The House met at 10 am.

Prayers.

HANDICAPPED PERSONS’ RIGHTS

Hon. Mr. Elgie: Mr. Speaker, I rise on a point of personal privilege. In Wednesday morning’s edition of the Toronto Globe and Mail a news story appears on page five which bears the headline “Elgie To Withdraw Disabled Bill.” The article which follows relates to the statement I made on Tuesday in the House, with respect to Bill 188, An Act to provide for the Rights of Handicapped Persons.

My point of privilege is that the headline, together with the first paragraph of the article referring to the withdrawal of the bill, are incorrect, misleading and not in accordance with the statement I made on Tuesday. At that time I stated that, in view of the stand taken by those in opposition to the bill, I can see no purpose in proceeding with second reading. At no time did I indicate that it was my intention to withdraw the bill.

I remain prepared to honour that commitment given in my statement that the bill could be treated as interim legislation, to be incorporated in the provisions of the Ontario Human Rights Code, once the broader revisions to the code are introduced.

If it is felt there should be opportunity for public submissions, I would be quite prepared to have the bill referred to a standing committee for that purpose. However, I remain ready to proceed and the decision whether or not to continue to oppose the principle of separate legislation lies clearly with the opposition parties.

STATEMENTS BY THE MINISTRY

TILE DRAINAGE PROGRAM

Hon. Mr. Henderson: For more than 100 years, this province has encouraged farmers to increase productivity by improving the drainage of their land. When good drainage is added to good management practices, farmers can as much as double their production. Not only that, but they can often grow new and different crops on their land.

To date, I estimate that drainage has been improved on about 3.2 million acres of land in Ontario. Another three million acres still require improved drainage. At the current rate of improvement, the remaining land will be tiled within the next three decades.

In the last 10 years farmers spent about $245 million on maintaining or improving the drainage on 1.3 million acres of Ontario farmland. About $111 million of this was borrowed from the province under the tile drainage program. At present, under the current program, drainage is being maintained or improved on about 200,000 acres every year. About one third of the money comes from provincial loans.

It has become necessary to change the program’s allocation system so we can provide assistance in a more uniform manner to a larger number of people. For 1980-81, I am recommending the following guidelines for use by municipal councils:

Initial drainage allocations will be announced following the Treasurer’s budget in the spring. They will be based on the applications received over the previous three years.

A municipality may apply for a reallocation of funds for tile drainage debentures, based on the applications received by the municipality prior to August 31 of each year.

As in previous years, applications are to be based on not more than 75 per cent of the estimated cost of the project, up to a maximum for 1980-81 of $200 per acre tiled.

The maximum amount any one farmer may receive in loans in one year is $10,000 and the maximum cumulative loan for a farmer is not to exceed $40,000.

These criteria have been designed to ensure that as many farmers as possible will be able to take advantage of the program. I strongly suggest that municipalities bear them in mind when considering and approving future loan applications.

AGRICULTURAL RESEARCH PROJECTS

Hon. Mr. Henderson: Mr. Speaker, I have another statement regarding research projects.

A few months ago, my ministry was allocated $5 million from provincial lottery funds to use for research. The fund was established to support special research in the broad areas of food supply, food safety, nutrition and health.

I am pleased to say that when we asked for applications, we received 85 research proposals. These have been evaluated and 12 have been chosen. They will be supported by grants from the fund over the next one to three years.

One of the major areas of concern to both producer and consumer is chemical pest control. One of the projects chosen is a biological control experiment. Sterile onion maggots will be mass reared and released to compete with wild flies and prevent their reproduction. This will be an extension and evaluation at the commercial level of laboratory experiments which the ministry has supported in previous years. If this project is successful, attempts will be made to apply the technique to other pests. The University of Guelph will undertake this project in the Keswick marsh.

In the food safety area, two projects are of a particular note. One of these will be aimed at developing a health management system for dairy and swine herds that will reduce the reliance on drugs. Lowered costs of production and improved meat quality are also aims of this project.

The second will be directed at the poultry industry and the elimination of salmonella contamination. This project will review the entire production and processing system. A rapid, economical mass screening test will also be explored.

In the area of food supply, a group of researchers will examine ways to improve the handling, storage and treatment of peaches for the fresh market. We hope this project will extend the storage period, making fresh peaches available for a longer period. Another group will select grapes for experimental planting in southern Ontario, outside the traditional grape-producing area. In this way, we hope to expand the area in which wine grapes can be grown to supply Ontario’s expanding wine industry.

In two other projects associated with the poultry industry, researchers will examine immune responses in chickens and will attempt to develop a vaccine to protect turkeys from a fatal disease. Other fruit and vegetable projects include an attempt to predict serious outbreaks of apple scab, a study of ethylene gas in the breakdown of quality in leafy vegetables and an effort to develop new mushroom species for commercial production.

An additional livestock project will develop an insemination program for sheep that may be applied on commercial farms.

These projects will be undertaken by a number of different organizations, including the Ontario Tender Fruit Producers’ Marketing Board, the University of Guelph, Brights Wines Limited, United Brewers, the University of Toronto and J. M. Schneider Incorporated.

For the first year, we have set aside $800,000 for projects to be funded this year. A total of $1.8 million has been committed for two- and three-year projects. I am providing members with a list giving the title of each project, together with the name of the recipient budget figures and a brief outline.

All of these projects, Mr. Speaker, have the object of improving the supply and quality of Ontario-grown agricultural products. I need hardly say that we in Ontario already enjoy very high standards in food products, but we’re always looking for ways to improve; that’s how we stay on top.

The projects are listed on the attached two pages with the statement and the awards.

Mr. Deputy Speaker: Statement number three.

Mr. Conway: It is about those cheapskates in Ohio.

Hon. Mr. Henderson: Might be, give it time.

CHICKEN QUOTAS

Hon. Mr. Henderson: Mr. Speaker, I should like to review a few facts regarding Ontario’s position in the national chicken marketing plan.

The Quebec and Ontario chicken boards, under the direction of the Canadian Broiler Council agreed voluntarily on production targets in the early 1970s. These targets were for equivalent broiler chicken production in Ontario and Quebec. Subsequently, this 50- 50 relationship was reflected in the base allocation for Ontario and Quebec in the national plan agreement. That agreement was signed by both the Ontario chicken board and the Ontario government.

However, these base allocations in the national agreement refer only to 1974 conditions when the national production was 650 million pounds of chicken. The national quota we are looking at today is for 880 million pounds of chicken. The question is how is that additional 230 million pounds of chicken above the base to be allocated to the provinces? This question is answered in the criteria set out in the national agreement for determining provincial allocation above the base and nowhere do these criteria refer to base allocations.

The voluntary agreement between the Quebec and Ontario chicken boards in the early 1970s and the base allocations in the national plan do not determine provincial allocations above the base allocations in the national plan.

Clearly, since the individual provinces signed the national agreement, each province is a market area, as referred to in the national plan. In order to ensure there could be no possible misunderstanding on this point, I instructed my assistant deputy minister, Bill Doyle, to attend the meeting of the national chicken agency before they establish the allocations for 1980, to reiterate our position on that very point and to remind them that the base allocation figures in the agreement in no way constituted permanent shares of the national quota.

I was the first to launch the appeal to the National Farm Products Marketing Council against Ontario’s allocation of chicken quota recently established by the national chicken marketing agency for the year 1980. I authorized my staff to proceed with the appeal on Friday, November 30 -- two weeks ago today. This decision to launch the appeal was discussed with the Ontario chicken board as soon as we became aware of the full facts.

The chicken board agreed with us that the allocation should be appealed. Both the government of Ontario and the Ontario chicken board went to Ottawa on December 13 -- yesterday -- to present this appeal. Bill Doyle, my assistant deputy minister of marketing, represented me at that meeting, together with other members of my staff.

The position of the ministry and the government has always been clear on these points. Certainly the Ontario chicken board and the chicken industry in Ontario has always understood our position and has been in agreement with it.

Mr. Riddell: You should have gone down and shown your weight, not just send some civil servants. You should have gone down, Lorne, that’s your responsibility.

Mr. Deputy Speaker: Order.

Hon. Mr. Henderson: I appreciate the member’s comments, Mr. Speaker. They are well accepted.

I have now been informed that in hearing this appeal yesterday the National Farm Products Marketing Council committed several serious errors in procedure to which our representatives took strong exception. The council, after having decided to allow our legal counsel, John McMurchy, the right to be present while the national chicken agency defended its position in order to be able to respond to the agency’s position, later reversed itself and excluded all of our representatives from the room during the agency presentation. This is contrary to any concept of natural justice.

[10:15]

Of even greater concern was the behaviour of one council member, Mr. Adrian Levesque of New Brunswick, who early in the proceedings clearly stated he had made up his mind and left no doubt in the minds of our representatives that he was opposed to Ontario’s position. This is unacceptable behaviour on the part of a member of a body given the responsibility of settling disputes.

CHILDREN’S LAW REFORM

Hon. Mr. McMurtry: Today I will be introducing for first reading only the Children’s Law Reform Amendment Act, 1979. This bill is a further step in our program of family law reform and expands the Children’s Law Reform Act, 1977, which abolished the status of illegitimacy.

The bill represents a comprehensive reform and consolidation of child custody law and procedures in order to strengthen and elaborate the principle that the best interests of the child should be the focus of legal proceedings in a family dispute about custody of the child. Included in these reforms are extensive provisions for the enforcement of custody orders and deterrence of child abduction. The bill also cures a small but important problem with respect to the rights of parents to administer their children’s property. It re-enacts in modern language the provisions of the Infants Act concerning disposition of children’s property and permits a limited revival of the power to provide for custody by will.

At present, the Ontario law relating to custody disputes is very fragmented. There are two statutes, the 50-year-old Infants Act and a single section of the Family Law Reform Act, 1978, and two sets of court procedures, one for the Supreme and county courts and one for the family courts.

In addition, the courts have made a number of innovations in recent years to serve the best interests of the child. Accordingly, one of the primary purposes of this bill is to provide through legislation uniform powers and procedures, so far as possible, in all courts hearing custody matters.

I would like to highlight just a few of the many provisions of the bill.

While the concept of the best interests of the child is universally accepted, it is sometimes difficult to assess what factors are most relevant in determining the best interests of the child in individual cases. To ensure no significant factors are overlooked, the bill provides that in determining the best interests of the child the court is to have regard to a list of seven factors, including the love, affection and emotional ties between the child and the members of the family; the views and preferences of the child; the capacity of the parties to meet the needs of the child; the stability of his current home environment and the proposed home environment; and his natural relationship to the parties. The ability of the court to make the best decision on behalf of the child is directly related to the amount of relevant information available to the court.

While the evidence presented by the parties will continue to be the main source of information, the bill also specifically recognizes the right of a child to make his views and preferences known, permits the court to obtain assessment reports, streamlines the system under which reports of the official guardian are provided and allows the court to interview the child.

To reduce the amount of time a child must exist in a state of conflict and uncertainty pending final determination of the dispute, the bill requires that as a general rule the hearing should be completed within six months.

As members know, in custody cases there is no matter of greater concern to the people of Ontario than the problem of enforcing custody and access rights and preventing one parent from abducting the child from the other parent. A major portion of this bill is therefore devoted to these problems.

While Ontario is without power to enact legislation that will govern Ontario residents while they are in other provinces or countries, we have taken a number of steps to strengthen the enforcement of custody orders in Ontario and to make it more difficult to remove a child from Ontario unlawfully.

In this regard, under the bill a court would be permitted: (a) to order third party supervision of custody and access rights; (b) to appoint a person to mediate custody and access provisions; (c) to order one party not to harass the child or another party; (d) to punish contempt of court orders; (e) to direct a peace officer to apprehend a child who is being unlawfully withheld from the person entitled to custody or access; (f) to order public agencies to disclose the address of a person in breach of an order; (g) to order a person to surrender his or her passport while exercising custody or access rights; and (h) to order that a person provides security when he or she proposes to remove the child temporarily from Ontario.

While these provisions will make it more difficult to remove the child from Ontario, a second set of provisions will make it more difficult for parents abducting children in other jurisdictions to bring the children to Ontario to seek a new custody order here. This second set of provisions is based on a refinement and expansion of the uniform extraprovincial custody orders enforcement act, now in force in eight provinces.

Under these provisions, Ontario courts will be required to enforce custody orders made in other jurisdictions, except where the child is in danger of serious harm. This will deter kidnappers from breaching custody orders in other provinces and bringing the children here in hope of gaining a favourable order from an Ontario court. Furthermore, if there is no custody order in another jurisdiction, Ontario courts will be directed not to make a new custody order unless the child is habitually resident in Ontario.

Mr. Deputy Speaker: Order. There seems to be a number of private conversations that are rather noisy.

Hon. Mr. McMurtry: Rules are prescribed for the determination of habitual residence. Among other things this will deter parents from abducting the child before or during court proceedings in another jurisdiction.

With respect to the guardianship of children’s property, the bill clears up an uncertainty in the law. It provides that where a child becomes entitled to an amount of money less than $2,000 and no other provision has been made for receiving and administering the money -- lottery winnings are an obvious example -- the parents may act as trustees of the money.

The final point I wish to mention concerns the problem that arises when both parents, or the sole parent with custody, die before the children have reached the age of majority. Everyone will recall the sad case of the children who were orphaned a few months ago when their parents were killed in a traffic accident. This bill will recognize the right of parents to make provision in their wills for the custody of their children in the event of such tragic circumstances.

This bill brings up to date and consolidates existing law and practice. It is also the most modem and comprehensive provincial custody statute in Canada. It is fitting then that it be introduced now in the International Year of the Child.

As with other family law reform legislation, we realize that where law touches fundamental rights and responsibilities within the family there ought to be full opportunity for study and discussion. By introducing the bill at this time, we will be able to benefit from informed public comment and make any amendments or elaboration necessary before reintroducing the bill next session.

