Journal des débats 1986-déc-08 | Assemblée législative de l'Ontario

Mr. Gordon: My statement is addressed to the Minister of Health (Mr. Elston). I want to tell the minister how disheartened and displeased I am with the recent announcement made by him with regard to the number of chronic care beds that are going to be provided in the Sudbury region. Surely the minister realizes that Sudbury has become the medical referral centre for northeastern Ontario. The number of heart operations and procedures taking place at the Sudbury Memorial Hospital, along with the recent announcement of our cancer treatment centre, is going to require many more acute care beds.

The problem, as we see it in Sudbury, is that the minister made a decision to provide 60 chronic care beds in the Sudbury region, when in 1982 a report made it very clear that we required 100. I urge the minister to reconsider. We have a crisis in the Sudbury region. We have ambulatory patients who are left in the corridors because there are not enough acute care beds. People have been turned away from hospitals because of a lack of acute care beds. It is absolutely essential that the minister reconsider his position and re-examine the situation in Sudbury.

RIGHT LIVELIHOOD AWARD

Mr. Mantel: Dr. Rosalie Bertell, the Toronto nun who has been fighting nuclear power and nuclear weapons for much of her life, is receiving the Right Livelihood Award today for her outstanding work in promoting environmental health. The award of US$25,000 is being presented at the Swedish parliament.

Dr. Bertell, a Toronto resident, has been working in the environmental health field since 1970. She is the noted author of No Immediate Danger: Prognosis for a Radioactive Earth, and is president on the board of directors and director of research for the International Institute of Concern for Public Health, which is based in Toronto.

The Right Livelihood Foundation is a private foundation based in the Isle of Man. It was founded in 1980 to supplement the Nobel prizes, which is why the awards are referred to as alternative Nobel prizes. Award winners are selected by an international jury. Awards are given to those who demonstrate practical and exemplary solutions to the most urgent problems of the day.

A former cancer researcher, Dr. Bertell started a medical assistance program for natives of the Marshall Islands in the South Pacific who were affected by the radiation produced by American nuclear testing. She has fought against nuclear-waste dumping, from the radioactive soil of the old dump site on Scarborough's McClure Crescent to the Nevada Mines where Navajo Indian miners dig for uranium.

Her health advocacy concerns also include the effects and consequences to nearby residents of an abandoned sulphuric acid plant near the Serpent River, Ontario, a nuclear production facility. I want to congratulate her.

EDUCATION FUNDING

Mr. Reycraft: During the campaign for the second leadership convention of the Progressive Conservative Party last year, the member for Don Mills (Mr. Timbrell) said the real issue facing the party was selecting leadership the members could trust. I would assume he was trying to tell all of us something about one or both of the other candidates.

After listening to the Leader of the Opposition (Mr. Grossman) on Provincial Affairs Saturday night, I have a better appreciation of the concerns of the member for Don Mills.

The Leader of the Opposition said, "The Liberal government's support to our schools this year reached an all-time low." I want to remind the honourable member that this government's support for education, contrary to what he told the Ontario public on Saturday night, is higher than provincial support has ever been in the history of Ontario.

I want to remind him that last year, with inflation at about four per cent, we increased the operating grants to school boards by 5.4 per cent. This year, with inflation at slightly more than four per cent, we will be increasing the regular operating grant by six per cent to $3.4 billion. In the important area of capital grants, we have more than doubled the provincial support since we took office a year and a half ago. When we took office, the ministry capital grants were at $67 million and had been flat-lined for several years. We increased that figure to $107 million in 1986 and the minister recently announced it will be $147 million in 1987.

ENERGY INNOVATION AWARDS

Mr. Stevenson: I would like to congratulate Robert Smith, president of Eneroil Research Ltd., formerly of rural route 1, Pefferlaw, and now living in Whitchurch-Stouffville, who has just won the New York State Governor's Award for Energy Innovation for 1986, and last week also won a United States Federal Energy Innovation award. These awards are for the development of a very high efficiency furnace to burn heating oil.

Because of sloppy handling by the Ontario Energy Corp., Eneroil's business plans have not gone as expected. Last week the Ontario Energy Corp. decided to unload its shares and, as a result, the bank moved in on Eneroil Sales.

This has resulted in the cancellation of an order of 475 high-efficiency furnaces by an American company. It had previously received 825 furnaces. To date, 13 people have been put out of work in Hunter Enterprises, Orillia, with the layoff possibly totalling 30.

Is this the way the government intends to handle award-winning entrepreneurship in Ontario? Does this government not care about the job losses? Is it the mandate of the Ontario Energy Corp. to sell a portion of its technology to Americans? Mr. Smith would have appreciated a small portion of the $17.5 million that went to Abe Schwartz, a buddy of the Premier (Mr. Peterson).

JOBS IN AUTOMOTIVE INDUSTRY

Mr. D. S. Cooke: Last week, General Motors of Canada announced it would be laying off nearly 400 employees at the GM trim plant in the city of Windsor. I believe this is the tip of the iceberg.

At the same time, General Motors in the United States worked out a settlement with Ross Perot which, as part of his severance package, works out to $1 billion in cash to Mr. Perot to get him off the board of directors. The money going to Mr. Perot is 50 per cent greater than the savings General Motors can anticipate from closing down nine factories and laying off 29,000 workers.

The payment to Mr. Perot is equal to an extra $162 per car produced by General Motors in one year. Close to 20,000 GM workers could be kept on the payroll if the money went to workers instead of this high-rolling billionaire. If the money spent by buying out Mr. Perot was instead spent on working people, they could buy cars and boost the demand for cars by 63,000 vehicles.

What we need in this province is an examination of content legislation and a pushing of the federal government harder than ever for content legislation to save jobs. We need legislation that will, for the first time, put in position justification requirements and a reform of the severance package as well as adequate notice. The laws to protect workers are inadequate.

ROTARY AWARD

Mr. McGuigan: I wish to draw members' attention to the member for Algoma-Manitoulin (Mr. Lane). On Saturday last, he was honoured by the Gore Bay Rotary Club, when it presented him with the Paul Harris award. The award is given in recognition of the member's service above self. Just two of the honourable member's achievements are the Flower of Hope School on Manitoulin and the total-needs complex for seniors in Espanola.

The award cost the Gore Bay Rotary Club US$1,000 -- I suppose that is about C$1,400 -- and the money goes to the Rotary International project known as Polio Plus. By the year 2005, which will be the centenary of Rotary's founding by Paul Harris, a lawyer from Chicago, Rotary hopes to eliminate the scourge of polio and other childhood diseases that can be eradicated by immunization programs.

They expect to raise and spend hundreds of millions of dollars to fund this worldwide project. The member for Algoma-Manitoulin was president of the Gore Bay Rotary Club in 1968-69 and now, because of his legislative duties, is an honorary member. I hope members, fellow Rotarians, will join me in congratulating the honourable member for having received the Paul Harris award.

EQUALITY RIGHTS LEGISLATION

Mr. Jackson: I will save for another day my tribute to the Burlington Teen Tour Band. In the remaining time, I would like to say something on behalf of the citizens of Burlington, who this weekend were raising serious questions about Bill 7. They specifically want to know whether our illustrious Attorney General (Mr. Scott), as he has given $1 million to women in Ontario to fight the Charter of Rights and Freedoms, is going to do the same for homosexuals in Ontario.

13:42

STATEMENT BY THE MINISTRY AND RESPONSES

MINAKI LODGE

Hon. Mr. Eakins: I would like to make public the agreement signed on Friday between the government of Ontario and Four Seasons Hotels Ltd. regarding the sale of the properties known as Minaki Lodge Resort Ltd. and Minaki Development Co. I am also tabling documents relating to the selection of the purchaser.

As I stated in the Legislature on October 23, the government is complying in this matter with the unanimous all-party recommendations of the standing committee on procedural affairs and agencies, boards and commissions. That committee found that the government should not be in the hotel business, and this government agrees.

It was clear that the lodge had to be sold. Before recounting to this House the details of the sale process and of the purchase agreement, I believe I should inform honourable members of some of the difficulties which we have encountered.

The long-term debt to the province carried on the Minaki books currently totals more than $37 million. The cost of Minaki Lodge to the government for 1985-86 amounted to almost $1 million. For the current year, excluding any costs related to the sale, it is expected that the cost to the government will be in excess of $1 million.

This deteriorating position reflects an occupancy rate of 63 per cent, which is a decline of nearly 10 per cent from last year. This is an even greater decline from the 76 per cent originally projected for this year by Radisson Corp., the current operator of the lodge.

When Radisson informed us of these developments in mid-season, it blamed Expo 86 for creating an aberration in its projections; nevertheless, it also scaled down its multi-year targets.

Including head office, tax and insurance costs, it is clear that under government ownership the lodge will continue to lose money during the next five years at least. This projection does not include necessary capital replacement or debt servicing costs. While future losses cannot be accurately estimated, on the basis of past performance and assuming improvement in future years, the best estimate of the government funding required for Minaki to the year 1992 is at least $2 million, excluding major capital improvements. Four Seasons has allocated $500,000 for capital improvements in 1987 alone.

Even if Radisson is correct in attributing the drop in 1986 occupancy to Expo, Minaki Lodge is still faced with a transition from being a new resort to one that has a stable repeat-business clientele with a high occupancy rate, the only way a seasonal resort can make money. This is particularly crucial in the case of Minaki Lodge because of its isolated location.

In addition, the size and structure of the physical plant require a very high level of maintenance. No reserve has been maintained for these inevitable expenditures. Also, because of the continuing losses, the lodge has been unable to meet even its obligation under the Radisson contract to provide a reserve for normal furniture, fixture and equipment replacements.

The government has already had to commit $230,000 in this fiscal year for capital improvements to the lodge's sewage treatment system to correct a problem that results from inadequate attention to the design, location and maintenance requirements at the time the lodge was reconstructed in the early 1980s.

So far, I have talked only about operating and capital overhead costs. For the lodge to keep and enlarge its clientele, it clearly needs to upgrade and expand its facilities on an ongoing basis. I should note that all the bidders on the lodge identified an immediate requirement for significant capital improvements.

While the costs associated with Minaki have been a major concern, they are not the only problem we encountered. The accounting and legal documentation of the two Minaki companies has also posed serious difficulties.

Since 1978, the audited financial statements of Minaki Lodge Resort Ltd. have recorded funding from the province as loans, forming a major part of the $37 million in long-term debt which I mentioned earlier. The financial statements were verified by the company's external auditors and were endorsed by the government of the day as the shareholder.

The government also took security for these loans in the form of debentures in favour of the Ontario Development Corp. These debentures were initially issued in 1978 and increased in 1983. Nevertheless, the bulk of these moneys was actually flowed to Minaki through the annual estimates of the ministry responsible rather than through ODC, which was the holder of the debentures.

We also encountered numerous complications in the area of legal documentation. From the state of the records of the companies, it would appear that due diligence was not exercised at the time the lodge was acquired.

For example, at the time the province acquired Minaki Lodge in 1974, a plan of survey was not done, nor was one undertaken before the province began the major reconstruction of the lodge. To facilitate this sale, a new plan of survey was completed this fall. This new plan of survey, conducted by Ministry of Transportation and Communications survey crews, has identified numerous problems with encroachments, water-lot occupancy and private rights of way, including the fact that parts of the Minaki golf course are not on lodge property.

The lack of diligence after the lodge was acquired extended to other matters as well. From 1974 to mid-1985, unauthorized decisions were made because of the lack of a properly constituted quorum of the Minaki board. Between 1980 and 1982, some directors were appointed without holding required directors' shares.

In 1980, the charter of the two companies lapsed because of a failure to obtain a certificate under the Canada Business Corporations Act. This problem was not addressed until January 1986, when articles of revival were filed with the federal government.

During this same period, the board's decision-making practices were also inconsistent with the Canada Business Corporations Act.

From 1974 to the appointment of a new board in January 1986, the vast majority of nominee shareholders did not sign appropriate declarations that their shares were held in trust and did not properly endorse their shares upon resignation from the companies.

From 1980 to 1986, the minute books of the two Minaki companies were not properly maintained. For example, the minutes of the two companies were not prepared into separate books and thus were not properly approved by each board of directors.

I have subjected honourable members to this litany of problems because it is essential background to understanding our difficulties in completing this sale. None of the problems I have outlined proved insurmountable, but they have increased costs and delays involved in the making of the sale itself.

Many of the difficulties will be overcome by omnibus resolutions of the present Minaki board or by this government's best efforts prior to closing at the end of December. Others will simply remain, having been disclosed in the very lengthy share purchase agreement I am tabling today. To ensure that the sale is conducted with proper authority, cabinet has passed a special order in council conferring upon me all the authority of the various ministries that have been involved with Minaki. This order in council also authorizes the ODC to relinquish its debt and debentures.

With this background, let me turn to the process we followed in effecting this sale. An intensive and comprehensive search for purchasers was conducted. Proposals were solicited from 41 potential purchasers. Subsequently, 13 companies indicated some interest in purchasing Minaki Lodge. Negotiation with these 13 respondents resulted in only four having a possible interest in a purchase which would meet the standard of keeping the lodge in operation as a five-star resort. These included Shelter Corp. of Canada Ltd., the Granite Group of Companies, Meadowood Developments and Four Seasons Hotels Ltd.

Our analysis of the bids identified Four Seasons Hotels as the purchaser which best met our requirements. The sale to Four Seasons was supported by the board of directors of Minaki Lodge. A valuation of Minaki Lodge as a going concern was obtained from the consulting firm of Laventhol and Horvath on data available in May 1986. Their valuation was $3.1 million by an owner-operator or $3.8 million by a syndicator-promoter. This valuation was based on the original optimistic budget targets I mentioned earlier.

As the season progressed and the lodge failed to meet its revenue projections, a second valuation was obtained from chartered accountants Coopers and Lybrand. They placed the value at between $1 million and $2 million without consideration of a value on the potential tax loss provision.

Regardless of how many estimates are obtained, the value of a company depends on what a purchaser is prepared to pay. In the case of Minaki, the purchase offer calls for payment of $4 million to the province in exchange for the outstanding shares of Minaki Lodge Resort Ltd. and Minaki Development Co. Also, over the next year, Four Seasons Hotels will invest a further $1.5 million in the development and operation of the lodge.

In our selection of a purchaser, we focused on several important points. Foremost among these was the requirement that the purchaser continue to operate Minaki Lodge as a five-star destination resort. The guarantee of Four Seasons extends for seven years with a five-year, no-sale clause. Indeed, even if Four Seasons were to sell the lodge after the stipulated period, the potential purchaser would have to satisfy the province that the lodge would remain as a five-star resort until December 1996.

The ability of the purchaser to maintain the lodge as a benefit to the local region and to furnish the knowledge, expertise and financial stability to ensure the future operation and reputation of the lodge were also key requirements.

Four Seasons responded to our concern that Minaki Lodge continue to play a beneficial role in the community. It is the intention of Four Seasons Ltd. to set up the Minaki Foundation, which will provide to the local community some of the undeveloped land in the Minaki town site, and on an annual basis, a percentage of the lodge profits. This foundation, with a board composed of local community representatives and representatives from local native groups, will receive an initial grant of $100,000 from Four Seasons Hotels Ltd.

Our concern also extended to the future of the employees of Minaki Lodge. I am pleased to say we anticipate that most permanent and managerial employees of Minaki Lodge will remain with Minaki. Severances for those who do not continue are at a cost that will be borne by the purchaser.

It was also necessary to consider the tax implications of the sale. Ontario recognized that any purchaser would be acquiring a lodge with an established track record of past losses, with current losses and with a strong potential for incurring substantial costs and losses in the future. In these circumstances, the government instructed its selling team to act exactly like a private sector seller in obtaining the best possible deal for Minaki.

In the sale of companies, it is common and normal for potential downstream tax benefits, which might result from the acquisition of a company, to feature as part of the negotiations, particularly in carrying forward any undepreciated capital costs to reduce future taxable income.

Consequently, as part of the negotiations, Four Seasons sought confirmation that certain advances by the province over the years were made as repayable loans that would not therefore reduce Minaki's available undepreciated capital costs. An opinion from the firm of Coopers and Lybrand, which is included in volume 3 of the documents I am tabling today, identified the potential of Minaki's undepreciated capital costs.

The selling team also obtained legal advice from the firm of McCarthy and McCarthy that substantially confirmed the opinion of Coopers and Lybrand concerning the tax status of the government loans. However, because the province is a beneficial party in the transaction, we decided it would be more appropriate to confirm the status of the loans for Ontario tax purposes by order in council rather than by issuing an advance ruling by the Ministry of Revenue.

The exact amount of Minaki's undepreciated capital costs that can be used for Ontario tax purposes will be determined only when Four Seasons files its tax claims in the ordinary way. Therefore, the share purchase agreement carries a specific acknowledgement by Four Seasons that "the vendor makes no representation or warranty as to the amount of any losses of the corporations for tax purposes pursuant to any taxing statute."

To summarize, the selection of Four Seasons fulfils our requirement to find a purchaser with the capability, motivation and commitment to make Minaki Lodge a viable commercial operation. As the premier Canadian-owned, international hotel chain, Four Seasons is committed to putting its expertise and resources behind the lodge which, under the terms of the agreement, will be operated as Minaki Lodge--A Four Seasons Resort.

In addition, our concern that the property be turned over to a purchaser with specific expertise in operating resorts was met by Four Seasons Hotels Ltd. in its management agreement with the Elgin Group. Michael Grise, who heads the Elgin Group of Port Carling, has long experience in resort management. He is the incoming president of Resorts Ontario.

The documents I am tabling today are also being delivered to the chairman of the standing committee on public accounts. They provide a complete account of the bidding process that resulted in the selection of Four Seasons Hotels Ltd. as the purchaser. Also included in the documents are the Four Seasons Hotels purchase offer and an unsigned copy of the final agreement.

John Kruger, special adviser on crown corporations, will be available to answer questions and provide greater detail on the more complex aspects of the purchase.

It is my firm belief and that of the chairman and board of directors of Minaki Lodge that in concluding this sale, we have acted in the best interests of the taxpayers of Ontario. At the same time, we are assured that by undertaking this transaction with a prestigious owner and an experienced operator, Minaki Lodge will realize its potential as a five-star resort. We have also ensured that it will continue to play an important role in the tourism industry from which much economic benefit is derived in northwestern Ontario.

Mr. Rowe: In response to the minister's statement regarding the sale of Minaki Lodge, let us make it quite clear at the outset how this government sells crown assets.

