STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE
The House resumed at 8 p.m.
Hon. Mr. Wells: Mr. Speaker, could we have the unanimous consent of the House to revert to routine proceedings for reports and motions?
Mr. Speaker: Is it agreed?
Agreed to.
REPORT
STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE
Mr. Treleaven from the standing committee on administration of justice presented the following report and moved its adoption:
Your committee begs to report the following bill with certain amendments:
Bill 215, An Act respecting Crown Trust Company.
Motion agreed to.
Mr. Speaker: Shall the bill be ordered for third reading?
Ordered for committee of the whole House.
MOTIONS
BUSINESS OF THE HOUSE
Hon. Mr. Wells moved that, notwithstanding standing order 64, government business be called on Thursday afternoon, February 3.
Motion agreed to.
COMMITTEE SITTINGS
Hon. Mr. Wells moved that standing order 72(a) respecting notice of committee hearings be suspended for the consideration of Bill Pr33, An Act respecting the City of Kitchener, on Thursday, February 3, and on Bill Pr1O, An Act respecting the City of North York, on Friday, February 4, by the standing committee on administration of justice.
Motion agreed to.
House in committee of the whole.
CROWN TRUST COMPANY ACT
Consideration of Bill 215, An Act respecting Crown Trust Company.
Mr. Chairman: Not having the benefit of the standing committee on administration of justice, I am at the pleasure of the committee of the whole House as to any amendments to any section.
Mr. Renwick: Yes, Mr. Chairman, immediately following section 4.
Mr. Chairman: Are there any amendments up to and including section 3?
Mr. Roy: I might state, Mr. Chairman, the record should indicate that we of the Liberal Party have moved in the justice committee a whole series of amendments. I think there was a total of 11 or 12. Some of these amendments were accepted. Some of them -- very sensible, important and reasonable amendments that would have established a rule of law -- were unfortunately rejected by the majority of the Conservative members on that committee, aided and abetted in large measure by some of the members from the New Democratic Party. So we will not be repeating these amendments. Our point has been made in committee where we put in the amendments; we will not be repetitious and unduly delay any further the passage of this legislation.
Sections I to 4, inclusive, agreed to.
Mr. Chairman: Mr. Renwick moves that the bill be amended by adding thereto the following section:
"4a(1) The purchaser and substituted fiduciary shall continue to employ every person who on January 7, 1983, was in the employ of Crown Trust Co. and was so employed on the effective date of the agreement between the registrar and the purchaser under subsection 4(2), and substituted fiduciary under subsection 4(3) for the one-year period next following the effective date of such agreement at a wage or salary of not less than that he was receiving on January 7, 1983.
"(2) Nothing in this section prevents the purchaser and substituted fiduciary from terminating the employment of an employee for cause."
Mr. Renwick: Mr. Chairman, the amendment speaks for itself. Perhaps for the benefit of those in the gallery who may not have expected a discussion tonight of Bill 215, but might have been here had Bill 127 been called, I would like to say that we are debating the bill related to the Crown Trust Co.
The amendment I have moved is for the purpose of indicating to the committee that we in this party are concerned with ensuring the status of the 500 employees of Crown Trust Co. in the period of transition that will take place until the eligible assets of that company are absorbed by a new purchaser, in that period of transition of up to a year, we would like to see the employees protected.
8:10 p.m.
When one realizes that Crown Trust Co. is an old company in Ontario terms, having been incorporated in 1897 under the laws of this province, when one recognizes that the success of the government takeover of control of the assets of the corporation, the success of the plan, depends mainly upon the loyalty and efficiency of the employees of Crown Trust across the country, and when one recognizes that the transitional period will permit the normal business of Crown Trust to be resumed and will depend upon those persons, then it is, in our judgement, sufficient to say that a minimum degree of protection should be provided in the bill for those employees. That is the purpose of the amendment that is in front of us.
We were told, when we moved the amendment in committee and when it was defeated on a narrow vote of six to five, that arrangements have been made so that should the purchaser complete an agreement with the government registrar for the purpose of taking over the business every effort will be made to ensure that the employees continue in their employment. We are not satisfied with that best-effort clause.
We felt it to be essential that in the transition of the affairs of Crown Trust into whichever new hands they may go in this time of economic uncertainty, and in order that the employees of the company will have an opportunity at least to make an assessment of their position, whether they are going to have continuing employment or whether they are going to be terminated, we should have this minimum of protection in the bill.
No one in the committee, I may say, indicated for one single moment that this would jeopardize any of the conditions that were imposed on the government by the Canada Deposit Insurance Corp. that will make this bill go through. One of the underlying features of our discussion in committee was that if we did not move promptly on the bill, CDIC would be let off the hook in one way or another.
I at least give the minister and others the courtesy of saying to them that they did not try to indicate that was the reason they would not accept the amendment. They were prepared, however, to leave the employees to the good graces of the new owner, in due course, of the eligible assets of that company. We were not prepared to leave it on that basis, and we will move this amendment specifically in this committee of the whole House. It is the only amendment we propose to move to the bill in committee. We urge the whole of the committee to consider seriously giving this amendment support.
Mr. Roy: Briefly, Mr. Chairman, we supported this amendment in committee. My colleagues and I pointed out that although we support the amendment in principle and we sincerely hope that all steps will be taken to protect the employment of all those at present employed with Crown Trust, unfortunately the amendment as put forward by the member for Riverdale is in some ways unduly superficial. In fact, it is fraught with loopholes, if I may say so.
Throughout the proceedings of the committee, right from the early sections through to the end of the bill, my colleagues proposed 11 amendments to, as I said before, institute the rule of law to make the actions of the registrar and the actions of people acting with the registrar reviewable by the courts. In other words, we want to insert in this legislation justice and equity. We feel that had the amendments been supported, had they not been opposed by, among others, the members of the New Democratic Party, this sense of justice and equity would have done far more, in our opinion, for the company, for the employees, for people affected by the sale that is going to take place following the proclamation of Bill 215. In that sense it is unfortunate.
My colleagues and I have pointed out that unfortunately the bill requires two conditions that would leave the door wide open for a corporation that was not acting in good faith to rid itself of employees. Subsection 4a(1), as proposed, requires two conditions, one being that the employees be employed as of January 7, 1983; and a further condition that they be employed on the effective date of the agreement. There is nothing to prevent the corporation in the interim period from dismissing the employees.
The second problem with the proposed amendment is that subsection 4a(2) says an employee can have his employment terminated for cause. Of course, if for some reason the employer should say to an employee, "There is no more work," I suppose in those circumstances it could be considered termination for cause and, depending on the success of the recovery pursuant to the legislation, this might be a factor in retaining the employment of the individuals involved.
The other problem with the legislation as I see it is that many of these employees are not even subject to the labour laws of Ontario. They are employed in other jurisdictions, and one has to wonder what effect Ontario legislation can have on employees in jurisdictions other than this province. Legislation that we pass here cannot have jurisdiction in areas other than Ontario.
We will support the amendment, but I hope my colleague the member for Riverdale has not gone through this process just to put forward something that appears to be somewhat lacking in real protection and that some could say appears to be rather superficial.
Mr. Swart: Mr. Chairman, I want to add a few words to what has been said by the member for Riverdale in support of the amendment that was put by the New Democratic Party in committee and has been put here again. I have to say quite frankly that I was somewhat surprised that the government did not accept this amendment, because we had been told at least twice, perhaps even three times, in the committee that Mr. Jack Biddell and Mr. Thompson, who of course are deeply involved in the Crown Trust matter on behalf of the government, had been to see the employees of Crown Trust and had attempted to allay their fears and to assure them the expectation was that their jobs would continue.
However, when we attempted to put this into legislation to put meaning to those pious wishes, we found that the government majority voted it down. I hope that even at this late date the government may be willing to rethink its stand in the committee and accept the amendment we have before this House.
All members of this House will know that what is proposed here is not a precedent in any sense of the word. We have had many bills before this House that have provided for the security of employment. These were bills whereby the government was taking action to change jurisdictions, to change the employers, and in those bills were clauses providing that these people be taken on by the new employer without loss of seniority in many cases and certainly without loss of wages.
I can think of at least six bills in this House that I was involved in where these clauses had been included. The bill restructuring Hydro in the Niagara region provided that the employees of Ontario Hydro would be taken into the local hydroelectric authority and would retain their seniority without losing any status, including pay. The same was true for the county of York and the region of Muskoka, and I could go on.
8:20 p.m.
This precedent was set because the government had taken perhaps needed but arbitrary actions which put these employees out of work in the jurisdiction in which they had worked; it opened up another jurisdiction for them and guaranteed them their jobs. Why should we not do that in this case?
In the bill we have before us, the government has indicated that all the creditors will be secured. That is part of the bill. The bill does not state this, but we are aware that the Canada Deposit Insurance Corp., through pressure from this government and the opposition over a number of years, has increased the guaranteed deposit from $20,000 to $60,000 in order to give that kind of guarantee to the depositors in this case. The government has indicated it will do what it can under this legislation with regard to the shareholders.
Where do the employees enter into this picture? Should they not be given some kind of security when the government, in an unprecedented action, takes over a major trust company? We in this party think they should.
When it came down to it, the Conservatives wanted to secure the depositors and creditors, and so did we. It was the Liberals, in the motions which they put before the committee this afternoon, who said they wanted to insure the shareholders. I think any objective person would realize that amendment would probably destroy the shareholders rather than give them any protection. We did not vote for it because it was a meaningless amendment.
It would not have done what they said it would have done. In fact, the reverse would have been true. But they wanted to protect the shareholders, and so did we. It was this party, which is not unusual, which wanted to protect the 500 employees of this company and took action to try to do so. We think that is reasonable.
The member for Ottawa East (Mr. Roy) tried to belittle our stand by saying they can be fired or discharged for cause. He leaves the impression that somehow or other it will not work there for them. I am surprised, because he is a lawyer, that he is not very familiar with the labour legislation. That is not cause for discharge. When an employee is discharged for cause, it is because his work is not satisfactory or he has committed some misdeed.
