Hansard Transcript 1986-Oct-22 | Legislative Assembly of Ontario

"The United Senior Citizens of Ontario are greatly concerned about consumer abuse and unfair competitive practices on the part of commercialized cemetery companies operating in Ontario. As you know, some of these corporations are buying up funeral homes and competing against small independent monument builders in an attempt to form a monopoly on the so-called `death industry.'"

Mrs. King would like the government to put an end to the high-pressure sales tactics of these tax-exempt companies.

I very strongly concur with the views expressed by Mrs. King on behalf of the senior citizens of Ontario. I have had the opportunity to discuss the issue with Bill Geiger and Brian O'Brine of the Ontario Monument Builders Association. The OMBA is concerned that multimillion-dollar commercialized cemetery conglomerates are taking over the provincial market and requests the government to enact legislation to maintain a distinct separation among cemeterians, funeral directors and monument builders and eliminate the tax-exempt status of any cemetery which competes against taxpaying private companies.

I strongly urge the government to take immediate action to resolve this important issue.

NUCLEAR DISARMAMENT

Mr. R. F. Johnston: I rise today to remind members that this is International Week for Nuclear Disarmament as declared by the United Nations. After the recent failure of the summit in Iceland, a lot of us whose hopes were raised on the one day were feeling very bitterly disappointed on the next. Many events are happening all over Ontario. In Toronto this weekend there will be a large rally on Saturday at noon, followed by a peace festival at Nathan Phillips Square later in the afternoon.

There are many ways in which the people of Ontario are expressing their views on this matter, and I am allowing members of the Legislature to take their part. Three years ago, I introduced a resolution to make Ontario a zone free of nuclear weapons. It was defeated at that time, but it will be reintroduced on November 13. I expect all members to be in their seats and to give support at that time to express our will as politicians in Ontario that Ontario should be freed and out of the madness of the proliferation of nuclear arms.

I expect many members will be lobbied in the next little while by people in their constituencies. I encourage members to speak with them and learn from them why this would be an important thing and a practical thing to do in terms of helping the world to move away from the nuclear armaments race and towards the sane policy of a world free of nuclear arms.

ONTARIO PUBLIC LIBRARY WEEK

Mr. McGuigan: Today in Blenheim, the community is celebrating Ontario Public Library Week with the official opening of the newly renovated and expanded Blenheim branch of the Kent County Library. Unfortunately, because of my duties here in the Legislature, I cannot be present in Blenheim to participate in this very important cultural and educational event. However, my wife is standing in for me.

The bookshelves and the card files of the Blenheim library have been witness to generations of children, students, professionals and those who read for the pure entertainment and relaxation a good book can offer.

I would like to take this opportunity to congratulate the Minister of Citizenship and Culture (Ms. Munro) on her efforts to continue the growth of library facilities across the province. I repeat her statement of yesterday: "Ontario public libraries play a critical role in the development of our social and cultural consciousness. Libraries are an essential part of our identity as Ontarians."

The minister's generous contribution of $57,500 to the expansion of the facilities at the Blenheim library is, in my opinion, very well spent public money. It is my belief that if we had to choose one building to remain from some catastrophe, we would choose the library. A person might think of the post office or the police station or the firehall, but within the library is the knowledge of --

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

INSURANCE RATES

Mr. Sheppard: To the disappointment of young and old alike, the oldest hand-painted carousel in Canada, and perhaps North America, stood silent this year at the Roseneath Fair for the first time in 57 years. Why? The sole reason is that the Roseneath Fair was unable to obtain liability insurance anywhere. If it cannot get insurance next year, the fair board may be forced to sell its beloved carousel.

The carousel, which was originally built between 1894 and 1904, was purchased by the people in Roseneath in 1929 and has been the highlight of the Roseneath fair until this year. As a boy, I looked forward to the rides on the beautiful carousel; so did my children and grandchildren. The merry-go-round of 40 handcrafted horses predates the restored wooden carousel at Canada's Wonderland by at least 25 years and may be older than the racing derby ride horses at the CNE. It would be a crying shame for Roseneath to have to give up the carousel it is so well known for on account of inability to procure proper insurance. It has been a local landmark and source of pride for the residents in the community of Roseneath.

TARIFFS ON SOFTWOOD LUMBER

Mr. Morin-Strom: It is time this Liberal government started taking our forest industries more seriously. The 15 per cent tariff on softwood lumber announced by the United States this week will damage an important part of this industry at a time when northern Ontario is already reeling from an unemployment rate double that in southern Ontario. Yesterday the Minister of Industry, Trade and Technology (Mr. O'Neil) admitted that Canada made a mistake by offering a 10 per cent increase in stumpage fees. It has not done our case any good. The minister said it could weaken our case and that we should deal with this issue by fighting it straight on and not giving in in any way.

Surely Ontario and Canada gave away the store with the 10 per cent offer. The Americans did not have a legitimate case and may well have backed down, as they did three years ago, except for the incompetence of our negotiators. I hope this reversal by the minister is a sign the Ontario government is also reconsidering its position on free trade negotiations. Trade talks have to be completely refocused to serve Canadian interests, particularly in regard to settling of current disputes. Our concessions to the US must end.

In northern Ontario, the government has to focus on action that will build and improve our forest industry. The minister should look at some of his own studies. The minister's forest industry automation study from November, for example, recommended first and foremost the need for marketing and manufacture of higher value-added products and the need for new processes to support higher value-added manufacturing. This is where we have to go to create meaningful employment in northern Ontario.

AIR-INDIA DISASTER

Mr. Offer: I am pleased to rise to inform the House that a dedication ceremony will be held this evening at the Credit Valley Hospital. It is going to be held by the Air-India flight 182 memorial fund committee. Through donations and fund-raising activities, this committee will have collected a little more than $100,000.

The Air-India flight 182 tragedy left in its wake grieving families and friends in communities across the province, depriving loved ones of that most precious of all gifts, life. It brought together the bereft in a spirit of mutual concern and support. Out of that unity was born the Air-India flight 182 memorial fund and a commitment to preserving the memory of those who perished.

It is a tribute that in the time of a disaster of this magnitude comes hope for many in the future. This hope is due in large part to the funds being raised and donated to the Credit Valley Hospital. Countless persons will benefit from these funds through increased hospital services and the spirit and memory of those who lost their lives in Air-India flight 182 will endure for ever.

MINISTRY HIRING

Mr. McLean: I find it incredible that the Ministry of Government Services found it had to hire 194 people to fill what I must consider newly created positions. These new hirings took place in a span of just four months, between January 17, 1986, and May 22, 1986. The salary range goes as high as $58,000. There are five pages full of these hirings. I totalled one set and came up with a maximum salary of $908,000 per annum. Theoretically, we can extrapolate these figures and come up with new hirings at an estimated salary outlay of $5 million.

I am delighted to see the cleaners, the blue page telephone clerks and telecommunication account clerks find employment, but I am concerned with what appears to be a potential for a $5-million increase in the government payroll.

14:12

STATEMENT BY THE MINISTRY AND RESPONSES

TARIFFS ON SOFTWOOD LUMBER

Hon. Mr. Kerrio: I want to update members of the Legislature this afternoon on the latest developments concerning the decision of the United States Department of Commerce regarding Canadian softwood lumber exports to the United States.

On Monday I told the House that Ontario's position was that the provinces, the federal government and industry had to fight this decision to impose a 15 per cent countervailing duty on our lumber and, above all, that we had to stand united in our efforts.

I said Ontario would do its utmost as part of a Canadian team. Yesterday, at a meeting with my provincial and federal counterparts, I advanced this position during a detailed discussion of the options that are open to us.

I am pleased to say Ontario's view prevailed at this meeting. All parties agree with our position that we must fight to reverse this decision. At this point, we are working together to investigate all diplomatic and legal channels to bring home to the US administration why this unfair decision must be reversed.

From a legal point of view, it is clear to all of us that the preliminary decision is highly questionable. It is manifestly weak in its analysis and contrived in its evidence. We are advised that it is seriously flawed. In addition, following legal advice that the preliminary decision is faulty and our own identification of major errors, officials, including those from Ontario, are preparing a basis for refuting the decision.

Through this kind of solidarity, we will stand united in our fight to oppose this threat to a vital Canadian industry. We will fight this ruling, we will fight it together and we will fight it hard.

Interjections.

Hon. Mr. Kerrio: Wherever.

Mr. Foulds: He will fight them with beer bottles; he will fight them with wine in the corner stores.

Mr. Speaker: Order. I have not called for responses yet.

Mr. Bernier: I am pleased to respond for our party to the knee-jerk statement by the Minister of Natural Resources with regard to a very serious situation, which will have disastrous effects right across northern Ontario. I cannot believe the minister would bring in such a simple statement as he has this afternoon, telling us absolutely nothing. The only thing it does tell us is that he is finally aware of the seriousness of this situation.

The minister sat down yesterday with his counterparts to look for some kind of global consensus. I am amazed he would waste all his time doing that when he knows it was strictly a political decision in the United States. It had to be announced before the congressional elections in the United States in November. Why does he not find his backbone and get down to Washington where he belongs and fight for Ontario?

Mr. Brandt: Who speaks for Ontario?

Mr. Bernier: That is correct. Who speaks for Ontario? I am disappointed with the minister's statement and his actions to date. I think they are meaningless. I do not think the commitment to northern Ontario, about which we hear the Premier (Mr. Peterson) talk so much, is very real. It is certainly not real in this statement. This is a terrible statement that tells us nothing. I can guarantee that nothing will come out of the minister's efforts, because they are way too soft.

Mr. Harris: I was a little surprised to hear the minister say today: "Ontario's view prevailed at this meeting. All parties agree with our position. We must fight to reverse this decision." What finally prevailed was the position of the Progressive Conservative Party of Ontario. We hope it is not too late. Certainly, it will still be at great cost, threat and expense, but it is the position that prevailed. Why did it take the minister so long to get there? It was probably his lack of understanding about trade vis-à-vis Canada and the United States and of what is going on down there.

Following yesterday's meeting with the federal Minister for International Trade, the House is today being treated to the spectacle of watching the government try to bolt the barn door after the horses have run off. Those of us on this side of the House are pleased that the members opposite have perhaps learned something from a year and a half of inaction and lack of understanding of what is going on. Perhaps they have learned something and are now attempting to copy our successful efforts of 1983 and 1984 to defend Ontario's share of the $3.7-billion worth of Canadian exports in softwood lumber to the United States.

The government has had a lot of knee-jerk reactions to try to explain its incompetence. I read in today's Globe and Mail that it might be thinking of establishing an office in Washington now. It was not very long ago that it closed an office in Philadelphia that had, among other things, the support of the AFL-CIO and the unions in the United States. On the trade issue, it helped us penetrate those markets for our Canadian companies and helped us fight the buy American policy now becoming more prevalent in the United States. The office was within a couple of hours' drive of Washington. It was our access to Washington, and the government shut it down. Its knee-jerk reaction now is, "Maybe we should have an office down there." It is typical of the way the government is all over the map.

The minister likes to talk about savings. He talked about the savings when he shut down that office. Has he thought through this whole budget? Given the fact that fighting a tariff decision will be costly, much more expensive than preventing an appeal and a fight, will the minister explain to the Legislature how much of the legal costs will be borne by the Ontario taxpayers in comparison to that paid by the governments of British Columbia and Quebec, whose stumpage fees have enraged the Americans and have caused the problem?

Mr. Foulds: I have a few comments, as will some of my other colleagues, about the statement by the Minister of Natural Resources.

One is reminded that timing is everything in politics and everything in courage. This ministry and this government found their politics and their courage too late. This is the only government I have seen that can pretend to be fighting when it has already retreated. Last week, when the announcement first came down, the Minister of Industry, Trade and Technology (Mr. O'Neil) said in this House that quite a bit was done. The Minister of Natural Resources indicated that while 15 per cent was a burden, it was not as bad as 37 per cent. The tone in which he said it indicated that he was initially satisfied that the levy was only 15 per cent.

What has happened is that this government has discovered too late that job security in northern Ontario is threatened by its giveaways over the course of the past few months with the government of Canada. This government has discovered too late that it has a tiger by the tail. It has failed the people of northern Ontario. More than that, it has failed the people of Ontario, just as the federal Tories have failed the people of Canada.

Mr. Morin-Strom: My question for the Minister of Natural Resources is, where is the horse? The barn door has been open for three weeks. We have blown it. The government has given away the 10 per cent, and now it comes back to repent and say the negotiation tactic was wrong; it should have done something else. This complete flip-flop is a sign of the incompetence of the government in handling the whole affair.

It is time the government reassessed its position not only on the lumber issue but also on the whole free trade negotiation. The government continues to sit by while the federal Conservatives are pursuing a comprehensive free trade agreement, giving concession after concession to the Americans. We saw the Foreign Investment Review Agency concessions and we saw the national energy program giveaway. We saw the concession in allowing the Cruise missile testing, and we see them giving away our opportunity for generic drugs and the costs we will have in this country in terms of drugs as a result of the giveaway that is imminent in the pharmaceutical issue today. We lost on the shakes and shingles issue. We have given up concessions on steel. Now we are giving in on softwood lumber. Where is this going to end?

The federal government continues to give these concessions to keep the Americans at the negotiating table in the pursuit of this illusive free trade agreement. However, to this point we have nothing for the effort. It is time to stand up for Ontario's interests, for the manufacturing concerns in the province, for the workers of the province, and say enough is enough. The time for action is here. The Ontario government must take action on the free trade issue at this time.

Mr. Wildman: This minister is to trade negotiations what the Ottawa Rough Riders are to big league football. This government does not understand that it has already given away the store. It is going to be impossible for us to win this appeal now that we have already agreed the 10 per cent should be added to our stumpage fee. Why is it that this minister thinks he can now fight a battle he has already given up on? It is as if he has missed the playoffs and suddenly he thinks he has another chance.

There is no way we are going to win this kind of argument with the Americans when we have already agreed with them that in fact we are subsidizing. It is too late to go back. Why was the Minister of Natural Resources not there when he should have been? He has missed the playoffs, and now he does not have another chance.

Ms. Gigantes: On a point of privilege, Mr. Speaker: I know my colleague, having come from the Ottawa Valley, feels bitterly when the Ottawa team loses; so what he perhaps will use in future allusions is, "It is like being the Liberal team in Sault Ste. Marie."

Mr. Speaker: I thank the member for her point of information.

14:25

ORAL QUESTIONS

SALE OF APARTMENTS

Mr. Gordon: I have a question for the Minister of Housing. It has been reported that Clarkson Gordon has recommended a buyer for a chunk of the 11,000 apartment units that were flipped in 1982. It has also been reported that the offer of the Trevor Eyton consortium to build 1.25 units for every unit converted into condominiums has been rejected. The minister has often touted the need for more supply and has said he is doing everything possible to get it. Will he tell the House why this offer was rejected and what he is going to do about it?

Hon. Mr. Curling: I thought the honourable member would know that I cannot tell him why the offer was rejected. Right now the matter is in the hands of the court to decide the final buyers of the 11,000 Cadillac Fairview units that are being sold on the market. I cannot give the member a reason why it was rejected.

Mr. Gordon: The minister and his staff are obviously interested in supply and are trying to do everything possible to keep a close eye on it. Will the minister tell the House what the capital expenditures on those units likely will be? Will he also tell the House to what extent these capital expenditures will be on those units and how this will affect the tenants under the new provisions of Bill 51?

Hon. Mr. Curling: I thought the member had a proper grip on what was going on in regard to the units that are being bought. I cannot tell him the capital expenditures of the prospective buyers. I do not know their forecasts and what they intend to do with these buildings. However, I can tell the member that we have in place a protection that a ceiling of a maximum of five per cent of the cost can be passed on to tenants with the financial transaction agreement that is taking place.

Mr. Gordon: How will capital expenditures affect that?

Hon. Mr. Curling: I cannot tell the member what the capital expenditures will be. If the member will just listen, he might learn something from this. I cannot tell him what the prospective buyers will do. As I said, I can tell him that the maximum amount of money that can be passed on to tenants is five per cent.

Ms. Fish: In view of the commitment of the Premier (Mr. Peterson) to review the court's final decisions on buyers and in view of the preliminary turndown of the offer to provide 1.25 units of rental for every possible conversion to condominium of any of those units, what steps will the minister take to ensure that if there is any conversion of those units to ownership, there will be a minimum of 1.25 units built for every unit converted?

Hon. Mr. Curling: The honourable member knows that when Bill 11 came into place it was to protect rental units from being converted into condominiums. I can assure her they will not be converted to condominiums. I gather that was the first part of her question. The member is alert to the Trevor Eyton proposal; it was rejected, and he can take it to the courts for an appeal in that respect.

14:30

ORGANIZED CRIME

Mr. Harris: I have a question for the Solicitor General. Allegations made at the trial of alleged members of the Outlaws motorcycle gang have raised concerns about the scope and influence of organized crime in Ontario. Will the minister tell us today what his government has done to deal with what is obviously a growing problem in this province?

Interjections.

Mr. Speaker: Once again, I remind all members that interjections are out of order. They are just wasting other members' time.

Hon. Mr. Keyes: Question time does not provide us the opportunity to give a full lecture on the extent of what our people are doing with regard to the potential of organized crime in this province. We are aware that there are certain areas where concern has been expressed by police officials, and we certainly have steps in hand to look after the problem. We feel it is not deemed serious to the extent that one might be led to believe by members of the opposition.

Mr. Harris: That is a shocking answer. The minister is saying it is not a problem, it is not on the increase, and he is doing things in the normal course of events.

The minister will no doubt be familiar with the Criminal Intelligence Services Canada report, which has pointed to the Triads, the bikers and the Mafia as being the major players in organized crime in Canada. He will be familiar with reports that this city is home to at least four of the 11 Triads in Canada, that they viciously exploit the Oriental immigrant community in this city, that rival Ontario bike gangs are competing for control of the illegal drug trade and that one bike gang is believed to control young prostitutes on the east track in Toronto.

Organized crime activity is on the increase in this province. What has the minister done to support the police and the local forces in their efforts to control this menace? Can he give us one thing?

Hon. Mr. Keyes: Yes. We have provided the manpower for a team that has reviewed very carefully the extent to which there has been any infiltration into the particular areas to which the member referred. If he cares to see some more of the work we have done, we will be more than happy to have him meet and see it.

Mr. Harris: The minister knows his own Treasurer (Mr. Nixon) has said that more co-ordination and what not is not the answer; that, in fact, a special group of advisers is needed to deal with it. He knows that is his own Treasurer's position on the matter. Has the minister called for a commission of inquiry into organized crime in Ontario, and when is this inquiry going to start?

Hon. Mr. Keyes: I have not called for such an inquiry. This government does not deal in consistent appointments of royal commissions. We have people within our own staff who are capable of reviewing it, and that is exactly what they are doing; they are on top of it at all times.

EXTRA BILLING

Mr. Rae: In the absence of the Minister of Health (Mr. Elston), I have a question for the Premier. Given the uncertainty of the answers over the past few days with respect to extra billing, I would like to bring yet another case to the attention of the Premier.