On January 9, 1986, when questioned by the press, the Premier (Mr. Peterson) stated: "I have no idea what one might get for it. I suspect not very much." That is a great way to establish the selling price of a crown corporation before doing business. The Premier joked he might throw it in with the Urban Transportation Development Corp. It is interesting that about 40 possible buyers lined up to bid on the lodge. That is rather a large number to bid for something the Premier said was not worth very much.

From October 23 to the present, December 8, the government has not answered any questions regarding Minaki with respect to job guarantees, etc. I am pleased our ongoing questions have no doubt built in some safeguards for the people in the area that probably were not there before.

Once again, we read details of the sale in last week's media, something this side of the House is not finding very new with this leaky government, which simply tells the media before bringing it into this chamber.

The minister failed to mention in his statement that this deal was not a sale. This deal of $4 million was more of a giveaway. The buyer purchased a tax loss of approximately $25 million to $30 million, which actually means $4 million in cash lost to the Ontario taxpayers.

Every time this government has the simple task of selling something, it ends up giving us eight million reasons for doing what it did. There was no sale; the government simply gave Minaki Lodge away.

Mr. Wildman: As we all know, Minaki Lodge is a monument to Tory mismanagement. The member for Kenora (Mr. Bernier) turned this into his own private sinkhole, and the public of this province has been paying for it ever since.

I regret very much that today we have an announcement by this government of the sale of this Château Bernier to a private corporation for less than one tenth of what it cost us to build and renovate it. On top of that, it appears the tax breaks included in the agreement with the Four Seasons hotel chain will mean that we may continue to pay. In fact, Four Seasons may not be paying anything for Minaki Lodge. We are giving it to them.

It is interesting to see how the Four Seasons chain itself views this so-called sale. In its view, it is a disposal. That is what it is. This is a disposal of an asset that is not worth a thing and has cost us more than it is worth. It will never be the kind of facility it was intended to be, largely because of its location and poor planning. Radisson did not know what it was doing or what it was planning; it was given an impossible task by the previous Tory government. The Tories saved the bacon of the original investor, who owed the government $500,000, at a cost of $40 million to the province.

It is unthinkable that we should have to continue this paying, but it appears the agreement with Four Seasons means we will continue to pay for a loser. It will always be a loser. As I said, it is a monument to the inability of the Conservatives to manage the economy and to deal with the need for jobs in places such as Minaki and northwestern Ontario.

Mr. Breaugh: This may be an example of where a legislative committee can do some good. Until the standing committee on procedural affairs, as it was known at that time, went to Minaki Lodge to assess it as an agency of the government, the general belief on paper was that the people of Ontario had spent about $17 million to $20 million on the lodge. After our slight investigation, it was determined we had spent in excess of $50 million on that one lodge.

There were a number of things. For example, the report today mentions there is a ski hill at Minaki Lodge. We went to see the ski hill. It is overgrown with bush. It was put in place in the first instance by means of a federal government grant. None of us had ever heard of that. That was never recorded here, nor was the investment in the ski hill ever recorded. It is a ski hill about the size of the one in Etobicoke, and badly overgrown with bush.

It is true that in our determinations we said at the end there was not very much sense in the government of Ontario being involved in that process. In that way, we are happy with the actions of the government today, but Minaki ought to remain for ever in our minds as a lesson to be learned by governments in Canada on how not to do things, how not to cover up the amount of actual expenditures made on a facility and how not to proceed into a field of endeavour where the government is not comfortable and does not do well.

Minaki Lodge is a jewel. It is on a very pleasant site but is of course in the wrong place for most of the people of Ontario. The people served by that lodge were from Manitoba and the United States, not Ontario, because it is very difficult to get there from most of Ontario. It could have been a good place for native people to learn how to work in the hotel business. When we were there, one native person was employed at the lodge. Very few people employed at the lodge were from that community. Most of the people employed there were from southern Ontario, from community college courses in hotel-related industries.

It is a sad lesson. I guess the critical part is, did we learn anything from this lesson? Did we learn that legislative committees, for example, should be able to investigate these expenditures? Did we learn that governments ought to be accountable for the moneys they spend? Did we learn that this is perhaps not the most appropriate field for governments to be involved in? It is a sad mess. It is certainly an expensive tale. Let us hope we have learned a lesson.

14:06

ORAL QUESTIONS

PROTECTION FOR HOME BUYERS

Mr. Grossman: I have a question for the Minister of Consumer and Commercial Relations with regard to the terrible situation faced by the potential home buyers in Bolton who apparently lost right out from under them the houses they agreed to purchase. They are now being asked by the very builders who sold the houses to them to buy the houses once again for as much as $40,000 more.

I hope the minister will remember that this issue respecting buyers in this situation was first raised in this House by my colleagues as long ago as March 12, again on March 25 and consistently through the course of this year. Notwithstanding the fact that this was drawn to the minister's attention nine months ago, it is quite clear he took no action whatsoever to avert the situation falling upon the Bolton home owners.

Can the minister outline specifically what steps he took from and after March 12, 1986, when this issue was raised with him, that might have prevented this problem from occurring?

Hon. Mr. Kwinter: I am pleased to respond to the Leader of the Opposition and to tell him what has happened. There have been requests that we bring forward legislation to protect people who get caught in this situation. It is my feeling and that of the people in my ministry that it is virtually impossible to bring down legislation that will be effective. We would be in a situation where we could not legislate supply, weather or some of the problems that happen as a result of other jurisdictions, such as subdivision approvals and building permits.

Notwithstanding that, we went to the building industry -- the Ontario Home Builders' Association and the Toronto Home Builders' Association -- to ask whether it could address this situation. Members should know that the homebuilding industry in Ontario is one of the biggest industries we have. By and large, the vast majority of its members are ethical, honourable and competent businessmen. Notwithstanding that, we do have these problems. I hope to have an announcement, in conjunction with the industry, within a week or 10 days on how it plans to cope with this situation.

Mr. Grossman: In point of fact, the minister decided to do what the government likes to do a whole lot, which is to put together a committee to study a situation that we warned the minister about many months ago. He did that only on November 6. He also undertook that he would have a report by December 5. That date has now passed.

My question is related to what the minister did from the time we raised this issue with him, on March 12, until November 6, when he announced the study. Clearly, the correspondence between the minister and my colleague the member for Oakville (Mr. O'Connor), who raised this issue with him, indicates the minister did nothing during that time and was not too concerned about it. In view of that, will the minister undertake this afternoon to say to those home owners that the Ontario government will conduct an investigation into their specific problems and that it will underwrite any and all legal costs which befall those home owners as a result of his unwillingness to do anything about this problem before it arose?

Hon. Mr. Kwinter: I do not agree with the Leader of the Opposition that we did nothing. We have been meeting on an ongoing basis with the industry since March.

Mr. Harris: He has done nothing effective.

Hon. Mr. Kwinter: The member may not think anything effective is happening, but we are working on a solution. At this very moment, at two o'clock as a matter of fact, ministry officials are meeting with the home builder to see whether we can work out some resolution.

In answer to the member's question, I will not give him the assurance that we will underwrite the legal cost because I do not know the situation. The information I have is that the builder entered into a legally binding contract and did nothing illegal. However, if we do find that the builder has done something where we can bring to bear on him sanctions under the Ontario New Home Warranty Program, we will do that.

Mr. Grossman: If the minister has been meeting since March, of which there is no evidence-and his communications to my colleague indicate no evidence -- surely it is an admission that his influence over the industry and his ability, as a result of those meetings, is zero. From March until this situation occurred just last week, he has succeeded in doing nothing and has had no reaction from the industry. No action was taken to stop this terrible situation from developing.

Can the minister at least give the House this undertaking this afternoon? If the allegations of the home owners with regard to this firm prove to be correct, that is if it did not apply for the building permits that the municipality says were available, will he give a firm and clear undertaking to this House that this company will be declared by him, the Premier (Mr. Peterson) and the Minister of Housing (Mr. Curling) as ineligible for any and all government assistance under any and all government housing programs for a long time?

Hon. Mr. Kwinter: In 1983, the Leader of the Opposition's party brought in amendments to the Planning Act that allowed permits to be issued to builders to start building without building permits. That party had 42 years to deal with this. We are working on this problem. If the member takes a look at any of the press reports, he will know we have been addressing this problem since last March. There will be a resolution that will correct the inadequacies of that party's program which led to this. In the opinion of the members opposite, every problem has developed in the past few months. We are reaping the harvest of their poor management.

Mr. Grossman: If the minister does not like the law, he should change it. If the firm did something wrong, the minister should disqualify it from government programs.

Mr. Speaker: Order. Time for a new question.

Mr. Grossman: Anything but action.

SUNDAY TRADING

Mr. Grossman: I have a question for the Attorney General. Perhaps over the weekend he and the acting Solicitor General have tried to figure out whether he does or does not instruct the police to lay charges. We are eager to find out what today's version is.

It is quite clear that a court decision is coming down next week and, as a result of that court decision, we might find real chaos out there, even greater than we saw last weekend and last week, because the courts may very well rule that the legislation is totally invalid. Given the fact that next Thursday may well be our last day here and given the fact that a Sunday follows three or four days immediately thereafter, can the Attorney General give the public some indication of what he intends to recommend if the courts rule the legislation invalid?

Hon. Mr. Scott: I would be delighted to give the honourable member some indication of what we intend to recommend. Would he be good enough to tell me the view of his party? I will take that into account in formulating our recommendation.

Interjections.

Mr. Speaker: Order.

Mr. Grossman: I remind the Attorney General that for the time being at least he is the Attorney General. He has the responsibility to give some guidance to the public with regard to what he intends to do after December 18. The Attorney General has had several months to read our recommendations. They stand. After several weeks of chaos and after one full year of warning that this court case was coming down, will the Attorney General give the public some guidance with regard to what he will do in the event the legislation is thrown out by the courts?

Hon. Mr. Scott: That is an eventuality that is possible, but in my opinion not likely. We will have to await the determination of the courts on December 18, and we will then promptly announce what is proposed.

Mr. Grossman: I want to draw to the Attorney General's attention that we have had one full year to review this. On December 29, 1985, under the headline, "A-G Gets into the Act," the newspapers reported that the Attorney General was undertaking to look into this thoroughly. Now, a year later, he is not prepared to give the public any indication of what he will be saying in this House on the last day this House sits, the day the court decision comes down.

Hon. Mr. Elston: Where are you on this?

Mr. Speaker: Question.

Mr. Grossman: Will the Attorney General get off the legalese and the smart-aleck remarks and tell the public of Ontario what his response will be? Surely he has it by now. What will be his response if the law is thrown out by the courts? The minister should stand up and do his job.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Scott: I not only got into the act, but last week I also asked people to phone me if they were fired.

Mr. Grossman: You did not answer the phone. You referred callers to your law firm.

Hon. Mr. Scott: The trouble was that the calls I got were all from members of the Conservative caucus.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Scott: I am sure they do not feel they will be fired; they may feel it will not be long before they lose their seats.

Mr. Speaker: And the response?

Mr. Davis: Try us. Come on, try us. All you do is throw parties.

Hon. Mr. Scott: I should tell the House that we are considering the options that are available in the event that the Supreme Court of Canada gives one of a number of possible determinations on December 18. We will respond when we see precisely what the Supreme Court says.

Mr. Grossman: Wait till chaos sets in again.

Mr. Speaker: Order.

SECURITIES INDUSTRY

Mr. Rae: My question is for the Premier and concerns the announcement that was made on Thursday in this Legislature by his colleague the Minister of Financial Institutions (Mr. Kwinter) about the importation of the casino economy into Bay Street, holus-bolus.

Can the Premier confirm that when he was in New York in November, he met with a number of movers, players and shakers in the financial industry? Can he confirm that those players urged his government to open up the border entirely with respect to American investment in our securities field? Can he confirm that is precisely what his minister announced last Thursday?

Hon. Mr. Peterson: When I was in New York, I met with a number of people in the financial business. The vast majority of those were Canadian firms that were working in New York, although there were a couple of other firms as well. There was a general discussion of the reregulation of the securities industry. I do not recall that specific suggestion coming forward at that meeting, although everyone was aware that we were in the process of reregulating the industry. That had been announced and there was no particular secret to that. There were discussions going on with the industry and the various people involved. It was not a particular thrust of that meeting.

14:20

Mr. Rae: The other day, the Premier said in this House that it was a question of eat or be eaten. It is perfectly clear just who has been eaten in this process.

Given all the opposition that the Premier has expressed to the whole tenor of the free trade talks -- he has accused the Prime Minister of having negotiated away too much at the very beginning -- can he explain why on Thursday the minister made a unilateral announcement that Bay Street in Toronto would be open season for American investors and for an American takeover without any sense of reciprocity, without any mention of the free trade discussions and without any mention of the negotiations that are going on with the United States?

Can he explain why he would have given up a very important bargaining chip in the middle of the discussions, in the middle of negotiations, just at a time when the Premier himself says Ontario is opposed to what is happening?

Hon. Mr. Peterson: I do not agree with my honourable friend's analysis. I know he has cottoned on to a few trite phrases lately, such as "wheel of fortune," "casino economy" and things such as that. It may indicate his contempt for the system -- I do not know -- but I do not particularly share that view.

Second, I would like the honourable member to know this is a multinational, multilateral issue, not a bilateral issue. I would like him to know, and I am sure he is aware, that the nature of the international financial markets has changed very substantially and gained great acceleration, particularly in the last year.

When the minister announced some six months ago -- I believe it was in June -- that he was going to open up and reregulate the market here and started discussions with the various financial agencies, and with consumers and others as well, in a sense it was a leap ahead of the market. However, because it has been moving so very quickly and because the changes are taking place internationally and inside our country, in a sense we were overtaken by those events. Then we had a very fundamental decision to make: are we going to keep Toronto as a world-class centre of financial transactions or are we going to fall by the wayside?

The member opposite ideologically may not approve of what is going on -- I do not know -- but I am not prepared to sit back and see Ontario or Toronto become a boutique economy catering just to a few small transactions to satisfy some ideological whim. The leadership the government is providing on this issue will continue to keep Toronto, Ontario and Canada in the forefront of the international financial markets.

Mr. Rae: Talk about trite phrases; I think I just heard one. The Premier does not want Toronto to be overtaken; we do not want Toronto to be taken over. That, I think, is the real difference between us on this issue.

I would like the Premier simply to comment on all those studies, including the studies that have been done by his own task forces -- most recently the Dupré task force on financial institutions, which said, "Such a system provides a discipline which would be lacking." He is talking about a system that rigidly separates real from financial; which, in other words, makes a distinction as to who can own and what they can own, and would separate those people who can take money from the public from those people who are making investment decisions directly.

He says if we do not maintain a distinction between those two groups of people, we have what Mr. Dupré describes as the possibility of a self-financing ring. It could lead to the making of decisions that are not in the interests of the securities firm and its clients but are in the interests of outside investors.

Can the Premier explain to us why all those concerns about self-dealing, about self-financing, about takeovers, about an economy being taken over and about distinctions failing to be made were thrown out the window in one statement made by the Minister of Financial Institutions on Thursday?

Hon. Mr. Peterson: With great respect to my honourable friend, those matters are not thrown out the window.

Mr. Rae: They are.

Hon. Mr. Peterson: That is absolutely not right. The new securities reregulation deals with ownership of the industry. It does not permit self-financing, self-dealing, non-arm's-length transactions and that kind of thing. It is a recognition, as the honourable member knows, of the nature of the international securities business where, with a single phone call, half a billion dollars' worth of financing can go abroad.

What the member opposite would have us do, I think, is sit back and see our financial sector just wilt in the city of Toronto. We are not prepared to sit back and see that happen. I do not suspect there is an expert he can talk to in this area who would agree with him in that regard. The world has gone far past even Mr. Dupré's report in a number of the suggestions he has had. It has been weighed very carefully in the deliberations.

Very wide consultations have been had. We know what is going on in Montreal and we know what is going on in Vancouver. We know what the federal government's intentions are in broad terms. I can say that the world and this country are marching forward even if the member is not.

NURSING HOMES

Mr. Rae: I have a question of the Minister of Health concerning statements made last week by officials of the Ontario Nursing Home Association.

The officials have said: "We can no longer cope. We are no longer responsible. We cannot deliver a level of care more closely tied to the residents' assessed needs. Now we will only continue to operate in a way that falls short of the residents' true needs and the families' expectation of our level of service."

The minister is aware of his obligations under the Nursing Homes Act. He is also aware of the obligations of owners who wish to retain a licence. In particular, I note that the director can revoke or refuse to renew a nursing home licence where "the nursing home is being operated in a manner that is prejudicial to the health, safety or welfare of the residents cared for therein."

We seem to have a statement from the industry that says it cannot do its job. What does the minister intend to do about that?

Hon. Mr. Elston: The first thing I have requested is that my staff look into some of the charges that were made during that press conference to see exactly which facilities are not performing their role and which administrators are indicating they will not be able to carry out their role.

We are taking very seriously any suggestions made by individuals who operate nursing homes that they no longer intend to carry out the required care of their residents. I am very concerned about people who, basically, are indicating they are no longer able to provide that service without, first, advising the Ministry of Health that they have decided not to proceed with the obligations they take on as a result of the licensing.

If we find there are some who are in that position, we will look after the needs of the patients first.

Mr. Rae: The minister seems rather casual. We now have the report of Dr. Crittenden. We have the reports of the Concerned Friends of Ontario Citizens in Care Facilities. Now we have a statement, at a formal press conference held by the Ontario Nursing Home Association itself which says it is not able to do its job.

We have a system which is in a state of crisis, in a state of collapse, and the minister says he is asking a staff member of his to look into it. I am asking the minister whether he is able to stand in his place today and say that every resident in Ontario in a nursing home is receiving the care that he or she ought to receive. If not, what is he going to do about it?

Hon. Mr. Elston: I do not think the honourable member has assessed appropriately my concern about the care that is needed for people in nursing homes. He knows full well that if there are people who are not receiving care in nursing homes in the province, my inspection group is bound to take a look at those. In fact, we would like to follow up and ensure that care is delivered.

There is an association with an agenda. That agenda appears to be to extract some $173 million from the Ministry of Health and the government of Ontario for care. We have to assess exactly what that request is about. We have to make sure we can get services delivered for any money that is used to enhance the nursing home sector.

Apparently, the association's role is to say the type of things that will lever extra money from the government. That is perhaps its role. I can tell the member my concern is not so much with the association but with the welfare of the residents in those homes. We take seriously any suggestion that people are not being well cared for in those institutions.