Mr. Roy: Mr. Chairman, on a point of order: I want to ask the member for Welland-Thorold --
Mr. Chairman: This is not question period.
Mr. Roy: Just hear me out on this, Mr. Chairman. Is the member saying that if I say to an employee of mine at some point, "I am sorry, there is no more work," I cannot discharge him for cause? That is not cause? Is that what the member is trying to say? The socialists have taken over in this province, but not quite that far, have they?
Mr. Swart: The member for Ottawa East is trying to take a devious route because he did not understand the definition of the words "discharge for cause." That is the simple truth of the situation.
We had evidence that if action was taken quickly, Crown Trust would continue as an ongoing operation and would have a place for these employees. We just want to make sure that they, not others, get those jobs. Those employees have the right of security of those positions. Many have been there for five, 10, 15 and 20 years.
I hope the minister and the government members will reconsider this. When we come to the vote in one, two, five or 10 minutes, I hope they will support this reasonable amendment and at least give the same security to the employees that they are willing to give to those who have money in this trust company.
Mr. R. F. Johnston: Mr. Chairman, I am pleased to rise in support of the amendment put forward by the member for Riverdale on behalf of our party. I also feel constrained to welcome to the galleries tonight all the good citizens, parents and teachers of the city of Toronto who have come here wearing their Stop Bill 127 badges. Their presence here will not be forgotten when we are not speaking on Bill 215.
Mr. Ruston: That's grandstanding for you.
Mr. Chairman: Now that you have that on the record, back to the amendment. I might point out to all guests in the galleries that they are not to participate in any way whatsoever in the debate that is taking place on the floor of the House this evening.
Mr. R. F. Johnston: Mr. Chairman, as you know, it is not my style to be demagogic or a grandstander, as the member for Essex North has said.
The minister was formerly Minister of Labour. He is continually telling us that he is the minister of concern. He is the minister who brought us Bill 7. Some of us thought he might have disappeared after that, but he has resurfaced with this fine piece of legislation and this problem.
Hon. Mr. Elgie: I forget. Did you support that bill?
Mr. R. F. Johnston: I was one of your strongest supporters on that bill, as you know. I just did not think it went quite far enough and that is why I am so confused. I was not in committee this afternoon and the minister cannot have been there either. If he had been there, I am sure he would have lent his support to the motion by the member for Riverdale and would have decided it was time legislation protected employees in the same way as we are willing to protect investors and the assets of companies.
Why are employees in this province always the last to be considered? How many of us have had plants shut down in our ridings and had workers left without any protection?
Hon. Mr. McCaffrey: Same old speech.
Mr. R. F. Johnston: I will give the member my art speech again any time he wants it, I thought he enjoyed the last one so much. I will not talk about the cutbacks in the arts community in terms of how that --
Mr. Chairman: Order. You got away with it once. Do not push it.
Mr. R. F. Johnston: The other day I was raising with the new Minister of Labour (Mr. Ramsay) --
Mr. Chairman: Let us get back to the amendment.
Mr. R. F. Johnston: I am, Mr. Chairman. I was raising this whole business of lack of protection for employees. In my riding, a business called Konar was shut down. The workers were left at that point without any guarantee of their last two weeks of wages. I gather that has since been rectified, but certainly there is no guarantee of severance pay or holiday pay.
We have seen the creditors secured in this legislation. It is time the minister should at least put in these bare bones of protection for those employees who have worked long and hard for this company and who have the right to feel no less secure in their work as he saves this company than do the people who have invested in it or perhaps are profiting by it.
I say to the member for Ottawa East that, presuming this company is being taken over by a good Tory friend resident in Ontario as one would presume is going to be done, I can see no problems in terms of jurisdictional --
Mr. Roy: You don't see problems any time.
Mr. R. F. Johnston: I see many problems and the member for Ottawa East is one of the greater problems I have seen; and so is his attendance record, but that is another matter.
It seems to me the minister should protect these people. He should have it in writing. If he is going to turn it down, he at least owes an explanation to this House as to why that notion of social responsibility should not be written into this bill as he is taking social responsibility for investors.
I await the minister's explanation to his colleagues as to why they voted incorrectly this afternoon or his explanation to us tonight as to why he will not support those employees and support the motion put forward by the member for Riverdale.
8:30 p.m.
Hon. Mr. Elgie: Mr. Chairman, my remarks will be brief. There has been reference tonight to the issue of justice and equity. I do not want to do what the member for Scarborough West has done, or what the member for Riverdale has done, to refer to the fact that there is an audience here. I would not do that.
Mr. R. F. Johnston: I didn't mean to.
Hon. Mr. Elgie: I know the member did not intend to do it. But were I to recognize that there are people here in the audience with legitimate concerns of their own, I would not think they should be left with any misinterpretation about whether the aspects of justice and equity were involved in the government's consideration.
I think they should understand, as I think all of us do, that the government was faced with two options. One was an existing, legitimate legal option, which allowed for Crown Trust to go into liquidation, causing losses to depositors, total loss of employment, increased losses to the Canada Deposit Insurance Corp. and absolutely no possibility, on behalf of investors, to recover anything.
Faced with that and with the knowledge that a liquidator, under existing winding-up laws, in the face of an asset that was eroding or perishable, could sell that asset without reference to the court, the government said: "Surely it must be possible for men of good purpose, sitting in this Legislature, to devise a way in which the depositors can be protected, employment can be protected, CDIC's losses can be reduced and there is at least some option for investors."
That is the route we have taken, and that is what this bill is about.
Surely, if one wants to talk about the rule of law, one is talking about making certain there is a lawful process that one goes through to reach a law. That is what we are doing in this Legislature, subject to the democratic process here and subject to approval or disapproval, whatever the case may be, by the electorate.
There also was a reference to some rules imposed on us by the Canada Deposit Insurance Corp. I would not want to be associated with remarks which indicated that the CDIC had in any sense been punitive. I look on the role they have played as one of the very remarkable roles of federal-provincial co-operation in a common desire and a common effort to protect depositors to the extent that we are trying to do with this legislation.
That does not mean that the CDIC, a federal organization, does not have obligations within the limits of the statute it operates under, it does; but I say quite honestly that within those limits it has been a very fine example of federal-provincial co-operation.
On this occasion, as I have done publicly before, I pay great tribute to the employees of Crown Trust. Indeed, on my behalf, both the registrar and Mr. Biddell went to the employees last week to publicly thank them for the great contribution they were making to the ultimate salvation, we hope, of Crown Trust. So I publicly want to pay them tribute, as I have in the past.
The member for Scarborough West referred to my role as Minister of Labour and what some may laughingly call --
Mr. R. F. Johnston: Not me.
Hon. Mr. Elgie: Not him, I know. He would never do that; I understand that, we understand that. He meant it with every little ounce of sincerity he has in him.
He knows that this minister did a number of things in his life as Minister of Labour: union security; reform of the grievance arbitration system; introduction of severance pay legislation in this process; human rights legislation, fully and openly supported by all, I think there was general approval of that. I do not take any personal pride in that, but just to confirm what he so willingly said about the role that this minister has played.
As the member knows, the government is faced, as the Legislature is faced, with a situation of some degree of urgency. In the wide canvass that was made of possible purchasers who might be interested in acquiring the ongoing business of Crown Trust as the only viable option, the documentation sent out to those interested parties clearly says the government expected that a purchaser would make the very best effort possible to retain employees.
That does not mean every purchaser is the same. Some may be in Ontario; some may not be in Ontario. Some may need the offices here; some may not. One does not know that until one ultimately knows who the purchaser is. Members understand that.
What I have also said in committee, and I repeat here, is that having clearly said that in the documentation that went out to potential purchasers, the cabinet as the ultimate determiner of the purchaser will be reviewing the responses by purchasers to the material that was sent to them in that request.
Even though I agree with the intent and the principle, to put it in a de facto piece of legislation when the options before us are still uncertain, I say to the member, is an impossible situation for the government. As I have said before, we share the same intention. The government has said so in the documents it sent out to interested purchasers and, as we review the options available to us, we will continue to look at it from that point of view.
Mr. Renwick: Mr. Chairman, I just want to have a final opportunity to demolish the arguments both of the member for Ottawa East and of the minister on the question of the protection of the employees of Crown Trust.
The member for Ottawa East obviously does not understand the import of the bill. He raised two criticisms of the bill in committee and a third one here tonight. The first was that, immediately prior to the signing of the agreement by the registrar of this province, the registrar would terminate all the employees and, therefore, this would be ineffective.
We have sufficient good faith in what the minister said, that he dispatched Mr. Biddell and his own personal adviser on these matters and the registrar of loan and trust corporations to assure the employees of Crown Trust that they would be given every consideration. Undoubtedly they referred very clearly to the letter that went out to all the prospective purchasers of this company, saying they would be asked to put in the agreement a provision with respect to using their best efforts. It is precisely our concern that, once that agreement is signed and the acquisition of the assets takes place, the employees will not have any protection should something called best efforts not be used or if best efforts fall short of the kind of protection required.
The member also raised the question of other jurisdictions. If the agreement is with a purchaser who resides in another jurisdiction and the principal business is here, it is easily put into the agreement. If the purchaser is in this province, then the agreement will be a binding agreement between the government and that purchaser in clear and specific terms.
The member for Ottawa East raised the question of cause. One does not discharge people for cause because one runs out of work; they are given notice. This, of course, precludes the giving of notice in the first year of the employment.
The other point I want to make, again to the minister, is that it is all very well to say that we join together in wishing the employees at Crown Trust well. That is not what we are trying to say in this assembly. What we are trying to say is that we should give the employees of Crown Trust the minimum protection we will be providing when a bill that is on our books, Bill 195 amending the Municipality of Metropolitan Toronto Act, comes before the assembly. There is no magic in the language. It is an adaptation, as my colleague the member for Welland-Thorold (Mr. Swart) has said, of language we have used on other occasions.
