L056B - Wed 10 May 2000 / Mer 10 mai 2000

ORDERS OF THE DAY

TAXPAYER DIVIDEND ACT, 2000 / LOI DE 2000 SUR LE VERSEMENT D'UN DIVIDENDE AUX CONTRIBUABLES

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The House met at 1845.

ORDERS OF THE DAY

TAXPAYER DIVIDEND ACT, 2000 / LOI DE 2000 SUR LE VERSEMENT D'UN DIVIDENDE AUX CONTRIBUABLES

Resuming the debate adjourned on May 9, 2000, on the motion for second reading of Bill 72, An Act to pay a dividend to Ontario taxpayers, cut taxes, create jobs and implement the Budget / Projet de loi 72, Loi visant à verser un dividende aux contribuables de l'Ontario, à réduire les impôts, à créer des emplois et à mettre en oeuvre le budget.

The Acting Speaker (Mr Brian Coburn): Further debate.

Mr Doug Galt (Northumberland): Thank you very much, Mr Speaker. Congratulations on your promotion to the Speaker's chair for this evening.

It's more than polite for me to say what a pleasure it is to speak on the Taxpayer Dividend Act. Bill 72 is certainly one that's going to go down in history. It's a result of the budget, a budget to be celebrated, a budget we can all be very proud of, particularly those of us who were elected in 1995 and have carried this through.

It was a very ambitious agenda that we set with the Common Sense Revolution back in 1995, one to reduce taxes, reduce spending, and at the same time reduce the deficit and balance the budget. I think there was more than one on our side of the House who wondered, "Is this really going to happen?" As we watched a year and then two years get under our belt, there was absolutely no question.

The argument is over that tax cuts create jobs. They've created horrendous numbers of jobs in Ontario. There's all kinds of proof. You can look at how Ontario is leading all the other provinces and is leading all the G7 countries. You can look at what happened to Canada in the early 1990s when there were high taxes, at how 350,000 net jobs were created in the rest of Canada while Ontario went behind in net jobs. It was the right thing to do. There were a lot of economists who believed in this policy and, lo and behold, they were absolutely right.

This bill is really about our plan to make Ontario a better place to work, live and raise a family. There's no question that this plan is there to promote prosperity in Ontario, and it has been very successful at that. As we look back at those lost 10 years, from 1985 to 1995, that was a period when disposable income plummeted, dropped right out of sight. Even though people were getting increases in their salaries, they kept saying, "I work harder and harder and at the end of the year, at the end of the day, whatever, I have less money to spend than I did last year."

In 1995 we were elected basically on a policy whereby the party being elected to form the government believed that taxpayers' money really belonged to the taxpayers, that it did not belong to the government. That's a different philosophy from what has been in Ontario in the past.

With this bill, it will be giving direction that the taxpayers of Ontario will be receiving a dividend of some $200 maximum. A very large number of the taxpayers in Ontario will be receiving that $200. Of course, it ranges from $25 up to $200, depending on the level of tax they have been paying. This in itself recognizes that the money belongs to the people of Ontario, that it does not belong to the government. There will be a cheque; they will be receiving a cheque of up to $200 in the not-too-distant future.

That's a significant amount of money. In my riding there are plans for a new hospital to be built in the west end and they're building one in the east end. What a great place to be able to donate the money. I think I've seen upwards of 20 suggestions of how the government might have spent that money better, but who in Ontario can put it in the right spot other than the taxpayers of Ontario? They can go out and donate it to a political party like the other side of the House here. You might be very pleased to donate it to your party, or you may want to donate it to your church or a food bank, whatever. It's your choice how you will use that $200. Once it's spent, that's going to help, once again, stimulate the economy and keep that wheel revolving. It's just one more step in making sure that economy is stimulated.

Another thing that we did in the budget that's involved in this bill is reduce the corporate taxes. I'll tell you, there's no better way to kill jobs any place than to increase taxes, and that was what was going on. So we've got corporate taxes going down. Actually, we were in a position where our corporate taxes were higher than in any of the states. When this plan to reduce corporate taxes is fully implemented, we will be below the average of the states around the Great Lakes.

As we look at this whole package of tax cuts, really what we're talking about are promises made, promises kept. That was well known on the streets in small-town Ontario during the last election campaign: that we did in fact keep our promises. Maybe some people didn't exactly like some of the things we were doing, but we were keeping our promises, and one of those promises was the 30% cut in income tax. By 1999, the time of the last election, that had been totally delivered and was creating one tremendous stimulus to the economy of Ontario. This bill, as well as last week's budget, will be honouring our commitment from back in 1999 to more tax cuts, and it's going to create a climate of economic growth even greater than we have had in the past.

Since this budget has been passed, I've had the oppor-tunity to talk to many of my constituents, particularly members of the chambers of commerce, and you just can't believe how enthused those people are with this budget and what it's going to do to the economy in their respective communities. The response has been overwhelmingly favourable and I'm sure that you've noticed that as well, Mr Speaker. These people really do appreciate the fact that we're giving their money back to them. It just makes so much sense. By doing this, it's going to lure more jobs, more investment into our province. When I was chatting with people, they were saying they really appreciate the fact that we are indeed keeping our promise.

There's a young man in my constituency whom I was recently having a conversation with. This young person is just nicely out of university and he's really benefiting from the strong economy that's present in Ontario. We got to talking about politics and about government, and in that conversation he was telling me how much respect he had gained for Mike Harris and the Harris government because we do keep the promises we make, but how disappointed he was in the federal Liberal government and how they make promises just to get elected and then they collapse. They ignore their platform and on they go. He was noticing how the Harris team had implemented the Common Sense Revolution, and he believed that we would continue to implement the Blueprint that we campaigned on back in 1999.

He went on to tell me the story about when he was really converted and really believed in the direction that he should look at in politics. It goes along the line that he was listening to Mr Chrétien on a radio interview program back in the latter part of their first term and he was going on about how he never intended to scrap the GST. The interviewer sort of flicked the switch to the 1993 campaign when Chrétien said, "If I'm elected, I will scrap the GST." And he's on this interview program saying that he never intended to do that. Talk about double-talk. You know, this is most unfortunate, that we would have a Prime Minister in our country who would do that kind of thing.

Unfortunately, the member from Hamilton ended up having to step down and run again. Maybe the Prime Minister should have done the same thing. But we understand that somebody has to be the fall person, and in this case she did just that. But this story shows just how much people in my riding appreciate a government that follows through and does exactly what it says it's going to do. That's what this bill is about: keeping the promises of lowering taxes and stimulating economic prosperity here in Ontario.

I've just told you a story about how one of my constituents got turned off the Chrétien Liberals because of one position he took and then didn't follow through on scrapping the GST. I can go through a whole litany of things that they committed to but didn't do and how effective those spin doctors have been in trying to position him as a good Liberal. We recently heard about him over in the Middle East, and what a disastrous trip that was, an embarrassment to all Canadians. But what else can you expect, especially when you see an article in the Toronto Sun on May 4 where Chrétien is trying to take credit for the budget being balanced in Ontario? This is a man who, along with his Minister of Finance, laughed at our policy of tax cuts to stimulate the economy, to create jobs and to cut the deficit, all at the same time. He said it's not just possible. It was just a few years ago that he laughed, but then, "Chrétien and his finance minister, Paul Martin, claimed yesterday Tory Premier Mike Harris and his Finance minister, Ernie Eves, simply borrowed the federal play book for their good-news surplus budget."

Well, they just laughed about it a few years ago. It goes on to say that "Martin said Ontario's Tories not only copied"-copied-"the federal Grit plan, including eliminating the deficit and reducing taxes for low- and middle-income earners." They didn't even start talking about cutting taxes until last year and they're trying to claim that we copied them?

Then it goes on to say, "The Prime Minister said that the `best form of flattery is when a government is copying another government.'" Now, I think he must have meant when the federal Liberals were copying the Ontario Conservatives, but he's trying to take credit here when credit certainly is not in order.

It goes on to say, "Martin told the Sun Tuesday he may give special surplus tax refund cheques to Canadians in future budgets, along the lines of the rebates of up to $200 Eves promised in his budget." The next day he said it was a bad idea, and then later on he's saying it's a pretty good idea. I'm not sure which way the wind happened to be blowing that one particular day, but obviously he's rather confused.

With this doublespeak I tend to think of George Orwell's book entitled 1984. You know, these fabrications-the Prime Minister should be absolutely ashamed of himself. It's like an Orwellian effort to rewrite history and it's absolutely scary. It sounds like he's saying the Prime Minister's office should be renamed the Ministry of Truth. Orwell's novel 1984 placed the word "Newspeak" into the English dictionary. In the book, Newspeak was a way for the state to narrow the range of thought. Perhaps we should talk about Liberalspeak. It will become a common word in our country with what Chrétien and the Liberals are doing. It's most unfortunate.

I want to send a very clear message to Mr Chrétien: You have done absolutely nothing to promote prosperity in Ontario and to help us balance the budget. Anybody here or anybody in Ottawa, name me one fiscal policy that the federal government brought out to help balance the budget-just one. I might be able to come up with one, and that would be reducing the transfer payments to the province of Ontario. But after that I can't think of a single thing that they have done to help balance the budget. I would suggest what we have been doing with cutting taxes-payroll taxes, income taxes-is what has stimulated the economy in Ontario, the economic engine that drives Canada, and I would suggest that is the reason the federal government managed to balance their bud-get-for no other reason than a small bit there on taking dollars away from the provinces, particularly the province of Ontario, and then watching what's going on in Alberta and criticizing Klein for what he's trying to do: survive with a health program that they are just cutting the guts right out of. I think that is most unfortunate.

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What does the federal government believe in other than high taxes? That's exactly what they were doing during their previous term, increasing payroll taxes, like the Canada pension plan and employment insurance pre-miums, which is most unfortunate. We know that tax cuts create jobs. We know that with increased taxes we lose jobs, or they cut the number of jobs we have out there.

What is really unfortunate-and the federal Liberals should be absolutely ashamed of themselves-are the cuts they have created in health care. I think it's really exciting that Tom Kent, the godfather of social policy for the Liberals, came before a federal committee-and this is reported in the Ottawa Citizen.

Mr James J. Bradley (St Catharines): Isn't he a Mulroney Conservative?

Mr Galt: No, he's a Liberal. You should know that, member for St Catharines. It says here that he's a "Liberal icon."

"Tom Kent says the federal government-not two-tier medicine or Alberta Premier Ralph Klein-is the biggest threat to the future of medicare.

"Mr Kent said yesterday the Chrétien government is starving the public health system of badly needed cash, and holding up any chance of meaningful reform negotiations with the provinces."

This is a Liberal talking to the Liberals. He was one who developed health care in the first place, a health care program that was supposed to be the federal government 50-50 with the provincial governments.

"He made his comments while testifying before a Senate committee explaining the future of medicare. Mr Kent, 78, is the Liberals' social policy godfather who helped spearhead the creation of programs such as medicare back in the 1960s....

"`The main attacks on medicare haven't come from two-tier medicine or Ralph Klein,' Mr Kent told senators. Rather, he said, the problem is that successive federal governments have steadily `dishonoured' the commitment made in the 1960s to share the costs of medicare with the provinces. The commitment was `completely tossed out' when federal Finance Minister Paul Martin slashed health care transfers in his 1995 budget and changed the way the money is sent to the provinces, he said.

"Mr Kent said the only way to begin fixing the ailing health system is to dramatically boost federal funding, and to do so in such a way that the provinces will know they can count on federal financing to keep pace with rising health care costs."

This is a Liberal talking to the Liberals. You would think they'd get the message.

"Right now, he complained, the provinces must rely on a `federal whim' for help in paying the bills of the $60-billion public health system." He goes on to comment, "`It's essential to restore federal integrity.'"

I laugh when I see that put together "Liberal integrity."

Ms Marilyn Mushinski (Scarborough Centre): It's an oxymoron.

Mr Galt: Yes, it's an oxymoron. You're absolutely right.

"Since the February 28 budget, federal-provincial relations have soured over the issue of health care." It's not surprising. It goes on to comment that the federal government only contributes 13 cents of every dollar spent in health and social programs. It's not quite that good in Ontario.

It goes on: "Yesterday, Mr Kent," and this is a Liberal, "sided with the provinces, saying the federal government's attempt to `inflate' its contributions by including tax points is a `silly argument.'

