The House resumed at 8:02 p.m.

ONTARIO LOAN ACT

Clerk of the House: Second reading of Bill 49, An Act to authorize the Raising of Money on the Credit of the Consolidated Revenue Fund.

Hon. F. S. Miller: Mr. Speaker, this is a routine bill and requests borrowing by the province in the amount of $1.8 billion between now and September 30, 1981. I will be pleased to answer questions by my critics.

Mr. Peterson: Mr. Speaker, it gives me a great deal of pleasure to --

Hon. F. S. Miller: Mr. Speaker, I get up on my feet so often to do these things, I sometimes forget. I forgot to move second reading of this bill.

Hon. F. S. Miller moved second reading of Bill 49, an Act to authorize the Raising of Money on the Credit of the Consolidated Revenue Fund.

Mr. Peterson: This reinforces a preconception I have, Mr. Speaker. How can we trust the government of this province to someone who does not even know when to move second reading of a bill? We have seen a series of --

The Acting Speaker (Mr. MacBeth): It is partly the chair’s fault; I should have picked it up.

Mr. Peterson: Indeed, it was not your fault, Mr. Speaker. You have done an exemplary job in your brief time in the chair tonight, over a minute and a half. I have not noticed any mistakes. But it is interesting to see that the Treasurer -- although with prompting from the Minister of Health (Mr. Timbrell), who should be out running the Ministry of Health this evening -- I am glad to see him here. He must be on the list; he must have done something bad; he must be being punished for some reason or other, or else he would not be here.

Hon. F. S. Miller: We were hoping the member would be at the Ontario Economic Council conference.

Mr. Peterson: I would very much prefer to be at the OEC conference tonight, there is no question about that. Whoever decided to call these bills tonight, I would like to speak to them.

Hon. F. S. Miller: The member should look at the New Democrat support he has tonight.

Mr. Nixon: They are out watching movies.

Mr. T. P. Reid: Their contribution would be the same.

Mr. Peterson: It is interesting there are no NDP members in the House tonight, not even one. I would like Hansard to note that. In fairness, it is indicative of their interest and perception of the kinds of matters we are discussing tonight. It does not matter to them whether we are $1.8 billion more in debt or $85 billion more in debt, or whatever. They have shown over the years a singular lack of interest in the subject, almost as serious as the lack of interest shown by the government.

Mr. Nixon: Their interest is $4 million a day.

Mr. Peterson: I am one of those who are tempted to vote against this bill tonight because it would put a discipline on this government that it has never had before.

You will notice from this bill, one that I gather we discuss on an annual basis when it becomes time for my little speech about borrowings from various pension funds, I must say one of my favourite topics, that the government wants the authority to borrow $1.8 billion from the various pension plans and internally generated funds. Of course, the first point you will realize, Mr. Acting Speaker, as a financial neophyte, as I know you are, having been a member of that government in the past before you reached your venerable position of objectivity and nonpartiality in this House, is how easily this government can spend $1.8 billion or whatever the figure.

It takes me back to old Darcy McKeough, the previous incarnation of the Treasurer sitting opposite tonight, who said the public really didn’t know whether the deficit was $1 billion, $2 billion or $3 million; it didn’t really matter. That philosophy, interestingly enough, was espoused by a Treasurer who was deemed to be and publicly perceived to be the most parsimonious Treasurer in the history of this province but who was, in fact, the highest-spending Treasurer in the history of this province. Our present Treasurer, the diminutive member for Muskoka, has carried almost the same irresponsible attitude.

Ask yourself the basic question, Mr. Acting Speaker: Why are they borrowing $1.8 billion when the deficit is less than $1 billion, when the net cash requirements are less than half of what they are borrowing? On the face of it, I am sure you would agree with me in your new nonpartisan status, Mr. Acting Speaker, that does not add up.

On the other hand, one has to look at the facts. We have allowed this government over the past decade -- and this is a phenomenon of the Davis government; this is not a historical phenomenon or even a phenomenon of the Conservative government -- to borrow literally billions and billions of dollars on the consolidated revenue fund from various internally generated pension funds that I respectfully submit, and I have said before many times in this House, put a future generation of taxpayers in very serious jeopardy.

Every year without exception, almost the biggest single increase in spending is interest on the provincial debt. Now, close to 10 per cent of the provincial budget goes just to service the debt to pay for the accumulated borrowings of the past.

Hon. Mr. Timbrell: It’s 20 per cent for your friends in Ottawa.

Mr. Peterson: I will admit to the minister that my friends in Ottawa, and the minister uses that term loosely and I use it loosely, are occupying almost 20 per cent of the federal budget to pay off federal debt. Don’t let us extol that as a virtue. Don’t let us say that is a yardstick.

Hon. F. S. Miller: It is Liberal policy.

Mr. Peterson: I daily face from the Treasurer, when he’s in trouble, some reference to the federal Liberals. I am not one who is here to expound the virtues of the fiscal management of the federal Liberals because I am one of those who think we are in serious trouble. I am one of those who think we need some serious corrections, both fiscally and otherwise but it is not good enough and not satisfactory to have as the only response that the federal government is worse.

In a number of instances the provincial government is very much worse than the federal government and the federal government has infinitely more, at this point at least, fiscal capacity than does the provincial government. So that’s a pretty small and partisan response to what I think is a very serious issue.

Hon. F. S. Miller: Who is more fiscally responsible?

Mr. Peterson: The Treasurer should turn up his hearing aid, and he will be able to hear these wise words that I am going to share with him tonight.

I want to talk about these borrowings tonight. As you will note in the bill, Mr. Speaker, it authorizes borrowings from the Canada Pension Plan and the Ontario Treasury bill program -- at the present time, at least, we are not borrowing anything from the Treasury bill program -- from CMHC waste control loans, federal-provincial-municipal loan programs and also from the Teachers’ Superannuation Fund.

8:10 p.m.

It is a recognized and generally accepted fact that the deficits of the past decade have been fuelled by internally generated funds at below market rates. The government has been asked about this on occasion. I want to be charitable, Mr. Speaker, because I don’t want to be ruled out of order -- I was going to say, but I am not going to, that they have misled the members of this House and consequently the people of this province. I can’t say that so I have to use another word.

Hon. Mr. Timbrell: I am glad you are not going to say that. That would be untrue.

Mr. Peterson: I would say they have revealed a lack of understanding of the problem other people do at least have because it is a recognized fact. It is admitted in the budget papers, and they at least were written by a qualified economist, which the Treasurer has never pretended to be, that the province borrows at below market rates from the various internally generated pension funds. I will use the Canada Pension Plan as one example.

As members know, under the various power distribution sections of the British North America Act, 91 and 92, the provinces have responsibility for the pension plan. That was delegated under the wisdom of the former Premier, John Robarts, to the federal government in return for the province being able to borrow those funds to develop a capital program or to spend those moneys on deficits, whatever the province wanted to do at that time. That was generally the agreement in 1966 or so when the plan came into creation.

As of March 31, 1980, the end of fiscal 1979, the province owed the Canada Pension Plan $8,757,000,000. The problem of course is that in 1983 or 1984 we are going to run into a negative cash flow when we can’t borrow enough money from them to pay our interest. I have to provide a range so my figures are not inaccurate. Members will recognize these are all actuarial projections and actuaries are human like all of us, like the Treasurer, like everyone else, so I cannot give a precise figure. The point is that in about 1985 or 1987 the disbursements from the Canada Pension Plan will start to exceed the receipts and by the end of the century, in rough terms, that fund will be bankrupt, barring an increase in contribution rates or some other fiscal renegotiation.

That puts a tremendous fiscal burden on this province, which will owe the federal government $12 billion or so at that time. It will have to be paid out over a period at a rate of roughly $1 billion per year. This Treasurer does not know and the previous Treasurer did not know from whence cometh those funds. No one knows. There are two solutions: they can either dramatically cut down expenditures or they can increase the tax rate. There is a third solution: they can go to the public market. Barring some major change in the financing arrangements of this government, we are going to see a flight to the capital markets, competing with private capital which in itself is highly inflationary.

I have yet to hear an intelligent, articulate view from any member of that government about how those pension plan borrowings are to be refinanced. I remind members again, those are being borrowed at less than market rates. Had those funds been put out into the private market, had they been allowed to generate a real rate of return, commensurate with a capital market at those times, the fiscal integrity of those funds would be far more significant than it is today, and that is a recognized fact. It is recognized by the Canada Pension Plan advisory committee and almost any other actuary who wants to look at it.

We have created in our largess of the 1970s, in the beneficence of the Davis government, in the interest of creating this wonderful public capital infrastructure, a debt load that our children will almost not be able to bear. What is the response of the government? McKeough used to say, “Well, we’ll worry about that later. The economy is going to be dramatically bigger and we will find that $1 billion or $2 billion here or there.”

I have yet to hear the Treasurer of this province utter one thing that is even semi-intelligent on this subject, that reveals even any kind of understanding. The usual and trite response is, “We will wait for the Haley commission.” She, the fount of all knowledge, is going to tell the Treasurer what to do in this area, as well as a number of other areas. I hope she has the answers, but the answers are all painful.

It is going to require a very serious cost. It is going to require an increase in contribution rates. It is going to require, in my judgement at least, that the provinces can no longer touch those funds and borrow them just to fuel deficits. That money should have gone, as it should go today, into building the capital infrastructure in this country.

One of the very serious problems we have in this country is that we are underinvested. We have decided as a nation to consume more and invest less, and here we have one of the largest pools of presumably free capital that we have access to that could have been invested in the capital markets.

I am one of those who welcome very much the latest move to invest $500 million in Hydro. This is the kind of project into which the cost of money is built and which guarantees a payback over a period of years. But when the Treasurer responds and says we have spent that on schools, hospitals, roads, bridges or pollution control equipment -- and I am not denying there is a social return -- there is no economically measurable return from those kinds of investments. We will always in this province and in this country have a need for capital expenditures of different types over a different period of time.

We are moving into a new kind of generation that is going to demand more from this government. We are going to have to spend more provincial and federal money on pollution control equipment, equipment to guarantee our future and some kind of purity in our environment. That is a reality; we know that. But there will always be a need for capital expenditures by any government. We have to treat these not as expenditures that are going to be paid for over a period of time by future generations of taxpayers, but as one-time writeoffs in the system now, as we will have to treat them that way 10 years from now.