A letter from LIFE, or laboratory-initiated foetal emplacement -- which the Premier will be aware is a special fertility program at the Toronto East General and Orthopaedic Hospital -- has at the bottom of it the names of five medical doctors. The letter is dated September 26, 1986, and it says:

"Dear LIFE patient:

"Effective Wednesday, October 1, 1986, there will be an administrative fee of $500 charged for each treatment. This will be payable on your arrival at the LIFE program office when you arrive for treatment on day five. If you have any questions regarding this administrative fee, please contact your LIFE program doctor.

"Yours sincerely, LIFE program doctors."

Can the Premier tell us what he intends to do about this utterly unacceptable fee being charged to individual patients in Ontario?

Hon. Mr. Peterson: I thank the honourable member for bringing these examples to my attention and to the attention of the minister. As the minister told him yesterday, and I believe the day before, the minister will be chatting in the very near future with the president of the Ontario Medical Association. The minister is looking at these individual situations, and when he has a full handle on all the facts that have come to his attention, as raised by the honourable members and others, I am sure he will be in a position to give him a very clear response to that.

Mr. Rae: Those of us with memories, quite apart from the memories of earlier question periods, will recall that on April 26, 1983, before other events took place, the present Premier had this to say about extra billing:

"We believe there should be universal access to opted-in services, and there are real administrative problems, particularly in some of the specialties -- anaesthetists, obstetrics in certain areas -- but I see it as a safety valve at this point in the system that lets some steam out of the system in this uneasy peace that has been reached between the doctors and the government; i.e. , the taxpayer."

Does the Premier not realize that what we are seeing again, just as we saw it prior to his conversion on extra billing and the passage of Bill 94, is precisely the same set of problems -- indeed, in some respects, the same set of specialists -- only a different technique is being used with the same result and the same burden is being placed on the individual patient? He converted once and he was a born-again opponent of extra billing. When can we --

Mr. Speaker: Order. You have already asked the question.

Hon. Mr. Peterson: I answered the question as well as I could just a moment ago. At the moment, the individual examples are being looked at with respect to whether there is any attempt to circumvent the current law and how widespread the practice is. I appreciate the member's bringing these matters forward. Obviously, each one of them needs to be investigated and the true facts determined in that regard.

As he knows, other discussions are going on with the OMA with respect to the fee schedule. As everyone acknowledges, some adjustments may have to be made in that regard, and the minister is working on those questions at present. I appreciate the member's bringing these matters forward, but I counsel him not to overreact and call for a new piece of legislation until there is a very clear view of how widespread the problem is.

Mr. Rae: Talk about a time warp. In the very same paragraph of his response on April 26, 1983, the present Premier said:

"If it became excessive, if there was not, I think there are individual cases of abuse, but we have to be careful that we do not try to redesign the system entirely that will put so many more stresses on it just because of some of these cases."

The Premier's answer today is exactly the same as it was back in April 1983; only now we need a second conversion, a second response.

I wonder whether the Premier is aware of the case of a Dr. Paul Bernstein. Since I have been asked by his own minister to name names in the Legislature, I have no choice but to do so. He is a doctor of obstetrics and gynaecology at Mount Sinai Hospital, whose letter to his patients begins, "The recent legislation enacted by the Ontario government, Bill 94, has made necessary a change in the billing mechanisms in my practice." He is charging his patients, in bills they are receiving in some cases after the birth of their child, a standard fee of $250.

What does the Premier intend to do about a practice that is not simply confined to a few cases? If he wants us to pile them higher and deeper every day in this Legislature, we will do so until he is prepared to act to end extra billing.

Hon. Mr. Peterson: I suspect my honourable friend is going to do that, and he is very welcome to bring forward these cases in this House or through any other mechanism he chooses. We have described to him the actions the government is taking at the moment. We are assessing the situation, and we will respond appropriately at the appropriate time.

OCCUPATIONAL HEALTH AND SAFETY

Mr. Martel: I have a question of the Premier, in the absence of the guardian of the swamp, regarding the McMaster University coverup of the health effects on Domtar workers exposed to coal tar pitch volatiles.

The Premier should be aware that, under pressure from the company, the first report done by Dr. Chong and Dr. Haines was rewritten, with the full knowledge of the Minister of Labour (Mr. Wrye), to show that fewer workers were suffering from coal tar exposure.

Why did the Minister of Labour support the second Domtar study, which was done by Dr. David Muir of the McMaster occupational health program and which found that only 15 workers were sick from coal tar exposure, when the original McMaster study found that 45 of the 74 workers were sick?

Hon. Mr. Peterson: I have no idea, but I will speak to the guardian upon his return tomorrow and ask him to respond to the member's question.

Mr. Martel: This problem is serious. Is the Premier aware that although Dr. Muir indicated to the Toronto Star yesterday that the two examining physicians I named, Dr. Chong and Dr. Haines, approved the revised report, this is not true? The two physicians refused to sign the second report, which was done without examining any of the patients. Dr. Muir did not look at a patient.

Will the Premier order the Minister of Labour to clean up Domtar on the basis of the first report?

14:40

Hon. Mr. Peterson: I will take the member's advice to heart. I will discuss it with the Minister of Labour. I am sorry, but I am not familiar with the details the member raises in the House. I will discuss it with the minister, and I hope to have a response very quickly for him. If there are any other facts, I would be happy if the member would share them with me.

Mr. Martel: Since the funding has gone to McMaster University from the province and its conduct in this case is reprehensible, is the Premier prepared to allocate funds now to establish worker-controlled clinics around this province so workers can hire doctors to examine them, so there are no more coverups such as at Domtar, de Havilland and American Can? The list goes on. Will he provide the funding to establish those worker-controlled clinics?

Hon. Mr. Peterson: I appreciate the member's suggestion. I am not in a position to give him a definitive answer to that question today. I will discuss it with the minister and I hope there will be a response for the member tomorrow on the constructive suggestion that he has made.

ALLEGATION AGAINST MINISTRY EMPLOYEE

Mr. Gregory: I have a question for the Minister of Transportation and Communications. No doubt the minister is aware of the allegation that the Outlaws motorcycle gang paid an employee of his ministry to check out probationary club members and thereby undermine undercover police work and put undercover police officers at considerable risk.

Will the minister tell us what action he has taken to substantiate these allegations and to identify the employee of his ministry who is allegedly involved in these activities?

Hon. Mr. Fulton: Because of other commitments and the fact that the cabinet was meeting prior to the House, I became aware of this issue in the press at about 10 minutes to two. I have asked my staff to investigate it as thoroughly as possible and report to me whether the allegations as outlined in the press are accurate. It is a serious matter. We are certainly looking into it. I hope I can have a more complete answer at a later time.

Mr. Gregory: Will the minister tell this House, if the allegations prove to be factual, what disciplinary action will be taken if the employee is identified?

Hon. Mr. Fulton: It would be unfair to the employee in question to speculate at this time. It is a hypothetical question. We do not know whether the allegations are true or not.

OCCUPATIONAL HEALTH AND SAFETY

Mr. Martel: Again, I have a question of the Premier about the swamp. The Premier may be aware that my colleague the member for Hamilton East (Mr. Mackenzie) and I raised the matter of Domtar with the Minister of Labour (Mr. Wrye) in August 1985. We received a response in October, which stated in part, "On that basis then, I will be pleased to provide you with a summary of the survey results and the action which my officials are taking in light of the findings, once the relevant discussions have been concluded."

The Premier might also like to know that a Mr. Brian Verrall, manager of the McMaster occupational health clinic, in a letter of September 1985 said: "In the meantime, our summary report of the health status of the original report stands as is."

Since the minister promised me this survey, he then supplied me with a copy. Unfortunately, I did not receive page 12 with the summary. I got a gobbledegook copy with page 12 ignored.

Mr. Speaker: Question, please.

Mr. Martel: It was a lot of gobbledegook which did not document the number of workers ill. Why was a doctored report provided to me? Why have I not received until this time a report on the findings of that study?

Hon. Mr. Peterson: I apologize to the member, but I have no idea. I will discuss the suggestions he is making in the House today with the minister. When he makes suggestions or allegations in this House, I can assure him we acknowledge his questions and we take those things seriously. I will follow up all the questions he has raised today.

Mr. Martel: Since pressure has been exerted on Dr. Chong and Dr. Haines by Dr. McCalla, vice-president of McMaster, and by Dr. Muir, the program director, both of whom work in an advisory capacity to the Minister of Labour; since I have had to raise this matter in estimates about the pressure being exerted; since Dr. Chong has now been moved sideways out of the occupational branch at McMaster; and since Dr. Haines has been told if he wants his job, he cannot test the patients in the workers' clinic in Hamilton run by the workers themselves, will the Premier order a full investigation into the conduct of McMaster University in this matter and at the same time an investigation as to why the Ministry of Labour allowed the second report to be written to cover up the serious effects on the workers in that plant?

Hon. Mr. Peterson: I am going to try to get to the bottom of the facts as the member presented them in this House. I will have to determine a little later what kind of action to take if we determine that it takes further action than that. We will get a handle on this, share the information with the member and make a determination after those facts are gathered.

RED HILL CREEK EXPRESSWAY

Mr. Dean: I have a question for the Premier. In the past few weeks, there have been growing concerns in the Hamilton-Wentworth area that the government intends to overturn the decision of the consolidated hearings board which approved the construction of the Red Hill Creek expressway. These concerns arise from the fact that it now has been a full year since the board ruled in favour of the project. Can the Premier tell us why this matter has been before the cabinet for a year with no answer and can he tell us when we can expect a decision?

Hon. Mr. Peterson: One of the reasons is that we have had to clean up so many messes that those guys left behind that we are a little backlogged. The matter is before the cabinet committee on legislation at present. There are ongoing discussions. There are a number of propositions, as the member knows. We expect to be able to tell him the results of the deliberations in the not-too-distant future.

Mr. Dean: This issue has been studied for more than 10 years. The Premier speaks of complications. I think the evidence before the consolidated hearings board was very clear. If the legislation committee looks at that, it will see that the complications are very easily resolved. The board listened to presentations for several months and there was a great amount of evidence. It has been studied to death. Can the Premier tell us what information he could possibly be missing after so much study, debate and consultation, or is he deliberately ignoring a very important part of the province, the Hamilton area?

Hon. Mr. Peterson: Not at all. As a matter of fact, I never cease to be amazed when I go to Hamilton and the senior officials tell us how happy they are with the attention this government pays to the Hamilton area. It is a high priority area for this government.

The member was saying that this thing has been discussed for 10 years. That is interesting to know. He is 90 per cent of the problem. Perhaps he will stand up and explain to his colleagues why he held this thing up for nine years. I tell my friend opposite that we are looking at the matter at present. I hope to have a decision in the not-too-distant future. There are a number of things that have to be tied together. I would be very interested in knowing the member's opinion of this entire matter. Where does he stand on the matter?

TARIFFS ON SOFTWOOD LUMBER

Mr. Foulds: I have a new question for the Ministry of Industry, Trade and Technology. On Monday he told the House that Ontario "reluctantly went along with" the federal government's concessions on softwood lumber, even though he indicated the federal government's position was not a good one. Yesterday he is reported as saying, "We should deal with the issue by fighting it straight on and by not giving in in any way." Does he not think it is a little late? Does he not think that he and his government have already sold out the security of jobs in northern Ontario? Does he not think that it is time he resigned?

Hon. Mr. O'Neil: I will reiterate what I said yesterday. I think the rest have sort of come around to the way we expressed ourselves the first time, that they should not have supported an offer. We intend to fight this and we intend to win it.

Mr. Wildman: Can the minister explain how his statement just now that "the rest" -- I suppose he means the other governments in this country -- "have sort of come around" to the position sort of expressed by this government is going to help us in the appeal that has to be made in the United States? Does he not agree that by suggesting a 10 per cent increase in stumpage, this country and this province have given the American industry the ammunition it needs to ensure that this decision is confirmed, if not actually increased, by the end of the appeal period? How can he say he is protecting the interests of Ontario?

14:50

Hon. Mr. O'Neil: We had meetings on Monday evening and we also met yesterday afternoon, into the evening, and the people who were there who gave us the results of the Department of Commerce disclosure conference held Monday feel that we have an excellent chance of winning the case. We intend to fight it and to win it.

INSURANCE RATES

Mr. Cousens: I have question of the Minister of Community and Social Services. For a year and a half now, the insurance crisis has become more and more severe in our province. More agencies of the Ministry of Community and Social Services are being adversely affected because they are not able to obtain sufficient liability insurance. What is the minister doing to help solve this crisis within the agencies supported by his ministry?

Hon. Mr. Sweeney: We indicated to all our agencies that were having difficulties that the Ontario liability insurance group that works through my colleague the Minister of Consumer and Commercial Relations (Mr. Kwinter) was prepared to help them. Up to this point, every single agency, with one exception, the Blue Hills Academy in Aurora, on which we are still working, has had its insurance problems settled by that operation. It would seem it is working successfully.

That is not to suggest that there are not still more problems that will have to be channelled through. We are looking at a whole range of things. We have clearly said to the agencies that there is a mechanism in place. It has worked in every single case, with the one exception that is still ongoing, and we are hoping to get that one settled too.

Mr. Cousens: I compliment the minister for being aware of the Blue Hills Academy situation.

The problem is severe. Whereas they had $5-million worth of child molestation insurance, they can now get only $250,000 of child molestation insurance; whereas before they had $5 million of insurance for athletic injury, they can now get only $1 million liability insurance; whereas before they had $5 million for general liability, they can now get only $1 million. They had 16 members of the board; 10 have resigned. Programs are being cut back. This problem has existed since July 1.

What is the minister doing specifically to solve the problem at Blue Hills Academy? Can he take over the insurance and begin to handle the problem so that we do not have deterioration of services for our emotionally disturbed children?

Hon. Mr. Sweeney: The honourable member correctly recounts the problem; there is no disagreement between us on that. Quite frankly, the problem we have with the insurance industry is that the increases the companies seek refer to situations that have never created a problem before. When we talk to them, they simply say they are anticipating a problem. It is pretty difficult to deal with the industry when it is basing its projections on an anticipation with which we cannot grapple.

The fact remains that there are six members of the board left. We are working with them, and we have even gone to the United States to try to find insurance, particularly reinsurance, if necessary, and we will resolve this problem. We have indicated to the six members who are still left that we will not see them left in any particular difficulty. They are aware of that, and we are working with them. To the best of my knowledge, the programs are ongoing.

TRITIUM REMOVAL

Mrs. Grier: I have a question of the Minister of the Environment about tritium. In 1977, the previous government exempted the Darlington nuclear power development from an environmental assessment. At that time, a plant for the removal of tritium was never mentioned and, therefore, is not part of the exemption order. The minister has now decided that the original exemption order does not restrict the installation of the $120-million tritium removal facility. Does the minister mean by this ruling that once an exemption order has been given for a site, any new projects or additions are not subject to further review?

Hon. Mr. Bradley: If the member is looking for an answer to further projects down the line, which I detect she is --

Mr. Rae: We are looking for an answer to the question.

Hon. Mr. Bradley: Why did the leader of the third party not ask the question if he is going to ask it again now? The member has asked an excellent question in my view.

Mr. Speaker: There is no supplementary.

Hon. Mr. Bradley: I interpret it as, if a future facility were to be constructed in Ontario, would the same rules apply? I assure the member that if another installation were to be constructed -- and I do not know of any plans on the part of the Minister of Energy (Mr. Kerrio) or Ontario Hydro to construct one -- we certainly would not be in a position to have the same rules that applied in the past apply to that facility.

Mrs. Grier: The minister seems to ignore the very dangerous precedent his ruling has set. Is he implying that we can perhaps have a nuclear waste disposal facility at Darlington because of the ruling he has made? Will he call a public hearing into two crucial elements of this project for tritium removal, which must be publicly discussed?

Will he examine the effects of tritium export on nuclear weapons manufacturing and will he allow the public some input into the question of the transportation of tritium from other nuclear plants across the province to Darlington? Does the minister not agree that he must provide the opportunity for some public scrutiny of these two very important questions?

Hon. Mr. Bradley: In regard to its use in nuclear weapons, I can indicate that our government and the minister have indicated on many occasions that we would naturally be opposed to the use of that material for the construction of nuclear weapons. I think we are on record on that.

In regard to the transportation, I think the member does have an area which certainly would fall within the realm of the Ministry of the Environment and I am certainly prepared to look very carefully at that suggestion which has come from --

Mr. Foulds: We have the swamp in the Ministry of Labour and the blob in the Ministry of the Environment.

Hon. Mr. Bradley: It is difficult, Mr. Speaker, to answer these questions when the member for Port Arthur is interrupting.

Mr. Speaker: I appreciate that. If the minister addressed the response through the chair, he might not hear the interjections either.

Hon. Mr. Bradley: I consider myself suitably reprimanded by the Speaker, and appropriately so. The member has a serious question, which Energy Probe, for instance, has brought to my attention. In terms of the transportation, we are exploring that possibility now.

As to the first one, I think that is very difficult in terms of my ministry having a specific responsibility and role over whether or not it will be used in nuclear weapons. The Premier (Mr. Peterson), the Minister of Energy and the government as a whole have said that we are totally opposed to the use of the tritium in construction of nuclear weapons.

FRENCH-LANGUAGE SERVICES

Mr. Gordon: I have a question of the Minister of Community and Social Services. The francophone community in Sudbury and northeastern Ontario is fed up and incensed with the lack of adequate mental health services for children in the francophone community. The minister knows that Franco-Nord has had on his desk now for some months a submission to take over the services from the Sudbury Algoma Hospital. When is he going to do something about this submission?

Hon. Mr. Sweeney: It is true that the request is in. At the same time, in all fairness to Sudbury Algoma, we indicated we would review and audit the program it is offering to see whether or not a transfer -- and we are not necessarily opposed to the transfer. We want to be sure the service is going to be provided properly. We are now in the process of doing a review and an audit of the Sudbury Algoma program. When we have that information back, we will compare it with what Franco-Nord wants to do; and quite frankly, if Franco-Nord's submission is a preferable one and within reasonable price ranges we will consider that option.

Mr. Gordon: In talking about this subject, the minister sounds as if he is a very reasonable person, but this problem has existed in Sudbury now for more than a year. It has been a matter of concern to the francophone community.

Interjections.

15:00

Mr. Gordon: The submission has been on the minister's desk for more than six months. The director of the program at the Sudbury Algoma Hospital resigned in July, saying he was very worried about the way things were going for the children and it was impossible to stay on. Employees in the hospital have resigned because of that programming. Three francophone board members at the Sudbury Algoma Hospital have resigned over this issue. The francophone advisory group resigned as well.

When is the minister going to act? His government promised it would do something for francophones in northeastern Ontario. When is he going to get busy?

Hon. Mr. Sweeney: The member will appreciate, in all fairness and with a sense of justice, that we will weigh the Franco-Nord proposal against a reasonable audit and review of what is ongoing now. Is the member suggesting that I simply accept somebody else's proposal without giving the people who are currently offering the program a fair chance to demonstrate the effectiveness of what they are doing? I do not think that is fair or just. The member would rightly criticize me if I did that.

The second point to keep in mind, given the proclamation of the Child and Family Services Act in November 1985, which has a specific reference to providing Francophone services all across the province, is that we are working with francophone communities with different settings and different needs to set up a number of models as to the most appropriate way to do that.

