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September 23, 1982

32nd Parliament, 2nd Session

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Hansard Transcripts

Hansard Transcripts

HANSARD

CHAIRMAN'S RULING

WELFARE PAYMENTS

ORAL QUESTIONS

WAGE AND PRICE RESTRAINT PROGRAM

MUNICIPAL TRANSFER PAYMENTS

VISITOR

OHIP PREMIUMS

WAGE AND PRICE RESTRAINT PROGRAM

ONTARIO MUNICIPAL BOARD APPOINTMENT

WORKMEN'S COMPENSATION

JOB CREATION

ASSISTANCE TO FARMERS

MOTIONS

BUSINESS OF THE HOUSE

COMMITTEE SITTINGS

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

INTRODUCTION OF BILLS

PROTECTION OF RESIDENTIAL TENANTS ACT

NOTICE OF DISSATISFACTION

ORDERS OF THE DAY

INFLATION RESTRAINT ACT

The House met at 2 p.m.

Prayers.

HANSARD

Mr. Riddell: Mr. Speaker, on a point of privilege: As I was glancing through the September 13 edition of Background, a government publication which I am sure you read, I came across an

article entitled "Hansard Report Must Make Sense of MPP Speeches."

Peter Brannan, chief of Hansard and editor of debates for the Legislature, a person who comes under your jurisdiction, was commenting on the operations of Hansard. He said:

"Whether given to eloquence or just inane interjections, Ontario politicians simply have to open their mouths to achieve a slice of immortality. Every unctuous uttering, pious pronouncement and wicked witticism expressed in the Legislature or a standing committee becomes a permanent part of the Hansard record of parliamentary debates."

He went on, "But sometimes the grammar has to be cleaned up, metaphors unmixed and infinitives rejoined before the debates are put to print."

He explained a little more about the operations of Hansard and then he said -- and this is the thing that offends me and the people I represent, Mr. Speaker -- that most members are "fairly lucid these days... The majority are all well educated. They're businessmen, lawyers, teachers and accountants. We haven't got too many farmers left."

Mr. Speaker, I think it is incumbent upon you to inform Peter Brannan that the farmers are not the uneducated, the illiterate, the inarticulate sector of society he believes them to be. I also think you should inform him that there are quite a number of farmers in this august assembly and that we hope there will continue to be a great number of farmers in this assembly. I tell you, Mr. Speaker, from the standpoint of business, when the farmers made up a larger majority of this assembly than they do now, the province did not run a deficit of $15 billion.

Mr. Speaker: Thank you very much. Contrary to your assumption, I have not seen that particular

article and I am not familiar with whatever it is. However, I will be pleased to speak to Mr. Brannan. I would suggest that his remark perhaps was not made the way you have chosen to interpret it. However, I will be very pleased to do that.

Mr. Peterson: On a point of privilege, Mr. Speaker: I think the point that my colleague makes is a serious one --

Mr. Speaker: Yes it is.

Mr. Peterson: -- and I think you should investigate it and report back to this House. If I may --

Mr. Speaker: Order. If I may, the point of privilege has been raised.

Mr. Peterson: On the point of privilege: There is another aspect here if you will hear me out.

Mr. Speaker: All right. I will listen to the --

Mr. Peterson: If you will be seated, I will be happy to proceed. You do not understand that Mr. Brannan said in his remarks that businessmen presumably are reasonably articulate in this House. But I refer you to Hansard of September 21, 1982, page 3614, quoting the Treasurer (Mr. F. S. Miller). Referring at that point to the new federal Minister of Finance, the Treasurer says: "He has been my counterpart for three years in hell. I think I understand him." Perhaps there is a misprint, Mr. Speaker, and on the other hand it may very well be totally accurate. You may want to check into that.

Mr. Speaker: Thank you very much. As I said before, I will speak to the people involved and draw it to their attention.

CHAIRMAN'S RULING

Mr. Laughren: Mr. Speaker, I have what I think is a point of order, but you may wish to regard it as a point of privilege.

Yesterday in the standing committee on resources development, which has been holding hearings on the Weiler report on workers' compensation as well as on the Ontario government's white paper and a proposed legislative change, I believe the committee chairman, the member for Nipissing (Mr. Harris), ruled that a motion to make an interim report to the Legislature was out of order. I do not believe there is any standing order on which he based his ruling.

I ask your guidance as to what committee members can do when the committees are dominated by members of the government party, who can simply rule a motion out of order rather than debate the motion itself and the substance of the motion. If they defeat that motion, based on their own views, that is one matter. But I ask whether you agree with me that ruling it out of order is not the proper way to dispose of a legitimate motion in committee.

Mr. Speaker: Quite clearly, it is the prerogative and the responsibility of the chairman of any committee to rule as he or she may see fit, and the committee is bound by that ruling.

2:10 p.m.

Mr. Martel: On the point of order, Mr. Speaker: I understand what you are saying, but I do not believe you can simply use a majority to bring in a ruling that is contrary to the standing rules and use your majority to support it. Surely the chairman has to make a ruling on a motion on the basis of what the standing orders are and not on what is in his mind or what he would like them to be.

A committee is an extension of the House. If you want to debate the motion and defeat it, that is fine; those are the realities of March 19, as I have heard people over on the government side of the House say. But simply to make a ruling that is arbitrary and comes from nowhere and to use the majority to enforce it is wrong, and I ask that you advise chairmen that they cannot make rulings that are totally contrary to the rules.

That is what is at stake, not the realities of March 19 or the fact that they have a majority. Let the issue be debated and if they want to defeat it, that is fine; that is the way the place runs. But you do not make arbitrary rulings that are contrary to the rules and then use the majority to substantiate or support the chairman.

Hon. Mr. Wells: Mr. Speaker, on this point of order or point of privilege: I think all members of this House will agree that it is the prerogative or the duty of the chairman to so rule on motions put before him in a committee.

Mr. Martel: If they are out of order, yes.

Hon. Mr. Wells: I submit to the member for Sudbury East that one of the things a chairman has to do is to decide whether a motion is in order or out of order. There are times in any proceedings or in any body, in this House or in its committees, when a motion is obviously not in order.

My understanding is that a motion was made in the midst of the committee process where they were having hearings on the Weiler report and so forth. The committee was listening to briefs and studying them, and out of the blue a motion was made to suggest that some action should be taken by this government. There is probably a proper time in that committee for that motion to be made, but I submit that the chairman was in order in deciding whether the motion was in order or not in order. It is also the prerogative of the members of the committee to challenge his ruling, and they did so.

Mr. McClellan: Which standing order are you referring to?

Hon. Mr. Wells: This is not covered by standing orders; it is covered by the general proceedings of any chairman. Anybody who has read anything about parliamentary procedure knows there is a time for a motion to be in order and a time for it not to be in order. You cannot just stand up in the middle of any proceedings and make motions.

No one is disputing that at some time in that committee, after the members have listened to all the briefs and have made their study, it may he that as part of the recommendations they will want to make the kind of motion that was put forward. But I submit that yesterday was not the time and that the chairman was acting properly.

Mr. Speaker: Order. This is developing into a debate, and I have taken the member's point of order into consideration. I advise all honourable members that any ruling of a chairman of any committee can be challenged by the committee; and I would add, if I may, that unless there is a report before the House there is really nothing I can do.

Mr. Laughren: Mr. Speaker, it was an interim report that we were recommending.

Second, standing order 1(

b) states: "In all contingencies not provided for in the standing orders the question shall be decided by the Speaker or chairman, and in making his ruling the Speaker or chairman shall base his decision on the usages and precedents of the Legislature and parliamentary tradition."

I ask whether you will see if you can find the precedents and usages of the Legislature and Parliament on which the chairman could possibly have based his ruling. That would be most helpful.

Mr. Speaker: I was not at the hearing; I have no idea what went on. But I can tell you that the chairmen of the committees do have the responsibility of making rulings.

Mr. Martel: It is in the rules; they do not make up the rules.

Mr. Speaker: With all respect, there are a lot of things that are not covered by the rules.

Mr. Martel: But surely you don't rewrite the rules at the whim of the chair, Mr. Speaker.

Mr. Speaker: Order. I am not suggesting that. I am telling you quite clearly, and this will be the end of it, that if you are not satisfied with the rulings by any chairman, that ruling can be challenged.

Mr. Renwick: That is not satisfactory.

Mr. Speaker: Order. We are not going to debate it.

Mr. Martel: Well, Mr. Speaker -- Mr. Speaker: No, with all respect --

Mr. Martel: Well, you had better tell your

chairmen.

Mr. Speaker: Order. Please resume your seat.

WELFARE PAYMENTS

Mr. R. F. Johnston: Mr. Speaker, on a point of privilege: I would like to correct the record if I might. On Tuesday, the Minister of Community and Social Services (Mr. Drea) said, amongst other things, that I was "a man who travels around with his cold pack so he can carry his stew when the cold pack is far more than any poor person in the province could afford."

He has given the impression that it is a very expensive cold pack. This is the offending article, which sells in Canadian Tire stores for $2.09 plus the regressive sales tax. He is therefore not trying to indicate that this is a very expensive thing but, rather, is admitting that the people who are on welfare in this province should not have $2.09 for capital expenditures of this nature.

Mr. Speaker: Order. Interesting as that may be, it is not a point of privilege.

ORAL QUESTIONS

WAGE AND PRICE RESTRAINT PROGRAM

Mr. Peterson: Mr. Speaker, I have a question for the Treasurer who indicated in the press, and I assume he was properly quoted, that there were going to be some savings as a result of his wage restraint package.

The Treasurer indicated, as I understand it, that there would be a $120-million saving for every percentage point in public sector salaries, that there would be savings of $50 million to $80 million for the municipalities as a result and that the total savings would be something in the order of $840 million over a period of time.

His director of fiscal planning policy of Treasury stated to our researcher that the amount that would be saved as a result of his restraint program was in the order of $420 million.

My question is this: how much will be saved over original budget projections, and what is he going to do with that money?

Hon. F. S. Miller: Mr. Speaker, one has to assume before making a calculation what one would expect the average increase of salaries --

Mr. Peterson: Well you may have; they are your calculations, not mine.

Hon. F. S. Miller: I am answering the question -- what the average rate of increase might have been in an unconstrained year. If averages had been between 10 per cent and 13 or 14 per cent for contracts, then one could easily assume that it would be 12 per cent. The guideline is five per cent. If the saving for every percentage point is $120 million and there is a seven per cent potential saving, seven times 12 is $840 million.

Mr. Peterson: The Treasurer did not answer the (

b) part of my first question. What is he going to do with the money?

Hon. F. S. Miller: The Leader of the Opposition reminds me daily that I have a deficit. I would reduce it.

Mr. Peterson: Why is it that the Premier (Mr. Davis) takes a different view of some of these situations? In one of his utterances the other day he said that "constraints cannot be used to deny our domestic responsibility to make our best efforts to provide for immediate economic recovery and to create the framework for economic growth..

He also said: "It is Ontario's view that sustaining and creating employment should continue to be this nation's highest priority."

Why is the Treasurer not using some of those moneys to create jobs here and now in Ontario, or is his strategy only to blame the federal government?

Hon. F. S. Miller: The leader is dealing with the hypothetical. Of course we are prepared to be doing more. We said it required at least some federal and provincial co-operation on a national economic recovery program. Of course we already have done some.

All I can say is, no matter what efforts we take with job stimulation, there will have been less money spent on the other side.

2:20 p.m.

