INFLATION RESTRAINT ACT (CONTINUED)

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The House resumed at 8 p.m.

House in committee of the whole.

INFLATION RESTRAINT ACT (CONTINUED)

Resuming consideration 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.

On section 1:

Mr. Chairman: It is my understanding that the member for Ottawa Centre (Mr. Cassidy) had the floor just before the dinner hour. At this time the chair is ready for any other contributors.

To refresh your memory, we are dealing with clause 1(a) and an amendment moved by the member for York South (Mr. Rae) that clause 1(a) be struck out and replaced by: "(a) 'Commission' means the Fair Prices Commission."

Mr. Swart: Mr. Chairman, I will endeavour to stick right to the amendment we have before us. I have to say, though, that I am rather surprised that none of the members on the opposite side of the House has risen to defend this section of the bill or, for that matter, the bill itself. It seems to me that if the bill were all the government says it is and if they had an Inflation Restraint Board they liked, the people on that side of the House would be anxious to rise and speak against this amendment.

But in view of the fact that they feel it is indefensible, then I am sure that when this amendment comes to a vote, those people will be voting with us. Obviously, if they are not prepared to defend what they have, they will support the alternative we have put before them.

I suppose clause 1(a) of this bill, which is the definition of the Inflation Restraint Board, sets the tone for the whole bill. It says what we are attempting to do. It says in its title the purpose of the board: it is an Inflation Restraint Board.

I want to say, particularly to those on the other side of the House, that we really do not want to be part of the deception this title implies, and this is the reason we want to change it. We know, and I suggest that the Conservative members of this Legislature know too, that this bill is not an inflation resiraint bill and that the board is not an Inflation Restraint Board.

What that board really is, as set out in the bill, is a board that is going to restrain the wages of the public sector, and to call it an Inflation Restraint Board is deceptive. That is one of the reasons we want to change the name from the Inflation Restraint Board.

We want to change the name to what we think should be in the bill, and what should be the purpose of the bill if we are really about to fight inflation; that is, a fair prices commission. That is the purpose of our amendment. It sets the tone.

Our whole intent in this bill is to strengthen its price restraint section. It is now nonexistent, and I am not sure whether we can strengthen something that is nonexistent, but at least if we cannot put flesh on the bones, we will put the bones in and then build the flesh around it.

If we have our way, we will establish a fair prices commission, which will have authority and which will be required by this bill to prevent unjustified and excessive price increases. All the other members of this House, regardless of which side of it they are on, will understand that it is necessary to tell them what we intend to do and why we intend to do it, so that they can determine the desirability of changing the name.

The whole purpose of this bill is to control inflation, according to the government and to Speaker after Speaker on the opposite side when the bill was introduced, from the Treasurer (Mr. F. S. Miller) to the Minister of Consumer and Commercial Relations (Mr. Elgie) and several others.

I have here the remarks the Minister of Consumer and Commercial Relations made when this bill was presented in the House. He spoke the next day on this very important bill, the Minister of Consumer and Commercial Affairs who is named in the bill to have the whole responsibility for it.

He spoke for nine minutes, and not once during his speech did he say what the price control section of the bill would do, what he felt could be accomplished under that or what he felt his duties would be as the minister charged with the responsibility of protecting the consumer. Let me read a few sections of what he said. He spoke about the need to control inflation, and I would like to put this on the record. This is from Hansard, dated September 23, 1982, at page 3671. He said:

"But as I see it, the key issue facing governments today in this country is inflation. From it flow high interest rates; from it flow mortage failures; from it flow bankruptcies; from it flows currency instability."

He went on to say, at page 3672:

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

I am still quoting from what the Minister of Consumer and Commercial Relations said in this House with regard to this bill. He said:

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

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

What he is saying, of course, is that high interest rates are not doing the job.

8:10 p.m.

"Therefore, as people who have to try and solve these public policy issues, we must look to the only third alternative we have, and that is an incomes policy, a policy which endeavours to have an incomes and prices control program to limit the upward income demands of people and the upward prices we are paying for products."

Finally, he says:

"That is the reason this bill is here today. It is to address the issue of inflation and the things that flow from it."

That is the end of the quote from the Minister of Consumer and Commercial Relations. There is no question that for that minister and for the Treasurer the reason we have this bill before us is to fight inflation.

I think we should recognize exactly what inflation is. The conventional interpretation and definition of inflation, which I learned during the war years and since, is too much money chasing too few goods. That is the conventional definition of inflation. When there is too much money around and there are too few goods, it drives up the prices of the products and services, and we have what is called inflation.

Everyone in this House knows that is not the situation today, nor is that the interpretation of inflation today. There is no such thing as too much money chasing too few goods. We do not have enough money to buy the goods we can produce, whether those goods are cars, Houses, television sets, clothing or whatever the case may be. We do not have enough money to buy them; that is the real problem in our society.

There is not too much money chasing too few goods. What we are really talking about when we talk about inflation is price escalation. That is what we mean. We mean the consumer price index. If we are talking about 12 per cent inflation last year, what we really mean is the price of goods and services went up by 12 per cent last year. I do not think there is any disagreement on that in this House. I think everyone here will agree with me. But it is important to remember that is what we are dealing with and what the government itself says we are dealing with: price escalation.

If we are talking about controlling inflation, we are really talking about controlling the price of goods and services. Even on the face of it, it must seem rather silly that when the objective is to control the price of goods and services, we say we are going to control, limit and reduce contracts -- and tear them up if necessary -- to reduce wages in the public sector. It seems a little silly even on the surface of it. If one goes into it in depth, it is even a little more foolish.

We say decisively that this bill does not restrain such prices. We want to amend it to accomplish that, and that is the reason we want to change the name. We want to say what it is, a fair prices commission. We want to make it a bill that is going to ensure there will be no unjustified price increases in our society, particularly at this time of economic difficulties for so many people.

The price section of this bill before us has three parts. It has the part that deals with administered prices. It has proposals laid out as government policy, which are not even in the bill, to limit fees. Licences and prices charged by the ministry. Then the third section is to monitor all other prices.

Mr. Chairman, as I look around I do not think we have a quorum in the House. I want to draw that to your attention.

Mr. Chairman ordered the bells to be rung.

8:19 p.m.

Mr. Chairman: A quorum is present. We will revert to Bill 179. The member for Welland-Thorold is speaking, I might remind him, to the amendment.

Mr. Swart: I think you will agree, Mr. Chairman, that I have been speaking strictly to the amendment in the comments that I have made. I do have to say, though, I am a bit puzzled that on a bill as important as this, to which members of the ministry have given priority all fall, they are not here to pay attention to what is going on and to defend their position.

When I hear the member for Windsor-Sandwich (Mr. Wrye) saying that this is a lot of nonsense, I have to say to him that he and the Liberal Party may think this is nonsense, but when there are 500,000 people in this province who are going to have their wages cut or have a limit put on their wages, it is not nonsense to us here in this party.

I was talking about the inadequacy of the provisions of this bill with regard to any control over prices which consumers have to pay for goods and services. I pointed out that section 3 of this bill, which deals with the matter of prices, is very restricted and deals with only a small area of price control.

The first area it deals with is that of administered prices, and it talks about the need to control those. I want to point out that the records show --

Mr. Cooke: Are you writing some more Tory motions, Bill?

Mr. Swart: The member for Windsor-Sandwich does not look particularly happy. I can understand if he is in the Liberal Party on this bill why he is not particularly happy.

The statistics show that the administered prices do need particular attention, and that attention is not given by the clauses in this bill. I think all of us were rather surprised this fall when a report came out, based on Statistics Canada figures, that showed in the year from June to June there had been a 17.7 per cent increase in administered prices in this nation for services such as those provided by Bell Telephone, Consumers' Gas and Ontario Hydro. There had been a 17.7 per cent increase in one year, even though inflation generally had risen by approximately 11 per cent last year as measured by the consumer price index. Those administered prices had gone up by 17.7 per cent.

It is rather interesting that the Financial Times of Canada had an article on this dated August 16, 1982, from which I would like to quote. It states:

"Three months ago, when the six per cent solution was but a gleam in the federal government's eye, Supply and Services Minister Jean-Jacques Blais, also minister responsible for Statistics Canada, quietly distributed to his colleagues the document that sent shock waves through the cabinet, entitled simply 'Analytical Note: Regulated Prices.' A short but devastating piece of unpublished research by Statscan revealed that governments, through the prices they administer, are the main culprits keeping the rate of inflation high in Canada.

"After a great deal of debate, the cabinet's response, delivered as a core part of the June 28 'six per cent world' budget, was to vow to take aim at federally administered prices; things like telephone rates, postal rates and air fares.

"The paper that caused the politicians so much consternation has not been published. However, a copy obtained by the Times shows that the politicians had good reason to be shocked by what they saw.

"According to the document, prices regulated by governments ranging from urban bus fares to property taxes are galloping far ahead of unregulated or so-called market prices. Between April 1981 and April of this year, the study shows regulated prices leapt by 17.7 per cent compared to 9.1 per cent for unregulated prices. Over the same period, the consumer price index, which combines both elements by a complex weighting system, grew by 11.3 per cent.

"While consumer prices for such things as cars, clothes and furniture have been easing, the study shows that government-administered prices for such items as energy, telephone rates and public transportation" -- and I point out that two of those three items come under this provincial government -- "have accounted for much of the inflation impetus."

I could go on and read the whole article, but I will not take the time of this House to do that. It further amplifies those statements.

We have services and products controlled by governments, federal and provincial, that have been saying they want to do something about inflation and that federally instituted a six per cent and a five per cent wage freeze and provincially implemented a nine per cent and five per cent freeze. Yet those same governments that have control over very important services and products to supply to the people of this province and this nation have allowed them to increase by 17.7 per cent in one year.

Does that not show a great concern for the consumers by the government?

Mr. Jones: What time period does that deal with, Mel?

Mr. Swart: If my friend had been listening, he would have heard that between April 1981 and April 1982 there was a 17.7 per cent increase. What I want to point out is that this bill we have before us, Bill 179, will not make any change in that whatsoever; it will not make the slightest change in that. Under this bill, companies such as Consumers' Gas are automatically able to pass through all their additional costs. They are able to pass through the equivalent of wage increases of five per cent. They are able to pass through a profit increase the equivalent of five per cent and tack this on to the prices.

