Assemblée législative de l'Ontario

The House resumed at 8 p.m.

House in committee of supply.

ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS (CONTINUED)

On vote 1101A, ministry administration program; item 1, main office:

Mr. Laughren: There were a number of questions, if not put explicitly to the Treasurer, certainly implied in what I was trying to say to him on Monday night. Nothing has changed since then to indicate to me that we shouldn’t have some answers. I have a number of very specific questions, and I think this is an appropriate time to ask them because they do involve an overall approach to the management of the economy of Ontario. I think this is where it belongs.

I have a series of questions and I am quite flexible as to whether or not the Treasurer wants to answer them one at a time, or whether he wants to go through them after I have given them to him. The importance of the first question was reinforced today by what happened with the recent report on the auto pact. It has to do with the trade.

We, in this party are very worried about what is going on with --

Hon. Mr. Davis: Why don’t you stop there?

Mr. Foulds: Why doesn’t the Premier stop while he is behind?

Mr. Laughren: -- the so-called Tokyo round of the trade negotiations. I’d like to know. I think we have a right to know. I don’t think it is enough to say to the Minister of Industry and Tourism (Mr. Grossman) that we want him to table his submissions to the federal government on the GATT negotiations. The Treasurer should share with us some of his ideas on the whole question of reduced tariffs, and the whole idea of the Swiss formula whereby they reduced the highest tariffs, the higher percentage and so forth. I would be interested in knowing what the Treasurer’s views are on that. Secondly, what does he think about the Economic Council’s proposal of a redeployment fund? I think they said it would take several billion dollars in order to look after several hundred thousand workers.

Mr. Bradley: The member for Simcoe Centre will be in cabinet yet.

Mr. Laughren: We’ll have serious problems if the tariff reductions do go through. Perhaps I could ask that question by itself and see if the Treasurer could reply to it. If he wants to go on and have me give him a list, I’m quite prepared to do that. But perhaps he could tell me what his views are on the whole question of the tariff reductions with the negotiations now going on.

Hon. F. S. Miller: Mr. Chairman, I’m almost nervous to have to answer the questions tonight with the Premier beside me.

Mr. Laughren: It is so unusual, I know. I can understand how the minister feels.

Hon. F. S. Miller: Not only that, he warns me he is going to ask me questions.

Mr. Bradley: You hear that, George?

Mr. Laughren: I am glad that you have the Minister of Industry and Tourism here.

Mr. Foulds: Let the record show. I think it displeases him.

Hon. F. S. Miller: What?

Mr. Laughren: Lack of confidence in the Treasurer.

Hon. Mr. Grossman: It shows how concerned we are about the whole topic.

Mr. Laughren: They’re worried about your jolly Miller image.

Mr. Chairman: Order.

Hon. F. S. Miller: You have to realize that that name and that image goes a long way back to the time when I was teaching school. But what I discovered was that the boys were not naming me after my image in school but after the nearest pub and that worried me even more.

Mr. Foulds: I should hope so.

Hon. Mr. Grossman: So he tried it.

Hon. F. S. Miller: It was down in Hogg’s Hollow, as I recall.

Hon. Mr. Davis: It’s still there.

Hon. F. S. Miller: The Premier says it’s still there. I don’t visit those kinds of places.

Hon. Mr. Grossman: Any more or any less?

Mr. B. Newman: That halo is slipping.

Mr. Foulds: The Premier watches the weekly reports from ‘the LCBO and licence branch transfers.

Hon. Mr. Davis: That’s right.

Hon. F. S. Miller: Seriously though, the negotiations going on at the General Agreement on Tariffs and Trade multilateral trade negotiations -- I think that’s the proper terminology for them at the present time; I believe they call it the Tokyo round although they’re taking place in Geneva --

Mr. Laughren: You got it together right.

Hon. F. S. Miller: -- are very important to Canada. I think we have to realize our relative bargaining strength in that round and learn, as I know our negotiators on behalf of Canada have learned in talking to them, how best to put forward Canada’s points of view.

Within the negotiations being carried by Canada -- you realize they are not being carried by Ontario. Ontario, of course, has the responsibility to make its own specific problems known to the Canadian group, and we have done so on a pretty steady basis.

Mr. Laughren: But you won’t share them with us.

Hon. F. S. Miller: I feel, and I hope the Minister of Industry and Tourism feels, that we have had the opportunity. Although I think it’s fair to say that Ontario is concerned that there may be some feeling in the other provinces their interests are not necessarily as well served by protecting the Ontario industry as we feel they are.

Mr. Laughren: That is historical.

Hon. F. S. Miller: Yes. And I think it is our major duty to impress upon our sister provinces the importance of those negotiations, not just to Ontario but to Canada.

The overall approach to all these negotiations by all countries is to have a general reduction in everyone’s tariffs and trade, but not particularly those measureable things like a tariff so much as the not-so-easily defined things like non-trade, or non-tariff barriers or, of course, purchasing policies of countries.

I think, for example, the manufacturers of Canadian electrical generating equipment could make a pretty good argument by saying it’s very difficult for them to enter certain markets, no matter how competitive they are, simply because certain countries don’t allow the bidding process to entertain bids from our people. Those are the kinds of negotiations I don’t think you or I will have any disagreement about at all. In fact, we have to work very hard within the limits of our negotiating strength to see that any of the concessions that may be necessary in the tariffs are also balanced by improvements in terms of ease of access for Canadian manufacturers who wish particularly to sell government procurement items in other countries.

I’m sure the Canadian negotiators have, in their rounds, found they have a community of purpose with the Americans in many of these items. For that reason, I believe we find it of use to sometimes have the Americans’ relatively high bargaining strength allied with us, because we have been traditional partners in many ways, not just because the Americans are our biggest old customer but because they share a number of the problems we share in the same marketplaces.

I can’t give you details of the negotiations. I don’t mean I won’t, I mean I can’t, because I am not privy to them. I think you have to realize that the provinces are not being kept up to date on a lot of the negotiations, because many of them are highly confidential and are being done often on a person-to-person basis, apart from the formal meetings that are being held.

You are quite right when you said they had a deadline of December 15. As I recall, that was because the Americans have their countervailing exemptions running out on January 1, 1979. It requires, I believe some kind of a resolution or statute in the Congress of the United States to extend that date. The pressure was on the Americans and the pressure was also on the Europeans and Japanese to find some rapprochement in that time so they would be able to take back some acceptable negotiations to the US to see that that countervail was not reimposed.

Mr. Laughren: I am enjoying your discussion, but why are you being so evasive?

Hon. F. S. Miller: I don’t think I am being evasive at all.

Mr. Laughren: Could I rephrase the question?

Hon. F. S. Miller: Sure.

Mr. Laughren: What I was trying to elicit from the Treasurer was what his views are on the whole negotiations and what he thinks about the whole question of tariff reductions, in particular in some of our more threatened industries -- I don’t think I have to name them for him --

Mr. Haggerty: Tell us, Larry; you are going over to Europe.

Mr. Laughren: -- because we are very concerned about the statistics that are flowing out of the federal government concerning the possible ramifications of tariff reductions. I want to know what the Treasurer feels about that and what he said.

Secondly, has he read the Ministry of Industry and Tourism’s presentation to the federal government?

Mr. Haggerty: He is going to see Inco out.

Mr. Bradley: Next Premier.

Mr. Laughren: Now that you mention it, the Minister of Industry and Tourism’s presentation differed somewhat from the version I read in the Toronto Star.

Hon. Mr. Davis: Which one would you believe?

Mr. Laughren: You think that’s difficult for you; that’s even more difficult for us.

Hon. F. S. Miller: Especially if you can’t read.

Mr. Laughren: Now, Frank. It is very difficult for us because we don’t know whether the Toronto Star revised the submission for you or whether you revised the article in the Toronto Star.

Hon. Mr. Davis: We took the editorial policy of the Star and sent it on to the negotiators.

Mr. Laughren: Whatever newspaper suits your purpose.

Hon. Mr. Grossman: Over your signature.

Mr. Laughren: Maybe the day will even come when the Nickel Belt New Democrat editorial will suit your purposes. It’s the fastest growing newspaper in the north, by the way. It’s a remarkable paper.

Hon. Mr. Grossman: Really.

Hon. Mr. Davis: How many subscriptions do you buy?

Mr. Laughren: All of them. Every one of them.

To get serious here, if I could ask the Treasurer --

Hon. Mr. Grossman: Bill Kelly has the mailing list.

Hon. Mr. Davis: That’s where Don got his today.

Mr. Laughren: You are just giving the Treasurer time to assemble his thoughts, and that could be dangerous.

Mr. Foulds: You may need a lot of time.

Mr. Laughren: Could the Treasurer tell us his views on the reduction of tariffs? Secondly, has he read the Minister of Industry and Tourism’s submission to the federal government and can he indicate whether or not he agrees with the comments made in that submission?

[8:15]

Hon. Mr. Grossman: Of course, he agrees.

Mr. Laughren: Well, he doesn’t say it in his public statements.

Hon. Mr. Grossman: He certainly does.

Mr. Laughren: He’s embarrassed by what you said to the federal government. Do you know that? You should be embarrassed.

Hon. Mr. Grossman: Do you disagree with what we did?

Mr. Laughren: That’s a foolish question.

Mr. Chairman: Order.

Mr. Laughren: I’ve been asked a question.

Mr. Bradley: Is the Minister of Industry and Tourism one of the big three?

Mr. Chairman: You’re asking a question?

Mr. Laughren: I’m answering a question. The Minister of Industry and Tourism has come to me for some expertise.

Mr. Chairman: We’re not on those particular estimates now. Would you just direct your questions to the Treasurer?

Mr. Laughren: I’ve already asked the Treasurer the question.

Hon. Mr. Grossman: Here is your answer.

Hon. F. S. Miller: I wasn’t trying to be evasive. The member said earlier I hadn’t commented upon the negotiations in Geneva. I was giving, in effect, an historical overview of what was going on -- I wasn’t stopping there -- before I got to the point of discussing what we would do or how we feel.

Mr. Haggerty: What is the Minister of Industry and Tourism going to do over there? Tell us. He is going over there to solve the problems.

Hon. F. S. Miller: Ontario is very concerned about the effects of any sudden or even gradual change in the tariffs. One of the assumptions was that if the change was gradual enough many of our industries could adapt, or we would have industries grow strong to replace the ones that went weak. I understand the federal government in its discussions has been setting up some kinds of funds to assist industries to go through that period of adjustment.

Mr. Laughren: Are you going to contribute to that fund?

Hon. F. S. Miller: Certainly Ontario is prepared to consider assistance as the time and need arises.

Mr. Haggerty: Even to those locating in Alberta?

Hon. F. S. Miller: But with the present state of the negotiations, we can’t assess what that need has to be.

Mr. Laughren: What’s bothering me is that when I read the submission by the Minister of Industry and Tourism, or by his ministry at least, to the federal government, I detect a realism in his submission that I don’t detect in the pronouncements from the Treasurer. Whether I go back to the October 24 statement of the Treasurer --

Mr. Haggerty: They’re not consistent over there.

Mr. Laughren: -- or whether I look at comments the Treasurer made today, I don’t detect a sense of realism in what’s going on. I understand that the Treasurer has to put on a happy face. That’s one of the dimensions of his role as Treasurer of the province of Ontario. I’ll choose my words carefully. When it borders on deception, then we start to worry about it.

When you tell us -- and you said it again today in your statement -- everything is happy in the whole area of manufacturing, we know that’s not true. When you tell us the increase in jobs is in a large proportion in the manufacturing sector, we don’t believe it. We know it’s not true.

Hon. Mr. Davis: The private sector.

Mr. Laughren: What part of the private sector? Perhaps the minister could enlarge on that.

Hon. Mr. Grossman: Thirty per cent.

Mr. Laughren: In his statement of October 24, he talks specifically about the health of the manufacturing sector. That’s the very area where we are in the most difficulty in this province. When I hear the Treasurer talk in such a way as to mislead the investors who might be coming to Ontario, that’s not right either. This is not simply a political forum for him to strut his stuff. We’re dealing with the real world when it comes to economic matters. I’m worried that the Treasurer is failing to grasp that.

I would ask the Treasurer when the recommendations the federal government has made to the negotiators come out -- and surely they must come out at some point -- whether he will be willing to say to the federal government, “We are not willing at this time of very high unemployment and very high trade deficits to go along with some of these proposals in the reduction of the tariff because we are heading for trouble.” We don’t have any answers to our questions.

Mr. Hennessy: You can say that again.

Mr. Laughren: I asked the Treasurer a long list of questions the other night on what would happen if tariffs were reduced in the clothing and textile fields. The Treasurer has not answered a single question.

Mr. Peterson: He’s mad now.

Mr. Hennessy: Take it easy.

Mr. Laughren: Could I ask the Treasurer, Mr. Chairman, to tell us what he thinks is going to happen to the clothing and textile industry in particular if tariffs are reduced in that area?

Hon. F. S. Miller: Mr. Chairman, because I say, and truthfully, we are having a good year in terms of employment, does not mean that I have automatically said there are no problems anywhere in industry. It does not automatically mean that I am not agreeing with the kind of comments made in that paper last January, I think it was, that in fact there were some “structural problems.” I think that is what you are referring to.

I do not argue that there are some structural problems in Canada. If one looks at a single industry like the fine paper industry I could tell you of some structural problems. I could tell you that it has a lot of old plants and I could tell you that it has short runs of any given quality or type of paper as compared with American plants. I assume that is what you mean by structural problems. Fine.

You know that I am studying the pulp and paper industry right now. I mentioned that in my October 24 statement, saying that we were going to address the problem of the pulp and paper industry from two fronts, (a) the need to meet the environmental requirements we have a right to expect, and (b) the need to make those industries competitive if, as and when the Canadian dollar returns to something closer to parity.

Mr. Foulds: How come Abitibi could buy that mill in Newfoundland?

Hon. F. S. Miller: Well, I suppose, my friend, a socialist will never understand how a capitalist buys anything.

Interjections.

Mr. Chairman: Order. Order.

Hon. F. S. Miller: Have you ever heard of stock swaps? That is something like the socks we take the stocks from.

Interjections.

Mr. Chairman: Order.

Hon. F. S. Miller: Normally I would temper my colleagues’ enthusiasm, but I somehow am constrained.

