Journal des débats 1982-sept-23 | Assemblée législative de l'Ontario

Mr. Riddell: Mr. Speaker, on a point of privilege: As I was glancing through the September 13 edition of Background, a government publication which I am sure you read, I came across an article entitled "Hansard Report Must Make Sense of MPP Speeches."

Peter Brannan, chief of Hansard and editor of debates for the Legislature, a person who comes under your jurisdiction, was commenting on the operations of Hansard. He said:

"Whether given to eloquence or just inane interjections, Ontario politicians simply have to open their mouths to achieve a slice of immortality. Every unctuous uttering, pious pronouncement and wicked witticism expressed in the Legislature or a standing committee becomes a permanent part of the Hansard record of parliamentary debates."

He went on, "But sometimes the grammar has to be cleaned up, metaphors unmixed and infinitives rejoined before the debates are put to print."

He explained a little more about the operations of Hansard and then he said -- and this is the thing that offends me and the people I represent, Mr. Speaker -- that most members are "fairly lucid these days... The majority are all well educated. They're businessmen, lawyers, teachers and accountants. We haven't got too many farmers left."

Mr. Speaker, I think it is incumbent upon you to inform Peter Brannan that the farmers are not the uneducated, the illiterate, the inarticulate sector of society he believes them to be. I also think you should inform him that there are quite a number of farmers in this august assembly and that we hope there will continue to be a great number of farmers in this assembly. I tell you, Mr. Speaker, from the standpoint of business, when the farmers made up a larger majority of this assembly than they do now, the province did not run a deficit of $15 billion.

Mr. Speaker: Thank you very much. Contrary to your assumption, I have not seen that particular article and I am not familiar with whatever it is. However, I will be pleased to speak to Mr. Brannan. I would suggest that his remark perhaps was not made the way you have chosen to interpret it. However, I will be very pleased to do that.

Mr. Peterson: On a point of privilege, Mr. Speaker: I think the point that my colleague makes is a serious one --

Mr. Speaker: Yes it is.

Mr. Peterson: -- and I think you should investigate it and report back to this House. If I may --

Mr. Speaker: Order. If I may, the point of privilege has been raised.

Mr. Peterson: On the point of privilege: There is another aspect here if you will hear me out.

Mr. Speaker: All right. I will listen to the --

Mr. Peterson: If you will be seated, I will be happy to proceed. You do not understand that Mr. Brannan said in his remarks that businessmen presumably are reasonably articulate in this House. But I refer you to Hansard of September 21, 1982, page 3614, quoting the Treasurer (Mr. F. S. Miller). Referring at that point to the new federal Minister of Finance, the Treasurer says: "He has been my counterpart for three years in hell. I think I understand him." Perhaps there is a misprint, Mr. Speaker, and on the other hand it may very well be totally accurate. You may want to check into that.

Mr. Speaker: Thank you very much. As I said before, I will speak to the people involved and draw it to their attention.

CHAIRMAN'S RULING

Mr. Laughren: Mr. Speaker, I have what I think is a point of order, but you may wish to regard it as a point of privilege.

Yesterday in the standing committee on resources development, which has been holding hearings on the Weiler report on workers' compensation as well as on the Ontario government's white paper and a proposed legislative change, I believe the committee chairman, the member for Nipissing (Mr. Harris), ruled that a motion to make an interim report to the Legislature was out of order. I do not believe there is any standing order on which he based his ruling.

I ask your guidance as to what committee members can do when the committees are dominated by members of the government party, who can simply rule a motion out of order rather than debate the motion itself and the substance of the motion. If they defeat that motion, based on their own views, that is one matter. But I ask whether you agree with me that ruling it out of order is not the proper way to dispose of a legitimate motion in committee.

Mr. Speaker: Quite clearly, it is the prerogative and the responsibility of the chairman of any committee to rule as he or she may see fit, and the committee is bound by that ruling.

2:10 p.m.

Mr. Martel: On the point of order, Mr. Speaker: I understand what you are saying, but I do not believe you can simply use a majority to bring in a ruling that is contrary to the standing rules and use your majority to support it. Surely the chairman has to make a ruling on a motion on the basis of what the standing orders are and not on what is in his mind or what he would like them to be.

A committee is an extension of the House. If you want to debate the motion and defeat it, that is fine; those are the realities of March 19, as I have heard people over on the government side of the House say. But simply to make a ruling that is arbitrary and comes from nowhere and to use the majority to enforce it is wrong, and I ask that you advise chairmen that they cannot make rulings that are totally contrary to the rules.

That is what is at stake, not the realities of March 19 or the fact that they have a majority. Let the issue be debated and if they want to defeat it, that is fine; that is the way the place runs. But you do not make arbitrary rulings that are contrary to the rules and then use the majority to substantiate or support the chairman.

Hon. Mr. Wells: Mr. Speaker, on this point of order or point of privilege: I think all members of this House will agree that it is the prerogative or the duty of the chairman to so rule on motions put before him in a committee.

Mr. Martel: If they are out of order, yes.

Hon. Mr. Wells: I submit to the member for Sudbury East that one of the things a chairman has to do is to decide whether a motion is in order or out of order. There are times in any proceedings or in any body, in this House or in its committees, when a motion is obviously not in order.

My understanding is that a motion was made in the midst of the committee process where they were having hearings on the Weiler report and so forth. The committee was listening to briefs and studying them, and out of the blue a motion was made to suggest that some action should be taken by this government. There is probably a proper time in that committee for that motion to be made, but I submit that the chairman was in order in deciding whether the motion was in order or not in order. It is also the prerogative of the members of the committee to challenge his ruling, and they did so.

Mr. McClellan: Which standing order are you referring to?

Hon. Mr. Wells: This is not covered by standing orders; it is covered by the general proceedings of any chairman. Anybody who has read anything about parliamentary procedure knows there is a time for a motion to be in order and a time for it not to be in order. You cannot just stand up in the middle of any proceedings and make motions.

No one is disputing that at some time in that committee, after the members have listened to all the briefs and have made their study, it may he that as part of the recommendations they will want to make the kind of motion that was put forward. But I submit that yesterday was not the time and that the chairman was acting properly.

Mr. Speaker: Order. This is developing into a debate, and I have taken the member's point of order into consideration. I advise all honourable members that any ruling of a chairman of any committee can be challenged by the committee; and I would add, if I may, that unless there is a report before the House there is really nothing I can do.

Mr. Laughren: Mr. Speaker, it was an interim report that we were recommending.

Second, standing order 1(b) states: "In all contingencies not provided for in the standing orders the question shall be decided by the Speaker or chairman, and in making his ruling the Speaker or chairman shall base his decision on the usages and precedents of the Legislature and parliamentary tradition."

I ask whether you will see if you can find the precedents and usages of the Legislature and Parliament on which the chairman could possibly have based his ruling. That would be most helpful.

Mr. Speaker: I was not at the hearing; I have no idea what went on. But I can tell you that the chairmen of the committees do have the responsibility of making rulings.

Mr. Martel: It is in the rules; they do not make up the rules.

Mr. Speaker: With all respect, there are a lot of things that are not covered by the rules.

Mr. Martel: But surely you don't rewrite the rules at the whim of the chair, Mr. Speaker.

Mr. Speaker: Order. I am not suggesting that. I am telling you quite clearly, and this will be the end of it, that if you are not satisfied with the rulings by any chairman, that ruling can be challenged.

Mr. Renwick: That is not satisfactory.

Mr. Speaker: Order. We are not going to debate it.

Mr. Martel: Well, Mr. Speaker -- Mr. Speaker: No, with all respect --

Mr. Martel: Well, you had better tell your

chairmen.

Mr. Speaker: Order. Please resume your seat.

WELFARE PAYMENTS

Mr. R. F. Johnston: Mr. Speaker, on a point of privilege: I would like to correct the record if I might. On Tuesday, the Minister of Community and Social Services (Mr. Drea) said, amongst other things, that I was "a man who travels around with his cold pack so he can carry his stew when the cold pack is far more than any poor person in the province could afford."

He has given the impression that it is a very expensive cold pack. This is the offending article, which sells in Canadian Tire stores for $2.09 plus the regressive sales tax. He is therefore not trying to indicate that this is a very expensive thing but, rather, is admitting that the people who are on welfare in this province should not have $2.09 for capital expenditures of this nature.

Mr. Speaker: Order. Interesting as that may be, it is not a point of privilege.

ORAL QUESTIONS

WAGE AND PRICE RESTRAINT PROGRAM

Mr. Peterson: Mr. Speaker, I have a question for the Treasurer who indicated in the press, and I assume he was properly quoted, that there were going to be some savings as a result of his wage restraint package.

The Treasurer indicated, as I understand it, that there would be a $120-million saving for every percentage point in public sector salaries, that there would be savings of $50 million to $80 million for the municipalities as a result and that the total savings would be something in the order of $840 million over a period of time.

His director of fiscal planning policy of Treasury stated to our researcher that the amount that would be saved as a result of his restraint program was in the order of $420 million.

My question is this: how much will be saved over original budget projections, and what is he going to do with that money?

Hon. F. S. Miller: Mr. Speaker, one has to assume before making a calculation what one would expect the average increase of salaries --

Mr. Peterson: Well you may have; they are your calculations, not mine.

Hon. F. S. Miller: I am answering the question -- what the average rate of increase might have been in an unconstrained year. If averages had been between 10 per cent and 13 or 14 per cent for contracts, then one could easily assume that it would be 12 per cent. The guideline is five per cent. If the saving for every percentage point is $120 million and there is a seven per cent potential saving, seven times 12 is $840 million.

Mr. Peterson: The Treasurer did not answer the (b) part of my first question. What is he going to do with the money?

Hon. F. S. Miller: The Leader of the Opposition reminds me daily that I have a deficit. I would reduce it.

Mr. Peterson: Why is it that the Premier (Mr. Davis) takes a different view of some of these situations? In one of his utterances the other day he said that "constraints cannot be used to deny our domestic responsibility to make our best efforts to provide for immediate economic recovery and to create the framework for economic growth..

He also said: "It is Ontario's view that sustaining and creating employment should continue to be this nation's highest priority."

Why is the Treasurer not using some of those moneys to create jobs here and now in Ontario, or is his strategy only to blame the federal government?

Hon. F. S. Miller: The leader is dealing with the hypothetical. Of course we are prepared to be doing more. We said it required at least some federal and provincial co-operation on a national economic recovery program. Of course we already have done some.

All I can say is, no matter what efforts we take with job stimulation, there will have been less money spent on the other side.

2:20 p.m.

Mr. Cooke: Mr. Speaker, why did the Treasurer not reveal to the Legislature, as part of his presentation on Tuesday, an up-to-date projection of what the deficit will be for this government at the end of the fiscal year, what he projects the expenditures will be for this government in this fiscal year and what he projects for employment creation, having stated in his May budget that there would be 125,000 jobs by the end of this year?

Why were those very important aspects of the budget for this province not presented to the Legislature? Further, why in the lockup did his officials tell us they could not project what effect his program would have on inflation in this province and they could not give us any kind of figure of what effect it would have on his deficit? What kind of economic recovery program is that?

Hon. F. S. Miller: Mr. Speaker, the honourable critic implies that up-to-date knowledge is not made available on the state of the provincial budget as the year rolls by. I point out to him that Ontario pioneered quarterly reports. There is a June 30 report and there will soon be a September 30 report. We are one of the few provinces that have a habit of showing what happens to our economic plan as the year goes by, and we intend to keep on doing that.

Obviously we have had indications that the income side has not been maintaining our projection. There are also pressures on the spending side; for example, the sudden frost that caused millions of dollars of damage to the tobacco crop, and an estimated $75 million of crop insurance; increases in demand for general welfare assistance at the municipal level where we share in those costs, and pressures within the health system. Those are part and parcel of every year.

As the papers have pointed out this week, and I hope the member has read them, we have done an extraordinarily fine job in Ontario of fiscal management. We are going to keep on doing that. We have an economic recovery program that is doing more than most.

For example, we are well past the 5,000 mark on the applications for the new home owners' grant. Between 45,000 and 50,000 people sent in for applications and between 5,100 and 5,200 returned them. We are seeing a takeoff in sales. There are three man-years of jobs in every house built and bought in this province; they spread right back into all the ridings of the province.

I can also assure members that the programs we have for highway construction and municipal works have been subscribed. In fact, we checked just the other day to see whether the jobs had been created as predicted, an they have been.

Mr. Peterson: Has it ever occurred to the Treasurer that the amount of money he presumably will be saving in this program, in the range of $840 million, or whatever the calculation he uses, is roughly equivalent to the price the government paid for an oil company plus what it contributed afterwards to an exploration company that will bring no jobs or no exploration in Ontario?

If he adds those capital expenditures plus the interest accumulated thereon since the date of the purchase, it is very close to the kind of figures he is talking about in terms of savings. Therefore, one could argue quite forcefully that he is asking the public servants to pay through a restraint program for an oil company that is netting nothing here in Ontario.

The Treasurer has called this an emergency situation, he has called this an emergency session, he has said jobs are a top priority in this province; so why has he not got one program that creates one job for our discussion here in this Legislature?

Hon. F. S. Miller: I pointed out that I put about $500 million back into the economy over and above the normal budget this year just for that purpose.

Let me suggest that the member go out and ask the small businessmen of this province who are getting back the $250 million of tax we are not collecting. Those people not only are being helped to survive but also are keeping people at work. The few who are still able or willing to invest in new expansion are doing so. That is catching on.

The member should ask the man in the street whether he likes or dislikes our program. He will find out that we are heavily supported by the average citizen in this province.

Mr. Peterson: These same small businessmen you talk about used to be big businessmen. That is the tragedy.

MUNICIPAL TRANSFER PAYMENTS

Mr. Peterson: Mr. Speaker, I have a question for the Minister of Municipal Affairs and Housing. The minister is aware that the municipalities are suffering some difficulties now as a result of the last budget, with the new changes in the Ontario health insurance plan regulations and fees, and changes in the Retail Sales Tax Act. These are an added burden because a lot of budgets were already set. He is also aware, of course, of the swelling municipal welfare rolls, which are putting more pressure on municipalities.

I ask the minister what his program will be in terms of transfers to the municipalities and whether he can assure this House and the municipalities that they will not be limited to five per cent, as has been suggested.

Hon. Mr. Bennett: Mr. Speaker, I had the opportunity back in the last part of August to speak with the Association of Municipalities of Ontario.

Mr. Bradley: Were you well received'?

Hon. Mr. Bennett: Yes, very well received. I have to tell the member, I was better received than he might imagine from his point of view.

At that time, I said to AMO very clearly and distinctly that over the years this government has made sure that municipalities have been supported and defended in their financial requirements to run the system. I said it would be wrong for me at a time of constraint in the province, with the reduced revenues the Treasurer has spoken about this afternoon and on previous occasions, to lead municipalities to believe that we were going to be able to continue to increase grants -- I am talking of actual dollars -- by percentages equal to what we have been able to do in the past years.

I said very clearly that I wanted to give them advance notice for preparation of their budgets -- and they have asked for this kind of information -- that I anticipated there would be little or no increase in the grants from the province. I indicated clearly that the number of dollars given to them a year ago would continue to flow to them but that if there were any increase, it would be very marginal.

Mr. Peterson: Is the minister aware that AMO calculates, as a result of the last budget, that the minister has effectively reduced municipal transfers by some 30 per cent after mill rates have been struck and that, in fact, there is a diminution? Is the minister also aware that if he does not increase the transfers by five per cent or more, he is going to see a major cut in services at the municipal level or increased property taxes? Is that the minister's strategy? Does he want to see increased property taxes way beyond the five per cent limit he is trying to impose across this province?

Hon. Mr. Bennett: I am very intrigued by the figures the Leader of the Opposition has thrown out this afternoon about a 30 per cent reduction as a result of the actions of my friend and colleague the Treasurer (Mr. F. S. Miller) in the last budget. I realize what the sales tax means to most municipalities, and it is a long way from an impact of 30 per cent reduction in the grant position of municipalities in this province. The leader of the second party might like to go back and review the situation.

I understand there have been some increases in costs, and the Premier and I are going to meet with AMO this afternoon at four o'clock to review with them the bill that was presented to this House on Tuesday.

I am sure some of the areas that the Leader of the Opposition has covered in his question this afternoon and that have been covered on numerous occasions since the budget back in May will come up again for review. But I have said very clearly to the municipalities: "Here is the situation we find ourselves in."

I am sure there is not a member sitting in this House who will not have some appreciation for the fact that municipalities have certain programs they can very well eliminate without reducing the important safety and protection services to the people of their community. Those they are obligated to deliver under the Municipal Act they will continue to perform, I believe, to the maximum of their ability. But some of the other things, they can very well eliminate in a constraint period.

I am inviting municipalities to look over their budgets, as this government and the federal government must do in a constraint period. When the economy is not as buoyant as it was, then I think one has to try to tailor one's budget accordingly to the amount of money coming from municipal taxes, transfer payments and the provincial government.