Mr. Cooke: Mr. Speaker, why did the Treasurer not reveal to the Legislature, as part of his presentation on Tuesday, an up-to-date projection of what the deficit will be for this government at the end of the fiscal year, what he projects the expenditures will be for this government in this fiscal year and what he projects for employment creation, having stated in his May budget that there would be 125,000 jobs by the end of this year?

Why were those very important aspects of the budget for this province not presented to the Legislature? Further, why in the lockup did his officials tell us they could not project what effect his program would have on inflation in this province and they could not give us any kind of figure of what effect it would have on his deficit? What kind of economic recovery program is that?

Hon. F. S. Miller: Mr. Speaker, the honourable critic implies that up-to-date knowledge is not made available on the state of the provincial budget as the year rolls by. I point out to him that Ontario pioneered quarterly reports. There is a June 30 report and there will soon be a September 30 report. We are one of the few provinces that have a habit of showing what happens to our economic plan as the year goes by, and we intend to keep on doing that.

Obviously we have had indications that the income side has not been maintaining our projection. There are also pressures on the spending side; for example, the sudden frost that caused millions of dollars of damage to the tobacco crop, and an estimated $75 million of crop insurance; increases in demand for general welfare assistance at the municipal level where we share in those costs, and pressures within the health system. Those are part and parcel of every year.

As the papers have pointed out this week, and I hope the member has read them, we have done an extraordinarily fine job in Ontario of fiscal management. We are going to keep on doing that. We have an economic recovery program that is doing more than most.

For example, we are well past the 5,000 mark on the applications for the new home owners' grant. Between 45,000 and 50,000 people sent in for applications and between 5,100 and 5,200 returned them. We are seeing a takeoff in sales. There are three man-years of jobs in every house built and bought in this province; they spread right back into all the ridings of the province.

I can also assure members that the programs we have for highway construction and municipal works have been subscribed. In fact, we checked just the other day to see whether the jobs had been created as predicted, an they have been.

Mr. Peterson: Has it ever occurred to the Treasurer that the amount of money he presumably will be saving in this program, in the range of $840 million, or whatever the calculation he uses, is roughly equivalent to the price the government paid for an oil company plus what it contributed afterwards to an exploration company that will bring no jobs or no exploration in Ontario?

If he adds those capital expenditures plus the interest accumulated thereon since the date of the purchase, it is very close to the kind of figures he is talking about in terms of savings. Therefore, one could argue quite forcefully that he is asking the public servants to pay through a restraint program for an oil company that is netting nothing here in Ontario.

The Treasurer has called this an emergency situation, he has called this an emergency session, he has said jobs are a top priority in this province; so why has he not got one program that creates one job for our discussion here in this Legislature?

Hon. F. S. Miller: I pointed out that I put about $500 million back into the economy over and above the normal budget this year just for that purpose.

Let me suggest that the member go out and ask the small businessmen of this province who are getting back the $250 million of tax we are not collecting. Those people not only are being helped to survive but also are keeping people at work. The few who are still able or willing to invest in new expansion are doing so. That is catching on.

The member should ask the man in the street whether he likes or dislikes our program. He will find out that we are heavily supported by the average citizen in this province.

Mr. Peterson: These same small businessmen you talk about used to be big businessmen. That is the tragedy.

MUNICIPAL TRANSFER PAYMENTS

Mr. Peterson: Mr. Speaker, I have a question for the Minister of Municipal Affairs and Housing. The minister is aware that the municipalities are suffering some difficulties now as a result of the last budget, with the new changes in the Ontario health insurance plan regulations and fees, and changes in the Retail Sales Tax Act. These are an added burden because a lot of budgets were already set. He is also aware, of course, of the swelling municipal welfare rolls, which are putting more pressure on municipalities.

I ask the minister what his program will be in terms of transfers to the municipalities and whether he can assure this House and the municipalities that they will not be limited to five per cent, as has been suggested.

Hon. Mr. Bennett: Mr. Speaker, I had the opportunity back in the last part of August to speak with the Association of Municipalities of Ontario.

Mr. Bradley: Were you well received'?

Hon. Mr. Bennett: Yes, very well received. I have to tell the member, I was better received than he might imagine from his point of view.

At that time, I said to AMO very clearly and distinctly that over the years this government has made sure that municipalities have been supported and defended in their financial requirements to run the system. I said it would be wrong for me at a time of constraint in the province, with the reduced revenues the Treasurer has spoken about this afternoon and on previous occasions, to lead municipalities to believe that we were going to be able to continue to increase grants -- I am talking of actual dollars -- by percentages equal to what we have been able to do in the past years.

I said very clearly that I wanted to give them advance notice for preparation of their budgets -- and they have asked for this kind of information -- that I anticipated there would be little or no increase in the grants from the province. I indicated clearly that the number of dollars given to them a year ago would continue to flow to them but that if there were any increase, it would be very marginal.

Mr. Peterson: Is the minister aware that AMO calculates, as a result of the last budget, that the minister has effectively reduced municipal transfers by some 30 per cent after mill rates have been struck and that, in fact, there is a diminution? Is the minister also aware that if he does not increase the transfers by five per cent or more, he is going to see a major cut in services at the municipal level or increased property taxes? Is that the minister's strategy? Does he want to see increased property taxes way beyond the five per cent limit he is trying to impose across this province?

Hon. Mr. Bennett: I am very intrigued by the figures the Leader of the Opposition has thrown out this afternoon about a 30 per cent reduction as a result of the actions of my friend and colleague the Treasurer (Mr. F. S. Miller) in the last budget. I realize what the sales tax means to most municipalities, and it is a long way from an impact of 30 per cent reduction in the grant position of municipalities in this province. The leader of the second party might like to go back and review the situation.

I understand there have been some increases in costs, and the Premier and I are going to meet with AMO this afternoon at four o'clock to review with them the bill that was presented to this House on Tuesday.

I am sure some of the areas that the Leader of the Opposition has covered in his question this afternoon and that have been covered on numerous occasions since the budget back in May will come up again for review. But I have said very clearly to the municipalities: "Here is the situation we find ourselves in."

I am sure there is not a member sitting in this House who will not have some appreciation for the fact that municipalities have certain programs they can very well eliminate without reducing the important safety and protection services to the people of their community. Those they are obligated to deliver under the Municipal Act they will continue to perform, I believe, to the maximum of their ability. But some of the other things, they can very well eliminate in a constraint period.

I am inviting municipalities to look over their budgets, as this government and the federal government must do in a constraint period. When the economy is not as buoyant as it was, then I think one has to try to tailor one's budget accordingly to the amount of money coming from municipal taxes, transfer payments and the provincial government.

Let me add only one other thing for the benefit of the leader of the second party. I suggest very strongly that municipalities are going to look carefully at where they are going in the coming year in relation to property taxes. I want to make it very clear to this House that a great number of municipalities have had some improvement in their assessment position through new construction and new opportunities. Those will allow the municipalities to offset, at least to some degree, the inflationary factors they are encountering.

2:30 p.m.

Mr. Breaugh: Mr. Speaker, I wonder if the minister would give us his assurance this afternoon that he will be prepared, at the very least, to honour commitments that have been made in rather vague ways previously that the increased costs to municipalities and school boards that were incurred by the Treasurer's latest budget, such as sales tax, OHIP premiums and a few licence fees, usually amounting to between one to two per cent of their total budget, will not have to be absorbed by the municipalities, and that his next round of grants will take those into account so those costs will not be an added burden to the property tax base?

The Treasurer said in committee that he would be prepared to consider this, and I know that on other occasions the minister has talked about it. Would he give us the simple commitment this afternoon that he will absorb that cost, at least?

Hon. Mr. Bennett: Mr. Speaker, I give the assurance to this House that this government will continue to treat its municipalities in a very fair and honourable way in respect of what their costs of operation happen to be. It will be taken into consideration at the time of computing the grants to the municipalities.

Mr. Epp: Mr. Speaker, the cost of the 1982 Ontario budget provisions to the borough of York, which has a population of about 131,000, is over $500,000. Despite the fact that York borough has the highest mill rate in Metro, and despite the fact that council is now trying to decide which cuts are going to have to be made, would the minister indicate to this House exactly what kind of assistance he is providing to the borough of York? Second, if some cost-cutting has to be done, which services would he suggest to the borough should be cut out?

Hon. Mr. Bennett: Mr. Speaker, the borough of York, like the city of Ottawa, Metropolitan Toronto and other jurisdictions in this province, will be dealt with on a fair and even basis. I do not intend to take York or any other municipality and try to set a formula or a policy just for it. We have established a policy across this province for resource equalization, the general per capita grant and so on for municipalities, and we are not going to start to alter it for each municipality.

As to the last question asked, I might say to the member very clearly, and I am making it very distinct here as I did to the Association of Municipalities of Ontario: I do not intend, as the minister reporting for municipal affairs, to start to set the priorities for each municipality. That is what officials are elected to do in their particular boroughs or municipalities, and I trust they will honour, respect and understand the capacity of their municipalities to afford certain programs. They will set the priorities. I trust they will be right in respect of today's constraint period in the economics of Ontario and Canada.

VISITOR

Mr. Speaker: Before proceeding with question period I would ask the indulgence of the House, if I may, to introduce an honoured visitor in the members' east gallery. We are pleased to have today, honoured indeed, His Excellency T. J. Arcand, newly appointed Canadian ambassador to Hungary, who was very recently Canadian ambassador to Lebanon, Syria and Jordan, where he provided exemplary service on behalf of Canada and Canadians during the recent conflict in southern Lebanon. I would ask members of this House to join with me in welcoming Mr. Arcand.

The member for Port Arthur.

Mr. Foulds: Mr. Speaker, I might just say there is courage and there is courage, and the ambassador certainly has displayed that in the last few months.

OHIP PREMIUMS

Mr. Foulds: I have a question of the Treasurer. Can he confirm that, in spite of the so-called "price restraint" side of the government program, which was announced the day before yesterday, and in spite of his announcement that government fees would be restricted to an increase of five per cent, OHIP fees will increase by 17 per cent on October 1? How does he explain this inconsistency?

Hon. F. S. Miller: Mr. Speaker, that was a change that was made on May 13.

Mr. R. F. Johnston: What about the contracts that were signed'?

Mr. Speaker: Order.

Mr. Foulds: Would the Treasurer not admit that his answer is inadequate, if not hypocritical, when he is rolling back wage increases, when he is engaging in an application of "restraint" on fees that this government receives that only amount to one third of the revenue of the total fees that it gets?

Will the Treasurer not admit that restraint by this government on fee increases is laughable when the OHIP fees total two thirds of the total fees received by this government as opposed to the one third of the fees in vehicle registrations, Liquor Licence Board of Ontario fees and other fees and licences that he is restraining? In other words, he is restraining something like $692 million as opposed to not restraining revenues of $1,402 million.

Hon. F. S. Miller: My friend is too wise to play that game. He knows that the change was made in the budget, that it takes some three --

Mr. Foulds: It comes into effect on October 31.

Hon. F. S. Miller: Just sit still and be quiet.

Interjections.

Hon. F. S. Miller: Never mind. I have Stuart Smith's picture all over the bottom floor of my building today telling us what a great guy he is and what he is doing in his new job.

Mr. Speaker, you know that the OHIP system works about three to four months in advance. People prepay their fees. The prepayments were made at that date. The change was on May 13. That is the date it took effect and it covered last year's changes. We honoured all contracts in effect on May 1.

Mr. T. P. Reid: Mr. Speaker, would the Treasurer not agree that part of the reason for the hefty increase in OHIP premiums is in fact the rather -- certainly now in view of the events -- generous offer or settlement with the doctors? Will he concede that?

