ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS (CONTINUED)

CONCURRENCE IN SUPPLY, MINISTRY OF COLLEGES AND UNIVERSITIES

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The House resumed at 8 p.m.

House in committee of supply.

ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS (CONTINUED)

The Deputy Chairman: If people would just hold for half a moment, I am sure the minister must be on his way. We are continuing with the estimates of the Ministry of Treasury and Economics.

Mr. Haggerty: Mr. Chairman, I suppose the minister is on his way. His staff will be there, anyway, and they can report to him.

Before the dinner break I was trying to drive home a few points to the Treasurer (Mr. F. S. Miller) on areas where we should be looking for long-term employment. This party has always been in the forefront in bringing about employment strategy programs, and under Dr. Stuart Smith we had an excellent program about three or four years ago. Perhaps this government has been a little behind the times in grasping some of those good suggestions that were put forward to develop an employment program in Ontario for the benefit of Canadians as a whole. As the minister has indicated, if Ontario moves ahead the rest of the economy and the country will move also. But in the last couple of years we have been behind and not looking forward.

My comments previously to the minister were that I thought there was a commitment from this government to develop the Polar Gas project. I thought it would assist in bringing the pipeline down to Ontario, opening up new communities and encouraging the development of northern Ontario in supplying natural gas to the eastern provinces, which would make us reasonably secure in energy that would be of benefit to the industrial sections of Ontario and the eastern provinces.

Some may have noted that Russia now is in the development stage of bringing their natural gas pipeline down from the arctic to western Europe, Germany, France, Italy and places that are short of energy would be the recipients of a good program. So the technology is further advanced in Russia and in Europe than it is in Canada. I suggested to the minister responsible for this new employment expansion and development program -- "NEED" -- that the arctic pipeline project would create long-term employment. Perhaps the program should be called new employment and economic development program, which would put some muscle into job creation.

In any event, I pointed out the benefits to the pipe mills in Welland, which would certainly get back in production again, employing some 300 or 400 persons there. A spinoff of that might be employment in the iron mines in Ontario. In Quebec, it would mean greater use of the so-called cheap hydro energy, and in Ontario it would perhaps put more work load on existing Hydro plants in Ontario and would encourage more use of enriched uranium and heavy water in nuclear plants. That is an area where this government has missed the boat, and I think even the federal government has.

The minister will be discussing this problem of employment with his federal counterpart and the first ministers here in February. I suggest to him that one area the government should be moving in is to bring natural gas down to this province. It would create a number of jobs in Ontario. It is estimated the construction jobs involved in bringing the pipeline down from the Arctic islands would last 10 or 12 years. That is an area this government and the federal government should be looking at. It would secure energy self-sufficiency.

I am not too happy with the new employment expansion and development program. I do not think it is going to resolve the problem of long-term employment in Ontario. It is a quick-fix method and by the time it works through the system I think there will still be a number of persons unemployed. The government has failed to come up with an employment strategy program. I suggest the minister should follow the document put out by the Liberal Party in Ontario. It is a good document. At least the government should be looking at it and saying, "Here is an area we have overlooked in providing new jobs."

I mentioned before that the Japanese seem to be capturing the market on automobiles and the production of new machinery. They are copy-cats. Much of their development is taken from research and development done by our neighbours to the south. I suggest they are having difficulties on the American side with the importation of new machines to apply to their assembly lines. The Congress and the Senate are looking at a measure to penalize the importation of new Japanese technology in machinery and to lead to increased production on the production line.

An area they are talking about is a tax rebate on new machinery to improve productivity in the States. Apparently now many of the industries in the States are buying machines from the Japanese and getting a free ride on this tax rebate that is given to them for the improvement of machinery and production. The indications are they are going to be moving some amendments to the bill that will stop the importation of machinery from Japan and improve the market in building their own machines in the United States.

As close as we are to our neighbours to the south, our biggest trading partner, perhaps we should be looking at better working arrangements with them. Some of the machines that will be produced there could be used to improve our productivity here in Ontario and Canada and perhaps they should be manufactured in Ontario. If the minister wants to try the new machinery tax rebate that has been tried over a number of years, maybe this is the area we should be looking at.

Every time a new machine comes in here it takes away a number of jobs from the assembly line and there is no reason for that. Machines can be manufactured here in Ontario. At one time, in Ontario's industrial age, this province did manufacture much of the machinery required for machine shops; the equipment was of good quality. For some unknown reason we seem to be looking offshore to replace much of that equipment. Following the adoption of the metric system in Canada many of the new machines that are now brought in -- lathes, shapers, milling machines, boring mills etc. -- are all in metric. Machines manufactured in the States, from which we would get some spinoff, are not in metric. I suggest that this is an area we should be looking at. There could be jobs in the area of manufacturing special machines to improve productivity.

8:10 p.m.

I do not see the Treasurer here yet. Perhaps somebody else will have a few points. But this government made a commitment to the Polar Gas project and if it lives up to that commitment a number of jobs will be created in Ontario -- not for three months, six months or 12 months but for 10 years. And those are the types of jobs we are looking for here.

Mr. T. P. Reid: Mr. Chairman, I really do think it is necessary to have the Treasurer here. We have waited 10 minutes. They are his estimates, and I do not think we should proceed until he is present.

The Acting Chairman (Mr. Hodgson): If the parliamentary assistant, the member for Mississauga North, would --

Mr. Jones: Mr. Chairman, I have been making notes for the Treasurer. He is running a little late but he is on his way and should be here momentarily. If there is anything in particular that either of the critics would like me to deal with or convey to him, I will await their comments, but it is totally unnecessary to suspend any comments the honourable members might have.

Mr. Cooke: Mr. Chairman, as the critic for our party I have just five or six questions I want to put to the Treasurer. We can probably finish these earlier than we thought, but I am not going to ask them of the parliamentary assistant. He would not have the answers; he never does.

The Acting Chairman: That is too bad. I am sure if you have some questions to place, the parliamentary assistant will make notes. You can proceed if you want to talk at this time.

Mr. T. P. Reid: Mr. Chairman, I am not prepared to proceed and I will call a quorum if that is what you want. Is there a quorum, Mr. Chairman?

The Deputy Chairman: We do have a quorum.

Hon. Mr. Gregory: On a point of order, Mr. Chairman: I do apologize to the members for the absence of the Treasurer. We are trying to locate him. On general topics perhaps the parliamentary assistant can help. The member for Windsor-Riverside has indicated he wants to ask direct questions of the Treasurer, and we will get him here as quickly as we can. Perhaps we can carry on with the parliamentary assistant until we are able to locate the Treasurer. I believe he is somewhere between his dinner and here.

Mr. T. P. Reid: Mr. Chairman, the Premier has sat in his spot and told us time after time we cannot ask questions of the parliamentary assistants. We are not now about to begin that practice, because we certainly would not want to go contrary to a policy laid down by him. So we are not going to proceed, and if necessary we will just make sure there are not 20 members in the House for a quorum.

Here he comes now.

The Deputy Chairman: We are pleased at the sight of the Treasurer. He does not have a red costume on, but he has got a red face.

Mr. T. P. Reid: He has got his grinch costume on tonight.

The Deputy Chairman: Did the member for Windsor-Riverside not have the floor?

Mr. Cooke: I think the rotation is such that it is our turn.

The Deputy Chairman: I will be quick to recognize the member for Rainy River if the opportunity arises.

Mr. Cooke: Mr. Chairman, I have a few questions I can put rather quickly. With regard to the auto tech centre in the Niagara Peninsula I understand the original concept has changed considerably from when it was first announced and promised to all of southwestern Ontario and the peninsula. Would the Treasurer say what exactly are the terms of reference for the auto tech centre now? How are they are different from what was announced in the original Board of Industrial Leadership and Development program, where I understand they were to be more in line with direct research?

Hon. F. S. Miller: Mr. Chairman, I really do not think there is a radical change between the proposed role and the role as defined today in the tech centres. What we have seen is a recognition that the technology centres are not basically research centres but transfer centres for existing technology. That is the case in the Ontario Centre for Automotive Parts Technology. It is also the case in the computer-aided design/computer-aided manufacturing centre. You cannot really define research as easily as you would like.

There will be cases where each centre requires research to be done for it. In that case, they may or may not ask Innovation Development for Employment Advancement Corp. to be involved. Our hope was that they would ask it to become involved because there was a potential for duplication if the IDEA centre, whose basic job is research and risk or venture capital involvement, were not involved. There is also the chance that in each centre, CAD/CAM, robotics, auto parts technology or microelectronics could overlap considerably.

One cannot easily define each of those as a clear and distinct part of the technology field. As long as you cannot define it the chance for overlap exists. That is why there is a need to have one minister as the co-ordinator, not only for IDEA, which originally was to report to BILD, but for the tech centres which were originally to report to him. We felt that unless that co-ordinating effort existed in one ministry, there could be a potential for overlap. So we have done it that way and I do not think there really has been a change in the concept for the auto parts technology centre.

Mr. Cooke: Can the Treasurer tell us whether there are written terms of reference for all the tech centres, but specifically for the auto parts tech centre, which we have been requesting now since the last election when they were announced? Are those terms of reference in writing and can they can be tabled in the House?

To get back to the original question, it is my understanding from talking to the Automotive Parts Manufacturers' Association that the original concept of the auto parts tech centre has changed considerably. I understand that now it really boils down to more of a referral centre than anything else. That is my question as well as the one about terms of reference. Are they in writing and when will they or are they ever going to be tabled in the Legislature?

Hon. F. S. Miller: Properly the question about the tabling will go to the Minister of Industry and Trade. He is the minister who is handling all six centres plus the IDEA Corp. To the question is there a clear business plan and therefore, a clear definition of role, the answer is yes. It is carefully spelled out in a document and delineates so far as possible the role of the centre. That was a requirement before the funding was confirmed.

Mr. Cooke: We have tried to get the terms of reference from the Minister of Industry and Trade but have been unsuccessful. Perhaps you could put a little fire under him and see if he could table them in the Legislature as has been requested, not only for the auto parts tech centre but the rest.

I would like to ask the Treasurer if he could indicate to us what assumptions his ministry is now working on regarding what the deficit will look like at the end of this fiscal year? What will the growth in the gross provincial product look like over the next 12 months? What will the unemployment rate look like for 1983? What does the inflation rate look like for 1983? Specifically, on the inflation rate, have you now made any kinds of projections of the effect Bill 179 will have on inflation in Ontario?

8:20 p.m.

Hon. F. S. Miller: I am trying to keep track of all those questions and it is not easy. I could not even write them down fast enough. By the way, I am told the business plan for the Ontario Centre for Automotive Parts Technology has been released so may I ask the member to double check that?

Mr. Cooke: I will. It had not been up to a week and a half or two weeks ago.