Let me add only one other thing for the benefit of the leader of the second party. I suggest very strongly that municipalities are going to look carefully at where they are going in the coming year in relation to property taxes. I want to make it very clear to this House that a great number of municipalities have had some improvement in their assessment position through new construction and new opportunities. Those will allow the municipalities to offset, at least to some degree, the inflationary factors they are encountering.

2:30 p.m.

Mr. Breaugh: Mr. Speaker, I wonder if the minister would give us his assurance this afternoon that he will be prepared, at the very least, to honour commitments that have been made in rather vague ways previously that the increased costs to municipalities and school boards that were incurred by the Treasurer's latest budget, such as sales tax, OHIP premiums and a few licence fees, usually amounting to between one to two per cent of their total budget, will not have to be absorbed by the municipalities, and that his next round of grants will take those into account so those costs will not be an added burden to the property tax base?

The Treasurer said in committee that he would be prepared to consider this, and I know that on other occasions the minister has talked about it. Would he give us the simple commitment this afternoon that he will absorb that cost, at least?

Hon. Mr. Bennett: Mr. Speaker, I give the assurance to this House that this government will continue to treat its municipalities in a very fair and honourable way in respect of what their costs of operation happen to be. It will be taken into consideration at the time of computing the grants to the municipalities.

Mr. Epp: Mr. Speaker, the cost of the 1982 Ontario budget provisions to the borough of York, which has a population of about 131,000, is over $500,000. Despite the fact that York borough has the highest mill rate in Metro, and despite the fact that council is now trying to decide which cuts are going to have to be made, would the minister indicate to this House exactly what kind of assistance he is providing to the borough of York? Second, if some cost-cutting has to be done, which services would he suggest to the borough should be cut out?

Hon. Mr. Bennett: Mr. Speaker, the borough of York, like the city of Ottawa, Metropolitan Toronto and other jurisdictions in this province, will be dealt with on a fair and even basis. I do not intend to take York or any other municipality and try to set a formula or a policy just for it. We have established a policy across this province for resource equalization, the general per capita grant and so on for municipalities, and we are not going to start to alter it for each municipality.

As to the last question asked, I might say to the member very clearly, and I am making it very distinct here as I did to the Association of Municipalities of Ontario: I do not intend, as the minister reporting for municipal affairs, to start to set the priorities for each municipality. That is what officials are elected to do in their particular boroughs or municipalities, and I trust they will honour, respect and understand the capacity of their municipalities to afford certain programs. They will set the priorities. I trust they will be right in respect of today's constraint period in the economics of Ontario and Canada.

VISITOR

Mr. Speaker: Before proceeding with question period I would ask the indulgence of the House, if I may, to introduce an honoured visitor in the members' east gallery. We are pleased to have today, honoured indeed, His Excellency T. J. Arcand, newly appointed Canadian ambassador to Hungary, who was very recently Canadian ambassador to Lebanon, Syria and Jordan, where he provided exemplary service on behalf of Canada and Canadians during the recent conflict in southern Lebanon. I would ask members of this House to join with me in welcoming Mr. Arcand.

The member for Port Arthur.

Mr. Foulds: Mr. Speaker, I might just say there is courage and there is courage, and the ambassador certainly has displayed that in the last few months.

OHIP PREMIUMS

Mr. Foulds: I have a question of the Treasurer. Can he confirm that, in spite of the so-called "price restraint" side of the government program, which was announced the day before yesterday, and in spite of his announcement that government fees would be restricted to an increase of five per cent, OHIP fees will increase by 17 per cent on October 1? How does he explain this inconsistency?

Hon. F. S. Miller: Mr. Speaker, that was a change that was made on May 13.

Mr. R. F. Johnston: What about the contracts that were signed'?

Mr. Speaker: Order.

Mr. Foulds: Would the Treasurer not admit that his answer is inadequate, if not hypocritical, when he is rolling back wage increases, when he is engaging in an application of "restraint" on fees that this government receives that only amount to one third of the revenue of the total fees that it gets?

Will the Treasurer not admit that restraint by this government on fee increases is laughable when the OHIP fees total two thirds of the total fees received by this government as opposed to the one third of the fees in vehicle registrations, Liquor Licence Board of Ontario fees and other fees and licences that he is restraining? In other words, he is restraining something like $692 million as opposed to not restraining revenues of $1,402 million.

Hon. F. S. Miller: My friend is too wise to play that game. He knows that the change was made in the budget, that it takes some three --

Mr. Foulds: It comes into effect on October 31.

Hon. F. S. Miller: Just sit still and be quiet.

Interjections.

Hon. F. S. Miller: Never mind. I have Stuart Smith's picture all over the bottom floor of my building today telling us what a great guy he is and what he is doing in his new job.

Mr. Speaker, you know that the OHIP system works about three to four months in advance. People prepay their fees. The prepayments were made at that date. The change was on May 13. That is the date it took effect and it covered last year's changes. We honoured all contracts in effect on May 1.

Mr. T. P. Reid: Mr. Speaker, would the Treasurer not agree that part of the reason for the hefty increase in OHIP premiums is in fact the rather -- certainly now in view of the events -- generous offer or settlement with the doctors? Will he concede that?

Also, if there is any rollback or giveback by the doctors, will he consider doing something about the OHIP fees? And can he assure us that in October 1983, during his transition period, OHIP fees will not go up over five per cent in the year after this contract or this budget-setting time is over?

Hon. F. S. Miller: Mr. Speaker, the answer to the first part is no, it does not relate to any future contract changes; it related to the historical, past-year change. I am sure my colleague knows that OHIP fees raise roughly one fifth of the cost of the OHIP plan and that roughly one half of the cost of the OHIP plan is in fact just for hospitals. Something in the range of $3.3 billion to $3.5 billion is for hospitals. Something in the range of $1.5 billion is for doctors. Those figures are rounded out. They are not necessarily accurate in the second point.

I would simply point out to him that obviously future increases in fees or rates, be they for workers in hospitals or for physicians, are not reflected in the historic rate. I would also like to point out that my colleague in the other party has wanted us to charge more, at least, through a payroll tax.

Mr. McClellan: Mr. Speaker, the Treasurer has left me confused with his answer to the effect that OHIP premiums will not be rolled back, and on Tuesday he told us the OHIP fee schedule negotiated settlement is not covered under the wage control package.

My question to the Treasurer is, what then is the meaning in part II of the act when it defines "administered price" to include "a price, user charge or fee. . .permitted or authorized by a public regulatory agency and "public regulatory agency" is defined in subsection 26(d) as "any ministry, agency, board, commission. . ." of the government "which approves, establishes, regulates. . .user charges or fees to be charged for any product or service"?

2:40 p.m.

Surely, by definition OHIP is included in the administered price definition, and OHIP is included under the legislation. Simply put, my question is: what kind of game are they trying to play?

Hon. F. S. Miller: Mr. Speaker, we will be discussing the terms and conditions and parts of that act in full detail after second reading.

WAGE AND PRICE RESTRAINT PROGRAM

Mr. Foulds: Mr. Speaker, is the Treasurer aware of the situation of Mr. Saleem Yacoub, who earns $16,065 a year as a field worker with the Brant county welfare office? Is he aware that Mr. Yacoub's union has been without a contract since last April, and that if they had received a wage increase equal to the current cost of living increase, his wages would have gone up by $1,700 from April 1982 to April 1983 and an additional $1,850 in the second 12 months of his contract?

Is the Treasurer aware that the effect of his restraint program on Mr. Yacoub is that he will have his pay reduced by $250 this year and by at least $1,000 next year? Can he explain the justice and fairness of the impact of those reductions on a person like Mr. Yacoub?

Hon. F. S. Miller: Mr. Speaker, first, there are no reductions in pay, and the member knows it. That is terminology the member chose to use and he knows it is not true.

Hon. Mr. Davis: Try to play it straight for a change.

Hon. F. S. Miller: If Mr. Yacoub is in a salary range of $16,000 a year, then the act permits --

Interjections.

Mr. Wildman: How much do you make, Frank?

Hon. F. S. Miller: I make as much as the member does, plus the amount for a minister. Those are the guys who always want more in the negotiations.

Interjections.

Mr. Martel: On a point of privilege, Mr. Speaker: My friend the minister makes the point that it is us who always negotiate more. May I suggest that the minister retract that statement in view of the fact that in the last pay raise, they attempted to slip through an increase in ministerial income, and we said no.

Interjections.

Mr. Speaker: Order. The member for Sudbury East will resume his seat, please.

Hon. F. S. Miller: I would like to indicate that we did not even get the six per cent they got as members, and they know that.

Mr. Speaker: Back to the main question, please.

Mr. Martel: Don't give me that nonsense.

Hon. F. S. Miller: That is absolutely true.

Mr. Speaker: You are debating a question -- just ignore the interjections.

Hon. F. S. Miller: It is hard on the tonsils. If this gentlemen earns under $20,000 a year, the maximum amount he is permitted to have by the law is $1,000 in the control year. He is also limited to a maximum --

Mr. Mackenzie: Maybe.

Hon. F. S. Miller: He may have, certainly, up to $1,000. One of the great differences between our program and the federal program is that we have recognized people at the lower end of the income scale needed more; they did not. It is in our program; it is not in theirs.

Mr. Foulds: If the government is so concerned with people like Mr. Yacoub who are at the lower end of the income scale, why is it that the legislation says "may" instead of "shall"? Why is it that the employer solely and arbitrarily has the right to decide whether he will cough up the increase? That is what the legislation says.

Is the Treasurer saying to people like Mr. Yacoub: "You did not get it through negotiation in the last contract; you are not going to get a cost of living increase because the maximum is nine per cent at the most and you are never going to get it"? He is saying to people like Mr. Yacoub: "You are not entitled to a redistribution of the income and the wealth of this province. You are not entitled to a settlement through negotiation."

How does he feel about taking approximately $560 in income tax next year from Mr. Yacoub? Since he has taken $250 out of his pocket by the so-called restraint program, how does he feel about putting what is in effect a 35.5 per cent surcharge on Mr. Yacoub's tax?

Hon. F. S. Miller: I do not expect everyone in the world to think we were totally fair, but I challenge the honourable member to walk the streets of Sudbury, since he knows them well, and ask that question of people who have no increase coming to them right now. He should walk the streets of Windsor or any of the cities where his people are alleged to represent the unemployed. Most people in Ontario, even those in our unions, believe we have been fair.

Mr. Bradley: Mr. Speaker, in his desire to make this as fair a piece of legislation as possible, is the Treasurer prepared to give consideration to people who are in circumstances such as --

Mr. Laughren: How did you vote on this? How did the Liberals vote?

Mr. Bradley: I hear an interjection.

Mr. Speaker: Never mind the interjections; just ask the question.

Mr. Bradley: I want to remind the member of what the NDP government of Saskatchewan did when it was in power. It removed the right to strike from its hospital workers.

Mr. Speaker: Order.

Interjections.

Mr. Bradley: My question is to the Treasurer. In regard to those people who are in circumstances such as the public health nurses in Niagara are in, whereby they have been on strike since the month of May and are attempting to reach the principle of parity with hospital nurses, is the Treasurer prepared to make special provision for people in those circumstances so they can gain what they feel is justice? It would be an injustice to slam them down midstream in their negotiations at the present time. Will the Treasurer give consideration to that'?

Hon. F. S. Miller: Mr. Speaker, the right to strike has been present in the health units of the province. A number have gone on strike over the years for that principle or for others as they saw fit. That is proper. I guess any strike is an action by two sides to see which has the most staying power, negotiating power or whatever to get its way. There is always a risk in that action, not only the risk of immediate loss of employment on the one side or of service on the other, but that one will not get enough in the final settlement to justify the losses it took.

Looking at all of that, we still said that, where contracts within the last year have expired and have not been resolved, whether they were on strike or are still at work waiting for a negotiated resolution, we would set an upper limit of nine per cent for the year in place. Lots of people have taken that gamble. Some have won and some have lost. In this case, these people probably lost some of it.

Mr. Foulds: In regard to the Treasurer's economic package introduced two days ago, I wonder if I could ask him how he feels about restraining incomes like that going to Mr. Yacoub and his family? Mr. Yacoub has three teenage daughters. His wife is unable to work because of a back injury. She is currently trying to get a Workmen's Compensation Board claim without a heck of a lot of success. He happens to have relatives in Lebanon and finds himself in a very stressful situation. How does the Treasurer think that restraining this family's income is going to create one job in Ontario'? How does he feel that restraining this income is going to get the economy of Ontario moving again?

2:50 p.m.

Hon. F. S. Miller: That could take some time to answer, but, of course, we believe it will. I think the member has lost sight of the reason for the restraint package. It had nothing to do with the kinds of questions the Leader of the Opposition (Mr. Peterson) placed today about saving dollars in my budget.

It had to do with reducing inflation and making the dollars this gentleman takes home with him buy more products. It had to do with our borrowing less in the marketplace and seeing interest rates drop, as they did today. It had to do with restoring the confidence of people in cash, in the economy, in the future so that people will buy the products that the people out of work in St. Catharines and Windsor need. It had to do with all of those things, and it will succeed.

ONTARIO MUNICIPAL BOARD APPOINTMENT

Mr. Roy: Mr. Speaker, I have a question for the Attorney General (Mr. McMurtry), but in his absence I shall ask the Premier, on a subject with which he is most familiar: that is, his correspondence with Mr. Rosenberg.

The response yesterday by the Attorney General was not a very adequate defence of the administration of justice. Given the serious allegations made by Mr. Rosenberg about certain colleagues of his at the Law Society of Upper Canada -- for instance, Mr. Hoskinson and Mr. Goodman, fellow members of the bar -- and given the serious allegations, apparently, against even the Premier's office about making certain promises related to being the candidate for the Conservative Party and a judgeship on the provincial bench; given that these allegations, according to the Premier, Mr. Goodman and Mr. Hoskinson, are apparently totally unfounded, that there is no basis for them, with the resulting conclusion that Mr. Rosenberg lied and did not tell the truth, how does that make him an adequate candidate to dispense justice on the Ontario Municipal Board?

How is it that such an individual, no matter what his qualifications are, given that he has made such serious allegations, makes it to the OMB as a result of the Premier's appointment?

Hon. Mr. Davis: Mr. Speaker, I think the Attorney General answered this question, actually not yesterday but on Tuesday. I should make very clear what has been said to the press, and I repeat it here again today: To my knowledge no such promise was made.

Mr. Roy: I must state again that the Premier has today compounded what I consider the failure of the Attorney General yesterday to defend adequately the administration of justice. He is evading the question.

Apparently, Mr. Rosenberg is having a press conference today at which he will deny the allegations he made in his letter and support what the Premier is saying, that he made no promise. Therefore, he made serious allegations that were unfounded. He lied.

Given that result and knowing that, how does the Premier then proceed to appoint an individual such as this to dispense justice for the Ontario Municipal Board?

Hon. Mr. Davis: Mr. Speaker, I have no knowledge of when the press conference was.

Mr. Roy: At 2:30 today.

Hon. Mr. Davis: I have no idea what Mr. Rosenberg is saying at whatever press conference is being held.

Mr. McClellan: Mr. Speaker, will the Premier give us an undertaking to permit the referral that was made of this matter to the justice committee to proceed, and to permit the justice committee to undertake full consideration of these matters?

Hon. Mr. Davis: Mr. Speaker, on occasion I hear members of the House saying that the government tries to interfere with the activity of what is referred to a committee. I think I heard the honourable member say the other day that he was asking to have it referred. Surely he does not want me to dictate?

Mr. Roy: Mr. Speaker, I have a point of order. I should advise you that, pursuant to the standing orders, I think you will even agree with me, the answers are totally inadequate and the matter will be raised at the adjournment.

Mr. Speaker: You have not told me why you are standing.

Mr. Roy: I told you I had a point of order, pursuant, I think, to section 27 of the standing orders.

Mr. Speaker: All right.

Mr. Roy: What I am saying is that, as you are an objective person, you will understand that the responses given yesterday and today by the Premier were totally inadequate. As a result of this, I am forced to raise the matter again at the adjournment of the House.

Interjections.

Mr. Speaker: Order. The member for Downsview.

Mr. Di Santo: That is embarrassing for the government. I understand that.

Mr. Conway: Are there liars on the Ontario Municipal Board?

Mr. Speaker: Amusing as this may be, the member for Downsview has the floor.

Mr. Di Santo: Mr. Speaker, the Premier perhaps regrets having kept his only promise.

WORKMEN'S COMPENSATION

Mr. Di Santo: I have a question of the Minister of Labour. Can the minister tell the House if, at this time, he is willing to make a commitment to amend the Workmen's Compensation Act to increase the benefits of injured workers by 10.8 per cent, which is equivalent to the increase of the cost of living between July 1981 and July 1982, and to accept the recommendation we proposed to the committee yesterday that was rejected by the majority of his Tory colleagues?