One thing I honestly disagree with you about is when you ask why we don’t simply say to the federal government, “We won’t go along with these reductions in tariffs” -- just a second now, I think I’m right in this -- “we won’t go along on the reductions of tariffs, we’ll simply tell the world Canada will erect them and let them go and whistle in the wind.” That would be very pleasant to do if we were the kind of nation that could survive without the export business that is not totally coming from Canada, and the real strength of the negotiations in the GATT area is their ability to apply sanctions to those countries that do not conform to the agreements. You know that.

It is under those kinds of conditions we really would find some of our customers for our current exports could easily divert their purchases elsewhere or erect barriers to prevent Canadian goods and products from coming in. Obviously then, that is why I say we must negotiate within the true strength of Canada and if we have false ideas of our negotiating strength we could very easily lose.

At the same time we have a duty to protect, insofar as we can, employment in this country. If there is a reduction which makes some of our industries less competitive we have a responsibility either to assist those industries to become competitive or to create industries that are competitive in different fields.

Now, you talked about industry in its present rate of proportion. I heard an interesting news clip today on the radio as I was going out for an appointment about 5:15. It was talking about the increased utilization of Ontario’s industrial plant. I think the figure, if I recall it correctly, was 87.4 per cent this months versus 86.2 last month, with non-durable goods industries running at effectively 90 per cent right now.

Now, it is like a hospital that is full at 85 per cent on average. When the industry starts pushing past 85, 86 per cent on average, many an industry is reaching a point of maximum output and, in fact, as this analyst pointed out, many of them are now at the point of needing to expand to meet demand. I think that is healthy.

Mr. Cassidy: That is balderdash.

Hon. F. S. Miller: That is your privilege to say. I am repeating what I heard. I can only tell you what the gentleman reporting for the Financial Times said, a paper I believe you are familiar with.

Mr. Cassidy: With which I have some acquaintance, yes.

Hon. F. S. Miller: Yes, that is exactly who was reporting this.

Mr. Cassidy: I didn’t agree with him at the time I was with them.

Hon. F. S. Miller: Did you leave voluntarily?

Mr. Cassidy: I left to get into politics. And look at me now.

Hon. F. S. Miller: Did they contribute to your campaign fund?

Mr. Chairman: Order. The questions seem to be becoming reversed here.

Hon. F. S. Miller: I think it is only fair once in a while. You become paranoid after being a minister for a while.

An hon. member: You’ve been paranoid for quite a while.

Hon. F. S. Miller: You are almost afraid to turn around in case there is somebody behind you. You like to have a chance to shoot back. It is only fair.

Hon. Mr. Davis: Mr. Chairman, I am just wondering, on your head office vote, if the Treasurer could help the member for Brampton in terms of the plans for the ministry with respect to the Toronto-centred region.

There are a number of people representing the city of Brampton in your gallery and in the public gallery who are very interested in the subject, at the same time as having some slight association with a political organization for which the member for Brampton is eternally grateful.

Mr. Peterson: You are not getting enough press in Brampton now.

Mr. Bradley: I was wondering why you were here tonight.

Hon. Mr. Davis: Mr. Chairman, on your behalf, I do welcome them to your gallery and suggest to the Treasurer that I will get the answer to the question I posed him on some other occasion.

Mr. Laughren: Isn’t that out of order?

Hon. Mr. Davis: Yes, it is out of order.

Mr. Laughren: I, too, welcome the good citizens from Brampton to the chamber. I am glad that they are able to see the other side of the argument occasionally.

Hon. Mr. Grossman: You should be so lucky, Floyd.

Mr. G. Taylor: It makes it easier to choose.

Mr. Laughren: I don’t think the Minister of Industry and Tourism was invited to engage in the debate.

If the Treasurer, when he talks about our lack of bargaining power, could tell us if he is aware of the reason why we have this “Boy Scout image,” in quotation marks --

Mr. G. Taylor: Watch that, Floyd.

Mr. Laughren: -- about international trade. It is a very apt analogy, given it is the Boy Scouts who are in the gallery tonight.

Mr. G. Taylor: Boy Scouts?

Mr. Laughren: It is very appropriate that we talk about Boy Scouts.

Mr. C. Taylor: Is there anybody else? What about the Brownies?

Mr. Laughren: What have you got against Boy Scouts?

Mr. C. Taylor: You appear to have a gripe. I think it is a fine organization.

Mr. Laughren: Would you stop heckling the Boy Scouts, please, and let us get on with the business of the House.

I wonder if the Treasurer could tell us if he has had any role, given the fact Ontario is where the manufacturing occurs in this country, given the fact this is the industrial heartland of Canada, how he explains and what he is doing about the problem that exists, for example, in machinery?

There is an agreement between the United States and Canada in which the United States has a clause that says if all tractors exported to the United States are to go in duty free, they must be for agricultural purposes only. On this side of the border we don’t have any such restrictions. So guess what happens? The tractors and the equipment that come in here can move earth and operate in a mine and we end up with a $200 million deficit in that area of manufactured goods alone.

When I hear the Treasurer say we don’t have the power and we don’t have the say to establish tariff barriers -- Well of course we don’t in Ontario. We know that. But if there is an industrial or manufacturing heartland in this country, it is in Ontario.

[8:30]

We have a great deal at stake and that is why the Treasurer cannot be allowed to stand in his place and say that it is up to the federal government to carry on negotiations. He cannot be allowed to stand in his place and say those negotiations are confidential. I want to tell the Treasurer that we have a great deal at stake in this province on the whole question of those negotiations going on at Geneva. At a time when we have 300,000 people unemployed, we have more at stake than we should have.

I doubt whether the Treasurer fully understands that we import into this country an incredible proportion of our manufactured goods completely tariff free. No other country on the face of the earth does that. We have several times more, in terms of manufactured goods imported duty free, than any other country in the world. And we wonder why we’re called the Boy Scouts in international trade.

It’s because we’re so good to everybody. We know the Boy Scouts are good to everybody. That’s right. Look at that, look at the sign of support from the gallery even.

But, that’s not the name of the game, Mr. Treasurer -- because they’ll take advantage of us every time.

Mr. Hennessy: We’ve got the Girl Guides on the other side.

Mr. Chairman: Order. Would the member address his remarks to the Treasurer?

Mr. Laughren: I think the member for Fort William is being frivolous, I really do.

I wonder if the Treasurer could tell us if he’s had any input or has he made any submissions to the federal government to ensure that we don’t continue to be in this subservient position in terms of world trade?

Hon. F. S. Miller: Mr. Chairman, of course we continue to make observations. But if you were sitting on the government side here dealing with the federal government --

Mr. Laughren: Just the thought makes me smile.

Hon. F. S. Miller: -- yes, your friends in Saskatchewan are talking to them too. I can assure you a degree of confidentiality is needed in those discussions. It’s not a question of hiding, it’s simply a question of keeping the Canadian position intact so that the negotiations are not given away by tipping your hand publicly. It’s as simple as that. You’re in a very tough, hard-bargaining game. I think we have to trust those people who are elected to do it for us, the federal government and their aides, and we have to do our darndest to make sure that Ontario’s interests are protected.

Those issues about the tractors are not going on at GATT as far as I know. Those are Canada-US negotiations. By the way, I believe Canada-US negotiations, independent of GATT, are progressing on a number of items at this time.

There is a, second side to the equation and this is the side that probably seven of the other provinces keep talking about: maybe eight of them. That is that tariffs traditionally add to the cost of the products for the consumer. Whether it’s a tariff to protect the peaches of the Niagara belt or the grapes.

Mr. Laughren: It’s unemployment, Frank.

Hon. F. S. Miller: No argument; I’m just saying the Ontario position is not necessarily appreciated by a series of other provinces. Since Confederation those provinces have harboured certain grievances about the prices they pay for Canadian-made or, in their opinion, Ontario-made goods. They’ve always claimed it would have been cheaper to let the same products come in, the tractors you talk about -- interestingly enough we were the major source for many years for those -- the farm machinery, the products that are required, machinery and so on, right across Canada.

Yes, we have lots of problems. They’re not going to be tackled necessarily just through GATT. I think some of the measures that came out in the federal government’s budget this week and were put there at the urging of provinces may have a more profound effect upon the future of Canadian industries than just the tariff. A tariff is there to protect us while we mature, or to protect an industry which has no chance of being competitive in a world market. I think you’d agree on that.

Mr. Laughren: Or if we have unduly high unemployment.

Hon. F. S. Miller: Yes, or unduly high unemployment. The real question in those cases is which comes first. People who are for free trade would say high unemployment will come because of the protected tariffs, because of retaliation in other areas, therefore you can’t export the products you can make efficiently, like lumber, et cetera. I’m not going to get into that argument tonight because that goes back to almost the beginnings of Canada. I would suggest that the greatest progress in solving these problems will be the incentives for more Canadian research, accentuating the high technology industries we have here, and improving their base and their ability to compete.

I get great pleasure going up to de Havilland Aircraft and seeing on the tarmac a series of Canadian-made aircraft, say, Twin Otters, at about $1 million a copy, with colours of nations from all around the world.

Mr. Laughren: I have flown in a few of them myself.

Hon. F. S. Miller: They are a high quality product that Canada can ship.

Mr. Cassidy: Isn’t that a publicly-owned corporation?

Hon. F. S. Miller: It currently is a publicly-owned corporation. I’m sure it did not develop its high technology as a publicly-owned corporation. It became one when Canada’s overall aircraft industry happened to fall on bad times, as many did. The fact remains that that industry is competing in a world market and producing high labour-content material with a high technology content. Not only that, when the aircraft are finished -- those going to Red China that I saw, for example -- they were loaded with --

Mr. Samis: It’s just China now.

Mr. Laughren: Just call it China.

Hon. F. S. Miller: -- high technology Canadian mineral exploration equipment. The aircraft going to the United Arab Emirates -- and there are a lot of them going to the United Arab Emirates to land on the desert -- are high technology items. We need to give incentives for that kind of development. We need to have incentives to use Canadian graduates here, and not necessarily just in Canadian companies, but in any companies operating within Canada, so that the opportunities for design, development and high technology for our graduates exists here and with them the opportunities to produce the products that can be sold competitively in world markets.

Mr. Peterson: I know the leader of the third party wants to speak tonight and I know his time is a little more pressing than my own and some others of us. He has more restrictions on his time. I certainly want to give him the opportunity to perform or to say whatever he has to say.

While we are on this vote and in a general kind of a discussion, before we get into one that concerns me probably more than anything, the general financing of the debt in this province, I want to respond to some of the things the minister said last night in response to our opening statements. It’s become painfully obvious that the Minister of Treasury and Economies in this province has become only the minister who oversees the repayment of the debt.

It’s very interesting to look at his statement of last night. He has a total budget of about $1,646 million for the fiscal year 1978-79; of which $16 million of that is for administration, which is presumably what we are talking about tonight. That goes to the planners and the various people who are giving him the high degree of input he’s using to make some of the very erudite decisions he is making.

Interestingly enough, under his ministry we have a statutory obligation for $1,443 million or 88 per cent as interest on the public debt. I don’t want to go into a great long diatribe about this. We have chatted about this before on numerous occasions. It’s a very alarming number. Rather than having what I would call even a useful planning function or a major activist function in the government, increasingly the minister’s role is just to pay off the debt. He’s chief accountant for the province, figuring out how much we owe to pay up for our past excesses or our past sins, depending on how one looks at it.

We have $114 million or seven per cent for development loans to provincial corporations. That is a diminishing part. The previous Treasurer had a very different view of the role of government in active involvement in corporations. Then $67 million, or four per cent, is provided for payment for pension funds, deposit, trust and reserve accounts. Again in a sense, that is almost a statutory obligation. What he’s doing is trying to aid some of the pension funds that the government is responsible for and fulfil some of the legal obligations it has incurred historically in order to bring them up to some degree of actuarial soundness.

Mr. Chairman: And also in vote 1102.

Mr. Haggerty: Right on, Mr. Chairman.

Mr. Peterson: I appreciate that, Mr. Chairman. I will be speaking about that in vote 1102. I was just responding to some of his general remarks in his original statement and to his response to our response to that original statement. It is a very interesting commentary on the nature of that portfolio today, and shows how depressingly little room, in the real sense, the minister has to move.

I was accused by the minister -- I don’t know, I’m not accused, I don’t take it as an insult -- that I am more to the right than the minister is in matters of economics. I probably will admit that, unabashedly. If one sees what he is doing today, he is now paying a dramatic price for the sins of his predecessors, for this tremendous explosion of expenditures that we have seen in the last few years.

Interestingly enough, in his statement of today we have seen we have transfers to the municipalities and to the school boards of about five per cent. The biggest single increase in his expenditures this year is interest on the public debt. It is 12.9 per cent, as I recall, and possibly it is growing. That is something he cannot control. As that grows, necessarily he is going to have to diminish the other transfers. You can see in that one single statement he made today, in the statement he presented to the House, in a very graphic and illustrative way --

Mr. Haggerty: Three and a half million a day.

Mr. Peterson: -- what has happened to the financing of this province.

I don’t for a minute suggest he is unique or alone. I know he is making notes right now, Mr. Chairman. He is going to stand up and say, “Yes, I have got lots of problems, but the feds are worse.”

Mr. Kerrio: Frank wouldn’t say that.

Mr. Peterson: Yes they are. I think in fairness you owe it to this House and to the people of this province to address these problems directly and only in the context of the province of Ontario.

Mr. Cassidy: Is that the Ontario Liberal speaking about the federal Liberal?

Mr. Peterson: Well, you know, we have had many facetious comments in this House. It has been a very easy escape for a very good friend, the Minister of Treasury and Economics, to sort of blame, the federal government any time we ask a question. It is just about as fruitful an exercise, as I see it, Mr. Chairman, as my blaming Premier Lougheed or Richard Hatfield or Frank Moores or even Alan Blakeney for some of the excesses of the NDP.

Mr. Haggerty: You have to blame someone over there.

Mr. Peterson: I don’t consider that ever, very frankly, a fruitful discussion.

Mr. Haggerty: Hear, hear.

Mr. Peterson: I think we all have the right to criticize any other level of government or any other party, but if I stand here and rail against Joe Clark for introducing a program for deductibility of mortgage payments or for various other programs he has introduced to try and buy a few votes, given the particular situation he is in, I don’t think that is a particular fruitful line of questioning for me.

