Journal des débats 1983-mai-31 | Assemblée législative de l'Ontario

Mr. Speaker: John B. Aird, the Lieutenant Governor, transmits estimates of certain sums required for the services of the province for the year ending March 31, 1984, and recommends them to the Legislative Assembly; signed in his own hand, Toronto, May 31, 1983.

RESCUE FROM NIAGARA RIVER

Mr. Kerrio: Mr. Speaker, on a point of privilege: I hope you and members of the Legislature of Ontario will join me in paying tribute to John Marsh, Peter Quinlan and Joe Camisa, all of the city of Niagara Falls. It has to do with the heroic act of saving a young lady's life at Niagara Falls.

This act was all the more heroic as the men were employees of Canadian Niagara Power Co. Ltd. and had full knowledge of the awesome power and destructive capability of the mighty Niagara River. Taking this into account, John Marsh put his trust -- indeed, his life -- in the hands of his fellow workmen in the form of a lifeline, while he plunged into the upper rapids to rescue Sherry, a visitor from the United States.

When asked why, he replied, "I just could not stand by while this help was needed." After the rescue Sherry said: "I thought I was going to die. I can't believe he risked his life for mine."

We can all be proud that John Marsh answered the call, performed this heroic act and, I hope, has earned the respect and admiration of all of us in the Legislature and of people from all parts of Canada and the United States.

SUSPENSION OF PROCEEDINGS

Mr. Speaker: As a result of the incident that took place during question period yesterday, I feel I should once again call the attention of all honourable members to standing order 27(e), which says:

"In putting an oral question, no argument or opinion is to be offered nor any facts stated, except so far as may be necessary to explain the same; and in answering any such question, the member," usually the minister, "is not to debate the matter to which it refers."

Unfortunately, a practice has grown up among many members of making lengthy comments or speeches either before the question is put or after the question is answered. I want to remind all honourable members that both are out of order. There is no provision in the standing orders for such a practice.

I ask the co-operation of all members to put their questions quickly, without lengthy preambles, and to refrain from any comment after the question is answered. I will be very strict in calling to order those members who persist in either or both of these practices.

Mr. Nixon: We are with you.

Mr. Speaker: Thank you.

Similarly, the minister or any other member to whom the question may have been referred under standing order 27(f) must answer succinctly and without argument or extraneous comment.

I see the leader of the New Democratic Party is grinning. Again, I will persist in calling the ministers to order when they breach this provision of the standing order.

I would ask all members to govern themselves accordingly.

Mr. Martel: Mr. Speaker, on a point of order: When you are reviewing this process, would you look at standing order 19(d)9, which deals with the imputation of "false or unavowed motives to another member" by a cabinet minister. That certainly precipitated part of what happened yesterday and is an ongoing problem. There are allegations made that people are presenting material that is not factual. I think if that were not suggested, we might not get into the type of hassle we got into yesterday.

Mr. Speaker: I think it is all part and parcel of the same problem. Again, I ask all members to govern themselves accordingly or they shall be dealt with expeditiuusly.

STATEMENTS BY THE MINISTRY

HALF-BACK PROGRAM

Hon. Mr. McCaffrey: It is my pleasure to announce to the House today that the Wintario Half-Back program will be expanded to assist two different areas of cultural life in our province: Canadian consumer magazines and community art galleries and museums.

As members may recall, we launched a new Half-Back promotion last October for books by Canadian authors. Since last November, Ontarians have been able to redeem their old Wintario tickets for discounts of up to half the retail price of Canadian books to a maximum of $15. Members will be pleased to know that public response to that program over the past year has far exceeded our expectations.

That program ends today and I can happily say that the public will have redeemed close to five million Wintario tickets on the purchase of books by Canadian authors by the time the final redemptions are processed by the end of June. Book retailers and publishers with whom we have been working closely confirm that the program has greatly increased sales of Canadian books in Ontario. We estimate the retail value of Half-Back sales is in excess of $5 million.

Starting tomorrow, Wintario tickets may be used for up to half the admission cost or up to half the cost of an annual membership to participating non-profit art galleries and museums in our province. As an audience development promotion, the Half-Back discount is designed for new memberships only. Renewing members may also benefit from the discount if they purchase a new membership for someone else.

I am confident this new initiative will increase public awareness and interest in our many local galleries and museums. It could also help strengthen their financial base through higher membership levels.

This past decade has been a time of explosive growth for art galleries and museums. In 1973, there were 38 public art galleries and 150 publicly funded community museums in Ontario. Today, 10 years later, there are 69 public art galleries and 210 publicly funded community museums.

2:10 p.m.

It has also been an expansionary period for magazines. On June 1, the Ministry of Citizenship and Culture will be launching a new Half-Back magazines program for selected Canadian consumer magazines. This program should have a major economic impact on the magazine industry by increasing subscription sales for the magazines involved. Equally important, it should increase public awareness of the very high quality and diversity of our Canadian magazine industry.

From the over 300 periodicals published in our province, a five-member jury has chosen 46 Ontario-based magazines to participate. Their range of interest and high quality, as well as the substantial Half-Back discounts available to their subscribers, should make these magazines appealing to readers of all ages.

In making its selections, the jury, composed of persons involved in various aspects of the magazine industry, considered each periodical's publishing history, subscription base and potential benefits from the program, and assessed marketing proposals submitted by each publication.

Special marketing assistance grants have been awarded to 22 of the 46 magazines in amounts varying from $2,500 to $20,000. These grants will assist the publications in promoting their participation in the Half-Back program and were awarded based on the marketing proposals submitted to the jury. In all, a total of $200,000 in marketing assistance grants has been awarded.

According to the most recent Statistics Canada figures, the Canadian magazine industry accounted for approximately $450 million in sales, with an added value of $375 million for printing and related services.

It is interesting to note that our province, which represents 33 per cent of the nation's population, provides 45 per cent of the market for consumer magazines, while a full 60 per cent of all Canadian magazines are published in Ontario.

Advertisers showed their confidence in Canadian magazines by increasing their spending by 156 per cent between 1977 and 1981. The magazine share of total media advertising in Canada went from 2.9 per cent to 4.5 per cent.

In many ways magazines are one of the most dynamic and successful of our cultural industries and I feel that Half-Back can only help increase magazine reading in this province.

In addition to our two new initiatives, the current Half-Back performing arts program for schools will continue unti1 June 30 and resume again for the fall term, September through December. This program was designed to provide greater opportunities for Ontario's young people to enjoy live performances of theatre, dance and music.

I might add that Ontario schools have used the Half-Back discount for over 40,000 student admissions to performances outside the schools and close to 200 touring performances in the schools. We expect the discounts will be used even more extensively during the fall term.

In closing, I would like to point out that the Half-Back concept has proved itself to the cultural community, particularly in these difficult economic times. Half-Back is one very good way to encourage Ontario's cultural growth while also offering financial benefits to the consumer. Half-Back's five-year track record is unparalleled, and its programs directed at all aspects of the arts have consistently proved successful.

CHILD SEXUAL ABUSE RESOURCE KIT

Hon. Mr. Sterling: Mr. Speaker, over the past five years the Provincial Secretary for Justice has undertaken a wide variety of initiatives to improve services to victims of sexual assault. The most recent of these was the introduction in 1981 of the standardized sexual assault evidence kit for use on a province-wide basis.

In this regard, I would like to inform my colleagues in the Legislature of a pilot project in which my office is undertaking to test a newly developed child sexual abuse resource kit. This kit will be available in eight communities across Ontario in June of this year.

Last December, members may recall, I announced that the Justice secretariat had initiated the concept of a standardized kit to guide the medical/legal investigation of child sexual abuse. In January, a technical working group was established by the secretariat with the involvement of several government ministries. In addition, this group consisted of representation from the children's aid societies, physicians, both the Ontario Medical Association and the Ontario Hospital Association, and the Ontario Provincial Police.

Essentially, the mandate of the committee was to develop the kit and to provide very detailed step-by-step procedures to be followed when child sexual abuse is discovered or suspected. A procedural manual, provided in the kit, sets out the basic philosophy that should guide the overall management of child sexual abuse cases. It also provides checklists for physicians, CAS workers and police officers. These lists outline the steps that should be followed systematically at each stage of the investigation and assessment process.

The kit also contains a set of anatomically correct dolls and a number of key reference materials. The dolls will be used to help children who may have difficulty explaining in detail exactly what happened to them during the abusive incident.

Despite all the attention given to child abuse during the past decade, the specifics of a co-ordinated approach had not been fully developed among the agencies involved. In the past, the lack of a generally accepted and standardized approach towards addressing child sexual abuse has made it difficult to comprehend fully the many dimensions of this serious problem.

It is the intention of the Justice secretariat, through this pilot project, to encourage further discussion and co-ordination among the social and justice systems. Our aim, Mr. Speaker, is not only to generate interest in the resource kit itself, but also to foster a better understanding of child sexual abuse by the public at large.

[Later]

Mr. R. F. Johnston: Mr. Speaker, standing order 26(a) states that a minister can give us a compendium of information along with a statement. Rather than that, I wonder if it would be possible through you, Mr. Speaker, to ask the Provincial Secretary for Justice (Mr. Sterling) to give to all members of the social development committee copies of the child sexual abuse resource kit, excluding the anatomically correct doll -- not that we do not have a need for that, but it is the expensive portion of the kit -- if he cannot give kits to all members of the House.

Mr. Speaker: I am sure the honourable member can put that question to the minister at the appropriate time.

INTERREGIONAL TRANSIT PROGRAM

Hon. Mr. Snow: Mr. Speaker, in announcing the implementation of this government's inter- regional transit strategy to expand GO Transit commuter rail services in the Metro Toronto-centred regions last fall, I indicated the province was on the threshold of an era of transportation development that would have a dramatic effect in shaping the growth and economic wellbeing of the urbanized area between Oshawa and Hamilton.

Since that time, we have established the GO advanced light rapid transit office, assigned a team of 17 professionals to manage the program, proceeded with preliminary design work and held meetings with both municipal officials and the public to explain the GO-ALRT concept, as well as to accept comments for use during the planning process.

Today I would like to inform the House of the present status of the GO-ALRT program and indicate to the members some of the economic gains the province will derive from this major transportation initiative. The GO-ALRT management team established to co-ordinate the planning, design and construction of this innovative interregional commuter service will be working hand in hand with Ontario's Urban Transportation Development Corp. in the implementation of a service that will showcase some of the most advanced light-rail transportation technology available in the world today.

It will use automated, lightweight, electrically powered vehicles, operating on exclusive rights of way, with the capability of providing quiet, comfortable, efficient and dependable commuter rail service for an area of the province that is home to close to one half of the population of Ontario.

As you will recall, Mr. Speaker, the prime commitment made last October was to provide commuter rail service between Pickering and Oshawa to the east of Metro, and between Oakville and Hamilton to the west, as soon as possible. To meet projected commuter needs, I also committed the program to undertake operational studies aimed at upgrading GO train service between Oakville and Pickering and, at the same time, to initiate a separate feasibility study on an exclusive right of way eventually to provide continuous commuter train service between Hamilton and Oshawa.

2:20 p.m.

GO-ALRT is also preparing a series of feasibility studies to identify preferred locations for an east-west transit route through the north of Metro Toronto, linking the major municipal centres and Toronto International Airort with the Lakeshore line at Pickering and Oakville. They also include an evaluation of how GO-ALRT can operate jointly with the Toronto Transit Commission between the airport and Scarborough civic centre.

The GO-ALRT program is the largest single transportation initiative undertaken by this province since the construction of Highway 401, and provides a much-needed boost for Ontario's economy. For example, through contractual agreements with engineering consulting firms, GO-ALRT is providing continued employment for hundreds of professionals and their support staff at a time when this industry acknowledges a severe lack of available assignments because of recent recessionary pressures.

As the program progresses, and with the assistance of funding from the Board of Industrial Leadership and Development program, we will enter into civil engineering and construction contracts in excess of $200 million for the Hamilton and Oshawa extensions. Here one can easily grasp the importance of transit construction to the economy, for it has been proved that with each $100 million invested in new transit facilities, 3,000 man-years of employment are directly generated and up to 5,000 man-years of jobs in associated industries.

In addition, new transit lines attract developers, both commercial and residential, who add their construction investment dollars. GO-ALRT will also provide the momentum for job creation and job opportunities for Ontario's high- technology industry.

Further to GO-ALRT, on April 27, I signed a contract with UTDC for the design of guideways, trackwork, electric power distribution, electronic train controls, vehicles and other advanced technology for the two extensions along the Lakeshore. This contract will also have a positive effect on employment and thus on Ontario's economy. Individual civil construction contracts for these components will be tendered later by the Ministry of Transportation and Communications and awarded individually.

Professional and technical staff have already been assigned to the program in Kingston and Toronto, and as contracts are awarded for the specialized components of this technology, additional employment will be created.

In addition, GO-ALRT interregional transit will be of benefit to the commuters of the Toronto-centred regions, as well as being yet another practical demonstration of Ontario's state-of-the-art transit technology.

When the planning phase for both the Lakeshore extensions is completed, I shall provide the House with further details related to the program, including route alignments, station locations, frequency of service and any developments relating to the implementation of the GO-ALRT route across the top of Metro Toronto.

But today I would like to assure the members, especially those representing ridings to be served by the new system, that it is GO-ALRT policy to ensure that public and municipal representatives are informed and involved at each step of the planning process. To date, we have received many positive comments relating to the program, many of them originating from municipal councils and regional and municipal planners. Such co-operation is greatly appreciated. It will facilitate the need to co-ordinate effectively the integration of municipal transit schedules with the operation of the GO-ALRT network.

In closing, Mr. Speaker, allow me to point out that GO-ALRT will also reduce our reliance on expressways for the movement of people between their homes, industry and the commercial marketplace.

ORAL QUESTIONS

SUBSIDIZED RENTAL HOUSING

Mr. Conway: Mr. Speaker, my first question is to the Minister of Municipal Affairs and Housing, and it concerns that minister's order --

Hon. Mr. Snow: The active member from Ottawa East.

Mr. Speaker: Order.

Mr. Conway: At least the Minister of Transportation and Communications (Mr. Snow) has the good grace to invite you to a sod turning.

My question concerns the minister's order to Cityhome that they must raise rents in two of their units in the city of Toronto by between 10 and 15 per cent, fully twice what was recommended by the city of Toronto. My question concerns the basic principle of affordability and access to public nonprofit housing not only in Toronto but across the province as well.

Is the minister not concerned and does he not feel that his ordered increase of 10 to 15 per cent gives effect to the ominous warning set out last year in the Cityhome annual report: "We are moving away from the formal and laudable objective of serving primarily low- and moderate- income families and individuals, to a market-oriented program that will be increasingly wasteful and increasingly unattractive to sponsoring agencies."

Hon. Mr. Bennett: Mr. Speaker, I am sure the members well appreciate the fact that when we got involved in the municipal nonprofit housing program, the private nonprofit housing program and the co-ops, some very clear guidelines were set as to how rents would be determined. That was a given and it was accepted by those people who entered into the contract with the province and the federal government. It clearly said that we would establish the rents for all units in the project at the low end of market rent in the non-rent-controlled units; that was clearly stated and accepted. Indeed, in the first year we established those rents exactly on that basis.

Now let us separate the two classes that we have in the nonprofit categories. First of all, we have a percentage of units that are on a rent-geared-to-income basis. Under an agreement signed by the Ministry of Municipal Affairs and Housing with the Cityhome group and with the other nonprofits across the province, the rents of those units to the tenants themselves will not be affected unless their incomes rise, in which case the rent will rise accordingly under the agreement.

The balance of the units, which are already subsidized by the federal-provincial taxpayers, are occupied by people who have rather substantial incomes. I trust that the deputy leader of the Liberal Party will recall the Toronto Star some weeks ago being rather critical of Cityhome on that account and clearly indicating that maybe some rent adjustments should take place.