Hon. Mr. Ramsay: Mr. Speaker, no one disagrees with the proposition that workmen's compensation benefits need to be periodically reviewed and revised. In fact, as honourable members know, periodical revisions have been made at irregular intervals for a number of years. For example, if one takes in the period 1975 to 1981, pensions were increased by some 88 per cent, which was virtually identical to the increase in the consumer price index over that same period.

With respect, it is incorrect to suggest there is any firm precedent for the timing of the revision. For example, over the seven-year period to which I have referred, three revisions occurred at intervals ranging from 1½ to three years. As members know, the last revisions became effective on July 1, 1981.

We are now engaged before the standing committee on resources development in a comprehensive review of the Weiler report and the White Paper on the Workers' Compensation Act. My understanding is that the committee intends to report its conclusions and recommendations before the end of the year. One of the issues before the committee relates to the methodology, timing and application of revisions to benefit levels.

Interim revisions would, in a sense, prejudge a fundamental issue now under consideration by the committee. If it appears that the committee's report or subsequent legislative action will be unduly delayed, it may be that interim revisions will be required. However, all indications are that the committee is on schedule and that we should soon be in a position to make final determinations.

Mr. Di Santo: I think that the minister is totally inaccurate starting from the figures he mentions. Since 1975, the consumer price index has gone up by 78.3 per cent while the pensions of injured workers have gone up by 55 per cent, as Professor Weiler writes in his report -- if the minister has read the report.

3 p.m.

In view of the fact that it is totally phoney that the committee is proposing to the Legislature to review the level of the benefits, and in view of the fact that the minister knows Professor Weiler has not even written his final report, after three years and a large amount of money paid by the taxpayers of Ontario, and that in June the minister said the same thing -- that he was not ready to make a commitment -- can he tell the House why injured workers are the only group in our society that is penalized by this government?

Hon. Mr. Ramsay: Mr. Speaker, with respect, the figures quoted by the honourable member are the figures that were quoted in a letter to several newspapers in this province by the leader of the New Democratic Party. I have had those figures studied and assessed and I do not agree with them.

Where the member is referring to a 55 per cent increase, let me state that in the period from 1975 to 1981 injured workers' pensions rose by 88 per cent, not 55 per cent, whereas for the same period the consumer price index went up by 88.2 per cent and the Ontario average industrial wage went up by 90.9 per cent.

Another factor that should be taken into consideration is that pensions for injured workers are tax free.

Mr. Wrye: Mr. Speaker, surely the minister will realize that a review of the past is really a red herring. Let me return to the original question. Since this House is now back in session and the committee, which was on schedule until last week, is now very much off schedule and may not be able to conclude its deliberations, does the minister not think it would be appropriate for him to take to the cabinet a recommendation for an immediate increase pending the committee's report and ministerial action, which probably will not take place until next year some time?

Does he not believe that this unseemly delay in increasing pension levels is probably the real reason that injured workers' groups that have come before the committee have urged us almost unanimously to reject the white paper's proposal to allow the cabinet to have control over reviews of benefit levels in the future?

Hon. Mr. Ramsay: Mr. Speaker, I would repeat what I said earlier: If it appears the committee's report or subsequent legislative action will be unduly delayed, it may be that interim revisions will be required.

JOB CREATION

Mr. Piché: Mr. Speaker, I have a question for the Minister of Natural Resources concerning an issue raised by the member for Sudbury East (Mr. Martel) in his question to the Treasurer (Mr. F. S. Miller) on Tuesday. The member inquired if measures would be taken to utilize the Cargill township phosphate deposits, located some 20 miles from Kapuskasing in the Cochrane district, to manufacture fertilizer in Sudbury.

Is the minister aware it would appear from this that the job creation strategy of the New Democratic Party is to create jobs in one area by destroying job opportunities in another? Will the minister take this opportunity to inform the House of his ministry's plans for the Cargill deposits, and to assure the House that his ministry will not pursue a resource policy which compromises a resource and the employment potential of any region of this province?

Will the minister say in no uncertain way that what has been suggested by the member for Sudbury East is not and will never be a policy of this government: to rob one region for the benefit of another?

Hon. Mr. Pope: He didn't really say that, did he? That is shocking. Is that why that party is in third place up there now? What is going on?

Mr. Speaker: Back to the question.

Hon. Mr. Pope: He should ask me. He has not had the nerve yet. Let him stand up and ask me. He did not show up at estimates. He did not have the nerve. Come on, stand up and ask me.

Mr. Speaker: Will the minister please address the question of the member for Cochrane North.

Hon. Mr. Pope: Let him show up tomorrow and engage me in questions and we will see how good he is. We will see how much he knows about the issue.

Mr. Speaker, I am shocked and amazed that the member for Sudbury East would make that kind of a suggestion. I know that resolutions of the Sudbury problems are required. I happen to agree with the member for Cochrane North that the way to go about economic recovery is not to process at other than source, and by that I am talking about the development of a fertilizer plant in Cargill township.

Mr. Martel: Where does the sulphur come from?

Hon. Mr. Pope: I am waiting for you; come on. I am waiting for you.

The way to do that is not to have a fertilizer plant in the Sudbury region because of the cost of transporting the phosphates to start with. There have already been discussions with Sherritt Gordon, and the member for Cochrane North is aware of them, and with the federal government and provincial government over the last years about the development of the phosphate deposit in Cargill township at source, to provide employment opportunities for the Kapuskasing area and to provide some economic diversification for Kapuskasing.

There have been meetings with the federal government.

Mr. Stokes: By using the sulphur from the Sudbury Basin --

Hon. Mr. Pope: What has the member done for it? What has he done except ask that it be taken away from Kapuskasing?

Mr. Speaker: Ignore the interjections please.

Hon. Mr. Pope: What has he done, other than ask to have it taken away from the district of Cochrane. That is his answer, "Take it away." That is always his answer.

Mr. Speaker: Order. Order. Will the minister please address the question. Never mind the interjections.

Hon. Mr. Pope: Can I go on for a little while? That has always been his policy, to take away from --

Mr. Speaker: Order. I am sure if we all listen attentively we will have an answer.

Hon. Mr. Pope: Mr. Speaker, we do not need more fertilizer in the Sudbury area from that member.

We are committed to developing this deposit in the district of Cochrane adjacent to Kapuskasing in the context of the demands of the company for this kind of a development and in the context of the work of the member for Cochrane North and the federal member to get a joint federal-provincial program going.

We have an industrial mineral program that we have made available to them and we are hopeful that this kind of development will take place using existing policies that have been introduced by the Board of Industrial Leadership and Development.

Mr. Martel: Mr. Speaker, I am absolutely delighted to hear the minister say that the government's policy is to utilize resources at the source. It being the case that they are going to process at the source, let me ask the minister when he is going to stop the shipment of nickel from Sudbury to Norway, when there has not been a pound of nickel refined from Falconbridge, lo these 50 years?

Mr. Speaker: Order please. That really is not a supplementary.

Mr. Martel: I am coming to that. It is certainly supplementary. Let us not play games.

Mr. Speaker: Let us have a supplementary then, please.

Mr. Martel: I want to know where the sulphur that is going to be utilized is going to come from. I want to know when the minister is going to stop the exportation of nickel from Inco to England and when this government is going to insist that all of the orders that are now outstanding, the exemptions, are going to be stopped so that the jobs that are created somewhere else will in fact occur in northern Ontario, not somewhere else for someone else's benefit.

3:10 p.m.

Hon. Mr. Pope: Mr. Speaker, there have been discussions already with respect to a number of sulphuric acid producers in the northern part of Ontario. Both Texasgulf and Inco --

Mr. Cassidy: Just discussions, nothing else.

Hon. Mr. Pope: The honourable member was up there in the last election. People had an opportunity to see what he would do to the resources: nationalize them. They told him what they thought of his policy on natural resources.

As the member is aware, sulphuric acid is being produced by both Texasgulf and the nickel producers in the Sudbury region. He is also aware that there is a market for some of that production. He is aware that the only reasonable alternative, which has been investigated and which is being worked on, is a pooling arrangement with respect to sulphuric acid, with deliveries both at the phosphate deposit source and a covering delivery system through the pooling arrangement to the other customers who are already on stream.

If the member thinks he is going to create more jobs in the Sudbury area by cutting off the export of nickel to Inco and Falconbridge refineries in Europe, he is wrong.

Interjections.

Mr. Speaker: Order. The minister has the floor.

Hon. Mr. Pope: We have had this debate before.

Mr. Peterson: We sure have.

Hon. Mr. Pope: Yes, we sure have. The issue is that there is export of nickel concentrate to the Inco and Falconbridge refineries in Europe. That is not the only source of their ore. The member is aware that Falconbridge, for instance. already obtains nickel concentrate from Botswana and also obtains nickel concentrates for refining from other sources, and could, using that refining facility in Europe.

Mr. Speaker, you are also aware that in order to gain access to the European community, which we vitally need for our resources, it is now a requirement that there be processing facilities in that location. If the member is aware of the need for us to access the European --

Interjections.

Mr. Speaker: Order. The minister has the floor.

Hon. Mr. Pope: Mr. Speaker, our policy will create more jobs than their policy ever could in the Sudbury region.

ASSISTANCE TO FARMERS

Mr. Riddell: Mr. Speaker, if we can set the levity aside for a minute, I would like to direct a question to the Minister of Agriculture and Food.

Mr. Martel: Do you know what the word means?

Mr. R. F. Johnston: Levity is lightness.

Mr. Riddell: I am not as stupid as you are by a long shot, my friend.

Interjections.

Mr. Speaker: Order. Now to the question, please.

Mr. Riddell: I would like to ask the minister what thought he has given to the devastating economic conditions that prevail in the farming industry today. For example, corn is $2.14 per bushel, down from $4 last year; soybeans are $5.78 a bushel, down from $7.35 last year; rye is about $2.30 a bushel, compared to $4 last year; barley is $2.02 per bushel, compared to $2.70 last year; pork is predicted by agricultural economists to reach an extremely low price level by Easter, followed by beef -- all of these far below the cost of production.

If the minister has given any thought to this, what programs is he planning now to prevent a large number of farm bankruptcies that we may see between now and spring of next year?

Hon. Mr. Timbrell: Mr. Speaker, I am very pleased the honourable member was able to get the floor today. He said he wanted to put aside the levity. I do not know what he calls that remark to the member for the third party. That seems to be the extreme.

An hon. member: And you are not going to be the judge.

Hon. Mr. Timbrell: I am certainly not about to judge which one is more inept than the other.

The member has outlined the difficulties with a number of commodities this year. I hope he is not necessarily accepting some of the predictions for the future. Certainly one cannot for a moment deny what has happened to certain commodities at the present time, but I hope he is not adding his voice to make some of the predictions for the future more credible. That would not do the farmers any favour, I can assure him.

The member will know that in 1982 we put in place a rather extensive program called the Ontario farm adjustment assistance program, under which applications have been approved to date for close to 2,700 individual farmers who, I think the member would acknowledge, would otherwise have been in extremely serious difficulty, or perhaps might even themselves have added to the bankruptcy statistics, as has happened in other provinces.

The member will also know that, to try to avoid some of the wide swings in commodity prices and farm incomes, we have been pushing in every possible way the introduction of a new national income stabilization program to cover all agricultural commodities. He will also know, I am sure, that that proposal of this government is supported by the Ontario Federation of Agriculture, by the pork producers, by the cattlemen both provincially and nationally.

He will also know that on July 12 of this year in Halifax, I tabled a formal proposal to the ministers of agriculture of the provinces and of the Dominion for the establishment of a steering committee made up of deputy ministers, to put in place the details of such a program.

I am sure he also knows I was not able to get a commitment from the Minister of Agriculture of Canada in regard to that concept. He probably also knows that the Minister of Agriculture of Canada promised another meeting by the end of August.

Today is September 23 and we have not had that meeting. If the member wants to help -- and I think he does; I am not questioning that for a moment -- then next Tuesday when we are in Lucan with the Minister of Agriculture of Canada, he will take him aside and say: "Now look, the time for delay has long passed. Give these guys a definite answer. Get on with the job of developing a better stabilization program for all Canada."

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

Mr. Riddell: I cannot let him blame the federal government. What about his young farmers credit program, the one that was announced in the budget and in the throne speech? What about that? They blame the federal government --

Mr. Speaker: Order.

MOTIONS

BUSINESS OF THE HOUSE

Hon. Mr. Wells moved that, notwithstanding standing order 64, private members' public business not be considered today.

Motion agreed to.

COMMITTEE SITTINGS

Hon. Mr. Wells moved that, notwithstanding the order of Friday, March 12, 1982, no committee may sit concurrently with the House during the debate on second reading of Bills 179 and 180.

Motion agreed to.

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

Hon. Mr. Wells moved that the standing committee on social development be authorized to sit the morning of Wednesday, September 29, 1982, to consider Bill 138, An Act respecting the Protection of the Health of the Public.

Motion agreed to.

3:20 p.m.

INTRODUCTION OF BILLS

PROTECTION OF RESIDENTIAL TENANTS ACT

Mr. Philip moved, seconded by Mr. Lupusella, first reading of Bill 181, An Act for the Protection of Residential Tenants.

Motion agreed to.

Mr. Philip: Mr. Speaker, this bill, which maintains the present six per cent ceiling on rent increases that can be made without approval of the Residential Tenancy Commission, further extends the protection of tenants by tying the total rent increase the commission can grant to the consumer price index between October 1, 1982, and October 1, 1983.

Small owner-occupied buildings would be exempt from the bill and the rent review commission could also grant increases above the index in those exceptional circumstances where to do otherwise would result in bankruptcy.

NOTICE OF DISSATISFACTION

Mr. Speaker: Pursuant to standing order 28, the member for Ottawa East (Mr. Roy) has given notice of his dissatisfaction with the answer to his question given by the Premier (Mr. Davis) concerning the appointment of Mr. Rosenberg to the Ontario Municipal Board. I would advise all members this matter will be debated at 10:30 this evening.

ORDERS OF THE DAY

INFLATION RESTRAINT ACT

Hon. F. S. Miller moved second reading of Bill 179, An Act respecting the Restraint of Compensation in the Public Sector of Ontario and the Monitoring of Inflationary Conditions in the Economy of the Province.

Hon. F. S. Miller: Mr. Speaker, I am pleased to have the opportunity to lead off what I assume will be a brief debate on Bill 179.

On Tuesday, when the Premier (Mr. Davis) announced the anti-inflation program, he told the House that no decision taken by this government has received so much attention, so much discussion and so much genuine concern. I want to echo those words because I want the House to know that we are keenly aware of the gravity of this initiative.

On Tuesday, as I indicated in my statement, I said we were dealing with over 50 separate labour organizations and our actions impact on over 2,700 collective agreements. They will ultimately affect 500,000 or more employees. To appreciate this program fully, it is necessary to understand the economic environment in which it was conceived. In this afternoon's debate, I would like to focus on the reasons behind it and what we expect it to accomplish.

In the last short while we have seen corporate profits decline dramatically. In 1981, they went down about 10.5 per cent and in the first quarter of this year the decline in those profits has been an astonishing 50.1 per cent. Of equal concern to me is that wage rates and unemployment are going up at rates which exceed those in the United States. I believe that with this decline in labour competitiveness combined with high job losses, high unemployment and sharp profit declines, one can argue for restraint on a national basis.

We as a government have always hoped that the solution to this problem would come from the private sector voluntarily. We still do. The province is not comfortable with imposing solutions on the marketplace. In recent weeks, I think we have seen encouraging signs that this kind of solution is actually happening in the private sector. Both management and labour in that sector seem to be responding to the strong market pressures, and these pressures are not felt as strongly in the public sector.

We do not make profits. We do not have shareholders to report to. A large number of our wage settlements are the result of binding arbitration and that is a process that is not really directly under our control. However, those facts in and of themselves do not necessarily justify wage controls. There is one fact I am going to give that does tip the balance.

In the last year, the Ontario public sector saw an employment increase of more than 15,000 people almost entirely in the education and health fields. During that same period, the private sector saw employment drop by 82,000 jobs. When policy makers are faced with that sort of situation, I think their duty is clear. We cannot permit unconstrained growth in the public sector when the private sector is undergoing its most serious crisis since the end of the Second World War.

The program we announced on Tuesday is a response to that situation. We want those in the private sector, be they management or labour, to know that the burden of the recession is not falling only on their shoulders. We can read public surveys that show people losing confidence in institutions at a very rapid rate. This affects not just governments but big business, big labour, universities -- in short, the very groups that we believe are the cornerstones of our society.

Faced with that kind of situation, we felt it was our duty to take steps that would help restore confidence in the public sector. I can tell this House that from the response I have had in the past 48 hours, the actions we took on Tuesday have gone a long way towards fulfilling that goal.