Also, if there is any rollback or giveback by the doctors, will he consider doing something about the OHIP fees? And can he assure us that in October 1983, during his transition period, OHIP fees will not go up over five per cent in the year after this contract or this budget-setting time is over?

Hon. F. S. Miller: Mr. Speaker, the answer to the first

part is no, it does not relate to any future contract changes; it related to the historical, past-year change. I am sure my colleague knows that OHIP fees raise roughly one fifth of the cost of the OHIP plan and that roughly one half of the cost of the OHIP plan is in fact just for hospitals. Something in the range of $3.3 billion to $3.5 billion is for hospitals. Something in the range of $1.5 billion is for doctors. Those figures are rounded out. They are not necessarily accurate in the second point.

I would simply point out to him that obviously future increases in fees or rates, be they for workers in hospitals or for physicians, are not reflected in the historic rate. I would also like to point out that my colleague in the other party has wanted us to charge more, at least, through a payroll tax.

Mr. McClellan: Mr. Speaker, the Treasurer has left me confused with his answer to the effect that OHIP premiums will not be rolled back, and on Tuesday he told us the OHIP fee

schedule negotiated settlement is not covered under the wage control package.

My question to the Treasurer is, what then is the meaning in

part II of the act when it defines "administered price" to include "a price, user charge or fee. . .permitted or authorized by a public regulatory agency and "public regulatory agency" is defined in subsection 26(

d) as "any ministry, agency, board, commission. . ." of the government "which approves, establishes, regulates. . .user charges or fees to be charged for any product or service"?

2:40 p.m.

Surely, by definition OHIP is included in the administered price definition, and OHIP is included under the legislation. Simply put, my question is: what kind of game are they trying to play?

WAGE AND PRICE RESTRAINT PROGRAM

Mr. Foulds: Mr. Speaker, is the Treasurer aware of the situation of Mr. Saleem Yacoub, who earns $16,065 a year as a field worker with the Brant county welfare office? Is he aware that Mr. Yacoub's union has been without a contract since last April, and that if they had received a wage increase equal to the current cost of living increase, his wages would have gone up by $1,700 from April 1982 to April 1983 and an additional $1,850 in the second 12 months of his contract?

Is the Treasurer aware that the effect of his restraint program on Mr. Yacoub is that he will have his pay reduced by $250 this year and by at least $1,000 next year? Can he explain the justice and fairness of the impact of those reductions on a person like Mr. Yacoub?

Hon. F. S. Miller: Mr. Speaker, first, there are no reductions in pay, and the member knows it. That is terminology the member chose to use and he knows it is not true.

Hon. Mr. Davis: Try to play it straight for a change.

Hon. F. S. Miller: If Mr. Yacoub is in a salary range of $16,000 a year, then the act permits --

Interjections.

Mr. Wildman: How much do you make, Frank?

Hon. F. S. Miller: I make as much as the member does, plus the amount for a minister. Those are the guys who always want more in the negotiations.

Interjections.

Mr. Martel: On a point of privilege, Mr. Speaker: My friend the minister makes the point that it is us who always negotiate more. May I suggest that the minister retract that statement in view of the fact that in the last pay raise, they attempted to slip through an increase in ministerial income, and we said no.

Interjections.

Mr. Speaker: Order. The member for Sudbury East will resume his seat, please.

Hon. F. S. Miller: I would like to indicate that we did not even get the six per cent they got as members, and they know that.

Mr. Speaker: Back to the main question, please.

Mr. Martel: Don't give me that nonsense.

Hon. F. S. Miller: That is absolutely true.

Mr. Speaker: You are debating a question -- just ignore the interjections.

Hon. F. S. Miller: It is hard on the tonsils. If this gentlemen earns under $20,000 a year, the maximum amount he is permitted to have by the law is $1,000 in the control year. He is also limited to a maximum --

Mr. Mackenzie: Maybe.

Hon. F. S. Miller: He may have, certainly, up to $1,000. One of the great differences between our program and the federal program is that we have recognized people at the lower end of the income scale needed more; they did not. It is in our program; it is not in theirs.

Mr. Foulds: If the government is so concerned with people like Mr. Yacoub who are at the lower end of the income scale, why is it that the legislation says "may" instead of "shall"? Why is it that the employer solely and arbitrarily has the right to decide whether he will cough up the increase? That is what the legislation says.

Is the Treasurer saying to people like Mr. Yacoub: "You did not get it through negotiation in the last contract; you are not going to get a cost of living increase because the maximum is nine per cent at the most and you are never going to get it"? He is saying to people like Mr. Yacoub: "You are not entitled to a redistribution of the income and the wealth of this province. You are not entitled to a settlement through negotiation."

How does he feel about taking approximately $560 in income tax next year from Mr. Yacoub? Since he has taken $250 out of his pocket by the so-called restraint program, how does he feel about putting what is in effect a 35.5 per cent surcharge on Mr. Yacoub's tax?

Hon. F. S. Miller: I do not expect everyone in the world to think we were totally fair, but I challenge the honourable member to walk the streets of Sudbury, since he knows them well, and ask that question of people who have no increase coming to them right now. He should walk the streets of Windsor or any of the cities where his people are alleged to represent the unemployed. Most people in Ontario, even those in our unions, believe we have been fair.

Mr. Bradley: Mr. Speaker, in his desire to make this as fair a piece of legislation as possible, is the Treasurer prepared to give consideration to people who are in circumstances such as --

Mr. Laughren: How did you vote on this? How did the Liberals vote?

Mr. Bradley: I hear an interjection.

Mr. Speaker: Never mind the interjections; just ask the question.

Mr. Bradley: I want to remind the member of what the NDP government of Saskatchewan did when it was in power. It removed the right to strike from its hospital workers.

Mr. Speaker: Order.

Interjections.

Mr. Bradley: My question is to the Treasurer. In regard to those people who are in circumstances such as the public health nurses in Niagara are in, whereby they have been on strike since the month of May and are attempting to reach the principle of parity with hospital nurses, is the Treasurer prepared to make special provision for people in those circumstances so they can gain what they feel is justice? It would be an injustice to slam them down midstream in their negotiations at the present time. Will the Treasurer give consideration to that'?

Hon. F. S. Miller: Mr. Speaker, the right to strike has been present in the health units of the province. A number have gone on strike over the years for that principle or for others as they saw fit. That is proper. I guess any strike is an action by two sides to see which has the most staying power, negotiating power or whatever to get its way. There is always a risk in that action, not only the risk of immediate loss of employment on the one side or of service on the other, but that one will not get enough in the final settlement to justify the losses it took.

Looking at all of that, we still said that, where contracts within the last year have expired and have not been resolved, whether they were on strike or are still at work waiting for a negotiated resolution, we would set an upper limit of nine per cent for the year in place. Lots of people have taken that gamble. Some have won and some have lost. In this case, these people probably lost some of it.

Mr. Foulds: In regard to the Treasurer's economic package introduced two days ago, I wonder if I could ask him how he feels about restraining incomes like that going to Mr. Yacoub and his family? Mr. Yacoub has three teenage daughters. His wife is unable to work because of a back injury. She is currently trying to get a Workmen's Compensation Board claim without a heck of a lot of success. He happens to have relatives in Lebanon and finds himself in a very stressful situation. How does the Treasurer think that restraining this family's income is going to create one job in Ontario'? How does he feel that restraining this income is going to get the economy of Ontario moving again?

2:50 p.m.

Hon. F. S. Miller: That could take some time to answer, but, of course, we believe it will. I think the member has lost sight of the reason for the restraint package. It had nothing to do with the kinds of questions the Leader of the Opposition (Mr. Peterson) placed today about saving dollars in my budget.

It had to do with reducing inflation and making the dollars this gentleman takes home with him buy more products. It had to do with our borrowing less in the marketplace and seeing interest rates drop, as they did today. It had to do with restoring the confidence of people in cash, in the economy, in the future so that people will buy the products that the people out of work in St. Catharines and Windsor need. It had to do with all of those things, and it will succeed.

ONTARIO MUNICIPAL BOARD APPOINTMENT

Mr. Roy: Mr. Speaker, I have a question for the Attorney General (Mr. McMurtry), but in his absence I shall ask the Premier, on a subject with which he is most familiar: that is, his correspondence with Mr. Rosenberg.

The response yesterday by the Attorney General was not a very adequate defence of the administration of justice. Given the serious allegations made by Mr. Rosenberg about certain colleagues of his at the Law Society of Upper Canada -- for instance, Mr. Hoskinson and Mr. Goodman, fellow members of the bar -- and given the serious allegations, apparently, against even the Premier's office about making certain promises related to being the candidate for the Conservative Party and a judgeship on the provincial bench; given that these allegations, according to the Premier, Mr. Goodman and Mr.

Hoskinson, are apparently totally unfounded, that there is no basis for them, with the resulting conclusion that Mr. Rosenberg lied and did not tell the truth, how does that make him an adequate candidate to dispense justice on the Ontario Municipal Board?

How is it that such an individual, no matter what his qualifications are, given that he has made such serious allegations, makes it to the OMB as a result of the Premier's appointment?

Hon. Mr. Davis: Mr. Speaker, I think the Attorney General answered this question, actually not yesterday but on Tuesday. I should make very clear what has been said to the press, and I repeat it here again today: To my knowledge no such promise was made.

Mr. Roy: I must state again that the Premier has today compounded what I consider the failure of the Attorney General yesterday to defend adequately the administration of justice. He is evading the question.

Apparently, Mr. Rosenberg is having a press conference today at which he will deny the allegations he made in his letter and support what the Premier is saying, that he made no promise. Therefore, he made serious allegations that were unfounded. He lied.

Given that result and knowing that, how does the Premier then proceed to appoint an individual such as this to dispense justice for the Ontario Municipal Board?

Hon. Mr. Davis: Mr. Speaker, I have no knowledge of when the press conference was.

Mr. Roy: At 2:30 today.

Hon. Mr. Davis: I have no idea what Mr. Rosenberg is saying at whatever press conference is being held.

Mr. McClellan: Mr. Speaker, will the Premier give us an undertaking to permit the referral that was made of this matter to the justice committee to proceed, and to permit the justice committee to undertake full consideration of these matters?

Hon. Mr. Davis: Mr. Speaker, on occasion I hear members of the House saying that the government tries to interfere with the activity of what is referred to a committee. I think I heard the honourable member say the other day that he was asking to have it referred. Surely he does not want me to dictate?

Mr. Roy: Mr. Speaker, I have a point of order. I should advise you that, pursuant to the standing orders, I think you will even agree with me, the answers are totally inadequate and the matter will be raised at the adjournment.

Mr. Speaker: You have not told me why you are standing.

Mr. Roy: I told you I had a point of order, pursuant, I think, to

section 27 of the standing orders.

Mr. Speaker: All right.

Mr. Roy: What I am saying is that, as you are an objective person, you will understand that the responses given yesterday and today by the Premier were totally inadequate. As a result of this, I am forced to raise the matter again at the adjournment of the House.

Interjections.

Mr. Speaker: Order. The member for Downsview.

Mr. Di Santo: That is embarrassing for the government. I understand that.

Mr. Conway: Are there liars on the Ontario Municipal Board?

Mr. Speaker: Amusing as this may be, the member for Downsview has the floor.

Mr. Di Santo: Mr. Speaker, the Premier perhaps regrets having kept his only promise.

