INTERIM SUPPLY

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The House resumed at 8 p.m.

INTERIM SUPPLY

Hon. Mr. Grossman moved, seconded by Hon. Mr. Wells, resolution 11:

That the Treasurer of Ontario be authorized to pay the salaries of civil servants and other necessary payments pending the voting of supply for the period commencing November 1, 1984, and ending December 31, 1984, such payments to be charged to the proper appropriation following the voting of supply.

Hon. Mr. Grossman: Mr. Speaker, since the Supply Act will not be passed, as usual, until late in the fiscal year, interim authority for government expenditure is sought, once again, by way of a motion of interim supply. The second interim supply motion this fiscal year covered July 1, 1984, to October 31, 1984. The motion I have introduced today will be from November 1, 1984, to December 31, 1984. This period of two months is within that allowed by the standing orders and I estimate the amount of money required in this period to be approximately $4 billion.

Indicators of current economic and business activity show the economy has continued to expand since the budget. Since May, 42,000 new jobs have been created in Ontario. This continuing trend has been evident throughout the recovery. After the low point of the recession --

Mr. Foulds: Mr. Speaker, on a point of order: I would just like the Treasurer to repeat the number of jobs and the time period that has occurred in.

The Acting Speaker (Mr. Cousens): There is a problem with the hearing on the other side of the House.

Hon. Mr. Grossman: That is not all, Mr. Speaker.

Since May, 42,000 new jobs have been created in Ontario. This continuing trend has been evident throughout the recovery. After the low point in the recession, Ontario employment has increased by 282,000 jobs. I repeat that employment is now higher than it has ever been in Ontario.

There is more good news. Employment gains have occurred widely throughout Ontario's industries. We have seen strong job creation in almost every area -- manufacturing, trade, finance and the service sectors -- and also encouraging employment figures.

The economic recovery has contributed to a reduction of youth unemployment from 17.5 per cent in September 1982 to 14.9 per cent in September 1984. We have a strong commitment to improving youth employment and this will continue to be a principal economic objective.

Manufacturing shipments also point to increased economic activity. In the first seven months of this year, they were up 20.8 per cent over a year ago. Continued consumer spending is another key indicator, up 9.9 per cent over last year. Canadian steel production, much of it in Ontario, is up 17.1 per cent so far this year.

Overall growth is strong and is exceeding our expectations at the time of the budget. We now believe that real gross provincial product growth will be five per cent in 1984 compared to the budget forecast of 4.7 per cent, which so many members in the opposition suggested was overly optimistic.

The increase may be attributed to two major factors: new investment spending by business and stronger than expected growth in the United States economy.

For instance, new investment spending in nonresidential business will likely increase by 9.4 per cent in current dollars, compared with the anticipated 4.7 per cent at budget time. With inflation down, that translates into higher real investment spending.

The business community's confidence in Ontario's economy is encouraging. Investment spending by major automobile manufacturers is just one example. More than $2 billion has been allocated to Ontario by the automotive industry. General Motors announced it will spend more than $1 billion to expand its operations in Oshawa and St. Catharines. American Motors has committed $764 million to build an assembly plant in Brampton, and Honda has decided to construct a plant in the Alliston area. Such initiatives will not only stimulate the Ontario economy in 1985 and future years, but they confirm the confidence of the auto industry in Ontario.

These developments outweigh the adverse impact, particularly on the housing market, of the increase in interest rates earlier this year. However, housing market prospects are brightening in the wake of recent mortgage rate decreases.

The economic prospects for Ontario in the rest of 1984 are strong and, happily, I believe the economy's growth will continue through 1985. Markets for our province's exports will be further strengthened next year, in large part by continued US economic growth.

Higher employment has resulted in real income gains that will have a significant and positive effect on consumer spending. If interest rates should rise significantly again, the outlook for 1985 could be unduly and adversely affected. However, I am optimistic that those with responsibility for monetary policy in Canada and the United States are now aware of the economic costs of future increases.

This encouraging outlook contradicts the very pessimistic predictions for the Ontario economy made, once again and as usual, by the Conference Board of Canada. The board recognizes that Ontario has grown substantially in 1984. In fact, its most recent provincial forecast indicates that Ontario will be the fastest growing province this year.

8:10 p.m.

None the less, the Conference Board forecast for 1985 is based on the premise that Canada is once again on the brink of an economic slowdown caused in large part by rising interest rates. There is no evidence that an economic downturn is at hand. I do not consider its predictions to be plausible. As far as I can determine, the Conference Board remains the only major forecaster predicting imminent economic recession.

One of the most welcome developments, and yet another indicator of the economy's strength, is the reduction of the inflation rate. The latest report on the inflation rate as of August shows an increase of only 3.7 per cent, while the increase in Canadian private sector wage settlements is only 2.1 per cent. Developments such as these indicate the continued need for public sector restraint. All levels of government must continue to reinforce this transition to a lower inflation environment. It is important that all involved begin to reduce their expectations accordingly.

This year's restraint program is working well. Compensation increases for more than 40 per cent of public sector employees have now been reported and the weighted average increase is consistent with our guidelines. Some groups are arguing for larger increases because of raises they missed during the restraint program. The fact is that our wage guidelines have matched actual inflation during the past two years. We would argue very strenuously that they have provided stability without hardship.

Restraint, none the less, means more than limiting public sector wage increases. Careful control of spending and increased efficiency in providing services continue to be major objectives of the government. At the same time, the problem of finding employment for young people remains a special priority for us. Of the 10-point youth employment strategy announced in the spring budget, the majority are now in operation.

There are 35 youth employment counselling centres functioning throughout the province and 30,000 young people have benefited from services provided from these centres. The portion of youth works that provides a $4-an-hour subsidy has more than 1,500 jobs already approved for young people. The Ontario youth tourism program has been announced and applications are being accepted. The Ontario youth corps program has more than 200 municipalities involved now, with jobs assigned to thousands of young people. Ontario ministries participating in youth corps have identified already more than 3,000 jobs throughout the province, and the Ontario career action program has been expanded and has enlisted close to 7,000 new trainees since spring.

The youth commissioner, Ken Dryden, is organizing Ontario youth trust committees now in various communities and our youth hotline continues to be well used. More than 6,000 calls have now been received and almost 3,000 job vacancies identified in the private sector. Throughout the summer, a number of programs for students were in place. Once again, the Ontario youth employment program gave jobs to tens of thousands of young people, getting them over the important summer period. The summer Experience program and the student venture capital program both operated well this summer, the latter program providing more than 850 loans for more than 1,000 young people.

Mr. Speaker, I would remind you that some of our programs in the youth package still remain to be announced. The Ontario youth start program is expected to be announced very shortly, and youth enterprise, which succeeds the student venture capital program, and the residential centres program are almost ready to be opened. They will make a vast difference, in our opinion, in terms of impact on our target group, which is disadvantaged young people.

While a detailed financial appraisal of the performance of the budget will be provided with the publication of the second quarter Ontario Finances, which will arrive within a few weeks, I thought I would take a moment this evening to provide members with that kind of overview of our budget, the economy's performance to date and the introduction of our youth employment programs.

Before I conclude my remarks, I should like to welcome to this forum and to the Treasury times in the House our new critic from the Liberal Party. The new critic will have sat through many debates of this nature and debates on the budget in this assembly over many years. I know my colleague the Treasury critic from the third party will join me in welcoming him to what has often been an informative, useful discussion.

I trust that once again this evening will prove to be an evening during which I will have an opportunity to receive some valuable and useful advice from my critics opposite. I have mostly --

Mr. Foulds: We do not have any votes in the convention. You do not have to flatter us.

Hon. Mr. Grossman: You probably do not have any ideas here this evening either. However, I am trying to welcome our friend across the floor. With that, I would welcome the participation of our Treasury critic from the Liberal Party benches.

