The House met at 1330.

Prayers.

MEMBERS' STATEMENTS

HISTORICAL SOCIETY DISPLAY

Mr Cleary: I would like to invite all members to rediscover part of our province's heritage by visiting the Stormont, Dundas and Glengarry Historical Society's display in the lobby of the Legislature.

The SD&G Historical Society is a proud custodian of the rich heritage of the three united counties, settled first by the Mohawk people, travelled by the French voyageurs and established by the United Empire Loyalists in 1784.

The city of Cornwall boasts two museums. Inverarden Regency Cottage Museum was constructed in 1816 for Nor'Wester John McDonald of Garth and is now furnished with fine Canadian furniture. The United Counties Museum has long preserved the history of SD&G. The distinguished displays feature a badge from the Stormont, Dundas and Glengarry Highlanders Regiment, mounted on a McDonald tartan similar to the one worn by the former member for Cornwall, the first Premier of Ontario, John Sandfield Macdonald. You will also find a beaver pelt linking us with the explorer Simon Fraser as well as other items reflecting the rich diversity of our culture.

I invite members to take a few minutes to see the exhibits, starting next Monday, celebrating the historic greatness of Cornwall and one of Ontario's founding communities.

APPOINTMENTS TO HOUSING AUTHORITIES

Mr B. Murdoch: I wish to bring to the attention of this House and the Minister of Housing a problem which she or her predecessor may have caused in my riding. Perhaps inadvertently, they have given local housing authorities the impression that all appointments to their volunteer boards will be taken over by the province.

This perception was deepened recently when two members of the Grey County and Owen Sound Housing Authority, one appointed by the county and the other by the city, received letters from the ministry telling them that if they wished another term, they must fill out an application form for the province.

I have been assured by the minister's agency appointments office that she has no intention of vetoing appointments from other levels of government. They only wanted additional information and in fact have now stopped sending out those letters. But I warn her she could be facing many angry people in the near future if she does not make this very clear.

The Owen Sound Sun Times ran a negative front page article on this issue yesterday. More will appear soon. The minister must realize what has happened and move quickly to ensure the public understands exactly what it is her ministry is trying to do.

KAREN MORRISON

Mr Dadamo: As a member of this assembly, I would like to take this opportunity to inform members of this Legislature about the Charles E. Brooks Labour Community Service Award, which was handed out recently in Windsor.

Let me add that this distinguished award was established in 1977 by the Windsor and District Labour Council, in conjunction with the United Way of Windsor-Essex County, to honour the memory of the late Charles E. Brooks, president of Local 444 of the Canadian Auto Workers and an outstanding community-minded citizen. In Windsor he is cherished.

I would also like to add that the award is presented annually to a Windsor and district trade unionist in recognition of outstanding contribution in the area of voluntary community services. As the member of the Ontario Legislature representing the riding of Windsor-Sandwich, I am pleased to announce to the members of this House that this year's recipient of the Charles E. Brooks Labour Community Service Award is Karen Morrison of Local 1681, CUPE.

Karen's tremendous contribution and endless hours of dedication to her profession as a nurse and to the labour movement have given her the honour she so rightfully deserves. As well, Karen is also the youngest person to ever win this award. As my constituent and dear friend, I congratulate Karen Morrison on being chosen this year's recipient of the Charles E. Brooks Labour Community Service Award.

SHELTER FOR WOMEN

Ms Poole: I was disturbed to learn that the committee of adjustment in the town of Georgina has rejected a pro-posal for a vitally needed women's shelter. This shelter would serve women and children who have been victimized by wife assault.

The reasons given for the committee of adjustment decision were not enough parking space and too narrow a driveway. Local residents talked about the proximity of homes for the mentally handicapped as a negative impact on children who would be in the proposed shelter. Do people seriously believe it is better for a child to live in an abusive situation than to occasionally encounter a mentally handicapped person? It is obvious the not-in-my-backyard syndrome is alive and well in Georgina.

Support for assaulted women and their children is needed throughout the province, but the need in Georgina is particularly acute. In 1990 this town had three times the rate of domestic assaults as the rest of York region. In the past two years, five people in Georgina have died as a result of domestic assault.

Just last week members of this Legislature deplored the tragic number of women who are assaulted. We condemned the violent circumstances under which many women must live and we urged the government to act now to deal with the systemic nature of this problem. Was it all just rhetoric?

We have to battle the NIMBY syndrome. This government must intervene and continue the Liberal government's commitment to building that desperately needed shelter in Georgina.

AFFORDABLE HOUSING

Mrs Witmer: On August 14, the mayors of Kingston, Guelph, London, Windsor and Waterloo wrote to the Minister of Colleges and Universities requesting that he meet them as soon as possible to discuss the options his ministry would consider to help alleviate the very serious problems these communities face as a result of the demand for off-campus student housing. To date, the minister has not responded to this request to discuss off-campus student housing.

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The increasing need for students to find housing off campus has resulted in a significant decrease in the availability of moderately priced housing for families in these communities. The fact that many students can afford to pay inflated prices for substandard accommodation has forced many low-income families to lower their expectations for the kind of housing their limited incomes can afford.

I recognize this is not a simple problem with easy solutions. However, I do believe the minister has an obligation to work with the various communities to seek solutions which will meet the needs of both the students and the local community. A month and a half ago the mayors of these cities requested that the minister meet with them to discuss their concerns and they deserve a response from him. I strongly urge the minister to make the time to meet with these mayors at the earliest possible opportunity and to work not only with them but with the Minister of Housing to find solutions to this extremely difficult problem.

FACULTY OF SOCIAL WORK

Mr White: I rise to congratulate the faculty of social work at Wilfrid Laurier University on the occasion of its 25th anniversary.

The faculty of social work was established in 1966 with only 28 students. This graduate school was the first in southwestern Ontario, where trained social workers were in great demand. To date the school has graduated 1,730 MSWs, who are providing leadership to local and national social service agencies.

Recently a doctorate of social work program was introduced. As the second doctoral program in English-speaking Canada, the first being here at the University of Toronto, it is designed to prepare future academics, policymakers, senior administrators and advanced practitioners in the social welfare field.

The centre for social welfare studies, established in 1986, links the school's research program with the community and has been involved with the Better Beginnings, Better Futures program operated by the Ministry of Community and Social Services.

The Easton McCarnie lecture series, which this year will be held tomorrow, is an annual public lecture series on a wide range of topics related to social policy. They have had prominent speakers, including the present Premier. As one among the faculty's many graduates, I am proud of its many accomplishments.

ONTARIO HYDRO LEGISLATION

Mr McGuinty: The Minister of Energy will be making a statement today. I want to speak to the origins of that statement. Members of a powerful lobby group, the Municipal Electric Association, representing 312 public utility commissions, on Sunday past issued a written ultimatum to the minister which said in effect, "If you make a suitable statement in the Legislature within the next 48 hours, we will stop our public campaign against Bill 118 and our chair and our president will each write you to thank you for your wonderful openness and to say we so look forward to working with you."

Yesterday, with the 48-hour deadline running out, rather than making a statement in the proper way through a ministerial statement before question period, a format which allows for response by the opposition parties, instead of following the usual procedure and instead of accepting our party's offer, made in this House yesterday, to allow him extra time to make a statement at the usual time, the minister, to use his terminology, used neither the back door nor the front door. Instead, he used a tunnel.

After the time for ministerial statements had passed, after question period was over and after the minister had removed himself from this House, we the members of this House and the people of Ontario learned of this minister's amendments to Bill 118 through a backbencher in his party.

We can only hope this minister and this government now recognize the gravity of the impropriety committed by the minister in attempting to bypass the rules and traditions of this House. We can only hope something like this never occurs again.

MINISTER OF COMMUNITY AND SOCIAL SERVICES

Mr Carr: I rise today to condemn the Rae government and in particular the Minister of Community and Social Services. In the throne speech, the Rae government said, "We will deal resolutely with violence against women and children."

Theresa Greer, the executive director of the Halton Women's Place, sent a letter to the Minister of Community and Social Services on July 11 of this year. The letter was lost by the minister's office. On August 7 another letter was sent. The minister's office lost that one too. On August 12 another letter was sent. It went astray as well.

Theresa Greer of the Halton Women's Place says it best when she says, "Given the steps taken to date, I was quite dismayed to discover that the seemingly elusive letter has, as yet, not reached the minister and therefore my request for an interview has not been responded to."

In the throne speech the government said it is a government that will listen to the people and respond to their needs to the best of its ability. The actions of the Minister of Community and Social Services show very clearly that the Rae government has no ability to solve our problems. I call on the Premier to appoint a new minister, who is capable of getting results in the Ministry of Community and Social Services.

ONTARIO SUMMER GAMES

Mr Frankford: Mr Speaker, as you are aware, there is a great tradition of supporting amateur sport in Scarborough. Within our city there are many sporting and recreational facilities and organizations.

I am very pleased to draw to the attention of this House that Scarborough has been selected as the site for the 1992 Ontario Summer Games. The games are held every two years and will have almost 3,000 young athletes aged between 14 and 20 competing in over 20 different sports. Last week I was very pleased to be able to present a cheque for $500,000 from the Ministry of Tourism and Recreation to assist the city of Scarborough in hosting the event. It is good to see the ministry encouraging this event, which will be a real boost to young athletes across the province and to sports organizations.

For many of the athletes the games are an important step in their careers. From there, some will go on to the 1993 Canada Games. Many of Canada's Olympic best got their start at the Ontario Summer Games.

I would like to acknowledge the hard work that staff from the ministry and the city will be putting in before the event on August 20 to 23 next year, and the involvement of many volunteers. As I said, we have a fine range of stadiums and facilities and we have an enthusiastic population. We look forward to welcoming athletes, their families and supporters from all across the province.

CERTIFICATES OF CONGRATULATION

Mr H. O'Neil: Mr Speaker, I rise on a point of personal privilege, not only as it relates to me but also as it relates to all the members of the Ontario Legislature. It deals with the congratulation plaques that are being sent out through the Ministry of Government Services on behalf of, I understand, the members of the Ontario Legislature, signed by the Premier.

Just as of the last couple of weeks these plaques have had their wording changed so they no longer state, "On behalf of the Ontario Legislature, I, Bob Rae, congratulate you." The wording has been taken out so that they are, I feel, more politicized. They state that they are from the Premier himself. Also, now these plaques do not state the date they come out on. They do not say where they are dated. They do not give the day or the month or the year. The Premier may not be aware of this. I will send this over to him so that correction can be made on it.

The Speaker: I appreciate the point of privilege raised by the member for Quinte. This matter might best be dealt with by the standing committee on the Legislative Assembly. Perhaps the member would consider forwarding it to the committee so that all-party committee can take a look at this matter.

Mr H. O'Neil: On that same point of privilege, Mr Speaker: I will make sure the standing committee on the Legislative Assembly has a look at it, but I felt that out of courtesy the Premier should also be made aware of some of the things his staff are doing.

EXTENSION OF RESPONSE TIME

Hon Mr Cooke: In the same spirit of co-operation, Mr Speaker, there has been an arrangement with the three parties that the response time today will be increased by two minutes.

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STATEMENTS BY THE MINISTRY

GOVERNMENT SPENDING

Hon Mr Laughren: Our government has a commitment with the people of Ontario to manage the province's affairs openly and directly. We have begun to involve Ontarians in finding solutions to a wide range of challenges that we face.

It is with this commitment to openness and dialogue that I am informing members today of adjustments we are making to our spending plans. These midyear adjustments are a common practice of business and governments. They are being made now to manage the expenditure pressures which we are facing as a result of these extremely difficult economic times.

As members know, the recession has had a major economic impact on Ontario and placed enormous pressures on government spending. In particular, our commitment to social assistance has become more costly to sustain. Today, almost one million Ontarians rely on social assistance, many of them for the first time in their lives.

Expenditure management has been made even more difficult by the federal government's capping of transfer payments, which resulted in a shortfall of $1.6 billion this year.

Midway through the year urgent pressures and increased statutory obligations have made it necessary to review and adjust our spending in order to meet our budgetary targets and foster economic recovery. These pressures include $240 million in additional spending for social assistance, $53 million in extra costs for firefighting in northern Ontario and $215 million to cover the increased cost of pensions for Ontario teachers. These costs are a legal obligation for the province.

Besides those statutory obligations, we have had $35 million towards a new initiative to fund farm assistance, as I announced in this House yesterday, and $57 million in additional funding to support a variety of other pressures, including dealing with the Ontario Human Rights Commission backlog and the government's older worker adjustment program.

When we presented the budget earlier this year, the government made a commitment to actively fight the recession and to protect people from its effects. We are committed to maintaining health services, education and social programs.

With the measures I am announcing, we will stick to our budget plan, maintain our anti-recessionary measures, meet our spending targets, encourage economic renewal and free up funds to manage the pressures that I have identified. To do this, we are redirecting approximately $600 million this year. This represents an adjustment of about 1% of our total budget. All government ministries are participating in this process.

We are reallocating money from the following areas:

There is a $100-million reduction in operating budgets for supplies and equipment, consulting services, travel, advertising and communications. This is an immediate and permanent reduction averaging 5% in ministry budgets this year. It will be increased to 10% for 1992-93 and will result in an estimated $300-million cut in spending over the next 18 months.

There is $40 million in savings achieved by ministries managing and absorbing a portion of their current salary budgets. This year, the average salary settlement was 5.8%. We have given ministries a 5% increase in their salary budgets, with the understanding that the remaining 0.8% will be managed within the ministries themselves.

There is $460 million in redirected spending based on a range of saving opportunities. These include $50 million owing primarily to local school board delays in implementing their junior kindergarten programs, $85 million as a result of the late startup of the wage protection fund due to a delay in legislative approval, a $35-million saving on public debt interest payments as a result of good management of our borrowing program, and $50 million as a result of delay in passing legislation on proportional value pay equity. We remain committed to the pay equity initiative. I want to assure members that the money for this will be provided once legislation is passed.

This $460 million is available for a number of reasons. As noted, some new programs have not proceeded as quickly as anticipated due to delays either in government or among transfer payment partners. In some cases, legislation has not yet been passed.

I can assure members that these adjustments will be implemented without sacrificing urgently needed programs and services. In particular, I want to note that we will be maintaining public hospital system support levels for 1991-92 as previously announced.

These measures will enable us to keep our budget expenditures at $52.8 billion and will help us further our goal of encouraging economic renewal in this province. We continue to be committed to a deficit target of $9.7 billion. Full details of the revised budget plan will be provided in the Second Quarter Ontario Finances.

These actions are also consistent with the commitment which I made in the budget to establish an open and active approach to expenditure management. Our goal is to ensure quality service delivery and greater efficiency in the public sector. To move in these directions, we have initiated two strategies. The first strategy is to seek greater involvement of our employees, their bargaining agents, transfer payment employers and their staff and unions in addressing the issues facing the government. The second strategy involves rigorous and comprehensive policy and program expenditure review as part of the preparation for the next budget.

The experience, co-operation and participation of our employees and transfer agencies is needed to effectively address the fiscal and program challenges that we face. In recent weeks we have been meeting with public sector unions and employers to share with them our concerns and to impress upon them the importance of negotiating collective agreements which are affordable and fair to employees, employers and taxpayers.

My colleague the Chairman of Management Board will announce today the government's directions in introducing greater organizational efficiency, as well as our policy on wage increases for elected officials, political staff and senior management executives within the public service.

There must be changes in how this government operates, what it does and how it spends tax dollars. That is why the newly created treasury board, which we announced in the budget, has begun to work with all ministries to undertake an extensive program review. All major programs and expenditures are subject to review. This activity will become an integral part of the government's ongoing financial management and budget planning.

Through the reviews we want to ensure that spending is in line with the government's fiscal framework and consistent with our priorities of rebuilding the economy while maintaining programs that promote social justice. We are determined to realize cost savings which can be directed to achieve government priorities, and we want to identify ways of improving programs and services for the benefit of all Ontarians.

Initially these reviews will concentrate on programs which are experiencing rapid rates of growth, such as the Ontario drug benefit program, government funding for hospitals, commercial health labs and other insured health benefit programs. We firmly believe that if we are going to save medicare, we must begin by controlling its cost.

In addition, we will be reviewing expenditures for consulting and professional services, as well as government communications and advertising.

Ministries are being encouraged to involve their partners, clients and employees in their reviews. Closed door management is no longer acceptable. We will actively encourage input and co-operation to make the best decisions.

Wherever savings can be found, they will be made. Where the need is great, or becomes greater still, we will continue to tailor and redirect our spending, as necessary.

Let me reiterate that we will continue to manage our finances while providing the important services needed and expected by residents of this province. We will continue with the anti-recession program announced in this year's budget.

We must face the reality of these harsh economic times. These latest measures are intended to meet the financial pressures for this fiscal year. However, I can assure members we will take further action if and when it is needed to meet our fiscal objectives.

We have pledged to take the lead and work in co-operation with labour, business, communities and other governments in achieving economic renewal. These measures will enable us to continue the anti-recession strategy of our budget, support greater equity and fairness and set the basis for a vibrant economic renewal which brings jobs, training opportunities and investment to Ontario.

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ONTARIO PUBLIC SERVICE SALARIES AND BENEFITS

Hon Mr Silipo: The Treasurer has shared with us the province's financial picture as well as the series of initiatives that we are undertaking to manage the financial challenges we face.

In keeping with the Treasurer's message of asking all government ministries to make fair adjustments, I want to tell the House about this government's approach to public sector wages. I also want to tell the House about our intention to make the operations of the public service more flexible, efficient and effective.

Our fiscal resources come under additional pressure during a recession. Sound management of our public resources will help us create economic renewal. During times such as these, we have to be more concerned about spending money in the best possible way. We have to manage our resources more creatively. We have to be more innovative.

This recession affects all of us, and Ontarians understand that the challenge of restraint must be shared fairly and equitably. The government of Ontario will take up its part of the challenge.

We have seen other jurisdictions where politicians, senior managers and appointees have received substantial increases at the same time as the wages of average workers have been frozen. We have seen also in the private sector, on average, executive salaries increasing more than the salaries and wages of their employees.

This government believes that leadership in sharing the challenge of restraint must come from those most able to make the sacrifice and those with the responsibility for managing our finances. We are looking for equity in how we share the challenge.

I am today announcing a number of measures as part of the government's approach to public sector wages:

1. For the 1991-92 and 1992-93 fiscal years, there will no pay increases for MPPs, including the Premier, cabinet ministers and parliamentary assistants. MPPs will receive a retroactive 3% increase for the fiscal year 1990-91.

2. For 1992, pay for deputy ministers and the approximately 2,000 most senior managers in the Ontario public service will be frozen at the 1991 level.

3. For 1992, ministers' allocations for political staff will be frozen.

4. For 1992, pay for approximately 120 persons appointed to government agencies, boards and commissions will be frozen.

These measures show that the government, as the second-largest employer in Ontario, intends to lead by example, but not by the example that has been set in other jurisdictions. There they have effectively shut down the collective bargaining process in bad times and have imposed wage controls.

I want to make it very clear that this government believes in collective bargaining. I want to show that the collective bargaining process works during bad times just as it works during good times. For the process to work during times such as we face today, people need to know the problems. They need to know the fiscal realities. They need to know the facts in order to make reasonable decisions at the bargaining table. That is why we are talking and will continue to talk to public sector employers. That is why we are meeting and will continue to meet with public sector union leaders.

We spend 45% of the provincial budget, or almost $24 billion, on salaries and benefits for government employees and people such as teachers, hospital workers and municipal workers who work in the broader public sector. Each 1% average increase in combined Ontario public service and broader public sector wages costs provincial taxpayers almost one quarter of a billion dollars.

We are aiming for low wage settlements in forthcoming negotiations with bargaining agents in the Ontario public service. We are confident that they will understand the fiscal difficulties which we face and will work with us to achieve negotiated collective agreements that are fair to both our employees and our taxpayers.

We also want broader public sector union leaders, employers and workers to consider seriously the fiscal realities that we face and to incorporate them into the many and various collective bargaining processes that are under way and will soon be under way for future negotiations.

We know that cost adjustments in the government involve more than having an approach to public sector wages. As a government, we have to look at our own internal operations. We are considering measures to cut costs while at the same time making the public service more effective, efficient and flexible.

Among such measures are redeployment of resources, enhanced and innovative management practices and streamlining. We are also undergoing a fundamental rethinking and redesign of business processes to more fully use the capabilities of information technology.

