INFLATION RESTRAINT ACT (CONTINUED)

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The House resumed at 8 p.m.

INFLATION RESTRAINT ACT (CONTINUED)

Resuming the debate on the motion for 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.

Ms. Bryden: Mr. Speaker, when we recessed at six o'clock, I was speaking about how Bill 179 affects women more than it does other employees. This is mainly because of the way percentage increases work. Generally, the lower-paid people on a percentage increase formula do much less well than those on higher wages. Certainly, we know that the doctors' 14 per cent increase meant a very substantial sum, probably as much as a great many women make in a whole year.

Women are very badly affected by this legislation, and I pointed out how it will effectively stop any catch-up in their wages to overcome the wage gap between men and women workers during the next two or three years. I also pointed out that it will prevent women from obtaining important nonmonetary gains in the collective bargaining process.

Many of these nonmonetary gains are essential to removing the barriers that prevent women from having full equality of opportunity in the work place. I am referring particularly to bargaining for day care, for rules that will end sexual harassment in the work place, for getting a target number into training and apprenticeship courses and things of that sort, as well as to health and safety rules, particularly as they affect women and particularly in the area of protection from the possible effects of video display terminals.

Unfortunately, if this bill goes through, there will be no incentive for employers to bargain for nonmonetary items, because the unions will have no clout. They will have no right to strike and will be obliged to beg the employer even to consider sitting down with them on any subject.

This legislation affects all public service workers, and not just women. It affects teachers. It affects librarians in publicly funded libraries. It affects health care workers in hospitals and institutions. It affects the Toronto Transit Commission operators but not TTC fares. It does not affect doctors. It does not affect Ontario health insurance plan increases, and it does not affect telephone rates. These are all part of the cost of living for those workers who are subject to this restraint bill.

Nor does this legislation affect executive greed, which my colleague pointed out is rampant among a great many corporation executives who write their own salaries and put them in the $400,000 to $500,000 range.

This bill is frightening legislation to any person in a democratic country, because it contemplates the tearing up of contracts. It contemplates confiscation of wage gains written into contracts. It contemplates, in effect, a taxation of certain categories of employees presumably to return money to their employers.

The taxation is not a tax that will be set by this Legislature. It is not a tax that will affect all workers or all members of society on an equal basis. It is a tax that will be paid in differing amounts by the 500,000 people who are affected, according to what kind of contract or wage arrangement they have with their employers.

The money will not go to the government to reduce expenditures or to reduce that horrendous deficit of $2.6 billion. It will go to the employers, and there is no guarantee that the employers will spend that money on job creation. There is no guarantee that they will spend that money in this country, and there is no guarantee that money will have any effect on reducing the cost of living.

I think we should just look for a minute at what this legislation does to collective bargaining. It means that workers who have been without a contract for more than a year will have no collective bargaining rights for three years. It means that workers who have been bargaining for less than a year will have their wages controlled for at least two years.

It also means that collective bargaining will be replaced by one-man rule. A government appointee will have the power to decide wage levels for 500,000 workers in the public sector. No hearings are required, no reasons for a decision must be given. He can do what he wants, how he wants, when he wants, and workers will have no right of appeal from this one-man dictatorship.

This is a denial of natural justice and due process of law. These are things we cherish as part of our democratic process: natural justice and due process. I ask, how does this differ from what is going on in Poland under a Communist government? How does this differ from dictatorship?

Mr. McNeil: I think there's a little difference.

Hon. Mr. Ashe: It's ridiculous.

Mr. Breaugh: What are the differences? Don't give us the bull. Tell us about the differences.

Hon. Mr. Ashe: There's quite a difference.

Ms. Bryden: I want to read a comment on collective bargaining which was written by the national association representing Canada's university professors, the Canadian Association of University Teachers, known as CAUT.

Just let me quote two paragraphs of their ad, placed in the Globe and Mail on October 7:

"The right to bargain collectively is fundamental in a democratic society and has been secured, like so many of our other fundamental rights, only after a long and persistent struggle. It is based upon the right of association recently enshrined in the Canadian Charter of Rights. If this right can be treated so cavalierly, there is no assurance that other basic rights will be respected. The real test of our democratic system is its ability to preserve fundamental rights in times of difficulty."

I continue with one final paragraph from their advertisement:

"[The government's] action is doubly reprehensible when it singles out one sector of society. The hope that other sectors may be influenced is no justification for such discriminatory action. This is like punishing an innocent minority as a threat and deterrent to others. Moreover, even within the public sector, the effects of the proposed legislation will be highly inequitable."

I think the members opposite should heed that warning from our university teachers.

8:10 p.m.

The government keeps saying it must reduce government spending; that is one of the reasons it is bringing in this kind of restraint. When it comes to talking about restraint, that is a matter this government should be looking at internally.

The government's idea of restraint is not my idea of restraint. I have a list here of a dozen expenditures of this government which I consider could have been eliminated. They indicate this government's willingness to exercise no restraint on itself while imposing restraint on the public servants.

First, let us recall that the government's advertising budget was $40 million last year and $40 million the year before that. Since 1977, it has risen by 360 per cent. In addition, 50 people have been added to the public relations staff of the cabinet ministers since 1980. Just think what their salaries cost. They range from $21,000 to $53,000.

Ottawa cut its advertising budget of $68 million by $30 million recently. We have not yet heard any figure from the Ontario government showing what it is going to cut out of that $40-million budget, which makes it, incidentally, the sixth largest advertiser in Canada. That is one area.

Let us look at the government advertising campaign to encourage voting in the November 8 election, including the leaflet that was shown in the House today, which has one blank page on which a candidate may put his picture if he wants to. I understand that about 10,000 copies were delivered to each municipal candidate in Toronto, presumably at government expense, to enable candidates to get their message across. The price tag on that advertising campaign is $840,000.

Here is another item. The Minister of Citizenship and Culture (Mr. McCaffrey) hired two buses to take civil servants and members of the Legislature who were invited to the reopening of the Royal Ontario Museum last week 600 yards across the street and up Queen's Park to the museum. Eight people used those two buses at a cost of $120.

The Minister of Government Services (Mr. Wiseman), together with two assistants, went to Thunder Bay to address the Lake Nipigon Conservative Riding Association. The cost for three Air Canada return tickets would have been $861, but the cost for the private plane the minister took was $3,985, a waste of more than $3,000.

The night the budget was presented, the Treasurer (Mr. F. S. Miller) invited a number of people to the Albany Club after the event. He was asked whom he invited and he said, "Various people with an interest in business and the economy." I have an interest in business and the economy, but I was not invited. That little party cost the taxpayers $6,425.76.

The Treasurer also took a public-speaking course in New York City in the summer of 1981. It cost the taxpayers $2,500. I am not sure whether we got our money's worth in improved public speaking by the Treasurer but, when asked why he did not use a Canadian firm if he was going to hire this kind of service, he said he just happened to be in New York at the time this course was available.

The Premier (Mr. Davis) and his staff went to Edmonton on May 10 of this year, presumably to meet with some of the Alberta government people. The trip cost $1,615.58 for three of them, but a Ministry of Natural Resources plane took them there. We have not yet heard the cost of the plane, the pilot, the standby time and so on. It seems to me that Air Canada could have got them there.

We are extending our expensive office in Paris, and we sent Adrienne Clarkson there. The total cost of that office is $361,000 per annum, and there are still renovation costs that are anticipated but unspecified.

These are some of the kinds of restraint this government shows. I have not mentioned the dinner to mark the 20th anniversary of the Ontario Human Rights Code at which 600 people sat down to a dinner costing $20,000. I think a new human rights officer would have been more to the point. I have not mentioned the $200,000 spent on a cocktail party for the world bankers. Most of us know world bankers are influenced not by fancy freebies but by the bottom line on an investment.

I think I have made the point that this government does not believe in restraint for itself. It wastes the taxpayers' money on all sorts of high-priced entertaining and unnecessary trips. I did not mention the Premier's trip to Australia and New Zealand last year which cost $115,000, including expenditures for his wife, who accompanied him, as well as a number of others.

This is not fair legislation. It is persecution. I have to mention that for the teachers in Metro Toronto it is double persecution, because under Bill 127 they have been put in a collective bargaining straitjacket. If it passes, they will be in this straitjacket forever, having unified bargaining and not able to bargain with their own employer.

Under Bill 179, the teachers are now subject to the cancellation of their collective bargaining rights. This year the teachers' talks have been stalled, there is great uncertainty and unrest in the teaching profession and it certainly is not conducive to the development of good education in our city.

I strongly hope the government will reconsider this bill, withdraw it and get on with the job of getting the economy working by more suitable measures.

Mr. Bradley: Mr. Speaker, it is my pleasure to have the opportunity to participate this evening in the deliberations related to Bill 179, doing so at a time when our province is facing some very difficult economic times, as the former leader of the Ontario Liberal Party indicated during the election campaign when he was referred to as Dr. Negative.

He was right, of course, but justice is not always done in the field of politics in terms of whether or not a person is right and straightforward with the population and, as a consequence, that was one of many reasons he was not asked to lead the government of the province and the government in power was returned with a majority. We face, as they would tell us, the realities of March 19. But I suggest to members of this House that the realities of March 19 are more than simply political realities; they are economic realities as well.

8:20 p.m.

The present economic conditions in this country, as the Premier (Mr. Davis) and the Prime Minister of Canada would like to point out, are not entirely under the control of either the federal government or the provincial government. There is no one in this House who suggests that is the case. I contend, however, that both those levels of government have a role to play in turning our economy around.

One of the steps this government has chosen, which I feel is only a very tiny part of any economic recovery program, is to show restraint on itself and its employees. One can understand why the government has been forced into this position. Some would suggest that the public employees of this province make an easy scapegoat. Indeed, if we were to read the public opinion polls both nationally and provincially, we would find that the program introduced by the Premier and the Treasurer (Mr. F. S. Miller) is a popular program and that the bill is acceptable to the majority of the population. So that might well be one of the motivations.

But while this government places a good deal of emphasis on public opinion polls, it also has to accept the economic realities that confront our province, and the realities confronting both the federal and provincial governments involve deficits that are soaring out of control.