One of the problems we are seeing now is the sins of the indexation of the taxation system, a program originally established by Robert Stanfield, that great Tory. Have you ever seen me, Mr. Chairman, criticizing the Treasurer because of Mr. Stanfield’s policies? Actually I did, and I was really sorry. I wanted to bring that up in the interests of coming clean.

In fairness, Mr. Chairman, I think, as responsible people --

Hon. Mr. Grossman: Moving along.

Mr. Peterson: -- and we all have different points of view on this issue, but I think we have to address our problems here. Interestingly enough, I think you will find, if you examine the things we have consistently been saying on this side of the House -- not necessarily my friends to the left -- is even though in terms of government expenditures and the discipline of living within our means, we would favour a far more activist role than you have provided to this House, and your government has provided to this province.

You see, salesmanship, hustling for international business, and building industry does not necessarily only involve the expenditure of public funds. I remember a wonderful statement from the former leader of the NDP -- when he said your government sells from a terminal scrawniness of the imagination.

Mr. Samis: Sounds like George Hees.

Mr. Peterson: I happen to subscribe to that particular view. There are so many things, from an activist point of view --

Mr. Bradley: Where is that man now?

Mr. Samis: Where is George Hees?

Mr. Peterson: -- that you could do that you do not do, which do not necessarily involve expenditure of public funds and do not necessarily involve buying equity in various companies around the province. I regard that, frankly, as the very last resort in any situation. I do not ever see that as a panacea and it’s always got to be within the guidelines of fiscal responsibility and fiscal restraint.

[8:45]

Hon. Mr. Snow: You had better talk to Ottawa and tell them.

Mr. Peterson: I don’t want to discuss Petrocan.

Mr. Kerrio: Jim, you guys hide behind Ottawa’s skirts so many times it’s not even funny.

Mr. Peterson: I know the Minister of Transportation and Communications, having just come back from dinner, wants to discuss that particular issue, but that is, again, not within our bailiwick or within our jurisdiction.

Mr. Kerrio: What a cop-out.

Mr. Peterson: But I would think, and I have some similarity of opinion with the New Democratic Party --

Mr. Bradley: We need more answers. Same old answer.

Mr. Peterson: -- not in terms of expenditure of public funds but in terms of it’s time you got off your duffs. Free enterprise does not mean laissez-faire necessarily and it does not mean laissez-passer. Those are, in many respects antiquated notions in today’s world.

Mr. Kerrio: Stop blaming the feds for your problems.

Mr. Peterson: I have said before, Mr. Chairman, that I have had the opportunity of having been able to deal in a business sense with other countries and to see how they function in business with government and with labour. I can tell you they laugh at it. They think we are so terribly naive. We give so many things away. We don’t have any preference for nationally developed goods; we don’t have any preferential policies for domestic production and we have been so painfully naive. There isn’t a country in the world as economically successful today that looks at us with any degree of envy. Any heritage we have had, we have blown. We are dissipating now. I look back and I say there are things that could have been done five years ago.

Hon. Mr. Walker: That’s not what you said at dinner, David.

Mr. Peterson: I just woke up my good friend from London South. He is a wonderful fellow and, I must say, I have just finished a wonderful dinner with the member.

Mr. Samis: Who is further to the right, you or him?

Hon. Mr. Walker: That is not what you told me.

Mr. Peterson: I don’t expect him to agree with me on these things. He’s a much better dinner companion than he is a member of this Legislature. I must say that, Mr. Chairman.

Hon. F. S. Miller: If only you hadn’t been born into that rotten family.

Mr. Peterson: The minister again is going to bring up some of my inlaws, outlaws, whatever you want to call them, who could be card-carrying members of the Conservative Party. I can honestly say, in retrospect, I wish I had never got involved.

Hon. F. S. Miller: No, your own.

Mr. Kerrio: David, they didn’t all go sour on us.

Mr. Deputy Chairman: Order. May I point out to the honourable member that we are debating the main office and we’re not debating general fiscal policies.

Mr. Peterson: I understand that. The main office is under administration, Mr. Chairman.

Hon. Mr. Walker: You are quite right, Mr. Chairman.

Mr. Deputy Chairman: Yes, we allow a certain amount of latitude from the chair but the House has passed the policy that after the opening statement by the minister and the critics the future speeches stick specifically to the topic. There is a vote further on for economic policy and fiscal policy.

Hon. Mr. Walker: Very apt, Mr. Chairman, very wise choice.

Mr. Deputy Chairman: So I would ask that you stick reasonably to item 1, which is the main office.

Mr. Kerrio: He hasn’t left it all night.

Hon. Mr. Walker: He has strayed quite a bit.

Mr. Peterson: I respect that, and in the interest of fairness, I just want to tell you that on the same vote we were discussing the policy of the GATT negotiations and everything else. I don’t think I am straying any more than any of the previous speakers.

One of the things we are prone to do in this House, Mr. Chairman, is to tolerate a high degree of latitude.

Hon. Mr. Walker: He has been straying. I think you would have to agree with us.

Mr. Peterson: I am not sure it was particularly fruitful. I’m not one of those people that thinks the estimates process is the end of the world around here for scrutinizing public expenditures, but it is an interesting exercise, at least, in the ability to rail at the minister. What interests me far more than what we’re doing now is the ability to cross-examine the minister. I will be doing that.

Hon. Mr. Walker: I am glad you are back on the topic.

Mr. Peterson: I am glad to see two of his aides sitting there with boxing gloves on ready to assist the minister when we get into the financing of the public debt.

I just want to respond to a statement of last night and to some of the things he said today. He made a very deceptive statement today.

Hon. Mr. Walker: No, perceptive.

Mr. Peterson: The headlines tomorrow are going to be: “Miller Promises to Balance the Budget in 1984.” Assuming there were nine per cent increases in revenue, no one is going to read all the assumptions on which he bases that statement. I can tell you that I’m embarrassed for him when he writes into the charter of the great Bramalea charter, “We will balance the budget in 1981”. There is no question in my mind, at least as an observer, that the former Treasurer Darcy McKeough is not here today because he could not deliver.

Mr. Haggerty: That’s right.

Mr. Peterson: Had Darcy McKeough been here today his credibility would have been so shot that he would have been embarrassed because, basically, he tried to be an honourable man. I know the federal government hasn’t been completely up front with the Treasurer when they changed the rules. I understand that, but at the same time, if you are going to milk the electoral system, if you’re going to milk every drop out of the right wing sentiment in this province for a balanced budget in 1981 then you’ve got to suffer for the prediction and no one else. That’s what you did and that’s what you’re trying to do again. I tell you this right now, you’re going to come back in a year or two and revenues are not going to be increasing at nine per cent a year --

Mr. Kerrio: Increasing? They’re going to go down.

Mr. Peterson: -- and you are going to say, “I have exculpated myself because I have all of these subordinate clauses or conditions on the promise I made to the Legislature.”

I know why you made that statement. You made it in response to a lot of people who wondered after three months where the hell you are at or what you stand for. That was an arbitrary number and I frankly have no more faith in that number than I have in a lot of the numbers you have given this House. I hope you are right, but you are probably not right. As a matter, of fact, I feel very confident that you are not right.

One of the things that depresses me so incredibly about this whole legislative process is that the press picks up every single trivial issue that matters not to the history of this province or the future of this province -- like whether waitresses should be coiffed or uncoiffed, or clothed or unclothed. They pay no attention whatsoever to the significant issues that are going to affect this province five and 10 years from now. Those are the issues, I say with respect, Mr. Treasurer, for which you, more than any of your other colleagues, have great responsibility.

Hon. Mr. Walker: He’s very responsible.

Mr. Peterson: When we get into these pension issues, when we get into the financing issues, then I am going to expect a whole bunch of answers from you or from your advisers sitting over there under the balcony or whoever got us into this mess.

Mr. Nixon: It had to be them; they look guilty.

Mr. C. E. Smith: I don’t know why you aren’t leading the party, David.

Mr. C. Taylor: Much better than the regular guy they have, Ian Deans.

Mr. Samis: Nothing Liberal about him.

Mr. Peterson: I want to respond to one other comment that the Treasurer had last night. He was very critical of the RRSP problem. He said that the RRSP program in this country was counterproductive, I believe, and I hope I am not misquoting him. He was saying because it was double-taxed or -- he had some explanation about the RRSP.

Let me tell you that the RRSP program, a creation, I would hate to admit, of our federal brethren --

Mr. Nixon: Did you say hate or hasten?

Mr. Peterson: -- happened to be probably the single most important growing pool of capital for private enterprise that you can possibly lay your hands on.

Mr. Haggerty: Free enterprise.

Mr. Peterson: The problem with CPP and all the public sector funds and the public funds you control is that you use them all for current consumption. You consume them all as a government contributing nothing to the gross national product or to the collective wealth of this province. The RRSP funds, the $1.5 billion roughly they generated last year, are all controlled basically in small pools by independent fund managers, and are invested under the disciplines of the market, on strictly market decisions, not on a political basis. Those are the funds that are going to build private enterprise and build a free economy in this province.

I may be misinterpreting what the minister had to say last night, but if I have interpreted it correctly, his analysis is 100 per cent wrong.

Mr. Deans: No, not even he could be a 100 per cent wrong.

Mr. Haggerty: That’s not the first time.

Mr. Peterson: Last night he said in his thoughtful way that he was considering at least that perhaps the CPP was going to have to double or increase the contribution rate to make it more actuarially sound. We happen to subscribe, unfortunately, to the view that it will probably be necessary in the very near future. But what we will never support is that that money can be borrowed by governments ever again. Had you been subjected to market discipline, had you to go out and pay current market rates, had you not had this free pot of money available to you starting 10 or 12 years ago, you probably never would have spent that money.

Let me not forget to mention one thing that is so terribly important to me. Ontario has an extraordinarily important role in the administration of CPP. Let’s not forget that under 91 of the BNA Act it is a provincial responsibility, not a federal responsibility. It never would have been created without the permission and without the acquiescence and the delegation of this province. You still have enough power to control that. I hope you have enough guts. I hope you have enough courage to go to the federal ministers’ convention next week and say --

Hon. Mr. Walker: Don’t you worry about the Treasurer. He’s got enough courage.

Hon. Mrs. Birch: And guts.

Mr. Peterson: He’s got some courage, but the only problem is any time he exercises his courage, he’s wrong.

Mr. Nixon: Like closing the Paris hospital.

Mr. Peterson: I want you to pick an issue that’s right, and if you’ve got courage then it could be a winning combination -- if you could ever get those two things together.

Hon. Mr. Walker: Don’t you worry about the Treasurer.

Mr. Peterson: What’s the point of having courage and being wrong?

Mr. Nixon: What a waste.

Mr. Peterson: We are trying to assist you in this thing you are looking for.

Hon. Mr. Walker: Prophets of doom and gloom.

Mr. Peterson: You have responsibility. You should go next week, and I hope you do, and say, “We have a collective disaster on our hands and we are going to have to do something about it collectively.”

Mr. Kerrio: Right on. The feds and the provincial government -- a collective disaster. The Minister of Transportation and Communications knows it.

Hon. Mr. Snow: The federal Liberals --

Mr. Peterson: It is your responsibility, having constitutional jurisdiction and being the biggest contributor and the biggest borrower, to say we have to do something about it.

Mr. Ashe: We will get rid of Trudeau next year.

Mr. Peterson: Number four, you shouldn’t be borrowing anything more from that fund.

Hon. Mr. Walker: You support him for what he’s doing.

Mr. Peterson: Put that money out into private enterprise. Put that money out into the free market.

Mr. Kerrio: Federal Liberals and provincial Tories.

Mr. Ashe: A Liberal is a Liberal.

Mr. Peterson: Build the kind of capital infrastructure that we need in this province. Let it be regulated by the market and I can tell you the problems you’re trying to concern yourself with today --

Interjections.

Mr. Deputy Chairman: Order.

Mr. Peterson: -- that we’ll be speaking more about later -- industrial strategy, the declining economic base, the declining manufacturing sector, increased unemployment --

Hon. Mr. Walker: I don’t think he is on topic, Mr. Chairman. He is straying.

Mr. Peterson: -- I can tell you all of those things would have been far more manageable today had your government -- not you, but your government -- had the vision to do those things some 10 or 12 years ago.

Mr. Haggerty: Poor managers, that’s what it is.

Mr. Nixon: Hear, hear; you had plenty of warning then too.

Mr. Laughren: When are you going to stop listening to the cocktail party Liberals?

Mr. Peterson: I get sick to death of you constantly running against yourself.

Mr. Laughren: Cocktail party Liberal speech.

Mr. Peterson: You say that prior to 1975 government expenditures were increasing at the rate of 25 per cent a year and, “Aren’t we noble fellows for cutting that back to six, seven or eight per cent?” Well, I ask you who the hell was the government before 1975? It was you.

Hon. Mr. Walker: You’re exaggerating.

Mr. Villeneuve: Good government here for 40 years.

Hon. Mr. Walker: You know you’re exaggerating.

Mr. Peterson: It was Davis and it was McKeough and our little friend the Treasurer was hanging around in the wings. He’s not completely responsible --

Mr. Nixon: He was negotiating.

Mr. Peterson: -- but I can tell you your government has taken on a very interesting strategy. We find the Minister of Labour and the Minister of the Environment both standing up and denying things their civil servants have done. We find you standing up and saying, interestingly enough, “Well, you know it really wasn’t my budget. When I do my own budget some time in the future... ”; God knows when.

Mr. Kerrio: It was that plumber from Chatham-Kent.

Mr. Peterson: Could the member for Niagara Falls go over and speak to the member for London South? He’s making an unnecessary amount of noise. Could you phone some of your friends?

Mr. Kerrio: I’ll go across.

Hon. Mr. Walker: What did you expect him to say?

Mr. Peterson: I can understand the Treasurer trying to deny those projections in that budget which he has been trying to do in his own very charming way.

Mr. Nixon: Just like St. Peter.

Mr. Peterson: I can tell you if there is such a thing as ministerial responsibility, if there is such a thing as continuity of government, then you as a member of that government have some degree of responsibility.

Hon. Mr. Walker: That’s not what you were saying earlier. You’re inconsistent.

Mr. Haggerty: Be careful.

Mr. Nixon: Total responsibility.

Mr. Peterson: What are you going to do? Every time you make a mistake in projections switch ministers? If that’s the case, I can tell you a year from now you’re not going to be the Treasurer. God knows, it might even be Jimmy Snow. Can you imagine a greater disaster in this province than that?

Mr. Nixon: Yes, Margaret Birch.

