Hansard Transcript 1985-Oct-28 | Legislative Assembly of Ontario

Mr. Cousens: On a point of privilege, Mr. Speaker: On this historic day, October 28, 1985, the fourth day after the "Richard Nixon" budget, I would like to donate part of a $1 lunch to the Treasurer (Mr. Nixon). This was for 90 cents, not what one would say is in keeping with a balanced diet for any of our seniors, any of our youth or anyone else in the province; but I am going to be generous in his ungenerous, underfunded, undesirable gift to the people of this province.

Mr. Speaker: Order. I am sure the Treasurer will be able to handle that all right.

ROYAL ASSENT

Mr. Speaker: If I could have the attention of all members, I beg to inform the House that the Honourable the Lieutenant Governor has been pleased to assent to a certain bill in his chambers.

Assistant Clerk: The following is the title of the bill to which His Honour has assented:

Bill 38, An Act to amend the Municipal Elections Act.

BOARD OF INTERNAL ECONOMY

Mr. Speaker: I beg to inform the House that I have laid upon the table a copy of an order in council appointing the member for Bellwoods (Mr. McClellan) as commissioner to the Board of Internal Economy in place of the member for Sudbury East (Mr. Martel).

POLLS

Hon. Mr. Nixon: Mr. Speaker, with your permission may I table another poll, dated August 1984, for the edification of the members and press gallery? I hope there are not very many more of these, but they seem to be coming to my attention on a regular basis.

STATEMENTS BY THE MINISTRY

DEERHURST INN

Hon. Mr. Eakins: It gives me pleasure to rise today to announce the results of this government's review of the Deerhurst agreement. The agreement was between the Ontario and federal governments and Deerhurst Resort Ltd. for expansion of the Deerhurst Inn, Muskoka.

This agreement, which was announced on June 14, 1985, outside this House by the former government, was not acceptable to this government. As a consequence, my ministry and the Ontario Development Corp. were authorized by cabinet to negotiate with the other parties to seek a resolution that better reflects the interests of the taxpayers of this province. We did so within the framework of the Canada-Ontario tourism subsidiary agreement, which this government supports strongly and does not wish to jeopardize.

I am now pleased to report that a revised agreement satisfactory to all parties has been signed. The principal change is that the entire $5-million provincial contribution will now be a fully repayable loan with no grant. The $5-million federal contribution will also be subject to the same condition. I can also confirm that the recreation and sports facilities involved in this expansion will be fully available for use by the public.

In signing this agreement, my colleagues and I are mindful of the considerable economic benefit to the local economy. The expansion will create more than 350 permanent jobs and more than 1,000 construction-years of work will also be created.

I also wish to emphasize the importance of the Canada-Ontario subsidiary agreement. We wish to continue in partnership with the government of Canada to play our part in its implementation. This subagreement will provide considerable benefits to the province and will help to revitalize our tourist industry. However, in reviewing the Deerhurst agreement, we wanted a better deal for the taxpayers than the one negotiated by the previous government, and this has now been realized.

SPILLS BILL

Hon. Mr. Bradley: Just four months ago, nine days after this government came into being, I announced the immediate proclamation of part IX of the Environmental Protection Act. It comes into force November 29.

I appointed a special review panel to receive submissions and make recommendations on the implementing regulation. That panel's hearings across Ontario brought the apprehensions and concerns of industry into the open where they have been dealt with in a positive and constructive way.

Representatives of industry, small business and farmers' groups want to be sure this legislation does not result in unbearable costs. At the same time, it is clear a substantial body of public opinion wants the extra protection this legislation will provide.

The single most frequent concern expressed by opponents of this legislation is that insurance companies just will not underwrite the risks involved in insuring farmers, industry, haulers and businesses. Today, with great pleasure, I can put that fear to rest.

My special adviser, Allan O'Donnell, QC, has been working closely with the insurance industry in this province. Insurance coverage will be available, provided by a pool of insurance companies licensed to do business in Ontario, well before November 29, when part IX and the new regulation will come into effect.

I commend these insurers and reinsurers. They responded positively and responsibly to the needs of Ontarians when pollution coverage was not generally available. These astute business people saw through the initial fears that often accompany new situations and recognized the spills bill as a workable system to which they could comfortably adapt.

This pool of insurance companies will provide coverage of up to $1 million for all claims from any one spill, with an aggregate limit of $2 million in claims per policy in a single year.

Let us look at this coverage in terms of spills liabilities actually incurred. My ministry added up the total costs involved in 56 spills reported to us in 1983. All of them were sudden and accidental, had offsite effects and were not traffic-related. Actual cleanup expenditures ranged from $100 to $175,000, obviously well within the range of the new insurance being provided and well within the vehicle insurance normally carried by Ontario motorists. In addition, the pool insurance will cover the other liabilities imposed by the act.

2:10 p.m.

There is one basic point in the public debate on this legislation that keeps getting muddied. If one is responsible for a spill that causes damage to another's property, then under common law one is already liable for those damages. The spills bill recognizes that the public has an interest in prompt, thorough cleanups of spills. In effect, the spills bill regulation will limit liability over the available insurance levels by providing that the government will take on a great portion of further liability.

In discussion of the spills bill there has been a great amount of talk about the most unlikely situations. I will spare members repetition of these stories about the collision between the intoxicated, uninsured, impecunious terrorist and the farmer's daughter's pickup truck -- stories generally concocted by city slickers, I might add.

Suffice it to say that people seeking to benefit by the production, handling or use of potential pollutants should take care with the substance, should obtain appropriate insurance and should hire only reputable, insured haulers. These simple rules will keep the farmer and the businessman safe from catastrophic loss under the spills bill. The new regulation clarifies responsibilities, encourages early and effective response to emergencies and provides a mechanism for government interim compensation until responsibility can be established.

For the motorist or for the waste hauler, the new insurance pool provides no additional protection, and none is required. Standard vehicle insurance policies already include accidental pollution risks. If a truck spills its cargo, then the insurer of the truck must respond to the cleanup and restoration costs and to claims for loss or damages.

Similarly, farmers who have placed their insurance with the 51 farm mutuals in Ontario are now covered for accidental pollution claims and have enjoyed that protection for years. The farm mutuals will be able to insure their sudden and accidental insurance risk with the insurance pool. Unlike others who need $1 million insurance, farmers' spills liability is limited to $500,000. Farmers served by other insurers can check with their agent to ensure their farm policy provides adequate protection.

For the business community, the new pool is a definite benefit. Because of the pattern of worldwide pollution insurance claims, reinsurance in the international insurance market will not likely be generally available. New comprehensive general policies for business will not likely provide pollution damage coverage. The new pool of insurers are providing that protection for sudden and accidental spills, and it will be available through the businessman's broker or agent.

Obviously, there will be a cost. Farm and auto insurance premiums are expected to rise this year because of escalating claims settlements having nothing to do with the spills bill. In addition, the cost of sudden and accidental pollution coverage under the new pool will be clearly identified in the premium quoted by the pool.

There is no free ride. People whose business creates risk, whether they are truckers, farmers or businessmen, should be expected to bear the costs that result from their activities. This applies to pollution risks, as it does to all others. Insurance is the best way to underwrite these costs and spread the risk evenly, and insurance will be available.

ORAL QUESTIONS

AD VALOREM TAX

Mr. Harris: I have a question for the Treasurer concerning his party's recent betrayal of the people of Ontario. A key issue in the Treasurer's objection to the last provincial budget was the tax of eight cents a litre on gasoline. The feature issue that the Treasurer raised in his comments to this Legislature on October 9, 1984, was his concern for the Ontario taxpayer who was burdened by that unfair tax.

Can the Treasurer explain to us what happened to make a then unfair tax of eight cents a litre now fair, equitable and all of a sudden right for the people of Ontario at 8.8 cents a litre?

Hon. Mr. Nixon: The thing that happened is that we removed the ad valorem aspect of the tax, which was established at 20 per cent no matter what the price was. Every time there was a federal increase, the Treasury of Ontario got windfall revenues. The big change proposed in this particular budget is that the ad valorem concept in this tax be abolished and that a specific tax approved by the Legislature be substituted.

I have put in the budget and in the bill before the House a level of 8.8 cents per litre. The member who posed the question knows the present tax is about 8.2 cents per litre for leaded gas and about 8.4 cents per litre for standard, unleaded gas. The proposal is 0.4 cents a litre more and is estimated to cost an additional $8 a year for the average driver. This may not be the cost for the person who commutes to Sudbury from Sault Ste. Marie, but it is for the average commuting distance in Ontario.

We think there is an advantage to the removal of the ad valorem, which puts the power back in the Legislature where it should be. While the increase is significant, it is not untoward, and we believe it is supportable by any objective observer.

Mr. Harris: What really concerns me about the whole budget and this tax is that I have to ask myself whose budget it is. It concerns me because it sounds a lot like the Trudeau-MacEachen budget of 1981 with higher deficits and taxes, more money for the government and less money for the people. In 1981, it led to higher unemployment and inflation, disasters for business and for farmers and loss of jobs.

Given that the Treasurer's budget appears to move in the same direction, did those architects of the Trudeau years, who obviously are the same architects of the Treasurer's budget, explain to him, and will he explain to us, how this philosophy, which was so disastrous for the country in 1981, is now good for Ontario in 1985?

Hon. Mr. Nixon: The budget that has some parallel application here, as I recall, is the budget of the member for Muskoka (Mr. F. S. Miller) in 1980, 1981 or 1982, where the substantial increase in revenue -- by far larger than the one announced by myself last Thursday, which I hope will be supported by the Legislature -- was in a position to lead the province into a recession. We had the most substantial recession we have experienced in 40 years. When we are talking about revenue increases, it is only fair to consider how the money is to be spent.

In this instance, we have targeted the expenditure on jobs for young people, already announced by the Minister of Skills Development (Mr. Sorbara); programs for farmers, already announced by the Minister of Agriculture and Food (Mr. Ridden); and a whole new approach to invigorating the north, already announced by the vigorous Minister of Northern Affairs and Mines (Mr. Fontaine).

My point is that rather than compare it with the MacEachen budget of 1980-81, which removed a number of loopholes and which did not survive the onslaught of the opposition, this one has revenue increases smaller than those brought in by the then Conservative government in those years. The increases in revenues are directly targeted on new programs that were voted for and supported by the people of Ontario in the election that the member must remember clearly.

Mr. Rae: The MacEachen budget led to many things. Perhaps worst of all it led to Brian Mulroney.

I would like to say to the Treasurer, while he is chuckling away, that on April 8, 1985, the fellow sitting next to him issued a statement. There was an election campaign under way. "Who is Standing up for Ontario and St. Catharines?" is the title of the press release. The second-last paragraph says: "This does not have to happen. A Liberal government in Ontario would freeze the gasoline tax, abolish the automatic ad valorem tax grab and fight tooth and nail against consumer gas taxes implemented by the federal Conservatives." What happened to the Treasurer's teeth and nails?

2:20 p.m.

Hon. Mr. Nixon: We are dead against those federal taxes, and we will continue to fight tooth and nail against them.

The tax was frozen from, I believe, August or September of 1984 until the present time. The frost has not changed. What we are suggesting is what we consider to be a progressive move, one advocated by the Liberal opposition for many years, and that is the removal of the ad valorem concept in this particular tax. We are replacing it with what we consider to be a very reasonable approach to revenue raising that goes, at least in some small measure, to paying for the new programs that we on our initiative have put before the Legislature and that we understand the New Democratic Party supports in some measure.

Mr. Harris: The Treasurer will understand that this budget does not reflect the member for Brant-Oxford-Norfolk (Mr. Nixon) that I used to know.