ORAL QUESTIONS

FEDERAL ELECTION

Mr. S. Smith: Just before asking my question, I want to tell the Premier, with regard to our small wager, that I think it’s only fair that I give him some opportunity to recoup, perhaps on the next Tiger Cat-Argonaut game, provided he promises me he’ll bet on the Argonauts. If I have that promise we’ll let it ride until the football season, but only the regular season game.

Interjections.

Mr. Deputy Speaker: Order. Oral questions. The Leader of the Opposition.

Mr. S. Smith: Mr. Speaker, you’ve been in caucus. You know what these things are like.

I would ask the Premier a question, Mr. Speaker. Is it the Premier’s intention to do as he did last time and, in the coming election while he is Premier of Ontario, support Mr. Clark in the federal election campaign?

Secondly, in his capacity as leader of the Ontario Conservative Party, is it his intention again to place the facilities of the Ontario Conservative Party at the disposal of the federal party during this election?

Hon. Mr. Davis: Mr. Speaker, to answer that question takes a few moments. One has to trace the chronology and my own political outlook on life. I know it’s different from that of the Leader of the Opposition.

Replying to the second part of the question, the Progressive Conservative Party of Ontario has never endeavoured to dissociate itself from the Progressive Conservative Party of Canada. It is fair to state that since I have been in political life, I have always felt if one is a Progressive Conservative, one has a certain loyalty to one’s national leader. One doesn’t quietly say to one’s friends, “I would like to get rid of the national leader”; one doesn’t go to a public meeting at OISE and say, “It would be a great service ... ”

I make no bones about it. I supported John Diefenbaker and I make no apologies for it, that happens to be our system. I don’t go up to OISE and say Pierre Elliott Trudeau would do a great service to Canada if he were to resign. I even suspect the Leader of the Opposition himself voted for Joe Clark. That is the information I get. I suspect he did.

I say this very kindly to the Leader of the Opposition. His noninvolvement, his calculated noninvolvement, in the last federal election by its nature was an implicit support of the Prime Minister of Canada. No question that is the way it happened.

I made it quite clear the Leader of the Opposition was supporting Joe Clark in his own way. Don’t let him try to kid anybody about that. He was trying to dissociate himself from Pierre Elliott Trudeau.

If the federal Liberal caucus determines within the next hour or so that Pierre Elliott Trudeau is going to lead the honourable member’s party nationally into this election, I am interested in knowing is the Leader of the Opposition going to by implication once again support Joe Clark? That would be a very fair question to ask.

Mr. S. Smith: What nonsense.

Hon. Mr. Davis: Oh, come on. The member opposite has lost more credibility in his own party by his manoeuvrings in the past eight to 10 months than he would like to believe. He really has. I happen to know.

The other thing I was asked by the press, and very properly so, concerned Mr. Clark and I. The government of Canada and the government of this province have disagreed on energy policy. No question about it. I campaigned for Mr. Stanfield when the main plank in his platform was wage and price control. I wasn’t personally committed to that policy. He was our national leader. I campaigned for him and in spite of some of the reports in the press, I actually spent more time campaigning for Robert Stanfield than I did for Joe Clark. No one asked me when Bob Stanfield lost what my point of view was -- did I feel that my participation had some impact?

What is intriguing is some very few months after the same party opposing Mr. Stanfield said, “No way will we have wage and price control,” they introduced it.

People’s memories aren’t as short as the Leader of the Opposition would like to think. What had happened last evening, and I make this abundantly clear, was total irresponsibility on the part of the Liberal Party of Canada and the New Democrats.

My view on energy policy has not changed. We disagree, but I am a Conservative and I remain a Conservative and my support will be for the national leader of our Progressive Conservative Party, yes.

Mr. S. Smith: The Premier has finally, at the end of that somewhat rambling speech, admitted he will once again put his Conservatism and his affiliation with the party ahead of what I consider to be his responsibility as Premier of the people of Ontario. He has, at the very least, done me the favour of answering the question, an unusual event in itself in this House. I will, therefore, answer his question and let him know that, given the fact his federal leader --

[10.30]

Mr. Deputy Speaker: Order. This is question period.

Mr S. Smith: Yes. Is the Premier aware that, given the fact the Premier’s federal leader has already made known his policies to Ontario which would result in billions of dollars being shifted from this economy into that of Alberta and into the coffers of the oil companies; given that we know we will have interest rates which in themselves and along with energy prices will lead to a two per cent increase in inflation; and given that tens of thousands of Ontario jobs will be lost as a consequence of his federal leader’s party policies, I can assure him I will be there to support the federal leader of the Liberal Party and to defeat Joe Clark.

I want the Premier to answer the question, how can he justify supporting those policies when he has stood and postured in front of the television cameras saying it will be harmful to Ontario’s economy? As soon as the bell rings, the old war horse is out there again because the political party is more important than the province of Ontario.

Hon. Mr. Davis: The answer to that is quite obvious. Firstly, there are very few things I would say I acknowledge. The Leader of the Opposition has far more talent than I, but when it comes to posturing he gets the medal. No one deserves it more. I think yesterday was the great example.

May I just trace a little history for the Leader of the Opposition, Mr. Speaker. He is concerned about the shift of resources. I would ask him to please go back to 1973-74 when the Liberal Party in Canada started us down this road; calculate the billions of dollars that have flowed from 1974 until 1979; take a look at the person who heads the leadership, whatever it is -- heritage fund, the former Minister of Energy who may even yet be leader of Canada. Remember his commitment to world price.

The truth of the matter is, the Liberal Party of Canada has endorsed our policy on energy since it became the official opposition. Its policy on energy was world price, like that of the party opposite. It did nothing about distribution and when those federal members talk about energy in the next two months their position will be less than credible because people will not forget they started us down this road. The provincial Liberals will have trouble supporting it.

Mr. T. P. Reid: Supplementary: Given all the problems my leader has already talked about, does the Premier recall those prophetic words of his in Ottawa about nation building being more important than province building? Really, if there is one thing for which Clark should be done away with, it is the balkanization of the country.

How can the Premier in reality support Mr. Clark and the federal Conservative Party which has done more to destroy Canada than anybody ever thought possible in six months?

Does he recall his words about building the nation rather than the provinces?

Hon. Mr. Davis: Mr. Speaker, not only do I recall them, but the members opposite won’t believe them; they happen to be my own words.

I am concerned, but I have to tell the member, if he looks into history once again, the people of this country defeated his former friend just because they were permitting that position to take place. Don’t let him tell me that the Liberal Party of Canada hadn’t created some of these problems. Don’t let him tell me the Liberal Party of Canada --

Mr. T. P. Reid: They didn’t sell out to Alberta and Newfoundland.

Hon. Mr. Davis: Look at some of their policies. Look at some of the policies that created the divisive feelings in this country. Just look at them. Why does the member think people voted against them last May? One of the reasons is because of their policy with respect to national unity. Without any question that was one reason the voters in this province rejected Pierre Elliott Trudeau. There is no question about it. Wait and see if he is the member’s federal leader.

Mr. Deputy Speaker: Order. New question; the Leader of the Opposition.

Mr. S. Smith: I will ask another question of the Premier. I was enjoying this private discussion, Mr. Speaker; that’s very, very unfortunate.

MANUFACTURING GROWTH

Mr. S. Smith: Can the Premier explain to this House how it is that in Ontario between the years 1971 and 1977 the value of shipments and value added per capita in manufacturing -- in terms of the growth in that very vital matter, which is per-capita growth in manufacturing value added -- Ontario ranked 10th among the provinces of this country? How did it happen that while he was there as Premier, Ontario allowed its growth in manufacturing to become the lowest in this country when manufacturing is the life blood of the province?

Hon. Mr. Davis: Mr. Speaker, the honourable Leader of the Opposition is playing games. First, it is not factually correct in that sense of the word. Second --

Mr. S. Smith: I have the figures.

Hon. Mr. Davis: Let me finish.

Mr. Deputy Speaker: Order.

Hon. Mr. Davis: The Leader of the Opposition is comparing as he so readily does, apples and oranges or, say, apples and eggs. The reality is that in the manufacturing sector in this province in the past three to four years we have had a far more significant growth in jobs created because of the policies of this government. We have been able to maintain a healthy economy in spite of the pressures internationally and even internally, in spite of the predictions of some, in spite of the activities and the criticisms of the honourable member and his colleagues.

Just look at the employment figures -- an increase of 145,000 jobs over a year ago. The Liberal members said it couldn’t be done; they are disappointed it has been done. They have been nonsupportive of those measures that have created an economic climate here which in spite of the difficulties has been better than in most other comparable jurisdictions.

This province has done well, extremely well, and is going to continue to do so because of men like the Treasurer (Mr. F. S. Miller), the Minister of Industry and Tourism (Mr. Grossman), the very enlightened group sitting on this side of the House and we are going to be here for many years yet to look after the interests of the people of this province.

Mr. S. Smith: Supplementary: I am sure the Premier would agree with me that without sufficient growth in our manufacturing sector Ontario is never going to be able to solve its economic problems in the 1980s. I am sure we share that view.

Since growth in the economic sector of manufacturing is vital to this province; since it is most reasonably measured in terms of value added per capita, I ask the Premier again, how does he account for the fact that the growth from 1971 to 1977 in Ontario was 79 per cent, which ranked 10th of all the provinces in Canada? How does it happen that we rank 10th in Canada in terms of manufacturing growth? It is not good enough to say we have no oil. Germany has no oil, yet they do very well in manufacturing. Why are we 10th in growth in manufacturing when our future depends on manufacturing?

Interjections.

Mr. Deputy Speaker: Order.

Hon. Mr. Davis: Of course the Leader of the Opposition wants to deal in percentages. He really has to look at the base upon which the percentages are calculated. I guess I am one of those people who doesn’t deal solely in percentages, I deal in human terms. In human terms the number of people now employed in the manufacturing sector is substantially higher than it was a year and two years ago.

Certainly we have difficulties in the competitive environment of the world economy. Certainly there is a greater pressure on our manufacturers and one reason is because of the unenlightened economic policies of the former government in Ottawa. In spite of them, we have done relatively well in this province.

We are going to do well in the 1980s. I know the Leader of the Opposition would like to say we aren’t. We are. We are going to have economic growth; there will be increases in manufacturing; there will be more job opportunities. Thank heavens we will be able to do it in spite of his criticisms and his negative approach, his unhappy nature with the world, his belief the government can never do anything right. Does he know the great mistake he makes with his own party? If on some occasion he said --

Mr. S. Smith: You don’t know why you are 10th. You can’t explain. Tenth is last and you are last.

Hon. Mr. Davis: That’s fine. But we are still, in terms of the manufacturing sector of Canada, by far the most significant.

Mr. S. Smith: And we are going down.

Hon. Mr. Davis: Oh, we are not heading down. We are going to do very well. He can use all the statistics he likes. I give him one word of advice. We are getting very close to Christmas. He would be far more credible in the eyes of his colleagues and his own caucus if he were on occasion to acknowledge that the government of this province does some things right sometimes. I know he feels that to be in opposition his job is nothing but to criticize. He is making a fundamental error. He is making a great mistake. It’s factual.

Look at the figures, for example, 145,000 jobs, in spite of what the member for London Centre (Mr. Peterson) predicted and in spite of what the Leader of the Opposition predicted. What we have done to stimulate economic growth is there in the figures. Ask those 145,000 people who were not employed a year ago.

FEDERAL BUDGET

Mr. Renwick: Mr. Speaker, I have a question for the Premier. We here in this party, of course, don’t have any problems in supporting either the leader of our party or the policies of our party.

Hon. Mr. Davis: Where is he today?

Mr. Renwick: He’s out winning votes for us.

Mr. Deputy Speaker: Order.

Mr. Renwick: As the federal election campaign will be fought on the Crosbie budget proposals and as this government has significant differences of opinion with respect to those budgetary proposals and, in particular, with respect to the price of fuel in Ontario and energy prices generally, will the Premier intercede immediately with the Prime Minister of Canada to ask him to suspend those proposals until such time as those proposals have been rejected or approved by the people of Canada in the federal election?

Hon. Mr. Davis: I acknowledge the statement of the member for Riverdale that he has no problem with his national leadership. I sensed he confined it to the national leadership. I understand that and I respect that. Perhaps he would like to expand it to his provincial leadership. I don’t know. Perhaps it wasn’t an accident that he mentioned only his federal leadership.

Mr. Renwick: It’s a federal election campaign.

Hon. Mr. Davis: I see and I acknowledge that the member for Riverdale has no problem. I think the public of Canada will have a problem with his national leadership, but that’s only my own assessment.

Interjections.

Mr. Deputy Speaker: Order. I am sure the Premier wants to answer the question.

Hon. Mr. Davis: I certainly do. What was the question? The member for Riverdale is really an old pro. I don’t say that unkindly. I say that respectfully.

Mr. Peterson: Did you say goat?

Hon. Mr. Davis: No. I said an old pro.

I don’t know what ultimately will be the issues. There is no question but that the budget will be one of the issues. I think the member also knows that ultimately the people of this country will be making their judgement, based upon that party and that leader they genuinely feel can best administer the affairs of this country. It’s a very difficult period. I don’t think the budget in itself is going to be the sole or single issue. There are some parts of the budget with which we disagree. We have made that quite clear. There are some parts with which we do agree. I think even the member for Riverdale must agree with a few of the things contained in the budget.

As I recall the budget, in terms of energy the budget makes it quite clear that the agreements with respect to next July and October have not been finalized. The budget made it quite clear that the agreement that is in place and which we accept is for $1 on January 1. We take no exception to that. That is part of the agreement, and we find this reasonable. The only area that really directly relates to it is the excise tax which is in place and which, in my view, the government of Canada is not going to alter.

Mr. Renwick: Supplementary: If I may revert to the early remarks of the Premier about an election, perhaps he would like to have a parallel election in Ontario at the same time. Then we could see whether or not we have the support of the people in the province, both for the leader of this party and its policies.