I am one of those who believe that in difficult economic times it is acceptable for governments to incur a deficit. Indeed, it is desirable for a government to incur a deficit to overcome the deep problems that beset any jurisdiction with respect to unemployment. Certainly, the kind of well-targeted spending programs that we in the opposition have advocated would have a measurable effect on reducing the unemployment rate and stimulating the economy in the appropriate fashion.

What we have is a situation where the deficits are soaring out of control. We had a federal deficit that was estimated initially at some $10 billion for this year. We then had a revision in the budget, and we hear that it is to be closer to $20 billion: a doubling. The latest rumours coming out of Ottawa, the speculation that is arising -- and probably speculation fairly well founded -- is that the federal deficit might well approach the neighbourhood of $26 billion, with the ensuing problems related to the financing of that debt.

The Minister of Revenue (Mr. Ashe) will recall when the previous administration, which was in for about seven months, was ruling this country. During the election campaign, the leader of that party indicated that what we needed was an even larger deficit so that we could spend our way back into some kind of economic recovery.

Hon. Mr. Ashe: We have sure got that now.

Mr. Bradley: We have that kind of deficit, as he has pointed out; but we have reached the reality that this deficit is soaring out of control. In addition, the provincial deficit, which I believe was upwards of $1.5 billion last year and was predicted to be $2.2 billion in this fiscal year, is now predicted to be around $2.5 billion. I would suggest that it could be approaching $3 billion if we were to evaluate the rate of recovery of funds through revenues from taxation.

We have a situation where the provincial deficit is certainly rising much more rapidly than people had expected. This should have been quite evident to anyone who analysed the provincial budget very carefully and was able to determine that the Treasurer was not deriving the kind of revenues he wanted out of taxing nonessential items with the sales tax and so he moved into essential items, which previously had been exempted.

The Treasurer did not do this to punish the people of Ontario -- although for political rhetoric, of course, I would like to say that he did want to punish them -- but because of the reality that the only way he was going to derive the kind of revenue he felt he needed to come near balancing the budget or to apply funds to programs that he felt were useful was to tax those items that are essential, where the people could not escape that tax.

This is the context in which we find ourselves with the government wanting to implement some kind of program.

I would like to go back a step, because this summer we had a conference of the 10 Premiers of this country. Among those at the conference, of course, was the Premier of Ontario, representing the largest province and probably the most economically powerful province; if not the most economically solvent province at this time, at least the most powerful in terms of numbers, in this country.

It seems to me that the Premier dithered most of the summer. He said he wanted to be very careful about what he implemented, he wanted to assess all the possibilities and he wanted to look at every possible program and initiative. I suggest, I think quite fairly, he was dithering most of the summer, hoping against hope, as were so many of the Premiers, that the federal government would implement full wage and price controls, comprehensive and across the board.

There is a practical advantage, if we want to talk about full and comprehensive wage and price controls and having them implemented from the federal level. The political benefit is that the Premier could put a lid on some of the expenditures he felt he had to put a lid on and control the economy in Ontario without accepting the responsibility and the flak that goes with implementing a program of wage and price controls.

As I have said many times to my friends opposite, the Premier wanted to be in his usual position of being first in line to accept the credit for anything that goes right in this province and last in line to accept the responsibility when there is a tough decision to be made or when things go wrong. It is much easier, in that case, to blame the federal government and, of course, for the federal government to blame the United States or world conditions. I guess that is a political reality. It is my contention that is why the Premier dithered so long before implementing a program.

Having waited as long as we did for the economic program to be introduced in this House, we had a right to expect it was going to be a full and comprehensive package that would lead us towards economic recovery. We in this party recognize, as I am sure most people in this province recognize, that inflation is an extremely important problem confronting us. In my view, of equal importance, if not more importance at this juncture in October 1982, is the problem of unemployment and the devastating effect it has on the people of this province and specifically on those who are directly affected.

It seems to me that what we required was not simply one bill striking out at one sector of the economy, but a comprehensive package that would have ensured economic recovery. We in the official opposition on many occasions have advocated several measures we feel would be conducive to that result.

We have a situation in Ontario, looking specifically at the bill that has been presented, where I would judge most people, including some of those affected by the bill, would be in favour of a program of restraint. Almost all the provinces have implemented some kind of program of restraint; the federal government has implemented a program of restraint; indeed, most of them have looked at both wage and cost controls.

We all know it is much easier, unfortunately, to control wages and salaries than it is to control prices and costs. I am talking not just about imported costs, but also about those within the country. There was thus a zeroing in on wages and salaries, but I suggest that most people, as responsible Canadians or responsible Ontarians, are prepared to accept restraint as long as they know the restraint package is a fair package. That is where the bill presented to this House falls down.

Mr. Cooke: But you are supporting it.

Mr. Bradley: My friend the member for Windsor-Riverside likes to discuss the fact that we in the official opposition have adopted the position of wanting to amend the bill to make it more acceptable, recognizing the realities of March 19 with 70 Conservative bristles on the broom that sweeps most matters under the rug.

8:30 p.m.

I point out to him -- and this is what happens in difficult times -- that some people rise to the occasion and others simply take the view that they are adamantly opposed and that is that. Perhaps that is an admirable view. That is a very attractive view to a person such as me who is characteristically opposed to legislation of this kind that would zero in on one sector of the population.

But I do remind the member, and I am sure he is aware of this, that even very recently the federal NDP finance critic, the gentleman who succeeded as the present leader of the New Democratic Party, advocated full wage and price controls, wanting controls on the prices, naturally, but accepting the fact that everything, all wages, salaries and prices, would be fairly controlled.

One can attempt to say that it is not true. The federal member for Brant, Mr. Blackburn, is a person who on some occasions has been known to have advocated this in the difficult economic times we are in, as long as they are applied in a fair fashion.

Mr. Nixon: He is a very sensible chap.

Mr. Bradley: This is sensible. This is what happens. This is what emerges in difficult economic times.

Mr. Cooke: This is not a fair bill so you should not be supportive of it.

Mr. Bradley: I agree, this is not a fair bill, and that is why we wish to see several changes made to this piece of legislation.

What is missing then, as I have indicated, is the total economic package. In itself, and I think this is fair to say, this bill will not create any jobs in Ontario. The suggestion is that somehow, if we hold down the wages of our public servants, we are going to create some jobs. We cannot create jobs unless the money that is saved from that kind of initiative is applied to a job-creation program.

This brings me to British Columbia. The member for Cochrane North (Mr. Piché), who feigns as though he is playing a fiddle while the poor people of his constituency are suffering from unemployment --

Mr. Piché: If we've heard it once, we've heard it a hundred times.

Mr. Bradley: While he fiddles, he should recognize that in British Columbia when the government was arguing with its public servants and got involved in some rather vicious name-calling back and forth, ultimately the public service union said to the government: "You show us an economic package. We are prepared to show restraint. We are prepared to accept somewhat less than we would have liked if you can show us an economic package in which you are going to use that money."

This government, to this time, has kept that a secret. We keep asking the provincial Treasurer, "Please provide us with the shopping list you have, this list of initiatives you are prepared to take if the federal government does not act." We get silence from the provincial Treasurer.

I am sure there are many on that side who are wondering about that. I do not expect them to speak up. That is the name of the political game. If one is looking for a cabinet post or parliamentary secretaryship, or even if one wants to keep peace within the caucus, particularly on the government side, one will tend not to speak out on items of this kind. But I would think that secretly many of the members who are sitting on the other side are wondering where the rest of the economic package is and how the government can zero in on one particular sector.

Hon. Mr. Ashe: Did you phone your Liberal colleagues in Ottawa and ask them? Did you phone Pierre and ask him?

Mr. Bradley: I should not even get involved with the member for Durham West because his answer to everything is to blame Ottawa when it goes wrong and to take credit when it goes right.

Hon. Mr. Ashe: It's very easy to do.

Mr. Bradley: That is simplistic, and he is nothing but a party hack when he does it. He has established a reputation as a party hack. I am sorry to say he is because if the party took the opposite tack he would be saying that is right.

If the member for Durham West would stand up one time and say the party is not always right, even within caucus, instead of being a party hack on every occasion --

Mr. Speaker: Back to Bill 179, please.

Hon. Mr. Ashe: If you believed that, you would know enough not to be a Liberal.

Mr. Bradley: I am not bothering with the member any more. He is a hack and that is it. I am sorry, but he is. Even the member for Sudbury (Mr. Gordon) will speak out once in a while.

Hon. Mr. Ashe: You don't really believe that.

Mr. Bradley: I will not have the chance to attend one of his caucus meetings, I am afraid.

Hon. Mr. Ashe: No, I am afraid you won't.

Mr. Bradley: I could tell some stories of whether I could have or not, but I will not get into that.

Mr. Nixon: Don't tell me somebody asked you to be a Tory cabinet minister also.

Mr. Bradley: There just aren't enough seats over there, gentlemen.

Mr. Nixon: Some of you guys are going to have to retire.

Mr. Conway: A party whose middle name is Jezebel.

Mr. Bradley: Now that the din has subsided --

Mr. Speaker: Now to Bill 179.

Mr. Bradley: Yes. Through our leader, our caucus expressed the viewpoint that we would be in favour of a restraint program as long as it applied to everyone equally. We think profits, prices, dividends and all salaries, wages and forms of remuneration require the same treatment. While the present legislation tends to come down hard on salaries and wages, it uses the velvet glove on profits and prices.

This bill makes public servants the scapegoats for the mismanagement by this government over the last several years. The Conservatives are elected on a continuing basis, and that always amazes me. I suppose I should be charitable enough to admire their being returned to office if it were as great financial managers.

The member for Beaches-Woodbine (Ms. Bryden) listed a number of areas where this government has squandered funds unnecessarily. Now the government is asking public servants to restore its triple-A credit rating which it has squandered away. We are in the position of saying that the government has spent $40 million --

Interjections.

Mr. Bradley: I will get to Saskatchewan in a moment and to Manitoba and British Columbia.

Mr. Speaker: Order.

Mr. Bradley: I will get to all those examples shortly, but I know the Speaker wants me to stick to the bill.

First of all, the Premier wanted a jet. One of the things we have lost over here is that he finally sold the jet and we cannot say, "Sell the jet," any more. At least he traded it in for two water bombers.

Mr. Piché: On behalf of the people of northern Ontario, thank you for shafting us.