I would suggest to him it might be helpful to kick off his reincarnation in this role, and a new life for his party, by overwhelmingly supporting this motion this evening, starting a new era of opposition support not only for this motion but also for its successors and for our 1985 budget.

Mr. Nixon: Mr. Speaker, I was budgetary and financial critic of this party when the Treasurer was peddling insurance to his relatives on Queen Street, as a matter of fact.

I look forward to debates with the member for St. Andrew-St. Patrick, with the critic of the New Democratic Party and with all members of the House. I think the Treasurer's expertise is very similar to that of the opposition who, as interested citizens, have been granted and given special responsibilities as members of this House to look after the prudent management of their affairs.

When I was critic before, the minister's predecessor's predecessor, back three or four generations, used to report surpluses to this House. That made budgetary criticism difficult, unlike the piece of cake being offered to us these days. In those days, the cabinet was considerably smaller than it now is.

Hon. Mr. Grossman: Your caucus was considerably larger.

Mr. Nixon: No, unfortunately, we had even more room in our caucus offices than we have now. However, there was a significant difference.

While there are always boosters in the Tory cabinet, those people who have never gotten over their Junior Achievement successes, it seemed to me there was always a Treasurer at the Premier's left hand and perhaps near him an Attorney General who were able to eschew the normal political responses, the normal booster speeches that their staff gave to them and they in turn gave to their staff. There was always the feeling that at least from the Treasurer, one could get it straight.

It is interesting to note that within a few weeks, the Honourable James N. Allan, a good friend of many of us here, will be celebrating his 90th birthday. During his years as Treasurer, I always felt he did not have to stretch, strain and twist himself grotesquely to put a good face on the business management of the government. He simply spoke to all of us more or less as fellow members of the board, and tried to discuss the actual business substance of the province without the blather that has come to be part of the budgetary statements of the present Treasurer and his immediate predecessors going back two.

He treated us to his very rosy view of the future. I hate to be relegated to a position where I too cannot wear rosy glasses. It is a rather select group here tonight. The Treasurer's fan club is in the gallery and behind him. Some of them were having dinner with the dentists tonight, and we hope to go next week. I am not sure what the debate will be next Tuesday night, but perhaps it will be even more enthusiastic than this one.

8:20 p.m.

However, my first piece of advice to the Treasurer is that he should give a more balanced impression of his view of the business that the province must face in the future to this House, to the community at large and to his colleagues who will be delegates at the convention in January. I can talk about the layoff of 2,500 employees of Massey-Ferguson Industries Ltd., the closure of Burns Meats Ltd. in Kitchener, and the closure of Black and Decker Canada Inc. in Barrie. I can talk about the unbelievably low prices for corn, beans, beef and pork. I can talk about the granting of Ontario Hydro rate increases more than double the rate of inflation. I can talk about wage settlements more in the five-to-seven per cent area, particularly five per cent for the Treasurer's own employees rather than the 2.3 per cent he refers to.

While he talks about the Conference Board of Canada and the various other prognosticators, I will just tell him that the fellows who sit around the gas stove at Earl's Shell Service in St. George have been right at least as often in their view of the financial future, and they think we are facing a very difficult winter and also a difficult spring.

If the Treasurer is fortunate enough to succeed in being chosen as the next Premier of Ontario, he may find that his long-range plans are somewhat warped when he looks next spring at how his predictions have turned out, particularly when he wants to feed them into other political decisions that will be on him or perhaps on one of his colleagues or some other Tory at that time.

I just feel that perhaps he should take a little more advice on the role of the Treasurer and be more balanced in his approach; we do not need a cheerleader. Perhaps when he talks to members of the business community to urge them to increase the amounts of investment they are thinking about for their own industry or in other industries that may be useful, but in here we want the straight goods. I just have the feeling that in the instance of this Treasurer, while I have great confidence in him personally and believe he would be one of the last to mislead the members of the House or the community, I still take most of his pronunciamentos with more than a grain of salt when it comes to the economic future of the province.

I was interested to read in the Toronto Sun today, for example, that there is expected to be a very large investment in Canada Savings Bonds with the interest rate that is offered. By the way, the Sun leaves the Treasurer batting .600 in the leadership stakes in a little box about whom do you want for leader. There are three for the Treasurer, one that says none of them is any good and one for the Attorney General (Mr. McMurtry). That is not a bad start, and we hope his finish is just as powerful. We will talk about that again perhaps later tonight or on another occasion.

In the story in the Sun, one of the small paragraphs pointed out that, for the first time, the employees of Ontario Hydro will not have the opportunity to buy Ontario bonds on the basis of a payroll deduction because it is too awkward and expensive to give them that opportunity. My own feeling is that Ontario ought to be using the same sort of approach to public finance that the government of Canada has used so successfully with Canada Savings Bonds.

Being a prudent and quite conservative farmer and parliamentarian, from time to time I put a few bucks in CSBs myself and I have found that those investments have always been good ones. Any time I put a few dollars into the stock market or something else with the very best advice, usually from my back-bench colleagues, the thing goes down the tube.

Many people have had the same experience I have had. When we see Ontario Hydro's credit reinforced by the credit of the province, I would say it really is time the Treasurer used his initiative to see that Ontario Hydro bonds were available in reasonably small denominations and in a very convenient way to investors in Ontario. Why should they not be allowed to take the same risks that investors in New York are taking in the investment in Ontario Hydro bonds? After all, they are backed by the province of Ontario, triple A for now, and we believe the citizens of Ontario ought to have a similar opportunity.

Perhaps I ought to predicate my brief remarks on this. We are voting $4 billion tonight. The Treasurer, with some dignity, said his officials had worked this out as an intricate projection of expenditure during the next two months. As I was sitting down here and as he was making his way in with his retinue around him whispering last-minute advice in his ear, I sat down and thought: "Well, this is two twelfths of the year. Let us round off our budget at $24 billion." So I guess we will be voting about $4 billion. We are both right or perhaps we are both wrong. We will see, but at least we are in the same ball park.

This money is going to be spent at a time when the leadership of the province is changing. The Premier (Mr. Davis) is in Florida going to football games. He is raising money for his successor down at L'Hôtel or in Ottawa or wherever. While he is going to be in here flailing around from time to time, essentially he has already quit. I do not blame him. He is a lame duck premier. His successor may be in the House but more probably his successor is sitting down at Bailie McKeough, looking through his sheets of Canada Savings Bonds that he is going to have to clip and cash in the next few weeks, looking forward to a middling expensive campaign.

This is a period of time when the transition is really taking place for those people who feel they are on the leading edge of the transition, like the Treasurer. I do not see any others in here. The member for Mississauga East (Mr. Gregory) may have it in his mind. I have been pushing the member for Scarborough North (Mr. Wells) for years but he will not respond. The member for Lincoln (Mr. Andrewes) has mentioned his own name from time. He has the looks for it, he really has, and that goes a long way, as the Treasurer will find when he comes to the campaign.

The transition is on now. I have a feeling that during the last decade plus three years we have got a bit soft around the edges. I do not say that simply to open up a vulnerable target for the Treasurer, but to imply that in this House on all sides the rigorousness with which we approach our funding of various programs has somehow become quite soft and, in my view, inadequate and approaching the unacceptable.

Here is a time when the Treasurer, who already has established quite a tough reputation in the House, in the community and among his colleagues, could take some rather interesting initiatives to harden up Ontario's reputation for being tough in budgetary expenditures and in our process for the controlling of these expenditures.

I have already indicated he might very well suggest that Ontario could embark on a public finance scheme using Hydro bonds, which are already the full responsibility, as far as credit is concerned, of the province.

Think how delighted the citizens of Ontario would be to buy those bonds in reasonably small denominations, at a guaranteed percentage interest, substantially in advance of Canada Savings Bonds. He might not be able to say they would be cashable on a moment's notice, but still they would have all of the backing of the government of Ontario.