Mr. Deputy Speaker: That almost sounded like a new question.

[10:45]

Mr. Renwick: Mr. Speaker, by way of a supplementary question: At the risk of asking the Premier to reiterate what he has said, do I understand the Premier is going to take no steps of any kind to intercede with the federal government, to have them suspend, at least, the 18-cent increase in the excise tax on transportation fuel?

Hon. Mr. Davis: Mr. Speaker, we have already made our point of view known. I did it the night of the budget; the Treasurer did so again yesterday.

With respect to the member’s previous observation in that nonpart of the question, if his leader really wants to test the water, believe me, we are ready. I give the honourable member some advice to pass on to his leader. He would be ill-advised to do so.

I know why the member suggests it. He still has aspirations. He would like to replace his leader when they are defeated.

GAS AND OIL SUPPLIES

Mr. Renwick: Mr. Speaker, my second question was to the Minister of Energy, but I will put it to the Premier.

I have had an opportunity to look at Bill C-42, the emergency legislation with respect to the allocation of energy supplies, and while there is provision in the bill as to what will take place when there is no Parliament in existence in Canada, will the Premier arrange with the Minister of Energy (Mr. Welch), or himself make a statement in this assembly before the prorogation of this session next week on the contingency plans of this province and of this government on the allocation of energy supplies of all kinds, particularly petroleum products in the event that during the dissolution of Parliament any impending shortage should develop?

Hon. Mr. Davis: That is a very fair question, and I shall -- or the Minister of Energy will -- reply to it early next week.

Mr. Riddell: Supplementary: While we are dealing with that allocation of energy, would the Premier also see that agriculture and food production and processing is put back into category A as being essential, rather than drop back to category B with garbage collection and snow removal? That is where agriculture and food production and processing is. Would he see that it gets back up to category A?

Hon. Mr. Davis: With this government, the agricultural community has been in, is in, and will always remain in category A, for everything.

REDIRECTED QUESTIONS

Mr. R. F. Johnston: A point of order, Mr. Speaker: It concerns the redirection of questions by ministers in the absence of ministers who are deemed to be more prepared to respond. There seems to he a tendency for these redirected questions never to be answered and I would like some direction.

Last Friday, I asked a question of the Minister of Intergovernmental Affairs (Mr. Wells), on the Gabrielle Roy school problem and the need to support the French advisory council in the city. The minister replied, “I think that question should be directed to my colleague, the Minister of Education (Miss Stephenson), who has responsibility for those matters and I am sure would fully answer the member’s question.”

It has been a week and I have had no reply, Mr. Speaker. I feel it is unreasonable for me to continue to ask the question and take up my colleagues’ time when they have questions they would like to ask. What recourse do we have and what assurance do we have that redirected questions are actually redirected and will be answered?

Mr. Deputy Speaker: In reply to the member for Scarborough West, to my knowledge there is nothing in the standing orders pertaining particularly to questions asked during question period on how and when a minister should or should not answer the question. If they are redirected, or the advice is given that the minister will be given notice of the question, it is entirely up to the minister to reply at his or her convenience, or it is up to the member to ask the question again.

IMPORT GRADING

Mr. McGuigan: Mr. Speaker, I have a category A question for the Minister of Agriculture and Food. In view of the Supreme Court of Canada ruling yesterday that a retail store in Toronto cannot be charged under the Canada Agricultural Products Standards Act because grade standards are covered under provincial laws, would the minister look to see what this ruling does to other provisions of the CAPS Act?

I’m thinking particularly of the requirement that imported products be marked with the country of origin. Because of the interregnum we have in Ottawa does this ruling demand that the provincial government bring in an emergency amendment to the Farm Products Marketing Act or the fruit, vegetable and honey act so that imported products would be covered by enforceable provincial law to require that imported products be marked with their county of origin?

Hon. Mr. Henderson: We will take a look at the suggestion, Mr. Speaker.

Mr. Riddell: Supplementary: No doubt the minister will recall questions asked in this Legislature regarding the importation of chicken and its labelling as a product of the United States.

Hon. Mr. Henderson: I recall every word quite well.

Mr. Riddell: The answer we received was that came under federal legislation. Since the recent event that has taken place in connection with this hearing on apples, could it be possible that the labelling of chicken from the States now comes under provincial legislation? Would the minister look into that?

Hon. Mr. Henderson: Mr. Speaker, I think I responded to the member for Kent-Elgin that I would be looking at that.

Mr. MacDonald: If the minister is going to look into this issue again, why is he looking into it when he flatly asserted, in reply to the question with regard to imported chickens, that packers and processors often handle imported and Ontario poultry at the same time, making identification very difficult? He said identification at the packer/processor or retail level would mean incorporated cost in labour and packaging which will be passed on to the consumer.

In other words, the minister made excuses for the total dismissal of his own Foodland program which is going to identify imported products.

Hon. Mr. Henderson: We’re not making any reasons for not doing it. The member for Kent-Elgin suggested there was a court decision yesterday. I have said we will look at that court decision and we will decide if we, as a province, should proceed down the lines he suggested.

I have been told there was a court decision yesterday and that always makes us open up an issue and take a look at it.

ENERGY EXPORTS

Ms. Gigantes: Mr. Speaker, I have a question for the Premier. Now that we have Mr. Clark’s attention again, will the Premier tell him that he should advise the National Energy Board that no new exports of natural gas should be allowed until a new government is chosen by the Canadian people?

Hon. Mr. Davis: Mr. Speaker, I think that decision has already been made. I expect that the member’s national leader will see certain opportunities during the next X number of days to explain his own point of view, which probably would be slightly different. I expect he will do that, but the decision has been made.

Ms. Gigantes: Could I ask a supplementary? Because the Ontario Energy Board rate rulings have already taken into account the cost of extending the gas distribution systems, would the Premier tell Mr. Clark during the next two months in a prepared and substantial position paper the reasons why Ontario feels that natural gas prices should be unpegged from future oil prices and why incentive pricing of natural gas should benefit consumers rather than gas distribution companies?

Hon. Mr. Davis: Mr. Speaker, with respect to the latter point, we intend to do so. With respect to the former point, it is not just the government of Canada’s determination as to whether or not the price of natural gas is unpegged from the price of crude. The government of Canada must do this in conjunction with the producing provinces -- which are not exclusively confined incidentally to the province of Alberta -- but where there is some sort of philosophical point of view on the energy issues in that great province of Saskatchewan, where the member has philosophical followers who’ve taken an approach not dissimilar to Alberta’s on many of these issues, which Mr. Broadbent may have to explain when he’s visiting some parts of Canada.

Mr. J. Reed: Could the Premier indicate when he’s going to take a position like this, understanding the importance of the future distribution of natural gas to the people of Ontario? When is he going to do it?

Hon. Mr. Davis: What position?

Mr. J. Reed: The position on the unhinging of the price of natural gas.

Hon. Mr. Davis: I don’t know where the member for Halton-Burlington has been for the last six months. We have taken this position time and again. He should read the papers; read the documentation. We have argued for the unhinging or freeing of the price of natural gas from crude oil for months. We did it at the time when natural gas became in surplus.

Mr. J. Reed: Are you going to go to the Prime Minister now --

Hon. Mr. Davis: Oh come on. The member should grow up. He knows it, the government of Canada knows it, everyone knows the position we have taken with respect to the price of natural gas being freed from the price of crude. Everybody knows it. The Prime Minister knows it, so does the member.

CHICKEN QUOTAS

Mr. G. Taylor: Mr. Speaker, I have a question for the Minister of Agriculture and Food regarding his statement this morning on the allocation of chicken quotas.

Because there is an increase of 230 million pounds and the minister is sending a representative to the meeting, how much of that 230 million pounds over the base rate, which had a 50-50 split earlier, does be think is warranted for Ontario’s share.

Hon. Mr. Henderson: It is not the amount that should be allocated to us, it is the method that is to be used. It was taken by the board that it be split right down the centre. The original agreement, section 8, reads:

“It is further agreed that the agency shall establish annual provincial allocations and when considering future provincial marketing allocations shall use the following: (a) any significant change in the consumers’ demand; (b) the ability of the province to meet its allocation production; (c) the total market requirements within each market area; (d) the proportion of market demands in a province which is met by production in that province; (e) the comparative advantages of production and marketing of the chicken.”

All of those guidelines were completely ignored when they set out the production quotas for Ontario and Quebec. They granted an increase for Quebec by some 18 million pounds and an increase of three million for Ontario. We felt neither the consumption nor production was taken into consideration. They more or less simply equalized the allocation to the two provinces. None of the guidelines was used at all.

Mr. G. Taylor: Supplementary: If there is this increase of three million pounds mentioned, will that do away with some of the 72-hour supplementary permits being used at present to increase production of some local producers?

Hon. Mr. Henderson: We haven’t looked at that side of it. We have looked at the overall production and needs of our province. When they made the allocations they did not look at the production ability or at the consumption of the market areas.

Mr. Riddell: Supplementary: Why should supplementary permits be given priority when the producers in Ontario can produce all the chicken needed for domestic consumption? Why are we even looking at supplementary permits to bring this chicken in from the United States?

Hon. Mr. Henderson: I didn’t know that supplementary permits were a part of that question.

Mr. G. Taylor: Yes, they were.

Hon. Mr. Henderson: Very well. I am aware of one supplementary permit. There may have been one over the last week or two I am not aware of. I am aware of the one two weeks ago.

[11:OO]

As I understand it, the national agency went to all areas of Canada, not only to Ontario and Quebec. They went to all the agencies and all the provinces across Canada and they took into account all of the production that was available and found it would only meet half of the needs for that particular week. That is the reason a supplementary permit was granted.

RECRUITMENT OF FOREIGN WORKERS

Mr. G. I. Miller: Mr. Speaker, I have a question of the Minister of Labour -- or Santa Claus, I’m not sure which. He did a good job that night too.

Is the minister aware that the Steel Company of Canada Limited is short of skilled labour in trades and crafts and also millwrights and is seeking applications for offshore help?

Hon. Mr. Elgie: Yes, Mr. Speaker, I am aware there are shortages in a variety of industries throughout the province. We have clearly identified, through the appointment of a manpower commissioner and manpower commission, that we intend to address those needs. The manpower commission and the manpower commissioner have now clearly identified their priorities.

The first, in order to allow us to move forward, will be to provide a more adequate labour-market information base; the second strategy will be based upon the skills shortages that are identified.

In the meantime, only after careful scrutiny of all applications for a need to advertise for offshore workers are applications for advertising being accepted.

Mr. G. I. Miller: Does the minister not feel that these people could be recruited in Ontario or in Canada, rather than having to go offshore? Particularly when there are so many plants closing, such as Pilkington Glass and in the auto trades, should we not be making an extensive effort to recruit these people here?

Hon. Mr. Elgie: Mr. Speaker, the Minister of Industry and Tourism could comment in greater detail, but it has been made clear to me there has to be a thorough search made by the Canada Employment and Immigration Commission and that search has to be evaluated by the Ministry of Industry and Tourism and his staff before any approval for advertising offshore can be made.

There is a diligent effort being made to recruit workers within this country.

Mr. Di Santo: Mr. Speaker, in view of the fact that the shortage of skilled workers is determined also by the fact that we don’t have enough apprenticeship courses in Ontario, and in view of the fact that this government doesn’t seem to have a policy, is the manpower commission also recommending a plan to establish apprenticeship courses? If it is recommending apprenticeship courses, when can we have definite information?

Hon. Mr. Elgie: Mr. Speaker, I have already indicated that the first priority identified is the need for a labour-market information base that would allow us adequately to project the needs and plan accordingly. The second requirement is the identification of the skilled labour shortage and the need to expand Ontario’s industrial training base.

In the meantime, I wouldn’t want anyone to think that everyone is sitting around. The Minister of Education can indicate very clearly that the number of community industrial training councils increases weekly. I believe it’s now up to 44. Since the summer of 1978 I believe there have been four trades regulated in the industrial sector and more are being planned. There are many things under way.

RADIO SHACK

Mr. Mackenzie: A question to the Minister of Labour, Mr. Speaker. Regardless of the decision about Radio Shack, given the clear evidence of serious labour strife over first agreements in Ontario, together with the evidence that even a tough decision by the Ontario Labour Relations Board may still result in the destruction of a workers’ union without the authority to enforce a first agreement, will the minister reconsider his position against bringing in legislation for first agreements in the province?

Hon. Mr. Elgie: Mr. Speaker, we had considerable discussion about this last night during estimates and I made it clear to the member that I don’t propose to get into any discussions about the Radio Shack decision. In this country, as in all other common-law countries, those are matters that are and should be left for the courts to decide. He and I understand that.

The issue on compulsory first collective agreements also was reviewed. I told him quite clearly I didn’t think the jury was in on that issue. I reviewed the fact that in British Columbia since 1976 there have been 60 applications requesting compulsory first collective agreements. Of those 60, nine were accepted. When the second year came around, five unions were decertified and another was never able to reach an agreement. So two thirds of those were total flops.

I realize there is the argument of a deterrent value of the first contract capacity within a labour relations act, but that’s a very difficult thing to evaluate.

I understand Professor Weiler’s argument on it, but it’s not based on any factual review that I’m aware of to support his position.

Mr. Mackenzie: Supplementary: The clear import of my question is will the Minister reconsider his position? Is he telling the House that he will not reconsider his position and that he is not going to bring in first-contract legislation?

Hon. Mr. Elgie: I’ve made it clear on previous occasions that all of the recommendations contained in the Ontario Federation of Labour brief will be reviewed and considered.

Mr. S. Smith: Supplementary: Given the legacy of bitterness that results from these first-contract disputes; given the tremendous problems which have afflicted so many communities in Ontario, certainly in recent years with a number of these disputes, why should the minister refuse to introduce legislation which would give at least a guaranteed first contract? Why would he try and create such a mentality of warfare, not only at the certification level, but also at the first contract level, and then at the decertification proceedings that seem to occur afterwards in the cases he has just mentioned? That legacy of warfare and bitterness does no one any good. Why doesn’t the minister move to accept that we have unions today and to accept that first contracts should be guaranteed?