Specifically to the case, Cityhome came in and indicated to my ministry what they believed were legitimate increases for those units, and they indicated that they wanted to see increases in the range of seven per cent. Indeed, when the ministry people did some calculations on the cost of operating those units, which eventually has to be borne by the taxpayers of Ontario and Canada, the increase indicated for the units was something in the range of 22 per cent.

After some hard negotiations, the rent increases were established in varying degrees. I want to remind the honourable member again that this is in keeping with the agreement we signed between very knowledgeable people at Cityhome and knowledgeable people in the Ministry of Municipal Affairs and Housing -- which represents not only the cause of the province but the federal agency as well.

Eventually we arrived at rent increases in one-bedroom units in the range of 10 per cent; in two-bedroom units, 14.6 per cent; in three-bedroom units, 14 per cent, and in four-bedroom units, 14 per cent. But let me remind the members of this House that even with those increases, as indicated by the ministry, there will still be a net loss that will have to be borne by the people at both the federal and provincial levels.

Mr. Conway: Can the minister indicate to the assembly and the community details beyond the essence of his presentation to his colleague the Minister of Consumer and Commercial Relations (Mr. Elgie), whose job it is to administer the inflation restraint program, when he went to him with what clearly must be an administered price and suggested he was going to violate the five per cent guideline in one case by a factor of two and in another case by a factor of three?

What was his case to that minister, and would he indicate what that minister's response, if any, was to the premeditated assault by the Minister of Municipal Affairs and Housing on the guidelines that are law in the anti-inflation program that the government is standing behind?

2:30 p.m.

Hon. Mr. Bennett: It must be great to have a great deal of rhetoric. The member knows very well that, whether we are dealing with private nonprofit units, public nonprofit units, co-ops or the Ontario Housing Corp., it is clear they fall beyond the guidelines of either rent control or the wage and price inflation factor. These units were already established under the clear position that they were being heavily subsidized by the taxpayers of Ontario and Canada. They did not come under any guidelines other than to try to make them economically sound.

As to asking those tenants to pay at the low end of market rent, I think it is rather unfair to believe that people who are paying rents in other private establishments should, through their taxes, continue to subsidize people who are fully able to afford the Cityhome units themselves. I want to indicate again that they are heavily subsidized by the member and myself as taxpayers of this province and of this country.

Mr. McClellan: Mr. Speaker, as the minister probably knows, the Frankel-Lambert apartments are located in the great riding of Bellwoods. I am completely puzzled how the minister can pretend the rent structure he has imposed on Cityhome is not an administered price under the definition set out in the Inflation Restraint Act.

I do not know whether the minister is aware, but I was advised by a member of the Cityhome board that Cityhome had hit upon the six per cent rent increase figure, to stay within the guidelines as set out by his government's own legislation. I simply repeat the question asked by my colleague from Renfrew North (Mr. Conway). How can he possibly be so hypocritical as to disregard his own legislation?

Hon. Mr. Bennett: Mr. Speaker, of course, if one does not want to listen to the answer --

Mr. Speaker: I think that question was answered. We are wasting time repeating it. Final supplementary; the member for Waterloo North.

Mr. McClellan: Mr. Speaker, with respect, I think the minister can answer his question without having you answer it for him. This is something new.

Mr. Speaker: He probably can, but I am not going to allow it.

Mr. Epp: Mr. Speaker, at the Ontario Municipal Nonprofit Housing Conference last September the minister said: "The government of Ontario in many ways supports and is advancing the principles of local autonomy. We believe the best decisions to meet local needs are made at the local level. That is why we want you to question your own operations and to find your own answers wherever possible."

Why has the minister ignored the recommendations of the city housing authority and ordered much greater rent increases than it had proposed? Is this his idea of local autonomy? Given the concerns of the local authorities as expressed in the vote of Toronto city council yesterday to protest the minister's action, will he reconsider his stance and grant the lower rent increases the city requested?

Hon. Mr. Bennett: Mr. Speaker, I indicated clearly at the commencement of my answer to the original question that the responsibilities under the agreement rest on the Minister of Municipal Affairs and Housing to establish a rent factor relating to the nonprofit operation in Ontario, not only in this community but also across the entire province where municipal nonprofit units happen to be located.

Frankel-Lambert, Cityhome and the rest of them can make suggestions and proposals which we use as a bargaining position to try to find a realistic position, but let us be up front with the situation. The entire cost, the shortfall that is sustained in the operation, does not fall to Cityhome. The honourable member should understand that clearly; it does not fall to Cityhome. The shortfall in the operation of municipal nonprofit units falls entirely either to the federal government or, in a co-operative effort, to the provincial government.

It is very easy for the mayor of this city and others to get up and say, "We want to do this and we will take this much loss." Obviously they will take this much loss because it does not relate directly to their cost of operation.

I suppose the best way to answer that question is to say that if the mayor of this community and the board of advisers of Cityhome are prepared to say to this minister, and I then arrange with the federal minister, that they will pick up, as a municipal responsibility, the difference between what they recommend and what we believe is a market requirement to meet the cost of operation -- if that is what he wants to propose to me through his council, I suppose there is some room for negotiation and bargaining.

But I did not hear that from the mayor of this community or from Cityhome, so the responsibility rests on my ministry to establish a rent that will basically allow these units to operate at a break-even position. I clearly say again, that has been well understood, spelled out in the agreement, accepted and signed.

ASSISTANCE TO FARMERS

Mr. Conway: Mr. Speaker, my second question is to the Minister of Agriculture and Food. Before I ask it, though, I know members will want to congratulate my colleague the distinguished member for Brant-Oxford-Norfolk (Mr. Nixon) who, in his ongoing effort to promote the fruits and vegetables and other strengths of the Ontario farm community, brought a large quantity of Burford township asparagus to our legislative dining room, which I think is something we should have more of.

Mr. Nixon: There was none for the cabinet dining room, I am sorry to say.

Mr. Conway: Over here we know about and want to promote Foodland Ontario.

Mr. Speaker: The question, please.

Mr. Conway: I recall it was a week ago in the House, in responding to my colleague the member for Huron-Middlesex (Mr. Riddell), the Liberal agriculture critic, that the Minister of Agriculture and Food indicated he expected to make an official response to the request of the Canadian Farmers' Survival Association, with whom he met some seven or eight days ago.

On that occasion the minister's attention was drawn to their great concern about the emergency conditions facing much of Ontario agriculture this particular spring, and he was specifically asked to guarantee operating loans for emergency cases of farmers who cannot finance their 1983 crop input costs.

Since the minister indicated a week ago that he expected to be in a position to make a formal public response to that request of the Canadian Farmers' Survival Association, might I inquire of the minister whether he can inform the House today of his position and his response to that request?

Hon. Mr. Timbrell: Mr. Speaker, I am happy to do that. It will take a minute, if I am allowed to read the letter I signed this morning --

Mr. Speaker: No. Just give a very brief answer. It is not time for statements, with all respect.

Hon. Mr. Timbrell: I had not intended to make a statement but, since the honourable member has asked the question, I replied to Mr. Wilford this morning as promised and indicated in my reply that in my view, in assessing any application for financial assistance, the government must take account of the financial viability of the individual and the enterprise for which the application is being made.

An essential part of the proposition that was put to me last week when I met with the president of the farmers' survival association, Mr. Wilford, and about 20 members of that group, was that in effect we should put to one side and not take account of the existing indebtedness of any particular applicant. In the words of Mr. Wilford, "We will look after that some other way."

In my two-and-a-half-page reply sent to him today I have said we cannot do that. In assessing any application where, if it is approved, taxpayers' money is either granted by way of interest rate rebates or put up as guarantees on lines of operating credit, we must take account of the viability of any farm enterprise for which an application is made.

Mr. McGuigan: Mr. Speaker, in arriving at his decision, did the minister take into account the changing world situation for agricultural product prices, brought about by a change in policy in the United States and the prevailing weather, which is affecting crop yields and therefore probably raising prices?

Did the minister also take into account the fact that the interest clock will be ticking all summer long, whether or not crops are planted? If he is going to make a decision to cut these people off, the time would be next fall when he could say to them, "You are finished, sell out."

Did he take into account the fact that he could advance money now with very little risk under the present situation and bring these people through the summer at probably no risk to the government?

2:40 p.m.

Hon. Mr. Timbrell: Mr. Speaker, perhaps the best way for me to answer would be if you would allow reversion to statements, and I will read the whole letter.

Mr. Speaker: Do we have the consent of the House, or would it be the wish of the House to finish oral questions and then revert? Revert now?

Agreed to.

STATEMENT BY THE MINISTRY

ASSISTANCE TO FARMERS

Hon. Mr. Timbrell: Mr. Speaker, this is the full text of the letter I signed this morning.

Mr. Speaker: Could the minister circulate copies to the opposition?

Hon. Mr. Timbrell: No, Mr. Speaker. I do not have any copies --

Interjections.

Mr. Speaker: Order. Apparently copies are not available. Is it still the wish of the members to proceed?

Some hon. members: Agreed.

Mr. McClellan: The minister was ready to make a statement earlier, I see.

Hon. Mr. Timbrell: No. I was not prepared to make a statement.

Mr. Speaker, this is the full text of the letter I sent this morning; it was to be telexed as well to be sure it got to the gentleman in question as soon as possible.

"Dear Mr. Wilford:

"Last Tuesday, May 24, we met to discuss your association's proposal for government guarantees for loans to farmers who appear unable to obtain credit for crop planting this year. In that meeting, you indicated that there were large numbers of farmers in need of such guarantees and that there was a severe shortage of credit.

"Also at that meeting, you stated, as a principle, that every farmer who planted crops last year had a right to government guarantees, regardless of the financial viability of the farm operation. It was stated that such guarantees would be contingent upon every other creditor waiving his or her claims, particularly those under section 178 of the Bank Act, in order to let the government of Ontario stand first in terms of recovering any defaults. While I expressed my personal reservations about such a plan, I nevertheless promised to reply to you within one week.

"Since our meeting, my staff has conducted an exhaustive investigation of the current situation by interviewing credit-granting agencies, agricultural representatives, supply companies and many other sources. Our goal was to ascertain the need for and the feasibility of such a program as you propose.

"Our investigations do not support the contentions made by you and your officers. Traditional providers of operating credit, while examining all applications more carefully, state that on average they have the same or more credit available this year as they had last.

"Most importantly, I feel very strongly that the people of this province would not accept any program, for whatever sector of society, which would allocate their tax resources without regard to financial viability. As guardians of the public purse, I am sure the vast majority would not expect less of us than careful stewardship of their hard-earned tax dollars. Financial viability must remain as a cornerstone for programs administered by this ministry.

"As you know, this ministry is assisting farmers in financial difficulty through OFAAP, our financial advisory services and other existing programs. We are willing to deal on a case-by-case basis with all names brought to our attention.

"For instance, occasionally a farmer has not appeared to qualify for OFAAP because of low equity. In this regard, we have had discussions with Farm Credit Corp. officials concerning operating credit where the corporation is considering the provision of mortgages of close to 100 per cent. We have agreed that we will assist in finding a bank to provide operating credit and will, where appropriate, provide the necessary guarantee through OFAAP.

"Similarly, when cases come to OFAAP where it appears that long-term refinancing through FCC, at their special rates, is in order, then we will initiate discussions with FCC. All this information has been transmitted to Mr. Shoebottom by Deputy Minister Duncan Allan.

"As you may also be aware, the ministry has been in intense discussions with other farm organizations, such as OFA, the Christian Farmers Association and the Ontario Cattlemen's Association with regard to the establishment of resource advisory teams to counsel farmers in distress. This project is progressing very well.

"I would also report that my staff have contacted you and your officers for names of farmers who could not obtain operating credit. Upon cross-reference being made, this list contains fewer than 100 names. We have followed up on virtually all of these cases. In most of them, OMAF has been involved in assisting these clients directly. Many are OFAAP clients, some over several periods. Where the farmer has not been a client of OFAAP, we have dealt with him or her directly. In some cases the applicant has been turned down for further assistance. This happens for a number of reasons but primarily because there is no possibility of putting the operation on a viable footing. In these cases we have assisted some farmers to make an orderly exit from farming. The program you have suggested will not help these farmers.

"After careful consideration of many points of view and drawing on the experience and advice of a wide range of farm experts, I must state that I am not in a position to suggest to my colleagues in cabinet that we develop a program such as the one suggested by your association. I do not believe it would be fair to suggest to any farmer that the government push him along for another crop year when it could only mean he would perhaps have a heavier burden of debt instead of emerging from that debt load to regain his viability.

"I am particularly concerned in a philosophical sense with the suggestion that financial viability should not be a concern of government. I believe it must be, and I further believe that the taxpayers of this province expect no less."

I completed by saying, "Please feel free to share the contents of this letter with whomsoever you wish, and I will do the same."

Mr. McKessock: Mr. Speaker, supplementary to the minister --

Interjections.

Mr. Speaker: Order. The member for York South --

Mr. Rae: Thank you, Mr. Speaker. I had a supplementary --

Mr. Speaker: No, just a minute. We always allow a supplementary after a statement, as you may recall. The clock is not running. The member for Grey.

Mr. McKessock: Mr. Speaker, did the minister look at the viability of Chrysler and Massey- Ferguson in the same way when he guaranteed funds to them? I hope he realizes he cannot turn farmers on and off like a tap. Those that we lose this year will be gone for good.

Last week I asked the minister whether he would consider having his ministry work overtime to get the OFAAP applications that are on file processed within the next 10 days. I hope he realizes there is a significance in this period of time on the farm. If they are not processed within the next 10 days he might as well forget them.

Mr. Speaker: Question.

Mr. McKessock: What has the minister done? What progress has he made with these applications? Has he asked his staff to work overtime to get these processed?

Hon. Mr. Timbrell: Mr. Speaker, as I indicated in answer to the honourable member's questions last week, we have allocated staff; we have had staff work overtime. We have had people working weekends throughout the life of the program to keep up with the flow of applications when it has been heavy.

I have repeatedly said to the member that if he has specific concerns --

Mr. McKessock: How many are on file now? Are they going to be completed this week?

Hon. Mr. Timbrell: I will give the numbers in a second when I look them up.

If the member has specific concerns about individual applications, I have repeatedly told him over the past 15 or 16 months to let me know. Just for the heck of it, I checked my correspondence files today and in the 15 and a half months I have been Minister of Agriculture and Food I have had about three or four letters from the member, only a couple of which deal with specific applications for OFAAP.

I will say it again. To the best of my knowledge, my staff are doing everything possible to keep up the flow of the applications so that they are looked after in a timely way. From time to time there will be cases where additional information is required, where the documentation provided is incomplete or whatever. They do go back to the bank, or the lender, depending on what type they are, or to the farmer and we say, "We need further information: this is incomplete," or whatever.

Assuming that all the information provided is in order, I am assured again, and I checked this morning, that we can process an application within 10 business days of its receipt; in other words, two weeks. To the best of my knowledge, we are completely up to date.

2:50 p.m.

ORAL QUESTIONS (CONTINUED)

Mr. Speaker: Now the member for York South. The clock is running.

ASSISTANCE TO FARMERS

Mr. Rae: Mr. Speaker, I am sure the minister will appreciate the fact that financial viability is not something that occurs in a vacuum. It reflects credit conditions that have existed on the farm for a long time, some of which have been very serious.

One of the disturbing remarks the minister made in his letter was his reference to the fact that the government would be assisting the farmer in making what he described as "an orderly exit" from agriculture. Can the minister give the House some estimate of the number of farmers who will be making an exit from agriculture this year, whether orderly or disorderly, as a result of very difficult credit conditions and very low commodity prices?

Hon. Mr. Timbrell: Mr. Speaker, in answer to the first part of the member's question, I am quite aware that the question of viability is a difficult one. In establishing the program 16 or 17 months ago, my predecessor and his staff made a very wise decision in choosing to have external, well-qualified people drawn from agriculture and with business backgrounds of various kinds, including agriculture, to make such judgements of viability.

The member might be interested to know that the province of Manitoba -- I think the member is familiar with the government there -- also has a farm credit program. It has a different name from ours and is aimed at different sectors.

