Journal des débats 1986-mai-15 | Assemblée législative de l'Ontario

That in the opinion of this House the government should permit the use of tax-free gasoline and fuel by farm commercial vehicles licensed in Ontario under the Highway Traffic Act, as lower farm input costs will benefit both producer and consumer and high agricultural input costs lessen the producers' ability to compete with subsidized foreign imports.

Mr. Villeneuve: It gives me a great deal of pleasure to be the first speaker in private members' hour of this new session of the Legislature under the new rules in the time selected for private members' business.

In a way, I was hoping the budget earlier this week would steal some of my thunder and adopt the proposal I am making today. I was hoping it would provide confidence to the agricultural community and to farmers, who are currently completing spring seeding in the hope of simply managing to break even. That is not a very wonderful thought.

I remind this House that the prices of December grains, as of yesterday, were as follows: wheat at $2.90 a bushel, corn at $2 a bushel, oats at $1.25 a bushel and soybeans at $5.40 a bushel. Those are basically the prices of 10 years ago. It disappoints me that the Treasurer (Mr. Nixon), who is a grain farmer, forgot to address this very grave situation in his budget. He chose literally to ignore this yet much-needed benefit, and I will have to carry on with my resolution because it is needed by the agricultural community. I still hope we may be able to change the Treasurer's mind on this issue and on others involving support and confidence in the field of agriculture and for farmers.

I am glad to have this opportunity to say a few words about my resolution, which hopes to address one aspect of Ontario's deep farm financial crisis. At the start, I want to emphasize that the proposal I am making will bring us into line with farm fuel provisions in British Columbia, Saskatchewan and Manitoba and will still leave us well behind the fuel rebate system available to farmers in Alberta, where there is absolutely no tax on gasoline. As a quick illustration, Alberta farmers are paying 22.3 cents per litre less than Ontario farmers to run their trucks, and the situation is similar in Saskatchewan.

Farmers in the Maritimes continue to pay taxes on farm vehicles, but with the exception of New Brunswick, these are ad valorem taxes; they are value added or value reduced taxes, which is the system we had in place at the time the new government took over. If that system were still in place, we would be paying two cents per litre less for petroleum products right now.

Ontario, Canada's largest producer of agricultural products, is the only major agricultural jurisdiction in the country to tax farmers at a high rate without compensation. Indeed, the budget reinstates a sales tax on heavy trucks. All farm produce is moved via trucks. When we consider that grain, livestock and dairy products all move from the farm to the primary market by truck, the Treasurer has made sure the costs of moving materials will go up quite considerably because of the reinstated sales tax of seven per cent on heavy trucks that is to occur at the beginning of 1987.

Currently, the tax is 8.3 cents per litre or about 37.7 cents per gallon on gasoline, and 9.9 cents per litre or about 45 cents per gallon on diesel fuel. This high level of taxation has remained in place even though fuel prices have otherwise fallen.

We are all aware of the debate on fuel prices that has gone on in this very chamber since last October. The party on this side, to which I belong, has pointed out repeatedly that the retention of the value added or value reduced tax, known as ad valorem, would have benefited all motor vehicle fuel users, including farmers. Second, it would have helped to alleviate the costs of moving farm produce from the farm or in the semi-processed state.

On the other side of the House, both the Premier (Mr. Peterson) and the Minister of Energy (Mr. Kerrio) have found time to complain about high fuel prices, although both have ignored the specific effect of the high cost on farmers. At the same time, the Minister of Agriculture and Food (Mr. Riddell) has acknowledged that all agricultural producers, including the most efficient, are facing increasing financial hardship through equity loss and poor prices.

There is no doubt that in the past year the state of Ontario's agricultural industry has worsened and that the immediate future looks very bleak indeed. The rest of the economy is doing quite well. The Treasurer has admitted he will receive more than $2 billion of additional revenue this year. The real figure may even be in the area of $3 billion. Clearly, some of that windfall revenue -- blue money, money that was allowed for and was well managed by the previous government in this province -- is a windfall to the present government. Very little of it has found its way to assist a very basic industry in Ontario, that of agriculture.

This week's budget has no new programs for farmers. In fact, it has dropped one program. Yesterday one of my colleagues questioned the minister about where the money that he has now recycled three times was going. The minister got up and read a prepared statement that had absolutely nothing to do with the question.

Most of us in this House know that Ontario farmers often suffer because their products are being undercut by highly subsidized foreign products. The European Community in particular provides excessive production, storage and export subsidies. Canada is about to be caught as the United States begins to retaliate with its own subsidies.

10:10 a.m.

The Prime Minister of Canada is well aware of this problem and has made it a priority for the discussions under the General Agreement on Tariffs and Trade. The Minister of Agriculture and Food has begun to study it. The Treasurer, however, did not even mention the problem of European subsidies in his recent budget.

We know our producers are efficient, but today that factor is no longer enough when dealing on world markets. The Minister of Agriculture and Food can hand out all the airline tickets he wants to potential food exporters, but unless we can offer competitive prices for our products, we will not get the markets we need. I strongly support provincial offshore market development programs, which were first emphasized by the member for Don Mills (Mr. Timbrell) when he was minister.

However, I also believe we must tackle the problem from the cost side and try to reduce farm input costs. Lower input costs can be passed on to our food exports and would provide an advantageous shift in the price spread between a domestic farm product and an imported one. Unlike a marketing assistance program, lower input costs would benefit our own consumers, and Ontario's home-grown products would sell even better.

It is important to remember the effect this tax relief measure would have on millions of Ontario consumers, and in this case it would benefit all of us. But clearly we must deal specifically with the worsening conditions in agriculture in this province during the past year. Many farmers are facing Depression-like conditions, while many city folk are doing very well, thank you, with very little investment compared to what our rural friends in agriculture have.

In this budget the Treasurer admitted that the agricultural outlook remains bleak. His words to this House were, "With low commodity prices, the cash flow from farming operations is too often insufficient to service farm debt, and credit is increasingly difficult to obtain." In rural Ontario we have free-falling real estate values, with no end in sight and no bottom near. The recent budget has done nothing at all to alleviate that.

The members in this House with agricultural backgrounds do not have to be told how serious the farm financial situation is, but because there is a definite shortage of farmers in the Liberal and New Democratic Party caucuses, I want to give a quick indication of the serious condition of Ontario agriculture as it has been reported and is actually happening in recent months.

On December 30, 1985, the Windsor Star carried an article entitled "Farmers Face Bleak Year with Low Prices Forecast." It reported: "Farmers are coming off a year of bad prices, and more of the same is forecast for 1986.... Even in Essex and Kent counties, an area of fertile soils and bountiful crops," and excellent farmers, "farmers are going out of business or seriously wondering just how much longer they can hang on."

The same day, the Kitchener-Waterloo Record had an article entitled "Farmers Say `Good Riddance' to 1985." That story said, "There's a full-blown depression under way in the local agricultural community, worse than anything since the 1930s." One month earlier, the writer of that column had stated: "The truth today is that a record number of farmers are going broke. The wolves are real, and they're at the doors of thousands of farm family homes."

On April 10, 1986, the Globe and Mail ran a story entitled "Incomes Plunging for Ontario Farmers." This was a surprising article to see in the Globe, because it is well known in rural communities that Canada's national newspaper almost always ignores agricultural issues in Canada's largest agricultural producing province, right here in Ontario.

On January 8, 1986, the Brantford Expositor predicted, "Next Five Years Not Rosy for Farmers." In that article, University of Guelph agricultural economics professor George Brinkman was reported as telling farmers that being a good producer will not be good enough for farmers to survive the 1980s.

The London Free Press, reporting on George Brinkman's paper a month later, stated, "Low commodity prices, higher production costs, increasing debt and the shrinkage of equity through declining land prices have hit farmers hard."

On April 27, 1986, a Free Press column was headed as follows: "Many More Kent Farmers Expected to Go Broke." It spoke of high operating costs and low commodity prices.

These papers, as well as the Financial Post, the Toronto Star, the Ottawa Citizen and the Kingston Whig-Standard, have all reported on the financial difficulties of our farmers. Many of the stories have singled out the problems of high input costs and low commodity prices.

In proposing this resolution, I want to make the point that if we decide to help reduce farm input costs, fuel prices are one of the very largest farm input costs. We all realize that farm commercial vehicles should share in any fuel price benefits, and they really have not done so to this point.

There are, of course, a number of farm inputs that could be examined. In addition to fuel, farm chemicals, fertilizers and machinery can be listed as significant input costs. In fact, fertilizers and machinery expenses contribute more to farm operating expenses than do fuels. However, having said all that, I point out that the high levels of fuel tax in Ontario make fuel costs an obvious choice for some type of relief.

After the federal government's move last month to eliminate federal sales tax and excise taxes on fuel, I was sure the Treasurer would follow suit. It was a natural; his budget was coming up. Nothing happened. It simply widens the exemption that farmers receive for fuel taxes. It would go a long way to helping all producers by reducing costs, and it would benefit everyone in Ontario, because the nine million residents of Ontario are all consumers.

There is considerable support and, indeed, considerable demand in the rural community for the province to do something about farm fuel prices. I believe the many petitions we have heard in this Legislature during the past couple of weeks demanding a reduction in the cost of fuel speak for themselves.

For example, the Ontario Federation of Agriculture has urged action from the government on fuel taxes. The following is from the OFA's pre-budget submission of May 12, 1986, to the Treasurer:

"Ontario producers are making every effort to reduce the cost of their product in the hope of improving their profit margin" and, in many cases, simply trying to break even. "They find it especially aggravating that one of their major input costs, fuel, is very heavily taxed" by both levels of government. "In January, 55.7 per cent of the average price of a litre of gasoline was due to...taxes.

"While producers appreciate that the provincial government provides a rebate on fuel used for farm," on-farm, "purposes, they remain concerned that the remaining tax is substantial. We urge the government to address the issue of high tax-induced fuel costs in the province of Ontario."

We also know that on the government side of this House, the member for Lambton (Mr. D. W. Smith) was quick to condemn the loss of a two-cent federal rebate last year. I quote the member for Lambton, who is in this House this morning. He said, "For some farmers, it will be the final blow driving them out of business." It will be interesting to see how he reacts now that we are talking about 8.3 cents a litre. He was quick to condemn Ottawa over two cents last year, but the federal government has now done its share with a reduction of 5.5 cents a litre. It is Ontario's turn, and it is long overdue.

Prior to the OFA submission, the 1986 annual meeting of the Ontario Cattlemen's Association passed a resolution urging an Ontario fuel tax rebate program similar to Alberta's. This was the first resolution in the OCA's resolution book and it received unanimous support.

On April 2, 1986, the North Bay Nugget reported that the Timiskaming Federation of Agriculture directors' meeting had called on the OFA to consider calling for tenders for the supply of farm fuel to all OFA members. Failing that, the Timiskaming federation has declared its intention to explore the idea locally to get the best possible price for farmers.

I will now allow debate on this resolution, and I will take my remaining time at the end.

10:20 a.m.

Mr. Ramsay: I rise to speak in support of the resolution that is before us today. As a farmer, I have first-hand experience with the results of a resolution such as this and with the tax that has been placed upon farm fuels.

One area that has really been ignored when we have discussed the use of fuels on the farm is the fuel used in highway vehicles that farmers must have to go from one field to another, to transport produce and even to travel into town to buy supplies and parts. These are all business expenses and, up until now, they have not been accounted for as business expenses by the provincial government.

A full tax has been put upon this industry, and as the member for Stormont, Dundas and Glengarry (Mr. Villeneuve) has said, it causes real trouble. The provincial tax of 8.3 cents may not seem like a lot of money to many people in this province, but it is a great expense if one is very highly involved and has an intensive operation that is dependent upon fuel. One way in which the provincial government can show its goodwill to the farming industry is by eliminating this tax on farm commercial vehicles.

It is interesting to note the amount of tax that is generated on a litre of fuel, if we price gasoline and fuel at what it was just a few months ago: 50 cents. The total tax on a 50-cent litre of fuel or gasoline is 14.7 cents; 8.3 cents is provincial money, and the other 6.4 cents is federal money.

We have seen a reduction in the federal tax on farm fuel. I am not clear -- maybe the member for Stormont, Dundas and Glengarry can help me -- on whether that will be counted on farm commercial vehicle use or whether it will be just on farm use. I am not sure of the announced federal excise tax reduction on fuels. This hits the heart of the matter, because much of the fuel consumed by the farmer is off the farm. It is important that we recognize this, especially since we have an industry that is ailing at the moment.

It is particularly important now in that it becomes a mechanism that can be handled fairly readily by the provincial government. It is surely within its jurisdiction. I believe there are other powers within the province's jurisdiction, and I have brought up these concerns in the House to the Minister of Consumer and Commercial Relations (Mr. Kwinter) on the total cost of gasoline and the power he has. We have had great debates about that. The minister has said he does not have the power to control or regulate. He admits that on some days, or the Premier does, but on other days he does not admit it. We have a fuzzy area there.

We are still going to try to see eliminated some of the differences which we think are unconscionable, such as the difference between unleaded and leaded gasoline. Experts have said there is no excuse for a three-cent or four-cent differential in some parts of the province between the two grades of gasoline. It is a very big problem for motorists in general but more specifically for farm fuel users, especially when we consider that leaded gas is a poison that we are spreading throughout the environment. That is wrong. We should be encouraging the elimination of the use of that fuel.

This is one area in which the government could act. As a first step, it should investigate the pricing of nonleaded gasoline to find out why it is so high in relation to leaded gasoline.

What we are talking about today is something that could be passed immediately and that the government could act upon. It would be an immediate break for the farmer and would be like putting cash into his hand.

I fully support this resolution. I also encourage the members of the House to support it. It is something that is needed out there. We should start to pay more attention to the farmers of this province.

Mr. McKessock: I am pleased to have the opportunity to respond to the honourable member's resolution that the government should permit the use of tax-free gasoline and fuel for farm commercial vehicles licensed in Ontario under the Highway Traffic Act.

As a farmer, I will accept resolutions proposing tax-free gasoline for my truck. These days a farmer will not look a gift horse in the mouth. However, the chances of getting tax-free gasoline and fuel for farm commercial vehicles are slim. The member could have come up with a resolution that would have been equally helpful to the farmers and more easily supported by both the government and the public.

Someone once said that the world is round so that we cannot see too far down the road. This resolution makes me think of that. The resolution needs a lot of thought, because it could easily be misused.

As it stands right now, both the government of Ontario and the federal government provide almost complete rebates for sales and excise taxes on fuel used by farmers for off-farm vehicles. Gasoline used in farm vehicles by farmers is taxed at 8.3 cent per litre and is rebated at an amount of about $8 million a year. Diesel fuel, taxed at 9.9 cents per litre, is tax-exempt when used in farm vehicles, and this amounts to a tax exemption of approximately $20 million a year.

However, as the member points out in his resolution, gasoline used by the farmers in vehicles on public roads, such as the family car or trucks used to carry materials to and from the market, is taxable. Perhaps the member is pointing out that the hauling of produce to market is part of the farming business. I agree that he has a point. But to give farmers tax-free gasoline when using farm vehicles on public roads would put the farmer in a difficult position. I do not want to see the farmer put in a position where he is criticized or suspected by his city cousins of getting tax-free gasoline when he drives to Toronto in his truck for a visit on Sunday afternoon.

As the member knows, the gasoline tax for vehicles used on public roads applies to everyone in general. Exemptions and rebates are given for specific uses, such as farming, forestry and mining, but only for off-road use. Giving farmers a general exemption as a group would be difficult and expensive to enforce, would leave the farmer open to criticism and could cause commercial trucking operations to claim that farmers had an unfair advantage when hauling agricultural produce. As well, other producers in similar situations, such as foresters and miners, would feel they deserved a similar exemption.

One of the honourable member's main points seems to be that lifting the gasoline tax on farm commercial vehicles could somehow give the farmer an edge when competing with subsidized foreign imports. Although it is true that high agricultural input costs make it difficult for the farmer to compete on domestic and world markets, the tax rebate suggested by the member would have little effect on the farmers' ability to compete with subsidized foreign imports.

When it comes to subsidy, I would like to point out the well-known fact that Canada cannot afford to compete with the treasuries of the United States and the European Community. The US and EC farm sectors are about eight times as large as Canada's and feed 10 to 15 times as many people. Both the US and the EC receive vast subsidies on their farm products and can afford to sell at below the cost of production. I suggest that when competing with operations of that size, lifting the gasoline tax on farm commercial vehicles will not have much impact on our farmers' ability to compete. We are thinking of more effective ways to help the farmer.

10:30 a.m.

I spent 10 years in the Legislature trying to get the government to do more for farmers. It is good to see that with the Liberal government now in power, things are getting better. The new Liberal government has increased the agricultural budget by 39 per cent since it took office. However, I feel the farmer will never get what he deserves until he takes production, marketing and pricing of his products into his own hands. By this, I mean the farmer must get his product into the supply management system.

I have two reasons for being a supporter of supply management. First, supply management would allow the farmer to get the price he deserves for his product. Second, it would allow us to maintain our present production or close to it. At present, the federal and provincial legislation is in place for farm commodity groups to take the appropriate action to bring in supply management. Both governments at this time are supportive of such action and would work with farm groups with considerable speed.

One of the first steps in this process is for the recognized farm commodity group to get the farmers' consent and then to ask the government to take the necessary action to bring in supply management. The milk, broiler and egg businesses are currently doing considerably better than the other sectors of the agricultural community because of their supply management setups. You cannot find a farmer under this system who disagrees with it. It amazes me why other farm products do not follow suit.

I agree there are problems with supply management, such as quota pricing, but I feel there are ways these can be corrected as well. I had a potato grower tell me the other day that Ontario now produces only 40 per cent of the potatoes that it did 20 years ago and that it produces only about 20 per cent of what it needs.

In the years gone by, other provinces and countries have expanded at the expense of Ontario. If we go to supply management, we will hold the production we have, once the quotas are in place. When bringing in supply management, we may lose a few exports in the red meat industry, but I believe it is only a matter of time before we lose these exports in any case. The US will not let us have an import-export advantage in red meat for long; it can produce just as cheaply as we can. The Americans may feel that our hogs are a better product than their own at present, but I expect the US farmer of tomorrow will produce the products the consumer wants. The other countries that were once importers are now becoming exporters as well.

To conclude, it looks as if the Canadian livestock farmer will soon be producing for the Canadian consumer. The sooner he moves to supply management, the sooner he will hold his portion of this production.

I thank the House for the opportunity to respond to this resolution and to address issues that are and will continue to be crucial to our farming communities.

Mr. Sheppard: I am pleased to have the opportunity to speak for my colleague's resolution. Farmers in Ontario need a break. The member for Stormont, Dundas and Glengarry has made an intelligent and straightforward suggestion. As a farmer, I support it; as a politician, it makes good sense.

In the great riding of Northumberland, this resolution would involve and benefit a vast majority of my constituents. Indeed, this resolution appears to simply follow the line of past legislation on behalf of Ontario farmers. It is the logical extension of policy that was already on the books.

It is obvious to everyone that the financial situation in agriculture must be a top-priority issue. Recently, the costs of many sorts of farming have risen faster than the general rate of inflation. This is also a time when the prices for commodities have declined in real terms, and yet energy continues to be one of the biggest items on the farm balance books.

Over the years, I have listened to many discussions in this House as well as in committee on ways to reduce the farm energy bill. Some have talked about alternative energy. We have talked about using farm waste to create natural gas. We have talked about using various forms of fuel alcohol. All these discussions have ended up with the same conclusion: Ontario farmers will continue to rely, for a large part, on conventional fuel. The research and technology is just not there at present to allow alternative fuel to be any more than a supplement to conventional fuel sources.

As I mentioned earlier, these discussions always lead us in a circle. That circle takes us back to the farmers' dependence on gasoline and diesel fuel. Previous administrations were wise enough to provide a break for farmers on the price of fuel for running farm equipment. This equipment, which is essential to every farmer, is expensive enough to buy as it is, let alone the cost of fuel and maintenance. Modern farming cannot do without this equipment, and so we should provide a reduction in their fuel costs. The increased taxes on fuel in the fall budget hit the people who could least afford it.

Furthermore, all the member of this Legislature know that agricultural producers have no say in their costs of production, nor have they any say in what they receive for the product. Although farmers will accept any help they can get, members will probably find that most of them acknowledge that measures such as interest-rate breaks and loan guarantees are, at best, only ways to buy time.

The farming industry's reliance on borrowed money ensures that the debt will always be a central issue, but the answer for those who want to stay in business is not how to shed their obligations but how to meet them. We could assist them in meeting those obligations by allowing this resolution to be passed. This resolution is aimed at providing financial relief for nonroad farm vehicles such as the trucks that take goods to market. This could easily be called the transportation sector of farming, which is a significant cost on its own.

Since 1980, the provincial government has been actively encouraging the transportation industry to reduce its use of gasoline and diesel fuel. We have seen plans for pooling trucks, for improving truck efficiency and for providing alternative fuel. These ideas are most effective in urban areas and with owners of large fleets of vehicles. In rural areas, some of these ideas do work, but considerations such as distance, different needs and different markets prevent effective pooling operations in general. Alternative fuels are not easy to come by or as convenient.

Again we are led back to the beginning, and that is the farmers' dependence on fuel. As we are all aware, there is a growing concern over the price of gasoline in Ontario. No one can predict with any certainty the long-term price of gasoline, but any discussion of the price of gasoline avoids the central issue. That issue, once again, is that farmers are dependent on this fuel. At whatever level the price of gas is set, it continues to take a large chunk out of farm income.

These days it is even more important for farmers to have ready access to the city marketplace. Severe competition makes it all the more important for Ontario producers to get their product to market quickly, especially during the all-important season from midsummer to early fall, when fresh fruit and vegetables are available. This results in many trips to the city food terminals and markets. It also results in more use of fuels by the farmers to ensure that produce is on the table when the consumers want it. Again we are inevitably drawn to the fact that Ontario farmers must rely to a great extent on fuel for their livelihood. Anything that helps ease the burden this dependence causes will be welcome in farming communities.

To my mind, my colleague the member for Stormont, Dundas and Glengarry had a good idea when he proposed tax-free gasoline and fuel for farm commercial vehicles. The mechanics for setting up this system should not be very difficult. It could be arranged that commercial farm vehicles with farm plates licensed in Ontario be given a special permit so that gas bar operators would know that tax was to be deducted from their gasoline bill. Or perhaps an average could be worked out by the farmer and an official of the Ministry of Agriculture and Food, resulting in the farmer getting a cheque from Queen's Park giving him a reimbursement of tax paid for fuel.

10:40 a.m.

A system would have to be implemented, however, to ensure that the farmer's cash flow was not interrupted at a time of tight money. Taking into consideration the amount of the refund, farmers could apply for a tax rebate on a monthly or a bimonthly basis, as opposed to applying once a year. As I mentioned earlier, we have to realize that interest rates are a consideration. When one has to borrow money to obtain supplies, interest rates are an added expense for any business.

We need to provide all the help we can to keep the farming industry alive today. This would involve a fair amount of paperwork for the ministry and farmer alike, which is why I personally prefer the special permit idea.

A number of other approaches could be taken to turn this resolution into an effective cost-cutting measure for the farming communities in Ontario.

At a time when the government in its fall budget advanced funds to help farmers leave the land, I would hope that the members of this Legislature would give serious consideration to my colleague's resolution. Let us in every way we can help the farmers to survive instead of encouraging them to leave the land. Let us help the farmers to get their products to market cheaply, thereby helping the consumers to get the best possible price for home-grown Ontario produce.

Lower farm input costs would definitely benefit both the producers and the consumers. If we are truly serious about promoting self-sufficiency in food, we should take a good look at this resolution and do what we can to make it official government policy.

I am proud to support this resolution for the benefit of all farmers in Ontario. I urge all members to support it.

Mr. Hayes: I rise in support of the resolution moved by the member for Stormont, Dundas and Glengarry, which would permit the use of tax-free gasoline and fuel by farm commercial vehicles licensed in Ontario under the Highway Traffic Act.

I support the resolution, but I believe it barely scratches the surface of today's problem in the agricultural industry. One of the biggest problems, and the main problem, is that the farmers are not paid a fair price for their commodity and their labour. If this were done, we would not be here today speaking about this kind of resolution.

Many of the farmers in my riding of Essex North and in Ontario in general have to work at off-farm jobs to hang on to what they have or to try to finance their farm operations. In my riding alone, I know of a large number of farmers who work in the auto industry, not because they love putting in another eight, 10 or 12 hours a day but because of the way the system works. They are not getting paid a fair share.

One does not have to be an economist to realize the effect it would have on our economy if the farmers were able to work full-time and not have to work at another job to supplement the farm operation.

When the agricultural industry is doing well, the whole economy will do well. This is why this government should put more emphasis on looking into and improving our agricultural industry. Too many family farms are being lost today. And it is not only that farms are being lost: Families are breaking up; people lose everything; they lose their own dignity.

We also have to look at another area. We always seem to be talking about finding money for the farmers and subsidies and grants. Farmers are proud. They do not want handouts. They want a fair price for what they do; they want a fair price for their commodities and their labour. Farmers are always faced with very high input costs. The prices of fertilizer, seeds and fuel continue to go up. At the same time, the farmers do not know from one season to the next whether they will ever be able to recover their costs.

As I mentioned earlier, this bill only scratches the surface and is the least this government can do to help preserve family farms and take some of the burden off the farmers in Ontario. I was very surprised to hear the member for Grey (Mr. McKessock) indicate that he was not particularly in favour of this bill. I repeat, it is probably the least thing we can do to take off some of the financial burden in that particular industry. I reiterate that I support this bill, and I hope we can move on with it as quickly as possible.

Mr. D. W. Smith: I too am pleased to take part in the debate on this resolution put forward by the member for Stormont, Dundas and Glengarry. In listening to the member as he spoke on this resolution, I know he has put a great deal of thought into it.

On the surface, I believe the proposal appears to be excellent and would assist in reducing the cost to the farmers. When we look around us, though, everything else seems to be going up. All the things we buy seem to be going up in price. I wonder whether asking for another handout is going to be the answer to our problem. Everyone else's cost of living is going up, and wages keep going up, but farmers' revenues keep going down.

I think we have to address this issue from another angle. We must consider that taxes are imposed on different products or services to help balance the different sectors of government and society. From time to time the government can give exemptions or rebates to aid a certain group or sector, thus giving that group encouragement and helping it over a certain difficult period. This concept has been used in the past, and I would have to say it has been quite successful in accomplishing the government's goal.

I also want to tell members that I have been in favour of assisting farmers, fishermen and the mining industry in this way on off-road use; I certainly stand behind that. The one thing I have never liked is the dye they put in fuel designated for off-road use. This has created a tremendous number of problems for the farmers. I know thousands of dollars have been spent to rectify what looks like a very small problem but becomes a major one for the person or individual who happens to own an expensive diesel engine. If we could get rid of the dye in the fuel, it might help.

10:50 a.m.

The member for Stormont, Dundas and Glengarry is suggesting in his resolution that we exempt the tax on farm commercial vehicles that are licensed. I can see that this will likely create problems with other people down the road. We have to work towards getting the price of our primary commodities higher; that is the first and foremost objective we should be trying to get across. That is necessary for a number of reasons, the main one being that not enough dollars are generated at the primary source to create profits to flow through the economic community and therefore enhance the social aspects of that community.

I am not saying the resolution of the member for Stormont, Dundas and Glengarry is not an excellent thought, but I believe it may not go far enough to accomplish a great deal of value or help to the farming community. There needs to be more fundamental change to keep our economic system and our small communities thriving.

The farmers' cash flows with the banks are now based on high input costs, as they have been for the past number of years. In that time, however, we have had declining revenues on the other side of the ledger. Over time, this is going to create tremendous equity problems within the farming community. In fact, it has reached that point right now.

Quite frankly, in my own riding of Lambton we have a number of farmers who are almost coming to blows with the bankers. In past years when they went to the bank, they were able to get their operating loans; there had been no problems. However, it seems that this year all of a sudden they are running into problems.