When Bill 195, amending the Municipality of Metropolitan Toronto Act, establishes a new structure for the Canadian National Exhibition, we will have in that bill a specific provision saying that present employees of the CNE automatically will be offered employment in the new corporation for a period of one year. During that period, apart from being discharged for cause, they will be protected.
We are saying with respect to Crown Trust that at a time of economic instability and high unemployment in the province, during the period when there will be a transition of this business through to whoever the new purchaser may be, it is only fair and just that we in this assembly should have in the agreement precisely and clearly a statement of minimum obligation that everybody in that company who wishes to stay for up to a period of one year will have the opportunity to do so.
8:40 p.m.
Everybody pays tribute to the loyalty of those employees, and the minister knows that last Friday morning the current chief executive appointed by the government, brought out of retirement to run the trust company under the registrar of loan and trust corporations, came to us and read this specific letter on behalf of the employees in which he asked that they be given some assurance -- not a guarantee, but some assurance -- of protection in their employment in a very unstable situation.
All we are saying is that the amendment we have proposed tonight merits the attention of the House. It is not sufficient for this assembly to say to the employees, as the committee did, "We wish you well; we certainly stand behind you," and not be prepared to provide the kind of minimal protection reflected in this amendment, which on other occasions we have granted to other employees in situations where this Legislature has brought about a statutory change in their employer.
Mr. Chairman: All those in favour of Mr. Renwick's amendment will please say "aye."
All those opposed will please say "nay."
In my opinion the nays have it.
Motion negatived.
Sections 5 to 13, inclusive, agreed to. Bill 215 reported.
On motion by Hon. Mr. Wells, the committee of the whole House reported one bill without amendment.
CROWN TRUST COMPANY ACT
Hon. Mr. Elgie moved third reading of Bill 215, An Act respecting Crown Trust Company.
Mr. Renwick: Mr. Speaker, I would like to speak very briefly on third reading of the bill. I do not intend to keep anyone in the chamber long delayed or to tarry in my reasons for the comments, but I want to reiterate to the House that on second reading we had a fundamental difference with the government on the principle of the bill.
The principle on which we stood at that time and which we reiterate tonight is that we had expected the government to stand behind and guarantee the depositors, the investors and those having fiduciary obligations with Crown Trust Co. because it was an Ontario incorporation, it was an Ontario trust company, it had a long-established reputation, it was in a sense synonymous with the kind of Ontario that many of us thought the government shared with us.
We were convinced and we remain convinced that the regulatory framework of the government in some way did not carry out the kind of regulatory protection that the Loan and Trust Corporations Act provides. We took that position and we took it very clearly, and that is the difference in principle.
The government, however, decided very clearly that it was not going to put up a single penny to protect anybody either in cash or by way of guarantee in liability. What it decided it would do with respect to the depositors, the investors and those having fiduciary relationships with Crown Trust Co. was to say to them, "We will hold the fort until the Canada Deposit Insurance Corp. lets us know the terms and conditions on which it will come to the rescue of the depositors and investors and the other creditors of the Crown Trust Co."
What the minister speaks about as a wonderful example of federal-provincial co-operation is reflected in the letter which was finally extracted by the committee from CDIC so that we could understand precisely what CDIC was saying about the terms and conditions on which it would come to the rescue of those that this government would not rescue. That letter is dated January 31 and is addressed to the minister. It says:
"Dear Dr. Elgie:
"We are writing in response to your request that the Canada Deposit Insurance Corp. confirm its position with respect to the future of the Crown Trust Co. business and depositors.
"The Canada Deposit Insurance Corp. has the power to make or guarantee loans or advances to member institutions in cases in which such action will reduce or defer a potential loss to the corporation.
"With this in mind the Canada Deposit Insurance Corp. has agreed that, if there is no further significant deterioration of the Crown Trust estates, trust and agency business and deposit business, if an acceptable person to take on responsibility for the business assets of Crown Trust is ready, able and willing to do so on terms acceptable to Canada Deposit Insurance Corp., and if a suitable lawful basis exists for such a transaction, Canada Deposit Insurance Corp. will take the steps necessary to see to it that funds are available to enable all depositors and normal trade creditors of Crown Trust to receive their moneys when due.
"From the standpoint of Canada Deposit Insurance Corp. and its responsibilities and in the general public interest, it is clearly desirable that the loss of value of assets and inconvenience to the customers of Crown Trust be minimized. Both costs and inconvenience mount rapidly as time passes and Crown's operations continue to be restricted. In light of this, it is urgent that normal service to depositors and other customers of Crown Trust be resumed as soon as possible."
That letter is as clear as can be. The Canada Deposit Insurance Corp., in default of the government's assurance to the investors and depositors and the other creditors of Crown Trust, has simply said three conditions must be fulfilled or it will not provide the funds for that rescue. One of the conditions is that suitable lawful basis exists for such a transaction, and that is why this piece of legislation is in front of the assembly.
Within the framework the government imposed on the transactions that were to take place, it was not in any way possible to amend the bill in committee to reflect the difference in principle on which we parted company.
Our view was that the government should have established itself as the continuing corporation with respect to the Crown Trust business; that it should have taken over the Crown Trust business, got whatever assistance CDIC would give to it and, over a period of time, sold down its interest to either 50 per cent or 10 per cent so that the government would have been seen in the eyes of the public to have stood behind a financial institution for which this government was responsible in every respect. It is the failure to follow that course which leads us to depart from the government on the principle of the bill.
I simply wanted to take a few minutes to comment on our position on third reading so that there would be no misunderstanding about it.
8:50 p.m.
Mr. Breithaupt: Mr. Speaker, looking back at the debate on the principle of this bill, you will recall that members raised with you at the time a variety of themes concerning the legislation and our view with respect to its adequacy. At that point there was clearly a need to proceed with the bill at a reasonable pace, one that would accomplish the ends which the government had decided and would give this Legislature its obligation and duty to deal with the bill in an appropriate and measured way.
That debate began on Thursday last; since then the standing committee on administration of justice has had the bill referred to it, and that committee has had the opportunity of some lengthy discussion. That discussion, which took place yesterday and today, has brought out a number of themes that were not theretofore known to the members of the Legislature.
It is true that some things a number of us had hoped to see and perhaps accomplish during that debate were not fully realized. But I do think the time the committee has spent and the opportunity for the bill now to be back before us on third reading has not in any way untowardly delayed from the general public perception the commitment the government made some time ago to proceed with Bill 215 after it was introduced a week after we had returned for this session.
We certainly have found a number of inadequacies in this legislation. In the 12 amendments that I first tabled before the standing committee on administration of justice, there were a number of themes that we thought would improve the bill. Indeed, it is regrettable to me that those amendments have not been accepted by the government. So we have found the principles that I thought should be included in our second reading debate have not been entirely accomplished. With regret, accordingly, we will not be able to support this bill on third reading.
Mr. Swart: Mr. Speaker, I want to say a few words, again on the principle of this bill and the reasons we in this party opposed it on second reading and are going to oppose it on third reading as well. Simply put, we are not prepared to put the stamp of approval on the government negligence that brought this about. There is no question that there has been government negligence.
After sitting through that committee and hearing all the explanations by various people, we know very well that this was initiated by the flips of the apartment buildings. It came out very clearly that these flips of the apartment buildings, which escalated their value from $270 million to $500 million, were made on the basis of rent review legislation that at that time would have permitted the pass-through of this tremendous increase in interest and capital costs over the years.
The government knew about this problem months and years before this time. They knew there had been other flips, although not of this magnitude, but they took no action whatsoever to plug that loophole in the rent review legislation and, therefore, it was used by unscrupulous financial manipulators who built this value up to $500 million so they could pass it through to the tenants.
Then the Ontario government passed legislation that prevented this from happening. They had no alternative at that time if they were going to give any protection to the tenants at all. We found these companies in a very difficult financial position where they did not have the assets to secure the deposits they had in the trust companies, and Crown was one of those.
There is no question that this was brought about by the inadequacy of government legislation. It was legislation they knew was at fault: that had been brought to their attention time and time again.
The second area of negligence is one that we have witnessed. Those who have been around this House for a few years have witnessed the negligence in the investigation and policing of the loan and trust corporations and the other financial institutions. Need I remind anyone of Argosy, Co-Operative Health Services of Ontario, Re-Mor Astra and now Crown, Greymac and Seaway? These are financial corporations that have all gone under or are going under, not because of the economic conditions we have at present but because there are people who are involved in them who had control and who were attempting to manipulate those companies to get a ripoff, if I may use that trite expression. It is very true. That is the reason all these companies have gone under, and this government has been negligent in not providing adequate policing of them.
In spite of that negligence, we might have been ready to support this legislation if there were no alternative; but, as my colleague the member for Riverdale (Mr. Renwick) has said, we felt there was a very reasonable alternative. It has been put forward a number of times since this Crown Trust fiasco became evident, so that there would not be a run on the trust company. We said the minister or the Premier (Mr. Davis) could simply have made a statement that they were going to guarantee the deposits and the creditors; that would have stopped any run from taking place.
As my colleague has said, the government could have gone on in an orderly manner, managed this, sold off its interest if it wished to, or kept it, as some others have said, as a crown provincial trust company. That perhaps is not too important, but that alternative seems preferable to the alternative we have before us. That alternative was not taken up primarily because the government made a decision that, in spite of its negligence and in spite of being at fault, it was not going to put a penny into this. It is all right for the Canada Deposit Insurance Corp. to put money into it; but the Ontario government, when it was admittedly at fault, is not going to put any money into it.
Today in the committee we had this verified by no less a person than the minister himself. Apart from the costs that have been involved in the takeover and some costs that are involved in the Morrison commission, the minister says the government had no money involved and does not intend to have. It has used this other alternative, which we suggest is a less satisfactory one, when there was a better alternative available but one that would have to some extent forced the government to admit its liability and negligence in this matter.
There is one other grave concern that we in this party have with regard to what is taking place and will take place as a result of this bill. We all know that the adviser to the minister was Mr. W. A. Macdonald. Those of us who sat in the committee realized he was a spokesman for the government. That is no exaggeration. He was a spokesman for the minister and the government in this matter. We also know that he is a director of Victoria and Grey Trust, one of the companies bidding to take over Crown Trust and one that appears to have the inside track. There are other people in Victoria and Grey Trust who have held rather high positions in the Conservative Party.
