Legislative Assembly of Ontario

[Report continued from volume A]

The House resumed at 1900.

POLICE SERVICES AMENDMENT ACT, 1991 / LOI DE 1991 MODIFIANT LA LOI SUR LES SERVICES POLICIERS

Mr Hampton moved third reading of Bill 66, An Act to amend the Police Services Act, 1990.

M. Hampton propose la troisième lecture du projet de loi 66, Loi portant modification de la Loi de 1990 sur les services policiers.

Hon Mr Hampton: As I noted on second reading, this is a technical amendment designed to remove any doubt about the jurisdiction of boards of inquiry constituted before 31 December 1990. It reflects the policy position adopted by this House in the Police Services Act whereby members of boards of inquiry may continue in office to finish the work already assigned to boards which they started before their appointments as panels members expired.

I appreciate the support of the House for this bill and I am grateful that together we will have reduced uncertainty and avoided the need for litigation on this issue.

Motion agreed to.

La motion est adoptee.

BIG SISTERS OF SUDBURY ACT, 1991

Mrs Mathyssen, on behalf of Ms Murdoch, moved second reading of Pr11, An Act to revive The Big Sisters Organization of The Regional Municipality of Sudbury.

Motion agreed to.

Third reading also agreed to on motion.

SOUTH OTTAWA SERVICES FOUNDATION, INC ACT, 1991

Mr Daigeler, on behalf of Mr Grandmaître, moved second reading of Bill Pr13, An Act respecting South Ottawa Services Foundation, Inc.

Motion agreed to.

Third reading also agreed to on motion.

MAY COURT CLUB OF OAKVILLE ACT, 1991

Mr Carr moved second reading of Bill Pr69, An Act to revive The May Court Club of Oakville.

Motion agreed to.

Third reading also agreed to on motion.

LONDON FOUNDATION ACT, 1991

Mr Carr, on behalf of Mrs Cunningham, moved second reading of Bill Pr71, An Act respecting The London Foundation.

Motion agreed to.

House in committee of the whole.

LONDON FOUNDATION ACT, 1991

Section 1:

The First Deputy Chair: Mr Carr moves that paragraph 3 of subsection 3b(2) of the act, as set out in section 1 of the bill, be amended by striking out "Elizabeth Gervin" in the first line and substituting "Elizabeth Girvin, Glen Johnson."

Motion agreed to.

Section 1, as amended, agreed to.

Sections 2 and 3 agreed to.

Bill, as amended, ordered to be reported.

On motion by Miss Martel, the committee of the whole House reported one bill with a certain amendment.

THIRD READING

The following bill was given third reading on motion:

Bill Pr71, An Act respecting The London Foundation.

1910

EMPLOYMENT STANDARDS AMENDMENT ACT (EMPLOYEE WAGE PROTECTION PROGRAM), 1991 / LOI DE 1991 MODIFIANT LA LOI SUR LES NORMES D'EMPLOI (PROGRAMME DE PROTECTION DES SALAIRES DES EMPLOYÉS)

Resuming the adjourned debate on the motion for second reading of Bill 70, An Act to amend the Employment Standards Act to provide for an Employee Wage Protection Program and to make certain other amendments.

Reprise du debat ajourne sur la motion de deuxième lecture du projet de loi 70, Loi portant modification de la Loi sur les normes d'emploi par creation d'un Programme de protection des salaires des employes et par adoption de certaines autres modifications.

The Acting Speaker (Mrs Haslam): I believe the member for Brampton North had the floor when we finished.

Mr McClelland: Much has been said about this bill over the past few weeks, and certainly with the amendments that will be more formally introduced when this bill goes before committee, a great deal of the bill has been changed. With the debate that ensued on 30 May of this year, when I had an opportunity to speak to some of the concerns, I want to say very candidly that I appreciate the response of the minister and the fact that some amendments were forthcoming.

When the minister made the statement in the House with respect to his amendments, I indicated at that time that I felt, and I still maintain the view, I say in all candour to the minister in his presence here this evening, that it was indicative of a fundamental problem with the whole process with respect to the development of Bill 70. I think it calls into question the consultative process that is espoused by this government.

It was said from the outset, and I notice the member for Chatham-Kent spoke at length on 30 May about the consultation that had taken place. I said at that time it stretches credibility to suggest that the business community and the non-profit and charitable sectors had been consulted on this legislation. It seems to me they were consulted after the fact, and the consultation was really initiated by them. It seems to me that, given the history of events with respect to this bill, there was a furore; there was a grass-roots movement with respect to the implications of Bill 70. Only after that was initiated by the business community, by people in the non-profit sector, did the so-called consultation take place.

I know very well what this government deems to be consultation from time to time. I heard an example just this morning, where a phone call setting up an appointment was said to be after the fact while we consulted with this government. That is not consultation. Consultation is sitting down and trying to have an exchange of ideas, an honest exchange of viewpoints even if they are differing, and making some sort of honest attempt to understanding and exchanging ideas and maybe coming to some common ground and some meeting. I suggest fairly clearly that the history with respect to this legislation calls that into question.

I am not privy to all the consultation that took place. It has been asserted by honourable members opposite--and I have no reason to question that they are all honourable members--that much consultation took place. But I think the extent of that is very questionable. I repeat my comments of 30 May that I think the history speaks for itself. Soon after this legislation was tabled, soon after the business community became aware of the implications and soon after the non-profit and charitable sectors of the province became aware of what was happening, they had input of their own initiative and of their own making to the minister, and changes were forthcoming.

Initially, this evening I would like to make it very clear and emphasize that wage protection is important. I think that goes without saying, but it is necessary for us to go on the record and say very strongly that we make a clear statement that we believe in that principle. When workers have earned money, they ought not to be prevented from collecting what is due to them in a timely and effective manner. Some sort of employee wage protection program should be a cost of doing business in Ontario.

I would venture to say that the vast majority of responsible businessmen and businesswomen in this community have no problem with that and accept that premise and indeed would want that to be the case. They would want to enjoy good, healthy employer-employee relationships. Even in difficult times they would look to their employees and say, "Let's work this out; let's tough it out together," and come to a solution and save a faltering business or a business that may be in trouble. I do not believe Bill 70 is the most efficient means, nor is it the least drastic means, of achieving this very important goal.

Let's take a brief look at the law as it affects businesses that may be insolvent or bankrupt in the province. Bear in mind that this legislation will only affect, as I understand it, businesses that are incorporated under the Business Corporations Act. I say in all candour, if I were running a business and I had some concerns about legislation that was forthcoming, I would just simply have letters of continuance and flip my business under the BCA. I would avoid it if I had those concerns.

The crux of the issue and the way to cover this is through the Bankruptcy Act. We all know in this House that is federal legislation. I am sure the minister is very delighted and pleased that his colleague in Ottawa has responded and made a commitment, in fact has tabled in the House of Commons in Ottawa legislation that would have significant changes to the Bankruptcy Act. That to me is the optimal means of achieving the ends and the very laudable goals of Bill 70, because the Bankruptcy Act is indeed the problem. It is, so to speak, the wrench in the works. As we all know, the Bankruptcy Act sets out the prioritization of claims, and it is the Bankruptcy Act in its current form that really disadvantages the unpaid employees, compared to other claimants, upon dissolution of a business entity.

The current government looks to the Employment Standards Act, through Bill 70 and through amendments to the act, as the way of achieving the goal it has in mind. What does Bill 70 set out even with the proposed amendments? Within Bill 70 as amended, there is an expanded definition of wages. Directors previously were not liable for termination of eight weeks or severance, 26 weeks' pay. This could increase the liability of up to $20,000 per employee for directors under Bill 70.

Ontario's Business Corporations Act only makes directors liable for wages. Bill 70 extends liability, and I think it is important for people in the business community to understand that. It extends liability to shareholders, potentially, who act as directors because of a unanimous shareholders' agreement, which gives the shareholders all the rights and responsibilities of that director. I think it is very important to understand that in terms of implications for shareholders. The imposition of personal liability very well may, and I suspect will, deter qualified advisers from becoming involved as directors in companies that are experiencing financial difficulty.

Bill 70 is in my view an overreaction. It catches people who had never expected to have liability. When I say "expected," I talk in terms of a reasoned, thoughtful business decision by people who had entered into a business enterprise based on the expectations that were clearly set out. Directors and shareholders operating under a unanimous shareholders' agreement accepted those positions based on a certain set of expectations and circumstances. It is clearly unfair to change the environment retroactively and still hold these people responsible under an expanded liability.

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Given the new circumstances that Bill 70 would bring to bear on the business climate in this province, I believe many of these directors would not have accepted the position in the first place because of the level of potential personal liability involved or, alternatively, they would have accepted those positions only if they were guaranteed that liability insurance was being paid for them or that they were compensated for the additional risk incurred in some other manner.

Clearly, many of us enter undertakings and enterprises in life based on a risk-benefit analysis. People entered businesses; they set them up. They became shareholders and accepted responsibilities within the corporate sector based on a set of expectations. There is no doubt in my mind that many of these people will come before committee and express those concerns to the members of all three parties, who will be sitting in the standing committee on resources development this summer to hear the concerns coming from the public with respect to Bill 70. I urge members to listen carefully to those concerns.

It seems to me that a number of suggestions have been made in the past as the concept of wage protection was initiated. It is safe to say that many people within the Ministry of Labour suggested that a stand-alone interim provision was really the route to go. To bring in Bill 70, in terms of changing the Employment Standards Act, setting it up was not the most advisable route to go. I do not want to belabour the point this evening--we have a lot of business to cover and members have been very patient with the proceedings here today--but as this goes to committee members, will hear from countless people, if they are given the opportunity to present, how they would endorse the concept but feel very strongly that the mechanism by which the government is seeking to impose its view with respect to wage protection is inappropriate and fundamentally unfair.

Failure to comply with the provisions under the legislation could result in a fine of up to $50,000. I think that ought to be reconsidered. It is an extraordinarily hefty penalty. I know that is the maximum and the variety of circumstances would be taken into account when the adjudicator, whoever he or she is, determines the level of the fines to be levied in the cases where the legislation was transgressed. But surely it is important to know that in many cases people who potentially would be fined for failure to comply did not set out to have their companies go under.

As I looked back through Hansard, I was really concerned; I said in my comments on 30 May that I was not convinced the Minister of Financial Institutions really meant what he said, because of the way he characterized the business community, the corporate sector, and I quote: "The corporate sector in this province would prefer to say that no individual is responsible and that no individual should be liable."

I beg to differ, with great respect to the Minister of Financial Institutions. I do not believe the vast majority of business people, men and women, feel that way at all. I believe that they are responsible and that they enter into business with the best of intentions to make a contribution to society and to their families and to themselves. To suggest that they do so with a lack of responsibility and an unwillingness to accept responsibility I think is grossly unfair to men and women who set out in an entrepreneurial spirit to establish the lifeblood of the economy, in many instances, in small communities all across this province and who have contributed so very dramatically to the riches we have enjoyed over the past number of years. I draw to the attention of members opposite that the vast majority of new jobs created for women and for young people entering their first job have been created in the small business, entrepreneurial sector.

The Minister of Financial Institutions also said, "The corporate sector would prefer to see nobody responsible for those irresponsible acts." I completely reject that statement. I do not believe for one minute that it is fair to categorize it as an "us and them" situation and say that all corporations and business people are these terrible people who are setting out to be irresponsible and do harm to individuals.

It was also said in the debate on 30 May that people were happy to have been involved in the drafting of this legislation. If that is the case, I think they would want to reconsider very carefully the implications of what they said at that time. Surely the amendments have been forthcoming as a result of concerns expressed and heard and responded to. I applaud the government for doing that, but simply to say we did that in response to those concerns begs the question of why those concerns were not addressed in the initial case.