I understand, better than the Treasurer does probably, the attraction of going into debt to do this kind of thing, particularly under the guise of a restraint program. But let me assure you -- I assume you have children, Mr. Speaker, because you are a very virile fellow -- your children are necessarily going to carry a tax load that would be embarrassing to you. At some point an economic disincentive is going to set in where people are going to say it just is not worth working any more. We are very close to that economic choke point right now in our system. People are saying it is not worth working, it is not worth contributing, it is not worth being productive.

Those are the kinds of problems that this government has passed on to future generations of taxpayers. It is all the more serious when one looks at the demographic overlay, when we see we are going to have far more people dependent on the system and far fewer productive workers. We are going to have twice as many people on the upper end of the dependency scale depending on the productive capacity of the people who are then working. It all bodes for very serious financial problems in the future.

I wish that a decade ago when the government started borrowing from these internally generated funds, it had not had the power to do so. If it had not had that power, it would have been far more prudent, far more wise and far more precise in the spending it has demonstrated over the past years.

I am one in this House and other places who advances the thesis of availability-fed demand. The government has always looked at how much it could borrow and then spent that amount. It has looked at the internally generated funds from the Canada Pension Plan, the Teachers’ Superannuation Fund, the Public Service Superannuation Fund, the Ontario Municipal Employees Retirement System and whatever, and said, “We will borrow that amount and our deficit will roughly coincide with the amount we can borrow.”

8:20 p.m.

Always deferring the inevitable; never really being called to account because most people did not understand it, because the majority of people said that because they are not going to the capital market, they cannot really have been developing a deficit. As I said, at the end of fiscal 1979, March 31, 1980, the government owed the Canada Pension Plan $8,757,000,000, the Teachers’ Superannuation Fund $3,523,000,000 and OMERS $1,293,000,000.

The argument is advanced sometimes, and I have heard this Treasurer say it in the House, that he was not paying below-market rates for that money. Let me offer a little bit of evidence. The OMERS fund, that section of which has been designated to the private marketplace, to private-fund management to run, is generating a three to four per cent higher return than that money which is tied up in provincial bonds.

Hon. F. S. Miller: Things have changed in the meantime.

Mr. Peterson: The Treasurer may have some new information to bring to this subject, and I will he interested. I am saying that is historical record. I am talking over a three- to four-year period when that money has been available.

Hon. F. S. Miller: Sure, because rates went up in the meantime.

Mr. Peterson: Mr. Speaker, he has such simplistic views of this whole situation. I will be very interested to hear what he has to say about the subject. All I am saying is that this money should have been, in my judgement, managed on the same model as the Swedish system. There, a multiplicity of pension funds is managed by independent fund managers seeking the highest rate of return in the marketplace with a limited number of restrictions. He should have been investing in the Canadian capital infrastructure, seeking out the highest rate of return. Those pension managers who were not generating the proper rate of return should have been cancelled and that money moved on to other people.

Had that been done, there are a number of studies around to say that in Ontario we would have less unemployment, more investment, more real income, less inflation and loss of all the other economic evils we are facing in this province today. Almost every commentator recognizes we are very much underinvested as a jurisdiction and as a country.

How could we possibly expect to get the level of investment commensurate with what we need when we have these avaricious governments at all levels, and this is one of the principal offenders, stealing every available cent to spend for their own political purposes at any given time in history? That is the situation we are in today. It troubles me and it troubles any serious observer of the scene. I guess they are banking on the theory that they will not be here three or four years from now and somebody else will have to deal with this very serious problem.

I have done my utmost to bring this to the attention of the Treasurer who, presumably after a year and a half or so in his job, should at least start to understand the problems and should start providing some very serious answers to these kinds of questions.

They are serious, and I am almost tempted to recommend to my colleagues that we vote against this bill to put disciplines on this Treasurer which he has hitherto not faced. However, the government would grind to a halt if we did, and reluctantly we are going to support this bill tonight. But had we had the judgement some eight or 10 years ago to be far more parsimonious with this government, I suggest we would have had far more responsible government in terms of spending.

All of these funds are in very serious disarray. The Teachers’ Superannuation Fund, for which the provincial taxpayer has the ultimate responsibility, now has a $1.4-billion unfunded liability. That means you, Mr. Speaker, your children and everyone else are going to have to pay for those legal commitments taken on by this government to pay teachers’ pension plans for which they are at present committed.

Had the $3 billion or so from the Teachers’ Superannuation Fund been invested at market rates in the marketplace, the unfunded liability would be far less than it is today.

The question is, who ends up paying for the very serious deficits this government has undertaken? It is, ultimately, the taxpayer. It is being deferred. There is no easy money; there is no free money to be borrowed in this system. Ultimately, the taxpayers pay.

We are going to have to pay back not only all the funds we have borrowed, not only the interest on all those funds, but also the unfunded liabilities which, at this point, add up to about $2 billion more than the Ontario taxpayer is going to have to be responsible for over the next two or three decades.

It is a very dismal story. I only regret that the average voter does not have a full comprehension of this problem. You, as Speaker of this House, as an objective observer, as one concerned about the fiscal integrity of this province and the capacity of future generations of Ontarians to earn a living in a productive capacity and in a productive environment, have an obligation to spread the word about what we have done to them. You, as has the Treasurer, have an obligation to make sure we do not carry on with these silly practices of the past.

It is with a very heavy heart that I vote for this bill. It is conceived of as a technical bill. It is a housekeeping act we see every year. Every year I make a little speech on it. Every year we vote for it and we carry on. When the Liberals come to power in this province -- and it is not that far off -- we are prepared to undertake some of the very difficult decisions that are going to have to be made, the effects of which are not going to be felt for 10 years.

Mr. Wildman: Which ones?

Mr. Peterson: We have an obligation to move the ship of state one, two or three degrees off course so we arrive at a very different destination 10 or 20 years from now when the full effects of these irresponsible factors are going to be felt.

Mr. Wildman: Which ones?

Mr. Peterson: We are prepared to do that. We are prepared to deal with the gripping problems now so that we do not leave them to some apocalyptic solution 10 years from now.

I hear some yapping from my NDP friends behind me. I am glad three or four have shown up.

Mr. Wildman: “Yapping” is not a very nice word.

Mr. Foulds: Do not call us friends.

Mr. Breaugh: I demand the member retract the word “friend.”

Mr. Peterson: There is no one there who can count, let alone manage the finances of this province. That is why nobody takes these things very seriously.

Mr. Wildman: The member has not been specific on one thing he has said.

Mr. Peterson: It is interesting that the member for Algoma says I have not been specific. I have given a whole bunch of numbers here tonight. Just because he cannot count past five, and I have lost him, does not mean I have not been very specific. But I do not want us to get misled by that yapping. They are not players and they never will be.

Mr. Foulds: On a point of privilege, Mr. Speaker.

The Acting Speaker: I will hear the point of privilege from the member for Port Arthur.

Mr. Foulds: The Speaker has been most adamant in the last several weeks that the word “misled” or the imputation of “misleading” cannot be made by a member of this assembly. The member for London Centre has imputed motives to my colleague from Algoma that are not accurate and are clearly contrary to the standing orders of the House. He has also blatantly used the word “misled” which I ask you to ask him to withdraw.

The Acting Speaker: Would you let me have the exact phraseology the member for Algoma used?

Mr. Foulds: The member for Algoma was frankly Shakespearian in his utterances. He did not, in fact, use any language that was unparliamentary, but the member for London Centre indicated that my friend from Algoma was attempting to mislead him. I resent that imputation. I think it is unparliamentary.

The Acting Speaker: I do not recall anything to that extent.

Mr. Foulds: I will have the member for Wilson Heights (Mr. Rotenberg) on his feet tomorrow.

Mr. Peterson: Mr. Speaker, you are far too intelligent to be taken in by this gentleman’s histrionics. How can you take seriously any gentleman who does not wear a suit coat, even in this House? He continues, not only with his dress but with his utterances, to insult completely this House every time he rises. I respectfully submit you have treated him in the way he deserves to be treated.

They are irrelevant to the whole process. They are not the government, and they never will be. They are sycophants. They are the lapdogs of the government in power today. They do not even understand what they are voting for.

8:30 p.m.

Mr. Wildman: On a point of privilege, Mr. Speaker: With all due respect, I do not mind being referred to as a lapdog and I do not mind the member saying I yap, but I really wish he would quit calling me his friend.

The Acting Speaker: You may have a point of privilege there. The member for London Centre may continue.

Mr. Roy: Your friends are on the other side. That is why you are getting annoyed.

Mr. Peterson: My academic training was in the courtroom niceties. You will understand, Mr. Acting Speaker, being a solicitor yourself, that one is always trained in law school to treat even one’s most serious adversaries with respect. I thought I could elevate them just a mite if I referred to them as friends. However, I will never do that again. Everyone who knows them has learned they can never be considered as friends because they cannot be trusted. They would turn on one.

Interjections.

The Acting Speaker: We are enjoying a little hilarity here tonight, but I think I should ask the member for London Centre to modify that a little.

Mr. Peterson: I will withdraw that, Mr. Speaker, in the interests of winding up in a hurry. I wanted to say these are problems I would like to see the Treasurer address and not wait for the Haley commission. It is now a year and a half old. God only knows when we are going to see its report.

God only knows when we are going to see government members speaking about this issue. To the best of my knowledge, the Treasurer has never made a public utterance on this subject except in response. Like his usual responses, they are fudged and equivocated. One has to work far harder than anyone around here is capable of doing to extract any grain of truth -- I withdraw that, Mr. Speaker -- any grain of substance therefrom.

I would like to hear from the Treasurer tonight in his response that he understands the gravity of the problem and has some plan for rectifying it. I do not expect anything from the NDP. I do not honestly believe they understand it. I honestly believe they would be far worse than the present government. The serious observers, the Ontario Economic Council, the Economic Council of Canada and any serious study on this issue have said we need corrective action, and the sooner it is taken the easier the transition will be.

I do not know when we can expect either interest by the government or some kind of action by the government, but it is clearly in the Treasurer’s court right now. We will vote for this with reluctance. It is with a very heavy heart we do that because it will just be dissipated the same way it has been over a series of years.

That is all I have to say in my annual response to this bill. I will be interested in the Treasurer’s remarks.

Mr. M. N. Davison: Mr. Speaker, perhaps I could offer the perspective from Hamilton as opposed to London, the financial, insurance and pension capital of Canada. When the member for London Centre commenced his remarks --

Mr. Wildman: For London Life.