Interjections.

Mr. Speaker: Order.

Mr. Harris: It is not the member for Brant-Oxford-Norfolk who was "concerned about the fellows that sit around the gas stove at Earl's Shell Service Station in St. George, who have been right at least as often in their view of the financial future, as they think they are facing a very difficult winter and a very difficult spring." I do not think it is the member for Brant-Oxford-Norfolk whom those people knew. It is not the member for Brant-Oxford-Norfolk who was concerned about eight cents a litre on gas.

Mr. Speaker: Question?

Mr. Harris: It is not the member for Brant-Oxford-Norfolk who wanted to double the agricultural budget.

Why is the Treasurer allowing the Premier (Mr. Peterson) and his advisers, the same advisers who led this country into ruin, to destroy the real member for Brant-Oxford-Norfolk on his very first budget to the people of Ontario?

Interjections.

Mr. Speaker: Order. I know members want to find out whether he still sits around that stove.

Hon. Mr. Nixon: Mr. Speaker, I know you will be interested to know that I personally consulted the boys at Earl's Shell Service Station, and it would not be unfair to paraphrase their response as, "You did a good job, Bob."

While the member for Nipissing may think it is "No more Mr. Nice Guy," I can assure him that I am thinking of the welfare and progress of the working people in Ontario, including the good old boys at Earl's, who work very hard for their income. Many of them are out in the fields even now, running the combines in the fields of grain; and they are concerned about the inadequate pricing for soybeans and corn. My colleague the Minister of Agriculture and Food is concerned as well; he has expressed that concern by bringing forward positive program alternatives.

I can assure the honourable member that all the revenue decisions that concern him so much were difficult to put before the House, but in my opinion they form a framework of fiscal responsibility without which we cannot move forward with the program the province needs.

We have to undo some of the damage that was done to our school boards, our colleges, our universities, our hospitals and our municipalities. We have done that by making what we consider to be a fair and equitable commitment of dollars, and that has to be bolstered and paid for by tax increases. I wish it were not so, but I am simply putting it to the member as it is.

[Later]

Mr. Rae: I want to go back to the gasoline tax. I quoted from one statement made on April 8, but here is another one, made on April 19 and entitled "Miller Hides while Ontario being Gouged on Gas Prices." It says:

"A Liberal government would vigorously oppose increased consumer taxes and higher gasoline prices without offsetting concessions to Ontario consumers." That is a direct quote. It then goes on to say, "A Liberal government would freeze the provincial gas tax at its current level (about eight cents per litre) and shift it back from an ad valorem to a fixed-rate basis." That is the election campaign commitment made to the people.

I assume the Treasurer was running on the same platform at that time, on the same ticket. A commitment was made in April and was renewed in May in the accord, when the leader of the Liberal Party said he would continue the freeze on the ad valorem. Why did the Treasurer take the very first opportunity in his very first budget to break the commitment he has been making to the Ontario people for so long with respect to gas prices?

Hon. Mr. Nixon: The honourable member read the comment, which I guess is a quote from the then Leader of the Opposition, now the Premier. It calls for offsetting commitments. It accounts for why the Minister of Energy (Mr. Kerrio) is taking a strong stand as far as natural gas pricing is concerned, and it accounts for why in the budget, and along with my colleagues we have announced an array of new programs which we feel are beneficial to the province and which have to be paid for by tax increases.

We felt it was fair and judicious to spread these increases in a justifiable way across the public, including the consuming public. While these increases are significant, we feel they are not so large that any rational and objective person who wants the new programs could possibly oppose them.

Mr. Rae: If the Treasurer wants to have me certified as a rational person, I am prepared to go through any test he wants. I think there are a lot of other people in Ontario who are as fiscally responsible as the Treasurer is, and we intend to show how.

Since the Treasurer repeated the canard today about the $8 figure, which he snatched out of the air, and before he goes off potentially irrationally and fiscally irresponsibly in answer to this question, why is it that in the same press release Mr. Peterson -- as he then was, before we had to call him by his title -- said an average Ontario motorist driving 24,000 kilometres per year would pay an additional $141 annually as a result of the federal change? Is the Treasurer still using the 24,000-kilometre figure as what an average motorist in Ontario drives, or is he inventing some other figure to prove his figures here?

Hon. Mr. Nixon: This is not a canard, base or otherwise. The $8 figure comes from the surveys and responses of the officials of the Treasury itself.

Mr. McClellan: Who does the Treasurer believe? Them or the Premier?

Hon. Mr. Nixon: They are both right; I have found them both reliable in all circumstances. Since the member is once again expressing his concerns about this matter, which almost sounds as if he is nailing his hanky to the flagpole, I will be delighted to give him the research done by my officials. I have found they are very reliable in these matters, and I certainly respond to their advice in almost every respect.

Mr. Harris: I might say to my new-found friends to my left, we welcome them to the opposition and look forward to their joining in our opposition to this proposed tax hike.

Mr. Speaker: Supplementary question.

Mr. Harris: As long as we are into quotes today, as the leader of the third party has been doing, here is another one: "As a matter of fact, eight cents per litre is bigger than the federal government's grab from petroleum and almost as big as that of the government of Alberta." That is how appalling eight cents was to the real member for Brant-Oxford-Norfolk, the member for Brant-Oxford-Norfolk that I and the people of Ontario used to know.

Why is the Treasurer doing away with the ad valorem and jumping the tax to an all-time high in Ontario? Is he doing this now because most people expect the price of gasoline to go down and he wants to fix the tax on gasoline at the highest possible level and to keep it there even if gas prices go down?

Hon. Mr. Nixon: Mr. Speaker, I would not say the honourable member is attributing motives particularly, but in response to his question, I want to point out something that you will be familiar with because you are one of the few people who listened to my speeches when I made them the first time rather than grubbing around in old Hansards night after night, the way these guys are.

You will recall I was unalterably opposed to the concept of ad valorem taxes when it was trotted out by the member for Muskoka back in the 1980s as a means of increasing the revenues of the province by the largest single grab in our history. Members will remember what he did to the sales tax, the tobacco tax and the gasoline tax.

As a responsible opposition, we were opposed to the ad valorem concept. Now, as a government, we are removing the ad valorem tax. Once again we call upon all reasonable and objective observers to support us in our efforts to bring Ontario's tax system into a fair and equitable position, supportable by all.

2:30 p.m.

Mr. Rae: I am sure all reasonable and objective observers will do that very thing and will expect the government of this province to live up to commitments it has made to the people and commitments it has signed.

In that regard, the Liberal Party said it would oppose increased taxes on gasoline prices without offsetting concessions to Ontario consumers. Can the Treasurer explain why in 1984-85 the tax credits listed in the budget amounted to $289 million and in this fiscal year they amount to $275 million; that is to say, $14 million less even before adjusting for inflation? In 1975, tax credits represented five per cent of total budget revenue. Now they are down to one per cent.

If the Treasurer is going to effect the kind of tax increase that is represented by the gasoline tax -- which is not progressive and he knows it -- he has an obligation to bring in some tax concessions, he has an obligation to enrich the tax credit program. Why did he not choose to do that in order to make those changes progressive?

Hon. Mr. Nixon: The honourable member speaks of concessions. I know he has mentioned the tax credits a number of times and I think that is an important alternative. But we chose to take sales tax off certain areas of importance, such as $1 meals and feminine hygiene matters. We have taken the tax off babies' car seats. Where does the member stand on that, may I ask?

We have stated clearly that if the tax were to go up on the one hand, it would have concessions for the consuming public on the other, and I submit to the member that we have done so to the best of our ability.

NATURAL GAS PRICING

Mr. Andrewes: My question is to the Minister of Energy with respect to his statement of last Friday on natural gas prices. The minister in his statement claimed that natural gas prices should fall by approximately $1 per MCF, or 1,000 cubic feet. Can he tell us the basis upon which he is formulating his argument with the government of Canada, with the governments of the producing provinces and with the natural gas producers? Is that argument cost-based or market-based, or is it simply political statesmanship that he seeks?

Hon. Mr. Kerrio: The main thrust of the statement did not have to do with going at the prices. The main thrust of the statement -- and I will repeat it, because it is very important to all members of the Legislature -- is that, in the order of things, this resource belongs to the province where it is produced. The minute a province goes to export it, the federal government takes it into its jurisdiction. Immediately that happens, I have a strong feeling the interest of our great nation becomes involved.

I felt we should very properly have a full place at the bargaining table, and we have not had that. Much of what the honourable member reads has to do with things on which I have had to do some speculating, and I had to rely on other areas for my information. I still think that when a government puts the loyalty of the Canadian people secondary to the interest of a single province, it does not augur well for the rest of us.

We are going to need the member's help with the Conservative government in Ottawa to put on the kind of pressure needed to maintain jobs and the viability of the manufacturing sector in this great province and to see, very properly, that gas is delivered to the average consumer in this province as cheaply as or more cheaply than it is delivered to users in the United States. That is a very fair position, and I am looking for the member's support to attain it.

Mr. Andrewes: I want to assure the minister he will have all my support. Whatever role he wishes me to play in taking that statesmanship argument to Ottawa, I will be delighted to do it on his government's behalf at any time.

I want to refer again to the minister's statement. On page 5 he says boldly that the natural gas pricing agreement is a bad deal for natural gas consumers across Canada. How does the minister have the unmitigated gall to make that kind of statement when the ink is hardly dry on the Treasurer's (Mr. Nixon's) budget? In that budget the government has increased the cost of gasoline to consumers right across the province and picked the pockets of businesses and individuals on whose behalf the minister says he is making these arguments to his federal colleagues.

Mr. Speaker: Order. The question has been asked.

Mr. Andrewes: How does the minister think he will have any credibility at that bargaining table when he approaches the federal government?

Hon. Mr. Kerrio: This government, under the leadership of the Premier (Mr. Peterson), is going to make a lot better argument on this issue than the former Tory provincial government made to the Tory government in Ottawa about oil pricing. They sold us down the river. They were quiet and said nothing. They took what they and the federal government decided between them was in the best interests of the people of Ontario and sold the people very short.

That is not going to happen on the gas prices. We are going to put our argument in a fair way, and we are going to need the help of every member of this Legislature. That is worth defending for the people of Ontario. I hope not too many people are going to be drilling holes from inside the boat.

Mr. Rae: I know the minister would not want to be accused of posturing on an issue that affects the interests of Ontario's consumers. I wonder if he can tell us precisely what personal representations, by phone or by any other way, he has made to the Minister of Energy of Alberta and the Minister of Energy, Mines and Petroleum Resources of British Columbia, and what recent interventions he has made to the Minister of Energy, Mines and Resources of Canada. I would like to hear from him precisely what representations he has been making in the past few days.

2:40 p.m.

Hon. Mr. Kerrio: In response to the question of the leader of the third party, let me say I went to Ottawa and had an interview with the federal minister. We had a very recent involvement on the east coast with all the ministers from across Canada. I spoke to the minister as recently as last Friday.

The reason I made the public statement and the reason I sent the telegram to every federal member in this great province was that I had a very strong feeling that Ontario was not being well represented at the talks. I had all the input I could with the federal members and the minister. I felt we should have had full involvement at the bargaining table, and we did not have that. That process is ongoing at this very moment, and we still have been excluded. I have touched the bases that should have been touched, and that was not very productive. That is why it had to go in that direction.

I still say to every member of this assembly, we are going to need your help and support.

Mr. Andrewes: When the minister gets the seat he is looking for at the discussion table, will he urge the Treasurer, who has just increased the gasoline tax, to back away from increases like that so he can go to the table with some degree of credibility and speak on behalf of the businesses and the private individuals in the province?

