Hansard Transcript 1985-Oct-25 | Legislative Assembly of Ontario

Hon. Mr. Peterson: I would like to direct the attention of the House to another example of this government's commitment to Ontario's cities. As members may recall, we promised while in opposition to help alleviate the problems created by the reconstruction of the Ottawa Queensway, or provincial Highway 417 as it is also known.

Various sections of this major cross-town artery have been tied up for the past two years because of the resurfacing and widening of the highway. The result has been heavy traffic congestion and frustration for Ottawa motorists. Most upsetting is the prospect that this work will be prolonged far beyond the original estimate.

I am very pleased to be able to inform the members today that we are taking tangible steps towards getting this project back on schedule. An additional $9 million in provincial funds will be allocated to the reconstruction to ensure the target completion date of the fall of 1988 is met, a goal that would be otherwise impossible to achieve. This extra funding will eliminate delays resulting from supplementary work being added to the main series of four rehabilitation projects on the stretch of the Queensway running from Maitland Avenue to Alta Vista Drive.

We clearly recognize that the work on the Queensway is both complex and time consuming. However, we have made a commitment to the people of Ottawa to see that this project is completed in a reasonable time and we are determined to meet that commitment, as we are with all our other commitments.

My colleague the Minister of Transportation and Communications (Mr. Fulton) is in Ottawa today to meet with local officials and make public our decision to contribute additional funds to the Queensway. Ministry officials have put considerable time and effort into making sure this project is restored to its proper priority, and they should be congratulated.

I believe this is a significant step in our efforts to meet the transportation needs of the Ottawa area and that it clearly demonstrates Ontario's recognition of the important role played by Ottawa, not just as the nation's capital but as one of this province's leading cities.

ANNUAL REPORT, ONTARIO PROVINCIAL COURTS COMMITTEE

Hon. Ms. Caplan: I am pleased to table the 1984-85 annual report of the Ontario Provincial Courts Committee. As the members of this House are aware, this committee was established several years ago "to inquire into and make recommendations to the Lieutenant Governor in Council respecting any matter relating to the remuneration, allowances and benefits for provincial judges."

Mr. F. S. Miller: Mr. Speaker, on a point of order: I came in a bit late. I assumed our side had a copy of the Premier's statement. We do not have one.

Interjections.

Hon. Ms. Caplan: Shall I continue, Mr. Speaker?

Under the very able chairmanship of Mr. Alan Marchment, this committee continues to deal with issues of vital concern to the administration of justice in this province. On behalf of my colleagues, I would like to extend our thanks to the committee members for their very helpful work.

I would also like to remind members of the House that the existence of this committee and the government's consideration of its various recommendations clearly recognize the principle of independence of the judiciary. We are committed to reviewing all items pertaining to judges' salaries and benefits in a manner separate from those of the Ontario public service.

In addition to the annual report of the Ontario Provincial Courts Committee, I have been asked to table before the House two sets of recommendations submitted by the committee. The first set of recommendations is dated September 9, 1985, and proposes several small adjustments to the transitional arrangements of the pension plan that were implemented in July 1984. These recommendations will be considered by cabinet in the near future.

The other set of recommendations, dated October 15, 1985, deals with the question of salaries for provincial court judges. This is the main focus of my statement today. The subject of salary increases for our provincial court judges has special significance for a number of reasons.

First, it is clear we must ensure that our judges are provided with reasonable remuneration, remuneration that recognizes the important role they play in our justice system. Our provincial courts are, after all, the primary point of contact with the justice system for most Ontario citizens. That is why the committee's recommendations on salaries were brought forward as a separate item for immediate consideration by cabinet.

Second, the decisions with respect to judges' salaries reflect the view of our government that it is not appropriate to link provincial judicial remuneration with federal judicial remuneration. In our view, this automatic linkage would relinquish our responsibilities to the taxpayers of this province by effectively transferring to the federal authorities the power to make decisions in this important area of provincial concern.

As the elected representatives, we are accountable to the people of Ontario and hence must retain the responsibility and authority for the allocation of our financial resources. In this regard, the government has decided not to accept the 1981 recommendation of the Ontario Provincial Courts Committee to establish parity between the salaries of provincial court judges and those of federally appointed district court judges.

The government has also considered the committee's recent recommendation for an immediate salary increase for provincial judges. As the committee points out, the last increase was effective April 1, 1984, more than one and a half years ago. While the committee's recent recommendation was for an increase to $80,000, the well-recognized need for restraint in the expenditure of the province's financial resources and, in particular, this government's commitment to fiscal responsibility, have led us to the decision not to accept this recommendation fully.

Instead, the government has decided to increase provincial judges' salaries to $75,000 annually retroactive to April 1, 1985, representing an increase of approximately 4.4 per cent. We believe this to be a fair and reasonable solution, given the current economic climate, and at this time will make Ontario's provincial courts judges among the highest paid of provincial judges in Canada.

In addition, I would like to stress that the complete compensation package of our judges will be reviewed on a continuous basis. This review will be done carefully and in the context of the total resources available to government. We look forward to receiving further recommendations of the Ontario Provincial Courts Committee on this important matter.

10:10 a.m.

In closing, I would like to say that the men and women who serve Ontario as provincial court judges have performed a difficult and important duty with integrity, dedication and ability. Our judges are among the finest anywhere, and we believe it is imperative that the quality of our judiciary be maintained now and in the future. The action the government has taken with respect to provincial judges' salaries demonstrates the government's commitment to dealing with this issue in an equitable and responsible manner.

NATURAL GAS PRICING

Hon. Mr. Kerrio: The government of Ontario is concerned about reports it has received on a proposed agreement on natural gas prices between the federal government and the governments of Alberta, Saskatchewan and British Columbia.

Under the proposed agreement, Canadian natural gas prices could be reduced to all categories of consumers in United States markets, small and large, by as much as $1 per 1,000 cubic feet. However, lower prices would be available only for a few large industrial customers in Canada, those who have the resources to negotiate their own gas purchase arrangements. As a result of this proposed agreement, Canadian gas will be sold to US markets for significantly less than Canadian gas will be sold to markets in eastern Canada.

This proposed agreement is an ominous sign that the federal government will not bargain vigorously on behalf of all Canadians in negotiations regarding trade in vital commodities such as natural gas. If the reports from the press are correct, Miss Carney has given away a great deal and received very little in return.

Ontario's position was outlined to Miss Carnet on October 17, 1985. We sought three basic changes: (1) a significant reduction in the Toronto wholesale price to reflect the surplus supply and falling prices in the United States, Alberta and British Columbia; (2) release of a substantial volume of gas from the current chain of distributor-TransCanada Pipelines-producer contracts, so that both price and volume can be renegotiated; (3) direct buyer-seller arrangements between industrial users and gas distributors on the one hand and natural gas producers on the other, with pipeline transportation available on a nondiscriminatory, cost basis.

It appears that the federal government has obtained agreement only on the third item, direct purchases. It is not clear that even these direct purchases will be permitted on attractive and competitive terms and with truly cost-based transportation arrangements.

We have repeatedly stated that under today's supply and demand conditions market-oriented prices mean lower prices. If the federal minister genuinely wants to get out of administered pricing, why is she delaying rather than letting the market work?

US spot prices for natural gas being delivered into interstate pipelines are currently as low as C$2.40 per 1,000 cubic feet; however, the Alberta price for Canadian natural gas is $3. US prices continue to fall, and informed observers are anticipating spot prices to fall below $2 per 1,000 cubic feet.

The natural gas price to industry within Alberta is also falling. We understand Alberta fertilizer manufacturers are currently buying gas for as low as $1.50 per 1,000 cubic feet. That is about one half of the Alberta border price. With transportation added, that is equivalent to a price of $2.75 delivered to Ontario fertilizer companies, rather than the $4.20 they are being forced to pay today. Under these circumstances, a reduction in the wholesale natural gas price must be part of any agreement that is to provide fair treatment for Ontario industries and consumers.

The federal minister has not been a forceful advocate for natural gas consumers. Moreover, despite prior assurances, she has not ensured that consuming provinces are direct participants in these important negotiations.

Shortly after I became minister, the federal minister wrote to me and invited Ontario's "active participation" in natural gas pricing discussions. She noted that "...70 per cent of natural gas sold in interprovincial trade is consumed in Ontario. Hence it is essential that your government's views are reflected." In that letter she also indicated that a working group of assistant deputy ministers of energy had been formed "to examine options and to make recommendations."

Despite this encouraging initial invitation, Ontario has not been permitted to be at the table to examine options, make recommendations or to reach agreements at either the officials' or ministers' levels. We have been ready and eager to participate constructively, but we have been excluded from these very important discussions which directly affect 1.5 million natural gas customers in Ontario.

Although the federal minister has declined to review her position with us, at her request I provided a summary of Ontario's position to her. I am releasing this summary today.

If the press reports are accurate, the proposed natural gas pricing agreement is a bad deal for natural gas consumers across Canada and it will have a serious, long-term, negative effect on the Ontario economy. Canada would be the only country that is reducing the price of its energy in export markets at the same time as it is freezing the price for its own citizens.

Mr. Speaker: Are there any other ministerial statements?

Mr. Guindon: Who made the arrangement?

Hon. Mr. Kerrio: Your kissing cousins.

Interjections.

Hon. Mr. Kerrio: Which side are you on?

Mr. F. S. Miller: You are on that side.

Hon. Mr. Kerrio: I tell you it is a nice comfortable feeling.

Mr. Speaker: Order. I called for further ministerial statements and there were not any.

Mr. F. S. Miller: Mr. Speaker, "there were not any" is more accurate than you know.

ORAL QUESTIONS

BUDGET IMPACT

Mr. F. S. Miller: My first question is to the Premier. I just thought of a name for this budget. It is a fine-print budget. It is like an insurance policy that never covers one for what happens because the fine print left it out.

Hon. Mr. Peterson: That sounded more like a used-car policy.

Mr. F. S. Miller: I thank the Premier for rising to the bait. He always gives honourable answers. I was never ashamed to work with my hands.

There were a couple of bitter lessons in this budget. I learned two things from this budget and they are both bitter. The government has jammed the brakes on the recovery that was so well under way in Ontario and it has ripped $800 to $900 out of the average family per year in this province.

Will the Premier agree with me that his government has learned from the MacEachen-Trudeau mould that one wastes now and pays later?

Hon. Mr. Peterson: I have a real problem understanding the question. Let me remind my honourable friend that the biggest tax increase this province has ever seen was in 1981 when we were in the midst of a recession, during the time the member was the Treasurer. How can he argue that today?

I have a real problem understanding where the opposition is coming from. Why does it not caucus this out, decide on its view, tell us and then we will have a discussion about it? I cannot respond to 16 different points of view to spend more here and cut there. I do not know what the member is talking about.

10:20 a.m.

Mr. F. S. Miller: I am so happy the Premier chose 1981. That was the year Mr. MacEachen's budget destroyed the economy of this country by going after every investment incentive we had. It turned out to be the worst budget Canada has ever seen, and the Liberals copied it yesterday.

I cannot say the Treasurer misled the house, but he certainly did not give accurate figures in the budget. Increases in spending are up by 9.5 per cent, not 7.8 per cent. The deficit is not $1,695,000,000; it is $2.8 billion. He showed us $6.5 billion in his working tables.

The key thing is that budgets are supposed to stimulate jobs. There are 386,000 people over 25 years of age in this province who need jobs, and he ignored them. What is in this budget for them?

Hon. Mr. Peterson: I am sure the member has read the entire budget. He will notice that our housing program has provision for 30,000 jobs and that 230,000 jobs for young people will be created by consolidating programs.

The member refers to the net cash requirements of $2.2 billion. He will note that is after our approach of taking a hard-nosed view of the assets. He will be very aware -- because I know he agrees with our position on Suncor and the complete embarrassment it was to him personally as the Treasurer and to the former government -- that we have now had to deal with those things.

That is in the past, of course. What he will see is that on a consistent accounting basis, the deficit has actually declined. However, we have taken a fresh approach. We have said we are going to present the books exactly as they are. The Treasurer has decided to look at the billions of dollars' worth of virtually worthless assets on the books and take a new approach.

Mr. Brandt: That is not true.

Hon. Mr. Peterson: Of course it is true. If the honourable member understood it, he would agree with me. I am sure the former Treasurer agrees with me.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Peterson: My friend should look at the discussion his own party has had about Suncor. My goodness, he has virtually admitted that what we are saying is right. We have taken a realistic view of this situation, and we are paying for programs we have brought in. It is going to create jobs. This is the finest budget this province has seen in 42 years.

Mr. Speaker: Final supplementary?

Mr. F. S. Miller: Is there not a question from the New Democratic Party? I can understand there not being a question from the NDP today. I was on the radio with their critic, and all he could do was say what great people you are over there, even though you are robbing the north and doing all the things that hurt.

I will change my last question to reflect what the Premier just said. He talked a lot about -- the words in the budget were "A Clean Slate" -- valuing the assets realistically and being consistent. Will he explain to me how he truly believes the shares of Suncor are worth zero and yet, on the same page, the Treasurer values Ontario Housing at $2.25 billion? There is no consistency in that budget except the spirit of revenge. He wanted to do just that.

