The House resumed at 8 p.m.

CORPORATIONS TAX AMENDMENT ACT (CONCLUDED)

Resumption of the adjourned debate on second reading of Bill 28, An Act to amend the Corporation Tax Act.

Mr. Charlton: Mr. Speaker, I’ll try and pick up where I left off.

Section 6 of the bill was one of the sections that those of us in our caucus are a little bit concerned about. This section would appear to weaken the provisions that a corporation has to reside in Canada to be eligible for tax deferrals. This change obviously will reduce the amount of taxes which are due and payable under this particular section of the Act. We would like to know how many companies that this particular change will affect and how many tax dollars are involved in this change?

We are not exactly sure what the government is trying to accomplish with this particular provision. Obviously the government must have some kind of study that they have done showing something and they must have some goal in mind. We would certainly like to know before we vote on third reading as to exactly what this provision is intended to accomplish and how much is involved.

Section 8 is the other section about which our caucus is somewhat bothered. This section establishes a difference with the federal Act; and as we mentioned earlier, for the most part, after Bill 88 last fall and many of the provisions of this bill, we are trying to parallel the federal legislation but here we have a difference.

In the discussions with the ministry staff, myself and the member for Nickel Belt (Mr. Laughren) were told that this section deals with the whole question of write-offs of the cost of investment resource properties, and conversely the inclusion of the proceeds from the sale of resource properties all in one year. This section specifically refers to the case of partnerships.

We understand that the other areas of the business sector, the corporate sector and so on are already protected by this kind of provision. However, we are opposed to this kind of practice of write-off in one year on general principle. Again, we would like to know just exactly what it is the government is trying to accomplish by this particular move, by making the Ontario legislation different from that of the federal government. So perhaps the minister, in his response, can go through the rationale for this and let us know just why we are making this difference with the federal legislation.

Hon. Mr. Maeck: What section is that?

Mr. Charlton: Section 8.

Section 11 of the bill will change the status of trust and loan companies and put those companies on the same basis as banks for the purpose of applying capital tax on invested capital. In the past banks have been dealt with at a higher rate and it would seem to us appropriate that this move happen now.

Mr. Nixon: Here comes the Minister of Education (Mr. Wells).

Mr. Roy: And the former Minister of Education (Mr. Davis).

An hon. member: I don’t believe it.

Mr. Warner: To what do we owe this pleasure?

Mr. Charlton: Again, the government has not made it clear in any way exactly how this change is going to affect the companies involved. Again, I ask if the minister could please inform us exactly what studies the government has done and what those studies show in terms of the effect on the trust companies and the loan companies, and as well what this will mean in additional taxes to the province, so that we can weigh the benefits of this particular move.

Section 15 of the bill reduces premium taxes for insurance corporations on life and accident policies from three per cent to two per cent. The statement in the budget implied that this was to assist Canadian insurance companies in selling abroad, specifically, I assume, in the United States. We are not opposed to assisting Canadian companies in this particular way; but, again, it seems to us that although the government has presented us with a budget and a number of tax changes in this budget, there has been very little specific rationale presented in the way of exactly what the benefits are and exactly what the costs to the taxpayers of this province are. We would like to know exactly what the government feels is its goal, what it is going to accomplish for the insurance companies and how much this move is really going to benefit their competitiveness in foreign markets.

In summing up, as I said at the outset we are going to support this bill in principle on second reading. We would like some of the answers to some of the questions that we have asked before we deal with it clause by clause. We feel quite strongly that although there is nothing in this bill that is seriously objectionable, except the two sections 6 and 8 that I mentioned, in order for us as members of this Legislature and legislators with a responsibility to the taxpayers of this province to decide, it would be useful for us if we had the opportunity to look at the benefits of these moves in terms of their benefits to the companies involved and the losses in tax dollars; or conversely the detrimental effect on the companies involved :and gains in terms of tax dollars, so that we can weigh those two sides in determining just exactly what the real benefits of this particular bill are.

Mr. Nixon: It is not my intention to take an undue period of time in the discussion of these amendments to the Corporations Tax Act. I have a feeling that the large numbers of people in our galleries tonight are here so that they can hear the debate on the body-rub legislation that will be introduced in a few moments. The only other reason they might be here is that they have heard that the Attorney General (Mr. McMurtry) has returned from his onerous duties over the last few weeks and they are perhaps looking forward to that.

Hon. Mr. Davis: Along with the member for Ottawa East (Mr. Roy).

Mr. Nixon: As I look around the membership here tonight, there are occasions when the galleries are crowded by virtue of the attendance of a specific member. I am trying in my own mind to decide who is here who is not usually here.

Mr. Speaker: That really has nothing to do with the Corporations Tax Act.

Mr. Nixon: So I presume they must all be from Brampton.

Hon. Mr. Davis: I wish I were so fortunate.

Mr. Nixon: Either that or Scarborough North. I don’t know how we are going to determine just what.

Mr. Nixon: I did want to say just before this bill is carried -- and we certainly are supporting it; as my colleague from Erie has indicated it is essentially a routine bill -- how for So many years various Ministers of Revenue, and the Treasurer before we had a Ministry of Revenue, have brought forward legislation indicating the attempts by the Treasury, or in this instance the Ministry of Revenue, to bring our legislation into an even closer parallel with the federal legislation. They have tried and tried, and we are getting very close indeed, there is no doubt.

In this instance, unlike the one on the personal income tax, we do have a collection responsibility here. In personal income tax the federal jurisdiction collects all the money and takes all the political blame, and then sends back a couple of billion dollars so that the government here can build schools and build roads and develop the north and get all of the credit without the blame for collecting the tax. The only way the people in the province of Ontario know that the provincial government is connected with the personal income tax is that the provincial government now insists on including a form which says we are going to give you money back to help you pay for your accommodation or to compensate for your old age or to assist the farmers in certain inadequate ways.

So the federal people have the blame to collect all the money and our friends across the way send out cheques, together with a little note of criticism associated with the federal initiative. It really is most unfair. But in this instance, I have a feeling there will be a second amendment to this bill brought forward within a few days, because members are aware of the excellent package presented by the Liberal Party and by my colleague, the leader, which will try to change the policy of the present government on the unacceptable 37.5 per cent increase in OHIP fees.

Many people in the province don’t have to pay it. People over 65 don’t have to pay those fees, and it is very proper that they should not. Certain others, such as members of the Legislature, don’t have to pay those fees either; but we know that a large section of the population are billed directly and must send in their cheques four times a year, and we feel the tremendous increase associated with the OHIP fees cannot be permitted to go forward.

I saw in the Globe this morning and in the Star this afternoon an indication that the Treasurer (Mr. McKeough) was perhaps changing his mind. But I am sure that once he and his colleagues in the ministry -- and we haven’t had four front-benchers here in the evening since Christmas, I would say, at the least -- But I have a feeling --

Hon. Mr. Davis: None of us was here at Christmas.

Mr. Makarchuk: Christmas of 1976.

Mr. Nixon: That was last Christmas.

Mr. Roy: Bette, it is all the heavyweights.

Mr. Nixon: I have a feeling that we are going to have an amendment offered to the Income Tax Act which will, in fact, raise the corporation taxes in this province by a half of one per cent, which is a part of the Liberal package. In this way we are going to combine that with revenues from Wintario and certain other selected sources so that the people in this province will not be oppressed by this terrible 37.5 per cent increase which the Treasurer has been trying to I am down our throats.

I have a feeling that when the Treasurer sees the package we have put forward he will strike his brow and say, “Why the devil didn’t I think of that?” He will be coming forward with the amendments, with the changes which are going to moderate and mitigate the --

Mr. Speaker: I want to remind the hon. member that he should speak of what is in the bill not what is not in the bill.

Mr. Nixon: Right, right. So having to do with the Corporations Tax Act, I certainly applaud the government in frying to bring it more nearly into parallel with the federal jurisdiction, so that the corporation tax base should be as nearly uniform as possible. But the government here has really lost any freedom of action it might have had to use the personal income tax by way of reduction as a matter of policy, and I would suggest to you, Mr. Speaker, that before many days are past we would trust that there will be an amendment to this Act before us; because the alternatives are clear, that if such changes are not placed before us we will have to govern ourselves accordingly and the minister, the Premier (Mr. Davis) and others certainly know what that means.

Mr. Makarchuk: Mr. Speaker, I would like to congratulate the Liberal Party on using Wintario for OHIP. Perhaps they would invite Jean Drapeau to come and visit us and perhaps act as a consultant to the Liberal Party in view of the fact that he has had such a spectacular record of success in operating projects under the lottery system.

Mr. Roy: Didn’t think you noticed.

Mr. Makarchuk: Oh yes, we notice those sorts of things.

The reason I want to talk about this bill is to stress the tender loving care that is extended by the Tories to the corporations. Three-fifths of one per cent, that’s what I call a beautiful tax rate.

Mr. Worton: Are you going to vote for it, Mac?

[8:15]

Mr. Makarchuk: It would be nice if we could extend the same level of taxation to the rest of the people of Ontario. Unfortunately, there are certain people who have to pay 30 per cent and 40 per cent. In this case, it’s three-fifths of one per cent. And who are we extending this rather beautiful treatment to? We extend it to the banks and to the mortgage companies. And what is their record of accomplishment, what is their record in the last few years when we have had other industries operating at a loss? When we have cutbacks in wages? When we have the wage earner limited to eight per cent or six per cent or 6.8 or 6.4, most of these companies have had a steady profit of 11, 12, 15, 17 and 30 per cent during this period of time. Yet here, in gratitude to its cohorts, the government has sent them this tax rate. Three-fifths of one per cent.

I want to stress that again. It’s a beautiful figure. It’s something that we should point out to the people of Ontario in saying just exactly who pays and who doesn’t pay in our economy.

These are the same people who provide the mortgages for the majority of the home buyers in Ontario. These are the same people who are charging 10, 11, 12, 15 per cent for mortgages, which results in many people having difficulties trying to meet theft mortgage payments. It results, in many cases, in broken homes as a result of financial squabbles within the family when they cannot meet their mortgage payments. And if you should Look at the back pages of the newspapers, Mr. Speaker, you will see the sheriff’s sales by auction of homes in which people invested their time, theft money, theft down payments and theft hopes. They are gone by the board because they had to pay 11 per cent, 12 per cent and 10 per cent and so on.

It’s amazing, the fact that --

Mr. Speaker: That has nothing to do with corporation tax.

Mr. Makarchuk: Absolutely, it has a lot to do with the corporation tax. We are talking about the treatment the corporations receive and they don’t receive.

Mr. Speaker: Not on this bill you won’t. It’s Bill 28, An Act to amend the Corporations Tax Act.

Mr. Roy: Surely our critic was right on throughout his remarks. You should try to do the same.

Interjections.

Mr. Makarchuk: The point is, the government has permitted the corporations, the trust companies, the banks -- and for your benefit, Mr. Speaker, we are dealing with banks and trust companies, you should read the bill and understand these things.

Hon. B. Stephenson: Shame, shame.

Mr. Roy: Shame. He has read the bill.

Mr. Makarchuk: He has? We are dealing with these companies --

Mr. Speaker: That’s not what you were dealing with two minutes ago.

Mr. Makarchuk: They are the ones who provide the mortgages that I am talking about. I am saying, Mr. Speaker, that we work in the same money market as the American institutions do, we borrow on the same money market. The same corporations work in many cases across the line and they are able to provide mortgages at 8¾ and perhaps 8¾ per cent in the other money market. Why can’t we do it here in Canada?

Those are the kinds of things that the government can control, when it brings in corporation legislation, if it used the legislative powers that are available to it. The government should be using its tax system to ensure that it gives a break to the consumer right here in Ontario, and it doesn’t do it. When the government doesn’t give them a break and they have to pay through the nose, it means that they can’t buy fridges, they can’t buy stoves, they can’t buy furniture. It means also that there are people who produce these things who are out of work or unemployed.

Then what happens to this money? We read in the papers that it’s going to the United States; it’s going to South America or South Africa; it’s going to Chile; it is going to various other places. It creates jobs over there and it creates unemployment here.

If the government had a coherent policy of taxation in this province, if it used the tax system as a carrot-on-a-stick vehicle, as a method of trying to persuade, or coerce in some cases, it would probably lessen a lot of these problems, it would ensure that the Canadian dollar would remain a little more stable than it is right now instead of sinking in relation to other currencies.

But the government doesn’t do that, it Ignores it. It doesn’t look at taxation as an economic tool that is available to the government in this country and in this province, and consequently everybody suffers as a result of that.

I’d like also to point out that through his ministry and through his legislation the minister could ensure that there is some competition in a mortgage field these clays. Again, he is dealing with trust companies and banks, but there is no competition. He’s not even prepared to open up the Ontario Savings Bank by bringing in legislation that will give it power to enter into the mortgage market. On the only vehicle the government had, the Ontario Mortgage Corporation, it hung up the McTamney sign and is pawning off the mortgages right now, it’s selling them off.