I recently met with the council and explained some of these. They in turn explained some to me. They agree with us that this is the appropriate way to go. The one thing they did not agree with was that we should automatically accept a proposal coming from someone else without looking at the alternatives. I think that is the just and the fair way to do it.

AID TO DISABLED

Mr. R. F. Johnston: I too have a question for the Minister of Community and Social Services. No doubt he was no less surprised than I about the statement of the National Council of Welfare that there are more poor in Canada today than there were in 1980. The only group that seems to have benefited from social assistance has been senior citizens. The disabled have markedly had no major help in getting out of the quagmire of poverty.

In Ontario today, a senior lives on no less than $727 a month, whereas a disabled person can live on as little as $329 a month, 55 per cent of that amount. When does the minister plan to implement the policies promised by the Premier (Mr. Peterson) when he was in opposition and by the then critic, the member for Windsor-Sandwich (Mr. Wrye), that they would get rid of this inequity and have the same rate for seniors and the disabled in Ontario?

Hon. Mr. Sweeney: The 1986 rate package is the most generous that has been given in this province in many a year. The member will recall the disabled are included in that package, in both the additional $81 million we gave in January and the $25 million that was given on September 1, 1986.

I fully recognize the discrepancy. That is included in our proposals for the next rate package. The member should at least accept the fact that a considerable amount was done in 1986 and more will be done in 1987 and 1988. We have met with the various advocacy groups representing the disabled and discussed with them this phased-in program; it is not going to be done in one year.

Another thing is that we have definitely improved the attendant care program, which assists the disabled to stay in their own homes or in supported, independent-living apartment units. We have done something. Have we done everything that is needed? Certainly not.

Mr. R. F. Johnston: I remind the minister of the figure. The minimum we pay somebody in Ontario who is disabled is $329 a month. Even if we gave him the maximum, that person would still receive $150 a month less than the minimum we give a senior citizen. Where does the minister stand on the principle that there should be equity? How quickly will he bring us to equity?

Hon. Mr. Sweeney: If by equitable the member means there are two citizens in our province who have similar needs and receive dissimilar resources, then I agree with him; that should be made more equitable. We will continue to move in that direction in the way I just described to the honourable member.

USE OF LOTTERY FUNDS

Mrs. Marland: The Treasurer has announced that he does not intend to proceed with Bill 38 at this time, perhaps because he is realizing that the cultural and recreational programs should not be forced to enter into competition for lottery funds with other established social programs.

However, I want to suggest to the Treasurer that his position is simply not convincing and does not go far enough, especially for the thousands of cultural and recreational groups across this province who fear that the minister is only postponing his massive revenue grab until the political climate is more favourable.

I ask the minister to alleviate this concern and demonstrate his commitment to these many thousands of important organizations by withdrawing Bill 38 altogether and assuring this House that section 9 of the Ontario Lottery Corporation Act will be upheld by his government.

Hon. Mr. Nixon: I am sure the honourable member is aware that in the two budget periods during which we have had the responsibility to allocate funds, in both instances we have allocated substantially more dollars than those that came into the Treasury from the allocated lottery money.

I want to answer specifically. In the first year the revenue was $79 million; we allocated $111 million. This year we expect $85 million in revenue and we have allocated $95 million.

If I were to follow the member's direction and use only the funds that come in from Wintario and Lottario, I would have to reduce the money, and I am sure the member does not want that to occur. Any surplus that has occurred comes from those bad old Tory years, when the government of the day did not allocate the money required by law.

As a matter of fact, Mr. Speaker, if you will permit me, to go back to 1981, the money that came in from the two lotteries was $137 million; the Tory government allocated only $74 million. In 1982, $117 million came in; the Tories allocated only $89 million. In 1983-84, there was $117 million again; they allocated only $96 million. The only time all the money was allocated was in 1985, when the revenue was $96 million --

Interjections.

Mr. Speaker: Order.

Mr. Rowe: We on this side of the House have listened to Liberal mathematics for the past three or four days while we have been trying to get one simple answer out of the Treasurer. Will he withdraw Bill 38 or not? That is all we want to know.

Hon. Mr. Nixon: The bill is not necessary, since all I have to do is follow the example of the Progressive Conservative government previously. Although the dollars were allocated, the government never spent them. Any surplus that exists is that which is left over from those bad old days. I do not intend to withdraw the bill.

Interjections.

Mr. Speaker: Order. I am sure the constituents of Bellwoods would like all other members to allow the member for Bellwoods (Mr. McClellan) to place his question.

PENSION FUNDS

Mr. McClellan: I too have a question for the Treasurer, who will know that the Ontario Hydro workers' union is being forced to go to court, I think today, to try to prevent Ontario Hydro, which has a $340-million surplus in its pension fund, according to the government's actuaries, from escaping its $53-million annual service contribution obligation, in spite of the fact that the employees, of course, have contributed $37 million this year.

First, is the Treasurer aware that the Ontario Hydro workers who retired 10 years ago have suffered a 90 per cent loss in the purchasing power of their pensions since they retired and that those who retired as recently as five years ago have lost a third of the purchasing power of their pensions? Can he explain to me once again why he would not use the $343 million in the surplus account to provide inflation protection?

15:10

Hon. Mr. Nixon: The honourable member's question follows up a rather compelling speech he made in the Legislature yesterday afternoon. I did not have a chance to respond to it at that time, and I regret that.

The honourable member also knows the courts have responded quite rapidly in the appeal that the Hydro workers have brought forward, and it may be -- I am informed by a usually reliable source -- that these hearings are progressing either today or in the very near future.

On the other matter, I have to give the same answer I gave the member before. The statute is under consideration, and we intend to bring forward amendments in the near future, but the Pension Commission of Ontario, which I understand is not always found to be correct in the courts, has ruled that Hydro does not have to make that contribution under those circumstances. Anyway, it is before the courts, and we await with a great deal of interest the decision in this important matter.

Mr. McClellan: It remains incomprehensible that the Treasurer would continue to force workers to go to court to protect their own deferred wages even after the verdict of the Supreme Court on the Conrad Black affair when the regulatory agency, the Pension Commission of Ontario, was described by the court in such unusual judicial language as "misleading," "stonewalling," "blissful ignorance" and "undoubtedly negligent."

Here is yet another court case with another group of workers being ripped off, this time by a crown agency. How much longer are the workers of this province and we ourselves to endure this kind of stupidity?

Hon. Mr. Nixon: Under the contempt laws of this province, as we understand them, I am not going to comment in any way on the adjectives used by the court other than to say it was very clear in its rulings in that and in another case. However, the member cannot compare this one in all particulars with the one the court has previously ruled upon. The court is currently undertaking to hear the evidence, and we will have the benefit of its ruling in the near future, but I can assure the member that we will not change the law without giving it careful consideration and bringing it to the attention of the Legislature for debate and disposition by this House, which is what we intend to do in the near future.

NUCLEAR WASTE

Mr. Gordon: I have a question for the Minister of Energy. It is clear from recent events in Ontario -- with the proposal to have tritium, a substance that can make people glow in the dark, transported on the highways of the province -- that the time has come for the minister to see that Ontario Hydro comes out with a very comprehensive plan for the disposal and storage of nuclear waste. That means a long-term plan. When is he going to act?

Hon. Mr. Kerrio: I am sure the honourable member realizes that there is an agreement between the government of Canada and Ontario Hydro, and that there is an undertaking and research going on at Pinawa, Manitoba, for the long-term disposal of nuclear waste. At this point, it is felt that the nuclear waste that is in the swimming pools at the various nuclear stations is quite safe and that the integrity of those systems is unquestionable.

I reassure the member that when we go on this fall with an examination of the safety of Ontario Hydro, in all probability we will take that into account.

Mr. Gordon: I do not accept that answer at all. What we need in this province is a definite commitment from the minister that within 12 months he will bring out a plan for the comprehensive storage and long-term disposal of radioactive waste. That is a number one priority, and it should be brought before an informed public, a group of people who can judge it as such.

At present, we have no guarantees at all, and the minister starts talking about swimming pools. In the select committee on energy, the Atomic Energy Control Board could not give us an answer on whether, if those pools were to lose water, anybody would be safe anywhere near them.

When is the minister going to act? We want action now.

Hon. Mr. Kerrio: I am certain the honourable member realizes that Atomic Energy of Canada Ltd. and the Atomic Energy Control Board are major players in the safety of the atomic process in Ontario, in which we have had a major undertaking. There is a program under way; there will be safe disposal of waste. The reason it is taking some time is that we are taking more care than other jurisdictions on how to dispose of nuclear waste. I am pretty proud of what goes on in Canada as opposed to other jurisdictions.

ASSISTANCE TO FARMERS

Mr. Hayes: My question is of the Minister of Agriculture and Food. I am sure the minister is aware that Ontario ranks well below the Canadian average for assistance expenditures per farm and per dollar of agricultural output. Given the financial crisis in the farm community of the day, will the ministry increase its overall financial assistance to agricultural producers through supplementary estimates this fall and in a new budget in the spring?

Hon. Mr. Riddell: That question indicates the neglect of the agricultural industry by the previous administration. There is no question that the Agriculture and Food budgets of the previous Tory government declined over the years. We are doing our best to try to compensate for that neglect.

Within the 15 months that I have been minister, we have increased the budget by 39 per cent. We will endeavour to implement new programs to assist our farmers. I think we have done a tremendous job. We have extended the Ontario family farm interest rate reduction program; we have put in $150 million more than the $50 million we put in the program last year. A substantial amount will be paid out of the provincial income stabilization program this year.

I think we are doing quite well, considering the kind of thing we inherited from the previous administration.

Mr. Hayes: We realize the previous government did not do a lot of things, but we want to be assured that the minister will not follow suit but will protect the farmers in Ontario.

I realize the OFFIRR program has been expanded and somewhat improved. However, I have to question the recommendation of the interministerial task force on agricultural finance to phase out the program by providing 70 per cent of the benefits for 1987 and 40 per cent of the benefits for 1988. Will the minister assure the House today that he will not accept that recommendation and that he will continue the OFFIRR program with full benefits?

Hon. Mr. Riddell: The honourable member and I do not know what the state of the agricultural industry will be three years from now; so it is difficult to know whether there will still be a need for the OFFIRR program.

The government would rather put in place longer-term programs, and it is working on a national agricultural strategy whereby it can have some kind of stabilization right across the country rather than having provinces implement short-term measures. That was the program of the previous administration for all too long. That administration applied Band-Aids.

This government wants to implement long-term programs; so it is phasing out OFFIRR. In its place, we hope to have much longer-term programs, so that farmers will know exactly what is available for them and can plan their farming careers, not only this year but also five years down the road.

15:20

SALE OF BEER AND WINE

Mr. Andrewes: It must be a quiet day in Brampton.

I have a question for the Minister of Agriculture and Food. It is a similar question to one I asked him 16 months ago, so it is a test. Let us see whether I get the same answer. Last week the Minister of Consumer and Commercial Relations (Mr. Kwinter) tabled legislation in this House that would allow for the sale of beer and wine in grocery stores. The minister knows of the ramifications of the General Agreement on Tariffs and Trade. Does he understand that the obligations of the Ontario government under this agreement will not be met if this proposed legislation is put in place?

Hon. Mr. Riddell: I am sure the Minister of Consumer and Commercial Relations has looked into this matter. I am sure we will not be contravening the GATT agreement with the program we are proposing. However, if we are and if it is made known to us by GATT that we are, we will have to cross that bridge when we come to it.

Mr. Andrewes: Can the minister guarantee that in crossing that bridge he will not attract a single countervailing duty on an agricultural commodity in this province?

Hon. Mr. Riddell: I am not going to stand up and give the member that guarantee. We do not feel we are doing anything that will be countervailable. We are going to work very hard in the best interests of the wine industry of this province. I like to think we can get the federal government involved to the extent that we cut back on some of the cheaper imported wines brought into this country by giving our own wine industry a chance.

YOUNG OFFENDERS FACILITY

Mr. Morin-Strom: I have a question for the Minister of Correctional Services about the difficulties he is having in establishing an open custody facility or youth community residence, as he calls it, for young offenders in the Sault Ste. Marie area. The minister's efforts through the local resident, Ray Dawson, have now been stopped twice, most recently on Monday night when city council ruled that such a residence does not qualify as a group home under city bylaws. What action is the minister taking to ensure that this service and the jobs that come with it will be established in Sault Ste. Marie?

Hon. Mr. Keyes: We are taking action across the province to provide these types of open custody facilities in a great many centres. We make sure that they conform. We do not intend to try to locate them in any place where they do not conform with zoning bylaws, whether it be in the city of Ottawa, where we are dealing with one this week, or Sault Ste. Marie or Brockville. We do conform. We consult with the people and form community liaison committees. When they are eventually formed, we have had great acceptance by the public as witnessed by the five new homes I have opened in Toronto this year.

Mr. Morin-Strom: I do not think the minister's statement reflects what has happened in Sault Ste. Marie, where there has been tremendous rancour and disagreement about the two locations that have been proposed to date. The lack of involvement of the minister and his ministry in explaining to the community the need for the facility and what the facility is designed to do has resulted in tremendous confusion in Sault Ste. Marie about that facility. Can the minister tell us what he is doing on that specific case and when we are going to see that facility come to Sault Ste. Marie?

Hon. Mr. Keyes: I cannot tell the honourable member exactly when that facility will come to Sault Ste. Marie, but it will be there with the support of the public at the time we find an appropriate residence that is in accordance with the zoning regulations of the city, and one that the local organization that seeks out such a facility finds to be an appropriate location. I am not fully aware of the Monday night situation and what may have happened. I assure the member that it will proceed and that there will be a facility in Sault Ste. Marie in accordance with municipal regulations and our criteria for the establishment of such homes.

Hon. Mr. Riddell: On a point of privilege, Mr. Speaker: I have in my hand an advertisement that was put into the Beamsville Old-Timers' Hockey Association tournament program. It has a picture of the member for Lincoln and it reads: "Phil Andrewes, Ontario Ministry of Agriculture and Food. Good luck, old-timers."

I know very much that the member for Lincoln would like to get my job. I can only say to him, wait 42 years. Then we will see what happens.

Mr. Speaker: That is not a point of privilege. I suppose it is a point of information that some members may be happy to have received.

PETITIONS

BEAR HUNTING

Mr. Wildman: I have a petition signed by 592 residents of Algoma district and Sault Ste. Marie and one resident of Scarborough:

"To the Honourable Lieutenant Governor and the Legislative Assembly of Ontario and, in particular, the Honourable Vincent Kerrio, Minister of Natural Resources:

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

"That the use of dogs in the hunting of bear in the province of Ontario be restricted so as not to disturb private land owners and to cause hazard to other game."

Mr. Speaker: There are quite a number of private conversations. It makes it quite difficult to hear. Any further petitions?

TABLING OF INFORMATION

Mr. Gillies: On a point of order, Mr. Speaker: Earlier in the week, in a question to the Premier (Mr. Peterson), I asked about the tabling of computer contracts that we had asked the government House leader for back in the spring session and that were supposed to be tabled on October 16. Our House leader raised this on a point of order yesterday.

My understanding from the table is that these contracts have still not been filed. In view of the opposition's continuing concern about matters surrounding computer contracts, the IDEA Corp. and the proximity of some of the Premier's advisers to these things, I want to impress on the government House leader our great concern that these be tabled as soon as possible.

Hon. Mr. Nixon: I will respond, Mr. Speaker. I really must apologize to the honourable member for misleading him and the other members of the House. On the day he raised it, there was a very large package of answers. I thought it was included in that, but it was not. The opposition House leader brought that to my attention.

Perhaps the member should know that we hope to table the answer on Thursday and that I am informed by the officials at Management Board that more than 400,000 items and more than 600 companies involved had to be checked out. The final computer run on this checkout has just been completed. There are approximately 200 pages to the answer, and it is calculated by Management Board that the cost of compiling the answer is $100,000.

Hon. Mr. Sweeney: It cost $100,000?

Miss Stephenson: For goodness' sake, the members opposite did that every week for years.

Interjections.

Mr. Speaker: Order. A point of order was raised. I guess it was responded to from all sides of the House.

I regret I missed the member for Essex North (Mr. Hayes) on petitions.

INSURANCE RATES

Mr. Hayes: I have a petition here with approximately 750 signatures from Windsor and Essex county, which reads as follows:

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

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

"Whereas the province of Ontario demands mandatory auto insurance and that the present insurance companies are working in a concerted effort to escalate insurance premiums, we, the undersigned, demand that this government take immediate action to provide the province of Ontario with a government-regulated insurance plan, such as that used in British Columbia and Manitoba, to provide a fair and equitable insurance premium for all Ontario citizens."

15:30

REPORTS BY COMMITTEES

STANDING COMMITTEE ON REGULATIONS AND PRIVATE BILLS

Mr. Callahan from the standing committee on regulations and private bills presented the following report and moved its adoption:

Your committee begs to report the following bill without amendment:

Bill Pr11, An Act respecting the Township of Mara.

Motion agreed to.

MOTIONS

PRIVATE MEMBERS' PUBLIC BUSINESS

Hon. Mr. Nixon moved that the member for Simcoe East (Mr. McLean) and the member for Armourdale (Mr. McCaffrey) exchange places in the order of precedence for private members' public business.

Motion agreed to.

ASSISTANCE TO FARMERS

Mr. Hayes: I would like to move a resolution that in the opinion of this House, recognizing that this year and next year the farmers of this province are facing the worst financial crisis since the Depression and it is now estimated that one third of all farmers with Farm Credit Corp. loans are in jeopardy, and recognizing that traditionally Ontario provides substantially less financial assistance to its farmers than other provinces, the Ontario government should, in supplementary estimates this fall and in the new budget in the spring, increase its overall financial assistance to agricultural producers to at least the average level of the other provinces in Canada.

Mr. Speaker: I should inform the honourable member that when I call for motions, they are for regular routine motions. That appeared to be a private members' resolution. I am sure the member will make himself more familiar with the proper procedure for presenting that.

ORDERS OF THE DAY

RETAIL SALES TAX AMENDMENT ACT (CONTINUED)

Resuming the adjourned debate on the motion for second reading of Bill 26, An Act to amend the Retail Sales Tax Act:

Mr. Gillies: Last week when we were last debating Bill 26 members were here in great numbers, partly due to a quorum call at one point, I recall.

Members will recall that we were discussing at that time that feature --

Mr. Haggerty: The member had nothing to offer.

Mr. Gillies: I am sorry, the member for Erie is trying to help me here. I say to the member for Erie that I always draw a big crowd. I remember well when I spoke in the member's riding last year that there were a good number of people there. We will not get into that anyway.

The feature of the bill we were discussing last week is that feature which would see the removal of the sales tax exemption from trucks and trailers manufactured in Ontario.

Without rehashing the ground we covered, this feature of this particular bill causes us great concern because of the effects we feel it could have on the truck and trailer industry in this province, the possible negative effects in terms of the industry's ability to sell its products.

The Deputy Speaker: Order. Will the members of the House please carry on their private conversations outside of the House and not at each others' desks. It is not fair to the member speaking. It is very hard to hear him.

Mr. Gillies: Thank you. I assumed I had the members spellbound at this point, but apparently it had not quite taken effect yet.

Mr. Wildman: The member will have to bind us if he wants us to be part of his spell.