Hon. Mr. Kerrio: My responsibility in this matter has to do with defending the manufacturers and the ordinary household users in Ontario. I am doing that to the utmost of my ability. If we can keep the manufacturing base viable and if we can keep the cost to the Canadian consumers, and especially the Ontario consumers, down to the point where it should be, there will be more money in the marketplace and taxes to do the things this very able Treasurer is trying to do.

SOCIAL ASSISTANCE

Mr. R. F. Johnston: My question is to the able Treasurer. It follows up on the theme I was asking about on Friday, and that is the people who have been left out of his budget. He made some promises about getting rid of Ontario health insurance plan premiums, and I understand that in a first budget this is not an easy thing to address; it is a fairly enormous amount of money.

But why did he find no money to address the problems of the premium assistance program, which has not changed since 1981? There are poor people in this province who do not get any assistance with their premiums. In fact, a minimum-wage worker today has to pay 50 per cent of his premiums, and that is a lot of money. The Treasurer was able to find money for other things, like paying down Suncor. Why was he not able to find an income-generating program to pay the much smaller amount that would have helped these people with their health problems?

Hon. Mr. Nixon: The honourable member is aware that there is a premium assistance program in place at the present time and that many thousands of people, particularly those in receipt of pensions and other assistance from the province, pay no premium whatsoever. Then there is another category in which there is some premium assistance.

I can agree with the member that we did not change that level of assistance and it would have been nice so to do. Instead of that, we chose to freeze the level of OHIP premiums. This is the first time in five years -- I stand to be corrected, but it is four or five years -- when the premiums have not gone up.

We promised to abolish them and I would have liked to move them downwards. Instead, we decided we would not allow them to go up this year, and I believe this took a commitment -- once again I stand to be corrected; I cannot rummage through here to find the number -- of something like $180 million to $200 million simply to keep the OHIP premiums from going up. I chose not to put it in the budget as a great achievement, because it might not be seen as a great achievement by everyone who was not in full possession of all the facts.

I can assure the member that our decision to freeze the OHIP premiums at their present level took a lot of money from the budget. I was very glad to make it available, because not only do I feel the premiums must not go up but I also hope that some time in the future, when the buoyancy of the economy of the province permits, we will be able to fulfil our promise and abolish those premiums, which are by far the highest charged by any jurisdiction in Canada.

Mr. Rae: One of the continuing themes in the answer the Treasurer has been giving during the last two days is the difficulty of ever finding any money, the sense of being strapped and the need to be fiscally responsible. There is no argument anywhere in this House on the need to be fiscally responsible.

The Treasurer talked about the importance of the feds introducing a minimal tax on income at the federal level, something he cannot do anything about. The Treasurer can do something about a minimum corporate tax.

I am sure he will be aware that the federal Minister of Finance introduced figures in his last budget showing that a substantial number of corporations are making profits and are not paying any tax whatsoever, provincially or federally. Is the Treasurer aware of these figures? Is he aware of how much income could be generated by a very minimum corporate tax? Is he aware of the size of the loophole that is involved? It involves literally hundreds of millions of dollars leaving the Treasury department of Ontario.

Hon. Mr. Nixon: I cannot say I am aware of Michael Wilson's list, although perhaps I should be, but I am aware of the alternative of a minimum corporate tax. My consideration was that the changes in the corporations income tax in the province that I have already announced, which in a full year will return revenue of something like $230 million, led to a reasonable increase in the responsibility of the corporate side. I attempted to balance the corporate with the personal income increases, and I feel this balance was reasonably achieved. I am aware of the legalities of a minimum corporations tax, however, and it was considered.

Mr. Gillies: My supplementary goes back to the first question of the leader of the third party. My understanding --

Mr. Speaker: Order.

Mr. Wildman: That is not supplementary.

Mr. Harris: It is supplementary to the question asked by the member for Scarborough West (Mr. R. F. Johnston).

Mr. Gillies: Pardon me. I mean supplementary to the first question of the member for Scarborough West.

My understanding of the New Democratic Party-Liberal accord was that there was an unequivocal agreement for the removal of Ontario health insurance plan premiums in the first Legislature. Would the Treasurer tell us whether he is going to keep that agreement?

Hon. Mr. Nixon: The member is incorrect in that regard. I have the accord totally memorized. I have only to shut my eyes and I can see the words and the signatures. It was a commitment made by our party during the election campaign and I hope we will be able to fulfil that commitment some time in the future.

Mr. Rae: In this Legislature it is important that this kind of comparison sinks in. All single working people who are poor because they are making only the minimum wage are paying at least half their OHIP premiums. For the first time in the history of the province, they are having to pay that much. At the same time, one out of three corporations that are making a profit are not paying any tax at all. As a province we could generate tens, if not hundreds, of millions of dollars from a very minimal tax on those corporations.

Given that there is this continuing problem facing working people who have very little income in terms of what they have to pay if they want access to the health system in this province, how can the Treasurer justify his failure to move with respect to a corporate minimum tax?

Hon. Mr. Nixon: I am sure the member is aware that the revenue changes in the budget were fairly tough on the people at the upper end of the income spectrum. Not only was there an increase of two per cent in personal income tax, but also there was a three per cent surcharge on incomes of more than $50,000.

At the same time, we did make changes in the corporations tax which, when approved by the Legislature, will extract hundreds of millions from the corporate sector; at least $200 million. We feel that is the balance that is justifiable now. We considered some alternatives and decided the level of corporations tax we brought forward was justifiable.

The member is aware that there were other changes in the corporate income tax having to do with paralleling the simplication processes at the federal level. This benefits small businesses in this province, some of whom do not pay taxes, particularly those that in the first three years of existence are exempt. They were exempted by the policy of the previous government, which we have continued for the time being.

We believe this leaves some money for the stimulation of the economy and we think this is worth while. It is a judgement I consider to be judicious and supportable. I am interested in his concept which reverts to the canard "corporate welfare bum," which we have not heard for quite a while in political discussions in Canada or in this province. It is sort of comfortable to hear it again.

2:50 p.m.

SALE OF BEER AND WINE

Mr. Runciman: My question is for the Minister of Consumer and Commercial Relations. Last week in testimony before our party's task force on the sale of beer and wine in grocery stores, the president of the Ontario Liquor Boards Employees' Union informed us that the minister had advised the union that he saw nothing wrong with 15-year-olds serving wine and beer in grocery stores as long as the cork was not out of the bottle or the seal broken.

Is this really the minister's position on the question of minors dispensing alcohol? If it is, does he think there should be any age restrictions?

Hon. Mr. Kwinter: That is not my position on that issue.

Mr. Runciman: Is the minister advising this House that the detailed information provided to us by a highly respected union was fabricated? Is he telling us that the union lied to a committee of this House?

Hon. Mr. Kwinter: I would like to put into the record this government's position when it brings forward its legislation regarding the sale of beer and wine in the corner store. At no time will the sale ever be conducted by anyone other than a responsible adult who will have the care, custody and control of all sales.

In a news release issued by the member today, there is only one line that has any validity. It says, "During a recent meeting between his union and Kwinter, the minister indicated that he did not see grocery stores' sales of beer and wine ruling out teenagers working in the stores." That is exactly what I said. There is no provision under the Liquor Licence Act to prohibit a teenager from handling, storing or moving sealed containers of alcoholic beverages. That is what I said. At no time did I indicate that any minor or any teenager would be allowed to sell the product.

NURSING HOMES ACT

Mr. D. S. Cooke: I have a question of the Minister of Health on the decision by the courts last week regarding the Nursing Homes Act, specifically the charges against Elm Tree Nursing Home.

Does the minister realize that this court decision shifts responsibility considerably from the licence holder to individuals within the nursing homes and that it renders large portions of the Nursing Homes Act completely unenforceable? Specifically, does he understand that because of that decision, the sections of the act that require nursing homes to be free of hazards to the health and safety of residents and that require proper health care plans for residents will no longer be enforceable? What does he intend to do to make sure the 29,000 nursing home residents in this province are protected?

Hon. Mr. Elston: A timely question from the member. I want to acknowledge that we are aware of the serious nature of that decision. We are at this time reviewing the case to see about the possibility of appealing the decision. We are also fully involved in a review of the entire nursing home section of the ministry, including several parts of the Nursing Homes Act, to see what we can do to upgrade this ministry's ability to enforce supervision to guarantee the quality care of the individuals in this province's nursing homes.

Mr. D. S. Cooke: The minister's answer is not good enough. This case was before the courts when he became the minister. This case has been before the courts since the spring of this year. There are cases all across the province that have been pending this decision. Today, 29,000 people in nursing homes are not protected. An appeal by the ministry is not good enough. We know the act is not in place to protect the residents.

Why does the minister not prepare amendments to introduce to this House now to protect those residents? He has known and we have known for years that the act has not been good enough. Why is he not prepared to protect those residents today?

Hon. Mr. Elston: This minister is prepared to protect the residents in Ontario nursing homes. We are moving very quickly inside the ministry at this time to upgrade the legislation. Although the member wants us to do it on the spur of the moment in reaction to a decision rendered last week, this minister has to be prepared to accept a decision of the courts and make sure that our legislation answers the concerns that may be raised in that decision.

In addition, the cases that are awaiting hearing, as a result of the court case that has just been decided, are being rescheduled to allow us to take the appropriate action with respect to the Elm Tree decision. We are moving to clear up any ambiguities in the act and we will do so very shortly.

DRIVER'S LICENCES

Mr. Barlow: My question is to the Treasurer with regard to the recent budget he brought into this House. In his budget he refers to the fact, and I think it is well known, that the inflation rate in this country is currently running at about four per cent. Does the Treasurer not agree it is unconscionable to raise the cost to each individual to renew his driver's licence every three years by 40 per cent, and to raise the cost of the licence sticker that we put on our cars by 12.5 per cent? How does that relate to the four per cent increase in inflation?

Hon. Mr. Nixon: In discussions with Treasury officials about the amounts, they indicated that the sticker cost has to be divisible by four, because one can get licences for something less than a full year. There are also additional costs associated with the permit that have been part of government policy, not just in our brief time but going back a considerable time, involving putting a picture of the owner on a driving permit. There is going to be an announcement about that some time in the near future, and this would go towards covering the additional costs of this convenience.

As well, at the bottom line, after the additional costs are removed, there will be some additional revenue for the consolidated revenue fund that may then be directed as the government of the day sees fit, with the approval of the Legislature, towards such programs as improving our road system.

Mr. Barlow: The Treasurer is really raising three things that will hit the motorist. He is raising the cost of gasoline and diesel fuel, the cost of licences and the cost of the sticker that goes on the licence plate. At the same time, although by his own words he is increasing the revenue to the consolidated revenue fund, he is also decreasing the budget of the Ministry of Transportation and Communications by $34 million.

Mr. Speaker: "Is that correct?" Is that your question?

Mr. Barlow: No, that was a statement.

Mr. Speaker: This is question period.

Mr. Barlow: I am sorry. Is it the policy of this government to ask the taxpayer to pay more for less?

Hon. Mr. Nixon: Perhaps the honourable member did not read the budget, or listen to it in its entirety, because he would recall that in addition to the regular budgetary commitment for the ministry, there is a special fund of $60 million through the ministry to assist in improving roads at the municipal level. Even beyond that, an additional $90 million is committed in this budget to buy streetcars and other facilities for transit that was not in the spending program we inherited, even though the streetcars, rolling stock and other facilities had already been ordered.

So besides the amount that the member properly brings to our attention, there was the special fund of $60 million payable to the Ministry of Transportation and Communications for municipal roads, to try to make up for some of the deprivations that municipalities have experienced because of inadequate funding in the past, and the $90 million for public transportation as well.