That sounds as though there are some limits to it. It sounds as though maybe there is going to be some control on it. But the facts are that if a minister finds out this is happening, the minister, according to this bill, may refer it to the Inflation Restraint Board, this board will then report back to him and he in turn will report to the Lieutenant Governor in Council or the cabinet. That is the procedure. The final decision on these price increases is going to be made by the cabinet.

I really do not object to that. In any parliamentary democracy. The government has the final responsibility. But if the people of this province are interested in having price controls in these areas, they will not be looking for that government to provide them.

I want to cite the example of what happened to natural gas prices last February. The Consumers' Gas --

Mr. Chairman: This ties in with the amendment, does it?

Mr. Swart: Yes, it does, Mr. Chairman. I understand, and I have to agree with you, that we have to keep to the amendment. But you will recognize that what I am trying to show here is that the present section 3, which deals with prices, is not an effective form of price control. We want to replace it with an effective fair prices commission and because we do, we want to change the name at the beginning.

I am sure you will understand that if we are going to change the name to fair prices commission, it should be based on the substance of what we are going to do, which is to make a real fair prices commission. I am sure you will accept and understand that explanation.

8:30 p.m.

Mr. Chairman: Hurry up with your example.

Mr. Swart: Mr. Chairman, this is a very important issue that we have before us. I will deal with it as speedily as I can but there is a lot that needs to be said on this bill and on this issue of a fair prices commission.

To show what would happen under the present bill with the Inflation Restraint Board, I must draw the example of what happened last February with regard to Consumers' Gas pricing. There was an application by Consumers' Gas, a year ago last summer, to increase prices by about 35 per cent. A decision was made by the Ontario Energy Board last February which increased those prices by 32 per cent. Granted, there was a pass-through of wholesale prices of gas in that; I do not deny there was a substantial pass-through.

But, in that year, Consumers' Gas asked for a markup of about 65 per cent on the pass-through, although in previous years they got about 20 per cent. They asked for 65 per cent and were awarded a markup of 60 per cent on the pass-through of the wholesale prices. That meant an increase to consumers of 32 per cent in the amount they would be paying on their gas bills in Feburary 1982 compared to what they paid in February 1981. I suggest that is pretty serious, particularly when we are talking about restraint.

We in this party officially appealed that decision to the cabinet, as provided under the Ontario Energy Act. We submitted a petition, in March, within the 28-day period allowed for making an appeal. April went by and May, June, July and August went by and the House was to be called back on September 21. But on September 16, the Lieutenant Governor in Council issued an order upholding the 32 per cent increase even though by that time it had been shown that it would give Consumers' Gas an increased profit of 35 per cent in their fiscal year ending October 1.

Mr. Chairman: Can you tie this in to the board?

Mr. Swart: I will tie this in to the bill, if you want me to. In this bill we have a clause to control administered prices which, in the first instance, does not set any limits on the total price which can be charged, and second, leaves the final decision up to the cabinet. We say that is not good enough. If you are sincere about fighting inflation and holding down the price level in our society then you have to deal with issues like that.

Mr. Cooke: They are not, though. All they care about is controlling wages.

Mr. Swart: Of course, it is not their intent to control prices, that is evident. Why would the government make that decision five days before the restraint bill was brought in? Because it would look bad if they had made it after the restraint bill was brought in. We know that. That is why it was done when it was done: to clear the air so that Consumers' Gas could get all of it and would not have to answer for it anywhere. It was handed to them on a platter.

That is why we want a fair prices commission in this bill. We intend to change that section so that it will be an effective mechanism for controlling prices. That is why we want the name change.

The parts on price control are combined in sections 26 and 27. Subsection 27(1) says, "The minister shall establish economic criteria by which price increases shall be reviewed." Of course, "price increase" means a proposed increase in an administered price. We know there are two sections to that administered price. The first is the one I have already talked about, and the second is a user fee charged by a public agency.

So all the government departments, according to this bill, will be controlled as to prices. The statement that the Treasurer issued in explanation of this bill when it was tabled in the House was that it is a plan for limiting those prices charged for licence fees, camping permits and those kinds of things; they will be limited to five per cent. Once again, they will be subject to review, of course. This is not a flat ceiling on them. They will be subject to review but they are also subject to exemption.

Of course, we know what has been exempted in this. First, Ontario health insurance plan payments, which last month went up 17.5 per cent. Those were excluded. Of course, those are a main payment. They are far more than all the rest of the government charges put together, and they were exempted. So that section, too, is largely meaningless in this bill.

Surely if you are going to say, as was stated, that there is a five per cent limit on the various fees charged by government ministries, it should apply across the board. But it is very selective. Those that bring in a lot of revenue will be allowed to go up by 17.5 per cent; those, such as camping permits, that do not bring in a lot of revenue and do not cost people a great deal will be left at five per cent.

Unlike the wage section of this bill, which applies to the municipalities, the universities and all the workers and all of these public institutions, the fee limits do not apply. They apply only to those charged by this government itself. So this section of the bill is totally ineffective and all other prices have no control on them whatsoever, as you well know, Mr. Chairman. Section 33 of the bill states it clearly:

"The board" --

Hon. Mr. Gregory: You are on section 1, right?

The Deputy Chairman: Is this respecting the commission?

Mr. R. F. Johnston: This has to do with definition.

Mr. Swart: Yes, I am dealing with the definition.

Mr. Cooke: If you have a point of order, raise it in the appropriate way.

The Deputy Chairman: I will allow the honourable member to continue.

Mr. Swart: I realize, Mr. Chairman, that you --

Hon. Mr. Gregory: What section are you on?

Mr. Cooke: If you have a point of order, stand up.

Hon. Mr. Gregory: What clause are you doing?

Mr. Cooke: Just listen and you might find out.

The Deputy Chairman: Order. The honourable member has the floor and is speaking to clause 1(a).

Hon. Mr. Gregory: On a point of order, Mr. Chairman: Since the member for Windsor-Riverside (Mr. Cooke) suggested that in order to get the point across I have to stand up on a point of order, I wish to point out that the honourable member is not talking about the appropriate clause, and I hope, Mr. Chairman, you will take some action on that.

The Deputy Chairman: I will allow the honourable member to make his point, and if I see he is deviating from the point that is under consideration, then I will ask him to defer it back.

Mr. Swart: Mr. Chairman, I realize that you have just taken over the chair and may not have had the opportunity to hear my explanation originally.

The Deputy Chairman: I do not think you have to repeat it, though.

Mr. Swart: We propose in this bill, first of all, to change the section dealing with prices so that it will be an effective mechanism for controlling the prices of goods and services in this province. Because we intend to do this as we go along, we think it is appropriate at this time that we should change the definition of the Inflation Restraint Board to a fair prices commission and --

The Deputy Chairman: This is the amendment before us under clause 1(a).

Mr. Swart: This is the amendment that is before you. So I think, and I am sure you will agree with me, that we need to persuade the members of this House that we really intend to make a fair prices commission. If we did not intend to do that later on, if we did not feel that the present section 3 dealing with the control of prices was inadequate and needed massive changes, then we would not be changing the definition.

First, we must prove the present section on prices does not give any effective control. Second, we intend to change it so it will. If we are to solve that, then we must change this definition.

But we have to deal with this first, so I suggest I am in order in dealing with the matter of the inadequacy of the legislation we have before us.

I have dealt with the two sections and just very briefly I want to mention section 3.

8:40 p.m.

The Deputy Chairman: We really have to deal with clause 1(a).

Mr. McClellan: Mr. Chairman, on a point of order: It is the second time, sir, that you have started to interrupt my colleague on instructions from the government whip.

The Deputy Chairman: I am not listening to anyone other than my conscience, no.

Mr. McClellan: It is an intolerable practice.

The Deputy Chairman: No, no. Order please.

Mr. McClellan: I would like to --

Interjections.

The Deputy Chairman: I was trying to give you the floor so you would have a chance to make your point, whatever it may be.

Mr. McClellan: My point, sir, is that you, as Chairman of the committee, do not take instructions from the chief government whip. It is the second time since you have come into the chair -- which has been within the past five minutes -- that you have started to interrupt my colleague, who has the floor, after you have been given instructions by the government whip. This is not an acceptable practice. I simply point this out to you, sir.

The Deputy Chairman: Very good. The chair is making every effort to allow every honourable member to speak to this bill as long as it is to clause 1(a) and to the amendment on the floor. The member for Welland-Thorold has the floor and he is speaking to that I am sure.

Mr. Swart: I am sure I am too, Mr. Chairman, so we're on the same wavelength.

I had been making the case that the bill as it stands, even dealing with administered prices is not effective in controlling those prices. In addition to that, it only deals with administered prices, a very limited number of services and products that are sold to consumers and are administered now by the government of this province.

Even if it did something on administered prices, it would do less in this province than most other provinces because we have in this province fewer administered prices. In many provinces, if you had an effective control of administered prices, that would cover quite a wide range of goods and services. But this province has never protected consumers against excessive pricing.

There are numbers of them. Auto insurance is a classic example. In Saskatchewan, Manitoba and British Columbia, and to a degree in Quebec and Alberta, provincial governments have controlled the prices of automobile insurance to the benefit of consumers, one way or another.

In this province we have no control whatsoever. It is not an administered price, therefore it is not dealt with in this inadequate legislation. We want to put in a fair prices commission that would deal with such things as auto insurance, particularly this year when auto insurance rates are increasing so dramatically.

You must know, Mr. Chairman, if you drive an automobile yourself -- I suppose you have a chauffered one, perhaps --

Mr. Breaugh: It is a tricycle.

Mr. Swart: It is a tricycle, is it? Whatever it is, Mr. Chairman, I am sure you are aware from being in this House, if nothing else, that they predicted this year that automobile insurance rates would increase in the neighbourhood of 20 per cent to 26, per cent.