WORKMEN'S COMPENSATION

Mr. Di Santo: I have a question of the Minister of Labour. Can the minister tell the House if, at this time, he is willing to make a commitment to amend the Workmen's Compensation Act to increase the benefits of injured workers by 10.8 per cent, which is equivalent to the increase of the cost of living between July 1981 and July 1982, and to accept the recommendation we proposed to the committee yesterday that was rejected by the majority of his Tory colleagues?

Hon. Mr. Ramsay: Mr. Speaker, no one disagrees with the proposition that workmen's compensation benefits need to be periodically reviewed and revised. In fact, as honourable members know, periodical revisions have been made at irregular intervals for a number of years. For example, if one takes in the period 1975 to 1981, pensions were increased by some 88 per cent, which was virtually identical to the increase in the consumer price index over that same period.

With respect, it is incorrect to suggest there is any firm precedent for the timing of the revision. For example, over the seven-year period to which I have referred, three revisions occurred at intervals ranging from 1½ to three years. As members know, the last revisions became effective on July 1, 1981.

We are now engaged before the standing committee on resources development in a comprehensive review of the Weiler report and the White Paper on the Workers' Compensation Act. My understanding is that the committee intends to report its conclusions and recommendations before the end of the year. One of the issues before the committee relates to the methodology, timing and application of revisions to benefit levels.

Interim revisions would, in a sense, prejudge a fundamental issue now under consideration by the committee. If it appears that the committee's report or subsequent legislative action will be unduly delayed, it may be that interim revisions will be required. However, all indications are that the committee is on

schedule and that we should soon be in a position to make final determinations.

Mr. Di Santo: I think that the minister is totally inaccurate starting from the figures he mentions. Since 1975, the consumer price index has gone up by 78.3 per cent while the pensions of injured workers have gone up by 55 per cent, as Professor Weiler writes in his report -- if the minister has read the report.

3 p.m.

In view of the fact that it is totally phoney that the committee is proposing to the Legislature to review the level of the benefits, and in view of the fact that the minister knows Professor Weiler has not even written his final report, after three years and a large amount of money paid by the taxpayers of Ontario, and that in June the minister said the same thing -- that he was not ready to make a commitment -- can he tell the House why injured workers are the only group in our society that is penalized by this government?

Hon. Mr. Ramsay: Mr. Speaker, with respect, the figures quoted by the honourable member are the figures that were quoted in a letter to several newspapers in this province by the leader of the New Democratic Party. I have had those figures studied and assessed and I do not agree with them.

Where the member is referring to a 55 per cent increase, let me state that in the period from 1975 to 1981 injured workers' pensions rose by 88 per cent, not 55 per cent,

whereas for the same period the consumer price index went up by 88.2 per cent and the Ontario average industrial wage went up by 90.9 per cent.

Another factor that should be taken into consideration is that pensions for injured workers are tax free.

Mr. Wrye: Mr. Speaker, surely the minister will realize that a review of the past is really a red herring. Let me return to the original question. Since this House is now back in session and the committee, which was on

schedule until last week, is now very much off

schedule and may not be able to conclude its deliberations, does the minister not think it would be appropriate for him to take to the cabinet a recommendation for an immediate increase pending the committee's report and ministerial action, which probably will not take place until next year some time?

Does he not believe that this unseemly delay in increasing pension levels is probably the real reason that injured workers' groups that have come before the committee have urged us almost unanimously to reject the white paper's proposal to allow the cabinet to have control over reviews of benefit levels in the future?

Hon. Mr. Ramsay: Mr. Speaker, I would repeat what I said earlier: If it appears the committee's report or subsequent legislative action will be unduly delayed, it may be that interim revisions will be required.

JOB CREATION

Mr. Piché: Mr. Speaker, I have a question for the Minister of Natural Resources concerning an issue raised by the member for Sudbury East (Mr. Martel) in his question to the Treasurer (Mr. F. S. Miller) on Tuesday. The member inquired if measures would be taken to utilize the Cargill township phosphate deposits, located some 20 miles from Kapuskasing in the Cochrane district, to manufacture fertilizer in Sudbury.

Is the minister aware it would appear from this that the job creation strategy of the New Democratic Party is to create jobs in one area by destroying job opportunities in another? Will the minister take this opportunity to inform the House of his ministry's plans for the Cargill deposits, and to assure the House that his ministry will not pursue a resource policy which compromises a resource and the employment potential of any region of this province?

Will the minister say in no uncertain way that what has been suggested by the member for Sudbury East is not and will never be a policy of this government: to rob one region for the benefit of another?

Hon. Mr. Pope: He didn't really say that, did he? That is shocking. Is that why that party is in third place up there now? What is going on?

Mr. Speaker: Back to the question.

Hon. Mr. Pope: He should ask me. He has not had the nerve yet. Let him stand up and ask me. He did not show up at estimates. He did not have the nerve. Come on, stand up and ask me.

Mr. Speaker: Will the minister please address the question of the member for Cochrane North.

Hon. Mr. Pope: Let him show up tomorrow and engage me in questions and we will see how good he is. We will see how much he knows about the issue.

Mr. Speaker, I am shocked and amazed that the member for Sudbury East would make that kind of a suggestion. I know that resolutions of the Sudbury problems are required. I happen to agree with the member for Cochrane North that the way to go about economic recovery is not to process at other than source, and by that I am talking about the development of a fertilizer plant in Cargill township.

Mr. Martel: Where does the sulphur come from?

Hon. Mr. Pope: I am waiting for you; come on. I am waiting for you.

The way to do that is not to have a fertilizer plant in the Sudbury region because of the cost of transporting the phosphates to start with. There have already been discussions with Sherritt Gordon, and the member for Cochrane North is aware of them, and with the federal government and provincial government over the last years about the development of the phosphate deposit in Cargill township at source, to provide employment opportunities for the Kapuskasing area and to provide some economic diversification for Kapuskasing.

There have been meetings with the federal government.

Mr. Stokes: By using the sulphur from the Sudbury Basin --

Hon. Mr. Pope: What has the member done for it? What has he done except ask that it be taken away from Kapuskasing?

Mr. Speaker: Ignore the interjections please.

Hon. Mr. Pope: What has he done, other than ask to have it taken away from the district of Cochrane. That is his answer, "Take it away." That is always his answer.

Mr. Speaker: Order. Order. Will the minister please address the question. Never mind the interjections.

Hon. Mr. Pope: Can I go on for a little while? That has always been his policy, to take away from --

Mr. Speaker: Order. I am sure if we all listen attentively we will have an answer.

Hon. Mr. Pope: Mr. Speaker, we do not need more fertilizer in the Sudbury area from that member.

We are committed to developing this deposit in the district of Cochrane adjacent to Kapuskasing in the context of the demands of the company for this kind of a development and in the context of the work of the member for Cochrane North and the federal member to get a joint federal-provincial program going.

We have an industrial mineral program that we have made available to them and we are hopeful that this kind of development will take place using existing policies that have been introduced by the Board of Industrial Leadership and Development.

Mr. Martel: Mr. Speaker, I am absolutely delighted to hear the minister say that the government's policy is to utilize resources at the source. It being the case that they are going to process at the source, let me ask the minister when he is going to stop the shipment of nickel from Sudbury to Norway, when there has not been a pound of nickel refined from Falconbridge, lo these 50 years?

Mr. Speaker: Order please. That really is not a supplementary.

Mr. Martel: I am coming to that. It is certainly supplementary. Let us not play games.

Mr. Speaker: Let us have a supplementary then, please.

Mr. Martel: I want to know where the sulphur that is going to be utilized is going to come from. I want to know when the minister is going to stop the exportation of nickel from Inco to England and when this government is going to insist that all of the orders that are now outstanding, the exemptions, are going to be stopped so that the jobs that are created somewhere else will in fact occur in northern Ontario, not somewhere else for someone else's benefit.

3:10 p.m.

Hon. Mr. Pope: Mr. Speaker, there have been discussions already with respect to a number of sulphuric acid producers in the northern part of Ontario. Both Texasgulf and Inco --

Mr. Cassidy: Just discussions, nothing else.

Hon. Mr. Pope: The honourable member was up there in the last election. People had an opportunity to see what he would do to the resources: nationalize them. They told him what they thought of his policy on natural resources.

As the member is aware, sulphuric acid is being produced by both Texasgulf and the nickel producers in the Sudbury region. He is also aware that there is a market for some of that production. He is aware that the only reasonable alternative, which has been investigated and which is being worked on, is a pooling arrangement with respect to sulphuric acid, with deliveries both at the phosphate deposit source and a covering delivery system through the pooling arrangement to the other customers who are already on stream.

If the member thinks he is going to create more jobs in the Sudbury area by cutting off the export of nickel to Inco and Falconbridge refineries in Europe, he is wrong.

Interjections.

Mr. Speaker: Order. The minister has the floor.

Hon. Mr. Pope: We have had this debate before.

Mr. Peterson: We sure have.

Hon. Mr. Pope: Yes, we sure have. The issue is that there is export of nickel concentrate to the Inco and Falconbridge refineries in Europe. That is not the only source of their ore. The member is aware that Falconbridge, for instance. already obtains nickel concentrate from Botswana and also obtains nickel concentrates for refining from other sources, and could, using that refining facility in Europe.

Mr. Speaker, you are also aware that in order to gain access to the European community, which we vitally need for our resources, it is now a requirement that there be processing facilities in that location. If the member is aware of the need for us to access the European --

Interjections.

Mr. Speaker: Order. The minister has the floor.

Hon. Mr. Pope: Mr. Speaker, our policy will create more jobs than their policy ever could in the Sudbury region.

ASSISTANCE TO FARMERS

Mr. Riddell: Mr. Speaker, if we can set the levity aside for a minute, I would like to direct a question to the Minister of Agriculture and Food.

Mr. Martel: Do you know what the word means?

Mr. R. F. Johnston: Levity is lightness.

Mr. Riddell: I am not as stupid as you are by a long shot, my friend.

Interjections.

Mr. Speaker: Order. Now to the question, please.

Mr. Riddell: I would like to ask the minister what thought he has given to the devastating economic conditions that prevail in the farming industry today. For example, corn is $2.14 per bushel, down from $4 last year; soybeans are $5.78 a bushel, down from $7.35 last year; rye is about $2.30 a bushel, compared to $4 last year; barley is $2.02 per bushel, compared to $2.70 last year; pork is predicted by agricultural economists to reach an extremely low price level by Easter, followed by beef -- all of these far below the cost of production.

If the minister has given any thought to this, what programs is he planning now to prevent a large number of farm bankruptcies that we may see between now and spring of next year?

Hon. Mr. Timbrell: Mr. Speaker, I am very pleased the honourable member was able to get the floor today. He said he wanted to put aside the levity. I do not know what he calls that remark to the member for the third party. That seems to be the extreme.

An hon. member: And you are not going to be the judge.

Hon. Mr. Timbrell: I am certainly not about to judge which one is more inept than the other.

The member has outlined the difficulties with a number of commodities this year. I hope he is not necessarily accepting some of the predictions for the future. Certainly one cannot for a moment deny what has happened to certain commodities at the present time, but I hope he is not adding his voice to make some of the predictions for the future more credible. That would not do the farmers any favour, I can assure him.

The member will know that in 1982 we put in place a rather extensive program called the Ontario farm adjustment assistance program, under which applications have been approved to date for close to 2,700 individual farmers who, I think the member would acknowledge, would otherwise have been in extremely serious difficulty, or perhaps might even themselves have added to the bankruptcy statistics, as has happened in other provinces.