Just yesterday, I had the chance to speak with citizens all across the province on radio shows and in other ways, and they were applauding the very actions we took. I would like to ask the members opposite, those who have criticized this program, to get on the phone to the unemployed workers in Windsor and ask them whether they really believe a public servant should have not only job security but also an inflation-related raise. Ask them if that is fair when half a million people are unemployed in Ontario.

I even go one step further. I believe that if we asked the average public servant in this province whether it is fair, that person would respond in the affirmative. In fact, I challenge any of us here to find any public servant who in this economic climate would be willing to trade his or her job, with its security, for that of an auto worker in Windsor or a miner in Sudbury.

3:30 p.m.

Mr. R. F. Johnston: Why should they have to? What kind of straw man are you, trying to divide the workers against each other?

Am I stopping your flow? I am sorry.

Hon. F. S. Miller: The honourable member is not stopping my flow; he is making a fool of himself.

Mr. Speaker, I will be here to listen to each member as he stands up. I intend to sit here, as I usually do, listening to what members say and trying to assess it. I hope the rest of the House does. I only ask the same courtesy from the member.

The Deputy Speaker: I think that is fair. The Treasurer has the floor.

lnterjections.

The Deputy Speaker: Come on. Let the Treasurer continue.

lion. F. S. Miller: In my remarks Tuesday --

Interjections.

Hon. F. S. Miller: Mr. Speaker, I will resume when they are quiet.

lnterjections.

The Deputy Speaker: If the Treasurer will be kind enough to attempt to continue, I will seriously monitor all the interjections.

Hon. F. S. Miller: In my remarks Tuesday I indicated that one of the main objectives of this program --

Mr. Laughren: Do you feel you have the protection you need now, Frank?

The Deputy Speaker: Come on, member for Nickel Belt.

Hon. F. S. Miller: At least I have had to have protection once in a while. That is something the member has never had to have, because he has never taken an action that required any courage.

Mr. T. P. Reid: Going to an NDP caucus takes a lot of courage.

Interjections.

The Deputy Speaker: Order. As all members well know, every member will have an opportunity to be heard. Interjections are allowed from time to time, but continual conversations such as those from the member for Nickel Belt (Mr. Laughren) and the member for Scarborough West (Mr. R. F. Johnston) are not allowed. I ask them to refrain slightly, please.

Hon. F. S. Miller: I want to spend a few minutes today highlighting why this is such a necessary objective of our program. About 50 per cent of government expenditures are wage-related, and in some areas, such as hospitals and schools, more than 70 per cent of spending goes for wages and salaries. In other words, if you want to restrain public sector spending, you really do have to constrain wages first.

The government does not stand to profit financially from these constraints. We are not saving money that we already have. Rather, we are preventing our borrowing from increasing quickly or unconstrainedly to the point where our ability to borrow that money would be impaired, as members know has been the case in quite a few jurisdictions.

I sometimes believe that members opposite do not understand that the high credit rating we already have is not just a status symbol; it is concrete evidence to investors that Ontario is a secure place to put their money. To the taxpayers of Ontario, I want to say it is a great saving in the cost of that money. We need more investors to have confidence in Ontario, because their confidence will translate into jobs, and that, of course, is this government's main priority.

At the International Monetary Fund meeting, I was told over and over again by investors from around the world, including Japan and West Germany, that they want to invest in Ontario because it is one of the places in the world where government spending seems to be well managed.

As the Premier indicated last Tuesday, we are prepared to join with Ottawa in any appropriate economic recovery program. We are also prepared to act on our own if that leadership is not forthcoming. However, such stimulative initiatives always have a cost attached. We must have fiscal flexibility if we are going to respond to those needs.

A year from now, I will judge whether this initiative was a success or if it helped to blunt inflations rise. Too often when we devise solutions we expect them to have immediate and sweeping effects. In my own business career I have found that such solutions are rare. Instead, the decisions that tend to make a difference are the ones that yield small amounts of savings here and there. When you total those actions, they are the difference between a profit and a loss.

I believe our actions will help the fight against inflation in three ways: (1) public sector cost reductions passed through to the private sector in the form of lower tax increases, user fees and charges for government services, (2) decreased government demands on the capital markets to ease pressure on interest rates and (3) the demonstration effect, signalling an era of lower wage settlements to the private sector.

Of all those effects, I think the third is the most important, because the problem this country faces today is as much a psychological problem as it is an economic problem. Canadians seem to have a set of inflationary expectations that are very hard to unlock. I do not pretend to know what the exact key to it is, but my job as Treasurer is to take this black art of economics, look at the theories, look at the perceptions of human behaviour and then meld them together into a policy.

For example, I look at our high saving rates. The fact is that we are not going to get this economy moving until people take their money out of savings certificates and start spending or investing, whether it be by buying stocks, homes, cars or whatever. Until we have restored that confidence to spend and to invest, we will not recover.

Therefore, the big task facing those of us in government is how to restore investor and consumer confidence. There is a two-pronged approach. First, investors have to know that this country is a stable haven for their money. That is why I think the triple-A rating is important. Second, consumers have to see evidence that wage settlements are moderating and that prices of goods and services are not rising at such a rapid rate. That is why this legislation is crucial.

In considering this bill, I ask the members of this House to remember the words of an American economist, Mr. Alfred Kahn, who said in discussing the fight against inflation:

"The problem in our economy is that we have these persistent, well-organized pressures by each individual and group to preserve his or her absolute position regardless of what happens to the country as a whole. What this does is create, on the part of everyone in society, the expectation that no matter what happens to the aggregate, each of us is individually entitled to CPI plus three per cent. What we have got is those constant forces to increase expenditures, to increase nominal incomes and to expand government programs. It is clearly something that has to do with a lack of social discipline."

In closing that quote, I would like to say that I believe a democracy can discipline itself. It can take actions that break our inflationary expectations, restore confidence, and give unemployed workers new hope and new jobs. That is what this program does and that is why it deserves the support of every member in this House.

The Premier mentioned that there should be a second phase in Canada, not only to our program but also to the federal government's. I would like to share very briefly with the House our approach to that.

I met with the new Minister of Finance for Canada last week, and I have had similar contacts with my colleague from Quebec. I am confident that we can develop a co-ordinated approach to the problem of unemployment, and I hope I can report further details to the House as we conclude our negotiations with him in the coming months.

3:40 p.m.

The Deputy Speaker: The member for London Centre.

Mr. R. F. Johnston: "I rise to support this bill."

Mr. Peterson: Mr. Speaker, my friend is getting a mite sanctimonious these days.

Several weeks ago, my party put its economic recovery package before the people of this province. We proposed equitable restraints. We urged control on wages and prices. We set out an ambitious platform for recovery and for jobs. We pleaded with the government to get on with the urgent task of modernizing and revitalizing our industrial base. We called for the real and lasting solutions that this province so desperately needs.

Finally, on Tuesday, we had the government's response. After a gestation period of several months, they have delivered the five per cent solution to us all. What is regrettable is that it says it all. The program before us is only five per cent of the solution to the economic problems facing this province. It is only the first step, a small step towards recovery. It is a vital step. I agree, but only the first step.

There is nothing in this program that will take us the distance: nothing to create jobs, stimulate investment or promote economic renewal. There is nothing in this program to reverse the tremendous decline in Ontario's economic fortunes since the last provincial budget.

When my party introduced its alternative for restraint and renewal some time ago, I said we were eager to co-operate in the reconstruction process. We are not a party that puts its head in the sand or refuses to deal honestly with the realities of the 1980s, employing the rhetoric of a century ago.

We are still eager to co-operate today, but a reconstruction process is just that; it takes time, it requires full public support and participation and it demands innovative thinking from government. The job of rebuilding Ontario cannot begin and end with the five per cent fiat on public sector salaries.

As I have said all along in this critical debate, we are not a party of obstruction. We are glad the Premier (Mr. Davis) and his Treasurer (Mr. F. S. Miller) at long last have made a decision, and we want to encourage them on this course. We will support the step taken and the measures the Treasurer and the Premier have put before the House. We have reservations, and I will discuss those today. We want to see a full and thorough debate on the many points of concern, but the Liberal Party will not block this bill.

What we will block, however, is an attempt to pawn off these initiatives as a recovery policy. They are nothing of the sort. If they are not followed up immediately with programs to create jobs, the five per cent solution will become nothing more than a cheap and superficial gimmick, a cruel joke upon thousands of Ontario people who have been plunged into confusion, helplessness and anger by the steadily deepening recession we are facing.

Ontario is headed for the worst winter in nearly 50 years. Every member of this House is profoundly aware of the crisis. Each has experienced a growing litany of human calamity that is unfolding daily in his or her constituency office. It is no time for partisan rhetoric or dogmatic diatribe. It is time for an honest effort by every legislator in this House. It is a time to grapple seriously with the gravest threat to Ontario we have known in decades. It is a time to put special interests aside in favour of the public interest, a time to abandon confrontation in a search for consensus. This is the tone my party would like to bring to this debate.

We will speak with urgency about the pursuit of jobs, because in our judgement the situation has never been more urgent. A real recovery plan is needed now; not a year from now, not three months from now, not after the last federal budget, not after the next provincial budget in the spring, but now. In fact, it should have been introduced at the very same time as the restraint program.

There is no excuse for the dithering and delay that have kept us away from this House for some three months. The step that the government has taken is long overdue. It is a step that easily could have been taken within weeks or even days of the announcement of the federal program last June and, indeed, the announcements of other provincial programs across this country.

Uncertainty has been plaguing Ontario and Ontario workers all summer. Since July 1, when this program could have been introduced, the number of Ontario's unemployed has risen by more than 80,000 people on a seasonally adjusted base. The numbers I have, and they are only until the end of August, show that there were 5,000 more unemployed in Sudbury than at the end of July and 5,000 more unemployed in Kitchener-Waterloo.

In Toronto, unemployment has more than doubled since a year ago, from 74,000 to 161,000. In my own home town of London, the number has gone up dramatically. In Windsor it has almost doubled. In Hamilton, unemployment is currently 36,000, nearly three times what it was some 12 months ago.

If the Treasurer does not think the first priority is jobs, he should look for another job himself. The people of Ontario will not tolerate this delay, evasion and avoidance of responsibility for conditions as severe as they are.

What else has been happening while the government has been biding its time? Let me tell the members. Industrial output has continued to fall. Capacity utilization in the manufacturing sector dropped by a further 2.2 per cent in the second quarter alone. Housing starts were down by 32 per cent this year and were still dropping in July. August looks even worse for the construction industry.

There have been more than 700 bankruptcies in Ontario since the beginning of July. Layoffs in firms of 50 employees or more are up by 167 per cent over 1981. In July, the increased layoffs amounted to a 34 per cent increase over the previous month, and I have not got all the statistics for August.

What it all adds up to is neglect by the government. By any estimate, human, economic or mathematical, Ontario's people are underemployed, its capital is underemployed and, given what it has taken three months to produce, I can tell the House that the Premier's and the Treasurer's minds have been underemployed too. Of course, I am not suggesting that there is any direct relationship between the two.

We support the five per cent restraint program as far as it goes, but we urgently need a job recovery program now. We have already lost too much time fiddling with the five. We cannot afford any further delay, and my party will continue to insist that we take the second crucial step to recovery now.

With these preliminary points in mind, let me turn first to the general principle of the package that is before us. On this side we have a great number of concerns with the legislation, some minor and some not so minor. We would like the government to address them, and we would like to have a full debate in this House and in committee to make sure we can forge the best piece of legislation possible in the circumstances.

As I have said many times, our party is in full support of legislated wage and price -- I repeat "price" -- restraint at this time. Although wages, particularly in the public sector, have not led the domestic inflationary spiral in recent years, there is no question that rising labour costs have contributed in a major way to the erosion of Canada's competitive position relative to many of our trading partners.

Nearly two thirds of our expenditures in Canada are for wages, and we have simply priced ourselves out of too many world markets. We have simply failed to achieve the productivity increases that are necessary to support higher labour incomes that were won during the 1970s.

3:50 p.m.

In the United States, which is our largest trading partner, wage and salary increases have plummeted to an average of less than six per cent annually. Because nearly 70 per cent of Canada's exports are to the United States, and because this province accounts for the bulk of those exports, it is absolutely vital that our wage and salary settlements be brought into line with those in the United States.

If we do not achieve this objective soon, Canada and Ontario cannot hope to participate in any worldwide economic upturn. Our exports simply will be too expensive relative to the cost of equivalent goods and services in foreign markets and particularly in the United States. It is a fact of life that if we want to benefit from world recovery, then wages and salaries and our entire inflation rate must be severely curtailed.

Prices too must be curtailed. Since one person's prices are someone else's wages, we need both restrained in equal measure. Administered prices are a particular villain; they are often charged in monopoly situations and they are not subject to the accountability of the marketplace.

In recent years, prices under government jurisdiction have risen at twice the rate of private sector prices. This must stop. We need a very firm dose of restraint on regulated prices and other prices administered by government.

What we have all been doing for far too long is taking more out of the economy than we have been putting into it. Restraint is the only way to restore some semblance of balance between consumption on the one hand and investment on the other.

Mr. McClellan: Especially for hospital workers. Especially for clerical workers.

Interjections.

Mr. Peterson: The New Democratic Party members are doing a lot of yapping and, given their lack of understanding of the subject, I can understand why. Yesterday the leader of the New Democratic Party said, "It's extraordinary logic that dictates wage controls as the answer to the highest levels of unemployment in Ontario since the Depression." What we were given yesterday by the leader of the New Democratic Party was the left's version of voodoo economics.

If the pie is shrinking and everybody wants a big or bigger piece, then eventually someone is going to go hungry. That is why wage demands that exceed the real growth of the economy are pushing people out of work in other sectors. My friends in the NDP would say, "Well, bake a bigger pie." That might work if people's appetites did not grow quite as fast as the pie. That is what restraint is all about.

We need a two-pronged policy of wage and price restraints within the context of building a broader industrial base. I would rather have a lot more people working for a little less than a lot fewer people working for a little more.

Restraint alone, however, is no cure to our economic malaise. In fact, unless it is balanced by policies that stimulate investment, modernization and industrial expansion, a policy of wage restraint could lead to even greater jobless rolls. By controlling wages at below the rate of inflation, we are effectively reducing real consumption in the economy. That is why price restraint is critical.

A drop in real disposable income will mean fewer purchases, fewer jobs and even lower consumption after that. The only way to combat this threat is to bring in the second stage of the policy now. We need investments that will spur productivity on the nonlabour side to further deflate the real cost of goods and services. We need incentives for new industry and for modernization of old industry to create jobs and effect a real boost in consumption.

The economics of restraint dictate that money saved on one side of the ledger must be spent on the other. Inflation-fed consumption must be sacrificed for investment-fed expansion. That is why the second stage of this program is so critically important.

Without wage restraint now, however, there can be no hope. Any short-term gains in disposable income will be illusory. Real growth opportunities would only be swallowed by further price inflation. Price inflation would continue to be sustained by wage costs and by declining productivity owing to our ageing industrial infrastructure.

Continued high inflation and the interest rates it brings could only be a further deterrent to investment in plant and equipment. This is the quagmire from which we must escape. That is why wage and price restraints are such a vital first step.

But it cannot be just any wage and price restraint program. If it is to work, it has to be fair and it has to be seen to be fair. It must call upon every part of society to bear the burden of sacrifice, including the corporate sector.

The greatest flaw of this and other programs across Canada is that they single out only one sector, the public sector, to shoulder the load. I hope, of course, and I am sure the government hopes, that the private sector will fall into line. There is no question that the issue of job security for public sector employees tends to soften considerations of equity and wage restraint.

I am concerned about equity on the wage side but perhaps less concerned about that than I am about the price side. I am quite confident that most private sector employers would be happy to comply with that part of the program. In fact, I am led to believe that private sector settlements are already coming down and are in the range of eight per cent or so at present.

What worries me more is the price side. This program places no obligation on private sector companies to follow the five per cent guidelines, except in limited cases. We all know that there could be hundreds and hundreds of justifications for excessive price increases and that there will be a hundred justifications in the coming months.

In my view, equity demands a comprehensive control program for the private and public sector. My own party is on record as being in support of such an approach.

The Premier has been very interesting and, in fact, has fudged on this issue. On the one hand, he has asked this House to give first reading to a bill in which he has asked for the authority to participate in any national private sector control program. On television the other night, though, he said he was not asking for a controls program from Ottawa. Then the Treasurer said he was sending a signal to Ottawa, whatever that means.

The sum total of this government seems to be that maybe we need a national control program and maybe we do not, but if someone in Ottawa thinks we do then it will go along. In my judgement this is an abdication of responsibility by the government, a government that runs the most populous and wealthy province in this country and the one that still has the most to lose.

I want to remind the Premier of what he said in the House on June 29, 1982, the day after the federal budget was introduced, at a time when he still professed to believe in equity.

