SMALL BUSINESS DEVELOPMENT CORPORATIONS AMENDMENT ACT
MOTOR VEHICLE FUEL TAX AMENDMENT ACT
The House resumed at 8:01 p.m.
COPIES OF BUDGET
Mr. Speaker: I ask the indulgence of the House for the next few minutes while copies of the budget are distributed to the members. I have suggested that three copies be placed on each front desk; if the members would be kind enough to pass copies towards the back, I would appreciate it.
BUDGET RESOLUTION
Hon. F. S. Miller moved, seconded by Hon. Mr. Davis, that this House approve in general the budgetary policy of the government.
BUDGET STATEMENT
Hon. F. S. Miller: Mr. Speaker, it is a privilege tonight to present my third budget, the 1981 budget of the government of Ontario, a government that recently received a ringing endorsement by the people of Ontario.
Mr. Bradley: But your share of the popular vote went down to 44 per cent from 58 per cent.
Hon. F. S. Miller: It is still 70 seats to your 34 seats.
Under the leadership of the Premier (Mr. Davis), I am honoured once again to have the opportunity to contribute to the shaping of Ontario's future.
During the 38 years of Progressive Conservative government in Ontario, this province has experienced great economic prosperity and social progress. The province of Ontario is an enviable place to live, to work and to play. In no small measure, this healthy state of affairs reflects the moral fibre and sense of community responsibility of all the people of Ontario, and strong and sensitive government.
The government is committed to ensuring continued economic growth and development for Ontario and to providing quality public services for our citizens.
My budget plan for this fiscal year clearly recognizes these fundamental priorities, while taking into account the need for an appropriate level of revenues. If the province is to continue to provide the high level of services the people of Ontario have come to expect, if we are to have the flexibility to take appropriate actions to promote economic development and job creation, and if we must do so in an environment of considerable inflationary pressure, then it is vital that we have a more appropriate balance between revenue and expenditure.
This budget sets out a realistic fiscal framework that will encourage the private sector to grow and compete in the international marketplace, maintain the high level of services provided by the province and allow for growth in priority areas, and ensure a financial balance consistent with long-term growth and employment generation.
The members will be aware that persistent high inflation and lower real economic growth are circumstances not unique to Ontario. They are circumstances characteristic of most major energy-consuming industrial economies which rely heavily on export markets for their prosperity. In my view, Ontario has weathered these difficult economic times well.
The resources freed up by our policy of holding the growth in provincial spending below the rate of expansion in the economy have been put to work by the private sector. In 1980, business investment in Ontario increased by 18.8 per cent; investment in the manufacturing sector alone increased by 34.5 per cent. For 1981, intentions call for a further increase in business investment of 17.1 per cent. As well, over the four-year period to 1981, the provincial economy will have created 450,000 new jobs. This government's economic programs have increased investment and have created jobs.
We are thus well positioned to take advantage of the economic opportunities of the 1980s. We are pursuing new directions in investment and entrepreneurship so that the economy remains healthy and continues to provide the stability and prosperity characteristic of Ontario. It is with concern, however, that I view the levels of inflation and interest rates we are currently facing. This government is resolved to meet its responsibilities to limit the debilitating effects of high rates of inflation.
8:10 p.m.
We have set an example with our own long-run strategy to reduce inflation. By encouraging investment, we are expanding capacity and rationalizing industry to make it more competitive in today's world trading environment. By encouraging the use of indigenous energy sources, we are rising to the challenge of inordinate increases in the world prices of energy. By facilitating labour mobility and training, we are adding to the supply of the skills our industries now need.
Mr. Smith: You are sending them to Alberta.
Hon. F. S. Miller: They need psychiatrists out there.
By controlling the size of government, we are reducing the burden of the public sector, thus freeing up resources for private and personal use.
Unfortunately, our national government appears less committed to this objective. In my 1980 budget and in subsequent statements, I emphasized the need for federal action. I continued voicing these concerns at meetings with my federal counterpart. Let me assure the members that I will continue to urge the federal government to take its responsibilities for economic policy more seriously. Most important, my Premier has called upon the Prime Minister to convene a national conference of first ministers on the issue of inflation and the economy. This will be a most critical forum in which to consider the national options in the light of the causes and risks of inflation in Canada.
We need national policies to foster productivity improvements, to promote exports, to replace imports, to encourage energy substitution. We need a federal government with a controlled spending plan and a reasonable financial balance. We need to ensure that the uneven growth trends across Canada are not reinforced at the expense of the relatively slower-growing provinces. And, perhaps above all, we need to ensure that, as individuals, each and every one of us does not allow inflation to become a way of life. The fight against inflation is a fight that we can all win. I am convinced that with effective, focused federal-provincial policies in this area, we can achieve substantial improvements.
Mr. Smith: Such as?
Hon. F. S. Miller: We have shown the way. When the member's government friends in Ottawa learn, they will have helped to solve the problem, not to contribute to it.
We talked about positive things during the last election. We did not hammer the people with a negative image day after day after day. It paid off. Don't be jealous over there. It shows.
Hon. Mr. Davis: Why don't you ever pout when the cameras are on you, Stuart? Somehow those cameras give you a smile.
Hon. F. S. Miller: The Leader of the Opposition has a new cue; it's "Smile."
Mr. Speaker: The Treasurer will continue, please.
Hon. F. S. Miller: I would now like to discuss the important components of the government's economic and fiscal strategy.
The members will recall that on November 13, 1980, I introduced a $260-million package of supplementary actions to stimulate the Ontario economy.
Foremost in the program were temporary retail sales tax cuts designed to impact selectively in specific sectors where economic performance was weak. The exemptions on purchases of major household appliances, new residential furniture and selected building materials, and a rebate of sales tax on purchases of new light trucks and vans, were all designed to boost sales and production in these important areas of our economy.
While it is too early to present a detailed analysis of the economic impact of those measures, I have already received encouraging signals of their beneficial effect. According to the preliminary information, Ontario's share of total Canadian sales of the exempted products has increased. This strong sales performance has important implications for both production and employment in Ontario. It is my view that this performance reflects the timely and appropriate actions by this government.
In addition, I am receiving positive comments from business that new jobs have been created and others retained in manufacturing, distribution and retailing. Retail inventories and operating costs are being reduced, thus improving liquidity. We can anticipate that in the coming weeks we will see further substantial gains as consumers of this province take advantage of the measures before the expiry date of June 30, 1981.
There are significant delays between the placing of orders and the actual production and delivery of new furniture. Buyers of residential furniture will appreciate that because of that, I am granting a three-month extension of the delivery date to September 30, 1981, on purchases of residential furniture contracted for by the end of June. This extension will ensure that the intended benefit is provided to purchasers of residential furniture who are unable to take delivery within the prescribed time. The cost of this extension is $10 million.
I would now like to discuss the Board of Industrial Leadership and Development established by my Premier last November to coordinate and implement Ontario's economic development strategy. This committee of cabinet now consists of nine ministers working together -- something Liberals have never learned to do -- to fulfil that task.
The BILD development plan released in January detailed a wide range of potential development projects. Thirty-two projects were sufficiently developed that the details of their implementation could be announced during February and March. Others have been introduced in recent weeks. Within the current fiscal year, this government expects to have a total of 50 BILD projects fully operational.
