The House met at 2 p.m.

Prayers.

DEATH OF PHYLLIS GRIFFITHS

Hon. Mr. Drea: Mr. Speaker, before government statements today, I would like to draw the attention of the House to the passing of one of the remarkable women of this century in Canada, Miss Phyllis Griffiths. Miss Griffiths, who is being laid to rest today, was a pioneer, really, without being a pioneer in the women’s movement. At a time when women were relegated to very few competitive positions with males, Miss Griffiths for half a century, because of her dedication, her abilities and her indomitable spirit really paved the way for what we have accepted today as positions of equal opportunity for those with equal talents.

She was a remarkable woman. She is one who probably would not have wanted the very justified eulogies and praise that have been published and spoken since her passing on Friday. But, none the less, it is with a spirit of gladness that she was with us for so long and that one lists her contributions not just to society but indeed to the entire community and, beyond that, to a great many individuals who, without her and her remarkable talents, would not have been able to achieve justice.

She was one who really fulfilled the admonitions of the poem, “To strive, to seek, to find, and not to yield.”

STATEMENT BY THE MINISTRY

GAINS PAYMENTS

Hon. Mr. Maeck: Mr. Speaker, I wish to announce steps taken by the provincial government to ensure that payments to senior citizens under the Ontario guaranteed annual income system keep pace with the increase in the guaranteed income supplement from the federal government.

In late August, the federal government announced that its guaranteed income supplement would increase by $20 per single pensioner and $10 per married pensioner, effective January 1, 1979. The federal legislation enacting this increase received royal assent on November 20, 1978. I wish to inform you, Mr. Speaker, that also from January 1, 1979, the Ministry of Revenue will pass on this increase to Gains recipients.

I should point out that those persons receiving federal old age security and guaranteed income supplement payments will receive their increase directly from the federal government. However, senior citizens who receive Ontario Gains but who are not eligible for the federal program will receive similar increases totally financed by the province. We anticipate spending an additional $600,000 yearly to meet this commitment.

Beginning in January, the guaranteed income level will be $343 per month for single pensioners and $666 per month for married couples who both qualify for Gains. These rates include the quarterly adjustment based on the consumer price index.

In conclusion, this measure ensures that Ontario pensioners benefit fully from this increase in federal payments without any reduction in their Gains cheques.

Mr. Martel: Still $800 below the poverty line.

Hon. Mr. Maeck: Ask me a question.

Mr. Martel: I did on Friday, but you weren’t here.

ORAL QUESTIONS

TRANSIT FARES

Mr. S. Smith: Mr. Speaker, I will direct a question to the Minister of Transportation and Communications, since he is here. My other questions have to do with some of the 10 or 12 ministers who are not here at the moment.

Given that the minister on September 29 in Kingston had already committed the province to an expenditure of about $35 million over four years to construct a four-mile rapid transit line linking Union Station with the Canadian National Exhibition, how does he justify his comments to the media that he does not know where he would find the funds to assist the Toronto Transit Commission to maintain a fare freeze for the coming year?

Why does he not simply accept the suggestion which we have made, that we not build that exceedingly low-priority and very questionable route from Union Station to the CNE, and use that money, at least for the next four years or so, to assist in the maintenance of a freeze -- a one-year freeze and then, of course, to reconsider the matter after that?

Why does he say he does not know where the money can come from when he can build a frivolous line of that kind?

Hon. Mr. Davis: That’s what they said about Orville Wright.

Mr. Cunningham: This thing will never fly.

Hon. Mr. Snow: Mr. Speaker, personally I do not accept the honourable member’s suggestion that this is --

Mr. S. Smith: They said that about Krauss-Maffei as well, as I recall.

Interjections.

Mr. Speaker: The honourable minister will just ignore the interjections from both sides of the House.

Hon. Mr. Snow: Mr. Speaker, first, I would like to say that I do not accept the honourable member’s suggestion that this is, firstly, frivolous or, secondly, low-priority. There happen to be quite a number of people who feel it has a very high priority. Secondly, I would have to say that this proposal was put forward to the federal Minister of Industry, Trade and Commerce --

Mr. McClellan: He’s as silly as you are.

Hon. Mr. Snow: -- as part of an industrial package that was recommended by that minister’s task force. It was put forward jointly by myself and my colleague, the Minister of Industry and Tourism (Mr. Grossman). It is really not part of a transit package per se, as one might consider ordinary transit expenditures.

Mr. S. Smith: In plain English, if the minister had the money to build that silly line from the Canadian National Exhibition to Union Station, why doesn’t he use the money to help the TTC maintain a fare freeze for this year?

Mr. Warner: It’s an extension of model trains.

Mr. S. Smith: What’s the difference if it’s from another ministry’s budget? The minister said he didn’t know where to find the money; we’re showing him where to find the money. Why does he see some mystery about that?

Hon. Mr. Snow: Obviously the position of the Leader of the Opposition and my position are somewhat different.

Mr. S. Smith: That is for sure.

Hon. Mr. Snow: I happen to believe this country and this province should be proceeding with research and development projects with industrial incentives and assisting the industries in this province to produce jobs and create a technology that will assist our exports in the future.

Mr. McClellan: They have discovered the wheel. What more do you need to do?

Mr. Cassidy: Supplementary: In view of the fact that the TTC fares will rise to 60 cents in the new year if no action is taken by the government, can the minister say whether this government is prepared to put any priority at all on the need to hold TTC fares at their present level, or is it the government’s intention to simply allow the fares to go up and the ridership to continue to fall short of forecasts as it did this year with the increase in the fares to 55 cents?

Mr. Warner: There is no commitment.

Hon. Mr. Snow: I think I answered that question fully on Friday. The leader of the third party wasn’t here, but I answered that same question on Friday.

Mr. Warner: You’re not going to do anything.

Mr. Cassidy: Not for ordinary people.

Mr. Cunningham: Supplementary: I would like to ask the minister if the viability of the Hamilton project and the test track from Union Station to the CNE is contingent on federal support? If it is and the federal government is reluctant to participate, would he then direct the funds to offset the increased operational costs of the TTC?

Hon. Mr. Snow: I think we will deal with that hypothetical situation if it develops.

ONTARIO HYDRO BORROWING

Mr. S. Smith: In the absence of the Minister of Energy (Mr. Auld) and in the absence of the Treasurer (Mr. F. S. Miller), I’ll direct this question to the Premier. Because of the deficits which have piled up under his administration and the fact that the available pension funds have all had to be used to pay for those deficits, thus forcing Ontario Hydro to do its borrowing in the United States of America and other places outside Canada, is the Premier aware of what the net loss to Hydro has been as of the end of September of this year simply because of the foreign exchange levels that have happened? By having these deficits and forcing Hydro to borrow in the States, does he know what the loss is that Hydro has now suffered simply due to the changes in the Canadian dollar vis-à-vis the US dollar and the Deutschmark? Does he have any idea of the ballpark?

Hon. Mr. Davis: What ballpark? Has the member been there recently?

Mr. J. Reed: How about a government ballpark?

Hon. Mr. Davis: There were two or three questions. I am trying to abide by the more formal structure you are suggesting to us, Mr. Speaker.

Mr. S. Smith: One question is how much is the foreign exchange loss? That’s what I’m asking the Premier.

Hon. Mr. Davis: There were two or three statements prior to the question which I think warrant some form of reply.

Mr. S. Smith: That is true.

Hon. Mr. Davis: While we in this province have been operating with a deficit in terms of cash requirements, I would remind the Leader of the Opposition and more particularly his predecessor that I can’t think of a single program of this government during that period of time where they or their colleagues have not urged upon the government even greater expenditures. That applies particularly to that particular party over there. I take some pride in the fact that this province in terms of its financial management has operated probably more efficiently than most provinces in this country.

Mr. Warner: That’s why you’re building toy trains.

Hon. Mr. Davis: The member for Grey-Bruce (Mr. Sargent) is over there smiling. I want to remind him that when we received that triple-A rating he thought we had joined the Automobile Alcoholics Anonymous Association or whatever it was.

Mr. Sargent: That’s right.

[2:15]

Hon. Mr. Davis: He now senses, as do the members opposite how important that has been and how important it is that it be retained, which we are doing with some success.

Ontario Hydro has borrowed in the American market when the Canadian dollar was in excess of $1 American. They are borrowing in the American market when the dollar is below that of the American dollar and it has nothing whatsoever to do with the budgetary or cash requirements of this province. Their issue two weeks ago went at a very attractive rate. It was very much in demand, which demonstrates conclusively to the investment community and through it to the public generally, the financial stability of Hydro and through Hydro the province of Ontario.

Mr. S. Smith: You will note, Mr. Speaker, the question was not answered. I trust you noted that.

I will, therefore, put it a little differently to the Premier, not that one ever expects him to know the figures when it has anything to do with the debt of this province or of Hydro, but is the Premier aware that because his budget has used up for the net cash requirements the money available in this coin- try, forcing Hydro to the United States to borrow, that Hydro has suffered as of September of this year a foreign exchange loss alone of $932 million?

Can the Premier tell us how that loss, should it eventually be realized as it is year by year in terms of interest payments that come due, is to be made up? Will it be made up in the electricity rates, or will the government have to find some other way to make up that foreign exchange loss?

Hon. Mr. Davis: The Leader of the Opposition hopefully is aware of how Hydro operates its modest organization. The principle has always been that the customers of Ontario Hydro pay for whatever it costs to produce the electrical energy. If the burrowing of funds is part of that cost, which it obviously is, I should point out to the Leader of the Opposition the exchange rate has not always been as it is, nor will it necessarily stay as it is, and that is why he has to be a little bit careful with some of the figures he uses, although I know that care is not always an essential part of his approach.

Mr. S. Smith: We haven’t been wrong on the debt this year and the government has been.

Hon. Mr. Davis: If he hasn’t been wrong on the debt, it is about the only subject he hasn’t been wrong on.

Mr. S. Smith: The government has been and didn’t have the good grace to admit it.

Hon. Mr. Davis: The Leader of the Opposition is upset today. Did he take some ugly pills early this morning? What’s wrong?

I would only say to the Leader of the Opposition that in spite of his rather negative reaction to just about everything that happens in this province, and in spite of the fact that Ontario Hydro does borrow in the United States and elsewhere on occasion, rates to the consumers are still comparable to or less than in the states of Ohio, Michigan, New York, et cetera, which borrow on the same markets, creating energy mainly from the same sources. Yet Ontario Hydro is so sufficient and efficient that it has been able to produce electrical energy which the member’s wife uses at home at a rate lower than if she lived in Buffalo, Ohio, Ashtabula, Detroit, or you name it.

Mr. Martel: You sound like an old CNR conductor.

Mr. J. Reed: Supplementary: If my information is correct, is it not true that those kinds of charges, as is stated in the prospectus that Hydro must prepare for the American borrowing market, will not be applicable to rates? I would like to ask, if, in fact, that is true, where else is Hydro going to get the money to make that up? Is not this debt, or a good portion of this debt -- and I think the Premier can admit it, going to finance a system which is now built 44 per cent over peak, according to government figures?

Hon. Mr. Davis: There are two questions there. I am not totally familiar with what all is in the prospectus that Ontario Hydro has to file with the securities authorities in the United States, but I have yet to find any way where Hydro has received any other moneys, other than through revenues received from its customers.

So I think it is logical to assume that over the past 50 years or whatever length of time Ontario Hydro has been borrowing, the interest charges on the moneys it has acquired have been paid for through some form of revenue to Ontario Hydro. Its only revenue is what it charges its customers, so I would say, not knowing exactly what is in the prospectus, it still, none the less, gets it from revenue.

With respect to the second question, it is a matter of judgement as to whether or not the reserve capacity of Ontario Hydro is over what it should be. That’s a matter we can debate on some other occasion. One can get a number of experts who will advise that any utility’s overcapacity should be between 20 and 33 per cent of peak load. Ontario Hydro may for a period of time be at 44 per cent.

Mr. MacDonald: It has been over 50.

Hon. Mr. Davis: That can change literally within six or seven months and I am not here as an expert to say whether it should be 44.

Mr. J. Reed: They are going to 50 per cent in six months.

Hon. Mr. Davis: If the honourable members say Hydro is building beyond its needed capacity, that’s something the member for York South and his committee have been deliberating. It’s something about which Hydro is concerned and it is an area where Hydro has made one or two judgements in terms of its future requirements. They have decided to move ahead with one or two projects in anticipation of future need. They have done so with the support of the government and with the support at least of one of the member’s colleagues. I refer to Atikokan.

Mr. Laughren: Supplementary: Is the Premier reaffirming then what he implied the other day, but wouldn’t come out and say, namely, that Ontario Hydro’s revenues will indeed come from the sale of its product, that is, energy, and will not, as Ontario Hydro has suggested in its submissions, come from either general tax revenues or from pension plans in the province of Ontario?

Hon. Mr. Davis: I don’t think Ontario Hydro ever suggested its revenues should be supplemented by funds from the pension system.

Mr. Laughren: For borrowing.

Hon. Mr. Davis: Yes, but those are two different issues. In that question, as I understood it, if this is a supplementary, we were talking about Hydro’s revenues. Hydro does not use borrowed funds in terms of revenue.

Mr. S. Smith: A billion dollars down the drain.

GAINS PAYMENTS

Mr. Cassidy: I have a question for the Minister of Revenue arising out of the announcement which has finally come today about the passthrough of the federal Gains increase in payments for pensioners. Can the minister say what steps the government intends to take in order to eliminate the gap for single pensioners, which will still leave them about $75 a month or $800 a year below the poverty line, even after the Gains increase is passed through?

Hon. Mr. Maeck: I really disagree with the statement by the leader of the third party. He is not taking into consideration other benefits these people receive, such as free OHIP premiums valued at $228 a year. He’s not taking into consideration the tax credits these people receive valued at $362 a year. He is not taking into consideration the drug benefit these people receive valued at approximately $100 a year. All this brings them well over the $4,800 that the member for Sudbury East referred to in his question to the Treasurer (Mr. F. S. Miller) two or three days ago.

Mr. Warner: You are proud of that.

Mr. Cassidy: Supplementary: The figure that’s been quoted by the Minister of Revenue was the poverty line for senior citizens, effective in June of last year. That obviously has got to be raised because of inflation and the cost of living over the six months up until January of this coming year.

Mr. Speaker: Is that a question?

Mr. Cassidy: The question is, given the fact that even if all of those contentions were to be accepted, which I dispute, there would still be a gap. Will the government take action now in order to bring all single senior citizens in this province over the poverty line?

Hon. Mr. Maeck: As I said in reply to the member’s first question, at the present time, with the announcement I have just made, $4,120 is the figure they will receive, including the Gains cheque. I have also quoted the other figures, which total $4,810, which is above the poverty line.

Mr. McClellan: Supplementary: I would like to ask the Minister of Revenue whatever happened to the promise in the budget paper from last year’s budget to increase the Ontario tax credit scheme for senior citizens up to a new base that would guarantee a tax credit maximum of $510? Is that relegated to the realm of broken promises or does the government still intend to meet that commitment?

Hon. Mr. Maeck: That commitment is still being considered by the Treasurer.

Mr. McClellan: In the fullness of time. That is wonderful.

Mr. Cassidy: Supplementary: In view of the fact that the average industrial wage in Ontario is about $13,000 a year; the average family income in Ontario is upwards of $ 17,- 000 or $18,000 a year; a minimum wage earner in Ontario earns $5,928 a year, and the poverty line, effective January of next year, will be somewhat over $5,000 a year, is it the minister’s contention that senior citizens who will have substantially less than that will in fact be able to live comfortably? Is that the government’s position?

Hon. Mr. Maeck: That isn’t the statement I made. The figures I had given refer to what is now termed the poverty line. You are making a suggestion it is going to be over $5,000.

Mr. Cassidy: That’s right.

Hon. Mr. Maeck: That has not been decided at this point in time. That’s your own projection. Statistics Canada do not have that figure at this point in time.

Mr. Warner: You are not going to do anything.

Hon. Mr. Maeck: If we find that senior citizens need more assistance, this government has always been prepared to assist.

Mr. Warner: When?

Hon. Mr. Maeck: We will re-examine it at that time, if it is necessary.

Mr. Martel: You might try putting an escalator clause in.

Mr. Deans: How about a Christmas bonus?

Mr. Warner: Snails will be on the Olympic team by the time you get around to it.

BEARE ROAD LANDFILL SITE

Mr. Cassidy: I have a question to the Minister of the Environment. Will the Minister of the Environment say what reply he has given to Metro Toronto to its request three months ago for financial assistance on a study of the contamination of surface water runoff at the Beare Road site in Metro, particularly since Metro believes that extended dumping of liquid industrial wastes at the ministry’s request probably contributed to the problem? If the minister has sent no reply, can he say why the government is dragging its feet in coming to a solution of this urgent and difficult problem?

Hon. Mr. Parrott: I really don’t believe the government is dragging its feet on this problem. I think the action in the last three months has been rather significant, to say the least.

There is no doubt in my mind. We are not dragging our feet.

Mr. Nixon: You have dumped it all in Lincoln.

Hon. Mr. Parrott: I don’t recall that reply has been sent. I could be in error there, but I don’t think it has. I do want to say, however, that we have met with the chairman of Metro on not only that issue but, indeed, two or three other issues in which we have a joint interest. That’s all I can say at this time.

Mr. Cassidy: Supplementary: In view of the recent announcement that the provincial lottery is going to provide $36,250 in order to carry out a similar study of a landfill site at Camp Borden, will the minister now undertake that this study at the Beare Road site, and similar landfill site problems in other parts of the province will be studied with provincial funding? Is it the minister’s view that the funding for this kind of urgent study where contamination is threatening should be purely a game of chance?

Hon. Mr. Parrott: Well, I don’t think there is any doubt that landfill sites are studied very extensively, not necessarily through Wintario grants. Surely, the member isn’t asking whether or not landfilling is extensively studied. Am I correct in that assumption?

Mr. Cassidy: It is the problem of liquid waste coming from landfill sites I am concerned about.

Hon. Mr. Parrott: If I am, surely the member will accept that all kinds of studies go on. I don’t think it is necessary to fund it out of Wintario. Quite frankly, I think it should be on a more normal basis than a grant from Wintario. That’s the way it is. Not only most zoning be considered, but also the total environmental assessment done on any new landfill site. Surely the member wouldn’t ask for more than that.

Mr. Cassidy: A further supplementary, Mr. Speaker: Can the minister explain why it is, then, that three months after the request came in from Metro to study contamination which is coming out of the surface runoff at the Beare Road site there has been no conclusion by the ministry, but on the other hand, he has been able to direct lottery funds from the provincial lottery to a similar study up at Barrie?

Why is there that inequality of treatment, and why can this not be treated as a matter of an ongoing government responsibility?

Hon. Mr. Parrott: That is precisely what we are doing. We are giving the broad issue the fullest consideration at this time.

SUBLIMINAL MESSAGES

Ms. B. Newman: I have a question of the Minister of Consumer and Commercial Relations. Is the minister aware of the use of subliminal messages, a message technique essentially being used to stop shoplifting? It’s used in six stores in Toronto, I understand; two in Niagara Falls, one in Ingersoll, one in Burlington and one in Windsor. Can the minister comment on the legality of such techniques, as well as the claimed effectiveness of these techniques?

[2:30]

An hon. member: There are no light-fingered people around here.

Hon. Mr. Drea: Mr. Speaker, first of all the use of subliminal messages by what is essentially a security guard organization or a protection organization really is the responsibility of the Solicitor General (Mr. McMurtry) and I understand he is looking into that.

Mr. Deans: What is a subliminal message?

Hon. Mr. Drea: It’s one they flash out that you can’t read but you’re supposed to hear. The member understands how much faith I have in them just by that explanation.

Mr. Conway: Sort of like your ‘71 campaign.

Mr. Deans: I always put it down to hallucination.

Hon. Mr. Drea: But on a far more serious note, over the years there certainly have been attempts on an experimental basis to demonstrate the efficacy of subliminal messages, either through the use of film or videotape. The ministry takes an extremely dim view, quite frankly, about the use of subliminal messages in any way, shape or form within a retail establishment.

Mr. Conway: No more than a dim view, Frank?

Mr. Deans: Doesn’t that come under the authority of the CRTC?

Hon. Mr. Drea: I’m having discussions with the Solicitor General concerning the validity of a private investigation organization coining into retail establishments and flashing out this type of message as an attraction to use their services, apparently to stop shoplifting.

Mr. Conway: We need more than a dim view.

Mr. Deans: You should put them in topless bars.

Hon. Mr. Drea: If I could just add, furthermore either the Department of Transport in Ottawa or the CRTC are extremely concerned about the potential or possible use of subliminal messages on airwaves. I know the federal government has been into the matter for a number of years.