We have to turn around the thinking of the public at large almost 180 degrees. I have heard people from different walks of life say, "The farmers are just asking for another handout," that we are doing so in this resolution and that we are always crying for more. I think the farming community has this economic system figured out, and all they are asking for is their costs of production plus a profit, the same as anyone else seems to be entitled to in our society.

I can safely say that during the past 35 years you could take some of our major commodities, especially the ones we export, and you would find that in possibly only three or four years have farmers actually received their costs of production plus a profit.

I agree with the member for Essex North (Mr. Hayes) when he says a lot of the farmers are working in plants or in heavy industry. They are not there because they want to do a double job. They are there because they have to be to maintain their farms.

I want to mention a little article I noticed in the Toronto Star yesterday. It concerns the inquiry into the banks before Mr. Justice Estey. Claude Thomson stated that there were more banks in trouble to nearly the same degree as the Northland Bank and the Canadian Commercial Bank in western Canada, but he would not go on to say which they were or the numbers involved. He told the media he might have said too many things already.

I agree with the member for Stormont, Dundas and Glengarry. To turn this situation around in the farming community, yes, we would help the community to a small degree by voting in favour of his resolution, but I believe we have to turn around the thinking of the public at large. To make our economy work, to make our banks stronger and give them a better debt-asset ratio, we have to give our farmers increases in commodity prices. I agree with the member, but I think we have to go one step further.

I am pleased I was able to take part in the debate on this resolution. I have to support it, but I cannot put the government in an awkward position as well. I want to say to the people of Ontario, "We are not crying for more; we just have to have our costs to make the whole system work."

Mr. Guindon: In his budget, the Treasurer came out and admitted that agriculture was in trouble. Then he went on to provide nothing new for agriculture, except to cancel one program and to make trucks more expensive. My colleague and neighbour the member for Stormont, Dundas and Glengarry has pointed out that these types of trucks are used to transport food and milk. As the cost of the trucks goes up, the cost charged the farmers for deliveries of milk will have to go up as well. This cost will, of course, be passed on to the consumers.

Instead of reducing costs to farmers, the budget is actually starting to make things worse for farmers. The budget gives agriculture a 13 per cent increase this year, but it is common knowledge that most of the increase will go for 1985 stabilization payments, which the government delayed making in the past fiscal year. There is nothing in the budget to help farmers reduce their input costs so they can make a profit. The Treasurer should accept this resolution and change the Gasoline Tax Act and the Fuel Tax Act to give farmers at least this bit of relief.

Today is the first chance we have to demonstrate that the budget let farmers down and that it took the wrong approach in increasing farm costs. This House clearly showed it wants farm programs to increase input costs as well as the debt relief and interest rate issues. My riding is in the middle of the united counties of Stormont, Dundas and Glengarry. Many Cornwall residents work at providing services to the farmers of Stormont, Dundas and Glengarry, and many others work in the area of food plants. These people stand to benefit indirectly by assistance to farmers on the input side. They will not benefit from the programs contained in the budget.

This government has put all its eggs in one basket in its farm programs. Everything now depends on interest rate relief and loan assistance. Even though the Treasurer recognized that farm prices were a real problem, he did nothing about them. This resolution by my colleague suggests that we look at input costs. This resolution suggests that we give a fuel tax break for farm trucks as a means of helping to reduce input costs.

My colleague was interviewed by the Morrisburg Leader on this resolution in its March 26 issue. There, he used the example that a farmer hauling wet corn to the elevator may get as little as five miles to the gallon under those conditions. This year, corn prices are dropping. If a farmer looks at the additional costs of moving that corn --

The Acting Speaker (Mr. Morin): Your time is up.

Mr. Villeneuve: I thank my colleagues the member for Timiskaming (Mr. Ramsay), the member for Grey, the member for Northumberland (Mr. Sheppard), the member for Essex North, the member for Lambton and the member for Cornwall (Mr. Guindon) for participating in this debate.

It concerns me greatly when I hear the member for Grey in his defeatist attitude say he is worried about the farmer driving his pickup truck to Toronto with a farm licence on it on Sunday afternoon. I hope the member is not saying he is going to prevent this farmer from driving to town on Sunday if the farmer happens not to have any other vehicle. I have some problems with that.

Mr. McKessock: I do not want him to be criticized by his city cousins.

Mr. Villeneuve: City cousins should never complain when their mouths are full.

The Liberals want to keep farm land in agriculture, but they do not care about the farmers out there. That concerns me no end. We have the systems in place. First of all, we use coloured fuel for diesels. I agree with the member for Lambton; I would like to do away with that because it causes problems, but it is there. We also have a rebate system for farm vehicles that do not have licence plates for rebate of the gasoline tax. At the Ministry of Transportation and Communications, we have a category for farm licence plates. All systems are in place.

I have a further point. During the recent debates on the topic of freer trade, much had been said about increasing United States protectionism and US countervailing. This resolution is not countervailable; it will not cause problems. Programs that are countervailable by the US are those that provide funds to producers of selected commodities in specific amounts and rates.

11 a.m.

I agree with members who say we are not going far enough. Of course we are not going far enough. Agriculture is in deep trouble, but this is a message. It is not a great amount of money, but it is a message that this Legislature recognizes the problem of input costs being faced by the agricultural community. It would send a message out that we now realize, appreciate and are starting to address the problems. Instead of simply handing out a rebate on interest and offering loan support, this would address all agriculture, not just those segments that are in trouble.

In conclusion, I hope I have been successful in showing that Ontario agriculture needs that positive step towards assisting in the cost of producing food, the food that the nine million people in this province consume and a lot of which is exported to markets that are difficult to obtain. I hope this House realizes that agriculture needs help and that the message we will be sending in a positive move on this motion will tell agriculture that the Legislature of Ontario knows and supports it.

The Acting Speaker: The time for this ballot item has expired.

WATER DIVERSION

Mr. Morin-Strom moved resolution 32:

That in the opinion of this House, recognizing that the water resources of both the Great Lakes basin and the James Bay basin are precious public resources, and recognizing the constitutional jurisdiction of Ontario to manage and protect its freshwater resources, and recognizing the Great Lakes charter to which Ontario is a signatory, and recognizing that Simon Reisman, Canada's chief trade negotiator has publicly stated that the GRAND Canal project could provide key leverage to negotiate a free trade deal with the United States, this House condemns any attempt to link free trade with diversion of Ontario's water resources; that water resources cannot be part of any trade discussions with the United States, and that Ontario will not consent to any major diversion of its fresh water, now or in the future.

Mr. Morin-Strom: I am very pleased this resolution has finally come up for debate. I hope there will be a vote with very strong support from all three parties. I feel this resolution is vitally important in the context of the free trade negotiations currently going on and of the fact that our chief trade negotiator, Simon Reisman, has been such a strong proponent for the negotiating of a major sale of Canada's water resources to the US as one of the factors that he thinks should be entered into in the negotiations with the US.

This issue came up last fall. It was at that time that I introduced this resolution. It was spurred more than anything else by a major article entitled, "Canada-United States Trade at the Crossroads, Options for Growth." This article came out in the autumn 1985 issue of the Canadian Business Review, a very respected business publication put out in our country. The author of the article is Simon Reisman.

This is a major seven-page article which goes into some depth on his fervent belief that a free trade deal would be good for Canada. However, most disturbing to me was the link he made between the need for a free trade agreement and the sale of Canadian water.

The subheading just above his name reads, "A comprehensive Canada-United States free trade agreement would be good for Canada, and Canadian water could be used to negotiate a deal." Under the highlights on the front page, it goes on to say: "The author proposes that the United States be offered access to Canadian water by converting James Bay from a salt-water body to a fresh-water lake by building a sea-level dyke across the mouth of the bay. The project is known as the GRAND Canal." I believe the word "GRAND" stands for great recycling and northern development; this was the acronym.

The article goes on to talk about free trade to some extent, but as well, it goes into some detail on Simon Reisman's thoughts on the GRAND Canal project and some description of this project. It includes quite a diagram, which lays out the whole concept.

The proposal envisions the building of a sea-level dike across the mouth of James Bay, which would create a fresh-water lake from what was previously a salt-water body. Simon Reisman proposes that the United States be offered access to this Canadian water through a system of canals, dams, pumping stations and underground water tunnels fed through the Great Lakes-St. Lawrence water basin. The water would then be distributed through an elaborate canal system of reservoirs, aqueducts, pumping stations and power plants. The new water would then reach water-deficient areas of Canada and the United States.

The James Bay water basin is a major water basin in Ontario. I am sure many members do not realize that the amount of water flowing into the James Bay basin is approximately double the water flow going into all of the Great Lakes system. The amounts of water we are talking about are absolutely incredible and would have a devastating effect on the water flows through the Great Lakes system.

The project proposes to move into Lake Huron a volume of fresh water equivalent to twice the flow of the current Great Lakes system. It would do this by pumping the water upstream to roughly the source of the Ottawa River and then, via the Ottawa River and across through the French River, into Georgian Bay.

From there the flow that now goes from Lake Michigan into Lake Huron would be reversed, and instead the water would flow back into Lake Michigan and from there out west. As well, the flow from Lake Superior would be essentially cut off going through the St. Marys River into Lake Huron, and it would be forced via canal to pumping stations out west through the western end of Lake Superior.

The project may appear to be a rather harebrained one, but it is being backed by a number of important interests in the Canadian business world, including the world's largest construction company, Bechtel, the Power Corp. of Ontario and the nuclear power industry in Canada, and it has been endorsed by Quebec's Premier, Robert Bourassa.

Concerning the GRAND Canal project, to quote directly from Simon Reisman, "The magnitude is five times that of the Apollo moon project, and the project will cost approximately $100 billion and would take 10 years to construct and put into operation."

He goes on to say: "To me, most importantly, there would be bargaining leverage that Canada could exercise by virtue of owning this water and being in a position to control its use. I believe that this project could provide the key to a free trade agreement with the United States."

Very shortly after Mr. Reisman authored this article, he was named chief trade negotiator by Brian Mulroney. Of course, as we all know, we are just in the process now of beginning formal trade negotiations. It is vitally important that Ontario stand up for its interests in protecting its own water resource and protecting its long-term heritage, take a very strong stand and say that this issue is under Ontario provincial jurisdiction and we will never agree to a major diversion scheme of this sort.

11:10 a.m.

There has to be serious concern about the potential for a project such as this and about the support this project has within the federal government. The GRAND Canal project is getting support from Brian Mulroney as well. He has been quoted as saying he views with enthusiasm the prospect of getting Ottawa involved in looking further at this scheme. In recent months, the National Research Council has approved further funding for the GRAND Canal Co., which is looking at further studies towards the development of this project.

There are concerns, however, about why this has been greeted with enthusiasm by certain officials high up in our federal government. The scheme could well be a mega-disaster in both an environmental and political sense. As an Environment Canada official, J. P. Bruce, pointed out at a conference held in Toronto, "There are severe environmental uncertainties associated with large-scale diversions."

Such diversions could alter the world's climate. Our north would become warmer, with our more populated south and the United States suffering drought. That is only a part of the environmental worry, but politics comes into it too. Drought could cause even more demand for our water. Which drought-stricken country would be entitled to meet its needs first? Would it be the US as the buyer or Canada as the seller?

If we were to dig this GRAND Canal, we might end up with little or no say in the matter. As Mr. Bruce states, "Once Canada allows large volumes of water to be exported, the diversions will probably be there in perpetuity." A $100-billion pipeline to the US could not be simply shut off at will, particularly once those on the other end have become dependent on the water. We would no longer have control over our own water.

One of the serious issues here is whether the water is actually needed in the US. There are talks of shortages of water in the US Southwest, but the Americans could handle their impending shortages by taking better care of their own supplies. The US Water Resources Council concluded in 1978, "There is no national water shortage problem now nor in the foreseeable future," but there could be pressure enough to go ahead with the diversion scheme if the US does not conserve more water.

The US has tried diversions within its borders, but it has been pointed out that the real effect of these projects has been to transfer income from one region to another. Vast sums of public money have been spent to provide cheap water for a number of western farmers, in many cases, huge, corporate agribusinesses.

The US Comptroller General studied six irrigation projects and found that what these customers paid for their water was less than 10 per cent of the water's cost. The US taxpayers were the ones who found themselves footing the bill for the rest of the cost.

If these relatively small irrigation projects make such little economic sense, why should anyone believe a transcontinental canal would be any better? If we were to build such a canal, could we really expect the US farmers to pay more than they have been paying in their own country? Who would end up paying the real cost of a Canadian diversion? Would it be the buyer or the seller?

One of the major concerns about this proposal for northerners has to be the means by which the energy will be provided to lift the water from the level of James Bay up to the height of the source of the Ottawa River. If one goes back to high-school physics, there is something called conservation of energy. The amount of energy required to lift the water is the same as the energy that is provided as the water falls. As we know, that means that to lift all this water flowing into James Bay, it has to be equivalent at least to all the potential hydro power that can be generated from all the rivers flowing into James Bay, only a portion of which have been developed to this point. That is why the energy component to this is the most critical part of the whole project, and the energy component obviously is greater than the hydro resources we have in all northern Ontario and northern Quebec.

As a result, the project would require the building of nuclear power plants along the canal at the various pumping stations as we lift the water from one man-made lake reservoir to another. We have quotes that indicate the energy for this proposal would come from Hydro Québec power plants and from Ontario's nuclear plants.

Gilles Marinier, a former James Bay energy corporation vice-president, who is now closely associated with the project through another major construction company, The SNC Group of Montreal, has been quoted as saying, "One possibility would be to build nuclear stations along the canal." This has to be profoundly disturbing to residents throughout northern Ontario, particularly to our native population. I have received very strong support for this resolution from a number of northern native groups that are concerned about the possibility of nuclear power development in the north and, of course, a total disruption of their way of life around James Bay and along the proposed route for this canal system.

If nuclear power is used, this would present a danger to anyone living nearby. Also, the uranium required to make the fuel for the nuclear station would mean more uranium mining and an increased demand for uranium that can serve only to hurt people further. Cancer deaths, miscarriages, birth defects and the poisoning of the plants, birds and animals, air, earth and water have been well documented.

Finally, I would like to address again the question of whether large-scale water-diversion projects such as the GRAND Canal are really necessary. While certain regions in Canada and the United States are experiencing water shortages, it may be predicted that these local deficiencies will worsen in the years to come if present trends continue. However, these water shortages are largely the result of waste and mismanagement of local water sources. Another contributing factor is pollution, which makes large quantities of water useless, dangerous and unable ever to support life again.

The focus has to be on getting both Canadians and Americans, in particular, to clean up their act and to get their water usable, drinkable and into a state where their own current water sources could be used rather than having to drain off our pristine water now flowing into the James Bay area.

Massive water-diversion projects such as the Grand Canal are not necessary if people in the dominant society become conservers of water rather than wasters and polluters. Maybe it is time that the non-native people on this continent started to pay attention to the traditional native ways which were once common the world over.

The Hopi Indians in Arizona have been growing corn in a desert environment since the beginning of time. They do not even use irrigation, yet they have enough to eat. These people have perfected agricultural techniques which are suited for land with very little water. The Hopi people have been able to maintain balance and harmony with the natural world. This lifestyle has many things to teach us all, particularly those living in similar climatic areas. The Hopi people are water conservers. They know, love and respect the natural world because they know they are part of that natural world. They are taken care of by the natural world, and this is a good and responsible way to live.

I would ask that my remaining time be reserved, and I look forward to hearing the comments of other members in this debate.

11:20 a.m.

Mr. D. R. Cooke: I rise to support the resolution of the member for Sault Ste. Marie (Mr. Morin-Strom). I do so representing perhaps the largest area in population remaining in the province which is not serviced by Great Lakes water at present. If we take a look at the map of Ontario, practically all of the province is bounded by the Great Lakes or the Ottawa River, with the exception of the areas in the Canadian Shield. London is now serviced by a pipeline, I believe from Lake Erie.

We have some concerns about water supply and perhaps we could be an area that could be looked at as having some problems akin to those in the United States.

Yet, adopting the view, as I understand it, of the Grand River Conservation Authority, I reject outright the thought that we want to have a pipeline from Lake Erie to our community so that we can drink our own pollution. Rather, the needs in that area have to be resolved with the continued use of wells; but that is a different subject. I am concerned that serious credence is being given to such a far-fetched and outlandish concept.

In 1985, the then-dying Conservative government entered into a Great Lakes charter with the other provinces and states that border on the Great Lakes. That charter was meant to be principles for the management of the Great Lakes water resources, which were described as being precious, public natural resources. That charter indicates that the waters of the Great Lakes basin are interconnected and a part of a single hydrologic system. The multiple uses of these resources from municipal, industrial and agricultural water supply; mining; navigation; hydroelectric power and energy production; recreation, and the maintenance of fish and wildlife habitat and a balanced ecosystem are interdependent.

The signatories went on to indicate a desire to preserve that. I am disturbed that the federal government is seriously looking into the concept of diversion with the GRANDCo project. I understand that GRANDCo has been granted $30,000 for a water export project feasibility study and that it is seeking a further a $763,000 from two different federal sources. The province has a great deal to say in this regard and it is not something that can be seriously considered without our approval. I do not know that there is any particular approval in this House. The Leader of the Opposition (Mr. Grossman), despite his party's opposition to this concept in the past, seems recently to have refused to confirm his commitment to oppose water diversion.

I understand one of the things that could happen if this project went through is that the polluted waters in the Niagara River, which the Americans are so unconcerned about, could be diverted from Lake Ontario back into New York state and into New England and be visited upon the polluters themselves. I do not suggest they should have that problem visited upon them, even though they may, unwittingly, wish it. I suggest the Americans take a good look at that.

We should take a look at the problems that have occurred with the Aswan Dam, where the Soviet Union and Egypt tried a huge water diversion project, which has caused all kinds of ecological problems that were not predicted at the time: stagnant waters; a snail's disease, where if you even touch the snail or its slime you end up dead. They did not know about these things when they asked for the Aswan Dam to take place.

I reiterate the suggestion I made during the throne speech debate last week, that when you look at new technology, you can never tell what all the downsides will be. We have to take a few leaps, but in this case, the downsides are so incredible and there must be so many we do not know about that they are frightening.

There are probably hundreds of thousands, if not perhaps millions, of species of birds, fish and flowers that will be endangered if we change the ecosystem of North America to this great extent, in areas in which we have not put any thought. I think about a situation where the previous government permitted a road to go through Ipperwash Provincial Park, and a simple, short road destroyed the last of a species of flower. That sort of thing would be incredible. I understand the Nishnawbe-Aski people have indicated their whole lifestyle would be completely destroyed. Therefore, I ask the House to vote against the project.

I am pleased there is a shoreline management review committee, with the member for Kent-Elgin (Mr. McGuigan) as the chairman, which is looking at some of the huge problems that exist from a very slight change in the present ecosystem in the Great Lakes, where the water level changed slightly. How could we ever be certain of our control? Many of us have cottages near the upper side of a dam. Those simple dams in those simple circumstances are subject to serious problems of control.

What if a dam broke? What would be left of Ontario? Some serious questions have to be pondered. I think it would be a proper course for this House to tell the federal government and the GRANDCo people that we are not interested.

Ms. Fish: I rise to join in the call for the House to refuse to be any part whatsoever of a water diversion scheme as part of a free trade agreement with the United States or, I might add, part of any agreement with the US. The proposed diversion has been around since the days of Eric Kierans in 1959. It was unacceptable then, it is unacceptable now and it will be unacceptable in the future. The reasons are simple, they have been known for years and still apply today.

Among other things, this proposed diversion involves removing a precious resource from us. There are those who say that, with the flooding problems we have on Lake Erie and elsewhere, when we look around our province at the amount of water we have, surely we can afford to make use of that and export it. The fact that we have flooding problems in no way suggests we have water to burn in a long-term, permanent diversion arrangement with the United States.

Yes, there are flooding problems in Lake Erie. Yes, they should be dealt with. Yes, there should be relief for those near the banks of the Great Lakes. Yes, we should be prepared to see some shifting of the levels in some small way as emergency relief. That is not what this diversion scheme proposes and that is not what the free trade negotiator for the federal government has indicated he supports. He has indicated support for a massive diversion that would, among other things, place at real risk many of the ecological environments as well as the agricultural industries of this province.

11:30 a.m.

For example, all the information to date suggests there may be a devastating effect on fish spawning grounds, an area of care and concern in my government in the years we were in office, with the investment we made in ensuring that the fisheries were strong and our waters full.

There is also the very serious concern about diversion that would replace fresh water with salt water, an incredible proposal. What impact does that have? Apart from the fact that very different marine life lives in salt water and in fresh water, there is the important impact on the climate: the fact of the freezing point differential between salt water and fresh water and the impact this in turn has on the moderating effect that large bodies of water currently have on the climate immediately around them.

It is perhaps most important to realize that the fight we have in front of us for our water is a fight to ensure clean water. It is a fight to ensure that the toxic chemicals that are now discharged into our waterways and drinking water sources are stopped; that they are cleaned up; that the water we do have is returned to the uses we always used to feel should be made of it, and that perhaps in more halcyon days, when we did not understand the impact of the chemical load in our water sources, thought was the case. That is to say for the important fisheries, for the importance of tourism; and perhaps more important than anything else, for the basic and fundamental health of the people of Ontario as they draw their drinking water from these same areas, as they have their recreation on them, as they are exposed to the chemicals that are there now and as they would be protected from that exposure with a cleanup in the future.

Another question, surely, is the need. Part of the interest in the United States for this incredibly short-sighted approach on the part of some huckster promoters in this country to sell out our fundamental resources is because of a flagrant disregard for the environmental impact of overdevelopment in the US and an assumption that water can always just come down from the north. In the first stretch, it was in northern parts of the US. In the second stretch, it is a little bit over that border, which has been observed only occasionally; that is to say the Canadian north.

The procedures the US has undertaken in its development practices have been echoed in its agricultural practices. The wanton disregard for the drain on aquifers that took millions of years to fill means they are being reduced in less than a lifetime. The answers, as the Worldwatch Institute of Washington, DC, has clearly indicated, is found not in taking someone else's water, with a potentially devastating impact on the environment of a friendly neighbour -- namely, ourselves -- but rather in finding changes in the agricultural practice in the US to go to dry-crop farming and changes in its development practice for conservation of the existing US water supply. The US is not short of water any more than Canada is short of water; it is short of sensible and practical policies to ensure that the water is well used.

We trade a number of things with the US and a number of things may warrant some review, a review that we hope will always be to the benefit of Canadians. However, in the area of the environment, the trade has been all one way and it has been all to our disadvantage. We are currently dramatic importers of acid rain produced in the US. We are dramatic importers of toxic rain produced in the US. We are dramatic importers of chemicals that leak down the Niagara gorge, that are emitted from proposed Detroit treatment plants and that come to us from throughout the northeastern US and the coal-producing states of the Midwest.

We import a great deal that has seen a tremendous devastation in our environment, that has seen our lakes die, that has seen our tourist industry crippled, that has seen an impact on our fisheries, that has seen a tremendous expense put forward to us in securing safe drinking water for our population, and expenses and a price in health as well as in facilities that we cannot even yet begin to contemplate with the impact of the cocktail effect that currently exists with the chemicals in our waterways.

Now is not the time to place on the table the issue of the draining of our water that will have such a terrible environmental impact if the diversion goes through. In any discussion of exchanges with the US, in any discussion of the balance of import and export, now is the time to place on the table the real priority: ensuring the complete cleanliness of water and ensuring that responsibility is exhibited by the US to prevent the lethal draining of old, uncared-for, unregulated, unattended dump sites, industries and municipal sewage works into the waterways we drink from. That is the priority.

If there is a sensitivity that the discussions should have, directed as they are from Ottawa, it is surely to understand that the priority in exchange is to deal with the deleterious effects we have already suffered from an unwarranted import; not to take the resource we are struggling to improve and send it south of the border to a country that does not need it and that has refused in the past to assist us in ensuring water purity and cleanliness.

Mrs. Grier: I am very pleased to participate in this debate and to support the resolution proposed by my colleague the member for Sault Ste. Marie. I am very pleased to hear support for the resolution expressed by members of the other parties.

It is vitally important that this House be on the record and register very strongly its opposition to any scheme that would see the water, the environment and the ecosystem of this province placed on the table as a pawn in the trading that is going on between our federal government and the US government.

In that debate over free trade, it seems to me there are many different classifications of arguments, and in some of them perhaps the answer is not clear. Some say jobs will be created by free trade; some say jobs will be lost. Some say social services will be diminished. Some say economic growth will increase; some say it will lessen. I think free trade is going to be very bad for our country for all those reasons, but I can at least listen to the arguments on the other side. I am not sure we know for sure what the consequences will be.

But when it comes to trading off our water, when it comes to the scheme to divert the waters at James Bay south to the United States, surely there can be no question about what the consequences will be; the environmental consequences are irreversible. It seems to me the height of arrogance to feel that we can play creator and change the face of the landscape with a project of this magnitude. It seems to ignore the vulnerability of the ecosystem that is involved and to ignore the traditional lifestyles of so many people in northern Ontario -- the native peoples and the rest of the population who have made that area their home and their economic base.

Over the course of the past few years, we have been lulled into a feeling that perhaps things were improving on the Great Lakes. There was a gradual sense that they were important and that improvements were going to occur. I refer to the Great Lakes charter, which was signed in February 1985 by Ontario, Quebec and eight states in the US.

11:40 a.m.

That charter was hailed as a step in the right direction and as an improvement in the environment of the Great Lakes basin. It stated very explicitly that there would be no diversions on a large scale. But when one probes beneath the surface of that agreement, one finds that it is not legally enforceable. One finds that all it really provides is prior notification to the other signatories when diversions are contemplated. In reality, one finds the effect of that charter has been to streamline the approval process rather than to prevent diversions. The diversions, albeit on perhaps a small scale, are now easier to have approved by those people who feel that is in their interests. We have to be very careful in hailing as forward steps charters of this sort or agreements that may be signed between the federal governments of Canada and the US if they do not contain any meaningful safeguards to protect our environment and our water.

One of the positive results of the signing of that charter has been the formation of an organization known as Great Lakes United. It is a unique coalition of groups that are concentrating their energies on the preservation of the Great Lakes and that are unanimously opposed to the GRAND Canal diversion schemes.

It is interesting to note the variety of groups that are part of Great Lakes United. Organizations include the Michigan United Conservation Clubs, the League of Women Voters, the United Auto Workers, the city of Toronto, the Great Lakes committee of the Sierra Club and the Canadian Environmental Law Association, to name just a few. The range of interests and the breadth of the concerns reflect the diversity of the membership of Great Lakes United.

The resolutions passed by Great Lakes United over the past two years express concern about air pollution and fallout; the protection of water quality and quantity in the Great Lakes; hazardous wastes and toxic substances and their effects on the Great Lakes; levels, flows and diversions; navigation; fish, wildlife and habitat; land use; energy distribution and development; and education.

In pointing out the diversity of its interests and the depth of its discussion, my intention has been to emphasize again that these groups and these resolutions are unanimous in their opposition to the diversion scheme. We ought to take note of the expertise and the depth of concern that have been developed.

Earlier this year, Great Lakes United and the Nishnawbe-Aski nation came to this building and held a press conference asking the province to join in their opposition to the GRAND Canal water diversion scheme and to express concern about the fact that our federal government was giving grants through the National Research Council to enable people to study the feasibility of this scheme.

The fact that such grants are available and have been awarded indicates the creeping nature of decisions such as this. They are promoted, but everyone feels: "That is too farfetched. It will never happen." Gradually, bit by bit, segmented approvals are given until we suddenly find ourselves faced, perhaps unknowingly, with a scheme that has been partially committed. That is why it is so important that today we register very strongly our opposition to this scheme.