Hon. F. S. Miller: Okay. My deficit as of right now is aiming at somewhere around $2.6 billion in the current year. That is a change from roughly $2.3 billion to begin the year. The last time I saw our projection for total spending it was on target and the change in the deficit was entirely due to drops in revenue. That is about a 15 per cent change. It compares to a 350 per cent change at the federal level and about 200 per cent in our western provinces. I do not mean that is good; I just mean relatively it is not bad.

The unemployment level for the projected year will be subject to revision as I approach budget time so, when I give the member a figure now, he has to realize it is a current figure and not necessarily a future figure. It is running at about 10.7 per cent.

The growth rate he asked me about is somewhere between 1.5 and three per cent, depending on one's assessment of the vitality of the United States economy. Most people come in close to two per cent for Canada.

What other questions did I miss?

Mr. Cooke: I wondered if the minister had assessed what effect Bill 179 will have on the inflation rate and what his projections for inflation were.

Hon. F. S. Miller: I am a little foggier on the projection for inflation but I believe the 1983 projection is in the range of seven to eight per cent. My economists are saying I am right. Considering we have been in double digit this year, we are down between 20 and 25 per cent in the future projected year.

We could argue all night about how much of that is due to Bill 179. I would say the bill had a direct impact on municipal governments, boards of education and the provincial government. It's effect is not all in one fiscal year; it is in three. Its historic value may be in showing that the private sector and the public sector were sharing a set of circumstances rather than the private sector facing it alone.

Mr. Cooke: The minister is right. We will never agree on what effect Bill 179 will have except that the projection for inflation was about the same figure. In the last four months, if I am correct, it is running a little lower than this projection. It is questionable whether Bill 179 has had or will have any significant effect. Something he could probably indicate much more clearly is what effect Bill 179 has had on his projected deficit for fiscal 1982-83.

Hon. F. S. Miller: I gave figures at the beginning of the discussions on Bill 179 in September. I used the figure of $840 million as the sum total of all the savings of Bill 179. I hasten to say that was my figure; it was not necessarily a staff figure. I was asked a question in question period and I answered it as honestly as I could at the time.

I think I qualified it that day by saying one had to assume what the level of settlements would have been in the absence of Bill 179. One then had to say what they were after the bill, take the difference and divide it into the fiscal years as it applied to specific contracts.

I took a total number of dollars, not any one fiscal year's saving because I could not. One had to allow for the fact that some contracts such as the teachers' would not enter their five per cent year until September 1, 1983. Others would be quickly entering that year. One municipality would have it quickly and one would have it late; some members of government would have it quickly and some would have it late. I took the aggregate total rather than any one fiscal year's total.

Mr. Cooke: But it is safe to say your $2.6 billion deficit would probably have been $2.8 billion or $2.9 billion had it not been for Bill 179. There is a projection. There is not just a projection, there is a very accurate figure you can come out with as to exactly how much money has been saved by the province in the direct contracts you signed and then ripped up through Bill 179. Is there any kind of calculation on the savings to the provincial government from those contracts that have been destroyed?

Hon. F. S. Miller: I cannot tell you the specific intervals in which the savings are effected. I said the other day that 722 contracts were expiring December 31, and they were almost all municipal. At this point I really cannot say how much of it is in this fiscal year, the next or even the third fiscal year. I can only talk in aggregates and say that was not the basic reason for Bill 179.

Many people have tried to say Bill 179 was put in simply to prevent the deficit from going up. That was not the case at all. It never even entered the discussion we had in cabinet. It was simply a question of what could the public sector do to show some element of concern and sharing with the private sector, which was being buffeted by all kinds of economic storms at that point.

Mr. Cooke: I suppose we will never agree either on whether the deficit and the effects on the deficit as a result of Bill 179 ever entered into your discussions, whether they be at the cabinet or the caucus level. We have heard your caucus members go around the province and say one of the main reasons for Bill 179 had nothing to do with economics, it had to do with your deficit. Those statements have been made.

Hon. Miss Stephenson: Where and by whom?

Mr. Cooke: I can mention some caucus members. My colleague the member for Port Arthur (Mr. Foulds) indicated the statement has been made in Thunder Bay. I know the statement was made in the committee on Bill 179 about the effects on the deficit.

In any case, the final question I have is: In your May budget, a major expenditure was the $250 million tax holiday for small incorporated businesses. I am sure your ministry has done a projection, since a $250 million expenditure would not be proceeded with without some kind of an evaluation as to how effective that tax expenditure has been and how many jobs have been created. You projected 10,000 new jobs would be created. Has there been any kind of assessment as to how many jobs have been created under that tax expenditure?

Hon. F. S. Miller: If there has been I do not have it. As the minister who proudly brought that in, I have to say the number of jobs being created was not my reason for bringing it in. It was an acceptable justification. It gets back to the kind of issue we discussed before supper which was: How do we buy back Canada? How do we encourage people in business to invest here? How do we help the creation of capital in our country?

My real belief is that corporate income tax at any level is counterproductive if one looks to the long-term future of the ownership of the assets of a country by its citizens. It is counterproductive in terms of decisions relating to productivity improvements that always have to be looked at on an after-tax basis instead of a before-tax basis. Therefore, if those two former facts are right it is counterproductive in terms of job security for the people you and I are concerned about.

My reasons then were that small and big business in the minds of Canadians are totally different entities. For some reason the profits made by big business are seen to be evil and those made by small business are seen to be good.

As a politician I would like to change people's minds but I cannot. I have to deal with the way they are. It happens that most Canadians, and I think even the member, applauded the release from taxation of the small corporations. He says no. Fair enough. I would say many a small businessman this year was able to retire his debt at the bank, was able to buy a small piece of equipment, was able to keep an employee on staff or was able to expand. because I did not take money from him before he had money surplus to his immediate business needs. I have to say I do not know any better way in society to keep people employed than to keep employers solvent.

8:30 p.m.

Mr. Cooke: Mr. Chairman, I am looking for the section in the budget -- I do not have it at my fingertips -- in which the Treasurer introduced this. In the budget, and certainly in his post-budget press conference, one of the main rationales he used for the $250-million tax expenditure was the creation of 10,000 jobs in Ontario's economy. He used that in question period. He used it in --

Hon. F. S. Miller: I was given that figure.

Mr. Cooke: He might have been given that figure, but he used a figure of 10,000 for job creation --

Hon. F. S. Miller: The small business group gave me a figure of 25,000.

Mr. Cooke: Whatever the figure was, the minister used 10,000. Mr. Bulloch used 25,000. He has also used other incredible figures that the minister has challenged when they have not been to his advantage. The point was that 10,000 jobs were supposed to be created.

The point I made earlier in my opening statement was that it seems to me there should be an evaluation of the tax expenditure to determine whether the goal that was set has been achieved. The minister now is telling us that a few jobs may have been saved but that he has no idea whether the stated goal of creating 10,000 jobs was achieved.

At the same time, from January to October of this year we have had 3,025 business bankruptcies, many of which I believe were small businesses. We have probably lost in the neighbourhood of 15,000 to 20,000 jobs through those business bankruptcies. That is probably a conservative figure. Our argument at the time was that the $250-million tax expenditure would have been better used keeping and saving the jobs for those small businesses that were about to go bankrupt, primarily because of interest rate costs. We called for a small business interest assistance program.

The minister cannot justify or prove to me that the rationale in the Legislature for bringing in that tax expenditure has proved to be a good rationale and has achieved its goal. Does he plan on doing any kind of evaluation or any kind of a study to find out whether any jobs have been created or whether just a few jobs have been saved? I agree that saving jobs in today's economy is very important, but he did claim the tax expenditure would create 10,000 jobs.

Hon. F. S. Miller: Mr. Chairman, let me just read the section in my budget. I answered in question period, and I remember quite well answering, by saying, if I allowed for the fact that about $25,000 was needed in small business to create a job, I hoped about 10,000 jobs would be created. I then heard Mr. Bulloch saying I was underestimating it by about 15,000.

Here is what I said: "In order to improve the confidence of small business people, to give them the incentive, desire and resources to weather the economic storm, to improve productivity through investment and, most important, to continue to preserve and create jobs" -- I stress "to preserve and create jobs" -- "I am proposing to remove the corporate income tax on small businesses in Ontario."

I was asked then what my reasons were, and let me tell the member what my reasons were, and I hope he will appreciate that, whether I am right or wrong, my reasons for doing it are the same reasons I hope he would have if he were in power. I believe that is right. I do not know that is right. It is fundamental to my approach to government and the things I believe work that I did it. If he were in power, he would do those things that he believes are right and that he believes would help. It happens that we have different philosophies. It happens that I am in power and he is not. I did the things I believe in.

Mr. Cooke: Mr. Chairman, the only point I am making is that when a budget introduces a major tax expenditure, such as $250 million to small business, it does not seem to me to be an unreasonable request, if government operates in a sound business manner, that it would evaluate that expenditure. That is a lot of money, and they should evaluate to see whether the goals they set for that tax expenditure have been met.

I read the section in the budget just now. I remember from the briefing we got and from question period that jobs were to be created. I do not know whether the minister is going to continue this tax holiday in his next budget, but it seems to me that before he makes that decision he should present in his budget, as a budget paper or whatever, either the rationale for eliminating the tax holiday or the rationale for continuing it.

Hon. F. S. Miller: Mr. Chairman, in a year when we saw as many thousands of jobs disappear from the economy as we have seen or, in fact, in a year when we saw a number of jobs go up by 100,000 in the economy, one can set out in advance to prove whatever one wants to.

In the fundamental, final analysis, politicians do that which they believe in; they cannot necessarily quantify or substantiate. I can go back to my staff and ask for all the studies in the world. If somebody wanted to prove me right, he would, and you could hire somebody to prove me wrong. That does not shake my belief, because I have certain beliefs that are unshakeable and I am not about to change them.

Mr. T. P. Reid: Mr. Chairman, this is one of the weirdest economic discussions I have ever heard. Maybe we could get Mackenzie King's crystal ball. It might be just as helpful.

I had not intended to ask this question because of the time, but since the member for Windsor-Riverside (Mr. Cooke) has raised the question and the Treasurer's answer has been, "Well, I did what I bloody well wanted to do or believed in" -- which seems to be about as far as our economic policy goes in this province -- I just wonder what we are paying all the people for in the economic analysis and planning component of the ministry under the first vote and in the other programs, Treasury, economic policy and analysis and planning.

I remember being quite shocked when I asked the minister to table the studies his people had done for him on the effect of the retail sales tax, on the $250-million tax holiday and so on, to find that all these very bright people who are sitting around in his ministry drawing pretty reasonable salaries had not, presumably at the Treasurer's fiat, provided any of these background papers.