FIRING OF ASSESSOR

Mr. Swart: My question is to the Minister of Revenue. Would the minister confirm that Ms ministry has fired Mr. Leonard Hallborg, a long-time dependable employee in the Niagara assessment office, and incidentally a veteran who was wounded in action on D-Day? Would he confirm he was fired simply because he was elected as an alderman in the city of Port Colborne?

Does the minister know the firing notice was handed to him last Friday morning, effective Friday morning, which may even contravene the labour standards act? Was it done with the minister’s full knowledge and concurrence?

Hon. Mr. Maeck: Yes.

Mr. Swart: By way of supplementary then, Mr. Speaker, doesn’t the minister realize the assessor takes an oath of confidentiality as assessor and an oath of loyalty and impartiality as an alderman? Does he know this man has done no assessing whatsoever in the Port Colborne area for many years but rather assesses at West Lincoln, some 25 miles away?

Can’t the minister see that any possible conflict of interest, which was the excuse for firing this man, is far less than that of real estate people or lawyers on local municipal councils? Will the minister reconsider this unjust firing?

Hon. Mr. Maeck: Mr. Speaker, as the member fully understands and knows and realizes, this is a decision that has to be made by the deputy minister under the Public Service Act, not by the minister.

Mr. Deans: Oh, stop.

Interjections.

Mr. Cassidy: Not again, that’s Claude Bennett’s line.

Hon. Mr. Maeck: Read the act. The members will find the decision must be made by the deputy minister. The deputy minister has made this decision and I concur with it, because it can create a conflict of interest.

Mr. Deans: Nonsense.

Mr. Breaugh: Disgusting.

Mr. Swart: Explain, explain.

Mr. Warner: Unfair.

Mr. Martel: Why don’t you give him a leave of absence?

Mr. Warner: Do something about it. Come on, some action.

Hon. Mr. Maeck: There’s no question about it. The gentleman in question, Mr. Hallborg, has the right to grieve. I’m sure he will. I’m sure the grievance board will decide once and for all whether or not he should have been dismissed.

Mr. Warner: You do something about it.

Hon. Mr. Maeck: I am prepared to accept the decision of that grievance board. That avenue is open to him.

Mr. Swart: How about civil rights?

Mr. Cassidy: Why do you overload the system like that?

Hon. Mr. Maeck: We’re not overloading it at all.

Mr. Cassidy: Sure you are.

Hon. Mr. Maeck: This is a precedent. This is the first assessor who has ever run for municipal elections to my knowledge and it is a precedent. We would like to see a decision made by an impartial body such as the grievance board --

Mr. Warner: There’s only one honourable thing you can do: If you fire the man you should resign.

Hon. Mr. Maeck: -- simply because we feel within our ministry that it is a conflict of interest. We could be proven wrong.

Mr. Swart: I think you will be.

Mr. Warner: You are wrong, and you know it.

Hon. Miss Stephenson: If your one cell ever gets a companion, David, you’re going to be in trouble.

Hon. Mr. Maeck: He does have this form of appeal to go to; we have suggested it to him.

As far as I am concerned, the deputy minister made the proper decision under the circumstances. All the reasons have been given to Mr. Hallborg, along with the other two assessors who ran and were not successful.

As far as I’m concerned, the proper decision has been made. But he does have the right to appeal, and certainly I would welcome that.

Mr. Martel: Can you imagine a doctor as head of the Ministry of Health? That’s not a conflict.

Hon. Miss Stephenson: I think it is.

Mr. Martel: Yes, I know who was the acting Minister of Health for a while.

Mr. McClellan: Can you imagine the head of the Ontario Medical Association being the Minister of Health?

AIRPORT TAX

Mr. Kennedy: Mr. Speaker, I have a question of the Minister of Industry and Tourism. With respect to the recent federal budget decision to increase airport tax to $15 for domestic flights and $12 for overseas; given that at present we have a $8 tax, which I believe is the highest anywhere in the world, and that this increase is --

Mr. Breaugh: Unthinkable -- a ripoff.

Mr. Handleman: Daylight robbery.

Mr. McClellan: Idiocy.

Mr. Kennedy: -- a ripoff; it makes the turkey increases appear like a loss leader. It will adversely affect the travel industry business, particularly small business --

Mr. Breaugh: No more than five minutes, Mr. Speaker. Let him go; he’s rolling.

Mr. Kennedy: -- discourage overseas visitors --

Mr. Speaker: The question has been asked.

Mr. Kennedy: -- aggravate the trade deficit, and it will harm our image overseas. It won’t enhance our “We treat You Royally” --

Mr. Speaker: Order. The question has been asked. Does the Minister of Industry and Tourism care to answer?

Hon. Mr. Grossman: I must say I missed the question. With respect, Mr. Speaker, I do not think the member got to the question part of that presentation. Perhaps you could give him a moment to ask the question.

Mr. Nixon: Do you think it’s a terrible thing?

Mr. Breaugh: Give him another 10 minutes.

Mr. Kennedy: Mr. Speaker, I just wondered if the minister would make representations to Ottawa to see if they would reconsider this exorbitant increase.

Mr. MacDonald: You are fighting the federal election.

Hon. Mr. Grossman: In point of fact, before that tax increase was announced, the tourism ministers’ conference was convened in Ottawa. We had heard rumours of that sort of thing. We indicated our very severe objection to that passenger tax. Indeed, we spoke at some length about the necessity to keep that sort of transportation cost down to a minimum. In spite of that, the federal Minister of Finance chose to increase the tax. We object to it, we think it’s counterproductive, and we will be making further representations to the federal government on that point.

HYDRO CONTRACTS

Mr. Sargent: Mr. Speaker, I have a question of the Minister of Energy. I would like to ask the Premier this question, but I will see if the Minister of Energy knows the answer to it.

Hon. Mr. Davis: He is far more likely to than I am.

Mr. Sargent: Without any of his rhetorical wizardry, in the light of the study by Burns Fry predicting that by 1980 -- less than 13 months from now -- uranium production will exceed demand by 82 per cent, and in view of this government’s contract for $7 billion with Denison Mines to infinity at $40 to $50 a pound, will the Premier tell me and this House, and the people of Ontario, whether he has made the $339-million loan to them which is going to cost us $1 billion in interest? Has the minister made that loan yet? If he hasn’t can he block it?

Hon. Mr. Auld: Mr. Speaker, I think this matter was very thoroughly discussed in the select committee. I wouldn’t take the time to repeat it all --

Mr. Sargent: Without obfuscation, give me the answer.

Hon. Mr. Auld: I can refer the honourable member to the Hansard of the discussion of the select committee, where the whole matter of the Denison and the Rio Algom contracts was thrashed out pretty thoroughly, I would say. If the honourable member has read that, he is aware of the provisions for Hydro to opt out.

As a matter of fact, I have an answer to a question from the member for Halton-Burlington (Mr. J. Reed) which I had hoped to give this afternoon and which addresses a part of this; that is, the estimated requirements of Hydro over the term from now until 2000, and the fact that they will have to purchase some uranium elsewhere in the interim because the two mines will not be able to supply.

I think the matter has been covered very thoroughly in the select committee.

Mr. Sargent: Supplementary, Mr. Speaker: This is totally wrong. He won’t answer the question. I wanted him to answer the first question before I had a supplementary. Has he given the $339-million loan yet?

Mr. Warner: Yes or no.

Hon. Mr. Auld: Mr. Speaker, the provision for advancing the loan money by Hydro is spelled out in the terms of the agreement. My recollection is that there has been no money advanced as yet because the money is advanced as certain things are done.

Mr. Sargent: A supplementary: Is the minister, aware --

Mr. Speaker: Order. Does the honourable member for Downsview have a supplementary?

Mr. di Santo: Supplementary: In view of the situation which is evolving as described by the member for Grey-Bruce; and in view of the mounting opposition to the use of uranium all over the world; and in view of the fact the supply of uranium will be considerable in the future, has this government any mechanism for revising the agreement with the two companies? Or is this government committed to pay in full, even though the uranium is not needed in the future?

Hon. Mr. Auld: I’m sure the member is aware the contract is between Ontario Hydro and the mines. This government has approved the contract in principle but there are still details to be worked out. The contract provides for a reduced amount of uranium being purchased if requirements are less than anticipated.

However, again from recollection, I would say the quantities involved in the contract at the time the contract was negotiated are something less than Hydro’s estimates of its needs for the period of the contract.

Mr. Sargent: Is the minister aware the Wall Street Journal last week carried a story saying that in Saskatchewan, Australia and France immense new deposits of uranium have been found? We’re committed to a price of $40 to $50 a pound now. The new price will be $1 a pound across the world as a result of these new deposits. In view of this fantastic, catastrophic mistake the government has made -- amounting to $7 billion or whatever, the largest deal in history -- will the government engage the best counsel in Canada and try to break this contract?

Hon. Mr. Auld: Mr. Speaker, I have not read the article in question. This sounds to me very much like some of the speculation I’ve heard about oil and gas prices, what are proven reserves, what are available reserves, what are costs of production and processing. I would not say there is any reason of which I’m aware at the moment to have title to do anything like cancelling these contracts.

PITS AND QUARRIES LEGISLATION

Ms. Bryden: I have a question of the Minister of Natural Resources. In view of the growing concern about the protection of our agricultural land and the need for environmental assessments on aggregate developments, and in view of the fact the rehabilitation fees for pits and quarries have not been increased since 1971 and are totally inadequate to restore the lands that are being exploited for aggregate development, when can we expect the long-promised new pits and quarries legislation on which the minister’s working party has been working, I understand, for over two years.

Secondly, will the minister undertake, when the legislation is ready -- and I hope it will be this fall -- to introduce the bill and permit it to be referred to the resources development standing committee for public hearings during the recess so we can get on with the legislation in the spring session?

Hon. Mr. Auld: The answer to the first part of the question is as soon as possible -- as soon as it is completed.

Mr. Deans: Soon?

Hon. Mr. Auld: On the second question, I will certainly consider that.

Mr. Speaker: The same minister has the answer to a question previously asked.

Ms. Bryden: A supplementary.

Mr. Speaker: I thought there was a commitment by the minister, “as soon as possible.”

[2:45]

Ms. Bryden: I wanted to ask the minister if before the legislation is introduced he would undertake to do an inventory of the aggregate resources under class one to four agricultural land so we know where the resources are and that we can find alternative sources for that particular aggregate development?

Hon. Mr. Auld: I would assume that some of that information, if not all of it, is available. That information which is known is available. I think that as far as aggregate is concerned, there is a resources map of the province which indicates the likely places for that aggregate. I am told that about 40 per cent of the known supply in central Ontario is in the Niagara Escarpment, for instance. I would attempt to get that information. Not every place has been drilled, for instance. The depths of deposit are not known and wouldn’t be known without a lot of very extensive exploration.

COMMERCIAL FISHING BAN

Hon. Mr. Auld: The member for Windsor-Walkerville asked me on December 1 about giving priority consideration to the needs of recreational fishermen in our planning for Lake St. Clair. We do intend to give priority consideration to the needs of recreational fishermen on Lake St. Clair. However, the lake does contain a variety of commercially useful species that are either of no use to anglers or are surplus to their needs at present.

It would seem to be poor policy not to use these fish provided that the fishing practices do not interfere appreciably with angling and that contaminant levels in the fish allow their being marketed.

The United States has recently raised its mercury tolerance level to one part per million from 0.5 parts per million. With reduced levels of contamination in Lake St. Clair, it is possible that some fish may now be acceptable on the US markets. As I indicated, my staff is now assembling all available information on contaminant levels to assess this possibility. In the meantime, no decision has yet been reached concerning the re-establishment of the commercial fisheries. It is the ministry’s intent to discuss this issue with all user groups before deciding.

Mr. B. Newman: Supplementary: Is the ministry aware that the scrap fish, or trash fish as they are known, compose some only 14 per cent in the Lake St. Clair, whereas in Lake Erie they are substantially higher, which would indicate sort of the opposite of what he is saying now?

Hon. Mr. Auld: Without going into the definition of what are trash fish and to whom they are trash, I will certainly consider that.

HYDRO CONTRACTS

Hon. Mr. Auld: On November 20, the member for Halton-Burlington asked me the following question: “In the light of the new energy situation and the new electric power consumption reality, has Ontario Hydro exercised any of its prerogatives in the uranium contracts to downscale the purchases of uranium fuel between now and the year 2000?”

In reply to that question, I think it’s important to appreciate some key aspects concerning Ontario Hydro’s future uranium fuel demands. Members will recall most of these matters were discussed in some detail earlier this year by the select committee and are as follows: In February Ontario Hydro revised its load forecast downward and is currently working on 1979 forecast, which is expected to be available around February or March of 1979.

Since nuclear stations produce electricity for Hydro’s base load, the fuel requirements of nuclear power stations are more a function of station performance than of load forecast. The Denison and Preston contracts will only begin to supply significant quantities of uranium from 1983 onwards. Up until 1994, Ontario Hydro will have to supplement its supply of uranium from other sources if it needs more than the quantities it will receive under its present contracts. After 1994, the quantities of uranium required will be determined by the future expansion of the system.

The Denison and Preston contracts have provisions built into them to handle any oversupply that might develop. These include sales, production adjustments and curtailment. These mechanisms can be activated if and when the need actually arises.

In the light of the above, I would like to suggest that the two contracts are necessary to supply the medium-term requirements of existing and committed stations and to provide long-term security of supply. Ontario Hydro, of course, is continuing to monitor events carefully.

Mr. J. Reed: Supplementary: Surely the minister understands that there is a time lapse built into those contracts which varies between the two. It is one term of years with Preston and it is another term of years with Denison, in which time it is necessary to have a certain --

Mr. Speaker: Is the minister aware of that? Is that what you are trying to say?

Mr. J. Reed: No, Mr. Speaker. I was trying to ask the minister if he is taking his action or his non-action based on the knowledge that there is a time lag. In the one case they can stall off a reduction in purchasing, I believe up to 12 years. In the other case it is about five.

Hon. Mr. Auld: I am not exactly sure that I understand the honourable member’s question. I will look at it and then I will reply to it.

PROPERTY TAXATION

Mr. Williams: I have a question of the Minister of Intergovernmental Affairs. Last week my friend Alan Redway, the mayor of the borough of East York raised an interesting proposal with regard to taxation, modelled on a tax revenue pooling system that is used in several European countries, including, I believe, West Germany and Holland.

Mr. Deans: Is this a throne speech?

Mr. Williams: Apparently, according to his proposal, this would reduce property taxation to a level of about 20 per cent, rather than about the 80 per cent that is now relied upon to derive revenues to operate municipal governments.

Mr. Deans: It is a budget speech.

Mr. Breaugh: A sharp question.

Mr. Williams: Is the minister aware of this tax revenue pooling system? If so, is his ministry undertaking any such study to consider the viability of such a system being used in this jurisdiction?

Hon. Mr. Wells: If my friend would supply me with the information, I would be most happy to study it and comment on it at a later time.

Mr. Swart: Supplementary: Could I ask the minister if there are any ongoing studies or any conclusions in his department that will reverse the trend which has seen a larger and larger part of the revenue of municipalities having to come from the property tax rather than some other source of progressive revenue?

Mr. S. Smith: That is not a supplementary.

Mr. Speaker: That is not supplementary.

KIMBERLY-CLARK FIRE

Mr. S. Smith: I’d like to direct a question to the Minister of Labour. In the very tragic deaths of three firefighters that occurred in the Kimberly-Clark fire in Etobicoke, is the Minister of Labour aware of comments that I have heard on the radio, which he may have heard as well, from the person in charge of the firefighting there, that this was not the first time that rolls of paper had tumbled down during the course of a fire endangering the lives of personnel and firefighters? I gather this happened on another occasion a year or two ago and the firefighters were lucky to escape with their lives out of a side door.

If that is a fact, could the minister tell us whether he has checked into this? If not, could he tell us whether he will check into it to see why it is that Kimberly-Clark was apparently never told to change its storage procedures and why the fire marshal says that as far as he knows there was no recommendation made regarding the piling of these rolls of paper?

Hon. Mr. Elgie: I heard the same comment the Leader of the Opposition heard. I have already asked my staff to review it for me and give me some information about any previous episodes that may have happened and about this specific episode that happened recently.

Mr. Lupusella: Supplementary: Could the minister also undertake to find out what kind of charges are going to be laid as a result of the whole matter?

Hon. Mr. Elgie: I think the Solicitor General (Mr. McMurtry) will be pleased to answer that question when he’s here, but I’ll be pleased to report to the House on the aspects to which I’ve committed myself. I’m not trying to avoid the issue, but it really hasn’t got much to do with my ministry.

DARLINGTON NUCLEAR PLANT

Mr. MacDonald: A question to the Minister of Energy, before he escapes.

Mr. J. Reed: Too bad, Jim.

Hon. Mr. Auld: Fire away.

Mr. S. Smith: Doesn’t the member for York South ever learn?

Mr. MacDonald: Since the minister indicated last Thursday in reply to a question from the leader of the New Democratic Party that he was getting close to a satisfactory resolution of the problem involved in cooling the water discharges of the proposed Darlington generating station, would he care to inform the House In some detail as to the nature of that satisfactory resolution?

Hon. Mr. Auld: Unfortunately, Mr. Speaker, both the ministers were ill over the weekend and so they didn’t have a chance to really get together.

Mr. MacDonald: While the minister is getting better, in both of his capacities, since in May 1976, two and a half years ago, experts in his ministry testified before the Porter commission voicing objections to the design principles of this station, and since this weekend a biologist of his department has indicated not only whitefish, but all the trout and salmon are likely to be destroyed by this pouring out of warm water into the lake, does the minister not think it is time for the government to reconsider the exemption of this plant from an environmental assessment so we can at least find out what the full consequences are going to be and so the recommendations can be incorporated into its design?

Hon. Mr. Auld: I think it’s fair to say, as far as the hot water effluent from Darlington is concerned, we have sufficient authority to ensure it will be done in a satisfactory manner. As I said on Friday, there is not unanimity among biologists as to how big a problem it is and how it might best be resolved, nor is there unanimity among engineers.

Mr. MacDonald: That should have been thrashed out in the environmental assessment committee, publicly.

Hon. Mr. Auld: I think we will reach a satisfactory solution and I think we have the authority to ensure that we do.

Hon. Miss Stephenson: The member knows perfectly well it has been thrashed out for 10 years.

LEGHOLD TRAPS

Mr. T. P. Reid: I have a question also for the Minister of Natural Resources -- in his weakened state we’re trying to take advantage of him -- in regard to leghold traps. Can the minister indicate what recommendations his committee on leghold traps made and what progress he is making to do away with them, and requiring Conibear traps or something such as that for trapping animals in Ontario?

Hon. Mr. Auld: I don’t think there has been any change since I reported last. I think I wrote a letter to the honourable member. It is still being worked upon.

Mr. T. P. Reid: By way of supplementary, in view of the fact this matter keeps coming up and has for the last number of years, can the people in the ministry and the people in the trapping field not come up with a satisfactory solution to design a trap or use a Conibear trap that will put the animals out of their misery quickly, rather than putting them through the torture, almost, of the leghold traps?

Hon. Mr. Auld: So far, there has not been a satisfactory resolution but, as the honourable member is perhaps more aware than I, a lot of work has gone into the problem and a possible solution so far. We are still hopeful we will find one.

PARK-AND-RIDE FACILITIES

Mr. Grande: My question is to the Minister of Transportation and Communications. Given the fact no one would like to see TTC fare increases for the coming year -- no one, that is except himself -- and given the fact the TTC talks about introducing methods to increase the ridership especially on the Spadina line, will the minister inform the House of what the ministry has done since this summer to urge Metropolitan Toronto council to build the park-and-ride facilities on the paved Spadina two-lane, double-lane -- whatever it’s called -- so the ridership on the Spadina subway line can be increased and at the same time relieve the traffic chaos south of Eglinton Avenue?

[3:00]

Hon. Mr. Snow: I am sure the honourable member knows the ministry made a commitment to the municipality of Metropolitan Toronto to pay our share of the subsidy for the capital cost of constructing that park-and-ride facility.

That offer still stands. The offer has been reconfirmed every time it has been discussed and to my knowledge the Metropolitan Toronto council has not taken any action to proceed with construction.

Mr. Grande: Is the minister aware of the reason why Metropolitan Toronto is not accepting the 75 per cent grant from the provincial government and I understand, the 25 per cent the Toronto parking authority will pay? Therefore, Metropolitan Toronto really don’t have to spend a cent on it. Is he aware of the reason why they are persisting in not building the park-and-ride facility?

Hon. Mr. Snow: Not offhand, I am not. The study that was agreed to has been carried out. It was a study to look at several alternative sites for parking garages. It was carried out in conjunction with the city of Toronto, with Metro, and with my ministry. A report was written, recommendations were made recommending that particular site, and the commitment for the funding was made, but to date Metro Toronto has not decided to proceed. I can’t really tell the member why they have not.