My colleague the member for Sault Ste. Marie has talked about the fact that nuclear power plants are going to be required to make this scheme a reality. I would like the members to reflect on the folly of building major nuclear power plants to pump water in a direction that water does not naturally flow. I would ask that they also reflect on the consequences to us all of that expansion of nuclear power.

As the member for St. George (Ms. Fish) has said, the solution is not the diversion south of Great Lakes water; the solution is a very concentrated effort on the part of all governments surrounding the Great Lakes to clean up the waters that flow there and to clean up the effects of contamination and toxic waste that for too long have been allowed to go unchecked. Only when that happens can we be sure that schemes such as the GRAND Canal water diversion are only that: schemes that are never going to come to reality. A good first step will be taken when we support this resolution later today, and I look forward to that vote.

Mr. South: I rise to support the member for Saint Ste. Marie. As I have mentioned before in this House, the battle for the waterhole has engaged man since the dawn of history. All that has changed are the locale and the actors. With limited water, there is limited life; with no water, there is no life. The amount of water on our planet does not change; all that changes is the place, whether it is in the oceans, evaporating, becoming rainfall or falling on the earth and becoming fresh surface water or ground water.

We in this country are blessed with a great fresh-water resource. We must use it well. In the past 20 years we have witnessed some very emotional battles, both international and national. We have seen the battle on our own Pacific coast between us and the Americans over the development of hydro rights on the Columbia River. Internationally, in the Middle East we have witnessed the battle for the control of the Jordan River and we are constantly seeing the continuing battle in the US Southwest among five states and Mexico competing for the Colorado River.

Today we have the technology to move vast amounts of water great distances, by pumping it, by blasting out the land divide between existing watersheds or by any one of a number of other new technologies.

Populations today are very mobile. Many people have decided to migrate, either temporarily or permanently, to the warmer climates of the southern US. Most crops grow more easily in these warmer climates. Of late years, there has been a movement of industry to the less developed southern US. This has been encouraged by lower labour rates, taxes and property costs.

However, the movers and the planners have forgotten one essential part of the equation: the adequacy of water. There is not sufficient water for the agriculture, the industry and the people in the southern US now. They are out of water. Ask the government of Mexico. Ask the farmers of California's Imperial Valley; there they are mining water. In some areas, the water table is dropping at a rate of 10 feet per year. It is like a bank account where one is withdrawing more than is going in. The banker will call and some day someone will have to pay the tune.

Our neighbours to the south are getting drier and drier. The question becomes whether we move the water to the people, where large numbers of people want to go, or whether we move the people to the water. The fresh water we have is fast becoming our most valuable resource. It is our heritage, and we as Ontarians and Canadians are temporary stewards. We must be thoughtful and vigilant, and we have to be apprehensive about the present Ottawa representatives at the international water poker table.

Do we send our water to Texas, Arizona and California so the American farmers can sell us more vegetables and the American car manufacturers of California can sell us more autos? No. I say to our American neighbours to the south: "Send us your grocery list. Send us your car needs. We will use our water to meet your needs. It is your choice whether you want to sit in the sun under a palm tree with a Coca-Cola to slake your thirst or whether you want to sit beside one of our Great Lakes under a maple tree with Adam's ale. Our water is our heritage, our birthright, and it is not for sale."

11:50 a.m.

Mr. Taylor: I have some difficulty in subscribing to the resolution by my friend the member for Sault Ste. Marie. I come close to embracing the proposition, but only in part.

If one reads the resolution, he is using water as a poker chip, as my friend the member for Frontenac-Addington (Mr. South) has said, in bargaining the issue of free trade. That is one issue. In so far as the resolution condemns putting on the table the sale of Canadian water resources as a stimulus to encouraging free trade with the United States, I disagree with that approach and I agree with that part of the resolution.

However, the resolution goes on to say "that Ontario will not consent to any major diversion of its fresh water, now or in the future." In my view, that is a different issue altogether. It is unrelated to the free trade issue as we know it today, let us face it.

Mr. Morin-Strom: It gets to the heart of the matter.

Mr. Taylor: I hear the carping from the member for Sault Ste. Marie. He is concerned about free trade, as his party is concerned about free trade. They are absolutely opposed to the concept of free trade and very adamant in that. They follow the party line and the line of the unions that support that party. That is a separate agenda with a special interest in it.

The wording of the resolution is an attack on Canada's chief negotiator, Simon Reisman, in ascribing to him motives that are not there. It is an attempt to undermine his integrity. The statement by Simon Reisman was made prior to his appointment as chief negotiator for Canada. He has said since that those views are not relevant to his role as chief trade negotiator. Again, it is a red herring in a way; the member is undermining Canada's chief negotiator because of his views in regard to another project altogether.

If the member is concerned about free trade, perhaps he should remind himself of the problems in Sault Ste. Marie today. We had an emergency debate that has propelled the standing committee on resources development into motion. Next week, it will visit Sault Ste. Marie and Wawa to look at the impact of US protectionism and the downfall in the steel market. Only yesterday we heard from an expert in this area that free trade would resolve the problems in the Sault and Wawa area and that US protectionism would be a calamity. Perhaps the member had better rethink his posture in terms of the free trade issue rather than bring in red herrings.

As I mentioned, this whole business of the GRAND Canal system is a separate item altogether. The GRAND Canal system is what we have heard debated today. I think before condemning that system, there should be further investigation of that system. I do not think we should conclude summarily as to the merits of that project. It is altogether different from the issue of trade and using our water resources as a bargaining chip in regard to the issue of free trade.

Therefore, while I subscribe to the proposition that we not use it as a bargaining chip and that part of the resolution, I cannot subscribe to the part of the resolution that states that Ontario should never sell any of its water, that Ontario will not consent to any major diversion of its fresh water, now or in the future. That, of course, could be a diversion within Ontario for Ontarians; it could be a diversion within Ontario for Canadians. It does not necessarily mean the export of fresh water to the US. That is a different proposition altogether.

The proposed GRAND Canal, as the member for Sault Ste. Marie mentioned, is a very large scheme, five times the size of the Apollo moon landing project, which has been mentioned. The current price tag is something like $100 million. The project would employ approximately 300,000 workers, 150,000 directly and 150,000 indirectly, with a time frame for completion of 10 years.

I do not think the House is in a position after an hour's debate to come to a conclusion about the merits of that project, which is altogether different from the proposition of free trade. What the member for Sault Ste. Marie is doing is trying to put another string to his bow in undermining the whole concept of free trade and the proposition that it would be beneficial to Ontario to have free trade.

Interjection.

Mr. Taylor: I am sorry. I did not hear that.

Mr. Speaker: Interjections are out of order.

Mr. Taylor: Thank you, Mr. Speaker. I am looking at the clock. I am rushed by it and I am afraid my time is now up. Thank you for this opportunity.

Mr. Speaker: The member for Sault Ste. Marie has reserved approximately three minutes.

Mr. Morin-Strom: I am pleased to hear that we appear to have nearly unanimous support for this resolution in the House. I was pleased to hear the comments of the member for Kitchener (Mr. D. R. Cooke) and the member for Frontenac-Addington representing the government party. I was particularly pleased to hear the details and extensive support outlined by the member for St. George for the official opposition party.

Unfortunately, I am not quite as happy with the remarks made by the member for Prince Edward-Lennox (Mr. Taylor). The issue here is not fundamentally an issue of free trade. The fundamental issue here is the issue of the environment, the protection of our natural heritage; the protection of our northern way of life; the protection of the ability of all of us to enjoy the wilderness, the recreation opportunities in the north; and the protection of lifestyle of our native people.

It is also to ensure not only that this potential project that has been brought up, the GRAND Canal project, is not discussed in a serious manner in the current trade negotiations, but also, as the member for Prince Edward-Lennox points out, that Ontario not consent to any major diversion of its fresh water, now or in the future. This is not limited strictly to the GRAND Canal project; it establishes a principle, which I think all of us should support, in regard to the utter devastation that a major diversion could create for the province and for our way of life here in Ontario.

By passing this resolution, the Ontario Legislature would be condemning any attempt by the federal government to link free trade with the diversion of Ontario's water resources in the current context, which is where the pressing concern is today. We will ensure that Ontario's fresh water is off the table in the current negotiations, and that is simply what this is trying to do in the current context. As Ontario legislators, we cannot countenance the views of Simon Reisman, who has publicly stated that Canadian water could be part of a trade agreement with the US.

Previous comments by members of the other two parties in the Ontario Legislature have indicated that they share the abhorrence of my party towards the idea that Ontario water resources should be an item for negotiation with the US. The provincial government has the constitutional jurisdiction to manage and protect Ontario's fresh-water resources. By supporting this resolution we will be enshrining the principle that Ontario will not consent to any major diversion of its fresh water, now or in the future.

12:06 p.m.

TAX-FREE GASOLINE

The House divided on Mr. Villeneuve's motion of resolution 33, which was agreed to on the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Bernier, Breaugh, Charlton, Davis, Eves, Ferraro, Fish, Foulds, Gigantes, Gillies, Gregory, Grier, Guindon, Harris, Hayes, Henderson, Hennessy, Mackenzie, McCague, McClellan, McKessock, McLean, McNeil, Miller, G. L, Morin, Morin-Strom, O'Connor, Partington, Philip, Pierce, Poirier, Pollock, Ramsay, Reville, Reycraft, Rowe, Runciman, Smith, D. W., South, Sterling, Stevenson, K. R., Taylor, Treleaven, Villeneuve, Warner, Wildman.

Nays

Callahan, Conway, Cooke, D. R., Cordiano, Epp, Hart, Newman, Nixon, Polsinelli, Smith, E. J.

Ayes 50; nays 10.

WATER DIVERSION

The House divided on Mr. Morin-Strom's motion of resolution 32, which was agreed to on the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Bernier, Breaugh, Callahan, Charlton, Conway, Cooke, D. R., Cordiano, Davis, Epp, Eves, Ferraro, Fish, Foulds, Gigantes, Gillies, Grier, Harris, Hart, Hayes, Henderson, Hennessy, Laughren, Mackenzie, McCague, McClellan, McKessock, McLean, McNeil, Miller, G. L, Morin, Morin-Strom, Newman, Nixon, O'Connor, Partington, Philip, Poirier, Pollock, Polsinelli, Ramsay, Reville, Reycraft, Rowe, Runciman, Smith, D. W., Smith, E. J., South, Sterling, Stevenson, K. R., Warner, Wildman.

Nays

Dean, Gregory, Pierce, Taylor, Treleaven, Villeneuve.

Ayes 55; nays 6.

The House recessed at 12:19 p.m.

AFTERNOON SITTING

The House resumed at 2 p.m.

MEMBERS' STATEMENTS

HOSPITAL FUNDING

Mr. Brandt: Yesterday, in response to a question from the Leader of the Opposition (Mr. Grossman), the Premier (Mr. Peterson) indicated that the $850-million commitment to capital investment for hospitals over the next five years would allow hospitals to engage in long-term planning. He also indicated that this amount was an increase in funding, although I have some difficulty with the arithmetic being used by the government.

If last year's capital program totalled $170 million in capital spending for hospitals and was deemed to be inadequate by the current government, I fail to see how $850 million over five years, or perhaps over as many as eight years -- surprisingly enough, it is exactly $170 million a year if taken over five years-can be deemed adequate. That may not be new math, but it is accurate. There has been no increase in funding on the basis of the figures we have seen to date.

Be that as it may, chronic bed shortages in my area of Sarnia are reaching crisis proportions. A commitment from the government is needed to complete the years of planning that have already taken place. St. Joseph's Hospital has already raised close to $4 million. The local community has done its part. The present government now has an obligation to fulfil its commitment, which means nothing short of an approval to proceed, coupled with the necessary funds if, to use the Premier's words, it is to get on with its long-term planning.

PENSION FUNDS

Mr. Mackenzie: The government of Ontario has sat back over the last year and watched a massive raid on the pension funds of workers in this province. More than $187 million of so-called surplus earnings in private plans has been pocketed by a variety of different corporations in the last year alone. Right now, Rexnord Canada Ltd. in North York and Port Hope is applying for more than $4 million of earnings in the workers' pension funds, at a time when it is in the process of rationalizing the operation, shutting down a plant and eliminating the jobs of long-service employees.

Most private pension plans lack indexing, most of them are inadequate to begin with, and any surplus earnings should go back to the workers. The principle that pensions, however negotiated or funded, are deferred wages is something that has been almost universally accepted in this country for a number of years. This government appears to be backing off from that principle and is reversing the principle of pension contributions as deferred wages.

If this government has decided this is the case, it owes an explanation to the public of Ontario and to workers over the ownership of workers' pension plans.

SOVIET JEWS

Mr. Offer: I am pleased to inform the House that a group of students is travelling across Canada on behalf of Soviet Jewry. Today, they are in Toronto and will be conducting a rally this evening at Queen's Park to express outrage at the deprivation of human rights experienced by Soviet Jews. They will be travelling across this country to Expo 86 in Vancouver, taking the issue of Soviet Jewry to the people of this country.

It is gratifying to see so many of our youth in this issue taking up the cause of the right of freedom of expression, freedom of worship and freedom of speech. In this province and in this country, we are grateful to be able to express ourselves freely at all levels of involvement. It is incumbent upon all of us to take note that this freedom is not given to all in this world. These students and others, by their actions, serve to remind us that the sweet fragrance of freedom is one which cannot be shared by all. Their commitment, determination and sacrifice give many thousands of people the hope that one day they too will be able to live as we do. I am confident of the future when I see the energy of our youth fighting for something so dear to all of us.

NIAGARA POWERMATIC CARWASH

Mr. Partington: Following a letter I sent to the Minister of Consumer and Commercial Relations (Mr. Kwinter) late last month, he will be aware of problems at the Niagara Powermatic Carwash where, on October 25, 1985, contractors for the Liquor Control Board of Ontario began excavating for an outlet at 179 St. Paul Street West in St. Catharines. The removal of soil along the west foundation and under the footings of the car wash, which is next door, caused complete collapse of a large portion of the west wall and serious damage to those portions left standing. As a result, the car wash is now inoperable. An architect's report indicates the building cannot be salvaged. It will have to be taken down and completely rebuilt.

The innocent victims in all this are Peter and Don Kobryn, the owners. The LCBO has turned the matter over to its insurer and there the matter sits. However, while a settlement is awaited, while court proceedings unfold, the Kobryns face bankruptcy. They have had to lay off all their employees; they have lost their source of income; they have been burdened with legal and engineering costs; and they have been making mortgage payments on an inoperable car wash.

Also, the people of west St. Catharines deserve an immediate resolution of this matter so they may have their long-awaited LCBO outlet.

I ask the minister to take whatever action is necessary to expedite a conclusion to this matter. I also ask that he make interim financial assistance available, perhaps in the form of an interest-free loan, until settlement is reached. In that way, he will protect the innocent owners of the car wash, save the jobs of the Kobryns' employees and show sensitivity in his handling of the affair.

SAFETY ASSOCIATIONS

Mr. Philip: This morning in the standing committee on public accounts, I introduced a motion for an inquiry into expenditures by nine safety associations in Ontario. The motion will be debated and voted on next Thursday.

The expenditure of these associations has skyrocketed from $9.9 million in 1975 to $31.4 million in 1985. One must ask whether value for money is being received, since work-place injuries have increased by 25 per cent in the last two years alone.

Among the issues we will be looking at are the following: In 1984, the Industrial Accident Prevention Association moved into new headquarters at approximately twice the cost of some that could have been obtained down the street. Last year, close to $1 million was spent by IAPA staff on travel alone. IAPA has spent money on such extravagant items as oil portraits of its general managers.

These are but a few of the fiscal concerns we will be looking at. One must ask if these extravagances are in the best interests of employees, of companies burdened by Workers' Compensation Board premiums or the public.

MIDDLESEX-LONDON DISTRICT HEALTH UNIT

Mr. Reycraft: I want to draw to the attention of the Legislature a very happy event that will take place in the city of London tomorrow afternoon. It will occur at the site of the very historic forks of the Thames, a site that was once proposed by the then governor, John Graves Simcoe, to be the capital of Ontario. Had that proposal been followed, it would be the site of this chamber and the building in which it is now contained.

While the site is important, its importance is secondary. For many years, the Middlesex-London District Health Unit has been labouring diligently to provide quality health care services to the people of London and Middlesex county. The unit has laboured under the handicap of having its accommodations dispersed in three or four different locations around the city. The board of health has been attempting with some diligence to try to achieve a consolidation of the facilities.

As a result of their work, a lease agreement with the council of the county of Middlesex has been achieved to construct a new facility for them. The new accommodation, which is as attractive as it is functional, is to be opened tomorrow afternoon. I want to congratulate the councils of the county of Middlesex and the city of London, as well as the board of health, on the official opening of their new accommodation tomorrow afternoon.

STABILIZATION PAYMENTS

Mr. Stevenson: This morning at 10 o'clock, John Wise, the federal Minister of Agriculture, announced an interim stabilization payment for corn and soybeans. This payment is $5 per ton for corn and $9 for soybeans. It is approximately 50 per cent of the expected final payment, which will be calculated at the end of this crop year ending on October 31, 1986.

The payment for the same period on the provincial stabilization program is expected to be $7 a ton. If our payments were calculated on Ontario prices only and not on a pooled price of Ontario and Quebec, that $7-payment would rise to an expected $8.50. We firmly believe the Minister of Agriculture and Food (Mr. Riddell) should announce today that he will also come forward with a $5-per-ton interim payment to the cash-starved Ontario farmers.

2:12 p.m.

STATEMENTS BY THE MINISTRY AND RESPONSES

CORPS D'ÉLITE

Hon. Mr. Eakins: We are honoured today by the presence in the west gallery of the first four recreation volunteers to become members of Corps d'élite Ontario. Earlier this afternoon I had the pleasure, along with His Honour the Lieutenant Governor, to present awards to Albert Bourdeau of Embrun, Joseph Craig of Scarborough, Mrs. Frances McHale of London and Frederick Whiskin of Burlington.

Corps d'élite Ontario is a new program created by my ministry to honour individuals who have made a significant impact on the development of recreation in this province. It is in keeping with our government's commitment to honour those who care about their communities.

Joseph Craig and Frederick Whiskin have made notable contributions to recreation through their involvement with the Boy Scouts of Canada. Mrs. Frances McHale developed day and wilderness camps for youths as well as recreation programs for older adults. Albert Bourdeau assisted in the development of regional and provincial recreation programs and services, including the development of a francophone recreation association.

These four members of the Corps d'élite Ontario are the first of many. In future presentation ceremonies up to 35 awards will be conferred annually at the provincial level.

The Corps d'élite Ontario program also recognizes volunteers on a regional level, and this part of the program is just getting under way. During the next few months, outstanding volunteers will receive recognition in each of my ministry's five regions. Up to 15 people will be honoured annually in each of the regions.

The first four members of the provincial Corps d'élite were selected by a special committee of seven parks and recreation leaders from across the province.

The role of the recreation volunteer has long deserved greater recognition. It is estimated that volunteers contribute more than 20 million hours a year to recreational organizations, events and activities in this province. By honouring these four individuals, we are also honouring the thousands of other volunteers, coaches, leaders, managers, co-ordinators and committee members who give generously of their time and talents to recreation. Without them, the quality of community life in Ontario would not be as we know it.

I ask all honourable members to join me in congratulating these four outstanding individuals.

[Later]

GREETING OF VISITORS

Mr. Grossman: Mr. Speaker, on a point of order and privilege: I notice that the Corps d'élite members who were introduced by the Minister of Tourism and Recreation (Mr. Eakins) a moment ago, just as happened yesterday, have now been escorted out of the House prior to an opportunity being granted to the opposition parties to join the government in welcoming them to the House.

Yesterday, the government House leader apologized and promised it would not happen again. Now for the second time, perhaps pursuant to the strategy of the Minister of Citizenship and Culture (Ms. Munro), which was outlined in that offensive document, the government continues to do something which we on this side of the House find totally offensive.

These are not partisan events. If the government wishes to have partisan events, it can have them outside of this House. When they introduce visitors to the House, opposition parties should have an equal opportunity, in accordance with the courtesy established here many years ago and only violated since this government came into office, to join the government in expressing the greetings of all members of political parties in this House. We are offended.

Mr. McClellan: It is a matter of very basic and elementary courtesy to the opposition parties that the practice which happened yesterday and again today be discontinued.

I have one suggestion. After the discussions we had and the apologies which were rendered, I believed we had solved the problem, but obviously we have not. May I suggest to the government House leader, first, that statements welcoming distinguished visitors and guests be put at the bottom of the list of ministerial statements and, second, that ministry staff be instructed not to escort distinguished visitors and guests out of the galleries until the other two parties have had an opportunity to extend non-partisan greetings to them.

I hope this does not happen again.

Hon. Mr. Nixon: I believe the difficulties that have been brought to the attention of the House on two successive days are essentially a result of the new rules rather than a result of any intention on the part of the ministers concerned.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Nixon: Under the previous rules, a tradition had grown that right after prayers members on all sides would introduce visitors of note. Quite often it was accepted that other parties would respond in the usual way.

It was also a very healthy custom that the member on any side who was introducing an individual or group of note would make sure other parties knew about it so that all could take part in what is essentially, and must continue to be, a non-political and useful exercise.

With the acceptance of the new rules, it was understood that these informal interruptions, if I may call them that, in the general order of business would come to an end. For the first 10 minutes, private members would have an opportunity to introduce visiting dignitaries of whatever level, including hockey teams and so on. This was generally accepted, and by mutual agreement the ministers were excluded from participating during that time period.

The suggestion that any ministerial statement be at the end of statements so that the next section would be the response from opposition parties is an excellent one. We have not had a chance to instruct ourselves as a cabinet since the occasion yesterday, but the ministers are here and they are aware of the dislocation -- and to some extent the embarrassment -- the new rules can cause. We are all aware of this.

I assure the members that this is not in any way an overt obstruction of the opposition. To the contrary, I assure the members on behalf of my colleagues that we do not want this to happen. I should also say that the members of the Corps d'élite group who left went of their own accord; they were not escorted out. I am sure they would very much miss the opportunity to hear the comments of opposition members.

I think we will straighten this out. I would ask that you, Mr. Speaker, and the honourable members accept my assurances that we feel we are responding to the rules, but we can do better and we intend to do so.

Mr. Speaker: I have listened carefully. The Leader of the Opposition (Mr. Grossman) rose on a point of order or a point of privilege. Again, I have to say it is not really either of those points, but rather, it is a point of objection. I think it has been taken into consideration.

[Later]

CORPS D'ÉLITE

Mr. Rowe: I take this opportunity to join the Minister of Tourism and Recreation (Mr. Eakins) in congratulating the first four recreation volunteers in the Corps d'élite program. Our party realizes the important role of individuals who make a significant impact on the development of recreation in this province, and we salute the four citizens who have the honour of becoming the first four recreation volunteers in the Corps d'élite program. We say to them: "Well done. Your communities and your province appreciate your commitment."

Mr. Hayes: On behalf of my colleagues in the New Democratic Party, I also want to join the Minister of Tourism and Recreation in congratulating the four members of the provincial Corps d'élite. We feel recreation is a very important fibre in our way of living, and it is a good way to develop young people in our society. It is also another very good way of keeping our seniors active. Without people like the four members of the Corps d'élite, many of our recreational activities for the young and the old would never be possible. Once again, I congratulate and thank them very much for what they are doing for this province and this country.

YOUTH EMPLOYMENT

Hon. Mr. Sorbara: Earlier today I took part in the kick-off of a private sector campaign to create summer jobs for students in Metropolitan Toronto and York region. The campaign is one of three in this province where the private sector is assuming a leadership role and stimulating more opportunities for summer employment for more young people.

These initiatives are taking place in Metro as well as in the national capital region, including Ottawa, Hull, Gatineau and Aylmer, and a July campaign in North Bay. Each is unique and addresses the particular needs of the local community.

Je suis ravi que mon ministère participe à cette campagne en collaboration avec le gouvernement fédéral, le gouvernement du Québec pour la région de la Capitale nationale, les administrations locales et dans une large mesure, le secteur privé.

It is my pleasure today to salute the leaders of these local initiatives. They are: Don Cruickshank, vice-president of corporate communications at Bell Canada, who is providing leadership for Youth Action/Jeunesse Action `86, which is the Ottawa campaign; Dennis Mills, the vice-president of corporate affairs for Magna International, who is the leader of Youth Network, the Metro campaign; and Mayor Stan Lawlor, chairman of the North Bay and District Youth Trust, who is the leader of the two-day job blitz to take place in that lovely city on July 7 and 8. These initiatives complement the summer jobs programs of my ministry, which I announced in this Legislature four months ago. The sum of $43.8 million was allocated for Experience `86, the Ontario youth employment program and Start-Up, the last of which provides interest-free loans to eligible students. The deadline for Experience `86 has passed and the deadlines for Summer Start-Up and the Ontario youth employment program will both occur in the next month, just as these private sector initiatives go into high gear.

In each of these private sector campaigns, the target is additional summer jobs, beyond the number normally achieved through regular hiring and government programs. In Ottawa, the target of Youth Action `86 is 2,000 additional jobs. In Toronto and York, the target is 10,000 jobs. Last year in North Bay, a one-day job blitz generated close to 250 jobs for summer students.

My ministry, through the office of the Ontario youth commissioner, Ken Dryden, has provided some of the inspiration for the campaigns. In addition to ongoing advisory support, we have also loaned staff and made a financial contribution to the national capital and to the Toronto-York campaigns, which has been matched by the federal and local governments. It is worth noting that the combined support from all levels of government amounts to slightly more than one quarter of the total costs of these campaigns. It is largely the private sector, through financial contributions and donated services, which is accepting this significant responsibility.

These initiatives will draw out additional summer jobs, and summer jobs for young people who otherwise probably would not have them, from the private sector that may not be there in the absence of volunteer effort.

La création d'emplois d'été, afin de permettre à nos jeunes d'acquérir de l'expérience et une certaine formation professionnelle, est un noble objectif que nous nous efforçons d'atteindre par la collaboration.

Once again, I want to take this opportunity to congratulate and thank all of those who are working with government to increase summer job opportunities for our young people.

Mr. Gillies: In response to the statement by the Minister of Skills Development, I join with him in saluting the efforts of the three private sector individuals who are doing what they can to create summer jobs for young people in this province this summer.

We certainly hope, as the minister does, that some thousands of new jobs for young people will result. This is necessary, faced with the lack of increased commitment by this government to the young people of this province. The minister, as if with pride, repeated that the government of Ontario will be spending $43.8 million on youth employment this summer. This is exactly the same amount as last summer without even an inflationary increase.

As recently as yesterday, the Treasurer (Mr. Nixon) repeated that the entire youth envelope of the government this year will be $175 million, exactly the same as last year. The $25 million in additional funding promised by the Treasurer in his last budget is missing. All of this points to the fact that if additional young people are going to get jobs in a very tough summer, they will indeed have to get them through the private sector, because they are not going to get them through the government of the Premier (Mr. Peterson).

We wish them well. The students need these jobs, so that they can return to their studies next year. They need every effort and advantage we can offer them. I suggest to the minister that, rather than statements and press releases, what we need from the current government is real commitment.

Mr. Warner: In response to the statement of the Minister of Skills Development we are supposed to be grateful for small crumbs, but I want to remind him of some very simple arithmetic. Many university students will obtain minimum wage jobs this summer that will net them approximately $2,400. The cost of attending university in town is approximately $6,000 and out of town it is approximately $10,000. What he is doing is guaranteeing that young people will mortgage their futures.

He has to do one of two things. He has either to create a more buoyant economy or to find a way to lessen the cost of university for young people or they will continue to mortgage their futures. He has addressed neither of those two potentials. It is a very disappointing response to an urgent need in our community.

Mr. Martel: Right on.

Mr. Speaker: Order.

PROVINCE OF ONTARIO SAVINGS OFFICE

Hon. Mr. Nixon: As Minister of Revenue, on January 13 I introduced a new daily interest savings account in the Province of Ontario Savings Office. I would like to bring the members up to date on the progress of this account.