Mr. Kerrio: It’s going to be Mickey Hennessy.

Mr. Peterson: That’s the kind of politics your government is playing.

Mr. Deputy Chairman: Order. May I remind the member we are dealing with only the administration of the main office. You are allowed considerable latitude, but I would like you to stay on topic.

Hon. Mr. Walker: He is really off topic.

Mr. Peterson: In fairness, Mr. Chairman, I’m talking to the chief administrator of the office.

Mr. Kerrio: Mickey Hennessy is the next minister.

Hon. Mr. Walker: You’re absolutely right, Mr. Chairman. I congratulate you on your wisdom. You’re absolutely right. He is so off topic.

Mr. Peterson: I want to thank you very much for the latitude you have allowed me.

Hon. Mr. Walker: You are taking far too much latitude.

Mr. Peterson: In fairness Mr. Chairman, I do know that the leader of the New Democratic Party does want to make a little diatribe, probably equally off topic, tonight. I assure you I will sit and listen attentively to everything he has to say in his socialist diatribe.

The things I did say I mean very, very sincerely. I was concerned about the Treasurer’s response last night and I was concerned about his statement today because I don’t think either of them represent all of the story as it is and the proper approach, given the circumstances.

Hon. Mr. Walker: That’s not what you said earlier tonight.

Mr. Peterson: I think you are on extraordinarily dangerous ground.

Mr. Chairman, I’ll vacate right now. If the minister wants to respond, I’d be delighted --

Mr. Laughren: But don’t count on it.

Mr. Peterson: -- but perhaps the leader of the New Democratic Party would like to report.

Mr. Laughren: No, we will hear from the minister. That’s fine.

Mr. Chairman: The member for Simcoe Centre.

Mr. Laughren: Is the minister not going to respond? He destroyed you.

[9:00]

Mr. Deputy Chairman: I would again mention to the members the ruling that was passed by the House. After the critics have spoken, thereafter members should adhere strictly to the particular vote and item under consideration. I would ask members to please try to stick to this. Many of these policy matters will come up in later votes in the minister’s estimates.

Mr. G. Taylor: Mr. Chairman, you are following the usual order that those who appear in the House first and place their names on the list get to ask the questions in the appropriate rotation, which is much the position taken by Mr. Peterson that another route should be assembled for this evening.

I don’t know whether the Treasurer’s new portfolio is the result of many mechanizations in the appropriate changing of the cabinet. Let us say where you start is from a foundling budget that you have to work with and thus you are embarking on a new ministry, for which I am pleased for you and wish you all success in that.

We come to a few propositions that your ministry will be involved in as you go along. I add these to you since we are on the general administrative situation and you will be preparing your administration as you go along and the budget for that administration so you must follow that in a certain context. I provide you with some few helpful hints as you go along since we don’t always get those opportunities to put those to you in a forum where all can hear them. Whether you achieve them and take them to your breast as this new ministry of yours is given birth is another question.

Let us look at some of the things that would be of assistance to members as you operate and run your ministry and to help you in your budgetary process. There is the matter of annual reports of the different ministries. I do not know as Treasurer and particularly as a new member of this operation, when you contemplate looking at the different budgets as you set out and give them their money, how you compare the different apples and oranges and peaches that come before you with these different annual reports.

Mr. Kerrio: No wonder we are in trouble if you people are playing with apples, oranges and peaches over there.

Mr. C. Taylor: If you could get some coordination among your administrative staff and those of the other ministries and of the many boards, agencies and commissions that report to us, if they would have one standard type of common accounting I am sure that would assist your programs in the future so we could see how these people are spending their money and on what subjects and how we could compare one with the other.

We have some cases where there might even be two parks commissions that have entirely different financial reports. If you could get some of your houses in order in that respect, one might see how we might get rid of that deficit over a period of time.

Then I look at your ministry. I am sure transfer payments will come up at some later time. The member for London somewhere spoke of it.

Mr. Peterson: London Centre.

Mr. C. Taylor: When I go through the different estimates -- and naturally you are one of the leaders in putting the estimates and the budget together -- I look at the number of transfer payments and by whom they are received. I am sure in the preparation of your ministry and eventually its budget you will be looking for cost savings. As I go through these ministries, I look at the number of institutions, agencies, associations, groupings and other operations that receive money from the different ministries. Though Management Board isn’t one of yours, it is one that is close to it.

I look as an example at these transfer payments. When your ministry gets going, I am sure it will have its own. The Institute of Public Administration of Canada got a grant of $35,000. The Ministry of Revenue, one that used to be in around your neighbourhood, had a grant for the Institute of Municipal Assessment of $5,000. Here is Treasury and Intergovernmental Affairs, which is your old ministry, of which you are an offshoot, with a grant to the Niagara Institute of $50,000. The Conference Board in Canada got a grant of $100,000.

Then there are some more under yours, for example, Canadian intergovernmental conference secretariat, $212,00; municipal liaison committee, $50,000; Bureau of Municipal Research, $25,000; Association of Municipalities of Ontario, $40,000; Association of Counties and Regions of Ontario $3,000; Rural Ontario Municipal Association, $1,000; and Northwest Ontario Municipal Association. I don’t pick entirely on your ministry. It is just an example I use these for, but it goes on ad infinitum to some ministries where I have pages and pages of groups and associations to which we give phenomenal sums of money. Maybe, as you have started to give some of your projections of how you might put together a budget over the years and are giving us some forewarning, you might give your ministries and your colleagues in those ministries and some of these associations some advance warning that the ride is over.

These associations, if they have any reason for being, should pay their own way. Some of them get very close to professional associations, profit-making associations and other ones. Possibly as one of your budget-saving devices, as you come up to it, you might suggest to them they carry their own weight. If they are not necessary, why should we be funding them for year after year after year for thousands and thousands and millions and millions of dollars?

In this same vein, on your funding and how you do it, would you get some of your --

Mr. Kerrio: How do you do it? You get a big budget, that’s how you do it. You know how you do it. You are doing it.

Mr. G. Taylor: -- sister ministries in line and tell them there will be no more transfer payments --

Mr. Kerrio: How do you do it? You borrow a bunch of money, that’s how you do it. Clean up your act.

Mr. Deputy Chairman: Order.

Mr. G. Taylor: -- they pay their own way out of their operation.

Ryerson is an example where you have another side budget for their radio station of $500,000. Surely if we are in the radio station business we should fund that out of the school that has it. McMaster is funding their radio station out of their operation, so why not Ryerson and some of these others?

Mr. Kerrio: You accept the taxpayer’s dollar -- that will solve the problem. What do you think you have, nine pockets that you take it out of? You have one pocket.

Mr. G. Taylor: Those are just some of the examples of transfer payments. If you were to look at the hidden funding in the different ministries, Mr. Minister, you might generally find some savings in your treasury and more administratively, be successful in operating that.

Mr. Kerrio: Come on. This is a terrible waste of time, Mr. Chairman. Do we have to listen to this?

Mr. G. Taylor: So I offer you some of these suggestions, Mr. Minister, so that your administration flows down through the other ministries and down through our agencies, boards and commissions. I’m suggesting these points so that your conservative policies will come out and these things will be paying their own way and not be at the trough for items they do not need any longer.

Mr. Kerrio: This is unreal.

Mr. C. Taylor: I give just a few of those examples for you, Mr. Minister --

Mr. Kerrio: Frank, did you know he would say this?

Mr. G. Taylor: -- and now I am sure the one you have all been waiting for -- I bow now and give you one little hint, though there are many more on the different votes as we come up: I hope I will be able to assist you in that great new ministry of yours --

Mr. Kerrio: Boy, with help like you, he’s got big problems.

Mr. G. Taylor: -- and the budget we have adopted for your ministry we hope you will be successful with. And we hope those projections, although they might not be entirely correct, as the member across the floor has said, will come in pretty close to that and you will have achieved success.

Mr. Kerrio: You’ll be out by $4 billion or $5 billion; that’s what you are going to be in the hole.

Hon. F. S. Miller: The comments made by my own colleague for Simcoe Centre are very pertinent. They are similar to those echoed by the member for London North from time to time, are they not?

Mr. Laughren: Does that surprise you?

Hon. F. S. Miller: No, I am talking about the member for London South (Mr. Walker), pardon me.

Mr. Nixon: You are thinking of Marvin Shore.

Hon. F. S. Miller: I am thinking of Marvin Shore, London South --

Mr. Warner: It is London. Right.

Hon. F. S Miller: -- in the sense that you are pointing out there are many agencies of government that need review.

I believe the member for London South talked about a sunset law.

Mr. Warner: Are you attacking the member for London South?

Hon. F. S. Miller: Not at all.

Hon. Mr. Walker: No, he is supporting the member.

Hon. F. S. Miller: But as a result of the member for London South’s suggestions about a sunset law and the need to look at these, as you know, under the Minister without Portfolio, a review of agencies, boards and commissions has been going on.

Mr. Peterson: Real heavyweights.

Mr. Nixon: Yes, what a person.

Hon. F. S. Miller: The interesting thing is that I don’t recall one letter ever, one telephone call ever, from any member of any party of this House suggesting I should reduce a grant to an organization in his or her riding. I never ever recall getting one.

Mr. Samis: Including the member for Simcoe Centre.

Mr. Nixon: I wonder if it was this thought process that built that new hospital in Muskoka while you were closing the one in my riding.

Mr. Johnson: Everything’s relative.

Mr. Nixon: Short memory there. The Frank Miller Memorial Hospital.

Mr. Deputy Chairman: May I remind the members that the Treasurer has the floor, please listen to him. Order, order. Can I ask the member for Scarborough-Ellesmere if he wishes to heckle to get into his own seat.

Hon. F. S. Miller: It was not in Bracebridge at all, and you know the answer to that. The point is it was not as easy to do away with things like the Niagara Institute as it is to talk about doing away with them.

Mr. Warner: Take me back to Santa’s Village.

Hon. F. S. Miller: In fact, when one starts to analyse what these agencies, boards and commissions do, many of them have a useful purpose and serve as advice givers or deliver the service for government. The only thing I can suggest is we need your co-operation when the time comes to eliminate some, which we intend to do.

Mr. Nixon: On a point of order, did the minister indicate that he’s making a grant to the Niagara Institute?

Mr. Deputy Chairman: Mr. Minister, do you wish to answer the question?

Hon. F. S. Miller: That was one of the ones. I think $50,000 a year goes to the Niagara Institute.

Mr. Cassidy: I should say, Mr. Chairman, that I was at the Niagara Institute last week.

Mr. Laughren: Next week he’s going to Santa’s Village.

Mr. Cassidy: It was in the most unusual kind of an event because I was there with the creme de la creme of corporate society from Gulf and Texaco and Imperial Oil -- I think the fellow from Inco wouldn’t identify himself -- and by the end they were almost convinced about the inevitability of socialism. If you keep the grant going for long enough, I might be able to convince them next time I go down.

Mr. Kerrio: Mike, the way you’re losing members there’s not going to be any socialism in this province. The only time I’m going to be happy is when you announce you are going.

Mr. Deputy Chairman: Order. May I point out to the member for Niagara Falls if he wishes to speak I’ll recognize him next.

Mr. Kerrio: May I speak now?

Mr. Deputy Chairman: No, you will have to come after the member for Ottawa Centre. Will you please take your seat and keep order.

Mr. Cassidy: Wherever the party to my right may be, Mr. Chairman, it was significant that when the Treasurer had to pick an example of an adventurous, thrusting, export-conscious and successful Canadian company, he just happened to pick a company which now belongs in the public sector and not in the private sector. It may be a Freudian slip, I’m not sure.

There are several things I want to say tonight about some of the steps that have been taken by the Treasurer. The first is to ask the Treasurer when on earth is he going to start looking at the need for a balanced economy in the province in Ontario and not to continue to pursue his perpetually elusive target of a balanced budget, which he has told us today will not now come until 1984? That’s a pregnant date to be chosen, Mr. Chairman. I’m sure in two years’ time or a year’s time, should this fellow still be the Treasurer of Ontario, he will be telling us again the date has been receded this time till 1987 or 1990 or God save us, the year 2000.

Mr. Warner: The only balanced budget is for Santa’s Village.

Mr. Cassidy: The second thing I want to ask the Treasurer arising out of the statement he made today is when will the Treasurer stop playing a shell game with the municipalities, with the school boards and with the municipal tax payers of the province of Ontario?

I was distressed to hear the Treasurer’s statement today, because, although I haven’t got it in front of me, I can quote almost verbatim from what the Treasurer said. He quoted a declaration by the municipal liaison committee, which I think was wrung from them at a weak moment, in which they said, “Forget about the Edmonton commitment, we accept that the revenues from grants for municipalities and school boards should increase at the same rate as the increase in provincial expenditures.” The Treasurer said, “We agree, this is now the policy of government.” Half a minute later, he told us he was going to increase by five per cent the grants to those school boards and municipalities and that was his implementation of that particular commitment. Ten seconds later be told us the overall expenditure of the province of Ontario was going to go up by six per cent. Within a minute, the Treasurer had already breached the commitment he was making in the Legislature today.

[9:15]

At least with the Edmonton commitment, it took three or four years before we realized just how far the past Treasurer was prepared to reinterpret it. This Treasurer doesn’t mince at making the move before the municipalities even know what hits them.

The third thing I want to say to the Treasurer about his statement today is that we’re very concerned about the fact that there is no real, coherent, industrial policy coming from his party and from his government. The statement that has been made today would seem to indicate they are so divided among themselves that what they’re going to do right now is put some money aside and have it available when they think they can do something which is politically advantageous.

It’s sort of an ad hoc incentives policy that the government is going to come up with. The Treasurer has said, “We won’t define it; we won’t put it into ministry programs; we won’t put it in the context of a plan; we won’t put it into the needs of regional development of Sault Ste. Marie and the northeastern part of the province, or of eastern Ontario or of the rest of Ontario. We will simply have a political industrial slush fund which will be used as occasion rises and where we think it can be used to the most political advantage for the Progressive Conservative government of the province of Ontario.”

We’ll be looking for more details about that particular plan. We don’t think you should be in the business of handing out incentives to whatever corporation has the largest begging bowl and of giving money to corporations that in many cases have been given enormous tax advantages right now without even wringing any commitments back from them in terms of what they will do for the people of the province of Ontario.

It’s notable that even under the Ontario Development Corporation this government has made promises and said great things were going to happen, and yet again and again when we looked at the record we have found out that the promises have not been achieved.

