Hansard Transcript 1987-Jan-29 | Legislative Assembly of Ontario

That, recognizing the unique importance of the automobile industry to the economic future of Ontario and Canada, particularly to the one in seven Ontario manufacturing workers and the 250,000 Canadians who depend on the industry for employment and to the 41 Ontario communities in which the industry constitutes a major part of their economic base, and recognizing the vital role which the Canada-United States automotive agreement (auto pact) has had in fostering employment growth and capital investment in the Canadian automobile industry, this House is of the opinion that the auto pact should not be amended as a result of the present trade negotiations between the government of Canada and the United States, that action should be taken to ensure that the United States does not exercise its option to terminate the auto pact, that all foreign automobile manufacturers building plants in Ontario should be urged to attain auto pact status, and that the government of Ontario should ensure that appropriate skills training and fair trade policies are in place to support the continued growth and viability of the automobile industry in the province.

Mr. Speaker: The honourable member has up to 20 minutes for his presentation and he may reserve any portion of that for the windup.

Hon. Mr. Conway: Be careful, Larry. I think there is a foreign object over there.

Mr. Grossman: No; they are all in Washington.

We have an opportunity this morning to show a degree of dedication and commitment in this assembly and also to show that commitment with a degree of restraint and diplomacy, given that these issues require all those skills to ensure the best interests of Canadians and Ontarians are served.

The issue before us is of vital importance. The Premier (Mr. Peterson), just resuming from Washington, can confirm there is no doubt that protectionist sentiments in the United States represent a genuine and major threat to many of our sectors, including the auto sector. Our trading arrangements right across the board are under scrutiny in the US. I thought it was interesting yesterday to listen to the Premier reflect upon the reality that the Americans are contemplating action, even in those sectors where the Americans acknowledge we are not doing anything that is unfair or we are not unduly subsidizing our goods. That sends an important message out.

I hope this morning we might use this opportunity to obtain unanimous agreement to the resolution before this House and thus send a message, both a symbolic one and a substantive one, because I believe both are essential at this time. I hope too that the next 50 minutes or so might be used in a constructive way to ensure that what we are all about in this House is protecting the automotive sector, not turning this into a domestic Ontario political football. Nothing would go further to cause the Americans to give that termination notice than a game of political football instigated here in Ontario over the auto pact and posturing over the auto pact.

Instead, what this province and its auto workers need today is a genuine coming together of all its legislators, national and provincial, of all three political parties, with one solid, clear voice. That is a voice that says the auto pact should not be renegotiated. We all stand as one on those issues.

We should send a message to the other provinces that Ontario is not selfishly protecting only its own position but rather is seeking to build with them a common front or a common position. That message is important because, and again I refer to the Premier's trip to Washington, it is clear that US protectionism is not being targeted at Ontario. The softwood lumber tariff was targeted mainly at another province, but Ontario was caught in on that. We will comment on that at another time.

The reality is that US protectionism is being pointed towards any Canadian industry, regardless of province, from softwood to steel and maybe to autos. In each different situation, the economic base of yet another province may be threatened. Ontario's position on the auto pact is surely not our province versus anyone else's but rather Ontario within the rest of Canada.

Apart from the symbolic message that we might send out this morning in a sense that I hope is nonpartisan, apart from the symbolic message that says we all stand together, politics notwithstanding, I hope we also send a message that we all stand together, province notwithstanding. Also, apart from that symbolic message, I hope this resolution has an important substantive content.

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The fact is that over and above the ongoing trade negotiations, auto trade between Canada and the US is coming under severe scrutiny in some US circles. I emphasize this for members of the House and the public because it is a very key point. Whether or not there were freer trade discussions going on in Ottawa and Washington, scrutiny would be given to the auto pact in the US. It has nothing whatever to do with the freer trade talks. The freer trade talks give a logical platform for those who want to put it forward, but the essential point is that the trading arrangements would be under scrutiny no matter what discussions were under way.

For example, the state of Michigan has a case before the US Trade Representative urging the application of countervailing duties on certain imports in this sector in Canada. Influential members of the Senate, both Republicans and Democrats, are known to press for exactly this kind of protectionist action. Senator Danforth, a Republican from Missouri -- my friends might be surprised to realize that Missouri is now the second largest auto manufacturing state in the US -- could well be joined by Senator Riegle, a Democrat from Michigan, in promoting these countervail provisions. In substantive terms, we must address these concerns which are obviously being looked at by the elected representatives from the two largest auto manufacturing states.

The resolution before the House makes two main points. First, it states that in the opinion of this House, the federal government should make every effort to ensure that the existing provisions of the auto pact, as they affect North American producers, remain in effect. Second, it calls upon the governments of Canada and the US to begin working on a set of mutually acceptable rules that apply to third country manufacturers who produce and sell their cars in Canada and the US.

It is one thing to express general support for the auto pact, as we all do in and outside this House; it is another to recognize the real issues and threats and take the appropriate action to avert a potential problem.

It is my strong view that much of the overt US pressure for countervail could be eliminated if the main cause for such demand, namely, the uncertain status of third-country auto manufacturers, could be dealt with. This is the reason I propose that some way be found to bring these third-country auto manufacturers under the provisions of the auto pact.

In a sense, the contested status of third-country manufacturers, whose share of production and sales is rapidly rising in both countries, is the major substantive issue underlying the current concerns about the auto pact. Surely, by developing some mutually agreed upon rules for this segment, we could complete the unfinished business of the auto pact.

All aspects of bilateral trade arrangements between the Americans and ourselves are obviously becoming subject to increasing protectionist sentiment. Protection or maintenance of the auto pact in this environment -- perhaps "protection" is not the right word -- must be taken seriously.

Let us pause to look at what has happened. Canada now has a large surplus under the auto pact, but that has not historically been the case. It has rarely been the case during the term of the auto pact that Canada has had a surplus; it has been the exception by far, not the rule.

The historic US surplus and the historic Canadian deficit under the pact have been reversed and several other factors have come into play. First, it has been reversed because it has become far more cost effective and cost-efficient to produce cars in Canada. Our lower dollar, wage rates and other factors have simply made it more profitable to produce cars here, and our people should be proud of that.

Second is Japanese investment. With only 10 per cent of the North American auto market, Canada now has 30 per cent of all new Japanese auto investment in North America, much of it with government assistance.

Third, all that Japanese investment has largely been left free of the constraints of the auto pact, unlike the American companies. In reviewing this, we cannot further ignore that formerly we had a more united auto workers' union fighting together to protect jobs, regardless of the border, on both sides of that border. Of course, that unity now has been somewhat fractured by the division in the union and the separating off of the Canadian auto workers.

Finally, General Motors has closed 11 plants now in the US, and American employment is down dramatically, although, happily, Canada has not seen any closures and auto employment is up.

Against this backdrop, the manner in which we defend our position is extremely important. It calls for extreme diplomacy and skill on the part of Canadian politicians. I urge the members of the House that our current Canadian surplus, our jobs, our new Japanese investments must not be waved as red flags in front of 10,000 newly unemployed American auto workers or their congressmen.

As we begin this debate this morning, I urge the members of this House, including members of the cabinet and the leader of the government, not to forget this, as they have recently when talking about the auto pact. I urge this upon them. Careless statements on anyone's part could easily drive embarrassed politicians and their unemployed constituents south of the border, the unions and the suppliers south of the border, into taking action, however symbolic, to terminate the pact.

As I said earlier, the history of the pact has produced far more deficits for Canada than for the Americans but, throughout, we have believed that in the long term we benefited on both sides of the border. We could not panic in earlier years. Canada did not seek to terminate the pact. Its constancy and predictability helped our joint industries to grow, survive and thrive. Now, when the situation has been reversed, Americans should be equally encouraged to show constancy in these years when they have the deficit that we showed in the years when we carried the deficit.

I believe, if the flames are not fanned by political rhetoric and are not fanned by sabre rattling on our side of the border, the Americans will continue to recognize the mutual benefits of the pact. I believe what we need to do now as Canadian and Ontario legislators here this morning is to say, I hope unanimously, that pacts, if they are to mean anything, must hold throughout the swings of balance for the long-term benefit of both parties.

The resolution before this House will send that precise message and will recognize the need to deal with the very contentious problems before us and between us. I urge, therefore, the unanimous support of this resolution, to send a moderate, thoughtful, nonpartisan message of constancy, predictability and common sense to our American friends and neighbours in what has been a very successful pact.

The Deputy Speaker: Does the member wish to reserve his seven minutes for reply?

Mr. Grossman: Yes.

Mr. D. S. Cooke: It is a pleasure to join in this debate. We used to have a lot more discussion in the Legislature a few years ago on the auto industry than we have had in recent years. Coming, as I do, from a community such as Windsor, it is safe to say that nothing has caused more anxiety in our community than the recent discussions and publications of what the plans may or may not be at the free trade bargaining table with respect to the auto pact and the auto industry.

It is not so many years ago that we were in the midst of a very serious depression in the auto industry. Since that time Windsor, Oshawa, Oakville and other auto-based communities have not fully recovered. There has never been a full recovery from that auto depression. Chrysler Corp. and other companies are working at full capacity now, but members of the Legislature may not be aware that Chrysler used to have 14,000 employees and now, after the recession and the remodelling of some of its plants and the large amount of mechanization and automation, we are talking 9,000 jobs, a decrease of more than one third of their employment as a result of automation.

There are people who are still very much hurting as a result of the restructuring of the auto industry.

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One reads in the paper that Mr. Reisman, on the one hand, says the auto pact will not be on the bargaining table and that Mr. Murphy, on the other hand, says the auto pact will be on the negotiating table. Then Mr. Mulroney, the Prime Minister, says, "The auto industry may be on the bargaining table, but if it is on the bargaining table, we will accept only changes to the auto pact that will improve the auto pact." We cannot accept that, because the reality is that anybody in his right mind understands the Americans are not going to allow amendments to the auto pact that will further increase the current surplus in trade which exists between the two countries. That is just not in the realm of possibilities in the current circumstances in US-Canadian trade.

The only possible alternative is to say clearly that Canada has no intention of renegotiating the auto pact, of having the auto industry on the bargaining table, and that it has a totally different approach to trade discussions, such as has been put forward by both my leader in the provincial Legislature and my leader in the House of Commons, Mr. Broadbent.

The Americans and Canadians should have a better understanding of some of the inequities that exist in the United States and Canadian auto industries. It is not all a matter of trade, the final figures and what is counted under the auto pact that Americans and our Prime Minister should be aware of. The reality is that inequities exist, and those inequities are primarily suffered not by Americans but by Canadians.

If one looks at the dependence we in this country have on assembly as opposed to production of parts, one knows that assembly of cars has much less in terms of value added than does the actual production of parts. If one wants to look at research and development, the auto industry does virtually no research and development in Canada, then that alone in the early 1980s was worth $250 million that the Big Three were charged by their parent corporations, and that money was transferred to the American head offices for research and development.

That $250 million does not show up in the auto pact figures, because it is not part of the auto pact. None of the management jobs is counted under the auto pact, and the vast majority of those jobs are at the head offices in the United States. That does not show up in the balance figures under the auto pact because it is not counted by the auto pact.

If one wants to take a look at the number of skilled trade jobs in Canada as a percentage of the total jobs in the auto industry compared with the number of skilled trade jobs in the auto industry in the United States, one will see again that there is a great imbalance, that the Americans have a much higher percentage of skilled trade workers, again because of our dependence on assembly rather than on some of the highly skilled jobs that exist in the auto parts industry.

Our auto parts industry has been allowed to deteriorate over the years, and it has primarily deteriorated because the Big Three have never purchased in Canada the amount of auto parts to put into their automobiles as they have in the United States.

At some point, the provincial government has to get its act together. I do not think a clear statement at all has been coming from this government, from the Premier or the Minister of Industry, Trade and Technology (Mr. O'Neil) on what the government's position is, not only with regard to the auto industry and the auto pact as it comes under the free trade discussions but also with regard to the overall package of the free trade discussions.

If anyone had an idea of where the Ontario government stood. he was absolutely and totally confused as a result of the Premier's discussions and answers to questions from my leader in yesterday's question period. I do not think it is fair that the employees of the major industry in this province should be put through the anxieties they are being put through by the federal Conservative government. Those anxieties have been increased by the lack of a defence of the auto industry by the Premier.

The fact that this resolution has had to come from the opposition rather than from the government itself is an indication of a lack of leadership by the provincial government to protect the main industry that this province is dependent on and that many communities are absolutely and totally dependent on.

We are talking about whether the surplus that currently exists under the auto pact is a result of current circumstances in the auto industry or of structural inequities that exist in the auto industry as it relates to both countries. I think it is clear it is not a matter of the structural problems in the auto industry, because the only country that has severe structural problems in the auto industry is our country. It is a result of several factors. It just so happens that some of the vehicles we are now producing in Ontario are very popular vehicles. Whether it is the van wagon at Chrysler in my home community or some of the other automobiles being produced, these have turned out to be very popular, have sold well and have created surpluses.

Also, the Canadian dollar, as mentioned by the Leader of the Opposition (Mr. Grossman), has meant that our production is very much cheaper or more efficient than American or Japanese production. One of the other factors that makes it less expensive to produce in Ontario than it does in the United States is our health insurance plan, which accounts for a sizeable amount of money on an hourly basis in the United States as opposed to the cost for the manufacturers here.

In the last few minutes before my time expires, I want to point out a couple of things I think this government could and should do. It is time we had a Premier who was willing to defend the major industry to the same extent that Premiers such as those of Alberta and Newfoundland defend their major industries. We have never had that.

Frankly, the Leader of the Opposition should understand that the only time we got any resolution from a government, an all-party resolution, was about a year and a half ago. Right after the 1981 election, I proposed to Premier Davis that this Legislature should put forward an all-party resolution demanding that the report of the federal auto task force chaired by Mr. White and Mr. Lavelle be implemented at the federal level. Mr. Davis's reaction was that it need not be done. It was eventually done, about four years too late, but only after the Conservatives were in opposition. At that time, the government was so arrogant it would not even agree to an all-party resolution.

We should be pushing for an auto industry plan, which is certainly the basis of the White-Lavelle report. That kind of plan is still as relevant today as it was when it was produced and published. We have been put in the awkward position of simply having to defend the status quo instead of trying to build on the basic industry we have.

I have other recommendations, but my time has expired. I appreciate the resolution being put forward, and this caucus will be supporting it.

Mr. Ferraro: We have before us a resolution that seeks to obtain unanimous agreement, which I see forthcoming, from all members of this House on the importance of the automotive industry to this province and to Canada and of the importance of maintaining the auto pact in its present form.

Initially, I was concerned about what specific approach the Leader of the Opposition was going to take. I am proud to say I am pleased with the conciliatory and calm suggestion that we should be unanimous in this respect. I am delighted that is the approach he has taken. I should add that original press releases coming from the Leader of the Opposition were not quite so calm or nonpartisan.

I am not upset or surprised, but sad, that the member for Windsor-Riverside (Mr. D. S. Cooke), speaking for the third party, detracted to some degree from the calmness and had to take some political shots, specifically at the Premier and the government.

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Mr. D. S. Cooke: Well deserved.

Mr. Ferraro: The third party is the first one to stand up and say: "You did not do anything. You did not go anywhere to defend Ontario." When the Premier and the minister, whoever he may be, defends this province, its obvious position is, "When you went down there, you did not do anything." It is almost hypocrisy to the nth degree, but I do not want to get into that.

I want to get to the real intent of the motion proposed by the Leader of the Opposition, and I am delighted to speak in that regard. Suffice it to say the government of Ontario agrees with the basic intent of the resolution. This government is fully aware of the importance of maintaining a competitive automotive industry in Ontario. We are fully aware of the crucial role the auto pact plays in establishing a framework for companies engaged in this industry.

I believe everyone in this House is familiar with the strategic role the automotive industry plays in the Ontario economy. It has been alluded to and I am sure will continue to be by many members of this House, including the Leader of the Opposition. At present, there are in excess of 120,000 Ontarians employed directly in this industry. The automotive industry has a significant direct impact on the economic and social health of over 40 Ontario communities.

The automotive industry also provides significant markets, both domestic and foreign, for Canadian materials, auto parts, production equipment and related goods and services. Indeed, the auto pact helped transform Canada's automotive industry from a small, inefficient, high-cost producer that served only the Canadian market into a modern, strong, efficient part of the North American and world auto industry.

There is no disputing the facts of what the auto pact has meant to Ontario since it was introduced in 1964. Employment in the automotive industry in Canada, dealing with motor vehicles and parts specifically, is up by 88 per cent from an employment in 1964 of 69,000 to an employment of approximately 130,000 in 1985. I might add that Ontario currently has 85 per cent of those jobs. In comparison, growth in total manufacturing in that period is up by only a modest 36 per cent; in 1964, to be more precise, there were roughly 1,492,000 employees, while in 1985 there were 2,033,000. Canada as a whole has seen a 187 per cent increase in vehicle production since 1964 and, even more amazing, a growth of 2,800 per cent in the manufacturing of parts.

The pact has been good for both Canada and the United States. Exports of vehicles and parts to the US have increased by 400 times the 1964 total of $80 million to $33 billion in 1985. Our imports from the US, vehicles and parts in total, increased 38 times the size in that period, to $27.6 billion.

There are also less tangible gains for Ontario, ones that do not always show up on a balance sheet. Announcements such as the recent one at GM in Oshawa are proof that we are also gaining through the introduction of new technology to our industries. There is no doubt that we are in the midst of a technological revolution for many of our industries, and I am not just talking about the automotive ones. The message is clear. We have heard it before. Adapt or disappear. The automotive industry is highly competitive because it is one of those industries that must, for survival, keep up to date with the latest innovations. Ontario benefits from the newest in technological processes, materials and products.

One other interesting note: despite what many people think, Canadians have also seen benefits in their wallets. Before the pact, Canada's car prices were between 10 per cent and 30 per cent above the comparable US prices. Currently, once the rate of exchange is considered and before taxes, which is a very important point, Canadian prices are actually three per cent to eight per cent below US vehicle prices.

Let us not kid ourselves. The auto pact has also had its downside for Ontario and Canada. We have seen a reduction in research and development and engineering activity in that industry in Canada. Let us be honest. The vehicle assembly industry in Canada is still 100 per cent foreign-owned. It is only in the parts industry that there is substantial and growing Canadian ownership.

None of that detracts from this government's basic stand. The auto pact works. It is good for both countries. It should not be subject to open negotiation in any free trade talks. This government and this minister have been consistent in that regard, notwithstanding the remarks from some members of the New Democratic Party.

The auto pact works for several reasons. Most notably, it is an agreement that is good for both countries. It is good for companies in both Canada and the United States. It works because vehicle and parts manufacturing companies in Canada agreed to the safeguards that were established in the agreement.

Vehicle and parts industry companies agreed to achieve safeguards because, by doing so, these companies were able to trade goods between Canada and the United States duty-free. This duty-free trade was and still is of significant benefit to the companies. As the North American market becomes more competitive, this duty-free trade will remain a significant benefit. Without this commitment on the part of predominantly US-owned vehicle and parts manufacturing companies, the auto pact would not have worked. We must. not lose sight of this crucial fact.

In the resolution that is currently before us, we are advocating that the auto pact should not be amended as a result of the present trade negotiations between Canada and the United States. For the past 12 months, the government of Ontario has been continually urging the Canadian federal government not to permit the auto pact to be discussed during these free trade negotiations.

While we have received numerous assurances, both public and private, that the auto pact will not be on the table, the Ontario government will not feel secure until Canada has received a commitment from the US government that the pact will not be changed. The auto pact can be changed in several ways, and we must ensure that none of these occurs.

If the tariffs on automotive products traded between Canada and the United States are removed, then the auto pact is destroyed. There is no incentive for a company to meet the safeguards and there is no penalty for a company that does not meet them. The tariffs must not be removed.

The safeguards must not be changed unless a change will bring additional benefits to Canada and the United States. At present, the auto pact safeguards and the additional commitments made by the US vehicle manufacturers are, in essence, Canada's automotive policy. When one considers the massive transformations that are occurring in this industry, particularly because of the major foreign investments being made by Asian vehicle and parts manufacturers in North America, one very quickly realizes that Canada should not go through this period of change without an automotive policy.

Now is not the time to change the safeguards, especially when we consider how well the auto pact has worked during the 22-year period, particularly during the past few years. Basically, the major strength lies in the commitment of both countries to ensuring the continued existence of the auto pact.

I might add that article 4 of the auto pact provides a framework for both countries to discuss issues and concerns that may arise respecting each country's automotive industry. It is because of the existence of this framework that the government of Ontario has repeatedly stated that the auto pact should not be discussed during the free trade negotiations.

It is the policy of the Ontario government that all foreign vehicle manufacturers that sell a significant number of vehicles in Canada should make appropriate contributions as defined by the auto pact. In addition, the vehicle manufacturers that establish motor vehicle assembly plants in Canada should be members of the auto pact. The announcement of the Suzuki plant indicates that Suzuki officials intend to reach auto pact status within two years. We have similar commitments from Toyota.

In conclusion, the Ontario government is adamant and in total concert with the intent of this resolution. We realize the significance of the auto pact to Ontario and to Canada. As a party and a government, we wholeheartedly endorse that the Leader of the Opposition has brought this before the House.

Mr. Partington: I am pleased this morning to speak in support of this motion put forward by my leader and to indicate my strong support for the automotive products trade agreement of 1965 or, as it is known to most people, the auto pact. A thriving automobile industry is vital to the economic wellbeing of Ontario and Canada.

As we are all aware, the automotive industry is Canada's largest manufacturing industry. In fact, Canada is the seventh-largest producer of cars and trucks in the world. More important to this debate, 95 per cent of this country's automotive manufacturing is concentrated in Ontario. In the Ontario work force, one person out of seven is employed in the automotive sector or in an industry related to it.

From these statistics alone, it is easy to see just how important the automobile industry is to the province-wide economy; but we must not lose sight of the importance, and in many instances the critical role, that the auto industry has in the economy of many of our municipalities.

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For example, it is estimated that 41 municipalities in this province depend upon auto-related industries for their economic wellbeing. More than 50 per cent of Windsor's manufacturing work force is employed in the auto industry. In Oshawa, the figure is more than 80 per cent. It is not difficult to imagine what effect a downturn in Canada's automotive industry would have on these two communities.

Oshawa and Windsor are not the only communities that would suffer under such an eventuality. Most people know there are two large GM plants in St. Catharines; in fact, in St. Catharines, GM has the largest metal casting plant in Canada. Many members may not be aware of how much the Niagara region relies on the automotive sector for its economic wellbeing. While we are famous for our wine industry and fruit growing, the fact remains that, along with the GM plants, there are 30 auto parts manufacturers and 267 automotive-related metal fabricating and machine shops in the Niagara region, including such well-known corporations as TRW, Hayes-Dana and Court Industries. Together, these many manufacturers employ more than 26,000 workers.

Overall, these automotive and auto-related jobs represent more than half -- 56 per cent, to be precise -- of all the manufacturing jobs currently located in the St. Catharines-Niagara area. Any downturn in automotive production would obviously lead to serious repercussions for this area of our province. One event which could trigger such a downturn would be a change to the current US-Canada auto pact brought about during the course of the freer trade negotiations currently taking place.

The existence of the auto pact since 1965 has played a critical role in the development of Ontario's auto industry. For example, in 1964, the year before the agreement was signed, GM of Canada produced only 290,000 vehicles and employed fewer than 25,000 people. Two years ago, the latest year for which comprehensive statistics are available, GM built more than 840,000 automobiles, 75 per cent of which were exported to the US. Employment by the company is now at an all-time high of 50,000. Roughly 20 per cent of those jobs are located in St. Catharines, where GM last year invested $225 million. As Ron Migus, the manager of the St. Catharines GM plant, points out:

"Once the auto pact came into effect, we began to rationalize our product lines. That meant we produced more starting motors, for example, and used some at home and shipped the balance across to the US. The effect was that we had more volume, the unit cost dropped and we were more competitive. Since that time, we have just grown on and on."

There is no denying that the auto pact has played a fundamental role in the development and expansion of our automotive-based industries. It is because of the auto pact that 56 per cent of all auto parts produced in Canada are exported to the US. The fact remains, however, that this 56 per cent represents only six per cent of the parts used in the US car assembly. Without the protection of the auto pact, idle and underutilized plants in the US could easily absorb Canada's total production.

The end of the auto pact would not only devastate the Niagara region's auto industry but would also send shock waves to our provincial and national economies.

So far, I have confined my remarks solely to the direct role played by the automotive industry in our economy and the impact the auto pact has on that sector. We cannot forget, however, the importance of the auto industry vis-à-vis many of our industries.

For example, in 1985, it is estimated that our automotive sector consumed 37 per cent of all iron foundry production, 17 per cent of the rubber products, 15 per cent of the machine shop products, 14 per cent of processed aluminum, 13 per cent of wire goods, 8.5 per cent of carpeting and fabrics and eight per cent of the glass products produced in Canada. Of course, it is a tremendous user of high technology.