Recently a question was raised in the Manitoba House about the lending practices or the approval practices of that program. My friend Mr. Uruski, the minister for Manitoba, indicated they would not consider any applicants who had less than 20 per cent equity in their farms. We have gone below 10 per cent. I believe I am correct in saying that in some cases we have gone down practically to a fraction of one per cent, where there was a chance of regaining the viability of a farm operation.

Furthermore, my friend Mr. Uruski said they would not consider any applicant who could not show the financial viability of the operation.

I have said repeatedly, before the member even got here, that on any number of occasions we have gone to great lengths to help individual farm operations, mediating between farmers and lenders to work out something in the interest of the farmer. Taking into account all the history of a farm operation and taking into account all that wise and prudent people can safely project in the next six months or a year, there are some cases where the viability simply is not there and cannot be there.

There are some cases where we do help them exit in an orderly way. I cannot estimate the number. Fortunately, the numbers this year have reached a plateau. We are not seeing the increases we saw over the past 18 months to two years. One would hope that through these policies, the hard work of the farm community and all the things that impact on it, the numbers will start to go down.

Mr. McGuigan: Mr. Speaker, a few months ago, I think we on this side would have agreed with the minister's assessment. However, conditions have changed so much since then. For instance, one can forward-sell one's corn crop. I would point out that the corn crop is really the basis of North American agriculture. A corn crop can be sold today at $2.92 a bushel for fall delivery.

Mr. Speaker: Question.

Mr. McGuigan: Under those circumstances, does the minister feel there is much chance that he would lose money or that the farmer would get himself into a worse condition than he is in already?

Hon. Mr. Timbrell: Mr. Speaker, that is certainly being taken into account. We follow the futures market just as closely as the member. Not long ago, one could forward-contract at around $3.40. We do take account of that.

In each case, the individual applicant must supply an audited statement of what actually happened on his farm, in this case in 1982, and a farm plan. We look at what actually happened in 1982, we look at what he is projecting, and his present financial state; the degree of equity, if any, that is left.

Based on what they are showing and what we know about forward-contracting of corn, soybeans or whatever, an assessment is made of whether a farmer has a chance of holding his own or improving the viability. It is a judgement call in each and every case. We cannot say to every applicant that no matter what the circumstances, the government will guarantee. We cannot do that with the taxpayers' money.

NONPROFIT HOUSING

Mr. Rae: Mr. Speaker, I have a question for the Minister of Municipal Affairs and Housing. In a letter to me with regard to an increase of 20 per cent over two years in the Cooper Mills town homes in my riding, the minister said, "The rents charged in any municipal nonprofit project are strictly a function of the private non-rent-controlled marketplace and bear no relation to project costs, neither capital nor operating."

Given the extent of rent controls in our society today, does the minister not think it is only fair that rent-controlled buildings should be factored into any consideration of a comparison in terms of the marketplace? Why limit the marketplace to those buildings that are not subject to rent controls?

Hon. Mr. Bennett: Mr. Speaker, we are right back to where we started with the original question.

When we entered into these nonprofit operations in the various jurisdictions across Ontario, it was clearly indicated how we had arrived at the rental factor in the first year, the second year and thereafter. It is fine for the leader of the third party to sit there and smile, but these nonprofit units are already heavily subsidized by the taxpayers of Ontario and Canada on a 50-50 basis.

I have to suggest very clearly to the leader of the third party that we have established this practice. Indeed, if one looks at the Frankel-Lambert project, if we did not increase the rents, we would have sustained an additional $75,000 requirement for subsidy in the current year. If one looks at the other projects, the additional subsidy for the St. Lawrence town house project, which is another one that has been in the newspapers in the past two days, would have amounted to roughly $60,000 or $61,000.

We have established a position, clearly understood by all, that the units under the nonprofit co-op, Ontario Housing Corp. and so on would not fall within the guidelines of rent review. The terms of reference as to how rents would be established were clearly spelled out.

It is obvious to me that after the ball game is under way and we clearly understand the responsibilities of the federal and provincial governments in trying to provide some supported rental programs in the marketplace, they want to change the rules. If we are going to change those rules, obviously it cannot be done only by the minister in this government; it has to have some degree of acceptance by the federal agency as well, since it is a very substantial participant in the loss factor sustained in this operation.

Mr. Rae: With great respect, the minister did not answer my question. The question I asked was, why are rent-controlled buildings excluded from the comparison?

Hon. Mr. Bennett: Obviously the honourable member is fully aware of why they are not included. We are dealing with units that were built after rent control and when we had the heavy operating costs coming into these units. The terms of reference were clearly there.

Again, if the member wants to change the rules of the game, it will take more than just this government to agree to it. It will take a federal agency as well to agree to that change. Indeed, every time the member seems not to find himself in the best political position, where he would like to be, he suggests that we should change the rules to make it more convenient for him to sell his propaganda around the province. We have this situation clearly in hand --

Mr. Speaker: Thank you.

Mr. Rae: I do not have to sell my propaganda; I give it away.

Interjections.

Mr. Speaker: Order.

Mr. Epp: Mr. Speaker, I wonder whether the minister would care to explain to the House how OHC can justify increasing the rents for its senior citizens, which in some cases are as high as 23 per cent, when the joint federal-provincial study group examining the ramifications of the province moving towards the federal rent scales recommended that any rent increases be phased in over four years.

Why did this government decide to ignore that advice and increase rents for seniors in OHC buildings over a two-year period? How does the minister reconcile that decision with the goals of the Inflation Restraint Board?

Hon. Mr. Bennett: Mr. Speaker, the question being asked by the member for Waterloo North goes back about two or more years to when we clearly enunciated how we were going to handle the rent increases being requested by Canada Mortgage and Housing Corp. He will recall that CMHC said very clearly to us: "You are below the national percentage for rent-geared-to-income in OHC for seniors. You can do whatever you want, Mr. Minister, with the province of Ontario, but as of a certain date we are going to calculate rents predicated on 25 per cent of income and you as the provincial government of Ontario will pick up 100 per cent of anything that falls short of that particular position. We will share with you any other losses sustained."

3 p.m.

While there has been a heavy subsidy in these progams, we indicated very clearly that we were going to at least give the break of bringing in the increase over a two-year period. There has been little or no objection to that position because most seniors appreciate the fact that they have had a break, a break that was not always given to other senior citizens in Ontario.

The member will know that the program we have in OHC, as we have in any rent supplement program in this province, is based on the income of the individual. Each person pays in relationship to that income. For seniors, 25 per cent of their income is used to pay their rent and any other costs required. I exclude the electrical costs for the kitchen, hot water and laundry, for which there is an additional allocation of roughly $6 per month in most units across the province. Any other costs sustained in the operation of the some 90,000 units in this province are shared between the federal and provincial governments.

The subsidy this year will amount to roughly $309 million and I hear no complaints -- let me suggest to the member for Waterloo North (Mr. Epp) -- from the average taxpayer in Ontario that the comfort of life should not be made better for seniors and families less fortunate. I think taxpayers are to be complimented for that situation.

On the other hand, they expect this minister and the federal minister to run the program in accordance with the terms of reference that have been established for many years.

Mr. Rae: Mr. Speaker, does the minister recognize the unfairness for the people living in these buildings of not having any right of appeal with respect to the increases imposed on them? I wonder if the minister would consider at the very least giving these tenants the right to present comparisons, the right to bring forward their own witnesses to testify to the low end of market rent and market value, and the right to an appeal? Then they would not be subject to the arbitrary decisions of the ministry with no right of appeal whatsoever.

Hon. Mr. Bennett: Mr. Speaker, we are dealing with an organization, Cityhome, which is a public corporation owned by the city of Toronto and heavily subsidized by federal and provincial taxpayers through the various schemes that have been brought into place. They present their figures in relation to the rent increases; these figures are reviewed by the ministry people and the appeal process is right there. Between the two, we try to arrive --

Interjection.

Hon. Mr. Bennett: Just let me finish the answer, if you do not mind.

We then try to produce a rent in keeping with the cost of those operations. I want to emphasize once again there are two distinct groups within the Cityhome operation as there are within any municipal nonprofit, private nonprofit or co-op group in this province. There is that group of 25 per cent which is supported on a rent supplement program. Regardless of how high the market rent happens to go in those units, their rent will still be based upon their income -- clearly understood, their income. Their rent will increase only if their income happens to increase.

Concerning the other 75 per cent of the units, it has been very clearly said all along that they would be operated at the low end of market rent and they are now being heavily supported by the taxpayers. If we believe the average home owner or tenant in regular living accommodation should further support those people in what are already subsidized public units, fine; however, I do not believe in that philosophy.

I believe we made an agreement, we fully understood where we were heading in the field of rent on city nonprofit housing and I believe the appeal process between that municipal corporation and my ministry and the bargaining and understanding that are required to keep them in a non-loss situation is what will determine the ultimate rents.

SECURICOR INVESTIGATION AND SECURITY LTD.

Mr. Rae: Mr. Speaker, I have a question for the Solicitor General with respect to the Ontario Provincial Police investigation into possible criminal charges against Securicor. Can the minister tell the House when he expects that investigation to be completed?

Hon. G. W. Taylor: Mr. Speaker, I cannot tell the honourable member when that investigation will be completed or even an approximate date when it can be completed. As with all investigations, we go through the material thoroughly and investigate what is necessary to come to a conclusion as to when an investigation may be sufficiently completed to consult with the law officers of the crown to gain their advice as to whether to proceed further with the matter.

Mr. Rae: The minister has to understand that as soon as any evidence was presented to him or to the OPP or was made public in any way, which took place a year ago, an investigation should have been started. Can the minister explain the delay in this investigation and the delay in the decision as to whether to lay any criminal charges?

Hon. G. W. Taylor: Unlike the leader of the third party, I do not think there has been any delay in the matter. There has been an ongoing investigation. An Ontario Labour Relations Board hearing was progressing and individuals were giving testimony before that hearing. The decision was completed; in fact, there are 66 pages of decision. Naturally we were waiting upon that decision and it was explained to the members in previously asked questions that we would be waiting upon that decision as to the finding of fact.

That information, along with that which is being provided by the investigating officers, has been compiled. They have discussed it thoroughly with their senior officers. They are at present discussing that information, that material as received by their investigating officers, with the law officers of the crown. They are in consultation with them as to whether further information or further investigation is needed. When that is completed, they will come to some conclusion as to the direction and route they should go. But these are not decisions that are taken quickly, lightly, or without some deliberation as to their full nature and consequences.

Mr. Wrye: Mr. Speaker, I would certainly agree with my friend the Solicitor General that these are not decisions that are taken quickly. Considering this matter has been going on for a long period of time now, could he inform the House whether the police investigation was ongoing during the OLRB hearing or whether it was simply stalled while the OLRB hearing was under way?

Could he inform us whether that is the reason for the delay, or whether the investigation even began before the hearing was completed and the decision rendered? What is the reason for this extremely long delay in what ought to be a fairly clear case?

Hon. G. W. Taylor: Mr. Speaker, as with all police investigations, it is not the habit of the Solicitor General to denote the exact date of their commencement or the exact date of completion. The facts are reviewed thoroughly. There are many people to discuss the matter with. As I said earlier, there was an ongoing hearing before the Ontario Labour Relations Board. Some of the same witnesses would undoubtedly be interviewed by the police officers.

Unlike the comments that have been made, the matter is being thoroughly investigated. When I have received the final results and the decision is made as to the direction the law officer of the crown has provided us with, I am sure the members will be pleased with that decision. When it arrives it will arrive, in the fullness of time.

Mr. Rae: With great respect, the Solicitor General cannot have the best of both worlds. If he, his staff and the OPP have been waiting for the labour board decision, they now have the labour board decision; it found that the individual involved and Securicor were responsible for a very serious breach of the Labour Relations Act, sustained, deliberate and unprovoked. Does the Solicitor General not feel that Securicor should at least be required by him and by the registrar to show cause as to why its licence should not be suspended, if not removed?

Hon. G. W. Taylor: On the initial question -- and I am sure the member has heard the Minister of Labour (Mr. Ramsay) mention this in this Legislature -- the Ontario Labour Relations Board, the hearing, did decide that matter. It was able to comprehend the matter, decide on the matter and come to a conclusion on it. As to the hearing, when the registrar has reviewed all the material and reported to his superior officers and then to the Solicitor General, a decision will be made as to whether it warrants a hearing and the activating of the Private Investigators and Security Guards Act to have a hearing or to have the licence removed under that legislation.

3:10 p.m.

LOCATION OF INDUSTRY

Mr. Sweeney: Mr. Speaker, my question is to the Minister of Industry and Trade. We are well aware of the minister's comments that he is prepared to go anywhere and do anything to entice jobs into Ontario. Is he aware of a high-technology electronics firm that is deciding at present to locate either in the city of Kitchener or in Sherbrooke, Quebec?

Apparently the basis of the decision is going to be that Quebec is prepared to offer a $5-million subsidy, whereas in Ontario so far the only offer that has been made is a $2-million subsidy by the industry and labour adjustment program which, of course, comes under the jurisdiction of the federal government. Is the minister aware of this and, if so, what is he prepared to do to compete in this field?

Hon. Mr. Walker: Mr. Speaker, we are not accustomed to conducting such negotiations in a public way. I would be interested to have the member's observations on the matter, and we will certainly be considering it. There are some discussions going on with a number of firms. Many firms approach us on the basis of what kind of assistance might be afforded.

The amount being suggested here as a subsidy by Quebec is a considerable sum and not in the usual category of a rank we would normally contemplate. There are a number of those cases occurring at the moment and we will simply have to make a decision based on the facts. But we are not prepared to negotiate publicly.

Mr. Sweeney: It has been brought to my attention that this company will create between 500 and 700 jobs which the minister knows are badly needed in Ontario. It has also been brought to my attention that one of the attractions of the Kitchener area is the location of colleges and universities with an electronics background.

On the basis of that and on the basis of the fact that we are going to have to compete in the market for such industry, what overall policy does the ministry have to offer when faced with that kind of opposition, or whatever it is called, from another Canadian jurisdiction not from the United States, but here in Canada?

Hon. Mr. Walker: We are not prepared to get into a bidding war with other provinces, if that is what the member means. That would be counterproductive to the entire fibre of this country, so we are not prepared to get into that kind of negotiation. However, if a company -- and I know the one the member is referring to -- shows interest in our province, and we have many things that attract companies -- the member has identified a good number of them -- then we are prepared to talk very seriously with it.

It must be kept in mind that there is a reason why some of these high bids are being proposed. It is usually because the area that is being offered or being used as the area of attraction has no otherwise attractive features to it that would cause a company to go there. We have many things going for us. We feel that getting into a bidding war would be counterproductive and we are not prepared to play that kind of game.

If the member were to ask if I am prepared to come forward and offer five million and one dollars I would say no, that is not the way we would do it. We are prepared to negotiate with the firm. We have dealt with that firm. It has made some other announcements in relatively recent times, and I expect that over the next six months Ontario will be successful and that firm will decide this is where it wishes to locate, because this is the place that will afford it the greatest opportunities for Canadian markets and some international markets. For those reasons we will be successful, but not on the basis of our coming forward with the largest kitty of money and trying to outbid a sister province.

UPPER OTTAWA STREET LANDFILL SITE

Mr. Charlton: Mr. Speaker, I have a question for the Minister of the Environment. No doubt the minister has been briefed on the interim report that was released this morning by the Upper Ottawa Street landfill committee. The report basically takes the position that there is no immediate health hazard but it also sets out very clearly that there are tremendous potential hazards for the future if a number of things are not done. For example, the minister should be aware that the report identified 273 substances in the air.

Is the minister prepared to move immediately on the one concrete recommendation the report makes, which is the collection system and the flaring system for the gases that are leaking out of the dump site?

Hon. Mr. Norton: Mr. Speaker, I just received a copy of the interim report this morning and I have not had an opportunity to read it. I am familiar with the contents in very general terms. Obviously, any recommendations that are made by the committee will be treated very seriously and will be given very serious review by myself and the staff of the ministry.