Here too we want to involve our employees and their unions and associations in seeking solutions to the fiscal problems we face. We want to do this in the context of our continuing commitment to equity and fairness in the Ontario public service. That process has already started by way of employee relations committee meetings at each ministry. These are joint union-management committees. I am pleased to inform members that the Premier has asked every minister and deputy minister to convene these meetings specifically for the purpose of discussing ways to enhance government operations.

The Treasurer has made it clear that sound fiscal management is not just reacting to problems. Sound management involves constant monitoring and the ability to recognize problems and correct them before they become serious. Equally, sound management means involving all parties, management and workers, in the setting of priorities and the adjustment of spending patterns.

I am convinced that all of us, members of this House, broader public employers and public sector workers, will take this responsibility seriously and act in the interests of the people whom we all serve, the residents of this province.

ONTARIO HYDRO LEGISLATION

Hon Mr Ferguson: When I opened debate on Bill 118, I indicated that the government would be listening closely to what was said. I also informed the House that the government would be responsive where appropriate. We are responding.

The changes that will be moved during committee will make it clear that the intent and purpose of the legislation is to provide the framework for a new partnership with Ontario Hydro and remove the barriers to the implementation of our new energy directions. The primary goal of these new energy directions is to protect the environment while ensuring that the province continues to have a reliable supply of energy at reasonable prices.

We propose to make it perfectly clear that any policy directive that is issued must relate to the corporation's exercise of its powers and duties under the act and not lead to an extension of those powers and duties by means of government directives.

I have had the opportunity to meet with the representatives of the Municipal Electrical Association and a number of other stakeholders in this process, and I want to tell members that we as a government are responding to their concerns. We will continue to listen as the legislative process unfolds.

The government shall also move some minor wording changes dealing with the substitution of other forms of energy for electrical energy. The government is determined to proceed with changes to the act that will enable Ontario Hydro --

Mr Bradley: This is not what you said in the union halls in St Catharines.

The Speaker: Order, the member for St Catharines.

Hon Mr Ferguson: Mr Speaker, do I have to compete with this guy day in and day out? I want to tell the member how it works here. We have our turn and they listen, and then they have their turn.

Interjections.

The Speaker: Order. Would the member sit down.

Interjections.

The Speaker: I ask all members to come to order.

Interjections.

The Speaker: I ask the members of the House to come to order, please. If members are not capable of coming to order, then we will have to take a recess.

To answer the Minister of Energy's question, yes, we do have to put up with each other. I would trust and hope that would be in a little calmer and more reasoned approach than we have seen in the last couple of minutes. I would ask all members of the House if they could restrain themselves from pearls of wisdom and allow the minister to complete his remarks and then we can have the responses from the opposition parties.

Hon Mr Ferguson: In conclusion, the government of Ontario is determined to proceed with changes to that act that will enable Ontario Hydro to encourage fuel substitution because this could save over 700 megawatts of electricity by the end of the decade, an amount roughly equivalent to a Candu reactor, but at considerably less cost to the electricity customers than building new supply and enough to supply the electricity needs of a community the size of Ottawa.

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RESPONSES

GOVERNMENT SPENDING

Mr Elston: I wish to thank the Treasurer for providing us finally with an answer to what several hundreds of millions of dollars has meant. He would not tell us last week. Far from being open and consultative, he has been rather close-mouthed about all of the things he was doing as we led up to this grand announcement today. It is interesting that they have chosen to provide us with at least part of the picture as they see it today.

But as we look at one of the documents -- a document I was able to recover from his spin doctors' area, I guess; we have all of the communication messages that he wishes to put out through his caucus officials -- it is interesting to note that at one stage the suggestion is that there will be, if necessary, even further changes made when those items arrive on his doorstep. It seems to me that what we have today is only partly a confession about how far off their budgetary target these people actually are.

In Ontario, it looks like the piper is setting the tune, but the taxpayers are paying the price. This stuff is really interesting reading. This group of people --

Interjections.

The Speaker: Order.

Mr Elston: It is unusual but in this new Parliament and this new era of no finger-pointing, a kinder, gentler era, the New Democrats figure they can push us around a fair bit. I am suggesting that I am only going to outline for the public of Ontario the stuff that the government members have been told to tell the public. "Is this just fat-cutting?" it says. Answer to question 86 is, "No, we are closely scrutinizing our planned spending and are making decisions for reallocating money that have the least impact on people we serve."

All of this stuff is really interesting, but what it tells us is that there is not an independent thought among those people at all, that they have to really bow and scrape to the people who are spinning the story out of the Premier's office and out of the office of the Treasurer.

It seems to me that what we have not quite got yet is the full story behind all of the problems that an unaware group of people sprang on the people of Ontario in April 1991. It seems to me, after eight months leading up to their first budget, they should have known what was going on in this province. Now, some five months later, as they tinker around with some of these things, they should have the nerve to tell us the full story.

Perhaps there will be another day when I come back to ask the Treasurer whether his accusations about things being spot on, as they were suggested to be when he told us that. Certainly there are things in here that lead us to believe that the message is softened around the edges so that these people can retrace their steps if they have to, when the Treasurer comes back to this House again to explain how far gone wrong his whole economic scheming has really been.

While I am on my feet, I just wish to note one really good thing about this statement. The party that has long stood for universality of everything has told all its caucus members to go out and explain that essential services are being maintained, but what these people are doing is ending universality in health care. The types of paragraphs which were underlined by the Treasurer as he said, "All of these items are under scrutiny," ie, being controlled, mean there will be an end to the day when people can count on this government to deliver universal health care in this province. That is why he underscored that particular paragraph. That is why he put his emphasis there. That is why he chose to underscore the areas of real concern. For universality there may yet be a very big problem to come.

The Minister of Health, who I am aware has every intention of doing her best work, is about to be forced by that Treasurer and the member who is at Management Board to undo the things that were done in great ways through the 1960s, 1970s and 1980s. For me, this is a bit of a sad commentary as they refuse to tell us their true intent through this little statement. This tinkering they tell us about now is a forerunner of bigger things to come in health care. I am concerned that they will not share their full plan with us. I am concerned that they have refused to bring into this House, at an earlier date, their plans for long-term care. I am concerned that day by day we have to extract bit by bit, piece by piece, the details around the thinking in that organization.

What it means is there is no overall plan to direct the economic activity of this province. There is no overall plan to deal with the budgetary plan of this province. In fact, far from doing the things they said they stood for in April 1991, far from being the things they stood for in August and September 1990, this government is doing things which the people of the province will not find out about for several more months hence. It is our duty to try and pry as much of the detail from these people as we can. These people, because they merely say they are being open and consultative, cannot be believed, if you go by the series of answers that were delivered in this House in the first week as I tried to get at the basis upon which cuts were being made.

It looks like this is a "use it or lose it" economic statement. It basically says, "If you haven't spent it, I'm taking it back." He says, "There is a delay in spending this, a delay in spending that, so we are taking it back." A full 10% of the value, I think it is, of the anti-recession program is going to come from slower spending in health capital, some $70 million. To me, that is like taking that material out of that area and reapplying it against his anti-recession program, with the same result -- still costing jobs in our economy.

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Mr Sterling: Before this statement was made, I was hopeful that the Treasurer and his colleagues would come forward with something that would make the people of Ontario optimistic about the future. I thought perhaps the Treasurer had come to his senses and was ready to face the music. We have seen today in terms of his statements that he has not accepted his responsibility in terms of fiscal management for this province. All he has done today is delay the inevitable. He has done nothing today to restructure the basic problems of the debts and the revenues this province is engaged in in order to provide the necessary programs for its people.

Today, for instance, we saw a $240-million enrichment of the teachers' pension fund. This government insists on helping those people who are earning $40,000, $50,000 or $60,000 a year, while avoiding meeting the needs of pensioners, aged people and our health care system.

Last April the Treasurer had all the facts in front of him in order to determine what budgetary decisions he should make. Those same facts are present today. He knew what the federal government was doing with regard to transfer programs. He knew what other provinces were doing with regard to holding down their expenditures. Yet this province and this Treasury decided to do something else. As a result, he should find no surprises, save and except some very minor ones, with regard to his shortfall in revenues and in terms of expenditures. He had the facts to determine that his social welfare payments would be what they are today, yet he finds himself short on money and therefore having to take these very temporary measures.

Many of the measures he is taking today are merely a postponement of paying the bills from this year to next. A prime example is the wage protection fund on which he plans to make payments next year instead of this year, yet it is still a liability of this government.

Perhaps the most important matter we should be discussing today is the confidence of the people who generate wealth in this province in this Treasurer, in this Premier and in this government. Today's statement does nothing to restore that confidence, nothing at all.

I find one of the most tasteless parts of this whole speech and show today is the whole attack with regard to payments or increases in MPPs' salaries. We have across from us 72 members of the government. Not one of those members receives only an MPP's salary. Every one of those members has another sinecure. Cabinet ministers are earning the equivalent of $117,000 in this province. The Premier earns the equivalent of $124,000 in this province. Each and every government member in this Legislature has essentially received a 30% increase in his salary over the last single year. I would challenge any member on that side to provide the figures to me and I will show him that is the case.

For them to preach restraint when in fact they are at the trough is absolutely unacceptable. If this Premier and this cabinet want to engage in the tasteless political trick of ploying to the public on MPPs' salaries, I suggest they do as the Prime Minister and his cabinet did in 1987 and take substantial pay cuts.

Mr Stockwell: In April we had a $9.7-billion deficit. That deficit was intended to jump-start the economy of this province to fight our way out of the recession. On the date of that budget there were 893,000 people in Ontario receiving social assistance payments; in July there were 961,500. In the months of that budget, 85 layoffs affected 8,300 people; by August those numbers climbed to 150 layoffs affecting 16,000 people. In Ontario, 40,000 workers a month are exhausting their unemployment insurance benefits, by between 10% and 13%. That $9.7-billion deficit did nothing to jump-start this economy.

The $600-million tinkering plan of the Treasurer will do equally as little; absolutely nothing. The Chairman of Management Board says he is going to get tough with the employees. It is too late. They gave them a 14% increase in payroll last year. It is closing the barn door long after the horse has gone. They have to get it together. If it is going to save, it better roll back.

ONTARIO HYDRO LEGISLATION

Mr Jordan: I ask the Minister of Energy once again to please withdraw Bill 118. This bill is so flawed that he could not get his own government people to accept it. The minister is saying he needs it to remove the barriers so he can have power at a reasonable price in Ontario. What barriers? He has his own chairman, his own chief executive officer and he has loaded the board with his members. What barriers is he talking about?

ORAL QUESTIONS

GOVERNMENT SPENDING

Mr Elston: I notice with some interest that the Treasurer has tried to continue to say that he is fighting the recession rather than the deficit, that his directions or instructions to his caucus colleagues are to make sure they tell everybody, "We're not spending less." That is right here under "Other Points to Remember." Can the Treasurer confirm that in dealing with other areas of capital allocation, in colleges and in health, he was only able to retain his $700-million capital anti-recession program intact by those other ministries having sacrificed their capital budgets so that his alone would survive?

Hon Mr Laughren: Absolutely nothing could be further from the truth, which perhaps should not surprise me. The member should know that any of the capital holdback was only because it could not be spent in this fiscal year. Perhaps the member opposite would insist that we go out and spend money whether it was appropriate to spend it at this time or not. This government does not share that view.

Any kind of capital expenditures that are not being made, are not being made because the work simply will not be done in this fiscal year. It is not an attempt to decimate the capital expenditures whatsoever. We feel very strongly that the capital aspect of the anti-recession package is very important to start the whole process of economic renewal in this province. We feel very strongly that those were selected on a priority basis, and there is no attempt to cut back on capital expenditures. That is simply because of delays in construction, planning and so forth, not because we are taking back money on capital expenditures.

Mr Elston: I have been involved in the business of managing expenditures and I know exactly who is in control of approvals. You, Mr Speaker, will know as well that the Treasurer of this province is the person who can mandate approvals going out, with the assistance of his ministers. There are some delays which I am told are occurring due to an inability of his people to deliver approvals on plans that have been in front of his various ministries for several months.

Will this Treasurer confirm that his $700-million anti-recession program is less effective because of the lateness of implementing the capital programs of other ministries, that the jobs he creates are being partially offset by delays that are being forced on the capital budgets of other ministries?

Hon Mr Laughren: I do not know where the member is getting his ideas from. The $700-million capital expenditure program is virtually all in place. About 85% of it has either been completed, started, or ready to start, perhaps even as we speak. All of that money will be spent in 1991-92. That is our full intention, and there has been no effort whatsoever to slow that down. We want that money to be spent because we believe it creates jobs in the depth of a recession, and also because we think it is important that we are going to trigger economic renewal in this province. We think that is important to do.

The other capital expenditures that are not being done this year are simply because of delays in construction and so forth, not because they are being played off against the anti-recession package and not because we have any intention whatsoever of slowing down those capital projects -- absolutely not.

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Mr Elston: The Treasurer's remarks about delays in programming seem to fit the bill for most of the areas in which we can look at the savings he indicates.

First, municipalities are going to have to wait another month for payments in lieu of taxes. He has made them carry the burden of his cutbacks in that way by some $9 million. There is going to be a delay in the legal aid tariff for some unspecified time, and it will be $4 million borne by other people in the legal aid system. It appears the communities that have been awaiting the relocation of government jobs to their areas are being asked to carry the burden of the Treasurer's cuts by some $23 million as they await his approval of those movements.

Far from being a partner in these cuts that are being made, he is asking other people to bear the responsibility for his inability to understand how to deliver a budget to the people of the province. What consultations has he had with the municipalities about the lateness of payments? What consultations has he had with the colleges about the change in their base budgets? What consultations has he had with hospitals and others who have been awaiting his largess?

Hon Mr Laughren: First, the member will notice there are not major alterations in our commitments to those transfer agencies, so I think he is being unfair when he implies that in his question. As well, I remind the member that the total reallocation announced today is about 1% of our budget, roughly 1%. I can recall that about a year ago today we learned there was a 5% mistake in what was predicted by the previous government.

Interjections.

The Speaker: Order. The member for Scarborough-Agincourt has the floor. New question.

Mr Phillips: The question is to the Treasurer, just to try to get a good understanding of his thinking on the budget. I think the Treasurer can appreciate that the last few days have been rather unsettling for many individuals out there in terms of the impact the budget might have. Now that we are halfway through the year, I wonder whether the Treasurer can assure the House that he now has a very firm grip on the expenditures and that we will not be seeing any further significant budget changes over the next six months, that this is the final major adjustment we will be looking at.

Hon Mr Laughren: I respond first to the comments of the opposition critic about unsettling times. I really believe previous governments would not have gone through the open dialogue we have had about our expenditure problems. They would simply have been buried and resolved at the end of the year. We are committed to a more open process of talking to the people about things such as expenditure problems, and we intend to continue to do that.

On the question of what happens in the balance of the year, I simply say that to the best of our knowledge what has been laid before the Legislature today is accurate. There are some imponderables that are more difficult to forecast than others, and I will give a couple of examples.

The majority of sales tax revenues are not computed until well into January because of the November-December shopping period, in which there are a lot more sales tax revenues coming in. Second, corporate income tax revenues come in even later because of the way they are reported in the year. It is usually even March before they all come in. Finally, there is that volatility in which the payments from the federal government are made to the province on the provincial income tax sharing arrangement we have with the federal government.

Given all those precautions, to the best of our knowledge what members see before them is what they are going to get.

Mr Phillips: Just on the openness, I think we will all look back on the stories in the paper over the last few days and wonder where they came from and how they came, because that has contributed to it. I have no idea where they came from, but I think that has contributed to the unsettledness.

As a follow-up to what the Treasurer said, in terms of what his decisions will be if the revenue comes in lower, he will know that the federal government has its first-quarter numbers out. He will know that personal income tax is the number one source of revenue and corporate tax the third largest, and those numbers are substantially lower than the numbers he has in his budget.

I wonder whether the Treasurer could tell us what his plan is if revenues from those two sources come in lower. Is his plan to maintain the $9.7-billion deficit or is his plan to maintain the spending?

Hon Mr Laughren: That is a good question. First, I want to reassure the member that the stories about the size of the cuts and reallocations that have been around the last couple of days really came because I and the Premier responded to questions from opposition members. We think that is our job in this assembly and we will continue to do that. That is why the stories are out there. Previous governments would have sat tight on them and not announced anything until they were read in the House.

On the more serious question the member asked, about what happens if revenues do not meet our expectations, we have every intention of not allowing the deficit to go beyond $9.7 billion. We are quite fierce about that. It is our intention to manage our expenditures in such a way that this will not happen.

Mr Phillips: I think there are numbers out of the federal government that will allow the Treasurer to look at his revenue estimates now, but be that as it may.

I think many people were looking at this announcement today as some indication that the Treasurer may be moving off his long-term financial plan. I gather that is not the case. Therefore, I would like the Treasurer to confirm or deny that it is his plan -- he is really laying plans now for the next fiscal year -- to maintain the deficit at the $8-billion to $9-billion range and look at brand-new taxes in the $5-billion range. Is it the Treasurer's expectation to maintain the fiscal plan in his budget over the next four years that does call for those two things: deficits in the $8-billion range and brand-new taxes in the $5-billion range?

Hon Mr Laughren: We had this discussion in the standing committee on finance and economic affairs earlier this year. The member and others should look at the numbers in the budget as a commitment by us not to exceed those deficit numbers, because I think they are high enough as they are.

I say to the member, who is trying to ask a serious question, that the deficit numbers are achieved -- no surprise here -- by some combination of revenues and expenditures. Whether that combination is precisely what we see in the budget from the spring I do not know, but our deficit goal will be the numbers that are in that budget document from earlier this year.

Mr Sterling: I am not here to celebrate that we are going to hold to a $9.7-billion deficit and the doubling of our deficit over the next four years when this government is in charge of the Treasury bench.

Even before the Treasurer struck his first budget, he had limited his ability to constrain his expenditures by announcing some very high transfer payments, and also by indicating that he was not going to constrain the operating budgets of many of the provincial institutions and the civil service of this province. Then in his budget of April 19, 1991, he not only promised to maintain the expense base which, in my view, was irresponsible and was formulated by the former government in 1988 and 1989 -- in some ways I sympathize with the Treasurer. Bob Nixon is in London while the Treasurer is here to face the music. I understand his problems.

But even with the very broad base of the expense floor Bob Nixon had developed in 1988 and 1989, the Treasurer insisted this year on expanding that expense base by creating new social programs, creating new social expenses which we cannot pay for.

The Speaker: Would the member place his question, please.

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Mr Sterling: I had hoped that by this time he would have realized the problem he is faced with, that is, that he does not have enough money to pay for the existing promises and continues to expand the base for those expenses.

His leader was quoted recently in a tabloid: "Everybody has to wake up and smell the coffee. We don't have a printing press in the basement." Has the Treasurer woken up and smelled the coffee?

Hon Mr Laughren: I am sorry I missed that quote in one of the three Toronto tabloids.

I did want to respond to my critic from the Conservative caucus in a serious way. He is quite right that when we announced our transfer payments last spring, to the hospitals it was 9.5%, to the school boards it was 7.9%, and to colleges and universities 7.3%. I do not apologize for that. By doing that we maintained essential services in our health care system. We maintained a quality education system at the post-secondary level and at the elementary and secondary school level. I think that is important if we are going to be well placed for economic renewal in this province.

To be fair, the member should appreciate that we are sharing the expenditure problem with the Legislature and with the people in Ontario. Quite frankly, unlike some jurisdictions, we intend to stay within our deficit forecast.

Mr Sterling: I appreciate that. The Treasurer has also maintained the 10,000 new civil servants who have been in place since 1986 under the former Liberal government.

There is absolutely nothing in the Treasurer's statement today which indicates that there are going to be substantial tax increases needed in the next year. Is he intending to introduce substantial tax increases?

Hon Mr Laughren: I was just conferring with the Premier. I did not give him a chance to respond; I jumped to my feet.

It is fair to say, and I do not think it is a secret, that we have just started now, through the process of the treasury board, to look at all the major allocations in government -- all of them, without exceptions -- to determine what our expenditure base will be next year and therefore, following on that, what kinds of revenues will be required to support that expenditure base. So there really has not been any decision whatsoever on what, if any, tax increases there will be next year.

Mr Sterling: We have heard from the Treasurer, and I believe he is to be congratulated in his last budget by presenting the fact that he expected an $8.9-billion deficit next year. When we add things up, things that have happened over the last six or seven months, the shortfall, even with all the information he had, we can only come to the conclusion that either the deficit is not going to hit $8.9 billion next year or he is going to have substantial tax increases.