Mr. Bradley: I know the member for Cochrane North disagrees, although the member for Fort William (Mr. Hennessy) voted for my resolution in April to sell the jet, and the Minister of Transportation and Communications (Mr. Snow) always enjoyed my interjections calling upon the government to relinquish its rights to this executive jet.

We saw an advertising budget of some $40 million in the fiscal year immediately preceding the election of March 19. This government took taxpayers' money and spent it on self-congratulations. Anybody over there who could objectively contend that "Life is good, Ontario. Preserve it, conserve it," did not have a political message is not being entirely honest with himself. I think we recognize that most of the messages that were presented in that period of time with the $40 million of the taxpayers' money that was squandered on that aspect of government expenditure were to promote the cabinet ministers and the government across the floor.

Then we have Minaki Lodge, which has a great history and where we keep pouring good money after bad. As if the first show was not enough, we then had the road to Minaki. An expenditure was made to pave a road to get to Minaki Lodge.

Mr. Piché: There he goes. He is against northern Ontario again.

Mr. Bradley: We are spending all kinds of money in an inappropriate fashion when we could spend it in northern Ontario to create real jobs. Even the member for Cochrane North should recognize that.

Mr. Piché: Start talking about projects in the south. There are all kinds of projects in the south that the member should discuss. It is always northern Ontario. They are against anything that happens in northern Ontario.

Mr. Speaker: Order.

Mr. Bradley: We are receiving an interjection, Mr. Speaker, I know you will want to note that --

Mr. Speaker: Never mind the interjections, please.

Mr. Bradley: -- from our prospective candidate in Kitchener in 1975, the former Minister of Culture and Recreation, now known as the Minister of Tourism and Recreation (Mr. Baetz). I think with a far straighter face and with more feeling he would have preferred to be over here criticizing those expenditures which he knows in his heart are wrong.

8:40 p.m.

Mr. Conway: With a great sense of Lutheran rectitude.

Interjections.

Mr. Bradley: I would suggest that the Minister of Tourism and Recreation could not possibly have been in favour of the outlandish reception held on the front lawn of Queen's Park. As would be the case with most of us over here, he could understand that a reception is a nice thing, that we want to put on a good face for Ontario, but not to squander $180,000 on a reception for people who are already wealthy enough to look after themselves. Yes, we should offer hospitality, but not the kind of outlandish display we saw, particularly in difficult economic times when the government is asking others to restrain themselves.

Then we have the land-banking schemes from a government which is supposed to be a small-c conservative government, stealing a plank from the Socialists who feel land banking of the kind the government has done in Townsend and other places is useful. All it did was tie up a great deal of government money. It was not put to productive use. Even when the government banked the land, it was not able to use it appropriately afterwards. Now the government is begging people to move to Townsend and is helping to build a new palace.

By the way, I should get to that, Mr. Speaker, because you would be interested. In Peterborough you are lucky that you do not have regional government because what all regional governments want to do now is to build new headquarters. In Niagara we have a $6-million monument to regional government sitting on the brow of the escarpment, which will probably cost $10 million before we are finished.

If there were a conditional grant on regional headquarters, which there is not, that is one area where I would recommend the government cut back. Of course, our regional council needed it to maintain its identity and to a show a focal point for the people of the region. We did not need that kind of focal point. It is another example of governments, this one the creature of the provincial government, spending money inappropriately.

We look at the approach to the legislation which was put before us. An attractive approach is simply to vote against the bill. My own instincts are to vote against a bill of this nature because it zeroes in on one specific segment of the population. The approach our party has taken is to modify the bill, to amend the bill, and to ensure the bill goes to committee so it can be changed to make it more equitable because, in reality, the 70 members across the floor have the opportunity to ram the bill through as is.

If we are able to provide reasonable justification for the amendments we are proposing, there is the glimmer of hope the bill can be modified to make it a little more acceptable to those who must face its consequences. Along with the New Democratic Party, we indicated that we were prepared to force the bill to committee to make the amendments we feel are necessary and to allow those people who are directly and indirectly affected by the bill to make their views known to the committee and to suggest possible amendments to or deletions from the bill. That is something we want those people to be able to do.

Mr. McClellan: Let the record show Jim Bradley is laughing.

Mr. Renwick: We will begin to see the wording of the amendments crossing the floor so you will have it right.

Mr. Speaker: Order. Back to Bill 179, please.

Mr. Bradley: I do not want to get into labour legislation that we were into in previous times in a minority government where the NDP had to swallow itself.

Mr. Renwick: The Tories will have to draft them because you will get them wrong.

Mr. Kerrio: Don't cut off your money. Your 30 for 20 members is liable to go.

Interjections.

Mr. Bradley: With these interjections, I think we should know what happens when even the most radical people come to power, when even those who claim to be the greatest champions of working people in any political jurisdiction actually come to power. I have some examples. I hope I was able to pick up at least a few.

Mr. Renwick: Have you got anything from Sweden recently from Olaf Palme?

Mr. Bradley: No, I have nothing from Sweden. I want to stay within the jurisdiction of this country.

Mr. Renwick: You wanted to talk about your working class friend Margaret Thatcher.

Mr. Cooke: We could talk about Pierre.

Mr. Speaker: Never mind the interjections, please.

Mr. Bradley: I want to talk about this country. I want to talk about August 17, 1976, when the Premier of Manitoba at that time, Ed Schreyer, who is now the Governor General of Canada, announced in Winnipeg that he recognized that there was a need for cutbacks -- and that is a bad word on some occasions.

I quote: "He has ordered cutbacks in the provincial civil service and in government programs in an effort to reduce expenditures by between $18 million and $30 million. Mr. Schreyer said the action was needed because proposed new federal policies would cost Manitoba about $30 million." That sounds familiar. They say that across the floor. "He said that if the cutbacks prove insufficient, an increase in provincial income tax could be considered.

"As part of the austerity measures, cabinet ministers have been instructed to review departmental operations and prepare a list of possible cutbacks and deferrals; defer funds not already committed to expansion of programs; scale down construction and development programs; attempt to reduce administrative and controllable expenses; and refrain from filling vacant posts. The Premier said the civil service is to be frozen at its present size and reduced gradually by 10 per cent."

Mr. Conway: Repeat that.

Mr. Bradley: That is what happened. He said that the civil service was to be frozen at its present size and reduced by 10 per cent.

Mr. Conway: Who said that?

Mr. Bradley: That was the New Democratic Party Premier of Manitoba. I suppose that happens when one has to assume the responsibilities of public office and I do not criticize him for it. I think he was looking at the economic realities of 1976 and saying that this was a reasonable program.

Now let us go to British Columbia because --

The Acting Speaker (Mr. Cousens): Is the honourable member dealing with Bill 179?

Mr. Bradley: Yes, I most certainly am dealing with Bill 179 in relating how other jurisdictions have dealt with the same items affected in Bill 179.

Mr. Stokes: In 1964? Is that what you are saying?

Mr. Bradley: No, I am at 1974 and Premier David Barrett. This is what Mr. Barrett did. It says here: "Firemen from four Vancouver area municipalities returned to work August 10 after agreeing to a British Columbia government bill ordering them back. But the workers did not return to work willingly. Legal adviser S. R. Chamberlain said in an interview August 9" -- he said the men were very unhappy to go back.

"Labour Minister Bill King said it was a regrettable step to take, but all other methods of solving the dispute between the men and the four municipalities had failed. At the same time, he announced a search for a better way of dealing with work stoppages in essential services such as firefighting, police service and hospitals."

That is what happened when Dave Barrett was in power. He recognized that sometimes we run into difficult circumstances. He ran into difficult circumstances on October 15, 1975, as well.

Mr. Renwick: That's seven years ago. Isn't that amazing?

Mr. Bradley: It was seven years ago that the NDP was in power in British Columbia, so I cannot refer to any other time.

To continue to quote: "Special legislation forcing striking food industry, forest, railway and propane workers back on the job was passed by the British Columbia Legislature in an emergency session October 7. The bill, called the Collective Bargaining Continuation Act, gave the more than 50,000 workers involved 48 hours to return to work, imposed a minimum 90-day cooling-off period and ordered labour and management to resume bargaining immediately. During the cooling-off period strikes, lockouts and picketing would be prohibited and the terms and conditions of collective agreements as of January I would be in force. The provincial cabinet would have the power to extend the period for an additional 14 days.

"Premier Dave Barrett said the bill tells the parties involved to 'grow up, get with it and get your heads together -- if you can't do it, we will.' The legislation sped through three readings in seven hours, winning approval by a 46-to-3 vote. The dissenting votes came from three backbenchers of Mr. Barrett's New Democratic Party."

And so we see that Mr. Barrett, a person who, I think we would all agree, has a genuine social conscience and a dedication to collective bargaining rights, when confronted with these kinds of circumstances, was prepared to order the workers in that province back to work.

Then there is the province of Saskatchewan, because this bill addresses itself to removing certain rights that I think all of us find abhorrent to have removed. We will recall that prior to the last provincial election the government of Premier Allan Blakeney denied the opportunity -- in fact, through legislation removed the right -- of hospital workers in Saskatchewan to strike. He recognized that in his view it was a necessary step and he took that tough step. I would point out, once again, that when some people gain power the tune changes. The responsibilities of office make them take action that previously, as members of the opposition, they may have felt was detrimental.

Because it serves as a possible example, but I am glad that it will not be so used, probably the most difficult legislation introduced at present is that of the Quebec government. It seemed to me that one of the previous leaders of the New Democratic Party felt the Parti Québecois had a social conscience. I do not say this in a malicious way at all because he thought that group, the Parti Québecois, had a social conscience but he did not agree with its separatist tendencies. It is important to say that when Stephen Lewis was the NDP leader he did not agree with them for that reason, but felt they had a social conscience --

Mr. Conway: I remember the glassy eyes of the member for Riverdale (Mr. Renwick) in the National Assembly in Quebec City.

The Acting Speaker: Order. I do request that the honourable members deal with Bill 179 as it is in the House.

Mr. Bradley: I am most certainly attempting to deal with it in a much more direct manner even than the member for Downsview (Mr. Di Santo) who spoke for five hours.

Mr. Conway: Seven hours.

Mr. Bradley: Yes, seven hours.

Let us see what they are doing in Quebec, to see whether that should be what we are doing instead of what we are doing in Bill 179. Some people have suggested it is because the Quebec government was elected with great support from the Quebec teachers' association and certainly from public servants. Let us find out what Quebec has done as a result of the economic difficulties it faces.