Not having had a chance yet to read the report, I do not think it would be appropriate for me to jump to any definitive responses at this stage other than to say that obviously I respect the work this committee has done. I think it has acted very responsibly throughout the process and I assume will continue to do so through to its final report. I will treat its work with the seriousness it deserves.

Mr. Charlton: Perhaps while the minister is going through the report with his staff in a little more careful detail he can take note of the fact that the committee identified approximately 1,000 chemicals in ground water, leachate and in the dump site itself and that the committee has clearly established that some of those chemicals are now leaching out of the dump site.

Even if he cannot respond today, could he respond as quickly as possible, because the report clearly shows that leachate has moved as far as 1,600 feet outside of that dump site, which is more than half the distance to the edge of the escarpment? Could he respond as quickly as possible to see what actions his ministry can take to stop that plume of pollution before it reaches the escarpment base?

Hon. Mr. Norton: I reiterate that, on the basis of not having had an opportunity to read the report, my understanding is that the committee recommends that certain measures be undertaken as well in terms of capping the site, which would minimize or reduce the potential leachate problems. The committee also proposes to come back with further recommendations with regard to containment measures. If that is the case, obviously that is something it will be addressing its attention to. I think that ought to be part of the consideration we will be giving in our review of the report.

Mr. Speaker: A final supplementary, the member for Burlington South.

Mr. Kerr: Mr. Speaker, my question is also of the Minister of the Environment. It is a very short one and just requires the short answer of "yes."

Some hon. members: No.

Mr. Speaker: Is this supplementary?

Mr. Kerr: No, this is a new question.

Mr. Speaker: Then first, the member for Hamilton Centre with a final supplementary.

Ms. Copps: Mr. Speaker, I thought maybe the member for Burlington South was going to suggest that he might be swimming in the dump, but I did not think that would be forthcoming.

Mr. Breithaupt: He is going to try to walk across it.

Ms. Copps: Yes. I am sorry that our Environment critic cannot respond to the report today but I understand he is in Hamilton visiting the dump personally.

One of the difficulties that is facing the residents in that neighbourhood is the time frame that has been involved, first of all from the agreement to carry on this study. This is only the first phase of the study. We are looking at a fairly long time frame before the study is completed and, again, a greater length of time before the ministry actually begins to implement some of the recommendations.

Can the minister assure this House, and those members who are carrying out the study under the chairmanship of Dr. Arthur Bourns, that he will not only assist them in providing whatever expertise he can, but if there is a necessary financial contribution that must be made in order to speed up the latter part of the study, the minister will be prepared to put forth not only his moral and environmental expertise support but also any financial support necessary to speed up the final implementation of the study?

3:20 p.m.

Hon. Mr. Norton: Mr. Speaker, I am not sure the latter part was the same as the early part of the question, in that I think at one point the member was referring to the completion of the study and the latter part of the question referred to implementation. In any event, obviously we will be co-operating in any way we can with the committee dealing with the problems related to that landfill site.

ENVIRONMENTAL ASSESSMENT FUNDING

Mr. Kerr: Mr. Speaker, in view of the extraordinary increase in the cost to Halton region in providing studies and information for environmental assessment under that legislation for a sanitary landfill site, will the minister consider financial assistance to help defer costs which are estimated at about $1.5 million?

Hon. Mr. Norton: Mr. Speaker, I am sure the member is very familiar with the operation of this act in that, if I am not mistaken, it was he who introduced it and carried it through this Legislature a few years back. I am sure he is also aware that my ministry does not have funds available for the purpose of carrying out environmental assessments.

Clearly that has to be viewed as part of the total cost of providing landfill sites these days. It is nevertheless important we recognize that landfilling is not the optimum way to deal with our waste, and is going to continue to be increasingly expensive. My ministry does not have funds for that purpose.

Mr. T. P. Reid: Mr. Speaker, the minister is aware that in part of my riding I have the opposite problem: those who are opposed to a landfill site for the town of Dryden are having one thrust on them in their township. They have no funds to fight the town of Dryden that is looking for this, so the antagonists and the protagonists are both unhappy.

Is the minister going to give consideration also to funding those who are opposed to the location of a landfill site, because they often find themselves without the necessary funds to fight the imposition of a landfill site by a neighbouring town or city?

Hon. Mr. Norton: No, Mr. Speaker.

EDUCATIONAL MICROCOMPUTERS

Mr. Bradley: Mr. Speaker, I have a question for the Minister of Education. It is in the light of the kind of response she has received since her announcement, along with the Minister of Industry and Trade (Mr. Walker), of her new hardware, her new computer for education in Ontario.

She has received much reaction, most of it I would say negative, towards her specific proposal -- she may disagree -- and Graham Scott, the director of computer applications at the Ontario Institute for Studies in Education and co-ordinator of Ontario's high-tech trade mission to London, England, this spring has said:

"Getting into hardware is not the smartest thing to do," since it is difficult to compete with countries with cheap labour, but software that is Ontario-created and produced -- educational courseware -- could be sold worldwide. "Producing courseware is smarter than producing hardware."

Since the consensus among those who are expert in the field, and those in the educational community, seems to be that the minister would have been better to abandon or at least consider abandoning her present course of action, concentrating instead on the field of software, would the minister not agree with me she should follow that course of action?

Hon. Miss Stephenson: No, Mr. Speaker. There are experts and there are experts; there are opinions and there are opinions. Only those who have felt uncomfortable about the fact that they made the decision not to participate in the very unique arrangement which has been established for the hardware development have seen fit to make their statements publicly and I respect their right to do so. I would also respectfully suggest that a very considerable number of those with real expertise in the Canadian Advanced Technology Association would not agree with the opinions they read in the Globe and Mail.

However, I believe we have made the appropriate commitment in that we have developed the specifications for a singular educational microcomputer which can be met by any Canadian company that wishes to do so. All of those Canadian companies may participate in this if they wish to do so; they do not want to, so that is fine. We have also made a very strong commitment to the development of courseware that we expect will go on for many years into the future.

Mr. Bradley: In answer to some question or interjection in the House last week the minister said, "Let free enterprise lead the way." Since this computer will not be compatible with most home computers and will not be compatible with computers that are used in industry, and since through the minister's action she has restricted, I am sure against her own free-market inclinations, the competitive field in computer hardware, is she not prepared to listen to wisdom? Not just the wisdom of those people within the industry itself who, as she would point out, do have some self-interest in the position they bring forward, but also of those who are in the teaching profession and who will be implementing this program, most of whom are critical and suggest that she should be moving much more heavily into the field of software, providing the funds there and abandoning this attempt to destroy free enterprise in this particular field.

Hon. Miss Stephenson: I do not know where, other than the Globe and Mail, the honourable member receives his information. We do have, indeed from a number of teachers' groups and a number of those actively involved in courseware development, enthusiastic support for the initiatives we have taken, and I believe the door is wide open to the manufacturers of microcomputers to develop the kind of microcomputer that will serve most appropriately the children of this province, not only in computer literacy but also in the appropriate use of computers in the learning experience.

Those specifications were not drawn up by the Ministry of Education; they were drawn up by educators, with specific knowledge of the way computers can be used, in conjunction with high-technology experts from industry.

This route was specifically chosen in order to ensure that we develop not a narrow kind of expertise but one that would serve most widely all of the students of the province. I believe this is the direction we are pursuing and I believe that all of the naysayers and the rainmakers may in the future be somewhat disappointed.

TRAILER PARK AT ELLIOT LAKE

Mr. Wildman: Mr. Speaker, I have a question for the Minister of Consumer and Commercial Relations in his capacity of administering the Landlord and Tenant Act. I would like to bring to the minister's attention the situation in Elliot Lake, where 65 families who are tenants in a mobile home park are being required to move, on 90 days' notice rather than the 120 days' notice required under the Landlord and Tenant Act, to a much inferior site, a move that will cost them between $1,000 and $3,500.

Does the minister think it fair that people should be asked to move from a mobile home site on that kind of notice? Does he think the law offers adequate security of tenure for mobile home park dwellers?

Hon. Mr. Elgie: Mr. Speaker, first of all I want to extend my personal gratitude to the honour- able member for adding another piece of legislation to this ministry, which has so few already. I will be happy to advise him that the Landlord and Tenant Act comes under the Ministry of the Attorney General and to transfer his message on his behalf to the Attorney General (Mr. McMurtry).

Mr. Wildman: While the minister is consulting with the Attorney General, will he suggest that since the government was prepared to move so quickly in the case of tenants of west Toronto who were threatened with unfair eviction at the end of this month, the government should take similar action with regard to the situation in Elliot Lake and amend the act to increase the period of notice required for tenants of mobile home parks in recognition of the greater hardship experienced by people who have to relocate not only themselves and their furniture but also their homes?

Hon. Mr. Elgie: The record will show the Attorney General what information is requested.

3:30 p.m.

Ms. Copps: Mr. Speaker, I am happy to say my leader is in Elliot Lake today and he will have an opportunity of meeting with those disfranchised tenants.

I wonder if the minister might not simply embrace the bill that was proposed earlier this year by my colleague the member for Prescott-Russell (Mr. Boudria) which was blocked by members of the government. It would have provided one year's notice for those people who live in trailer parks and are served with eviction notices. That bill would have protected the tenants in Elliot Lake.

I would ask the government, with I am sure the co-operation of the member for Algoma-Manitoulin (Mr. Lane), to intervene and introduce the bill that was introduced earlier this year by my colleague and blocked by the members on the government side of the House.

Hon. Mr. Elgie: Mr. Speaker, I have no further comment other than to draw the member's remarks to the minister's attention.

SKILL TRAINING PROGRAM FUNDING

Mr. T. P. Reid: Mr. Speaker, I have a question for the Minister of Colleges and Universities. The minister is aware there have been significant cutbacks in funding for many types of basic skill training in our community colleges, especially in northern Ontario as well as the rest of the province.

Since this is a federal-provincial program and the emphasis seems to be on high tech, but we have lost a lot of seats or positions in terms of some of the basic skills, is the minister aware this is having an adverse effect in a lot of areas? She has had comments from the presidents of George Brown College, Confederation College and so on. What action is she going to take to ensure that some of the basic skills are looked after in this situation?

Hon. Miss Stephenson: Mr. Speaker, I am sure the honourable members are fully aware that about two years ago the minister responsible for manpower and immigration at the federal level determined it was not the federal government's responsibility to provide funding for the basic skills development area of activity. They withdrew funding totally, or at least it was almost totally; they withdrew all of it in the beginning and then replaced a little in the first year.

The province has made up that deficiency in the area of the basic skills development program. We have been responsible for the funding of a program which provides the development of the appropriate level of literacy in order to participate in skills development programs. Since the specific thrust of the new National Training Act has by federal policy appeared to be primarily in the direction of high-tech skills, there has been a concentration on seat purchase by the federal government in the area of high-technology skills.

It was drawn to my attention that there were a number of very important skill programs, particularly at northern colleges, which were being reduced dramatically as a result of this emphasis and that, for example, the field of forestry was being especially attacked as a result of the major reduction in seat purchases in that area. I communicated directly both by letter and in person with the federal minister involved and asked that there be reconsideration of the federal position in skills seats purchases, particularly in northern Ontario, reflecting to him the absolute necessity of the forestry industry to the economy of northern Ontario and asking specifically that he reconsider his position. He has done so to a certain extent, not fully at this point, and we are still pursuing that activity.

TELEVISION IN LEGISLATURE

Mr. Martel: Mr. Speaker, on a point of privilege: Yesterday at the Board of Internal Economy meeting we had an opportunity to discuss television coverage in the Legislature. I want to draw to your attention, sir, that despite all the prattle yesterday about all the adequate coverage we were getting from the press gallery, in fact, the cameras went off when the leaders quit. There were questions from the members for Burlington South (Mr. Kerr), Hamilton Mountain (Mr. Charlton) and so on. It is just inadequate, despite what the government says, and they are not providing it.

lnterjections.

Mr. Speaker: Order. All right now; everybody has had his say.

NOTICE OF DISSATISFACTION

Mr. Speaker: I would like to point out to all honourable members that, pursuant to standing order 28, the member for Prescott-Russell has given notice of his dissatisfaction with the answer to his question given by the Provincial Secretary for Justice (Mr. Sterling) concerning the social development committee report on wife battering and the ministry's response thereto. This matter will be debated at 10:30 p.m. this evening.

RESPONSE TO WRITTEN QUESTIONS

Mr. Roy: Mr. Speaker, on a point of privilege: We are always pleased to see you defending the rights and privileges of the members of this House.

I want to raise again an issue I have raised on previous occasions. It deals with written questions on the order paper under standing order 81. My colleagues and I, and I am advised I am not the only one, have asked a number of questions that have been put off. Some of these questions are inoffensive. For instance, they just ask that correspondence be tabled.

In two questions I have, I am asking the Attorney General (Mr. McMurtry) to table correspondence with Mr. Morley Rosenberg and other people in relation to his judicial appointment. These questions have been on the order paper for quite some time. My colleagues have experienced the same thing.

I do not know whether the government House leader is leading the charge on this, but many of us have received a pat answer basically saying, "The information and questions concern expenditures undertaken by various ministries and secretariats and may be sought through the regular estimates process." I suppose that applies to all questions on the order paper. Theoretically, I suppose all of them could be obtained through the estimates process.

It was never stipulated in standing order 81 that questions on the order paper should not relate to anything having to do with estimates or expenditures by ministries. Basically, they are undermining the very purpose and process of order paper questions. They are starting to be contemptuous of the process.

Mr. Speaker: I think the appropriate ministers will have the benefit of the member's remarks when they read Hansard.

ATTENDANCE AT COMMITTEES

Ms. Copps: Mr. Speaker, on a point of order: When I came into the House this afternoon I received a letter, as did all members of the standing committee on social development, relating to our co-operation in attending the social development committee hearings. It was my understanding the Minister of Community and Social Services (Mr. Drea) had to sit for more than half an hour yesterday while waiting for members of the committee to arrive.

I want to say for the record that members of both opposition parties were present and ready to go ahead with the estimates, but the government had to marshal its forces. I would ask the minister to direct these comments --

Mr. Speaker: Order. That is very interesting indeed.

INTRODUCTION OF BILLS

NIAGARA PARKS AMENDMENT ACT

Hon. Mr. Baetz moved, seconded by Hon. Mr. Elgie, first reading of Bill 49, An Act to amend the Niagara Parks Act.

Motion agreed to.

Hon. Mr. Baetz: Mr. Speaker, I wish to advise the House that the amendments I am proposing to the Niagara Parks Act are straightforward, administrative ones clarifying and expanding the already existing powers of the said act.

The first amendment is for the purpose of clarifying the commission's powers to control access to the lands of the commission. The second amendment gives the commission extended powers to control the use of signs and advertising devices on commission property. The third amendment is for the purpose of assigning powers to deal with property abandoned on the lands of the commission.

These amendments will contribute to the efficient operation of the Niagara Parks Commission and the lands within its jurisdiction.

3:40 p.m.

CITY OF KINGSTON ACT

Mr. Brandt moved, seconded by Mr. Robinson, first reading of Bill Pr31, An Act respecting the City of Kingston.

Motion agreed to.

Mr. Roy: Mr. Speaker, I just want to say to my colleague the member for Sarnia (Mr. Brandt) that when he makes it into cabinet he will have assistants who will take care of those papers.

Mr. Speaker: Now for the introduction of the bill.

ONTARIO FRENCH LANGUAGE SERVICES ACT

Mr. Roy moved, seconded by Mr. Boudria, first reading of Bill 50, An Act respecting French Language Services in Ontario.

Motion agreed to.

Mr. Roy: Mr. Speaker, you will recall, and I am sure the government House leader recalls as well, that this bill received the approval of the Legislature and, in fact, the minister spoke in favour of it. That, of course, was before the Premier (Mr. Davis) imposed a veto on the bill.

This bill, as the members know, places a duty on the government of Ontario to provide, as of right, public services in the French language -- and they are coming along slowly -- to certain citizens of Ontario, subject to certain conditions as set out in the bill. The bill also establishes the office of French-language co-ordinator and language service board to aid in improving the availability of French-language services in Ontario.