Mr. M. N. Davison: The member for London Life.

Mr. Roy: We are really going to hear from a financial expert now.

Mr. M. N. Davison: That is right. I think it is about time we had some edification from a working-class fellow. The member has none of those in his caucus.

Interjections.

Mr. M. N. Davison: When the member for London Centre commenced his remarks, he took some time to point out the absence of members on the NDP benches. The reason for that was that we were all upstairs reading his last year’s speech, which was substantially the same speech he made this year. If there is one thing that is certain when we view political life in Ontario, it is death, taxes and watching the Liberals reluctantly support over a period of a long time this particular legislation as it comes forth on a yearly basis.

Borrowing by government and borrowing by this tool is not in itself necessarily an evil, as is the implication when one listens to some critiques of the process. Borrowing by government is essentially the same as borrowing by any institution, corporation or individual in our society; it’s a question of the reason for borrowing the money.

I would find it difficult to argue with a government that borrows money to see to the public health. I would find it difficult to quarrel with a government that borrows money to see to the economic security of its people. To the extent that the government does that, I have no objection. What I do object to is the use of borrowed money on bad spending priorities. Essentially, I object to bad spending priorities, and we in this party are capable of separating the two issues. We do have some substantial disagreement with the government and with the Liberal Party as to spending priorities in Ontario.

The question of borrowing from the pension funds, as put by the member for London Centre, is an interesting area. It’s a curious area because I think it is one in which there is an almost universal ignorance as to the long-term meanings of that. I think the member for London Centre makes his case reasonably well when he talks about the potential seriousness in, if not the short term, at least the moderate mid-term. The figures are rather startling when we consider that in a society like ours, at this point in our history, we have something like six working people for every person on pension. Early in the next century that figure will be cut in half.

The amount of unfunded liability is a serious concern and a serious question. I rather suspect it is the ignorance of the experts and the lack of knowledge of the public that encourages the government to gamble as much as it does in a lot of its borrowing. In the final analysis, however, government must maintain that kind of flexibility in its fiscal planning; government must continue to have access to those sources of funds rather than necessarily leaving them available and open as a private borrowing pool.

However, I think it would be nice if, in conjunction with that, the government was able somehow to rearrange its spending priority so we could see that the money was being spent on worthwhile projects, unlike a number of the projects that the government sinks public money into.

Mr. Laughren: Mr. Speaker, I should give a word of explanation as to why I am a couple of minutes late. It is because I was sitting in for the Treasurer at the meeting of the Ontario Economic Council where some very profound problems are being debated this evening. As a matter of fact, when I left, Carl Beigie was at the podium espousing the virtues of closer liaison with the United States through the C. D. Howe Institute.

Mr. Peterson: Why don’t we send the Treasurer to learn something?

Mr. Laughren: As a matter of fact, there were a lot of people asking for the member for London Centre and wondering whether the Liberal Party was still alive in Ontario. I assured them the Liberal Party was struggling and that we were giving them resuscitation.

The Acting Speaker: Back to Bill 49.

Mr. Laughren: Back to Bill 49. I did mention that branch plants were not a new problem to Ontario but that a branch plant political party was becoming an increasing problem in Ontario and that until the Liberals were done away with they would continue to be a problem.

8:40 p.m.

Back to the bill, Mr. Speaker. The consolidated revenue fund provides for a wide-ranging debate. I believe that is the tradition in this chamber -- that we can talk about --

Mr. Speaker: Anything that is relevant; nothing to do with meetings held outside.

Mr. Foulds: On a point of order, Mr. Speaker: The previous Liberal speaker should have been ruled out of order for his entire presentation.

Mr. Laughren: Exactly; I was thinking the same thing. As I was walking across Queen’s Park I was thinking the same thing.

Mr. Speaker, the raising of money by credit is the purpose of this bill. Like anyone raising money, the state of economic health of the borrower is one of the key ingredients in determining what kind of reception one gets from creditors. It is the economic health of Ontario that bothers us a great deal.

What we have tried to say to the Treasurer is that he is heading in the wrong direction. As a matter of fact, he is following in the wrong direction. If he was leading in the wrong direction I could perhaps find it easier to cope with. But he is simply following the direction of the Minister of Industry and Tourism (Mr. Grossman). The Treasurer simply won’t come to grips with that problem.

The more I think about it -- and this is directly relevant to this bill because of the need to borrow moneys to keep Ontario in good shape -- the more I realize that as the recession in the United States increases, the greater will be the problems in Ontario. When we do 70 per cent of our trade with the United States, it means that whatever happens in the US affects us very profoundly.

Right now we are seeing it spilling into the automobile industry. In a very short period of time we are going to see it in the pulp and paper industry, and I know that Mr. Speaker is very concerned about that industry. We are going to see it in the steel industry. Within the last two weeks it has begun to hit the nickel industry, as the automobile industry goes into decline in the United States.

Unfortunately, the Treasurer fails to come to grips with that problem. He sits over there and issues his statements that we are going to have greatly increased investment in manufacturing in the next year and he beats his breast about that. What he doesn’t seem to understand is the reason why we are going to have increased investment in manufacturing. It is simply an accumulation of profits combined with the fact that a lot of manufacturers have reached the maximum capacity of their operations and they simply have to expand. But as the recession spills over into this jurisdiction we are going to find increasingly hard times.

What we in this party have tried to say to the Treasurer is that he simply cannot continue to rely on that invisible hand out there, that great invisible hand in the marketplace to look after things.

Mr. Peterson: Where is Adam Smith when we need him?

Mr. Laughren: That is right. The Treasurer still thinks, along with the Liberal member for London Centre, that the invisible hand out there is going to solve all problems.

I would like to give an example. In Saskatchewan when the government came into power in 1971, it said, “We don’t believe the invisible hand is going to serve the people of Saskatchewan best.” We do not have that situation in Ontario.

Mr. Peterson: On point of order, Mr. Speaker: I say with great respect to the member for Nickel Belt that he is not discussing this bill even by the widest, most extravagant interpretation one can make of what is contained herein. This is a bill about borrowing --

Mr. Speaker: I will decide whether any member or not is relevant. I heard the member for London Centre from my office. He was given an awful lot of latitude. If the honourable member wants to speak about another jurisdiction for purposes of comparison, I am prepared to listen to him.

Mr. Laughren: Mr. Speaker, what I want to talk about is the need for Ontario to increase its revenues. Surely as the revenues in the province increase there will be less demand to borrow. Surely that is relevant to the bill we are discussing this evening. There is a sense out there that if the public sector gets involved in anything it absorbs wealth rather than creating it. This party has tried to say that is not necessarily true. If we were to create a crown corporation, for example, to build mining machinery, it would be a wealth-creating act and not an act absorbing wealth. We cannot seem to convince the Treasurer or his government that that is true.

Take Saskatchewan as an illustration. They have created a Crown Investments Corporation which is an umbrella over 17 other crown corporations. In 1978, the last year I for which have figures, 16 of the 17 earned a surplus. The Treasurer would call it a profit; I prefer to use the term “surplus.”

We have said that is what we need here. This hands-off approach to the economy simply is not working. That is why we have high unemployment in Ontario. That is why we have very serious problems with the decline in manufacturing. As a matter of fact, there is a process going on here which economists are calling a deindustrialization process; it is happening because the Treasurer and his fellow ministers will not deal with the problem. They say, “That is the way the system works; we will just let the chips fall.” We say very clearly to the Treasurer that he has to get off this tangent.

I asked the Premier a question about resources today. Despite the fact that in Ontario less than two per cent of the value of production of minerals comes back to the province in the form of revenues, versus 13 per cent in Saskatchewan -- and I am talking about minerals, not oil and gas -- the Premier stood in his ideological straitjacket and said: “We will never entertain that. Don’t give me the facts.” That is virtually what he said today. He dismisses out of hand the possibility of creating new wealth which would allow us to deliver services to the people of Ontario.

Our colleges and universities are underfunded, our children’s aid societies are underfunded, our public educational system is underfunded, and the government says, “We just don’t have the money.” They fail to go one step further and tell us why we do not have the money. We are deindustrializing. We import so much of our manufactured goods. The Treasurer and his colleagues over there simply will not deal with that.

We have been trying to say for years that the public sector can create an enormous amount of wealth. It can be a very positive influence on the province. In other jurisdictions it has proved to be that way. It would not be any kind of ideological aberration if the Tories were to do that. They created Ontario Hydro, how many years ago? It is already there. One of the finest services in Ontario is norOntair. I cannot speak for you, Mr. Speaker, but I suspect you would agree. When I go into very small communities in northern Ontario, I know that service would not be there if the province had not stepped in, directed that service be provided and provided the funding to get it under way. That is the public sector doing what it should be doing; not operating every little corner cigar store but moving in where it is absolutely crucial.

I am always talking about mining machinery. The Treasurer and the Minister of Industry and Tourism (Mr. Grossman) simply refuse even to talk about the issue. When the Treasurer responds tonight he will not talk about mining machinery because he will say, “My colleague is putting on trade shows.” Isn’t that interesting? It is also interesting that we send salespeople from the province all around the world to splog our products; in other words, to promote exports. How many people do we have in Ontario working on the replacement of imports? Precious few. It is a distorted priority. I say to the Treasurer, it is fundamentally wrong. We should be using crown corporations, because they have an enormous potential for creating wealth.

8:50 p.m.

Do you know what the Treasurer is, Mr. Speaker? I will be very careful here, because I notice your eyes getting a little narrow. The Treasurer is Schumacher. Schumacher wrote a book called Small is Beautiful, and I am an expert on small being beautiful. The Treasurer seems to think we can hearken back to a day when small was beautiful and rebuild the Canadian and Ontario economies by that kind of process. But I put it to you, Mr. Speaker, that day has passed us by and the Treasurer simply is not willing to accept that.

One way he could move in and turn things around is to cast off this straitjacket he seems to be stuck with. Since 1971, resource revenues in Saskatchewan have increased twentyfold. That happened after the NDP government was elected. Can the Treasurer make that same claim about the performance of the Manitoba economy since Sterling Lyon was elected? The answer is obvious. The Manitoba economy has gone down since the Tories were elected, and the Saskatchewan economy has gone up since the NDP was elected there in 1971.