Hon. Mr. Peterson: The Leader of the Opposition could be accused of ascribing motives to me. It is unparliamentary to say we want revenge. I do not want revenge. I am very fond of him. It is his colleagues who want revenge; not I. We are doing whatever we can to assist him, and he will always find 48 fine friends on this side of the House.

With respect to the specific question posed by the member, as I said before, we have looked realistically at the asset valuations in every area. There is some question about the value of the Suncor shares. Who knows what it is at this point? I did not want to remind him, but it is held by the Ontario Energy Corp., and under the existing schedule of payments, we still owe $420 million for the half of the Suncor purchase that was financed at 14.357 per cent; so we would continue to have to pay $420 million.

The member will agree with me that there is some question about the value of that asset. It is our view that we should attempt to maximize that recovery and get the most that is possible under the circumstances. We do not know what that is at the moment; we are having a valuation done, and we are looking for buyers. If the member has any specific ideas, I will be delighted to get his help. I have pursued any ideas he has had, and they do not exist; I should make him aware of that.

We are not interested in fancy paper transfers to inflate or deflate the values. We want to cut the losses for the poor, beleaguered taxpayers of this province, who are saddled with the loss of hundreds of million dollars that he walked into. That is how we are viewing it. The majority of people who understand bookkeeping and accounting admire the honesty with which the Treasurer has approached his responsibilities. He has taken a direct, hard-nosed business approach, and that is why this budget has success and I think this proves it.

Interjections.

Mr. Speaker: Order.

Mr. F. S. Miller: The reason the buyers may not exist is that now they are embarrassed to pay the fair price, since the government has said it is worth so little. It is exactly that, and it is exactly what I have heard from them.

Hon. Mr. Peterson: If the Leader of the Opposition wants to tell everything he knows, I invite him to do so, and then I will tell what I know and we will compare stories. Let him go ahead and tell us in this House.

Mr. F. S. Miller: I gave it to the Premier in confidence yesterday, and he knows it.

Hon. Mr. Peterson: Do not threaten me in public with it.

Mr. F. S. Miller: You are the one threatening me.

Mr. Speaker: Order.

AD VALOREM TAX

Mr. F. S. Miller: I would like to ask another question of the Premier, since he is in such fine spirits this morning. I recall during the election campaign the effect of promises, the wooing of voters and the impact it had on the average person who trusted and believed the Premier. He went around saying, "I oppose gasoline tax increases; I would remove the variable tax on gasoline," and yet he did it at the very time petroleum prices are going down in the world and replaced it with a fixed tax 10 per cent higher than the current tax yields. How does he justify that?

Hon. Mr. Peterson: It is presented in the budget. We said we would get rid of the ad valorem tax, and we have. We did what we said we would do.

Mr. F. S. Miller: Let me read the Premier's own words back to him because he did not keep the second part: "A Liberal government would vigorously oppose increased consumer taxes and higher gasoline prices without offsetting concessions to Ontario consumers." The Premier said he would have vigour. Let him show us that vigour. Let him show us the concessions. He should show us what he did.

Hon. Mr. Peterson: If the member will look across the whole budget, he will find offsetting concessions and reductions in sales tax. In that, he will find tax fairness and equity. What we have done is restored real progressivity to the taxation system in this province, unlike what the member's colleagues, his kissing cousins, are doing in Ottawa. We will have a truly progressive province where people will pay on the ability to pay, and we will finance our program. It is a great budget.

Mr. Rae: The Premier will recall the specific commitment to freeze the ad valorem tax. We agree with the Treasurer on the need for a tax on gasoline that is fair and transparent, one that people can readily see, but why did the government not simply translate the existing ad valorem tax into that tax today rather than increasing it at a time when many consumers are having difficulties affording it?

Hon. Mr. Peterson: The ad valorem tax on gasoline has been frozen since 1984. It has now been abolished. The Treasurer picked what he felt was a fair and reasonable level, and it will be fixed at that level, pending increases or discussions in this House, subject to legislation. There will be no sneaky, behind-the-scenes moves on taxation. We will come to this House and discuss them. Obviously, we must have the support of this House to do that. We do not believe in taxation by regulation. We believe in taxation by this Legislature, to which all fair-minded members will agree.

Mr. F. S. Miller: On those benches sits the first government in the history of this province that did not stand or fall on the acceptability of its budget bills, and that has to be remembered. The government could not pass them because it did not have the power to pass them. That is why it did not.

This government is taking money out of the pockets of everybody who drives. It is doing it through the driver's licence, up 60 per cent. It is doing it through the registration fees, up about 15 per cent. It is doing it through the gasoline tax, up 10 per cent. Is the Premier not worried about the average Ontario citizen, who has to drive 30 miles a day to work?

10:30 a.m.

Hon. Mr. Peterson: The philosophy of taxation was a progressive one. We think we have changed some of the onus and the burdens. We do not think they are onerous or burdensome on anyone, but are a fair, reasonable way to pay for the programs we have brought here.

Let me take my friend back to 1978, when the then Treasurer, one Darcy McKeough -- I am not sure what he is doing now -- changed his budgetary policy with respect to Ontario health insurance plan premiums under some pressure from the opposition. We all remember it. I do not remember the government falling on that.

We are going to invite fair-minded members of this House to participate in finding ways to address creatively the revenue requirements of this province. If the members opposite have ideas on how to do it, then I will be delighted to hear from them, However, they know the history as well as I do, and this is a very sensitive approach to the problems of making sure that we do what we do in the context of fiscal responsibility.

CAPITAL INVESTMENTS

Mr. Rae: I have a question for the Treasurer, who will know that a budget is not simply a matter of housekeeping or of housecleaning and who will know the incredible impact the recession has had on the people of this province. That is the crucial overall context for the Treasurer's budget, since he himself has said that 1986 will be a year of slower growth and that the job-creation potential of the Ontario economy will drop.

In that context, can the Treasurer explain why table 4 in his budget shows a decline of $40 million in capital investments in health care and social services, a decline of $13 million in general public works, a decline of $8 million in the environment and a decline of $2 million in education?

Looking to the future, looking to 1986, and looking at the incredible consequences of the recession, why does he take such pride in trying to reduce the overall capital investment proposals and projects of the government precisely at a time when it is that kind of leadership and that kind of investment in our future that is clearly needed -- by the private sector, yes, but by the public sector as well? Why has he cut that off at a time when it is going to be most needed?

Hon. Mr. Nixon: I want to deal first with the comment made by the honourable member about the declining rate of expansion. It is projected that the growth next year will be 2.4 per cent after two years of growth at a higher level.

We must remember the province was climbing out of the worst recession we had experienced in 40 years. As a matter of fact, the rate of growth was negative during at least part of that time; so the percentages are somewhat misleading in that we are coming from a very low or negative rate of growth to a normal status for this province, where there is real growth.

I am informed by the economists in the ministry that, at most, the province's economy can sustain a three per cent rate of growth, and they are projecting 2.4 per cent. We should not think of that as some calamitous rate; we should think of it as something that is positive and gives the economy buoyancy.

I should say directly to the leader of the New Democratic Party that we have decided a rational rate of growth for the basic costs of various programs is four per cent. We are hesitant to do that, because when our predecessors established some sort of guideline like that, people said, "That is the minimum; so we can angle and bargain and squeeze for more money above that."

Four per cent, we think, is a realistic rate of growth for the various costs of the recipients of transfer funds. However, beyond that -- and I bring this to the attention of the member -- we have established special funds that transfer moneys well in excess of that four per cent for capital and for the improvement of the quality of the education system; so the actual capital expenditures, based on our program, will be ample and substantial as far as the balance in this budget is concerned.

We believe we are supporting the economy not so much on a broadly based band but with specific programs. We have a program that in its second year will cost the taxpayers $200 million for the provision of job opportunities for young people under the age of 24; we are providing a special $100-million fund for northern development that is going to be spent over five years, and we have initiatives in the farm economy as well that we think are going to stimulate the broad base of the economy in an effective way.

Mr. Rae: All I will say to the Treasurer is that I am reading from his own budget and from the figures he has shown us. What he shows is an increase in capital investment of only one per cent, which is substantially below the rate of inflation. Were it not for the accord items we negotiated with the Liberal Party, it is very clear that the real direction of the Liberal Party would be all dressed up with no place to go, or possibly a few steps in reverse.

Specifically, I would like to ask the Treasurer, are the figures contained in table 4 correct? If they are not correct, what are they doing in his budget?

Hon. Mr. Nixon: There is no doubt the figures in the budget are correct; they come from the officials of the ministry. The officials were correct when they were advising the previous government, and they are correct when they give us figures. I can tell the member that the establishment in growth of our capital expenditure is suitable. It is balanced with the growth of the economy, and in that connection we feel they are adequate and the community is going to benefit from them.

Mr. F. S. Miller: When I listen to all this talk about fewer jobs next year, as predicted by the Treasurer, I fear he has missed a very fundamental point --

Hon. Mr. Nixon: Fewer jobs?

Mr. F. S. Miller: Fewer jobs than this year.

Hon. Mr. Nixon: On a point of order, Mr. Speaker: The growth rate for jobs will give us 108,000 more jobs in the coming year.

Mr. Speaker: Order. That is a point of view the member is giving.

Mr. F. S. Miller: At this point in our history, thanks to solid, sensitive Progressive Conservative budgets, there are more people at work in Ontario than ever before in its history. The Treasurer cannot refute that. Ontario led the rest of Canada out of the worldwide recession, and he cannot refute that. Sixty per cent of all the jobs in Canada were in this province.

Does the Treasurer not understand that jobs are created by people who make investments, that people who make investments are limited by the amount of cash they have to make them and that his budget tackles every one of those cash sources so neatly that there will be less investment and therefore fewer jobs?

Hon. Mr. Nixon: I do not apologize for the thrust of this budget in any way. I have already indicated that we believe we had to raise taxes to pay for the increasing cost of government and for the priorities this new government has put before the House. I will not repeat the list, other than to say it deals with jobs for young people, the farm economy, the development of the north and an adequate housing program, which we have never had in this province in the past.

On that basis, we are increasing taxes. That may be politically unpopular, but the money is going to fund new and improved programs. We think that is a good justification. It is also balanced between personal income tax and corporation tax, and it is for the benefit of our economy and of our people, particularly our young people. On that basis, I submit it is eminently supportable.

Mr. Rae: The eminence of this budget is a matter of debate, but I want to get back to this basic --

Hon. Mr. Nixon: How about the supportability?

Mr. Rae: The Treasurer should not be so edgy. He has been nervous all week. I say to him, just take it easy.

Hon. Mr. Nixon: Me, nervous?

Mr. Rae: Yes, the Treasurer is nervous.

Let me get back to a fundamental point that I think the government is going to have to address. We all know that, as a result of what has happened over the past number of years, we have had enormous human cost. We have had a growth in poverty as a result of the expanded recession. We have had a number of older workers set aside by the economy, and no job creation program has been designed to help those people. There is an agenda of economic investment that is as necessary as the agenda for social reform.

10:40 a.m.

Will the Treasurer not admit that the proposal for capital investments in transportation, health care and social services, general public works, environment, education, recreation and culture, and industrial and technological development shows a decline in real terms?

How does the Treasurer square that with the continued need for an attack on unemployment, when he himself is predicting unemployment of well over 7.5 per cent next year?

Hon. Mr. Nixon: If I am nervous, the honourable leader is excited. He is reading in detail from a table on page 46. He did not indicate that capital expenditures will be $2,278,000,000 for 1985-86, which is a huge investment of capital in this province. That will be $282 million greater than Ontario's net public and nonpublic borrowing and $19 million greater than last year's capital spending.

I wish it were more, but we have to make some decisions somewhere for moderation and balance. In this connection, the leader of the third party indicates only $1.3 billion for transportation. That is a substantial amount of money but a good deal of that is being directed to assist our municipalities, which have not had the support in providing for their roads and transportation facilities.

We are enriching that. We are not taking a shotgun approach. We are saying to the municipalities that we are supporting their endeavours in this regard. It reflects what I consider to be a new and valuable approach on this side, a spirit of partnership with our municipalities and our school boards that has been lacking. We are not going to do it for them. We are going to provide the funds to the extent we believe is possible, substantially improved from last year, and let them make the crucial decisions for the benefit of their own communities.

TAX EXPENDITURES

Mr. Foulds: As the Treasurer has indicated a number of times, one of his basic problems and one of the basic problems of any government in trying to deliver socially useful and economic programs is that they have to be paid for; the money has to be found. Can the Treasurer tell us how much lost revenue Ontario experienced in 1985-86 because of tax expenditures?

Hon. Mr. Nixon: In most instances we have reported the forgone revenue for any kinds of preferences that we have built into the statute. There is quite a list of them. The exemption for large trucking equipment, which does not pay sales tax, and other manufacturing goods is a very expensive exemption indeed. For the trucks alone, it is in the area of $35 million to $40 million. The sales tax that might have been collected on manufacturing equipment it is in the area of $150 million to $160 million.

I know the New Democratic Party has indicated interest and concern in this very appropriate procedure. If the member can give me a list of the exemptions that concern him, we will have our people calculate what those exemptions are costing the taxpayers.

Mr. Foulds: That is not exactly what we had in mind. In keeping with the Treasurer's stated aim in this paper of reforming the budget process and having more openness in the budget process and in government, why is he unable and apparently unwilling to be open and frank and publish a tax expenditure account? If I may say so, even Michael Wilson and John Crosbie were able to publish an account of their tax expenditures and make it open to the public and to Parliament.