I am sure you have constituents coming to you, as the members over there must have, bringing their bills and saying. "My gosh, look at the increase I got in my automobile insurance rates." You have to say to them, as I have to say to them: "That is tough. I guess all you can do is shop around." The different insurance companies decided this year that because of underwriting losses, not net losses, they are going to substantially increase the insurance rates.

One has to say this government has no control over that. If we had effective legislation to control and administer prices and we had many of these costs under some form of government control and administered prices at the present time, this bill would be somewhat more acceptable.

This is rather interesting. I am glad to see the Minister of Consumer and Commercial Relations in the House at this time. I had raised this issue with him before. He had stated in the House that we in Ontario have the lowest insurance rates in Canada. He stated that two or three times. However, the other day in the estimates committee on the Ministry of Consumer and Commercial Relations, he turned to the superintendent of insurance and said, to answer my question, "Please read out the rates for Mr. Swart in other provinces." So he read them out.

I am sure the minister wished he had never asked him to do so because they showed that, far from Ontario being the lowest, it had either the highest or second highest rates in Canada. In places like Saskatchewan, Manitoba and British Columbia, where they have public auto insurance plans, the rates were substantially lower than here.

Even in that Tory bastion of Alberta, they do something about controlling insurance rates. They have an insurance rating board, Alberta Automobile Insurance Board, out there. Every insurance company must get permission from that board to raise its insurance rates. I talked to the director of that auto insurance rating bureau last month. He tells me they operate that bureau with two and a half people. He tells me it saves the motorists of that province tens of millions of dollars.

Yet here in this province I have tabled private member's bill after private member's bill for an auto insurance rating board. We know the ultimate answer, of course. It is public auto insurance like the New Democratic Party introduced in Manitoba, Saskatchewan and British Columbia. The subsequent governments, whether they have been Liberal, Tory or Social Credit have kept that auto insurance because they know the people would not stand for knocking it out. But we cannot even get the government here to vote to put in an auto insurance rating board.

If this bill goes though in its present form, it will not enact one tittle of control over insurance rates in this province, not one bit of control.

The Acting Chairman (Mr. Hodgson): I remind the member for Welland-Thorold he is speaking to the amendment of the member for York South. Is that what he is supposed to be speaking on? He should get back to the amendment.

Mr. Swart: I am speaking of a fair prices commission. Mr. Chairman, perhaps you should read the amendment.

The Acting Chairman: I have it in front of me, I can read.

Mr. Charlton: On a point of order, Mr. Chairman: This is the third time the member for Welland-Thorold has been interrupted during the course of his remarks. He is speaking on an amendment which was moved by the member for York South. It is not up to the chair or to the chief whip of the government party to determine what the rationale of the member for York South or this party was in moving that amendment.

The Acting Chairman: That is not a point of order. You are out of order. The member for Welland-Thorold.

8:50 p.m.

Mr. Swart: Mr. Chairman, I submit to you, and think you would agree, that I am speaking to the need for a fair prices commission. Our amendment that members have before them changes the Inflation Restraint Board to a fair prices commission. Surely I am in order if I am using arguments to promote a fair prices commission. That is exactly what I am doing.

Interjection.

Mr. Swart: I think if the member had been in the House he would have heard the intervening remarks. I had just shown that the bill we have before us, under administered prices, would do nothing to control auto insurance rates. This is a serious matter. It is difficult to overemphasize the situation we find ourselves in, where we have a government that simply refuses to do anything about prices. This bill is not going to do it.

The Deputy Chairman: Will the honourable member tie this in to the way in which it affects the fair prices commission?

Mr. Swart: Yes. We would include in our fair prices commission control of auto insurance rates. The amendment members have before them is to change the Inflation Restraint Board to the fair prices commission. So members can see the direct connection.

Mr. Cooke: I wonder why we have to repeat these points time and time again.

The Deputy Chairman: The problem I have is that what you are talking about is after this bill is passed as it is, but in fact you are talking about a commission.

Interjections.

Mr. Swart: Another area that would be controlled under our amendment would be milk prices. The other provinces throughout Canada, with only one other exception, have control over the price of milk to consumers. The government of this province controls the price the farmer gets and he has to justify every penny increase he gets. From there on, the dairies and those who retail it can charge what they see fit. This is an area where, if we are going to have a fair prices commission -- in fact, if there is going to be any control on prices -- surely we should be doing what the other provinces in Canada are doing. I have here the figures on the difference between milk prices in Quebec, for instance, and in this province.

Mr. Haggerty: What about the farm price of milk?

Mr. Swart: The member for Erie keeps saying something about the price of milk to the farmers. It is already set by the government, and we are not dealing with that. What we are talking about is the spread between what they get and what the consumer pays.

The Deputy Chairman: Will the honourable member tie that in to the amendment?

Mr. Swart: Yes, I will. If you want me to keep going back to that, I am glad to keep explaining it.

The Deputy Chairman: The difficulty is how this relates to the precise amendment before the House.

Mr. R. F. Johnston: How many sentences do we have to do that in? Do we have to do that every three sentences?

The Deputy Chairman: The member for Welland-Thorold is proceeding. I recognize the member for Ottawa Centre.

Mr. Cassidy: On a point of order, Mr. Chairman: If there is a precedent around this House, it is the degree to which the Speaker allows the Premier (Mr. Davis) to digress during question period. I would suggest it is a biased point of view for you to be constantly --

The Deputy Chairman: I do not accept that as a point of order. The member for Welland-Thorold has the floor.

lnterjections.

The Deputy Chairman: The member for Welland-Thorold has the floor. That is not a point of order. The member for Scarborough West.

Mr. R. F. Johnston: On a point of order, if I may: I would like some instruction from you, Mr. Chairperson. When a point is made by a member in an argument related to an amendment, how many times and in how many sentences do you want him to mention the amendment if he is following a natural progression of thought from his initial point of view? Instead of heckling him from the chair, you should allow him to make his point. He has not strayed from what his argument is one iota except for the badgering from over there and from yourself. This is outrageous.

The Deputy Chairman: I sincerely thank the member for Scarborough West for asking that question and if I may respond before the member for Sudbury East rises --

Mr. R. F. Johnston: Every two sentences?

The Deputy Chairman: No, I think what we want to make sure happens is that we move through the bill clause by clause and that in dealing with each clause we deal with the specifics that pertain to and are germane to that clause. I am anxious that each member have that opportunity. As long as an honourable member is able to restrain himself so it is within that context, the chair is most anxious to make sure he has the floor. I was worried that the member was moving to other sections of the bill as it related to regulations and other aspects of it.

Mr. Martel: Mr. Chairman, I have been in the House now for about 18 minutes. When I came in, the member for Welland-Thorold was trying to explain to someone who occupied the chair before you, some 18 or 19 minutes ago, and he satisfied that chairman that he was right on. Six or seven minutes later another chairman took the chair, the member for York North (Mr. Hodgson). He was not long seated, and he was not even seated comfortably, when he interrupted my colleague.

The member for Welland-Thorold indicated that what he was talking about was the amendment we moved with respect to the bill, moving away from the name Inflation Restraint Board, and why we were moving it. Now you occupy the chair. In a short period of 18 or 20 minutes, we have had three different people occupy the chair and each of them in turn has --

Hon. Mr. Gregory: You are getting the message.

Mr. Martel: You might have sent your instructions in, but if you had shut up you would have heard --

Mr. R. F. Johnston: We are not going to he bullied. You better get the message too, Bud. You are not going to force us to shut up.

Interjections.

The Deputy Chairman: Order, order. I am recognizing the member for Sudbury East and all I can suggest to the member --

Mr. Martel: Right. I wish you would advise the government whip that I have the floor.

The Deputy Chairman: You have made your point of order and I would like to recognize the member for Welland-Thorold.

Mr. Martel: Mr. Chairman, you are the third person to occupy the chair in the last 20 minutes, and you are the third person to interject on what my colleague is attempting to say. There are other people darting around here. The member for Erie (Mr. Haggerty) makes all kinds of comments. I think it is time the chairman sat there, having been the third one in a row to intervene. I suggest, with the greatest of respect, that the member has been right on topic, and to have three chairmen in 20 minutes interfere in his presentation is a little difficult to accept.

The Deputy Chairman: I thank the member for Sudbury East. I can only say that my only job as chairman of the committee is to make sure we proceed under the rules of the House and that when Speakers are participating in this debate they address the motion before the House. If I am able to recognize --

Mr. Martel: Three of them in a row.

The Deputy Chairman: Please, I am responding. I would like to have honourable members go forward in this debate as it pertains to the bill.

To refresh the House, and we can then go back to the member for Welland-Thorold, there is an amendment before the House under Bill 179 moving that clause 1(a) of the bill be struck out and the following substituted therefor: "'Commission' means the fair prices commission." I only ask that under Bill 179 that be the subject of the debate. I would like to call on the member for Welland-Thorold to continue his presentation, germane to that subject.

Mr. Martel: Mr. Chairman, maybe you could advise me then, in view of the fact that my colleague was talking about 1(a) originally when you took the chair. He was talking about the price of one commodity, insurance, and he then moved on to the price of milk and indicated that farmers had to justify it, and that we were attempting to have a fair prices review board that would really look at what was transpiring in that field.

9 p.m.

With the greatest of respect, Mr. Chairman, I do not know where he had digressed from dealing with a fair prices review board that would look into the price of milk as it pertained to what the farmers received and what the consumer paid. I do not know where he digressed. Maybe you could tell me.

The Deputy Chairman: Maybe that is where I need help from the member who has the floor when he is making his presentation so that I can see that it ties in tightly to the subject under consideration. I certainly am most anxious that we go through the entire bill in the time of the House but I was having difficulty relating the member's presentation to clause 1(a) and the amendment before the House.

I recognize the member for Welland-Thorold. I certainly want to give him every opportunity to complete his presentation on that subject.

Mr. Breaugh: If I might get one clarification from you, Mr. Chairman. It is my understanding now that you have ruled --

Interjections.

Mr. Breaugh: I will wait for a moment until the instructions are called in.

You have ruled, Mr. Chairman, and I would like this to be a ruling of the chair which sticks for more than five minutes.