Hon. Mr. Maeck: I have nothing to do with that; and neither does this bill.

Mr. Makarchuk: No, he hasn’t? That’s his ministry; it’s part of the Treasurer’s and part of Revenue’s; and that’s exactly what the government is doing.

Therefore, reluctantly, in principle we’ll support the idea, because we have to raise taxes. We have to get the money and the corporate sector is one source of raising the money, but in terms of bringing in effective, useful legislation, this is not that kind of legislation.

Mr. Warner: Before I begin, I certainly wish to pass along a few personal comments to the new Minister of Revenue. I appreciate the appointment that he received. It certainly is an improvement over past performances. If nothing else, he’s an approachable minister and someone with whom opposition members can correspond. That is a decided advantage over the previous minister.

I have a couple of concerns as they relate to the principle of the bill. As I understand the bill, it is in keeping with some of the federal legislation. It’s paralleling some of the federal tax legislation, and that bothers me very much.

I wish to relate it hack to section 6 in particular. which I find the most troublesome section of the bill. Quite frankly, I take it that section 6 may very well be in keeping with what seems to be the general principle of tax legislation for the federal government, and that is part of a buy-Canada policy and to the lowest bidder.

I think it’s quite evident to the members of this assembly, and likely to the minister, that federal tax policies have always been in favour of foreign domination of our economy. They’ve always benefited particularly, those American investors who wished to come in to buy Canada and control it. That is why I bring up section 6 of the bill, on which I have some reservations. As I read the explanatory notes for section 6, it indicates that a corporation will now be able to claim the reserve if at the end of the year of the disposition and all times in the subsequent years it had a permanent establishment in Canada, even if it was not resident in Canada.

Previously, as the minister knows, this was not allowed. I see that as an erosion on a requirement that if one is going to do business in Canada one should be resident in Canada. I see it as an erosion because I think the government should be doing the opposite kind of thing, that is that whatever tax measures it cares to impose they should be in support of Canadian business and not in support of American business.

I’m quite willing to admit, as I always am and as the minister knows, that if I’m in error I’m ready to be corrected; but my reading of section 6 and the explanatory notes tells me that it isn’t a protection for a Canadian investment at all but a further concession to American companies. That bothers me.

Maybe that’s why it’s been stated that this legislation is simply paralleling federal tax legislation that has been brought in. As the minister knows, and would probably like to say when he gets a chance to stand in his place, federal tax legislation has been very much to the benefit of American corporations. They have enjoyed, over the years, a tremendous advantage in not only investing in Canada but being able to get public funds to support them while profits drain out of this country to the United States. Then, of course, when tough economic times descend upon us, they withdraw the resources. I would think the minister would be very upset about that and would want to make sure in his legislation, when he amends the Corporations Tax Act, that he would provide some preferential treatment for Canadian business, either private or public, and that he would not want to provide any further loopholes to the American corporations.

I would be very interested in his comments. Perhaps he can allay my fears and, I assume, the fears of other members of this assembly about the explanatory notes provided for section 6. If I am correct, then perhaps the minister would very seriously consider amending the section so as to provide preferential treatment for Canadians and to provide that there isn’t an exemption for any foreign source of capital which is not resident in Ontario.

Those are the only comments I have to make at this time. I appreciate the opportunity.

Mr. Laughren: This bill intrigues me because of the way it moves so quickly to cater to the federal legislation. There are questions about the bill that really bother me. There are some parts of the bill I understand very clearly, at least in my mind. I understand, for example, that it reduces the depreciation allowance -- I believe the minister calls it capital cost allowance -- by the amount of the tax credit that is claimed by the corporation. I understand that it prevents one corporation from charging off the exploration and development costs of another company, even though it might take over that particular company, and I agree with that.

I understand in terms of the resources field

-- and this is a part of the bill that bothers me -- it says that where the federal legislation says that if a company buys a resource property, it may charge off the cost of that property over a number of years, but the provincial government says: “No, we don’t think that’s quite generous enough. We believe that a company should be allowed to charge that off all in one year.” That tends to get a little lost in the legal jargon of a bill like this.

So I immediately tried to put it in the perspective of what would happen with the companies that I am aware of in the resource field. I immediately thought of a couple of companies in the Sudbury area, namely Inco and Falconbridge.

As the minister knows Falconbridge has been having some considerable financial problems recently. They had a very substantial deficit in the past year. Inco has had problems as well, but it still made $100 million last year. If they decided at some point that they wanted to purchase the operations of Falconbridge, which are in turn owned by Superior Oil of Texas, they would be able under the existing legislation in Ontario to charge off the total cost of that purchase against their corporations or their profits in any one year; for example if Inco decided to buy Falconbridge in 1978, they could write off their entire profits in 1978 as a result of that purchase.

[8:30]

It would not matter that they were buying an operation that had potential earnings over the years that would be substantial. We shouldn’t be deluded into thinking that because Falconbridge lost money in any one year they will always lose money and, therefore, anybody who would buy them out should be rewarded by being able to write off the cost in that one year.

I don’t understand why the minister is doing that. If it was a case of encouraging exploration and development, encouraging the further processing of the minerals in this province, that’s one argument. But one resource company buying out another resource company; How does that create jobs in the province of Ontario? How does that create new wealth? How does that create jobs for the unemployed in Ontario? So I think there are parts of this bill that bother us a great deal.

Another part that bothers me is section 10 where they talk about companies that hold shares in another company. I think what the minister is trying to get at here is that if you had a communal operation, such as the Hutterites or Mennonites who formed a company that held shares in, for example a trust company in turn, that traditionally no tax was paid on the profits of the shares that communal operation held. The minister is saying, “Well, that’s really not fair, because they must compete with other organizations.”

I wonder if he could be very open with us, very frank with us as to what extent organizations other than communal operations would be affected by this. I am worried that it’s an attempt to discriminate against communal operations in the province of Ontario.

On the sections dealing with loan and trust companies, I must commend the minister for bringing them forward because that’s something we have been saying for some time, that trust and loan companies should be on the same footing as the banks; they should not really have any advantage over them because basically they are performing the same operation.

The section that deals with premium taxes for insurance companies bothers me somewhat -- that’s an area where the premium tax which insurance companies are required to pay is reduced from three per cent to two per cent. I served on the select committee on company law which was looking into the whole question of automobile insurance. I know that automobile insurance is the one area of insurance that is exempted under this change. I’d like to know from the minister, first of all why auto insurance is exempted when general casualty and life insurance are included, by my understanding.

Why is it so important that the insurance companies resident in Ontario be on the same competitive basis as the insurance companies in the United States? Is there some particular reason? Is it because the money that would normally be invested here would flow to the United States because of that one per cent difference on premium tax? I find that hard to believe, and I’ll tell you why; When we were looking at the statutes concerning automobile insurance investment income, we discovered that under the Insurance Act -- I don’t know the exact name of the statute -- insurance companies resident in Ontario can take the premium revenue they have received -- and under what they call investment income or investment portfolio, an insurance company in Ontario -- Royal Insurance which is resident in Great Britain for example -- can take the premium money they receive from people in the province of Ontario and invest it in South African bonds, or invest it in Rhodesian bonds.

I don’t know what the minister thinks; but I find that offensive; that my money, my premium money in this province, can go to South Africa or Rhodesia. I find that offensive. I think it’s time that the minister stood up and said more than, “Well, all we’re doing is collecting the money.” I do believe that the minister has a right to say, and has an obligation to say, “Look, we’re collecting the money, we have a right to say where people like this, the life insurance companies, where people like these insurance companies invest money.” It is not as though it was money that belongs to the insurance companies. The insurance companies received the money from premiums that Ontario residents paid, and we have every right to say to these people, “You will not invest it in regimes which are contrary to the things that we believe in most fundamentally.”

I believe the minister would agree with that. I don’t think the Minister of Revenue supports a regime like those in Rhodesia or South Africa. I don’t believe that for a minute, because I know the minister personally.

But at the same time we can’t look the other way when it happens. We can’t say to those insurance companies, “All right, you’ve made your point. We’ll reduce your premium tax from three to two per cent”; without saying to them, “But at the same time, if you want us to do that for you, you’re going to have to change your investment policies and say to us, ‘We will give you a guarantee that we will not invest any funds in South Africa, Rhodesia or any other fascist regime.’” I don’t think that’s asking too much.

The minister might say, “They’re really not investing money there any way.” But the statute says they can; and that in itself is offensive, because it is condoning it on the part of this government and on the part of all of us. So that needs to be dealt with.

I don’t want to dwell unduly on it, but there are aspects of the bill that could be changed and I hope the minister will look at some of the suggestions that have been made by those of us on this side of the House,

Mr. Acting Speaker: The member for Oriole,

Mr. McClellan: Oh, oh. Trouble in River City.

Mr. Williams: Mr. Speaker, I certainly share the concerns that were expressed by the member for Scarborough-Ellesmere when he expressed his concern as to whether or not some preferential treatment is being given to corporations that in practice, if not from a technical point of view, essentially have been non-resident for a large portion of the corporate taxation year.

I’ve listened with interest as well to the member for Nickel Belt, who has expressed equal concerns about inequities that may exist in regard to the application of corporation tax as it relates to investment outside Canada sf the premium incomes of large insurance companies such as Royal Insurance, with no apparent legislative control or containment of the flow of those investment funds.

The reason I expressed the concern is that I have put forward those concerns, which parallel the concerns that have been expressed by these members, in the form of a private member’s bill, an amendment to the Labour Relations Act, dealing with the fact that one of the largest business operations in the country -- that is the operations of the unions -- also appears to be exempt from how they will invest the moneys they receive from union dues collected from the rank-and-file of . the various unions. There is a tremendous outflow of moneys from the unions in Canada --

Mr. Warner: Into co-op housing mostly.

Mr. Williams: -- into other countries and jurisdictions. I’m so alarmed and concerned about this outflow of money --

Mr. Warner: Alarmed and concerned?

You don’t know what they do.

Mr. Acting Speaker: Order.

Mr. Williams: -- that is not benefiting in any way the rank-and-file union members in Canada --

Mr. Warner: On a point of privilege, Mr.

Speaker.

Mr. Acting Speaker: Order. Does the member have a point of privilege?

Mr. Warner: That’s a very serious allegation the member for Oriole has made, that the rank-and-file members do not know what happens to their union dues.

Mr. Eaton: That’s the truth. It hurts, doesn’t it?

Mr. Warner: In fact, an accounting is given on an annual basis and most of the funds are put into co-operative housing to provide needed housing that the government can’t provide. I think the member for Oriole should withdraw his remarks.

Mr. Nixon: It is all shipped over --

Mr. Acting Speaker: The member for Oriole may continue.

Mr. Eaton: That’s a sore point; keep going.

Mr. Williams: In fact, Mr. Speaker, I find it alarming --

Mr. Warner: We find you alarming.

Mr. Williams: -- in the Ministry of Labour, which is responsible for the administration of the legislation --

Mr. Warner: Speaking of alarms, you’re a ding-dong.

Mr. Williams: -- none of the personnel there are able to advise me exactly what percentage of the investment funds of the unions are flowing out of the province, let alone out of Canada.

Mr. Swart: What about the developers? What about Cadillac Fairview?

Mr. Williams: I think that this is an alarming situation where there is absolutely no financial accountability from one of the largest business sectors in our society, which is the large trade union movement.

Interjections.

Mr. Warner: That’s nonsense.

Mr. M. Davidson: On a point of privilege.

Mr. Acting Speaker: Order.

Mr. Williams: I think in the same way that some exercise in control has to be brought to bear through legislation.

Mr. Acting Speaker: I would like to remind the member for Oriole that we are discussing the Corporations Tax Act and I think the member has strayed considerably from the principle of the bill.

Mr. Samis: You are just another hatchet man.

Mr. Acting Speaker: Does the member for Cambridge have a point of privilege?

Mr. M. Davidson: Mr. Speaker, I do have a point of privilege.

Mr. Acting Speaker: Let’s hear your point of privilege.

Mr. M. Davidson: I :have been a trade unionist from the age of 15. I have worked both in a textile mill and as a representative of the Textile Workers Union of America. I submit to you, Mr. Speaker, that the allegations that are being made by the member for Oriole today are false --

Mr. Warner: Totally irresponsible.

Mr. M. Davidson: -- and I suggest to you that he is misleading this House by putting forward those allegations.

Mr. Eaton: Withdraw. That is not a point of privilege.

Mr. Acting Speaker: Order.

Mr. Williams: Mr. Speaker, I appreciate the concern of the members opposite. I am sure that the other members of the House are equally concerned with regard to any apparent infractions that have existed under the Insurance Act with regard to the insurance companies based on the allegations made by the member for Nickel Belt.

