Journal des débats 1983-janv-27 | Assemblée législative de l'Ontario

Mr. Conway: Mr. Speaker, I rise to raise what I believe is a point of privilege and a matter of great import to this Legislative Assembly. To set the context for my point of privilege, I want to read a brief section from chapter 10 of Erskine May's Parliamentary Practice, 19th edition. From that chapter, I read on page 136, "Acts or Conduct Constituting Breach of Privilege or Contempt," and I quote directly:

"It may be stated generally that any act or omission which obstructs or impedes either House of Parliament in the performance of its functions, or which obstructs or impedes any member or officer of such House in the discharge of his duty, or which has a tendency, directly or indirectly, to produce such results, may be treated as a contempt."

The fifth edition of Beauchesne's Rules and Forms of the House of Commons of Canada, chapter 2, the "Privilege" chapter, page 11, says on this point of privilege:

"The distinctive mark of a privilege is its ancillary character. The privileges of Parliament are rights which are 'absolutely necessary for the due execution of its powers.' They are enjoyed by individual members, because the House cannot perform its functions without unimpeded use of the services of its members, and by each House for the protection of its members and the vindication of its own authority and dignity."

He was referring as well to Erskine May.

My point of privilege in this connection relates to the fact that yesterday, as a substituting member on this assembly's standing committee on administration of justice, I sat on a reference initiated by the member for Riverdale (Mr. Renwick). Clearly the main import of the reference was a desire for this assembly, through that committee, to look at the general area of loans and trusts in this province through a review of the 1979 report of the registrar of loan and trust corporations; and from the intentions given by the member for Riverdale, it was to be hoped that with the concurrence of the committee there would be a broader look at the specific difficulties that are currently before us as a result of the Crown, Greymac and Seaway business.

Yesterday in that committee, the member for Carleton (Mr. Mitchell), the parliamentary assistant to the Minister of Consumer and Commercial Relations (Mr. Elgie) -- I reiterate, he is not only the member for Carleton but also the man who serves as parliamentary assistant to the minister in question -- put a motion that occupied the committee for almost three and a half hours. The import of that motion was basically that the committee ought not to proceed because the discussion might very well prejudice the public interest generally and the interest of the depositors of the various trust companies.

At the very time the parliamentary assistant was moving forward with that motion in a committee of this assembly, we now have learned, his superior, the Minister of Consumer and Commercial Relations, was preparing to depart, having given to all honourable members on many occasions inside and outside of this chamber the assurance that as important, relevant information in this multifaceted business became firm, he would release it to us here in this House.

The minister invited our trust, and on most occasions we have tried to reciprocate in a generous way. Having been invited to extend trust to him in that respect, those of us who sat in that committee and were faced with this resolution were shocked, and I personally was upset and outraged, to learn that while the parliamentary assistant was moving that motion, the minister was preparing to depart from these precincts to go downtown to the editorial offices of the Toronto Star and the Globe and Mail to reveal information of a most sensitive and relevant kind, which clearly impacts upon our rights and privileges as members of this assembly, members who are charged this very day to deal with an unprecedented bill, Bill 215, An Act respecting Crown Trust Company.

We read that the minister and his cohort, Messrs. Biddell and Macdonald, went to the editorial offices of Toronto newspapers in the interest of setting the record straight, clearly in the interest of setting government policy, in the interest of setting clearly the dictates of poetic justice, apparently in the interest of manipulating the media, and gave sensitive, relevant and extraordinarily important information theretofore denied this assembly and all members.

2:10 p.m.

Apparently he gave that information willingly to those newspapers, at his own invitation, and I am very upset in so far as I trusted this minister. I trusted him routinely. I believed him when he said he would take all honourable members into his confidence on each and every one of these occasions as soon as the information we requested was available to him.

I feel more than a little upset and very handcuffed now, as I try today to deal with this extraordinary legislation, Bill 215, to find out that the import of this bill apparently was much more talked about in some editorial offices than it has been in this assembly.

I want to conclude by inviting you, Mr. Speaker, to look very seriously upon this. As individual members, all of us have been through a rather exceptional set of circumstances with respect to this business of trust and loan companies. I reiterate that we were regularly invited to place our trust in the minister; we trusted; I trusted.

I feel let down. I feel my privileges and my rights have been abused and abrogated. I wanted to stand in my place today, not only on my own account but also, I hope, on the account of all members here present to register our strongest and most basic parliamentary objection to what has transpired in the past 24 hours.

Mr. Renwick: Mr. Speaker, on behalf of our party, I want to support the essential thrust of the remarks of the member for Renfrew North (Mr. Conway). I am rather concerned, however, that the essential thrust of the argument has been destroyed somewhat by the moral indignation that member must bring to bear, considering the Achilles' heel from which he operates because of the private but nonconfidential meeting -- whatever that can be said to be -- they had with a representative of the minister with respect to the disclosure of information. In the matters related to fundamental questions --

Hon. Mr. Davis: His leader heard it all.

Mr. Peterson: That is an absolute falsehood.

Interjections.

Mr. Peterson: Mr. Speaker, when the Premier of this province states a falsehood --

Interjections.

Mr. Peterson: He said it, sir, and Hansard will show that it is on the record.

Mr. Speaker: I did not hear the remark, and quite obviously --

Mr. Peterson: I heard it, sir, and I am asking you to ask him to withdraw that remark.

Mr. Speaker: Order. I am going to ask you to withdraw that word you used --

Mr. Mancini: It should be the reverse.

Mr. Eakins: Let's start with the Premier.

Mr. Speaker: In all honesty, I did not hear the exchange. I was concentrating on what the member for Riverdale was saying. I did hear you when you stood up. I ask you to withdraw the use of that word, please.

Mr. Peterson: Mr. Speaker, sitting in his place, the Premier said that the Leader of the Opposition heard it all. I heard it, my colleagues heard it and I suspect his own colleagues heard it. Whether Hansard heard it, I do not know. The fact that you did not hear it, sir, I respectfully submit, is not all that relevant in the circumstances.

That is a deliberate falsehood in the circumstances. I did not hear and my colleagues did not hear everything that presumably, at least according to press reports, the minister, Mr. Biddell and Mr. Macdonald had to say to the editorial boards of certain newspapers. It is the Premier's responsibility to withdraw that suggestion.

Hon. Mr. Davis: Mr. Speaker, I did not realize the Leader of the Opposition was so easily upset. I am delighted to withdraw it.

He is quite right. I was not present when he talked to Mr. Biddell. I was not present when the minister was talking to the editorial board of the two newspapers. So I was privy to neither conversation. But I have reason to believe that the Leader of the Opposition was fully aware in a substantial sense of whatever was discussed with the editorial board.

Mr. T. P. Reid: That is not true.

Mr. Wrye: That is not true.

Hon. Mr. Davis: I say "in a substantial way"; that is all.

Mr. Peterson: The extent of my knowledge in this entire matter is a meeting we had with Mr. Biddell; that is all public knowledge at this point. Many of my colleagues were there, and those who were there will clearly understand that the Premier's remarks are not in conformity with the facts.

Mr. Rae: They should settle this private quarrel somewhere else, Mr. Speaker.

Mr. Speaker: I am not going to adjudicate. I did not hear whether you withdrew the --

Interjections.

Mr. Speaker: Order.

Mr. Peterson: Considering the generosity shown by the Premier, I withdraw my remarks.

Mr. Speaker: Thank you.

Mr. Renwick: Mr. Speaker, I want to pick up on a minor thread with respect to the point of substance on the question of the privileges of the assembly.

I am under no illusion about the cynicism of the Minister of Consumer and Commercial Relations, because none of the information he has disclosed since Monday afternoon, when he stood in his place to introduce Bill 215, which we will be debating this afternoon, could not have been disclosed on that afternoon; and it has been made available to this House only because the editorial opinion across the province was contrary to what he wanted. So I have no illusion that we are forcing information from the government.

The government is playing its usual cynical game. I may say they played it again in the committee yesterday in breach of the privileges of this assembly: first, in that the minister did not make available the two reports for 1980 and 1981, and second, by not permitting a discussion with the registrar about the discharge of his statutory obligations, not as a member of the ministry but as a registrar appointed by the Lieutenant Governor in Council and having a status that required his presence before that committee.

There is no way in which this assembly can discharge its responsibilities with respect to the matters that are before us if on each and every occasion when the rules of the House permit the reference of that kind of matter for consideration, the government, always prompted by the parliamentary assistant to the particular minister, moves to disrupt the work of that committee.

In that sense I want to associate myself with the essential element of the remarks of the member for Renfrew North. I want to say, however, that it is extremely difficult to distinguish the Liberal positions on so many matters when a smokescreen is raised continuously by that party about where it stands on the issues.

We will be very interested in the debate this afternoon on Bill 215.

I would like you to take under consideration, if you would, Mr. Speaker, the valid point with respect to the privileges of this assembly and what happened in the standing committee on administration of justice yesterday and what has been happening on every single occasion as this government moves, in great cynicism, to disrupt the work of the committees of this assembly.

2:20 p.m.

Hon. Mr. Elgie: Mr. Speaker, first of all, I think I should comment and be quite frank about it.

Mr. Mancini: That would be the first time.

Hon. Mr. Elgie: It is nice to have the honourable member back. He adds a certain amount of something to the official opposition. I am not sure what it is, but others can make up their own minds.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Elgie: I find it intriguing that from the beginning of what my friend the member for Renfrew North has called the matters related to these three trust companies, there has been one constant, continuous and overworked criticism of this minister: he has not come out enough to talk on the issues.

I have to tell the member it was my determination that there was an understanding gap, and I determined to explain the material that has been placed before this House in an effort to help give a better understanding to those who I felt did not understand it properly. That is what was done. If the member looks over the material that has been presented before this House in the emergency debate and was presented in answers to questions, he will find the material he is talking about is material that is substantially known to this House.

I also want to make it very clear, because I have heard reference to this --

lnterjections.

Mr. Speaker: Order.

Hon. Mr. Elgie: Does the member want me to check in with him before I take the opportunity of having my press interviews?

Mr. Conway: That is a damned important question.

Mr. Speaker: Order.

Mr. Conway: It is a very important question.

Hon. Mr. Elgie: Let me tell the member, he does not check in with me before he holds his press conferences.

Mr. Conway: Where has the minister said he was going to parcel out Crown Trust?

Mr. Speaker: Order. The member for Renfrew North will resume his seat, please. I do not think we need any further outbursts. We will hear what the minister has to say, and then I will take the matter under advisement.

Hon. Mr. Elgie: I want to make it very clear -- from some remarks I have heard, there is talk of a coverup -- that we are in an uncover operation here. We are involved in clear and determined efforts to make public all the knowledge that is possible about the events that have been before this House. That should be very clearly understood. There is no coverup; it is an uncover operation.

For the member for Riverdale to suggest I have a cynicism about this House is to deny what I think this House stands for in parliamentary democracy. I do not accept that. I do not think it is worthy of him to say it, because the member knows in his heart the respect I have for the traditions of this Legislature.

It troubles me very much to hear the member say that. If anyone displays cynicism and if any group is playing politics over an issue that I deem to be one of the most important issues before this House, I think the member knows who does. If I am not wrong, I think all of us know where that group sits. I have no further comments, sir.

Interjections.

Mr. Speaker: Order, please. I will be very pleased to take the point of privilege that was raised by the member for Renfrew North under advisement, and I will report back to the House as quickly as I can.

Mr. Roy: Mr. Speaker, in response to the minister's comments, I want to raise this point of privilege. As my colleague the member for Renfrew North said, when we met with Mr. Biddell, we were never told that there would be division of the assets in the sale --

Mr. Speaker: Order, please. You are talking on the first point of privilege. I have said I will report back to the House.

Mr. Roy: Mr. Speaker --

Mr. Speaker: No. You are out of order.

Mr. Roy: Mr. Speaker, this is another point of privilege. Please hear me out on something said by the member for Riverdale. He has made an accusation against --

Mr. Speaker: With all respect, that really is not a point of privilege.

Mr. Roy: Please hear me out before you rule my point of privilege out of order.

Mr. Speaker: If you are going to talk on a new point of privilege --

Mr. Roy: It is a new point of privilege.

Mr. Speaker: All right. I will listen to it.

Mr. Roy: Mr. Speaker, the new point of privilege is this: The member for Riverdale accused the official opposition of having a secret meeting with Mr. Biddell. This was not a secret meeting. In fact --

Mr. Speaker: Order, please.

Mr. Roy: Hear me out.

Mr. Speaker: No. The member for Ottawa East will please resume his seat. It could not be construed in any way as a secret meeting, because I saw it reported on the news and I read about it in the press.

Interjection.

Mr. Speaker: Order. Resume your seat, please.

CORRECTION OF NEWSPAPER REPORT

Mr. Nixon: Mr. Speaker, I rise on a point of order to correct the record. In yesterday's Toronto Star there is a headline that reads as follows: "Approval of Crown Sale Stalled by Opposition." The byline is that of Trish Crawford. That is incorrect.

You are aware, sir, that the bill before us was introduced just a few days ago. It could have proceeded earlier than today. We have already agreed, at least in this party, to sit over the supper hour to continue its debate, and we have proposed to the government House leader (Mr. Wells) that the House or its committee can continue its work over the weekend because we feel it is important that this be fully deliberated. The last thing we want to do is delay it.

The reason it is very important is that many people who have money on deposit with Crown are extremely anxious that a suitable and viable solution be worked out before they lose their money. For the Toronto Star, a reputable newspaper, to indicate that the opposition, either this party or the New Democratic Party, is stalling the deliberation is clearly incorrect. I want that so noted.

Mr. Speaker: I am sure the people involved have taken note of that. I am not sure what they will do with it, but I am sure they have taken note.

TABLING OF REGISTRAR'S ANNUAL REPORT

Mr. Cunningham: I have a separate point of privilege, Mr. Speaker. Members of the Legislature rely greatly on the tabling of statutory reports on an annual basis. Yesterday, in the course of the work of the standing committee on administration of justice, a letter was directed and circulated to members of the committee, signed by Murray Thompson, registrar of loan and trust corporations, advising us that the 1980 annual report was not circulated, pursuant to standing order 33 of the House.

Mr. Thompson said in his letter in part: "It is therefore with some embarrassment that I must advise you that the tabling of the 1980 report was not carried out in accordance with our normal practice. I will make arrangements with the minister to have this done.

"The report for 1981 is still at the printers. In this regard, the time required in the preparation and checking of numerous tables contained in the report has always resulted in a substantial delay in the release of the reports. Recent technical improvements in our word processing equipment will enable us to store much of the information required in the reports on floppy discs."

I would ask you, sir, if you could have a dialogue with the minister in charge to see if these floppy discs can start working so that members can receive these statutory reports, reports that might add some clarity to the operation of that very messy department.

Mr. Speaker: I am sure the minister has taken note of what you have said and will correct the tabling of the reports as you have requested.

CLERK OF THE HOUSE

Mr. Speaker: Now, if I may move along to something a bit more pleasant but as noteworthy. Inasmuch as Roderick Lewis, our eminent Clerk of the House, succeeded his father, he today has broken the record of his late father in being the longest-serving Clerk of the House in Ontario. He told me with all modesty that this event was celebrated during the noon hour in an appropriate fashion; so we should not rule on any important points of order.

STATEMENTS BY THE MINISTRY

BUILDING REGULATIONS

Hon. Mr. Sterling: Mr. Speaker, in my capacity as both the Provincial Secretary for Justice and the minister responsible for regulatory reform, I have recently initiated an interministerial committee to examine conflicting building regulations in Ontario.

The committee, which consists of representatives from two ministries within my policy field, Consumer and Commercial Relations and Solicitor General, also includes the Ministry of Municipal Affairs and Housing.

Although there are numerous pieces of legislation which exist for building, our committee has concentrated on three key acts which have a general application throughout Ontario and are at present under the jurisdiction of three separate ministers.

They are the Planning Act, which falls under Municipal Affairs and Housing and enables municipalities to pass and enforce property standards bylaws; the fire code and Fire Marshal's Act, which contain standards for building fire safety, and they and their enforcement are the responsibility of the Solicitor General (Mr. G. W. Taylor); and, finally, the Ontario Building Code and the Building Code Act, governing the actual construction, renovation and demolition of buildings, currently under the Ministry of Consumer and Commercial Relations.

It has been brought to my attention that while the division of these areas of responsibility provides the necessary involvement of various government agencies, it has caused the builders considerable concern when trying to satisfy all the regulations involved. It has been the primary focus of this committee to examine ways to simplify the process for those who deal with government and the construction of buildings in Ontario, to eliminate any duplication which may exist and resolve conflicting building requirements.

In this regard I am pleased to announce, as chairman of the committee, that effective February I the building code branch will be transferred from the Ministry of Consumer and Commercial Relations to the Ministry of Municipal Affairs and Housing. Except for matters relating to fire safety, this transfer will consolidate all the major regulations and legislation now dealing with the construction, renovation and rehabilitation of buildings in Ontario.

2:30 p.m.

I am also pleased to announce that the committee has also been examining existing procedures which address the disputes that may arise between local building inspectors, the fire department and the builder. There are at present six municipalities which have implemented voluntary dispute-resolution mechanisms for this purpose. I have instructed my committee to explore the methods employed by these municipalities, with the intent of incorporating these models across the province.

I am confident that the transfer of the responsibility for the building code to the Ministry of Municipal Affairs and Housing will contribute greatly to reducing any overlap among provincial acts relating to buildings. The consolidation has been recommended to the government in two reports and has the general support of industry, building officials and municipalities across our province.

It is our intention that by further reforming the regulatory process relating to buildings, we will ensure a high degree of safety in building across our province.

TRANSFER OF CROWN TRUST ASSETS

Hon. Mr. Elgie: Mr. Speaker, in the light of continuing developments with respect to Crown Trust Co., and the necessity of dealing with the legislation before the House on a priority basis in order to allow arrangements to be made with Canada Deposit Insurance Corp. and a new owner, I wish to make the following statement.

There should be no conceivable reason for delay or doubt over this legislation. There is no information or explanation gap, as some may assert. There is clearly, in the minds of some, an understanding gap. So let me restate as simply and clearly as I can what the real position is that faces this House with respect to the depositors of Crown Trust Co.

There are two choices, and soon there will be only one. The first choice, which this government has rejected, is to put Crown Trust Co. into liquidation. If this had been done, or if the result of delay in this House leaves it as the only alternative, the results will be very substantial losses and long-delayed recoveries for uninsured depositors, a substantially greater loss of public moneys through higher losses on uninsured deposits by Canada Deposit Insurance Corp. and the Quebec deposit insurance organization, Régie de l'assurance-dépôts du Québec, and no possibility -- and I emphasize this -- no possibility of any recovery by preferred or common shareholders.

The second choice is the one adopted by this government. Once the government determined that Crown Trust Co. lacked a borrowing base to justify its continuing in the business of taking deposits from the public, the question for the government was how best to protect the stake of the existing depositors in the Crown Trust Co. assets in a manner which did not violate the legitimate rights or interests of shareholders or other creditors.

The course adopted was to take possession and control of the Crown Trust Co. assets under the legislation enacted on December 21, 1982, to operate the business in as nearly normal a manner as possible, to investigate fully the financial and business position of the company and to assess the best means of maximizing the value of its assets.

We realized from the beginning that we were faced with a race against time in maintaining faith in Crown Trust Co. until the continuance of its business could be reasonably assured. This has now all been done in a timely manner in conjunction with the Canada Deposit Insurance Corp.

The result is that if the legislation were to be passed today, I could assure the House that all depositors will be paid in full as their deposits fall due, the CDIC losses will be substantially reduced from what they otherwise would have been, most of the jobs at Crown Trust Co. will be preserved, the possibility of some recovery for shareholders will remain in the event that the questionable investments eventually realize substantially more than is now expected, and the right of shareholders to complain of reckless or imprudent management or of an improvident sale of assets will be retained.

This is a simple choice which this House faces. This government has taken its full responsibility in the matter and I can assure the House that we have made known every relevant factor to a decision on the legislation by all members of this House. The matter now rests with the House. The time for action is now, not because I say so, but because the risk is increasing that customers of Crown Trust will start to vote with their feet while other issues totally irrelevant to the interests of Crown Trust Co. depositors, creditors and shareholders are being raised as an excuse to delay taking a position for or against liquidation of the company.

That is the only question. Vote now, for or against the legislation, or delay and create the very real possibility that by the time legislation is finally passed it will arrive too late to save the uninsured depositors, leaving liquidation as the sole alternative.

There are three types of concerns about this bill which I have heard which need to be addressed. They do not reflect a lack of information but a lack of understanding of the purpose and effect of the bill.

First, there is the suggestion that this bill is some form of punishment of some of the shareholders of Crown Trust for possible wrongdoing on which all the facts are not in and in which no court has adjudicated. The truth is that this bill is not directed against shareholders and does not depend on there having been any wrongdoing.

It is the consequence of Crown Trust having been operated in such a way that it no longer had a borrowing base entitling it to continue to receive public deposits. It is that simple. Rather than being directed against shareholders, who collectively at least had some control over the operations of Crown Trust Co., it is directed to the protection of depositors, whose stake is some 20 times as large as that of shareholders and who had and could have no control over the company's operations. Compared with the only alternative, liquidation, the bill is the shareholders' last, best hope of ultimately receiving something.

Second, there is the suggestion that this bill amounts to some form of confiscation of shareholder interests retroactively. The truth is that it is a responsible proposal to the Legislature to step in before it is too late to prevent the practical certainty that there can be nothing for the shareholders if Crown Trust Co. is dealt with under the only other alternative legislation and is liquidated.

2:40 p.m.

What are the facts? (1) No one has deprived any shareholders of their shares. If there is anybody who believes those shares have a net value, he or she has not come forward and offered to buy those shares from the present shareholders on terms which protect the depositors and leave no public moneys at risk. (2) None of the shareholders or anyone else has yet demonstrated a willingness to buy the Daon mortgage or the mortgages in the Cadillac Fairview properties at their face value and thereby protect both depositor and shareholder interests.

This bill does not prevent either. Rather than confiscation, this bill provides the registrar with an alternative way of realizing the Crown assets to protect depositors to the very much less satisfactory and costly existing legal alternative of liquidation. No one believes it is confiscation if a lender realizes on a mortgage or other security to recover loans which have been defaulted.

Why is it confiscation if, under new legislation designed specifically for this one transaction and passed by a duly elected Legislature, the registrar realizes on behalf of those depositors in the most beneficial manner the assets on which they have the prior claim? Why is not confiscation on the other hand if, under existing winding-up legislation, the registrar or some depositor or creditor realizes on behalf of depositors in a very disadvantageous manner the assets on which they have the prior claim?

Finally, there has been a suggestion that there is some lack of legitimacy in a free society in what is being proposed. The truth is that the power to sell was deliberately not included in the legislation passed on December 21 because the government believed at the time that the case for such action should have to be made on an individual basis by standing up and being counted in this Legislature and seeking approval by an act of this Legislature.

For our part, speaking on behalf of this party, we know of no more legitimate procedure to have law enacted by members of this House and then to have to justify that law to the voters of this province in an election. But, beyond this, why is it somehow illegitimate in a free and democratic society for this House to recognize that acting under the only applicable existing law -- the procedure provided for winding up or liquidating a trust company that has lost the right to do business and does not have the funds to pay depositors or other creditors in full -- will hurt every interest with a stake in Crown Trust Co.: depositors, the two deposit insurance organizations, other creditors and both classes of shareholders? And why, if the House recognizes that, is it somehow illegitimate in a free and democratic society to introduce legislation which can only better -- and let me emphasize this -- legislation which can only better the interests of every stakeholder in Crown Trust Co.?

This government does not say there are not other issues for this House in relation to the affairs of the three trust companies and the events which led to the present position. What it does say is two things: first, these other matters do not affect one way or another the wisdom of proceeding to pass this legislation now; and second, there will be a full opportunity for review and debate of all these matters by the Legislature at a time which is appropriate.

I am already committed to a full review by a committee on this use of existing loan and trust corporation legislation and administrative practice when the white paper on the subject is presented to this House. I am also committed to making public the results of the Morrison inquiry. I can envisage that when these results are public they could provide part of the basis for legislative committee consideration of the report of the registrar under the Loan and Trust Corporations Act which is currently before the justice committee of this House.

Mr. Mancini: Mr. Speaker, I rise on a point of privilege concerning the minister's statement. He has, on several occasions in his statement, referred to the fact that we must move speedily, we must move quickly, there is no time to waste and the bill he has before the House must get speedy passage by this Legislature. I wish to put on the record that the House did not sit yesterday. If this matter is the subject --

Mr. Speaker: The honourable member does not have a proper point of privilege. Will he please resume his seat.

ORAL QUESTIONS

TRANSFER OF CROWN TRUST ASSETS

Mr. Peterson: Mr. Speaker, to the Minister of Consumer and Commercial Relations: We all understand here what I consider to be the dishonest and contemptible game the minister is playing in his statement today and throughout the last week. Let me ask, if this matter is so serious today, why did he not call it on Monday or Tuesday, or ask for a special sitting on Wednesday? Why did he wait until today to call this bill?

Hon. Mr. Elgie: Mr. Speaker, if the House leaders of the opposition parties had that sort of interest, as we did from day one, they should have said so at their House leaders' meeting, because this minister is prepared to stay any day and any night --

Interjections.

Mr. Speaker: Order.

Mr. Martel: Mr. Speaker, on a point of privilege: The minister has made a suggestion that the opposition House leaders could have indicated. The House leaders met today. They arranged an orderly timetable to proceed with the business in agreement with the government House leader (Mr. Wells) as to the best way of passing this piece of legislation. It was agreed by the House leaders that we would try to wind up the debate tonight on second reading, and that it would go to committee tomorrow.

It is also scheduled in the order of business to be announced at six o'clock that, if need be, we will have extra sittings Monday and Monday evening, even though they are not in the orders, when the particular committee that is going to look at it sits, and we are prepared to sit extra time in order to achieve that. Now that minister is trying to leave the impression that it is the opposition House leaders who have prevented this from occurring.

I join with the Leader of the Opposition (Mr. Peterson) in saying we could have sat yesterday if it was so important, as we could sit all Wednesdays and do some business around here.

Hon. Mr. Elgie: Mr. Speaker, I am not accusing anybody of anything, but there were very clear indications that the opposition parties -- certainly their questions on Tuesday supported it -- viewed this as a very important and substantive piece of legislation, as we do. I remain prepared to consider this bill at any time and without any criticism of anybody that we did not do it earlier. I said on Monday it is important that we get it done. I offered to have my special adviser Mr. Biddell meet with the two opposition parties to help them further understand the issues. This minister and this government have made very clear the urgent way we look upon this bill and the urgent way it should be treated.

Mr. Van Horne: Mr. Speaker, on a point of privilege: This minister offends me very much and certainly does infringe on my privileges when he says what he just said about not bringing the bill in until today. We met with his representative two days ago and understood from him that he was trying to get it brought in earlier. He is not being fair with us right now.

Mr. Speaker: That was not a proper point of privilege.

Mr. Peterson: Mr. Speaker, I understand that the House leader for the government was quoted in this morning's Globe and Mail as saying he expected second reading to go until tomorrow. Now I gather the minister is saying he has to have it passed today and presumably implicit therein is that if we do not pass it today there is going to be further erosion for which he is going to blame us. Why did he not call this bill last week? Mr. Biddell told us he was urging him to call it last week. Why did he not proceed then?

2:5O p.m.

Hon. Mr. Elgie: Mr. Speaker, believe me, I do not want to get into a confrontation over a matter that I think the Leader of the Opposition really understands in his heart. I think he does understand that there is some urgency.

I have told him, and I am sure others have, that we have serious concerns about the erosion of those parts of the assets of Crown Trust that make it attractive as something that should be an ongoing institution. I say that quite frankly and openly, and I hope the Leader of the Opposition understands it, because I am deadly serious.

It is not an issue whether anybody says that what the Leader of the Opposition said is quite inaccurate. As he knows, there were discussions going on between potential purchasers and the owners of shares last week, and while that was going on we were drafting legislation in readiness for this alternative. It is the only alternative that is in the best interest of the shareholders and, particularly, the depositors.

Mr. Rae: Mr. Speaker, that is the kind of discussion that would normally be held in a committee. We in this party think it should be held in a committee, in the light of day, where the press and everyone can be there for a good, healthy give-and-take from the minister and his advisers.

Mr. Speaker: Question, please.

Mr. Rae: I would like to ask the minister whether he can tell us what he apparently told the editors of the Globe and Mail yesterday. He has not made that clear in his statement.

First of all, how much money is involved with respect to the Canada Deposit Insurance Corp.? Why has the minister not made that information public with respect to how much money he expects CDIC to have to put forward?

Second, can the minister tell us whether he is any further advanced in his plans with respect to any particular company --

Mr. Nixon: On a point of order, Mr. Speaker: That is not supplementary to the question put by my leader.

Mr. Speaker: No, it is not a proper supplementary, with all respect.

Mr. Rae: Oh, come on.

Mr. Speaker: No, it is a new question. It is a completely different subject.

Mr. Martel: It is right on the statement.

Mr. Speaker: It is on the statement but it is not on the original question nor the answer to the original question. I was prepared to listen but we had an objection.

Mr. Peterson: To clear the record, I want to invite the minister to tell us the exact facts of what has transpired and not to use blackmail to shift the onus on to the opposition parties. I want him to say that no one in the opposition parties has obstructed him at any turn when he wanted to bring in this bill. I am asking the minister to give the people of this province and this Legislature the facts.

Hon. Mr. Elgie: I feel this Legislature will be able to evaluate whether or not there is opposition to this bill. I have not heard the Leader of the Opposition say he is going to support it and help to get it through quickly. I am not saying he will not; I have a sense he understands the urgency of it and, although he may oppose parts of it, he will not obstruct it. I will be frank and honest about that: I do not think the Leader of the Opposition honestly wants to obstruct this bill.

What I am trying to get across is that if we all have the same serious concern about the best interest of depositors, then we should seriously get on with this bill as quickly as possible.

ANNOUNCEMENT OF MINISTERIAL POLICY

Mr. Peterson: Mr. Speaker, I have a question for the Premier. Did the Premier have prior knowledge that the Minister of Consumer and Commercial Relations (Mr. Elgie) was going to the editorial boards of two newspapers in town yesterday and subsequently giving an interview on the record to reporters from one particular newspaper to reveal a new policy from the government? Was the Premier aware of it and did he approve of it?

Hon. Mr. Davis: Mr. Speaker, I have no hesitation in saying that I knew the minister was going to have discussions with the editorial boards of those two papers. As I look at this whole discussion, one of the problems -- and I say this in a nonprovocative sense -- is that we have not been able to delineate the issues and focus on what this bill is attempting to achieve.

Not only did I know, but I encouraged it because I think it is a matter of public responsibility for any minister of the crown to communicate and to explain what it is the government is doing. I know leaders of the opposition have met with the editorial boards of papers and I have met with them on a number of occasions. I think it is a matter of government or ministerial responsibility.

I confess to the Leader of the Opposition that I have met with editorial boards in a number of communities in relation to government policy. As I read the press reports, I did not see anything in them that indicated any alteration in government policy.

I will attempt to explain to the Leader of the Opposition the government policy as it relates to this bill. The policy is very simple, that is, to protect the depositors of Crown Trust. If one reads the bill, it is made abundantly clear as to the determination as to how the assets are sold, to whom they are sold, whatever the proposals may be -- and I do not know what the proposals are -- and what sort of variety they may make up. Surely the Leader of the Opposition, who purports to be something of an expert in this field, would understand that the potential for the registrar to sell some assets and not sell others is, I am told, a normal process in questions of this nature.

There is nothing new by way of government policy in anything I have read. I have encouraged ministers of the crown on many occasions to sit down with those people who have the obligation and the public responsibility of leading public opinion, to communicate and explain to them what government policy may be. I would be surprised and disappointed if the Leader of the Opposition did not feel this was part of government responsibility.

I do not intend to ask him, but I know the Leader of the Opposition's predecessor, and his predecessor, have on more than one occasion met with the editorial boards of papers to explain to them the policies of the Liberal Party. His previous leader did it in terms of energy; I remember it full well.

I would also say to the Leader of the Opposition that it is fun to play games. I understand that. I am a politician and I take pride in it.

Mr. Mancini: We are not playing games; you are playing games.

Hon. Mr. Davis: Come on, sit down. Grow up and act your age.

Mr. Mancini: You took over three trust companies. We are not playing games.

Mr. Speaker: Order.

Hon. Mr. Davis: I am not suggesting you are playing games with three trust companies but, in terms of the politics, I would say to the Leader of the Opposition he has never confined --

Mr. Mancini: This statement is playing games.

Hon. Mr. Davis: Would the member for Essex Whatever please -- I do not interrupt him other than in good fun; I really do not.

I would say to the Leader of the Opposition that I do not think he has restricted his comments or his observations about government activities, his comments upon our policies and his criticisms of ministers, which on occasion have been extremely personal. He has not restricted his statements that he does not trust the minister even though his colleague to his left got up today and said how he had complete trust in the minister. The member quite obviously did not hear his leader's observations of two days ago.

I have not heard the Leader of the Opposition restrict himself to comments, information, and a desire to communicate with and persuade the press that are confined to this Legislative Assembly. I guess there is a certain feeling on the part of the members opposite that only ministers of the crown are obliged to communicate their views here in the House, while they can communicate them at any time. I happen to believe he has the right to communicate outside the House and to express points of view, but I also think ministers do too.

Mr. Peterson: The Premier's point is that we are being personal while he is not when we are called impertinent for raising this matter some months ago and have endured almost every personal word the ministry could throw at us over the past week or two, or months -- almost everything they could do to try to discredit the facts in this case. That is the reality.

Interjections.

Mr. Speaker: Question, please.

Mr. Peterson: It is the reality. I am not going to take a two-bit lecture from him on this, let me tell the House.

Mr. Speaker: Question, please.

Mr. Peterson: His political advice has not turned out to be all that good.

As part of my original question, I asked whether the Premier approved of giving out government policy subsequent to the editorial meetings to restricted reporters in a restricted newspaper. He said, I gather, that is now government policy.

3 p.m.

Am I right in assuming the Premier approved of his minister's going to some reporters from the Globe and Mail and explaining a very major new development in this whole matter? I refer to the parcelling up of the Crown Trust assets, with the Premier and the government taking over the so-called hard assets and leaving Mr. Rosenberg with $130 million of soft mortgages plus a $90-million liability to the Canada Deposit Insurance Corp. and a $20-million responsibility to preferred shareholders. The shareholders may or may not realize anything of this -- and they probably will not. Is that the government's application of poetic justice?

Hon. Mr. Davis: Mr. Speaker, if the Leader of the Opposition is making a brief for the common shareholders I would be surprised.

Mr. Peterson: Preferred shareholders.

Hon. Mr. Davis: All right, if he is making a brief for the preferred shareholders ahead of the depositors.

Can I explain it in simplistic terms to the Leader of the Opposition? As I sense the discussion, as I understand the situation -- and I put myself in the position of a depositor in Crown Trust, which I am not --

Mr. Bradley: Or Re-Mor.

Hon. Mr. Davis: Or Re-Mor.

Mr. Bradley: Or Astra.

Mr. Peterson: British Mortgage.

Hon. Mr. Davis: Let us say the member for St. Catharines (Mr. Bradley) is a depositor in Crown Trust. Let us say he is there for $70,000, for the sake of argument. Surely the responsibility of government is to protect to the best extent possible the $10,000 that is in excess of the CDIC guarantee before we have a responsibility to the preferred or common shareholders. Surely that makes sense. Surely that is a matter of public policy.

I was not with my colleague. If the Leader of the Opposition is asking me if I agree that he should have discussed this with the editorial boards, the answer to that is an unhesitating yes, certainly, he should have. I suspect the Leader of the Opposition over a period of years will do the same thing -- discuss the policies of the opposition.

I am not here to give him a lecture. I will not even give advice. I gave advice to his predecessor; he did not accept it. I listen to the present leader today and wonder if he is following in his predecessor's footsteps -- which I think would be regrettable.

Very simply, no new policy was enunciated. The member and I had a discussion with respect to this business and he pointed out to me some of his knowledge with respect to Seaway, as I recall. I recall him making the observation that he was not sure the legislation was going far enough. Those were his exact words.