Hon. Mr. Nixon: My, middle names are openness and frankness. The budget paper that was presented expresses the view I hold, which is that we must involve the members of this chamber in the preparation of the budget. It seems ridiculous that all the work should be done by the Treasurer and his colleagues, put before the Legislature and then the members of this House get involved only when the basic decisions have been made.

The thrust of the budget paper is for the establishment of a new committee of the House that would begin working in the fall with the Treasurer and his staff and with the people who want to advise the committee to come up with decisions that would be reflected in the budget. We still have a parliamentary system and those decisions are the responsibility of the Treasurer.

When it comes to reporting the costs of various budgetary preferences or tax preferences, there are many. I suppose we could report the cost of not having the nine per cent sales tax that was recommended by the Leader of the Opposition (Mr. F. S. Miller). If we had done what the Leader of the Opposition had predicted, we would have had another $1.2 billion. However, I do not really know the point of that.

Members should tell us the preferences that concern them. I will try to think of the ones such as forgoing sales tax on big trucks, where the amount has been reported. We will make that information available to the members.

I can assure the House there is nothing secretive. We are not trying to keep any information that would be useful to the public away from the public or from the members of this chamber.

Mr. F. S. Miller: I heard the Treasurer say his middle name was frankness. Remember, my first name is Frank and I put it up front.

Hon. Mr. Nixon: What is your middle name?

Mr. F. S. Miller: Stuart, for economy.

There is one tax expenditure, of which I was very proud, that the Treasurer eliminated. I would like him to explain it. I had a tax expenditure by having no sales tax on the Maple Leaf coin. That created jobs in northern Ontario. The Treasurer took the expenditure off it.

Mr. Foulds: Where are they manufactured? It is not in northern Ontario.

Mr. F. S. Miller: The gold comes out of the north; that is where the money is, not in making the coin but in getting the gold out and in having a market. The Treasurer gave in to South African pressure to equalize the tax on the krugerrand and he knows it. He had two options and he did not choose the one that would have helped Ontario. Now he will see the Maple Leaf coins bought through Quebec on a nontaxed basis.

Hon. Mr. Nixon: The leader makes a couple of very interesting points. The tax put back on the Maple Leaf coins is going to raise us something like $500,000 this year.

In large measure, the gold for the Maple Leaf coins comes from Ontario. If we were to leave the tax off, we would have had to take the tax off krugerrands. Maybe that is what the Leader of the Opposition would recommend.

My own feeling is the Maple Leaf coin is well established now, not only in Canada but in the United States and around the world. It is a taxable item. It is not a matter of a coin with which one can go to McDonald's and buy a series of hamburgers. It is an investment. Bullion can be purchased --

Mr. Rae: For 99 cents? Where have you been?

Hon. Mr. Nixon: Well, a 99-cent special you can buy with your gold coin.

As far as we are concerned, the alternative is an important one. We have decided to tax the coins and we feel it is appropriate. It will not interfere with the sale of the gold from Ontario mines. It will not interfere with this in any way.

Mr. Foulds: I would like to get back to the original line of questioning. Does the Treasurer try to tell this House that he has a commitment to an open budget process and yet deny this Legislature the tools with which that open budget process can take place?

The American Congress publishes its tax expenditure. The Tory federal government publishes a tax expenditure account. We publish all our other expenditures in this Legislature and in this budgetary process.

Will the Treasurer make a commitment before the next budget to publish the tax expenditure so we can examine it logically, honestly and critically, and so we can recover some of the $1.5 billion in lost revenue the ordinary taxpayers in this province will suffer because of this lost tax?

Hon. Mr. Nixon: The commitment I will make is that the budget paper on opening up the budget process should be, and I trust will be, debated either by the House or by a committee of this House. They can indicate what information is necessary.

I can assure the member and his colleagues that there is no intention on my part to withhold any useful or valid information that members on all sides might want to have and would request from me or my officials. It is wide open and we are quite prepared to give members our estimates or the specific information we have. We will make it available to the member as an individual or to an appropriate committee of the House.

10:50 a.m.

SMALL BUSINESSES

Mr. Brandt: I have a question for the Treasurer. Contrary to what our friends to the far left here believe, the best social program that a government could devise is to give someone a job. Recognizing that 90 per cent of all new jobs are created by small business, why has the Treasurer completely and totally abandoned the small-business community in this budget with respect to any assistance whatsoever to assist with the creation of jobs in this province?

Hon. Mr. Nixon: The member must know that the premise of his question is incorrect. Not only have we not abandoned small businesses, but we have many positive and innovative changes in this budget for their benefit.

For one thing, we are paralleling the federal initiative for the simplification of the reporting for small businesses. This costs us $50 million to do so. We are paying for that by tacking on half of one per cent in the basic corporation tax which does not even apply to small businesses.

They have their own special rate of 10 per cent. They get the advantage of the simplification, which costs us $50 million, and big business has to pay the cost through this additional half per cent. Big business has the same advantage of simplification, so it is justifiable to put the tax on that end of the spectrum rather than on small business.

We have also beefed up the small business development corporation program, which is a program of the member for Muskoka (Mr. F. S. Miller). It was a good program and we see no reason it should not be made stronger in the north and the east and broadened right across Ontario. We have made the development of software programs financeable in this way and we have changed it in other ways which will make it more readily available and supportive to the business community.

The list can go on, Mr. Speaker, and I know you are anxious to hear what the supplementary could possibly be under those circumstances.

Mr. Brandt: The Treasurer neglected to mention some of the things in that list that I could add. He has increased the tax on inventory for small business. He has increased the land transfer tax. He has reduced the number of trade offices that Ontario has to assist with exports that could very directly apply to small business.

The net result of what he has done, and he has admitted this in his budget, is that he has reduced the level of job creation achieved by this province, which was second to none in the entire country. Some 60 per cent of all jobs created in Canada were created in Ontario through the budget brought in by the former Conservative government which the present Treasurer criticized so vociferously over the past few months. There were 152,000 jobs to be created in Ontario during the year 1985.

In 1486, the year the Treasurer's budget takes effect and has an impact on the economy of this province -- the question, Mr. Speaker, which I know you are waiting to hear --

Mr. Speaker: I hope.

Mr. Brandt: -- the Treasurer will now create 44,000 fewer real jobs in this economy. The Treasurer should be ashamed of himself. How does he answer to that?

Hon. Mr. Nixon: The member must be aware that his selective reading of the budget has omitted the fact that while the unemployment level in the province today is about 8.1 per cent, admittedly too high but not bad compared to other jurisdictions, it is expected to fall to 7.7 per cent during the year he is so worried about. We are going to create 108,000 new jobs on the statistics alone, plus we expect to create an additional 30,000 jobs in the construction industry alone with our initiatives for housing.

There were many things he mentioned in his rather lengthy question. He spoke about us reducing the number of trade offices. The only one that is going to close is the office in Brussels, which is headed by a very well known defeated Progressive Conservative candidate, a very estimable gentleman. We are going to close that office, but we are going to reallocate the funds from any reductions in these offices in a different way.

The Premier, in a recent statement, has indicated that it is so. We are hoping that we are not only going to maintain our trading facilities but also improve them. That is a worthwhile project.

SOCIAL ASSISTANCE

Mr. R. F. Johnston: I have a question for the Treasurer of the Liberal reform government that we have over there.

As the critic for the Ministry of Community and Social Services, I am a little surprised that, after the years we have spent on this side hammering the Tories when they were over there about abandoning large sections of our community while we were going through a pretty tough depression and recession, the Treasurer has not learned from my report, The Other Ontario, or from the report of the National Council of Welfare of just a couple of days ago, about the increasing number of people below the poverty line and that he has refused to have a major increase in the rates for social assistance in this province at this time.

Why has he increased the rate by less than the rate of inflation? Why has he not made up for some of the deficit that these people have felt and the terrible travails that people are experiencing in Ontario?

Hon. Mr. Nixon: The honourable member hits me where it hurts. The four per cent increase is announced well in advance; it will take place on January 1. I cannot say I believe it is adequate or what we would like it to be.

I should point out something he is aware of, that we have ancillary programs. I was looking in the budget here to find them: improved access to child care; additional funds to assist young people, and particularly children, in families who are in receipt of this care; the housing programs, and so on.

The member makes the point on the basis of the four per cent. It does concern me that this is what we intend to do. The member also knows how persuasive the Minister of Community and Social Services (Mr. Sweeney) is, and he is doing an effective job. My understanding is that other programs associated with the needs of those people so aptly described are under way, and I hope they will be supported. In the meantime, however, the four per cent rate increase on January 1 stays.

Mr. R. F. Johnston: The reason we have so many ancillary programs in this province is that we have never given a basic, adequate income to these people, and I hope this government will recognize that.

The Minister of Labour (Mr. Wrye) -- who is not here today; he is ill, unfortunately -- when on this side of the House used to raise the inequity of the problem of disabled people living at a much lower rate of income than the elderly, even though they were going to need that kind of assistance for a long time. Currently, there is a $183-a-month gap between what a disabled person receives in this province and what an elderly person receives. The Minister of Labour always said a Liberal government would change that. Why have we seen nothing to address that inequity in this government's budget?

Hon. Mr. Nixon: This is the best we can do for now. We will try to do better. Somebody has just reminded me in a note that I should recall that we have beefed up the reduction of income tax at the low level to include 390,000 people. They are not quite the same ones described, but at least there is some indication of our concern for the low-income level. The three per cent surtax shows our interest in the other end of the spectrum; it will apply to people earning $50,000 or more.

The matter is of concern to us. I have listened to the speeches and participated in the debates to which the member refers.

Mr. Eves: Surely if the Treasurer could increase the deficit by approximately $500 million, he could find some money for the poor and disadvantaged people of this province. The Minister of Community and Social Services was quoted in the newspaper earlier this week as saying he was very hopeful there would be funding and some extra moneys for the handicapped and the mentally retarded in this budget. What happened to those moneys? What happened to his wish list?

11 a.m.

Hon. Mr. Nixon: I can respond to that sort of complaint from the New Democratic Party, but I find it a little difficult from the Tories, who have been the power that has kept these people trampled down for all these years.

The honourable member refers to increasing the deficit by $500 million, when in fact $305 million of that was to pay off this bad deal, Suncor, that his leader got us into when he was Treasurer. If that member had had the courage of his convictions then, he might have kept the government and his former leader from making a decision that was so bad for the taxpayers of Ontario.

LAND TRANSFER TAX

Mr. Gregory: I have a question for the Treasurer. His presentation of the provincial budget to the Legislature yesterday included a planned land-transfer tax increase affecting a significant number of Ontario citizens, more specifically, all home owners. Does the minister not agree that in the current rental market, with vacancy rates at rock bottom, he would not wish to penalize potential home owners who could alleviate this despicable situation?

Hon. Mr. Nixon: We thought it was time to bring the land transfer tax up to date. The only difference of substance was a new rate that applies a surtax on houses that are sold for more than $250,000.

I am concerned about those people. I have heard a question from the member's colleague about the poor people. I suppose it is a balance. He brings to my attention that we are putting this tax on people who are buying $250,000 homes. I feel it can be justified as a basis to pay for the programs we want to bring forward. There are probably more houses of that cost in Mississauga than there are in South Dumfries, but I felt the increase in tax was and is justified.

Mr. Gregory: It may come as a surprise to the Treasurer, but I can tell him that a purchase of a $250,000 home is not uncommon in the greater Toronto area, particularly in some of the areas where my friends to the left live -- in Cabbagetown and what have you -- in renovated homes.

Interjections.

Mr. Speaker: Order.

Mr. Gregory: I am talking about the Metro Toronto area, which comprises about 25 per cent of the population of Ontario.

Is the Treasurer aware that the proposed increase introduced in his budget yesterday would represent on the purchase of a $200,000 home, which is not an unrealistic figure in this area, a land-transfer tax increase of 21.4 per cent? On a $100,000 home it represents a tax increase of about 17 per cent. A $100,000 home is not exactly uncommon, but the tax on it is being increased at the rate of about 17 per cent.

This is rather a significant percentage in accordance with existing economic indicators such as the rate of inflation. In real terms this figure represents a total tax of $1,725 on a $200,000 home. That would be paid by the purchaser and with the down payment.

Mr. Speaker: Is your question, "Do you agree"?

Mr. Gregory: Does the Treasurer agree? Can he explain the implementation of these significant tax increases for the near-average home owner?

Hon. Mr. Nixon: I agree with the member that they are significant tax increases. We went over every source of revenue carefully and decided to bring the tax up to what we considered to be the appropriate level at this time. I am not going to indicate that I feel that people at the top end of the income spectrum do not feel tax increases as heartily as anyone else, but they have the ability to pay. We feel the land transfer tax has been graduated in a fair and equitable way so that it will meet its historic commitment to the payment of revenue in the province.

NORTHERN DEVELOPMENT

Mr. Martel: In his budget, the Treasurer deals with problems involving youth, but the Sudbury area and other parts of northern Ontario are totally different from the rest of the province. Is the Treasurer aware, for example, that in Sudbury, in the age group that is highly unemployed, one half of those unemployed are males, family men aged 25 to 44, and more than half the people who are on welfare and employable are from the same age group?