Mr. Rae: I did not hear an answer to my question. The minister is responsible for the care and the health of 30,000 old people who are in nursing homes. The managers of those nursing homes have said they cannot cope, they are no longer responsible and they cannot provide the care that those residents, their parents, their loved ones and their children have a right to ask for.

As the minister responsible, is the minister in a position today to stand in his place and say the care of those residents is a care that he is satisfied with and can guarantee? If he cannot guarantee it, he ought to make way for somebody and a government that can guarantee it.

14:30

Hon. Mr. Elston: I thank the honourable gentleman, because I can tell him we are looking at ways to enhance care in the nursing home sector. He knows we have announced a program that will require activation programs through contractual obligations between the owners and the Ministry of Health. He knows we have provided more money for incontinent care. He knows we are enhancing the position of people who are residents of nursing homes.

He will find this government will be seen to be very progressive. We have amendments pending, and we look forward to the support of all the people in this House to help us enhance the lifestyle of people in nursing homes. I look forward to the day when we get some constructive suggestions from the leader of the third party.

SUNDAY TRADING

Mr. Grossman: I have a question for the Attorney General. Will the Attorney General agree with me that the Sunday closing legislation is becoming very close to unenforceable?

Hon. Mr. Scott: There is no question but that the determination by the Ontario Court of Appeal two years ago and the pending redetermination to be made by the Supreme Court of Canada that will be released December 18 have led a number of merchandisers to gamble on the prospect that the law will be declared unconstitutional by the Supreme Court of Canada. That has led a number of stores not only in this province but also, as the honourable leader will see, all across the country to stay open on the prospect that any charges that are laid, which the courts will not now deal with, will have to be withdrawn if the Supreme Court of Canada determines the law cannot stand. Although I have been wrong before, I do not predict that result on December 18.

Mr. Grossman: I want to take a moment to outline the situation we have to the Attorney General. His leader said on January 7, 1986, that the law is "becoming very close to unenforceable." His leader did not attribute the violations to the pending court action; he said, "Any law that is violated so often -- it may be an issue that society in general has moved on and we have to reflect these changing attitudes."

We now have this situation causing some uncertainty. The Attorney General said on December 2 that "the power of the Attorney General does not include instructing the police" that they should or should not lay charges. On December 26, 1985, Sergeant James Knowlton at 52 division of the Metropolitan Toronto Police said: "Police received orders to lay charges from Attorney General Ian Scott this week."

Given this situation, is the Attorney General going to bring in legislation this week that will assure employees that, notwithstanding what the courts decide, they will no longer be in a position of being fined or fired?

Hon. Mr. Scott: The point to be observed, and the leader makes it correctly, is that there is some ambivalence in the public mind about whether shopping on Sunday is good and whether it should be permitted. The leader thinks it should. His colleague the member for Oakville (Mr. O'Connor) thinks it should not. This is typical of the division found in many communities across the province. It is not a matter about which anybody should be surprised. Following the conclusion of the matter in the Supreme Court of Canada, we will announce to the House what we propose.

Interjections.

Mr. Speaker: Order. The member for Essex North would like to ask a question.

WATER DIVERSION

Mr. Hayes: I have a question of the Minister of Energy, who will know that in 1952 and in 1973, the Ogoki and Longlac diversions were closed or reduced to alleviate problems created by high lake levels. Now that three of the five Great Lakes are higher than they have been in recorded history, will the minister agree to reduce or close these diversions and increase the flows through the Welland Canal?

Hon. Mr. Kerrio: The Ogoki diversion, which is generating a considerable amount of electrical power, has been closed from time to time. The fact of the matter is that the International Joint Commission is now examining those things that have an impact on the water levels of the Great Lakes; one of them is the Ogoki diversion.

In reviewing those initiatives, I am certain that closing Ogoki would be given as an undertaking by the IJC. At this point, the commission says that it is reviewing all these options and that it is looking for a lead agency from each of the federal governments of the United States and Canada to play a major role in controlling the water levels.

That will unfold as it should; and as I have said many times the major responsibility rests with the two nations that share one of the largest freshwater bodies in the world. It is beyond the scope of any good-thinking person that a provincial government or the municipalities could encounter the kind of undertaking to handle the levels of the Great Lakes system. That is why it rests with the IJC.

Mr. Hayes: Because the Minister of Energy is also the Minister of Natural Resources, there is a conflict of interest between Ontario Hydro's interest in running the Ogoki and Longlac diversions and the protection of people and property along the lakeshores.

I know the minister will probably slough this off and blame the federal government again --

Mr. Speaker: The supplementary is?

Mr. Hayes: What level do the lakes have to reach before the Minister of Natural Resources can convince the Minister of Energy to do something about lowering the Great Lakes?

Hon. Mr. Kerrio: The honourable member is presuming that I am blaming the federal government for high water. I never said that. I suggested it has to make the decision about how we control the levels of high water. One is considerably different from the other. I do not think the member wants to deal with this issue except to get people excited in areas that do not properly belong in the provincial jurisdiction.

As far as I am concerned, the federal government is going to spend $175 million to renew the Welland Canal, and it is undertaking to talk about some control on water levels there. If we spill water through the Welland Canal, the Minister of Energy is very anxious to see that we generate good, clean, hydraulic electricity. That is a must.

ACID RAIN

Mr. McGuigan: I have a question for the Minister of the Environment. Last week, a committee of international scientists confirmed the fears of people in southern Ontario that acid rain is a threat to human health and buildings, in addition to the death of lakes and the decline of forests in northern Ontario.

Today, there is a great deal of confusion surrounding the commitment of the United States to spend $5 billion on acid rain abatement. US Energy Secretary Herrington told the Washington Post they cannot afford the $5 billion. Secretary Herrington also suggested Canada has accepted a scaled-down program. Canada's federal Minister of the Environment, Mr. McMillan, said the US is not reneging on this commitment.

Can the minister tell us what he has done to clarify this confusion of statements?

Hon. Mr. Bradley: The reference the honourable member makes -- I read the same newspaper article the member did this morning -- is to the US Energy Secretary and his statement.

When President Reagan and Prime Minister Mulroney met in March 1986, there was an understanding that there would be some significant progress -- at least in terms of the communiqué issued -- in the field of acid rain.

The major component of the US program, as I recall, was $5 billion to go to research for clean-coal technology. I do not know how much of that is new money. I do not think it is all new money, although I wish it were. I am concerned when I hear the news media reports, as the member has, that even that $5 billion, which is simply to look at research into clean coal, might be in some jeopardy. The Energy Secretary has tried to clarify that, but it is of great concern to us.

As all members of the House will understand, more than 50 per cent of sulphur dioxide produced and acid rain precipitation that results from it originates in the US and falls on eastern Canada; so it is a matter of great concern. I hope the Americans have not changed their minds on even that small initial step.

14:40

ALCOHOL ON OPP BOAT

Ms. Fish: I have a question of the Attorney General. The police investigation of the aptly named booze cruise indicated that the actions of the former Solicitor General, the member for Kingston and the Islands (Mr. Keyes) have, and I quote from the report, "affected the credibility of the marine awareness program and the holiday weekend blitz program for highway enforcement."

Does the Attorney General agree with Inspector Neish's opinion? Has the irresponsible behaviour of one of the minister's cabinet colleagues effectively undermined the credibility of the government in promoting campaigns against the use and abuse of alcohol?

Hon. Mr. Scott: I think the honourable member misread the police report. The issue that was being considered in the report was whether, in a case where a layman who had committed this offence or done these acts would not have been charged, a person who was the Solicitor General alone should be charged. The issue the police refer to in that part of the press release is that if he were not charged, that would affect the credibility of the program. He was charged, and in my opinion, the credibility of the program is intact.

Ms. Fish: I was not quoting from a press release; I was quoting from the report, and I quoted it accurately.

Notwithstanding the Attorney General's response, I note there was no customary kickoff to this weekend's reduce impaired driving everywhere program. Did the minister cancel his media conference because he was too embarrassed by the trivialization of the issue by the Premier (Mr. Peterson) to come before the public, having lost his credibility in dealing with the seriousness of drinking and driving as promoted by the RIDE program?

Interjection.

Hon. Mr. Scott: Mr. Speaker, through you to the Premier, I am looking forward to the great encounter that is going to take place in St. George-St. David before very long.

When I referred to a press release, that was wrong. I meant to refer to the police report, a copy of which the member had. She will be interested to hear that in regard to the publicity associated with the RIDE program, the press conference that was fixed for Friday was postponed and will be held today at four o'clock in the press office.

It would be fun, for a change, if a member of the Conservative caucus came along to look at the efforts, of which we are very proud, to control drinking and driving in the province.

BEACH POLLUTION

Mrs. Grier: I have a question to the Minister of the Environment. Last June, when Toronto's beaches were being closed, I raised with the minister the fact that lakefilling projects on the Toronto waterfront had contributed not only to beach contamination but also to the presence of chemicals in our drinking water. The minister replied that he was considering changes in policy to have a better assessment of the impact of lakefill.

Last Friday, as the minister will know, the waterfront advisory board of the Metropolitan Toronto and Region Conservation Authority approved a plan that is going to require another 170,000 loads of fill to be dumped to create a marina off the Leslie Street spit. Can the minister tell the House what he intends to do about this?

Hon. Mr. Bradley: The member identifies a problem that is going to be important not only to Toronto. I know her own concerns are not simply about Toronto. A lot of lakefilling is taking place here, but it extends beyond Metropolitan Toronto.

I happen to believe that what was considered to be an acceptable manner of dealing with landfill in the past is not necessarily best now, for a couple of reasons. The member talked about those reasons in her initial question some time ago. One is that the natural flushing that can take place in a harbour area, which would naturally flush away some of the contaminants, does not take place as well as it should. The other is the possibility that contaminants might come into lakefill from various sites. That is a second issue.

Along with my ministry, I am reassessing the whole program of landfill as it relates to lake areas, for the reasons I have identified. I would think the member would support that reassessment to ensure that, if any future activity takes place, it is only without adverse environmental effects.

Mrs. Grier: That is exactly what the minister said last June, that he shared my concern, that he knew I was aware of the problem and that he was going to reassess the program. In view of the decision now taken by the MTRCA and in view of the fact that since last June he has not reassessed his program or made any announcement about it, what does he intend to do about the MTRCA's latest proposal?

Hon. Mr. Bradley: The fact that I do not announce everything does not mean we are not undertaking these kinds of activities. As the member knows, our ministry is not the kind of ministry that does a lot of bragging. We simply state what we are doing to address problems in the province. We are actually quite modest in that regard. We talk about both the bad news and the good news.

I know the member wants me to deal with her question rather than talking about the general policy of the Ministry of the Environment; so I will address that question.

This specific proposal will receive the very closest scrutiny, particularly because we have seen evidence of some adverse impact of the bacteria that can accumulate along the beach; or in view of the findings, for instance, of the recent federal report on the Leslie Street spit. We will be bringing together all the key players in this issue to discuss it and to determine how it can best be handled. There simply will not be a carte blanche for the filling that will take place in that area.

SALE OF LANDS

Mr. Gillies: I have a question for the Minister of Municipal Affairs. My colleague the member for Brock (Mr. Partington) has asked him about the rather controversial land sale in the town of Vaughan, a sale of 14 acres of prestigious industrial land to be serviced by the municipality. The sale was made against the advice of staff for $2.75 million, on the strength of a deposit of $20,000 as opposed to the usual 10 per cent. We understand the closed-door investigation into this matter was due to report several months ago and has yet to do so. When will the House be advised of the outcome of this investigation?

Hon. Mr. Grandmaître: As I told the member for Brock last week, the investigation is ongoing, and a thorough study of the situation has to be made. Until the final report is in, I cannot divulge what the ministry will do or the other steps that will be taken.

Mr. Gillies: We can certainly understand the minister wanting to have a full inquiry into this matter, but it has been six months. As persons close to the Liberal Party have again reared their ugly heads with regard to this deal, which has been speculated about in the media, does it not concern the minister that if this matter is allowed to go on too long the appearance of a coverup will set in? Why will he not exercise his responsibility under the Municipal Act to call for an immediate inquiry into this matter?

Hon. Mr. Grandmaître: Staff have looked into the possibility of calling an inquiry and have advised the town of Vaughan that no inquiry is necessary under section 180 of the Municipal Act. However, because some serious allegations were made, it necessitated a longer period to determine whether charges will be laid.

14:50

JOBS IN AUTOMOTIVE INDUSTRY

Mr. D. S. Cooke: I have a question of the Minister of Industry, Trade and Technology. Can he report to the House on his ministry's assessment of the impact on Ontario of the layoff of 29,000 people at General Motors and the closure of 11 plants in the United States?

Hon. Mr. O'Neil: We have discussed this matter with the General Motors people, and they tell us there will be very little effect on Canadian and Ontario plants.

Mr. D. S. Cooke: That is the kind of answer I thought I would get from the minister. Is the minister aware that last Friday General Motors announced the layoff of nearly 500 people in the city of Windsor at its GM trim plant, which is a direct result of the layoffs in the US? Is the minister still willing to buy the line of General Motors that the impact will be minimal?

When will this government start publicly pushing the federal government not only to save the safeguards in the current auto pact, but also to bring in content legislation, which was the major recommendation of the auto task force chaired by Bob White and the deputy minister?

Hon. Mr. O'Neil: We are being told those layoffs are not because of the layoffs in the US. Some of them have to do with some of the closures that were temporary close-outs in the US.

LA CHAÎNE DE LANGUE FRANÇAISE DE TVONTARIO

M. Poirier: J'aurais une question pour la ministre des Affaires civiques et culturelles. On entend dire que TVOntario s'en vient avec une chaîne de langue française. Il y a beaucoup de gens dans ma circonscription qui s'intéressent fortement à la mise sur place de la chaîne française. Je voudrais que la ministre me dise si elle a une date précise, à savoir à quel moment la chaîne française sera-t-elle en ondes à l'échelle de l'Ontario?

Hon. Ms. Munro: My colleague is quite correct. The awarding of the Canadian Radio-television and Telecommunications Commission licence to TVOntario was a landmark decision. I understand the commission was also very favourable in its comments on many of the programs coming forth from TVOntario. In essence, that allows us to deliver French-language programs right across Ontario. I just finished taping a message to the Franco-Ontarian population and expect those programs will be available in the new year.

M. Poirier: Récemment, j'étais en contact avec plusieurs artistes franco-ontariens et franco-ontariennes. Ils voudraient savoir quel pourcentage de la production de la nouvelle chaîne française de TVOntario, si c'est déjà prédéterminé, sera réservé à la production franco-ontarienne, et j'aimerais que la ministre nous entretienne de ce sujet-là.

Hon. Ms. Munro: The board and staff at TVOntario have been working for some time to ensure that the programming level available to the Ontario population reflects the needs and artistic quality of people in this province. TVOntario is cognizant of that input. I expect that over the course of the next two years we will see a significant increase in the number of programs that are designed and developed and in which Franco-Ontarians star.

Initially, we will be starting to air programs relating to the children's programs currently in existence. I will be able to give the member an up-to-date status report as the year progresses. I thank him for the question.

EMISSION DISCHARGES

Mr. Stevenson: I have a question for the Minister of the Environment. There continue to be unacceptable emissions from the Thane aluminum smelter near Keswick. What does the minister intend to do about it?

Hon. Mr. Bradley: There is a long history to the Thane developments, which date back well into the previous administration.

Mr. Grossman: So the government is not going to do anything about it.

Hon. Mr. Bradley: That is not the case. The difference is that we are going to do something about it, as the Conservatives did nothing.

Mr. Grossman: Let us hear what you are going to do.

Hon. Mr. Bradley: Contrasting it with Sunday shopping, on January 9, 1986, the Leader of the Opposition said he was going to have Sunday shopping.

Mr. Grossman: Come on, put up. Let us do something. Your leader will not tell us what he believes in.

Hon. Mr. Bradley: Does the member deny that on January 9 he said he was in favour of Sunday shopping?

Mr. Speaker: Order.

Hon. Mr. Bradley: Sorry, Mr. Speaker.

Mr. Speaker: Interjections and responses to interjections are out of order. Are you going to answer the question?

Hon. Mr. Bradley: In fairness to the member, I will try to answer his question. There have been attempts through discussions with the company to bring it into line with what we consider to be acceptable environmental standards, the two issues being the actual air emissions and the accumulation of waste in the area. We have worked on a control order. We have had the investigations and enforcement branch in. It is at present investigating to determine whether there has recently been compliance with the control order.

Mr. Stevenson: The minister should know there has not been compliance. The Georgina council has lost confidence in the minister in dealing with this issue and has hired legal counsel to deal with the matter. Why has the minister been so unwilling to co-operate with the council in trying to bring an end to this problem?

Hon. Mr. Bradley: I guess one can say that when there is disagreement between the two they say there is lack of co-operation, but I do not define it as that because we have a specific role to play, which is the enforcement of the control orders. That is why we bring in the investigations and enforcement branch, to undertake a detailed investigation to determine whether there is compliance. When there is not compliance with a control order, we are quite prepared to press the necessary charges. If the evidence accumulated is such that there is a case to be made in court, the member can be assured that we will be prosecuting.

AUTOMOBILE INSURANCE

Mr. Swart: I would like to ask a question of the Minister of Financial Institutions. I hope he knows the Ontario Road Safety Annual Report for 1985 indicated that in spite of compulsory insurance in this province, there were between 60,000 and 260,000 vehicles on the road without insurance. I wonder whether the minister can give this House a more accurate indication of the actual numbers who are not insured.

Hon. Mr. Kwinter: I do not have the actual number, but I will be happy to get it for the member.

Mr. Swart: The minister did not know there were any tavern owners operating without insurance, I suppose he cannot be expected to know this. Does the minister not know or care about the jeopardy in which this places other motorists on the road and the jeopardy in which it places those operating without insurance? Does he not realize that a public plan, such as those in the western provinces which ties insurance to licence plates, prevents driving without insurance? Does he not think it would be a good idea to have that kind of a plan here?

Hon. Mr. Kwinter: Some weeks ago I characterized the leader of the third party as riding a hobby-horse. Today I would like to characterize the member for Welland-Thorold as a one-trick pony. The only time he ever has a question it has to do with bringing in government car insurance. We are looking at the whole issue of insurance. We have experts looking at the whole problem. When they report to me, I will be happy to pass along their recommendations to the member.

Interjections.

Mr. Speaker: Order. The member for Carleton-Grenville would like to ask a question.

TRANSMISSION LINE

Mr. Sterling: I have a question for the Minister of Energy. On October 23, I asked the minister whether he would convene a new hearing to reconsider the Ontario Hydro route for the eastern line going from Lennox to Ottawa through the community of Bridlewood. Can he report to me on that?