We have proceeded with this debate since early this afternoon. Members have been allowed consistently to put arguments for a fair prices commission. It seems to me that members require a bit of latitude to do that but, the chair having accepted that it is in order for members from all sides to argue either for the government's position or for the amendment which we have put this afternoon, that is the end of whether it is in order to argue the merits of the amendment before us.

It is very difficult for the member for Welland-Thorold to give a speech when he is persistently interrupted by the chair on the basis that the chair is not sure whether this debate is in order. I would like you to make a ruling that we can all adhere to, Mr. Chairman, and that subsequent visitors to the chair can adhere to as well, which will allow the debate to proceed. Then that is game over.

The Deputy Chairman: I thank the member. I guess what he is asking me to do is what I am doing. If I am able to see the debate proceed according to the rules I am anxious to do so. That is all I am asking the member for Welland-Thorold to do.

Mr. Breaugh: That is fine.

The Deputy Chairman: I would like to proceed with the debate. We are in committee, and with regard to the points that have been made by the member for Oshawa, and two others, I am trying to make sure the debate proceeds.

Mr. Breaugh: That is fair enough, Mr. Chairman. I want to make this one, final, small point.

Once we have decided as a Legislature that we can debate an amendment which is before the House the debate should proceed. The chair, in my view, should not be interrupting just because the chair cannot follow the debate.

I know it is difficult when there is constant movement --

The Deputy Chairman: The chair has to follow the debate and the chair has to know how it fits into the bill before the House.

Mr. Breaugh: Then I would put it to you, Mr. Chairman, if the chair has an obligation to follow the debate, there must he a consistent chairman through the course of at least that Speaker. You cannot have three chairmen in 18 minutes and then ask the members to satisfy each person occupying the chair that their debates are in order. We are looking for a bit of consistency. It struck me that we have it but the problem is a mechanical one of three different people occupying the chair.

The Deputy Chairman: The real thread is we have one motion before the House and we are speaking to that. I would ask the member to take his seat and allow the member for Welland-Thorold to continue.

Mr. Swart: Thank you, Mr. Chairman. Perhaps I can just tie it in again before I go on.

I have been speaking about an amendment which provides for the substitution of a fair prices commission for the Inflation Restraint Board.

I have endeavoured to point out that the Inflation Restraint Board as set up in this bill will not control prices. I have endeavoured to show areas where it is not controlling and cannot control administered prices, and that it deals not at all with prices that are administered. I have been pointing out that in other provinces there are prices which are administered but which are not administered here. If we have a fair prices commission then it will include those prices.

Perhaps with that explanation I can go on and talk a bit further about the issue of milk which is an administered price in most provinces of this nation but not in Ontario. Since it is not an administered price here, the people in Ontario are paying more than they should for the milk which they buy in the supermarkets or wherever.

I was just going to point out the difference between the administered price of milk in Quebec and the nonadministered price of milk in Ontario. The figures I have were obtained just before the price of milk went up, which I think was about the middle of October.

In Montreal, a litre of milk sold for 77 cents; in Toronto, a litre of milk sold for 88 cents. In Montreal, two litres of homogenized milk sold for $1.52; here, they sold for $1.72.

They do not have three-quart containers so I cannot give a comparison of those prices; but in Montreal one litre of two per cent milk sold for 73 cents, and in Toronto it sold for 87 cents.

Two litres of two per cent milk: In Montreal $1.45, and here $1.70.

Today's prices, because there have been increases in Quebec and increases here in the same amount, are about seven or eight cents higher. The differential still remains and it is significant that the dairies in Quebec -- let me put it another way: The price set by the milk board in Quebec is exactly the same price to the farmers as is set by the Ontario Milk Marketing Board. The farmers there get just as much and yet there is this substantial difference because it is not an administered price.

I would think there would be real concern on the part of the government, not only about the differential in the retail price but about what has been happening with the farmers' share of the price of milk in this province in recent years. It is appalling. No other word can be used other than to say it is appalling.

I have a letter here in reply to mine. It is signed by Mr. Peter Gould, the economist of the Ontario Milk Marketing Board, and is dated October 25. He has provided me with a table which shows what has happened to the share that the farmer has been getting in this province. Listen closely. This ought to concern you. A government which professes -- not does but professes -- to represent the farmers should be concerned about this.

Let me just read this table which shows producer revenue as a proportion of retail price for Ontario. It is based on a three-quart container, retail price, in Toronto, mid-July of each year. In 1976, the farmer got 71. I per cent; in 1977,68 per cent; in 1978, 68.2 per cent; in 1979, 66 per cent; in 1980, 64.3 per cent; in 1981, 61.8 per cent; and in July of this year the farmer was getting 60. 3 per cent.

Five years ago they were getting 71. I per cent and are now down to 60. 3 per cent. If you put that another way it is even more startling, because it means the dairies and the distributors formerly were getting 28. 9 per cent of the selling price of the milk and now they are getting 39. 7 per cent. They have had a 50 per cent increase in their share. That has nothing to do with the increase in price, they have had a 50 per cent increase in their share.

That has not happened in other provinces. Are members aware of that? Maybe I should send you a copy of this report.

Mr. Jones: I don't follow your whole debate. You know why food prices are exempt.

Mr. Swart: Maybe we need a fair prices commission. We need a regulatory body to look into this and determine why this is happening. Do you think that maybe this is reasonable?

It is reasonable to have this fair prices commission as we have proposed in this amendment, especially when you realize the farmer as a result of the last increase, after he justified it to the Ontario Milk Marketing Board, was awarded 2.69 cents. Are you aware of that, Mr. Chairman?

When it left the dairy, that had been jacked to seven cents. In the supermarket, generally speaking, it is eight cents. Do you think that is fair to the farmer? Or fair to the consumer? Or do we need a fair prices commission?

9:10 p.m.

Mr. Jones: I do not understand the member's whole debate. He is talking about food prices that are not controlled and then he is telling us, because of the prices the market and the farmers gave, why they should not be controlled.

Mr. Swart: Perhaps I should send to the member for Mississauga North, who has no knowledge of farming, this document so he could read it at his leisure. I will be glad to do that.

If he cannot understand that there is something wrong with a system that in 1976 gave the farmers 71 per cent as a selling price and that is now down to 60 per cent, if he cannot understand that there is something wrong when the farmer gets 2.69 cents increase in the price of milk and it ends up as an eight-cent increase to the consumers, then I suggest he does not want to understand.

We need a fair prices commission. We need to look at this, as eight of the other nine provinces do.

Interjections.

The Deputy Chairman: Order. The honourable member is speaking to the bill and I want to allow him to have that opportunity. These interruptions from all sides are intolerable.

I would remind the honourable member for Welland-Thorold -- while this interruption is taking place -- this bill does not affect the farmers all that much. It has more effect on the public sector in Ontario and the inflationary conditions of the economy of the province.

Mr. Swart: I have been putting forth an argument for a fair prices commission. There is nothing wrong with pointing out the gap between what the farmer has been getting and what the consumer is paying because we do not have any control over it.

Those two commodities or services alone show the need for a fair prices commission -- something much broader and more effective than what we have in this bill before us. That is the reason we are moving this amendment, which I am discussing. I am speaking to the issue.

I have pointed out that it does not effectively control administered prices. I have pointed out that the administered prices in this province are very limited compared to what they are in the rest of Canada. It leaves that whole other area in a vacuum, where they are only going to monitor the prices. They do not make any pretence, as they do in administered prices, not even a pretence of trying to control those at all.

There is need to control those. Under a fair prices commission, under the New Democratic Party amendment you have before you, we would institute prices control -- ad hoc prices granted, but price control over other products in our society.

I want to give a couple of examples of the need for control on some other products. One example I want to give is salt. I just happen to have brought some salt with me.

Hon. Miss Stephenson: He has been shopping in Buffalo again.

Mr. Swart: No, as a matter of fact, this was bought in --

The Deputy Chairman: I beseech the honourable member, within the wide guidelines the chair wants to allow you and with all the efforts of your fellow members who are anxious that I maintain total freedom for you to maintain all the obvious avenues to discuss the amendment, I want you to be able at least to retain the posture of speaking to the fair prices commission.

Mr. Swart: Let me assure you, Mr. Chairman, that I am tying it right in, and even if you were to let me deviate from the amendment I would not do so.

I want to point out the need for a fair prices commission to control commodities other than administered prices, and if I may, I want to use salt as an example.

I have here a two-kilogram package of salt. Would you believe that this salt sold for 87 cents in January 1981? When you go into the supermarket to buy it now, it costs $1.41. From 87 cents to $1. 41 in 22 months. That is why we need a fair prices commission to look into this.

lnterjections.

Mr. Swart: That is two kilograms. Just to keep the Minister of Education (Miss Stephenson) happy, I want to show the comparison of the prices in the United States. Here we have five pounds. The Minister of Education may know that is about five per cent more than two kilograms. In the United States, this sells for 85 cents: 85 cents compared to $1.41.

Mr. Chairman, there is a reason for this. Here the government philosophy is that we do not need to have any controls on prices: Competition takes care of it, that is the government's philosophy. It is blind. It does not want to have any anti-combines legislation or anything of that nature, just private enterprise. It does not matter whether there is competition or not. In fact, the former Minister of Consumer and Commercial Relations said he did not believe in competition, that it was not important.

The reason this is selling for $1.41 today is that there is no competition in salt here in this province. There are three companies that produce salt. One of those companies produces only road salt, so there are only two companies that produce table salt. There is Domtar, which is Sifto, and the Canadian Salt Co., which produces the Windsor brand and some others. One can obtain the profits of only one of those: the Canadian Salt Co. They went up between 1980 and 1981 from $8.2 million to $9.9 million, a 20 per cent increase in their profits, and if you look at their earnings this year you find that this escalation is still going on. They are not being hurt at all by the state of the economy at the present time because they do not have to compete in it, there are only two companies.

Mr. Philip: There is no salt being rubbed into their wounds.

Mr. Swart: As the member for Etobicoke says, there is no salt being rubbed into their wounds. It is impossible: they do not have any wounds.

Mr. Philip: Not by this government.

Mr. Swart: No; they are doing okay, they are in a really healthy condition.

Surely if what I say is correct, and it is, we need a fair prices commission to look into the price of something like salt, and that is what the New Democratic Party proposes.