What the business community, the wealth providers, and the people of Ontario were looking for from the Treasurer today was some kind of indication that he had realized it was necessary to seriously constrain government expenditures. My concern over his statement today is that he has not really restrained very much, if anything, that he has not really met any pain at this time. He has not indicated to the transferees of the substantial transfer payments, decisions he will be making over the next three or four months, that those transfers may not be as great as next year.

Does the Treasurer not think that at this time he should perhaps withdraw the budget he presented on April 29, withdraw the bills he introduced in this Legislature and start afresh so that the people of Ontario --

The Speaker: Would the member conclude his question, please.

Mr Sterling: -- the business community, the wealth producers and the people will have some confidence in the Treasurer's ability to predict what is going to happen, and an acknowledgement that the paths he has taken in the past were mistakes?

Hon Mr Laughren: There was quite a bit in the question, but basically it was asking us to change the budget halfway through the year, which I do not think would make any sense. I want to remind the member that the budget we brought down in the spring included in it major commitments to essential services in this province. I have not heard the business community, to which he referred, tell us we should not be maintaining a good health care system, a good educational system and good infrastructure in this province so that we are well placed, when we come out of the recession, to take advantage of an economic renewal on which we are all counting.

I will tell the member something as well. The $700-million package, the anti-recession program which was designed to create jobs all across this province at the same time as there were 250,000 being laid off in the private sector, we think was a responsible thing to do. Quite frankly it was the private sector that took advantage, and quite appropriately so, of doing those capital works projects all across the province. I have not heard them complain about that.

Mr Sterling: There is no other business around.

Hon Mr Laughren: No, that is not fair. I believe the private sector agrees we should be maintaining those essential services in this province. I continue to believe that.

ONTARIO PUBLIC SERVICE SALARIES AND BENEFITS

Mr Stockwell: My question is to the Chairman of Management Board. I read his statement very carefully. He talks about "flexible, efficient and effective." He spoke about creating "economic renewal" and that "the challenge of restraint must be shared fairly and equitably." Finally one of his better ones was that he intends to "lead by example" in getting tough with the wage package.

He has at least 92,000 employees under his direction. He is talking tough. He has frozen 2,000 people out of 92,000. Those people he froze, the majority of them, received increases of upwards of 11% this year. Would the minister tell me exactly how that is going to fight the recession and show restraint, when he only shows the capacity to hold back 2,000 employee increases rather than the 92,000 who work for this province?

Hon Mr Silipo: Either I was not clear or the member opposite has forgotten about the other half of the statement. What I said in the statement very clearly, and what I want to reiterate for him and members of the House, is that I think we are showing by example the kind of direction we want to set, and yes, we have begun by sharing the challenge we face equitably in terms of the people in senior management, the MPPs, cabinet ministers, etc.

I think that concomitant with that goes our commitment to the collective bargaining process. We are not going to shut down the collective bargaining process because we are in tough economic times. We are going to show that the collective bargaining process can work even in these tough economic times. We are confident that our employees and their unions understand that and we are confident we can get a settlement that is fair to our employees and fair to our taxpayers.

Mr Stockwell: As I said in a response, the horse is gone. He gave them 14% last year. The time for restraint has passed. We get groans from the front benches.

He hired more people. He should have made the decision in April. This Band-Aid approach is not going to solve the problem. The Treasurer stood in this House and said, when the exact option was outlined to him about freezing public sector employees' salaries at 2%, that this would have saved an admitted $700 million. We would not have to be here today if he had taken the right approach, but the Treasurer said at the time, "No, if we had frozen them all it would have saved $1 billion, but I don't think that's the solution."

How is the minister going to face the Ontario Public Service Employees Union with the Treasurer saying that to freeze salaries is not the solution? He is going to come back to this House and tell us he is going to bring in a tough negotiated settlement at 2% or 3%. The Treasurer has already scuppered him. He has no capacity to do this because he only froze 2,000. What is he going to bring back to the people of the province as far as a settlement is concerned?

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Hon Mr Silipo: What I hope to bring back is a deal that is fair to our employees and fair to our taxpayers. If we were to take to its logical conclusion the position the member opposite is taking, he would be arguing that the time for restraint is over.

We are saying, I think very clearly, that we are still very much in a time of restraint. We are still very much in a time when we need to be very careful over the next couple of years about how we spend our money. I think everyone understands that. We are going to do that in a way that respects the collective bargaining process, but still delivers on our commitment to be fair to our taxpayers and deliver our responsibilities in a fair and equitable manner.

Mr Stockwell: The time for restraint was about $9.7 billion ago. It is long since past where he can talk about restraint. The minister has to start acting.

The other point I would like to make to the minister and the question I would like to ask is that he does not want to deal with the retroactivity. He has increased salaries on the payroll of this province of some 14%. He tells me he cannot go back retroactively. Yes, he can. His cabinet has retroactively slammed the landlords in this province. His cabinet is retroactively passing a Hydro bill that will change the Hydro corporation. His cabinet retroactively has talked about the wage protection fund. The government seems to be able to go retroactively when it fits its very narrow guidelines and its political philosophy.

The people of this province are substantially broke. This government is substantially broke. It has $9.7 billion in deficit. Why can the minister not go back retroactively and deal with the 14% pay hike when the government could hammer the landlords, change Hydro and deal with the wage protection fund? Why can he not do it here when we could save the taxpayers some money?

Hon Mr Silipo: Clearly decisions have been made in the past year, both through the collective bargaining process and in terms of decisions that the cabinet has made and the government has made. I think what we are doing is looking to the future and to what our responsibilities are, and as I indicated earlier, we intend to do the job in the best way we can, respecting the collective bargaining process in those areas where we have a responsibility to bargain and to deliver on our responsibilities to our taxpayers.

If the member wants to speak about the $9.7-billion deficit and the slash-and-cut approach that he would make, I think he should be the first to be reminded that in a slash-and-cut approach, the people who would suffer are the ones who can least afford to pay for those kinds of issues and who need the support the most.

ASSISTANCE TO DE HAVILLAND

Mr Kwinter: My question is to the Treasurer. Today Sir Leon Brittan, the European Community commissioner of competition, announced they would be blocking the sale of de Havilland by Boeing to Alenia SpA and Aerospatiale SA. Given the fact that his government had made a commitment to save the 5,000 jobs at de Havilland, given the fact that it had made a commitment to invest up to one third in the new company, could the Treasurer tell us what the government plans to do to keep those particular promises that it made?

Hon Mr Laughren: I think I will refer this question to the Premier.

Hon Mr Rae: I appreciate a chance to answer the question. I can tell the honourable member that I have today been on the phone with Michael Wilson. I intend to speak to the Prime Minister later on today to tell him the seriousness with which we take the decision of the EC.

We will be working with all the parties involved, obviously the two prospective purchasers to discuss whether there is any other possible arrangement that can be made, with Boeing, with the federal government and with any other parties with respect to the future of the company. I think the clear message from this government in terms of our willingness to participate in a one-third participation in the ownership of the company has been that the commitment on our part is there to maintain these jobs in the province to the very best of our ability. That was the commitment we made. We have lived up to that commitment.

We are obviously very disappointed at the decision that was made by the European commission and we are going to do everything we can to see that de Havilland remains not only a viable company, but an effective leader in what we think is a crucial technology to this province and to Canada. We intend to do everything we can to continue in that role.

Mr Kwinter: The reason I directed the question to the Treasurer was that I think that there is a financial implication.

The Minister of Industry, Trade and Technology announced the other day that he would be coming forward very shortly with a new industrial strategy. The response to that by the Canadian Federation of Independent Business was that this industrial strategy was "some cockamamy program designed to give the NDP a warm, fuzzy feeling and little else."

My concern is that the Premier is obviously still going to pursue some sort of financial salvation of de Havilland. He is announcing a financial program, I assume, to implement an industrial strategy. Given the Treasurer's statement today, given the constraints the government finds itself in, how is he going to finance these adventures?

Hon Mr Rae: If the Liberal Party of Ontario is saying that 5,000 jobs and trying to protect as many jobs as possible is an adventure, let the record show that.

We have been working closely with the federal government, whose economic philosophy is well known and is not our own. They have expressed a commitment. I have spoken with the Prime Minister on this matter many times over the last month. He has told me throughout that the federal government attaches importance to this company and will not abandon the province with respect to the de Havilland workers. I would be very surprised if the Liberal Party of Ontario is saying it would do even less than Brian Mulroney with respect to this company.

I would say in all sincerity to the member that the decision that has been made by the European commission is obviously a disappointing one. But I would say to the member for Wilson Heights that it is an investment for this province to maintain our ability to compete in world markets with respect to this technology, an investment that has to be made by the private sector and that has to be made, in support, by the public sector. There is not a country around the world whose aerospace industry is not supported by the public sector in one way, shape or form, and that reality is there.

The Speaker: Would the Premier conclude his remarks, please.

Mrs Caplan: How are you going to pay for it? Floyd has to put the money in place.

Hon Mr Rae: If the honourable member is saying, "Where are you going to get the money?" I can only tell the honourable member that obviously the government is looking very hard at its entire investment portfolio as we begin to look more strategically at what we can do to maintain Ontario's competitive edge --

The Speaker: Would the Premier please complete his response.

Hon Mr Rae: -- to maintain our ability to compete in higher technology and to look at those industries that have a strategic value and a strategic future for Ontario. I think it would be irresponsible --

The Speaker: Would the Premier take his seat, please.

NURSING HOMES

Mr J. Wilson: My question is to the Treasurer. What really makes my blood boil when I reflect upon the spending habits of the Treasurer's government is that he was able to find $500 million to increase the payroll of the civil service over the past year, but he is unable to come up with $20 million for seniors and the frail elderly in nursing homes.

Seniors have come to his government; they have asked for just 4% of what he has awarded civil servants and he has said no. In his government's speech from the throne, it was stated, "We recognize that saying yes" -- to those persons who are vulnerable -- "will mean saying no to others whose claims are presented more loudly." How can he possibly justify saying yes to OPSEU but no to the seniors in nursing homes in this province? Let the Treasurer justify that.

Hon Mr Laughren: I do not recall saying no to nursing homes in the province, to start with. Second, the Conservative caucus persists -- this is not the first time it has happened -- in trying to play one group of Ontario citizens off against another. I think that is a regrettable thing the Tory caucus is doing in this province. It is not a useful exercise to have people out there, all of whom have legitimate needs, played off against others who also have legitimate needs.

All I can tell the member is that we intend to do what we can, given the fact that we are serious about keeping our expenditures under control and in keeping with the statement in the budget about committing to the economic renewal in this province.

Mrs Caplan: Never shuts up.

The Speaker: The member for Oriole will please come to order.

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Mr J. Wilson: We are not playing a game over here. The Treasurer's conscience should be bothering him. He said yes to large pay increases for civil servants and no to residents of nursing homes. Yesterday in this House his Minister of Health said she is strapped, she cannot do anything till 1993, she hopes she can, but nothing specific at this time.

The government's reorganization of senior management resulted in pay increases of up to 11%, or $20 million. Why is it that the Treasurer was able to come up with $20 million for senior bureaucrats but nothing for the seniors in nursing homes? Where are the seniors in this province going to live when nursing homes close after October 15? I ask the Treasurer to answer that question. We deserve a response and the seniors in this province deserve to know where they are going to reside after October 15.

Hon Mr Laughren: I do not think the member was in the House yesterday when the Minister of Health responded, and what he is saying is not quite what the Minister of Health said. She did say she would be responding to that issue.

I want to correct the record as well. This province settled with the civil service, the workers represented by OPSEU, for an average amount of 5.8%. If the member was listening, he heard me say today that of that 5.8%, the ministries would be funded for 5% only and the 0.8% would have to be absorbed in the normal expenditures of the ministry. I wish the members opposite would use accurate numbers, not exaggerated ones, when they are trying to make their points.

ASSISTANCE TO FARMERS

Mr Mills: My question is to the Minister of Agriculture and Food. Over the last few months, my office has been packed with farmers from my riding on a weekly basis. They do many things. They are corn growers, apple growers, chicken producers, fur growers, the whole spectrum of farming. These farmers are up against it. I know yesterday the minister announced his emergency assistance package. What is this going to do for the average producer in Durham region?

Hon Mr Buchanan: The member is correct. Over the past number of months he has been talking to me about the farmers from his region and some of the concerns they have. I would like to inform the member, though, that this program we announced yesterday is not geographically targeted; it is a general program which tries to address the concerns across various commodities.

He mentioned apples, I believe, and he mentioned the fur industry. They will both be assisted in some way with this program. Also, of course, the grains and oilseeds sector, of which I believe there is some in his area of Durham, will be assisted. The farm interest assistance program, which was topped up with $11 million for those people who are in serious financial difficulty, also will benefit producers across the country, including those in Durham. There also is an emergency component to it to help those in serious financial difficulty, and I am sure that some farmers in the member's riding will also be able to benefit from that.

Mr Mills: I am convinced that the farmers in my riding are going to receive this program with open arms, but I guess my supplementary question is, how soon is the money going to get into their pockets?

Hon Mr Buchanan: The cheques are not in the mail yet. In regard to the $11-million top-up to the farm interest assistance program, that program is an ongoing program and the cheques will continue to go out as quickly as possible. We have already put out around $40 million of that $50-million announcement. This additional money will flow immediately.

In the other components of the program, the money will be able to flow this fall. We tried to use existing programs or other programs in which criteria have already been established, so we expect the cheques can flow probably in November and December, certainly before Christmas.

FUEL SPILL

Mr McClelland: I have a question for the Minister of the Environment. Let me recount some facts that took place last weekend. A resident farmer of Perth county phoned the minister's spills action hotline to inform them that he had a full 1,000-litre aboveground gas tank leaking on his property. He wanted direction from her ministry on what he should do with the leaking tank. He was informed there was no one there to assist him because it was lunchtime and could he please call back later.

At 1:05 pm Friday he phoned the hotline back and was informed by one of the minister's hotline officials that he should phone the regional office in London and it would deal with his concerns. At 3:30 pm, after numerous calls, he was finally informed by somebody in the regional office that he should not move "one teaspoon of contaminated soil until officials of the ministry were there to inspect the site."

However, he was informed that the person he was speaking to only worked until 4:30, and after all, it was the weekend. Possibly he could get back to the office and somebody would be in touch with him a little bit later. Nobody called. He did not hear from anybody from the ministry all weekend while the gas continued to leak, and 1,000 litres of gasoline leaked into the soil over the course of the weekend.

Monday, 8:30 am, the same gentleman called the London regional office and was told that the person he had dealt with was now on vacation. They could not do anything. He spoke to another official, who said, "Maybe we can get out there today and maybe we'll be able to help you out." Late Monday morning, they decided to respond and were given permission by the ministry, by an official, to now move the empty tank with 1,000 litres of fuel leaked into the soil.

The Speaker: Could the member place his question, please.

Mr McClelland: So now there is contamination, and the minister knows the problems that are resulting.

Environmental emergencies do not occur between 8:30 and 4:30, exclusive of lunch-hour, Monday to Friday. Obviously in this case the process to deal with this kind of emergency did not work.

I have to ask, is one of the cost-cutting measures imposed by the Treasurer within her ministry resulting in this kind of incompetence with respect to the hotlines? What is happening with the ministry in terms of response?

Hon Mrs Grier: Let me respond to the second part of that question, because I want to assure the member that certainly none of the allocations and adjustments within our budget have affected our programs.

I am very concerned about the facts that the member has just related. I am not aware of them and he has not given me any of the background or the names and the times. I hope he will do that and I would like to take the question as notice. I will undertake to find out the facts and get back to this House as soon as I can.

Mr McClelland: I appreciate the minister's undertaking to deal with this specific issue. On a more general basis, I would ask the minister if she would undertake at this point in time to examine the processes within her ministry to ensure that this kind of thing does not happen again.

I hope that we will not go through a consultative process. The minister introduced yesterday her long-awaited and much-promised bill of environmental rights in terms of its consultative process. Recently, in Traverse City, the minister said she is really concerned about toxins but she has to consult about it. I would hope we could have some definitive action forthcoming from this minister to direct that this kind of thing does not happen again, not just with this specific situation, but to ensure that it does not happen on an ongoing basis. I hope to have that undertaking from the minister as well this afternoon.

Hon Mrs Grier: The member has been a parliamentary assistant to the Minister of the Environment in the past and I am sure knows quite well that the spills action centre is manned or womanned 24 hours a day and is there on emergencies. The response time is often extremely fast in our ministry. I do not know the background of the situation he has described. If the facts are as he has outlined, I am undoubtedly very concerned. I want to get from him the information that he has, and as I have said, I will undertake to find out what the story is within the ministry and get back to the House.

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TAXATION

Mr Carr: My question is to the Treasurer. I think the Treasurer has found out something very important today, that all the social programs that the people of this province are so concerned about do not depend upon the compassion of government, but they do depend on having a healthy and prosperous economy to support them.

I was interested in reading the Financial Post of the 27th, and I will read the members a copy of it. "Ontario's tax competitiveness in manufacturing has fallen farther behind that of neighbouring provinces and US states since the mid-1980s." That is a Conference Board of Canada report.

I also hold up a Canadian Federation of Independent Business summary that said the biggest obstacles business is facing are the total tax burden and government regulations.

My question is very simple: Will the Treasurer commit to the people of this province that he will not introduce any taxes that will hurt the competitiveness of Ontario industries?

Hon Mr Laughren: This government would never knowingly introduce any program that would harm our competitiveness. I think, to be fair, the member opposite should appreciate the fact that the conference board study did not include all taxes when it was comparing the competitiveness. They did not include, for example, payroll taxes, and there are lots of cases where payroll taxes are lower in this province than in other jurisdictions. The conference board admits that, by the way. They are not pretending that this is an all-inclusive study.

To be fair, I think we have a lot going for us in this province in terms of competitiveness that is not just measured by comparing taxes. We have an educational system and an infrastructure second to none in Ontario, and we intend to maintain that.

Mr Carr: The problem is that the business community does not believe the Treasurer. The Canadian Federation of Independent Business says: "This government is good at listening. They parrot back what we say, but then we do not see any results." The Ontario Chamber of Commerce says, "There is a widespread business perception that the full burden of Ontario's tax system has reached the point where other jurisdictions are more attractive." That is on page 13 of the Ontario chamber's recommendations. "The overall objective of the Fair Tax Commission must not be greater tax revenue."

It is very clear that higher taxes mean fewer jobs, and that translates into fewer moneys for social programs in this province. My question again is to the Treasurer. The Fair Tax Commission is looking at this right now. Will he commit to the people that he will not introduce any more taxes that will drive jobs out of the province?

Hon Mr Laughren: Of course we do not want to drive any jobs out of the province; we want to attract jobs to the province. I think the member opposite would agree that it is --

Mrs Caplan: But you're doing it. The only thing you're managing to do is drive business out of here.

The Speaker: Order, the member for Oriole.

Hon Mr Laughren: I wish the leader of the official opposition would put the member for Oriole on the question period list so she can vent her anger in a more constructive way.

Mr Elston: On a point of order, Mr Speaker: The member has asked questions to the Minister of the Environment and other people at times and we do not get answers. It is nice to know that the Treasurer has asked me to put this member in question period. I would like him to keep his Premier in the House for more than 30 minutes for every question period. If he wants to have a real decent time in this place, then he should start pointing his fingers at his Premier, because I am fed up with his stuff.

Interjections.

The Speaker: Would the Leader of the Opposition sit down. Things were moving along reasonably well. If we could just have everyone relax a little, we could conclude the question and response between the member for Oakville South and the Treasurer.

Hon Mr Laughren: Thank you, Mr Speaker. There has never been a Premier as accessible to this House or to the people of the province as the Premier who sits in that chair right now.

Interjections.

Mr Elston: On a point of order, Mr Speaker --

The Speaker: What is out of order?

Mr Elston: What is out of order is that he is suggesting things that are completely not true. It is not true that the member for York South is available to this House. He has not been here more than one day this week. He was here two days last week.

We are not going to take this type of shenanigans any more. They cannot create some kind of illusion for that person. He is not paying any attention to this House. He was off in Skokie, Illinois, on Monday. He was at the ball game last night, but he was not in this House. He was in his office yesterday during question period, his itinerary told us. But he had better start coming clean with the people. He cannot take us down that path any more.

Interjections.