I ask the Leader of the Opposition to put himself in the position of a successful businessman, which I read in his fund-raising letters that he is. Is he saying that a credible purchaser who would become involved in this situation is not going to distinguish between -- I do not know the terminology -- the good assets vis-à-vis the questionable assets? That is not a matter of government policy. It is a matter of trying to get at the root of what the bill really means.

We think we have found a way to protect the depositors. That is what this government is interested in, and that is what we are attempting to accomplish. We are doing it in a way that, if there are funds left over, the interests of the preferred shareholders and even of the common shareholders are not being prejudiced if ultimately there are sufficient funds available.

Mr. Rae: Mr. Speaker, can the Premier please tell us why the minister and Mr. Biddell gave certain information to the editorial boards with respect to the exact amounts that were expected from CDIC, the nature of the support that was going to be forthcoming from CDIC and with respect to the nature of the parcelling-out proposal? The latter left Crown Trust intact with two bum mortgages as its only assets, in a sense.

Can the Premier please tell us why those things were told to the editorial boards of the Globe and Mail and other newspapers and not told to this Legislature at any time up to and even including today?

Hon. Mr. Davis: Mr. Speaker, the leader of the New Democratic Party as a matter of choice -- and I am not quarrelling with it -- chose not to meet with Mr. Biddell.

Mr. Roy: He did not tell us anything.

Hon. Mr. Davis: Again going only from press reports, I sense the Leader of the Opposition gave a figure to the press which I believe was $150 million and which he must have got from Mr. Biddell, as it relates to the possible commitment of CDIC. There was no attempt to hide that figure.

The minister, I think, has used the term "massive amounts of money." To the leader of the New Democratic Party, $150 million may or may not fall within the definition of massive. I can tell him some of these figures have emerged in fairly recent days. I do not think the issue is what CDIC may or may not have to put in. I cannot give him a definite figure. I would say, with respect, it is not relevant.

It is relevant that -- and I emphasize this to the leader of the New Democratic Party -- we have arranged with CDIC to guarantee them, if the assets are sold or in some way brought into a viable situation, so that every depositor in Crown Trust is going to be protected. Surely that is the essence of what we are trying to accomplish. Whether it is $150 million, $140 million or $160 million being put in by CDIC is surely not the relevant issue; the relevant issue is that CDIC is going to do it. Whatever the figure, it is a heck of a lot of money.

Mr. Peterson: Will the first minister commit himself to two things? One, could we have his pledge that his government will protect all the depositors in Greymac Trust and Seaway Trust, in addition to the depositors in Crown Trust? Two, will he commit himself to a thorough and fully independent inquiry into this entire matter? I can specify the details that should be included therein. Will he commit himself to those two principles?

Mr. Speaker: Order, please. With all respect that was not a supplementary to the main question.

Mr. Peterson: What do you mean?

Mr. Speaker: It was a completely different topic.

Mr. Peterson: Of course it was a supplementary.

Interjections.

Mr. Speaker: Order.

PROTECTION OF CADILLAC FAIRVIEW TENANTS

Mr. Rae: Mr. Speaker, my question is to the Minister of Consumer and Commercial Relations. In the statement the minister apparently made to the editors of the Globe and Mail yesterday with respect to the parcelling proposal, it appears to be clear the government plans to leave what I have described as bum mortgages relating to Cadillac Fairview with Crown Trust, which will still be owned by Leonard Rosenberg.

I would like to ask the minister what exactly this does for the tenants in this situation, remembering that they are the original victims of this whole problem. In particular, what action does the government intend to take to force the owners of the numbered companies to come forward and disclose their identity and reveal to the public the exact nature of the transaction so that their responsibility for this fiasco can be pursued?

Hon. Mr. Elgie: Mr. Speaker, since the member and others have referred to the parcelling, which from Mr. Biddell's perspective -- please let me take a minute on this because I think it is a very serious and important part of the mechanics of the sale. It has nothing to do with the principle of the sale. The government is not confiscating shares or interests of people. What the Canada Deposit Insurance Corp. is doing, and what we are proposing in this legislation, is that an ongoing business with assets that equal liabilities, one plus two, would be acquired by a purchaser matching assets and liabilities. Members must remember this is a company that has lost its borrowing base and is no longer able to carry on business because of that.

What it is proposed to sell are matching assets and matching liabilities, CDIC infusing up to $200 million in funds to provide some liquidity, which is not there without that massive infusion, and to provide a borrowing base to allow the company to continue to take depositors' money. Once there are investments that are qualified and other assets, and they are matched with liabilities, then there is something that is saleable and provides all depositors with complete and total protection.

The unqualified assets, the ones that clearly have some softness or doubt as to what they are worth, remain with Crown Trust, the shell, along with some CDIC obligations that it has assumed because it has paid some depositors.

3:10 p.m.

If by some miracle -- and it may not be a miracle -- but if by some chance those soft assets happen to be worth more than those who have reviewed them think they are worth, then that is the only opportunity shareholders and creditors have of getting anything. In liquidation they will get nothing -- absolutely nothing. Let us understand that. There is nothing going on behind the scenes; it is all out in the open. We are trying to do the best for those depositors and yet provide whatever is possible for the shareholders. Without this there is nothing, and I kid you not.

The honourable member asked about the tenants. I would like to think we all understood that when I made my statement of November 16 I indicated that because of the uncertainties surrounding these events, the tenants deserved protection. Legislation was introduced and passed by this Legislature placing a five per cent limit while a royal commission reviewed the adequacy of our rent review legislation.

In addition to that, the Residential Tenancy Commission on its own introduced guidelines that give them the option of not allowing during the first five years anything but mortgages attributable to the first sale. So whatever the outcome of all this is, tenants are receiving thorough protection while a royal commission evaluates the adequacy of our rent review legislation and while the events before us now finally come to fruition and full understanding.

As to the numbered companies, I have told members many times that several options are available which I think will reveal the information we require. Members know what the Residential Tenancy Commission has done in one case and presumably will do in other cases, given the right circumstances. Members know I have told them this is an issue the Morrison commission will be looking at and that parties with that knowledge are under subpoena to appear before the Morrison commission.

If a commission operating under part II of the Public Inquiries Act, with the power to subpoena and the power to take evidence under oath, cannot find out that kind of information, then I think we do have a problem. But I believe it can and I am prepared to wait and find if that is so, and I ask members to do the same thing. I mean that sincerely.

Mr. Rae: Mr. Speaker, the minister has discovered lots of information, some of which he has made public and some of which he has not made public. But the one piece of information he does not know -- and that is the reason he has not made it public -- is who owns those properties. I would think that was a pretty fundamental question not just for the tenants in those properties but also for the government.

In all the inquiries, investigations, commissions and royal commissions established by the government with respect to this matter, has the minister ruled out the possibility that Bill Player and Kilderkin are the owners of the numbered companies? Has he ruled out the possibility that Leonard Rosenberg and the Greymac group of companies are the owners of the numbered companies? Has he ruled out the possibility that some third group of people is the owner of the numbered companies?

Why does he not tell us? Why does he not take measures to find out that crucial information? Does he not think the tenants deserve to know who the hell their landlords are?

Hon. Mr. Elgie: Again, Mr. Speaker, I think it is important to find out the exact ownership, at least with some degree of absolute certainty, of those numbered companies. But I have told the honourable member that under section 152 of the Loan and Trust Corporations Act, a public inquiry under part II of the Public Inquiries Act is endeavouring to find out that very information.

I am prepared to wait and see if they can get it, because they do have the power to subpoena and the power to take evidence under oath, and I am satisfied they have the capacity to obtain that information.

Mr. Speaker: Order, please. I would ask all honourable members to please not hold private conversations in the House. Order.

Mr. Peterson: I gather the minister has ruled out the fact that the member for Etobicoke (Mr. Philip) may be the owner of those buildings.

My question is this: The minister has now had three working days before a whole series of rent cheques are coming due. Has he satisfied himself as to the financial viability of Maysfield Property Management? Has he satisfied himself that those rent cheques will be well handled in the normal course of financial transactions -- that is, they can be banked and the person responsible for paying the bills for the maintenance and upkeep of those buildings will discharge that duty? Is he satisfied there will be no disruption in any way to the rights of the tenants who occupy those buildings?

Hon. Mr. Elgie: I think the member is asking a lot of things with respect to information he knows may not be available to me. But on the present information available, the leaseback arrangements to Kilderkin made them the effective owner for the time being.

I have already indicated to this House, at least with respect to Crown Trust, that the third- mortgage payments have not been made as of December 10 and January 10. There are still some legal issues that are being considered with respect to whether or not a deposit on account with Crown Trust can be used -- what directions would be necessary to do so -- to pay those mortgages. Those are issues that are being considered at present.

But as of this day, registered on the title, there is a leaseback arrangement to Kilderkin, which therefore, as of this time, makes it the owner. The management company operating on behalf of them, the staff of the previous Cadillac Fairview buildings, are still in operation. When further information is available or when further steps are to be taken by the government, I will announce it here.

Mr. Rae: Does the minister think that Kilderkin and Bill Player are the owners? If so, one might ask why it has taken 10 weeks for Kilderkin and Bill Player to make an appearance before the Morrison inquiry to give us even the most basic information with respect to what has happened.

In that regard, Mr. Speaker, the tenants have been given notice of application by Maysfield Property to the Residential Tenancy Commission for an on-average increase of 19.5 per cent on these properties. Is the minister satisfied that the tenants should continue to pay their rent to Maysfield Property and management services under Kilderkin?

Why does the government not end the terrible uncertainties that are being faced by the tenants in these buildings by taking possession of the properties itself? Perhaps the minister would agree that if he used that technique, perhaps we would find out who the owners are pretty darned quickly. Would it not be better than having to beat around the bush and wait for Mr. Player to have the manners to turn up before a commission headed by Mr. Morrison?

Hon. Mr. Elgie: Mr. Speaker, with regard to the preamble of that question, I really do not think the member is telling me that I should direct Mr. Morrison's inquiry. Surely he believes Mr. Morrison has able counsel. Does he believe that? Does he believe that Mr. Hynes is an able counsel and does he believe that Mr. Morrison is an individual with a strong and high reputation in his field?

Mr. Rae: Let the minister answer the question.

Hon. Mr. Elgie: If he does, and even if he did not, surely he would not expect this minister, or any government, to be directing him what to do. He is exploring the issues within the terms of reference laid down by this government and he will report when he has that information, and the member would expect no less.

With respect to the rent increases that are reported to be asked regarding various buildings, again that matter will come before the Rent Review Commission. The commission now has legislation in place to guard them and now has its own guidelines in the event they would produce a lower increase in rent.

There is absolutely maximum protection given to tenants during these very troublesome times. I understand their legitimate concerns about the payment of their rent and where it should go. All I can report, at this time, is who are the owners and who is managing the building. I can only say the government, through its lawyers, is reviewing certain aspects of the deal with those very concerns in mind. When there is a resolution of that issue I shall be pleased to report it to the House.

3:20 p.m.

CLOSING OF CCM PLANT

Mr. Rae: Mr. Speaker, my new question is for the Minister of Labour. I would not want him to feel left out of these proceedings.

The minister will know that there has been a virtual epidemic of layoffs, plant shutdowns and closures in Ontario in the last while. I would like to turn his mind back to some questions I asked him before the Christmas break with respect to severance pay and bankruptcy and the very real problems that are being faced by workers whose companies go bankrupt and who are thus not in a position to get any severance pay whatsoever.

I know the minister will be aware of the closure and the bankruptcy of the CCM plant, which has been in existence since 1899 in this province making bicycles for people of all ages. How does the minister feel about the fact that more than 400 workers have been laid off as a result of the bankruptcy of that firm? Many of them have been working for that firm for more than 35 years, many are the third generation of workers to be working for CCM, and they are not going to get a nickel of severance pay from that company. They will not receive a dime in recognition of their 30 and 40 years of service to that company.

How does the minister feel about that and what does he intend to do about it?

Hon. Mr. Ramsay: Mr. Speaker, I feel the same despair and the same sorrow the honourable member opposite feels.

Mr. Rae: I am sure that will come as a lot of consolation to the workers who have been left out in the cold by this government, by virtue of the fact that banks come before people for this government.

Mr. Speaker: Question, please.

Mr. Rae: Mr. Speaker, my question is with respect to the pension plan that affects these workers. I wonder if the minister can confirm that, as a result of the fact the company did not pay all of its necessary contributions to the pension plan for these workers, they are going to be receiving far less in pension money -- on average $8 per year of service as opposed to $13.50 per year of service? I wonder how he feels about that when it affects workers 55 and 60, who the minister knows very well are not going to be able to find any more work for a very long time in Ontario.

Hon. Mr. Ramsay: Mr. Speaker, the honourable member opposite would like to leave the impression that he and his associates are the only ones concerned about the layoffs and closures that are taking place in this province each and every week. I would invite him to come into my office and to sit at my desk for a week and have to deal with each and every one of those as they come along. Then he would feel some real despair.

Mr. Wrye: Mr. Speaker, it is amazing that this minister, who is part of a government that has done nothing about the problem, would throw it back at the opposition and suggest we should be bringing in policies to solve the problem. It is his government that should be doing so.

Mr. Speaker: Question, please.

Mr. Wrye: I am well aware of the minister's views on federal initiatives to solve the problem of severance pay in the case of bankruptcies. Can the minister outline for us, though, what initiatives he is now considering, if he is considering any at all, on the severance pay issue? I refer to initiatives that will ensure the vast majority of people who are laid off permanently, who are thrown out of work by plant closings, will indeed receive severance pay -- and so few are -- and get that extra floor underneath them to help them as they look for a new job?

Hon. Mr. Ramsay: Mr. Speaker, first I was not throwing the problem back at the opposition. I know where the responsibility lies: it lies with this government, and we are dealing with that responsibility. There are only two other jurisdictions on the North American continent that have any severance pay whatsoever. We are dealing almost weekly with the federal government, hoping they will address the bankruptcy problems with Bill C-112.

Mr. R. F. Johnston: Mr. Speaker, it is not just CCM; it is many companies, as the minister knows. Can he tell us what is happening to the workers at the Konar Corp. in Scarborough, my riding? It is an electronics firm, high tech, which makes computer boards. As of January 14 it has laid off 100 more employees with no vacation pay, no severance pay and no pay for the last two weeks. What is the minister going to do to help those people?

Hon. Mr. Ramsay: Mr. Speaker, I am aware of the circumstances, and it is being investigated at the present time by our employment standards branch.

CASE OF ADY GANDOUR

Mr. Breithaupt: I have a question of the Attorney General, Mr. Speaker, concerning the case of Ady Gandour, a victim of armed robbery who defended himself and who then faced a charge himself. The charge was dismissed but then the dismissal was appealed.

Can he explain why the appeal was taken, who authorized it and whether they had a transcript of the evidence before authorizing it? Can he further explain why the crown failed to comply with the provisions of the Criminal Code and the rules of practice by not serving Mr. Gandour with the transcript?

Hon. Mr. McMurtry: Mr. Speaker, I first became aware of that case having read some newspaper reports today. I appreciate that it does raise some interesting and important questions, and I will obtain an answer for the honourable member. I do not have that information at the present time.

Mr. Breithaupt: While the Attorney General is obtaining that information, can he find out for me as well why the 140-page transcript and the crown memorandum of fact and law were not served on counsel for Mr. Gandour until two working days before the appeal was to be heard? The rules of practice require that the material be furnished at least two weeks before the appeal and, in fact, the crown had the transcript for two months before that.

Finally, can he tell this House why, since every move the crown made in this case has been shown to be wrong, the Attorney General's ministry should not compensate Mr. Gandour for his expenses at trial as well as on appeal? This should be regardless of what order may be eventually made with respect to costs.

Hon. Mr. McMurtry: I will certainly undertake to obtain the answers to the other questions raised by my honourable friend in his supplementary question with respect to what happened here.

However, I would like to inject this modest caveat: I think it would be unfair -- and I am sure the member would agree -- to make any final judgement in this matter based on fairly incomplete media reports. I am not suggesting the journalists who were interested in this case have not done their best to obtain the relevant information, but I think we must have all the information before we make any judgement about any impropriety, or possible impropriety, on the part of the crown attorney's office involved in this prosecution.

INVESTIGATION OF CHILD ABUSE CASE

Mr. Samis: Mr. Speaker, I have a question of the Minister of Community and Social Services regarding the sorry saga of the 15-year-old girl from Alexandria.

Now that he has had time to assess the reports on the matter, and reflect on them, could he advise the House whether he is satisfied, in his opinion, that the children's aid society acted in the best interests of the girl in the matter?

Could he advise the House of the nature and scope of the investigation his ministry has launched into the matter? Could he explain whether parties other than the CAS would be allowed the opportunity to provide input into that investigation?

Hon. Mr. Drea: Mr. Speaker, if the honourable member had been following some of the remarks I have made, he would know the third part has already been taking place for several days, even prior to the events of last Wednesday. I am still collecting information, and when I have collected information -- it is public knowledge; I am surprised the member does not know -- from a great number of jurisdictions, I will come to some conclusion.

There have been some press reports concerning a telegram to me. I do not know who sent the telegram, because there is no name on it. I understand counsel in the matter has said he knows nothing about it. However, it is incumbent upon me to say the following words about the matter.

Since this case is before the courts, it would be highly improper for the minister to intervene by meeting with this juvenile or her representatives prior to the court hearing on February 2, 1983. The court is the proper place to hear any and all representations in the matter. Meanwhile, I have asked the official guardian to act as guardian ad litem in this case before the courts.

3:30 p.m.

Mr. Samis: Mr. Speaker, can the minister be a little more specific in outlining the exact parameters of his investigations as opposed to just receiving reports? Exactly what is his ministry investigating in the matter? Can he advise us whether he has had any communication with the children's aid society as to the possibility of pressing charges in the hearing? Can he also tell us exactly whom he has spoken to so far in terms of receiving his information?

Hon. Mr. Drea: Mr. Speaker, I am perfectly prepared, at the end of what I am doing, to discuss where my information has come from. I am in the process of collecting it, and I think the honourable member will know it is from several jurisdictions, and not just the county of Stormont or the jurisdictional area of that children's aid society.

I also point out to the member that I have said, and I think I have been quoted quite accurately, the information I am seeking and getting, and some is still coming to me, deals with all the events of 1982.

Mr. Nixon: Mr. Speaker, has the minister informed the other children's aid societies, in the unlikely event this matter surfaces again while the review is continuing, that they might seek the advice of the Attorney General (Mr. McMurtry) or the official guardian before they make a specific decision at the local level?

Hon. Mr. Drea: Mr. Speaker, that is quite well known to children's aid societies.

Mr. Nixon: Does the minister mean since the event?

Hon. Mr. Drea: It had been known for some time previously.

Mr. Nixon: Were they were supposed to have done that?

Hon. Mr. Drea: No. In answer to the supplementary question, let me say -- and this has nothing to do with last Wednesday -- it has been a policy that the 51 children's aid societies in this province have autonomy in this regard. They make their own policy, provided it is within the statutes of the Dominion of Canada. If they need advice, they know that under the Child Welfare Act they can go to my area director. They know they can seek advice from the office of the official guardian. That has always been there.

TAKEOVER OF TRUST COMPANIES

Mr. T. P. Reid: Mr. Speaker, I want to ask a question of the Attorney General in regard to the situation surrounding the individuals involved in the three trust companies. I am concerned about the legal rights of those people as we have them under our new Constitution.

Does the Attorney General feel that the rights and privileges of Mr. Rosenberg particularly, as well as perhaps those of Mr. Player, Mr. Markle and others involved in this, and the due process of law in our Constitution are being protected, and that Bill 215 does not offend the Charter of Rights but protects the due process of law and the rights of those people as individuals?

Hon. Mr. McMurtry: Mr. Speaker, I am of the view that Bill 215 does not offend the new Charter of Rights. I also want to say that obviously the rights of shareholders, common or preferred, have been very much a matter of concern for the executive council and, indeed, for all members of the government caucus, as well as our concern for the depositors.

It is quite clear from what has transpired that very significant emphasis has been placed on the rights of the depositors, and every reasonable effort has been taken, is being taken and I hope will be taken to do what we can to bring about a result pursuant to which no depositors are out of pocket.

Whether this will happen will depend to a great extent on what happens here in the next little while, as the Minister of Consumer and Commercial Relations (Mr. Elgie) has already stated. He stated in this House that he was fully in support of a mechanism that would provide a forum for any of the shareholders, preferred or otherwise, if it can be alleged at any point down the road that they have been treated unfairly, unreasonably or arbitrarily.

He has stated to the Legislature that this would be done even if it required amendments to legislation -- and we are not just talking about Bill 215; members are probably familiar with section 8 of the ministry act, which provides certain protection for people like the registrar, unless they are not acting in good faith.

As these matters evolve, the honourable member can rest assured that the legitimate rights of these individuals will be carefully considered. The government will make every effort to ensure they are treated fairly.

In a very difficult situation such as this, it is quite clear that one has to establish some modest order of priorities. What is critical now is the protection of the rights and interests of the depositors. By moving in that direction, we do not have to sacrifice the rights of any of these other individuals. That does not necessarily follow.

I am afraid what some people on the opposite side of the House appear to be suggesting is a course of inaction that would undermine and be detrimental to the rights of not only the depositors but also the shareholders of both preferred and common shares.

Mr. T. P. Reid: I am somewhat shocked that the Attorney General, the first law officer of the crown, seems to put the rights of shareholders, which we are all concerned about, above the principle of the rule of law in Ontario.

Hon. Mr. McMurtry: Do not twist what I said. That is not what I said at all.

Mr. T. P. Reid: The Attorney General's words are in Hansard.

Hon. Mr. McMurtry: Yes. Fortunately they are.

Mr. Speaker: Question, please.

Mr. T. P. Reid: If we look at the Canadian Constitution, I believe what has gone on here, and to some extent Bill 215, offends the preamble to the Constitution and sections 1, 10 and 11. I am concerned that sections 9, 10 and even 11 of Bill 215 offend those rights and the rights of the individuals concerned. I find it strange that the Attorney General puts the shareholders above the rule of law.

Mr. Speaker: Question, please.

Mr. T. P. Reid: First, was the opinion of the Attorney General and his law officers asked for in the drafting of this bill? Second, can he assure us by stating specifically the rights of those individuals to go to court to recover those rights or to be judged? Whether we like it or not, those individuals have been judged and tried by him by bringing in Bill 215. We want to know what recourse there is for any individual in this province to have his say in court.

3:40 p.m.

Hon. Mr. McMurtry: How the member could possibly distort my earlier answer and infer that I had said the rights of the shareholders were somehow above the rule of law is really beyond me. I hesitate to attempt to respond any further to his question, because obviously he is choosing not to listen to my response.

Fortunately we have an excellent Hansard staff that records our responses. With some of those people making the foolish statements they do, it would be an unhappy situation if we did not have an excellent Hansard staff.

I said that in my view the legislation did not offend the Charter of Rights. I said that our immediate concern was the rights of the depositors and that we were attempting to do everything we could at this point to protect their rights. Obviously, and it is to be hoped, the shareholders will benefit if the security of the deposits currently with this company, or those deposited with Crown Trust Co. and the other companies, are protected.

I simply said that in my view the Minister of Consumer and Commercial Relations had made it abundantly clear to this House on a number of occasions that in recommending initiatives to protect the depositors, he was in no way turning his back on what may be the legitimate rights of shareholders, both preferred and common. If the member does not understand that, that is his problem, not mine.

AMI (CANADA) LTD.

Mr. McClellan: Mr. Speaker, I have a question for the Minister of Health with respect to his apparent new policy of privatizing Ontario's hospitals in violation of our tradition of medicare and the federal medicare legislation.

I would like to ask the minister, who described the AMI (Canada) Ltd. deal with the Hawkesbury and District General Hospital as an experimental process, whether he would tell us the names of the six large hospitals in Ontario which Mr. Gerry Rowe, president of AMI (Canada) Ltd., indicated to us his firm was negotiating with for additional contracts, in view of the fact that Mr. Enright of the Ministry of Health has told us as well that the ministry is a keen observer in these negotiations.

Since I do not have time for a supplementary, would the minister also tell us the name and the location of the chronic care hospital which Harold Livergant, soon to be the owner of Crown Trust, intends to build on the grounds of a hospital here in Ontario during the course of the next year?

What are the six hospitals currently negotiating with AMI for additional contracts, and where does Extendicare intend to build its private-enterprise chronic-care hospital here in Ontario?

Hon. Mr. Grossman: Mr. Speaker, I do not know where Mr. Livergant or Extendicare plans to commence construction of a new chronic care facility in the next year.

Mr. McClellan: He says he is negotiating with you.

Hon. Mr. Grossman: I am giving the member the answer. With regard to the six other hospitals, AMI, like a lot of firms, probably is having discussions with many hospitals with a view to convincing them that it can bring some expertise to their hospitals. Only when that hospital wants to get approval from the ministry will it bring a hard and firm proposal to the ministry and ask, "Is this the sort of contract you would find acceptable?"

With respect to those six hospitals, there may be fewer, there may be more; and they may be negotiating with AMI and others. But that is not our concern until AMI and the hospital come to us and seek permission to proceed.

CORRECTION OF LEGISLATIVE BUILDING DISPLAY

Mr. R. F. Johnston: Mr. Speaker, on a point of privilege: I have received some information from a closet left-wing journalist in the gallery, who no doubt will therefore want to remain nameless, but I verified the information, and it is a slight against the entire caucus of the New Democratic Party that I would like you to correct at your earliest opportunity, if you might.

There are display cases downstairs with historical information on Ontario, and in one of them there is a reference to Agnes Macphail and Rae Luckock, two great former members of the Co-operative Commonwealth Federation and women's rights activists. The CCF is called the Co-operative Consolidated Federation rather than the Co-operative Commonwealth Federation.

I wonder if you would correct that for us, because it is a bit of a slight, you will agree.

Mr. Speaker: I sure hope none of my staff was responsible for that, but I will be very happy to have it corrected.

Mr. Swart: Mr. Speaker, on the same point: Will you find out whether the same person who did that prepared these documents on our desks, which list 21 members of the NDP instead of 22?

Mr. Roy: Mr. Speaker, on the same point of order: If that party was so much in love with the name "CCF," why did it change it?

Mr. Speaker: That is not a point of order.

REPORT

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

Mr. Robinson, on behalf of Mr. Shymko, from the standing committee on social development reported the following resolutions:

That supply in the following amounts and to defray the expenses of the Ministry of Health be granted to Her Majesty for the fiscal year ending March 31, 1983:

Ministry administration program, $73,651,000; institutional health program, $3,901,820,000; public and mental health program, $527,953,000; health insurance program, $2,040,333,000.

Further, that supply in the following supplementary amount and to defray the expenses of the Ministry of Health be granted to Her Majesty for the fiscal year ending March 31, 1983:

Institutional health program, $110,000,000.

MOTIONS

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

Hon. Mr. Wells moved that the standing committee on resources development sit Monday evening, January 31, rather than Tuesday evening, February 1.

Motion agreed to.

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

Hon. Mr. Wells moved that the standing committee on social development be authorized to travel to Kleinburg, Ontario, to visit the McMichael gallery on the afternoon of Wednesday, February 2.

Motion agreed to.

3:50 p.m.

ORDERS OF THE DAY

CROWN TRUST COMPANY ACT

Hon. Mr. Elgie moved second reading of Bill 215, An Act respecting Crown Trust Company.

Hon. Mr. Davis: Mr. Speaker, I appreciate the fact that it is traditionally the good fortune of the minister to lead off the discussions, but it is such an important debate that I want the opportunity briefly to make a contribution. I am doing so early in the debate because I think I know what may be said from across the House and, quite honestly, I will be in other places later on today.

Mr. Cunningham: The Senate?

Hon. Mr. Davis: The Senate? No, no.

Mr. Nixon: He's going to stand around in Winnipeg in case there is a draft.

Hon. Mr. Davis: Actually I am headed for Minnesota to pour a little oil on troubled waters. Is that a good way of putting it?

Mr. Cunningham: Are you going to Hawaii?

Hon. Mr. Davis: No, I am not. Listen, I want the member to know, I have been a fan of the Dolphins for nearly as many years as the Argonauts. That is not bad in one year: Argos in the Grey Cup and the Dolphins in the Super Bowl. No, I am not going to look at the domed stadium either. I am meeting with the governor to discuss matters of mutual concern, whatever they may be. I may get delayed there.

Mr. Riddell: I'm sure Joe Clark won't miss you.

Hon. Mr. Davis: Mr. Speaker, I direct my remarks to everyone but in particular to the member for Kitchener (Mr. Breithaupt), who over the years has been one of the resident experts in this field, and to the new leader of the New Democratic Party (Mr. Rae), who is a lawyer by profession if not by training and knowledgeable in the economic field; he is a gentleman who is interested in equity and justice and who has the capacity, I hope, to centre on what really is the issue in the bill we are debating.

I listened to the observations of the House leader of the Liberal Party (Mr. Nixon), and I will make no observations about the perception of a reporter from the Toronto Star. I never quarrel with what is reported, because I learned long ago that it does not do me any good in any event.

I was almost unhappy, sir, when you ruled the last question of the Leader of the Opposition (Mr. Peterson) out of order a few moments ago, because I was well primed for an answer -- no, I cannot do it when he is not here; it is no fun.

Leaving all that aside, I want to deal with this in what I hope will be a nonprovocative and serious way. The reason I am entering into this discussion is the serious nature of the situation and the very real, tangible possibility of a solution to an important part of this problem through the passage of this legislation.

I am endeavouring in these brief remarks to try to come down on what is the basic issue. I have been here for many years, and I do not minimize the interests of the members opposite; I do not quarrel with the political arena, because that has been my way of life, and it has been the way of life of many here. But I say to the member for Kitchener that there obviously will be ample opportunities to debate some of the peripheral areas -- and there are some; I do not minimize them for a moment -- and that I hope we can single out the issue at hand as contained in the bill itself.

The bill really is simplistic; it has been described by the member for Ottawa East (Mr. Roy) as draconian. I am not going to use that sort of language. It is a unique bill; I do not question that for a moment.

Mr. Sweeney: It is precedent-setting.

Hon. Mr. Davis: Yes, I say to the member for Kitchener-Wilmot. We have set precedents in this House before, we will be setting them again; that is one of the responsibilities of any Legislature. I am not reluctant to set a precedent, although I may not always be comfortable with some precedents.

A precedent was set when the member supported us in the bill respecting restraint. That was a precedent in many respects for the members of this House. The member was not reluctant then. Some of his colleagues were a little reluctant, but they did not say so. I know the member supported it with enthusiasm. The member's colleague the member for St. Catharines (Mr. Bradley) supported it with enthusiasm, except when he was talking to some of his friends in the teaching profession.

Mr. Nixon: Do you have anything to say about this bill?

Hon. Mr. Davis: Yes, I am getting around to it, but the Liberal House leader's colleagues are interrupting me. Will he keep them in order?

I think the issue is very simple. There are some critics and there have been stories written that suggest maybe there is some other agenda or a hidden motivation. The member for Ottawa East is not comfortable with the wording of the bill, but I believe it is very clear. I do not think there can be any ambiguity in the bill. There cannot be any confusion. The bill is designed very specifically to protect the depositors in Crown Trust. That is what the bill is about. It is the intent, and it will be the practical application.

I am sure the government will hear many issues -- I do not say irrelevant, by any means, or maybe even unrelated -- but when it gets right down to the crunch and the members opposite are called upon to vote, the intent of this bill, the practical implication of this bill and its practical application are simply this: Through this bill, the government in co-operation with Canada Deposit Insurance Corp. and to a certain extent with the very clear understanding from CDIC that without this bill their support of the ongoing nature of Crown Trust in some form or another would not be supported. That, in essence, is what the members opposite are going to be asked to vote for or against.

I understand that the members opposite will try to rationalize their way around wanting to protect the depositors of Crown Trust while at the same time voting against the bill. I sense what they are going to do. I say that with some regret, because I think there are occasions when we can separate ourselves from the politics of a situation, when we can recognize the simple intent of a bill and say that for these reasons we intend to support it.

We are not asking the members opposite to lessen their concern about Seaway or Greymac. We are not asking that the debate as it relates to the Morrison report or any other documentation be limited in any way. What we are saying is that it is incumbent upon all of us as legislators acting in the public interest, vis-à-vis the depositors in Crown Trust, to demonstrate that we, the members of the Ontario House, have found a vehicle whereby they can be protected. Whatever the rhetoric that may be used or whatever the rationalization that may take place, I ask the member for Kitchener, whom I have known for many years, whether in his own heart of hearts he can stand up and oppose a bill that accomplishes this objective.

There have been certain discussions as to some other aspects of the bill that relate to the concern of shareholders, both common and preferred. I did not hear all of the Attorney General's answer, but this too has been taken into consideration. The legal opinions we have received indicate that this legislation does not take away the ultimate rights of the preferred or common shareholders or other creditors once this bill has been approved.

I am not going to lead anyone astray. I am not an expert in this field, and I readily confess it. I am not saying for a moment that the assets will be sufficient to look after the total needs of the creditors and the preferred and common shareholders, but the opinion is that the shareholders will have none of their legal rights abrogated. I heard the minister say -- and I do not take any pride of authorship in terms of any legislation -- that if there is some doubt as to the legal rights of the shareholders, the minister would not be reluctant to see credible amendments to make that abundantly clear. It is the intent of the bill.

In the question period, it became obvious that the rights of the preferred and common shareholders and the creditors will depend to a very great extent on what has been described as -- I have never heard this term before -- the "soft assets," that is, those mortgages that are at this time of questionable value. It may be that somebody will emerge at some time and say to us, "Here are the funds to pay those third or fourth mortgages," whatever it be. There may be some dollars; I sincerely hope there are, but at this moment there are not. That does not alter the fact that in the opinion of those making these assessments, the value of those mortgages is in excess of the loan limitations in the Loan and Trust Corporations Act. I think there has been very little debate about or disagreement with that position.

Mr. T. P. Reid: We do not know. We are taking your word for it.

Hon. Mr. Davis: No. I say this not to go back in history to be provocative, but my recollection is that the Leader of the Opposition and others at the time of the consummation of the Cadillac Fairview deal, as it has been described, cast very real doubt as to the value of -- whatever it was -- $500 million. They raised it with us, and with cause.

4 p.m.

We have opinions in terms of valuations, or opinions given by those who are knowledgeable in the field, that without question these X mortgages -- and I cannot give the number -- exceed the traditional value approach for real property mortgage value. The member for Rainy River may not accept this advice, except I think it was his own party which suggested this at one point.

So, whatever the legal opinions that we have received may be, I would make it clear -- and the minister said this in answer to questions on Tuesday afternoon last -- that if there is any doubt, to my view at least, it would be very simple to make it abundantly clear. But that, too, is the intent of the legislation.

I have lived with this issue in a peripheral sort of way during these past few weeks and I do not purport for a moment to be as knowledgeable as the minister. But I really have explored, as best I can with my limited ability in this area, just really what are the alternatives. I think maybe at the point when the registrar moved in under the legislation which we approved in this House in December, there was some hope, because one always lives in hope, some expectation or hope, at least, that maybe there was sufficient substance in Crown Trust that it could be rescued in its entirety without any action of this kind.

I would remind members that I do not think I am being unfair to the Leader of the Opposition, because while I had a discussion with him prior to the introduction of that bill I do not think I asked him to keep it confidential and I sense from what he has said since the meeting that he certainly did not keep it as confidential. I am not quarrelling with that. But I recall him observing to me, when he knew the general thrust of the legislation, "You may not be going far enough because you may have to do" what it is we are proposing to do in this bill.

I do not know whether in debate on the bill the minister said this -- I know that I felt it at the time -- but we recognize that the bill that was passed in December did not provide for a solution of this nature. I think it was clearly felt by many of us who listened to the discussion that that was a possibility we hoped might not occur, but one which we realistically anticipated and one where we felt we should deal with it on an individual basis rather than having universal or comprehensive legislation on the statute books of the province. I happen still to believe in that point of view.

The member for Ottawa East keeps reminding me of how important -- he uses a different word -- this legislation is. One of the redeeming characteristics, I would say to the member for Ottawa East, is that we are not doing this by way of general legislation. It is related to a specific event, a specific entity, which we feel, in our terms of responsibility, we must do our best to assist or to find a solution for.