GRANTS FOR RESOURCE RECOVERY

Mr. J. Reed: I have a question for the Minister of the Environment.

Is the minister’s policy position on the funding of resource recovery technology for municipalities the same as that of his predecessor? Is he prepared, in the same manner his predecessor indicated he was, to broaden the base of those grants to incorporate technologies other than those specified up until the present time?

Hon. Mr. Parrott: The answer to the first part of the member’s question is yes, there has been no change in policy with the change in minister.

I don’t think there is any doubt that on a personal basis we, as a province, as a people, and as a society, must become very responsive to the possibility of separation of the waste itself into its various components. As we all know there is great value in every sense of the word in the material, both to keep it from going into landfills and into the value of the material itself in the recycling processes that are available to those materials. There is no doubt in my mind we must extend our services in this regard.

If the member was to ask me how many dollars we might put to that, I think we work in co-ordination with the federal government. They have a great interest in that. We certainly want to work with the municipalities, so I guess I am saying there is no change in policy. If anything, there is perhaps in today’s society a greater encouragement to the municipalities to become very involved.

Mr. J. Reed: Is the minister aware there is now, of course, a very contentious landfill site under consideration in the region of Halton?

Hon. Mr. Parrott: I have heard of it.

Mr. J. Reed: Knowing that, and knowing the options that we all know are available, would the minister be prepared to change or to try to help to change the thrust of that endeavour from a landfill site to a resource recovery system?

Hon. Mr. Parrott: I think the member has framed it in such a way that it appears to be an either/or. I don’t think he necessarily meant that and I will assume he didn’t.

If the member is asking me therefore if we will help in resource recovery, yes. I also must remind him that in any place in the world I know of, and certainly in North America, landfill sites are still an integral part, a very necessary part, of a waste management system.

EVICTION OF TENANT

Mr. Warner: Mr. Speaker, I have a question for the Minister of Consumer and Commercial Relations. The minister will recall that last week Mrs. Leso from 15 Orton Park came before the rent review committee. He will recall that subsequently she was evicted from her apartment at 15 Orton Park. So that other tenants who apparently face eviction because they will not pay illegal rent increases, I am wondering if the minister, will assist in stopping the practice, in finding out who the real owners of Toronto Apartment Buildings Company are, and ensuring specifically that a lady who is now in her eighth month of pregnancy will not be removed from the apartment building by December 15, as the owners have indicated she will, because she refuses an illegal rent increase?

Hon. Mr. Drea: First of all, Mr. Speaker, let’s clear up one thing: If the woman was evicted last Thursday -- I presume she was -- the sheriff had a full order. We went through it in committee and nowhere in there was the mention of an illegal rent increase -- nowhere. Let’s make that one very plain.

Secondly, if there is a female who is eight months pregnant and she is to be evicted on December 15 I presume that once again there’s a court order. If there is not a court order, it’s a simply question of the owners of the apartment issuing that kind of threat. That’s another matter.

If there is a court order, we are not going to bring the sheriff down again to the committee to show there’s a court order. If there’s a court order out of county court for an eviction, the place to appeal it, and the only place to remedy, is in the court.

If the member has any evidence of illegal rent increases or demands for illegal rent payments and he will bring them to my attention or to that of my parliamentary assistant, the member for Cochrane South (Mr. Pope), we will be pleased to investigate them at once.

Mr. Peterson: What a team.

Mr. Warner: Supplementary, Mr. Speaker: I want to make sure the minister doesn’t misunderstand. I would view and I hope he would agree with me that where the management --

Mr. Speaker: Does the minister agree?

Mr. Warner: That’s what I am asking him, Mr. Speaker. Now the two of us will ask him: Does the minister agree the serving of a notice of eviction by the management is simply harassment upon those tenants? I am not talking about a court order. Will he guarantee to those tenants they are not going to be harassed any longer? They have had enough of it. What they want is some protection from this government so that they will not be harassed by Toronto Apartment Buildings, whoever they may happen to be.

Hon. Mr. Drea: Mr. Speaker, now you see the whole course of the thing has changed. First of all it was an eviction order. Now it’s a notice by the landlord.

Mr. Warner: Notice of eviction from the landlord.

Hon. Mr. Drea: Notice of eviction -- that is the first step a landlord has to take when he is claiming someone is in arrears of rent. I said if there’s any question about an illegal rent increase or illegal payments of rent and if the member would bring it to myself or my parliamentary assistant we will start working on it this afternoon.

And I don’t know why the member has such difficulty in finding out who -- what is it? Toronto what?

Mr. Warner: Toronto Apartment Buildings Company.

Hon. Mr. Drea: Toronto Apartment Buildings. We will find out for the member within 24 hours.

Mr. Warner: Oh, you will? Okay.

Mr. Speaker: The time for oral questions has expired.

ANSWER TO QUESTION ON NOTICE PAPER

Hon. Mr. Grossman: Mr. Speaker, just before orders of the day, perhaps I might table the answer to question 154 standing on the Notice Paper.

BUSINESS OF THE HOUSE

Hon. Mr. Grossman: I might also indicate to those members who are in the House that whatever happens in the course of the day’s activities here, after some consultation with members opposite it appears there will be no votes today. If any should arise in the course of today’s activities they will be stacked until some time tomorrow.

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS (CONTINUED)

On vote 1102A, finance program; item 2, fiscal policy:

Mr. Peterson: Mr. Chairman, how much time do we have left on these estimates?

Mr. Chairman: Seven hours and 47 minutes.

Mr. Laughren: We’ve lost two minutes since the publication of today’s Hansard already.

Under the Treasury estimates this is what is known as the fiscal policy vote. While it is not relatively large in dollars, perhaps, it does have a rather sweeping mandate to direct taxation policy in the province and to deal with the responsibility for federal and provincial negotiations, including revenue sharing, I might add.

It deals with the sharing of the authority of responsibilities over things like resources, in which there may very well be debates coming up with the federal government. Also, of course, it deals with the whole question of revenue sharing with the municipalities in the province, not to mention taxation policies that affect all of us.

As a matter of fact, it is this vote, as I understand it, that allows the Ministry of Intergovernmental Affairs to exist, a point which my colleague the member for Welland-Thorold (Mr. Swart) was trying to stress to the Minister of Intergovernmental Affairs (Mr. Wells) in saying he should have more authority for this area than he presently has, since the funding is in this ministry.

I would like to say a word to the Treasurer about the whole question of federal-provincial conferences. If I read the scene correctly in Ottawa, the Prime Minister of this land is saying that the sharing of responsibilities and powers is going to be open for negotiations and that they want to hear from the provinces as to what their ideas are on the whole question of sharing of responsibilities and authority. That means that if there is going to be a debate then we want to be part of it.

I don’t mind telling you that I am uneasy about saying to the Treasurer: “You trip off to Ottawa and do the negotiations for all of us.” I am very uneasy about that I think there is too much at stake and that the Treasurer should in the New Year make an attempt to engage this House in a meaningful and substantial debate on the whole question of federal-provincial sharing of powers and responsibilities.

I am not talking about simply resources. I am talking about the whole question of the contribution and the whole question of what is a provincial jurisdiction and what is a federal jurisdiction, and how we can work together to make this a better land. We should be taking part in that debate. It should not be the Treasurer and his senior bureaucrats who simply carry on that debate on our behalf.

I might add that we have a minority government in this province. That puts special responsibility on the opposition as well as on the government. We have not only an obligation, we have what I would call the privilege of engaging in that kind of debate. That means that the Treasurer and the government that he represents must understand that clearly, must understand that it is not the old majority government days when you went your own way, did your own thing and told no one until after the fact.

There are already remnants of that around. The way you dealt with the GATT negotiations, for example; and the way you dealt with your submission to the Reisman report, that was not done in an upfront kind of way. The way you dealt with the oil price increase was not done in a proper way either. You come back here and give conflicting statements without engaging us in any kind of meaningful debate. In other words, the impression you are giving to Ottawa is that you are ambivalent about a lot of things about which you should have strong views.

That doesn’t serve us well in the province of Ontario. Quite frankly, I don’t think it serves Ottawa well either. They should know full well where you stand. We cannot have you going to Ottawa in a wishy-washy or ambivalent way.

[3:15]

I refer to the sales tax reduction which occurred this year. The Treasurer endorsed what the federal government did and said: “Well, that sounds reasonable. We’ll pick up the one point for the required number of months.” Then after we got into the program he indicated he was not too sure it was a good thing to do because it perhaps benefited the sale of imports mainly as opposed to Canadian-made or Ontario-made goods. Is he now feeling, somewhat sheepishly if I might use that term, that maybe the Quebec government had the right idea when it talked about selective total reduction or elimination of the sales tax?

When the Treasurer said at one point he thought that the reduction had maybe benefited imported goods more, I’d like to know where he got that information. Has he conducted a study to indicate what was sold as a result of that reduction? Obviously, there’s no scientific way of accounting for every dollar of increase, but surely the Treasurer could tell us that; unless he was speaking off the top of his head, and I can’t imagine the Treasurer doing that. He must have had some studies on which he was basing his opinion that perhaps this broad reduction in sales tax isn’t the right answer and that the Quebec route is better. We don’t know. We haven’t got studies either, but we’d like very much to know if the Treasurer has done any of those.

That’s another case of a contradiction on the part of the Treasurer. I know he’s attempting to find his way in a new ministry, but these are policy areas in which his senior people have been involved for some tune. I see no need for the kind of ambivalence or contradictions that we continually get from over there. I’m talking about tax concessions. I think of the reduction on manufacturing equipment and machinery, where he says there will be no sales tax on manufacturing equipment.

We always used to ask his predecessor if he knew what gains that gave us, how many jobs that created, and what it did for us. He was never able to tell us. He mumbled a lot, but he was never able to tell us how many jobs it created. The more I look at our industrial structure, and at the imports and the deficits we have in machinery, I have grave suspicions as to where those jobs were created; or if indeed industries did buy more equipment because of the reduction, even that’s debatable. If they did, where do you think they bought the machinery? In Ontario?

Mr. Haggerty: No.

Mr. Laughren: Not likely. Probably not even in Canada, because we have an enormous deficit of over $3 billion on machinery. That seems to be a strange place at which to reduce the taxes when ifs benefiting employment somewhere else; if indeed, as I say, it’s even benefiting employment elsewhere.

I think the Treasurer’s got to come up with some straight answers on that whole question of broad tax concessions or reductions. We need a more scientific approach to this. I know that later on in these estimates there’s a vote on statistical information and so forth. Perhaps that’ll be a time, if we don’t run out of hours, when the Treasurer can share with us some of the things they’re doing in that branch of his ministry. That could be a very important branch. I happen to think there’s a paucity of statistics in this province, not too many as some people would say. We’re living in a world where we need information, and information is something we don’t have. If the Treasurer has it, then that would be very nice, we’d like to see it.

Just while I’m talking about tax concessions, grants and so forth, I’d like to ask the Treasurer for a moment about the whole question of the Ontario Development Corporation and its branch, NODC. That’s a whole question of regional development and taxation policy. It fits perfectly, as I know you agree Mr. Chairman, with this particular vote. Having seen the quizzical look on your face, I thought I’d better add that.

I had a query from a manufacturer in Sudbury. He said: “Would you check for me what kind of loans are being given to steel fabricating companies in the Sudbury basin?” It seems to me that there are a number of marginal steel fabricating plants in the basin. None of them is doing that well and some of them are just borderline. All of a sudden a new company, or even an existing company, gets a low-cost loan from the Northern Ontario Development Corporation, puts on an addition, is able to be subsidized in that way, and two or three others go out of business when that happens.

Mr. Chairman: I was just checking. I see the Ministry of Industry and Tourism estimates will come up under the resources development committee.

Mr. Laughren: That’s very true, Mr. Chairman. I think you will also agree that the description for this vote talks about exactly what I’m talking about too. I won’t dwell on it very long.

I did want to say one thing to the Treasurer, if you will allow me. I asked his government if they could tell me what was going on with all the NODC stuff. I got a reply, saying: “In response to your letter of October 27, 1978, concerning financial assistance to companies in the Sudbury area, I am attaching a list of NODC borrowers supplied to me by them.” By them! “The table shows employment expected in the first year of operation after the assistance was granted and our projection for employment at the end of the fifth year.”

Here’s the final sentence -- the Provincial Secretary for Resources Development (Mr. Brunelle) doesn’t waste words; he gets right to the point: “Unfortunately, the only way that current employment figures could be verified would be by consulting these firms individually.”

That struck me speechless for a moment. But only for a moment. I thought, here is the government handing out these NODC loans in the Sudbury basin. The people are telling the government they expect there will be projected additional employment at the end of the first year and by the fifth year. Then the loan is granted. Presumably there’s some auditing done of the financial stability of the company and so forth -- I accept that -- but then it’s dropped. Apparently there is no further monitoring.

It’s not a case of saying we don’t trust those people. Surely the government would want to know to what extent its loans were successful in doing what their purpose was.

The Treasurer may recall that his own government had a report in which it said unequivocally -- as a matter of fact, it was the Northeastern Ontario Regional Strategy report. Perhaps the Treasurer remembers that; it’s commonly known as NORS or, as the Sudbury Chamber of Commerce would call it, Profile in Failure.

The Northeastern Ontario Regional Strategy report said the following: “The mandate of the Northern Ontario Development Corporation should be strengthened and broadened, particularly as it relates to small business.” There’s one of his government’s own reports -- as a matter of fact, I think that came out of the Treasury -- saying that it should be strengthening the NODC’s role in the development of northern Ontario. And he followed up with that kind of stuff.

That’s not a serious attempt to diversify the economy of the province. It’s not a serious attempt to make sure that the government is not hurting existing employers with its scattergun approach to the provision of loans. There has got to be a better way than that.

Maybe that’s where the statistical services branch of his ministry should move in. If the Ministry of Industry and Tourism is not doing the job, then the Treasurer, as the person who is responsible for the economic development of the province, should move in.

The Treasurer in this province has never been known to back off from adding additional responsibilities or powers to his ambit, and I don’t think the present Treasurer should, if he can see that the job is not being done.

We did some checking on what happens up in Sault Ste. Marie with the NODC loans. It’s not very encouraging. Perhaps one reason -- not the only reason, I’m sure -- is the lack of monitoring on the part of this ministry.

The other thing I want to talk about -- the only other major thing -- is the whole question of property tax reform, which comes under this ministry. It has been a long, involved, agonizing process in this province. One would wish that we could stand up and say, “Finally, property tax reform is with us”; but it’s not.

The Minister of Revenue’s (Mr. Maeck) attempts the other day to con us that he had brought in property tax reform didn’t wash with anyone; that’s not property tax reform.

As an opposition party, we tried to do a couple of things. We tried to say to the ministers over there, to the government, that if you’re worried about the opposition, let us tell you what we will support. We felt that in this way the government would not sit back and say, “We don’t dare do anything because the opposition parties might not support us,” and so forth, when they were talking about market value assessment.

We drafted a resolution -- it was debated in this chamber -- which would have alleviated most of the problems. There is no simple, all-encompassing answer to property tax reform but we felt that the provisos that we put in our resolution would have made it palatable, not only to the government but to the municipalities out there as well. It was not going to bankrupt the province, and it was not an expensive proposal at all.

As a matter of fact, there was very little in it that would have cost more money. As a matter of fact, I don’t think there was anything in it that would have cost money. It would have required some shifting but certainly not any big, new government program. Socialists are very careful about building bureaucracies. We’re very cautious that way.

Mr. J. Reed: Only by comparison to the Tories.

Mr. Martel: We don’t have 700 boards and commissions. You built all of those.

Mr. J. A. Taylor: Pardon my misunderstanding.

Mr. Martel: You’ve got 700 boards and commissions, all negotiated by Tories.

Mr. J. A. Taylor: Be serious.

Mr. J. Reed: They’re all run by the Tories.

Mr. Laughren: I don’t mean to be provocative, Mr. Chairman.

Mr. Watson: Make them all civil servants.

Mr. Martel: You should know about the civil servants.

Mr. Laughren: If ever the government wants to see a bureaucracy they should look at the Ministry of Northern Affairs, where they have not created a single new program that I can see. All they’ve done is created a bureaucracy to deal with existing programs in other ministries. That’s all.

Mr. Lane: That’s not fair.

Mr. Laughren: Name me one new program.

Mr. Lane: That’s not a fair statement. You were present when we delivered fire trucks to your community.

Mr. Martel: And that’s dead.

Mr. Laughren: That’s from the Solicitor General.

Mr. Lane: What’s dead?

Mr. Martel: That is dead, that program.

Mr. Laughren: Try to get a fire truck now.

Mr. Lane: You should be brought up to date on it.

Mr. J. A. Taylor: You never appreciate what is done for you.

Mr. Martel: The Treasurer said that there would be no more of that.

Mr. Chairman: Order. Would the member for Nickel Belt please direct his questioning through the chair?

Mr. Laughren: Thank you, Mr. Chairman. The estimates are for an exchange of views not just questions, I’m sure you’d agree. I wonder if I could just resolve this debate that’s going on at my side here, Mr. Chairman. There was a program in which the Minister of Northern Affairs (Mr. Bernier) said to the Solicitor General, “Give us some fire trucks so that the minister could have something to do and deliver them to the small communities in northern Ontario.” There was a few of those delivered, but that was through the Ministry of the Solicitor General. That’s where they came from. They didn’t come from the Ministry of Northern Affairs. The Ministry of Northern Affairs is nothing but a front.

Mr. Lane: Come on, you know better than that.

Mr. Laughren: It’s a public relations front and you know it. If, on the other hand, this government had accepted the amendments which my colleague the member for Sudbury East (Mr. Martel) put to the act when it was brought in, that would be a ministry with some policy --

Mr. Chairman: Now, back to vote 1102.

Mr. Laughren: -- and with some programs that would do something for northern Ontario.

Mr. Martel: Yes. Read it some day. It will do you good.

Mr. Lane: You should ask your regional chairman how they like the northern ministry in Sudbury.

Mr. Chairman: Order.

Mr. Laughren: Mr. Chairman, it’s not a question of -- well, I’ll get back to these debates. I wanted to put on the record in these estimates what our property tax reform would have done --

Mr. Lane: You don’t want to talk about the positive aspects of it, that’s the trouble.

Mr. Martel: Vote for Leo.

Mr. Laughren: -- so that there’s no mistake about it.

1. We would have assured that there was no general increase in taxes to the residential sector or to the small business sector, no shifts to them.

2. We would adjust the excessively inflated residential values in the larger cities so that home owners do not pay a disproportionate share of taxes and so that municipalities receive a more equitable share of provincial grants. In other words, a lot of the property taxes that are being paid now are not being paid on the homes, they are being paid on the inflated land values, particularly in places like Toronto and particularly in Toronto’s west end.

3. We would have provided a phase-in adjustment program for home owners with graded exemptions and other special circumstances to prevent sudden and excessive tax increases as a result of the implementation of assessment reform. That was to allay the fears of people who had homes from the war years, under the DVA program or whatever. That would have alleviated that problem.

4. We would have provided a mandatory pass-through to tenants of any property tax reduction on apartments. Surely that’s only fair, to ensure that the reduction isn’t absorbed totally by the landlords.

[3:30]

5. We would have assessed farm land at agricultural value except where it is held by speculators or developers. Quite frankly, I’ve never heard fanners suggest otherwise. They believe land should be assessed at agricultural value.

6. In order to make things even better in the province of Ontario we said -- and this is an important part of our proposal -- that we should legislate the revenue-sharing program between the province and local governments. That should be done, because quite frankly it would make it easier for the Treasurer too if he would legislate that portion of money that goes to the municipalities so they know where they stand; and it makes his budgeting process that much simpler as well.

The Treasurer should apply the property tax credit directly to the payment of the property tax bill at the time of payment. We understand there might be an administrative problem, but not for a minute do we think it is insurmountable. That should not be impossible, and that is something we would work very hard to do.

Hon. F. S. Miller: You can’t forget the bureaucracy needed to do that.

Mr. Laughren: We think the Treasurer’s government created an unbelievable bureaucracy 10 years ago to bring in property tax reform and they haven’t used it. He remembers doesn’t he, taking over assessment from the municipalities in this province; that was to bring in property tax reforms. The government created the bureaucracy, not us.

Mr. Martel: You have been in power 35 years, who in hell created the bureaucracy?

Mr. J. A. Taylor: Would you continue that? Would you continue province-wide assessment?

Mr. Laughren: Absolutely: I would, yes.

Mr. Chairman: Order. I would be glad to recognize the member for Prince Edward-Lennox if you are finished.

Mr. Laughren: No, but perhaps he will get on his feet next time.