Hon. Mr. Kerrio: The fact of the matter is that we in Ontario have had some real difficulty in transmitting our power that is generated from one part of the province to the other. In order to get that grid in place, we have gone through a very timely process.

Anyone who had any reason to appear before that committee was given the opportunity to do so. When the decision comes down, we are generally forced to live with it, unless there is very good reason why we should not. We have done that in every instance. In one instance, we had eight or nine years of undertaking to get a power line to take the power out of the Bruce generating station. It has cost us $200 million in alternative fuel. The process is a good one in that everyone was heard, and that is generally the way we will go.

15:00

Mr. Sterling: Obviously, the minister has not read the some 1,600 letters from people in that community who have tried to explain to him that the process was not fair to them and that the alternate route taken by the joint board was a route that was introduced in February 1986 after the hearings had taken place in the community of Bridlewood. Therefore, that community, in effect, has not had an opportunity to meet on this proposal. They were told by Ontario Hydro that the route through their community was not a primary route but a secondary one.

Mr. Speaker: Question, please.

Mr. Sterling: Will the minister not give them a second chance to consider this particular route by reconvening a new hearing?

Ontario Hydro officials met with the community last week and they said --

Mr. Speaker: The question has been asked.

Mr. Sterling: --that they could reconvene a hearing. Will he call Hydro and ask it to reconvene a hearing?

Hon. Mr. Kerrio: There are transmission lines all over Ontario. If we were to reconvene hearings on all of the directions we go with transmission lines -- and the member knows this one already has a transmission line there and we are going to double up on that property -- the member is talking then about an issue that would bring into question every transmission line in Ontario if the reason for having the hearing has to do with the issue he brings forward. That just would not be practical. We need to speed up the system, not slow it down.

OCCUPATIONAL HEALTH AND SAFETY

Mr. Martel: I have a question for the minister responsible for the swamp.

Mr. Speaker: Which minister is that?

Mr. Martel: The Minister of Labour. Pardon me, Mr. Speaker.

On November 21, 1985, the minister in this Legislature said there would be no more repeat orders; there would be prosecutions. The auditors' report, under the section entitled "Need for Improved Enforcement," states that they were "informed that the repeat orders are issued only if the observed contravention is identical in all respects to the one observed on a preceding visit."

Given this, can the minister tell me why nine repeat orders were issued to Giffels Associates in Rexdale between December 10, 1985, to February 1986, despite the ministry advising the auditor, "If the order is not complied with by the next visit, the inspector initiates a prosecution"?

Hon. Mr. Wrye: It probably will not come as a surprise to my honourable friend that I cannot give him an answer to that question today since it is a very specific question on a very specific series of orders that were written. I will take a look at the allegation my honourable friend raises and get back to him.

However, I want to remind him that in the early days following the issuing of the orders policy, there were some clarifications needed in terms of making inspectors aware of the procedures to be followed. I believe, as we have to get out the kinks in the early going of any program, that has ended and, by and large, the new orders policy is working very effectively. The effectiveness of the new orders policy can be seen in the very sharply increased numbers of prosecution requests which will go to the legal branch for determination.

Mr. Martel: I think the minister is being economical with the truth, quite frankly, since I asked this question before.

"Economical with the truth" is something you might want to twist around, Mr. Speaker. However, I asked this question before and I have written him about this question before, so it does not come as something new. However, let me put my supplementary.

We know the category for repeat orders no longer appears in the annual report of the Ministry of Labour; that is one way of getting rid of it. Another way is to use misleading words such as "advice," "suggestions" and "extensions of orders." Let me ask about two cases. In the case of Canada Hair Cloth Co. Ltd., a compliance date was extended by the supervisor over the order issued by the inspector for providing data sheets. Mattabi Mines Ltd. had an order issued on February 5, 1986, and reissued by the mining inspector on February 12, 1986, for the 2600 Alimak Climber.

Can the minister tell me whether charges have been laid there for repeat orders, even though he has tried to disguise them?

Hon. Mr. Wrye: First of all, I apologize to my honourable friend. I knew he was very anxious to ask a question because he wanted to ask a question on Thursday and I tried to anticipate him. However, I cannot always anticipate which of the 20 letters of the week my friend sends me are going to be the subject of follow-up questions.

Interjections.

Hon. Mr. Wrye: On one issue my honourable friend has raised, he seems to believe that because a supervisor reviews an order written by an inspector, because a supervisor supervises and acts as a supervisor might in any other situation, somehow that changes the matter. I contend, and my honourable friend may want to disagree, the era of repeat orders has ended. The orders policy is very clear, very precise and, by and large, with some exceptions, it is being followed very well.

PETITIONS

RESIDENTIAL RENT REGULATION LEGISLATION

Mrs. Grier: I have a petition addressed to the Lieutenant Governor and the Legislative Assembly of Ontario, signed by members and tenants of the Majestic Tower Association at 2 Royal York Road in my riding. It requests the government to keep its promise and limit rent increases to four per cent.

L'OUVERTURE DES MAGASINS LE DIMANCHE

M. Morin: Monsieur le Président, j'aimerais vous soumettre une pétition signée par au-delà de 800 paroissiens de la paroisse Saint-Joseph d'Orléans qui s'opposent fermement au magasinage non essentiel le dimanche.

Ils exigent de plus que la loi sur les jours fériés, dans le commerce de détail, soit observée, respectée et maintenue.

INTRODUCTION OF BILLS

LEGISLATIVE ASSEMBLY AMENDMENT ACT

Hon. Mr. Nixon moved first reading of Bill 168, An Act to amend the Legislative Assembly Act.

Motion agreed to.

EXECUTIVE COUNCIL AMENDMENT ACT

Hon. Mr. Nixon moved first reading of Bill 169, An Act to amend the Executive Council Act.

Motion agreed to.

Hon. Mr. Nixon: These two bills put before the Legislature the proposal for a 3.9 per cent increase in our payments and indemnities.

ORDERS OF THE DAY

House in committee of the whole.

RETAIL SALES TAX AMENDMENT ACT

Consideration of Bill 26, An Act to amend the Retail Sales Tax Act.

Mr. Chairman: Are there any comments, questions or amendments, and if so, to what section?

Hon. Mr. Nixon: I have amendments to section 6, section 12 and subsection 13(2), and maybe another one.

Mr. Chairman: And maybe what?

Hon. Mr. Nixon: Maybe another one I will discuss as the day proceeds.

Mr. Chairman: That was section 6, section 12 and subsection 13(2)?

Mr. Ashe: In all fairness, Mr. Chairman, we just this moment got in our hands the amendments the Treasurer (Mr. Nixon) referred to. I would appreciate it if you would give us a minute or two to assimilate them into the sections of the bill that are to be amended so we can give a reasonable response to what the government is prepared to do.

Hon. Mr. Nixon: In response to that, I am sure what the honourable member said is correct, but the amendments we prepared were sent last week. I regret very much they were not placed in his hands. We will find out why that was so.

Mr. Chairman: Anyway, these amendments and sections will be discussed. It is the other sections I am trying to get at. Otherwise, I will be carrying it up to section 6.

Mr. Breaugh: I am aware that at least two other amendments are being proposed. I think one of them has just been put in your hand. I believe the member for Mississauga South (Mrs. Marland) also has an amendment she intends to propose. Those are the other two I am aware of. The member for Mississauga East (Mr. Gregory) has one, and the member for Mississauga South has one.

Mr. Chairman: We seem to be a little at a loss to get everyone's attention. We do not want to have amendments coming down and be trying to stand down and reverse our fields. Does the member for Mississauga East have an amendment to some section?

Mr. Gregory: Yes. We have an amendment on the explanatory notes under subsection 10. I have given you notice of that amendment to the wording under the explanatory note, but we do not have the proper legalized wording for the section in the bill at this point; it is coming.

Mr. Chairman: That is subsection 10. I am a wee bit confused about the subsection 10. I have no doubt the member is correct, but I am having trouble because it would normally be referred to as a section in this amending bill.

Mr. Gregory: Mr. Chairman, you say you are confused; I am too. We just got this this morning. If you look at the bill, under subsection 4(10) in the explanatory notes it says, "This subsection ends the exemption from tax to the purchaser of a truck, truck tractor, truck trailer, tractor-trailer or semi-trailer."

As I explained, the proper wording put together by legal counsel has not reached us yet. We will get it shortly.

Mr. Chairman: Does the member for Mississauga South have something?

Mrs. Marland: Yes, I do. Under subsection 7(2) of the act --

Mr. Chairman: No. Let us get the section.

Mrs. Marland: Okay. Then I guess it is section 6 on page 4 of the bill, amending subsection 7(2) of the act. I have clauses 7(2)(b) and 7(2)(c).

Mr. Chairman: Subsections 6(2) and 6(3)?

Mrs. Marland: Yes. Do you have a copy of the amendment? Can I give you a copy? I have enough. I know we sent a letter to the Clerk this morning.

Mr. Chairman: Apparently, we do have a copy.

For the future, that is subsection 6(2), if that is the section you wish to amend or deal with.

Mrs. Marland: Subsection 6(2) is how you want me to address it?

Mr. Chairman: That is what I understand you wish. I am not a mind-reader, but I am assuming it is the one that reads: "(2) Clauses 7(2)(b) and (c) of the said act are repealed." Is that the one you wish to discuss or amend?

Mrs. Marland: That is right.

Sections 1 to 3, inclusive, agreed to.

On section 4:

Mr. Chairman: Is the member for Mississauga East prepared to go into subsection 4(10) in depth now, or does he wish it stood down?

Mr. Gregory: I do not have the amendment as yet; it is coming. Can we stand it down for a short time?

Mr. Chairman: Shall we stand down or postpone section 4?

Section 4 stood down.

Section 5 agreed to.

On section 6:

Mr. Chairman: Mr. Nixon moves that subsection 6(1) of the bill be amended by striking out "those performers" in the seventh line and inserting in lieu thereof "the performers who regularly participate in the cast of a theatrical or musical performance staged or held in a place of amusement."

Hon. Mr. Nixon: This was referred to in second reading of the bill as an amendment that would be required unless it exempts sports players who participate in games where tickets are normally sold from paying the tax on the tickets. We would not want to do this for Harold Ballard or the people who run the Maple Leafs. It is generally accepted that the 10 per cent tax on those tickets be continued. I have not heard any objection from the House on that. There is some thought, however, that professionals in other types of entertainment be exempt.

15:20

Mr. Ashe: I have a question of the minister. Can the minister make reference specifically to the inquiry by the Ontario Golf Association on its annual promotion of the Canadian Open and how that would affect it, or would that have to be continued through an order in council? I understand that has not happened for years, but the precedent has carried on.

Hon. Mr. Nixon: The honourable member is talking about tickets that would be sold for the Canadian Open at Glen Abbey Golf Club and the thought that they have been exempt in the past. I am informed by our officials dealing with the sales tax that their position would not be affected. I can give the member my assurance that we will give whatever consideration along those lines is necessary.

Motion agreed to.

Mr. Chairman: Mr. Nixon moves that subsection 6(2) of the bill be amended by striking out "7(2)(b) and (c)" and inserting in lieu thereof "7(2)(c)."

In other words, his amendment removes clause (b), leaving only clause (c).

Hon. Mr. Nixon: It removes the reference to registered charities losing the exemption and therefore being taxable.

We will be available for any questions or clarification, but a number of members, in particular the member for Mississauga South, have been very concerned about the fact that sales tax at a level of 10 per cent be placed on tickets in theatres that often have exempt performances, such as Roy Thomson Hall, Hamilton Place, the Kitchener-Waterloo Centre in the Square, the Thunder Bay Community Auditorium and our own O'Keefe Centre.

I should just indicate that the amendment that was previously put forward and to which these theatres have quite properly and definitively responded was that these theatres have most of their operations tax-exempt because they are Canadian theatre presentations. When they bring in, let us say, foreign performers, quite often American superstars, it is my thought as minister and the view of the tax officials in the Ministry of Revenue that the sales tax should be charged. We are not under any misapprehension that this is paid for by the American performers -- because of course it is not -- nor is it paid by the theatre. It is paid by the people who buy the tickets, collected by the theatre and remitted to the Ministry of Revenue.

It was our thought that we ought to be able to put the sales tax on some of these very large and costly performances -- often the tickets are in the range of $40 or even more -- and have the revenues used for general purposes, among many others the support, financial and otherwise, of cultural opportunity in this province. In case somebody thinks I am going soft in the head, I hesitate to say I at no time suggested the revenues be earmarked.

Many of us here are very committed to this kind of culture; others appreciate other types of culture. In the amendment the House unanimously approved a moment ago, we made it very clear that if these performers, Canadian or American, are playing hockey, football, baseball, wrestling or doing any of these other cultural pursuits, we take 10 per cent off the top and nobody apologizes for that.

In most other jurisdictions, most notably Quebec, the 10 per cent is applied right to the top. Anybody who goes into the Place des Arts, even if it is the choral glee club of the official opposition of the National Assembly, will pay the 10 per cent. It is true the government of Quebec has a program very richly supporting the arts, as we do -- in total ours is substantially more generous -- but the 10 per cent sales tax in Quebec applies across the board.

During the period when the member for Muskoka (Mr. F. S. Miller) was Treasurer of Ontario, this tax applied across the board at the O'Keefe Centre or any other theatres of this type. Because of the judgement of the government of Canada, which I personally find a bit soft in the head in this respect, charitable status was granted to these theatres. That meant not only that they could receive donations that could be claimed for tax credits in federal income tax returns but also that they automatically, not by the action of this Legislature but by the action of the government of Canada, became exempt from paying sales tax on these entertainment tickets.

When I talk about this amendment being revenue-neutral, I simply mean it puts us back to where we were before the government of Canada became what I consider somewhat fast and loose with the delivery of its charitable status. I cannot think of the O'Keefe Centre or Roy Thomson Hall as charitable organizations. As a matter of fact, I am hoping to go down there on Tuesday night to hear Itzhak Perlman, along with everybody else who can possibly get a seat one way or another and who are going to be paying top dollar for those tickets.

In my view, that sales tax is not charged is an inequity I am not in a position to correct at this time, although I believe it should be corrected. The argument that comes from officials at Roy Thomson Hall, O'Keefe Centre and others is that the money they make in that instance is transferred to other worthy prospects. However, that is based on a couple of things: they are charging all the traffic will bear, and an additional 10 per cent will leave them with empty seats.

I can assure the House that will not be the case for Mr. Perlman. They could charge three times what they are charging and there would be no empty seats. Somewhere along the line, as they go from Itzhak Perlman to Harry Belafonte to Joe Blow from South Dakota, they are going to come to the point where not everybody is going to pay whatever it takes to get a seat for a world-class presentation.

Personally, I am a bit offended by the concept that these theatres are charging all the traffic will bear, to quote them, and that an additional 10 per cent means there will be empty seats. Also, the idea of trans-subsidization, a new phrase I find interesting, that somehow this money goes into some kind of cultural piggy bank that is then used to finance Canadian shows, which presumably nobody wants to attend, is a bit questionable.

I do not want to argue too much, because I have indicated my arguments are not good enough to convince supposedly reasonable people, such as the member for Mississauga South and the leader of the New Democratic Party, a well-known cultural addict. However, I remember saying one other time in this House that I can count and that there is no point in my putting an amendment forward that the House, which duly represents the people of the province, is not prepared to support. I support it, but evidently that is not going to be good enough in this instance.

15:30

To be fair, even the amendment that was originally presented does not clear up all the inequities. For example, for the Canadian National Exhibition and other major exhibitions we leave an exemption for certain presentations during the period of the exhibition, therefore, if Springsteen comes to the exhibition and fills the place with 35,000 people paying $30 or $40 a ticket or whatever, that will still be exempt from taxation. It is a matter that concerns me, and in the long run I do not feel it is fair.

Therefore, I cannot argue to the House that I had what one might call the best and total solution to a difficult problem that has plagued the Ministry of Revenue for a long time.

One thing I certainly do not want to do is to set myself up as an arbiter of what is cultural and what is not. What should be taxed and what should not be taxed certainly has to be a decision taken by the House and it has to be an understandable series of either regulations or amendments to the Retail Sales Tax Act that people understand and can live with and that does not leave in the hands of the minister any particular decision that would have to be applied on a regular basis.

This does improve the situation somewhat, even with the amendment I have put forward. I say again I recognize the role played by the member for Mississauga South, who has been very effective in this regard, and by the leader of the New Democratic Party, who indicated his view before we came to the bill. I was hoping I might get sufficient support to carry it through. I am not a very graceful loser in this regard.

However, I will say further that the representatives of these theatres certainly did put forward their case at the committee in a very effective way, there is no doubt about that.

Mr. Chairman: Before the next member speaks, I have received two versions of this amendment, and the one I received second is really clearer. It reads:

"Mr. Nixon moves that subsection 6(2) of the bill be struck out and the following substituted therefor:

"(2) clause 7(2)(c) of the said act is repealed."

That is really clearer than the previous one. What is the wish of the committee?

Mr. Rae: Perhaps I can address a question to the Treasurer. In listening to his speech, I was not sure precisely what the conclusion was going to be, but --

Hon. Mr. Nixon: I put the amendment that we --

Mr. Rae: No; I am very pleased with that.

Has the Treasurer done any work in terms of why he would then continue to exclude from the exemption a labour organization or society or a benevolent or fraternal benefit society order? Why would we then be taxing the Kinsmen Club in the event of its activity, or indeed a trade union, if we are exempting an agricultural society? I fully appreciate the role of agricultural fairs, but if other organizations are fulfilling the same function, why would the minister not simply delete subsection 6(2) altogether?

Mr. Chairman: Before the Treasurer deals with that, can I get back to an answer to my question?

Hon. Mr. Nixon: Yes. The problem with the second one that was engrossed by legislative counsel, which is a correct amendment, is that two things are dealt with in that amendment, as I understand it. The first one has to do with the hockey players; we have already passed that. The second one deals with the exemption for charitable purposes. I insisted that they be presented separately because there are two --

Mr. Chairman: Excuse me. When I say two versions of the same amendment, I mean two versions of the amendment to subsection 6(2). I am not dealing with 6(1).

Hon. Mr. Nixon: I do not know where the other one came from. It is not the one I read.

Mr. McCague: Would one of the amendments be our amendment?

Mr. Chairman: No. One was handed in by the Treasurer and the other has his name on it.

Hon. Mr. Nixon: The one I read is the one I think we should be dealing with, but I would certainly follow your advice in this regard.