I suggest that the Treasurer is prepared to dabble with his portfolio. He is not prepared to grasp the fundamental issues in Ontario. We tell him that the manufacturing deficit is unacceptable; in Canada, it went from $12 billion to $17 billion in one year. The figures were released in the last day or so about the trade deficit, which is completely unacceptable; it is higher even than last year’s. The Treasurer is not prepared to move in there either. I wonder how far the Treasurer is prepared to let the economy of Ontario decline before he moves in with some positive intervention. I would like to know that. Is the Treasurer prepared to do anything? Is he going to sit back and watch?

My colleague from Windsor-Riverside (Mr. Cooke) raised the issue today with the Minister of Industry and Tourism, and he got a non-answer. The Treasurer is the one we should be putting these questions to, because the Minister of Industry and Tourism is too busy building an empire to worry about the overall economic health of Ontario. We had a $788-million deficit in the automobile industry in 1979. We are up to $947 million in the first four months of 1980 and, since we had a record deficit last year, it would appear we are heading for another record deficit this year. Surely that is completely unacceptable.

All this government has done is say it is prepared to put $10 million into a research and development project in the city of Windsor. That needs to be done and this party supported that position. But surely that is not enough. I would ask the Treasurer, when he responds, because surely this bill is all about the economic health of the province, to say what his plans are about the mining machinery industry and about the automobile industry. He cannot escape that. He cannot pretend this is just a bill that authorizes the borrowing of money from certain pools of money; it is much more than that. I would ask the Treasurer to tell us what his plans are for the incredible deficit in machinery, particularly mining machinery.

The Acting Speaker: The member is now becoming repetitive.

Mr. Laughren: It seems, Mr. Speaker, that unless one is repetitive, it doesn’t sink in.

The Acting Speaker: It becomes monotonous, though.

Mr. Peterson: Tell him again, Floyd.

Mr. Laughren: All right, I will say it once more. What does this government do? It looks at the problems coming at it, in terms of inflation and unemployment, and the Premier (Mr. Davis) goes down to a big hotel in Toronto and he muses out loud that perhaps what we need is a return to wage and price controls, as though that is going to correct the structural deformities of the Ontario economy, as though that is going to solve the problem. We had wage and price controls. What did they do towards rebuilding the Ontario economy? Absolutely nothing, because they failed to recognize the nature of the problem. When the Premier does that, he is laying down a smokescreen; he is copping out. He is camouflaging the whole problem. We in this party believe that is not acceptable.

Finally, when the Treasurer responds to the comments on this bill, I put it to him that he should deal with the problem of economic planning and to what extent he is prepared to jump in there and mix it up with the private sector to see whether we can turn things around and get Ontario back into a growth position.

Mr. Williams: Mr. Speaker, in considering the substance and specifics of the bill before us this evening, there is a matter of detail I would be interested in having the minister elaborate upon, if he would.

I know it is customary in bringing in these types of money bills to seek financing from several of the traditional sources. It appears this pattern is being followed with regard to this bill. I refer specifically to section 1(2) of the act where it indicates the source of funding will be by the issuance of provincial debentures to the Teachers’ Superannuation Fund under the authority of the Teachers’ Superannuation Act and to the Ontario Municipal Employees Retirement System Fund, under the authority of the Ontario Municipal Employees Retirement System Act.

I am fully aware these are the traditional sources of funding the Treasurer goes to from time to time as he sees the need, but not being the Treasurer and not having the specific details in front of me about the advantages of going to one fund rather than the other, I am not clear whether it is done traditionally, as a matter of percentaging, that the Treasurer would rely on funding from one of the sources, say the Teachers’ Superannuation Fund, rather than the OMERS fund. Is there a preference given? Is it dependent upon the prevailing rates of interest at the time? I presume this is the major consideration, and I presume under those two pieces of legislation there are factors that can determine when it would be advantageous to rely on funding and emphasizing our source of funding from one of those acts rather than the other.

I must admit I am not entirely clear as to what formula is used by the Treasurer. I am sure he goes to the best source available that will provide the most favourable interest rates for the borrowings intended, but I would appreciate the Treasurer’s elaborating on the methods used to determine what is in the best interests of the province by way of relying on one fund over the other as being the most advantageous from a borrowing point of view.

Mr. Nixon: Mr. Speaker, I shall be very brief. I want to express my displeasure at the position taken by the Treasurer, followed by his colleagues, in patting themselves on their backs in this particular budget and saying they are giving these services with no new taxes. Now Bill 49 comes to us and for the cost of providing services with no new taxes or no tax increases we will borrow $1.8 billion.

Specifically, the Treasurer announced there would be no new taxes but the deficit would go up from about $600 million in the last fiscal year to just under $1 billion in this fiscal year. There is some reason to believe that last year’s deficit was artificially lowered and that the Treasurer, following the lead of his well-known predecessor, was doing his best to squeeze this year’s estimates below $1 billion. That is fine. We know the arguments about how we are not going out of the country for any borrowing on our behalf; we are simply borrowing from ourselves and all the rest.

9 p.m.

I must say I find it offensive when the handout from the Treasurer’s office reproduced verbatim in the weekly press across the province, as if the local editor had written the story himself, says, “Isn’t it great that there will be no tax increases this year?” and there is not any reference at all to the projected increase in the deficit.

One could not run a used car lot that way except for a short period of time. I am not suggesting that is where the Treasurer learned this trick, because he is not the first one to use it, but I believe it is substantially misleading politically. Is that all right?

An hon. member: Absolutely.

Mr. Nixon: One of the areas I find of substantial concern is the use of a term to refer to deficit. We have heard many euphemisms. Down through the years one of the minister’s predecessors did not like the word “deficit.” I think it was Jim Allan. He used to use the word “shortfall,” and we had shortfalls fur several years.

Then I believe it was Mr. McKeough who realized that people were wising up to “shortfall,” so he started talking about net cash requirements as if for some reason, because it was a net cash requirement, we were not borrowing anything. It somehow seemed to be a good thing to have a net cash requirement. But it took this Treasurer to break all rules and bounds of decency in the use of the English language when he referred to the deficit as a “pause in our deficit reduction strategy.” That has to be the limit.

We know that the government has been fully committed to a balanced budget in 1982. Or was it 1983?

Hon. F. S. Miller: In 1981.

Mr. Nixon: In 1981? Next year?

Now that they have put Darcy McKeough out to grass -- or out to gas, pardon me -- this Treasurer, as smoothly as only he can do it, is talking as follows: “In a year of economic uncertainty, I believe it is appropriate to allow this pause in our deficit reduction strategy.”

That has to be the ultimate in fiscal shenanigans. I think it was at that stage his followers, none of whom is here tonight -- maybe just a couple -- broke into wild applause, thinking that once again the answer to the riddle of the universe had been forthcoming from the Treasurer. I do not know what they are going to use next year, but I would suggest that about the time this government is running out of public esteem and support, it will be running out of euphemisms.

I mentioned in a speech recently, and I want to repeat this part of it, my concern at these mounting deficits. Unfortunately, we have now just passed out of the 10-year spectrum where we can refer to the only surplus we have had in the last 11 years. The last time the budget was under the control of a Premier, other than the present one, was a time under John Robarts when we had a surplus of $100 million.

Since that time we had uniformly large and oppressive inflation-causing deficits. At the same time, the debt for Hydro, for which we are responsible, has been growing. The funded debt now stands at $16.195 billion, excluding Ontario Hydro. The figures for Hydro are not available for this estimated year, but it looks as if the total borrowing on behalf of Hydro, including US borrowing and contingent liabilities, is dose to $12 billion.

The minister smiles because the numbers do not mean any more to him than they do to me, but we are paying, according to his own figures, more than $4 million a day in interest. Every year I have been here, the minister and his predecessors have had one of these innocuous little bills which have allowed the province to go into debt by at least another $1 billion.

It was just a few years ago that the part of the power to borrow which was not used was cancelled. Up until that time, all of these borrowing privileges had been cumulative. I believe it was my erudite colleague, who is no longer a member of the House but is now sitting on the Ontario Municipal Board, who through careful questioning was able to draw out from the then Treasurer the fact that the power to borrow money was cumulative and that there had already been a grant of power of several billion dollars that had not been utilized even at the rate this government goes into debt. It is obviously a matter of grave concern, and the platitudes the minister gives us about debt being good for the province and being stimulative, and that the federal Liberals are even worse, do not cut any ice with us. They may convince their sometime supporters in the New Democratic Party who want bigger deficits.

The whole bunch of them should be in the same bag. They are technocrats. They take the advice of some of the people sitting under the galleries. They say, “If they say it’s okay, it must be okay.”

It is time the Treasurer used his own good sense and started to bring a halt to these increasing deficits and to get back on the rails towards the kind of rational approach to a balanced budget this province needs and will get with a Liberal administration.

Mr. Foulds: Mr. Speaker, I want to make a few points in this debate. My friends on my extreme right, the Social Credit Party of Ontario under the banner of the Liberal Party, have asked me to make my remarks relevant and I will do that. I want to point out strange contradictions, first in the Liberal Party position, and then in the Conservative Party position.

First I will deal with the Liberal Party, because it is the easiest when one talks about contradictions. Over the last number of years, the Liberal Party has talked about the necessity to balance the budget, to bring spending under control and to bring economics down to the level that the taxpayers of the province can understand. I have some sympathy with that viewpoint, but I think we have to recognize, whether we like it or not, that we are in the last part of the 20th century, rather than the first part of the 19th century. It is no longer possible to do a budget or to run the provincial store on the back of an envelope.

There should be some clear statement at some point before the provincial election about whether the Liberal Party wants to cut back on services that are needed in this province in health, education, community and social services, correctional services, et cetera. Are they going to cut back on spending and on taxes? They cannot have it both ways. If they are going to cut back on spending, on borrowing, on intervention in the economy, on taxes, they are going to cut back on services.

If that is the platform they want to run on, then they should be straightforward and clearly enunciate it. But they do not. On the one hand, they tell the Treasurer and they tell us in this party that we like deficits. We do not, but we recognize the realities of finances in the 20th century. On the other hand, they go out to the hustings time and time again speaking about the areas of programs they will expand in. They will give additional loans to farmers and to small businessmen; they will develop programs. They have not, in my time in this House, ever had the courage to tell us which programs they are going to cut back on. I do not think they have even had the courage to say they would cut back on Ontario Place, because they recognize that has some pitfalls for them.

9:10 p.m.