The member will also know that, to try to avoid some of the wide swings in commodity prices and farm incomes, we have been pushing in every possible way the introduction of a new national income stabilization program to cover all agricultural commodities. He will also know, I am sure, that that proposal of this government is supported by the Ontario Federation of Agriculture, by the pork producers, by the cattlemen both provincially and nationally.

He will also know that on July 12 of this year in Halifax, I tabled a formal proposal to the ministers of agriculture of the provinces and of the Dominion for the establishment of a steering committee made up of deputy ministers, to put in place the details of such a program.

I am sure he also knows I was not able to get a commitment from the Minister of Agriculture of Canada in regard to that concept. He probably also knows that the Minister of Agriculture of Canada promised another meeting by the end of August.

Today is September 23 and we have not had that meeting. If the member wants to help -- and I think he does; I am not questioning that for a moment -- then next Tuesday when we are in Lucan with the Minister of Agriculture of Canada, he will take him aside and say: "Now look, the time for delay has long passed. Give these guys a definite answer. Get on with the job of developing a better stabilization program for all Canada."

Mr. Speaker: The time for oral questions has expired.

Mr. Riddell: I cannot let him blame the federal government. What about his young farmers credit program, the one that was announced in the budget and in the throne speech? What about that? They blame the federal government --

Mr. Speaker: Order.

MOTIONS

BUSINESS OF THE HOUSE

Hon. Mr. Wells moved that, notwithstanding standing order 64, private members' public business not be considered today.

Motion agreed to.

COMMITTEE SITTINGS

Hon. Mr. Wells moved that, notwithstanding the order of Friday, March 12, 1982, no committee may sit concurrently with the House during the debate on second reading of Bills 179 and 180.

Motion agreed to.

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

Hon. Mr. Wells moved that the standing committee on social development be authorized to sit the morning of Wednesday, September 29, 1982, to consider Bill 138,

An Act respecting the Protection of the Health of the Public.

Motion agreed to.

3:20 p.m.

INTRODUCTION OF BILLS

PROTECTION OF RESIDENTIAL TENANTS ACT

Mr. Philip moved, seconded by Mr. Lupusella, first reading of Bill 181,

An Act for the Protection of Residential Tenants.

Motion agreed to.

Mr. Philip: Mr. Speaker, this bill, which maintains the present six per cent ceiling on rent increases that can be made without approval of the Residential Tenancy Commission, further extends the protection of tenants by tying the total rent increase the commission can grant to the consumer price index between October 1, 1982, and October 1, 1983.

Small owner-occupied buildings would be exempt from the bill and the rent review commission could also grant increases above the index in those exceptional circumstances where to do otherwise would result in bankruptcy.

NOTICE OF DISSATISFACTION

Mr. Speaker: Pursuant to standing order 28, the member for Ottawa East (Mr. Roy) has given notice of his dissatisfaction with the answer to his question given by the Premier (Mr. Davis) concerning the appointment of Mr. Rosenberg to the Ontario Municipal Board. I would advise all members this matter will be debated at 10:30 this evening.

ORDERS OF THE DAY

INFLATION RESTRAINT ACT

Hon. F. S. Miller moved second reading of Bill 179,

An Act respecting the Restraint of Compensation in the Public Sector of Ontario and the Monitoring of Inflationary Conditions in the Economy of the Province.

Hon. F. S. Miller: Mr. Speaker, I am pleased to have the opportunity to lead off what I assume will be a brief debate on Bill 179.

On Tuesday, when the Premier (Mr. Davis) announced the anti-inflation program, he told the House that no decision taken by this government has received so much attention, so much discussion and so much genuine concern. I want to echo those words because I want the House to know that we are keenly aware of the gravity of this initiative.

On Tuesday, as I indicated in my statement, I said we were dealing with over 50 separate labour organizations and our actions impact on over 2,700 collective agreements. They will ultimately affect 500,000 or more employees. To appreciate this program fully, it is necessary to understand the economic environment in which it was conceived. In this afternoon's debate, I would like to focus on the reasons behind it and what we expect it to accomplish.

In the last short while we have seen corporate profits decline dramatically. In 1981, they went down about 10.5 per cent and in the first quarter of this year the decline in those profits has been an astonishing 50.1 per cent. Of equal concern to me is that wage rates and unemployment are going up at rates which exceed those in the United States. I believe that with this decline in labour competitiveness combined with high job losses, high unemployment and sharp profit declines, one can argue for restraint on a national basis.

We as a government have always hoped that the solution to this problem would come from the private sector voluntarily. We still do. The province is not comfortable with imposing solutions on the marketplace. In recent weeks, I think we have seen encouraging signs that this kind of solution is actually happening in the private sector. Both management and labour in that sector seem to be responding to the strong market pressures, and these pressures are not felt as strongly in the public sector.

We do not make profits. We do not have shareholders to report to. A large number of our wage settlements are the result of binding arbitration and that is a process that is not really directly under our control. However, those facts in and of themselves do not necessarily justify wage controls. There is one fact I am going to give that does tip the balance.

In the last year, the Ontario public sector saw an employment increase of more than 15,000 people almost entirely in the education and health fields. During that same period, the private sector saw employment drop by 82,000 jobs. When policy makers are faced with that sort of situation, I think their duty is clear. We cannot permit unconstrained growth in the public sector when the private sector is undergoing its most serious crisis since the end of the Second World War.

The program we announced on Tuesday is a response to that situation. We want those in the private sector, be they management or labour, to know that the burden of the recession is not falling only on their shoulders. We can read public surveys that show people losing confidence in institutions at a very rapid rate. This affects not just governments but big business, big labour, universities -- in short, the very groups that we believe are the cornerstones of our society.

Faced with that kind of situation, we felt it was our duty to take steps that would help restore confidence in the public sector. I can tell this House that from the response I have had in the past 48 hours, the actions we took on Tuesday have gone a long way towards fulfilling that goal.

Just yesterday, I had the chance to speak with citizens all across the province on radio shows and in other ways, and they were applauding the very actions we took. I would like to ask the members opposite, those who have criticized this program, to get on the phone to the unemployed workers in Windsor and ask them whether they really believe a public servant should have not only job security but also an inflation-related raise. Ask them if that is fair when half a million people are unemployed in Ontario.

I even go one step further. I believe that if we asked the average public servant in this province whether it is fair, that person would respond in the affirmative. In fact, I challenge any of us here to find any public servant who in this economic climate would be willing to trade his or her job, with its security, for that of an auto worker in Windsor or a miner in Sudbury.

3:30 p.m.

Mr. R. F. Johnston: Why should they have to? What kind of straw man are you, trying to divide the workers against each other?

Am I stopping your flow? I am sorry.

Hon. F. S. Miller: The honourable member is not stopping my flow; he is making a fool of himself.

Mr. Speaker, I will be here to listen to each member as he stands up. I intend to sit here, as I usually do, listening to what members say and trying to assess it. I hope the rest of the House does. I only ask the same courtesy from the member.

The Deputy Speaker: I think that is fair. The Treasurer has the floor.

lnterjections.

The Deputy Speaker: Come on. Let the Treasurer continue.

lion. F. S. Miller: In my remarks Tuesday --

Interjections.

Hon. F. S. Miller: Mr. Speaker, I will resume when they are quiet.

lnterjections.

The Deputy Speaker: If the Treasurer will be kind enough to attempt to continue, I will seriously monitor all the interjections.

Hon. F. S. Miller: In my remarks Tuesday I indicated that one of the main objectives of this program --

Mr. Laughren: Do you feel you have the protection you need now, Frank?

The Deputy Speaker: Come on, member for Nickel Belt.

Hon. F. S. Miller: At least I have had to have protection once in a while. That is something the member has never had to have, because he has never taken an action that required any courage.

Mr. T. P. Reid: Going to an NDP caucus takes a lot of courage.

Interjections.

The Deputy Speaker: Order. As all members well know, every member will have an opportunity to be heard. Interjections are allowed from time to time, but continual conversations such as those from the member for Nickel Belt (Mr. Laughren) and the member for Scarborough West (Mr. R. F. Johnston) are not allowed. I ask them to refrain slightly, please.

Hon. F. S. Miller: I want to spend a few minutes today highlighting why this is such a necessary objective of our program. About 50 per cent of government expenditures are wage-related, and in some areas, such as hospitals and schools, more than 70 per cent of spending goes for wages and salaries. In other words, if you want to restrain public sector spending, you really do have to constrain wages first.

The government does not stand to profit financially from these constraints. We are not saving money that we already have. Rather, we are preventing our borrowing from increasing quickly or unconstrainedly to the point where our ability to borrow that money would be impaired, as members know has been the case in quite a few jurisdictions.

I sometimes believe that members opposite do not understand that the high credit rating we already have is not just a status symbol; it is concrete evidence to investors that Ontario is a secure place to put their money. To the taxpayers of Ontario, I want to say it is a great saving in the cost of that money. We need more investors to have confidence in Ontario, because their confidence will translate into jobs, and that, of course, is this government's main priority.

At the International Monetary Fund meeting, I was told over and over again by investors from around the world, including Japan and West Germany, that they want to invest in Ontario because it is one of the places in the world where government spending seems to be well managed.

As the Premier indicated last Tuesday, we are prepared to join with Ottawa in any appropriate economic recovery program. We are also prepared to act on our own if that leadership is not forthcoming. However, such stimulative initiatives always have a cost attached. We must have fiscal flexibility if we are going to respond to those needs.

A year from now, I will judge whether this initiative was a success or if it helped to blunt inflations rise. Too often when we devise solutions we expect them to have immediate and sweeping effects. In my own business career I have found that such solutions are rare. Instead, the decisions that tend to make a difference are the ones that yield small amounts of savings here and there. When you total those actions, they are the difference between a profit and a loss.

I believe our actions will help the fight against inflation in three ways: (1) public sector cost reductions passed through to the private sector in the form of lower tax increases, user fees and charges for government services, (2) decreased government demands on the capital markets to ease pressure on interest rates and (3) the demonstration effect, signalling an era of lower wage settlements to the private sector.

Of all those effects, I think the third is the most important, because the problem this country faces today is as much a psychological problem as it is an economic problem. Canadians seem to have a set of inflationary expectations that are very hard to unlock. I do not pretend to know what the exact key to it is, but my job as Treasurer is to take this black art of economics, look at the theories, look at the perceptions of human behaviour and then meld them together into a policy.

For example, I look at our high saving rates. The fact is that we are not going to get this economy moving until people take their money out of savings certificates and start spending or investing, whether it be by buying stocks, homes, cars or whatever. Until we have restored that confidence to spend and to invest, we will not recover.

Therefore, the big task facing those of us in government is how to restore investor and consumer confidence. There is a two-pronged approach. First, investors have to know that this country is a stable haven for their money. That is why I think the triple-A rating is important. Second, consumers have to see evidence that wage settlements are moderating and that prices of goods and services are not rising at such a rapid rate. That is why this legislation is crucial.

In considering this bill, I ask the members of this House to remember the words of an American economist, Mr. Alfred Kahn, who said in discussing the fight against inflation:

"The problem in our economy is that we have these persistent, well-organized pressures by each individual and group to preserve his or her absolute position regardless of what happens to the country as a whole. What this does is create, on the part of everyone in society, the expectation that no matter what happens to the aggregate, each of us is individually entitled to CPI plus three per cent. What we have got is those constant forces to increase expenditures, to increase nominal incomes and to expand government programs. It is clearly something that has to do with a lack of social discipline."