Mr. Chairman: It is not quite as clear as the other, but I am not hearing any yelling or screaming from anybody; so let us take the first one the Treasurer has put in.

Hon. Mr. Nixon: If I can respond to the question put by the honourable gentleman, it is our experience that the special exemption the leader of the New Democratic Party referred to has not been used in any significant way. There is, however, some thought that if exemptions are removed in certain theatres, a promoter who has a hot ticket from the United States, or at least a hot performer from the United States, will look for an exemption, just as certain universities which are exempt find that performers will go to those halls for exemption.

The indication is that we are not dislocating what is a practice now, but if some of the exemptions are removed the promoters will tend to go where the exemptions remain and simply make a deal with the people owning the hall. There is not a thing wrong with it except that it is a way around what we consider to be the intent expressed by the House that those tickets be taxable.

Mrs. Marland: Would the Chairman mind clarifying for me which amendment we are now dealing with? Which wording is it?

Mr. Chairman: We are dealing with subsection 6(2), the way the Treasurer put it in.

Mrs. Marland: Does the amendment cover the concerns and leave in clause 6(2)(b), which has "a registered charity," as part of the act? Is that what it is doing?

Mr. Chairman: This is why I suggested that we change over to the other version of the amendment, which is much clearer.

Hon. Mr. Nixon: Perhaps I can be of further assistance. It is obvious that we are not going to clarify this. The written amendment that came to the member, which was not moved by me, has a reference to those performers in the seventh line of --

Mr. Chairman: No, sorry. That is subsection 6(1).

Hon. Mr. Nixon: That is right, but where did it come from?

Mr. Chairman: I believe the Clerk of the House just got it from one of your assistants. We asked for some copies.

Hon. Mr. Nixon: I have much too much help. It may assist you if I withdraw the amendment and move that subsection 6(2) be deleted.

Mr. Chairman: Mr. Nixon moves that subsection 6(2) of this bill be struck out.

Can we have this in writing at the table?

Mr. McFadden: Can I ask one simple question? Perhaps the minister can shed a little light on this. In the recollection of the minister, has subsection 7(2) of the Retail Sales Tax Amendment Act been amended since the Revised Statutes of Ontario came out? Are we still dealing with the version of the act that appears in the RSO? I do not have the consolidated version of the act.

Hon. Mr. Nixon: I am informed that it has not.

Mr. Breaugh: We will support the proposed amendment from the Treasurer. There seems to be a bit of confusion. One of the problems that emanates from this is that it sometimes gets a little tricky in terms of exactly how the amendment is proposed. It seems to me that the last version of the Treasurer's amendment is the most straightforward and probably the simplest and best way to proceed. I do not know that he has resolved everybody's problems in this regard. It will be very difficult to do that unless we do it in committee outside of here, where we can have the affected groups with us as we go through it.

It seems to me that the Treasurer has accepted in practice the arguments of the larger groups affected. In other words, the main problems have been addressed by the Treasurer in this amendment. It must be right, because I have never felt so fiscally irresponsible in my life. I am following his leadership this afternoon and I just thought I would point that out.

15:40

Mrs. Marland: I think I can help the member for Oshawa (Mr. Breaugh) to feel less uncomfortable in terms of fiscal responsibility. The intent of the amendment that has now been proposed by the Treasurer, for which I thank him, is to leave exempt those theatres that are currently categorized as having charitable purpose exemptions. Is that correct?

Hon. Mr. Nixon: It is.

Mrs. Marland: Then I thank the Treasurer on behalf of those theatres, the Roy Thomson Hall, the Massey Hall, the O'Keefe Centre, the Centre in the Square in Kitchener, Hamilton Place, the Thunder Bay Community Auditorium and the National Arts Centre in Ottawa.

In saying how happy I am on their behalf that they will retain their exemption from the 10 per cent sales tax, I also want to commend the Treasurer for bringing in this amendment to his bill. In so doing, he has recognized that we are dealing not just with the performers in these theatres -- and this is the part the member for Oshawa will appreciate -- if this amendment to the act had not gone through, it would have been very grave for the nonprofit theatres now enjoying this exemption.

If they are not able to make a profit on some of their shows then the alternative will be that the theatres have many dark days and weeks, which in turn affects a lot of people who are unionized and who are working, such as stagehands, ushers, the theatres' restaurant people, related industries, bars and so forth. There are a lot of jobs related to a theatre being open and related to people other than the people who actually perform on stage.

I will not take up any more time since no debate is necessary. I appreciate the support the government has given in recognizing the need for the continued exemption of these theatres.

Hon. Mr. Nixon: Before the member for York South (Mr. Rae) proceeds, perhaps I should explain to him that by not proceeding with the original amendment and going with the omission of that whole subsection, labour organizations and fraternal clubs are also removed from the ambit of this change.

Mr. Rae: I was aware of that and I was about to add my compliments to the Treasurer. This is an example of how minority government can be made to operate, even though Treasurers do not like amendments to their legislation. We can show in a responsible way that even during the discussion on budget bills there can be amendments, not of an enormous kind and not in a way to be exercised irresponsibly, where it is determined that a change is in the public interest after consideration in committee. We should be proud of the fact that we have been able to make that change.

That is all I want to say. Those who are affected who work in the industry, which is a very labour-intensive industry, appreciate the fact that whatever insecurity may have been caused by the original announcement has now been removed. It is a good step to take at a time when that security will be there. I want to thank the Treasurer and wish him well for the rest of the discussion.

Mrs. Marland: There was one statement the Treasurer made that I thought we should not leave on the table. When he talked about these theatres having cultural events such as wrestling, I think the record should show that none of the nonprofit theatres of which we are talking ever have that kind of entertainment. As a matter of fact, the American superstars who have been a concern to the Treasurer in regard to the amount of money that is involved in their performances are not performing generally at these theatres; they are mostly at Maple Leaf Gardens and at the Canadian National Exhibition, which is rather interesting, because the CNE was going to continue to be exempt. Even with this act, the CNE qualifies as an agricultural fair.

I point out that with some encouragement from their auditors the theatre owners themselves, once they were aware of what the impact was going to be -- and in this province it was going to be $1.6 million -- organized and very clearly did a very professional job in bringing the facts to me as the culture critic for the Progressive Conservative Party. In hiring the firm of Woods Gordon, they made an investment to bring forward the truth about what the impact would be. There would have been a very grave impact on the people of the province had the bill gone through as originally presented.

I commend the theatres, the Ontario Arts Council and all the performing groups that supported the rally to bring out the facts of whether an item that was revenue neutral was in fact revenue neutral when it was discovered that it was going to be far from that for those people involved. The people who enjoy those performances in this province will now recognize that the work of those groups has been in their interest and on their behalf.

Mr. Breaugh: I have one final note. I think the Treasurer had a point. I do not believe he was wrong in principle but in practice. The difficulty will be in the future. If he wants to win his point in principle and not see the spillover effect that he has seen, for example, around this proposal, he will have to identify in a much clearer way his support for cultural and artistic groups. He is going to have to put them on a basis where they are not hand-to-mouth operations. They need this kind of small edge, in the form of a tax exemption, to stay alive. Let that be the benchmark for the Treasurer.

If at some point the Treasurer wants to win the theoretical argument and carry it through into the realm of practice, he will have to make sure these groups get themselves on a solid financial footing. This may mean the government provides its funding in a more direct way.

To put it bluntly, he will never get, especially in a minority situation, the support of the Legislature for this kind of approach. It may have a theoretical, sound basis. I do not believe any of us can argue in a logical way why someone who attends a sports event must pay the sales tax on the ticket, but if he chooses to participate in some other kind of cultural activity, in another locale, he is exempt from it. There is really not much logic to it.

I am afraid the Treasurer is caught up in the practicalities of the real world here. There are a number of groups trying to function in our society, most notably in the centres with cultural activities that have been mentioned, and they are in very precarious financial shape, so that any movement on the part of the Treasurer which looks on the surface not to be substantial will have ramifications for them. It may well mean they are out of business.

As other members have said, a number of people are trying to establish a Canadian art form in a number of fields and they need all the help they can get. The reason we are happy the Treasurer saw fit to move his amendment this afternoon is that it does at least recognize the reality that they are in the kind of financial position where they cannot do without it.

The Treasurer has to put it on record that if he wants to move at some time in his next budget to provide a sales tax process which applies to everyone equally, he will have first to make some moves to see that our arts and cultural communities get that substantial financial support.

The Chairman: Are there any other comments or questions with regard to this motion of the Treasurer? I will read it the way it is. Mr. Nixon has moved that subsection 6(2) of this bill be struck out.

Motion agreed to.

15:50

Mr. Chairman: Mrs. Marland, I assume you want to withdraw your motion to subsection 6(2). Is that correct?

Mrs. Marland: Yes, that is correct.

Mr. Chairman: Thank you.

Section 6, as amended, agreed to.

Sections 7 to 11, inclusive, agreed to.

On section 12:

Mr. Chairman: Mr. Nixon moves that clause 45(3)(i) of the act as set out in subsection 12(2) of the bill be amended by inserting after "maximum" in the 42nd line and in the 44th line "in the case of a vehicle that is not a bus, as defined by the minister."

Hon. Mr. Nixon: During the committee hearings, representatives of the industry -- which is moving actively to provide alternative fuels, other than gasoline and diesel fuel, to cars and particularly to buses -- felt the provision of the bill would have an extremely detrimental effect on their fledgling industry. I think they convinced most people in the committee, certainly myself, that we should continue the full sales tax exemption, that is not just the cost of the retrofitting for propane or natural gas. The provision of this amendment does that.

Mr. Chairman: Are there any questions or comments? The member for Durham West.

Mr. Ashe: Thank you, Mr. Chairman; you got it right, congratulations.

I want to point out again that it is nice that the Treasurer was listening -- the Minister of Revenue, Treasurer, whatever hat he had on at that time -- when he was in front of the committee. The industry -- as he indicated quite rightly, a rather fledgling industry, particularly in the case of the buses and so on -- needs that kind of assistance for an additional period. I suggest overall, when the Treasurer thinks of the economic impact of a downturn in that sector of the economy, which is apparently growing in Ontario, it would probably mean a negative impact on his overall Treasury income if his original section in that regard had gone forward.

It is one of those times of weighing the losses and the overall gains in the total economic picture of employment, income tax, sales tax revenues from purchases of those employees and so on. That is a realistic recognition that this industry still needs some assistance if it is going to grow at all as a future alternative program in this province and in this country.

Mr. Breaugh: We will support the amendment proposed by the Treasurer.

Hon. Mr. Nixon: Does the member have anything nice to say about the sensitive, thoughtful Treasurer?

Mr. Breaugh: I have to say that the Treasurer was thoughtful and sensitive and fiscally irresponsible.

Motion agreed to.

Section 12, as amended, agreed to.

On section 13:

The Deputy Chairman: Mr. Nixon moves that subsections 13(1) and (2) of the bill be struck out and the following substituted therefor:

"(1) This act, except subsections 4(10) and 12(3), comes into force on the 30th day following the day it receives royal assent.

"(2) Subsection 12(3) comes into force on the day following the day this act receives royal assent."

"(2a) subsection 4(10) comes into force on the first day of January, 1987."

Hon. Mr. Nixon: The only operative part is subsection (2a), which is necessary because, as some of my predecessors in this office have pointed out, this bill has been hanging around in Orders and Notices a bit longer than I would have liked and a bit longer than was originally planned. With minority government, the idea is that these matters not go into effect on the night of the budget or whatever, but that they go into effect at a certain period of time after they are enacted. In this instance, with the best of intentions, time has run out on me and we do want the subsection referred to to go into effect on January 1. That is less than 30 days away, thank goodness.

Mr. Gregory: The only thing that bothers me in dealing with this at present is that we have to go back and deal with section 4. It is on this very thing. To accept this at this time, without further debate on section 4, takes things a little out of context.

Hon. Mr. Nixon: Would it be suitable if we stood this down until the previous amendment, for which the member has given notice, is dealt with? We could also deal with them both. With your permission, Mr. Chairman, perhaps the amendment should be stood down so that the member for Mississauga East can present his amendment to subsection 4(10).

The Deputy Chairman: Is it agreed?

Agreed to.

On section 4:

The Deputy Chairman: Mr. Gregory has an amendment to section 4 and he moves that section 2 of the bill be renumbered as subsection 2(2) and that the bill be amended by adding thereto the following subsection:

"2(1) Section 2 of the said act as amended by the statutes of Ontario, 1981, chapter 38, section 1; 1982, chapter 36, section 3; 1983, chapter 27, section 4; and 1986, chapter 1, section 3, is further amended by adding thereto the following subsection:

"(1a) Notwithstanding this subsection (1), every purchaser of highway truck tractors having a gross vehicle mass rating as defined by the minister of 11,778 kilograms or more, trucks designed for the carriage of goods or freight having a gross vehicle mass rating of 11,778 kilograms or more, and truck trailers, tractor trailers and semi-trailers designed for the carriage of goods or freight having a gross vehicle mass rating of 11,778 kilograms or more shall pay to Her Majesty, in the right of Ontario, a tax in respect of the consumption or use thereof computed at the rate of

"(a) three per cent of the fair value where delivery of the truck, truck tractor, truck trailer, tractor trailer or semi-trailer is taken by the purchaser after the 31st day of December 1986, but before the first day of January 1988, or five per cent of the fair value where delivery of the truck, truck tractor, truck trailer, tractor trailer or semi-trailer is taken by the purchaser after the 31st day of December 1987, but before the first day of January 1989, but this subsection does not apply to trucks, truck tractors, truck trailers, tractor trailers or semi-trailers prescribed by the minister to be excluded from this subsection or used in any manner, process, industry, enterprise or by any person or class of person prescribed by the minister as being excluded from this subsection."

16:00

The Deputy Chairman: This deals with section 2 and not section 4. Shall section 4 carry?

Mr. Gregory: No. We are talking about section 4, but the amendment changes sections, and it is section 2 in the act, I believe.

Once again, I want to rise on this particular aspect of the bill and join in the praise that was paid to the Treasurer for the previous two amendments offered by him in his generosity. I certainly hope that spirit is going to continue when we talk about another group of people who sincerely need help from a very generous Ontario government. We know it is generous because we heard the speech about Minaki Lodge today, and when we can give away tokens like that we have a very generous Treasurer.

Hon. Mr. Nixon: The money was given away long before we came on the scene.

Mr. Gregory: How am I doing?

In all seriousness, there has been a great deal of dialogue on this, for one very simple reason. That exemption was given to the trucking industry some time ago because it found itself in dire circumstances. The exemption from sales tax has been a very tremendous shot in the arm to that industry and has enabled it to begin a very good recovery.

What we are doing by suddenly removing --

Interjection.

Mr. Gregory: Are you all right?

Hon. Mr. Nixon: She is expressing an editorial opinion.

Mr. Breaugh: That sneeze is just harassment. You should be used to it.

Mr. Gregory: I thought I had shocked you or something.

When we suddenly remove this exemption, a couple of things happen. First, the cost of equipment suddenly becomes seven per cent more. To a troubled industry that is just getting over its massive problems and is starting to recover, this represents a fairly stiff burden.

The other consequence is and has been to cause people who are thinking of buying equipment to order it early with no plans to order new equipment during 1987. We have examples of the results of this. Mack Canada of Oakville is a good one. As a result of this incoming legislation, Mack has increased its production from 14 trucks a day to 17 trucks a day, but beginning on January 1, its production will fall to 10 trucks a day. That is a reduction of five sevenths of its production from what it was before this rush started, not to mention that the labour force was increased to increase from 14 trucks a day to 17 trucks a day and will then go down because of the reduction to 10 trucks a day. There is actually a loss of staff because of the difference between 10 trucks per day and 17 trucks per day.

This is a substantial loss in jobs. If we were talking only about the major manufacturers, and Mack is certainly one of them, that would be one thing; it is estimated that the loss there will be about 300 jobs as of January 1. However, we must take into consideration as well the many subcontractors, parts manufacturers, parts dealers, sales personnel, all of these things, to come up with an estimated loss of probably about 1,200 jobs as a result of this move.

I recognize that the Treasurer says we need the money, and we are probably talking about $65 million and --

Hon. Mr. Nixon: We are talking about $68 million.

Mr. Gregory: It is $68 million, give or take $3 million.

Mr. Haggerty: What is $3 million?

Mr. Gregory: What is $3 million? We are talking about $68 million.

The Treasurer says he would be losing $68 million if he did not do this, but I point out to him -- and I think I have the figure here somewhere, but the Treasurer no doubt has it at the tips of his fingers -- that the additional cost he is absorbing by increasing the exemption on fast foods from $1 to $2 is $35 million. Therefore, he is giving away about half, while taking the $68 million from the trucking industry.

I do not think the additional exemption he is giving the fast-food industry will create any more jobs; however, the elimination of the exemption on the trucking industry is going to cause a job loss.

I just want to insert at this point, particularly when there was about $100 million more in additional unexpected revenues into the province this year, the question of whether we are picking the right target when one considers the vast importance of the trucking industry to the economy of the province. I am not suggesting for one minute --

Mr. Haggerty: Yes; however, what the industry actually said was that it would not mind phasing it in over a three-year period.

Mr. Gregory: I was just getting to that. I want to thank the member for Erie (Mr. Haggerty). He must have anticipated my remarks and he is quite correct. I know he will support my amendment because he said that.

The trucking industry, as the member for Erie has said, has not even suggested for one minute a continuation of this exemption. It recognizes that it has been having a break for a few years and it recognizes now that it has to get into the ball game.

If it costs $68 million to overlook this, then I suggest we phase it in, as my amendment suggests; we eliminate the exemption on a phase-in basis. In other words, rather than paying seven per cent in 1987, they pay three per cent. Then in 1988, they pay five per cent, and in 1989 they pay the full seven per cent.

This would mean the Treasurer would be losing only four sevenths of the $68 million, about $40 million in the first year. I think that is just about $5 million more than he will lose on the increases to the exemption on fast foods.

We are playing rather foolish politics with this. We are taking from one pocket and putting it into another pocket. The net gain to the Treasury is about $5 million, if these figures are totally accurate.

However, for that $5 million he is getting, which is really all he is getting, he is creating a severe hardship in the trucking industry and in the labour market of these truck manufacturers.

I ask the Treasurer to continue on in his spirit of generosity, which he has exhibited so well today, and consider this amendment very seriously, having regard not simply that I, the member for Mississauga East, am asking him to do so, but because of the pleas of those from the trucking industry who have tried to impress on him the additional costs involved because of the move he is making here.