The second area I want to get into is contradictions that I find strange in the government’s own attitude towards intervention. I am pleased that this bill is before us, because I think it is necessary for the government to be able to borrow money. For example, if there were not moneys available to the government we would not be able to spend the moneys we have over the last several weeks in fighting the forest fires in northwestern Ontario. It is obvious that we are going to be overspending our allotted budget in estimates, because it was necessary and vital to the province that we intervene directly. We had to raise money so we would have money available; we had to use our credit to make the expenditures that were necessary to preserve as much of our forestry industry resources as we could.

There was no hesitation on the government’s part to do that. They do not mind intervening and spending government money to preserve that resource. We applaud that. We think that situation was handled expeditiously, but it was handled only because there are certain borrowing powers given to the Treasurer. There are certain understandings about expenditures that can be spent above the allotment that this Legislature may nominally vote provided the supplementary estimates and so on come in later.

What I do not understand is when the government is ready to intervene strongly to help preserve that resource, it is not ready to intervene with expenditures to plan, preserve and use natural resources in the nonrenewable sector, the mining sector. I don’t understand why it is not ready to intervene in financial and legislative ways to integrate, for example, our iron ore industry with our steel production industry. That might have preserved some jobs in the iron ore mines at Caland and Steep Rock, and it might have encouraged the development of the rich ore bodies at Bending Lake and Lake St. Joseph in order to supply the Ontario steel mills. That kind of integration of our economy would result in practical steps to maintain jobs in northern Ontario.

I would like to see a commitment from the Treasurer that some of the interim moneys he is come to borrow under the authority of this bill will be used to set up a northern Ontario development fund. Such a fund could deal specifically, pragmatically and practically with the problem of one-industry towns in northern Ontario, and particularly at this crucial stage with the one-industry mining towns.

Hon. F. S. Miller: Mr. Speaker, the bill tonight is giving me the authority to borrow up to $1.8 billion. That does not imply, as several of the speakers have attempted to conclude, that is the amount of money we need to borrow in the year. It is simply an authority. I am quite happy to delve into that.

Included in that $1.8 billion is the $500 million flowing directly through to Hydro.

Mr. Peterson: It was our idea. We take credit for it.

Hon. F. S. Miller: Of course they would. That is the result of the good management we predicted when, in 1976, we started on the road of constraint to reduce the cash requirements of this province year after year.

The bill runs for a period of more than 12 months. I am sure my honourable friends know that. It runs until September 30, 1981, if I am not wrong, because over the summer months when the Legislature is not sitting there often is a need to borrow the funds as they become available from the various pension funds. The pension funds are the source of these funds in the main.

The interesting thing to me is that a great deal has been made about the nominal amount of the debt of the province. Debt, whether it is for a person purchasing a home or for a province, is usually measured in terms of income. When we talk about the problems of home owners who have trouble with mortgages today, a common threshold that has been used by my friends in the opposition, and sometimes by the experts within the industry itself, has been something like 30 per cent of gross family income. That same kind of comparison should and could be made for Ontario.

One of the interesting facts is that back in the 1950s, in some of the periods that some members have alluded to, one would find that the debt of the province actually was greater in some of those very good years. For example, the debt-to-revenue in the 1950s was about 150 per cent. The debt-to-revenue ratio now is about 100 per cent. In other words, the debt is roughly equal to one year’s revenue, and that is an interesting fact.

If one takes a look at a table on page 28 of my budget paper, one could look at the tables there and see that the net cash requirements as a per cent of gross provincial product for the last five years were at a high of 2.1 per cent in 1977 and at a low of 0.7 per cent in the year just past or just a third the amount they were the year before I became Treasurer. That is another interesting fact.

Mr. Peterson: What about the cumulative debt?

Hon. F. S. Miller: I just gave the cumulative debt when I said it is 100 per cent of annual income and a few years ago it was 150 per cent. I think those are important factors behind the fact that, in terms of the revenue of the province, the debt today is lower than it was back in the days when no one in this House would even have dreamed of criticizing the spending power.

One of the problems we have in a world of rapid inflation is dealing with nominal figures instead of real figures, because nominal figures change so quickly and real figures, or real dollars, are affected by inflation.

Mr. Laughren: What is a nominal dollar?

Hon. F. S. Miller: One talks about nominal dollars. A dollar is a dollar is a dollar; it is just a number. But in real dollars, the member knows what I am talking about. If he does not, he should not be my critic.

Mr. Peterson: As a matter of fact, he is qualified to be your critic.

Hon. F. S. Miller: Certainly he matches the member for London Centre.

Mr. Laughren: On a point of privilege, Mr. Speaker --

The Acting Speaker: We will hear the point of privilege.

Mr. Laughren: I have a feeling I have been maligned. Could the Treasurer tell us what the difference is between a constant dollar and a nominal dollar?

Hon. F. S. Miller: I said a real dollar.

The Acting Speaker: That doesn’t amount to a point of privilege. The Treasurer may take on the job of trying to explain.

Hon. F. S. Miller: Nominal dollars are simply -- I have a $16-billion or $17.121-billion budget for spending this year. That is a number; nominal, from the Latin.

Mr. Laughren: Numero.

Hon. F. S. Miller: Numero uno is me; nominal is my friend.

Real dollars are those dollars in constant terms after allowing for inflation. In fact, if members look through my budgets for the last three years, spending dropped in real dollars, but the very fact that we have inflation makes each year look successively larger than the years before.

Net cash requirements -- those members who try to make me look as if I am having a bad year have a great love of looking back to last year and saying I am spending 44 per cent more debt this year than last year. The truth is, if one looks at the figures, I had a net cash requirement this year of $204 million less than I predicted for last year. The fact is, I am predicting fewer dollars this year in cash requirement than I predicted last year.

Mr. Nixon: You were very wrong last year.

9:20 p.m.

Hon. F. S. Miller: I was very wrong last year, thanks to both good management and good luck, and I happen to accept both as being part of it. The good luck was the fact that the Ontario economy remained remarkably buoyant thanks to confidence in a government that has shown it can run this province as opposed to governments that have shown they cannot run the country.

Mr. Peterson: His projections, no matter what he predicts, will never be disappointed -- Murphy’s Law of accounting.

Hon. F. S. Miller: The more the member talks, the more I know what I am saying hurts.

One of the other things that comes up in my table that the members should look at -- again, these chaps are great at telling me how idiotic I am, how incompetent I am, how short I am -- I have never heard a speech where my height has not been alluded to, or the NDP critic’s.

Mr. Peterson: On a point of order, Mr. Speaker: I might say the Treasurer is small of spirit, small of vision, small of judgement, but I would never refer to his diminutive size.

Hon. F. S. Miller: The member used those very words; in fact, he used them earlier tonight. I think my colleague in the New Democratic Party would be the first to agree with me.

The Acting Speaker: If the member who raised the point of order wishes to reply, he may.

Interjection.

Hon. F. S. Miller: I have never worried about being short. I have never had the problem of getting a message from my brains to my mouth. Some other people appear to have that problem.

The Acting Speaker: Will the Treasurer return to the principle of Bill 49?

Hon. F. S. Miller: He has been heckling me about my size for two years now. He can’t find anything else to talk about.

One of the things that I would point out is contained on page eight of my budget paper C. If one looks at provincial spending across Canada province by province where one includes provincial and municipal spending, because we consider them to be one and the same, one will find that Ontario has the lowest percentage spending of gross provincial product in Canada. Ontario has the lowest spending for government purposes in Canada.

That means, contrary to what the member would interpret it as meaning, that we are doing one of the best jobs of gaining value for the dollar spent. In Prince Edward Island, 51 per cent of the gross domestic product is spent running the province and its municipalities. In Ontario, 25.2 per cent is spent for that. Even Alberta, that province all the members opposite talk about as being great, spends 27 per cent. I would like to point that out, because it is one of those points that is often missed in the discussions.

The member talked about all the changes he would make if he were here with the majority. When the member has the next opportunity to speak on interim supply or my budget, I hope he will clearly spell those out before he is ever out in the hustings. I would dearly like to know what changes the member would make, since currently I understand I have difficulty bringing in my pensioner credit bill because he is going to oppose it; the member is going to say I’m not giving enough on one hand and giving too much on the other.

Mr. Peterson: It is stupidity. It is unfair and it is robbing from the poor and giving to the rich. It is ill conceived and just plain dumb.

Hon. F. S. Miller: I hope the member will say that to the senior citizens who turn out to his meetings. I sincerely do. I think it will do a great deal for the member in his riding. I think he will find that he has not interpreted the reaction of the average senior citizen in Ontario.

Mr. Peterson: The Treasurer is probably good at signing cheques.

Hon. F. S. Miller: Jealousy is a great thing.

Mr. Conway: I will vote for that tie any day of the week.

Hon. F. S. Miller: When I went out running tonight, I changed ties; that’s about all I did.

A question was asked of me by the member for Oriole (Mr. Williams) about the interest rate paid for money. While the bill allows me to borrow money from a number of sources, it should be pointed out that at least one of them has not been used for some time, and that is the Ontario Municipal Employees Retirement System Fund.

To counter some of the charges made by my colleague from London Centre (Mr. Peterson), I believe, for example, that we do pay fair rates for the moneys borrowed from the pension plans. On Canada Pension Plan borrowings, in any given month, the amount we pay is the average yield on federal bonds with 20 or more years to maturity during the first three days of the previous month. In other worth, we use a current figure.

When interest rates are going up, we are often borrowing historically at slightly lower than immediate rate; when interest rates are dropping, we are sometimes paying more than the immediate rates. Those rates on the CPP bonds are probably the best rates. I have all kinds of tables to show what the rates were on those versus, say, Hydro bonds which were issued on the marketplace. The difference varies all the way from one per cent to 0.25 per cent

Mr. Peterson: One billion, one hundred and thirty million dollars’ worth.

Hon. F. S. Miller: It is interesting that the member should criticize me for borrowing money at the best possible rate the province can get.

Mr. Peterson: The taxpayers are going to have to pay for it.

Hon. F. S. Miller: The taxpayers are going to pay for it one way or another, are they not? There are guaranteed benefits in those pension plans. They are not related to the interest rate I pay. The member knows that, does he not?

Mr. Peterson: The Treasurer is stealing from future taxpayers.

Hon. F. S. Miller: My friend, that is the subject of a text the royal commission is looking into. I have been asked to await it before making too much comment.

Mr. Peterson: The Treasurer has been waiting for it for two years, and he does not know what is going on.