"`To claim that those taxes that the provinces levy themselves-even now, a quarter of century later-are still a federal contribution is absolute nonsense.'" He mentions the 50-50 share that was originally agreed to. They never did do that. The most the feds ever gave was 41%. He goes on to say it should be increased in the neighbourhood of 25% shared at least by the federal government, and then the provinces should "be able to rely on a consistent federal share."

That kind of thing discourages people in politics, particularly in Ontario. The federal Liberals don't even believe in the Canada Health Act. It's obvious because of the way they fund it. I don't think there's any question that if they believed in it, they would be funding it properly. But obviously they must not believe in the federal health care act.

See what's going on in Alberta-I believe it's Bill 11. Name me a province where there isn't strife in health care. Is that the fault of the provinces? Are all the provinces bad, or is it the fault of the federal government in how it's being funded? It's my understanding there was supposed to be a meeting at the end of May, a federal-provincial conference of ministers of health. What is Rock suggesting: that maybe they could have their meeting in Yellowknife-to sort of get out of sight and away from reporters so they can do it in secret or something, I think.

I'm very supportive of Bill 72, the Taxpayer Dividend Act. It's an opportunity for people in Ontario to get their dollars back. It's very exciting to see a balanced budget in Ontario for two years in a row.

The Acting Speaker (Mr Tony Martin): Comments and questions?

Mr Jean-Marc Lalonde (Glengarry-Prescott-Russell): I was just listening to the member for Northumberland. I could say, like I saw in the paper on May 3, "Your cheques are in the mail." The phone has started to ring, but people really think it's a joke. It's really Tory propaganda. Some people will probably get $25. The majority won't get anything but probably a letter in the mail from the Tory party asking them for a donation, and the people will think, "Give me a donation and I'll send you a cheque for $200." That's the way the government is working.

When we look at this $200 maximum-a few will be getting a $200-cheque in the mail, but very few. When we speak to business people, they think that money should have gone to the debt. Other people say. we should have put that into health care. In my area, they're saying they should invest a little more in the school system, because we're planning to close 130 schools in rural areas.

When I look at the $4-billion personal income tax cut announced on May 2, I think that people are not fooled. They know that even though this government is showing a $1.4-billion increase in health care, it is not true. You are trying to fool the people, but today people are too smart. In my area they already know. They tell us: "We don't expect a cheque, but you can expect your phone to ring after September if we don't receive a cheque. Mr Harris says we'll be getting a cheque."

The Acting Speaker: Further debate?

Mr Gilles Bisson (Timmins-James Bay): I listened with interest to the comments by the member from Northumberland. It's always interesting to listen to him speak. He is one of the more colourful speakers they have on that side of the House. I was wondering, as I listened to the comments by the member about this budget. Basically he was trying to say that the government was following through on its promises, that somehow or other this budget proves the government kept its word to the voters both in 1995 and 1999.

I remember the election of 1995 very well. I remember that your government- the third party, at the time-ran an election where you made some promises, and those promises were broken. I remember specifically in the Common Sense Revolution that you said not one cent would come out of education. They've taken far more-

Mr Bradley: And no hospitals will close.

Mr Bisson: I'm getting there. There were many more promises.

Interjections.

Mr Bisson: Wait your turn. I'll tell you the ones that were broken.

In education, they've certainly taken more than a penny. They've literally taken hundreds of millions of dollars out of education. They try to jumble the numbers around in all kinds of ways, but when you go to the classroom and take a look at the amount of money we have with the new funding formula, there are fewer dollars available for students. There is hardly anything left when it comes to special needs education.

They said they weren't going to cut in health care. How many hospitals have they closed in Ontario? How many budgets have they cut-

Mr Bradley: Twenty-five.

Mr Bisson: They've closed 25 hospitals in Ontario. They've gone ahead and reduced the budgets of a number of hospitals, except for the one where they're about to have the by-election. They've basically made sure to decimate the budget within the Ministry of Health. Those are promises you made that you said you were going to keep when you ran in 1995, but you've broken those promises since then, so I don't hold you to your word on what you're doing in this budget.

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The Acting Speaker: Further debate.

Hon Frank Klees (Minister without Portfolio): I'm pleased to rise, first of all, to commend my colleague from Northumberland for his very succinct exposition of a budget that is historical in this province. For the first time in 30 years we presented the people of this province with a truly balanced budget.

I want to speak very briefly to the comments made by the coach of our legislative hockey team, the member for Glengarry-Prescott-Russell. He said that there are many people in his riding who would want to have the $200, which is really their money, go to so many different areas. He mentioned that some people would like to see it go to education; others would like to see it go to the debt; others would like to see it go to health care. It speaks precisely to the fact of why we returned this tax money to the taxpayer. Now they can do with that money what they feel the priorities are, because our government fundamentally believes that the taxpayers know best what to do with their money. For those who want to contribute it to charity, they should do so. For those who want to apply it to the debt, my recommendation to the Minister of Finance is that we should put an endorsement on the back of the cheque and allow people to redirect that money to go to the debt of our province. Let's allow the taxpayers of our province to direct the money where it is best applied.

With regard to the comment that there is nothing in this budget for education, $270 million in new dollars to the education budget of our province is not something to be taken lightly. It's a significant investment in education in this new budget.

Mr Bradley: What I was looking for was where in the budget it explains you're going to spend $11 million for the two brand new King aircraft for the comfort and convenience of the Premier and members of the cabinet. Maybe some of the backbenchers will have a chance once in a while to hitch a ride on it if they're really good. If they give speeches the way the member for Northumberland gave a speech and really make up to the Premier, they might get a ride on this aircraft. But you know, a lot of people don't know the government bought these aircraft, because the announcement was made just before the Easter weekend, late on the Thursday afternoon, just when they were putting out a press release on the Ontario Realty Corp, yet another embarrassing press release on that. What I'm concerned about is that the people don't know just how luxurious these aircraft are. There are supposed to be nice white leather seats, well-appointed, a bar in there.

Mr Gerry Phillips (Scarborough-Agincourt): Ashtrays, too.

Mr Bradley: Ashtrays. That shouldn't happen. This is for the comfort and convenience of the Premier and members of the cabinet. It's almost an imperial cabinet these days. I understand they're going to have to check with Guy Giorno, who's going to have a list of who's allowed on the aircraft.

Hon Mr Klees: Guy's leaving.

Mr Bradley: He's leaving, but I would predict that Guy Giorno gets a job that pays a lot of money, just like a lot of other people who have left the Premier's office and gone on to paradise in other areas, where they're making six-figure salaries-and those six figures are big figures.

I just wondered whether the member had mentioned those aircraft. I thought the others were fine. They seemed to be operating fine in the province of Ontario. But you know, some people become spoiled. They get in the second term of office and they think the people out there aren't watching. But I'll tell you, there are a lot of people watching tonight who are going to be very concerned about those new luxurious aircraft for the Premier and the cabinet.

The Acting Speaker: Two-minute response, member for Northumberland.

Mr Galt: I have to compliment the member for Oak Ridges for his brilliant observations on the earlier presentation that I made.

Looking at some of the other comments, the member for Glengarry-Prescott-Russell talking about a joke-the only joke that has been around this place recently was when we had that unholy alliance from 1985 to 1987. That was truly a joke in this Legislature. Then to add to that joke, we had a Liberal government that doubled spending in about three years. And then what did the NDP do? They doubled the debt in five years. That's the kind of joke that has been around here.

I listened to the member for Timmins-James Bay, and I appreciate his kind comments, but I do want to walk through some of the education confusion that he seems to have. We certainly have increased the education spending significantly. When we took over from your government, you were at $12.9 billion. That's what we spent that year. That has increased to $13.4-billion-plus this year. That is hardly cutting education spending.

In the budget, there is $101 million for another thousand elementary teachers; $70 million for reading support for junior kindergarten to grade 3; another $70 million for special ed, added on to the $40 million that the Minister of Education had announced earlier. This is an increase three years in a row, and that's a 12% increase in special ed; another $162 million for smaller class sizes in secondary schools; another $23 million in transportation; another $25 million for remediation; another $5 million for teacher training. This just goes on.

When I see all this spending, I get a little nervous that it almost sounds like the Liberals, and it really upsets me. Sometimes, spending this quantity of money, I think about how you people were spending. But it's being spent very wisely.

Mr Bradley: On a point of order, Mr Speaker: I'd like to get unanimous consent from members of the House to recommend that the member for Northumberland get a ride in this new aircraft after that speech.

The Acting Speaker: I don't think that's a point of order. We'll move to the next speaker.

Mr Phillips: I'm pleased to continue the debate on the bill, and I thank the members for allowing me to delay my remarks until this evening. It happened that last night the chief of police, Chief Fantino, had a community meeting that I, as well as Ms Mushinski and others, thought was important to be at. I appreciate the chance to deliver my remarks tonight.

There are, as I think we know, four major elements in the bill, although they're not the only four. There are the substantial changes in the corporate tax, the small business tax, income tax and the $1-billion Harris mailing.

I just want to begin the discussion on the tax cuts by saying I think Ontario should recognize there's about $8 billion worth of tax cuts here. That is an enormous level of tax cuts. About $4 billion of it is corporate tax cuts. The government has decided it will cut corporate taxes in this province essentially in half. I understand why the government says it's going to do that. It is $4 billion of forgone revenue. It will, I might say, put us, according to the budget, substantially lower in corporate taxes than the neighbouring jurisdictions, and the budget makes a big thing about that. So it's $4 billion.

The reason I raise this is because this is a statement about the priorities of a government and how we want to run our province. There's another $1.2 billion of tax cuts for capital gains. Generally speaking, they would be gains that one would make in the stock market. The government has decided that it will cut about $1.2 billion worth of taxes out of that area. I might say that this tends, without question, to benefit the better-off in our society. I know Bay Street is very happy about that. There's another $3-billion cut in personal income taxes, so it's about $8 billion, quite apart from the $1-billion refund. By the way, the personal income tax for people making over $250,000 a year-the combined tax break here is $800 million. The government has decided: "There's a priority area. We will cut taxes to the tune of $800 million for people making more than $250,000." So this is a budget about priorities.

From our side, we think that's $8 billion in tax cuts-and I'll talk about this later-when in fact we are spending less money today than we invested five years ago in our colleges and in our universities; we are spending less money today than we invested five years ago in our colleges and in our universities. We are spending less money now, provincial support money, for elementary and secondary than we spent two years ago, when you take into account that the government said, "We're going to cut the education property tax and replace it with provincial grants." They haven't done that.

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I think the government has said repeatedly: "We believe we should be spending more money on health care, but we can't get the money from the federal government," but they can cut taxes by $8 billion. So this is a discussion about priorities, and clearly this budget reflects the Harris priorities in the province. They are not our priorities, and I'll talk about that as we go along.

The member for Northumberland spent a fair bit of time talking about the finances. Let's recognize that in the province of Ontario we now have a balanced budget, but seven other provinces balanced their budgets before Ontario did. Quebec balanced its budget a year before Ontario did. The federal government balanced its budget two years before Ontario did. And, I might add, the day that Harris became Premier, both Quebec and the federal government had substantially larger deficits as a percentage of the gross domestic product than Ontario. So they were in worse shape, but they balanced the budget.

Interjection.

Mr Phillips: I know the member for Northumberland likes to-he may want to listen, because he may learn something.

So finally the provincial government balanced its budget. All you've got to do, people of Ontario, is look at the budget. Mike Harris added $24 billion to the debt of the province of Ontario in his first four years, and that's straight out of the budget. When he became Premier, the debt of this province was $90 billion; today it's $114 billion-$24 billion. And we say, "Well, we needed the tax cut." Of that $24 billion, $10 billion was borrowed money to pay for the tax cut. And so I say to all of Ontario, yes, you got your tax cut. Mike Harris has added $24 billion to the debt of this province, $10 billion of that for the tax cut. So Mike Harris says-

Hon Janet Ecker (Minister of Education): So how are you going to spend your tax cut?

Mr Phillips: Well, now the Minister of Education, who said that they would increase spending for elementary and secondary education and hasn't done it because they want to cut taxes for corporations and for capital gains-$8-billion worth of taxes-you should be looking after the elementary and secondary students of Ontario instead of cheerleading for another $8 billion of tax cuts.

I say to the people of Ontario that, yes, we now have a balanced budget. By the way, just as a small aside, the budget finally recognizes that there was a balanced budget 10 years ago. The budget itself finally says that, in spite of the fact that Harris would like to say otherwise. "After a decade of deficits, Ontario is now on track" to balance its budget. In other words, there was a balanced budget a decade ago. That's what Mike Harris says in the budget.