As of today, POSO clients have opened more than 21,000 Trillium accounts with deposits totalling $400 million. While in large part this is the result of existing customers taking advantage of the benefits of our daily interest account, what is significant is that our deposits since January 13 have increased by $87 million. This is particularly encouraging because it means former customers are returning to POSO and existing customers are transferring deposits from other institutions.

We are gratified by the return of many valued customers. The slow decline in POSO accounts has been dramatically reversed. Indeed, we fully expect to regain the $100 million that customers transferred out of the Province of Ontario Savings Office in the past year or so in order to gain daily interest. We anticipate additional increases in deposits.

Since we introduced the Trillium account, the interest rates have increased eight times, reflecting our determination and ability to compete in the changing financial marketplace. Trillium accounts with daily balances of $5,000 and over now earn eight per cent, while daily balances under $5,000 earn 6.5 per cent.

Several of the members have told me they have followed my advice and opened a Trillium account. I advise the other members to follow our lead, exercise their financial acumen and go over to the Queen's Park branch in the Macdonald Block and say, "Bob sent me."

Mr. Philip: While I welcome the statement by the Minister of Revenue (Mr. Nixon), which indicates that deposits in the Province of Ontario Savings Office have risen to $400 million, this is very small and pale indeed compared to the $4.2 billion now on deposit in the Alberta Treasury Branches. The difference between Alberta and Ontario is that the Alberta Treasury Branches have the opportunity to compete with the banks and to make loans. That was envisioned by the father of the current Treasurer (Mr. Nixon) and his government when they established the Province of Ontario Savings Office. It is too bad the Conservatives diluted the powers of those savings offices in 1923.

Once again I call on the Treasurer to adopt my private member's bill to allow the Province of Ontario Savings Office to be competitive. If not for my sake, then at least in his father's sake, I say to him to restore the Ontario savings offices to their original intention.

2:31 p.m.

ORAL QUESTIONS

HOSPITAL FUNDING

Mr. Grossman: I have a question for the Minister of Health. We asked this question of the Premier (Mr. Peterson), but he did not quite seem to understand what the budget announcement was. I am sure this minister does.

With regard to the announcement of $850 million for hospital capital over five or eight years, it appears that the current commitments or undertakings for hospital capital would have the government spend approximately $170 million per year during the next few years. If this is all additional money, can we presume that this coming year there will be not $170 million but $340 million spent on hospital capital?

Hon. Mr. Elston: The honourable gentleman will realize that what this announcement quite clearly indicated was that there was $850 million in new money for the planning stage. We will be making announcements in the upcoming days and months that will indicate the addition of upwards of 4,000 new beds in our system, and he will understand that it will be new money, not having to do with past commitments.

Mr. Grossman: If it is new money, I remind the minister that the budget plan -- that is this document -- this week reported $168 million capital for this coming year, which is the flat-lined number; so we can presume that none of this new money is going to be spent in this coming year, according to the budget.

As further proof of that, can the minister tell us whether, in the moneys already committed by the ministry and therefore not included in his new announcement, are the North Bay Civic Hospital, St. Mary's General Hospital in Timmins, Sensenbrenner Hospital in Kapuskasing, North Albany Hospital and Espanola General Hospital?

Hon. Mr. Elston: Those projects are already on go; they have been budgeted for. The honourable gentleman knows full well, having contacted our ministry through his research department, that those are projects that have been and are budgeted for under the old capital program. They are in addition to the $850-million phase I program that was announced by the Treasurer (Mr. Nixon).

Mr. Grossman: The position of the Minister of Health is that his government, when it announced the technology fund, did not just announce the $50 million a year of new money but took the old money and added the new money to announce $100 million a year, or $1 billion.

The minister is taking the position that his government has underestimated its spending, that it did not include all of these previous commitments for northern Ontario when announcing what its capital program is going to be for northern Ontario in the next five or eight years.

If that is his position -- which I would be highly suspicious of, given the way he has been putting out news releases -- is the $850 million the government's share, or is that the total cost of all the projects, including the one-third contribution by the public?

Hon. Mr. Elston: The commitment to northern Ontario will go up in the phase I program; it will be four projects there. I do not want the Leader of the Opposition to leave the impression that there are no new initiatives set for northern Ontario, because there are. The $850 million, about which the Treasurer announced the commitment of this government in terms of real dollars for the building of new hospital beds throughout Ontario, is the government's money for the start-up of that phase I program in the next five years.

UNEMPLOYMENT

Mr. Pope: My question is for the Minister of Industry, Trade and Technology, the minister who has responsibility for the development of industrial strategy and industrial expansion in the province, and the minister who has been put in office and continues to be supported in office by the New Democratic Party member for Sault Ste. Marie (Mr. Morin-Strom).

In the speech from the throne and in the budget, what is available for the 1,900 steelworkers at Algoma Steel in Sault Ste. Marie? How are the budget and the speech from the throne going to help them today?

Hon. Mr. O'Neil: Several initiatives were announced by the Treasurer which will aid the people of the north. We are working very hard, the ministers, deputy ministers and all of our staff, to see what we can put in place to assist the people in the north.

Mr. Martel: Take a hike. There is nothing in it and the minister knows it.

Mr. Pope: I have to agree with the New Democratic Party member for Sudbury East (Mr. Martel), there is nothing that will help the steelworkers of Algoma Steel and Sault Ste. Marie.

My supplementary is to the Minister of Industry, Trade and Technology, who was put in office and who is still supported in office by the New Democratic Party member for Algoma (Mr. Wildman). Can he tell me how the budget and the speech from the throne are going to help the iron ore miners in Wawa who are facing layoffs right now? How will they be helped today by the budget and the speech from the throne?

Hon. Mr. O'Neil: As I mentioned before, there were several initiatives which will definitely help the north, and we are looking and working at other initiatives.

Mr. Wildman: On a point of personal privilege, Mr. Speaker --

Mr. Speaker: I will listen very briefly for a point of privilege.

Mr. Wildman: I will be brief. I want to thank the member for Cochrane South (Mr. Pope) for saying I have the power to put this government in power all by myself. I do not think it is --

Mr. Speaker: Order. That is not a point of privilege.

Mr. Pope: I reiterate, I support the position of the New Democratic Party member for Sudbury East. There is nothing in the speech from the throne or the budget to help the workers of northern Ontario.

My final supplementary is to the Minister of Industry, Trade and Technology, in all his provincial responsibilities, put in office and supported in office by the New Democratic Party member for Lake Nipigon (Mr. Pouliot). What in the budget and in the speech from the throne will help the workers at Kimberly-Clark and Terrace Bay who are facing the prospect of immediate layoffs? Can he name one thing?

Hon. Mr. O'Neil: From our own section of the budget, I could mention that one thing we will be hearing quite a bit about is the new ventures program, which will help create a lot of jobs. A lot of jobs are created by small business in this province, and that is one section of the budget that will add a lot of jobs in the north.

2:40 p.m.

EXTRA BILLING

Mr. McClellan: I have a question for the Minister of Health with respect to his continuing failure to move forward Bill 94, the act to ban extra billing. Dr. Moran is quoted in this morning's Globe and Mail as saying: "We will never accept a negotiated settlement that incorporates a total ban. That is not going to change."

Given that statement, after 10 meetings, can the minister tell us why he continues to perpetrate the charade that the talks are meaningful and fruitful? Will he not now agree to accept the advice of the New Democratic Party to move the bill out of the standing committee on social development and into committee of the whole House, where it can be debated and passed quickly?

Hon. Mr. Elston: First and foremost, the negotiations which this government has entered into with the Ontario Medical Association are not and have never been a charade. We are discussing items seriously. We have indicated consistently that no person in this province will be asked to pay more than the Ontario health insurance plan schedule. We will reimburse those people for any payments made for medical services that are insured services in this province.

For the member to indicate that a charade is being perpetrated by this government is not a statement of the facts of this matter. We are earnest in our discussions. We have been discussing and will continue to discuss earnestly a negotiated settlement, if that is possible. Bearing in mind the person quoted most recently from that article cited in today's newspaper, I can tell the gentleman that may be one person's opinion. As well, the advice from my cabinet colleagues was that if there was not substantial progress, we would look to the Legislature. I adhere to that advice very strongly and firmly.

Mr. McClellan: The minister must be contemplating something less than a total ban.

In today's paper, Dr. Railton stated as follows, "A lot of people believe strike action is necessary before the legislation reaches the House and the government's position is going to intensify that." Dr. Moran added, "It's easier to stop bad legislation than it is to change it."

Does the minister not realize that this government's policy of delay has played into the hands of the OMA, whose strategy clearly has been stated again today to organize support for a strike before the legislation has been passed? Does the minister not understand that, even at this late date? Is he not now prepared to move the bill forward before the inevitable takes place?

Hon. Mr. Elston: Today the honourable gentleman comments on the strategy of the OMA, and although I have had a series of discussions and meetings right from June 26 to today's date, I have been told on numerous occasions that it does not discuss its strategy with the NDP. Although that may be his reading of their strategy, I have received an undertaking from them that they do not develop their strategy in consultation with the third party as to how they carry on their negotiations.

We are firm in the principle of the bill we brought to the House. We will not be moved on that. We also are firm on the commitment to the medical profession to work as hard as we can to come up with a negotiated settlement. We have made the commitment that we must see substantial progress or we will move to bring that legislation into early clause-by-clause deliberation.

Mr. McClellan: The OMA does not talk to me; it talks to the press. They have stated their strategy very clearly in public and what their appeal is to the OMA membership. Does the minister not understand, even at this late date, that the OMA's leadership is telling its members the only way to stop this bill is to strike? Does the minister not understand the corollary that the only possible way to avoid a strike is to get the bill passed before the annual meeting of the OMA on June 11?

Hon. Mr. Elston: I understand the gentleman's concern with the annual meeting date. It has significance not only for the OMA but perhaps even for the NDP and other people as well. With respect to certain other legislative agendas, annual meetings perhaps are important to us all.

When this government deals with policy matters, it is not going to be driven by either annual meetings or artificial time limits that are placed on it. We want to have a thorough, honest and open discussion with respect to this legislation. This is a very important reform in the medical field in this province.

I can tell the honourable members of this House and the people of this province that we will make every effort and go the extra mile to take every opportunity to come up with a negotiated settlement if that is possible; if not, I am accepting the advice of my cabinet colleagues to move the bill forward.

SOCIAL ASSISTANCE

Mr. R. F. Johnston: My question is for the Treasurer and it concerns his questionable priorities on poverty issues. After the government had an $800-million windfall in unexpected revenues for the province, he was able to find only $41 million for two major projects; the Ontario health insurance plan premium assistance program and the shelter allowance plan.

How is it that the Treasurer feels he has moved far enough towards his goals of eliminating OHIP premiums when, as a result of the $15 million for OHIP premium assistance, people who are earning only $5 an hour will not be eligible for any premium assistance in the province?

Hon. Mr. Nixon: The honourable member neglected to mention the third program, of which I am quite proud, where the tax reduction for lower-income earners is extended. It would be wise to note that the taxable income associated with zero tax payable in the province is $2,075, which is a family income of $12,056.

I am not for a moment saying that $12,056 is a high family income -- far from it -- but I point out that the federal government, a Progressive Conservative government, charges $206 personal income tax on a family income of $12,056. It may not impress the member that I am saying we are better than the PCs, but I thought it was a significant addition to the discussion that I consider to be very important.

Those three programs have been brought forward, as the member has indicated, and they have been enriched in both budgets I have had the honour to present to the House. As I said before, I wish there were more; but in my judgement that is what we can do at this time.

Mr. R. F. Johnston: The Treasurer will remember that he did not address the matter of premium assistance in his last budget. I reminded him of that on October 29, 1985; he can check Hansard to remind himself of that. At that time, he thought he would be able to do something about it.

Why is it that the most he can do is provide $15 million, which does not come in this year but starts in January 1987? Why should those people be penalized by the lack of action by the previous Tory government since 1981, and why should they have to wait another year before they are going to be eligible for this government's premium assistance?

Hon. Mr. Nixon: I recall the honourable member discussed premium assistance after the last budget, and I responded then as I respond now, in a way which might not impress him but I am going to put it to the House anyway. We did not raise the premiums last fall, and that was the first time they were not increased in many years. As a matter of fact, the proportion of total OHIP costs covered by premiums is reducing substantially and is now down to slightly more than 15 per cent; that is in the total OHIP costs of approximately $900 million.

Once again, it is an indication of our goodwill. Perhaps we should have done more, but we felt that reducing the cash requirements this year by less than $600 million was also worth doing.

Mr. R. F. Johnston: I know the Treasurer has to wait until next January to get rid of this $670-a-year payment, but for people on minimum wage in the province at the moment, it is no real blessing, if I can put it that way. On shelter allowance, I hope the Treasurer knows the reason people go to food banks is that they have to take from their food money to pay their rent because the allowances have not kept up with inflation. Why is it that he did not eradicate the problem in the shelter allowance? For every $4 they spend on rent, they are given only $3 to pay that rent. This means that, no matter what the allowance, they have to take $1 out of every $4 of their food money.

Hon. Mr. Nixon: In working on this aspect of the budget, we consulted the Minister of Community and Social Services (Mr. Sweeney) and the officials there. We felt we had to respond to the obvious need for food and the inadequate financing for buying food for families, particularly in a number of urban centres; Toronto is probably the most important.

2:50 p.m.

We are very grateful that many charitable organizations -- churches and other organizations -- have established these food banks. Many people, myself included, are surprised and dumfounded that under our system this is needed. It is my job to provide the funds that will obviate the necessity. This way was described as the best for us to proceed in now; that is, instead of providing money for food, we assist people in heating their homes and by providing additional rent subsidies.

The honourable member says, and I am sure he is correct, that the amount provided is inadequate, but it is what we felt we could provide at this time.

UNEMPLOYMENT

Mr. Pope: My question is for the Minister of Industry, Trade and Technology, who has responsibility for industrial policy and industrial development in Ontario and who was put in office and is supported in office by the New Democratic Party members from Toronto.

Can the minister tell me what the speech from the throne and the budget will do for the 80 workers of Canada Malting in Toronto who were laid off in March 1986, the 100 workers at General Instrument in Toronto who were laid off in December 1985, the 100 workers at Rothmans in Toronto who were laid off in March 1986 and the 61 workers at the head office of Kidd Creek Mines in Toronto who were laid off in March 1986?

Hon. Mr. O'Neil: If the member were to look through the budget in complete detail, he would find that not only do we have the new $100-million-per-year budget for a technology fund but we have also increased the budget for the Ministry of Skills Development by a substantial amount.

I mentioned the ventures program, which will be coming forward from this ministry. It will provide jobs not only in the north but also in the east and throughout the rest of Ontario. There are many other things I could mention, such as the community economic transformation agreements. The member can look at the budget to see how many there are.

Mr. Pope: That reminds me of when the Minister of Municipal Affairs (Mr. Grandmaître), who is the minister responsible for francophone affairs, said, "Read between the lines." The lines were blank there, and the lines are blank here in terms of employment of laid-off workers in Ontario.

I want to ask the Minister of Industry, Trade and Technology how he thinks the budget -- and this goes on and on, layoff after layoff, in all parts of Ontario; the party that supported the government has it going on in its own communities.

Mr. Speaker: Question.

Mr. Pope: Can the minister explain how the budget and the speech from the throne are going to help the 358 laid-off workers at International Harvester in Hamilton, the 271 workers laid off at Dominion Stores in Toronto, the 200 laid-off miners at Rio Algom in Elliot Lake and the 134 laid-off workers at Weston Bakeries?

Mr. Speaker: Order. I have drawn to the attention of many members that a considerable amount of time is taken when members propose three-part, four-part, five-part or six-part questions. I think the member just did that.

Hon. Mr. O'Neil: I suppose the member would find it pretty hard to get an answer when he is here only a couple of days of the week, but I will try to give him some of our statistics.

Those statistics read that the unemployment rate is 6.8 per cent, the lowest it has been in many years. It is down by two per cent from last year, when the member's party was here. There are approximately 183,000 more people working.

Ministry of Industry, Trade and Technology figures show that export sales are up by 23 per cent as of the end of February, new plant openings are up by 48 per cent and technology centre contracts are up by 32 and 26 per cent. Those are the figures to quote.

Mr. Pope: The minister is supercilious.

Hon. Mr. O'Neil: That member is the one who is supercilious.

Interjections.

Mr. Speaker: Order. I ask all members to come to order and to stay in order.

TRITIUM EXPORTS

Mrs. Grier: I have a question for the Minister of Energy. It relates to the assurances the minister has given this House that any tritium exported by Ontario Hydro would be for peaceful purposes only.

If this glass represents the total amount of tritium available needed for peaceful purposes in the world, then the pitcher, which is eight times larger, represents the amount of tritium Ontario Hydro is likely to produce next year.

Mr. Speaker: Question.

Mrs. Grier: Can the minister tell the House how he intends to guarantee that the excess tritium will not be used for weapons research?

Hon. Mr. Kerrio: Ontario Hydro has options after it starts removing tritium from heavy water to protect the workers in our Candu reactors, which is Hydro's first responsibility. Hydro has not suggested at this time that it is going to be selling tritium. There is also the option of allowing the tritium to deteriorate. The commitment I made was that if Hydro were to consider the sale of tritium at any time, we would not allow it to be used for anything other than peaceful purposes.

Mrs. Grier: The point is how. Does the minister not realize that there are no safeguards to prevent the displacement of existing tritium by new tritium and the allowance of the use of that existing tritium for weapons research and that Hydro is negotiating for contracts with laboratories that do fusion and weapons research? Does he not agree that the only solution is a ban on the export of tritium?

Hon. Mr. Kerrio: I have suggested there will be no way that tritium used for peaceful purposes could be displaced for any other reason. I cannot give any more assurance than that. I renew my assurance to the honourable member that I will undertake that it will not be used for any other purpose.

In the first instance, Ontario Hydro is removing the tritium to safeguard our workers, which is the main purpose. There is a good possibility it could be left to deteriorate. No action has been taken in that sense. But I give the unequivocal undertaking that no tritium will be used to displace tritium in the United States or anywhere else for anything other than peaceful purposes.

POST-SECONDARY EDUCATION

Mr. McFadden: I have a question for the Minister of Colleges and Universities. Is the minister satisfied with the level of funding allocated to colleges and universities in Tuesday's budget?

Hon. Mr. Sorbara: If the question is whether I am satisfied that the universities and colleges of this province now have sufficient revenues after 10 years of underfunding, the answer is no. If it is whether I am satisfied with the provisions in the budget, the answer is yes.

The budget provided a commitment to a long-term faculty renewal program: 500 new faculty members in our universities. In addition to the excellence funds that have already been provided, it committed revenue to the tune of $15 million for research. The answer is yes.

Mr. McFadden: I find that response interesting, since the universities, faculties and the Ontario Federation of Students have expressed their strong dismay at the government's failure to provide an adequate increase in operating grants to the universities.

In recent months the minister has visited university after university, stating very eloquently at times that the universities were going to have a priority under the current government. Have colleges and universities now lost that priority, or did the priority exist only in the minister's mind?

Hon. Mr. Sorbara: I thank my friend the member for Eglinton for suggesting that now and again on a university campus I have been rather eloquent in my support of university education in this province. Whether or not I have been eloquent, post-secondary education is a very high priority for this government, as exemplified by the increases in support we have provided for these institutions since coming to office.

Mr. Gillies: That is four per cent. Not even inflation.

Hon. Mr. Sorbara: The member refers to four per cent; the Treasurer (Mr. Nixon) announced in his budget of October 24, 1985, that the increment for operating grants for this fiscal year would be four per cent.

In my discussions with university officials, with the Ontario Federation of Students and with many others -- I know, Mr. Speaker, you want me to finish up here -- I have asserted to them that four per cent would be the operating grant and that our initiative otherwise would be targeted towards specific projects.

3 p.m.

NORTHERN DEVELOPMENT

Mr. Morin-Strom: I have a question for the Minister of Industry, Trade and Technology in regard to the relevance of a $100-million technology fund for northern Ontario. The minister must recognize we do have two Ontarios, a southern Ontario that is growing in its economy, while thousands of workers are losing their jobs in the north. How much of the $100-million technology fund for this year will be spent in northern Ontario to support those secondary industries we need?

Hon. Mr. O'Neil: I would like to assure the member from the north that priority will be given to the whole province, but especially to the north and the east, to do something towards generating jobs in all those areas. When we are looking at the choice of people who will serve on that council and when we are looking at the disbursement of funds, the north will be high in our minds.

Mr. Morin-Strom: I do not believe that answered the question on how much will be spent in the north. Maybe we can get to specifics. On several occasions, I talked to the minister about the possibility of locating a forest products technology centre in Sault Ste. Marie to support the development of secondary industry related to our forest resource in the north. Can the minister commit to the development of such a technology centre in northern Ontario to support the vital job-generating and value-added jobs we need in secondary industry there?

Hon. Mr. O'Neil: I appreciate the discussions we have had and the suggestions the member has made. The council is not complete yet as to the people who will serve on it or where the funds will be going. However, I can assure the member again that the north will have a high priority.

Mr. Speaker: The Minister of Consumer and Commercial Relations has a response to a question previously asked by the member for Sudbury East (Mr. Martel).

GASOLINE PRICES

Hon. Mr. Kwinter: Yesterday, the member for Sudbury East, in a supplementary question, asked me a question. When I stood up to answer it, there were many interjections. You called for order, Mr. Speaker, and I sat down, expecting you would invite me to respond. Instead, you called for a new question. Therefore, I am going to take this opportunity to respond to the member.

The question was about the price differential of gasoline in the north vis-à-vis southern Ontario. Last July, the Premier directed the Minister of Energy (Mr. Kerrio) to do a study. That study is now complete and is being reviewed. As well, the Minister of Northern Development and Mines (Mr. Fontaine) is going to be conducting hearings in the north to get some input there so we can address the problem.

Mr. Martel: Nowhere has the minister answered the question. When we were dealing in gallons, the price differential between the north and the south was anywhere from five to eight cents a gallon. The conversion to litres finds the gas companies charging almost the same difference per litre between the south and the north as they did in gallons. We are now paying 25 to 30 cents a gallon more in 1986, when we were paying a difference of only five or six cents a gallon. Why has that rip-off been allowed to go on for these many years?

Hon. Mr. Kwinter: That question is an interesting one and it is one that is going to be addressed. Rather than put it in finite terms of six cents and 30 cents, if we deal with percentages, it would be a lot easier to understand because the whole pricing structure has gone up. That is a function of the marketplace.

Mr. Martel: Do not give me that nonsense.

Mr. Speaker: Order.

Mr. McFadden: Mr. Speaker, I have a question for the Minister of Colleges and Universities (Mr. Sorbara). I see the minister must have had a premonition that I was going to ask the question because he left the precincts of the House.

Mr. Speaker: Do you wish to redirect it to anyone else?

Mr. McFadden: I will stand down my question until the minister returns.

Mr. Speaker: Fine, the member for Nickel Belt.

Mr. Laughren: Mr. Speaker.

Mr. Sterling: Mr. Speaker.

Mr. Speaker: He was asking to stand down the question. If he does not want to stand it down, then the member for Carleton-Grenville.

ONTARIO HUMANE SOCIETY

Mr. Sterling: I have a question for the Solicitor General. Can he tell us whether his ministry has finally given to the Ontario Humane Society the funds it was requesting from him since the late part of last year? I brought this to the minister's attention some time ago.

Hon. Mr. Keyes: We have not forwarded to the society the sums of money that it has requested or referred to. We have made a written offer to advance the funds that were there last year. We have invited it to make application for those funds. We have also asked it to come in and discuss the matter further if this is not satisfactory.

Mr. Sterling: Three weeks ago I drew this matter to the minister's attention in this Legislature and asked him to pay the president of the Ontario Humane Society the courtesy of giving him a phone call. Why has he not made that phone call?

Hon. Mr. Keyes: Why does the minister not make a phone call? I have made a lot of them since then, but we have not had any response yet from that society, even to acquire the money we have made available to it.

COMPUTERIZED MAPPING SYSTEM

Mr. Laughren: My question is to the Minister of Natural Resources. Yesterday the minister announced that he was going to engage his ministry in a process of computerizing the mapping system in Ontario and that it would create 135 to 200 high-technology jobs and an additional 250 related jobs for Ontarians.

May I have the assurance of the minister with absolute certainty that those jobs will be in northern Ontario?

Hon. Mr. Kerrio: I cannot give that kind of assurance, but that is a very good question about the need for those kinds of jobs in northern Ontario. I will take that into account when we go forward with this very important study on digital mapping.

Mr. Laughren: I agree it is a good question. Can the minister indicate one single reason, given that we have technology in the north and the mining industry in the north, and given that the first set of maps that are to be done are for northern Ontario, why he cannot give us assurances those jobs will all be in northern Ontario?

Hon. Mr. Kerrio: I thought I also had a very good answer. I will give the member the undertaking that we will provide as many jobs as we can because of the direction by our Premier (Mr. Peterson) that we are going to do everything we can to provide employment in northern Ontario.

There may be very good reasons that some of them have to come from other parts of Ontario, but I will give him the assurance that we will do everything we can to provide as many jobs as possible in that undertaking in northern Ontario.

CHEESE FACTORY

Mr. Villeneuve: It has now been more than a month since the Premier visited the St. Albert cheese factory in eastern Ontario and promised to review the milk quota situation, oriented towards an increase in quota. How much additional quota has he been able to obtain for St. Albert recently?

Hon. Mr. Peterson: I thank the honourable member for his new-found interest in that co-op. I have turned the matter over to the Minister of Agriculture and Food (Mr. Riddell), and he will be happy to discuss it with him.

Mr. Villeneuve: It is amazing that the Minister of Agriculture and Food told us he could do nothing.

La direction de la Fromagerie de la coop de St. Albert a visité, la semaine dernière, la Commission ontarienne de commercialisation du lait. Ils ont eu une réduction dans leurs quotas. Qu'est devenue votre promesse d'au moins regarder la situation pour essayer de l'améliorer?

L'hon. M. Peterson: Je me souviens d'avoir dit que je discuterais du problème avec le ministre de l'Agriculture et de l'Alimentation (M. Riddell). Je l'ai fait et comme le député le sait, il existe plusieurs problèmes relatifs aux quotas du lait, pas seulement à St. Albert, mais aussi dans les autres régions de la province. Ils ont également d'autres problèmes, des problèmes environnementaux, et j'en ai discuté avec les ministres qui sont responsables de ces problèmes.

Comme le député le sait, je n'ai pas promis de résoudre le problème des quotas. J'ai dit que j'en discuterais avec le ministre de l'Agriculture et de l'Alimentation. C'est une situation très compliquée, mais elle n'est pas unique à St. Albert. C'est la même situation dans les autres coops, particulièrement dans l'Est de l'Ontario. C'est une situation difficile. En ce moment, il est impossible de la résoudre.

3:10 p.m.

INSURANCE RATES

Mr. Swart: I would like to ask a question of the Minister of Financial Institutions. Earlier this week, I asked him about intervention by his ministry to slow down or halt the escalation of insurance rates. At that time, he replied partly by saying, "We are looking into the rates."

What exactly did the minister mean when he said he was looking into those rates? Is it just going to be an academic exercise, or will he use the results to hold down those rates or roll them back if he finds the rate increases have been unreasonable?

Hon. Mr. Kwinter: The member raises a couple of questions.

As a result of the Slater committee report, we are taking a look at various recommendations. We are having representations made to us in response to the report. Part of that representation will be on the rate structure. We will look at it to see whether there should be any government intervention.

Mr. Swart: In view of the fact this report will not be out until July 31 and cannot be dealt with until the fall; given that in his report Slater indicated the insurance companies have overreacted in their rate increases; and given that insurance companies have not and will not justify their present rates, why does the minister not intervene now and take action to hold down those rates?