Mr. Sheppard: What's wrong with that?
Mr. Swart: The honourable member may see nothing wrong with that, but it seems to me that if the federal government is going to be putting in $200 million of public money, just because somebody has some political connections or has sat as adviser to the minister he should not have the inside track on taking over Crown Trust. That is what I see is wrong with that, and I think it is very wrong. I think the public of this province will think it is very wrong if that is what happens in the end, and it appears there is a good chance it will.
The government chose the route it did to deal with this matter; if it had not chosen any route, if it had just let it go, I think we all know the end result would have been that the depositors would have lost most of their money. We think the government chose the wrong route but, because it chose that route, we expedited the clause-by-clause stage in committee and we are expediting this bill through the House at this time so that it will give a substantial degree of security to the depositors and the creditors, but not much to the employees and perhaps nothing to the shareholders.
We think it should have been done in another manner, but we have not attempted to impede the government's action in this regard, recognizing that some step was absolutely essential and that it had to be done quickly.
9 p.m.
Mr. Wrye: Mr. Speaker, I will be brief. I want to indicate to the minister that I regret very much that I will be joining with my colleagues to vote against this legislation on third reading. I regret I will be forced to do so because my colleagues and I have fought for many months as strongly as we could on behalf of the depositors of Crown Trust, Greymac Trust and Seaway Trust.
We have fought in committee in the last few days, and in this House during second reading on this legislation, not just for the depositors but also for the preferred shareholders of this company.
We have also fought for another important principle, the principle of the rule of law. I regret deeply that the government, in bringing in this legislation to help cover its negligence, a negligence that traces its way back well over 15 years in protecting the depositors in trust companies in Ontario, has not chosen to follow the rule of law in Bill 215.
In moving to protect the 1,000 or so depositors, which I understand is the number who stood to be major losers in this matter with Crown Trust, I regret the government has failed to understand that the preferred shareholders, many of whom have put small amounts or their life savings into what they thought was a safe venture with a comfortable rate of return, have been in effect left hanging out to dry with no real concern on the government's part other than to suggest, "If you play the market, that is what will happen to you."
It seems to me the Premier made that suggestion the other day; even for the preferred shareholders, that appears to be lack of concern by the government.
I want to say also that the end of the Crown Trust matter tonight leaves two very important matters hanging: the futures of the depositors of Seaway Trust and Greymac Trust.
I think it is time the minister begins to look at them and their plight. There are many hundreds of millions of dollars involved with those two trust companies. Indeed, I am told the borough of East York has $500,000 invested in Greymac Trust. Unless this government moves to protect the depositors of the other two trust companies, the borough of East York is one of the many innocent depositors that will be left holding the bag because of the government's negligence.
Finally, I regret that throughout this affair the government has not seen fit to move in what I consider to be ultimately the most important aspect in the long term for all the depositors and shareholders of every trust company, every caisse populaire and every credit union in Ontario. We stated that demand many months ago when, as my friend the member for Welland-Thorold (Mr. Swart) mentioned, this affair first started with the bold move on Cadillac Fairview which brought the affairs of Leonard Rosenberg to the attention of this ministry, albeit unbelievably late. The government should now move to establish a public inquiry or a royal commission into this whole matter.
It is not sufficient to have little bits and pieces, to have a study here and an investigation there. What is needed is a thorough airing of 15 years of negligence, 15 years of a government that constantly, time and again, has been asleep at the switch.
To sum up, I regret that I will be joining my colleagues in not supporting this legislation. I believe we in our party have acted in a responsible and expeditious manner since we have had and continue to have the greatest concern for the depositors at Crown Trust. We only wish the government had shown the same concern many months ago so that we would not be having this debate tonight.
Mr. Cunningham: Mr. Speaker, it really is ironic that here we are on the first day of February debating third reading of Bill 215, when only two years ago at this very moment we were engaged in the windup of the Astra ReMor matter before the justice committee, a committee that was accused, at least at the outset, of being the contemporary version of the Star Chamber. I think those are words from the then member for Cochrane South, and they were indelibly in my mind as we contemplated that particular matter.
Bill 215 is as philosophically repugnant to me as Bill 127 is, and it is about to become law. I believe that we as members of the Legislature are not for a moment contemplating the great and massive responsibilities we have as members towards property rights in this regard.
I want to say at the outset that I personally have very grave reservations about the conduct of one Leonard Rosenberg and some of the people he was associated with in this matter; but as grave as my concerns are and as serious as I am about it, I do not for a moment demean the right of Mr. Rosenberg in the province of Ontario, in this great country of ours, to due process. I am afraid -- and I say this regretfully -- that the powers in Bill 215 remove those privileges in law, privileges that each and every one of us as Canadians should expect.
I want to express the concerns I have about this process. It was not that long ago -- and I said this in the course of committee, but I want it to show on the record here -- that probably each member of the Legislature was approached by members of the Ontario Real Estate Association, at the very minimum with regard to alleged deficiencies in the Charter of Rights in our new Constitution. They spoke very clearly and succinctly about the alleged inadequacy of the charter and its weak sections pertaining to individual property rights.
Like other members of the Legislature, I responded to those inquiries; and I must say that, maybe naively, I wrote back to many people saying that I did not foresee in this country of ours an occasion where one's individual property would be in any jeopardy as a result of some capricious action by any government, be it the provincial government, municipal government or our federal government. I did not foresee, as short a period of time ago as it was, this kind of reality coming to pass, particularly in good, old, free-enterprise Ontario. Frankly, it was beyond my comprehension; I did not contemplate it for a moment. Much of that, of course, was contained in the responses I directed to constituents and to people in my community who wrote to me with that in mind.
During the course of second reading, during introductory statements and during the course of the committee activities, the minister indicated that what we were doing was within our purview as legislators, that what we were doing was not at variance with the charter. I want to say clearly that I have no argument with the minister in that regard. It is clear from some of the legal opinions we have had that perhaps this is not at variance with the charter; it certainly is not inconsistent with the powers we have as legislators. We conceivably could add a day to the week. It would be nice, maybe, to put it on the weekend. We could force people to drive on the other side of the road or to paint their cars or houses a different colour. We even could make Bill 127 law, although most of us hope that does not happen.
9:10 p.m.
We have a very serious and grave responsibility to the people who sent us here. It is simply not good enough to say that our stewardship will be judged at some time down the road by the electorate and that will be the vindication of our conduct. If one, two, a dozen or even 1,800 preferred shareholders are aggrieved in this matter and are not able to seek recourse legitimately through the courts, then we have done them a grave injustice.
Members of the committee were favoured with a hand-delivered copy of a letter dated January 31, 1983, from Dominion Securities Ames Ltd., directed to the Minister of Consumer and Commercial Relations (Mr. Elgie), and I would like to quote part of it for the record:
"On behalf of many clients for whom we manage portfolios, we wish to lodge a rigorous protest against the apparent lack of concern on the part of your government for legitimate rights of preferred shareholders of Crown Trust Company.
"Following passage of proposed Bill 215, An Act respecting Crown Trust Company, it is our understanding that the assets of Crown Trust might be arbitrarily classified 'hard assets' and 'soft assets'. It is our further understanding that the so-called 'soft assets' would be allocated to shareholders, preferred and common. Various reports suggest those assets to be of dubious value.
"Such an arbitrary allocation of assets runs counter to existing legislation in Canada, whereby creditors and shareholders have legitimate claims on a company's assets, in a prearranged order. All of the net assets are available for such distribution, without segregation of hard versus soft.
"Any alteration of that prearranged order has profound implications for investment practices in Canada. Not only preferred shareholders but even high-ranking lenders of debt obligations would have to rethink the basic underpinnings of their asset claims.
"It is very disturbing to witness the classification of preferred and common shareholders together, without recognition of these very fundamental differences between the two. The preferred shareholder invests for income and capital safety; the retraction feature of the Crown Trust preferred was certainly believed to enhance the capital safety of that particular investment. Particularly when investing in the trust industry, the investor is comforted by the knowledge that the industry is a regulated one and that one's government, through its representatives, is ensuring that proper business practices are being followed. One wonders, given the apparent precipitous decline of Crown Trust in a matter of weeks, whether some neglect on the part of our regulators might have been involved.
"If the proposed government action involves unfair practices for preferred shareholders in general, they are particularly disturbing for Crown Trust preferred shareholders when one remembers that the original issuance of those shares was in exchange for the very real and very 'hard' assets of Canadian Realty Investors, just 12 months ago.
"Finally, we view with alarm the denial of natural justice that is implicit in item 10(1) of Bill 215, which protects the Registrar from actions or proceedings related to the wielding of his wide-ranging powers.
"We hope due consideration is being given to the issues we have raised, and we hope the legitimate rights of the preferred shareholders will not be jeopardized."
The letter is signed by the president, Mr. Andrus.
The Minister of Industry and Trade (Mr. Walker) makes protestations about the alleged effect all this would have on potential Saudi investors, but this arbitrary action by the government will have a far greater effect on future trading in the province, on the general investment climate and the view others have of us not only for our obvious and ongoing inability to regulate the affairs within that small section of the ministry -- and I could recite a litany of events, but I will not -- but for the very notion that we would entertain a bill such as Bill 215 with the arbitrary features to which I have referred.
Before this evening becomes history, I expect we will see this bill become law. Before too much time has passed, I am sure royal assent will be given. Then the minister will be on the hook to make good and to verify the ongoing necessity that was presented to members of the committee, not only in the Legislature but by way of counsel, Mr. Macdonald, who only yesterday, in what I regard to be a rather threatening gesture, indicated that already because of the delay that had gone on, which I would suggest the government may well have been responsible for, one mysterious, unnamed investor or a potential suitor, as he referred to it, was now unwilling to partake in this game that is being played.