And so I say to Ontarians that, yes, we now have a balanced budget, but Quebec, which was in a much worse position than Ontario when Mike Harris became Premier, beat Ontario by a year. The federal government beat Ontario by two years. There were seven provinces with balanced budgets, and no, we wouldn't do that because we had to have the tax cut. Premier Harris would say, "We needed it to get the economy going." Well, let me say this: The most important reason why Ontario has been growing is exports. There is no doubt of that.

It was instructive to listen to the chief economist at the Bank of Montreal very recently when asked the question: "Well, haven't the Harris tax cuts been what's driving Ontario's economy? Isn't that why we borrowed $10 billion, to drive the Ontario economy?" The answer was no. This is what Mr O'Neill, the chief economist at the Bank of Montreal, said: "I don't think they have been a major influence in stimulating the economy. If you look at the growth in the Ontario economy over the last five years ... by far the dominant influences have been the US economy and the exchange rate."

I would say every single economist who appeared before our prebudget hearings-every single one-said the most important factor driving the Ontario economy is exports. And so I say to Ontario: Yes, we've got a balanced budget finally. We've added $24 billion to the debt. And by the way-this is instructive-there are organizations that are paid money to rate the credit worthiness of companies and governments. I remember when Mike Harris was the opposition leader and Ontario's credit rating was downgraded three times under the NDP. Mike Harris was going ballistic. He said it was an embarrassment. Well, I'll tell you, five years later we still have the same credit rating Bob Rae had when he left office. It hasn't been upgraded. Why? Because the credit rating agencies know that you don't get your fiscal house in order by cutting taxes before you've got it in order.

I would suspect the Minister of Finance, if he hasn't already, will be on the plane to New York begging to get the credit rating upgraded, and after five years I certainly hope we finally can. But what has been driving the Ontario economy, without a question of a doubt, is exports. If we don't accept that and understand that-the budget itself points that out. It says this about exports, and this is a measure of how important exports have become to the Ontario economy: Ten years ago, in 1989, exports represented 29% of Ontario's gross domestic product. Today it is 55%.

And so I say, with all due respect to Premier Harris, the economists and the budget itself would say that rather than making his arm sore patting himself on the back, he should have been patting President Clinton on the back because it is a function of the US economy continuing to grow dramatically that has allowed our economy to grow dramatically. If you can find any independent economist who would disagree with that statement, bring them on forward, because we haven't seen them. The government appointed two economists to come to the prebudget hearings and they said the same thing. They all said the same thing: It is exports driving the Ontario economy. By the way, I would say it is the auto sector that particularly has been driving it.

It's important to focus on this-in fact, I happen to think it's the most important economic issue facing us. I think health care and education are extremely important, but in terms of the economy it is, how do we deal with the fact that we are now the most export-oriented jurisdiction in the industrial world? And that's again from the budget. Nobody relies on exports like we do. But what does it mean?

The first thing I'd say is that when the government is looking to attract investment to Ontario, what do they say about Ontario? What do they say is important? Well, the first thing they say is that Ontario is one of North America's most peaceful and secure communities and that our remarkable health care and education systems are publicly funded and open to everyone. And it goes on in this document to point out many of the key reasons for investing in Ontario. Here's a key one: US manufacturers pay, on average, more than $3,100 per employee for the kind of health care coverage provided by Canada's publicly supported system, whereas Ontario employers pay only about $540 per employee in employer health care. You can see there a $2,500 advantage in Ontario's costs for health care. But how do we fund that? There's no magic in it. As the document says, our health care system is publicly funded. We have collectively chosen that we will pay taxes to fund a publicly funded health care system, fundamentally different from the United States. It is perhaps the most defining thing about Canada. Certainly if it isn't the most, it's one of the most. But let's watch what we're doing. That can only be funded from our tax system, but now we've chosen to say we have to get our taxes down lower than our neighbouring jurisdictions.

1930

In fact, it is instructive that we now find in the budget that when we're talking about tax rates, it isn't in comparison to other provinces. This is on page 161 in the budget: Ontario's commercial income tax rate. The only comparisons are to the neighbouring jurisdictions, to the States; not to Manitoba, not to Quebec but to the States. That is now where our focus is, and I dare say the Harris government pays far more attention to the tax rates in Michigan, Indiana and New York and has a closer relationship perhaps with the governors there than with our provincial counterparts. As a matter of fact, the idea of the tax rebate came not from some other province but came from Governor Ventura-Jesse "The Body" Ventura-in Minnesota and Tom Ridge in Pennsylvania. That's where the idea came from. In fact, it was on the front page of the New York Times several weeks before the budget. So this was not, dare I say, made in Ontario; it was made in the Republican governors' conventions.

Back to the exports, because in my mind we now are on a path where we are going to look at either matching taxes or being lower in taxes than our neighbouring jurisdiction. In fact, the budget proudly points out, "When Ontario's proposed corporate income tax rate cuts are fully implemented ... Ontario's combined federal-provincial rate ... would be about 10 percentage points lower than the current corporate income tax rates in nearby competing states." That's 10 percentage points, not 10%. It is like 25% lower than neighbouring jurisdictions.

If we believe, as we in the Liberal Party do, that fundamental to our Ontario, to our Canadian fabric, is a publicly funded, universally accessible health care system, it is impossible to sustain that if we're on a policy of, our taxes are going to have to meet or beat the US. Furthermore, it is ironic that corporations say and the government says, "Listen, an enormous advantage in locating in Ontario; you save money on health care, and then you're also going to pay dramatically lower taxes than your competitors in the US." It starts us very quickly on to a road of substantial problems in sustaining our fundamental health care system.

I go back to the finances. Yes, we now have a balanced budget. I say again that the Harris government crossed the line, ninth out of 11. It's no particular sense of pride that we now have a balanced budget. The government has indicated we've added $24 billion-that's almost 25%, an enormous amount-to our debt. The measurement of that is that over the next four years the government has told us they may reduce the debt by $5 billion-add $24 billion in the first four years, and they may reduce it by $5 billion over the next four to five years.

I thought I would spend just another couple of moments on this document, on, why should you invest here in Ontario? I mentioned the health care portion. It points with pride to other things. It says that tuition fees for law, medicine, computer sciences and electrical engineering are much lower than at American universities. The business schools of the U of T and Western have been ranked very well. It shows you a chart of tuition fees in Ontario versus our neighbouring jurisdictions. Of interest is that they are from 1997-98. They chose not to have the most recent ones because, as you and I know, the tuition fees have been going up dramatically. So here we are advertising that Ontario's huge advantage is our lower tuition fees at the same time that the government has chosen to take them up.

It also speaks in here about the human development index. It says with pride that the United Nations ranks Canada first in the human development index. How is that index determined? There are five parts to it: life expectancy at birth; adult literacy-one of the first things the government cut was the adult education literacy program; educational enrolment-mark my words, I guarantee you that as tuition fees rise dramatically, young people coming from families of modest means are not going to not see themselves in that world. I had a young lady in my office, a single parent, who went back to school, got her BA and now has a debt of $60,000. The banks want that money back, and she can't see her way out. I guarantee you that she will tell her friends of the plight she's in.

As we talk about the things that have made Ontario and Canada unique, why do we rank number one? The life expectancy at birth, adult literacy, educational enrolment and real GDP per capita. By the way, in here is a chart that talks proudly about our low crime rates in Ontario. This is the homicide rate, if anybody can see it at home-or get a budget. The homicide rate in Ontario and the robbery rates are dramatically lower than in neighbouring jurisdictions in the US. I point that out because that has happened for a reason. That hasn't been by accident. In my judgment, as we focus singlemindedly on US-type solutions to dealing with crime we ignore the history that here in Ontario, luckily-thank goodness for it; we should be thankful every day-our crime rate has been dramatically lower than that of the US, and without question it is because we have been prepared, all of us, to invest in young people.

There isn't a young person, historically, who has come from another country to Ontario who hasn't seen that they can go on to post-secondary education, hasn't seen that their family, their mother and father, in desperate times are looked after, are not thrown away. Programs are available for young people. I come as close to guaranteeing as I can that as all of us try to deal with safe and secure communities, if we ignore how we got there, how we got a homicide rate dramatically lower than any major US jurisdiction, how we got crime rates dramatically lower than all the neighbouring jurisdictions, we are making a huge mistake.

I have a strong opinion on how we got there. It was because we created a society where our young people saw that they had another avenue. We are one by one chipping away at those, not the least of which is that we deregulated tuitions. Boy, Bay Street loves it. This is a budget made for Bay Street: capital gains going down to 50%, income taxes dropping, corporate taxes cut in half, 10 percentage points lower than New York. Bay Street could not be happier. The young people of Bay Street can say, "These capital gains will allow me to send my young person on to law school." But for families of modest means, no way. We can say all we want "We'll help them get a loan," but the thought of climbing that loan mountain after you've graduated-I will argue strenuously that committing ourselves, and we are, to $8 billion of tax cuts-and I'll talk later about the investments we're putting into education-is an enormously sad, missed opportunity.

1940

There's a program on TV that I frankly dislike a lot. It's called Greed. It is a metaphor for what we may be in now. There's a part there where they have "The Terminator," where you go after one of your teammates and get rid of them. That's the sense I get right now, that it's greed time. I know that it may be very politically popular, and we know that tax cuts sound great, but I will urge Ontario to look behind this budget. My best analogy is that it's like when you're out buying a house. You see this house: It's been painted up; it's got a new roof on it; it looks great. The agent says, "Furthermore, if you buy this thing I'll give you a $200 cash rebate." But you get in the basement where the foundation is and you find it leaking. It's leaking in the areas where I strongly believe we have and had an opportunity to invest, and we are walking away from it.

Just to talk a little bit about some of the specifics on the tax front, I mentioned before that we've chosen to cut corporate taxes roughly in half. It isn't just matching our neighbours; we've said that we are going to beat them by 10 percentage points. Neighbouring US jurisdictions have combined rates of provincial and federal taxes at around 40%. The combined rate for Ontario now will move to 30%. And, as usual, the attack on the federal government says that if the federal government would just match what the province is doing, it would be 23%. So neighbouring US jurisdictions have a combined corporate tax rate of 40%; Harris would like to get it down to 23%. I understand that, but tell me again how we are going to fund our health care system if we've chosen to have tax rates at half those of the US?

Who are we speaking for here? I have no doubt that the people on Bay Street, with their dramatic cut in income taxes, with their corporate taxes cut in half and with capital gains tax cut from 75% to 50%, will be able to afford health care premiums at whatever they need. That's not an issue for them; it is for our seniors, middle-income people and our young people. Fundamentally, we're talking about the kind of Ontario and Canada we want.

That's why I spent so much time initially highlighting that we now are the most export-oriented jurisdiction in the world. By the way, I welcome exports. I'm thrilled that we are now a hugely export-oriented province-90% to the US. We have an enormously successful auto industry-thank goodness for that-driving the Ontario economy. My only disappointment perhaps in exports is that 10 years ago 85% of our exports went to the US, and today it's 91%, the point being that we have not developed our customer base, our client base, our business around the world. We have focused on the US. So none of my remarks should be interpreted as thinking that we in the Liberal Party don't welcome exports. In fact, we believe we can compete extremely successfully, but we also believe in some of the things this book says: You should locate in Ontario because we have an enormously successful and fine, publicly funded health care system. We have an educational system that everyone had access to in the past. We have a quality of life here that this document highlights. It highlights our safe and secure communities, it highlights our environment, all the things that, in our judgment, this budget puts at risk as it single-mindedly focuses $8 billion on tax cuts.

I wanted to talk now a little bit about the things that the budget is unable to do because of the tax cuts. Post-secondary education-this is the jargon we use, but basically colleges and universities-we originally thought have $200 million less than they had five years ago, but actually, because of the accounting, they'll have $300 million less than they had five years ago. If there is one thing that our corporate leaders tell us will guarantee future economic success, it is having a well-trained, well-educated workforce. There's an old saying, Mr Speaker, as you know, that the economic well-being of Canada used to be determined by the things that we grew and the things we took out of the ground. Today, that continues to play a role, but increasingly our asset is what's between the ears of our citizens. Yet we've chosen to say, "We're going to spend $300 million less investing in post-secondary education than we spent five years ago." By the way, 59 other jurisdictions in North America-the US states and all the provinces-have chosen to increase their investments in post-secondary education. But not us.