7. Finally, we would undertake a program to reduce the educational portion of the property tax. That would do a couple of things, Mr. Chairman.

Mr. J. A. Taylor: Where are you going to get the money from?

Mr. Laughren: We have always I felt educational costs are not something for which property owners should bear such a large burden. Also, it would relieve part of the problem for senior citizens. The Treasurer would receive more of the educational revenues from the more progressive kinds of taxation we have in the province.

Surely there is nothing complicated about that. It is not more expensive, the money has to come from some place. It is a case of whether it is taken from an equitable source or a regressive source; it’s as simple as that.

It’s not creating any new money at all, or creating any new programs at all; it’s a case of making it more equitable than it is at the present time.

This government isn’t interested in equity so they don’t need to pretend to make these equity noises over there. I have done a little bit of checking on what has happened. This, by the way, is completely within the responsibility of the Treasurer concerning income distribution.

I hear all sorts of stories about what the government is doing with its handouts to people, and tax concessions and property tax rebates. When you look at the figures over the years there is no redistribution going on, none whatsoever. Of course, the pie is getting bigger, naturally, but there is no redistribution, none at all. Let me give you just a couple of figures.

In Ontario, for example, in 1965 the lowest 20 per cent of income earners, the first quintile, had 6.8 per cent of the income. In 1973, the latest figure which I could obtain, they had 6.4 per cent. It’s even less. I suppose that’s your idea of redistribution of equity.

The second 20 per cent, by now you are up to 40 per cent of families, had 14 per cent in 1965, and in 1973, they had 13.6 per cent; they had less too. That’s the bottom 40 per cent of family earners we’re talking about.

Mr. J. A. Taylor: How do you define families?

Mr. Laughren: These are Statistics Canada figures and they have a constant definition of families; you don’t need to worry about that, don’t concern yourself about that, that is constant. Your red herrings have no bearing in this debate at all.

So here in the period 1965 to 1973, if there is any redistribution it’s the wrong way.

Mr. J. A. Taylor: You are going to homogenize society.

Mr. Laughren: When the Treasurer talks about tax rebates, OHIP payments and all those sorts of things, he’s not talking redistribution at all.

Mr. J. A. Taylor: That’s right.

Mr. Laughren: I know he would have us believe that, but it is simply not true. I must say the top 20 per cent hasn’t increased its share; it went from 37.9 per cent down to 37.3 per cent, to be perfectly fair.

Mr. Martel: Wow! What a loss.

Mr. Laughren: That is not redistribution either; there is no redistribution, the figures are the same. I know that is the way you like to keep it when you are at the top of the heap, but that is one reason we are here; that is one reason the New Democrats are a force in Ontario and will continue to be, because you fail to bring any kind of redistribution to your economic programming, none whatsoever.

Mr. J. A. Taylor: That’s nonsense and you know it; be serious.

Mr. Laughren: As a matter of fact it is more regressive now than it was 20 years ago. I can even give you figures for a longer period of time, let’s take 25 years. Now you have provoked me. I was only going from 1965 to 1973, but let’s go back to 1951. These are Canada-wide figures, but Ontario is indicative. In 1951 the first quintile -- the bottom 20 per cent -- was at 6.8 per cent; in 1976 they had 5.9 per cent. They had dropped almost a full percentage point of their share of income. The second 20 per cent was at 12.7 per cent in 1951 and was down to 12.5 in 1976. So there you go. In 25 years -- and you have been in power longer than that -- you haven’t affected distribution, except to make it more regressive than it was then.

Mr. J. A. Taylor: That’s nonsense and you know it.

Mr. Laughren: That’s some kind of record isn’t it? You should be ashamed of yourselves.

Mr. J. A. Taylor: You would destroy the incentives and homogenize the whole social and economic fabric of the country.

Mr. Laughren: And the Treasurer has the ultimate responsibility for that.

Mr. J. A. Taylor: You are just keen to create a new leisure class from the least able --

Mr. Martel: The leisure class? Some lawyers know all about it.

Mr. Laughren: I’ll tell you, Mr. Chairman, the Ministry of Community and Social Services administers the programs and the moneys that are provided --

Mr. J. A. Taylor: You are masters of self- deception; you believe all that guff you espouse.

Mr. Laughren: The same with the Provincial Secretariat for Resources Development, and Health, et cetera --

Mr. J. Reed: Give it to the socialists.

Mr. Laughren: -- but it is the ultimate responsibility of the Treasurer to determine the economic policy of this province and to determine the degree of redistribution that will occur.

Mr. J. Reed: Lay it on them.

Mr. Laughren: If the Treasurer determines there will be no redistribution then there simply will be no redistribution; and that is what has happened.

I have heard this Treasurer say a lot of things about a lot of topics. I have yet to hear him mention the word redistribution. I have yet to hear him make any kind of commitment whatsoever to redistributing wealth in this province. He has no intentions of doing so, and she should fess up as they say.

Mr. Peterson: ‘Fess up now.

Mr. Laughren: I don’t expect the member for London Centre to agree with my pitch, but I am sure the time will come when you are going to have to admit it.

Mr. Martel: He knows it is true.

Mr. Laughren: As a matter of fact -- and I wonder if I could go to the 1977 figures, these were just handed to me.

Mr. J. A. Taylor: Who sent that to you? Who ran that in to you?

Mr. Laughren: The page just got it for me.

Mr. J. A. Taylor: Where from?

Mr. Laughren: I have my sources. It was in a brown envelope.

Mr. J. A. Taylor: I bet you have.

Mr. Peterson: The Daily Worker.

Mr. Laughren: These are the percentages of total income received, by quintiles again, comparing 1965 to 1977.

Mr. J. Reed: The editorial from the Daily Worker.

Mr. Laughren: From 1965 to 1977, the lowest quintile was 4.4 per cent in 1965, down to 3.9 per cent in 1977.

Hon. F. S. Miller: Is that the year quintiles were born?

Mr. Laughren: The second percentile; 11.8 per cent in 1965 and 10.8 per cent in 1977; a full percentage point drop. I guess you will stand up and say you are trying to build an equitable society here in Ontario.

Mr. J. A. Taylor: Stop talking about an equitable society, start talking about benefits.

Mr. Laughren: Talk to somebody else. You will never convince us with figures like that.

Mr. J. A. Taylor: Tell us about the free stuff, it doesn’t show.

Mr. Martel: You guys at the top know all about that.

Mr. Laughren: What is interesting is what you are succeeding in doing, and your policies the last few months bear this out. You are firmly launched on a program of free enterprise for the poor and socialism for the rich; that is exactly what you are doing with your grants to the private sector.

If the Treasurer wishes to pretend otherwise, and I think he will, he will stand up and say: “We think by providing incentives to the private sector it creates jobs, it creates wealth and everybody is better off.” Are they really? If that is the case why do the figures not bear it out? What has happened since the war? It simply hasn’t happened, because there simply has been no redistribution. I would very much like to hear the Treasurer’s views on redistribution and what he has in mind.

I hear the Minister of Revenue stand up and talk about the Gains program and so forth; there was much beating of collective chests over there when it was brought in.

Mr. J. A. Taylor: All the free stuff.

Mr. Laughren: Yes; “all the free stuff,” he says. In the end what do you end up with? Regressive distribution, that’s what you get; regressive distribution. You’re not giving anything to anyone. You’re taking it away from them as you always have.

Mr. J. A. Taylor: All right, would you do away with those programs? Would you do away with Gains? Would you do away with free OHIP? Would you do away with those programs? Come on, let’s flush it out.

Mr. Laughren: Mr. Chairman, I guess the member for Prince Edward-Lennox missed a very elementary economics lesson the other day when I said to the Treasurer that what we on this side believe is that we must create new wealth if we’re going to redistribute wealth. We believe there should be creation of new wealth and we’ve been trying to say to the Treasurer -- and I’ll be saying more about that this afternoon -- “Look, there are ways you can create new wealth. You’re frittering it away. It’s there in all the employment figures and you’re not doing anything about it.”

For example, we would not create expensive new public programs without the wealth with which to pay for them. You’re the people who are doing that. While the public sector was growing, you ignored the private sector and any other sector that was producing wealth.

Mr. J. A. Taylor: How much money would you borrow? How much money would you borrow and where would you borrow it from?

Mr. Laughren: You have only concerned yourselves with making sure you and your friends had enough, instead of being concerned about redistribution and creation of new wealth.

Ms. J. A. Taylor: You’re Alice in Wonderland.

Mr. Laughren: You have ignored that problem in Ontario and it’s primarily because of your economic system, not ours.

Mr. Martel: What system? They don’t have one.

Mr. J. A. Taylor: Too much socialism, that’s the trouble.

Mr. Laughren: When we are given the opportunity to manage the economy of Ontario we will do it in a much different way than you have done it.

Mr. J. A. Taylor: The first thing you will do is file bankruptcy.

Mr. Laughren: We will not have 300,000 people unemployed.

Mr. J. A. Taylor: You would redefine “employment,” that’s what you’d do.

Mr. Laughren: We will not have the decline in jobs in the most important sectors in our economy. It’s your system that has done that, not ours. When we create new programs we’ll be able to afford them.

Mr. J. A. Taylor: Where would you get the money?

Mr. Laughren: We will create the new wealth through a --

Mr. Lane: You are dreaming.

Mr. Laughren: You may think we’re dreaming but I want to tell you that your system is not working. How can the member for Algoma-Manitoulin (Mr. Lane) possibly be a member of that government, given what’s been done to his area and given what’s been done to northern Ontario?

Mr. J. A. Taylor: People there are sensible.

Mr. Laughren: It takes a special kind of cynicism to sit on the government given its record in northern Ontario, I want to tell the member for Algoma-Manitoulin, and I’m being kind to him.

Mr. Lane: Just look at what has happened in northern Ontario since I came down here in 1971. Things have improved a great deal.

Mr. J. A. Taylor: That’s why he’s here.

Mr. Laughren: Oh, yes. Perhaps you could come to Sudbury --

Mr. Chairman: Would the honourable member disregard the interjections and turn a little bit to the right here and address the chair?

Mr. Laughren: Mr. Chairman, I’m trying to avoid being provocative but the members over there should not posture about redistribution and they should not posture about their programs to revitalize northern Ontario. They should be ashamed of their policies in the north, whether it involves the Northern Ontario Development Corporation, whether it involves resource taxation, whether it involves processing allowances, whether it involves pollution of the environment. I want to tell you they have nothing to be proud of in northern Ontario.

It’s only because of a vigorous opposition in the north that things are even the way they are. They would he much worse if you had your way. You need not look any further than the Sudbury basin to see what can be done where there is a strong opposition to the kind of polluting of the environment that went on there for many years. It was because of a vigorous opposition that the environment has been cleaned up somewhat in the Sudbury basin, no thanks to that government over there. You attempted to cover up at every opportunity hand-in-hand with moo and Falconbridge. You don’t need to take any credit at all for anything that has improved in northern Ontario; it is not because of you.

Mr. Chairman, I’ll stop speaking on the fiscal policy vote for the moment and let the minister reply.

Hon. F. S. Miller: There were a number of points touched on. I hope I made notes on them as he passed by them and hope that I can, not satisfy him -- I’ve given up trying to do that -- but at least give him the truth.

[3:45]

The sharing of powers is something that, while as Treasurer I have, of course, a real interest in, I would say the great bulk of the discussions on that are held at the constitutional conferences where the Premier (Mr. Davis), the Attorney General (Mr. McMurtry) and the Minister of intergovernmental Affairs (Mr. Wells) talk rather than the Treasurer. I would suggest your attempts to link me directly to those or to --

Mr. Laughren: On economic matters.

Hon. F. S. Miller: On economic matters, yes, but I think you will find the great discussions going on right now are on reform of the constitution, a look at the Senate, the question of the provincial versus the federal authorities and so on. Within that, there are many things that touch Treasury, and of course I am interested in them and offer opinions, but traditionally the major discussions are taken over by those three gentlemen.

On sales tax I made a comment one day to the press. I think I have pretty good relations with them most days of the week. I don’t try to hide behind too much of a smokescreen. In fact, if anything I am often too easy to understand; whether I am right or wrong is not the point.

Mr. Laughren: I wish you were that way with us.

Hon. F. S. Miller: What I tried to say that day is that, obviously, when we stimulate overall sales we do stimulate some imports. The first impression I had been given was that there had been a fair stimulation of imported goods, but I was told later on that we were able to get some better information and, in fact, there was some very real degree of domestic stimulation of things like furniture and automobiles, which led to some loss of revenue, but a good deal of Canadian content was involved.

Mr. Laughren: Will you table that information?

Hon. F. S. Miller: If it is in a form that can be tabled, I would he quite happy to do so.

The Quebec experiment was very interesting and doesn’t deserve to be dropped without review. I suspect the real motives had nothing to do with the final outcome. It was really something of a political struggle between Ottawa on the one hand, which announced the policy, and Quebec on the other hand, which said they wouldn’t accept it hut they would give a better variation.

In fact, the taxpayers of Quebec got it both ways in the final analysis. There is one way they are still going to get it because the deficit in Quebec was materially affected by their unwillingness to go along with the plan. I suspect you will find tax increases there.

I thought a good deal of the sound and fury emanating from the first ministers’ conference at Ottawa occurred when Quebec time after time listed all the losses of revenue they could attribute to the federal government as a preparation for some kind of a tax increase to cover up this very fight, and a couple of others they haven’t necessarily won.

Putting that to one side, I think it is still worth watching very specific tax changes. I don’t want to rule out the possibility of doing something like that as the need arises in this province. We did do it, as a matter of fact, a few years ago when we said we would have the automobile sales tax rebates for a given period of time.

We have a study here; which I suppose you have seen, I should ask to make sure. I think it is public information. It was done by the Conference Board in Canada on the role of provincial governments in economic stabilization and on the specific case of Ontario’s auto sales tax rebates.

I am sure you are aware of that. It increased sales in the one year of 1975, as I recall, by 46,000 vehicles; and probably there was a drop in the next year of about 40,000 or 41,000.

Mr. Peterson: For a net increase of about 8,000 vehicles.

Hon. F. S. Miller: That wasn’t the purpose and that is exactly what this paper shows.

Mr. Laughren: We know what the purpose was there. It just happened to be an election year.

Hon. F. S. Miller: Just a second. The purpose was to assist employment at times when there would otherwise be a slackening of demand.

Mr. Peterson: Before an election.

Hon. F. S. Miller: Well never.

Mr. Peterson: I just want to respond to that right now, if I may. One has to admit that the economy of the country and of this province, by any indicator, is in far worse shape today than it was in 1975. We have more unemployment, we have higher inflation, we have anything you want to mention; that’s fact, If your logic is correct, that it was such a wonderful thing to do then, why aren’t you doing it now?

Hon. F. S. Miller: Mr. Chairman, that was aimed at a particular sector. That particular sector was the automobile sector. It creates one job in six in the province of Ontario. The automobile sector right now is very strong and, in fact, doesn’t as far as I can tell need assistance at this point.

Mr. Laughren: That’s not what you said the purpose was.

Hon. F. S. Miller: I am talking about right now in sales. What this study showed, as I recall, was that we managed to move certain sales from the 1976 year into the 1975 year and we caused a slight diminution in the 1976 year which was predicted to be a good year and remained I believe a good year. Effectively what government was able to do was dampen the swings, and I think you would agree that in any person’s life that makes better utilization for the employee and for the industry because it allows for much better planning. I think it was used as an interesting case study as to the effect of a government tax measure in the economy, and I hope in the fairness of this House you would say once in a while we do something that achieves the objective that we all search for, and that is to maintain the highest possible level of employment at the least possible cost to the taxpayer.

I simply said, though, that that kind of selective change deserves study; and again, to reply to the member for London Centre, I don’t rule us out doing something right in the middle --

Mr. Peterson: Right in the middle. You have got Walker to the north -- to the right.

Hon. F. S. Miller: Who’s to the right? I don’t believe it.

Mr. Laughren: Gord Walker, you believe that.

Hon. F. S. Miller: In any case, when the time comes, I hope and trust we will have your approval of certain selective measures as required.

Mr. Laughren: As long as they’re not regressive.

Hon. F. S. Miller: I guess I have trouble with the words regressive and progressive.

Mr. J. A. Taylor: They mean just the opposite.

Hon. F. S. Miller: On production machinery, I would be sure the member has seen a report that I understood was tabled by the previous Treasurer. I have not personally reviewed it but I am quite willing to have it exhumed if necessary. It’s a report that did look into the effects of the sales tax elimination on production machinery and its effectiveness in terms of stimulating investment in --

Mr. Peterson: It was the Liberal amendment that forced you to do that.

Hon. F. S. Miller: I again would quote Jimmy Allan, who I think is perhaps one of the finest people ever to occupy a seat in this House, one whom I learned a great deal from, and Jimmy used to say: “You can get a great deal done if you make sure somebody else gets the credit for it.” I believe that. In fact, if you wish to take the credit for it and will back us, I am delighted.

At that point, as I recall, the member got into a discussion of NODC. I think it would be proper for me not to respond to that because I think the chairman pointed out that it was more properly under the estimates of Industry and Tourism. However, I can safely say that regional development was talked about at the first ministers’ conference and we expressed in Ontario, talking about regional development for the whole country, not just for the province, we pointed out that regional development is something that obviously all governments must strive for. We must strive to assist the more underprivileged areas or remote areas. They don’t necessarily have to be remote to be under-privileged. Cornwall would be an example of an area that’s had real employment problems, I think you would agree.

Mr. Laughren: Sudbury.

Hon. F. S. Miller: Sudbury, yes, in its own special way it certainly has. But to continue: We felt, in fact, too much of Canada’s relatively scarce capital had been, we thought, unwisely invested in some of the transfer programs to areas that didn’t have the natural reasons, the strength upon which industries could survive. Obviously a nickel mine is going to be near the source of the metal; obviously a fishery is going to be by the sea.

Mr. Peterson: Why don’t you put a nickel mine into Cornwall?

Hon. F. S. Miller: But trying to put certain manufacturing plants in locations where they cannot possibly remain competitive can, in fact, simply dissipate the resource. In Ontario, we have worked hard recently with the federal government, and I believe with some success with Mr. Lessard, to point out that we haven’t had our fair share of regional economic expansion money, as I think you would agree --

Mr. J. A. Taylor: No doubt about that. Just promises.

Hon. F. S. Miller: -- and that eastern Ontario, northern Ontario and specific industries like the forest products industry deserve assistance. We can build on the strengths of northern Ontario’s forest products industry. We can get heavily involved in the reforestation projects we talked about in my previous ministry.

Mr. Laughren: Two for one.

Hon. F. S. Miller: Three, perhaps, with some luck. We can create the nurseries that will grow the trees that will replant the forest, with assistance from the federal government. We must work at those, at the same time realizing that to ignore those parts of Ontario that may be our most vibrant and healthy, and which can attract new industrial investment, would be foolish. In other words, we must also build on our strengths.

In trying to have a direct contact with Mr. Lessard, I said to him that I would welcome more direct personal discussions, more telephone calls to iron out the North Bay kind of problem -- I’m sure the member knows I intervened in that one with him on a direct basis to solve something that could easily get tied up in red tape for month after month -- and personally make the kinds of decisions I think politicians are supposed to make, rather than simply relegating them to the process and let them surface as time goes on.

I am sure that will begin to pay dividends, and I am sure that eastern Ontario and northern Ontario will start to see some of the results of that kind of thing. I sincerely hope so. We have to build on our strengths, rather than dissipate our resources.

You got into property tax reform quite a bit. I have been a student of property tax reform since long before I became Treasurer. I guess it is one of those programs that everyone can agree with in principle and then one realizes it is a program that has within it immense changes to individuals.

Mr. Laughren: The seeds of your destruction.

Hon. F. S. Miller: Anybody’s destruction, if you want to put it that way, if it is improperly done. I don’t think any politician should ignore it, because if a program has within it the seeds of the destruction of any government it is because it isn’t meeting the needs of the people it serves. It is as simple as that.

Mr. Peterson: That’s a weird political philosophy.

Hon F. S. Miller: That is not a weird political philosophy; it is a simple statement of fact. If, in fact, you bring forward programs that you cannot convince the people you serve work to their benefit, to the point where as the honourable gentleman suggested it would be the seeds of our destruction, then obviously that program wasn’t meeting the needs of those people or wasn’t properly sold to them, one of the two. I think almost any of us can agree.

Mr. Laughren: Like your unemployment policy.

Hon. F. S. Miller: Therefore, any time a large group of people in this province tell you that they can see that this will cause them untold problems, any government is wise to sit back and very carefully analyse the validity of those objections and the routes to minimize them, if they can be, while achieving what I have to say are tremendously worthwhile objectives.