"I think people are looking for leadership from their governments, leadership that at this moment in our history sets aside partisan distinction, and a degree of leadership that will make economic stability an absolute priority. . ." He went on, "What is required is some clear and resolute leadership."

Clear and resolute leadership indeed. Through three months of delay, the Premier has lost his chance to show leadership on the issue of public sector restraint. In his heart, he knows that equity demands a more comprehensive program. Otherwise, he would not have brought forward his request for authority to opt into any federal program, should it ever develop.

I challenge him today to show that clear and resolute leadership. Why does he not make a formal request for a national control program on wages and prices? I challenge him today to ask for a federal-provincial first ministers' conference to consider such a national plan, not piecemeal plans across this country. That is the kind of leadership we need.

I want to speak for a moment, if I may, about doctors' salaries. In our judgement, at the very least the Premier has to take a strong position on the issues of equity within his own jurisdiction. The issue of the doctors' salaries is an excellent example. It would be wrong to allow the appearance of fairness to be undermined by letting the doctors' settlement stand. Their increase for the next year should be rolled back to five per cent as will everyone else's. I hope doctors will accept such a rollback voluntarily because, believe me, they are responsible people and I believe that with the proper leadership they would be prepared to do that. Let us not forget that they bargained last year under a very different set of circumstances than they have now.

I will be very interested in the outcome of the current discussions between the Ontario Medical Association and the Premier. If doctors do not choose to comply in some way or other with the intention of this legislation, then I believe that this government and this House have to be prepared to deal with the matter appropriately.

4 p.m.

There is no reason a doctor earning $80,000 should get a higher percentage increase than a clerk who is making $15,000. Both are paid from public funds, and both have to live by the same rules. Of course there are arguments, and we have heard them already. First we are told the contract with the doctors is already in place and it should not be reopened. What does the government think it will be doing on December 31 with the office and clerical workers? The second year of their contract is already in place. It will be opened up and rolled back. Why a double standard?

Then there is the argument that doctors are really private sector workers. The Treasurer called them independent entrepreneurs; the Premier called them self-employed professionals. In the program, however, it is clear that private sector activity that is funded by the province will be forced to comply with the wage guidelines.

Let me quote, if I may, the relevant passage: "privately owned parapublic-sector companies contracted to or funded by the province, a municipality or other government agency to provide public services, including nursing homes, ambulance services, private hospitals, garbage contractors, contract group homes," etc.

Are doctors not funded by the province to provide a public service? Do they not fit equally into this category of private sector employees who are covered by their program? Why do we need a double standard? On this side we will be very concerned if the doctors are exempted. It would simply be unfair and unjust to allow them to be immune from restraint.

From the perspective of equity it is also regrettable, in our judgement, that the five per cent rule is to be applied so rigidly. While an attempt was made to cushion those at the bottom of the wage scale to some extent, the results are meagre -- indeed, so meagre as to be laughable or pitiable if you happen to be living on the receiving end.

Let us take a clerk who earns $15,000, for example. The maximum increase he or she can receive under this program is 6 2/3 per cent. Surely we can do better within the five per cent guideline to help those who suffer most from the ravages of inflation and the squeeze of the recession.

In British Columbia, a sliding scale was introduced that provides for increases from zero up to nine per cent within an overall average increase of five per cent for the public sector for the second year of their program. I would like to see us improve this bill by taking a more innovative approach to helping those at the lower end.

British Columbia and Newfoundland have both achieved more in this area than is being proposed for Ontario. We can improve this bill if we follow their example. My party would like to know the views of the Ontario Public Service Employees Union before proposing any amendments to this effect.

We are very concerned about the firm control of administered prices. The provisions as they now stand are full of loopholes. First, all sorts of cost increases, such as the purchase of goods and services, interest, depreciation and taxes, can be fully passed through to the consumer. This criterion alone will enable regulated industries and crown agencies to avoid the pill of restraint. Bad management decisions, mistakes and simple waste can inflate cost, which in turn can be passed on to the consumer.

The proposals for price restraints are much weaker than those for wage restraints and require far more careful administration. While uncontrollable feedstock costs legitimately need to be passed through to the consumer, great care must be taken to ensure that these costs are legitimate.

Moreover, the five per cent limit on increases in profits must be seen clearly to be a ceiling, not a guaranteed increase. Every regulated company should be forced to justify any increase in its allowed return on common equity based on past performance and the prevailing environment in which it must operate.

Two rate applications now before the Ontario Energy Board, those of Consumers' Gas and Ontario Hydro, will provide the true test of the government's commitment to restraint. In the case of Consumers' Gas the company is at present allowed a 6.25 rate of return on equity, and it has requested an increase to 7.25 per cent for the next year. Restricting the company to a five per cent increase in profits would allow for a mid-range rate of return of 7.06 per cent.

But even this magnitude of increase cannot be justified, in our judgement. Witnesses for the OEB have testified that the allowed return for Consumers' Gas should in fact be reduced to 5.8 per cent this year, and the new restraints on wages may allow this to decrease even further.

Since the return for a regulated company is decided largely on the basis of alternative investment possibilities, in a time of decreasing interest rates and bank yields the return should decline. It is ironic that a company like Consumers' Gas could increase its after-tax profits as a result of the same regulated interest rates that have been crippling so many unregulated industries. The problem should not now be compounded by allowing an automatic and unjustified five per cent increase in profit.

As for Ontario Hydro, I have already made the Liberal Party position perfectly clear. This crown corporation should be explicitly restricted to total rate increases of no more than five per cent without provisions for any cost pass-through. There is more than enough room amidst the unnecessary expenditures and increases in unneeded capacity to trim costs efficiently to keep increases below five per cent.

Ontario Hydro will be the first big test of this government's commitment to price restraint. Already, in a scathing report, the Ontario Energy Board has slashed Hydro's request for a rate increase from 13.9 per cent to 8.8 per cent. Since then, new factors have come into play. Wage costs will be lower than anticipated, inflation will very likely be lower than assumed in the report, bond interest rates seem to be falling more sharply than expected, and of course the mismanagement of Hydro is being allowed to continue.

Over the past few years we have witnessed usurious uranium contracts. Projects have been started, then cancelled; brand new generating stations are in mothballs; millions are paid out for oil that is not to be delivered, because the plants in which we were to use it are not in operation -- $33 million last year and another $27 million this year because of bad planning. These mistakes -- and we have catalogued them before: $2.2 billion, in our judgement -- are being paid for by the consumers in Ontario.

Will the government of Ontario take charge of its affairs to prevent these pass-throughs under the restraint program? That is the question. Will they finally get Hydro under control, or will Hydro continue to run our friend the Minister of Energy (Mr. Welch)?

We will be watching Hydro closely, not just because it is a symbol but because it has been ripping people off in Ontario for years with its abuse of public funds. If the federal government can force Bell Canada to back down from 25 per cent to six per cent, Ontario Hydro can surely be ordered to bring its rates down from 8.8 per cent to five per cent or less. That is the big test we will be watching very closely.

We believe that pass-throughs in all cases must be watched very carefully. The government should scrutinize every cost meticulously, even to the point of assessing questionable management policies in so many of our public agencies. Unless administered prices are kept firmly within the five per cent guidelines, the credibility of the whole program will be destroyed.

I have already stated our conviction that the potential of this program is inherently limited by its restricted scope. I have talked of the need for broader controls and greater equity. Now, Mr. Speaker, let me turn, if I may, to some of the other issues that concern me.

The program is designed to last only for one control year. For two reasons I do not think this is adequate. First, a one-year program does not import the degree of seriousness that is required if the government hopes to convince the private sector it is serious about restraints. More important, however, the short duration almost totally undercuts the very purpose for which we are participating in this restraint exercise.

Surely we want to use this period of controls to bring about a major restructuring and modernization of our industrial base. Have we not learned from our mistakes during the last period of controls? We should use this time as a breathing space to get our economic house in order for the long haul.

What worries me is that the government at this point seems to have absolutely no idea what it plans to do in this critical area over the life of the program. The absence of a clear recovery program at the outset of this period of controls only strengthens the argument for an extension of its duration. We will need time and a long period of price and wage stability to put the right fundamentals in place for restrained recovery.

We would prefer a longer period of time, with the option of extending it if necessary. We hope the government, in the light of its failure to bring in an economic recovery program, will see the wisdom of this suggestion.

4:10 p.m.

One serious disadvantage to a wage control program that is not balanced by an equally rigorous price controls mechanism is the possibility of post-control catch-up settlements, particularly in the public sector as unions grapple to regain lost ground in relation to prices. Once full strike and collective bargaining positions are reinstated in 1984, and this will be a distinct likelihood, we will lose all we have gained through restraint. The inflationary cost-push cycle will be triggered again and we will be mired in the same dilemma from which we are now trying to escape.

For this reason, price control is of paramount importance and, I repeat, consideration of broader controls is warranted. But we must also take time in the committee to study fully the decontrol phase. We must ensure now that we are prepared to handle the problems that will inevitably arise when the program is lifted.

Let me also say a word about the removal of the right to strike. Obviously, if wages are to be strictly controlled, job action must be severely limited, but my party is concerned about the right to strike and the principle it represents. As far as possible we want to see that principle preserved through this period of restraint. Therefore, we are going to request the committee re-examine the legislation to see whether it is possible to retain the right to strike on nonmonetary questions such as health, safety and working conditions. We recognize the legal hurdle that is involved, but we are hopeful that by adjusting the definition of a contract in the present legislation some gains could be achieved.

I want to stress that the manner in which these programs are put together continues to bother me. In my view, the serious economic crisis we are facing afforded a first-rate opportunity to forge a consensus, to win voluntary sacrifice in the public interest and to begin to put a whole new face on the relationship between government, business and labour.

I fear the opportunity has unfortunately been lost by the denial of open dialogue and consultation prior to the program's introduction. Secret meetings were held and the press was kept in the dark. The whole strategy seemed to be based on the premise that public discussion of the difficult choices for Ontario would inevitably lead to the old-style confrontation politics.

I believe the era of confrontation politics is ending in Canada. While my friends to the left are trying to keep it alive, of course, they are foundering in the backwater of public opinion, fighting a rearguard action. People do not want that confrontation. They want to know what will work, and they want to be consulted. On this issue of restraint, at least, there seems to have developed a broad consensus among the public. According to the latest polls, support for public sector restraint exceeds 60 per cent even in union households.

I am no great fan of Premier Bill Bennett, but I think the recent British Columbia experience provides an interesting model for salary negotiations across Canada in these difficult times. Wages were restrained, but those who were asked to sacrifice had a say in how the savings --

Mr. Foulds: They are the Premier's former advisers out there. That is the Tory party west.

The Acting Speaker (Mr. Cousens): Order.

Mr. Peterson: Over four months ago, well before the federal program was introduced, I called for a public process of hearings to be initiated by the Treasurer for the purpose of considering the budgetary and economic options that confront the province. I wish he had followed my suggestion. I am convinced we could have had very fruitful and positive debates on many of these questions. More important, we probably would have reached this juncture today with a far wider consensus around the measures that need to be taken.

If this national restraint effort is to be more than just a one-shot attempt at forging a national economic will, we have missed an opportunity to redefine the economic partnership which is Canada. We should be focusing heavily on the process of economic decision-making today. If we hope to build a truly co-operative and productive spirit into the society in which we live, and if we hope to emerge from this period of restraint with our social partnership intact, we must recognize that increasingly the process is the product.

This process of collective, open decision-making which I am endorsing is the means by which we can and should seek to make all our future adjustments between interests, between classes, between wages and profits, and between consumption and investment. It is only in the collective decision-making process that the interest of the whole society rather than of its various parts can be filtered, woven together and articulated.

I urge the Premier and the Treasurer to begin today to redeem the process by which they have brought forward this legislation. I urge them to consult with the public sector on the reintroduction of the right to strike for nonmonetary issues. I urge them to consult with the public service on the matter of sliding scales. Finally, I urge them to consult with the public service and others to find out how they feel about the savings gained at their expense and how those savings should be spent in Ontario. In my view, there is nothing to fear from such a course. While the very fabric of our economy is in such deep crisis, there is a tremendous commonality of interest in Ontario. It is called survival.

The savings from this restraint program are still very unclear. On Tuesday we were told the savings were not yet known. In the Toronto Star the Treasurer said he would put the figure at around $840 million. The director of fiscal policy stated the total savings to the province would be in the $420-million range, spread out over three years with the bulk of the savings in 1983-84. Approximately $50 million will be saved in this fiscal year as a result of reductions in expected wage settlements, particularly in the fourth quarter. These are real savings because they are reductions in budgeted expenditures. The other $380 million are, in a sense, only theoretical savings relating to the difference between controlled wage increases and forecast increases without control. Compliance by doctors would add another $81 million in real savings.

Trying to calculate what is real and what is theoretical is not easy. It reminds me of the story of a chap who missed the bus and ran to the next stop to get on it and missed it again. He ran to the next stop and missed it again. Finally he ran all the way home. He said to his wife, "I just missed the bus, but I followed it home and saved 75 cents." She said he was silly; he should have followed a taxi and saved $4.

Whatever these savings are, it is the view of this party that every cent should be ploughed immediately back. This is the key point. Whatever those savings are, and we can disagree on them, they are substantial, and whatever those savings are, they should be ploughed back immediately into the economy to spur jobs and to spur investment. That is the key. If I have one message I want to leave with this House and the Treasurer today, that is the key.

The government must exercise its responsibility in this area. All the available resources must be channelled towards productive investment by the public and the private sector. This is the crucial missing part of the program that is before us. We need a commitment to redirect real savings from both restraint and the elimination of waste. They have to be directed into jobs and into growth.

Ever since I was elected leader of this party, I have been talking about jobs. Jobs have to be the centrepiece of any economic recovery package. Where is the commitment, any commitment, from this government to meaningful and lasting employment opportunities? The people of this country and province are willing to sacrifice if they are given something to sacrifice for. We must not allow this unique opportunity to restructure our economic base to pass without a real effort to put the fundamentals in place.

Where is our commitment to increase our investment in high technology? Where is the spending on research and development? Where are the programs to train our young people for the complex skills of the modern labour market? Where is the money for better husbandry of our own resources? Where are the incentives for the private sector to modernize plant and capital? That is what we are missing.

The real fight against inflation and unemployment will not be won by temporary wage restraint. It will only be won by a vastly improved productivity, vastly improved industrial competitiveness and a vastly improved world marketing capacity and better labour relations. Wage restraint can only provide breathing space. On the public and private investment side, we need growth, not restraint, and strategies of expansion rather than retention. Our economic engine needs the grease of investment now.

Frankly, I am frightened by what I see happening to our industrial base. Since the middle of 1981, business investment has plummeted to the point where it is no longer even keeping ahead of inflation. Currently, we are actually disinvesting in real terms in plants and equipment. Capital spending in Ontario for 1982, in all sectors except housing, has increased by an average of only 4.2 per cent and original projections have been revised downwards to almost nine per cent. In Canada as a whole, the manufacturing sector is actually spending 4.1 per cent less on capital improvements than it did last year.

Bluntly and simply, we are letting our economic engine run down. We must reverse these potentially devastating trends if we want a strong and modern economy that is able to compete in the 1980s and 1990s. We must start to put back far more than we are taking out.

4:20 p.m.

Wage restraint set the stage for such a shift in spending in our economy. As we bring inflation and interest rates down, investor confidence must be reinforced by government policy. We must encourage the business decisions that the climate of uncertainty has deferred for so long. The government itself must take the lead by showing its own determination to invest productively for tomorrow. We desperately need jobs now.

We need to stimulate further the job-intensive construction companies. What are we going to do about it? Why do we not examine some innovative techniques to assist that sector further?

What about a mortgage indemnification scheme so that buyers could be protected by insurance for interest costs above a guaranteed rate? Such a program could be self-supporting.

What about housing and employment development bonds such as were recently offered in British Columbia? Some of those could be offered to public sector employees as part of their compensation.

What about extending the renter-buy program to resale homes so that we can more fully exploit the domino effect of home sales to stimulate the durable goods industry and to create an additional final demand for new home construction?

These are some of the innovative options we should be pursuing if we are serious about jobs. There are many more -- in the auto parts industry, in the high-technology manufacturing sector and in communications. There is much we can do to provide more work for the thousands that desperately need it.

Just last week, Larkin Kerwin, chairman of the National Research Council, issued a statement that indicated a real commitment to research and development could double current industrial output and create 650,000 new jobs by 1990. Three per cent of Canadian industrial companies, those that qualify as high- technology firms, are already contributing eight per cent of the total gross national product. The federal government has led the way with a 34 per cent increase in R and D spending from 1979 to 1981. The secondary-industries sector has increased its spending by over 40 per cent.