3 p.m.

DAY CARE

Mr. R. F. Johnston: My question is for the Minister of Community and Social Services. Today we were all lobbied by the Ontario Coalition for Better Daycare. The minister heard, as we heard, that the augmentation of the Tory promise of the spring by 2,500 spaces does nothing to meet the problem that the fees are beyond the range of the average person's capacity to pay and that the wages people are being paid to work in day care are outrageously low, given the incredible responsibility they have for our children.

What is the minister doing about those two issues? What will he do in the next couple of months to address the two most serious problems in day care?

Hon. Mr. Sweeney: The increase in day care spaces announced by the Treasurer was in keeping with the promise we had made previously. It was not intended to solve the problem the honourable member has raised. I can tell him that my staff, in conjunction with the Ontario women's directorate under the Attorney General's office, is now preparing an overall policy paper change that will address the issue he has just mentioned.

Mr. R. F. Johnston: Will the minister be addressing the issue of direct grants to the day care centres so they can provide adequate programs and assist their employees to have better wage packages? Is he going basically to wait until the renegotiation of the Canada assistance plan to make sure the feds cough up their share? Is he going to take responsibility or is he going to wait for the feds?

Hon. Mr. Sweeney: Without a new financial sharing arrangement with the federal government, whether it is through CAP or through some other mechanism, we are not financially able to make direct payments as has been indicated. However, if we can get a new deal, as I indicated this morning to the Ontario Coalition for Better Daycare, then we are quite prepared to make arrangements such as that. Without a new arrangement, we simply cannot afford it.

Mr. Eves: Is the minister aware of the fact that my predecessor, Dr. Bob Elgie, when he was the Minister of Community and Social Services, on March 20, 1985, announced an additional 7,500 day care spaces? Those spaces were already allocated before the last provincial election campaign started. Is he telling us that the statement in the budget is now a misstatement and it is not an additional 10,000 spaces, but an additional 2,500 spaces?

Hon. Mr. Sweeney: When this government took office on June 26, the final allocation of those spaces was our responsibility. We made it very clear that the allocation of a number of those were being reconsidered, and some of them were reconsidered. Our commitment was that, subsequent to the May election, 10,000 new spaces would be put into place in Ontario over the next two years. That is the promise the Treasurer made and that is the commitment we are keeping.

AUTOPSY PROCEDURES

Hon. Mr. Keyes: On Monday, October 21, the member for Riverdale (Mr. Reville) asked if I was aware of and did I support the requirement under the Coroner's Act that all autopsies be undertaken by qualified medical practitioners. I replied in the affirmative.

The honourable member then asked if I had been apprised of an Ontario Provincial Police investigation into alleged improprieties during 1985 autopsy procedures in the chief coroner's facility. In response to this question, I replied I had not but that I would be glad to check into the matter. The details are as follows:

On February 26, 1985, the chief coroner received an anonymous letter stating that a member of the pathology staff was performing duties he was not qualified to do. This letter provided details, including date, time and place of the alleged infraction.

The chief coroner immediately informed the chief pathologist of these allegations. The chief pathologist with his chief of staff carried out an investigation and found no facts to support any allegation that any assistant or staff member had acted improperly.

The complainant in this matter, who is now known, was dissatisfied with the review conducted by the chief pathologist and sought an interview with the Deputy Solicitor General; however, the complainant subsequently cancelled the meeting.

On April 22 the deputy minister, in consultation with the assistant deputy minister, asked the OPP commissioner to have the criminal investigation branch conduct an investigation into these allegations. At the same time, the OPP had been consulted by the complainant.

The Coroner's Act requires that autopsies be done by legally qualified medical practitioners. However, they are naturally assisted by pathologists' assistants in this regard. Any functions performed by pathologists' assistants are supervised by the attending pathologist.

On May 27 the investigation report was concluded. The investigation revealed no evidence of any impropriety or wrongdoing and, accordingly, the allegations were determined to be without foundation. Nevertheless, I have asked my officials to ensure the appropriate procedures are maintained and that care be taken to ensure that personnel do not exceed their mandate.

Mr. Speaker: I would remind the minister that was quite a detailed reply. I am going to add two minutes to the question period. I would like to suggest to all ministers, if they have detailed replies, would they please make them in statements.

Mr. Reville: Will the minister table the results of the investigation in the House and will he also table the procedure that will allow post-mortem examinations to be conducted in different rooms by the same pathologist at the same time?

The minister is looking a little blank. Perhaps I could ask the question again. Will the minister table in the House a procedure whereby one pathologist may perform autopsies at the same time in two different rooms?

Hon. Mr. Keyes: I cannot blame nature for the blankness of the look. It is all right.

We certainly do have the opportunity under our procedures for two autopsies to be conducted by the same pathologist. As the member is well aware, in any autopsy there are certain preliminary procedures, such as making incisions, so the pathologist can examine the body. The procedures are outlined in detail and can be made available. It is quite possible for that to occur because the assistant works under the direction of a pathologist at all times, even if it is in a second room.

AGRICULTURAL PROGRAMS

Mr. Stevenson: I have a question for the Minister of Agriculture and Food. The budget announced an apparently new funding of $76 million; yet the budget background papers showed only a $70-million increase in funding over last year. Saying nothing about normal growth in many of the programs with which the minister will be very familiar, he has obviously taken a hatchet to many of the existing and popular programs in the Ministry of Agriculture and Food. What programs has the minister cut?

Hon. Mr. Riddell: Agriculture and Food's share of the budget increased by 21 per cent over the last year. That is an accomplishment the members opposite certainly cannot brag about. Our budget is close to $400 million, as compared to the previous government's last budget of $334 million. If one considers the programs from the other ministries pertaining to Agriculture and Food, it is closer to $500 million. Does that suggest there has been a cut in our programs?

Mr. Stevenson: If the minister would take off his shoes and count on his fingers and toes, it is very easy to calculate. Where did the Board of Industrial Leadership and Development money go? What is happening to the farm tax rebate that goes up every year? Look at the money required for an inflation increase on that budget and then go through the obvious things that occur year after year, without the promises of any political party.

One can very easily calculate that the ministry was expecting a substantial increase in funding this year because of programs that were already in place. How could the minister possibly keep the Agriculture and Food budget under $450 million with the new programs he brought in?

Hon. Mr. Riddell: Let me remind the member that the previous budget was $334 million. This one is close to $500 million, considering the programs from the other ministries. The member needs more than his fingers and toes to figure out that matter.

3:10 p.m.

The BILD program to which the member referred, as he well knows, smacked a wee bit of an election that took place in 1981. Why would he go through a central fund when it is a ministry that develops the programs? It will be our own ministries that develop the programs. I agree that the program for the processors was a good program and I intend to carry it on, but it is certainly not going to be under some election gimmick called BILD.

TOURISM BUDGET

Mr. Pouliot: I have a question of the Minister of Tourism and Recreation. Does he remember the mandate his government has given his ministry? The mandate was to "develop, market, strengthen and maintain Ontario's tourism and recreation industries and service."

The budget the minister has laid out for this year represents only two per cent more than the Tories had in the fiscal years 1982 and 1983. Does the minister really believe he can fulfil this mandate when he is spending $16 million less in real dollars than those people spent three years ago?

Hon. Mr. Eakins: I want to assure the members of this House, regardless of the press releases and the comments of the members of the former government, the Tourism budget has not been reduced as they have been saying. The budget has been increased.

Mr. Pouliot: With due respect to the minister, by means of a suggestion in the question, rather than erect Taj Mahals to the vanity of the former Premier, maybe the minister should pay attention to the fact that Ontario's tourism contributes $6.8 billion to its economy and employs some 500,000 people. In the light of the reduction in spending by his ministry, can the minister tell us whether his government has changed its mind about the importance of tourism and recreation in this province?

Hon. Mr. Eakins: I assure members that this government is very committed to the tourism industry of this province. They will note that in the Treasurer's budget it was the first ministry to be mentioned at the top of the budget speech, not at the bottom, as it has been in the past. As far as the former budget is concerned, the figure my honourable critic is looking at includes a one-time only payment to convention centres and other areas such as the domed stadium. If he takes that out, he will find that our budget is increased by about 23 per cent. This shows that we are committed to the tourism industry in this province.

Mr. Baetz: The Minister of Tourism and Recreation has made the flat statement that the budget has been increased. He did not give any figures. I have the budget here in front of me and I see that in 1985-86 Tourism and Recreation has $146 million, whereas back in 1984-85 it had $159 million. Will he please explain a little further and in more detail why he is saying his budget has increased? All of this is in the light of the fact that gasoline taxes have gone up and taxes on liquor and food have gone up and, as he knows, the tourism industry does not like that.

Hon. Mr. Eakins: The member, who was the previous minister, does not need to lecture this government on the importance of tourism. They are the people who put the tax on food in this province, and we are the ones who are going to take it off.

I want to say also this is the only province in this country that does not have a tourism marketing agreement. That is another thing we are going to make sure we are going to get, and we are going to increase the profile of tourism.

Mr. Baetz: On a matter of privilege, Mr. Speaker: The minister has not answered the question.

Mr. Speaker: Order. It is not a matter of privilege. The time for oral questions has expired.

Mr. Brandt: We have two more minutes.

Mr. Speaker: They were already added.

PETITION

ROMAN CATHOLIC SECONDARY SCHOOLS

Mr. Morin: Mr. Speaker, I have a petition signed by 2,238 constituents and presented by the Knights of Columbus, council numbers 7893, 8008, 8092 and 9005, concerning the extension of funding to Roman Catholic secondary schools in Ontario.

MOTIONS

PRIVATE MEMBERS' PUBLIC BUSINESS

Hon. Mr. Nixon moved that Mr. McKessock be deleted from the order of precedence for private members' public business and that all members of the Liberal caucus listed thereafter be advanced by one place in their turn.

Mr. Wildman: I do not think we should delete the member for Grey (Mr. McKessock).

Hon. Mr. Nixon: I would point out that this is with the agreement of the honourable member.

Motion agreed to.

COMMITTEE SITTINGS

Hon. Mr. Nixon moved that the standing committee on resources development be authorized to meet in the morning of Wednesday, October 30, 1985, to finalize its recommendations concerning the 1984 annual report of the Workers' Compensation Board.

Motion agreed to.

Hon. Mr. Nixon: Just before I make the next motion, I want to direct members' attention to page 33 of Orders and Notices, on which the allocation of the various estimates during this session has been printed. The estimates, by agreement of the three House leaders, have been allocated among the committees and the numbers of hours available for debate, at least for the early estimates, are designated.

ESTIMATES

Hon. Mr. Nixon moved that in connection with the appropriate standing order 45(b), which directs this matter, the estimates as they are presented to the House be referred to the committees as indicated in the allocation statement printed in Orders and Notices today; and that the supplementary estimates as they are tabled in, the House be referred to the same committees to which the main estimates have been referred for consideration within the times already allocated for the main estimates; and that any order for concurrence in supplementary supply be included in the order for concurrence and supply for that ministry.

Motion agreed to.

3:20 p.m.

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

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

Mr. Foulds: I spent almost all of last weekend working on this speech. I do not know whether the results will show it, but I was very conscious of the importance of the occasion. First, the first budget by a new government in 42 years is perhaps a momentous, if not historic, occasion. Second, it is no secret that the New Democratic Party's response and attitude towards the budget is important first for the life of this parliament and second -- let us be honest -- for the life and growth of our party itself. I want to indicate right off the top that our party will support the budget.