Mr. Acting Speaker: Order. The member for Brant-Oxford-Norfolk.

Mr. Nixon: I would like to bring to Mr. Speaker’s attention the fact that the hon. member for Cambridge has just indicated that the hon. member for Oriole is misleading the House. Is that going to escape your notice, Mr. Speaker?

Mr. Warner: Let the member for Oriole withdraw the statements or resign, one or the other.

Mr. Williams: I ask, Mr. Speaker, that the remark be withdrawn. It seems unparliamentary.

Mr. Acting Speaker: I would say to the member for Cambridge that the term “misleading the House” is unparliamentary and I ask him to withdraw it.

Mr. M. Davidson: Mr. Speaker, I refuse to withdraw and I will leave the House on my own without your telling me to do so.

Mr. Acting Speaker: Order, I would ask the member for Oriole to continue.

Mr. Warner: His apology should be coming forth.

An hon. member: Throw him out.

Mr. Acting Speaker: The member for Scarborough-Ellesmere does not have the floor. I would ask the member for Oriole to continue and to speak to the bill which is on corporation tax. I think he strayed considerably from the principle of the bill.

Mr. Nixon: On a point of order, I would bring to the Speaker’s attention that under our rules, which have been agreed to by all parties, it is not parliamentary for a member to indicate. --

Mr. Laughren: Sit down.

Mr. Nixon: -- that another member is misleading the House.

Mr. Laughren: He already did.

Mr. Nixon: Such has been done. There has been no withdrawal. The fact that the hon. member left the House is irrelevant.

Mr. Samis: No, it isn’t.

Mr. Nixon: Maybe he was thirsty, I don’t know. I would suggest to you, Mr. Speaker, that you or your colleagues who share your responsibility will have to consider this matter before the hon. member returns.

Mr. Acting Speaker: The matter will be considered.

Mr. Laughren: On a point of order, Mr Speaker, the same point of order raised by the member for Brant-Oxford-Norfolk:

The member for Cambridge recognized the fact that he had accused the member for Oriole in terms that were unacceptable in a parliamentary way and, consequently, left the House on a voluntary basis. What he was really doing was expressing courtesy to the Speaker by not requiring him to call upon the Sergeant at Arms, who is not here at this time, to escort him from the chamber.

Mr. Kennedy: Come off it. What are you trying to hand us?

Mr. Acting Speaker: Thank you. I would ask the member for Oriole to continue. I would point out to the member for Brant-Oxford-Norfolk that the matter will he considered. Would you please continue and stick to the principle of the bill?

Mr. Williams: Thank you, Mr. Speaker. With respect, I believe I was, while drawing parallel situations to the principle involved in this bill and at the same time expressing the concerns that the member for Scarborough-Ellesmere had expressed. I was simply drawing parallel situations that --

Mr. Samis: Back to the bill.

Mr. McClellan: You are a complete disgrace.

Mr. Warner: Totally out of order.

Mr. Williams: -- are of equal concern, as did the member for Nickel Belt. I feel entitled to do so, as did that member.

Mr. Warner: It was absolute nonsense.

Mr. Williams: I thought while he was straying from the principle of the bill there was still an essentially common principle involved, which I think aroused his concern as it did mine. In the same way, my remarks are fairly taken as true expressions of concern as they, relate in principle to this bill.

I do express these concerns, that equity and fair play be applied to the legislation as it may apply to corporations being classified as resident, even though a large part of the corporate year may have been spent outside of the jurisdiction. As to whether preferential treatment is being applied, I am sure the minister will be able to respond satisfactorily to that allegation. But I do close my remarks by pointing out that --

(Applause).

[8:45]

Mr. Williams: I could speak a little longer, Mr. Speaker, if you wish.

Mr. Warner: No.

Mr. Makarchuk: We are aware of that. You can go on forever.

Mr. Samis: And say nothing.

Mr. Williams: But I do wish to emphasize my concerns for the fact that --

Mr. Makarchuk: Carry on. Speak all night. Mr. Williams: -- that third of our business community which is represented by the --

Mr. McClellan: Don’t stop.

Mr. Makarchuk: Keep going. The people are listening to you.

Mr. Acting Speaker: Order.

Mr. Laughren: Does the member have a conflict of interest?

Mr. Williams: Thank you, Mr. Speaker. That third, which is represented by the unions, has to have a greater degree of financial accountability to the public at large, and indeed to the rank-and-file.

Mr. Mackenzie: Talk about the bill.

Mr. Samis: Talk about the bill.

Mr. Warner: That’s nonsense. What silliness I

Mr. Mackenzie: The corporations should have no accountability either.

Mr. Williams: There has been no accountability whatsoever for the outward flow of investment income that is draining the reserves of the working people of this province without accountability.

Mr. Warner: That’s nonsense.

Mr. Williams: Those moneys more properly should be invested in this province to ensure more jobs and more capital development.

Mr. Warner: Are you not going to bring him to order, Mr. Speaker?

Mr. Acting Speaker: Order.

Mr. Williams: If that line of action is pursued, it will be consistent with what is trying to be accomplished in this corporate tax bill.

Mr. Makarchuk: Don’t stop now, John. Carry on.

Mr. Warner: Bring back the hook.

Mr. Acting Speaker: Order.

Mr. Mackenzie: It was not my intention to speak to the bill, Mr. Speaker --

Hon. B. Stephenson: Then don’t speak. Mr. Kennedy: Don’t feel compelled to speak.

Mr. Mackenzie: -- and I don’t intend to spend more than a minute or two as it is now. But I have been informed of some of the things that were said, and I sort of wished the government members would let some of their members know what is going on, because the member who just finished speaking didn’t know what he was talking about when it came to the trade union movement.

Mr. Martel: What else is new?

Mr. Kennedy: That’s your opinion.

Mr. Gregory: That is the best speech you have ever made, Bob.

Mr. Williams: On a point of privilege, Mr. Speaker: With respect, I would suggest that the member from Hamilton just doesn’t want to accept the truth of the matter.

Mr. Warner: On a point of order, Mr. Speaker: He can’t speak twice.

Mr. Acting Speaker: The member for Oriole rose on a point of privilege; he has stated it and he has now resumed his seat.

Mr. Warner: Totally out of order.

Mr. Acting Speaker: Are there any other speakers to this bill? The Minister of Revenue.

Mr. Samis: You can disown him first, Lorne.

Hon. Mr. Maeck: Mr. Speaker, now that everybody is calm, cool and collected --

Mr. Martel: Lorne, dissociate yourself from that fellow.

Mr. Acting Speaker: Order:

Hon. Mr. Maeck: -- maybe I could attempt to answer some of the questions that were raised by the various speakers.

Mr. Laughren: This we’ve got to hear.

Hon. Mr. Maeck: The member for Erie posed a couple of questions. He was talking about further significant simplification, particularly for small businesses and corporations. Obviously we are moving in that direction simply by having brought in Bill 88 last year; that is complementary to the federal bill and we are trying very hard to simplify it. Some of the amendments here tonight are for that very purpose.

I agree with the suggestion the hon. member is making and we are moving in that direction although, as he is very well aware, the Corporations Tax Act is a rather complicated one and I don’t know if we will ever get to the stage where every small businessman, or Minister of Revenue for that matter, may understand it all.

Mr. Martel: It’s great business for lawyers, though, Lorne.

Mr. Nixon: At $65 an hour; that’s the cut rate.

Hon. Mr. Maeck: The member for Erie also asked a question about how much revenue the province can expect to generate in the tax changes that are in this particular bill. My staff tells me we should generate about $18 million yearly, plus the $70 million from the speedup of payments, which is a one-time effect in 1978-79 only; but basically $18 million is what we will generate yearly from these amendments.

The member for Hamilton Mountain dealt with several sections of the Act. He was particularly concerned about section 6 of the Act and suggested that section 6 weakens incentives for corporations to stay in Canada. Actually, that is not what this section is there for at all. Quite the contrary: It strengthens and protects Ontario’s revenues against foreign corporations evading tax. Quite simply, it ensures that any corporation vacating Canada must pay and settle its tax accounts. So it is not meant in any way, shape or form to provide incentives for corporations to leave Canada. This follows, again, on Ottawa’s legislation; it closes the door to some potential loopholes.

He also talked about section 8. Section 8 of the bill is really an administrative item. It is to preserve the present treatment of proceeds received by a partner from the sale of Canadian resource property by a partnership. Ontario requires proceeds from the sale of a Canadian resource property to be brought directly into income. Federal legislation -- and the member for Nickel Belt spoke about this as well -- requires the proceeds to be deducted from the accumulative Canadian development expense account. This is because Ontario allows full deduction of the cost when a property is bought while the federal government capitalizes it and allows a 30 per cent deduction.

An amendment was recently made to the federal Income Tax Act to require a partner’s share of such proceeds to be deducted from the Canadian development expense account.

Ontario is tied in with this change because it has adopted the federal partnership provisions, but this particular amendment will preserve Ontario’s different treatment of such proceeds by not tying in with the federal change and by retaining the previous federal partnership provision.

Actually, this section assists the companies at the front end rather than at the back end. The taxes, federally and provincially, end up the same, except that what we are doing here is providing assistance by the direction we are going when :the companies first start rather than at the end, but there is no difference in the legislation, other than the way it is administered.

Mr. Nixon: That’s clear, that’s very clear.

Mr. McClellan: Totally incoherent.

Hon. Mr. Maeck: Do you understand that, Bob?

Mr. Laughren: It doesn’t sound convincing.

Mr. Warner: It sounds pretty subversive to me.

Mr. Nixon: I don’t think it matters whether I do or not.

Hon. Mr. Maeck: He also talked about section 11 of the bill.

Mr. Mackenzie: He seemed to have some grasp, which is more than the member for Oriole.

Mr. Martel: He’s never had a grasp.

Hon. Mr. Maeck: Section 11 is to require corporations registered under the Ontario Loan and Trust Corporations Act to calculate their capital tax in the same manner as banks. Very simply, what we are saying here is that trust companies are basically in the banking business and it is the government’s policy to tax them on the same level as banks. That is really all there is to this amendment. while I am on this particular amendment, the member f or Brantford talked about the rate of tax and he talked about three-fifths of one per cent. But I would advise the member for Brantford that it is raised in this particular piece of legislation from three-tenths of one per cent to three-fifths of one per cent. So actually we are collecting twice as much as we did before. That should be a little improvement.

Mr. Makarchuk: What’s their profit?

Mr. Warner: Three-fifths of one per cent. Are you proud of that?

Hon. Mr. Maeck: It amounts to quite a few dollars.

Mr. Makarchuk: What are you paying in income tax?

Mr. Acting Speaker: Order.

Hon. Mr. Maeck: The change is expected to yield an additional revenue of about $3 million.

Mr. Laughren: Big deal.

Mr. Makarchuk: Out of a GDP of about $80 billion.

Hon. Mr. Maeck: Members opposite would have all the corporations taxed to the point where they couldn’t operate at all; and then members would be crying because there was more unemployment, but they can’t have it both ways.

Mr. Warner: We’d like some of your money.

Hon. Mr. Maeck: Section 15 was another section that the member for Hamilton Mountain asked about. It is to reduce the rate of tax on premiums under accident insurance, life insurance and sickness insurance from three to two per cent. The reason that is being done, some couple or three years ago the insurance tax was raised from two to three per cent and it put the Ontario insurance companies in an uncompetitive position with the American companies. That’s the reason we’re going back.

Mr. Laughren: Tell us why.

Hon. Mr. Maeck: Experience has told us that they have lost business because of that tax change two years ago. That’s why we’re going back to the original.

Mr. Laughren: How does that hurt us? Hon. Mr. Maeck: It certainly hurts us; a lot of people work for --

Mr. Laughren: In Canada?

Hon. Mr. Maeck: -- insurance companies and so on. Certainly.

Mr. Nixon: That’s a dumb question.

Hon. Mr. Maeck: Yes, it sure is.

Mr. Laughren: Lorne, do you know what you’re talking about? They set up their offices in the United States --

Mr. Acting Speaker: Order.

Mr. Laughren: -- to deal with insurance business there. What are you talking about?

Hon. Mr. Maeck: The member for Scarborough-Ellesmere asked about section 6, which I’ve already covered. The member for Nickel Belt was dealing with the resources amendment, which again I’ve covered; although he doesn’t, perhaps, agree with what I’ve said, at least I’ve answered the question that he posed.

Mr. Laughren: It’s not good enough.

Hon. Mr. Maeck: But he did ask about communal organizations and if there are any other groups that would be affected by this. I should say that it is directed at communal type organizations simply because --

Mr. Laughren: That’s what I want. Hon. Mr. Maeck: -- those people at the present time do not each file a personal income tax return and there is no way within our law at the present time for them to file anything as a group, this provides a way for them to file an income tax as an organization.