I can only say to the Leader of the Opposition -- and this has really not been a secret; the minister has indicated this -- those people advising us on this issue have been seeking and have received -- and I cannot tell the House leader the nature of those; I guess I can guess at the nature of the proposals that have been made, but I can tell him that no judgement has been made; at least there has been no recommendation to the government. I can say that in total sincerity, because it has not happened.

Obviously this legislation is predicated upon somebody assuming some measure of responsibility. We would not be passing this legislation if we did not think there was that very real possibility. So I say to the members opposite, really there was not any alternative.

I have listened to the views expressed in many question periods and in the debate earlier as to how we got there, the problems that are there, etc., but I really did not hear -- and I do not say this in any critical sense -- any alternative to what the government is doing. I really did not. If the members opposite explore their own consciences and their own recollections, they will be hard pressed to find any suggestion, other than this, as a credible way of dealing with the situation related to Crown Trust.

There was the suggestion -- and I think the minister referred to this, and I will just remind ourselves -- that perhaps the legislation could have gone the route of selling the shares. That would have been an expropriation of the shares. Some would argue that would be, in legal terms, I say to the member for Kitchener, a cleaner way and a more simplistic way of dealing with the issue. He has had far more experience in the law than I have had and I would not quarrel with that legal point of view.

But I personally was not comfortable with that and I really do not think it was considered seriously from the standpoint of putting it into the legislation. I do not say for a moment I am holding out any great comfort to the common or preferred shareholders, but I think the route we are going at least does provide some measure of potential realization of the investment they have.

If one looks at what it is we are attempting to accomplish, if one in fairness really asks himself if there is any other route to go but this one. I say with the greatest respect I would find it difficult to have the members opposite say at this late stage, "You can now do thus and thus." I fully expect some of them will say, with the 20-20 hindsight we are all blessed with, "X number of years ago, one might have done thus, thus and thus." I understand that, but that is not the bill and that is not the intent of what we are trying to accomplish.

Because we are not dealing only with investors, it is also important to point out that if we went the only other route of liquidation, we are also dealing with people and with X number of employees of Crown Trust. Some members will say that in terms of numbers it is not as large as in some areas in the auto sector and so on, but they are human beings, they are people employed in Ontario. Again there is no question, if one looks at the human aspect along with the question of the depositors, that one has to say, "Here lies a better opportunity for the jobs of the employees of Crown Trust to continue."

I have had no personal experience but I have had people who have been investors or are investors in Crown Trust who have been very complimentary at the way the employees have reacted to the present situation, and they speak highly of the bulk of the employees of that historic trust company in this province. So there is, as a peripheral issue, the concern of the employees of that organization, which I think can be maintained if the direction followed in this legislation is approved.

Mr. Roy: The employees get no protection under this act.

Hon. Mr. Davis: No, I recognize that. There is nothing in the act that says that, because I cannot guarantee that, but I am telling the member and I hope he assesses what I am saying with his usual attitude of fairness. I am trying not to be provocative but I could be provoked. His leader has said the odd provocative thing over the past few weeks, but I do not intend to today because this bill is too serious.

Third, and this too is essential to all of this discussion, we are not operating here in isolation: we are operating with the Canada Deposit Insurance Corp. and I want to compliment it. I do not know any of them and I have never met them. I guess they are a sort of anonymous group, which sometimes has great comfort -- people who are discharging a rather difficult public responsibility.

They have been involved in this from day one. They knew of the need for us to move in under the previous legislation and they have, in my humble opinion, acted not only as responsible managers or whatever title one gives them, but they have operated as responsible insurers with a very real measure of sensitivity in relation not only to the possibility of Crown Trust being continued in one form or another, but, most important, to the depositors themselves.

I am not going to say that CDIC said to us, "It is this or that or we do not perform." I was not part of the discussions, but I genuinely believe that what was developed was done in a spirit of co-operation. Let us not fool anyone. They do have a statutory obligation or mandate. They are limited in terms of what they can and cannot do. I say to the leader, and he can convey this, whether it is $100 million or $150 million I honestly do not know and I am not sure anyone can give him the exact figure because I am not sure it will be known for a period of months, maybe even a couple of years.

Mr. Haggerty: Years?

Hon. Mr. Davis: It may not be, because they are going in and saying: "We think there is sufficient strength there. There is a sufficient asset base so that we are prepared to guarantee every single depositor in Crown Trust." That is a guarantee I do not think the members opposite want to ignore. I know they do not, and one way not to ignore that is simply to vote for this bill.

Mr. Conway: We know where they are going to get that money, though. We know where most of that money is going to come from.

4:10 p.m.

Hon. Mr. Davis: I would say to the member for Renfrew North (Mr. Conway), I am not an expert. The money comes into Canada Deposit Insurance Corp. through premiums or whatever. It is public money in that sense of the word. But can I say to the member --

Mr. Conway: Jack Biddell told me that most of it comes from the federal Treasury.

Hon. Mr. Davis: It may, and that is the member's money and mine; and in that the member has no deductions whatsoever -- and it is time he had some -- it is probably more of his than mine on a percentage basis, although my deductions have now diminished.

Mr. Nixon: Of course, the Premier's salary is a bit bigger.

Hon. Mr. Davis: Yes. But I would say to the member for Renfrew North, I think there is some expectation -- or I do not think CDIC would be doing this -- given the proper approach that we are attempting to develop, that while CDIC will have to put up funds it will not lose any money.

Mr. Nixon: They would have preferred that you did not mess it up in the first place.

Hon. Mr. Davis: There is no guarantee of that, but I am sure that Mr. Biddell may have communicated to the members over there that there is every expectation. In fact, I do not think CDIC would be doing it if it did not think it was minimizing or lessening its exposure. They are not philanthropists there. That is not their obligation.

Mr. Kerrio: The feds bailed the government out again. You are in deep trouble.

Hon. Mr. Davis: I have learned in my political life never to be reluctant to express appreciation or give credit. If the member wants me to say publicly that an agency that has been created by the government of Canada, after this province took the leadership with respect to the provision of the additional $20,000 guarantee, and that it once again followed our lead to make it a national rather than just a provincial program, I would say to the member for Niagara Falls (Mr. Kerrio), I am prepared to give that measure of credit. I have no hesitation or reluctance in doing that.

Mr. Nixon: What gall. He gets into a mess and they have to bail him out.

Hon. Mr. Davis: The member says, "What gall." Listen, we have been bailing out the government of Canada for years. The member knows that. We have been giving them leadership. He knows that.

Interjections.

The Deputy Speaker: Order, please. Bill 215.

Hon. Mr. Davis: The members are provoking me. I know what that party's former leader said and I know what the present leader has said about the present federal leader and Prime Minister of this country.

Mr. Conway: I know what the Premier thinks. His government's record speaks for itself.

Hon. Mr. Davis: So does the member's record. Does he remember the Community Party?

Mr. Foulds: Stay on the high road, Bill.

The Deputy Speaker: Order. Would all honourable gentlemen refrain from provoking the Premier and let him get on with Bill 215?

Hon. Mr. Davis: That is right. The Premier is a sensitive soul and does not want to be provoked.

Mr. Conway: This from the man who eviscerated Joe Clark.

Hon. Mr. Davis: That is all right, but I have never hesitated to run and have our candidates run as Progressive Conservatives. They have not become candidates for the Community Party of Ontario. Think of the shame in York South.

Interjections.

The Deputy Speaker: Order, please. Back to Bill 215. Will the member for Sudbury East (Mr. Martel) allow the Premier to continue his remarks on the bill?

Hon. Mr. Davis: Have I convinced members yet?

Some hon. members: No.

Hon. Mr. Davis: That is one of the early shortcomings I have seen in the member for London North (Mr. Van Horne).

Mr. Speaker, I think I have tried to narrow down the issue that is in front of the House. I do not say for a moment that there will not be opportunities for debates and committee discussions of other aspects of this broader issue. I suggest, with the greatest of respect, that while I think it is obvious this has not been an easy matter for the government, we believe that through the sensitive, intelligent and logical way this has been handled by the minister, we have found a vehicle, we have found a piece of legislation which, in essence, is simple. Some lawyers may say it is complicated but it really is very simple.

I say to the member for Kitchener, the legislation is this. With his approval, with some proper consideration, diligence and a sense that it is important that it be moved forward expeditiously, as legislators in this province we can, by this bill, move in and assure the depositors in Crown Trust, one of the historic, traditional old institutions in this province, that they will be protected. That is what the bill is about. That is what the members opposite are being asked to support or oppose.

I caution the members that I could conjure up, if I were of the mind, the rhetoric and rationale for not supporting it, but I think the public will know, I think all of us in this House will know that if this bill is not being supported the members opposite have missed the essence of the bill. That essence is the protection of the depositors and the ongoing activities in one form or another of Crown Trust and the important ingredient of Canada Deposit Insurance Corp., which has said this legislation is essential for us to move in and guarantee the operations in one form or another of this organization.

In one final brief observation, because I have lived through several issues in my limited political experience --

Interjections.

Hon. Mr. Davis: The members opposite can interject as much as they like, but I want to say this. I have been in constant communication with the Minister of Consumer and Commercial Relations. It is easy to be critical. The members opposite do not have to listen to me. I will turn around and say it to the minister, and the member from Wetland or Wentworth or wherever --

Mr. Nixon: Get to it.

Hon. Mr. Davis: I do my best on occasion to -- I will say it to the Speaker; I want to put it on the record. I do not know of any minister of the crown on an issue of this nature who has worked harder, with greater integrity, with greater intelligence, with greater sensitivity, with the objective of protecting the depositors, finding a solution that is workable and practical, and who has given the effort, the nervous energy, the enthusiasm, the honesty -- any descriptive word one wishes to use.

I want it clearly on the record that the Premier of this province is saying to the minister -- maybe the members opposite will not like it, or maybe in their heart of hearts they will tend to agree, but I want them to know -- that he has handled this extremely well. That is not just my assessment. It comes from individual depositors in Crown Trust. It comes, very importantly, from the industry, people who know what has happened, who know what is going on, who have some realization of the complexity and importance of this issue.

In case there is any doubt in the mind of the minister, I may not be here for the vote, but if I were here I would vote for it not only as a matter of enthusiasm, but also in recognition of the great work he has done in handling a most difficult situation.

Mr. Breithaupt: Mr. Speaker, I suppose I should begin my remarks by saying that this minister has indeed worked in a dedicated and honourable way. He has done all those things the Premier has said. He has done as much as the last one who had to do it. That is the difficulty within this province.

Despite the blandishments and the encouragements of the Premier, I regret to advise you, Mr. Speaker, that at this time we cannot undertake to support this bill. It is offensive on many counts. There is no regard whatsoever for requirements of due process. It is a device to cloak in secrecy all future activity by the ministry and by the registrar.

We have had regard for the information of Mr. Jack Biddell. We have heard his advice regarding the merits of the sale of Crown Trust. However, the only details we have, the ones of the proposed sale, are gleaned from reading this bill, and that is very oppressive information. Since the end of October 1982, we have been calling for a public inquiry, first, into the Cadillac Fairview deal, and lately into the horrendous trust companies fiasco.

Initially our concerns were focused on tenants and those concerns for the tenants involved, some 10,000 or so, persist. We pointed out in November that in the event the series of flips in the Cadillac Fairview sales were mere sham transactions, then not even one nickel of increased rents would be justified. We are increasingly concerned for tenants as they receive notices for rent increases of as much as 19.5 per cent. We are concerned about a potential failure of delivery of services to tenants as a result of this trust company fiasco.

We began raising these concerns over compliance with the Loan and Trust Corporations Act. We were concerned about the value of trust company assets because it was this value that stood behind the depositors' money. Immediately after the province's seizure of these companies, we urged the federal government to increase the claims limit to $60,000 under the Canada Deposit Insurance Corp.

4:20 p.m.

Ever since this government disclosed its intent to sell Crown Trust, we have repeatedly asked it to give comparable assurances to the depositors of Seaway Trust and Greymac Trust. The depositors in those two companies have some $500 million on deposit. They are every bit as entitled to full recovery of their deposits as are the depositors of Crown Trust. There is no apparent justification for giving any Crown depositor preferential treatment.

Looking at a list of municipalities provided to me by the treasurer of Kitchener this morning, while some $31 million, by his quick calculation and phone calls, appears from municipalities that have placed funds with Crown Trust, there is $1 million in Greymac Trust from the city of Mississauga, $1.5 million from Hamilton-Wentworth and $500,000 from the borough of East York. There may be more. I have no particular knowledge of any municipalities that have funds involved in Seaway Trust, but there may be some.

We only have to look at the variety of institutions that are involved, not only municipalities but organizations such as the Peel school board, which I am informed has some $3 million in Crown Trust.

Mr. Cunningham: The local member will hear about that.

Mr. Breithaupt: Yes, I presume the local member will hear about that, as many of us have heard, particularly as I have heard my city of Kitchener has $1 million on deposit in Crown Trust. It has certainly been our concern.

Mr. Barlow: You don't want it out, do you?

Mr. Breithaupt: Yes; I might even have preferred that it had never gone in. Be that as it may, I would like to see those funds out. I am going to suggest to the member for Cambridge (Mr. Barlow) that there are some other things we also have to look to in this regard.

The concerns we have raised with respect to the tenants and the deposit protection, not only in Crown but in Greymac and Seaway, are well known to the minister. Our concerns have been echoed in the other three preconditions for our support of Bill 215.

The conditions we have placed before the public from our point of view are as follows: first, the guarantee of all deposits within all three trust companies; second, government consent to a full public inquiry; third, public documentation supporting the necessity of a speedy sale of Crown Trust. I might add the fourth particular area in which we are all interested is the rule of law and the preservation of the rule of law in this and the other contingent matters.

We will be introducing a variety of amendments to this bill. On January 25, the minister told the House with reference to this bill: "It was never the intention of the government to deprive shareholders or preferred shareholders some access in order to determine whether or not the registrar had acted with good commercial prudence. If the phrase 'good faith' does not provide that access then I am prepared to amend it in some way to make certain they do have that access to provide that the registrar, to their satisfaction, acted with good commercial prudence in what we are trying to do to protect depositors."

We will certainly be submitting a variety of alternatives to this legislation. The first area in which one must look at amendments is particularly how they will relate this bill to the Charter of Rights. This government was among the vanguard of the procedure by which we have now created within Canada our own constitutional responsibilities.

Let us look at some of the sections of this charter. Let us look at section 7, which says, "Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice."

Let us look at section 8, which says, "Everyone has the right to be secure against unreasonable search or seizure."

Finally, let us look at section 12: "Everyone has the right not to be subjected to any cruel and unusual treatment or punishment."

I was interested that in response to the questions from my colleague the member for Rainy River (Mr. T. P. Reid) the Attorney General (Mr. McMurtry) appeared not to place the quality on these component parts of the Constitution that I had thought his office and background would lead us to expect. The Attorney General was almost of the view that in particular instances a certain bending of, a certain dealing with, a variety of these themes could be considered to be acceptable if the Legislature so decreed.

But I suggest that the legal opinions upon which those views may be held, or indeed the legal opinions available to the Minister of Consumer and Commercial Relations as to the constitutional view that may well arise in this matter, are items that we in this Legislature should have available to us.

There is, of course, a second theme, and that deals with the rights of shareholders. As we know, Greymac Credit owns all but approximately 600 issued common shares of Crown Trust, well over 99 per cent of the total. But then let us look at the preferred shareholders, the series A and B groups that are involved. There are some 1,700 or so holders of preferred shares, exclusive of the institutional investors -- that is to say, the communities, the school boards, the municipal organizations and others to which I have referred.

The shareholders' equity of the preferred shares is in the neighbourhood of $20 million, so we are informed. According to C. Wallis King, acting on behalf of many preferred shareholders, this group is known in the trade as "the widows and orphans." I am sure it is not meant to be a derogatory statement, it is simply meant to show, in the tradition of the market, that certain issues and certain securities are often purchased by estates, by small investors who look for a certain stability, a certain income and not for a particular capital gain. As a result, companies such as Bell Canada or others of that ilk attract the purchase of small numbers of shares by smaller investors in their decision to seek that safety and liquidity and preference in juxtaposition to the matter of capital gain.

So most, or at least many, of these small holders whom one might refer to have got much of their life savings invested in these preferred shares, and this bill, to my view, cuts out all of their rights, whether under the Loan and Trust Corporations Act or under the Corporations Act. There is no insurance that applies to them under the Canada Deposit Insurance Corp. They have no recourse to any court or even to the Ombudsman under this act. They may be left with whatever Lenny Rosenberg can scrape together if he is left with only those soft assets of Crown Trust that were reported in the Globe and Mail and have been referred to in the Legislature this afternoon.

To suggest that these preferred shareholders should be left with only these soft assets is really a perversion of our responsibilities within the Legislature. After all, it was their capital infusion that permitted Crown Trust to acquire the hard assets that are referred to. We all know of the ability of a trust company to use its borrowing base and, from that capital, usually by a multiple of 20 times, to build up a portfolio of investments that come and go and are dealt with, for the benefit but from the base of the funds those shareholders have contributed.

Now we see that this government is going to hand out the remaining hard assets, possibly even at fire sale prices, and leave the legitimate, honest purchasers, those equity owners who have invested in either the class A or class B preference shares, with only the soft assets; and we all know that those soft assets are the third mortgages and the wraparounds and the other financial tools which might or might not accumulate some benefit in some years, at some time.

4:30 p.m.

We must restore the basic essential elements of due process to these shareholders of the preferred Crown Trust stock. The minister must know who many of these preferred shareholders are.

One holder was put through the nightmare of the Atlantic Acceptance Corp. and the scandal that resulted there. He lost almost his entire savings and as a result he made the decision to invest in only the safest company. Unfortunately, in this instance, he happened to choose to invest in Crown Trust preferred shares.

There are of course other preferred shareholders of Crown, who chose Crown Trust because of its security or because it was such a prudent, conservative investment. After all, Crown Trust dates back to 1897. It has been long regarded as a substantial and important company and it comes as a shock, not only on this side of the House but I am sure to the minister, his supporters and to the public of the province, that the assets of that company could be apparently so dealt with and so dispersed and compromised in but a period of three months.

Some of the people who invested in these preferred shares were burned in the British Mortgage scam. Some were involved in the Astra/Re-Mor fiasco. Possibly even some were burned in the Argosy collapse. Well, they all decided to repent, to make sure that never again would they involve themselves in a company that was small, or was new, or if its reputation was not known particularly to their broker or counsellor or bank manager.

None of them would have held back from investing in Crown Trust for those reasons, because none of those conditions certainly has applied historically to that company. Of course, some of the preferred shareholders really had no choice. They received their preferred B shares as a result of a share conversion.

The fairly extensive protections and due process provisions of notice available under the Loan and Trust Corporations Act are expressly, indeed intentionally, deleted by this bill, in fact, just about every right in law or equity is denied to these shareholders. They have no recourse against the purchaser or the registrar. The registrar can be negligent. He can even be grossly negligent, although I am sure neither of those will pertain.

If it is the case, and he acts in good faith, there is no hope for recovery by the preferred shareholders. They cannot go to court. They cannot have the sale reviewed by the Ombudsman. Even the victims wiped out by Astra and Re-Mor have recourse to the courts, slow though it is, and recourse to the Ombudsman, whether or not his recommendations are accepted in due course. These preferred shareholders cannot be heard by anyone. They cannot seek a court- appointed receiver-manager. Indeed, they cannot even obtain an accounting. So there is no insurance of any kind -- not a cent is available to them.

They are hopelessly and entirely wiped out if worst comes to worst. There is no benefit of any Expropriations Act or of due process. There is no benefit of disclosure. Indeed, even the protection under the Bulk Sales Act has been taken away from them by the proposals in Bill 215.

The government has, with great attention to detail, coldly and with calculation, deprived the 1,700 or so shareholders of their money -- I remind members they are mostly seniors and pensioners -- and of any and all means whereby they can seek recovery. That may be the result. The callousness and arrogance of this bill with respect to these preferred shareholders is really not acceptable. I suggest that shareholders must have notice of the operation of Bill 215 which is an essential element of due process.

Many of the preferred shareholders bought these shares at the urging of pension fund brokers -- A. E. Ames and Co. Ltd. is one organization that comes to mind. They really assume that these are in effect what one might call bonds without coupons. These are the kinds of investments that have automatic safety -- that may even cause payment to be made into their own bank account without any intermediate sending and receiving of coupons by clipping and taking to a bank or by the mailing of some cheque or whatever other obligation might occur. It is all automatic. It is all tidy and easy. For senior citizens dependent upon income to come in and flow through at a regular pace, it becomes a great disruption and may cause much serious personal damage.

Almost all the individual preferred shareholders have absolutely no idea how they will be affected by Bill 215. It seems clear that those holders of what seemed the safest security are about to be wiped out by this government. Notice, of course, is an essential element of due process and of natural justice. The bill has to be amended to permit notice to those affected and to permit them to respond.

In addition, the amendment should include a requirement that court approval will be sought for any abrogation of common law or rights under either the Loan and Trust Corporations Act or the Corporations Act that would be accruing to these shareholders. The onus lies upon the person seeking the abrogation of those rights to establish such as being necessary to accomplish the purpose of the act and as being also in the public interest.

The alternative is to make adequate provision for the preferred shareholders as a condition of any asset sale. There must then be that disclosure. The bill provides, unfortunately, that the registrar may take any of these steps in virtual secrecy. There is no aspect of any agreement entered into by the registrar that need ever become a fully public document. The agreement has effect when it is approved by the Lieutenant Governor in Council, but, as we well know, the agreement as such may never be published, tabled or released.

Moreover, the purchaser or the substituted fiduciary may violate the Loan and Trust Corporations Act and cabinet may excuse any such violation for any period of time on terms and conditions known only to the Lieutenant Governor in Council, which is to say the cabinet. It seems almost like shades of the Star Chamber in terms of what might or might not be done and what the reporting and openness is or might be in the future.

Our amendments will provide that any agreement entered into under section 3, subsection 2, and section 4 shall be laid before the assembly and deemed to be a statutory annual report within the ambit of standing order 33(b); and any contravention of the act and any waiver or variation thereof should only be made if necessary to fulfil the purposes of section 2 and if it is in the public interest so to do.

I might refer briefly to sections 134 and 145 of the Loan and Trust Corporations Act. These sections of that statute deal with the share transfer or asset purchase of a trust or loan company. They provide for shareholder notice and consent, and also for the protection of creditors' rights. Under the bill that is before us those sections would cease to apply to this transaction. The amendments we will bring forward would preserve certain of these sections in order to protect some necessary rights of shareholders and other creditors.

We should look at section 10 of this bill, which is so offensive to the rule of law, to a sense of justice, indeed to all notions of fairness, as to be called almost obscene. It gives the registrar immunity from any consequence to any person flowing from any action taken pursuant to the bill. The courts are virtually and totally excluded from reviewing the conduct of the registrar, unless it can be proved that he acted in bad faith.

I suggest this is entirely inappropriate and must be changed. The most straightforward amendment would permit application to a court by any person affected, with the necessity of requiring leave from a court so to do. Certainly no right in common law or equity should be taken away in this fashion. Moreover, no review of any transaction under the shield of this legislation may be reviewed, criticized or scrutinized by anyone, unless or until the registrar can be persuaded to bring the application.

We are called upon today to debate in principle Bill 215. The bill itself is introduced to this House with only three lines of introduction, which I will read: "The bill would enlarge the powers of the registrar of loan and trust corporations in respect of the management of the assets and obligations of Crown Trust Co. and provide the authority necessary for the winding down or orderly discontinuance of its affairs."

4:40 p.m.

I have certainly seen bills in my time, Mr. Speaker -- and I know you have in much more time in this Legislature -- which have had pages of notes at the front of them referring to a variety of things which were going to be done in those bills. This bill seeks to accomplish but one theme. That theme is quite coldly set out in the explanatory notes to the bill.

This bill had first reading on January 24, Monday of this week. Comments have been made in this House as to when or if this bill was going to proceed. We dealt with a variety of other legislation, mainly in the Justice policy field, on Tuesday afternoon and evening. Yesterday, Wednesday, the Legislature, as has been its practice, did not sit and the opportunity to have begun this debate was again not available to us.

If there is said to be any delay with respect to at least getting the debate started, that surely cannot be put -- as the Minister of Consumer and Commercial Relations attempted to do -- on the shoulders of the opposition House leaders or on members of the opposition parties. They did not ask the government to proceed with its own legislation. The delay has had nothing to do with the actions and activities of the Liberal opposition in this Legislature.

The sorry history of the past three months shows how this government has again failed to protect investors. Let me refer briefly to a column by Eric Dowd, a writer in the press gallery, which appeared in the Kitchener-Waterloo Record of January 25, just two days ago. The last three brief paragraphs state:

"Ontario, although it prides itself as a safe place for investors, keeps getting caught short. The PC government has not finished dealing with the last incident in 1980, when Re-Mor Investment Management Corp. collapsed after the province licensed it to take in deposits, after a court ordered an associated finance company into receivership.

"One problem is that Premier William Davis does not leave ministers in the Consumer and Commercial Relations portfolio long enough to find their way to the executive washroom, let alone develop ideas on how institutions can be adequately supervised.

"Elgie, who is taking the blame now, has been in the portfolio less than a year. The post has had five ministers in little more than five years, and no fewer than nine" since the member for Brampton became Premier in 1971. "The only continuity in this saga of neglect has been William Davis."

That is an interesting comment. The responsibility clearly is with the Premier, who has chosen to move persons through this ministry almost with the speed of a revolving door. What these ministers have been able to do in the last few years has been to watch the twists and turns in this panorama of capitalism in its least attractive form. The financial world has watched with interest the Canadian scene of late as one bearded buccaneer after another proclaims the untrammelled virtues of free enterprise as practised at its highest level, and that is called piracy.

The clearest explanation so far has been the cartoon which Andy Donato drew for us in the Toronto Sun. All of us have followed quite easily the chart that is provided there as some two dozen actors set up themselves, each other and the public for adventures yet unknown and activities unforeseen. I certainly have not as yet heard of any seizing of assets or of any visiting of the premises of the Murphy Pie Co. which appears in the lower right corner. Nearly all of these other groups have been visited from time to time.

Perhaps it may be that all the answers to all of this lie beneath the upper crust of one of Mrs. Murphy's pies. It may well be that the only reason it is there, amidst these other companies, is it is the only organization on the whole list that is operating solidly, efficiently, respectably and within the law.

The minister has referred to the real heart of the issue. Look at today's press: "Missing Money Beside the Point: Elgie." What does it matter if it is $100 million or $200 million? Let us get on with it. But this is just the quotation to compare with another quotation on that same page in the article that Rosemary Speirs writes: "The real heart of the issue, he told reporters yesterday, is lending practices in contravention of the Ontario Loan and Trust Corporations Act, practices which he said justify the provincial government's decision to seize Crown Trust Co., Greymac Trust Co. and Seaway Trust Co."

All right, let us take that quotation as the reason we are here today. But let us look at the article that appears just above it, headlined, "Tories Block Committee Queries on Trust Affair." There we have the member for Carleton (Mr. Mitchell), the parliamentary assistant to the Minister of Consumer and Commercial Relations, leading off in an attempt to deal with this matter by ensuring that it is not dealt with.

I ask members to compare the paragraph I have put from the article by Rosemary Speirs, which suggests to us why we are here, with the lead article that John Cruickshank wrote on the same page: "Ontario Conservatives have blocked an attempt by opposition members in a legislative committee to question the provincial registrar of loan and trust companies about the state of the seized financial institutions under his regulation."

I suggest that if we are to look at the problems of lending practices in contravention to the act, according to the minister, and if we are not to have the registrar responsible for these matters come before a committee, according to the minister's parliamentary assistant, then it does make one wonder just what we are here to do.

Clearly we are not here to look into the facts and the details of this situation. The standing committee on the administration of justice, having adjourned after three hours of discussion on this point until at least tomorrow and perhaps beyond, is unable to proceed with looking at the mechanical circumstances. This includes things such as that little list the former minister, the member for London South (Mr. Walker), apparently was keeping and was observing.

So there is a comparison of some of the details.

What do we need to know before this bill becomes law? It is a simple matter to put together a number of these views. The minister in the statement he read to the Legislature today, which no doubt is being spread across the province to all and sundry, suggested that we have only two choices. But curiously enough that is not the view expressed in today's editorial in the Toronto Star. Let me put this before the members:

"No matter how earnestly the Davis government tries to justify it, the continuing attempt to sell Crown Trust at this time violates a fundamental principle of justice in a democratic society governed by the rule of law.

"The government is trying to sell an asset it does not own. The owner of that asset, Leonard Rosenberg, has not been formally accused, let alone found guilty by any independent tribunal, of any offence. Indeed, Consumer and Commercial Relations Minister Robert Elgie acknowledges that the government's investigations are not even completed yet.

"Whatever may or may not eventually be established about Rosenberg's role in the mysterious dealings that began with his purchase of the Cadillac Fairview apartment buildings, the government's attempt to sell Crown Trust under present circumstances is unacceptable in principle.

"It is not acceptable in a democratic society for a government to seize an individual's property and then to use its majority in a Legislature to push through a bill empowering itself to sell that property to a third party, all without due process of law or the intervention of any independent tribunal."

That is one point of view, and if you do not like the afternoon paper, let us look at the morning one. This is what the Globe and Mail says in an editorial, again today:

"The government, with dozens of questions unanswered, is now asking the Ontario Legislature for the power to sell Crown Trust, but not Seaway or Greymac. Surely Consumer and Commercial Relations Minister Robert Elgie must know by now that at the very least he must respond to the demands for answers to questions about the administration and operation of the trust business in Ontario.

"Liberal Opposition Leader David Peterson, who has worked long and hard to unravel the trust company problems, was right when he urged that the new sale legislation be sent to a legislative committee where its constitutionality can be questioned and where opposition members can demand explanations for the apparent failure of the Ontario regulatory system of the loan and trust industry."

4:50 p.m.

The first editorial deals with "No Arbitrary Confiscation," and the second editorial is headed, "In Need of Answers." If he wishes a third, let me bring him one from last night's edition of the Kitchener-Waterloo Record. It headlines, "Opposition Entitled to a Few Answers." I suggest this pretty well sums up why we cannot at this point support Bill 215.

"Ontario's consumer relations minister may well be justified when he asks the opposition to give instant and almost blind approval to his bill allowing Queen's Park to sell Crown Trust Co. After his ministry's intensive probes of Crown and the Greymac and Seaway Trust companies, Robert Elgie should have some idea where he is headed in an affair that has kept him hopping since the $500-million sale of 11,000 Toronto apartments to 'Saudi' interests in November.

"Seemingly added weight to his request is Elgie's argument that only quick passage plus a promise by the Canada Deposit Insurance Corp. of a massive capital infusion can assure Crown's survival. Very impressive indeed. The Tory minister's problem is that his lack of evidence is just as impressive and unconvincing. No wonder the opposition balks. No wonder, indeed, since this is the second time Elgie made such a request.

"On December 22, the Liberals and New Democrats were asked and agreed to give uninformed assent to special legislation allowing the government to take over the three trust companies. The government has since reciprocated with a thickening screen of smoke billows, but almost no additional information about the nature and the size of the alleged fire. Can anyone blame the opposition for demanding a little information or at least some confirmation that there actually is a fire before it agrees to another major piece of legislation unaccompanied by the facts?

"Since the affair first caught Elgie and the Davis cabinet painfully off guard, the government has had to scramble and react almost daily merely to catch up with developments. We don't need an opposition to remind us that the government's performance has hardly inspired confidence, but we do need an opposition to make sure that the Davis government's related actions make some sense and are at least in touch with reality.

"To fulfil its duty, the opposition must have some basic facts. Until these facts have been produced, it would be derelict in its duty if it repeatedly accepts responsibility for legislation it cannot judge, and woe to the government that would try to detract the opposition from their sworn duty with blackmail of dire consequences if its blind consent is not given before the announced deadline."

That is exactly what happened today in this House as the minister made his statement. Just to let the minister know that the day before somebody else saw it might be coming, let me repeat it: "and woe to the government that would try to detract the opposition from their sworn duty with blackmail of dire consequences if its blind consent is not given before the announced deadline."

It is not fair to quote only two of the Toronto daily newspapers without referring to an article Claire Hoy did in today's Toronto Sun. Again it refers to the themes of the principles of justice being amenable to change. I think it is a further comment when he writes:

"Surely the principle of justice, of due process, is more important to society than the temporary inconvenience or political expediency of what is perceived to be the issue of the day.

"How long can we last as a civilized and democratic society when it is seen as acceptable, indeed as praiseworthy, to either disregard laws we disagree with, or worse, openly flout them?"

While perhaps not all the people in the province read every editorial every day, the consistency of approach that has been taken, at least by those viewers of the scene, has been that the opposition is entitled, indeed obliged, to receive a variety of necessary information which we have not as yet had.

Let us step back a couple of days to January 25 and look at the article in the Toronto Star that Jack McArthur did, since these things might as well all be on the record in this debate. This is what Mr. McArthur writes:

"Why is Ontario rushing head-over-heels to sell Crown Trust? Because, presumably, the old company is smack in the middle of a mess the details of which the province wishes to keep as secret as possible.

"If the province can force the trust company rapidly into new and less explosively controversial hands, that will help calm one part of the great financial storm.

"It would be able to say Crown has gone to people in which we can have full confidence that we can stop worrying -- and stop asking so many questions.

"This would remove some of the heat on Ontario to tell us how, why and how widely the financial crisis developed -- and under what inadequacies of regulation and surveillance.

"It's a disturbing way to run a democratic government. The public must judge government actions. It also must make judgements concerning investing its money in deposit-taking institutions like trust companies.

"For both judgements, we need information. The province's distaste for giving it suggests two things.

"First, it could make matters even more politically embarrassing than they already are. Second, the mess may be bigger and more extensive than most of us think."

Then he goes on -- I will just quote one more brief paragraph:

"This supposedly free-enterprising government has performed a series of massive, unprecedented, fast-moving interventions. It seems to have preserved as much secrecy as it can manage in circumstances compelling high visibility."

In my earlier remarks, I suggested just what it is that must be done. There are four things we must do to preserve the rule of law:

First, we must have a guarantee of all deposits in all three trust companies -- Crown Trust, Greymac and Seaway.

Second, we must have protection for the preferred shareholders to whom I have referred.

Third, we must have the consent of this government to a full public inquiry into these matters by a royal commission. The commission should have full independence to review and deal with all of the aspects, not by internal inquiry, not by asking someone to give a particular opinion, but in the cold, harsh light that public inquiry would bring.

Fourth, we of course must have the public documentation supporting the requirements of the speedy sale for Crown Trust.

We are informed by our House leaders that eventually, after second reading, this bill will go to the standing committee on administration of justice, and we will have the opportunity to consider and to debate the variety of amendments which I suggested. That, apparently, will occur perhaps on Monday and Tuesday of next week.

I will make a deal, if the minister agrees to these demands. If, before we come to vote on this bill, he is able to agree to what I have suggested, then and only then could this bill be seen to be supportable in principle. But if he does not, we will vote against the bill. As I have quoted those last three lines in the editorial last night in the Kitchener-Waterloo Record, it will not be seen in any way that a vote against this bill will be considered a lack of concern about this whole matter where my leader and my colleagues have led the way.

Our vote will be solely a vote of a lack of confidence in this government. First of all, it will be a lack of confidence in the Premier, who has been responsible and allowed ministers to come and go in this ministry. Second, it will have to be a lack of confidence in the minister, because that is why he is paid -- he is paid to answer to us for any of the failings which senior civil servants may have, if they have been negligent, and to report to us the facts we must have to deal with this legislation.

5 p.m.

Mr. Rae: Mr. Speaker, I will indicate at the outset to you and to the minister that we in the New Democratic Party will be opposing this legislation on second reading. I want to indicate why very clearly to the House.

In addition to the remarks and arguments that have been made with the sense of detail and sense of the history of this problem in legislation that has been brought to it by my friend the member for Kitchener, I want to set out the very real concerns that we have in this party with respect to this legislation.

I want to start by saying to the minister -- I could put this in personal terms if that were the style to which I was accustomed, but it is not -- that in political terms we on this side deeply resent the statement he made to this House today. We deeply resent it for several reasons, and I want to indicate to the minister just why and just how far we in this party believe he has personally overstepped the mark, overstepped the bounds of good faith and overstepped the bounds of respect for the task of an opposition, which in its own way is just as difficult and just as responsible a task as the one he has set for himself as Minister of Consumer and Commercial Relations.