I want to say as clearly as I possibly can that the ball is going to be in the minister's court from the date and time of royal assent on and he is going to have to make good those premonitions and at the very least ensure that the most appropriate suitor -- if I can use the word -- is found.
I would expect when the bill becomes law or when third reading is granted, there will be some thumping of the desks in support of our good friend the minister. I would hope that endorsement has more of a personal flavour than it does an endorsement for what we are doing here today and the arbitrary trampling of property rights that is inherent in this bill.
I believe we in the opposition parties have acted responsibly. Albeit our views are contrary to the government's disposition in this matter we have put them objectively, not only in this House and in the debate but through a series of amendments that were not favoured during the course of committee debate. Our principle here, our opposition, has obviously been tempered with the sense of urgency that we must take from the minister and his surrogates in the course of good faith that I must say has not always been reciprocated during the course of this debate.
The final thing I would say is if we are going to entertain an item of legislation that is going to assist the depositors of Crown Trust, and we all hope they are compensated, it is incumbent on that minister to stand in his place on the earliest occasion and introduce an act respecting Seaway Trust and Greymac Trust, and also possibly compensate the victims of Astra and Re-Mor who have been waiting these two long years, if not more, to obtain the compensation the Ombudsman has suggested the government pay.
It is simply not good enough for the minister to stand in his place, introduce this legislation and expect that one particular class, not the preferred shareholders or the common shareholders but those depositors, be compensated and ignore his responsibility to meet the thing as it relates to the gross negligence that is going on within his ministry and ignore his responsibility to the Greymac and Seaway depositors. Before we deal with Bill 127 or anything else, I would expect that we would entertain such legislation respecting Greymac and Seaway.
[lnterruption]
Mr. Speaker: Order, please. I just draw to the attention of our visitors in the gallery that they are not to participate or demonstrate in any way at all. Thank you.
[Interruption]
Mr. Speaker: Order.
Mr. McClellan: Mr. Speaker, I am pleased to be able to make a few brief comments on the third reading debate of Bill 215. For a variety of reasons, I have not had an opportunity yet to participate in this debate and I had a couple of observations that I wanted to make.
First, with respect to the minister's style, I think it is not uncharacteristic that the minister got into so much trouble on this bill. I hope he has learned his lesson. He did not learn it on Bill 158. Does the minister remember the first amendments to the Ontario Human Rights Code he tried to bring in without consultation or sharing? The minister will remember that word. If he had shared more information earlier on in the process and if he had been more upfront, he would have had infinitely less trouble with this legislation.
Mr. Nixon: Are you making notes, Bob?
Mr. McClellan: A word to the wise is sufficient perhaps.
It is interesting how the government managed to get itself out of the mess that it got itself into. The financial community moved into the ministry and took it over. Nothing has been more interesting than to watch the minister, his senior officials and the senior officials of the ministry abandon their offices in order to make way for Mr. Macdonald, Mr. Biddell, Touche Ross, Woods Gordon and all of the other people who were brought in from Bay Street as part of the bailout operation.
9:20 p.m.
It really raises very fundamental questions about what is happening in this ministry. It has been absolutely clear to all members of the opposition, I am sure in both parties, Liberals and New Democrats, that Mr. Macdonald has been the de facto minister of the ministry throughout this whole affair. I think that speaks to a very profound problem within the Ministry of Consumer and Commercial Relations, and we will watch with interest as the months unfold to see whether this minister is going to be able to do what former ministers -- the member for Scarborough Centre (Mr. Drea), the member for London South (Mr. Walker), the member for St. Andrew-St. Patrick (Mr. Grossman), John Clement, etc. -- all the others -- have failed to do.
I must say I am pleased this bill is reaching its denouement tonight. I have to say that my constituents have other concerns. The people I represent are more concerned about the fact there are 750,000 men and women out of work in this province than they are about this particular fight within the financial community within the establishment. I hope most sincerely that now this legislation is off our plate, this Legislature and this government will turn their attention to the really critical problem facing the people in this province, and that is the fact we are in the middle of the worst depression we have had for the last 40 years. I hope now we can come to grips with that in a more serious way. One of the real scandals of capitalism is that this kind of fiasco can be taking place in the middle of a depression, that hundreds of millions of dollars can be moved around magically in a totally nonproductive, speculative way.
I do not pretend to be able to understand all the ins and outs and complexities of the $500-million Cadillac Fairview deal, but I know that all the moving of that $500 million around among Greymac, Seaway and Crown Trust, Kilderkin and the 60 numbered companies did not produce a single job in Ontario. It was all Monopoly money; it was all speculative nonsense; it was all nonproductive investment. It did not put a single person back to work, did not put a single machine in a single factory, did not build a single appliance, did not make a single suit of clothes, pair of shoes or anything useful. It was totally useless speculative nonsense.
In the middle of a depression, when 750,000 people are out of work in our province, these clowns move around $500 million for no productive purpose at all. I do not have the text of the bishops' statement, but I do remember the bishops particularly directed their attention, as one of the moral disorders of our society, to the scandal of speculative investment as opposed to productive investment. They called upon government to make sure, through its own leadership and authority and its planning enterprises, that capital is put to productive purposes in our society and not to the kind of folly and nonsense that has preoccupied this assembly for the last month and a half.
Finally, the minister, in his inimitably charming way, has told us in various threatening ways, sometimes pleasantly wheedling and cajoling, sometimes in a manner reminiscent of a blackmailer, that we had to pass this legislation and we had to pass it now. We had to pass it yesterday or last week, but we had to pass it immediately in order to protect the investors. We have to protect the investors. Protect them from what? Protect them from the loopholes in the rent control law that enable a company to remortgage its buildings by selling them and passing the costs on to the tenant? I moved a amendment in 1976 that would have forbade landlords from remortgaging and passing those costs on to tenants.
How many times is a tenant supposed to pay for his own apartment? Is it an infinite number of times? Is it once, twice, five times or 10 times? It is nonsense to expect that kind of speculative investment to be borne on the backs of tenants. That is one of the loopholes that has not been plugged or closed. That is one of the things this bill is designed to protect the depositors from.
The other thing this bill is protecting the depositors from is this government's own negligence, its failure to regulate the trust industry in the litany of collapses, scandals and debacles as long as one's arm dating back to the 1960s. The recommendations are all there in various documents, royal commissions and studies of select committees.
Everybody knows a trust company should not be something that can be bought and sold by every red-hot speculator who comes down the street. One cannot buy a bank. One cannot buy more than 10 per cent of control of a bank. Why should some hotshot be able to buy a trust company? Crown Trust has been bought and sold four times in the last six years. It is my understanding that virtually all that speculation has been nonproductive.
What good did Conrad Black do with Crown Trust except use it to gain control of Massey- Ferguson and then run Massey-Ferguson into the ground? What about my constituents who work at Massey-Ferguson who are still on the street? There are 1,300 workers on the street as I speak. They have been laid off for a year and a half. Part of their problem, not all but part, is Massey-Ferguson was simply one more in a series of almost infinite pawns by the hotshots, whether they are Conrad Blacks or Leonard Rosenbergs.
Mr. Nixon: Do not forget Montegu.
Mr. McClellan: How could I forget Montegu? We will wait to see whether this minister has the slightest intention of dealing with the issues of ownership, ripoff speculation, instability of the trust industry and loopholes in rent control. This is simply a stopgap measure. As the minister says, it will protect the depositors but it will not solve any of the problems that have been festering for the last 15 years.
I say to the minister that the clock has run out. The trust industry is so destabilized by this fiasco that unless the minister acts within a number of months, if not weeks, there will not be a man or woman with any degree of rationality who would put a nickel into the trust industry.
We will wait to see whether the bailout so generously provided to the minister by Bay Street has any lasting effect or whether this is simply a prelude to some kind of final Armageddon for the trust industry.
An hon. member: It is pronounced Armageddon.
Mr. McClellan: I prefer the Greek pronunciation.
Mr. Roy: Mr. Speaker, I want to make a few brief comments before the passage of this bill. My colleagues have mentioned what we are forced to do when there has been negligence in the past. They have talked about the previous trust companies.
I see the minister shaking his head. I have seen the litany of his predecessors on second reading of this bill saying they had nothing to do with this. They said they have clean hands. The fact is that the minister's failure, the government's failure and the ministry's failure to properly regulate and keep an eye on them, and to accept recommendations in the past, has led to this terrible precedent we are passing here this evening.
It is unfortunate that in the process the minister has seen fit not to accept any of the proposals this party has put forward, none of the conditions that were suggested and which he should consider. I am not talking about the amendments. He accepted some amendments. I think that was to save face in part. How can the minister refuse an amendment which inserts the word "reasonable" -- reasonable compensation or reasonable remuneration? He cannot object to that.
But the minister refused to give a commitment. He said, "We want to protect the depositors of Crown," but he refused to give a commitment to the depositors, for instance, of Greymac and Seaway. Then we asked, "Why not establish a royal commission so we can start afresh and review this fully, impartially, to determine what happened and to take steps to see it will not happen again?" Of course, he refused. We understand that, because a royal commission would have pointed a finger at this government and this ministry, and he is afraid of it. We understand that. Those are the political implications of the process.
9:30 p.m.
Then we said there should also be some protection for the preferred shareholders. They have refused to accept that as well. Let there be no misunderstanding about this legislation. We have a process. We are not here to defend the Rosenbergs of this world. We have taken strong objection to some of the actions of these people. The fact is that with Bill 215 the government is establishing a precedent that will make it very difficult in other tight situations not to exceed the bounds of justice, fairness and equity.
What is the process? In this case, it is simply that they confiscate property without compensation. Then they decide what is good -- the hard assets -- and what is not good -- soft or questionable assets -- and divide that up. They find a buyer for what they call the hard assets and give them all the necessary protection under Bill 215. They leave the previous owner and preferred shareholders with the soft assets. That is basically what is being done. It is that simple. They confiscate, divide, and sell it.
The final blow of this whole process is that they say there are no provisions for any judicial review or the rule of law in the process. It is that simple.