The Canadian automotive industry is the final destination of more than 20 per cent of all domestic steel shipments, representing more than 10,000 jobs in the Canadian steel industry. It is not hard to imagine how important a healthy automotive industry is to these manufacturers or to imagine the disastrous effect that a decline in our automotive production, brought about by changes to the auto pact, would have on these associated industries. The livelihood of the one out of every seven Canadians who depend directly or indirectly on the automotive industry for their jobs would be placed in jeopardy.

In conclusion, it is clear that the auto pact has played a critical role in the development of our automotive industry. This expansion in the auto sector has in turn fostered growth in many of our other industries. In short, the auto pact means jobs for communities such as St. Catharines, Oakville and Oshawa. The continued economic wellbeing of Ontario and its residents rests on maintaining the auto pact.

As members of the Ontario Legislature, we must take every available step to ensure that the auto pact is not amended or terminated as a result of the present trade negotiations between the governments of Canada and the US. For the sake of the workers and communities that would bear the brunt of an end to the auto pact, I urge members to support this resolution and thereby send a clear message that we are united in the support of our automotive industry. The economic future of Ontario depends on our efforts.

Mr. Morin-Strom: I am very pleased to be able to speak on behalf of our party on this resolution. It is an important resolution, one that I am sure will get unanimous support because in effect it is a motherhood resolution for the citizens of Ontario.

We have to look at the auto industry, at the jobs that are dependent upon the auto industry and at the importance of the auto industry to the whole economy of Ontario. The current strength of the economy in southern Ontario is heavily dependent on the levels of auto production and the levels of auto exports to the United States. Today we enjoy a considerable surplus because of the competitive position and the modern facilities we have in our automotive industry.

It is unfortunate that we even have to have a resolution of this type in this Legislature. It is unfortunate that the auto pact is a subject of discussion in the trade negotiations with the US. There is really no need for that to have happened.

The initiative of the federal Progressive Conservative government to put everything on the table in trying to pursue a comprehensive free trade agreement has been a disastrous one for Canada, one that has resulted in concession after concession affecting a number of industries in our country. Rather than taking the bull by the horns and focusing on those trade irritants that were the problem, we have opened up a complete new can of worms. We have opened up discussions on a wide area of concerns that were not previously concerns of the American administration.

The focus on US-Canada trade has been heightened as a result of the federal government's initiative, and we have put the focus on many areas that were not previously the subject of discussion. Prime among those is the automotive industry.

There was no suggestion that the auto pact required revision or that we needed any changes in the way the auto industry was being handled on a bilateral basis between the US and Canada. There were concerns about the heavy importation of automotive products from Japan and other importing nations into both Canada and the US, but it is only as a result of the opening up of and the focusing of discussions on the Canada-US trade relationship that the auto industry has become subject to potential disruption in Canada if, in fact, the auto pact were abrogated by the US.

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The auto industry is vitally important to Ontario. I have a few statistics here. New capital expenditures in the automotive sector during the 1980s have averaged close to $800 million per year, leading all manufacturing sectors. In 1986, more than $4 billion in new investments have been announced by North American auto makers. North American auto makers in Canada in 1984 exceeded their production requirements under the auto pact by 70 per cent and their Canadian value added by more than 20 per cent.

Some have used the argument that the auto pact will not be necessary in the future because we are exceeding those targets by such a great extent today. We are in a strong competitive position in the auto industry today, largely as a result of the exchange rate and the investment that companies have put into modern facilities. There is a labour cost advantage in Canada because of the devaluation of the Canadian dollar, but historically, over the complete term of the auto agreement, the current surplus has not held up. In the longer term, we are roughly in balance in the automotive trade between the two countries.

We have to look at the auto agreement as ensuring the long-term future of that industry. We cannot be assured that we will maintain a strong competitive position in the longer run. We do not know what the exchange rate might be five years from now or whether the auto industry will continue to modernize and develop new plants in Canada. The auto pact gives us some assurances that we will get a fair share of that investment and that Canada will have a fair share of North American auto production.

One of the aspects of this motion I particularly want to support is the suggestion that all foreign automobile manufacturers building plants in Ontario should be urged to attain auto pact status. I hope it will even go beyond that, and we ask all major importers to attain auto pact status so that we have assurances that the major sellers into Canada are producing cars in Canada and that we get a fair share of the production in proportion to the numbers of cars sold in our economy by those major producers.

In terms of actions on the importers, though, we have to be concerned about the types of auto plants that are being introduced here. The evidence is that the Toyota, Honda and Hyundai plants that are coming in are not integrated manufacturing plants but rather assembly operations. I believe they are called completely-knocked-down plants in the industry.

All the sophisticated work and most of the jobs that go into the production of those cars go into the components and major subassemblies that are produced in the home countries, primarily Japan or South Korea. Then they are sent to Canada and the final assembly is completed here. In terms of numbers of jobs, my understanding is that typically less than 20 per cent of the jobs are provided in those plants compared with what would be provided in major US-owned plants such as the ones in Oshawa, Windsor and St. Catharines.

We have to ensure that we get a fairer share of the jobs in the production of those automobiles from the foreign suppliers than we are currently being assured of by the plants that are being installed here. We have to focus on that issue.

I want to express as well some major concerns about the provincial government's position. The Premier has been very wishy-washy in his approach to the auto pact. He claims to be a defender of the auto pact but he has never taken any tangible action to protect Ontario's interests in dealing with either our federal government or with the American government.

Yesterday, we heard him say that he supported the Prime Minister's initiative when he was in Washington; however, he did not understand what the initiative was. It is time that all three parties recognize what the free trade agreement is that is being pursued and stand up to protect Ontario's interests, to protect the interests of the automobile industry and the workers in this province in general by taking a strong stand and by ensuring that the auto pact and our other industries are not subject to loss in these negotiations.

Mr. Grossman: I listened with interest to the comments of the members who have spoken in this debate and I agreed with many of the comments. The member for Sault Ste. Marie (Mr. Morin-Strom) has identified the reality that the terms of trade do change between the countries over periods of years, and that is the point I was winding up with. If a pact means anything it means that the two parties, the Americans and Canadians, stand together regardless of how the winds shift from year to year, because constancy and predictability mean a lot.

I want to say to the member for Wellington South (Mr. Ferraro) that I appreciated his comments about the nonpolitical nature of the exercise this morning. I want to say that we reserve the right to criticize the handling of this issue over time. Indeed, in his remarks, the member for Windsor Riverside criticized my own party from years back for certain actions on this. We are all free to do that and I think we must.

What disturbs me is that we have an opportunity this morning to express the unanimity of this House, not for political posturing and not for rhetoric, but to give the vote of constancy that says the auto pact and the employment of auto workers in this province are more important than political posturing. Quietly this morning, we meet, three parties in this assembly, to do just that.

I say with all respect that I was more than a little disappointed to see that for most of this debate two, and on one occasion three, of 51 members of the Liberal Party of Ontario were present in the House for what I consider to be an important opportunity to express confidence in the auto pact. As we wind up the debate and get ready for the next, three more have entered. No cabinet minister in this province has deemed it important enough to attend a one-hour discussion in this House to protect the auto pact. No minister of this government thought it appropriate to take one hour of his time simply to sit and express by his presence his concern about maintaining the auto pact.

Mr. Ferraro: On a point of order, Mr. Speaker: Notwithstanding the remarks by the Leader of the Opposition, the Minister of Industry, Trade and Technology was here for most of the remarks made by the opposition, as was the Minister of Education (Mr. Conway).

The Acting Speaker (Mr. Morin): This is not a point of order.

Mr. Grossman: In the remaining time I have, I want to make this point because it is relevant to the point I was making about the degree to which the auto pact is going to become either a political football in this province or a symbol that we are all going to stand together for the auto workers, not for anyone's personal political gain.

We have talked this morning about how well Canada is doing currently under the auto pact. We have talked about the surplus we have had and about the Japanese investment we have here. We have talked about the economic climate and about our productivity. We have talked about the 11 GM plants in the US that have been closed. We have talked about the fracture in the United Auto Workers. We have talked about all those things with a lot of intelligent contributions made.

If anyone takes these facts, runs them up the political flagpole and does it in such a way as to try to turn it into a campaign to fight something that is not there, he is going to put it there. If we invite those beleaguered UAW members, the 10,000 laid-off auto workers and their congressmen to take action against a perceived problem -- and the member for Sault Ste. Marie has made the point -- the productivity, the surplus here is not an auto pact function, it is a function of how well we make cars in Canada, the competitiveness of our workers here, the environment within which they work, the wage rate and our efficiency.

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If, indeed, anyone in this province -- and I say this now that we have one minister of the crown taking time to join in this resolution this morning, l say to that one minister present -- if any member of the government, including its leader, chooses to use this as a platform to raise a red flag in front of the Americans -- who at any time, this morning, this afternoon, next week or on the Premier's next visit to Washington, could serve notice of termination of that auto pact with or without the freer trade talks
-- then someone is going to have to be called to account for having said to the Americans, having put in the front page of the Detroit, Michigan and Missouri newspapers, having put it to them in clear and blunt terms that we are doing well here in Canada, we like it and do not interfere, remind them how well it is going for us here and then turn it into a political football to fight and bash the Americans, where what we hope they do is sit quietly while we enjoy a surplus under the Auto Pact -- a surplus we are entitled to, just as they were entitled to one when they had it.

I close this morning in thanking the members for indicating what I think will be unanimous support to this resolution and remind them that the support they express in words has to be expressed in the way they express those words, in the way they handle these issues, in the degree to which they will put diplomacy and tact on behalf of protecting those jobs ahead of a real political desire to score some domestic political points in order to achieve a domestic political goal.

It is simple in my view. The more people play politics with the auto pact in Canada, the more they are likely to kick off exactly the notice of termination south of the border that they want to pose here as trying to fight against. It is time for statesmanship and leadership.

Let the words, echoing in a very empty chamber thanks to the absence across the floor, echo from here throughout the government building and the cabinet room: diplomacy and tact, looking after the auto workers ahead of political rhetoric. I thank the members for their support for this important resolution.

Hon. Mr. Conway: On a point of privilege, Mr. Speaker: Briefly, I want to respond to a charge made by the Leader of the Opposition, which quite unhappily speaks to his peculiar sense of morality. I happened to have been in this assembly and to have heard the honourable member's speech in its entirety. It is not true to say, as the Leader of the Opposition said, there was no one here listening to him. I sat through the entire presentation. I left only to process --

lnterjections.

The Acting Speaker: Order. May I remind the member to take his seat. Order. Would you please take your seat? Order.

This ends the debate on resolution 41.

DAY CARE

Ms. Gigantes moved resolution 42:

That in the opinion of this House, since:

(1) the fact that the select committee on health (established to consider the role of the commercial, for-profit sector of health and social services) has not yet reported;

(2) the fact that this government is on record as supporting a moratorium on further privatization of health and social services;

(3) the fact that the Legislature has waited a year for the promised white paper on child care; and

(4) the fact that the consultation process to lead into the white paper on child care has not begun;

The government of Ontario should prohibit direct public funding of commercial child care programs, for the following policy reasons:

1. the effective use of government revenue;

2. the growing evidence that nonprofit child care programs are superior in quality to programs provided in commercial setting; and

3. the experience of inadequate service and lack of public accountability in the similar field of care programs for the elderly, that is, commercial nursing homes.

The Acting Speaker: The honourable member has up to 20 minutes for her presentation and she may reserve any portion of it for the windup.

Ms. Gigantes: I feel I should explain the rather negative tone of the resolution that I have brought before the Legislature this morning. It has a positive purpose.

At this time, we are at a decision point in terms of our policy on the provision of child care services in Ontario. We know from balloons that have been floated on behalf of the government and leaks through associations of commercial day care operators that the government is on the point of deciding it will provide direct operating funds, public funds, for operating costs to child care operations in this province, including those run on a commercial basis.

Because we are at that decision point and because I feel that decision constitutes a turning point in our approach to public policy on this question, I believe we must directly address the question of whether public funds should be going to commercial child care operations.

I remind members of this Legislature that, included in the commitments undertaken by the Liberal government in the accord with the New Democratic Party in June 1985, following the election and the change of government in this province, there were four important commitments that have a direct influence on the decision that lies before us in the field of child care policy.

First, the accord said there would be a select committee to examine the commercialization of health and social services in Ontario. There was a recognition in the accord, an acknowledgement by the Liberal Party of the certainty the NDP had identified, that the growing commercialization of people services in this province was a threat to the financial structures of this province in terms of public fiscal responsibility and to the quality of care we seek to provide for those people in our communities, whether they be old, young, handicapped or deprived in some way. The quality of care we provide for them in a public sense is threatened by the fact that we are allowing the commercialization of the services we provide.

It is in acknowledgement of that fact that the Liberal government agreed with the NDP that we should have a select committee inquire into the question of commercialization. That select committee has not yet reported, but this government is clearly on the verge of increasing the degree of commercialization in the child care sector of this province and beginning on a path of development of child care services that will see us go down the road we have travelled on nursing homes in providing care for the elderly in this province and that we have seen in other provinces as a bad example of how to provide services to people.

In the NDP accord, the government also agreed that there would be reform of the present nursing home system, the licensing and inspection system of nursing homes in Ontario. That is a crying need the government has had to acknowledge, because it has been a shock for people to recognize during the past several years the level of services and the degree of accountability of nursing home operators and their operations in Ontario. There is an acknowledgement by the government that we have to do something very basic in terms of reform of our nursing home system. We have not seen that take place yet, in spite of the many months that have passed with this new government, but there has been an acknowledgement the problem exists.

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The accord affirmed there should be "reform of day care policy and funding to recognize child care as a basic public service and not a form of welfare." Following on that acknowledgement and promise made in the accord, we have been told to await a government white paper which will provide us with an outline of government policy on the subject of child care. That white paper was expected in and promised for June 1986. It has not appeared. It looks as if the government is about to take measures in terms of financing for the direct operating costs of existing centres which will inhibit an overall comprehensive review of the development of a good child care service for the people of Ontario.

The fourth item in the accord to which this question is directly related, in my view, is the statement that the government would undertake "affirmative action and employment equity for women, minorities and the handicapped." In terms of the needs of women in this province, a good child care system is an absolute necessity.

In the past few years, there has had to be an acknowledgement that the situation of child care services in this province has been dismal. There must be a radical effort made -- and I mean radical, a whole new approach -- to provide good quality child care services for the families of this province. It is not a women's issue; it is a children's issue and bears directly on the future of this province.

Women are in the work force. Women with young children are in the work force. In fact, 64 per cent of the women of Ontario with small children were in the work force in October 1986. At that point, there were only 85,479 licenced or supervised spaces available in day care centres in this province. In 1985, 59 per cent of the women of this province who had children under the age of six were in the labour force. That represents a remarkable increase in the participation of young mothers -- some of them may be old mothers but they have young children -- in the work force of Ontario.

There is a problem in the provision of child care services. We can break that problem down into sections. There is a problem with access; there are not enough spaces. We know there is a problem of affordability -- the fees being charged are outside the means of the ordinary working family -- and there is a problem with quality. We do not have a system which ensures quality. In fact, we may be on the verge of funnelling money into the very part of the system, the commercial sector, in which the quality now is the lowest.

Members will be aware that last week the Coalition for Day Care in Ontario publicly released a survey undertaken for the work of the parliamentary committee in Ottawa considering the development of child care policy. That survey indicated that, according to the inspectors of day care services, there is a marked difference in quality of programs across Canada when one compares commercial child care centres with nonprofit child care centres.

That is the first comprehensive look at the quality of program provided in child care centres across Canada. It is a survey done by people who know what that service is, who are paid to look at that service in terms of quality. It is a survey that should give the government full warning that to pour public money now into the operating costs of commercial child care centres is not the way to go if we are aiming for quality programs for children in this country and, more particularly and of more concern to us, in this province.

Within Ontario at this stage, we have a very haphazard system. The minister has made it clear that he has grave difficulties; he has as yet no policy on the matter of how to increase accessibility for families to the provision of child care services. Where are the spaces going to come? In the meantime, he has to worry about all the spaces that exist and protect them. This is the kind of argument he has been presenting publicly about why we should be putting public funding into for-profit day care.

As late as yesterday, he said he and other provincial ministers, who met with the federal Minister of National Health and Welfare in Ottawa last week, discussed the question of federal cost sharing of provincial public funding for commercial centres and that only one province was against the idea. That one province was Manitoba, and I am very proud of the position of that province. There has been a willingness in Manitoba to face facts about the relationship between public funding and the need for public accountability about quality of service for vulnerable populations. In that, I include the children of Ontario as well as of Manitoba and other provinces.

If we are going to look for good child care services, if we are not going to do an experiment with the children of this province, a whole generation of children whose mothers are at work from the earliest ages when those children are growing up, then we have to take care about the way we develop our system. It is absolutely vital.

The minister tells us he wants to make sure there is a choice available to families. He makes it sound as if the choice that families are looking for is putting children in a commercial day care operation as opposed to putting them in a nonprofit day care operation. Somehow he tends to mush those ideas together to try to confuse the issue. That is not the choice people are looking for. The choice families and mothers are looking for is one of having a service of high quality available or not having it. The fact right now is that the choice is not available, and the answer to that problem is not to fund commercial sector day care, but to provide nonprofit day care which we know even now is of higher quality.

If we look at the experiences of other governments, we can see a very bad experience in Alberta, which in 1980 began operating funding for commercial day care centres. There is no doubt in the mind of anyone who has looked at the situation in Alberta since then that there has been a noxious effect on child care services in Alberta. The diversion of public funding to commercial sector child care operations has increased the number of spaces in Alberta, but at what cost?

Objective observers will say, and I will cite articles from the Calgary Herald to indicate it, the quality of service for children in day care centres in Alberta has gone down as a direct result of the decision to provide public funding to private operations. The reason for that is simple. As public funding has been available to commercial operators, they have aggressively gone into a market which is huge, where demand is overriding and competition is nonexistent.

If you can get a licence, you have a market, a high level of demand for your product, but the quality is not there. The quality of service has gone down; the commercial sector in child care has expanded aggressively and the result has been access, more spaces, but no quality care for a great many children in Alberta and a system which is not publicly accountable either in financial terms or quality of service.

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I will quote very briefly from a series of articles done by the Calgary Herald in the fall of 1985 in an attempt to assess what was happening in child care in the province and what had produced the effects that were then visible. They quoted directly from day care operators, from parents and from people who worked in day care. When one reads through these articles, it is quite clear there has been a cause-and-effect relationship between the decision to fund commercial centres and the fact that the whole child care sector is now dominated very heavily by commercial services; the quality of those services is low and the public accountability is low.

One day care operator was quoted as saying to the reporter who worked on this series: "If you want to make a lot of money, go into real estate. If you want to make a little less and care about children, then go into day care." He ought to know. For 10 years, he has been building day care centres in Calgary and throughout the province. He now has about 20 day care centres with 1,500 children being provided services through those centres. He is a very rich man.

He also says that he accepts the need for more governmental regulation but his bottom line is free enterprise. This is how he puts it: "If people do not like your damned day care, they do not have to go to it." That is what competition is about in the provision of services to people. The demand is so overwhelming out there that if we provide public funding to those commercial operators, that is the area of service that will boom aggressively.

If anybody has any doubt about that, he should take a look at the press release that was put out last week by the Association of Day Care Operators of Ontario, the private day care operators, the commercial sector in day care. It is a very aggressive statement about how they want public support in financial terms for growth in their sector of that service industry. Take a good look at it. These people are not content to see grandfather clauses; existing day care centres are going to get $3 per space and no new commercial day care centres will get money, and this is the proposition the government has been floating. They will not stop there.

As in Alberta, these commercial, profit-oriented operators are going to move forward aggressively in this market and if we give public funding to them, we are delivering over a new service sector to commercialization and privatization in this province. We are doing it and putting our children in the position of being the vulnerable recipients of a service for which there is no quality accountability and there is no financial accountability. Let us see the books of operators to whom we give money. We have gone through this in the nursing home field. If we have not learned the lesson now, we are dumb.

This is a negative resolution. I phrased it that way so I could be as direct as possible in indicating why I feel we must turn from this kind of project to the better way, which is to insist that services to people in Ontario, particularly the most vulnerable groups of people in the province, the elderly, the young, must be provided on a nonprofit basis.

Mr. Cordiano: I want to start off by talking about what is at the heart of what the honourable member has just stated in terms of a resolution. She has expressed a great deal of concern for quality child care services and accountability. I want to assure the members of this House and the honourable member that, indeed, it is not something we have shunted aside as a concern expressed by this government. We are very concerned about the question of accessibility, affordability and, as expressed by the minister, a choice for parents, because I think that is important. I will get back to that later.

In Ontario, it is essential to remember that half of the present licensed capacity and approximately one third of the subsidized spaces are provided by the for-profit centres. We cannot negate that factor. It is an important piece of information that we simply cannot remove. It is a realistic one; it is one that currently exists.

As the government struggles with this question and examines new funding approaches, there is a need to ensure that the existing spaces I have just referred to continue to be available to families currently dependent on them. There is also a need to ensure that the same quality continues in the for-profit centres as well as in the nonprofit centres.

I want to refer to the famous report to which the member has referred and other members have looked to for an explanation of quality in child care. The report is called An Explanatory Review of Selected Issues in For-Profit Versus Not-For-Profit Child Care. It was released last week. It is frequently referred to in terms of its funding related to a differential in the quality of care between nonprofit and the commercial sector. However, what has not been referred to is the analysis of the potential impact of differential funding support and the recommendations of that report.

I notice the member smiling, but we have to look at this in an objective fashion. Because of the potential implications of such a policy, the report outlines concerns about the introduction of any policy designed to discriminate against for-profit businesses. I have to look at some of the terms of reference. According to the report, if we discriminate against for-profit businesses, we run the risk of producing a negative impact even on commercial centres that closely resemble the nonprofit centres that are operating at a high-quality level.

The relatively high incidence of low-quality care found in for-profit day care centres, particularly among small independent operators, is mainly due to the fact that for-profit operators generally do not have access to the level of public financial assistance that is available to nonprofit operators. That is a fundamental distinction. Obviously, the not-for-profit centres have greater resources. Consequently, the quality in those centres is marginally better in some cases and far better in others. The report has referred to this.

Finally, the report states that if we use any measures that use auspices -- and that is a designation indicating whether a particular child care operation is profit or nonprofit -- if we use it as a restriction, we run the risk of limiting the number of child care organizations or raising costs, and in that way pushing parents towards the unregulated child care operators. That is a very great portion of the kind of care that is being offered, and a lot of parents have to turn to it. That is a realistic situation that exists, and we want to ensure that it does not continue and that the situation will not be aggravated.

The study concludes that efforts to discriminate against for-profit operators should therefore be approached with great caution. It goes on to state, "Rather, a more productive strategy for improving the quality of care is through an integrated approach which combines change in the legislative and regulatory framework with changes in the level of financial assistance."

This government is giving consideration to new funding measures such as the member has pointed out, but I want to make a distinction between what she is saying and what we are attempting to do. I am going to allude to that later. We are looking at direct operating grants and a move from needs testing to income testing.

To maintain the existing commercial sector and support quality service, equity requires that consideration be given to this sector. As a result, Ontario will be pursuing with the federal government greater flexibility within the cost-sharing arrangements to include the commercial sector.

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Members have to remember that under the present legislation in Ontario all licensed centres, whether commercial or noncommercial, are subject to exactly the same standards and inspection requirements. That is going to continue to be the case.

Ms. Gigantes: There are no inspection requirements; there are no provincial standards.

Mr. Cordiano: Sure there are.

As the minister stated yesterday, he is committed to providing an early indication of our program initiatives. However, the effect of the federal-provincial discussions needs to be considered before announcements can be made. I am going to tell members what the agenda calls for in terms of the timetable. On February 1, a series of bilateral meetings between individual provinces and federal government officials begins. Finally, in June, a federal-provincial agreement should be confirmed at a meeting of ministers. The Minister of Community and Social Services (Mr. Sweeney) stated yesterday in the Legislature, "I am assured by the federal government and other provinces that this timetable is the speediest they can follow."

I want to go back to what the member for Ottawa Centre (Ms. Gigantes) referred to with regard to the trend towards commercialization. She was referring to some of the information brought out by the federal report. The minister has indicated, as I am sure she is aware, that the report is in error and that the growth since 1985 in the commercial sector has not been the reported 38.5 per cent but 4.1 per cent. That is a substantial difference and is fundamental to understanding where this government is going in terms of the question of the commercialized sector or the not-for-profit sector.

There is no intention on the part of the government to expand the commercial sector. We are simply trying to increase the quality of what we have now. The situation is that half of the day care spaces available are in the commercial sector. There is no way we can change that around in the immediate and foreseeable future. We are going to move in a transitional stage to the Utopian vision my honourable friend has. That is where we are.