In our elementary and secondary schools, the government said: "We're going to cut property taxes. We're going to cut education property taxes." It was a big part of the last election. They said: "We're going to cut education property taxes and we'll replace that money. We'll find that from the province." Guess what? They said they cut $450 million in property taxes, but you won't find that in the provincial budget. They haven't replaced that for elementary and secondary. Dare I say it's a bit of a shell game, where the government will say, "We're going to spend $100 million here on this and $100 million there and $50 million here." Yes, but it's all money that was taken from another part of the budget and put in there.

The third part of the budget is health care. I find the attempt to divert the debate away from the quality of our health care system to who's going to provide the money interesting. It is instructive to me on several fronts, and I might take a moment to talk about it. One is that while Premier Harris was spending $5 million of taxpayer money, the money of everybody out there, on advertising railing at the federal government "You should be giving us more money," he had $1 billion in his little vault sitting there. He knew it was there. They told us they've had this money there for months, $1 billion. He could have, if he believed we should be spending more money on health care, simply taken that $1 billion and spent it, but no, he spent $5 million railing at the federal government.

1950

There is an argument about how much money comes from the federal government. I just wanted to put on the record that Premier Harris-Mike Harris at the time-was a member of the government with Frank Miller when they said to Ottawa: "Don't give us any cash. We don't want any cash. All we want is something called tax points." This gets a little bit interesting, but-

Mr Garfield Dunlop (Simcoe North): That's crap.

The Acting Speaker: Withdraw the word. It's not appropriate in the House.

Mr Dunlop: I'm sorry. I withdraw that.

Mr Phillips: Frank Miller himself said the provinces, led by Ontario and Quebec, simply wanted tax room. The federal government insisted on a cash component because it thought tax room was not the right way to go. By the way, in Ontario's books, in what's called the public accounts, they include what's called the tax point transfer. Do you know why Ontario wanted tax points? Because they knew that was in Ontario's best interest and would disadvantage Newfoundland, Nova Scotia and New Brunswick, the have-not provinces, "Just give us tax points, then we'll be a lot better off."

The federal government-as it turns out now, maybe foolishly-agreed with Ontario to transfer tax points. Any objective person who looks at it would say that when you include the tax transfers and the cash transfers, Ontario is getting more money today than it did five years ago. I challenge anyone to sit down and look at the numbers and find anything different. As a matter of fact, take a look at your own public accounts, because in there you do admit it.

Furthermore, I remember very well the day the Martin budget came out in 1995. As a matter of fact, the Common Sense Revolution says, "We publicly endorse the cuts." Premier Harris, if anything, said that day: "Well, we publicly endorse them. They don't go far enough." But the winds have changed. Now Harris has decided that's not the political thing to say today; five years ago that's how he got elected, but he's changed his mind.

My first point is on health care: I think the public is sick of this debate. They simply say to Mike Harris, "If you think we should spend more money on health care, Premier Harris, if you believe that's what we should do, why would you not do that and instead of an $8-billion tax cut, do something a little bit less?" If that's what he believes, that's what he should be doing.

For the public this debate about where the money comes from-there is only one taxpayer, I remind all of us. There's no magical money in Ottawa. It is the same money that comes out of the same pockets of the same people as here in Ontario. If we believe here in Ontario we should be spending more money on health care, then let's do it.

We've got $4 billion for corporate tax cuts, which will make Ontario's corporations 25% lower in tax rates than our neighbouring jurisdictions in the US. There's $1.2 billion on capital gains in here, and there's $3 billion more on tax cuts and personal income tax cuts. If we believe we should be spending more money, let's do that. The billion dollars-if Premier Harris believes that Ontario should be spending more money on health care, then surely, rather than this US-inspired Jesse Ventura cash refund, wouldn't we be better to invest it in our health care system?

I go back again to, "Tax cuts create jobs." You find me one economist who doesn't say the major driving force in the Ontario economy has been our exports. I say that our priorities are wrong: $8 billion in tax cuts when we're now spending $300 million less on post-secondary education; the province is spending less money on elementary and secondary schools. I gather Premier Harris is saying we're not spending enough on health care. I also wanted to say that again part of this Doing Business talks a lot about the environment here in Ontario, the clean air, the clean water. What has happened in the budget? We have cut the environmental budget once again. That's the area where, again, you want to look at building a strong long-term foundation. Surely we should be investing in the brains of this province. Surely we should be investing in the health of all our citizens. Surely we should be investing in our environment.

I wanted to talk a little bit about another area where this will not allow the investments, and that's in our infrastructure. The government talks often about this SuperBuild fund and how we need to invest about $4 billion a year in infrastructure, half of that from the private sector and half of it from the public sector.

The example the government always uses of good private sector investment is the 407. I say to the people of Ontario, particularly the users of the 407, that was a bad deal. You were ripped off. You will pay for 99 years for a pre-election cash grab.

Let's go through a few of the details of the 407 deal. It closed on May 5, 1999. That was the day the election was called. The cheque came in the door; the election was called. The 407 sold for $3.1 billion. It cost $1.5 billion to build and sold for $3.1 billion. The public may say: "That's terrific. We got $1.6 billion more than it cost to build it." But here's the catch: The $1.6 billion went into the pre-election slush fund, but who's going to pay for that? The poor users of the 407.

Mr Tony Ruprecht (Davenport): Forever.

Mr Phillips: Forever. Here are some of the details of the 407 deal. By the way, we are desperately trying to get at the real details, but the government refuses to release them. Here's what we do know. I can remember in the legislation they said, "We'll only sell it for 30 years, and then we'll get it back." It's 99 years. I remember the announcement the day the deal closed. They said, "We are going to limit toll increases, over 15 years in total, to approximately three cents a kilometre." In other words, 15 years from now the tolls could only go up a total of three cents a kilometre. In nine months, for a majority of the hours, it has gone up 4.5 cents a kilometre. By the way, if you don't pay your tolls, you don't get your licence renewed. Furthermore, the government refuses to let the public see the deal.

2000

The reason I'm spending the time on this is because the government will say, "That's our flagship." But here's part of the serious concern we have: We obtained a public document, which is the document the 407 owner was using to raise money, $325 million. Part of that document said, "If you want to invest in this, you really should come and look at the tolling agreement," that in order to understand why this thing is a good investment and why you can make money on it and why you should put your dollars into this thing, come and look at this tolling agreement, because that will tell you how we're going to get our revenue. That's an agreement the government has refused to give to the public. So I phoned the owner up and said, "I'm coming up to look at it," because they said, "You can come up and see this agreement." The owner knew who I was. He said, "Well, you have to invest $100,000 in it." I said: "Well, you never know. I'll come up and take a look at it." "But you have to have a broker." "I have a broker." "OK, but now if you look at it you have to sign a confidentiality agreement that you'll never disclose to anyone at any time what you saw."

What I'm saying is that if you're going to make money on the 407, if you want to invest in it, if you want to be part of the bonanza that's going to come by owning the 407, you can see these secret deals, you can look at them, because you're going to invest your money. But if you're a user of the 407, if you drive on the 407, if it's you who are going to be paying thousands and thousands of dollars in tolls, you can't see it. I find that obscene, that the public-by the way, in this deal for $3.1 billion, it sold for $500 million more than Air Canada and CN Rail, our national rail line and our national airline, combined sold for. This thing was the biggest cash grab certainly in the history of Ontario, if not North America, and it was because the government said: "We're going to sell you a road for 99 years. This thing is going to be jammed, because we all know that the area north of the 401 is going to grow and grow, and you can take the tolls without limit, and furthermore, if they don't pay, we'll be the real collection agency because they don't get their licence renewed."

Just today we got from the government part of the deal. But of course the key parts-do you see these? These are all blank pages. Right when you think it's going to get good, it goes blank.

Hon Mr Klees: How much did you pay for those invisible pages?

Mr Phillips: The member says, how much did we pay? You're absolutely right. In order to get the blank pages, we had to write a cheque. So they photocopied a blank page-not unlike, by the way, the debate we heard earlier today on what's called POSO, the provincial savings office.

The reason I'm spending the time on this is because the public hear that there's going to be the SuperBuild fund private-public sector partnership. Whenever we ask about a good example of private-public sector partnerships, we're told that the 407 is our good example. When you look at it, the poor users of the 407 have tolls up more than 50% in eight months for much of the day. It used to be that there was a non-rush-hour toll. Now everything's a rush hour. They simply said, "Everything's a rush hour." We know one individual whose licence couldn't be renewed because he owed them a penny. That deal was fundamentally flawed, and if the government thinks that was a good example of a public-private sector partnership, we have a serious problem.

I also wanted to chat briefly about gambling. This has become an enormously successful cash cow for the government. They've just introduced 10,000 slot machines. If anybody has one in their community-the member for London will know-they are are throwing off cash like you've never seen. What the government did was quietly publish a regulation one Saturday that said, "We're going to expand these slot machine facilities to include gambling tables." They didn't announce it like you would have thought they would.

Mr Michael Bryant (St Paul's): A press conference?

Mr Phillips: A press conference? No. It went through in what's called a regulation, published in the Ontario Gazette, that one has to go through, dare I say, with a fine-toothed comb to find it. There is no question that we in Ontario are now hooked on gambling. The government says it's going to be $2 billion in revenue. It's going to be well more than that.

At one time, it was a terrific economic tool for some of our border cities-for Niagara Falls, 80% to 85%, and for Windsor, 80% to 90% of the revenue was from the US. This was new money coming into Ontario. It was very helpful to the economies to both those communities, no doubt about it, and that is of no concern.

But if one believes that having disposable income is important, those 10,000 slot machines alone extract about $1 billion from the players. The racing industry has been happy with it-I understand that. But we are now moving to another 18 full-scale casinos at the racetracks. Incidentally, I think one eventually reaches a saturation point.

So I go back to the statement of priorities by the government in their budget. I know the tax cuts created a $24-billion increase in the debt. The debt went from $90 billion when Mr Harris became Premier to $114 billion now. I know that what has been driving the Ontario economy has been exports, which have comparatively little to do with tax cuts and a lot to do with the quality of our auto sector and our manufacturing sector, our ability to compete in the US and, dare I say, a low Canadian dollar as well. But that's the priority of the government.

We would have thought that at this time there might have been an opportunity to make some investments in the future of Ontario-our colleges and universities. This "Doing Business" document is full of compliments about the quality of our workforce and our education system, the very things we've chose to undermine in this budget.

Our elementary and secondary schools: When you take away what the government said it would put back in property tax cuts, it actually looks, and is, down.

The health care system: Premier Harris is saying we should be spending more money but decided not to.

Infrastructure: The only proud example they have about successful private sector partnerships is Highway 407, where the users are not only paying for the cost to build it-$1.5 billion-but is paying a $1.6 billion cost which had nothing to do with the highway. It was just a cash grab, closed literally minutes before Premier Harris called the election on May 5, 1999.

The budget cutting to the Ministry of the Environment and the Ministry of Natural Resources-two ministries that invest in the long-term health of our environment. Our agricultural community, our rural community-choosing to close the agricultural offices. It's a budget that bows down to the tax cut and ignores the areas in which we should be investing.

2010

I understand the small business tax will be cut to 4%. That will be very helpful for the doctors. Doctors are now allowed to incorporate. The OHIP fees were structured on the basis of a certain cost structure for governments, but now we're moving to allow self-regulated groups to incorporate. So I can see why, in order to get an agreement with the doctors, they had to provide some way of increasing their after-tax earnings. Good for the doctors. This is a big win for them, particularly with this budget. There are two things: It takes the threshold for small businesses from $200,000 up to $400,000. That's great for the traditional small business; it hasn't been changed in some time and one does need to look at adjusting these things. But for the doctors who are going to incorporate, this is a terrific opportunity to substantially increase their take-home pay.

Mr Frank Mazzilli (London-Fanshawe): You support it.

Mr Phillips: The member said we support it.

It was instructive: When we asked the staff to give us a calculation on what this means, they wouldn't. They ran for cover on it. This is a terrific gift to those who choose to incorporate.

On the budget bill, Bill 72, let me restate that it is an $8-billion tax cut, which is enormous. Recognize where the majority of it is: in corporate taxes. With these cuts we will move to tax rates-instead of roughly 40% federal and provincial in our neighbouring jurisdictions-

Interjections.

The Acting Speaker: Excuse me. I can't hear the member. It would probably make sense if you listened to the member, so that he could finish his speech.