We know, and the minister knows full well, that a meeting of House leaders took place just a couple of hours prior to his making the statement this afternoon. Yet he came into the House and said we have to have this legislation today; we have to have a vote right now; we have to have approval by this House without any debate, without any consideration, without any questioning, without it going to any kind of a committee, even though two hours prior to that statement the government House leader committed himself and the Conservative Party to having this matter before the committee tomorrow and on Monday.

For the minister to make that kind of statement is -- and I use a strong word -- akin to blackmail, coming before the House and saying that unless the opposition votes now, the word "now" being underlined, it will "delay and create the very real possibility that by the time the legislation is finally passed it will arrive too late to save the uninsured depositors, leaving liquidation as the sole alternative."

For the minister to make that kind of a statement, to exhibit that sort of panic on his own part -- panic that has not been shared by a great many others who are close to the scene as well, from what we understand -- is truly unbecoming to a minister of the crown and demonstrates a lack of confidence on his part in the good faith of this Legislature and in our responsibility as members of the opposition to ask certain questions and to try to get certain answers.

We in this party suffer, if you like, some disadvantage as a result of the fact that we chose not to go into a private meeting with Mr. Biddell on Tuesday, unlike the Leader of the Opposition and some of his colleagues. We did so on a matter of fundamental principle, in that we do not believe the way for this matter to be discussed and settled by this Legislature is in the manner of some kind of dance of the seven veils, taking place only before private audiences selected by the minister.

We believe that government by striptease makes a mockery of the kind of legislative approach that is essential. We think this matter could well have been discussed earlier in the week, could well have been presented earlier in the week and could have been referred to a committee at any time after completion of second reading, when some of the basic principles and arguments are laid out by members of the opposition, as we have an obligation to do. In committee, Mr. Biddell or the minister can lay out exactly the information they feel they can lay out in public. If there is information they feel they cannot make public, then let them say that in public and let that judgement be made by them, and let us come to our own judgement on the basis of the information that is made public.

For the minister to come to this House and say it is in any sense irresponsible for us, as members of the opposition, to ask questions and to refuse to be buffaloed, to refuse to go to private meetings and to ask that this be done in the light of day, in the light of parliamentary debate, in the light of exchange of information and in the light of rational judgement, demonstrates a real lack of understanding on the part of the minister of what our job is. We will leave future voters to decide whether the minister and his government have a real understanding of what his job has been and of what the government's responsibility has been for the real problems that exist with respect to the regulation of the trust industry in this province.

I wanted to get that on the record at the outset because of the minister's statement following the meeting of government House leaders which laid out agreements on a consensual basis. The minister knows full well and has known for some time that we were going to be opposed in principle to this legislation. The minister knows that we were not intending to obstruct it in any way but that we wanted it to go to committee and that was the approach we were going to be taking.

When the minister knows that, as well as what agreements were arrived at by the House leaders -- and if he does not know, he should -- and then comes in and reads this kind of tinpot riot act to the Legislature in an attempt to buffalo us into doing what no responsible opposition could conceivably agree to, it is outrageous.

The minister should know how outrageous it is and how strongly we on this side feel about that aspect of his conduct in this matter. We will not be buffaloed. We will not be steamrollered. We will not be prevented from asking intelligent questions. We will not be prevented from referring this matter to a committee and to having Mr. Biddell and the minister himself give us, in public, the kind of information we are entitled to.

We do not want private meetings. We want these matters to be settled in the light of day. We want the free light of publicity to shine on this bill and on the government's justification for it. That is the way parliamentary business should be conducted, not in private and behind closed doors where the press and other judges cannot be there to assess in their own rational way whether something has been done properly. These are not matters that can be considered or discussed in private; these are matters that must be discussed in public.

I am proud of the fact that we have taken that position as a caucus, because I believe it is a position that will stand us in good stead with those who recognize that public scrutiny is one of the few rights the opposition and the public have in an era of democracy in which more and more power is accruing to the executive, which is happening in our society right here in Ontario.

In the thrust of what the minister has been saying and in the arguments he made today, he did not provide us with any particularly new information. Rather, he provided us with an even stronger indication of his personal opinion with respect to certain matters. No more information was offered to us; it was simply his personal opinion with respect to certain matters.

Quite simply what the minister has laid out for us would appear to be the following. In his view, this is not in any sense an attack on shareholders but is purely and simply an act for the protection of depositors. If the minister were more frank with himself, he would recognize that while this legislation may protect depositors, at the same time it does have a very dramatic impact on the rights of both the preferred and common shareholders.

It also has a very dramatic effect on the civil rights of Leonard Rosenberg, which previously have been protected in other pieces of legislation, including the Loan and Trust Corporations Act. I will be coming to that in a moment.

Someone who we understand is close to the minister was quoted today in the press as saying that the thing he liked about this legislation was that it was "poetic justice" in some sense. Those were the words he used. One can only assume that when Mr. Macdonald used that phrase, he had in mind that there was some kind of justice in the fact that, basically, Mr. Rosenberg was being stripped of his assets and being left in the desert armed only with the two bum mortgages, the two soft assets. We all know how soft those assets are. Woods Gordon has documented just how soft those assets are with respect to Cadillac Fairview and the Daon mortgage in Vancouver.

Members will know from what we on this side of the House have been saying for some time that we are no friends of speculators in the trust business; we are no particular friends of Mr. Rosenberg. I have never met the individual, but I have indicated from day one that whereas this deal may or may not be legal -- and we still do not know, because the government has not told us how it feels about the investigation that is under way -- we on this side of the House regard that transaction as immoral and one that should not be allowed to happen or be condoned in any way by the Legislature.

5:10 p.m.

Damn it all, Mr. Speaker, if I can speak very frankly, Mr. Rosenberg has not been charged with anything, let alone convicted of anything. Without further information and without Mr. Rosenberg having the full benefits of due process, we in this Legislature are not in a position to act as judge and jury, certainly not on the basis of the very little we have been told, and somehow to mete out either poetic or prosaic justice, even to an individual who has engaged in the practices Mr. Rosenberg has.

The point about due process of law, about the protections that are in the due process of law and about our common law system is that it acts as a buffer and it acts as a form of protection. The government, in and of itself, cannot deprive an individual of very real rights that have been in existence and have been protected by due process, without due process and certainly not without debate and hard information, all of it being made available and as public as possible.

The government must document far more than it has that this is the only course possible for the protection of depositors. The minister has said time and again that this is the only course possible for the protection of depositors. He has stated it over and over again. He has said it in black and white several times. He has indicated it time and time again, but he has never proved it. There is one hell of a difference, not only in logic but also in fact, between saying something and proving something.

I ask the minister why we should assume for a moment that the only party able to protect the depositors of either Crown Trust, Greymac Trust or Seaway Trust is some private benefactor who is able to come in like a fairy godmother and save this company from the outside, working in co-operation with Canada Deposit Insurance Corp.

There are many of us who feel the government of Ontario has a responsibility to protect the depositors in Crown and Greymac and Seaway. There are many of us who are not happy with the way the government has attempted to slough off all its responsibility on Prince Hal, the fairy godfather, or whoever it is who is going to come in and save this company, combining itself with CDIC. There are many of us who feel the government of Ontario has a responsibility, and it should not be allowed to evade that responsibility the way it has been trying to do by saying that the only solution is for CDIC to work in co-operation with some private company and solve this problem.

We believe the government of Ontario has a responsibility, and we would at least like to know what correspondence and what exchange of views have taken place between the government of Ontario and CDIC with respect to this responsibility. We would like to know the history of that exchange. I suspect it is quite an interesting history. I suspect CDIC has something to say about how it felt about its responsibilities and how it felt about the responsibilities of the government of Ontario.

I think we are entitled to know what those exchanges have been, rather than have the minister simply come in here in a way that in a technical sense is entirely self-serving and say:

"What do you know? There is only one alternative and you guys do not have any choice. You cannot ask any questions. If you ask any questions and raise any problems, you are being irresponsible and threatening the rights and the abilities of depositors."

For depositors to be told that by this government is quite simply irresponsible. Both opposition parties have made it very clear from the outset that we believe the government of Ontario has a responsibility to the depositors. That is where the responsibility lies, that is where the responsibility should lie, and that is where it will lie. That is where the expectations are and should be with respect to conduct and guarantees. I think that has to be made perfectly clear.

We will be raising questions in the committee as to why the alternative that is being presented to us is the only alternative. We do not believe it is the only alternative. We think that there may be reasonable alternatives and that reasonable people could put forward those alternatives and have them discussed and not simply dismissed by the minister in the manner in which he has dismissed them on the floor of this House, sarcastically and with condescension in the manner that, unfortunately, has become his vogue.

Perhaps his attitude is understandable on a personal basis because of the kind of pressures he is under, but still it does not show the kind of good faith that we on this side are attempting to show, working as we are with a tremendous lack of information, with less information than we believe we deserve and certainly with less information than the government has.

The other concern we have is, exactly what has happened with this parcelling-out proposal? Exactly what kind of bids have been made, and exactly what is the state of play with respect to the new acquisition?

We on this side are entitled to know what the government plans to do with this legislation. The government has not been sitting idle these past three and four weeks with respect to the future of the assets. The government has made it very clear, certainly publicly since January 17, that it wanted to proceed with respect to Crown Trust and was asking certain companies to make certain offers, certain companies to express an interest in certain aspects of the assets, the liabilities and the obligations of Crown Trust.

To be quite honest, an opposition would be completely irresponsible and even stupid to go ahead and simply blindly pass this legislation without having any discussions as to who it was the government intended to have these assets sold to. Is it National Trust Co. Ltd.? Victoria and Grey Trustco Ltd.? Extendicare Ltd.? What is the nature of the offers that have been made? What are the criteria the government is using? They have indicated it is not necessarily going to be the highest bidder.

These, I argue, are questions it would be irresponsible for us not to ask. It would be irresponsible also for us not to ask questions about the prior involvement and concern those companies have expressed with respect to this company, to say nothing of the activities of principals of those companies and their previous dealings with the government and their dealings with respect to the investigation of Crown Trust. It would be irresponsible for us not to ask those questions and not to try to get answers to those questions.

I believe we are entitled to those answers. I say to the minister, with all due respect, when he suggests that it is in some sense irresponsible for us even to ask, then he does not appear really and truly to appreciate that an opposition has a job to do: not simply to oppose, but to ask questions and seek out answers. Our job is not to ask them in private and seek them out in private, but to ask them in public and seek them out in public. That is the kind of approach we will be taking whenever this bill goes to committee. That is the kind of approach we want to take.

The member for Kitchener has spoken at some length about the position of preferred shareholders and the difficulties they face as a result of their rights virtually having been extinguished by this legislation. I do not intend to go over that ground again or over the ground with respect to the position of other shareholders and the rights that have been extinguished, the importance of due process and the relationship of that to the Canadian Constitution. I know my colleague the member for Riverdale (Mr. Renwick) will be referring to those matters in his remarks, and I do not intend to speak extensively on them this afternoon.

I do, however, want to make one significant point. It is important for us to remember that the current Loan and Trust Corporations Act, prior to and after the amendments we made to it on December 21, contains some important rights for shareholders and for corporations that are subject to an order of the registrar for rehabilitation. These have been wiped out by this legislation.

5:20 p.m.

I go back to the point I was making. Regardless of how one feels about the transaction, regardless of how one feels personally or otherwise about Mr. Rosenberg and regardless of how one feels about the poetry of certain retribution meted out to an individual, there are rights and procedures set out in legislation that we, in this Legislature, just cannot ignore. We must have due regard for them.

In particular, there is a right of appeal to the Divisional Court. That right has been extinguished; it has been taken away. There is no right of appeal. There is no right of any individual to subject what the government is doing and has done to the scrutiny of a court and to the scrutiny of judicial review.

When one extinguishes rights, as the government is doing and as the government feels it is essential for it to do to provide protection for the depositors -- and I am not underestimating its sincerity or its determination to do that, and I say this quite frankly to the minister -- I believe the least the government can do is admit that this is what it is doing and that this is exactly what is being done. It is precisely because this is what it is doing and this is what is being done that it has to offer more of an explanation than it has offered.

Rather than doing that, the minister states here: "There is a suggestion" -- as if it is a surprise -- "that this bill is some sort of punishment of some of the shareholders of Crown Trust for possible wrongdoing on which all the facts are not in and on which no court has adjudicated. The truth is that this bill is not directed against shareholders and does not depend on there having been any wrongdoing."

What exactly and who exactly does the minister take us for? At least he should grant us the benefit of having a modicum of intelligence and understanding of exactly what is being done here. The minister cannot have Mr. Macdonald saying "This is poetic justice" in a meeting with the editorial board of the Globe and Mail, and then come in and say: "I wonder where the suggestion came from that this was some sort of punishment. We are not affecting the rights of shareholders; all we are doing is affecting certain assets of shareholders."

Shares have value only if they have assets behind them. Shares have value only if they are worth something because they are based on certain assets. Take away the assets and one is left with a piece of paper; it is called a share. The minister has the gall to say, "We are not affecting the rights of shareholders, because we have not done anything to their shares." Nonsense. Of course they have done something to the shares.

The minister says: "Aha! We have no choice. We have to do it." To which we in the opposition can only say: "If you are going to do it, and if you really think it is necessary to do it, first of all, please admit that is exactly what you are doing and that is what makes it so serious and important; and, second, explain to people how and why you got into this situation, how and why you are there and how and why it is necessary." That is the respect any reasonable opposition has the right to expect.

Yes, the government is taking away certain civil rights. Yes, it is shortening the due process of law. Yes, it is taking away certain rights of shareholders. Yes, it is taking action that is very severe; it is trying to sell something it does not own. That in itself, one would have to admit, is an unusual act for a government.

Let them admit that is what they are doing and then say: "We need some extraordinary justification for taking this kind of extraordinary action." Let them admit it requires justification. Let them admit that justification can only take place in public. Let them admit that kind of justification has to go to a committee of this Legislature and has to be discussed, questioned, cross-examined and scrutinized before a reasonable person would acquiesce in that kind of a solution as being the only solution, the only alternative to what has happened.

Finally, I want to mention some of our concerns about the people who have been forgotten in this whole transaction. I am speaking, of course, about the tenants. I find it bizarre that this government, which has had no hesitation in seizing the assets of three trust companies and requiring the sale of virtually all the assets of one of the major trust companies in Ontario, is prepared to conduct investigations galore and yet, after 10 weeks of these investigations, is still not able to tell the tenants of the 10,000 units who their landlord is. That is, in my opinion, an unusual admission of defeat.

I cannot understand why the government has been pussyfooting around that basic question and around the answer to the insecurity that all those tenants do suffer, quite naturally and understandably, as a result of the fact that they have been kept unusually in the dark in comparison with the treatment that has been meted out to many other individuals.

I want the minister to know that we are not satisfied with the solution to the tenants' problems that says, "Well, leave it to the Residential Tenancy Commission to do that whenever that application comes in from Maysfield Property Management or whoever it may come in from." We do not know whether Maysfield is going to be in existence in two weeks, a month, six weeks or three months. We have no idea.

It is apparently involved in some way with Mr. Player. We do not know where Mr. Player is. He has not turned up yet for any of his inquiries. He has not been seen around town recently, I understand. He has been away for a while. Perhaps he will come back. Perhaps he will answer some of our questions. Perhaps he will not. Maybe, maybe, maybe.

Mr. McClellan: Maybe he's here in the gallery.

Mr. Rae: Maybe he is here in the gallery. I do not know. I do not see anybody wearing a hat in the gallery, apart from the two security officers; so I am not entirely clear.

The point I am trying to make with respect to this situation is that we are not satisfied with the solution that says: We are going to take all the good assets away from Mr. Rosenberg, and we will sell them off at whatever price we can get to whoever of the corporate fairy godmothers we can find to solve this problem for us. We are going to forget about Greymac and Seaway. We are going to forget about those depositors. We have written them off. They will have to make do with the $60,000 which they will get from the feds." The province has no responsibility for what has happened to those people. We will come back to that in a moment.

The government says to the tenants that the Residential Tenancy Commission may be able to tell them who their landlord is; they will be able to find out eventually, as soon as that application goes through for rent review. That is a very shoddy way to treat the tenants. It is a very shoddy way to solve the problem of those people who do not know who their landlord is because the government does not know who their landlord is since it does not know whether the deal, which has been the subject of such controversy for the past 10 weeks, is a real deal or not. We still do not know that.

We still do not know whether money actually changed hands. We do not know whether property belongs to X or Y, to Mr. Rosenberg, Mr. Player or Kilderkin. We still do not know the answers to those questions. We are entitled to answers to those questions. Answers to those questions are fundamental to the kind of confidence that people have in a government and the good faith of a government of this province.

In closing, the principal difficulty we have been presented with as an opposition is that despite all the statements made by the minister and by this government -- I have a pile of them, including all the statements the minister has made to this Legislature -- we still do not know certain basic facts with respect to why the government feels this is the only alternative for the protection of depositors. We still do not know the foundation for that feeling on the part of the government.

It is a feeling that has been expressed over and over again. It is a feeling that has been stated over and over again. But it is not something the government has ever justified with facts, with an explanation or with a full, thoroughgoing willingness to subject itself to the cross-examination of this Legislature.

I had a very disturbing experience yesterday. I attended a meeting of the standing committee on administration of justice as a substitute member. We were attempting to get the government to agree to have the registrar come before us to discuss the reports of 1979, 1980 and 1981.

It was a disturbing experience for a couple of reasons. First, the registrar did not have the documents for 1980 and 1981, because they were not on floppy discs yet. Because they were not on floppy discs yet, he was not able to present them to us, and he apologized for that.

5:30 p.m.

I found that a little disturbing, the fate of the government resting on floppy discs. I must say it slightly undermined my confidence in the government; the sense of the Big Blue Machine operating with such extraordinary efficiency as it steamrollers its way through the province armed with only a huge advertising budget and a sense of smoke and mirrors which defies even that of the federal Liberal Party.

To find that the fate of this government was held up by floppy discs; it was an admission of the problems they are having with their spinal cords that we previously were not aware of, but nevertheless, it shows there is nothing infallible about that group of people who are currently managing the Big Blue Machine. It is floppy discs, the weak and sloppy floppy discs, that are at the source of the weakness of this government.

Mr. Renwick: It's a back ailment.

Mr. Rae: It's a back ailment. They have a spinal problem.

Hon. Mr. Elgie: Give him a calendar. He will straighten it all out. Show us your calendar.

Mr. R. F. Johnston: It must have touched the sciatic nerve.

Mr. Rae: It must have got the sciatic nerve, Mr. Speaker. I can always tell that knee-jerk response from the minister.

The second thing that happened was that the government said it would not allow us to ask any questions of the registrar, would not allow the registrar to come forward, would not allow the minister to come forward to be cross-examined on the history that lies behind what has happened.

We know by virtue of information that is now public knowledge and that has now been published, we know on the basis of what individuals in the trust business have let be known, that concerns were expressed about Seaway, about Greymac, about certain transactions and about their valuation technique some time ago, before November. Whether it was before 1982 or before 1981 or before 1980, I do not know. The minister knows, I would suspect, by now. The registrar would know by now. I would suspect by now he might have some record of exactly what kinds of complaints had been forthcoming about these individual companies, and I think we are entitled to answers to those questions.

The attitude this government has taken all along is that it will give information only on its terms. It will not subject itself to genuine cross-examination. It will not subject itself to the requirements with respect to the production of documents. It will not subject itself to the subpoena power of an independent inquiry into its own conduct, into its own knowledge and into the activities of its own officials in the past. It will do everything on the government's own terms, in the government's own way and in the government's own sweet time, and that has been the approach of this government from day one.

On January 15, the minister received a report from Woods Gordon. On January 17, the minister made a statement to this House. Did he tell us everything that was in the Woods Gordon report on January 17? No, he did not.

Hon. Mr. Elgie: I said that. It is no secret.

Mr. Rae: It is no secret, but why not? It took dribs and drabs, it took further questions, it took further embarrassment, it took the minister's realizing: "I had better throw them another bone this Monday, another tantalizing piece of information. We will throw that one out." Then the minister calls me up on Monday and asks --

Hon. Mr. Elgie: Tuesday.

Mr. Rae: -- Tuesday, whenever it was, and asks how would I like to meet with Mr. Biddell on Tuesday. I accept the minister's correction. I said, "No, I think this is something that should take place in public."

The Leader of the Opposition chose to meet with Mr. Biddell and he then made public the information that Mr. Biddell gave to him with respect to certain activities. But was that the same information that Mr. Biddell, the good minister and Mr. Macdonald gave to the Globe and Mail the next day? No, it was a different set of information: a new twist, a new sense, an answer to a specific question, a different answer to a different question, perhaps a question differently put.

So this information comes out in dribs and drabs, another bone, another tiny piece of information given to the Globe and Mail and another tiny piece of information given to the Toronto Star, although nothing to the Toronto Sun, for reasons I do not personally understand. I would have thought it was just as entitled as any other paper to get some little bone, some crumb, some slight piece of information, perhaps about Kilderkin, perhaps some little piece of information about something that may or may not have happened in the past about Leonard Rosenberg, perhaps some phone call or offer that may or may not have been made, some little crumb for the Sun. Surely he could have done that for the Toronto Sun.

No, the minister could not even find it in his heart or in his mouth, which is voluble in response to his own timetable in responding entirely only to what he says and what he wants to give out when he wants to give it out.

I want the minister to know that kind of approach undermines his credibility with respect to his approach to this legislation. That is the problem the minister faces and the problem the government faces. That is why he had to have the Premier finally come clean and speak out, instead of leaving the minister out to dry like a piece of laundry, which has been the administrative style of the Premier all these years.

He finally came down and said, "Now I think the members would agree that we need this legislation," in that automatic-pilot kind of speech which the Premier gives from time to time with that sense of impenetrable monotony which we have come to associate with his style. He tells us: "Everything is okay, everything is fine and there is nothing to worry about. Everything is going to be just great as long as we pass this legislation because there is nothing to worry about."

There is something wrong here. The government is doing something extraordinary. The government has been doing extraordinary things in response to an extraordinary situation for a number of weeks and months. The government may like to pretend this is not what is happening. The government may like to pretend that, as long as the opposition went along with everything, nobody would ask any questions and nobody would realize there are some real problems in the trust industry in this province.

There are some real questions to be asked about the responsibility of the government itself for those problems, about the government's involvement and about the involvement of people in the Conservative Party in creating those problems. Those questions will not go away. The government cannot ask for the special legislation it asked for at the end of December, take the action it took on January 7, take the action it is asking us to take today and pretend that everything is normal, that this is business as usual and that there are no real problems in the trust industry.

It just has no credibility any more. The emperor is truly nude when he walks in and says that there is nothing unusual, exceptional, strange or out of the ordinary about the legislation that is being proposed. It is extraordinary legislation that requires an extraordinary justification and extraordinary honesty on the part of the government in response to our questions.

I do not believe the government has done itself any credit and given itself any credit with the approach it has taken to this legislation, to this Legislature and to the opposition in this Legislature. We in the opposition have a job to do as well. That job is to ask questions in public, to attempt to elicit public answers to those questions and to attempt to make the government justify actions which can only be described as extraordinary.

If there were only one member of the opposition, that voice should not be quelled by a majority of 124 to one and that is a principle which the government has to understand. It cannot take this kind of action and expect the opposition to lie down and play dead. No opposition worthy of the name would take that position and that is certainly not the position we in the New Democratic Party intend to take.

We are going to be constructive when this matter goes to committee. We are going to be inquiring, and we are going to be attempting to do everything we can in complete good faith for the protection of tenants and depositors and for some basic answers to the responsibility of the government for the situation in which it now finds itself, in which depositors and shareholders now find themselves, and in which the tenants of the province now find themselves. We are not going to shut up until we get the answers to those questions. I want the minister to understand that.

The Deputy Speaker: I thank the member for York South. At this time, I am wondering whether I might have the consent of the House to revert to motions.

Agreed to.

5:40 p.m.

MOTION

HOUSE SITTING

Hon. Mr. Gregory moved that, notwithstanding standing order 3(a), this House will sit through the normal dinner hour from 6 p.m. to 8 p.m. today.

Mr. Martel: Is this a closure?

Hon. Mr. Gregory: Not yet.

Motion agreed to.

ROYAL ASSENT

The Deputy Speaker: I beg to inform the House that in the name of Her Majesty the Queen, the Honourable the Lieutenant Governor has been pleased to assent to certain bills in his chambers.

Assistant Clerk: The following are the titles of the bills to which His Honour's has assented:

Bill 159, An Act to revise the Planning Act;

Bill 178, An Act to amend the Pension Benefits Act;

Bill 183, An Act to amend the Judicature Act;

Bill 193, An Act to amend the Regional Municipality of Waterloo Act;

Bill 194, An Act to amend certain Acts in respect of Planning and related Matters;

Bill 216, An Act to revise the Mechanics' Lien Act;

Bill Pr27, An Act respecting the City of Ottawa;

Bill Pr42, An Act respecting the Corporation of the City of Pembroke;

Bill Pr48, An Act to revive Glanworth Investments Limited;

Bill Pr51, An Act to revive Beth Sholom Synagogue.

CROWN TRUST COMPANY ACT (CONCLUDED)

The Deputy Speaker: Thank you. The Minister of Health.

Mr. Kerrio: This must be a sick bill.

Hon. Mr. Grossman: No, no. And with that I would like to conclude my remarks.

Mr. Speaker, I am pleased to be able to rise in support of this legislation, which has been arrived at and introduced by the government after a great deal of thought. In fact, a great deal of time has been paid to the very kinds of concerns that have been raised by both opposition parties.

I think it is fair and important to note, at least at the start of my remarks, that those concerns are not only acknowledged by us -- they have been reviewed by us inside our cabinet and our caucus -- indeed, we respect those very concerns and the rights and duty of the opposition to ask those very questions.

This is unquestionably unusual legislation. It is far-reaching and for that reason causes us some concern. But I think it fair to say that, as with all pieces of legislation, we must look at the particulars before us and juxtapose them against the principles that we all hold near and dear to us and that we are all here to protect.

All of us worry and move very cautiously when we have to move in a rather extraordinary situation such as this. But move we must. In fact, I have heard members opposite, and indeed members on this side of the House over many months, urge us on this matter, in particular, to make sure that problems which have risen in other circumstances and which have been mentioned here earlier do not rise again; that the government not be seen to be moving too late rather than too early, but that once government became seized of certain circumstances which would cause it to take some action, and extraordinary action indeed, it was the obligation of government to move.

In this circumstance, notwithstanding some of the views expressed earlier, I do not think anyone would question that this action was taken to help the depositors, to benefit the depositors, certainly to benefit the public and to maintain confidence in the system.

The motivation obviously is exactly that, to protect the depositors. How do we move in that circumstance? Are we going to use every tool we can, but only where and when necessary to protect those depositors? Or are we perhaps going to err in favour of the shareholders, some of whom, certainly in the case of the common shareholders, indeed may well have put the depositors at risk?

In order to protect those depositors, in the judgement of those who have worked day and night on this over the past many weeks if not months, it is quite clear that we must at least be in a position to sell, if that appears to be the route best suited to save those depositors. In order to sell, we too must have some sort of a hand on the assets we are selling. I will come back to that whole question in a moment.

I was intrigued to hear discussions of the government's responsibility in this area. In very many ways I think the general definition the opposition would put on the government's responsibility in this area would not differ much from our own interpretation of it: that government move cautiously, that it move carefully; that when it moves it move firmly and as narrowly as it need move and as narrowly as it can move; that obviously, it move fairly, and that overall the goal of the exercise be to protect the depositors and others as they deserve protection in terms of their ranking and priority.

In that regard the member for Kitchener said a few moments ago he was concerned that there should be no preferential treatment for the Crown Trust depositors as opposed to the Greymac and Seaway depositors. Surely the object of what this government has done in introducing a single piece of legislation, as it relates to only one of the three companies, is to provide that sort of protection needed and uniquely suited to the needs of each of the depositors in each of the three situations.

For if this particular legislation was legislation that was timely for, or now required for, the depositors in the other two companies, then the legislation would have included those companies. In point of fact, given what I said a moment ago -- that when government moves it should move cautiously and narrowly -- in this sort of extreme circumstance, I suggest it was very important that we narrow the scope of this bill to those depositors and those circumstances which needed the protection of this bill at this time.

I would argue with the member for Kitchener that in order to give equal protection to the other depositors we must make sure that the depositors in the other two companies have the kind of unique strategy developed for them that has been developed to address the unique circumstances of the Crown deposits.

It is nonproductive and irrelevant to suggest that the same remedy, the same solution, could be applied to the depositors in three companies, all of whom face different circumstances. Therefore, in order to make sure there is no preferential treatment and that all depositors get all of the protection this government can provide, it is necessary to move differently with regard to each of the three situations, and that we strike the kind of circumstances and strategy appropriate to give maximum protection to all of the depositors. Surely, that is exactly what the opposition, the public and this party would demand in these circumstances, and surely the depositors would demand exactly that as well.

That brings me to the question of the soft assets versus the hard assets question. I would think in order to protect the depositors and to give them the ranking they deserve above and beyond everyone else in the circumstances, we must look at the soft assets. The soft assets are the very assets which put the depositors in this kind of tenuous situation. I find it unusual that some people would suggest that those assets -- those soft assets as we have come to call them -- which caused this perilous situation to fall upon the depositors, should now be left in the package so that they might stand as an impediment to getting the depositors out of the perilous situation into which those soft assets put them.

It is our obligation to make sure that if those soft assets causing this problem are a major impediment to resolving the depositors' problem and making sure they get their money back, we package those assets in such a way that the soft assets are not the impediment to bailing them out of the problem that the soft assets put them into.

I also contemplate the situation, and members have talked about the extraordinary nature of this action, but surely no one can dispute the requirement --

Mr. McClellan: This is an urgent debate.

There are no Tories here.

Hon. Mr. Grossman: Not now.

No one can dispute the requirement to bring in the kind of legislation that is necessary to save the depositors. It seems to me that members on all sides of this House would be extraordinarily critical of this government if we were to say to the depositors, "I am sorry, but for whatever reasons" -- which perhaps we could debate later in the minister's estimates or on a referral of the report -- "we do not have enough power to solve your problem." It seems to me that would be the most negligent thing the government could say and the thing the public least tolerates from government: "I am sorry. I sympathize with your situation, you have been badly treated, but I just do not have the authority to save the life earnings you have on deposit."

5:50 p.m.

Mr. Kerrio: That is what happened with Astra Trust.

Hon. Mr. Grossman: The member was critical of that happening. Surely if the member for Niagara Falls (Mr. Kerrio) agrees that is what happened -- without getting into whether he is accurate or not -- now that they have discovered a problem, a serious problem, which he and his leader acknowledge, they should not be saying to us, "Do not take extraordinary steps to make sure they do not lose their life savings." That is exactly the heart of the matter. Take whatever steps are appropriate.

I think it is the duty and responsibility of the opposition and the members of this caucus to make sure we do not take more powers than are necessary, but that we take the powers that are necessary to protect those depositors. Do so fairly and do so narrowly, but do not take a situation where we are already seized of knowledge and be negligent enough not to act appropriately to save those depositors. In my view, we would be negligent if, knowing what we now know, we did not take this kind of action in favour of the depositors.

I was interested to hear the leader of the third party suggest, and he may correct me if I am wrong, that on the basis of what he now knows -- and he is complaining he does not know as much as he would like to know -- he would not take this action. He may be concerned about what he knows and that he does not know enough, but I have to say that most members of the public, most thoughtful observers of the scene, would say that based upon the amount of knowledge the leader of the third party now has, they would indeed act.

He does not sense that the responsibility to the depositors requires that on the basis of that knowledge he would take this action. I say he would be negligent based upon what he knows, let alone what the minister knows, which I acknowledge is more, if he did not take action to protect the depositors, based upon the knowledge he now has.

Mr. Cassidy: That is a really biased view.

Hon. Mr. Grossman: Imagine that.

Mr. Cassidy: "Trust us," that is what you are saying.

Hon. Mr. Grossman: No, I am not saying, "Trust us."

Mr. Cassidy: You read the press and act on that; that is what you are saying; that is the position of the government.

Hon. Mr. Grossman: I would say to the member for Ottawa Centre (Mr. Cassidy) that his leader had an opportunity to ask further questions and to have a meeting to get more information. He declined. If he chose to rely upon the media --

Mr. Cassidy: Mr. Speaker, on a point of order: There has been a misrepresentation about that. The leader of the New Democratic Party was offered a meeting but was told he would not be able to use any of the information in public. It seems the conditions changed when the Leader of the Opposition went there, or he decided to change them unilaterally. The fact is, there was an effort to gag this party by providing only confidential information.

The Acting Speaker (Mr. Treleaven): That is not a point of order.

Hon. Mr. Grossman: I want to make it simple for the member for Ottawa Centre. On the basis of the information his own leader admits he now has, whether he got it from the newspapers, this House, or the documents available, on the basis of that information, let us understand his position. He says on the basis of what he knows, which is enough for him to admit that he finds the whole transaction distasteful and to rant and rave about the unsavoury nature of this, he is not prepared to take this kind of action to protect the depositors.

On the basis of the knowledge the minister has, we are comfortable in taking that action. On the basis of the knowledge the leader of the third party has, he ought to be willing to take this kind of action.

I also want to point out that this legislation is important from the standpoint that it prevents the winding up of the company, which would obviously operate to the extraordinary detriment of the depositors. I would like to hear whether others believe we should not make sure there is not a windup of a company that quite obviously can be saved, a windup of a company whose depositors can have all of their money protected.

Should the government not step in in that circumstance and say, as it does in Bill 215, section 9, that the company should not be permitted to be wound up, save and except under the authority of the registrar pursuant to this legislation? For in the absence of this legislation it is quite clear that an application might well have been brought -- indeed, I think an application was brought -- to wind up the corporation. Is the proposition being put that we should --

Mr. Nixon: The province is running the company. It cannot be wound up as long as the province is running it.

Hon. Mr. Grossman: The shareholders believed they had an opportunity to go to court and make an application to wind up this company, which would operate to the detriment of the depositors. I think that would be a very dangerous thing to do, and certainly not in the interests of the depositors.

In reality we all move very tenuously in this kind of circumstance. But surely the government must move firmly, must go on the offensive and, seized with the knowledge we now have, must say, "Okay, we must move firmly and expeditiously in this sort of circumstance."

There is no question that rights are being affected, but I think it is important to put them into perspective. The preferred shareholders, of whom the member for Kitchener spoke most eloquently a few moments ago, do rank. They will rank appropriately behind the Canada Deposit Insurance Corp. and the depositors.

In fact, when this has all shaken down, the preferred shareholders may have benefited from the presence of the government, which was there in order to protect the health of that company in which they invested. So that we get it into some perspective, their rights are in place, they will rank where they ought to rank, and I do firmly believe that this firm, difficult action by the government will serve them best in the long run and they will benefit as a result of this action, which at the present time they are understandably concerned about.

Finally, it has been suggested that some of these explanations, some of the information given out by the minister, was self-serving. I say it was depositor serving, it was public-interest serving, but it certainly was not self-serving.

When one looks at the sequence of the last few weeks, members of the opposition shared with us a concern that all sorts of serious things could happen in these situations: runs on the three trust companies, runs on other trust companies. People pictured long lineups, panic in the streets. People were, let us admit, surprised when the situation unfolded rather reasonably and without panic in a rather orderly way. I think the public did understand what was occurring, that the government was present, taking responsible steps. In order to accomplish those kinds of things, an orderly sort-out of this situation, ministers from time to time have to take criticism and have to carry the burden of their jobs quite openly and clearly. That comes with the job, and my colleague has taken some criticism and stood in this House, as we all have to do from time to time, and faced unusual criticism, which sometimes is misunderstood and sometimes not understood.

But he has to do and has had to do and has succeeded in doing what he set out to do, which is to protect the depositors, protect the industry at large and make sure that we have been in this situation and handled it in such a delicate and careful way that the depositors are protected, perhaps -- may I say to those who have suggested that his statements were self-serving -- at the expense of this government and this minister, at least in the short term; because surely in the long term the fact that the industry will survive this crisis and that the depositors will be protected will justify these actions. The fact that we have acted only as narrowly as we have to, as cautiously as we can and as cautiously as we need to, will justify all of these steps.

6 p.m.