Hon. Mr. Kwinter: The member makes some assumptions that are not in the report. Dr. Slater does not say the companies have overreacted. He is suggesting they may have overreacted, and that is what we are trying to find out. When we do, we will respond.

WEED HARVESTING

Mr. Speaker: The Minister of Natural Resources has a response to a question asked by the member for Stormont, Dundas and Glengarry (Mr. Villeneuve).

Hon. Mr. Kerrio: I would like to respond to the member and apologize to him at the same time. When he raised the question, I thought he was asking about wheat harvesting. He was really suggesting weed harvesting. I thought he properly should have put the question to the Minister of Agriculture and Food (Mr. Riddell).

For the past two summers, the Ministry of Natural Resources has funded aquatic plant harvesting in Lake St. Francis to clear it for boat traffic. The project was intended only as a demonstration; so the funds provided were on a short-term basis. Those funds are now needed for other priority projects and will not be available for further weed harvesting.

Mr. Villeneuve: In the speech from the throne, this government mentioned the town of Lancaster and tourism in eastern Ontario. Is this the same government that is now taking away one of our best tourist promotions to bring in American and Quebec light watercraft and encouraging them to go to some of the commercial establishments for sports fishing?

Hon. Mr. Kerrio: We have to face the realities of weed harvesting. When we do those things to encourage boating, we do it strictly to be able to do the research on it. If it is to be ongoing across this province, it will have to be undertaken by others. We support tourism and everything to further that industry in Ontario, but that is one initiative we did on that basis and cannot do any longer.

Mr. Pope: Mr. Speaker, on a point of order: The Minister of Natural Resources says that in the past two years the weed harvesting program was experimental. As the minister at the time, I say that is not true.

Mr. Speaker: That is not a point of privilege; it is not a point of order; it is a point of view.

INTERNSHIP PROGRAM

Mr. Jackson: My question is for the Premier. On May 5, he advised us he would investigate the selective recruitment practices of his ministries for the Ontario public service internship program, which effectively denied most of Ontario's post-secondary graduates the opportunity to apply for about 100 highly coveted public service jobs.

Given that the Minister of Colleges and Universities was able to investigate his practices and that he acknowledged in this House the unfairness and extended the deadlines for his postings almost overnight, will the Premier please advise us what he has done in regard to this in the last 10 days?

Hon. Mr. Peterson: We have had a thorough investigation. I will ask the minister in charge of everything around here to respond to the member.

Ms. Caplan: The human resources secretariat was responsible for designing the internship program to which the honourable member has referred. Each ministry was responsible for advertising the program based on the needs and the area where the ministry was going to be doing its search.

In response to the investigation I undertook, we requested all ministries, in order to ensure the widest possible distribution and the widest possible opportunities for our youth, to extend the deadlines for 10 days and ensure that all the colleges that had not been notified -- if they had not been, although, in fact, each of the colleges and universities was notified by letter at the time of the program -- were given additional time to encourage all applications wherever the jobs have not been already filled. For the majority of jobs, the deadlines have been extended.

Mr. Jackson: It is very clear that this whole project was mismanaged to the extent that even now there are universities that have not received the full list of postings and that many, if not all, the various ministry postings have been closed. In some instances, appointments have been made.

My question to the Premier --

Mr. Speaker: Order. It is not to the Premier; it is to the minister.

Mr. Jackson: Will the Chairman of Management Board be opening up the postings that have already been closed? In other words, where a person has been given the posting --

Mr. Speaker: You have asked the question; now you are explaining it. The question has been asked.

Ms. Caplan: Let me clarify further. The area of search by each ministry reflected the location of the position in question and the area of the speciality of the institution. Unsolicited applications were also accepted by the ministries. Where jobs have not been filled, and that is the majority, we have extended the deadline for 10 days, in response to the member, to ensure that the widest possible opportunities were available for the 100 jobs in this internship program. In fact, all the institutions knew about this program and the ministries were directed to give as wide an access as they possibly could.

RENTAL HOUSING PROTECTION LEGISLATION

Ms. Gigantes: My question was intended for the Minister of Housing (Mr. Curling). In his absence, I will direct it to the Attorney General, who helped me understand the last answer I had from the Minister of Housing.

Twenty-eight days ago, Mrs. Carol Throop appeared before the city of Ottawa committee of adjustment and argued that her rented family row home should not be severed and sold. That was the second time in a year and a half it had happened to the family. If Mrs. Throop applies in the next two days for an appeal through the Ontario Municipal Board process and is turned down again, can she then appeal to cabinet under the provisions of Bill 11?

Hon. Mr. Scott: That is a question for the Minister of Housing, who is not here today. I will refer it to him and he will provide an answer to the honourable member when he returns.

3:20 p.m.

Ms. Gigantes: When the Attorney General is referring this matter to the Minister of Housing, I wonder whether he could point out that there are 13 units in the row of town houses where the Throop family currently lives and that the secretary of Ottawa's committee of adjustment said it would cost Mrs. Throop $100 to appeal to the OMB and that the appeal would deal only with her unit, not with the whole row. Does this mean that Bill 11 will offer the hope of protection only for rental units on a one-by-one basis?

Hon. Mr. Scott: I think I got the sense of the honourable member's question. I undertake to bring those facts to the attention of the minister and I am sure he will provide the answer the member requires.

Ms. Gigantes: By Saturday?

Mr. Speaker: Order. The Premier has a response to a question previously asked by the member for Dufferin-Simcoe (Mr. McCague), but the member is not here.

Hon. Mr. Peterson: He was just here. Did he disappear? He will want to hear the answer to his penetrating question.

Mr. Harris: Wait until he comes back -- the same as we do when ministers are not here.

Hon. Mr. Peterson: Fine. If the member wants to rally him, I will give my answer when he comes back.

POST-SECONDARY EDUCATION

Mr. McFadden: I have a question for the Minister of Colleges and Universities. Yesterday, my colleague the member for York Mills (Miss Stephenson) asked whether the minister could provide to the House information as to what portion of the capital expenditures allocated for colleges and universities was allocated to colleges and what portion was allocated to universities. At that time, the minister indicated he was not sure how the capital expenditures were allocated. Is he now in a position to tell us how the $59 million allocated for capital expenditures has been allocated between colleges and universities?

Hon. Mr. Sorbara: I am glad my friend from Eglinton asked that question, because I want to clarify some of the information that was provided yesterday to my friend from Don Mills. At that time, she referred to a figure of $59 million that was presented in the budget --

Miss Stephenson: This friend is from York Mills.

Hon. Mr. Sorbara: I am sorry. I do have a friend in Don Mills as well, but York Mills will do. Wherever he is, or whatever Mills it is --

Interjections.

Mr. Speaker: Please disregard the interjections. Answer the question.

Hon. Mr. Sorbara: The $59 million that is represented as capital for the purposes of the budget will be allocated approximately $45 million to universities and the balance to colleges.

With respect to the figure that was quoted yesterday by my friend from one of those Mills -- a $60-million figure for 1984-85 -- that was one view of the allocations. I am told --

Mr. Harris: Oh no, that has nothing to do with the question. The minister is answering questions raised in the budget debate yesterday.

Mr. Gregory: He should answer the question or sit down.

Hon. Mr. Sorbara: I believe it is pertinent to the question asked. The member for Eglinton (Mr. McFadden) raised it, and I am trying to provide a response that is reasonable.

Mr. Speaker: I presume you can do it very briefly.

Hon. Mr. Sorbara: Mr. Speaker, you will know, as well as I, that capital can be new buildings or a new piece of equipment. The analysis that my ministry officials have presented me with is that in 1984-85, according to their calculations, including equipment, somewhat more than $60 million was spent on capital, very broadly defined. With those same very broad definitions, a figure of almost $74 million in capital will be spent in the current fiscal year.

Mr. McFadden: From what the minister is saying, page 39 of the budget statement is misleading. Will the minister outline for the House that $59 million is not the total figure? Will he please tell the House what the other figures are and where they appear in the budget statement?

Hon. Mr. Sorbara: Perhaps my friend from Eglinton has the same problem as the Leader of the Opposition (Mr. Grossman) in not being an accountant but being a lawyer, a very honourable profession. However, he knows enough about accounting to realize that capital can be very broadly defined to include new pencils. When one buys a piece of equipment or provides funds for a piece of equipment such as a supercomputer, that is clearly capital. When it is instructional equipment in the form of a desktop computer, in some cases it is defined as capital and in other cases it is defined as operating revenue.

Broadly defined, capital spending will be in the neighbourhood of $74 million. More narrowly defined, the capital, as enunciated in the budget, which is not misleading at all, is $59 million.

PENSION FUNDS

Mr. Mackenzie: I have a question to the Premier which I hope he will take with the same seriousness as I am in asking it. The question arises as a result of the raid on private pension plans that is occurring in many plants around Ontario.

The Premier will know that the principle of pension payments, pensions or contributions being deferred wages, is one that has been pretty broadly accepted and certainly was accepted when I served on the select committee on pensions some years ago. Is his government now in the process of changing the acceptance of that principle of pensions being deferred wages in Ontario?

Hon. Mr. Peterson: The member raises a philosophical question from which stem a number of policy initiatives. The most important issue is how we protect people's income after retirement. I assume the member's question is leading up to the issue of the pension surpluses.

As the member knows, it is an extremely difficult issue that this government has spent a lot of time looking at. One of the problems with the New Democratic Party theory that we should allow no extraction of those funds is that, in a sense, it punishes the successful managers of the funds. It does not do anything for the worker who has a fund which is chronically underfunded or has problems. It does not bring to the system the evenness I would like to see.

The Treasurer (Mr. Nixon) has been discussing these matters with his colleagues. I think this has provided leadership and that a national consensus is being developed. But the matter of inflation protection is one that, at this moment, is still outstanding.

We believe in an ideal world we would have some uniformity of legislation across the country. I think the member and I share that view. It is very difficult to be too far out of sync with some of the other provinces, but we will continue to provide the leadership role in that way.

Mr. McClellan: I do not think the Premier answered the question on deferred wages. I remind the Premier that yesterday the Treasurer made reference to the 1981 report of the select committee on pensions, on which both the Premier and I sat and supported the recommendations.

Does the Premier not remember the recommendation from that committee, which we both supported, that inflation protection be provided for private sector company plans based on the excess interest approach, which would use the so-called actuarial surpluses that he is now permitting his minister to give to corporations?

Hon. Mr. Peterson: I remember that very well. I remember the long discussions. I remember how enjoyable it was, particularly sitting with the member on that committee, because we all gained some insight into these difficult situations.

With respect to excess interest, in general terms I share the same view as the member. That is probably the way to go in that it provides some protection against inflation. That does not necessarily apply to all particular funds, as the member knows. At the moment, the Treasurer has draft legislation out for consultation. It will be coming forward shortly and will enunciate the policies of the government. The member will see a sensitivity registered in that direction.

TABLING OF INFORMATION

Hon. Mr. Peterson: On Thursday, May 8, the member for Dufferin-Simcoe (Mr. McCague) asked me a question in the House with respect to and implying that we were not prepared to release orders in council 975, 979, 1009, 1014 and 1016, all in 1986.

Let me be specific. Orders in council 975 and 979 of 1986 provide benefits under the Family Benefits Act to particular individuals named in the orders. The home address also appears in the orders. Orders in council 1009, 1014 and 1016 are under various acts and set the salaries for particular individuals.

I could go into great detail on the custom in this regard, but as the member knows, it is customary not to make these things public in order to protect the individual from embarrassment. That was the policy followed by the previous government and it is the policy followed by this government.

3:30 p.m.

It is not a question of things being hidden, it is a matter of wanting to avoid embarrassment to anyone. I think my honourable friend has the impression we are appointing people secretly and doing something weird and wonderful in there. I assure him we are not.

Mr. McCague: I thank the Premier for his partial answer. If he checks Hansard, he will find there were several others in that group. I understand the family benefits ones. We were told by his staff that 1014 and 1016 cover salaries for individuals. I do not see why he does not post those.

Mr. Speaker: Question.

Mr. McCague: He can do it through the public accounts, but why does he not do it today, now that he has this open and "all information available to everybody" government?

Hon. Mr. Peterson: The member has obviously changed his mind on these matters, because he did not release these figures when he was in government. I recall the previous leader of his party bringing forward a sunshine law that would have discussed these things and then pulling the bill out. If this is his party's new policy, that is fair enough.

We have taken the view that we have nothing to hide and if we ever embarrass people, that is not our intention. The member and some of his colleagues and researchers are rummaging around the orders in council department trying to find something embarrassing, and he is welcome to come and look in it all the time. We are not hiding anything, but occasionally we have to make judgements about the protection of individuals.

If the member wants to stand up in this House and say that after 42 years his party has changed its policy on these matters, then he should do so.

CONFLICT OF INTEREST

Mr. Shymko: On a point of privilege, Mr. Speaker: In the light of telephone calls that are being made daily to members of the Legislative Assembly by the media, specifically by one Toronto paper, requesting that we inform them of any activities we may be involved in that constitute a conflict of interest, I want to admit publicly a conflict of interest that I share with all the other members of the House; namely, the fundamental, bottom-line conflict of interest that I am voting on my own salary. As a member of this Legislature, I am placed in the circumstance of voting for my own salary out of public funds, and this constitutes a fundamental conflict of interest. I would like to hear your comments on this, sir.

Hon. Mr. Scott: If you step outside you can avoid it, but there does not seem to be any rush for the door.

Hon. Mr. Nixon: We can let the judges set the salary. How would that do?

Mr. Speaker: Order. After listening to the member for High Park-Swansea, I suppose I should listen to other members; however, I fail to see how that is a point of privilege, as I understand privilege.

Mr. McClellan: Maybe I can make a suggestion.

Mr. Speaker: Order.

Mr. McClellan: Speaking to the point of order, I think an important concern has been raised by the member. I suggest that it be referred to the standing committee on the Legislative Assembly.

Mr. Speaker: I fail to see it is a point of privilege and, therefore, feel I cannot accept a motion.

PETITIONS

GASOLINE PRICES

Mr. Pollock: I have before me a petition signed by members of the Ontario Motor League who live in my riding. I want to present the petition to the Premier.

"To the Lieutenant Governor and the Legislative Assembly of the province of Ontario:

"We request the government of Ontario to reduce gasoline tax by 1.1 cents a litre from 8.3 cents a litre to 7.2 cents a litre immediately and to phase in further reductions over three years to 5.4 cents a litre by 1989."

Mr. Gregory: I have a petition signed by 214 residents of Mississauga East:

"To the Lieutenant Governor and the Legislative Assembly of the province of Ontario:

MOTION

PRIVATE MEMBERS' PUBLIC BUSINESS

Hon. Mr. Nixon moved that the following changes be made in the order of precedence for private members' public business: the member for Erie (Mr. Haggerty) for the member for Halton-Burlington (Mr. Knight) as ballot item 3; the member for Halton-Burlington (Mr. Knight) for the member for Prescott-Russell (Mr. Poirier) as ballot item 6, and the member for Prescott-Russell (Mr. Poirier) for the member for Erie (Mr. Haggerty) as ballot item 21; and that the requirement for notice with respect to ballot item 3 be waived.

Motion agreed to.

NOTICE OF DISSATISFACTION

Mr. Speaker: Before orders of the day, I wish to inform the members that on Tuesday I announced there would be a debate between the member for Brantford (Mr. Gillies) and the Minister of Labour (Mr. Wrye), known as a late show. However, that has been rescheduled by the two parties, and the debate will take place next Tuesday evening.

Mr. Harris: I designed my whole day around this.

Mr. Speaker: I am sorry. I hope you will be here on Tuesday evening.

BUDGET DEBATE (CONTINUED)

Resuming the adjourned debate on the motion that this House approves in general the budgetary policy of the government.

Mr. Foulds: I thought I would take advantage of the new traditions of the House and use the podium that was made available to the Treasurer (Mr. Nixon). It is very comfortable; unfortunately, it does provide a blockage to some other members.

First, I would like to thank a number of people who have helped me with this budget reply: Chuck Rachlis, Diane Bull and Terri Hilborn of the research department of the New Democratic Party here at Queen's Park; Peter Raffo, my constituency researcher, and most especially, Maureen Brown and Jim Mundy, my two legislative assistants here at Queen's Park, who worked tirelessly over the past little while and especially the past two days, late into the evening, to help me prepare for this occasion.

I want also to apologize to the member for York Mills (Miss Stephenson) for being briefly absent from her remarks yesterday afternoon. I had to take a few moments off to go to a reception for Donald MacDonald, the former leader of the New Democratic Party. I would like to pay tribute to him today because I think all of us, not just the members of my party, recognize that no one has done as much for democratic socialism in Ontario as has Mr. MacDonald. All members of all parties have to admit that he probably led the fight to democratize this Legislature more than any other single member over the past 30 years.

I want to start by saying I believe this is a neutral budget. It does not add any glaring unfairnesses to our present economic situation as have many Conservative budgets of the past 10 or 15 years, aided and supported by the member for Cochrane North (Mr. Fontaine) and the member for Kenora (Mr. Bernier). Unfortunately, however, this budget has not taken any bold economic steps towards fairness.

We in this party are voting for it for two very simple reasons: (1) We gave our word we would not vote on a no-confidence motion in this government for a two-year period, and only one year has passed. (2) The budget itself does not positively harm people as have many Conservative budgets that we have had to live with over the past 10 or 15 years. In this budget, the main question is, what is there to vote against? The answer is, not very much. I must tell the Treasurer in all seriousness, we in this caucus find little to vote for.

3:40 p.m.

I have said it is a neutral budget, but the trouble with having one's car or tractor in neutral is very simple. If one pushes down on the accelerator, one does not go anywhere. In this case, the budget gives a tremendous impression of action by revving up the engine madly, but the vehicle stands still. The Treasurer has decided to keep his hands off the provincial economy; he has decided neither to guide it nor to put it into gear.

It is true that Ontario looks to provincial budgets for such housekeeping matters as taxes on tobacco and alcohol, sales tax, income tax rates and so on. However, Ontario also expects more from its Minister of Economics. Budgets must also set forth the economic direction and overall strategy for economic development. On that, like the last one, this budget fails miserably.

I feel compelled to contrast the role that the Treasurer sees for government in the economy and the role that we in the New Democratic Party see. In his speech, the Treasurer said, "The role of government is to help Ontario business get on with that job" -- that job being to create a competitive economy" -- and to manage the province's own affairs in an efficient and cost-effective manner."

In my party, we believe that second role belongs to the public service under the guidance of the government. Surely the Minister of Economics should accept more responsibility for the economic future and development of this province than the Treasurer's statement would indicate. Like Conservative Treasurers before him, unfortunately, he has abdicated his responsibility.

People are our greatest resource. People built this province. There were people in Ontario long before there was capital, long before there were multinational corporations and long before there was government. This province was not built on capital, it was not built on corporate tax expenditures and, goodness knows after two examples, it will not be built on Liberal budgets.

The economy of this province exists for one reason, and that is to produce wealth for all. Only a democratic government that intervenes in a meaningful way can improve the lives of people collectively so that each may have the good life individually. It falls to the government to help replace poverty and misery with security and happiness and to replace the fears of the present with hope for the future.

Therefore, the provincial government, as does the federal government, has special responsibilities to the people who elect it. It has a responsibility to help people develop and guide their destinies and their economy, to help provide jobs and eradicate poverty and to help people find their rewards in the work place and in our society. The government's responsibility is to show leadership, courage and initiative. We believe that as parliamentarians and as democratic socialists. This Liberal budget says, "We may do that," "Later" and "Maybe."

I saw the Treasurer's picture on the front page of the Globe and Mail yesterday, looking very satisfied with himself; indeed, he still appears to be quite satisfied. The Treasurer should remember the words of Thomas Edison, "Show me a thoroughly satisfied man and I will you show you a failure." To fail is one thing. To be content in that failure is quite another.

Here was a missed opportunity if ever there was one in Ontario. While the polls demonstrate that this government is quite popular, what the polls do not tell us and what this government does not know is why. All the Liberals know is that they are popular, and they are scared stiff of doing anything to undermine that popularity. Therefore, in the throne speech and in the budget, they showered us with platitudinous verbiage on the one hand and, all too often, silence on important matters on the other.

When is this government going to tell the people of Ontario what it actually stands for and where it plans to lead Ontario, or is that too much to expect of Liberals? Do they plan to be led merely by circumstances as they indicate in the budget?

For example, the Minister of Community and Social Services (Mr. Sweeney) tells us there is a desperate need for child care. He said, "The critical issues with respect to child care are to have sufficient spaces so that parents can make a choice and to have them structured in such a way that all parents who use child care can afford to do so." The Treasurer finds $6 million to address this problem. He knows, and everybody in the province knows, that $100 million is needed.

In other words, the Treasurer knows, as the people of this province know and as this Legislature knows, there are really two Ontarios in this province: the haves and the have-nots. Among the haves are corporations and people earning substantially more than a living wage; people such as the doctors, whose average income is $120,000 annually and who are handled with kid gloves. Among the have-nots are (1) the working poor, people subsisting below the poverty line and still, after this budget, paying income tax and Ontario health insurance plan premiums; (2) welfare recipients, people who pay out a large part of their meagre incomes on housing and sales tax; and (3) residents of northern Ontario, where industries are slowing down and closing faster than the Premier (Mr. Peterson) can knot his nifty Liberal red tie.

The Treasurer's document does little to reduce the imbalance between the two Ontarios. The meagreness of the changes to corporate tax and the extension of the surtax on the well-off are matched only by the poverty of positive measures for the disadvantaged of our province.

While the Treasurer plans to get another $29 million from corporations with his changes to the capital tax over the next two years, his changes to the OHIP premium assistance will still leave him taking $278 million in OHIP and taxes over the same period from the pockets of people living below the poverty line. In a province where we are told the economy is buoyant and revenues are buoyant, families and individuals who work and subsist below the poverty line still pay health premiums and income tax; yet people with higher incomes in this province, people who can afford to pay accountants, can still get away without paying any income tax at all.

Mr. Warner: It is shameful.

Mr. Foulds: As my colleague the member for Scarborough-Ellesmere indicates, that is shameful.

For social assistance recipients, the Treasurer has found $25 million for 50,000 families to help them pay their rent -- $41.66 per month; 41 lousy bucks -- while he continues to let corporations defer payment of $246 million in taxes every year. There is a whole other Ontario which this Treasurer and the Liberals chose to ignore. If they did not ignore it, they acknowledged it, tipped their hats and walked by on the other side of the street.

The Treasurer came to a crossroads. Unlike any other treasurer in Canada, he found himself in the challenging position of being able to do good things for the people of Ontario who have borne the brunt of the most recent recession-the worst economic depression, between 1981 and 1985, we have experienced since the 1930s. That economic depression was aided and abetted by the budgetary policies and the legislation of the previous Conservative administration, supported by the member for Cochrane South (Mr. Pope) and the member for Kenora, who are not here this afternoon.

3:50 p.m.

The present Liberal Treasurer had come to a point in his long and honourable career where he could have said in a very real way, not merely with words, that fairness is important. He had the opportunity to tell the single mother of two receiving family benefits: "You are important. If you want to work and are able to work, here is the child care you need. If you are unable to work, here is enough money to raise your children with dignity."

He could have said to the young man working for $4.50 an hour: "You, too, are important to me. I know you work hard for your pay and still live below the poverty line, and that is not right. My government does not have the courage to do anything about a labour market that forces people to subsist on $4.50 an hour, but I can help a little by no longer taking taxes and Ontario health insurance plan premiums off your cheque and out of your pocket, because you are important."

He could have stood proudly in this Legislature and given the people of our north some specific, new and concrete plan of action to stop the current savage attack on their economy. He could have said to them: "I know you get a raw deal from the multinationals. I realize your tax dollars have helped strengthen the infrastructure of the south while yours has been left to wither."

He could even have scored a political point or two by pointing out that the transfer of wealth and the withering of the economy were presided over by the previous Conservative administration. He could have said: "I am aware that the north has made great contributions to this province, and it will continue to do so. Here is the investment capital you need. Build a strong industrial base. Show us what you northerners are made of. Be the success stories that we know you can be and that the Tories, supported by their northern members over these past 42 years, from Kenora to Cochrane North, refused to let you be."

The Treasurer could have said: "Do not worry. When you begin to share in the prosperity that is Ontario, our investment in you will be paid back 100-fold." But no, the man whose job it is to provide economic leadership to the people turned away. He took the easy route out. He said instead, "I know things are tough, but what can a self-proclaimed parsimonious old farmer do?"

He could have done a lot better, because this government, in this second budget, has turned its back on the poor, the disadvantaged and the people of the north. The government had the opportunity to blaze a new trail. For the first time in some 42 years of government, it could have shown some leadership, shown some compassion and shown it was more than the manager of the present situation. Instead, the government chose to follow the road that leads from Lindsay through London, Brampton, Muskoka and St. Andrew-St. Patrick into oblivion.

Let me now turn to what may be the most important economic challenge facing Ontario today. That challenge is the prospect of a free trade arrangement with the United States.

The Premier has been very successful at getting headlines for being critical of free trade and for standing up for Ontario's interests. But keep in mind that the Premier and the Liberals of this province have never said no to Brian Mulroney on free trade.

The Premier has never discussed the alternatives to free trade. Keep in mind that in Ontario the Conservatives and the Liberals joined forces on the select committee on economic affairs in support of the Mulroney initiatives. The free trade train has already left the station, and the Liberal Party is on board. They have not taken a seat yet, because they cannot decide whether to ride on the engine or on the caboose.

What is the alternative to free trade? It cannot be some kind of Fortress Canada. It cannot be Canadian isolationism. The problems within the trading world are real and growing. The rising tide of American protectionism is a threat.

New Democrats outlined an alternative in our dissent from the Liberal-Conservative majority on the select committee on economic affairs. We proposed a four-point program for fair trade.

First, we proposed establishing a bilateral trade mechanism to resolve those specific trade disputes between Canada and the United States. After all, we have a permanent bilateral mechanism for resolving specific problems along our joint international waterways. It is called the International Joint Commission. Why cannot we have an international joint trade commission to settle specific trade disputes between Canada and the US, such as in lumber?

Second, we as a government would be closely monitoring US trade developments, including providing support for Canadian companies and producers in their trade disputes with American interests. For example, what support has our provincial government -- or our federal government, for that matter -- given to the lumber producers of this province?

Third, we need a broader trade strategy to recognize that our many problems with the US are handled better in a multilateral context. We are not alone among nations feeling the pinch of US protectionism, but with the exception of one other country, Israel, we are alone in seeking a bilateral solution.

Finally, and most fundamentally, we have to start solving our economic challenges ourselves rather than seeking a continental answer. Elements of a Canadian and Ontario strategy include: (1) import substitution, (2) domestic content, (3) a diversification of our trade outside the US and (4) building Canadian industry through Canadian investment.

The auto pact is an example of the type of negotiating we ought to be doing, not only with the Americans but also with others who want to sell in the Canadian market. The auto pact needs to be expanded and upgraded to include other offshore producers from Europe and the Pacific countries. We have not heard one word from the Premier on that in suggesting what the federal government should do.

We have to bargain for Canadian content and adopt a policy of fair trade, not only with the US but also with all other trading nations of the world. After all, we are a trading nation ourselves. It is this type of agreement, such as the auto pact, that we need to cover other producers such as those who produce hospital supplies and mining machinery.

In short, we need to combine an imaginative strategy for Canadian economic development with a determination to bargain much more toughly for Canadian jobs. What does the Treasurer's most important economic document say about our most important economic challenge, free trade? As I read that single paragraph, it continues in the tradition of the Premier, the tradition of bafflegab and doubletalk.

This government wants to "secure and enhance access to American markets." However, it says it will not give up anything to get it. It expresses concern without stating exactly what it is going to do to protect Ontario's position.

It would appear that Mackenzie King's ghost has left Kingsmere and has moved to Queen's Park. I hear the late Prime Minister's voice echoing softly across this chamber: "Free trade if necessary, but not necessarily free trade."