The Speaker: Order. There is nothing in the standing orders that directs the Speaker to be involved in members' attendance. I do appreciate that it is a point of contention between two sides of the House. The clock continues to tick and the Ontarians sitting at home in their living rooms, 350,000 of them who watch us every day, would, I am sure, like us to continue with questions and responses.

Hon Mr Laughren: The member for Oakville South asked a good question, a most appropriate question and a serious one. I want to assure him we are very much aware of the whole competitiveness question of Ontario vis-a-vis other jurisdictions. That is absolutely critical to us. If we are going to have a competitive province and are going to be able to put ourselves in place for sustained economic growth and economic renewal in the years to come, I believe we simply must maintain our level of education and of the infrastructure that is in place, including post-secondary education, I might add.

As well, we get a lot of comments on how the health care system in this province makes us a lot more competitive than a lot of other jurisdictions. It is time we started saying that.

The Speaker: Could the Treasurer conclude his remarks.

Hon Mr Laughren: Finally, I want to assure the member that I do not think anybody has met with the business community and been more accessible to the business community over the last year than I and the Premier.

NON-PROFIT HOUSING

Mr Fletcher: My question is for the Minister of Housing. The need for affordable housing continues to be one of the most pressing problems we face across Ontario. In my own riding there are far too many people who do not have access to safe, secure and affordable housing. During recessionary times the demand for affordable housing rises sharply.

I know her ministry, in co-operation with many community groups, is continuing to develop much-needed housing. However, it has come to my attention that the deadline for the Homes Now program, which was to provide up to 30,000 non-profit housing units, expired yesterday. What happens to those projects which have been working towards commitment but have missed yesterday's deadline?

Interjections.

The Speaker: Order.

Hon Ms Gigantes: I am pleased to recall for the members of this Legislature that the Homes Now program, which was started by the previous government and which had a commitment of 30,000, was extended, in terms of the deadline for the program, as of last October by our earlier Minister of Housing. The deadline is indeed September 30. As of August 1990 only 5,000 units had been committed under that program. As of the end of this week, we expect 25,000 units will be committed. We feel we have made great strides forward in this year.

The allocations that still can be made will be made on a case-by-case basis. We have had a lot of applications from community-based groups, as the member points out. They will be considered on a case-by-case basis from now on.

Mr Fletcher: Exactly how many of the units that have been committed actually have people living in them now?

Hon Ms Gigantes: I am pleased to report that 7,000 units are now completed, and we expect a full 30,000 to be completed by 1993.

MENTAL HEALTH SERVICES

Mr H. O'Neil: My question is to the Minister of Health. It relates something today with the Treasurer's announcement about universal health care and long-term health care.

Last June, I made the minister aware of the large number of suicides in the Hastings and Prince Edward area: Seven teenagers and 22 adults committed suicide over the course of one year. At that time she promised to look into the matter to see if she and her ministry could provide assistance. I also mentioned that the Hastings and Prince Edward counties' mental health program had a waiting period of approximately three to six months for mental health counselling dealing with suicidal tendencies and sexual abuse. I am told by many of my members that these same conditions exist in other ridings across the province.

What has the minister done to eliminate this problem?

Hon Ms Lankin: The member raises an important issue, one which I took seriously when he raised it at the time. We did take a look at the mental health budget and the programs that are in place in that area.

I think all of us agree that spending in that area needs to increase over a period of time, but we have to do it in a way that recognizes there is an overall allocation within the health budget right now, and it has to be done by slowing growth in some of the high-growth areas. That is part of the process we are doing, trying to find money for reallocation.

Specifically with respect to the community the member raised, the member knows we have spoken about it since. When he alerted me that he was speaking to some people in the community and was hoping for a more positive response from me in terms of actual dollars at this time, I indicated to him that I was unable to provide any particular grant right now but I would try to get someone from the ministry to work with the district health council and the community mental health agencies there to look at how the money is being spent to see if there is a way they could reallocate within their own program to address this very important need in that community.

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Mr H. O'Neil: I realize the minister is telling me she is going to be looking at it, but that is basically what she told me four or five months ago. They tell me that the waiting lists now, rather than being three or six months, have gone up, in some cases, to approximately nine months.

Years ago, when we were in government and the members opposite were in opposition, although the minister was not there, if there were one death in the community or one person held up from being operated on -- here I have 20-some people in a matter of one year, not only in my riding but in the riding of the Minister of Agriculture and Food and the riding of the member for Prince Edward-Lennox-South Hastings, 20-some people who have committed suicide and the minister is telling me she is going to have another look at it and see whether she can get some help or allocate some more dollars.

I appreciate the minister's intentions, but we cannot wait. We have to have something done on it. It is an important matter. I would hate to come back to the House in a week or a month or a few months and say, "We've had another suicide and the minister hasn't done anything about it." Let's get off our butts and let's get moving and get something done about it.

Hon Ms Lankin: I can understand the frustration the member is expressing. I did not say or commit that I was going to look at it again. In fact, I looked at it and was unable to provide any more money at this time. What I did indicate is that we would offer assistance to help the groups in that area see if they could designate or target some of their programs to this, if that is felt to be an area that is lacking and needs more assistance.

At this point, I cannot find more dollars to put into a program until --

Interjections.

The Speaker: Order.

Hon Ms Lankin: Thank you, Mr Speaker -- until we successfully work together to try and bring down the rate of growth in some of the institutional areas and other areas.

There are no new dollars. If the member will look at the budget, we have increased dollars in this area. I would hate for him to come back in a week or two weeks and tell me someone else has committed suicide. I am sure he or someone in this House, or maybe even in my own riding, will be able to say that. These are very difficult times. People are facing incredible human problems out there. I look to the north and I see the people facing problems. I look at native communities. In terms of the rate of suicide, it is very serious. We are trying to designate money towards that, but there is not new program money that I can give to the member's riding at this time.

EDUCATION PROGRAM EVALUATION

Mrs Cunningham: I have a question for the Minister of Education. The Minister of Education has stated publicly that Ontario will not participate in the national school achievement indicators program because the test will not match the demographic profile of students in the province.

Last evening, on The Journal on CBC, the Honourable Jim Dinning, the Minister of Education for Alberta, stated --

Interjection.

The Speaker: The member for Oriole, please come to order. Will the member for London North take her seat for a moment, please.

Interjection.

The Speaker: I asked the member for Oriole to please come to order. I am trying to hear the question as posed by the member for London North and I would appreciate your co-operation in being able to do that. The member for London North.

Mrs Cunningham: Thank you, Mr Speaker. I will try again.

Last night, on CBC's The Journal, the Honourable Jim Dinning, the Minister of Education for Alberta, whom I know the minister has been in touch with, stated that the Council of Ministers of Education, Canada, could accommodate Ontario's concerns about gender or racial bias and the length of time a student has been in Canada.

Given the short time frame right now and in light of that statement and in light of the positive statements made by the Premier last Thursday, I am wondering if the minister will take the opportunity at this time to advise this House of how the discussions on national testing are progressing and whether she is seriously reconsidering the decision not to participate in the national testing program.

Hon Mrs Boyd: From the very beginning our position has been that if we can come to an agreement among the ministries of education around the issues of demographics, the consultation period, the curriculum tie, all of those issues that are so important in this, if we can come to that agreement we certainly will be prepared to go back into an active stance from our observer stance.

I asked for that in December. I asked for it again in February. Finally, when we had our meeting last week, the rest of the ministers, who of course had begun to encounter exactly the same difficulties in selling this to their own provinces, agreed to try to negotiate a settlement. The position we are in right now is that we will meet again before Christmas. Our deputies are charged with trying to come to an agreement in a memorandum of understanding to which we are all bound in terms of the project.

The Speaker: Would the minister conclude her response, please.

Hon Mrs Boyd: If that occurs we will go ahead with it, but if it does not occur we will maintain our observer status.

Mrs Cunningham: I am obviously encouraging the minister, in the best way I can, to come to some kind of agreement. It was pointed out to me just yesterday by a group of parents from the North York board that indeed in some of our schools -- and parents are very concerned about this matter -- there is a lack of marking going on around correcting spelling. It may seem like a simple matter, but these are the kinds of questions I think the public is not quite up to speed on when it comes to the kind of expectations we have in our school system, and they of course vary from community to community.

We are looking at standardized testing results, certainly internationally -- and we have some results there -- and we certainly know about the Benchmarks project in Ontario, but I think at this time in the history of our country parents are very concerned about how we do match up across Canada. I would just like to encourage the minister, and perhaps she would take the opportunity, to tell us whether she has been able to get the teachers to talk more positively with regard to the demands, I would say, by parents that we do have standards within our system and that they are measured across the country.

Hon Mrs Boyd: I think the member is well aware that teachers are also concerned about accountability and they are tired of the attacks on them by the Conservative right that they are not concerned about accountability. Teachers in this province are very concerned about that, but they are equally concerned about the way in which standardized tests have been used to further disadvantage the marginalized in our society, and that is what we intend to protect them against. We are absolutely in concert with our professional teaching partners when it comes to ensuring that any testing that is done does not further marginalize children.

ATTENDANCE OF PREMIER

Mr Mahoney: On a point of privilege, Mr Speaker: You will note that during the question period there was some acrimony over the absence of the Premier. I would like the Speaker to help me out with a ruling.

At approximately 40 minutes to go on the clock, my House leader informed the Premier that I had a question to place to him at some point during question period. He indicated he would stay for that, yet at 24 minutes to go he got up and left. Along with him, of course, the entourage of media leaves. One cannot blame the media because they have to follow the Premier out to get the answers. My point of privilege is that I believe my rights as a member have been violated by the Premier, who shows no interest in staying in this House to hear questions by members of the opposition directed directly towards him.

I would like the Speaker to rule whether or not it is indeed a violation of my privileges and a violation of the rights of all the people of Ontario who would like to hear the opinion of the Premier on legitimate questions being posed by members of the opposition. It is our job and our responsibility, and I submit it is his job and his responsibility to stay in his place so that we can do our job.

The Speaker: To the member for Mississauga West, fortunately or otherwise, there is nothing in the standing orders which is of assistance to either him or me on this matter. It is, however, perhaps just a friendly suggestion, a topic of discussion for the House leaders at their regular weekly meetings, but there is nothing in the standing orders that assists me or him in this matter. I appreciate his drawing it to my attention, however.

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Mrs Cunningham: On the same point of order, Mr Speaker: I too would like to take this opportunity. I suppose sometimes the members opposite think the work we do in opposition is somewhat trite, but it happens to be part of the democratic process. I also believe, certainly since the time I have sat in this House, that it has been the priority of the Premier to stay as long as possible. The previous Premier would always tell us if he was leaving early. Specifically, today the Premier did not say he was leaving early. There have been times when he has advised us and therefore we rearranged our questions.

I know it is not within your purview, Mr Speaker, but I think it is our responsibility to advise the government House leader that we too are concerned that this has happened three times in the last two weeks. It is not a good beginning, so we would very much appreciate the Premier staying in the House till the end of question period, as far as reasonably possible, and at least advise us if he is leaving.

The Speaker: If the member for London North, no doubt as she always does, was listening intently to the response I provided for the member for Mississauga West, the same applies of course. I appreciate it whenever members bring concerns to my attention. It reflects of course an interest in the parliamentary process and that is something I naturally applaud.

CERTIFICATES OF CONGRATULATION

Hon F. Wilson: On a point of order, Mr Speaker: In the matter of the certificates raised by the member for Quinte, I would like to inform the House that I have already instituted an inquiry into the matter and I will report to the House when I get the results.

PETITIONS

OATH OF ALLEGIANCE

Mr Kwinter: I have a petition signed by about 200 people.

"To the Legislative Assembly of Ontario:

"Whereas Her Majesty the Queen, at her coronation in 1953, took a personal oath to the people of Canada, and Canadians have always reciprocated with oaths of allegiance and service to the person of the sovereign;

"Whereas it is our right and duty to take oaths of allegiance and service in such form;

"Whereas Ontario regulation 144/91 made under the Police Services Act, 1990 denies Ontarians this right;

"We, the undersigned residents of Ontario, loyal to Her Majesty Queen Elizabeth II, Queen of Canada, petition the Legislative Assembly of Ontario to resolve that His Honour the Lieutenant Governor in Council be requested to revoke Ontario regulation 144/91 and restore the traditional oath of service to Her Majesty for police personnel in Ontario."

PORNOGRAPHY

Mr Carr: I am pleased to table a petition signed by concerned residents of Oakville and Burlington and surrounding areas which reads as follows:

"To the Legislative Assembly of Ontario:

"We, the undersigned residents of Ontario, draw the attention of the Legislative Assembly to the following:

"That the production, sale and rental of pornographic and obscene material in Canada has a direct negative and destructive influence leading to sexual assault upon women and children, including degradation, exploitation and humiliation;...

"That elimination of the production, sale and rental of pornographic and obscene material in Canada would decrease the incidence of violence against women and children.

"Therefore, your petitioners call upon the Legislative Assembly to eliminate the production, sale and rental of pornographic and obscene material."

OATH OF ALLEGIANCE

Mr J. Wilson: I am privileged to rise today and present a petition to the Legislature of Ontario that reads as follows:

"Whereas the Queen of Canada has long been a symbol of national unity for Canadians from all walks of life and from all ethnic backgrounds;

"Whereas the people of Canada are currently facing a constitutional crisis which could potentially result in the breakup of the federation and are in need of unifying symbols;

"We, the undersigned, respectfully petition the Legislative Assembly of Ontario to restore the oath to the Queen for Ontario's police officers."

That is signed by several concerned residents from the villages of Angus and Tottenham in my riding of Simcoe West, and I too have affixed my name to this petition.

NURSING HOMES

Mrs Y. O'Neill: I have a petition signed by 23 people, to which I have affixed my signature.

"We, the undersigned, request that the government of Ontario immediately rectify the inequity in funding between nursing homes and homes for the aged. We strongly support the Ontario Nursing Home Association in their efforts to provide better care for residents of nursing homes through increased funding."

Mrs Sullivan: I have a petition which I have signed which reads as follows:

"We, the undersigned, request that the government of Ontario immediately rectify the inequity in funding between nursing homes and homes for the aged. We strongly support the Ontario Nursing Home Association in their efforts to provide better care for residents of nursing homes through increased funding."

ORDERS OF THE DAY

POWER CORPORATION AMENDMENT ACT, 1991 / LOI DE 1991 MODIFIANT LA LOI SUR LA SOCIÉTÉ DE L'ÉLECTRICITÉ

Resuming the adjourned debate on the motion for second reading of Bill 118, An Act to amend the Power Corporation Act.

Suite du debat ajourne sur la motion visant la deuxième lecture du projet de loi 118, Loi modifiant la Loi sur la Societe de l'electricite.

Mr Drainville: I am glad to rise again in the House to continue my remarks on Bill 118, an Act to amend the Power Corporation Act.

I want to deal with some comments that were made yesterday in debate, in particular by the member for Mississauga South. In her remarks to the House, which I must say were certainly lengthy, she indicated 8 or 10 times that we were a socialist government. In terms of the direction we have tried to take in introducing Bill 118, I want to be very clear about this: Yes, indeed, we are a social democratic government. I am very proud of that fact. I remember the words of an august member of the House of Commons, one of our leaders, J. S. Woodsworth. He spoke these words one time, which I think are germane to our considerations on this particular bill:

"I am not afraid of the word 'socialism,' which comes from a perfectly good Latin word which means 'comradeship.' That means that today we as individuals are no longer living isolated lives, that no nation is any longer living an isolated life, but rather that we are living in a society in 1,001 complicated relationships and that we must adapt our political ideals and our political institutions and our political policies to meet the new situation that confronts us."

When J. S. Woodsworth said these words, he was speaking about times such as we live in today. We have been confronted with difficulties as we have taken government. We look at a corporation which has had its difficulties in the last number of years, specifically in terms of the overruns that have been raised in terms of the nuclear option that Ontario has chosen. The reality is that the people of this province are concerned about the direction of Ontario Hydro. In fact, in my own riding -- perhaps those of us who are in the rural areas are closer to these concerns -- I can say that people have repeatedly said to me that we cannot continue to see Ontario Hydro go in the direction it is going.

There are members in this House who are against this bill, who say this bill is draconian and the government should not be going in the direction it is. They have a right, as opposition members, to put forward those points of view, but there are very concrete and very necessary reasons why our government has decided upon the course it has chosen.

The legislation and the changes we are bringing in here through these amendments to the Power Corporation Act will increase Hydro's accountability and responsiveness to public concerns and priorities. That is first, and it is important. Second, it will ensure that Hydro's activities are in the best interests of the people of this province. Third, we will remove barriers which up to this point have hindered Hydro's ability to comply with government policy directives. Fourth, we will open up the policy direction process. Last, we will allow Hydro to retain its independence to implement its day-to-day activities.

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We are not taking over Hydro, but what we are doing is ensuring that the energy policy which is germinated by the government is given due consideration and that Hydro reflects the policy of this government. If that seems a strange thing to members of the opposition, I am surprised. It seems to me to make perfect sense.

The Minister of Energy, when he stands up in this House, has the responsibility to ensure that Hydro is doing its job. If there is a complaint about Hydro, do we not see opposition members rise in the House and complain to the Minister of Energy? There is a relationship between the government and Ontario Hydro. All we are trying to ensure through these amendments is that this tie between Ontario Hydro and the government is made more effective.

Again, I want to assure this House and assure those members of the public who are watching today that we are saying that the utility itself will continue to be a public utility and will control its day-to-day activities, but what we want to ensure is the economic, environmental and social wellbeing of the people of this province.

Further to that, I would like to talk a little bit, if I can, about the areas where we can be perhaps more proactive as a government. We realize that in terms of the energy policy of the government we need to look very seriously at new ways of dealing with energy sources.

For a decade now we have been hearing of the difficulties with fossil fuels and how limited they are. We have talked about CFCs going into the air. We have talked about the need for conservation. We have talked about the global warming trend. These issues, layer upon layer of issues, are interrelated to how we involve ourselves with Ontario Hydro, so what we need to do is to allow the government the freedom to be able to give the kind of direction which is important. By opening up the policy direction process, what we are going to begin to do is give a clear indication of the new energy directions the government is going to be pursuing.

The changes to this legislation will clarify the government's responsibility to establish these new energy directions and enhance Hydro's ability as a public utility to respond to them. For the future, we see a further refinement of these new energy directions in these areas: enhanced economic benefits to northern and aboriginal people. We also see that we will have increased energy efficiency, including fuel substitution where that is appropriate, and more parallel generation, particularly using renewable resources such as small hydro. This will provide significant opportunities for remote communities and aboriginal communities.

Just recently, since I have been elected and have come to this House, we have had a small hydro generating plant established at Elliot Falls in Victoria county. This local initiative has been a tremendous boon to the community. As we begin to move more and more support towards this kind of entrepreneurial leadership within the community and to seeing more and more power from the local communities, we are not only going to be able to see conservation efforts given the boost that is needed but we are also going to see that we are going to be able to provide much-needed entrepreneurial skills.

Elliot Falls is now producing a significant amount of energy for the local area. We are now looking at Fenelon Falls, which is a significant area for possible generation, and we are also looking at the Irondale River -- all in Victoria county.

I am looking forward to those days when we can begin to see these kinds of initiatives take place, strategic procurement to develop a new industrial sector in Ontario which will supply a wide range of energy conservation products. We need to begin to move clearly, as quickly as possible for us as a government and for the private companies, into areas where energy conservation products can be produced across this province.

We might even in five years or 10 years hence see Ontario as a place where there is great leadership in this particular field. Again, this all hinges on our ability to give direction to Ontario Hydro through these amendments to the Power Corporation Act.

I would like to address in a more substantive way some of the concerns I have about the structure of Ontario Hydro, the board, and the chairperson of the board becoming the chief executive officer. Perhaps I should read into Hansard a few bits of the amendments that are suggested. I would like to do that because I think people need to be clear about what the government is doing in this bill.

For instance, we see in section 1 that, "There shall be a board of directors of the corporation consisting of a chairperson, a vice-chairperson, a president, the Deputy Minister of Energy and not more than 18 other directors"; that, "The deputy minister shall not vote at any meeting of the board," that deputy minister being an ex officio member of the board but helping to maintain that all-important link between the government and its energy program, and, of course, the board of Hydro; and that, "The chairperson is the chief executive officer of the corporation."

Those changes to some might seem like window dressing, to others might seem not particularly important or startling changes; but they are startling changes. Some of the members who have raised this issue are quite correct to say these are significant departures, but they are significant in the way that the opposition members have not indicated. They are significant because what it is providing is the framework for government directives to be taken seriously.