M. le Président, vous vouliez certainement avoir quelques mots en français quoiqu'on présente une législation aussi importante que celle-ci. C'est tout à dire enfin que la législation a reçu l'approbation de tous les membres de l'Assemblée maintenant depuis 1978 et surtout du Ministre des Affaires intergouvernementales (M. Wells). Mais de tout façon, mon collègue le membre de Prescott-Russell (M. Boudria) et moi-même représentons ce projet de loi qui fait l'obligation au gouvernement de l'Ontario d'assurer de droit des services publiques en français aux citoyens de l'Ontario sous réserve de certaines conditions énoncées dans le texte. Ce projet de loi établit aussi le poste de coordinateur des services en langue française, ainsi que le conseil des services en langue française, aux fins d'améliorer la disponibilité des services en langue francaise en Ontario.

Mr. Speaker, I want to advise you that everything I have said is in order.

MOTION TO SET ASIDE ORDINARY BUSINESS

Mr. Swart moved, seconded by Mr. Philip, that pursuant to standing order 34(a), the ordinary business of the House be set aside to debate a matter of urgent public importance, namely the failure of this government to address the serious situation facing farmers all across the province who, without immediate financial assistance, will be unable to plant crops this spring, the inadequacy of the government's Ontario farm adjustment assistance program and the failure of the government to introduce a program of medium-term, low-cost credit.

Mr. Speaker: I would point out to all honourable members that this notice was received at 11:50 a.m. Another somewhat similar notice was presented by another member and arrived in my office at 11:56 a.m. I, therefore, recognize the motion in the name of Mr. Swart. I am prepared to listen for up to five minutes to why you think the ordinary business of the House should be set aside.

Mr. Swart: Mr. Speaker, we in the NDP are calling for this emergency debate because, unlike the Minister of Agriculture and Food (Mr. Timbrell), we are aware that a major crisis exists in the farm community. The crisis is simply that hundreds of farmers will not be planting crops this year because they are unable to secure the finances to do so.

I suggest the emergency part of this resolution is twofold. First, the Minister of Agriculture and Food today turned down the request made a week ago by the Canadian Farmers' Survival Association for this government's guarantee of loans to those farmers who planted last year and cannot get the money this year. Those farmers are prepared to limit the acreage to last year's amount and provide their crops as guarantee. The sad part of the turndown was that no alternative was provided by the minister. If this holds, and if there is no help, every one of those farmers who cannot plant will be a bankruptcy or a liquidation statistic either later this year or next year. Many suppliers will also go under because those farmers will not be planting.

Second, it is an emergency because the deadline for planting is upon us. It is obvious that, if something is not done today, tomorrow or at least this week, the game is over for the farmers. This emergency situation is upon us because, ever since this minister has held the Agriculture portfolio and before that, Ontario has done less for its farmers than any other agricultural province in this nation.

There is no long-term credit program, such as all other agricultural provinces have. The minister has refused to improve income stabilization. Instead, he has thought for a year or a year and one half about in-part income stabilization. Although he knows that is impossible, he does nothing on his own. OFAAP is totally inadequate. The assistance that has been given out under section B this year is just $50,000, although $18 million was given out last year and the farmers' situation is worse now. The criteria in the guarantee section, section C of OFAAP, have been cut back. The budget of this government this year has cut assistance to farmers by 12 per cent.

Finally, the minister has refused to use the clout he had with the banks to insist on greater leniency. He could have threatened a provincial moratorium. Bank profits are up 41 per cent in the first quarter of this year. Why should the banks not bear a fair share of this burden that is being borne only by the farmers?

The minister cannot even tell us today what the real situation is with regard to the number of farmers who are not going to plant this year. He has done no monitoring. All the evidence points out that this situation is really serious. Net in-farm income was down 14 per cent last year; expenses were up four per cent. Forty-one per cent of all the bankruptcies this year so far have been in Ontario, although we have only 25 per cent of the census farms. Twelve per cent of all the farmers who have Farm Credit Corp. loans are in default, and the amount this year is up 60 per cent above what it was last year.

3:50 p.m.

I want to say the farmers in Ontario are as good as any in Canada or elsewhere. The reason there are more of them in trouble is the fault of this government, not the fault of the farmers. An indication of the seriousness of this is that suppliers are now, in some cases, supplying seed, fertilizer and gas on the basis of a 40-60 split of the crop. For the first time, Ontario farmers are going to become sharecroppers.

This issue is an emergency because it is nearing the end of the planting period and because today the Minister of Agriculture and Food turned down the funding proposal of the Canadian Farmers' Survival Association. The minister may oppose this resolution by saying that agricultural estimates start tomorrow and it can be discussed there. What we do not need is an academic discussion in the committee tomorrow or this week.

This House is a decision-making body, and the appropriate forum. This debate must proceed; the farmers need help.

Mr. McGuigan: Mr. Speaker, we rise to support the motion to set aside the ordinary business of the House. Every member of this Legislature who has farm constituents has, I am sure, received recent phone calls from farmers who have had their application to the Ontario farm adjustment assistance program returned to them, offering approximately 50 per cent of the credit needed to plant their crops. Members are also aware that, due to backward planting weather, farmers are 10 days to two weeks behind in planting their crops.

This delay cuts two ways. The delay has allowed a chance for government action still to be effective. The delay in planting, not only in Ontario but all across North America, has adversely affected crop yield prospects for the fall of 1983. The effect should have a positive effect on prices, offsetting the depressing effect of fairly high storage stocks on hand.

The delay also has an effect on farm suppliers who in many cases are faced with the question of whether or not they should get in additional supplies of shorter day varieties of seeds, and the resulting changes in farm chemicals that may be required. For instance, farmers who change from corn to soybeans will require different seeds and supplies and, in some instances, even different equipment.

In recent days, when we brought the fact that farmers are having trouble financing crop production to his attention, the minister asked for individual cases to be brought to him. We are attempting to do this, but it takes time, and time is running out. The minister has also responded to recent questions from our side of the House as to whether or not further assistance is of help to the farmers, or whether the assistance would dig an even deeper hole. If we were talking about the prospect of selling corn at harvest time at about $2 per bushel, as was the case last fall, and if we were talking about interest rates in the 20 per cent range, as existed a few months ago, one could have some sympathy with the government's position.

Conditions have changed, some due to man-made events and others due to the weather. North American crop yield prospects have been dealt a heavy blow by the wet, cold weather we are experiencing. Planting schedules are about 10 days behind in Ontario, and similar delays have occurred throughout the US corn and soybean states. Yield prospects are down and the overall price prospects have been enhanced.

Man-made change has been brought about by the policies of the US government. Let me give just a short review of US agricultural history: In the early 1970s, the US was the leading world exporter of farm produce. It was producing more grain than domestic and export sales could absorb in spite of the 60 million acres of crop land placed in reserve in the US soil bank program.

There were large stocks of grain in the commodity credit corporation hands. In 1972, the Union of Soviet Socialist Republics made a major policy change. The country that had demonstrated scientific advancement by putting up the first globe-circling satellite in 1959 decided to buy grain in response to its own crop failures. This was a major change in food policy for them. Previously, they had met such shortages by killing their livestock and reducing protein supplies to the population. In 1972, they entered the world market and bought up all the world's surplus stocks. As you know, grain prices skyrocketed and, in 1973, the US government released 60 million acres of crop land in the soil bank.

Production also increased in other parts of the world in response to this. In 1982, the US had more grain on hand than domestic markets and export markets could absorb, as in the early 1970s. Faced with the prospects of falling prices reducing export earnings to approximately $40 billion in food products, and faced with the prospect of bankrupting their farming industry, they again reverted to a soil bank, although in a slightly different form. The United States payment-in-kind, or PIK, program has been overwhelmingly accepted by farmers with the result that corn acreage is reduced by 30 per cent and ending stocks for 1983-84 are projected to be a billion bushels less than last year.

Corn prices today at Chatham trackside are $152.35 per metric ton, or $3.7 per bushel. The price to the farmer is slightly less at $3.72, with 15 cents handling charge. In Chatham today they are offering $2.92 for corn delivered at harvest time, $7.13 per bushel for new soybeans and $7.06 for old soybeans.

These are prices that can be locked in today. The government could insist, if it so decided, that at least one third of a crop produced by a farmer assisted under an emergency program, such as the Canadian Farmers' Survival Association has requested, be locked into a fall delivery contract.

If the government believes these farmers should be driven out of agriculture, there is no point in driving them out at planting time. The overhead costs of the land will go on all summer regardless of whether a crop is planted or not. The interest clock will go on ticking even if farmers' lands are taken over by a financial institution. If the plans are to drive these people to the wall, they should be announced next fall and these people put on notice that there will be no more --

Mr. Speaker: The member's time has expired.

Mr. McGuigan: Just one more sentence.

Therefore, they should sell out. But today with the present price prospects, people who are capable of planting and caring for a crop should not be denied the opportunity to do so.

Hon. Mr. Timbrell: Mr. Speaker, you will recognize after listening to the comments of my friends opposite that the subjects raised by them were discussed at some length during question period. I did read into the record, with the kind permission of the members of all sides, the letter I sent today to the president of the Canadian Farmers' Survival Association.

When we start estimates tomorrow -- and we start tomorrow morning at 10 o'clock, I believe, and we will have 20 hours of discussion on these and other related matters over the coming weeks -- I will then want to reply in some detail to some of the points raised by the member for Welland-Thorold (Mr. Swart), especially to take issue with the way he uses certain numbers to try to support his point of view. I understand that is part of the political process and that, no matter how many times I explain the true numbers, he will do with them what he will.

I do, though, want to take issue with one thing he said. The honourable member said that in the course of the letter I sent to Mr. Wilford no option, no alternative, was described. That is not correct. If the member will take the time to look at what I said in Hansard for today, I pointed out to Mr. Wilford that we asked him and his associates for names. We wanted specific cases to support their allegations about the lack of credit and about this crisis.

Mr. Cooke: You don't believe it is a problem.

Hon. Mr. Timbrell: Listen, I sat here and listened very closely to everything the member's colleague had to say. I would appreciate it if my friend would do the same for me.

Mr. Cooke: You don't believe it is a problem. That is what you are saying.

Mr. Speaker: Order.

Hon. Mr. Timbrell: I want to point out that this process netted fewer than 100 names. Every one of those names is important because every one represents a farm family, a farm operation, and they are in varying degrees of distress. I pointed out in my letter to that gentleman, and I point out to the member again, that in some cases we have spent literally the equivalent of days on end working with individual farmers and their lenders to try wherever possible to work out the restructuring of their debts to allow them to carry on, to allow them to retain what viability they have or to regain viability.

It is not a question of wanting to force people out; the member for Kent-Elgin (Mr. McGuigan) knows that is not the case. The facts are that on an individual basis we do evaluate the viability of the farm operations. We look at exactly what has happened, at what the true facts are, and then we apply, on an individual basis again, a judgement of what the future prospects are, including everything the member opposite has mentioned -- the effects of the PIK program, the effects of the reduced acreage program, the effects of the much lower prime interest rate, all those things -- and arrive at a determination of which cases we can put the taxpayers' money into or behind. We intend to continue that on an individualized basis.

4 p.m.

I mentioned the work we were doing with the Ontario Federation of Agriculture, the Christian Farmers Association and the Ontario Cattlemen's Association. We are prepared to work with any group but I, as a minister of the crown, must insist that we retain the principle of financial viability. We cannot set that principle aside and allocate taxpayers' money without regard to the viability of the operation.

The members would not want us to do that in any other aspect of government, and I am sure my friend -- I am looking at the member for Kent-Elgin (Mr. McGuigan) because I think he is a little bit more reasonable and is prepared to listen -- would not want us to do it in agriculture.

To be sure, we should take account of all the things the members have mentioned. Throughout my tenure as Minister of Agriculture and Food I have made it clear that before we deny any application we must be sure that every stone has been turned; we must be absolutely certain we possess all of the facts before we make a decision if it is going to be a negative one or, for that matter, a positive one.

With respect, the matters are being addressed. We will start tomorrow morning at 10 o'clock, about 18 hours from now, to consider these very matters. I submit that the Orders of the Day should proceed.

Mr. Speaker: I have listened carefully and with great interest to the submissions put forward by the mover of the motion and the representatives of the other two parties.

To my mind, an underlying principle is involved here. We are talking, of course, about people who are feeling the effects of the current economic conditions together with the rather backward weather we have had.

I point out to all honourable members that this group is not alone in the problems it faces. I also point out that this matter has been the topic of many questions.

Mr. Cooke: This is stretching it.

Mr. Speaker: No, it is not; just listen. Going back many months, it has been the topic of many submissions made to the Minister of Agriculture and Food. I would find it extremely difficult, in my own mind, to rule that the motion is in order.

Mr. Breaugh: This will not go over well in your home township.

Mr. Speaker: No. I said I would find it difficult for the reasons I have stated. I am not diminishing the importance of the matter; I want to make that very clear. But in my interpretation of the standing orders, while the matter is of urgent importance to that particular group, I cannot in all honesty rule that it falls within the ambit of standing order 34(c)(i), which says it "must relate to a genuine emergency, calling for immediate and urgent consideration."

While as I say it is of great importance to those people who are involved -- I do not doubt that, nor do I diminish that -- I must rule that the motion is out of order.

Mr. McKessock: Think about it when you are having your supper.

Mr. Speaker: I do constantly; coming from the area that I do.

Mr. Swart: Mr. Speaker, regretfully, and because I genuinely believe a real emergency exists among many farmers and their ability to plant their crops, I must challenge your ruling.

4:26 p.m.

The House divided on the Speaker's ruling, which was sustained on the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Birch, Brandt, Cousens, Cureatz, Davis, Dean, Drea, Eaton, Eves, Fish, Gillies, Gordon, Gregory, Harris, Henderson, Hennessy, Hodgson, Johnson, J. M., Jones, Kells, Kennedy, Kerr, Lane, Leluk;

MacQuarrie, McCaffrey, McCague, McNeil, Mitchell, Norton, Piché, Pollock, Pope, Ramsay, Robinson, Rotenberg, Runciman, Scrivener, Sheppard, Shymko, Stephenson, B. M., Stevenson, K. R., Taylor, G. W., Taylor, J. A., Timbrell, Treleaven, Villeneuve, Walker, Watson, Wells, Williams, Wiseman.

Nays

Allen, Boudria, Bradley, Breaugh, Breithaupt, Bryden, Cassidy, Charlton, Conway, Cooke, Copps, Cunningham, Di Santo, Edighoffer, Elston, Grande, Haggerty, Johnston, R. F., Kerrio, Lupusella;

Mackenzie, Mancini, Martel, McClellan, McGuigan, McKessock, Miller, G. I., Newman, Nixon, O'Neil, Philip, Rae, Reid, T. P., Renwick, Roy, Ruprecht, Ruston, Samis, Spensieri, Swart, Sweeney, Van Horne, Wildman, Worton, Wrye.

Ayes 58; nays 45.

4:30 p.m.

ORDERS OF THE DAY

CORPORATIONS TAX AMENDMENT ACT

Hon. Mr. Ashe moved second reading of Bill 38, An Act to amend the Corporations Tax Act.

Hon. Mr. Ashe: Mr. Speaker, this bill, An Act to amend the Corporations Tax Act, contains amendments arising out of the budget of May 10, 1983, presented by the Treasurer (Mr. F. S. Miller), some amendments resulting from the federal initiatives and some administrative and technical amendments.

The income tax exemption provided to corporations in respect of income that qualified for the federal small business deduction has now been in existence for just over a year. It has had a very positive effect in alleviating the cash-flow problems of these corporations.

The exemption was originally intended to apply for only two taxation years ending after May 13, 1982, and before May 14, 1984. The period of exemption is now being extended for one more year so the qualifying income will be exempt from the Ontario income tax for any three taxation years ending between May 13, 1982, and May 14, 1985.

The general rate of corporate income tax is increased from 14 to 15 per cent and the rate applicable to income from manufacturing and processing operations, mining, logging, farming and fishing is increased from 13 to 14 per cent.