Mr. Peterson: Politics has nothing to do with leadership, with guts, with foresight; it has nothing to do with that. Right, Frank, as long as you get elected today?

Hon. F. S. Miller: David, I don’t think that is the case at all. I think you have misinterpreted it entirely. I am only pointing out to you that you and I can sit here -- I don’t like to sound heroic, but I think I have tried to show in the past that I am willing to take steps that can get rid of me or one of my members because of action I take.

Mr. Laughren: Primarily the latter.

Hon. F. S. Miller: That’s true. I can recall one of your colleagues who sits within a seat or two of you in this House telling me one night after I visited his riding -- and, you know, we can be friends outside of this House even though we are enemies within it --

Mr. Laughren: Name one.

Hon. F. S. Miller: -- that I had assured his re-election, I had assured Eddie Sargent’s re-election, I had assured Bob McKessock’s re-election, and he still had to admire me because he knew darn well that what I had tried to do was something that had to be done.

[4:00]

Mr. Peterson: The surprise was that you got elected. But number two, everything you did was wrong, for God’s sake.

Mr. Deputy Chairman: Order.

Mr. Peterson: All the fuss amounted to nothing.

Mr. Laughren: Just like the Liberal restraint program.

Hon. F. S. Miller: I’m not going to get into the merits of whether I was right or wrong, but at least I was doing --

Mr. Laughren: The Leader of the Opposition (Mr. S. Smith) wouldn’t have closed any hospitals.

Hon. F. S. Miller: -- rightly or wrongly, what I believed in. Would you give me that much?

Mr. Peterson: It didn’t work much.

Hon. F. S. Miller: I ended up in hospital, if you recall.

Mr. Deputy Chairman: Order.

Hon. F. S. Miller: Therefore I wasn’t there to see the conclusion of the program.

Mr. Laughren: The trouble is you keep changing your mind about what you believe in. When you change ministries you become schizophrenic.

Hon. F. S. Miller: Only since I’ve started dealing with Her Majesty’s opposition; I keep seeing two of you with different heads.

Mr. Laughren: Are you talking about Janus again?

Hon. F. S. Miller: Yes.

Mr. J. A. Taylor: Many faces.

Hon. F. S. Miller: He’s teaching me a great deal about the kinds of things an engineer never learns. He talks to me about Roman gods. Janus could look forward and backward at the same time; I think for a politician that would be an admirable configuration.

Mr. Laughren: He thinks Archimedes was a god.

Hon. F. S. Miller: Archimedes? That’s a six-cylinder Chevrolet.

Mr. Peterson: Does Rendall write your jokes?

Hon. F. S. Miller: Right now he’s disavowing me as minister as well; back to work.

Property tax reform obviously had a number of component parts. You went through a list of seven or eight things. One of them I was intrigued with was number seven which was, apply the property tax credit directly to the payment of property tax bills at the time of payment.

The old system of property tax subsidies, if you recall, involved a payment to municipalities that was deducted by them before they sent out the tax bill. It was deducted no matter how many properties were owned, no matter how well off the owner was, on a per property flat amount across the municipality. I think I got about $50, as I recall, against my property in Muskoka.

Of course, there were inequities in that that did the very things the member argued about later. It didn’t do anything for income redistribution. It didn’t allow for the fact some people were able to pay taxes others were not. Our present system of giving back the property tax credit is a program I would think the member would have to say was progressive and was innovative. I don’t believe it was ever done by any other province of Canada before we did it. Does the member think that’s a safe statement? Will he grant all those things? We led the way.

Mr. Laughren: Yes, but you should be more progressive.

Hon. F. S. Miller: The fact is Ontario led the way in what one could call negative income tax. It also had one great flaw. That flaw was our government, our party, got no political credit for it. Does the member know why? It got no political credit because it’s done on a federal income tax form; and it’s sent back on a federal cheque isn’t it?

The member accuses us of all kinds of political subterfuge, and yet here we chose to have a simple program costing Ontario one per cent, I believe, of the amount of money we handled per year. We didn’t have to add any bureaucrats in Ontario, we didn’t have to have a provincial taxation system like Quebec has to have; but the price of not adding to the bureaucracy was no political credit. We chose that route anyway, a fact that’s often overlooked by a lot of people. The temptation is real. I am like the member opposite, I like to get re-elected.

Mr. Laughren: You won’t give us credit for suggesting that to you though, will you?

Mr. J. A. Taylor: That’s the inherent weakness in it.

Hon. F. S. Miller: Listening to both my opposition critics in the same afternoon take credit for the only two things they think were any good intrigues me. It’s something like saying a chimpanzee left at a piano long enough will play Beethoven’s ninth. If I look back across their records they’re bound to have suggested something because they go on so much.

Mr. J. A. Taylor: Figure that one out?

Mr. Peterson: No, I haven’t figured it out yet. I just didn’t know that Jimmy Taylor played the piano.

Mr. J. A. Taylor: In reverse.

Mr. Breaugh: Yes. You can’t figure out your front from your back Jimmy. That’s common knowledge.

Hon. F. S. Miller: It’s a long time until six o’clock.

Property tax reform really is a whole series of steps that were lumped together. To get back to the serious part of it, I think the whole issue is that they probably didn’t have to be dealt with all at once. In fact, as you’ve seen in the last few weeks, we’ve decided to move forward with certain elements of them.

You’ve seen section 86 brought in to get rid of those inequities within the regional government areas in particular where municipalities have been amalgamated. We have stated that the equalization factors would be recalculated for the year 1980 and issued in July 1979. We’re taking steps that I think will be able to minimize the kinds of upsets I talked about while achieving the goals. I hope sincerely we’ll be able to progress down that line.

It may well be that the provincial government doesn’t have to be the deciding agency or body for certain of the steps that were originally seen in property tax reform. I think we can have an evolutionary process --

Mr. Laughren: You’re backing off again.

Hon. F. S. Miller: I’m not backing off. And we can achieve it by a method that will work. There’s a big difference between achieving it by a method that will work, and causing complete chaos by bringing in something that looks good on paper but either your voters can’t understand or is not totally fair.

Mr. Peterson: Nobody is suggesting you should do it wrong or incompetently or unfairly. We are just suggesting you should do it.

Hon. F. S. Miller: We’ve started down that path. That’s what I was trying to point out.

Mr. Laughren: Take our advice, Frank, and there won’t be any pain.

Hon. F. S. Miller: Regarding income redistribution, there are many elements of the programs of this province that are based upon a form of income redistribution that aren’t necessarily counted in dollars received. When one looks at the quality of the social services of this province such as Ontario Housing or many other elements, when one realizes that the top marginal taxation rate is 62 per cent -- you must know because you must pay it --

Mr. Laughren: What a low blow.

Hon. F. S. Miller: That’s on your investments.

Mr. Laughren: I don’t have any.

Hon. F. S. Miller: When one realizes that the marginal rate is that high -- and you can tell me that isn’t in effect a form of --

Mr. Laughren: Who pays it? Nobody pays it.

Hon. F. S. Miller: Sixty-two per cent? Lots of people pay it.

Mr. Laughren: Name one.

Mr. Peterson: Frank Miller pays it.

Hon. F. S. Miller: I don’t pay it, but I suggest the member for London Centre does.

Mr. Laughren: No. Nobody pays it.

Mr. Peterson: Have you been looking at my tax return?

Hon. F. S. Miller: That’s one of the great advantages of being Treasurer. I just have to punch out your SIN and it all comes out. Not quite the SIN you’re thinking of.

Mr. Peterson: For the record, that is completely and utterly untrue. Have you got that, Hansard?

Hon. F. S. Miller: Income redistribution takes other forms: the property tax credits we’ve talked about; the fact that pensioners get a higher amount; the fact that Gains has been added on top of old age security; family benefit allowances -- many things that have taken place since I was a young person.

The last thing I would say before I sit down, and let you go on with the next item or further on this item, is, you talked about the creation of the capital. It’s interesting to realize that this is the one case where I think our ideologies may differ but we both agree that whether one lives In a capitalistic, socialistic or communistic society, the creation of capital to support investment is essential. The only question then remains, how does one do it the most effectively. We have chosen to believe it can be most effectively done in a free enterprise society. I don’t think you disagree with that.

Mr. Laughren: But you haven’t done that.

Hon. F. S. Miller: I think we have done pretty well in this country. If I listened to your pictures of the way Canada is, I would think that we are in such terrible trouble that we must be at the worst and lowest ebb of all time.

Mr. Laughren: There you go, rhetoric again.

Hon. F. S. Miller: It is not rhetoric; it is a fact. Sure, we have some problems and, sure, we must tackle them, but I have to tell you that this province has still one of the highest standards of living in the world. Do you disagree?

Mr. Laughren: No.

Hon. F. S. Miller: A good deal of it is due to the fact that we have had, in both Canada and Ontario, not necessarily political parties that were particularly competent, but a belief in a principle that stimulates people more than most other principles do. That’s where we differ, and that is the principle of the free enterprise system. I believe it works more effectively than most government planning and that it only needs some assistance from government to continue to create --

Mr. J. A. Taylor: It’s just a principle.

Hon. F. S. Miller: -- that capital at rates that no other form of government has ever been able to achieve.

Mr. Laughren: And look what’s happening.

Mr. Peterson: I may as well take a turn. It was very interesting, actually, for me to sit and listen to some of your personal philosophy intermingled with the odd number and the odd fact. It’s kind of alarming to me.

Mr. Laughren: That’s what frightens me, he doesn’t sort them out.

Mr. Peterson: I always anticipated that you probably have had a longer view than that which you’ve manifested in this particular little speech you gave us today.

Perhaps I’m a crepe hanger, perhaps I’m a Jeremiah, perhaps I’m a perpetual pessimist; I’ve been accused of being all of those things. With respect to a lot of the good things you were talking about, yes, we are, relatively speaking, in pretty good shape around the world compared to many other jurisdictions. I don’t deny that for a moment. But when one looks at the gifts we have been given, I think history -- and I’m talking about long-term history -- will say we probably have squandered them, we have been unnecessarily consumptive and we have borrowed our way to a standard of living that probably in a real sense we’re not entitled to because we haven’t generated some of the real wealth.

I would refer to the fact that we are the highest per capita energy consumers in the entire world. The member for Prince Edward-Lennox (Mr. J. A. Taylor) knows that. As Minister of Energy he tried to do something about it. Anybody who is farseeing is going to have to address his mind to those kinds of problems. We are blessed because we have cheap energy which is provided by a public corporation; that’s not private enterprise.

Mr. Laughren: The member for Prince Edward-Lennox stockpiles coal. We know that.

Mr. Peterson: We are blessed because we have a disproportionate share of resource wealth for the population. It is not, in my judgement, as if we have as a jurisdiction put honest effort, honest ingenuity or honest guts into building the economy, because if we did things would have been dramatically different today.

I would suggest to you we are collectively seeing some of the results of that today. I would suggest to you it was easy to govern this province. Almost anybody could have done it -- with the exception perhaps of the Liberal Party back in the late 1930s, they had their chance and blew it -- but I’m saying it wasn’t all that difficult.

Mr. Laughren: And you want another chance to blow it.

Mr. Peterson: Accuse me of being a Jeremiah or accuse me of being a pessimist, it is my view that we are going to face some problems in the next 20 years that we haven’t even thought of in the past. I am saying to you, relating to your own political philosophy, you are the one who has to take action. I don’t expect the Premier to do it; I know too much about him. I have to sit at my desk directly opposite him daily, look at his face and see him respond. I don’t expect this out of the Premier. He has a different job than you do. I consider that you, as Treasurer, have a different mandate; and in many respects an equally important mandate. I don’t think you have the same, for want of a better word, political component or political cast to your responsibility as the Premier has.

I really desperately hope that in many of these issues that you take the long-term view. I do not accept, I disagree fundamentally with, the political philosophy you just mentioned when you said that any government that survives is obviously doing the right thing. Because the government hasn’t explained it, or whatever, frankly the public attention span for extraordinarily complex issues such as these is very limited. I think the public perception of some of the difficult problems is very short-term.

I believe you have a responsibility because you are privy to knowledge that other people don’t have. You’re privy to a giant staff that other people don’t have. They aren’t stupid. It’s a good staff with lots of intelligent people, presumably with some kind of concern about what we’re going to leave here 20, 30 or 50 years from now.

You have a much greater responsibility, personally, by virtue of the kind of man you are and by virtue of your position in this province. You have a great responsibility to take a long-term view. In my judgement, as I tried to say in the last three or four sessions we’ve had, most of the things you have to do are going to be politically unpopular.

[4:15]

I guess that is where you and I disagree. I pride myself on only one thing. In my very brief political career, which has been fairly unsuccessful compared to some of yours, I have never once promised things were necessarily going to get better materially. I have said there is going to be sacrifice, there are going to be savings, we are going to have to divert a higher percentage of our gross national product into capital formation, we are going to have to consume less today in order to even maintain, in some relative degree, the standard of living we are enjoying today.

Mr. Laughren: Would you close those hospitals?

Mr. Peterson: That is the philosophy that I start with. My guess is that the former Minister of Energy wouldn’t disagree all that much with me in terms of philosophy; I think you have got to be prepared to do the unpopular things.

We talked about the Canada Pension Plan. We know it’s heading for bankruptcy; we know that something dramatic and distasteful is going to have to be done. That’s your job; propose those distasteful alternatives and do something about it.

When the history books are read there are going to be some very harsh judgements on your government over the last 35 years -- which frankly couldn’t conceivably have had an easier ride. I think that ride is coming to an end. I’m not saying your government is coming to an end -- it may or may not be, and I’m going to try very hard to get rid of it -- but I’m saying the easy time you have had in the last 35 years is going to change. It is going to require a different kind of politician in authority and in power than we have had in the last little while. The 1970s are going to be seen as an economic disaster and nightmare.

Look only at your own figures. Here we are, squeezing municipalities; municipal transfers this year are five per cent. I have never said that was too low, because you can’t afford any more. Those are the realities; they are going to have to get used to them, as we all are. I have never publicly stood up and castigated you for that. But at the same time, look at the increase in your debt obligations -- 12.9 per cent. You are violating your own guidelines.

There is no easy way out of that one. That is going to be increased next year and the year after. We are going to find that debt servicing goes from 8.5 per cent of the budget to nine and 10 per cent. God knows you are going to be in almost as bad a position as the feds pretty soon.

Mr. Laughren: Just imagine us being in as bad shape as the federal Liberals.

Mr. Peterson: In fairness, you have a lot more economic advantage than the federal government has. You have been blessed with the most resources, closeness to markets, Ontario Hydro and a lot of other advantages the federal government doesn’t have. I’m not here to defend them because I think they have made lots of mistakes.

Mr. Laughren: He is an Ontario Liberal.

Mr. Peterson: Sometime I would be very happy to speak about their budget, because I am not very happy with the budget. I am not happy with undirected and unfocused kinds of tax advantages they have given out, because I don’t think the net result of that will be anything. I happen to subscribe far more to focusing, and to direct and specific incentives in key areas where one thinks they have to be used. That is government interference.

You sing this tune about free enterprise; I sing the same tune. I happen to understand it, I have made my living in it; free enterprise in the sense that you have put some individual effort into it and you are rewarded for that effort. But let us not kid ourselves. Those are buzz words that make the guys in the chambers of commerce go crazy and think, “Gee what a wonderful fellow because he understands it.”

There is no such thing as pure free enterprise. If it wasn’t for Ontario Hydro, you wouldn’t be here. We wouldn’t have had the advantages we have had historically; and those are increasingly questionable as our relative advantage peters out, as the relative mix of hydraulic power diminishes in importance in terms of the overall mix of power generation.

Those things weren’t just free enterprise. I will always defend to my death the free enterprise mentality, spirit and imagination that we need to build the province. I think that frankly it has been dampened to some extent because everybody sat around saying: “Oh, aren’t we doing so well; and aren’t we clever; and look at our disposable income and standard of living”; without ever putting in what it really requires.

I would take you with me just one time to Japan -- and I wouldn’t wish it on you that you would have to live there; I have been to that country about 15 times, I have seen what a people can do with no resources --

Mr. Laughren: Why wouldn’t you want to live there though?

Mr. Peterson: I don’t like the place, to be perfectly honest; it’s crowded, polluted and all sorts of other things.

Mr. Laughren: There you go.

Mr. Peterson: I am just using it as an example, and I point this out to you. They are people with imagination, guts and courage who realize the only natural asset they have is the people. They happen to be the most imaginative people in the entire world today, with a great deal of economic clout.

Mr. Laughren: Doesn’t that tell you something?

Mr. Peterson: If we just had a fraction of their imagination and courage and initiative, with the natural resources we have, I can tell you that things would be a lot different today than they are.

I think one of the ways you start when you address these problems is laying out the realities as they are. Collectively, we suffer from a very bad reputation; politicians are one below used-car salesmen in terms of who people respect, and I think quite frankly with some justification. I think that over the years we have given a load of hogwash by and large. I read some of your pious statements, “I am in favour of free enterprise,” and all this kind of stuff. They are buzz words; it is emotive, and it rings with certain people, but those aren’t the realities. I think you have to get into the nitty-gritty and talk about the power situation in this province, which isn’t all that happy. I think you have to talk about the debt situation. I think you have to talk about the pension situation. I think you have to talk about the decline in our ability to boost the value added in manufacturing in this province.

I think if you give it to people straight they are going to respond. I believe that profoundly, and I guess that is why I have a little bit of different philosophy than you have. We need those old free enterprise characteristics, we need that mentality, we need that spirit. But don’t kid yourself that this is a free enterprise economy, because it isn’t. There isn’t a free enterprise economy living on the face of this earth with the possible exception of Hong Kong, and I wouldn’t want to live there either.

Mr. Laughren: Doesn’t that tell you something?

Mr. Peterson: I just get a little tired and sick of these generalizations that really don’t amount to a hill of beans, and don’t further this debate or our discussion today. I wasn’t really planning on making that speech, but I just felt that I had to respond a little bit. I happen to be in favour of all of those things --

Mr. Riddell: Good speech.

Mr. Peterson: -- but let us not use that “free enterprise” mentality as an excuse for inaction. I, for one, do not believe for a minute you can plan the economy of this province or of this country, but I’ll tell you you can sure assist it, you can have a greater inventory of facts, figures and knowledge than we have currently, and there are lots of ways we can, specifically on a long-term basis, direct our attention to leave some kind of a heritage. Just as the program you attempted to start with your trees -- and I have no idea whether it is successful or unsuccessful, I have heard various stories on it -- you should be doing it, and we should have been doing it 20 years ago with a renewable resource like that. With a non-renewable resource we have to be very much more sensitive about what is going to happen in the long run.

Mr. Riddell: We are still waiting for the amendments to the Trees Act.

Mr. Peterson: I really wasn’t going to speak because I want to ask you a lot of questions. It is fun to make a little speech sometimes in estimates, but it is really more fun to extract information out of you.

Mr. Laughren: Lots of luck.

Mr. Peterson: Therefore, I am going to try with a series of questions, if I may.

Could you bring me up to date on the reports of your meetings on the potential transfers of head offices out of the province of Ontario? We certainly know that there is a potential problem, with the present tax advantage in Alberta, with the oil companies. Are you monitoring the movement of head offices out of this province? How many have, in fact, happened? What is the current state of your knowledge on that subject?

Hon. F. S. Miller: In answer to that specific question, the only ones I have been aware of were the ones we discussed in question period, I believe, or perhaps in these estimates. Two or three of the oil companies have moved components of their system westward to take advantage of the tax changes. Two of the three I have talked to have. Imperial and Shell I believe have, and Gulf was considering it.

Mr. Peterson: Could you tell me the state of your negotiations and discussions with them? Are they confidential, or what is happening?

Hon. F. S. Miller: They are not negotiations, Mr. Chairman. I wish they were. What have I got to negotiate? Let’s be honest, if I have nothing I can give then there is darn little negotiation to take place. It happens, as I tried to explain here, that in each of those cases it is not a head office, I am told, that is moving, it is a change in the structure so that, as I understand it, the crude is sold to the pipeline in Alberta so that the total sale takes place in one jurisdiction. Certain staff were transfered to Alberta so that they, in turn, get some tax advantages. I think some research staff in that case.

TransCanada Pipelines delivers the crude to the refineries in Ontario that belong to the same company, they refine it. They don’t make much, if any, profit in Ontario and therefore have little if any corporation tax to pay to Ontario.

The profits they earn in Alberta through the pumping of the oil are in fact subject to corporation tax, and also to royalties and to federal government tax. In turn, the Alberta government decided that corporation tax on disallowed royalty be rebated against the corporation tax payable by the producing wells in Alberta. It’s a system whereby they are able to offset what is considered to be double taxation on the part of Ottawa -- I’m not arguing that it is; I’m not trying to blame, but simply saying what is argued by them -- they are allowed to offset it against a tax that is collected in Alberta.