I have an article from the Canadian Press, October 4, 1982, with the heading "Adamant Parti Quebécois Is Not Regarded as the Workers' Friend." It says: "The hard reality of the recession in Quebec -- 15.9 per cent unemployment and more in some regions, declining production and bleak prospects for recovery -- underline the tough stand the Lévesque government is taking with the 335,000 employees on its payroll.

"Wage offers of zero and five per cent and proposals to take back acquired rights in the area of working conditions spell the end to any claims the Parti québecois may have had to being the workers' friend. Reining in the sacred cow of job security, the government proposed that job tenure only be guaranteed after two years of employment and said that in deciding future layoffs, it would like to keep employees on because of competence rather than seniority."

The wages of the 10,000 professionals making over $37,000 a year will be frozen for the duration of the current contract running until 1985, while those earning less would only get 3.27 per cent in the final year of the contract.

"The key to Quebec's negotiating strategy is Bill 70, a law passed by the National Assembly in June, cutting the wages of all public sector employees by 18.9 per cent in the first three months of 1983. The measure will save the government $521 million, as it tries to keep its deficit below the $3-billion mark." Does that sound familiar?

"Starting April I and for the remainder of 1983, the wages of civil servants, health and education workers will rise but will be frozen at a level below what they earned at the end of 1982. The law puts the squeeze on unions negotiating with the government. Because of the sliding scale built into the offers, the 110,000 public employees making more than $25,000 would earn less at the end of 1985 than they do now.

"The average Quebec public employee will have an annual salary of $24,345 on December 31 this year. Bill 70 will reduce this to $19,614 on January 1, but the annual rate will rise to $23,267 on April 1. The annual wage rate of the lowest-paid blue-collar worker would go from $16,000 on December 31 to $13,000 on January 1, rising again to $16,580 three months later.

"Hardest hit by Quebec's hard-line approach are the 82,500 teachers in the province who won a generous wage and working condition package in 1980 -- just before the sovereignty-association referendum. Quebec teachers, with an average salary of $34,000 a year, have the shortest teaching week in Canada and generous job security provisions. And it's no secret that they are among the most active PQ supporters and campaigned for a yes vote in the referendum.

"'They did not deliver,' joked one wag, commenting on plans by Education Minister Camille Laurin, a former teacher, to increase the work week of teachers to 27 hours and stop paying them full salary when their teaching positions are abolished.

"Laurin drew comparisons with Ontario in presenting his view that Quebec teachers have it too good, noting that Ontario teachers work a 15 per cent longer work week and education costs are 25 per cent higher in Quebec.

"Yvon Charbonneau, president of the Centrale de l'enseignement du Québec teachers' union, called the proposals 'brutal' and made his own comparison.

"Despite its posturing, the Quebec union movement, caught between the rock of an 18.9 per cent pay cut and a potential hard place on the welfare line, appears to be taking the government proposals lying down. For example, the Federation des affaires sociales, which represents about 71,000 hospital, community clinic and other health workers, is considered one of Quebec's most militant unions. But at its annual convention this week the union delegates conformed to the restraint line, urged union negotiators to keep their expenses down and voted down a resolution to add $1 million to the strike fund through a special assessment on members."

I do not read these things into the record to be inflammatory. I read them into the record instead to indicate to members of this assembly what happens to even those who appear to be the most favourably inclined towards labour and the rights of working people in a political jurisdiction when they are confronted with difficult economic choices.

I am sure that none of the examples I have given are examples of governments that wanted to take this action. Indeed, many would agree that in British Columbia, Saskatchewan, Manitoba and Quebec some interesting and some favourable social legislation has been forthcoming and that many of the people who are elected with the support of organized labour in those provinces would not look kindly on having to implement policies that could be characterized as being so anti-labour, but with the responsibilities of office they were forced to do so.

Looking specifically at this legislation, I think there are some problems with it. The people I have talked to in the public service, if they did not sign a contract before September 21, are not happy about being confronted with nine per cent, even though so many of them said to me:

"Well, under the circumstances a lot of us would have been hard pressed to get nine per cent anyway, but we do not like the nine per cent and we dislike the five per cent even more. But that is not the focal point of our objection to this, even though we consider it to be regrettable. Our main concern is about working conditions, about the fact that the government is removing certain rights from us in negotiations, particularly on nonmonetary items, which can be so very important."

The member for Oakwood (Mr. Grande) and I have been involved in Bill 127 for some time. We recognize, as I am sure most members of the committee do, how difficult it is to define what a financial benefit is. There has been an honest difference of opinion. We have tried to pin people down on both sides of that issue as it affects Metropolitan Toronto, and it is difficult to do so. In the areas where most of us would consider nonmonetary items to be at hand or under discussion, some on the management side would consider that these are monetary items and would want to include them in any package. Those are problems.

I thought the people in the community colleges brought forward some real concerns that should be addressed when the bill goes to committee and should be addressed through amendments. They have contended the following: "The defects in this legislation, the most salient of which are listed below, will result in inequitable and unfair treatment of college teachers, counsellors and librarians. It will inevitably lead to a further deterioration in the quality of education for more than 139,000 full-time college students."

Here are the matters that should be addressed by both the government and opposition in committee and where amendments should be put forward.

9 p.m.

First, they indicate there is no mechanism for negotiation of nonmonetary items. For example, no access to arbitration, no right to strike over these items and no board of appeal. The government says people can continue to negotiate these items but, unless there is a possibility of a sanction being applied, whether that sanction is in some cases the right to strike to withdraw services, or even the right to compulsory binding arbitration, as some in the public sector have asked for at certain times -- not always, most of the time not wanting it to be compulsory -- they do not even have that opportunity.

Second, there is the danger of contract language being imposed by the employer. This is a real concern they have and something that should be addressed by the government.

Third, they say they do not have the type of job security other civil servants have. They are facing layoffs, even though the numbers of students are increasing. They had layoffs last year and there are layoffs pending, although at least 10 per cent more students have enrolled this year.

I make this comment, because one of the areas where we have to be very careful is that of transfer payments to municipalities, to boards of education and to universities and colleges. If we are able to maintain them at a reasonable level while the government is holding down the salaries and wages, then at the very least these people would have their concern about job security addressed. I know many people in those circumstances and it is a genuine concern. Ultimately, the education of the students is affected.

Fourth, if next year colleges are given only a five per cent increase in funding, they will not have enough money. It is quite evident they cannot control some of their increased costs. They ask what happened to slip-year financing. There are expenses such as maintenance and equipment, which are fixed costs or are increasing costs, and that problem has to be addressed.

Fifth, what happens if the employer repeats the most recent offer, changing only the salary offer, for example, from six per cent to nine per cent? The most recent offer was rejected largely because of new language, which took away rights and protection they have had for years, as opposed to saying anything about the figures on increases in prices. They are concerned about the nonmonetary items. That is why they rejected the last management offer in that case. If they reject a new offer that contains a nine per cent salary increase because it still contains objectionable language, they will be forced to accept a zero per cent salary increase to keep this language out. In other words, they will have to bargain off their potential increase in salary against nonmonetary items.

Sixth, salaries of all college employees should be available to public scrutiny. Salaries for academic and support staff are already public knowledge. Salaries for administrative staff should be as well. The legislation is full of loopholes that would allow evasion of the law by artificially changing job titles. They are asking that management within the community college structure be hit with the same circumstances as nonmanagement people.

Seventh, they mention that when a salary is over $35,000, there will be no merit increment after October 21, 1982, for two years. They call this inequitable treatment for employees within colleges, and I would like to address that briefly a little later on.

There are deficiencies in the bill, which I think can be addressed partly by the government and partly by those of us in the opposition who are willing to offer some reasonable amendments to this legislation. Let us look at some of the areas where there is a deficiency and where the government or the opposition can attempt to fix up the bill.

First, there is the matter of equity, the matter of comprehensive wage and price controls. A comment I hear time and again from public servants is, "Why do you zero in on us?" They do not like wage and price controls. I think most people see them as administratively difficult and as maintaining some inequities sometimes. What they are saying to me is: "If everybody had to live under those controls, if we did not open the newspaper and read that some very powerful group was able to extract a 20 per cent increase while we are stuck with a five per cent increase, if that was not the circumstance, then we would find it easier to take wage and price controls. If you would come down as hard on prices and costs as possible, then we would find it easier to take."

There is the situation with Consumers' Gas, for instance, which indicates it is attempting to maintain the government guidelines, but when one examines its increases carefully --

An hon. member: I wish you would go back to Saskatchewan.

Mr. Bradley: I don't want to go back to Saskatchewan --

Interjection.

The Acting Speaker: Order. The member who is speaking out of turn is out of his seat as well.

Mr. Bradley: There is one course of action which is available. I could bring in the former member for High Park-Swansea to throw a book at the member who is interjecting, but I will not do that because the former member is busy running for city council in Toronto.

One way of looking at this is that it should affect everyone if it is going to affect anyone. Specifically, many in the public service have talked about the doctors. We in the official opposition and the people in the New Democratic Party have indicated that when you have a control program, the doctors, although they may not like it, should not be exempted from it, because they are paid from the public purse through Ontario health insurance plan premiums.

I see the Treasurer coming into House. That reminds me that we believe OHIP premiums should be held to the same level as wages and prices. We can keep the spending in line by eliminating the squandering of money on advertising Minaki Lodge, Suncor and 10,000 other areas.

The Acting Speaker: I am having real trouble here. Order.

Mr. Bradley: In our opinion the wage restrictions should not be retroactive into 1981 for those groups of affected employees who, unfortunately, would be caught by the retroactivity provisions. We think that the notching provisions, which are far less drastic than those in British Columbia, for instance, are simply not sufficient. However, the people at the lower end of the income scale should be permitted under the legislation to have a much larger percentage increase than those at the top end of the scale. We would hope that the Treasurer would modify his notching provisions so that those at the lower echelon would be able, in these difficult economic times, with costs going up, to meet their financial commitments.

I believe that, with the approval of the board, there should be equity catch-ups in situations where unfair treatment by the imposition of limitations can be clearly demonstrated. This brings me to the matter of the public health nurses in Niagara who, as the Treasurer will know, were on strike from early May of this year until the bill was put into effect. I believe their contract expired on February 15. They waited for a couple of months and then negotiated in good faith. They were looking for something pretty close to equality in per hour rates with those who work in hospitals. Anybody who knows the work that is done by public health nurses knows that what they were seeking was reasonable and just.