The tax rate for income from small business after the expiry of the exempt period will remain at 10 per cent. This is the same rate as was applicable to such income before the introduction of the temporary income tax holiday.

Another budgetary proposal implemented by this bill is the introduction of temporary capital tax relief for loss corporations. Currently, a corporation whose taxable capital is less than $1 million pays a capital tax of $50 or $100, whichever is applicable. There is a notch provision applicable for taxable capital between $1 million and $1.2 million. Above that figure, the corporation is liable to a tax of three tenths of one per cent of the taxable capital.

It has now been provided that a corporation whose taxable capital is between $1 million and $2 million and has no income for the year, or has incurred a loss as computed for this purpose, will also be eligible for the flat tax of $100 instead of the higher tax calculated at the normal rate. This flat rate will apply to a maximum of two taxation years ending after May 10, 1983, and before May 11, 1985.

The federal government in its budget of November 12, 1981, had announced several changes to the method of income computation for tax purposes. The Treasurer, in his 1982 budget, had stated that Ontario would not parallel the federal proposals relating to restrictions in reserve claims, the capital cost allowance claims and iron ore mining and processing.

The federal proposals have now been legislated. This bill contains amendments that will permit the corporations to claim reasonable reserves in the same manner as they were permitted to do prior to the federal changes. The other two items require changes to the regulations, and these amendments will be carried out soon.

Ontario agrees with the federal amendments relating to the income from personal services businesses, and these federal changes will automatically apply for Ontario purposes.

The federal budget of April 19, 1983, announced that the extension of the period over which losses incurred in one year can be carried back or forward. This is a step in the right direction, and Ontario will parallel this federal amendment.

These are the major amendments contained in this bill. Besides these, the bill contains a few technical and administrative amendments.

Mr. T. P. Reid: Mr. Speaker, I should say at the outset that the Liberal Party will not support Bill 38, not only on the basis that we do not like the budget generally and most of the budget provisions but also because we think it is contradictory to the spirit of what the Treasurer said he was trying to provide in Ontario.

The Treasurer has said on occasion, both before the budget and during, that he wanted first of all a consumer-led recovery, and we will talk about that when we come to what he has done to the personal income tax in the province. He also said the private sector was to be the engine of growth and the primary force in providing new jobs in the province. The Treasurer was looking to the private sector, private entrepreneurship and private capital, to produce jobs for the approximately 555,000 people who are unemployed in Ontario.

As with almost all government documents and bills, there are some good things in this bill and there are some bad things, just as there were some good things in the budget and some bad things.

Obviously we do not disagree with the tax holiday given to small businesses or with section 19, which deals with the capital tax for firms having under $1 million in paid-up capital. However, while the Treasurer giveth with one hand in section 19, he is taking away with the other in section 11 of the bill. It is that principle in the bill that we on this side object to.

The Treasurer, as any good politician would do, was very careful not to highlight in his budget statement the fact that he was increasing the corporation tax from 14 to 15 per cent. The --

Interjection.

Mr. T. P. Reid: I only caught part of that but I think I can fill in the rest.

Hon Mr. Davis: I'm sure you can. The Young Presidents Organization has taken over your party.

Mr. T. P. Reid: I see. They are all under 60, I understand, for a change.

In any case, section 11 amends section 30 of the said act by striking out "14 per cent" in the fourth line and inserting in lieu thereof "15 per cent." Obviously this is going to impact on the forestry, mining and manufacturing sectors in the province. Again this is a blatant contradiction of exactly what the Treasurer has said publicly was the stated view of his budget.

I would like to give some background on the situation we find ourselves in. Corporate profits are projected to be $10.8 billion in 1983, up $3 billion from 1982. However, this level is still substantially below previous years -- $11.7 billion in 1981 and $13.2 billion in 1980 -- even before adjusting for inflation. Obviously increasing the corporate tax rate will only slow the recovery and delay the return to pre-recession levels of corporate profitability. Reduced profitability will ultimately mean lower employment growth. That is the gist of the argument.

4:40 p.m.

Obviously if we are going to have a recovery led by the private sector and the jobs that are going to flow from that recovery, we are going to require investment, and large amounts of investment, by the private sector. Only when they invest in new equipment, in new plants, in new products and in new technology will they provide the jobs that are associated with these things. Yet the Treasurer, speaking out of both sides of his mouth on this one, has said we are going to increase the corporate tax by one per cent, from 14 to 15 per cent.

It is not just an economic question, as the Treasurer is the first to realize and understand, because this tax is going to take some $70 million directly out of the corporate investment pool in terms of the increase in the provincial tax, but there is also a psychological factor that is probably equally important, if not more so. The Treasurer is giving the private sector mixed signals. He is saying, as I have said, "We expect you to invest and provide the jobs and at the same time, by the way, we are going to tax you before you even have a chance to do that."

I have not been a fan of the last couple of federal budgets, particularly Mr. MacEachen's -- Mr. Lalonde seems to have improved over that sad and sorry performance -- but at the same time, less than a month before this Treasurer's, Mr. Lalonde prepared for taxes to come in the future when the recovery presumably will be well under way and when the corporate profits and the rest of us can sustain the psychological and fiscal impact of these increased taxes, both in terms of the Corporations Tax Act and in terms of personal income tax.

The Treasurer in this province is doing the opposite and his whole philosophy is to spout a lot of nice-sounding clichés, but in reality his actions betray, and have betrayed him, in increasing, as he is doing under Bill 38, the corporate tax.

Who is this going to affect? It is going to affect, first of all, the forest industry, which has had a calamitous past two years in particular in terms of corporate profits. They have been at a low that has not been seen for some time and they are going to have a reasonably slow recovery because of the competition they are getting from the southern United States, from Europe and even from some of the Third World countries now in terms of forest products, lumber and pulp and paper.

The mining sector almost disappeared for a while during this recession. We know about the layoffs at Inco and at Mattabi Mines around Ignace, and all across northern Ontario, how badly mining profits and therefore capital available to the mining industry were depleted in the past year and a half or two years and, obviously, what that did subsequently to the employment picture.

In the manufacturing industry, we know about the 5,000 jobs a week that were being lost to unemployment, some of which will not be recovered, partly because of the severity of the recession and partly because -- I do not want to get off on too much of a tangent -- of the wrong-headed fiscal management of this government. I will talk about the deficit at some length when we get to talk about Bill 34.

The fact remains that the areas most sensitive in our economy are resource sectors that are meeting increased competition from all over the world; competition that in many cases is heavily subsidized by the state, particularly in Third World countries where they feel they have to subsidize the export of their natural resources. In these very areas the Treasurer comes along and whacks them with a stick just as they are starting slowly to revive.

I do not make these remarks idly. I was at a resource company function not too long ago. The president came up to me and said sotto voce: "Why is Miller doing this to us now? Why is he doing it? We thought he understood our problems and our situation." This gentleman may be doing the Treasurer an injustice, but I do not think he would be called a socialist or even a Liberal. He was concerned, and somewhat consternated, to find this particular item in the provincial budget.

We on this side agree that everybody should pay his fair share of taxes, whatever that means, and however that pie is divided up. But we also realize that there are times in our economic life, and the Treasurer understood it in terms of small business, when we have to hold back that fiscal stick and give those particular sectors a chance to revive and use the profits they hope to reap, as they come out of this recovery, for plant modernization and all the rest.

It is strange and, as I have said, contradictory, for us as a Legislature to have Bill 38 before us today. The increase in the corporations tax rate will remove directly, using the Treasurer's own figures, some $70 million from corporate profits. However, the indirect effect, i.e., discouraging a rapid recovery, may well lead to larger losses.

I was at a luncheon where Mr. Lalonde spoke. The Treasurer was sitting three or four chairs from him. It was a luncheon where there were investment managers, financial people from all over the world, from as far away as Japan. Mr. Lalonde was the guest speaker at that luncheon and talked about his federal budget.

I might say I was impressed with the graciousness of Mr. Lalonde; and I am not a Mr. Lalonde fan particularly. Mr. Lalonde looked down at the Treasurer and said: "I see my colleague from the Ontario Legislature, the Treasurer, is here with us. I hope" -- because the Treasurer was wrestling with his personal conscience at the time -- "he will remain Treasurer of Ontario at least until the next election." He did not say that, but he did say "for some time to come." I thought that was quite gracious of him in view of the fact that our Treasurer was not quite as gracious in his remarks about Mr. Lalonde and the TV cameras.

The message of Mr. Lalonde, the federal finance minister, was basically this: "We are out to restore confidence in the Canadian economy. We have done it with the various budgetary measures, but we also want you to know that, on a psychological level, we expect the private sector to lead the recovery, to provide the jobs now and in the future. We want you to know we have confidence in this country and this economy. We are not going to hit you with a corporate tax stick at this time."

The Treasurer sat there and listened to this. Of course, it was after he had brought down his budget. But the fact is, the federal finance minister is playing one tune and the Treasurer of Ontario is trying to play in the same orchestra, but he is playing an instrument for which there is no place in this orchestra -- in this case Bill 38, section 11, increasing the corporation tax.

4:50 p.m.

Just to reiterate, we find this particular item of this bill to be contradictory to the thrust of the 1983 Ontario budget. It is going to take $70 million directly out of corporate profits which will not be available, therefore, for reinvestment and the job creation we are all looking for. Believe me, the psychological effect, which is there and which is strongly felt, is having an even more negative effect than the actual dollars that are being lost.

We could see, in good times and as the economy recovers, increasing this tax when the companies involved in the resource sector and in the manufacturing sector could afford it. Now they cannot afford it, either financially, economically or psychologically. For that reason we intend to vote against this bill.

Mr. Breaugh: Mr. Speaker, we will support Bill 38 in principle. To be fair about it, I think one has to look at the complexity of the bill and try to analyse whether a positive or a negative thing is occurring here.

If one analyses the various sections of the bill, one will see some contradictions. At the same time that the Treasurer and the Minister of Revenue are proposing to increase by one percentage point the corporate tax rate, the bill is extending the tax holiday for certain other types of corporations.

The reason we support this legislation in principle is that this distinction is necessary. One has to look at the corporate sector of our economy and say that in the private sector there are some parts of the corporate world that are still having great problems; most notably, I think most of us would identify those as the smaller businesses.

I am not a particular advocate of the school of thought that believes a recovery is under way, but I agree that if you are looking for positive signs in the economy you will see some indication that some of our larger corporate citizens are beginning to increase their profit margins. There is some indication of a turnaround that is not present in the ordinary working person's attitude towards life. If one were to analyse it from the latter perspective, one would have to say there is not a recovery under way yet.

However, if one is looking for positive signs, in some of the corporate ledgers one would be able to find some increase in profits, some return to stability and some long-term indications that they can now afford to pay a slightly larger percentage of their profits in corporate tax.

One of the things we would agree with, in accepting that attitude, is that it has been our point of view for some time now that if a recovery is to occur, it will occur in both the public and the private sectors.

To fund the public sector recovery, one has to have a tax base. This measure moves, we think with some logic, to identify not the corporate world at large, not all businesses, because I think it would still be very wrong to say that all businesses are on the road to recovery -- I do not think anyone could say that with a straight face -- but some parts of the corporate world that would be in a position to pay an additional amount of taxation.

If one looks at the Ontario budget, we are not talking large amounts of money. We are talking about large amounts in terms of my personal wallet, but for the Treasurer of Ontario, in designing a budget of this size, this $70 million in revenue is not a large amount of money.

I think what the Treasurer has proposed here is supportable in principle; that is, to try to identify those sections of the corporate world that can share in the cost of rebuilding the economy and to exempt those portions that cannot. On those two basic points the legislation that is before us this afternoon is supportable in principle.

We would be a little bit remiss on this side of the House if we did not point out, though, that there is a touch of irony in the legislation we will be dealing with today.

When one looks at the corporate world and sees that the Treasurer had the temerity to suggest a one percentage point increase for some, one understands how gingerly, how tenderly, the Treasurer moves in this field.

However, if one looks at what the Treasurer is proposing for everybody else and at the kind of income tax surcharge that is going to be introduced in subsequent legislation later this afternoon or this evening, one sees that he is not quite so cautious about that. When he dips into the private pocketbook, he seems to be quite bold; he is suggesting a surcharge of five per cent for a whole range of people.

He turns the tables of selectivity, so to speak, when he moves into the ordinary working man's and working woman's paycheque. He is not quite so timid in that regard and is a little bolder in his attempt to extract funds.

I think it is a measure of this government's personal set of priorities, and probably a reflection of the Treasurer's personal priorities, that when he wants money out of people and he moves to individuals, he is talking about a five per cent surcharge, but when he wants money out of corporations and he is talking about a select group of corporations -- probably only those that are showing a profit and probably only those that are larger -- he then talks about a one per cent increase.

In conclusion, Bill 38 is on balance a supportable piece of legislation. It makes what I consider to be the necessary distinctions between businesses that have not yet participated in the economic recovery and those that have.

If we had a chance to quibble with it as we went through all the amendments that are proposed in this legislation, we would see how close the Treasurer of Ontario is to the Minister of Finance for Canada. If one is looking for differences in their approaches to economic recovery and towards the private sector or the public sector, one needs to haul out a microscope on this kind of legislation because there are no discernible differences on the surface. If there are differences, they perhaps are in the colour of the jackets they wear when they present their respective budgets to their respective parliaments. So there is a unity here, which is somewhat disturbing from two supposedly slightly different political parties, that is worth noting.

On balance, we support the legislation. We could go through the various amendments and find some things we do not like and we may do some of that when it goes through committee of the whole -- but on balance we think the principle here and the manner in which the Treasurer purports to take one percentage point more from the corporate sector in this time of economic recovery indicates a balanced approach between the private sector and the public sector and simply says to those corporations fortunate enough to be participating in the early part of what some call the economic recovery that they have to pay their fair share.

We have always advocated this principle of taxation as being fairest: to try to identify those who have an ability to pay and ask them simply to pay their fair share.

Hon. Mr. Ashe: Mr. Speaker, I appreciate the comments made by the two critics from the other parties. One ended up being very supportive of the bill and yet came to the conclusion that it was not supportable. The other, from the third party, recognized all the balance in the bill -- and I think that is exactly it -- and indicated general support for it.

5 p.m.

I suggest that the member for Rainy River (Mr. T. P. Reid) has failed to look at the bill in totality. He has failed to look at the budget in totality. If he thinks there is a negative increase on the corporate sector through the changes proposed within Bill 38, let me indicate a few of what I suggest are incorrect conclusions he has reached from the same information we both have.

First, he made specific reference to the mining and logging industries and tied them into the 15 per cent overall corporate tax rate. L.et me point out to him that for profits derived from manufacturing, processing, farming, fishing, logging and mining there is a one per cent credit deducted, which effectively reduces the rate to 14 per cent. His number of 15 is incorrect.

He also points out that taking $70 million out of corporations' pockets at this time is very negative to the economic recovery that has already started. All these things have to be put in the proper perspective. Apparently he ran into one corporate head who may not have looked in totality at the budget or even at this bill and who had some negative remarks. Frankly, I do not think we have heard from any, including that one, who did have any great negative concerns about the budget in total.

A companion piece of legislation that became law last Friday when it received royal assent, the Retail Sales Tax Amendment Act, gave to corporations not the $70 million in addition that the major corporations are going to be putting in because of the one per cent increase in the tax rate, but by broadening the exemptions on production machinery and equipment through changes in the Retail Sales Tax Act gave back to the corporate sector $70 million plus an additional $10 million, a total of $80 million. I do not know about the member's book, but in my book $10 million ahead on one particular sector is a pretty good deal. I would take it any time. I would even take the interest on it for a few days as being very helpful.

My colleague the member for Oshawa (Mr. Breaugh) very adequately pointed out that there are large corporations that have had problems in the last few years. There is no doubt these are the ones that get the headlines. But we have also had many large corporations that have gone through all right. They are big enough and diverse enough that they are able to go through tougher times. In the case of the small corporations, in many cases they do not have that kind of longevity behind them. They do not have that diversified base behind them. They do not have the capital behind them.