Mr. Breithaupt: What about the other 20 ridings?
Hon. F. S. Miller: I could take the honourable member to a furniture plant in Kitchener that is very happy to have this extension; it was very happy during the winter months not to have had to lay off a single person, whereas during the year before it had to lay off many. People in Kitchener appreciated this policy.
Ms. Copps: How will they pay their OHIP premiums, the 15 per cent increase?
Hon. F. S. Miller: If there is anybody in need of OHIP premiums, my dear, it is you.
The response to the BILD development strategy has been tremendous. Individuals, companies, industrial associations and municipalities have come forward with ideas and money to invest. Ontario's initiatives have touched responsive chords in agriculture, mining, manufacturing, recreation -- in fact, in all sectors. I am encouraged by this widespread interest and support.
8:20 p.m.
We seek a co-operative partnership with Ottawa on development initiatives. The Premier presented a number of specific proposals to the Prime Minister, and I have met with some of my federal counterparts, as have other BILD ministers. We are not satisfied that Ottawa is moving quickly enough on the economic problems ahead of us. Their action is needed urgently.
Some hon. members: Oh, oh!
Hon. F. S. Miller: Listen, the other day they came down here and said they did not know what they wanted to do; they did not know anything specific. Ours are specific. Our money is there. We are ready to act.
Interjections.
Mr. Speaker: Order.
Hon. F. S. Miller: As chairman of the Board of Industrial Leadership and Development, I am pleased to report significant progress in the implementation of BILD projects in each of the six priority areas outlined in January. I would like to take this opportunity to highlight some of the BILD initiatives which are already well under way:
Electricity: We announced in the BILD development plan a request of Hydro, which has been confirmed by Hydro, that the completion timetable for the Darlington nuclear generating station should be accelerated to the maximum extent feasible.
Mr. Nixon: Isn't it strange they went along with that request?
Hon. F. S. Miller: If the honourable member will wait a second, I will give him the answer to that, because it says the new schedule will save Hydro an estimated $60 million in coal costs --
Mr. Smith: How many hundreds of millions in interest?
Hon. F. S. Miller: -- coal that would have created acid rain, my friend -- and will help to curb emissions all across this province.
Ms. Copps: Are you going to cut hydro bills?
Hon. F. S. Miller: Is the new voice for Hamilton the only voice for Hamilton speaking loudly enough?
Interjections.
Mr. Speaker: The Treasurer will please continue.
Hon. F. S. Miller: A wide-ranging residential electrical services program to encourage Ontario home owners to make their houses more energy- efficient and switch in whole or part to electrical heat is being designed. During this fiscal year, legislation will be introduced to empower Ontario Hydro and the municipal electric utilities to permit home owners to take full advantage of the electricity option, particularly heat pumps. As well, construction of the first stage of a steam supply system at the Bruce nuclear power development will commence this year to service the Bruce Energy Park.
Mr. Haggerty: Tell us about that locked-in power that is costing the taxpayers $1 million a day.
Hon. F. S. Miller: I am glad to go up into the Bruce and talk about this program any time. I find they are reasonably receptive in the Bruce.
This project capitalizes on our past investment in nuclear power to move us into a new era of energy parks.
Transportation: Construction and design work worth $25 million will take place this fiscal year on a long-term schedule of radial road improvements to accommodate increasingly heavy traffic in the Toronto-Niagara corridor. As announced in the BILD document, additional investments of $30 million have already been made in Ontario's Urban Transportation Development Corporation to create production facilities in Ontario for UTDC's high-technology transit systems -- which the members opposite laughed at day after day after day only to see us become the world leaders.
Interjections.
Hon. F. S. Miller: Is the member for Hamilton Centre in favour of rapid transit in Hamilton or is she not? She had better speak up, because we need to know.
Ms. Copps: We are not the guinea pigs in Hamilton for UTDC.
Hon. F. S. Miller: She is against it. If she is against it, and I think she is --
Ms. Copps: Yes, I am. I would like to see it in your riding; you put it in a Liberal riding.
Hon. F. S. Miller: I give up!
Mr. Speaker: Order, please. The Treasurer will please continue.
Hon. F. S. Miller: The three main Ontario shipyards on the Great Lakes have responded very positively to the BILD initiative to improve their drydock facilities. Their financial participation, plus Ontario's investment commitment, establishes the partnership for negotiating a firm deal with the government of Canada.
Resources: A full-scale fruit and vegetable storage program will commence this year to upgrade and expand the present storage, grading and packing facilities of Ontario's food growers. The tremendous early response to this initiative suggests that we will see a large number of specific projects begun this year. BILD forestry initiatives, which we have brought to advanced stages of implementation, include the construction of forest seedling cultivation centres in northern Ontario and the Ontario Institute for Biomass Research at Maple. A $10-million program of construction of custom gold sampling and milling facilities will commence this year in the gold mining areas of Ontario. A five-year program --
An hon. member: Why should we believe you?
Hon. F. S. Miller: The member may not but the people of Ontario do.
A five-year program to establish drill core facilities across the province will also be initiated.
Technology: Legislation has been introduced for the centrepiece of the government's research and development initiatives, the IDEA Corporation. Its function will be to bridge the gap between public and private sector research activity, and to stimulate research and development in areas of critical importance to the Ontario economy, including auto parts technology, microelectronics, computer-aided design and manufacturing and robotics.
I am pleased to report that 25 companies have already signed up to participate in BILD's international intern program, which will assist the development of Ontario's international marketing skills. Major strides can be anticipated in strengthening research and development through Ontario's Buy Canadian policy and office of procurement policy.
People: Funds have been allocated to enable a significant expansion in the government's training in business and industry program under my competent friend the Minister of Colleges and Universities (Miss Stephenson) --
Mr. Sweeney: College presidents don't think so.
Hon. Mr. Davis: Oh, but that is where you make your mistake, Brother Sweeney. You should listen to the people.
Mr. Sweeney: I am listening.
Hon. F. S. Miller: He needs to go to an otolaryngologist to discover he cannot hear anything. If it were only wax in his ears, I would not be worried.
Funds also have been allocated to provide a major increase in financial resources for the colleges of applied arts and technology in support of the purchase of new equipment. The commencement of another BILD initiative -- youth employment counselling centres -- has recently been announced.
Community: As part of the province's commitment to assist rural communities in securing industrial and commercial opportunities, the government has already dedicated funds to the areas of Collingwood, Huntsville and Edwardsburgh for sewerage and water works. Drawdown of BILD funds will also commence this year in support of the construction of new convention centres in Ottawa and Toronto. Finally, to foster local self-help initiatives, the government is entertaining proposals from groups in small communities to aid in the establishment of community development corporations.
8:30 p.m.
On the basis of the projects already considered, I estimate that the BILD initiatives committed for commencement this year will constitute more than $250 million in economic development investments. Of this amount, the BILD central pool of funds will provide $150 million --
Mr. Cassidy: One quarter of one per cent; that is all.
Hon. F. S. Miller: That is roughly what the honourable member got in the popular vote -- and that was only in the NDP.
Mr. Foulds: Your mathematics are all wrong.
Hon. F. S. Miller: BILD, in encouraging new businesses and small businesses, is setting major new directions for the provincial economy. The creation and expansion of Ontario small businesses will be vitally important to sustaining this momentum. People who take an idea and build it into a successful business are the backbone of the economy. Much of the new job creation in this province occurs in the small business sector. But risks are high.