When the bill was introduced, they found themselves in difficult economic circumstances. They were offered 12 per cent and three per cent, or an eventual 15 per cent. They were not aware that the legislation was going to be implemented retroactively. Therefore, as I understand it, they did not come to a memorandum of agreement.

In our view they should have the opportunity to put their case to the Inflation Restraint Board. They should be permitted to explain that an offer had been made and, although they do not like it, under the present circumstances and because they had been on strike and without a contract for so long, they should be permitted that kind of increase which, I believe, at the present time would be allowed by management in this case.

It is always easy for the Minister of Revenue to say: "That is your tough luck. You take the gamble."

9:10 p.m.

Hon. Mr. Ashe: I did not say anything about tough luck. I said they took the gamble and lost.

Mr. Bradley: But when it is their friends -- Morley Rosenberg took a gamble at running in Kitchener; he lost and he got a $60,000 a year job.

Hon. Mr. Ashe: Some win and some lose.

Mr. Conway: Some lose.

Mr. Bradley: It was not the provincial judgeship he was promised or he said he was promised, but he got a $60,000 a year job. I feel sorry for him because, of course, his salary will probably be held down by five per cent.

Mr. Conway: No gamble; a deal among blood brothers.

Mr. Bradley: That is the difference between the public health nurses in Niagara and Morley Rosenberg. Do not give me that guff about how people take chances, how they gamble and they accept the consequences.

Hon. Mr. Ashe: They gamble and some win and some lose.

Mr. Bradley: Morley got a job as so many of his Tory friends do when they are defeated in an election.

Mr. Conway: Some lose and therefore win.

Hon. Mr. Ashe: In the case of the feds they go into the permanent retirement called the Senate.

Mr. Bradley: It reminds me of the biblical quotation that, "The last shall be first and the first shall be last." If the member is so concerned about the federal government, why does he not run federally?

Mr. Conway: Don't let Bill Kelly walk into that chamber. Don't let Bill Kelly defile the chamber if that's the way you feel.

Mr. Bradley: Right. We also see a problem with the section which includes merit increases in the purview of this act. We feel it must be narrowed so as to exempt increases based on longevity or qualification. If the definition is not effectively narrowed the worker is subjected to double jeopardy in situations which contain pay scales within a certain pay range classification. The classification range may legitimately be subject to the five per cent limit, but the worker in the midst of vertical mobility from one pay jump to another is being doubly penalized.

I am familiar with this in the teaching profession. For instance, people who are receiving certain academic qualifications and have been teaching for a certain number of years, are at a certain placement within the grid. When they achieve the degree known as Master of Education, they move up in the grid.

In effect, this will treat those people unfairly by saying, "Not only will your regular salary increase be held to five per cent, but the work you have done academically to upgrade yourself and your academic qualifications, and the extra year you have spent in terms of experience which we have recognized in the past, also will not be permitted if they are sending your salary over $35,000." Those people are discriminated against.

There are also those people who are confronted with a problem with pensions. That has to be addressed and might be addressed in certain innovative ways. People who are in their last year in circumstances where the best five years or the best seven years are what the pension is based on might have a provision where they would be paid somewhat more than what we see in the provisions under this bill. This would allow their pensions to continue in a fair fashion.

That requires some innovative thinking on the part of the government. There are a lot of people on the payroll who could surely dream up some reasonable way of overcoming that problem.

We believe all government-controlled prices must be included in the application of this bill. Specifically, as I have indicated, this means Ontario health insurance plan premiums and Workmen's Compensation Board premiums which must fall under the act.

We believe all economic criteria by which price increases are to be reviewed must be published regularly in the Ontario Gazette whenever they are formulated and changed. Objective criteria must be set out in the bill by which a price increase must be referred to the board for review. At present, the minister may or may not refer the matter to the board, depending on whether he has formed the opinion.

On what basis is he to form this opinion, we wonder. Where is the opinion to appear? There must be a mechanism by which the weight of the review board will automatically swing into effect. There are certain provisions to pass-through costs. These should not be automatically 100 per cent. The extent of the pass-through must be reviewed. A mechanism similar to that which exists in the landlord-tenant situation might be borrowed: namely, a minimum increase of five per cent is permissible automatically and anything above that could go through only with the approval of the board.

The board in itself is pretty autocratic. It has the kind of powers that we in the opposition do not want to see it have. The operation of the board in all of its decisions must be held accountable to a higher body, in our opinion. This means that reasons must be required for all decisions, on both wages and prices. Moreover, some sort of hearing, along with an opportunity to be heard for someone who is to be affected by a decision of the board, must be present in the bill.

The members will recall that in the wage and price controls which were implemented by the federal government in 1975 at least there was a provision for an appeal of a decision of the board. We feel it is essential the bill be amended so that there is a provision for that kind of an appeal. That is not contained in this legislation. Explicit appeal procedures from decisions on both wages and prices must be built into this bill.

To the maximum extent possible, the process of free collective bargaining must not be suspended. This means the right to strike must not be abrogated. In turn, this means that collective agreements are not, by operation of the bill, automatically unilaterally extended for a period of time to coincide with the extension of the compensation plan. Only the compensation plan should be so extended, if that is what the government is intent on having in its bill.

The risk of work interruptions is worth the benefit of preserving the collective bargaining process. I would like to see this accomplished by an amendment which simply deletes certain sections of this bill.

For instance, when people are faced with a nine and five per cent guideline from the government, the suggestion that they are going to go on strike anyway, when they know the legislation says they can only get that much, is silly. They are not going to do it.

But in terms of nonmonetary items, there might well be changes undertaken arbitrarily by management at the expiration of the contract which could be totally unacceptable to the employees. These could abrogate their civil rights or could affect their health and safety. There are a number of reasons for nonmonetary items. We believe there should be a provision in the bill for the continuation of the collective bargaining process so that the sanctions which are in existence at present, which have that kind of special right, a right to which they are entitled, are not removed under this legislation.

As appears in the Ontario Human Rights Code, there is a price put on companies for doing business when they are obtaining funding from the government. That is another area I would like to address because one can put on stipulations. For instance, those private sector companies which fall into this category should submit, at least, their price structure within Ontario, and perhaps other costs, to the scrutiny of the board.

The adoption of this bill could be linked to certain other concessions, for instance, a commitment on government expenditure in advertising, on major capital works; the introduction of a mini-budget which we would want to see along with this bill; compensating payment into the public employees' pension superannuation fund over and above the five per cent. I think that is how one could overcome the problem of those who are adversely affected by wage and price controls in the specific year that they are nearing retirement: by making a compensating payment into the public employee pension superannuation fund over and above the limit of five per cent.

Mr. Nixon: You have lots of time.

Mr. Bradley: My friend, the House leader for the Ontario Liberal Party, says that I have lots of time --

Mr. Nixon: It is getting good.

Mr. Bradley: -- but I would not want to continue on all night. I believe the member for Lake Nipigon (Mr. Stokes) is next and I always enjoy his contributions in the Legislature.

With no affront to the gentleman who is in the chair at the present time, I always enjoyed the member for Lake Nipigon's work as Speaker. The only detrimental aspect of having him as Speaker was that we did not have, let us say, the opportunity to hear his contributions to the House as a private member. But I always respected him for his impartiality as Speaker. Particularly, I loved the days when he came down hard on the members of his own party. At that time, of course, they were not his own party but they are once again.

The Acting Speaker: On Bill 179.

Mr. Bradley: But, Mr. Speaker, I know you want me to deal with Bill 179. I know that you would want to know what the Toronto Star had to say about Bill 179. On Saturday, August 21 of this year, under the headline of "Davis Should Lead the Way," it stated -- and finally we had, as I say, one small component of a total package but not the entire package. It said:

"Premier William Davis should not play at being a shrinking violet next week, when the provincial first ministers meet in Halifax to discuss the country's economic plight. Strong, nationwide measures are needed to curb inflation and to stimulate recovery -- and Davis's reluctance so far to publicly push for them can only be a sharp disappointment to the people of this province.

9:20 p.m.

"The statistics Davis will bring to Halifax outline the need for action. In Metro Toronto, the cost of living is up a painful 11.4 per cent over last year, cutting deeply into people's living standards. Unemployment in Ontario stands at 8.6 per cent, and is expected to worsen to 9.3 per cent next year. If we're lucky, the province's economy will grow by a modest 2.9 per cent next year, barely cancelling out this year's slump of 2.6 per cent.

"If the Ontario economy -- and indeed that of Canada as a whole -- is to be turned around, the provincial Premiers will have to contemplate sweeping measures. Across-the-board wage and price controls are needed to curb inflation; government spending is required to spur investment, to create jobs and to reduce the burden of interest rates on individuals and business firms; and public confidence must be restored in our governing institutions.

"In the privacy of the Halifax meeting, Davis should strive mightily to convince his fellow Premiers of the need for joint action along these lines. And if Davis fails to win agreement, he should return home" -- that is the key point -- "and implement the measures here, as Liberal leader David Peterson proposed this week. The people of Ontario need not put up with economic mismanagement simply because other provincial Premiers aren't willing to tackle the problem."

That is why we wait with great anticipation to have revealed in the House the Treasurer's shopping list, those items he will undertake if the federal government does not take the action he feels is necessary. But we have not seen him show his cards up to this time.

I continue with the article: "The case that Ontario dare not impose across-the-board wage and price controls or dig deeper into the provincial Treasury to find money to revive the economy simply isn't convincing.

"The Ontario government is fond of citing the provincial deficit as an excuse not to spend money to spur growth, create jobs and protect the province's wealth-generating capacity. If we increase the deficit, the argument goes, our international credit rating may suffer.

"But that very credit rating is based in part on the government's financial health and tax-raising potential, and on the province's economic potential. And since both are being weakened by the current economic slump, prudent management would argue for more -- not less -- government spending to boost confidence in our province.

"For his part, Liberal leader Peterson makes sense when he says Ontario might well impose the mandatory, across-the-board ceilings of six and five per cent on wages and prices that Ottawa has urged, but not yet found the will to enforce. While a full national policy of controls imposed by Ottawa or agreed to by the provinces would obviously be more desirable, Peterson's proposal is far from being the nonsense some short-sighted critics have made it out to be.