They could be sold through the Province of Ontario Savings Office. This might cut into his bank support to some extent but after all, one wins some and loses some in politics. This is an area I would suggest he investigate very carefully indeed.

Our youth employment is a matter of some controversy. I am not going to occupy my time tonight in arguing with the Treasurer about the advantageous approach he has as an upwardly mobile politician in being able to flog this issue, along with the domed stadium and other very interesting, although there are other adjectives that could be applied, changing policy matters at a time of leadership decision.

I cannot understand why his colleagues in the cabinet would give him the domed stadium to fool around with just at the time when he is out searching for support in the community. Why it should be a part of the Treasurer's responsibility eludes me, although maybe he is the biggest fan of baseball or some other sport. It could be the Premier, who gave the member for Don Mills (Mr. Timbrell) the big advantage of being the Minister of Agriculture and Food, feels that he has to balance this up and that may be why that particular plum was tied on to the Treasurer's tree.

8:30 p.m.

As far as youth employment goes, the minister has put forward a number of arguments that everything is going well, but it boils down to the fact that there are more youth unemployed now than there were when his rather elaborate and expensive announcements were made at the time of the budget.

One thing that concerns me is a matter raised in question period today about Ken Dryden saying rather plaintively that he was forbidden by the minister and those who speak for him from making any statements to the press about these programs. The minister's response was: "Why should an employee like that be talking to the press about these new programs? After all, I am the Treasurer. I am the person who is supposed to be talking about these initiatives."

We know the Treasurer had the overall policy opportunity to do that during his budget. One of the most important announcements he made, far outdistancing any of the 10-point youth employment individual announcements, was the employment of Ken Dryden himself.

As with the employment of Dr. Chant and certain other high quality people from the community in the past, the electorate was immediately entranced with the idea of Ken Dryden, a noted athlete, a lawyer, an excellent author and a person who is well respected everywhere, working with the Treasurer in fostering youth employment. Is the Treasurer going to silence Ken Dryden and put him out in a nice office at the end of a hot line with three or four secretaries telling the young people who phone in, "There will be an announcement soon"?

If he is going to hang poor Ken Dryden out to dry, I think Ken Dryden is soon going to become disillusioned. To some extent, he may be disillusioned with politicians on all sides, maybe even on this side, because we have perhaps expressed more than the usual amount of suspicion that this program is largely hokum. It is largely the Treasurer's announcements. The figures do not indicate they are going to be productive, and we are looking for increasing difficulty in youth employment.

In fact, in his opening announcement the Treasurer indicated he felt the federal authorities would be more amenable to certain decisions that would foster the economic programs of this province. It seems to me that if he has such a direct pipeline to policy at the federal level, he might have persuaded his colleagues not to cancel the first chance program, which was already funded and established at the federal level. It looks to me as if the federal people, having won their election, have forgotten about youth employment and that it is left to the provincial Tories, and perhaps to the Tories in Nova Scotia, to talk about youth employment since they are coming up to an election.

It seems to me to be a pitiful approach to politics and to public affairs that it should be left simply as a political issue, rather than being seen as the sort of important issue that could well be left in the Treasurer's file, giving it the importance and immediacy I believe this issue deserves. It does not deserve to become simply a political football where the Treasurer insists on making all the announcements and basking in what reflected glory Ken Dryden can bring to the rather shady Treasury benches, at a time when they are trying to prepare themselves for an election under difficult circumstances.

There are two or three matters I want to refer to specifically that the Treasurer by his policy statement could, whether he imposes it as government policy or simply indicates that as Treasurer he believes in it, do as a service to Ontario and, incidentally, I believe as a service to his own future.

The first I would mention is an area of some, I would say, concern on all sides. One might refer to it as the practice that has been deeply established now in Ontario of double-dipping -- we might as well call it that because everybody knows what it is. These are the people who have graduated from sometimes long or sometimes intermediate service in the Legislature of Ontario, which has a reasonably good pension plan, and gone on to service at another level in Ontario.

They take their full pension allotment, which is very generous in most instances, and take their pay, which once again is generous. If I were going to list the figures and the names the Treasurer knows there are important people in all parties who would fall on that list. In my view, it is time that we as members of the Legislature assess where this is leading us.

The taxpayers should not have to pay the heavy level of salaries that goes with continuing service to the province as well as the pensions that have been earned. I do not believe double-dipping should be permitted at this time or any other time at any level of government. It would electrify this province if someone on the Treasury benches would say he agrees with this concept.

We are not thinking of going back and slashing away at those who are already partaking of this policy of the government, but we can say that from here on in anybody who works for the government does not get a pension until he ceases his work subject to direct payment. I do not know of any other business or operation that permits this, and we are not in any way talking about the inadequacies of the individuals involved. That is by no means a factor.

More and more it seems to me that whenever the press gallery wants to criticize us, one of the first things it turns to is this practice. It simply cannot be defended except on the basis that five, 10 or 15 years from now we as individuals may be in a position to be on the take ourselves. That is what I am talking about when I say it is time for us to toughen up the edges of our monetary and budgetary policy and do something constructive about it.

The second thing associated with this matter has to do with our election expenses legislation. The minister and his colleagues are clearly aware that I am referring to the practice of constituency associations gathering in very large balances in their election campaign funds. This is quite legal, but every one of those dollars is on the average subsidized to the extent of 75 cents by the electorate itself. In the case of the Minister of Agriculture and Food, who we are told has $235,318.60 in his constituency fund, the taxpayers have put in approximately $180,000 themselves, according to my calculations.

We can go down the list. In the case of the Treasurer, the taxpayers have subsidized the $61,204.93 in his campaign fund to the extent of approximately $45,000. The Minister of Education and Colleges and Universities (Miss Stephenson) is at just about $100,000, the Provincial Secretary for Justice (Mr. Walker) at close to $50,000, the Minister of Industry and Trade (Mr. F. S. Miller) at about $25,000, the Minister of Natural Resources (Mr. Pope) at about $14,900 and the Minister of the Environment (Mr. Brandt) at about $10,300.

We have to congratulate them for being so successful, but I remember reading that in the 1981 election campaign the Treasurer had to change the broadloom in his electoral offices twice to keep some of the extra money out of the way. I am quite surprised he is going into the leadership campaign with a paltry $61,000. I know these people, being influential ministers, simply have to half-close one eye and crook one finger and the money comes firehosing out of all the business establishments that in the past have done business with the government and in the future hope to do business with the government. We have to beware of this.

The members will remember the situation in 1974 and 1975 when it became apparent the government of Ontario was running a tollgate and the fund-raisers at the time, with the knowledge if not the consent of the Premier, were allowing huge amounts of money to go into the coffers of the Conservative Party. The business deals predicated on those contributions were there for all to see, and the buildings lie at almost every point of the compass that one would care to see as one stands on the steps of Queen's Park itself.

8:40 p.m.

Realizing he had to do something about this, the Premier decided he would bring in the election expenses legislation, which was very good legislation indeed, but now that it is almost 10 years old, we can see one of the major flaws in this legislation is that it permits huge balances to build up, particularly in the bank accounts of senior government ministers. It is quite clear those balances exist for one purpose only; that is, to fund leadership campaigns.

I personally believe wholeheartedly in the generous tax concessions --

Interjections.

The Acting Speaker: Order.

Mr. Nixon: As a matter of fact, I should have had the specific amount that is in the account of the Minister of Transportation and Communications (Mr. Snow), who is just entering the House, because those huge funds are not necessarily accruing only to those members who may be candidates for the leadership. They also accrue to those who lie back in the weeds and direct their largess and generosity in certain directions.