In the hurried judgements that all of us made on budget day last Thursday, we gave this budget a passing grade but not a heck of a lot more. That judgement still stands. We describe it and believe it to be a caretaker budget; it is half a budget for half a year. However, in the real politics of the Ontario Legislature of this day and age, half a loaf, as the cliché goes, is better than none. Let me set a context for members. Last May the people of this province signalled their desire for change. For the first time in 42 years, the voters sent a clear message that they had had enough of Tory government. Conservative government was stale, unimaginative and too ridden with the kind of inertia that fails to respond to dramatically changing problems.

Through the signing of our agreement with the Liberals, my party gave the Liberals confidence for two years in exchange for certain commitments on long-overdue policy initiatives and changes. Of course, that list was not exhaustive, but it did mark a clear departure from the past, and it recognized that the people of the province elected enough New Democrats to make a change in government precisely because what we were saying made more sense than what the Conservatives could offer.

I intend to make a response as detailed -- perhaps a little more detailed -- as tough, as honest, as clear and as constructive as I can, and perhaps more so than the Treasurer (Mr. Nixon) would like. I want to serve notice that our party intends in this parliament to do exactly what we have done since we first won representation here in 1943. We will support those programs we find supportable; we will oppose the programs we find objectionable and hurtful to ordinary Ontarians.

Hon. Mr. Nixon: The honourable member's party had 35 members in 1943. What happened?

Mr. Foulds: The Treasurer's party had 15, I think. What happened?

Hon. Mr. Nixon: Six.

Mr. Foulds: It was only six.

We will be proposing alternative programs, as we have always done where we see social and economic inadequacies and injustices. In other words, we will be serving as a clearly independent and constructive party.

Our agreement with the governing party last spring was just that: an agreement, nothing more and nothing less. It has been called an accord, which it is, but "accord" is just a diplomatic term for "agreement." It is not a coalition, nor is it an alliance. We intend to keep the lines of communication with the government open; we do not intend to close them. We intend to use every channel at our disposal to make the points we want to make, and one of those channels is right here in this Legislature.

The governing party did undertake certain obligations, as we did, to create a new government and a new atmosphere of change in this Legislature so that reform, progress, improvement and change could take place. That resulted in the present minority Liberal government. When asked on Tuesday last whether there was enough meat in the budget to merit NDP support, I indicated that the meat happened to be hamburger, rather than steak on the one hand or dog food on the other, but it was palatable.

Before I get into the substance of the budget, I want to deal with a couple of stylistic matters about both the budget and the present Treasurer. I was much puzzled by my own reaction to the budget. If I may say so, that reaction was --

Hon. Mr. Nixon: Enthusiastic.

Mr. Foulds: No, it was not enthusiastic; but I liked the style of the budget. I found myself saying to myself: "There are many easy targets in this budget. There are obvious tax increases." However, there was a policy in the budget that made me as a person want genuinely to like it.

Except for one matter of substance, the paltry amount of social assistance increase, I was not offended or affronted by this budget as I was by the budget of the member for St. Andrew-St. Patrick (Mr. Grossman) in 1984 or by the budget of the member for Muskoka (Mr. F. S. Miller) in 1981. Naturally, I asked myself why. The answers, although simple, took me some time to arrive at. There are three.

First, the budget, although very limited, does not pretend to be other than what it is. Like the Treasurer himself, it is a workmanlike, well-intentioned, straightforward document. It is mildly reformist and fiscally conservative. The Treasurer was offended when on radio I called him a genuine Progressive Conservative, but that is an apt description of the man.

The budget may be merely a fiscal document rather than an economic document in style, but at least it is not inflated. Unlike the member for St. Andrew-St. Patrick's grossly inflated document of 1984, which was entitled "Economic Transformation," it does not pretend to be grandiose. To give the Treasurer some credit, it is more than merely clever fluff.

Second, the budget does not try to victimize anyone. Although it does increase the tax burden for some, those tax increases, except for the gasoline fuel tax, by and large are progressive in nature. It does not, as some previous budgets have done, rip up previously arrived at agreements or contracts. It does not try to roll back wages. It does not have a nasty little bit of unfairness built into it, hidden away in some corner. For example, it does not increase sales taxes or Ontario hospital insurance plan fees. Third, and for me personally, its most important aspect in style is that it has a respect for language. It calls a surtax a surtax, not a social assistance maintenance tax. Why is this important? As George Orwell said in his brilliant essay Politics and the English Language:

"[The English language] becomes ugly and inaccurate because our thoughts are foolish, but the slovenliness of our language makes it easier for us to have foolish thoughts.... To think clearly is a necessary step towards political regeneration: so that the fight against bad English is not frivolous and is not the exclusive concern of professional writers."

Therefore, I salute the Treasurer in a minor way, because the language of his budget is the language of modest rhetoric. It uses language, as Orwell says, "as an instrument for expressing not for concealing or preventing thought." The language of the Grossman, Miller, McKeough and White budgets, and even that of Charlie MacNaughton's budgets in the early 1970s, always tried, in various ways, to conceal or prevent thought. There was something tricky about them. There is nothing very tricky about this budget. The Tories will say there are writedowns, and maybe there is a little bit of a shell game going on there, but in large measure there is nothing hidden and tricky about this budget.

Let me get to the substance and state the obvious. It is a Liberal budget, not an NDP budget. When I said that on Metro Morning last Friday, the member for Muskoka, now the Leader of the Opposition and the former Treasurer, burst out, "Thank goodness!" That indicates to me that perhaps the natural alliance should have been between the Conservatives and the Liberals, because the Conservatives find themselves more comfortable with this budget in substance than they would like to admit publicly. Their discomfort arises because for the first time in four decades they have lost the opportunity, which they had assumed to be theirs by divine right, to set and bring in the budget.

3:30 p.m.

In passing, I want to make note of two items that have focused public attention: (1) the gasoline tax is higher, if only marginally, than the promised freeze on the ad valorem tax would have been and (2) a lot of single cups of coffee and single-scoop ice cream cones are going to have to be bought individually and a lot of small packages of popcorn popped in theatre lobbies to take any advantage of the raising of the sales tax exemption to $1. It cost the Treasurer $36 million. It cost him that much fiscal pain for that piddling amount of progress. Perhaps he should have taken the bull by the horns and gone stronger in that direction.

Hon. Mr. Nixon: It was either-or.

Mr. Foulds: They do not always have to either-or statements. They can just be statements. The Treasurer can make the "or."

Because it is a Liberal budget, it does have major flaws, which I merely want to outline at this time.

1. Aside from youth unemployment, it fails to creates jobs or to tackle the problem of unemployment at all for those 25 years of age and over.

Hon. Mr. Nixon: What about the housing program?

Mr. Foulds: I will get to that in a few moments. It will take me a while to get around to that.

2. Also, because the budget does not deal with an economic or industrial strategy for the province, it fails to mention or deal in any depth with the auto industry, the manufacturing sector or the forestry sector of our economy. In other words, it is a fiscal document rather than an economic document.

3. Although the Ministry of the Environment budget is increased by 18 per cent, there is no establishment of an environmental protection fund, which the Liberals promised as a superfund during the election campaign. We first advocated it in our budget proposals Ontario Can Work in 1983, and by a miracle of conversion on the road to Damascus, the Conservative government promised it in its speech from the throne earlier in this parliament. In other words, there is all-party agreement on the necessity for such a fund, and the Treasurer has not brought it in.

4. The four per cent increase in social assistance payments on January 1, 1986, is simply not good enough. The poor in our society will continue to get poorer. Nothing in the budget gives me more of a sense of anger and frustration about our provincial economy than that does. On Friday, the Treasurer himself said to my colleague the member for Scarborough West (Mr. R. F. Johnston):

"The honourable member hits me where it hurts. The four per cent increase was 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 submit to the Treasurer that he now has the responsibility to take the steps to ensure that it is what he would like it to be. This is a major failure; it is one we recognize and it is one we will be working very hard to rectify over the next several weeks and months.

Although we have severe reservations because of the vagueness and the hocus-pocus regarding the actual funding to achieve the numbers stated, the budget does have some major achievements. There is the announcement of commitment to 10,000 housing starts, 10,000 child care spaces and a youth unemployment program. Further, the budget confirms the previously announced programs relating to a northern Ontario development fund, medically necessary travel for northerners, along with attracting specialists to the north and increased aid to farmers.

I need not go on at great length about the value of these programs, because I am sure the government will do that on every possible occasion. I only want to take some modest personal credit for the medically necessary travel, and I want to give credit to my colleagues in the New Democratic Party, particularly those who negotiated with the present government, for insisting that housing, the child care spaces and the youth employment program were part of the agreement our party arrived at with the Liberals last spring.

Hon. Mr. Nixon: Without them, we would have been all dressed up and nowhere to go.

Mr. Foulds: Wait for it. It is a paragraph away. The minister recognizes the importance and reality of that statement.

Hon. Mr. Nixon: I thought the member might run through that one a couple more times.

Mr. Foulds: We might.

These achievements in the budget are a direct and indirect result of our agreement with the government last spring. They are the main pillars of the budget, the elements that make it meaningful and the mainspring that causes my caucus to support the budget now. Without these elements, the budget would be a well-intentioned but hollow document.

The budget looks towards internal reform in the Legislature, in the Treasury and in the accounting of the province's books, but it does not look outward and give a vision for the province. That is its major flaw and failure.

I want to move to areas the budget did not deal with or dealt with only tentatively. The first is tax reform. Tax reform and tax fairness can be achieved in three ways: (1) lost tax expenditures can be recovered, (2) progressive taxes rather than regressive taxes can be assessed and (3) tax credits can alleviate the impact of regressive taxes on the most vulnerable.

Tax reform is not an esoteric and obscure topic fit only for accountants to ponder. Tax reform is at the heart of social, economic and political democracy. Going as far back as the federal Carter commission and the provincial Smith commission, this has been obvious for almost 20 years. The heart of the ideals of American democracy and of the American Revolution was embodied in the simple call, "No taxation without representation." At the heart of the call for tax reform of this democratic socialist party, the New Democratic Party, is that very principle.

The principle of one person, one vote, is very sound for political democracy, but in the budget and the budget results it is obvious still that some louder voices have been heard. Attention has not been paid equally to the poor and the disfranchised and the marginal in our society. Their voices must be heard if we are to achieve social and economic democracy. That is where we in this party and this caucus differ fundamentally from the Liberals and the Conservatives.

We want to achieve fiscal responsibility. We want to achieve openness in government. We want to reform the budgetary process. More than that, however, we want to reform the budgetary system. Without the engine of tax reform, we cannot achieve social and economic reform, nor can we achieve social and economic justice.

The reason the province does not have enough money to finance and increase social assistance above four per cent, for example, is that it has so far refused to stop the leaks and losses of revenue from our taxation system. Those losses we quaintly call "tax expenditures." Very simply and somewhat crudely put, tax expenditures are the exemptions, deferrals, loopholes, etc., in legitimate taxes that cost the Treasury of this province a lot in revenue.

When I asked the Treasurer about this on Friday, he was able to mention off the top of his head a loss to the Treasury of $185 million on only two taxes. Still, he refuses to make a commitment to publish a full tax expenditure account. Some of these tax expenditures are undoubtedly justified, but many, and probably most, are not, considering the decreasing revenues available to the province.

3:40 p.m.

In our party, we have estimated that at least $1.5 billion is lost to the province in corporate tax expenditures alone. It is potentially the largest single source of revenue available to the province. For example, one point on the personal income tax scale gets us about $150 million in revenue. One point in corporate income tax gets us about $120 million in revenue. Even one point in the admittedly more regressive sales tax gets us $600 million in revenue.