It comes back to the same question I asked initially: Where was the consultation? Where did it really take place? Who sat down and thought through the implications of this legislation in terms of its potential impact on the business community? I am delighted that the not-for-profit sector, the charitable sector, has been removed from the implications of that, but who thought that through in the initial instance? Who sat down and thought about it, and who turned their minds to the impact of this legislation that people were boasting about three weeks ago in terms of their involvement in its drafting.

Another provision of Bill 70 that needs to be addressed and that I believe will be addressed by individuals throughout this province is the provision that directors need not be the last resort in terms of collecting wages and severance pay that might be due. I believe the employer is primarily responsible. I have no question about that. As I said, I think the concept behind the bill is fine, but surely proceedings against employers ought to be exhausted--and under this legislation they do not have to be exhausted--before proceedings are commenced against directors and relevant shareholders. That is pursuant to subsection 40s(2) of the proposed legislation.

In my view, all avenues of the corporation should have been exhausted and explored prior to making individuals responsible for the actions of an independent entity. That is the concept of business law, as we have understood it, that has evolved over 130 years in this jurisdiction. It did not grow up without some rationalization. It grew up over 130 years for some very fundamental reasons in terms of the evolution of law and what that embodies, creating corporations as individual entities that stand unto themselves and that have the qualities and rights of an individual or a person in law.

It seems to me that to depart from that concept on the basis of this particular issue opens the door to grave considerations in the future. Surely, to be consistent with the development of common law and business law as we have understood it, and as business has operated successfully for the most part in this jurisdiction and in jurisdictions in North America for well over 130 years, we ought to look very carefully at revisiting whether or not the corporation as an entity ought to be held to account first before individuals are held personally liable.

It is very clear under the act that individuals cannot contract out of liability, but directors may be indemnified by an employer. That is fine. It seems to me that this results in a basic unfairness to companies on the verge of insolvency. Many smaller companies close to bankruptcy or in difficulty cannot afford to indemnify their directors. This is not a scheme, in its final analysis, to encourage people to go out and buy insurance. It is, or ought to be, a scheme to set up wage protection. I believe we are missing the mark, and this bill will misdirect some of the focus. There is a two-year limitation under Bill 70 within which proceedings must be commenced. Quite frankly, the Business Corporations Act as we know it is of no application, and section 131 of that act has no meaning whatsoever.

I reiterate the position I hold very strongly, that the development of business law in Ontario over the last number of generations has evolved on the basis of what works and makes sense and has been a give and take. An evolution of that law, it seems to me, ought not to be thrown out, on a very, very fundamental principle of business law.

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Other ancillary concerns would include, in my view, the issue of how this fund will be paid for in the long term. Current plans, as I understand it from statements made in this House, call for the program to be funded out of general tax revenues. However, neither the Premier nor the Treasurer has ruled out a payroll tax or other tax measures, and I say--I think with considerable accuracy--that neither has indicated precisely how the initial funds will be raised for that. They certainly will come out of general revenues in the initial instance, but perhaps we will have another tax under way.

Whether it is done out of general revenues or out of an additional tax, when all is said and done, successful businesses will be subsidizing the failed or unmet responsibilities of less successful operations. So if you run a good business, and I am unsuccessful, you will again end up subsidizing me.

Contrary to some of the sentiments I have heard expressed opposite, there is no business in the world that sets out and says, "Over the next number of years, we're going to lose money and, hopefully, go out of business." Nobody sets out to do that; quite the opposite. I am amazed to hear some of the rhetoric from people opposite who have the preconceived notion that somehow businesses set out to lose money and cut employees loose. Quite frankly, it boggles the mind to think how that concept can be embedded, that there would be such a sense of divisiveness and a sense of confrontation--

Mr Elston: A lack of understanding.

Mr McClelland: --and a lack of fundamental understanding, our House leader says, of how business operates. The world does not always operate on an adversarial basis. I say to my friends opposite that it is time to put that adversarial concept aside and understand that it is not the norm in this world. They may firmly believe it from their backgrounds, some of them, and I say that with respect. I understand where many of them are coming from. But you do not deal with 2% or 3% of the population by going after 100%. Some businesses that operate in the province expect 2% or 3% of their accounts will be bad. In some cases, it may be more. But businesses do not operate on the concept that all of their customers will be bad customers. Businesses do not operate on the concept of fundamental understanding that all of their debtors will create problems for them. They operate on the basis that most of their customers are good customers, and they deal with the specific problems as they arise.

It seems to me that the concept embodied in Bill 70 in its initial form, and also the whole process and the rhetoric I have heard surrounding it, is that all these businesses are terrible people. Some of them are bad actors; there is no question about that. but certainly in society we do not set out with a premise that everybody is a bad actor and deal with it. We deal with the specific circumstances and develop a remedy that focuses on the problem. To use an old, proverbial cliche, you do not kill flies with sledgehammers. You go after them. You do not use a chainsaw when a scalpel will do the job.

I say to my friends opposite to think very carefully about what they are saying to the business community and people who are looking at this jurisdiction. The bill remains retroactive at the present time until 1 October 1990. It will not be passed now until October 1991--a year of retroactivity. Retroactive legislation of this type, in my view, is entirely unfair. I think it calls into question some very basic fundamental freedoms that we have understood in this province and this country. I say that with the greatest of respect to my friends opposite, who have always been the champions of democracy and freedom, who pride themselves on advocating against injustices and things that are unfair in this world and in this province.

How can they possibly say to people in good conscience, after the fact, "We're changing the rules"? Many of them have invested, quite literally, everything they have. In some cases, family members have thrown their lot in with businessmen and women--sometimes extended families. Many of you people are involved in business and you know what I am talking about. You have gone to your in-laws or your friends or your brothers or your cousins, and they have helped you out, or you have helped them out. To say, after the fact, that we are going to change the rules of the game is fundamentally unfair. Furthermore, I think it sends out a very serious message to people, not only in Ontario but literally around the world.

We had a debate or some comments surrounding this with respect to Bill 4 and the retroactive nature of that legislation prior to the Minister of Housing bringing out his so-called permanent legislation. But think about the message the government is sending. The implications of this legislation are not only with respect to the black and white set out in the documents; it is the inherent message. The message is to men and women who would seek to do business in Ontario: "Be careful, because you don't know what the rules are going to be down the line. Don't make any decisions. We're prepared to change the rules after the fact."

Some of our colleagues are out playing baseball tonight. I want to make it very simplistic. What happens in sports is this: You set out a set of rules, one team and the other team agree to what is going to happen and you play the game by those rules. You do not change them after the fact and say, "By the way, we don't like the way it was done; we want to change the rules to make sure we come out on top."

Members opposite say that is simplistic, but they should think about that analogy. They should think about it in terms of personal relationships and family relationships. You do not go by after the fact and say, "By the way, we had certain expectations, but now I'm changing them; not only am I changing them, I'm changing them back to what they were over a year ago." But that is the message the government is sending to the business community. I say with all respect, how can it possibly in fairness tell people after the fact, "All bets are off, we're changing the rules"?

Second, have members thought about what that is going to tell people who are thinking about coming here? Is this the end of it? Is this one more straw to be piled on to the camel's back, so to speak, or is this the beginning of a tidal wave--if I can use a mixed metaphor--of changes that are going to come, many of them retroactively? That question is being asked. Believe me, it is being asked by people not only in this province who are considering moving elsewhere; it is being asked by people who otherwise would have considered coming to do business in this province. They do not know what the rules are and Bill 70 is sending out that message in terms of its retroactive application.

The summary procedure that is embodied in Bill 70 gives former employees instant and direct access to directors' assets without notice. I will just put that on the record for members' consideration, to think that through. Also, to tie it back in to the concept of corporations standing as an individual entity and existing as an entity unto themselves in law as we understand it in this province, surely there ought to be an opportunity for directors to have notice to be able to explore what other possibilities exist within the corporate structure to satisfy what is ultimately a legitimate claim.

I want to repeat two things in summary. The message to business investors right now is that there are no rules. The government did that with Bill 4. I do not have it on authority, because I am not privy to all of the detail, but I am told that after Bill 4 was introduced, essentially all the life insurance investment in this province died out. That is a big chunk of money. They did not tie it up and say, "We're not investing in Ontario any more because we don't want to get into residential legislation." They said, "We're not doing it because we don't know what the rules are."

The government is repeating, it is amplifying that message again with Bill 70. It is saying once again to businessmen and businesswomen, investors, international money, "You don't know what the rules are now; you don't know what they're going to be in the future." That in a sense has been the case in any jurisdiction: the rules always changed down the road. This is the first government that I am aware of that has taken such great liberty in changing the rules after the fact and going back and saying: "We don't like the fit, so we're going to change it. I'm sorry you came in here with certain beliefs and expectations, but that's too bad. We don't like the fit and we're going to change it." I would not be willing to go high risk in that environment. I say that very candidly. Many members, if they were to search their own consciences, would not be prepared to do that. They would not engage in undertakings with their colleagues or other individuals if they were not sure what the rules were now, much less what they were going to be down the road.

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One of the other interesting things I find is this concept that business is out to lose money. No business--and I have said this before--sets out to lose money. One of the great ironies is that the cabinet of this government is saying: "We're going to change the rules with respect to you. By the way, at the same time, we're prepared to set a course of action over the next four years and essentially bankrupt this province. We're going to hold you personally liable and personally responsible if ill befalls you through no fault of your own, but at the same time we're going to take the liberty to say, 'We're going to set out intentionally to go on a course of spending enormous sums of money and incurring a huge deficit.' By the way, that is not our fault. We're doing it because all our motivation is noble and we have the best of intentions in what we're doing and we are doing it to contribute to the wellbeing of this province."

I find it ironic that the government would be willing to change the rules for people in the business community and yet it cannot even come close to having that same standard of conduct for itself.

I dare say some of my colleagues would be the first to jump on this and say, "Oh, you're scaremongering." If members do not think businesses are going to move out of Ontario as a result of this, they are dreaming. The member for Chatham-Kent laughs at that. He should wake up and smell the coffee, because businesses are looking very seriously.

The question is, is this the thin edge of the wedge? What is going to follow? What is going to take place here? What is going to happen in Ontario? He ought to wake up. If any shareholder of any company set out to do what he is doing, he would be fired. Many of the government members are going to be fired in four years. They should bear that in mind. They can sit there with the biggest grins on their faces that they have right now, but four years from now, they will not be back. They should bear in mind that one of the reasons they will not be back is because they are taking the hope of jobs away from the very people they vowed to work for, to create jobs for. A lot of those people are not going to have jobs as a result of some of the actions the government is taking.

Companies are not only leaving Ontario; other companies are not going to come here. That is one of the grave, sad results of what is taking place surrounding this legislation and other legislation that is coming. There are not only reduced incentives to stay in Ontario of late; there are now disincentives to remain in Ontario and carry on business. I believe very clearly that there will be fewer startups of companies, and that will be extremely detrimental to the economy.

How are the NDP members going to pay for all the good things that many of them believe in? And they do. They believe in good stuff. For years, they have had that role in this province and many of them continue to do that. At the end of the day, the vast majority of us, from whatever side of the House, whatever party we represent, believe ultimately in many of the same goals in terms of bettering our society, providing for people who have legitimate needs and dealing with social issues and social concerns. But how is the government going to do that if the engine that drives the economy either slows down or perhaps in some communities stops altogether?

They can slough it off as easily as they want. They can grin and sit there in their seats and say, "Well, that's the job of McClelland, because he's in opposition, to talk about all the terrible things that this bill is going to do." But they should understand the people who write the headlines in the newspapers this week that say businesses are being scared away; they should understand when men and women come to the door in their constituency offices, as they will in scores over the next year. They should remember sitting here tonight, remember sloughing it off as just a little bit of an exercise they have to go through because they got unlucky and drew House duty tonight. They would rather be out playing ball. I would rather be out playing ball too. They should remember that when those people come to their doors this winter and ask them why they are losing jobs and why there are no prospects for employment in their communities and in their neighbourhoods.