In closing that quote, I would like to say that I believe a democracy can discipline itself. It can take actions that break our inflationary expectations, restore confidence, and give unemployed workers new hope and new jobs. That is what this program does and that is why it deserves the support of every member in this House.

The Premier mentioned that there should be a second phase in Canada, not only to our program but also to the federal government's. I would like to share very briefly with the House our approach to that.

I met with the new Minister of Finance for Canada last week, and I have had similar contacts with my colleague from Quebec. I am confident that we can develop a co-ordinated approach to the problem of unemployment, and I hope I can report further details to the House as we conclude our negotiations with him in the coming months.

3:40 p.m.

The Deputy Speaker: The member for London Centre.

Mr. R. F. Johnston: "I rise to support this bill."

Mr. Peterson: Mr. Speaker, my friend is getting a mite sanctimonious these days.

Several weeks ago, my party put its economic recovery package before the people of this province. We proposed equitable restraints. We urged control on wages and prices. We set out an ambitious platform for recovery and for jobs. We pleaded with the government to get on with the urgent task of modernizing and revitalizing our industrial base. We called for the real and lasting solutions that this province so desperately needs.

Finally, on Tuesday, we had the government's response. After a gestation period of several months, they have delivered the five per cent solution to us all. What is regrettable is that it says it all. The program before us is only five per cent of the solution to the economic problems facing this province. It is only the first step, a small step towards recovery. It is a vital step. I agree, but only the first step.

There is nothing in this program that will take us the distance: nothing to create jobs, stimulate investment or promote economic renewal. There is nothing in this program to reverse the tremendous decline in Ontario's economic fortunes since the last provincial budget.

When my party introduced its alternative for restraint and renewal some time ago, I said we were eager to co-operate in the reconstruction process. We are not a party that puts its head in the sand or refuses to deal honestly with the realities of the 1980s, employing the rhetoric of a century ago.

We are still eager to co-operate today, but a reconstruction process is just that; it takes time, it requires full public support and participation and it demands innovative thinking from government. The job of rebuilding Ontario cannot begin and end with the five per cent fiat on public sector salaries.

As I have said all along in this critical debate, we are not a party of obstruction. We are glad the Premier (Mr. Davis) and his Treasurer (Mr. F. S. Miller) at long last have made a decision, and we want to encourage them on this course. We will support the step taken and the measures the Treasurer and the Premier have put before the House. We have reservations, and I will discuss those today. We want to see a full and thorough debate on the many points of concern, but the Liberal Party will not block this bill.

What we will block, however, is an attempt to pawn off these initiatives as a recovery policy. They are nothing of the sort. If they are not followed up immediately with programs to create jobs, the five per cent solution will become nothing more than a cheap and superficial gimmick, a cruel joke upon thousands of Ontario people who have been plunged into confusion, helplessness and anger by the steadily deepening recession we are facing.

Ontario is headed for the worst winter in nearly 50 years. Every member of this House is profoundly aware of the crisis. Each has experienced a growing litany of human calamity that is unfolding daily in his or her constituency office. It is no time for partisan rhetoric or dogmatic diatribe. It is time for an honest effort by every legislator in this House. It is a time to grapple seriously with the gravest threat to Ontario we have known in decades. It is a time to put special interests aside in favour of the public interest, a time to abandon confrontation in a search for consensus. This is the tone my party would like to bring to this debate.

We will speak with urgency about the pursuit of jobs, because in our judgement the situation has never been more urgent. A real recovery plan is needed now; not a year from now, not three months from now, not after the last federal budget, not after the next provincial budget in the spring, but now. In fact, it should have been introduced at the very same time as the restraint program.

There is no excuse for the dithering and delay that have kept us away from this House for some three months. The step that the government has taken is long overdue. It is a step that easily could have been taken within weeks or even days of the announcement of the federal program last June and, indeed, the announcements of other provincial programs across this country.

Uncertainty has been plaguing Ontario and Ontario workers all summer. Since July 1, when this program could have been introduced, the number of Ontario's unemployed has risen by more than 80,000 people on a seasonally adjusted base. The numbers I have, and they are only until the end of August, show that there were 5,000 more unemployed in Sudbury than at the end of July and 5,000 more unemployed in Kitchener-Waterloo.

In Toronto, unemployment has more than doubled since a year ago, from 74,000 to 161,000. In my own home town of London, the number has gone up dramatically. In Windsor it has almost doubled. In Hamilton, unemployment is currently 36,000, nearly three times what it was some 12 months ago.

If the Treasurer does not think the first priority is jobs, he should look for another job himself. The people of Ontario will not tolerate this delay, evasion and avoidance of responsibility for conditions as severe as they are.

What else has been happening while the government has been biding its time? Let me tell the members. Industrial output has continued to fall. Capacity utilization in the manufacturing sector dropped by a further 2.2 per cent in the second quarter alone. Housing starts were down by 32 per cent this year and were still dropping in July. August looks even worse for the construction industry.

There have been more than 700 bankruptcies in Ontario since the beginning of July. Layoffs in firms of 50 employees or more are up by 167 per cent over 1981. In July, the increased layoffs amounted to a 34 per cent increase over the previous month, and I have not got all the statistics for August.

What it all adds up to is neglect by the government. By any estimate, human, economic or mathematical, Ontario's people are underemployed, its capital is underemployed and, given what it has taken three months to produce, I can tell the House that the Premier's and the Treasurer's minds have been underemployed too. Of course, I am not suggesting that there is any direct relationship between the two.

We support the five per cent restraint program as far as it goes, but we urgently need a job recovery program now. We have already lost too much time fiddling with the five. We cannot afford any further delay, and my party will continue to insist that we take the second crucial step to recovery now.

With these preliminary points in mind, let me turn first to the general principle of the package that is before us. On this side we have a great number of concerns with the legislation, some minor and some not so minor. We would like the government to address them, and we would like to have a full debate in this House and in committee to make sure we can forge the best piece of legislation possible in the circumstances.

As I have said many times, our party is in full support of legislated wage and price -- I repeat "price" -- restraint at this time. Although wages, particularly in the public sector, have not led the domestic inflationary spiral in recent years, there is no question that rising labour costs have contributed in a major way to the erosion of Canada's competitive position relative to many of our trading partners.

Nearly two thirds of our expenditures in Canada are for wages, and we have simply priced ourselves out of too many world markets. We have simply failed to achieve the productivity increases that are necessary to support higher labour incomes that were won during the 1970s.

3:50 p.m.

In the United States, which is our largest trading partner, wage and salary increases have plummeted to an average of less than six per cent annually. Because nearly 70 per cent of Canada's exports are to the United States, and because this province accounts for the bulk of those exports, it is absolutely vital that our wage and salary settlements be brought into line with those in the United States.

If we do not achieve this objective soon, Canada and Ontario cannot hope to participate in any worldwide economic upturn. Our exports simply will be too expensive relative to the cost of equivalent goods and services in foreign markets and particularly in the United States. It is a fact of life that if we want to benefit from world recovery, then wages and salaries and our entire inflation rate must be severely curtailed.

Prices too must be curtailed. Since one person's prices are someone else's wages, we need both restrained in equal measure. Administered prices are a particular villain; they are often charged in monopoly situations and they are not subject to the accountability of the marketplace.

In recent years, prices under government jurisdiction have risen at twice the rate of private sector prices. This must stop. We need a very firm dose of restraint on regulated prices and other prices administered by government.

What we have all been doing for far too long is taking more out of the economy than we have been putting into it. Restraint is the only way to restore some semblance of balance between consumption on the one hand and investment on the other.

Mr. McClellan: Especially for hospital workers. Especially for clerical workers.

Interjections.

Mr. Peterson: The New Democratic Party members are doing a lot of yapping and, given their lack of understanding of the subject, I can understand why. Yesterday the leader of the New Democratic Party said, "It's extraordinary logic that dictates wage controls as the answer to the highest levels of unemployment in Ontario since the Depression." What we were given yesterday by the leader of the New Democratic Party was the left's version of voodoo economics.

If the pie is shrinking and everybody wants a big or bigger piece, then eventually someone is going to go hungry. That is why wage demands that exceed the real growth of the economy are pushing people out of work in other sectors. My friends in the NDP would say, "Well, bake a bigger pie." That might work if people's appetites did not grow quite as fast as the pie. That is what restraint is all about.

We need a two-pronged policy of wage and price restraints within the context of building a broader industrial base. I would rather have a lot more people working for a little less than a lot fewer people working for a little more.

Restraint alone, however, is no cure to our economic malaise. In fact, unless it is balanced by policies that stimulate investment, modernization and industrial expansion, a policy of wage restraint could lead to even greater jobless rolls. By controlling wages at below the rate of inflation, we are effectively reducing real consumption in the economy. That is why price restraint is critical.

A drop in real disposable income will mean fewer purchases, fewer jobs and even lower consumption after that. The only way to combat this threat is to bring in the second stage of the policy now. We need investments that will spur productivity on the nonlabour side to further deflate the real cost of goods and services. We need incentives for new industry and for modernization of old industry to create jobs and effect a real boost in consumption.

The economics of restraint dictate that money saved on one side of the ledger must be spent on the other. Inflation-fed consumption must be sacrificed for investment-fed expansion. That is why the second stage of this program is so critically important.

Without wage restraint now, however, there can be no hope. Any short-term gains in disposable income will be illusory. Real growth opportunities would only be swallowed by further price inflation. Price inflation would continue to be sustained by wage costs and by declining productivity owing to our ageing industrial infrastructure.

Continued high inflation and the interest rates it brings could only be a further deterrent to investment in plant and equipment. This is the quagmire from which we must escape. That is why wage and price restraints are such a vital first step.

But it cannot be just any wage and price restraint program. If it is to work, it has to be fair and it has to be seen to be fair. It must call upon every part of society to bear the burden of sacrifice, including the corporate sector.

The greatest flaw of this and other programs across Canada is that they single out only one sector, the public sector, to shoulder the load. I hope, of course, and I am sure the government hopes, that the private sector will fall into line. There is no question that the issue of job security for public sector employees tends to soften considerations of equity and wage restraint.

I am concerned about equity on the wage side but perhaps less concerned about that than I am about the price side. I am quite confident that most private sector employers would be happy to comply with that part of the program. In fact, I am led to believe that private sector settlements are already coming down and are in the range of eight per cent or so at present.

What worries me more is the price side. This program places no obligation on private sector companies to follow the five per cent guidelines, except in limited cases. We all know that there could be hundreds and hundreds of justifications for excessive price increases and that there will be a hundred justifications in the coming months.

In my view, equity demands a comprehensive control program for the private and public sector. My own party is on record as being in support of such an approach.

The Premier has been very interesting and, in fact, has fudged on this issue. On the one hand, he has asked this House to give first reading to a bill in which he has asked for the authority to participate in any national private sector control program. On television the other night, though, he said he was not asking for a controls program from Ottawa. Then the Treasurer said he was sending a signal to Ottawa, whatever that means.

The sum total of this government seems to be that maybe we need a national control program and maybe we do not, but if someone in Ottawa thinks we do then it will go along. In my judgement this is an abdication of responsibility by the government, a government that runs the most populous and wealthy province in this country and the one that still has the most to lose.

I want to remind the Premier of what he said in the House on June 29, 1982, the day after the federal budget was introduced, at a time when he still professed to believe in equity.

"I think people are looking for leadership from their governments, leadership that at this moment in our history sets aside partisan distinction, and a degree of leadership that will make economic stability an absolute priority. . ." He went on, "What is required is some clear and resolute leadership."