Mr Phillips: Thank you, Mr Speaker.

Here's the priority of the Harris government: An $8-billion tax cut that, without any question of a doubt, benefits those who are best off in our society-$1.2 billion for those who are going to realize capital gains. It cuts the capital gains tax from 75% to 50%-terrific. It's a huge benefit to the Bay Street crowd. But for those of more modest means, no. On the corporate taxes, we're not only going to match the neighbouring jurisdictions, we're going to go 10 percentage points below them. As a matter of fact, Harris says, "I'd like to get to half the US rates." Well, I understand the corporations like that. But if we are to sustain our health care system and sustain the way we have managed to ensure that young people have a chance at post-secondary education, we have to make our minds up. It is not possible to sustain that and have dramatically lower taxes than our neighbouring jurisdictions.

The $1-billion refund: As I said, it's Jesse Ventura, it's bringing in the US type of propaganda. If Premier Harris was serious when he spent your money, $5 million, saying: "We need more money for health care. We have to get more money for health care. We think health care is a priority"-at the very time he was running those ads, he had the $1 billion sitting in the bank and he knew it. He said: "No, I'm going to play this game of blaming someone else. I've got the money, but I'm not going to tell anybody I've got the money until after my little ad campaign."

This is about priorities and the future of Ontario and how we want it. I understand, as the government continually reminds us, that you won the election and you have the right to do it. But we do not have the obligation to agree with that $8 billion dollars of tax cuts, plus $1 billion of cash in the form of a Mike Harris advertisement, at a time when we're spending and investing $300 million less in post-secondary education, at a time when we're spending less money in elementary and secondary education, at a time when we have huge, growing problems with our environment. Most of us are faced with low water levels in the lake, smog alerts at the earliest we've had them that I can ever recall, but now the government's decided this is the time to cut the environmental budget, this is the time to cut the natural resources budget, this is the time they said, as my colleague Mr Cleary constantly reminds our caucus, they can cut out the agricultural offices because we have to find the money for these tax cuts. Well, it is about priorities, and in our judgment the priorities of this government are wrong.

The Acting Speaker: Comments or questions?

Mr Bisson: I just want to comment on a couple of points that the finance critic for the official opposition had on the budget speech. He's right on the one point, that the government has different priorities. I think it's a question of the choices they make. They had a decision to make. They could have taken the surplus in this year's budget and applied it to health care, something they have been promoting fairly effectively over the last three or four months. They have been after the federal government to transfer more dollars from the federal budget, from their surplus, into health care programs. I would have to believe that the government, in their ads, were sincere when they were saying they wanted more money in health care. What they've done instead is play a political game, trying to blame the feds for the problem they've got with the health care cuts they've made over the past couple of years, and when they had an opportunity themselves to put dollars in their own provincial budget, they chose not to do that. They basically put one cent into health care for every 99 cents that they gave by way of a tax cut.

I think it's not only a question of priority, it's a question of choices. I know that even in Conservative ridings there are many individuals who are really worried about what is happening in the health care system. The line-ups for services are getting longer, services are starting to deteriorate because of the cuts that have been made in health care, and they wonder, justifiably so, why it is that a government which on the one hand has been spending millions of taxpayers' dollars making the argument to spend more dollars in health care on the part of the federal government, chastising it because it didn't do it in its last budget-they themselves, when they deliver a budget with a surplus, decide to put one cent out of every dollar back into health care and 99 cents went into a tax cut. You've got to really wonder about the sincerity of the government.

I think it comes down to choices. This government chose on the side of tax cuts rather than trying to provide services to the people of Ontario. I think that choice is going to haunt us in the long term.

Mr David Young (Willowdale): I appreciate having a few moments to reflect upon the comments made by the member for Scarborough-Agincourt. During his comments this evening, he asked us to reflect upon the halcyon days, those wonderful days. He told us not to forget where we came from. I think he's right. I think we should remember just how far we have come. We should think back to the days in 1988, 1989 and 1990, when we in this province had the privilege of having the Liberals in office and hearing about their budgets.

Remember the headline in the Globe and Mail on April 21, 1988: "Ontarians Face $1.3 Billion Tax Increase." It goes on to say: "Continuing the Liberal habit of raising taxes rather than restraining spending, he has hit every aspect of the Ontario economy for increased revenue in his fourth budget.

"Asked whether the election victory, which frees the Liberals from facing the voters for another three or four years, also freed him to raise taxes, Mr Nixon told a news conference,"-of course, he was the Treasurer at the time-"`I'd be less than honest if I say that it's not a consideration.'"

What were the comments that emanated from the media after the next budget? Here's one: "In all, it's a $1.3-billion heist of extra taxes from Ontarians, with a special, nastier rip at the people who dare to continue trying to live in Metro."

On their last budget before they were booted out of office, here's a quote: "And in his last two budgets alone, Nixon hiked taxes by $2.6 billion. In fact, this new cigarette tax was Nixon's 33rd straight tax hike in his six budgets ... ." That was scandalous. We know that. They know that, in all honesty. The people of Ontario knew that, and that's why they're on that side of the floor and we're over here.

2020

Mr John C. Cleary (Stormont-Dundas-Charlot-tenburgh): First of all, I'd like to congratulate the member for Scarborough-Agincourt for his fine, thoughtful speech where he talked about the fact that the debt has increased since 1995 by $24 billion, and also all the money that was spent on government advertising, and over $3 million to send the cheques out, as per this year's budget, when we know right and well that all isn't well in health care.

Back in 1995, when the Premier of the day was asked to comment on health care and hospital restructuring on Global television, he was asked by Robert Fisher, "What are your plans on hospitals?" "You know, Robert, it's not plan to close hospitals." Since then, he has closed 25. In my riding this past weekend, I've had people waiting to get transferred for triple bypasses; I've had people waiting to get transferred for cancer care. That's pretty devastating to the family.

The other thing that has devastated rural Ontario is the closing of the rural agricultural offices. I remember in the last two elections, it was not their plan to take any money out of agriculture. Well, it's happened. The rural offices have been closed and that's torn the heart right out of many communities, because they were used 16 hours a day, six days a week.

We all know that what is driving the economy is the booming American economy, the exchange rate and low interest rates. If it wasn't for that, which is not within the control of the province of Ontario, we would be living in a different province. So we can't take all the credit for it. But at least we've got to pay our bills and stress health care and education.

Hon John R. Baird (Minister of Community and Social Services, minister responsible for francophone affairs): I want to congratulate my colleague from Scarborough-Agincourt for his remarks. They're certainly well presented.

I guess we have a fundamental disagreement with the member opposite. When he was in government, they thought that the government wasn't big enough, that they had to tax more, and they raised taxes 33 times. Then in 1990, they took another flip-flop, another U-turn and they voted against every single tax increase the NDP government of the day brought in. So I was excited when we were elected in 1995. I thought, "He was just as much against the NDP tax increases as we were, and he'll want to help us get rid of the NDP tax increases-money he said the government didn't need-by voting against them." But every day he would come into this House and he would vote against and speak against tax decreases, and the member opposite said that we had to wait until the budget was balanced for tax decreases.

I was so excited. I came here to hear his speech on the thing. I said: "We've finally balanced the budget. It's even the second year of a balanced budget. Gerry Phillips will finally be able to come on board and support our tax decreases."

But then he said no, the tax decreases, the income tax cuts particularly, had to be progressive. I looked in and I thought: "Wow, if you make $30,000, you get the same income tax cuts under the dividend as if you make $1 million. So if you make $30,000 or $1 million, you get the same amount. Gerry Phillips will want to support us." Then we find out, "No, you have to spend more on health care." I thought, "Wow, if we could just spend as much as the Liberals promised to spend on health care, maybe that would be enough." But it's not enough. We found we're spending almost $6 billion more in provincial money on health care than the previous government did, more money that the party opposite promised to spend in the last election, and it's still not enough.

What we discovered from the Liberal Party is that tax cuts later are tax cuts never.

The Acting Speaker: Two-minute response.

Mr Phillips: Just to respond to a few of the comments, my concern with the Harris tax cuts has been, first, that we've had to borrow the money-the only one in North America that's decided to do it this way. I used to be in business in the good old days, though I like this job, and there was never a bank that would ever allow you to declare a dividend if you were running at a loss. They'd say, "Listen, get your fiscal house in order." That's what, dare I say, Ralph Klein did, that's what Bouchard did, that's what every other province did. Harris has added $24 billion of debt to the province; he had to borrow the money. That was always our concern with the way you handled it. You should have done it, in our judgment, the way every US state did it, the way every other jurisdiction in Canada did it.

Our problem now is that you've chosen $8 billion of tax cuts. You've said: "We are going to commit to $8 billion of tax cuts. It's going to be $4 billion for the corporate sector, and $1.2 billion-if you can cash in your shares, we're going to cut your tax rate from 75% to 50%, and we're going to reduce personal income taxes and, by the way, get rid of the surtaxes on the upper-income."

You've got $8 billion there, but you don't have any money for post-secondary education, you don't have any money to invest in our colleges and universities and you've chosen not to invest in our elementary and secondary schools. It was Premier Harris who said, "Federal government, give me more money because I'm not spending enough money on health care," and he had a billion dollars hidden away in the bank.

So it's about priorities. We know your priority and we realize you got elected on that basis, but I think Ontario knows that we need to invest in our infrastructure, our human infrastructure.

The Acting Speaker: Further debate?

Mr Dunlop: I'm very pleased to be taking part this evening in this historic and important debate on Bill 72, An Act to pay a dividend to Ontario taxpayers, cut taxes, create jobs and implement the budget.

This piece of legislation is one more important step in securing a strong future for the province of Ontario. It builds on job creation and it builds on strong economic growth. The announcement of the 2000 provincial budget in this House was a very historic day for the people of this province, as our government balanced the books, not only this year but last year as well. As the finance minister noted, the last time the Ontario budget was balanced in two consecutive fiscal years in a row was 1942-43 and 1943-44, almost 60 years ago.

I would like to commend Finance Minister Eves, who upon coming to office in 1995 had to face a projected deficit of $11.3 billion after 10 years of taxing and spending by consecutive Liberal and NDP governments. During the previous reign, the NDP government was spending almost $1 million every hour more than it was taking in. It was five years ago when this government committed to the people of this province that we would balance the books, and we have fulfilled that promise earlier than expected.

The Common Sense Revolution that Premier Harris outlined in 1994 has been a resounding success because he kept the promises he made. I hear all this talk tonight about adding to the debt. When you start with $11 billion and you lay out a plan to the people of this province-it was laid out clearly that there would be accumulated debts until the budget was paid down.

Interjections.

The Acting Speaker: Order. Let the member make his speech.

Mr Dunlop: But keeping promises is nothing new for this government. That is one of the main reasons I personally ran as a candidate for the Mike Harris team in the last election. I remember, during that campaign, when Premier Harris came to my riding, the first time I'd ever actually got a chance to meet him, and visited Napoleon Wolf Steel, makers of quality woodstoves, gas barbecues, gas stoves and fireplaces. I remember this because just last week I was on hand for the unveiling of a multi-million-dollar expansion of this company. Clearly the economy is doing very well, thanks in large part to the policies of this government, the main policy being that tax cuts create jobs.

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I am happy to inform this House of many more important projects in my community, particularly a multi-million-dollar expansion of Weber Tool and Mold. I'll be attending the grand opening on Friday in Midland, Ontario. This company will hire more staff and inject additional money into the Simcoe North economy. It is a $15-million expansion and will exhibit the only technology of its kind in the world.

On the same day, I have a number of other events to attend as well. For example, the Minister of Tourism will be coming to my riding and in the afternoon on Friday we will be celebrating the opening of the expansion of a new conference centre at the inn at Christie's Mill at Port Severn, Ontario. The economy has been doing well, the tourism industry has been doing well, and this company, which is on a new sewer and water system in the village of Port Severn, planned this expansion. They're already open and the business is thriving.

As well, I will be attending on Saturday the expansion of the Tom Smith Chev-Olds dealership in Midland, Ontario. They've doubled the size of the showroom and opened a complete new service department. As we all know, the construction industry is doing very well, but so is the automotive industry.

As well, we have some other exciting news in our riding. I was so pleased when Minister Cunningham announced, through Minister Wilson, that Georgian College in Barrie, which has campuses throughout Simcoe county, will be receiving $18 million in SuperBuild funding towards expansion of the college, which in a partnership through York University will allow students in our communities to receive university degrees.