Can the Treasurer tell me why he did not put in a program -- I do not believe $100 million spread over five years is going to do it --

Hon. Mr. Nixon: That is my answer. It will. Do not give us that.

Mr. Martel: I know it will not. That is why I am trying to cut off the Treasurer's answer.

Can the Treasurer tell us why, knowing these factors, he did not do something in a more tangible way to resolve the problems of those one-industry communities in northern Ontario such as Sudbury?

Hon. Mr. Nixon: I agree with the honourable member that mentioning the problems of one-industry towns in the budget is not a sufficient response. However, in spite of the fact that he does not think it is good enough, I will say the $100-million northern development program is quite effective. It is twice as rich as the one we inherited. Maybe it should be bigger, but at least it has doubled. The big change here is that we have an effective minister applying it, a man from the north who even now is travelling in that part of the province.

The honourable member and his colleague the member for Nickel Belt (Mr. Laughren) came in with the municipal leaders of Sudbury and made the presentation that he pointed out. It really was surprising to me, and it was very effective in demonstrating that, while young people have a problem there, it is the basic work force that is suffering the high levels of unemployment and the depredations of the economic downturn that Sudbury has suffered probably more than any other area. I think the unemployment rate is from 12 to 14 per cent and arguments can be made that it is effectively higher.

One of the things we did, which was pooh-poohed a bit yesterday, was to introduce a new type of mining tax we think is going to be stimulative for the mining industry, which is the Sudbury industry. It does not mean one is going to walk out in the backyard of one's home and find some new kind of mine, but it does mean prospecting in northern Ontario should be stimulated. As a result, we hope hard-rock miners will have more jobs available to them.

There is not much we can do about the world price of nickel; that is a fact. The projections federally in the Macdonald royal commission are not that optimistic for these metals in the future. As a matter of fact, reading that is a bit depressing, but we feel the new approach to mining tax, after the John White tax that has really held the mining business down for so many years, is going to be productive and worth doing.

Mr. Laughren: I wonder whether the Treasurer really comprehends just how serious the deindustrialization of northern Ontario has been in the last 10 to 15 years. Why will he not make a commitment here and now to remove some of the processing exemptions currently in place, which allow, for example, Falconbridge to ship all its ore to Norway for further processing? Why will the Treasurer not remove that exemption so we can create meaningful long-term jobs, not just in Sudbury but all across northern Ontario?

Hon. Mr. Nixon: The Minister of Northern Affairs and Mines (Mr. Fontaine), who is even now travelling in northern Ontario, is the person who should respond to that. Certainly since I came into the House, 23 years ago, the arguments against that exemption have been put forward year after year.

It is interesting to note the Minister of Northern Affairs and Mines has not approved the exemption needed in the Sudbury area at the present time, I believe, but certainly will do so, because we have to keep the mining operation going. It also has to be a subject for the sort of long-range planning that should have been undertaken over the past many years.

For the honourable member to suggest that the Treasurer get up on this sunny Friday morning and say, "Yes, we are going to do it," is not totally believable, but it is a matter of which I am aware and I share the member's concern.

11:10 a.m.

Mr. Gordon: Is the Treasurer not aware that it is not a particularly sunny morning for those workers in Sudbury who are over 24 and up to 55 and 60 years of age who are jobless and for the other workers, too, in the rest of the province? There is a growing group of Ontario workers who are unable to find jobs and require retraining and reallocation money. The Treasurer did not pay any heed to those workers in the budget. This is going to be a dark, rainy weekend for them despite his forecast. What is the Treasurer going to do about it?

Hon. Mr. Nixon: In talking about the high levels of unemployment in the north, the honourable member is entirely correct. There was a time when Windsor, Brantford and some areas in the Niagara Peninsula shared that high level of unemployment. Those areas are still above the average, but it is the one-industry towns in the north, particularly mining, that are most deeply affected.

I simply say again that our initiatives in this budget include doubling the northern development fund and a new approach to applying it that has already been announced in the clearest possible way by the Minister of Northern Affairs and Mines, who wants to involve the communities in their own destiny in this way. We have provided a new Mining Tax Act. We have provided for medically necessary travel with the commitment of an additional $12 million, or approximately that amount. We feel our commitment to the economy of the north, while still insufficient, is better than the previous government showed in many years.

SOUTH AFRICAN WINES

Hon. Mr. Kwinter: I would like to respond to a question put to me yesterday by the member for Scarborough-Ellesmere (Mr. Warner). I want to assure all members that this government is committed to its opposition to the racist apartheid policies of South Africa. On August 14, 1985, we took the initiative of discontinuing the purchase of South African wines and liquors.

I would like to read from the statement of the Premier (Mr. Peterson) at that time, in which he said: "Instructions have been issued to the Liquor Control Board of Ontario that, effective at 12 noon today, no additional purchases of South African wine and other products will be made. Existing stocks will be sold off in accordance with previous practice." We are adhering to that policy.

In his question, the member for Scarborough-Ellesmere stated "this order was placed by the government of Ontario after it announced a ban on South African wines." I have checked with my officials and they have informed me that the last order for South African wines and spirits was placed on July 31, 1985. The shipment that arrived in Toronto recently is a result of that order.

Mr. Warner: It would appear the minister is not receiving correct information. According to the LCBO, it allows a maximum of a 60-day turnaround on orders. Since the ship left South Africa on or about September 15 and the shipment was received yesterday, it is clear the order was placed after August 14, either that or the whole system of ordering has broken down. Would the minister conduct a complete search? It is my information that the order was placed after August 14.

Hon. Mr. Kwinter: I am satisfied no orders for South African spirits or wines have been placed after July 31, 1985.

HIGHWAY CONSTRUCTION

Mr. Baetz: I have a question for the Premier. It relates to the statement he made this morning on the completion date of the Ottawa-Carleton Queensway. Is the Premier now admitting that his election promise to the people of Ottawa-Carleton and eastern Ontario -- I have a nice record of all those statements and promises -- to complete the Queensway long before the realistic target date of 1988 set by our government is just another one of his many broken promises?

Is the Premier now prepared to admit that our target date of 1988 was indeed realistic and that all his election talk was just what the announcement today is, namely, an exercise in poopery and dupery, and that he is not going to be able to reduce the inconvenience to Ottawa motorists --

Mr. Speaker: Order. I think the question has been asked. I am just not certain about that.

Hon. Mr. Peterson: I am sure that poopery and dupery must be unparliamentary, particularly for an honourable gentleman such as he. In talking about our commitments to do the things we said we would do, I must say I have spent a great deal of time in Ottawa, a community I have great respect for, a great Ontario community. One of the things I have sensed as I have travelled there over the years is that they were forgotten by Queen's Park, because I had the sense that historically the representation there has not been strong in pressing the case.

With respect to Highway 417, the Queensway, there was talk from the former Minister of Transportation and Communications, who is no longer a member of this House. I just read the other day that the former minister got a federal appointment, so he is looked after, and I believe another member from Ottawa got a deal to get a federal appointment, too. That leaves the member for Ottawa West (Mr. Baetz) here alone carrying the case.

They were talking about seven years to complete the Queensway, and then it was down to five years. We said we would complete it in three, and that is what we are doing today. We have honoured all of our commitments because of our profound respect for the people of Ottawa and Carleton and our commitment to eastern Ontario.

Mr. Sterling: I am so happy today to hear from the Premier that the Queensway is back on schedule. I am so pleased to hear that.

I want to question him, however. On June 13, I asked the former Minister of Transportation and Communications in our government about the progress on the Queensway. He replied twice in this House that the Queensway was on schedule. Can the Premier tell me what happened between June 13 and June 26? Did it fall off schedule then, or did it fall off schedule after June 26? Did the former Minister of Transportation --

Mr. Speaker: Order. The question has been asked. That is ample supplementary.

Hon. Mr. Peterson: I am not sure what this has to do with separate schools, but let me just answer the question more specifically. There were, as the honourable member knows, a number of statements from the former Minister of Transportation and Communications, because my colleague from the Ottawa area put a great deal of pressure on the minister at that point. The member will recall that and perhaps he joined in that. If he did, I give him a great deal of credit. I do not specifically remember the question the member asked in the House with respect to the Queensway, but if he was joining us to press the minister, I appreciate that.

The member will be aware that one of the original timetables was in the seven-year range, and then it was down to a five-year range. We have said that because of the massive inconvenience to the people in Ottawa and Carleton we would move quickly. We have done exactly what we have said we would do. My colleague today is in Ottawa discussing the details with regional and city officials. We have put an extra $9 million into that great corridor because we are committed to the economic viability of eastern Ontario.

I thank the member for his support of our position along the way. I think he is one of the reasons we have had such success today.

Mr. Swart: Mr. Speaker, I have a point of privilege at this time.

Mr. Speaker: What is your privilege?

Mr. Swart: My privilege relates to the answer given yesterday by the Minister of Health (Mr. Elston) in reply to a question about the ambulance workers, in which he stated that the settlements which were arrived at in other ambulance services in the province had been within the framework of three per cent. The actual transfer to Fleetwood Ambulance Service in Hamilton was 3.9 per cent.

Mr. Speaker: It appears to be a point of view to me. However, I would like to remind the member that if he is not satisfied with the answer of a minister, there is a proper procedure in the standing orders.

11:20 a.m.

PETITION

ROMAN CATHOLIC SECONDARY SCHOOLS

Hon. Mr. O'Neil: I have a petition that has been submitted to me by the grand knight of the Knights of Columbus council in Trenton, Ontario.

"To the Honourable the Lieutenant Governor and the Legislative Assembly of Ontario:

"We, the undersigned, beg leave to petition the parliament of Ontario as follows:

"Whereas it is the sincere expectation of more than 500,000 students and staff of the separate school system of Ontario and nearly four million separate school supporters in the province of Ontario; and

"Whereas it was clearly the intent of our forefathers to treat both sectors of our common school system equally; and

"Whereas this intent is evident in successive acts of the Legislature since 1841; and

"Whereas the rights of separate school supporters are now protected under the Constitution of Canada; and

"Whereas deviation from past practice has occurred within the last 20 years, whereby trustees of the nondenominational sector of the common school system have been given the right to administer secondary school education; and

"Whereas similar rights have not been granted to the trustees of the separate school sector; and

"Whereas the then Premier, the Honourable William Davis, on June 12, 1984, informed the Legislature that it was the intent of his government to empower Roman Catholic separate school boards to operate secondary schools for secondary students, commencing September 1, 1985; and

"Whereas this intent was unanimously supported by all parties in the House;

"We petition the Ontario Legislature to implement the policy on the funding of the completion of our separate school system without delay in order that it can applied on September 1, 1985.

"We further petition that this legislation protect the historic rights of Roman Catholics to maintain the special character of their separate schools."

This petition to the Lieutenant Governor is signed by 862 people in the riding of Quinte.

MOTIONS

COMMITTEE SITTINGS

Hon. Mr. Nixon moved that the select committee on energy be authorized to meet following routine proceedings on the afternoon of Thursday, October 31, 1985.

Motion agreed to.

COMMITTEE REPORTS

Hon. Mr. Nixon moved that an order be placed on Orders and Notices for the adoption of the recommendations contained in the 1984 report of the standing committee on public accounts.

Motion agreed to.

COMMITTEE SUBSTITUTIONS

Hon. Mr. Nixon moved that the following substitutions be made on the standing and select committees: on the standing committee on administration of justice, Mr. Warner for Mr. Reville; on the standing committee on procedural affairs and agencies, boards and commissions, Mr. Martel for Mr. McClellan; on the standing committee on resources development, Mr. Hayes for Mr. Martel; on the standing committee on social development, Mr. Reville for Mr. D. S. Cooke; on the select committee on the environment, Mrs. Grier and Mr. Charlton to be added; on the select committee on health, Ms. Gigantes and Mr. D. S. Cooke to be added.

Motion agreed to.

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

Resuming the adjourned debate on the motion that this House approves in general the budgetary policy of the government.

Mr. McCague: It is a pleasure to join in this debate today on the economic and budgetary policies of the government. As I mentioned to the Treasurer (Mr. Nixon) last week, we all in this House have had great admiration for his abilities, especially his abilities in debating issues over a great number of years. Those abilities overshadow greatly his ability in his new role.

I want to recite again a few of the Treasurer's own words when he was saying what kind of Treasurer he thought the province needed. These are his words: "a very tough, independent and dedicated Treasurer; a person who holds himself somewhat independent from his colleagues in the cabinet." I believe those are the minister's own words because they were recorded in Hansard.

As I said, we have all come to know the Treasurer very well. I do not believe he has followed through on this statement. I do not believe he was independent. He cannot write so well, I am sure. The wizardry, the creative writing that is in here, is outstanding, to say the least; it takes a few hours to understand it. I think the Treasurer was of the same opinion.

I cannot see any of the ideas that the Treasurer has espoused for two or three years in his own budget. I am not sure whether the Premier (Mr. Peterson) was supreme in all this, whether his colleagues were able to encourage him to do thus and so or whether it is a compilation that was dreamed up by his staff. It seems to me, from my days in Management Board, that the ideas that are included here were being floated around at that time. Maybe we can assume from that that it is a bureaucrat's budget and not that of the Treasurer we know. We know him to be a farmer, to be a man very interested in all his constituents.