In a perfect world with unlimited resources, we could do what the member is calling for, but I do not believe that is a very realistic proposition. We do have a commercialized sector. Also, one is talking about an investment in capital in taking these over, in turning these centres from commercialized to not-for-profit or nonprofit centres. Sure you are.

The resources that would be required to do that would jeopardize the entire number of spaces, which I believe is about 50,000 in the commercial sector. What are we going to do to shore up the spaces there now if we are going to eliminate those commercial spaces?

A more realistic approach, and one this government has taken, is to ensure that we bring up the level of quality, that we have more accessibility and that day care becomes a basic service and not a welfare service by moving from this situation, which we have inherited, to one in which we see day care becoming a basic service and not a welfare service. There is no disagreement there. There is no disagreement with the stated intention, but on how we get there we are at odds with each other.

For that reason, I cannot support the member's resolution, at least the last part of her resolution.

Mrs. Marland: I must say at the outset, in rising to speak in strong opposition to the resolution from the member for Ottawa Centre to deny direct funding to commercial child care, that I was tremendously amazed that of any member in the House, this member would make this resolution without a solution. Even if that was ideally the thrust of her wish, I have not seen any solution in anything I have heard today.

I also would like to take very strong exception to the fact that she is suggesting that the experience of inadequate service and lack of public accountability in the similar field of care programs for the elderly, i.e., commercial nursing homes; that is a very dangerous and malicious slam against commercial nursing homes. There certainly are some problems in some areas, but to make a generalized statement such as that is not in the interests of the care of the elderly in this province whatsoever.

I oppose and call on others to reject the resolution before us today. To call for the government to prohibit direct funding of commercial child care programs is a shortsighted, narrow approach that is grounded in ideology and ignores the reality of the child care situation in Ontario. Moreover, it represents a punitive approach in two ways. First, it seeks to discriminate against private sector day care operators who happen to supply half the province's licensed group of child care spaces. Second, and still more important, it would punish the thousands of parents who have their children in private centres.

This resolution is also irresponsible. It would create a situation in Ontario in which we might have to forfeit the opportunity for increased assistance to all our day care centres. Believe me, profit and nonprofit alike, they are all struggling with the same big problems, such as liability insurance costs, shortage of qualified child care workers and the justified need to increase the salaries of those workers.

If a new arrangement can be reached with the federal government to allow the cost-sharing dollars to flow to both commercial and nonprofit child care centres, we must take advantage of these new moneys to enhance the quality and availability of all forms of child care. I cannot, nor should anyone else, support a position that will deny Ontario the chance to benefit from a new arrangement that would help address some of the chronic problems we face in terms of quality, affordability and availability of child care spaces.

As a Progressive Conservative, I strongly believe that there is room for all sectors to play a role in the delivery of child care. Parents in this province should be provided with a wide range of alternatives in choosing the type of care that they, and not the government or some political philosophers, want for their own children. This means a free choice among government-operated, nonprofit and commercial centres. Only by providing many different modes of delivery can we produce the highest quality of care.

Having said that, I want to place it on the record that I am apprehensive about the direction in which the Minister of Community and Social Services is moving in terms of lobbying Ottawa. The Liberals want direct funding for child care centres. I am concerned about this approach. Specifically, I am not convinced that the problems in child care are best addressed by setting up a whole new funding structure that provides money to the centres instead of to the parents.

I have very strong reservations about moving in that direction of transforming child care into a directly funded institutional bureaucracy. If the Minister of Community and Social Services had taken the time seriously to consider the views of the province's commercial day care operators, he would have known that even the operators themselves do not want direct grants. They advocate moving to income testing and expanding the current system of subsidies so that more families can qualify for assistance, so that more money will be available for subsidization and so that cash flows are higher so that salaries can be raised and centres can attract good staff. Instead of direct grants, a better approach would be to focus all efforts on expanding and improving the existing subsidization system by implementing income testing in both sectors and giving more money to the parents.

I am in support of part of the minister's position, specifically his efforts to convince the federal government to allow income testing to be applied to the commercial sector. Income testing is less intrusive, easier and cheaper to administer and would allow more parents to qualify for the assistance they need. I urge the minister to focus his efforts on improving the whole subsidy system.

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Should the minister insist on pursuing the giving of direct grants to child care centres, he must at least ensure that both the commercial and nonprofit sectors receive equal benefits. We must do everything we can to sustain existing spaces and create new ones to meet the heavy demand for child care spaces. Any preference shown to one sector of child care providers could result in a dramatic decline in accessibility and the possible erosion of half the province's licensed group child care spaces.

In many towns across the province, the only child care spaces are in commercial centres. To deny direct moneys to such centres would not only discriminate against them, but it could also lead to a situation where private sector operators pull out, leaving no child care of any kind in those towns.

I would like to conclude by stating clearly I do not support this resolution because it ignores the realities of child care in Ontario and it represents a shortsighted, punitive approach towards the private sector which we so often find as a characteristic of members of the third party.

If the argument is seriously because of the variance of standards and quality of the private centre providers, then let us deal with these through licensing and inspection of an upgraded mode, but let us not throw the entire province into chaos. Let us not show such callous disregard for parents who, because of the socioeconomic climate in our province today, require the services of day care centres.

When we look at the situation globally across this nation and recognize that we have 4.3 million day care spaces in Canada, 174,000 of which are licensed, we know we are still dependent on the small homes, on the people who provide for their relatives within their own family setting. The whole issue of child care is one that is reflected and needed by our economy.

Mr. R. F. Johnston: On a point of order, Mr. Speaker: I was hoping you might rise and call the member for Mississauga South (Mrs. Marland) to order. My point of order is to ask you whether you might do that.

The member used the word "malicious" which, in my view, impugns motive to the member for Ottawa Centre in terms of her reference to the nursing home industry. The definition of "malicious" in the dictionary provided to me by one of the friendly pages goes as follows: "motivated by vicious, wanton or mischievous purposes." I suggest to you, sir, that word is unparliamentary and should be withdrawn.

Mr. Speaker: I did note that. I think the phrase was "a malicious attack." I did consider whether it was impugning motives and I do not believe it was. I also considered whether it was insulting and likely to create disorder. It is very close to the line, but I decided it was not out of order, so I did not call the member on it. Perhaps the member in the future, though, would pick words a little further away from the line.

Mrs. Marland: Mr. Speaker, in the interest of maintaining the decorum for which I have very great respect in the Legislature, I would be happy to withdraw the use of that marginal word as you have so it described today.

Mr. R. F. Johnston: Let me thank the member for her prompt response. It was very appropriate.

I rise today with two hats to speak on this issue in support of the member for Ottawa Centre's resolution. First, as critic of my party for the Ministry of Community and Social Services since 1981, I have had a long history of dealing with child care issues in this province and I am very nervous about what I see as an impending Liberal change of philosophy on this matter.

Second, I speak as a member of the select committee on health which, as the member for Ottawa Centre said, has been established to look at the whole question of commercialization and privatization of health care and social services in the province. As members of that committee, we are just receiving information now on the background of programs within the Ministry of Health and the Ministry of Community and Social Services. I do not like the idea that the government will be moving on a major policy change before we have had a chance to have hearings or major discussions as a select committee on this issue. I think it is an affront to the committee.

There are two questions that come to my mind. What has happened to the Minister of Community and Social Services? What has happened to the reformist Liberals who spoke so proudly about their reformist zeal as a government?

Last spring the Minister of Community and Social Services promised he would have a white paper for us on government directions in day care by June. There was even a tentative date set between the Attorney General (Mr. Scott) and the Minister of Community and Social Services to make that announcement in Thunder Bay in June. It got snowed and stopped at cabinet, by whom I do not know. It is interesting to see the Treasurer (Mr. Nixon) here today. It might have been because of financial concerns. Who knows? We did not see it then.

We were told it would be out in the fall, and it did not come out then. Then the new strategy of the Liberal government started. It was, "We will wait to see what the feds are doing and then we will make our response on day care policy to what the federal government" -- that progressive force, the Mulroney government, which it relies on so heavily -- "might come forward with."

Mr. Cordiano: We need the federal money.

Hon. Mr. Nixon: The Progressive Conservatives want to send a grant to the Contras.

Mr. R. F. Johnston: I would not be surprised.

An interesting point was raised by the parliamentary assistant, who is new at his job. I will forgive him for that. Needing federal money has never been a problem in this province before in the sense that -- and his critics in the past have raised this point, as I have -- we have never used the Canada assistance plan to its maximum for child care. If we wanted to spend more money under the present plan, we could do so; we have not done so. It is not a difficulty.

Hon. Fir. Nixon: Because the municipalities would not co-operate.

Mr. R. F. Johnston: It has not been a policy of the Association of Municipalities of Ontario, as is being alluded to by the Treasurer. It has been a problem of the will of the government, which used to be Tory and which is now Liberal. It is hard to tell the difference these days when it comes to this kind of issue.

The select committee is likely to decide within the next week that child care is one of the issues it wants to look at. In the preliminary report that we received back from Cathy Fooks from library research -- who, I see, is here today -- we learned that the Ministry of Community and Social Services is one of the areas with the largest amount of commercialization in it. That amount is staying at least consistent or is growing slightly. Any change of policy such as the one the government is talking about -- that is, giving money to the commercial sector directly for its operating services -- would be fundamental. For that reason, we will probably be saying it is one of the things we should be looking at during the break.

It is not appropriate this government to start tinkering around with that system now and talking about what it thinks is some harmless expansion into giving direct grants to the commercial sector when we have not yet had a chance to look at what the implications are.

I encourage the member for Downsview (Mr. Cordiano) to look at the report that was made to us. From the comments he was making, he obviously has not had it. That report tells us we have a statistical dearth of information about day care. The kind of compilation we have is totally inadequate to know what the quality is in our services today. We are talking about a major policy change which, without any doubt, would expand the commercial sector amazingly and bring us to a system which is like that in Alberta or the United States, where the major chains see this as a major profit-making possibility for them and will change the balance dramatically in favour of the commercial sector.

To do that when we do not have inspection reports that are made public or collected province-wide, that are done only in regional offices, of which we have no systematic review at all, to which we have no public access, is a major mistake.

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I have been around here for a fair amount of time, although not for as long as others. I remember that when I was working for a former leader of mine, Stephen Lewis, he raised the question of Mini-Skools and the quality of care in Mini-Skools in Ontario. I encourage the member to look back at that, to see what the problems were, and to look at the fact that today we have no policy at all in terms of looking at the quality of care in an open and public way. This is a major problem.

From looking at the report we have had from our researchers, we do not even know from the ministry in accurate terms what the breakdown is of profit and nonprofit. They cannot break that out for us. They use two different kinds of statistics in terms of individuals who may be running their own operations and corporations that may be running their own operations. They do not seem to know which of those figures they want to use and could not give the select committee consistent statistics for this.

This government supposedly committed itself to a moratorium on expansion of commercialization and privatization until such time as the select committee has a chance to look at this. In other areas, the government can argue that it is expanding equally in the private and nonprofit areas and that therefore it does not change the balance. However, the moment it gives a direct grant to pay a subsidy to those private, commercial operators, it is going to change the balance dramatically in Ontario.

Mr. Cordiano: All we are doing is improving salaries.

Mr. R. F. Johnston: Oh, improving salaries. At the moment, there is equal funding between the private and nonprofit sectors. There are no direct grants to the nonprofits at this stage, as the member knows. I ask the member to look at the statistics as to who pays whom good salaries.

Ms. Gigantes: They get the same amount.

Mr. R. F. Johnston: They get the same amount now and it is the profit-making sector that underpays its workers right now. If the member is going to give them both direct grants, what makes him think this is going to narrow the gap in wages one iota? It will not.

Mr. Cordiano: That is one item in the equality question. You are not looking at that.

Mr. Speaker: Order.

Mr. R. F. Johnston: What we have at the moment are four major issues in child care, none of which is addressed by just giving money to the commercial sector. One is affordability, and that will not change it. As the member for Oakwood (Mr. Grande) was just saying to me, there are some good quality private, profit organizations out there; there is no doubt about that. They cost a fortune. They are not accessible to the person who is having trouble with budgets.

Let us look at the commercial sector right now under the equal funding system we have currently. Who provides subsidized spaces? Is it the profit sector? No, it is not. They provide a much smaller proportion of subsidized spaces. They have much less consideration for the poor in our society than do the nonprofits. The member knows this is true and it would not change one iota by giving them extra money to increase their profit margins.

To say that it is not appropriate to link this with nursing homes is preposterous and outrageous. Of course, we have to look at that. It is the obvious parallel with the questions of accountability, affordability, quality of care and access that are being raised about the elderly at the same time as about children. To suggest we should move to that model after all the problems that have been raised by the member for Windsor-Riverside (Mr. D. S. Cooke) and other members of this party for years, including by my leader, would be a terrible thing for us to do without at least having a select committee review it.

Mr. Cordiano: How do you address those?

Mr. R. F. Johnston: I know the member for Downsview was not here before. If I had more time, and I do not, I would quote him some of his critics' comments in the past about expansion of commercial day care. I indicate to the member that what he is talking about is a major change in Liberal policy, which has never been taken before any convention of his party. It has never been discussed by his party and certainly not by this House, let alone by the public. To make that kind of announcement while we have a select committee trying to look seriously at this issue is a very dangerous thing to do and is basically an affront to us.

I do not have much time. I suggest in closing that the minister has obviously had to back down from this policy. We are expecting the announcement this week. I do not know whether he was sandbagged by the Treasurer or by the fact that he finally saw this was not a wise policy. However, I hope he continues to stay away from it, leaves it alone and gives the money to the nonprofit sector where it is needed.

Mr. Speaker: The member for Ottawa Centre has reserved two minutes, I believe, so there will be about three minutes for the member for Brampton.

Mr. Callahan: I will be very brief. I am sure there has been a lot said on this motion. I would like to rise to the defence of the select committee and point out the very salient feature that had so many committees not been struck as a result of specious arguments from the opposition -- I believe the committees number 14 at this point, including the select committee -- we would perhaps have been able to get on with the issue of the select committee.

Mr. R. F. Johnston: On a point of order, Mr. Speaker: He knows our problem is that the ministries would not give us the information. Come clean, sir.

Mr. Callahan: No, that is not correct.

Mr. R. F. Johnston: Come clean.

Mr. Callahan: That is not correct.

Mr. R. F. Johnston: We did not get that information until January.

Mr. Speaker: The member for Scarborough West (Mr. R. F. Johnston) was able to speak previously. That is not a point of order.

Mr. Callahan: If the member for Scarborough West reflects on that, I think he will recognize the fact that we had difficulty in securing time to deal with the select committee simply because there were so many other committees sitting. I look at the fact that two weeks are now going to be spent on the standing committee on the Legislative Assembly in order to review a matter that was raised by the member for Brantford (Mr. Gillies), which may very well turn out to be a bust. In the light of that, very important things have been kept back.

I would also add that, in the preliminary information we have received prior to preparing an interim report of the select committee on health, we have found that the figures between for-profit and not-for-profit are roughly -- and I say this roughly -- about 50-50.

In the light of that, suddenly to decide now, as is the purpose of the private member's bill, to restrict or not to allow any changes to take place might very well result in the for-profit sector disappearing and having to be caught up and supplemented by not-for-profit. I submit that that is a very important factor.

It is just like volunteers in a municipality. If you were suddenly to get rid of all the volunteers, you would find that you would require public dollars to pick up the slack of the vacuum that was created by that.

I suggest that at this time it is premature for such a motion as my honourable friend is suggesting and I am going to vote against it.

Ms. Gigantes: Very briefly in the remaining time, I would like to respond to a couple of the points that have been raised in a vague kind of way to try to murky the waters around what is a very clear issue.

The issue is simply whether we decide for the future that we are going to promote commercial services in the child care area. That is the decision that lies before us. We want to see accessible day care, we want to see affordable day care and we want to see quality day care in this province. It is a crying need.

The government has responded to that need. It looks as though it is going to take the wrong turn in terms of policy developments in this area and is going to promote the growth of the commercial provision of child care services to the children of this province.

When I speak against providing public funds to unaccountable commercial operators, over whom we have no control mechanisms now in terms of quality or finances, then I am accused of trying to withdraw existing services in the province. Not at all. The commercial sector in Ontario now gets $142 million from fees from parents and from subsidies from this government for people who cannot afford to pay the costs of putting their child in day care centres. It is $142 million. They are making a profit. Let them alone.

If we are going to promote affordable, accessible, high-quality care, we put public funding in the sector that we know we can have made accountable to the public, to the families and to the elected representatives, and that is the nonprofit sector.

The Treasurer introduces another canard. He again blames the municipalities of this province for interfering with accessible day care. He says they are not playing ball. He has said it before. It is not true. If you give $3 a day to a commercial operator, what you are doing is underlining the bad policy we have now, which creates geographic divisions. Municipalities should not have to pay for this stuff.

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AUTO PACT

Mr. Speaker: Mr. Grossman has moved resolution 41.

Motion agreed to.

DAY CARE

Mr. Speaker: Ms. Gigantes has moved resolution 42.

All those in favour will please say "aye."

All those opposed will please say "nay."

In my opinion the nays have it.

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DAY CARE

The House divided on Ms. Gigantes's motion of resolution 42, which was negatived on the following vote:

Ayes

Allen, Bryden, Charlton, Cooke, D. S., Gigantes, Grande, Grier, Johnston, R. F., Laughren, Mackenzie, Martel, McClellan, Morin-Strom, Philip, Warner, Wildman.

Nays

Andrewes, Baetz, Barlow, Bernier, Bossy, Brandt, Callahan, Caplan, Conway, Cooke, D. R., Cordiano, Cousens, Cureatz, Dean, Ferraro, Gillies, Haggerty, Jackson, Johnson, J. M., Knight, Lane, Mancini, Marland, McFadden;

McGuigan, McKessock, McNeil, Miller, G. I., Mitchell, Morin, Newman, Nixon, Offer, O'Neil, Partington, Pierce, Pollock, Polsinelli, Pope, Rowe, Runciman, Sheppard, Smith, D. W., Smith, E. J., Stevenson, K. R., Taylor, Turner, Villeneuve.

Ayes 16; nays 48.

The House recessed at 12:09 p.m.

AFTERNOON SITTING

The House resumed at 1:30 p.m.

Mr. McClellan: I have a point of privilege, Mr. Speaker. Courtesy would require that I wait until the Minister of the Environment (Mr. Bradley) arrives; so if I may, I will hold my point of privilege until the minister arrives.

MEMBERS' STATEMENTS

NATIVE FISHING AGREEMENT

Mr. Bernier: During the past several weeks, the newly formed association known as Tourism Northwest in northwestern Ontario has been very vocal and very successful in assisting the provincial native fishing agreement negotiator, Al Stewart, in promoting public educational meetings.

I want to inform the Legislature that on Tuesday evening, January 27, more than 800 people from the Dryden area jammed the legion hall to attend the so-called educational meeting on the native fishing agreement.

After repeated calls made directly to the Premier (Mr. Peterson) and to the Minister of Natural Resources (Mr. Kerrio) to attend these meetings personally, to listen to the public's concerns and to answer the many questions that are being raised constantly, answers that the civil servants cannot answer and should not be called on to answer, they have failed to appear.

Several more such public meetings are being planned in places such as Rainy River, Thunder Bay, Sault Ste. Marie, Sudbury, Chatham and Toronto. The ministers responsible for negotiating this native fishing agreement must be there as they, and only they, can answer the questions that are being raised.

I say to the Premier, the Attorney General (Mr. Scott) and the Minister of Natural Resources to stop hiding behind their senior civil servants and start attending these very important public discussions.

NORTHERN REGIONAL TREATMENT CENTRE

Mr. Laughren: In April 1986, the Minister of Correctional Services (Mr. Keyes) and his staff identified a need for a treatment centre in northern Ontario for northern Ontario inmates. In June, a public meeting was held, and since that time other meetings have been held and commitments made. We were led to believe that Sudbury was the preferred location for such a treatment centre. Since that time, after a series of meetings and commitments, some things have not changed.

First, Sudbury is centrally located. Second, Sudbury has the required psychiatric professionals necessary. Sudbury has the professionals in the school of social work at Laurentian University. Sudbury is prepared to provide a site at absolutely no cost to the Ministry of Correctional Services. Sudbury has a pool of bilingual professionals to help operate the centre.

As a result of a regional council meeting last night, there is unanimous consent that such a facility be located in the community. It was supported by the local aldermen, by the mayor, who lives in the immediate area of the preferred site, and by the entire regional council. At this point, the minister should be prepared to send staff up there to answer all the questions the residents have and to make a firm commitment.

FESTIVE HOLIDAYS

Mr. Morin: Today is the most important day of the year for the Chinese, Vietnamese and Korean communities in Ontario. The Chinese, Vietnamese and Korean calendars are based on the cycle of the moon and, according to the lunar calendar, today marks the beginning of a new year. For the Vietnamese community this will be the Year of the Cat and for the Chinese and Korean communities it will be the Year of the Hare.

In the Chinese, Vietnamese and Korean communities, New Year's Day is primarily a family affair. It is a time for visiting relatives and friends and for the exchange of greetings and good wishes. It is also a time to enjoy the abundance of delicious food that traditionally accompanies this celebration. The festivities can last for up to a week. The continued observance of these traditional celebrations not only adds another colourful facet to the Canadian cultural mosaic but also helps to preserve the customs and culture of an ancient heritage.

I am sure all members of this Legislature will wish to join me in extending our best wishes to the Chinese, Vietnamese and Korean communities as they welcome the hopes and challenges of a new year.

Je souhaite donc une bonne et heureuse année aux communautés chinoise, vietnamienne et coréenne.

CREDIT CARDS

Mr. Harris: The Treasurer (Mr. Nixon) will know that pretty sound fiscal policies from the federal government have allowed substantially lower interest rates for consumer and business loans in Ontario. This success has contributed to the economic recovery and it has contributed to growth in this province. I might add it contrasts sharply with some of the failed policies of the former Liberal government in Ottawa. It contrasts with some of the policies we see here in Ontario.

There is a major problem with interest rates. Today, when we will probably see prime rates down around 7.5 per cent, we are looking at credit-card interest rates as follows: Visa, 18.6 per cent; Bank of Montreal MasterCard, 21 per cent, and Royal Bank Visa, 18.6 per cent. We are looking at Imperial Oil charging 24 per cent; we are looking at Eaton's, 28.8 per cent.

In essence, what happens is that it is the poor who end up financing through credit-card interest rates and therefore it is the poor who are paying the credit-card charges for everybody, instead of a reasonable fee being charged for credit cards.

It has been said provincial governments cannot do much. Illinois has found a way of doing something. It has threatened to withhold its funds from companies that charge these interest rates.

The government can look at its purchasing policies and where it buys gasoline. There are a lot of things this Treasurer can do to help correct this problem.

AUTOMOBILE INSURANCE

Mr. Swart: In question period on Monday, I said the total profits of the Manitoba Public Insurance Corp. now stood at $54 million and there is $321 million in reserve investments against unpaid claims. The Minister of Financial Institutions (Mr. Kwinter) countered by saying, "The reserves in Manitoba are only $60 million." He said this in spite of the fact that he had a letter in his hand signed by the minister in charge of public insurance in Manitoba stating, "The funds for the investments total $321.2 million in the 1985 fiscal year."

I have here the 1985 annual report of the Manitoba Public Insurance Corp., which shows assets of $378 million and gives details of where $290 million of what the minister states is only $60 million is invested in public institutions. The minister provides the same kind of incorrect figures over and over again in the Legislature in his defence of the private auto insurance companies here against the far superior, driver-owned NDP public system in the west.

I suggest that even his slavish subservience to the giant private insurance companies here do not permit that kind of distortion. No wonder he does not want an investigation done to show the true comparison of the two systems. It would show, for all the world to see, how wrong he is.

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NURSING HOME BEDS

Mr. Offer: I rise today to acknowledge and thank the Minister of Health (Mr. Elston) for his recent nursing home allocation in Mississauga. Mississauga will receive 100 additional nursing home beds over the next three years. The ministry will be issuing a request for proposals in the fall from those interested in operating 100 beds in Mississauga, either in existing or in new nursing homes, and the ministry will give preference to proposals from nonprofit organizations. This addition of nursing home beds was recommended by the Peel District Health Council.

As we know, the ill and the elderly want to stay in their homes as long as possible. The concerted efforts not only of the Minister of Health but also of the Minister of Community and Social Services (Mr. Sweeney) and the Minister without Portfolio responsible for senior citizens' affairs (Mr. Van Horne) for the introduction of the new integrated homemaking services demonstrates this government's commitment to home care. But the very success of the home care programs in helping to keep people at home longer means that many of those people tend to be older, with more serious health care problems when they finally need long-term institutional care.