As well, as you all know, and it's been very controversial here, I also have the superjail in Penetanguishene being constructed in my riding. There's approximately 300 new permanent jobs at the site, but so far this $85-million project has left about $24 million in the community of Penetanguishene in construction costs and labour and in accommodation and food.

Probably one of the worst-kept secrets was the fact that there were going to be tax cuts in this budget. We've got accustomed to Finance Minister Eves giving us tax cuts, and we expected them again in this budget. After all, in 1996 this government made 10 tax cuts, as promised; in 1997, 20 tax cuts; in the 1997-98 inter-budget, eight more tax cuts were announced; in 1998, 29 more tax cuts were announced; in the 1998-99 inter-budget, two more tax cuts were announced; last year 30 tax cuts were announced; and in this year's budget, we're proposing 67 more tax cuts. When implemented, this government will have cut taxes 166 times since being elected in 1995. And yes, the members opposite have opposed all 166 tax cuts.

This has been translated into more jobs and more opportunity for the people of this province. For example, in April this year we created 2,300 net new jobs in this province. Unemployment fell to 5.5%. The youth jobless rate has now fallen to 11.4%. Nationally, employment rose by 4,800 jobs. So Ontario has contributed about 50% of the jobs created in Canada, with about 33% of the population.

As we have cut taxes 99 times from 1995 to 1999, over 701,000 net new jobs have been created. Most of these jobs have been in the private sector. In 1999 alone we had 198,000 new jobs created in this province. This is clear evidence that tax cuts create jobs. The debate is over. Now perhaps our federal government will seriously follow our example.

Included in this year's tax reductions is a $200 rebate cheque to be issued to those I would like to call the investors in Ontario's economy, the people of this great province. Before this government was elected, taxpayers were forced to put more money in but received nothing in return. Liberal and NDP governments told taxpayers to give and give-tax and spend, tax and spend. What did they get in return? More tax hikes. Thanks to the Mike Harris government, they are finally getting some of their hard-earned money back in the form of a cheque. I hope the Leader of the Opposition's friends in Ottawa copy our lead and give the people of this province more of their hard-earned money back in tax cuts, health care spending and tax dividends, and I hope they quit clouding the issue with these tax points.

As a member of the Premier's task force on rural Ontario, I had the distinct pleasure of touring this province and hearing the concerns of rural Ontarians, especially about the many barriers that are preventing businesses in rural Ontario from creating more jobs. Rural residents don't want to lose their brightest children to the big cities. Our youth deserve equal opportunities no matter what communities they live in.

The task force recommended a number of initiatives that will help remove barriers to economic growth. I would like to personally thank the minister for responding to our report and I'd like to thank Dr Galt, as chairman of that committee, for his leadership and for introducing a number of initiatives such as the following: There is the establishment of a $600-million Ontario small-town rural development initiative, of which $200 million will be set aside for economic development and $400 million for infrastructure through SuperBuild. We're converting the retail sales tax rebate program for farm building materials to a point-of-sale exemption. We're cutting Ontario's mining tax rate in half, from 20% to 10%, over five years, which will help northern communities.

When we visited St Mary's, we heard the Stratford Festival people make a presentation about the importance of the Stratford Festival to that part of Ontario. I was extremely pleased to see $2 million being put in for the redevelopment of the Avon Theatre in Stratford. I believe $300 million a year is generated from the use of the Stratford Theatre.

We have listened to rural residents and we remain committed to spreading the benefits of a strong economy to all regions of this province. More of Ontario should enjoy the economic boom that the GTA and Golden Horseshoe are enjoying.

While on the task force and since being elected as the representative of Simcoe North, the number one issue of concern that I have heard has been in the area of health care. The budget reconfirms our government's commitment for a strong health care system for the people of this province. Last year alone, we invested an additional $1.4 billion in health care. Since coming to office we have increased health care spending to $20.7 billion in 1999 and we have committed to increase that funding to $22 billion for this coming fiscal year.

Mr Dwight Duncan (Windsor-St Clair): On a point of order, Mr Speaker: The member is giving a very interesting speech and I would have thought it appropriate to have enough members in the House for quorum.

The Acting Speaker: Is there a quorum?

Clerk at the Table (Ms Lisa Freedman): A quorum is not present, Speaker.

The Acting Speaker ordered the bells rung.

Clerk at the Table: A quorum is now present, Speaker.

Mr Brad Clark (Stoney Creek): On a point of order, Mr Speaker: Is it appropriate that a member would call for a quorum call while he's in the House and walk out?

The Acting Speaker: That is not a point of order. The member for Simcoe North.

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Mr Dunlop: It was only a year ago that the government promised to invest $22.7 billion in health care by the year 2003-04, that being in our Blueprint. That goal will be reached next year, a full two years ahead of schedule.

In the health care portion of our budget we had a lot of interesting announcements as well. The one that comes to my mind is that $1 billion will be invested in hospitals to accelerate capital restructuring. That's very interesting in my community because we have about a $36-million project at the Orillia Soldiers' Memorial Hospital that we're very interested in seeing proceed. Fundraising is currently underway for that. Royal Victoria Hospital in Joe Tascona's riding south of me in Barrie is proposing a cancer care facility. I'm very fortunate that I have two nursing homes under construction currently. St Andrew's Centennial Manor in Midland is putting a 100-bed unit in and Leacock Point just started construction last week in Orillia of a 70-bed unit.

We recognize that many hospitals are facing transition issues and for them we have included $235 million in this year's budget. Glen Penwarden, the CEO of the Orillia Soldiers' Memorial Hospital in my riding, is quoted as saying, "It's a tremendous budget increase, one the system needs."

We recognize the importance that medical research and development plays in providing the best care for all Ontarians. To that end there is a $500-million endowment to the Ontario Innovation Trust, including investment in cancer research facilities.

As Dr Calvin Stiller, chairman of the Canadian Medical Discoveries Fund, said, "The creation of the Ontario Research and Development Challenge Fund and the Ontario Innovation Trust has launched a new era of exploration and excitement in both the public and private research communities right here in Ontario."

For priority programs such as cancer, cardiac and end-stage kidney disease there will be an additional $54 million, along with $45 million to expand toll-free telephone health services.

In underserviced areas such as mine there is a provision for a total of $4 million each year for free tuition for medical students moving to rural and underserviced areas. I have to admit we have a problem now and in the future with a shortage of doctors and I'm very pleased to see that happening.

Dr Ronald Wexler, president of the Ontario Medical Association, said, "Today's provincial budget is a significant reinvestment in health care for Ontario and is a vital step in the process of beginning to fix our health care system." Wexler said the government "has laid solid groundwork for long-term solutions to the challenges facing our health care system."

I understand that the amount of money that a government spends is not the only measure of good health care. Sustaining the quality of health care that Ontarians deserve requires restructuring and reforming our health care system to keep up with the new technology and meet the challenges.

One of the most important areas of reform is in primary care. That is why our government introduced primary care networks in 1998.

Health service is of a higher quality because there is better communication about the patient's health. The family doctor, nurse or other health care professional the patient deals with will keep his own family doctor informed about the health care problems that are around. That's why we need the primary care system.

If a patient speaks to the nurse staffing the after-hours phone service, his own family doctor will know about it the next day and may follow up to see how that patient is doing. There is improved sharing of information about the patient's medical history or medications through computers, and this leads to better advice and treatment.

To support this initiative the budget has set aside $150 million for new information systems, which will be the backbone of the primary care units. Another $100 million will be set aside to expand these pilot projects to other communities and eventually across our system so that everyone has access to a doctor 24 hours a day, seven days a week.

While health care was the number one priority, the second issue that I heard about was education. This being Education Week, I would like to talk about how the budget provides more funding for our education system and how this government has acted in the best interests of improving the quality of education in our province.

Earlier today I heard the member for High Park-Parkdale go on and on about how we cut funding on education. Here are the facts: In 1994-95 and 1995-96, the total funding going to school boards was $12.9 billion. In the upcoming 2000-01 school year, the funding available to school boards will be more than $13.4 billion. Furthermore, province-wide funding to the classroom in 2000-01 is expected to be $700 million higher than it was in 1997, the year that improvements to the funding system were announced. Where are the cuts? All I see are increases in spending.

As well, in the 2000 budget the government announced more money to help our educational system. We've committed about $270 million in additional funding to education in a wide variety of areas, including:

-$100 million to reduce average class size in JK to grade 3 down to a maximum board average of 24 students from the previous average of 25. I understand this will require 1,000 additional teachers;

-$70 million for school-based programs to assist children in JK to grade 3 to build their reading skills and other skills important in early learning;

-$70 million to help the early identification of learning problems and other exceptionalities, focusing on JK to grade 3. John Laughlin, director of the Thames Valley District School Board in London, said of this commitment, "That is something we applaud";

-$23 million in one-time funding to recognize the increased costs of transporting students to and from school. We heard a lot about this on the Premier's task force from the school bus operators, and I'm glad to see that this has been implemented to try to help them out a little bit because of the rising cost of fuel.

There is $140 million this year for special education. This funding will allow for early intervention and will expand programs for students with speech and language disorders and learning disabilities. It will also be invested to increase the number of specialist teachers and professional supports. As Dr Bette Stephenson, chair of the Learning Opportunities Task Force, has said, "Ontarians can be proud of their government's initiatives to open doors for learning disabled children." The increasingly successful experience at the post-secondary level is just one indication of their value.

We've allocated $5 million to support training teachers to identify signs of abuse or neglect, as requested by June Callwood, author and highly respected advocate for social justice.

I know my time is running out. I didn't quite get through it but I want to thank you for this opportunity this evening of speaking to this very important bill.

The Acting Speaker: Comments and questions?

Mr Duncan: I'm pleased to have the opportunity to respond to my colleague from Simcoe North, who always presents a very reasonable position but one that I feel compelled to respond to.

I noted that he was talking at some length about what he believes to be the achievements. He neglected to mention that this government has added $24 billion to the provincial debt, second only to the Bob Rae government in the history of the province. I noted that he neglected to remind the people of Ontario that this is the second-last government in this country to balance its budget, behind, once again, the New Democrats in British Columbia. This government's priorities have not been properly followed. Number one, before there were tax cuts there should have been a balanced budget. No one disputes that when there's a period of surplus, consideration must be given. The question is priorities.

I listened very attentively to the member for Simcoe North when he spoke about primary care reform. What he forgot to tell you is that this government's deal with the OMA effectively killed primary care reform in Ontario.

I just keep coming back to the fact that this government added more debt to the taxpayers of this province than any government save and except the Bob Rae government of 1990 to 1995. They taxed and spent almost the way Mulroney did, and I know a number of them supported Mulroney. I know the Minister of Community and Social Services was a loyal servant of the Mulroney government as they increased taxes and increased the deficit.

Finally, the member spoke of education. No government in the history of this country has a worse record on education than the Harris government. You all ought to be ashamed of yourselves.

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Mr Bisson: I'm going to stop the temptation to talk about the last time there was supposedly a balanced budget in this province under the David Peterson government, who were defeated, and then when we opened the books when we got back into the Legislature it turned out that there was a deficit of almost $4 billion at that point. So talk about people blowing out both sides of their mouth on that one.

When it comes to the question of the debt, the thing I find interesting is, when I sat in the Legislature from 1990 to 1995, I listened to Mike Harris and a number of members who are now in the government talk about the importance-and they're doing it again-of getting the debt under control. Even though we were going through the worst recession since the 1930s, the Conservatives talked about how debt was such a bad thing. Obviously some people bought the message, because in 1995 they voted these people in. But what did they do? They borrowed money in order to give a tax cut to try to fulfil some ideological dream they have. But the result has been to increase the debt.

Hon Dianne Cunningham (Minister of Training, Colleges and Universities): Oh, come on.

Mr Bisson: Oh, come on. What did you do? Every tax cut that you gave meant you had to borrow the money or you had to take away from future surpluses to pay for it. What they managed to do was to increase the debt in the province by over $30 billion over the last four to five years.

These guys across the way are trying to have it both ways. If you truly believed the debt is an important thing, you wouldn't have started off by giving a tax decrease while you were trying to balance your budget, and now that you have the surplus, you would not be using the surplus to give a tax cut. Rather, you would be trying to bring your debt down, something that you're not doing.

Mr Galt: I'm very pleased to respond to the member for Simcoe North, just an exceptional presentation.