Hon. Mr. Nixon: Outstanding in his field.

Mr. McCague: That is right. He stands behind everything he sells except the manure spreader. However, it does not seem the Treasurer was able to capture the mood of the people in his area.

As I recall, there are many tobacco farms in that area. While they are mentioned in here -- "The program will recognize the particular difficulties faced by the tobacco-growing sector" -- the difficulties are going to be answered by paying them something to leave the agricultural industry, as I read it. That is why I do not think it is the Treasurer's budget. He would have been more concerned about the people in his own area.

There are a couple of programs that the Minister of Agriculture and Food (Mr. Riddell) announced some time ago. Other than that, there is nothing in there for agriculture. I think that is very important in the Treasurer's part of the province.

I am sure the Treasurer is disappointed today, in that in all the documents that are printed, he starts off with a litany about how he has a realistic presentation. Very few people believe that today, but "A Realistic Presentation" is the first headline here. Then he goes to "Ontario's Investment in Suncor," "Ontario Land Corporation" and "A Clean Slate."

He thought the start of his budget, the initial writing, would attract all the attention. That has not happened. In regard to creating jobs, I will admit he has done a good job for youth, but what has he done for the unemployed and women? That seems to be a void, and it is an area he should have addressed.

"Helping Ontario's Farmers" -- we have covered that.

"Improving Access to Child Care" -- it seems he made a great decision to have 10,000 day care spaces. The fact is that there were 7,500 promised in any event. He has increased that by 33 per cent.

"Helping Seniors Maintain Independence" -- that is addressed by saying $11 million will be provided on an annual basis to strengthen support services for the elderly in our communities. What does that mean? I presume we will hear about that later.

Hon. Mr. Nixon: Meals on Wheels.

Mr. McCague: Meals on Wheels? That program is older than the Treasurer.

"Developing Northern Ontario" -- there is very little in here. What about his promise of a tax credit of $100 per household per year that he touted so wonderfully during the election campaign?

11:30 a.m.

"Small Business Development Corporations" -- there is some assistance but also a cutting-back of the rebates.

"Transfer Payments" is quite interesting.

"School Boards" -- I do not know what the Treasurer means when he says he is increasing general legislative grants by 5.4 per cent. I have not yet figured out how that relates to the fact that he is going to increase the percentage paid by the province from 47 per cent to 60 per cent. How does the 5.4 per cent work into that?

He has also made great note of the fact that he is going to give $107 million a little sooner to the school boards. On quick reading, one would think he is giving them $107 million when he is not. He is giving them a little bit of money, that being the difference between paying a little earlier rather than a little later.

"Hospitals" -- I have trouble with his musings on hospitals or on the Ministry of Health. For instance, the ministry's budget increased by $800 million from 1983-84 to 1984-85. The Treasurer is now increasing it by $600 million. What is he proposing to cut back? I do not think he can have an $800-million increase one year and a $600-million increase the next and still profess to be giving better treatment than before.

The Ministry of Tourism and Recreation I see he has cut back by $7 million.

Regarding the Ministry of Transportation and Communications, the Premier announced today that the Treasurer is speeding up the progress of the Queensway in Ottawa. The scheduling for that was worked out very carefully with the regions, which were happy. I do not know what kind of game the Treasurer is playing today, other than that perhaps the Premier was just announcing that the minister was in Ottawa today. That is the only thing I can see; nothing has changed.

This document, as I said, contains a lot of great prose, and that basically sums it up.

Personal income tax is up by four per cent. Corporation tax is up. Ad valorem -- a great move that was.

Hon. Mr. Nixon: I liked it.

Mr. McCague: I am sure the minister did. He took off the ad valorem tax and put on another form of tax, which is higher. He knows the general consensus is that fuel prices will come down. He was very clever. Had ad valorem stayed, the tax would have come down. He was not satisfied with that; he wanted the constant tax regardless of what the price was. He did accomplish that, and few people congratulate him for that.

The increase in licence fees is 40 per cent in some cases. It goes on and on.

I find it very difficult to be doing anything other than personally complimenting the Treasurer. I find his work in this area is quite sufficient. Maybe at some time we will get to the root of who it was that persuaded him to produce such a document. It is a unique document. It is the first time in more than four decades that a Liberal has presented a budget in this House. I would have thought, given that they had 40 years to think about it, that it would have been a little better.

Only a week ago, in the debate on interim supply, I told the Treasurer that we in the official opposition were looking forward with some anticipation to his first budget. I said we were looking forward to it because we believed the first budget would guarantee it would be the last Liberal budget for another 40 years. I would like to thank the Treasurer for his assistance.

Hon. Mr. Nixon: That is very unkind.

Mr. McCague: I would be less than frank if I did not say it was a major disappointment. It is a sorry day for the province when, in place of a coherent and comprehensive set of economic and fiscal policies, the government offers a hotchpotch of accounting hocus-pocus, half-baked programs and broken promises as this budget does.

The members opposite and their predecessors have had more than four decades in which to think about the programs and policies they would like to implement to improve the quality of life in Ontario. The results of their reflections as presented yesterday suggest they needed more time to deliberate. I trust we will be able to provide them with all the time they need when they next decide to face the electorate.

All the Liberal Party had to offer the people of this province was a chorus in creative bookkeeping with $754 million in tax increases, a larger deficit and a formula for economic stagnation. It must be a particular disappointment for those who voted for the Liberal Party in the last election in the belief that it would deliver on its many promises and commitments.

It must be a great disappointment for women to find that the budget contains no new programs to address their needs and interests. It must be a disappointment to those who live in the north to find that the budget offers so little to improve the quality of life and to diversify the economy of that region. It must be a disappointment to farmers to discover that the budget contains little that will help them stay in business or make it easier for new farmers to start in business.

It is certainly a disappointment to all Ontario taxpayers to find that the price of Liberal fiscal responsibility is $754 million in tax and licence increases at a time when the Liberal government has barely made a start on meeting its campaign commitments. Ontario's taxpayers must be asking, "If it costs $754 million to break promises, how much will it cost if they ever get around to keeping their promises?" I venture to say we may get the answer to that question in the spring budget.

I would think this budget would also be a disappointment to our friends in the third party. It demonstrates that their leader, the member for York South (Mr. Rae), may have been right when he suggested that if it were not for the accord, this government would be all dressed up with nowhere to go.

The budget demonstrates the truth of the adage about so-called good, new Liberal ideas: the good ideas in it are not Liberal and the Liberal ideas are not new. The only two identifiable Liberal ideas in the budget are ones not proposed by either of the other two parties in this House: to write down the assets of the province and to increase taxes. That appears to be the sum and substance of what passes for Liberal economic policy.

I do not mean to suggest the budget was totally bleak. The documents had their high points and highlights. The cover is very attractive. It is what is between the covers that we found disturbing. However, there was some good reading even there.

I particularly enjoyed reading the sections of the budget that indicated the economic and fiscal policies of the former Progressive Conservative administration had been an underlying source of strength in Ontario's remarkable performance over the past few years.

11:40 a.m.

I especially enjoyed reading the financial tables that reaffirmed the success of the PC government's deficit reduction strategy over the past two fiscal years. I know my friend the member for St. Andrew-St. Patrick (Mr. Grossman) must have been pleased to have a Liberal administration confirm the success of the measures he introduced in the budget of 1984.

I am sure the Speaker and those members who were present in the House at that time will recall what the Liberals and the New Democratic Party had to say about that budget. The member for London Centre (Mr. Peterson), who is now the Premier, called the budget a fraud and accused the former Treasurer of crafting an illusion. He certainly takes a back seat to our present Treasurer.

The former member for Rainy River said the budget's projection of 4.7 per cent real growth in 1984 was optimistic and the budget was based on extremely faulty assumptions and a great deal of quicksand.

The leader of the third party was also unkind in his assessment of our last budget. He said of the deficit reduction projection, "The miracle with the deficit takes the level of creative accounting to the level of absolute hokum," and that the then Treasurer was giving voodoo economics a bad name.

The 1985 Liberal budget confirms that what they called a fraud of a budget helped this province achieve a real growth rate of 6.5 per cent last year, well above the budget projection of 4.7 per cent which they regarded as too optimistic.

We also know that in the last fiscal year, that illusion of a budget helped this province attain an unemployment growth rate of 4.5 per cent, well above that experienced in the rest of Canada. We know that when the Progressive Conservative government left office in June 1985, there were 185,000 more people employed in Ontario than there had been a year earlier. We know that between June 1984 and June 1985, youth employment in Ontario increased by 18,000 while it dropped by 10,000 in the rest of the country.

The Liberal budget now reports that on the basis of the type of economic leadership this province has enjoyed in the past few years, Ontario is poised for a fourth successive year of growth. As for that miracle with the deficit, the financial tables confirm it turned out to be more of a miracle than expected. The deficit was reduced by $337 million relative to budget projections and by $587 million relative to the previous year's deficit.

These facts are known to all members. I reiterate them for three reasons.

First, they demonstrate the Liberal Party's comprehension of what constitutes good budgetary policy. Their understanding of the kind of policy needed to secure growth is seriously deficient. In my years in this House, I have never seen a better exercise in voodoo economics or in creative accounting than we were treated to yesterday.

Second, I mention these facts because, in my view, we in the Progressive Conservative Party can be justifiably proud of our record on job creation, economic growth and deficit reduction.

Third, I want to make it very clear to the members opposite that our record establishes the benchmark against which we and the people of this province will judge their performance and the efficacy of the programs and policies they have introduced in this budget.

Based on what they have presented in their first budget, they have made a poor start on maintaining that record, improving the very real accomplishments of the past and honouring the commitments they made to the people of this province.

I would also caution them that, while they assumed responsibility for a province with a well-managed public sector and a strong and dynamic private sector, they will be able to coast for only so long on the achievements of past administrations. When that time comes, I can only hope, for the sake of the people of this province, that they have more to offer in the way of economic leadership than they showed us yesterday.

I found the Liberal government's first budget to be a major disappointment, a feeling I suspect is shared by a majority of the people of this province who are aware of the event. While I am disappointed, I am not surprised that the government has done so little to improve the quality of life in Ontario. No doubt there are those who are disappointed and surprised that a party and a government that promised so much delivered so little.

Particularly distressing is the fact that the government has not lived up to its commitment to conduct its affairs in a fiscally responsible manner. As an example of this, I would call the members' attention to the significant increase in the deficit effected by yesterday's budget.

In fiscal 1985-86, the net cash requirements of the province will increase from $1.7 billion to $2.2 billion, approximately the level they were at in 1983-84 when the province was beginning to emerge from a recession. While we are told that this increase is attributable to extraordinary adjustments, I find it troublesome, perhaps because I question whether the write-down of certain assets, Operation Clean Slate and so on, are not more politically expedient than they are fiscally responsible.

In any event, I would suggest that any increase in the deficit during a period of economic expansion should be avoided. Increasing the deficit in a period of economic expansion will serve to reduce government's ability to respond positively and constructively in economic hard times. It was because the government of Ontario had managed its finances in a fiscally responsible manner that it was able to increase its deficit to fund programs to help the people of this province through the recession without undermining the fiscal integrity of the province.

I would not like to think the increase in the deficit associated with these extraordinary adjustments would deprive the province of that flexibility. As well, this $511-million increase in our net cash requirement ends the trend towards deficit reduction established in the last two years and of reducing our deficit in relation to the size of our economy.

Both of these facts may result in the loss of the province's triple-A credit rating, on which I will have more to say later. For the moment, I will say only that I hope this budget is not indicative of what the Premier meant when he said he would use the deficit as a creative tool.

I suppose the members opposite would argue that they have increased the deficit to create a clean slate and will honour their commitment to reduce the deficit in the medium term. It will be what they write on the so-called clean slate that will determine whether this government will be able to keep its promise of funding necessary programs without increasing the deficit.

While we are on the subject of clean slates, I think the member for St. Andrew-St. Patrick deserves our congratulations for correctly forecasting the inclusion of the clean-slate program in the budget.

Hon. Mr. Nixon: The member means that some creep phones him and then he gets up in the House and repeats it.

Mr. McCague: The Treasurer might not want that comment recorded --

Hon. Mr. Nixon: Record it.

Mr. McCague: -- just in case it happens to be a member of his staff.

Hon. Mr. Nixon: I am sure it was not.

1:50 a.m.

Mr. McCague: Who else knew about it?

The Deputy Speaker: Order.

Mr. McCague: I am certain it was not the sanitation experts from the city of Toronto.

They are running a tight ship over there in the Liberal Treasury, no doubt part of their effort to reform the budget process. Whatever my friend's abilities as a prognosticator are, for the average person, the Liberal government's use of the deficit as a creative tool has produced only a budget that is an accountant's dream and a taxpayer's nightmare: higher taxes and a bigger deficit.

In creating the clean slate on the way to increasing taxes and inflating the deficit, the Liberal government apparently invoked some of the mysteries of accounting not accessible to a layman such as me. As the Treasurer said of himself on Monday last, "I am not an economist or an accountant; I am not even a bean counter," so I will not pretend to be qualified to pass comment on the appropriateness of the methods employed in adding $500 million to the provincial deficit.

I did note in reading the budget, though, that the one extraordinary adjustment that had the greatest impact on the net cash requirements was the discharge of the Sun note obligation. This one item accounted for $305 million of a total of $518 million in extraordinary adjustments.