The government and the minister have faced many difficult hours, but I think we can reflect now at this time -- and it is not over -- that at least the minister has made sure we are abreast of the situation. He has done this by providing information when it has to be provided, the appropriate amount of information, the information he can provide when he can provide it, in an orderly, understandable way. He has made sure that others cannot take advantage of the situation and that confidence in the industry is maintained.

Above and beyond everything else, the depositors who have money at risk in three trust companies have not gone through extraordinarily difficult days, misunderstanding their situation. They have had their deposits protected to the extent this government can protect them. No one has been able to rise on the other side of this House and say the depositors have not been protected and that we have not acted expeditiously and with the full force that we can. Not only that, but the depositors have had their peace of mind assured, knowing that their security has been protected to the extent it could be protected. This is because the minister has been willing to carry the burden of these responsibilities, take the criticism and handle it in a calm, reasonable manner.

Looking back at the situation, we can reflect on the fact that we have an orderly, peaceful situation now, with people relatively comfortable, given the extraordinary nature of events. This brings great credit upon the minister. It says to his colleagues that these kinds of steps we have looked at from time to time, and have taken only after much concern and deliberation, are appropriate, timely and proper, given these very difficult circumstances. I urge all members of the House to join us in supporting this difficult but important legislation.

Mr. Nixon: Mr. Speaker, when I entered this House almost exactly 21 years ago, an almost identical issue was consuming the members, the press and the citizens. That was the collapse of British Mortgage and Atlantic Acceptance. I well recall one evening when the debate achieved great flights of oratory, and the benches in all the galleries were full of people who stood to lose their deposits and their investments -- in many instances they did lose those investments.

It is interesting that the Minister of Health (Mr. Grossman), who is a former Minister of Consumer and Commercial Relations, has just spoken. I am informed by a usually reliable source that the Minister of Community and Social Services (Mr. Drea) is sitting in the wings, ready to make a contribution, and the Minister of Industry and Trade Development (Mr. Walker) is in one of the offices down the hall, consulting with one of his many overpaid experts as they come to the final draft of his contribution.

If a minister ever required shoring up, it is the present Minister of Consumer and Commercial Relations. I cannot find it in my heart to blame him personally for the mess and the chaos, the financial catastrophe we are facing, the loss of confidence we have experienced. They are not his responsibility alone.

I cannot really recall the history, as it recedes into the dimness of those 20 years, of who was responsible in those days. But when one thinks of all the failures of financial institutions, these various ministers -- Grossman, Drea, Walker, Handleman, Clement, and now, of course, the present minister -- have all looked at these situations and have assured this House that we should believe in them. For at least a decade of that time it was the same Premier who would get up and take the same impassioned, Sunday-school-lesson approach to the House he did today -- indicating that all we had to do was have confidence in his ministers and this sort of thing would fade into the mists of history and all the depositors would be safeguarded.

This is not good enough. The failure is a collective one of the variety of ministers who will be speaking in this debate later this afternoon and this evening. It amazes me why these men of intelligence and goodwill could not move into that ministry and seize the sort of initiative that is required with the strength they undoubtedly have in other issues, and set the business to rights.

I have come to the conclusion that the government of Ontario is not qualified to administer any deposit-taking organization. I personally believe we should abandon all of these organizations' administrations and put them under the federal Bank Act. I think Ontario has proved successively that even with strong, well-intentioned ministers there seems to be so much inertia in the government of the day -- or the civil service, if that is not an unfair comment to make -- that we are really incapable of the sort of direction of trust companies the people of this province deserve and expect.

There is something magic in the minds of the citizens of Canada and the residents of Ontario when it comes to banks and trust companies. Something has happened to the people of Canada that has conditioned them to be completely trustful in organizations that have marble facing out by the street, a few pillars to set them off, and set up with provincial charters with the kinds of names that we have grown to respect. Our approach to the banks and trust companies is known all over the world. It is known that our level of deposits and savings per capita is greater than anywhere else.

Today, the Premier and the minister have lectured us, as members of the opposition, not to do anything that would in any way endanger the safety of the deposits made by our residents, our citizens, our electors, our constituents. We do not need that sort of lecture.

Crown Trust has had an office in the city of Brantford for many years. It is right up there with the Bank of Montreal. It is right up there with the other banks in town as a place where people have had confidence for over almost a century in placing their deposits and having them deal on a trust basis with estates, and so on.

Now we find that this has been somehow dissolved and eroded. It is interesting to note that in less than 100 days, in a company that has been in existence almost a century, one individual has been able to acquire 99 per cent of the controlling stock and, in that period of time, has been able to reduce and erode the financial basis of the company until we are now in a position where the government of Ontario has placed it under trusteeship and is now asking for authority to sell it.

I ask the minister, a person I like, where were his inspectors during those three months? It is incredible to me that such a circumstance could occur in Ontario. This jurisdiction has a high reputation across the world, I would say, for having managers at the government level and at the civil service level who would not allow these things to happen. It is amazing how people forget the record of inadequacy of this government's responsibility.

It has already been said by the member for Kitchener that the common denominator in all of these ministers was the Premier himself, who is even now winging his way to Winnipeg. It is appalling to me that the Premier can get up in the House and lecture us that our duty is to support the government in yet another failure of its continuing responsibility.

I go back to my opening comment. It was that 21 years ago, confidence in our trust companies and certain other financial institutions was rapidly deteriorating. In order to restore that confidence, we had a bill establishing the Ontario Deposit Insurance Corp. It was obvious this should be a federal responsibility since there were depositors outside of this province who would be affected as well. This was really put in very much as a stop-gap measure, a Band-Aid, to maintain confidence until the government of Canada would act.

The Premier, in his condescension, claimed the credit for federal deposit insurance. Actually there was nothing wrong with the bank system. There have been no failures in all those years with the bank system that is administered federally. It has been at the provincial level and in Ontario where the catastrophes have occurred.

The former minister is mumbling away there, no doubt about some bank failure that we are talking about, and there were one or two. As a matter of fact, the president of one of the newly chartered banks in the last few years spent a few months cooling his heels in one of the minister's institutions, when he was Minister of Correctional Services. So there is nothing perfect at any level.

But the point is the federal government moved in to save the province 20 years ago with federal deposit insurance. Of course we should have had it. They have had it at the federal level in the United States for a good long time. The fact these limits have now been raised to $60,000 is very appropriate. My own feeling is, when one looks at the value of the dollar changing over these times, that it would have been much better if it had been raised to $100,000.

6:10 p.m.

We do not see Ontario moving in to this area with even what one might call second-level deposit insurance for any residual losses that might occur in provincial chartered organizations, such as the trust company we are talking about today. It could very well have been the province's responsibility in action to move in and provide that additional safeguard. It is obvious the depositors of Crown cannot be permitted to lose those deposits.

I have had calls from three of my constituents, all of them widows. Their husbands, very properly and with appropriate foresight, saw that upon their demise their wills would liquidate their holdings and the money would be managed by Crown Trust. What could be more reliable than a company that had done business in our farm centre of Brantford for almost 100 years? They have phoned me, not in any great panic, but to say, "Bob, we are counting on you" -- me -- "to do the proper thing to safeguard these moneys."

I have had reason to find out in the last few days that the perpetual care fund of St. George United Church is invested 100 per cent in Crown Trust. It has been brought to my attention that the city of Brantford has on short-term deposit $4.5 million of money received from its taxpayers, which it would draw out to meet the requirements of its payroll and other expenditures over the next few months.

Obviously, that is well beyond the $60,000 safeguard the federal government has seen fit to establish, but they are the sort of losses that cannot be contemplated. The government of Ontario has got to take the steps necessary to safeguard any of those possible losses. They simply cannot occur. Certainly we on this side are prepared not only to demand that those losses cannot occur, but we are prepared to support any sort of reasonable program that is going to allow those safeguards to take place.

But I feel in some respects that I am also talking for my constituents who are not learned in the law and maybe they do not have any dollars invested in a trust company. In many instances their investments are in their farm properties and in their machinery and they are on the other end of the trust company rather than in a position where they might lose certain deposits. They are absolutely nonplussed. When they speak to me, they say, "How could this company be in trouble?"

Sure, a brilliant entrepreneur, a person with no lack of self-confidence and chutzpah -- I think that is the word, although my pronunciation might not be perfect -- would arm himself with a couple of brainy lawyers and move in and take over this historic company, along with certain other companies. He does that with one hand and with the other hand he is buying $200 million worth of apartments. Through a number of flips, he is seeing they are sold to Saudis for $500 million.

My constituents say: "My God, how can that company be in trouble when this brilliant entrepreneur, this financier, this baron" -- I hesitate to use the adjective that goes with it normally; financial baron, we will leave it at that -- "is able to do these sorts of things? My God, if he can make that kind of money, why is he squirrelling money away in some other little corporation somewhere where even the great Mr. Biddell, former chairman of the Clarkson Co., does not seem to know where it is?"

My people read the headlines in the Brantford Expositor and when they read that the money is gone, they tend to think of it gone in suitcases to Grand Cayman or Switzerland. The minister says: "No, that is not the case. It has simply disappeared because the values of certain properties have been overstated."

I see the minister looking at the clock and thinking about his supper.

Interjection.

Mr. Nixon: I am asking what happened to this company. Here is a brilliant guy who is going to be far richer than the minister is ever going to be, even if he had stuck to his scalpel -- or perhaps if his scalpel had stuck to him. Here is a person who is going to become a world-class multimillionaire as long as he stays out of jail, which is another matter we should be talking about, no doubt -- and yet the minister is saying this company is folding.

How could the assets be lost when he has his platoon of inspectors? They are all paid over $50,000 a year -- the minister is frowning again; let me correct that -- over $40,000 a year. They all have had the experience of appearing before the standing committee of this House, and know how concerned the opposition is that their inspection and, beyond that, their policing function, is carried out without mercy when it comes to trust companies. How could this have happened?

I would like to blame the former Ministers of Consumer and Commercial Relations, the member for Scarborough Centre (Mr. Drea) and the member for St. Andrew-St. Patrick (Mr. Grossman), and maybe some others, but we cannot, because neither of them was the minister when this occurred. We want to know how this system could have been allowed to get out of the control of the public interest in such a way that this fiasco could have been perpetrated.

The Premier made his appeal to us, that we cannot endanger the depositors. I do not believe the depositors of Crown are in danger. The government, if pressed to it, is going to have to find the money itself. The minister is shaking his head, but it will. After all, it took the decision, with all the consultation that might have been necessary, to place these companies under trusteeship.

Frankly I thought it was ridiculous that it did not give itself the power to dispose of a company, if necessary, under these circumstances. The Premier's argument that this is only because of his great foresight does not wash very well when now the minister is saying he needs the required legislation in a few hours. It does not wash when he is holding up the usual terms of blackmail to the opposition that unless we concur, widows and orphans are going to be driven out into the snow. That is absolutely preposterous. It is completely unfair. It rejects basically the responsibilities we have as elected members of the Legislature.

The minister has said time and again that the information he has given to us has been made available as soon as he received it. I am not a financier and not learned in the law, but I put myself in the place of the ordinary citizen. The information the minister has given us has left an "understanding gap," a phrase he has sometimes used. He has restrained himself from becoming condescending on the basis that everybody else is too stupid to understand. I do not think he would think that. His information has been, from an objective viewpoint, garbled in the extreme. It has not followed any sort of a rational review of the disposition of the money or even the basis of changes day by day.

One of his more recent statements threw in a comment about some corporation called Green Door. For the life of me I cannot think why he would even mention such a company unless he were thinking he would make some sort of in-joke. It is really irrelevant. I see now the principals of Green Door are trying to sue the minister, not knowing that we have placed all sorts of safeguards around him. As long as he stays here and does not go out to the washroom and talk about Green Door he is quite safe.

My point is that in trying to elicit any sort of a rational understanding of this weird sequence of events, the minister has been less than useful. Anybody who is a lawyer and a brain surgeon has to have a certain IQ, although I am not prepared to set a specific number to it. When he is such a bright guy and must realize the attacks he has to respond to, I cannot imagine why he has not been more forthcoming, even with his own people.

I sometimes think he does not understand it himself, just as I do not understand it. His approach to this has been garbled. He himself has had an understanding gap, and he also lacked the strength to go to his inspectors and say to them many months ago, "We are going to have to set this straight."

He should have said further, "I have seen the transcript of the investigation of the standing committee into Re-Mor and I have seen where some of my high officials have directly contradicted each other in the testimony they gave there."

6:20 p.m.

I was a member of the committee on one occasion and I was so appalled I went to the representative of the Ministry of the Attorney General who was monitoring all those things. I said, "Surely you are going to recommend to your principal that charges of perjury be laid in this instance, because it is such a clear contradiction of what were supposed to be facts from senior officials of that ministry." Nothing was done and his only response to me was, "Perjury is difficult to prove."

Here was the information taken under oath, recorded by Hansard for everyone to see, and still the minister, who probably did not even look at the transcript of those hearings, has allowed it to drift on until we find ourselves in this terrible situation.

I want to say in closing that we are as concerned about the safeguarding of the depositors as the minister or anyone else. We are committed to the fact that none of the depositors will lose his or her money. It simply cannot be allowed to happen. We also have a responsibility on this side to look at the other trust companies, Greymac and Seaway.

There is a tendency for people who talk to me to say, "Oh well, those are fringe trust companies," and that sort of thing. My friend says they are sometimes described as bucket shops. I do not know about that other than I do know they are chartered by Ontario. The approval of the minister and his officials is necessary. They are inspected. Most of the people I know have thought that was good enough to secure their deposits.

As somebody has pointed out, the financial administrator for the Peel Board of Education as recently as December and later than that has made very large deposits with Seaway on the basis that it would get a little bit of interest. When he was criticized for doing that he said, "This particular company was put on the approved list by the administrative managers of the Ministry of Education itself." In other words, the responsibility goes back to one of the minister's colleagues.

The minister's colleague would say: "Surely it is all right. 'Seaway' is kind of a funny name. I would sooner it be called 'Eaton Bay' or something like that but, if they are going to call it 'Seaway,' I guess that is all right. It is approved by the minister and his people so why should we not get the extra per cent or per cent and a half for the good of our taxpayers."

Now there is the thought, and I even feel it emanating from the ministry, "Maybe these peripheral companies can fold. After all, they were just vehicles for those entrepreneurs to make themselves millions of dollars and make the rest of us look silly." There is only one person who looks silly in this and that is a minister who was not strong enough to see that the laws were obeyed, that the inspectors were on the job and that the police moved in when they should have. At least he should have seen that orders were issued by the ministry to divest themselves of these so-called soft holdings at a time when they could have been obeyed without breaking a bank.

The information has been inadequate. In spite of what the minister has said, the administration has not been coherent and it has not been complete. Second, the other shareholders are not safeguarded. The last objection I suppose is something the opposition believes in more than the government would ever understand. The minister, through the Premier, should agree to establish a royal commission in this instance. It is inadequate for the minister to say, "My Mr. Morrison, my Mr. Biddell or somebody is going to get this all together and some time we are going to send it to the standing committee and we will have a dandy time going over it."

The minister may not believe it but when we go into these committee hearings sometimes politics rears its ugly head. This is a political forum. In an instance such as this, there is not going to be any satisfaction until a judge can take an independent look at this situation. If it takes five years that is terrible; if it takes $5 million that is even worse; but eventually I would like to see a nice three-volume report thumped on our desks here. It may be too late to do too much for Greymac and the others, but it will establish where blame and responsibility in this situation lie.

It is not good enough for the minister or the Premier to say, as the then Minister of Consumer and Commercial Relations (Mr. Walker) said a year ago: "It will never happen again. We are going to put red tags on certain files. We have a special list of names of people we will not give a charter to." Believe me, Mr. Speaker, that is not good enough. There is going to have to be an impartial review of what the government has done and what it has not done. Until they come up with approval for that procedure it is impossible for us to vote in favour of the principle of this bill.

Interjections.

Hon. Mr. Drea: That is not what the member for London North (Mr. Van Horne) said down in London when he was mooching money off me.

Interjections.

Hon. Mr. Drea: Then perhaps I will revoke the cheque.

Interjections.

Hon. Mr. Drea: I thought it was always the adjunct of the Liberal Party that a government minister should treat every cent as his own money. That was supposed to be the ultimate thing.

Mr. Speaker: Now to the bill, please.

Interjections.

Mr. Speaker: The minister has the floor. Never mind the interjections, please.

Interjections.

Hon. Mr. Drea: I would be delighted to tell you about Astra Trust because it was under federal jurisdiction. But I will not.

Mr. Kerrio: The minister should not give us that routine again.

Hon. Mr. Drea: Mr. Speaker, the member over there is challenging a known statement of fact. Astra Trust was chartered by the federal government and was under federal jurisdiction. I was around that committee at the time and the member was very upset about it and stonewalled everything about that. But that is not why we are here today.

Mr. Cunningham: Mr. Speaker, on a point of order: I take exception to that. It was licensed under the Loan and Trust Corporations Act in the province of Ontario. Surely, he would not want to leave that misconception.

Hon. Mr. Drea: Mr. Speaker, I said, quite specifically, it was chartered by the federal government, it was chartered first by the federal government. The member knows that licensing in a province is automatic after that.

Mr. Speaker: I do not think there is anything about this in Bill 215.

Hon. Mr. Drea: I would be delighted to talk about Bill 215.

Interjections.

Mr. Speaker: Order, please. Surely, if we are here to represent the rights of all individuals, we should respect the rights of the individuals in this House. I would suggest that we all listen to the minister in his remarks on Bill 215.

Hon. Mr. Drea: Thank you, Mr. Speaker. To show good faith on my part, I will forget about the last remark but I really think it was something else. I think the honourable member, upon reflection, understands now exactly what he did say.

The matters before us have been made very clear-cut by the statements of the Minister of Consumer and Commercial Relations on numerous occasions, particularly those made this afternoon before the start of question period, which were most succinct. The remarks of the Premier again were most succinct and were focused upon the imperatives of the issue.

6:30 p.m.

Since November 4, 1982, I believe my colleague and my seatmate to my right, the Minister of Consumer and Commercial Relations (Mr. Elgie), has been most succinct. If there was any flaw in the public utterances of my colleague, it has been his very constant insistence on being as succinct and as direct as is possible, not only to the members of this House but also to the public as well as that small part of the public who were shareholders and a somewhat larger but still small group who were depositors in those three institutions. He has been direct with those involved in two other institutions that were under federal jurisdiction but inevitably linked into the situation involving the three trust companies and, most of all perhaps, with the general public at a time of great economic uncertainty.

The fact of the matter we are discussing in Bill 215 is very simply which of two choices this assembly and this government will take towards one of these three trust companies. It is the best known historically, more respected than even the Bank of Canada, as the very solid of solids in the financial field. The question is, which of two alternatives will this government and this assembly choose to take?

For this assembly, there is only one real choice, because I do not believe there will be a member who would suggest that no action be taken, that the depositors should take additional losses, particularly depositors who acted in good faith on the basis that they were not investing in a company and were not involved in risk capital but were placing their money in a safe financial institution -- safe by virtue of the fact that the money was insured.

In the view of most of the people with deposits in there, even the old $20,000 coverage was more than adequate protection for their choice in deciding to use this second-level financial institution; it is not a chartered bank, and perhaps is not as well defined as a chartered bank, but it has evolved into a near-bank.

To allow the company simply to collapse further and to the point where a liquidation or windup or whatever the technical term is would be in order, when we know what we know and the balance sheets as we know them show that this is not only inevitable but also is coming very rapidly, would qualify for the judgement of being negligent.

To do nothing, or, I suppose, to take a very laissez-faire attitude and say that there are provisions for windups and liquidations, that there are insurance provisions to protect depositors up to a certain amount, that the shareholders went into it in a risk capital situation and this only goes to show that there is risk, would show a total inactivity, a total callousness, which quite frankly should not be prevalent in any manner, shape or form in today's financial or economic community.

What the minister and the government have brought forward to this assembly is authority to dispose of certain assets of Crown Trust Co. The disposal would do three things. Obviously it would protect the depositors who now are being protected by the Canada Deposit Insurance Corp. It would also prevent substantial further losses through additional claims against the Canada Deposit Insurance Corp., which, regardless of its initials, is you and I. Finally, it would ensure that a great number of innocents, particularly those who are acting on the advice of solicitors or executors or people who have been chosen to ensure their financial wellbeing as well as provident investments can do, would not have to bear the brunt of a total collapse. Obviously, in terms of those two choices, Bill 215 is the route to go.

The question has arisen about whether Bill 215 should have been required. The relatively short legislation that was passed in December gave, for the first time, very special powers to the registrar of loan and trust corporations to intervene in the direct affairs of financial institutions under his jurisdiction; it gave him the power to take over and operate them in addition to the authority he already had which allowed him to preside over a liquidation when a liquidation was officially declared. Perhaps the power to dispose in any manner that seemed financially appropriate at any time after the trusteeship was imposed should have been put in that legislation.

Upon reflection, I think the members of this assembly will agree it is one thing to have the right to go in when there is reasonable cause to believe there are financial adventures going on that could be to the detriment of the depositors and the shareholders; and, upon gaining total access on a moment's notice to the internal and intimate affairs of that financial institution, to be able to maintain it temporarily and to operate it so there will be the least dislocation to the innocent, not only financially but also in other ways. But surely it is another matter to give the power to dispose of, to sell or to carve out the assets in a very general way.

6:40 p.m.

In short, the advocates of that position are suggesting the Minister of Consumer and Commercial Relations, because the registrar is responsible to him, be given a blank cheque to dispose of a company once he has taken it over.

Surely this is the appropriate way. We are here about Crown Trust at this time. We are dealing with Crown Trust, its depositors, its shareholders in the preferred stock category and the relative handful that are left in the common stock category. We are here on a specific matter where each and every one of us can make up our own mind that, on the basis of what we know and what is before us, this is an appropriate form of action.

I agree with those in the opposition, not only the official opposition but also the third party, who say it would be irresponsible of them blindly to pass Bill 215 without ascertaining as much information as they can. By the same token, I point out to them that if that is a valid concern -- I believe it is, and I am sure they believe it is -- it is equally valid that the Minister of Consumer and Commercial Relations has the obligation to communicate, not only to this House and its members but also to those directly involved and indirectly involved, as much information as he can without affecting the rights of individuals.

Mr. Foulds: Like members of the Legislature?

Hon. Mr. Drea: No. There are far more people in this province who have rights than the 125 people who sit in this room. All the people in this province have rights. One does not get it by getting elected and strolling through these chambers. Indeed, one's personal lifestyle, views or whatever on the outside may not be the member's cup of tea or mine, but one has rights.

It would have been irresponsible for the Minister of Consumer and Commercial Relations not to communicate to the best of his ability, not to provide as much information as he could, not only to those who were going to make the decision but also to a public that was very interested in what decision, if any, will be made. I believe he has responded extraordinarily well to the requests for information.

If there is some concern by some members of the House that his representative went to one caucus, let me say that the invitation was made to my friend and colleague to come to a caucus by the leader of that caucus. Nobody at that time found anything so terribly the matter with the requests of that party leader.

If that party leader, in terms of who was coming, wanted to set some conditions he thought would facilitate the exchange of information and they were agreed to, that would have been fine. If somebody else wanted conditions that could not be met and therefore there was not that sharing of information, that was because of decisions and terms and conditions that were laid down and certainly not because of any responsibility of the minister and how he would communicate.

One thing that should be pointed out is that the central insurance agency, the Canada Deposit Insurance Corp., wants some immediate action taken on Crown Trust, and rightfully so. It is common knowledge -- indeed, it was revealed in this Legislature -- that, on the basis of the Woods Gordon analysis on January 7, to use the vernacular, Crown Trust was no longer a viable institution. Of course, it had assets; it also had liabilities. But upon close examination it did not have the viability or the resources to enable it to continue as a financial institution. In some very professional views it did not have the base so that it could borrow; and if it could not borrow, it could not meet its obligations.

The CDIC stood in the place of what normally would be, in a financial institution that was viable, a reserve fund. The CDIC provided the funds whereby those who were depositors with Crown Trust could withdraw up to $20,000. They still stand there. They are now saying in essence, having looked at the state of the company after some very intensive and very active financial investigation by professionals, they want some of the collateral, which is those very hard assets, converted into dollars, with the dollars to come back to the CDIC.

Regardless of what funds have to be advanced and for how long, since there is obviously a desire to keep this financial institution operating, albeit under different conditions and under different people, the CDIC is quite properly saying: "We are not in the business of subsidizing independent financial institutions; we are in the business of protecting depositors. Our customary role has been at times of collapse or liquidation or winding down, and therefore we want these assets disposed of."

In short, that is the celebrated number of headlines about the sale of the assets, not of the company. I do not think there ever has been any doubt in all the talk or discussion about the future of Crown Trust that a new buyer would be asked to buy very soft or questionable assets. I think this has always been the concern of the public: how can Crown Trust be disposed of, sold, acquired, merged or whatever? I do not know what the ultimate fate of it will be when there are some highly questionable assets, at least not accurate and not hard assets, the new proprietor would have to face.

There has been a healthy cynicism that the taxpayers should not have to guarantee any new owner of the entire Crown Trust operation the right to conduct business with the assurance that if some of the questionable liabilities turned out to be extremely questionable, the taxpayers would be saying: "Go ahead and operate the business; do it in a conventional matter. But if you get into difficulty with these, the CDIC or some other aspect of the provincial or federal government will step in." That has never been.

6:50 p.m.

The second thing is that there is a great concern being expressed for the shareholders. I think we can be realistic and say it is for the preferred shareholders primarily. Because there is a concept out there that there is only one common shareholder, it should be emphasized that there are more than one. It is a relatively small group, and I have concern about them, all save for one on the common front.

There is a concept that the shareholders, but particularly the preferred shareholders because these were long-term, safe investments, are being ignored, threatened, confiscated and so forth by this piece of legislation. One of the reasons for this legislation is that if the other alternative, which is to do nothing, takes place, there is not a person in this assembly who does not know these shareholders will lose everything. This piece of legislation at least provides that they will not lose everything. How much will they be able to recover? Only time will tell. But at least it is a normal and conventional attempt to try to get them the best remedy possible under the situation.

It is fair to look back. But let us not go back 21 years to look.

Mr. Foulds: Why not?

Hon. Mr. Drea: We could probably go back 50 years. It is more appropriate to look at the 1970s. Conditions are different. Conditions in the financial community and in all kinds of things have changed.

Mr. McClellan: Take your time.

Hon. Mr. Drea: I say to my friend, if I bore him, think of me. I have had a lifetime with him and have never objected.

Mr. McClellan: It has only seemed like a lifetime.

Hon. Mr. Drea: I can prove it is a lifetime. If we look at the decade of the 1970s --

Mr. McClellan: Is this a filibuster? This must be a filibuster.

Mr. Ruston: I think it is a filibuster. It sounds like it.

The Acting Speaker (Mr. Cousens): Order. Speaking to Bill 215.

Hon. Mr. Drea: I am not one of those in the closet telephone club who do filibusters.

In the 1970s there were some notable failures in the near-banking field. Contrary to some of the things said, and I am sure they were said in innocence rather than with intent, not all of them have been under provincial jurisdiction. Some of them have been under other jurisdictions.

There is a commonality in all of them in that in the near-banking field, whether it is called a trust company, a loan company, a credit corporation or whatever, the present rules and regulations allow for very dominant shareholders. They do not have, either under federal or provincial jurisdiction, or anywhere in the country, the same type of limitations that are present in the chartered banking field. In the chartered banking field, there is a limitation on how much one person, one group, can hold and so forth.

Mr. McClellan: Tell us why you didn't bring in legislation when you were a minister.

Mr. Cunningham: You were too busy putting the tops back on girls: that was the first order of the day.

The Acting Speaker: Order. I ask the honourable member to restrain himself and withhold his comments.

Hon. Mr. Drea: The first thing that has to be looked at is the role of control in the near- banking field: whether limitations should be put on it, whether the whole near-banking field should not be more carefully defined, whether the primary responsibility is fiduciary, whether there is a role for competition against formally chartered banks, what it is and what it should be.

Obviously one permanent form of legislation in this province has been changed. That now gives the province the right to sit in judgement not only on who will be allowed to start a near-bank but also on who will be allowed to acquire it. That in itself is a very difficult decision, because one is sitting in judgement of people who are acquiring more assets in the conventional sense. That decision came very hard.

In essence, the decision the assembly has to make, short of those who will make very emotional outcries, beating their chests and doing a number of other things, is not to sit in judgement and make wisecracks about the Minister of Consumer and Commercial Relations. Above all, the minister has acted honourably and with strength, determination and courage. The only thing the Premier was guilty of today was understating the minister's attributes.

The question is, do we go ahead with a piece of legislation that is limited in scope to one institution and provides what the experts feel is the best remedy for all concerned under the existing circumstances, or do we sit back and do nothing? On that basis, it is a very simple, very conventional and very thoughtful choice. That choice is that there should be unanimous support for Bill 215.

Mr. Cunningham: Mr. Speaker, the last contribution probably had more to do with the necessity for the honourable doctor to have a good dinner for a change than to be brought up to date, I suppose, with at least the previous speaker's contribution during his tenure as minister.

An hon. member: Have you had dinner yet?

Mr. Cunningham: I have not, but it might be a good idea in a little while; although I would not say that I need --

The Acting Speaker: The honourable member will refer to the bill.

7 p.m.

Mr. Cunningham: Mr. Speaker, we were treated this afternoon to what might have been categorized as a little homily from the Premier. It almost threw me back to the one year that I had the opportunity to hear the Premier during the course of Sunday School at St. Paul's United Church in Brampton, Ontario. He was exhorting us to be good boys and girls over here and give quick and speedy passage to this item of legislation.

I would like to put on the record right now that if this Legislature were required to deal as expeditiously as the Premier or the Minister of Consumer and Commercial Relations would have it, then why were we not seized with this matter a lot earlier?

The harsh facts of reality are that on January 7, Woods Gordon made its initial report, I believe, to the minister and indicated to him what sorry state of affairs existed, particularly with regard to the operation and the financial conditions of Crown Trust. Only eight days later, on January 15, we had the strictly confidential memo which now has been circulated in part to members of the Legislature, again indicating the severity of the situation and the extent of the difficulty there.

When we had the occasion to meet with Mr. Biddell in the confines of Mr. Peterson's room, he indicated that if he had his way this matter would have been dealt with last week. We have been asked, as members of the Legislature, to trust the government, to trust the Premier and, more particularly I guess in good faith as we have been in the past, to trust our good and dear friend the minister. Sadly I say to you, Mr. Speaker, and through you to the minister, that the trust we have placed in this government has been somewhat abused, particularly in the last 24 or 48 hours.

I listened with interest to the very fine contribution in this debate by my friend the member for Kitchener, who brings a sense of balance in his comments that maybe some of us do not add to when we make our contributions. He favours us with a historical analysis and also today he put on the record quite clearly the editorial concerns and the concerns of columnists in the city of Toronto and also in his own paper, the Kitchener-Waterloo Record.

My paper, the Hamilton Spectator, which I regularly read, is not known to be partisan one way or another. The minister may not have been favoured with it last night, January 26, when it indicated its opinion on this subject in an editorial entitled, "Trust in the Dark." I will quote some of the relevant parts for the members, because I know the Hamilton Spectator is probably not on their coffee tables every night.

"On December 21, the Ontario Legislature suddenly gave the government power to seize trust companies. On January 7, the government grabbed three of them. Now the government wants to sell one in a hurry. That is all the people know about what their government has been doing, but why is still a mystery.

"Opposition parties have been doing their job, hammering at the government for an explanation. They have rightly insisted on some facts before they will agree to new legislation giving the government unchallengeable power to do what it will with Crown Trust. They should stand their ground in spite of the political gun Consumer and Commercial Relations Minister Robert Elgie holds at their heads.

"Dr. Elgie demands quick passage of his sudden and ominous legislation. 'Delay in the sale of Crown,' he said, 'would inflict heavy losses on depositors.' In other words, if the Liberals and the New Democrats do not buy the pig in the government's poke they will be the culprits if the Crown depositors are hurt.

"The government's gamesmanship is less than responsible. Dr. Elgie offers only glimpses of the scene taking place behind the drapes the government has hung over the trust company's affairs. But the government still demands approval for whatever is happening behind there in the dark.

"In effect, the government is saying, 'We cannot trust you enough to tell you what we are doing, but you must trust us.' That is no justification for handing the government a blank cheque. A responsible opposition cannot simply close its eyes and swallow a new law giving the government exclusive power to operate and sell Crown Trust and, at the same time, make the government immune to any court action that might be prompted by its handling of Crown.

"There is no reason to doubt that the government is acting to protect Crown depositors, but they are not the only people involved. When it seized that company and the others, the government made a commitment on behalf of every resident in Ontario and the people deserve an explanation." So went the editorial.

Yesterday, I had the misfortune to attend the standing committee on administration of justice, as I have many times on matters that pertain to loan and trust corporation dealings. My first involvement in that particular instance was during the estimates of the ministry three years ago, where the member for Riverdale (Mr. Renwick) and I initially raised the subject of Astra Trust. We were told by the minister at the time, the member for Scarborough Centre (Mr. Drea), who has just taken his seat and now left, that this was a federal matter and that we need not be concerned about it, but that he would look into it.

Later that year when we returned, it was painfully obvious to us, having seen the collapse of C and M Financial Consultants and the licensing of yet another mortgage brokerage company 13 days after the collapse of C and M, that this did have very serious concerns for the provincial ministry.

Notwithstanding that, as I have put on the record in this House on at least five or six occasions, the minister stood in his place and endeavoured to leave the misconception in this Legislature for members of his party, for the rest of us and for the public, that the Astra matter was a federal matter and that the federal government was responsible. He chose to ignore the licensing requirements in the Loan and Trust Corporations Act and the monitoring, administrative and regulatory responsibilities that his ministry had at that time and which it alone now has.

Mr. Speaker, it is unfortunate that you were not in the standing committee on administration of justice yesterday because your sense of fair play, I am sure, would have caused you to reflect very seriously on just what was going on there. The parliamentary assistant to the Minister of Consumer and Commercial Relations attended the committee and made a motion intended to gag the committee, as has happened in the past on other matters pertaining to irregularities in the operation of loan and trust corporations in this province.

In fact, that reference to the committee directed by the member for Riverdale perhaps would have provided members of the Legislature an opportunity to discharge their responsibilities, not to go on some witch-hunt to embarrass the government but rather to find out the harsh facts and realities of what in God's name is going on in that ministry.

It is not as if we have one isolated instance where we can draw a bead on the minister and indicate that there are some things that are inadequate. There has been a litany of failures, many of which we have forgotten. As I said the other day in debate, the public in this province is benumbed by these daily events and sometimes there just is not the kind of concern on the street that I think we should have.

We attended the meeting yesterday in the justice committee in which routinely there is circulated, by statutory requirement, the report of the registrar dealing with loan and trust corporations. The report was for 1979, and it is now 1983. The report prepared for us to deal with, the report outlining all the statistical analysis that is required in order for the minister, his registrar and members of the Legislature to determine the propriety of these operations and what is being done in the public interest, referred to the year 1979.

With it, we get an apologetic letter from our good friend the registrar, Mr. Thompson, which says, in part, "It is with some embarrassment I must advise you that the tabling of our 1980 report was not carried out in accordance with our normal practice." He went on to say he would make arrangements with the minister to have this done. The 1981 report -- again, we are in 1983 -- was at the printers and there had been problems with floppy discs.

Had we had the opportunity to be favoured with the most current information and statistics dealing with loan and trust corporations, maybe we would have been able to reflect on the almost radical growth in the operations of Seaway Trust, whose assets only a few years ago were something like $1.4 million or $1.5 million. To see the rapid growth might have been a signal to members of the Legislature -- even to someone like the member for Brant-Oxford-Norfolk (Mr. Nixon), who professes not to have an area of expertise in this regard -- that these companies would bear looking at.

Dealing with yesterday's events in the justice committee, the minister's parliamentary assistant -- not some other member who may not have been informed of the disposition or attitude of the government, or its desire to effect some co-operation with members of the opposition parties, but the parliamentary assistant, who I see is not in his place tonight -- moved that since the Morrison inquiry was in progress and various witnesses still had to appear and give evidence under oath, the criminal investigation was still in progress, the ministry was conducting an investigation and there were proceedings before the court and matters to be placed before the courts, with related proceedings before and by the Ontario Securities Commission, and since negotiations relating to the assets of Crown Trust are under active consideration, consideration of the report of the registrar of loan and trust corporations -- even though the report was 1979 -- by this committee would not be in the interests of depositors and the public at this time and, therefore, such consideration should be deferred.