There are members in the House who decry this move. I read from yesterday's Hansard some remarks by the honourable member for Mississauga South, who said:

"The bill also allows the Minister of Energy to issue policy directives approved by the Lieutenant Governor in Council that would be binding on the corporation. For people listening or watching, we perhaps should just explain what this means, because this is the most significant part of Bill 118.

"This is the part that allows the Minister of Energy to issue policy directives approved by the Lieutenant Governor in Council. Everyone knows that a policy directive approved by the Lieutenant Governor in Council is in fact a policy directive of the government of the day."

Indeed it is, and that is precisely the point. To have heard the member for Mississauga South yesterday would almost by implication indicate that such a heinous act on the part of the government has never been perpetrated on the people of Ontario, that it is indeed unacceptable for the government to move in this particular direction.

Let me give an example within Canada itself. I have the documents right here -- and I would indicate this to the honourable member for Mississauga South -- in terms of federal legislation, the Financial Administration Act. In terms of the federal Parliament and its relationship to crown corporations, its legislation is precisely what we are putting in this Power Corporation Act. It is precisely the same kind of thing. Why? Because it has been seen, in the wisdom of those who govern in Canada, that it is necessary to maintain a link between the government, its energy policy and other policies of government and those crown corporations that are there, to make sure that those things are carried out.

I am also going to read into the record the various parts of this Financial Administration Act which will indicate the parallel to our own Power Corporation Act amendments put forth by this government. I read, in division 1 of Corporate Affairs, accountability to Parliament:

"89(1) The Governor in Council may, on the recommendation of the appropriate minister, give a directive to any parent crown corporation, if the Governor in Council is of the opinion that it is in the public interest to do so.

"(2) Before a directive is given to a parent crown corporation, the appropriate minister shall consult the board of directors of the corporation with respect to the contents and the effect of that directive."

Subsection (3), and this is very important:

"The directors of a parent crown corporation that is given a directive shall ensure that the directive is implemented in a prompt and efficient manner, and if in doing, they act in accordance with section 115, they are not accountable for any consequences arising from the implementation of the directive."

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Going further down to subsection (5):

"Compliance by a parent crown corporation with a directive is deemed to be in the best interests of the corporation."

Obviously it is understood in the federal House, in the federal Parliament and on the federal scene that it is necessary to maintain both a communications link and a policy link between the federal government and crown corporations. So it is that in the amendments to the Power Corporation Amendment Act, that is Bill 118, the government of Ontario is saying precisely that: no more than that and certainly no less than that.

I would like to dwell just very briefly on some of the comments that have been made about our government's approach to the nuclear option. As the members know, we have a moratorium on nuclear power at this point in time, and there are many reasons why that moratorium was put on, not the least of which is, especially in this recessionary time, that there are very significant questions as to whether we as a government can continue to go in a direction which is going to cost more billions and billions of dollars at a time when we do not have that kind of money to spend.

I might add that we are speaking about billions of dollars of expenditure on the part of Ontario Hydro. In that light we have ensured that we have put a moratorium on the development of nuclear stations, and at the same time, we have directed that Ontario Hydro redirect its spending at this point in time towards conservation.

There are those members again who decry this move to conservation. They say it is a motherhood issue. It is a motherhood issue but, more than that, it is an issue that we have not grappled with in this province up to this point in time. It is so serious for us that we have to begin to make inroads in this area or we are going to suffer dire consequences in this province in the future.

It is time for us to stop equivocating about conservation and saying, "We'll devote a little bit of money to that, but we will go full steam ahead in every other area, spending billions of dollars, and maybe some day conservation will become something that is important." We cannot go that route any more, and the government has been clear on this issue since the day it was elected and put the moratorium on nuclear power. What we have to begin to do is take seriously conservation in the province of Ontario.

The government has also directed Hydro to increase its efforts to develop supply alternatives such as parallel generation to make better use of existing facilities and to give a higher priority to the environmental assessment of Ontario's hydroelectric potential. The Environmental Assessment Board, in its consideration of Hydro's demand-supply plan, will provide its judgement on the future of new nuclear power in the longer term. The board's review will provide an opportunity for the public to participate in this judgement.

I want to say that in the Power Corporation Amendment Act we have tried to bring to bear a rational view of our relationship between the government and Hydro. I was reminded of a quote from Edmund Burke, who once wrote about statesmanship: "A disposition to preserve and an ability to improve, taken together, would be my standard of statesmanship."

I want to say about this bill and this initiative on the part of the government that we have a disposition to preserve. We have not changed Hydro unalterably. We have not tried to mangle it as an agency of the province, as a public utility. We continue to give it the support that it needs to be given.

We also have an ability to improve, because if we do not improve Ontario Hydro's mandate, if we do not improve the link between the government and this public utility, then we will not be able to do the job we must do, and this is create better power for the people of Ontario, more power at a better cost, and in the long run, we will not be able to conserve. That need for conservation is something that is undoubted by anyone in this government at this time.

Mr Conway: Just a very quick question to the member. He made reference to a new hydroelectric plant in Victoria county. I think he said at Elliot Falls. My question is a very simple one. Is that a brand-new facility or is that a small group of people who have taken over an old water-powered plant?

The Acting Speaker (Mr Farnan): Would you like to wait and then in your summation you can respond to the various questions? Continuing the rotation, are there any other comments?

Mr McGuinty: The existing legislation provides that if the government is to issue a directive to Ontario Hydro, that directive must be in keeping with Hydro's mandate to supply power at cost. The member's government recently issued a directive to Ontario Hydro to donate $65 million to the northern Ontario heritage fund. Does the member consider that to be in compliance with the existing legislation, and how can he tell me as a ratepayer that is in keeping with my interest to pay for my power at cost?

Mr Drainville: I am glad that I have been asked these questions by the honourable member for Renfrew North and the honourable member for Ottawa South. I will try to answer them as best I can.

I have spoken about this small project in Victoria county because I take some pride in it, not that I had anything whatsoever to do with it, but rather that it shows the entrepreneurial spirit which is very much alive in our riding and it is very important.

There was at one time a small generating plant there back in the 1920s or 1930s. There was virtually nothing left of that. It was a shell and there were just some outbuildings and a few forms. What they were able to do was take the shell basically and totally rebuild a small generator. In the process of doing so -- it was totally on the initiative of some private interests who came in and in a period of time working with Ontario Hydro were able to convince Hydro of their very goodwill -- they were able to obtain that property and build that generator.

I was there at the opening of that and I have to say that even in the period of time that they have been generating some electricity, they have been remarkably successful in providing more power actually than they had anticipated. I want to say that is good. Also, in Fenelon Falls they are going to be looking towards doing this, and in Irondale.

I want to say to the honourable member for Ottawa South -- and I am sorry that I do not have very much time now to give full value to him -- that I do believe, in terms of northern Ontario, that the direction Bill 118 is going in is ultimately for the benefit of the whole province and that the decision that has been made is a decision which is going to benefit the whole province, particularly the people in northern Ontario, but also across the board. The initiative on the part of the government is a sound one in the terms that the honourable member has put forward.

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Mr Conway: I am very anxious to participate in this debate on Bill 118. I want to thank the member for Victoria-Haliburton for answering my question, and the answer was more or less what I thought it would be. Let me just say to my friend the member for Victoria-Haliburton, and any other member of the Legislature -- they cannot participate in this because their conflict commitments would preclude it -- there is no better business in the province today than acquiring water rights that may have been abandoned decades ago.

I am not at all surprised to hear that Elliot Falls is producing not only more power than was anticipated by its sponsors, but I daresay its profit -- and I do not begrudge them this at all -- is probably much greater than they might have imagined, and I suspect would roll the eyes of most members of the Legislature. I only say that because I have a number of people who are engaged in those kinds of enterprises in my own county and in eastern Ontario. I think it is all to the better and it ought to be encouraged, so I am delighted to know it is going on in Victoria county.

I have a fair bit to say on this bill and I beg the indulgence of the Speaker and the House this afternoon, because I will take a fair bit of time to speak to Bill 118, An Act to amend the Power Corporation Act. I want to set the scene by indicating where I am coming from as I make these remarks.

Firstly and foremostly -- if that is a word; it probably is not -- I am speaking as the member for Renfrew North, a large rural constituency in eastern Ontario where electricity, hydro rates and availability, I can assure members, are what they are today, what they were when my grandfather was here 50 years ago and what they have been since the turn of the century: one of the most, if not the most, significant issues of ongoing public concern to the average household, the average ratepayer, in my county.

I speak also on behalf of two utilities, the Pembroke Public Utilities Commission and the Deep River Public Utilities Commission, both of which wrote me and one of which, the Pembroke commission, actually asked for a lengthy meeting about a month ago to indicate in some detail its very real concern with the policy that informs Bill 118.

I want to be very clear that what I have to say, I hope, reflects the views of the ordinary citizens of Renfrew county, where I would suggest there is a greater than average -- in some cases, much greater than average -- dependence on electricity than in much of the rest of the province, simply because in those very rural parts of my county there is no alternative, none whatsoever.

As well, I feel duty-bound as the member of the Legislature for the area to reflect some of the concerns that the Pembroke and Deep River public utilities commissions have expressed to me, both in meetings and in formal correspondence.

I want to say as well that in my time as a member of the Legislature, any time a Hydro bill is presented, it is a time of significance for the Legislature. I have been struck, quite frankly, by the relative disinterest in this bill in the early days. I know, as I think most members do, that the Municipal Electric Association has mounted quite an active lobby in the last three, four or five weeks. And I dare say most members have probably been canvassed, as I have, in person or by phone or letter, to express the views of local utilities.

It has been my experience over the 16 years I have been a member of this Legislature that Hydro is, and ought always to be, a matter of the first order of importance to this Legislature. It is for my constituents at present a real concern. They have been reading in the public press in the past number of weeks, in communities like Barry's Bay and Palmer Rapids and Killaloe, and reading reports from the chairman of Ontario Hydro, Mr Marc Eliesen, that he predicts bulk hydro rates are going to increase over the next three years by something like 45%.

In virtually all cases, that is going to be increased by local factors. In my part of rural Ontario, for example, this year's bulk power rate increase of 12% is going to translate, I would suggest, to something like 13.5% to 15% for most of the hydro consumers in my area, simply because of the economies of scale which are not there in rural eastern Ontario. It might be somewhat less in the city of Pembroke, where something like 15% of the power is bought from Pembroke Electric Light, whose source of power is across the river in the province of Quebec. But I suggest that most of my constituents will be looking this year at electrical power rate increases of something in the order of 13%, 14%, 15%.

As the member for Renfrew North in the Legislature, I have to tell the members, my friends in this assembly, that for farmers and loggers and sawmillers who are going through a gut-wrenching depression, where their markets are declining to the point of disappearing, where their colleagues who work in shoe stores in Renfrew and Pembroke and Eganville are themselves having difficulties holding on to a job, to read in the Ottawa Citizen or the Eganville Leader that their power rate is going to go up by probably 15% this year and 50% over the next three years is a matter of very grave concern.

I repeat, if you are a dairy farmer in Westmeath township or if you are a sawmiller in Hagarty township, in Renfrew county, you have no alternative. The illustrious member for Oxford has a county that is famous country-wide for its dairy industry. He will know just what kind of electrical consumption the typical dairy farm requires. To tell that farmer in Zorra township or in Renfrew county that the rate is going to increase by 50% over the next three years while that farmer is faced with the pressures of international agricultural competition is to get that citizen's attention in a way in which I suspect few other things we do in this assembly will get his attention.

I want to say as one member of the assembly that I support entirely the restraint of the government of the day. I deeply regret that they did not understand six or eight months ago what I have to believe their best and good advisers were telling them, that the recession was running much more deeply than anyone had predicted. Speaking on behalf of my constituents, I can say without any fear of political recrimination or contradiction that I, like they, will support this restraint initiative. I am going to debate some of the particulars of that, obviously.

What am I to say to people in rural Renfrew county who read that their electricity rates are going to rise by 44% over the next three years as a minimum, according to the chairman of Hydro? They read in the same paper that the chief executive officer and chairman, newly appointed to Ontario Hydro, is going to have about a 300% increase in his salary. As the Deputy Minister of Energy, he was earning $125,000. As the new CEO at Hydro, he will earn minimally $400,000 and I gather will have a pension entitlement that will make their ears curl.

How can they take this? What are they to do? They will accept the argument of restraint, but to see their Hydro bill increasing by 15% annually for the next three years, and to read in the same paper from the same source that he cannot do the job for less than $400,000, is to present a credibility gap as bad as the one that sunk Lyndon Johnson in 1967-68. They would want me to raise that concern on their behalf, and I shall return to this at a somewhat later point in these remarks.

One of the aspects I hear in my communities is that people are out of work everywhere. In Renfrew county the forestry sector is one of our staples. It is very energy intensive. I totally agree with my friends opposite that we have to do more in the area of conservation. I could not agree more.

I would submit that we could do one thing above and beyond all else that would stimulate activity in that area. In fact, it explains why Elliot Falls in Victoria county is in existence today and was not even thought of 10 years ago. It is simply the buyback rate. I did not check the data, but Hydro's buyback rate in the last six or eight years has increased significantly. If members want to get more of the Elliot Falls or if in my area they want to stimulate very interesting co-generation, there is a way to do it, that is, to fundamentally re-examine the way in which the buyback rate is constructed.

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Without any significant government investment, the government will get a lot of entrepreneurship out there that will give it added capacity in places where it needs it and we need it and in ways I think we can all support.

In my county, for example, we are looking now at a situation where there are sawmill residues and all kinds of freestanding junk timber for which there are no markets. In the case of sawmill residues, the Minister of the Environment is saying: "You can't keep doing what you've been doing over the decades. You've got to dispose of that in some way." It appears, on the basis of a lot of the work that people like myself and the very distinguished member from north Hastings have been associated with, one of the potential ways is to get involved with co-generation using that kind of material, the so-called wood-fired electrical generating plants. But I can say that they are probably not going to work in north Hastings or in west Renfrew or in north Addington if that buyback rate does not move upward.

I have to tell my friends that my constituents, who are looking at some of the bleakest economic circumstances they have ever known, are horrified to see some of the government-imposed costs that continually float out of this place; hydro being one of them, workers' compensation being another.

I understand, in a day and age of political correctness, what one can and cannot say, but I talk to Ed Broadbent's ordinary Canadians, whom I represent, not some 10-speed trendy living in the Annex in downtown Toronto, not some wonderful ambassador for high yuppiedom living in -- I will not mention another urban community I could think of -- who of course have all the answers in these debates because they have disposable incomes, in many cases drawn from the public purse. They have alternatives.

There is a tragic irony in this debate around conservation. I live in Pembroke, for example. The government's off-electricity policy is very easy for me because all I have to do is what I did four years ago, that is, take out my oil furnace, look at the price structure and see that electricity is probably not competitive. And I accepted a lot of the arguments that were being advanced; I sat on the select committee on energy for years and I heard the illustrious member for Ottawa Centre, the now Minister of Housing, go on at some length about these matters. One of the things she would argue and my colleagues argued as well was that electricity is not a very good way to space-heat, for lack of a better phrase. So what did I do? I turned to an alternative I had, which was natural gas.

But my friend from Orono knows that if you live in the heart of rural eastern Ontario, in almost all cases you are miles from natural gas. The thing that my constituents are fed up with, and quite frankly the thing that I am fed up with, is this argument around conservation which ignores the reality of rural Ontario. It is infuriating to hear that lecture -- from good people, who believe it no doubt, because in Kingston or in Pickering or in Yorkview or in Sarnia you can believe it, because you have an alternative.

There are hundreds of thousands of people in rural Ontario who have no alternative in terms of natural gas. What are they to do? Because conservation means one thing. I will give credit to the proponents; they have never denied their objective. In pure economic theory, I suppose it makes some sense: Drive the rates upward and drive them up dramatically.

If you are faced with that kind of price pressure in Brantford, you will probably do what I did, if you did not do it before I did it, and you will switch, because you have alternatives.

The dairy farmer in Oxford, the small sawmiller in Palmer Rapids, in west Renfrew county, which probably is the only private sector employer for miles around, employs 25 of these people. I was in a sawmill in my riding the other day and I tell members the wreckage in that sector right now is unbelievable. Few people are working and it is going to be some time before those jobs return. I hope most of them return, but realistically a lot of them are not coming back.

This sawmiller said to me, "Do you know what my Hydro bill here is?" I said no, I did not and he said: "My Hydro bill is $575,000. Do you know what a 45% increase on that base means to me over the next few years? It's almost a quarter of a million bucks. Where am I going to get it? If you've got an alternative out there, will you please come and tell me what it is. I'd be much happier to take that quarter of a million bucks and the $575,000 I am now spending and make the conversion. Give me natural gas, give me something, but don't give me the lecture that in the name of conservation I have to pay 45% minimally over the next three years as I survey the wreckage of this forced economy in 1990-91-92."

That question of equity is going to have to be dealt with and quite frankly I do not expect it to be understood or dealt with by the high priests and priestesses of the energy environmental union. I do not think it is really in their interests to concern themselves with some of those issues that affect Ed Broadbent's ordinary Canadians in my constituency.

Again, as a member from rural Ontario, I want to stress how fundamental Hydro is to ordinary life and to any kind of economic development, whether it is that dairy farmer, a local school board or a small business. It is today what it always has been since the arrival of white coal in the early years of this century.

In this respect I thought the member for Mississauga South made a very salient point, that all of us would do well to understand just how vital electricity is to the economic situation in which we find ourselves. I am not here to argue that it is business as usual, because clearly it is not. We have played out a number of options we have enjoyed over the last number of years, this throwaway society we now live in.

For example, I would like to look at the electricity bill for this Legislative Building in 1991 compared to the bill for this place in 1961. I bet it would be just an exponential rate of growth, but of course the cause has been good. This wonderful televised studio this chamber has now become has not come without a price. This lighting, all of this television business at not just millions of dollars of installation, but with the electricity this place now requires, which I suspect is substantially greater than a decade or certainly two or three decades ago.

That is just the order of the day right across the society. We are fast going to reach a point where we are going to have to get beyond the rhetoric and get right into the marrow and, boy, it is going to be interesting. It is going to capture people's attention.

The whole question of electricity is not important just in my area. When I review the modern economic development of Ontario, I think it is fair to say that one of the ingredients, not the only one but one of the most significant factors this jurisdiction has enjoyed in the quality of life, the level of economic prosperity we have enjoyed in the 20th century, is the availability of relatively cheap and reliable hydroelectric power. I do not think anyone is going to dispute that.

When we look at the economic development of Ontario and at the power policy pursued by all governments, whether it was the Whitney government, the Farmer-Labour government of E. C. Drury, the Tory governments, the Liberal government, or the then long years of Tory government culminating with the Miller government in 1985, there were two interesting ingredients in that power policy. One was that it be as cheap as reasonable, and the other that there be some recognition of a made-in-Ontario component. That is why there was always great interest in the hydroelectric power development in this province, for example, and why 25 and 30 years ago the nuclear alternative looked so attractive. We had the intellectual capacity, much of it in my own community of Chalk River. We had the uranium. We could finance to a significant extent the large capital undertakings that projects like Bruce and Darlington require.

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But I submit we may now be entering a point in the history of this province where we want to abandon a significant interest in a made-in-Ontario energy policy. I do not want to be too parochial, but it is very interesting, and I want to review in a moment some of the historical development here. It is not just because I happen to be interested; there are some extremely relevant points. I submit that when one looks at the power policy in this province, one of the very salient facts is that all governments have been particularly interested in encouraging to the greatest extent a made-in-Ontario energy policy, because they understood the enormous vulnerability of this economy if they did not have some meaningful control over the supply of energy.

Since the beginning we have taken the availability and reliability of our electricity almost for granted. I happen to live at the Ontario-Quebec border. One of the things about living at the Ontario-Quebec border is that you know people in west Quebec who understand what it is to have interrupted power. To be fair, in the last very few years Hydro-Quebec's reliability along the Ottawa River frontier has improved, but relative to our major province to the east, in the main Ontarians have enjoyed not just relatively cheap and relatively abundant power, but what is perhaps very important for home and industry, reliable power.

If you are running a dairy farm, for example, you are not going to be very excited to be told at 4:30 in the morning, for whatever good or bad reason as my friend from Hastings will know, that Hydro cannot supply the juice, because the Holsteins are on a different cycle and they are going to bloody well expect you to be ready when they are. We had all better think and understand that if we are ever going to commit new capacity of whatever kind, it cannot be done overnight. It may take much less time than in the past, but it is certainly going to take some time.