Imagine having $1.5 billion in lost revenues available to us, roughly three times the amount available to us through a one per cent increase in sales tax. Imagine having that available to us without raising taxes and not even looking seriously at this source of revenue. Every $1.5 billion of corporate tax expenditures lost to the provincial Treasury has to be made up in some way.

In Ontario over the years it has been made up with $1.5 billion's worth of personal and consumption taxes, sales tax, Ontario health insurance plan premiums and personal income tax, for example. In other words, middle- and lower-income Ontarians pay a higher burden of taxation than they should have to pay because the province loses $1.5 billion in corporate tax giveaways.

By closing only two of those expenditures in this budget, the Treasurer gained $200 million; just two of them and they were the two easy ones to do. He knows that and I know that. That is a step in the right direction, but it is a long way off. There is still $1.3 billion to look at.

As well as reforming the tax system by gaining legitimate revenues that are at present leaking out of the system for private profit, the government can reform the tax system by building in tax credits to help protect those who are hardest hit by the regressive nature of taxes such as OHIP premiums, property taxes and sales tax. It was, therefore, a major disappointment to us that there was no enrichment of the OHIP premiums assistance, no enrichment of property tax credits and grants for sales tax credits and no enrichment of senior citizen tax grants.

According to the budget, instead of enriching tax credits, the Liberals are reducing the amount they spend on tax credits. In 1984-85, tax credits amounted to $289 million. This fiscal year they amount to $275 million; $14 million less, even before adjusting for inflation.

Hon. Mr. Nixon: Why would that reduction be? Does the member have any idea?

Mr. Foulds: As a matter of fact, no. Does the Treasurer?

Hon. Mr. Nixon: I must find out.

Mr. Foulds: Yes. That is why I bring it to the minister's attention.

In 1975, tax grants represented close to five per cent of the total budget revenue.

Hon. Mr. Nixon: The member is talking about per cent. I can understand that, but the absolute dollar is going down.

Mr. Foulds: If we look at the actual dollars, they are reduced in real terms, in real dollars. This year, tax credits represent less than one per cent of the total budget revenue. Those overview figures are translated into personal hardships for low-income earners and for Ontario seniors who have not had an increase in their tax credits since they were first introduced in 1974. Inflation has eaten away and eroded their real value. In 1974, when the government's tax credit program was fully implemented, a low-income Ontarian received $500 in tax assistance. That is now worth about $216. For those with moderate incomes, the assistance was worth $160; now it is worth about $42.

Hon. Mr. Nixon: A $500 credit on one's taxes payable is not insignificant.

Mr. Foulds: It is not insignificant, but it is not nearly what it has been in the past. It has been eroded away, to damage the buying power and the consumption power of those who would put that money into consumption that would be a stimulus to the economy.

Hon. Mr. Nixon: The cheques are just about ready to go out.

Mr. Foulds: The fact that they are lower does not help their immediacy.

Hon. Mr. Nixon: I had to sign 600,000 of them with personal wishes.

Mr. Rae: Are you telling us the cheque is in the mail?

Mr. Speaker: Order.

Mr. Foulds: If the Treasurer keeps heckling in this way that is reminiscent of the Tories, I may have to change the position of the party during the course of the budget debate.

Hon. Mr. Nixon: I never like campaigning at Christmas time.

Mr. Foulds: Especially if you have a cheque to go out.

It is absolutely essential that this province engage in major tax reform. For far too long, Ontario's low- and middle-income earners have been paying more than their fair share of taxes. They are the most highly taxed in Canada and they pay as much in personal taxes to their provincial government as they do to their federal government.

Finally in this area of tax reform, it is important to note that the Treasurer has not established a minimum corporations income tax or a capital gains tax. So in the area of tax reform, this province has a long way to go.

As I indicated earlier, two other areas of failure are the lack of economic vision for the whole province and, tied to that, the problem of job creation and job security for those over 25. Let me deal with the latter first.

It would now appear that governments have found the political will to seek financing to at least begin the fight against youth unemployment. Even the former Treasurer, the member for St. Andrew-St. Patrick, paid lipservice to that ideal. As well, governments are beginning to pay lipservice to funnelling some money into programs for seniors, as the extra $11 million announced in this budget for senior citizens indicates. However, it would still appear that those literally in the middle, the worker aged over 25 and under 65, gets no encouragement, no extra help, no extra support and no extra training from this budget.

I want to remind the Treasurer of the statement of the Premier (Mr. Peterson) on July 2, the first time he met this House as Premier. He said: "We will also demonstrate that the provincial government has the ability to move the economy and create jobs. We will not sit by and accept the waste of half a million talents." Saying that he would act on the basis of three basic principles, he said directly: "There is no single cure for unemployment. We need a variety of tools, including direct job creation." Unless we count the construction in the housing program, we see no direct job creation in this budget at all for those under 25.

Therefore, for the short term, I believe the government needs to look seriously at a special community works program for every community in this province that faces unemployment at the provincial average or above.

Second, we must look at the structural causes of unemployment in Ontario and that means creating jobs in three ways: (1) import replacement, (2) shorter work time, including early retirement, and (3) aggressively diversifying the markets for our province's goods. Let me deal with them in order.

First, import replacement. We have domestic markets for products as varied as medical supplies, mining machinery, thumb tacks and hockey sticks. We import every one of these products. We are the third largest mining country in the world and the largest importer of mining machinery. We have estimated that we could create something in excess of 7,000 jobs in the manufacture of mining machinery alone over the next 12 to 15 years simply by meeting the demands that are currently there in replacement of the machinery. That is just one example. Many times in this House, we have outlined the examples of medical supplies and a host of other areas.

3:50 p.m.

Second, shorter work time. I want to spend a bit of time on this topic. Technological change is hurtling down on all of us whether we like it or not. We know the new technology can transform people's lives. It can help the handicapped and it can eliminate the worst burdens of work for millions of people. But experts also tell us it can wipe out 500,000 manufacturing jobs and raise unemployment in Ontario to more than 20 per cent by the early 1990s unless we turn it to our benefit.

We must learn, soon, to share the work there is to do on a basis that is fair or we will allow the so-called market system to condemn millions of workers to a life of economic deprivation and social insignificance. Surely technological change should serve our needs, including the needs of the unemployed, not the other way around. Surely people should not be forced to serve the needs of some abstract thing called the economy or some abstract thing called technological change.

Let me just briefly sum up what is happening in our economy:

1. Low-paid service jobs are replacing higher-paid industrial resource jobs.

2. Technology is replacing labour in every sector of our economy.

3. Jobs are being shifted offshore.

4. New jobs are not being created fast enough. 5. Unemployment remains intolerably high. 6. Part-time work is replacing full-time work. For example, part-time jobs have quadrupled from four per cent to 16 per cent of all jobs in the last 30 years.

Let me emphasize that reduced working time is not a panacea or a cure-all; it is not offered as a substitute for a range of effective employment policies, but it is a necessary and absolutely essential part of an overall program to combat unemployment. It is one of the tools the Premier and the Treasurer must look at.

The most important point to remember is that technological change by its very nature allows us to reduce working time. Wassily Leontieff, the Nobel laureate in economics, convincingly argued in a study of Austria that shorter working time can increase productivity while maintaining the gross national product. He also demonstrated that it could reduce a projected unemployment rate from 10 per cent to two per cent.

Let me give members one startling fact. We could wipe out unemployment in Ontario by just one step. If we had the courage and the will to reduce the average work week in Ontario to 32 hours during the next 10 years, we could create something like 600,000 real full-time job spaces in our province alone. Think about that. It is worth making happen.

The real issue is not whether the potential for reduced work time is there or whether the resources are there, but whether or not as a society we consider it to be a priority. We know there will be battles over it. There was a battle over reducing the work week from 60 hours at the beginning of this century. By the middle of this century we had got it down to 40 hours. But there have not been any major improvements in reducing work time since the 1950s. For almost three decades we have been stalled at an average work week in Ontario of between 37 and 40 hours.

There are many ways we can begin the process. I would like to make four suggestions: 1. Make pensions portable from the first year of a person's working life.

2. This would allow us to offer voluntary early retirement with decent pensions for workers after 25 or 30 years of service.

3. Create a work futures training fund that would provide financial support for training and upgrading throughout a person's working life.

4. Immediately reduce the work week through the Employment Standards Act from 44 to 40 hours, beginning with shift workers.

In the third component of rebuilding the economy, as I have said, and I do not want to go into detail, I believe we must diversify our exports, we must market them aggressively and we must reduce our dependence on one market, the United States.

I now want to move on to a topic that was raised by my colleagues the member for Algoma (Mr. Wildman), the member for Sault Ste. Marie (Mr. Morin-Strom) and the member for Nickel Belt (Mr. Laughren) during the interim supply debate, and that is the startling deindustrialization of northern Ontario.

When Lee Canada Inc. in North Bay closed last Friday, northern Ontario was left with just four secondary manufacturing plants that employ 200 or more people and that are not related to the pulp and paper industry, the sawmills or Algoma Steel Corp. Ltd.

Those four plants are Kenroc Tools Inc. in North Bay, which employs about 200; Du Pont Canada Inc. in North Bay, employing about 400; Can Car Rail lnc. in Thunder Bay, which employs about 400; and Canadian Shipbuilding and Engineering Ltd. in Thunder Bay, which employs between 250 and 350. In an area larger than the size of France, in an area from the Quebec to Manitoba borders, there are just four secondary manufacturing plants employing 200 people or more that are not related to the resource industries.

It shows, in a startling way, how vulnerable the economy of northern Ontario really is. That economy is based entirely on the resource sectors of mining and forestry and the transportation sector. I will get to the tourism industry in a minute. The shameful way the previous administration has allowed our forests to be depleted and to become, in essence, a nonrenewable resource in some areas, means that even the 10 pulp and paper mills in northern Ontario do not have an indefinitely secure future.

Although tourism is a valuable tertiary industry, it is not a sound sector for a region to base a mature economy on entirely. It is an add-on. In times of recession, for example, tourism is often the first sector that gets hit because people pull their dollars out of there first.

The future of the young people of the north was brought home forcefully in a news story carried last week in the Globe and Mail by Mick Lowe from Sudbury, entitled "Jobless Figures Tell an Ominous Tale Despite Sudbury's Superficial Bloom." The end of the story went like this:

"But the most telling insight into Sudbury's future comes when a middle-aged bureaucrat is asked what he sees in store for his own children. `I have a daughter who is just entering high school,' one civil servant responds. `I tell her to get the best education she can and then get the hell out of this town. I would be very surprised if she were able to get a good job in Sudbury.'"

I would not go that far, but two years ago I came to the personal and heart-breaking realization that in all likelihood my own two sons, aged 11 and 12, will not be able to seek their jobs, their livelihood and their homes in northern Ontario. They will have to seek their futures in jobs outside of the region that I was born and brought up in, that is my home, and that I have tried to represent and seek social and economic justice for in the past 14 years. Like all things political, it really hits home when it hits personally. That middle-aged bureaucrat and this middle-aged politician are saying that a succession of administrations have failed northern Ontario. They have extracted the wealth, the resources and the talent, and they have failed to reinvest in the future of our region.

We in the New Democratic Party say that the new northern Ontario development fund is a step in the right direction, but it is only a small step. Giant strides need to be taken soon, long before the five-year northern Ontario development fund expires.

Whether it is the north, the south, the east or the west of this province, job creation is not an abstract principle. Job creation is the major way to combat poverty, not unemployment insurance or social assistance. Valuable though those programs are, that is not the way to combat poverty. To combat poverty, one has to create jobs.