We must be certain that the right mix of services is available in each community. With this increase in nursing home beds and, incidentally, the announcement last summer of an additional 200 chronic care beds for Peel, this minister and this government have moved to meet the challenge of combining home care needs with intensive long-term care.

WINTER CARNIVAL

Mr. Andrewes: In the brief time that is left. might I take the opportunity to invite all honourable members to the Jordan Lions winter carnival, which will be held this weekend. This is a unique festival in that it contains unique sporting events in keeping with the climatic advantages of the Niagara Peninsula. The proceeds, of course, go to worthy causes, and I look forward to seeing members there.

MEMBER'S ANNIVERSARY

Mr. Grossman: Mr. Speaker, on a point of whatever you might determine it to be, but with the consent of the House I should like to say a few words about our colleague the member for Elgin (Mr. McNeil), who is celebrating his 29th anniversary in the Legislature.

Mr. Speaker: I understand there is unanimous consent.

Mr. Grossman: Our colleague the member for Elgin joined this House on January 30, 1958 -- would members believe it? -- a mere 15 years into the period of time during which the former government had the pleasure of leading this province. He was first elected locally as member of the municipal council of South Dorchester, 1946 to 1948. I was riding a tricycle at the time, being, like the Premier (Mr. Peterson), two years old.

Mr. Wildman: Now you are on a treadmill.

Mr. Grossman: I later got a driver for my tricycle and I have missed it ever since.

He subsequently served as reeve from 1949 to 1952 and as warden of Elgin county in 1952.

As all members of the House will know, he has served with great honour, dignity and distinction. He has been one of those persons who I would say has always perfectly represented, in every way possible -- in his manner, his style, his caring -- the people he represents.

On this day, I should simply like to acknowledge his first 29 years in the House. Since he has only turned 67 last week, I would hope to be able to watch, long after my time in this House has finished, as he celebrates many, many more years serving his people as effectively in the future as he has for the first 29 years of his term in office here.

Mr. McClellan: On behalf of my colleagues, I would like to offer the congratulations of the New Democratic Party to our friend the member for Elgin for his stupendous achievement of 29 years in this place. I spoke last week about the strange accomplishment of the member for Brant-Oxford-Norfolk (Mr. Nixon) in keeping his sanity after a quarter of a century --

Mr. Rae: That is debatable.

Mr. McClellan: The member for Elgin has served with integrity and distinction for more than a quarter of a century. I do not think I am incorrect in saying he is the only Conservative left in southwestern Ontario. Am I wrong?

Mr. McNeil: Two.

Mr. McClellan: I gather there is another Conservative somewhere in southwestern Ontario.

The member for Elgin has always spoken eloquently from deep and convincing firsthand knowledge about the needs and aspirations of his constituents. We have always enjoyed listening to the contributions he has made to the debates in the House and in committee. He is a very well respected member of this assembly, and as he embarks on his second quarter of a century of service in this assembly, we wish him long life and happiness.

Hon. Mr. Nixon: It is a great pleasure to join with the Leader of the Opposition (Mr. Grossman), the member for Bellwoods (Mr. McClellan) and all the other members in offering our congratulations to the member for Elgin on the 29th anniversary of his election.

The two of us have often participated in debates in this House, and, like the member for Bellwoods, I have the greatest respect for the member for Elgin's experience and his ability to put forward the judgement based on that experience associated with his long-term responsibilities in his local community and particularly in the agricultural community. I have special reason to feel very warm towards our friendship. He graduated from the Ontario Agricultural College in 1942, about the same time my brother was a student there; so our association goes a long way back.

The member for Bellwoods indicated that the member for Elgin is one of the few Conservatives in southwestern Ontario, but it was not always thus. While I would say he is philosophically established in the right party, in his early days he was quite influenced by the great Mitchell F. Hepburn, who was also a representative from Elgin. He even messed around just slightly with the Liberals until better judgement put him on the straight and narrow, which he has followed ever since.

I have always had a feeling of some regret that the Liberals were not more aggressive in seeing that the member for Elgin was a candidate for us, but sometimes you miss out on the good ones. Anyway, we have had a long and pleasant association in this House, and I want to congratulate the honourable member on behalf of all my colleagues in the Liberal Party and to wish him well.

He has embarked on additional personal responsibilities in the past few months. Having met Mrs. McNeil, I can congratulate the member on his continuing good fortune. We are just delighted that he is healthy and, obviously, happy and effective here. We wish him many long years of happiness and community service, if not here, well, who knows where?

Mr. Speaker: I am sure the members wish to hear a few words from the member for Elgin.

Mr. McNeil: First, I want to thank the honourable members for their very kind words. I might say to the Treasurer (Mr. Nixon) that I did have a lot of respect for Mitchell Hepburn, because he was one of the most colourful Premiers this province has ever experienced and the only Premier who came from the great riding of Elgin. One of his greatest accomplishments was to bring an industry into Elgin that has served the people of Elgin for many years and will continue to do so, and that is the St. Thomas Psychiatric Hospital.

Hon. Mr. Nixon: That is available to everyone.

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Mr. McNeil: Who knows? That may be a future home for the present member. There are people who probably would think it should be.

I might say the members' words are very much appreciated. I shall always cherish the friendship I have had with various members of this House, regardless of political affiliation.

Members might be interested to know that the by-election was called by the then Premier of the province, Mr. Frost, on January 30, 1958, to fill a vacancy that had been caused by the death of Fletcher Thomas in November 1957.

I know many of us are experiencing some very difficult times in the agricultural economy at present. It is rather interesting to note that during that election campaign a new system for selling flue-cured tobacco had been developed and was being used for the first time in the riding of Elgin, as well as in Norfolk, the riding of the member for Haldimand-Norfolk (Mr. G. I. Miller). There were growers who were not very happy with the new system, there were buyers who were not very happy with the new system and the sale of tobacco was discontinued -- really, it came to a standstill -- during the by-election.

It is also interesting to note that Mr. Frost, as Premier of this province, had never experienced losing a by-election, and it very much looked as though we would lose that by-election. He called all the interested parties to Toronto. They came to an agreement, tobacco started to sell and, fortunately, there was a good organization.

As the member for Sarnia (Mr. Brandt) said to me one time, "You must have an excellent organization." I said, "We certainly do." He said, "It would take one hell of an organization to elect you to nine consecutive terms."

Mr. Brandt: On a point of order, Mr. Speaker: I want to make clear to my colleague that I said it would take a good organization. I did not use that other word.

Mr. McNeil: I apologize to the honourable member, because I know that profanity is one of his specialties and it is his second language.

As the Treasurer mentioned the other day, the services we enjoyed back in 1958 were not quite what they are today. As the Treasurer said on that occasion, Mr. Frost said that every member was entitled to a desk, and that desk was right here. It was not anything unusual to come into the House in the morning and see various members of all political parties dictating to their secretaries, who belonged to a pool. I do not recall ever having any filing system. I guess if a member had a filing system, he had to take it home, because there was no office space here for files.

Members might be interested to know that when I was first elected, there were nine Progressive Conservative members at the immediate left of the Speaker, and then there were a few Liberal members -- not very many. There were three New Democratic Party members, and then there was solid blue there and solid blue over there. I have often heard people say something about the good old times. Those were good old times, I can tell members that.

One of the reasons for holding the by-election on a Thursday -- and at that time, the date of the by-election was set by the Premier, not by statute -- was that Mr. Frost did not like to have a by-election or an election on Monday, because it interfered with the housewives' washing. Wednesday was out because we had half holidays for businessmen. That left Tuesday and Thursday. Friday was out because otherwise the weekend would be upset.

The by-election was on Thursday, and the House went into session on the following Tuesday. At that time, members would be interested to know the member for Peel, who had been Premier of this province and Minister of Agriculture, the Honourable Colonel Thomas Kennedy, moved the speech from the throne, which was seconded by the father of the member for Cornwall (Mr. Guindon). I was going to say Stormont, but it is not.

Fern Guindon had been elected in September 1957 and was representing the riding of Glengarry. He was reselected in 1959. Then, in 1963, he ran as our candidate in Stormont, which is now the riding of Cornwall, and was elected as the member for the riding of Stormont.

I remember when he was making his last speech as the member for Glengarry, he said it would be the last time he would have the opportunity to speak as the member for Glengarry, on behalf of the constituents from Glengarry, but he said, "Mr. Speaker, I will be back." He was back. At that time, that riding was held by a Liberal, who made a great contribution to this province and who has since that time served as a director of the Ontario Plowmen's Association with distinction.

I would also like to mention that when I arrived, the fathers of two members who are here now were members of the Legislature at that time. The father of the Leader of the Opposition was the member for St. Andrew. Now, of course, that riding is St. Andrew-St. Patrick. He had been elected as a member in 1955. The father of the provincial Treasurer was here as the member for Brant. He had been elected to the Legislature in 1919. He had a very distinguished career as a member of this Legislature and served here for 42 years.

I well recall at one time the provincial Treasurer's father was making a speech in the Legislature. While he was speaking about a rather controversial subject, something about liquor, the fire alarm went off and we had to evacuate the building. When he returned he said he had made quite a number of speeches in the Legislature, but that must have been the hottest speech he had ever made.

During those days, it is rather interesting that all the work of the Legislature was done in the Legislature. The estimates of the various departments were all carried out in the Legislature. We met at three o'clock in the afternoon, recessed for dinner and then went until anywhere from 10:30 p.m. to one o'clock or two o'clock in the morning. It just depended on how we were getting along with the work of the House.

Members might be interested to know that the salary was not that high in those days, but we were getting a room at the Royal York Hotel, as the Treasurer said, for $5 a night, which was a pretty good rate. We were paid once a year, on March 31. We could make a draw before Christmas, if we applied for it, and most members did. I guess the reason was they thought we should have a very good Yuletide season. I will not tell the members how much the salary was, but it certainly --

Interjections.

Mr. McNeil: I think it was about $2,600 a year with, I believe, $1,300 for expenses.

Hon. Mr. Nixon: But you had to use it for expenses.

Mr. McNeil: It is rather interesting to note that in that first session the by-election was on Thursday, January 30, and the House opened on the following Tuesday. In that year, as some of the older members may recall, we had a very successful federal election on March 31. This House had adjourned 10 days before the federal election. At the time, it was always felt the session should take place during wintertime. I guess the preceding Legislature felt the same way. We always tried to get finished so that the farmers could be home for seeding. Those were the good old days.

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I will conclude by saying I feel very fortunate to have had the opportunity of representing the citizens and constituents of the great riding of Elgin for all these years. I realize I have been fortunate to have sat in this House. It is a great privilege for anyone to have the opportunity of serving as a member of this Legislature. I hope I may continue.

I have had the opportunity of serving under four Progressive Conservative Premiers -- Mr. Frost, Mr. Robarts, Mr. Davis and the member for Muskoka (Mr. F. S. Miller). When the Treasurer was speaking, he mentioned I got married something like a year and a half ago. The member for Muskoka wondered whether I had become a father, and I can say I have not. I also now look upon it as a great challenge to be a member under the leadership of the present Premier (Mr. Peterson). He is very fortunate in the fact that his wife was raised in a very strong Progressive Conservative family.

Once again, I thank the members for their kind words and I look forward to the challenges that lie ahead.

PAPER MILL

Mr. McClellan: I indicated earlier I had a point of privilege to raise. I notice the Minister of the Environment (Mr. Bradley) has been in the House for some time and has not risen to his feet, so I will raise this matter of privilege. Yesterday, during question period, my colleague the member for Lake Nipigon (Mr. Pouliot) asked the minister a question about the status of negotiations with respect to Kimberly-Clark and specifically asked him for an update as to where the situation was at this time.

In response, the Minister of the Environment said at about 2:45 p.m., "I assure the member that discussions have taken place and are continuing...." This morning the leader of the New Democratic Party, the member for York South (Mr. Rae), spoke to Jack Lavallet, president and chief executive officer of Kimberly-Clark of Canada, and confirmed a radio report that discussions between Kimberly-Clark and the government had ended yesterday morning around breakfast time during a breakfast meeting.

Whether the minister was misinformed or misinforming is not for me to say. The fact remains that the House was given false information yesterday in response to a question from a member of my caucus on a matter that affects the fate of about 1,600 jobs. When they ask questions of ministers, particularly when they ask questions of such urgency and seriousness, members of this assembly are entitled as a matter of privilege to receive factual answers from ministers of the crown. That did not happen yesterday.

Mr. Speaker, I ask for your guidance as to what we are to do about this situation.

Hon. Mr. Bradley: I can understand how the member would come to that conclusion. I want to inform him that when I answered that question in the House, I indicated that discussions were continuing and indeed they did continue. There was a further discussion that afternoon, a communication that was made with the company at that time. I would not ever want to give information that would not be accurate to the member for Lake Nipigon, who has a very special interest in this. In fact, communication did continue.

Mr. Rae: For the record, if the minister is not prepared to fess up to what has taken place, not only yesterday but also during the past number of weeks, he may choose to remain in his position, but I do not see how anybody in this House can seriously ask him questions and take what he says at face value. The answer he gave in the House was an answer that could only be construed as leading to a different conclusion from the facts as we now understand them from conversations we have had with other parties.

Ms. Fish: On the same point, I wish to associate this side of the House with the remarks that have been made by the New Democratic Party House leader and by the leader of the third party. It is perfectly clear that references to talks having occurred and continuing lead to one possible conclusion, namely, that active discussions are under way, not that there is a communication one way that might occur some hours after the question has been answered when it is clear the discussion and negotiations have broken off. It is a very serious circumstance when a question of fact is answered in what is clearly not a factual way by the minister.

Hon. Mr. Bradley: If I may respond to the point of privilege --

Mr. Speaker: Order. The member for Bellwoods (Mr. McClellan) rose on a point of privilege. I allowed other members, including the minister, to respond to that point of privilege. Personally, I do not see that it is a point of privilege. As I understand it, you are almost asking the Speaker to judge whether an answer is incorrect. That is not the responsibility of the Speaker. I suggest and rule that it is not a point of privilege and the honourable member may pursue the matter in the normal course during question period.

Hon. Mr. Bradley: Well, Mr. Speaker --

Mr. Speaker: I have dealt with that matter. We are coming to ministerial statements. If the minister wishes to make a statement, he may.

STATEMENTS BY THE MINISTRY

THERAPEUTIC ABORTION SERVICES

Hon. Mr. Elston: Last June, Dr. Marion Powell, who is with us here under the Speaker's gallery, director of the Bay Centre for Birth Control and a well-known and respected physician in this province, was asked by my ministry to undertake a survey of therapeutic abortion services in Ontario.

I received Dr. Powell's report yesterday and today I am tabling it here in the House. I wish to thank Dr. Powell for the excellent work she has undertaken in researching and preparing this report for the Ministry of Health.

The report's recommendations involve many sectors of the health care community. Therefore, we will circulate it to groups such as the Ontario Hospital Association, the Ontario Medical Association, nursing associations, public health organizations and other interested parties. Likewise, the report will be available upon request to those who wish it.

Their input will be welcome as the ministry reviews Dr. Powell's recommendations.

HOUSING FOR THE DISABLED

Hon. Mr. Ruprecht: This government is committed to promoting the full equality and participation of disabled individuals in all aspects of Ontario life. These goals were stated formally in the proclamation of the Decade of Disabled Persons. In the past 18 months, we have introduced various measures to encourage the integration of people with disabilities into community life.

The availability of suitable affordable accommodation is a key factor for many disabled people as they seek to lead independent lives as productive citizens. Currently, there are approximately 937,000 disabled adults in this province. They represent a full range of disabilities whether physical, psychiatric, sensory or developmental. As a result, the individual housing needs vary considerably.

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In addition, more disabled children are being integrated into the regular school system and being maintained in the community. Increasingly, parents are seeking assistance in accommodating their children at home. As the children grow towards independence, they too will expect a wide range of housing options.

Disabled persons require affordable housing, some require physical accessibility, some require design modification and some require support services. Today, as Minister without Portfolio responsible for disabled persons, I am pleased to announce a series of initiatives to increase and enhance housing programs to better meet the needs of disabled individuals, both now and in the future.

These initiatives will constitute a two-pronged approach over a three-year period. We will start by addressing immediate issues that have been identified. For the longer term, we shall be developing comprehensive strategies to increase the range of housing options available for disabled persons and their families in the community.

We are dealing with complex issues which cannot be resolved by any one ministry. Therefore, I shall be working closely with my colleagues the Minister of Housing (Mr. Curling) and the Minister of Community and Social Services (Mr. Sweeney).

In the short term, additional financial aid will be made available for home modifications for disabled persons.

Under the Ontario home renewal plan, the Ministry of Housing will increase the amount of loan assistance available to physically disabled home owners or those with physically disabled dependents. Eligibility for these design modification loans will also be broadened and the expanded program will be operational early in the next fiscal year.

As an interim measure, the Office Responsible for Disabled Persons will provide a one-time grant of $1.7 million in this fiscal year to the Easter Seal Society. The society assists many parents of disabled children with needed home modifications and this grant will alleviate the immediate demand.

Because it can be difficult to make modifications that take into account the changing needs of children as they grow, we are also giving a grant of $200,000 this year to the Barrier-Free Design Centre to provide expert consultation to parents receiving the Easter Seal funding. The Barrier-Free Design Centre is a program of the Muscular Dystrophy Association of Canada.

At this point, I would like to welcome some guests who have joined us in the members' gallery: Howard Keast, president of the Easter Seal Society, Ian Bain, the executive director of the Easter Seal Society, Ms. Heather Snell, director of the Barrier-Free Design Centre, Bill Craig, chairman of the Barrier-Free Design Centre advisory committee, and Michael Ryan, executive director of the muscular dystrophy association.

I am delighted to have this opportunity to acknowledge the valuable work of these organizations in the area of accessibility.

To further increase housing options for disabled individuals, new funds will be allocated for modifications to rental accommodation. Revisions to the Ministry of Housing's low-rise rehabilitation program will enable landlords to modify existing private rental units for physically disabled persons. In addition, there will be an increase in that portion of the interest-free loan that is currently available to housing suppliers wishing to create fully modified units for disabled people under the convert-to-rent program.

We recognize, however, that for many disabled individuals attendant care is vital if they are to remain in the community. With the increase in accessible housing provided by the programs I have just outlined, we anticipate a further increase in demand for this kind of support. To meet this expected demand, an additional $4.29 million over the next three years, beginning this year, has been allocated to the Ministry of Community and Social Services to enrich the attendant care program.

These are immediate steps we propose to take, and they are designed to address immediate needs. We must also develop strategies that will ensure a suitable range of housing options for disabled persons in the future. To this end, we are embarking upon several other initiatives.

First, we intend to establish a network of information linkages between the providers and consumers of accessible housing. With funds from the Office Responsible for Disabled Persons, we will set up 10 housing registries on a pilot basis in locations throughout the province. The registries will be run by organizations of disabled persons with the assistance of the housing providers to assist disabled individuals in locating accommodation that meets their needs.

Second, we plan to disseminate information on a broad scale concerning the possibilities for independent living for disabled persons. This information will be targeted primarily at housing suppliers and disabled people to help each group become more aware of alternatives for housing.

To provide these suppliers with more detailed and technical information on accessibility, the Barrier-Free Design Centre will receive $600,000 over three years to conduct specialized seminars and consultations on housing design.

Finally, as we seek a plan of action that will meet the needs of tomorrow, we will undertake a major research study. This will address the shortage of available data regarding the housing needs of people with a full range of disabilities. It will encompass a review of all existing programs and examine future need and supply trends.

These are the programs of this government.

INTERNATIONAL BANKING CENTRES

Hon. Mr. Kwinter: In my capacity as Minister of Financial Institutions, I wish to make a statement in response to yesterday's announcement by the federal government concerning proposed legislation designating Montreal and Vancouver as international banking centres.

This government is very concerned and very disappointed that Toronto, along with many other Canadian cities, has been excluded from these federal proposals. Clearly, this arbitrary move to distort Canada's financial marketplace brings no gain to the country as a whole. Any net benefit this subsidy might bring to Vancouver and Montreal would be cancelled out by the net loss to Toronto.

Yesterday, Mr. Wilson said, "Our proposals have sent a strong signal to the world that we believe in Toronto and have confidence in Toronto as one of the world's major financial centres." His statement flies in the face of logic and is certainly in direct conflict with the message from Tom Wells, our Agent General in London. Mr. Wells, who has a more direct eye on the international marketplace, tells us:

"There is no clear understanding here in London of exactly what the federal government means when they say they are going to make Vancouver and Montreal international banking centres. External visibility of a vibrant Canada demands that everything be done to preserve the position of Toronto as the undisputed financial centre of Canada, and one that the world can relate to."

Mr. Wilson is sending confusing signals to the world markets at a time when Canada should be gearing up to face a rapidly changing and intensely competitive financial institutions sector. Toronto is a world-class financial centre. Any move that will decrease its reputation in international financial circles cannot be tolerated.

We are also concerned that the federal government's lack of consultation with this government -- something it promised -- combined with irrational economic planning has pitted city against city. As the Premier (Mr. Peterson) has noted, this issue has resurrected regional tensions that are unnecessary.

In addition, we must also question whether the federal government has seriously considered the implications this arbitrary tax subsidy will have on its free trade negotiations with the United States. I remind members we are discussing a tax subsidy to banks, who themselves are questioning the wisdom of this move.

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As I have already mentioned, there was a lack of full consultation on this issue and we are just now reviewing the federal proposals. Therefore, it would be premature to provide a complete response at this time.

We are considering a number of options. My ministry, in co-operation with the Ministry of Treasury and Economics and the Ministry of Industry, Trade and Technology, is currently developing a concerted response to this ill-conceived federal action. I can promise this government is committed to taking appropriate action which ensures the continued prosperity of our financial sector.

As the first order of today's business, I will be proposing to this Legislature a special resolution which reads as follows:

"That the Legislative Assembly of Ontario regrets the action of the government of Canada in ignoring Toronto, the established financial centre of the country, in its plans to designate international banking centres, thereby distorting the national economy and unnecessarily provoking regional tensions; and that the assembly calls upon the federal government to correct this intentional omission by adding Toronto to the list of designated cities eligible for tax advantages favouring international banking."

RESPONSES

THERAPEUTIC ABORTION SERVICES

Mr. Andrewes: I want to respond briefly to the tabling of Dr. Powell's report and join with the Minister of Health (Mr. Elston) in thanking Dr. Powell for her report. It is done in some depth, and in a very cursory review, I find it quite responsible.

This is not an issue that can be resolved by a lot of political bantering. It is an issue that requires everyone in a role of public responsibility to accept that role and approach it with honesty and a conscientious effort and commitment to meet the requirements of people in this province within the laws of the country.

Our focus recently has been to give public hospitals in the province a greater role in community activity, and a very cursory review of Dr. Powell's report shows it is in keeping with that thrust. We look forward to joining with the minister and others in a full discussion.

INTERNATIONAL BANKING CENTRES

Mr. McFadden: The statement by the Minister of Financial Institutions (Mr. Kwinter) in connection with the international banking centres is yet another example of the government's right hand not knowing what its left hand is doing.

I do not think the minister is aware of or acknowledging in his statement the fact that at this time, the standing committee on finance and economic affairs has under way a study of the federal government's proposal. We have had extensive discussions on that committee. Last week, we had public hearings, and today we had public hearings at which the minister participated.

The committee is now moving on to prepare its final report, at which time we are going to look at all the options and all the implications of the international-banking-centre concept. It is clear that the action of the minister today in presenting a resolution makes a farce of the hearing process in this House. Why would the minister proceed with a resolution in this kind of haste when a committee of this House is undertaking a study of this right now with a full report to come in to this House in the next week or two, at which time this House could act upon the report by resolution or other means?

Further to that, I should make clear, as we have in the past, our party's opposition to the federal government's proposal. We have, on balance, a very high regard for the capabilities of the federal Minister of Finance. Everybody can make a mistake, and it is very clear that the Minister of Finance has made a mistake in this case. This decision is not logical in view of the development of the financial-institution structure within Canada today. It is not a rational step, and therefore, we oppose it.

In the light of the announcement by the Minister of Finance yesterday, however, the decision to go ahead with this proposal is yet another example of the Premier (Mr. Peterson) failing to protect Ontario's interests. If we add softwood lumber to international banking centres, the score today in Canada is Vander Zalm 2, Peterson 0.

While we join the government in opposing the proposal of the federal government for international banking centres, we also wish to make it clear that is yet another example of this government's failure to protect Ontario's interests.

HOUSING FOR THE DISABLED

Mr. Shymko: I want to comment on the statement by the Minister without Portfolio responsible for disabled persons (Mr. Ruprecht). It is unfortunate and sad that in the light of the $1 billion of windfall revenues in the coffers of the Treasurer (Mr. Nixon), such a miserable pittance of money is being offered to the Easter Seal Society for the assistance to parents of disabled children and that it is only a one-time grant. This party would want to see a permanent yearly grant of at least $5 million.