Mr. Deputy Chairman: May I point out to the member that he is really not on the vote? He’s really discussing matters which come under vote 1103 on economic policy. We’re dealing with the administration of the main office.

Mr. Cassidy: The point I want to make is that if the balanced budget is a perpetually receding target, so too is our attempt to get any coherent municipal financing policy from the ministry or our attempt to get any coherent industrial strategy in order to rebuild the economy of the province of Ontario.

Mr. Deputy Chairman: The matter of the balanced budget comes under fiscal policy, not under the administration of the main office.

Mr. Cassidy: It comes from all over, Mr. Chairman. If you were able and prepared to give the Liberal spokesman half an hour, I’m sure I can have the amount of time myself. I’m distressed to hear the Treasurer in his defence say that he’s really not quite aware what the structural problems of the economy of the province are. I really am distressed to hear that because I wish he had listened much more closely --

Hon. F. S. Miller: Where did I say that?

Mr. Cassidy: That was what you were saying earlier this evening.

Hon. F. S. Miller: You can’t even hear.

Mr. Cassidy: I’m listening very closely. I wish the Treasurer had listened very closely to the speech by the member for Nickel Belt, the excellent leadoff by our Treasury critic, and the man who, in my opinion, should be the next Treasurer of Ontario.

There are a few simple things that I would pull out of his speech. There is the fact that only 16 per cent of the exports of Canada are in the form of finished manufactured goods, whereas almost every other country of the advanced industrial countries in OECD has 50 per cent or more of its exports in the form of finished goods. That surely is tribute to the industrial structural problem we have in this economy and to the need for much more urgent action than just a few ad hoc incentives, which is all that the Treasurer seems to be prepared to offer.

I get distressed to hear the Treasurer talk about the needs of this province and this country in terms of export markets and yet be prepared, apparently, to go along with deals in Geneva which could see an entire industry, such as the textile and clothing industry, go right down the drain.

There again I’m not sure if the Treasurer is aware of the fact that here in Canada we’ve opened the doors to imports to the point where more than half the volume of textiles which is consumed in this country comes to us from abroad. That’s an enormous encouragement of imports and an enormous undermining of our particular domestic market and our domestic productivity, despite the enormous competence, ability, productivity and cost effectiveness of the Canadian industry. It compares with perhaps seven or eight per cent import penetration in the United States and figures not much different in most of the countries of Europe.

Those countries have used a number of measures, both tariff measures and quotas and other non-tariff barriers, in order to ensure that they retained a viable textile sector.

Hon. F. S. Miller: You are talking about federal matters.

Mr. Cassidy: I’m talking about matters which are important to many people in this province.

Hon. F. S. Miller: Talk about them with Ottawa.

Mr. Warner: You know better than that.

Mr. Cassidy: This province has a textile industry which is equally important to that of the province of Quebec. If the Treasurer of Ontario is not prepared to speak up for the people who work --

Mr. Laughren: That’s the problem.

Mr. Cassidy: -- in Cambridge and Galt and Hespeler and up in Cornwall and all the textile towns of this province, then I have to ask you, who will?

Hon. F. S. Miller: I have created more jobs in my lifetime than you ever will.

Mr. Cassidy: When we are in power we will do it.

Hon. F. S. Miller: I created them with my money.

Mr. Deputy Chairman: Order.

Mr. Cassidy: I just want to say though, over the good years of the 1960s and in the early 1970s, when we should have been building a base for the advanced industrial economy that we thought should exist for this province and this country, it wasn’t done. You sow the wind and reap the whirlwind. That’s what is happening in this province right now.

If the Treasurer wants we will come back in a couple of days and show the years back in the mild-1970s when the increase in jobs in this province was of the order of only 50,000 or 55,000 jobs per year, and when the problems of unemployment that we have today were created. That’s why we have such a huge level of unemployment, Mr. Chairman.

Mr. Laughren: Your friends, Frank.

Mr. Warner: The worm wriggles on the hook.

Mr. Cassidy: The Treasurer, in his free trade spirit, says, “Tariffs add to the cost of the product.”

Mr. Laughren: That’s right.

Mr. Cassidy: He indicates that he goes along with the people up in Ottawa when they say, “We’re a great exporting nation. What we have to do is open up those export markets -- ”

Hon. F. S. Miller: You twist every sentence I ever bring out. I said there are two sides to the equation.

An hon. member: That’s never bothered them.

Mr. Cassidy: Let’s look at the side that concerns Canadian workers and concerns people who are currently unemployed in this province, because that is where we put our priority.

Hon. F. S. Miller: Quote me correctly.

Mr. Cassidy: You cannot be a two-sided Treasurer; you have got to decide which side you are standing on. You have got to have a policy and there is no policy over there right now. You cannot go out and say one thing to one group and one thing to another.

You know, there is an act being repeated here, Mr. Chairman, and this is very clearly in the head office vote. The former Treasurer disagreed publicly with the former Minister of Industry and Tourism. If you think of the Ford grant, for example, and it is in Hansard, the Honourable Darcy McKeough said specifically, if he had 100 priorities in the province of Ontario, the grant to Ford would be number 99 on his list. Now we have the same act perhaps beginning all over again.

Does the new Treasurer believe in the policies of the new Minister of Industry and Tourism (Mr. Grossman), or not? Are they going to take their differences out on the public again? Is this what it is going to be? Is this government going to be two-headed and march firmly off in every direction at once?

Hon. F. S. Miller: Better than two-faced.

Mr. Laughren: Remember the Roman god Janus, Frank?

Hon. F. S. Miller: Yes, you told me about Janus. He’s your big brother; he looks backwards.

Mr. Cassidy: I want to suggest to the minister that there are enormous structural problems and that those structural problems have got to be considered when you go out into the tariff talks at Geneva and try and sit down with other countries who run their economies much more wholly than we run the economy of Ontario or of Canada.

Although we are an exporting nation, there is no way, with the current structure of our industry and with the degree of foreign ownership of our industry in this country, that we can expect the Canadian or Ontario economy to respond in the way that it is meant to respond in the textbooks of classical free trade. That is a fact, Mr. Chairman, which does not appear to be recognized by the new Treasurer of the province of Ontario.

There are enormous non-tariff barriers and enormous export restraints which we have to contend with. Often they come because of actions of head offices and parent companies, which will not permit or encourage their subsidiary in Canada to respond to any new tariff incentives or even any tax incentives which may come up within Canada. Often it is the case that the Canadian subsidiary is only a branch plant and simply does not have the wherewithal in terms of research, in terms of expertise, in terms of market knowhow to do anything except serve the domestic market.

The minister has got to come to grips with that, because until we do that we are simply going to continue to labour along with enormous trade deficits that make every other industrial country in the world look like pikers. That $11 billion manufacturing trade deficit is the biggest in the world. Thirty-five per cent of the manufactured products that are consumed in this country are imported and that is higher than any other major nation of the world. And we have enormous outflows to foreign parent companies which drain this country dry, which drain not only our power to create wealth through the resource sector, but also drain what is left or what exists of our manufacturing sector.

I want to take this general argument and apply it specifically to the automobile industry, because if the present Treasurer and his government cannot come to grips with the problem of the number one industry of the province, the automobile industry, then there is little hope for people working in other industries --

Mr. Nixon: I thought farming was the number one industry.

Mr. Cassidy: -- and there is little hope that we can develop an adequate manufacturing sector in the other major industries of the province.

Mr. Epp: What have you got against farming?

Mr. Cassidy: Farming? I have lots of good things to say about farming. The fact is that farming alone is not going to rescue the economy of this province.

Mr. Haggerty: Have you got any callouses on your hands?

Mr. Cassidy: What? Sure I have; I am a former lathe operator.

Hon. F. S. Miller: You’re a what?

Mr. Cassidy: I’m a former lathe operator; and I can read type backwards and upside down as fast as anybody in this House from my days as a proofreader at the old North Toronto Herald.

Hon. F. S. Miller: That’s why you turn things around so much.

Mr. Haggerty: That’s not what Dennis McDermott says about callouses on their hands.

Mr. Cassidy: Boy, I would be careful about that. Every one of them, every man jack of them, comes off the shop floor and that’s more than most members of the Liberal opposition in this Legislature can say.

Mr. Epp: But we are an opposition.

Mr. Kerrio: Mike, if baloney was fissionable you would be a whole power plant.

Mr. Cassidy: I want to recall for the Treasurer the words of the Premier of this province just as recently as of March, 1978, just six months ago --

Mr. Kerrio: That is uncalled for.

Mr. Cassidy: -- in a letter which he wrote to the Prime Minister and made public in order to indicate what Ontario’s position would be in relation to the auto pact. He said: “The point has to be made that we expect a fair deal and not an auction block deal in which the highest bidder wins.” How shallow or hollow those words seem after what happened over the course of the summer.

He said: “Ontario’s view is quite clear in this matter. This is a Canadian market. The federal government made a pact with the companies and the US government. The companies have received millions of dollars in rebates on import duties as part of that arrangement and we expect that in return for their dominant share of sales in our market we have a fair share of the investment in jobs in the North American industry.”

Today, we’ve had the Reisman report which we’ve all been waiting for for the last six months since it was commissioned by the federal government. I suppose we should have realized that if you put an apostle of free trade and the architect of the auto free trade agreement to pass judgement on the free trade agreement, he’s going to come and say: “Really, it was all right and the critics are all wrong.” I suppose we should have expected it because that’s precisely what has happened and that’s precisely what we’ve got from Simon Reisman.

Mr. Nixon: Do you mean he doesn’t agree with you?

Mr. Cassidy: It’s a very disappointing report. I would like the Treasurer to make the commitment tonight in response to what I’m saying here that the Ontario government will at once part company with the Reisman report and will indicate absolutely and unequivocally that Ontario opposes the whole tenor of the Reisman report because of its failure to insist on a fair share concept in terms of the automobile industry in Ontario and in Canada.

The only good thing about the report is that at least it recognizes that the parts sector demands immediate attention. What it fails to do, though, is to recognize that we have any bargaining power at all in Canada in order to get a fair share and get it now. It beats me that people in both this government and the federal government haven’t been prepared to see that.

After all, in 1964 our bargaining position was no different than it is today. We went and sat down with the Americans and said, “This industry has got to change because we’re not getting a fair share now. We propose that the Americans enter into the free trade agreement.” That was a radical change in system which for them at that time was working very well.

We had the carrot to offer at that time of a very large market for North American automobiles. We have that attraction today. We had the stick, ultimately, at that time that if nothing else happened we would be prepared to go it alone. The fact is, that our bargaining position is no different today than it was then, and it’s about time that we used that because we are the largest market outside the United States for the American car manufacturers.

Rather than advocate a tough stand on Canada’s part what has happened is that Mr. Reisman has said: “I’m going to sell the store. We haven’t got a bargaining position and we may just simply give up before we begin.”

[9:30]

We’ve offered a few things that maybe the minister will look at in terms of the independent parts producers, but he has not come to grips with the fundamental problems of the domination of the oligopolistic American big four car producers and the effect that they have on the economy of the province of Ontario.

It seems to me that this report will very quickly become a major stumbling block if Ontario still intends to pursue the policy which the Premier outlined in the spring and had outlined before of pursuing a fair share for Ontario and for Canada in the automobile industry.

Mr. Laughren: They will probably reverse their position on that too.

Mr. Cassidy: If I can be specific, Mr. Chairman, I will quote what the government of Ontario itself said in the Treasury’s paper on this industry back in the spring. The government says that in 1976 Canada fell short of a fair share by 25,000 jobs, $866 million in investment, and by at least $200 million in research and development. That ain’t hay. That’s an enormous loss in terms of the industry, of jobs, spin-off, entrepreneurship -- whatever head you want to look at it on, Mr. Chairman, that’s an enormous loss as far as Ontario is concerned and as far as Canada is concerned.

We simply want to see Ontario pick up from the approach that was taken back in the spring, not by throwing incentives down every corporate pot that happens to open up, but by beginning to insist, both with the federal government and with the automobile manufacturers themselves, that we get a fair share and that we start to get it now.

I want to tell you, Mr. Chairman, that the report of the Reisman commission isn’t all bad. Some of the analysis is in fact quite to the point. The question is, why the devil isn’t anybody doing anything about it?

For example the report states, if I can find the quotation here, that “almost all of actual or perceived problems for Canada in this sector flow from the compelling fact of a large and persistent sectoral balance of payments deficit; the absence from Canada of any significant decision-making or other head office functions; the lack of significant design, research or development activity” -- this is the largest industry in the province, remember -- “a weak machinery and equipment support industry; a constant danger of inadequate investment; and an inadequate share of employment, both qualitatively and quantitatively, as well as products that are not quite suited to the country, the climate and the geography.”

That’s a hell of an indictment, Mr. Chairman. Most of that industry is located in this province. it has been here for 75 years. It’s been here for 13 years under the automobile free trade agreement and yet in research, in head office functions, in decision-making, and in balance of payments, machinery, equipment and investments, in the kind of employment that we have here and in the product as well, the Reisman report measured the automobile industry and found it wanting.

Mr. Kerrio: We could be exporting to the United States. Did you know that?

Mr. Cassidy: Now unfortunately their prescriptions don’t match their analysis, but I want to tell you, Mr. Chairman, that if this government was prepared to take action in a number of the sectors that affect the automobile industry, we would very quickly begin to see what can only be described as an economic renaissance within Ontario. If it happens within this province, which is the industrial heartland of the country, it is going to happen within Canada as a whole.

The Treasurer last spring suggested that there was a $200 million shortfall in our spending on research. The Reisman report suggested that that is about $300 million. It estimates that the big four spent within Canada the magnificent sum of $2 million a year on research and development -- and that’s it; nothing more. A further $6 million was spent by the independent parts manufacturers in terms of parts and technology research and development. That compares with well over $3 billion which the Reisman report estimates is spent on research and development in North America, that is within United States, by the automobile industry.

I have to ask you, what kind of fair share is that? What kind of guarantee is that that we are going to get any kind of fair share in future activities, or that we are going to get our share of the new investment which is required because of technological changes that are occurring within the automobile industry?

The fact is that everybody’s analysis about what is happening with the industry coincides whether it’s Reisman, whether it’s this government, whether it’s the sectoral paper that was published the other day in relation to the first minister’s conference and which was put together by the unions and by representatives of the companies that are active within the industry. They recognize the enormous investment that is taking place now, $60 billion or so over eight years. They recognize the shortfalls here in Canada. They recognize the fact that the industry is not doing its share in Canada. When you come to prescriptions, everyone seems to shut up.