I really want to zero in on his efforts as a member of the Premier's Task Force on Rural Economic Renewal that I was fortunate enough to chair. I can tell you the commitment of this member: He was literally at every meeting. There was one meeting he had to miss and that was because he was back in his riding for a commitment. Otherwise, he was there 100% of the time. He was there when we started and he was there till the end of the meeting. And the family is committed. When we stopped in Orillia his wife was there to wish him well. She gave him a kiss. I thought it was one of the lobbyists who was there, but it turned out it was his wife. That's the kind of commitment that's in that family. I can tell you that I was very impressed.

Mr Clark: A real Conservative family.

Mr Galt: A real Conservative family.

The member for Simcoe North was telling us about the priorities that we heard while we were on the road. There were several priorities, but look at the response of the Minister of Finance when he heard that there was a need out there. How much was in the budget? Six hundred million dollars for small-town and rural development. That's the kind of dollars that were set aside.

We also heard on the road the problems that the school bus operators were having. What happened in the budget? Twenty-three thousand dollars for next year for the school bus operators here in the province.

The shortage of physicians: What's in the budget? Four million dollars for physicians to pay for their tuition if, when they graduate, they will go back to rural Ontario and those areas that are in desperate need of physicians. What did they do back in 1993? They cut 25% of the training spaces in our universities for physicians and specialists. That's why we're in trouble today with primary care, because of the cuts that were made to the training of physicians.

Mr Bradley: First of all, I want to compliment the Minister of Municipal Affairs. He now has on his desk a copy of Merger Mania: The Assault on Local Government. I am pleased he has that. It is certainly worth reading, and I hope he takes it to heart, as I know he will. He's a person who wants to get this kind of information. As long as you stay out of Niagara, we'll be fine. Cold Blue is a little different. I had to be careful with that one.

Member for Simcoe North, I think I heard you say, "Don't give me the malarkey" about tax points or something. It's interesting in the House when you listen to an answer by the Minister of Transportation. The Leader of the Opposition asked him a question about the expenditures for public transportation. Do you know what his answer was? He said: "We gave the municipalities some tax room. We vacated this tax room and allowed them to have the tax room." That sounds familiar. I just want to say that you are using exactly the same arguments.

Hon Mrs Cunningham: That's not the same thing.

Mr Bradley: The member for London North Centre says, "That's not the same thing." Tax room is tax room. I have to tell him that.

What happened was, Mike Harris really wanted the money from the feds to fund his tax cuts. If the feds give him one more penny, it won't go to health care, it'll go to fund the tax cuts. You didn't follow my recommendation. I said you should forget about the tax cuts and then blame the feds and say, "You know, we wanted to give tax cuts, but those awful feds wouldn't let us." But the true priority was giving tax cuts to the corporate sector and to the richest people in the province.

Lastly, I notice you didn't mention the huge cut in the Ministry of the Environment. The Ministry of the Environment has been cut now by 40%, with 33% of the staff out the door. I thought the member would mention that for sure. And I'm glad to see the Minister of Municipal Affairs with Merger Mania in his pocket.

The Acting Speaker: Response, the member from Simcoe North.

Mr Dunlop: I appreciate all the comments made by all the members here tonight.

I have to repeat some facts. When Mike Harris came to power in 1995, he inherited a deficit of $11.3 billion. We were spending $1 million an hour more than we were taking in. He promised tax cuts to stimulate the economy.

The results by the year 2000-I think we have to look at what actually happened. Ontario's economic growth in 1999 was 5.7%. The Ontario economy grew faster than the economy of the rest of Canada. The Ontario economy grew faster than the economy of the people south of the border, the United States. The Ontario economy grew faster than all the industrialized countries of the G7.

Our exports are up. Our construction industry increased 24% in 1999. Our auto sector is up 16%. We have created 701,000 net new jobs. Almost 400,000 fewer people are on the welfare rolls than there were in 1995.

Interjection: Close to 500,000.

Mr Dunlop: I'm sorry, close to 500,000. It's very clear: tax cuts create jobs. The debate's over.

The Acting Speaker: Further debate?

Mr Steve Peters (Elgin-Middlesex-London): It's with a sense of regret that I stand before you tonight and get to speak to this budget. I do not want to come to the dark side. I will stay on the side that puts people first in this province and not a government that does things that hurt people. Do you know what? This is a budget that does not contain a vision. It does not look at the future. It's only looking at the short term. You're not looking at the long term, and that's a serious mistake. This is a budget that fails the future of this province. It's a budget that fails to use today's wealth to secure tomorrow's prosperity.

This is a government that is ninth out of 11 provinces to balance its budget. This is a government that has implemented unprecedented user fees across this province-the honourable member for St Catharines said 892 and still growing and counting. This is a government that has had the least amount of respect that I have ever seen for municipal governments. I had the opportunity to be a municipal politician under a Liberal government, a New Democrat government and a Conservative government, and this government has the least amount of respect for municipal politicians. The unprecedented downloading that has taken place in this province is a really serious problem.

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This budget fails to address the concerns and needs of this province in so many ways. There is no mention in this budget of dealing with the serious situation of homelessness that exists in this province. There are no initiatives in this budget to address those serious problems, and no initiative to see any new emphasis directed towards the much-needed areas of public housing and supportive housing. The goal has always been that the private sector is going to do it. Well, the private sector hasn't done it.

Interjection.

Mr Peters: If you look back to 1995, how many public housing units have been built in your riding of London-Fanshawe? Zero public housing units. That's a serious disgrace.

The other area they failed to address in this budget is the whole question of public transportation. Public transportation has been downloaded to municipalities, but municipalities are trying to cope with an unprecedented amount of other issues that have been downloaded on to them. Public transportation needs a serious investment and a commitment by this government, and there's no commitment in this budget.

Let's look at some of the things that are wrong in this budget. Let's start on page 5, "Tackling the debt." This government hasn't tackled the debt. We've seen the debt of this province rise dramatically-$24 billion. But when you follow the numbers through in this budget, the emphasis on debt reduction is $5 billion. What kind of investment is that in our future? What you're doing is mortgaging the future of the children of this province. The debt you are leaving on the backs of children is a disgrace, and you should be ashamed of yourself as a government for your lack of attention to dealing with this most important issue of the debt.

The $200 rebate-not everybody is going to receive that $200. By the way, I think it's a real misconception that everybody thinks they're going to get $200 back. Why didn't you apply that $200, or whatever the figure may be, to the debt? Pay off the debt of this province, get us on the right track and don't continue to increase the debt. If we see interest rates take any significant rise, we'll be in serious problems in this province and this government is going to be held accountable for that. You are mortgaging the future. They haven't even taken into account-I'd love to know what the actual costs are going to be to mail out all these cheques. They have not addressed that.

I think we need to talk about some other issues in the budget. There's the discussion of the $300 million over five years for sports, culture, tourism and partnership initiatives. My constituency office received a number of calls. The best estimate the Ministry of Citizenship, Culture and Recreation could give today was three to six months before we have a better idea of where those dollars are going to be used. This means that municipalities and cultural organizations whose budgets are already set for 2000 are not going to have a chance to tap into any of this money for the year 2000. That's a real shame.

On page 18 of the budget, they talk about renewed investment of $1 billion dollars in Ontario highways. There's nothing in this budget for much-needed upgrades to highways like Highway 401. Within my riding I have 80 kilometres of the 401, including 50 kilometres that are part of this death trap that exists between Windsor and London. There's nothing, no commitment in this budget to anything toward Highway 401.

It's unfortunate that the Minister for Colleges and Universities has left the room. They talk about the SuperBuild investments that are going to be taking place. I want to know if that minister and the minister responsible for disabilities issues in this province-has this issue been raised around the cabinet table to ensure that every single dollar to be spend on investment in new spaces is going to be barrier-free? I certainly hope so. The minister and the member for London-Fanshawe know. They saw first-hand in their own ridings where a brand new facility was built, but not to barrier-free status. They had to spend another $70,000 to make it barrier-free. I think it's incumbent on the minister responsible for disabilities issues that she raise this issue at the cabinet table to ensure that for every dollar that's going to be spent by this government, not a single new barrier is going to be added. One only has to look at Cambrian College in Sudbury to see how you can create a barrier-free building at less than 1% additional cost-something that needs to be addressed.

We've heard a lot of talk on the question of rural Ontario. There are a few issues that I think need to be raised. When you look at their budget for building strong and safe communities, it's really interesting how this government loves to re-announce things. They talk about the $35-million rural youth job strategy. That's an old announcement. They talk about the $30-million rural job strategy fund, a three-year program. That program ended March 31. It's out of money. You talk about $3 million to create jobs for rural students-the rural jobs program. You're going to create 4,500 jobs. I say right now to the Minister of Education, I can tell you how you can create 4,500 jobs in this province. Allow the school boards in the tobacco growing sections of this province-my riding of Elgin-Middlesex, Haldimand-Norfolk, Brant county-to make adjustments to their school year so that you can create 4,500 jobs without having to spend a cent.

Hon Mr Baird: Louder, louder.

Mr Peters: Sorry, that's just my tone of voice, Minister. I don't apologize for that.

You don't have to invest any money in jobs. Here we could create 4,500 jobs and bring $16 million into the local economies, $16 million for students who want to attend post-secondary education who have seen their tuition rates rise to unprecedented levels, thanks to your government and your lack of interest in the financial ability of students and their families to pay for post-secondary education.

There are 4,500 jobs right there. You don't have to invest any money. Does the Minister of Education do anything about that to accommodate those school boards? No. She lays down the law again. You've got a Toronto-centred approach that doesn't understand the real needs of rural Ontario.

I want to talk about the biggest farce in this budget, and that's the $40 million they talk about for the Ontario whole farm relief program. I want the members to listen to what's contained in what I'm about to say, because I think there are some really serious issues here that need to be addressed. In my mind, the auditor's going to have take a serious look at this program, and I believe the federal government's going to have to take a serious look at this program.

I want to start with a gentleman by the name of Stephen Thompson. Stephen Thompson is an accounting professional. He's got a master of business administration from the Ivey school of business at Western and is a former professor of farm management in accounting at the University of Guelph. I'm going to quote from his letter, dated May 9: "Many farmers were elated when Canada announced on February 25, 2000, that the AIDA inventory valuation rules were being changed. Producers could now determine opening and closing inventory values for each commodity using either a two-price system or the end-of-year pricing system, whichever resulted in a greater entitlement. This long overdue change by Canada would quite properly enable Canadian farmers to receive millions of extra dollars in completely justified farm aid benefits.

"But Ontario is not going to participate."

Mr Thompson wrote Mr Vanclief thanking him for this enhancement, but in his opinion it was a wasted letter. The Ontario whole farm relief "web site makes it quite clear that Ontario is not going to use the revised inventory valuation methods announced by the federal government, for either the federal or provincial programs of the 1999 OWFRP program ... . Canada is willing to give Ontario farmers literally millions of dollars in extra benefits, but OMAFRA won't participate. Minister Hardeman continually cries wolf about Ontario not getting its `fair share.' Yet it is Mr Hardeman who is single-handedly denying Ontario farmers the chance to received millions of additional dollars in federal aid."

Mr. Vanclief has promised Ontario farmers that we "will get this federal money even if he has to do it himself," and he may well have to.

If you looked at the OMAFRA web site on May 3, the day before the budget, there was a question and answer:

"Do I have a choice with how I value inventory? (eg the two methods used by AIDA)?

"No. Inventory changes will be valued using the commodity prices provided on the fair market value list by OWFRP for both the federal and provincial portions of the payment. The revised inventory valuation methods announced by the federal government are not being implemented."

You know what? This means that literally millions of federal dollars offered to Ontario farmers are not going to be used by the Ontario Ministry of Agriculture and Food because OMAFRA refuses to allow access to them. Look back at the quotes that came out of the Ministry of Agriculture back in December. He wants to reiterate that his "government has consistently stated that the time has come for the federal government to give Ontario farmers their fair share." He states that Ontario is on record and will continue to fund on the 40-60 split they're committed to funding to the farmers of Ontario. Do you know what? The minister and this government have done nothing but whine about Ontario getting its fair share of the safety net dollars from the federal government.

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This is the minister's statement in December, that the Harris government is prepared to put up their fair share of the funding: "If the federal Liberals do not give Onta-rio farmers their fair share ... our province may have no choice but to ... negotiate a made-in-Ontario safety net program." The federal government has put up its fair share. This government is not putting up its fair share to the farmers of this province.

Mr Mazzilli: How about health care, Steve?