Another great consideration is those firms that specialize in saving faltering firms. They will be very wary of supplying their services to firms in Ontario. When they do their risk return or risk-benefit analysis to decide which firms are savable for what cost, it will cost Ontario firms more.

I made some mention about venture capital and how it comes into the province for one of two reasons; one is to start companies up and the other is to turn failing companies around. They will be very wary when they look at the cost-benefit analysis of coming into this jurisdiction. In the event that Bill 70 is passed--and I even believe in its current form--that risk-benefit analysis will tilt against attracting business and keeping business in this province.

Investors will be deterred from investing in Ontario. The change in the business environment, the climate, will have that effect. There is no certainty any more in the province if the government goes ahead with this and has the retroactive provisions it is contemplating. That message will be heard loud and clear all across this province, across this continent and, I believe, around the world.

I do not want to take too much more time. I notice many of our friends have been waiting for some time to speak on this. I want to make one or two concluding comments if I could.

It is my belief that the additional risk of companies in a difficult time will have tremendous difficulty attracting top managerial talent for their companies. These men and women who have the managerial skills to come in and turn companies around are among the most necessary people we have for the kind of economy we want to develop into the year 2000 and beyond in Ontario. Happily for them, but sadly for us, they are also the most mobile. They also have skills they can pick up and take to any number of jurisdictions, any number of companies located around the world, which would welcome their input. We need those people the most when the economy is in difficulty, such as we have right now. They will say: "It's not worth the risk. Why should I be vulnerable? Why should I come in and try to turn companies around and help them?" Those with management expertise, that skill men and women have, I believe will be reluctant to be put to good use in the province of Ontario.

The amendments introduced were not simply drafting changes, although they were that. They were not a matter of clarification of a word here or there. The amendments result in changing the fundamental liabilities as set out in the bill in its first instance. Those changes indicate that the government certainly listened to some of the relevant groups and listened and responded.

I hope the government will go back to the drawing board and listen to the things that come up when the bill goes out to committee. It has changed them fundamentally now. If it is intent on listening to the legitimate, honest concerns of people who come before it, I think it will be prepared to change it some more.

I have indicated my position. The government ought to scrap it and start fresh. I firmly believe that. It ought to have a stand-alone bill that sets up a fund that stands alone, that is on an interim basis, that provides the very good things the government wants to do through this, pending the long-overdue amendments to the Bankruptcy Act. But it should listen carefully to what is said. It has listened in part, it should hear the rest of the story. It should hear the rest of what men and women concerned about their jobs have to say. I say to the government members, what is going to happen to their friends and their children, what kind of economy are they going to have?

I see my friend the member for Windsor-Sandwich is here. I had the pleasure of living in that community for a number of years, an economy so much tied to the ups and downs of the auto industry and so vulnerable to the bad times and enjoying the good times. One of the thrusts that community has undertaken very well--I know, having lived there for a number of years--is to diversify its economy and to give some broad base in the economy that is not necessarily auto-related.

You know those kinds of businesses you want to attract to the community of Windsor, to the other communities all across this province and to the north, where the parliamentary assistant comes from, where they need to have that diversity. Those are the kinds of businesses that are going to be welcome here, the absence of which will hurt your communities.

The government should listen carefully, when it goes to committee, to all the affected groups. It should try to get it right this next time around. I say that in all sincerity. It should do the best it can and listen to these people and their concerns. If it thinks there is any legitimacy in it at all, I ask it, in good conscience, to hear them out, not just to pay lip service and sort of slough them off, as has happened in the past, but to listen to the substance of what they have been saying.

The Premier said the intention in the initial drafting was not to increase the liabilities of directors and officers. Having done that, the minister has responded in part with amendments. He has in fact increased the liability and the exposure of directors.

In this case I believe the road to bankruptcy, given the good intentions of the Premier, as expressed by the Premier, may in fact be the road to some significant economic hard times in this province.

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I hope that as this goes out to committee, those concerns I have expressed and others will be brought to bear. I applaud the minister for the work he has done working with his federal colleagues. He should continue to press that issue. I hope he is successful. I wish him much luck and success in seeing that happen in a timely fashion.

I conclude by saying Bill 70 was brought forward with intentions that nobody in this House from one of the three parties questioned. Nobody said it was a bad idea to offer wage protection, but I do not think there has been for a long time such a quick, grass-roots response to some of the deficiencies in the bill and the minister reacted to that.

But it begs the question again: How did it ever get through in the first place? Who was minding the shop when this came forward? If the deficiencies were recognized--and he admits by responding, which is great. I applaud him for doing that, but there were errors in terms of its drafting and some of the concepts.

He should listen to the rest of the concerns out there. Surely they deserve his honest response. Surely the people who have put so much on the line to provide for the economy of this province ought to be heard and given the same kind of attention many of the groups that have his ear receive.

I ask him to put aside that adversarial concept so predominant in some of the rhetoric we have heard here. He should put it aside and listen carefully to what they have to say. If he does that, everybody will come out a winner, particularly men and women who are unemployed, who have lost their jobs and ought to be given the protection. They also want to know they have jobs for the future, that their communities are viable and their children and others in their community have the prospect of jobs down the road. So I ask the minister to do that and I thank you, Madam Speaker, for the opportunity to participate.

Mr Daigeler: The member for Brampton North has done an excellent analysis of what is wrong with this bill and I do not think I need to add much to it, other than to say for the life of me I cannot understand why cabinet let this bill go through to the House in the first place.

I do understand the member for Hamilton East would bring in such a one-sided bill. I must admit that when I was on that side I had respect for the member for Hamilton East as a very ferocious, aggressive advocate for workers and unions generally. But as he is beginning to realize now that, when you are in cabinet, on the government side, you have to take a broader look at things and respect the concerns of all society.

I guess this message was brought home to him by the business community, by professionals, his own caucus colleagues and probably the cabinet as well. He has brought in some major amendments of which I am pleased. But it does raise the question: Why did he bring in this bill in that shape in the first place? It does not reflect very well either on the minister or, I would say even more so, on the cabinet.

Here is the new government with a bill very important for its own philosophy. What does it do, what is the result? They have to withdraw on the whole front even before it goes to committee. I do not think it is a very good sign for their own ability to manage their legislative agenda.

It is good to see they are willing to recognize a mistake and are willing to say, "Okay, we made a mistake and we want to change it." That I applaud them for. However, I only hope they would recognize and do the same thing on other matters.

Mr Waters: In listening to the member for Brampton North, he said the feds were looking at this particular problem with the Bankruptcy Act. The problem is that the feds have looked at it seven times over the last 20 years and have not done anything and I do not see any change right now. Where is the change and where is the potential for change there?

In my view, this is labour legislation we are talking about, not bankruptcy legislation. It is unfortunate that a company has become insolvent, but this legislation is to protect the worker and therefore belongs in employment standards in the labour law. It does not belong in bankruptcy.

I talked to some people who head up a division of a large corporation for one group. We dealt with their problems, with what the minister had to say. When he made the amendments he dealt with all their concerns. They seemed quite happy with the legislation as it is now put forward.

We are faced with a dilemma here. Certain businesses are going to falter and how are we going to protect the worker? The worker has some rights; that is what this legislation is all about, protection for the people who fall victim to a company when it has become insolvent. That is the aspect that we are trying to deal with.

As far as retroactivity is concerned, business has been aware of this since last October, that it was going to be retroactive. This is going to be no surprise when the bill is proclaimed; they have been well aware and can plan for this. I see no problem at all.

Mr Callahan: I do not think anyone has an exclusive possession of workers. Every party and everybody is concerned about workers. The difficulty with Bill 70, though, is that if you look at it in the long run, particularly in its unamended fashion, it goes a long way towards doing a disservice to workers, to lessening employment, particularly volunteers. If that bill had remained and remains--and I understand it is not going to--in its present form, it would have meant a great deal of volunteerism would very easily have been lost to this province. It is fine to speak of employees, but when you speak of employees, you have to take a balanced look at it. You have to say that without jobs, you do not have employees, so that "employees" becomes a phrase that really means nothing.

In the final analysis, when members look at legislation across the way there, I say to them, please do not look at it simply from the standpoint of employees. If they do, they can carry that to such an extreme they eventually kill the engine of business that creates the jobs, that creates the employees. In the final analysis, as much and as hard as they may try to be fair to the employee, they are doing a disservice to those people who require jobs to look after their families. I urge them in this legislation, and in some of the other employment legislation being brought down the pipe, they have to have a balanced approach because the people out there may think this is great stuff, but when they find they no longer have jobs and can no longer characterize themselves as employees, then of course the whole emphasis, the whole effort on the government's part has been lost.

Mr McClelland: I just want to say to my friend the member for Muskoka-Georgian Bay that I appreciate his sentiments and his comments, but clearly he does not understand the implications of the Bankruptcy Act or the amendments proposed in the House of Commons just this week. In fact, I would hasten to add that his own minister has applauded those and said they are what we need. He hopes they will be forthcoming and is optimistic that will be the case, and hopes this legislation will work in tandem and those amendments will complement on another. I understand the need to get up with some spontaneity and participate in the debate but, in so doing, he should certainly be aware of what is taking place in the federal jurisdiction as well as here.

I simply say the motivation behind Bill 70 is clearly to ease the effects of recession, and I recognize that. As my friend the member for Brampton South has said, that is the intent, but it seems to me this is clearly not the appropriate means of doing that. It is a laudable end but, in the final analysis, the result will be the loss of industry and jobs in this province. It could very well increase terminations. The number of small businesses that close their doors may do so sooner. Directors, I believe, will wish to consolidate their losses rather than incur further personal liability, given the higher risks as created by Bill 70.

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I would hope, as I said earlier, and I do not know how often I can repeat it, this government will listen carefully to what is being said out there. If you think you understand stuff, terrific. If you do not, be willing to go out and ask some questions and talk to the people who are doing it on a day-to-day basis. Understand their point of view. At least try to understand it. Try to understand what is involved with people who are trying to run businesses, who are trying to meet payrolls, who are trying to compete. I know it is not an accepted word in the lexicon over there, but competitiveness is important, and they should try to understand that, try to work it into their thinking as best they are able. They should put aside that preconceived notion that people have and work in co-operation and build an economy that is good for everybody.

Mrs Witmer: I am pleased to have this opportunity to speak to Bill 70 in its present amended form and to indicate that our party does support the principle of protection for workers who are owed back wages. Our party is pleased to see the amendments which remove the liability provisions for officers; which limit directors' liability to wages and vacation pay, as is consistent with the current liability under the Ontario Business Corporations Act, which limits liability to those debts incurred during the term of the directorship, thereby removing the extension of liability for a full year after the resignation of a director; and which exempt non-profit organizations from the provisions of the bill.

Concerns about these issues had been raised by Ontario's business community and also by volunteer directors. Our party has brought these concerns to the minister's attention through a number of questions in the Legislature which highlighted the unfairness of including officers in the liability provisions, particularly for non-profit organizations. Also, we indicated the unavailability of directors' and officers' liability insurance to protect these individuals.

On 28 May we asked the minister to commit himself to bringing in an amendment to exempt officers and directors from the provisions of Bill 70, and now we are pleased to see that has been done. However, I still wonder why non-profit corporations were not originally exempt from the legislation, since the discussion paper, Wage Protection Fund, dated December 1990, stated on page 19--and I think this is extremely important:

"Improved wage recovery from directors and officers may have the following unintended effect." This is what was said, and this was known to the minister: "There may be a disincentive to become a director or officer of a corporation. This would be especially severe in the case of non-profit corporations where the directors volunteer their time and energy as a contribution to the community. It may therefore be appropriate to exempt non-profit corporations."