The government of Ontario has a major and important role in this area. We have the resources, if we can only get our priorities straight. The billions that have been spent on land assembly, advertising, consulting fees, Minaki Lodge, Suncor and other bottomless pits should be put where they can create new industries, new jobs, new revenues here in Ontario. The combined stimulus potential of savings from restraint and waste elimination could provide a fantastic boost to this province's economic prospects. There is need to commence a program like that now.

I recognize that the selling of the jet was an important, symbolic step in reducing waste, but it is not enough. The issue of government waste is more than just another political forest fire being put out by two new water bombers. We on this side of the House intend to keep the heat turned up on this debate and throughout this session. We must guarantee that we spend every dollar we have with a view to how many jobs we can produce here in the province.

I want to serve notice that we in the Liberal Party will fight any attempt to restrain or freeze transfers to municipalities, hospitals and universities. Municipalities face burgeoning welfare rolls which must be accounted for. Thousands of Ontarians will be losing their eligibility for unemployment insurance benefits this fall and they must be protected.

In addition, we need the jobs that municipal capital spending will produce over the coming months. Certainly municipal wages should be controlled, but it will be a grave economic error to pass on the fiscal mismanagement of this government to our cities by cutting back on the transfers, as appears to be the case.

The same logic applies to hospitals and universities. Wage restraints are one thing, but if we are serious about economic recovery, we need even greater research and spending in these vital areas. We need improved health care services and increased numbers of highly skilled graduates from the post-secondary sector. These institutions are an investment in a better future and they have to be strengthened now.

My colleague the member for Hamilton Centre (Ms. Copps) addressed some of these matters in a report some time ago. Let me take, for example, the shortage of chronic care beds. If we are going to embark on a program to supply 1,800 new chronic bed facilities, not only will this alleviate the overcrowding in our hospital system, not only could we supply the chronically ill with facilities better suited and less expensive than those they occupy at present in our active bed facilities in our hospitals, but we will also induce more employment among health care personnel, not to mention spinoffs, such as construction jobs and soon. The cost would fall in the range of savings I have already referred to.

Finally, let me say just a brief word about my friends to the left, the NDP. They are on the horns of a terrible dilemma. They keep yapping about interest rates. First of all, they do not understand them, they have no control over them and that is their principal thrust. They are on the horns of a dilemma. On one hand they want to appeal to the moderate people in this province, and I can understand that. I can understand why their leader said on television the other night that he was in favour of restraint. It was a new twist for Socialists, but given what the polls are saying, I can accept their obvious desire to tread lightly on this issue.

They are in a terrible position. I can understand why the same economic recovery program that cost more than $1 billion a few months ago is now suddenly self-financing. I want to congratulate them for the spectacular, if half-hearted, effort made to carry the banners of their union bosses who installed them. Political debts tend to last and last and last.

Unlike the NDP, it is our intention to support this first step. But it is only a first step and a flawed one at that. It gives us our first real chance to bring recovery within reach. My party will push for changes in the restraint program which will add to its equity and to its impact. I repeat, we will be pushing hard for the second stage.

We need an ambitious economic recovery program now. Otherwise this five per cent program will merely become a gimmick to deflect the heat of economic mismanagement and profligate waste. Governments have been handling our economy for too long in that manner. People have a need for real and lasting solutions that all of us together have to deliver.

Mr. Foulds: Mr. Speaker, I rise in a mood of mixed emotions. I find myself angry, frustrated and, as my colleagues find themselves, determined. I want to put the government and, if I may say so, the wishy-washy balancing act of a bush-league Joe Clark with glasses, the Leader of the Opposition (Mr. Peterson), on notice that this caucus intends to fight this legislation every single step of the way.

We intend to engage in a parliamentary battle the likes of which this parliament and this Legislature has seldom seen. Why do we come into this House in such a mood of anger and determination? I tell you very simply --

Mr. Kerrio: God knows; God only knows.

Mr. Foulds: Yes, my flippant friend, the member for Niagara Falls, God does know. The member may not know, the clowns in the Liberal Party may not know, but the people of this province and the people in this party know this legislation, very simply put, is authoritarian, insensitive and ruthless.

In the person of Jack L. Biddell, it creates a czar with rights and privileges that Louis XVI would have envied. This legislation reaches destructive tentacles down into the smallest municipality, the smallest children's aid society and the smallest hospital or child care facility in this province. To the men and women working there -- the cleaners, the food service employees, the snowplough operators -- it says, "We have an economic mess in this province and that economic mess is your fault."

This legislation is find-a-scapegoat legislation. One only has to look at the schedule attached to the back of the legislation to see who this government believes the scapegoat should be. It is arbitrary legislation forced and produced by the mentality of a frightened and vulnerable Premier (Mr. Davis) who has had his finger up in the air for several months testing the winds of political opinion just to see which way they are blowing. It is legislation that does not solve or even begin to come to grips with the serious economic problems facing the province.

4:30 p.m.

Let me just sketch a bit of background to put in context our arguments on this particular bill. Very simply put, in 1982 Ontario is in the midst of a depression. We like to use the word "recession," but by any other name, aside from the crash of 1929, the economic circumstances in 1982 in Ontario are the same as in the 1930s. There is high unemployment, people are losing their homes, their farms, their marriages and their families. Very simply, we are solidly in the midst of a depression.

Let us take a quick look at the unemployment figures. There were 689,000 people out of work in Ontario in August. Of the women in the Ontario work force, 11.2 per cent are out of work. We have a youth unemployment rate of 16.1 per cent. Looking at the cities across the province, my home town of Thunder Bay has an unemployment rate of 10.1 per cent, and it is one of the best off. It goes from that to St. Catharines and Niagara at 12.4 per cent, to Hamilton at 13.1 per cent and to Oshawa at 11 per cent. Sudbury, the mining capital of Ontario and once the mining capital of the world, has an unemployment rate of 26.9 per cent. That is scandalous.

Several years ago, we had similar layoffs. A cabinet committee was appointed to look into the serious situation of all the one-industry towns over northern Ontario and it did nothing.

Mr. Martel: It did not even meet.

Mr. Foulds: It did not even meet, as my colleague the member for Sudbury East knows all too well. If I may say so, it was a committee set up by the Tories simply as a cosmetic measure and, because they did nothing, the situation comes home to haunt them.

The statistics roll off the tongues of politicians and economists alike, but behind every one of those statistics is a man, a woman and several children who face a depression in the very real sense of the word, in unemployment and poverty.

I want to talk about poverty for a moment. Over the past year, no steps have been taken by this government to increase the spending power of its citizens. For example, we have had no increase in Workmen's Compensation Board payments, in the minimum wage, in family benefits assistance awards and in general welfare assistance.

In Ontario, we have a poverty problem that frankly is a scandal in an advanced nation, a nation that considers itself civilized in 1982. We have a problem where, for example, the working poor, the people who work 40 hours a week and are on the minimum wage, have an income of $7,280 a year. And, Mr. Speaker, do you know the poverty line for that person established by the National Council of Welfare based on Statistics Canada revisions? The poverty line income is $8,970. So the working poor are very clearly below the poverty line.

Among the elderly -- the people who receive the guaranteed income from old age security, from the guaranteed income supplement, from the guaranteed annual income supplement -- a single person receives $6,351 income while the poverty line is $8,970; married persons with a family receive $12,042 income while the poverty line -- and they are above it -- is $11,835. That is the only category where that happens.

Family Benefits Act recipients: a mother with two children, annual income $7,428. I would like any member of this Legislature to consider how he alone with two children could live on $7,428. The income to meet the poverty line should be $15,831, about double what they receive.

In this rich province of Ontario, this province of opportunity, this province of which the government said time and time again, several times in an election many years ago, "Is there any place you would rather be?" a disabled single person receives through the generosity of this government $4,968, and the poverty line is double that, $8,970.

The figures go on and on: general welfare assistance single income, $3,192; poverty line, $8,970 -- that is employable. A single unemployable person gets $3,456; poverty line, $8,970. A couple with two children gets $7,380; poverty line, $18,243. That is part of the depression we are facing in Ontario in 1982.

Now let us take a brief look at a few price increases that we have had over the last year as reported recently by Statistics Canada. Mortgage costs have increased 23.9 per cent since more than a year ago; gasoline prices, 18.9 per cent; car insurance, 30.2 per cent; local transit fares, 22.6 per cent; energy prices, 17.6 per cent.

All this came home to me in a way I had never experienced in my life. Although I was alive during the Great Depression, I was young enough not to have experienced it in a very real way. But for the first time since I have been a member of the Legislative Assembly I have had six solid weeks at home in my constituency talking to, working with, consulting with and trying to help people who came in to my office every single day.

The human impact of those statistics frankly cannot be described. You know, people come in more than ever with their unemployment insurance claims, their compensation claims, their social assistance claims. We have social assistance administrators who are saying to people, "You cannot even apply for welfare. You cannot apply for assistance," because the strings have been tightened on the municipalities so much and their defence mechanism, instead of railing against the provincial government, is to rail against the victim. They will not even let people apply, let alone turn them down and at least give them the right to appeal.

4:40 p.m.

There are shameful and scandalous things happening in the administration of our social assistance programs in this province. It was epitomized for me by two constituents. One was a young man who came into my office. He had left his job because he had previously injured his back and he could no longer carry on with his present job. He lost his home. He could not get his compensation claim established. He said, simply and drastically to me, in the language of the 1980s, "Mr. Foulds, my marriage has been totalled." What a sense of despair is expressed in that 1980s expression.

People all over Ontario are being driven to the brink of disaster. They are being driven to the brink of despair by the collapse of an economy the responsibility for which they gave to the government to build, maintain and protect.

A second constituent, a 55-year-old man, who came to me put it graphically. He had been working I think 12 years for a company. He was laid off with the minimum amount of notice. He was unorganized. Luckily, his family had grown up, but he and his wife came into my office and he said: "Don't they have to do anything? I don't have a pension plan."

They may lose their home; they have not yet. He had worked steadily since he was a young man. He went into the bush originally, when he was 18. He was lucky. He got into the city and worked as a mechanic, first on the heavy equipment for the pulp and paper companies, then for a private company, and was laid off just like that. He has no pension. What does he do?

He came to me and he said, "What can I do?" Well, we can enforce the Employment Standards Act. He does not have a union. He has no rich contract, no rich benefits; and very few of those contracts do anyway. This government stands idly by and does nothing.

What response do we get to the serious economic situation? We have the Liberal response at the federal level engineered by Senator Keith Davey, as expressed on the Journal last night on television; a manipulative program of six and five concurred in by their confrères provincially that does nothing to help the people I have mentioned.

We have a Tory government in this province that brings in the legislation before us which we are debating. We therefore have, as we have seen, the Tory-Liberal alliance when it comes to this bill.

Who else do we have calling for wage restraint? Where do we have it come from? The Tories provincially, the Liberals federally and something called the Business Council on National Issues. Does the House remember the Business Council on National Issues issuing a statement on May 17, 1982, that we had to restrain wage increases at least to seven per cent? The seven per cent solution has moved to the five per cent solution in Ontario and I will talk about those various hallucinogenic problems in a few moments.

But who makes up the Business Council on National Issues and what do they get in remuneration? The list I have before me says that E. M. Bronfman, chairman of the Seagram Co. Ltd., is on that committee. He is struggling by on wages and income and cash equivalent remuneration of $1,064,288. If I were Mr. Broniman, I would love to have a guaranteed increase of five, seven or even 4.4 per cent next year.

I do not want to name all the illustrious people on this list but they range from that down to --

Mr. Martel: Go ahead. Give us some of them. I want my friends to hear it.

Mr. Foulds: Perhaps I could pick out a few people who maybe --

Mr. Martel: Yes, they need an increase. Go ahead, read it.

Mr. Foulds: There is, for example, J. A. Armstrong. Remember J. A. Armstrong? He is the chairman of Imperial Oil. He gets by with a paltry $736,741.

Mr. Martel: He is starving.

Mr. Foulds: A. J. de Grandpré, chairman of Bell Canada, that struggling corporation, that entrepreneurial monopoly, which both the federal government and the provincial government like to cite as an example of Canadian technology; he, poor fellow, is struggling with only $626,000.

Mr. Martel: Underpaid.

Mr. Foulds: Ian D. Sinclair. Remember Ian Sinclair who was with Canadian Pacific Enterprises?

Mr. Martel: He is heading the thing up in Ottawa now, isn't he?

Mr. Foulds: He is the head honcho, as my colleague from Sudbury would say. I would never use such a phrase. But he is the head honcho of the private restraint tax force for the Liberal government in Ottawa. That poor chap is getting by with $556,228.

Mr. Martel: Gee, I wonder how he can do it.

Mr. Foulds: Then we have W. F. Light, president of Northern Telecom Ltd., $538,000; the impoverished president of Alcan, $532,941. We have F. S. Burbidge, chairman of Canadian Pacific Ltd., $457,086. Now the one I want to underline for my colleagues, especially my colleague from Sudbury, is C. F. Baird, chairman of Inco Ltd. He, poor fellow, is getting by with $425,645.

Mr. Swart: Do they have to pay OHIP on top of that? Terrible.

Mr. Foulds: We will have to check that one out. I think they may have to pay their own OHIP fees. They probably live in provinces where there are no OHIP fees.

I just want to mention one last one, G. R. Albino, who is the chairman of Rio Algom. Poor chap, he gets by with $396,672. Those are the kinds of people who are all for restraint in wages.

I am afraid I do not have the clipping with me, but I remember reading a Canadian Press wire service story carried in the Thunder Bay Chronicle-Journal when the pulp and paper industry made its presentation to Mr. Sinclair. He said, "Yes, indeed, we support the wage restraint program, we think it is a way out of the dilemma." When asked about prices, he said, "I think the market should be taken care of, not the price situation right now."

I say you cannot have it both ways. If you are a free-market economist, if you are a Tory, if you are a Conservative and believe in the free market for prices in the private sector and even -- so far, legislatively at least -- believe in the free market for wages in the private sector, how come you believe in controls for wages in the public sector? Is that not just a little inconsistent somewhere? Is that not just a little authoritarian, a little un-Conservative? Is that not just plain stupid?

The Treasurer (Mr. F. S. Miller), and this is the Treasurer's bill, wants to carry the message across the province and into this Legislature on behalf of the Premier and the government of Ontario. It is his piece of legislation. The Treasurer said in his budget, and I quote directly, "I will outline a major job creation program, a new initiative for housing construction and an important incentive for small business, that will also add significant stimulus to the Ontario economy."

Mr. R. F. Johnston: Did he say when?

Mr. Foulds: No, there was no deadline, unfortunately. But he said, and there is a deadline here, that because of these factors and actions the Ontario economy should strengthen during the balance of the year. Employment by year end should reach 125,000 over the current level -- real growth.

4:50 p.m.

Mr. Cooke: He did not say whether it was negative or positive.

Mr. Foulds: Oh, I would assume -- they are the masters of double speech; we are not -- real growth in gross provincial product in the second half of 1982 should be four per cent on an annual basis. I would suggest that the Treasurer said that four or five months ago. He took so long to bring in his budget; it took him at least six extra weeks to bring in his budget so he could come with that accurate projection.

Then he brought in this piece of legislation and said to us on Tuesday that his budget was not good enough. That is what he is saying. He is saying his budget was not good enough and, "The only way out of it, because I cannot curtail my deficit any more, I cannot raise the taxes any more, is to raise taxes by a sneaky underhanded attack on the collective bargaining system for public service employees."

Over the last half decade, workers in Ontario have paid the greatest price for the depression we are being led into. They paid the price already in the real decline of their purchasing power, in their dashed hopes, and they have paid it in a growing cynicism about the future and about the government itself.

Perhaps one of the most genuinely heart- wrenching things for me, as an individual legislator, was to see this summer just how deeply embedded in people is the cynicism about their government. The government of this province and the government of this country have established a double standard. What the government of this province and the government of the country say to the ordinary men and women of this province is, "You must tighten your belts but we are not going to." I will get to that in a few minutes.

As a democrat, Mr. Speaker, I believe that governments are elected to protect and safeguard the interests of our people. I believe that the main business of government is to adjudicate among the various interests of society and to adjudicate those fairly. I believe that the business of government is to protect the weak and restrain the strong.

If governments are elected to do those things, I say in all sincerity that this government has failed utterly and completely. If governments are elected to bring together a consensus to work for a future in a province, then this government has failed utterly and completely. If governments are elected to secure a bright future for our children, then surely this government has failed utterly and completely.

I remember 1971 in this province, when the Tory party first formed the government under the present Premier. Frankly, the hopes of the province were bright. There was enormous opportunity. There was growth in the economy, there was good employment and there were opportunities to be seized. And this government, under this Premier, has failed. They have thrown away the opportunities of the 1970s and have nothing to show for it. They have squandered our resources, they have squandered our manufacturing sector, they have squandered their taxation rights and abilities and they have left us solidly in the depression of 1982.