Mr. Breaugh: I have followed with some interest the argument about whether this exemption should be withdrawn. As most members experienced, everybody who owns a trucking company in my area wrote me a letter and told me how sad they were that this exemption was being taken away.

Frankly, I was sorely tempted to be supportive of the amendment that would do something to help them in their situation. Then I spent a little bit of time talking to some people who actually work in the trucking industry -- not those who own it, but those who work in it.

They gave me some rather good arguments for why the exemption should not be continued. First, the theory was that by granting a sales tax exemption one would increase the employment opportunities, and for some, for a brief period, it did. Building big trucks, like building every other form of automotive device, is something that is cyclical. Companies build trucks when they can sell them; if they cannot sell them, they do not build them. They do not want people working in their factories when there is no market for trucks. The irony was that the government of Ontario truthfully subsidized that sector of the economy and did not get anything in return.

16:10

In other words, if our experience had been that the province decided to subsidize the trucking industry through its budgetary measure -- that is what it did, in fact -- it should have at least had the presence of mind to insist there be some no-layoff proviso or that there be some reasonable expectation of employment. In my mind, if one is going to be subsidized by the government, the government ought to get something in return. Most of the time the government is looking for employment opportunities.

When the previous Treasurer decided there should be a sales tax exemption for these manufacturers, he should have had the presence of mind to say, "The way to get the exemption is to guarantee your work force. In other words, if you employ 200 or 300 people in a shop that makes big trucks and the rest of the people of Ontario are subsidizing your nonpayment of taxes here, you simply guarantee employment for 200 people for a year, two years or for however long the sales tax exemption applies."

The previous Treasurer did not do that. The end result for many people who worked in the trucking industry was that they did not get what the government sought. The government sought an increase in employment opportunities. The government got that for only as long as the manufacturer thought he needed it. When the manufacturer decided he did not need the workers any longer, government subsidy or not, the workers were out the door.

I have read some interesting arguments that there has been a slight upsurge in the manufacturing of these heavy vehicles in the latter part of this year to take advantage of what buyers see as a bit of a sales advantage here. That is fair. I suggest that people spend $80,000 to buy a big rig when they need to. The sales tax exemption is a factor but not the major factor.

I do not know of any trucker who goes to buy a new rig at those kinds of prices for the fun of it. He buys it out of economic need. When the old truck cannot run on the road or when it takes more to repair it than it costs to buy a new rig, that is when a trucker buys one. He does not care whether or not there is a tax exemption on it. That is not the critical factor.

This is a strange afternoon because we have the member for Mississauga East arguing for socialism. I do not know how he came to that position but he is. We have him arguing for a subsidy of large corporations. I do not know how that came about either.

Here I am saying: "Stop this corporate socialism. Get back to your roots. Get back to free enterprise." I have had the opportunity to meet many of the people who operate in the trucking industry in my own region, and I have never met a more rabid group of free enterprisers in my life. Some would go so far as not to be even polite in their arguments. Some are very direct, straightforward, free enterprise people. If one were to suggest to them for a moment that they take a handout from the government, they would be irate. If one were to suggest for a moment that they were corporate socialists, they would be even more irate.

To be fair, we have to say that as much as we would like to, as much as the temptation is there to provide some continuation of the sales tax exemption in this category, we have to call a halt to it. if some kind of agreement were put before the Legislature that said, "In return for continuation of the sales tax exemption, we will guarantee the jobs in that industry," that would throw a whole different light on it. That then is not a giveaway but a deal or a negotiated circumstance.

I do not see that in front of me now. I do not see any requirement that would make any of those manufacturers retain their employees during the lifetime of the extension of this exemption. That is not before us. Although I have not had a chance to do this, I wonder what would happen if one were to go to the industry and say: "The contract or the agreement is that you guarantee the jobs in that sector. Do not give us good intentions or anything like that because you are a business person. You would not accept that from anybody who bought your product."

If a guy went into a shop and said, "I would like a $100,000 Mack truck, and I promise I will do my best to pay for it; but if I cannot pay for it, you have my good intentions, take them to the bank;" the guy selling the truck would say: "That is not good enough. If you buy a product from me, you sign a contract that says you will pay me this amount over this period." That is a hard-headed business point of view, but we all accept it. The hard-headed business point of view is the stance I am going to take this afternoon.

If the government wants to draw up a contract which says, "We will continue the exemption, and as part of that contract we will guarantee the jobs of people who work in building the trucks, in driving the trucks and in keeping that whole industry on the road," I am prepared to enter into those negotiations. However, the proposal before us this afternoon is a giveaway. It continues the sales tax exemption and gives away taxpayers' money. There is nothing on the table for the taxpayers. There is nothing on the table for the workers in the industry.

I have had a chance to talk to some truckers about this and they are very forthright in their language. If the government provides them with some job security attached to this, if that were the agreement we were talking about, they would look at that in a different light.

There is not one of them out there who does not believe that in January, February and March of next year his job will depend on whether his employer needs him. They understand, because it has happened to them regularly during their working lives, that the moment an employer decides on his own that he does not need an employee any more, he is out the door. That is life in the trucking industry. It is a tough one.

They understand that the expectations placed on people who drive the big trucks are unreal. It is a hard, tough life. There is no namby-pamby socialism around this stuff. They produce or they are gone. If they have a problem on the job, they are gone. If they do not produce the vehicle the way the manufacturer wants it, they are gone. If there are no sales, they are gone. Everybody who works in every segment of the auto industry knows it is cyclical in nature. They will build more trucks and hire more people this fall. When they decide they do not need them any more, the employees will be gone; they will be out of work for a while. People working in that sector of our economy understand that clear, hard argument only too well.

If the government wants it, it should put a package on the table before the Legislature which says: "The rest of the nine million people in Ontario, who will not benefit from this exemption, will get something from it. They will get job guarantees in that sector."

I can accept that argument, because it would mean that somebody employed in that field in January and February would probably give us the money back in income tax or sales tax on other items. They would have more disposable income. That seems to be a sensible, bargained solution. The government should not put something in front of me that says, "We will give the money away and get nothing in return." I, for one, find that a silly idea. It is one that has never worked. It never will work, because it does not make any sense.

Mr. Gregory: I want to comment quickly on some of my comments of my new free enterpriser friend, the member for Oshawa. He is quite right that this amendment might seem to him to be of a socialistic nature. It shows that I have a flexible mind.

However, the member for Oshawa has entirely missed my point. He is stating, probably quite accurately, that when tax concessions or tax exemptions are first given, perhaps some guarantees of jobs should be there. I cannot take issue with that at this point. I am not talking about a new exemption. I am talking about a method of getting rid of the old one.

The present proposal by the Treasurer is to eliminate the exemption just like that. I think this is going to cause a great deal of hardship in the business, a great deal of unemployment and a great deal more loss to the Treasurer than he is expecting. In my last calculations, I had it narrowed down that he will be in for $5 million, as an end result, with what he is going to gain from tax here and what he is going to lose on the fast food industry.

We have not taken into consideration the unemployment that is going to come as a result of this, which has already been demonstrated with 300 unemployed in the truck manufacturing business alone, plus the subtrades, sales help and whatever, the loss of jobs there and the resultant loss of retail sales tax because these jobs were lost.

16:20

I do not know whether we can even put a figure on what the loss to the Treasurer will be. I think he is actually giving away more than he is getting. He may see giving every person who buys a hamburger another dollar exemption as a very popular thing to do, but it will not produce any jobs. Yet he is going to hit every trucker who buys an $80,000 rig or a $100,000 rig and has to pay another $7,000 in taxes. It has been demonstrated that will create a loss of jobs.

We have our priorities wrong. I agree with what the member for Oshawa said. I suppose I had better re-examine my position. I have no fault to find with the idea that if we create an exemption for somebody, we must have job guarantees.

Has the Treasurer asked for job guarantees from the fast food industry because he is giving an additional dollar exemption? I do not think so. My friend the member for Oshawa missed that point. Perhaps every clerk in a McDonald's store should have a guarantee of a job because there is an additional dollar exemption. Fair is fair. If it works for one, it works for the other.

With the greatest respect, I appeal to the Treasurer to think about this a little more rationally than he has done. He will cause a great deal more trouble if he does not adopt my amendment but goes ahead blindly and makes this move. I am not speaking from the standpoint of giving away money. I do not believe in giveaways either. I would not have given away Minaki Lodge or the Urban Transportation Development Corp.

Mr. Callahan: Would you have bought it?

Mr. Gregory: No, and I did not, as a matter of fact.

I do not believe in giveaways, but I do believe money has to be spent or sacrificed in the event that jobs and businesses can be preserved. The trucking industry faces a rather bleak future, particularly with the deregulation bill the Treasurer has coming in. There will be an opening up of the industry and great competition from American truckers. The US industry is virtually controlled by three trucking companies because of this. Now we are adding to their problems.

The Treasurer is doing this a little prematurely. I ask him to reconsider and phase in the loss of this exemption over three years so that all businessmen have a chance to adjust to it.

Mr. McFadden: I had an opportunity in the standing committee on finance and economic affairs to hear the submissions that were brought to us by the various organizations affected. We heard from the Ontario Trucking Association, the Motor Vehicle Manufacturers' Association, the Canadian Truck Trailer Manufacturers' Association, and we received a submission in writing from the International Association of Machinists and Aerospace Workers.

Each one of those organizations and others that appeared before our committee or sent in submissions in relation to this proposal brought forward by the Treasurer suggested that we allow for a phase-in period. A really strong sentiment was expressed that several hundred jobs would be lost if the current Retail Sales Tax Amendment Act were to go ahead. It was even suggested that the job loss could be in excess of 1,000.

One of the things that struck me when listening to the arguments back and forth between the Treasurer and the industry representatives who came was the history of the exemption, the reason for it and why this phase-in period is desirable. Initially, the exemption was brought in by the member for Muskoka when he was Treasurer to assist the truck manufacturers and the trucking industry, both of which were going through some very difficult days in the early 1970s.

Based on the statistics I have seen, it would appear the tax exemption had its effect. It got the truck manufacturers back into production and undoubtedly it had the effect of putting back to work quite a few hundred workers. It could have been more than 1,000 workers. Now that we find the exemption ending, it is the unanimous view of the people in the industry, from the manufacturers to the truckers to the unions involved, that this will lead to a job loss. I suppose we can discuss how many jobs could be lost. It may be a few hundred or it could be 1,000 or 1,500; who knows? I am disturbed that this argument about job loss does not seem to have generated much interest one way or the other in so far as the Treasurer was concerned at the committee.

It strikes me that we are very fortunate in Ontario today. We have a low rate of unemployment, lower than any other province in Canada. In southwestern Ontario, where the automotive and truck industry is located, it is even lower than in other parts of Ontario, northwestern or northeastern Ontario. I think we ought not to assume that this is the natural ordering of things, that we can never have another recession or that the current state of low unemployment is a given that we can expect to have for years and years to come. Therefore, it worries me that when an industry comes forward and makes a strong submission to government that a proposal in the budget could cost hundreds of jobs, this is simply overlooked. It disturbs me that the very reasonable proposal put forward by the trucking association for a phase-in as set out in this amendment has not been adopted by the government.

The trucking association, the truck manufacturers and the unions have not been unreasonable in their approach. They have not stated to government: "We do not want any tax. Forget it." What they did was come before the committee, admit that perhaps as an industry they were not entitled in perpetuity to pay no tax, but they suggested the best route was to phase it in over a period of time so that the industry itself could adjust.

I do not know; perhaps the Treasurer will agree that a phase-in is a good thing. Perhaps by the end of this debate he may agree to that, but it does seem to me a bit strange that the government would not be listening to the industry or the unions and would not be adopting the kind of very reasonable proposal that has been put forward, not only in this amendment but also by the various people in the trucking industry concerned.

One of the dangers we are now facing is that it has been so long getting to this debate that perhaps a lot of the jobs have already been lost in the sense that a lot of truckers have put in their orders for heavy trucks, assuming this tax will come into effect around the beginning of the year. As a result of that, as the truck manufacturers have been worried about, the orders will dry up in the early part of 1987, since everybody has been pushing to try to get through the deadline before any tax was attracted by their purchases.

I hope the government will look favourably on this amendment and on the very reasoned and reasonable submissions our committee received from the trucking industry, the manufacturers, the truckers themselves and the workers and go along with this amendment. It would be ill advised for us in this Legislature not to do this because if we do not, we are playing a bit fast and loose with the jobs of several hundred workers who are going to be prejudicially affected by the proposed amendment to the act if it goes in as proposed by the Treasurer.

16:30

Hon. Mr. Nixon: I have listened very carefully to the remarks made by the honourable members. I have noted the amendment and certainly given it consideration.

The people who appeared at the committee made good a presentation. I thought perhaps some of them overstated the case a bit. One of them indicated there would be a loss of 2,000 jobs. Frankly, I do not believe that is the case.

Mention has already been made of the fact that employment in the trucking industry is erratic. I asked for some information about the cyclical nature of the employment, and the figures available to me are really not cyclical, they are erratic. I believe it is true to say that when the trucks are selling the people are making them.

I drive past a Mack truck plant right across from the Ford plant in Oakville every day and I have always been interested to see it expand from a very small building. I have watched the strikes going on there on occasion, unfortunately. But it has certainly been able to maintain its fiscal position and to continue to expand and to maintain its reputation. Other truck businesses have done the same, and the business has been good. I am informed, for example, that industry profits are at an estimated 15-year high and that the recovery following the difficulties in 1982 has been substantial.

I remember when the exemption was brought forward. It certainly was in response to economic difficulties that were experienced in many parts of the economy, and the Treasurer of the day had good and sufficient reason for the exemption. However, of the provinces that have a sales tax, Ontario was the only province to provide the exemption for trucks. Consequently, interprovincial carriers still had to pay tax to the other provinces on the basis of the percentage of distance travelled in each province.

The honourable members will know that railroad rolling stock was not exempt. We sometimes tend to think of railroads as being some other government emanation that we are not concerned with, but it did give an advantage, which may or may not have been intended, to the trucking industry in that buyers of railroad rolling stock still had to pay the full seven per cent.

The sales of heavy trucks increased both in 1985 and in the first half of 1986, and we expect real growth in the economy that is so pronounced as at least to alleviate the slump the honourable members have been predicting will begin, if this amendment is carried, on January 1. There is some indication of additional sales as we get up to the end of the period of tax exemption, but I do not believe the changes will be much more than the other erratic changes that have been experienced in the past three years in the manufacturing industry. We believe the buoyant economy will soon take up that slack.

I believe, along with the member for Oshawa, that the trucking companies buy trucks when they need them. They are marvellous pieces of machinery and they have come to a very high state of perfection, both for the effectiveness of the job they do pulling heavy loads and for doing so in a safe and reasonably comfortable way. The competition seems to be alive and well in that industry -- very much so indeed.

I appreciate the support for the amendment indicated by the spokesman for the New Democratic Party. I notice the rather effective and intricate way in which he was able to substantiate that position and I am very sensitive to that.

The fact that the amendment calls not for the rejection of the government's position but for phasing it in is interesting. We feel we are not in a position to forego the revenue, which is estimated in the first full year to be about $68 million.

Mr. Davis: What are you going to do with all the money?

Hon. Mr. Nixon: I am thinking of rehiring the hangman.

I hope the honourable members will see fit to support this, and perhaps from time to time in the coming year we will be able to report on just what the effect has been. We do not think it will be seriously deleterious. We think any downturn in manufacturing will be short lived and we hope the general economic growth will resume and tax will be payable.

Mr. McFadden: I am curious to know whether the Treasurer has the figures on one point he made in his statement, that Ontario is the only Canadian jurisdiction that provides an exemption on heavy trucks for retail sales tax. If he knows, can the Treasurer tell us roughly what percentage of the heavy truck manufacturers are located in Ontario? I do not have the previous budget to know the basis on which this was done, but I assume one of the reasons was that the heavy trucking industry is centred in Ontario, that it made sense at the time and perhaps still makes sense to continue the exemption as an incentive to that industry since it probably is Ontario-centred. The other provinces may not have the same economic incentive to do it because they may not have much of a trucking industry to which to grant an incentive.

Hon. Mr. Nixon: I do not think we have that information readily available, but if it is known anywhere in the universe, the gentleman in front of me will know and we will provide the information to the honourable member, either now through me or later when we have an opportunity. We must understand that although trucks are manufactured here, probably more of them than anywhere else, if they are bought in some other jurisdiction, the sales tax applies there. I understand that even if one buys it here and drives it to the other jurisdiction, if it is tax-free here and taxable there, the tax is payable at least in part.

Mr. Gregory: In his last remark, did the Treasurer say he wanted to make sure that the taxes are payable at least in part?

Hon. Mr. Nixon: No; payable in part in other jurisdictions where they have a sale tax on trucks.

Mr. Gregory: I see. I cannot add much more to what I have said. Unfortunately, because of a phone call I had to make, I missed most of the Treasurer's remarks. I assume that while I was out he said he was going to accept my amendment. Is that correct? No, it is not correct.

Mr. Harris: I have a couple of comments for the Treasurer. I also apologize. Is he the Treasurer today or the Minister of Revenue?

Hon. Mr. Nixon: Minister of Revenue.

Mr. Harris: But he got his marching orders from the Treasurer on this.

I am sure a lot of points have been made about the concern in the trucking industry, at least in the manufacturing sector and with the sales people and those who purchase trucks. I have had a number of discussions with people in my riding who are involved in the trucking industry. I would like to point out to the Treasurer, I guess from a northern Ontario perspective, that not only does this impact around the province and on the trucking industry -- I am sure my colleagues have pointed out the numbers of the projected job losses attributable to the imposition of the sales tax -- but also it particularly impacts on northern Ontario if it adds to or increases the already burdensome transportation costs that small industries and consumers in northern Ontario face.

This is a time when we have all acknowledged the great economic recovery and boom that are taking place in southern Ontario where transportation costs are not all that significant. This further adds to the problems of small northern Ontario industries and retailers, as these costs escalate and are passed on eventually to the consumers.

When the Treasurer brought in the proposed amendments to the retail sales tax in this area, perhaps the extent to which northern Ontario was not participating in the recovery was not fully known. It ought to have been known in some sense because there have been a considerable number of layoffs in many of the industries in northern Ontario since the budget of the Treasurer. Many concerns have been expressed to me that this is a very inopportune time, for northern Ontario in particular, to be placing this added burden.