We have some estimates of our losses in revenue. That was our major concern; it wasn’t much in terms of the losses of people in that case, it was a question of the losses in taxation revenue.

My only negotiating point, if I had any, was -- would I in fact increase a resource allowance, that I think is currently 25 per cent for that particular industry, to some higher level in order to retain the companies here? I believe the resource allowance was put in place, basically, for them. The argument would be if 25 per cent was required two years ago and 35 per cent is required now, will 40 per cent be required tomorrow? Finally, my answer on that was Ontario would not.

Mr. Peterson: What refining capacity are we running in this province right now, about 75 per cent?

Hon. F. S. Miller: Seventy per cent.

Mr. Peterson: Seventy per cent. There have been various suggestions that some government help may be required to increase that refining capacity by increasing export allowances, or quantities, or something like that, from the province of Ontario. Could the Treasurer tell us the state of his negotiations? What are your current views on that subject? What are you doing with the oil companies to try to get refining capacity up here? Is the Treasurer having any negotiations? Are you contemplating any tax or other changes or discussions with Alberta or the National Energy Board with respect to exports?

Hon. F. S. Miller: Ontario is not the negotiator in terms of the exports, as I understand; I could be corrected.

Mr. Peterson: I just wonder if the Treasurer is doing it on their behalf.

Hon. F. S. Miller: No. The Ministry of Energy may be; I am not personally. I have met with most of the executives of the major producers or distributors of both gas and petroleum products, not on that issue but simply so I would be aware of them. The Minister of Energy (Mr. Auld) is here; he is probably a better person to answer that question.

Certainly at last week’s conference in Ottawa, when the petroleum producing provinces were talking about their immediate problems they strongly urged a policy of export of gas southward on the assumption it could be swapped for future supplies of US owned Alaska gas later on. It would solve some of their immediate over-supply problems, allow Canadians to do something about their immediate balance of payments problems; and in fact give us some guarantee of future replacement material when it became economically feasible to bring that gas into Canada or through Canada to the United States.

As I recall, that didn’t get any Ontario input. It was simply a discussion between the provinces of Alberta and Saskatchewan, and in fact British Columbia.

Mr. Peterson: What is your position?

Hon. F. S. Miller: I think when in fact I am not the person involved I shouldn’t be offering my opinion. There is a Minister of Energy here to discuss that. I think properly he should be the one who speaks to that rather than the Treasurer. I have routes to make my thoughts known, but he is the titular minister of that and he should be answering for it.

Mr. Peterson: Those questions are fundamental to this country. I guess if you are not prepared to answer them you are not prepared to answer them.

Hon. F. S. Miller: Mr. Chairman, on a point of order, the honourable gentleman knows that in fact the Speaker made a ruling the other day when one minister of this House was questioned on comments he had made relating to another ministry.

Mr. Laughren: These are estimates.

Hon. F. S. Miller: At that time the Speaker said what we say outside of this House is our own business but when it comes to reporting in this House we were supposed to be reporting on our own ministries. I think I’m following the spirit of the Speaker’s declaration when I refuse to answer a question that’s related to another person’s ministry.

Mr. Peterson: I will just respond that I believe as Treasurer and chief bookkeeper and chief fiscal agent and chief economic forecaster and planner for this province, you should definitely be consulted and you should have a view because energy is so important.

[4:30]

Hon. F. S. Miller: No argument. I can’t do that, that’s all.

Mr. Peterson: I was hoping you would share the view, from a Treasury point of view. There are various points of view. You are the macro-economic planner and whatever happens will have long-term repercussions on the state of the economy of this province. However, I won’t pursue it because you won’t answer.

Could you tell me, please, what you are doing with the capital aid corporations, what your thoughts are? Do you think they are worthwhile? Do you think this sort of bogus transfer of funds and deferral and misstatement of the number of assets of this province when it is really a liability owed to yourself, through a very nefarious route, is really constructive?

Hon. F. S. Miller: That is an area of the ministry to which I have not put an awful lot of effort, in the sense that there have been a number of other problems I have faced in the last while. My understanding is my predecessor stated those corporations should eventually go out of business. I have no reason to disagree with that policy. The hope was, as you know, upfront grants would replace the moneys traditionally loaned through the capital aid corporations and, in fact, the normal strength of the municipality or the institution would be used to pay off the balance.

Without prejudicing actions I may wish to take in the future, if, as and when I have the opportunity to look into those in more detail, my feeling is right now that sounded very sensible. As the emphasis in this province is shifted from a very rapidly growing school system to a much slower growing school system, perhaps our mechanisms for financing it should also change.

Mr. Peterson: If you would like to read an excellent treatise on the subject, I refer you to my 1976 budget response.

Hon. F. S. Miller: Do you agree with me?

Mr. Peterson: Yes. I have argued for two or three years that really they are accomplishing nothing and they should be wound down.

Hon. F. S. Miller: Then you and I are on the same wavelength.

Mr. Peterson: Really it is a misstatement of the assets of the province and I am one who believes in clean, simple and neat bookkeeping and not making things more complicated than in fact they are. You have enough ways currently to obfuscate the truth without necessitating the use of that particular device.

Hon. F. S. Miller: Remember my health when you are talking to me.

Mr. Peterson: Well, Frank, as one who has jogged with you, I know how terribly healthy you are and I feel quite free to give you any advice or shots that are required, in the circumstances.

Hon. F. S. Miller: Shots.

Mr. Peterson: My friend from Nickel Belt was asking earlier about the sales tax and what you know for sure was accomplished by that sales tax cut, whether in fact you got value for money spent for this “tax expenditure.”

Maybe the member asked this question, but I didn’t get an answer and if you asked it I am sorry to repeat. I would like to know everything you know about the effects of that six-month sales tax cut on the economy of this province. What has it in fact done to consumer spending? What has it done to jobs and everything else? I want to know the answer to that question as well as what devices do you have in your ministry, or what kind of system do you have, to analyse the effect of these so-called tax expenditures or when you make a major fiscal move? I want to know how do you know it works so you can use it again next time or not, as the case may be?

Hon. F. S. Miller: I am sure the honourable member knows that assessing the overall impact in a tax program like that historically takes some time, because one has to see what it does to future sales as well as to sales during the time period.

I was privileged today to attend a meeting of some of 30 or 40 corporate heads, where a review of the market today in retailing was brought up and we asked just that kind of a question -- it was passed about October 7, wasn’t it? Did our sales in October slump suddenly? Are we causing you trouble -- what? The same kind of answer came back: that it will take some time to assess. That in fact sales through October and November were down a bit; that the weather conditions traditionally have been colder and wetter than they were -- those are one of the first stimulants to fall sales. In the absence of that --

Mr. Peterson: The Santa Claus parade was a week earlier.

Hon. F. S. Miller: Yes, it’s a very real factor though. One only needs to live in a town like mine to realize that (a) you buy your snow tires the first day it snows; and (b), like me last week in Ottawa, we run around without rubbers on for the first week of snow; (c) you don’t have gloves until your hands are cold. That’s of course an indication of my lack of wealth, not my lack of ability to think ahead.

Mr. Peterson: That’s the way you guys play. I have my gloves from last year and I still wear them.

Mr. J. Reed: Plan ahead.

Hon. F. S. Miller: Yes, and besides, my wife didn’t tie them together with a string like my mother used to do.

Mr. Peterson: Did Rendall write that for you?

Hon. F. S. Miller: No, Rendall is not writing my stories. Rendall writes funny ones.

The fact remains that some of the climatic conditions that traditionally stimulate fall purchasing didn’t occur this year. Christmas sales are coming along now and it’s a bit too early for us to judge exactly, but I can read into the record some comments: It says: “A preliminary assessment of retail sales in Ontario have displayed considerable strength during the program period. The lower tax rate successfully spurred the purchases of big ticket items, particularly in the area of furniture or automobile sales. The total dollar sales on taxable goods increased by 12 per cent over the period April to August, compared to the same period a year ago. Household furniture and new motor vehicle sales were well above this average, showing increases of 21.7 and 16 per cent respectively.”

Mr. Peterson: Is that a real increase or with inflation?

Hon. F. S. Miller: That’s including inflation I am sure. They are not real dollars.

“Imports usually carry a considerable weight in consumer spending. It appears, however, that the stronger consumer demand has had less impact on imports than it has had on domestically produced goods.” This is quite happy to hear.

“This is evident by comparing automobile import figures, which rose by about 12 per cent in the April-August period, to the increase in Ontario retail sales, which is significantly less than the 16 per cent in the same period.”

Mr. Peterson: My own experience out of my own business is that probably it had some mild effect in October, particularly toward the end of October, but November was by and large a depressed month -- in an industry that I happen to know about. Obviously the jury isn’t in on that question. The next part of my question is: Are you going to make a full analysis of the effect of that particular tax cut? Two, do you have a mechanism in place for ongoing assessment of tax expenditures of this type?

Hon. F. S. Miller: I understood the last part of it. The answer to the first part was yes and --

Mr. Peterson: When do you expect that?

Hon. F. S. Miller: I can’t tell you that. I will ask the staff.

Next summer we will have the figures.

A note I was just given tells me that our sales tax revenues were above our forecast, after allowing for the $145 million loss to Ontario during that period. In other words, the sales increased enough to materially increase our collections of sales tax.

Mr. Peterson: Are you telling me that on a gross dollar basis you collected more sales tax during that period at the lower rate than at the higher rate? You were talking about forecasting.

Hon. F. S. Miller: No. What I was trying to say is that after taking $145 million off the figure we would have projected -- and did project, in advance of knowing there would be a sales tax rebate program -- our sales taxes are better than we predicted. That figure I can’t give you exactly right now, but they are better than they were predicted.

Mr. Peterson: You didn’t really lose $145 million. You lost less than that.

Hon. F. S. Miller: Unless it’s lost in the next quarter.

Mr. Peterson: Just on to my next question. You are going to do a specific analysis of the impact of this expenditure; do you have an ongoing monitoring device in your ministry to find out about these things? For example, when we did the capital cost allowance, accelerated depreciation on production machinery, you will recall at that time of that debate with your predecessor that we supported that move, but we wrote into the act that we should have a thorough assessment after a period of a year -- which the Treasurer did do, and which, as I recall, the Treasurer filed as a budget paper with the last budget. I think that’s constructive and I think that’s good.

But I want to make sure every time you spend a buck from your ministry -- either you expend it or you cut your revenues by a dollar, which is known as a tax expenditure -- you have some kind of assessment of the effect of that on the economy. Certainly there is no question I will sometimes question, as will other people, whether in fact that was $100 million well spent or not well spent.

I want to know how you know. I get the feeling, frankly, as I did in the 1975 election when you decided to give away $100 million through first-time home owners’ grants, and $400 million or so through various sales tax cuts on commodities and completely removed it on automobiles, that too many of these decisions are not motivated with a great deal of forethought. In fact, for half a billion dollars there are better things you can do with that money. Perhaps the economy needed stimulus, perhaps it didn’t.

I can tell you I am one person who believes the federal sales tax cut of three per cent will accomplish nothing, and that money can be much better spent in a myriad of other ways through creating investment, through tax credits for investment, for building the productive stock of capital in this country. I think it will be dissipated; it will be spent on imports; and in my judgement, in the long run it is going to accomplish nothing. I can imagine many more creative ways to use that billion dollars or so of tax expenditure it has cost the federal government.

Therefore, I want to know from you what assessment you make when you make these kinds of decisions -- what information you base it on and how you assess after the fact whether you made a good decision or not?

Hon. F. S. Miller: On three of those major programs, I think I have already mentioned, on the home buyers’ grant program, on the automobile sales tax drop --

Mr. Peterson: That was the conference board.

Hon. F. S. Miller: -- on the production equipment, papers have been produced and made public. But, you know, to say that we analyse everything in depth, or even should, I don’t think is totally true.

You criticize me on the one hand for the growth in government, and I have to tell you some measures will be taken. Some steps will be taken that aren’t necessarily researched in depth. Do you research every decision you make in your business? I don’t. I’m keenly aware, when I’m dealing with public dollars, that I have a much greater responsibility to be able to answer to you or to anyone else in this House, or the public at large, for the actions I take. If you are ever in this chair you will, too.

In fact I would say that auditing methods in government are often far more costly than the possible losses would be, if in fact that auditing wasn’t so thorough, simply because of this responsibility to the public and the absolute need to protect them. But, to study every decision in depth would add needlessly to the great bureaucratic monster you claim we have. So we will do those that are important, and we will ignore some. Sometimes you do make intuitive decisions. I certainly do in business with my own money; I can assure you I will be making some in this business unashamedly.

When I have listened to four economists in a row each tell me an entirely different set of reasons -- I talked to the chairman of the Economic Council of Canada on Friday. I believe their latest booklet, A Time for Reason, suggested a $2 billion ongoing tax reduction at a time when you and I would say that if I have a deficit problem, there is a much greater deficit problem there. I have trouble rationalizing that. I hope you do.

Mr. Peterson: I am against it.

[4:45]

Hon. F. S. Miller: Yes, so am I. I just have to say that is one very learned set of people giving information. Then I will turn around and face the next group who will say, “My friend, your basic job is to stop the flow out of Canadian capital by achieving a balance of payments and not to worry about anything else.” The next will say to me: “My friend, you must bring your deficit into balance if you’re ever going to solve what I consider the very serious problem of underfunding of pension funds,” which you referred to earlier.

After I listen to these differing opinions by economists who have credentials with which I can never compete, I must recognize that I am the minister and I have to fall back on whatever abilities I have, be they small or large; and those are intuitively to decide which of the arguments posed before me seem the most reasonable and most compatible with the philosophy I personally hold.

I make no excuse for it. I suspect you’d do the same thing. Life is not simply a question of analyses or else these four people would not be giving me different points of view on a subject where there are all kinds of economic data available for analysis.

Mr. Peterson: Yes, you’re right; and I don’t disagree with that. But when you select a course of action -- if you say, for example: “Okay, we are going to cut provincial sales tax by two points”; you must have some kind of computer run appreciation, and you must have some kind of forecast about what that’s going to do. Am I right? You don’t just say: “Gee, that sounds like a good thing to do; let’s do it.” You may have to weigh that off against a personal income tax cut of one point. I understand that.

Economists will have different views about how to stimulate, whether you use one device or the other device; but for every option, you can have some kind of an economic analysis. You can have some kinds of guesses as to the causes and effects, or the results of that particular course of action. Would you not agree with that?

Hon. F. S. Miller: Yes.

Mr. Peterson: Would you not agree, then, that it would be constructive in the House to present that kind of information when we’re debating a bill? One of the things that concerns me is that we bring so much legislation into this House, but we don’t always know the economic consequence of that.

Let’s say, for example, we brought in a bill tomorrow to ban the can or even to introduce a five cent deposit. If we made a move like that It would have great economic consequences for the steel industry, for the can industry and for the glass industry, on unemployment and all that kind of thing. I assume when that bill comes to cabinet, if one like that came, there would be an economic analysis attached to that for the cabinet discussion. Am I right? Would you have an idea or somebody’s forecast of what that’s going to do to the state of the economy?

Hon. F. S. Miller: I don’t know that I’m free to disclose what kind of information cabinet is given, nor do I think I should. There are times when cabinet gets a very thorough documentation and there are times it does not, depending upon the kind of matter being discussed. Certainly we attempt, within the resources we have, to provide as full a picture to the decision makers as possible. I seldom suffer from lack of information. I guess I suffer more days from more information than the human brain can absorb. Some of us, you’d agree, absorb less than others.

Mr. Laughren: Some lines aren’t even worth following up.

Mr. Chairman: Order.

Hon. F. S. Miller: I’m not quite finished, Mr. Chairman. I find it interesting in the business I’m in to argue the merits of the various forms of economic stimulation; for example, tax spending, if that’s the term you used --

Mr. Peterson: Tax expenditures.

Hon. F. S. Miller: Tax expenditures, the forgiveness of a possible tax.

Suppose I say I can take $1 million of tax forgiveness to industry and I want to stimulate new investment, which I assume means new jobs, how best will $1 million do it; or $100 million or $1 billion? I don’t think the number matters, just per dollar of tax forgiveness.

I think one has to start assessing the kinds of factors that make a business decision. If I take a point off the corporate tax rate it will affect all industries and probably won’t stimulate many. I don’t know whether you’d agree. It may just give us a little better climate than our neighbours to the south or east or west if somebody is making a general decision. But they’ll say, “Don’t trust any government. They’ll get you there with a low rate one year and the next year they’ll hit you.” I think that’s generally a feeling many industries have.

If you go to an investment tax credit -- and as you know the feds just increased their investment tax credit -- you’re aiming at new investment. You’re giving somebody something they can count on in a given year, therefore you probably will stimulate some investment. I guess then you can try to document it by measuring the flows -- with Stats Can around all kinds of data are available to us -- as to whether new investment occurred, whether new factories were created, whether there is expansion, modernization; you name it.

We go through all those. The federal government two weeks ago announced reduction in their own sales tax, similar to the one we had in the spring. They would have to trade that off and say which is going to work better, reduction in that sales tax or a drop in personal income tax.

Again, an answer that is good in 1978 may be wrong in 1980. One would have to look at the savings available. One would have to look at the willingness to buy products and what makes people make a decision to spend, apart from general optimism, and try to trigger through your tax route the greatest reaction possible.

I would agree the feds chose one of the better routes when they went the sales tax route.

Mr. Peterson: You think they did?

Hon. F. S. Miller: Yes, I do. I would be interested in your opinion because I’m not sure; I just say I think they did. Assuming they were going to give any dollars away -- that’s the first assumption --

Mr. Peterson: It will be passed on and it is going to the importers.

Hon. F. S. Miller: Just to show you how much inside information I had, I bought a brand new car on the Saturday before the budget.

Mr. Peterson: Is this the yellow Corvette?

Hon. F. S. Miller: No, no. That’s getting to be pretty old -- the yellow Corvette. Mine was a Horizon which doesn’t burn much gasoline; it’s small, in keeping with my salary.

Mr. Riddell: That’s your second car.

Hon. F. S. Miller: Third.

Mr. Riddell: What’s your first car?

Hon. F. S. Miller: That’s my third car. If I’d been sitting there and thinking ahead and had some information I probably would have saved.

What I was going to say is that within two or three days of the federal decision to reduce the sales tax from 12 to nine per cent, at least one major corporation stated they were passing an average of $170 per Canadian unit right through the price -- $170 per unit I believe was the figure they used. I was very interested. I certainly wished I had had it. In my case, I might have got $120.

That is exactly what it was aimed to do. It was aimed to get the price down and cut down the rate of inflation slightly; because in torn the rate of inflation precipitates wage demands; as you know, CPI automatically triggers increases. So they those a route that I wouldn’t have instinctively disagreed with.

Mr. Peterson: I don’t share that view, but that’s okay.

I want to get back to this issue of knowing what we’re doing. Don’t you think it would be constructive, when a bill is presented in this House, to have some sort of economic impact analysis tabled with the bill?

Hon. F. S. Miller: Oh yes.

Mr. Peterson: You’re bringing in tonight, or some time this week, the Mining Tax Act, which I say with great respect nobody in this House understands, and I don’t think you do either.

Hon. F. S. Miller: I do.

Mr. Peterson: You don’t.

Hon. F. S. Miller: I do.

Mr. Peterson: I’ll tell you something. Industry doesn’t understand it, the ministry doesn’t understand it.

Hon. F. S. Miller: The minister does.

Hon. Mr. Auld: We’ve spent the weekend in bed with them.

Mr. Peterson: With whom?

Hon. Mr. Auld: With the mining tax people.

Hon. F. S. Miller: You can tell from his very pained voice. He’s either got a cold or he’s worn out.

Mr. J. Reed: Perhaps the Minister of Energy would consider spending more time with --

Mr. Chairman: Order, order.

Mr. Peterson: I don’t want you to tire yourself out. That was a bad example; we’ll withdraw it for now, we’ll discuss it at a different time.

Don’t you think it would be very helpful if for every single piece of legislation presented to this House, there would be an economic analysis attached thereto -- its effect on balance of payments, on employment and things like that? Then we could have a more enlightened discussion, and we can, collectively, as legislators, understand the economic impact down the road of what we are doing.

So many of these things have widespread ramifications. When a bill is introduced the minister sits there; the opposition critic gets up and he’s got to give his own economic analysis of the situation, and it puts the opposition at a very dramatic disadvantage.

Don’t you think it would be constructive in the future to give that kind of information to the House with every bill? We will probably find out that the overregulation you worry about, and a lot of other people worry about, and all the hidden costs of some of these well-motivated pieces of legislation may come to light before the fact rather than after the fact.