Mr. Laughren: That’s what they told us in medical school.

Hon. Mr. Maeck: That’s what it is, I am sure the member agrees everyone should pay taxes if they are making enough money.

I think I have covered all of the questions. The member for Oriole was dealing with section 6 --

Mr. Warner: He was out of order.

Hon. Mr. Maeck: -- which I hope I have straightened out for him. I think he was misinformed as to the meaning of that particular amendment.

Mr. Speaker: The motion is for second reading of Bill 28.

Motion agreed to.

Ordered for committee of the whole House.

MUNICIPAL AMENDMENT ACT

Hon. Mr. McMurtry moved second reading of Bill 49, An Act to amend the Municipal Act.

Hon. Mr. McMurtry: Mr. Speaker, on March 30 last, I introduced an Act to amend the Municipal Act, which was first introduced in this House in December 1977 and at that time --

Mr. Mackenzie: I hope you are more informed than the member for Oriole.

Hon. Mr. McMurtry: -- it was pointed out that there are basically two main purposes related to the bill.

Firstly, it is the intention of the legislation to extend the existing powers of municipal councils to regulate and control so-called body-rub parlours in the light of experience acquired since the 1975 amendments to the Municipal Act.

Secondly, the purpose of the legislation is to empower municipalities to pass bylaws to license, regulate and control those outgrowths of body-rub establishments that may be termed as such which, while having the same sex-oriented base, do not come within the definition of body-rub establishments presently within the Municipal Act.

It is our view that municipal governments do, of course, have knowledge of the local activities and the needs of their particular municipalities and are therefore best able to interpret the wishes of their citizens.

In Toronto, for example, it has become increasingly obvious when one walked down Yonge Street in the last several years that action was necessary to remove or seriously curb these sexual or sex exploitative activities which were causing, and indeed did cause, very serious degeneration of what is often referred to as the main street in our community. In recent months much has been accomplished in this regard but the task obviously has been an onerous one and a great deal more can be accomplished.

[9:00]

It is hoped that this legislation will aid the government of this community and other communities to control such situations. This matter has been one of great concern to me and to the government of this I province for some time. We have, as a result, been engaged with the city of Toronto and with the municipality of Metropolitan Toronto in discussions ranging over many months with a view to working out a mutually satisfactory means of control. I have discussed this issue on a number of occasions with both the mayor of the city of Toronto and the chairman of the municipality of Metropolitan Toronto. My senior officials have of course also met repeatedly with the officials of these municipalities.

While this legislation was being prepared, we have also worked closely together with the municipal governments in this locality to work out strategies which have produced some degree of improvement on Yonge Street and its environs. However, I wish to emphasize that this legislation is just not for the city of Toronto or for the municipality of Metropolitan Toronto, but indeed is for any municipality which wishes to adopt it or use its provisions in the interest of its citizens.

What we are attempting to do with this legislation is to give Yonge Street in Toronto -- and, indeed, the streets of any city where the need is obvious -- back to the people.

Mr. Mackenzie: It took you long enough.

Hon. Mr. McMurtry. Through this legislation, we are attempting to state that the individuals in their respective communities do have the right through their elected representatives to shape and control the activities that are carried out in their communities.

Mr. McClellan: Why did it take you so long?

Hon. Mr. McMurtry: We believe that the nature of commercial activity --

Mr. T. P. Reid: Do you believe in local autonomy?

Hon. Mr. McMurtry: -- that does have the effect of shaping the character of any community should not simply be determined by the almighty dollar.

Mr. McClellan: Where have you been for the last three years?

Mr. Mackenzie: It moved a lot faster than a hockey scrap.

Hon. Mr. McMurtry: And in this community and elsewhere in Ontario the fast-buck operators have known a great deal of money could be made by pandering to the sex trade and --

Mr. Mackenzie: Almost as much money as you can make in hockey too.

Hon. Mr. McMurtry: -- they have obviously proceeded in a very aggressive fashion. Obviously, in communities like Toronto and elsewhere, many individuals, particularly older citizens who would like to enjoy their principal streets, have been driven off these streets by what really has amounted to a bombardment by these pedlars of pornography and the clientele that is attracted by this activity.

Many merchants have also suffered the result of empty stores in areas where the so-called sex trade has flourished. But as I said earlier, this legislation should enable our local governments to bring this situation under better control.

The principles of this legislation which has been introduced have been supported by municipal officials both in Metropolitan Toronto and other municipalities as a progressive and as a very necessary step.

Mr. McClellan: Long overdue.

Hon. Mr. McMurtry: For example, Metropolitan Toronto chairman Paul Godfrey stated, when I introduced this bill last month, that it was, and I quote; “most welcome.”

Mr. McClellan: And long overdue.

Hon. Mr. McMurtry: He also went on to say that Metro needs the powers of this legislation, that it would give to metropolitan government the power -- and I quote again Mr. Godfrey -- “to continue the transition of Yonge Street back to the family street that it once was.”

Mr. Martel: What about the back streets, though?

Hon. Mr. McMurtry: In summary, Mr. Speaker, this government is committed to giving our local governments more control over the development of their municipalities

Mr. T. P. Reid: Except finances.

Hon. Mr. McMurtry: This government believes that local citizens should have the power, as I mentioned a moment ago, to control and shape the character of their neighbourhoods though their locally elected representatives.

Mr. Haggerty: You are shirking your responsibility.

Mr. Mackenzie: Talk to the member for St Andrew-St. Patrick, (Mr. Grossman).

Hon. Mr. McMurtry: Mr. Speaker, this legislation is needed and has been requested by the municipalities throughout our province. I therefore urge members on all sides of this Legislature to support it.

Mr. Martel: Where do they go after they leave Yonge Street?

Mr. Nixon: The matter dealt with in this amendment to the Municipal Act has progressed from kind of a snide joke five or six years ago, to a subject for a lot of political speeches and statements maybe two years or a year ago, to an association with one of the most tragic murders and crimes that our country has ever encountered or been aware of, and so it is a matter of major concern for this House.

During the minister’s comments, there were a couple of interjections like, “This bill is long overdue,” and I would think that we would all agree that at least in one sense that is so. I can recall a very strong statement from the Attorney General and from municipal leaders, some of whom have been mentioned here by name, and politicians on all sides of the House talking about the need for strong action. Somehow very little was done and in fact it may be that not much was necessary.

I intend to support the [bill. I have got a couple of comments about it specifically, but I just want to recall to the Attorney General’s mind a couple of comments that I made previously about this. I think we dealt with it rather lightly at the time. I forget the circumstances, perhaps it was in his estimates, when I described to him a walk up Yonge Street. Even for a person like myself, coming from a sophisticated municipality like South Dumfries, it at one stage was really an embarrassment. You were afraid somebody would see you there and say: “What the devil is he doing down here?” because probably there was only one answer. But --

Mr. T. P. Reid: What were you doing down there?

Mr. Nixon: Well, I will tell the member what I was doing. I will tell him what I was doing, because under these circumstances, after the city of Toronto had the real support of the community to apply its own bylaws and there was more or less the moral force of the community behind the city, that street was cleaned up in a matter of weeks if not days. You could walk right from Simpsons up through that area which was once so ridden with this junk and there were simply no premises you could cast your eye on that were in any way offensive.

This was without the benefit of this legislation, which is extremely powerful and for which the advisers to the Attorney General seem to have considered almost every eventuality. This, together with Bill 50, which has other very interesting ramifications, is certainly a piece of legislation which when properly applied will put a very strong implement in the hands of the municipalities indeed if they choose to use it.

The part that interested me was that the cleanup of Yonge Street took place without this. It could be that it is not perhaps as clean as main streets in Georgia are now. Probably there is no reason why it should be. But there has been a dramatic change there without this legislation.

It very well could be that we should have acted long ago in this connection. After all, the problem was there, this type of pollution of our cities, parts of the cities at least, and certain other communities has been evident to us all. It is true that we did not take the problem as seriously as we should have on all sides, but I think many of the statements made were not as effective or followed up as effectively as they might have been. I would be the last to say that this tragedy which was associated with this would not have happened if we had moved forward, but at least it’s something for us to think about. It’s a matter of concern for all of us, including the Attorney General.

I did want to refer specifically to one matter I think the minister might clear up for me. Without referring too specifically to the sections, I simply want to draw to the minister’s attention something that may be provided for in the bill, or perhaps we could consider a change.

In the bill, “adult entertainment parlour” means “any premises or part thereof in which is provided goods or services appealing to or designed to appeal to erotic or sexual appetites or inclinations.” Under the definitions, “goods” has the following definition: “Goods include books, magazines, picture slides, films, phonograph records, pre-recorded magnetic tape, and any other reading, viewing or listening matter.”

A problem that has been presented to the courts most recently has been charges brought against certain shops selling none of those things. I am not sure how you would describe what they do sell -- I guess they are best described as “objects.” The charges have been brought forward by the police, I believe, after complaints from citizens, and they have resulted in court cases in which I can remember reading the jury was doubled up with laughter most of the time. But in fact the shops were found guilty of an infringement of the Criminal Code, although I don’t know just what it was.

It could be that since this bill is designed to control that sort of thing we could involve that kind of control here. It may very well be included, but I cannot see where. I am really amazed at the thoroughness of the drafters, otherwise, in seeing that there really are very few loopholes in this connection. If put in the hands of a police force, backed by the community and by the council, then it certainly can be used as a thorough housecleaning mechanism.

Mr. T. P. Reid: No pun intended.

Mr. Nixon: God, I hope not.

I just wanted to bring these matters to the attention of the minister. I believe this bill, together with its companion piece of legislation, is effective. It may possibly be made more effective; but I say again that its usefulness lies almost completely with the attitude of the community as reflected by their council and their police force. We can have this legislation on the books and still have some communities that are wide open in this regard.

This is an area where perhaps it should concern us, because we really are here to speak for the whole of the province. While we are proud of our commitment to local autonomy, I would hope that the Attorney General also has a commitment to see that the law as we understand it here is applied effectively right across the province.

Mr. Swart: I think it’s clear from the bill itself and from the comments of the Attorney General and the member for Brant-Oxford-Norfolk that this Bill 49 we are considering strengthens the existing section 368a of the Municipal Act, which provides for the licensing of body-rub .parlours. It also extends the same municipal control as there will now be in effect for body-rub parlours to the other adult entertainment parlours which provide “goods or services of an erotic or sexual nature.”

I say that the bill is needed, and by and large the bill is reasonable, so we will support it on second reading; but we will ask that it go to committee of the House, because there are certain areas of this bill which need further discussion and where there can be some cross comments.

Mr. Mackenzie: The Attorney General should have included pinball machines, too.

Mr. Swart: The subject matter is one, I think everyone in the House would agree, of some significance. I certainly have concern, and I think members on all sides of the House have concern, about the proliferation of the sex-oriented establishments and the resulting degrading of the women in our society, because more and more women have been in these kinds of establishments.

[9:15]

We know what happened on Yonge Street over a period of three or four, five or six years, the proliferation there, It has spread to many other cities in this province and in many areas parents have become concerned because of the sexual shows which are taking place almost in residential areas.

There is no doubt about it, these kinds of establishments always attract crime and unsavoury individuals to the area, Of course as has been mentioned, the brutal death of Emanuel Jaques has crystallized and pinpointed the opposition to these kinds of establishments.

There’s a lot of credit given to the new section 368a of the Act, which licensed the body-rub parlours, for the relative cleanup which has taken place on Yonge Street, but I think the observation made by the member for Brant-Oxford-Norfolk is valid, that it came about primarily because of the death of this boy. In fact this legislation was in place for something like two years before that time; nothing happened in the way of a cleanup and it was this crime that activated the police, because of the public sentiment, to make the cleanup that had been made on Yonge Street.

I think we should recognize what this bill does not do. It doesn’t prohibit nude services, which are legal under the Criminal Code. It probably won’t even prevent the escort services, some of which we know, from charges which have been laid across this country, have been fronts for prostitution; but it will provide for the necessary regulations and the inspections which will probably to a very large extent make the operations of these places legal under the Criminal Code. Because the profitability has been largely from their illegal activities, I think it will cause many of them to disappear, as they already have in Toronto.

I want to say though, that in addition to what this bill provides, the permissive legislation this bill provides to municipalities, many of them would like to have much more power, really, to determine not just the regulations under which they operate or the location or the number of them, but the type of entertainment which is provided in the municipalities.

I am aware, of course, that this comes under the Criminal Code, which does not come under the Attorney General of this province; however I do suggest that perhaps he should be making some representation to the federal government on this matter, so that in fact municipalities which don’t want these kinds of establishments -- whether it’s the topless or the bottomless or completely nude or whatever they are the municipalities that don’t want them should be able to prevent them from being within their boundaries.