I would like to move to the area of tax fairness. In his statement, the Treasurer made a passing reference to tax fairness. He suggested the federal capital gains tax exemption not only costs Ontario $130 million but also "undermines the fairness of the tax system." He insinuated that, unfair as it may be, there was nothing he could do about it. However, he neglected to mention that he could do one of two things. He could do as Quebec has done: opt out of the tax-collection agreement with the federal government and levy his own capital gains tax. If he does not want to upset Mr. Wilson, his new-found friend, by doing that, he could introduce succession duties. That is what I am recommending.

4 p.m.

Has it slipped his mind that succession duties were phased out in 1979 by the then Treasurer, the member for Muskoka (Mr. F. S. Miller), who claimed the introduction of capital gains tax at the federal level eliminated the need for succession duties? The Treasurer has the authority to introduce succession duties, but he did not take this modest step towards fairness. Now that we are eliminating capital gains tax at the federal level, surely a provincial succession duties tax makes sense.

Hon. Mr. Nixon: They are not quite eliminated.

Mr. Foulds: They are on their way. The Treasurer knows it.

Our estimates are that a succession duties regime similar to the one phased out in 1979 would yield $108 million annually. Our suggested succession duties would exempt intergenerational transfers of family farms and estates worth less than $500,000. That is only one New Democratic Party proposal.

The work of New Democrats federally and provincially has demonstrated that the present tax system is grossly unfair, especially to the working poor. Much of it is regressive and it is becoming increasingly so. There is a continuing shift away from corporate taxation towards increased taxes on people.

To illustrate this point, one need only look at chart C7 in last year's budget and compare it to chart C7 in this year's. Last year, personal income tax accounted for 25 per cent of provincial revenues, while corporate taxes accounted for 10 per cent. The pie graph on C7 shows clearly that this year corporate taxes remained steady and account for 10 per cent of the provincial revenues, while personal taxes account for 27 per cent. In other words, that injustice, that imbalance in the taxation system which started 20 or more years ago continues in the province under this Liberal government.

Low-income earners earn much less and get far fewer breaks than more affluent individuals. Even with the Treasurer's new announcements, people living below the poverty line find themselves paying substantial income tax and Ontario health insurance plan premiums.

In an effort to begin a program of reform, New Democrats would altogether eliminate provincial income tax and OHIP premiums for Ontarians below the poverty line. For a family of four at the poverty line of $20,821, it would mean savings of $802.90 in income tax and $714 in OHIP premiums. That would put about $1,500 back into their pockets and into the economy. For a single parent with two children at the poverty line of $18,068, this would mean savings of $625 in income tax and, again, $714 in OHIP premiums. That goes to show what a regressive tax OHIP premiums are. The Treasurer took no steps at all to eliminate that most regressive tax, which was a promise of the Liberal Party during the election campaign. That step alone, suggested by the New Democrats, would put more than $1,300 into the pockets of families who need and would use and spend that money.

The cost of these two reforms would be $262 million, no small amount but still less than the government continues to forgive in deferred taxes to the corporate sector each year.

Mr. Martel: Corporate welfare bums.

Mr. Foulds: Those deferred taxes amount to $276 million annually. They are, as my friend the member for Sudbury East (Mr. Martel) says, the real welfare bums of this country and this province. They are the worst corporate welfare bums one could expect.

These taxes are, in effect, interest-free loans to the corporate sector by the working poor who pay taxes and OHIP premiums. What we should do is charge an interest cost for those deferred taxes. Let us say we charge them prime rate plus one per cent. A modest suggestion made by a very good Liberal, Eric Kierans.

Hon. Mr. Nixon: A very fine gentleman.

Mr. Foulds: Very fine. The Treasurer should take up his idea because if Eric Kierans's idea was adopted, it would have one of two effects: either those deferred taxes would be paid right back into the provincial coffers, because corporations could get the money from the private sector probably at a lower cost -- that is, at the prime rate -- or the government would reap substantial interest payments on the outstanding capital amount. No matter which occurred, the increased revenue would go a long way to addressing the unfairness in the current taxation system.

Hon. Mr. Nixon: Not a bad idea.

Mr. Martel: It is much better than Sinc Stevens's idea.

Mr. Foulds: It is a lot better than any idea that Sinc Stevens would ever suggest.

Mr. Martel: Interest-free loans.

Hon. Mr. Nixon: That is right; kick a fellow when he is down.

Mr. Martel: It could not happen to a nicer guy.

Mr. Foulds: We used to kick him when he was up as well.

We would close other such corporate tax loopholes and require corporations in our province to pay at least 50 per cent of the applicable statutory tax rate. They do not have to do that now. This would eliminate the situation whereby successful corporations avoid paying corporate taxes or pay less than 50 per cent of the applicable tax rate. We would increase the statutory rate to 16 per cent, bringing Ontario into line with British Columbia, Manitoba and Newfoundland, and still behind Tory Saskatchewan, in their minimum applicable statutory rates.

What is more, the New Democrats would immediately establish a minimum tax on high-income earners. I would not for a moment suggest that these measures are enough, but they do represent a number of desperately needed steps towards tax fairness.

I am reminded at this point of something Tommy Douglas said, when I think of a question the Treasurer will surely want to put to me, as he heckles across the floor, when I start talking about increasing programs and developing jobs. When Tommy Douglas was asked where he got the money to increase Saskatchewan's budget in the 1940s from $30 million to $40 million and at the same time reduce by $21 million the deficit inherited from a Liberal government, he replied, "We got the money from the only place I know where to get it: from those who have it."

That is what tax fairness is all about. It is taxing those who have it, not those who do not; taxing those who have it to share with those who have not, not the other way around. That is not some wild-eyed socialism; it is responsible socialism. It is also simple economic common sense.

Hon. Mr. Nixon: It is the slogan, "Make the rich pay." Which party was using that?

Mr. Foulds: If the Treasurer wants to mouth a slogan of "make the rich pay," then let the Treasurer do it. We would support him in his drive towards that worthwhile achievement. If he wants to bring in a supplementary budget along those lines, we would certainly support that.

This budget fails to deal adequately with free trade and fair taxation. It does nothing to stop the rip-off of the insurance consumers of Ontario. It fails to stop the gas-price gouging by the major oil companies and to bring northern gas prices under control. It continues to force the consumers of unleaded gas to pay too much in comparison to the price of leaded gas. The housing announcement did not adequately meet the need for decent, affordable housing all over the province, from Kenora to Cornwall and from Toronto to Trenton.

4:10 p.m.

Nowhere is the failure greater than in the monumental passivity with which this budget dealt with the northern economy. This is perhaps the most difficult part of the budget for me to deal with because I am committed to the north as an individual, intellectually and emotionally. It is my home. It has always been my home and will always be my home. There is literally no place else in the world I would rather live. I am afraid members will have to bear with me if my anger, frustration and heartbreak come through.

The depressing facts are too well known. For decades the north's economy has been the subject of a boom-and-bust cycle. For years northern Ontario has been used as a resource hinterland, not only by southern Ontario but also by most of the industrialized western world. Within the last 10 years, we have seen a massive loss of jobs in the Sudbury nickel mining operation.

For example, my friend the member for Sudbury East was telling me earlier today that in 1972 at Inco alone hourly rated employees numbered 19,000. Under the Tory government and supported by the member for Cochrane South, who is absent this afternoon, and the member for Kenora, who is absent this afternoon, and other northern members who are all absent this afternoon, that number of miners has dropped to a mere 6,500 hourly employees.

What did the Tories do through all of that? They put in one government building and started a goat farm. That was their program for reviving and diversifying the economy of northern Ontario. That is what they did when they had the responsibility of doing something to stop the erosion of the north's economy. I find it offensive that the member for Cochrane South had the gall to get up and ask the questions he did earlier this afternoon, when he was the minister responsible in that cabinet and presided over the destruction of the north's economy. That kind of cheap shot and chutzpah has to be heard to be believed. When he was the Minister of Natural Resources, he did little or nothing to stop the erosion of our resource-based economy in northern Ontario.

Let me give a few examples. Since 1977, Ontario's iron mining industry has been gradually dismantled. The previous provincial Conservative government was content to sit back on its fanny and watch it happen.

1. My friend the member for Sudbury East will remember this well. In 1978, there was the shutdown of the Marmoraton Mining Co. at Marmora. It was run by Bethlehem Steel.

2. In 1978 and 1979, there was the shutdown of Steep Rock Resources at Atikokan. It was run by Inland Steel Corp. I can remember sitting in meetings with the member for Sudbury East and with the then Minister of Natural Resources, the current Conservative member for Kenora. The minister was sitting on his hands and wringing them, saying there was nothing he could do to stop that shutdown or to persuade the company to keep it open. There was nothing he could do to insist that the ore that was still valuable and still in the ground should continue to be mined and used in Ontario industry. At that time, there was a need for that iron ore in the steel capacity here in Ontario.

3. In 1979, there was the shutdown of the National Steel Corp. at Capreol. Once again, I remember my colleague the member for Sudbury East, who lives in Capreol, fighting that tooth and nail in this Legislature while the Tories sat idly by.

4. In 1979 and 1980, there was the shutdown of Caland Ore in Atikokan. The Tories had established a one-industry town cabinet committee as a response to the crisis at Inco in the mid-1970s, but it never met to deal with that crisis or with the subsequent shutdowns.

5. In 1980, there was the closure of Inco's iron ore recovery plant in Capreol.

6. In 1983, there was the termination of the Steep Rock Resources' Bending Lake development project.

7. In 1984, there was the announced shutdown of the Griffith mine at Ear Falls. Its complete and final closure came this year; yet the tax exemption continued to be paid to Stelco by this Liberal government even though Stelco had not lived up to the commitment it had made when it got that tax exemption behind closed doors from the previous government.

8. On January 27, 1986, there was the shutdown of the Inco nickel mine at Shebandowan. That leaves aside the number of layoffs we are now seeing, which I will get to in a moment.

Although these shutdowns made us angry and frustrated, to some extent all of us knew they were understandable because they were mine-related. We all know the first day you put a shovel in the ground to open a mine is also the first day in the death of that mine. Everything that is mined is a non-renewable resource.

That is why for many years my colleagues from the north, particularly the member for Sudbury East, the member for Nickel Belt (Mr. Laughren) and the member for Algoma (Mr. Wildman), and I have advocated a northern Ontario heritage fund, a northern Ontario tomorrow fund, so that a portion of the taxes generated by mining development can be put into a fund to provide the capital with which to diversify our economy, especially that of single-industry-resource towns.

This new Liberal government has such a bias towards business. It wants to use that as a catchword and a code word. The government can call them RSDPs, RRSPs or whatever it wants to call them. It can call it a small business diversification fund for those one-industry towns, but it should make sure a portion of that resource tax goes into such a fund, and make it happen now.

It is still not too late. That is what we should be doing right this very minute with the rich gold developments at Hemlo. We should be taking some of that money aside and putting it into a fund such as a heritage fund to diversify the economies of Manitouwadge, Marathon and White River, all of which have had to be expanded by the Hemlo development. We should do it now, not in 20 or 25 years when there is a crisis because the gold or the ore veins have run out.

Mr. Martel: The Liberals voted against the tomorrow fund.

Mr. Foulds: My colleague the member for Sudbury East reminds me that when we put forward the amendment to introduce the tomorrow fund as part of the mandate of the Minister of Northern Affairs, now the Minister of Northern Development and Mines, the Liberals voted against it. What a wonderful thing that would be for that minister to have at his disposal. He would have a fund with which to develop something. Right now, he has to go begging to the cabinet, cap in hand, every time he needs some funds for northern Ontario.

As I said, all those shutdowns in the mining sector were devastating and frustrating. They made us angry, but to some extent we could understand them because they were in the primary resource sector, the extraction sector. They were resources that have a limit.

The situation today is even more frightening because today's attack on the economy of northern Ontario is an attack on the manufacturing sector. The most recent announcements, which affect the closure of the Great Lakes Forest Products waferboard plant in Thunder Bay, the potential closure of the Kimberly-Clark pulp mill in Terrace Bay, which would wipe out that one-industry town because there ain't no other industry there except service industries, and the 1,500 layoffs at Algoma Steel in Sault Ste. Marie and Wawa, are an attack on the manufacturing sector of northern Ontario.

4:20 p.m.

Although the government has set up a study and a committee, which I understand will be reporting shortly, to look at the future of one-industry towns in northern Ontario and although it has appointed Dr. Rosehart to look specifically at the waferboard plant closure in Thunder Bay, there is not a single, solitary, concrete step taken in the Treasurer's budget that would tackle head on, on an emergency basis, the problem of unemployment in northern Ontario.

That unemployment rate is currently 13.2 per cent, twice the provincial average. Added to those three plant layoffs, potential closures and shutdowns I have mentioned, another 4,000 people in Terrace Bay, Thunder Bay, Wawa and Saint Ste. Marie are facing unemployment. The time has come for the government to demonstrate some courage and take some action.

I suggested previously and I want to repeat now that this government should immediately introduce legislation to allow the imposition of a one-year moratorium on plant closures such as the ones at the waferboard plant in Thunder Bay and the Kimberly-Clark plant in Terrace Bay and on the massive kinds of layoffs such as those facing Sault Ste. Marie and Wawa.

Second, the government should introduce legislation to compel companies to open their books to both the workers and this Legislature. How else can they justify a plant closure? How else can we accept their justification?

Third, having allowed corporations to earn capital from our northern resources, the government must ask this Legislature for the power and authority to have some say in the direction and investment of that capital. A good portion of the capital earned in the north must be reinvested in the north.

We, the people of Ontario, have invested our tax dollars, our investment, in schools, in roads, in municipal buildings and in the infrastructure of our northern municipalities. Our investments, our jobs, our homes and our communities need to be protected. It is time this provincial government enabled our workers and our northern communities to take charge of their own economic destinies.

This government must introduce tough legislation to make the corporations live up to their responsibilities, to reinvest in our province where they have earned their profit from our resources and the labour of our citizens. That is our job as legislators. This government has to tackle this problem head on. The time of begging the multinational corporations is over. We need tough legislation now. The government has the authority; it just does not have the will to bring in the bills. It is the same with the Minister of Consumer and Commercial Relations (Mr. Kwinter) when it comes to insurance.

It gives me no pleasure to outline the bad news for northern Ontario's economy. The Treasurer himself indicated to me yesterday, however, in response to a question, that he could not guarantee the maintenance of jobs at the Sault, Terrace Bay and Thunder Bay. I can understand that, but what bothered me is that he did not even attempt to try in this budget.

In fact, both the Treasurer and Premier react in much the same way Bill Davis did to the first massive layoffs at Inco in the mid-1970s. They express concern, anxiety and even good intentions, but they do not react with understanding, and all three have shown a marked discomfort, as does the Premier, with northern economic issues.

There is a good reason for that. All of them are southerners. These three men have yet to grasp that the north is special and needs special treatment simply to get equal opportunities. They may understand that intellectually, but they do not understand it in their bones. They do not understand it viscerally or emotionally.

All the citizens of northern Ontario want are the same chance as those in the south, the same chance of an unemployment rate of "only" 6.8 per cent instead of the whopping 13.2 per cent we face. Is it not ironic that we can take pride because we have the lowest unemployment rate in the country at 6.8 per cent? As a general unemployment rate, I find that unacceptable and intolerable.

I remember, as does the Treasurer, the first speech from the throne I attended in 1971. The then Premier said the government was going to make a massive attack on the unacceptably high unemployment rate in the province. Do members know what the unemployment rate in the province was in 1971? It was 4.1 per cent. What was unacceptably high in 1971 -- 6.8 per cent -- is unacceptably high in 1986 for a province as rich as this. The overall rate of 13.2 per cent for the north must be more than unacceptably high. To us, it must be and is intolerable.

Northerners just want the same chance for health care and the same chance for their children that those in the rest of the province have; but for the people of the north to get those same chances, the government must be prepared to intervene in the economy. It must be prepared to act. It must be prepared to put the economy in gear.

If the government lets the market do its thing in northern Ontario, it is saying corporate dollars are more important than human labour. It is saying the investments by ordinary people in their homes and in their communities is less important than corporate investment, corporate dollars, corporate confidentiality and corporate profit. If the government lets the market do its thing, people will eventually have to chase those corporate dollars first to southern Ontario, then to the United States and then overseas to the Third World. Our party says no to that economic flight of capital and to forcing our people to chase those dollars for their jobs.

We in the New Democratic Party have some concrete proposals to keep jobs in our northern communities. These proposals are positive and specific, and we have spelled them out in a series of challenge documents. I could go on at great length and quote each document in detail, but I will give only examples from each. I recommend them as reading for the Treasurer, the Premier, the Minister of Northern Development and Mines and the Treasury officials.

I want to indicate as an aside that we in this party have also published economic challenge documents for other parts of the province. For example, my colleague the member for Windsor-Riverside (Mr. D. S. Cooke) has prepared an economic challenge for southwestern Ontario. My three Hamilton colleagues will publish the Hamilton challenge, which specifically outlines community-based initiatives in their community. I have seen an advance copy of this document. I am not going to release its details today, because in this section I want to deal with the northern Ontario economic challenge document published by New Democrats.

Hon. Mr. Nixon: This sounds like a leak: drip, drip, drip.

Mr. Foulds: It is very good stuff. Just as the minister does when he knows he is going to have a budget in a week, we keep the contents quiet.

1. The challenge to Sudbury, which was put out by my colleagues the member for Nickel Belt and the member for Sudbury East, is the first document in this series. In this document, they outline a series of proposals for an integrated nickel complex in Sudbury, as well as new opportunities in energy conservation, food production and processing, health care import replacement and institutional import replacements.

This is not pie-in-the-sky, abstract economic stuff. Using government documents and quoting from the resource strategy and economic analysis branch of the federal Ministry of Energy, Mines and Resources, my colleagues outlined 18 specific types and examples of mining equipment that could be manufactured in Sudbury and for which there was and is a market. Three examples include rotary blast hole drills, which are still used in the mining industry in Ontario, safety equipment and parts such as bulldozer attachments. These are all things we import into Canada at present. They are things for which there is a market and for which there could be an export market, if we develop that market.

4:30 p.m.

2. The New Democrats, as a result of that challenge issued in 1982 by my colleagues from Sudbury East and Nickel Belt, published a document called Ontario Can Work. In that document, we expanded on the idea they had for developing a mining machinery manufacturing capability as a crown corporation to manufacture not merely mining machinery but machinery, equipment and parts used in the whole resource sector.

Let me outline the rationale and details of that. While mining and forestry account for a significant portion of Ontario's economic output, neither sector provides the important industrial spinoffs that are vital to a resource-based industrial strategy. The high and growing level of import penetration in the resource machinery sector continues to act as a brake on the Ontario economy. It reduces the resource sector to one of simple extraction.

Despite the fact that Canada's major exports are forest-based products, accounting for 18 per cent of total Canadian exports, the development of the forest machinery industry has lagged far behind other countries, such as Sweden, which have a much smaller domestic base. Despite the fact that Canada is one of the world's chief mineral producers, the country remains one of the largest, if not the largest, importer of mining machinery.

In 1981, for example, Canada imported $727 million worth of mining equipment, a 229 per cent increase over the previous five years, and our annual trade deficit is about $600 million, a value of production equivalent to 7,000 jobs.

Although it is unrealistic to expect to wipe out that deficit in a short time, it is clear that specific opportunities, from open-pit mining equipment through classifiers to process furnaces, can be developed. Therefore, the New Democrats would establish a resource machinery corporation to take advantage of the opportunities for import replacement and export development in the resource sectors. The crown corporation would have a mandate to develop industrial opportunities in a variety of resource machinery projects.

For example, Canada's already weak mining machinery base is threatened by the rapid shift of the more technology-intensive end of the machinery spectrum. Ontario production, on the other hand, is being concentrated on the low technology end which will, in turn, reduce our future options.

Here is where we fundamentally disagree with the government across the way. We believe it is right for the government to get into machinery production. It is right to do that through a crown corporation, because in this instance it is the only way, as the current economic circumstances are showing, that we will develop secondary manufacturing in northern Ontario.

A resource machinery investment program would create thousands of jobs and provide new industrial opportunities in such centres as Sudbury, Timmins, Thunder Bay and Sault Ste. Marie.

3. When my colleague the member for Sault Ste. Marie (Mr. Morin-Strom) outlined an economic strategy for his community on June 13, 1985, he indicated 10 specific steps that could be taken to enhance Sault Ste. Marie's economic potential. I want to quote from two sections.

Under challenge 1, university education and research, the member said: "A well-integrated regional economy is dependent on an educated work force, and the ability to react to technological change. The cost to run Ontario's 16 universities this year totals more than $1.7 billion. That works out to about $350 for every taxpayer in this province. Compare that with Algoma University College's budget of $2.7 million. Dividing by the number of taxpayers in Algoma, we find that only a paltry $35 per taxpayer is being spent in the Sault. No wonder 95 per cent of our students have to go out of town for their education, most never to return.

"If the Sault is to meet the challenge of attracting new industrial and economic development in this technologically advancing world, we need more university programs and research facilities in fields like metallurgy, forestry, environmental studies, engineering and business administration. As a major population centre in the north, the Sault deserves a better deal than it has received from governments in the past."

The member for Sault Ste. Marie goes on to indicate the potential of the forest and furniture industry in Sault Ste. Marie: "Furniture manufacturing is a labour-intensive craft industry which develops many skills. It lends itself to small business operations and provides another opportunity to displace imported goods. Its success derives from the quality and design and marketing. A development of this industry could be stimulated by a forest products research and design centre."

My colleague the member for Timiskaming (Mr. Ramsay) issued his document entitled, An Economic Challenge for Timiskaming, in March 1986. He dealt with five specific areas: tourism, mining, forestry, agriculture and small business. In his report, he made 27 specific suggestions to help create jobs. I want to cite a few.

His suggestions to create jobs in his riding included the development of underground mine tours to attract tourists; a tour boat for Lake Timiskaming; establishing a robotics faculty at the Haileybury School of Mines; turning the Ontario Northland Transportation Commission into a true development agency; making better use of birch as a fuel wood; using new, more productive farm crops, such as canola and hard spring wheat; and establishing a stone-ground flour industry in Timiskaming.

Those are specific, interesting and productive suggestions.

Hon. Mr. Nixon: What happened to the goats?

Mr. Foulds: The goats are in Sudbury. The previous government sent them there.

Mr. Martel: They have all moved to Manitoulin Island.

Mr. McClellan: They have been privatized.

Mr. Foulds: As I said, those are only a few of the 27 specific suggestions that he had.

Hon. Mr. Nixon: Did we pay for the research that backed that up? You have too many researchers over there. Did you say two in the north and two down here and one to carry your coat?

Mr. Foulds: Does the Treasurer want to add something constructive to the debate?

Hon. Mr. Nixon: Who did you say did that? Mr. Ramsay?

Mr. Foulds: The member for Timiskaming.

Mr. Martel: Not Ramsay-Wrye.

Hon. Mr. Nixon: Oh, you mean the Mr. Ramsay you have.

Mr. Foulds: The current Mr. Ramsay.

Hon. Mr. Nixon: The one who is following your speech so closely.

Mr. Foulds: Absolutely.

Mr. McClellan: He is in committee.

Mr. Foulds: In conclusion on this section on northern Ontario, we northern Ontario New Democrats have ideas, we have specifics and we know the north's economy does not have to be as vulnerable as it is. We know we can protect the people of the north. We know we can keep jobs in the north. We know that if we had the tools, we could expand and strengthen the north's industrial base. We know we have the will. We can do it ourselves. We just want the chance to do it.

We must change our way of looking at the north. We can continue, as governments have done since this province began, to look at the north by focusing on its problems and seeing problems as a series of crises to be dealt with individually. This inevitably leads to an ad hoc approach in which we are constantly reacting to circumstances thrust upon us.

We New Democrats say there is another approach, and that is to stress the potential of the north and to see the north as an asset to the entire provincial economy. This approach recognizes that a better use of the north's resources and a diversification of its economy can mean that the north will strengthen the entire economy of the province. If we accept this second approach, it means we must not only cushion the blow of major layoffs, such as the ones we are facing now, but also look beyond these.

4:40 p.m.

In other words, let us create a developing and prospering region with stable employment, with good facilities and with a clean environment.

Therefore, we New Democrats say let us adopt programs that will lead to long-term planning at the community, regional and provincial levels. We say northerners and their communities must have more control over the decisions that affect them. We say more of the wealth created through resource development in the north must be reinvested in the north to build strong, diversified communities throughout the north. We say the provincial government must take a leadership role in diversifying the north by decentralizing government offices and by expanding research and development in northern Ontario. We say the provincial government must become directly involved in resource development.

We must add to the jobs we have, not merely protect the ones that exist.

Finally, we say that when closures or layoffs must happen, the investment of the community, the investment of the workers, the investment in our future must be protected.

I remind the Treasurer of the Premier's statement on July 2 last year, the first time he met this House as Premier. He said: "We will also demonstrate that the provincial government has the ability to move the economy and create jobs. We will not sit by and accept the waste of half a million talents."

Saying he would act on the basis of three basic principles, he said directly: "There is no single cure for unemployment. We need a wide variety of tools, including direct job creation." We agree with the Premier and we wish the Treasurer had this year. We disagree with the Treasurer. We believe direct job creation is important not only in the north but throughout our whole province, and he has none of that in his budget.

If it was unacceptable to accept the waste of half a million talents in July 1985 on accepting office, it is just as unacceptable to accept the waste of 334,000 talents in May 1986, now that they have power.

The best anti-poverty program in the world is not unemployment insurance benefits, social assistance or severance pay. The best antipoverty program in the world is a job creation program.

This year there was a buoyancy, a small tide in the economic affairs of Ontario, that if the Treasurer and his colleagues had the courage to pursue, they had a wonderful opportunity to improve conditions substantially for the poor, the unemployed and the underemployed all over our province. They could have improved conditions for retail workers earning minimum wage, for single mothers requiring day care, and they could have done something for pay equity for women in the private sector.

This government has yet to grasp the very simple, emotional and psychological truth, that loss of meaningful work means a loss of dignity, a loss of worth, and a loss of a sense of self.

This budget loses sight of the ethical principle that labour is more important than capital. Without labour there is no such thing as wealth, and without work or labour there is no such thing as creativity. The work of the artist, the work of the labourer, the work of a mother, the work of a businessman is the key ingredient in shaping our society and in shaping our very nature.

When a press person asked me the other day what was wrong with this budget, this is what I replied: "When I walked from my Queen's Park office over to my Toronto apartment near the Wellesley Hospital late one night last week, I saw someone going through garbage cans for food. That person is not just a statistic. That person is a human being." He is an individual who requires our attention. Attention must be paid to those people. Attention must be paid to the unemployed of this province. Attention must be paid to the working poor of this province.

That is what a budget should be all about. A budget should be about taking into account individual human beings. Individuals such as that man going through the garbage cannot continue to be sacrificed on the altar of some abstract thing called a buoyant economy.

I want to conclude with the words of Sir Edmond Peacock, "I shall pass through this life but once. If, therefore, there be any kindness I can show or any good thing I can do, let me do it now, let me not postpone it, nor delay it, for I shall not pass this way again."

We were at a crossroads. We had an opportunity to improve and develop the economic and social wellbeing of our province. The Treasurer and his government missed this opportunity, and we shall not pass this way again. I hope the province gets another chance. I am not sure the Treasurer will.

I want to tell him and I want to tell this House that we in this party, we New Democrats, we democratic socialists in North America, will fight again and again and again in this Legislature and in other legislatures across this country, in the Parliament of this country and on the hustings of the land until we have achieved social and economic justice, until we have achieved dignity for that man searching for food in the garbage pails of Metro Toronto. We shall not rest until we have achieved that goal. We cannot and we must not do otherwise.

Mr. Ferraro: It gives me great pleasure to rise today in support of my honoured colleague's excellent blueprint for a better Ontario. Let me initially congratulate the Treasurer and his staff for the hard work, for the many hours of work, for the patience and the ability to listen to comments and suggestions and for producing this budget which is, in my view, an excellent blueprint.