I find it incredible that the Treasurer should stand in his spot and say, "That doesn't really matter, because I did what I believe in and the economic analysis" -- which wasn't done apparently -- "wouldn't have meant anything to me, anyway." That sounds like left-wing economics, not the kind of responsible approach that the Treasurer has been noted for in bygone days.

Having said that, I have two questions I want to ask the Treasurer, because obviously there have been studies since we have seen the papers.

Where is the Treasurer at today in his suggestion of a payroll tax in regard to the Ontario hospital insurance plan? Everybody under the gallery is looking at the ceiling there.

Also, has he given any more thought -- if that is the proper word -- rather than rattling his sabres, about a provincial income tax?

Hon. F. S. Miller: Mr. Chairman, to answer the latter question first: I deferred that question to the Ontario Economic Council. I believe it is preparing a paper which I should have very shortly, well in advance of budget preparation.

To answer the other question on the payroll tax as opposed to OHIP premiums, I guess I would say I am remarkably unimpressed at the lack of response.

I listened to CFRB this morning, which happens to be my major economic source of information. Hansard had better add "he said with a smile," or I am in trouble.

Mr. Foulds: There are no descriptive phrases or stage directions in Hansard.

Hon. F. S. Miller: In any case, my staff have all just taken the fifth amendment and gone home after that.

8:40 p.m.

I heard CFRB discussing this very matter this morning. I assume the baby must have awakened early and the member did too.

Mr. T. P. Reid: No.

Hon. F. S. Miller: No, the baby did not wake up early?

Mr. T. P. Reid: No, I don't get my economic information from CFRB.

Hon. Miss Stephenson: Where do you get yours?

Mr. T. P. Reid: Out of the learned journals.

Hon. Miss Stephenson: I can imagine.

Hon. F. S. Miller: He consults with Mackenzie King, via his dog.

In any case, the fact remains that we have remarkably little response that I know of and if there has been morel have not heard about it. I, for one, am decrying the lack of response. I would dearly love some more before the time comes for a decision.

Mr. Martel: Mr. Chairman, I want to speak to the Treasurer about Sudbury and district and the fact that despite some 15 years of protestation by this party, there has been no attempt to diversify the economy. That area now is suffering the most massive unemployment in this country.

It is strange that the richest part of Ontario, the part of this province that has created so much wealth, also has the highest unemployment, with 28,000 or 29,000 people currently drawing unemployment insurance commission benefits.

It is fitting that Liberals and Tories, who for years at the federal and provincial levels allowed that situation to continue, simply throw their hands up in despair and say: "I am sorry. There is nothing we can do in the Sudbury basin." The federal Liberals have done nothing, and I will come to them in a moment.

The area has created massive wealth, which has been beneficial to the rest of this province. We have seen all that wealth leave the Sudbury area. We have seen nothing put back in its place. I suggest to the Treasurer that we had a warning of this in 1978. The government, because there was enough opposition, was forced to establish a select committee. That select committee made a number of recommendations, not one of which has been adopted -- from stockpiling on the short term to diversification such as mining equipment.

The government sat on its hands and did not do a thing. I should not say that. The government put a little money into 2001. We heard the Minister of Northern Affairs (Mr. Bernier), as he wore his white sweater the other day, gloat about the fact that he created 19 jobs out of that. I might suggest that when 2001 was in trouble, it was some of us who forced them to get a lawyer, because they did not want to, in order to clear it up.

I see the Treasurer leaving. Obviously he is not too interested in the Sudbury basin.

Although there are 28,000 unemployed people, we cannot get a change. The Minister of Natural Resources (Mr. Pope) is here, of course. When we talk about stockpiling, the answer is "Nyet" -- "nyet" from the provincial government, "nyet" from the federal government. Yet I recall when the Prime Minister of this country was none other than Lester B. Pearson. He represented Elliot Lake and when they were in serious trouble, Lester B. was able to convince them that they should stockpile in the short run because of the cost to Elliot Lake if nearly everyone were on unemployment insurance.

Now, when the unions approach the Minister of Natural Resources for Ontario with Falconbridge Nickel in tow and suggest that for $30 million they could employ everyone for a year, we get a "nyet" answer, "no". "But there is $4.5 million to $6 million in unemployment insurance and welfare benefits per week coming into Sudbury. There are all kinds of small businesses going down the tube, and we sit around with one finger in our ear and our brain in neutral. Pearson was able to stockpile and they were able to make money from it. Over the years we have stockpiled gold and they have made money out of it.

Of course, the honourable cabinet minister in Ottawa says: "Oh, we cannot do that. That would be a special endeavour for the Sudbury area; how could we do it for anyone else?" The same day she was saying that, the federal government announced a policy of $30 million in subsidies to build a ferry that would keep people in one of the ports in Nova Scotia employed. Yet they cannot stockpile nickel. One takes it out of the ground and refines it. It does not rust, it does not melt, it does not rot and it is the only short-term solution.

It is six months since the massive layoffs began. This government, outside of a few make-work projects, has done nothing. We have had three emergency debates here; every time all it has done is say, "Tom Davies is looking after it." They have neutralized the attack from Sudbury by saying, "Tom Davies is looking after it."

We are near the end of December and it has not done a thing. This government was prepared to sign an agreement to bail out Massey-Ferguson that could cost us $78 million. Why does it not stockpile for a year at Inco and Falconbridge? We are going to have to face the reality sooner or later that Russia and France both subsidize their nickel.

Mr. Shymko: He wants to nationalize Massey-Ferguson.

Mr. Martel: Where did that clown come from?

An hon. member: The KGB sent him.

Mr. Martel: Who let him loose? I think he is a double agent.

Mr. Foulds: He is an agent provocateur, no doubt about it.

Mr. Martel: Yes. He should go and sit somewhere so I can talk to the Treasurer and the Minister of Natural Resources, because he is not contributing a thing to this debate. I am speaking on behalf of 29,000 people who are unemployed.

Mr. Bradley: He is giving the position of the member for Sudbury (Mr. Gordon).

Mr. Martel: Is that right? He wanted to nationalize it. The member for Sudbury wants to nationalize both Falconbridge and Inco in one fell swoop.

Let me pick up from where I left off, if I can. In six months, we have done nothing. What is wrong with stockpiling? As I said, in Russia and in France, where it is state-owned or at least there is some intervention, they are dumping in Europe, according to the federal minister and, I suspect, my friend from the north. They get into the European Economic Community somehow. Every time I suggest to the Minister of Natural Resources that we should eliminate that section of the Mining Act -- I guess it is section 104 -- which says one can refine outside of --

Hon. F. S. Miller: Section 113.

Mr. Martel: Section 113? No, it has been changed. It is section 104, I believe. It says one has to refine here, contrary to what the Minister of Natural Resources said when we were talking about Cargill township. He got up and said stoutly: "We must refine near the source. We cannot take the phosphates out of Cargill and combine them with the sulphuric acid from Sudbury."

That is what the minister said. He said, "We have to produce at source." When I say to him, "Let us not allow section 104 for Inco and Falconbridge," he nearly goes out of his tree. I mean, he just goes crazy and says it cannot be done.

But it was none other than the minister, when we suggested combining the phosphates from Cargill township with the sulphuric acid from Sudbury to produce fertilizer, who said: "No, that is wrong. This minister and this government are committed to the policy of producing at source."

8:50 p.m.

When is the Treasurer going to have enough courage in respect to Falconbridge -- which has yet to refine a pound of nickel in Canada except during the war when it refined a little at Copper Cliff -- to follow his own advisers' recommendations, which said there is excess refining capacity in Canada and that we should be doing it in Canada?

That would create 1,000 jobs in Sudbury. That is what we are doing in Norway: we are creating at least 1,000 jobs in Norway refining the nickel from Falconbridge. The Minister of Natural Resources jumps up and says, "Ah, but the British government would not like it." He quoted Margaret Thatcher when he responded to it. So what? I do not give a damn whether or not the British government likes it. I am arguing for jobs for the people I represent, using the resources that are here.

The minister says we could not get into the European Economic Community. I ask the minister to tell me how the Soviets do it? How did they get into the European Economic Community? Following what the Soviets do, why could not Falconbridge do the same? Why could they not crack the European Economic Community?

I realize that there is a subsidy and that both France and the Soviet Union are underselling Inco right now. Are we better off paying $25 million to $30 million a month in unemployment insurance benefits and welfare, or would we be better off employing those people and keeping the small businesses intact in Sudbury, many of which are going out of business this very day?

There has been nothing, not a word, not a program except the program that has been run by us now, I guess, on at least six different occasions. The Ministry of Industry and Trade (Mr. Walker) went up to Sudbury last week with a great fanfare. The Minister of Health (Mr. Grossman) had been there before him, the member for Sudbury before that, and none other than the Premier (Mr. Davis) during the last election.

They said: "We are going to pump in $19 million or $20 million. We are going to create a centre for research for mining and forestry equipment." That is what the people of Sudbury thought, except it is really nothing but a showcase, a public relations job. That is really what it is going to be.

So on the whole front this government could respond to -- in terms of stockpiling in the short run to get 14,000 or 15,000 of the unemployed back to work, in terms of secondary industry or in terms of what happens to one-industry towns -- there has been nothing.

The Treasurer, in his former incarnation as Minister of Natural Resources, was the chairman of a committee to study one-industry towns. My friend the member for Rainy River (Mr. T. P. Reid) knows as well as I do that the special cabinet committee formed to look into one-industry towns did nothing. I do not think the committee ever met.

That committee was created at the height of the friction that came after 1978 and 1979, when we felt the first effects of massive unemployment. But there was no recommendation. The minister moved from Natural Resources into the Treasury portfolio, and he is doing about as much for Sudbury and area as the special committee he chaired did in 1979 and 1980, which was nothing.

What have we got? 19-job Gordon recycling a project that we are to spend $19 million over the next five years to build a building --

Hon. Miss Stephenson: I wonder why we have not thought about recycling you.

Mr. Martel: It is because they cannot get rid of me. They have tried. I say to the Minister of Education, there are 29,000 people unemployed. In the months of September and October alone, the separate school lost 95 children.

Hon. Miss Stephenson: Because they moved.

Mr. Martel: They had to, because there are no jobs. That is what I am talking about.

I ask the Treasurer, when I eventually sit down, to tell me what his government has done in terms of diversifying the economy? I do not want to hear about Tom Davies's committee. I want to know what the government is going to do. My friend the member for Nickel Belt (Mr. Laughren) and I put together a document with at least some proposals. One of them was on Cargill township.

It was interesting that when the Minister of Natural Resources screamed about processing near source, I sent across to him and to the member for Cochrane North (Mr. Piché) a statement by Mr. Topp from Sherritt Gordon, who says -- and I suggest the Treasurer might listen to this -- the company cannot get a guaranteed supply of sulphuric acid. That is what Sherritt Gordon says.