Mr. Gillies: I am not sure, but I think the member for Algoma is suggesting that members will have to be tied to their seats, or something along that line, for this one.

The concerns we have regarding this are very serious. The Ontario Trucking Association has estimated that the effect of this legislation in its first year could be of the magnitude of approximately $65 million in lost sales for the truck and trailer manufacturing industry in the province.

It has a number of suggestions which I will touch on, but I say to the Treasurer (Mr. Nixon) that I really have to wonder why, at a time when the automotive boom is forecast by many as coming to the end of a cycle, at a time when we are concerned about continuing to fuel what is currently a very strong economy, and at a time when we would want to encourage the manufacturing within our own provincial borders of as many auto and auto-related products as possible, the Treasurer would want to remove this incentive, to the detriment of our truck and trailer manufacturers in this province.

We are not relying on supposition. As I indicated to the members earlier in the debate, Mack Canada has already announced, in advance of the removal of the sales tax exemption in January, that it will be reducing production at the Oakville plant, from 17 trucks a day currently to 10 trucks a day as of January 1987. We assume there will be job losses and layoffs as a result of that move by the Mack company. We also have to assume, much as we would wish it otherwise, that those companies that supply Mack and are reliant on it for their own economic wellbeing will also suffer adverse affects and loss of business.

The Canadian Truck Trailer Manufacturers' Association estimates there will be a production decline in 1987 of approximately 27 per cent. This causes us grievous concern. We have a concern anyway about what would appear to be the economic trends in the auto and auto-related industries in the coming couple of years. It would be naïve to assume, and we would be the last to assume, that the kind of boom the auto industry has been through in the past couple of years is going to continue ad infinitum. However, we believe there are measures that could be taken and incentives, such as the sales tax exemption, that could be left in place that would help keep that boom going a bit longer than it may without them.

The Canadian truck-trailer manufacturers also estimate that of the 1,200 people employed in the trailer manufacturing industry in Ontario, up to 300 jobs could be adversely affected by this move on the part of the Treasurer. I have to have a concern, because there is a manufacturer of truck-trailers, the Pullman Trailmobile Co. which, while is not located right in the city of Brantford, in my riding -- as a matter of fact, it is across the boundary line in Brant-Oxford-Norfolk, the riding of the honourable Treasurer; many of the people employed by that company are constituents of mine and others are constituents of the Treasurer.

We have to be concerned. That company has been through some rather rough times in the past couple of years anyway. It does not employ the number of people today that I recall as its historical high in recent years, about 600 employees. There are considerably fewer than that now. I would not want to see that company further disadvantaged by the loss of this sales tax exemption.

The Ontario Trucking Association, realizing that it has not been able to convince the government to leave the sales tax exemption in place, and perhaps as a halfway step towards this goal, has asked the government for a gradual phasing in of the sales tax to try to ease it in and prevent the shock to the industry that might occur with the sudden one-staged phase-out coming in January. It has suggested that the tax be raised from zero to three per cent in 1987, to five per cent in 1988 and to seven per cent in 1989. It feels this would help avoid many of the potentially negative implications that the one-time removal of the exemption would have.

I urge the Treasurer to look at the suggestion. If he is unwilling to leave the sales tax exemption in place, will he at least look at the suggestion of removing it gradually over a period? It is the feeling of those engaged in this industry that it would help ameliorate the problems they anticipate.

15:40

I understand that perhaps not the Treasurer himself but Treasury officials have indicated a concern about the complexity of such a phase-out and suggested it would not be workable. I commend to the Treasurer the fact that there are precedents for this type of action by the government. I can cite the federal government's precedent for the gradual removal of tax benefit with the phasing out of the exemption of the investment tax credit, which the Treasurer well knows is being phased out over three tax years, from 1987 to 1989. If our friends up in Ottawa can find a mechanism to allow for this, I am sure the Treasurer with his great wisdom and with the tremendous resources and talent available to him at the Ministry of Treasury and Economics can also find a way to do it.

At this point, I will leave my notes for a second to talk, briefly of course, about the ministry. I would like the Treasurer to know the enormous respect I have for the officials and the people who work at the Ministry of Treasury and Economics. I happen to believe and say that ministry has the reputation in our public service of being first-class, and I have to concur. I had the pleasure of being posted up there for five or six months when I was Minister without Portfolio responsible for youth and was attached to the Treasurer.

The efficiency, the grasp of complex issues, the experience and the dedication of the people who work in our Ministry of Treasury and Economics is truly awesome. I suggest they have even been able to survive the undoubted shock and trauma of changing government and the takeover by this group of inexperienced and untried Liberals --

Mr. Wildman: Usurpers.

Mr. Gillies: -- usurped as we were, as the crown was snatched from our very head.

I have not seen any great trauma arising from Treasury and Economics in terms of that very efficient ministry's ability to put policy into effect. In terms of administration, it is a first-class operation. We are concerned on this side of the House about the policy direction they receive, but I am not going to stand here and blame Brock Smith and his army of dedicated followers for the loss of the triple-A credit rating.

Miss Stephenson: Which has not been restored.

Mr. Gillies: Which, my friend the former Treasurer reminds me, has not been restored.

I am not going to blame the officials of the Ministry of Treasury and Economics for the increase in the provincial deficit in the Treasurer's first budget. I am not going to blame the officials of that ministry for the $700-million tax increase in the fall 1985 budget. I am not going to blame the officials because we all know the responsibility for these failings, the responsibility for the adverse direction of economic policy in this province, lies not with the officials but with their political masters.

Mr. Brandt: Hear, hear.

Mr. Gillies: "Hear, hear," says my friend the member for Sarnia. The member for Brant-Oxford-Norfolk (Mr. Nixon) knows of the enormous respect, lasting over many years, I have for him. I know, or at least sense, that the minister would not have wanted of his own volition to have seen an increase of $700 million in taxation in 1985. I do not believe the Treasurer, being the hardworking and dedicated person he is, would have wanted to see off his own bat the increase of $500 million in the deficit or the loss of the triple-A credit rating.

Mr. Brandt: How much is that altogether?

Mr. Gillies: It is astounding. My friend the member for Sarnia asked me how much that is altogether. The tax increases coupled with the increase in the deficit last year come to a total of $1.2 billion, and we cannot even count into that the many millions of dollars of additional interest paid in servicing the provincial debt that would have accompanied the loss of the triple-A credit rating.

Mr. Brandt: Is there no end to this?

Mr. Gillies: Frankly, I say to my friend the member for Sarnia, and to anyone else who may be listening, I am stymied by this. If a man of the wisdom and ability of the Treasurer could not have directed that this happen and the very efficient staff of the ministry could not have willingly presided over this catastrophe, then I have to assume the ultimate responsibility stems from he who is responsible ultimately for the policy of the government, none other than the Premier (Mr. Peterson).

The Premier has a much lesser regard for the taxpayers' dollar than does the Treasurer, the member for Algoma (Mr. Wildman) or myself, although the member for Algoma did make a suggestion last year, when I was speaking on a budget bill, that there was a need for a subway from Sault Ste. Marie to Wawa. That, I have to say to the House, would have been fiscally irresponsible and would have cost, by my own very quick calculations, billions of dollars.

I am, of course, speaking directly to Bill 26, as I know you can see, Mr. Speaker.

The next feature of the bill I would like to talk about, although I reserve the right to come back to the question of the truck exemption --

Hon. Mr. Nixon: That sounds like obstruction. What are we going to do about that?

Mr. Gillies: The Treasurer has suggested that my modest intervention in this debate is obstruction. I know this causes alarm and a sudden rush of blood into the heads of most members of the House, because we know what the Treasurer is alluding to. The Treasurer is laying the groundwork for the Liberal strategy for the fall session.

In the context of Bill 26, I suggest the strategy of the Liberal Party in this session, in flagrant denial of the fact that it is sitting here with a minority government in a minority House, is one that more or less says, "If you do not play it our way on every bill and if you do not go along with the way we want everything done in this House, we will have an election."

Hon. Mr. Nixon: Sounds pretty good to me.

Mr. Gillies: The Treasurer voices his approval of this strategy, but I suggest this would be a heinous crime indeed. Just as many considered a previous general election held within the past decade or so to have been unnecessary, similarly I believe any attempt by the Liberal Party to stab its New Democratic Party friends in the back, leave them bleeding in the gutter and go to the people scarcely a year and a half after skulking into office would not be well regarded by the people of Ontario, would be a waste of tax dollars and would be a betrayal of the first order. Let us hope the Liberals do not pursue that particular policy.

Hon. Mr. Riddell: Somebody is up and coming in the member's riding.

Mr. Gillies: The Minister of Agriculture and Food is asking me something, and I cannot quite make it out. That, I might say, is unusual with the Minister of Agriculture and Food. Normally, I can hear every utterance.

Hon. Mr. Riddell: Somebody is showing some potential in the member's riding.

Mr. Gillies: The Minister of Agriculture and Food is asking me whether the Liberals have any potential in my riding. I do not know how familiar the minister is with my riding, but the Liberal vote in Brantford is normally sufficient to guarantee their candidate the return of his deposit. If the minister is asking me whether the Liberals have that potential once again, I suggest they have.

The Deputy Speaker: Meanwhile, back to Bill 26.

Mr. Gillies: Mr. Speaker, I thank you for drawing me back to Bill 26, because there is another feature of this bill that has not received the prominence or the attention that the removal of the truck exemption did but that I believe is very important. It is the removal of the exemption from the amusement tax for nonprofit groups. That one is interesting. I know my colleague the member for Mississauga South (Mrs. Marland), our critic for Culture and Recreation, will be speaking about it at length as the cultural expert she is.

I want to touch on this because, from what I can see in the Treasurer's budget address, nowhere is there any mention of this particular tax move. If I have missed it, I urge the officials of the ministry to draw it to my attention. It is my belief that this feature of Bill 26 has been snuck in with the intention of sliding it by all those theatres and nonprofit groups that will be adversely affected by it.

15:50

Mr. Wildman: A man so cultured should know there is no such word as "snuck."

Mr. Gillies: Is there not? Mr. Speaker, I ask for a reference to the Clerk on this matter. If the past tense of the word "sneak" is "sneaked," then I wish to be corrected. My friend the member for Algoma is a former teacher and I always listen to him very carefully on these matters. I always thought there was a word "snuck," but I may be wrong. If I am wrong on this point, it will not be the first time I have been wrong today or just about any other day.

This amendment proposes to remove the exemption from the amusement tax, which is a 10 per cent tax, given to nonprofit charitable groups for performances that are not amateur or Canadian, Canadian meaning the performances have to have a 90 per cent Canadian performer content.

This will affect not so much our small community theatres as it will places such as the O'Keefe Centre and Roy Thomson Hall in Toronto, Hamilton Place in Hamilton, the Centre in the Square in Kitchener and the National Arts Centre in Ottawa. I have a great concern about it none the less, because we are led to understand by the people who work in this field that many of the shows that are brought in would not fit the exemption, which brings in the cash that allows them to stage Canadian performances.

In other words, if you bring in somebody to the O'Keefe Centre -- I see a group of students in the audience; so I will bring up somebody they would relate to, such as Tony Bennett.

Miss Stephenson: Really?

Mr. Gillies: No. Let me change that. Let us suppose the Eurhythmics are going to play at the O'Keefe Centre a week Tuesday; they are not, but let us suppose they are. The considerable money that a sellout performance by a British group of that calibre would bring into the O'Keefe Centre would allow it to be able to stage some Canadian theatre performances or some Canadian ballet or opera, which might not pack the House but which is important to our culture. The money they make to do that is often from those performances by popular international acts, such as --

Mr. Callahan: Why do you not ask BASS to take off the service charge?

Mr. Gillies: My friend the member for Brampton is most concerned that his favourite, Carmen Miranda, may be adversely affected by this --

Mr. Callahan: Does the member have a home? He is showing his age. She is the one with all the fruit on her head.

Mr. Gillies: I know my friend the member for Brampton is awfully concerned that Carmen Miranda or the next Marx Brothers film festival he would like to attend, in which he has a bit part as a walk-on, may not get the exemption. Right after Harpo goes by chasing the girl with his car horn, there is the member for Brampton with a question to the minister about it.

Seriously, I know my friend the member from Brampton is as concerned as I am about this feature of the bill. While I do not propose to speak about it at length, because that will be the role of my very knowledgeable friend the member for Mississauga South, I suggest to the Treasurer that the concern voiced by such places as the O' Keefe Centre is legitimate. If he puts the blocks to some of the big money draws in these big theatres, it is going to have a direct and detrimental effect on many of our cultural enterprises that benefit from the dollars gained.

It is not a huge deal. It is not the sort of thing on which a government is going to rise or fall. However, I ask the Treasurer whether he might take another look at this one and perhaps listen. With all the attributes I mentioned earlier and all the great resources available in Treasury, there may be a way to amend his bill to accomplish the aim, about which I have voiced a concern. If there is a way to do that, will the Treasurer please bring an amendment forward and, very seriously, we will be pleased to look at it.

Bill 26 has a number of features we are concerned about, and I would say, as I said last week, that one is the change in the food exemption. We can have a bit of fun with it. It is not a huge deal, although it is a broken election promise.

In my opinion, the change in the sales tax on the trucking industry is by far the most serious and negative feature of the bill and will have a tremendously adverse effect on our truck and trailer manufacturing industry. We are also concerned about the amusement tax on the nonprofit groups.

I look forward to the remarks from my colleagues on these features of the bill. I commend my remarks to the Treasurer, and I hope he will look at them perhaps in a mood of sober reflection to see whether there is anything worthy of his attention.

Mr. Wildman: I will speak briefly on this bill and indicate that while I am not in opposition to the changes that are proposed in regard to the removal of the exemption of the sales tax on trucks, in general the Treasurer will be aware that this party is not enthusiastic about tax by sales tax on any kind of product, because in our view it is not the kind of progressive taxation we should be emphasizing as a means of gaining revenue for the provincial government.

I must say that when this exemption was brought in, I did have some difficulty with being able to square the fact that we were exempting tractor-trailers from the sales tax when we still charge sales tax on school buses. It did not seem to me to make a lot of sense that we should be exempting trucks that transport goods around our province but not exempting buses that transport students around the province. It seemed there was some real contradiction in that approach. It seemed to me, and it still seems to me, that we should consider very carefully an exemption on school buses.

I understand the reason for the exemption on trucks: the need to assist the industry in a time when it is in the serious recession. For that reason, and because of our concern about sales tax in general, we were in support.

The argument has been made that the industry has made a comeback, that sales of trucks and tractor-trailers are booming and therefore the industry is not in need of this kind of assistance. I point out, though, that in my part of the province, as in many other parts of the province, there are small independent truckers, whether they are loggers or small brokers, who find it a bit difficult to purchase this equipment. We are talking about very expensive equipment. I dare say the average price of a tractor-trailer is in the neighbourhood of $100,000 or more, and that means the independent trucker probably has to mortgage his house to be able to purchase a new truck. To add the sales tax to that price is to cause some hardship for the small independent trucker.

I understand that right now there is a real rush on orders for trucks, with people trying to get in before the deadline, before the end of the exemption. I have some sympathy with the suggestion that has been made by the Ontario Trucking Association that the reintroduction of this sales tax, if it is to be done, should be phased in over two or three years. I do not think that is an unreasonable request on the part of the OTA, and I join with my friend the member for Brantford (Mr. Gillies) in his suggestion that the member for Brant-Oxford-Norfolk has the ingenuity that might make it possible for him to incorporate that request in the reintroduction of this tax.

16:00

It is important to recognize that while the industry may be booming and there may be a comeback, particularly in southern Ontario, industry of all sorts is not booming in northern Ontario. When we have raised the concerns of the north in this assembly in the past, we have been accused of spreading gloom and doom. This is not gloom and doom, but it is a fact that our industries in northern Ontario, whether they be mining, forestry or transportation, are under serious threat. We have not recovered from the recession the same way that industries in southern Ontario have recovered. There still is a need to provide economic stimulus in northern Ontario to assist us to come out of the recession.

Instead of recovering, the situation in the north has worsened. We have double the unemployment rate and we have many mines that are shutting down and laying off workers. The only bright spot in the mining industry is at Hemlo.

Because of the countervail that has been proposed in the United States, we are now threatened with further layoffs in the lumber industry, the only industry that was a bright spot. It was expanding because of the exchange rates and the ability of Canadian producers to compete. The lumber industry is a very efficient operation in the north. We are able to produce at a much lower price than the Americans and, because of that, we are being hit hard.

Obviously, if the countervail stands, it will hurt the transportation industry substantially in my part of the province. Seventy per cent of the product of the sawmills in northern Ontario goes into the US market. In my area, about 85 per cent to 90 per cent of the products of some mills, such as the Dubreuil mill at Dubreuilville, goes to the Midwest. The vast majority of that product is trucked into the United States; most of it is not sent by rail. I am concerned that reimposition of the sales tax on the sale of trucks all at once will hurt the truckers, who are now working night and day to make a living and to make the payments on their trucks.

I urge the Treasurer to consider the proposal very carefully. I indicate again that we will not be opposing this measure, but if there is a way of easing the blow so that it does not happen all at once, the government should look at it very carefully.

Mrs. Marland: In speaking to Bill 26, which is a bill providing amendments to the Retail Sales Tax Act, I would like to say, as many of my colleagues have already pointed out, that contained within this bill are many hastily conceived changes that have serious consequences to many groups within our province.

The fact that this document does not honour the Liberal government's election promise to raise the prepared food tax exemption to $4 has already been addressed by others. I simply mention it to highlight that it as another unkept Liberal promise.

The impact this document will have on our trucking industry has been mentioned today, especially by my colleagues representing constituencies where the health of the automotive industry is always a major concern. The member for Oakville (Mr. O'Connor) is sitting in the Legislature, and I am sure he will address that very capably at his time of speaking.

I want to spend some time on the alarming indifference this government has shown to our arts community, particularly by slipping in an amendment to the Retail Sales Tax Act that will have serious consequences to the viability of our theatres and serious ramifications to the success of our performing arts community. It slipped in an amendment without even consulting this industry, which will bear the impact.

In reading through the budget document provided in this House on May 13, 1986 -- this is simply a highlight résumé of that document; I have studied this and the complete budget -- I cannot find any reference to an amendment that would eliminate the 10 per cent sales tax exemption that publicly funded and nonprofit theatres currently enjoy. There is no mention at all. I emphasize that, because I find what has happened somewhat underhanded.

I say "enjoy" because this 10 per cent exemption gives these theatres a certain comfort zone that up until now has allowed them to provide solid entertainment to regional audiences where theatres with large seating capacities are simply not available. Those regional audiences should bear the same consideration as any other. More important, this 10 per cent sales tax exemption allows the theatre to use this advantage to subsidize local Canadian performing artists so they might attain the same box-office success at some time.

This House, every theatregoer and, for that matter, every Ontarian should know that this so-called open-door government made no attempt to discuss this matter with the theatre management or anyone else before introducing this bill. It was only when the auditors of the O'Keefe Centre discovered this proposal and consulted with the management that there was any attempt to discuss this with the theatres. Even then, that discussion was initiated by the O'Keefe Centre itself.