Hon. F. S. Miller: Mr. Chairman, again, I would not like to institutionalize something, but I would suggest to you that I’m delighted to share information of that nature with you as the official critic and also with the NDP critic. In the case of the Mining Tax Act, to which you just referred, when I was Minister of Natural Resources and brought that amendment into the House I recognized the complexity of the act. I can’t tell you that I can sit down and verify the accuracy of somebody’s tax submission. I can tell you I could, by the time I’ve been minister about the same time Mr. Auld has been, discuss in detail the principles and the rates that apply to it and the factors. I recognize that lawyers got into long arguments about the interpretation of clauses within the act, which I’m not going to debate, but that’s something --

Mr. Peterson: An act is a bunch of clauses, whether you know it or not.

Hon. F. S. Miller: The act is a very complex one and, again, I assume my present friend in the Ministry of Natural Resources is carrying on as I was, trying to find some simpler way of defining the value of an ore at the mouth of a pit, because it is complex by the very nature in which operations are integrated today.

When that act came in here the member for Rainy River was my critic. I suggested to him at the time that I would be delighted to have him come over, sit down with the staff of the ministry -- I believe he’s done it since then -- ask all the questions he wished and be privy to the information we had, since I would far rather have a critic sitting on the other side who understood what I was trying to do and therefore concentrated on what might be points of honest disagreement in principle, than one who sat there and had to be against it because he was afraid that by being for it he might have missed something important.

On that basis, I welcome that kind of discussion with you when the time comes that I’m free. Obviously the right to introduce legislation without much notice must remain government’s, but I’m quite happy to share with you reasons for things and to give you -- in most cases, not every case -- the right either to talk to me or my staff at length about the background.

Mr. Peterson: Very frankly, I will tell you I have never had any squawk with any of your staff. I have found them to be most forthcoming all the time. It was an atmosphere that Mr. McKeough set and which I respected. He never hid figures; he’d argue like hell over the interpretation of a figure, but it was all there -- unless he was conning me. I’m not suggesting he wasn’t, but it sure looked okay to me anyway.

I’m grateful for that and I’ll tell you again here publicly, I’m grateful to the very fine staff assembled there. I know lots of my colleagues have had terrible problems extracting information out of various ministries or out of various civil servants. There was certain information we couldn’t get but those weren’t the civil servants’ fault, that was government policy not their particular problem. Mr. McKeough, as I said, was most forthcoming. And when our people phone your staff, I don’t know of an instance when they haven’t tried to answer a specific question, even if it took some time. I’m grateful for that. That’s my compliment on the table.

Back to my original point. It’s my view that every single piece of legislation coming into this House should have an economic impact study attached thereto. I think it would be a marvellous discipline for you, for all the ministries, for all of us. I think it would substantially enhance the quality of debate. I think you would get more enlightened views about the real issues and then you can measure your performance against your projections a year or two years after the fact. Or at least it’s open to various people making various analyses of it.

[5:00]

I think that would be constructive, not only to giving a discipline on the cabinet they have not heretofore had, which is important, but it would also provide, in some little way along the road, a freedom of information we do need, at least in most ministries.

I think that is something for you to consider. What it is really saying is that it would force you to table the information you have -- and if you don’t have it, you should have it. You should be forced to do that before you bring in any kind of legislation. There is my opinion. I hope you support it. You seem like a reasonable fellow, at least for a percentage of the time.

There is one other question before I turn over to my colleague. Could you tell us the relative state of selling off the assets of this province? In the last budget you said you were going to sell off I believe $120 million worth of mortgages. Could you tell me two things? Number one, what have you actually sold off? How much did you get for the Ontario Mortgage Corporation? Number two, what is your current view about disposable assets? Is that going to be your approach, selling off assets in order to generate current revenues, in order to come closer to balancing the budget?

Hon. F. S. Miller: I don’t think the latter necessarily ties itself to the former.

Mr. Peterson: I will ask it later then.

Hon. F. S. Miller: Yes. I’m just simply saying that you are saying that because we can’t borrow, we sell off an asset. That is not the case. Again, Mr. McKeough, last year consciously decided that that was something that we could do without. The fact that because those were saleable securities they should be sold, because government shouldn’t --

Mr. Peterson: How much were they?

Hon. F. S. Miller: A hundred million dollars worth roughly were sold during the --

Mr. Peterson: It was $120 million in the budget, wasn’t it?

Hon. F. S. Miller: I think somewhere around that. We’re progressing towards it now. You know some of them are very difficult to sell without taking a severe markdown. I’m sure you would know why.

In the case of the Home Ownership Made Easy program I believe we have a mortgage on the land that in effect sits there for a long time without anything happening to it as I recall, piled on top on whatever other mortgages were needed. Really, it is not the kind of mortgage that would attract an institutional lender.

Mr. Peterson: How much have you sold specifically?

Hon. F. S. Miller: One hundred million dollars was the figure I gave you and that’s what my staff now tells me is the best figure to date. The target was $125 million for the fiscal year.

Mr. Peterson: Are you going to dump that?

Mr. Chairman: Order.

Hon. F. S. Miller: I have talked at length with the Ministry of Housing and Ontario Mortgage Corporation to see that they continue to dispose of mortgages to meet our target, assuming they have suitable ones within their portfolio.

Mr. Peterson: Could I just ask you to give us the benefit of your thoughts. Do you think it is okay to sell off assets? Will that be your plan in order to generate revenue to meet your current cash requirements?

Hon. F. S. Miller: That’s not the basic reason for it. I can only say to you that we have to look at our reason for having an asset to begin with, in terms of government policy. If in fact we don’t believe it’s needed any more, whether it’s that kind of a thing or whether it’s an Ontario Development Corporation loan that perhaps is worth 100 cents on the dollar at a bank, we have to realize that the numbers of dollars we are using are limited. If in fact we can use them better some other way, there is an onus on us as a government to do so. The idea that we should somehow clip coupons on behalf of the taxpayers of the province to me is foolish. I don’t think we should, unless we are achieving another programmatic I think is the word we would use, goal in the process.

Mr. Peterson: Are you looking at any other assets now to get rid of or sell?

Mr. Laughren: This building.

Mr. Peterson: Could you just give us the current state of your --

Hon. F. S. Miller: Ontario Mortgage Corporation had more than that $125 million worth of mortgages, a lot more. I can’t tell you how many at this time although at one time I could rhyme them off.

Mr. Peterson: It was close to a billion, wasn’t it?

Hon. F. S. Miller: We are asking them to move those through, if possible, until we get to the kind where the moneys were loaned, simply to afford people who didn’t have enough cash the opportunity to get a home. Some of them I think are tied to condominiums. Some of them are very difficult to sell because we were willing to take mortgages that the traditional lenders weren’t with the conditions that were attached.

So fine, if we have some nonsaleable ones, I think you would argue we still have a need to remain in that kind of a market if that money is eventually going to be repaid, rather than dispose of them at some very low number of cents on the dollar, based upon some investor’s idea of how much they may currently be worth.

Are we going to look at others? I would guess we would. I would guess it depends upon whether or not some of the corporations we currently have continue to function.

Mr. Peterson: From an accounting point of view, do you believe the revenue from the disposal of these assets should be taken into current revenue; or should they not be considered, from an accounting point of view, as an extraordinary gain on disposal of assets and not figure into your actual deficit projections? Wouldn’t you agree with me that this is analogous to selling off the furniture in a company that is in the process of going bankrupt?

Hon. F. S. Miller: Again, you may tell me I am wrong, but it is my understanding that our accounting procedures have differentiated. When I say I have a $1.496 billion cash requirement this year, that is not the deficit of the province. I think the deficit was stated at closer to $1.8 billion; and the other $300 million, in fact, came from assets that were shown as an asset. Once they are disposed of they are no longer an asset, but they are not treated as current revenue. All they did was reduce our cash requirements and they are shown on the balance sheet in a different way.

Mr. Peterson: In a real sense, what you do is show them as income that year. What is happening is your below-the-line transactions, your non-budgetary stuff, are an increasing amount of your total transactions and an increasing amount of revenue, in order to decrease the deficit. That is how, in a sense, you have obfuscated the real deficit lately by using so-called below-the-line transactions. Would you not agree with that?

Hon. F. S. Miller: I must admit I am afraid to say I agree with it in case I missed a line. It sounded reasonable to me in the sense that we are taking money that is represented by an asset. In the beginning, the money to obtain that asset came from the consolidated revenue fund. It was treated as a below-the-line item at that time. When the money comes back in it goes back into the consolidated revenue fund and affects my total cash requirements for the year, but not my budgetary deficit.

Mr. Peterson: I just want to compliment you, because you are a very creative bunch of accountants over there; knowing it is not a precise art, you use it to maximum advantage. There is some skill involved in that and I compliment you for it. However, serious people can see through it and are still worried.

Mr. Laughren: I think it is creative anarchy.

Mr. Peterson: I have been on for an hour or two; I think maybe I should turn it over to someone else.

Mr. J. A. Taylor: Initially, I should say I am naturally going to support the Treasurer and try to be as constructive as possible.

Mr. Laughren: He needs all the help he can get.

Mr. J. A. Taylor: First, may I say it somewhat troubles me that the process we have is such that we must continue in dealing with estimates, whether they be the estimates of the Treasurer and Minister of Economics or any other ministry, because we are in the last part of the fiscal year now and the spending process has been well under way for some time.

We are really looking in retrospect at much of this. I have never known the estimates to be reduced. The clamour often is to increase the amount of spending rather than to reduce it. I question the effectiveness of the type of questioning and the debate that goes on in estimates. I don’t think, in fairness, that the opposition has the research or that probably the government back-benchers have the type of research and support that is necessary to make some constructive contribution to the subject of government spending throughout its various ministries.

That is a bit of preamble. What does concern me is the area we have been dealing with for most of the afternoon, and that is the general state of our economy.

I appreciate we can’t isolate Ontario and expect to see buoyant times here without taking into consideration world conditions and conditions throughout the rest of Canada. We are in troubled times. I’m not a pessimist, Mr. Treasurer, but at the same time I think it’s essential that we recognize where we are, see what the strategy is and what the plan of action is, in order to restore the buoyancy, the optimism and the prosperity I hope we will experience again.

Mr. Worton: Change governments.

Mr. J. A. Taylor: I feel, Mr. Treasurer -- and I’ll put this to you for your response -- we are in a period when we have to talk straight with the people of this province. I think this is something that must be echoed right across this nation. We must explain to the people in very simple terms what our problems are and what we must do in order to assure this nation of prosperity.

Mr. Haggerty: You and I understand this problem, but the minister doesn’t.

Mr. J. A. Taylor: I know when you get involved in economics and the administration of a province as large as this there are I no simplistic solutions. I know it’s very difficult. I also know that we live in a Barnum and Bailey world really. We live in a world of stereotypes and reaction to fantasy, we engage daily in the mythology of government. We respond to the newspapers, which are often as shallow as one would want to contemplate; and as inaccurate.

Mr. Conway: Now you sound like Pierre Trudeau.

Mr. J. A. Taylor: I think that number one we’ve got to get involved, in maybe prime time through the media, to get to the people to see if we can change the basic attitude of our citizens.

Mr. Laughren: Why don’t you sponsor the Gong Show?

Mr. Conway: You’d better talk to the Globe first.

Mr. J. A. Taylor: Maybe we’re talking psychology; I suppose we are.

Mr. Haggerty: We’ve been brainwashed by that government on that side.

Mr. J. A. Taylor: Over the years we have developed a certain attitude --

Mr. Conway: Thirty-five years.

Mr. J. A. Taylor: -- a certain expectation by the people that things can only get, and must get, progressively better. We don’t seem to contemplate that things can get worse. We have developed the attitude that one does his duty if he consumes, that it’s not necessarily to produce; we don’t appreciate the simple fundamental that what you consume someone must produce.

This would bring me to the proposition of a balanced budget.

Mr. Worton: That is a long way off.

Mr. J. A. Taylor: Again, that is something I believe Ottawa, the government there, has finally realized it must consider. It’s a fact of life, certainly, in this province, that we must bring about a balanced budget. Again, I applaud the time frame that was projected for the province in terms of balancing the budget.

Mr. Haggerty: Promises, promises, promises.

Mr. J. A. Taylor: It’s a shared responsibility. You cannot do it at the provincial level without doing it at the federal level, and you cannot ignore the municipal level either.

Mr. Haggerty: You have to blame somebody for it, but it’s your own government.

Mr. J. A. Taylor: That’s why I say you have to go to the people to really educate them and inform them, as attractively and as simply as possible, of the need for accountability in government spending; that’s number one. We just cannot keep spending ourselves into prosperity. It won’t happen that way. You cannot just keep taxing; those answers in my estimation are simply not valid.

[5:15]

Here in our country we see a falling level of productivity, for a number of reasons. We see our competitive position being damaged, and at the same time we talk about GATT and reducing tariffs on an international basis when we as consumers are finding it difficult to buy the products we produce here at home.

Mr. Minister, you have travelled this country of ours.

Mr. Conway: In cars that he sold.

Mr. J. A. Taylor: When I think of the potential of this country, when I look at what we have in this vast land that abuts three oceans; the tremendous natural resources, the wonderful potential --

Mr. Haggerty: And they’re given away.

Mr. J. A. Taylor: -- the vibrant, enthusiastic people we have, you wonder why we are so stagnant today.

Mr. Haggerty: Where is our heritage fund?

Mr. J. A. Taylor: There is just tremendous potential. What we require, I think, is the imagination and the will of the people to develop what we have.

I would say to the member for Nickel Belt (Mr. Laughren) that while I am not a subscriber to Mr. Blakeney in Saskatchewan, I was somewhat impressed by the enthusiasm and recognition he had for the resources of our country, and the types of initiative he spelled out, especially in the energy field in terms of developing this nation and assuring a prosperous future.

You mentioned the heritage fund -- about $4 billion -- and we have heard a lot about that. I don’t think it is the intention of the government of Alberta to put the next generation on the welfare rolls and just issue cheques once a week or once a month to them. I think they have plans for that. It shows the tremendous potential there is within this nation, if we look at it as a nation, to develop our resources.

Mr. Haggerty: He follows the principles of Social Credit in Alberta.

Mr. J. A. Taylor: We shouldn’t sell ourselves short in terms of the ingenuity and inventiveness of our people.

Mr. Laughren: You are just one of many, Frank.

Mr. J. A. Taylor: But you require, surely, some stimulus -- and I will say leadership -- right across this land, at all levels. I’m not trying to single out a single person in the nation, surely we need the enthusiasm that is so necessary to capture the imagination of the public; and I think we can do this.

Mr. Laughren: Are you being critical of your Treasurer?

Mr. J. A. Taylor: No, I am not being critical of my Treasurer, not at all.

Mr. Laughren: It sounded like it.

Mr. J. A. Taylor: I really believe that if we can get some accountability into our spending, if we can get to the people to have them recognize that it is not a question of trying to cover yourself any more. We seem to be all scrambling to protect our own position, and of course the stronger segments of society are able to cover themselves off better than the weaker elements.

Then we get into your philosophy, and I am speaking now of the reference by the member for Nickel Belt to the homogenization and the redistribution of whatever we may have so that we bring about some type of equality or equity. We had a good thing going for a while right here. We had tremendous growth and development. We had foreign investment. We seemed to be spending like drunken sailors. We brought in programs and regulations that seemed to inhibit that type of investment and confidence in our commercial community. Now we see an escape of that capital.

Mr. Haggerty: It’s going right to the United States.

Mr. J. A. Taylor: It’s going south of the border; you are absolutely right.

You can start with the prime industry that we have in terms of construction, that basic generator of prosperity, where this effect is felt the fastest; because when that industry is strong and active it feeds right through the whole system.

Mr. Haggerty: Why don’t you move over to this side?

Mr. J. A. Taylor: A lot of it has moved south of the border for a number of reasons. I understand things are easier there. Profit is not a dirty word. Government is more receptive in terms of assisting development.

Mr. Haggerty: They get substantial incentives.

Mr. J. A. Taylor: The regulations are not so complicated and pervasive as to destroy one’s initiative. I think that a lot of these factors are important in restoring confidence. If you are going to keep extracting two taxations for every nickle that someone makes, you are going to destroy that will to achieve, excel and develop the country.

Mr. Haggerty: They have a strong federal authority there.

Mr. J. A. Taylor: I don’t want to compare jurisdictions. What I am saying is that we are suffering in terms of our dollar. We have a decaying dollar, we have experienced that.

Mr. Young: Who did all these things?

Mr. J. A. Taylor: When you look at that dollar in comparison with world dollars, you can only appreciate the weakness of our currency.

Mr. Young: What caused all these things?

Mr. J. A. Taylor: How do all these things happen, you say?

Mr. Young: Who has been the government?

Mr. J. A. Taylor: I would say that a lot of it is probably reaction to some of the fantasies you create in the socialist party, the implementation of many programs that may have not been as well thought out as they should have been; the reaction to media and the sensitivity that we have in this place for the charades that are played, much of which is speculation and projection by the press. That type of sensitivity has caused us to take certain courses of action which really have not been appropriate. It may very well be that the reform we will bring about will be the undoing of some of the things that we have already done, and maybe that will keep us in power for the next 35 years.

Mr. Lupusella: You are a dreamer.

Mr. Young: You have it both ways, in other words.

Mr. J. A. Taylor: You are the Machiavelli of the Legislature, you should know. I am a neophyte. I really haven’t the expertise that you have, the political manipulation, the psychology of government and winning people.

I want to get back to what the Treasurer said. In some cases I think he was in agreement with the member for London Centre, but he was criticized for not showing the confidence and displaying the leadership that was necessary. The member for London Centre seemed to say: “We will formulate a program and we are going to implement this. Here is our strategy. Whether you like it or not, this is what we are going to do because it’s right.” I think if you listen to what the Treasurer has said, you can only do the possible.

Mr. Laughren: I wish you were back in the cabinet.

Mr. J. A. Taylor: The Treasurer has mentioned that if the public is not receptive to a government program, then of course that program will not succeed. It is all very well to be so principled that you pursue a goal without reference to the public because you are convinced it’s right, but I would bring you down to our democratic system where if the public aren’t convinced you are right and support what you are doing, then no government will be in office in order to implement any programs.

Maybe that is the weakness of democracy. I think Churchill said it was a lousy form of government, but it’s the best that’s been invented. I’m paraphrasing now; that didn’t sound Churchillian, did it. Mr. Laughren?

Mr. Laughren: Not quite.

Mr. J. A. Taylor: As I indicated, maybe that’s the weakness. If you can foresee what must be done, and you are in advance of the popular opinion or the mood of the people, then you can’t accomplish that. All you can do is sit back and say I told you so. There’s very little satisfaction in that.

I just hope as we go through the economic wringer we aren’t so far down the path we can’t take whatever steps are necessary to lead us into prosperity. We get all the buzz words when we talk about the answers. The more economists you have, of course, the more of the latest jargon you get, whether it is structural changes that may be necessary or what have you.

Mr. Laughren: It’s a bad day for economists.

Mr. J. A. Taylor: But maybe it’s a good day for psychologists. It may happen that things have to get so bad no government could stay in power and do what was necessary.

Mr. Laughren: You’re headed in the right direction.

Mr. J. A. Taylor: Then you lose all control; then you carry on from there.

I will bring myself back, Mr. Chairman, to the matter of policy and what we have been discussing at some length this afternoon; that is getting to the people; straight talk, hands up but no handouts.

Mr. Young: Does that apply to industry too? No handouts?

Mr. J. A. Taylor: Industry should be able to survive on its own account.

Mr. Young: But that’s not Tory policy.

Mr. J. A. Taylor: I’ll debate that with you.

Mr. Laughren: We have discovered a split in the Tory party.

Mr. J. A. Taylor: There is no split, we have been talking about the free enterprise system --

Mr. Laughren: You have been.

Mr. J. A. Taylor: -- and there isn’t, as has been said today, any free enterprise system. There is a marketplace system, and the marketplace has simply been continually --

Mr. Haggerty: You’re embarrassing the minister.

Mr. J. A. Taylor: -- interfered with and regulated. We really don’t know what the results of our regulations are going to be. The bigger the problem, the more momentous the decisions; and of course the more dire the consequences if you make a mistake.

We have many problems in terms of interference in the marketplace. I could take this argument into our boards, our marketing boards and the consumer side of that and so on; we do get into that kind of problem.

Mr. Young: What about monopolies and cartels? They interfere with the marketing system.

[5:30]

Mr. J. A. Taylor: Cartels, that’s right. If you want to talk cartel you can talk about the marketing boards. The egg board is a cartel, The milk marketing board is a cartel. We have supply management and if you --

Mr. Haggerty: They’re all for that.

Mr. J. A. Taylor: Sure, and if you don’t judge what your demand is going to be and you miscalculate on the supply that you permit, then of course you suffer the consequences in terms of prices in the marketplace that we are suffering in some cases today. That’s just a simple fact of life.