Another thing that bothers me about this Act, and I’m hoping we can have some discussion on this, with the Attorney General, during the clause-by-clause discussion, is that this Act does not affect those premises which are licensed under the Theatres Act or under the Liquor Licence Act. I think that is correct. I suggest that because it doesn’t -- and I know there are problems in co-ordination -- but because it doesn’t, it provides certain contradictions and the permission of certain things which would not be permitted if the municipalities had more power and some of this power was transferred into this act and through this act to the municipality.

It’s possible under this Act, of course, for a municipality to impose a fee of maybe $1,000, $2,000, $3,000 or $5,000 for the licensing of a nude or semi-nude service establishment. Right next door under the Liquor Licence Act, there can be almost the same kind of nude dancing, or whatever the case may be, and the municipalities do not have the power to have any licence fee there.

They are in some respects unable to have the kind of control they want. I am sure the Attorney General is aware also that there are theatres which are totally sex-oriented. Yet under the Theatres Act they are permitted to operate. In some instances they will operate in an almost residential community where children are passing the theatres. If they were included in this Act under the definition of this Act and if the municipalities were given power, they would prevent those kinds of theatres in many instances from being in the location that they are; but because they are under the Theatres Act they can’t do it, so this bill is in some respects rather inadequate.

The municipality can limit the hours. I suppose that would be within reason, because under a licensing bylaw one cannot enact regulations that are so stringent or hours that are considered to be a prohibition. This has been fought out in the courts many times. It is still possible to provide very limited hours to prevent problems, particularly late at night. The municipalities obviously would do this, but under the Liquor Licence Act, where similar performances may be taking place, the municipalities have no power. I would ask the minister when he is speaking if he would perhaps make some comment in this regard and perhaps we could have some further discussion when we come to the discussion of it clause by clause.

Certainly the Act which provides a definition of adult entertainment parlours is very broad. I wouldn’t be surprised if it could even be applied to a lingerie shop, but because the municipalities are going to administer it and because of their good sense I don’t think those kinds of problems will arise.

The bill has a retroactivity provision. In normal circumstances we would find this very objectionable. Certainly it is generally considered that if legislation is going to be fair it shouldn’t be retroactive. We know under the Planning Act, for instance, when zoning changes are made, where there has been a use which had been conforming and then zoning takes place that particular operation may continue as a non-conforming use.

However, this bill provides that even though establishments have been operating legally -- and I am not suggesting that a great majority may have been -- the municipality will have the power to limit the numbers, and therefore, some which may have been operating legally will be put out of business. I have to say to the Attorney General that I think in this case this is necessary. I commend him for having that clause, which is often distasteful, included here. Otherwise, in a place like Toronto, they might not have been able or might not yet be able at some future date, to limit the number of establishments.

I do have one concern about the bill and I would ask the Attorney General to comment on section 1(3)(5a) and section 2(368b)(7) of the bill. Section 2(368b)(7) says: “A bylaw passed under this section may prohibit any person carrying on or engaged in the trade, calling, business or occupation for which a licence is required under this section from permitting any person under an age specified in the bylaw to enter or remain in the adult entertainment parlour or any part thereof.”

I am wondering why the minister would leave that so very broad instead of having that section conform with the age of majority, the age at which a person may go into a licensed establishment, an age where a person becomes by all other measurements an adult. Yet here a municipality could make the age 25 or 30 or 40, or in fact could lower it substantially below the age of 18. It would seem to me that it would be reasonable to insert the age of 18 in this Act; I would like to have his comments on that.

The penalties in this bill, of course, are tough, but they are necessary, particularly because of the difficulty of enforcement of this kind of Act. There is tremendous cost to a municipality in policing these establishments and even then it is very difficult to assure they are not being used as fronts or at least that some illegal activities are not taking place. The large fine of $10,000 for individuals or $25,000 for a corporation or the two years in which a building may not operate after a conviction, will be real deterrents, I think.

I do have some concern about the provision whereby the premises may not be used for any purpose for two years if a conviction is registered against those premises, or if they are operating illegally because they do not have a licence. It seems to me -- and we will discuss this further again -- that the section could provide that if a new owner took over with a different type of business entirely, then those premises should be able to be used without having to go through the procedures which are here.

The other side of the coin, it seems to me, is that the procedures may make it somewhat easy for certain operators to get back in again. I would like to see the prohibition for two years of that type of licensed operation on those premises, but not the right for that person to go to court, maybe after the conviction, within a few weeks or a month, and through a variety of means be able to get the licence back again. I think that licence should be cut off for those premises for two years, but they should be able to be used for a legitimate purpose.

This bill, of course, is supplemented by the provisions of Bill 50. I just conclude by saying that I think it is a move in the right direction in this province. I think that more and more people are concerned about what has taken place in the last five to 10 years with the proliferation of these types of establishments. Having said that, I think there is room for a great deal of improvement in this bill and for some representation to the federal government to see if we can get better legislation, a better opportunity for the municipality to prevent the kind of sexually-oriented operation they don’t want to have in the municipalities but must have and which cannot be prevented at the present time.

Mr. Williams: Mr. Speaker, I appreciate the opportunity to rise to speak to this bill. I must say I do so with a great degree of ambivalence as one who was a member of the Metropolitan Toronto council in 1968, and again in 1913 and 1974 when we found ourselves completely frustrated in our endeavours and attempts, to try to regulate and control the proliferation of the bawdy house operations and the other type of businesses, that were of course designed to cater to that clientele who get their kicks out of erotic and sexual type of presentations or delivery of goods or services. It was certainly a frustration that exceeded all bounds.

[9:30]

Mr. Warner: The government didn’t do anything.

Mr. Williams: One would get up and debate the issues in the Metro council chamber time and again, and know that indeed --

Mr. Warner: You are responsible.

Mr. Williams: -- we did not have the legislative power or clout to give any meaning to the concerns that were being expressed by myself and other members of the metropolitan council in those days. So in that respect I certainly do agree with the Attorney General in his obvious comment that this indeed will be a piece of progressive and necessary legislation to try to bring into being the legislative powers of which the municipalities have been devoid up until this point of time.

On the other hand I must say that I’m not as content as, say, the member for Brant-Oxford-Norfolk, who suggests that this is an extremely powerful piece of legislation that is going to be a cure-all for a situation that has needed attention for a long period of time. indeed, I have a great deal of concern along the lines as expressed on the comments by the member for Welland-Thorold. I think he’s indeed hit the nail on the head with some of the apparent weaknesses that seem to exist in this legislation. I think there is room for making the legislation even more attractive than as presented to us in the House this evening.

I do have concerns as to the emphasis being given to regulation and control without any comment as to the actual prohibition aspect of these types of operations. That does give me cause for concern. The fact that we may indeed he simply forcing these operations to a walk-up situation -- getting them off the main streets only to the extent of moving them upstairs and away from the store-front type of operations that exist in other jurisdictions I don’t think is necessarily good enough. I think it’s a tragic situation when people who travel to other countries and visit such noted tourist cities as Copenhagen and Amsterdam find that one of the highlights of those cities is that they are known for their wide-open sex shops and pornography operations. I don’t think that’s any credit to those particular cities.

Mr. Warner: This is a first-hand recitation.

Mr. Williams: I think indeed they are offensive to most people. I would hate to think that by giving the municipalities power to simply regulate and control it would permit these types of operations to I develop --

Mr. Swart: Straighten them out.

Mr. Williams: -- into full bloom --

Mr. Swart: The Revenue minister had to straighten them out. You may as well do it.

Mr. Deputy Speaker: Order.

Mr. Williams: -- and as such turn out to be a retrograde step in practice. It is something we have to be very mindful of, Mr. Speaker.

Mr. McClellan: You should start your own political party.

Mr. Warner: The United Aztecs.

Mr. Williams: The real concern is that the bill is in a sense condoning the type of operations that give a great number of people in our community a great deal of concern. It’s the legitimizing, if you will, Mr. Speaker, of these operations without specifically pointing out that the municipalities have the right to totally ban them if, in the wisdom of the elected people at the municipal level it’s their intention to do so. I think that is somewhat lacking in the legislation.

Mr. Warner: The United Aztec Party. Montezuma’s brother.

Mr. Williams: From a strictly moral point of view, I think I would therefore have conceived this bill as being substantially deficient.

Mr. Warner: The brother of Montezuma strikes again.

Mr. Williams: It is for these reasons, therefore Mr. Speaker, that I do say that --

Mr. Warner: You’re going to vote against

Mr. Williams: -- it is with a great degree of ambivalence that I arise to speak to the bill.

Mr. Warner: You always rise in ambivalence.

Mr. Williams: I accept the fact that the intention is to shape and control the character of the communities, as has been stated by the Attorney General. The main concern, I guess, Mr. Speaker, is whether or not the municipalities upon whom the onus has been placed, once this legislation is enacted, whether in fact they will exercise that onus in a responsible fashion, because I think the success of the legislation is going to be totally dependent on the extent to which the municipalities do respond to the power given to them.

Mr. Warner: We’ve already cleaned up the province.

Mr. Williams: While we know, Mr. Speaker, that in Toronto it has been a particularly vexing problem, it’s not to say that other municipalities are not free of it, whether it be a border city such as Windsor or other urban area throughout our fair province. The problem is proliferating and growing, and certainly to that extent this bill will bring a degree of regulation and control that heretofore has been beyond the grasp of the municipalities. Whether it goes indeed to committee for further consideration or whether it is debated in the House on a clause-by-clause basis. I think we do have to give consideration to some of these concerns that have been expressed by the other members of the House and myself.

I think the point raised by the member for Welland-Thorold with regard to the exemptions, if you will, given under section 2(8), and in particular with regard to the licensed facilities under the Theatres Act, is a valid observation. Bearing in mind that the amount of pornography or near-pornography that we have thrust upon us through the entertainment medium in the theatres in this province is indeed a major concern, and I think not only is on the peripheral edge of this problem but in fact is a very central, if you will, integral part of the problem and one that we have to come to grips with, it might well have been, because of that, if this observation has any validity, that we should have before us this evening, along with the Act to amend the Landlord and Tenant Act, to complement the main thrust of this legislation we indeed perhaps should have some greater controls and regulations brought forward to us under an amendment to the Theatres Act that would give the province tighter control it. over the type of movies that are being made available to the public on an ongoing basis.

I find it quite aggravating, in fact I become quite angered at times --

Mr. Warner: We should bring you under public control.

Mr. Williams: -- not because of the provocations and the side comments in the House, but because of the fact that many weeks in a row I will say to my wife and family that perhaps we could go out and enjoy a movie this evening. I’ll spend a half hour going through the movie columns in the local paper and I won’t find one movie that is suitable for family entertainment. I think this is a deplorable situation, and simply speaks to the point that has been raised by the member for Welland-Thorold.

I think the exploitation of sex and violence, whether it is in the television medium or through the theatres, is an area too that we have to address ourselves to.

Mr. di Santo: Carried.

Mr. Warner: Time.

Mr. Williams: The Speech from the Throne spoke about the government trying to take some initiative in supporting and enhancing and improving family life within our province, and certainly these are areas in which I think the province could be taking some constructive and meaningful legislative action to give meaning to those intentions as expressed in the Throne Speech. This is an important milestone that has been reached, and I applaud the Attorney General for bringing this legislation forward; although it’s late, as some members have complained, it’s better late than never.

Mr. Warner: Who put you up to this?

Mr. Williams: Certainly it will relieve the frustrations that I know I experienced as a municipal politician. I know what the sitting members on Metro Toronto council and other municipal councils have experienced up until the time of introduction of this legislation.

In concluding, I would say there is room for further improvement in this legislation, and I would hope the Attorney General will take these concerns that have been expressed by myself and other members of the House under advisement when we go into a clause-by-clause consideration of the bill.

Mr. McClellan: Mr. Speaker, I want to speak briefly in support of the legislation that the Attorney General has brought forward and to thank him and commend him for the legislation. It is overdue, but it’s here and we appreciate that.

None of us, I think, wants to be particularly self-righteous about what’s happened in our city. All of us from Metro Toronto can only feel a measure of shame about what’s happened in our city. None of us has very much to be proud about. We’ve seen the main street of our city turned into one of the sleaziest streets in North America. We’ve had the tragedy of Emanuel Jaques, who came from the community I represent.

All of us feel a very profound and personal sense of shame about what’s happened in this city. I think this legislation addresses itself to it. I guess we also realize we had the power all along to clean up the thing, because it didn’t take very long to clean up the worst abuses on Yonge Street. Once the will emerged, once the sense of realization of just what had happened emerged, it was cleaned up fairly quickly.

But this legislation is still necessary, because the problem on Yonge Street spread. I represent a riding in the centre west end of the city of Toronto, and the problem is there as well. At this point, within walking distance of my constituency office, there are three sex cinemas. This isn’t in the middle of a commercial district in particular --

Mr. Nixon: Is Jamieson Avenue in your riding?