In total, the budget identified 19 items as extraordinary adjustments, of which only four are identified as having any impact on the net cash requirement. Of those four, the restoration of cash advances to school boards to the seven per cent level is the result of a policy decision by the government, and it is not clear to me why it is included on the list. In any case, we are left with either 14 or 15 of these extraordinary adjustments that have no impact whatever on the financial position of the province and must therefore be regarded as mere bookkeeping.

One has the impression that this budget is just so much busy work, that the government has so little idea of what to do in this budget that it simply decided to spend some time shuffling the numbers.

The only reason I mention this busy work at all is that I continue to be amazed at the way the government is trying to dispose of the Suncor shares. We are told in the budget that a review is now under way to determine the best method of dealing with the Suncor shares, that disposal options are being assessed and that the shares will be sold as soon as is financially prudent.

In the interim, I hope members of the government party will refrain from making the type of gratuitous comment we have heard in this House in the past few weeks, which does nothing to enhance the chances of getting a fair price for these shares. I would have thought it would be in the interests of the Liberal government to get the best possible price on the Suncor shares.

When they sat on this side of the House, I recall that they had a very simple formula for solving all the province's financial problems. When asked how to pay for programs, reduce the deficit and stabilize debt levels, the members opposite would chant: "Sell Suncor. Sell the land banks. Ban extra billing. Eliminate waste and inefficiency." The one measure they never mentioned, the one thing that never entered their vocabulary, was tax increases, yet that is the one thing they have delivered.

I recall that when the Liberal leader was asked during the spring campaign whether he would increase taxes to reduce the deficit, he replied that he did not anticipate any tax increases; rather, he anticipated some tax shifting -- as he said, shifting the burden in some ways by cutting taxes in some areas. Yesterday's budget again demonstrates the difference between the Liberal Party on the campaign trail and the Liberal Party in power.

Yesterday's budget shows that the tax shifting the Liberals were anticipating was an upward shift in the tax rate. Personal income tax has been increased by four per cent, or by two percentage points to 50 per cent of the base federal tax, beginning with the 1986 tax year. That is another $70 to $100 a year for the middle class. It will give them the opportunity to contribute another $26 million to the Liberal government this fiscal year and about $300 million in the next fiscal year.

I noted that while the Treasurer has expressed some concern about the fairness and impact of the federal government's capital gains exemption, his budget makes no mention of federal tax measures in the personal income field, such as the elimination of the federal tax deduction and modified indexation of exemptions and tax brackets. These measures, scheduled to come into effect in the 1986 taxation year, along with this government's increase in the provincial income tax rate, will guarantee the taxpayer, especially the middle-income taxpayer, will be in for a nasty shock.

As part of its tax-shifting strategy, the government has also seen rit to impose a three per cent surtax on Ontario income tax in excess of $5,000. Again, this measure parallels a temporary surtax of five per cent or 10 per cent, depending on income levels, imposed on high-income individuals by the federal government in its last budget.

The corporate tax rate is also on the rise and the public is being asked to pay an additional 12.5 per cent for vehicle registration and another 40 per cent on driver's licence fees.

Another example of this government's creative approach to revenue raising is the increases in the so-called sin taxes. The ad valorem system has gone, replaced by a fixed rate on per-unit sales of cigarettes, gasoline and fuels. Of course, the new rates represent an increase over the old rates, but that is the purpose of having new rates.

In the case of the gasoline tax, by abandoning the ad valorem system, the government has sheltered itself from any loss of revenue caused by the decline in the price of gas. The markup on beer, wine and spirits has gone up by 10 cents, a move which will be of real benefit to the hospitality industry for which this government professes to have so much concern. It was no doubt its concern for this industry which prevented the government from honouring its campaign pledge to eliminate the tax on accommodation.

To its credit, the government has met its commitment to exempt feminine hygiene products from sales tax. But then, perhaps overwhelmed by its own generosity, the government found it could not deliver on its promise to exempt meals which sold for $4 or less. It did, however, provide what I call the small-fries exemption for prepared foods which cost $1 or less. I call it the small-fries exemption because an order of small fries is about the only thing it will apply to.

Mr. Foulds: And coffee.

Mr. McCague: The bottom line is that instead of the promise of $192 million in annual sales tax breaks, it delivered $47 million in sales tax breaks over two years.

Somebody mentioned coffee. I would like to see whether establishments lower the price of coffee because of the generosity of the Treasurer. The members might let me know.

Mr. Foulds: It will not be taxed. They may make more coffee.

Mr. McCague: I am sure the member for Port Arthur (Mr. Foulds) is not holding his breath. These are but a few of the innovative revenue measures this government was able to devise after its 40 years of reflection on the finances and economy of the province. No doubt some of my colleagues and members of the third party will discuss these and other measures as the debate proceeds.

These new tax measures will net the government a total of $754 million in this and the next fiscal year. That is not enough money to start phasing out Ontario health insurance plan premiums and continue to fund necessary programs without increasing the deficit, to mention but two of the commitments the government made which it has still to honour.

It seems there may be more tax increases in the offing for the Ontario taxpayer. Having raised the personal income tax rate in this budget, can an increased retail sales tax rate be far behind?

12 noon

To this point, the Liberal government's commitment to tax shifting has succeeded in shifting more than $700 million out of the pockets of the taxpayers and into the Liberal Treasury. One might not mind paying increased taxes if they were being put to some socially beneficial use and were being applied in the public interest. However, there is nothing in this budget to indicate that will be the case.

The Treasurer told us his assessment of the existing revenue structure indicated it "was not adequate to meet the increasing cost pressures associated with providing services to the people of Ontario, within a framework of fiscal responsibility." I suggest to the Treasurer that the existing revenue structure is not adequate to meet the pressures associated with his party's exorbitant campaign promises and his party's commitment to its guardian angels to my left.

I suggest to the Treasurer that fiscal responsibility was the last thing on his party's mind during the last campaign, when it ran around the province promising the moon and the stars. I suggest to the Treasurer that if fiscal responsibility were a concern, it is a peculiar thing that promises which were fiscally responsible to make in April are promises he can break or postpone in the name of fiscal responsibility in October.

As I mentioned, while I am disappointed by the things that are in the budget in the way of tax increases and an inflated deficit, I know there are many others around this province who are disappointed by what is not in the budget. They have reason to be disappointed, because this budget does not deliver on at least $642 million worth of campaign promises. It does not deliver on commitments to health care programs, environmental initiatives, programs for women, resources development and the farm community. It does not deliver on promised transportation programs or small-business programs and so on.

No one, and I include the members of this party, expected the Liberal government to do all in its first budget, but they did expect, and the people of Ontario expected, that it would do something more than this budget proposes. As it stands, the only question we can sensibly ask about this budget is, which group in our society did it most disappoint?

Undoubtedly, those who looked to this government to honour its commitments on health care will be disappointed by this budget. As expected and as we predicted, this budget does not begin to implement the Liberal commitment to phase out Ontario health insurance plan premiums over a five-year period. The budget makes no mention of the OHIP premium issue or of any improvements to the premium assistance program. In this fiscal year, revenues from OHIP premiums will increase by about 3.3 per cent and cover about 18 per cent of the total health-care bill, as compared to about 19 per cent last year. This is but the continuation of a trend established over the past few years.

As noted, the budget makes no commitment to any improvements to the premium assistance program, let alone to an eventual phase-out of OHIP premiums. I remind the members that when this party was in power, it committed itself to a freeze in OHIP premiums and to an increase in premium assistance as it moved towards financing the OHIP system from tax sources less onerous to low-income families. Apparently, the government was not willing to go that far in providing a commitment to affordable and accessible health care.

The senior citizens of the province must also be disappointed with the new Liberal government. The budget speaks glowingly of that administration's commitment to meeting the needs of an ageing population and to revitalizing community care. Its accord with the New Democratic Party calls for a reform of services for the elderly. We are told the government is developing a longer-term support strategy. Its rhetoric is not supported by any significant action. The government has pledged $11 million annually, and we all recognize that will be stretched very thin over existing home care and homemaker services and programs.

Senior citizens must also be disappointed by the failure of the government to establish the denticare program it promised during the last election campaign. Perhaps when they assumed office, our friends opposite realized the $50 million they thought that program would cost was a gross underestimation, as we had been telling them all along, and its real costs would make it fiscally irresponsible to implement.

Another group which appears to have been forgotten in this government's rush to fiscal responsibility in the form of higher taxes and a bigger deficit is the arts and cultural community. When the Premier said in his ministerial statement that his government was committed to ensuring an arm's-length relationship with funded arts and cultural groups, I am not sure they were to take that to mean he would not go near them with a 10-foot pole. This government's commitment to the activities and programs of the Ministry of Citizenship and Culture is reflected in the fact that support for this constituency, which the Liberals in opposition long claimed was underfunded, does not merit a mention in the budget.

One thing which merits a mention is the government's commitment to a housing policy. We will apparently have to wait and see what that is. As in a number of other instances, the government is still in the process of developing an integrated strategy. This process is no doubt hindered by the fact that the minister responsible remains uncertain as to his party's position on a number of vital points.

In the interim, I suppose our friends in the New Democratic Party are relieved to find that, in the budget, the government took at least the first step towards meeting its accord commitments on housing. While 10,000 units over three years is not the immediate $100 million, 14,000 units in one year, as promised during the campaign, it must be taken at least as a good-faith gesture.

In the few details provided, it is difficult to determine how the government will encourage private developers to provide the 5,000 rental housing units called for in the budget. Over the last month, it seems one private developer after another has declared it will not be building any new residential rental units. For example, Bramalea Ltd. has said the government's decision to eliminate the 1976 exemption was at the base of its decision not to build any rental accommodation over the next 14 months. Also, I note three of the biggest private developers in the Peel region -- Bramalea, Shipp Corp. and Pagebrook -- have all said they will not get involved in any more government subsidy programs.

How the government will change their minds is not clear, but then very little is clear about this government's housing policy, especially with regard to rent review. I realize the Treasurer does not share that view. However, as has been demonstrated in question period in this chamber in the past few weeks, considerable confusion exists on the government's own benches as to what its position is on rent review.

12:10 p.m.

For the benefit of government members, I note in April their leader said quite plainly, "Under current conditions, rent review is here to stay." Now, given that the government has a Housing minister and is working on a housing policy for the purpose of ensuring that current conditions are not here to stay, the question may legitimately be asked, "Under what conditions would the government lift rent controls?"

If someone on that side could see his way clear to giving an answer to that question, it would go a long way towards reducing the level of uncertainty the government's various pronouncements and retractions have created in the marketplace. I do not see how the government can develop an integrated, long-term housing strategy until it addresses this pivotal issue.

While the government searches its soul on that matter, we will wait for the minister to fill us in on the details of these plans. The minister tells us he and his staff have been working late nights developing policy and programs. I suspect we will find, when these programs are announced, that they have been working late trying to repackage programs designed by the former government.

Another group the Treasurer managed to disappoint yesterday was those anticipating bold new initiatives in child care. The government tells us that the budget provides for subsidized spaces to accommodate an additional 10,000 children, as promised by the Premier. What the budget does not tell us is that 7,500 of those spaces had already been approved by the former government; nor does it tell us of the other commitments to child care initiatives made by the Premier last April that somehow did not make it to the budget.

Six months ago, the Liberal Party had a 12-point day care policy. Now the Liberal government has a two-point day care policy. Again we see the difference between the Liberal Party campaigning and the Liberal Party governing. Nowhere in this budget have I been able to find any mention of the promise to double the child tax credit, to establish a $6-million fund for working parents who do not qualify for subsidized rates or of the policy of contract compliance being linked to the provision of child care services.

I would also like to know what happened to the promise to provide a $5-million fund for special care needs and flexible rural care programs. It appears to have been subsumed under the general program. All in all, the budget commitments to child care seem a long way from both the Liberal Party's own platform and from the spirit of the accord with the New Democratic Party, which calls for the recognition of child care as a basic public service. The budget commitments also do not compare favourably with the child care program of this party, which includes such measures as a $10-million child care incentive fund, a $7-million, three-year training access fund and a $4-million rural care support fund.

Disillusionment with this budget is not limited to groups and individuals concerned with social needs. Groups and individuals who looked to this government to take action on the environmental, resources and community development fronts must also be searching for the reasons for this government's inaction on issues it had identified as priorities.

The Liberals have demonstrated a total disregard for our natural resources. They have not provided one new initiative or one new program, not even one new idea. This is not unusual or unexpected, at least by the members an this side of the House. We have known for some time that the Liberal Party is bereft of talent and ideas. For 40 years we have watched them steal most of their ideas and policies from the party to my left. It always seemed to me to be rather strange strategy, but the approach served us rather well; it kept them in opposition.

However, after their failure once again to get enough candidates elected during the May election to form the government, they used this strategy to wheel and deal a bargain with the NDP. Now that they have managed to get themselves appointed as the government, they have found that the ideas and policies of the poor, forgotten party to my left are not good enough to keep them in the driver's seat. Instead, they have found they must now borrow from us. Any new idea, initiative or policy contained in the Treasurer's budget that is at all beneficial to the people of Ontario has been derived from the programs and policies we initiated as the government.