Ontario has undertaken several tax actions in recent years to encourage the formation and expansion of small businesses. Taxes on income and capital have been lowered and investment tax credits provided to increase internally generated funds. Access to outside risk capital and managerial expertise has also been improved by the creation of the small business development corporations. I recall very clearly two years ago announcing them and hearing from the benches over there just how foolish I was to try them, because they would not work.
SBDCs are a growing success. In the space of only two years more than 140 SBDCs have been registered in the province. Already they have invested $40 million in small businesses. This substantial new capital has been used by small businesses to start up production, to increase working capital and to reduce the burden of interest costs. In turn, this activity has increased employment and encouraged others to increase their financial interest in small businesses. Funds have been invested all over Ontario in enterprises engaged in a wide range of manufacturing, processing and tourist activities.
I now propose certain improvements to the SBDC program.
First, to encourage more individuals to become involved in the program and to stimulate the development of widely held SBDCs, the maximum equity capital will be raised to $10 million from $5 million for public SBDCs.
Mr. Sargent: Big deal. The Treasurer gave Steve Roman $7 billion, and he is going to give $10 million to small business.
Hon. F. S. Miller: I will be glad to take the member's application at the gate.
Mr. Sargent: You'll be lucky to get it.
Hon. F. S. Miller: If we make a proper credit evaluation, the honourable member probably will not.
However, an SBDC will not be able to invest more than $5 million of its equity capital in any one eligible small business. Second, the definition of eligible tourist activities will be expanded to include recreational facilities and certain other attractions.
Mr. Cassidy: Does that mean Santa's Village?
Hon. F. S. Miller: I am no longer in that.
In addition, I am proposing certain other amendments, which are outlined in appendix C to this statement.
The SBDC program and the Ontario mineral exploration program, which was introduced last year, have helped to provide exploration funds for potential mineral producers and expansion funds for small businesses. However, I am still concerned that the need for development funds is not being met in the public market. I am hopeful that with the co-operation of the Toronto Stock Exchange and the Ontario Securities Commission a system for a new venture capital listing on the TSE will be developed. I was encouraged by recent proposals made by the TSE in this regard, and I will support initiatives to assist corporations in the early stages of development to gain greater access to funds from the public market.
Finally, to further assist Ontario's small businesses, I would like to announce that we will parallel the federal government's tax treatment of small business development bonds. I believe this is a useful way in which to help small business cope with today's high interest rates.
It is vitally important to the success of our economic development initiatives that Ontario maintain an attractive investment climate.
I am not making any earth-shaking revelation when I say that Ontario must compete for industry if our resources are to be effectively utilized, and that we need to attract foreign capital to ensure our investment requirements are fully met. There can be no doubt that our infrastructure and services easily pass the test of world standards, but it is just as important to maintain competitive costs and taxation structures.
Tax competition appears to be increasing, particularly vis-à-vis the United States and some of our sister provinces. Canada's corporate taxation provisions and the indexing of the personal income tax compare very favourably with measures proposed for the United States. I am confident that Ontario will remain competitive on the tax front, but I will continue to carefully follow tax developments in competing jurisdictions.
In the Canadian context, however, I am concerned about the potentially destructive implications of excessive tax competition among the provinces. This is a serious matter to which federal and provincial finance ministers must devote their early attention. A certain measure of harmony in provincial tax structures is important. Ontario's concerns in this regard are outlined in budget paper B, and I refer the members to it.
Let me turn from economic growth to the government's other major priority, that of providing quality and accessible services for the people. Economic growth and social progress go hand in hand. Ontario has well-developed transportation systems, modern services such as sewerage and water facilities, good housing, one of the best health care systems in the world, and educational excellence in our facilities and programs. As well, the elderly receive substantial recognition for their service to society.
For this fiscal year, the government has set spending at $19.4 billion. This represents an increase of 12.2 per cent over the previous fiscal year. Although somewhat greater than increases in recent years, it is a realistic allocation in the light of the sensitivity of government spending to inflation. It continues to reflect the government's commitment to providing a high level of services without disturbing the balance between private and public sector growth.
Within this allocation, health care remains a priority. Over the past six years, health spending has increased from 27.2 per cent of our total budget to 28.7 per cent. For 1981-82, the province has provided a sizeable increase in the funding for basic services. Provision has been made for a further expansion of chronic home care and for new extended care beds. As well, a telemedicine service will be introduced and a start made on the northern air ambulance service. Also, the provision for computerized axial tomography scanners will be expanded, and perinatal service improved. Continued expansion of hospital chronic care facilities will also take place.
Mr. Cassidy: How many hospital beds are you going to cut? Why isn't that in the budget?
Hon. F. S. Miller: My friend across the floor can go anywhere else and ask them what they think of Ontario's health care service and will hear that we are the model for North America.
8:40 p.m.
Mr. Cassidy: We have the highest premium rates in Canada -- $400 a year.
Ms. Copps: What about OHIP rates? They are the highest in Canada.
Hon. F. S. Miller: My mike isn't picking you up. A little louder, please.
Mr. Speaker: The Treasurer will continue, please.
Hon. F. S. Miller: The province's commitment to disabled persons will be further reinforced in this International Year of Disabled Persons. Funding of major programs for the disabled will rise from $499 million in 1980-81 to $593 million this year. This represents an increase of $94 million, or 18.8 per cent, including $28 million for the developmentally handicapped and an equivalent amount for special education.
We are continuing our focus on creating youth employment and providing for opportunities for training. In 1981-82, expenditures on job development will continue to be a priority. This area will be allocated approximately $185 million.
Other initiatives contained in the 1981 expenditure plan are: provision for new subsidized day-care nurseries; a renovation and expansion program for homes for the aged which is expected to cost $40 million over five years on a shared-cost basis with municipalities; provision of $3.3 million for bulletproof vests for the Ontario Provincial Police and municipal police forces; assistance towards construction of 15,000 new rental units under the Ontario rental construction loan program (the interest-free second mortgage loans to developers of up to $4,200 per unit will require an estimated outlay of $63 million over five years); subsidizing maintenance of municipal drains associated with agricultural drainage at a cost of $2 million; and the opening of a new agricultural college for Franco-Ontarian farmers in 1981-82 to provide agricultural instruction in the French language.
Mr. Bradley: Is that all you're giving René Piché? You'll have to fly him to Cochrane North to apologize.
Hon. F. S. Miller: Unlike the federal Liberal Party, we do not suddenly cancel projects after an election when we lose the seat.
Mr. Speaker, I am confident the 1981-82 expenditure plan, developed in co-operation with the Chairman of Management Board and my other cabinet colleagues, is both appropriate and realistic.
Mr. Gordon: You'd nationalize everything, wouldn't you, Floyd?
Mr. Laughren: How many pieces of silver, Jim?
Interjections.
Mr. Speaker: Order. I ask the members from Sudbury not to engage in a private debate. I also ask the indulgence of the members; if you do not want to listen to what the Treasurer has to say, there are lots of people in the public galleries who do.
Hon. F. S. Miller: It's great to hear from Sudbury from our side of the House.
Important new initiatives have been taken on a number of fronts. The planned expenditure growth rate recognizes the implication of inflation on costs but ensures that provincial spending does not fuel inflation. And allocations among programs reflect the shifting priorities and meet the needs of our society.