Hon. F. S. Miller: I know a fair amount about what is going on. The interest rate we pay to the Teachers’ Superannuation Fund is the interest rate on debentures issued each year by Ontario or Ontario-guaranteed issues made in Canada during the previous fiscal year. The interest rate paid on Public Service Superannuation Fund borrowings is the interest rate paid on the average of Ontario and Ontario-guaranteed issues for the year the credit is made. So we are not robbing the pension funds. In fact, it is our intention to stop borrowing those moneys as soon as we can.

Mr. Peterson: The Treasurer’s budget paper says he is paying low market rates.

Hon. F. S. Miller: I have here somewhere all the rates paid by Ontario versus the rates paid by, say, Quebec or British Columbia or New Brunswick. If we rate Ontario in terms of the cost of money purchased or borrowed in the open market, we currently have the lowest charge or interest rate in Canada for anybody actually borrowing in the marketplace, outside of the government of Canada. I am talking of the provinces. That is, for instance, where we go out and borrow it on behalf of Hydro. Our credit rating, which has always been a triple A since I have been around, indicates that borrowers trust Ontario and they think of it as a good place to go.

I would like to correct one misapprehension the member for Brant-Oxford-Norfolk (Mr. Nixon) touched upon. He alluded to some kind of weekly newspaper article that was written by my staff. I had no staff writing any articles for weekly newspapers.

Mr. Nixon: It was in that summary of the budget the minister mailed out.

Hon. F. S. Miller: There was some predigested material sent out, but not by my ministry.

Mr. Nixon: Somebody paid for it.

Hon. F. S. Miller: It was not in my ministry budget.

Mr. Peterson: Of course it was.

Hon. F. S. Miller: It was not. There were press releases. That is not what the member talked about. He talked about an article being written -- his words were, if I can recall them, “as if the local editor himself had written it.” My press releases were not written in that way. They were summaries -- I can gladly give him one -- on the salient points in the budget. There were, I believe, and there often are, summary stories such as CP writes for the daily papers, sent out to weeklies, but my ministry did not write any of those.

Mr. Nixon: If that is the case, I apologize to the Treasurer, because these stories appear in the weeklies and they do not get CP or any kind of wire service. They must have arrived from some source, lifted holus-bolus and plunked into the weekly. I would be glad to find out where they come from. If they come from the government caucus office, I will find out about that and let the Treasurer know.

Hon. F. S. Miller: I just wanted to point out they were not from my ministry. If I turn out to be wrong, I too will apologize.

Mr. Nixon: All right. I accept that the minister is several shades whiter than the driven snow.

Hon. F. S. Miller: In Muskoka. Slightly acidic, but otherwise fine.

The member for Port Arthur (Mr. Foulds) talked about the regional priority moneys needed to invest in the north. I should point out to him that the moneys this government invests in regional priorities in the north are probably a function of 10 to 15 times more than for the whole of southern Ontario.

9:30 p.m.

I think my budget for regional priorities is in the range of $5 million for southern Ontario and in the range of $60 million for northern Ontario for the kind of help the member was referring to. I would be glad to research and give him the actual figures. That indicates, at least in general order of magnitude, the importance we place on trying to improve the conditions in the lesser developed parts of Ontario. It is handled through the Ministry of Northern Affairs in the case of northern Ontario and through my ministry in the case of southern Ontario.

On a per person basis, the order of magnitude is far greater than that. It is simply a recognition that municipalities in the north have serious problems. There is a need to help with infrastructure and with the design of anything that will help them get industry.

With regard to the other remarks by the official critic of the New Democratic Party, I would suggest the discussion he brought forward tonight on mining machinery and on other things is one we have discussed a number of times. In all sincerity, I have nothing more to add tonight to what I have added before. I do not add things that suit the member. The very reason we have different parties in this House is we have different beliefs in what works.

I would only say to the member that in the last year through a number of mechanisms, one of which was discussed tonight, the small business development corporation, we have been doing our best to stimulate more primary and secondary investment in the country to tackle the problems he talks about. I do worry about the $16-billion finished- product deficit in trade. I do worry about the importation of mining machinery. I am just not satisfied the member’s techniques are the right ones. With that, I hope second reading of this bill will be accepted.

Motion agreed to.

Third reading also agreed to on motion.

ONTARIO MINERAL EXPLORATION PROGRAM ACT

Hon. F. S. Miller moved second reading of Bill 50, An Act to provide Incentives for the Exploration of Mineral Resources in Ontario.

Hon. F. S. Miller: Mr. Speaker, the purposes of this bill were pretty thoroughly described in my budget speech. I am sure my critics have had an opportunity to read the bill. I hope they received copies of some technical amendments I propose to make in committee. I asked that those be sent to them so that they could have a chance to read them.

May I just confirm that? Did either of my critics get the technical amendments?

Mr. T. P. Reid: No.

Hon. F. S. Miller: Perhaps the member for London Centre (Mr. Peterson) got them. I understood they were sent this afternoon. Did they get any?

Mr. Laughren: No.

Hon. F. S. Miller: They are not changing in any way the purpose or intent of the bill. I will see the critics get copies almost at once. They deal with comments that have been received from a number of lawyers and other people who have looked at the bill since we printed it, following the budget, and who have had an opportunity to look at some of the relationships between companies as defined and the words “affiliate,” “associate,” and so on. We have inserted a few words such as “affiliate” and we have defined “affiliate.” We have also added the words “in Ontario” in at least one case so we can define companies that are not eligible versus companies that are eligible. They are amendments of that nature.

I trust there is a copy for the NDP going over there also. Rather than discuss the bill at any length, I would be pleased to let my critics criticize it.

Mr. T. P. Reid: Mr. Speaker, one always finds it difficult to criticize the amiable Treasurer. That is how he gets away with murder in this Legislature. As usual, our criticism will be of a constructive nature.

The Treasurer has indicated there is a fairly long explanation in his budget dealing with the Ontario Mineral Exploration Program which is contained in Bill 50. I find it difficult to argue with the principle of the bill, which provides for a 25 per cent tax credit or rebate to those who are engaged in mining exploration, but I have something to say about that. I would like to take a minute or two to put Bill 50 into the perspective of the mining industry in Ontario at the present time.

We haven’t had a new mine open in the province in a number of years. We have a great number of ore bodies that have been discovered where we know what is there. We know there is iron ore at Bending Lake. We know there is iron ore at Lake St. Joseph. We know of some other nickel deposits and so on across the province. Obviously these mines are not at the moment being developed in present-day circumstances, partly because of markets and partly because of the type of ore that exists in those mines.

This bill, presumably, is to spur mining exploration in Ontario. It is ironic that the Treasurer or the government would bring in such a bill when they themselves almost completely and effectively destroyed the junior mining development companies in the province some five years ago when the Ontario Securities Commission brought in regulations that effectively brought a halt to small mining exploration companies and small mining development companies. Those problems still exist because there isn’t any incentive or any ability for a small mining exploration company or individual to bring a mine that they might find into production or into preproduction because of the actions of this government a few years ago and its reluctance to do anything about the situation that it created.

It is interesting, as one reads the bill, that credit unions can be eligible for this 25 per cent rebate. Pension funds that have 10 per cent of their contributors in Ontario can participate. Small business can participate and a whole raft of people can participate. The bill does provide for some exemptions. Those exemptions are companies or individuals who are already involved in the active production of mining in Ontario.

9:40 p.m.

There is quite a dichotomy there. I hope the minister will explain just why that exemption is in the bill, because it is obviously part and parcel and tied strongly to the main provision of the bill, which is to provide a 25 per cent tax credit or write-off or rebate. That effectively means anybody spending money on exploration in the province is spending a 75-cent dollar, because they will be getting 25 cents back.

It is ironic, because the government has already hamstrung the small independent prospector, the small junior mining company that brought 66 2/3 per cent of the mines in Ontario into production. I am presuming the gist of the minister’s idea behind excluding active mining development or producing mines or people involved in producing mines is to turn the clock back and say, “You small individual prospectors, or you fellows who go out and stake, you are going to be given an opportunity for a tax break from the province equal to 25 per cent of your investment to continue to do that.” At the same time they said, and said most baldly, that under our securities legislation in Ontario they are not going to be able to bring that mine to fruition, because there is no way they can raise the funds under our laws and regulations in the province to be a producing mine.

In those cases what happens is that the big companies, Falconbridge Copper Limited, Inco Limited, Noranda Mines Limited and all of the rest of them are sitting there waiting for the claims that have been staked and had some work done on them by individual prospectors or small junior mining companies to expire. All they have to do is sit back and wait like vultures to pick up these mining claims, because there is no way under the present legislation and regulations in the province that individuals and small corporations can raise the funds to bring a mine into production. Let’s go back even one step further. We have had a number of questions and I have been in touch with the Ministry of Natural Resources, with the minister, with almost everybody in the government about the situation in Atikokan of the Caland Ore Company Limited shutting down for a number of reasons. We read in the paper that an iron ore company in Quebec has laid off 500 or 600 employees and the iron ore industry generally is in bad shape because of the economic situation in North America, the decline in the number of cars being built and the general economic downturn.

What are we doing about all of this? When we don’t have markets and we have proven ore properties the government is bringing in a bill which says: “Go out and find some more and we will give you a 25 per cent rebate. If you are a small individual or individual company you won’t be able to develop them if you do find them, because our laws will not allow you to raise money in the province to develop the ore body. Secondly, of course, we don’t have any market.” I presume this is part of the government’s attempt to look as if it is busy and as if it is providing some kind of incentive.

This is a problem that we have across Canada. I have already referred to iron ore mines laying people off in my constituency, across northern Ontario, around Capreol, in Quebec and in Newfoundland. It is obviously a problem we have to deal with not only in Ontario but across Canada with the assistance and direction of the federal government.

I know the Treasurer listens carefully to all the questions I ask in the Legislature and he knows I have raised this matter as late as this afternoon with the Minister of Natural Resources, who has finally indicated he intends to meet with his federal counterpart to discuss the whole matter of the mining situation as it relates not only to Ontario but also to Canada.

One can hardly quarrel with the intent or the principle of the bill, although I would say to the Treasurer quite frankly I think it is going to have little effect. I do not think it is sufficient. I think with the other rules and regulations that the government has in place it is not going to overcome those obstacles. To the old type of prospector who used to go out and prospect, perhaps on the weekends or do it as a long-term proposition, this bill will be of little value. On the other hand, how can one argue with it? It is sort of like Mother’s chicken soup, I guess; it cannot hurt.