The broadening and the extension of the tax holiday for small businesses will put another $180 million into the private sector for a further year of exemption. That will encourage and foster the further recovery efforts that have already been made and are obviously being recognized in the marketplace.

Similarly, the other member talks about the corporations that are going to go under because of the increase. May I point out to him that they pay only the income tax portion, the rate we are talking about, when they make a profit. If they are in a flat position or a nonprofit-making position, it does not matter whether it is 10, 20 or 100 per cent, because it is 15 per cent of nothing.

Mr. T. P. Reid: I did not say that.

Hon. Mr. Ashe: Sure you did.

Mr. T. P. Reid: I did not.

Hon. Mr. Ashe: For those corporations that are in a loss position or a break-even position, the break they get in the next two taxation years in capital tax saves them a considerable bit of pocket money.

Mr. T. P. Reid: Mr. Speaker, on a point of order: My friend the minister was referring to something his colleague from Oshawa said. I do not believe I ever once mentioned that companies going out of business were going to be hurt by the tax. If they are going broke, obviously the tax on profits does not hurt. I did not say that.

Hon. Mr. Ashe: I was not impugning the honourable member opposite or saying he did not know the difference. I know he does. But the implications, the generalities of the negative impact on the corporate sector that we are having hard times, I would suggest is saying the same thing in a different way. He cannot have his cake and eat it too.

The member is either for it or against it. If he is against it, fine, but it is only fair to have on the record all of those very pluses, not only within this piece of legislation but in other pieces of legislation that have now become law, that are a direct benefit to the manufacturing sector in this province, which is extremely important to the reviving economy of Ontario.

One last item I would like to touch upon very briefly is the comparison brought up by the member for Oshawa, suggesting that the one per cent increase in the corporate tax rate was somewhat less onerous than the five per cent temporary surcharge on personal income tax. I point out to him that in absolute terms, even if we take the highest personal income tax rate there is --

Mr. Breaugh: You're going to try and convince me that one per cent is more than five per cent, right?

Hon. Mr. Ashe: We have to use a little different base. If we are comparing absolute percentages of dollar increases, yes, the one per cent tax rate has a higher impact than the five per cent surcharge in absolute terms.

Mr. Breaugh: I knew somehow your perverted mind would come around to that point of view that one per cent is greater than five per cent.

Hon. Mr. Ashe: The member should think of how it works. If he wants a simple mathematics lesson, let us know.

Mr. Breaugh: If the member thinks one per cent is more than five per cent then the member has got to be going metric in his head.

Hon. Mr. Ashe: If the member would go back to basic grade 2 arithmetic, before he went to teachers' college, maybe he would be in a position to analyse how a personal income tax system works and how our corporate tax system works. One is on basic profits and the other is, in effect, on a percentage of the income tax already paid at the federal level.

Mr. Cooke: Is that the new math or the old?

Hon. Mr. Ashe: The member can use either math he wants but the maximum percentage comes to something less than 0.9, which is less than one, even in my simple arithmetic.

On motion by Hon. Mr. Ashe, the debate was adjourned.

ONTARIO LOAN ACT

Hon. F. S. Miller moved second reading of Bill 34, An Act to authorize the Raising of Money on the Credit of the Consolidated Revenue Fund.

Hon. F. S. Miller: Mr. Speaker, I feel an introductory statement is not warranted by me on second reading. The amount is for $3.7 billion. I would be very pleased to answer questions as the debate goes on.

I am out of breath, as the members can tell. The skies between here and Sudbury were bumpy today.

Mr. T. P. Reid: Mr. Speaker, I will give the Treasurer an opportunity to recover his breath. Maybe he should take up hockey to keep in shape.

While the Treasurer is recovering, I find it passing strange, as a former friend and colleague used to say, that even in his breathless state the Treasurer would come running in to say, "I really do not have to say anything about the fact that I want authority to borrow $3.7 billion." I do not know what he thinks is important or what really has an impact in the province. Given his high position as Treasurer, I should not even stand in my place. If he does not think it is important, there is no reason why the rest of us should.

5:10 p.m.

Now that he has recovered a bit, I wonder if the Treasurer could make just a few preliminary remarks. I think we all understand what it is about, but why is the Treasurer asking for $3.7 billion when his cash requirements, according to his own budget document, are $2,695,000,000? Taking into account that he is probably, if I may use that pejorative term, being conservative in his estimate of what his deficit will be, why is he asking for almost $1 billion more in lending authority?

Hon. F. S. Miller: Mr. Speaker, am I allowed to do that?

The Deputy Speaker: Not really.

Mr. T. P. Reid: Yes, he is; certainly.

The Deputy Speaker: Do we have the agreement of the House that the Treasurer can answer back? We have agreement of the House. I am always told the House can do anything it wants if everyone agrees.

Hon. F. S. Miller: The only reason I would want to take the exception to the rule, because I know it is very dangerous to do that, is because I honestly did not have the papers in front of me when I stood up. I think the question the honourable member has asked is proper and should have been in my opening comments. If this can count as part of my opening comment, then I would be happy.

The Deputy Speaker: Agreed.

Hon. F. S. Miller: Last year my friend said, "It seems strange that you always ask for the amount of money that your deficit represents." That of course would be the normal amount of borrowing. Now that it is not equal to the amount of the deficit, he thinks it is passing strange.

I should point out that we do have an estimated $2,695,000,000 as the cash requirement for the year. We also have some retirements of issues during the year which total $277 million. Add to that the fact that the last two fiscal years' cash requirements exceeded those predicted in the budget and were made up not through borrowings but simply by using up liquid reserves the ministry had. We can show that we used up $637 million of those liquid reserves over the last couple of years; $140 million in 1981-82 and $497 million in 1982-83.

Members will also recall that the Ontario Loan Act carries forward six months into the next fiscal year. I believe that was as a result of a couple of committees in 1978 and 1979 so that it does not coincide with the end of the fiscal year simply because we debate it, as we are now, some time after the fiscal year has begun. It allows us to have automatic borrowing rights against Canada pension, or whatever, should the need arise. The net difference of this year's carry-forward of six months and next year's carry-forward of six months is $128 million. That comes to a total of $3,737,000,000 which was rounded off to $3.7 billion in total. So, in effect, with retirements of $277 million and rundowns of cash of about $600 million we have the figure we are talking about.

The Deputy Speaker: We had unanimous agreement. I guess now we can go back to second reading.

Mr. T. P. Reid: I guess the question arises as to why we need to have such large liquid reserves, given the fact that while the interest rate is down and everything else, carrying $637 million in liquid reserves seems perhaps to be more than we need. Maybe that is not all required.

Incidentally, I am not very happy that we are giving the Treasurer almost 16 months of borrowing authority in this bill. It seems to me that the bill provides that "any unused borrowing authority will expire on September 30, 1984." I do not recall ever giving the Treasurer that amount of time. I agree with the proposition on the fiscal year but I find it difficult to understand why we should go to September 1984. We will talk about that and perhaps there will be an amendment in that regard.

The Treasurer, and no doubt his colleagues under the gallery, would be interested in hearing me go on for eight and a half hours, as I did last year in this regard, but I think even my colleagues' patience might be a little strained. However, there are some other questions that have to be answered by the Treasurer. That is simply what amounts to, in part 3 of the explanatory note, something I am sure the Treasurer personally feels, the fact that he has once again this year to go to the public capital market.

There has been some concern as to how these borrowings are going to take place, who is going to handle them, who is going to place them, where the money is going to be borrowed and what effect they, along with other provincial and federal deficits, might have on the capital markets in Canada.

We would ask the Treasurer to share with us just exactly how he sees the offerings that he will be making in the public markets. Will they be in Canada or in the United States, who will be handling them, will they will be tendered, will they be done by the route of Treasury bills, or exactly how will he go about borrowing the money?

We are not happy with the size of the deficit and perhaps I should really say the structure of the deficit. I was going to make a great, long speech about what has happened to the Ontario provincial deficit. I have a well-thought-out paper here on the provincial deficit, showing how it seems not to have been structured in terms of being contracyclical over the years and how it has not aided the recovery from recession or the bad economic times. It has had the opposite effect, making the recession even deeper and worse than it should be.

The Deputy Speaker: This is getting slightly distracting with the House leaders having their meeting in front of the Speaker.

Mr. T. P. Reid: We are talking about only $3.7 billion, just a trifle.

I will not go through the whole situation, but in this paper on the Ontario government deficit the conclusion in figure 3, which I cannot share verbally, obviously, is that "cyclically, an inflation adjusted deficit indicates that fiscal policy has tightened substantially in the period following 1978.

"In other words, simultaneous with a period of very restrictive monetary policy during the last few years, the government of Ontario has followed a fiscal policy which has further squeezed our economy. This may very well be a factor which accentuated the current economic downturn. Indeed, when comparing the adjusted deficit in fiscal year 1981-82 to the adjusted deficit during the economic downturn of 1974-75, we see a substantial difference.

"In 1974-75 the current dollar adjusted deficit was almost $600 million, while in 1981-82 the government actually ran a current dollar adjusted surplus of over $500 million. It is clear that the usual countercyclical policies used in order to stabilize the economy were ignored and a tight fiscal policy was adopted in response to growing actual deficit figures.

"The difficulty was that the government did not recognize the enormous capital gains that were being made to the depreciation of nominal debt during the inflationary period of 1978 to 1981. Had they explicitly recorded these interest payments as an adjustment of total real debt rather than as a current interest expense, perhaps this tight fiscal stance would not have been adopted."

We on this side wonder whether the Treasurer really knows what he is about. We find it difficult to give the Treasurer the authority to borrow $3.7 billion when the actual deficit is only $2.7 billion. The Treasurer has been kind enough to send me some figures on where he is getting the rest. Obviously this depends on what the economy is going to be like. If for some reason there is a big takeoff in June and July, perhaps the needed borrowings will not take place to replace the rundown reserves. But even so, we are giving the Treasurer authority for 16 months to borrow $3.7 billion.

5:20 p.m.

In my last year's budget speech -- and I will not chew it all over -- I mentioned our concern about the borrowings from the Canada pension plan, the Canada Mortgage and Housing Corp. waste control loans, et cetera. At some point, particularly in terms of the pension plan, these are going to have to be repaid.

The teachers' superannuation fund, we always hear, is merely a bookkeeping operation and we can transfer funds in and out. While I have a background in economics, I also understand that at some point those funds may well have to be paid back, if the net borrowings from them catch up to the interest that has to be paid on those funds.

Perhaps the Treasurer could tell us when he sees those limits being reached in terms of borrowing from the CPP and the teachers' superannuation fund.

It is interesting that in Bill 34 we see the Ontario Treasury bill program. I am not sure whether that indicates this is the only route the Treasurer is going to go in the public markets or if he is considering other longer term debt, or exactly what he is considering to get the $3.7 billion he needs.

I wonder whether the Treasurer will tell us the amounts of money he expects to get from the various internal funds at his disposal -- through the CPP, the Ontario Treasury bill program, CMHC waste control loans and the federal-provincial municipal loan program -- and the public capital market. Can he at least give us a spectrum of the amounts he is going to get from each one of these that presumably, it is hoped, will at some point total $3.7 billion?

I freely confess that I doubt there is anyone in this chamber who understands what $3.7 billion is. I suppose when it comes to the taxpayers they can understand it in terms of knowing this $3.7 billion is going to be related to the total budget of Ontario of $24,710,000,000, that under the Treasurer they can look at chart C7 on page 87 of the 1983 budget and see that 11 cents of every tax dollar they pay is going to interest charges on the debt of the government, which has been built up so well by the Premier (Mr. Davis) and the Treasurer.

It is interesting that -- I believe my figures are accurate -- in 1981, nine cents of the tax dollar collected by the Treasurer went to pay the interest. So we have a jump of approximately 22 per cent in debt cost from 1981 to this budget in 1983.

To reiterate briefly, I would hope the Treasurer would explain to us where the significant amounts of money are going to come from in the internal programs he has at his disposal as well as the public debt markets. We would like to know why September 30, 1984. He has alluded vaguely to the fact that we have given the authority in the past. I do not remember it being as long as 16 months.

It seems to me that one year is more than sufficient, because the Treasurer presumably will have brought in a new budget within a year's time. The day after he brought down this one he was talking about a mini-budget in the fall; if I may use that phrase again, a passing strange statement for the Treasurer to make when he is trying to inspire business confidence and consumer confidence and saying that we are going to have some stability. Before his 1983 May budget is hardly out of the garbage bag he is talking about a mini-budget in the fall of this year as well.

An hon. member: Hardly out of the garbage bag.

Mr. T. P. Reid: I thought I would just throw that in to see if you were awake.

In any case, we have a great deal of reservation about giving the Treasurer this kind of authority and I think it really behooves him to have been a little more forthcoming with details in the first instance than he has. I hope in his response he will answer the questions I have raised.

Mr. Cooke: Mr. Speaker, I am not going to make many comments. I think last year I waited about two weeks in order to speak on this particular bill, while the member for Rainy River spoke and spoke and spoke and spoke. I did not feel like speaking after I had listened to him for eight and a half hours and ever since he spoke I have not felt like speaking in the Legislature, because if I sound like -- no.

I want to make a couple of comments about debt and about the deficit that the government is running up. I do not have the same fears about the level of debt that the member for Rainy River has; however, we do have disagreement on how the government is spending, what its priorities are, and we have real concerns that the deficit this government is running up is an unproductive deficit rather than a productive deficit. Therefore, we will not be supporting this bill.

We believe the government had a choice in this budget. They could have increased the deficit. They could have put it into job creation, into more accelerated capital works, into investment, into the manufacturing sector in order to create long-term jobs. They could have looked at our social programs, looked at the demand that is needed in housing as well as in the nursing home sector and built those facilities that are going to be needed and are going to have to be built at some point. They could have created those jobs now, thereby stimulating the economy and creating jobs.

The government had a decision to make and, rather than running a slightly higher deficit this year, stimulating the economy and producing those jobs, it decided to maintain high levels of unemployment over the next four or five years, which will mean that the long-term borrowing -- the debts that this province will be running next year and the year after -- will be substantially higher than what we believe would be necessary had the government decided to take the kind of action that we suggested in our prebudget statement.

Look at the demand for housing in Ontario. In senior citizen housing alone, 10,000 people are on the waiting list for geared-to-income housing. The demand is there. The need for housing exists, it is documented and it is going to have to be built at some point, but instead this government decided not to put anything much into housing, except $16 million over four years, and eliminated other good programs that it had, like the Ontario home renewal program.

Into youth training, again, we would have to look at anything that went into job creation for young people or job training for young people as an investment in the future that would create wealth in the long term for this province and would in the long run have substantially reduced the deficit by creating those jobs and turning into taxpayers the unemployed who are presently reliant on the welfare system and unemployment insurance.

When one looks at what we actually lose in this province because of the high unemployment rates, one understands why the deficit is so high. With 751,000 people unemployed, we are looking at forfeited wages of $11.2 billion, forfeited provincial personal income tax of $144 million, federal personal income tax of $675 million, corporate tax of $150 million, federal corporate tax of $390 million and sales tax of $175 million. The total right there is $1.5 billion in lost revenue because of high unemployment in this province.

5:30 p.m.

When we are looking at the deficit we have to consider that had jobs been the priority of this budget the deficit would have dropped not only because of increased revenues, because we would have turned those who are unemployed into taxpayers, but also because of a lesser demand on our social welfare system in this province.

We think this government made a dramatic and serious mistake in its budget on May 10 by not emphasizing job creation, and by not getting people back into the work force. It would have meant a higher deficit in fiscal 1983-84, but we are convinced it would have meant a substantially lower deficit in subsequent years.

I also have some grave concerns that have been enunciated in the Legislature before about the $300 million the Treasurer (Mr. F. S. Miller) says will be saved by cutting out expenditures that, I suppose, are not needed according to the Treasurer. It seems to me the real deficit this government is projecting is not $2.69 billion, but is really $3 billion.