We congratulate the representatives of the voluntary sector who are here and who have carried the brunt of this work. I am pleased to see there is a promise -- not a delivery of money -- of assisting those disabled who are home owners and who have been left in a vacuum over the years. There should be money allocated to the Minister of Housing to provide that assistance, not mere promises as indicated by the minister.

THERAPEUTIC ABORTION SERVICES

Ms. Gigantes: I have a word in response to the tabling of the report of Dr. Marion Powell on access to abortion services in Ontario. Dr. Powell, as has been her well-established habit in this province, has written a clear and direct statement of the problem. She has told it like it is. She always has done that and she has done it again. The question now of course is, what is going to happen? Where is this government going to go after two years of meandering on the subject, two years after its promise of improving access?

She has told us that the referral process for abortion services does not produce timely and efficient service and that the service system does not provide optimal support for women. She has told us once again of the geographic inequities. In Ontario, 30 per cent of women do not even have access to an abortion service in their county.

She has told us the standard methods in use are costly in manpower in hospital facilities and there is inadequate counselling and support. She has told us there are cost barriers, from $20 to $500, for uninsured services, and that is before travel and accommodations costs women have to face. She has told us physicians and health care professionals want decriminalization of the federal legislation.

She has told us, and this has to be underlined, that hospitals are not now using the best in new medical procedures in providing abortion services. She has told us our system has failed. Everybody knew that before. She has told us poignantly, directly and clearly. Now what is the government going to do?

HOUSING FOR THE DISABLED

Mr. R. F. Johnston: I would like to respond to the announcement today by the Minister without Portfolio responsible for disabled persons. In late fall I brought to the attention of the minister, who seemed to be unaware of them, the problems of getting proper renovation of houses for the disabled in Ontario. He has recognized that there are almost one million disabled adults in this province, and yet in this announcement, he has given only a very small amount of money to assist them. He has not even told us what he is going to do to the Ontario home renewal program in terms of making it useful to disabled people, which it is not at the moment. We await the details before we applaud too loudly his response to the matters we raised while Mr. Hansen was here.

INTERNATIONAL BANKING CENTRES

Mr. Rae: I want to put the government on notice that I will be moving an amendment this afternoon to the government's motion with respect to the issue of international banking centres, stating categorically:

"That the Legislative Assembly of Ontario condemns the government of Canada's proposal to give further tax concessions to the banking community through its so-called international banking centres plan; and that this assembly believes that federal tax reform should benefit individual working Canadians and not further profit banks while exacerbating regional tensions in Canada."

I will be moving that amendment this afternoon and we will see which one carries.

The government of Ontario has clearly blown an opportunity. Here was a chance for the Minister of Financial Institutions (Mr. Kwinter) and the Premier (Mr. Peterson) to stand up for tax fairness, to stand up for working Canadians who see the banks often operating without paying their fair share of taxation. Instead, the Premier said, "There is a gravy train; I want to get on it." Instead, the Minister of Financial Institutions, in the first half of his statement, says his only regret with respect to the government of Canada's action is that Toronto is not part of this same gravy train.

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I would far rather we had a Minister of Financial Institutions who would say he was not interested in Toronto becoming Cayman Islands north, that he was not interested in our attempting to compete with Panama in our appeal for offshore banking activities and that he saw that this kind of ruse is a mug's game. Once you start to play that kind of game, every single country in the world begins to bid down and bid down, and ordinary citizens end up having to pay more and more taxation because the banks are not being taxed fairly.

The minister himself has said that a result of this legislation will be to produce more fleabag banks from the Cayman Islands in Toronto. That is not a social policy approach I want. It is not an approach we favour. Here was an opportunity to go across Canada and bring Canada together, all parts of the country, against this kind of tax ripoff. Instead, what is Toronto's position? What is the position of the Premier? His position was not that he was opposed to the notion of an international banking centre; his position was: "We want to be part of that action. We want to be part of that gravy."

I would far rather that Ontario stand up for all the ordinary taxpayers in this part of the world and in Canada and say, "No more ripoffs, no more special deals for the banks. Let us really stand up and bring the country together in the name of fairness, and not in the name of special privilege," which is the approach the Premier has taken.

ORAL QUESTIONS

COUNTERVAILING TARIFFS

Mr. Grossman: I have a question for the Premier. The record on trade issues would show the following: He has lost on softwood lumber, he has lost on banking centres, he is losing on steel and he was unaware yesterday of the agricultural trade issues.

My question today relates to the Premier's ability and awareness on the question of trade issues. He said yesterday, "There is a large number of countervails going on against Canada at present." For the benefit of the members, could the Premier give us a short list of the number of countervails that are going on that he referred to yesterday?

Hon. Mr. Peterson: I cannot give the honourable member the specific number of legal challenges at the moment. As he knows, countervail is a long and complicated legal process. However, I do know there is certainly talk in a number of commodity groups that there are certain vulnerabilities; there is talk about lead, zinc, hydroelectricity and a variety of others. Certain groups in the United States have made indications that they may pursue countervail actions. Others are just at the talking stage; they may or may not develop.

As the member knows, the softwood lumber issue was fought out in the courts in 1983, and there was a different decision at that time. It is a question of hoping to anticipate what is happening and stemming it off if possible.

Mr. Grossman: Yesterday the Premier said, "There is a large number of countervails going on against Canada at present.' He lectured us yesterday on the intricacies of the countervail system in Washington, which he professed to have some knowledge of. Today, in response to my question, he said he cannot give me the exact number, and he mentioned lead, zinc and hydro.

We checked this morning with the International Trade Commission, the International Trade Administration in Washington and the US relations division of the federal Department of External Affairs and found out there are currently no submitted petitions for countervail against Canada with the ITC and there is only one ongoing investigation, and that is in an area he has not yet referred to.

How can he therefore purport to have any sense of what is going on in Washington when he can stand up in this House, as he did yesterday, and say there are a number of countervail actions going on against Canada, when the fact is that there are none?

Hon. Mr. Peterson: It just shows how successful we have been. What is the member so excited about if there are not any?

Mr. Grossman: We are excited about the fact that the Premier has been unable to understand the trade issues, that he has given the impression here that countervail actions are being taken when there are none, that the Treasurer (Mr. Nixon) stood up in the Premier's absence and implied that a trade action might be taken if his minister is finally allowed to do something to help Kimberly-Clark, that on all these trade matters there is no single Canadian politician who has given out more misleading and false information on the trade issue than the Premier has.

Mr. Speaker: Order. I hope the Leader of the Opposition will choose his words more carefully and withdraw the allegation he made.

Mr. Grossman: I withdraw the allegation that the Premier has misled anyone.

Mr. Speaker: And now the final supplementary.

Mr. Grossman: Carefully avoiding any suggestion that the Premier intentionally meant to give the impression yesterday that there was a large number of countervails going on against Canada in Washington, how can he reconcile the statement he made in the House yesterday with the reality that there is not one single countervail action going on against Canada at present? How can he reconcile those confusing statements and how can he purport to have any credibility on trade issues any more?

Hon. Mr. Peterson: How can my friend opposite stand and get so excited that we have not handled the issues very well? On the one hand, he is maintaining there is no problem; on the other hand, yesterday he maintained there is a problem. How can he reconcile the two points of view?

We are trying to anticipate these situations. There is a large number of bills in the United States Senate from a variety of different points of view expressing certain constituency interests. There is a lot of talk in industry that there may be suits. We are trying to anticipate that ahead of time. Frankly, I cannot understand the member opposite, who is now standing in his place and saying, "There is no problem and we do not have to worry about it."

TECHNOLOGY FUND

Mr. Gillies: I have a question for the Premier. The Premier may be aware that the board of directors of Exploracom held a news conference this morning in which some very serious allegations were made about the Premier and the way he does business. We would like to give the Premier an opportunity to respond to some of these. The directors of Exploracom, including Senator Keith Davey, Senator Jerry Grafstein, Ian Macdonald, Maureen McTeer and others, say the Premier changed the ground rules on this grant after it had been made.

I have two questions for the Premier. In the first instance, did he tell Exploracom that Ontario government funding would be committed to it on a matching-fund basis or did he not? Second, did he tell them this funding was coming from the technology fund or as a startup grant from general revenue?

Hon. Mr. Peterson: The answer to the first question is yes. I am not sure whether there was a specific discussion about which fund it would come from. Obviously, they were concerned about the revenues. As I recall, and I was not directly involved in these discussions, it did not concern them which particular pot it came from.

Mr. Gillies: This is a very important point because the directors are quite unequivocal in their contention that there was no discussion of matching funds when the grant was made. In fact, in the material that was released this morning, we now have the Premier's letter of May 28, 1986, which starts, and I quote the Premier, "Dear Abe...I am pleased to commit on behalf of the Ontario government a startup grant of $17.5 million to help make Exploracom's vital nonprofit program a reality."

There is no mention here of matching funds. Mr. Schwartz and the other directors, many of whom the Premier knows well, would like an answer to this. Did he change the ground rules on this grant late in the game because of political pressure or has his word to this board been consistent from day one? I suggest they do not believe it has been.

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Hon. Mr. Peterson: I say to them and to the member's friends on the board, that our view has been consistent. We were concerned about two things, about the matching funds as well --

Mr. Rae: Your letter does not say that.

Hon. Mr. Peterson: That was not the contract. The contract was to be negotiated later on. They could not come forward on the matching funds or the fact there would be an operating deficit for a long time.

Mr. Davis: A lot of people in Ontario are going to have trouble shaking your hand unless they have a contract.

Mr. Speaker: Does the member for Scarborough Centre (Mr. Davis) have a supplementary? No? Final supplementary, the member for Brantford.

Mr. Gillies: This is a very serious issue. For months we have questioned the Premier's judgement with regard to this grant. The directors of the project are now questioning the very integrity of his decision-making process. I quote from this release this morning: "Based on the Premier's commitment, suppliers were willing to extend credit to Exploracom. Now these creditors are owed approximately $1 million and I" -- that is, Mr. Schwartz -- "have lost almost $3 million, mainly from defaulted loans that I guaranteed on behalf of Exploracom."

The issue is one of simple morality. Can the Premier's word not be relied upon? Will the Premier in this House forthrightly respond to the charges being made that this group was misled, that the ground rules were changed on this grant and that he has now left the Ontario taxpayers open to millions of dollars of liability in this project because of his gross mishandling of it?

Hon. Mr. Peterson: I am delighted my friend opposite has taken up the cause of Exploracom now. Perhaps he has had a change in this regard on the road to his own personal problems.

The ground rules never changed in this matter. It was very clearly to be matching funding. After the analysis was made, there were concerns about the capacity to fund it on an ongoing basis. It was not a decision this government enjoyed making. We thought it was a good concept. Unfortunately, the financing did not come together. We were prepared to make a tough decision not to commit this government and the taxpayers to something that would be an ongoing drain.

FREE TRADE

Mr. Rae: I would like to take the Premier back to some questions I put to him yesterday, some answers he gave to me and some answers he apparently gave to the media outside. I understand from the answer he finally gave, after many repeated attempts on the part of those of us who had tried to elicit answers from him, that his current position with respect to free trade is as follows: he is in favour of free trade in so far as he wants to have unlimited access for Ontario products into the United States but is opposed to free trade in any way that would relate to goods coming into Ontario.

I take it that was the position he expressed yesterday. It is a nice Alice-in-Wonderland wish list position. Is that the position he advocated when he was down visiting the various congressmen and senators in Washington? If that is his position, why should they take him seriously for more than 30 seconds?

Hon. Mr. Peterson: They take us very seriously there, because they recognize the size and the volume of our trade and they recognize Ontario is the largest trading partner of the United States, except for Canada. I repeat that we take a very pragmatic view of this situation. If, as the deal comes down the pike, it is in the interests of the province, then we will obviously look at it favourably.

If there is some method, for example, whereby disputes can be solved in an easier, more expeditious way, rather than going through this laborious process, that may well be constructive. We are not prepared to stand by and see the auto pact dismantled or a lot of the other claims that have been raised by some as the discussions have been taking shape.

I can tell the member, who is prepared to prejudge this entire matter, that there is not enough to judge at the moment. We are putting Ontario's interests and concerns forward publicly to the negotiators and everyone else who will listen.

Mr. Rae: The Premier is a politician. He knows all sorts of people come into his office from time to time making representations. He knows perfectly well that if somebody came into his office and said, "I am all in favour of free trade as it relates to my trading with you but not as it relates to your trading with me," he would not give them the time of day. He knows that perfectly well.

Specifically, he mentioned the auto pact. Can the Premier tell us, when Clayton Yeutter said to him, "I cannot guarantee that the auto pact will not be on the table" -- I understand he did because this is the story the Premier subsequently told the press -- did he tell Clayton Yeutter clearly and categorically that if the auto pact is on the table, Ontario will veto any such agreement?

Hon. Mr. Peterson: They are very well informed of Ontario's position in that regard and they know where we stand on the issue. I expressed my view on the auto pact to Mr. Yeutter and everyone else we chatted with on that occasion.

Mr. Rae: The Premier did not answer the question. He has spoken in this House about a veto. He has spoken outside to the press about a veto. I want to know if he specifically told Clayton Yeutter, the chief trade negotiator for the United States, in the conversation he had with him this week in Washington that he, David Peterson, the Premier of Ontario, would veto any agreement which affected the auto pact between Canada and the US. Yes or no?

Hon. Mr. Peterson: I am not sure I put it in exactly those words, exactly as the member said it.

Mr. Rae: Uh!

Hon. Mr. Peterson: What does that mean, "Uh"? Are they sick or what is the problem with them over there? If they have a problem, there is a washroom just down the hall.

I know my honourable friend would want to go and thump on the table, hoot and holler and he would be taken seriously there, about as seriously as he is taken here in this regard. They know very well the provincial powers in this matter. We discussed the questions of ratification and provincial influence. We explained to him that the provinces, in our view, would have a veto over the implementation of any trade pact. I explained to him the importance of the auto pact to Ontario.

I believe he is a bright enough man that he can put two and two together. That is not always the case with everybody I deal with in this House.

Mr. Rae: I think I heard a no. I think the Premier said he did not refer directly to his power, which he brags about everywhere.

Mr. Speaker: Order. Did the member have a question? For which minister?

PAPER MILL

Mr. Rae: Yes, I have another question for the Premier. Yesterday the Minister of the Environment (Mr. Bradley) told the House quite explicitly that there were discussions ongoing between Kimberly-Clark and the government. His words were that these discussions "have taken place and are continuing."

This morning I spoke with Mr. Lavallet, the president of Kimberly-Clark, who, first of all, told me he was not dealing with the Minister of the Environment, he was dealing with Mr. Carmen. That was who he was told to deal with. He was no longer dealing with the minister.

When we are dealing with a control order, which is a serious power of the Minister of the Environment, can the Premier explain why it is that Mr. Carmen and not the Minister of the Environment is in charge of this problem?

Hon. Mr. Peterson: It is a complicated issue, as the member will know. It deals with a number of issues including jobs and environmental questions. The minister is in full carriage of this situation and he is right. There have been ongoing discussions on this matter, and again today on this subject. If Mr. Lavallet is not part of them, that is his problem, not ours. I can tell the member discussions are ongoing. The minister is absolutely right.

Mr. Rae: I had a conversation with Mr. Lavallet in which he also indicated there was a discussion during a breakfast meeting yesterday morning in which, as he put it, "The government put its position and we put our final position and we told the government that was our position and the next thing we would discuss would be after the government indicated publicly what the control order was." In other words, there were no more discussions.

Will the Premier explain to the House the following: Is it Mr. Lavallet who is telling the truth when he says that is what took place and there were no more substantive discussions between the parties after that meeting, or is it the Minister of the Environment who is telling the truth when he tells the House that discussions are continuing?

Hon. Mr. Peterson: I tell the member flatly there were conversations I personally know of after that meeting he talked about. There have been conversations today. The Minister of the Environment is telling the truth.

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Mr. Rae: All I can say is that it is an absolutely bewildering and baffling way in which to approach a problem.

Can the Premier explain to the House how the following facts are possible? The company thought
-- and Mr. Lavallet repeated that thought again this morning -- that a control order had been agreed upon some two weeks ago. As far as he was concerned, that had the approval of -- as he put it
-- the government. Subsequently, the Minister of the Environment was taken off the case. Subsequently, discussions took place and according to Mr. Lavallet, as far as he is concerned, in substantive terms those discussions were completed yesterday morning.

Can the Premier explain why anybody in this Legislature or, indeed, outside should take the Minister of the Environment seriously when he says discussions are taking place and, according to the company, they are not and when he is not the person responsible for implementing the Environmental Protection Act of Ontario? Can he tell us why anybody would take his minister seriously? Does the Premier not recognize that he, by his action, has put his minister in an untenable position with respect to this question?

Mr. Speaker: Order.

Hon. Mr. Peterson: I will tell the member why they take him seriously: because he is the most effective environmental minister in North America. That is why they take him seriously.

I stand in this House and tell the member -- and I know the member would like to make a big deal out of this, and he can quote his good friend Jack Lavallet, if he wants to -- that I know for a fact that there were discussions subsequent to that breakfast meeting. I know for a fact that there were discussions today. If Mr. Lavallet is not aware of all those, that is his problem. Let the member ask him about his influence at Kimberly-Clark, but let him not ask me about the influence of the Minister of the Environment, because he is clearly in charge.

Mr. Pope: Bob Carmen thanks the Premier for his vote of confidence.

Mr. Speaker: And the question is to which minister?

COUNTERVAILING TARIFFS

Mr. Pope: My question is to the Premier and it relates to his rainbow tour of Washington, which frankly was not an incredible success. Since he has not bothered to make a statement of full explanation to the people of this province or to the members of this Legislature with respect to his activities and discussions down there, we will have to continue to try to extricate it from him during question period.

Hon. Mr. Peterson: Sure, go ahead.

Mr. Pope: Sure, because he does not want to make a statement to the workers of this province who are affected by his meanderings around Washington.

Mr. Speaker: Order. That is quite enough preamble. Could the member please place his questions?

Mr. Pope: During the course of his discussions in Washington, did the Premier raise the iron ore issue in the context of steel discussions? If so, with whom, when and what position did he take? Did he discuss the problems of confronting the forest products industry? If so, with whom and what position did he take? Did he discuss the problems of the auto workers of this province with a 12-month notice --

Mr. Speaker: Order. Would the honourable member take his seat?

Hon. Mr. Peterson: We discussed all those issues with a variety of players. Some were interested in those issues and some were less interested. The congressmen particularly in the United States who have a constituency relationship with a commodity group are obviously more knowledgeable about that than others.

We talked about the interrelationships of the steel companies, the ownership of iron mines in the US, the fact that for every dollar we export we purchase $1.26 from the US in coal, iron and other commodities, the relationship among those too, and how it would be a very serious mistake, in our view, for the US to enter into a new round of protectionism that interfered with this trading relationship, which has been fair and which has not been subsidized from this side of the border.

The member asked me other questions. They were put with Senator Heinz and a number of other people -- Senators Bennett Johnston, McClure and others on the energy committee -- Senator Bensten as well. We discussed also with Mr. Baldrige and Mr. Yeutter some of the problems the administration is having with the Congress at present. As the member knows, it is an unwieldy system in the US. It is not the individuals but the system that drives the government. Indeed, it is a system of special interests. Our concern was to get to those special interests and try to build coalitions for the Canadian point of view on all the subjects he and others have named.

Mr. Pope: The workers in these industries in this province are entitled to a detailed explanation from their Premier about specifically whom he met with and what positions he specifically put on their behalf.

I have asked the Premier about the forest products industry and the iron ore industry. I have asked him about the potential notice under the auto pact of a 12-month period of time for renegotiation and perhaps an end to the auto pact quite separate and apart from the trade discussions going on between Canada and United States.

He has not given any details about what positions he took on behalf of Ontario workers. They are entitled to that explanation. They are entitled to know what their Premier said. It is not good enough for him to go down there and say that he does not understand the system, that it is a sausage factory. He has an obligation to help the workers. What did he say on their behalf in Washington?

Hon. Mr. Peterson: If the member had been in the House a little more often, perhaps he would know of the things I have been saying, because I said exactly the same things there that I have said here for a long time. There is nothing new about my position on steel or softwood. I know he is somewhat familiar with that discussion. It has gone on for months in this country, as has the discussion on the auto pact.

He asks about the workers of this province. The workers are probably a little more sophisticated in their understanding than the member is. He has this tendency perhaps for some political reason, to try to oversimplify this thing into a little win-lose situation or to personalize it in some way. My guess is that the workers of this province understand our position a lot better than he does, and they have a lot more faith in our ability to carry out their interests than they do in his.

THERAPEUTIC ABORTION SERVICES

Ms. Gigantes: My question is of the Minister of Health. We have a report now from Dr. Marion Powell, which has taken six months to produce. The quality of the report is high. It tells the government what it knew two years ago when the future Premier was announcing policy on the availability of abortion service for women in Ontario.

It tells us about the lack of an efficient service, the problems with referrals, the lack of support for women, the geographic inequities and the cost barriers that exist. It tells us once again that the medical professionals involved feel that we have to have a change in our law and that we are not providing the best in medical procedures for women seeking abortion services.

What is the minister going to do and when is he going to do it?

Hon. Mr. Elston: The honourable member knows that the report was just received. Like her, we are now intent on analysing it very thoroughly and reaching out to the various groups that assist in delivering therapeutic abortion procedures around the province.

I will be accepting her input with respect to recommendations she may wish to give, along with that of any of the members and all the people who are engaged in and who plan for the health care community around the province. We look forward to a thorough review and analysis of the report and input from all the people in the province on a very sensitive issue. We will then be making recommendations, I hope, in a very short time.

Ms. Gigantes: It is galling to listen to the Minister of Health tell us that he would welcome our input. He knows we have party policy on this to which we have stuck since before the election of 1985. Whereas his party has not been able to come up with an implementation process for its policy, we have always taken the position that there should be no more prosecutions on this subject and that we should provide clinical services for women who need them, because hospitals in this province are not doing it.

What is he going to do? What is he going to get from the hospitals of this province that he has not had before? Fewer than half of them have even established active therapeutic abortion committees. How is he going to provide access? How long do women have to wait? Are we going to have a policy? Are we going to have programs that really work for women?

Mr. Speaker: Order. Response?

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Hon. Mr. Elston: The report is here. We are reviewing it. We will review it with dispatch. This party does not plan for the health care needs of this province based on the date of a writ, either imagined or otherwise. We will move with dispatch. We will accept the input we are getting on the terms of this report. We will move with dispatch, and I welcome the member's suggestions with respect to this report, which deals with the existing circumstances under which we perform therapeutic abortions here in Canada under the auspices of the Criminal Code. We will welcome the member's input.

Mr. Speaker: New question. The member for Brampton (Mr. Callahan).

Mr. Rowe: On a point of order, Mr. Speaker: I believe the member for York East (Ms. Hart) wanted to ask about this government's mishandling of the Torvalley brickworks issue.

Mr. Speaker: That is not a point of order.

LOTTERIES

Mr. Callahan: My question is of the Minister of Consumer and Commercial Relations. A short time ago, a number of advertisements appeared in the various newspapers suggesting that information could be obtained with reference to picking accurate Lotto and Lottario numbers.

Subsequent to that, on CBC's Marketplace, a number of these ads as well as the material that was received as a result of sending away for it, together with a number of books that were looked into, were all found to be of no value whatsoever. The cost of these was anywhere from $25 to $50. Would the minister have his staff take a look at those advertisements to determine whether they are in accord with the restrictions that are provided in legislation?

Hon. Mr. Kwinter: I will be very happy to take the honourable member's advice and have my staff look into it.

Mr. Callahan: After the minister's staff has had an opportunity to review it, would he confer with the Minister of Tourism and Recreation (Mr. Eakins) with a view to perhaps notifying people if it turns out that these periodicals and advice are of no value?

Hon. Mr. Kwinter: I can assure the member that after we have had a chance to look at it, and after I have conferred with the Minister of Tourism and Recreation, I will report back to him.

PAPER MILL

Mr. Grossman: I have a question of the Premier on the Kimberly-Clark issue. Now that we are in a situation where Kimberly-Clark says there are no negotiations going on, and the Premier says Mr. Carmen is having negotiations, can he inform the House specifically with whom Mr. Carmen is having his negotiations at Kimberly-Clark? Second, is the problem in the negotiations that Kimberly-Clark is asking for more money than the government is prepared to give or a looser control order?

Hon. Mr. Peterson: Yesterday, Mr. Carmen, as one of the people involved, as many are involved in the situation, talked to a lawyer with Kimberly-Clark. I cannot tell the member the lawyer's name off the top of my head. I believe he is from Dallas, or perhaps Atlanta or somewhere like that.

There are a number of issues outstanding including the control order and the technical capability of meeting that. There is some question over the technology and those types of things. Those are what the ongoing discussions are all about.