Everyone knows that Inco produces at only two thirds of its capacity, because Inco uses only two of its three machines to produce sulphuric acid and dumps the rest into the atmosphere. One might suggest to the government that they talk to Mr. Topp and tell him there is a permanent and guaranteed supply; that Sherritt Gordon does not have to worry about an adequate supply of sulphuric acid. All we have to do is ask Inco to use the third machine. But Inco over the years, and Canadian Industries Ltd. before it, refused to use the third machine, because they would glut the market with sulphuric acid.

The other interesting thing Topp said, though, was that they want to send some of the phosphate out of the province unprocessed. That is what he said in an interview in Northern Ontario Business.

When the Minister of Natural Resources plays his little game of saying processing has to be done near source, I think that if we could bring those two commodities together in northern Ontario we would have a product produced in northern Ontario that would create jobs. Whether more sulphuric acid went to Kapuskasing or whether the phosphate was extracted, refined and then brought to Sudbury to be put together with sulphuric acid to make fertilizer, no matter which way it went, one way or the other it would be beneficial to northern Ontario.

There was not a word, and when we raised these matters in the special debates, the Minister of Natural Resources did not attempt to respond. He just did a total rant.

We also picked out some of the things the government of Ontario picked up as its policy; for example, the utilization or the purchase or production of more mining equipment in Ontario and in northern Ontario. I listened to a speech by the Minister of Industry and Trade (Mr. Walker) this spring in which he said that Ontario's deficit in mining equipment this year is $169 million. Is the minister telling me that we should not be manufacturing mining equipment?

I know the fight that is going on between the federal government and the provincial government with respect to Jarvis Clark, but for about $4 million of investment, if the feds are not prepared to do it, we could create 225 jobs in the Sudbury basin. A year ago, when Duncan Allan was negotiating the possibility of this project with Inco and Noranda, this government was prepared to go it alone if the feds would not get involved. This government and Duncan Allan boasted, "The Ontario government will get into mining equipment on its own, whether the federal government is prepared to or not, and it will help the three partners, Noranda, Jarvis Clark and Inco, to establish that manufacturing facility in Sudbury, which will create 225 jobs."

That was a year ago. Now the present minister says, "We don't think we should go it alone, nor should we tip our hand as to whether we are going to go it alone," and in the meantime we have 29,000 people unemployed in Sudbury.

This government also talks about medical supplies and the fact that we should be manufacturing them here and purchasing from Canadians.

In Sudbury, if we were refining the precious metals and using platinum, as I understand some are -- and the Minister of Education (Miss Stephenson) can tell better than I what the instruments are made of -- nonetheless, we have the precious metals that would allow us to develop the capacity to produce medical equipment. When we ask the government if they are prepared to move, all they say is, "We think we should be buying more equipment in Canada." On the CBC not more than a week ago I heard this government saying we have to purchase more that is produced in Canada.

9 p.m.

The material is there with which to produce some of that and my colleague the member for Nickel Belt (Mr. Laughren) and I put it on our list of suggestions to the government. Six months later nothing had happened except the Minister of Industry and Trade making a big announcement -- it was the sixth time in this House -- as he flew to Sudbury to launch this great program that is going to create 19 jobs.

For $4 million we could have established or assisted in the establishment of a mining equipment company that would have created 225 jobs, according to the discussions I have had with Inco and according to the discussions I have had with Mr. Clark, who, when he was flying from Texas up to Sudbury, stopped in to see me here. For $4 million we could have 225 jobs, but we will blow our horn about this $19-million undertaking where you have to build a building and it is going to create 19 jobs over the next five years. For $4 million we could have started to diversify the Sudbury economy in a meaningful way.

This government should say to the federal government: "We don't give a damn if you are going to put your $2 million in. We are going it alone if necessary, because it is going to create 225 jobs." Again no response; nothing. And to every letter I write to the minister responsible he responds: "I cannot tip my hand. If I tell them I am going to put the $4 million in, then the federal government will back out."

I do not care if the federal government backs out. If we could create 225 jobs with a $4 million investment, what the hell are we waiting for? I say to the Minister of Natural Resources that I do not care any longer about section 104. He is the minister. He said: "We refine near source. That is this government's policy." Why does he not want to come down hard on Falconbridge and say, "No more; you are going to start to refine some of that nickel here"?

Don't give us all the poppycock about refining it in Norway and "We cannot get into the European common market." The Russians are getting in. They have got to. We argued against that when the exemption was further extended. The minister was on the select committee, I believe.

Mr. Laughren: We thought there was hope for you, Alan.

Mr. Martel: But there is none. There is just nothing. They will not stockpile; they will not insist on refining in this country. Their own studies, for God's sake, indicate that there should be a refining capacity for precious metals in this country. What do we do? We send all the precious metals out of the Sudbury basin to be refined elsewhere and we wonder why we do not have any jobs in the Sudbury basin.

I look under the gallery and see my friend Peter Honey sitting there, who did the original report, sometimes termed the Honey report, which led to the establishment of the select committee looking into economic nationalism. We had 21 reports from the select committee and the government has not acted on any of it. None of it. Oh yes, I think the Premier went further than the select committee was prepared to go. When the committee said 20 per cent of the board of directors had to be Canadian, the Premier came in and said, "We will make it 50." We had difficulty getting the Conservative members to insist on 50. We got 20. The Premier scooped them; he came in with 50.

Nonetheless, of the 21 reports that were presented by that select committee this government has not responded to any in terms of the resource sector. They have not responded to any in terms of any other sector. We studied everything from soup to nuts. Maybe it is because of what one of the former Treasurers said. In a study some years ago, Darcy McKeough said in a report to this Legislature, "It will be 20 years before we even start to get secondary industry in northern Ontario." That is what the Duke said, and maybe he was right. The people over there think they can live on the wish that somebody will go to the north and establish secondary industry there.

There have been areas such as Timmins where we have extracted the resources, and no one has bothered to go there to manufacture the resources from the Timmins basin. The only thing that saved Timmins was the Kidd Copper discovery. If it had not been for that mine, Timmins would be a large ghost town. I am sure the minister agrees. Now Sudbury is faced with the same problems. What does the government do? It waves its wishing wand and wishes we could get some secondary industry. It will not take the initiative to try to foster the orderly development or the utilization of those resources.

I guess the most bitter pill for the Tories to swallow was the report prepared by the chamber of commerce in Sudbury three or four years ago, called A Profile in Failure. It was responding to yet another study document by the government of Ontario. Let me just paraphrase one of the paragraphs. It said, "The southern establishment is totally devoid of any concept of the north." It ended up by saying the best thing we could do with the northeastern Ontario regional strategy report would be to file it away and let it gather dust in some receptacle. That is what the future holds.

I had hope for the new Minister of Natural Resources. He seemed to be gung-ho on getting rid of exemptions, diversifying and bringing secondary industry to the north. Obviously either he has given in under the pressure or he has lost the fight. He has not even been able to get a food terminal in Timmins yet, despite having promised that in 1977. The only terminal he has been able to get there is a liquor terminal.

What does the Treasurer intend to do? Can he not consider the possibility of some stockpiling? The Treasurer should talk to his colleague the Minister of Natural Resources, because even the mining companies are saying in the short run the solution lies in stockpiling. Then we can get our people back to work, the small businesses will not go down the tube, and we can look seriously at an orderly economic development utilizing the resources that are extracted from the north.

The government's wishing wand is not going to entice secondary industry to the north. There will have to be some government involvement. I am not talking about ownership, but about government involvement. I challenge the Treasurer to say tonight that this government is prepared to go it alone on the mining equipment. For $4 million it could get at least 12 times the number of jobs as that silly research centre will provide. It is not a research centre at all. It is just a place for demonstrating and showing off mining and other equipment.

The word is the minister is going to fund some research development. I want to know how much research development he is going to fund when he pays a staff of 19 and builds a building over a five-year period. What money is left for research? He might get more serious and give $4 million to Clark, who has been successful with two other companies, one in Canada and one in the United States. He would be far more successful in funding him to the tune of $4 million, guaranteeing it now so that we could get on with ending the massive unemployment.

In concluding, I might just say that if you went along with forcing them to refine here, not only would you have the people in the Sudbury basin who are employed in mining working, but you would have people in the construction industry employed because there are at least 5,000 of those men unemployed. We need some construction. It might be a new refinery for Falconbridge, and certainly Inco needs a new smelter. If we had production of mining equipment, we might get some people in the construction industry back earning rather than on unemployment insurance, which is where none want to be.

9:10 p.m.

The Deputy Chairman: I thank the member. The member for Prescott-Russell.

Mr. Martel: Is he not going to respond? Is that too much to expect?

Hon. F. S. Miller: No, that's not too much to expect. Mr. Chairman, I have been trying to respond after each speaker tonight.

I appreciate the problems of Sudbury. There is no city in the province with graver problems. That is understood by this government. The assumption that we are not concerned does not ring true at all. The fact that 19 or 29 jobs are being created in a resource centre does not mean that is the sum total of our interest.

I had hoped you would not think it was not important to create that centre or we should not be starting to go in that direction. I would hope you understand that we have not given up our attempts to get a mining machinery company going with Noranda and Inco. You also have to understand that when those companies are fighting for survival, it is very difficult to talk them into measures which a year or so before looked quite easy to accept.

When one gets to the question of refining, there is a whole set of problems and you know that. You ask companies to invest in new equipment for processing, and I have always been one who believed you should process to the maximum in the country, when they have the investment already in place and the energy costs are lower in some cases. There is a whole set of factors involved, not the least of which is that there are other sources for the materials for the existing smelters or refineries.

You and I know we can lose as many or more jobs in our own mines -- seven to eight times as many, as a matter of fact -- as we can create in the attempt to bring those refinery operations here. It is easy to paint simple solutions. There are none. We very much want to simply keep working with the problems of the Sudbury area hoping that both companies will -- and I believe they will -- survive the present downturn and we will see a very modest improvement.

I would hope we will continue to work towards alternatives to industry up there and see some growth in the secondary industry and mining machinery industries; none of which, by the way, will create the numbers of jobs we are talking about in the mines themselves, but all of which would help to stabilize the area.

Mr. Boudria: Mr. Chairman, thank you very much.

Il me fait grand plaisir de participer avec le Trésorier dans une discussion sur ces prévisions budgétaires et je suis très conscient des problèmes que nous avons dans l'économie, et plus spécialement dans l'est de l'Ontario.

Je suis persuadé que le Trésorier ayant vu lui-même à la dernière campagne électorale de Prescott-Russell, lors de l'assemblée des investitures de mon prédécesseur -- je crois que c'était lui qui était l'orateur invité -- s'il venait aujourd'hui dans le même comté je pense qu'il verrait, M. le Trésorier, que la situation économique est loin d'être aussi rose.