It is only fair that when people read this budget and read reports on this budget that they should know it is indicative to some degree of the man who sponsored it, the Treasurer. It is fiscally responsible and, in that light, let me say that responsibility was no more evident than on the day the budget was presented and there was a reception in this very House. That reception, I might add, included a cash bar. What could be more indicative of the responsibility that this Treasurer holds for the taxpayers' dollar than that?

Having had, as well, the pleasure of many dinners with the Treasurer, which I enjoyed immensely --

Mr. Foulds: Were they ever over $2?

Mr. Ferraro: They were over $2, unfortunately.

I can tell you, Mr. Speaker, the Treasurer has been accused of being a tightwad. He has been accused of being a cheapskate. He has been accused of being a penny-pinching farmer. The Treasurer of this province is frugal; he is not cheap. His frugality is evident. I might add, having watched the Treasurer eat, that I would much rather buy him a suit than take him out for supper.

Before I get into the specifics of the budget, I would like to make a personal comment that I think is shared by many people in this province and has been shared by many members of this House. What the opposition is going to say is automatic, irrespective of which party or which person is the presenter or what is being presented. It is automatic that it is going to be negative.

4:50 p.m.

For the next 42 years at least, God willing, that Mr. Nixon prepares these budgets, I can almost tell members now what the opposition is going to say. They are going to be negative. They will say, "It is wrong; it is bad."

I do not know what could be bad about a budget that increases taxes only on cigarettes. Some might say they should have been increased more; some might say less. The only increase to the average taxpayer is four cents for a package of cigarettes. Yet the opposition will stand up at every opportunity and say it is a rotten budget. The Treasurer and members of the Liberal Party in Ontario, myself included, do not believe everything the Tories did in the last 42 years was bad. Far from it; not everything.

It is only fair to say, quite openly, in some respects I admire many of the things the New Democratic Party has done in the past and is continuing to do. We do not think everything they do is negative. They stand up at every possible moment given to them and espouse social democracy. Their philosophy is ably announced and pronounced throughout this province, as it was by the member for Port Arthur (Mr. Foulds) this afternoon. It is a philosophy I do not believe in, but surely to goodness, everything they do is not bad, and I agree with that.

One thing in particular that bothers me about the NDP is that its members will be the first to stand up and condemn when business, manufacturers or corporations close down or lay off. There are unfortunate incidents, and we share in the concern and plight of the people who are laid off, but that is a reality. We do not believe, as they do, government can solve everything, although we try.

The nice thing about this country and this province is that we have a democracy. There is a choice, just as we have the choice of voting for New Democrats, Tories or Liberals. Profit is not a dirty word. In the pursuit of that profit, many of the social programs the New Democrats condemn or want paid for come from that free enterprise and the entrepreneurial spirit in this province.

The aspect of the budget I find particularly enjoyable is its approach to business, its entrepreneurial aspect, its free enterprise aspect. I totally agree with the Highlights booklet to the budget which states: "The 1986 Ontario budget combines social concern with common sense and a businesslike approach to the management of government."

I was happy to hear the member for Port Arthur mention that the position of the Premier, the Treasurer and the Liberal Party in Ontario vis-à-vis the free trade issue is unclear. I am surprised he had the gall to stand up and say that. Tories, such as the member for Sarnia (Mr. Brandt) and the Leader of the Opposition (Mr. Grossman), have stood up on numerous occasions and openly condemned the Premier for not taking a position on the free trade issue.

The member for Port Arthur referred to the report from the select committee on economic affairs, which was chaired so ably by my colleague the member for Kitchener (Mr. D. R. Cooke). I had the pleasure of being on that committee. There were four Liberals, four Tories and two New Democrats. We met all summer, we had dozens of submissions and we went to Washington and met with officials there. We met with every possible organization we could think of.

The report contributed to by all three parties, but supported unanimously by the Conservatives and by the Liberals -- the New Democratic Party had a dissenting opinion and made a dissenting report -- states the position quite clearly. It has been stated quite clearly by our Premier on numerous occasions and by the Minister of Industry, Trade and Technology (Mr. O'Neil) when asked the question.

I quote from page 5: "As a result of its hearings, the committee believes that a comprehensive bilateral free trade agreement with the United States is neither achievable nor realistic." That is very clear. "This belief is based upon what comprehensive free trade means. The committee's understanding is that a comprehensive free trade agreement would mean the complete removal of all tariff and non-tariff barriers to trade from all sectors of the economy. Further, it would mean that both countries would have to ensure that no non-tariff barriers be put in place in the future."

I do not understand the confusion. Perhaps the Leader of the Opposition should consult with the member for Eglinton (Mr. McFadden) in order to find out what position his party has taken.

Let me refer specifically to the unanimously supported recommendations in this report. There are 20 but I will not go through them all.

"7. The government of Ontario should be involved in any trade discussions where matters of provincial jurisdiction or interest are under consideration." The Premier has indicated that on numerous occasions. Indeed, the committee has reinforced that in the report.

"10. It is imperative that the Canadian government guarantee we do not compromise our social, cultural, regional and linguistic heritage in any trade discussions with the United States. This heritage includes, but is not limited to, government programs such as the medicare system, pension and social security programs, the system of workers' compensation boards, national unemployment insurance, regional development programs and protection for Canadian content in the nation's media." That is quite clear.

"11. Any discussions and possible agreements should specifically protect Canada's continuing right to unique social, cultural and economic policies and programs based on its own distinct needs.

"16. A trade agreement such as the auto pact, which embodies safeguards and requires companies to provide Canadian value added, is a model agreement that should be pursued." This has been reinforced many times by the Premier and the Minister of Industry, Trade and Technology.

"17. The agricultural sector should not be on the agenda for any trade discussions."

I suggest the confusion is possibly in the minds of the Leader of the Opposition and the leader of the Tory party in Ottawa, Mr. Mulroney. I suggest the confusion is probably enhanced significantly in Mr. Mulroney's case by recent events surrounding his somewhat suspect government.

Mr. Gillies: Has the member talked to Hugh O'Neil lately? He is a big one.

Mr. Ferraro: The member for Brantford asks whether we have talked to the member for Quinte, the Minister of Industry, Trade and Technology. Yes, we have. His statements are quite clear. It is obvious the member for Brantford is not even talking to his own members on the committee. Maybe I should go through the recommendations of the report once again. They are quite clear. The government's position is clear and his party has supported it unanimously. I suggest if there is any confusion, it is on his part.

We came up with those recommendations because we are concerned about the economy in Ontario, which we know is very prosperous right now, having the lowest unemployment rate, 6.8 per cent and dropping. We have created 180,000 new jobs. On many occasions the Treasurer and the Premier have stood up and said: "We cannot take credit for all that. We are fortunate to be in the province we are in, but the reality is that we are the government of the day."

5 p.m.

Our position to enhance that vitality in the province is enhanced and protected, not only in our position vis-à-vis free trade but also in our fiscally responsible, business-like budgets, as indicated by the one presented a few days ago by my honourable colleague the Treasurer. We cannot take a position with the US that we do not want to talk to them. Ninety per cent of the exports of this province go to the US; 78 per cent of total Canadian exports go to the US. Hundreds of thousands of jobs are at risk. We cannot take the position that we do not want to talk to them. We believe we could enhance that position while at the same time expanding and exploring opportunities in other countries and in other sectors of the world, specifically, the Pacific Rim. Initiatives have been taken by the Premier and the Minister of Industry, Trade and Technology in that regard. We have to talk to the US.

We are concerned about what Mr. Mulroney and his gang of men are putting on the table. There is a possibility to enhance our position and our trading prospects with our good friend and neighbour.

It should be refreshing to this House to hear somebody say what the people of Ontario are saying. They are saying quite clearly this is a good budget, by and large. We fully realize that as politicians we cannot please everybody, but when the Toronto Sun comes out with a headline on the front page that says, "Cheers, Bob," that in itself is indicative of how the people of this province will receive and have received this budget.

The people in my riding of Wellington South, which is composed primarily of the townships of Puslinch and Guelph and the city of Guelph, are telling me this is a good budget. They are telling me they are surprised a government that has been in power for roughly 10 months has been able to grasp the reins of responsibility to the degree we have. I suggest that is in large part the result of the leadership of this government provided by the Premier and by the Treasurer.

Guelph is, if I may parochially indicate, an average town. It is a university town. It is above average in its beauty.

Hon. Mr. Nixon: And in its hospital services.

Mr. Ferraro: I will talk about the hospital situation in due course.

It is indicative of what makes this province so viable. Its people are honest and hardworking. They do not hesitate to indicate their concerns, their feelings of shortcomings and their aspirations.

What the people in Guelph are saying is indicative of what the vast majority of the nine million people in Ontario are saying. They are saying: "Bob Nixon, the Liberal Party and David Peterson, you did a hell of a good job. Keep up the good work."

Mr. Speaker: I believe you are referring to the Treasurer and the Premier.

Mr. Ferraro: It must trouble those people who spent 40 years letting things such as hospitals, roads and schools crumble to see our upstart government start to rebuild from their rubble. It really must bother them.

I find it extraordinary that many former ministers, who helped destroy quality in our schools, our hospitals and our municipalities, stir themselves to such fits of outrage as they indicate their dismay in the press and in the House. How can they object to the fact that this government is trying to rectify the things that have been neglected for so many years and do so in a manner that is fiscally responsible? I do not understand that.

There is no reason to be as negative as those dissatisfied and frustrated gloom merchants. This budget is so positive, well planned and appropriate for the times that I am sure it will do us all good to look at those aspects.

Earlier, the Treasurer mentioned the health care system. I want to address that issue right now. Let us take the $850 million for new hospital capital projects. In essence, we are talking about more than 4,000 new acute care beds. In my riding alone, there is a drastic need for an infusion of capital to rebuild the Guelph General Hospital and a new St. Joseph's Hospital.

My riding has been dealing with hospital and health care issues for the past 20 years. A succession of Health ministers, including one who seems to be settling in for a long career as Leader of the Opposition, made promises to fund redevelopment. Let me quote actual fact and statements from previous Health ministers and from the present Leader of the Opposition.

This neglect of the health care system in my riding and Guelph for 20 years is indicative of the neglect in so many other communities, in so many other cities, in this province. Let me quote a couple of statements.

This historical information goes back as early as 1966. On May 4, 1972, there was correspondence from S. W. Martin authorizing a "capital project to start as soon as possible" and indicating that "capital funds are being protected to permit commencement of construction during the fiscal year 1973-74." What happened? They did not come up with the money. I will skip a whole bunch.

On May 27, 1974, Harry Worton, a man whose place in this House I had the pleasure of taking, invited the then Minister of Health to visit the hospital. The visit did not materialize.

On July 2, 1975, the then Minister of Health was generally in agreement with the master development study. Funding was unavailable in 1975-76.

On July 15, 1975, a letter to Mr. Worton, MPP, advised that "the master development study has been with the Ministry of Health since May 1974 awaiting approval in principle."

In November 1975, Mr. Worton reported that "no funds are available until at least 1978 and master plans need updating."

In an April 26, 1977, in a telephone discussion, Shirley Brett of the Ministry of Health said unofficially that $22 million was finally in the budget to build the new building, planned for 1977-78 to be built in 1979-80 or 1982. The need for immediate action for the planning and hiring of health care consultants was emphasized. It goes on.

My favourite quote is the one by the then Health Minister, the venerable and present Leader of the Opposition, the man who condemns this government for not taking action. He said, "Redevelopment has been talked about and studied for years, and in fairness to the people who have worked so hard and also in fairness to the redevelopment committee, the Health minister must be sure to give the project high priority for funding." What happened? After 20 years, it was another empty promise. If this was a high priority in his mind, what ever happened to those which were low priorities?

If we could put hospital beds in hot air, we could have housed the whole province in our promised buildings in Guelph. I am sure Guelph's experience was repeated in cities, towns and regions all over the province.

I am proud that this budget backs up our promise to those places with bucks, not bunk. My city and my constituency are happy to place their faith in this government and in the hands of this Minister of Health (Mr. Elston), this Treasurer and this Premier. Time will tell.

If members want to know who likes this budget, let them ask the people running the hospitals, municipalities, universities and school boards. Ask them how they feel about the way they are being treated. Before I came here, I was an alderman in Guelph. I can say quite openly that the previous government had no idea how frustrating it was for people to wait for its word and its handout, for its compassion in doling out their own money, the taxpayers' money, to them. It was the divine right of kings of the former Tory government that it doled out whatever it felt was necessary. By and large, if one was not Tory, one did not get anything.

5:10 p.m.

At times on city council or on hospital and school boards, we got no word until we were well into the budget process. Now we get fair warning. On November 1, they will have advance notice so they can budget properly. Everyone can plan ahead, which in itself is fiscally responsible and a tremendous assistance to these boards and commissions that have to plan. They are out of the dark; there is no innuendo; there is no having to kiss the feet of the Treasurer of the day of the Tory party to find out where they are going. There are no long-distance phone calls that will give a special favour here or there.

Let me get to some of the parts of this budget I am especially proud of. I alluded to them earlier. This budget is business oriented, which I am particularly pleased about. I have been given the honour of being named the small business advocate for Ontario and chairman of the committee of parliamentary assistants for small business.

The committee is composed of the member for Yorkview (Mr. Polsinelli), who is parliamentary assistant to the Minister of Labour (Mr. Wrye); the member for Downsview (Mr. Cordiano), who is the parliamentary assistant to the Minister of Colleges and Universities and Minister of Skills Development (Mr. Sorbara); the member for Essex South (Mr. Mancini), who is the parliamentary assistant to the Premier; the member for Mississauga North (Mr. Offer), who is the parliamentary assistant to the Minister of Consumer and Commercial Relations; and last but by no means least, the member for Waterloo North (Mr. Epp), who is the parliamentary assistant to the Treasurer and Minister of Revenue.

In the short time I have been in the position of chairman and this committee has met, I have found the business community and the business leaders, by and large, grateful and optimistic about the possibilities that free enterprise and entrepreneurship will play in the future of this province. They realize the Premier is not only a politician, but also a businessman. There is nothing wrong with making a buck, or wanting to devote time and energy to making a profit, and in the process, hiring people and paying taxes to support our social programs.

The New Democrats would say the government should get more involved. Quite frankly, on a personal basis, I say the less government involvement the better.

Mr. Gillies: So much for the accord.

Mr. Ferraro: I do not know whether the member for Brantford is in agreement with that statement.

Mr. Gillies: We did not sign a deal with the devil. The Liberals did.

Mr. Ferraro: That is very true. The member for Brantford said they did not get to sign an accord with the members of the New Democratic Party. I suggest the reason they did not is that they were not giving enough credit to the members of the NDP as far as their intelligence is concerned. The proposition the Tories were presenting obviously was not palatable, if indeed it was much more beneficial.

I gave credit to the intellectual capabilities of the NDP members when they chose to support the Liberals, a choice that is being approved of by the people of this province. Dare I say to the member for Brantford that approval was obvious in relation to the recent election in York East. Even the member for Brantford has to agree with that. We are prepared to let the people judge our actions, and they have spoken.

I want to devote some time to small business, which is my particular area of concern and a little niche I have been able to get involved in, courtesy of the Minister of Industry, Trade and Technology and the Premier. Along with the members of the committee, I will endeavour to deal in as forthright a manner as we possibly can in fostering the business aspect and the entrepreneurial spirit in this province. As has been said before, small business is big business. A lot of people do not know how big small business is. Let me point out some facts.

At the same time, it would be wrong if I did not commend and applaud the actions of the former Premier of this province, the member for Muskoka. I stand here without hesitation and say that, in my view, he was the first man who really gave small business any attention -- the attention that it needs. Having said that, I hope this government, I and the members of my committee, will be able to promote the views of small businesses to a greater degree than that member. It is really a sad fact that the member for Muskoka will be more noticeably remembered for the events of May 2, 1985, or the fact he wore a plaid jacket than for his accomplishments in promoting the ideals of small business. At this time, I wish to give him credit for that.

Ontario defines a small business as a company that employs fewer than 100 people. In that regard, there are 308,000 small businesses in Ontario. These are the latest statistics I have, which I believe are from 1985. These businesses employ more than 1.8 million people. These 1.8 million people affect the lives of more than 4.5 million people in this province. Need I say that is roughly half of the total population of this province of 9 million. Small business is 50 per cent of Ontario's private sector work force.

One of the problems of small business is that it is not as glamorous or exciting to talk about small business as it is, for example, to talk about a large corporation that is entering into a multimillion dollar program in a certain area. There is nothing too exciting about saying, as my father did and many other small business people in Guelph and in this province and country did, "I will start a small tailoring shop or a dry cleaning shop or a restaurant or a barbershop or a fast food store or a retail store or a clothing store." It is not very glamorous to talk about those things, but if one starts talking about a $400-million expansion, it is exciting, it is front-page news.

The reality is that dry cleaner, that tailor, that waiter, that cook, that truck driver, that secretary, that individual has made this province what it is. That individual has created the jobs that have brought us through one of the worst recessions in our history. Let me substantiate that fact. Between 1978 and 1982, small businesses created 89 per cent of the net new jobs in Canada. In that period, 55 per cent of the new job opportunities were generated by small business startups. In fiscal 1985 to 1986, more than 99,000 new firms were started in Ontario. Of these, roughly 34,000 will actually create employment. The rest, by and large, are holding companies for investments and/or real estate or will not employ people. Roughly 34,000 of the 99,000 will employ people. They generated more than 180,000 new job opportunities during that same period of 1985 to 1986 and half a billion dollars in new investment.

5:20 p.m.

In the last five years, 90 per cent of the net new jobs have been created by firms with from one to 19 employees. There was an actual net loss of jobs in the larger manufacturing corporations. The little guys have been carrying the freight in this province. The annual payroll for small businesses in Ontario is more than $27 billion. Of young people with jobs, 65 per cent work for small businesses and more than 25 per cent of new small businesses are owned by women. Might I add as a little tidbit that the success ratio of new small businesses in the last five years has been greater on the side of women than on men.

About 92 per cent of small businesses are in the service sector-clothing stores, restaurants, lawyers-seven per cent are in manufacturing and one per cent are in resources.

I reiterate, while it is not exciting to talk about the little guy who is opening a dry-cleaning store or a variety store or the lady who is opening a dress shop, the reality is they are the ones who brought us through the recession and they are the backbone of this province. The member for Muskoka was the first to acknowledge that fact and I give him all the credit in the world for it.

What are the specific programs in this budget that will enhance this business attitude, this business aspect, and the success or failure of small businesses? Let me start with one that is a good example of this government's willingness to listen to business experts and respond in a positive way. I reiterate that one of the first things the committee of parliamentary assistants on small business did was make a presentation to the Treasurer and his staff on the new ventures program. With their co-operation, it is in the budget and it will be greatly received in this province when it is announced in the next few weeks.

Small businesses getting started in Ontario face failure if they have poor business plans. The number one reason for the failure of a new business start-up is that it was poorly managed or poorly prepared. The second reason is that there was not enough money there, not enough cash flow. Most businesses will fail in the first five years.

I am a former banker, now a politician. There is an old story going around. Do members know what a banker is? A banker is someone who will give one an umbrella and ask for it back when it starts to rain. I am not sure I am enamoured with the definition of a politician in that regard either.

Do members know what a politician is? A politician is someone who will give one an umbrella and then ask one to pay for it. Nevertheless, I will be the first to admit that banks, by and large, will give a person $2 if he has $10.

The problem is significantly compounded for a woman or a young person. The mentality in the financial institutions is such that they are prepared to help success. Success promotes more success. However, if one wants to start something, there is a hesitancy and a resistance by the banks. Part and parcel of that resistance is the fact that most small businessmen starting out do not know how, are not prepared or do not have the capability of preparing themselves to talk to a bank.

My father went into the dry-cleaning and tailoring business. If I asked him, "Dad, did you have a business plan?" he would probably say: "Yes, I did. I go in at seven, I come home at seven and I have 15 minutes for lunch." That is the way it was in many sectors of the economy throughout this province. Today we are fortunate to have advanced to a level of education, prosperity and sophistication where the small businessman or businesswoman has an advantage.

I got off track a bit when I started talking about how difficult it once was for a woman who went into a bank. I think I can say that she would probably say to the banker, "This is my plan, this is how much money I have and this is what I need from you." I suspect that in the majority of cases the banker would say to the lady: "That is fine, madam. We thank you for coming in. We would love to deal with you and we will give you this much money, but would you take these forms home and get your husband, or your rich uncle or your boyfriend, to sign them?" It does not seem fair, but that was and to some degree is the reality.

The new ventures program is a response to all those problems. The six members of the committee for small business gave the new ventures program a very long and productive scrutiny, as did the Treasurer. We are so excited by the possibilities of this program and what it will do that it is difficult to compose ourselves. It is innovative. It is something that is not specifically attuned to the manufacturer in this province.

Most politicians in this House and most businessmen will agree that if one wanted assistance from the government -- and I am not talking about handouts, I am talking about assistance -- if one was in manufacturing, there were lots of programs. However, I am sure every member in this House has experienced trying to help the guy or lady who came into his constituency office and said: "I have a plan. I want to start a bakery." It was a small business. One tried to get him some help, to find him an accountant or, as in recent years, have him talk to somebody in the small business sector, but by and large, there was nothing. However, if one was manufacturing widgets or pens, there was a lot.

The new ventures program is innovative in that it does not preclude the non-manufacturing sector. It is exciting in that it is going to be administered by the banks. It is exciting and long overdue in that it is going to give special attention to the people in the north; there are special concessions there. It is going to reinforce the individual woman's possibilities of getting assistance in this province. There will be no bias shown. The initial response from the lending institutions is overwhelming. We are optimistic and we on this side of the House are determined to make this program work. I hope all members of all parties in this House will support and promote it.

What else is in this budget? There is more good news for business. Specifically, there are other programs. Innovation Ontario, a responsibility of the Ontario Development Corp. , will provide pre-venture capital assistance to small businesses in the high-technology field -- again the onus is on small business -- as well as assistance for licensing and joint ventures and for firms developing technology-intensive products purchased by all levels of government. To carry out its expected mandate, the ODC budget will be increased by $10 million this year.

Is that all? No. There is more for business. There are changes for the small business development corporations that the Treasurer announced a couple of days ago. The program will be broadened so that companies offering certain support services to business will become eligible for small business development corporation incentives. Support services that will be added to the SBDC program include electroplaters, foundries and milling operators and computer and architectural and engineering services. In his October 1985 budget, the Treasurer added computer software development as an eligible SBDC activity.

5:30 p.m.

Some people may ask, "Is that all there is?" No, it is not. We know people will make that little bit of extra effort and take pride in their work when they have a direct interest in the company's wellbeing. For that reason, we have copied the Quebec plan to some degree, with adjustments. The employee share ownership plan was introduced.

The Treasurer outlined proposals to encourage the use of this plan which, in essence, enables employees of small- and medium-sized businesses to receive a 15 per cent tax credit on up to $2,000 of annual purchases of newly issued shares of their employer's corporation. Such plans, he said, could "foster a stronger partnership between employers and employees by enabling employees to participate directly in the benefits of business growth."

The Treasurer also proposed to reimburse the firms involved with one third of the cost of setting up these plans to a maximum of $10,000, a plan that has come of age in this province and a plan that I believe will enhance the viability not only from the standpoint of longevity on the job, but also the viability from the standpoint of economic remuneration in acquiring more money for the employee and for the employer.

The confrontational aspect of labour, management and government is slowly being addressed by this government. They cannot always fight one another. Surely they can sit down and discuss matters of mutual benefit and concern, although not in all cases, the doctors being one.

Our commitment to small business will not end there. We have begun to meet with business leaders to hear what else we can do to help them in the areas of regulatory reform and with their concerns with regard to some of the legislation being promoted by this government. We hear tales of neglect along the way, with gasps of surprise that we are for real and that we do care how they feel.

Last week, I had the pleasure of attending, on behalf of the ministry, a function in Ottawa for a retiring chairman of the board of one of the government facilities, who is an avowed and self-proclaimed Tory and proud of it; and there is no reason why he should not be. It was a pleasure for me to be there and to congratulate him on his years of contribution to this province. The surprising thing to some perhaps was that he actually had nice things to say about this government and our Premier. In this regard, this individual was involved in technology and computers and he had nothing but praise for the Premier and the idea of his technology fund. Aside from what the Leader of the Opposition may say in the press, not all people think that what this government is doing is all bad.

There is a lot more in this budget that is worthy of praise and recognition: the technology fund, $100 million; $15 million for university research; the excellence fund for university faculty renewal, as indicated by the minister today in the House, providing 500 new faculty jobs; the timing of the payments which, as I indicated, is improved, and the community economic transformation agreements, a Tory program that is being applauded by this Treasurer and this government. It is a good program and we are enhancing it.

There is a 39 per cent increase in allocation of funds for the agricultural sector in this province --

Miss Stephenson: It is 30 per cent.

Mr. Ferraro: I am told it is 39 per cent, irrespective of what the member for York Mills may say.

It is his duty, and I admire the courage of the Tory critic for Agriculture and Food to stand up and try as he may, to say that the Minister of Agriculture and Food (Mr. Riddell) is not concerned about the plight of the farmer in this province, that he is not doing enough, and that this government is not sensitive to the needs of the farmer. The fact is there is a 39 per cent increase over the previous Tory allocation for the farmers in this province.

There is help for child care, seniors and the disabled, the start of a dental program and housing help for low-income families.

There is a broader use of lottery funds for hospitals and cancer treatment facilities. I am sure every member of this House has had people ask why the government is putting money into sending kids to Russia to play hockey, not that that is bad. The overwhelming response to this aspect of the budget is positive. People will indeed smile a little more brightly; aside from the fact that they may win $100,000 or $1 million, they will feel good, even if they lose, knowing that money is going to be allocated to health care facilities.

The most amazing thing is that this budget has no tax increases, save and except four cents for a package of cigarettes. That is amazing in this day and age. It is too bad the federal government could not accomplish the same type of thing. The response we are getting is overwhelming. I can only thank those people for their responses, and we will look forward to tomorrow.

We have even promised to change the budget procedure to give more people a chance to make their views known. We do not think we have all the answers, but we are doing our best. We are going to make mistakes; we admit that.

When I was campaigning for election I said to the people: "You are not going to agree with me all the time. I do not have all the answers. The only thing I can guarantee is that we will do our best, and you will get your money's worth." I suggest that this government, this Premier and this Treasurer are certainly giving the people of Ontario their money's worth.

I find it hard to believe that a budget that does so much for so many and leaves room for confidence, prosperity, profit -- much to the chagrin of my friends in the New Democratic Party -- and growth should be the subject of such scorn. I know the opposition feels it must be critical because that is its job, but I am sure what really gets opposition members angry is that they cannot take credit for the budget.

This is a good-news budget for Ontario and its people. I commend the members of the opposition, who can do such a wonderful acting job, keep a straight face and, yes, even work up shows of outrage when they know the Treasurer, the Premier and the Liberal Party in Ontario are doing a good job of looking after their interests.

The Deputy Speaker: Are there any comments or questions?

Mr. Barlow: I will reserve my comments for a few minutes.

Mr. Breaugh: I have a couple of quick comments. I was intrigued by the member's fascination with the business sector. It predominated in most of what he had to say about the budget. It was interesting that he did not have much to say about anything else.

I would like to hear the member comment on whether he feels the Treasurer was successful in putting forward what has always been seen as a balanced approach; that is to say, big businesses and small businesses need some attention from the government, but there are a lot of people who are not in the business field who also need some attention.

I am afraid that by not addressing those concerns the member may leave the, I hope, mistaken impression that the government is interested only in the business side of the equation and does not care about the trade union movement as a whole, about women as a whole, about people who are on social assistance programs, about people who are unemployed, about university students, about the very young and about the very old -- in other words, everybody else in society. At the end of our little question-and-answer session, I would like to give the member an opportunity to correct the record, so to speak.