Hon. Mr. Elgie: I’d like the Leader of the Opposition to clearly understand that on many occasions I have said that I accept, and this government accepts, the position and existence of labour unions in this country. I have a great respect for them. I think they have accomplished many good things in this country and will continue to do so.

However, the member is saying that he has made the decision that first contract compulsory arbitration is the right thing to solve the problems out in society. I am saying I don’t accept that the jury is in on that.

Mr. S. Smith: What’s the minister’s solution?

Hon. Mr. Elgie: I’m saying that we have many initiatives going forth now to try to resolve what I view as inappropriate adversarial relationships going on in society. I will continue to do so. We will continue to review alternative suggestions to improve that situation. I’m simply saying that the member hasn’t convinced me that what he is proposing is a resolution to the problem.

LIMITATIONS ACT

Mr. Epp: I have a question of the Attorney General (Mr. McMurtry). He was here just a few minutes ago. I see his books on his desk, I wonder if he’s somewhere behind them?

In the absence of the Attorney General I’ll ask the Premier the question, Mr. Speaker. I trust the Premier is aware of the court of appeal decision earlier this week wherein the court decided that an individual was precluded from issuing a counter-claim against the government because the six-month limitation period relating to lawsuits against public authorities had elapsed.

The Premier will recall that the government waited until 11 months after the incident at issue to make its claim, thus eliminating the right to counter-claim. I trust that the Premier is aware that under private circumstances the statute of limitations is one year. I’d like to ask the Premier, in the absence of the Attorney General, in light of Mr. Justice Blair’s comments in the course of his judgement that the statute of limitations period is in great urgency of reform, whether he will recommend to the Attorney General and to this Legislature that the statute of limitations be extended from six months to two years?

Hon. Mr. Davis: I want to thank the member for Waterloo North for his great trust in the Premier. He trusts I know this, he trusts I know that; of course I do. I am glad he reminded me of it because I might not have remembered it if he hadn’t.

On the actual question: Will the Attorney General review, as a result of that judgement, the length of time and the statute of limitations? I will take it up with the Attorney General.

Mr. Epp: Mr. Speaker, I recognize the government has appealed the decision of the Supreme Court of Ontario, which found in favour of the individual, and so the government has an interest in having the present statute of limitation period apply. Nevertheless, given the obvious hardship that was caused to this individual, and given the Premier indicated only a few minutes ago his great concern, in human terms, for the people of Ontario, I wonder if he will recommend to the Attorney General and to this Legislature that if the statute of limitations is extended it be retroactive to apply to this individual?

Hon. Mr. Davis: I will discuss it with the Attorney General. It is a very complex issue, it is very difficult to make any legislation of this kind retroactive to a particular case. Some of the honourable member’s friends who practise the law could explain that; there would be some complications, but I will discuss it with the Attorney General.

CHEESE PLANT CLOSURES

Mr. MacDonald: I have a question of the Minister of Agriculture and Food on the Labatts Limited purchase of two of the Warkworth cheddar cheese factories and closing them down.

Is the minister not concerned about this as pulling the rug out, so to speak, from the local economies of two communities in eastern Ontario; and how does he reconcile that with the fact that at almost the same time as this is taking place, the provincial and federal governments are about to sign the eastern Ontario development pact, replacing ARDA, for the injection of $50 million to develop the economy of eastern Ontario?

Why is the minister sitting idly by; or am I wrong, is he going to do something about this? They are destroying the economy in certain places and pumping in public money to build it in others.

Hon. Mr. Henderson: Mr. Speaker, in answer to the honourable member, I am sure he is aware this company has purchased quite a number of small plants in the past and moved the quota to the central plant.

He is also aware the Ontario Milk Marketing Board is looking at this. It is looking at the possibility of not giving any further allocation, so it is not going to be beneficial to a large organization of this nature to establish one large plant. If the plan is completed -- as the honourable member well knows, he was at the meeting -- if the plan is completed and in operation by the spring, the board will not be making any additional allocation to the larger companies. This will deter the taking over by a larger company of the small cheese companies.

Mr. MacDonald: Supplementary, Mr. Speaker: It may deter in the future, but it isn’t deterring two that have been sold and closed down. I want to ask the minister: Is he aware of the rumour, and a fairly reliable one, that Ault Food is going to use these closed-down factories as warehouses for the importation of American produce which will be fed into its distribution system in Ontario?

How do you reconcile that little assist to the undercutting of your whole food land development program which was that we eat Ontario produce rather than foreign produce?

Hon. Mr. Henderson: Mr. Speaker, this is the first time I have been made aware of the last suggestion of the honourable member. We will be looking at it.

Mr. Riddell: How does the minister reconcile the reallocation of milk from the butter processors to the cheese processors when the cheese plants are being closed down?

Does he realize the serious effect it is going to have on such plants as Gay Lea Foods, Stacey Brothers and others if they can’t get enough milk to produce butter, skim milk powder, evaporated milk and what-have-you when we don’t have a surplus of those products now? How do we reconcile all this?

Hon. Mr. Henderson: Mr. Speaker, if the honourable member has followed developments of the past few months on the milk supply in Ontario and in Canada, he is well aware the dairy farmers did not meet the quota last year, they only met 95 per cent of the quota. Had they met the full quota there would not have been the problem to which he is referring. It is a matter that the farmer must go out and supply more milk than he did this past 12 months

[11:15]

Mr. Riddell: Is the minister blaming the producer for something that was ill conceived?

Hon. Mr. Henderson: No, I am not blaming anybody. I am suggesting, Mr. Speaker, that there was not sufficient milk produced to go around.

PUBLIC TRANSPORT

Mr. Bradley: My question, Mr. Speaker, is for the Treasurer.

In view of the possible fuel shortage which has been alluded to in this House and in the federal House, and in view of the provisions of the federal budget, specifically the excise tax increase to 25 cents -- whether that will remain or not depends on the constitutional experts one talks to -- however, in view of these two elements which have really come to the forefront probably in the last month, and certainly the second in the last week, what specific action is the Treasury taking in conjunction with the Minister of Transportation and Communications (Mr. Snow) to ensure the public transportation system in the province is improved so people will have a reasonable alternative to using the private vehicle on every occasion? I would like the Treasurer to respond not only in terms of what the province does directly but also what further considerations are being given to transit commissions across the province in terms of further funding?

Hon. F. S. Miller: First, Mr. Speaker, Ontario, almost by itself, has been pioneering some research in transit, as you know. The Urban Transportation Development Corporation, which is located in Kingston, I think has some exciting projects under way.

Mr. Nixon: But no sales.

Hon. F. S. Miller: Yes, it is very difficult to make sales, because as you know full well that is where we run into the nontariff barriers of countries like the United States. One only has to go back to the Philadelphia tenders and see the strings that are attached.

Mr. Nixon: You have been pumping money into this for six or eight years.

Hon. F. S. Miller: Right; and if it works we will be heroes, if it doesn’t work you will be able to criticize us; it has always been the way.

You know, Mr. Speaker, that interjection makes me look at the Latin on my left, sapere aude; freely translated it means, I would say, I am listening to saps. I took a lot of Latin.

Mr. Deputy Speaker: Order. Would the honourable minister answer the question and disregard the interjections?

Hon. F. S. Miller: Yes, Mr. Speaker. I would say you fit much more under the docendo discimus than the sapere aude section.

Mr. T. P. Reid: Non compos mentis is the one that applies to you.

Hon. F. S. Miller: You are probably a Latin student; you must have been something.

Mr. Speaker, in fact it is a serious problem. The first letter I wrote following the budget, the only letter I have written to the federal Minister of Finance, related to the fact he was adding a 15 cent tax to that particular use of fuel. It seemed to me foolish at the very least, no matter what his fiscal problems were, to add a tax to transit when transit had to be one of our major ways to go about saving energy in the future. First of all, I would do whatever I could to see that we encourage Canadians to use it.

I suppose if there is an advantage at all to the tax you referred to, the 25 cent tax, it is that it will surely make rapid transit or any form of public transit more dollar attractive than it was before. That doesn’t excuse or in any way justify the 25 cents, but it certainly means a number of people are going to look at the cost of driving private cars and perhaps rapid transit will get some encouragement.

Mr. Bradley: A supplementary: Since many of the local transit commissions are now ordering buses in anticipation of increased usage, and the time limit on receiving them seems to be about nine months to a year from a major supplier, yet there is an Ontario company which can supply at a much faster rate, is the government giving any consideration to some special assistance outside the regular grants that would go to these commissions, some special assistance in regard to purchasing buses in anticipation of what this government and what the federal government seems to anticipate as a definite crunch coming in terms of energy supply?

Hon. F. S. Miller: Our grant structure, and the Minister of Transportation and Communications will correct me if I am wrong, is roughly 75 per cent for capital purchases. That is a pretty generous grant. It’s also fairly heavy on the operating side for a number of the transit commissions. With the great flow of oil revenue going to other provinces or federal authorities, perhaps the federal government also has some responsibility in that field. Perhaps some of that massive cash flow it talks about reinvesting in energy conservation measures should be directed to this area.

SUPERMARKET PRICING AND CHECKOUT SYSTEMS

Mr. Swart: Mr. Speaker, my question is to the Minister of Consumer and Commercial Relations. It concerns elimination of the individual pricing by supermarkets on their products. He will recall that on October 19 he said within a brief period of time he would be making a report to this House. Then again on November 23, he said he would be reporting before the end of the sessions. As it is almost now the end of the session can he make a report today, and if not when?

Hon. Mr. Drea: Mr. Speaker, I said I would make it before the end of the session. Let the honourable member show up next week.

Mr. Swart: I might say that I will be here next week, but I would also add that when the minister is considering that matter for his report, would he pay attention to the study done in the United States by three university professors called A Research Report Conducted for the Ad Hoc Committee of the Grocery Industry for the Development of a Universal Product Code? It was a survey of shoppers which showed three times as many shoppers gave the wrong in-store price in the UPC stores than in the conventional stores; and only 21 per cent in the UPC stores made comparison of prices, as opposed to 32 per cent in the conventional stores.

Mr. Deputy Speaker: Order. I think that makes up the supplementary question.

Interjections.

Mr. Swart: Can I finish my question, Mr. Speaker? I asked will the minister give consideration to this, and in view of this kind of report which is available, will he assure this House he is going to bring in a bill to prohibit the elimination of individual price tags.

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

REPORT

STANDING ADMINISTRATION OF JUSTICE COMMITTEE

Mr. Philip from the standing administration of justice committee reported the following resolution:

That supply in the following amount to defray the expenses of the Provincial Secretary for Justice be granted to Her Majesty for the fiscal year ending March 31, 1980:

Justice policy programs, $46,400.

INTRODUCTION OF BILL

CHILDREN’S LAW REFORM AMENDMENT ACT

Hon. Mr. McMurtry moved first reading of Bill 205, An Act to amend the Children’s Law Reform Act, 1977.

Motion agreed to.

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS (CONCLUDED)

On vote 901, ministry administration program; item 1, main office:

Mr. Deputy Chairman: Any further discussion on item 1, vote 901? The honourable member for London Centre.

Mr. Peterson: I would enjoy going to the mat with the Treasurer, Mr. Chairman, if you could find the little squirt. Excuse me, if you could find the diminutive Treasurer, if you could find that steward of the province’s finances.

Interjections.

Mr. Peterson: I am just curious, Mr. Chairman, has he sent his surrogate in the name of one of these gentlemen to defend his estimates, Mr. Chairman?

Mr. Deputy Chairman: He may have, if we can be patient and carry on for a moment we --

Mr. Nixon: What do you mean, carry on? How can we carry on with the estimates without the Treasurer?

Mr. Peterson: Is it guilt, Mr. Chairman? What is it that can possibly keep that man out of this chamber at this time? I could tell funny stories, Mr. Chairman.

Mr. Deputy Chairman: You may proceed. I don’t think there’s anything that necessarily requires the minister to be here.

Mr. Peterson: Mr. Chairman, that’s an excellent point you make; perhaps we would accomplish more if he wasn’t here. However --

Mr. Deputy Chairman: You have the floor.

Mr. Peterson: I must say you are the authority on the House rules, and if that is your ruling as chairman, that the ministers don’t have to be here to defend their estimates --

Mr. Nixon: Here is the answer to all of our problems.

Mr. Peterson: Then of course I will accede. I am very happy to see him. Is that pink pills for pale people you are taking now? Perhaps he was out changing his socks for the estimates, Mr. Chairman.

I gather this is the last session we have with this gentleman, and there are a number of things I would like to I ask before we discuss the significant issue, the budget of Tuesday night and the Treasurer’s response thereto. I would just like to put a few suggestions to the Treasurer on matters I already have discussed at some length and on which I wasn’t particularly happy with the responses.

Maybe we could just have a little dialogue about the question of tax expenditures I was one who was very encouraged with the late John Crosbie’s introduction in the House of a tax expenditure study showing what has been spent. It has been revealed, according to his figures, that we have spent something like $32 billion in tax expenditures -- was it $32 billion or $30 billion? I thought it was $32 billion but I stand corrected if that’s the case. Would the minister be prepared to do a similar kind of study in Ontario so we can have enlightened dialogue on this very real question?

As you recall, I introduced in this House private member’s legislation to force a study of tax expenditures. I don’t believe that bill was ever debated. It is something I would like to bring back, though, because it does bring to light an area of policy in the financial field that hasn’t been fully and well discussed historically and I think it’s time to engage in some of those discussions. I would like to see a study of tax expenditures, to show what it is costing the province and what are the benefits flowing therefrom. Would the minister be prepared to do that?