7:10 p.m.

This was the direction that the committee was given by the parliamentary assistant, presumably speaking for the minister in this particular instance, before the justice committee. So the desire was, as had happened before, to put a gag on the operations of the justice committee, as was done after the Astra/Re-Mor matter. I happen to think, unlike some of my colleagues in the opposition and members I have discussed this matter with on the government side, that maybe a full, open, legislative examination of just what is going on procedurally and administratively in that ministry would not be all that bad an idea.

As we had dealt with the Astra/Re-Mor matter in the justice committee previously, with the careful guidance of the member for Oxford (Mr. Treleaven) as our chairman, we need not have trampled on someone's rights. We need not have dealt with matters that were before the court or violated the doctrine of sub judice, but we might have had the minister in and the registrar and his assistants, just to find out what the procedures and the safeguards are. Are the assurances we had in the past sufficient to protect the public interests?

As we saw in the past, the six Conservative members on that committee, supported by speeches by the member for Sarnia (Mr. Brandt) and the member for Durham-York (Mr. Stevenson), endeavoured to do their best to gag this committee in the Legislature. I will not bore you, Mr. Speaker, nor the minister, who has probably been through the brief interim report of the standing committee on administration of justice that was tabled on February 2, 1981, but we pointed out to him before that there were inadequacies in this particular ministry. Receivers have done it before.

I favoured him last Thursday night with some comments by Mr. Barry Brace, the vice-president of Deloitte Haskins and Sells. He said on February 24, 1981, "We are of the view that there is an urgent need to review both the legislative framework and the operating procedures concerning the regulation of these types of financial intermediaries." I think he was referring to loan and trust corporations, and in part maybe to companies licensed under the Mortgage Brokers Act.

Woe that we did not listen to Mr. Brace. Woe that the minister did not listen, or one of his predecessors, possibly his immediate predecessor, who I think is far more responsible for the litany of failures in this particular ministry than the incumbent -- and I say that not because I happen to like the incumbent but because I believe it to be a fact. Woe that we did not listen to the justice committee or Mr. Brace, or the other receiver, Mr. Biddell, who seems to be making a career out of coming in, after he has retired and after the fact, and patching up some of these terrible mistakes that have been made.

As we were told before in this assembly on June 11, 1981, by the minister at the time, the member for London South (Mr. Walker), he has a special computerized list, updated on a daily basis -- he said it, and I am sure he was telling us the truth -- of potential problem people, people who might cause the ministry some difficulty in the administration of their duties or in the administration of trusts. We were expected to be assuaged by that. Members of the Legislature should accept that on face value. Everything was in good hands. We would not have that difficulty again.

This ministry has been warned continually about the incompetence in that one particular aspect of the ministry. Members of the press have written extensively, whether in the Financial Times, the Financial Post, the Globe and Mail, the Report on Business, or in the balance of the press across Ontario. The receivers have put their concerns on record. The courts have done it. Creditors have done it through protests and letters. Members of the opposition have done it.

Now we are told, with almost a shotgun-marriage type of disposition, that if we do not accede to the wishes of the ministry through this bill, immediately, in the imminent future, we as members of the Legislature will be responsible. "It will be on your hands." That is the tone of the debate that is being set right now.

Again, Mr. Biddell said in the confines of the office of the Leader of the Opposition Tuesday afternoon, "I would prefer that this matter had been done last week." The minister certainly had a report on January 7 and another report on January 15 that indicated we should have been seized with this matter, and maybe a little earlier.

We could have dealt with the matter on Monday, I am sure, with the co-operation of all three parties, the kind of co-operation we gave the government in one day to deal with the failure of Co-operative Health Services of Ontario, a company that the member for Scarborough Centre would have us believe was taken over by sharks, and against which the poor people in the ministry were powerless to defend the interests of the people of Ontario and the insureds because all of a sudden this company was taken over by sharks.

To deal with this particular matter we passed legislation in one day to permit the initial involvement of a trustee for these three companies. Now we find ourselves in a sad situation where we are frankly bewildered with more questions than there are answers. For my part, I deeply resent having to read in the Globe and Mail the latest facts on this deal, on the Crown Trust matter. I do not know what to say to people who contact me who are depositors of Seaway or depositors of Greymac. I do not know what to say to someone from my region who calls and asks, "Mr. Cunningham, what do we do with this $1.5-million situation with Greymac?"

We are told that we do not necessarily need to worry about the subject of due process as it relates to this current situation and that we can ignore that old-fashioned concept of the rule of law, which seems, at least today in 1983, to be something we deal with in law schools but tend to forget about here. We can look at any number of sections of the Loan and Trust Corporations Act or the Mortgage Brokers Act and see, at least ex post facto, that a collection of laws has been breached.

When the argument was being made to refer the Astra/Re-Mor matter to a legislative committee so that duly elected members of the Legislature could take a look at and investigate something that really was within our jurisdiction, within our responsibility, we were given these great speeches. I can remember the contribution from the member for St. Andrew-St. Patrick and I recall quite vividly the contribution from the member for Cochrane South (Mr. Pope), who took it upon himself to do a great deal of personal research on the subject of the rights of the individual.

Mr. Boudria: Tell us about it.

Mr. Cunningham: I am glad you asked: I will. On December 4, 1980, on page 4937 of Hansard, he found it necessary to quote from Viscount Cave on the subject of impartiality in the courts. He said in part:

"This rule has been asserted, not only in the case of the courts of justice and other justice tribunals, but in the case of authorities which, though in no sense to be called courts, have to act as judges of the rights of others. From the above rule it necessarily follows that a member of such a body as I have described cannot be both a party and a judge in the same dispute, and that if he has made himself a party, he cannot sit or act as a judge, and if he does so the decision of the whole body will be vitiated."

Mr. Boudria: Who said that?

Mr. Cunningham: Viscount Cave, of course. The member went on to say:

"We have tried to embody these important principles in our justice system: trials shall take place in public, decisions will be based on evidence and judicial notice of that evidence, reasons for decisions will be given, an opportunity to answer charges will he provided throughout the proceedings, and a right to appeal is available.

7:20 p.m.

"We have recognized these important principles in our parliamentary traditions through the ages. Why? Because in 1487, Henry VII, to punish without a jury the misdemeanours of sheriffs' juries, as well as riots and unlawful assemblies, set up a body. It got its name from the council chamber at Westminster where it met. By the end of the 16th century it fell into disrepute, because the individuals were not being provided with information on the charges preferred against them, or given a right to answer those charges fully or to meet their accusers publicly, to meet all the information brought before them and publicly refute it, if they wished.

"Because it met in camera, it lost its credibility. It had to meet in open court. It also lost its credibility because it tried to coerce. In the same way coercion is being exerted by the Speaker's warrant, it tried to coerce individuals of society to appear before it and to make confessions. It tried to coerce confessions and documents out of them. That body was the Star Chamber, which is exactly what this committee was becoming." That was the justice committee at the time.

"We believe the rights of the individual are important. The rights are to have justice, to have a fair trial, to be heard first and foremost in the judicial forum where the public's rights, including the victim's rights, will be determined according to a tried and true procedure, according to the rules.

"We also believe in the right of society to a thorough and complete investigation by the police who have had the experience in these investigations, without hasty disclosure which would prejudice intelligence sources, prejudice information, prejudice the preservation of documents and other physical evidence, prejudice the techniques to be used in investigation and prejudice the specific criminal activities we wish to investigate."

This bill we have before us, Bill 215, may well be in the long-term and even in the short-term interests of the depositors in Crown Trust. I distinguish the depositors from investors. I am able to make that distinction; the Premier sometimes cannot. I think those of us over here can. This bill in the long and short term may be of great value to the people involved. But I think we are ignoring our responsibility to table fully and openly all the information we have that we are able to table.

I resent having to read in the Globe and Mail what the niceties of the arrangement are. I resent that I would have to obtain the most complete information by attending a private meeting at the editorial office of either the Toronto Star or the Globe and Mail, or that I would have to attend a meeting in my leader's office with Mr. Biddell.

Frankly, Mr. Biddell was far more candid with us than anyone else has been on this matter. As a result of that meeting, the members of my party have a great deal of respect for Mr. Biddell. Perhaps we should put it on the record that we in Ontario are fortunate to have someone like Mr. Biddell. I do not think there will be any argument. We are fortunate to have someone who is as well informed and who has the experience of dealing with other fiascos in this ministry such as Astra Trust.

Think of the experience this man brings to this complicated disaster; perhaps he would say the most complicated financial mess in the history of Ontario. Think of the training he received through the winding down of Astra Trust, which I gather has yet to be wound all the way down. Mr. Biddell is a valuable asset and we should be grateful to him for attending at our leader's office.

I have quoted some of the traditions the member for Cochrane South invoked in the name of protecting the rights of Carlo Montemurro, who will be going to trial on a myriad of various charges. I think we are moving too fast on this trial. We are not dealing with it until the fall. Perhaps we can put it off for another couple of years.

Viscount Cave, the Magna Carta, parliamentary tradition, all of this was invoked in the name of one Carlo Montemurro, and I brook no argument after the fact with the member for Cochrane South about Mr. Montemurro's rights. I was mindful of them as a member of the justice committee when we went through the Astra/Re-Mor fiasco.

At the same time, I must say very clearly that while I have my own personal concerns about just what went on in the 99 or 100 days when our friend the other Mr. Rosenberg had his hot little hands on Crown Trust -- not to mention what happened with Greymac and Seaway -- I do not for a moment undermine, demean or minimize Mr. Rosenberg's rights as a citizen of Ontario in the rule of law. The member for Cochrane South is quite correct when he says that this Legislature is supreme, as is Parliament, and possibly I take from his comments, although they were made a number of years ago, the notion that there is therefore to be anticipated from us a higher standard, a standard that would always be mindful of the doctrine expressed in the Magna Carta and the concerns expressed by people like Viscount Cave, albeit centuries ago.

I think members of the Legislature, particularly members of the opposition -- and maybe I should include back-benchers of the Tory party -- have been very generous with the executive council in the extent to which we have tolerated not enough information and suppression of the investigation of some of these matters before the justice committee. We can go through the litany of these things, but they have gone on.

I can almost imagine the people who would answer the phone at Canada Deposit Insurance Corp. I can hear the phone ring, and they would say: "It is somebody from Ontario again. How much is it going to cost us?"

I put on the record my personal admiration for Mr. Biddell. I think I should record, on behalf of my party, my thanks for the CDIC. They are a marvellous bunch of people. In this act, they are taking the Ontario government off the hook. The Ontario government, should this become law, likely will not have to pay much more than a nickel, if that, for this major failure. After all, they were kind enough, albeit on an ex post facto basis, to increase the level of insurance from $20,000 to $60,000, something they probably should have done a long time ago, something that the junior trust companies have been after them for years to do.

They have taken the government off the hook, and who is paying? Of course, depositors in the future will pay; depositors in the past will pay; and they are paying for the continued maladministration, not necessarily a bad act -- the act could be improved significantly, but they are paying for the maladministration that exists within that ministry.

As I sat through the justice committee yesterday, I wondered what we were there for. I will not name the member, but one member just did not get his head out of the Toronto Sun for three hours. I should say that he got past page 3. For the whole morning this individual was seized with the Toronto Sun, and latterly, for the last 20 minutes, with the sports section of the Toronto Globe and Mail. One other unnamed member who did not really make any contribution, verbal or otherwise, was completely immersed in Farm and Country.

Maybe that happens to be their burden, but the people who send us here expect more from us. They do not expect that we are going to routinely use the majority that exists here to cover things up, to see that we do not discharge our responsibilities.

The member for Lincoln (Mr. Andrewes) is not here in his seat, but what would the member for Lincoln say to constituents he would encounter in Beamsville or in Grimsby, who have been involved and maybe creditors in the Astra/Re-Mor matter or in this particular fiasco? What would that member say to them when they asked: "How could this happen? This has happened before. This happened with Astra and Re-Mor. This happened with the failure of C and M. This happened with Prudential, Atlantic Acceptance and British Mortgage and Trust. What is going on over there?" What would the member say?

What would the member for Brantford (Mr. Gillies) say to his council when he is required to answer before them just what is going to go on with this money that is deposited in one of these trust companies?

7:30 p.m.

What is the member who shares the other half of my county, the hardworking member for Wentworth (Mr. Dean), going to say to Mrs. Jones, our regional chairman, when she calls up? What would he say if she says: "Gordon, we have $1.5 million in Greymac. Is there a Greymac bill coming? We see Bill 215 because we get Hansard sent to us and we see the Order Paper and all the bills, but we do not see Bill 217 or 219 dealing with Seaway or Greymac. Are we going to be looked after?"

What do we say to the people we encounter, to our constituents or to the people who write or call to tell us they are in Greymac or Seaway? How do we answer when they ask, "Am I any less a citizen, are my rights any less than theirs?"

What do I say to the man who is 75 years old and lives around the corner from me in the village of Waterdown and who lost $30,000 to Astra Trust? He was assured by his Premier during the course of the last election there would be a quick and expeditious test case of the Astra/Re-Mor matter and that if the government was found to be negligent, it would pay. He is still waiting for that money, as are some 300 other creditors in that instance.

The Clarence Darrows of the world perform before the Ontario Supreme Court and maybe ultimately before the Supreme Court of Canada to test all the traditional legal niceties. And by the time the Astra/Re-Mor matter is finished, probably double what it would have cost to settle with these people will have gone to legal fees.

Occasionally I dialogue with members opposite. I understand that some members of cabinet most certainly have a sense of fair play and had been advocating that this matter be settled, were it possible that it could have been settled, before this current fiasco we are in right now.

Now we find ourselves in the sad situation where maybe the Astra/Re-Mor depositor -- not investor but depositor -- will not obtain any kind of favourable consideration lest we create a precedent; the kind of precedent that a depositor in Greymac or Seaway might use to come back on this ministry in a matter before the court where it would, of course, be held that the government was negligent.

The honourable minister has not been straightforward or candid with us with regard to Greymac and Seaway, with regard to just what happened with those companies. He has not told us how it could be that for at least two years, highly questionable activities were going on. For my part I might be assuaged in some minor degree if I actually knew where the money was -- if someone could stand up tomorrow and say, "It is here."

Perhaps I suffer from the same burden as the member for Brant-Oxford-Norfolk (Mr. Nixon) in that I am not a lawyer and do not understand all the niceties and technicalities associated with the high level of accounting. I have some difficulty understanding how a piece of property could be bought for $700,000 at one hour, registered in the registry office, that a mortgage could then be registered on it for $1 million and that it then could be resold for even more money later in the day.

Some would call that free enterprise; some would call it good fortune. Mr. Rosenberg might call it good luck, but I have some difficulty with that. I have some difficulty with the idea that a person's money is not secured when he goes into a trust company with a sticker on the door saying it is federally insured and protected, knowing that it is regulated very stringently and very carefully by Ontario and, if not in some minor degree, by the federal government. That somehow, after people have put in the proceeds of the sale of their house, their retirements savings, the proceeds from an estate or the interim taxes from Rubber Boot township, they find at a later date that their money is not secured.

I cannot fathom it. I cannot understand how these kinds of things could happen with all sorts of Harvard Business School graduates wandering around in this new era of computerization. It is just beyond my comprehension. I can see it happening once but I cannot see it happening every other year.

I will conclude my remarks by putting on the record a few formal requests. The first is that this minister direct that his parliamentary assistant withdraw his motion that was advanced in the justice committee yesterday and in effect would gag that committee of this Legislature. I would be very happy, indeed, if the minister would direct that the parliamentary assistant, and that the minister, where possible, attend meetings of that committee where we would be seized with the responsibility of bringing in some long overdue and needed reforms in that ministry.

I want to put on the record very clearly, as I did last Thursday night, that the good feeling many of us traditionally have held on this side of the House for that minister is abating day by day. When I made those comments last Thursday night I did not for one-tenth of one second harbour any notion that this minister would do what he did. He had said in good faith he would update us regularly with regard to the technical aspects of this very strange fiasco. I did not believe he would abuse our trust the way he did yesterday in editorial boards and board offices of the Toronto Globe and Mail and the Toronto Star. I find it inconceivable that a member of the Legislature would have to attend such a meeting, were he or she invited.

The Premier had the opportunity to deal with this in the House this afternoon if he had chosen to respond to a question from my leader which was ruled out of order. In view of the abject negligence in this instance, I want to see the depositors for Seaway and Greymac included in this legislation. I think it is inconceivable that we could have legislation respecting Crown Trust that I hope will guarantee and protect every depositor in Crown, while we leave the depositors from Greymac and Seaway out in the cold. I cannot fathom that we could introduce such an item of legislation.

A second item has been referred to very clearly by others in my party but I am going to put it on the record again. In this legislation we have to entertain some amendment that recognizes the rule of law. I care not one tittle about Mr. Rosenberg, whom I have not had the good fortune to meet personally, but each and every one of us here must be mindful of his rights before the law.

I do not see how we, in Ontario, can be party to legislation that removes his rights and privileges, whatever personal view we may have about just what has transpired in the operation and administration of these trust companies. I do not see how we can be party to that kind of thing.

I would like to see, as well, that the preferred shareholders are protected. The honourable member for Scarborough Centre (Mr. Drea) said there were not that many of them so maybe it did not matter, and that there were not that many of the common shareholders so maybe it really did not matter. These people, unfortunately, may be locked into the shares they had. Certainly since the end of November there has not been much of a market for them in view of the events that have gone on. We have a responsibility to try to protect those people to some extent.

Finally, a royal commission is an absolute and total necessity in this matter. We have had commissions on matters that have been far less weighty, such as the subject of violence on television -- an area that was not even in our provincial jurisdiction. If there was ever a subject necessitating a royal commission this is it. We do not need something requiring three or four volumes, as my friend the member for Brant-Oxford-Norfolk would suggest.

I would like to see a report tabled in this House that would deal specifically with the administrative and legislative deficiencies that we, as members of the Legislature, could deal with almost immediately. I would hope if we announce such a commission that such a report might be due in a matter of four, five or six months. I would like to deal with it here so this will never happen again.

I had the strangest sense of déjà vu as I entered the justice committee yesterday -- a feeling that we had played this song before. The cover-up motion, the gag motion, by the parliamentary assistant to the minister was something that had been played before to us. If we had been allowed to discharge our responsibilities as members, if we had been allowed to proceed with that committee, if only to deal with the procedural administrative matters and the legislative deficiencies that we have perceived, we would not be in this mess today. I certainly hope that six months, a year, or a year and a half from now we are not burdened with a similar financial collapse.

7:40 p.m.

The people who elect us -- even the people who do not vote for us -- expect more from us than just the routine passage of a motion in committee that would deny a full and open explanation. They expect more from us than just plodding in here at two o'clock, listening to routine proceedings and then trotting out. Sometimes I think the most important thing that goes on in this place is the soup of the day or the special of the day downstairs in the restaurant.

We have a high level of responsibility and I am afraid that some time from now we will be judged not to have discharged our responsibility.

The minister, for whom I still have some regard, has been considerate in listening to my comments. I only hope he reflects on them, especially as they relate to the dilemma that Greymac and Seaway depositors face. With regard to the necessity for the rule of law, there is the recognition of Mr. Rosenberg's rights. Finally, and most important, an independent royal commission should look into the events, not necessarily to castigate anybody but to find out just where we failed.

Was it the special computerized list of problem people list of the member for London South (Mr. Walker) that let us down? Is it a lack of staff? Has the Ministry of Consumer and Commercial Relations' budget that has been associated with that section of his ministry been cut down? Is his staff inadequate? Does he not have enough staff?

Did his predecessor carve away some of the strength he might have had to provide the regulation and inspection that is necessary? Why does he not come to the Legislature and tell us if that is the situation and if he needs more assistance in that regard? We all would be willing to make sure that we all do whatever we can to make sure it does not happen again.

Mr. Swart: Mr. Speaker, it is natural that as the critic for the New Democratic Party in the field of Consumer and Commercial Relations I would want to make some comments on this bill before us.

I want to say immediately that I am no expert in the field of finance, trust company regulations and so on -- certainly not like my two colleagues, my leader and the member for Riverdale (Mr. Renwick). But I rise without any trepidation on this because we had the Premier telling us this afternoon that what we have before us is a simple bill. I think he went so far as to say it was a simple issue.

I have had some experience in this. I sat through much of the Astra/Re-Mor investigation before closure was brought in on that, so when we come to those factors I do not hesitate to rise and make some comments.

Like many of the other speakers on this side of the House I am somewhat angry this evening. The minister is the kind of person it is rather difficult to get angry with, but with all of us our patience is running thin. There are two things that happened to me recently that caused my anger to rise rather extensively. The first was a call a week ago last Saturday at my constituency office from a person who has a substantial deposit in Seaway Trust. That is not unusual. Seaway Trust was originally based in the Niagara Peninsula.

He was very unhappy. He had called me two years ago to tell me he had money in Re-Mor. Not only is he likely to lose the money in Re-Mor but now with the same government and with something of the same set of circumstances he is going to lose the money he has in Seaway Trust.

The other thing that makes me rather annoyed this evening is what took place in the justice committee yesterday, and that has been mentioned. Perhaps it is not so much that closure was moved before anybody got a chance even to ask any questions, although that did take place. The first motion before anybody could say anything was to enact closure in that committee. Neither was it that the members on the government side in that committee read their papers and generally took no part in the discussion.

What really annoyed me -- and anybody who was there will realize what I am going to say is correct -- was that the member for Durham-York (Mr. Stevenson) accused the opposition parties of being responsible for what happened. He accused us of not doing an adequate investigation in the Ministry of Consumer and Commercial Relations estimates. According to him, had we done that we could have brought it all out at that time and therefore we were the ones who were negligent. My colleagues will agree with that. That rather causes our anger to rise.

I am going to make three or four rather disconnected comments, but they really are directly related to this bill. The first is that this case is the latest in a long history of Ontario government negligence and incompetence in the handling and policing of its financial institutions. I am not saying anything original when I say that. We know what has happened. We could go back to Atlantic Acceptance, but I will not go back to those days. Just recently there have been Argosy, Co-operative Health Services and Astra/Re-Mor, and now, of course, there have been Crown, Greymac and Seaway Trust.

What bothers anybody who is concerned about this is that none of these were normal failures. It was not high interest rates or changing interest rates that caused these financial institutions to go under. It all happened because somebody in a position of authority in those companies was trying to rip somebody off.

Mr. Stokes: Avarice and greed.

Mr. Swart: True. They were trying to rip somebody off in all of those four companies, and the government has almost admitted this now with regard to those other companies. Unfortunately they were successful, and the government has been proved negligent in these cases.

Perhaps I need not remind the minister that we need only mention Re-Mor and the fact that the victims there, on his reports to the press, are going to be compensated. Oh boy, the government would never compensate those people with a majority government this far from an election; never would it compensate them unless there was a tremendous degree of negligence, and that is evident in what has happened now as well.

The second statement I want to make is that confidence in the trust companies has been massively eroded. I am not just talking about the three trust companies in question now. The minister is aware of the opinions and views of the average small investor. Oh, it may be that you can pull these trust companies up by their bootstraps; and it just may be that large investors, or at least one of these companies or even the other trust companies, who have $2 million or $3 million and have their advisers -- the big investors who have done an investigation -- may be willing six months from now to invest in those companies. But the average person on the street will not touch a trust company with his investment with a three-metre pole.

Mr. Boudria: That's like a 10-foot pole.

Mr. Swart: Like a 10-foot pole, yes.

They will not touch it. They will put their money in the banks or someplace where it is secure, perhaps even in a sock, and the trust companies will all really have been hurt.

The next point I want to make is that the welfare of the tenants and the depositors must be dominant in any of the decisions we make, including the bill we have before us. The minister has indicated to us, and so have other members of the government, that they are taking this action to protect the depositors. But what bothers me is that neither the minister nor anyone else in the government has given us any assurance or any argument that this move will protect the tenants. There have been no such arguments made by the government and that bothers me some.

7:50 p.m.

The other general statement I want to make is that there is some $200 million missing. I do not know whether it is that amount -- but roughly there is some $200 million missing. Somebody got it. Unless it was just on paper somebody got that $200 million and someone had to pay it.

I think that is a fair statement. Among those who are going to have to pay it, only a limited number can be collected from. Perhaps it could be recovered from the culprits. That is certainly what I would like to see happen. The person or persons who got that $200 million are the ones we first should try to recover it from. But at a nod, it is going to have to be recovered from the tenants and, of course, that was the intention of Mr. Rosenberg and the group at first. This fictitious increase of $200 million was going to be recovered from the tenants.

Or it is going to have to be recovered from the depositors, or the shareholders or one of the other levels of government? Those are the only places they can get that $200 million.

I want to be a little more specific. The whole mess we are in now is the direct responsibility of this government. Let me review the sequence very briefly. Take the Ontario laws. They did not exist to protect. The Ontario laws protected the flips by Rosenberg and by Player and by Markle and all the gang involved.

There was the change in valuation from $270 million, the first sale, with which Rosenberg was involved. Then it went to Player for $320 million and then over to the so-called numbered companies for $500 million. The laws of Ontario permit that.

Let me read to the minister the statement that was made by Leonard Rosenberg, submitted to all of us I believe and dated Monday, January 17, 1983, page 2:

"First off, the Cadillac Fairview properties were openly and unabashedly being sold off. Everyone knew they were for sale and knew the price. There was no secret, nor was there anything special about the sale, not even its size, until they were purchased by Leonard Rosenberg.

"The number of units involved meant 20,000 voters would be affected by one transaction. Nor was it even a novel transaction. Deals, albeit smaller, similar to it were a common experience in Metro Toronto."

And then this significant paragraph: "Ever since the introduction of rent controls, the only way an owner could escape from the inflationary cost spiral was to sell." One could reword that to say the only way an owner could get more than the intent of the law was to sell.

He says: "A new owner could obtain the rental increases denied to the former owner, scaled to his financing costs. This was the law."

End of quote by Mr. Rosenberg. I would ask the minister, that is correct is it not? That was the law. There was nothing illegal in the specific transaction apart from the trust companies' action -- nothing illegal about those flips from $270 million to $500 million. I am sure the former Minister of Consumer and Commercial Relations, the member for London South (Mr. Walker), would applaud that kind of entrepreneurship. He would think that was great.

I can recall questions in the justice committee concerning this issue of the massive additional rents being paid by tenants because of the change of ownership. I recall the minister saying: "We are not going to interfere with the right of a person to sell his property for what he can get for it." Those were the kinds of answers we got.

Months, or years, ago the government could have prevented this kind of flip by legislation, even by changing the guidelines for rent review. Those guidelines to the commissioners could have simply provided that no mortgage, capital and interest costs should be passed through to tenants that exceeded 85 per cent of the market value of the property.

It would have been very simple; it could never have happened if they had only made those guidelines to the rent review commissioner. But they would not put them in, even though they were harassed by the opposition parties to take some action in this matter.

What the gang did in the sale of the apartments was to get what they thought would be a legal return on their money. Of course it was immoral, it was a scam, but Ontario laws permitted and made legal that immorality, that scam and that ripoff.

But because this was done and because there was going to be massive increases to the tenants, legislation was brought in. The government, to give them the benefit of the doubt, may have just been provoked, but perhaps morally they felt they could not allow a situation where tenants were going to be paying 50, 60, or 70 per cent more. They did the only thing they could. They brought in legislation limiting the pass-through of those fictitious mortgage costs -- mortgage costs at a fictitious level.

It was that action -- in itself good but many months or years too late -- that caused this sale to be unprofitable. It put the trust company in a position of never being able to recover the money it had loaned for this transaction. It was necessary to do that because of the absence of legislation previously. The bill was necessary on December 21 because of the government's previous lack of action and because of its precipitous action of December 2. That was debated and passed some time later.

Another point is one my leader has dwelt on time and time again -- the need to know the beneficial owners in these numbered companies. There should be full disclosure by these companies. There can be a very real difference in the approach to resolving this, depending on whether the purchasers were legitimate new owners or the same old principals perpetrating a scam. It appears more and more as though that is the case. There is probably no Arab money there at all. Probably John Sewell was right when he said at the very first this was an internal flip and there was no Arab money involved.

If we try to unravel this -- and we do not yet know whether it is possible to unravel -- it may be possible to go back to square one, maybe not that far but maybe back to square two. It may be possible to find some of that money and get it back again. But if we do not know the beneficial owners how are we going to do that? How are we even going to know whether it was a scam as far as the present beneficial owners are concerned, and whether that is the route we should take?

A special bill that would recover that money from those who have perpetrated the scam -- we do not know if it is possible at this time but if it was possible -- would certainly be no more traumatic, no more draconian than the legislation the minister has put before us this evening. Perhaps that is the route we should be following but we do not know who the beneficial owners are yet.

It is inconceivable that a government would be going to the extent of selling off this company before it knows who the beneficial owners are and before it knows whether it can recover a substantial part of that $200 million from those beneficial owners. We need to know what chance of recovery there is before we pass this bill. We cannot and should not pass this bill until we know who the beneficial owers are and what type of scam has been perpetrated on the depositors, the tenants and the government of this province.

8 p.m.

Because of our lack of knowledge we have to ask whether the reason for this bill is wholly disconnected from the involvement of top Tories in the flip and the third mortgages and thus the viability of the trust companies, particularly Crown Trust. We must ask about the involvement of top Tories in the steps taken since January 4 in saying they are resolving the problem. We have to know that.

There have been a lot of top-flight Tory players in this. Let me just mention them. There is Leonard Rosenberg, who may not be such a well-known Tory but I understand he is a supporter of the Conservative Party. There is David Cowper, who was designated by Rosenberg to be president of Crown Trust. He was a director of Argosy, that other financial institution that folded and took something like $25 million of the people's money down with them. David Cowper is a former campaign chairman for the present Attorney General.

Then there is John Clement, a director of Greymac and a director of Crown Trust since September 1982. It is pretty significant that he joined them when this whole scam started. He acted for Astra Trust, getting provincial registration about three years ago. He got $15,000 for his efforts. This was all brought out in the standing administration of justice committee. The committee indicated in its report that it believed undue influence was used to get that registration.

If we look at Astra Trust and Re-Mor Investment Management Corp., again $25 million went down the drain. John Clement is a former Attorney General in the Conservative government of this province. He is also a former Minister of Consumer and Commercial Relations. He sure knew what was going on in those ministries and how to move around there.

Then there is Stanley Randall, who is a director of Crown Trust. This is all public knowledge; it is all in the paper. Of course, he is a former cabinet minister of this Conservative government.

Then the law firm of Goodman and Goodman was involved in all this; and we have all heard of Eddie Goodman. It acted for Cadillac Fairview at the time of the flip.

We have had involvement from prominent Tories since January 7: Mr. W. A. Macdonald of McMillan Binch, a prestigious Bay Street law firm, is a director of Victoria and Grey Trust. According to the newspapers, he has been an adviser to the minister and is a well-known Conservative.

Then we have Hal Jackman, controlling shareholder of Victoria and Grey Trust. He is a former Conservative candidate, so I am told.

There are a lot of top Conservative players in this. There are others but --

An hon. member: Macdonald is a Liberal.

Mr. Swart: Is Macdonald a Liberal?

An hon. member: Same thing.

Mr. Swart: They move back and forth pretty easily.

Mr. McClellan: Federal Liberals, provincial Conservatives; provincial Conservatives, federal Liberals -- what's the difference?

Mr. Swart: In any event, there were a great many players in this prior to the three bills being passed. Since then many of the players have been top Conservatives. So the question we have to ask is whether a crash sale, as proposed in Bill 215, the right alternative? And if it is the right alternative, we ask: for whom is it the right alternative?

It is not really the only alternative we have before us to resolve this matter. This bill and winding up are not the only two alternatives, as the minister would have us believe. The government could guarantee all the deposits in the three trust companies or just in this one. It could guarantee all those deposits. That would make Crown Trust viable again. That probably would not involve any more in the way of public funds than CDIC is going to have to invest. There may be enough negligence proved, when we get at it, so that this is exactly what it should be doing instead of taking it out of CDIC, which is still coming out of the public pocket.

It could bring this trust company under public ownership. It could operate as a crown company, temporarily or long-term, until it got back on its feet and trust was built up. It could tie it to the provincial bank we have.

Mr. Breaugh: Call it "Crown Trust."

Mr. Swart: That would not be bad; it would fit in nicely. We could have the Provincial Crown Trust Bank, and we could operate it all as one unit.

There are alternatives, and not just the two alternatives the government proposes.

In determining what we are going to do about this bill, we have to take into consideration the tenants and the depositors. We also wonder about the top Tories involved in this matter, the two former cabinet ministers, one an Attorney General. Is this bill, in the government's opinion, the best way to service them, to prevent embarrassment and bail them out? Are those the reasons, part of the reasons, all of the reasons or none of the reasons? We have to consider that.

Mr. Kerr: The head office ought to be in Welland.

Mr. Breaugh: Is the head office going to be in Welland? It's a bribe. Turn it down.

Mr. Swart: When it is a bribe, turn it down. I have had some opportunity to do that over the years.

Why is there a bill that gives priority to Crown Trust over Greymac and Seaway? We hear nothing about Seaway in particular. There are depositors there too who are really in jeopardy. Why are we only dealing with Crown Trust? I have heard the reasons, but they are not very convincing.

Are we dealing with Crown Trust first because there have been more Tory players in that financial institution than in the other two? There have been more Tory players; is that why we are dealing with it first? I suggest that is something we have to give consideration to.

There is a second legitimate dimension of questions regarding this bill to sell Crown Trust. A leading bidder for the purchase is Victoria and Grey Trust. In all of this matter, Mr. W. Macdonald, a shareholder in Victoria and Grey Trust, has been an adviser to the minister. Mr. Hal Jackman, whom I mentioned previously, controlling shareholder of Victoria and Grey, is a top Conservative. With this situation, there are some questions that should rightly be asked. I have already asked one: Why is there this priority of Crown Trust over Seaway and Greymac?

There is another question worthy of thinking about. I was surprised to read in this morning's paper that they are dividing the assets of Crown into secure and bum assets, if we can use those words. They are parcelling the assets. Has it something to do with the legitimacy of the interests of the depositors, or is there a second possible reason? Was it on the advice of Mr. Macdonald, the close adviser to the minister, that this was done so it might be a more valuable asset to sell if the poorer assets, those mortgages, were left with Rosenberg? It is not unreasonable to think in that manner.

8:10 p.m.

The minister may say that I am trying to suggest political patronage may have some bearing in the bill that we have before us. If he thinks that, he is right. I am not saying there is, but I am saying it is a real possibility and we ought to have the answer to that question before we vote on this bill here, and we should have the opportunity to have those people appear before a committee.

I just want to say something else before I conclude. I was raised in the municipal field, and that is where I got my political experience over some 21 years. In the municipal field, if a bid comes in to perform any service and there is the slightest connection between that bidder having some inside knowledge, such as having advised the council or any connection, they always throw out that bid.

Mr. Kerr: They declare a conflict of interest.

Mr. Swart: They do not declare a conflict of interest unless somebody on council has a conflict of interest. The member for Burlington (Mr. Kerr) should know that if he sat on municipal council. When it comes to bids, it has to be clean and it has to be seen to be clean.

Now we come to the bids on Crown Trust Co., and it appears that the one who has the inside track and probably will win, and probably be able to buy it, is one of its directors who has been advising the minister, a majority shareholder, a candidate for the Conservative Party. I suspect this will be the attitude the public will have on this whole matter too, and I suggest that the government is going to pay a price for this kind of operation.

In conclusion, let me just say that the action of December 2 was necessary. There was no reasonable alternative after what had taken place, and there was nothing done by the government to prevent its taking place. The action of December 21 was necessary. There was no reasonable alternative to giving that power to the government to take over trust companies and manage them. The action of January 4 was necessary. There was no reasonable alternative. These three actions became necessary because the government had not taken action back then to protect the tenants as it should have, and all of this follows from that.

But Bill 215 is not necessary, and what is so significant is that it is a final act on Crown Trust. We must not take that final step until we know the answers to the questions that have been raised by the opposition here tonight -- the questions that would have been put yesterday if they had had the opportunity in the justice committee -- and until this bill goes out to a committee and we get those answers. If we do not get those answers, then Bill 215 must be defeated.