If we are really interested in controlling inflation, which is controlling prices, then maybe we should control prices. We should look at them, and where they are excessive we should order them to be held or to be rolled back. That is what the fair prices commission is all about and it is the reason we have this amendment before the House.

I want to give only one other example. I could give a dozen; in fact, I have done so in this House over a number of years. But I want to mention the same sort of thing that is taking place with regard to cereals, and this has a relationship to the farmers of this province as well.

For instance, a package of Cheerios, from January 1979 to now, has gone up from 86 cents to $1.63. That is a 95 per cent increase in the price of Cheerios. The same package that sells in Canada for $1.63, sells in the United States for $1.09.

9:20 p.m.

This is important. It is all right for those over on the other side to laugh and jest. For the person who is making $4, $5, or $6 per hour, these increases in price have some meaning to them. I know that, generally speaking, because of the salaries of those people over there and the environment in which they were raised, they do not understand it, but I hope they will listen to the people who are familiar with and perhaps even have been raised in hard times where there was not much money in the home.

Do members know that the 525 gram size of Kellogg's Corn Flakes has gone up, since January 1979, from 95 cents to $1. 67? That is a 75 per cent increase in the price of that product. Once again, it is 42 per cent higher in Canada than it is in the United States.

The reason is fairly simple. In the United States there is more competition. I am going to be referring to that in just a few moments, but there is more competition in the United States. That keeps the prices down. Competition does not exist here to the same degree and so -- before you put that hammer down -- we need a fair prices commission to deal with these matters.

I am the first one to admit in this House, and I recognize it, that many industries in our society today are hurting. There is no question about it. Their profits are way down in comparison to what they were before. Many of them are barely surviving. I am quite prepared to admit that. But if I am prepared to admit that, then those members on the other side should be prepared to admit that where competition no longer exists there are some companies which are ripping off the consumers. Within this party, in these times, we say that must not be permitted. A government that cares at all about inflation will intervene and see that does not take place.

In case you think these companies are hurting, I would just like to put on the record some figures from the 1982 annual report of the Quaker Oats Co. Of Canada Ltd. This does not sound like a company that is suffering from excessive competition at the present time.

The Quaker Oats Co. Of Canada Ltd. Achieved record sales and earnings in fiscal 1982. The year runs to the end of June. Net sales rose 15. I per cent to $184. 2 million, and net income, before extraordinary items, improved by 21. 3 per cent to $5.9 million. This followed a year of exceptional progress in fiscal 1981.

During the past five years, net sales and net income, before extraordinary items, have grown at a compounded average annual rate of 11 per cent for sales and 14.5 per cent for net income, year by year. That is what the increase has been for the Quaker Oats Co. That ought to indicate that their prices are too high and we need a fair prices commission to intervene.

If we think that is an exceptional company then let me read the chairman's report from General Mills Canada Ltd.

"Despite the widespread economic problems that characterized the past 12 months. I am pleased to report the General Mills family of companies experienced another successful year. Consolidated sales revenue in fiscal 1982 rose 5.2 per cent to $202.5 million compared with $192.6 million in fiscal 1981. Net earnings before an extraordinary loss item were $9.5 million, an all-time record and 27.6 per cent greater than those of the previous fiscal year."

Mr. Wildman: That is only on a five per cent increase in sales.

Mr. Swart: These are the companies making our cereals. Should we ignore this in a time of so called restraint? When the government over there is crying the blues and wringing its hands and saying, "We must impose restraint; we are going to see that the civil servants only get a five per cent increase," should we ignore this? I think any degree of fairness would dictate that we should have a fair prices commission to investigate this sort of thing and to bring those prices down.

If I need to say any more, I would just point out that in the United States, before Mr. Reagan stopped the investigation --

Mr. Cooke: Who is carrying the bill?

Mr. Swart: Yes, incidentally, who is carrying the bill? Do we have anyone here from the government, the minister or the parliamentary assistant? Is anybody carrying the bill?

Mr. Cooke: Mr. Chairman, on a point of order: I do not think we can proceed.

The Deputy Chairman: There is nothing out of order. The member for Welland-Thorold has the floor. That is the only thing that is in order.

Mr. Cooke: Mr. Chairman, we cannot proceed with Bill 179 when there is no one here carrying the bill.

The Deputy Chairman: There is no rule saying there has to be any particular person here on the opposite side.

Mr. Cooke: We have questions to put to whoever is carrying the bill and there is no one here carrying the bill.

The Deputy Chairman: There is nothing out of order. I thank the member for raising that point, but it does not mean anything as far as points of order are concerned.

Mr. R. F. Johnston: Here he comes, he has returned.

Mr. Jones: It is nice to be missed.

The Deputy Chairman: The member for Welland-Thorold on the amendment.

Mr. Swart: Yes, Mr. Chairman, on the amendment, which is for a fair prices commission. I have been talking about the need for a fair prices commission to deal with salt prices and cereal prices.

I want to make one or two further comments about these cereal prices in case I have not convinced the government that we need a fair prices commission to investigate the prices I have pointed out to you and to roll them back if they find they are unjustified. I think they are unjustified and I have one more argument to prove they are unjustified.

I have here a copy of the Washington Post, dated October 1, 1980, in which the Federal Trade Commission in the United States is quoted as stating that a monopoly of major producers of ready-to-eat cereals cost the nation's consumers "more than $1.2 billion in higher grocery store prices between 1958 and 1972, overcharges that added 15 per cent to every dollar spent for the cereal products, the staff of the Federal Trade Commission charged yesterday."

I could quote further from that and name the companies involved. Two of them are the very companies I have mentioned here. Mr. Reagan stopped that investigation as one might have expected Mr. Reagan to do, just as one might expect that this government will never start such an investigation and would oppose our federal government if it did so, because that has been the pattern to date.

If that kind of investigation was needed in the United States, I would just point out how much more it is needed here where prices are 50 per cent higher and where there is less competition among the cereal producers than there is in the United States. Further, there are not so many of them here. We do not have restrictive trade practices legislation as they have in the United States to ensure a greater degree of competition.

I suggest, Mr. Chairman, that there is need to have a fair prices commission to deal with these kinds of products.

I would like to go a little further and mention somebody who I think is giving his support to this kind of thing. I was at the Ontario Federation of Agriculture convention last week. I listened to the speech of its president, Ralph Barrie. I want to quote part of his speech, because it deals with this problem of excessive markups that a fair prices commission would deal with, if we had one and if we had a New Democratic Party government in this province.

9:30 p.m.

Mr. Charlton: On a point of order, Mr. Chairman: Could you determine whether we have a quorum?

The Deputy Chairman: We do have a quorum.

Mr. Jones: Quit your silly little delaying tactics. Let's get on with the member for Welland-Thorold's debate. It's good stuff. It's not factual, but --

Mr. Swart: Mr. Chairman, I understand the frustration of the people on the other side of the House --

Mr. Jones: Yield the floor and I'll answer some of your questions.

Mr. Swart: -- which has resulted in them bringing up points of order tonight and suggesting to you that I was not speaking appropriately to this. I understand that frustration. This bill has been going on now for more than two months.

Mr. Jones: No frustration.

Mr. Swart: But I hope they understand that we on this side of the House are concerned about a bill that is going to tear up contracts and cut civil servants' wages and is going to do nothing about prices when people are hurting in this province.

Interjection.

The Deputy Chairman: Order. I ask the honourable member not to listen to these distractions but to continue on clause 1(a), the amendment before the House.

Mr. Swart: I think that is good admonition, Mr. Chairman. I surely do not get much out of those interjections anyway.

I want to point out some more supportive evidence for the need to be looking into the markups. This time I want to read a very small part of Mr. Ralph Barrie's speech at the OFA convention last week. Incidentally, the member for Huron-Middlesex (Mr. Riddell) quoted briefly from this last night in his discussion of the Ministry of Agriculture and Food estimates.

Mr. Barrie stated that OFA members are getting too little of the selling price of a variety of commodities. He said:

"We can and must change that. We have to devise new techniques of educating consumers and politicians about why we are fighting for a larger share. We have got to keep telling them about how little of that dollar we actually pocket. Take an item like a 48-ounce can of apple juice. You pay about $1.29 for it in the store. Can anyone guess what the farmer's share of that was? It was a whopping 17 cents out of $1.29. In 1981, the last year we could get figures for it, the can cost more. The can cost 26 cents.

"Let us look at a basic food item that does not require fancy packaging and three-coloured labels -- dried white beans. A pound of them costs $1.15 retail; the farmer's share was 37 cents, less than one third. "Surely we need a fair prices commission to look into something like that.

Mr. Barrie went on to say: "In 1979, you paid 61 cents for a pound of beans at a store and the farmer got 26 cents. There is something there that is not quite right." That, of course, is what we are saying here.

"Let us look at a commodity that is under supply management, the system that is supposed to ensure a fair return to the producer. A pound of fresh chicken was $1.38 in stores last month. The price to the farmer on an eviscerated basis was 66 cents. That is somewhat better than the other prices we have looked at, but not overwhelmingly so. Again, it is interesting to note that in 1979 the retail price of chicken was 98 cents and the farmer's share was 54 cents. The gap between the farm-gate price of food and the retail price keeps getting wider and wider."

Is that not just what I was saying a few moments ago about the price of milk? We have a government that refuses to investigate that and is even indifferent to changing a bill so we would have control over prices through the fair prices commission.

Let us look at one more example before we go on: "A can of tomatoes cost 94 cents in the store last month; that is for 28 ounces. The farmer's share was 16 cents. Three years ago the farmer's share was three cents less than it is today, but the retail price was 29 cents less.

"We cannot keep information like that to ourselves. We have got to let the consumers know about these things. We have got to educate them a bit about our business. We can explain how it is costing us more and more to farm these days."

I will not read any more of his speech, but I want to point out that was a major part of it; the low share the farmer is getting, the markup between the farm gate and what the consumer pays. That is the main thrust of our fair prices commission in the bill. It does not have to be done on all of them, but where there is reason to believe the retail price being charged is excessive and the markup is too great, surely there should be an authority in this province that can look into that and order those prices held or rolled back.