One has heard of these people who go to Woodbine racetrack and bet on all the horses. The Minister of Transportation and Communications has the resources, in more ways than one, to back all the horses; so he cannot possibly lose. I admire his generosity. When he opens up his premises at the end of the James Snow Parkway to the road contractors and payers, not only of Ontario but of blooming North America, and asks them to come and have a steak with him and a little red wine --

Hon. Mr. Snow: White wine is best.

Mr. Nixon: I was just telling you, Mr. Speaker, that the funds that go in there are heavily subsidized by the taxpayers. For every dollar that falls into the pocket of the minister's constituency association treasurer the taxpayers pay 75 cents. The minister could be elected if he spent $1,200, unless we bring back Robin Skuce to oppose him, and we are thinking of doing that.

Here is an opportunity for the Treasurer, who is a principal candidate for the leadership of the Progressive Conservative Party, to actually do what the Tory traditions say they do; that is, when they change leaders they renew their commitment to good public administration. Unless there is a change in this approach, it will be clear that the Treasurer and his colleagues who are contesting the leadership have lost that hard edge of public service and that the taxpayers are going to know about it and will have to pay the penalty in a broader, larger and more important forum.

He asked for advice and I am giving him the kind of advice that an individual who intends to become Premier of this province should take and consider very carefully. If he continues to stroke his colleagues and say, "What you are doing is okay; some of the people in the press gallery complain about it, but the public do not care," he will be wrong and his colleagues will be wrong.

Hon. Mr. Snow: What about Robin Skuce?

Mr. Nixon: We will show the minister when we resurrect him.

I know that others want to take part in this debate, but the Treasurer has specifically asked for advice. I want to close by expressing my concern, once again, that the Treasurer has not shown the sort of leadership that the Attorney General, for example, was talking about the other day.

The Treasurer has allowed the government of Canada, which was created, made and elected by the Big Blue Machine with its home here in Ontario, to follow on the old Liberal initiative of adding another per cent to the sales tax federally, with all the ramifications that has for Ontario.

It is easy for him to sit back and allow his friends in Ottawa not to keep their firm promise to reject that one per cent, because it is so easy for him to do. What makes it particularly easy is the manna in additional funds that falls into the Ministry of Revenue as a direct result of that. We have already seen that the beer stores and the liquor stores have to be closed for half a day to change the prices upward to take account of the additional revenue we are going to get.

The Treasurer made a commitment to the tobacco farmers -- and I know I am a voice crying in the wilderness in this regard -- that he would not increase the taxes on cigarettes. Yet we know that he still has tax on tax on tax and that the additional excise tax in Ottawa results in additional tax at the provincial level as well. Instead of taking a firm stand when his new colleagues in Ottawa just sloughed it off and said, "It is a small tax indeed and will have no ramifications of any significance," he sat back and did not do anything about it.

The suggestion came from the leader of the New Democratic Party, and I think it is a good one, that we in Ontario in response to the federal lack of leadership in this regard should at least have improved our sales tax rebates to take into account this extra money that has come without any action on our part simply because the federal government has increased the sales tax and with the ad valorem there are changes that automatically occur here.

There is one other matter of somewhat lesser importance that I want to mention. The Treasurer indicated that he was asking for two months only, pending the voting of supply, the implication being that when supply is voted the day before or the day after Christmas or New Year's, no further interim supply will be required.

I happen to agree with him; but I ask that he consult with his legal experts, who have been confusing this House for a good long time by indicating that even though supply is voted to the end of the fiscal year, they still like to have a motion for interim supply so that in case the amounts are variable during the time when the House is not in session, they will feel freer to raise the amounts expended for certain programs that were unforeseen.

I personally believe that once interim supply is voted, the usual flexibilities extend during the remaining three months of the fiscal year and we should not be put to the inconvenience of voting interim supply for the first three months of the next calendar year.

I bring this to the attention of the Treasurer since the House leaders, at our meetings when we are scheduling our work, have had a continuing discussion, not an argument, in this regard. I think we all agree that interim supply should not be required.

In closing, I simply want to say to the Treasurer that he has asked for advice and he will get it. This is not a thorough review of the budget -- I am not prepared for that; far from it. These are three or four things that would be tough to do but that, I say to him very seriously, he should consider doing.

We have not had that kind of leadership for more than a decade. We have had the other kind of leadership, which tends to round off the corners and which tends to telegraph to the members of the Legislature on all sides that we are not very careful about some of those matters and that what becomes a practice in a few individual cases becomes the norm within a year or two.

My own feeling, compared with when I was budget critic to some of the minister's predecessors, who are still our good friends and appear in the gallery on budget night, is that it is time for a very tough, independent and dedicated Treasurer; a person who, in the grand traditions of British parliamentary practice, holds himself somewhat independent, just as the Attorney General must hold himself independent, from his colleagues in the cabinet; a person who is at least one of the foundation stones upon which his colleagues and the government can build and who does not exhibit the kinds of flexibility in these policies that lead to the sort of House built upon shifting sands that cannot stand.

8:50 p.m.

Mr. Foulds: Mr. Speaker, I guess this will probably be the last time this Treasurer will be coming forward with a motion for interim supply.

Mr. Bradley: Is he retiring?

Mr. McClellan: One way or the other.

Mr. Foulds: First of all, let me say that we are going to vote for the interim supply motion. We certainly want to see the province run smoothly while the retirement and the fall of a dynasty take place over the next few months and perhaps years.

When we come back in December and vote the no-confidence motions that both the opposition parties have put on the budget, I am convinced it will be the last time we will see the Treasurer in his place as Treasurer. He will either be the Premier when we reconvene in the spring or he will have taken other opportunities in the private sector should he not get the golden ring.

Let me just say that whichever choice he decides to make, I personally and my colleagues wish him well.

An hon. member: A gold ring or a gold watch?

Mr. Foulds: A brass ring, is it not?

As this will probably be the last time we do an interim supply debate with this minister in this portfolio, let me just say at this point that it may be worth while to review the budget. I would like to do so in respect of one topic only; that is the topic of youth unemployment.

It was interesting that the headlines after the budget included the minister's 10-point program to tackle the problem of youth unemployment. It was interesting today that the minister himself was not quite sure whether there were 10 or 11 points in his youth employment program. It does not really matter. There are only six or seven substantive points in his program, and if we count the 10-point program, the one job creation program was the hiring of Mr. Dryden.

I think it is safe to say that with half a year gone after the budget, whether one looks at it for short-term job creation, for long-term job creation or in terms of actually hustling and trying to restructure the economy, genuinely attacking the problem of youth unemployment, this Treasurer and this budget have been a total and complete failure.

The fact of the matter is very simple. Ontario is failing its young men and women, 40 per cent of whom do not finish high school. Many of them are ill prepared for work, many are ill prepared for future and further technical education and most of them are unprepared for the cycle of unemployment and income support that awaits hundreds of thousands of them.

The response of governments at all levels -- this government and the federal government, both Liberal and Conservative -- has been chaotic. Special program after special program has been announced; some have even been created. Each has its own entrance qualifications, each seems to be focused on a particular narrow part of the problem and none has solved the problem.

On any scale the costs of youth unemployment are staggering. Moreover, it is abundantly clear that the present response, both of this ministry and of the federal department, is totally inadequate. Tinkering reforms, nickel-and-dime initiatives, make-work schemes, cheap gestures such as hotlines and short-term jobs in institutions simply will not be any kind of substantive or long-term answer.

As long as we fail to recognize that the unemployment and skills training problems of our young people are systemic and part of the present economic situation, we will continue to arrange and rearrange the chairs on the deck of the Titanic, which is what the Treasurer is doing.

Maybe we should pause to take a look and remember that economics as a discipline started out as a branch of moral theology. Maybe we should stop to think what the job of economics should be and therefore what the job of a Treasurer of a government should be.