The Liberals have decided to give the Ministry of Natural Resources an additional $3.7 million, once inflation is accounted for, in fiscal 1985-86. Some may applaud this move, but it pales in comparison to the additional funding my party committed in the speech from the throne. To provide for improved forest management and increased support for the sport fishery, we had indicated an additional $20 million would be made available to this ministry.

The Premier was vehement in his calls for more money for forest management when he was in opposition. In fact, during the election he promised that, if elected, he would provide enough money to regenerate every acre of cutover land in the province, more money for research and development and forest renewal, and more money for forestry programs at community colleges.

None of these promises was provided for in the budget. I can only assume that the Premier does not feel compelled to honour those promises since he was appointed and not elected. The only commitment to forestry this government has come through on is the appointment of a provincial forest auditor. I suppose the next thing we will hear from this government is that it will wait for the auditor's report before making any monetary commitment. For a party that was so convinced Ontario's forests were being raped and plundered prior to June 17 of this year, it has certainly lost since then its enthusiasm to remedy the situation.

There is not one initiative in this year's budget to provide increased assistance for other areas within the realm and responsibility of the Minister of Natural Resources (Mr. Kerrio). There is no mention of provincial parks, sport fishery, commercial fishery, wildlife protection, flood damage control and assistance, and water diversion. There is nothing. It is as if this ministry had vanished from the face of the earth.

Those who had hoped for more for our resources should not feel alone. The Liberals have also forgotten to do anything about the environment. Search as I might, I was unable to locate anywhere in the budget document the promised $30-million environment protection fund. I was also unable to find the promised $10-million fund for beach protection and sewage improvement projects. Nowhere could I find any extra money being allocated to help industries reduce their acid gas emissions.

The Liberals have even forgotten about their commitment to provide more money for the cleanup of the Great Lakes, as well as their professed great concern for the quality of our drinking water.

Mr. Sargent: Time.

Mr. McCague: When does the bus leave for Owen Sound?

Mr. Sargent: Pretty soon if the member keeps talking.

Mr. Andrewes: What is he doing here on Friday?

Mr. McCague: I will give the member a ride as far as Alliston.

I would like to remind the members that these were concerns which our party did not forget. In our throne speech, we pledged the following: $100 million for an environment protection fund; $20 million for a beach protection fund; funding for lake rehabilitation programs for lakes damaged by acid rain; increased fines for environmental offences; tighter control orders on Ontario Hydro and Inco emissions; the establishment of a shoreline protection task force, and increased funding for the establishment of a new investigations and enforcement branch in the Ministry of the Environment.

None the less, what I was able to find in this year's budget was a reduction of $8 million in the money allocated annually for capital expenditures on environmental projects, as well as a $21-million reduction in the amount of money available for loans for environmental projects. Correct me if I am wrong, but I cannot see how anyone can interpret these omissions and funding reductions by the Liberal government as a strongly demonstrated concern for the preservation and protection of the environment.

Hon. Mr. Nixon: Would the honourable member permit a question?

Mr. McCague: I thought the members opposite were the government.

Interjections.

The Deputy Speaker: Order. The member for Dufferin-Simcoe has the floor.

Mr. McCague: Yes. Would you please keep the Treasurer under control?

Again, I would console the anglers and hunters, the campers, the lovers of nature and the environmentalists by saying they are also joined by those who are concerned about our energy future. The Liberals seem to have forgotten all about their big plans to replace nuclear power with alternative, renewable forms of energy.

There is no new money provided in this budget for such an undertaking. When one accounts for inflation, the Liberals have actually reduced the amount of funding for the Ministry of Energy by $1.2 million. Programs are going to suffer. In my opinion, the government just cannot knock off that amount of money from a ministry's budget and still expect the same level of service to the public.

12:20 p.m.

In addition, the Liberals have decided to conduct a review of the functions of the Ontario Energy Corp., with the intent of divesting some of its assets. I fail to understand how this will assist in improving Ontario's long-term energy strategy. It has always been my understanding that the Ontario Energy Corp. is a proven winner. Through its activities, the corporation has enhanced the supply of energy in Ontario by investing in energy technology, conservation, research, exploration, development and production throughout Canada.

As I previously alluded to, the Liberals have also conveniently forgotten about their promise to sell Suncor immediately. However, I am pleased to see they have taken our advice and have admitted this promise was a big mistake on their part. In fact, I was particularly pleased to see the Treasurer borrow a phrase directly from the leader of our party, the member for Muskoka (Mr. F. S. Miller), in this regard by saying the government will sell Suncor only when it becomes financially prudent to do so.

However, I was very distressed to learn that the Treasurer has seen fit to raise gasoline prices by 0.8 cents per litre or 3.6 cents per gallon. I can recall the member for London Centre travelling across the province last spring decrying what he imagined were proposals to raise taxes on gasoline. At that time, he assured the people of Ontario that the Liberal government would not raise such taxes. It appears this was yet another promise to be broken.

Another group of Ontarians who have been forgotten by the new administration is the farming community. During the election campaign, the Liberals promised to spend one per cent of the tobacco tax revenues to develop new products and alternative crops to tobacco. The budget abandons this commitment and instead the government will spend money to pay farmers to get off the farm.

As you will recall, Mr. Speaker, the Minister of Agriculture and Food stated the tobacco growers would be pleasantly surprised by this budget. In my estimation, refusing farmers promised help and paying them to give up can hardly be called a pleasant surprise.

I am sure it will also come as a surprise to farmers, who are already financially hard hit, to see their taxes go up with the compliments of the Treasurer. The corporation income tax rate on income from farming is being increased by half a percentage point to 14.5 per cent, and personal income tax is to rise as well.

In short, there are no initiatives in the budget to give farmers what they really need: more markets and a better return.

The commitments made to a tripartite stabilization program by this government were actually made by the previous government. There is nothing in this budget to provide needed assistance for food processing and food storage, which are required to reduce our dependence on imports. There were programs in place for these initiatives until they were axed by the present government.

The Liberals have also failed to meet their election promise to establish an adequately funded program to address the ever-increasing problem of soil erosion. Similarly, the Liberals have not followed through on their pledge to double the agricultural budget to two per cent of expenditures, a pledge which, by the way, was made not only by the Liberal task force on rural municipalities in April 1985 but also by the Treasurer himself in September 1984.

Under the former Progressive Conservative government, $58.25 million had been allocated to agriculture through the Board of Industrial Leadership and Development over a five-year period. By cancelling BILD, the Liberals are denying Ontario farmers an average annual investment of $11.65 million. When we consider the fact that the Ontario family farm interest rate reduction had been announced by the previous government, which made this financial commitment to tripartite stabilization, the budget adds only $6 million in new programs, or roughly one half of the cancelled annual BILD money.

The Liberals have also forgotten all those who are dependent upon the tourism industry for their livelihood. Some may find it hard to believe that it would be possible to forget about a $6.9-billion industry which accounts for more than 300,000 person-years of employment and six per cent of the gross provincial product annually, but it appears the Liberals have.

The government, in some higher form of reasoning known only to it, has decided to reduce the budget of the Ministry of Tourism and Recreation by $13 million. When inflation is taken into account, this translates into a 12 per cent reduction. If a budget cut of $1.2 million for the Ministry of Energy means a lower level of service to the public, I shudder to think what a $13-million budget reduction will mean to the many worthwhile programs delivered by the Ministry of Tourism and Recreation. There are no new initiatives and no new moneys in this budget to stimulate any part of the tourism industry. The announced programs that will affect this industry will serve only to depress it.

The government's pledge to review and reduce expenditures on advertising will hardly help the tourism industry. Does the government expect tourism operators to use smoke signals to let potential clients know they exist? Also, I am sure the people in this industry are just overjoyed that the government has decided to raise the price of liquor, wine and beer.

Does the government really think the people from south of the border are going to be enticed? Not only will tourists have to pay more for their refreshments but they will also have to fork out more money just to travel within the province, thanks to the Treasurer's tax increases on motor vehicle and aviation fuels.

What has happened to the Liberal promise to eliminate the accommodation tax? It disappeared, I dare say, along with all the other promises, only to resurface during the next election.

In short, what this all means to the average tourist -- that is if he can find us at all -- is that once he gets here he can expect higher transportation costs, higher liquor prices and fewer services. I sure hope the Liberals do not try to rerun some of the old commercials in an effort to save money. In Peterson's Ontario the slogan "We Treat You Royally" seems rather inappropriate.

Last but certainly not least in a long list of those in Ontario who have been forgotten in this budget are those who reside in the north. Contrary to the obvious belief of the members opposite, there is indeed life north of Orillia. However, to be generous, there is only one member in their ranks from that part of the province; so it may have been possible for them to overlook this fact.

In all seriousness, of all the people who have been forgotten by this government, it is the northerners for whom I have the greatest amount of sympathy. They were the ones who were promised the most and received the least. If I may quote my colleague the member for Kenora (Mr. Bernier), yesterday was undoubtedly a black day for northern Ontario.

In April 1985, the Liberals went to the north, carrying with them a 28-page document full of promises for the north. Most of the northern residents did not buy those promises. My colleague the member for Fort William (Mr. Hennessy) tells me it is because northerners know when something sounds too good to be true. They are industrious and down-to-earth people, and they realize you cannot get something for nothing.

The Liberals' efforts to woo the northern voters failed, and now as a result they have abandoned them completely. The new administration has signalled this by decreasing the funds available to the Ministry of Northern Affairs and Mines. Taking inflation into account, the ministry budget has been reduced by $1.3 million.

The Liberals have also reduced the total amount of money available for northern development initiatives. They have tried to hide this by announcing a $100-million, five-year program for northern development, or $20 million per year, which on closer examination is substantially less than the commitment made by the former government.

The Progressive Conservative government committed itself to an expenditure of $20 million per year for the northern Ontario regional development program alone. This Liberal program is to cover all expenditures on northern development, including Nordev and the mining development program.

The announced changes to small business development corporations for northern Ontario are simply a follow-through on our previous commitment. This is nothing new or anything like liberal.

Similarly, the proposed changes in the Mining Tax Act are changes that we had reviewed and forwarded. The Liberals have brought in one idea of their own, however. Transfers to municipalities by the ministry have been reduced by more than 50 per cent.

12:30 p.m.

Additionally, not only will those who live in the north receive less, but they can also expect to pay the government substantially more. All those who derive income from mining, fishing and logging will be paying 0.5 per cent more in taxes. The increased taxes on motor vehicle and aviation fuels will have a more serious impact because of the greater distances involved.

To add insult to injury, the Liberals have slapped a seven per cent tax on the Maple Leaf gold coin, to the detriment of northern gold mining communities.

The Liberals have failed to come through with any of their promises to the north, with the exception of one I will say more about in a minute.

Some of the more notable promises, which they have abandoned either permanently or temporarily, include a $100 tax credit for every northern residence, increased funding levels for the Northern Ontario Development Corp., equalized milk and gasoline prices, seasonally adjusted hydro rates for northern Ontario, allocation of enough money to cover all the northern the drainage needs, increased funding for northern schools, $10 million for distant education services, increased funding for northern hospitals, increased funding for northern day care and increased funding for the Ontario Northland Transportation Commission.

The only promise the Liberals did deliver on was the commitment for subsidized travel for health care purposes. I congratulate them on that. In my estimation, the residents of northern Ontario are going to need this assistance because the Liberals have done little to improve the health care system in the north and have made sure it will cost more to travel to whatever facilities are there.

I suppose we cannot expect much from a minister who has not even got beyond knowing the name of his ministry. For the time being, there can be no doubt that the people of northern Ontario have been shortchanged and forgotten by the government.

I have been able to touch on just a few of the reasons this government's first budget has proved to be a disappointment to so many of the citizens of this province. I have not discussed the deficiencies of the budget with regard to the problems of family violence, poverty and assistance for the physically and mentally handicapped, nor have I addressed the shell game being played with the funding for youth employment programs. No doubt these issues will be addressed by members of all parties in the course of this debate.

I have said throughout that while I was disappointed but not surprised by much of what was in the budget, there were some things that were not in the budget whose omission did surprise me.

Members may have noticed there is not a single word in the budget about Ontario Hydro and its borrowing practices. I found that surprising, given the penchant of the members opposite for claiming that Ontario Hydro is out of control and its borrowing practices are a threat to the financial future of the province. Were that the case, I would have thought this budget would have introduced strong measures to bring the utility under control.

I believe I now know why these measures may not have been included in the budget. No doubt all members have read that Michael Warren, formerly of Canada Post Corp. and a gentlemen with solid ties to the party opposite, is in line for the job of president of Ontario Hydro. The government may believe that with a good Liberal in place the utility will behave in a manner it will find unobjectionable. If Mr. Warren does get the job I hope he will not do for Ontario Hydro what he did for Canada Post. If he does, he will probably turn on the switch and get the power a few hours later.

I was amazed that this first Liberal budget did not address the issue of Hydro borrowing, and I noted with some regret that the Treasurer did not choose to implement his Hydro bonds idea, which I discussed with him in debate on interim supply.

Something else that surprised me was a statement on the first page: "We are developing a fresh, comprehensive approach to industrial policy." I must confess I saw no evidence of this approach in the budget itself, unless one calls doing nothing to assist the two most growth-oriented sectors of our economy, the export sector and the small business sector, a fresh approach to industrial strategy. It would certainly be a unique approach and one that this government appears determined to pursue.