I want to talk a little about the development of Hydro policy in the province, because I think there are some elements in our past that bear on the question before us now. In the course of this speech I want to look at the context of government-Hydro relations over the years, at our public power, at some of the alternatives and at some of the tax policies we have chosen. I want to look very specifically at this bill in its sections, and finally I want to talk about some related questions.

I want to talk for a moment about the history of Ontario Hydro, and begin by pointing out that at the turn of the century what focused the minds of Ontarians about the great hope that hydroelectricity represented was the coal famine of 1902. I submit that if it had not been for serious shortages in the then staple energy supply, Pennsylvania coal, the power politics of this province might have taken a very different course. In 1902, for a variety of reasons I do not intend to engage in, Ontario faced a severe shortage of Pennsylvania coal. They could not do anything about it. They were powerless.

I suggest that was the time this society, both urbanized and industrialized, began to understand there were some places where one could not afford to be that exposed or that vulnerable. It was against that compelling backdrop of an imposed, contrived shortage -- it was not accidental; the Pennsylvania cartel worked a very monopolistic mechanism to produce a shortage -- it was under those conditions that people in this province really began to look at hydroelectricity, the so-called white coal, the magic alternative that would free them from that kind of hijacking and foreign control.

What they saw at that time was almost as scary. They saw the great cataract at Niagara increasingly taken over by the Toronto plutocrats, the Henry Pellatts, the Frederic Nicholls, the William Mackenzies, the people at the electrical development company who seemed on the verge of taking total control of that public resource, running a line to Toronto and holding that city ransom to exorbitant rates that surely would be charged.

Two things happened. One of the most incredible Canadians ever to walk the public stage, a fellow from London, a cigar manufacturer named Adam Beck recently elected to this Legislature, began to take charge of a public power movement that actually had its beginnings in the honourable minister's own community of Kitchener-Waterloo, then called Berlin, where a former distinguished Liberal member of this Legislature, E. W. B. Snider, began to understand what would happen to the farmers and the manufacturers of western Ontario if this Niagara power were constructed in a way to feed Toronto to their exclusion and to their detriment.

The movement that Beck led to create Ontario Hydro is a movement members all ought to read about because it is not what they think it is. I certainly do not want to offend the sensibilities of the member for London North, but I doubt if there has ever been a member of the Legislature quite as determined, tyrannical and outrageous as Adam Beck was. Adam Beck deserves credit for mobilizing public opinion in this province to create a set of political conditions that would create in this jurisdiction what was not happening in a number of the states in the union, that is, public power at least to this extent. In the beginning Hydro was really intended as two things. It was going to allow the private interests to generate the power, but there was going to be a municipal co-operative that would distribute that power across the province. The provincial government would do two things: control the rates and provide the financing. That was the beginning of Ontario Hydro.

I think it is important to understand that in the beginning the people of Ontario faced a shortage. They were terrified about what that shortage would mean to the growth and development of their economy and of their community. Beck understood that in a way the former Liberal Premier Ross did not understand it and in a way a lot of other people did not understand it, so in 1906 he sponsored the legislation to create the Hydro-Electric Power Commission of Ontario, and from its inception in 1906 to his death in 1925 was its first chairman and its presiding genius.

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It is very interesting that as developments took place, the mandate of Hydro began to change. I think it was in March 1906, at a time when I suspect very few people came to visit the Legislature and very few people would ever come to picket, that Adam Beck was able to mobilize a group of 1,500 people on the steps of this chamber to demand that a waffling Whitney government move courageously in the direction of public power.

One of the aspects of the public power movement that has always fascinated me is the way Beck manipulated the municipalities and public opinion to get his way. In almost all cases, he got his way. For Adam Beck, I must say, public ownership never meant public accountability. Never in his wildest dreams did he imagine that his beloved Ontario Hydro was going to be subject to the kind of scrutiny that would ordinarily fall to a department of government, which is what HEPCO, the Hydro-Electric Power Commission of Ontario, was for all of those early decades.

Interestingly, during the First World War, all of the abundance that was imagined turned into shortage. In 1917, Ontario Hydro had to do something that no one had contemplated a decade before: it actually built its own generating station at Queenston. I listen to my friends opposite and they rightly point out, "My, my, isn't nuclear power terrible? Didn't you know that Darlington started out at $3 billion and ended up at $13 billion?" It is true. That happened.

But let me just tell members that when Hydro began its first generating station, the famous Chippewa-Queenston project, it was begun in the middle of the first war at an estimated cost of $10 million, an outrageous amount of money in those days. It was completed about five or six years later at a fantastic overrun of $65 million, a sixfold increase. Does anyone stand here today and say: "My, my, Chippewa-Queenston cost six or seven times what it was supposed to cost. We should never again engage the business of building a hydroelectric station in this province"? That logic, of course, is laughable.

Mr Sutherland: What was his productivity?

Mr Conway: My friend the member for Oxford says, "What was his productivity?" The point, I suppose, is that the Hydro-government relationship, which is what I want to talk about in this part of the speech, has always been at very best a strained and controversial relationship.

The Acting Speaker: Order, please. The member for Oxford, if he wishes to interject in the debate, will do so from his chair.

Mr Conway: It is very interesting, because in the last days of the Hearst administration and after the Hearst government was defeated, the then Premier complained bitterly about being blackmailed by the great, sainted, late Sir Adam Beck. He had an impossible time dealing with his colleague.

When he was defeated in 1919, he was replaced by the farmer-labour coalition. Can members imagine E. C. Drury as Premier dealing with a man who was the farmers' first choice for Premier? But Beck turned down the Premier's job because in his view he had a better, more important job. He was chairman of Ontario Hydro, and incredibly, the farmer-labour government maintained him in that position.

Drury, like Hearst before him, had a hell of a fight with Hydro over a fundamental policy issue. It had to do with radial railways. Adam Beck did not believe the motor car was going to amount to very much, and he was determined that there was going to be more power built, more electrical capacity built, so that there could be radial railways running all across southern Ontario, from Cornwall to Windsor.

Both the Tory Premier and the farmer-labour Premier said: "I don't know, Mr Beck. I think you've probably got it a little wrong here. We think the motor car may have some kind of a future and we think that your scheme for radial railways is overoptimistic and ought not to be proceeded with."

It was a hell of a fight. It was a fight that went on for about six years. In the end, with absolutely every provincial and municipal resource applied, the government won, but it was a very close call. My point is simply that through much of this, Adam Beck was chairman of Ontario Hydro and minister without portfolio sitting in the cabinet.

When I hear all these speeches about accountability, I would just simply ask members, please, please, to some day spend a few moments and look at with some degree of care the evolving history of Ontario Hydro. They are going to find some absolutely fascinating stories about that relationship.

This covers not just Tory governments. In the case of a farmer government, there is another issue I wanted to raise, because a lot has been said in this debate, and much will be said before the bill passes several months from now. In the farmer government time, members can appreciate the debate around power at cost. I do not accept, by the way, some of the argument advanced by the Municipal Electric Association that there was somehow in the beginning a sacrosanct commitment on all sides to some predetermined concept and notion and practice of power at cost, because that was not the case. There was almost from the beginning a big fight around, "Does this mean just to urban concentrations? What about the rural areas?" The debate in this province around rural hydro rates over the period from about 1915 to 1955 -- actually it is through to about 1985, I should say -- has really been quite something.

The farmer government faced a very tough choice, which takes me to the core of Bill 118; that is, whether it as a government decided to make the entire province have uniform rates. There were many people on utilities and in this Legislature who thought that was absolutely unacceptable because it violated the notion of power at cost. Farmers, on the other hand, said that if you applied pure economics, they would never get affordable power.

The farmer government undertook an interesting policy which I would recommend to my friends opposite. It chose not to make the significant subsidies around rural hydro rates based largely on rates. They decided to electrify much of rural Ontario on the basis of provincial grants, a fundamental policy choice that that government had to make and that this government has already made around issues like Elliot Lake and Kapuskasing.

I want to say to my friends in the NDP that the debates we have and are going to continue to have on this fundamental question of power at cost have been debated by virtually every Legislature since power was an issue in this province in the early days of this century. I repeat, the Drury government, a farmers' government primarily, was able to resist enormous political pressure to make the rate base carry all of the added costs to electrify rural Ontario. It decided rather to go by way of provincial subsidy. I think that is a very interesting point and one we should reflect upon as we think about what we are doing in Elliot Lake and Kapuskasing.

Let me say at the outset, Mr Speaker, that I do not think there is any member here who would argue for one moment that something ought not to be done. Obviously, much is owed to those communities. The issue for me in Bill 118 is how we go about ameliorating the devastation in a community like Elliot Lake as a result of the cancellation of those contracts, or the situation in Kapuskasing.

I want, just for a moment, to say again, because this will bear on some of the things I have to say a little later, that I think this Legislature has in the main a pathetic record over 85 years in trying to exact any kind of accountability from Ontario Hydro, whether it was a commission with delegated powers from the cabinet itself or whether it was, as it has been since 1974, a crown corporation at arm's length. What this Legislature has seen, in terms of Hydro development over those 85 years, has been positively breathtaking, whether it was premiers Hearst and Drury bitterly complaining about Beck blackmailing them -- there is a wonderful story in the memoirs of E. C. Drury where his man on the Hydro commission, a fellow named Miller from Toronto, admitted that he was there to do the Premier's bidding but he could not, he said, because someone at Hydro, someone very high up at Hydro, found out that in his youth he had a dalliance at university with some young lady, from which I gather issue proceeded, and he was basically being blackmailed. So he wanted to help the Premier, do the Premier's bidding, but he could not, he said, and the Premier was left with an appointee who was essentially neutered. That happened in our Ontario -- a wonderful, unbelievable story.

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In this debate about the Hydro-government relationship, we ought to know what has preceded before we begin to decide how we are going to redefine this relationship, and I completely support this government's right to redefine that relationship.

I was reading a book the other day -- I will not read much of it today -- The Beauharnois Scandal. I had forgotten just what a wonderfully rich scandal this was. I mean, if the members want to see good old pure Ontario and Quebec at their corrupt best, they should read The Beauharnois Scandal, recently published by the University of Toronto Press, by a distinguished Canadian historian, T. D. Regehr. My grandfather, when he came here as a member in 1929, I think, was elected on the basis of deals made by Hydro with the private interests in the Renfrew area, where a certain John Aird Jr was paid $50,000. Can members imagine: $50,000 in 1929 to arrange, to facilitate, the purchase of the private power rights on the Madawaska River and the Mississippi River for Ontario Hydro. The Beauharnois scandal was much, much better, because of course the scandal touched the sacred hem of Mackenzie King himself --

Interjection.

Mr Conway: I want to say to my friend the member for Grey that he will enjoy one of the references that is going to come very shortly.

In the Beauharnois scandal, you have a Senate investigating committee, with a principal witness confirming that, oh, yes, R. O. Sweezey, the principal in Beauharnois, certainly gave $200,000 to Howard Ferguson, then Premier of Ontario. Now, Howard Ferguson denied absolutely that he had ever received any money.

Later in this province we had a wonderful spectacle in the 1930s involving a Premier and a former Prime Minister of Canada. Hydro bought the Abitibi subsidiary up in northern Ontario. Can members imagine, in 1932 or 1933, buying a bankrupt company, which it was, in which the Premier and a former Tory Prime Minister of Canada had tens of thousands of dollars of stock which, had the company gone bankrupt, would have been virtually worthless, and having it explained on the floor of this chamber that yes, well, Premier Henry did own $25,000 worth of Abitibi stock, but he had forgotten about it. In 1933, that was not exactly what made you popular.

And the behaviour of the Hepburn government, my Liberal friends, was almost as outrageous. The illustrious Arthur Roebuck as Attorney General made a speech in this assembly in 1935 that lasted for nine hours, where he argued that the government ought to do what it actually did, which was to repudiate the Beauharnois contracts. They in fact actually passed legislation the Attorney General himself must have known was as illegal as the Court of Appeal was to find it a few months later. That is not exactly a very high water mark in Liberal administration.

The members might think it was all in the past. When I was first elected here, Billy Davis was riding the province as king of the land. One of the reasons I am always interested in Hydro debates is that when I first came here, we had just finished the Power Corporation Act. We got it in part because of the famous Canada Square scandal, that can be seen, in a sense, by just looking out the front window.

I am going to read something from Jonathan Manthorpe's book, because sometimes I forget just how rich a history there is around this place, but when I look at Bill 118, if I am a bit sceptical, and I am very sceptical about some of what is proposed here, it is because of what I have been asked to believe in the past.

The story, briefly --

The Acting Speaker: Member, may I bring you to order for a moment? The history is very enjoyable and certainly to some degree relevant. I would ask you to bring us back on track as quickly as possible so that we are dealing with the substance of the debate.

Mr Conway: Mr Speaker, you are going to enjoy the connection here. The connection is going to be very direct and it will not be long in coming. I want to set the scene, because what I have to say is not going to be very nice and is certainly probably going to ruffle a few feathers. I want to say it, and I want to say it in the context of the Hydro past, because at one level it is an incredible past that has provided much of what we take for granted.

I am going to tell the members about the history of the shortages and what that has done to public policy. Hydro's mandate changed in the middle of the First World War for one reason and one reason only: There was not enough power. In the context of power shortages, most things went out the window. In the face of the Depression and surplus everywhere, public policy turned dramatically in the other direction. The only possible way Hepburn and Roebuck could defend their outrageous policy was because Hydro had contracted for much more power than it could possibly use. Then another war came along and more shortage and it turned dramatically again.

My point in this little historical survey is that I think we may be coming very close to another situation where shortage sends us scurrying in some directions where none of us might want to go and certainly some of us have never contemplated going.

I want to conclude the little historical lecture by talking about the 1973 situation, because, of course, it gave rise to the Power Corporation Act that we are amending today. Very briefly, the story was this.

Hydro was going to build a new building. Of course, there was an arm's-length relationship -- anybody who believes that about any of the previous government-Hydro relationships does not know what he is talking about. It is wonderful political science; I know there are all kinds of illustrious professors around the province who teach that stuff. But it is palpably, demonstrably not true. It never has been, and I do not suspect, given the importance of Hydro to the province; it ever can be. But in 1972-73, the Hydro commission decided to build a new building. They went through a normal process, apparently. They were going to tender, and it appears that the tender was not quite like it was supposed to be, and Billy Davis's good friend Gerhardt Moog got the contract. All hell broke loose.

I want to read something from Manthorpe; it is about three paragraphs. It is the select committee report of 1973 on the Hydro-Electric Power Commission of Ontario's new head office building. Do the members know what that committee was asked to believe? Here is what they were asked to believe. I am going to read three paragraphs from Jonathan Manthorpe's wonderful book, The Power and the Tories. He is talking about Gerry Moog and Bill Davis. They are in Europe together on a holiday.

"For one striking example, there was Gerhardt Moog's story of being on holiday in Europe with Bill Davis in the summer of 1971. One day they had a leisurely and very liquid lunch in a restaurant overlooking Lake Constance. Bill Davis wanted to meet some Swiss bankers, and they had an appointment that afternoon in Zurich. They" -- Moog and Davis -- "started out rather late after their long liquid lunch, with Gerry Moog testing the capabilities of his powerful new sports car, which he was driving. Unfortunately, they had a puncture along the way and arrived in Zurich at the bank's closing time.

"The two men were, in Moog's words, 'well fortified' from their lunch, which could have meant anything from tipsy to drunk, and dishevelled from changing the tire along the way. Consequently, the security guard at the Swiss bank was not impressed with their account of the importance of their visitation and was reluctant to let them in. Eventually, however, he was persuaded to do so and they met senior officials with that Swiss bank.

"While Davis discussed" --

The Acting Speaker: I will have to ask the member to come to the point.

Mr Conway: I am coming to the point.

The Acting Speaker: I say to the member that reading into the record a prolonged quotation --

Mr Conway: Just a couple more sentences.

The Acting Speaker: -- is out of character with the direction of the House.

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Mr Conway: I appreciate the injunction. I might fall back on the Kormos rule. I really think this is germane. It is just a few more sentences.

This is the point: We are talking about a Premier and a man who is going to build by virtue, no question, of special connection to the government, to the leader of the government. They are in the Swiss bank, apparently a bit tipsy.

"While Davis discussed international finance at one end of the room, Gerry Moog took another official aside at the other end. Speaking in German, which Davis did not understand, Moog asked about the likelihood of getting financing for the Hydro building. Even though Moog's dealings with Hydro were then in the very earliest stages, these gnomes of Zurich might be forgiven for feeling that there was little doubt that Gerry Moog would get the job. Wasn't he sitting in their offices with his friend the Premier of Ontario and wasn't it obvious that they had been having a very good time together?"

Mr Mammoliti: So what are you saying?

Mr Conway: The point is he got the contract, and in the end of course the select committee believed the story that they were in that room together, that they had travelled around Europe and that Billy Davis did not know anything of what was going on. I was not there. Who am I to say what the truth was? But I am from Missouri and you can appreciate how there might be a shred of scepticism.

Members ask, "What is the point in all of this?" The point in this is simply the following: The relationship between Hydro and governments has been very close. There has never been, in my view, notwithstanding the public ownership, very much accountability, particularly to this Legislature. Quite frankly that blame is largely with the Legislature. I accept my share of blame. Most of us have failed a fundamental responsibility of responsible parliamentary government. When you think about what you are dealing with in Hydro, it is probably no surprise. It was very technological, so how do the farmer from Hastings and the graduate student from Renfrew understand a grand design, a great engineering feat like Queenston, or God forbid, the plants at Pickering and Bruce? It is very difficult to meet your requirement as a responsible legislator.

Of course in the beginning -- this is the point of the lecture, I suppose -- Adam Beck fought fiercely against private power interests that wanted him out of business. There was no question that in the first 25 years of Hydro, largely under his leadership, he was perfectly paranoid, and on a number of occasions he had every reason to be paranoid because the plutocrats, particularly of Toronto, were out to get him. But that created a culture that has coloured much of Hydro's development over the years. Now as a private member, unfettered by cabinet responsibilities, with a new bill that asks me to make some change, to contemplate some change, I get a chance to talk about accountability. I am more interested now than I might have been in the past.

That takes me to the bill. I want to talk a little bit about that bill because it says a lot of things that I do not think a lot of people here understand. Simply put, the thing about this bill which to me is breathtaking is the kind of mechanism it contains for accountability. I want to restate that I have no quarrel whatsoever with the new government's decision to strike a new relationship with Hydro. I have a bit of a problem with some of the rhetoric because, boy, we have heard it all before. It has been equally well meaning and it has generally not amounted to very much.

As I say, when I see Billy Davis reduced to that kind of condition in a Zurich bank anteroom, or I read of the farmer-labour Premier bitterly complaining about this impossible tyrant, genius that he might have been, I understand something about the difficulty. I look at this bill and I think about what the government has said in terms of supporting it. Before I even make those comments, I should raise the circumstances that have been alluded to by previous speakers in so far as origins of this bill are concerned.

Clearly there was a fight, quite a nasty fight from all reports, between the new government and the old board. That in itself is not new. In Viv Nelles's wonderful book, which I have not referred to but which is a great bit of reading, there is an allegation from a pretty good source that a former member of this Legislature, actually a member from Hastings, a long-time chairman of the hydro commission, actually committed suicide because he was so outraged at the innuendoes that were being thrown at him by, actually, the Liberal crowd in the mid-1930s. It has not been a very happy situation, the fights that have gone on between the board and governments. I think it was the distinguished member for Lanark-Renfrew who made the very good point that if the government is looking for accountability, it has it. Theoretically it has it. It has it in so far as it appoints the board.

Mr Mills: "Theoretically"; you said it.

Mr Conway: The member is talking to the converted. I know exactly what the member is saying. Mitchell Hepburn was so fed up with the former editor of the Globe and Mail he made chairman that he fired him, because he would not do the Premier's bidding. In a real sense, what the government encountered is not new.

I have a great deal of respect for Alex MacIntosh and some of the other members of the board whom I know. I gather there is more to this story than I know, but on the face of it, it looked like some on the old board were not very keen about some of the new government's directions. I gather that there is more to the story and that it involves this Premier. I do not know, because I was not there, but some of the members are very responsible, reputable people and they are furious at the way in which the transition occurred.

I will simply say that there is no question in my mind that any government, particularly a newly elected government, has without any question the right to move in any direction it chooses.

Mr McLean: You gave this speech 10 years ago.