Hon. Mr. Walker: Mr. Speaker, in respect to Bill 215, which is before us, An Act respecting Crown Trust Company, in principle, I think everybody in this chamber believes that government interference in this kind of business -- in business, period -- is something that should not be done. Basically it is government policy that we should not get involved in the day-to-day operations of business or in any kind of assumption of responsibilities for business. We have got some --

Mr. T. P. Reid: There would not be this interference if the government had done its job.

Hon. Mr. Walker: I am sorry; that is not the case, and I want the honourable member to be careful what he says.

With some 250,000 small businesses and some 15,000 industries in this province, I think it is fair to say that there are commercial transactions on a daily basis that fall into the category of being totally up and above board. Regrettably, every now and again there comes along a situation that requires unprecedented behaviour, and this of course applies in this particular case. I think no one would like to be in the position of having to move in, but it is one of those regrettable situations where we have had to.

This is one that is the exception because of the gravity and the nature of the problem, as set out by my colleague the Minister of Consumer and Commercial Relations in his reports of January 17, 18, 24 and 25. I do not want to repeat the reasons given, except to say that the operation of Crown Trust Co. was such that in the opinion of the Woods Gordon report, it could no longer function as a trust company without a massive infusion of capital.

As the Premier said this afternoon, this bill was designed and presented to protect the depositors of Crown Trust basically in co-operation with the Canada Deposit Insurance Corp. We have to accept that. I think it is a judgement call that has been made on the basis of the best advice that has been provided.

Frankly, I think all will agree that there is no alternative to the act. We have acted on the advice of the best advisers we could find in the process and, from what I have seen in the information that has been presented to us, I think it is proper to have taken the advice.

I want to join with my colleagues who are former Ministers of Consumer and Commercial Relations, and who presented their own perspective of what has transpired, to indicate that although my own tenure was brief, I gained a great deal of respect for this province's financial institutions, whether they be the loan and trust companies, insurance companies, credit unions or mortgage brokerage companies.

I think we can be satisfied that 99 per cent of the people who run those particular organizations today, and who ran them in the past, basically perform their responsibilities in a respectful and proper way. I have a great deal of respect for the individuals who are responsible within the ministry, many of whom I came to know in the brief time I was there. I have a great deal of respect for the officials in the ministry and its many regulatory bodies which act as the watchdogs and overseers.

I think the financial institutions are being run by a very competent group of people. We have to say they follow the golden rule that was espoused in the days of the Atlantic Acceptance Corp. It is not the role of the regulators to interfere in the operations of financial institutions unless, and I stress "unless," they are not being run in the best interests of their depositors, shareholders and investors. The principle of trust, as was stated then, of holding and using funds entrusted to these companies and institutions, is a principle whose breaching, if it occurs, must be penalized immediately and expeditiously. It goes without saying that all these penalties must be such that they act not only as a punishment but also as a deterrent.

It is absolutely essential, of course, that there be good, honest and prudent people running our organizations and good, honest and prudent people who are running the ministries or who are the watchdogs for them. I am satisfied from my observations that that applies.

Every now and then a problem does come along. We had some difficulties in the period of time that I was minister of Consumer and Commercial Relations. However, we took a number of important steps relating to financial institutions. I just want to mention one or two of them.

We increased the co-ordination between the financial institutions division and the business practices division, between the Ontario Securities Commission and the various policing activities. Bringing them together was a very important aspect.

The joint investigation capacity that existed between those groups was extremely important. An intense relationship was developed with the police in those days, and that has remained the case since the implementation of this process. Indeed, monthly meetings for regular exchanges of knowledge have been the order of the day. There has been much closer scrutiny of applicants for things such as real estate and mortgage brokers' licences as well as other kinds of licences that may be available.

8:20 p.m.

My friend opposite has made reference to the computerization that occurred. That process is now practically in place. It was going to be a lengthy process to get all the information into form, but that is coming on and the registration system is coming into being.

We began a review of the legislative changes to the Mortgage Brokers Act and, in fact, amendments were introduced in respect of the Loan and Trust Corporations Act itself. Actually on February 10, 1982, which was more or less the last official act I had to do within the ministry, as I moved a day or two later, I sent out more than 200 copies of the Loan and Trust Corporations Act that introduced a number of amendments that would relate to the business, consumer and other interested groups that were involved. In it we explained that it was important to get a lot of public input, and important ultimately to determine a loan and trust act that would suit all the needs.

By and large, the act has served reasonably well over the years. Amendments have been put in to correct some of the difficulties that occurred, and of course there was the Loan and Trust Corporations Amendment Act of 1981. That act basically reflected some of the needs and changes that were warranted at that time.

But with respect to the specific bill that is before us today, Bill 215 respecting Crown Trust, the government is really acting in the best interests of the depositors, the investors and the shareholders of Crown Trust, and of course that is the key and essential role that government has to take.

As my colleague the Minister of Consumer and Commercial Relations said on January 24, when he stood before this assembly, "We believe the proposed arrangements provide the only effective procedure to deal with the assets of Crown Trust in a way that will protect the public depositors and maximize the chances of recovery for other clients, creditors and shareholders of the company."

Accordingly, to suggest that there has been anything short of the public's interest at heart is truly a wrong tack for opposition members to have taken, and I very much regret that the Leader of the Opposition has attempted here, fortunately without success, to arouse fears about the province's financial institutions. It is very unfortunate indeed that the attempt was even made, but it is fortunate that it did not happen.

The Leader of the Opposition may be surprised that the public has not overreacted to the situation. The public knows that we are acting in its best interests in the process. In fact, the government is carrying out the process for which it has the authority and the responsibility. The government is not doing anything in this process by means of this piece of legislation, Bill 215, that the registrar does not have the legal authority now to do.

It is a most important piece of legislation. It is unprecedented as legislation, and I hope we do not see this kind of legislation again but I hope this kind of unprecedented legislation does not cause other investors, other people who do commercial transactions in this province, other businesses in this province, to have any fear about the actual day-to-day operation of this province. The fact is that it is an unusual time when an event like this occurs, and we have to say that we hope this kind of unprecedented action will not be seen again.

This legislation deserves the support of the members in this chamber. It is important that the members in this chamber support this piece of legislation. I think sufficient evidence has been presented to us to warrant the kind of action that has been taken. It has been taken in the interests of the shareholders, in the interests of the depositors and in the interests of the investors of Crown Trust, and it deserves the support of all the members of this House.

Mr. T. P. Reid: Mr. Speaker, I suppose that was probably the political obituary of the minister who just spoke. We realize he was dragooned in here to make some comments, and he did it with the enthusiasm he usually shows for free enterprise.

Mr. Nixon: And lost causes.

Mr. T. P. Reid: And lost causes. It was the same minister who stood in his place in 1981, in his emanation as Minister of Consumer and Commercial Relations, and assured this House, "It can't happen again." He is probably more responsible than the current minister for the fiasco today.

Hon. Mr. Walker: Tell me what did happen.

Mr. T. P. Reid: The philosophy he espoused at the beginning was that if he had his way, we would not be doing anything because that is interference with free enterprise.

Hon. Mr. Walker: Mr. Speaker, on a point of privilege: The member who has just spoken has indicated wrongly that I stood in my place and said it cannot happen. The "it" suggests he is referring to this particular event. I would like to know how he would presume to think that of me and how he would presume to think I was referring to this kind of event. I would challenge him to identify what he is referring to.

Mr. T. P. Reid: Mr. Speaker, it is nice to be asked a question for a change instead of asking them, but obviously what I was referring to was the minister's comments in terms of Astra and Re-Mor and his little red-dickied files and all that sort of thing. I am sure they were probably blue-dickied but, speaking of blue-dickied, I understand the minister is going to be blue-dickied right out of the portfolio he is in shortly as well.

If the minister wants, he can refer to Hansard on page 1499, Thursday, June 11, 1981, where he says, "We have something called a supplementary information list, which is a special computerized list of people who might be considered problem people." I presume the minister meant the Minister of Community and Social Services (Mr. Drea), the Minister of Natural Resources (Mr. Pope), the Minister of Education (Miss Stephenson) and Bill 127, and a host of others. "We have a much more extensive investigation process today. We feel that we have done an awful lot of things and, frankly, many of the things the member is suggesting are just not needed."

This was in response to my perspicacious friend the member for Ottawa East (Mr. Roy). This was June 11, 1981, about a year and a half ago, and that was the member who just spoke.

Hon. Mr. Walker: Is that the evidence you are offering?

Mr. Roy: That is good enough.

Mr. T. P. Reid: I will not bore the people in the galleries by reading everything the minister said, because it was as fatuous then as his remarks were tonight.

It is interesting that every once in a while an issue comes before this Legislature that really deals with the root of the democratic system and why we are here. We have been put in the position of being blackmailed by no less a person than the Premier himself, who does the sanctimony bit and can play Pontius Pilate on any day of the week and win an academy award, followed closely by the present Minister of Consumer and Commercial Relations.

Our job in the opposition is to safeguard the individual and the community against the abuses, the arrogance and, I might say in relation to those people opposite, the habit of power. It frightens me that a man for whom we have all had the highest regard in this chamber, a man who professed as early as this afternoon during question period to be concerned about the traditions of this House and the democratic system, should have so treated and abused this Legislature in the way he has in the past month.

If nothing else, this whole process has underlined the role and importance of the opposition in the democratic system. It is unfortunate that those people do not understand that, including a man who I thought was one of the more principled, more intelligent, more understanding and more sensitive on the Tory benches over there, partly because he was relatively new. His action in bringing in this bill, what is in it and the way it is phrased speak louder than all his protestations about being frank and honest with us. I will deal with those matters a little later.

I asked the Attorney General (Mr. McMurtry) in the House today during question period whether he was not concerned that Bill 215 offended the Canadian Constitution and various sections thereof. I was surprised, and I have the Instant Hansard here, that while the Attorney General, to give him his due, said the Minister of Consumer and Commercial Relations, who now does not have the trust of many of us over here, has said that he will ensure and safeguard the rights of the individuals involved and their rights and privileges under law will be protected even if he has to bring in another act to do so, that is not what one of the ancillary principles of Bill 215 says.

8:30 p.m.

My colleague the member for Kitchener has given one of the best speeches I have heard in 15 years in the House in terms of the rule of law, the democratic system and the due process of law. I will not repeat all of that, I cannot do it as well, but I do say that sections 9, 10 and 11 of this act offend the new Constitution of Canada.

Specifically, in our new Constitution Act of 1982, the preamble, part I, states: "Whereas Canada is founded upon principles that recognize the supremacy of God and the rule of law." That is the preamble.

The first part is a guarantee of rights and freedoms: "1. The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out and is subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society."

What concerns me is what we are doing to people, because the ancillary fact of this bill is that the people involved have been judged, found guilty and stripped of the due process of law, which to my nonlegal mind means they are not getting their day in court.

I am offended by the last speaker from the New Democratic Party who smeared a number of people and convicted them in this Legislature merely by association. I think I speak for all my colleagues in dissociating ourselves from that kind of approach.

Mr. Cassidy: Where do you stand on Leonard Rosenberg?

Mr. T. P. Reid: I think he is as entitled as anybody else to his day in court, regardless. That is the whole point and one of the fundamental objections we have to this bill. We do not feel those rights are being protected.

I was talking with someone outside the chamber today and we were discussing the Conservative government's years in power. I was recollecting the police bill of 1966. The then Attorney General brought in a bill that would have given police the authority to hold people without counsel. Talk about the Star Chamber my colleague referred to, which the member for Cochrane South (Mr. Pope) is so concerned about except when it impinges on the operation of his ministry; the uproar of the people in terms of civil liberties not only forced the rescinding of that bill and its not going forward in the House but caused the resignation of Mr. Cass as Attorney General.

I am reminded again of a year ago this December when the Attorney General, that great believer, supporter and defender of civil liberties, brought a bill into this Legislature giving police unprecedented authority to stop and search without due process and without cause. That is the great defender of civil liberties in Ontario.

We have his answer on the record today concerning due process of law in Ontario and the Constitution of Canada. He said we must prioritize these matters, that the rights of the depositors come before the rule of law. A very passing strange thing for the Attorney General of Ontario to say. In fact, it is not strange, it is scary, because we are dealing with these very fundamental matters.

Section 10 of the new Constitution of Canada says, "Everyone has the right on arrest or detention: (a) to be informed promptly of the reasons therefor; (b) to retain and instruct counsel without delay and to be informed of that right; and (c) to have the validity of the detention determined by way of habeas corpus and to be released if the detention is not lawful."

Section 11 says: "Any person charged with an offence has the right: (a) to be informed without unreasonable delay of the specific offence; (b) to be tried within a reasonable time; (d) to be presumed innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal."

I suggest that in its speeches and actions the government has offended not only the letter of our Constitution but also the spirit of those very laws in their operation. It should be stated very clearly in this bill; as my colleague the member for Kitchener said, all the rights and privileges under the Constitution of Canada and in our common law should in fact be in this bill, and instead of protecting the minister and the government and its agents, we should be ensuring the rights and protections of the individual.

This is an abuse and an arrogance of power that I have not seen. I suppose it goes back again to the Premier's statement that this is the reality of March 19, 1981, and it speaks to the fact of a government much too long in power and too used to the habits and abuse of power.

Mr. Riddell: In agricultural terms we call it dry rot.

Mr. T. P. Reid: That is interesting. If we go through the litany and the numbers of people who have held that position, crowned -- if that is the right word and I may use it, pun intended -- by the present incumbent, this dry rot has led to the situation we have before us today.

Robert Ludlum, who writes rather intricate and Byzantine adventure and mystery novels, in his wildest imagination could not have come up with a plot such as we have here and with what is involved. As I travel back and forth to my riding, I will often read something like this on the airplane to pass the time when I am not immersed in weightier documents, but I do not think even Mr. Ludlum could have imagined such a tortuous plot as we have been presented with as the minister provides us with dribs and drabs over the last two months.

I also wonder who is working harder these days to turn out a book on all of this, Pierre Berton or Peter Newman. Perhaps it would be interesting if they did. We could get to the conclusion a lot more quickly.

We are here and the government is asking us, and even trying to blackmail us into supporting this bill. The question we have to ask ourselves, obviously, is whether we have enough information to make a valid judgement on whether or not this bill should be passed.

I sat in on the meeting with Mr. Biddell, as most of my colleagues did. He did not tell us anything the minister could not have stood in his place and told us and the public at large. There was not a thing he told us that would have offended the minister, would have offended the public, was libellous or anything else.

But it is a strange kind of game that is being played over there, because when Mr. Biddell walked in, the Leader of the Opposition (Mr. Peterson) said, "We want you to know that anything you say here is on the record and we will be repeating it to anybody who asks," and Mr. Biddell said, "Fine." Why didn't the minister, in his constitutional and legislative responsibility, stand in his place in the Legislature and tell all of us that? He is responsible, and he abdicated that responsibility and played games with the Legislature and with the people of the province who had a right to that information. That is one.

Number two is even worse than that. I would have thought the minister's own back-benchers would all have been here to really find out what was going on; because he pulled another Suncor on them. They must have hard heads. They keep getting sandbagged with information in the Globe and Mail that they were not apprised of by the cabinet.

We should have heard the member for St. George (Ms. Fish) on the radio this morning on CBC. She sounded like a fish out of water, because she did not know either.

8:40 p.m.

Mr. Riddell: What does the member for Prince Edward-Lennox (Mr. J. A. Taylor) think of this?

Mr. T. P. Reid: What happened as most of us woke this morning was to see in the Globe and Mail that the minister and Mr. Macdonald and Mr. Biddell had been around to visit the editorial writers of the papers in Toronto to explain -- as the minister said in question period -- because they did not quite seem to understand what was going on and he wanted to assure them and explain what the actual facts were.

I want to say three things about that. Regardless of the Premier's explanation that this goes on all the time, it does not go on all the time. People go and see editorial writers to talk about general policy; they do not go and talk about a specific subject. That smacks and reeks of media manipulation and George Orwell's 1984 come to life a year earlier. I did not think this minister would be a party to that kind of operation. I say frankly, sir, it stinks. I cannot think of another word.

To every bad story there is a good part. We are fortunate the editorial writers of those papers saw fit to ignore that kind of blatant political manipulation and, in fact, stated the facts as they knew them or as little as they knew about this situation.

I tell the minister again, his reputation has been sullied by this and I doubt whether he will recover for a long time. As politicians, there is only one thing we all have that we sell to the public and everybody else and that is trust and the credibility that goes with it. His shenanigans in doing that, and his operation and those kind of words he used in this Legislature in trying to shift the onus and responsibility on to us, that kind of blackmail that was forecast by some of these same editorial writers, will haunt him for a long time. He is not worthy of that and I am ashamed for him.

There are a number of questions we have not had answered. My colleagues have already referred to Greymac and Seaway. What is going to happen there, what about those people? But there is a more fundamental question we have to ask about Crown, one that we put to Mr. Biddell and that he did not exactly refuse to answer, but he said he did not know.

Concerning the whole argument for this bill, setting aside the due process of law, let us deal with the depositor and shareholder rights. The whole principle of this bill is to allow the government to sell Crown Trust or part of same as a going concern.

The question we have to ask ourselves is, how much money has been withdrawn from Crown Trust? How much money is coming due in GICs and other short-term interest? How many of the fiduciary contracts in terms of pension plans, estates and so on, have been withdrawn from Crown Trust? In other words, what is the value of that company?

Mr. Biddell would not tell us. The minister has not and obviously will not tell us. We can presume, and only presume, that those who are interested and have bid on Crown Trust, or what is going to be there, were aware of this. We can assume the editorial writers of the Globe and Mail and the Toronto Star are now aware of this. But we do not know. We do not know what is going on. We do not know what the value of those assets is and we do not know what the value of the soft assets is.

It is passing strange that we are being asked to put our names to a bill and take responsibility for it when we do not know what it is all about, but those companies out there -- those four or five that bid; and one, members will recall, had to ask to be allowed to bid because it was ignored in the whole process -- apparently know all about it. I am not prepared to make those kind of decisions or to give this government that kind of power without that kind of information. There is something in our standing orders, as we all know, about a compendium of information relating to these matters that, of course, we have not seen.

I asked Mr. Biddell, as a hypothetical question that is not all that hypothetical: what if Bill Player showed up with a satchel full of money or a cashier's cheque for $125 million? The way this thing has gone it is not inconceivable that would happen. Would it not be very interesting if that happened? There might be a few redder faces over there.

My friend referred to Mr. Biddell. Mr. Biddell's job was to come in and try to find out as best he could what was happening, come up with a solution, sell whatever was to be sold; but basically the bottom line to all of this was, "For God's sake, let us get it off the front page of every newspaper in Canada because people are starting to question whether we are the great and good managers that we have said we are for 40 years." That is the bottom line of what Mr. Biddell is there for. He was to come up with a solution.

He has come up with a solution. In the time and space given him, he has come up with a marvellous way of getting the province off the front pages and stemming those questions that are rising in people's minds about the competence of this Tory administration after 40 years. That is Mr. Biddell's job. He is paid for it. He apparently is good at it. If the minister had his way, this would all be cleared up and we would be back to talking about sewer and water, waste management or some of that other good stuff.

Mr. Riddell: Or Bill 127.

Mr. T. P. Reid: Or Bill 127 that all these good folks are waiting to hear about. It is interesting to see a 40-year dynasty crumble before one's very eyes.

We have the Minister of Education (Miss Stephenson) and Bill 127, we have the Minister of Natural Resources (Mr. Pope) and the secret arrangements in which he is dealing pieces of northern Ontario and southern Ontario away here and there. Then we have the Minister of Consumer and Commercial Relations; then we have the Minister of Community and Social Services (Mr. Drea), who is always continuing in daily embarrassment; then we have the Minister of Industry and Trade (Mr. Walker), who is not long to be the Minister of Industry and Trade. It is all happening at once. I guess it is sort of collective old age and the habits of being in power too long.

Mr. Epp: Tell us about George Ashe and the assessment.

Mr. T. P. Reid: The Minister of Revenue (Mr. Ashe) is not important enough for anybody to worry about.

The minister's argument all hinges on the fact of the flips -- the ultimate price paid for Cadillac Fairview. It was this party that raised it, to the credit of my leader. He kept at it. He was tenacious. He was responsible. If it had not been for him, it would have been a worse mess than it is now.

Mr. Breaugh: Yeah, he did a hell of a job.

Mr. T. P. Reid: Our friends to the left are unusually quiet during all of this debate. It is really unfortunate for them that they are so irrelevant in today's economy to any of the economic questions. They have not recovered from that yet. They are trying to get their foot in the door.

Can members imagine that the best the leader of the New Democratic Party could say on Bill 215, which goes to the heart of the democratic system and what we are all about in this chamber, was: "You had that secret meeting and only Peter Mosher could go and hear about it. I do not like that and I may take my ball and go back to Ottawa." I really felt sorry for him. That was the best he could do.

8:50 p.m.

Mr. Riddell: The reason he would not meet with Biddell was because they lacked so much knowledge about this subject they would be embarrassed to ask him questions. That is the reason they did not meet with him.

Mr. T. P. Reid: He kept asking me, "Would you write out some questions for me?"

The Deputy Speaker: Anyway --

Mr. T. P. Reid: Mr. Speaker, there are more fundamental issues than just the money involved. I have talked about them already. I have talked about due process, the Constitution, the protection of individual rights and liberties. I also want to touch briefly on something my colleague the member for Wentworth North (Mr. Cunningham) talked about.

It was interesting that after the realities of March 19, the committee of the Legislature that was investigating Astra/Re-Mor was dissolved by the Premier. There would be no more. Those promises made during the election by the Premier have come, as have all of the promises of that election, to nought.

As I sat in the justice committee yesterday morning as an observer, it was interesting to hear the parliamentary assistant to the Minister of Consumer and Commercial Relations move a motion to stonewall and block debate on the reports of his ministry in this regard. One of the tenets of democracy is free and open debate, free and open information. We have been promised, since 1976, a freedom of information act in Ontario; but we will not go into that.

Obviously, the minister gave direct orders to the parliamentary secretary to go in and move a motion to block any inquiry by way of these reports. That is one of his commitments to democracy. To come in and try to blackmail the combined opposition on this bill is another. To not provide information to this Legislature is another. To go down and try to harangue and influence editorial writers is another of his commitments to democracy. It is pretty feeble and frightening -- I am wondering if the minister is listening.

Interjection.

Mr. T. P. Reid: It is frightening that the minister would act in the way he does while at the same time he espouses being frank, honest and forward.

I said to him, as he was reading his statement this afternoon and talking about being frank and honest and defending liberty and all the rest of it, that every dictator in history has used exactly those same words just before the jackboot, the whip and the guns have come out.

Mr. Breaugh: The War Measures Act, Trudeau, all that crap.

Mr. T. P. Reid: The same thing. I do not disagree with that.

Interjection.

Mr. T. P. Reid: I do not support that no matter what political party does it, and as a Liberal-Labour member I was not a party to that either.

As I said at the outset, Bill 215 goes much further and deals with much more than just protecting the depositors in Crown Trust. It speaks to the whole democratic system and style of government that we see spreading out before us in the way it treats those fundamental aspects of the democratic system and the rule of law in Ontario.

I am not only glad to stand here and oppose this bill, I am proud to do it on behalf of the citizens of the province, because we cannot put up with this kind of arrogant abuse of the legislative function in Ontario.

Mr. Renwick: Mr. Speaker, I do not intend to keep the House long with my comments on this bill. I would first like to express my appreciation to the legislative counsel, who is sitting under the gallery this evening, for the format of the bill. In the long run I think this format is an ideal one.

The type is much improved, the frontispiece of the bill is improved and I want to express my congratulations to the legislative counsel's office for redesigning the bills and, in particular, for finally advising us that the bills are printed by the authority of the Legislative Assembly of Ontario rather than by the authority of the Queen's Printer. It will go down in history as a rather poor bill. It is unfortunate it was this bill that had to be introduced for the first time in that form.

My remarks really have nothing to do with the intricacies of corporate law, the intricacies of real estate transactions or the fundamental kinds of basic questions we are going to have to ask when the bill goes to committee, but I wanted to touch upon some of the concerns I have with the bill.

I listened to the Attorney General respond with respect to the Charter of Rights and how the bill in his view is constitutional in all its aspects. It is quite interesting that the Attorney General and all of those in the government of Ontario who had anything to do with the revision of the Constitution of the country took the position that the Charter of Rights changed nothing. They do not have any difficulty in saying the bills are constitutional because they do not believe the Charter of Rights affected anything in Ontario of any significance.

I recognize the real problems the Charter of Rights presents for anyone who is trying to assert the general sensation that the overwhelming power of this assembly within its legislative jurisdiction is total and complete and the only limitation that exists is the Charter of Rights. It is unfortunate the one section of the Charter of Rights which could well have given the government some cause for concern will not be in effect for another two years or so. That is the equal protection of the law, "Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination."

That section of the charter does not come into effect until April 1985, so we will look with interest when and if any case comes to the court about the constitutional implications of this bill, because this government in haste is doing something which in my judgement it will regret in due course.

Apart from the problems we have had about information, and I do not intend to produce a resumé of what the minister has or has not answered in the House, let me speak about the format of what the government has decided to do, about what this party is in agreement with and about the point at which we separate from the government in its resolution of this immense problem.

There is some confusion being perpetrated, one way or another, that Bill 212 which we passed on December 21 was just one step in this process. We had no problems with Bill 212. It was clear that those were necessary amendments to an ancient statute that should have been included a long time before. There were clauses that were introduced to amend the Loan and Trust Corporations Act in two particulars, which were applicable to all of the trust companies and all of the loan corporations in the province. They were very necessary.

While we are pleased that the minister is pleased that we went along with them, we do not need him to tell us whether we are responsible or not. We do not need to be patted on the back by him. As my former colleague the member from Woodbine used to say, "I did not come to this assembly to get the approval of the Tory members."

9 p.m.

We accepted the basic confidentiality: until the bill was introduced on December 21 we were prepared to respect the need for secrecy with respect to the intentions of the government; that is all we agreed to. The government knows that, the Premier knows that and the minister knows that.

This bill is quite fundamentally different. This bill is directed at a single company and it is directed at a rearrangement of all the interests of the people who have an interest in that company. The minister knows as well as I do that if he not only had attempted to introduce last December a general provision for the registrar to take possession of the assets of any loan or trust company in the exercise of his discretion -- with which we agreed -- but also had attempted to say the registrar would also have a general power of sale of the assets of any loan or trust corporation in Ontario, he knows very well this assembly would not have accepted that bill and he knows members of his own party would not have accepted it.

It is quite unreal for him to talk about what he did in December as though it were a forerunner of what he is doing in January. It may be the provisions of this bill are ones that fit into the framework the minister wants us to accept, that it is a black-and-white situation. Either we accept the bill and allow the government to do in secret what it plans to do -- and I always have difficulty when the government House leader (Mr. Wells) stands between myself and the minister, talking to the person in the back row behind the minister. I would rather have the government House leader go out with the other two government House leaders and mis-arrange the business of the House than have him here.

I want to leave the point there. Bill 212 is quite different and distinct from Bill 215. The power the government is asking for in this bill is a power that should not be granted for the reason that the government has tried to tell us there are only two alternatives. Either we accept the bill or we deprive depositors of their assets to some degree. That is what the minister is telling us. He is trying to say the opposition will be responsible for any failure of the government to meet the responsibilities to the depositors.

Our point is relatively simple. There is a third alternative, but they will not consider it. The minister knows as well as I do it was quite proper to put in a receiver and manager for the assets of the three trust companies. That there was a sense of jeopardy -- whether it was to be proved or not -- was quite adequate, we accept that. The implications of this for Ontario are very great. We would have accepted it if the government had had the guts to say, "We will stand behind every bona fide depositor and investor in that company regardless of the circumstances in which he made his investment provided he is in good faith and is not involved in any other manipulations with respect to that company."

The government was not prepared to do that. The government in return said to us: "This company" -- not the three companies -- "requires a massive transfer of funds. We can only get those funds from Ottawa and we will not let anybody off the hook for one single moment until we get our way, and that is to peddle the assets of Crown Trust." That is what it is going to do.

It is not fundamentally interested in the protection of the depositors of that company. That company was incorporated, organized, registered and licensed in Ontario, subject to the regulatory authority of the Loan and Trust Corporations Act. If the government was interested in protecting its depositors it would have said: "We will stand behind that company. We will stand behind every person who said he was going to deposit money in Crown Trust Co., behind every person who relied on the statute of Ontario to say that every deposit is a trust.

"We are going to stand behind every person who bought a guaranteed investment certificate because the guaranteed investment certificate is an important term of security in the investment world. They were issued under the Loan and Trust Corporations Act and the act said that if anybody has a guaranteed investment certificate the trust company holds the funds in trust to protect that person."

It is quite simple. The government did not have the guts to say that, not only to the depositors in Crown but also to the depositors in Seaway and Greymac. It is in default in its understanding of the role trust companies play in the life of this province, and the identification people have with the trust company concept as they go about the world of financial security in the province.

This government did not even have the confidence and the guts to say it would stand behind the integrity of the estate, trust and agency accounts. It would not even say that to the persons who had dealings with Crown Trust on a fiduciary basis, the people who put their trust in that company that they would be managed in a fiduciary way. I have asked the minister privately to give that assurance and I have asked him in question period but he has refused to do so.

What does he tell us in return? He tells us about something called the Canada Deposit Insurance Corp. I would be inclined to agree that until the occasion of this debate few members of the assembly, let alone any members of the public, knew what the CDIC was. I am not certain we are much more enlightened today.

Now another minister of the crown is engaging the minister in conversation. I think I will just wait, if I may, until that minister of the crown also sits down. Is the Minister of Northern Affairs (Mr. Bernier) talking about outfitting people or is he soliciting the assistance of the Minister of Consumer and Commercial Relations about the treaty arrangements with the native peoples? Why does he not just leave?

Mr. Kerrio: Are you taking orders for wild rice, Leo?

Hon. Mr. Timbrell: Your arrogance knows no bounds.

Mr. Renwick: I am arrogant; when I deal with arrogance I am arrogant, that is the only way one can deal with them. That is the only way one can deal with a government such as this. The arrogance of this government! If they believe for a single moment they can fool the people of Ontario and allow any depositor in Crown Trust, in Greymac Trust or in Seaway Trust to be hurt because of its negligence it will ultimately pay a price at the polls.

9:10 p.m.

The minister has told us he has to have this legislation because the Canada Deposit Insurance Corp. has dictated it to him. He has told us it is only if he has this legislation that the CDIC will come to his support. I do not know whether he has ever heard the phrase, "He who pays the piper calls the tune." If he wants me to go slowly I could repeat it so he could use it on another occasion. If the CDIC picks up the tab on this occasion, he can be certain that down the road this Tory government will abdicate its responsibilities with the one financial institution which the people of the province believe is part of the fabric of Ontario.

The minister tells me about massive amounts of money in a province of this wealth and all I know is what I read in the newspaper. He only discloses his information by pieces in a way that none of us can put together. There is something between $50 million and $150 million of either back-up money or necessary money needed to provide the liquidity for this company, and he is not prepared to do it.

Perhaps he wants to get out of the trust business. Perhaps he wants to turn it over to the federal government, but that is not what the people of Ontario want nor what they need. The minister has defaulted to this assembly with respect to the regulation of those trust companies. I will not believe otherwise until he produces the evidence which will support his statement that somewhere down the line he is going to let members question the registrar of loan and trust corporations. That is not sufficient or adequate from our point of view.

I want to touch upon two or three other areas. I could not believe, being a lawyer, that a real estate transaction could cause the trauma in this province that this real estate transaction has caused. The Loan and Trust Corporations Act, for whatever one may say about it, is a regulatory scheme which, if it had been followed by this government in the way in which it was intended, would have prevented the debacle we are facing.

I would not have believed that in secret, under a commission established by this government, the Morrison commission, they cannot to this day even tell us what that real estate transaction was in all of its ramifications.

I do not know whether the minister understands much about this kind of a world. He obviously has listened to Mr. Macdonald and Mr. Biddell. I happen to know both of the men involved and they are both able in their field. But their field is simply to translate business collapses into some kind of rescue operation that will do the persons who are the successors to the business the ultimate amount of good. That is what is happening. I cannot believe the minister would default to those two advisers in a way which would indicate that in some way there is no other solution except the one they have told him about.

I want to propose to the minister the following solution to the problem: that the registrar of loan and trust corporations remain the receiver and manager of the three companies and their assets; also if he is so advised that it is the proper course, that he wind up Greymac Trust and Seaway Trust, with a public assurance by this government that no bona fide investor or depositor will lose a cent in any of those companies.

I would ask the minister, in the case of Crown Trust, to say to the Canada Deposit Insurance Corp., "No, we are not, at your bequest, going to enter into something called a fire sale" -- as my leader has termed it -- "or give permission to peddle off the assets of Crown Trust and then at some point turn the assets back to the management of those who would be appointed by the shareholders of the company."

I am going to ask the minister to say to the people who have confidence in Crown Trust: "We are going to remain as receiver and manager. We are going to support that company. We are going to re-establish that company and keep it in a holding position until such time as we, the government, can provide all the answers. We are going to arrange with CDIC for whatever support we need from them in order to carry out that arrangement. We are going to say to CDIC, 'These are the terms. Let us sit down and negotiate them. Do not tell us what those terms are.'

The minister can smile. He can tell me what Biddell and Macdonald tell him. He knows as well as I do that he can take possession of those assets, as he has done, and he can run that company if he will say three words, "We will guarantee the investors." But he will not say them.

Hon. Miss Stephenson: That is five.

Mr. Renwick: I am sorry, I did not hear the minister.

Hon. Miss Stephenson: You said "three words."

Mr. Renwick: Oh, I am sorry.

Mr. Cassidy: I am glad you can count to five, Bette.

Mr. Renwick: The minister can get the money from the government of Canada if he wants it or if he needs it; but he does not need that money, he can get the credit he needs very easily and quickly.

That is the alternative he refuses to consider. That is the alternative that is real. That is the alternative which is considered by his advisers -- in the case of Woods Gordon with respect to Crown Trust; and in the case of Touche Ross with respect to the two other trust companies -- as one that could be carried out in a very orderly and sensible way. That is the purpose of the operation and that should be the goal the minister wants to achieve.

Interjection.

Mr. Renwick: I do not know the answer about the public forum. I think there should be a public forum to ask the right questions and get the right answers about it. It is obvious the minister is not the person to provide us with that information.

His saying he will tell us what the Morrison report says when he receives it is no longer acceptable to us. It would have been acceptable had he stood in his place on Monday afternoon, when he introduced this bill to the assembly, and had given us the information he gave us on Tuesday and Wednesday in dribs and drabs in a most indirect way. There is not a single piece of information we have received since Monday that could not have been given to us on Monday. It was the most cynical performance I have ever seen the minister engage in in this assembly. It relates simply to the adverse publicity he got in the media about the course he was following.

The minister also knows there is a great deal more information he could give us but which he will not give us. He has used the information he gave this assembly to paint, in starkest terms, the blackest scenario that he could possibly paint in order to manipulate public opinion and to force this assembly into passing this bill.

9:20 p.m.

One only needs to look at what we got as the report of Woods Gordon to see that only the black parts were given to us and nothing else. One only needs to see that we have not got the reports that Touche Ross gave with respect to the other two companies. One only needs to illustrate the cynicism of the minister because he will not say a solitary thing in solace of those who have deposited money and invested in Seaway or Greymac in good faith.

It is not often I speak to a fellow member of my profession about something called the rule of law, and I do not pretend I can define it. I can find many definitions and so could he, but we are engaged here in protecting and preserving the rule of law and this bill is offensive to that principle.

I think it is offensive because of the panic of the government in taking the advice of advisers who seem to equate justice with some quick action. There is no need for this speedy action. The minister has not convinced us of that. The only need for the speedy action is the failure of the government to give the assurance to people who have deposits and who have investments or have assets under fiduciary trust in any one or more of those companies that this government will stand behind it.

Then it can manage them, it can operate them and it can work out, in the course of equity, soundness and common sense, what is best for everybody concerned; but no, it chooses to provide for something called orderly liquidation.