The job of a Treasurer of a government should be to make sure the economy of a province serves the needs of the people of the province. He should not look at it simply as an accountant; he should not look at job creation programs simply as programs to switch numbers around and make them look better.

The job of a Treasurer is a most serious and heavy responsibility. The job of a Treasurer is to try to create in his jurisdiction the kind of economy that will serve the needs of its people.

In this case and in the case of our young people today this Treasurer and this government have totally failed. There are 156,000 young men and women unemployed in this province. Many of them have been unemployed for periods in excess of six months. In addition, the number of full-time jobs for young people has fallen by almost 9,000 over the past year or so.

More than 20 per cent of the population over 15 years of age in this province is functionally illiterate. What this means is that one out of every five Canadians -- and I assume the statistics in Ontario are the same; one out of every five Ontario adults -- is unable to fill out forms, write letters or even absorb the academic portion of most occupational training courses.

At the same time as 156,000 of our young people cannot find work in this province today, many thousands of our province's older workers are eager to retire and would be interested in retiring if they could be assured of a decent and adequate income. But because of the inflexibility in the way we order our working time and our working life and because of the inadequate and totally irrational pension and retirement provisions in this province, most of them cannot afford to take voluntary early retirement.

Any way you want to look at it, youth unemployment remains a serious problem in this province. In June the minister clearly stated that by September 1, 1984, there would be 100,000 new jobs for young people in this province. Today in this House he gets up and makes a statement at the beginning of this debate that the total number of new jobs in this province over the last year for young, middle-aged and elderly people is 42,000.

9 p.m.

The Treasurer has failed to meet his own specific, stated target. In June there were 1,013,000 young people working; in September there were only 891,000 young people working. Sure, a lot of young people went back to school. But the fact of the matter is that there were 122,000 fewer jobs for young people in Ontario in September than there had been in June, and there were 156,000 people looking for jobs.

Even if we want to use the statistical basis, the unemployment rate for youth in September is worse than the unemployment rate for youth in June. What has happened is that over the summer months we may have had a small and temporary blip, but when we get the comparison between June and September, which are fairly stable months, we have a much worse situation for youth employment in this province than we had in June.

I suggest it is the responsibility of the Treasurer. It is his duty, before he finally decides to throw his hat in the ring to run for the premiership, to finish his job as Treasurer and to bring forward a fall budget that would do something substantial to create both short-term and long-term jobs for our young people and for our older workers.

There has to be, in my view, a fundamental look at the social problems associated with youth unemployment. As to the very basic thing that is wrong, I want to quote from a speech given by Bishop J. A. O'Mara, the bishop of Thunder Bay, to the Salvation Army on April 26, 1984.

"Our society considers capital as the dominant principle of economic life. This orientation directly contradicts the ethical principle that labour, not capital, must be given priority in the development of an economy based on justice.

"Recently, my barber said to me, 'Bishop, we are making Indians out of our young people.' I knew what he meant even though I would not have said it that way. His point was that here in northwestern Ontario we see the results of government policy towards the native people. Having taken away their traditional means of livelihood when hydro dams raised the water levels and roads and timber harvesting drove away the animals, they were put on welfare and now, 20 years later, many of them have lost their purpose in life and their sense of accomplishment and the sense of responsibility that goes with it. In alarming numbers, they have become alcoholics, and violence and suicide and other forms of antisocial behaviour have become rampant in their communities and in our white communities too.

"Now our society is doing this to our youth. How long can a young man or a young woman look for work and not find any? Can they accept a refusal 10 times or 20 times? For a month, for a year or for several years? Dare we say to them, either the native people or our youth, that we can organize a truly human society without a need for their talents? It is my contention that it is not good enough to tell them to stay in school, to take another course or degree, or to say that they should not worry because the welfare net will look after them.

"Which of you would be foolish enough to say to your son or daughter, 'Do not worry about not working or accepting responsibility; I will look after you,' and then at the age of 25 or 30 or 35 expect them to be mature, responsible individuals? We grow and mature through the work that we do, through the challenges we meet, through the responsibilities we accept. Work puts order into our lives and gives us a sense of accomplishment too. Work, in some form or other, is necessary for human survival."

I believe very profoundly that we forge our identity as human beings, we forge our sense of worth, we forge our sense of what we consider to be our responsibilities to society and society's responsibility to us through the work that we do. When we have 156,000 young people in this province desperately searching for work, that is a total and abject failure on the part of this Treasurer and this government.

The budget was announced in May. The Speaker will remember better than most just how late that budget was, after many of us in the opposition pleaded for months that it be moved up so that we could get a decent start on the economy.

I actually went through, and have before me, the press releases issued by the Treasurer and his ministry after the budget with regard to the youth employment program. There was the announcement on May 15, which was the date of the budget, that outlined all of the wonderful works of the youth employment program. Two days later, on May 17, the Treasurer announced that Ken Dryden, author, lawyer and member of the Hockey Hall of Fame, had been appointed youth commissioner for Ontario.

On July 25, the ministry announced that the first stage of the new youth works program would create 3,000 jobs. The next statement on August 22, a month later, was that the new Ontario youth corps program would create 4,000 jobs. The next statement on September 24 -- these are a month apart -- was that the new youth program will create jobs in the tourist industry. No numbers were specified. Finally, on October 4, we had the announcement of the Ontario youth corps, stage two, to create 3,100 more jobs.

That totals, at best, 10,000 sure jobs, and an unspecified number in the tourist industry that have not even been created. Ten thousand jobs have been announced. That is a far cry from the minister's claim that there would be 100,000 jobs for youth created by September.

The timing of the announcements, the shape of the announcements and the substance of the announcements is so transparently shallow and thin that I suspect it has more to do with the timing of electoral success or political success than it has to do with tackling the deep-seated, tough problem of youth unemployment in this province.

If there is going to be a genuine attack on youth unemployment in this province, we have to have a government with some vision, a government with some courage and a government with some sense of the overall direction it wants the economy to take. It cannot do it through press releases. It cannot do it through one person as a youth commissioner, laudatory and heroic and a man of integrity though that youth commissioner may be.

We need a government that has the courage to make a three-pronged attack on youth unemployment. Number one, we have to have a government that has the courage to genuinely look at work sharing, shorter work time over the entire lifetime of the working members of our society and a voluntary early retirement, with the topping up of pensions so that becomes a reality. It is only through opening up jobs that currently exist that we will actually create what people call a lifetime job for our young people.

Number two, I believe the government must tackle the problem of import replacement. That is, we must create jobs in our economy in those industries for which we have a market in Ontario and Canada and for which we import supplies from outside the country. Let me give some quick examples.

9:10 p.m.

One is mining machinery. As the whole world knows, we are the third largest mining country in the world and we are the largest importer of mining machinery in the world. We could create 20,000 permanent, full-time, year-round jobs over the next 10 to 12 years in that industry alone, should we want to do so, by replacing the machinery as it wears out in the mining industry with machinery made in Canada.

We could do the same thing in the forestry industry and in the processing of our agricultural products. It is a scandal that so much of our processing does not take place in this country. We could also do it in medical supplies. I offer only four examples, but it is only by tackling those economic problems that we will actually create real jobs for the youth of this province.

Finally, the third suggestion I want to make to the Treasurer is that we must create specific youth programs, both short term and long term. We must do some of the things the Treasurer announced in his budget. We must do them, not merely announce them. Setting up counselling services and training programs across the province is no damned good at all if there are no jobs for those people to go to. I believe that is the greatest single failure of this Treasurer in this budget and I believe it will be the greatest single failure of this government as viewed by historians in the future.

Mr. Riddell: Mr. Speaker, I suppose it is standard procedure to vote in favour of interim supply so that the wheels of Ontario can continue to turn but, believe me, there are at least 350 reasons for not voting in favour of this resolution. I want to spend a little time talking about some of these reasons.