Why, I ask, did the minister not follow his own ministry's advice as given in the discussion paper, Wage Protection Fund, in December 1990?

On 16 May I asked the minister to withdraw this bill and produce an alternative model because we felt it was flawed in extending liability to officers. I indicated that it did not make sense to put the responsibility on the shoulders of the people who have absolutely no control or responsibility over a firm's fortunes. I am pleased that the officers will no longer be personally liable. This liability would have exposed many officers to personal ruin.

On 27 May I inquired about the availability of directors' and officers' insurance and was not given an answer to my question. That indicated to me that the bill was drafted without a clear understanding about the availability of directors' and officers' insurance. Indeed, we were aware that there were only two companies that offered this insurance and they had indicated to us that they were unwilling to underwrite this insurance for companies whose financial positions were unstable, the very companies that most needed the protection. Therefore, without protection, without insurance, small and medium-sized companies in this province would have opted to close, rather than face personal liability, and more jobs in this province would have been lost.

Yes, Bill 70 in its original form was unfair, it was shortsighted and it was ill-conceived. However, I am very pleased that the minister did respond and address the growing level of concern with the legislation. I am pleased that the minister recognized that Bill 70 was not creating one single new job. In reality, it was going to cost us jobs.

While the amendments address many of the serious concerns about Bill 70, they do not change the flawed process of its development. The government launched a consultation process in January of this year. However, it failed to include the recommendations of the business community in drafting the original bill. The government simply paid lipservice to the word "consultation." I would suggest that in future that meaningful and effective consultation take place. The measure of effective consultation is a policy which in the end reflects a fair balance of the expressed views and concerns of all the parties involved.

Concern has also been expressed about the short consultation time line in January. I would suggest that in future this time line be extended so that all of the parties can analyse, they can study and they can critique the discussion paper and they can develop positions on the topic. This would be of considerable benefit to the government. The ministry must also spend the necessary time producing discussion papers that discuss all possible and viable options before the legislation is brought to this House.

It was because of haste and it was because of a lack of true consultation that Bill 70 in its original form was poorly drafted and flawed in principle. It is for this reason that Bill 70 should receive a thorough review through a public hearings process and be sent to committee. It is important that all of the stakeholders in this province who will be directly impacted by the provisions of this bill have the opportunity to voice their very real and legitimate concerns. We must ensure that this legislation does not, and I quote from IBM Canada, "dampen the entrepreneurial spirit that we should be encouraging if we are to move out of the current recession."

Although this job protection fund will provide some temporary relief for employees in this province, in the end it is going to be the security of a job that is going to be in the best long-term interest of workers, and that should be our goal, to make sure that people in this province do have secure, good-paying jobs.

By sending this bill to committee, the government will have a further opportunity to investigate and respond to the concerns that are being raised in this province.

I would like to share with members at this time some of the concerns I feel need to be answered. First, the federal Minister of Consumer and Corporate Affairs tabled a bill on 13 June to amend the Bankruptcy Act. Under this new program, employees who are caught in a bankruptcy, a receivership or liquidation can receive up to $2,000 for unpaid wages and vacation pay and up to $1,000 for unpaid salesperson's expenses.

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Currently a wage earner is only entitled to a preferred claim, in an amount not exceeding $500, for arrears in wages and vacation pay for services rendered during the three months preceding bankruptcy. Now an employee will be able to submit a claim to the wage claim payments program. The claim will be verified and the employee will receive 90% of the money owed within four to six weeks. The program will then recover the money, where possible, from the assets of the employer. Wage claims not covered by the fund, such as severance and termination, would rank as ordinary unsecured claims.

Unfortunately, it is proposed that this federal program would be funded through a new payroll tax, and our party could not support another payroll tax. Indeed, the Canadian Federation of Independent Business has said, "An additional tax, no matter how small, is irresponsible when companies are reeling from the goods and services tax...and face substantial increases in payroll taxes for unemployment insurance on July 1."

We all know that experience indicates to us that once a new tax is introduced by any government, it will inevitably be increased in future budgets. The Canadian Federation of Independent Business wants employee wages to be made a secured or a superpriority claim, which would eliminate the need for such a fund. I would ask the minister to consider. Is this possible?

Obviously, now that the amendments have been introduced by the federal government to the Bankruptcy Act, we must ensure that there is absolutely no duplication of programs or costs at the provincial and federal levels. Indeed, one question I have is, what provisions are there to prevent individuals accessing both funds? What discussions have taken place between the province and the federal government to harmonize Ontario's laws with the proposed reforms to the federal bankruptcy legislation amendments?

The minister has indicated on several occasions that he would like to meet and discuss with his federal counterparts. He indicated that again in June. He wanted to ensure the harmonization of the federal and provincial programs. Now the opportunity is there, and I would suggest that discussion take place.

We must remember that our financial resources--and I am referring now to the taxpayers' money, because it is the taxpayers who are going to be paying for this, whether it is a federal or a provincial program--the taxpayers' dollars are limited and we must do everything possible to use them as effectively and efficiently as possible.

Although I appreciate the fact that the government is trying to protect employees' wages in cases of bankruptcy or abandonments, there are certain economic realities the government must take into account before developing legislation such as this. The government should conduct a cost impact analysis and start asking itself, can we afford this legislation in its present form? Will it lead to further job losses?

Has the government considered a sunset clause, based on the implementation date of the federal program, to limit the cost of the Ontario program? Has the government considered an alternative to the $5,000 maximum? Has the government considered limiting the compensation to wages and vacation pay?

Concerns still exist in the business community about coverage from this fund for severance and termination pay, and it is estimated that this fund is going to continue to be a drain on the Treasury. It is estimated that in the first 18 months about 56,000 people are going to access the fund. It is going to cost about $175 million. By 1992-93, assuming that we do have a return to normal economic conditions, and that is anybody's guess at this point in time, there are going to be an additional 19,411 workers accessing the fund and that is going to cost approximately $55.33 million. Can the province of Ontario afford to be this generous? Are the workers not protected by the unemployment insurance system?

Another question that is asked concerns the unemployment insurance payments. Workers have already received unemployment insurance payments based on their termination without receipt of their severance pay and back wages. If they were now to receive a lump sum payment from the wage protection fund, would they have to pay back some of the UI payments? However, the big question that remains is, will the Ontario employee wage protection program eventually be financed through another payroll tax?

It is obvious that there are still many unanswered questions. Also, the fact that the federal government has now introduced amendments to the Bankruptcy Act leads to the need for much further dialogue with that other level of government. It is for this reason that more time is needed. It is for this reason that the proposed legislation should go to a committee for public review. It is important that further dialogue take place.

Another concern remains about subsection 65(1), which permits the Lieutenant Governor in Council to make regulations increasing the amount of compensation payable under the employee wage protection program. Why will the Legislature not make this decision on the expenditure of money? Why will the taxpayers not have a voice in increasing the amount of compensation?

There is also some concern about the availability of directors' and officers' liability insurance. Although the liability is consistent with the Ontario Business Corporations Act, Bill 70 is still going to introduce new enforcement measures which represent a real extension of the liability of directors.

These are the questions that still need to be answered.

I would like to take the opportunity to congratulate the minister on bringing in amendments in light of the evidence of the damage that the bill in its original form would have done to the economy in Ontario and to employers and employees. It had the potential to do irreparable harm to the very fragile industrial fabric of Ontario. It had the potential to accelerate job losses and it had the potential to close more businesses in this province.

However, I would like to share with the House one of the most objectionable features of this bill, and that is the fact that it was based on an erroneous assumption about business, the way in which business is conducted and what actually happens when a business collapses. Unfortunately, the assumption was made that the officers of large corporations either have control or are in control during the process leading up to the collapse of the business. The fact is that no one is in control in the sense that the government had originally assumed.

Businesses in this province collapse not because those in positions of authority want them to collapse, but because of circumstances that are far beyond the control of any one individual. The impact of government policy, the impact of government taxes, the role of the workers, the changing nature of the marketplace and other factors are what contribute to bankruptcy, and unfortunately, all of these factors were not taken into account.

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We need to restore the badly shattered confidence of the Ontario business community. It has already been pointed out this evening that it is the small business people in this province who create most of the new jobs, and we need to consider these individuals. We need to restore their confidence. We need to encourage them to create and put investment into new business.

I ask the minister to carefully reassess the impact of other proposed programs that this government is planning, and these include employment equity, changes to the Labour Relations Act and increasing the minimum wage. They are all going to have a detrimental impact on Ontario's economy if appropriate consultation does not take place. In this province it is important that we do everything possible to provide a secure economic environment for our citizens, one which provides secure, good-paying jobs for all workers and which in time will totally eliminate the need for any employee wage protection fund.

Mr Owens: In the gentle congeniality of the House, I thank the member for Waterloo North for her comments. I think the difference that separates the governing party and the third party is that when we perceive a need, when we see the wreckage and ruin of this recession brought on by their colleagues in Ottawa, we move out and take action. The third party recommends a cost impact study.

I am sure the honourable member's riding is not a lot different from mine. Mine was a formerly industrialized riding. The member for Waterloo North is very swiftly losing the plants in her riding, and I would like to bring her to Scarborough Centre to meet some of the folks who are going to be able to take advantage of this program. I think the mistake the opposition makes is that the fund is going to be a free-for-all, and clearly it is not. This fund is meant for workers of companies that are not prepared to live up to their obligations.

I had a constituent in my office about a week ago, a worker who had been employed by a plant. The plant closed up, moved out. That worker is left without severance and without vacation pay and he has a family on the way. He has a mortgage to pay. What are we supposed to do with these people who have worked all their lives? The member for Brampton North mentioned that we have a problem with competitiveness. It is unfortunate that he is not here. The workers who have been working in plants for 30 and 40 years have been extremely competitive and are now faced by the recession.

Mrs Witmer: In response to the member for Scarborough Centre, I simply indicate that our party does sympathize and we do support the principle that workers deserve the back wages. However, I remind those members opposite that it needs to be in partnership with the business community and we need to consult with those individuals and recognize the impact this type of legislation is going to have. My concern is that it has shattered their confidence, that people are starting to go south of the border and are looking elsewhere. I guess in the end I see us losing jobs, and I see the need for this type of fund continuing. It would be my hope that we could develop in this province and in this country a fund that would help workers. However, I also hope it is one the business community would fully support.

Mr Callahan: Gordon, you know if they flip the television they see you in every seat.

The Acting Speaker: The member for Brampton South does not have the floor.

Mr Callahan: I was just commenting--

The Acting Speaker: I know what you were just doing, but you do not have the floor. The member for Chatham-Kent may continue.

Mr Hope: Before I get into what I have in front of me today, I would just like to reflect on some of the comments, not using the two minutes' space, but to use it in my presentation today.

I reflect back and I congratulate the minister for his understanding and listening to the general public on some of the concerns about legislation. As I reflect back on five years of the previous government's administration, when not only were we not able to get in and talk to ministers of labour about issues facing our workers--and we did deputation after deputation--but in order to get the government's attention, do you know what we had to do? We had to take to the front steps at Queen's Park. And guess what: We still never got the changes to the legislation, because workers did not mean much. So when I hear the comments about this government or this minister not listening to the concerns that are reflected by the community, I must reiterate that he was listening very closely to a number of the concerns.

With that, I look at this government's commitment to protecting the wages of working people when their employer closes shop, whether it be an office or a workplace. Thousands of men and women in this province have lost their jobs. They have lost their jobs without any notice, and they have lost not only their jobs but their dignity, their wages, their vacation pay and their severance pay.