The members will be aware of the considerable support we provide to local governments. For example, last year the government provided a generous increase of almost 12 per cent in assistance to the local sector with the result that mill rates increased by only seven per cent on average. As a result, property tax increases were held considerably below the rate of inflation.
Earlier this year, the government announced details of the 1981 local government transfers. Support for 1981 will be in excess of $4.7 billion, an increase of 10.6 per cent over last year. I fully recognize that inflationary forces have made it difficult for local governments to contain expenditure growth, but I am confident they will have reviewed their expenditure plans carefully and ensured that increases in local tax rates will remain below the rate of inflation and the rate of growth in household income. In other words, the average real burden of property taxes should not rise and, in fact, will remain well below the burden in the early 1970s.
I would like to remind the members that the government's gradual approach to the reform of the local taxation system is working well and is producing meaningful progress without unacceptable tax shifts. Two hundred and forty-six municipalities and communities have already been reassessed by their own request under section 86 of the Assessment Act, and a further 39 have been reassessed at full market value.
I am proposing tonight a further step in the government's overall reform of property taxation. This reform relates to farm and managed forests.
Mr. Riddell: This is where the farmers get it in the ear. The farmers are going bankrupt.
Mr. Speaker: Order.
Hon. F. S. Miller: Will the member please go back to sleep?
Mr. Speaker: Will the Treasurer please continue?
Hon. F. S. Miller: In my opinion, farm residences should be treated the same way as other residences and appropriate recognition should be given to the contribution made to our economy by farm land and the buildings on the one hand and managed forests on the other. Accordingly, I propose the following approach.
Full exemption will be provided from property taxation for defined farm land and buildings and for managed forests --
Mr. Nixon: This is going to cost us money.
Hon. F. S. Miller: That does not cost farmers money. That means farmers and people who own treed forest lots will pay no local taxes.
Mr. Riddell: It will increase the farmer's tax bill.
Hon. F. S. Miller: Farm and managed forest tax rebate programs would be eliminated, and one of the reasons for doing that is that the federal government will begin to tax these rebates this year.
Some hon. members: Shame.
Interjections.
Mr. Speaker: Order. The Treasurer will please continue.
Hon. F. S. Miller: Municipalities and school boards would be compensated for taxes forgone through those exemptions.
There are a number of significant issues --
Mr. Smith: You missed the third one; read the third one.
Hon. F. S. Miller: That happens to be the truth now and, if the member would like me to read it, I will be glad to go back to it. I am glad he is able to sound the words.
Farm residences would be treated the same way as other single residences for property tax purposes. I had already said that earlier.
There are a number of significant issues which will have to be resolved before this approach can be implemented. Unlike the members on the opposite side, I intend in the very near future to discuss the proposal in detail with interested parties, including the farming community and its representatives, foresters and local governments. Provided any concerns are brought forward in the discussions, and provided they can be met, I anticipate that the new property tax system for managed forests and farms can be in place by as early as the 1982 taxation year.
8:50 p.m.
The government's approach to determining an appropriate property tax burden is an important consideration for farmers. Let there be no doubt that this government fully recognizes the importance of the farm sector to the Ontario economy and the substantial contribution of the farming community.
Mr. Riddell: That's a joke. He is a bigger clown than I thought he was. Even the Minister of Agriculture and Food (Mr. Henderson) won't go out in the farm community.
Mr. Speaker: Order. Will the Treasurer please continue.
Hon. F. S. Miller: In this context, I and my colleague the Minister of Agriculture and Food are examining the structural problems of the agricultural industry with its high capital requirements and cyclical incomes, and we will take what steps are necessary to ensure our farm sector remains prosperous.
I would now like to discuss federal-provincial matters and pension reform.
As the members will recall, the federal Minister of Finance has given notice of his intention to seek significant savings from the renegotiation of major federal-provincial fiscal arrangements. This approach is part of a broad strategy to reduce the chronic federal deficit.
In six short years, the federal government has more than doubled its budgetary deficit to some $14 billion, seriously damaging the economic confidence of this country in the process. I obviously support Ottawa's belated efforts to bring its budget under control. However, I hasten to add that for a number of valid reasons we believe large-scale retrenchment in fiscal transfers to the provinces is both unjustified and unwise.
In the first place, federal transfers to the provinces are not the root cause of Ottawa's fiscal difficulties. The federal government withdrew the very large revenue guarantee payments to our provinces in 1977, scaled down other transfers in the 1978 restraint program, and in 1980, without notice, terminated the $250-million community services contribution program.
Second, through its energy policy, Ottawa has already much enhanced its current revenue position and prospects. How many of the members have written to us about that topic? They should go back and check their files. How many of them have asked us to support them? All of them have.
Mr. T. P. Reid: Did the Treasurer ever hear of the Edmonton Commitment?
Hon. F. S. Miller: The member for Rainy River should talk to his brother.
Ottawa has already much enhanced its current revenue position and prospects, while taking the fiscal sting out of its oil import compensation program.
Third, significant reductions in the major federal-provincial transfers would further heighten the already serious and rapidly growing fiscal disparities among the provinces.
It is apparent the federal government is giving serious consideration to fundamental alterations in established programs financing, under which provinces receive assistance towards the costs of health programs and post-secondary education. This fiscal agreement took many years of negotiation and became a milestone hailed by both levels of government. Experience to date underscores that the EPF has operated much as expected and is fundamentally sound. It was put in place as a long-term arrangement and should be viewed as such.
In my 1980 budget statement, I drew the attention of the members to the fact that one of the cornerstones of our federation, the federal revenue equalization program, is in need of major reform. This important program's reputation suffered considerably when its formula produced large entitlements to Ontario. Only through special legislation could Ottawa avoid paying more than $1.3 billion to this province.
Ontario is greatly concerned about the future of the equalization program. This government cannot accept the continuation of the program in its current form, nor can we accept Ontario's exclusion from entitlements without a fundamental solution to the problem of regional fiscal disparities. These disparities are so large that normally healthy interprovincial competition could deteriorate and lead to destructive protectionism and loss of national economic strength.
I am tabling today budget paper B on the renegotiation of the federal-provincial fiscal arrangements. This paper, together with last year's budget paper on equalization and fiscal disparities, presents a comprehensive Ontario perspective on this important subject.
Mr. Peterson: Has the minister read it? Does he understand it?
Hon. F. S. Miller: I have. I helped write it.
Mr. Peterson: I do not believe that.
Hon. Mr. Davis: Listen, just because the member opposite does not understand it does not mean he should assume that the minister does not.
Mr. Speaker: The Treasurer will carry on, please.
Hon. F. S. Miller: Since 1975 this province has urged public sector restraint in Canada. We have acted accordingly in our own fiscal planning over this period and substantially trimmed down spending growth rates and the size of our bureaucracy. I therefore would like to emphasize that federal transfer cuts would in all probability necessitate increased provincial taxes to maintain service levels.
Another federal-provincial matter of considerable significance in Ontario is pension reform.
In April, the federal government convened a national pensions conference to explore ways of reforming the pension system. The members will be aware that, although this conference was called by Ottawa, the jurisdiction over pensions is primarily provincial. The Canada pension plan, which is enacted and administered by the federal government, recognizes this important fact. No change to the terms of the Canada pension plan can be made without the consent of two thirds of the provinces representing two thirds of the population of Ontario.