Mr Peters: I'm talking about agriculture. There are so many other issues, but I'm talking about an issue that this government seems to have total disregard for, and that's agriculture. I am going to come back to this rural task force that toured around the province. You don't like to hear things that you're doing wrong. I think it's important to point out the areas where this government is not living up to the expectations and the needs of the people of Ontario, and one area is they are letting down the farmers of this province.

The minister spoke in April of this year, "It means that everyone will get a fair share of the money available. Regardless of where you farm in Canada, you will get the same benefits from the federal program." This is a bunch of baloney. This is not true for Ontario. Perhaps Mr Hardeman got more out of the federal government than he bargained for, and now he can't afford to put the money where his mouth is.

I want to talk too about some of these other initiatives that are supposed to be there for rural Ontario. The government is great on making announcements, but they are so short about the details. They talked about investing in economic development for rural and small towns. There is nothing there, no indication of when we're going to see the details of these programs.

Health: The government loves to tout their health care budget and what the government perceives to be reinvestments in health care in this province. Do you know what's very interesting? It's something the member for London-Fanshawe should be listening to, and I'm concerned about it, because he has a psychiatric hospital in his riding and I have a psychiatric hospital in my riding-two hospitals that are scheduled by this government to close. Do you know what? There is not a single mention in this health budget about mental health, not a single thing about mental health. How are you going to reinvest? The honourable members travelled around, but there's no talk about mental health, about the much-needed community supports that need to be in place before you close a single hospital bed. There is nothing in here about that. We've got two hospitals scheduled to close in our respective ridings, but those community supports aren't in place before those hospitals are going to close.

We had a program in my own riding, a community kitchen, which was a textbook definition of community support. The government wanted to close it down. If it wasn't for the intervention of the clients coming to my office, that program would have disappeared. Another program, the ACES program that is part of the community support: In February, the government announced that it was going to close.

I want to talk about another initiative that has come out of this budget, and that is this whole issue of Telehealth. The Telehealth program was an initiative that took place in northern Ontario, and by all accounts, it's working relatively well. It has its problems, but it's something that is being done to try and help with some of the serious problems that exist within the health care sector. Now the program is going to be expanded. Do you know where they're expanding the program? They are expanding it in the greater Toronto area, an area that has such an oversupply of doctors, no shortage of doctors. Where you should be investing in this Telehealth is in rural Ontario. Rural Ontario has a severe shortage-the member for Simcoe North talked about the doctor shortages in his own riding.

Telehealth is something that could offer some assistance as we try and get over this hump, because the initiatives you're taking to try and attract new doctors and create new medical spaces are long-term initiatives. There is nothing in the short term. Telehealth was something that could have been of some great assistance to rural Ontario.

Let's look at some numbers, because I think if you're going to review the budget, it's best that you look at some of the numbers. You know, one area where there could have been some real, positive things done for this province is in gasoline tax: 14.7 cents out of every litre that you pump into your car today goes to the provincial government in gasoline tax. We're the second-highest province in all of Canada when it comes to gasoline tax, and the government is projecting in this budget that they're going to take more money from our pockets through gasoline tax. If you wanted to do something useful, why didn't you look at the whole area of gasoline tax? But you didn't.

I want to talk about a few other areas. The government, of course, is only going to tout the positives that are contained in this budget, but I think the citizens of Ontario need to be made aware of some of the serious issues that are in here: the cuts to environment, the cuts to natural resources. Substantial cuts. Do you know, we spend more on jails in this province than the combined budgets of natural resources and environment? There's no commitment by this government to the natural resources of this province; there's no commitment to environment in this province-commitments that could have taken the form of investments in public transportation. Let's hear real guarantees that before these coal-fired plants are sold by Ontario Hydro, they're going to be converted to natural gas. There's no investments in there.

Ministry of Municipal Affairs and Housing: down. Natural Resources: down. Training, Colleges and Universities, if you look at the budget from 1995 to 2001: down. Transportation: down. Here's a great one, and I'm hoping that somebody can give me an interpretation of what this is-

Mr Mazzilli: Transfer payments from the federal government: down.

Mr Peters: I wish the member would just keep his mouth shut and listen, because maybe he would learn something.

Executive offices: I'd like to know what "executive offices" is. Perhaps somebody can explain in their two minutes how whatever executive offices is has gone from $13 million in 1996-97 to $22 million in 2000-01. What is that all about?

Capital expenditures: Capital expenditures in this province have decreased by $2.5 billion. Instead of giving $8 billion in tax cuts across this province, why don't we start renewing our investment in the infrastructure of this province, an infrastructure that's crumbling all around us? That is not being done.

They talk about the initiative of lower corporate taxes, but changes to the corporate tax rate aren't the only thing that is going to help attract new business and industry to this province. You need to invest in our infrastructure. You're not doing that. They're not investing in our roads. They're not investing in our sewers. Look at the Ministry of Economic Development and Trade, the ministry that's responsible for bringing new investment into this province. Do you know how much their budget has been cut since this government took office? A hundred million dollars. How are you going to attract? You need to be out there selling this province.

Speaker, I could go on and on about this budget, because there are so many things in it. You're going to hear the things that the government thinks are right. I think it's incumbent on us to tell you what's wrong with this budget. I think it's a real shame and the citizens of Ontario are not going to be feeling the real effects.

The Acting Speaker: Comments and questions?

Mr Mazzilli: It's a pleasure to be back in the House. I just want to remind the member for Elgin-Middlesex-London that what we are debating here is the Taxpayer Dividend Act. Not once in his 20 minutes did he mention that this money belongs back to taxpayers in Ontario. This is the $1 billion that was set aside by the finance minister. It doesn't belong to the finance minister. It doesn't belong to the province. It belongs to the taxpayers of Ontario. Not once did he mention that. You know, at some point he can go back to his riding and speak to the workers at the Talbotville Ford plant. When they go to work, they work hard for their money. When the government collects their money and does not return it to them-and some of them work shift work. Perhaps he could canvass the Ford plant and some of the other auto manufacturing plants in his riding to see how they think that $1 billion should be spent: by a Liberal government or returned to the taxpayers of Ontario?

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He also neglected to mention health care spending over the last number of years. It's an important issue in my riding as it is in his. When you look at 1995, Ontario spent $17.4 billion on health care. Today it's going to be up to $22.7 billion, and that's no thanks to the federal Liberal government, which has continued to cut transfers to this province and today only funds 11%-

Hon Mr Baird: Ten now.

Mr Mazzilli: -10% of the overall funding.

The Liberals want to talk about priorities. Where are their priorities? I know that our priorities on this side of the House are on health care and a responsibility to the taxpayers in Ontario.

The Acting Speaker: Further comments and questions?

Mr Duncan: I am pleased to respond to my colleague from Elgin-Middlesex-London with respect to his comments on the budget and, first of all, to reinforce what he said in his very first statement, that we will vote against this bill. We are opposed to this so-called dividend, which I would call the most glorified advertising campaign in the history of any government, save and except Jesse Ventura in Minnesota.

My colleague from Elgin-Middlesex-London was quite proper to state the shortcomings of the budget. He was right to point out the fact that the government has its priorities wrong. You could have spent more money on health care; you chose not to. You want to blame the federal government. But as my colleague from St Catharines said earlier this evening, you want more money from the federal government not so you can improve health care but so you can give more selective tax cuts to your special friends. You've failed in the environment. You've failed in colleges and universities. You've failed in public transportation. You've failed in public housing. Let me say that those failures will come back to haunt the government.

The member opposite who responded to my colleague seemed a bit confused about priorities. But I'm not surprised, because I heard Tom Long say the economy is not doing so well. I heard Tom Long say that, and I'm sure my colleague said that. I know most of them are supporting Tom Long for the leadership of the Canadian Alliance/Reform. Lord knows what's going to happen to Progressive Conservatives in this province in their ridings individually, who feel very betrayed by these people. Your confusion is natural when you hear Tom Long complain about what hasn't been done for the economy of this country.

I say it's unfortunate there aren't more members like the member for Elgin-Middlesex-London, who quite properly pointed out the shortcomings of your government, particularly in the area of agriculture, an industry that I know is important to his riding. He is to be commended for his outstanding observations.

Mr Young: I listened with interest to the member opposite this evening. I would say, with the greatest respect to this chamber, that it's most unfortunate for the member opposite that in the past his party has committed many of their unrealized promises to writing. But for that, what he said might make some sense. Unfortunately, from the Liberals' point of view, they did in fact commit to writing many promises over the last number of elections and I, being a bit of a packrat, have kept those documents in which they wrote down their promises to the people of Ontario. It then of course came as a great surprise to me to hear the member opposite-

Interjection.

Mr Young: That's the Liberal red book.

Interjection.

Mr Young: No, indeed it is. It is the Liberal red book. This is the platform the Liberal Party of this province ran on. This is the written platform they presented to the people of this province when they said, "Please elect us." The people rejected that notion, thank goodness. But they came forward and said, "Please elect us, and we will do this."

What is "this?" Here is what they suggested they would do. Here's what they committed to do if they were elected. They said they would reduce the corporate tax rate for small businesses and reduce the number of small businesses required to file corporate minimum tax.

I invite the members opposite to look at the documents they prepared and look at the budget that was tabled by the Deputy Premier of this province last week, and they will find that we are now proceeding with those very promises. If they want to be sincere, if they want to be credible to the people of Ontario come the next election, they will vote for this budget, which makes a great deal of sense, which returns money to the taxpayers of this province, which pays down the debt and which continues to stimulate this economy.

The Acting Speaker: Further comments and questions?

Mr Bradley: Every time I hear government members on the other side speak, I hear Brian Mulroney's voice, because this is the Mulroney crowd. I notice that Tom Long is now trying to separate himself from Brian Mulroney, but half the people over there worked for Mulroney in one way or another. Now they're denying him thrice, or whatever it is after three-quadruply.

First of all, on promises-and our member for Elgin-Middlesex-London didn't get a chance to say this-I look at the fact that they said, "We keep our promises." I remember during the 1995 election campaign, in May during the leaders' debate, Robert Fisher of Global TV asked Premier Harris-he was then Conservative Leader Harris-"Is it your plan to close hospitals?" Mike Harris said, "Certainly, Robert, I can guarantee you it is not my plan to close hospitals." Forty-five hospitals have been closed or forced to merge in the province-one of the two. Forty-five closed or forced to merge-radically changed. That is a promise the Premier of this province made.

Second, I notice today that the price of gas is up over 70 cents a litre in Toronto. The only reason I say that is that Mike Harris is rough and tough when it comes to the lower echelons in terms of power in our society, but when it comes to the oil barons, the captains of the oil industry, he's like a pussycat. He just backs off when they bark at him.

The last thing I can say is that one place where this government will invest a lot of money, where it will do a lot of spending, is in political advertising, using the hard-earned tax dollars of people in this province to put out clearly partisan, blatant propaganda.

The Acting Speaker: Response, the member for Elgin-Middlesex-London.

Mr Peters: I extend my apologies to the member for Nepean-Carleton for the tone of my voice. But if there wasn't so much heckling on the other side of the room, I wouldn't have to speak as loudly. I extend my apologies.

The member for London-Fanshawe makes reference to the Ford plant. He also makes reference to blaming the feds, which he's really good at. The Ford plant, though, depends on just-in-time delivery. Investments in the 401 infrastructure are going to benefit industries like the Ford plant.

The member for Windsor-St Clair had it right: The government's priorities are all wrong.

To the member for Willowdale: I didn't campaign on the red book. That wasn't my campaign tool. The member for Willowdale also made references to promises made, promises kept. I can tell you of a promise that was made and not kept. That's the promise that was made in writing by Premier Harris on May 24, 1995, that he would pass a strong and effective Ontarians with Disabilities Act within the first term in the Legislature-a promise made, a promise not kept.

The member for St Catharines talked about promises made, and very clearly pointed out some promises that were made and, again, not kept. I think the member for St Catharines touched on another very important area, and that's this whole question of government advertising. The taxpayers are sick and tired of seeing their tax dollars wasted on advertising programs. In this I'm going to cast blame on both levels of government: on this provincial government for the dollars they have wasted in this whole health care fight, which could have been better invested in the health care system, and on my distant-relative friends in Ottawa for their spending of those dollars too. That's not the way to do it.

I appreciate the opportunity to have those words, and I thank the members for their comments.

The Acting Speaker: It being 9:30 of the clock, this House stands adjourned until 10 of the clock tomorrow morning.

The House adjourned at 2129.