5:40 p.m.

Ms. Bryden: Did the member for Wellington South (Mr. Ferraro) hear the question posed yesterday by the member for Ottawa Centre (Ms. Gigantes)? She asked whether the budget included sufficient money to ensure that equal pay for work of equal value would be introduced into the whole of the public sector and not just the very narrow part covered by the present bill. We would also like it to be extended to the private sector.

The member may not be aware that right now the Equal Pay Coalition is celebrating its 10th anniversary out front, with a display of supporters and balloons. They are hoping it will not take 10 more years for this House to achieve equal pay for work of equal value. I want to present the member with a balloon from the coalition.

Mr. Breaugh: Do you want a balloon, Mr. Speaker?

The Deputy Speaker: The question of whether this is in order is really dicey. Since we have had ties and cornflakes, I suppose balloons are not too extreme. Are there any other comments or questions? Is there any reply from the member for Wellington South?

Mr. Ferraro: Yes. In the two minutes allocated to me, I would like to reply.

First, I want to thank the member for Beaches-Woodbine (Ms. Bryden) for her generous gift, which brings the question to mind: Were there no red balloons out there? Second, contrary to what a lot of people may think, I am positive the hot air in that balloon was supplied from artificial sources and not by any politicians in this House. I thank the member for that gesture.

In response to the member for Oshawa (Mr. Breaugh), he is absolutely correct. I was preoccupied with the business aspect of the budget. If his impression of my presentation was that it was business oriented, he is absolutely correct. It was, although I did allude to some other programs, possibly not to the same degree the member would have liked. On reflection, I suggest that many of the programs the Treasurer has in his budget deal with other issues involved, such as the labour movement, social issues, health care issues, low-cost housing and, indeed, the social requirement. It is a balanced budget, but I make no apology because my presentation was business oriented.

To the member for Beaches-Woodbine -- and I will have to get her a suitable gift in return -- I heard her response in support of the equal pay legislation my government has brought in. As the small business advocate --and as I am sure the member and every member of this House is aware -- we have concerns in the business community about the equal pay legislation proposals. I fully intend to make my government aware of those concerns and I hope appropriate legislation will be put into place to satisfy the worthy organization that was so kind as to produce these balloons.

Mr. Breaugh: Actually, it looks as if the member for Wellington South has been joined by an identical twin.

Mr. Ferraro: The member for Oshawa is absolutely right.

The Deputy Speaker: As the member for Cambridge starts his speech, perhaps the member for Wellington South might remove the offending balloon to the lobby, please.

Mr. Barlow: The balloon does not offend me as the next speaker. As the member for Wellington South said, perhaps the balloon is not the right colour. It should be blue. I want to correct the member who suggested a different colour, one we see too much of around the chambers in this day and age.

I will start off my address to the budget by saying, in my opinion -- and I think most members of my party and of the business community agree -- this was a very disappointing budget. It was disappointing to the extent that, with the buoyant economy we have at present, the remarkable recovery that Ontario has made from the difficulties of the past two, three or four years, we have an opportunity to address a major concern in the province, and that is the deficit.

Mostly because of the good management of the previous government, Ontario was the beneficiary of about $2.6 billion in windfall financing that the government had to develop a strong budget, not only to look at the deficit and do something meaningful about it, not a paltry $85 million --

Mr. Breaugh: On a point of order, Mr. Speaker: It is possible this may turn into an interesting speech, but I am not sure there is a quorum present. Can you assist me?

Mr. Speaker: You are correct. There is not a quorum present.

Mr. Speaker ordered the bells rung.

5:47 p.m.

Mr. Barlow: I thank the people who recently joined the audience to hear this speech. I hope the government members in particular will take heed of what I have to suggest in the next three quarters of an hour or so.

I was referring to the fact that the deficit was not addressed in a meaningful way by the Treasurer. He had an opportunity to take advantage of the good management of the previous government that brought us through very difficult times and up to the time when even the Liberals can bring in a good budget.

We cannot take credit for all the advantages and the windfall the government received. There are other contributing, external factors. Falling interest rates, lower oil prices across this great country and an improved American economy were additional factors that had a lot to do with it.

This budget has a spending rate of somewhat twice the inflation rate we are now enjoying. It brings to light the fear I have been expressing that the Liberal government would use this unprecedented windfall to buy public favour with trendy programs designed for political porkbarrelling. If I might borrow a quote from one of yesterday morning's newspapers, "Treasurer Bob Nixon gave the consumer a peck on the cheek and a mortgaged future."

5:50 p.m.

He had an opportunity to do otherwise. In the economic outlook in the budget document, he has projected that Ontario will have a growth rate of about 4.2 per cent over the next year. All other economists are projecting somewhat higher than that; they are somewhat more optimistic than the sceptical Treasurer we have. They estimate as high as 4.9 per cent in economic growth. The difference between the 4.2 per cent, the lowballing of the Treasurer, and the 4.9 per cent of those of the more optimistic economists of the province, as I understand it, could represent anywhere up to an additional $900 million, if the upper limits are more realistic.

Mr. D. R. Cooke: Who are the highballers?

Mr. Barlow: The highballers included the Conference Board of Canada. This is an organization that always received considerable criticism from the Liberal Party when it was sitting on this side of the House, saying the board was never accurate and that it was always low in its estimates. Now the Treasurer is ignoring the board's suggestion.

Another projection I should point out is that of unemployment. Of course, any unemployment is clearly unacceptable, and there is no argument on that. However, the Treasurer has suggested a projected unemployment rate of 6.9 per cent. Unless I am mistaken, I believe the current unemployment rate is 6.8 per cent. It would appear the Treasurer is projecting an increase in unemployment. I hope he is wrong in that projection as well.

As our party's representative and critic for small business, I waited with bated breath to see exactly what the throne speech offered and, after that disappointment, to see what the budget would bring forth for Ontario's businessmen; something that would allow businessmen to better compete instead of being fearful of what the government would do next in an anti-business way.

We had a bit of an enjoyable history lesson, certainly factual, from the member for Wellington South in explaining and giving us all the facts and figures about small business. I do not question any of them. I think that is exactly what is taking place. He has those figures at his disposal; I would not dispute them.

Small businesses have been asking for an extension of the tax holiday from the current three years. I would have thought the Treasurer might have addressed that. They have been asking for a growth incentive plan aimed at reducing the aggregate burden of payroll levies, which impedes the growth of small business. Business wants tax incentives rather than some piddling programs that seem to conflict and confuse the businessman and businesswoman of this province.

Most business owners, certainly small business owners, have neither staff nor resources to look into all the bureaucracy-creating programs that the government seems to dream up. I do not for a moment suggest our government was lily white on that, but I do not see where this present government is changing that in any way, shape or form.

When a member of my staff recently called up the Ministry of Industry, Trade and Technology to find out the fundamental differences in a few of their programs, the counsellor was unable to differentiate between the various programs.

Small business has had almost a year of being ignored and antagonized by the Liberal government. In their desire to please their NDP friends, they have proposed and introduced a lot of legislation that affects small business in a somewhat negative way. An example of that is the Retail Sales Tax Act as it affects the fast food industry. After the October budget, we had a breath of fresh air. We had a quarter of an election promise. The election promise was to eliminate tax on restaurant meals under $4. At that time, the limit was brought down to under $1. That caused great confusion to the restaurant business, to McDonald's, the A & Ws and the small ma-and-pa stores of this province. Those who had computerized cash registers were able to get them converted. It took time because everybody wanted it done at the same time. Staff were eventually trained.

Mr. Speaker, if you will allow me to digress for a moment, a number of the members during McHappy Days recently had the privilege of operating the cash registers. I was doing fine pushing everything until somebody came in and ordered only a coke, and I had to put tax on that. I am glad it was not I who had to be trained because I do not profess to be able to run those machines with any amount of accuracy. I had to call on one of the young people behind the counter who was more familiar with those machines than I was and ask what to do.

All those people had been trained and had been doing it for several months. Now they have to be trained all over again to go through the same thing so that this government can claim it has been able to achieve half an election promise as opposed to a quarter.

Another thing that business in general, certainly small business, has been very concerned about is the insurance crisis we are facing in this province. Because of the insurance problems they are having, many businesses fear collapse. Some actually have collapsed or folded up because they have been unable to afford the insurance. I will talk more about that in a little while.

They were also concerned about how first contract legislation would give the upper hand to the big unions of the province. They felt they might not be able to operate their businesses and negotiate meaningfully with their employees. The proposed strengthening or introduction of wrongful dismissal legislation also puts fear into businessmen. It makes them concerned about whether they should hire additional people. If business people have problems with employees, they do not want to dismiss them wrongfully. They have to know they are doing it for good and proper reasons.

Another concern is the limit on overtime pay, which could throw the small business community into chaos. Many small businesses operate with the co-operation of their employees to put in the few extra hours that are required. I am not suggesting for a moment that overtime is not abused by employers in some of the larger corporations, but it affects the small businessman in a very different way than it affects the big employer. That is something the small business community is concerned about.

Pay equity is another piece of legislation coming on stream that has many people concerned. The concern is not related to whether two people performing the same sort of job would be differentiated between. The concern is whether a bureaucrat or a committee is going to suggest that A is worth as much as B and not let the market forces take that into consideration.

What the business community feels, and I echo this, is that it is a matter of education at the elementary school level, so that every girl who graduates from high school and/or university is not going to go into the same channel, the ghetto that has been referred to in the past. Girls should be encouraged to go into some of the skills that are crying out for trained people.

6 p.m.

When the Honourable Flora MacDonald was in Cambridge recently, she visited Babcock and Wilcox and suggested bringing unskilled, untrained welder-fitters into that corporation for training. I forget exactly what the ratio was, but about one out of every three coming in for retraining was to be a woman. When they finish their course, they will be extremely well paid individuals and receive the same pay as their male counterparts.

When we go into the budget, there are a few things about which concern arises. There is the new ventures program to which the member for Wellington South referred. On the surface, it sounds to me like a good program. There is a concern that the little person starting a tailoring shop, a dressmaking shop or a bakery may not have the initial $15,000 that is required. The banking community perhaps is not prepared to loan the person that money. These are things that I hope will be addressed. It is for newly established businesses, and we realize that. The member for Wellington South offered to give us all the details he possibly could on this program. I am sure many of them are still to be worked out, but I am pleased that it is going to serve not only the manufacturing industry but also the service industry. I caution the member, there is concern that everything is not rosy. People want to know what the details are.

Another program that requires clarification of details is the employee share ownership plan. On the surface, it sounds as if it could be a good program, providing there is a sufficient number of employees to make it worth while for a company to get involved in this program.

In talking to some of the business associations, I have learned their concern is that the cost of getting into a program such as this would far outweigh the advantages of being in it, as far as the employer is concerned. It would not be practical for anybody with fewer than about 15 employees. If there are more than 15 employees, it may become practical. The restriction of $2,000 per employee may or may not be a problem.

My friend the member for Kitchener is sitting right in front of me. I welcome him to this side. It is good to see him here. Last evening my friend and I took part in a television panel discussion on the budget. He was suggesting to the people of the Kitchener-Cambridge area who were watching that interesting and exciting show that this was a great program. It could be a great program. We do not know. We have to see a few things.

Did the member get a lot of phone calls on that? He did. Great.

We had a good program there. My friend said last night, "I have not heard from anybody who disagreed with the thrust of the budget," but I was quick to remind him that the member for York Mills gave quite a speech yesterday. He was in the House and he heard most of it. I think it would be fair to say she did not totally agree with the budget.

An hon. member: I did not take her seriously, though.

Mr. Barlow: The member had better take me seriously.

That is another program which, on the surface, sounds like a good program. I am looking forward to seeing the details, but I hope it will be addressed in consultation with those who are apt to be implementing such programs.

I should also mention that I realize it is a $50-million upper limit that a firm would have as a gross margin to involve itself in the program. In many cases, $50 million would be more than ample in the small business sector, but there might be some larger businesses that would also like to participate. I suggest the upper limit should be looked at. The $2,000 per employee should also be looked at. Perhaps as time goes on we might have an opportunity to recommend a different figure.

The introduction of the small business development corporations program by this government a few years ago was an extremely successful and opportune program for business to get together with a joint venture. I am glad to see the program has expanded into the service sector.

Mr. Speaker, you may have read in Hansard that I suggested during the estimates of the Ministry of Industry, Trade and Technology that the program should be expanded into the service sector. I would like to see it go further than what is currently being proposed. I would like to see it go into areas such as the construction industry and the bakeries, as my friend the member for Wellington South was talking about. I would like to see it go into the trucking industry. Somebody involved in the trucking industry is not able to approach that sort of program.

In the throne speech -- I realize we are talking about the budget and I am still on the budget -- we had the term "world-class society" mentioned on a number of occasions. Also mentioned were the statements "steer Ontario into the forefront of economic leadership and technological innovation" and "ensuring Ontario's ability to compete in changing internationally competitive markets." These are wonderful visions that we all have, but they are just words -- empty words -- if there is not some understanding of what it takes to turn these visions into reality. They are just empty words, and the government's initiatives and actions serve to nullify any hope of these visions becoming realities.

This past weekend I had the opportunity to be at a policy conference of the Progressive Conservative Party of Ontario conducted in Ottawa. I sat in on the economic development session, and one thing that was loud and clear from those people --

Hon. Mr. Bradley: Was Claude there?

Mr. Barlow: He was there. We had a good turnout. My friend the member for Lanark (Mr. Wiseman) was there. There were many people from eastern Ontario, where we have traditionally done so well at the polls.

Mr. Philip: What about Otto Jelinek?

Mr. Barlow: No, this was a provincial conference. I am sure Mr. Jelinek would have been there, had he been invited.

Mr. Wiseman: He would have brought a lot of good ideas to it.

Mr. Barlow: He would have been able to help with input.

Mr. Speaker: There will be time for comments and questions following the member's presentation.

Mr. Barlow: There were a good number of small business operators in that economic development session. They expressed their main concerns as follows: "Get government off our backs. Let us operate our businesses; give us less regulation in our businesses and fewer forms to fill out. We want to see fewer giveaways by government." They felt many of the programs at all levels of government are not at all necessary.

Mr. Philip: You were part of the delegation of the Ontario Trucking Association that demanded regulation in the trucking industry.

Mr. Barlow: I will get to that in a moment.

Mr. Philip: They want regulation in their own industries and free enterprise in everybody else's.

Mr. Barlow: I am supposed to be ignoring those interjections, and I am trying very hard to ignore them.

Mr. Speaker: The member for Etobicoke (Mr. Philip) is hard of hearing.

Mr. Barlow: On the subject of retail sales tax, I talked about --

Mr. Philip: On a point of privilege, Mr. Speaker: I could not understand what you said. Would you mind repeating that?

Mr. Speaker: A few moments ago I suggested that any member, other than the member speaking, would have the opportunity to make comments or ask questions following the member's presentation.

Mr. Barlow: Before that point of privilege cropped up, I was talking about the Retail Sales Tax Act. I mentioned previously how the fast food industry is affected and concerned every time the Treasurer gets a whim to increase by 25 per cent an election promise that affects that industry.

6:10 p.m.

While talking about election promises, I should mention a couple of promises that still have not been included in this budget. I would have thought that with all the money he had at his disposal, the Treasurer might have attempted to attack these promises. One is the elimination of Ontario health insurance plan premiums. I am sure that by this time the people of Ontario who voted for the Liberal Party would have been looking forward to the elimination of OHIP premiums, or at least to the beginning of a reduction in them. That did not happen.

An hon. member: They never keep their promises.

Mr. Barlow: That is right. The people of Ontario are going to remember these things. There are a few other election promises I am sure the people of Ontario are going to remember.

I saw in this morning's news that the promise of beer and wine in the comer stores might be modified. It might be thrown at the poor, bedraggled municipal politicians. In Kitchener, there can be beer and wine in the corner stores if the Kitchener council accepts it, but in Cambridge there cannot be. This is going to throw the consumer of those products into total confusion and I have been known to have the odd bit of consumption from time to time. It will also have people running back and forth across municipal boundaries so they can benefit from their thirst.

An hon. member: They do not want to make a decision.

Mr. Barlow: That is right; they find it very difficult to make a decision.

I was at the all-candidates' meeting in York East when that idea first came up. I must give the member for York East (Ms. Hart) credit for suggesting that. I do not think it was particularly well received that evening. I recall when, on the stage, that member -- and I want to welcome her to this assembly and congratulate her on her win -- right on the spur of the moment when it was getting a little hot and a little heavy, came up with that thought. Now it appears it might be party policy.

In addition to being gravely affected by the same things that affect business owners throughout Ontario, the constituency of Cambridge -- and I like to put in a plug for my own constituency -- has another problem that has not been properly or adequately addressed in the budget. It is that of skills training.

We read about the extra $50 million of new money that is being put into the skills development program. However, at a recent meeting with labour leaders of the Cambridge area in my constituency office, there was unanimous concern about the plight of many of the young people in our area, and not only young people but also older workers. I will deal first with the younger person.

These labour leaders spoke of their own children, who had struggled to get a decent education only to find there was no place for them to work. One of the union presidents spoke about his 21-year-old daughter. Another chap spoke about his 19-year-old son. Neither had ever been able to get a job; the work was not there. At the same time, while this is going on, there are employers who are absolutely desperate, to the point of having their businesses threatened, because they cannot get trained, skilled people, particularly in the metal-working trades.

Machinists and tool-and-die makers are in very short supply. In all the high schools in Cambridge that have industrial or training courses, there are only 30 students enrolled in shop programs. At this very moment, there is a shortfall of 265 machinists and tool-and-die makers in Cambridge alone. There are that many jobs on the list.

It says something for our inadequate apprenticeship training program. It indicates something our system of schools and otherwise is not addressing. Young people, male and female, are not encouraged to get into those trades, which, incidentally, are very well paying in most cases. Probably many of them would be making more than a politician in these buildings.

Hon. Mr. Bradley: That is not difficult.

Mr. Barlow: That is right; that is not difficult. At the same time, the industrial labour leaders were also talking about the concern and the plight of the older worker, many of whom were laid off during the recession because of the shutdown of plants or became redundant because of changing technology and are unable to get work.

Hon. Mr. Bradley: Do they make bow ties in Cambridge?

Mr. Barlow: No, I have to get mine at the Royal York Hotel. There is a good men's shop there. That question was asked of me during my maiden speech in this House and I had the same answer at that time.

The plight of the older worker has to be addressed. I know there is $50 million of new money for training or retraining. The other money is there from the Board of Industrial Leadership and Development program, which was managed quite capably by a former government.

These programs are required. Of the money that is in the skills development program, I am sure the $15 million which has been pledged to Toyota for retraining by the government is going to come out of there. That is good news for Cambridge and it will be helpful not only to Cambridge, but also will affect the whole Waterloo region. Wellington and Brant counties will benefit from the work force coming in to work at the Toyota plant when it starts its operation in two years' time.

With respect to training, there is hardly any point in developing a world-class widget if we do not have widget makers trained to help manage this program.

I would refer to a void in the budget. I notice absolutely no mention was made of the municipal transfer payments, the unconditional grants and conditional grants that are transferred to municipalities. I believe something like a four per cent increase was allocated to the municipalities this year. However, in the area of unconditional grants, I recall over a year ago now when we were all hot and heavy in our election campaign, I was asked to appear before the Cambridge city council to explain why Cambridge had received only two per cent for the 1985-86 year when the year before it received 2.5 per cent. When it received the 2.5 per cent increase, I was asked to set up a meeting, which I gladly did, with the then Minister of Municipal Affairs and Housing. We went down to Cambridge, and together with the mayor and the members of council, we laid our cards on the table at that time. I participated in the meeting. The grant went down for two years. We now have a new government and, instead of a 2.5 per cent increase, it is now down to a 1.7 per cent increase in the unconditional grants.

Miss Stephenson: Toronto received 9.4 per cent.

Mr. Barlow: Toronto received 9.4 per cent? I believe Kitchener received something like 5.6 per cent. I know it is a different ratio and a different relationship. My friend the member for Waterloo North is not here. They got around nine per cent. There is a formula. I understand the formula and I am not going to question the formula. I am questioning the amount. After being so critical in the past of these unconditional grants, the government has gone down this year on that particular item.

6:20 p.m.

Let me talk about the trucking industry, something about which I have a little bit of knowledge. The trucking industry and those who operate trucks in this province -- not only the trucking industry, but those who operate private trucks, people who deliver food to the supermarkets, clothes to the clothier and all of those commodities we buy -- are now going to pay a seven per cent sales tax for the larger trucks. That sales tax was eliminated during the 1983 budget to help that industry bounce back from the recession, something that had been extremely difficult for them to do. They were hit with many increases, licenses, gasoline tax and, more important, an increase at the pumps on gasoline and diesel fuel. That was giving them a little break that made them a little more competitive with the railways. The railways, being federally controlled, get all kinds of subsidies which the trucking industry does not. They get a tax break from the federal level on their capital equipment purchases. This was something to help the trucking industry to compete.

What happened when the budget was brought in the day before yesterday? At the stroke of a pen, as of the end of this year, the tax will be required to be paid, not only by the commercial truckers, those who are doing it on a for-hire basis, but also by the private carriers, most of whom deliver the food to our stores. If they are going to buy a new truck, they can rush out this year and buy it and not pay the tax on it; that is fine. Next year they will not buy the truck. It is going to affect the whole economy. It is an extremely regressive step.

Obviously, the Treasurer did not want to help the motoring public in any way, shape or form, because many of us in this Legislature have submitted petitions from members of the Canadian Automobile Association asking for a decrease in gasoline prices. They are asking for a very moderate increase, something well out of line with what the price would be had we still been on the ad valorem system.

The Liberal government was anxious to remove the ad valorem tax, in spite of the cry from not only our party but also the government's friends to the left, who wanted that 8.6 per cent gasoline tax increase lowered. We managed to get it lowered to 8.3 per cent. If we were still on the ad valorem system, the motoring public would now be paying much less. Those are things the Treasurer should realize. I am sorry he is not here to hear this eloquent speech. Perhaps I can read it to him over the phone tonight.

Hon. Mr. Bradley: I think he has it piped into his office.

Mr. Barlow: I am glad to hear that.

The other thing that is hitting the trucking industry more than many other industries is the insurance crisis. There is documented evidence that some truckers have been hit with a 1,400 per cent increase. All of these things together contribute to an unhappy trucking industry.

I touched on the gasoline tax. There are a few other points I wanted to cover but I should get into a summation of what I have been trying to bring together.

The general public always feels a little apprehensive about any budget coming down because it fears there will be massive general tax increases, gasoline prices will go up or there will be higher sales taxes. Those things did not happen this time -- we are thankful for that -- other than an additional tax on cigarettes.

The public will probably think there is reason for celebration but, in the Treasurer's own words, he maintained, enhanced, continued, combined, reorganized, reshaped and reviewed existing programs when, with the embarrassment of riches the government actually had to work with, the deficit could have been wrestled maybe not to the ground but certainly wrestled down. It had every opportunity to do that.

It could have decreased the gasoline tax, as members of the CAA would like. It could have brought forward some more substantive programs to deal with the critical areas of housing, child care and the health care system. While each of these areas was given lip service in the budget, there was no sense of urgency. Unfortunately, there is a very long lead time in the preliminary planning stages to actually deliver many of these facilities.

Mr. Speaker: Responses or comments or questions?

Mr. Philip: I have both comments and questions. I am not going to comment on the whole speech, but I want to comment on the trucking industry part of it. The member was a member of the Ontario Trucking Association, the very association that was so annoyed with the deregulation policies his government was trying to bring in that the trucks on the highways had bumper stickers that said, "Snow must go."

That had nothing to do with meteorological forecasts. It had to do with the then Minister of Transportation and Communications, Mr. Snow, who was doing such an abominable job under the Conservative government for purely rigid ideological reasons, the same kinds of reasons that prompted the destruction of a large part of the trucking industry in the United States, to deregulate.

Luckily, we fought back. With the help of the Liberals who had changed their minds about deregulation, that government came around to a sensible point of view. If ever a policy was going to hurt the trucking industry in this country, it is free trade. If we have completely open borders, it will hurt the trucking industry immensely. It is the member's federal Conservative government in Ottawa that wants this completely open border with the deregulations and with the gypsy operators in the US coming around and ruining the trucking industry in the province.

It was the Conservatives who added the ad valorem tax that took away considerably from the little bit of profit that some of the trucking companies were earning. Where was the member when the Conservatives put on the ad valorem tax that hurt the very industry of which he was a part? If there was ever an anti-trucking government, it was the previous Conservative government. It is not by accident that the Ontario Trucking Association was constantly --

Mr. Speaker: Order. The member's time has expired. The member for Kitchener, for up to two minutes.

Mr. D. R. Cooke: I would like the member for Cambridge (Mr. Barlow) to answer three very basic questions. First, with regard to Ontario health insurance plan premiums, during the election campaign we heard from the Conservatives that they were in favour of OHIP premiums and wanted them to continue. Now, as of this budget, I hear nothing but "How come you are not doing it more quickly?" Where does the member stand? Is he in favour of OHIP premiums or is he against OHIP premiums? I would like to hear his answer.

Second, with regard to beer and wine in the corner stores, I gather from what the member is saying he does not trust the people of Cambridge to make a decision about whether beer and wine should be sold in their corner stores. Shame on him for that.

Third, the member talks about the predicted growth rate for the province and seems to be suggesting that somehow we have low balled it. I note we predicted the growth rate for the whole of Canada would be 3.5 per cent and for Ontario 4.2 per cent. We are suggesting this is the fastest growing province in the country at present. Where does the member stand on Canada's growth rate?

Hon. Mr. Bradley: I would like a brief opportunity to respond to the member for Cambridge. As representative of a constituency, the member likes to draw attention, as he appropriately should, to problems challenging his constituency, and he has done that.

I find it intriguing that the Progressive Conservative opposition seems to have three positions it wants the government to take. I think they have to choose one of the three, or even two of the three. Their leader has stated -- and I heard it echoed in today's speech by the member for Cambridge -- they wanted the deficit reduced. In fact, their leader suggested the deficit should be wiped out and this was the time to do that.

Then I heard representations made on the other side for adding expenditures in certain areas. They want to see the government spend more money in a number of areas, particularly to create jobs, and I think everyone in the province is concerned that we get as close as possible to full employment. On the one hand, they want the deficit decreased or wiped out and on the other hand, they want to spend more money for various reasons and on various programs.

The third aspect is, while trying to do this juggling act, as the Treasurer has to, they are asking him to cut revenues that might be available to the government. I do not think it is possible to have all of those.

If that party chose one and said, "We think it is most important to eliminate the deficit," I could understand what it is saying. However, when they want us to do all three things, that is quite impossible. It really speaks to the fact that there is no consistent Conservative philosophy any more. At one time I used to at least admire the fact that the Conservative Party had a philosophy: that the government cut the deficit and that it did not spend money to be involved in a number of innovative programs except at election time. Now I find out all of that has disappeared. I would like the member to explain that.

Mr. Speaker: As it is now 6:30, the member for Cambridge may wish to adjourn the debate and respond next Tuesday.

Mr. Barlow: I am prepared to move the adjournment of the debate and have everybody return on Tuesday next, when I will be glad to respond in kind.

On motion by Mr. Barlow, the debate was adjourned.

BUSINESS OF THE HOUSE

Hon. Mr. Sweeney: I would like to indicate the business of the House for the coming week. On Monday, May 19, the House will not sit because of the Victoria Day holiday. That is a gift from the Treasurer.

Tuesday, May 20, we will continue with the budget debate. Wednesday, May 21, will also be budget debate. Thursday morning, May 22, we will be dealing with private members' ballot items standing in the names of the member for Erie (Mr. Haggerty) and the member for Lincoln (Mr. Andrewes). On Thursday afternoon, we will continue with budget debate.

The House adjourned at 6:32 p.m.

15 mai 1986