On the one hand, the government has the Minister of Health (Mr. Grossman) go throughout this province and talk about increased grants to hospitals, increased grants to clinics and so forth, and get all the credit for announcing these increased grants, grants that in some cases were higher than inflation. Then, on the next day when the budget is announced, the Treasurer says he is going to cut back these transfer payments to municipalities, hospitals and all other groups.

I think it is a very misleading approach. It is an unfair approach, an approach that lacks honesty with the people of this province and the members of the Legislature. I think the Treasurer should have levelled with us in the budget and indicated that the deficit was $3 billion, or he never should have announced those transfers which are never going to be delivered to the hospitals, municipalities and other groups in this province to which commitments were made.

We will not be supporting this legislation on the grounds that the deficit this government is running is not a productive deficit. It is not a deficit that will create wealth and jobs in this province. It is not an investment budget such as we have suggested over the years and, therefore, we cannot support the $3.7 billion worth of borrowing provided for in this budget.

Mr. Ruston: Mr. Speaker, I want to speak briefly on this borrowing bill, the Ontario Loan Act.

This government of Ontario has always been touted as being one of managers but its great managementship went by the wayside many years ago. In fact, it went by the wayside in 1971 when the present Premier (Mr. Davis) took over.

There has not been a budget produced since the Premier took over when there has not been a deficit. When one looks back over the previous governments of the Conservative Party before this Premier took over, there were many times when we had no deficit.

I recall a staunch former Conservative candidate calling me the day after I was elected in 1967, and I also had a similar call later in 1971. He said, "Tell some of those fellows in Toronto that when times are good they should put a little away for a rainy day." In the 11 years the present Premier has been Premier of this province he has never done that. Now, in the last year or two when we have been in a high unemployment situation where the pump needs priming and the government should step in, it has got itself tied up with these deficits over 11 years. The interest over that 11 years is costing us 11 per cent of our total revenues.

We have come to the point for the government to help the economy and, as we say, prime the pump a little, but it has got to the point where it is difficult for them to do it without raising taxes. Of course, raising taxes at a time like this is not the proper thing to do, because they are then taking money out of the economy that we need to create jobs and so forth.

I think the people of Ontario should be aware of the terrible management we have had for 11 years under the present Premier. They have no management ability whatsoever, and anyone with any financial knowhow at all recognizes that. I think we have to make this point very strongly and tell the people of Ontario that the government is not being really honest with them when it handles its books the way it is handling them.

Hon. F. S. Miller: Mr. Speaker, I will try to answer the questions raised by my friends on the other side of the House.

The first question by the member for Rainy River (Mr. T. P. Reid) dealt with the size of the liquid reserves. I did send him a copy of an information table showing we started the year with about $2.1 billion, I think, in liquid reserves. In a business spending roughly $23 billion to $24 billion a year, and receiving between $20 billion and $21 billion in revenue a year, there are surges in the payments and revenues that do not match so, obviously, there will be a need at times to have liquid reserves.

In days gone by, as a percentage of the total spending, those reserves as I understand it would have been considerably --

Mr. Stokes: Have you ever had a balanced budget?

Hon. F. S. Miller: Just a second now; let me get to that. The member would not believe in one if I had one. He knows that.

Mr. Eakins: Let's not get into that.

Hon. Mr. Ashe: You would oppose it.

Hon. F. S. Miller: I am talking about liquid reserves at the moment. The liquid reserves were a larger percentage of the total spending because we had a habit of keeping a number of ministry accounts in a number of banks around the province -- I think in the hundreds, literally, of different accounts -- which allowed for some local cheque-writing capabilities but which made for poor management of the valuable resource called cash. With computers and centralized banking procedures, and with careful planning of the cash inflows and outflows, we have reduced those reserves to a fairly low percentage of spending.

Of course, we do not leave the money sitting idly by. One of the interesting pluses last year, as I recall, was extra earnings on interest because of the higher rates applying during the year. We earned money on the short-term surpluses that were over and above our immediate cash requirements. We will continue to do that and, as new technology permits even closer management of the cash reserves, they will be kept in line.

Where are we going to borrow the money, I think, was the next question. Some money has already been borrowed. The member probably noticed we had an issue six weeks or more ago, the first public issue I think Ontario has had since about 1976. I think it was for five years, $300 million at 10.6 per cent. Actually, it had a 10.5 coupon and roughly a 10.62 yield, something of that nature. The other $700 million will be borrowed as the year progresses, probably in either bank loans or Treasury bills as the appraisal or the advice of the Treasury staff comes to me. I assume it will be all in Canada and all in Canadian dollars in our own case. My staff are saying that is the case.

Mr. T. P. Reid: Depending on economic conditions, of course.

Hon. F. S. Miller: Well, I have been assured that whether I like a higher deficit or not, we could have borrowed quite a bit more. I think that is beside the point. The question was not whether we could borrow it but what that would do to the credit ratings.

The member asked what effect our borrowing would have on credit ratings and on the market in general. It intrigues me that while the member criticizes me for having 11.3 per cent of the provincial budget as interest, he does not appear to criticize his friends in Ottawa for having about 20 to 25 per cent of their budget as interest. It just shows the difference between a Conservative and a Liberal: The difference between a poor manager by his definition and a good manager by my definition.

5:40 p.m.

The fact remains that the federal government can go to those relatively large $30-billion deficits and huge borrowing requirements and not have its rating appear to be in jeopardy. They put pressure, though, on the total market by doing so, leaving the provinces more vulnerable in the downgrading-of-ratings game.

We have seen a couple of provinces over the last two months, Manitoba and probably British Columbia, either put on credit watch or have a real downgrading. I believe Manitoba just went down. We are reasonably optimistic that the prudent cash requirements of Ontario this year will maintain our triple-A rating. I can never guarantee that but I hope we will maintain it.

I can give the figures for this year with the sources for the $3.7 billion: Canada pension plan, $1.24 billion; teachers' superannuation fund, $850 million; the public market, $1 billion; unallocated, i.e. still to be decided, $610 million; for a total of $3.7 billion.

I trust that answers most of the questions. I point out again to both members and to the member for Essex North (Mr. Ruston) that while the word "deficit" is used reasonably freely for our cash requirement in Ontario, they are not the same thing.

The fact remains we have been including all our capital works in that. I know the member knows this and does not like to talk about it. He also knows that in, I think, nine of the last 12 years we have really had a surplus on the operating account side and have not borrowed 100 cents on the dollar on the capital side.

That is really one of the measures the underwriters and bond rating agencies look at. We can argue whether we have $1.7 billion or $2.3 billion for capital works this year. It is in that kind of range, so there is really a difference of somewhere between $600 million and $200 million that we are borrowing for the operating account. Be that as it may, it would be my long-term objective to get us down to a zero cash requirement when and if the economy permits it.

I listened to my friend the member for Windsor-Riverside (Mr. Cooke) talk about the cuts in grants to recipients, saying that was immoral and unfair. At the same time as he says that, I have to say that for seven years we put tremendous pressure upon the direct operating ministries' budgets, the direct operating expense, the manpower in the ministries directly run by the province. Only 20 per cent of my budget is directly managed by the province; 70 per cent is transferred and roughly 10 per cent is interest.

The 70 per cent which is transferred has not felt the same kind of pressures as the 20 per cent which has been managed. We have seen a significant reduction in the manpower in government service, over 6,000 people in the last five or six years, while the work load has gone up by six per cent.

It seemed to us that, when the federal transfer cuts were made and known, we simply had to ask for that same one, two or three per cent attrition in spending in, let us say, overhead that we have been able to find every year, and that we could fairly look towards school boards and hospitals, probably in that order, universities and, last of all, municipalities, because I think municipalities have been the most efficient spenders of money of the four just named. They have always had the mill rate and the pressure of raising money for the school boards to discipline them, so I am sure they have been the most careful spenders of money at that level.

But we are having to say to those people who receive money from us, "We are at a point where we are asking you to make some efficiencies." We have not allocated them yet. I am hoping cabinet will see fit to do so before long.

In the meantime, I can safely say it is a productive deficit. I do not accept the statement that it is an unproductive deficit. I firmly believe we have done a good job of management in the last three years; we are seen to have done a good job of management and there is a confidence in this province that is hard to find elsewhere in Canada.

With these comments, I move second reading of my bill.

Hon. Mr. Wells: Mr. Speaker, I wonder if I might ask the House for unanimous consent. It has been agreed that, if there are any divisions on any of these bills on the order paper today, the division part of the vote will be held until 10:15 p.m. tonight. In other words, we would have the voice vote and if there is a division the bells would be at 10:15 p.m. tonight and the voting would occur as quickly as possible, but there would be no formal time limit on the bells.

Agreed to.

The Acting Speaker (Mr. Cousens): The Treasurer has moved second reading of Bill 34, An Act to authorize the Raising of Money on the Credit of the Consolidated Revenue Fund.

All those in favor will please say "aye."

All those opposed will please say "nay."

Would the members stand up so I will know there is going to be a division? Is it just assumed there will be a division later? I see five members. In my opinion, there will be a division. It is agreed there will be a division at 10:15 p.m.

Vote deferred.

CORPORATIONS TAX AMENDMENT ACT (CONTINUED)

Resuming the adjourned debate on the motion for second reading of Bill 38, An Act to amend the Corporations Tax Act.

Hon. Mr. Ashe: Mr. Speaker, I have pretty well concluded my remarks. I think I answered all the questions and concerns, and I hope I won everybody over to support the second reading of Bill 38.

The Acting Speaker: Has the debate been completed on this? The Minister of Revenue has moved second reading of Bill 38.

All those in favour will please say "aye."

All those opposed will please say nay."

In my opinion the ayes have it.

There being more than five members standing, we will have a division at 10:15 on Bill 38.

Vote deferred.

INCOME TAX AMENDMENT ACT

Hon. Mr. Ashe moved second reading of Bill 43, An Act to amend the Income Tax Act.

Hon. Mr. Ashe: Mr. Speaker, this bill, An Act to amend the Income Tax Act, contains two amendments arising out of the 1983 Ontario budget. First, the bill introduces a temporary personal income tax surcharge for 1983 and 1984. The surcharge is levied at the rate of 2.5 per cent for 1983 and five per cent for 1984 on the basic Ontario tax in excess of the threshold figure of $110.80. This threshold amount will be prescribed by regulation.

The establishment of this threshold figure will ensure that about 500,000 taxpayers, who would have otherwise been liable to the surcharge, will now be exempt. For those individuals whose income is subject to tax deduction at source, the tax withholdings beginning July 1, 1983, will be based on a surcharge at the rate of five per cent. This will average out to a 2.5 per cent surcharge for the full 1983 taxation year.

The second amendment sets the tax rate for 1983 and subsequent tax years at 48 per cent of the basic federal tax. The rate for 1982 was also 48 per cent. In the past, the rate was set for one year only so that the rate had to be legislated every year even when there was no change from the previous year. The bill now provides that the 48 per cent rate will remain in force for 1983 and subsequent years until a rate change is required.

Mr. T. P. Reid: Mr. Speaker, I will say at the outset that we will oppose this bill and I will explain why, but not at great length because we have been over most of this before. However, I would like to point out in terms of the Minister of Revenue's last comment that he sounds as if he is doing the people of Ontario a great favour by leaving the Ontario provincial income tax at 48 points of the federal income tax, saying, "If we want to change this, we will have to bring in a new bill as we have done every year."

5:50 p.m.

We are back to the old ad valorem game. The Minister of Revenue is shaking his head because he knows that, if the federal personal income tax goes up, rates go up and Ontario automatically gets the gravy on top of that. The percentage will stay the same but it will be a percentage of the higher rate at the federal level. The province can look like the good guys on this as it has in the past. The Minister of Revenue (Mr. Ashe) at least has the good grace to nod "Yes."

Almost the same arguments apply to Bill 43 on personal income tax as apply to corporation income tax. I find it unbelievable. There is no personal offence meant, but I am talking to the organ grinder's monkey instead of the organ grinder because the Minister of Revenue is stuck with trying to defend these taxes.

The Treasurer has stood in his place numerous times and said what we need in this province and this country is a consumer-led recovery. If the people would get their money out of their socks and into stocks, furniture, this, that and the other thing, then by God we would put everybody back to work and have a great economic recovery and boom. Then he turns around with all the bare-faced -- I have to be careful and be parliamentary.

Having said we need a consumer-led recovery, he then turns around with an arrogance, an effrontery and a chutzpah, as our Jewish friends would say, unequalled even at the federal level and says, "By the way, I am slapping an extra five per cent personal income tax on you."

We get this complete and utter contradiction. On the one hand, the Treasurer and the Premier say we have to have the consumers and on the other hand, as any good economist has two hands, they whack the consumer over the hands and say: "Drop that five per cent into the government coffers. We are going to decide how that money is going to be spent."

We have just talked about the borrowing of $3.7 billion and the fact that some of us, at least on this side, believe the budget is not quite as productive or the deficit quite as positive as it might be.

The Treasurer learned a trick a few years ago. This is the second time he has given us a graduated increase because he did not want to hit us with it all at once. He wants to let it creep up on us. In his 1980-81 budget, he brought in a stepped increase and we had some words in this House as to how much he had actually increased personal income tax.

The figure he does not want to make clear to anybody is that, for the first time in Ontario's history, the personal income tax rate in the province is over 50 per cent of the federal tax base. Even if we accept the averaging out of 2.5 per cent, the fact remains that the Treasurer and I and almost everybody else, with a few exceptions -- I am surprised the Minister of Revenue would not tell us where the cutoff point is for these people; I believe the figure in the budget was on income of $15,000 --

Hon. Mr. Ashe: The upper or lower? There is no upper limit.

Mr. Cooke: It is $7,500 for a single person and $12,500 for a family.

Mr. T. P. Reid: Yes, where the amendment is going to be. My friend tells me it is $7,500 for a single person and $12,500 for a family. That is pretty chintzy to say the least. It is going to catch a lot of people who might have had, or might have thought they had, a little discretionary income to spend. We also get back into the psychological argument that those people whom the Treasurer has been exhorting to go out and spend are being told, "We are going to take it back from you before you even get it in your paycheque."

I am sure the Minister of Revenue (Mr. Ashe) will stand in his place and argue: "You have to look at the total budget. Look at what we are giving people back in the temporary lifting of the sales tax on furniture and household appliances." I suppose that can be said, but again the whole thrust of the budget is contradictory in that sense. Why not leave the money in people's pockets so they can spend it in the first place?

As I said, the personal income tax rate in Ontario as of July 1, 1983, is going to be 50.5 per cent. By the time all of Bill 43 takes effect, which will be six months hence, the taxation year of 1984, our personal income tax rate is going to be 53 per cent of the federal tax base. Here is a free enterprise, capitalistic Conservative Party saying: "Let the private sector do it. Let individuals have what they need. Let us have freedom of choice." Yet at the same time they say, "We are taking 53 per cent of the federal tax base for our needs here in Ontario."

I do not want to digress by talking about what this budget has done to the average consumer in the province in terms of the increase in tobacco tax, the tax on alcohol and the ad valorem tax on gasoline that were passed a year ago. If I recall my figures correctly, it has cost a family of four earning an income of approximately $15,000, from the 1981-82 budget until today, something like $400 to $450 more a year to live.

The income tax surcharge -- and I reiterate that I think the phrase stuck on to that surtax, the social services maintenance tax, is mean, demeaning Archie Bunkerism at its worst. I trust the Minister of Revenue will apologize for that when he gets to his feet. The Treasurer himself has said that the income tax surcharge, if I can paraphrase his words, may well be a temporary tax. Members will recall, we have heard it ad nauseam, that the personal income tax was introduced during the First World War as a temporary tax as well.

The income tax surcharge will remove $170 million from consumers in this fiscal year and approximately $300 million next year. That was presumably money that would have been spent on furnishings, automobiles, housing and consumer goods, the big ticket items, which is the phrase the Treasurer dearly loves. Where is the consumer-led recovery going to be when the Treasurer and this Progressive Conservative government this year are taking -- not just this year but in the last six months of this year -- $170 million out of consumers' pockets, money they will not have to spend in the marketplace?

The House recessed at 6 p.m.

31 mai 1983