Clear and resolute leadership indeed. Through three months of delay, the Premier has lost his chance to show leadership on the issue of public sector restraint. In his heart, he knows that equity demands a more comprehensive program. Otherwise, he would not have brought forward his request for authority to opt into any federal program, should it ever develop.

I challenge him today to show that clear and resolute leadership. Why does he not make a formal request for a national control program on wages and prices? I challenge him today to ask for a federal-provincial first ministers' conference to consider such a national plan, not piecemeal plans across this country. That is the kind of leadership we need.

I want to speak for a moment, if I may, about doctors' salaries. In our judgement, at the very least the Premier has to take a strong position on the issues of equity within his own jurisdiction. The issue of the doctors' salaries is an excellent example. It would be wrong to allow the appearance of fairness to be undermined by letting the doctors' settlement stand. Their increase for the next year should be rolled back to five per cent as will everyone else's.

I hope doctors will accept such a rollback voluntarily because, believe me, they are responsible people and I believe that with the proper leadership they would be prepared to do that. Let us not forget that they bargained last year under a very different set of circumstances than they have now.

I will be very interested in the outcome of the current discussions between the Ontario Medical Association and the Premier. If doctors do not choose to comply in some way or other with the intention of this legislation, then I believe that this government and this House have to be prepared to deal with the matter appropriately.

4 p.m.

There is no reason a doctor earning $80,000 should get a higher percentage increase than a clerk who is making $15,000. Both are paid from public funds, and both have to live by the same rules. Of course there are arguments, and we have heard them already. First we are told the contract with the doctors is already in place and it should not be reopened. What does the government think it will be doing on December 31 with the office and clerical workers? The second year of their contract is already in place. It will be opened up and rolled back. Why a double standard?

Then there is the argument that doctors are really private sector workers. The Treasurer called them independent entrepreneurs; the Premier called them self-employed professionals. In the program, however, it is clear that private sector activity that is funded by the province will be forced to comply with the wage guidelines.

Let me quote, if I may, the relevant passage: "privately owned parapublic-sector companies contracted to or funded by the province, a municipality or other government agency to provide public services, including nursing homes, ambulance services, private hospitals, garbage contractors, contract group homes," etc.

Are doctors not funded by the province to provide a public service? Do they not fit equally into this category of private sector employees who are covered by their program? Why do we need a double standard? On this side we will be very concerned if the doctors are exempted. It would simply be unfair and unjust to allow them to be immune from restraint.

From the perspective of equity it is also regrettable, in our judgement, that the five per cent rule is to be applied so rigidly. While an attempt was made to cushion those at the bottom of the wage scale to some extent, the results are meagre -- indeed, so meagre as to be laughable or pitiable if you happen to be living on the receiving end.

Let us take a clerk who earns $15,000, for example. The maximum increase he or she can receive under this program is 6 2/3 per cent. Surely we can do better within the five per cent guideline to help those who suffer most from the ravages of inflation and the squeeze of the recession.

In British Columbia, a sliding scale was introduced that provides for increases from zero up to nine per cent within an overall average increase of five per cent for the public sector for the second year of their program. I would like to see us improve this bill by taking a more innovative approach to helping those at the lower end.

British Columbia and Newfoundland have both achieved more in this area than is being proposed for Ontario. We can improve this bill if we follow their example. My party would like to know the views of the Ontario Public Service Employees Union before proposing any amendments to this effect.

We are very concerned about the firm control of administered prices. The provisions as they now stand are full of loopholes. First, all sorts of cost increases, such as the purchase of goods and services, interest, depreciation and taxes, can be fully passed through to the consumer. This criterion alone will enable regulated industries and crown agencies to avoid the pill of restraint. Bad management decisions, mistakes and simple waste can inflate cost, which in turn can be passed on to the consumer.

The proposals for price restraints are much weaker than those for wage restraints and require far more careful administration. While uncontrollable feedstock costs legitimately need to be passed through to the consumer, great care must be taken to ensure that these costs are legitimate.

Moreover, the five per cent limit on increases in profits must be seen clearly to be a ceiling, not a guaranteed increase. Every regulated company should be forced to justify any increase in its allowed return on common equity based on past performance and the prevailing environment in which it must operate.

Two rate applications now before the Ontario Energy Board, those of Consumers' Gas and Ontario Hydro, will provide the true test of the government's commitment to restraint. In the case of Consumers' Gas the company is at present allowed a 6.25 rate of return on equity, and it has requested an increase to 7.25 per cent for the next year. Restricting the company to a five per cent increase in profits would allow for a mid-range rate of return of 7.06 per cent.

But even this magnitude of increase cannot be justified, in our judgement. Witnesses for the OEB have testified that the allowed return for Consumers' Gas should in fact be reduced to 5.8 per cent this year, and the new restraints on wages may allow this to decrease even further.

Since the return for a regulated company is decided largely on the basis of alternative investment possibilities, in a time of decreasing interest rates and bank yields the return should decline. It is ironic that a company like Consumers' Gas could increase its after-tax profits as a result of the same regulated interest rates that have been crippling so many unregulated industries. The problem should not now be compounded by allowing an automatic and unjustified five per cent increase in profit.

As for Ontario Hydro, I have already made the Liberal Party position perfectly clear. This crown corporation should be explicitly restricted to total rate increases of no more than five per cent without provisions for any cost pass-through. There is more than enough room amidst the unnecessary expenditures and increases in unneeded capacity to trim costs efficiently to keep increases below five per cent.

Ontario Hydro will be the first big test of this government's commitment to price restraint. Already, in a scathing report, the Ontario Energy Board has slashed Hydro's request for a rate increase from 13.9 per cent to 8.8 per cent. Since then, new factors have come into play. Wage costs will be lower than anticipated, inflation will very likely be lower than assumed in the report, bond interest rates seem to be falling more sharply than expected, and of course the mismanagement of Hydro is being allowed to continue.

Over the past few years we have witnessed usurious uranium contracts. Projects have been started, then cancelled; brand new generating stations are in mothballs; millions are paid out for oil that is not to be delivered, because the plants in which we were to use it are not in operation -- $33 million last year and another $27 million this year because of bad planning. These mistakes -- and we have catalogued them before: $2.2 billion, in our judgement -- are being paid for by the consumers in Ontario.

Will the government of Ontario take charge of its affairs to prevent these pass-throughs under the restraint program? That is the question. Will they finally get Hydro under control, or will Hydro continue to run our friend the Minister of Energy (Mr. Welch)?

We will be watching Hydro closely, not just because it is a symbol but because it has been ripping people off in Ontario for years with its abuse of public funds. If the federal government can force Bell Canada to back down from 25 per cent to six per cent, Ontario Hydro can surely be ordered to bring its rates down from 8.8 per cent to five per cent or less. That is the big test we will be watching very closely.

We believe that pass-throughs in all cases must be watched very carefully. The government should scrutinize every cost meticulously, even to the point of assessing questionable management policies in so many of our public agencies. Unless administered prices are kept firmly within the five per cent guidelines, the credibility of the whole program will be destroyed.

I have already stated our conviction that the potential of this program is inherently limited by its restricted scope. I have talked of the need for broader controls and greater equity. Now, Mr. Speaker, let me turn, if I may, to some of the other issues that concern me.

The program is designed to last only for one control year. For two reasons I do not think this is adequate. First, a one-year program does not import the degree of seriousness that is required if the government hopes to convince the private sector it is serious about restraints. More important, however, the short duration almost totally undercuts the very purpose for which we are participating in this restraint exercise.

Surely we want to use this period of controls to bring about a major restructuring and modernization of our industrial base. Have we not learned from our mistakes during the last period of controls? We should use this time as a breathing space to get our economic house in order for the long haul.

What worries me is that the government at this point seems to have absolutely no idea what it plans to do in this critical area over the life of the program. The absence of a clear recovery program at the outset of this period of controls only strengthens the argument for an extension of its duration. We will need time and a long period of price and wage stability to put the right fundamentals in place for restrained recovery.

We would prefer a longer period of time, with the option of extending it if necessary. We hope the government, in the light of its failure to bring in an economic recovery program, will see the wisdom of this suggestion.

4:10 p.m.

One serious disadvantage to a wage control program that is not balanced by an equally rigorous price controls mechanism is the possibility of post-control catch-up settlements, particularly in the public sector as unions grapple to regain lost ground in relation to prices. Once full strike and collective bargaining positions are reinstated in 1984, and this will be a distinct likelihood, we will lose all we have gained through restraint. The inflationary cost-push cycle will be triggered again and we will be mired in the same dilemma from which we are now trying to escape.

For this reason, price control is of paramount importance and, I repeat, consideration of broader controls is warranted. But we must also take time in the committee to study fully the decontrol phase. We must ensure now that we are prepared to handle the problems that will inevitably arise when the program is lifted.

Let me also say a word about the removal of the right to strike. Obviously, if wages are to be strictly controlled, job action must be severely limited, but my party is concerned about the right to strike and the principle it represents. As far as possible we want to see that principle preserved through this period of restraint. Therefore, we are going to request the committee re-examine the legislation to see whether it is possible to retain the right to strike on nonmonetary questions such as health, safety and working conditions.

We recognize the legal hurdle that is involved, but we are hopeful that by adjusting the definition of a contract in the present legislation some gains could be achieved.

I want to stress that the manner in which these programs are put together continues to bother me. In my view, the serious economic crisis we are facing afforded a first-rate opportunity to forge a consensus, to win voluntary sacrifice in the public interest and to begin to put a whole new face on the relationship between government, business and labour.

I fear the opportunity has unfortunately been lost by the denial of open dialogue and consultation prior to the program's introduction. Secret meetings were held and the press was kept in the dark. The whole strategy seemed to be based on the premise that public discussion of the difficult choices for Ontario would inevitably lead to the old-style confrontation politics.

I believe the era of confrontation politics is ending in Canada. While my friends to the left are trying to keep it alive, of course, they are foundering in the backwater of public opinion, fighting a rearguard action. People do not want that confrontation. They want to know what will work, and they want to be consulted. On this issue of restraint, at least, there seems to have developed a broad consensus among the public. According to the latest polls, support for public sector restraint exceeds 60 per cent even in union households.

I am no great fan of Premier Bill Bennett, but I think the recent British Columbia experience provides an interesting model for salary negotiations across Canada in these difficult times. Wages were restrained, but those who were asked to sacrifice had a say in how the savings --

Mr. Foulds: They are the Premier's former advisers out there. That is the Tory party west.

The Acting Speaker (Mr. Cousens): Order.

Mr. Peterson: Over four months ago, well before the federal program was introduced, I called for a public process of hearings to be initiated by the Treasurer for the purpose of considering the budgetary and economic options that confront the province. I wish he had followed my suggestion. I am convinced we could have had very fruitful and positive debates on many of these questions. More important, we probably would have reached this juncture today with a far wider consensus around the measures that need to be taken.

If this national restraint effort is to be more than just a one-shot attempt at forging a national economic will, we have missed an opportunity to redefine the economic partnership which is Canada. We should be focusing heavily on the process of economic decision-making today. If we hope to build a truly co-operative and productive spirit into the society in which we live, and if we hope to emerge from this period of restraint with our social partnership intact, we must recognize that increasingly the process is the product.

This process of collective, open decision-making which I am endorsing is the means by which we can and should seek to make all our future adjustments between interests, between classes, between wages and profits, and between consumption and investment. It is only in the collective decision-making process that the interest of the whole society rather than of its various parts can be filtered, woven together and articulated.