Mr. Grossman: With 1,600 jobs at stake in Terrace Bay, I would have thought it might have been appropriate, first, for the minister to be dealing directly with the president of the company and not his Mr. Carmen, a civil servant, dealing with a lawyer from Atlanta.

Second, I would have thought that since Mr. Carmen works for the Premier, and not for the minister, he might have had this information from Mr. Carmen and been able to tell this House specifically the status of the negotiations.

Given the fact that he was able, without this sort of difficulty, to come up with a total of $95 million to Toyota and Suzuki, grants we support to create new employment in southern Ontario, what is the major difficulty here with finding somewhere up to $20 million in negotiating with Kimberly-Clark to save the jobs and clean up the environment? What is going on in the negotiations? Are there different rules?

Hon. Mr. Peterson: That has never been a big hangup. We have been discussing all the options, including governmental participation, and if so, in what form. A number of highly technical questions are being discussed as the best way to solve the ambitions we have. Both things are being discussed. It should come as no surprise to the honourable member that those discussions are ongoing. Because it is such a complicated question, as I said, a variety of people are involved in the discussions, and the minister has carriage of it.

TECHNOLOGY FUND

Mr. Philip: I have a question of the Premier concerning the Exploracom Computer Exploration and Enterprise Centre. Is it not fair to say that the Premier made a commitment of $17.5 million of the taxpayers' money to his one-time friend Abe Schwartz, without any structures in place or any mechanisms to safeguard the taxpayers' purse; and that, seeing that Abe Schwartz and the whole deal are a political liability, he is trying to cut his political losses purely to save himself from political embarrassment? Is that not why the deal is off?

Hon. Mr. Peterson: No. We have a responsibility to the taxpayers and we have exercised it in that regard. It is no different from any other announcement of a grant to the International Telecommunications Discovery Centre in Brantford or anywhere else. Certain preconditions have to be met in terms of matching funding, ongoing financing and other things, and unfortunately, they were not forthcoming.

Is the member telling me we should go ahead or not go ahead? What is he telling me? If the honourable member has some advice, I would be happy to hear it.

Mr. Philip: The difference was that there were no structures in place, unlike any grants to any other organization when the Premier gave his son Abe, whom he has now put up for adoption, his $17.5-million commitment.

Would it not be fair to say that Abe Schwartz would be justified in saying, having experienced what has happened here and the reasons concerning why the project was cancelled, which he says are completely wrong, that if the Premier were in Abe Schwartz's shoes, he would say, "With friends like Premier Peterson in high office, you do not need any enemies in this province"?

Hon. Mr. Peterson: I do not expect Mr. Schwartz to like what we do, any more than I expect that member or the members opposite to like what we do. Those are the joys of governing and making some difficult decisions. I got no joy out of making it. I thought it was a good concept. If certain parts of it can be resurrected in the future, I will be delighted; but then we have a responsibility to the taxpayers as well.

I am sure my honourable friend, who has been such a watchdog on public expenses over time, if he knew all the facts, would agree with the decisions that have been made. We were not prepared to get into another Minaki Lodge situation. We were prepared to look at this objectively, hard as it was. I regret doing what we had to do, but it was a responsible decision, and the honourable member opposite, if he knew the facts, would agree with me.

GASOLINE TAX

Mr. Rowe: I have a question for the Treasurer. As the Treasurer will know, there is a quaint little service station at the corner of George Road and Highway 5 in his home town, affectionately known to the members of this House as Earl's Shell. Can the Treasurer tell us how far it is from Earl's Shell to his office at Queen's Park?

Hon. Mr. Nixon: Actually, it is the corner of Branchton Road and Highway 5. I believe it is about 62 miles -- pardon me, 105 kilometres or something like that.

Mr. Rowe: I would like to be able to congratulate the Treasurer for his knowledge of distance. However, it is actually 118 kilometres from Earl's Shell to Queen's Park. That is just about the same distance that 4,800 commuters from Barrie travel to work in Toronto five days a week. It costs these ordinary citizens $14,198 a week, or $728,000 a year, as a result of his decision to peg provincial gasoline taxes at 8.3 cents a litre.

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When is the Treasurer going to share this tax windfall with the working people of Barrie and the rest of the people in Ontario? When is he going to stop gouging the people of this province and give back some of that excess tax?

Hon. Mr. Nixon: I do not know what kind of a car the member drives if it costs him $14,000 a week to come to work. I do want to tell the member that the revenues from gas tax are almost exactly what they were predicted to be in the budget last year. It is one of the revenues that has not grown. As a matter of fact, it is down a bit because of the efficiency of the automobiles. There is no extra windfall revenue connected with the gasoline tax. It is precisely as approved by this House using its democratic prerogatives.

PLANT SHUTDOWN

Mr. Mackenzie: I have a question of the Premier. A few moments ago, I heard him indicate he thought the workers were sophisticated enough to understand just what was happening to them in certain circumstances. Can he tell the workers at Kirsch-Cooper in Woodstock what is happening to them and what he might do about it? These are workers who have 30 and 40 years' seniority in that plant, which was a viable operation that had been there since 1921. It was bought out five years ago and now it has been shut down and sold with the minimum benefits necessary given to the workers.

What is the Premier going to tell the better than 200 workers, their families and friends from neighbouring plants, who demonstrated in front of that plant yesterday? While he is at it, will he take a look at the petition they are sending him with more than 1,000 names from the workers in Woodstock?

Hon. Mr. Peterson: I am not familiar with that situation. I appreciate the honourable member's bringing it to my attention. Is that news of yesterday? I am sorry I am not aware of it, but I will certainly look at it. I do not know the circumstances. Obviously, we will assist in any way we can.

Mr. Mackenzie: This is one of the plants I mentioned in the House two weeks ago. As of February 2, workers, in some cases with as much as 30 and 40 years' seniority, will not have a job any more. These workers are in a plant where, since it was bought out five years ago, some of the more profitable lines have been systematically shipped out, until it could be said the plant was no longer profitable and now it has been shut down. It is the same firm that shut down the Gardner-Denver plant two or three years ago. These workers want to know what the Premier is going to do in terms of justification and protection of workers in this kind of piracy by the corporations.

Hon. Mr. Peterson: I thank the member for sending me the petition. I will look into the situation immediately and see whether there is anything we can do about it. The member makes a number of allegations about the nature of the corporate behaviour. We will look into every aspect of them.

COMMUNITY ARENAS

Mr. Offer: I have a question of the Minister of Tourism and Recreation. There has been a recent report of the existence of carbon monoxide in some recreational arenas in Ontario. Given the many thousands, if not millions, of people who avail themselves of the use of these arenas, I wonder whether the minister can inform the House what actions he is taking to make certain the arenas are safe for the use of the people of this province.

Hon. Mr. Eakins: The question of safety problems caused by carbon monoxide was highlighted last evening in a television program. As part of my commitment to safety in sport and recreation in Ontario, I have been working closely with the Ministry of Labour and the Ministry of Health to ensure a safe indoor environment in our ice arenas.

We have produced, jointly with the Ontario Arenas Association, a training manual and a slide tape show called, Air Alert: Toxic Gases in Community Arenas. The training package will be used by the Ontario Arenas Association to inform its members of the potential problems of carbon monoxide. I am confident as a result of our actions that the indoor ice arenas across Ontario will continue to provide a safe environment in which everyone can participate.

MINISTER'S TRIP

Mr. Rowe: I have a question for the Minister of Tourism and Recreation: can he tell us how long it takes on average to respond to questions placed in Orders and Notices by members of this House?

Hon. Mr. Eakins: In regard to responses to questions, I can tell the member from my 112 years in the House that responses from our ministry and this government have been much superior to what we received in the past.

Interjections.

Mr. Rowe: Let us give the other side a lesson on the minister's response. I am not surprised at the guffaws from my colleagues on this side of the House. On February 6, 1986, the member for Burlington South (Mr. Jackson) asked him to explain the purpose of a trip he made to Dallas, Texas, in the dead of winter. The copy of the correspondence on that legitimate inquiry landed on my desk on January 21, 1987. Is that good response time?

Given that the minister had almost a year to prepare his response, can he tell us today whether he had any success in convincing a major development corporation in the south to invest in the province or was this simply a short jaunt to the sunny south at the taxpayers' expense?

Hon. Mr. Eakins: If I were in the member's position, I would get rid of my research people because I have never been to Dallas in the dead of winter. Second, I am sure the result of that visit will see some very important work here in Ontario from some companies that want to locate here.

ENVIRONMENTAL ASSESSMENT

Mrs. Grier: I have a question for the Minister of the Environment. It is not about Kimberly-Clark; it is about a very straightforward and uncomplicated campaign promise. As I pointed out to the House yesterday, during the election campaign, the Liberal Party responded to a questionnaire from the Project for Environmental Priorities indicating that it supported extending the Environmental Assessment Act to private projects. Will the minister tell the House whether he supports that position?

Hon. Mr. Bradley: I have received the report and found it to be most interesting. As the member will know, it deals with a number of issues related to the environmental assessment process and the Environmental Assessment Act. I think the issue she has isolated is appropriate. She has isolated its application to the private sector, but she will know that a number of other recommendations have been made. I am certainly willing to read the report and to determine those parts of the report we can implement at the earliest opportunity and those that we cannot.

The one the member has mentioned specifically, which, as I indicated, is appropriate, will be given very serious consideration as to how many and to what kind of projects it might apply. The principle the member draws to the attention of the House is indeed one I find supportable.

Mrs. Grier: The minister anticipated my supplementary question. I had not mentioned the report in my first question. I merely asked him whether as minister he now was supporting the position he took before he was elected to this House. I gather he does. I would therefore like to say to the minister that surely he agrees that, without the extension of the Environmental Assessment Act to private projects, we have the ludicrous situation in Toronto of a city energy-from-waste plant being subject to an environmental assessment and a private project just down the road not being subject to an environmental assessment.

Can the minister make a commitment today that before the end of this session he will have moved to implement that campaign promise and the recommendation of the report he received yesterday?

Hon. Mr. Bradley: First, I am not at all certain when this specific session will end; I have some idea when that might be. I want to indicate to my friend the member for Lakeshore and to her leader and to my friend the member for Bellwoods (Mr. McClellan) that, as she knows, in receiving a report of this kind from a group that has taken a good deal of time to look at all aspects of the Environmental Assessment Act, I would want to be able to respond not specifically and only to the issue she appropriately raises but also to a number of other issues about which I think she shares my view that they are important in terms of streamlining the system and making it more effective. We will move as expeditiously as possible.

My friend the member for Riverdale (Mr. Reville) has a specific interest in the other matters to which the member refers. I hope to have an answer for him very soon.

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DETROIT INCINERATOR

Mr. Mancini: I have a question for the Minister of the Environment. I would like an update of the very serious matter concerning the construction of an incinerator in the city of Detroit without proper pollution equipment. The people of Essex county fear that much of this pollution will move across the Detroit River to Essex county. What has the Minister of the Environment done in terms of negotiating with the city officials and with the state of Michigan in this very important matter?

Hon. Mr. Bradley: This has some history, as the member will know. I will spare members of the House that history this afternoon. I know they will be relieved.

I do want to indicate to the member that the discussions I have had -- in fact, I have had discussions this week -- with the mayor of the city of Detroit will be continuing. In a meeting with the mayor of Detroit, I drew to his attention the very strong feeling of Ontario that what we consider to be the best available technology should be placed on the incinerator Detroit has chosen to construct. As the member may be aware, that would involve scrubbers and what are referred to as bag houses. Instead, they have decided to have what they call an electrostatic precipitator placed on the incinerator and they feel that will do the job.

As they always say in diplomatic language, there was a full and frank discussion between the two of us. It was a friendly meeting, but I think the mayor of Detroit, both in terms of the information provided in written form and in person, is well aware of the Ontario position and knows we will pursue this matter vigorously.

Mr. Mancini: In view of the fact that we have had a number of meetings with the mayor of Detroit, and with the governor of the state of Michigan, and in view of the fact that the city is now proceeding and has poured concrete for the construction of this incinerator -- they are moving forward whether we have diplomatic discussions or not and they do not seem to be listening -- I want to know whether the Minister of the Environment is prepared to pursue the matter in the courts to protect the people of Essex county.

Hon. Mr. Bradley: The consistent answer to that is that we are prepared to do so, based on the fact that we have not seen an initiative from the other side of the river yet which tells us we would see a change in the construction of the incinerator. I have indicated publicly, both through the news media and directly to individuals on the other side, that we will be pursuing a legal route if there is not a political answer.

The member may be aware that the state legislature will soon be having its state of the state speech, similar to our throne speech. I am hopeful we may see an answer to this in that initiative on the part of the state of Michigan. If that is not forthcoming and if the city's position does not change, we will be pursuing a court action. This matter has been discussed with a number of people in the legal profession.

Mr. Pope: In other words, the minister has failed the people of Essex county.

COUNTERVAILING TARIFFS

Mr. Pope: My question is to the Minister of Industry, Trade and Technology, who by now will have been briefed by trade officials about his Premier's visit to Washington. Since the Premier has refused to answer specific questions and provide specific details about the actions he took on behalf of the auto workers of this province, the steelworkers of this province, the iron ore miners of this province, the bush workers of this province, or the pulp and paper workers of this province, can the minister respond now to the question put by the Leader of the Opposition (Mr. Grossman) earlier this week?

Will he give details now to this House as to what efforts were made between October 1986 and the Premier's visit with respect to the steel question and will he table those documents by Monday noon?

Hon. Mr. O'Neil: I thank the honourable member for the question. I believe the Premier (Mr. Peterson) has given him full answers on those items, as I have. I mentioned to him that meetings have been going on for some time now among the Ontario government, the Canadian government and the government of the United States.

Mr. Pope: This is the same minister who said on softwood lumber that all the action had been taking place in Ottawa and Quebec City. We are entitled to an answer. There are too many jobs at stake. We want to know in detail, and we want him to table by Monday, specifically what contacts there were with the American authorities, what meetings took place, the minutes of those meetings and who was there. We are entitled to know that and so are the workers of this province. The minister should get off his duff and start behaving like a minister of trade.

Hon. Mr. O'Neil: I believe the member should consider himself very lucky to have somebody of the calibre of the Premier of this province, who is looking after it so well.

Interjections.

Mr. Speaker: Order. The member for Cochrane South has had a question and a supplementary. We will just wait.

AFFORDABLE HOUSING

Mr. Philip: I have a question for the Minister of Housing stemming from the standing committee on public accounts inquiry into the convert-to-rent program, particularly the Harbourfront project in which he seems intent on pouring millions of dollars into Huang and Danczkay and its lobbyist, Ivan Fleischmann. Is the minister aware that by the most conservative estimates, the cost per unit for 15 years of geared-to-income apartments at Harbourfront will amount to about $195,000, that after that 15-year period the government will have nothing to show for it and that it will convert back to the private developer who built it. Does he consider that good use of the taxpayers' money?

Hon. Mr. Curling: The convert-to-rent program is doing very well around the province. Although the member would like to hear that 100 per cent would be rent-geared-to-income units, the program is not geared that way. It is to get low-income people and graduated market rent facilitated and accommodated in those projects. I think the convert-to-rent program could need a little more fine-tuning as we go along, but it is doing very well as it is now.

Mr. Philip: With the average unit renting on the market at $712, that is really family housing, is it not? Is the minister aware there are approximately 25,000 families on the waiting list for geared-to-income housing? Does he feel that spending more than $24 million to give gold-plated accommodation merely to 125 families for 15 years is the responsible way of solving the housing problem in this province? Is it responsible to the taxpayers?

Hon. Mr. Curling: The member gives the impression that this is the only housing program we have in the Ministry of Housing. We have spent $500 million in this fiscal year to adjust the housing problem here. We have other programs. I just announced 6,700 nonprofit rental housing projects. I recently announced an approval about 900 of those hard-to-house in our 3,000 projects. If my figures are right, and I could be corrected, since I have been Minister for Housing I have approved 25,000 units in all the different programs. For him to narrow his criticism to the convert-to-rent program and say that is the way we address the people who need accommodation he is right, there are 30,000 people on the waiting list, but there are quite a lot more whom we do not even have on the waiting list so we would do better to address those needs as we go along.

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RECREATIONAL COMPLEX

Mr. Barlow: I have a question for the Minister of Tourism and Recreation. During the latter part of May 1985, St. Gregory's Roman Catholic church in Cambridge made application to his ministry for a 1986 capital program for new recreational facilities. They wanted to build a senior citizens' recreational complex. They did not receive a response to their application until September 1986 when, disappointingly, the ministry said it was not able "to approve this application for this year," that is last year.

St. Gregory's had hoped to break ground very early in the spring of 1987. Can the minister please inform this House when funding for capital projects of this sort will become available?

Hon. Mr. Eakins: The time lag had to do with the fact that once the applications go out, it takes time to reassess them and place them in priority. Unfortunately, that project was not able to go forward at that time. In the very near future, I expect we will be able to discuss and perhaps announce a new program. They will be able to apply at that time.

Mr. Barlow: Will that announcement be made early, in time for the next fiscal year?

Hon. Mr. Eakins: We always announce our programs early. The member will know that in 1983 the program was frozen. There has been a great backlog because the previous government froze the program. We started the program again with some $15 million, but there was a great backlog. We hope to be able to address that in the very near future.

PETITIONS

DIALYSIS UNIT

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

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

"That the Ministry of Health respond to the need for a renal dialysis unit at Scarborough General Hospital, since no such unit exists between the city of Toronto and the city of Kingston."

It is signed by 224 people, and this is the first of many, until we get the unit.

SERVICES FOR CHILDREN

Mr. Andrewes: I have a petition signed by some 370 residents of the riding of Lincoln.

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

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

"We, the undersigned, feel the Ministry of Health of Ontario is unfairly discriminating against the children of Lincoln county. Not only has the ministry stopped the funding for emergency ambulance transportation for our critically ill children, but the ministry has also cut down on the funding for post-graduate paediatric studies.

"This is no way to ensure a healthy tomorrow. We feel that the ministry should look after our children better. After all, they are the future."

ICE FISHING

Mr. Runciman: I have a petition addressed to the Lieutenant Governor Council in respect to the uninformed and arbitrary action of the Minister of Natural Resources (Mr. Kerrio) in banning ice fishing for lake trout in divisions 9 and 10. It is signed by more than 300 sports fishermen in Leeds and Grenville.

MOTIONS

COMMITTEE SUBSTITUTIONS

Hon. Mr. Nixon moved that the following substitutions be made on the select committee on the environment: Mr. Eves for Mr. Shymko, Mrs. Marland for Mr. Gillies, Mr. McGuigan for Mr. Sargent, Mr. G. I. Miller for Mr. Reycraft, Mr. Partington for Mr. Baetz.

Motion agreed to.

COMMITTEE SITTINGS

Hon. Mr. Nixon moved that the select committee on the environment be authorized to meet this afternoon following routine proceedings.

Motion agreed to.

Hon. Mr. Nixon moved that the select committee on health be authorized to meet on Monday, February 2, 1987, following routine proceedings.

Motion agreed to.

Hon. Mr. Nixon moved that the select committee on retail store hours be authorized to meet on Wednesday, February 4, 1987, following routine proceedings.

Motion agreed to.

INTRODUCTION OF BILL

CROWN WITNESS PROTECTION ACT

Mr. Runciman moved first reading of Bill 191, An Act to provide for the Safety and Welfare of Crown Witnesses in Certain Criminal Proceedings.

Motion agreed to.

Mr. Speaker: Does the member have a brief explanation?

Mr. Runciman: Very briefly, if passed, this legislation would provide the first legal framework to provide witness protection in any jurisdiction in Canada. I urge its careful consideration by members of the House.

ORDERS OF THE DAY

Hon. Mr. Nixon: I ask the unanimous consent of the House to permit the Minister of Consumer and Commercial Relations (Mr. Kwinter) to introduce a special resolution, notice of which he gave during a previous statement.

Mr. Speaker: Is there unanimous consent?

Agreed to.

INTERNATIONAL BANKING CENTRES

Hon. Mr. Kwinter moved the following resolution:

That the Legislative Assembly of Ontario regrets the action of the government of Canada in ignoring Toronto, the established financial centre of the country, in its plans to designate international banking centres, thereby distorting the national economy and unnecessarily provoking regional tensions; and that the assembly calls upon the federal government to correct this intentional omission by adding Toronto to the list of designated cities eligible for tax advantages favouring international banking.

Mr. Speaker: Mr. Kwinter has moved this special resolution. I believe all members have received a copy. Are there any opening comments?

Hon. Mr. Kwinter: I want to give a brief history of how we got to where we were.

In the budget speech of the federal government dated February 26, 1986, they announced that they were contemplating a situation whereby they were going to designate both Montreal and Vancouver as international banking centres.

The Premier of Ontario (Mr. Peterson), in a letter to the Prime Minister on March 4, which was just days after that announcement, wrote expressing his great concern about what this would do to Toronto's position as the pre-eminent financial centre of Canada. The Prime Minister responded and stated that he would not do anything unless there was full consultation with Ontario, and he believed that this issue could be resolved. That letter by the Prime Minister was written on May 27.

The Premier wrote back stating that he acknowledged this letter and welcomed the assurances of the Prime Minister that nothing would be done unless there was further consultation and that Toronto's interests would be looked after.

I should tell members that on September 8 there was further correspondence with the Prime Minister of Canada, and the Premier wrote back on September 25, again stating his pleasure that the Prime Minister had assured him that he would have further consultation and Toronto's interests would be looked after.

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In conjunction with that, I have met with both the Minister of Finance and the Minister of State for Finance on several occasions and expressed the great concern of this government about their plans. On all of those occasions I have been assured that this was something we were blowing way out of proportion, that it was of no major consequence to the financial market in Toronto and that notwithstanding the situation, there would be consultation before anything was done.

As recently as last week, the Treasurer (Mr. Nixon) had communications with the Minister of Finance, and all along these things have been conveyed to us with a sense of assurance: "Do not worry about it. We will look after Toronto's interest."

There has been a constant, steady barrage of concern expressed by the mayor of Toronto, the Board of Trade of Metropolitan Toronto and the banking community of Toronto. All of these people are making the same statement; they do not see the necessity for doing it, but surely if the federal government is going to do it, it has to include Toronto because of its position as the pre-eminent financial centre of Canada.

Allusions have been made to the fact that we have blown another one; when we talk about softwood lumber or steel, we can include this situation. There is no relationship at all between those two issues and this one. In those issues, we are dealing in bilateral negotiations with other jurisdictions. Here we have a situation where the federal government, solely and exclusively for political considerations, has made a commitment.

It is not something where there was pressure and people were clamouring at the doors of Canada saying, "If only you would provide an international banking centre, you could solve a lot of the economic problems in this country." There was no one who felt there was any necessity to have this. As a matter of fact, over the years recognized authorities have looked at the concept of international banking centres in Canada and have found any need for it wanting. I agree; I see no reason to have this and l am not advocating that we have it.

The point is that if we are going to have it -- and the government in its wisdom has made that decision -- then it is ludicrous to designate two cities, Montreal and Vancouver, and exclude Toronto. If this is carried out, we will be the only jurisdiction in the world that has a regional international banking centre as opposed to a national one. As a result of this, we will create problems that no one needs. No benefits will accrue except in the minds of some politicians in Ottawa who think they can make some political points in Quebec and British Columbia at the expense of Ontario.

It is with this in mind that I feel we as the Legislature have to strongly state our position, and notwithstanding that the standing committee on finance and economic affairs is dealing with this, we have to make that statement now. It does not have to be the definitive statement and the only statement, but we have to do it so they will know of our concern.

In my conversations with the Minister of State for Finance -- and I have had many -- I kept asking him, "Are you getting the message?" He kept assuring me that his ear was hurting from the message he was getting, not only from me but also from the business leaders in Ontario and other cities in Canada. He was getting the message. He has acknowledged that he is getting the message but he has not responded.

Therefore, I think it is important that we take this step to give that semblance of authority that we as a Legislature in Ontario are very concerned about what this government is doing in the way of setting up regional disparities, what it is doing for what I consider to be crass political reasons, and we send this statement strong and clear.

l have no problem at all with the committee that is looking into this issue coming out with its report and reiterating what we as a Legislature say today.

Mr. Rae: I want to move an amendment to the motion of the minister which in effect is a different motion. I move that the minister's motion be amended by substituting the following therefor:

"That the Legislative Assembly of Ontario condemns the government of Canada's proposal to give further tax concessions to the banking community through its so-called international banking centres plan, and that this assembly believes that federal tax reform should benefit individual working Canadians and not further profit banks while exacerbating regional tensions in Canada."

I presented a copy of that substituting amendment to the motion to the House earlier. I want to speak to it if I may.

I said in my remarks in response to the minister's statement that I thought the government had blown an opportunity. I say this as somebody who has served as a federal member in the financial field and I have some sense of the debate that has gone on over the last decade with respect to international banking.