16:40

Most of those involved in the sale of trucks have indicated to me a rush of interest in purchasing trucks. Had delivery been able to be made before the end of 1986, there could have been some short-term benefit to those companies that build, supply and sell trucks. However, they tell me that even that anticipated flurry that could have been of some benefit, albeit in the short term and only for 1986, did not develop because they could not respond with delivery. They were getting customers coming in and saying they would like to order a truck provided they could get delivery before the end of 1986. When they could not get delivery before the end of 1986, the orders were cancelled. They were not interested.

It is the type of tax that should be imposed when good times are coming, when the trucking and transportation industries are healthy. Then it is a method of raising funds that is not noticed considerably, if it can be passed on. I want to relay to the Treasurer that it cannot be passed on at this time in northern Ontario. Those small businesses and truckers are already feeling the pinch with the 15 per cent tariff affecting the lumber industry. That is another reality that has come on since the budget. As he knows, the lumber industry relies very substantially on either buying and operating its own trucks or using a carrier to which these additional costs are again added on.

That is another area that may not have been predicted by the Treasurer when he brought in his budget. It is the whole area of depression that is hitting the softwood lumber industry. In my community, the great riding of Nipissing, and even more so in some of the other ridings throughout the rest of northern Ontario, that in itself may be a reason for the Treasurer to take a little softer stance on this proposal, whether it be by way of phasing in or by way of saying, "In view of what has happened since I brought in my budget...."

I am trying to come up with some reasons the Treasurer could use to say that it made sense when he made up his budget and brought it in, but that things have happened in northern Ontario where the trucking industry is of paramount importance and of more significance to the north than it is to the south. He could say that since the preparation of the budget, things have happened that have caused him to take a second look at this. On second reflection, he would not have to change his mind about what was appropriate when he brought in his budget, but rather he would reflect with us on what is appropriate now.

I hesitate to add to this argument by suggesting that is an appropriate reason for budget bills to be delayed six or seven months before they are dealt with, because I do not think that is appropriate. However, in this case, on this particular bill and on this particular amendment that has been placed by my colleague, it may be of benefit for the Treasurer to have had those six or seven months of experience of what has happened in northern Ontario. I ask the Treasurer to reflect on those convincing arguments, on some reason that he might even accept a phasing-in of this tax.

Hon. Mr. Nixon: As usual, I find the honourable member compelling, but I cannot agree with him entirely on these matters. I am not going to indicate that I am accepting the amendment. It is not an unreasonable amendment in any way, but we are going for the full restoration of the tax and the revenues.

The honourable member who has just spoken is aware that the cost of the truck, including the sales tax, is added to the capital cost allowance of the trucker and it is on a basis of writing the truck off in three years. It does not make it that much easier to buy; but even on the argument that with full knowledge and plenty of warning of the reimposition of the sales tax, the honourable member indicated people want to buy a truck and the backup in orders is such that they have not been successful in getting delivery guaranteed before January 1 -- I am sure there are cases like that -- I have made some inquiries in my own constituency from people who are in the trucking business and that has not been their experience. One constituent in my own home township placed an order for a very large tractor, more than $100,000, and was able to get delivery in about a month. He has it now. I am sure there are cases where people have wanted to take advantage of the ample notice we have given and have found that has not been possible, but we feel it is appropriate to go forward with the amendment as we have placed it.

Mr. McCague: I am a little surprised that the Treasurer, as reasonable as he seemed in the earlier two amendments today, does not see fit to extend the support to this amendment that is deserved.

One of the statements the Treasurer made must have been taken from the accord, when he explained to us that he thought the tax was appropriate because profits were at an all-time high. He knows, as we all know, the business is very cyclical. It can be up for one six-month period or a year and it can go quite flat in the period that follows. If he was forecasting at all, I would have thought he would have seen fit to go along with the amendment suggested by my colleague. It does not ask for no tax; it asks for a reintroduction on a phased-in basis.

One of the things I thought the minister might put some value on was the fact that safety has been an issue in the trucking business for quite a few years. It is the basis of some amendments the Minister of Transportation and Communications (Mr. Fulton) is suggesting. I would have thought anything he could do to bolster the market for new trucks and get some of the older ones off the road would have fairly good side benefits.

When the minister is talking about profits being at an all-time high, he is talking about the very large companies. I do not think he gets his hands on the statements of the person who drives one truck. There are a lot of self-employed people in the trucking business with just one truck. The better the equipment, the safer it is. When he is looking at these glorious statements of big outfits, perhaps he sees an all-time high. A lot of those companies are in several businesses, not only trucking. I would have thought he would have wished to have a phased-in return of tax so that it would help the individual who is driving his own truck.

16:50

Mr. Gregory: I guess we will be getting on to the last amendment the Minister of Revenue presented. I did not want to miss the opportunity and have that go by. When we finish with this amendment in this section, we will be going back to 13 to have an opportunity to wrench him apart on that one.

Mr. Ashe: Just for clarification, as I understood it, this is only one subsection of section 4 and section 4 has not passed yet. I have some separate comments to make on another subsection of section 4.

The Deputy Chairman: Shall Mr. Gregory's amendment to section 2 carry?

All those in favour will please say "aye."

All those opposed will please say "nay."

In my opinion the nays have it.

Call in the members.

Hon. Mr. Nixon: I should have mentioned there is an agreement by all parties that we would vote at 5:45 p.m. on any amendments dealt with in committee.

The Deputy Chairman: Therefore, this will be stacked until 5:45 p.m.

You have an amendment to section 4?

Mr. Ashe: No, not directly. I am hoping the Treasurer in all his wisdom, as he is being somewhat half-charitable today, may have an amendment of his own. However, I would like to make some comments.

I think it would be inappropriate to let section 4 go by without drawing the attention of the Treasurer and all of the taxpayers to subsection 4(1), where the Treasurer, in grandiose style, is going to increase the exemption on prepared food products, etc., from $1 to $2.

We have talked about this issue before, but I think it bears repeating. It seems to me that back around March and April 1985, up to and including May 2, 1985, I heard the leader of the Liberal Party -- now the Premier (Mr. Peterson) due to some other devious negotiations -- and the Treasurer and others talk --

Interjections.

Mr. Ashe: Let us say roundabout negotiations that had dire effects on the province.

In any event, I think all members will recall, as I am sure the taxpayers of Ontario will recall, that the now Premier and many of his colleagues, including I am sure the Treasurer and Minister of Revenue, went around this great province of ours and talked about many things that would happen in the very unlikely event that they became the government.

Lo and behold, they did become the government, but they kind of forgot about a lot of those things. I would like to draw one or two of those things to the attention of the members. I can recall, for example, that many over there said the day they were elected the Morgentaler clinic and anything like it would be closed down.

Hon. Mr. Nixon: We are not taxing abortions.

Mr. Ashe: Indirectly they are, because that has an impact in a fiscal sense on the province.

We know that one is not only still functioning and flourishing, but it also now has a companion down the road.

Another thing that is completely relevant to subsection 4(1) of this bill is that many opposite, including, I am sure, the now Treasurer and Minister of Revenue, went around the province saying, "As soon as we are elected, we are going to reapply the minimum $4 exemption on prepared food products, because it was that dastardly government that put the tax back on the little kiddies' hamburgers at McDonald's, and we will right that wrong virtually immediately."

As members well know, back somewhere in 1985, the Treasurer brought down a budget, and he must have been embarrassed when he put on a $1 exemption. He said they would put on a $4 exemption but he put on a $1 exemption. As we all know, one cannot buy much for a buck in most cases, except for the odd special when they advertise, "Come on, you can have a coffee and a doughnut for 99 cents." That is about it.

One cannot go into McDonald's, Burger King or whatever and buy any two products that total less than $1. Yes, one could go in and buy a coffee, if one did not want anything else, an order of french fries, if one did not want anything else, or a package of cookies, if one did not want anything else; although with that one, they would probably have to look in the book to see whether that was considered a prepared food product.

It was only a buck. I remember him saying, "We cannot bite it all off at one time," even though they said they would. "Wait until next year." The next year, in May 1986, once again in very embarrassing fashion, the Treasurer got to his feet when he was reading his budget document and stated with all fanfare, clapping, howling and hooting and what have you, that he was going to double that exemption from one buck to two bucks. Mind you, inflation caught up a little bit of that in the meantime, but sure, one can buy a few more things for $2 than for $1 -- no doubt about that -- and it is a step in the right direction.

When do we get to the point where a party can put forth a platform, especially those parts of the platform that have specific financial, pocketbook appeal to the taxpayers -- they may have even got two or three votes because of that, I do not know. They talked about beer and wine in the corner store too, something that they saw in hindsight was not really very good. As a matter of fact, the Liberals all stayed home when we voted on that one.

Interjections.

Mr. Ashe: They nearly all stayed at home with a few exceptions.

When are we going to get to the point where a government that comes to office with those types of promises becomes accountable? I know the Treasurer is normally an honourable man. I hear from the corner restaurant in St. George that he is an honourable man. I know the local Shell station figures in most cases -- and I heard some recent exceptions that we talked about before -- think he is an honourable man. Yet how in all good conscience can he rationalize that after all this time -- from May 1985 and now we are going to be into the early days of 1987 -- he has gone just halfway, $2 towards the $4 deal of exemptions on prepared food products and so on. I would like to hear how the Treasurer can rationalize that.

He may have had a real ringing conscience while he was listening to this. He may even be prepared on his own to bring forth an amendment to implement immediately the $4 exemption that was promised, although I would have thought it would have been about June 27 or 28, 1985, at least, if not within a day or two of that, that we would have had the $4 exemption. Maybe, with the conscience that I know the Treasurer and Minister of Revenue has, he may want to bring forth an amendment that changes that $2 item to $4.

I know many families who have to do a lot of their eating at the corner McDonald's, Burger King, Wendy's, etc. -- I like to give them all equal publicity -- will thank him for the rest of this year. We will be able to say, "It took him a year and two thirds but he did fulfil at least that one election promise."

The Deputy Chairman: I do not know what hot dogs and hamburgers have to do with this.

Mr. Breaugh: I do not either, Mr. Chairman, but you have allowed some debate on it. The member for Durham West (Mr. Ashe) railed at length, as he usually does, against democracy. I guess we are accustomed to that now. Even in a parliamentary system, we allow people to argue against the democratic process.

17:00

Mr. Davis: Why do you not go across there and put on a red tie?

Mr. Breaugh: I could do that. The member for Scarborough Centre (Mr. Davis), the reverend, has invited me to cross the aisle and put on a red tie. I am restricted somewhat by parliamentary language, but when we go into the lobby, I will give him some instructions on what he can put on and where he can go with it.

The Deputy Chairman: Order.

Mr. Breaugh: If he wants to intervene again, we can be a little more explicit for him.

It is worth pointing out that there was an opportunity for the Treasurer to do something useful; that is, to raise that exemption somewhat. I can take him to some places in beautiful Oshawa where one can have lunch for less than $2. Johnny's Grill on Simcoe Street South has a very fine luncheon menu for less than $2, and there are a few other places. Perhaps the Treasurer should visit a little more frequently some of those independent small businesses that use their ingenuity to put together fine meal packages at moderate prices. If he stayed away from the multinational organizations in the food chain business and frequented local small businesses, he might find he can do that.

There is a small measure of validity in what the member for Durham West had to say. For many of our citizens, the tax exemption is worth while, even though it would appear to be a relatively small amount.

For years, I have argued that on a theoretical basis a sales tax is the worst kind of tax. The unfairness generated by a sales tax process is really quite wrong. For those who have a reasonable income, a sales tax is an inconvenience; it is bothersome. There are many people on fixed incomes who find that the sales tax provisions are a bit onerous. Every time they turn around to buy an article of clothing, a decent meal or a service of some kind, they are hit yet again by the government.

The Treasurer may want to give us a long serenade about his grant programs for seniors, all the exemptions in the Income Tax Act and everything else, which is fair game. However, I would put to him that for many people who are at or below the poverty line -- and unfortunately, that includes most people who are on a pension of any kind in Ontario these days -- the thing that hurts on a day-by-day basis is something such as a sales tax that they simply cannot avoid.

Nobody likes taxes. if we were all interested in doing wonderful things, we would abolish taxation of all sorts, but the truth is that a government cannot function without some kind of taxation. That being the premise, the only fair way is to do some form of income taxation where ability to pay is the criterion.

I would like to see subsection 4(1) broadened somewhat. Perhaps we can look forward to this in the spring budget that is presented by the Treasurer. I would like to see the attempt made there to identify people who are on fixed income. It might appear to some of us that the amount is relatively small and inconsequential; for many of our citizens, it is not. It is the small difference that adds up day by day, eating into what they might call their allowance money. For many of our seniors, the big thrill of the day is to go out with three or four friends to some local restaurant to have tea or coffee or lunch. There is no reason I can think of that the government of Ontario should be interested in taxing that social occasion.

If the government wants to say the $50 business lunch or the $50 lunch the Treasurer himself might have could be taxed --

Hon. Mr. Nixon: How could I eat $50 worth of lunch?

Mr. Breaugh: I have seen him spill $50 worth of lunch.

If he wants to identify that situation as being taxable, that is acceptable to me. The basic unfairness of a sales tax is increased each and every time a government focuses the sales tax on those who have a minimal amount of disposable income and who, each time during the working day -- and this is the thing that gripes me most. I do not like paying taxes any more than anyone else, but it bothers me that every time I turn around, some level of government is laying out its taxation process to me, most of the time, in a way that is not visible to me. Most of the time, the tax is being collected by someone who is not a tax collector, someone who is pumping gas into my car or selling me something at the corner store. There is a basic unfairness in that.

I would like to see the Treasurer pay some attention to his leader in his next budget. I know he does not do it all the time, but once in a while it would be helpful if he would pay attention to the commitments that theoretically have been made to seeing that the exemptions at the lower level of the sales tax provisions are carried through.

This falls into the category of cheap political advice. More people out there would recognize that the government at least was aware that they have some economic problems too. If the government is willing to provide exemptions for the people who just bought Minaki Lodge today, for probably very good and valid reasons, if it is prepared to take a major hotel chain buying out something like Minaki Lodge and recognize that it needs some tax exemptions, some other incentive to make that purchase, then perhaps it would be just as fair to apply that notion to those who are at or near the poverty line -- that is, almost anyone who is on any kind of pension in Ontario today, whether he is old or young -- and apply the same criterion to them. That would be fairness.

Hon. Mr. Nixon: I appreciate the comments made by the honourable gentleman about the $2 exemption.

Speaking of gradualness, I am sure the member for Durham West recalls, going back to September 1, 1961, that when his government was in office, it had an exemption of $1.50, which on April 1, 1969, it raised to $2.50. On May 1, 1973, it raised the exemption to $4; on April 7, 1976, to $5, and on April 20, 1977, to $6. The government was doing it gradually. The honourable member, being the experienced person he is, would know that, like all the fine things in life, this is not a bad way to do it.

We have made a commitment to the $4. It did not sell very strenuously in the campaign, but it was certainly made. The Premier went down to have breakfast at Switzer's; you may recall that occasion, now almost two years ago. He was struck by the fact that all this fine food was taxable. People were just going in for a snack, little kiddies were coming in with their nickels for something to eat, and the taxman of the day was grabbing away $5 billion worth of those nickels. Therefore, we decided it was an appropriate thing.

The exemption itself is still a commitment made by the government. We have three and a half years left in our mandate.

An hon. member: Huh.

Hon. Mr. Nixon: What do you mean "huh"? It is my firm expectation that if the government is to survive for the full five years, there will be an exemption of at least $4. That is without anything intervening that might seem to be an exemption in itself.

Mr. Ashe: I have just one last comment in relation to the last statement by the Treasurer. By the time he gets around to the $4, he will have to recognize that times have changed and that $5 will be equivalent to $4. Anything up to and including $5 will be the commitment that was made prior to May 2, 1985.

Section 4 agreed to.

The Deputy Chairman: I think we agreed to discuss section 13.

Hon. Mr. Nixon: Yes. On section 13, I have put the amendment, which makes the application of the sales tax on heavy trucks valid as of January 1. That is the purpose of the amendment. The member for Mississauga East (Mr. Gregory) indicated that he would like to put his amendment first, since it deals with the taxing of heavy trucks, and that made sense to me.

Mr. McCague: Mr. Chairman, on a point of order: Your question to us was, shall section 4 carry. We already have a vote stacked on section 4. Is that not right?

The Deputy Chairman: No, the amendment is on section 2. Mr. Gregory moved that section 2 of the bill be renumbered as subsection 2(2) and that the bill be amended by adding thereto, etc.

Hon. Mr. Nixon: There is not a vote on that amendment anyway.

On section 13:

The Deputy Chairman: Are there any comments on section 13?

Mr. Gregory: I wanted to have a few words on the amendment. It seems to me that this is opportunism. Under the initial intent of the bill -- and in fact it states in the bill the amendments the Treasurer is making under Bill 26 -- that this act, except subsection 12(3), comes into force on the 30th day following the day it receives royal assent. The amendment is to change section 4, so that it comes into effect on the day it receives royal assent.

Hon. Mr. Nixon: Just the one dealing with the truck tax.

17:10

Mr. Gregory: That is right. That leads me right into what I want to say because the initial intent was to allow 30 days from the day it receives royal assent. This was done at a time when the Treasurer assumed the bill would be passed before the end of November. Now we are making this adjustment to take care of those people who take delivery on a truck in the first week of January. If the bill had been left as it was and the bill did not get royal assent until, say, December 15, this would mean that he would not get any tax up until January 15. Is that not a fact?

Hon. Mr. Nixon: We want the trucks to be taxable as of January 1.

Mr. Gregory: Right, but the Treasurer did not say that initially. That is what he wants now. That is what he wanted, but it did not work out quite in accordance with his plan; that is what I am saying.

Hon. Mr. Nixon: We hope it will still work out, with any reasonable accommodation by the honourable member.

Mr. Gregory: It cannot possibly work out because here it is now December 8 by my watch. Royal assent, even if it came today, puts the 30 days on to January 8, which means that he would lose one week of retail sales tax. His concern is that he wants to make sure --

Interjection.

Mr. Gregory: It is either one thing or the other. He is either having to backtrack here to make sure he does not lose some taxes in January or his legislative draftsman is very sloppy because he did not foresee this. Of the $65 million that he is talking about, he is putting this in because he is afraid he will lose the tax for a week or two, say one fifty-secondth of that, in other words, about $5.5 million. That is the main reason he is doing this.

If he means that a bill comes into force 30 days after it receives royal assent, then that is the way it should be. He is tinkering with one particular section again. If it is supposed to mean 30 days after royal assent, then that is what it should be. If he was afraid of this happening or if it occurred to him that the timing was wrong and he might lose a week or two of taxes, then he should have thought of that in the first place.