In Ontario in 1983 there are still people in this assembly, there is still an opposition party that believes in the rule of law, in judicial review and in the process. As much as we want to protect the preferred shareholders and as much as we want to see to it that innocent people are not hurt in the process, it is impossible for us to give the government carte blanche and say they can proceed with this radical and sweeping legislation and not be accountable to the courts or to the rule of law. To us, that is unacceptable. It is a fundamental difference that we have.
The minister said the rule of law in a process is very simple. "If we bring forward a bill and pass it democratically, that is the rule of law." That is what the minister said to us in committee. The second reason he gave is that the purchaser must have a valid and clear title. It must be unencroachable, etc. We believed that and were prepared to support legislation guaranteeing that.
But when we get a ministry and a minister who -- I am not saying this particular minister; certainly the government and this ministry have not shown the type of judicial enlightenment for the type of regulatory watchdog approach to this process that it should have. Given this situation and the minister's refusal to accept some of the conditions we asked for and in the process proceed with such sweeping legislation, we feel it is unfair and unjust, and I do not think we would be doing our jobs if we supported this type of legislation.
Mr. Ruston: Mr. Speaker, I would like to speak very briefly on this. Prior to coming into this Legislature I was in a position where I was under the direction of people involved in the Loan and Trust Corporations Act. We had inspectors come in regularly to look over our books and see that our investments were proper and so forth. I thought that was great. I felt good that we had someone checking our investments to make sure we were at least within the range of the law. This goes back to 1964-68.
The president of our co-operative sometimes felt we had a lot of money invested and in the next three or four years we would be out of business because medicare was coming in. He would say, "Let us not raise our premiums too much, because we want to slow down our investments so that when the time comes to fold up we will not have all these investments still on hand."
People from the inspection department would say, "Yes, but you have to have so much on hand for each year." In the insurance business we need to build up for the next year if we are collecting premiums on a yearly basis. For so many months the premiums are based on the income.
That was fine, but something happened somewhere along the line since that time. One can almost add it up to the day the Premier (Mr. Davis) was elected to that office. From 1960 to 1970, the government seemed to be operating under a real business administration, but for some reason or other, on the election of the present Premier, the thing just kind of rolled along. Nobody seemed to know.
I think it is the member for Grey-Bruce (Mr. Sargent) who asks who is minding the store over there. That is what we seem to have seen in this ministry over the last number of years, partly because the minister changes every year. It is a hotchpotch ministry, with all kinds of different jurisdictions it looks after -- maybe too many; that is probably one of the problems. I do not think a minister was ever in the job long enough to really find out how the whole operation worked. That has probably been one of the problems.
We had Astra and Re-Mor and everybody else mentioned. I suppose maybe Co-operative Health Services of Ontario even had some of our money in there because all the small co-ops, their assets or whatever was left, went into the head co-op. There was probably still some there that we had put in when it went bankrupt through lack of investigation and lack of inspectors going in and seeing what was going on.
I had a call from a constituent of mine on Sunday evening and he said he had read the Financial Times of January 3, 1983, which said one of the big winners for preferred shares in 1982 was Crown Trust. So he called his broker, Nesbitt Thomson and Bongard Inc. of Windsor, and asked about these preferred shares and they said it was a good buy, and he said, "Are they not involved in some apartment buying in Toronto now?" I guess the fellow told him it just had to do with rent controls and so forth, nothing very much, so my constituent put all his savings into 1,000 preferred shares -- class B, I believe -- of Crown Trust. Now he is out in left field. It is not good, but he is left with what has come about now.
Sure we know that the depositors come first under the Canada Deposit and Insurance Corp. Normally the preferred shareholders come second, but the lack of proper inspection of this trust company over the last six months or a year, if we look over some of the reports the last six months especially, is when the downfall occurred. It caused difficulty for people like this who had a great deal of trust in the company. Many school boards in our area have great amounts of money deposited there. People are misled when we say it is a trust company. Maybe we should just say, "We administer your money for you and we do not say we are a trust company."
9:40 p.m.
I had a meeting just the other day with some people in the ministry with regard to cemeteries. We now have our money for a cemetery in the credit union and the local bank, and they were saying: "You have got to put it in a trust company. It has got to be set aside there and just use the interest from it." Our treasurer does not like trust companies -- he never has -- and he thinks it should go into the bank, but the government says it has to go into a trust company. We are working on that now.
If the minister is going to have trust companies licensed by the province, then it is his responsibility to see that the people are protected by him.
Mr. Di Santo: Mr. Speaker, I would like to contribute briefly to the debate, since I did not have an opportunity to speak on second reading. I would like to echo my colleagues who spoke before me in opposing the bill.
What the government is trying to do with this bill is, in its own words, to protect the depositors. As my colleague the member for Bellwoods (Mr. McClellan) said, protect them from whom? Certainly not from the opposition members of the Legislature. Certainly not from the general public of Ontario. Probably they are protecting the depositors from the negligence of the government, which was supposed to supervise the operations of the trust companies involved.
But above all I think the government is trying to lay to rest an issue that is very important for all of us in the province and could potentially create many problems for the Conservatives and their friends in financial circles. In fact, what the government is trying to do, as other members have said, is to take the best part of Crown Trust Co. and transfer it to other Tories who are owners of other trust companies and then leave the part of Crown Trust that is not good, the soft assets, to Rosenberg, who obviously does not belong to the establishment of the Conservatives who are in the trust company business.
The government probably thinks that if it can pass this bill, if it can sell the good part of Crown Trust to its more reliable friends, to the friends who belong to the establishment, to the really blue Tories who are reliable and will not do the same things that the naughty boys did with Crown Trust, Greymac and Seaway, everything will be as before or, as the minister said, "It will be business as usual."
But it will not be business as usual. I am not an expert, but what the crisis of the three trust companies involved -- Crown Trust, Greymac and Seaway -- tells me is that the law of Ontario can allow a group of adventurers to use the money of the trust companies for their speculations.
I remember quite clearly that one night Mr. Rosenberg said on TV: "I am a speculator. Is that illegal in Ontario? Is this not a free enterprise province any longer?" That is the trouble we have had in Ontario for a long time; speculators or adventurers with the ability to take over trust companies have been able to use the money that people had deposited with the trust companies because they thought they were trust companies. That money was probably used for speculation and financial operations that we have no knowledge of.
The government, by refusing a public inquiry, is not protecting the depositors. It is protecting an establishment that is untouchable. It is protecting an establishment of friends who are behind it and who use the money in most surprising ways. The other night I heard on TV one of the most authoritative Tories, Dalton Camp, say that offshore money was used in Winnipeg to dump Clark.
Of course, we will never know about that money any more than we will know what transactions have been carried on in Ontario with the money of the trust companies. The reason the government is so opposed to a public investigation is that if we had a public investigation many of the minister's friends at the Albany Club would come out in pretty bad shape. That, of course, would not be acceptable to the government of Ontario.
I think that is despicable, because they are pretty able manipulators of public opinion. They may convince the public that what they are doing now is in the interest of the depositors. But we had the Astra Re-Mor affair two years ago, we have had Crown Trust, Greymac and Seaway and we will have other episodes such as these because there are adventurers who are able to use and abuse legislation that does not protect the depositors and allows people who are without scruples to use the trust corporations for operations that are either illegal or on the edge of illegality.
If the government is not willing to change the rules, then it will be forced to come back again and again to deal with similar situations. This legislation is not intended to protect the depositors. It is an attempt to bail out some friends who are temporarily in trouble, but it will not solve the problem.
That this legislation is only for the purpose I have mentioned is emphasized by the fact that the government, in the seven years since 1976, never acted in haste when we on our side of the House denounced the many resales of apartment buildings which were taking place in Metropolitan Toronto in which the new owners were able to transfer to the tenants the refinancing costs of their purchases.
I remember on many occasions going before the rent review commissioners, who said time and again that they were unable to prevent the new landlords from transferring the costs to the tenants because that was the law. The government never thought that it was necessary to protect the tenants.
9:50 p.m.
This whole fiasco did not originate because 11,000 apartments were sold and 11 ,000 families were put in a position where, if the deal had gone through as originally designed by Mr. Rosenberg, Mr. Markle and the other people involved, the tenants' rents would have been increased enormously. We know the government would never have taken any steps to protect the tenants, but it had to intervene on account of the financial implications, because hundreds of millions of dollars were moved. As the minister said, not even the financial experts, the Bay Street people who were called in, could identify where the money was.
We think this kind of bill also speaks to the failure of the government to come to grips with the real problems of the province. We are in a situation where we had Bill 179, a bill that froze the wages of all the public employees of the province because the government said the province had to fight inflation on their backs. We have daily cutbacks in social services.
We have increases in property taxes. All residents of Metropolitan Toronto now are receiving their property tax bills, and the government is increasing taxes on people who are unemployed, on senior citizens and on people with fixed incomes.
We have an incredible and unprecedented crisis in the construction industry. We have 50,000 people unemployed in Ontario, with no hope that the situation will change during 1983.
We have an erosion and deterioration of the manufacturing industry in Ontario that will not be solved in the short run and in most cases it will determine the end of long industrial traditions in many cities in Ontario.
The government has never responded to any of those situations. Yesterday, and last week, the leader of my party asked the Premier what kind of long-term jobs his government intends to create in Ontario and what plans it has. Of course, the Premier was unable to outline a single program. He is famous for his great memory, but he did not remember what he said last summer at the first ministers' conference when he said jobs were the priority.
We know the government hopes there will be an upturn in the American economy and that somehow, because of the magic in which we do not believe, they will pull us out of the depression. The government thinks it will convince the people of Ontario that what it is doing with this bill is important to defend the depositors and the investors. By the same token, it thinks it will be able to convince the people of Ontario that, even if it does not face and handle the economic problems that are the major priority for the workers of Ontario, nothing will happen. They are dead wrong. For this reason, we will vote against the bill.
Mr. Kerrio: Mr. Speaker, I rise to add some comments in relation to this bill. I do not envy the minister the job he has as an apologist for a succession of ministers who have allowed the people of Ontario on many occasions and with many companies to have their hard-earned dollars taken from them.