The Deputy Speaker: Excuse me, I am sorry: I should put a motion to the House. Mr. Rae has moved an amendment to the special resolution of Mr. Kwinter. Carry on.

Mr. Rae: I want to say that the first genuine change in Canadian banking that took place most recently was the change in the federal Bank Act which took place in 1980-81 and which led to the introduction of a number of foreign banks into Canada.

I also want to state categorically and clearly that this proposal coming from Mr. Wilson now has confused a great many people and confused them in a completely unnecessary way. If I may say so, that confusion has been fuelled by comments that have been made by the Minister of Financial Institutions (Mr. Kwinter). He has been quoted as saying that Toronto will no longer be an international banking centre or that it will be a major disaster for Toronto if we are not successful in getting this designation. He has compared it to a financial cataclysmic event which is completely unworthy of any serious observation of the scene.

What are we talking about here? We are not talking about the activities of foreign banks in Canada overall. We are not talking about the most serious revolutionary reform in terms of the fact that all international banking will have to take place in either Vancouver or Montreal and cannot take place in Toronto. We are not saying that. That is not what Mr. Wilson is proposing.

What he is proposing is that in order to attract jobs and work which is now being done in the Cayman Islands, Bahrain, Singapore, Panama, the Bahamas, the Channel Islands and in a number of other places, Vancouver and Montreal should be designated as international banking centres. What that really means is they should be designated as international booking centres. That means some financial transactions dealing with European currencies and other things that are now being booked in other parts of the world because they are sheltered from taxation should be moved to Vancouver and Montreal in order that that amount of international booking can be done in Vancouver and in Montreal.

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No less an authority than Louis Rasminsky, assisted by Mr. Lawson, who was the deputy governor of the Bank of Canada -- and Mr. Rasminsky, as we all know, has been for 50 years at the very centre of financial and international banking questions and was governor of the Bank of Canada for nearly 20 years -- no less an authority than those two individuals have stated quite clearly and categorically that the employment implication of this measure is absolutely negligible. They have also stated clearly and categorically that it will have minor costs and benefits either way and that there is no evidence to suggest either the costs or benefits will outweigh the other. The effect of their report to the government of Canada is to say it is no big deal.

We in this Legislature are left with a choice. What position do we take with respect to this designation by Mr. Wilson with respect to Vancouver and Montreal? I suggest the government of Ontario, the Premier and the Treasurer, who has been strangely silent in all these events, I must confess, have two choices about what to say.

They can say, "This is a good idea, something Canada should be aiming to do." In other words, this business is so important for Canada we should be aiming to erase taxation on certain activities so people can take advantage of it. Alternatively, they can take the position that there is no justification for that kind of tax break to the banks, no justification for that kind of tax giveaway to the banks and no reason for this kind of change to be made. The government of Ontario then has the opportunity to go across the country and say to ordinary Canadians: "This does not make any sense. It is a bad deal. It is a bad idea. It is unnecessary and unfair."

Either one of those choices would make some kind of sense to me and would have some kind of coherence. Instead, we had the statement today by the Minister of Financial Institutions and the speech he gave this afternoon. I must confess to being absolutely baffled by what the minister has said. As I understand it, his position seems to be that he does not think it is necessarily a good idea. I hope I am not misrepresenting his comments.

Part of what I heard him say was that it represented a tax subsidy and that there were real questions in public policy terms about this kind of tax subsidy; to which I can only say, if that is true, why should Ontario want to have any part of it?

One has to have a consistent position. If it does not make any sense, and if, as Mr. Rasminsky and other people say, it is not going to have enormous consequences with respect to employment, because activities will be carried out on a computerized basis by people who are already doing that kind of work in banks currently operating in various places, then what is the big deal?

It is not a question of blowing the opportunity in relationship to softwood or other things. All I am saying is I think the Premier has misplayed the hand, because nothing sounds so contradictory and so self-serving as the position Ontario is now taking.

Let us imagine being somebody working in Vancouver or Montreal. It is a big country, and we have to think about how things look to those parts of the country. One is sitting there watching the Premier of Ontario on television, and he says: "This is terrible. Toronto needs its fair share. Toronto needs to be part of the action. We are the financial capital of Canada and we want to be there. We have to be involved. We have to be part of that. We have to have that designation."

At the same time, the Minister of Financial Institutions is saying: "We do not think it is a good idea. We think it is a tax subsidy. We have real problems with it. We do not think it is the best idea in the world." Talk about mixed signals; we have the Premier and the government of Ontario saying, in effect: "We do not think it is a good idea, but if you are going to do it, we want to be part of it as well." To state it in those terms is nonsense. There are all kinds of social policies which one can imagine other parts of Canada doing and the government of Ontario saying, "We do not think that is a good idea, but if they are going to do it, we are going to do it as well."

We now have the preposterous notion that somehow to deal with this measure, if it goes through, it is the position of the government of Ontario that it will offer a competing tax advantage to international booking activities on a provincial basis.

The only effect that will have will be to raise the taxes of my constituents, of the constituents of my colleague the member for Hamilton East (Mr. Mackenzie), those of the member for Bellwoods (Mr. McClellan) and the constituents of every member in this House.

I will tell the minister quite bluntly that I think the position of Ontario should have been, "It is a bad deal not just for Toronto, for Bay Street and for banks, but also for Canada." More important than Canada as an abstraction, it is a bad deal for ordinary Canadians. Every time we give a tax break and a tax subsidy to a corporation or a bank, every time that is done, the consequence is higher taxes for ordinary people.

The members of this party are not going to support a resolution that has the effect of saying, "We think people in this province should be paying higher taxes in order to attract a kind of crap-shoot banking operation so it can come to Canada and do its business here." It is a mug's game. I must confess I am absolutely baffled by the position the minister has taken.

Let us look at the position of the banks for a moment. Let us take the Canadian banks that are engaged in international operations. All of them have offices in these various places doing this kind of international booking activity. For the Bank of Montreal, I could go through statutory tax payable going back years. It is not paying its statutory tax payable. It is paying considerably less than that in every instance. In 1985, the statutory tax payable was $207.4 million, while the actual tax paid was $190 million. For the Bank of Nova Scotia, the 1985 statutory tax payable was $222 million. The actual taxes paid were $113 million.

The Canadian Imperial Bank of Commerce's 1985 statutory tax payable was $267.7 million and actual taxes paid were $28.7 million. In other words, it paid about 10 per cent of what it was supposed to be paying because of various tax credits, tax options and tax forgiveness which the government of Canada has already provided. The Royal Bank's statutory tax payable was $337.6 million. Actual tax paid was $60.4 million. Toronto Dominion Bank had $306.2 million payable. It actually paid $137.8 million.

Our tax system is riddled with unfairness. It is riddled with the notion of tax subsidy. It is riddled with the notion of tax giveaways. The banks have been getting away with this, practically, more than any other sector in Ontario. Our banks do not pay their fair share now to the government of Ontario. Why would we as a Legislature want to turn around and say, "We want to be part of that game so we can give away part of that money, so we can end up taxing our citizens all the more."

It makes no sense to me. It offends me because I believe it is going to have the effect of hurting my constituents on balance. I also think the approach, the position the government has taken, has itself contributed to regional tension.

I think the idea is a bad one. It is unnecessary. The approach that should have been taken should have been a clean, clear approach that said: "We do not want any part of it. We think it is such a bad idea that we want no part of it."

The consequence of the position the minister has taken is twofold. First, the position he has taken will contribute even more to regional tension and difficulties between different parts of the country. That is for sure, because Ontario, Bay Street and the Premier look very greedy indeed, saying, "We want to be at that trough too." The people in Vancouver, the people in Montreal and the people elsewhere are going to look with some scepticism at Toronto saying, "Oh, you know, we do not get anything."

Compare the unemployment rate in Toronto today to the rate in Vancouver. Compare our economy here in southern Ontario with the economy anywhere else in Canada. It is very difficult to make an argument outside the confines of southern Ontario that we are somehow disadvantaged in comparison with the rest of the country. We have to face up to that fact and face up to it honestly.

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There will be other consequence of the government's action, if the government is successful in designating Toronto as another international booking centre. I refuse to use the words "international banking centre" because it is not banking activity: it is booking activity that we are talking about. If that is what takes place, it will become that much more difficult to remove the subsidy.

That is why our position should be that we are opposed to it, that we are going to fight it; that we are going to fight it across the country and that we are going to unite people across the country against this tax subsidy because it is an injustice, but it is such an injustice that we do not want to have any part of it. That ought to be the position of the government of Ontario and the Legislature of Ontario, not the position we have heard from the Premier, which is, "There is a gravy train leaving, and I want to be on it."

I would rather that we were tough, clear and hard-nosed about it and made it perfectly clear that we in Ontario are opposed to this tax deal. We think it is a lousy tax deal for everybody, for every Canadian taxpayer. We are going to fight it, we are going to fight it across the way and eventually we are going to win because it does not make any sense.

Mr. McFadden: I rise at this time to indicate our party support for the motion here today. In my experience, the federal Minister of Finance, the Honourable Michael Wilson, is a man of great ability, insight and experience in financial affairs. If one looks at his record as Minister of Finance, he has made good decisions, and the results are indicated by the strong economy we have in much of Canada. Obviously, there are regional disparities in this country, but on balance the record of our current Minister of Finance in Ottawa has been exemplary.

This, however, is a proposal that our party has some real difficulty with. The debate about international banking centres has become afflicted with a great deal of hyperbole. The member for York South (Mr. Rae), the leader of the New Democratic Party, said that in his remarks just a few moments ago.

If you listen to some of the talk from various people, informed and uninformed, you would believe that if the federal government proposal were to go ahead, Toronto would suddenly revert to a small town in which you could roll up the sidewalks. You would believe we would have no real banking centres or banks or anything else left in Toronto, that we would wind up with 50 per cent unemployment in the city and it would be a total disaster for Ontario.

I have spent several weeks as a member of the standing committee on finance and economic affairs looking at this subject. I should show the House the very extensive binder that David Bond, the researcher who is working for the standing committee, has prepared. The binder covers a whole range of matters connected with the impact of the federal proposal and the various options we should consider.

In addition to that, we have had two hearing days on the subject of the federal proposal. Last week Professor Brean of the University of Toronto was with us, together with a large delegation from the Toronto Board of Trade and the Treasurer and his staff, including the chief economist. Today we heard from George Radwanski, who conducted a recent study of the service sector in Ontario. We heard from the Minister of Financial Institutions as well as from the chairman of the Ontario Securities Commission, Stanley Beck.

If one read all the briefing materials and listened to the various speakers we have heard from, it is very difficult to determine the impact this federal proposal will have on Ontario or, for that matter, on Canada. There is an opinion being put forward by someone like Professor Brean that the federal proposal is of minor, marginal importance and represents very little in terms of job creation, economic impact or anything else. I know when l talk with federal officials, they tend to minimize the effect this kind of proposal would have on Ontario or really, it would seem, almost anywhere.

There are those, on the other hand, including the president of the Board of Trade of Metropolitan Toronto and his committee, the mayor of this city and others, who feel the federal proposal would -- downstream, at least -- have a very negative effect on Toronto and, more generally, on Ontario. The feeling that has been put forward is that this will transmit to the financial community worldwide a message from the federal government that it would like to see international transactions in the financial sector concentrated in Montreal and Vancouver to the exclusion of Toronto.

The Minister of Finance indicates that this is not what he is trying to do, but the view of a number of people, certainly from the Toronto business and financial community, is that the message will get out to the international financial centres across the world that somehow the federal government is trying to minimize or play down Toronto and to play up other communities in the area of international banking.

Having looked at it myself from the hearings, I believe the federal proposal lacks logic. Over the past 20 or so years, Toronto has steadily built up an image as an international banking centre. Over the past number of years, Toronto has developed a large number of highly skilled professionals working in the banking sector who are respected worldwide.

The information we received this morning from Mr. Beck of the Ontario Securities Commission indicated that part and parcel with that is the fact that Toronto is now the fourth-largest centre in terms of equities and stock exchange activity in the world. Therefore, it makes sense and would be logical for the federal government to develop proposals on international banking that would reinforce success. It would make sense for the federal government, in any proposals of this nature, to reinforce the strength and image of Toronto, because Toronto, in effect, is not competing with Montreal and Vancouver. When it comes to international banking, Toronto is competing against other major centres worldwide, such as Tokyo, Zurich or London.

The problem we found, though, with the federal proposal, is that by saying this, by recognizing the logic of the development of the financial services sector during the past 10 or 20 years, we are somehow trying to denigrate, play down or undermine Montreal or Vancouver.

Certainly, our party is not anxious in any way to undermine the development and the prosperity of Montreal and Vancouver. It makes good sense, if we are to have international centres, that Vancouver be an international banking centre, since logically Vancouver would service the Pacific Rim, one of the fastest growing economic regions in the world, if not the fastest growing. Vancouver is in a different time zone from Toronto. It makes sense that Vancouver would develop as an international banking centre, catering to clientele throughout the Pacific Rim. That is logical, reasonable and supportable.

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Equally, I suggest Montreal could be considered an international banking centre. It is an international banking centre. Two of Canada's five major chartered banks are headquartered in Montreal. I do not think the fact that Toronto is an international banking centre, in the generic sense of that word, militates against Montreal and its banking community going out and competing aggressively throughout the world for any amount of international financial business. I hope no one in Toronto is small-minded enough to try to deny Montreal the right to get ahead. That is not the spirit in which we are entering this debate today. We wish Montreal well. We hope Montreal prospers and succeeds as a financial centre. That can only strengthen all of Canada.

Our point is that if this proposal is going ahead, it is unreasonable and illogical to exclude Toronto from that designation. In my view, based on the evidence I have seen, if this proposal is to go ahead at all, Canada should be designated as an international banking centre. Why is it that we are selecting specific municipalities for this designation? At our hearing this morning, Mr. Beck said he could not think of a single other country that has designated within its borders one specific municipality. The various countries of which he was aware simply designated the entire country as an international banking centre, be it the Channel Islands, Panama, Grand Cayman or wherever else this particular type of designation is developed.

The problem with the proposal, as it has come down, is that it is tending to divide Canadians. It has put Ontario in a position where it looks as if we are trying to undercut Montreal and Vancouver from getting ahead. As I mentioned already, I do not believe that is the spirit in which we are entering this debate today.

It would make sense for Canada to be designated an international banking centre, if we were to go ahead with this. In that arrangement, municipalities from across Canada could compete for the type of business that might come in as a result of this designation. Why should we exclude Edmonton, Calgary, Regina, Winnipeg, Brandon, Thunder Bay, Guelph, London, Picton, Ottawa, Quebec City, Saint John, Halifax, Charlottetown or St. John's from being able to attract international banking? If banks in those municipalities were able to find nonresidents who wanted to lend money to a bank in that community, and then have that bank in turn lend out that money to nonresidents, I see no reason that those activities need only be done in certain places in Canada.

In my discussions with people from the banking sector, they have made the point they would prefer the market to govern. The impression I have from people in the financial services area is that they would prefer, if we are to have this designation at all, for it to be a Canadian designation, so that if the Royal Bank, for example, wanted to become involved in some form of international loans related to the petro-chemical area somewhere in the world, it might make sense to have that done through its corporate banking centre in Edmonton, Alberta, rather than in Toronto, Montreal or Vancouver.

Maybe somebody wants to become involved with the lending of money to assist fisheries somewhere in the world. Perhaps it makes sense to run that loan through a corporate banking centre in Halifax.

The problem with the proposal as it is now structured is that it is tending to split region from region and city from city in this country. I urge that if this banking centre concept is to go ahead, it should go ahead on the grounds that Canadian communities across this country could participate in a free market arrangement among the various banks.

The matter that the New Democratic Party motion raises is the question of further tax concessions to the banks. The impact of the federal proposal on bank taxation is quite obscure. We cannot tell from any of the material whether the banks will benefit greatly or in a very small fashion.

One thing that has not been established in all this discussion is what, if any, immediate positive economic benefit will come to anybody. We do not know if all this represents are some paper entries coming in on a computer, whether it will create one, 100, 1,000 or 10,000 jobs. The evidence indicates that the economic impact in terms of jobs may be minimal, if not almost nonexistent.

At the same time, it may involve the government giving up tax revenue, giving tax concessions that on this basis might be very hard to justify. Our party believes, as our leader stated on Tuesday in his tax reform statement, that Ontarians and Canadians are overtaxed. What Canadians need is a break in terms of their taxes. Government today is too expensive. We need to find the ways and means of getting back to Canadians more of their income. Government is collecting too much.

My worry about this proposal is whether in the end, by offering further tax concessions to banks, in effect we are denying further the ability of government to reduce taxation and to keep the deficit and spending under control. While I have some question about the way in which the NDP motion is worded, I would suggest we are prepared to support the motion on the grounds that I think the average Canadian needs a tax break today. We stated that this week and we stand behind that principle.

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It is unfortunate that this has come about in this way. This particular proposal has been around for more than a year without much intervention on anybody's part. We have had discussions back and forth. Then everything came to a head, I gather, in the past several weeks. As I said earlier when the minister made his statement before question period, this is another area in which the Premier has not been successful in achieving the results that appear to be in the best interests of this province.

We are prepared to support this motion because we think it is essential the federal government understand that Ontarians are worried about the implications of what the federal government is doing. It is not just worry, though; there is also a sense of confusion, because there are so many conflicting signals that it is hard to tell what this whole thing is about. Having said that, I think it is incumbent on this House to take a stand that on balance is clearly in the best interests of the city of Toronto, of the financial community in this province and of the taxpayers of this province and this country. Consequently, are prepared to support the motions that are before us today.

Mr. Mackenzie: Not being a financial critic, I have had some difficulty wrestling with the implications of the motions before us and the move by the federal government to set up these international banking centres. As the days go by, I wonder more just exactly what the Tories are trying to do. Some of their initiatives, from free trade to unemployment insurance revisions to pension-indexing attacks up to the sellout, as far as I am concerned, of the fishermen in the past few days, make me wonder whether they really know what they are doing.

I support the amendment my party has moved. I question exactly what is to be gained by these banking centres. Are they just tax breaks for the banks and some of the corporations? If that is the only purpose, I guess there has to be a justification. Does it create any jobs? I cannot get any clear indication that it does.

Tax breaks, I think, yes. I was interested in taking a look at some of the documents we have in the committee, which I also sit on. I looked quickly through the document on international banking centres, definition and motivation, to find out -- they are talking about the centre in Montreal -- what some of the costs are in terms of tax exemptions.

They list five: exemption from provincial capital tax; exemption from provincial corporate income tax; exemption from employer contributions to the health services fund; exemption from provincial income tax for two years for employees who have not resided in Canada prior to working for the centre; and exemption of employees from income tax on their allowances, which may equal a maximum of 50 per cent of their wages.

These additional breaks always bother me and I wonder who pays for them. It is my perception that when we give away tax concessions, somebody pays the price. I think it is usually the taxpayers of the province.

It has been interesting to listen to some of the testimony we have had from people, some of whom have been named, before our committee on the past two Thursdays. One of the things we were told very clearly a week ago was that, in effect, Canadian banks do not pay taxes now on international business or so little that it does not really amount to a hill of beans, and that there are very few restrictions on the business they can do. I have to begin to ask, why this move?

International banking centres are not really tax havens but just a way of getting around otherwise legitimate taxes or other regulations. That bothers me. We have been told there is no plus that can be clearly identified in terms of labour with international banking. In fact, the words used in testimony before our committee were "no economic significance."

With that in front of us, why are we moving? What is to be gained? I think the move by the federal government to designate Vancouver and Montreal as international banking centres -- and, of course, they have to make the tax concessions that are indicated-- is a political one. I do not think there is much doubt of that. I think the Tories are feeling under real fire in terms of some of the things they have done in this country and are catering, if you like, to Quebec and Vancouver.

Vancouver is probably a natural growth area because of the Pacific Rim and may develop in any event, but I am not sure why we are getting into this kind of a mug's game, as my leader says. It does not make too much sense to me.

In committee, it was fairly obvious the Tory members were a little bit upset about the federal initiative. Their approach seemed to be not so much to add Toronto to the list but to designate a Canadian banking centre and let the marketplace decide. That is a usual approach from the Conservatives. I do not want to see too much of a grin across the way because I am not sure my Liberal friends are any better. Nevertheless, that seems to be the Tory approach.

As I said in committee this morning, that gives me some concern. If I am right and if other witnesses that were before our committee are right, what we really have is a bit of a political game going on here. If Toronto is now really the financial centre of this country -- and I think it is; it is certainly the centre of most of the major banks and most of the major institutions and is already the main player if we go with a Canadian designation and let the marketplace decide, what is the result going to be? It is going to be obvious. It is going to be Toronto.

If this crazy suggestion was brought in in the first place as a political ploy to try to throw something to Montreal, what is it going to look like if there is a recommendation made by our committee or by this House to put a Canadian designation on it and Toronto ends up being the centre in any event? The people in Montreal are not dumb. They are going to see that as doing them in. They are not going to be able to compete, given the prominence Toronto already has. It seems to me that suggestion is not a viable one.

We could, of course, add Toronto to the list. It would make a heck of a lot more sense, in my opinion, if the federal government had never raised this suggestion. Having raised it, it would make much more sense to kill it totally.

I have another reason for saying that as well. We have been trying to find out, if we get into this bidding game, what it will cost us. It is interesting. In terms of the responses we would have to make to the federal government's position and the cost that might be involved if Ontario was trying to insist that Toronto be added to the list, it would probably cost us from $2 million to $4 million, from figures we got from the Treasurer, or up to 510 million from figures we got from a witness we had this morning, George Radwanski, the author of a study of the service sector in Ontario.

We know there is a cost to the province of somewhere between $2 million and $10 million to get into this game, for nebulous benefits, other than losing some more taxes because of the tax concession.

The answer we could not act in that committee was that it may not just be the federal government we will have to respond to in terms of these costs. There are incentives, as are outlined, if one reads some of the material we have already been given, that Quebec may be willing to make in terms of the designation of Montreal.

Do we then have to get into a bidding game with Quebec as well? What are the costs going to be? I think the consensus of those witnesses in the committee we asked this question of was, "Probably not that much, but we really cannot tell you, but there will be costs." We know there is $2 million to $10 million in terms of the federal initiative, but we do not know how much money we are going to have to respond to if we get into a bidding game on this with Quebec.

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I think it is nuts. We have a potentially bottomless pit in terms of the cost, and nobody has been able to give us a very good picture of what we are likely to gain out of it.

I do not think it makes any sense. It is an emotional fear. The only real fear is that maybe we will not be seen as sticking up for Ontario or the city of Toronto. I do not think the suggestion that has been made is a good one to begin with and I do not think we should have anything to do with it. I urge this House to support the amendment that has been moved by the leader of my party.

Mr. Taylor: I gather there is no other Liberal member who wishes to speak. I note the absence of the minister who moved the resolution, but with your permission, Mr. Speaker, I might say a few words about this.

Mr. Speaker: Go ahead.

Mr. Taylor: I see the chairman of the standing committee on finance and economic affairs is here in good form, although not in his seat. I am sure he is looking forward to a movement of his seat as time progresses and as changes are made around here in the government. I appreciate his glance, if not his stare.

Seriously, getting back to the motion of the minister, I was somewhat disturbed to listen to the scathing attack the Minister of Financial Institutions (Mr. Kwinter) made on the minister in Ottawa, Michael Wilson. The Minister of Finance has been doing a tremendous job for the country and should take a great deal of the credit for the buoyancy of the economy at this time.

There is some confusion here. What we are doing is sowing further seeds of confusion in regard to this whole issue. We heard that the pronouncement at the federal level has not been one of logic but of politics. I assume if it is politics, it is not supposed to be logical. Perhaps that makes a great deal of sense. It probably makes more sense to the public than it does to us.

I suggest that the resolution that is being advanced and propounded this afternoon is a resolution of a political nature. It is politics that the provincial government is playing to ensure a place in the debate that is going on in Canada today and to ensure that if there is any fallout that might be helpful to the provincial government, it will capture some of it. This whole process is political.

Let us focus on what we are talking about with respect to international banking centres. We are talking about banking transactions and deposits made in this country by nonresidents. We may very well be talking about foreign loans to any other place. The minister knows and I know that those transactions are now being booked in jurisdictions where the tax structures are different. They are international banking centres in that sense. In a computer-speed world where money moves as fast as electricity or the speed of light, there is no problem in booking that transaction in the Cayman Islands, the Jersey Islands or Panama. That is what is happening now.

We hear about a loss of revenue here. There is no loss of revenue, because the transactions are being booked elsewhere, in any event. If this legislation comes in at the federal level and these two centres that are designated become international banking centres, there will still be no revenue for Canada, because the tax changes will exempt them in that context. There really is not any net loss.