Interjections.
Hon. F. S. Miller: Of Canada. It is a Freudian slip. It is 10 to the sixth.
Several observations emerge from the national pensions conference. First, it is clear that the federal government regards pension reform as a high priority. Second, unless effective improvements can be made to private sectoral arrangements there will be strong pressure to expand the Canada pension plan. Third, it is imperative there be a co-ordinated effort by the provinces to develop a uniform approach to pension reform.
Ontario has been a leader in the pension field. This province was the first to enact pension legislation when it introduced the Pension Benefits Act in 1965. In 1977, the government established the Royal Commission on the Status of Pensions in Ontario, whose 10-volume report I released in February. The report provides an exhaustive analysis of the problems currently existing in the pension system and sets out possible responses to its 163 recommendations.
Although it will be neither possible nor desirable to implement all the recommendations, the findings of the royal commission will form the foundation for our reform in Ontario. There is a fundamental premise in the report which is heartily endorsed by this government, and I quote:
"There is general agreement that retirement is an individual matter and that ultimately the individual is responsible for his or her own retirement ... Individual needs and desires require flexibility which cannot be given by group programs or universal social programs."
In dealing with the reform questions, there are six guiding principles which will govern the direction of our reforms.
Mr. Martel: There is no use in having a select committee, then.
Hon. F. S. Miller: First, the principal vehicle for reform should be the private sector. Only the flexibility of the private sector can meet the needs of the individual and his or her desires.
Interjections.
Hon. F. S. Miller: It has done a very good job. The member opposite is totally wrong. He has his figures backwards.
9 p.m.
Second, reform must recognize the special needs of the existing lower-income elderly. I do not believe the private sector will be able to resolve that problem. Therefore, governments, both federal and provincial, must be prepared to take initiatives in that area.
Third, reforms in the private sector should reflect the perspective of the majority of Canadians that pensions are deferred wages. This means we will have to improve vesting, have a fairer allocation of employer contributions and a system to provide for portability.
Fourth, reform can be effective only if there is co-ordination of pension legislation across Canada. We will be encouraging the provinces to work together in developing pension reform plans to ensure this necessary measure of uniformity.
Fifth, we must take into account the special needs of women. For example, many women are excluded from participation in pension plans because they are employed on a part-time basis.
Finally, and this point is of great importance, the costs of reform must be within the ability of government, the taxpayer and the private sector to carry.
Our actions with respect to pension reform must recognize that the most important foundation for a secure pension system is a healthy economy. A select committee of the Legislature will be appointed to assist the government in its deliberations on pension reform.
This leads me to the fiscal plan for 1981-82. As I have already indicated, expenditures will grow by 12.2 per cent. This rate of increase is below the forecast expansion of the economy of 13.6 per cent. Consequently, provincial spending will decline relative to the gross provincial product for the sixth year in a row, to 15.5 per cent from a high of 17.5 per cent in 1975.
Interjection.
Hon. F. S. Miller: It is not in my script. I challenge the member to look in budget paper C. He would realize that Ontario raises fewer taxes per person than any other province in Canada except Manitoba and spends less per person than any other province because we have the most efficient government.
As discussed in budget paper A, the ability of the province's revenue structure to generate revenues has been significantly reduced in recent years. However, expenditures are demonstrating considerable sensitivity to inflation. In the absence of tax increases, expenditures of $19.4 billion this year would push the deficit to $1.6 billion. This is unacceptable. After careful consideration, I have decided it is necessary to raise $603 million in additional revenues to limit the deficit increase. As a result, the deficit will be $997 million in 1981-82.
This level of net cash requirements is well within the capacity of the government to finance from nonpublic borrowing sources. In keeping with our commitment to reduce our reliance on borrowed funds in order to free up capital for private borrowers, for the second year in a row the province will make available $500 million from the Canada pension plan to Ontario Hydro.
Mr. Smith: You are borrowing the rest of it, which you said you should not do.
Hon. F. S. Miller: I had a long brief recently from a group that was studying us which said we have not had a deficit in more than one of the last seven or eight years -- in other words, if we took our capital spending into account we have always had a surplus. Our deficits have not exceeded our capital investments in this province. If we were accounting like any major industry, we would have been showing a profit in eight out of 10 years.
This long-term financing will be of considerable value to Hydro in a time of crowded capital markets. It represents a sound investment of CPP funds in Ontario's energy future.
Our commitment to balance the budget remains firm, but progress towards this goal must recognize the needs of the economy and of our people. As I have mentioned, the stimulatory actions in the mini-budget will cost more than $260 million. Over the medium term, I plan for a steady reduction in the level of net cash requirements, and the modest deficit levels projected keep us well within range of that objective. Budget paper C provides details of the medium- term fiscal projections.
Mr. Martel: Figures can't lie, Frank.
Hon. F. S. Miller: No, they don't, and it is interesting that our budget deficit right now, with all of our debts piled together, is less than one year's revenue. Thirty years ago it was two years' revenue. We have cut our debt in half, relative to our income in that time.
Interjections.
Mr. Speaker: Order. The Treasurer will proceed, please.
Hon. F. S. Miller: I am trying to, Mr. Speaker. My voice is not equal to the noise.
Interjections.
Mr. Speaker: Order.
Hon. F. S. Miller: As I mentioned before, the revenue needs of the province are not being adequately met by our current tax structure. The inadequacy of revenues reflects to a considerable degree the many tax reductions implemented in recent years. I intend to review the substantial list of retail sales tax exemptions currently available, as well as possible expansions of the base. I anticipate the results of this review will be indicated in next year's budget.
Consistent with this approach, I am proposing tonight only one change to the Retail Sales Tax Act. That is to exempt kits for converting licensed vehicles to utilize alternative fuels.
Mr. J. A. Reed: What's so great about that? Even stovepipes are still taxed.
Hon. F. S. Miller: Don't laugh, my friend. Last year when I said propane and alternative fuel vehicles would be exempted, somebody said there aren't any. Well, this year there are and next year there will be more because of these tax actions.
This exemption will reinforce the already successful tax treatment that exists for new cars. This action will cost about $1 million this year.
We are also reviewing crown timber charges. The province's costs of maintaining and protecting forests have escalated sharply, and it is my intention to determine the extent to which these increased costs can be shared with industry.
It would be appropriate at this time for me to report briefly on our review of tax incentives for research and development. Research and development spending in Canada is significantly below that required to meet the federal government target of 1.5 per cent of the GNP by 1985. Inadequate R and D is a Canadian problem and requires a program that is national in scope. I would urge the federal government to act quickly to ensure Canada's needs are met.
We have examined several options for stimulating R and D spending in this province, to encourage both new Canadian investment and greater activity by the multinational corporations. We already have in place generous tax incentives. It is apparent that substantial increases in tax subsidies would be necessary to alter current R and D investment behaviour. Ontario simply cannot afford such measures and I have rejected the idea of granting further provincial tax incentives. Instead, I will ensure that BILD activities encourage research and development in Ontario to the maximum extent possible.
I will now propose a number of necessary revenue-raising measures.