When this party talks about improving social and economic justice, we are not talking in abstract terms. We are talking in concrete terms. The budget must be more than an accounting exercise. The Treasurer admits that growth has slowed in Ontario and that the Ontario economy will generate fewer jobs next year. Having admitted those facts, the Treasurer proceeds to ignore the economic developments in this province. That is the fundamental weakness of the Liberal budget.

4 p.m.

My leader has said that without the accord, without the agreement of this party, the government budget is all dressed up with nowhere to go. That point is underlined when it comes to economic issues. There are a number of serious economic challenges confronting Ontario, and the Treasurer has simply ignored them.

A budget must respond to the issues of wealth creation and wealth distribution. The Treasurer indicates that in 1986 the unemployment rate will average 7.7 per cent, down a half a percentage point from 1985; but that rate of reduction will be the lowest and the slowest since the start of the so-called recovery.

When we speak of an unemployment rate of 7.7 per cent, it is too easy to lose sight of the fact that in 1981 the unemployment rate was 6.6 per cent. In 1986, after four years of the so-called economic recovery, unemployment will remain approximately one fifth higher than in 1981. That is simply not acceptable.

Furthermore, the relative recovery in employment seriously masks some fundamental problems. During the recession Ontario lost 297,000 jobs in the goods-producing sectors of the economy; we have recovered only 214,000 of those lost jobs. In manufacturing we lost 177,000 jobs and have recovered only 119,000. In other words, fully one third of the manufacturing jobs lost during the recession have yet to be recovered. The budget fails to address these developments.

It is too easy for a government to be lulled by the apparent shift in the economic growth to the service sector. The recent report of the Ontario task force on unemployment and new technology has argued, "High unemployment levels in all industries, including service-related industries, depends to a large degree upon the healthy economic performance of our goods-producing industries."

I submit to the House that this administration so far, like previous administrations, has not taken steps to produce a healthy climate to induce a healthy performance for our goods-producing industries. It is not good enough to be content, as the Liberals are, with the relative rise in employment.

As I have outlined in regard to the north, the Liberals have ignored the regional variations in employment recovery. Of the 10 cities in Ontario for which Statistics Canada provides data, five have unemployment rates higher than the provincial average. The unemployment rate in Sudbury is 78 per cent higher than the provincial average. In St. Catharines-Niagara, despite the recovery in the automotive sector, the unemployment rate is 26 per cent higher than the provincial average. It is clear that we need a sectoral strategy and a regional economic strategy, but the budget is silent on these issues.

This is the third time I have had the privilege of replying on behalf of our party to the budget. Frankly, I always find these occasions demanding and difficult, and this one is perhaps the most demanding and difficult of all. "Challenging" is the word that is used to mask both the demands and difficulties.

It is demanding and difficult not for the reasons that outsiders would think, not for political reasons but for human reasons. When one is a budget spokesman or a Treasury critic, one can too easily become immersed in political, economic and fiscal jargon. It is too easy to put the triple-A credit rating ahead of people. It is too easy to talk about enhanced trade versus free trade, to talk about global product mandating, to talk about deindustrialization and to talk about billions of dollars. Those phrases roll trippingly and easily off the tongue of the spokesmen in this House.

I always try to remember, as I approach a budget, that at the heart of it all are people; at the heart of it all are individuals, the people for whom a budget or an economy should be designed. I try to remember my friend or my neighbour who lost his job through no fault of his own at the height of the recession and never has recovered it, and who subsequently lost his home.

I try to remember the 19 people who died in the Extendicare London Nursing Home recently. I try to remember the street people, mostly natives of Thunder Bay, the disenfranchised, whom my colleague from Scarborough West has documented so well in his report, The Other Ontario. I try to remember the men and women of all ages who come into my constituency office every week, desperately seeking work.

I want to quote from a speech made by Bishop John O'Mara, the Roman Catholic bishop of Thunder Bay, in April of last year. He said: "Our society considers capital as a dominant principle of economic life. This orientation directly contradicts the ethical principle that labour, not capital, must be given priority in the development of an economy based on justice. We grow and mature through the work that we do, through the challenges we meet, through the responsibilities we accept. Work puts order into our lives and gives us a sense of accomplishment too. Work in some form or other is necessary for human survival."

That is the reason we in the New Democratic Party put such an emphasis on job creation; that is why we believe job creation is the best weapon we have to combat poverty. We believe it is the best weapon we have to enhance human dignity.

I do believe the provincial government can and does have a special responsibility, the responsibility to show leadership courage and initiative. I believe that as a parliamentarian and as a democratic socialist. I remain an optimist and an unrepentant democratic socialist. I believe and my party believes labour is more important than capital. I believe that without labour there is no such thing as wealth and without work there is no such thing as creativity. Work, whether it is the work of a mother, the artist, the labourer or the businessman is a key ingredient in shaping our society and in shaping our very natures.

In the months, weeks and days ahead, we in the New Democratic Party will be working with every ounce of strength at our disposal to achieve equal job opportunities for all in this rich and wonderful province. The business of government is people, and people cannot continue to be sacrificed on the altar of an abstract thing called the economy. The economy has to be designed to serve the needs of people.

We believe in this party that the politics of hardheadedness, the politics of fiscal responsibility must and can be combined with the politics of warmheartedness.

Hon. Ms. Munro: Before he leaves, I want first to congratulate the Treasurer for an outstanding performance last Thursday.

Hon. Mr. Nixon: I will be right back.

Hon. Ms. Munro: One comment I have heard is that central casting could not have come up with a better actor to play the part, and I could not agree more.

In his blue business suit, the Treasurer was the personification of fiscal responsibility. Far from suffering from stage fright, he seemed to bask comfortably in the limelight, and well he might. He received rave reviews from most of the critics. The Toronto Globe and Mail, for example, called his presentation "a shrewd budget" and the Toronto Star hailed it as "a good start." Even a columnist in the Toronto Sun gave "old Brant county farmer, Bob Nixon" credit for "a pragmatic political document."

On Friday morning I addressed a breakfast meeting of the Hamilton Chamber of Commerce where a large number of corporate, industrial, business, social service and educators attended. Half of my remarks were dedicated to the budget. My immediate impression was that the budget was received as one put forward in responsible terms, balancing both social and economic concerns.

Headline comments in the Hamilton Spectator indicated accurately that richer families would shoulder the burden of the tax changes and that "Nixon planned to clean up trickeries on assets." The budget was received with cautious optimism from local officials. Universities and colleges, of course, expected more. Municipal, hospital and public housing officials were generally pleased.

4:10 p.m.

On the question of transfer payments, it appeared that Hamilton was comfortable. Hamilton Alderman Don Gray, for example, who chairs the city's finance committee, described increases as reasonable. Peter Hill, spokesman for Hamilton Civic Hospitals, said he was encouraged by an increase in the health care budget. Arnold Krever, director of the Hamilton Board of Education, said the increase sounded promising but added that he would have to wait for additional applications to the government.

That evening I was present with the Treasurer as he addressed the ethnic media. I think this fact signals to the ethnic community that he is indeed opening up the budget process and does care enough for those small community papers to be present with them and to explain any questions they may have that their readers are interested in. I applaud his grass-roots approach.

Much of the Treasurer's confidence in the House on budget day came from the reassuring presence of his wife Dorothy, known in Brantford as the power behind the milk stool. All kidding aside, his budget does reflect his rural roots. It is a practical, down-to-earth, no-nonsense document. It is candid, open and clear. What you see is what you get.

I understand that a back-room adviser to the former government remarked that we finally have a Conservative Treasurer after waiting 42 years. I suppose that is a compliment and it does reflect the general focus in the media and public reaction on the fiscal implications of the budget. However, this budget is more than a financial and accounting document. It is also a road map for the achievement of the social and economic goals of our new administration. It is the beginning, "A first step," in the words of the Toronto Star editorial, "towards open, competent and compassionate government."

Let me comment briefly on the major financial issues before moving to the broad social ramifications. The Treasurer has opened up the books, removed accounting anomalies and written off overvalued assets, such as the Suncor shares and Ontario Land Corp. holdings and mortgages. He has also met expenditure commitments to hospitals and municipal transit, for example, which were not funded in the estimates inherited from the former government.

With a clean slate we now have a more realistic and a more easily understood financial picture. I compliment the Treasurer for his decisive action to rationalize provincial finances and to produce a balance sheet that reflects the true state of affairs. We now know where we stand, and that knowledge is a prerequisite for sound financial planning and management.

The Treasurer has also taken action to ensure that the Ontario government's partners -- municipalities, school boards, universities, colleges and hospitals -- know where they stand. He has notified these institutions of their transfer payment levels not only for the current year but for next year as well. This information will create a more certain environment so that our partners can bring good management and a more businesslike approach to their responsibilities.

The province has also acted to deliver better value for the taxpayer's dollar. We have constrained unnecessary and unproductive expenditures and eliminated unnecessary agencies. In all, we have trimmed spending by more than $260 million to keep expenditures under control.

It is important to stress that the budget actions to discharge the Suncor debt, restore advances to school boards and meet unfunded commitments represent extraordinary, one-time items in the accounts. Without these extraordinary measures, the budget holds net cash requirements to a level below that of last year. The implication is clear. We in Ontario can enhance the quality of life while living within our means. We can afford improvements to our vital social and human services.

As the economic outlook presented in the budget indicates, our economy is strong. In the May 2 election the people of Ontario sent a message that some of the fruits of our economic growth should be invested in more responsive government programs and services. The people of Ontario want to show compassion to the less fortunate and they want to remove barriers to equal opportunity. This is the mandate to which Thursday's budget responds.

We recognize full well that tax increases are politically risky. The Treasurer has acted with courage in his measures to raise the revenues we need to start building the kind of society we want. The Treasurer has designed these taxation measures, using the principle of fairness.

Our taxation policy is based on the principle of pay as you can. This budget eliminates or reduces Ontario income tax for 390,000 low-income individuals through an enriched Ontario tax reduction program. Contrary to opposition forecasts, we have chosen not to increase the regressive sales tax which affects most those who can afford it least. Instead, we have relied primarily on the progressive income tax system, based on ability to pay, to achieve an equitable sharing of the responsibility to pay for public programs.

Quite rightly, the budget opposes the federal government's planned $500,000-lifetime capital gains tax exemption. As the Treasurer has observed, this tax break is more likely to stimulate speculation in Florida real estate and foreign securities than productive investment in Canadian industry. Ontario believes the capital gains tax exemption should apply only to family farms and small business.

We are drafting proposed amendments to the federal-provincial tax collection agreement to allow Ontario to continue taxing capital gains, except in these two categories. The capital gains exemption is, in effect, a giveaway to affluent taxpayers. The revenue lost would have to be made up by lower-income earners, and that is simply unfair.

I respect the Treasurer's determination to maintain Ontario's credit rating. The budget presents a responsible fiscal plan which deals with outstanding financial problems, such as Suncor, in a businesslike manner. Because of the sound fiscal policy and the favourable economic outlook, the security Ontario offers investors is stronger than at any time in recent years. But we must never let the credit rating become an end in itself. If the choice is between jobs and triple-A, we will take jobs any day.

The media focus on the Treasurer's courageous and sensible financial policy has tended to obscure the equally important social impact of this creative and compassionate budget. Housing, education, health care, child care and northern services are social concerns that are being addressed. By the very fact that they address questions of individual accessibility and equity, they will impact on the economic strength of this province. They will also impact on the ways in which individuals are able to contribute, participate and benefit in the world of work, recreation, leisure and culture.

I am honoured to lead off the government's side in this debate, but the Premier did not call on me because of my in-depth knowledge of finance and the budgetary process, I speak rather as the member for Hamilton Centre and as a member of the government. I am also here as the Minister of Citizenship and Culture. Taking these together, I believe I have a first-hand knowledge and understanding of how budgets affect people's lives.