If we are talking, as the New Democrats are, about ensuring that the banks not receive further tax exemptions and that these moneys be given to the ordinary man on the street, this is not accurate. It is factually incorrect. It may be wishful thinking, but I do not think very much is going to happen in that regard. I have a great deal of compassion for the ordinary man on the street, as we all do. If one wants to be critical of the banking institutions as they function today, if one wants to get into banking operations or activities -- the service charges and some of the practices in terms of extracting fees from the ordinary person dealing with the banking system -- then I am very sympathetic. Frankly, sometimes some of us feel fleeced when we see what the banks are extracting for their so-called services today.

The comment has been made that the domestic population may be assisting the banks in making up for some of their foolish overseas investments. I do not want to engage in that type of debate. We are not talking about domestic banking at the moment; we are talking about establishing international banking centres in Canada so foreign transactions can be booked here and not suffer taxation, can be exempt as they are in some other jurisdictions.

I cannot see any real change taking place. I do not think we are going to see a great shift to Montreal or Vancouver because of this action. I do not think we are going to see a great many jobs generated and I do not think we are going to see a great many jobs lost. The evidence, as I heard it from persons coming before the standing committee on finance and economic affairs, seemed to substantiate that fact.

However, we still have to deal with the problem of optics, the signal, as it has been put, going out from Ottawa to the world. Members should remember we are talking about a single marketplace. We are talking about a world marketplace in money matters. We cannot be parochial in these things. I do not think we can be protectionists in banking any more than in any other area. We have to think of that world marketplace. It is important for our banks to be able to compete in that world marketplace. If those bookings that now take place offshore can be brought to this country, that will assist the banking process in some way, no matter how small. It may make the banks more efficient in some matters. It may enable them to give a little better service in some way. If that can be accomplished, so much the better.

What troubles most of us is that Ottawa has seen fit to single out two cities of this great country of ours and say, "If there is any new business that is to be decoyed from offshore, then the attraction should be Vancouver or Montreal." That hurts me somewhat, although not because I have any particular affinity for Toronto.

Toronto, there is no doubt about it, is the financial centre of Canada now. It is strong and it is growing; it is becoming stronger. If there is the shift of a financial centre, it is a historical imperative to choose to create that shift. It is international forces at work. As we see the centre of gravity shift somewhat in an economic sense from London to New York to Tokyo, we are now seeing a shift in North America westward. As that occurs, I think that in a natural sense Vancouver will take on a new importance.

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However, to single out two cities, again as I commented in committee this morning, it is a difficult thing for a Prime Minister of this country to try to balance the nation so that we have equality of opportunity across a vast land. We know within Ontario itself the regionalism that takes place. We are aware of and have participated in discrimination in terms of programs to accommodate different regions of the province where job generation and industrial settlement are important.

We have tried, through a series of government actions, to decoy development away from Metropolitan Toronto and give the rest of Ontario a chance. Maybe when we look at the banking picture, when we look at the diversity of development across a land so much more regionalized than Ontario, we must take on a larger perspective and we must have some understanding for the motivation behind this act. I happen to believe the act would be one more of optics than of substance.

I happen also to believe that the country, in a financial sense, should be treated as one. If we are going to open up the doors of Canada to accommodate international banking centres, then the country as such should be opened up, as any other country in the world has opened up to accommodate this type of financial transaction.

I have made the statement before, as late as this morning, that I remember only so vividly the debate that went on in regard to our constitutional change. Mr. Speaker, you were here, and I think you appreciated the arguments that were made in regard to the Constitution being brought back to Canada from Westminster and the constitutional change that took place, the great debates of that period. We discussed the Charter of Rights and Freedoms. We discussed the need to look at Canada as a country and to ensure the free movement of goods, services and capital right across this half of the North American continent. When we looked at that, I think we had some idea that we were Canadians first.

I know that regional disparities and differences were looked into at that time. Mention was made of giving job preference to provinces where they needed employment, so that if there was drilling, for example, off the shore of Newfoundland, Newfoundlanders would be given the first opportunity of those jobs; a market would not be created for Ontario or Quebec labour. We had an appreciation of those domestic problems, province by province and region by region.

When we talk about international banking, it is essential that we look upon the country as a whole. I would very much like to see Canada as a whole designated an international banking centre, as other countries are. The minister has pointed out that it is unique in the world to designate a single city or more than one city as an international banking centre. I do not think we necessarily want to be known for pioneering a new phenomenon in international banking centres.

It is not a question of Toronto trying to grab more and it is not a question of British Columbia or Quebec thinking Toronto is being parochial and must look after itself to the exclusion of everyone else. What determines the vibrancy, the vitality, the energy and the growth of a centre is the economic activity.

A lot of functions will determine where best to locate. The element of time zones has already been mentioned. Time zones have been an explanation for shifting from New York to Los Angeles, for example, in the United States, with the greater emphasis on the western part of the continent. That may very well happen in Canada with Vancouver, but in my view those market forces will and should determine the efficiencies and locations of these centres.

It is for some of those reasons that I feel compelled to look at this resolution. I do not want to condemn the federal government, because I think it was trying to give a message that it thinks and cares about Vancouver and Montreal and that Toronto does not need anything extra. Toronto is going to grow regardless of this. At the same time, in this world we deal in perceptions. If you look at the stock market today, you will see what the perceptions are, the gyrations that are taking place, the real public reaction and the hard dollars that are being invested in that. Hype, whether political or media hype, certainly creates an environment, and in a small global market today -- the world is very small -- it is important to ensure that the wrong messages do not get out.

That is the minister's concern. We had an opportunity to question the minister this morning, though I thought he was using somewhat extravagant language in characterizing his good friend Michael Wilson. Nevertheless, I may say the federal minister speaks very highly of our provincial minister. I am sure it was just the heat of the moment or that point of passion that may have exacted from the Minister of Financial Institutions a little hyperbole that would not otherwise have been there.

I am inclined to support the spirit of the motion that was advanced by the minister. but it is not just a matter of adding Toronto but a matter of opening up the country. Facetiously I mentioned county towns in my own riding, Picton and Napanee; yet it was not so facetiously in that they too are a part of Ontario and Canada. If the opportunities are there, then there should be equality of opportunity to take advantage of that environment.

While I subscribe to the spirit of the resolution that has been advanced by the Minister of Financial Institutions and while I sympathize with the man in the street -- the little man, as most of us are -- I am inclined to say: "What is the fuss all about? What do we want to do anything for? Leave it the way it is."

That amendment is somewhat empty, in my view, in that there is not any tax revenue being generated now, because Canada is not being used for this international business that is being conducted. They are using Panama, Jersey Island, the Cayman Islands and so on. That revenue is not there, and that is why it is not being taxed. Now we are saying that if one wants to do business here, we still will not tax it; so the net balance is zero in any event.

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Actually, I have sympathy with both the resolution and the amendment to the resolution. I would take from this -- and in an ecumenical spirit -- that Ontario as a whole is not looking for advantage; it is looking to be treated like any other province. I would be inclined to be supportive of both.

When the voting comes, and this being a political exercise -- Mr. Speaker, you have some idea of politics, having sat in that chair and in this House for so many years -- again, it is more optics. One of the things I have learned around here after some years is that one should not take question period too seriously. One never wants to give a serious answer to a question because maybe that is not what is looked for. Again, it is the process, it is the perception that comes out of the interplay. We are not always factually accurate, and there does not seem to be that desire to be so.

I wish someone could consolidate the motion and the resolution in some way. I do not think there is really much difference in terms of the parties in regard to the temperament of the members. We had a concern in terms of singling out. In singling out, you discriminate, and when you discriminate, you divide. When you divide, then you polarize prejudice. You have that conflict of opinion. In one nation, I do not think we need that.

While the federal exercise has been accused of being a political one, I think that accusation may be accurate. At the same time, something good should come from a political resolution. It should send messages to those other parts of the province that felt they did not have the same advantages, that now they do or that they are wanted and cared for.

I am afraid there might be some backfiring, if I can put it so bluntly, in regard to that political judgement, if that is what it is. I have more fear for division than I have a claim for political advantage.

I would join the House in transmitting a message to Ottawa that we should be careful and cognizant of the importance of Canada as a whole in all its aspects, and to reconsider its legislation to ensure that the country as a whole is treated in a fair and evenhanded way so that there is no region of this country that can claim it has been served less well than any other.

I appreciate the opportunity given to me this afternoon to voice those few views in regard to this resolution.

Mr. McClellan: For the sake of procedural nicety, I want to revise the amendment that was put forward at the beginning of the debate by the New Democratic Party; so l will withdraw the amendment to the motion.

Mr. Speaker: I believe it was the member for York South (Mr. Rae) who placed the amendment. Therefore, it would have to be the member for York South who withdrew it.

Mr. Rae: With the approval of the House in terms of procedure, I would like to clarify the original amendment and say that I move, if necessary, seconded by my House leader, that the motion standing in the name of the Minister of Financial Institutions be amended by deleting the words following "Canada" in the second line and adding "in giving further tax concessions to the banking community through its so-called international-banking-centres plan, and that this assembly believes that federal tax reforms should benefit individual working Canadians and not further profit banks while irresponsibly provoking regional tensions in Canada."

I hope the House will agree to that.

Mr. Speaker: Just to keep it neat and tidy, I understand the member for York South withdrew his original motion. I am just not sure whether it is in order for the member to speak again. Just to keep it tidy, would it be better if the member for Bellwoods (Mr. McClellan) were to move it?

Mr. Rae: I do not want to start over again.

Mr. McClellan: I would be happy to so move, but I have given my only copy to the table, which will be, I am sure, read as read.

Mr. Speaker: Mr. McClellan moves that all the words after the word "Canada" in the second line be struck and the following words substituted --

Interjection.

Mr. Speaker: I really am not certain exactly what words you want after the word "Canada." Maybe the member for Bellwoods could read it again into the record.

Mr. McClellan: I move that the motion of the Minister of Financial Institutions be amended by deleting everything after "of" in the second line and substituting therefor the following words: "Canada in giving further tax concessions to the banking community through its so-called international-banking-centres plan; and that this assembly believes that the federal tax reform should benefit individual working Canadians and not further profit banks while irresponsibly provoking regional tension in Canada."

Mr. Rae: "While exacerbating."

Mr. McClellan: "While not exacerbating."

Interjection.

Mr. McClellan: "While exacerbating regional tensions in Canada."

Mr. Speaker: Mr. McClellan moves that the motion be amended by deleting the words following "Canada" in the second line and adding the following: "in giving further tax concessions to the banking community, through its so-called international-banking-centres plan; and that this assembly believes that federal tax reform should benefit individual working Canadians and not further profit banks while exacerbating regional tensions in Canada."

I have a little difficulty. I am just wondering, is that really changing it in any way?

Mr. Rae: Changing what?

Mr. Speaker: Changing the original one.

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Mr. McClellan: The motion is to delete everything following the word "of'' in the second line and add or substitute therefor the words "Canada in giving," etc. That eliminates the "Canada" with an apostrophe and makes it grammatically correct.

Mr. Speaker: Are all the members aware of what is taking place here? I do not really think I am. It says, "I move that the Legislative Assembly of Ontario regrets the action of the government of Canada in giving further tax concessions to the banking community through its so-called international-banking-centres plan," etc., the same as before.

It appears to me that it is exactly the same amendment.

Mr. Harris: Then the government will have no problem with it, since it is exactly the same.

Mr. McClellan: I will speak briefly to the amendment. Very briefly, the difference between our amendment and the government's motion is that the government is calling for an extension of the tax giveaway program of the federal government and the amendment states its opposition to that program.

Mr. D. R. Cooke: On a point of order, Mr. Speaker: As I understand it, this amendment is doing exactly what we were concerned about before. In fact, I thought that was what we were debating earlier, but obviously the member for Eglinton (Mr. McFadden) was confused. He spoke to both motions.

I draw to your attention page 233 of Beauchesne, which says, "An amendment may not be proposed to insert words at the commencement of a clause with a view to proposing an alternative scheme to that contained in the clause or to leave out from the first word to the end of the clause in order to substitute other words or to effect a redrafting of the clause, such amendments being in the nature of a new clause."

We have an entirely new motion, an entirely different motion, that condemns all the federal initiatives, whereas we criticize the federal initiatives and make a proposal that Toronto be included in those initiatives. It is an entirely different motion and the motions should be debated separately.

I suggest the member for Bellwoods simply propose an amendment that inserts his clause in the beginning of the motion but leaves its wording intact.

Mr. McClellan: As I am sure the member is aware, we are dealing with a substantive motion pursuant to standing order 40 of the standing orders of the Legislative Assembly. It is exactly the same as a motion in reply to a speech from the throne or a budget address. It is the normal procedure for opposition parties to amend any or all parts of the motion that is traditionally placed by members of the government. It is also traditional that the debate, in reply either to the speech from the throne or to the budget, ranges over the motion, amendments and any subamendments, but the voting will take place on the amendment I have put.

Mr. Harris: It is not simply a matter of replacing words from "I move." I think he has explained the amendment very well now. The original motion, "I move that the Legislative Assembly of Ontario regrets the action of the government of Canada" is a very substantial part of the motion. The amendment is not changing that. It is agreeing with that, but it is altering something from there on. Surely that is what happens in throne speeches and in budgets. I am sure most will agree that is entirely in order. I suggest we get on with it.

Mr. Speaker: I am still having a little trouble. As I understand it, an amendment can add to or take from, not change the content of, the motion.

Mr. Harris: This deletes part of it and replaces it with something else.

Mr. Speaker: Okay. We have had the amendment. Are there any comments? Is there further discussion?

Mr. D. R. Cooke: What are we doing? I do not understand. Did you rule on my point of order?

Mr. Speaker: May I ask for a moment?

Hon. Mr. Nixon: We have no objection to your ruling. I appreciate the member for Kitchener (Mr. D. R. Cooke) bringing to the attention of the Legislature the admonitions of Beauchesne, whom we normally follow; but you have ruled on this matter, which is good enough for us.

We hope the motion eventually carried by the House will be substantially critical of the initiative taken by the government of Canada, which we think does not reflect reality as far as the banking position of the city of Toronto is concerned relative to the other cities in Canada. We have said repeatedly that we welcome fair and understandable competition with any centre in the world, and certainly within Canada. Competition of a healthy and friendly nature, particularly with Montreal, has been a long-standing attribute of the financial community of Canada. Naturally, I have followed this for many years and that has been my observation.

The fact that the initiative taken by the government of Canada tilts the level playing field -- a phrase we in finance use from time to time -- is a matter of concern expressed in this motion. But let us grant the government of Canada the right to enter into initiatives on a fair and equitable basis to improve employment prospects and the utilization of banking facilities here. Anybody who somehow thinks that flies in the face of the common man surely is indulging in the kind of glassy-eyed, doctrinaire socialism that should have no place in the kinds of discussion we would have.

The fact that there is some weird indication the Progressive Conservative Party is going support it is just a further indication that the member for Brantford (Mr. Gillies) has seized control of the levers of power in the Progressive Conservative Party and that he may want to appeal to the boys in the upstairs room of the Canadian Auto Workers office in Brantford. I do not blame him under the circumstances he appears to be facing, but that is another matter.

How the leader of the Conservative Party and the member for Nipissing (Mr. Harris) can take leave of their Tory background is something difficult for me to understand. What will Colin Brown say? I know the Leader of the Opposition worries about it, but it looks as if he has been superseded.

The argument has been made very well by the leader of the New Democratic Party and other spokesmen who may have taken part in the debate when I was not present -- I believe he made the argument -- that in these times of tax reform it seemed strange that the government of Canada was going to intrude this other niggling little thing which was going to have some effect or not. That is an argument worth making and one that appeals to me, as I am interested in the purity of tax reform and bringing fairness and equity to all.

However, we are also interested in recognizing the government of Canada's pre-eminence in this area as long as it acts fairly and equitably for all concerned. If it wants to give some sort of tax concession to people who are going to do international banking, and the Minister of Finance of Canada has indicated that this will be new business, why should we thrust it away and say it should not come to Canada, even if it comes from Panama or the Channel Islands or somewhere?

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Mr. McClellan: Any old stupid idea from Mulroney is okay with you.

Hon. Mr. Nixon: Okay, but that is the government there and no resolution here is going to force it to make any change. The only one that will have any impact is one that, apparently, the Progressive Conservative Party is rejecting, one that calls for fairness and equity in treating Ontario and Toronto as it should be treated as the pre-eminent financial centre.

As a matter of fact, somebody made the proposal, and I thought it was a good one -- actually I made the proposal -- that we pass a resolution designating Toronto a universal banking centre or something such as that. It might be we could do something to improve the situation. We do not want to end up paying subventions to banks or Merrill Lynch or anybody such as that, but we are in a position where we want to see that the financial capability of the people who are living and working in Toronto is not put down by a decision made in another place and at another level.

The motion as put forward by my colleague the minister is an effective one. It should be responded to positively by thoughtful members on all sides. If the Progressive Conservatives reject it and accept the alternative, which is simply doctrinaire socialism mouthing anti-bank, pro-worker phrases that are totally meaningless, that is up to them. I have a feeling there will only be a handful here anyway because it is Thursday afternoon. We may have to vote at a more convenient time, which presumably is in the hands of the gods.

There have been many effective spokesmen on behalf of Toronto and Ontario: The Premier, the minister himself, the Treasurer -- in spite of the comments made by the leader of the third party, which, as usual, I found stinging -- and not only them, but also various financial leaders in downtown Toronto. The fact that they might be seen by other observers as somehow being selfish should be rejected out of hand. Obviously, they are thinking not just of the greater good of Toronto but also of the recognition of Toronto as an international banking centre, which it is and will be in spite of the misguided initiative of the government of Canada.

I ask that the historic judgement of the Progressive Conservative Party, which stood it in good stead for five or 10 of the past 42 years, come into play. We expect they will not support the amendment but will support the rational approach put before this House by the minister who has led Ontario and the business community in their attempt to see that this initiative not go forward.

With the passage of this motion, it is very likely the government of Canada will reconsider. I hope they are not going to play games with the other opposition party in a matter of such importance.

Mr. Gillies: The spectacle we have just witnessed in this chamber is nothing short of bizarre. The once-reformist ethic that motivated my friend the Treasurer for lo these many years, and that propelled his distinguished father through this chamber for his lengthy career here, now has become a defender not only of Bay Street lawyers, as we saw earlier this week, but also of banks. This will not sit well around the stove at Earl's Shell where I am sure an argument can and will be made that the village of St. George should be designated an international banking centre and that it would stand on its merits vis-à-vis any other municipality in the country.

The Treasurer quite misreads the feelings of the people on this issue. He is standing on principles that I do not believe are natural to him. Regardless of whatever sentiments are expressed by the unelected government of Ontario sitting opposite, the great city of Toronto will remain an international banking centre --

Mr. Ferraro: We have as many members as you have.

Mr. Gillies: --regardless of whatever my friend from Guelph or my friend the member for Downsview (Mr. Cordiano) or anyone else has to say about it. This is history; this is fact, and it will continue to be the case.

We have this headlong rush of ministers such as the Treasurer and his good colleague the Minister of Financial Institutions -- who I always thought was a good fellow -- who have recently made the member for Welland-Thorold (Mr. Swart) look like a moderate on the question of car insurance because of the decidedly pro-business and anti -- what is the word I am looking for? -- anti-consumer type of stands they are taking.

It is historically consistent for the Progressive Conservative Party in this province to stand up for the aspirations of ordinary people. The revised amendment put forward by the third party, which will be supported by our party, is an expression of the will and aspirations to a fair deal of the ordinary people of this province. I know that deep down in his heart my friend the Minister of Financial Institutions is much more concerned about tax breaks for ordinary people than he is about tax breaks for banks.

Mr. Ferraro: Mr. Speaker, on a point of order: I want to correct the record. The member of the Conservative Party referred to my riding as Guelph; it is Wellington South.

Mr. Gillies: Pardon me. That is a well-deserved admonition on my part. My apologies to the member for Wellington South.

The amended motion that is before us is an expression of the sentiments of ordinary people and their desire for a fair break. There is no hesitation or inconsistency on the part of our party to support it, as opposed to the decidedly pro-bank and international financial institutional community proposal put forward by the government, more for political purposes than substantive ones, I would suggest, from its wording. We will vote proudly for the amended version of this motion.

Mr. Callahan: The Tories have gone pinko.

Mr. D. R. Cooke: McFadden's head is hanging in shame.

Mr. Speaker: The member for Brantford has the floor.

Mr. Gillies: My friend the member for Eglinton cannot wait for the opportunity to stand up for the little guy in this regard.

In conclusion, I would suggest to the Treasurer that even Colin Brown, with whom I have been known to have my disagreements, would be far more concerned about the ramifications of this move for small business and the little guy than he would be for the five chartered banks in this country.

Mr. Speaker: The Minister of Financial Institutions originally moved a resolution. I believe you all have a copy of it. The member for Bellwoods has moved an amendment. I hope you are all aware of that.

1745

The House divided on Mr. McClellan's amendment to Mr. Kwinter's motion of resolution, which was agreed to on the following vote:

Ayes

Allen, Andrewes, Barlow, Bernier, Breaugh, Bryden, Charlton, Davis, Dean, Fish, Gillies, Grande, Grier, Harris, Jackson, Johnson, J. M., Johnston,
R. F., Laughren, Leluk, Mackenzie, Marland, Martel, McClellan, McFadden, McNeil, Morin-Strom, Philip, Pierce, Rae, Reville, Rowe, Sheppard, Shymko, Sterling, Swart, Warner, Wildman, Yakabuski.

Nays

Bossy, Callahan, Conway, Cooke, D. R., Cordiano, Curling, Eakins, Elston, Epp, Ferraro, Fulton, Haggerty, Hart, Kwinter, Lupusella, McGuigan, Miller, G. I., Munro, Newman, Nixon, Offer, O'Neil, Peterson, Reycraft, Ruprecht, Smith, E. J., Sweeney, Van Horne, Ward, Wrye.

Ayes 38; nays 30.

Mr. Speaker: Order. There is still another vote to be taken if I can have your attention.

Is it the pleasure of the House that Mr. Kwinter's amended resolution carry?

Motion agreed to.

BUSINESS OF THE HOUSE

Hon. Mr. Nixon: It might be appropriate if I take a moment to indicate the business of the House for next week, although there are eight minutes left and the Premier's estimates are pending.

On Monday, February 2, we will consider the estimates of the Lieutenant Governor, the Premier and Cabinet Office.

On Tuesday, February 3, and Wednesday, February 4, we will deal with legislation as time permits in the following order: Bill 154, pay equity; Bill 127, surveyors; Bill 170, pension benefits, Bill 176, nursing homes; Bill 177, health facilities; Bill 189, mining tax, and Bill 156, securities.

On Thursday morning, February 5, we will consider private members' business standing in the names of the member for Durham East (Mr. Cureatz) and of the member for Sudbury East (Mr. Martel). On Thursday afternoon, we will complete the estimates of the Lieutenant Governor, the Premier and Cabinet Office.

The House adjourned at 5:52 p.m.

January 29, 1987

ORDERS OF THE DAY

PRIVATE MEMBERS' PUBLIC BUSINESS

AUTO PACT

DAY CARE

AUTO PACT

DAY CARE

DAY CARE

AFTERNOON SITTING

MEMBERS' STATEMENTS

NATIVE FISHING AGREEMENT

NORTHERN REGIONAL TREATMENT CENTRE

FESTIVE HOLIDAYS

CREDIT CARDS

AUTOMOBILE INSURANCE

NURSING HOME BEDS

WINTER CARNIVAL

MEMBER'S ANNIVERSARY

PAPER MILL

STATEMENTS BY THE MINISTRY

THERAPEUTIC ABORTION SERVICES

HOUSING FOR THE DISABLED

INTERNATIONAL BANKING CENTRES

RESPONSES

THERAPEUTIC ABORTION SERVICES

INTERNATIONAL BANKING CENTRES

HOUSING FOR THE DISABLED

THERAPEUTIC ABORTION SERVICES

HOUSING FOR THE DISABLED

INTERNATIONAL BANKING CENTRES

ORAL QUESTIONS

COUNTERVAILING TARIFFS

TECHNOLOGY FUND

FREE TRADE

PAPER MILL

COUNTERVAILING TARIFFS

THERAPEUTIC ABORTION SERVICES

LOTTERIES

PAPER MILL

TECHNOLOGY FUND

GASOLINE TAX

PLANT SHUTDOWN

COMMUNITY ARENAS

MINISTER'S TRIP

ENVIRONMENTAL ASSESSMENT

DETROIT INCINERATOR

COUNTERVAILING TARIFFS

AFFORDABLE HOUSING

RECREATIONAL COMPLEX

PETITIONS

DIALYSIS UNIT

SERVICES FOR CHILDREN

ICE FISHING

MOTIONS

COMMITTEE SUBSTITUTIONS

COMMITTEE SITTINGS

INTRODUCTION OF BILL

CROWN WITNESS PROTECTION ACT

ORDERS OF THE DAY

INTERNATIONAL BANKING CENTRES

BUSINESS OF THE HOUSE