"Putting a ceiling on wages and prices would cut inflation generated here, by helping to curb the rising prices of goods and services ranging from housing to autos to clothing to furniture. The consumer would benefit from at least that much, even if some costs -- for energy, goods from other provinces or abroad or even the cost of interest rates -- could not be effectively controlled." He is talking provincially.

"Indeed, even if every other province were to spurn controls, Ontarians would in the longer term benefit from self-imposed controls, because our province would become more attractive as a place where companies might invest and create jobs. And across Canada and abroad, wider markets would likely open up for Ontario's cheaper goods, further spurring our own economic growth.

"As he travels to Halifax next week, Premier Davis should firmly resolve to seek a national consensus on wage and price controls and on economic stimulus. Failing that, Ontario should go it alone." Ontario has chosen not to go it alone but to wait and hope the federal government will bail it out. The wait could be a long one."

There are certain items the Treasurer could undertake that would alleviate part of the inflationary pressures we face. He says he has no control over energy prices and he questions whether the Ontario Energy Board has any option but to pass through certain costs of the companies that are producing energy for Ontario or providing energy to Ontarians.

For instance, I would say that the ad valorem gas tax allows the provincial Treasurer to help those people who are hit by inflation that is stimulated by that tax by returning it to its former basis, that is, a fixed per gallon or, as we say nowadays, per litre tax as opposed to a tax which increases every time the wellhead price of oil increases and filters down to Ontario. There is convenience there. The government blames the feds for the increase in Alberta and then it takes the revenues derived from it and uses them for its own purposes.

There is a chance for the Treasurer to alleviate part of the inflationary burden on the people of this province. I could probably go on with many other suggestions. I know other members who will be speaking will be doing that.

Today, we find ourselves confronted, not with an economic package that we in the opposition had called for, not with comprehensive across-the-board wage and price controls even in isolation of an economic package which would at least have hit everybody fairly, in the same way, contemplating controls that would have some effect on prices and costs. Instead, we have a single bill, Bill 179, which zeroes in on one specific aspect: public sector compensation. As part of a total package, it probably would be acceptable, but in isolation it is not very acceptable. It needs tremendous changes through amendments in the committee to be proposed by the opposition and, we hope, by the government when it has received representations from those groups who are directly affected.

I implore all members on the opposite side to ask the Treasurer and those who are the real power brokers in the Progressive Conservative government to modify their legislation to make it fairer. I ask them to address the items I have mentioned tonight. I ask the people in the Conservative caucus to bring their influence to bear on the power brokers in their party to assist those people who are adversely affected by the bill. That is the first thing.

Second, I ask that they urge their government, their Treasurer and their Premier, as we in the opposition have, to bring in a total economic package designed to help bring about economic recovery in this province, including a package that has a strong influence on job creation within the boundaries of Ontario. At the present time I see unemployment as our number one problem and inflation a close second. We need many more components to this economic package before it is acceptable to those of us in the opposition and to the people of Ontario.

Mr. Conway: Jobs for more than Morley and Omer Déslauriers.

The Acting Speaker: Order.

Mr. Bradley: In the short term, by zeroing in on one specific segment of the population the government may have public opinion on its side, but ultimately, since the rest of Ontario does not really benefit very much from this isolated economic measure, it will find that public opinion will not be appeased by this one gesture which gives the government the opportunity to appear to be doing something about the economy.

The government has 70 members across there, and we in the opposition are limited in the actions we can take to persuade or force the government to take the kind of measures we feel are necessary. Therefore, I appeal to the members of the government party to take into consideration those things I have mentioned this evening, to amend the bill fairly substantially and to bring in the total economic package which all of us would like to see to bring about economic recovery in the province of which we are so proud.

Mr. Stokes: Mr. Speaker, Bill 179 is the brainchild of the Treasurer of this province (Mr. F. S. Miller), aided and abetted by other members of cabinet and by the Premier (Mr. Davis) trying to emulate his Tory friends in Ottawa, knowing full well that he would get the support from the Grit-Tory cabal in this assembly.

Mr. Conway: Nelson Riis is neither Grit nor Tory.

The Acting Speaker: Order.

9:30 p.m.

Mr. Stokes: It is a Grit-Tory alliance, a compact, almost a conspiracy bordering on fraud and hypocrisy, and it is designed for no other reason than to create the illusion that the Grit-Tory compact in Ottawa and Queen's Park is doing something about unemployment, inflation, high costs and high interest rates.

I want to refer to what the Premier said on the introduction of this bill on September 21, and I quote from page 3606 of Hansard:

"It is our view that some more appropriate mix of fiscal and monetary policies, some middle ground between restrictive monetary and expansive fiscal policies, is necessary to achieve real and sustained economic growth...

"One central element in such a recovery package is a national incomes policy. A comprehensive program of wage and price controls for all Canadians would have several advantages. It would reduce inflationary expectations; restrain domestic cost pressures and improve our competitive position; spread the cost of combating inflation across a wide spectrum of society, and demonstrate economic leadership at a time when consumer and investor confidence is at an all-time low in our country."

It is my personal view and it is the view of members of this party that it will do none of those things. Let me remind the Treasurer, who is leaving, that it was this government and that party over the past 40 years, and the Liberals for much of the 40 years in Ottawa, that presided over the economic mess in which the Conservatives in Ontario and the Liberals in Ottawa find themselves at this time.

This bill is designed for no other reason than to create the illusion that, as a result of this very selective jackboot treatment of a very limited sector of our work force in Ontario, all will be well by riding roughshod over some 500,000 workers in the province who have been earmarked, designated and fingered by the Treasurer as the brunt of this bill, which is supposedly going to effect economic recovery for the people in Ontario.

Canada's and Ontario's economic problems have very little to do with workers' wages. The root cause remains our overdependence on foreign capital and the consequent loss to the Canadian economy that foreign investments and foreign borrowing represent.

A measure of that loss can be determined by examining Canada's international balance of payments position. In 1981, our investment income deficit in the service account had reached a staggering $10.3 billion, up 48 per cent from the year before, 1980. To that $10.3-billion outflow of investment funds must be added the $21-billion deficit in the manufacturing account. In the two accounts that reflect the structural problems of the Canadian economy -- underdeveloped manufacturing and overreliance on foreign capital -- $31.3 billion was lost to our Canadian economy in 1981.

Some simple projections underscore these figures and put them into graphic relief. Between now and the end of the decade, $279 billion in 1981 dollars will be lost to the Canadian economy. This projection does not account for any growth in our deficit or even for the effects of inflation.

The outflow of $279 billion is directly attributable to foreign ownership and foreign investment. That loss is the equivalent of 107 companies the size of General Motors, which in 1981 had Canadian assets of $2.6 billion. That amount of money will leave the country between now and the end of the decade. Expressed in more personal terms, that loss represents $26,571 for every working man and woman in Canada over the next nine years; in other words, one year's family income for 10.5 million people will leave the country.

Given these consequences, how can the Ontario government continue to justify and advocate an economic policy that encourages more foreign capital, more foreign control and even more foreign investment?

When we have such statistics and so convincing an argument as that, which make it quite obvious to anyone who cares to look at the economic plight we face in Canada and Ontario today, one has to wonder why this government, aided and abetted by its federal counterparts, is playing around with a six and five per cent restriction or a nine and five per cent restriction over the next two years.

I do not believe the people in Ottawa are malicious, nor do I believe the people over there are deliberately malicious, but one has to wonder what the thinking processes are of people who devise policies like this, which merely tinker around and do nothing more than create an illusion that something substantial is being done to reduce unemployment, to bring down interest rates, to bring down the rate of inflation and, I suppose more important than anything, to make us masters in our own house.

9:40 p.m.

One has to wonder what the high-priced people do for the money we pay them, whether it be Governor Bouey of the Bank of Canada or the literally hundreds of financial experts up in Ottawa. One has to wonder what the people in the Frost Building do to convince the Treasurer that he should come in with this kind of a policy simply to create the illusion that if we tinker in the way that is envisaged by Bill 179, something worthwhile, something useful and something productive will come out of it.

I am not convinced this action will create even one job. It might save a few jobs, as has been alleged by certain people. That is, if we sort of share the existing pot, it might mean we will not have to lay off as many people in this 500,000-worker group. If anything, that is all it will do.

I did not hear anything by way of justification, and I listened very carefully to the Premier and the Treasurer as well as to the Minister of Consumer and Commercial Relations (Mr. Elgie), the minister charged with bringing in what is very loosely called a restraint initiative, a restraint package, without defining anything by way of specifics.

If we in this party are sceptical, and if I personally am very sceptical and a little jaundiced, I want to give a few specific reasons why I think we have cause to be that way. I did not agree with very much that my friend the member for St. Catharines (Mr. Bradley) said, but some of the things he said made some sense. The position he is taking with regard to this bill makes no sense, but some of the things he said in addressing himself to the bill, I will confess, did make some sense.

He referred to the ad valorem retail sales tax on gasoline. Members know the dialogue we entered into during second reading earlier this year on a bill to amend the Retail Sales Tax Act and on another bill to amend the Gasoline Tax Act. At that time, we spoke of the effect that kind of regressive, invidious sales tax would have on people who pay a much higher base price for such an essential commodity as gasoline.

I see the Minister of Revenue (Mr. Ashe) is over there talking to his colleague, and I am sure what he is saying is extremely important, but at that time he assured all of us, particularly me coming from northern Ontario, that the 20 per cent ad valorem tax on gasoline would not be applied specifically to the base rate for that commodity in northern Ontario but would be applied on the basis of an average.

I do not distrust the Minister of Revenue, but I want to know from him why, in this day of our Lord 1982, when I pick up a paper from Kitchener I see that there is a gas war there, and when I pick up papers from many parts of the province there seems to be a gas war on and the price ranges anywhere from 38 cents a litre to 42 or 44 cents a litre.

I want to report to the Minister of Revenue that, since he gave me his assurance that the ad valorem gas tax would be applied in a very fair and equitable way across the province, we along the north shore of Lake Superior are now paying 48 cents per litre, or 45 cents per gallon more --

The Acting Speaker: With special respect, I remind the honourable member that we are on Bill 179.