Hon. F. S. Miller: It’s an interesting point, Mr. Chairman, and I would like, seriously, to think about it. I don’t have any basic reason for not doing so. I am told that a couple of years ago we had a staff paper called The Scope of Fiscal Policy in Canada, which looked into certain issues. I am not sure it contained the data you are asking for. Let me take that as a suggestion without saying I have accepted it; let’s say I am leaning more towards saying, “I see no reason why we shouldn’t.”

Mr. Peterson: We are making a little progress. The minister is very conciliatory this morning. I am glad he made it back from the scrimmage in the hall.

As you recall, we did introduce an amendment two or three years ago on the fast write-offs of production machinery, asking for a new study. It was a worthwhile point of view, as were the minister’s studies, with questionable conclusions, about the first-time homeowners grant and the cut in sales tax and that kind of thing. If he intends to embark upon that kind of a program again in the future, which he obviously contemplates at election time, at least we will have some information on which to make those kinds of decisions.

[11:30]

Hon. F. S Miller: That will do you for a couple of years, you mean.

Mr. Peterson: You may just need it next week. You better start thinking about that kind of thing.

The SBDC we discussed a little bit. I remember our discussions very well. You weren’t sure about how it was going to work and I wasn’t sure, I made some reasonably dismal predictions. It is probably not quite as bad as I predicated, but it is reasonably bad. You have had investments of what, $400,000?

Hon. F. S. Miller: Yes; and commitments of a lot more.

Mr. Peterson: I don’t know what they are and you don’t seem to know what they are. I understand the commitments were $432,000 something.

Hon. F. S. Miller: That’s the actual cash invested.

Mr. Peterson: That’s the actual cash in eligible investments?

Hon. F. S. Miller: Yes.

Mr. Peterson: Okay, so the transfers in the province were 30 per cent of that; really it is peanuts.

Hon. F. S. Miller: Let me correct you a second. If I recall the legislation -- and we are looking for the data sheet which could give us the exact figures, somewhere around here we have it -- the cash the province pays, the 30 per cent, is paid as the investor’s money is placed in the SBDC, not when the SBDC invests it in an eligible small business.

A number of corporations have been formed, several of which have requested the full $5 million authorized capital level. The list I read off the second day we were talking, totalling whatever the figure was, $450,000 or whatever it was so far invested -- and that sounds low to me but it could be right; four, five, seven are digits that come to my mind -- those were the actual investments by SBDCs from their capital into eligible small businesses.

Mr. Peterson: That’s what I said.

Hon. F. S. Miller: Okay, but that is not quite the same as the 30 per cent. The province pays the 30 per cent when you, a shareholder, puts your money into the SBDC, not when the SBDC put it into an eligible small business. You may recall when we debated the legislation we talked about what happened to that. There is a complex formula where three sevenths of your investment is released from the trust fund each time you put your money into an eligible small business, because three sevenths of the company’s capital is in the trust fund, which is the money the province gave them.

Mr. Peterson: How much has the government actually paid out?

Hon. F. S. Miller: The Ministry of Revenue administers it. I can’t give you that figure. If one of my staff can get it in the next few minutes I will be glad to put it on the record.

Mr. Peterson: Have you studied the SODEQ, the plan of Mr. Parizeau, which differs quite substantially from your own plan? Have you studied that one? I would like to hear your views on that, and whether you feel that may or may not be a more satisfactory kind of approach to this question. It reaches a little different marketplace; it is aimed particularly at higher income types.

He had a different kind of problem he was trying to solve, getting the tax differential down because of the discriminatory tax load Quebec residents carry. I understand all of that, but as an investment vehicle, as a vehicle to encourage research development, stimulate new enterprise in the province, apart from the investment in public companies one can make in Quebec, have you studied the effectiveness from the point of view of creating new enterprise?

One of the things we talked about at the beginning was that I wasn’t sure the SBDCs, and I am still not convinced, were going to be a stimulus to new enterprise and capital investment in new kinds of businesses, but were just going to be an alternative source of funding for businesses that could survive on their own. I was quoting Wayne Beech, who didn’t take the point of view that his company should be investing in new enterprise as much as in established enterprise.

Have you studied the Quebec example to find out which is more effective to accomplish the aims I articulated? I am paraphrasing you because your fundamental objective is the same objective I have.

Hon. F. S. Miller: During the pre-budget discussions last year, the SODEQs were in place in Quebec. There were two of them in existence at the time, that is my recollection. The independent small businessmen who came to see me referred to them, talked about them in glowing terms and suggested that Ontario take a good hard look at the SODEQs. Staff had been looking at them, but they followed the advice of that group and looked at them some more.

I wish I had the kind of money that would allow me to recite all the pros and cons of the SODEQs versus what we eventually ended up with, but some of the things that come to my mind are, for example, that they could invest in loans rather than only in equity.

Mr. Peterson: Which I urged you to do.

Hon. F. S. Miller: If the member recalls though, again going back to our debate, an SBDC is limited to having 70 per cent of its available capital in an eligible small business, and it must maintain that on average. The other 30 per cent is available to be put out on loan or invested in some form not required by the basic 70 per cent.

Mr. Peterson: But that is not necessarily debt in a small business?

Hon. F. S. Miller: Not necessarily, no. It could have been in a certificate of deposit in a bank.

Mr. Peterson: That is my whole problem. I want to get that debt into --

Hon. F. S. Miller: Let me say I’d be pleased to compare again the progress over the past year in Quebec with their SODEQs and in Ontario with our SBDCs. The member will find the SODEQs were about a year old.

Mr. Peterson: Six months.

Hon. F. S. Miller: Okay, in effect we’re really six months old with ours right now.

We had 18 the last time I was given a figure. We certainly have more being discussed, because I have been involved in discussions as to whether the spirit and intent of our legislation was being accomplished by the aims and objectives of some about-to-be incorporated SBDCs.

Let me say that the ingenuity of the investment community, which I have always admired, comes to the fore when I see the ways they are considering using SBDCs. All I have to do is assess whether it’s accomplishing the goals we talked about here; I think it is.

Up to the point where this piece of paper was prepared, and I don’t know how many days ago that was, this is a week or so out of date, there were 18 SBDCs. Those SBDCs had issued $2,151,200 worth of capital. Grants and tax credits paid or payable to them came to about $645,000. Now of that only $323,600 had been paid.

Mr. Peterson: I hope it works. I said that then and hope it now. As I suggested then, there are different ways to handle it, and I probably would have handled it differently. I like the concept. I assume your staff is doing ongoing reviews of the efficacy of this. I guess there’s no way to get to the minister before next year’s estimates, but if he is doing a staff paper, an internal review, this is not a great partisan issue and I would be most grateful if the minister would share that with me. It’s one of those things that everyone in the House wants to see work and wants to have work properly; we’re all trying to make constructive suggestions to that end.

Hon. F. S. Miller: Can I just say one more thing if we’re changing topics? Are you going on with SBDC any more?

The Northwestern Ontario Chamber of Commerce, the member may recall, came in to see the cabinet about two weeks ago. In their presentation they suggested that there were few, if any, SBDCs in the north. I’m not sure that’s true by the way, they may have thought there were none; however, the money certainly is going to the north, to at least three that I’ve followed.

They’ve suggested that one of our dreams, that there would be small SBDCs in local northern Ontario communities owned by a few local residents, wasn’t happening in the north because of the $250,000 as the lower limit for the capitalization. They suggested that it needed to be $100,000 in the north. I told them I was favourably disposed towards that wind of a change if it wasn’t either too difficult or impossible to pass in the House.

I’m not sure whether I require a regulatory -- I think I require a statutory change to do that. My deputy says it’s statutory. This means we would have to agree that it was worth trying. We had to agree it was for everything or just for the north or just for rural Ontario, or wherever you want it; but I would be appreciative of your views.

Mr. Peterson: Read Hansard. I was the one who argued your limits were too tight; there was too little on one hand and too much on the other hand. I argued at the time that $250,000 was too high for some of the stated purposes in specified areas. What you have just said vindicates exactly what I said and if you read Hansard from our discussion on that bill you will find that out, very much so.

I will permit our party to support that. Let me say this; don’t do it just for the north, that’s pretty tough to administer. Do it for the whole province. Why not? Why shouldn’t Walkerton or some of the other small towns or rural communities be allowed to do that? If a rural group wants to get together to put up a cheese factory or a processing plant or something like that, why shouldn’t they? Don’t strap them with that. I can tell you from my point of view I didn’t understand the $250,000 limit from the beginning. I don’t know where you got the number. I still don’t understand it. I would be prepared to let it be very much lower than that.

Their problems are the administrative, accounting, and legal costs of doing it for too small a number. Costs are going to be as much as they will be for a more expensive one, for a richer one almost, but surely that’s their prerogative. If you are going to encourage indigenous free enterprise across this country in building little enterprises, surely you should use that as flexibly as you can. I can assure you we will support any amendment along that line.

On the other hand, for the pros, the syndicated ones and investment companies who become involved, if you want to take it from the $5 million limit up to $10 million or take it off completely then I have no problems with that, as long as the purpose is to build enterprise and providing it’s not just turning into a tax dodge and just an alternative source of conventional funds. You have to satisfy your regulatory people and your bureaucrats have to satisfy you that advantage will not be taken. The object is not a tax dodge, the object is to create new enterprise.

Hon. F. S. Miller: You and I are completely in agreement there. When we have been looking at some of the SBDCs, that has been the basic kind of test we are using. For example, are we simply allowing somebody to get assistance for something they would have done anyway?

There is going to be some of that, I have never denied it. However, I am intrigued to see that where the syndicates are starting to talk about public SBDCs, they are now beginning to believe they can re-establish a market we lost some time ago in an area of particular interest to us and to the north. This is helping the small prospector and developer get himself back into an area where he can be financed, and it is tapping a group of people who haven’t necessarily been active in investments in the past. The small public SBDC allows people to buy whatever they decide, say $5,000 worth of shares in a company where they may know they are taking a very high risk in a prospecting development operation or a pool of them in the north.

You saw in the paper the other day where I think Kam-Kotia Mines Limited was a vehicle through which an SBDC was used; it is an eligible small business by definition. It had an investment which was put into a number of properties -- not into Kam-Kotia which appears to be not a holding company per se, but a company administering a number of small claims and operations.

We were interested in that and we had to go back and look quite hard at the purpose of the SBDC. First it was getting small investors to put up small amounts of money; that’s good. Secondly, it was getting prospecting and developing done and the possibility of some of the present smaller fellows getting investment; that was good.

I would say objectives I espoused as Minister of Natural Resources and to which I couldn’t find a way through the Ontario Securities Commission’s strict rules were being accomplished.

The other part is this: there is undoubtedly in the structure of the SBDCs the right to replace debt with equity. You know that. If a company has a mortgage it can replace that mortgage with somebody coming along and putting cash in as equity.

There will be those who argue that that does nothing for us. On the other hand I would argue that in a time of high interest it is the very kind of assistance the small businessman desperately needs. He needs it to get the load of debt off his back and to get it into some form of equity, or some form of less-than-common-share equity, that at least has advantages from a tax point of view that permits the lender to come in at a lower cost of money.

[11:45]

Mr. Peterson: That being said -- I don’t want to be unfair to my friends in the NDP; they want some time -- there are a few things I would like to discuss, if I may, this being our final day.

We’ve talked about the pension thing and I want to get back to it. I don’t want to get into all this stuff that the Haley commission is going to worry about and the contributions to the Canada Pension Plan and all that kind of thing. My views are very well known on this issue. The Treasurer and I have talked about this at great length before. But I do want to talk to the Treasurer about one aspect of that and find out his current views. A year ago his views were very much in flux, as I recall. He wasn’t exactly sure what the problem was, let alone a solution. This was just after he had been appointed Treasurer.

I am sure the Treasurer has spent this last year familiarizing himself with some of the very difficult financing problems we shall be faced with in this province in the 1980s, in connection with the CPP replacements and the teachers’ superannuation and all that kind of thing, and the massive amounts of capital we’re going to have to obtain from the system somehow, either by tax increases, expenditure cuts, or by going to the public market to pay back those borrowings, essentially of the last decade. I don’t know if the Haley commission is going to deal with this matter or not. To be perfectly honest, I suspect that will be only a peripheral part of the report, not the main thrust.

I would like to hear the Treasurer’s current views on those questions -- what is going to happen in 1983 or so, when we start running into the negative cash flow of the CPP; what’s going to happen in 1985 when we start looking at repaying --

Mr. McClellan: We will go to pay as you go.

Mr. Peterson: We’re going to have to go to more pay as you go, whether we like it or not. The Economic Council of Canada has vindicated almost every single thing I have been saying about this very thorny issue for the past two years. From a personal point of view I was very happy to see that report brought out.

Mr. Nixon: I thought it was everything. What do you mean almost?

Mr. Peterson: Yes, they came to a number of conclusions, a number of very important conclusions on this issue and they’re all difficult. They’re all politically impelled, they all cost money; they all say we’re going to pay more now to put a little away for later.

But that aside, what about these thorny financial problems we’re going to face? How does the Treasurer see the situation now? Where is he going to get the dough? What are his plans?

Hon. F. S. Miller: I made some comments a few months ago on this. I’m not quite sure where it was. It wasn’t in this House. I think it was a speech somewhere or answering some questions from the press.

I’m not saying the commissioner called and said, “Please don’t compromise my report,” but I got a message that it was a difficult stage in the study and perhaps the Treasurer offering solutions wasn’t the best thing to be doing whilst a major paper was being finished.

Mr. Peterson: I don’t accept that.

Hon. F. S. Miller: What we did do in the meantime, and I’m sure the member looked at it, was put out the paper 16, a discussion paper on the funding mechanisms -- pay as you go, or funded -- their effect on the economy --

Mr. Peterson: That’s not the issue I’m asking you about.

Hon. F. S. Miller: I recognize that; to a small degree, though. The member is saying the Canada pension fund is a pay-as-you-go plan.

Mr. Peterson: Did I say that?

Hon. F. S. Miller: The member is implying that it will become one because it isn’t funded now. I would read it that way.