Mr. Laughren: They’re chicken.

Mr. Cassidy: If they don’t shut up, they come up with a series of recommendations which can only be described as more of the hair of the dog. It’s like somebody waking up in the morning and returning to the bottle in order to overcome the hangover we have been accumulating in this industry over the course of the last 13 years -- or over the course of the last 75 years.

Mr. Kendo: I’ll drink to that.

Mr. Cassidy: That’s what is happening. That is really what is happening.

Some recommendations of the Reisman report of course, are worth pursuing, like the fact that we should be monitoring what is happening with the automobile pact and know what the facts are. We should have an annual review. It’s a scandal that while Congress has had a detailed report every year about the United States’ interests in the automobile free trade agreement, we have had nothing of the kind here in Canada.

Mr. Kerrio: How come they haven’t got a socialist party down there?

Mr. Cassidy: Mr. Reisman says he wonders why nobody has altered the pact over 13 years. The reason is that this government hasn’t been screaming from the roof-tops and saying to the companies and to the federal government: “We want changes for the advantage of Ontario and for the advantage of Canada.” The reason is that the federal Liberal Party has been so proud of its creation that it was not prepared to see the fundamental problems and come to grips with them and start to get changes.

Here we get the architect of the pact saying everything is rosy, that there is no particular problem. Yet he admits the industry is still a satellite industry. He admits that many Canadian producers are precluded from competing with their parents for export markets when the same parts are made in both countries. He admits that the Canadian subsidiary firms are limited in terms of productivity and cost advantages because they are shut out of export markets and therefore cannot get the advantages of scale, specialization and of large volume. He has the effrontery to suggest that the idea of a balance of trade which is even, so that the value added in Canada equals the value of consumption in Canada, or equals our exports, may be a useful guidepost but may well have nothing to recommend it in terms of theory or of logic.

In our opinion, it has a great deal to recommend it. It’s scandalous that we have a deficit overall of $1 billion, that we have a deficit in the parts sector of $3 billion, that this has gone on year after year, and that government stands aside, having created the pact, and does nothing at all to try to fix it.

We have a number of suggestions. We think Ontario should start by saying, “We reject this report. The whole approach is flawed. The whole approach is faulty.”

It’s wrong to pretend there are no problems at all. It is wrong to simply come along with a bit of financing for the parts manufacturers, with tax expenditures which may go as high as 100 per cent of the cost of development in certain areas of the industry, without any frontal assault on the big four manufacturers to get them to act genuinely Canadian rather than continuing to act as colonial, monopolistic, capitalistic corporations. They are getting what they want out of Canada, they are getting higher rates of profit in Canada than they get in their own home countries, and they are never, ever made to act responsibly towards this country which has been so generous in terms of their particular needs.

We’ve got powers in this country. We have powers of persuasion, to begin with. We have powers that go beyond that as well. Ontario can suggest and can work out with the federal government tax policies on research and development in order to ensure that the same proportion of sales which is spent on research and development by the big four in the United States is spent up here in Canada. That single move would, over the course of a very few years bring something like $200 million of research and development activity into Canada if we were to get a fair share. Ontario has got the power to start insisting, with the federal government, that in the parts sector we move very quickly towards a fair-share contract. That may mean equality, or that may mean something short of equality if we take account of some of the assembly operations. We have the power to insist on that and I think that it is ours by right. It shouldn’t be something for which we have to shell out the kinds of funds the government has been trying to shell out in the past.

Ontario has got the power to insist the big four manufacturers start to get back into the apprenticeship and skill training game in a big way rather than relying on small companies to train their people for them. It is scandalous that already down in Windsor, Ford is beginning to raid Chrysler for toolmakers and other skilled trades, rather than having a training program in order to ensure those people are trained and ready when their new engine plant is open.

We have the power to insist the companies upgrade the skill requirements of their production here, because right now, close to three-quarters of the labour force in the automobile industry is unskilled compared with barely half in the United States. In other words, the head office has kept the best jobs down there and left us to bolt the bolts and screw tight the nuts and do the unskilled jobs.

We have the power here to seek further openings for parts sales in the United States, Mr. Chairman, in order to get a decent balance. We have the power to take the one or two good things in that particular report and ensure that they are done.

Is the Treasurer prepared to commit the province of Ontario to act vigorously in defence of the workers of this province, in defence of the workers of Canada, in defence of a strong automobile industry which will no longer be a drain on the balance of payments to this country and which begins to contribute both in terms of trade, in terms of import substitution and in terms of skills? Is that commitment going to come tonight?

Because if it is not going to come tonight, then I question what the devil is ever going to happen with the textile industry or the machinery industry or the electrical industry or other industries. In these industries we are also suffering major deficits in terms of our balance of trade, major deficits in terms of markets in Canada that we should be supplying ourselves, but in which we are depending on other countries to supply for us.

The fact is, Mr. Chairman, that until we get to the point of having a strong and healthy industrial economy we are not going to pay our way in terms of balancing the economy or balancing the budget. We cannot sit by, as the member for Nickel Belt said the other day, and just simply muse while our economic council estimates that by the turn of the century 13 or 14 per cent of the labour force would be all that are occupied in the manufacturing sector. You cannot sit idly by and pretend this province will survive in the future on the basis of no resources left in the north, no resources left in the forest, and everybody taking in everybody else’s laundry while we depend on the rest of the world for the manufactured goods, which are still the vital and central engine of the economy of this province and will continue to be so for many decades to come.

Hon. F. S. Miller: If somehow the engine that fuels the rhetoric of the leader of the NDP could be harnessed in our industry, we would have no problems at all.

Mr. Laughren: That’s a cheap shot. Do you want us to talk about your rhetoric next?

Hon. F. S. Miller: I don’t have rhetoric. We engineers don’t deal in rhetoric too much.

Mr. Kerrio: Overdesign is your fault.

Hon. F. S. Miller: It is always fair for you fellows to call me all kinds of names, is it not? If I make even the slightest comment all the skins over there start to bleed.

Mr. Laughren: Goes with power, Frank; there is a difference, you know.

Hon. F. S. Miller: Right, and I don’t very often let it worry me, as I am sure you know. However, I would just point out to you that really I find the kinds of arguments put forward tonight easier to deal with than the kinds that come from the Liberal Party. I always have, because I have been able to reject them totally in my own mind as absolutely, totally unrealistic.

Mr. Cassidy: You outdo our own Premier now.

[9:45]

Hon. F. S. Miller: I remember the old song “Wishing Won’t Make It So.” The members opposite can phrase all their great ideals, they can intellectualize them and they can say these things should happen because they want them to happen. People should be the way they think they should be, but they aren’t; that is why all of the socialist ideals, no matter how sensible they may sound to you who are well educated, skilled and full of rhetoric, just don’t work when you get out in the real world.

Mr. Laughren: Tell us about rhetoric, Frank.

Hon. F. S. Miller: You have a simplistic belief in the power of the state to plan: but it doesn’t work and it hasn’t worked. Show me a place in the whole world where a socialist government really has achieved the standard of living Ontario and Canada and the United States enjoy today.

Mr. Cassidy: For goodness sakes, have you ever heard of Sweden up in Muskoka?

Hon. F. S. Miller: For all the imperfections that we have in the capitalistic system, we are better off in this North American nation, where we do believe in free enterprise and profits, than they have ever been in any of the nations that try to espouse the theories you talk about tonight. They just don’t work. They never have worked and they never will work.

Mr. Deans: Nonsense, nonsense.

Mr. Cassidy: I don’t think you listened to a word I said.

Hon. F. S. Miller: Of all the people in the world who have not learned by the scientific process, you lead the pack. If you were sitting in a chemical lab you would have rejected your hypothesis long ago because the results don’t conform to the theories you have put into it, but when it comes to, economic philosophy, year after year after year you repeat the same dogma, the same mistakes, and multiply and keep on multiplying the horrendous errors.

Mr. Cassidy: When they said you were an unreconstructed Conservative, they were right.

Hon. F. S. Miller: Look at the countries of Europe. You talk about us as if we are the only nation in the world with a problem of a trade deficit and as if somehow it was because of the system we live in.

I visited the Socialist Republic of Yugoslavia, the same size and population as Canada -- 20 odd million. A federated republic of six states and three provinces, I think -- I think they have six --

Mr. Cassidy: Tell us about West Germany. They have a socialist government.

Hon. F. S. Miller: -- two alphabets.

Mr. Cassidy: Tell us about West Germany, they have a socialist government.

Hon. F. S. Miller: West Germany? Socialist -- quote? They use the term “socialist,” but I tell you when it comes down to their daily dealings they are as right-wing, free enterprise as any group I have ever seen.

Interjection.

Hon. F. S. Miller: And look at East Germany where in fact that has been rejected with exactly the same people. So you can’t talk about a generic difference or an ethnic difference or anything else, you can only talk about an ideological difference, and the evidence is like night and day.

Mr. Peterson: What about Poland?

Hon. F. S. Miller: The evidence simply totally rejects your philosophies.

An hon. member: Tell it the way it is, Frank.

Hon. F. S. Miller: I am always intrigued when you tell us to do a little planning and then when we do something that works you come back and say we shouldn’t do it.

Mr. Cassidy: I’ll take Helmut Schmidt and West Germany. You can have East Germany -- whoever is in power there.

Hon. F. S. Miller: I am just simply saying they apply socialist dogma and it doesn’t work.

Mr. Deans: It does; you apply it and it works. When you apply it it works, that’s the trouble.

Mr. Kerrio: Two of the greatest societies in the world have gone down the pipe.

Mr. Deans: Everything that has been a success in this province has been socialist, everything.

Mr. Warner: And you are against it when it is --

Mr. Chairman: Order.

Mr. Deans: Talk about the things that have worked.

Mr. Kerrio: Socialists are on their way out and you know it. That’s why you’re getting out of it. The only time we will be happy is when we see the last one go out that door.

Mr. Deans: I hear squeaks from the right; tell us about your programs, when you can only give money to somebody.

Mr. Chairman: Order. Order. Mr. Minister, do you have any further comments?

Mr. Kerrio: The minister hasn’t said a word. It’s the guy over there that is doing all the hollering.

Hon. F. S. Miller: I wonder if these gentlemen would tolerate such discussions in a classroom.

Mr. Chairman: Order.

Mr. Deans: It is easy to be smug.

Hon. F. S. Miller: Smug? We’re right. When you’re right you’re not smug.

Mr. Deans: You are so far right you can’t be found. Your trouble is you don’t know where you stand.

Mr. Chairman: Order.

Hon. F. S. Miller: Ah, my friend, I do know where I stand. I have known where I --

Mr. Chairman: Order.

Mr. Deans: Don’t break the gavel. You will break the gavel, it is old.

Mr. Chairman: Order, I’ll be leaving in a few minutes.

Hon. F. S. Miller: Ian, let us part friends.

We have got to part friends.

Mr. Deans: Are you leaving again? You haven’t lasted for any length of time for anything you have done.

Mr. Kerrio: What do we care how he goes, as long as he goes?

Mr. Chairman: Order.

Hon. F. S. Miller: That’s true, Ian, because I keep on being promoted.

Mr. Deans: Can you call taking over from Darcy a promotion?

Hon. F. S. Miller: Yes, I do. As a matter of fact, I think he is one of the finest gentlemen who was ever in this place.

Mr. Deans: Now that he is gone, but remember what you used to say about him.

Hon. F. S. Miller: No, I have always thought that. He is one of the idols I have had and younger though he may be, I think he is one of the greatest men who was ever in this House and he has done more for this province than any of us that I know, except the Premier.

Mr. Deans: Why didn’t you support his endeavours?

Hon. F. S. Miller: I am just delighted to have the opportunity to follow him.

Mr. Kerrio: Ian is going to do more because he is leaving.

Hon. F. S. Miller: Well, Mr. Chairman, after all that argument, the leader of the NDP then tums around and tells me that we shouldn’t help Ford and he talks about “some special tax advantages” as if by saying there are special tax advantages, in fact there are.

That is one of the nice techniques you use. You state something that is totally wrong and repeat it and repeat it until people start to believe you.

Mr. Williams: He even starts to believe it.

Mr. Haggerty: He doesn’t believe it himself.

Hon. F. S. Miller: What special corporate tax advantages are you talking about? You talked about tax advantages very early in your comments tonight; name them.

Mr. Laughren: Do you want me to list the ones Inco has?

Hon. F. S. Miller: We’re talking about the industrial corporate tax advantages your leader said we’re using to lure people here. You’re implying that we are having an internecine war in Canada for business. We’re not, there’s no such thing. In fact, Canada wasn’t willing to stand up for this province and for the people who needed jobs in this province --

Mr. Cassidy: You should talk to your counterparts in Quebec about that.

Hon. F. S. Miller: -- in southwestern Ontario where you can’t say we did it because they were Tories, and you can’t say we did it because we had our own people down there. We did it because the people of Windsor deserved jobs. We helped out that area at that time. Let me tell you when you went down to Chatham and tried to convince the UAW members in the International Harvester plant in Chatham that we shouldn’t have done it, they didn’t listen to you.

Mr. Warner: You didn’t have the sense to demand equity.

Hon. F. S. Miller: They knew darn well that jobs were more important than the rhetoric you fed them. My friend, you don’t eat rhetoric; you eat food earned on the job; they understood that

Mr. Warner: You didn’t have the sense to demand equity.

Mr. Deans: Where does it end?

Hon. F. S. Miller: Equity?

Mr. Warner: Yes.

Hon. F. S. Miller: Equity, my friend --

Mr. Haggerty: He doesn’t want the 6,000 jobs down in Windsor.

Mr. Kerrio: We’ll take them.

Mr. Warner: No, no; you put out $28 million and where is your return?

Hon. F. S. Miller: I understand I’m getting some support for those moves from the members of the Windsor area. I think they’d agree that we showed a little more statesmanship than we’re often given credit for.

Mr. Deans: But where does it end?

Hon. F. S. Miller: We knew that was the logical geographic area.

Mr. B. Newman: That’s right. That’s why they selected Windsor.

Hon. F. S. Miller: We decided, regardless of the politics of the matter, those people there were Ontario citizens being represented by this government and they deserved the assistance.

Mr. Warner: Why didn’t you demand some stock in return?