The personal income tax is our most progressive levy and is essential to the overall fairness of our tax system. However, over the past several years, the revenue growth of this important tax has significantly declined. I am proposing that Ontario's rate of personal income tax be increased from 44 per cent of the basic federal tax to 48 per cent.
Interjections.
Mr. Speaker: Order. Order.
Hon. F. S. Miller: This increase will take effect with an increase in withholding taxes from July 1 onward, so that the effective tax rate for the 1981 taxation year will be 46 per cent. For the typical wage earner, the increase in withholdings amounts to less than three per cent and will be more than offset by the impact of indexing in the new year. For example, the tax increase for a single taxpayer at $20,000 of gross income will amount to $2.25 per week. However, assuming the same level of income for that taxpayer in 1982 and a rate of inflation indexing of 12 per cent, this individual's tax burden will decline by $4.56 per week.
After this change, we will continue to have the lowest income tax burden in eastern Canada and the third lowest provincial income tax rate in the nation.
Interjections.
Mr. Speaker: Order. Order.
Hon F. S. Miller: The members will be aware Ontario already has an income tax reduction program that eliminates Ontario tax for more than 400,000 lower-income Ontarians. That program will be enriched for the 1981 taxation year to reduce tax burdens for another 60,000 Ontario taxpayers with taxable incomes below $2,058. This enrichment, which smoothes the notch in Ontario's personal income tax, will bring the total benefits under the Ontario tax reduction program to $20 million.
On balance, these personal income tax measures will yield $235 million in increased revenues this fiscal year and $450 million on a full-year basis. Full details of the tax increase and enriched Ontario tax reduction are contained in the tax appendix.
As I am sure the members will agree, Ontario can be justifiably proud of having one of the finest health care systems in the world.
[Applause.]
Mr. Speaker: The Treasurer will proceed, please.
Hon. F. S. Miller: I am trying to.
A wide range of health services is available to all Ontarians, regardless of their financial circumstances or state of health. This government remains firm in its resolve to maintain this quality of care for the benefit of all residents of this province.
The government has been successful during the past few years in achieving a high degree of cost efficiency in the health system. In the early 1970s, the cost of providing insured health services escalated at an average annual rate of 15 per cent. In the three years after 1976, this rate of increase was held to eight per cent. More recently, upward cost pressures have emerged once again.
The funds for financing health care come from general revenues, including OHIP premiums. The ratio of premiums to health spending has continually fallen over time because of low natural growth in the premium base. In 1979-80, premiums contributed almost 29 per cent to the cost of insured health services, but this proportion would have declined to less than 23 per cent this year without an adjustment.
Therefore, effective in respect of payments for coverage beginning October 1, premiums will be increased by $3 per month for single persons and $6 per month for families.
Mr. Smith: Highway robbery.
Mr. Martel: Rent controls next.
Mr. Speaker: Order, order.
Hon. F. S. Miller: Resulting new monthly premium levels become $23 and $46 for single persons and families respectively. This measure, which increases premium revenue by $120 million this year, represents an increase in premium rates of 15 per cent since 1979, which is below the increase in the cost of health care services over the same period.
Ms. Copps: The highest premiums in Canada.
Mr. Speaker: Order.
Hon. F. S. Miller: In two hours I will be done.
I would like to assure the members that many Ontarians continue to benefit from the present system of premium assistance and exemptions. Moreover, this system will be enriched to ensure that the increase in premiums will not impose any financial burden on those least able to afford them. Details of the enrichment are provided in appendix B.
Individuals with annual gross incomes of up to $8,200 and families of four with gross incomes up to $14,000 will now be eligible for assistance. Also, pensioners and recipients of social assistance will continue to pay no premiums. As a result some 1.7 million Ontarians will be sheltered from all or part of the increase.
Ms. Copps: It's almost 10 per cent of the income of a person earning $9,000.
Mr. Speaker: Order.
Hon. F. S. Miller: Mr. Speaker, some members think that premiums are not an appropriate health financing vehicle.
Mr. T. P. Reid: You used to be one of them, Frank.
Hon. F. S. Miller: No, I never did.
Mr. Speaker: The Treasurer will not engage in private debate, please.
Hon. F. S. Miller: I intend to explore in depth other financing options such as a payroll tax, but I wish to emphasize there are significant implications which could still justify continuation of premium financing. I invite and indeed I welcome comment on this matter during the coming year.
I spoke earlier about my general concern with the diminished responsiveness of the revenue system. Consequently, I am proposing the tax rates on gasoline, diesel fuel, railway diesel fuel, aviation fuel, cigarettes and cut tobacco, and domestic beer --
Mr. J. A. Reed: You were the guys who wanted to keep the price of gasoline down. Remember your freeze?
Mr. Speaker: Order. The Treasurer will please proceed.
Hon. F. S. Miller: Sadly enough, many people in the gallery only come once a year and they watch the act across the floor and go home shaking their heads in utter disbelief.
Interjections.
Mr. Speaker: Order.
Hon. F. S. Miller: If members heard all those items, I suggest they be converted from their current volume basis to an ad valorem basis.
At the same time I am proposing the following specific tax increases:
First, that the new ad valorem tax rate on gasoline be set to incorporate an average increase of about one cent per litre and the new tax rate on diesel fuel be set to impose a 1.1 cent per litre increase. There will be no specific increase for railway diesel fuel and aviation fuel.
These changes will be effective midnight tonight. On the new ad valorem basis they will generate $135 million in this fiscal year. Furthermore, as of April 1, 1982, this province will introduce a fuel colouration system for nontaxable middle distillate fuels. This measure is aimed at preventing tax evasion. Similar programs are already in place in the other provinces.
9.20 p.m.
Second, that the new ad valorem tax rate on cigarettes be set to incorporate an increase of just over five cents per pack of 20. The tax on cut tobacco will also be increased. This change will be effective midnight tonight, and the new ad valorem rate will yield $50 million for this year.
Have a cigar, Mr. Premier.
Hon. Mr. Davis: Thank you.
Hon. F. S. Miller: They were not included. That is full. May I have it back?
Hon. Mr. Davis: The Treasurer giveth and taketh away.
Mr. Speaker: The Treasurer will proceed, please.
Interjections.
Hon. F. S. Miller: Third, that a five-point increase in the markups be applied to domestic and imported spirits, while a decrease in the markup on domestic brandy from 75 per cent to 58 per cent be introduced.
Interjections.
Mr. Speaker: Order. Order.
Hon. F. S. Miller: That is the Welch-Andrewes amendment.
The markup increases, effective July 20, 1981, amount to 20 to 25 cents for a 25-ounce bottle of spirits sold at retail. In total an additional $16 million will be generated this year.
Fourth, that the new ad valorem tax rate on domestic beer be 20 per cent. This will increase beer prices by about 45 cents per case of 24, and will take effect on June 1, 1981. The revenue gained from this proposal will be $22 million this year.
We are still the second lowest province for beer in Canada. Only Alberta, which has no sales tax, is lower. Every other province is higher on liquor and on beer than Ontario.
A number of other minor changes to the revenue system are also proposed with a view to raising revenues, improving the working of the tax system and ensuring uniformity in tax bases. I would direct the members to the tax appendix for details on these changes. On balance these measures will add another $26 million to our revenue.
Our corporations will have to absorb a share of the burden of the tax increases on consumption items as well as OHIP premiums. As a result I have decided to leave the corporate income tax and capital tax rates unchanged in view of the importance I attach to maintaining an attractive investment climate.