I reflect back to 2 January 1988: A major issue faced this country. We all know what the Mulroney trade deal was all about: the North American content, which jeopardized a lot of jobs here in this province and also of the people of my riding, which has a lot of our parts industries. We heard the member for St Catharines vocalize the concerns of the independent parts manufacturers and suppliers. One of the major issues is that a lot of those independent suppliers are corporate-based in the United States. Now, instead of putting tariffs on the bridge, we have opened the tariffs up and just let them walk through.

Now we are looking at more of this in a trade deal with Mexico. I listen to the federal government and hear what they have to say; I usually listen. I also listen to what the United States is saying about this issue. But when business people from Taiwan, business people from the Third World, who are already taking advantage of cheap labour, are looking at investing in Mexico because it is even cheaper labour, that is one of the disadvantages of what is going on. So when we talk about this legislation, this legislation is commitment. We hear today about the federal government's commitment. I must reflect back on a commitment the federal government made on the Unemployment Insurance Commission. It says to the employers and the employees, "We will take more money out of your paycheque and we will then take back our contribution, but don't fear, we will put together an excellent training program." That was a year and a half ago and today we are still waiting for that training program for our workers and the moneys they have contributed to this federal government to make sure there was an effective training program to take us through the free trade deal.

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As we listen to the legislation that was introduced today or the day before by the federal government, I must say if it takes as long as it did to put a training program in place for the workers, I poor pity those families that are waiting today for that money that is owing to them. This is theirs.

Madam Speaker, if you do not pay your loan at the bank--and I know you must have a loan; I know I do--if I do not pay my loan, I am sure the bank will be there to take and possess that. So why is it that the people do not have the same right? People should have the right to the moneys that are actually owed to them. We are not asking for more.

People are left out on a limb, but they say on the opposition side of the House that labour and management must come together. I am very proud of a workplace in my area. An employer, a family business, was faced with a difficult situation. It was CAW Local 127 in Chatham, with a workforce of 220 dedicated men and women in that workplace. They went for three whole weeks--I believe two or three weeks, and I could be wrong, but in that area--without a paycheque. But they were in there on the regularly scheduled day, working to help bring the company through and to make it survive. This government even came through and assisted that corporation in putting it back on the street.

As I look at this legislation and I talk about the fears that are labelled in the media, I see that business has nothing to be afraid of. This is a government that is committed to working with business. The working people of this province who negotiate collective agreements, who are the ones fortunate enough to be unionized--and I do say that--work on three-year collective agreements. I reflect back on my own. During those three years, I was out there, dedicated--I mean sweat, and sometimes some blood too, because I probably actually cut myself or something working so hard. For the three years I dedicated my life to that company, but when the third year came up, I was there to get the profit that the corporation made, a fair share of that profit, to put into my pocket to help my family and restore my standard of living.

There is a dedication on behalf of workers in this province. One of the unfortunate parts is that for years workers have been neglected. As I sit here and listen to some of the conversations, there is always one major question that comes to my mind. I look at the members opposite, who say they support workers, but when I listen to the conversation extend itself around business, I guess there is a question that I really have to ask, and ask the general public here: Whose side are they actually on? Are they afraid of offending their corporate donors during election campaigns? Is there a hidden agenda that is so secret? As I listen to the concerns they put forward today and the workers in my riding wait for this money that is owed to them, I have to ask the question: Why do we have to have hearings on this legislation if they say it is so good? They say that workers need the money right away. Right away is not after the summer and moving into September and maybe into October. We need the money for these workers now.

I wish they would call their colours of today and be counted on whichever side they are actually standing for. I am not accusing all members opposite. I know there are some good ones over there. Inside they talk about it and I would say there are some good ones. But a lot of these families whom I know personally are people who for years have packed their lunch pails or their brown paper bags--recyclable, I must add--and walked into their workplaces day by day for six days a week or seven days a week, because a lot of them were committed workers and making profits.

The members opposite talk about the carpet being pulled out from underneath people's feet. On 2 January 1988, the people of this province had the carpet pulled out from underneath them by the federal government--the Mulroney trade deal, which is hurting us today and devastating my community, which is an auto parts sector and also an agricultural sector.

We know what they are feeling. As I listen to the concerns of the members opposite about the relationship between labour and management, and as I try to focus more on it, the people who create that buying market, the people who purchase the fridges and the stoves, who purchase the automobiles or the lawnmowers, those people who purchase that product--and these are massive numbers of people purchasing this product--are the working people of this province. In order to create investment in this province, the people, you and I--I know I live on a week-to-week paycheque--

Ms S. Murdock: Month-to-month.

Mr Hope: Oh, month-to-month now, sorry. We are the ones who generate the economy. If a person with a family of four can fit something into the family budget, that person will purchase, and then the buying power will be there and the jobs will be there. The investment will be there because the entrepreneurs we are talking about, the small business or large business, if they see a potential market, will enter into it and take advantage of it.

All we are asking is a commitment to the community, to the workers, to the people. It is not only that one worker or the five workers or the hundred workers; it is also those families that are affected. We are not just talking about an individual receiving money; we are talking about a spouse receiving it and about their children--and most of them only have two because that is all we can afford these days.

I firmly believe that this legislation is positive, a bright light--as I try to turn down some of the haloes when I listen to some of the comments next door so that I do not get the reflection back on me. But I must add that there is a bright light for co-operation that is here.

I will not go on any longer, but one thing I must add and I want to reflect to the people out there, because they listened to the Bankruptcy Act that the member opposite raised. There are so many loopholes that I would refer to it as "you could drive a truck through it," but because of free trade I do not know if we are going to have any truckers left. So I cannot use a truck as the thing we are going to put through there. Maybe we will talk about one of the ships or one of the Tory buses we could drive through it with, because it is so big.

I think this government has shown its commitment to the people of this province by introducing this legislation in such a short period of time. I must add it was effective and efficient in listening to the people of this province on some of the concerns that they have. No matter what legislation we introduce, we are never going to please everybody, but this is a positive step to the replenishing of a viable workforce. These people win awards constantly for corporations. They make profits for corporations. This just means a little bit more fiscal planning ahead of time in making sure that workers receive a share.

Just in closing--and I said that earlier, I must add--there are some small entrepreneurs in this province. They will not have to worry about this legislation, and you know why? They are committed to the people because it is a family business. They know your mother, your father, your brother, your sister, and they are not about to hurt their friends. The decisions are not made in corporate boardrooms, where the community has no say, this province has no say--and I am just going to let the federal government off a little bit; the federal government does not have any say either, because the corporate boardrooms are usually in the United States and possibly now Mexico, which raises some higher concerns.

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But this legislation, to the mom-and-pop operations--and I hate referring to them as mom-and-pop operations, but to the small business community--they are dedicated to their workers in trying to make a fair way of doing things. All I say, and really in closing, is to comment that there is only one hope for Queen's Park, and that is me standing here. But I have to withdraw that comment and say there is hope in Queen's Park and it is the New Democratic government sitting here on this side of the House, caring about the concerns of the people of this province.

Mrs Witmer: I would like to take this opportunity to respond to the member. I would like to congratulate him on what I know are his sincere feelings and respect for the workers. However, I would hope that we would all consult, that we would start to listen more effectively to one another, and that when legislation is introduced it will reflect the opinions of both sides. I guess until that time we will have to agree to disagree.

The Acting Speaker: The member for Chatham-Kent has an opportunity to wind up his debate for two minutes.

Mr Hope: Madam Speaker, I would love to for two minutes.

On a more serious note now, I have approximately 300-plus workers right now who are waiting for this legislation to be passed. They have had an opportunity to review it. I have made sure of that because I have gone out there and talked to the workers who are setting up and making sure they are able to consult. They talk among themselves, so they all understand what is actually going on here.

The workers of this province do not have faith in the federal government. I am sorry to say that, but they do not. They have been devastated by what has been taking place in their communities.

I am not standing here as a New Democrat; I am standing here as a member of this Legislature who is reflecting some of the concerns and the hurts that I have felt over the last 10 years of the people whom I represent. When I have to help somebody lower their common dignity to walk down the street and enter a food bank because some system has failed that worker, that is one sight I think a lot of these members in this House ought to experience. I am sure that the two or three hearings that this legislation is going to go through would change their minds very quickly in making sure that the people receive the moneys owed to them.

Mr Callahan: I would like to enter into the fray.

Interjection.

Mr Callahan: It is nice to see the Minister of Transportation in the House tonight. I am glad he could get here in his limo and that he is in his right seat to heckle.

I have to say that this is a marvellous plan. It is really very devious. As I thought about what I was going to say tonight in this speech, I reflected that the Minister of Labour had been required to recant in cabinet, and I would like to have been a fly on the wall when that happened; but I do not think that is what happened at all. Let me play out what I think the scenario is. I will be able to tell by the faces of the cabinet ministers who are here--two, I think, or three; two and a half--whether or not what I am about to say is correct.

What I think happened is this: The NDP looked at the last popularity poll and they saw that their popularity was plummeting. So the backroom guys, the McClellans of the world--not you, by the way--said, "We've got to put a spin on this." The spin they put on it was this: "We let the Minister of Labour loose. We untie his leash and we let him go wild and bring in his wildest dreams, his most outrageous scheme for ruining and destroying this province. Then after the press has murdered us for this, we say, 'Well, we've listened to the business groups and labour and so on and we have now decided that we're going to change this.'"

Members should think about it. That is a pretty sophisticated plan. It enforces the statements the Premier makes from day to day: that it is a partnership between labour and business. So by doing this, by letting the minister loose with his wildest dreams, making him king for a day, and then reeling him back in--I am not sure whether the minister was a willing participant in this whole process or whether he was just being led down the garden path. He has been in the House for a long time and I will respect the fact that he really cares. That is one thing about the member for Hamilton East, something you cannot attack. He has views that you cannot agree with because they are extremely radical. He is extremely devoted to the labour groups, and that I respect. I do not think anybody could not respect that type of commitment.

When he goes back home tonight, or wherever he lays down his head, and thinks about this scenario, that the spin doctors back at the Premier's office were putting a spin on this that was unbelievable--it was: "We've let Mackenzie loose. He's scared the living daylights out of the province. He's got business so frightened, they think they're going to have to close up shop and go to Buffalo." And suddenly, all of these gratuitous amendments arrive on the floor.

Members should think about that: You are a businessman who has his finger plugged into the light socket and is having 150 volts go through him, and suddenly the spin doctors from the Premier's office come along and pull his finger out and say, "Look, just fooling; we've been listening to you people; we really listen to you." That is why they do not want to go around the province with public hearings, because they are afraid this conspiracy, this spin-doctor theme from the Premier's office, will get out of the bottle.

Do members think the people out there are silly, that they do not understand what is going on? Do they think they do not understand that this is simply giving a few marshmallows to the business public? The government is giving them marshmallows, marmalade and honey so that it can introduce more draconian labour legislation that will eliminate any type of machinery or ambulances from operating; it will eliminate this possibility because they will not allow anybody to work if there is a strike.

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Members should think about it. In the last Metro strike--thank God it was settled. I am sure a lot of people out there from Metro are happy it was settled. But members should think about this: You are lying in the gutter; you have just been run down by a car or a bicycle. The Metro strike was not settled. The Minister of Labour's legislation, which is the next thing--this is just the lead-up--is now in place, which prevents supervisors from taking on the job that the people on strike refuse to perform. The member for Chatham-Kent is lying in the gutter, having been run down by the bicycle or the car, and he is saying, "I need an ambulance." A message comes to him: "I'm sorry, Randy, but under this new legislation by your Minister of Labour, supervisory staff are not allowed to operate that ambulance while there is a strike, so you will just have to lie there until the strike is settled. I have to tell you that the Premier has appointed a mediator and the strike will probably be settled shortly." In the meantime, the member for Chatham-Kent is suffering in delirium here and cannot get any help.