Further, when the arts community got together and finally had an opportunity to meet with the ministry, very little was changed. Despite the serious concerns the industry has raised and the very legitimate difficulties this change will create, no effort has been made to delay the passage of this legislation. I have learned that the Treasurer has only this past week responded to those concerns and, almost unbelievably, has told theatres that he will be going ahead with the amendment and that he will look at the effect after it is implemented. What a pleasure it would be if we could have a proactive rather than a reactive government.

I have not found a figure that would indicate just how much additional revenue this proposed change would add to the government coffers, but the Treasurer has indicated this is purely a housekeeping bill. It is simply designed to close a loophole and is not intended to be a revenue grab, and understandably so, because at budget time the Treasurer had the privilege of taking credit for a dramatic increase in revenue and certainly could not have been motivated by that need.

16:10

When the government coffers are full and there is no serious inequity or injustice to address, why would the Treasurer go ahead and introduce this amendment through the back door without consultation and with very little thought to the devastating effect it will have on the performing arts industries? How can the Treasurer in one breath boast about his $10-million investment in the arts package in the budget and then in his next breath introduce this amendment? Let us not forget that in his third breath he took away guaranteed lottery money from the arts community. One must wonder about the extent of this Liberal government's commitment to cultural industries in Ontario or, indeed, whether there is any commitment.

This amendment is hasty and unnecessary. It demonstrates a serious misunderstanding of the benefits of the 10 per cent sales tax exemption and of the actual workings of the theatre industry in Ontario. The effects of this legislation will be numerous and onerous.

The theatres are worried that the proposed change will seriously affect their financial position. Either they will have to absorb the extra 10 per cent for those performances that do not qualify for the exemption or they will simply have to cut back on their programs. For many theatres, profits from American and other foreign shows do help the subsidization, as I mentioned earlier, of Canadian and amateur performances.

For example, the National Arts Centre in Ottawa used $77,000 from profits made from foreign shows to subsidize Canadian acts. Roy Thomson Hall and Massey Hall do not receive funding from any level of government. The removal of the exemption will create numerous problems for them. Foreign productions already operate on very thin profit margins. An increase in the tax will make it impossible to make any money. Thus, the theatres will have to cut back on the number of performances they stage. Roy Thomson Hall and Massey Hall do not want to be put in the position of being forced to ask the government for assistance in order to continue to operate. There is a question about whether there are any funds available at this time of government restraint.

The Centre in the Square theatre in Kitchener estimates that the removal of the exemption will directly affect 70 per cent of its productions. Foreign performances will have to be cut back. Because of the removal of the exemption and because profits from foreign shows were used to subsidize local productions, it will be necessary that local productions be cut back as well.

The money involved is quite substantial. To take 1985 as an example, the O'Keefe Centre here in Toronto would have had to come up with more than $950,000 to cover the amusement tax on non-Canadian performances. I am glad the Treasurer is in the House to contemplate what the O'Keefe Centre will have to do to balance its budget when it has to pay an additional $950,000. The figure for 1985 at Hamilton Place would have been $265,000; at Roy Thomson Hall and Massey Hall, $300,000; and at the National Arts Centre, $240,000.

The government is arguing that the exemption is not fair because other theatres which are run on a profit basis do not qualify for it and must pay the tax, and they compete for many of the same shows. However, under the proposed changes, Ontario Place will continue to qualify for the exemption because it is funded by the provincial government. This is not fair to the O'Keefe Centre or Roy Thomson Hall, which compete for many of the same acts, or for any other regional municipally funded or nonprofit organization.

The Ministry of Revenue has stated that one of the reasons it is removing this exemption is so that commercial operators will no longer benefit from the exemption when they enter into co-sponsorships with theatres and other groups. However, the theatres argue that they should not be penalized because the government wants to remove the exemption for the commercial operators.

This is another example of the government attacking the arts community; and, my goodness, we have a lot of those examples. It has already been hurt by the announcement that lottery funding will be cut back. This proposed change will affect some of the same groups even more.

There are many other costs that theatres will have to incur if the proposed changes become law. Theatre subscriptions, tickets, budgets and promotional materials have already been sold, drawn up and produced. These commitments have already been made. The removal of the exemption will force many changes. Prices will have to be adjusted upwards and budgets amended to take into account the additional 10 per cent burden of the amusement tax.

There are several amendments the theatres are willing to accept which would be easier for them while accomplishing some of the government's stated goals. The government has an obligation to sit down and discuss these with these impacted groups and then to understand the problems, not to go ahead with the amendment and then assess the effect, as the Treasurer has proposed. Those discussions must take place now, not at some time in the future.

If this government of Ontario is sincerely committed to culture and to the arts, why can it not demonstrate that commitment by sitting down before the fact, rather than waiting to see how many people are hurt and whether it is too many or too few? I suppose if it is a few, it will not be concerned; if it is a large number, perhaps it may be. That is not the operation of a responsible government. Therefore, as far as I am concerned, it is a further demonstration that this government simply is not responsible.

This bill must not pass in its present wording. Above all else, it must go to committee for debate and input from the public, that very same public that will bear the brunt and the damage in the long term of a change in the cultural and arts communities.

16:20

The Acting Speaker (Mr. D. R. Cooke): Are there any questions of the member?

Hon. Mr. Nixon: Is it questions or comments?

The Acting Speaker: Both.

Hon. Mr. Nixon: Both; right. I just want to answer a question that the honourable member put rhetorically. The changes are designed to be revenue-neutral, based on the intent of the original amusement tax. The point the member made quite well, I think, was that when performers such as Harry Belafonte and Michael Jackson and shows such as the Ice Capades come to town, it does not make any sense that their performances should be tax-exempt. I do not know what the tickets would cost, probably $20 for not the best seat, and the place is jammed and people cannot get tickets to it. There is not going to be any loss of revenue when the tax is applied.

If Michael Jackson had performed in Maple Leaf Gardens, we would have collected $500,000 in tax revenue, but he very properly and sensibly chose to perform at Exhibition Stadium, which is exempt under the statute we inherited. We are not looking for a revenue grab. We are not penalizing the arts community; far from it, we are increasing our grants and support to the arts community. We want to establish a rational and fair approach to the payment of entertainment tax.

I know the matter is going to be discussed further, and I am looking forward to having an opportunity to defend the government's position in this matter because while I have the highest regard for the member who just spoke, her allegations about motivation in this are very difficult for me to accept. We want to support the arts community, and only by having a fair and equitable tax system can we support it through the administration of the ministry that my friend the Minister of Citizenship and Culture (Ms. Munro) administers. Our intentions are good, and we hope the people affected will understand that.

Mrs. Marland: Am I able to respond, Mr. Speaker?

Mr. Speaker: Up to two minutes.

Mrs. Marland: It is tremendously interesting to hear the Treasurer of Ontario describe this amendment as being revenue-neutral. I would like to see him sit down with the auditors of the O'Keefe Centre and try to defend what revenue-neutral means to them or to any other group that is impacted by this amendment.

I understand completely what happens when the large shows come to this area or to Ottawa; I already addressed that in my speech. The most relevant thing the Treasurer has just said is that he is looking forward to discussing this matter. It is regrettable he is looking forward to discussing it rather than having already discussed it before he slipped in this amendment. That is the part that is a pure sham.

It is an insult to the people in these industries in the performing arts in this province that the Treasurer says he is looking forward to discussing it when he has had ample opportunity to discuss it before sliding in an amendment that was not even in his original budget speech.

Mr. Partington: I am pleased to speak on Bill 26, An Act to amend the Retail Sales Tax Act. First, I would like to speak about something not mentioned in the bill, although it is part of the retail sales tax of the province, and that is a concern expressed to me by many of my constituents in Brock about the exemption for children's footwear which is currently provided under section 5 and the fact that the exemption should be increased to at least $40.

I understand that any pair of shoes priced at more than $30 is taxed at seven per cent and that 85 per cent of all children's leather shoes, including baby boots, are more than $30 in value. Of course, it has been pointed out to me by Al Scotland of Kiddie Kobbler that at a young age boots are replaced every three months.

Children's clothing is tax-exempt up to size 14, which is approximately 12 years of age for children. It is time the government updated its records and its approach by providing a tax exemption of at least $40 on the sale of children's shoes. Perhaps a more realistic figure can be arrived at in consultation with some of the shoe retailers of the province.

This problem has been ongoing for some time, and it is important that the minister address it as soon as he can. In so doing, he will help the family unit, particularly the larger family unit, including young children. I think that is important these days.

Also, it has been pointed out to me by John Morrison, one of the principals of Boot Shop Ltd. in St. Catharines, that such a move on the part of the government would also help the domestic shoe manufacturing industry, because it is the shoes produced by that industry that are being taxed. Most of the cheaper shoes, the ones selling for less than $30, are produced in offshore countries; so the government is unwittingly assisting in the transfer of activity and jobs in that manufacturing sector from Ontario to offshore countries.

I urge the Treasurer to assist the shoe manufacturing industry, to assist workers who have jobs in that industry as well as the family unit, which clearly needs assistance in this area, by increasing the exemption, as he has the ability to do under subsection 5(25) of the Retail Sales Tax Act.

I was just pointing this out as an omission as far as this bill is concerned. This could have been addressed quite properly in conjunction with the presentation of these amendments; otherwise, there is no forum to speak on this very important issue.

Section 9 of Bill 26 clarifies the meaning of subsection 16a(4) of the current Retail Sales Tax Act, which indicates a responsibility for paying a tax as it is assessed. The bill before us adds to the end of that paragraph the words "whether or not an objection to, or an appeal from, the assessment is outstanding."

Basically, the prior section was somewhat ambiguous. An individual who wanted to complain against the amount of an assessment, or whether in fact an assessment was in order, had a right to appeal under the act, but it has been a position of the ministry that to legitimize the appeal, the assessment had to be paid in advance. The wording was not clear on that; so the government has introduced this amendment to make it clear. The clear message is, "If you want to appeal, before we decide whether you have to pay, you have to put up the money in full in advance."

At the risk of simplifying, it is like being charged with a provincial offence or a crime. The tradition, the principle of our law, is that one is innocent until proven guilty. In this case, the onus is reversed: one is guilty until proven innocent. One has at least to come up with the money.

Mr. D. R. Cooke: Which has always been the basis of our tax law.

Mr. O'Connor: The Tories in Ottawa changed it. One does not pay the tax any more.

16:30

Mr. Partington: I understand that was a major issue in this country with respect to the Income Tax Act. A government sensitive to the needs of the individual and concerned about this powerful state of ours -- federal and provincial -- putting its heavy hand on the individual, be it corporate or individual, reversed itself and said: "Yes, that is right. You do not have to pay the tax until a tribunal determines that you have to, provided you go through the process normally."

Therefore, I say section 9 is an attack on the fairness of our system. Certainly we should all pay our taxes, we should pay our fair share and we should pay them when due; but when somebody wants to challenge the right of the state to impose a tax, all or in any amount, then that person, provided he follows the necessary procedures, should not have to pay the amount in advance.

I refer further to section 11 of Bill 26. It provides the minister with improved mechanisms for the collection of a tax that has not been remitted after it has been assessed or if, after appeal, it is found that the money is owing. It gives the government the authority to demand payment from an institution or individual suspected of being about to lend money to the debtor to cover all unpaid taxes and penalties.

This is an unfair step that is being introduced by the government. It will give the government of Ontario privileges over and above those afforded to other creditors in our society and thus a competitive advantage over ordinary creditors in the private sector.

More than that, it interferes with the rights of citizens of Ontario to do business in an honest and orderly manner. The government should always presume that the public is to be trusted and that it is carrying on its business affairs in a manner we can all support. Not only is this a principle we can support; it is also a principle the people of Ontario adhere to in all cases.

As an example, if a general contractor owes the government $10,000 in sales tax and the contractor is installing a parking lot for a business, the government writes a letter to the business and says: "Do not pay Jones Paving $10,000. Pay it to us." The paving company stops paving. In effect, we have a government mechanism that can be totally insensitive to the rights of the two parties. It can say, "Pay it all to us, or do not carry on your business."

This section should be deleted. If the government wishes to obtain rights of levy against third parties, it should go through a formal court process so the parties can clearly put before an independent tribunal the equities of the situation: whether payment should be made in full at the time, whether it should be spread out over a period of time or what can be done to allow people in our society to continue to do business and at the same time honour the law of Ontario.

Thus, in my submission, both section 9 and section 11 should be deleted from this act. As I indicated before regarding section 9, no one should be compelled to pay money before it is properly due.

My friend the member for Oakville will speak with respect to the reimposition of the retail sales tax on trucking. All I would like to say on this is that trucks and tractor-trailers are expensive items. The reimposition of the seven per cent tax in one fell swoop will impair the economy generally. It seems to me that if this tax is to be introduced, it should be introduced in stages, as the Ontario Trucking Association has called for. With the gradual introduction of this tax again over a reasonably short period, there will be less difficulty caused and the same end result will be obtained.

Mr. O'Connor: I also welcome this opportunity to provide some comments with respect to Bill 26, An Act to amend the Retail Sales Tax Act. I wish to bring to the attention of the House and the Treasurer some concerns that I and my constituents have with respect to several of the proposals set out in this bill.

In a general way, it is curious that the Treasurer and the government would see fit to bring this bill forward at this time. It should be noted, as it has been in previous comments this afternoon, that in its budget, the government has chosen to increase taxes this year by about $700 million, and it has chosen to increase the deficit -- which it should be noted declined in the two years under the previous Progressive Conservative government -- by about $500 million.

In addition to those two factors, we have learned that the government is about to have the benefit of a windfall, shall we say, in taxes over and above the amounts projected by the Treasurer in the early part of this year. As yet, the amount is unascertained, but as a result of the current booming economy in Ontario, the government will fall heir to increased personal income taxes, increased corporation taxes and, of course, increased retail sales taxes.

As I say, the amount has not been ascertained, but the combination of the factors I have mentioned makes it curious that the minister would choose this time to significantly increase sales taxes in some areas which I hope to demonstrate to him will cause significant harm to particular industries and to former nonpayers, shall we say, of that tax.

The first area I would like to discuss briefly is that of the proposal to reimpose the retail sales tax on large trucks. We are dealing here with rather significant vehicles, huge tractor-trailers that range in price from some $65,000 to more than $100,000 per unit. By quick calculation, the tax intended to be imposed is a significant factor in the purchase price of one of those units; at the upper end, it is about $7,000 or $8,000.

I am fortunate to have in my riding of Oakville one of the major truck manufacturers in North America. Mack Canada has an assembly plant in Oakville, which I understand currently produces approximately 14 tractor units a day. As I indicated, if the price is in the $65,000 to $100,000 range, one can quite readily see the value in additional sales tax they would be required to pay should it be imposed as proposed on January 1.

Because of the increased demand for trucks in the latter quarter of this year -- an increased demand brought about by the knowledge in the industry that the tax is going on January 1 -- Mack proposes to increase its production to approximately 17 units per day until January 1. In anticipation of this increase, I am also advised that it has recently hired and taken on an additional complement of 126 men, but it has advised these men that on December 23, 1986, about 120 of them will be laid off because of the anticipated decrease in demand for trucks, starting January 1, 1987. Their projection for daily production on January I and thereafter is 10 trucks. That is a decrease from 17 to 10. One can readily see the necessity, therefore, to lay off something in the neighbourhood of 120 workers.

16:40

We should keep in mind too that for every job and dollar lost to a significant manufacturer such as Mack trucks, there is a ripple effect in jobs, production and dollars lost among its suppliers of various goods and services. I would have hoped the Treasurer, prior to introducing this particular section, would have done the necessary calculations and cost analyses on the effect of the reimposition of this tax.

The tax was eliminated from these units by our government some years ago with a view to spurring sales in what was then a flagging industry in southern Ontario. The effect was exactly as required and as desired: to spur the industry. Except for some dips along the way, it has done well since then. Therefore, I would have hoped the government would have tried to assess the job-loss costs, that is, the lost revenue by way of income taxes and sales taxes on products not purchased by those men who have to be laid off as a result of the effect on the industry.

I am talking about one industry in one area. We have to multiply the figure of 126 jobs at Oakville by probably similar numbers in other truck plants and industries that feed the assembly plants around the province. Those men will be on unemployment insurance; they will have less revenue to spend. Therefore, less retail sales tax will be collected as they forgo purchases they would have otherwise made. The whole of Ontario will lose some revenue as a result of the reimposition of this tax.

As I said, I would have hoped the Treasurer would have done the cost analyses to determine the revenue gained, and we wonder how great those revenues will be, given the fact that the number of sales will drop off significantly. At any event, the dropoff appears to be in the neighbourhood of 30 per cent or 40 per cent at the Mack truck plant in Oakville. That is from 17 units to 10 units a day. Taking that into the equation, we wonder whether this is a revenue-producing move on behalf of the Treasurer. I ask him, some time in the near future, to provide us with the actual figures to demonstrate that what he is doing is, in fact, a benefit to the Treasury.

If the Treasurer is determined to proceed with this measure in any event, the really sensible thing to have done would have been that which has been urged upon him by the Ontario Trucking Association, Mack trucks, the Canadian Auto Workers union in Oakville on behalf of Mack trucks and, I am sure, many other proponents who are considerably upset about the reimposition of this tax; that is, why not bring it back in stages?

Why not bring it in over the course of three years, as has been proposed by the OTA: two per cent this year, two per cent next year and three per cent in the final year. The impact would then be lessened throughout that period and would be much more easily absorbed by the industry. There is ample precedent for the imposition of tax and the deletion or taking away of tax over staged periods at both this level and the federal level. I am sure the Treasurer is well aware of that approach. It could easily be managed by his ministry.

The other area on which I wish to make a few remarks is that of the amusement tax, the intention to reimpose the 10 per cent tax on amusement. We have heard from previous speakers of the potential effect of the reimposition of that tax on theatres and larger entertainment events. Included in that proposal is the deletion of a section that previously exempted amateur athletic associations and sporting events. Again, there is an example in my riding that I think is of particular significance. I can give figures the Treasurer may not be aware of and may not have taken into account.

In Oakville, we are particularly fortunate to have been chosen as the permanent home of one of the premier, and to use an overworked word recently introduced into the lexicon of this House by the government, world-class sporting events in the nature of the Canadian Open Golf Championship, which is played annually at the Glen Abbey Golf Club in Oakville. It is a showcase to the world of Canada's ability to stage an event that attracts participants from around the world and attracts interest throughout North America and perhaps around the world. It is televised widely not only in Canada but also around the world.

Hon. Mr. Nixon: They are professionals.

Mr. O'Connor: They are professional golfers, as the Treasurer has well pointed out. However, this event is organized and run by the Royal Canadian Golf Association, an amateur organization. I point out to the Treasurer, as he will well know, that this is not just a golf tournament but also a major sporting event that attracts tourism to the southern Ontario area, in particular to the Oakville area. It provides part-time jobs to a vast array, to virtually an army of people on an annual basis, particularly in the Oakville area. It is a revenue producer for a number of people in that area, hotels, restaurants and that sort of thing.

Hon. Mr. Nixon: What does it cost to get in?

Mr. O'Connor: The average cost of a ticket is between $15 and $25. Perhaps the Treasurer does not quite understand that the revenues from that event are used not only to run the tournament and to go into the pockets of professional golfers, which I am sure he will be quick to say, but they are also the major source of revenue for the Royal Canadian Golf Association, which in turn sponsors amateur and junior golf events across Canada. There are clinics and tournaments right across this country.