Mr. Peterson: It is partially funded.

Hon. F. S. Miller: Partially funded, sure. But in effect it becomes a pay-as-you-go fund if, once we pass the breakeven point, cash has to be made up from the current revenues of government to maintain the benefits people are getting.

Mr. Peterson: Just so I am clear, there’s no sense in wasting a lot of words. That’s not the question I’m asking the Treasurer about today. I’m asking him -- I’m not even asking him to project because he’s going to cop out and say we’ll wait for the Haley report to come out. The Treasurer destroyed his own argument when he said he’s not prepared to comment, yet he had three bloody position papers he published two months ago. He can’t have it both ways. He can’t say he has no position, that he is going to wait for the Haley report to come down, and at the same time say he is a generous fellow because he has published three position papers.

The Treasurer has some views; they are developing. I’m concerned about the one issue and that’s what I’m asking about. I’m not asking about pay as you go versus fully funded versus partially funded because I don’t expect he is going to answer that question. He is going to wait and fool around with that.

What I’m asking you is about the financing requirements of this province. How are you going to pay back -- not five years from now when we’re going to have to move to a pay-as-you-go plan, but what you’ve borrowed already? When are you going to pay back the $10 billion or so you borrowed in the last decade, plus the billion or so in interest you will owe at that particular time?

Where are you going to get that roughly a couple of billion dollars a year for CPP, plus all the other stuff; the unfunded liabilities of teachers’ superannuation and all the other funds? Where are you going to get what amounts to in the real sense fresh money, money you don’t have now, money that is not shown or provided for anywhere in your budget? Where are you going to get that money? What are your plans? Are you going to the capital markets? That’s the question.

Hon. F. S. Miller: You’ve made a great issue of trying to differentiate debt owed by the province to accounts for which the province has responsibility or, the federal government has responsibility, such as the teachers’ superannuation fund, the public service superannuation fund or the Canada Pension Plan, because today the revenues from those funds exceed the demands upon them in some cases.

I would like to draw to your attention that if I went out to the market today like Hydro does and borrowed money from a set of borrowers, there would be a term on much of it, an interest rate, and there is every year a rollover of maturing issues. Is that correct?

Mr. Peterson: I guess so.

Hon. F.S. Miller: In some years one increases the public debt and in some years one decreases it. Since we last talked we’ve retired somewhere around $380 million worth of debt that was not owed by government to government, or to agencies of government, or to pension plans of government-related employees. For example, the $325 million treasury issues were retired and we retired some long-term debt as well.

When Hydro does that, of course, these days it’s with a net borrowing requirement. They have to roll it over and pay a higher rate. If we have to roll it over, we have to pay a higher rate, so your servicing costs will go up.

I was looking at the federal government’s budget -- I’m not passing the buck -- but it’s the most up to date one and their servicing costs were going up 19.5 per cent this year. It was the fastest growth in their budget. Ours are going up somewhere around 14 per cent or so.

Mr. Peterson: It’s still the fastest-growing part of your budget.

Hon. F. S. Miller: I might also point out interest in our budget is one-half of what it is, roughly, in the federal budget.

Mr. Peterson: It was 9.2 today and growing at the fastest rate of any item in your budget.

Hon. F. S. Miller: What have we done? We have done exactly what I preached yesterday. We have decided consciously to keep lowering the cash requirements of this province until it is not adding to its debt. That puts us into a position where, I would suggest to you, we have the fiscal capability, first, to release those moneys to go into the regular market. Second, we have the fiscal capability to meet our obligations on them.

Mr. Peterson: I don’t understand that. Even if you make your objective of a balanced budget by 1984, where you have no net cash requirements -- and I hope you do -- that won’t solve the problem I’m talking about. That means you don’t have to borrow any more at that point, but you’ve still got to pay back the $10 billion, $15 billion or $20 billion you have borrowed.

My question to you is you have always prided yourself that you’ve never gone to the public market, with the exception of 1975, which was an aberration, we all admit. You said you were never going to go to the marketplace. Where are you going to get it? Where are you going to get this money? Is it your plan to go to the public market in those years to borrow that money? What are you going to do?

Hon. F. S. Miller: I’m not as gloomy as the member is.

Mr. Peterson: I’m not gloomy, I just want the facts.

Hon. F. S. Miller: One of the things I was talking about was having a higher rate of payment into those funds so the cash flows into them increase again. You know that. That’s the very issue the royal commission is talking about.

Mr. Peterson: Is that your position, that the contribution rates should go up?

Hon. F. S. Miller: That’s the part I’m staying away from while she is making her report. You can say I’m ducking the issue all you wish. The fact is that I feel it is wise at this point to do that.

Mr. Peterson: How can your response be to me that the rates are going to go up, because you don’t know what your position is?

Hon. F. S. Miller: I didn’t say I didn’t know my position. I had a great belief that we were going to sell that issue at both the provincial and the federal level. Ontario, in terms of the Canada pension fund is not the final arbiter, but it has to have some influence on the final decision.

I am just looking over some information on debt. May I read the note directly into the record? There is no use trying to interpret it:

“Nearly two thirds of Ontario’s funded debt, or close to $10 billion, matures in the 1980s. Seventy per cent of these maturities will be Canada Pension Plan debt, with a further 17 per cent accounted for by bonds, issued to the teachers’ superannuation fund.

“This maturity bulge does not represent a major problem” -- that is where we disagree -- “because existing contractual relationships with the Canada Pension Plan and the teachers give the province the capacity to negotiate rollover loans if it so desires and the amount of maturing debt on an annual basis represents only one to one and a half per cent of the projected budgetary revenues of the 1990s.”

Mr. Peterson: I understand what the deputy minister is saying, but I am saying to you that, first of all, that CPP money is virtually call money, it is 90-day money. Am I right?

Hon. F. S. Miller: Twenty years with a six-month call, somebody says.

Mr. Peterson: Is it a six-month call? I thought it was a 90-day call, but anyway, it is almost demand money -- it is not demand money but it is short term and they can call that if they run into worse troubles than they anticipate.

All I am saying is you are not going to be able to borrow any more from them in 1985, barring an increase in contribution rates. Even if the contribution rates are increased, as I am sure they will be, and provide a new tax on already burdened taxpayers and burdened employees -- another payroll tax -- pretty soon we are going to reach the limits of our capacity to tax everybody in this country.

Do you know what unemployment tax is proposed by your friends, the increase in unemployment premiums and the gas tax and the surtax and then another increase up to seven or eight per cent for GDP? We are going to tax the whole corporate sector and the private enterprise sector right out of business in this country, because I can tell you there are a lot of people right now who are worried about Ontario’s capacity to stay in a competitive tax position, not only provincially, but with the additional federal burdens being placed on this economy.

That is a real problem and you know it is a real problem. Other jurisdictions in this country are starting to look far more attractive. Other jurisdictions in the United States, relatively speaking, are looking more attractive from many points of view.

I don’t know if we are going to get anywhere with this question. Frankly, I am no further ahead than I was a year ago on this. I just don’t see where you are going to get the dough, because I don’t see that you’ve got the plans in mind. It seems to me your only choice, because you have burned up or will have spent and used to capacity all your internally generated funds, is you are going to have to go to the public market place.

This is what I am asking: Do you see yourself going to the public market and for how much, and in what year?

Hon. F. S. Miller: It is always difficult looking down the road, because obviously the budget of Tuesday, should it be implemented, as I mentioned yesterday, is moving into some of my tax room, which is something that concerns me greatly.

If Ontario has 21 cents a gallon on gasoline, the federal government now has 25 cents plus 6.1 cents. They have a tax of about 31 cents on a gallon. I think the sum total of their tax is about 31 cents now, I am told. We have 21.

We argued, when they first moved into that field, that they were basically invading a domain that we traditionally would look at to see if there was room for us to occupy and from which to take our needs. They have done so and they have left us very little room to manoeuvre.

[12: 00]

Our tax, unlike their new sales tax, will not be free to change with the value of fuel unless we reconsider it all. Obviously, I am going to have to do some hard thinking in the next while.

I would point out, when one looks at the percentage of gross provincial product that has to be raised within a province from the province’s own resources across this country, Ontario looks very good. So that when one asks what tax rates are being applied and how do we compare with other jurisdictions, I would say, with the exception of Alberta, we still look excellent. The statistics are all around us to refer to if we have to. I read something into the record a few days ago and I would suggest we are still in a well-run state.

I think we have treated some of the issues, like the teachers’ superannuation fund -- and you may not agree with me -- more honestly than some of the other jurisdictions have. At least we have set up the contingent liability. I think we have a requirement to look at it to find, not the contingent, but the unfunded portion of it at any time and if we have to pay for it over a period of years, we do so. I think we have been paying about $50 million a year on that one issue just to make up the difference.

Mr. Peterson: It was $144 million last year.

Hon. F. S. Miller: We had a couple of years to catch up, though, didn’t we? Every three years we adjust it as the actuaries look at it. Those things have been taken in steps to make sure the pensions don’t get out of hand.

Last year I assumed that only government was the culprit in this kind of thing. If you look through last year’s text when we discussed this -- I had just finished reading a book, I think you suggested that I read it, on the Canada Pension Plan’s problems -- I felt quite strongly that government, with its indexation at the federal level in particular, was leading us down a road that was going to take us to some kind of disaster and that industry probably was minding its business and giving its benefits in a much better way. Probably on balance it is.

I have listened to a couple of the awards given recently by some major corporations. I have looked at some of the stated unfunded liability of some of the private plans. I would point out it isn’t limited to the government. It is something, sadly enough, very few people are really interested in, even amongst the negotiators I suspect; in other words, the people who give the benefits away or the people who demand them.

I have often argued that perhaps we should be allowing a good many people more choice in whether they have a future benefit or a present benefit.

Mr. Peterson: I am glad to see the Treasurer is just starting to understand this issue. This is the most significant financial issue that the Treasurer of this province faces and he doesn’t know it. I have been trying to impress that upon him.

I have made 20, 30, 50 speeches in the last year on this issue, anywhere anybody will listen to me. The Treasurer is right about the private sector. God, it is in more disarray than the public sector and the public sector is in total disarray. You have to start.

One of the things I asked the Minister of Consumer and Commercial Relations (Mr. Drea) about -- and I was so happy to see the introduction of this resolution by the member for Hamilton East (Mr. Mackenzie). He started the debate in this House on the pension question. I didn’t happen to agree with everything he was saying, but at least we are starting to talk about it.

The member for Armourdale (Mr. McCaffrey) is developing some expertise on this particular issue and is concerned about it as am I; this is a most complicated issue and anybody who pretends to know it all is kind of silly. Surely we can impress the gravity of it on the minister and ask him to do something. He has to do something in the private sector too, even though it may not be his ministerial responsibility.

I have argued with my friend, the Minister of Consumer and Commercial Relations, that he has to start with some disclosure legislation. The level of knowledge about this whole question, both privately and publicly, is abysmal. Unfortunately people don’t care about it. It is not the kind of issue that affects someone or they even think about until they are 50 or start to think about retirement. It is not the kind of issue that has any immediacy for young people. But they have to start to understand what they are paying, what their rights are, the security of the fund, how it is being managed.

There has to be new legislation in this House for the private sector. I urge the Treasurer to work with the Minister of Consumer and Commercial Relations because if you run into the situation and it’s not impossible where a major corporation in this province goes into default and you are sitting with 10,000 or 20,000 retirees on the payroll, you have a very significant political problem whether it is your responsibility to step in and assist with this or it isn’t. We saw a microcosm of this in the Prestolite case. That is just one example.

The reports of the unfunded liabilities in the private sector are absolutely staggering and far exceed the assets of some of these companies. The Treasurer was right; they haven’t taken a total compensation bargaining view. It’s easier for management and, respectfully, people in government, to give a pension benefit because it doesn’t come out of their immediate payroll, it doesn’t come out of their immediate expenditures this year. It is something future management, future governments, future taxpayers, future shareholders will have to deal with. We have to take a much tougher view in the whole collective bargaining process, look at the total compensation aspect and say, “You can make a decision, you take it now or you take it later, but you can’t take both because we can’t afford it.”

We necessarily have to take a more responsible view of our own responsibilities to pay our own way and set aside for ourselves in the future, because we cannot expect future taxpayers to do that for us, it is immoral. Not only that, with the changes in demographics, when there are fewer people in the marketplace, more retirees, fewer people contributing to the gross national product, you have a crisis on your hands -- I didn’t want to make this speech but the Treasurer forced me to.

You have a crisis on your hands. Trust me. You don’t understand. All I can do is when I am a grandfather, I can look at this speech in Hansard and I will read it to my grandchildren and I will say, “Well, I told him so.” Because I am frustrated, I don’t know what to do and I don’t even get the perception you understand that much about it, you are impressed with the gravity of it, or that you know what to do about it.

Take it as a matter of priority. Disagree with me. Tell me I am crazy. Tell me it’s a problem. I know if you study it you will realize it’s a problem in all sectors and you will do something about it.

You talk about the federally-indexed pension plan for civil servants which I happen to disagree with because it is so totally underfunded. But you have a situation like that with the teachers’ superannuation fund today. Your unfunded liability is $1.4 billion, your effective contribution rate is about 15 per cent a payroll a year. All you are getting out of it is borrowing that money back at low market rates to fuel your silly deficits. Now you are the author, this government is the author of the weakness of that plan, those funds should never have been touched.

I just commend again to the Treasurer the reading of young Chris Lett who used to work for you. I wish you still had him because he is one of the most sensible people in the pension business in this country as far as I am concerned. He is now in private practice but he foresaw some of these problems. The former Treasurer gave us glimmerings that at least he understood it and he made little noises here and there about increasing contribution rates.

But had you not had your grimy hooks on those pension funds you accumulated -- they are under your jurisdiction -- I can say you would have seen a lot more fiscal responsibility out of this government in the past 10 years. You would have seen much better funded pension plans. You would have seen more investment in plant and capital, into private enterprise in this province, you would have seen less unemployment with more real income and a lot better situation than we are at today.