Mr. Stokes: That is right. You need not remind me, Mr. Speaker, because I am talking about the effect of this bill on people who have to live in northern Ontario under the policies created by this government. If that is not relevance, I do not know what is.

Hon. Mr. Ashe: On a point of personal privilege, Mr. Speaker: I think my name was referred to in a specific item, and I think it only fair to have the record state right away that the assurance I gave to the member for Nipigon last year is exactly what applies.

On the example he just gave, I can assure him here and now that the ad valorem gas rate -- in other words, the tax that accrues to the province -- is exactly the same on the litre of gas that he says is retailing at 48 cents in northern Ontario, and I do not disagree with him, as on the litre of gas I saw for sale tonight in downtown Toronto at 35.4 cents.

The ad valorem rate is identical on both those litres of gas, exactly as I assured the honourable member last year. It is based on a median price in a relatively short range of Metropolitan Toronto, where the market is traditionally most competitive.

The Acting Speaker: Thank you. We are dealing with Bill 179.

Mr. Stokes: I am glad for the intervention of the Minister of Revenue, because it highlights the inefficiency in the free-market system. The free-market system that applies to everybody across the province, and particularly to the 500,000 people who are being adversely affected by this bill, affects to a much greater extent the people living in northern Ontario, who pay 48 cents a litre for the same product that, my friend just reminded me, at least one retail outlet in downtown Toronto sells for 35.4 cents per litre. Now, multiply that by 4.4.

Hon. Mr. Ashe: By 4.56.

Mr. Stokes: There are 4.56 litres in a gallon. I thank the minister very much.

The provisions of this bill have the same effect on a percentage basis right across the province. I want to remind everybody on the opposite side of the House, but particularly the member for Cochrane North (Mr. Piché) and the member for Sudbury (Mr. Gordon), that whenever one applies an impost, a tax, a duty, whatever it is, across the board, it works a greater hardship on somebody who is paying more for that product or service to begin with, whether it is gasoline, which I used as an example, or fuel oil.

9:50 p.m.

I do not have the exact quote, but I do know it has gone up by almost 100 per cent in less than three years in areas of the province where we do not have the option of natural gas, which they are going to keep to 85 per cent of the cost of oil.

That is an option that is not open to residents in northern Ontario except along the Highway 11 corridor.

Mr. Speaker, you asked me to be relevant. I want you to hesitate and think. I do not expect you to answer, I know you cannot, but I want you to tell me by way of a nod whether I am being relevant when I talk about these discrepancies and the injustices of imposing a six and five per cent wage increase over the next two years right across the province regardless of the circumstances.

I want to get into another aspect of the injustices that are being wreaked on the people of northern Ontario by this approach. The Treasurer has said anybody who collects money by way of a fee, royalty or licence in the province will be restricted to six per cent this year and five per cent next year. That goes for everybody who does business with or on behalf of the government.

I want to refer to an impost that was imposed not too many months ago. It is not being treated in the same way that the wages of people who are affected by this bill will be. If a driver of a four-cylinder car is hoping the five per cent provincial restraint program is going to save one from a hike of 60 per cent in licence plate renewal next year, he should not count on it.

"'All the Ministry of Transportation and Communications is promising at this time,' said a spokesman, 'is that the increase may be reviewed by the committee headed by the Minister of Consumer and Commercial Relations.' Next year a universal fee of $48 comes into effect for all cars regardless of horsepower or number of cylinders.

"At present, fees are $30 for four-cylinder cars, $45 for six and $60 or $80 for eight cylinders depending on the power. Under the new fee system, the six-cylinder driver gets a 6.3 per cent increase, while the driver of the bigger car gets a reduction of at least 20 per cent.

"Northern Ontario drivers are getting a 140 per cent boost, but they will still be paying a lot less than those in the south. Their fees go from $10 to $24. Northern Ontario is designated roughly as being north of the French River. The ministry says it came up with the $48 and $24 fee because it needed numbers divisible by 12 so the new method of licensing and birth dates could be inaugurated."

Do the members know that, for years and years in this assembly, the reason they maintained the differential in the cost of registration and licence plates between northern and southern Ontario was to compensate for the high cost of gasoline in the north? It partially compensated for it. But now the government is taking that away from us and is adding insult to injury by imposing a 60 per cent increase, something the Treasurer and the Premier both assured us would never happen; and it is done with a straight face and without even considering the impact it will have on people who live north of the French River. It was a small advantage that was given us for very legitimate reasons. The government is taking it away from us, and we do not like that.

I want to get into the subject of hydro rates. Perhaps my friend the member for Sudbury will show some interest in this. I understand that he took the time and trouble to make the effort, either personally or in writing, to express his displeasure to the Ontario Energy Board over an application by Ontario Hydro before that board to rearrange the method of charging its customers throughout Ontario.

For purposes of my argument in my particular case, it is a question of changing the rate for the time of year that the power is used and for the amount that is used. It is called a seasonal differential in the price of power supplied by Ontario Hydro. I spoke to Hugh Macaulay and several of his colleagues at the glass palace here, and I know that the member for Sudbury took strenuous objection to the fact that this change was going to have an impact on users of Ontario Hydro in northern Ontario. The amount involved is not large, but there would be a definite impact.

I do not think I have to tell you, Mr. Speaker, or the Treasurer or anybody in Ontario Hydro, because everybody knows it: If one has to rely on electric energy for heat, hot water and all the many useful things we do with hydro power, and the rules of the game are changed to reflect time of use and to increase the rate in the winter months, because ostensibly it costs more to produce it, then the users are going to pay more.

When Sir Adam Beck founded Ontario Hydro many years ago, he did it on the basis that it was to be power at cost. I remember very well when I was a member of the Ontario Municipal Electric Association as a local commissioner in the Thunder Bay district, I was charged with the responsibility of heading up a load building committee on the grounds that the more power one used, the cheaper it was. That was very fashionable with anybody who worried about such things, until a very few years ago when they scrapped all that and said, "Conservation is the name of the game." How quickly they shifted gears.

10 p.m.

But for purposes of rearranging the rate that Ontario Hydro charges its customers, who is getting it in the neck again? The people in northern Ontario are, the same people on whom they are imposing this six and five per cent wage freeze. There are many of them among the 500,000. Whether they be teachers, hospital workers, employees of the Ministry of Natural Resources or of the Ministry of Transportation and Communications, these are the people the government is hurting in so many ways, in some instances small.

But the collective effect of all these things works an unfair hardship on people living north of the French River, who pay more for cars, gasoline, home heating oil and electric energy, and, on top of it, pay a seven per cent sales tax on an even wider range of products and services as a result of the expansion of the retail sales tax in the Treasurer's last budget.

Why did he do that? We all know this government has the wit to sell a case of beer at the same price right across the province regardless of what it costs to get it up north. Similarly, a bottle of liquor is uniformly priced right across Ontario. But what does it do when it comes to an essential commodity? These are the kinds of things the government does without thinking and without sitting down to analyse the consequences which get so many of the people I represent riled up.

We talk about restraint and the things governments can do to lower the deficit, with the hope of bringing down interest rates and inflation and making Ontario a better place to live. I could go on at great length, giving many instances of where money has been wasted, literally thrown away. It is not because the government over there is malicious. It is not because it has some nefarious scheme to throw away the taxpayer's money. But it does happen.

If there were one penny the government could save to reduce the deficit by introducing a bill such as Bill 179, I might be persuaded that at least it was a very slow and halting step in the right direction. But I want to tell the Treasurer that I am not persuaded that this bill is going to change anything, that it will improve his deficit position, create employment, reduce the rate of inflation or bring down interest rates one single solitary jot.

By way of illustration, and since I am lumping what is going on here with what is going on in Ottawa, I want to give two instances of waste.

First, I want to quote from a column by Frank Howard in the Ottawa Citizen on September 27:

"Ed Clark, on sabbatical leave with his family in Paris, seems surprised and hurt by all the reaction that his year off has caused back home.' That is, in Canada.

"Last Thursday, Clark, assistant deputy minister of the energy sector at Energy, Mines and Resources, was finally reached by telephone at his new home in the French capital by the head of the Citizen's national bureau. He told national editor lain Hunter that he was baffled by all the ballyhoo and that he hoped the publicity would not spoil the prospects of other senior mandarins seeking similar relief from the pressures of Ottawa.

"It's hard to say what role the publicity surrounding his expensive sabbatical has played in putting the lid on other bureaucrats' sabbaticals, but it seems that there will in fact be restrictions on this sort of thing for the immediate future, if we are to believe press reports of a letter sent by Treasury Board president Don Johnston to departments and agencies. That letter, we are told, bans sabbaticals and costly overseas language training as part of the government's restraint program.

"As for the 'ballyhoo,' not to mention outrage, surrounding the Clark expedition, I think I can suggest a few explanations.

"First of all, there is the size of the expenditure. It looks, on the basis of the unofficial budget I had obtained, that the year was originally conceived as something that might last 15 months and cost more than $200,000. It is now clear from both Clark's tenant in the Glebe and his own assurance, that he will be back next August, 12 months after his departure. That leaves us with an estimate of about $172,000, which includes his $76,000 salary (at the time the budget was drawn up), a $35,000 moving allowance, a $13,000 overseas allowance, a $20,000 housing allowance, a $20,000 education allowance for him and his family and various other amounts for travel and research too small to mention."

One has to wonder just how serious the federal government is about coming to grips with this deficit, which is estimated to run anywhere from $22 billion to $26.5 billion, when this nonsense is allowed to go on.

I am going to cite another abuse. I am going to quote Davidson Dunton of the Institute of Canadian Studies at Carleton University in Ottawa. The very nature of this example will come pretty close to home over there. Let me try it.

"NEP Ads an Insult to Citizens" is the headline of this article. It says: "A full-page advertisement published recently in a number of newspapers by the federal government proclaims that complete energy security for Canada is two inches away as measured between someone's forefinger and thumb. The text shouts that the national energy program is working, that the bringing of oil sufficiency is exactly what is happening."

To quote Mr. Dunton, the author of the article: "That is at best an opinion and only an opinion. Many familiar with the oil business disagree and many who study Canada's economic problems believe that the NEP has contributed seriously to our balance of payments problems and hence our high interest rates."

10:10 p.m.

Hon. Mr. Norton: Is that the NDP?