This budget deals directly with the critical challenges facing contemporary Ontario society. It promises a brighter future for our children and our children's children. It is truly a people's budget. The document offers hope and support for senior citizens, students, working parents, young people and those receiving social assistance. It is sensitive to the demographic and industrial changes the province is now undergoing, and it is a compassionate response to the needs of those who have been left behind in the march of economic progress.

As an educator by profession, I am deeply impressed by the budget's renewed commitment to education as an investment in the future. We are keeping our pledge gradually to increase school board support by raising the 1986 general legislative grants by 5.4 per cent. In addition, a $25-million education capital fund will significantly boost the $67 million in next year's basic allocation for capital purposes. The new money will allow school boards to begin building much-needed new facilities in fast-growing communities and to modernize existing schools.

4:20 p.m.

The Treasurer has dedicated $80 million in 1986-87 for the colleges and universities excellence funds. We are countering the harm done by chronic underfunding of the post-secondary system. The money will enable universities to update student and library equipment, step up research activities and bring new blood to the ranks of the faculty. The excellence funds will allow colleges to purchase the latest teaching equipment and will enable both colleges and universities to undertake badly needed capital repairs.

Before entering the Legislature this spring, I was director of the Centre for Continuing Education at McMaster University. I am well aware of how much this additional financial support means to the academic community of faculty, students and administrators. The government is particularly determined to broaden access to the post-secondary system by lowering financial barriers.

With this budget, we will increase funding to the Ontario student assistance program in 1986-87 by eight per cent while holding increases in formula tuition fees to four per cent. We believe every Ontarian with the talent and ambition to complete college or university studies should have the opportunity to do so, but we must not and will not overlook our less-educated young people who are trapped in a vicious circle. They find themselves unable to get a job without practical experience and unable to get experience without a job.

Last week, the Minister of Skills Development (Mr. Sorbara) announced the aptly named Futures program. This is designed to provide on-the-job training and encourage educational upgrading among those who have left our school system before gaining the skills required to participate in today's world.

The Futures program offers a guarantee of one year's valuable work experience for those young people facing serious barriers to employment who make a personal commitment towards secondary school graduation. It offers up to 16 weeks of on-the-job training for young persons electing that option. Futures also provides candidates who require pre-employment preparation with training in basic social and work skills.

This new initiative replaces a patchwork of six existing youth employment and training programs which had created inconsistencies, gaps, duplication and, more important, frustration. Through Futures, we are keeping our promise to consolidate our programs so they are understandable and accessible to the public; so they are the programs of youth in Ontario.

The youth unemployment rate now stands at more than 12 per cent. The Futures program represents a concerted and meaningful attack on this intolerable waste of lives and talents. It is being well received in the community.

This year we will spend $133 million in providing support to 56,000 hard-to-employ young people across this province. For youth programs as a whole, the budget announced a $75-million increase for 1985-86, to $175 million, and a further hike to $200 million in 1986-87. By the end of next year, these funds will create employment opportunities and training places for more than 230,000 young persons.

In another move to smooth the transition between school and work, we will encourage co-operative education programs in which students alternate periods of study and employment. I attended the 65th anniversary celebration of Delta Secondary School on Friday evening. This particular budget item raised a great deal of interest and expectation, not only from graduates of Delta Secondary School but also from young students who were sitting there wondering what their future would be in the years ahead. Over the next three years, the province will provide school boards with $30 million to support co-operative programs for high school students.

The budget reinforces the province's partnership with municipal government. In addition to raising the basic allocation to the municipal sector in 1986-87 by 4.2 per cent, the budget creates a municipal improvement fund. In the coming fiscal year, the fund will devote $60 million to special road renovations and urban transit. Communities around the province will soon learn the details from the Minister of Transportation and Communications (Mr. Fulton).

The quality and quantity of our housing supply have a critical impact on the social fabric of our communities. As a major priority, the government is developing an integrated housing strategy in response to the problems of the housing sector. As a first step, we are expanding the supply of affordable rental housing. The budget has allocated funds for the construction of at least 10,000 additional nonprofit housing units in the next three years, including more than 4,000 units for families who will receive rent-geared-to-income subsidies.

In a parallel measure, we will reinforce the private sector role. Interest-subsidized loans will be provided to developers to stimulate the construction of 5,000 rental housing units. A valuable spinoff of these two programs will be the creation of more than 30,000 jobs.

In addition to affordable housing, today's young families also require improved child care programs. More than 20 members of the Liberal caucus attended the Ontario Coalition for Better Daycare, an indication of the great interest of this caucus in working towards better housing and better child care. The budget provides for an additional 10,000 subsidized child care spaces. Priority will also be given to rural and underserviced areas and to children with special needs. The coalition recognized these positive steps.

In further measures to help children, the budget allocates funds to provide higher benefits for the children of social assistance recipients, and for handicapped children in particular. Resources have also been set aside to increase the shelter subsidy under social assistance to help offset high shelter costs in urban areas. I look forward to the early announcement of the details by my colleague the Minister of Community and Social Services (Mr. Sweeney).

It is not only the younger generation but also the oldest who most need government attention. This government is moving to address the challenges posed by the expansion in the number of senior citizens. Our overriding goal is to assist the elderly to preserve their health, independence and participation in the community. The budget provides $11 million on an annual basis to strengthen support services for senior citizens and to begin the process of revitalizing community care.

Ontario's health care system must be kept at a state-of-the-art level. The budget announced that the total allocation for hospital operating costs for 1986-87 will be increased by a very substantial 8.3 per cent. The new money will include an increase in the basic allocation plus funds to respond to the rising demand for hospital services and to deliver new, approved hospital programs.

We will also provide financial assistance to northern residents who must travel long distances to obtain necessary medical care that is unavailable in their communities. This measure will help to remove financial barriers to access to specialist health care services. The Minister of Health (Mr. Elston) has also developed a complementary program to encourage more medical specialists to establish practices in northern Ontario.

Health care and post-secondary education in Canada have long been recognized as shared federal-provincial responsibilities. Ontario is most apprehensive about federal plans to reduce the growth rate of transfer payments to the provinces in these two areas. Unless the federal government changes course, our health and education systems will lose $2 billion in federal support during the next five years.

As the Treasurer emphasized, Ontario is determined to strengthen our post-secondary institutions and we are determined to meet the health care needs created by an ageing population and new medical technologies. We will continue to urge Ottawa in the strongest possible terms to maintain the traditional federal-provincial partnership and to withdraw the proposed transfer cuts.

4:30 p.m.

The provincial budget expenditures on education, training, housing, health care and other public services represent significant progress towards a better life for Ontarians. These programs and initiatives respond with compassion and social justice to the needs of the new Ontario. But even those who feel compelled to judge programs by the bottom line should applaud these measures, for this spending is more than social overhead.

In today's global economic competition, we must base our search for excellence on the premise that our people represent our most valuable asset. To be productive, people require housing, education, training, good health and cultural opportunities. These expenditures on human services are not frills but worthwhile productive investments in the very foundation of our economy.

The Treasurer stressed that the government is developing a fresh, comprehensive approach to industrial policy to improve our long-term economic performance and job creation potential. As Minister of Citizenship and Culture, I was particularly heartened by his determination to strengthen our service sector, which includes cultural activity as a major component.

Culture in Ontario makes a $3.5-billion contribution to our service economy and generates much tourist traffic. An estimated 172,000 Ontario jobs now depend directly on culture and the arts. This is only the beginning. Our future growth prospects are becoming even brighter as the service and information economy matures. The government will take action to help our cultural communities and enterprises seize these emerging opportunities.

The province's immediate economic objectives are set forth in the budget. Economic development in northern Ontario ranks high on the agenda. I recently had the chance to visit the Science North complex in Sudbury, which is a tremendous educational and cultural resource for the region as well as a powerful magnet for tourists. The facility exemplifies what government and local communities can accomplish through teamwork and co-operation.

In early December, I will be touring four small northern centres and while there will speak to a conference on the Wawatay Native Communications Society. The trip will give me direct exposure to the emerging self-reliance of our native peoples, and I am looking forward to it.

To capitalize on northern ambition and drive, the government has created a special $100-million northern development fund. Over the next five years, this fund will support economic development initiatives of the Ministry of Northern Affairs and Mines to create viable and lasting economic activity in the north.

The reform of the provincial mining tax will have a positive impact on an industry that is vital to the economic health of northern Ontario. The Treasurer has proposed changes that would simplify the tax without loss of government revenue. The amendments would replace the current graduated rate structure with a flat 20 per cent tax rate, scale back processing allowances and streamline administrative provisions. My colleague the Minister of Northern Affairs and Mines (Mr. Fontaine) will introduce legislation to be implemented in April 1985 after full consultation and discussion.

Many of our family farms are caught between low cash receipts on the one hand and heavy debt burdens on the other. In response, the budget provides $50 million for the Ontario family farm interest rate reduction program to help farmers reduce the cost of their long-term debt to eight per cent for this year.

The Treasurer has allocated a further $20 million as the province's share of this year's payments under the tripartite stabilization plan for red meat producers. Ontario is also developing a $6-million transition fund to assist tobacco and other farmers leaving the agriculture industry.

The major source of new jobs in the province is the small business sector. The entrepreneurs of Hamilton and elsewhere welcome the $5-million increase in the budget of the small business development corporations program to $30 million this year. In a boost to our emerging information industries, the budget adds computer software development as an eligible business activity. The Treasurer is also modifying the SBDC program to stimulate the economies of northern and eastern Ontario. Compared with the rest of the province, investors in these regions will benefit from a higher incentive rate, a lower minimum capital requirement and a broader definition of eligible business.

In the first Liberal budget since 1943, the Treasurer has made the tough decisions necessary to rationalize the financial affairs of the province and provide the public services our people need. This budget will create a more positive environment for economic growth and a wider range of opportunities for all Ontarians. The overall impact will surely benefit the clients of my ministry who are trying to find a niche in the new society.

The budget will also equip young people to face the future with confidence. It will expand our housing supply, enhance our health care system and strengthen our schools, colleges and universities. It will help farmers, senior citizens and small business people. It will raise welfare benefits for children and improve access to child care. It will accelerate development in northern Ontario, and it will improve the fairness and equity of Ontario's tax system.

I believe a new spirit of openness and co-operation is guiding the deliberations of this assembly. This is a spirit I personally have tried to foster by instituting a policy of informing all members in advance of citizenship or cultural grants being awarded in their ridings. We believe sincerely that stewardship of the public purse is the responsibility of all sides of the House.

It was in this spirit that the Treasurer tabled a discussion paper on opening up the process of budget preparation. The paper proposes the creation of a new all-party committee of MPPs to hold open pre-budget hearings, a reform that would broaden participation in the budget-making process.

I look forward to the remainder of this budget debate. As the Premier said in his July 2 statement, "We are committed to making minority government work, and our aim is to make use of the talents of all legislators. In this House, everyone will count."

This budget fulfils the social and economic commitments as outlined by the Premier on July 2. It represents a fiscally responsible plan to finance the everyday business of government and pay for the priorities of our new administration. The government welcomes the participation of all members as this House collectively addresses the budget challenge faced by the Treasurer, which is to balance carefully, social responsibility with fiscal responsibility.

Mr. McCague: Mr. Speaker, I understand there are no further speakers for today on the budgetary motion.

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

Hon. Mr. Nixon: Mr. Speaker, I am concerned about the hour, but the pressure to participate in this debate at this time does not seem to be unduly high. For that reason and with the understanding that we will continue with the debate tomorrow, Thursday, Friday and next Monday, I will move the adjournment of the House.

The House adjourned at 4:38 p.m.