That has to tell the people of this province, in spades, what the impact is going to be of the further draconian legislation that is coming down the pipe. As sure as summer is going to come a day or two from now, and winter is going to follow on that, you are going to see all this stuff come down the pipe; so I go back to what I said, that Bill 70, in its original introduction, would have shocked even the greatest socialist. The reason they brought in this honey and these little amendments was partially because the opposition was telling them they had to, but I think the spin doctors really had this all planned, and I have to give the spin doctors in the Office of the Premier a lot of credit. They have really fooled the public.

The amazing thing is that nobody in his right mind would ever have carried through Bill 70 as it was originally presented; anybody with any intelligence who looked at that bill had to understand that the net effect of it--forget about the profit side of the scenario, forget about the profit corporations--anybody who read it had to understand you were going to have the immediate exodus of every director and every officer from non-profit corporations in this entire province. What would you have? You would have millions of people whose work would then have to be taken over by civil servants or someone else, someone who is paid--and if you think the deficit now is high, we would not be able to pay the freight. So what I say to the government is that the people out there are intelligent. Voters are like a jury, they know the government is trying to pull the wool over their eyes. This whole thing is nothing but a sham. Bill 70, as it was originally presented, was a sham. It shocked the daylights out of the business community and now the NDP feels very confident, having introduced these amendments, that this will relieve some of the stress.

But there is the other side of the coin: The member for Chatham-Kent said, "Why do you want to send it out to public hearings?" If you send it out to public hearings, it comes under scrutiny, it goes under the microscope and if a few opposition members bring it to the attention of the people who are coming before the committee, that the spin doctors back in the Premier's office have perpetrated this fraud on the people, questions start to be asked and people say: "Well, you know, you may be right. Maybe the legislation that is going to be proposed by the Minister of Labour down the pipe is going to be worse and they are just trying to soften us up for that blow." Suddenly you will find that people will be getting together and formulating a way to oppose that type of legislation.

So in fact, what you have to do is keep it under wraps; you keep the genie in the bottle and the spin doctors down at the Premier's office just continue to do their little thing like whirling dervishes, spinning other ways to create this façade that there is a partnership between labour and management. There is not one. Why spin-doc? We all know that some of the government members--not all of them, some of them--have a balanced approach to bargaining sessions, they see that the maximum thing is to keep some sort of balanced and reasoned approach to business and labour. But others over there believe that there is only one group of people in the world. That is fine. I think anybody in this House--we have all been labourers, we all are labourers, even in this place we labour; sometimes we overlabour, as I am probably doing right now. But in fact, once you break that fine balance--and I am sure I could talk to government members in collective bargaining terms. If they have ever bargained for a collective agreement, obviously if they stuck to their guns and refused to bend whatsoever or to see any of the rationality of the business side, they would never have a collective agreement.

Now the government is doing the same thing with its legislation. I have talked about the spin doctors down at the Premier's office, but these people are members of the assembly, good people who have been elected by the people in their ridings, given a sacred trust to ensure that everybody's needs are looked after. The member for Kitchener does cut ribbons. He told me one night that he does not cut ribbons, he does not go to events unless he can speak. I have been told that. That is the wrong approach. When you are elected as a member of the Legislature--it does not matter if you are elected for the New Democratic Party, the Liberals or the Conservatives--your job, and you are given a heck of a lot of money to do it, is to represent everybody. I suggest the members have to do the same thing in this Legislature.

This is one of the anachronisms of this entire place, the fact that government members cannot do that. They live under the threat that they will lose their cabinet seat, or they will lose their parliamentary assistant's job, or they will lose their whip's job or their Chairman's job with all that extra dough and prominence, if they do not in fact represent the people from their community the way they promised they would in order to get elected.

So they should just think about it. We are not talking about the giant corporations of the world. We are talking about some family businesses where just that little extra nudge is enough to push them over the edge--and they do employ people, believe it or not. We are not talking about the mega-corporations. We have to view it in terms of small corporations, family businesses, large corporations, and not just try to look at everything in a myopic way. I suggest that if they do that, at the end of the day they will have negotiated the best collective agreement that they could have ever done as an NDPer during their term in government. They will have accomplished things for the people of this province that they can be truly proud of.

But if they continue to allow the spin doctors to create the facade with Bill 70 and then introduce the amendments and then go into more draconian legislation, which just upsets people, they will drive business out of this province. We will soon be part of Buffalo. We can all watch the fires and the liquor store holdups on the magic eye every night. We will not even have to pay for it, because it will be coming right into our homes. We will be part of North Tonawanda and the rest of it.

If that is what they want, if they really want to watch liquor store holdups and fires, then they should just keep on trucking, because that is what they are doing. They should think about this: This is precisely why the federal government has the responsibility for bankruptcy legislation, because if we bring something into this province that is not available in the other nine provinces and territories, we in fact have made our business environment--we have taken the welcome mat away from Ontario. We have said, "If you want to come into Ontario, you are welcome, but here are the rules and they are different from the rest of the nine provinces and the territories."

Surely at a time when Ontario is suffering the greatest hurt, the largest loss of jobs of any province in this country from this recession--and they blame it on the federal government and I would join with them. Certainly the Prime Minister and his merry band are playing Robin Hood, except they are stealing from all of us and they are not giving it back to anybody, or they will at election time, I am sure. But the effect is that they create a situation where people look at Ontario, and from the other provinces alone, and they say, "Why should we move there?"

I notice that the real estate agents were saying that the housing industry was up. This was one of the indications that the recession was lessening. I suggest to members that if they really examined those listings, they would find that people are moving out of this province, that is the why the listings are up. They are selling like crazy because they want to get out of here before the place self-destructs. If that government continues in its vein of doing that, not only will it shoo everything out to the other provinces, it will shoo the stuff to the United States.

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The House leader and the Minister of Northern Development is waving her hands. I am not sure whether she is agreeing with me or whether she is saying, "That's foolish."

I will tell members opposite, the proof is in the pudding. They can go back to their ridings and find out how many jobs have been lost since that exciting day when they formed the government. It is outstanding. It is a record. The NDP will go down in the Guinness Book of World Records as having destroyed more jobs, lost more jobs in eight or nine months than any other government in the history of the world. If they can go back to the people in their ridings and look them in the eye and say, "I've done my job and all the things we did down here were great," if they believe that, then they should be able to sell them swamp land in Florida.

All in all, I do not think it is that difficult to do. We all have to bend, we all have to be realistic, we all have to not have this myopic vision of socialism. We have to say to ourselves, "What creates jobs? What in fact makes the jobs available so an employee can collect a salary," albeit sometimes people will lose their businesses and employees will lose their wages. I am with everybody else. I say that you have to have protection for them, but you will not get it this way. The government will get directors of companies bailing out when they see the company getting close to insolvency, because they do not want to be liable for all that stuff the government is attempting to put on them.

In the alternative, you will never get good directors for companies, because they will say: "You've got to be kidding. With that legislation in place, I'm going to go on your board? Will you insure me, will you get insurance for me?" "Well, we can't get insurance for you because the insurance companies have decided that the risk is far too great and you can't be insured." That is the image from inside Canada. I suggest that from outside Canada the picture is far bigger and if the government continues with the legislation it seems to have down the pipe, it will be lucky if even Mexico will deal with us.

I urge members opposite to have a little more flexibility, try to open their minds, forget that they are all tied at the hip and be independent thinkers.

I just thought I would stop to see if anybody had realized I had stopped.

Hon Mr Mackenzie: I do not intend to be long, but I do want to make just a couple of very quick comments. We will respond in terms of the hearings and the clause-by-clause debate on the bill to some of the questions that were raised, but the member for Brampton North, the member for Waterloo North and the member for Chatham-Kent presented some serious arguments and some legitimate points of view. We do not necessarily have to agree with them, but I appreciated those three members' comments and I want to respond to one or two of them just quickly and then make a few general comments.

First, in terms of consultation, we have consulted extensively on this legislation. We consulted with 38 groups prior to the drafting and we have certainly consulted with a number of groups since then. We have listened to the arguments we have received. I want to reiterate that Ontario's Business Corporations Act holds directors personally liable already, so this is not a change to the face of business or a challenge to the face of business. Also, the benefits are retroactive. That was made clear by my leader when he announced that we were proceeding with this legislation back last October, and that is a fact. The liability provisions, however, are not retroactive.

I also want to point out that in terms of the charitable and non-profit organizations argument that is made, one of the big things we ran into there was that directors did not realize they already had a liability. Some would argue that ignorance of the law is not necessarily a defence, but the facts are that most of them did not realize the liability was there. We did listen to the arguments that were made.

I can also tell members that there is a liability for directors under the protection plan in Manitoba and it seems not to have given them any trouble at all. But we felt that on balance, because of the concerns being raised on this issue, it was well worth listening to the people.

I also want to say that the main thrust of our legislation, not only this legislation but other legislation that we will be proceeding with in this House, is to try to establish a much more effective partnership than we have had in Ontario up until now and one that is based on a little more equality and co-operative approach than we have also seen in the province up until now. That has been behind most of the reasoning that we are doing on any of the labour relations areas we are looking at.

I emphasize that the main thrust and purpose of the employee wage protection program is to help workers recover unpaid wages when their employer is bankrupt, insolvent or they are simply not paid under other circumstances. Last year, nearly 3,000 companies in Ontario were forced to close due to bankruptcy. In many of these cases, the loss for the workers was not only of a job but also of earned income as well as vacation, severance and termination pay.

This government is not prepared to stand by and watch as workers are denied the money they have worked for. It is legitimately theirs and they need it. Losing your job for any reason is a rather traumatic experience. For most, it is a time of uncertainty and stress and it is a time when a person does need assistance. Since the employee wage protection program was announced last October, we now have over 13,000 workers who have filed claims with the employment standards branch of my ministry asking for assistance in recovering wages that are owed to them. We must be able to assure these workers and the others who come to us for help that we can indeed give them the support they need.

This government also listened to the concerns expressed by business and non-profit groups. As I announced two weeks ago, we will be introducing amendments to Bill 70 that will remove the liability provision for officers of companies. We will also be limiting directors' liability for wages to that which now exists. Directors will be liable for up to a maximum equal to six months' wages and up to 12 months' accrued vacation pay that comes due only during the term of their directorship. We do not intend to hold individuals responsible for corporate decisions that are made once they have left that position. We have no intention of increasing the liabilities for wages that currently exist under Ontario's Business Corporations Act, Corporations Act and Co-operative Corporations Act.

In addition, we will also institute special exemptions for directors of non-profit corporations. The government wishes to reaffirm our support for people who are directors in this sector. While the amendments do, we believe, resolve the concerns raised about all directors, we will add this exemption to reassure those who volunteer their time as directors of these organizations.

Last week, the federal government finally introduced, in amendments to the Bankruptcy Act, a proposal to create a wage protection fund of its own. We applaud the federal government's intention to create a national scheme to protect workers' wages. I would like to assure the House that not only will I be meeting with them but I have already met with my federal counterparts on this issue, and our staff are currently involved in discussions as to how we can assist workers who need this assistance and can access it easily and without undue complications.

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At the same time, I note that we do not think the federal program goes far enough in that the dollar cap is too low and severance and termination pay are not covered. Termination pay is wages that are owed for the period when notice should have been given. Severance pay should be considered compensation to workers who are laid off, to recognize the investment they have made in the enterprise where they have worked. That was always the intent of it. We will continue to press the federal government to make appropriate changes to the unemployment insurance system so that these benefits are not deducted from a workers' unemployment insurance entitlement.

There has been an agreement among all parties as to the need for an employee wage protection program, so I do urge all members to remember the underlying principles behind Bill 70 and I urge them to think of the workers who, in good faith, have given their time and effort to employers and who, through no fault of their own, are unable to collect the money they have earned. Bill 70 is a necessary piece of legislation. It should be passed quickly so that the people of Ontario know they are assured of receiving the money they have worked for, so that they know they live in a society based on fairness and co-operation, which is exactly what we are trying to do with the legislation we are bringing forward.