Mr. Stokes: The NEP, the national energy program.

"But the real issue for our parliamentary democracy is not whether the opinion being promoted is right or not. What is fundamentally wrong is that a government is spending taxpayers' money to push one side in a major public debate. Such advertising is an insult to citizens who can make up their own minds on national questions. It is a blow in the stomach to some taxpayers to see their contributions being used to promote views with which they disagree. It is unfair to political opponents of the government and it is a blatant waste of public funds by a government that is crying for restraint. It may be proper for a government at times to advertise to inform citizens about programs in which they may wish to participate. It is misappropriation when a government uses public funds to trumpet that its policies are just great.

"Signed, Davidson Dunton, Institute of Canadian Studies, Carleton University, Ottawa."

In my absence, when I was hosting the Lieutenant Governor in the riding of Lake Nipigon, I know my friend the member for St. Catharines and other members, including the member for Port Arthur (Mr. Foulds), talked about a $40-million budget, estimated to be the amount this government spends on advertising each year.

Hon. Mr. Norton: Now that is a rough estimate.

Mr. Stokes: It is rough.

Hon. Mr. Norton: Not on advertising.

Mr. Stokes: The minister has reminded me of a quote somebody gave me just before I started to speak.

Hon. Mr. Norton: If it came from Scarborough West, don't use it. It will get you into trouble.

Mr. Boudria: Maybe it came from Kingston.

The Acting Speaker: Order.

Mr. Stokes: The minister said that was a rough estimate.

Hon. Mr. Norton: Very rough.

Mr. Stokes: This bill is --

The Acting Speaker: Bill 179.

Mr. Stokes: Yes, Bill 179. Had you been listening, Mr. Speaker, you would have known I was right on Bill 179.

This bill is not even rough justice; it is just roughness, that is all. It is something that is just a little bit below what I would expect of my friends --

Hon. Mr. Norton: Do you think it should be higher?

Mr. Stokes: No. What I am saying is that if the government is really trying to attack the structural problems in our economy -- and I do not absolve the federal government; it would be much easier if we were able to do it on a national basis, but obviously that is not to be -- there are so many innovative and imaginative ways this government could use the $22 billion plus we spend every year on at least making a tentative, a halting, a first tiny step towards an economic recovery for people in this province. It does not have to use the heavy jackboot on the 500,000 people who rely on the Treasury of this province to fund the worthwhile jobs that they do in so many ways, whether it be those in the Ministry of Natural Resources or the Ministry of Transportation and Communications, or whether it be hospital workers or teachers.

Mr. Speaker, you and I know the excellent work these people do on our behalf. I think it is beneath this government to trot in a bill like Bill 179 to try to create the illusion that it will do something positive to fight inflation. What it is doing is to oppress those who are the least capable of coping with high inflation and high interest rates, some of whom are struggling to keep or to find employment. To suggest that this bill is going to change things in any material or fundamental way is in my estimation close to hypocrisy, close to a fraud being perpetrated on the eight and a half million people in Ontario, particularly the 500,000 people the government is stepping on in an unconscionable way under this act.

My whip has told me that my time is up. I want to say that my displeasure with this bill is great and that I oppose it.

Mr. Haggerty: Thank you, Mr. Speaker, for providing me with the opportunity to address 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.

I have some strong reservations as to whether I should be supporting the bill. I find, like many other members, that the bill does not go far enough and does provide areas of inequity. The government has certainly singled out one particular sector to which to apply the restraint program, and that is the public service employees of the government of Ontario, the public service in municipalities and other government agencies. For some unknown reason, this particular group of individuals has been singled out for application of a restraint program.

I was not going to enter the debate but I was provoked by the letter I received from the chairman and chief executive office of the Royal Bank of Canada, dated September 19, 1982. The heading reads, "Canadian Confidence: A Long Night's Journey into the Day." I suppose we can be thankful as members stand up today and say that we have seen some daylight in the past two or three days because the interest rates in the United States have finally come down. We can be thankful, I guess, that this is an election year in America or we would never have seen that daylight.

I am looking at the comments I will be quoting from this letter. It mentions a huge deficit which leaves little room for interest rates to come down to where they should be; that is the huge government deficits both federally and provincially. It goes on to state the areas causing inflation and its relation to unemployment.

It says: "Although the national concern, as mirrored in opinion polls, has shifted through the last few months and unemployment is now the number one worry of Canadians, we should make no mistake. Unemployment is not the number one problem; neither is the exchange rate nor government deficit nor interest rates nor falling profits nor corporate liquidity nor the demise of the long-term bond market, nor investment speculation." It says the major part of every one of those and of dozens of others is rooted in just one cause: inflation. But it does not go on to say what causes inflation, and perhaps that is the area in which I want to make my comments.

10:20 p.m.

Following along the banking --

Mr. Epp: The bank profits.

Mr. Haggerty: The bank profits, as my colleague says; that is a matter that I suppose is of concern to all of us. I was a member when controls were applied in 1975. It was interesting to see the areas where the government programs were attacking inflation. I can tie this in with the comments of the bank message that was provided to the chamber of commerce. This is from the guidelines established in 1975, The Attack on Inflation: A Program of National Action, a policy statement tabled in the House of Commons by the Honourable Donald S. MacDonald, Minister of Finance, in 1975.

It says: "The program that the government is setting in motion has four main elements: fiscal and monetary policies aimed at increasing total demand and production at a rate consistent with declining inflation; a government expenditure policy aimed at limiting the growth of public expenditures at the rate of increase in public service employment; structural policies" -- and we heard the previous speaker talk about this -- "that deal with the special problems of energy, food and housing, ensure a more efficient and competitive economy, and improve labour-management relations; and prices and incomes policies which establish guidelines for responsible social behaviour in determining prices and incomes of groups, together with machinery for administering these guidelines and ensuring compliance when necessary."

Look at these guidelines established back in 1975. There were some good measures that came out of the Anti-Inflation Board guidelines. One was to control bank profits and another was in the area of automobile insurance. I can recall, I think, two different occasions in 1976 and 1977 when I did get a rebate from my automobile insurance premiums. It was given in the form of a rebate. I might say that was State Farm. Perhaps other companies did not come through with that, but there were huge profits made there.

Other areas that were controlled were of benefit to all of us. I think of areas my colleague the member for Welland-Thorold (Mr. Swart) often talks about, controlling the economy and perhaps bringing in more regulation and so forth. I think we should be thankful that we do have some regulatory bodies such as the Ontario Energy Board. Regardless of whether we may believe in the system or not, it does serve a purpose. If Consumers' Gas wants to increase the price of natural gas to homes and so forth, it has to justify that price increase.

The same thing applies to the Canadian Radio-television and Telecommunications Commission, which has to review increase proposals put forward by Bell Canada. There is a body there that says Bell has to justify that price increase. The same thing applies to Ontario Hydro when it applies for increased fees for higher consumer costs in relation to monthly bills and that.

Mr. Conway: Get Morley Rosenberg down there in Fort Erie.

Mr. Haggerty: Yes. What a way to think about it.

They have to justify that cost. We do have some government agencies there that have to justify cost increases and perhaps there should be other areas where we can apply the restraint program to justify price increases and so forth. I think the Milk Commission of Ontario is another one that kind of sets the price for milk that is given to the producers in Ontario. It has to be approved by the milk commission and it is approved by the Ontario Milk Marketing Board. So there are safety valves in the system.

But when one looks at the monetary policies that were established in 1975, this is the central task of the fiscal and monetary policy. The government has repeatedly emphasized its rejection of the use of severe monetary and fiscal restraints to stop inflation at a heavy immediate cost in terms of unemployment and forgone output. Lowering the rate of inflation and reducing the level of unemployment must go hand in hand.

I think we have to agree with that, but if we look at the past experience with wage and price controls, we will find out from graphs for 1975, 1976 and 1977 that unemployment increased during the restraint period, 1975-77, while inflation still continued to climb. I can see the same results now. There is little concern about the unemployed persons in Ontario. In fact, sometimes I have to hesitate in the mornings before turning on the radio to find out what is happening in the Niagara Peninsula because every time I turn on the radio it means another announcement of another layoff. My colleague the member for St. Catharines (Mr. Bradley) will bear out the fact that General Motors announced this morning that there would be 750 more persons unemployed.

I suggest that the government has not taken a clear look at the guidelines it wants to put forward which are going to bring in some restraint programs. It is interesting that the budget policy laid down in 1975 did not include monetary policies related to banks. It had very little control over them. That was perhaps the beginning of the increase in the interest rates. It raises a question in my mind, and perhaps in the minds of other concerned citizens as well, about whether the money-changers are responsible for the high inflation we see before us at present.

It is interesting to note, in looking at the banking industry in Canada, that the money market and money market dealers operate within the broader context of the capital market in which short-term capital is raised and invested and in which short-term securities, such as Treasury bills, commercial papers, certificates, securities, guaranteed investments, all came into being in 1953 to assist the Bank of Canada to carry out its responsibility for monetary policy and to increase the opportunities for investment of short-term funds in the economy, the principal participants in the money market are the federal, provincial and municipal governments, the chartered banks, the Bank of Canada and major corporations and nonprofit organizations. The market is operated through a telephone network organized by 15 investment dealers known as the money market dealers. They qualify for day-to-day loans from the banks and, if needed, short-term credit from the Bank of Canada. This body forms the heart of the money market here in Canada.

Controls exist under the Bank Act, through the Bank of Canada and under the regulations of the Bank Act itself. By the closeness of the monopoly within the money market dealers and a manipulation of the market on a day-to-day basis, it can control the value of the Canadian dollar. The money market's most important function is to provide a link between the Bank of Canada and Canada's major financial institutions, such as the chartered banks, trust companies and insurance companies in the capital market and a selected few to direct Canada's economic needs. For the Bank of Canada, the market is an instrument to put monetary policies into effect.

I mentioned the Canadian economy in 1975 when we certainly did have some measures of controlling the economy. It was the bank lending cash to the chartered banks which permitted those institutions to lend money for the speculative trading in securities. It is noted that Canadians save more in the banks than any other national group and those accumulated savings provide a huge fund of capital for the money market for speculation.

I can perhaps get into the area later on of the matter about the Dome oil deal.

On motion by Mr. Haggerty, the debate was adjourned.

The House adjourned at 10:30 p.m.