As a matter of fact, this government told us in the last election that because of some of things we were saying we were just doom and gloom people. Our leader was labelled Dr. No, Dr. Negative and all of those other things that you have accused us of. Looking back upon it less than two years after the election, it is quite obvious that not only were things as bad as we said they were, but they were far worse in every respect. I am sure you will have to admit to that, Mr. Treasurer.

in our area of eastern Ontario especially there is great concern. The member for Sudbury East (Mr. Martel) mentioned the problems they have in the north. The north is not the only area that is experiencing its share of trouble.

I tried some time ago to bring forward in this Legislature an emergency debate on the economy of eastern Ontario. The Treasurer will perhaps recall that day, a day on which no government member from eastern Ontario, with the exception of the Speaker of course, supported my motion for an emergency debate.

The Treasurer will recall that at that time I expressed grave concern about the situation in the agricultural sector in eastern Ontario. The member for Huron-Middlesex (Mr. Riddell) has viewed agriculture in my area and he is well aware of the circumstances there. I hope the minister will familiarize himself with some of the problems we have.

The fact that the number of farms in eastern Ontario has decreased by about 16 per cent over the last 10 years while at the same time decreasing by only 12 per cent on a province-wide basis, is of great concern to me. The fact that the amount of acreage in Ontario has decreased by about 6.5 per cent is a big concern, but the fact that in eastern Ontario in the same period there is 13 per cent less farm land is certainly of great concern.

It should be noted as well that the government of this province is quick to point out that Quebec is the economic disaster of this country. It is interesting to note that from January to October of 1982, Quebec had 123 farm bankruptcies and in the same period we had 145. For us to call them an economic disaster and to do even worse than they are really speaks to the economic situation we find ourselves in in Ontario, particularly in the eastern part of our province.

I would like to discuss the unemployment and welfare statistics in eastern Ontario, but before doing that I would like to reiterate some of the housing starts we have had in our area. I will use one example. The town of Hawkesbury in 1979 had 56 housing starts and in 1980 only 27. In 1981 it had 15 and in 1982 it had seven housing starts. The economic decline of that area is surely quite apparent from listening to statistics like that.

Unemployment in eastern Ontario is a very large concern. That is not only in my area where, in the town of Hawkesbury, unemployment increased by 95 per cent from October 1981 to October 1982. It is also quite evident in some other areas of eastern Ontario, for instance the area of Bancroft, where unemployment has increased 96.3 per cent over one year. In Pembroke, it has increased 32 per cent. In Picton, it has increased 70.9 per cent. Unemployment in the area of Peterborough has increased by 39.1 per cent.

All this says that the economy of the eastern part of our province is in a serious situation and I would hope the Treasurer, whom I know is listening attentively to what I have to say, will be able to respond to some of those problems shortly once he finishes his discussion with the member for Renfrew South (Mr. Yakabuski).

The number of welfare cases in eastern Ontario is also a big concern. He no doubt will recall that I expressed to him that the Brockville area has had an increase of 43 per cent in the welfare rolls over one year. For Hawkesbury, it is 26 per cent, Cornwall 27 per cent and 22 per cent in Bancroft.

Those welfare rolls do not take into account the very recent unemployment phenomenon which has plagued our area. I would like to know from the Treasurer if there are any plans by his government to come to terms with these very grave economic problems that we have in eastern Ontario.

9:20 p.m.

The Treasurer will no doubt recall the very recent closure of the Canadian International Paper Co. plant in Hawkesbury in which 431 people lost their jobs in a small town of 10,000. Just to show the impact of that, 15 per cent of all the workers in that town lost their jobs on December 1. Considering the area already had a very high unemployment rate, this situation is a catastrophe. It is very serious. No doubt the people of Hawkesbury will somehow pull through. They always have in the past and they will again, but in order for them to do that there is going to have to be direct action on the part of government.

Perhaps I should take a moment and say that I am very grateful for the assistance that was given by the Minister of Industry and Trade during our deliberations in the fall when he made a very serious attempt to find methods of keeping that plant open, but it is now closed and I expect it will remain closed for some time. I only hope whatever efforts were made by the Ministry of Industry and Trade and the Treasury in the fall, and the very good report that was prepared by Mr. Douglas Miliken who worked for the ministry, will not just lie there and gather dust. I hope the Treasurer will follow that report through and really put a special effort into ensuring the CIP plant or another plant using the same facilities will be open some day.

Perhaps I will just take a minute and read a very short letter that was sent to me by some of the businessmen in Hawkesbury relating to that very grave economic condition.

The letter is addressed to me and reads as follows:

"Dear Sir:

"We, as long established retailers in Hawkesbury, find the closing of the CIP plant a disaster and a traumatic experience for the employees and all commercial establishment operators.

"The some 440 employees who will be losing their jobs by December 2, 1982, represent some 15 per cent of the Hawkesbury industrial work force. These layoffs mean there would be an amount of approximately $8 million a year less contributed to the Hawkesbury economy.

"We realize that unemployment benefits for the first year and welfare payments in the future, will soften the blow." I should add that the size of welfare payments is so low that it really does not soften the blow much. "Although Hawkesbury and district is one of the zones considered a depressed area where the textiles, clothing and footwear industries are concerned, the program does not include the pulp and paper industry.

"In view of the hardship which these employees in the Hawkesbury economy must endure as a result of this layoff, we strongly urge you as our representative to implement a program to either assist the reopening of this mill or establish another industry to employ the jobless.

"Thanking you in advance for any amount of effort made in this regard which would be more than appreciated by every voter in your constituency.

"Yours respectfully,"

It is signed by one of the retailers in the area of Hawkesbury. I have received many letters like that. I hope the Treasurer and the government will find some very concrete measures to assist the economy of eastern Ontario.

I would like to talk for a minute about the buy-Canadian policy of the government. I do not know what impact the Treasurer has on those procurement policies, but my hope is he does have some impact there and that he succeeds in changing some of the procurement policies of the government.

I was listening to you earlier this evening when, I think in reply to the member for Windsor-Riverside (Mr. Cooke), you were talking about buying back our economy. I would like to suggest that one of the first ways you could do that is to start by buying Canadian.

The Treasurer will recall that last year I pointed out in this Legislature that his colleague the Minister of Transportation and Communication (Mr. Snow) had placed an advertisement in the newspaper in Victoria county to buy a Yamaha snowmobile. For the government of this province to do that is absolutely disgraceful.

GO Transit recently bought a computer for over $200,000. They bought it in the United States. At the same time as this government is injecting money in our high-tech centre to try to develop our computer industry in this province, those two things are hard to rationalize. It is very difficult for us to see why those things are going on in this province.

Last year, the Ministry of Government Services was using one of those garage trucks which are used for lifting pallets and those kinds of things. It was a Toyota. We took a picture of it and brought it into this House. We saw an employee, again I think of Government Services, working outside on the lawn placing wood chips around some gardening work, wood chips which came from North Carolina. You will recall that I brought that to the attention of this House as well.

The minister will also remember that the government stationery supplies contain government of Ontario pens which are made in the United States. It says so right on the barrel of the pen. If you have one on you, you can look at it. It says, "Sheaffer. Made in USA." Those kinds of procurement policies are really questionable in these very difficult economic times. I would hope that the government would now find some method of correcting that.

No doubt you have seen the display case in the lobby which was installed by the Minister of Government Services (Mr. Wiseman), containing a choice of items bearing the coat of arms of Ontario, which we can buy as Christmas gifts. I put a question on the Order Paper recently. It is quite evident that a large number of government of Ontario articles and Ontario souvenirs are not even made in this country. That is truly unbelievable.

It is very difficult to understand why the province of Ontario tie is made in England. Is that not incredible? The Minister of Government Services has several mills right in his riding. It is of grave concern to all of us with the high unemployment that is going on. I hope the minister will respond to some of those concerns and will change some of the purchasing policies of the government.

Mr. Shymko: Where was your suit made? How about your shoes? Were they made in Taiwan?

Mr. Boudria: They were not made in Russia, you will be glad to know.

I hope the Treasurer will see to it that the procurement policies of the government are changed so that we do buy more Canadian-made goods. Perhaps one way to encourage that would be to increase the government's preferential rate for buying Canadian, which I understand is something like 10 per cent. That is clearly insufficient, given the difficult economic conditions we are in.

I hope the Treasurer will respond to some of those points, especially about the economy of eastern of Ontario and the procurement policies of his government, with a view to creating more jobs in this province.

9:30 p.m.

Mr. Grande: Can you read this? Read it out loud.

Hon. F. S. Miller: M. le Président, voyant que mon collègue le député de Prescott-Russell a commencé ses remarques en français, je crois que je vais faire la même chose.

Comme vous le savez bien, le rapport qui a été fait par M. Milliken décrivait les problèmes de CIP Hawkesbury et il est tout à fait possible qu'il serait très difficile d'assurer l'avenir de ce moulin parce que les produits qui sont fabriqués là-bas sont très spécialisés. Ce n'est pas une compagnie de pâte et papier, c'est une compagnie de pâte seulement et la pâte qu'on fabrique là-bas est une pâte spéciale et malheureusement le marché mondial diminue chaque année et nous avons peur que les besoins mondiaux ne soient pas aussi grands que la production.

Vous avez dit que les problèmes de l'économie de l'est de l'Ontario sont assez graves, mais en même temps, pendant la dernière élection on ne prévoyait -- est-ce que c'est correct comme ça?

Mr. Boudria: Nous on savait la vérité.

Hon. F. S. Miller: Les prévisions faites par le parti Progressiste conservateur sont toujours justes. Malheureusement, seulement un de mes députés me comprend.

Mais ce gouvernement a toujours les problèmes pour tous les secteurs de l'économie privée et tous les partis de la province et en tant que gouvernement -- est-ce que c'est correct?

You have to correct my French.

Mr. Boudria: Continuez, c'est excellent.

Hon. F. S. Miller: He went back into English after a while. Maybe I can now, too. Obviously, the predictions made during the last election campaign were based upon a healthier estimate of the economy in total.

Mr. Boudria: They were based on the election campaign.

Hon. F. S. Miller: No, they were not. They were based on the predictions of the day.

We are taking action through the Eastern Ontario Development Corp., through the Department of Regional Industrial Expansion, through our attempts to work with the federal government, through our attempts to maintain the member's industry which had represented 15 per cent of the people in Hawkesbury. For example I even sent a copy of that report to Mr. Parizeau pointing out how important it was to his province and how important it was for us all to work together to save the jobs in Lachute -- is that right? -- in the supply of the wood furnished to that plant. And we are going to do our best.