Motion agreed to.

La motion est adoptee.

Bill ordered for standing committee on resources development.

Le projet de loi est defere au comite permanent du developpement des ressources.

ASSESSMENT STATUTE LAW AMENDMENT ACT, 1990

Ms Wark-Martyn moved second reading of Bill 36, An Act to amend certain Acts respecting Assessment.

Hon Ms Wark-Martyn: On 19 December 1990, I introduced Bill 36, the Assessment Statute Law Amendment Act, 1990. As members will recall, this bill has two purposes. First, it will discontinue the enumeration that the Ministry of Revenue conducts of multiresidential units in municipal non-election years. Second, it will replace the annual equalization process with a four-year equalization cycle.

As members may know, the Ministry of Revenue's property assessment program currently conducts a full enumeration of all properties in municipal election years. The full enumeration is presently under way. All households in Ontario should have received a municipal enumeration form. The mini-enumeration of apartment tenants undertaken in the intervening years between municipal elections did not achieve the same contact rate as the full enumeration. Often, fewer than half of the tenants were contacted. In addition, the reliance on population data has declined. Members may know that the basis for calculating provincial grants to municipalities was changed from population to number of households in a municipality. This has reduced the need for the mini-enumeration.

Accurate provincial grant entitlements can be made without a mini-enumeration between election years because the regional assessment offices have information available from other assessment reports on the number of household units in a municipality, including the number of units in multiresidential properties.

School boards may worry that this initiative reduces the level of service provided to them, since school support information was collected by the enumerators. However, as I mentioned earlier, the rate of contact with tenants during the mini-enumeration was often below 50%.

Discontinuing the mini-enumeration will have minimal effect. On the other hand, this proposal, along with the change from an annual to quadrennial process for the protection of equalization factors, will allow my ministry to redirect its resources to other activities, such as the completion of supplementary assessment. These activities are of primary concern to municipalities and school boards, since they establish the basis for municipal and school taxes.

Also, together these two initiatives will allow the Ministry of Revenue to save $4.1 million in its operating expenditures. In this way, the government is responsive to the financially constrained environment facing our society.

The second main purpose of Bill 36 is to move the calculation of equalized assessments and equalization factors from an annual process to one undertaken every four years. However, the bill also allows these determinations to be made in the intervening years of the four-year cycle. This would happen if, for example, a municipality suffered a major decrease in its assessment base because a major industry closed or if municipalities merged under the program of county restructuring. Equalized assessments and equalization factors are measures that indicate the relative assessment wealth of a municipality.

Equalized assessments and equalization factors are used by the ministries of Education, Municipal Affairs and Transportation to calculate provincial grants. They are also used to establish cost-sharing responsibilities among municipalities within a county or region. Equalization factors are not the only criteria used by grant-paying ministries; these ministries also use multi-year averages to offset fluctuations that result from changing real estate markets.

It is important to remember that grants and cost-sharing are based each year on the assessment on which municipalities and school boards raise their tax. This assessment is directly linked to the financial capacity of the municipality and school board.

To repeat for the sake of clarification, the move to a four-year calculation process will not have a significant impact on municipalities, particularly with the provision to calculate ad hoc factors in the intervening years. With this provision, a municipality which experiences a dramatic impact on its tax base because of an industry closure will have its grant entitlements recalculated. In addition, that same municipality's contribution to shared costs within the region, county or district will decrease to reflect its reduced wealth.

Finally, the equalization factors and equalized assessments that my ministry will calculate every four years will be based on an average market value trend over the four-year period.

Bill 36 also contains complementary amendments with respect to the calculation of shared costs. It was necessary to amend these provisions to ensure that new cost-sharing responsibilities could be calculated on an annual basis without being tied to the production of new equalization factors. At the same time, authority for determining cost-sharing responsibilities is being transferred from the Ontario Unconditional Grants Act to the Municipal Act. This is accompanied by a provision for review by the Ministry of Municipal Affairs if a municipality questions the accuracy of its proportion of shared costs. If the municipality is not satisfied by this review, then it may appeal to the Ontario Municipal Board.

I hope this bill will receive the support of members of the Legislature. This legislation will ensure the continued delivery of reassessments to municipalities that request them. It will also allow my ministry to continue to produce supplementary assessments for new construction and permit municipalities and school boards to use a significant source of property tax revenues.

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Mrs Y. O'Neill: I am pleased to rise tonight to speak on second reading of the Assessment Statute Law Amendment Act. Bill 36, An Act to amend certain Acts respecting Assessment, was first introduced last spring by the Liberal government and is now being brought forward by the NDP.

The Minister of Revenue will be aware, as are most members in the Legislature, that there are many requests for assessment work to be done across this province, particularly to meet the needs of various reassessment projects. In fact, the primary responsibilities of the property assessment program are supplementary assessments, property re-evaluations in support of ministry reassessment programs, in-year tax adjustments, enumeration and equalization.

The legislation the minister is introducing tonight for second reading is part of the ministry's ongoing exercise to target its funding priority assessment needs. The government's initiative to establish a tax commission, the effect of which could very well be to shelve any real decisions on tax reform to a much later date, does not eliminate the reality that there is and will continue to be an unmet demand for assessment work by her ministry.

If and when the NDP government moves forward on Metropolitan Toronto's market value assessment plans, this initiative will be a very heavy burden for the ministry's resources. If and when the ministry establishes a crown corporation to administer assessments, the minister will be aware that it has always been assumed that the province would continue to provide at least its current level of financial support to assessment through payments to the corporation. This, as I understand it, would be base funding, in addition to any moneys charged by the corporation for extra work done for the municipalities.

I believe most municipalities agree they will have a fairer financial base by allocating funding of the mini-enumeration and equalization calculations to pressing assessment requests. The minister has decided this will have the least direct effect on municipal and school board tax bases. Neither change will contribute, it is hoped, to a reduction in the base or failure to identify new growth.

The minister has indicated that she is bringing in this legislation because she has decided the costs of the program are not supported by the value of the data or information that comes from the mini-enumeration and the annual assessment equalization factors. I hope and trust the Minister of Revenue will ensure that her ministry will use the savings resulting from this legislation by wisely allocating them to requests from municipalities for provincially funded assessments and reassessments. I hope the minister will clarify and confirm that this is how the money saved will be reallocated. There are rumours that the money saved from this legislation will be used to pay for the tax commission and the unknown millions that the tax commission will cost. I hope the minister will confirm tonight that this is not the case.

My second concern is with the need for special reviews of equalization and enumeration factors in certain communities. The transition from annual to quadrennial equalization factors will tend to stabilize the level of grants to school boards and municipalities. The minister will be aware that Bill 36 contains within it two provisions for special consideration of local assessment factors. It is important for the minister to assure the public, municipalities and school boards particularly that this decision is not based on the view that these initiatives were not worth while within themselves. Section 3 of the bill provides for the ministry to do a special review of equalized assessment and equalization factors in certain municipalities as requested by the ministries of Municipal Affairs, Education, Northern Development and Mines. Section 5 of the legislation provides for municipalities to ask for a review of apportionment factors that are calculated without the information from the mini-enumeration. This section also allows municipalities to appeal the ministry's review of apportionment factors to the Ontario Municipal Board.

These two provisions in the legislation, sections 3 and 5, are designed to give municipalities and school boards some confidence that radical changes in local assessment factors can be accommodated without the mini-enumeration or annual equalized assessment through a special review by the ministry. I would like to suggest to the minister that implementation of these provisions will be very important. Monitoring of the successful implementation of Bill 36 not only will be important in rapidly growing communities, like mine in Ottawa-Carleton, but will be equally important in communities with declining populations. These communities are looking for the changes in their local assessment to be closely monitored and promptly reflected in the provincial equalization grant programs, such as the unconditional grants, in this time of need, in this time of recession.

School boards and municipalities are looking for a commitment from this Minister of Revenue that she will be vigilant in her decision to allow for special reviews and local assessment factors. I would like to ask the minister that she give us her commitment tonight that she will openly receive and promptly grant requests from municipalities and boards to conduct special reviews necessitated by local situations such as I have mentioned.

I am pleased to know that the Minister of Revenue plans to continue to produce school support lists and associated computer tapes to allow school boards to track support and to meet their planning requirements.

I note that the legislation contains a mechanism for appeals to the OMB, as I mentioned earlier. I hope that the minister can implement this legislation in a way by which municipalities must use the OMB only as a unique last resort when special situations in their localities arise and have not been considered due to the use of quadrennial assessment after the initiative is taken. When the Liberal government introduced this legislation last spring, it was definitely our intention to work with municipalities and boards to resolve any problems that could arise, and I hope and I trust that this minister will follow that same path.

The Minister of Revenue will be aware that there are already some concerns being raised by groups that feel that changes in local enumeration assessment factors may not be adequately addressed without special reviews. I have received letters from the Ontario Public School Boards' Association that deal with its concerns on the implementation of this legislation. I know the minister has been in touch with the association and has offered to work with it to ensure that the legislation's implementation does not have any unfair consequences in the distribution of property tax dollars and provincial grant dollars to concerned boards in this province.

In addition, I hope this bill will be accompanied by an adequate educational component for municipal clerks and superintendents of finance of school boards, the people whose work this legislation will directly impact and who will be very important to the smooth implementation of Bill 36. This government owes these people every support they need.

In summary, the Liberal caucus will be supporting this bill. We feel that it is an appropriate initiative to prioritize funding within the ministry, and we hope and we trust that the saved funds will be used for the important assessment functions that will serve well Ontario's municipalities and school boards. I hope the Minister of Revenue will be sensitive, and that is what I have been asking tonight, in implementing this legislation and will respond favourably to requests for special reviews of local assessment and enumeration factors and that she will assist with all her might those who will implement Bill 36 locally with the necessary resources for a very smooth transition.

Mr Turnbull: My party supports the intent of this legislation. The bill will discontinue the annual calculation of equalized assessment and equalization factors and allow the Ministry of Revenue to prepare the equalized assessments and equalization factors on a quadrennial basis. The first one would take place in 1993. We would anticipate some savings from these measures, and to that extent we certainly applaud them.

I note also the bill will discontinue annual mini-enumerations. However, in the case of a municipality that has merged or has been experiencing a significant change in its tax base, the ministry shall determine the relevant equalized assessment and equalization factor without regard for the four-year cycle. This is very important when we have situations such as the potential situation in Algoma and other one-industry towns. It is important that the ministry can move quickly on those matters.

I would just point out that we feel--this started under the Liberal government--there is too much downloading on property taxes. It is inappropriate to have such a major portion of education costs borne by property taxes. I remind members opposite of their election promise that they would fund 60% of education costs out of the provincial taxes, as opposed to property taxes. This is a very serious and pressing problem, and the other evening I was at a meeting where people where asking the government to keep its election promise. However, the intent of this bill is appropriate, and we support it.

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Hon Ms Wark-Martyn: I would like to thank both of the members on the opposite side of the House for their information and their thoughts on this bill and also for the support which they have voiced for this bill.

I would like to emphasize that the accurate provincial grant entitlements can be made without a mini-enumeration between election years because the regional assessment offices have information available from other assessment reports on the number of household units in a municipality, including the number of units in multiresidential properties. Regarding the impacts this will have on public and separate school boards, we have had contact with them and will be working with them on these issues.

I would like to thank both of the members again for their thoughts and their comments regarding this bill, and I would like to add that the cost saving from this, the $4.1 million, will go towards doing some supplementary assessments for municipalities, as they have requested.

Motion agreed to.

Bill ordered for third reading.