Mr. Wildman: They would only do that if they really wanted to control inflation.

Mr. Swart: As my colleague says, one only does that if one really wants to control inflation. Instead of doing that, the government controls the wages of the public servants; somehow or other that is going to bring prices down. The minister says he wants to control inflation, which is controlling prices, but he controls wages.

Mr. Jones: That's input.

Mr. Swart: Sure, wages are one of the inputs to prices, we know all that; but they are not in any sense the total input and in many instances not the major one.

Mr. Jones: Seventeen per cent.

Mr. Cooke: You are totally wrong, Terry.

Mr. Lane: See today's Mail; see what it says.

Mr. McClellan: You have been listening to Ronnie too much.

An Hon. Member: Ronnie McNeil?

Mr. McClellan: Ronnie Reagan.

Mr. Cooke: This is the man who brought Reagan to Ontario.

Mr. McClellan: You can't listen to Ronnie McNeil. Ronnie McNeil never speaks.

Mr. Jones: He just doesn't talk to you.

The Deputy chairman: Order. Is the member finished or is there anything further?

Mr. Swart: I am not finished, Mr. Chairman.

[Applause]

Mr. Swart: The way they applauded. I guess they thought I was finished.

Some Hon. Members: More, more.

Mr. Jones: Don't get carried away. It is just partisan applause.

Mr. Swart: Last April 22, an interesting little item appeared in the paper which I thought was a classic, proving that competition in many areas is just not working. The heading is taken out of the Toronto Star.

Mr. Cooke: You are going to give Terry Jones a heart attack. Did you say competition is not working?

Mr. Swart: Yes, in many areas it is not working. Of course, they know it is not working, but they do not care. That is what really bothers me about it. They know very well that there are many areas where competition does not work. You know it does not work in administered prices such as Consumers' Gas, but you still let the prices go sky high. It does not matter what happens to the consumer.

The Deputy Chairman: The member for Welland-Thorold is not supposed to be talking to one member. He is to address the whole House on the amendment.

Mr. Swart: Yes, Mr. Chairman. Of course you are right.

lnterjections.

The Deputy Chairman: I do not want him responding to these interjections.

9:40 p.m.

Mr. Swart: I know all the members of the House are just waiting with bated breath for what I am going to say next.

In making the point that there are areas where competition is not adequately controlling the price to consumers and that we therefore need a fair prices commission, I want to give now what I think is a classic example of an area that proves competition is not working. In fact, the heading says just what I am saying: "Vanilla Goof Proves Point" --

An hon. member: Who?

Mr. Swart: Vanilla. That is produced. I worked in the vanillin plant for 25 years of my life, which produces one quarter of the total supply of vanilla in the world.

This article is headed. "Vanilla Goof Proves Point: Consumers' Group."

It says: "'Unjustified hikes in the price of pure vanilla are a good example of why groceries should continue to be individually priced,' an official of the Consumers' Association of Canada says.

"'The vanilla incident increases the evidence of a lot of things that we have been saying but have not been able to prove,' said Ruth Jackson, vice-president of the association, referring to a story published yesterday in the Star. 'Three supermarket chains have jumped the price of vanilla by up to 21 per cent.'"

Interjections.

Mr. Swart: I guess I have the floor, Mr. Chairman.

The Deputy Chairman: Proceed without paying any attention, as per my earlier advice.

Mr. Swart: I am sure the next Speaker in rotation will be a Conservative, and the member for Mississauga North (Mr. Jones) will want to speak. He just cannot wait to rise to speak on this bill and defend it.

I want to go on with this and remind members that "'Three supermarket chains have jumped the price of the vanilla by up to 21 per cent.' A simple error made by a clerk at Miracle Food Mart in February led to the chain-reaction price hikes. 'Instead of increasing the price of French's artificial vanilla, as he had been told, the clerk increased the price of pure vanilla,' a company spokesman said.

"Two weeks later, Loblaws raised the price of its pure vanilla, Club House brand, by 13 per cent to $5.99 for 125 millilitres, and a week afterward, Dominion raised its price 21 per cent from $4.93" --

Interjections.

Mr. Cooke: Every chain copied the same mistake.

Mr. Swart: Yes.

Interjections.

Mr. Swart: Perhaps if I could have a little order, Mr. Chairman, I could repeat that.

The Deputy Chairman: Order.

Mr. Swart: I hope the members will listen intently this time, because I do not want to waste the time of the House in repeating these things, but it is important that these points be made and that the members understand them.

"A simple error made by a clerk at Miracle Food Mart in February led to the chain-reaction price hikes. 'Instead of increasing the price of French's artificial vanilla, as he had been told, the clerk increased the price of pure vanilla,' a company spokesman said.

"Two weeks later Loblaws raised the price of its pure vanilla, Club House brand, by 13 per cent to $5.99 for 125 millilitres, and a week afterward Dominion raised its price 21 per cent from $4.93 to $5.99," the same amount. They raised it up to $5.99.

"The manufacturer said, 'No price hikes were justified, because the wholesaler's costs had not changed. It appears we followed one of our competitors in raising the price, but we are not sure why,' Roger Acton, vice-president of merchandising for Dominion said in an interview.

"Ruth Jackson, who is the vice-president of the consumers' association, also said she was 'discouraged. Competition between supermarkets was not strong enough to prevent price hikes from happening in the first place.'"

Welcome back, Mr. Chairman. What kind of proof do we need?

Mr. Wildman: Go over it again for the Chairman, will you?

Mr. Swart: No. The Chairman is a very discerning person. He catches up with debates and gets the full understanding even though he may not have come in at the beginning.

Mr. Chairman: I will not ask the member to repeat the half hour that I have missed.

Mr. Swart: This is only a small item, and we admit that, but surely it demonstrates, as clearly as anything can, that the competitive system in many areas is not working to protect the consumer. If it is not, whether it is administered prices or whether it is prices totally out in the private sector, we need a fair prices commission to protect the consumer.

Mr. Bradley: Mel, you have driven your family out.

Mr. Grande: One has to repeat something 17 times before the members opposite can understand it.

Mr. Bradley: They have left you, Mel.

Mr. Swart: They are busy people who probably got fed up with the irrelevant interjections and decided their time was better spent elsewhere.

Mr. R. F. Johnston: It is just that we are not slow learners like the ones over there.

Mr. Gillies: The thing that scares us is that the member for York South (Mr. Rae) is going to do the pricing.

Mr. Bradley: Do you mean that the government would appoint him?

Mr. Chairman: The member for Welland-Thorold has the floor.

Mr. Swart: Mr. Chairman, I was going to say that up to this time I have given examples to prove that the competitive system is not working in all areas to protect the consumer and that we therefore need a fair prices commission. I have given examples up to this time, but now I want to get into a little bit of the theory to prove that we need a fair prices commission and that competition is not working to protect the consumer.

I want to go to the person who should be considered as the greatest authority in this nation, a person who is saddled with the responsibility of making sure that competition works, the Honourable André Ouellet.

Mr. Cooke: Which party does he belong to?

Mr. Swart: He belongs to the Liberal Party, although it is difficult to distinguish between the Liberals and Conservatives.

Mr. Cooke: But a Liberal is a Liberal is a Liberal.

Mr. Swart: Yes, a Liberal is a Liberal is a Liberal, and a Conservative is a Liberal is a Conservative.

Mr. Cooke: Call it a community party.

Mr. Swart: I was driving along in my car, Mr. Chairman, on June 15, 1981. In my car I keep a pad beside me, because sometimes I hear things that I want to write down. I wrote this down. It was Mr. André Ouellet speaking. He stated:

"Canada has the highest concentration of corporate power of any of the western democracies but the weakest anti-combines legislation."

Mr. Wildman: He is in charge of it.

Mr. Swart: And he is the man in charge of it. He said this in defence of his proposal to bring in new anti-combines legislation which would be much tougher than the one we have at present.

I might also quote from Mr. Robert Bertrand. He is now the former director of the federal anti-combines branch. He is quoted in the New York Times as saying: "What we will have if this march of increased concentration continues is a national oligarchy in which a few dozen people will interact to bargain about the economic future of millions."

Then Mr. Ouellet stated at the Montreal Chamber of Commerce a year ago last March:

"Time is short since we are presently witnessing a new outbreak in the area of mergers and acquisitions in the country. If this phenomenon should continue for another three or four years at the same pace, the control of the entire Canadian economy could be literally in the hands of six or seven."

Do we really think that with that kind of situation, competition in all areas is going to adequately control the price to the consumer? Or do we need a fair prices commission until such time as we get an improvement in the anti-combines legislation? Unfortunately that may be a little way down the road, because I have the remarks of several other well-known economists here which echo those sentiments of Mr. Bertrand and Mr. Ouellet. I do not think I should take time to read them all here, but perhaps I should read some of them.

9:50 p.m.

I have one here by Mr. Irving Brecher of the Institute for Research on Public Policy, dated March 18, 1982. He wrote an article -- in fact, a whole pamphlet -- on the subject of competition, or rather the lack of it. The heading is, "A Sad Story of Competition Reform."

He says: "In December 1960, I published a general critique of Canadian competition policy in the Canadian Bar Review. A major implicit premise was that the basic economics of competition and monopoly could be readily communicated to politicians, businessmen and much of the public at large and that, once intellectually sensitized, the federal government would readily move towards the kind of competition policy best suited to the efficiency and growth needs of the Canadian economy. It was a characteristic, economist-type premise of the time. It was also extremely naive.

"The past two decades have dramatized the extremely important role of interest group pressures, especially from the business community, in the development of Canadian competition policy. Indeed, it has become the conventional scholarly view that the legislative record of failure and frustration is almost entirely attributable to the fierce resistance of self-serving Canadian businessmen with a solid grasp of the economic issues at stake and with an exclusive dedication to minimizing governmental constraint on private decision-making in the marketplace."

Mr. McClellan: Is he referring to the Minister of Industry and Trade (Mr. Walker)?

Mr. Swart: I have his speech here too. I think it is worth reading. It is a classic.

Mr. Brecher then says, "Relating statutory results to professed aims and potential benefits, I rank the story of competition reform among the saddest experiences in Canadian public policy."