There are a couple of other things, one a long-standing problem that I have which relates to section 13 of the bill, on page 10. It relates to that general catch-all provision allowing the minister to make regulations and the Lieutenant Governor in Council to make regulations, and some of these regulations bother me a great deal. I think it gives too much discretion to the minister as to who is going to be eligible under this act.

I would hope the Legislature would be able to find out who receives this 25 per cent rebate. Much the same as my original suggestion which was accepted by the Minister of Natural Resources, that the forestry agreements with the pulp and paper companies be tabled in the Legislature after they were signed, I would like to know who is getting these kinds of rebates. Quite frankly, it is another tool that the government has to perhaps reward its friends or reward its enemies, and I am not very happy in giving that kind of discretion to the minister.

We have already found out in the Employment Development Fund that when one asked what the criteria were for these loans and grants they said it depends on who you are, what you are doing and whether Bill Kelly has been to see you and a whole range of --

Hon. F. S. Miller: I think the member is starting to cast aspersions very much along the lines of those of the member for High Park-Swansea (Mr. Ziemba) and I think he should be careful of those kinds of comments, Mr. Speaker. The fact is, if he wants to check where my Employment Development Fund money is going, most of it is going into the area held by Liberal members, areas like Essex and Windsor, where help is needed.

Mr. T. P. Reid: I object most strongly to my name being used in the same sentence as the member for High Park-Swansea. I was merely stating --

Interjections.

Mr. T. P. Reid: Would you yell one at a time because I --

Mr. Acting Speaker: Would the member for Rainy River please direct his comments to the subject matter of the bill?

Mr. T. P. Reid: I was merely stating, Mr. Speaker, that I am not satisfied that the criteria are spelled out as clearly and correctly as they should be, as they were in the other program. When we asked the Minister of Industry and Tourism (Mr. Grossman) what are the criteria, what does one have to do to apply, what forms does one have to fill out, the answer was, “Come into my office and we will talk about it.” I do not think that is sufficient and I do not really enjoy giving, under section 13, this kind of expansive discretionary power to either a minister or to the Lieutenant Governor in Council.

If one looks at the bill, especially at the latter sections, it’s almost frightening to note the kinds of powers we are giving the government these days. Subsections 12(2), (3) and (4) are about as authoritarian as we will find in any legislation we pass here.

9:50 p.m.

As I say, the Liberal Party will support the bill. I do not think, quite frankly, it is going to have a great impact on mineral exploration in the province at this time. I would have hoped this kind of legislation would have been part of a larger mineral policy and natural resource policy for the province.

I am thinking in terms of the whole tax system in Ontario, in terms of how we are going to use these resources, how it is going to fit in in an overall northern development scheme -- most of these mines are in northern Ontario -- and how it would fit, hopefully, into some large parameters which we might call an Ontario industrial strategy. This could include the production of mining equipment and machinery in the province, expanded milling and processing, the use of our minerals in our steel mills and a whole range of things.

This kind of piecemeal approach is not going to be very satisfactory to providing jobs or, quite frankly, in finding any more mines that are going to open in the province. I think it is regrettable that the Treasurer and his colleagues, the Minister of Natural Resources (Mr. Auld) and the Minister of Northern Affairs (Mr. Bernier) and their staffs -- because they certainly have the people and the backup over there -- could not have come out with something a little more comprehensive and a little more realistic than this one small token bill. I think this will have only negligible effect on producing any new mines in Ontario at this time.

In conclusion, Mr. Speaker, I would hope the minister would indicate what the reasons are for exempting those people under section 2 of the act -- why they are not being able to take part in this program, small as it is.

Mr. Laughren: Mr. Speaker, we are going to support this bill, although my colleagues are having second thoughts. We do feel it is not the answer to a major program to explore and develop new minerals in Ontario.

I draw a parallel between this bill and the Treasurer’s bill last year creating small business development corporations. That bill did not deal with the real problems of the small business community and this one does not deal with the problems of mining exploration and development in the province.

When the Treasurer brought in his exemption on the sales tax for automobiles, it came as a result of jogging past the used car lot. This seems to me to be a bill that came as a result of having breakfast with a prospector and developer. It occurred to him that, what the hell, he could blow $4 million. That amount in itself, given the enormous potential for resource development in a province the size of Ontario, is a giveaway as to how serious the program is. It really is not very much money.

I do support the parts of the bill which indicate that companies whose major business is in industrial mining -- the Falconbridges and Incos of this world -- are not eligible for this program. I think that is as it should be. Perhaps the Treasurer is trying to relive the past and trying to stimulate the old idea of prospector grubstaking. What he is really doing is reviving the grubstaking theory, where he is helping people outfit themselves for a couple of weeks in the bush trying to stake out a claim. Most of us understand that those days are gone and that the Treasurer is catering to his fetish for the small business idea. That is where it is still at. He would very much like to turn the clock back, as my colleague from Rainy River (Mr. T. P. Reid) said, and have the small prospectors go out there and discover big ore bodies. That is not happening very much any more.

I would like to be very specific about the number of new mines being discovered or opened in Ontario. Can the Treasurer tell us when the last one was? I have lost track, quite frankly, of what year the last new mine opened in Ontario. I would be interested to know.

Mr. Peterson: You probably cannot count.

Mr. Laughren: Who cannot?

Mr. Peterson: You cannot.

Mr. Laughren: I do not want to count them. I want the Treasurer to count them and tell me.

The real problem is not whether the Treasurer is prepared to grubstake a prospector. The mineral policy sector of the federal Department of Energy, Mines and Resources put out a report called, A Regional Profile of 1979. It talks about the iron ore industry and says this:

“Two long-established iron mines closed in 1978. At Atikokan, Steep Rock Iron Mines Limited laid off 463 people, closing an operation that had been brought on stream during World War II. The National Steel Corporation of Canada Limited closed its Moose Mountain mine at Capreol in June, affecting 260 jobs. In November 1979, Caland Ore Company Limited of Atikokan laid off 185 of its 450-man work force. Kerr Addison Mines Limited is in the process of closing its Agnew Lake uranium property near Espanola. About 435 workers will be affected.”

That is the summary from the federal Department of Energy, Mines and Resources. What it is saying is that it is not a problem of the prospectors going out and discovering new mines so much as the lack of any kind of resource policy in Ontario. There is a gentleman by the name of W. H. Laughlin in the resources and development division of the federal Department of Energy, Mines and Resources. It occurs to me that the more I read government reports the more I am discovering that the federal government is inclined to bring out reports that tell it like it is as it affects other jurisdictions.

Mr. T. P. Reid: Not their own.

Mr. Laughren: No, but they are very quick to tell us how they view the real truths about Inco pollution, for example, or the real truths about iron ore layoffs or resource policies, but not their own policies. Increasingly, many of us are looking to federal government reports to tell us what is happening in Ontario, because this government is too defensive to do it. This is what Mr. Laughlin noted when he was talking about exploration statistics: “They are too late to be useful or too ill-defined and incomplete to represent very much or too contradictory to demand our respect and confidence.”

He largely blamed the attitude of the mining companies for the problem on the grounds they seemed to expect that governments “will initiate the reasons and determine the methods whereby numbers will be collected while they tend to respond with indifference and some reluctance.” He went on to say: “Surely the industry must take the initiative. It must determine what sort of nontechnical numbers best measure the activities that led to mineral discoveries and it must suggest a method by which these numbers can be compiled quickly. Therefore, the reasons for the delays in the development of new deposits must be sought among low world demand -- and consequent low prices for metals -- changes and instability in Canadian taxation laws during the 1970s; increases in production costs and interest rates, while prices did not keep pace; more stringent and costly environmental regulations and a general uncertainty created by all these changes.”

What he is saying is the answer is not to hand out the odd smattering of incentives to prospectors, but it is a much more fundamental problem than that. There really is an analogy with the automobile sector. The Treasurer is going to solve the problems in the auto sector, which are based on the recession in the United States, by removing the sales tax from automobiles in Ontario. To think that is a solution is plainly ridiculous. The Treasurer is forever tampering with the system when he should be doing something very fundamental with it.

10 p.m.

I was looking up some of the Ontario figures for exploration in recent years, and these are in constant dollars. Does the Treasurer understand what constant dollars are?

Hon. F. S. Miller: Are they different from nominal ones?

Mr. Laughren: There is no comparison. Constant dollars are the ones that do not change after one has taken away inflation. They are constant dollars.

Hon. F. S. Miller: I am still successful as a teacher. I still have a future as a teacher if the member learns after one lesson.

Mr. Laughren: I suspect the minister’s past is more spectacular than his future. He may have peaked early in life. I hear that back in Muskoka they refer to him as Edsel Miller.

Mr. Hennessy: One-punch Miller.

Mr. Laughren: No, it is Edsel Miller, soon to be Chrysler Miller.

The exploration figures for Ontario are very strange. In 1972 -- these are constant dollars -- $14.5 million in exploration expenditures; in 1973, $16.3 million; in 1974, $15.1 million; in 1975, $15.7 million; in 1976, $15.3 million; in 1977, $16.5 million and in 1978 -- this is a preliminary, estimated figure -- $13.7 million. So there has not been an adequate expansion in the amount of money being spent on exploration in Ontario. If one were to compare those figures with the exploration figures for Saskatchewan, it is unbelievable what is happening out there.

It belies the old argument that the Treasurer and his colleagues are always putting forth, that we have to create a free enterprise environment in the province so that the private sector will come in and explore and develop. Saskatchewan has succeeded in creating an acceptable environment for exploration and development, working all the time within a mixed economic system. They have been very successful at it.

When we in this party talk about the need for a crown corporation to explore and develop in Ontario rather than leaving it to the whims of the private sector, we are very serious about it. We are very serious about the resource sector being in the public sector, and the people of Ontario have come to the conclusion as well that the private sector is not doing an adequate job.

Mr. T. P. Reid: But they did not say exactly what the member thinks they said.

Mr. Laughren: Let me be precise about what they said. Twenty-seven per cent of the people of Ontario who were polled said they thought the private sector alone should own the mining resources of Ontario. Everybody else said there must be a mix of either federally and the private sector, provincially and the private sector, or solely the public sector. We have a situation where only 27 per cent say the private sector should continue to look after the resources of Ontario and the rest say it must be a joint venture. That would start with the exploration and development and move right through the entire resource sector.