I don’t want you to draw any conclusions from that and I’m sure you won’t, unless maybe they’re inaccurate. There are two sides of course to this particular problem and once you adjust one part of the equation you must, of course, adjust the other. Then you get more interference in the market place.

I’d like just to go back to the question of assessment, because much of the discussion centred on market-value assessment.

Mr. Laughren: Very little.

Mr. J. A. Taylor: You may not have been here, Mr. Laughren, when that discussion took place.

There’s been criticism, again, of the province’s role in that. I haven’t been reluctant to criticize where I felt it was warranted. If we look in retrospect, I think we made a mistake. We made a mistake in getting bigger and bigger and taking over the entire field so that we had a system that became sensitive to the local problems, and of course, the financing of municipalities.

It’s one thing to get the assessor off the tractor and away from his assessment rolls in the farm kitchen and streamline that a little bit. That’s one thing. But that evolution from the municipal assessment departments to the county assessment departments to province-wide assessment, I think was too big a step. You can see where a lot of revenue has been lost over the years because of that. An able assessor would be out there with his supplementary assessments every time there was some addition on a house or a new house was started and those new assessments would be on that assessment roll. I think with that closeness you had with the local situation you had a much more accurate and, I think, realistic assessment roll.

At the county basis I can see the expansion and the reason for it. Again, I see the problems in terms of what we call split mill rates; the classification of properties where you had the residential class being preferred over the commercial and industrial classes. I believe the Treasurer made reference to grants, as they were called in the old days, when they were earmarked for a specific classification.

The member for Yorkview may very well remember when the three per cent provincial sales tax was implemented under the premiership of Leslie Frost. They called it the “Frost bite.” Remember that? There was a rationalization that --

Mr. Deans: Is that what they called it?

Mr. J. A. Taylor: That’s what it was called.

Mr. Deans: The Frost bite?

Mr. J. A. Taylor: Yes, maybe you weren’t even in the country even at that time, but this is in the early --

Mr. Deans: Even though I wasn’t, it’s still humourous.

Mr. J. A. Taylor: Sure it is. That’s what we called it; the Frost bite.

Mr. Deans: I can appreciate jokes even though I wasn’t there when they originated.

Mr. J. A. Taylor: Okay, I won’t debate that. I thought it was pretty clever too.

Mr. Young: The people seemed to like it. They still voted for it.

Mr. J. A. Taylor: But do you remember that three per cent sales tax? Fred, you remember that.

Mr. Young: Oh sure.

Mr. J. A. Taylor: A part of that was to go to the municipalities to be applied to the residential assessment.

Mr. Deans: Whatever became of that idea?

Mr. J. A. Taylor: That went out as a grant for the residential assessment, and there you had the beginning of the split mill rate. Going to the municipalities, you had the cushion that was protective in terms of the escalating real property tax. There was a temptation on the part of the municipalities to spend that money. That’s what happened.

Mr. Haggerty: Just like some grants you give to them. It encourages them to spend money.

Mr. J. A. Taylor: That’s right. It becomes an incentive to spend more instead of economize.

Mr. Haggerty: Like Wintario.

Mr. J. A. Taylor: I won’t get into Wintario. It may be outside these estimates. I’m not sure from today’s debate what is outside of these estimates.

Mr. Deans: Don’t let that stop you. Tell us anyway.

Mr. J. A. Taylor: When I think of the evolution of those grants and the days when the cheques were sent out to the property owners -- it was pretty nice to get a provincial cheque.

Mr. Haggerty: Lorne Henderson delivered them all.

Mr. J. A. Taylor: So now we have the property tax credits, the province-wide assessment and I think much of the inequity that we’re experiencing. I think we all recognize that. I think we recognize that when errors are made, we have to reform and put back more control of assessment into the regions and at the local level.

Another matter I would like to bring up with the Treasurer is a matter I asked the Minister of Transportation and Communications (Mr. Snow) about. When we talk of grants I’m concerned about the special treatment and discrimination that is inherent in benefits to one part of the province over another part. I’m speaking now about the licence fee -- $10 in the north -- which was extended. I’m sorry the Minister of Revenue (Mr. Maeck) isn’t here because I gather it was intended to include his riding. I was asking that it be extended to include my riding of Prince Edward-Lennox.

Mr. Peterson: You’re as bad as he is.

Mr. J. A. Taylor: Certainly.

Mr. Peterson: First thing you know we will have it in Chatham-Kent.

Mr. J. A. Taylor: When I look at the rationalization of that tax, where you have a reduction in the north country -- part of the so-called north country, based on a line north of the French River -- and you have other parts of Ontario, such as eastern Ontario, where we suffer economically.

Mr. Peterson: See it in Muskoka next.

Mr. J. A. Taylor: I have a difficult time rationalizing that kind of program. I hope the minister answers me on this.

I know the answer was that we have such large distances to cover in the north.

Mr. Peterson: If your seat’s in trouble you get it.

Mr. J. A. Taylor: We have higher gasoline taxes. We have the kind of argument you’ve advanced over there, that we should have one gasoline price for Ontario, the same as beer -- which I don’t accept, incidentally.

I also think that special treatment in areas like that is very difficult to write or readjust, and it can be very divisive in the province. If there was ever a time when it was necessary to be together on these matters, I think it’s now. I would ask the Treasurer to consider the future of that licence fee and what it means in regard to gasoline prices, for example.

We’ve heard about Alberta today; we’ve heard about British Columbia; we’ve heard about fuel prices; we’ve heard about exports of natural gas --

Mr. Haggerty: And you can all buy cheaper in the States too --

Mr. J. A. Taylor: Sure, we have all kinds of golden opportunities we can seize upon in this province today. We certainly have. When I think of the game of charades they play in Ottawa in terms of pricing natural gas and oil, I’ll tell you it’s simply mind-boggling.

Mr. Laughren: Your Treasurer can’t make up his mind either.

Mr. J. A. Taylor: It doesn’t take very long to see that the agreement is already made before you get to these conferences.

Mr. Deans: Absolutely, just like coming into the Legislature.

Mr. J. A. Taylor: Then the conference is an orchestration to give some credibility to what’s already been done.

Mr. Ruston: Don’t forget Joe Clark approved it.

Mr. J. A. Taylor: Joe who?

Mr. Ruston: Call him McTeer if you want to.

Mr. J. A. Taylor: He’s a great guy. He speaks very highly of you.

Mr. Young: You were the Minister of Energy. You should know.

Mr. J. A. Taylor: Yes, sir, I was.

Mr. Laughren: And you acquiesced.

Mr. J. A. Taylor: No, sir, I didn’t.

Mr. Deans: Why don’t you tell us what really happened?

Mr. Deputy Chairman: Order.

Mr. Laughren: You were for Ottawa too.

Mr. Deputy Chairman: Order. Would the member please continue with the debate before us?

Mr. J. A. Taylor: Thank you, Mr. Chairman.

Mr. Deans: While we’re on the subject of energy, why don’t you tell us what really happened? This is your chance.

Mr. Deputy Chairman: May I ask the member for Wentworth to refrain from interjecting while the member continues his speech?

Mr. Peterson: At least, let him tell us what happened to him.

Mr. J. A. Taylor: I don’t want to bare bones to the Legislature. When we get into these areas, we often think we’re participating and making decisions but we’re not.

Mr. Ruston: A filibuster.

Mr. J. A. Taylor: That’s the charade I’ve been talking about.

Mr. Deans: And there are some of us who know better.

Mr. J. A. Taylor: That’s the mythology of government I’ve been talking about. That’s why I say we’ve got to go to the people and let them know what it’s all about.

Interjections.

Mr. J. A. Taylor: It’s all very well to see John Turner, the Minister of Finance in 1975, add an excise tax of 10 cents a gallon to gasoline and then rationalize that in regard to an equalization fund and conservation, when it was really a fill-the-bucket routine to supplement the revenues of the federal government.

Mr. Young: It cut back on our competitive position entirely.

Mr. J. A. Taylor: The giving up now of three cents of that is just a little reverse step. I can understand the tremendous conflict the federal Minister of Energy, Mines and Resources must have had in trying to have Alberta forgo the next price increase because the loss of revenue to the federal government is tremendous.

Oil today joins commodities like liquor as the most highly taxed commodity in the country. In the meantime, we have products that are so necessary for everyday consumption escalating in prices and many people suffering because of these contrived prices.

Mr. Haggerty: Yes, the province is deeply enriched in that area.

Mr. J. A. Taylor: We have a role to play in that, but I won’t develop that here because I want to make sure we’re within the realm of these estimates.

Mr. Laughren: You’re right on.

Mr. J. A. Taylor: I want to say before I sit down that there’s been some criticism of the Treasurer -- not very much, mind you -- but a little bit from the people opposite. I want you to know we have a sensible Treasurer, a conservative Treasurer, a Treasurer who is bringing accountability into government spending, a Treasurer who is sensitive to the needs of the province --

Mr. Haggerty: Look at his past record.

Mr. J. A. Taylor: -- and a Treasurer who is strong and brave enough to make change where change is necessary. I wanted to rise in support of that.

Mr. Deans: Do you mean you’re supporting him?

Mr. J. A. Taylor: Absolutely. He’s a great guy. You’ve all said it. You’ve all read it. He’s just a great guy and he’s going to stand up and respond in a minute to all of us.

[5:45]

Mr. Peterson: What do you think of Jimmy Auld?

Mr. J. A. Taylor: I don’t want to get into someone else’s estimates but my estimate of Jimmy Auld is just the highest.

Mr. Peterson: What do you think of John Lane?

Mr. J. A. Taylor: He’s the next Minister of Northern Affairs when Leo Bernier passes along.

Mr. Laughren: Passes on?

Mr. J. A. Taylor: Leo is going to be around here a long time, but Leo may be elevated to some other portfolio and that will open the way for John Lane, who has in that riding of his those sensible constituents who appreciate his hard work and his understanding of the problems in his riding.

Mr. Peterson: For your information, Leo passed along two years ago.

Mr. Deans: How about a word or two for Andy?

An hon. member: Andy -- give Andy a plug too.

Mr. J. A. Taylor: Mr. Chairman, if you would bring some order into this House, then I wouldn’t get sidetracked on these important dissertations on the commendability of members like John Lane.

Mr. Deans: But what about Andy?

Mr. J. A. Taylor: Andy is dandy. That’s almost an Ogden Nashism.

Mr. Deans: How about the Chairman? What do you think of the Chairman?

Mr. J. A. Taylor: You know Ian, when you retire, when you leave the Legislature, I might even say you weren’t a bad guy. That may take something, but I might even come around to confessing you have made a certain contribution here.

Mr. Deans: You know, that might even encourage me to stay.

Mr. J. A. Taylor: I might even go so far as to say I’m sorry you’re leaving.

Mr. Laughren: Really?

Mr. J. A. Taylor: As a matter of fact, it’s unfortunate you weren’t the leader of that party. If you were, you would stand a better chance in the next election.

Mr. Peterson: If I leave, will you say something nice about me?

Mr. J. A. Taylor: I say that sincerely, not to detract from your present leader. I was just amazed your convention in its infinite wisdom didn’t choose you.

Mr. Deans: What about Ozzie Villeneuve? Do you like Ozzie? He is here.

Mr. J. A. Taylor: Now, Ozzie is a great guy too.

Mr. Ruston: This is not the estimates. Mr. Chairman, call for order.

Mr. Peterson: Ozzie or Oozie?

Mr. J. A. Taylor: But that’s not in the estimates. Ozzie is not in the estimates.

Mr. Deputy Chairman: Order. Order. Could I ask the members please to get back to the estimates.

Mr. J. A. Taylor: Thank you, Mr. Chairman.

Mr. Laughren: What do you think of Bill Marshall?

Mr. J. A. Taylor: I would ask in closing, Mr. Chairman, if the Treasurer could respond to the psychology of the time in which we’re living in terms of the public expectation and the strategy we could use in order to put some perspective of where we have been and we’re going and how we can make government responsive and accountable to the times.

If we do not capture the imagination of the people, if we do not have the support and the conviction of the people as to what we’re doing, then no government will succeed in bringing about a period of prosperity.

I know that’s a very difficult thing. The psychiatrist from the Hamilton area may be able to project in terms of psychology but I would really prefer the good sense of the Treasurer to indicate whether in this contest against inflation, loss of productivity, problems in terms of competitiveness -- and they are problems in terms of the GATT talks -- we can go public and try to involve more people in the need to be more understanding and willing to maybe give a little, maybe sacrifice a little for the future.

Mr. Haggerty: Your prophecy is so far wrong. We are looking for a miracle. We are not going to get it from that side; no hope at all.

Mr. J. A. Taylor: I guess you are right. I should be more cynical. I guess you are right, maybe that is being overly optimistic. It’s not being practical, but surely there has got to be a message given, saying it like it is. I think it is certainly a time for straight talk.

Mr. Laughren: This is a benchmark speech.

Mr. Haggerty: You want a Howard Cosell.

Hon. F. S. Miller: It was a pleasure to have a member from the east speak to me. They have all been from the west. I will reply to some of the high points of my colleague’s speech.

Mr. Laughren: It will be a short response.

Mr. J. Reed: Hit the majority.

Hon. F. S. Miller: That’s what we try to get.

He talked of expectations. Expectations in this country as measured by the pollsters a couple of years ago, they tell me, were perhaps the highest of any industrialized nation in the world. Yet expectations in this current year, again as measured by the pollsters, are not quite as high in the minds of many Canadians. That, of course, has been reflected in a good deal of the debate we have heard here in the last while.

Mr. Deans: Since Darcy left?

Hon. F. S. Miller: No, I think perhaps even the change occurred prior to that.

Mr. Peterson: Spending expectations are up.

Hon. F. S. Miller: The expectations of a nation are hard to assess in terms of cause. Sometimes they are based on solid results and sometimes based upon a projection of what has happened in the past. I think perhaps in our case we had lived through since the war a period of continuous boom. The so-called recessions we knew in the post-war period were so minor as to go almost unnoticed by anybody but an economist who had to have a definition of what a recession was to know we were in one.

Mr. Laughren: Oh, another Miller homily.

Hon. F. S. Miller: The expectations did change.

Mr. Laughren: I am going to write that Miller homily down.

Mr. Deans: If it hadn’t been for the social programs we would have known.

Hon. F. S. Miller: The expectations did change because along on the scene came a simple understandable thing -- a lower Canadian dollar.

Mr. Deans: There is one thing; if it hadn’t been for the social programs that were put in place by governments --

Hon. F. S. Miller: There wouldn’t be a lower Canadian dollar.

Mr. Deans: We would have been in an awful mess as far as depressions are concerned.

Hon. F. S. Miller: Let us not get sidetracked. I talked about that earlier and your colleague to your left told me I was totally wrong.

Mr. Deans: You were totally wrong? You probably were.

Hon. F. S. Miller: Yes. So you had better get your act together in the party.

Mr. Peterson: Address your remarks to me, Frank, if you need help. I will help you.

Hon. F. S. Miller: The lower Canadian dollar has been an understandable economic signal. Even though it may have been misunderstood it has been easily understood to indicate something is rotten in the state of Denmark.

Mr. Deans: Why are you always blaming it on some other country?

Hon. F. S. Miller: Whether it is or isn’t isn’t the issue.

It was so quiet before you came in.

Mr. Deans: You get away with murder when I’m not here.

Hon. F. S. Miller: In any case, that pause in expectations has had an interesting effect in that we have seen in Canada, for the first time in some years, the actual demands in the labour market ameliorate a bit. We have seen our unit costs drop to 3.4 per cent real growth this year over last year -- one of the lower growths recently.

Mr. Laughren: Tell us about bank profit expectations.

Hon. F. S. Miller: We have seen ourselves catching up, and closing -- in fact in some cases have closed -- the gap with the USA in terms of certain costs. I am told now that average salaries in US dollars in Canada are slightly lower than average salaries in the States for the first time in some time. That, of course, is largely accounted for by the devaluation of the Canadian currency. But all of that will give us a pause, as I said the other day, which we can use, if we use it well, to give us some long-term economic gain in this country. I truly believe that.

What we need to do is to stimulate the development of foreign markets while we have that advantage. That advantage may or may not remain forever, but it can be used to stimulate the improvement of Canadian industry, and improvement, in particular, of our selling techniques.

You referred to Japan and I am a great believer in the success of that nation. A great deal of it was due not to theft production techniques so much as to their ability to get out and do some hard selling all around this world.

Mr. Deans: And because their government was actively helping them.

Hon. F. S. Miller: I am not arguing that today; I am talking about expectations of people.

Mr. Deans: That’s right, but they went out and sold.

Hon. F. S. Miller: My colleague got on to the discussion of a balanced budget. I was interested at the Ottawa meeting to hear our federal colleagues cautioning us not to balance the budget, I think, in their words, “too quickly.” I don’t disagree with that. I think that Mr. Friedman, the economist, looked at Great Britain a while back, and said their way of solving their inflationary problems was to take a series of small steps.

Some of the southern countries like Peru or Chile had inflation at the rate of 100 per cent plus a year. Nothing but a dramatic approach would work there. But where we have inflation at the rate we have, and where we have budget deficits of the order we have, I think probably an orderly progression is the way to go; a series of steps, no one too large for the economy to absorb, that will eventually bring us to that desirable target -- a balanced budget. Then the moneys we have used in the meantime from pension funds, collected mainly from government or government-related employees, will be freed up and will not be used any more for our own purposes, but available as capital for the creation of more industrial investment.

He talked about regulatory problems. One of the problems all of us in this House have to be very aware of is our penchant for taking a good idea like environmental assessment and converting it into a totally impossible administrative morass. I don’t say that is necessarily one, but in other words we have an objective in mind, a worthwhile one, one which this House can agree on, and yet we can sometimes frighten the investments south, as somebody said, simply because the hurdles in the process of approval can become so real that industry finds it impossible to live with us.

I say that because I think the fear of passing through the regulatory process often defers investment more than anything else. I think it’s very wise that not only Ontario but, thank goodness, all provinces of Canada, including the federal government, last week discussed that problem at length, discussed it in the Canadian context and said yes, it was the time to appraise regulatory processes.

Mr. Peterson: You have been saying that for years.

Hon. F. S. Miller: All right, we have been saying it and doing it. In fact we discussed how to make it easier and faster for investments to be made.

Mr. Peterson: So you help out a few poor unfortunate horses under the Pregnant Mare Urine Farms Act.

Hon. F. S. Miller: He talked about licence fees. Surely, I would have liked to have had licences for automobiles at $10 in my riding. Don’t hang on waiting for it to happen. I don’t think you’ll find me giving my riding an advantage that I wasn’t willing to give to others which are equally needy. I find it embarrassing and very difficult to live with the licence plate line through the middle of some of the towns in my riding.

Mr. Peterson: How about London Centre?

Hon. F. S. Miller: Yes, you deserve it in London Centre; the poor and the needy all deserve it. I think the answer there is for us to look at the overall equity of the system of raising the funds needed to run the highway system of Ontario, be they gasoline taxes or be they licence plate fees. Certainly, that’s one of the duties I have as a Treasurer, and certainly it’s one I’ll look at even if all it does is reconfirm what we do -- even if that’s the only net result of it. I can assure you, because the pressure is on me, that kind of thing needs to be done.

Mr. Peterson: Let’s have a half million dollar study.

Hon. F. S. Miller: The last thing the member talked about was the price of oil. Somebody across there -- I think it was the member for Nickel Belt -- at that point said we were vacillating on that.

Mr. Laughren: Yes.

Hon. F. S Miller: The one province that didn’t vacillate at the meetings last week was Ontario. Ontario, as the Premier (Mr. Davis) said here clearly on Thursday, knew exactly what it wanted in terms of the price of oil. It has been, is, and will continue to be unalterably opposed to the world price.

Mr. Laughren: That’s not what you were saying two weeks prior to that.

Hon. F. S. Miller: No, it isn’t. We simply felt no government had the right to change unilaterally an agreement it had with another government without discussing it with them. That’s what we were opposed to. The Minister of Energy was the gentleman who carried that message and he would confirm that. We in Ontario stood up clearly for a deferral. We were not for any increase later on. We found the price of the deferral was an increase heretofore not agreed to by the federal government and the producing provinces who, incidentally, were the only necessary signatories, and the only necessary people to discuss it with. It intrigued us, made us a bit suspicious, that at the last second we were asked to give our opinion when in previous cases we had not been asked. It made us wonder if perhaps, just perhaps, political issues had entered the discussion.

Mr. Laughren: Can’t trust the Liberals. You know that.

Item 2 agreed to.

Vote 1102A agreed to.

On motion by Hon. F. S. Miller, the committee of supply reported a certain resolution.

The House recessed at 6 p.m.