We recognize, too, that agriculture is a major concern in eastern Ontario. I cannot think of a riding in eastern Ontario that has had more money spent on major drains or on works to improve the overall flows of waters and to provide better agricultural facilities than that of the member.

I must say that was before his time. I spent some time as the Minister of Natural Resources going over the highways and byways of his riding looking at every gully, every place where water could accumulate, every place where it could be drained. I worked to make sure we did that, all the while knowing that at the same time my colleague the Minister of Agriculture and Food was wondering how the heck to sell the stuff that was being produced in the rest of the province. That is a major problem, my colleague from down around Huron would agree.

We had these conflicting desires, first, to improve the numbers of acres of productive agricultural land in the province, and second, to make those who were already on them survive. I am not sure they are always mutually compatable objectives. In any case, I assure him we are concerned and we are doing our best.

Mr. Boudria: I notice the minister did not respond to one thing I raised, as to whether he was planning anything concrete to assist the whole of eastern Ontario. I notice some of the programs he announced over the last month were specifically destined for areas such as Brantford, but none for Hawkesbury. Is that because the Unemployment Insurance Commission benefits have not run out? Is that the idea? Will there be something forthcoming in the unfortunate eventuality that should happen?

Finally, there is one thing I did not think of raising earlier but perhaps the minister could respond to it as well -- it will be my final question. As the minister will know, the eastern Ontario development agreement is very low in funds. Are there any plans between himself and the federal government to add more funds in that area? It is of concern to us, as there seem to be very few, if any, funds left under most of the programs of the eastern Ontario development agreement. I do not even know if any of them do have funds left. Most of them have pretty well dried up.

The agricultural part of the agreement is of the greatest concern. It is completely out of money. There are still, I think, a couple of years left in the agreement and farmers in our area are no longer getting the one-third grant they were getting under that agreement. Now they are only getting the one third from the province; they are not getting the federal share. I would like the minister to explain whether there has been any attempt to get more money out of the federal government to add to that agreement as well.

Hon. F. S. Miller: First, in the terms and conditions of the Canada-Ontario employment development program, which is a joint federal- provincial $200-million program, the criteria for eligibility for employment are set by the federal government and relate only to those people who have exhausted UIC benefits.

On the second question, I fought long and hard, not only with the Liberal government but with my own colleagues in Ottawa in the fall of 1979 when we were trying to sign the agreement, to reinstate the one-third federal share in some of those major trades, without success.

Mr. McGuigan: Mr. Chairman, I am pleased to take part in this Treasury debate. I am particularly glad to hear the minister say he is going to co-operate with the federal people because, as other people have expressed on this side of the House, it has been very frustrating over the last number of years when we come here with what we think is a good idea that would be of benefit to the economy and we offer it in a serious vein. The answer, of course, always is, "It cannot be done because of some shortcoming of the federal government."

I think this government has realized for some months that we are in a very serious situation. One hesitates to call it a depression; nevertheless there is a feeling that perhaps we are moving into that.

The part that scares me, as I go about my riding and talk to businessmen -- and businessmen come to me on occasion -- is that there are instances when one says: "This business is certainly in good shape, to all outward appearances. The buildings are well-painted, the yards are properly kept. It appears to be a going concern." Yet the proprietor will say, "Can you tell me where I can get some money?"

I say: "Of course, if you want to expand and employ more people, you can apply to the Board of Industrial Leadership and Development people and they will look at it on an individual basis, or you might apply to your bank for a development bond. There is money available for worthy causes." He replies: "Yes, that is what I did on my last go-round, but I need money now to hang on. I need money to keep my payroll going."

In other words, these businessmen are saying they are losing money and they are very close to bankruptcy a few months down the road. This is happening to business people I visit, and I have farmers coming to me, people who look from the outside as if they are prosperous and do not have a worry in the world. It worries me because, in a riding such as mine, agriculture and the associated businesses around it seem to me to be the engine for a great deal of the economic activity in our riding and in surrounding ridings. Yet I know these people are not going to be doing anything in the way of capital purchases in the next few months or maybe for the next few years.

I am glad to hear the Treasurer is now co-operating with Ottawa. I think he realized far too late that we are going down that slippery road. It is such a shame to us when two years ago we and our leader offered economic plans which we genuinely believed would have saved us, but which were set aside.

9:40 p.m.

I want to say a word or two about some positive things. I want to thank the minister for adopting one of my pet offers -- one I made to him on two or three occasions. That was to take the sales tax off vehicles that are powered by both gasoline and natural gas. While we have taken only tentative steps in that direction there are a good many people in the energy business telling us that is probably the fuel of the future a number of years down the road. I know a great many other alternatives were offered but because of our huge supplies of natural gas in Canada, and the relative ease with which it can be converted into a transportation fuel, one would think that was the way to go. I want to thank the minister for having made that first move.

I want to thank him too for a Board of Industrial Leadership and Development grant. I know it is not very common for the government to receive accolades from this side of the House. In this case, it was a BILD grant given to the tomato processors in my county and the adjoining county, which is going to result in the production of 2,000 or 3,000 acres of tomatoes this coming year, a crop on which most farmers will make some money. I want to thank him for that.

I would like to explain something to the members on my left. I hear so many times about tomatoes and peaches being the solution to all our problems in the agricultural area and that we should be growing a great many more tomatoes -- and we should. But I visited a tomato processing plant in September which was in full run. They were receiving tomatoes harvested and handled by machine. It was done very efficiently. It was a small plant in Kent county near Tilbury. It was the Hunt tomato people to be exact. While I watched this very efficient operation they had, I looked up the spur railway track and on that track were three carloads of imported tomato paste.

I might explain that these tomatoes are produced under an aseptic condition. This means they are sterilized. They are pumped into the tank cars just like gasoline or any other commodity carried in tank cars. The tank cars are sterilized. They will last almost indefinitely within that tank car. I was curious and I asked why they were receiving tomatoes on their spur line when there were three or four cars of imported tomato paste. I pointed out, which was known by anyone growing tomatoes in southwestern Ontario, that we only have a harvest season of about seven weeks, whereas our competitors in California, Mexico, Spain and Italy have a harvest season of 17 weeks to 20 weeks.

If we were to gear up to make all the paste we require in Canada in the seven weeks, we would have to have a great many more facilities -- facilities that would lie idle the rest of the year. That is exactly what we are doing with the BILD grant. We are enlarging those facilities so that in the short season we have, we can receive more tomatoes.

It is often pointed out that we should be canning more peaches in Ontario and Canada, and we should. But the reason we are not canning them is because we do not have them. Those are policies of this government in many respects.

Mr. G. I. Miller: How many years have they been the government?

Mr. McGuigan: Some 40 years.

The Niagara Peninsula is the safest and best peach land we have in Canada; indeed, it is some of the best in North America. It is an even safer place to grow peaches than Georgia. The only place that is any better is the state of California.

Then we see that land being gobbled up and used for other purposes. We see land in other parts of Ontario that is good peach land -- -and I am speaking of land in Kent county, Essex county --

Mr. G. I. Miller: Norfolk?

Mr. McGuigan: And Norfolk to a lesser extent, climate-wise.

These lands are disappearing for other reasons, one of them being the lack of crop insurance for peach trees.

This year, because of political pressure, the government has agreed to a fruit-tree crop insurance program in eastern Ontario to cover apples, but because it has not had the political pressure to do so in southwestern Ontario it has neglected to come up with a peach-tree insurance plan. There is a lot of land in southwestern Ontario capable of growing these trees, but, in the face of all the economic uncertainties, the high cost of money, the risks involved in growing that crop -- and it is a risky crop -- unless the government is willing to share that risk, the growers are not going to grow peaches.

The problem is structural in that it is risky to grow peaches in Ontario, and this government has done very little to help that program. Its failure to act in that situation is similar to its failure to act in so many other areas. It is one of the reasons the government has survived for some 40 years. It is very easy to sit back and watch things unfold as they do in the free enterprise, natural system and if there are a few casualties, not to worry about it because they will disappear very shortly and will not be much trouble to the government.

One of those groups is farmers who shipped their livestock to receivers in the last several months and saw those livestock disappear, in some cases at a cost of $60,000 to $100,000 a farmer. There was even one in Essex county who lost $160,000 because this government failed to provide a proper insurance or guarantee that dealers would pay their debts.

This government's politics are pretty simple: the government got away with it all those years. It made very few people mad, and if there are a few casualties, people who lost their herds and farms, well, what of it; they will soon disappear.

The same has been true in the grain trade. Because of a lack of proper safeguards in the economic system, a number of farmers lost their grain crops. It is only now the government is moving, very belatedly, to add an amendment to the Grain Elevator Storage Act. Even so, the amendment the minister proposes will not take care of cases of fraud, and fraud is the most frequent cause of the losses.

The government has taken a hands-off attitude with the chain stores. In spite of almost $500,000 that was spent on a royal commission into the discounting of food products, it has failed to implement even the very modest recommendations of that royal commission.

Following a very large crop of fruits and one of the largest crops in history of potatoes, onions and other staple winter vegetables in this province, for which the growers are receiving disastrous prices, we find that when we go to buy these in the chain stores, we are having to pay a pretty healthy price.

9:50 p.m.

I can give an example of the commodity I grow, which I am therefore more familiar with. A three-pound bag of apples is 80 cents at wholesale price delivered to the chain store. It is sold within about two or three days, because that is how frequent the deliveries are. It is paid for in cash at the counter, and that bag of apples will cost you $1.60, which is a 100 per cent markup.

One of the consequences of this is that a number of people are opening up bulk food stores to try to get away from the high cost of packaging. But it is not the high cost of packaging that is giving us expensive food at the retail level and cheap food at the farm gate. The cost of packaging a three-pound bag of apples, depending on the situation, will run 10 to 12 cents, and there are some positive things in it, because a greater proportion of the crop is utilized. If you put those same apples on bulk display and ask people to pick them out themselves and sort over them, you do have a certain percentage of those that are bruised and lost in the process. It is not the cost of the package; it is the cost of the system.

We are going full circle today, moving back to the bulk food system we had 40 years ago where you went and scooped out your own peanut butter or your own crackers or whatever it was, put it in your own container at the corner store and took it home. People have criticized that system for its lack of sanitation. We are going full circle from the packaging system of the last few years back to bulk. It is not because of the cost of packaging; it is because of the cost of handling through the chain store system, and the minister has not lifted a finger to make any changes in that system.

I was very happy to hear the Treasurer say that the tech centres were not really research centres, they were facilitating centres. If you stop and think about it, no one ordered Henry Ford to make the Model T. Henry Ford decided in his own mind and on his own time to do a lot of this work. He was working, I think, for Detroit Edison company at the time. He decided on his own to build an automobile in his own workshop, and I think the minister will agree with me that most inventions come in that manner.