My amendment does not remove competition at all. Any fair prices commission, as proposed by the New Democratic Party, would be a watchdog where competition does not exist, where the prices are rising unconscionably, as they are in cereal and salt -- I just gave those two examples -- because competition does not work. The fair prices commission would investigate on an ad hoc basis and order those prices held or rolled back. It does not destroy competition, and if there was an NDP government in Ottawa instead of a Liberal one it would have anti-combines legislation with some teeth in it.

Mr. Ouellet and the Liberals quite frankly admit they have been trying to reform the anti-combines legislation for 20 years and they have not been able to do it because of the pressures of the chambers of commerce and the multinational corporations. They always end up succumbing to their views. That is what they are going to do this time as well. That is why we need a fair prices commission, because the Liberals are not going to go ahead with reform of the anti-combines legislation. Now is the time to deal with it when we have a bill before us.

I wanted to read some more comments here, but I think I will pass over them rather quickly and proceed to the speech of the Minister of Industry and Trade and see what his views are about competition. This document I have here is the one that I read parts of in committee. I really should read the whole thing to the Legislature. People here might think that Ronald Reagan is to the right. They had better look at the Minister of Industry and Trade, because, if anything, he is to the right of Ronald Reagan. He is out so far to the right that there could be no one on the other side of him.

In this paper by the Minister of Industry and Trade, who was then Provincial Secretary for Justice -- what an irony that is -- and Minister of Consumer and Commercial Relations, to the federal-provincial consumer ministers' conference in Quebec City on Thursday, September 3, 1981, although this is a 13-page or 14-page document -- he is talking theoretically about competition in the economy -- he does not once mention in the 13 or 14 pages the need for competition.

It is all a defence of the multinationals and private enterprise, which we in this party support as long as there is competition and as long as they are following the public interest. It is likely that this party will be the saviour of private enterprise because we believe competition should be continued. The people over there do not care about it. If there is no competition, there cannot be private enterprise for too long. It is going to be either monopoly control with one or two companies, or else government will take over those industries.

The minister in this statement talks about the proposal of the federal government to strengthen the combines legislation. He says: "This policy will break the back and the spirit of Canadian business. We do not see a compelling need for substantial change in current combines legislation, nor do we consider a new competition policy to be a priority at this time."

Here we have Mr. Ouellet stating that Canada is in the worst situation with regard to monopoly and the lack of combines legislation and we have the minister saying he does not see any need for any change in the combines legislation.

Mr. Chairman: Refresh my memory on how that ties in.

Mr. Swart: I would like to refresh your memory, because it is a little while since I have mentioned it and I want to keep the thread of this all the way through. The amendment before you provides that the present Inflation Restraint Board be replaced by a fair prices commission. We move that because section 3, the prices section of the Bill 179 --

Mr. Chairman: I got that. I was here for that. Your last part, where are you coming in?

Mr. Swart: I am coming to that, Mr. Chairman. You almost have to go through this in sequence so that you will get the thread of it.

We are talking about a fair prices commission replacing the Inflation Restraint Board, because in the bill it does not adequately provide the mechanism to provide restraint of prices. I have pointed out that it does not provide that in the administered prices, which includes the two groups. I will not go into that unless you would like me to.

It also does not even deal, except with monitoring, with any prices other than administered prices. The government says that competition deals with them. My remarks now are intended to show that a fair prices commission should be dealing with all prices in the economy where competition does not exist to control those prices.

I am pointing out that the minister has said we do not have adequate anti-combines legislation. The minister here is in opposition to any change in the combines legislation. We do not have any change in the combines legislation. That makes it more important to have a fair prices commission. They will understand that more.

10 p.m.

I have to prove the point he does not want a change. Therefore, it will not likely take place, because not only is he opposing it but, as I will point out in a few minutes, the chamber of commerce also is vehemently opposing any change in the anti-combines legislation.

Between the two of them -- Ontario, with the clout it has with the federal government: Buddy-buddy a good part of the time; and the chamber of commerce, with the clout it has -- the federal government is not going to go ahead, as it pretended it was going to do time after time over the last 20 years and has never succeeded. So we have to have a fair prices commission.

The Minister of Industry and Trade states, "We fail to understand how a numerical computation of market share can conclude that a company is acting or is likely to act against the public interest." In other words, it does not matter if there are only two companies producing salt. That is no reason to think they are hurting the public interest.

Then he goes on to say: "The proposed policy defies the reality of the Canadian economy. One reality is that we have many key industries dominated by a few large firms because of Canada's geographic and demographic character. A small domestic market limits the number of companies which can succeed in many industries.

"The inherent heavy costs of serving communities scattered in the vast geography can place severe financial demands on those companies which can operate efficiently, and the high cost of developing and implementing new technologies can often impose substantial investment demands on an enterprise which must capture a significant market share to achieve production and cost efficiencies.

"Large corporations which consolidate financial, managerial and technological resources have emerged to overcome these Canadian realities…. Many of our industries require major restructuring to improve productivity and ensure competitiveness. This will inevitably involve rationalization of existing production and marketing activities through mergers and other types of arrangements among firms. We want to facilitate that process but federal policy would limit and prohibit it."

Mr. Chairman: Do you think you have to read the whole speech?

Mr. Swart: He wants to facilitate mergers. Then he goes on to say --

Mr. Chairman: We do not want to hear the whole speech.

Mr. Swart: You will want to hear what I am coming to in a minute.

"The policy too readily assumes that these practices are designed to drive out competitors and enlarge a company's market dominance when, in fact, this may not be the case at all." Get this: "Parallel pricing might well reflect price reductions or holding the line on prices as companies scramble to retain market share against the more efficient competitors. The dynamics of the marketplace even in oligopolistic industries can be positive as well as negative. First, as we understand the proposals" -- I am coming to the part you want to hear -- "any company or group of companies above a predetermined percentage or statistical threshold of market share would be prohibited from certain so-called anti-competitive practices."

Now, get this; this is what I am coming to: "A threshold level in the 70 to 80 per cent range would automatically designate many of Canada's top corporations." To get the significance of that, one must realize that proposals of the federal government made a year and a half ago stated that when a company had 70 to 80 per cent of the market, there was no longer competition in that field.

That seems to me to be a realistic assumption. In the United States, they think that if a company has 30 to 40 per cent of the market, competition really no longer exists. But the federal government said that once one got to 70 to 80 per cent, competition would no longer exist.

The minister went on to say: "It would automatically designate many of Canada's top corporations, the iron and steel industry, auto manufacturing industry, tobacco, gas, electrical wire and cable, brewery industry, many specialized manufacturing sectors, and so forth, as being undesirable corporate citizens in the federal view. We also object to the presupposition that just because a company is dominant in its industry, its market power is therefore detrimental to consumer interests."

In other words, just because there is no competition does not mean that is detrimental to consumer interests.

It goes on to say: "Large and dominant companies are increasingly sensitive to the dangers of antagonizing not only governments, but also their suppliers and their customers. It is simply contrary to good business practice in an environment where governments, news media. Consumer groups and analysts are ever vigilant. Market share, as already noted, is not a logical or fair test."

Mr. Chairman: I have been very tolerant in your reference to the speech in your hand, but, sincerely, I find it difficult to tie in a particular speech that relates to this.

Mr. Swart: I will conform to your wish. I suppose I could go through the whole procedure again to point out how I am tying this in but I will not bother. I will conclude with the final sentence of this speech: "For these and other reasons, Ontario must oppose the proposed competition policy." That is Mr. Walker who is against competition.

Mr. Chairman: Do you mean the Minister of Industry and Trade?

Mr. Swart: He said that when he was Minister of Consumer and Commercial Relations. That is why it is so important. The present minister could tell you that I raised this issue with him. I asked him in the estimates of Consumer and Commercial Relations if he still supported that policy as stated by the then minister and he did not answer. He declined to answer that directly.

Mr. Cooke: What does the Premier (Mr. Davis) say about competition at first ministers' meetings?

Mr. Swart: He said nothing about competition. The government let Mr. Walker make those right-wing statements.

Mr. Cooke: He said the new proposals were too restrictive.

Mr. Swart: I have no doubt that they let Mr. Walker put this government's position on competition. We know what it is. Competition is of no importance to them at all. If there is no competition then we must have some way of protecting the consumer; and that has to be the fair prices commission, as we in this party will change the bill to provide.

We in this party, as you may have gathered from what I have said, believe it is essential, and we are saying this because it is a view and conviction held by this party, that if we are going to fight inflation and price escalation we must have a body that has the authority and the means of controlling unjustified price increases.

Hon. Mr. Timbrell: Exactly.

Mr. Swart: That body is the fair prices commission. I just cannot see why the government is opposed to such a commission.

I am sorry the Minister of Agriculture and Food (Mr. Timbrell) was not here when I was talking about milk. I was quoting what Ralph Barrie had to say about price spread at the Ontario Federation of Agriculture. I will not go back over that. You will appreciate that, Mr. Chairman. I want to proceed and to finish by 10:30. I am not saying I can accomplish it, but that is what I want to do.

There is little doubt that if the objective of this bill is to control inflation, which really is to control the price of goods and services, we must have an adequate fair prices commission. In fact, we must control prices.

I have quoted this before but I am going to quote it again because it is rather significant. What I have been saying for the last two hours about the need for a fair prices commission, the need to control prices, is exactly what the appointed chairman of the so-called Inflation Restraint Board said. We in this party are trying to carry out his wishes because Mr. Biddell, writing in the CA Magazine for chartered accountants back in February 1980, made these comments on price controls.

10:10 p.m.

Incidentally, I should say, Mr. Chairman, because you would want to know, I am not quoting this out of context. I read the whole article and what I quote here is really the essence, the summary of what he said in that article.

He said, "Simply put, high inflation is a continuing, unacceptable rate of increase in the prices we have to pay for the goods and services we consume." A very straight statement.

He goes on: "To contain inflation effectively, we must slow down the rate at which prices are increasing. We must control prices." That is what he says and that too is reasonable, Mr. Chairman. I am glad you nod your head. That of course means that when the time comes for our amendment to be voted on, you will be with us.