That was like catnip that fuelled those deficits. I have argued the availability-fed demand thesis that you have spent everything you could get your hooks on. I didn’t want to repeat myself but I am obliged to. I still don’t see the way out of this thing.

I just go back and quote my old friend Grant Reuber, now the Treasurer’s friend the deputy minister of finance in Ottawa, who says and has said publicly this is a crisis that is more significant and more important to the financial future of this country than the energy crisis. Those are the proportions. I wish the Treasurer would please start on all fronts and start with Consumer and Commercial Relations, start with disclosures, start with portability, start with those kinds of questions. Get the level of public debate up.

I have my own ideas as to a solution of the dilemma you are in on the teachers’ superannuation and all that. You should turn it back to the teachers, you should buy your way out of it. Turn it back to them and let them run it. You negotiate every year and say what your contribution is going to be, but it’s going to cost $1.4 billion to get out of it because of the problems we inherited in the past because that is virtually an indexed fund. It is going to cost $1.4 billion to get out of that fund, because that’s the unfunded liability, rather than accumulate these deficits in the future.

This is something that makes me angry and if I could make one tiny contribution as a politician -- and I have reconciled myself that it’s probably impossible to move you guys in any way, sitting in the position I am -- but if I could make one contribution in my dismal little life spent in politics, this has to be the one I would like to impress upon you, to move you just a little bit to at least look at the issue. I don’t know how to do it and I would like your ideas on it because it frustrates me to no end and I am so unhappy to see the lack of knowledge at a political level.

I am sure your staff guys are aware of it. They must be. They are pretty intelligent people. But it’s so easy not to do anything about it because all of the solutions are politically unpalatable, and we know that, but we all know that the crisis, when it comes in 10 or 15 years, is going to I be almost impossible to get out of or at least the price we pay as a society is going to be so much higher than the one we start to pay now if we do it gradually and over a period of time.

I understand the political inertia on this question because it’s not going to get you any votes. It’s not going to get anybody any votes and any solution is politically unpalatable. It’s going to be unattractive. It is going to cost more. But if you leave it for 15 years, whoever has to solve the problem at that time won’t be able to solve it without some very serious disruptions and without a galling economic yoke around the necks of our children.

We have no right to do that. I know your staff guys know that. I would be very surprised if any of them disagree with me because they are economists, they are trained in it. But it’s action on a political level because all the political debate on this question is, “We must increase pensions and we must look after people who are in trouble” and all that kind of thing and that’s part of this problem. It’s part of the dilemma we are in today as a nation. But I can tell you, and that’s a different speech for a different time, if we don’t solve the fiscal arrangement, the financial aspects of it, I can tell you there won’t be anything for anybody when it comes down the road.

So there’s my annual speech, Mr, Treasurer. I am sorry to bore you with it but I really hope next year, after the Haley commission report comes out, we can really have serious discussions on this issue that involve all members of the House discussing all aspects, because there are many aspects, not only financial but moral and social aspects too. I hope you will act on that. I hope you will bring in legislation and I hope you will make that a top priority for your government to deal with that issue. Anyway, I am totally unsatisfied with the answers I have received to questions I have asked, but I don’t think I can extract any more of your hide.

Now, back to your statement. I want to complement the Treasurer. That’s a pretty good statement that you made in response to the budget. I don’t have any fundamental disagreements. You used a little rhetoric that I probably wouldn’t have used. You’ve got the old Crosbiean disease of blaming the previous 16 years of administration but that’s fair enough because in fairness, I blame you. If they have got 16 years worth of sins, you have twice as many years worth of sins and we will get you for that in due course.

What this points up to me -- and I only disagree with certain details. Your thrust is right. If you have to characterize it, it is a massive revenue grab. The federal Minister of Finance is asking the Ontario taxpayer, the Ontario consumer, to pay off the federal deficit with not nearly an equitable or concomitant investment in energy conservation, in renewables or any of the kinds of things we have to do to take us over the next decade. It’s an obvious fact that in his plans to balance the budget, a noble objective, and I understand probably as well as the minister does the problems he had to deal with -- he has dealt a terrible kick in the teeth to the consumers of Ontario and, apart from issuing statements, I think you have to think of something very serious to do about this. I don’t want to just sort of get down to this business about campaigning, defeating the 58 members, I don’t want to put the discussion on that level.

[12:15]

I don’t know what you can do but you must take extremely strong action. You must mobilize almost every force you have to make sure we don’t get that extra kick, because as you rightly point out in the statement, the great load of those ill effects of that budget is going to be carried by the consumers in Ontario. The other jurisdictions are insulated, and are protected against some of the vicissitudes in this budget. We aren’t.

As we were discussing the other day, there is a great deal of resentment against Ontario; you know that and I know that. They feel that Ontario has had a free ride for too long and hasn’t made the adjustments. You know the Lougheed arguments every time they sit down at the desk: “Ontario have been the fat cats all these years. They have wasted it. They are the highest per capita energy consumers in the country and they are not investing in plant and capital. It is running down, it is creaky and it is rusty. If we gave you a better price, you would just waste it, anyway, so why should we?” You know those arguments.

There is some legitimacy in his arguments. lie is quite right in saying that your government has not moved fast enough, has not moved with enough vision and enough judgement, enough guts, to make the kinds of adjustments in the economy to the inevitable, adjusting to something you know is going to happen. The rest was just details, matters of degree, how much, when, but it is going to come.

I don’t care who is elected in the next federal election, and I don’t care what kind of deal is hammered out -- and maybe it is only going to be $2 next year as opposed to $4 -- but we all know the direction we are going to be going five years from now and we know where we are going to be, so let us work on those premises. Let us put the majority of our energy there.

I think this budget is a very rude shock to the taxpayers and the consumers of Ontario. In the old days, we used to look to taxpayers paying on the ability to pay to cover federal deficits. This excise tax of 18 cents is now a tax to cover a deficit and that is really an extraordinary kind of thing to do, particularly when they are going to increase the price of that same oil $4 a barrel in the same year, compounding the question with a tax upon a price increase, and asking us, as the largest consumers, to pay off the deficit. It worries me very much. They add on the surtax -- and again we have 40 to 45 per cent of the industry and business in this country -- and they add on the other little grabs. As you rightly point out, again we are getting ripped off on the unemployment insurance provincially.

This is a very serious kick in the teeth for the consumers of Ontario and I would urge the Treasurer to do every single thing he can, including urging a moratorium on this thing until the federal election is over, in terms of this government yelling and screaming and using all of their political might, what little they have and all of the political efficacy he has, spare as it is, to try to impress upon the federal Treasurer what a very serious problem we are facing over this budget.

I am most despondent about it. It is too rude a shock. I am in favour of facing the realities, but it is far too rude a shock and we aren’t getting the investment back, we aren’t getting the recycled dollars back here the way we deserve, concomitant with our contributions to the overall national scene.

I would urge again, in the absence of some kind of new accommodation on these matters, that you now rightfully can claim your equalization and you should do it. What else have you got? If you don’t, you are just blowing the whole thing.

Maybe you want to respond to that, I have no idea, but I am pretty unhappy with it.

Hon. F. S. Miller: I will talk briefly about the comments on pensions. I have been very interested in pensions in the last year and I had a great deal to learn. I have never really been shy about admitting that.

I have taken the time to talk to a number of people within the business. I’ve listened with great interest to the member because I happen to feel he’s talking very sincerely on this issue. I’m not satisfied that --

Mr. Peterson: I speak sincerely on every issue, Frank.

Hon. F. S. Miller: More sincerely on this issue, then --

Mr. Peterson: It’s a matter of degree, but I’m always sincere.

Hon. F. S. Miller: With more conviction perhaps. Yes, I’m under the third degree during this estimate debate.

The fact remains I’m not sure things are quite as bad as the member says or quite as good as governments like to say they are. Our budget paper 16 outlines the kinds of problems we’re facing today in deciding whether today’s taxpayer should pay, under a funded system, a fair share of the cost of what he receives, or what employees should pay in a company today and have those moneys put into relatively safe places.

The member assumes that if the government didn’t borrow some of those moneys in the Canada Pension Plan they wouldn’t be in government’s debt portfolio. The member assumes then that it would be borrowed by somebody else. Now who would borrow the money the Canada Pension Plan is using?

We would say it would be free to be used for the economy, fine. Yet a moment ago the member said the very fear he had was that some of the industrial plans are sadly underfinanced and when the companies go belly-up, the don’t have any resource for management to pay their obligations to their retired employees.

Mr. Peterson: Just a minute, what kind of non sequitur is that? That’s a ridiculous thing you just said.

Hon. F. S. Miller: I would argue --

Mr. Peterson: Well, don’t say silly things.

Mr. Deputy Chairman: Order.

Hon. F. S. Miller: Let me finish my argument. The member is trying to say that somehow on the one hand people in private pension plans may be at risk because the pension plan may not be properly protected and they may not get their benefit if something happens to the financial stability of the company, right? On the other hand the member is saying the government won’t be able to meet its obligations.

I would argue that governments have had a very high record of meeting their obligations, even though it meant taking certain unpleasant decisions like taxation further down the line. That then brings it back to the issue of how do we distribute that load? Is it all put on future taxpayers? And you and I, because we’re a little older --

Mr. Peterson: Don’t include me.

Hon. F. S. Miller: Well, Bob and I. I won’t include you.

Mr. Nixon: Didn’t Alberta repudiate their bonds at one time?

Mr. Peterson: Didn’t Germany?

Hon. F. S. Miller: That they did. Germany did, yes. But I would say that apart from major wars -- I don’t know what happened to Alberta’s bonds. Did they ever get paid off?

Mr. Peterson: You know what? Don’t reply, Frank, you’re so superficial you are embarrassing yourself.

Hon. F. S. Miller: I’m not embarrassing me, but I may be embarrassing you.

The fact remains I am satisfied that you will see a gradual change at the government level -- the federal level -- controlling pensions that will see the needs are met, the commitments are met and the ability to pay remains.

When we get to the oil revenues, the very argument Ontario has used about the 18 cents or 25 cents sales tax has been that it should not have been a field taken by the federal government. We’ve agreed on that. Where can the federal government get its share of the money if it needs the money to offset its fiscal problems? And it does need it.

One of the weaknesses I saw in the proposed structure to divide the moneys flowing from increased prices for oil was that no one tampered with the share going to the producing provinces. They said that no matter how the price was raised to meet whatever purposes the federal government had, it would be for the fiscal or energy policy purposes. Then the 45 per cent flowed to Alberta or Saskatchewan.

My argument is that that isn’t fair. If decisions are being taken to raise the price for policy matters, I think that the producing province doesn’t necessarily have the right to say that a certain percentage remains constant. Why should the federal government have to raise the price past $2 per barrel per year before it gets more than 10 per cent?

Mr. Peterson: That was our statement two weeks ago.

Hon. F. S. Miller: Why then should it confiscate 50 per cent of it from there on leaving five per cent for the oil companies and 45 per cent still for the province?

I would have argued that this should be reduced at the provincial or the owners’ level simply because we’re making arbitrary increases in the price at the federal level. I would argue too that governments that find huge sums of money flowing into their coffers really have lost the ability to say no to almost anything their electorate may wish.

Mr. Peterson: Witness you and the CTC and the teachers’ superannuation.

Hon. F. S. Miller: I didn’t say that was the case at all. I’m only saying that when you’re having debt-free money flowing into your coffers at the rates Alberta now has it flowing the need of governments to be judged efficient by the levies of taxes upon their citizens diminishes, their need to be able to say no to projects they may not want drops.

That is why I said to a group not long ago I had very little trust in letting government pass the money through and recycle it to the consumer, because in passing that money through the Alberta heritage fund, or through the Alberta government or through the federal government and back to the consumers, there is a big overhead. That big overhead adds very greatly; therefore I would have argued that at the very least there should have been a restructuring of the split of the oil revenues before talking about excise taxes and, therefore, possibly eliminating the need for the excise tax which traditionally was a field that our group was in.

I only suggest that kind of argument will carry on. Ontario obviously has to defend the rights of its citizens and we will do so.

Mr. Makarchuk: I would like, if I may, to continue this. In listening to my friend from London Centre I have a feeling that if he had been in the Clark cabinet he would have written the same type of budget that Crosbie presented two or three days ago, with, it would be hoped, the same results.

I was just listening to the minister talk about the passing through of money to the government and the big overheads that develop and the problems, and so on. He forgets the report of the Ontario Economic Council and I just happen to have a copy. Just as an example: Family allowances, old age security, and so on; the cost is less than one per cent; in provincial allowance programs which are welfare programs and so on, the cost has stabilized at below five per cent.

The mythology that both of the other political parties live by is rather mind-boggling. As I have said before in this House, I am glad these people weren’t in charge in 1939 when the problems were much more severe than they are today, when we had about 20 per cent of the population unemployed, when the country was in great economic difficulties and we had to fight a war.

As I was listening to the discussion earlier about the deficits, the problems we are going to get with our pension plan, the charges on the taxpayers and so on, one could imagine if my friend from London Centre was in charge at that time, he would be saying: “Look at the problems; we’re going to have to fight the war; look at the borrowing we are going to do, the yoke that we will place on our children in the future who will have to carry this big load.”

The point there is that during those periods of time the Canadian government incurred deficits of about $2 billion per year at a time when the GNP was only $8 billion, in other words about 25 per cent of the GNP was in deficit; in comparison, the national GNP right now is $200 billion, on which we could sustain a deficit, on a similar parallel, of about $50 billion.

The country didn’t go broke, it didn’t fall apart. If anything, the country prospered. The people went to work, we started off on an economic boom, we industrialized ourselves; we did all sorts of marvellous things and we managed to pay off that money.

We’re not saying that you have to embark on useless programs or start building tanks or planes or ships, but there are certainly enough items, enough necessities in our public sector in which the government could get involved. This preoccupation with the deficit -- we’ve got to cut it down, we’ve got to have zero deficit et cetera -- is utter nonsense.

