was a damning letter. What I did refer to were comments made by Chairman Connell as reported in the University of Western Ontario News.

Hon. Miss Stephenson: The member did report that through an article, which I gather was written by the president.

CBC Ottawa has a transcript of a program on April 27 in which Jamie Mackay of my ministry and Dr. Connell participated. At one point Dr. Connell said: "Well, in general I think the university community recognizes the government's intentions and has no fundamental problem with the concept. There is similar legislation in many other provinces, and with respect to the particular draft the only serious point that remains an issue is the vesting of virtually unlimited powers in the supervisor."

That discussion has gone on for the last several months and, indeed, I have an amendment that will be introduced in clause-by-clause debate that will define governing bodies more closely so that the role of the senate will not be perceived to be taken over by the supervisor, which was the only concern that I am aware of on the part of most of the administrators of the universities in this province.

I think we have addressed most of the difficulties that the presidents had put forward. We certainly cannot agree with the Ontario Confederation of University Faculty Associations' position that the financial exigency provisions in collective agreements would cover this situation, because only six of the institutions or universities have those provisions within their collective agreements; and although the member for Renfrew North cited Algoma as the only institution to invoke such a provision, the financial exigency provision obviously has not served as an adequate remedy for the situation in Algoma at this point, and to date no other institution has invoked it in spite of the existence of some fairly significant deficits over the period of time.

Mr. Speaker, we have had an interesting debate on second reading of this very necessary piece of legislation, which I believe is welcomed by those who are responsible for the ultimate governance of the institutions in question. That is certainly the response I have heard. I believe there will be opportunities for input into the discussion of this bill, I hope in the committee hearings that are to take place in September.

I have been absolutely entertained by the marvellous thespian capabilities of the member for Renfrew North, who has not succeeded as yet in expanding his histrionics into Terpsichorean capacities within this House, but I expect to see that any day.

I believe this bill is very important to the future of the universities in this province. It places responsibility on those institutions, such as other publicly funded institutions have, to control their expenditures in a way that ensures they are accountable to the public, which supports them through tax dollars.

I would urge the members of this House to support this bill on second reading and thereafter.

10:37 p.m.

The House divided on Hon. Miss Stephenson's motion for second reading of Bill 42, An act to amend the Ministry of Colleges and Universities Act, which was agreed to the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Birch, Brandt, Cureatz, Drea, Eaton, Elgie, Eves, Fish, Gillies, Gordon, Gregory, Grossman, Harris, Havrot, Henderson, Hennessy, Hodgson, Johnson, J. M., Jones, Kennedy, Kerr, Kolyn, Lane, Leluk;

MacQuarrie, McCaffrey, McCague, McLean, McMurtry, Miller, F. S., Mitchell, Norton, Piché, Pollock, Pope, Ramsay, Robinson, Rotenberg, Runciman, Scrivener, Sheppard, Stephenson, B. M., Sterling, Stevenson, K. R., Taylor, G. W., Taylor, J. A., Treleaven, Villeneuve, Walker, Watson, Welch, Wells, Williams, Wiseman, Yakabuski.

Nays

Allen, Boudria, Bryden, Cassidy, Charlton, Conway, Cooke, Cunningham, Di Santo, Eakins, Edighoffer, Elston, Epp, Foulds, Grande, Haggerty, Johnston, R. F., Kerrio, Lupusella, Mackenzie, Martel, McClellan, McGuigan, Miller, G. I., Newman, Philip, Rae, Reid, T. P., Renwick, Ruprecht, Ruston, Samis, Spensieri, Swart, Sweeney, Wildman, Worton, Wrye.

10:40 p.m.

Ayes 61; nays 38.

Bill ordered for standing committee on social development.

The House adjourned at 10:42 p.m.