I should note that we have in recent years, when we did not change other taxes, imposed increases in the taxes on large corporations.
The capital tax was doubled in 1977, and the income tax rate increased by almost 10 per cent in 1978. A further capital tax rate increase of thirty-three and a third per cent was imposed on banks in 1979. At the same time the income tax rate was raised --
Interjections.
Mr. Speaker: Order. Order.
Hon. F. S. Miller: At the same time the income tax rate was raised by an additional one point, or seven or eight per cent, on most of our large corporations, making a total income tax rate for them of 17 per cent over the two-year period. I have already indicated the intensive competition in which we must operate and the direction of tax policy in other jurisdictions. The inescapable conclusion I have reached is that direct taxes on corporations should not be increased this year.
The tax actions I have proposed will generate an additional $603 million this year. They are sustainable in the light of the expected economic performance, and will allow Ontario to remain competitive on the tax front. My colleague the Minister of Revenue (Mr. Ashe) will be tabling legislation tonight to effect these changes.
Let me go to another topic. Our improved revenue performance will enable us to continue to meet the needs of the people. The members will recall my concern, expressed in the mini-budget, with the impact of sharp increases in home heating costs on lower-income Ontarians. It will be a hardship for those with limited resources to adjust their budgets quickly to meet these cost increases. Consequently it remains my conviction that a temporary geared-to-income assistance program for home heating cost increases would be appropriate.
The impact of home heating cost increases on low-income people all across Canada should be a matter of national concern. I have taken this view directly to the Minister of Finance, presenting a set of options to him in December. In the absence of federal action I will provide home heating cost assistance for the residents of this province. Consequently I am reviewing the options available and will immediately initiate discussions with the federal government on the administration of the personal income tax system in anticipation of the change. Home heating cost increases over the winter of 1981-82 would be the initial target of the program.
Monsieur le président, je voudrais résumer en français les trois principales parties de mon budget.
D'abord, l'économie.
Interjections.
Mr. Speaker: Order.
Hon. F. S. Miller: Listen, for a change the members opposite should just be quiet. For the next few minutes they may be incompetent or incapable of response.
Les perspectives économiques pour l'Ontario se sont grandement améliorées, et je prévois une croissance réelle de 2.4 pour cent cette année ainsi que la création de plus de 100,000 nouveaux emplois.
La progression de l'inflation me préoccupe grandement. Le Premier Ministre, Monsieur Davis, a demandé au Premier Ministre du Canada de convoquer une conférence fédérale-provinciale à ce sujet aussitôt que possible. En l'absence d'une initiative fédérale dans ce secteur, l'Ontario a décidé de mettre de l'avant son propre plan à long terme visant à contrôler l'inflation.
Le deuxième élément de mon budget dont je veux vous entretenir se rapporte aux dépenses gouvernementales. Notre plan de dépenses pour 1981 comporte deux volets.
Mentionnons d'abord le conseil de leadership et de développement industriel dont les initiatives viseront à maximiser les investissements, la création d'emplois et la croissance future de notre économie. Nous investirons cette année $250 millions dans le cadre des initiatives du conseil de leadership, en mettant l'accent sur l'électricité, les transports et les secteurs de technologie avancée. Des programmes du conseil de leadership sont également en cours de réalisation dans le secteur de la forêt, de l'agriculture, des mines, de la commercialisation à l'échelle internationale et de l'orientation professionnelle des jeunes.
L'autre élément de base de mon plan de dépenses consiste à préserver la qualité des services à l'intention de la population. Nous sommes déjà engagés à réduire l'ampleur globale du secteur gouvernemental par rapport à l'économie de la province et, dans ce but, les nouvelles initiatives ont été réservées aux secteurs caractérisés par d'évidents besoins. Les services de santé demeurent une priorité. Cette année les services de santé accapareront près de 29 cents de chaque dollar dépensé, comparativement a 27 cents il y a deux ans. A l'occasion de l'année internationale des personnes handicapées, la province augmentera de 19 pour cent, soit près de $100 millions, ses dépenses pour les principaux programmes à l'intention des personnes handicapées.
Interjections.
Mr. Speaker: Order. Order.
Hon. F. S. Miller: They sound as bad in English as they do in French.
Mr. Speaker: The Treasurer will continue, please.
Hon. F. S. Miller: Oui, monsieur. Des programmes nouveaux ou enrichis sont également destinés aux garderies, aux établissements pour les personnes âgées et aux services de police.
Le troisième élément important contenu dans mon budget se rapporte aux mesures d'imposition. Je propose des augmentations des primes du régime d'assurance-maladie et de l'impôt sur le revenu des particuliers ainsi que des augmentations des taxes sur les carburants, les boissons alcooliques et le tabac. Pour faire contrepoids à ces augmentations, un certain nombre d'allégements fiscaux sont mis à la disposition des personnes dont le revenu est peu élevé et des personnes qui investissent dans la petite entreprise. De plus --
Mr. Sargent: What is the minister trying to prove?
Mr. Speaker: Order. The Treasurer will carry on, please.
Hon. F. S. Miller: De plus, je propose un meilleur régime d'imposition foncière à l'intention des agriculteurs et un crédit pour les frais de chauffage des habitations, afin de compenser les augmentations du prix de l'énergie.
L'effet net de ces mesures d'imposition se traduit par une augmentation de $600 millions des revenus de la province, soit environ trois pour cent des recettes provinciales.
En résumé, le budget de 1981-82 permet de maintenir des services de qualité à l'intention de la population de l'Ontario, tout en stimulant résolument la croissance économique. Ce budget réaffirme aussi l'engagement du gouvernement de réduire la part qu'il accapare au sein de l'économie et d'équilibrer son budget.
Mr. Speaker, I now turn to the economic outlook for Ontario.
9.30 p.m.
There are a number of potentially favourable developments. Tax cuts and increases in defence spending in the United States should give renewed impetus to the growth in demand for Ontario's exports. President Reagan's program is clearly designed to promote economic growth, and it will have positive spillover effects for our economy. The possibility of an easing of international oil prices resulting from a growing glut of oil on the world market will also provide welcome relief.
This outlook could be even further improved by the commencement of the energy mega-projects. The value of these projects to the Ontario and Canadian economies is quite clear, and I would urge that the negotiations now under way between Ottawa and the producing provinces recognize the importance of the prompt commencement of these projects.
I am confident about the ability of the Ontario economy to rebound to higher levels of growth and, with the government's help, fight off inflation over the medium term. It is my view that we can expect a further improvement in our economic performance. My confidence reflects the economic forecast for 1981, which calls for a significant recovery from last year's performance. In 1980 overall output declined by 0.2 per cent. Nevertheless we created 58,000 jobs, very close to the forecast in last year's budget of 59,000.
This year I am forecasting a real growth rate for gross provincial product of 2.4 per cent and the creation of 106,000 new jobs. As a result, the unemployment rate will drop to 6.6 per cent from 6.9 per cent last year. The economic recovery in Ontario will be balanced across the sectors.
In conclusion, this budget serves to maintain a required fiscal balance, and it lays out initiatives to foster growth and thereby reduce inflation; it creates jobs; it continues support for small businesses and the farming community; it maintains a competitive tax and investment climate; it reduces the size of government to the economy; it increases the level of funding for public services; it provides new assistance for disabled persons; it promises relief from sharp increases in home heating costs for lower-income people; and it maintains the province's commitment to balance the budget.