Mr. McClellan: No This is in the Bloor-Bathurst area, just west of Bloor and Bathurst. There are two cinemas right at Bloor and Bathurst and then another one at Bloor and Manning which has just recently opened. This is in the middle of a residential immigrant area, and the people in the area are profoundly offended by the existence of these operations. Sex shops also have proliferated in and out of the area and have been a problem.

I don’t know particularly why it happens. I can speculate a little bit. I think a lot of the blame -- well, let us leave aside the question of blame, but I think there was a desire to cater to the convention trade, a desire to turn Toronto and Metro into some kind of a great convention city. Maybe that’s one of the reasons the sex industry was permitted to develop: to cater to conventions. We paid the price for that. That was a big mistake.

The other aspect of the sex industry that has to be kept in mind is its relation to the development industry. There isn’t any doubt at all that sex shops have been used as a blockbusting technique, as a way of running down neighbourhoods. That’s a concern I have in my own riding; along the Bloor Street area -- I have no doubt about this at all -- the use of sex shops and the sex industry is in furtherance of an attempt to try to run down the residential character of the area and make it vulnerable to redevelopment. That’s an important function of the sex industry in this community. It always has been, and that’s what I see happening in my own community in Bellwoods. So again I say this legislation gives us the power to deal with that and to stop it.

[9:45]

It will take the wisdom of Solomon on the part of municipal officials to determine where the sex industry is going to be permitted to locate. It sure isn’t going to be permitted to locate in my community if I have anything to say about it, and I suspect if the two ward aldermen have anything to say about it. This bylaw gives the power at last to a municipality to be able to act decisively about getting these kinds of facilities out of the area.

The member for Welland-Thorold spoke about what I think is an important omission in the legislation. I would like to ask the Attorney General to consider whether it isn’t possible to include at least an aspect of sex theatres -- cinemas -- within the ambit of this legislation, if not the whole thing. I would ask him, without being able to come up with any particulars at this point in time, whether it isn’t possible to include those cinemas which totally offer sex cinema under the ambit of this Act.

One of the enormous problems in my area is simply the kind of advertising that confronts families when they are on their way to and from their stores or churches. It’s something that most of us wouldn’t dream of tolerating in our own residential areas and yet people in my area have to put up with this. At the very least I would hope that the advertising provisions of the Act could be made applicable to these kinds of cinemas so that people aren’t confronted with the kind of lurid advertising that took over so much of Yonge Street.

I am pleased with the definition in 2(386b) (9). I think it’s broad and comprehensive and will serve to do the job if -- again I stress -- we can broaden it in whole or even in part to cover the cinemas.

We have permitted a very tawdry and sordid state of affairs to develop in this capital city of the province -- to such an extent that a porno czar even put himself forward as a candidate for alderman in one of the downtown Toronto ridings. He was not a nut candidate as they say, bitt was put forward as a serious candidate. That’s how sleazy --

Mr. Nixon: That is how some candidates get elected.

Mr. McClellan: Indeed they sometimes are.

Mr. Samis: Sometimes the sleazy ones do get in.

Mr. McClellan: That’s right. Sometimes the sleazy ones get in as well.

An hon. member: Take care, Ross.

Mr. McClellan: Fortunately this creep didn’t get in but he ran a highly financed campaign, a very expensive campaign, and raised a lot of money from a lot of ostensibly respectable people and it really calls into question a whole number of things.

This is good legislation, I say again, and I expect it will be supported unanimously and it gives at least to municipalities the power and the teeth to deal with what has been a serious blight on this city and I think on many other large urban communities in Ontario. We are grateful that the legislation has been brought forward.

Mr. Deputy Speaker: The hon. member for Ottawa East.

Mr. Samis: And Athens.

Mr. Deputy Speaker: Or is it the member for London Centre? Oh, no, the member for Ottawa East.

Mr. di Santo: Tell us about Athens. The Mediterranean experience.

Mr. Makarchuk: The Mediterranean member.

Mr. Roy: I could suffer abuse or something but don’t confuse my riding, Mr. Speaker.

Mr. Samis: Well, it is so broad these days, Albert, you can’t blame us.

Mr. McClellan: We haven’t seen you for a while.

Mr. Roy: That’s right, some of us are universal types of candidates who spread goodwill and charm across this whole world.

Mr. Nixon: Oh, tell us more about that. Tell us about what you are spreading.

Mr. Roy: I want to tell you, Mr. Speaker, that the goodwill that my colleague the Attorney General and I spread all over Israel --

Mr. Samis: What happened in Cyprus?

Mr. Roy: -- is going to bring great benefits to this province and the goodwill between Canada and the great country of Israel.

Getting back to this bill --

Mr. Samis: Will you tell us the whole story, Albert?

Mr. Roy: -- I suppose it is necessary legislation, but it is not legislation that I like very much. There’s far too much power given under this legislation to municipalities. In my opinion, many of the definitions are much too wide; the discretion given to municipalities to enact bylaws under this type of legislation is much too wide.

My concern is that this type of legislation in the hands of certain counsel who have a vendetta against a particular individual can make life exceedingly difficult. I appreciate that there is a problem and I suppose the legislation was necessary in the sense that in many centres -- and members have expressed concern about Metropolitan Toronto, but it certainly wasn’t limited to Metropolitan Toronto.

All the major centres of this province were faced with this wave of body-rub parlours, sex shops or whatever and certainly needed control. But I suppose it gives some indication of the magnitude of it and the frustration on the part of various levels of government in controlling this type of activity that we are put into a situation in this Legislature where we have to pass legislation which is as wide-sweeping as this is.

For instance, I am concerned about section 1(5) about what is prima facie proof of the type of activity. Again, I feel that is exceedingly wide.

I voice these concerns but we are obviously supporting the legislation. I think it is wise to keep in mind that there is a major problem nut there and we have to cope with it. Nevertheless, as one member who is concerned about the nature of the legislation that we pass here, I have to voice certain concerns about aspects of this particular legislation.

Previously a member talked about how wide section 2(386b)(9) is. Of course, I couldn’t agree more with him; the definition of what is an adult entertainment parlour is exceedingly wide. Some members were expressing concern about the sex cinemas. I am not too sure, maybe the Attorney General can help us, that this would not be wide enough to cover that sort of activity --

Mr. Swart: Specifically exempted.

Mr. Roy: Pardon me?

Mr. Swart: Specifically exempted in the Act.

Mr. Roy: It is exempted in the Act? Well, I would put this to the concern of many of the members who have mentioned this type of activity. The Criminal Code is always there. In many areas of the province they have succeeded in curbing this type of activity by using the Criminal Code, by charges being laid by the local police, hopefully having this matter decided by the courts and, best of all, decided by a jury of representatives from that particular community. I find that a better alternative for controlling that type of activity than what the member for Oriole was suggesting.

I hope he wasn’t suggesting the type of approach taken by the censors here where a film is banned outright. I much prefer to see a public court, a jury of the people of the community, decide that a particular activity’, a particular film, is too violent or too obscene, or whatever, than have a civil servant someplace decide what the people of this province should or should not see.

I would hope that in our haste to curb activities such as adult entertainment parlours, body-rubs, and so on, that we are careful in the type of legislation and the type of powers that we are thrusting on municipalities. I hope as well that the courts will be ever vigilant as to how this power is used by various councils, because there is always the fear that Come people in political positions, or people who are elected, f or purposes other than curbing this type of activity, will use this type of legislation for personal or other reasons. That’s one of the concerns I have; we’ve seen it happen before at the municipal level, so we have to be careful.

Some members were expressing the concern that possibly this legislation was too late. Possibly it is for this wave -- it seems to come in waves, this type of activity -- but we know, and you know, Mr. Speaker, as a man of long worldly experience, that these things have a way of repeating themselves and coming exactly in cycles, and surely the legislation, if something should happen again --

Mr. Nixon: Schreiber is between cycles now, I understand.

Mr. Speaker: For the last 80 years.

Mr. Roy: So, Mr. Speaker should matters become out of control in your area in a few years, then the legislation will be on the books and I suppose will serve a purpose there.

Another section I’m concerned about is section 3(470b)(2), the fact that an order can be made that the premises be closed to any use over a period not exceeding two years. Again, that’s pretty wide and sweeping power that is given to deal with this problem.

Having expressed these concerns about the legislation it’s obvious, I suppose, that many of us here, in spite of the fact that we as members at this level don’t like to give that sort of power to the municipalities, feel that there is a real problem nut there. We find, and I’m sure that you’ve observed that as well, Mr. Speaker, that obscenity, violence and that sort of activity is not something that can always be controlled in a logical fashion. The standards applicable in one area may not be applicable in another area, and that is an important factor in the control of this type of activity. We are faced, and I suppose the Attorney General is faced, with very little alternative but to present this type of legislation, and of course we have no alternative but to support it, but in so doing we express these concerns.

I find it interesting, reading recently about the Ottawa area, that in fact some of this activity is dying nut without even taking any sort of action. For instance, the nude dancers who were exceedingly popular three, four, five, six years ago -- you had to line up, apparently, to get in -- it seems most of these types of activities, theatres and that, are now closed in the Ottawa area. I was reading in the paper the other day where at the only theatre that is now open, the operator is saying he’s going broke, even though nothing has been done. His biggest complaint, of course, is that he can’t get a liquor licence. Sn it’s interesting to see that in some types of activities the public is getting bored about this.

The same thing is happening in film, of course. I suppose everything is déjà-vu, so that the trend --

Mr. Nixon: Not for everybody.

Mr. Roy: The trend today, in fact, is to get away from that type of gross sexual activity in film and to have more in the area of family entertainment. In fact some of the major films that are in the works apparently have nothing to do with that sort of activity.

So I just say that sometimes the public, without any type of control by any municipal or provincial or federal government, is a good barometer on hew we control that type of activity. Having said this, of course we will be supporting the legislation, but we do so with a certain amount of reluctance.

[10:00]

Mr. di Santo: I don’t think, like the member for Oriole, that this is a cornerstone; I think it is necessary legislation, as the member for Ottawa East said. He made a very good speech by the way, a very small-liberal speech; extremely good.

Mr. Samis: It was the Mediterranean influence.

Mr. di Santo: It shows obviously that he is relaxed from the long holiday in the Mediterranean basin.

Mr. Roy: I didn’t get too much sun.

Mr. Swart: Your face is belying that.

Mr. Warner: I hope you didn’t consult Begin on anything.

Mr. di Santo: I think this is necessary legislation that we have to take, not with a spirit of revanche de la vendeuse --

Mr. Nixon: What spirit is that?

Mr. di Santo: -- as it was expressed by the member for Oriole, but it is a housecleaning bill, because we think it is necessary at this time especially in Metropolitan Toronto.

Mr. Williams: Point of privilege, Mr. Speaker. As I understand the opening comments from the member for Downsview, he suggested, in fact he stated, that I had not felt the legislation to be necessary.

Mr. Roy: Throw him out.

Mr. Warner: That’s not what he said.

Mr. McClellan: Your brain is completely addled.

Mr. Williams: I have to rise on that point of privilege, Mr. Speaker, because I never said in my comments that it was not necessary legislation. What I did say was that while I thought it was necessary, it may be, because of the different jurisdictional situations that exist between federal and provincial legislation, that the legislation does not and cannot go far enough, but I never said it was not necessary. I think in fact indeed that it is not only necessary but, as I indicated in my remarks, long overdue. So I want that corrected on the record.

Mr. di Santo: Mr. Speaker, if I may just speak to the point of privilege, I never said the member for Oriole had stated that the legislation was not necessary, but I promise I won’t mention him any more from now on.

Mr. Samis: Good.

Mr. Williams: I feel relieved.

Mr. di Santo: This bill is necessary because the development of the sex industry in Toronto was becoming very disturbing. Of course, I think that last year and, of course, now, after the reaction to the murder of Emanuel Jaques last year, the situation in Toronto is not comparable to other countries of the world where the sex industry has developed in such an ominous way that it is really threatening some societies.

The implications are really serious because where this kind of industry develops, usually we have the development of crimes of different kinds. We know that where there is a sex industry we have an enormous diffusion of drugs. We have loan-sharking. We have murders. We have violence and we have a kind of criminality which may not be defined by the Criminal Code but which still is becoming a threat to the people who live in some cities.

Of course, we know also that underground crime is flourishing in some cities where there is also a spreading of the sex industry. The reason is that this is a gigantic business which is subject to exploitation because this industry exploits the lowest instincts of people. People are ready to pay money and to be exploited and to be blackmailed and, therefore, to violate the law and to breach the legality. For this reason, I think this is a good bill.

I agree with the member for Ottawa East that the powers given to the municipalities are too broad and I hope that they will use them with discretion. I think this bill will stop in Metropolitan Toronto the development of an industry which can become dangerous. For these reasons, I support the legislation. As my colleague, the member for Bellwoods, said, this industry is used to bit those neighbourhoods which are more vulnerable as a blockbusting device in order to vacate certain areas and to allow redevelopment.