I urge the Premier and the Treasurer to begin today to redeem the process by which they have brought forward this legislation. I urge them to consult with the public sector on the reintroduction of the right to strike for nonmonetary issues. I urge them to consult with the public service on the matter of sliding scales. Finally, I urge them to consult with the public service and others to find out how they feel about the savings gained at their expense and how those savings should be spent in Ontario. In my view, there is nothing to fear from such a course.

While the very fabric of our economy is in such deep crisis, there is a tremendous commonality of interest in Ontario. It is called survival.

The savings from this restraint program are still very unclear. On Tuesday we were told the savings were not yet known. In the Toronto Star the Treasurer said he would put the figure at around $840 million. The director of fiscal policy stated the total savings to the province would be in the $420-million range, spread out over three years with the bulk of the savings in 1983-84. Approximately $50 million will be saved in this fiscal year as a result of reductions in expected wage settlements, particularly in the fourth quarter. These are real savings because they are reductions in budgeted expenditures.

The other $380 million are, in a sense, only theoretical savings relating to the difference between controlled wage increases and forecast increases without control. Compliance by doctors would add another $81 million in real savings.

Trying to calculate what is real and what is theoretical is not easy. It reminds me of the story of a chap who missed the bus and ran to the next stop to get on it and missed it again. He ran to the next stop and missed it again. Finally he ran all the way home. He said to his wife, "I just missed the bus, but I followed it home and saved 75 cents." She said he was silly; he should have followed a taxi and saved $4.

Whatever these savings are, it is the view of this party that every cent should be ploughed immediately back. This is the key point. Whatever those savings are, and we can disagree on them, they are substantial, and whatever those savings are, they should be ploughed back immediately into the economy to spur jobs and to spur investment. That is the key. If I have one message I want to leave with this House and the Treasurer today, that is the key.

The government must exercise its responsibility in this area. All the available resources must be channelled towards productive investment by the public and the private sector. This is the crucial missing part of the program that is before us. We need a commitment to redirect real savings from both restraint and the elimination of waste. They have to be directed into jobs and into growth.

Ever since I was elected leader of this party, I have been talking about jobs. Jobs have to be the centrepiece of any economic recovery package. Where is the commitment, any commitment, from this government to meaningful and lasting employment opportunities? The people of this country and province are willing to sacrifice if they are given something to sacrifice for. We must not allow this unique opportunity to restructure our economic base to pass without a real effort to put the fundamentals in place.

Where is our commitment to increase our investment in high technology? Where is the spending on research and development? Where are the programs to train our young people for the complex skills of the modern labour market? Where is the money for better husbandry of our own resources? Where are the incentives for the private sector to modernize plant and capital? That is what we are missing.

The real fight against inflation and unemployment will not be won by temporary wage restraint. It will only be won by a vastly improved productivity, vastly improved industrial competitiveness and a vastly improved world marketing capacity and better labour relations. Wage restraint can only provide breathing space. On the public and private investment side, we need growth, not restraint, and strategies of expansion rather than retention. Our economic engine needs the grease of investment now.

Frankly, I am frightened by what I see happening to our industrial base. Since the middle of 1981, business investment has plummeted to the point where it is no longer even keeping ahead of inflation. Currently, we are actually disinvesting in real terms in plants and equipment. Capital spending in Ontario for 1982, in all sectors except housing, has increased by an average of only 4.2 per cent and original projections have been revised downwards to almost nine per cent. In Canada as a whole, the manufacturing sector is actually spending 4.1 per cent less on capital improvements than it did last year.

Bluntly and simply, we are letting our economic engine run down. We must reverse these potentially devastating trends if we want a strong and modern economy that is able to compete in the 1980s and 1990s. We must start to put back far more than we are taking out.

4:20 p.m.

Wage restraint set the stage for such a shift in spending in our economy. As we bring inflation and interest rates down, investor confidence must be reinforced by government policy. We must encourage the business decisions that the climate of uncertainty has deferred for so long. The government itself must take the lead by showing its own determination to invest productively for tomorrow. We desperately need jobs now.

We need to stimulate further the job-intensive construction companies. What are we going to do about it? Why do we not examine some innovative techniques to assist that sector further?

What about a mortgage indemnification scheme so that buyers could be protected by insurance for interest costs above a guaranteed rate? Such a program could be self-supporting.

What about housing and employment development bonds such as were recently offered in British Columbia? Some of those could be offered to public sector employees as part of their compensation.

What about extending the renter-buy program to resale homes so that we can more fully exploit the domino effect of home sales to stimulate the durable goods industry and to create an additional final demand for new home construction?

These are some of the innovative options we should be pursuing if we are serious about jobs. There are many more -- in the auto parts industry, in the high-technology manufacturing sector and in communications. There is much we can do to provide more work for the thousands that desperately need it.

Just last week, Larkin Kerwin, chairman of the National Research Council, issued a statement that indicated a real commitment to research and development could double current industrial output and create 650,000 new jobs by 1990. Three per cent of Canadian industrial companies, those that qualify as high- technology firms, are already contributing eight per cent of the total gross national product. The federal government has led the way with a 34 per cent increase in R and D spending from 1979 to 1981. The secondary-industries sector has increased its spending by over 40 per cent.

The government of Ontario has a major and important role in this area. We have the resources, if we can only get our priorities straight. The billions that have been spent on land assembly, advertising, consulting fees, Minaki Lodge, Suncor and other bottomless pits should be put where they can create new industries, new jobs, new revenues here in Ontario. The combined stimulus potential of savings from restraint and waste elimination could provide a fantastic boost to this province's economic prospects. There is need to commence a program like that now.

I recognize that the selling of the jet was an important, symbolic step in reducing waste, but it is not enough. The issue of government waste is more than just another political forest fire being put out by two new water bombers. We on this side of the House intend to keep the heat turned up on this debate and throughout this session. We must guarantee that we spend every dollar we have with a view to how many jobs we can produce here in the province.

I want to serve notice that we in the Liberal Party will fight any attempt to restrain or freeze transfers to municipalities, hospitals and universities. Municipalities face burgeoning welfare rolls which must be accounted for. Thousands of Ontarians will be losing their eligibility for unemployment insurance benefits this fall and they must be protected.

In addition, we need the jobs that municipal capital spending will produce over the coming months. Certainly municipal wages should be controlled, but it will be a grave economic error to pass on the fiscal mismanagement of this government to our cities by cutting back on the transfers, as appears to be the case.

The same logic applies to hospitals and universities. Wage restraints are one thing, but if we are serious about economic recovery, we need even greater research and spending in these vital areas. We need improved health care services and increased numbers of highly skilled graduates from the post-secondary sector. These institutions are an investment in a better future and they have to be strengthened now.

My colleague the member for Hamilton Centre (Ms. Copps) addressed some of these matters in a report some time ago. Let me take, for example, the shortage of chronic care beds.

If we are going to embark on a program to supply 1,800 new chronic bed facilities, not only will this alleviate the overcrowding in our hospital system, not only could we supply the chronically ill with facilities better suited and less expensive than those they occupy at present in our active bed facilities in our hospitals, but we will also induce more employment among health care personnel, not to mention spinoffs, such as construction jobs and soon. The cost would fall in the range of savings I have already referred to.

Finally, let me say just a brief word about my friends to the left, the NDP. They are on the horns of a terrible dilemma. They keep yapping about interest rates. First of all, they do not understand them, they have no control over them and that is their principal thrust. They are on the horns of a dilemma. On one hand they want to appeal to the moderate people in this province, and I can understand that. I can understand why their leader said on television the other night that he was in favour of restraint. It was a new twist for Socialists, but given what the polls are saying, I can accept their obvious desire to tread lightly on this issue.

They are in a terrible position. I can understand why the same economic recovery program that cost more than $1 billion a few months ago is now suddenly self-financing. I want to congratulate them for the spectacular, if half-hearted, effort made to carry the banners of their union bosses who installed them. Political debts tend to last and last and last.

Unlike the NDP, it is our intention to support this first step. But it is only a first step and a flawed one at that. It gives us our first real chance to bring recovery within reach. My party will push for changes in the restraint program which will add to its equity and to its impact. I repeat, we will be pushing hard for the second stage.

We need an ambitious economic recovery program now. Otherwise this five per cent program will merely become a gimmick to deflect the heat of economic mismanagement and profligate waste. Governments have been handling our economy for too long in that manner. People have a need for real and lasting solutions that all of us together have to deliver.

Mr. Foulds: Mr. Speaker, I rise in a mood of mixed emotions. I find myself angry, frustrated and, as my colleagues find themselves, determined. I want to put the government and, if I may say so, the wishy-washy balancing act of a bush-league Joe Clark with glasses, the Leader of the Opposition (Mr. Peterson), on notice that this caucus intends to fight this legislation every single step of the way.

We intend to engage in a parliamentary battle the likes of which this parliament and this Legislature has seldom seen. Why do we come into this House in such a mood of anger and determination? I tell you very simply --

Mr. Kerrio: God knows; God only knows.

Mr. Foulds: Yes, my flippant friend, the member for Niagara Falls, God does know. The member may not know, the clowns in the Liberal Party may not know, but the people of this province and the people in this party know this legislation, very simply put, is authoritarian, insensitive and ruthless.

In the person of Jack L. Biddell, it creates a czar with rights and privileges that Louis XVI would have envied. This legislation reaches destructive tentacles down into the smallest municipality, the smallest children's aid society and the smallest hospital or child care facility in this province. To the men and women working there -- the cleaners, the food service employees, the snowplough operators -- it says, "We have an economic mess in this province and that economic mess is your fault."

This legislation is find-a-scapegoat legislation. One only has to look at the

schedule attached to the back of the legislation to see who this government believes the scapegoat should be. It is arbitrary legislation forced and produced by the mentality of a frightened and vulnerable Premier (Mr. Davis) who has had his finger up in the air for several months testing the winds of political opinion just to see which way they are blowing. It is legislation that does not solve or even begin to come to grips with the serious economic problems facing the province.

4:30 p.m.

Let me just sketch a bit of background to put in context our arguments on this particular bill. Very simply put, in 1982 Ontario is in the midst of a depression. We like to use the word "recession," but by any other name, aside from the crash of 1929, the economic circumstances in 1982 in Ontario are the same as in the 1930s. There is high unemployment, people are losing their homes, their farms, their marriages and their families. Very simply, we are solidly in the midst of a depression.

Let us take a quick look at the unemployment figures. There were 689,000 people out of work in Ontario in August. Of the women in the Ontario work force, 11.2 per cent are out of work. We have a youth unemployment rate of 16.1 per cent. Looking at the cities across the province, my home town of Thunder Bay has an unemployment rate of 10.1 per cent, and it is one of the best off. It goes from that to St. Catharines and Niagara at 12.4 per cent, to Hamilton at 13.1 per cent and to Oshawa at 11 per cent. Sudbury, the mining capital of Ontario and once the mining capital of the world, has an unemployment rate of 26.9 per cent. That is scandalous.

Several years ago, we had similar layoffs. A cabinet committee was appointed to look into the serious situation of all the one-industry towns over northern Ontario and it did nothing.

Mr. Martel: It did not even meet.

Mr. Foulds: It did not even meet, as my colleague the member for Sudbury East knows all too well. If I may say so, it was a committee set up by the Tories simply as a cosmetic measure and, because they did nothing, the situation comes home to haunt them.

The statistics roll off the tongues of politicians and economists alike, but behind every one of those statistics is a man, a woman and several children who face a depression in the very real sense of the word, in unemployment and poverty.

I want to talk about poverty for a moment. Over the past year, no steps have been taken by this government to increase the spending powe