I do not know whether it falls under the term confiscation of property or not. I would think it was passing strange if the government were to pass a law which said the property that James Renwick has is going to go into receivership and management, and that is not an infringement on my position, of course, because it is going to do it as it sees fit, and then it is going to sell off the best parts and turn it back to me and say, "We have not altered your position at all."

I would be inclined to think that was an interference with property interest, which was contrary to the rule of law in the province. I would believe that to be so, and I believe it would be necessary to show very strong justification for such action.

The Attorney General's description this afternoon was that they were just changing the priorities slightly in order to give those depositors some --

Mr. T. P. Reid: Isn't that shocking? Shocking and scary?

Mr. Renwick: Yes. I have very little confidence in the Attorney General in matters relating to constitutional protections of the citizens.

I do not know if there is very much more to say. I guess I am disturbed that the Loan and Trust Corporations Act was not amended as the select committee had recommended many years ago now. I guess I am disturbed about it. It would have helped a great deal had the government seen fit to accept some, if not all, of our recommendations about the amendments to the Loan and Trust Corporations Act.

That does not take away from or alter the situation that the statute, as it exists, had ample and sufficient powers to have prevented this from occurring. The minister knows that and if he did not have the powers, he could have moved much sooner to have done so.

On the question of the rule of law, if I may perhaps just refer to it, I was shocked that Mr. Macdonald used the term "poetic justice." Poetic justice is not and cannot be equated with the rule of law. When a government takes precipitous action against a single corporation without having the integrity to provide by way of government guarantee the support that is required to ensure the continued stability of that company, then I am very concerned about the integrity of government in all of its aspects.

The Canada Deposit Insurance Corp. has an agreement with Crown Trust to provide insurance. Some of the things we would like to know in the committee when we deal with this bill are:

What are the terms of the arrangements that CDIC have dictated to the government that the government will enter into? Which of the assets will be sold? To whom will they be sold? Who were the bidders in the field? What is the information that the minister requested from the bidders? What responses did he get? Will Woods Gordon and Touche Ross provide us with pro forma balance sheets of what these companies will look like after they have peddled off the assets? What will the companies look like when they relinquish the possession and control of the assets of the company after they have been sold and turn over whatever residue there is to the present management?

It is so very easy in times of stress to provide an atmosphere that is accusatory of people by the rumour and innuendo that I despise. I would simply say the minister has an obligation to remain in possession of these assets, to manage them and to operate that business until such time as he brings charges one way or the other, under the Loan and Trust Corporations Act or under the Criminal Code, against the persons who have been destroyed in the public mind by innuendo and rumour. Only the minister can control that situation. He has been discreet about his comments, but he has done nothing to stop the flow of innuendo, rumour and destruction that has surrounded the principal players.

I recognize it is not particularly popular to say this, but that is what the law is all about. It is not a popularity contest. It is a provision of equality under the law. It is a provision for due process under the law. It is a concept of the protection of citizens when they are under attack. When that time comes, the minister could say to the public, "This is the course we will now follow," rather than to choose the course he is following at the present time.

I suppose it will be some considerable time before my confidence in the minister is restored after his performance in the last three days. It is quite unbelievable to me that it would not have been possible for this government on Monday last to have made their announcement in the House, to have made as full and complete a disclosure as it was possible for them to make, to have been frank and candid and forthcoming with this assembly as to those areas about which they did not have information or those areas that were still under investigation.

Then if necessary, because of the wide public interest in this matter, they could have called a press conference and provided an opportunity for a statement to the public that would have reached much further than what was said in this assembly. They could also have provided the media with an opportunity for a question and answer session to obtain the information that was required.

Then the minister might well have been able to persuade them that this legislation was a wise piece of legislation. I simply say to the minister that the legislation is not wise; it is not a black and white choice. If this bill is not passed, the fault will not lie with the opposition; the fault will be because the scheme is faulty, the process is faulty and it offends some of the major principles by which this particular assembly and this society are governed.

9:30 p.m.

More than anything else, it means the government has abdicated its responsibility for the principal financial institutions in this province that are completely under its control, the loan and trust corporations in the province. It means the faith and confidence people have in those institutions has been shaken. I have had people ask me, as they have asked many other members of the assembly, if I had some money to invest, would I go into a trust company? Would it matter to me what the name of the trust company is? I do not need that hassle. I will go to the bank.

That is the price we will pay in the province for the abdication by the government of its responsibility for the integrity of these institutions. It lies at the feet of the minister. He is responsible for the poor advice he has received. He is responsible for the incapacity and inability to distinguish between the commercial reorganization of a failed business and the public responsibility this government has.

I do not particularly believe the sole reservoir of wisdom in the way in which this matter could be transacted resides in Mr. Macdonald, Mr. Biddell or any combination of the two. I particularly resent the comment by Mr. Macdonald about poetic justice. If nothing else, it indicates very clearly the kind of thinking behind the principal advisers of this minister. He does not have the wit or wisdom to understand that the political and social dimension of this problem far outweighs that kind of advice.

I may say to the minister that I trust he recovers from this, but I doubt very much that he will. I respect him and believe with considerable regret that the advice he got is probably the worst possible advice he could have received in this situation with respect to the importance of trust companies in the life of Ontario.

Mr. Brandt: Mr. Speaker, I am pleased --

Mr. Kerrio: What happened to all those hardball players? Have they all gone?

Mr. Brandt: What is that with respect to hardball? I missed that.

Mr. Roy: We have had the apologies of a succession of former cabinet ministers.

Mr. Brandt: I want to assure the member for Ottawa East that there will be no apology on the part of the member for Sarnia.

We on this side of the House are quite prepared to agree that the legislation before us, namely, Bill 215, does contain extraordinary powers and perhaps establishes some rather unusual and difficult precedents this House has not faced before. I do not think that comes as any particular surprise to any member of the House.

We should make the point that Bill 215 is specific to Crown Trust. That is well known as well to the members of the Legislature. However, I want to say that we on this side of the House are convinced the bill is necessary and essential to protect the depositors involved in the Crown Trust affair.

To supplement that comment, I have to say the Canada Deposit Insurance Corp. has made it very clear that this bill or a bill of a similar type -- and we are not talking about Bill 127, I should say to the member of the third party, but about Bill 215 --

Interjection.

Mr. Brandt: There will be ample time, I can assure the member, for all of us to get into a debate on that particular matter. I know there are some visitors in the gallery tonight who are interested in that bill. However, we are talking about a very important and critical bill in the history of this province, namely, Bill 215.

It has been made clear by the CDIC that Bill 215, or a bill similar in thrust to that legislation, is essential at this time. I have heard the --

Mr. Grande: Mr. Speaker, on a point of privilege: I understand the honourable member to say the bill we are discussing now is a very important bill. I happen to agree with him, but I did not think this would distract his attention tonight.

Mr. Brandt: In my view, Mr. Speaker, the demonstration by the member from the third party is in rather poor taste for a member of this Legislature. If he would like to parade with his sign in some other area of the building, perhaps that would be somewhat more tasteful. I would not suggest he use good taste or appropriate judgement but --

Mr. R. F. Johnston: There is a place for you in that cabinet, Andy.

Interjections.

The Deputy Speaker: Speaking to Bill 215.

Mr. Brandt: I am attempting to speak to the bill, Mr. Speaker. I found it quite interesting that the Leader of the Opposition indicated he could not support this bill. If that is the position of the official opposition and of the members of the third party, they must have a love of danger because, and I say this with as much sincerity and emphasis as I possibly can, any delay in the passage of this bill puts the depositors clearly at risk and increases the exposure of the depositors to further potential losses. There is no question whatever about that.

At this point in our history, we live in a difficult economic period. The entire banking system, let alone trust companies, is under question by a great number of Canadians at this time. It is suffering from a lack of confidence. I point out to members of the Legislature that virtually every day -- Mr. Speaker, I find the constant raising of the sign to be --

Mr. R. F. Johnston: What's that, Andy? What sign?

Mr. Brandt: The great sign that says, "Stop Bill" -- I cannot read the rest of it.

Mr. R. F. Johnston: I am sorry, Mr. Speaker. I don't know what he is referring to.

Mr. Cassidy: I can't hear the member for Sarnia, Mr. Speaker. Could he repeat that?

The Acting Speaker (Mr. Mancini): Order. I think it has been accepted as a basic principle in this House that there should be no demonstrations in the public galleries. I believe that also takes --

Mr. McClellan: He is not in the public gallery.

Mr. Cassidy: He is not wearing a tee-shirt.

Mr. Cooke: Use the footstool.

The Acting Speaker: That principle is also important and takes precedence here on the floor. The member for Oakwood (Mr. Grande) is --

Mr. R. F. Johnston: Can I ask you to take this under advisement, Mr. Speaker?

The Acting Speaker: No, I am not going to take it under advisement. The member for Oakwood should put his sign down and stop the demonstration, and the member for Sarnia should be able to complete his remarks.

Mr. Cassidy: Name him. Use your power, Mr. Speaker.

Hon. Mr. Ashe: Pitch him out. That is what he deserves.

The Acting Speaker: Order. I thank the member for putting his sign away.

Mr. Brandt: I was making a point about the lack of confidence that many Canadians have in the banking system in Canada today. I noticed the members were applauding in an anticipatory fashion. They thought I was going to say "trust companies."

I would include those in the overall problem the country faces at the moment, because there is a lack of confidence in the banking system to a very great extent. It is our opinion and feeling on this side of the House that Bill 215 is necessary to re-establish the kind of fundamental confidence in the trust companies and in the banking system in Canada that is very much required at this time.

9:40 p.m.

As a relatively new member of the House, I am disturbed by comments from the opposition parties, most particularly from the official opposition, that the minister has not provided adequate information to the House with respect to this whole matter.

As a member of the Conservative Party and the back-bencher who sits behind the gentleman who has had a great deal to do with this issue, I want to say that no minister of this government has made a more conscientious effort, or has been more honest and more open, or has so tirelessly and repeatedly shared with this House every single element of information he has had available and has been assured is accurate.

I want to read into the record some of the activities of the minister in this regard.

Interjections.

Mr. Brandt: On November 4, 1982, this minister made a statement in the Legislature to report on his meetings with an individual by the name of Leonard Rosenberg. On November 10, a news release was issued in respect to the sale of the rental buildings, the so-called Cadillac Fairview properties. On November 16, there was a statement in the Legislature announcing steps with respect to rent restraint and inquiries that were being made by the ministry. On November 25, there was a news release and the terms of reference for the Thom inquiry.

On December 2, 1982, there was a statement in the Legislature regarding the introduction of the Residential Complexes Financing Costs Restraint Act. Again on December 2, 1982, there was a news release giving the background highlights on the rent restraint bill and inquiries. On December 21, there was a statement in the Legislature regarding the introduction of amendments to the Loan and Trust Corporations Act.

On January 7, 1983, there was a news release and statement announcing the takeover of trust companies. On January 10, there was a news release announcing information telephone lines. On January 17, there was a statement in the Legislature regarding an interim report on events surrounding inquiries into trust companies. On January 19, there was a statement in the Legislature regarding raising of insurance levels applied by the Ontario Share and Deposit Insurance Corp.

On January 20, there was a statement in the Legislature regarding trust company securities. On January 24, there was a statement in the Legislature reporting further on Crown Trust and introducing legislation to give the registrar power of sale. On January 25, there was a statement in the Legislature and tabling of information respecting certain major transactions of Crown Trust.

In addition to that long litany of information that has been given by the minister, he has answered no less than three or four or five questions by the members of the opposition each and every day that we have sat in this House.

Mr. R. F. Johnston: Mr. Speaker, on a point of order: While the member for Sarnia is giving us this list of the times the minister has risen in the House, will he also give us his speaking engagement schedule over that same period of time? I would be very interested in hearing that.

The Acting Speaker: I do not believe that is a point of order. The member for Sarnia will please continue.

Mr. Brandt: The point I wanted to make was simply that this minister not only has the confidence of the people of Ontario with the actions he has taken to date but also the total, full and complete confidence of every member of the party that sits on this side of the House.

Mr. Kerrio: You really didn't have to say that, you know.

Mr. Brandt: I said it because I meant it and I was sincere about it, and I trust my friend will join with me as the events unfold in the future.

In the interests of certain time constraints I am simply going to say --

Applause.

Mr. Brandt: My friends should not encourage me.

I simply want to say that the purpose of Bill 215 is to make certain that everything is open and above board, to protect the interests of the tenants of the 11,000 units in the Cadillac Fairview properties, to make sure that the rents are not ballooned on any of those properties and to protect the depositors and ultimately the investors in Crown Trust.

It is the responsibility and it is the action of this government that it can assure that this is going to happen, and we want to assure you, Mr. Speaker, that the feeling on this side of the House is that Bill 215 is necessary, that it is appropriate, that it is fair and that it is very sensitively placed before this House at this time.

Mr. Epp: Mr. Speaker, I appreciate the opportunity to speak to this bill, albeit very briefly.

Mr. Brandt: Good.

Mr. Epp: Not that briefly.

We have heard from the Minister of Industry and Trade (Mr. Walker), the former Minister of Consumer and Commercial Relations, that this would never happen again, referring to the present fiasco and what happened in Re-Mor and Astra. We have seen many Ministers of Consumer and Commercial Relations come before us, including Mr. Handleman, the member for St. Andrew-St. Patrick, the member for Scarborough Centre, the Minister of Industry and Trade and now the present minister.

The Premier has been flipping these ministers the way Mr. Rosenberg has been flipping the buildings and, as my colleague the member for Yorkview (Mr. Spensieri) has indicated, it is part of this Oklahoma scam that we are so familiar with. We have seen, of course, the contempt that the present minister has shown for this Legislature by going to the editorial boards of newspapers and trying to influence them in their policy with respect to reporting the news on this item.

One thing that has been lost sight of in the past few days is the 10,931 units with about 30,000 tenants occupying these units. I believe that is where this mess started, with the flipping of these buildings from Cadillac Fairview to Kilderkin to the numbered companies. One of the things the minister has completely forgotten about is the responsibility he has to these people; and he has not come forward, he has not been forthright with us in telling us exactly what is going to happen to those properties.

We were told the other day by Mr. Biddell that the government is trying to get those properties back and that they may very well end up negating the deal, and if they try to negate that deal they may end up owning all these properties. Now, if they are going to own the properties, what is going to happen in the aftermath? Are they going to keep the properties, or are they going to try to sell the properties?

One of the other things that is happening is that many of these 30,000 tenants do not know what is going to happen to their rent increases. Rent increases of anywhere from six per cent to 60 per cent have been requested, and there is no indication of any clear policy on what will happen.

We know that a bill came before the House last December, and was passed quickly, with respect to the five per cent financial pass-throughs; but it does not put any lid or any particular ceiling on the cost pass-throughs. In other words, there may still be increases on these buildings of operational cost pass-throughs of anywhere from six to 16 to 36 to 46 per cent, depending on what the various tenancy commissioners permit.

9:50 p.m.

I believe that the minister, in his stonewalling techniques, has been very remiss, has been very delinquent in not giving the tenants of this province the kind of information they deserve. I hope that in the coming weeks he is going to be more open and more forthright with respect to that information.

To give an example, the member for Sarnia (Mr. Brandt) indicated how open the minister has been and said he has always come forward with information. Yet when a former Attorney General of this province, who was a director of Crown Trust, resigned from Crown Trust, it took about 10 or 15 days before the minister finally admitted in the House that he had resigned. If he is that open with all his information and the impact of things that go on with respect to Crown Trust and other companies, then why could he not announce in this Legislature that Mr. Clement had resigned? That is one simple example of how he has not come forward with all the information.

Mr. Cousens: Mr. Speaker, the issue before us is one of trust. We have been hearing many different participants review what they see the trust to be. I would like us to sit back and realize that there is a basic trust that people have in the financial institutions of our country, and a trust that they have in their politicians.

The trust that people have in their financial institutions is something that we can see continue if, in fact, we are able to show that what we are doing is the right thing for what is a very delicate system based on the confidence that people have.

I think we all have to be very serious in our deliberations and not allow ourselves to move to a decision that is motivated by something that can be of a political nature, and not something that is really for the wellbeing of the depositors.

As one who is concerned for those people who have money in these companies, to see an action now about to be made to protect their investments, to protect their deposits, is something we should all want to do. I would hope that whatever we do is going to be in that direction.

Mr. McKessock: Mr. Speaker, I rise to speak on Bill 215, An Act respecting Crown Trust Company.

Being a farmer, I am not used to dealing in issues that deal with such large sums of money as Greymac, Seaway and Crown Trust Co., but I would like to draw an analogy between this mess in the Ministry of Consumer and Commercial Relations and something that could happen in agriculture but does not.

In agriculture, in the meat packing business -- pork, beef, etc. -- we have the slaughtering and packing plants which have to meet government regulations. If they do not meet them, they would get in a mess also.

These plants are regularly inspected and every animal that is slaughtered for consumption by the public is inspected to make sure the public is protected and is offered nothing but government inspected and approved meat. There is very little danger of the consumer getting bad meat because of the continuous and regular job that is done in inspecting these premises, as well as the product.

Similarly this government, in Consumer and Commercial Relations, has the registrar of trust companies and staff who are responsible for inspecting and keeping a close check on trust companies so that the trust companies do not step out of line and put the depositors' money in jeopardy.

Unfortunately, this government's inspection department for trust companies was not doing its job and therefore Greymac, Seaway and Crown Trust were allowed to get so far out of hand that it was necessary to bring in this legislation to keep the deposits of innocent people from deteriorating any further.

Even with this transaction today, many preferred shareholders in Crown Trust stand to lose their investment. The Canada Deposit Insurance Corp., according to Mr. Biddell, will have to inject $50 million to $150 million into this transaction to make it work. The CDIC apparently does not have these kinds of funds. Therefore, many ordinary taxpayers will have to pay because the federal government will cover the CDIC's shortfall, so even with this bill today, many ordinary taxpayers will lose.

The government should have learned from the Astra/Re-Mor collapse two years ago to make sure that its staff, already in place to watch trust companies, were doing their job. To inspect, control and investigate is part of their job, to see that no irregularities take place in the trust company business and to see no bad debts are put in the hands of the public, the same as the government inspectors in the meat packing business do not allow bad meat to be put in the hands of the consuming public.

Mr. Roy: Mr. Speaker, it is unfortunate when we are dealing with legislation as draconian and far-reaching as this that there should be a compulsion on the part of all those who participate to limit their debate to such an extent because, as I am sure the Speaker will agree, on first reading this legislation I could not quite believe that this government, this minister and the people on that side, who less than a year ago in April 1982 stood on Parliament Hill and proclaimed a new Constitution, a new guarantee of civil liberties for the people of this country, could in the short span of less than a year bring forward legislation which is as far-reaching and which so undermines the basic rule of law as this legislation.

I have seen all sorts of legislation. We saw legislation passed just before Christmas which many of us consider offensive, but never have I seen legislation such as this. Subsection 10(2) protects all actions on the part of government and those dealing with the government on this particular issue -- I will read subsection 10(2) briefly. It states, "No sale, assignment, transfer," etc., can even be reviewed by a court.

Never mind that such acts as the Loan and Trust Corporations Act are not applicable as stated in section 5, or that section 5 talks about the fact that the Bulk Sales Act does not apply. Perhaps the minister can tell me what subsection 5(4) means: "An order made under subsection 3 shall be deemed to be of an administrative and not of a legislative nature." What is that supposed to mean?

Finally, section 11 of this act states simply about the regulations, the things that are not covered in this act, "The Lieutenant Governor in Council may make regulations authorizing all such acts or things not specifically provided for in this act." We know that, by and large, when we state that regulations can be enacted following a statute, there are certain parameters, certain guidelines given for why the statute should be given.

Mr. Stokes: Almost like the War Measures Act.

Mr. Roy: The former Speaker talks about the War Measures Act. It is like the War Measures Act. Some people have referred to it as a financial war measures act and basically it is. Given this situation, it is small wonder that my colleagues and I sat down and wondered: "How can we possibly support this legislation? How can a minister who claims to be as enlightened as that minister bring forward such legislation?"

We understand the problem. We accepted his premise and we met with Mr. Biddell. We listened to the urgency and the necessity of proceeding expeditiously on this issue. In the last few days we have had the actions of the minister, his contempt for the assembly and his attempt to manipulate the press, as my colleague the member for Renfrew North (Mr. Conway) pointed out this afternoon.

Finally, we have the minister's actions in trying to blame us, the responsible opposition, for trying to determine why he needs such wide-sweeping powers. We are being blamed for delaying the legislation and in some way tampering with the rights of the depositors.

10 p.m.

Those are not actions that inspire confidence. We listened to the minister. We listened to the Premier earlier this afternoon. We listened to Mr. Biddell. We accept it when the minister says they are honourable people acting in good faith and that he is not afraid to justify his actions. If that is the case, if the minister is not afraid to justify his actions, why is he afraid the courts will look at some of these actions? Why does he prohibit the rule of law? If the minister is acting in good faith, why does he want to prevent the courts from getting involved in this particular process?

We are concerned about the depositors. God knows, nobody can accuse this party, the official opposition, of being irresponsible. In fact, it is the Leader of the Opposition who for the last three or four months has pushed the minister into accepting his responsibility. This is the party that has done that. The minister has the nerve to tell us, when we are attempting to do our job of scrutinizing the legislation, that we are delaying the process. This is hard to take.

We do not believe people like the Rosenbergs of this world should be in charge of trust companies. We understand what the minister is talking about. People like that should not be allowed to deal with people's life savings. We know that. In fact, we would go further. We are saying the Rosenbergs of this world should not be sitting on the Ontario Municipal Board.

However, given the circumstances, we do not know of any charges having been laid against Rosenberg. Through the previous legislation in which we gave the minister carte blanche just before Christmas, he has confiscated property and is now in the process of disposing of this property without giving us the evidence that such draconian measures are necessary.

We will protect the rights of the depositors, we will accept those principles, if the minister will give us an undertaking that he is prepared to protect the depositors in Greymac and Seaway Trust. What is wrong with that? What is wrong with protecting the rights of the people who are the preferred shareholders? What is wrong with making certain amendments to ensure that some of the minister's actions can be reviewed by the courts?

The minister says: "We are honourable people, acting in good faith. We are not ashamed of anything we are doing." If that is the case, why is he afraid the courts may look at some of the things that are happening here? The other day the minister mentioned in the assembly that he wanted to make sure the buyers had clear title. We accept that. But why does he want to prohibit the courts from looking at that title?

When the minister asked us to meet with Mr. Biddell, I discussed with Mr. Biddell some of the urgency. My colleagues and I had a discussion about the necessity and urgency of the process. But at no time was it mentioned that the purchasers, the buyers, the people who are prepared to take over, wanted absolute rights and absolute immunity and did not want to be subject to the rule of law. There was no mention of that.

It is a sad evening when we see the government using its majority to push forward legislation such as this. It has been a sad process, considering what has happened in relation to the watchdog approach taken by the government over the last few years, to see a procession of ministers coming to confession in the assembly this evening. We have seen a succession of predecessors in the ministry and we know that someone in the Premier's office said: "Look, good old Bob has taken enough flak on this. Get in there, Frank, and take some abuse for a change. Gordie, it is your turn. You are partly responsible for this. Larry, you go take some of the abuse for this as well."

The Deputy Speaker: Do you mean the ministers?

Mr. Roy: I am talking about the variety of ministers, Mr. Speaker. It has been a sad process when we have seen the succession of people come forward and in some way try to justify their stay in the Ministry of Consumer and Commercial Relations.

Time does not permit me to go back to previous statements by the ministers, but I do want to ask the minister involved, for God's sake, if he is proceeding with such draconian measures, what is he afraid of? Why does he want to get around the Constitution of Canada and why is it that he does not want his decisions or his actions or his transactions reviewed by the courts in any way?

Given these situations and given the conditions my colleagues have set out that we are prepared to accept, I want to say to the minister, surely he did not expect this opposition, which has been doing its job over the last four months, to give him a rubber stamp or carte blanche with such legislation.

In closing, I would say my colleagues and I have read editorials from various newspapers, and I thought I should read one. I can understand the minister's concern, running to the editorial offices of the papers at eight o'clock at night to say: "I have an explanation. You boys do not understand. Let me give you the lowdown on what is going on." It is obvious that nobody at the Globe or the Star is buying it.

I want to read what the Ottawa Citizen had to say yesterday about the process: "Elgie must provide facts. From the start the thing that has been notably absent in the Ontario government's handling of the trust companies affair is candour." That is the Citizen. That is not a partisan statement; it is an objective newspaper which is talking about the process.

It goes on, "That remains true in the current attempt to ram a bill through the Legislature, granting the province extraordinary powers to sell Crown Trust Co." I will close by simply reading this statement: "The province wants trust from everyone else. It is time it showed willingness to trust others in return."

That is a statement to the minister. It is not the Liberal Party writing this, it is the Ottawa Citizen, an objective newspaper.

Mr. Rae: It is the Liberal Party and it is the Ottawa Citizen. You are right both times.

Mr. Roy: I am getting some comments from my friend to the left. We will send them our notes later. If they will send their press secretary to our research office we will fill them in on the facts.

We have given the minister the conditions for support. We are as concerned about the depositors as he is. Surely the conditions my leader and others of my colleagues have stated here this afternoon are reasonable. At the time he is prepared to meet these conditions and establish the rule of law in this legislation then he will get the support of this responsible opposition.

Hon. Mr. Elgie: Mr. Speaker, if I may I will wind up the evening debate by first of all thanking members of the opposition parties and my own colleagues for their valuable comments. May I go back for a moment to the events of November 5 to November 8. All of us became fully aware of the full implications of the number of transactions that had occurred over that period of time and the rapid escalation in price that had occurred in those properties.

10:10 p.m.

I would say the government's formal response to that, made in a statement on November 16, indicated a very rapid and appropriate response to what we perceived as a very serious issue from many perspectives. From the point of view of the tenants, we passed legislation relating to financing cost pass-through. At the same time and on its own, the Rent Review Commission changed its guidelines and imposed restrictions on multiple sales.

In addition to that, the Thom commission was set up to review the adequacy of our rent review legislation in this province. And because of the loan and trust implications of the loans that had been made from three trust companies in relation to those Cadillac Fairview deals, totalling $152 million, Mr. Morrison, of the firm of Touche Ross and Co., was employed by the government to carry out an inquiry under the Loan and Trust Corporations Act. Under that and with the powers under Part II of the Public Inquiries Act, he was to review the conduct of those businesses.

By early December, from some of the information that was developing, it became apparent to me the Loan and Trust Corporations Act was not adequate to meet some of the potential problems that might develop as the matters were evolving. It was for that reason we proposed the amendments of December 21. These did three things, in essence -- not two as suggested by the member for Riverdale.

One was to give the registrar greater power to obtain disclosure of information. Second was to give the registrar greater power with respect to the transfer of a trust company or a share in a trust company -- powers he already had with respect to the setting up of a trust company, but not with respect of transfer of shares in an existing one. Finally, there was the power to take possession in the event certain criteria gave the government reason to believe there was a legitimate concern about the public interest.

By the end of December, it was again apparent -- and I have told this to the House before -- that those $1.52-million Cadillac Fairview mortgages had eroded the borrowing bases of the three trust companies. They had been eroded to the point that they were jeopardized very seriously. This was apparent from the information gathered from the three trust companies on their own, with no other information one needed to have.

As I said before, the borrowing base represents qualified investments plus assets over liabilities. Therefore, these three companies, without borrowing bases, were not able to take deposits and therefore not able to function as trust companies and were deemed by the government to be companies that had to be further reviewed. Therefore, under the legislation that had been passed by this House on January 7, the registrar took possession of the three companies. At the same time the federal government took possession of the two mortgage companies, Seaway and Greymac.

The events since then are of course history and as reported in this House. I appreciate members have been concerned about a lack of information. But let us understand the constraints this minister honestly operates under. They are legal constraints.

First, as members know, there are a number of actions going on. I have been served with two subpoenas today, for example. There are investigations being carried out by other ministries: the Solicitor General, the Attorney General's office, the Royal Canadian Mounted Police and the Ontario Securities Commission. All of these are independent and totally unrelated to my role as minister relating to the Loan and Trust Corporations Act.

Second, there is information that is not yet complete or that I have just not received yet.

Finally, there is the fact there are always certain events going on that I think quite legitimately would be to the detriment of the public interest were they revealed at a particular time.

For those three reasons, I have been constrained in what I can tell members. But I am not constrained in telling members the information they have received forms a sound, solid basis for the action the government is taking. I say that without reservation. Once we had made the determination that the borrowing-base erosion impaired those companies to the point where they could no longer function, what were our choices? I say that our choices were really two and remain two.

The first was to make a decision whether to cancel the registry and then, using section 159, go into liquidation of the assets. The second was to use the amendments we had passed in this House on December 21 and then move into an attempt to salvage any of those companies if they were viable. The information on Crown Trust developed very quickly, and it became apparent there was a solid estates trust and agency base to that company and that it could be salvaged with an appropriate buyer.

Once that determination had been made, the Canada Deposit Insurance Corp. had a very difficult decision. Could they minimize their losses by putting in massive amounts of funds? Could that be done by having a purchaser ready to take it over so that there was not the temporary atmosphere about the operation that would be created by a "We will be in real business shortly" sign on the door? What was wanted was an atmosphere of permanent trust company activity, which gives people the kind of confidence they have to have if they are going to continue dealing with that company.

The second choice we had to make was that there had to be such a purchaser. All of our endeavours to date have been directed at that. I am not trying to be evasive or to hide anything when I say our genuine concern is that as each day goes by there is an erosion of the asset base. It is the asset base that makes this company viable, offers depositors the opportunity to be fully protected and gives shareholders, be they preferred or common, the only opportunity to salvage anything out of this. Under a liquidation there is nothing.

So that really is the choice. We can take what some may call a legitimate route, liquidation, where depositors lose some money, where the CDIC loses more money, where jobs are lost and where shareholders get nothing. Or we can take a route that I proposed to this House through this bill. It offers depositors security, it gives shareholders the only opportunity they will have to recover anything if the assets that were invested in it can be realized in any reasonable way, it retains the employment in those firms and it minimizes CDIC's losses.

I do not have much problem about the choice to make in this, and I trust that members opposite will make the same choice on the basis of the logic that I think we are all capable of.

I have heard three types of concerns about this bill that I think need to be clearly addressed. First, there is a suggestion that the bill is some form of punishment that is being inflicted on some of the shareholders of Crown Trust for possible wrongdoing on which all the facts are not in and on which no court has adjudicated. The truth is that this bill is not directed against shareholders and does not depend on there having been any wrongdoing. It is that simple.

It is the consequence of Crown Trust having being operated in such a way that it no longer has a borrowing base entitling it to continue to receive public deposits. Rather than being directed against shareholders, who collectively at least had some control over the operations of the company, it is directed at protecting depositors, who had 20 times the interest in the company and had no say in its direction. The alternative is very, very definite: it is liquidation. The bill is the best hope of ultimately allowing shareholders to receive something.

The second complaint I have heard is that there is some suggestion the bill amounts to some form of confiscation of shareholder interests retroactively. The truth is that it is a responsible proposal to the Legislature to step in before it is too late to prevent the practical certainty that there can be nothing for the shareholders if Crown Trust Co. is dealt with under the only alternative, liquidation.

10:20 p.m.

Finally, it has been suggested there is some lack of legitimacy in a free society in what is being proposed. The truth is that the power to sell was deliberately not included in the legislation on December 21. If I recall the remarks of the member for Brant-Oxford-Norfolk correctly, he suggested that perhaps we should have put it in the legislation in December. It would have solved a lot of problems, but the government honestly felt it should do so in a separate bill if it were going to take this step. We knew the kind of criticisms we would receive, and we were prepared to face the criticism.

Mr. Nixon: May I ask a question? Why does the minister not file a complete report indicating to whom he is selling the company?

Hon. Mr. Elgie: The House seems to accept that in a free and democratic society, it is right for us to act under the only applicable existing law, the procedure for winding up or liquidating a company that has no right to operate and that causes losses to all the people I have indicated. I ask why the House does not recognize it as legitimate to introduce legislation that offers protection to depositors, the only opportunity shareholders are going to have to preserve jobs and minimize CDIC's losses. I do not understand the rationale for that criticism.

The government does not say there are not other issues for this House in relation to the affairs of the three trust companies and the events that led to their present position. It does say two things. First, these other matters do not affect one way or another the wisdom of proceeding to pass this legislation. Second, there will be a full opportunity for review and debate of all these matters by the Legislature at an appropriate time.

I am committed to a full review by a committee on the use of existing loan and trust corporation legislation and administrative practice when the white paper on that subject is presented to the House. I am also committed to making public the results of the Morrison inquiry. I can envisage, when the results are public, they can provide part of the basis for legislative committee consideration.

I know members have made many other remarks, and I appreciate them. I hope, when we are in committee, we will have the opportunity to respond more directly to them. In the absence of that, I conclude the debate and ask that the bill be referred.

10:34 p.m.

The House divided on Hon. Mr. Elgie's motion for second reading of Bill 215, which was agreed to on the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Brandt, Cousens, Cureatz, Dean, Drea, Eaton, Elgie, Eves, Gordon, Gregory, Grossman, Harris, Henderson, Hennessy, Hodgson, Johnson, J. M., Jones, Kells, Kerr, Kolyn, Lane, Leluk;

MacQuarrie, McCaffrey, McCague, McLean, McMurtry, McNeil, Miller, F. S., Mitchell, Norton, Piché, Pollock, Pope, Ramsay, Robinson, Runciman, Scrivener, Sheppard, Shymko, Snow, Stephenson, B. M., Sterling, Stevenson, K. R., Taylor, G. W., Taylor, J. A., Timbrell, Treleaven, Villeneuve, Walker, Watson, Welch, Wells, Williams, Wiseman, Yakabuski.

Nays

Allen, Boudria, Bradley, Breaugh, Breithaupt, Bryden, Cassidy, Charlton, Conway, Cooke, Copps, Cunningham, Di Santo, Eakins, Edighoffer, Elston, Epp, Foulds, Grande, Haggerty, Johnston, R. F., Kerrio, Laughren, Lupusella;

Mackenzie, Mancini, Martel, McClellan, McGuigan, McKessock, Miller, G. I., Newman, Nixon, O'Neil, Peterson, Philip, Rae, Reed, J. A., Reid, T. P., Renwick, Riddell, Roy, Ruprecht, Ruston, Samis, Spensieri, Stokes, Swart, Sweeney, Van Horne, Worton, Wrye.

Ayes 62; nays 52.

Ordered for the standing committee on administration of justice.

Hon. Mr. Wells: Mr. Speaker, I wonder if I could have the consent of the House to revert to motions so that we can move a motion concerning this.

Mr. Speaker: Do we have the consent of the House?

Agreed to.

MOTION

COMMITTEE SITTINGS

Hon. Mr. Wells moved that the standing committee on administration of justice consider Bill 215, An Act respecting Crown Trust Company, tomorrow morning, January 28, and further moved that the committee be authorized to sit the afternoon and evening of Monday, January 31, to consider the bill.

Motion agreed to.

10:40 p.m.

BUSINESS OF THE HOUSE

Hon. Mr. Wells: I would also like to indicate the business of the House for tomorrow morning. We will be considering in committee of supply the supplementary estimates of the Ministry of Treasury and Economics and concurrence in the estimates of the Ministry of Education.

On Monday, we will deal in the afternoon and evening with concurrences beginning with the Ministry of Natural Resources, followed by the Provincial Secretariat for Resources Development and the Ministry of Transportation and Communications, and, if time permits, possibly some others.

On Tuesday, February 1, in the afternoon we will deal with second reading and committee of the whole, if needed, of Bill 203, second reading and committee of the whole of Bill 14, and the concurrence in the estimates of the Ministry of Labour, if we have time before 6 p.m. In the evening of Tuesday, February 1, we will have second reading and committee of the whole, if needed, of Bill 197, and then concurrence in the estimates of the Ministry of Energy.

On Wednesday, the usual three committees may meet in the morning: justice, general government and resources development.

On Thursday, February 3, in the afternoon, we will deal with private members' ballot items in the names of Mr. Ruston and Mr. Lane, and as of now, we will deal in the evening with concurrences of the Ministry of Labour, the Ministry of Tourism and Recreation and the Ministry of Citizenship and Culture.

Of course, we will be prepared to continue with Bill 215 as soon as the committee reports it back to the House, which may necessitate some changes in scheduling.

The House adjourned at 10:42 p.m.

27 janvier 1983