The fact of the matter is that because of the wording of his bill, which has been put out to the public, the people who are going to be affected the greatest by this might well be viewing this and saying, "The tax is not going to begin until 30 days after royal assent." Even they can look at their watch today and say: "It is December 8. Therefore, we cannot possibly be taxed until January 8."

For all we know, some dealer has made arrangements on the strength of this bill to make deliveries in the first or second weeks of January. Fair is fair. He or his advisers have miscalculated the timing or have made a mistake in it, but he is suddenly making the amendment to make up for his mistake, which could well cost millions of dollars to some of the people who are buying trucking equipment.

I do not know whether the Treasurer agrees with me about whether what I have said is right. He might not agree with changing that, but I think he has to admit what I am saying is true. His drafting of the bill was sloppy in this case, if he finds he has to do this now. I ask him to have a second look at that.

Hon. Mr. Nixon: If there was any sloppiness associated with the bill, it was the responsibility of the House leader and not the draftsman.

Mr. Breaugh: Who is that?

Hon. Mr. Nixon: Impeach me. We have been doing all sorts of important things -- the Upholstered and Stuffed Articles Act and things such as that.

It says clearly in the explanatory notes -- and the honourable member really is stretching this -- "This subsection ends the exemption from tax to the purchaser of a truck, truck tractor," etc., "delivered after December 31, 1986." In the explanatory notes it is quite clear, all the way through. This simply gives effect to the stated intention that the seven per cent tax will be collectable on every truck after December 31, 1986. If he will let us get to it, we will do that.

I wish we had carried this earlier, but we have had a lot of important things to do and we have left a lot of important things to do. Will he kindly quit this?

Mr. Gregory: I hear the Treasurer's heartrending pleas for mercy, and I certainly do not want to belabour this point. Since I did not even sit on the committee that was dealing with this bill, it is not my fault that it is being dealt with only now.

Hon. Mr. Nixon: I do not even want to mention the committee; I could have. I said it was the House leader's fault, if there is fault. It is democracy. That is what we are doing here. That is what we are here for.

Mr. Gregory: Can I sit down and speak too, or is it special for the Treasurer?

Mr. Warner: Can the member do both at once?

Mr. Gregory: That does not take much effort.

Naturally, the Treasurer's intent to collect this tax was very clear where he said it begins on January 1, 1987. There is no question about it. All I point out is that when people read this, they also read at the end where it says 30 days after the bill receives royal assent. That is sloppiness if he has different meanings from the front of the bill to the back of the bill, but now he is changing it to conform with his wishes to begin taxing these people on January 1. It says it is 30 days after royal assent. Is that sloppy or not? If the Treasurer will admit it is sloppy, I will sit down and let him get on with the bill.

Hon. Mr. Nixon: It is sloppy.

Mr. Gregory: Good.

Mr. Breaugh: I hesitate to enter into this sloppy field. To be serious for a moment, I want to say the Treasurer accepted in this budget a concept that I have advocated for some time. Even in a minority situation, I have heard governments say, "This bill takes effect tonight whether we pass it or not because we will start collecting tax."

Hon. Mr. Nixon: I find it is a very neat way to do business.

Mr. Breaugh: Yes. I have accepted the notion that he at least has had the good grace to say, "We will wait until the act is passed."

The bill was introduced in May, so people cannot really give us much of an argument that they have not had notice. We had a debate on second reading. We televised that debate around Ontario. This bill has been to a committee for public hearings. I do not know how much more one could want.

The intent was clear that we would notify people of changes in the retail sales tax. We have done that. We had the parliamentary debate on it and we had public hearings on it. We printed the bill and it has been circulated since May. The member for Mississauga East is really stretching it by trying to make some argument that no notice has been given or that proper notice has not been given. If one wants to accrue blame, I join with the Treasurer and blame the government House leader who is inept, unfair and fiscally irresponsible. To have brought in the Line Fences Act ahead of this act is probably not a good reflection of the government's priorities.

Hon. Mr. Nixon: This was in the hands of the committee at the time of the Line Fences Act debate.

Mr. Breaugh: This camel was built by a committee. I understand that.

One may not like what the government is doing here, but eight or nine months' notice is probably about as much as one will get. We can offer debate on second reading and public hearings, and we can televise the process. I do not know how much more notice we can give to people.

If one misreads the bill, as appears to be the case for the member for Mississauga East, we should all sorely apologize for that. Maybe there should be some bills produced in cartoon form so that everyone can understand what is being debated in the Legislature. However, as far as parliamentary traditions are concerned, I believe the government has done what it needed to do, and we will support the amendment.

17:20

Mr. Ashe: I am not going to direct my remarks to the point made by my colleague the member for Mississauga East. The Treasurer and Minister of Revenue has heard my critique on this item before, and it fits right into the section we are now debating, the effective date. Although some parts of the bill will use the date on which the various provisions of the bill come into effect, there is no doubt parts of the bill were always intended to come into effect on January 1, 1987, regardless of when the bill is passed. I have no problem in that regard with those particular sections.

I take umbrage with the general, overall philosophy of the Treasurer, the Minister of Revenue or the House leader -- whomever he wants to blame it on; it does not matter -- taking five months and one day, as I recall, before he ever called the first budget bill for debate.

He has to hang his head in shame not only for taking a year and a half to go from the proposed $1 to $2, when it should have been $4 a year and a half ago, which I talked about a few minutes ago, but also for taking more than six months to implement it. That is an extra windfall somewhere along the line. He could get up right now and amend that section to read "$2.50" and it would not cost him a cent, because he has already taken in an extra six months of revenue on the difference between the $1 exemption and the $2 exemption on prepared foods.

Hon. Mr. Nixon: I am not apologizing for allowing democracy to work.

Mr. Ashe: That is not democracy.

Mr. Breaugh: He is against democracy.

Mr. Ashe: Some of us know the difference in the process. I guess my colleague the member for Oshawa does not.

I do not see how the Treasurer could call it the democratic process before the bill was called. I acknowledge that once it was called and debated for second reading and ordered to committee, which was insisted upon by the opposition, it was the democratic process. That has been fulfilled in a reasonable time, something less than two months from beginning to end. However, it took five months and one day from the time the Treasurer tabled the bill before he called it for second-reading debate. That is practically theft from the taxpayers' pockets, particularly that minimal, niggardly increase from $1 to $2 on prepared food products, when the fulfilment of the election promise would have been $4. We wasted more than five months before receiving the niggardly increase from $1 to $2. In that regard, the Treasurer, the Minister of Revenue and the House leader should hang his head in shame.

Mr. Breaugh: Could I move an amendment that we hang the government House leader? I think we would get unanimous consent.

Mr. Harris: I do not want to prolong the debate, but I think the member for Mississauga East has been maligned a little bit by both the Minister of Revenue and the member for Oshawa.

Hon. Mr. Nixon: The member for Durham West took him on too.

Mr. Harris: He did not support him as strongly as I thought he was going to, but I do not think he maligned him.

I mentioned my experience with the trucking tax, particularly in northern Ontario, of people trying and rushing to get delivery before the end of December. They are acutely aware of this bill, as the member for Oshawa said, because it has been circulated and it has been on TV. They have had lots of opportunities to look at it.

I understand the government's position and that of the member for Oshawa that the intent was January 1, whether one, 10 or 50 people may have thought that delivery by January 7 or January 10 was going to be okay and they would still work towards that and keep faith with their customers and with the legislation, as they read it at the time, which said it would be 30 days.

I thought the member brought out a point. I understand it is not going to be accepted and we will not prolong the debate. As the minister knows, we think this tax should not have been imposed. We fought to see whether it could be phased in in some way. Now the member for Mississauga East in a last gasp is trying to salvage seven, 10 or 15 days for some of the people of Ontario and, I would argue, on behalf of some of the people of northern Ontario who have expressed concern to me. I do not think he should be maligned for that and told he needs the bill in cartoon form. People reading this bill could easily have felt that they had another week or two weeks, based on the amount of time it was taking the government to get this legislation dealt with.

I will support the member for Mississauga East and vote against this amendment.

Mr. McCague: I have a question for the Minister of Revenue. In his explanation to my colleague, he referred to the explanatory notes on subsection 4(10). He gave the reasoning that it referred to the date of January 1, 1987. Page 4 of the bill at the top of the page under subsection 10 is all in black ink. He mentions twice on the page that it will be January 1, 1987. I am not a lawyer, so I do not quite understand why it is mentioned at the top of page 4. Does it have any force and effect? If it does have any force and effect, why is he bringing in an amendment?

Hon. Mr. Nixon: The final section refers to the fact that it will come into effect following royal assent. There are two dates. One is December 31, and it is up until that time that the tax is not collectable; then on January 1 the tax is collectable. It is a little complex for a person such as me, but I think it will work out all right.

Mr. McCague: The answer was probably as good as my question.

Hon. Mr. Nixon: What are we doing? Are we trying to spin this out? Delay?

Mr. McCague: No, not at all.

Hon. Mr. Nixon: I thought we were.

Mr. McCague: I still do not understand what the minister is saying. Let me ask the question in this way: In the other cases in the act, the effective date is not mentioned in the amendments. In this case, we have the operative date mentioned in the amendment. Why do we have to end up again saying that it will come into force on January 1, 1987?

Hon. Mr. Nixon: I must reinforce what has already been said. The assumption was that this bill would have been carried in ample time before the end of November.

We thought it would be quite appropriate to allow the other changes -- for example, the $2 exemption -- to come into effect 30 days after it passed. The member for Durham East is quite correct that the longer this goes on, the more money I save and the more I postpone the cries of anguish from the people in the business who are going to have to adjust their machinery a little to exempt the $2.

We felt it was fair to the manufacturers and the purchasers of heavy trucks to have a specific date. If this had been carried, as it might have been in June or in July if the House had gone into July, or if we had not had a heavy legislative program in the fall, or if it had not been sent out to standing committee -- that was not my intention; it was theirs -- all these things were not expected to occur, but they did. We now find ourselves on December 8 saying the tax will be collected on January 1, 1987. It is the policy of the government, and we are trying to get the House to pass on that policy in the only way it can, other than delay.

17:30

Mr. McCague: I will give the minister the opportunity to answer the question after the fact. I do not understand, and I think it is a legitimate question, why the minister does not mention an effective date in other sections of this act.

In this case, he mentions January 1, 1987. I am not arguing that point at this time. He has a specific date in this one. The minister has changed the amendment and says he has not changed it at all. He has changed it to have certain sections come into effect after 30 days. Another section comes into effect the following day. The date of January 1, 1987, is already in the bill, yet he wants to bring in a third section that says it again.

Hon. Mr. Nixon: I want to be sure that the tax on heavy trucks is collectable as of January 1. It will not be collectable if the House says it will not be. That remains to be seen, although I have every reason to believe it will carry.

The other reason is that the same worthy people who advised the honourable member and his colleagues are advising me. They are very competent and capable, and I am taking their advice in this matter. They indicate that this amendment is necessary if our budgetary plan to collect the taxes on heavy trucks on January 1 is to go forward.

Mr. Gregory: I let it go by when there were a couple of rather snarky remarks from the end of the table from the party of last resort, but I hear remarks from the Treasurer to indicate we are stalling this.

I brought this up. In fact, the reason I raised this point in the first place was that I had calls from people in the trucking business. They ask what 30 days after royal assent means when it is already past December 1. They ask whether this means the tax will not be payable for 30 days beyond royal assent, according to the act, or not. In all honesty, my answer to them was that, in my opinion, the tax will be collected retroactively, which it will, according to the bill.

All I wanted to point out to the Treasurer, the Minister of Revenue and the House leader, who brought in this sloppy bill, is that he is doing this for housekeeping. It is a housekeeping measure. It could have been avoided. As the member for Dufferin-Simcoe (Mr. McCague) pointed out, the minister spells out December 31 in the clause, but he fouls up the whole thing later on by saying 30 days after royal assent. That is my comment.

I have had to defend the Treasurer to the trucking people on many occasions and say he really means well.

The Deputy-Chairman: All those in favour of Mr. Nixon's amendment will please say "aye.'

All those opposed will please say "nay."

In my opinion the ayes have it.

Motion agreed to.

Section 13, as amended, agreed to.

Section 14 agreed to.

EQUALITY RIGHTS STATUTE LAW AMENDMENT ACT (CONTINUED)

Resuming consideration of Bill 7, An Act to amend certain Ontario Statutes to conform to section 15 of the Canadian Charter of Rights and Freedoms.

On section 18:

Hon. Mr. Scott: The next item on which there is an amendment is section 18. The member for Ottawa Centre (Ms. Gigantes) had an amendment she wanted to make.

Mr. Wildman: She is on her way.

Hon. Mr. Scott: She is on her way.

Mr. Warner: Do you have the amendment?

Hon. Mr. Scott: I have the amendment. I might even make the amendment in her place and thereby get all the press attention that she hopes to get herself.

Mr. Davis: Is that part of the accord?

Hon. Mr. Scott: No, but I get criticized if an amendment is made by somebody else. The Toronto Sun says I have not been in support of it and I should have made it myself, because it did not have the authority of a government amendment.

Mr. O'Connor: Then you blame me.

Hon. Mr. Scott: Then I blame the member for Oakville, which of course is quite warranted.

But the member for Ottawa Centre is here, and I think the amendment is to subsection 18(3a).

The Deputy Chairman: Ms. Gigantes moves that section 18 of the bill be amended by adding thereto the following subsection:

"(3a) The said act is amended by adding thereto the following section:

"3a(1) Every 16- or 17-year-old person who has withdrawn from parental control has a right to equal treatment with respect to occupancy of and contracting for accommodation without discrimination because the person is less than 18 years old.

"(2) A contract for accommodation entered into by a 16- or 17-year-old person who has withdrawn from parental control is enforceable against that person as if the person were 18 years old."

Are there any questions or comments?

Ms. Gigantes: Just very briefly, I believe there is agreement all around the House on this matter. It is a result of the many presentations we had before the standing committee on administration of justice in the months of hearings we had on Bill 7 and the many individual and group submissions to our committee that outlined the difficulties that are being faced by 16- and 17-year-old people, many of whom have responsibilities of their own as parents. They are young people who are not living at home, who have to assume financial responsibility for themselves and, in some cases, for their own children and who are prevented from finding accommodation in the private market because, up until this motion, if it is passed, they were not protected under the Human Rights Code.

This would make a change to our code to allow them to have the same protection in terms of age discrimination as other people. We know it will have a very large social effect and a social benefit for that reason. I should also note that it is only very recently that the Ontario Housing Corp. and various municipal housing nonprofit corporations have been willing to accept as tenants people aged under 18, even if they have children for whom they are responsible. This will allow 16-year-olds and 17-year-olds to take their place in the marketplace fight for housing.

17:40

Mr. O'Connor: I am inclined to support this amendment for the reasons the member has put to us. She disappeared. I had a question of her.

Mr. Callahan: She is down below the table there.

Mr. O'Connor: I thought she had gone somewhere. I did have some questions and comments to make with regard to the matter.

As I understand the intent of the amendment, it is to place 16-year-olds and 17-year-olds who have withdrawn from parental consent in the same position as those who are older than 16 and 17 years -- in other words, adults -- vis-à-vis their rights and abilities to contract for accommodation in Ontario, a very admirable and worthy goal.

The difficulty that I see may arise -- and perhaps she should give some thought to addressing this particular difficulty -- is that although they will now be on the same footing and basis as adults, as with adults, any apartment owner, when receiving an application for accommodation, has the right to do a credit check, an assessment of the credit worthiness of the applicant, and to refuse accommodation to that person if it is determined that he or she cannot pay. For the most part and for practical purposes, we will find that most 16-year-olds and 17-year-olds will have a difficult time meeting the credit check carried out by the apartment owner.

I wonder whether the member has any comments on how that situation may be addressed, keeping in mind that most of our social programs do not extend down to 16-year-olds and 17-year-olds who are out on their own on the streets. They would have difficulty getting assistance from the programs offered by the Ministry of Community and Social Services. In addition to what we are doing here, should there be thought given to extending those programs to give recognition to the fact that there will be these 16-year-olds and 17-year-olds out on the street, probably lacking the ability to get accommodation through lack of credit worthiness, and yet still unable to get assistance from the government?

Perhaps my questions would be better directed towards the government as represented by the Attorney General, who is here in the House.

Hon. Mr. Scott: We support the amendment, and to make it clear to television viewers we would have proposed it ourselves if the honourable member had not.

The fact is that 16-year-olds and 17-year-olds can withdraw from parental control. When they do, it is necessary for them to find accommodation. While there will be difficulties of the type the member has referred to in obtaining that accommodation, the purpose of this amendment, as I understand it, is to withdraw a fundamental difficulty; namely, it is reported that some landlords will not, as a matter of discrimination, rent to persons under 18 years of age. Therefore, this is an effort via the Human Rights Code to deal with that threshold question.

As the member for Oakville has pointed out, it is true there will remain the difficulty that young people aged 16 or 17 and outside of parental control have in obtaining appropriate credit ratings, in showing that they are trustworthy and so on, because they have no history in the accommodation market. That problem has to be addressed by other policy, and I gather the Ontario Housing Corp. is directing itself to that issue at this very moment.

Interjection.

Hon. Mr. Scott: The voice of moral authority.

Mrs. Marland: I also want to rise in support of this amendment. I suppose it is the interesting, everlasting question about who is old enough to drink, drive or fight for their country. When one gets down to 16-year-olds and 17-year-olds, it is so dependent on the individual. Very often, one can have a 17-year-old or 16-year-old who is more responsible --

The Deputy Chairman: Order. I am sorry to interrupt, but we had agreed that at 5:45 p.m. we would call in the members for a vote on section 2 of Bill 26. We will come back to you tomorrow.

17:55

RETAIL SALES TAX AMENDMENT ACT

The committee divided on Mr. Gregory's amendment to section 2, which was negatived on the following vote:

Ayes 27; nays 54.

Section 2 agreed to.

Bill, as amended, ordered to be reported.

On motion by Hon. Mr. Nixon, the committee of the whole House reported one bill with certain amendments and progress on another.

NOTICE OF DISSATISFACTION

The Acting Speaker (Mr. Morin): Pursuant to standing order 30(a), the member for Carleton-Grenville (Mr. Sterling) has given notice of his dissatisfaction with the answer to his question given by the Minister of Energy (Mr. Kerrio) concerning the Ontario Hydro corridor through the community of Bridlewood in the city of Kanata. This matter will be debated at 6 p.m. on Tuesday, December 9, 1986.

The House adjourned at 6 p.m.

8 décembre 1986