Worse than that, beginning in 1977 this government knew it had failed. It was in 1977 that the Tories' patronage system cranked up beyond the realms of decency and got into the kind of government advertising that is so senseless, so expensive and self-congratulatory. When you have nothing substantial to say, put on the slick TV commercial to say it there.

This government knows that it has failed. It knows of its disregard of our trust and the trust that people have put in it, and of its failure to address the deep problems, the structural problems in our economy. It knows they began to appear years ago. The government knows and I believe even the Premier knows that these factors and this government's lack of leadership have dragged us deeper into the mire of the depression. These are strong words, but I cannot express fully what all of us in this party feel has been done to the people of Ontario.

First, the government leads the province into decline and collapse and now it wants one sector of those ordinary men and women to pay the consequences of that decline. Like the Liberals in Ottawa, the Davis regime knows not what to do so it reaches into the depths of its Tory heart and determines to bash workers. The polls show that people want some dramatic action, any dramatic action. The legislation before us today tries to tell people in the private sector that their layoffs are because of the people in the public sector.

What kind of distorted view of the world allows our Premier to tell the province that thousands of ordinary people who work to provide essential services -- health care, services for children, public transportation, schools -- have suddenly become the enemies of the people. He has no right.

Mr. Laughren: It is outright deception.

Mr. Foulds: It is deception of the worst sort, as my colleague the member for Nickel Belt interjects.

Mr. Martel: They don't want to tackle the real problem: high interest rates.

Mr. Foulds: I wish the Premier were here. The Premier called the special session of the Legislature. He said he needed the Legislature to pass this important piece of legislation and he has not been in his seat during this debate at all, either for the Leader of the Opposition or for myself. It does not worry me. It does not worry me in terms that have to do with me or with the Leader of the Opposition. But it has to do with what government should be about, what parliament should be about and what legislatures are about. It is what responsible government is about.

One does not call the Legislature and then, if I may say so, trot off to one's office and listen on the squawk box. One does not trot off to one's office or to "important other commitments." I would like to say directly to the Premier --

Mr. Martel: Where is the Treasurer? It is his bill, the Treasurer's bill. Why is the Treasurer not here? It is his bill. Why do we not adjourn until the Treasurer comes back?

Mr. Foulds: We will give the Treasurer three or four minutes to get back into the House. I would like to say to the Deputy Premier, to the Premier and to the Treasurer: How can they look in the eyes of the people who come into this building at night and clean their offices and say to them, "It is your fault that 689,000 men and women are out of work in Ontario?" No honest government, no honest Premier could.

I would like to say, and I wish the Premier were here to hear because I would like to say it directly to him, that underneath that comfortable, bland and polished politician's exterior lies a man of no economic or political principle, and this legislation reveals a government of no economic or political principle.

5 p.m.

This legislation, which is the centrepiece of the government's full economic program, scapegoats the workers in the public sector. More than that, it does something else to break the trust. I believe, the people in this caucus believe, our party believes that contracts signed in good faith between government and the unions representing its workers are going to be breached. There is no question about that; the legislation says it very clearly.

When people join with the government and all other public institutions in good faith to settle the terms of their employment, then they have the very simple right to expect that the contractual agreement will be adhered to. What the bill does is quite serious in its attack on the collective bargaining rights of workers in the public sector.

Mr. Mackenzie: It destroys them.

Mr. Foulds: My colleague the member for Hamilton East, who knows labour relations far better than I do, says very simply and dramatically, "It destroys them." He is right, because the act profoundly intervenes in the collective bargaining process to the point that it is doubtful that a union certified as the agent of those workers can play any meaningful role in negotiations.

Mr. Mackenzie: Even on nonmonetary items.

Mr. Foulds: Even on nonmonetary items. That is where the Premier misled the House in his statement. It was a misleading statement indeed, and I will get to that in a minute.

In the transitional period, since every employer knows that at most he will be forced to provide a nine per cent increase by the --

The Acting Speaker (Mr. Cousens): Did the honourable member just indicate that the Premier misled the House?

Mr. Cooke: Right on.

The Acting Speaker: All right. I ask the member to find another way of indicating what he is trying to say.

Mr. Bradley: Here's his lawyer.

Mr. Martel: On a point of privilege, Mr. Speaker: I want to ask the Speaker who drew that to his attention. I sat here and watched as that thing was drawn to his attention. Which member of the government caucus --

The Acting Speaker: No, it was I. My ears were startled, and I asked the table if they had heard it. So I ask the member who has the floor to withdraw that.

Mr. Foulds: Let me put it this way then, if I might --

The Acting Speaker: I ask you to withdraw, and I am asking you in a most pleasant way.

Mr. Foulds: I will withdraw my statement that the Premier misled the House, Mr. Speaker. But I want to say, and to say very seriously, that either the Premier misled the House or he does not know the terms of the legislation the Treasurer is proposing and for which he called this Legislature back. Either he misled the House or he is ignorant of the terms of his own bill. I find it hard to believe that the Premier is ignorant, but he can have it one way or the other.

In the transitional period, since every employer knows that at most he will be forced to provide a nine per cent increase by the Inflation Restraint Board, there will be a strong incentive to avoid bargaining and, instead, to go to the board in every case in the hope of having an increase of less than nine per cent mandated.

There is no compulsion on the board to have a hearing. There is no compulsion on it to call witnesses. There is no compulsion on it to make public the reasons for its judgements. The terms of the Labour Relations Act and what we have built up in this province over the past 40 years are completely set aside.

Next, although section 15 of the act provides that nonmonetary items may be changed if there is agreement between union and employer, since there is no mechanism for resolving disputes in these items and thus no bargaining power or sanction available to the union -- neither the right to strike nor the right to send a dispute to arbitration -- there is no reason to expect improvement on any nonmonetary item, such as health and safety, grievance procedures and so on.

The company will argue every grievance, because it costs somebody some money. Every improvement in cleaning up an occupational health hazard costs some money. In any contract, which items that describe working conditions are "nonmonetary"? The government has put the lasso around the terms of compensation so tightly that it makes the Anti-Inflation Board legislation look like a Sunday school picnic. This legislation was very cleverly, very thoroughly and very rigidly drawn.

In addition, there will be some cases where workers have been exercising their legal rights in the expectation of gaining something in an agreement which now, because of this legislation, will turn out to be totally ineffective.

For example, the contract of the nurses of the Niagara public health unit expired in February 1982. They have been on strike since May 1982. They went out on strike under one set of rules, a set of rules that we thought were passed by this Legislature and that we thought were laws that would not be easily abrogated. Now they discover that they went out on strike in vain since this act, if it is passed, will unilaterally change the rules and force them under controls.

The Inflation Restraint Board not only will have the power to determine compensation increases, but also, as I said, will not have to hold a hearing on any matter referred to it; nor is it required to give any reasons for any decision, order or determination that it makes.

Mr. Martel: Sounds like Ghenghis Khan or Attila the Hun.

Mr. Foulds: As a matter of fact, this bill makes the code of Hammurabi look progressive. Those members who are classical history scholars know that goes back several thousand years.

The bill also provides that although the five per cent increase is to be mandated where the compensation plan is part of a collective agreement, the increase may be anything up to five per cent where there is no collective agreement. Thus the non-unionized public sector work place faces the possibility of mandated increases ranging from zero to five per cent. Just have a quick look at clause 12(1)(d), Mr. Speaker.

A further instance of the discretionary power of this legislation is evident in subsection 12(2), which leaves it to the discretion of the employer to pay the employees the difference between the negotiated or mandated increases and $1,000, if any. The so-called topping up of the lower end of the scale by this government, by this Legislature, is a sham. It is only if the employer wishes to; the employer has the right. What kind of so-called even-handed legislation is that? What kind of fairness is this to the low-paid public workers, that it can be dispensed at the whim of the employer?

Let us turn from the iron fist of the wages side of the bill to the velvet glove of its price side. Let us take a quick look at what it does for the price side of things. In effect, we have two programs with different terms of reference and administrative procedures. One program is outlined in the legislation which we have before us; the other is contained in an overview provided by the Ministry of Treasury and Economics and amounts to a statement of policy.

5:10 p.m.

First, the so-called statement of policy, the one that has to do with the government's limits on fees, prices and licences, administered by various ministries, presumably limits the so-called increase to five per cent between September 21, 1982, and December 31, 1983. As the overview from the Treasury explains: "All fees, licences or prices charged by ministries of the government will not increase by more than five per cent in the period. . ." This actually constitutes a statement of principle and is not a mandatory requirement.

First, just what is included in the phrase "fees, licences or prices" is subject to the government's discretion. The government has decided, for example, to exclude Ontario health insurance plan premiums from the restraint program even though Treasury officials admitted to our research department that OHIP, by definition, could be included, as my colleague the member for Bellwoods (Mr. McClellan) pointed out in question period this afternoon.

Second, some of the fees included in the program may be increased above the five per cent fee under certain circumstances. These circumstances tend to he as follows: If upon monitoring fees, prices, etc., within his or her jurisdiction a minister discovers an increase in excess of five per cent, then he or she takes it to a special cabinet committee for review. Is that not nice? Is that not just dandy?

Mr. Martel: They don't do that with wages, though, or the cost of living.

Mr. Foulds: That is right. There are draconian, arbitrary measures for the wages sector but there is a little consideration for special circumstances on the side of fees.

The biggest single weakness, however, is that the major components of higher costs of living are totally excluded from the restraint, even within the government sector.

When it comes to government fees, the average family in Ontario pays about $50 a year on various licences, permits and fees, such as hunting licences, maybe a banquet permit for a family wedding in a hall and that kind of thing. However, as of October 1, 1982, the average family in Ontario will pay $648 a year for OHIP. That does not get restraint. It is the nickel and dime part that gets restraint.

The second program of restraint is embodied in legislation. This program deals with those organizations and corporations that have their prices set by a regulatory agency such as the Ontario Energy Board. In this case, application for price increases will be judged according to the following criteria: First, all costs other than profits and wages can be directly passed through as increased prices. These costs include such things as taxes, interest rates and costs of goods and services. Second, the component of a price increase which relates to increases in the wage bill will be limited to five per cent.

Mr. Martel: Do they not consider that for the wage earner too?

Mr. Foulds: No way. I was sort of startled. I do not know whether any other member saw it this morning -- I am jumping a bit -- but in the business section of the Globe and Mail, I saw a headline, "Union Gas Adopts Wage Curbs, Is Seeking 4.4 Per Cent Increase in Rates." There is a great picture of Darcy McKeough -- the great and wonderful, big-hearted Darcy, sitting in his shirt sleeves; a little older, a little paunchier than when we knew him here in the Legislature. They are going to adopt 4.4 per cent. Is that not generous of them?

Mr. R. F. Johnston: That's good. It's working.

Mr. Foulds: It really is working. But then I got down to paragraph 8:

"However" -- I like that word -- "the request for a 4.4 per cent rate increase does not cover the recent increases in the cost of shipping Alberta natural gas to the Ontario market. Nor does it include scheduled increases in the Alberta border price of natural gas, which is raised every six months under the energy agreement between the federal government and Alberta.

"Once these costs are added into the rate request, Union Gas will be asking for an increase well in excess of 4.4 per cent."

Mr. Swart: It's 18 per cent they are asking for.

Mr. Martel: What about the taxes to the home owners?

Mr. Foulds: The Minister of Energy (Mr. Welch) has a fine record in this Legislature, because the Ontario Energy Board has made a number of recommendations about price increases. We have asked the Minister of Energy to intervene in a number of those increases, from Ontario Hydro rates to natural gas rates, and he has sat silently wringing his hands in this Legislature and said: "It is not my role. It is unconstitutional. I cannot do it." Where is the Minister of Energy when it comes to the cabinet committee that reviews them? Is he on it? Yes, he is there.

Can we imagine the track record of the membership of the cabinet review committee made up of progressive people who have fought for the consumers and the low-wage earners of this province? Can we imagine the Minister of Education (Miss Stephenson), the Minister of Transportation and Communications (Mr. Snow) if he wakes up for the hearings, the Minister of Community and Social Services (Mr. Drea) as he tramples on the poor, and the Treasurer going to bat for the consumers? That is really an evenly balanced, progressive committee. What hope do we have there for protection of the consumers?

The pass-through that will be allowed on all those costs will mean that the program's impact to regulate prices will be minimal. The program, despite its appearance, remains discretionary. In general, both of the price programs of this provincial government do not in any way constitute any control on the price sector. It is an if, but and maybe price guideline program. Those prices that are responsible for inflation are virtually left exempt. The program does nothing to deal with food costs, shelter costs, city transit costs, health care costs, the price of gasoline, insurance rates and on and on.

Mr. R. F. Johnston: Everything else is discretionary.

Mr. Foulds: Everything else is discretionary. The five per cent solution of this bill says the capacity of a day care worker earning $17,000 to survive is as well served on an $850 pay increase as somebody in the public sector earning $40,000 -- about what an MPP earns -- who receives a $2,000 increase.

The percentage increase in itself is unjust. That is what is fundamentally wrong with wage restraints on a percentage basis. Given even a Tory philosophy, if the government really wants it to mean something, why did it not say, "Nobody gets more than $1,000"? What did it do? It went for percentage increases that continue to distort the income differentials and do nothing to redistribute wealth in this province.

Mr. Martel: Have you got to the doctors yet?

Mr. Foulds: No, I am saving the doctors. I have lots to go.

Mr. Martel: Don't leave the doctors out of this -- the chosen ones, the anointed group.

5:20 p.m.

Mr. Foulds: In these percentage solutions, we have six and five at the federal level and some talk of seven by the private sector fat cats I mentioned a while ago.

It reminds me of the movie about Sherlock Holmes that was called the Seven Per Cent Solution; it was a seven per cent solution of opium. I want to say, if it is not reaching too far, that the imposition of percentage wage controls in 1975 and the imposition of percentage wage controls in Ontario in 1982 while doing nothing in any other sector, like opium, will become addictive. Every time you do it, it will become easier, and that is one of the fundamental reasons we are going to oppose this legislation tooth and nail.

But these are just the surface indications of injustice. While even in the public sector people are held to a mere five per cent, medical doctors, starting on a much higher base, are not held to any percentage. I think this underlines the hypocrisy and double standard of the program. I do not believe the Leader of the Opposition can be serious when he says that he supports the program but that it does not go far enough and he would like it to be tougher and go longer. The program is fundamentally unjust, and I thought liberalism, in the 19th century at least, was simply about injustice.

The government is saying to public sector workers: "You are not reasonable people. We cannot talk to you; we cannot negotiate with you; we cannot consult with you ahead of time. What you need is legislation to tell you what is good for you." But with the doctors, the Premier happens to phone just an hour or two before he comes into this Legislature and says, "Fellows, will you come in and talk about it with Larry?"

If they can say that to the doctors, why can they not say it to teachers? The Minister of Intergovernmental Affairs (Mr. Wells) was able to do that when he was Minister of Education. Why can he not say it to workers in the public sector? Why can he not say it to children's aid society workers, to nurses and to hospital workers? He can say it to 15,000 doctors who get $1.2 billion, but he cannot say it to the 52,000 and the other 500,000 people beyond that.

They can say that one group of people is reasonable, that there is one group of people they can talk to, consult with and negotiate with, but the other group has no consultation or negotiation rights. What kind of nonsense is that? Ordinary people are beaten into submission by this legislation, but those who set their fees and those the Minister of Health (Mr. Grossman) succumbs to can make submissions to the cabinet.

Very simply put, this is a piece of class legislation that makes ordinary people suffer under oppressive laws but lets the privileged, well-to-do corporations accumulate wealth almost at will.

Yet with this single piece of legislation the government wants to ignore the responsibilities it has already entered into, to break contracts and to tell 500,000 people in Ontario that their government can no longer be trusted. The government is breaking its word, breaking a contract; and, as Robert Bolt had Sir Thomas More say so well in A Man For All Seasons, "Once you do that, once you break your word, you have cut down the law."

That is what the government is doing with this piece of legislation. It is cutting down the laws of this province, the laws of collective bargaining, the laws of the Labour Relations Act. It is cutting those down and saying they no longer apply. Once it does that, it breaks its trust and it is soiled. Its integrity slips away as surely as if one is cupping water in one's hands and one opens one's fingers: the water slips away, and one can no longer take it back or retain it.

We will not trust the government any more. I believe the people of Ontario may accept it, because it is playing on the politics of fear rather than the politics of hope. It is playing on the politics of fear rather than the politics of fairness. It is threatening people who are already vulnerable and threatened. Yet I admit that in this political world in the 1980s, the people may accept it and they may even, God forbid, re-elect it, but inside they will never trust it again the way it once had their trust.

That is not merely a loss for the Progressive Conservative Party and the government; that is a loss for all of us and for the political processes and for this Legislature, and that is why this party will not accede to it in this chamber while we have breath to fight it. This party is well known as a Socialist party, and we are very proud of that, but at its fundamental core and at its roots, this party is also a democratic party. It is because this piece of legislation is an attack not merely on collective bargaining rights, not merely on unions, not merely on workers, but on democracy itself as it has evolved here in Ontario that we feel so strongly about it.