The funds are used for research purposes. They are given to Canadian universities that are doing research into development of grasses for golf courses and that type of thing. The funds are used for the supplying of consultation concerning the care and maintenance of golf courses, both public and private. The funding is not something that goes only to professionals. It is an amateur organization that spends a good segment of its funds on and is the primary source of funding for amateur golf in Canada. I put it on that basis.

To come down to specific cases, ticket sales and other admissions in 1984 were $1,234,000 from the Canadian Open. In 1985, they were $1,497,000. The 1986 figures are not yet audited and available, but we can assume they are again several hundred thousand dollars higher than they were in 1985. A quick mathematical calculation indicates that the 10 per cent the government now proposes to take from the RCGA annually over the past three years would have been $125,000 in 1984, $150,000 in 1985 and probably would be $160,000 or $170,000 for 1986. This is $125,000, $150,000 and $170,000 that would otherwise be used for the benefit of amateur golf promotion across this country and for the other worthwhile projects sponsored annually by the Royal Canadian Golf Association.

I ask the Treasurer, as I did with respect to the truck issue, has he done the cost analyses to determine that the $125,000 or $150,000 more by which his Treasury will benefit is more or less than the cost of the imposition of this particular tax on tourism in the area, on ticket sales to those who would otherwise attend the Canadian Open, on the increase in research grants that the government will now have to make to universities for the purposes that were previously funded by the Royal Canadian Golf Association through these funds?

16:50

The $150,000 that the government will gain is a small drop in the bucket in terms of the $30-billion budget that this government administers annually. However, that $150,000 is a significant portion of the funding that amateur golf receives annually, which it will not hereafter receive if the government chooses to appropriate those funds unto itself.

My friend, I am sure, is going to argue that there will be no effect whatsoever on the number of people who will attend the Canadian Open next year; that this 10 per cent can easily be passed through to the customers, who will be glad to pay it; that they are already paying $20 or $22 and they will pay another 10 per cent.

That is just not so. The RCGA has done quite exhaustive studies to determine ticket level preferences, the levels at which certain numbers of people will attend, and it has been able to determine that a few bucks will inhibit several thousand people. It can come up with these numbers to show us that there is a real effect. As they said to me, "If we could increase the ticket prices, we would." If it could be shown that the ticket prices could be increased without an effect on the numbers of people who come to the tournament, they certainly would do so. Sure, they would. Why not? Anybody in those circumstances would, but they found that they simply could not do it.

Thus, the imposition of the 10 per cent tax cannot be passed on to the customers. They will draw as many customers next year as they have this year and in previous years, and perhaps a few more because the event is increasing in popularity. However, the revenues, as I have indicated, in the amounts I have indicated, will simply not be available for the otherwise good purposes the RCGA supports across this country. This should be taken into account by the Treasurer if he intends to go ahead with this particular section.

That is just an example. It is an example I use because it happens to be very close to my heart; it is in my riding and it is an event I support and attend every year. However, similarly, there are sporting events, amateur athletic events across this province that are going to be in the same kind of dilemma, many of them on a much lower fee than is paid by those people who attend the Canadian Open. Either they are going to have to absorb the 10 per cent, as the admissions in the Canadian Open will require the RCGA to do, or they are going to have to pass it on to their customers, in which case they will simply suffer by way of fewer customers coming through their turnstiles.

I hope that either the government has done the studies to ascertain the real effect on these or, alternatively, the government will be prepared to make up the losses to these amateur athletic organizations by way of additional grants, by way of additional funding for them to carry on their programs, particularly among younger, junior kids involved in sports across this province.

Those generally are my remarks. The Treasurer was out of the chamber during some of my remarks with regard to the truck tax issue, when I asked whether he had prepared the cost analyses, losses versus increase in revenues, and similarly with regard to the amusement tax on amateur athletics. I wonder whether in his summary remarks he might advise us whether those studies are available and would be prepared at some time in the near future to table them for the benefit of everybody in this House.

Hon. Mr. Nixon: I will be speaking more generally towards the end of the debate, but I did want to respond to the honourable member's comments about the Canadian Open professional golf tournament. I have attended that myself. A near relative of mine has been very much involved, even as president of that organization. I may be hearing from him in similar terms in the near future.

However, the honourable member will know that this is a group of professionals that goes all around the world. We are delighted to have them here competing for our Canadian professional championship, and the prizes are substantial.

It gets down to the point of whether the Royal Canadian Golf Association is a charitable organization or not. It may be that some of the officials and members would not like to be so designated, because as a charitable organization, as the sponsor, they may claim exemption. I understand this matter is under review.

Interjection

Hon. Mr. Nixon: A formal request on the subject is being handled by the retail sales branch, dealing directly with the association to determine its charitable status. When one sees the resources of the association and the people with whom it contracts and acts, there may be some question of whether it is a charitable organization.

I am impressed with the reference to moneys used to assist amateurs and others in this regard. Amateurs are exempt, and although frankly I would not be enthusiastic about it myself, it may very well be that that tournament will be exempt. It is possible. It is being reviewed.

Mr. Philip: I want to comment briefly to the minister.

Mr. Speaker: Order. This is the time to comment on the comments by the member for Oakville. There being none, he has up to two minutes to respond.

Mr. O'Connor: I would like to point out to the Treasurer that he should differentiate between the professional golfers who play in that tournament and the Royal Canadian Golf Association. On the one hand, the golfers are professionals and earn substantial income from the golf tournaments they win and participate in. On the other hand, the RCGA is and has been -- I was not aware that its status was being reviewed, though the Treasurer will know more of that because it is his ministry that would be doing so.

Hon. Mr. Nixon: I was just informed. I did not know either, but in response to my query, they indicated it was being reviewed.

Mr. O'Connor: As I understand it, it has always been accepted as a charitable organization in that it has been involved in the organization of amateur and junior golf since the turn of the century in this country and has been the prime supporter of that movement. As such, I hope that if it is under review, the Treasurer will see fit to maintain that status on its behalf, he being the ultimate authority, the ultimate person to decide whether its status should change or not, and see that the good work it does with respect to amateur and junior golf in this country can continue by allowing it to continue in the same capacity as it has had in the past.

Mr. Philip: I apologize to the member for Oakville. I thought he had finished his remarks. I did not intend to cut him off or step in front of him.

The Treasurer has been fairly responsive in letters I have written to him concerning problems that certain small businessmen in my riding have had vis-à-vis his officials. I appreciate that.

At the same time, some small businessmen have experienced considerable problems when, through a lack of knowledge or perhaps a lack of information, or in some cases where the wrong information has been given in telephone conversations with his officials, sales tax may not have been collected appropriately and suddenly a large bill arrives on the doorstep of the individual.

I think of the case of a company that was dealing with industrial and domestic air-conditioning and heating equipment. Part of the products was taxable and the other part was not. After receiving the wrong information by telephone, the individual did not charge tax on all of it and subsequently ended up having to repay large amounts of money.

In instances such as that, some sensitivity and some time have to be given to the individual, based on his financial circumstances to repay, and some consideration has to be given to the fact that the fault or the misunderstanding may occur not only with the small businessman but also with whatever official has been informing these people.

It is often difficult in small businesses to keep up with all the latest changes and regulations, particularly in the case of many of the small businessmen in my riding, where English is a second language. It is compounded through telephone conversations and so forth. I hope some of the major atrocities I have seen by certain federal tax officials will not be repeated by our provincial counterparts.

17:00

I appreciate that in instances where I thought there was some reasonable cause for doubt or further need for appeal, delay or a second look, this minister has responded and has called off his officials at least for a certain period until a second, sober look could be given. I hope he will continue to have that kind of attitude.

In dealing with the small businessman who is under considerable pressure, I hope some sensitivity can be given to his local economic conditions and peculiar situation. Nobody wants to allow someone to defraud the government, but there is a difference between a deliberate attempt to skim off some money and a legitimate misunderstanding of some fairly complicated regulations and rules that are frequently changing.

I do appreciate some of the efforts the minister has taken when I have written to him, but I hope that educational process down the ladder will continue and that we will not see some people forced into the type of situation we have seen in the past, where the tax collector goes to the customers and then the customers drop off, forcing the businessman into receivership. In that case, neither the tax collector nor anyone else gets anything out of the whole deal.

Hon. Mr. Nixon: That would be income tax.

Mr. Philip: Yes. The feds have done that in a few cases I can quote. In some cases, it has meant 18, 20 or 25 people put on unemployment insurance when a little bit more sensitivity by the federal tax people might have helped keep the business alive and those people off the unemployment rolls.

The Treasurer has probably learned from some of the mistakes of our federal counterparts, and I hope those lessons will filter down through the bureaucracy.

Mr. Callahan: I have been looking through the various statutes. I started with the Retail Sales Tax Act and recognized that the treatment there was not being done in any fiscal way. It was almost as though by not putting any type of tax on that, which is the appropriate way to collect revenues, they were trying to do it in a way that would be politically acceptable. I congratulate the Treasurer in that I think he is following the long line of things that have happened in the 18 months we have been in office, in trying to put our house in fiscal order.

The reason I say it is interesting is that I then looked at the Ontario Lottery Corp. statute -- and that is coming up in Bill 38 -- and I noticed that in 1974, some four years later, the government of the day was prepared to direct the net proceeds to be payable to the consolidated revenue fund, but they were to be available for the promotion and development of physical fitness, sports, recreation and so on. I have to ask myself the question -- and I was going to look this up in Hansard; the member for Brant-Oxford-Norfolk was here in those days -- whether it was necessary.

In those days, they did not put these things on a fiscally responsible basis and they did not make the tough political moves. In fact, they were required to opt to that section, to try to provide the funds to meet the needs they did not meet through the fiscal way of providing taxation. As the Treasurer says, taxation is never an acceptable or nice thing -- people do not like it -- but it is the fiscally responsible way to do it.

I wonder whether the specific section was placed there in 1974 to pick up the slack that came about as a result of their refusal to take the hard line and to impose the retail sales tax on the particular types of activity that would generate income to the consolidated revenue fund and that could be used through the grant process of the appropriate minister, as has been suggested by the Treasurer, rather than going the route they did.

Those are the only comments I have. Perhaps the people who were here at that time know. Maybe there is nothing in it, but it seems rather unusual to me that they would take that approach.

Mr. Barlow: I would like to add a few comments to those already made on Bill 26 as it relates to adjustment of the retail sales tax.

First, I would like to comment on the amusement tax for the nonprofit groups of this society. Many organizations are going to be paying substantial amounts of money through collection. The figures have already been quoted, and I will not bother repeating them. In most cases, they are going to have to collect it from the individuals who will be attending the performances at places such as the O'Keefe Centre, Roy Thomson Hall in Toronto, Hamilton Place in Hamilton, the Centre in the Square in Kitchener, the National Arts Centre in Ottawa and from many other theatres and sporting organizations across the province.

As the debate goes on, I am sure the member for Kitchener (Mr. D. R. Cooke) will wish to rise in his place, as perhaps will the member for Kitchener-Wilmot (Mr. Sweeney) and the member for Waterloo North (Mr. Epp), to defend the concerns of the Centre in the Square. I will give them that opportunity. I do not want to take up the whole afternoon. I am sure the Minister of Citizenship and Culture is also concerned about the concerns the Hamilton centre is raising.

These organizations will add to the price of their tickets. The Treasurer suggested $20 per ticket as a possible amount of money. A couple going out for an evening show, instead of paying $40, will be paying 10 per cent on top of that, $44, because those shows come in from the United States.

It seems to me a little unfair that this would come out of the blue to the members as a proposal without any consultation prior to the bill being introduced. As we all know, it was not in the budget. There was not even a hint of it in advance of the bill actually being put before the House.

I guess this is another charge for which this government is becoming rather famous, that of nonconsultation with the people who are going to be affected in many of these programs. We can think of the debate we had with the doctors back in the fall --

Mr. Callahan: Did the member's government consult before it bought Suncor?

Mr. Barlow: That was not taxation; we are talking about taxation now. This government, during its 14 or 16 months in office, has got the backs up of many different groups in society simply through lack of consultation. It should have sat down with the theatres and the arts groups and said: "We have a problem. We would like to discuss this and perhaps bring in a tax to replace the tax exemption with something else. Have you any suggestions?" Instead, the arts community had to read it in the paper or it was picked out of an auditor's statement by one of the theatre groups.

Scott Walker, the general manager of the Centre in the Square in Kitchener, estimates the removal of this exemption is going to directly affect about 70 per cent of the centre's productions. That is a lot for that facility, which is struggling to keep its head above water; and to hit the patrons with an extra 10 per cent on their ticket cost could affect the performances. I am sure the member for Kitchener is concerned about that, and I know that when he gets up and gives his remarks, he will also want to defend the Centre in the Square.

17:10

Mr. D. R. Cooke: I am concerned about Scott Walker.

Mr. Barlow: Those were just a few remarks I wanted to make on that part of this bill. The other part I would like to speak about is the tax exemption for prepared foods. Now it is going from a $1 exemption to a $2 exemption. Fine; I cannot criticize that. However, back in the election campaign, the Liberals told us the tax exemption for prepared foods would be at a floor of $4.

That was one of the election promises they made, that and beer and wine in the corner stores; and now that they have come through with the latter, they are going after all these big, high-ticket items. I would like to make a few comments on the last one I mentioned, but I will not; I will stay away from that now, because I know Mr. Speaker would rule me out of order if I got into that item.

The prepared food tax exemption is one I particularly want to talk about. I talked about this when the $1 exemption was introduced in the previous budget. At that time I did quite a bit of research on a lot of the small restaurants, the small corner stores that sell pop, chips and all these beverages and the doughnut shops where, after the election, people would go in, buy a coffee, go back out and buy a couple of doughnuts later on.

It was an added cost, an added inconvenience, not only to the people operating the restaurants but also to the customers, who have to wait in line while all this nonsense goes on simply because of the whim of the Treasurer who, instead of implementing his $4 tax exemption, brought it in at $1, 25 per cent of a promise.

The people who operate these restaurants have computerized cash registers to speed up the service to their customers and to put more customers through; naturally, the bottom line for them is to make money. When the $1 exemption came in, they had to have their cash registers programmed at a substantial cost to account for the $1 exemption. I understand it costs around $600 to have these machines programmed each time there is a change.

If this bill passes, many of those people are going to be concerned about it. We will try to prohibit it being passed, but if this bill passes, there is going to be another cost to the restaurant operators to bring the programmers back in to reprogram the machines and retrain their sales staff, saying: "Look, do not forget. When it is under $2, you do not put the tax on."

All this goes on and costs the small businessman who is operating the restaurant. The small business community is taxed heavily enough by the government now in terms of time and effort without adding this additional nuisance tax on them to reprogram the machines. They are the ones who have to argue with their customers. It is not the Treasurer or any other member of the Treasury benches who has to fight with the customers and argue with them every time these little changes come in just so the government can say at the end of this: "Okay, we have half of that election promise accomplished now, that $4 exemption on tax. Twenty-five per cent was accomplished in the previous budget and 25 per cent in this budget." After another two years, if this government survives that long, perhaps we will be up to the full $4. Who knows?

The other major item in this bill, which I will not get into because it has been discussed by many of the previous speakers, is the removal of the sales tax exemption for trucks and trailer equipment. Suffice it to say that it does not affect just the trucking industry; it affects every truck that runs up and down the road, all the trucks that bring food to the grocery stores and supplies to the factories.

All these privately owned trucks -- and there are many of those on the road, far more than are operated by the trucking industry -- are going to be hit by the same sales tax. It means it is a hidden and additional cost to the consuming public to buy our products, whether it is at the clothing store, the grocery store or wherever, because of the increase in taxes when those who operate the trucks can least afford it.

With those few comments, I am pleased to join in the debate and express my concerns, as well as those of the people of Cambridge and of the small business community, on this very important issue.

Hon. Mr. Nixon: I appreciate the comments made by the member for Cambridge. In reference to his comment on the $2 exemption, I am very much aware of the problem of cutting off our noses by bits and going to the $4 promise. I do not know whether we will be able to go further. I should be sure the House is aware that the $2 exemption costs the Treasury about $70 million. That is a substantial and important rebate to the families who are taking their kids out for a hamburger or a fast-food supper. It is worth while as an exemption, but I am aware of the inconvenience the honourable member is referring to.

Ms. Bryden: I notice that in this bill the minister is closing some of the loopholes with regard to the collection of retail sales tax owing by retailers. If there are loopholes that need closing, I certainly applaud that effort.

However, I want to speak to him about the philosophy of the ministry, which seems to consider itself merely a collection agency to put retailers through the hoops and get every last penny out of them, regardless of any extenuating circumstances. The minister has discretionary power under the act to reduce assessments in cases of hardship, but he told me last year or earlier this year that he has never used this power.

It seems to me that if the minister has been given power, there must be some cases where there is a need to consider extenuating circumstances or to show compassion. Why else was the section put in the act? The fact that he has never used it seems to indicate a rather hard-line approach to all retailers. He and the ministry seem to assume that if they protest an assessment, they are simply trying to evade taxes -- they are all tax evaders -- and should be treated with the full power of the law to collect the money owing.

On November 18, the minister made a speech in the House in which he talked about his new approach to the ministry. He was going to have a new team of customer service specialists who would visit as many small-scale retailers and businesses as possible to provide direct assistance in dealing with tax changes. He went on to say:

"On the broader front of improved customer services and tax simplification, I would like to inform the members I was greatly encouraged by the favourable response I received when I tabled a report on the ministry's objectives and initiatives at the meeting of federal and provincial ministers of revenue in Halifax in September. I would be pleased to provide interested members with copies of this report. At the same time, I wish to assure members that we fully recognize there is still much to be done in this area and that we are committed to implementing further improvements wherever and whenever possible."

17:20

After that fine speech and taking the credit for telling the other ministers what he was planning to do, he should be reminded of a case I drew to his attention, where he does not seem to have followed the philosophy of assisting retailers who are having problems fulfilling their commitments under the Retail Sales Tax Act. The kind of people who have difficulty are small retailers, immigrant retailers who do not necessarily read English and for whom tax bulletins are not provided in their native language, and people who have had very little in the way of service from the tax department.

My case in point was a small retailer from Greece who had many years' experience in the shoe business in Greece and who had been able to support his wife and children in Canada since 1974 by operating a small retail shoe store on Danforth Avenue. In 1985, this retailer received an assessment of more than $9,000 for what was alleged to be uncollected tax. He had not been given any warning that he was not necessarily keeping correct records or that his remittances looked too low. He was not visited by a retail sales tax official to explain changes in the act, such as the extension to repairs. The only thing he received in the mail were English notices of changes, with no follow-up explaining to him how he should adapt his bookkeeping to take account of them. He had an accountant who kept his books for him, who similarly was a Greek immigrant who did not read English particularly well.

When he received this assessment, he went to the officials and said he could not understand the figures and he did not think he owed anything like this. The assessment was a tremendous blow to a small retailer who was struggling to keep going in a business district that was declining. There was some hope that the business district would improve when a housing development that was planned went ahead, but he was definitely in a period when an assessment of this sort was a great blow to him.