Much was said during the recent federal election campaign, by both the news media and the Conservative candidates, about the issue of political patronage. Let me tell you, Mr. Speaker, that the powerful patronage network of the Premier has firmly entrenched Tories in scores of key positions that control and influence the everyday lives of Ontario residents and cost the taxpayers of this province millions upon millions of dollars. We are actually voting here on a supply motion that will continue to pay these people who are what I call double-dipping in the public trough.

A study by one of my assistants has documented at least 350 patronage appointments, people who have been handed important posts in major decision-making bodies that regulate everything from liquor, to energy prices, to the arts. It might interest members to know that studies were also done by the Windsor Star, the Hamilton Spectator and the Ottawa Citizen and they documented 251 patronage appointments. One does not have to take the word of my assistant. One can be sure the three daily papers I referred to have not written something they cannot back up.

The 350 documented names we have on file include key Conservatives, such as former cabinet ministers and members of the provincial Parliament, defeated Tory candidates, party workers and, in some cases, their family members. Some of the biggest beneficiaries of Conservative pork-barrelling have been 75 former Tory MPPs and defeated Progressive Conservative candidates, nearly one third of the 256 men and women who carried the banner of the Premier into four elections. More than half of these appointments, 41 of 75, had been made in the three years since the Premier regained a majority in 1981.

For some, the patronage plum can be a double bonanza. For example, former cabinet minister Allan Grossman receives about $66,463 as chairman of the Criminal Injuries Compensation Board and a further $37,000 from his legislative pension. In other words, the Treasurer writes his daddy a cheque for more than $100,000 a year.

Among Tories now holding key positions is Lincoln Alexander, a former Hamilton area Tory MP, who earns $60,000 a year as chairman of the Workers' Compensation Board. He also receives an undisclosed indexed parliamentary pension. Gordon Aiken, former Parry Sound Tory MP, earns $57,000 as chairman of the Commission on Election Contributions and Expenses. He is also eligible for a federal pension.

Willis Blair, former PC riding president in the federal riding of Broadview-Greenwood, earns $61,000 as chairman of the Liquor Licence Board of Ontario. Bradford Bowlby, a one-time federal Tory organizer, earns $55,000 as chairman of the Assessment Review Court. Ross DeGeer, former executive director of the Ontario PC Party, earns $90,000 as Agent General at Ontario House in London, England.

Robert Macaulay, former Ontario Tory cabinet minister, earns about $75,000 as chairman of the Ontario Energy Board and a further $14,000 from his legislative pension. Bill McAleer, who is active in both federal and provincial Tory election campaigns, earns a $125 per diem as chairman of Ontario Place.

Robert McDonald, former Hamilton area Tory MP, earns $71,000 as Deputy Minister of Community and Social Services. John White, former Ontario Treasurer --

Hon. Mr. Drea: Mr. Speaker, on a point of privilege: My deputy minister's name is Robert McDonald. My deputy minister, previous to being a deputy minister, was an assistant deputy minister in the Ministry of Municipal Affairs and Housing. He was a federal MP for a number of years.

When he was defeated, he went to work in the private sector. Some years later, he won a competition for a civil service position in this government. I would ask the honourable member to withdraw the remarks about my deputy minister owing his position to patronage.

Mr. Riddell: The minister has his opinion about it, and I have my opinion.

Hon. Mr. Drea: Mr. Speaker, I must insist.

An hon. member: The minister cannot insist.

Mr. Riddell: Oh, don't give me the gears.

John White, former Ontario Treasurer, earns $120 per diem as chairman of the Ontario Heritage Foundation and also receives a legislative pension of $30,130.

Hon. Mr. Drea: Mr. Speaker, on a point of order: I have drawn the member's attention to a statement of fact. I would ask that he withdraw the allegations he has made concerning the good name and the professional reputation of a prominent civil servant, to wit, my deputy minister, who won his first position in this government in a competition, and subsequently advanced in the public service on the basis of his merit.

9:20 p.m.

Mr. Riddell: Mr. Speaker, if the Minister of Community and Social Services or any other minister says I have to come to this Legislature and agree with their points of view or their opinions, they are facing the wrong person. I do not have to agree with this minister or any other minister. I am simply stating facts. I am simply stating that the man was a former Tory MP and that he is now making $71,000 as the Deputy Minister of Community and Social Services. Now that is fact.

Hon. Mr. Drea: Mr. Speaker, if the honourable member is confining his remarks about Mr. McDonald to the fact that he is the Deputy Minister of Community and Social Services and what his salary is, which is a matter of public record, then I will accept that. But I think the honourable member, when he reviews what he read or what he said before, will no doubt want to expunge the remarks or connotations about Mr. McDonald from his statement, and I would appreciate it if he did so.

Mr. Riddell: If the minister is saying that the fact that he was a prominent Tory MP has nothing to do with his position as the Deputy Minister of Community and Social Services, then that, of course, is his opinion and he is entitled to it. But what I have said is certainly not contrary to any parliamentary procedure in this House.

Let me continue. John Yaremko, former Ontario Solicitor General, earns $60,000 as chairman of the Commercial Registration Appeal Tribunal and the Liquor Licence Appeal Tribunal and also gets a $35,000 pension. Walter Borosa, former executive assistant to the Deputy Premier (Mr. Welch), earns $48,325 as chief of protocol for the province. Terry Yates, former chief fund-raiser for Joe Clark, earns $25,000 as chairman of the Ontario Racing Commission.

Gerald Nori, former president of the Ontario Progressive Conservative Party, earns a yearly honorarium of $2,500, a $175 per diem and money for travel and out-of-pocket expenses as a director of the Ontario Energy Corp. Omer Déslauriers, who was defeated in Ottawa East in 1981, earns $88,684 in salaries and perks as Ontario's agent general in Brussels.

Ward Cornell worked on the Premier's leadership campaign in 1971 and earns $71,845 as Deputy Minister of Municipal Affairs and Housing. John MacBeth, a former Solicitor General, earns more than $60,000 as vice-chairman of the Ontario Police Commission in addition to his $15,400 pension. Edward Goodman, a key adviser to the Premier, holds the prestigious but nonpaying chairmanship of the Royal Ontario Museum. Gordon Thomson a defeated Tory candidate in Windsor-Riverside, earns $60,100 as a member of the Ontario Municipal Board.

Relatives of people well connected to Tories have also received appointments. Louis Alexopoulos makes $125 each day he serves as an Ontario human rights commissioner; his wife Tula is the Premier's special assistant on policy matters. Donald Misener was appointed the sheriff and local registrar of the Ontario Supreme Court in Perth county in 1982; his wife Colleen was the unsuccessful Tory candidate in Perth a year earlier.

Let me get a little closer to home. My predecessor, with all due respect to Charles MacNaughton, was appointed upon retiring from this place as chairman of the Ontario Racing Commission at $25,000 per year. He has since retired, but during that period of time and now he receives a monthly pension of $1,845.10.

Elmer Bell spoke at the Tory nomination in my riding. He got up and said how important it was to have a member on the government side, that we in Huron-Middlesex are tired of being the caboose. There was nobody more on the gravy train than Elmer Bell. Elmer Bell, a former PC organizer, was appointed chairman of the Ontario Police Commission at $55,000, and he has since retired and gone back to his law practice in Exeter.

William Stewart is a chap who works very hard against me every election. I understand he even appointed the candidate who is to come against me in the next election. He works very hard for those people, but he is a former Progressive Conservative member and he has been appointed to the board of directors of Ontario Hydro at dear knows what price, and he is chancellor of the University of Guelph, God bless him, and receives a pension of $2,802.56 every month.

There is Jim Britnell, the guy who ran against me in the last election. It is my understanding that Jim Britnell was promised he would get a Tory position if he happened to be defeated in the election. He got the appointment all right. He was appointed a member of the Environmental Assessment Board where he receives $175 per day plus expenses.