If you look at the great advances that have been made in agricultural machinery -- and machinery people will use this figure -- some 95 per cent of the advances were made by farmers themselves. It was the farmer who was bending down to gather stalks of grain and tying them into a sheaf whose back complained, and he decided there had to be a better way. People of that ilk developed the reaper, the binder and finally the combine and so on.

Most of the improvements have been made by farmers themselves because of necessity and because, working at their particular level, they see where these improvements can be made. The greatest impediment to those people in the past has been the lack of a proper evaluation, the need for capital to refine what often are crude ideas and develop them into something that can be marketed.

I hope this farm technology centre in Chatham will turn out to be just that, but I am a little disappointed, as is a constituent of mine. I just want to read his letter to the Minister of Industry and Trade. He says:

"The technology centre for Chatham still concerns me, Gord. It relates to farm machinery. I am particularly concerned that, from the information I have received, industry input or representation thus far has been almost nil. In particular I note that industry is not represented on the steering committee except at dealer level. I was really taken aback when I learned no other member of the Ontario Wholesale Farm Equipment Association had ever been consulted by your hired consultants."

This letter is from Paul K. Turner, who is president of the Turnco Corp., a manufacturer and distributor of farm equipment based in Blenheim, although that part of their operation is now based in Woodstock. This man is a very perceptive and knowledgeable person in the field of farm equipment.

He points out that the wholesale people are not represented on that steering committee. I realize the steering committee is not necessarily the final committee that operates the tech centre, although in usual practice I think most of them convert over to the permanent body.

My complaint with the government is the fact that they have allowed matters to drift in Ontario for far too long. They have hidden behind the excuse that, "We leave all of that to the federal people; they are the interventionists and we are going to take a hands-off policy."

Mr. Bradley: Except when there is credit to be got.

Mr. McGuigan: I agree.

The Treasurer knows very well we are in deep trouble, otherwise he would not be as conciliatory and co-operative as he is. He must bear some of the blame for that trouble.

I was not surprised, but I was disappointed in an instance that I am going to mention. Three years ago, I was asked by a small automotive parts manufacturer in my riding who had the opportunity to bid on all the air-conditioning compressors that were going to be required by American Motors Inc.

This was part of that federal deal whereby we bought so many billion dollars' worth of F-18 fighter planes in the United States and, as an offset to that, the United States would buy certain components here in Ontario provided they were competitive with those in the United States.

The reason they called me in for some assistance on this matter was that they were 15 cents too high on their bid for the major casting and block that was used in the compressors. I do not know what the cost of that block would be, but looking at it, I would assume that a few dollars -- maybe $5, $6 or $10 -- would be the finished cost, because a great deal of finishing work had to be done on it. Yet their costs were 15 cents too high and they were looking for a $2-million Ontario Development Corp. grant which, in their minds, would bring the cost down by 15 cents.

We called the ODC people in and they investigated it. They would only give $250,000 when $2 million was required, and this meant the end of the project.

I guess it was my naïve state of mind as a farmer and with my background of working in the farm market with marketing boards and so on that made me say to him, "Why can you not talk to your people in the factory to see what contribution they could make to the 15-cent reduction in price that is needed on this particular piece of material to obtain the contract?"

He said: "I will not even ask them. I will not bring the subject up." That is all he said. I think what he was telling me was that labour relations were such that you could not even discuss such matters.

It seems to me the Ontario government must share some of the blame for that situation. The government is not trying to be innovative or to bring in new systems of labour relations, but is standing back and saying: "We have the Labour Relations Act and we have our conciliators. We will use the police to keep the factories open during the strike, and we are going to take a very benign attitude towards the whole affair." That factory today missed a contract which I suppose it would be happy to have.

10 p.m.

We hear a great deal about Japan. I want to read a small article which I am sure my friends on the left might object to at first, but I think if they stay with me to the conclusion, they will have a different view. This is a study that was done by Ken MacDonald -- I am looking for the name here -- and a chap by the name of Harbour, who is a consultant to the automotive industry. He unveiled a report at Stanford University for Economic Policy Research.

"Harbour told a conference on public policy issues in the automobile industry financed, by Joseph Koret and the Koret Foundation, that 'the biggest problem is not automation or robotics, but co-operative efforts with labour and suppliers to boost output, cut inventories and, most important of all, improve quality.

"'With a co-operative approach, Japanese auto makers now seek to boost productivity 10 per cent a year. Actual gains range from 13 per cent at Toyota and 14 per cent at Mitsubishi to 24 per cent at Toyo Kogyo. The Japanese are making us look like two-year-olds in how we manage plants. They are stomping us into the ground," he said.

"'Toyota plants keep an inventory ranging from two hours' to two days' supply, but US manufacturers regard 10 days as a minimum and have as much as $8 billion tied up in the parts pipelines.

"'Nearly a third of new US auto factory space is devoted to inventory and parts storage which is practically nonexistent in Japan,' he said.

"'If the US auto industry survives,' Harbour said, 'it will recentralize in the Midwest in order to shorten lines between suppliers and manufacturers. GM's decision to cancel or curtail expansion in Kansas City and Baltimore points in this direction.

"'Shipping parts for assembly in Fremont, California,' Harbour said, 'costs $250 per car with 14 days' delivery time to boot. Meanwhile, small cars assembled in Michigan now can be shipped anywhere in the US for less than $200.'"

Then he says, "'Where GM and Ford are run by finance people, in Japan the plant managers are in charge and no finance men are allowed in the plants.'" I know this would please our friends to the left. "'Toyota is debt-free and clears at least $500 average profit per car sold. The company made at least $1.7 billion in 1981.'"

Then he says, "'Where US auto workers average 45 minutes per hour on the job with machine uptime of less than 60 per cent, the Japanese average 58 minutes of actual work per hour with machine uptime exceeding 80 per cent.

'"Unauthorized absences average eight per cent in the US and two per cent in Japan. Relief time averages 10 per cent in the US and five per cent in Japan.

'"Where US manufacturers follow a tag system of relief, with one worker filling in several positions, the Japanese managers shut down entire manufacturing lines for relief time and build bigger bathrooms. The main effect of these differences shows up in product quality,' Harbour said.

It goes on about a good many other items: "'The Japanese are not geniuses. They have done simple things we won't even look at. Instead of building lots of wooden and cardboard crates for shipping parts, for example, they use "just-in-time manufacturing" with extraordinarily fast turnaround time. Parts containers are designed with this in mind.'"

He goes on to say that it is not the workers. There is a $1,700 difference between comparable cars; a car made in Japan costs $1,700 less than one made in the United States. Only about $400 of that can be attributed to labour. The rest of it is mismanagement. A good deal of that mismanagement is the distrust and confrontation system we have developed within our factories.

Perhaps I could just give the Treasurer an example from my own business. I know he is a small businessman who probably will understand this.

In packing fruits and vegetables, which has been my business most of my life, we operated at a time with 40-pound bushel crates. All the work was done lifting these crates from person to person or from little cart to little cart. Then we came along to using hydraulic lift trucks. My people shied away from them at first. Rather than saying to them, "Well, you have to do it this way," and rather than fire this crew and bring in another crew, I simply brought the equipment in and left it with the people. Within a few weeks they were using it, and it became their idea and not my idea.

But in this industrial system of ours we have people coming out of management schools with their stopwatches and their computers. They go into these factories, having had no experience themselves on the line but having come up through the university system, and they immediately make enemies of the people who are working in those plants.

What I am saying is that this system is no longer good enough; it is not working, and we need a little bit of old-fashioned good sense brought back into our programs.

I cite the example of our various marketing boards, which have operated for many years here in Ontario. We do not have strikes in those marketing boards. We do not get the prices very often that we would like to have as producers, nor do the buyers very often get the prices they would like to have as buyers. The authority the system has and the rules it contains are stronger and more authoritarian than our Labour Relations Act. Yet the people within the system by and large do not abuse it; they make it work.

I suggest to the Treasurer that we need to explore some of those systems to get Ontario moving again. I think he realizes that as the months and days go by it is getting more and more troublesome, otherwise he would not be as concerned as he is.

Time is running out, Mr. Chairman. As a rural member, I am glad to have had an opportunity to convey a few thoughts to the Treasurer. I do not work on the assumption that he is going to adopt all of them, but I know he has adopted one or two of them in the past. I commend them to him for his perusal.

The Deputy Chairman: The member for Haldimand-Norfolk (Mr. G. I. Miller).

Hon. F. S. Miller: Mr. Chairman, I thought that was the last speaker by agreement, but it is all right. I was told that an hour ago.

The Deputy Chairman: The member for Haldimand-Norfolk has a question he wants to ask.

Hon. F. S. Miller: In any case, Mr. Chairman, I have listened with great interest. I thank the honourable member for the kind comments he made. I also point out to him that I have studied Toyota; I have been there. I have looked at the kanban system, which is the "just-in-time" system. The member has to realize that system was built in a country geographically so much smaller than Canada and the United States that one can make a lot of comparisons that are not at all valid.

Second, they built an industry after the fact. It was not one that grew as a result of growing demand. They simply said: "We are going to have an automobile industry. There is a world market. We will create it here. We will put all our parts producers within a radius of the plant, and we will see that they deliver the parts." In North America, a plant in Bracebridge can be delivering parts to California and vice versa. We have had a decentralized system. I would argue with the member that the problems of employment and the distribution of employment in North America would be very great.

When the member talks about the relative difference in price, there is about 25 per cent difference, $1,500 a car, alleged to be the advantage of Japanese manufacturers, and he said $400 of it was due to labour and the rest was management. The member neglected to point out that the currency in Japan is 25 per cent undervalued. If it were compared on a North American basis to the real value of that currency, they would have about a $200 difference. That is one of the things we have to fight.

10:10 p.m.

Mr. G. I. Miller: Mr. Chairman, I want to take a couple of minutes during the estimates of the Ministry of Treasury and Economics to bring to the attention of the minister some concerns that have arisen in my riding of Haldimand-Norfolk. Perhaps they are based to some extent on the unemployment figures in the December 3 Simcoe Reformer under the heading, "Registered Job Seekers Rise." The number of registered job seekers in the region jumped by more than 1,000 in November.

The registered unemployed figure has almost doubled from November of last year to 5,222 in Simcoe, compared to 2,871 in 1981. Perhaps one of the main reasons for that was the weather. We had frost on August 24. It was devastating to the agricultural crop, particularly in Norfolk and the tobacco areas of Elgin and Oxford.

I would like to point out that the federal government has made $1 million available for a job creation program in those three areas. I wonder if the minister might be willing to match that figure in trying to alleviate unemployment and generate some jobs for this winter. While I am asking that question, I also want to ask him how some of these job programs are going to be administered at the local level through the municipalities, working along with them. Maybe he could give some indication of how he is planning to make these make-work programs work.