That happens in Metropolitan Toronto in areas where immigrants live in the downtown ridings. This is done in a very sophisticated way. The case of one of the protagonists of recent events in Metropolitan Toronto, who ran for alderman, is not a good example, because they have more sophisticated ways of influencing public bodies, municipalities and governments and they are extremely dangerous. I think this legislation will end up by protecting that part of our population which is not very much aware of the danger that this kind of operation brings to its neighbourhood. Above all, they are not equipped to fight back because in most of the cases, as my colleague said, they are recent immigrants and are not very well acquainted with their rights and with the legislation of this country. They are unprotected and are afraid to lose what they have. In many cases, they lose what is there because the blockbusting device works to their detriment.

For these reasons, I support the legislation as have the other members who spoke before me.

Mr. Haggerty: I want to rise and support the bill on principle and I will certainly entertain questions during the third reading of the bill. I do have some reservations as to its intent to control immoral practices and questionable entertainment.

I believe I raised the matter last November in a question to the minister responsible, the Attorney General, concerning questionable entertainment in certain hotels and establishments in the Niagara Peninsula. I wasn’t satisfied with the answers I received at that particular time. I have a number of letters here and communications from persons who were objecting to the type of questionable entertainment, and I suppose that relates to exotic dancing.

I thought the member for Brant-Oxford-Norfolk put it very well in saying that perhaps if stronger action had been taken prior to the incidents of last August in Toronto on Yonge Street, we wouldn’t have to have this bill before us today. I believe there was legislation under the Criminal Code that provided some means and measures for the police or law enforcement agencies to go in and apply a crackdown and cleanup of Yonge Street. It did finally come about but we all know it was too late. I think much of that responsibility in that particular area lies with members of the Legislature and, in particular, the two ministries responsible, the Solicitor General’s and the Attorney General’s. I think they could have taken stronger action before they did.

I question certain sections of the bill. It does not cover pornography. It does not cover the matter of questionable entertainment as It relates to establishments under the Liquor Control Act. Perhaps there should be some tighter controls in this particular area. At one time, the Liquor Licence Board did have some powers in this particular area to control the type of entertainment that was provided in taverns and other liquor outlets in Ontario. That authority now has been removed from them. If we’re going to be looking at this particular bill in the context of the obscenity question, perhaps we should be including some of that authority in this particular bill.

One of the faults I can find with the bill is that it is not adequate enough. It does not go far enough to cover practically all areas that are questionable or of an immoral nature. The bill says that the bylaw mentioned in the sections “may” provide for regulating and so forth; whether it’s province-wide or not, I can’t see that in the bill. I would suggest that this type of legislation should come under provincial authority. I can say this much: Local police have difficulty right now in policing crime in local communities and they have other problems, so perhaps it should be province-wide. There’s a possibility that one municipality will pass a bylaw, while the next one may skip. It may be a skip-and-miss proposition, and it could cause some difficulties in that particular area.

The legislation perhaps should come under the Criminal Code and not lie with municipalities to provide regulations to control it. As has been mentioned by previous speakers, section 6 is a pretty broad section. I can only assume that it’s going to cause some difficulties in municipalities in trying to control it. The section is “it confers on all municipalities the power to license, regulate, govern, classify” -- that’s going to be hard to define, I’ll tell you, under a local municipal bylaw -- “and inspect in the manner specified adult entertainment parlours as defined in this section.”

I feel that municipalities are going to have a difficult time in bringing forward a bylaw unless the ministry has a model bylaw in this particular area that might assist municipalities, but I still feel it’s going to be a difficult area for them to control or to police.

The legislation may even supersede any other bylaw in a municipality, and I can see here, if they do pass a bylaw, where it might cause some interference with local planning bylaws. We have a difficulty in a number of municipalities now in relation to certain accommodations for retarded residents in communities; and under this law perhaps this would say that you could have one in perhaps the wealthiest section of the community. I suggest that putting that onus on to a municipality is not justified. I suggest the legislation should be province-wide and under the control of the ministry here.

Mr. McClellan: Whatever happened to home rule?

Mr. Warner: Local government? Oh, that was yesterday’s speech.

Mr. Haggerty: I don’t know if any of those gentlemen have sat on local councils or not, but I’ll tell them this much --

Interjections.

Mr. Haggerty: The member for Welland-Thorold can recall some of the problems that municipalities have in bringing in municipal bylaws, where there can be control in One municipality but not in another municipality.

Mr. Warner: Metro Toronto cleaned up the problem before today.

Mr. Haggerty: Perhaps the bill should have made it a regional responsibility, instead of leaving it with individual municipalities. Perhaps it should have said that where there’s a regional government, it will come under theft jurisdiction. Maybe this is the way we should be looking at it.

Mr. Warner: There’s nothing to prevent that.

[10:15]

Mr. Haggerty: But I think this particular type of legislation certainly does indicate that it comes under the Criminal Code. That’s the area that it should fall under, not under a municipal bylaw. I don’t think it can be strong enough to enforce. I don’t think you are going to have the enforcement agencies there to do it. I think it should be province-wide and the responsibility should be under the Solicitor General or the Attorney General.

Mr. Lupusella: Mr. Speaker, I would like to rise in full support of this piece of legislation. I would also like to support the principles which have been emphasized by my colleagues, in particular the member for Welland-Thorold.

I think that he has valid concrete points, and I think that the Attorney General should be taking those points into consideration to improve this situation which arises from time to time in our society.

Speaking to this legislation, I would like to address myself to the moral and social values which exist in our society. In the past we have had businesses operating like the body-rub parlours because they don’t have any respect towards moral and social values. If they don’t contain the way they operate themselves, it is my firm position they shouldn’t exist in the province at all. If they want to contain theft operation by taking into consideration the moral and social values of our society then I think they can exist if the government will keep them under control.

This piece of legislation in this form gives power to the regional municipalities. I really want to congratulate the government and recommend that this is the right step to follow to give power to municipalities in other less-controversial areas than the one with which we are dealing now -- body-rub parlours.

I hope that we are going to expand the principle involved of giving more power to municipalities in dealing with theft own affairs, instead of waiting for so long until an issue arises to attract public attention in order to make the government enact legislation to solve a particular problem,

I would like to associate myself, not in a partisan way, to the principles which the member for Bellwoods emphasized beautifully. I also represent a particular community, the Portuguese community, which lives in my area. When the death of Emanuel Jaques occurred last summer, this incident shocked the whole community, a community of 300,000 people located in the metropolitan area. I really don’t understand. In some ways, I should appreciate the goodwill of the government in enacting this legislation. I am not too sure whether or not it is going to be enacted because 10,000 Portuguese had a demonstration in front of city hall or in front of the Parliament buildings. Perhaps that’s why the government paid attention to this phenomenon. It has been taking place for so long, yet the government didn’t pay much attention to the detrimental effects of this business operating around Yonge Street.

I really welcome this particular piece of legislation. I hope the government is not only going to act and solve the particular problems in our society -- and I want to emphasize this particular problem -- when there is an issue which involves the public as a whole such as the death of Emanuel Jaques. I think the Attorney General should pay more attention to those particular phenomena which now exist, have existed in the past, and are going to exist in the future, and the government should pay more attention to the expansion of those phenomena before detrimental cases arise from time to time which attract the government’s attention.

To emphasize this particular principle, I really don’t understand why the Attorney General has waited so long before enacting this particular legislation. I think this particular principle has been emphasized as well by other members of the Legislature. It seems that the Attorney General paid more attention, for example, to violence in hockey games instead of enacting legislation to regulate the body-rub parlours as soon as the death of Emanuel Jaques took place which struck at the Portuguese community of 300,000 people in the metropolitan area.

I really don’t know where the Attorney General is putting his priorities in relation to those particular issues which are shameful and offend the moral and the social values existing in our society. I hope the Attorney General is going to pay real attention to those particular phenomena.

To emphasize this approach, I would like draw the Attorney General’s attention, for example, to the phenomenon which is taking place in our society, particularly in the metropolitan area, in relation to racial attacks which have existed, are existing, and are going to exist and there is no move from this government to try to solve the problem as to why the people have been attacked and have sacrificed their lives in those attacks. I hope the Attorney General is going to do something about it instead of waiting until more victims are killed on the street.

So, Mr. Speaker, I really welcome this piece of legislation. Of course, there is room for improvement as my colleague from Welland-Thorold emphasized, and I hope we are going to deal with the clause-by-clause sections to make those improvements.

Hon. Mr. McMurtry: Mr. Speaker, I thank the members of all three parties who have supported the bill and I appreciate their support in relation to the principle of this legislation. I’ll be very brief, particularly in view of the hour.

I think there may be some confusion in the minds of several of the member as to what the constitutional authority of the provincial government is in relation to matters of morality. I think most of the members, perhaps, appreciate that legislation dealing with morality, so far as prohibiting certain conduct is concerned, is within the exclusive jurisdiction of the federal Parliament and that the only possible legislation in this area by a provincial government is in relation to regulation and licensing. So for those members who suggested that they would prefer legislation that included certain specific prohibitions of certain activities, of course I would just remind them that that is within the exclusive jurisdiction of the government of Canada.

The matter of the exemption of the Theatres Act and the Liquor Licence Act was really at the request of municipalities. The municipalities that were interested, and which we consulted, felt that they did I not want to be involved in passing bylaws in relation to licensed premises or in relation to theatres.

The member for Bellwoods mentioned his concern about the offensive character of certain theatre advertising with respect to sex films. I would just draw his attention to section 41 of the Theatres Act which requires that any person using any display or advertising in connection with a film or the exhibition thereof, must obtain the permission of the board, so that matter is already dealt with under the Theatres Act.

Mr. Speaker, I look forward to further discussion of this bill on clause-by-clause consideration prior to the third reading.

Mr. Speaker: The motion is for second reading of Bill 49.

Motion agreed to.

Ordered for committee of the whole House.

Mr. Speaker: A motion to adjourn has been deemed to have been made under standing order 28. I will listen to the hon. member for Scarborough-Ellesmere for up to five minutes.

Mr. Warner: Thank you, Mr. Speaker. I was expecting another bill, Bill 50.

Hon. Mr. McMurtry: Mr. Speaker, with your permission and the permission of members of the House, in view of the fact that Bill 50 is really a companion piece of legislation, I wonder if the members I might consider movement of second reading of this bill, in the event that there’s not any issue as to the principle, as this is a companion piece of legislation.

Mr. Warner: Mr. Speaker, while it is in fact a companion piece of legislation, I had some remarks as it relates to section 368 of the Municipal Act, 1975, and wish to spend a few moments to sketch through those remarks; so if it’s possible I would like us to deal with the legislation at a future time.

Mr. Speaker: The hon. member for Scarborough-Ellesmere for up to five minutes.

EDUCATION FUNDING

Mr. Warner: Thank you, Mr. Speaker. I realize it’s not incumbent upon the minister to be here, although I expected that he would be here at 10:30.

An hon. member: Shame, shame.

Mr. Warner: As you know, Mr. Speaker, my question on Thursday last was in part that the minister should initiate interim funding to boards so that no teachers presently on staff and no programs will be cut as a result of declining enrolments and his decrease in funding. He responded in part by saying that he had never heard it suggested anywhere that the reason that any of these teachers are not going to be needed next year is because of the provincial government, it’s because of declining enrolment purely and simply. That was part of his remarks, and that’s what prompted my response that I was dissatisfied.

What will happen, Mr. Speaker, at Riverdale Collegiate in Toronto in terms of academic programs, is that because of the declining enrolment and this government’s cutback in funding that some essential programs will be cut. Remedial reading and English as a second language will not be offered next year at Riverdale Collegiate because of this government’s cutback in funding, coupled with the declining enrolment factor.

What this government has done over the past years is to cut its expenditure of education dollars to boards of education, in relationship to their total budgetary expenditure, from 17.7 per cent in 1971-72 to approximately 14.1 per cent in 1978-79. That decline in percentage, which has been exaggerated in Metro Toronto where the decline has been a good 10 to 12 per cent in moneys received by Metro Toronto for educational facilities, means that in many schools programs will be cut back. I don’t think that can be denied.

[10:30]

The Minister of Education received, in October, 1977, a letter from the then chairman of the Metro school board, Mr. Gersy Phillips. That letter, a very lengthy one, outlined the problem that Metropolitan Toronto school board faces. In part it reads:

“The enrolment is declining by about two per cent a year. Unfortunately, this does not lead to a two per cent saving in total expenditures because many costs are virtually fixed, These include debenture debt charges, insurance premiums, central resource staff and subject consultants to help teachers cope with changes in curriculum -- most of these changes initiated by the province -- support staff to help the children with social, psychological and language problems, staff to administer night school courses that are in such demand and that give taxpayers an important link with the system they have to support,” and so on.