Mr. Deans: What are the long-term costs in that kind of a program?

Mr. Warner: You kow-towed to the Ford Motor Company. You knuckled under so easily.

Hon. F. S. Miller: My friend, the long-term costs are all in the black, because those companies tell me they will hire 2,500 employees or thereabouts.

Mr. Deans: Do they ever tell you when they are going to lay them off?

Hon. F. S. Miller: My friend, nothing in this world is certain. I cannot guarantee you anything. Your job and my job, where we can defend --

Mr. Chairman: Order. Would the hon. minister reply only to the questions and comments made by the member for Ottawa Centre.

Hon. F. S. Miller: Shall I ignore the interjections by the other members? All right, I will ignore the interjections by the members even though they are at times just a touch --

Mr. Warner: Careful.

Hon. F. S. Miller: -- provocative.

Mr. Warner: That’s better.

Hon. F. S. Miller: Let me get on to one thing that we might agree on. You talk about the Reisman report. I have to qualify my remarks by saying I have not had the opportunity you have had to read it yet. I have heard a synopsis which fits in very much with what you said tonight. If you’ll leave me the right and my government the right to study the report a little more fully between now and Monday, I can safely say to you that we agree with much of what you said about it tonight. We would agree that Ontario must continue -- not start -- to stick up for better parts manufacturing in Canada. We know that’s where there are higher technology jobs to be obtained.

We know currently we have a $3.5 billion or $3.2 billion parts deficit and perhaps a $2.1 billion assembly surplus in Canada. We want those parts jobs. If it’s structured the way I understand it is, we think the report has ignored the parts production groups and that they do deserve better. Our ministry has done several papers -- and I’m sure you’re aware of them -- on that topic.

We have been hitting Ottawa for three years on the importance of doing that. Again I’d only say to you the things we’re talking about obviously are more properly applied in the federal scene. On that basis, I suspect you’ll find Ontario on Monday, Tuesday and Wednesday will be selling the message you just said you believe it should. I think you’ll find we will be doing just that because we do see eye to eye on that one particular matter.

Mr. B. Newman: Mr. Chairman, I wanted to clear a point with the minister. The minister made mention that he saw that the Ford Motor Company selected Windsor. You didn’t select Windsor, the Ford Motor Company selected the location for the plant.

Hon. F. S. Miller: At no point did I try to say we did. I said it was the logical area for the plant.

Mr. B. Newman: You’re right in that. When I discussed this with the Minister of Intergovernmental Affairs (Mr. Wells) I pointed out it was a business deal. They found out it was far more practical that it be located in the Windsor area where they would have to ship the results of their labours in the Windsor plant only 15 miles across the river to Dearborn and other assembly plants over there. It was only natural and it was only logical, if it was going to select a location for the big expansion that Ford Motor Company contemplated, that Windsor was the logical area in which to locate that plant.

Mr. Laughren: I listened to the Treasurer respond to my leader --

Mr. Kerrio: This man has spoken; what goes here? This is a ridiculous debate.

Mr. Laughren: -- and I continue to be concerned about the fact that the Treasurer doesn’t respond to any of the arguments we make to him. He simply responds in a rhetorical fashion, heaping abuse on the ideas we’re suggesting to him, as though they were invalid.

I’d like to point out to the Treasurer some things about the auto pact and what’s happened to it and some of the views that have already been expressed by his party. He’s not doing himself or his government any service with the attitude he’s demonstrated so far.

I’d like to go back a little bit to March 21 and read in total the letter which the Premier sent to the Prime Minister in March of this year. He said: “I am concerned at the slow progress you and we seem to be making with the major automobile companies in gaining a fair share of jobs and investment in Canada. It appears that Canadians are being asked to provide subsidies and special financial assistance for this industry.

“I would suggest that the point has to be made that we expect a fair deal, and not an auction block deal in which the highest bidder wins. I am most concerned that the spirit of the auto pact is being eroded by the use of unfair cost comparisons, with fire sale tax deals and capital grants offered by many states in the US.

“My view is quite clear on this matter. The federal government made a pact with the companies and the US government. The companies have received millions of dollars in rebates on import duties as part of that arrangement and we expect that in return for their dominant share of sales in our market we have a fair share of the investment in jobs in the North American industry.” That is signed William C. Davis.

I’d like to know how the Treasurer gets the gall to stand here in the Legislature and tell us that we are being silly and that we don’t understand the problems out there when we oppose that kind of giveaway, when in March his Premier was saying the very same thing, objecting to the federal government that we would get into that kind of game where we sell out to the highest bidder or that they go to a location which is the highest bidder.

Once again, the Treasurer is revealing the contradictions on that side of the House. I have yet to see a major economic policy in which there’s any sense of consistency at all on that side of the chamber. It doesn’t seem to matter what the issue is. You’ve got two views. You thought perhaps I was being funny when I talked about the Roman god Janus. But you tell me how that letter from the Premier to the Prime Minister fits with what you’ve done in the auto industry. You’ve done it without extracting a single guarantee from the auto industry.

You have not said to the auto industry that in order to get this $68 million -- in our case the $28 million -- they must do their fair share of research and development here. You haven’t said we must get our fair share of skilled employment. You haven’t said that out of the almost $60 billion that is going to be spent in North America between now and 1985, we’ve got to get our fair share of that You haven’t said any of those things. You’ve just handed it over to them.

Tell me how that fits in with the Premier’s letter to the Prime Minister back in March. You have contradicted the principles he outlined in that letter. You have the nerve to stand up and say we don’t understand the problem. I’ll tell you who doesn’t understand the problem. You don’t understand the problem and you don’t even understand what your Premier is saying. You’re being forced to go back on the commitments you yourselves have made. There doesn’t seem to be any end to the contradictions over there.

[10:00]

Let me remind you of some of the problems with the auto pact and then tell me we’re getting a fair share, then tell me you don’t have the muscle to do anything about it. It is very distressing to hear the Treasurer of the most industrialized province in Canada say that he is impotent --

Hon. F. S. Miller: How did you find out?

Mr. Nixon: Gets around you know. Anyone who drives a yellow Corvette has got problems.

Mr. Laughren: -- when it comes to dealing with either the federal government or dealing with international trade. That is exactly what you are saying.

Mr. Warner: Pitiful.

Mr. Laughren: Let me remind the Treasurer that we are not getting our fair share in almost any category you want to talk about.

Let’s talk about sales. When it comes to sales in the North American market, Canada has about nine per cent of the total vehicle sales. That’s the best benchmark from which to start: the sales in North America -- nine per cent we have.

Mr. B. Newman: When?

Mr. Laughren: Roughly, that is our percentage of sales in the North American auto industry.

Mr. B. Newman: In 1975 it was 11 per cent.

Mr. Laughren: I am even being generous and giving them the benefit of the doubt by saying we get nine per cent. I am using a figure the Treasurer certainly cannot argue with. Between now and 1985 there is going to be about $60 billion of investment in North America, as we tool down, as we switch over to more plastics and the lighter products to fit in with the requirements on higher gas mileage. The capital spending that would mean for us, if we were to get our share of that $60 billion, would work out to about $650 million a year, that would be our share of the new capital investment.

I don’t see the Treasurer saying we have a right to that proportion. He is strangely silent on that. When it comes to capital spending, in 1967 Canada had 26 per cent of the capital spending in assembly. In 1973 that had dropped to 5.4 per cent. In the parts industry we had 11.8 per cent in 1967; it has dropped to 7.6 per cent in 1973 -- the latest figures I could get. That is one measurement of fair share which we are not getting.

Talking about investment as a percentage of North American investment, in 1966 we had nine per cent, in 1976 we had 6.6 per cent. So there is another case where we are not getting our fair share.

Let’s talk about return on investment, return on capital. That is an area the Treasurer would like. Being an avowed free enterpriser and worshipping at the altar of capitalism, he understands what we mean when we talk about return on capital. That is what the investor is going to look at, the return he is going to get. Between 1971 and 1975 -- the latest figures I could get -- GM received 11.1 per cent return on their investment in Canada, 8.9 in the U.S.; Ford 12.7 per cent in Canada, 5.1 per cent in the US; Chrysler 6.2 per cent in Canada, 3.3 in the US; American Motors 8.2 per cent in Canada, 6.5 per cent in the US.

In that period of time there was a total of $1.2 billion in profits earned in Canada, and that was 10 per cent of the total global profits of the big industries.

Mr. Kerrio: Why aren’t they investing here then?

Mr. Laughren: That’s right, because there is foreign ownership of our industry and we are not getting our fair share.

Mr. Kerrio: I thought you said the name of the game is profit?

Mr. Laughren: That is a good question. We are not getting our fair share. Let me tell you what I would do --

Mr. Deputy Chairman: I wonder if the member could indicate how this relates to the vote we are now on.

Mr. Laughren: I am talking about the policies that flow from head office --

Mr. Deputy Chairman: We are talking only about head office administration, not the policies.

Mr. Laughren: Let me just wrap it up then, Mr. Chairman. Besides, Mr. Chairman, surely you would appreciate the historical precedent in this chamber, in which on the head office vote there has been a fairly wide-ranging debate, particularly when a major document is brought out that same day. I am sure you would agree with that.

One of the members questioned where the profits go. Between 1965 and 1974, $550 million went out of here in dividends. I would ask the Treasurer if he thinks we are getting our fair share in any of the major components under the auto pact.

Perhaps he could tell me. Is it research and development? Is it capital investment? Is it employment? Is it the distribution of the employment that we already have, in terms of skills versus the unskilled? Where are we getting our fair share?

If we’re not getting our fair share -- which the Treasurer surely will have to admit, I suspect he will -- if we are not getting our fair share does he think we should get our fair share? Does he agree with the Premier, who said back in March that we should get our fair share without having to buy it? Why do we have to buy that to which we are entitled in the first place?

Mr. Nixon: Seize it.

Mr. Laughren: Perhaps the Treasurer could tell us why he thinks that. Perhaps he could tell us the representation he’s made to the federal government. I don’t think he’s made any.

When I see what is at stake for us in Ontario and I see the silent response of the Treasurer, I know that he’s simply not doing his job.

I said to the Treasurer the other night that we are concerned about the Treasurer’s leadership, we are concerned about the Treasurer’s courage, and we are concerned about the Treasurer’s competence in economic matters. This is an exact example --

Hon. F. S. Miller: That’s CLC.

Mr. Laughren: -- a good example of where we find the Treasurer lacking because he has not done his job in fighting with Ottawa to ensure we get our fair share.

If he wants to go into the other argument about the oil price increase, he has done even less there, if that’s possible. The Treasurer has a responsibility to Ontario. I don’t want to hear him talking about federalism and being a Canadian. I heard the Treasurer talk about Alberta, complaining about Alberta enticing oil companies to move there, and in the next breath he’s talking about how great it is to entice the auto companies to build here.

Hon. F. S. Miller: But not from Alberta.

Mr. Laughren: Let me tell the Treasurer he is once again talking out of both sides of his mouth.

Hon. F. S. Miller: No, I am not.

Mr. Laughren: And that is being kind.

Hon. F. 5 Miller: Mr. Chairman, he is alleging that I am not speaking truthfully.

Mr. Kerrio: Pale face talks with forked tongue.

Hon. F. S. Miller: I point out that there is a big difference between winning jobs from the Americans and winning jobs from fellow Canadians.

Mr. Laughren: Is that what you’re saying then, that this is what you’re into? Is the Treasurer telling us that he is prepared to open up his purse strings to compete with any jurisdiction? To be prepared to compete with Alabama and Georgia? Is that what you’re telling us? But that you will not compete with the other jurisdictions in this country?

Hon. F. S. Miller: I won’t compete.

Mr. Laughren: Perhaps you could enlarge on that; because I’d like very much to hear what your philosophy is, what your role is in Confederation in terms of protecting the Ontario consumer.

Ms. Gigantes: Yes, let’s hear it.

Mr. Laughren: Are you saying that we don’t have to compete with Alberta when it comes to keeping the price of oil down in Ontario, even though we consume over 50 per cent of the oil in Canada? Is that what you’re telling me? I would be very interested in knowing whether or not you think that Ontario has a role to play in competing in Canada, and the role you have to play in competing with the other jurisdictions outside this country, and at what point do you say I have a responsibility to the Ontario consumer.

That’s not just on the oil price. Look at the automobile. Are you aware of the price differential between automobiles here and in the United States? I never hear you talking about it. I never hear you saying to the auto industry: “Look, there’s a price differential which benefits the industry and we have to protect the consumer in that regard as well.” Oh no; you’re not protecting the Ontario consumer on the price of oil and gas, you’re not protecting the Ontario consumer when it comes to the price of automobiles either.

I’d like to know at what point you get down out of your statesman’s chair, get down there on the ground and mix it up with other people who are putting you to shame; whether it’s the American negotiators on the auto pact, whether it’s Alberta on the oil and gas, or whether it’s Japan and the other countries on the GATT negotiations. I’d like to know where you stand on those matters, because it seems to me that the consumer in Ontario is getting short shrift from its Treasurer.

Ms. Gigantes: What about Candu sales?

Interjections.

Mr. Warner: There is no answer.

Mr. Kerrio: Mr. Chairman, I would like to participate in this particular aspect of these estimates, as it relates to something that is very important to me, and I hope I might impress the member in charge of our fiscal purse with this kind of involvement. I talked during the estimates of the Premier (Mr. Davis) and tried to impress on him the need for what I consider the most significant thing if we are ever to put this provincial budget on any kind of a sensible plane -- and I’m talking about priorities.

Ms. Peterson: Couldn’t get through to the Premier so we are going to the top.

Mr. Kerrio: I have to consider these matters, having talked with some of these people, as they relate to my responsibility within my caucus. There is a government in the west -- set up by a Conservative, coincidentally, in the person of Sterling Lyon -- which is going to hold their involvement in their current year to a 2.9 per cent increase.

Mr. Haggerty: That’s a Conservative.

Mr. Ziemba: How many Liberals are there out west?

Mr. Ashe: Same number as there are NDP, one.

Mr. Kerrio: He is going to do it by the expedient method of a priority situation. By priorities I mean that those ministries that are not so vital to the well-being of the province are not only not going to get any kind of an increase in their budget, but in fact they are going to get a decrease.

Mr. Minister, if ever we are to approach a balanced budget, which doesn’t seem to be important to some people; particularly those on my left, who have never had to be responsible in any way fiscally --

Mr. Warner: Nonsense.