The other thing I would like to bring to his attention is that because it is an agricultural area employing a lot of seasonal workers, we import a lot of offshore help for harvesting the crops. I wondered if it would be possible for the government to take a look at how we can encourage our own employees to accept these positions. We do have good accommodation. Each farmer is reasonably well equipped with housing that has been financed by public money from both the provincial and federal levels.

I understand the farmers' position. When they bring people from offshore they are more easily managed, because if they do not do the job they can go back where they came from. It is as simple as that. I know we have a lot of good people who do want to do a good job. If they can get enough weeks to utilize the unemployment funding we have been utilizing for several years, they can survive.

Again, with the way the economy is, there never was a more important time when we must work together with the farming industry and with municipalities at the provincial and federal levels. Those are two concerns I have. I also realize that farmers do not trust our local employees. They feel they do not carry out their responsibilities, but I think, given the chance, they can and would accept those responsibilities.

The other thing that concerns me is that the province has invested much money in the Townsend site, which is now trying to develop housing and get it on the market. They are marketing houses in that area at the present time at less than $500 a month, which takes care of the monthly payments, the interest payments and the taxes. When we look at housing in Toronto, where it is so difficult for people to own their own homes, I think this brings it within range for a lot of people. If they had the job opportunities, they certainly could afford to buy their own homes. Again, it is up to the government, not only the Treasury but also the Ministry of Industry and Trade, to generate jobs.

I think that is the key: utilizing the facilities that we have in the new town site of Townsend. In the community of Jarvis, there are 50 lots and not one has been sold in the last four years. In Port Dover, there is a subdivision with 400 lots and perhaps 200 have been sold; they have been saying this since 1975. Simcoe has several subdivisions sitting there with their services complete and not being utilized. They have underground hydro, paved streets and are ready to go. We look at Toronto and cannot find places for people to live. We have to put them in high-rise buildings and public housing.

It is important that we diversify this province and harness the investments that have been made by the province so that people may have an opportunity to have jobs and their own homes. The job is the key.

As my colleague for Kent-Elgin (Mr. McGuigan) pointed out, the Japanese have taken over a considerable share of our car trade. I believe we are importing, in 1982, something like $1.3 billion worth of automobiles from Japan while we are exporting something like $13 million in auto parts in return.

We have the new Stelco steel plant which was erected at the industrial site in the city of Nanticoke. We can produce steel as competitively as anyone. All we need is some use for that steel. It seems to me in the Treasurer's dealings at the federal level to get a bigger share of the auto trade, that would be an ideal place to consider locating additional facilities so that we can provide more jobs and use the resources we have invested in and get the economy in that part of Ontario rolling again.

I have just one further point. We have a lot of rural towns with outdated facilities in downtown areas. If we could come up with a plan to redevelop those areas, rather than building on the outskirts as we have done over the past 15 to 20 years under the planning of this government, it would stimulate many areas in Ontario.

I know of two examples, Caledonia and Hagersville, where the chambers of commerce are trying to come up with some redevelopment plans at the present time. If we were to utilize the Board of Industrial Leadership and Development money on a low-interest loan program, it seems to me we would get much more value for our dollars. It could be done in the same way as in the tile drainage program, in which the people receive the money, pay low interest and pay it back and you have a continuous fund to operate with, whereas with BILD we are giving away $750 million in the next few years and then is totally gone.

Again, as was pointed out by my colleague for Kent-Elgin, its support of the new processing plant has helped to stimulate the agricultural industry, but I think it would go much further and that people would be willing to put up some of their own money to match it, if it was lent out on a low interest program with a payback that would continue to stimulate the economy.

I would like to leave those three or four issues with the minister. I would like to have a response on the job creation program and the federal money that has been put into play now. Is the minister willing to match that funding?

Hon. F. S. Miller: Mr. Chairman, we had planned to vote, I thought, at 10:15. I am really not anxious to say too much except that, first, the villages or town sites, Townsend et al., were designed not to bring people from Toronto who work in Toronto, but to satisfy the needs of people who would be working at the proposed steel mill.

10:20 p.m.

It intrigues me when the member talks about Japanese cars. I think he was talking about those at the end. It always intrigues me when people in this country buy a Japanese product when there is a North American product available, if they work for government or any emanation of government or if they provide a service to the community, to people who work in North American factories. Most of us do.

I wonder if, when the member buys a Japanese car and he tells me he buys it because it is cheaper, he sits back and says, "Does the worker in the factory making a North American car have the opportunity to have a Japanese elected official, a Japanese school teacher, a Japanese doctor, a Japanese whatever?" The answer is no.

If we are not going to give him that choice then I think we should be buying the product he makes. I feel that until we recognize that we had better realize we have it all going for us. We demand everything we want at our price and we are not willing to pay his price for his product. That is one of the North American illnesses.

I am not in a position to add much to the comments the member made earlier about agriculture, except to recognize that he has had some very difficult times in his area. To this point, I am not responsible for frost. I just have to pay the insurance when there is some.

Vote 901 agreed to.

Votes 902 to 906, inclusive, agreed to.

On motion by Hon. Mr. Gregory, the committee of supply reported certain resolutions.

CONCURRENCE IN SUPPLY, MINISTRY OF COLLEGES AND UNIVERSITIES

Mr. McClellan: Mr. Speaker, I do not intend to make a speech unless I am provoked. I understand there are a number of people who have some remarks to make and I am not sure that it is going to be possible to complete the debate on this concurrence within seven or eight minutes.

Hon. Mr. Gregory: Mr. Speaker, the 46th order would have been the Ministry of Education, and we were given to understand that was where the remarks were going to be. This concurrence is in the Ministry of Colleges and Universities, which we understood was going to be very short. Perhaps I am mistaken.

Mr. Speaker: Shall this resolution be concurred in?

Mr. Conway: Mr. Speaker, I want to indicate that through my colleague the member for St. Catharines (Mr. Bradley), the deputy House leader of this party, I had indicated that as critic for Colleges and Universities it was not my intention to speak at length on the concurrence for these estimates.

I will very briefly indicate to the minister that as spokesman for this party we are watching with ongoing interest her activities as Minister of Colleges and Universities. It has been remarkable to some of us that in the past few weeks she has brought to some kind of conclusion a variety of initiatives in the secondary educational panel, most notably that statement of about three Mondays ago, three weeks ago today I believe, at which point in a very splendid public way she adopted much of the Liberal education platform of the 1977 and 1981 elections.

Perhaps the Premier (Mr. Davis) misspoke himself when he was in my county in 1981 and made that pitch about grade 13. I might add that it was a pitch I well remember the member for Carleton (Mr. Mitchell) agreeing with at the time. I have kept the clippings about his views on grade 13.

But I am not here to talk about that, except to say that we are waiting with great interest for some kind of definition to be given to the post-secondary educational community, where, as we have indicated on earlier occasions, a number of very significant issues remain to be addressed. I do not need to take the minister through the chapter and verse of that debate. My friend and colleague the member for Hamilton West (Mr. Allen) and others did just that in the estimates debate about a month ago.

As we approach the Christmas season and we are all imbued with the good mood of the season, I want to indicate to the minister that my colleagues and I are expecting some very clear indication of government policy with respect to the post-secondary sector in the very near future. I have indicated my own impatience with respect to what has happened in the whole Fisher debate. I hear by way of the grapevine that the Matthews proposal for new funding for the universities in this province is very well advanced indeed, and that discussions are at a critical stage now in that respect.

The minister, in her inimitable way, looks somewhat aghast.

Hon. Miss Stephenson: I would not use that word to describe it.

Mr. Conway: In the minutes allowed to us in this concurrence, perhaps the minister would state for the record precisely where we are as a Legislature and she is as a minister with regard to the whole question of a new formula for funding the universities in this province, which are, as she well knows, under the financial gun.

I want to conclude my very brief remarks by encouraging the Minister of Education and Colleges and Universities to move with dispatch in the coming days to clear the air of all the uncertainty that has been created as a result of inaction over the past 18 months. There are many of us who are deeply distressed to think that she and her government are not going to grasp the nettle of the challenge of the Fisher report, to use one very important issue as an example of the dithering that has gone on. I hope, in the time left in this fall session, she will be able to begin to chart a course for the 1980s for our very troubled post-secondary educational institutions.

With that, I want, through you, Mr. Speaker, to invite the minister to make such comment as she might care to make, and, of course, on behalf of my colleagues to wish her all the best in the happy holiday season.

Mr. Allen: Mr. Speaker, I think the minister is rather aware of most of the issues I have raised in the course of the estimates in committee. Like my colleague who has just spoken, I think there are a number of very serious unresolved issues in the whole domain of colleges and universities. I do not sense they are being satisfactorily resolved at this time. They are issues that put funding over against accessibility, over against quality. I do not find, in the university spokesmen with whom I speak, that there is a sense that those issues are being moved closer to resolution.

I do not find the trend of funding in the context of the fiscal capacity of the province to be in a very satisfactory state as far as the universities and colleges are concerned. It strikes me that we are frozen into a set of relationships between those institutions and the ministry, which appear to go on and on without change.

I would hope some rather minor problems that occur in some respects in terms of scale and quantity of resources entailed -- such as the problem of accessibility for handicapped students -- would begin to be resolved in the near future, particularly in one department, namely the visually handicapped.

10:30 p.m.

But as we get a little bit further away from the issue, which now appears to have been taken over by her colleague the Provincial Secretary for Social Development (Mrs. Birch), I am not quite clear myself whether the minister has anything to do with that any longer, whether she is keeping a kind of watching brief on it or whether she is going to have any active input into the resolution of that particular problem.

I would hope she would see the university components of the suppliers of that kind of need are involved in serious consultations and that their sense of the need and the way in which it might be met would be satisfactorily taken care of in any resultant mechanism she and her colleagues may try to put in place.

It seems to me Ontario and its people are looking increasingly to the university and the post-secondary system to help them address the fundamental economic problems this province faces. I know the minister is aware of that. I am sure she is keeping her colleagues aware of it too. But somehow we approach no further a resolution of the particular problems that that proposition and that desire seem to entail.

Mr. Speaker: I remind the honourable member of the time.

Mr. Allen: With those remarks, I would be happy to conclude my contribution to the estimates, and likewise wish the minister well over the intervening weeks until we meet again in this House and have further exchanges on this matter.

Hon. Miss Stephenson: Mr. Speaker, I believe I have no alternative but to move adjournment of the debate.

Interjections.

Hon. Miss Stephenson: Can I move concurrence? I have no opportunity to respond at this point.

Mr. Speaker: If we have agreement, yes.

Hon. Miss Stephenson: I shall be pleased to respond further during the Education concurrence or through some other means, if that is appropriate.

Resolution concurred in.

The House adjourned at 10:34 p.m.