“Another problem is that the enrolment decline is not concentrated in a few schools. It is spread out across the system, with some schools losing 50 to 60 children, some 10 to 20 and some only a handful. A school’s enrolment may drop from 500 to 450 or even to 400, but it still needs a principal, a secretary, a caretaker, a gym teacher and so on. It has to be heated and lit” unless, of course, we close the school. That’s the problem Riverdale Collegiate, in a working-class community, faces. As enrolment drops pupils coming up from the primary schools are not attracted into Riverdale because of the cutback in programs, and thus are attracted to other schools, that school in Riverdale may in fact face having to close in the next few years.

“All in all,” Mr. Phillips draws to the attention of the minister, “it is not realistic to expect school board expenses to fall at precisely the same rate as enrolment falls. At best, a two per cent decline in enrolment would reduce expenses by about 1.5 per cent.”

It is an all too brief session, but it seems to me that declining enrolment gives the government a golden opportunity to live up to previously stated objectives of providing a high quality level of education to each student in this province. Instead of being committed to meeting the individual educational needs of each student, the minister appears to be knuckling under to the Treasurer’s (Mr. McKeough) obsession to balance the budget by 1981, even though the students at Riverdale Collegiate, and in hundreds of other schools in this province, will suffer educationally.

Mr. Speaker: The hon. member’s time has expired.

Mr. Warner: I ask the minister to reconsider what he has done.

Hon. Mr. Wells: I welcome the opportunity to reply to my friend in this time, when I have just a few more minutes than normally are available in question period to set the record straight as far as Riverdale Collegiate is concerned. I had the pleasure of meeting with Terry Dobbin, the president of the Riverdale Students’ Council, and Jan Oakley, a member of that students’ council, along with a number of other people this afternoon to discuss this matter for over an hour.

Let me first say that the statement I made the other day that these teachers were being switched from Riverdale Collegiate for reasons other than the financial policies of this government is still a correct statement I think the upshot of my discussion verified again today, with the people from the board and the chairman of the Toronto board, that the reason for the decrease in number of staff at Riverdale Collegiate is a negotiated staffing ratio formula, negotiated under the teacher and school board collective bargaining legislation and agreed to by both parties.

That formula, once it was agreed to and once it comes into effect, means that because the enrolment is decreasing by about 251, when it is applied to Riverdale Collegiate, as it has been applied to every other collegiate under the jurisdiction of the Toronto Board of Education, Riverdale is entitled to 51.5 teachers. That’s under a formula that has been agreed to by the Teachers’ Federation and the negotiating people of the metropolitan school board. The Toronto Board of Education granted one extra teacher to make the staffing formula for Riverdale at 52.5. Part of the problem is exaggerated because for the last year there were seven surplus teachers on staff at Riverdale, more than the formula would have allowed. This was done with the agreement of the federation, and so therefore when the total formula was put into effect this year it meant a greater de crease in fact a decrease of 12 teachers, from the staff at Riverdale.

The question is, what can be done about it? Let me first, however, say that in so far as provincial grants are concerned I double-checked this again and my figures show that for this year there is an increase of 5.86 per cent in the provincial assistance per pupil, for secondary students in metropolitan Toronto -- an increase per pupil. Don’t forget that in overall numbers, because of declining enrolment, it may mean that there is very little total increase in the number of grants, but we’re looking at increase per pupil and it’s 5.86 per cent per pupil.

Mr. Warner: Plus the cost of living.

Hon. Mr. Wells: The question really is, what can be done? This has come about because of a very logical situation that was agreed to. I feel as sorry as my friend does about any programs that have to be cut.

Ms. Gigantes: You said it wouldn’t happen.

Hon. Mr. Wells: -- and this of course is what we’ve discussed. But what can be done?

There are two solutions immediately available to us. Those two solutions are, first, an agreement by the Teachers’ Federation and the board to switch some teachers from another school in Toronto, because under the agreement the total number of teachers in all the secondary schools, as already worked out --

Ms. Gigantes: Give them some more money.

Hon. Mr. Wells: -- in the ratios, is set. They have the total number of teachers that the formula that was negotiated provides for them.

As was done in order to achieve the seven surplus teachers in this present year, an agreement with the federation could bring more teachers to Riverdale. That’s the first solution. The other solution is to use the remedies in the Metropolitan Toronto Act and for the Toronto board -- and I understand they’re already doing this -- to initiate the process for an extra levy. They’re allowed to levy an extra mill under certain procedures in the Metropolitan Toronto Act and they therefore could levy that money and use that money to effect some extra staffing at Riverdale Collegiate. Those, to my way of thinking, are the only short-term solutions that are available.

The long-term solutions, of course, are these. The long-term solutions are going to take action by three groups of people: One, the Ministry of Education -- I completely acknowledge that. It means that after we’ve received the Jackson report we’re going to have to set out very clearly what our policy will be insofar as the total problem of declining enrolment, because --

Ms. Gigantes: You’re going to be a little late,

Hon. Mr. Wells: -- this is one of the offshoots of a declining enrolment situation.

The second thing is that the Toronto board is going to have to set its policy and priorities.

Mr. Speaker: The hon. minister’s time has expired.

Hon. Mr. Wells: The third group is the teachers. When they negotiate their agreement they’re going to have to build something in to take care of the situation.

Mr. Warner: The Jackson report won’t be in till September.

Mr. Speaker: The hon. member for Carleton East for up to five minutes.

Ms. Gigantes: Mr. Speaker, last Thursday in response to two questions posed by my colleague, the hon. member for Scarborough-Ellesmere, the Minister of Education said, “I’ve never heard it suggested anywhere that the reason why any of these teachers are not going to be needed next year is because of the provincial government. It’s because of declining enrolment -- purely and simply.”

I then asked the minister if he were seriously suggesting that he had never heard teachers’ groups or boards complaining to him “that a decrease in provincial funding for the total cost of education from a level of 61 per cent in 1975 to a current 53 per cent is causing part of the problems in terms of cutbacks in school programs” and dismissal of teachers.

The minister replied that he’d heard such complaints from teachers’ federations, of whom he said, “They don’t want us to pay more money and the local share to remain the same in order that more staff and lower pupil-teacher ratios will result.” If you can follow that you’re doing better than me, Mr. Speaker. But he continued, “ ... it means the local share will decrease, not that there will be services added to the schools.”

The minister’s response is really not good enough. First of all, declining enrolment has only very recently begun to affect the school population at the secondary level, but the decline in the provincial contribution to the total education costs at the secondary level has been in effect since 1975. The minister cannot claim, as he attempted to do, that declining enrolment is the sole cause of the loss of programs and staff at Riverdale Collegiate or any other school in the province. These developments are not purely and simply as a result of declining enrolment, but also a result of Conservative government financial policies and he knows it.

The second statement of the minister which is unacceptable is his pretence that teachers, and only teachers, seek increased funding from the province and for the purpose of lowering the local property tax contribution to education. School boards across this province have made strong pleas for adequate provincial funding to help them meet the needs of students. The minister has absolutely no right to predicate that they would use funding increases to ease the local property tax burden, he has no evidence to bath up that claim. He may pretend that school boards are totally pecuniary in their policies, but such a judgement from him is improper and mean minded.

Mr. Lupusella: For shame.

Ms. Gigantes: School boards are fixated by costs, but he could relieve them of the oppressiveness of their financial concerns if he were assuring them of decent provincial support. If boards exceed the spending guidelines drawn up by the province, the boards receive no provincial moneys for the extra expenditures, so that if the province provides inadequate support, :the boards pay a severe financial penalty for expenditures outside the guidelines, and reasonably enough they make every effort to keep expenditures to the absolute minimum. Unfortunately, this often involves cutting vital programs and dismissing needed teaching staff. School boards do not want to make these miserable choices, but the financial policy of this government leaves them no option.

This is the situation of the Toronto board currently, and the families of the Riverdale area and the teachers at Riverdale Collegiate are paying the price. The minister can mutter about the Toronto board and the Metro board and the formula agreements between them, but he knows better; he knows that inadequate provincial funding is a major cause for these problems and he should be honest enough to admit it.

Mr. Speaker: The Minister of Education for up to five minutes.

Hon. Mr. Wells: I am very pleased to respond to the remarks of my friend the education critic for the New Democratic Party, a party which consistently opposed education ceilings in this province when they were in and the province was paying 60 per cent of the cost of education, a party which has consistently asked for more money with no responsibility and no fiscal policy to show that it can help this province get out of the fiscal mess that it is in.

Mr. McClellan: Rubbish, rubbish.

Mr. Swart: Who got the province into this?

Ms. Gigantes: Name-calling is not going to solve it.

Mr. Swart: Unemployment and inadequate funding.

Hon. Mr. Wells: Now let me just say this to members opposite, they want it all ways, that is the way they want it all the time.

I get requests from school hoards, members are certainly right, I get requests from school boards for more provincial money; but most of them want that money to relieve the amount of property tax they will have to levy. They don’t want particularly to spend more on the total education picture.

Ms. Gigantes: They’re over ceiling.

Hon. Mr. Wells: Certainly there are some groups and some school hoards that do want more money from the province and also want to continue with the same kind of property tax rate; but I would say that with the majority of people who ask us for more money, really it is to reduce the property tax. I say that, not based upon some figment of my imagination, but I say that based upon talking to school boards who present briefs to me, most of them want property tax relief through more money from this province.

We have had to say to them we want to do something about the fiscal and economic situation in this country. We can only do some of the things. We are keeping our budget to seven per cent, we are increasing your budget, totally across this province, by 4.9 or 4.8 per cent --

Mr. Warner: Less than the cost of living.

Mr. McClellan: That’s a five per cent cut.

Hon. Mr. Wells: -- another $90 million to general legislative grants, and we want you to exercise the same kind of restraint that we are exercising, because all of us together have to act in a very responsible and cautious manner. And let me tell members that most of the school boards across this province are doing that.

The problem is arising because of declining enrolment, and as I have said many times we can’t buy ourselves out of that problem, we are going to have to devise other policies and they will come when the Jackson report is presented.

Mr. Warner: When? About September, too late for next year. of policies that members opposite would bring forward, which would bankrupt the people of this province.

Mr. McClellan: Print your own money.

[10:45]

Hon. Mr. Wells: Let me say to them that they sit here and talk as if the education system in this province were falling apart; it isn’t.

Ms. Gigantes: It is and the minister knows it.

Hon. Mr. Wells: The education system in this province remains one of the finest in North America. I don’t care what they say. That is what it is. Let me tell them that there aren’t any schools in any municipality in the province of Ontario that are closing their doors because they haven’t got the money to pay theft teachers, as there are south of the border.

Mr. Lupusella: Why?

Hon. Mr. Wells: I want to tell them that there never will be in this province because of the policies of this government. We have placed education as a number one priority and we are still placing it there. They won’t find any school hoards going bankrupt in this province and they won’t find any teachers’ pension plans going bankrupt, as they will in other jurisdictions in North America.

Ms. Gigantes: That is a straw man.

Hon. Mr. Wells: They won’t because we are financing education in a responsible way.

Mr. Lupusella: The government has been responsible for the bankruptcy of this province.

Hon. Mr. Wells: We consider it to be a top priority, and what we need is not shrill cries for more spending but responsible people who will look at policies that can combat declining enrolment, given that we also need to practise financial restraint. I must say the New Democratic Party of this province refuses to look at that kind of picture.

Ms. Gigantes: The minister is letting the school system get shredded.

Hon. Mr. Wells: They refuse to look at it. All they can talk about is more spending.

Mr. Warner: The minister knows better than that.

Interjections.

Hon. Mr. Wells: I tell them that won’t solve our problems. While I appreciate there will be some problems at Riverdale Collegiate next year, there will still be a school system and a quality of education there that

Hon. Mr. Wells: We will bring forward those policies but they won’t be the kind will be better than most in North America; as there will also be across Metropolitan Toronto because Metropolitan Toronto is well funded for education.

Mr. Grande: We are talking about education on this side, the minister doesn’t understand.

Mr. Warner: Tell that to the students who won’t have remedial reading.

Hon. Mr. Wells: I must say, certainly as far as we are concerned, that this government’s financial policy towards education is well known. I think we are placing it as a number one priority. We are funding education, we are building a quality system and preserving that system, and we will work together. I invite my friends in the New Democratic Party, rather than adopting the attitude they are, to wait until the Jackson report comes out.

Mr. Warner: When? It won’t be before September.

Hon. Mr. Wells: Then let’s work towards developing --

Mr. Speaker: The hon. minister’s time has expired.

Hon. Mr. Wells: -- those policies that can realistically face this problem.

Mr. Speaker: I deem the motion to adjourn to have been carried.

The House adjourned at 11:49 p.m.