Mr Conway: I think I probably did.

Mrs Caplan: That was then. He says the same thing now. Isn't that unique for this House?

The Acting Speaker: Order.

Mr Conway: Actually I am sure I did not make this speech 10 years ago.

I will tell the members who have not read this bill that as one member of the Legislature I am embarrassed. We all should be embarrassed to have in front of us a bill that has this kind of wording. I will read section 9 of this bill: "Any action taken on or after the 5th day of June, 1991 and before the coming into force of this act by any person purporting to act as the corporation's chief executive officer who was not the corporation's chairperson when the action was taken shall not bind the corporation." That is an embarrassment to me as a legislator. I say that against the backdrop of my previous remarks.

To be presented with a statute that has that kind of language is, I think, to insult this Legislature. It is a bit unedifying. I do not know who is to blame, but I am not very impressed. We have done some Looney Tunes things in this place -- as I say, the Repudiation Act of 1935 was about as looney as it got -- but in 1991 this is rather disquieting to me as a legislator. I just want to put that on the record.

When the government introduced this bill -- I think it was June 5, 1991 -- I was interested to read the minister's statement. The bill was being introduced to do a number of things. It was being introduced to give effect to new energy directions the government wanted to proceed with. It wanted, as part of those directions, to have more emphasis on conservation. It wanted, according to the statement, to make the business of Hydro more open and more accountable. It wanted as well to do that in a way that would be consistent with the traditions of this place. It was pointed out that it would be done consistent with the provisions of the federal government's Financial Administration Act. It is against that backdrop that I want to talk about this bill.

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I want to say at the outset that the bill as presented had a very remarkable mechanism. The guts of this bill are as follows. The new government wants to empower itself to provide directives to Ontario Hydro's board. Those directives could be, until today, anything the cabinet chooses and, once a directive is issued on any subject under the sun, the board of Hydro must accept that without delay or debate. That directive then must be incorporated into the mandate of Ontario Hydro, and any costs associated with that directive are passed on to the bulk power users.

There is absolutely nothing in this calling for legislative oversight. There is absolutely nothing in this that requires the cabinet to lay such a directive before the Legislature. There is absolutely nothing in this, until today's amendment, which requires that those directives ought to have anything to do with the traditional mandate of Ontario Hydro.

I understand what my friends say they want to do, and that is their decision to take, but what they say they want to do and what their bill states are not at all the same thing. I want to start analysing that relationship.

The reason I want to do that is I know who wrote the bill. The little history lesson is going to be invoked again. I am more than a little interested in and more than a little upset about the circumstances of the writing of this bill, because I know where this bill came from. I know who wrote it. I know who is sponsoring it. I know who is walking it every critical step along the way.

I have a lot of respect for my friends opposite. It may not appear that I do, but it is because I do, not only because of who they are personally but what they represent, that the knowledge of who wrote this and what he is up to just drives me to a wild Irish rage.

The tragedy for me is to see the lone ranger from Kitchener, the now minister, and it is quite clear to me the minister does not know what is in this bill, and I think I know why. To be fair, he will not be the first Minister of Energy not to know.

We once had a famous Minister of Energy, Jim Taylor, the long-time Tory member for Prince Edward-Lennox, who used to tell us what it was like. Jim was no acme of perfection, but he had some experience that I never had as a Minister of Energy and his public confession of his life and times as Minister of Energy again gave me a lot of sympathy for what the new minister is facing and, God bless her, what the old minister must have lived through in the genesis of this bill.

Let me start into the bill. Section 1 of the bill essentially deals with the board and adds four new people to the board. I gather that had to do with the fight, not entirely, but significantly. Some of my colleagues might carp about a former leader of the NDP being on the board; I have no problem with that at all. A good Liberal researcher, I think, is on the board -- she was one of our researchers, Adele Hurley -- and I think both she and Michael Cassidy will bring a very real distinction to those responsibilities.

Some people have talked about the deputy minister being on the board as a non-voting member. Knowing something particularly of the relationship between this Deputy Minister of Energy and the chairman of Ontario Hydro, why would I waste my breath on any provision in the statute?

Then we have the situation where the chairperson is now going to be the chief executive officer of Ontario Hydro. That, of course, gets into the question of the fight as well, because I gather the board reorganized itself and promoted a long-time Hydrocrat, Al Holt, who I do not know but who I gather has quite a good reputation as a very good, tough-minded fellow at Hydro. The so-called rump board made a decision to nominate Mr Holt as CEO at Hydro.

That was, I guess, done against the express wishes of the leader of the government and so we get the bill, we get the additional members to the board and we get the statute making clear not only that the chairman is the CEO but that, I repeat, "Any action taken on or after the 5th day of June, 1991 and before the coming into force of this act by any person purporting to act as the corporation's chief executive officer who was not the corporation's chairperson when the action was taken shall not bind the corporation."

It is just --

Mrs Caplan: Silly.

Mr Conway: Well, it is not silly but it is unedifying, and it says something about what we are dealing with here. What we are dealing with here, quite frankly, in two levels of the phrase, is power politics, and members should never mistake it.

Then there are the sections of the bill that I really like that really tell me who has written this. Listen to this: "The directors appointed," by the cabinet, "other than the chairperson, shall be paid such remuneration and expenses by the corporation as may be determined from time to time" by the cabinet, and the remuneration and expenses shall be part of the cost of Hydro. Essentially, the cabinet gets to set the remuneration for the board members.

But a change comes in the next section, because heretofore cabinet has set the salary in terms of employment for the chairperson. But what does subsection 1(4) of this bill say? "The chairperson shall be paid such remuneration and expenses by the corporation as may be determined...by the board." Is that not cute? Is that not clever?

Why do I get mad? Because I believe this government when it tells me that what it wants to do is to exact, on behalf of the people of Ontario, public accountability. That is a perfectly laudable ambition. What have I got in this bill? I have in this bill a very clever scheme developed by the Mephistopheles who wrote this thing that, oh no, he is not going to be bound by any cabinet setting his salary. No, that is going to be a change, presumably in the name of public accountability and public confidence. What we have here is a change so that while the cabinet will still get to set the per diems of the board members, whatever they may be, a couple of hundred a bucks a meeting, the chairman will have his salary set by the board.

I am going to tell members right now that if this government means what it says it means, and I believe as honourable men and women they believe it, then together we are going to do something, and one of the amendments we are going to make is to change that. We are going to give back to this government and to me and to our trustees in this respect, the Treasury bench, the right to set the salary of the chief executive officer of Ontario Hydro. I cannot conceive of an argument that would set that aside.

I have to digress for a moment. Stephen Lewis, when he was here, had a phrase and I have never forgotten it because it used to roll off his tongue with an eloquence that was breathtaking. The word was "chutzpah." I sat here today as a former Minister of Education and I pinched myself. I thought, am I hearing this? Am I hearing from the new NDP government a restraint message, which, I repeat, I totally support?

But who is carrying the message? A former chairman of the Toronto Board of Education. I almost had a heart attack. To quote Stephen Lewis, that is chutzpah with a capital C. It is breathtaking to be lectured by a recent chairman of the Toronto school board about the importance of restraint and all they are going to do and expect from the transfer partners. Bonne chance. Good luck. I just hope there are no Tony Silipos out there because if there are and he delivers that message, there will be a laugh so loud one would think Brian Mulroney has retired.

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I just say to my friends opposite that I accept what they are saying about accountability, but I want to serve notice now that I will support any government amendment, and should there not be one coming, I am going to move one. I am going to fight till hell freezes over to remove that section of the act that removes from the cabinet the right to set the salary and the benefits and all the rest of the chief executive officer of Ontario Hydro.

I do not know whether other members have heard it, but I have heard it, and I cannot believe it. I have heard because there are press reports that suggest that at a recent board meeting the new CEO asked for a salary of $450,000 annually, an expectation that he will get a bonus apparently -- to be fair, a bonus that has been paid to others but something in the neighbourhood of about $100,000 annually -- and a full pension of 75% after six years. That is only one press report. I cannot believe it is true. If it is true, I will fight till I drop before I let this bill pass, and I will let it pass, obviously as I must, but not until I have the sanction of this cabinet on that salary. If that is what the government wants to do, then that is fine. We will debate that here and elsewhere in the day and age of restraint.

When I think that my friend the member for Durham East is out there slogging night and day for his $45,000 or $55,000, and some character who is in the unbelievable conflict of interest of writing a bill that effectively makes him Minister of Energy, and at one and the same time -- a shamelessness that makes me think I am reading Gerry Caplan about auto insurance -- he writes into this little bill a removal of the power to set his salary from the executive council.

I am getting worked up and I am sorry, but I am going to tell members that there had better be a government amendment to this section because if the minister believes what he says, and I believe he means it, then we are going to have accountability and the cabinet and the Legislature are going to set that salary. By all reports that is the most significant public salary in the immediate or nearly immediate purview of the Ontario government anywhere in this province.

Now I want to deal with section 2 of the bill, and that deals with the directive power. I must say that the minister has introduced amendments, which to his credit are going to respond to what has been out there. Members have all heard it. I am not one of those who is going to go around and say, "I know they're planning a whole bunch of crazy things." I do not think any government wants to do anything obviously crazy. We did one thing pretty crazy and we paid the ultimate price. It is a reminder that --

Mr Hope: That was the election, eh?

Mr Conway: God, the member is not kidding, and that is the joy of being human. I have been watching that fabulous PBS series on Lyndon Johnson, somebody who was so incredibly good, who was so incredibly wrong, as were all the wise men, about Vietnam. It is good to know that you can sin with the best of them.

We look at section 2. We look at the directive power. Now that we have had the confession, my question -- for me it is the main point, and I am sorry the member for Cambridge is gone because he was sitting there saying, "Conway was on this rant about Adam Beck and all these people." You see, we have another Adam Beck. That is my point. The government has another Adam Beck. It does not know it. I think I do, and I may be wrong, but I do not think I am. I carried baggage for almost six years for a few characters, one of whom I am going to return to who would give the government members very high praise. They are the men and women, particularly the government members, but we all have to go out for our $45,000 or $55,000 or $65,000 and do our duty and explain government policies, the sins of commission, the joys of success and all the rest of it. I just think we owe it to ourselves to know what we are doing.

The poor minister introduces an amendment and in this it is hard for me to know who is Edgar Bergen and who is Charlie McCarthy. I am not at all surprised, and I congratulate the minister for backing off, but far more important to me is how did that get there in the first place? I know how it got there. I know exactly how it got there. That is why I say to my friends opposite that they had better know what they are dealing with. We all had better know what we are dealing with. We have a real live one here. I have had some experience with the new chairman of Ontario Hydro. I am going to deal with him a little bit later.

This directive power understandably got people's attention because it was open-ended. There was no encumbrance. There was no responsibility to put what was going to be done by way of directive in the context of Hydro's mandate, which is the generation of electricity and the distribution of same and some other things obviously tied to it. But most people, when they think of Hydro, expect a public utility that is in the power business and they do not expect it to be in a lot of other businesses that have nothing to do with power per se. This directive power was sweeping.

What really angered me was to read in the statement of June 5: "Not to worry. What we want to do here is what is in the Financial Administration Act of Canada." I asked a question the other day and I did not ask it innocently, because I saw that and I thought, that is really unusual. I went and I looked. The member for Victoria-Haliburton made a speech today and I am going to look at the Hansard carefully, but I have looked at the Financial Administration Act very carefully and I have spoken to some people in Ottawa who know its workings intimately. I do not intend to go on at any great length at this point, but I am deeply sorry to report that the minister's statement of June 5 to this House about the Financial Administration Act is significantly incorrect.

I cannot say what I want to say, and I have great respect for the member for Peterborough. Just like the directive power stuff, I do not think this is accidental. I do not think it is accidental at all. The Financial Administration Act has a number of sanctions that are similar to Bill 118, but it has some safeguards we do not see in Bill 118. Those are the safeguards members would expect to see. If there is going to be a directive, the Financial Administration Act makes plain that within 15 days of that directive being issued it must be laid before Parliament, that it is not within the power of any of these directives to expand the mandate of the crown corporation beyond that which Parliament has decided.

According to an official with whom I spoke in Ottawa, it is not the intent of the federal act to allow cabinet to use the directive power to materially alter the mandate or objectives of the operating legislation of any federal crown corporation. I repeat, there are a number of very --

Mr Hope: Did you say "in his opinion"?

Mr Conway: I am going to tell the member, it is not just his opinion, but it is the statute.

Mr Hope: Well, that's what you said, "in his opinion."

Mr Conway: The member should just forget his opinion and look at the --

Mr Hope: That's what you base it on.

Mr Conway: I am not a legal counsel. The member should forget what my friend said to me. I just look at the statute. There are significant differences between Bill 118 and the Financial Administration Act. They could not be clearer.

Mr Hope: You should never refer to the statute.

Mr Conway: Well, you see, we are not dealing with inadvertence here. There are places where we are, but here I do not believe we are at all.

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Let me just read two sections of the federal Financial Administration Act, section 91c: "No person shall, unless authorized by an act of Parliament, apply for articles that would add to or otherwise make a material change in the objects and purposes for which a parent crown corporation is incorporated or the restrictions on the businesses or activities that a parent crown corporation may carry on as set out in its articles."

Then, in section 95.1 of the federal act: "No parent crown corporation or wholly owned subsidiary of a parent crown corporation shall carry on any business or activity that is not consistent with the objectives and purposes for which the parent crown corporation is incorporated or the restrictions on the businesses or activities that it may carry on as set out in its charter."

Those are very clear legislative sanctions; that, together with the requirement that any directive must within 15 days of its issuance be laid before Parliament. Where do we find those in Bill 118?

To be fair, the government is moving to contain that, and I congratulate it for it and I will support it. I know who wrote the bill. That was not an accidental mistake. I am angry, to say the least, that two responsible ministers in their relatively new government would be made to stand up in this House and speak words that in my view -- to use the most charitable phrase I can find -- are incomplete relative to the facts of the case vis-a-vis the Financial Administration Act of Canada.

As I say, we will want to look at the amendments, and I congratulate the government for responding to the pressure.

Mr Hope: There is no pressure.

Mr Conway: Clearly the pressure. It is obvious to everyone, and that is the way the system works.

This section is not insignificant and we are going to talk about it at some length.

I want to turn now to the issue of how that directive power has already been used. I should say that I understand that under the Power Corporation Act, as amended in 1989, there were sections introduced that have given the new government some scope to move in the case of Elliot Lake.

I know some members have not read the act. One of the things they might want to do is read the order in council around Elliot Lake, because I have been reading it. It is a very interesting order in council. Orders in council are made public from time to time. They are as a matter of course made public all the time. Legislators tend not to see them very much, because they are an executive instrument.

I think it is fair to say that the public out there is seized of this concept of power at cost. It does not mean the same thing to everybody; as I say, to an urban manufacturer it means one thing, to a farmer it means something else. But there is a great deal of concern that, my God, we are going to have electricity bills that are going to start to carry a whole series of costs and programs that have nothing to do with power.

Of course, they look to the two initiatives the government has taken, one in Elliot Lake, the other in Kapuskasing, and I tell members they have some cause for concern. I repeat that, lest there be some activist in the NDP who wants to run out tonight and say, "You know, Conway's down in that Legislature saying Elliot Lake should be left to its own devices."

I am going to make another slight digression to another interesting report, the select committee report of March 1978 on the uranium contracts which are at issue in Elliot Lake. I remember those days. I was not on the committee at that time, but the committee was chaired by a former leader of the NDP, Donald C. MacDonald. Among the NDP members was a very effective member of that committee, the now Minister of Housing, the member for Ottawa Centre, then the critic for Energy. She was the member for Carleton East actually at that time.

Bill Davis as Premier referred these extremely interesting contracts to the select committee in the minority government days of 1977-78 and said, "We want the select committee to take a look at these over the course of some months" -- I forget; it was late summer of 1977 through the spring of 1978 -- "and we want you tell us whether you think they're in the public interest." I am not going to bore members with the details. The government members, surprisingly, thought they were very much in the public interest. The Liberals and the New Democrats thought they were not in the public interest, and the NDP, in its minority report, made it very plain that it thought those uranium contracts were very much not in the public interest and that the government ought to nationalize Rio Algom and Denison.

I find it interesting, in light of all the antinuclear rhetoric that is out there, all that has been said about these contracts by the NDP over the last 15 years, that what is the first thing the NDP government does with those contracts when it gets a chance in government? It extends them by three years at a premium cost to the ratepayers of $160 million. The government will say: "Listen, the cause was good. Surely the end justifies the means."

I just want to make two comments. The government is avowedly against the extravagance of those contracts, and it has been avowedly concerned about the high costs of nuclear power. What is the first thing it does in this connection, for whatever reason? It extends these extravagant contracts by three years at a cost to the ratepayers of $160 million, and it decides, obviously, that it may want to do more of the same elsewhere. I simply make the point that if it is concerned about the costs of nuclear power, I hope it has understood what it has done here, for whatever good reason.

The parliamentary assistant is saying, "Yes, but it's only for three years, and when you assess it against, my God, the cost overruns or the differential price of the last 10 years, it's a pittance." That may be all well and true, but I repeat, what did the government say about those contracts and what are its stated concerns about nuclear power? "It is too expensive and those contracts are extravagant." The first thing it does is add to the cost of nuclear power, apparently, in quite a significant way by extending contracts that it always thought were too generous at a premium price of $160 million.

The parliamentary assistant will say and the cabinet would certainly say, "We looked at a range of instruments" -- presumably -- "and we thought this was the best way to do it." That is fair ball. That is a choice made. We will debate that. Certainly, I am sure the people in Elliot Lake, in light of some of the other alternatives they were probably faced with -- and my friend the member for Algoma-Manitoulin is very vigorous in pressing the claims of that area to his colleagues in the Liberal caucus.

At any rate, the order in council on Elliot Lake was fascinating. I am going to read it to members to show them the way Hydro does business, because the government is interested in and concerned about openness, fairness, the Marquess of Queensberry rules and accountability. Let me read the second order in council having to do with Elliot Lake. Members may not have seen this, but it was signed by the Lieutenant Governor's hand on June 6, 1991. It was concurred in by no less a person than the Minister of Health herself, then the Chairman of Management Board, the member for Beaches-Woodbine.

I am going to read this carefully, and I want members to listen:

"Pursuant to section 9a of the Power Corporation Act, RSO 1980, chapter 384, as amended, the Minister of Energy is authorized to issue the following policy directive, and the same is hereby approved:

"(1) Whereas the Hydro corporation is desirous of terminating or amending existing agreements relating to long-term acquisition of natural uranium from producers in the Elliot Lake region; and

"Whereas such action will result in savings for the Hydro corporation" -- and I want members to listen carefully to this -- "but will adversely affect the said area;

"Approval by the cabinet under section 23 of the Power Corporation Act relating to the acquisition of uranium from other than Elliot Lake sources chosen by Hydro will be granted, subject to the normal government scrutiny and review, if the Hydro corporation does agree to participate in the Elliot Lake region economic development program referred to in a regulation made under the Power Corporation Act."

Is that not interesting? I used to play a lot of hockey --

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Mr Mammoliti: You're out of breath.

Mr Conway: I am not out of breath. Did you hear what I just read?

I say to the government, I accept what it wants to do. They want openness, fairness and equity. Basically that is the following. The cabinet is saying to Hydro: "Listen. We know you believe, and we believe it too, that these contracts are extravagant and that you can buy much cheaper uranium elsewhere, and we're quite prepared to allow you to do so. But you understand that if we terminate these contracts, there will be a devastating effect on Elliot Lake, so let's make a deal. Our deal with you is this. We'll let you buy uranium elsewhere than Elliot Lake, but only if you agree to participate in the regional economic development program in Elliot Lake."

Mr Hope: What's wrong with that?

Mr Conway: My friend the member for Chatham-Kent says, "What's wrong with that?" For a government that is talking about openness and accountability that is blackmail, pure and simple. That is exactly what it is. If that is the way the government wants to run Hydro, it is fine. They should go to it. But they can understand my incredulity when they tell me, as the minister did on June 5, that they want a new day and openness and accountability.

I suspect Hydro has been blackmailed before. I suspect the government is not the first to do this. But I suspect I will have to go some to find an order in council that is quite as delicious as this one is. This is the smoking pistol. It is right there for anybody to read. I just make the point. The government is running the Orono public utilities commission, which is sitting back and saying, "I really don't like this business around the directive power, but Mills is a responsible guy and I'm prepared to give him the benefit of the doubt." Somebody then comes along and says: "By the way, have you seen chapter 1 in this book? Have you seen Elliot Lake? Have you seen what they did?"