However, he came to me as well, and I spoke to the minister, who thought perhaps the retailer could work out some repayment deal or question the figures with the sales tax officials. They suggested a repayment deal that would expedite repayment of two thirds of the assessment with the understanding -- and I think it was definitely an understanding from ministry officials -- that the minister would review his case after he had completed payment of that two thirds. It was a great amount of money for him, more than $6,000.

He carried out his part of the agreement. He paid the $6,000 in four months. He also improved his record-keeping and met with ministry officials on how to keep his books. I think he was becoming a much better retail sales tax collector than he had been. However, at the end of the four months, when he had paid his $6,000 of the approximately $9,000, he found that the minister was not prepared to consider any remission of any kind or any recognition of the fact he had gone to the bank and borrowed all sorts of money from his friends to make the payments to show his desire to fulfil his obligations. He also suggested his obligations were excessive because he had not been instructed in what he should have been doing.

He had not had any contacts with the ministry over the previous three or four years prior to the assessment. In 1985 the ministry had put him in a special group that was supposed to get help from sales tax officials where it seemed there were problems. He had one visit from this special group to assist retailers, but one month after the visit, instead of the special committee having given him a warning and some instructions on how to do his job, he was given this $9,200 assessment.

What has happened as a result of his getting no relief and no consideration for his attempt to try to make a bargain to carry out his payments? He has gone out of business, mainly because of this large tax assessment.

Here is a family in which the wife worked in the store as well, a family of five which has no livelihood and will likely have to go on welfare. We have lost a good retail sales tax collector. I think this man deserved more consideration from the minister, because under the previous administrations as well as under the present one, he had received very little service from the ministry officials in Toronto.

I understand they claim they made one phone call to him in the period for which he was being reassessed, but it was simply a phone call to find out the status of his registration and to correct whether it was in his wife's or his own name or both. They did not really discuss his problems of what they considered low remittances or of failure to collect taxes, as they alleged.

The ministry encouraged him to go to appeal. When one gets the assessment, there is a little note on the bottom saying the assessment may be appealed within 30 or 60 days; so he put in an appeal. He put in as his reasons for objecting to the assessment that he had not been notified personally of some of the changes or of the ministry's dissatisfaction with his remittances, that he had not received any training in what he should be doing as far as record-keeping goes and that he felt the assessment was largely a result of the inefficiencies of the ministry in not servicing him.

The minister promised in that 1985 speech he broadcast across Canada that he was going to consider such things in dealing with small retailers. I am sure the minister understands that a person who comes from another country does not read formal notices easily, and while my constituent speaks good English, he does not necessarily read tax legalese or tax bulletin jargon.

I would also like to say I found the appeal process very much a kangaroo court and not a genuine appeal. The appeals branch appoints a person to go and speak with the person who is protesting the assessment. There is no sort of court hearing at which one presents his case. It appears that all they were interested in finding out was whether he could challenge the figures of the assessment.

17:30

Since he had not been instructed on how to keep proper books, he was not in a position to challenge those figures. I looked at the calculations the ministry had provided and I could not understand them. I am not an accountant, but at least I have more than elementary arithmetic at my finger tips. Actually, I had to ask for explanations of very many of the figures. The ministry supplied the explanations, but even the officials could not explain all the figures.

This was the basis of his appeal hearing. There was no hearing, really. He was invited to meet with the representative of the appeals branch to discuss his complaints. The branch had written him, saying his notice of objection complied with all statutory requirements of a valid objection. However, the branch did not consider any part of his objection, such as the lack of service. All the branch wanted to know was whether he could challenge the figures.

There was also a section in the letter that referred to a matter one of the members of the House spoke about earlier this afternoon. The letter said: "The law requires full payment of the assessment, even though you have filed an objection. If you have not done so, I suggest you forward your payment to avoid incurring additional charges for interest." After I had protested this, as the other member of the House also protested, he got a second letter from the ministry, which said: "The payment arrangement will not affect your right to proceed with the objection. Full payment is not required before your objection is reviewed." That seems to be a contradictory position of the ministry.

When he appeared to meet with the investigating officer, the head of the appeals branch also came. It was somewhat intimidating to have a person there who had just been transferred from the Ministry of the Attorney General, where the work is mainly prosecuting people. Anyway, she was also a completely new head of the branch. My client met with the reviewing officer and the head of the appeals branch and was simply asked about the figures, and to say what he did not agree with.

I was permitted to be present. I had asked whether I might accompany him and I was permitted to partake in the discussion. The upshot of what was said by the two people with whom we met was that since the Treasurer had already reviewed the case after I had written various letters to him and decided against my constituent, they had no power to discuss any of the objections relating to the lack of service, lack of understanding or unfair treatment of this particular taxpayer. Therefore, it was really only a question of arithmetic, and that was all.

The final blow was that I was informed after the hearing that I would not be given the report, even though I had attended, because I did not have a letter from my client that he would permit me to see it. I thought that as a member of the Legislature I was participating in the hearing. I was supposed to receive the preliminary report from the investigating officer before the hearing. Unfortunately, he did not have it ready, so he said he would send it to me afterwards. I never got anything from him and I have not been able to contact my client, who has been out of the country for a short time. I am sure he would give me permission, but I think a member of the Legislature who accompanies a client to a hearing of that sort should be entitled at least to the ministry's reasons and the report it makes to the Treasurer.

I think the whole appeals process should be overhauled and I am really shocked to find out how it works in a government that is supposed to believe in open government. There was no public hearing. There was no quasi-judicial hearing to assess his complaint. There was simply this meeting of two high-powered representatives of the appeals branch with a small retailer who could be quite intimidated by that procedure.

I suggest that the Treasurer take to heart his speech of November 18, 1985, and change his tactics as far as dealing with small retailers is concerned. He should also reconsider the case of this constituent in view of the way he was treated. It could be considered almost a violation of the charter, the fact he was given so little consideration on his objections by the appeals branch and was not given any consideration by the minister under his discretionary powers. I thought we had a compassionate government over there.

Hon. Mr. Nixon: I am aware of the continuing interest of the honourable member in this important case. We have discussed it at least twice personally, and I have followed it on a personal basis in the ministry. She and I have come to different conclusions about the case. She may not understand why my conclusion would be different from hers, but it is, and for the time being, I am the minister.

The honourable member's colleague, the member for Etobicoke (Mr. Philip), the last New Democratic Party speaker, just a moment ago congratulated the ministry, through me, on having sensitivity in matters he had brought to our attention. I assure you, Mr. Speaker, it is our valiant attempt to do that, but we eventually have to make a judgement which is ours. In this instance, it is not the same judgement as that made by the client or the honourable member. I regret that, but I have a responsibility in this regard and so does the honourable member. In this instance, we did not act in parallel. I have a certain amount of regret, but on reviewing the evidence as it was presented to me, I had to take the action that she is now severely criticizing.

One matter I do want to respond to is the appeal procedure. She referred to it as a kangaroo court and said it is made up of officials in the ministry. I believe they do a good job. As the honourable member knows, if anyone is dissatisfied with that, an appeal beyond them to the regular court system is quite appropriate and happens whenever people feel dissatisfied with the circumstances. The honourable member may object. In that case, it might be expected that legal counsel would be retained, but surely an appeal to the courts would only be necessary in matters of substantial importance.

Ms. Bryden: Regarding the appeal to the court, the $9,000 assessment would be a lot to the small retailer, but it would all be eaten up in court costs if he took this to court to complain about an amount of that size. It was not within the means of a small retailer to go to court.

Second, I would like to know whether the minister has ever used his discretionary power and whether he thinks the lack of service to this client does merit some special consideration. It may not all have been his lack of service, but over the past five or six years the ministry has given inadequate service to this person.

Third, while my colleague the member for Etobicoke may have said in some cases the minister has shown sensitivity, he did end up making a plea for much greater sensitivity from the minister to the small retailer, and it is for that reason I am making a plea.

I am also telling the minister that I think he should know, and perhaps this is the first time he has learned this, that he has actually put a small retailer out of business, because this is his main cost increase over the last year. There has been a slight rent increase, and as we all know, there is no rent control for commercial property; so he would have to expect and absorb that every year. A combination of the rent increase, the very high tax assessment and no remission on it has put him out of business. Therefore, we have another family looking for employment.

17:40

Mr. Gregory: Thank you, Mr. Speaker, for the opportunity to speak on this all-important Bill 26. I am delighted to do so with a few brief remarks, particularly since it has to do with the Treasurer and, more important, the Ministry of Revenue, where the real skills are. I know something of that. I spent a great deal of time training the staff in the Ministry of Revenue to do these things in a very careful fashion. That is why it comes as something of a shock to me to find that the Treasurer, by way of the Ministry of Revenue, is tinkering again.

An attempt was made under the previous government to include everything under retail sales tax. No exemptions were made to favour anyone. The first move the present Treasurer made was to exempt $1. Remember the great hamburger wars, where it was determined that $1 would buy half a hamburger or half a pie or something such as that? We had a little fun with that. I suspect the Treasurer took it more to heart and more seriously than we thought he would, because he has gone further with his tinkering. We now have an exemption of $2. Well, whoop-de-do.

Hon. Mr. Nixon: What do you mean, "Whoop-de-do"?

Mr. Gregory: It is spelled "whoop-de-do." At first blush it looks like a kind thing to do, and it certainly is; it is exempted up to $2 rather than $1.

Hon. Mr. Nixon: It is $70 million.

Mr. Gregory: As the Treasurer said, it is $70 million; is that not interesting? He is giving away $70 million. Later on in my discourse we will discuss how he giveth with one hand and taketh away with another.

I have to say to the member for Brant-Oxford- Norfolk, the Treasurer: he has one eye on his constituency at all times; I do not mean his personal constituency but the voting constituency. The $2 exemption on prepared foods affects, albeit in a small way, a greater number of people than does ceasing the exemption on the retail sales tax on trucks. It is pretty smart political stuff. He is to be congratulated on being astute enough to realize that there are more little kids buying hamburgers than there are --

Hon. Mr. Nixon: That never entered my mind. One has to go to an old Tory minister for that kind of thinking.

Mr. Gregory: One has to be devious to be a minister of any stripe, and certainly he qualifies in that.

It is obvious; it stands right out. It is costing $70 million for that exemption, and he is getting in $65 million from the other. So he is losing $5 million and making an awful lot of truckers unhappy. I do not think he is pleasing many little kids going out to buy their hamburgers with the $2 exemption; it does not mean that much. Politically, it is great. Nevertheless, it is tinkering. If he wanted to do something in regard to prepared food exemptions, why did he not make it real? Why did he not make it $5 or something? Why did he not go the whole hog?

It is not as if those people over there are short of money. With the increased revenues they have had since they became the government, my heavens, they could afford to be far more generous to the working people and to the people who like to go out for a McDonald's hamburger and a Coke every once in a while. They could have been far more generous than they have been.

With the increased revenue of this government, because of the increase in business -- not by any skills it has demonstrated, but with its increased revenue -- it could afford to be a little more generous. If it does not feel it wants to be generous --

Hon. Mr. Kerrio: Liberal times are good times.

Mr. Gregory: It is good that they are good times, because if they were not, they could not survive.

Hon. Mr. Kerrio: If things go on as they are, we will be happy.

Mr. Gregory: That is what I understood. The good times are Liberal times. Hard times are New Democratic times. We in the Conservative part of this Legislature can handle all times and do it well. We do not need to have the market forces on our side to run a successful government. Those people have proven time and time again they could not run a peanut stand, and this is a good example of it.

Hon. Mr. Kerrio: Yes, but we are moving in the right direction.

Mr. Gregory: Even the member for Niagara Falls will agree with me. When one is talking about a $2 exemption on fast foods, that is pretty Mickey Mouse; it is a Mickey Mouseburger.

The Acting Speaker (Mr. Morin): Order. Back to the topic.

Mr. Gregory: I thought I was on it, but I will try to stick a little closer to it.

The Acting Speaker: Speak to the chair.

Mr. Gregory: That is what I am speaking to right now, Mr. Speaker. Thank you for reminding me that I should speak to the chair. I will try to do so in future, but it is pretty hard to speak to you and look out of the corner of my eye to see the reaction of the Treasurer. If you could convince the member for Niagara Falls (Mr. Kerrio) to quit heckling me, it would be very helpful.

I want to get on to the removal of the exemption from the sales tax on trucks. This is a very important and key thing about this bill. There are other important sections in the bill, but the important thing is the removal of the exemption on the sales of trucks. This is going to have untold results that the government is going to regret. That is already apparent. It is so apparent I am surprised the Treasurer has not been able to see it.

It disappoints me, in that I always regarded the present Treasurer, even when he was opposition House leader, as rather astute. Although the wrong thing he is doing here has been pointed out to him by many members of the trucking association, and many people who are not members of the trucking association have also pointed out what is going to happen here, he does not seem to grasp this.

It is as obvious as the nose on my face that truck and trailer manufacturers have increased their hiring because their orders are good right now, but any one of them will tell the Treasurer that they do not have any orders on the books for January, February or March of 1987. The reason for that is quite simple. When talking about a $100,000 or $200,000 rig, seven per cent is a substantial amount of money, and they are all rushing to get their orders in. This creates a rather false employment picture, because people are being hired to fill those orders.

One firm is saying that of 360 employees currently on staff, 126 will be laid off as of December 23, 1986. Merry Christmas! Is that not marvellous? That is a direct result of what the Treasurer is doing here. Without his removing this exemption in the callous way he is doing, we would not be faced with this problem. To some, 126 employees may not seem too many, but to me it is. If one happens to be one of the 126 to be laid off two days before Christmas, that is serious stuff.

The Treasurer says he cannot afford not to do this because of the lack of money and the need for money. We did not have this money before, and we were able to reduce the deficit. The government is getting this money and increasing the deficit. Do not tell me they have to have this money. Maybe they have to have it so they can give out an extra $1 exemption on fast foods; that is marvellous. I guess there are more votes in that, but I do not understand such logic.

When this exemption was given in 1983, I believe it was, the trucking industry was in dire straits. It was a North American phenomenon that the trucking industry was having trouble. That was the reason it was done. It was not done to make anybody $1 million or $2 million but for the simple expedient of trying to keep a viable trucking industry in Canada, particularly in Ontario. It was done to save employment.

17:50

I get the impression that the government is not particularly interested in the trucking industry in Ontario. For example, there was the overturning by cabinet of the recommendation of the Ontario Highway Transport Board not to allow the trucking company -- I forget its name -- to be bought by Yellow Freight, the big American company. The cabinet overturned it and allowed the American company to purchase this Canadian company.

What are they doing now? Do not listen to me; go to the Ontario Trucking Association and find out what they are doing. Most of the Canadian drivers are gone and American drivers are coming directly from the United States and driving on Ontario roads, with a net loss of jobs for Canadian drivers which is quite substantial.

The member for Niagara Falls has to be totally aware and cognizant of what I am saying, because I imagine the number of American trucks coming over now is very noticeable. He lives in Niagara Falls, where there is an influx of trucks coming from the US. These guys are buying Canadian trucks, but they are using American drivers, and the Canadian drivers are out of work.

That is one example of the problem in the trucking industry. The members of the government have not contributed a great deal to help Ontario, and this is the final blow. They are going to put back the seven per cent with one fell swoop.

There are those who argue that if everybody else pays seven per cent retail sales tax, why should the trucking industry not pay it? That is a valid argument, except the industry has not been paying it, and that was done for the purpose of helping the trucking industry recover from the serious recession it had. Now, when it seems to be getting its nose above water, the government is going to come at it with a seven per cent retail sales tax. Believe me, its profit margins are not substantial. The average profit, I understand, is about five per cent. One can make better than that by putting it in a savings account in a bank. I do not know why the truckers bother with all the aggravation.

The government is going to cause a loss of jobs by doing this. It is obvious, because the manufacturers will not be keeping those people on staff. The government has an artificially inflated employment picture, because it looks good right now, and is saying, "Look at these great jobs we have created." If one had figures and the government came out and started talking about the jobs it created, I bet it would be including those who are being hired to produce trucks before the end of December. The government is going to raise its hands and say: "What a good boy am I. I have created all these jobs." It has created only part-time jobs, because they will be gone December 23, in time for their Christmas turkey if they can afford one at that point.

It seems to me to be awfully shortsighted when one starts doing things like this. I have some figures here, which somebody might have mentioned before -- different opinions from people who have been asked to comment. People have not responded in a mean fashion; business is business, and they recognize that some things have to be done.

The Mack truck company people, for example, comment that having to lay off workers is not entirely the fault of reapplying the seven per cent sales tax, but it is certainly one of the factors. As a matter of fact, they have increased their employment. They were producing 14 trucks a day; they have increased that to 17 trucks a day right now. They are stating now that they will be reducing that to 10 trucks a day as of January. What could be more obvious than what is happening here? It has to be obvious, because the people are buying their trucks today, and that is great.

There is another factor. It is not just a case of the number of trucks that are not going to be sold in the new year; it is the ripple effect on the parts manufacturers all the way down the line. Everybody is going to be affected when these people are laid off and this production stops. The government is going to penalize the guy who has to have new equipment for proper maintenance of his fleet but cannot afford it right now. If he could afford it right now, he would certainly do it to save himself the seven per cent. Since he cannot do it right now, he is going to be penalized when he buys it next year or the year after.

By doing this, the government is also contributing to the safety of our roads, because people will be driving their trucks a little longer, just a touch longer. We have all been travelling east or west on Highway 401, sandwiched between two big transport trucks. If you look down at the tires, they are pretty bald. You get a little nervous, especially when a truck driver is right behind you, if you are travelling at the speed limit and the truck is tailgating. You are not sure about the equipment he is driving. That is very comforting.

This is going to create a ripple effect. It is going to create unemployment throughout the industry for a substantial period in 1987. That is unfortunate. But all is not lost, because the Treasurer has been given much advice on this. One of the recommendations, perhaps the main recommendation, was put forward by the Ontario Trucking Association, of all people. They are not saying not to charge them the retail sales tax. They are saying that since they have not been paying it and since they are starting to recover, why does the government not contribute to their recovery by phasing in the tax? It might be two per cent in 1987, two per cent in 1988 and three per cent in 1989. The government will get its money; it will have sales tax back on those products without destroying or substantially hurting the people who are trying to make a living in that business.

This was suggested to the government, which should not say it cannot phase the tax in. One of the arguments we hear is that it is too much trouble to phase in. Lord God, if the government can phase in a change from $1 to $2 on the exemption for fast foods, and if it can do that without being overburdened by the red tape, then it certainly can do this on the much fewer purchases involved with large trucks or trailers.

It is not a valid argument for the government to say additional staff would be needed in the Ministry of Revenue. The Ministry of Revenue could do this with one arm tied behind its back; it would have no trouble. I have a lot of confidence in the staff of the Ministry of Revenue. As a matter of fact, I have said many times that I have more confidence in the staff of the Ministry of Revenue than I have in the staff of the Ministry of Treasury and Economics.

The minister, for whom I have total respect, is of course excepted from that remark, even though he will not be welcome at Earl's Shell in the future. I understand truckers go there, and when they know the Treasurer is going to be responsible for a lot of layoffs in the trucking industry, I do not think he will be welcome there. He never did mention buying anything there. All he mentioned was going in and talking. He never said he bought anything; so he has not been contributing that seven per cent in Earl's Shell at any rate. I understand Earl's Shell is in Brantford. Or is it Brant?