The reason I suggest the minister is an apologist for the other ministers who went before him is the fact that many things could have been done that would have put aside any ability of the people who manipulate trust companies to take life savings from investors.
I want to draw the minister's attention to the fact there are those of us who have come out of the business world where, to qualify for bonding to do a municipal works program, we had to sign personal guarantees. We could no longer get the protection of an incorporation but had to put everything we owned on the line to be bonded to do a job for a municipality.
I ask the minister, after all the fiascos that have gone before this particular time, why that government did not see fit to make the principals, and those people who were directing trust companies, more responsible to the people who put their money in trust with those companies.
I will go through the litany that dates back many administrations before this administration. I want to take the minister back to June 15, 1965, when Atlantic Acceptance Corp. failed to meet payments on some of its short-term obligations and went into default. The following day the stock fell on the Toronto Stock Exchange, and on the day after, some of its directors had to quit because of the great pressure put on them.
Now I want to lead up to some of the events that should have caused concern in this government long before now.
On July 28, 1965, the then provincial Treasurer, James Allan, said: "The government is ready to guarantee a loan to keep British Mortgage and Trust Co. solvent." That long ago, that government was confronted with the very thing that is confronting this government today.
I want to tell the minister that what went on in between is disgraceful, and it shows utter poor management on the part of that government.
The minister knows, and everyone sitting over there knows, that by now some heads should have rolled, and they did not. The government allowed this to go on, and the litany goes on and on.
I want to read some of the subsequent events after Mr. Allan suggested he was going to put government funds into this loan company. But first let me say that approach does not satisfy me. I do not want to see government funds going in to make up for the inadequacy of a government that is supposed to be looking over and watching the companies that are entrusted with funds.
Those people who are the principals and directors of those companies should be put in a position where these funds should not end up in the Cayman Islands or in a numbered account in Switzerland. We should be able immediately to hold those funds until some determination is made as to who is going to pay for these losses.
On July 29, 1965, Mr. Wishart indicated he did not intend to launch a public inquiry into the collapse of Atlantic. But on July 30, Premier Robarts said the affair was too big to be handled by the Ontario Securities Commission and ordered a royal commission. Besides the connections related to Atlantic, Commodore and British Mortgage, the tangled financial web stretched to a dozen other companies. I will not bore the members with these, but it is a litany that connects with Greymac, Seaway and all the corporations we are dealing with today. It is such a tangled web it seems no one can untangle it.
10 p.m.
The inquiry and hearings took place. The result was that 4,918 exhibits were listed by the royal commission. It had 106 sittings, and more than five tons of documents passed before that inquiry. What kind of exercise was that when the government did not do a thing with the recommendations that came from that inquiry? It would appear the government of that day did exactly what the government of this day does; that is, send something off to an inquiry and then forget about the recommendations.
After millions of words, the recommendations came back from that committee: "The curtain has fallen on the Atlantic story, a play of several million words, a cast of hundreds and a plot that never fully attained the understandable. It was quite a performance. Mr. Justice Samuel Hughes, Ontario Supreme Court judge, will write the critique and comment on the role of the performers."
What came of that was the critique and recommendations that were supposed to plug all the loopholes for succeeding trust companies so the people of Ontario, when they read the word "trust," could put up their hard-earned money and feel the government of Ontario was looking after their interests. Such was not the case. The word "trust" in a trust company name means nothing. People cannot trust the trust companies in Ontario.
The headlines in the paper in 1969 read, "Trust Law Gaps Being Plugged." I want to read into the record a couple of general comments that were made which reflect on the position of the investors of Astra and Re-Mor today. The minister knows as well as anyone else who is interested that that hearing has been put off again until September.
The recommendation that was made in December 1969 reads: "Consideration should be given in consultation with the government of Canada with respect to necessary amendments to the Criminal Code, with the judges of the Supreme Court of Ontario with respect to necessary amendments to the rules of practice, and with the Law Society of Upper Canada with respect to the question of professional conduct, to expediting proceedings in the courts of the province by limiting the number and length of adjournments obtainable on the application of any party including the crown, or upon consent, to secure prompt and comprehensive enforcement of the law against irregular or fraudulent practices involving companies carrying on business in Ontario, and consideration by the Minister of Justice and the Attorney General of Ontario should be given to retaining for the prosecution of offenders as a matter of course counsel not regularly employed by the government."
In other words, the recommendation of that royal commission was to bring some kind of power to bear on those people who were entrusted with those funds. The clipping is right here, "The Atlantic Acceptance Saga Starting its Last Chapter."
After those recommendations, I want the minister to listen carefully to this.
The Acting Speaker (Mr. Robinson): I caution the honourable member that he seems to be wandering rather far afield. The debate before us at this time is whether third reading of the bill should occur at this time.
Mr. Kerrio: These are the reasons we should not give consideration to third reading of this bill.
The Acting Speaker: I simply ask the honourable member to draw the thread of that into the debate.
Mr. Kerrio: Mr. Speaker, if you are asking us to trust the government, I have just read a litany of years of mistrust. Why should we begin now?
The Acting Speaker: With respect, I am not asking you to let the government do anything. I am simply asking you to draw your comments into the thread of the debate before us.
Mr. Kerrio: I am prepared to do that, sir, but I find this a rather odd position for you to take. A great deal of latitude has been allowed in all the proceedings and discussion here. I have a particular interest in this because many hundreds of people in the Niagara Peninsula have lost their life savings in those trust companies. It has been going on for 20 years, and it is a gross miscarriage of any kind of justice that this minister is attempting to tell us he is going to perform with now.
I shall read one last excerpt as it relates to this whole fiasco of Atlantic Acceptance and as it relates to getting people into the courts and getting a settlement: "The final chapter in the sad saga of Atlantic Acceptance has opened." Atlantic had collapsed in mid-1965, and this was September 25, 1971. "Unsecured creditors will receive five cents on every $1 of original investment of their claim."
Mr. Speaker, with respect to supporting the government on this bill, can you honestly suggest that we should not question this government or ask that the principals and directors of these companies should be held more responsible? I ask the minister one more time whether he will consider that kind of legislation. When are some heads going to roll and some people going to be dismissed who have not been looking after the best interests of the investors in Ontario?
Mr. Peterson: Mr. Speaker, I am disappointed only that the Premier has vacated the chamber. Since he is probably within the sound of my voice, I hope he will hear my pleadings and will come forward to the chamber to take his medicine. In the meantime, we can observe the government House leader (Mr. Wells) and the Minister of Health (Mr. Grossman) comparing where they buy their shirts or any other interesting topics of conversation they have. It is obvious that the Minister of Health just came from La Scala --
Mr. Nixon: The rest of the time he is out to lunch.
Mr. Peterson: He cannot get into the Toronto Club, and I am sorry to hear that.
Hon. Mr. Grossman: I do not think you can either.
The Deputy Speaker: Continuing on with the debate on third reading.
Mr. Peterson: On a point of order, Mr. Speaker: I was just going to waste some time until the Premier arrived, because I would very much like to address my remarks to him. However, I will wait just a moment.
I view tonight as a rather sad night for this Legislature. I believe the precedent we have created by the government's catch-up response to a series of events that were running ahead of it, and in my judgement were at all times out of its control, is going to haunt this Legislature and haunt the government as well.
I know of no precedent for this kind of legislation. Had this government been on top of the situation, this bill never would have been necessary. Even as late as today, I see a government scrambling to keep up to the facts in the unfolding events.
Yesterday, for example, I asked the minister what was going to happen with respect to some apartment buildings in Ottawa and in Kitchener. He had no idea. He came back today to say the Residential Tenancy Commission had not received an application for an increase in rent, and therefore the fact that it appears at least the property management company, the second or third mortgagee, was in default and bankrupt -- who knows what is going to happen? -- was irrelevant to the minister, even though we have thousands of tenants in this province who are potentially subjected to the same kind of uncertainty because of the apparent lack of financial viability of the property manager, the mortgagees and/or the owners.
10:10 p.m.
There is much confusion in this issue, there has been for three months; but the government has yet to step forward in any meaningful way to give confidence to anyone that it was in control of this situation or, indeed, even understood what was happening. We have not seen a plot unfolding; we have seen the government lurching, stumbling between the lampposts like a drunk, looking for the next support it could find along the street rather than weaving its way down the street with any clear sense of direction. That is what has been happening. That is one of the reasons we are creating, tonight, a set of legislation, a precedent that will turn out to be most unfortunate for all of us.
Interjections.
Mr. Peterson: I do not know; maybe all the Tories are proud of themselves tonight. Maybe they are going to go back to the Toronto Club or the Albany Club even if Grossman cannot get in.
The Deputy Speaker: The honourable the Minister of Health.
Mr. Peterson: He is the one who said he could not get in.
Hon. Mr. Gregory: The member is out of line.
The Deputy Speaker: Order.
Hon. Mr. Gregory: He should be ashamed of himself. He is ignorant.
The Deputy Speaker: Order. Gentlemen -- I use the word loosely at this point -- order, please.
Hon. Mr. Gregory: Mr. Speaker, on a point of order: The member should retract what he just said. He knows what he just said; I do not have to repeat it to him. He is an ignorant man. He is a total disgrace.
Mr. Peterson: Ask the Minister of Health (Mr. Grossman) what he just said to me. He said he could not get in. He just said he could not get in.
Hon. Mr. Gregory: The member should apologize and withdraw.
Mr. Peterson: The member is in no position to demand an apology from anybody for anything. He is the biggest cultural and intellectual pygmy in this whole House.
The Deputy Speaker: Order. Would the Leader of the Opposition please keep his remarks in tune with third reading of Bill 215.
Mr. Peterson: Ask the minister what he said to me.
The Deputy Speaker: Never mind asking the minister -- Bill 215.
Mr. Peterson: Mr. Speaker, let me talk about this bill for a moment, because I really believe we are creating a precedent. Let me, if I may, draw an analogy. Do members remember the difficulty we had last session with Bill 179? We discussed that bill from a number of points of view. Finally, the government felt obliged to invoke closure, a precedent-setting move.