It was no surprise to me that added to that order in council was this third point: "That officers and directors of the corporation who exercise their decisional discretion in compliance with the policies set out herein will be saved harmless and indemnified jointly and severally from and against any and all liability incurred arising from this exercise."

Believe me, if I were on that Hydro board and I got that, I would want the best lawyer in North America to protect me from what happens. If I were on that board and some beleaguered Hydro ratepayers in Kent county decided to take the corporation to court -- I am not a lawyer, but that order in council raises with me grave concerns about the kind of relationship this government wants to have with Hydro.

My only point is this: I hear what the government wants to do and I commend it for that, though I think a lot of the policy is ill advised. But they have a right to be wrong. I look to the speeches, I listen carefully to what they have to say, I look at what this act says and allows and then I look at the first order in council. I have no problem whatsoever if they want to provide assistance to Elliot Lake.

I take them back to my example in the farmer-labour days. The government wanted very much to provide relief to farmers and people in rural Ontario but chose not to do it the way this government is doing it. They are doing it by burdening the ratepayers with costs that have much more to do with regional economic development or regional economic relief, which are entirely laudable objectives. But there is a fundamental question of public policy about which I will fight the government tooth and nail. Premier Drury decided to help the farmers not with a rate-based program but with a very interesting mix of provincial subsidies, some of which taxed Hydro itself.

The Elliot Lake situation gives me great concern. I look then to Kapuskasing. The concern I have around Elliot Lake is what this order in council says and it could not be more clear. If they can do that in Elliot Lake, what are they exposing Hydro to and the people of Ontario to elsewhere? It is a slippery slope from which there is little or no recovery.

Then we have the situation at Kapuskasing. I know the Premier and the Minister for Northern Development and the member for Cochrane North worked tirelessly to get a fair resolution. I know the private sector character with whom they were dealing -- and I am going to tell the members that is some character. I am glad the Premier was doing the dealing and not me, because I would not have the patience.

Mr Mammoliti: How does Mike Brown feel about it?

Mr Conway: The member might want to ask him. This is a debate that will go on for some time. I say to my friend who is interjecting I do not think he is understanding the point. The point is not a question of whether they provide relief to Elliot Lake and Kapuskasing. They absolutely want to do that, everybody will concur. The question is how they want to do that. I am not one who would accept a public policy that would deliver that kind of regional economic program on the basis of ratepayers. I think that is a fundamental mistake to be made by this or any other government.

We get to Kapuskasing and we have a different situation. The situation there concerns Smoky Falls. My point there is going to be somewhat more concise. The government directed Hydro to buy Smoky Falls at a cost of about $138 million, and further directed that a number of specific power contracts be entered into with the mill for a period of 10 years at a considerable cost, again for a perfectly laudable objective. I have two questions there. Why should the ratepayers of Hydro pay that bill?

I want to go back to a fundamental question of taxation and fiscal policy. One of the places where I think the NDP has been eloquent, passionate and consistent is in its loathsome detestation of regressive taxes. It does not like consumption taxes, it says, and I understand its point of view because they are indiscriminate. A grandmother living in Orono will pay those taxes at the same rate as some Toronto plutocrat. That is unfair. It is inequitable.

I say to my friend the member for Yorkview that he should think about the tax policy that informs this bill. That grandmother, that single parent in my community who must have hydro and has no choice, is going to pay disproportionately for those regional economic subsidies in a way, for example, that some of the rest of us will not to the same degree. In my case, I got my electrical bill at the house in Pembroke the other day. It was $14.10. I was living at my cottage for the summer and what have you, but it is also because I have a house that is largely run by natural gas.

My neighbours, people on fixed incomes, have no choice. Instead of being $14.10 for 58 days their hydro bill will be $250. My point in this is the equity of a policy that suggests that the bailouts in Elliot Lake and Kapuskasing, well intentioned as they are, are going to be disproportionately carried by the people of Ontario. That is what I object to.

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They should be carried, I say to my friend the member for Sault Ste Marie, by the consolidated revenue fund, because we all pay into the fund largely on the basis, more or less, of our ability to pay. In relative terms, relative to Hydro rates, it is a lot more progressive. It is not perfect.

I know my friends from Frontenac-Addington -- the Minister of Government Services represents a large county like mine. Those people up in Northbrook and Cloyne and Danby are sitting there. Like most of my constituents, their Hydro bill is going to be a lot more dramatic than that of their friends living in Kingston, because the people in Kingston have a choice.

I just hope the government members understand the tax policy that is incorporated in this scheme. They are not being very realistic if they do not understand that. My friend from Durham I think understands.

Mr Mammoliti: Your speech was okay at first.

Mr Conway: I would put this as a much more fundamental point. I ask members to think about regressive versus progressive taxes. If they cannot understand how Hydro rates are more regressive than, say, an income tax, there is no hope in this debate. For those hundreds of thousands of Ontarians who live in rural environments with no choice but Hydro, it is a doubly iniquitous business.

The second point I want to make around the Smoky Falls business has to do with the demand-supply proposal that Hydro has now before the Saunders panel. I am quite astonished, actually. I thought the reason Hydro was interested in Smoky Falls, in significant measure, was because it fit into the further development of the Moose River basin. I may be wrong in that, but I do not think I am.

What did we see the other day? We saw that the government has gone to that panel, to the demand-supply environmental assessment panel, and withdrawn the Moose River hydroelectric development in light of concerns voiced by the aboriginal community. I understand that. My question is almost a commercial question. Why did we force Hydro to buy Smoky Falls, at apparently a premium price, if we are not going to proceed with the Moose River development? I suspect, on the basis of the announcement the other day, that we are not going to be proceeding for some long period of time, if ever, with the Moose River development.

Where do we stand with the environmental assessment of the Hydro demand-supply plan? Every day the plan changes. I do not know whether my friends opposite understand, but I can appreciate, on the basis of the party position over the years, about no more nuclear. I hope the government understands what it has done at Moose River. It has withdrawn over 50%, I think it is, of the future hydroelectric development in the province. That is its right. So it is not only not proceeding with any more nuclear but it is shelving substantial components of the future hydroelectric development, for whatever good reason.

Hon Mr Buchanan: Who was going to cancel Darlington in 1985?

Mr Conway: My friend the minister says, "Who was going to cancel Darlington?" I am not here saying that Darlington has not proceeded. My point is, what is the integrity --

Hon Mr Buchanan: You guys were going to cancel Darlington.

Interjections.

The Acting Speaker (Mr Villeneuve): Could I call all members to order, please. As you know, interjections are out of order. The honourable member for Renfrew North has the floor and you will have your opportunity to question, to comment and to participate. The honourable member for Renfrew North.

Mr Conway: My question is simply this: What is the integrity of the environmental assessment of Hydro's 25-year demand-supply plan? It changes every day. Not only has the government pulled out the Moose River proposals -- again, from its point of view, for admittedly good reasons -- but every day the chairman of Ontario Hydro changes the conservation targets. On what basis, who knows? I do not know how the panel can continue to do any business over there. In fact I would expect one of these days they would adjourn the whole proceeding.

At any rate, that is not a major concern, but I must say I am very interested to know what exactly is planned at Smoky Falls in light of what the government has chosen to do with the Moose River development.

In my remaining time, I want to look at some other aspects of the bill. I hope I have made the point around my concerns with the directive power and what they have actually done at Elliot Lake with that actual June 6 order in council. It is not theoretical; it is real. They have done it. I was absolutely blown away by the language of the OIC, and that does not give me great comfort about what they or any other government might want to do in the future. That is why when this bill is amended, if that is what they are up to, I want those kinds of directions tabled in this Legislature. Because they want and I want accountability and oversight where they are not going to be allowed, as I would not want any government to be allowed, to pass that kind of directive and not ensure that it sees the broad light of day in this Legislature.

The points that have to be made around fuel substitution I am going to leave perhaps to another time, except to say that, again, Hydro ratepayers in my area are flabbergasted to think that their Hydro rates are going to be used to subsidize an off-electricity program.

That does not sound bad, but I think one of the first plans the government has, the pilot project, turns out to be in my own constituency. The local reaction is really interesting. Not too many people know about it yet, but I have a feeling when people find out that it is specifically -- I gather the cabinet has before it, if it has not already dealt with it, the pilot project to have Hydro subsidize substantially natural gas conversion for the town of Deep River, a town which is in dire straits because it is a single-industry town in my county committed to nuclear power research. So the members can appreciate their agitation at the present time.

But when Hydro ratepayers finish digesting Elliot Lake and they start to think about what the fuel substitution policy is actually going to mean -- that fewer consumers in given areas are going to be forced, with substantially higher rates, to pay for friends and neighbours to switch to other sources that will only drive their rate up even higher -- I suspect the politics of that are going to be incendiary. I might be wrong, but I have a feeling it is going to attract the attention of a lot of members.

Hydro rates are like insurance rates. We all pay them. They are inescapable. They are a tax that lands on one's head quite dramatically. They really capture the imagination. When you know they are increasing by 45% minimally over the next three years, and much higher than that in some areas, and you read in the local paper that you the Hydro consumer, with rate increases that are going through the roof, are subsidizing -- can you imagine being out in the country in Elgin county and getting the Hydro bill one day and just getting mad as hell because you have lost your job and God knows whatever else has happened and the Hydro bill is up 15% and you read in the London Free Press that $350,000 is being provided by Hydro to allow people -- not in your town because you do not have the natural gas alternative -- to switch?

If you are on the subsidizing end of that, I do not think you are going to be very happy. I do not think you are going to be very happy at all. As I said, I think there are very, very incendiary politics associated with that.

When I deal with the last section of the bill, I want to simply make the point that there is a wonderful retroactivity in this bill. It essentially says that the whole bill comes into force at royal assent, except those parts of section 1 that deal with the empowerment of the chief executive officer. There again, I think we have what this bill is all about.

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I want to conclude my remarks today by making some very summary comments around what I think this bill is all about. I think this bill was written by the man who is going to principally benefit from it. I do not think there is any doubt. This bill was written by the now CEO of Hydro, the former Deputy Minister of Energy, Marc Eliesen.

I know Marc Eliesen and I know the following things about him. He is a very bright, he is a very committed, he is a very tireless public servant. I was even asked to take him on as a deputy minister in my time as the Minister of Education. I chose not to do so.

But I have talked to a number of people who know Marc Eliesen. I know he is near and dear to the Premier's heart. Toronto Life tells me so. Could there be a more incontrovertible source of real information than Toronto Life? I doubt it. I think Toronto Life calls him the Premier's alter ego. That is why I want the Premier to stand up in this Legislature and tell me what he as Premier is prepared to authorize as payment and working conditions for his alter ego.

Those who have worked with Marc Eliesen know him to be not just tireless and not just creative, but Marc Eliesen is a man with a mission, and Marc Eliesen's role in the scheme of things is a very important part of that mission.

I have to say this. I want to congratulate the government this week, very directly, for the firing of Bernard Ostry. I think they deserve to be congratulated, just as the Davis, Miller and Peterson governments deserve to be castigated for that man and the incredible misconduct I believe he perpetrated on the public purse of this province. I consider it one of the most shameful aspects of my failure as a minister in the Peterson government that on at least two occasions, if not three, I could not have that man fired.

I wanted him fired not because he is not a bright, capable fellow. He is all of those things, but Bernard Ostry is today what he, in my view, always has been. He is congenitally insubordinate. His attitude to any kind of executive or parliamentary control is today what I think it has always been, and that is a proud and consistent middle-finger salute. Words fail me to describe my upset and outrage that this man was allowed to continue at TVO while I was in the cabinet, and I am just delighted that the Bob Rae government fired this man for the endless obscenities that he perpetrated on the public purse. I do not want to belabour it, but --

The Acting Speaker: Yes, it is Bill 118 we are working on.

Mr Conway: I know, and that is my final point. There is a connection. It is not exactly the same thing, but I am deeply concerned that in a different way, we have ourselves another real live one; that in Marc Eliesen we have a manipulative superbureaucrat who does not give a tinker's dam for this cabinet, for this Parliament, and quite frankly for most of the people of Ontario, as bright and able and creative as he is.

I accuse him of putting this bill in two ministers' hands and I accuse him of knowingly misrepresenting some things that he bloody well ought to have known. I think that is the way he does business and I am horrified to think that, for all his ability, he is being offered up as the new major-domo of accountability.

These are harsh words and I probably should take some of them back, and I would, I suppose, in some respects. Well, I do. But I am really concerned and I am really angry, because I think we have got ourselves another one. When I think that Bernard Ostry dined out here for nine years, with one outrage followed by yet another extravagance followed by yet another unbelievable insubordination, and it took nine years and three governments to finally root that cancer out, I hope we have learned a lesson.

Bernard Ostry is not this government's responsibility, although he is a great credit to its resolve. But Marc Eliesen, mark my words, on the basis of experience that our government had with him, is a man quite prepared to advance public policy completely outside any statute, completely outside the stated aims of any government, because in Marc Eliesen's world, the end justifies the means and any end worth having is an end, rather like Ptolemy's universe, with man, in this case King Marc, at the centre.

This government has a right as a government to make these changes. I have a right as a member of the opposition to point out where I think this is flawed. I think the bill is flawed in some areas where they are not doing the things they want to do. I am quite prepared to absolve them of that, because I think I know the problem, and the problem is the man who wrote this bill, the man who will benefit from this bill, a man who, as it was once said of imperial Britain, has no permanent friends and no permanent enemies, just permanent interests, and those interests are always going to incorporate Marc Eliesen at the centre of things.

I would conclude my remarks by saying this is an important bill. I think it is a bill that does not do some of the central things that the government wants done. I commend the minister for bringing forward amendments to deal with particularly the unrestricted directive power.

I hope every member in this assembly looks at this bill carefully. I hope a lot of people are prepared to debate it and the energy policy that informs it, because I think they are playing with dynamite. I support a lot of the rhetoric, but the reality, my friends, particularly for people in my part of rural eastern Ontario, is going to be pain, the like of which they have not experienced on their Hydro bills ever before.

I think the province, the community, the economy is in dire risk of running serious shortages that are going to compromise not just the social wellbeing but the economic prosperity and prospect of the province and much of the country, and as I look to the developing stages of this bill, I am going to expect some amendments that are going to deal with more accountability and legislative oversight.

I certainly expect this bill will be canvassed not just in this chamber but, during the winter intersession, across the province, because many people I represent will want to talk about this bill, will want to tell the government what they feel, which may in some cases not be what I feel, around the key ingredients of the directive power and the inadvisability, the unfairness, the regressivity of Hydro rates being used to deal with the Elliot Lake and Kapuskasing difficulties, about which we all want something done.

This, my friends, is a very important bill. That is why I felt the need to go on at some length this afternoon. What I say I do not say lightly. I am sorry in some ways that I had to be so accusatory, but I look at this bill and I see some of the old manipulations that would make Adam Beck rise from his grave and beat his breast and say, "My, my, but my legacy of public ownership but with no public accountability is apparently, on the basis of Bill 118, alive and well in the heart, soul and mind of Marc Eliesen, chairman-designate of Ontario Hydro."

Mr Hope: Unfortunately, I missed part of the history class that was given during the speech. But, dealing with the comments about the Chairman of Management Board being a school board trustee and talking about constraints, I must reflect back to the member opposite that he had the ability -- I stand to be corrected -- at one time of making Ontario Hydro accountable to the people of Ontario but never did so.

Accountability means accountability to the taxpayers of this province -- he referred to this, and he referred to the orders in council -- and also accountability to the people of that community. But when we talk about private industry, we also want to make sure that when private industries leave they are accountable to the community from which they have taken the fruit off the tree. It is very important that we understand that the management that took place under the direction of Ontario Hydro made some bad decisions, and there are a lot of people who are being affected by those bad decisions. When we look at private industries to make sure they are accountable to the communities they devastate, I think it is important that we also talk, on the same hand, about accountability in our own crown corporations.

It was very interesting that as he generated comments and reflected his concerns about this bill, he focused a lot on the person. The bill itself, I think, is one bill that is needed. I think the government ought to be a part of the decision and process that will lead to the future, dealing with energy. From my own personal viewpoint in looking at this bill, I think it is a very positive step in making sure that the accountability to the taxpayers of the province, and also the accountability to the communities that Ontario Hydro plays a role in, will be there under this piece of legislation.

Mr McGuinty: I want to take the opportunity to thank the member for Renfrew North for making the kind of contribution that only he is capable of making. He has lent a great deal of insight to this debate. I knew we were in for a special treat, judging by the number of books he put forward today. I think perhaps we can make arrangements to get him a bigger desk.

The historical perspective is something we are often lacking, I find, in debating issues in this House, and the member has lent insight into that aspect; that is particularly important in dealing with Ontario Hydro, a very important institution in the development of this province. I know I speak for the government members as well, in saying that we certainly, if nothing else, learned a great deal from the member. They may not agree 100% with everything he said, but I want to express my appreciation.

Mr Sutherland: I, too, want to compliment the member for Renfrew North for a very entertaining afternoon; not only that, but for bringing forward a great deal of historical perspective on Ontario Hydro and certainly a good display of oratory.

I do not agree with everything he said.

I do want to bring out some issues regarding nuclear energy, because he referred to the comments the member for Victoria-Haliburton had made related to the issue of productivity. One of the reasons we are having these rate increases right now is that the nuclear power plants have not performed at the rate that was originally projected, and some of the money Ontario Hydro had borrowed to finance that. If it had produced at that level, then maybe we would not have as much of a debt problem and these significant increases. I guess that is an issue that has not been discussed that much. I do not hear too many of the public utilities commissions on that issue, certainly the ones in my riding that are complaining about the increases.

It does not seem to make a significant amount of the increase. When you look at Darlington at $13.5 billion compared to $2 billion, versus the figures the member mentioned on issues related to Elliot Lake and Kapuskasing, Elliot Lake and Kapuskasing seem to be very small in comparison. To me, that needs to be a focus of the issue in terms of where some of the productivity of that industry has been.

Mrs Sullivan: I particularly appreciated the remarks from the member for Renfrew North, who has been very involved in debates on Hydro in the Legislature over the years since he was first elected, about 16 years ago, and I would suggest to members who are new to the Hydro debates that they review the remarks, particularly those relating to the accountability of Ontario Hydro, which were in fact extremely pertinent.

The accountability that the member was discussing related to the accountability of Ontario Hydro to the government, to the Legislature and to its ratepayers. Indeed, what he was talking about was the separation of the government mandate in terms of the setting and directing of energy policy, and the mandate of Ontario Hydro in delivering electricity and areas surrounding the question of electricity delivery.

I think those remarks are extremely pertinent, that they are important to the debate, and I hope members will review them so that we do not have the kind of misunderstanding we heard from the member for Chatham-Kent on the question of accountability. It was clear from his response to the member's question that there was a clear misunderstanding of what Hydro accountability meant to the government and to the Legislature and to the ratepayers.

The Acting Speaker: The honourable member for Renfrew North has two minutes to reply.

Mr Conway: Just in summary, I repeat that I think it is both economically and socially the most unfair policy to pursue regional economic development strategies on the backs of electrical ratepayers. However laudable the objectives are in these communities, and I accept the importance of those objectives, it is unfair and inequitable to base those programs on hydro ratepayers; that is what the consolidated revenue fund is for.

The second point is, the history lesson is not delivered just out of fun or personal interest or some arcane diversion. The history lesson is delivered to tell you something about how these questions of accountability and relationship have been fought about over the years. I cite the example of the Farmers' government and the way it dealt with rural electrification. They rejected, in the face of enormous political pressure from their constituency, making the ratepayers pay for that added cost. They did that by provincial subsidy.

Finally, on the subject of accountability I make the point that I am very concerned that the bill does not deliver what it wants to deliver, that it empowers a man in a way I am very concerned about, because while I have some regard for the intelligence and the creativity of Mr Eliesen, I know something of his past record, and it causes me great concern as a parliamentarian who wants to assert some reasonable parliamentary control over Ontario Hydro. When I think of the chairman, Marc Eliesen, I can think only of what Sir Humphrey Appleby once wrote in his diary, Sir Humphrey of Yes, Minister fame. Sir Humphrey once observed: "In the great restaurant of government, civil servants are the cooks and the politicians are the waiters. We prepare all the dishes and they serve them up to the customers." Sir Humphrey, I think, spoke well of Marc Eliesen's view of us and the business in which we are engaged.

The House adjourned at 1803.