Miss Stephenson: Not quite. St. George.

Mr. Gillies: On Highway 5.

Mr. Gregory: Is that on the way to Brantford?

Mr. Gillies: Everything is on the way to Brantford.

Miss Stephenson: Including St. George.

Hon. Mr. Nixon: Including the bubonic plague.

Mr. Gregory: I hope the minister will have another look at this matter and consider phasing in this tax. Reimposing the seven per cent sales tax on the trucking industry is going to create quite a hardship on that industry, and it is very important that the minister recognize that. This is an industry that needs to be very viable in a province as vast as Ontario, particularly since the railway system does not seem to be as effective as it used to be. The large percentage of goods are transported on the highways of Ontario. I could get into a discourse on the need for good roads to accommodate the trucks that travel in Ontario to supply its good citizens with food, but I will not. That is for another day; I think that other day is tomorrow in estimates when we will be talking about the roads. With the Treasurer reimposing the seven per cent sales tax, perhaps we will have less need for improved roads; there will not be as many tractor-trailers using them. There will probably be a few less.

18:00

Hon. Mr. Nixon: The member should not be allowed on the Queen Elizabeth Way.

Mr. Gregory: If I cannot go on the Queen Elizabeth Way, I cannot get to my riding.

Hon. Mr. Nixon: The member should stay there and not come here.

Mr. Gregory: I would appreciate it if the Treasurer did not use my highway in coming here himself. That goes for the Minister of Natural Resources, the member for Niagara Falls as well. Actually, when the Treasurer comes to Queen's Park from his riding, he is not going through my riding. When he goes home, he is. In that respect, I should welcome him to my riding as often as he can come.

There is one other section I would like to touch on very briefly. As brief as I have tried to be, I have gone on longer than I should have. Before I leave this subject, I would like to plead with the Treasurer one more time, if I can ever get his attention.

Mr. Speaker, will you convey to the Treasurer, when you get the opportunity to do so, a plea from myself on behalf of my party, the Ontario Trucking Association, the future unemployed truckers and manufacturers in the truck and trailer manufacturing industry and their children? Will you please try to convince the Treasurer there is a need to phase in the retail sales tax on these products, rather than impose seven per cent with one fell swoop? He can use the same pattern he is using with fast foods; he can even do it a dollar at a time. He will get many more votes by doing it that way. He should apply the tax on a phased-in basis rather than take this chance.

I know I am saying the same thing many of my colleagues have said; I am probably doing it better. I ask the Treasurer to consider my suggestion when he is hearing it from so many sources, not only in this House but also from the trucking industry, the manufacturing industry and those industries that manufacture the parts for these products. He knows it is coming. Is it not worth his while to give some serious thought to the phasing-in process on this bill?

The Treasurer knows I am telling him the truth. I know he agrees with me, but he needs that $65 million to provide the exemption on the $2 meals. I can understand that. However, the Treasurer should think that over very carefully. I can assure him he will not get mileage out of it.

I would like to get into the removal of the exemption from the amusement tax for nonprofit groups; however, I will leave that for some of my colleagues who are more learned on that particular subject.

Hon. Mr. Nixon: I would like to tell the honourable member that with regard to reimposing the seven per cent sales tax on heavy trucks, it was done only after careful consideration. The removal in 1983 was on the basis of the recession that was gripping the industry and many other industries at that time. The statistics indicate a full recovery -- as a matter of fact, more than a full recovery.

Ontario is the only province except for Alberta that does not apply the seven per cent tax to heavy trucks, and Alberta has no sales tax at all. We are not bringing it in until January 1; so there is plenty of opportunity for the trucking industry to modernize, as it has been doing in a very dramatic way over the last few years, and that accounts certainly for the projections of lower sales in January and February.

Aside from that short period of depressed sales, which are understandable and regrettable, but more than balanced by increased sales during this period, we expect the buoyancy of the economy in general to continue to apply to the trucking industry and its profitability, its buoyancy and its ability to expand, to be unimpaired.

Mr. Gregory: It becomes increasingly obvious that the Treasurer did not hear a thing I said. I have heard all his arguments and what he has said. He has simply repeated what he has been saying all the time we have dealing with this bill.

Hon. Mr. Nixon: This is the first time I have had a chance to speak.

Mr. Gregory: In what he said to the Ontario Trucking Association and in what he has said to the manufacturing association, in all of these things, he has said the same thing. He is rigid in his approach. Okay, fine.

Hon. Mr. Nixon: I am totally convincing.

Mr. Gregory: Not to me. I am not normally an argumentative sort, as the minister knows; I am sweetness and light itself. But in this case I am totally shocked that he will not consider this phasing. He is making a very bad mistake and he is going to come to regret it when he starts seeing the unemployment figures. He mentioned that the exemption was put on at a time of recession. He is quite correct, but it takes a lot of time to recover sometimes when one has a severe recession, as the trucking industry did.

I can tell him that governments enjoyed some of that recession, and now the Treasurer is reaping the benefits from that. Why not let the trucking industry reap the benefits to the point where it is again viable, instead of taking its money and then applying it to Mickey Mouse projects, as he has with this increase to $2 exemptions on fast foods?

Mr. Hennessy: I wish to read a letter I have from the Thunder Bay auditorium, which I sent to the honourable Treasurer yesterday. It reads:

"Re Bill 26:

"With the assistance of our member of the Legislature, we wish to express our concerns to you regarding the apparently imminent passage of Bill 26, an amendment to the Retail Sales Tax Act.

"We are particularly concerned with proposed amendments to section 7 of the act, which deals with the 10 per cent admissions tax. The government proposes through these amendments to effectively remove the exemption from this tax for registered charities, such as our organization, save in those instances when performers will not receive any remuneration for the performance or when 90 per cent of the performers of the event are permanent residents in Canada.

"In the case of our organization and several others in Ontario, numerous international performers are presented during the season, as well as many Canadian artists. The economic significance of the passage of Bill 26 is an added cost to our organization of as much as $200,000 a year. The only avenues open to compensate for this increase are corresponding increases in ticket prices or an additional subsidy from our municipal government. The likelihood of the increase in the municipal subsidy is remote," and you can say that again, "and increased ticket prices will likely lead to decreased sales overall, thus compounding the problem.

"As the enclosed correspondence indicates, we were not advised nor consulted when these amendments were first introduced in the May 13, 1986, budget. It was not until July 9 that the manager of the O'Keefe Centre indirectly learned of the proposed amendments and their potential harmful effects and encouraged us to make representation to the Ministry of Revenue. We did communicate with the ministry to express our concern, and a meeting was held in Toronto on September 4 between representatives of the ministry and some of the organizations that would be negatively affected. The minutes of this meeting are enclosed for your information.

"This meeting provided that the concerns of the performing arts centres will be brought to the minister's attention. Each of the centres would be advised of the outcome of the briefing. As the centres were not satisfied with the minister's actions as a result of the briefing, they intend to enlist the support of the MPPs to defeat the amendment to Bill 26 in the Legislature.

18:10

"We were not aware of the outcome until we received a phone call on the morning of Friday, October 17, at which time we were advised that Bill 26 as originally introduced was about to be debated in the Legislature. We immediately issued a press release -- see enclosed -- and notified our mayor, who I think will be our next candidate, and prepared to solicit the aid of our members of the Legislature.

"The minister's letter advising us of his intentions was not received on the afternoon of Friday the 17th, the same day as the bill was apparently to be debated. Our only hope now would seem to be to have the amendments dealing with the admissions tax removed from the bill and referred to committee for further study. This would allow our organization and others similarly affected to make reasonable representation in an open forum.

"We would therefore respectfully appeal to you directly to help withdraw the proposed amendments before Bill 26 receives final reading. Your assistance on behalf of our organization and many others similarly affected would be greatly appreciated."

I ask the Treasurer to give this his kind consideration. I know he likes a buck, but the idea is that he is going to affect a lot of people in the city of Thunder Bay. It was very difficult to get the auditorium built in the first place. It took a plebiscite that was won by only 1,000 votes; it was very close. The people who are behind the auditorium and the people who support it respectfully request that he give serious consideration in regard to Bill 26 concerning the Thunder Bay Community Auditorium.

Hon. Mr. Nixon: I would like to thank the honourable member for bringing the letter from the Thunder Bay theatre to my attention. He must be aware, however, that the exemption prevails for Canadian organizations or Canadian presentations. It is only for people who are not Canadian, who are brought in for high-powered performances, usually for sellout crowds, for the purposes of revenue.

I put my own view to the member sincerely. It is that the amusement tax is properly applied there because it does not seem right that an American performer -- I have used the case of Harry Belafonte coming to the O'Keefe Centre -- should be exempt from paying the amusement tax.

We are quite prepared through the Ministry of Citizenship and Culture to make appropriate grants in support of the theatre; I am sure we already do. We are prepared to review that. All members who are objective and aware of the facts know this government has increased support to cultural activities and organizations over what it was two years ago. We are very proud of that and it is one of the priorities we have.

Believe me, I appreciate the member bringing this to the House, but I think that this, which is a revenue-neutral change, simply restores the tax to the way it was before the special charitable status was conferred by the government of Canada. I feel it is fair and equitable and I hope the member will give it additional consideration and find it in his heart to support this fairness and equity:

Mr. Hennessy: I would like to reply to the Treasurer. He mentioned about Harry Belafonte and other people coming to Thunder Bay. He has to realize that the Thunder Bay auditorium has only 1,400 seats and therefore cannot charge the money that is charged in the city of Toronto for a performance of that nature. No doubt Belafonte, or whoever it may be, does not come cheap. It costs a lot of money.

Hon. Mr. Nixon: Who do they get?

Mr. Hennessy: Well, Charlie Chaplin, Harold Lloyd. How about the minister? No problem.

Hon. Mr. Nixon: If the member could get them, he would really make a lot of money. if he can get them, I will make an exemption.

Mr. Hennessy: The only thing I will say is that one has to look at the aspects of that because, to get a top-notch performer, one has to realize that it is less --

Mr. Mancini: Get Stompin' Tom Connors.

Mr. Hennessy: What is the little parrot doing talking? He has a moustache today.

Nevertheless, I ask the Treasurer to give me his kind consideration. He is a very good stickhandler and he can make a lot of excuses, but with all due respect, he should not be so tight with a buck and should give the taxpayer a break.

Mr. Baetz: I would like to speak briefly on the amendment that proposes the removal of the exemption from the amusement tax given to nonprofit and charitable groups for performances that are not amateur or Canadian having at least 90 per cent Canadian performers.

The text of my little, brief homily here might be: "Behold, the Treasurer giveth and behold the Treasurer taketh away. Blessed be the Treasurer."

However, as far as the arts community is concerned, I doubt if there are very many blessings flowing from the arts community to this Treasurer. He has described himself on a number of occasions as a parsimonious old farmer. There is nothing wrong with being parsimonious or being an old farmer, there is nothing wrong with that at all; but that is not the image the arts community has of this Treasurer. It calls him "old Scrooge," and that is a little worse.

Frankly, I think we are beginning to see a government which, like an individual, begins gradually to develop a personality. People see it in a certain light, and this government is gradually beginning to be seen by the arts community as being very Scroogey.

This is a small thing. It is really not a big thing we are talking about here, but this simply reinforces the image the Treasurer is beginning to develop and that is being projected, the image of being a Scrooge to the arts community. This is all very consistent and consonant with that very unhappy Bill 38, in which he wants to take away the lottery moneys earmarked for sports, culture, recreation and so forth.

We are going to have a lot more to say about that piece of legislation, and so is the arts community, because we know what the Treasurer and his government are up to. They are going to try to shortchange the arts community through the withdrawal of the lottery funds designation. We are going to find out too how much money the Treasurer really is squirrelling away. He stopped today just short of what he has in the Treasury now and what he will have next year from lottery funds. He referred to years back, but we know what he has in there and what he is holding. It may be to help his cash flow or whatever, but we see this exemption removal from the arts community as just part and parcel of the whole style of this government and its attitude to the performing arts.

The strange thing about all this -- and this is where we get a bit of the giving and the taking away without the blessing -- is that this exemption will affect, particularly, the larger theatres in the province that sponsor such shows, such as the O'Keefe Centre, Roy Thomson Hall in Toronto, Hamilton Place in Hamilton, Centre in the Square in Kitchener, the National Arts Centre in Ottawa, the arts centre in Sault Ste. Marie, the arts centre in Thunder Bay and numerous halls and concert halls that have been built very substantially through government help throughout the whole province. Perhaps some day we will even have a Harry and Bob Nixon Convention Hall in St. George, or a concert hall.

Miss Stephenson: In St. George?

Mr. Baetz: Oh, yes. St. George is worthy of a concert hall.

These very organizations that will be hit hardest by this are the organizations that over the years -- thank God there has been an enlightened government in power all these years -- have been established with public funds, lottery funds and many donations coming from hundreds of thousands of citizens. Now he wants to impose a penalty on them.

I know the Treasurer is going to say, "We are only doing this for the non-Canadian performers," but what does he mean by non-Canadian performers? There are other people in the act. There are all the staff members who are Canadians. The communities are made up of Canadians, I assume. There are all kinds of Canadian participation in this, and yet the Treasurer zeroes in, in a bifurcated kind of way, and wants to concentrate on the non-Canadian performers. It is not going to work.

18:20

As the Treasurer has heard on several occasions, the theatres are angry because they were not consulted by the Ontario government about the proposed change. Once again, here is the personality of a government developing. The Premier (Mr. Peterson) in the early days said: "We are an open government. We will not do anything until such time as we have consulted everybody who is affected." The Treasurer did not consult the theatres before he planned and decided to propose this tax change.

It was discovered accidentally, as a matter of fact, last July by the auditors of the O'Keefe Centre, and the management of the O'Keefe took it upon itself to inform other theatres and groups in the province. They obviously recognized that this government would not even pay homage or exercise some good manners by advising the other theatres.

We talk about tourism. All the centres we have been talking about are tourist attractions. We want to bring the Americans over here to see our grand shows at Roy Thomson Hall, the O'Keefe, the National Arts Centre, etc. The government followed our good example in removing the visitors' accommodation tax, which was a very smart move, but now it wants to remove this exemption. There is something very inconsistent about those two steps it has taken.

All of us are very anxious to develop and provide incentives and do all we can to develop Canadian talent. If we want to attract tourists to this province, especially Americans, we are going to have to bring in some top world shows and, through this minor tax exemption, we can provide one more added incentive.

The member for Kitchener (Mr. D. R. Cooke) and the member for Waterloo North (Mr. Epp) ought to hang their heads in shame for not having got to the Treasurer, because Scott Walker, the general manager of the Centre in the Square in Kitchener, estimates that the removal of the exemption will directly affect 70 per cent of the productions there.

There is another member from Kitchener sitting right behind the Treasurer, the Minister of Community and Social Services (Mr. Sweeney). He knows what the Centre in the Square, which was built during our regime, has meant for the cultural life of Kitchener-Waterloo, St. Jacobs, Elmira and the whole region. Here we have the expert in the community, Scott Walker, saying it is going to affect 70 per cent of the performances. It will not be a very happy result.

The same thing can be said right across the province. Taking 1985 as an example, the O'Keefe Centre would have had to come up with more that $950,000 to cover the amusement taxes on non-Canadian performances. The figure for 1985 in Hamilton Place was $265,000; Roy Thomson and Massey halls, $300,000; the National Arts Centre, $240,000. These are public places. They have been put there by the taxpayer, by the government and by voluntary donations, and they are run by volunteer boards. Yet the government wants to impose, by this silly, short-sighted measure, what amounts to a very substantial financial hardship.

There is something else that is slightly curious about this. There is a total lack of consistency, as one can see throughout the whole act here. Under the proposed changes, Ontario Place and, I assume, the Ontario Science Centre, the Royal Ontario Museum, etc., will continue to qualify for the exemption because they are funded by the provincial government.

The Deputy Speaker: Order. There are many private conversations going on. It is most unfair to the member trying to make himself heard.

Mr. Baetz: Anyway, I welcome the fact that at least his long fingers have not dipped into the coffers of places such as Ontario Place and the Ontario Science Centre. But there surely is a substantial inconsistency or lack of logic in removing the exemption from Roy Thomson Hall when he will maintain it at Ontario Place. I hope the minister will think that one through very seriously and come back with an amendment.

The other thing is that in any of these theatres, as I am sure the Treasurer knows, we have to face the fact that very often it is the American shows, the popular shows, the Harry Belafontes of the world and all the world stars --

Mr. Gillies: Carmen Miranda.

Mr. Baetz: Carmen Miranda; I thank the member very much. They help in a way to subsidize Canadian shows that are excellent but perhaps not as well known in the world and are on their way up. Thus, a little internal subsidization goes on. Obviously, if the government skims the fat, if it skims what little extra they can make on the American or international shows, there is not much left to subsidize the Canadian ones.

By way of summing up, this whole exercise reflects a kind of parsimony that is misdirected and is not going to help the theatres and the cultural bodies in this province. I know the Treasurer will want to go home tonight and reflect again seriously or. this and drop the idea, because it is counterproductive.

However, as I say, that may be expecting too much, because in the weeks ahead we are going to be taking such a good, close look at all that lottery money he no longer wants to designate to the arts and cultural community but wants somehow to redirect elsewhere or whatever he wants to do with it. There is a very concerned community out there, and we shall try to be its informed and compassionate voice in this building to make sure the arts and the cultural life of this province, which flourished under the previous regime, will continue under the present government.

Hon. Mr. Nixon: The member's cultural bona fides are impeccable, since he was minister of culture for a number of years, but he must see a certain injustice in having the exemption apply, for example, to the O' Keefe Centre and not to the Royal Alexandra Theatre. There is a basic inequity there that we want to correct with this legislation. This is not revenue-producing.

He is not the first member who has referred to the Centre in the Square in Kitchener. I am quite surprised that 70 per cent of its productions would be taxable if this amendment were to become law. It seems strange that a theatre in Kitchener would have 70 per cent of its presentations be foreign -- I suppose I would say, probably American. It does not seem reasonable that we would be providing a theatre for that purpose.

For example, I believe they had Evita there, which was very interesting as far as the local community was concerned and was well attended. It was the New York group that came to put on Evita. Brantford, however, staged Evita to full houses with a theatre group that came from Toronto. I am not prepared to talk about the quality of the presentations, because I am sure they were both superb. But the one in this circumstance would attract the amusement tax, because it was certainly for profit, and the one in Brantford, since it was Canadian, would not, since we want to stimulate Canadian productions, not necessarily American productions, even though they are excellent.

Mr. Baetz: Using the Centre in the Square in Kitchener as the example, the overriding objective of this government, as was the case in our government, was to enhance the cultural life of the city of Kitchener-Waterloo. We cannot do that simply by saying we want only Canadian entertainment there. Last week they had a Soviet symphony orchestra there. I suppose they would not be exempt under this either. That is the overall objective: to enhance and build up the cultural life. The proposed removal of this exemption will do the exact opposite.

On motion by Miss Stephenson, the debate was adjourned.

The House adjourned at 6:30 p.m.

October 22, 1986

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RETAIL SALES TAX AMENDMENT ACT (CONTINUED)