The members should listen to this and see if this is not a blatant abuse of taxpayers' money and political patronage to the nth degree.

Clare Westcott from Seaforth, a little town in my riding, a Progressive Conservative fund-raiser, executive assistant to the Premier at $76,000, was appointed to the Great Lakes-Seaway Task Force and the Canadian National Exhibition stadium board. He is expected to receive an appointment to the Ontario Police Commission now that the Premier is gone. That is Clare Westcott.

Clare has five children who have all been appointed to government jobs. There is Chris Westcott, son of Clare, appointed a special assistant to the deputy minister. There is Diane Westcott, daughter of Clare, given a job with the Ministry of Citizenship and Culture. There is Jan Westcott, son of Clare, appointed manager of special events, Ministry of Citizenship and Culture. There is John Westcott, son of Clare, appointed assistant to the chairman of the Liquor Licence Board of Ontario. There is Carol Westcott, daughter-in-law of Clare, given a job as special assistant in the Ministry of Education and Ministry of Colleges and Universities.

It would appear to me that if any youth in this province wants a job, all he has to do is declare he is a relative of Clare Westcott. Maybe that is the answer to youth unemployment in this province.

It annoys me no end to think this government can get away with all the political appointments in the world; yet the Tories were the ones who stood up during the last federal election -- Brian Mulroney commented on the 17 Liberal patronage appointments: "I say enough is enough. It is time for a change, time for new ways and a new Progressive Conservative government will bring precisely that."

Obviously, Brian Mulroney does not know what goes on in these precincts. If the people of Ontario knew how their money was being spent there would be nothing short of a revolution in this province, I am sure of it. The blatant political appointments that have been made by this government are absolutely nauseating.

The Treasurer wanted some advice. I am going to give him some advice. For years I have expressed the view that all governments, regardless of their political composition, should take a new approach to the appointment process by choosing the most competent and qualified individuals to fill positions, rather than simply rewarding political friends.

This is not to suggest that supporters of a government in office should be excluded from serving in appointed positions or should be denied the opportunity to do business with the government. It is clear, however, that fairness, good judgement and common sense should prevail when individuals are appointed to government agencies, boards or commissions, particularly in view of the fact that Ontario taxpayers are paying the salaries or honorariums of such individuals.

9:30 p.m.

I recommend that positions now filled through the political patronage system be subject to an invitation to the public to apply, and that those who are independent of the partisan political process be asked to review such applications and make recommendations to the government.

A committee of the Legislative Assembly of Ontario should, in my view, be empowered to review, comment upon and render judgement on all major appointments such as the Ombudsman, the chairman of Ontario Hydro and other important and highly paid positions. Since all taxpayers in Ontario pay the bills for such appointed positions and for business conducted by the provincial government, a sense of fair play would dictate that all taxpayers, regardless of their political involvement or affiliation, should be eligible to apply and to receive serious consideration based on merit, ability and competence.

When we form the government after the next election, we will do exactly that and political patronage will be right out the window.

Mr. Speaker: Does any other honourable member wish to participate? If not, the minister.

Hon. Mr. Grossman: Mr. Speaker, we have debated the kinds of issues that have been raised here many times in the assembly. It is appropriate tonight that we reflect on some of the information on how we are doing to date. I will not deny for a moment to the new Treasury critic of the Liberal Party that we are taking the opportunity, as we often do, to explain some of the brighter sides of our economic recovery.

It is a matter of concern to me that on my visits to the business community in the United States, New York in particular, predictions such as those of the Conference Board of Canada are always raised when I am there. Without debating the accuracy of my statistics and my predictions against those of the opposition or those of the Conference Board, I know the members opposite will share with me some measure of concern about potential investors, people assessing the strength of our economy, tending always to look at the predictions of the most pessimistic economic forecasters in the country.

On my last visit to New York, when I was speaking with some of the business communities there, we discussed this and they mentioned something very interesting to me. They said they have noticed a new phenomenon in Canada, that is, that economic forecasts in the last three or four years in Canada have received extraordinary coverage and attention through the media and by the public. Consequently, they are also read and talked about in the United States. They were commenting to me on how different this is from the American circumstance.

One of them said to me -- and I am talking about the most influential investment people in the United States -- that the equivalent prediction or forecast from an equivalent agency south of the border would make page 3 of the financial section in the New York Times, whereas when the Conference Board, in particular, makes predictions in Canada, they are front page news and the lead story on most of the radio broadcasts.

Mr. Wildman: The minister has to counteract them. Is that it?

Hon. Mr. Grossman: The member for Algoma (Mr. Wildman) has suggested we have to counteract them and that is exactly right. There must be a balance to that. I might also say that when we do counteract them by giving out our fairly objective forecast, and time and analysis will indicate that it tends to be a pretty accurate forecast the Treasury puts out --

Mr. McClellan: Until recently, yes.

Hon. Mr. Grossman: No, it has been fairly accurate. It is important that we take this opportunity, and I hope members opposite do -- and I suspect they do when they are outside of a partisan format such as this -- to say honestly, for example, to potential investors in their own constituencies and communities that the situation in Canada is not anywhere near as bleak as the Conference Board predicts.

The Conference Board, indeed, predicted a recession for this past summer. They are now suggesting the recession they predicted for last summer may occur next year. That prediction is based upon their assumption that interest rates are going to go up to the 16 per cent range and stay there for all of next year. We do not believe that and, to be fair, few forecasters do.

I want to say to the member for Brant-Oxford-Norfolk (Mr. Nixon) that in discussing whether we are talking too optimistically, I think it is important to keep in mind the need to put some perspective and some balance against some of the overly pessimistic forecasts that are out there, particularly those of the Conference Board of Canada.

Second, although it is the obligation of the member to criticize and suggest more ought to have been done, I would point out that in our budget, in terms of a clear analysis of our projections, the economy has clearly outperformed even our projections.

Obviously, I was here the day of the budget, the day after and the ensuing weeks when the main thrust across the floor was to say I was overly optimistic and that there was no way the Treasury forecast of 4.7 per cent for Ontario would be reached. We know now it is not just going to be reached, but it is going to be exceeded. We can debate here for some time with regard to how it happened, why it happened and who should take credit for it.

We are not here this evening to argue in a partisan sense who should take all or most of the credit. We will have another opportunity to do this, but in terms of how we performed over time, the kind of economy that has been built here, the constancy and resiliency of government economic policy, surely it is not simply an accident that Ontario has recovered so quickly and is currently leading the rest of Canada.

This is far from suggesting the job is done. Our unemployment is still far too high. Youth unemployment remains a serious problem. I want to discuss this for a moment. Again, we will have lots of opportunities to discuss the youth unemployment issue. To put the numbers in some perspective, and there have been some liberties taken with the statistics in the House the last few days, the fact is the labour force goes up every summer. It goes up significantly.

From May to August this year in Ontario it went up almost 200,000. In that same period of time the unemployment rate went down. This indicates more and more people were being employed. This indicates the jobs we predicted came. Some of them were not needed when the young people returned to school in the fall.

I must admit I sometimes think it is only an exercise in debating to try to figure out which set of comparative statistics give a good view on how well we are doing. In order to fairly balance the record, I should like to point out to my friends opposite that youth employment fell in September on an unadjusted basis, which is the way they are measured, as it always does. Obviously, this is for the simple reason that students leave their summer jobs and return to school.

Therefore, if one wants to take the year-over-year figures when young people have returned to school in both years -- a fair analysis, I would suggest -- one would find that from September 1983 to September 1984 youth employment was some 13,000 higher than in the previous year.

Youth employment was substantially higher this summer compared to last summer -- again the relevant kind of comparison. There were some 41,000 more young people at work in August 1984 than in August 1983.