Mr. Speaker: Hon. F. S. Miller moves, seconded by Hon. Mr. Davis, first reading of Bill 70, An Act to authorize the Raising of Money on the Credit of the Consolidated Revenue Fund.
Mr Nixon: On a point of order, Mr. Speaker: Just before you put that motion, can you explain to us how we got to introduction of bills? I know it is customary. but normally the Treasurer asks for reversion. We have never turned him down.
Mr. Peterson: Instead, we got perversion.
Mr. Speaker: Mr. Peterson, will you move the adjournment of the debate, please?
Hon. Mr. Davis: You see, we were waiting for you to move the adjournment, but you were asleep.
Mr. Peterson: I slept through the whole thing.
On motion by Mr. Peterson, the debate was adjourned.
Mr. Speaker: Do we have the consent of the House to revert?
Mr. Martel: Mr. Speaker, on a point of order: I think the Speaker should ask whether that first bill was carried, which he failed to do.
An hon. member: There was no question put; so it could hardly have been carried.
Mr. Smith: Doesn't anybody over there know the rules?
Mr. Breithaupt: Try to get them right, because these people only come here once a year.
Mr. Speaker: Order.
Hon. F. S. Miller: Mr. Speaker, would you like me to read the first bill over again?
Some hon. members: We haven't reverted yet.
Hon. F. S. Miller: We have already reverted. Do you accept the bill as read?
Mr. Speaker: I believe we should do it again.
9:40 p.m.
INTRODUCTION OF BILLS
ONTARIO LOAN ACT
Hon. F. S. Miller moved, seconded by Hon. Mr. Davis, first reading of Bill 70, An Act to authorize the Raising of Money on the Credit of the Consolidated Revenue Fund.
Motion agreed to.
SMALL BUSINESS DEVELOPMENT CORPORATIONS AMENDMENT ACT
Hon. F. S. Miller moved, seconded by Hon. Mr. Davis, first reading of Bill 71, An Act to amend the Small Business Development Corporations Act, 1979.
Motion agreed to.
GASOLINE TAX AMENDMENT ACT
Hon. Mr. Ashe moved, seconded by Hon. F. S. Miller, first reading of Bill 72, An Act to amend the Gasoline Tax Act, 1973.
10:10 p.m.
The House divided on Mr. Ashe's motion for first reading of Bill 72, which was agreed to on the following vote:
Ayes
Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Brandt, Cousens, Cureatz, Davis, Dean, Drea, Eaton, Elgie, Eves, Fish, Gillies, Gordon, Gregory, Grossman, Harris, Havrot, Henderson, Hennessy, Hodgson, Johnson, J. M., Jones, Kells, Kennedy, Kerr, Kolyn;
Lane, Leluk, MacQuarrie, McCaffrey, McCague, McLean, Miller, F. S., Mitchell, Norton, Piché, Pollock, Pope, Ramsay, Robinson, Rotenberg, Runciman;
Scrivener, Sheppard, Shymko, Snow, Stephenson, B. M., Sterling, Stevenson, K. R., Taylor, G. W., Taylor, J. A., Timbrell, Treleaven, Villeneuve, Walker, Watson, Welch, Wells, Williams, Wiseman.
Nays
Boudria, Bradley, Breaugh, Breithaupt, Bryden, Cassidy, Charlton, Conway, Cooke, Copps, Cunningham, Eakins, Edighoffer, Elston, Epp, Foulds, Grande, Haggerty, Johnston, R. F., Kerrio, Laughren;
MacDonald, Mackenzie, Mancini, Martel, McEwen, McGuigan, McKessock, Miller, G. I., Newman, Nixon, O'Neil, Peterson, Philip, Reed, J. A., Reid, T. P., Riddell, Roy, Ruston;
Samis, Sargent, Smith, Spensieri, Stokes, Swart, Sweeney, Van Horne, Wildman, Wrye.
Ayes 65; nays 49.
MOTOR VEHICLE FUEL TAX AMENDMENT ACT
Hon. Mr. Ashe moved, seconded by Hon. F. S. Miller, first reading of Bill 73, An Act to amend the Motor Vehicle Fuel Tax Act.
Mr. Speaker: Shall the motion carry?
Some hon. members: Yes.
Some hon. members: No.
Mr. Speaker: All those in favour will please say "aye."
All those opposed will please say "nay."
In my opinion the ayes have it.
Some hon. members: No.
Mr. Speaker: Same vote?
Mr. Nixon: We will agree to the same vote.
Some hon. members: No.
Mr. Speaker: Call in the members.
Some hon. members: No.
Mr. Speaker: Order, please. Do I have the consent of the House to dispense with the bells?
Mr. Foulds: No, Mr. Speaker, you do not.
10:34 p.m.
Mr. Speaker: Hon. Mr. Ashe moves, seconded by Hon. F. S. Miller, second reading of Bill 73, An Act amend to the Motor Vehicle Fuel Tax Act.
Mr. Sargent: On a point of order, Mr. Speaker --
Mr. Speaker: There is no point of order. Sit down.
Mr. Sargent: It's after 10:30. You can't do this now.
Mr. Speaker: There is no point of order.
The House divided on Mr. Ashe's motion for first reading of Bill 73, which was agreed to on the following vote:
Ayes
Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Brandt, Cousens, Cureatz, Davis, Dean, Drea, Eaton, Elgie, Eves, Fish, Gillies, Gordon, Gregory, Grossman, Harris, Havrot, Henderson, Hennessy, Hodgson, Johnson, J. M., Jones, Kells, Kennedy, Kerr, Kolyn;
Lane, Leluk, MacQuarrie, McCaffrey, McCague, McLean, Miller, F. S., Mitchell, Norton, Piché, Pollock, Pope, Ramsay, Robinson, Rotenberg, Runciman, Scrivener, Sheppard, Shymko, Snow, Stephenson, B. M., Sterling, Stevenson, K. R.;
Taylor, G. W., Taylor, J. A., Timbrell, Treleaven, Villeneuve, Walker, Watson, Welch, Wells, Williams, Wiseman.
Nays
Boudria, Bradley, Breaugh, Breithaupt, Bryden, Cassidy, Charlton, Conway, Cooke, Copps, Cunningham, Eakins, Edighoffer, Elston, Epp, Foulds, Grande, Haggerty, Johnston, R. F., Kerrio, Laughren, MacDonald, Mackenzie, Mancini, Martel, McEwen, McGuigan, McKessock, Miller, G. I.;
Newman, Nixon, O'Neil, Peterson, Philip, Reed, J. A., Reid, T. P., Riddell, Ruston, Samis, Sargent, Smith, Spensieri, Stokes, Swart, Sweeney, Van Horne, Wildman, Wrye.
Ayes 65; nays, 48.
Hon. Mr. Wells moved, pursuant to standing order 3(b), that the House continue to sit until all the budget bills have been introduced.
Mr. Speaker: Do I have the consent of the House?
Some hon. members: No.
Hon. Mr. Davis: Don't play games. Let's get them in.
Mr. Kerrio: You want to do it in the dark of the night.
Sufficient members having objected by rising, the House adjourned at 10:40 p.m.