Today, how promiscuously we all talk about closure. We have talked about closure for Bill 127, and a variety of other devices. The minister has said he would use any device to get this bill through the House. We were subjected to a number of threats.
Now we are being threatened on a daily basis with a device, rare in its application, which we took so seriously last fall. What I am saying is that the difficult precedent acquires a common application around this House. Tonight we are passing a law. I say to my friends, that I do not honestly believe any Conservative in this House can be very proud of. I do not believe that for a minute, because we are confiscating private property from someone who has not been charged with a criminal act.
I carry no brief for Mr. Rosenberg, let me tell the House that, because I can tell members, if it had not been for this party, we would not be anywhere close to a resolution of these great problems. There is no doubt about that.
By any objective standard this has been the most shameful handling of any situation by this government in recent history. If nothing else, it has destroyed effectively for all time the myth of so-called management competence that the people over there succeeded, for some time at least, in perpetrating. They have destroyed whatever credibility they had.
Apart from that, I want to speak to this very difficult precedent we have created tonight.
Mr. Havrot: Is the member for it or against it?
Mr. Peterson: If the member will just listen I will tell him.
We started out by saying we wanted five things. We wanted information. Any information that was forthcoming on this bill was given begrudgingly and only under a substantial amount of pressure from this party. Mr. Biddell came to my office last week. There was absolutely no reason that Mr. Biddell could not have gone public on January 7 of this year -- he is an honourable, competent and good gentleman -- and explained to the people of this province why he felt they had to act.
Why did he not? Members should ask themselves that question. The reason is, of course, the classic Tory mentality, to stonewall, not to be forthcoming with information, not to take people into their confidence and to hope that by covering a problem up it will go away. I have seen that in almost every instance that has come before this House. That is the Tory mentality, to describe it in a nutshell. He did not tell us anything. That is the reality. He could have been forthcoming with the people.
The minister went underground on January 7. He spoke to no one for about 10 days before he came back to this House. There was no reason he could not have shared that information. Then, only because we put some pressure on, he scurried and hurried every day to bring forth more information, begrudged as it was, into this House, and finally gave us the Woods Gordon report. I remind the minister that for the same length of time we have been asking for reports on Seaway Trust and Greymac Trust.
Very frankly, I do not believe for a minute the minister does not know the status of those trust companies today. I do not believe it. He is pretending he does not have the information, or he is stonewalling again, hoping the political heat on this bill will go away before he gets into the next issue. It is that Tory mentality of covering up, not coming forward with the facts, not taking other people into their confidence, that has led substantially to his problems in these circumstances.
That is why we said: "We need more information. We are still dissatisfied. We are very dissatisfied with the way this was handled. You have mishandled the takeover." We still do not know whether it was necessary. We said, when we gave the minister the power in January to move in on these companies, he would be judged by the consequences of his actions. We still do not know enough at this point to judge him.
The second thing we said at the time is that we wanted to protect the preferred shareholders. We know that, at this point, at least $18 million to $20 million worth of preferred shareholders' interests are in very substantial jeopardy. We have received no assurances from the government. We have said to the minister we expect the depositors of Greymac Trust and Seaway Trust to be treated pari passu with the depositors of Crown Trust. How can he draw a distinction between people who in good faith put their money into Crown Trust and people who in good faith put their money into one of the other trust companies?
I know the London Board of Education put $1 million into Crown Trust. Is that any different from the municipality of Peel or Brampton, or whichever it was, that put $3 million into Greymac Trust? If that is not recompensed, the taxpayers there will pay. East York also has a major deposit there. What about all the individuals who put money into the other trust companies? Any time we want to talk about it the minister is not prepared to talk and has consistently stonewalled on those important issues. I find that lack of information contemptible in the circumstances.
There is some suggestion that there is some net realizable value in Crown Trust, but not in the other two companies. Perhaps the decision was made by the Canada Deposit Insurance Corp. or perhaps by this government; I have no idea. But when the government is as negligent as it has been in these circumstances, then it is morally and legally obliged to pay any depositors lost money in this entire matter. If the minister had come forward on January 7 and said, "We have major problems here, but we perceive them to be. No depositor has to worry. We are going to make up the difference between the Ontario government and the CDIC. We are going to do the best we can in the difficult circumstances," just think how different the circumstances would be today. Indeed, the minister's personal political fortunes would be a lot higher than they are today.
10:20 p.m.
Interjections.
Mr. Peterson: They can all laugh. Just wait and see the fallout of this situation. My House leader is telling me the minister wants to speak and I have just a couple of more minutes. I would like to go on at great length.
The other issue we care so very much about is to have some sort of indication from the minister, the government, that we will have a complete independent inquiry into this matter. I have absolutely no faith in any internal review of the government. I have seen so many contradictions. I have seen patterns of behaviour tolerated by this government for two years and then they turn on the people who do the same thing and say, "You cannot do it any more." I have seen the gentleman who wanted to come to the committee and indicate how he valued the properties according to a pattern accepted by the government. Yet the minister's back-benchers, his donkeys in the back row, said, "You cannot come in here." This was the parliamentary assistant --
Interjections.
Mr. Peterson: Sorry. I will retract "donkeys," just to make it fair.
We had a spectacle in that committee. The parliamentary -- no, it was not the parliamentary assistant -- the member for Sarnia (Mr. Brandt) --
Interjections.
Mr. Peterson: It was the parliamentary secretary to the minister who moved a motion not to hear Mr. Markle. Then after that, before he even heard the statement, the minister came on and said the essential question was valuation and they would not hear evidence as to another valuation. It is a classic stonewall, not dissimilar to what was done in the Astra Re-Mor deal.
I believe when the history of this saga is written, it will provide a tremendous amount of embarrassment for everyone on that side of the House. That is why I have no faith in their independent inquiry. We have this great political machine, with all its apparatus and all the taxpayers' money moving inexorably towards a result in which, from their point of view, they only want to see self-justification.
They have no interest in finding out the truth. They have no interest in finding out who was at fault. They have no interest in finding out why this happened, because when it is all found out, it will point inevitably at their incompetence. That is the problem. That is why I have no faith.
Somehow or other, we are going to continue the fight from every point of view in insisting that they have an independent inquiry into this affair: the Cadillac Fairview flip; the great apartment sale; the financing by the trust companies; the methods used by those trust companies not only in that deal but in previous deals; and as important, into the behaviour of the ministry, why it tolerated certain forms of behaviour for the last couple of years yet turned on those same people and disallowed that kind of behaviour. That has to come out somehow or other.
For those reasons, I have no faith in the government. I have no faith in their good intentions beyond political motives to salvage their own position. I have yet to hear what they are going to do about the other trust companies. I have yet to hear that there is going to be any honest, independent inquiry into this affair. That is why we on our side of the House have absolutely no faith in this minister, his two predecessors who sit to the left of him, who gave us assurances day after day that this would never happen, or the entire government, which is interested only in self-justification, not in finding out the truth in this matter.
Mr. Rae: Mr. Speaker, four very brief points:
The first one is that we believe and have said from the very outset that the government of Ontario should have presented guarantees, not only to the depositors of Crown Trust but to the depositors of Greymac and Seaway Trust.
The second point we have made is that this legislation should have provided protection for employees.
The third point, which we have made consistently, is that there are alternatives to the approach the government has taken, alternatives that not only would protect the depositors but that we believe would provide the kind of position necessary for the preferred shareholders who have been placed at a disadvantage by virtue of the government's actions.
Finally, I simply want to say to the minister that regardless of what happens to Crown Trust after tonight and regardless of what happens to Seaway and Greymac, there are two groups of people who will simply not go away and that the minister has to continue to respond to and the government is going to have to listen to.
It is going to have to listen to the problems of the depositors of Seaway and Greymac. The government is going to have to pay attention to the tenants of this province -- the tenants of Cadillac Fairview and the tenants in those buildings who still do not know who their landlords are, who are living in a world where numbered companies can change property day by day, where management firms, like phantoms in the night, can come and disappear and where tenants are none the wiser.
When this issue has long gone, let us not forget there are tenants in buildings who still do not know who their landlords are, who are waiting for action from this government to provide that kind of protection, that kind of information. They are looking for reform of the law, long-term policy reform that will provide them with protection and provide all the people of the province with confidence and trust in the trust legislation and the trust companies of Ontario.
When this issue is long gone, those people will still be around looking for answers from this government. Those are the points I very deeply wanted to make in the debate.
Hon. Mr. Elgie: Mr. Speaker, I find it hard to believe the Leader of the Opposition (Mr. Peterson) almost talked about the wee, cowering mousie, but I sense a great deal of support for the position of this legislation.
[Interruption]
Mr. Speaker: Order.
Hon. Mr. Elgie: I want our guests in the audience to understand this has been debated on many other occasions and my windup remarks will be very succinct.
I thank members for many of their comments but I do have to say I think we have seen a new low in debate in this House tonight. That is something I thought I would never say, in a way in which I thought I would never have to say it, but I have seen tonight hypocrisy, two-faced attitudes and a mosquito trying to pretend he is a lion.
Just so everybody here clearly understands the great concern the members opposite have for depositors, let us all remember, as they vote against this bill, that on January 18 they said, "They have to get those assets into the hands of somebody who knows what he is doing."
Well, we are doing it; now go back to your mosquito nest.
Mr. Speaker: The motion before the House is for third reading of Bill 215. Is it the pleasure of the House the motion carry?
All those in favour will please say "aye."
All those opposed will please say "nay."
In my opinion the ayes have it.
Motion agreed to.
Interjections.
Mr. Speaker: Order.
BUSINESS OF THE HOUSE
Hon. Mr. Wells: Mr. Speaker, I would just like to announce that, as we have already passed a motion to carry on with regular business on Thursday, on Thursday afternoon and evening we will have second reading and committee of the whole on Bill 197, and then concurrences for the ministries of Energy, Tourism and Recreation, and Citizenship and Culture. On Friday we will do concurrences for Industry and Trade, and Education.
The House adjourned at 10:32 p.m.