Mr. Kerrio: -- who are takers and not givers and who find it very easy to talk about deficit budgeting forever because they have never been subject to the final responsibilities of meeting the payments.

Mr. Warner: Utter nonsense, tell us about Saskatchewan. Healthiest province in Canada. You turkey.

Mr. Kerrio: The man who is making all the noise right now, the only significant thing he has ever given to this Legislature is a shout across the floor for someone to resign. I think if he goes out of this Legislature and that’s his claim to fame, it will be probably one of the most significant things some of the socialists have ever given this great, august body.

Mr. Peterson: Hear, hear; he is the best of a rotten bunch.

Mr. Kerrio: So I think we could well ignore those kinds of interjections because they will never mean a thing to the prosperity of this great province of ours.

Mr. Minister, if I may carry on in this vein --

Mr. Warner: You carry on.

Mr. Kerrio: -- and I say this with respect, because I have respect for you, sir.

Mr. Warner: Of course, you’re a Tory.

Mr. Kerrie: You have come out of other ministries and you have attempted to do a job.

Mr. Warner: You’ve always been a Tory.

Mr. Kerrio: I suggest to you that the only way that we will, in future, balance the budget, will be by a real commitment to priorities.

Mr. Warner: You are a wolf in wolf’s clothing.

Mr. Williams: Tell him to resign, David.

Mr. Kerrio: When I suggest to you that priorities are important, I mean the significant things. When we talk about our relationship to the social benefits of those less able to produce for themselves, that’s one thing; but when we talk about those people -- and let me tell you that I am really disappointed in many members on that side who bring into play the significance of what the feds are doing --

Mr. Makarchuk: Which side?

Mr. Kerrio: -- I have to tell you that in my own mind what is happening on the federal scene is happening here in direct proportion to the population and the moneys we handle in the province of Ontario.

Mr. Makarchuk: What the hell does that mean?

Mr. Kerrio: It is much related. The deficits are proportionate; the increase in those people in the civil service; the increase in the takers over the people who put into the public purse; all those things are very significantly the same.

Mr. Turner: Who told you that.

Mr. Kerrio: I am very disappointed that some of the high profile ministers on that side take it on themselves to hide behind the skirts of those people down in Ottawa.

I have to tell you that’s exactly what they do. There is no significant difference. If you look at the relationship between the budget for the Dominion of Canada as it relates to deficits and you look at the budget of the province of Ontario, percentage-wise they are so close to the same thing that it isn’t even funny.

Hon. F. S. Miller: Check your facts.

[10:15]

Mr. Kerrio: So I say to you with respect, unless we set petty politics aside, unless we are willing to address ourselves to the problems that confront us, we shall never defeat the things that are causing us the kind of deficit budgeting that continues to go on year after year.

Mr. Peterson: It’s Rendall Dick’s fault.

Mr. Kerrio: There have been some suggestions as they relate to the auto pact and jobs here in our jurisdiction. Having sat on the select committee on Ontario Hydro and watched the function of this government as it relates to its commitment to look after the best interests of the people of Ontario, I must say that while it talks about doing things it certainly doesn’t put the kind of pressure that should be put on the federal government. The Treasurer is in the same position as it relates to the auto pact and the differential we are suffering from in this country today, and in this province particularly.

Isn’t it strange that a country the size of Sweden can design and market in its own country --

Mr. Makarchuk: Is that a socialist country?

Mr. Warner: It’s a socialist country.

Mr. Kerrio: -- and indeed provide the rest of the world with an automobile which it exports, with many fewer people than we have --

Mr. Makarchuk: Goddamned socialists.

Mr. Warner: The socialists did it.

Mr. Kerrio: -- and can put forth that kind of commitment, while we sit here and buy what the Americans are willing to hand out to us?

Mr. Makarchuk: Because we’ve got a bunch of baloneys running the country; that’s why.

Mr. Deputy Chairman: Order.

Mr. Makarchuk: We’ve got a bunch of baloneys running the country; that’s what it is. Arseholes.

Mr. Kerrio: Now if we would like to talk about the particular aspect as it relates to the socialists --

Mr. Ziemba: You’ve seen the light, eh, Vince?

Mr. Kerrio: -- I’d like to share this thought with members.

Mr. Makarchuk: We’ve got a bunch of arseholes running the country.

Mr. Kerrio: Maybe I don’t share this thought with many people here in the Legislature, but I would like to share it with my socialist friends to my left.

Mr. Makarchuk: We’ve got a bunch of arseholes running the country.

Mr. Deputy Chairman: Might I ask the member for Brantford --

Mr. Makarchuk: Turkeys!

Mr. Deputy Chairman: -- to please keep his remarks in parliamentary language.

Mr. Kerrio: I have said it many times before, and I should reiterate it --

Mr. Makarchuk: Part of the problem --

Mr. Deputy Chairman: Order. I would caution the member for Brantford to keep his remarks in parliamentary language or I will have to call him to order.

Mr. Williams: Disgusting.

Mr. Deputy Chairman: Would the member for Niagara Falls please continue?

Mr. Kerrio: Thank you, Mr. Chairman. I have to share this thought again, because each time I stand in my place to say what I have to say in the interests of better government and better responsibility in the province, I get interruptions from the leftists over here. I have to say this to them, with respect: I hear many boasts about these jurisdictions overseas that they talk about, but I see very few of those socialists travelling in that direction. Passports and passage are very easy to come by, but I don’t see too many of them taking advantage of that fact.

Mr. Warner: Boy, you’re really soaked tonight.

Mr. Kerrio: In fact, what I see is most of them migrating to this great country of ours and most particularly to this province of ours.

Mr. Makarchuk: Keep migrating -- and the farther south you go, the better we feel.

Mr. Kerrio: May I say with respect to the members who are making all that noise that if they’re very upset at this whole way of life we have here, it’s very easy to pull up stakes and go to some of those great socialist jurisdictions that exist all over the world.

Mr. Makarchuk: In the Carolinas you’ll be right at home.

Mr. Kerrio: In fact, if they need someone to sponsor them to go, I would be most willing -- most willing -- to sign their papers.

Mr. Johnson: Good for you.

Mr. Warner: You’ve got the money -- off the backs of the workers.

Mr. Kerrio: I say to the minister, with a great deal of respect for his office --

Mr. Williams: On a point of order, Mr. Chairman.

Mr. Deputy Chairman: Order. On a point of order; the member for Oriole.

Mr. Williams: Mr. Chairman, I believe the member for Brantford made some very unparliamentary remarks with regard to the member for Niagara Falls, and I think he should withdraw those remarks.

Mr. Warner: That’s not your problem.

Mr. Cureatz: We’re for you, Vince.

Mr. Deputy Chairman: The remarks were not directed at any member; they were general remarks. I have asked the member for Brantford to keep his remarks in parliamentary language. They were not directed at the member.

Mr. Warner: It’s not the member for Oriole’s problem.

Mr. Williams: I think they were directed at one of the official parties in this House, Mr. Chairman, and I think they were unparliamentary and they should be withdrawn.

Ms. Gigantes: The member for Oriole should quit twitting.

Mr. Makarchuk: Or twatting.

Mr. Laughren: Let’s get busy and work on another bill.

Mr. Deputy Chairman: Would the member for Niagara Falls please continue?

Mr. Kerrio: Thank you, Mr. Chairman.

Mr. Warner: They should never have moved that rock in Don Mills.

Mr. Kerrio: As I suggested to the minister before, I am most impressed with the determination of Premier Sterling Lyon --

Mr. Warner: Of course. He’s a Tory and you’re a Tory.

Mr. Kerrio: -- to bring into some kind of sensible, responsible government, a commitment to the people who elected him on that platform, that he would bring fiscal responsibility to that province.

I think that if you were to be very frank with me, the former minister in all probability left your ranks because he could not convince those people in the other ministries that there should be some measure of priority injected into cabinet so that you could in fact establish some kind of sense of fiscal responsibility. I have to think that has to be one of the prime reasons that he decided to forgo the responsibility for the treasury of this province.

So I say again, and I am very confident --

Mr. Deputy Chairman: Order. A point of order. The member for Oriole.

Mr. Williams: In view of the fact that you wouldn’t accept my other point of order, I have a new point of order in that I would suggest, Mr. Chairman, in view of the unparliamentary remarks that were made by the member for Brantford, that the member for Scarborough-Ellesmere should ask that member for Brantford to resign.

Mr. Deputy Chairman: Would the member for Niagara Falls please continue.

Mr. Kerrio: Thank you, Mr. Chairman.

As I am attempting to suggest to the minister, the only way there is any possibility of reducing the commitment of dollars in this province would be an immediate dedication to priority setup, interministerially, whereby we could decide on a reasonable increase in the budgetary expenditure, and then relate that to the responsibilities of the various ministries, depending on priorities they may agree on.

An hon. member: There go the super ministries.

Mr. Kerrio: I suggested before that I am most disappointed that in most instances where much of the responsibility could be shouldered by the provincial government, they play that petty political game of suggesting that the feds are the people who perpetrate these things and they cannot or will not do anything about them.

The auto industry, as the member for Nickel Belt has suggested, is one where we are sadly lacking in balance of trade. Now I have to think, on the basis of the remarks I made before, that if a country the size of Sweden can engineer and put on the market two automobiles, certainly a competent minister, making his point with the auto manufacturers of the United States, could reach an agreement that we have an entitlement in proportion to the number of vehicles that are purchased in this province of ours, and the volume of parts that are used in the maintenance of those vehicles; that he could sell that kind of a commitment. I wonder if the Treasurer has ever looked at the alternative of suggesting to those manufacturers who are not prepared to give us what is rightly and duly ours, an alternative way of putting the people of Ontario on some kind of wheel whereby the jobs would be created in this jurisdiction.

Mr. Laughren: It’s your friends in Ottawa, Vince.

Mr. Warner: They’re the ones who sold out the country.

Mr. Kerrio: I have to suggest again, Mr. Minister, that while that jurisdiction is responsible for the overall involvement of foreign manufacturers here I am not so sure that you have made a case with them, and it seems a sad state of affairs that we have to put up tax dollars to bring to the province of Ontario what should rightly be ours. I have to believe that the minister thinks that way. I have to believe that his government thinks that way. I can’t believe that the kind of pressure that should have been brought to bear with the federal government was really a commitment on the part of this government.

When many ministers sit over there, it gets very difficult, more so each day, to listen to the kind of -- and the minister suggested there wasn’t rhetoric on his part as an individual; that as an engineer he was not subject to resorting to rhetoric. I suggest to him, that, while an engineer may not resort to rhetoric --

Mr. Bradley: He engineers a lot of things.

Mr. Laughren: He just throws puns.

Mr. Kerrio: -- I think the main kind of criticism that we could direct to his kind of involvement would be overdesign -- in fact, sometimes putting into play twice as much as needed, and in the minister’s particular instance that relates to dollars. That is the problem we have today. I am suggesting that, if the minister has a dedication to bringing the economy of this province into line, he might convince the other members in the various ministries that until a real dedication to reasonable priorities is put into place, we shall never balance the budget.

Mr. Ziemba: What do you think of this speech, Jimmy? Is it your caucus position?

Mr. Warner: Oh, my goodness.

Mr. Chairman, we have just a few minutes remaining --

Mr. Deputy Chairman: Order. The Treasurer wishes to respond, and he has that right.

Mr. Warner: Does he? How could he respond to that? It is like trying to iron out a plate of spaghetti.

Mr. Deputy Chairman: I must recognize the Treasurer.

Hon. F. S. Miller: Mr. Chairman, I was prepared not to respond until I spotted the next speaker.

(Applause.)

Hon. F. S. Miller: Will you guys shut up?

Mr. Warner: You are running for Premier now, are you? Challenging the Premier.

Mr. Kerrio: I would like to thank you, no matter what you say.

Hon. F. S. Miller: The member for Niagara Falls has been here all night and in his own sober way has contributed to the debate.

Mr. Warner: That’s your judgement.

Hon. F. S. Miller: I must say, though, I suspect there should be large dividends in his particular part of Ontario, judging by the quality of some of the interjections this evening. I have no idea what is going on beyond these walls, but I suspect it is helping the economy down his way very much.

Mr. Kerrio: On a point of order, Mr. Chairman: I will not explain, but what the Treasurer is suggesting is not true in any sense of the word.

Mr. Turner: What’s he suggesting?

Mr. Peterson: The point is, it was all imported, Frank.

Mr. Laughren: Imported. Nobody would touch the Canadian stuff.

Hon. F. S. Miller: Do you mean it was a free gift?

Mr. Kerrio: No, no. That has nothing to do with it.

Hon. F. S. Miller: My comments, Mr. Chairman, will be very brief. The honourable gentleman is a man whose basic beliefs are often like mine. Somehow, in the process, he just joined up with the wrong group.

Mr. Warner: He is a Tory.

Mr. Laughren: Another Marvin Shore.

Mr. Warner: He wants to be a cabinet minister.

Mr. Laughren: Another Marvin Shore. He is going to cross the floor.

Mr. Warner: He is Marvin’s brother.

Hon. F. S. Miller: But the honourable member made one little comment I have to rebut. He said the Manitoba government was able to have a 2.9 per cent increase this year. My friend, if we had followed an NDP government, we could have a 2.9 per cent decrease and still look great. After those years of spending and waste, almost any Conservative or Liberal government could step in and do a fine job.

Mr. Warner: Tell us about Saskatchewan, my friend.

Mr. Laughren: Tell us about Ontario, Frank.

Hon. F. S. Miller: The other thing I want to point out is that the debt of that province is 50 per cent, on a per capita basis, of annual personal average income. In Ontario it is only 29 per cent. That is a very interesting statistic. It just shows how in the last few years the debt in that particular province has increased under the kind of regime our friends over there say is a panacea.

Mr. Warner: Boy, you know how to twist things. What nonsense!

Mr. Ziemba: Where does he get those numbers?

Hon. F. S. Miller: I would just like to move that vote 1101, item 1, be passed.

Some hon. members: No.

Mr. Deputy Chairman: There are further speakers.

Hon. F. S. Miller moves that the committee rise and report.

Those in favour will please say “aye.”

Those opposed will please say “nay.”

In my opinion the ayes have it.

Motion agreed to.

On motion by Hon. F. S. Miller, the committee of supply reported progress.

On motion by Hon. F. S. Miller, the House adjourned at 10:31 p.m.