Mr. Chairman: No, I am just nodding because I am following your arguments.

Mr. Swart: Thank you. That is the first step, Mr. Chairman.

Mr. R. F. Johnston: That is better than some people we have noticed.

Mr. Cooke: It wouldn't be the first time he supported us.

Mr. Swart: That is right, he did vote with us, I recall.

To continue with the comments of Mr. Biddell. "Most people believe that this is just what the United Kingdom, the United States and then Canada did under our respective anti-inflation programs in the last five or six years." Of course, here he is talking about the program which was instituted by the Honourable Pierre Trudeau and supplemented by legislation enacted here by an order in council when this House was not sitting, back in 1976, and which was ultimately declared to be ultra vires. Then they had to bring in a bill in the next session to correct that.

I go on to quote: "The fact is that except for a very brief, temporary price freeze in the United Kingdom and the United States programs, none of us did." That means none of us did control prices. In fact, that is the next sentence. "We did not control prices. We attempted to control some profit margins and we controlled wages and salaries and we controlled dividends, all in the hope that by doing so we would inhibit price increases. Our efforts had some success but not nearly what we might have had and could in fact achieve now, if we set about in a more direct fashion by directly controlling price increases.

Surely the members of this House know that is exactly what we are trying to do by the amendment we now have before this House and by the subsequent amendments we will have to section 26 of this bill: Direct control of prices. Our amendment, of course, is an amendment which replaces the Inflation Restraint Board by a fair prices commission.

To have a statement like this from the chairman of the board which is going to have to be dealing with low prices, seems to me to be pretty significant. In fact, it says to me and I would think it would say to the government, that the government's attempt to control inflation by controlling public sector wages, will be a total failure.

Mr. Wildman: A fraud.

Mr. Swart: I like that word. It is more than a failure, it is a fraud. In fact, I suggest they are deliberately perpetrating fraud on the people of this province for political reasons and it really has very little if anything to do with controlling prices.

Unfortunately perhaps, Mr. Jack Biddell is part of the fraud being perpetrated by this government. Here they are taking a person whose views they have respected over the years, and putting him in a position where he will have no power. That is exactly what the government is doing. He may want to carry out the price control but he has no power to do it, unless we can get our amendment for a fair prices commission through. Then he will have the power to do it.

He deals with various categories and I am not going to read the whole article but he says, "The third category includes the majority of manufacturers and most of the service industry." He is talking about the sector where we need price control. "Although influenced to some degree by competition, this is the group with the greatest ability to pass on to the public its additional costs plus a profit margin simply by raising prices."

Do you see any similarity in that statement to what I have just been saying about the lack of competition? He is saying exactly the same thing.

He goes on, "If we are to contain inflation in Canada, this is the group whose prices must, in some fair but effective manner, be directly controlled."

That is the third section I was talking about. I am not sure you were here, Mr. Chairman, when I was talking about the first two sections: the administered prices by agencies and the prices applied directly by government agencies; and then this third section, the prices this bill does not even deal with at all.

He states, and I want to repeat it: "If we are to contain inflation in Canada, this is the group" -- the last group I was talking about; the group that the Minister of Industry and Trade, incidentally, said should do as it likes. "If we are to contain inflation in Canada, this is the group whose prices must, in some fair but effective manner, be directly controlled." What fairer way of directly controlling them than a fair prices commission?

It should be remembered that Ontario's administrative price program with a profit and wage control program allows full cost pass-through but limits increases in profits and wages to five per cent. That is precisely the kind of system that Mr. Biddell concluded would not work.

I doubt whether I will be able to conclude totally by 10:30 p.m. because I want to tell a little bit about what we propose to put in the fair prices commission.

If we are going to change the name, as we are proposing in this amendment, to a fair prices commission -- and if I have proved the need for a fair prices commission to control prices on an ad hoc basis -- then I should tell the House how we propose to do that so members can vote with full knowledge on the change of the Inflation Restraint Board to a fair prices commission.

Mr. Philip: Do not cover the rent stuff now. That will take me an hour in my speech.

Mr. Swart: No, I am not going to cover the rent stuff. I do not have time to do it. Besides, the member for Etobicoke (Mr. Philip) is so much more knowledgeable about the rent issues than I that he is the appropriate one to deal with that.

We intend to change the name of this Inflation Restraint Board to the fair prices commission but the section dealing with the setting up of this board will remain fundamentally the same. It leaves three members on the board. There will be a chairman appointed by the government and the terms of reference in that first section will remain much the same.

I want to point out, though, that we are removing within that section, one of the very arbitrary provisions. I am sure the colleagues to the right, the Liberals, will agree with this one, because we propose that the commission shall, before making any order or determination, hold a hearing, and the Statutory Powers Procedure Act applies to such a hearing. We want to do all of this in a very democratic way. We do not want to impose penalties, unjust decisions, on the manufacturers or on the distributors, whoever is setting these prices. We want to do it in a fair way, but we want to assure that it is done through a fair prices commission.

10:20 p.m.

As you would expect from what I have already said, Mr. Chairman, we will enlarge rather dramatically the control over prices. Whereas now under section 26, I believe, of the bill we have before us, it talks about the prices it will endeavour to control -- I am having some difficulty finding the bill. I know it is in section 26, in any event, and it gives a definition of "Administered price."

Mr. Chairman: I prefer you not to refer to section 26, because then it is tough to justify how you are speaking to the amendment.

Mr. Foulds: On a point of order, Mr. Chairman: He just wants to relate that to clause 1(a), which he has been doing a superb job on throughout the last few moments, as I am sure you yourself would agree.

Mr. Swart: Mr. Chairman, I think it is fair and within the rules of order that I should tell you what we intend to do with the fair prices commission, how we intend to change it; otherwise, when people vote for or against the fair prices commission, they will not know exactly what they are voting for or against in the definition section.

Under section 26 of this bill "(a) 'administered price' means, (i) a price, user charge or fee charged by a public agency, and (ii) a price, user charge or fee required, permitted or authorized by a public regulatory agency to be charged by another person; (b) 'price increase' means an increase or a proposed increase in an administered price." Members will agree that this is a very finite definition of what prices are controlled.

This is what we would do under the fair prices commission. "Administered price" would mean (i) a price, user charge, fee or premium -- that gets the Ontario health insurance plan premium, you see, Mr. Chairman -- or rent charged by a public agency; (ii) a price, user charge, fee, premium or rent required, permitted or authorized by a public regulatory agency to be charged by another person; and (iii) an amount payable by the Ontario health insurance plan for insured services. That plan would also come under this: doctors. "Price" means any price, user charge, fee or premium other than an administered price.

So the fair prices commission, as we envisage it and as we will amend the bill to provide, will be given the power to deal with all prices for goods and services. It removes that very confined definition and broadens it.

It also provides -- we want it this way, and I am sure you would too, Mr. Chairman -- that any person can initiate in writing a request to the commission to investigate a price increase; it seems that this is a democratic way of doing it. And, of course, the commission has the obligation to do it on its own where it sees that prices are increasing.

Members will realize that the present section 27 provides that the minister will set up criteria on which these administered price increases will be judged, but there is nothing in the bill about what those criteria will be. We have a statement that was tabled, but there is nothing in the bill. So we would put criteria right in the bill, and the fair prices commission, in considering whether an increase is justified, would consider it in the light of the earlier price increases relating to the same product, service or rental accommodation, where the person or public agency proposing the price increase could reasonably be expected to absorb a higher share of the price increase. That is one very important criterion.

Another is that the commission would consider whether the price increase takes place in a sector dominated by one or a few suppliers of the relevant product, service or rental accommodation. This gets into the whole field of competition again. In the case of salt, where there are only two manufacturers and the price is high, that would be considered by the fair prices commission, as it should be, and as is advocated by Mr. Biddell, as members heard me quote.

Further, it would consider whether the price increase relates to an essential consumer product or service. There may be some justification for permitting increases, for example, to make a substantial profit on the price of Cadillacs, but not on the price of Citations, one of which I just bought, a four-cylinder car, which is a working person's car. There is more justification in keeping that price down. That is an example of what we mean.

Also, it would have to consider whether the public interest would be better served by a lower price increase or by no price increase, and whether the price increase would have a significant impact on the rate of inflation. That is rather important, is it not, when the whole purpose of the bill we have before us, according to the government, is to control inflation? Certainly it should already be in the bill that the Inflation Restraint Board should consider whether the price increase would have a significant impact on the rate of inflation as measured by the consumer price index published by Statscan.

Further, the commission would consider whether the price increase would materially affect the general standard of living, or the standard of living of a particular class of consumers, and whether the price increase would exceed current average real wage gains. That is important too. If we are expecting people to limit their wages, then we should set prices in relationship to those wages.

It would also consider whether the price increase, apart from its own merits, could be justified in view of current economic conditions.

Then we go on to list the powers of the board. The commission could require that the price or administered price be frozen at its current level or that the price or administered price be rolled back from its current level to a specified level. It could substitute a lower price increase for the proposed price increase; delay the effective date of a price increase; impose conditions on a public agency or other persons with regard to the implementation of a price increase; or exercise any combination of the powers in clauses (a), (b), (c), (d) and (e).

We want it to be democratic, unlike the bill before us. This sets up an appeal process. The fair prices commission would have an appeal process and, upon the petition of any person filed with the clerk of the executive council within 30 days after the date of an order of the commission, the Lieutenant Governor in Council may confirm, vary or rescind the whole or any part of the order or require the board to reconsider in a new public hearing the whole or any part of the matter to which the order relates.

Not only do we believe in democracy to the extent that there should be an appeal process, but once again the final determination shall be made by the political party that has the power to govern this province. Of course, at present that is the Conservative Party, and we have reservations in leaving it with that party because we know what it has done. Nevertheless, under the principles of democracy, rather than leaving the final decision with the restraint board, it would go to cabinet.

I think at this time, Mr. Chairman, I should move the adjournment of the debate, and I do so.

The Deputy Chairman: Actually, the adjournment of the debate is not required.

Are we ready to vote on the amendment?

Some Hon. Members: No.

On motion by Hon. Mr. Wells, the committee of the whole House reported progress.

The House adjourned at 10:30 p.m.