I would like to point out to the minister that in West Germany, which has a much lower unemployment rate, a much lower inflation rate, a pretty strong currency --

Interjection.

Mr. Makarchuk: No, no; when they had to have surplus labour they brought it in, but the point is their unemployment rate is much lower than ours.

The other factor is that their government spending, is roughly between eight to 10 per cent higher than ours. Eight to 10 per cent more of the GNP is spent by the federal government. They’re not worrying about this mythology of big government, they’re not worrying about the mythology of deficits, and they manage to run their economy.

[12:30]

The problem here is the financial calcification that seems to permeate the two political parties; that is really the problem you guys -- to use a slightly non-parliamentarian term -- have absolutely no new ideas. You are not prepared to look at different measures; you are not willing to examine some of the economic techniques that are used particularly by western European countries --

Mr. Peterson: What do they do in Libya, Mac? Maybe you can tell us.

Mr. Makarchuk: In Libya, they operate in the same way as they do in Ontario, in terms of ensuring that certain social needs are met, in terms of unemployment, in terms of inflation and so on.

Part of the problem we have with inflation is if you have a pile of savings and your savings are deteriorating at a faster rate than the interest rate, you naturally are prepared to go out and spend the money because there is no point in keeping it around. In Germany, as an example, the government is prepared to pay interest on savings at a rate higher than the inflation rate. That encourages people to save money instead of spending it. It seems to work. Perhaps the minister should consider it. Is he using the Ontario Savings Office at this time? I think in comparison with other banks it is about a percentage point ahead.

This is an item I have raised before. I think very seriously that is an area the Treasurer should really expand. The new Bank Act is going to be amended some time in the next couple of years. I think the province of Ontario should go there and get the right to operate a banking system in Ontario, to enlarge the Ontario Savings Office, so it has the opportunity to lend money, so it has the opportunity to be of assistance to small business, instead of some of the programs you have on stream right now.

One of the really serious problems for a small businessman is he is not in a position to go through all the red tape, to go to Bay Street, to go to some other places and find some individual who is going to lend him money. He doesn’t know where to go. He doesn’t know who to see. He doesn’t have the contacts, or anything of this nature. We would like to have some local institution that could make a local decision, where he can go and get the money, in contrast to the regular banks which are rather reluctant at times these days to get involved in that kind of thing.

Every manager is protecting his backside. For fear of making a loan that may not be paid back he doesn’t make any loans at all; or if he has the option to make a loan it has to be approved somewhere else. He is limited to about $20,000 or something of that nature as the maximum amount of the loan. The people in Toronto decide who gets a loan in Brantford or Orillia or Gravenhurst. That certainly is not a sensible way of doing business.

I would like to hear the minister’s comments on the idea of expanding the Ontario Savings Office.

The other matter that has been discussed here is trying to raise money. What the government of Canada did during the period from 1939-45 was it managed to raise money within the country; we could do very much the same in our current situation. We generate more capital in Canada than we invest in this country, but there is the problem of outflows and everything else. However, I think that on a selective basis the province of Ontario can operate in terms of using savings bonds, as the federal government does, to raise money in Ontario so the income goes to the people of Ontario. If there is any income, a certain amount of it will be coming back to the Ontario treasury, just as the federal government getting its bite out of the situation.

I don’t know why, and this has been raised before, since there are short-term treasury notes, et cetera, you don’t go out and sell Ontario savings bonds to the people of Ontario to ensure that the money is loft in Ontario and recirculated in Ontario.

I would like to hear the minister’s comments on these matters.

Hon. F. S. Miller: I guess this is where we part company to a large degree. In one way there is a provincial bank functioning, only it functions in different categories. The Province of Ontario Savings Office I believe was created at a time when there was a need in the agricultural community a long way back. These offices take money in these days, but don’t really lend it to anybody but the province of Ontario. It does pay a slight premium over the normal rate, although these days there’s a lot of competition.

At the same time, you have the Ontario Development Corporation making decisions to lend money to small businesses, in effect acting as the lending arm of a bank.

I would have to tell you that while there is obviously a large role for ODC, I have grave misgivings about the intrusion of government into those areas of business best handled by the private sector. I’d have to question whether the Province of Ontario Savings Office is still the viable entity it was when it was created and whether it’s meeting needs, or whether the money for the province’s needs can’t be raised in the normal fashion. I simply don’t trust the province, or any other government, to run a bank efficiently and make the decisions as well as the banking sector itself would make.

I have to tell you I’ve got more confidence in my local bank manager than you have. I don’t know what kind of experience you personally have had in getting small business loans. Have you ever had a business loan in your life?

Mr. Makarchuk: I probably ran a larger business at a younger age than you’ve ever done in your life. I think I have some experience in the matter.

Hon. F. S. Miller: Are you bitter? I don’t know how young or how big; I don’t ever pretend to have been a big businessman. I was a little businessman. If you’re a big businessman and a member of the NDP it means two things: You didn’t get the money at the bank and the business went down the tube.

Mr. Makarchuk: On the contrary: I want to correct the record. The business did not go down the tube. I sold out my share in the business and I haven’t looked back since that time. I may point out that back in 1955, Mr. Treasurer, I was running a business --

Hon. F. S. Miller: In Brantford?

Mr. Makarchuk: No, it was in Sudbury, in Elliot Lake. We had the Hertz, Tilden and Avis Rent-A-Car agencies, until Hertz found out. We had to divest. On occasion however, shall we say, the gross was close to $200,000 a year at that time.

Hon. F. S. Miller: Mr. Chairman, to put things in perspective: I was the Tilden dealer in Muskoka; my gross was a million dollars a year. Is that okay? However, that’s the gross of my whole agency and not just the rental part.

Mr. Deputy Chairman: At this point, I don’t think our various achievements are going to do much to help the advancement of the business of the province.

Hon. F. S. Miller: He challenged me, Mr. Chairman.

In any case; the local bank managers, I have found -- oh sure, there’s the odd sleepy one in the odd sleepy town -- but in the main, a local bank manager is very clearly related to his client group. He’s got a pretty good feel about who is a competent manager and who isn’t. If he’s a cautious person he may refer a good many of the minor decisions on to head office. If he’s aggressive he will take a very active role in helping them. But I have to tell you I’ve seldom been turned down by a bank manager when the deal was reasonable. In fact, I can’t recall when I’ve been turned down at all for anything.

I have to tell you, though, when I’ve dealt with some governmental agencies, and I’ve had experience with a couple of those, the process is enough to increase the profits of the LCBO handsomely before you’re through. I would have to argue the decisions are better made in the private sector, and that perhaps the role the EDF is running these days of guaranteeing some of those loans is much better than being the prime lender. I would only point out that I have that kind of confidence, since Canada’s banks, particularly since the 1966 or 1967 Bank Act change, have been very aggressive and have done a good job.

By the way, can I just read one thing into the record? I was just given a note that the Prime Minister of Canada has announced that all the budgetary measures introduced as a part of the budget on Tuesday evening will be withdrawn.

Mr. Makarchuk: Do we get a refund on the gas we bought, the 18 cents extra we paid?

I can see the minister’s ideological persuasion, the feeling that governments cannot do anything properly and they can’t operate the banks. The point is if you talk to the small businessman, again what they basically say is they’re not really happy with the way the banks operate. They put them through the hoops; they put them through the wringers; they do everything to them before they come up with some loans. The fact is in the banking business there really isn’t any competition. If you had a provincial bank that had some, shall we say social responsibility towards some other things besides just maximizing profits, perhaps you would have the other banks acting in a more responsible or more sensitive manner in comparison to what is happening right now.

The minister’s assumption that the businessmen are happy and the banking system is perfect, or close to perfect, is a lot of nonsense. That is not the reality at all.

In the matter regarding ODC, there is no question that it tries, in the experience I have had with it in referring people to them, but in the process some have been helped and some have not. Generally it ends up that fairly major corporations are able to avail themselves of the assistance.

I want to continue, Mr. Chairman, on one other item, which is the Ontario home repair program. If the government at any time has any program, or has looked at any programs which create jobs in an area where they need to be created, it is the home repair program. Admittedly, we have discussed this under the Ministry of Housing. What that minister said was that the Treasurer only allows him so much money and that is all, and he dishes it out the best way he sees fit.

I want to stress that if the government is really interested in helping small business, that is one of the programs that does help the local businessman, the small contractor, the plumber, the electrician, the roofer, the carpenter and so on. If somebody ever did an evaluation of the jobs created with the money spent in that program, I think he would find the maximum returns in comparison to probably any other program.

When the program was first initiated I saw, in Brantford in particular, that a lot of small contractors were able to acquire new equipment under this program; were able to acquire better facilities and to go into something bigger, or were able to go out into the private construction field because of the assistance they got, or because of some of the things that were done to help their ability to operate in these areas.

I would suggest to the minister that in the future, next year for example, he should triple or quadruple the amount of money going to that program, because the effect it will have on the province of Ontario will be very evident, not only for the small businesses themselves, but of course in the social benefits that flow from that.

Hon. F. S. Miller: That is a very popular program, certainly in my part of the province at least. I believe in most members’ ridings it has helped many elderly people stay in their homes while doing the things the honourable member has mentioned. Each year we have to look at our priorities and decide whether the $20 million that it currently gets will or will not change.

Mr. Chairman, I wonder if at this time we could ask that we proceed with the regular votes.

Mr. Deputy Chairman: I am prepared. Earlier it was agreed that the party critics would have a pretty free run. We are still on vote 901, but time is getting on and we have the vote on the supplementaries as well, so we will call them if it is the wish of the committee. I don’t want to cut anybody off. The member for Hamilton Mountain.

Mr. Charlton: Mr. Chairman, I will try and be as brief as I can. I did want to raise a few things with the minister, though, about property tax reform, although I know it is not something that is specifically listed under the votes in this ministry.

On the other hand, both during the revenue estimates and the estimates the Ministry of Intergovernmental Affairs we were told quite clearly --

Mr. Deputy Chairman: I will let you proceed on the basis it is going to be very brief, but if it is not in these votes it is out of order.

Mr. Charlton: That is the question, Mr. Chairman. Both of the other ministers made it very clear that the Treasurer is the minister responsible for policy in the area of property tax and property tax reform, that is a question this government agrees to.

Mr. Deputy Chairman: If you are going to make a long preamble I shall have to rule it out of order. If you want to put the question very briefly, I will permit it.

Mr. Charlton: Since time has run so short, Mr. Chairman, I will be as brief as I possibly can.

I want to urge on the minister, as strongly as I can, that property tax reform is a mess we have been into for some 12 years.

We had a strange situation two weeks ago where things got so tense the Liberals actually took it upon themselves to stand and refer the postponement bill out of the House into committee because of a considerable amount of honest and serious concern on their part about some of the things they saw.

[12:45]

There is a considerable amount of misunderstanding in this Legislature about where we are going and what property tax reform is all about. A year ago June, when Mr. McKeough, the former Treasurer, announced the last postponement, he said quite clearly that the Ministry of Treasury and Economics would be continuing to work to try to solve the problems. However, in this session of this House we have heard absolutely nothing about exactly where we are going.

The Minister of Revenue (Mr. Maeck) has gone into the section 86 equalization program, but the Minister of Revenue made it abundantly clear that the section 86 program, although it provides some benefits and some small measure of new equity or more equity, is not the answer and was never intended to be the answer; it is an interim measure.

Everywhere I have suggested this it has been said to me that the Treasurer is the one who is responsible. I want to suggest to him we have had a number of tax studies and reports done by the Blair commission, by this ministry itself and by the joint committee in 1978, and none of those studies has ever been dealt with by this Legislature or by a committee of this Legislature. The understanding of the whole question of property tax reform is not growing at all in this Legislature. There are very few members who understand it at all.

I think it would be of great benefit on two counts if the Treasurer were to take it upon himself to go to cabinet and suggest that we refer the whole matter, and all of the data and studies that have been done, to a committee of this Legislature. It would be beneficial from the point of view of creating a better understanding in this House generally, and perhaps it might even develop a good, substantial understanding on the part of the 10 to 15 members who served on the committee.

The other major ultimate benefit would be that anything that came out of the committee could be a serious indication to the Treasurer, and to his colleagues the Ministers of Revenue, Intergovernmental Affairs and Education, of those areas where we can find some agreement in terms of property tax reform, which perhaps would give us some better basis from which to proceed.

The comment was made by the former Treasurer, by the Minister of Revenue, and probably even once or twice by the present Treasurer, but I don’t want to pin him with it, that there has been no co-operation from this side of the House and that we haven’t been supportive. The reality is that we have not had anything to support or oppose.

Getting this whole matter out into the open, amongst the members of all three parties in this Legislature, is going to have to happen before we can ever resolve the whole question of property taxes. I urge the minister to seriously consider some method of getting this matter before the House or a committee of this House.

Mr. Deputy Chairman: Does the minister wish to make any reply?

Hon. F. S. Miller: In the interest of time, I had better not. I am certainly studying these matters very seriously.

Mr. Deputy Chairman: We have before us now all of the votes of the Ministry of Treasury and Economies.

Votes 901 to 904, inclusive, agreed’ to.

Mr. Deputy Chairman: That completes these estimates, save for the supplementaries.

Vote 903, supplementary, agreed to.

Mr. Deputy Chairman: That completes the study of the estimates of the Ministry of Treasury and Economies.

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

CONCURRENCE IN SUPPLY

First Clerk Assistant: Mr. MacBeth, on behalf of Mr. Edighoffer, from the committee of supply reports the following resolutions.

That supply in the following amounts and to defray the expenses of the government ministries named, be granted to Her Majesty for the fiscal year ending March 31, 1980.

Mr. Deputy Speaker: Dispense.

Reading dispensed with. (See appendix, page 5554.)

Resolutions concurred in.

The House adjourned at 12:50 p.m.