We in this party do not say that simply because it makes us feel good. We say it because it stands on social and economic grounds. That is why we say it. The Treasurer and the Premier can sit there and defend the private sector, never putting forth adequate arguments. They think they do not have to. They think all they have to do is say: “No, that is our belief. Do not give us any of your socialism.”

I would ask the Treasurer to think about it seriously. We bring in about two per cent of the value of production in the form of revenues to Ontario from our resources. Saskatchewan, in mineral resources alone, not oil and gas, brings in 13 per cent. The Treasurer surely cannot be --

Mr. T. P. Reid: But they do not have the manufacturing capability.

Mr. Laughren: I am glad the member mentioned that. Does Ontario have the manufacturing? Our manufacturing is in a state of decline. We are going through a deindustrialization process right now because of the mismanagement of the Ontario economy by this government. Saskatchewan has decided it wants to develop its province in a certain way. I am not suggesting that we are a carbon copy of Saskatchewan; I am suggesting we haven’t made that decision of how we want Ontario to develop. The Treasurer is just sitting back and letting it happen and that’s fundamentally wrong. It’s the same with mining and exploration. This does not change anything; all it does is say, “Look, you have been doing your exploration and development, but not as much as we would like to see you do, so we are going to give you a little incentive grant here.” That’s really all it boils down to.

We say that having the private sector do the exploration and development simply hasn’t worked. It has not brought adequate new mines on stream. It has not enhanced the revenues of the province of Ontario. The whole private sector in resources has not looked after the environment the way it should. Regional development is in a state of chaos in the province. We haven’t processed here and we haven’t bought mining machinery here. We have left it all up to the private sector and it has let us down.

The minister might shake her head, but she should tell me what the private sector has done for us in the resource field. The Provincial Secretary for Social Development (Mrs. Birch) is always shaking her head whenever someone says, “It is not the best of all possible worlds.” The Pollyanna of the Tory party should understand that it is not the best of all possible worlds. It could be a lot better. I’m sure from the place she is sitting and the lifestyle she leads it is the best of all possible worlds, but I want to tell her that is not true for a lot of people in Ontario. She should be ashamed of the way her government has let the resource sector operate in the province. It is fundamentally wrong. She sits there surrounded by a fog of smug and continues to say, “Things must remain the way they are now.” I have seen it for the eight and a half years I have been here.

Hon. Mrs. Birch: I have seen some things too.

Mr. Laughren: Yes, I have seen it too. As every year goes by the minister sitting over there wears a little better clothes and gets smugger every year; that’s exactly what happens.

Mr. Speaker: What has that got to do with mining?

Mr. Laughren: Nothing.

Mr. Speaker: That’s right.

Mr. Laughren: Mr. Speaker, I will get back to the bill. We are going to support this bill because we hope it will increase the smattering of exploration, but we know it really isn’t the answer.

Mr. Roy: Mr. Speaker, I would like to rise on a point of privilege. I think these matters should be raised at the earliest opportunity.

I was sitting in my office going through my work and I received some very important correspondence from my riding, from the student council of Algonquin College, dealing with a right of way going through Algonquin. They are very annoyed about this and they are writing letters to all politicians. Among the people they wrote were the Minister of Education (Miss Stephenson), Minister of Housing (Mr. Bennett), leader of the Liberal Party of Ontario (Mr. S. Smith), and then to “Albert Roy, Leader of the NDP in Ontario.”

Mr. Speaker, what an insult. I don’t mind being insulted, but I wanted to correct the record to make sure that these people know what a contribution that leader has been (Smith), and then to “Albert Roy, leader of the NDP,” not Albert Roy.

Mr. Laughren: On a point of privilege, Mr. Speaker, I want to make it clear that the NDP wouldn’t accept a Liberal, period, but a Liberal reject, never.

Mr. Hennessy: It is all right?

Mr. Warner: Thank you, Mr. Speaker, and to the fighter from Thunder Bay, thank you as well.

As our critic and the real Treasurer of Ontario has said, we will give grudging approval to this bill. I think the Treasurer knows full well that he is a party to a second choice. We have the opportunity in Ontario to develop our natural resources for the benefit of all the people in the province. He should do that and he chooses not to, and frankly I don’t understand that.

10:10 p.m.

The majority of the people in the province would like to see the government take a firm stand to bring the natural resources under the public ownership of the people of Ontario. He knows that is in the best interests of the people. Why shouldn’t the people of this province own their own resources? Why should they be squandered as this government has done for 37 years?

Mr. Speaker: The honourable member is talking about something that is not in the bill.

Mr. Warner: Oh, Mr. Speaker, with respect, you have cleverly hit on the --

Mr. Speaker: I say to the member find it in this bill. He is talking about something that clearly is not in this bill. He should talk about something that is in the bill.

Mr. Warner: It should be introduced into the bill, I know that. There is nothing more essential in this province to the economic wellbeing of this province than the public ownership of our natural resources. The Speaker knows that and I know that.

Mr. Speaker: Order. If the member wants to get back to the bill I will hear him. Otherwise I will call on another member.

Mr. Warner: We talk about an incentive for the exploration of mineral resources, right?

Mr. Hennessy: Right.

Mr. Warner: I am saying, Mr. Speaker, the people of Ontario should have the proper incentive. Do members know what the incentive is? Would members like each of our children to have free dental care? Would they? Then make sure that the natural resources come under --

Mr. Speaker: Order. I am going to caution the honourable member only once more. If he wants to speak to the principle of the bill I will hear him. Otherwise I will call on another member.

Mr. Warner: I guess, Mr. Speaker, it depends on our view of what the incentive is. The bill deals with the incentive for exploration. I am saying the government is misguided. The proper incentive for the exploration of our resources is to provide us with the funds to provide the social programs. We can’t do it any other way. I think there is very little disagreement in this chamber that we would like to see a proper dental program in Ontario.

Mr. Speaker: Order. Would the honourable member take his seat? Is there any other member who wishes to speak to Bill 50?

Hon. F. S. Miller: Mr. Speaker, I believe I have two minutes left before the vote. The member for Rainy River asked why we excluded, in the sections of the bill, operating mines from having the 25 per cent grant. The answer is simple. Operating mines have the ability to write off the exploration expense through the tax system. The prospectors who did not have any income have had no way of minimizing tax payable, therefore we took the grant route. That was the answer basically to his question. In effect, the benefit is there for both types of operation. In one case it is through the tax system; in the other case it is through the grant system.

When he told me about the negligible effect this will have I will repeat the comments I made last year for the small business development corporations, because he reminded me of the member for London Centre (Mr. Peterson), who told me last year, and I have all his words here, how the SBDC grant program would fall fiat on its face. A year later we have 50 or 60 of them. I could be wrong. I simply think --

Mr. T. P. Reid: Does the minister think there will be more than $15 million spent on exploration this year?

Hon. F. S. Miller: I don’t know. I have never pretended to know. I only suggest to the member that it is worth trying. I also suggest to him that --

Mr. T. P. Reid: Would the member accept a question? A very short question?

Hon. F. S. Miller: I thought we were past that point, but I would gladly accept. I have never refused a question from him.

Mr. T. P. Reid: In the Treasurer’s budget last year he said there would be an economic paper or a financial background paper of any costs associated with any program that would come in as a result of legislation. Does the minister have that for this bill?

Hon. F. S. Miller: No.

The point the member made about the Ontario Securities Commission and the morass of regulations is one I have sympathized with before when I was Minister of Natural Resources. We have had two or three years of fairly intensive work on that. I was glad to see the minister for consumer relations (Mr. Drea) back on April 14 took another step in attempting to clear up the regulations to increase the chances of success for junior mining companies.

Mr. T. P. Reid: They have all gone to Vancouver.

Hon. F. S. Miller: The fact that some relatively rich deposits are being found in other provinces has accounted for the success my friend from Nickel Belt keeps on claiming for Saskatchewan. If we found a pool of oil in Ontario we would look tremendously successful, too.

Interjections.

Mr. Laughren: A point of privilege, Mr. Speaker: He is distorting what I said. I very carefully said it was the mineral sector, excluding oil and gas.

Mr. Speaker: There was no privilege --

Hon. F. S. Miller: All right. The fact remains the member also used percentages; 13 per cent versus two per cent. When one has a very large resource or a large diversified economy, percentages are much lower for any one sector.

The member talked a lot about mine closings. I point out to him we still have many kinds of ores for which there are markets. He specifically named mostly iron ore, which is in trouble. I would suggest there are lots of other ores in the province that can be usefully found and developed. I think we should do what we can in this way to stimulate that development through the location of reserves and the hope that we will see more gold mines, whatever else we may find, nickel, copper, zinc, lead, whatever is in demand, so that we have a future assured supply of mineable reserves in this province. That is the purpose of this bill.

Motion agreed to.

Ordered for committee of the whole House.

CITY OF BRANTFORD ACT (CONCLUDED)

The House divided on Mr. Makarchuk’s motion for second reading of Bill Pr26, which was negatived on the following vote:

Ayes

Auld, Bounsall, Breaugh, Brunelle, Bryden, Cassidy, Charlton, Cooke, Cureatz, Davidson, M., Davison, M. N., Di Santo, Drea, Elgie, Epp, Foulds, Gaunt, Gigantes, Grande.

Hodgson, Isaacs, Johnston, R. F., Laughren, Lawlor, Lupusella, MacDonald, Mackenzie, Makarchuk, McClellan, Miller, F. S., Nixon, Peterson, Ramsay, Rotenberg, Samis, Sargent, Swart, Taylor, J. A., Warner, Wells, Wildman, Young.

Nays

Ashe, Belanger, Bernier, Birch, Bradley, Breithaupt, Campbell, Conway, Cunningham, Eakins, Eaton, Gregory, Haggerty, Hall, Hennessy, Johnson, J., Kennedy, Kerr, Lane, Leluk, Maeck, Mancini, McCaffrey, McEwen, McGuigan, McKessock, McNeil, Miller, G. I.

Newman, B., Newman, W., Norton, O’Neil, Parrott, Pope, Reid, T. P., Riddell, Rowe, Roy, Ruston, Scrivener, Smith, S., Smith, G. E., Snow, Stephenson, Sterling, Sweeney, Taylor, G., Villeneuve, Walker, Williams, Worton.

Ayes 42; nays 51.

The House adjourned at 10:34 p.m.