While the government has moved to reduce the record-keeping and compliance costs to small business, the $100-million tax credit program for small businesses has apparently suffered the same fate as the environmental superfund. There is nothing in the budget to encourage more of our domestic producers to explore export market opportunities.

While the suggestion that the province might open an office in Washington is welcome, particularly during the period leading up to negotiations on free trade, the wisdom of closing offices in a market that accounts for 90 per cent of our exports must be questioned.

It is also perplexing that any industrial strategy in this day and age, or any budget in a modern industrial jurisdiction like Ontario, would not provide measures to encourage technological development and diffusion. Yet there is nothing in the budget that will help our firms adapt and compete effectively in an environment in which productivity improvement related to the use of our best available technologies is the only factor that enables high-wage industrial economies to compete with low-wage developing economies in traditional manufacturing fields.

In addition, I am not sure how much confidence I would have in any industrial strategy that will produce a growth rate of only 2.4 per cent next year, down from 4.5 per cent this year and 6.5 per cent last year. Given the low-growth projection for 1986 presented in the budget, one certainly cannot accuse the Treasurer of being overly optimistic about the impact of his budget on our economic performance.

I was also surprised to learn from the budget that, in practical terms, Ontario's triple-A credit rating "has little significance." I would have thought that $300 million in increased debt charges, which is the approximate cost the province would incur during the term of its debt if the credit rating were downgraded to double-A-plus, is a matter of considerable significance.

In addition, contrary to what the budget suggests, the triple-A rating, in so far as it helps attract investment and minimizes borrowing costs, does help to provide jobs, housing and health care. Surely the members opposite are not so obtuse as to fail to recognize that the more money one spends on public debt interest charges, the less money there is available for investment in housing and health care programs.

We will have to wait and see what effect the budget will have on the credit rating. We will have to wait and see whether the budget finishes the job started by the Treasurer's economic statement of July, which resulted in placing the province on a credit watch with negative implications.

This is a disappointing budget. While it taxes many things, it taxes nothing more than the credibility of this administration. It is a budget without vision. It is a budget without any clear sense of direction, without unity and largely without significance. It is a budget of half-measures and half-kept promises. It is a stand-pat budget that contains no new and innovative policies or programs and no real commitment to enhancing economic growth or improving social equity.

This budget shows the government to be not compassionate and competent, as it likes to advertise, but indifferent and uncertain. It is indifferent to the aspirations of our people and regions and uncertain about how it might best exercise the authority it so tenuously holds.

As a party committed to growth, to equality of opportunity, to fiscal responsibility and to a genuine partnership of the people of this province, we cannot express confidence in the budgetary policies of this government. Therefore, I have a motion.

12:40 p.m.

The Deputy Speaker: Mr. McCague moves, seconded by Mr. Gregory, that the motion that this House approves in general the budgetary policy of the government be amended by deleting the words following "that" and adding thereto the following:

"This House, recognizing that the 1985 budget fails to provide the policies and programs needed to sustain employment, economic growth, and enhance social equity, condemns the government for:

"Irresponsibly increasing the deficit and jeopardizing the financial stability of the province;

"Its failure to meet the needs of 386,000 unemployed people in Ontario;

"Abandoning the people of northern Ontario by failing to provide for adequate funding for development of the north;

"Ignoring the plight of farmers throughout the province;

"Its failure to respond to the needs and interests of the women of Ontario;

"Its failure to provide for the preservation and enhancement of our environment and resources;

"Inadequate support for homemakers and home care programs for the seniors of Ontario at a time when the demand for these programs is increasing;

"Worsening the situation of our tourism industry by reducing financial assistance and increasing taxes;

"Exorbitant tax increases which will further reduce the spending power of Ontario consumers while offering no visible benefit;

"Its failure to provide assistance in the form of food banks, emergency shelters for those of our citizens who fall through the social safety net;

"Its failure to guarantee accessibility to the health care system by enhancing the Ontario health insurance plan premium assistance programs;

"Neglecting the need for a comprehensive and coherent economic and industrial strategy to generate new growth, employment and wealth in an increasingly competitive and complex international marketplace;

"Therefore this government lacks the confidence of this House."

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

Hon. Mr. Nixon: Order 31 is also listed on the daily Orders and Notices, calling for a resumption of the adjourned debate on redistribution. I am not at all sure the members who had indicated they wanted to take part are present.

Mr. Cordiano: Yes.

Hon. Mr. Nixon: Oh, good. Since there is at least one member who would like to speak on that and I am quite anxious to draw that debate to a close as soon as possible, with your permission, Mr. Speaker, I would like to call order 31.

ELECTORAL DISTRICTS REDISTRIBUTION

Resuming the adjourned debate on the motion for consideration of objections to the report upon the redistribution of Ontario into electoral districts.

Mr. Offer: I am pleased to join in the resumption of this debate on redistribution today. The redistribution of electoral boundaries is an exercise of paramount importance. It is an exercise which attempts to recognize areas of increasing or decreasing population and areas of shifting population. It is my sense that the exercise of redistribution gives truer meaning to the phrase "representation by population."

I would like to commend the commission on its task. It toiled many hours in attempting to fulfil its objective. However, I respectfully request that consideration be given to my motion on the report of the Ontario Electoral Boundaries Commission respecting the electoral district of what is now the riding of Mississauga North.

As previously stated, the basic objection is found in this motion. However, I would like to take a few moments to expand on three grounds upon which I base this objection.

First, I have had occasion to review the findings of the commission and note that the proposed electoral districts across the province are 130 in number, being the maximum allowed by the Legislative Assembly's resolution. I find this wording very curious in that it does not state that the province properly requires 130 electoral districts, but rather that if 130 electoral districts were available, this is, in the commission's opinion, the best allocation.

I ask that this neat point be kept in mind because it appears that the commission has initiated its investigation on an erroneous footing. It appears that if we are to give full effect to population shifts, increases and decreases, then it is incumbent upon the commission to have a free hand in setting the proper number of electoral districts based on the population demands of the day.

Second, it is important to keep in mind that the question of population is one that is of only secondary importance to the commission, and only to be applied following consideration of issues or questions of primary importance, such as community or diversity of interests, the significance of inter-riding communication or the influence of existing major roadways and the like.

The commission has based its findings on a population of 315,056 for the city of Mississauga. The commission goes on to say it adopts the same division of Mississauga as that chosen by the federal Electoral Boundaries Commission for Ontario in its report to the House of Commons on May 24, 1983. This gives a population distribution for the proposed district of Mississauga Centre of 77,389, for the proposed district of Mississauga East of 80,796, for the proposed district of Mississauga South of 80,692, and for the proposed district of Mississauga West of 76,179.

I strenuously object to this finding on the grounds that the commission has chosen to adopt the same division of the city of Mississauga as that chosen for the province by the federal Electoral Boundaries Commission. I suggest this demonstrates the commission has deferred its decision-making process with respect to that which is now in Mississauga to the federal commission, which I believe is not within its mandate and evidences a complete ignoring of the parameters of its responsibility to the geographical, political and demographic factors that now exist within the city.

The commission has ignored the fact that Mississauga is experiencing a growth rate of some 20,000 residents per year and is one of the fastest growing areas not only in Ontario but in Canada. It ignores the fact that the population of Mississauga will in the near future reach the 500,000 level before any tapering off of population increase will occur. It is evident that even before the proposed electoral districts could be legislated into existence, the electoral districts proposed in Mississauga would be above the accepted tolerance levels.

My third objection to the commission's finding has to do with the inclusion of the town of Malton in the proposed electoral district of Mississauga East. It is necessary to realize that geographically the town of Malton is separate and distinct from the rest of the city of Mississauga. Because of its very peculiar proximity to Lester B. Pearson International Airport and the major highways, this geographical problem can never be altered. There will always be that distinction for the town of Malton. It is not a matter of two, three, four or five polls. The town, with approximately 60 polls, must be looked at in its entirety. To do anything other than that is to do a disservice to that area.

However, given the fact the geographical problem can never be altered, it is necessary to realize that the people of Malton, numbering some 34,000, have always had a linkage to the residents and communities comprising what is now the electoral district of Mississauga North. This is true not only from a historic and political view, but also from a community standpoint.

In my view, it would be injurious to the residents of Malton, geographically and on a community or political orientation basis, to include them after so many years in what is proposed as the electoral district of Mississauga East. I have had much discussion with persons in the Malton area and what I say today echoes their feelings and thoughts on this proposed electoral change.

In conclusion, I strongly object to the proposed boundaries for the electoral district of Mississauga, the transfer of the town of Malton into the totally distinct electoral district of the proposed Mississauga East, and to the grounds upon which the commission has based its findings for the totality of Mississauga.

Mr. Haggerty: I want to add a few comments to the commission's recommendations in regards to boundary changes for electoral districts in Ontario, and particularly the area I have had the opportunity to represent for the past 18 years.

I have seen two sets of boundary changes proposed. One was in 1975 and I appeared before the commission then, raising my objections. At that time the riding was named Welland South and included the township of Pelham and parts of Dane City, which are now in the Welland-Thorold riding.

This time the commission has suggested changes should be made and Erie riding should include the town of Dunnville. That would mean the riding in the Niagara region would be 65 miles long. In the second proposal they included the town of Dunnville, which also included four former townships, Gainsborough, Dunn, Moulton and Sherbrooke. That enlarged area that would have been included in the Erie riding would consist of some 3,200 householders.

My objections to this proposal at the hearing held on April 18 in St. Catharines was that the commission had neglected to take in 3,500 householders in the present Erie riding. Those front the lake along the shoreline of Lake Erie. There are a number of Americans who own large homes along the lakeshore. There are also a number of residents in the area, landed immigrants who may not be considered under the census as part of the population. I am sure the Americans who own the homes along the lakeshore are not considered population.

That is an area I feel the commission has overlooked. It should take into consideration all of that lakefront property because those people who live along the lakeshore are great contributors to the local municipal tax base. They require little in education costs. It is a good source of revenue for those municipalities, but they require police services, fire protection, hospitals and all the other amenities of life.

To perhaps compensate for that loss of some 14,000 people in the former riding of Welland South when those boundary changes came about, it made another provincial riding in West Lincoln. I put the arguments forward at that time saying: "Let us put Pelham township back into the Erie riding. Let us put part of the 2,000 people who live in Dane City back into the Erie riding. It would meet the quota that is required of a population factor of between 60,000 and 70,000."

At that time, the chairman of the commission said to me, "We are not here to divide municipalities." One could accept that, but then the revisions and changes came back. Then The Erie riding Liberal association put forward another proposal that said, "Why not go east and take in part of the city of Niagara Falls?" Lo and behold, the commission took that suggestion.

Speaking last week on this issue, I think the member for Leeds (Mr. Runciman) brought out some valid points. His points were that when the boundary changes are made by the commission, consideration should be given not only to the population but also to the size of the riding. The Erie riding will be taking in the old township of Willoughby and part of the township of Crowland. That is going to split municipal boundaries.

Without being offensive to my colleague the member for Niagara Falls (Mr. Kerrio), to draw a parallel, that means he will have a riding of about nine square miles while Erie riding will be about 40 miles long and about 14 miles wide; and it will have the numbers, there is no doubt about it.

I must indicate there is an extra work load involved for a member to represent this area, taking in another municipality. I think the member for Leeds brought this out, saying it is great to have a condensed riding. One has to compare the work load because of the large area or land mass the person has to look after. I suggest that consideration should be given to that in the thoughts of changing the riding redistributions.

There are other things about a large riding that cause some adverse effects to a member. I sympathize about the work load of some members who have a riding that may bring in 22 or 30 small municipalities. The commission should take into account that the new process in Ontario means there is a greater work load for members today than there was 18 years ago. One of the reasons is the government is running more committees of the Legislature that take the government back out into the communities. I think this is the right direction to go, but it does take considerable time.

I have objected to that. I hope the commission will take another look at my objections to it. I think the Erie riding should remain as it is because it is my own personal view as a member who has represented that area for some 18 years that taking on another municipality will add a further work load to that person. I think this is what the commission has to take a look at.

Mr. Speaker: Perhaps the honourable member could find an appropriate time to adjourn the debate.

Mr. Haggerty: How about Monday night?

I want to end with that. The commission should take a look at that, and because of the condensed area of population and the larger area, that factor of the 25 per cent in population, up or down, should be given perhaps more of a weighting factor before changes are made.

On motion by Hon. Mr. Nixon, the debate was adjourned.

The House adjourned at 1 p.m.

October 25, 1985

STATEMENTS BY THE MINISTRY

HIGHWAY CONSTRUCTION

ANNUAL REPORT, ONTARIO PROVINCIAL COURTS COMMITTEE

NATURAL GAS PRICING

ORAL QUESTIONS

BUDGET IMPACT

AD VALOREM TAX

CAPITAL INVESTMENTS

TAX EXPENDITURES

SMALL BUSINESSES

SOCIAL ASSISTANCE

LAND TRANSFER TAX

NORTHERN DEVELOPMENT

SOUTH AFRICAN WINES

HIGHWAY CONSTRUCTION

PETITION

ROMAN CATHOLIC SECONDARY SCHOOLS

MOTIONS

COMMITTEE SITTINGS

COMMITTEE REPORTS

COMMITTEE SUBSTITUTIONS

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

ELECTORAL DISTRICTS REDISTRIBUTION