GASOLINE TAX AMENDMENT ACT (AVIATION FUEL), 1991/ LOI DE 1991 MODIFIANT LA LOI DE LA TAXE SUR L'ESSENCE (CARBURANT AVIATION)

Ms Wark-Martyn moved second reading of Bill 79, An Act to amend the Gasoline Tax Act in respect of Liability for Tax on Transfers of Gasoline, Aviation Fuel or Propane.

Mme Wark-Martin propose la deuxième lecture du projet de loi 79, Loi portant modification de la Loi de la taxe sur l'essence concernant l'assujettissement a la taxe lors de transferts d'essence, de carburant aviation ou de propane.

Hon Ms Wark-Martyn: The Gasoline Tax Act currently contains an unintended loophole. Airline companies have argued that the legislation, as it now reads, allows them to buy aviation fuel in the United States, import the fuel in bond and fuel their aircraft in Ontario, without creating an Ontario aviation fuel tax liability. Under the Gasoline Tax Act, tax is imposed at the time of purchase or receipt of the aviation fuel in Ontario.

Several airlines have taken the position that as the act presently stands, aviation fuel imported in this way is neither purchased nor received in Ontario and is therefore not subject to Ontario tax. The fact is the airlines were always intended to be subject to the Ontario tax, the same as other people who buy their gasoline and aviation fuel in Ontario. I propose the following amendments to the Gasoline Tax Act be made to clarify the existing legislation, to prevent any future tax avoidance of this nature and to protect the aviation fuel tax revenues already collected or assessed.

The first will require those who import aviation fuel for their own use to pay a deposit equal to the tax at the time the fuel is imported into Ontario. It is proposed that this amendment be effective as of 1 October 1989, when our border collection agreement with the Department of National Revenue on imported petroleum products went into effect.

The second amendment will ensure that the tax is imposed at the time the aviation fuel is transferred into the fuel tank of an aircraft in Ontario. I propose that this amendment be effective as of 1 October 1986. The reason is that formal challenges to the tax on imported aviation fuel began in October 1989, and several major airlines have requested refunds of tax paid previously on the basis of in-bond importations. Since there is a three-year limit on refund claims, as much as $15 million of tax, going back to October 1986, could otherwise be refunded.

Ontario has had a long-established policy to tax all aviation fuel, whether imported or bought in Ontario and whether used in international or domestic flights. Since the tax policy intent has been clear, correcting these technical deficiencies in the act on a retroactive basis is appropriate. These amendments will not change the aviation fuel tax policy. They will, however, ensure that the policy is properly reflected in the act and that the aviation fuel tax base is protected.

Mrs Y. O'Neill: I rise again this evening to participate in this debate on the second reading of Bill 79. According to the title of the act, the purpose of this legislation is to amend the Gasoline Tax Act in respect of liability for tax on transfers of gasoline, aviation fuel or propane.

A little explanation is probably in order before I begin. Amendments to the Fuel Tax Act, 1989 were introduced by the Liberal government to try to control contaminated fuel being moved into the province by unscrupulous importers who claimed that the fuel was destined for sale in another province and therefore should not be taxed. The legislation required that importers would have to be able to provide information on the origin and destination of fuel that they were carrying. In order to ensure that all importers were covered, regardless of whether the fuel was actually sold in Ontario, the definition of "importers" was changed to cover all people who bring fuel into the province in bulk.

It is the practice of certain large airlines to import bonded fuel into Canada for use on international airline flights. Fuel is considered to be imported in bond when it is brought into the country in bulk for purposes that do not require federal excise tax to be paid on it, such as for use in international flights. The amendments to the Gasoline Tax Act proposed by Bill 79 relate to the taxation of this bonded fuel by the province of Ontario in order to facilitate this taxation, to change the point of the taxation event from the sale of the fuel to the loading of the fuel into the aircraft fuel tank.

The effect of Bill 79 is that it now applies to airlines that purchase bonded fuel in bulk in the United States and import it into Canada. Airlines have been seeking confirmation that bonded fuel should not be covered by any tax and have indeed, as the minister mentioned, started a legal challenge to the tax on bonded fuel. The Liberal government had agreed to meet with the industry to resolve the dispute, since it was never the intention of that government to impose a new tax but to simply ensure that unscrupulous importers could be monitored and contaminated fuel traced.

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In so far as this legislation is essentially intended to close a loophole to the existing Gasoline Tax Act, we do not oppose this intent. However, I do have two very specific concerns about Bill 79. First, I am concerned about the reciprocity of other jurisdictions. Canada is a member of the International Civil Aviation Organization. This organization prohibits member nations from taxing aviation fuel in ways that are not similarly taxed in other countries and includes reciprocity provisions against countries that do charge extra taxes.

The government of Quebec, for example, has recently settled a number of claims by airlines regarding taxes levied on bonded and domestic fuels. Quebec agreed to tax only the portion of the fuel that is used when flying in Quebec, that is, on takeoff, and will refund taxes back to 1983. Therefore, in light of the common practice in most international jurisdictions not to tax bonded fuel, there is the danger that when Canadian airline companies use bonded aviation fuel in other jurisdictions, they may be liable to pay tax on this bonded fuel.

Should other countries, such as Japan and the Netherlands, decide to retaliate in this way against Canadian airline companies by taxing them at foreign airports, this could put an additional severe strain on the already struggling Canadian airline industry, and indeed it is logical and has already begun. Foreign airlines are encouraging their governments in that direction. This is an issue of concern to the airline industry in Canada and indeed in Ontario, and it should be an issue of concern to the Minister of Revenue.

My second concern regarding Bill 79 is buried at the very back of the bill. Subsections 9(2) and 9(3) state the scope of retroactivity of Bill 79. In fact, the real essence of this bill amends the Gasoline Tax Act retroactively to October 1986, and this is done to protect this government from liability in certain legal proceedings in which application has been made for the refund of taxes already paid.

Subsection 1(1) and section 3 of Bill 79 are retroactive to 1 October 1989. Subsection 1(1) amends the definition of the term "purchaser" to include a person who purchases fuel outside Ontario for use or consumption in Ontario. Section 3 changes the tax payable by the importer and the rate of that tax to "an amount as a deposit equal to the tax that the importer subsequently would be liable to pay under section 2," a section of the Gasoline Tax Act which details the circumstances under which aviation fuel tax shall be paid.

Other key sections in this bill are retroactive as far back as 1 October 1986, as I have mentioned. These sections include subsection 1(2), which amends section 1 of the act and adds definitions of "delivery" and "fuel tank." Section 2 of Bill 79 details who is liable to pay tax on aviation fuel in Ontario and under what circumstances they are required to pay this tax. May I remind this House, this section, which is really the meat of the bill, is retroactive back four and one half years.

We have had discussions quite recently on the principle of retroactivity in this House. I think specifically of the very recent debate on Bill 4, where both opposition parties voiced very serious concerns about the fairness and the setting of precedent of retroactive government. Yet here we are tonight debating Bill 79, another piece of retroactive legislation which will impact the airline industry in this province, an industry which has already been victimized by the failure of this government to address the legitimate issues of competitiveness in Ontario's corporate sector. We must understand that Ontario businesses compete in an international marketplace. More and more, day after day, every day, all Ontario businesses are feeling the pressures of international competition.

Just as the NDP government seems to be refusing to recognize that the cross-border shopping issue is a sign of the need to make Ontario more competitive with United States markets, this same government seems unable to understand how legislation aimed at Ontario businesses, in this case the airline industries, can have serious, penetrating and long-lasting ramifications. Our Canadian airlines are probably even more sensitive to international competition than many other industries. The Canadian airline industry, in order to exist at all, must do a large amount of its business throughout the world, in many other countries.

Recent major expansions by large US and European carriers are an indication that competition in the airline business continues to increase in the face of the current difficult financial times in this industry. There are even predictions that the emergence of large supercarrier companies, as we are beginning to see in the expansion plans of American Airlines and United Airlines, will make it even more difficult for Canadian-based airlines to compete in international markets.

Sections 4, 5 and 8 of this bill, also subject to this four-and-a-half-year retroactivity, deal further with changing the definition of who is liable to pay this tax on bonded aviation fuel. I hope the Minister of Revenue realizes that the taxation of bonded fuel is a very contentious issue. The airline industry, a large employer in this province, is concerned with the direction this government has chosen to take with the introduction of Bill 79.

In closing, I urge the minister to consult directly with the airline industry, as the previous government had fully intended to do, and to ensure that its needs are met with respect to maintaining and improving its competitive position in the global market.

Mr Turnbull: We support this legislation. The bill is going to do two things. It will close a loophole in the Gasoline Tax Act, which airline companies have been attempting to exploit to avoid paying Ontario aviation tax, by stipulating that the tax applies at the time the fuel is transferred into the fuel tanks of an aircraft in Ontario. It will amend the bill to correct the inadvertent exclusion of aviation fuel consumers from the 1989 amendments to the act implementing the border collection agreement with Revenue Canada to pay a deposit equal to the amount of tax owed at the time the fuel is imported into Ontario.

I would just comment that the antiavoidance provision is retroactive to 1 October 1986 and the deposit provision is retroactive to 1 October 1989, the implementation date of the border collection agreement. Generally speaking, I would speak out very strongly against anything that is retroactive, but since it was quite clear that it was intended at the time that this tax should be gathered, everybody understood that and it was just a sloppy piece of drafting of the legislation, in this case we need to protect the Ontario Treasury from any vexatious claims that are retroactive, since it would be justified by the airlines that they were not supposed to be paying even though they had already paid and people would be coming back for money.

The Progressive Conservative Party has opposed any tax increases since 1985, but the PC Party has supported and advocated tougher compliance and collection measures to reduce the value of tax revenues lost through lax enforcement of the tax laws or through smuggling. But I would echo the comments made by the previous speaker that it is important that this government consult with the airline industry, a very competitive industry which is feeling the pinch at the moment. It should consult and make sure the level of taxation is appropriate to keep them competitive.

These measures are clearly to close a loophole which should not have been there in the first place.

Mrs Y. O'Neill: I hope that in the minister's winding-up remarks, she will give us the assurance that she has consulted with the airline industry on this issue. I have not been able to confirm that she has done that. If she has, I would like to know. If she has not, I would certainly like to have a commitment from her tonight. This, one of the largest industries, is certainly going through a great deal of trauma. All we have to do is read the newspapers again to see the results of that in individual people's lives. I would certainly like to hear her response to the request from both speakers on this side that she consult, and continue consulting, with a very important industry in this province.

Hon Ms Wark-Martyn: I would like to clarify that this piece of legislation is intended to close a loophole, which has been mentioned by both the members from across the way, to clarify the existing legislation, to prevent any future tax avoidance of this nature and to protect the aviation fuel tax revenues already collected or assessed.

In response to the member for Ottawa-Rideau with regard to reciprocity, the International Civil Aviation Organization and the possible retaliation, I would like to reply that the Nova Scotia Supreme Court has held that the ICAO agreement does not apply to individual states in the United States. Similarly, it does not apply to provinces and is applicable only at the federal level. British Columbia taxes aviation fuel in the same manner as Ontario does at present.

Also, regarding the competitiveness in Canadian airlines, this will apply to all airlines, as it does now. There is no change, so there will be no change in the competitiveness as far as refuelling is concerned and there will be no advantages given to non-Canadian airlines. I would like to respond also to both of the members that we will be working closely with all aviation companies regarding refuelling. They will know of the changes and the intended loophole that has been changed in this legislation.

Motion agreed to.

La motion est adoptee.

Bill ordered for third reading.

Le projet de loi devra passer a l'etape de troisième lecture.

The Speaker: It has been brought to my attention that there should be some information provided for the members on tradition. This evening the Agricultural All Stars managed to attain 14 runs and the Press Gallery 8.

The House adjourned at 2153.