Finally, we see what the Tory government is all about. It is what Frank Underhill once called it, "Government of the people, by the lawyers, for big business." But the iniquity does not stop there. This legislation proposes to eliminate for the duration of the legislation a fundamental human right. It proposes to limit the right to strike to nonmonetary matters. What does it do? We talk about collective bargaining rights, and the Liberal Party likes to talk about big labour. What are collective bargaining rights?

Mr. Bradley: They are what the Saskatchewan NDP government cancelled before the last election.

Mr. Foulds: And the Saskatchewan government paid for it. If I may say so, the Saskatchewan government paid for it rightly.

Now, what are collective bargaining rights?

An hon. member: Are there any Liberals in Saskatchewan now?

Mr. Foulds: Where are the Liberals in Saskatchewan? Where is the Liberal Party west of Kenora?

Mr. Conway: We have Hazen Argue.

Mr. R. F. Johnston: And you are welcome to him.

Mr. Conway: Morley says you are all the same.

Mr. Martel: So did Phil Givens. And what was that other fellow's name? Vern Singer.

The Acting Speaker: Order. The member for Port Arthur has the floor.

5:30 p.m.

An hon. member: Vern Singer went for $43,500.

Mr. Foulds: Mr. Speaker, the last interjection indicates that senility can hit anybody.

Now if I can be serious for a moment, let me get back to the point. What are collective bargaining rights? They are not the rights of a big union; they are not the rights even of a small union. Collective bargaining rights, very simply put, are the rights that individuals have together; they collect them and pool them because they know that without solidarity, without unity, without collective action they have no power. Collective bargaining rights, very simply put, are the only way that small people, little people together can get some bargaining power, can get some leverage in our society; and the government is taking it away from them.

That is unacceptable in a democratic society. It is destructive. The Tory government has decided to limit the rights of some individuals through legislation, singling them out from society as a whole. It is unfair, undemocratic and vicious. It says to workers in the public sector that they are untrustworthy, that they are determined to act against the public interest. What kind of government is it that can attack its own employees with such a total disregard for human rights and such a total disregard for the value of those employees to society? What kind of government is this that treats one part of our society, one group of its people, with a sledgehammer while it allows another group, the medical doctors, to discuss its problems with a friendly cabinet?

For me, and for my colleagues as well, the most depressing part of the package before us is this very simple fact: There is absolutely no evidence here, no evidence was produced in this House, no evidence was produced at the briefing sessions of the various caucuses and there is no evidence anywhere in the free and democratic world that says this kind of measure can turn a failing economy around.

I want shortly to deal with some specific measures that do fall within the legislative competence of this government, but first let me deal with the whole problem of purpose and determination.

Why is it that the government decides that belt tightening must be the order of the day? That is one question. But even if they decided this, why do they decide that one sector must get strangulated by that belt tightening whereas other sectors, even the so-called regulated sectors, are not to be strangulated by that belt tightening and can pass their costs through?

Every single pulp and paper worker in my constituency, every single steel worker, every single Canadian Union of Public Employees worker, every single worker in the hospitals in my community, every single worker in my community in 1982 would be very happy to take a five per cent top-up on being able to pass through his costs. Certainly most union settlements have been running well below inflation plus five per cent. They give inflation plus five per cent to the gas companies. I know people who would love to be able to pass through the increase in their mortgage costs, food prices, clothing costs, taxes -- pass them through plus five per cent.

No wonder it is good enough for Darcy McKeough. They would be delighted to do that.

But what did they say? "The objective of government must be to unite people, not to divide them. The objective of government must be to bring people together to deal with our economy, not to select scapegoats."

Finally, "The objective of government in situations like this must be to create a social contract, entered into in a spirit of fairness and justice, in a spirit which says that if there are to be sacrifices, they must first be made by those most able to afford them."

With the draconian measures in this legislation, the government has undertaken to do just the opposite: punish the few and especially punish those already unable to make ends meet. In such an atmosphere, what they do is they generate distrust, they generate cynicism, they generate opposition and discord, the reverse of what should be done.

As an alternative to the government's action, we in the New Democratic Party have proposed a program for recovery and renewal. We call it jobs and justice. There are just four essential points to that program. First and foremost, the top priority of any government must be to eliminate the unemployment problem, to create and protect jobs.

We saw plant after plant and mine after mine closed in the spring. We raised the question of SKF, SCM, Inco, Falconbridge, CCM, the auto industry, time after time in this Legislature; and they did nothing, nothing.

I want to talk about the public sector. We could immediately build 15,000 new rental units by issuing housing development bonds. We would create 33,000 jobs and, much more than that, we would be creating housing which is much needed in this province and would be available for people on the lower end of the income scale.

Second, we could have a major energy conservation and retrofit program which could provide 20,000 jobs. The removal of the sales tax on building materials and machinery combined with accelerated public works could provide stimulation for our economy. Many local economies, from Brantford to Thunder Bay to Sudbury, could be stimulated in such a way.

For the private sector, there could be an extensive program of renewal through a crown corporation in auto parts and expanded food- processing facilities. For years, my colleague the member for Sudbury East and my colleagues the members for Lake Nipigon (Mr. Stokes) and Algoma (Mr. Wildman) and I have been pressing the government to create a mining machinery program. If they had that in place, at least some of the impact in the northern communities such as Sudbury would be lessened. The economy would be diversified. They failed.

I remember the Design for Development programs in the late 1950s. In the early 1970s they failed to take advantage and they failed to diversify, not merely the economy in the province but the regional economies of this province.

Next, through a forestry and pollution abatement program, we could increase employment and be achieving some useful social aims. More than that, we could be leaving a heritage to our children that would be worth leaving. What we are leaving to them after this Tory government is bankruptcy. But all one can do in a bankrupt situation is bring in --

Mr. Elston: Do you suggest we spend our way out of bankruptcy?

Mr. Foulds: It is better to spend your way out of the problem, my friend, than strangle your way out of the problem, which is what the Premier and his friends in Ottawa would do. That is what they want to do.

Mr. Cunningham: Live it up in the 1980s; we can always live it down tomorrow.

Mr. Foulds: Those interest rates -- no, I did not mean to deal with that in this section of the program.

Mr. Martel: That is the basis of the problem.

Mr. Foulds: I was not going to deal with this section, but I did find it passing strange that the Leader of the Opposition (Mr. Peterson) could speak for as long as he did and not mention at one point the problem of interest rates. He could not release himself from the phone calls from Senator Keith Davey and Gerald Bouey to talk about interest rates.

5:40 p.m.

Our program calls not for spending our way out of the depression, but for a fair sharing of the burden and a stimulus for the economy. It may be fine for the provincial Liberal Party to ignore the problems of housing, mortgage rates and interest rates but we would like to see, and I do not think it is that difficult -- after all a few other provinces in this country have shown that they can do it, provinces of all political persuasions it would seem --

Mr. Wildman: There are no Liberals.

Mr. Foulds: There are no provincial Liberal governments, are there? And what we have in Ottawa is a sort of reborn Social Credit movement.

What we would like to do is provide a mortgage assistance program for persons earning less than $32,500. We would provide $50 million in assistance for small businesses and farmers to meet the problem of high interest rates. We need to roll back sales tax increases. We talk about a five per cent solution. The Treasurer put a seven per cent increase on many items at one fell swoop in the budget. Seven per cent; does it get rolled back to five? No, it is already announced in the budget.

We would put a two per cent surtax on taxable incomes over $40,000, that is a surtax on those earning in gross income roughly about $50,000; reintroduce the land speculation tax; and tax the top three per cent of estates, excluding farms. All of these measures would ensure that the pain of economic recovery would be shared by society.

Third, I would like to see this government do more than engage in symbols. I would like to see this government trim the waste in government. First of all, I would like to see a public inquiry into Hydro spending and cost overruns. I would like to see us mothball Trillium Exploration Corp. We should cut government advertising. We should cut those consulting costs.

I have forgotten the exact details, but they had a computer expert in here for two days to whom they paid $25,000 per day; $50,000 for two days work, plus expenses.

Mr. R. F. Johnston: Long days.

Mr. Foulds: Long days. That kind of nonsense has to stop. Let us look beyond cancelling the high-speed jet for two water bombers. As a person from the north who has some interest in natural resources, I find it mildly ironic that a jet is traded in for two water bombers after the rainiest season in history. The Minister of Natural Resources (Mr. Pope) says, 'Well, if we cannot use them this year, maybe next year or the year after." We should either have had them all along when we faced the droughts or I feel there is just a little bit of symbolism here.

How much of the expense-account living of senior public servants can really be justified? How much can the gas-guzzling limousines this government has be justified? Who are they available to? Let us ask once and for all, are there not alternatives to the cutbacks they are imposing? Let us give government a lean and hungry look. Let us not give our working population that lean and hungry look.

Finally, our party has proposed measures to fight inflation in necessities. The government could freeze Hydro and home heating fuel costs for eight months. It could freeze public transit fares for one year without affecting service. It could, and has the authority to, freeze the tax on gasoline at the current dollar value for one year; it could abolish the ad valorem tax. It could maintain the rent review program that is so desperately needed by many tenants in this province.

This government has the power to limit the price spread on essential food products between the farm gate and the supermarket. This government could ban extra billing by doctors. It could roll back the Ontario health insurance plan fee increases. Finally -- and we come back to it again -- it could remove the sales tax on low-priced meals.

These are all measures that could create jobs, help our economy to recover and convince all the people of the province that a unified effort can bring us into a stronger and more prosperous future.

This government also shares the burden, but it shares the burden by devolving its responsibilities. This government refuses to meet the commitment John White made years ago that the transfer payments to municipalities would keep pace with the cost of inflation. It was called the Edmonton commitment, was it not?

Those were heady days. Those were days when the Ontario Treasurer gave his word to the municipal bodies of this province that they would maintain transfer payments at least at the cost of inflation.

But where has that promise gone? We have the Minister of Municipal Affairs and Housing (Mr. Bennett) saying, "You are not going to get anything this year." We have the Treasurer (Mr. F. S. Miller) putting the sales tax on supplies, machinery and equipment bought by municipalities. We have the minister of housing, etc., refusing to give a commitment in this House today that he would at least give increases that made up for the money the Treasurer was taking out of the pockets of the municipalities and that he was --

Interjection.

Mr. Foulds: What?

Mr. Breaugh: He stole the money out of their pockets.

Mr. Foulds: And that he was expanding into their tax bases.

I just want to wind up by saying that the New Democratic Party program, as outlined yesterday and as I have detailed a few of its highlights today, is a program that is the reverse of the government legislation. Our program is fair, it is just; and in contrast to the Liberal-Tory alliance it has a simple saving grace: it is not guaranteed to work but it has a chance of working. The government's program, its alliance, is a recipe for disaster.

In 1863, I believe it was, Abraham Lincoln concluded the very memorable Gettysburg address with a label about democratic government that has enriched mankind and has sounded with resonance in the political forums of the world: that democracy was government of the people, by the people and for the people. But what we have in 1982 under the Conservatives in this province and the Liberals in Ottawa is government of the government, government by the government and government for the government. What this legislation does is give us government by decree and government by bullies.

As I said earlier, the business of government is to protect the weak, not attack them. It is the business of government to protect workers, not slash their hopes and their incomes. It is the business of government to create jobs, not annihilate them. It is the business of government to be decent, fair and evenhanded. This government has dismally failed to do that. This bill fails to deal with the serious economic circumstances of the province.

5:50 p.m.

Finally, I want to say that we in this caucus are going to fight this. We have fought the bill on first reading with the only weapon we had: we divided. We will fight this bill on second reading with every speaker this caucus can muster. We will fight this bill every clause and every step of the way in the committee hearings of this bill, and we will fight this bill on third reading because it is simply bad, unjust and unfair legislation.

I want to say that if, as it appears, we lose, we will fight this legislation on any forum we can find anywhere in this province from Kenora to Kingston, from Windsor to Ottawa, from Kapuskasing to the Niagara Peninsula.

Hon. Mr. Elgie: Mr. Speaker, the first comment I want to make is that the next time my friend the member for Sudbury East (Mr. Martel) has a problem with his throat would you suggest to him, sir, that he not call me because I do not intend to help him any more. I am tired of it. His voice today is so good he is heard so well throughout the room. What he says is not worth listening to but his voice is loud. I want it made very clear, sir, that my line is no longer available to him in case he has problems with that sore throat.

My only hope is that someone right behind him will get a sore throat quickly and then I will not do anything for him either.

I intended to go over the price control program the government proposes in the bill but in listening to the debate I felt that it is important for people to understand that although we all have to indulge in rhetoric, and we all have to do certain things in life, we should hear from each of us our views on the public policy issue we are trying to address in that bill, because really, that is why we are here.

I think there is a growing number of Canadians, by far the largest number, who honestly believe, as I do, that the key public policy issue facing society and governments today is inflation. From that key public policy issue flow all of the other problems. It does not mean that there are not issues out there in society that do not have to be addressed in some other way at some other time perhaps. But as I see it, the key issue facing governments today in this country is inflation. From it flow high interest rates; from it flow mortgage failures; from it flow bankruptcies; from it flows currency instability.

If we start with that basic premise, and I would submit that most people would agree with that, then we have to say to ourselves:

"What does inflation do to each of us and what does it do in society that is giving us the problems?"

There are four effects of inflation, as I understand it, that are producing problems for you, for me and for the public out there.

First, is this ever-present fear of what is called "paper inflation." This is when inflation accelerates so rapidly that it goes out of control, currency collapses and there is social and economic disruption. Although we do not have very many examples of that in history, we do know that it has happened and we fear that it could happen again.

Second, we also know that going along with that is the fact that inflation badly erodes certain segments of society more than others. For example, those who rely on personal savings, those who rely on pensions, those who are on fixed incomes of any kind suffer very severely during periods of inflation. We have to be certain the public policy measures we introduce address those issues to help those people.

Third, and I suppose very important for the community and for all people in society, it erodes the confidence, stability and credibility of our credit system. Without that, we have the problems we are seeing today. Consumer purchasing power is gone. Interest rates are going up to protect the lenders in society. People are not buying because of the fear of future costs and whether or not their money will be worth as much. The credibility and the predictability of credit are gone and we somehow have to restore that credibility and predictability.

I suppose the fourth and most disastrous thing that happens with inflation from my point of view is the unemployment and the social disasters that flow from unemployment.

Frankly, the downturn in economic activity and the interest rate problems all are focused therefore on this single public policy issue: inflation. I think there is general agreement that issue has to be faced and dealt with.

I do not profess to be the world's authority on public policy measures one can look at but, as I see it, there are three public policy measures one can look towards to deal with the problem of inflation, and two of those have been in the forefront in this country for the past several years.

The first is a restrictive monetary policy, which we have seen with the limitation on the flow of money and with high interest rates. The second is a restrictive fiscal policy, with government restraints and higher taxation to reduce the public's ability to purchase products. I think it would be no surprise to any of the members, and certainly it is not to me, that although the application of these principles has been varied from province to province and different parts of the country, I see no evidence that as a macroeconomic tool it is doing the job.

Therefore, as people who have to try and solve these public policy issues, we must look to the only third alternative we have, and that is an incomes policy, a policy which endeavours through an incomes and prices control program to limit the upward income demands of people and the upward prices we are paying for products. I know that people have varying views on incomes control policies and it is not a very salutary thing to suggest to some people, certainly not to some Conservatives, not to some NDPers and not to some Liberals; but I do not see any other alternative.

What the government is proposing here is to deal with the problem in the only way we can as a province. That is, to deal with the public sector for, if one were to search one's soul and speak honestly, one would know there is no way one could have 11 different control programs throughout this country.

If there is to be a program that involves the private sector, it has to be a federal program; but we have an obligation, as public policy people given the mandate to deal with the issues facing us, to try to find solutions, to do something, and that is exactly what we are doing. We hope, and there is a lot of talk, that the private sector will follow suit. I certainly hope that is true and there may indeed be some evidence of it happening, but I also feel personally that if there is not good solid evidence it is happening in a very short time a federal program on a broader scale is the only reasonable alternative facing those in Ottawa.

I think that is the reason we are here today. That is the reason this bill is here today. It is to address the issue of inflation and the things that flow from it. But, of course, I would go beyond that because there has to be a day when controls are gone. I am one of those people who believes we have to reach a stage in our maturity when, after controls, we have to think about some new collaborative effort in society to bring people together so there can be some of the social consensus on economic goals and other goals that has achieved some degree of economic stability in other countries. I feel very strongly that is the kind of initiative we will have to take in the long run if we are to overcome the ever-threatening problem of endemic inflation.

I ask members of the House to support this bill for the reasons I have given and look forward to hearing more of the debate.

The House recessed at 6 p.m.

23 septembre 1982