I must repeat this every time we discuss this issue. I think it is important to remember that youth employment programs have been tried in every jurisdiction in the world. Ontario's youth unemployment rate is relatively low compared with most industrialized jurisdictions. It is still too high to make any of us comfortable. If any jurisdiction had a simple solution to youth unemployment, then obviously it would have adopted it and we would have adopted it too. The simple answers are not there.

9:40 p.m.

What is there, though, are some longer-term programs to try to get to the heart of the youth employment problem. As I have mentioned before, the heart of it is the fact that 20 per cent of our young people comprise 50 per cent of all of our youth unemployment.

What we have done is to focus our programs for those employment-disadvantaged young people. If the members would just contemplate that circumstance for a moment, they will realize that by "employment-disadvantaged" we are talking about young people whose families do not have a history of work, who come out of environments that are not conducive to work, who generally speaking have little or no education and who do not have job opportunities available to them. They have not learned work habits.

When we are dealing with that kind of program and with those kinds of young people, the core of the youth unemployment problem, we are not going to change those young people overnight. A summer employment program is not going to help cure that disease in the long term. A series of programs has to be implemented and has to mature before the young people who most need that education, training and opportunity find themselves able to take a job that we can offer them through our youth employment counselling centres and other programs.

I make no apologies and am proud that our youth employment programs will have long-term impact, not short-term impact. I feel it would have been cheating our young people to take the $160 million and spend it simply to recycle more advantaged young people through short-term job creation programs. These might have allowed me to stand here this evening, but not next year, and say the unemployment rate is a little bit lower. That would have been misleading and unfair. What we are doing is tackling the heart of the problem.

I fully intend to keep to that strategy. That is the only way to tackle this problem in the longer term, else I and my successors will simply be standing here with a yearly renewal of a three-week, three-month or whatever it is youth employment program, which will really be fence painting or filing papers in a government office.

Mr. Wildman: Stand tall, Larry.

Hon. Mr. Grossman: We all do on this side. I met the honourable member's opponent. He stands pretty tall, so the member had better be careful.

I have noted the contributions made once again by my critics opposite and would like to refer to one other point. The member for Brant-Oxford-Norfolk said the federal government had implemented the Liberal scheduled tax increases on October 1, and he was taking exception to the fact this government had not opposed those vigorously.

As one learns when one deals with budgets -- and I know he has for some time; indeed longer than I have -- budgets are comprised of the spending and the tax side, the spending and the revenue side.

With respect, to look at the federal tax increases absent from the spending increases that caused the federal government to determine that those tax increases were necessary to feed the spending and deficit plans of the previous government is unfair. They are obviously directly connected. The point we were raising last February and last March was not to pick one item out of the federal budget and say this tax or that tax was a mistake and should not be implemented. We were saying Mr. Lalonde and his colleagues had left themselves -- my very words, I think -- with little manoeuvrability, little flexibility because of what they had done previously. They had no option in terms of the taxes they had to introduce last year and the year before.

I do not agree with them. More fundamentally, I do not agree with the careless, flagrant spending excesses that caused both the huge deficits at the federal level and the tax increases necessary to keep it from the brink of bankruptcy. That is the reason those tax increases cannot be dealt with in isolation from the other steps taken by that government, a late but not lamented government in terms of the things it did that caused both the deficits and the tax increases that the new government felt had to be maintained.

That concludes my remarks except to say to the now departed member for Huron-Middlesex (Mr. Riddell) that I understand his frustration, having promised for many elections now to achieve government benches and having been frustrated every time.

I think there are points to be made in terms of the general principles espoused by the member for Brant-Oxford-Norfolk. I do not happen to share those views. We must remember those people did not get bonuses and did not get gifts. What they got were pensions they had earned.

Mr. Nixon: We are not talking about retroactivity; we are not bothering with these people.

Hon. Mr. Grossman: Let me make the point. I did not interrupt the member.

These people earned pensions as if they were working for any private employer. They came to this government and paid out of their earnings into their own pensions funds. These are deferred earnings they put away for the day they left government, when they qualified under the retirement scheme and drew down the moneys they had paid in and invested so they could get a return on their investment and their employer's investment when they left employment under the voted-on and agreed-upon pension plan of this government.

Subsequently, they took employment in another area of public service. It is important, with respect to those at the federal level and provincial level, regardless of which party they belong to, whether we are talking about Stephen Lewis or Bryce Mackasey or any appointee of this government, to remember that portion of their earnings comes from their own investment in their future, pursuant to a previously agreed upon pension plan between employer and employee, both contributors to the pension plan.

It was earned. It was agreed upon, put away and invested and they are now getting the results of the earnings on their own deferred income. We cannot say to those people: "You paid in your income. You deferred your income. You did not take current dollars. When you retire and qualify, retire from that current employment with its risks and everything else, and then there comes an opportunity for you to get the pension you qualified for, paid in and earned, we will not let you have it if you continue to serve the public in any way whatsoever."

If we put in that policy, we punish people for wanting to continue to offer their expertise. Quite apart from the partisan dimensions and what the member would call the patronage dimensions --

Mr. Nixon: Partisan dimensions cut all ways.

Hon. Mr. Grossman: That is correct. It is a different issue, the issue of whether they should get their pensions versus whether they should get the appointment. We can debate that at any time.

The suggestion is that we should say to those with a great deal of expertise, a great deal of knowledge, many of whom I would say, and I am sure members opposite would agree, have served with distinction in their subsequent appointments, all of whom come from the three parties here and the three parties federally, "I am sorry you cannot have the pension you earned with your own dollars and the dollars of your employer, pursuant to your agreed upon plan, if you continue to offer your expertise to the people of this province or this country."

When one lists and reads and hears the names read out in a mean and demeaning way by the member for Huron-Middlesex, one may reflect on their political backgrounds, but if one takes a moment later and reads those names and reflects upon them, one will see there is a vast array of much-respected, much-admired expertise and knowledge being offered to the public by those people.

One could say there should be more members appointed from opposite parties. I understand that position. The point I want to make, in fairness to the people read from that list tonight, is that they are well-respected people offering a great deal of knowledge and expertise, working hard and serving well. The people who either appear before them or work underneath them will all say, almost without exception -- and I listened to the list -- they are making fine and excellent contributions to the public of Ontario.

I want to conclude my remarks by pointing out to the member for Huron-Middlesex, who, unfortunately, is not here to listen -- he does not listen, but he is not here anyway; I want to say a little bit about him and I wish he were here -- he can talk as much as he wants about the partisan nature of some of those appointments and about patronage. He can even make the point, although he cannot make it as well as the member for Brant-Oxford-Norfolk can. I disagree and I have just explained why. That is a fair argument to have. We are entitled to disagree on it.

However, he demeans, with respect, every member, former member and appointee of this House when he indulges in nonsense and unnecessary cheap political junk, saying that the Treasurer of Ontario writes a cheque for $100,000 to his father. I am proud of my father's record in this House. It is a record the member and almost no one in his party will ever have.

Everyone who has appeared before him in his subsequent work on the Criminal Injuries Compensation Board will say without exception that he has been excellent in that service. The member, his leader and his Treasury critic know it. He has provided excellent and superb service to the people of this province in this assembly and at the Criminal Injuries Compensation Board.

One can complain about his salary and his pension, but one can do it with a little bit of class, distinction and fairness instead of sticking mud on everyone here and pretending that there is something wrong and distasteful about the fact that I happen to be fortunate enough to be Treasurer of this province, signing the cheques, and the fact that my father has been fortunate enough, good enough and has made plenty of sacrifices, so that he could sit in this chair for many years, and subsequently serve hard at age 73, giving all of his time and energy to continue to serve the public. I am proud of it and will not apologize.

Motion agreed to.

The House adjourned at 9:53 p.m.