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April 17, 1979

31st Parliament, 3rd Session

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Hansard Transcripts

Hansard Transcripts

L023 - Tue 17 Apr 1979 / Mar 17 avr 1979

ESTIMATES

VISITOR

INTRODUCTION OF NEW MEMBERS

PROVINCE OF ONTARIO

PROVINCE OF ONTARIO

STATEMENTS BY THE MINISTRY

BAPTISTE LAKE RESCUE

FLOOD DAMAGE

ORAL QUESTIONS

DISASTER RELIEF ASSISTANCE

NUCLEAR PLANT SAFETY

HEALTH SERVICES

FOOD PRICES

HYDRO TRANSMISSION LINES

GLANBROOK LANDFILL SITE

THAMES RIVER FLOODING

FOREIGN PURCHASES OF AGRICULTURAL LAND

AID FOR ELDERLY

DISCRIMINATION IN HIRING

FLOOD RESCUE

MINING TAX

MINING EXPLORATION

DISPOSAL OF HAZARDOUS WASTES

REPORT

STANDING ADMINISTRATION OF JUSTICE COMMITTEE

MOTION

COMMITTEE SUBSTITUTION

INTRODUCTION OF BILLS

FUNERAL SERVICES AMENDMENT ACT

ONTARIO HYDRO ACCOUNTABILITY ACT

EMPLOYMENT STANDARDS AMENDMENT ACT

ANSWERS TO QUESTIONS ON NOTICE PAPER

ORDER OF BUSINESS

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

ROYAL ASSENT

ESTIMATES, MINISTRY OF GOVERNMENT SERVICES

The House met at 2 p.m.

Prayers.

ESTIMATES

Hon. Mr. McCague: Mr. Speaker, I have a message from the Honourable the Lieutenant Governor signed by her own hand.

Mr. Speaker: Pauline M. McGibbon, the Lieutenant Governor, transmits estimates of certain sums required for the services of the province for the year ending March 31, 1980, and recommends them to the Legislative Assembly, Toronto, April 17, 1979.

VISITOR

Mr. S. Smith: Mr. Speaker, on a matter of minor privilege: I want to call the attention of the members of the House to the presence in the gallery of a good friend and former colleague of all the members here, Mr. Ed Good, the former member for Waterloo North.

INTRODUCTION OF NEW MEMBERS

Mr. Speaker informed the House that the Clerk had received, and laid upon the table, certificates of by-elections in the electoral districts of Scarborough West and Wentworth.

Electoral district of Scarborough West:

R. F. Johnston.

PROVINCE OF ONTARIO

This is to certify that in view of a writ of election dated February 19, 1979, issued by the Honourable the Lieutenant Governor of the province of Ontario and addressed to Mrs. Muriel Neundorf, returning officer for the electoral district of Scarborough West, for the election of a member to represent the said electoral district of Scarborough West in the Legislative Assembly of this province, in the room of Stephen Lewis, Esquire, who, since his election as representative of the said electoral district of Scarborough West, has resigned his seat, Richard F.

Johnston, Esquire, has been returned as duly elected as appears by the return of the said writ of election, dated April 14, 1979, which is now lodged of record in my office.

(Signed) Roderick Lewis, Chief Election Officer; Toronto, April 17, 1979.

Richard F. Johnston, Esquire, member-elect for the electoral district of Scarborough West, having taken the oaths arid subscribed the roll, took his seat.

Electoral district of Wentworth: C. Isaacs.

PROVINCE OF ONTARIO

This is to certify that in view of a writ of election dated February 19, 1979, issued by the Honourable the Lieutenant Governor of the province of Ontario and addressed to Mrs. Mary Wiebe, returning officer for the electoral district of Wentworth, for the election of a member to represent the said electoral district of Wentworth in the Legislative Assembly of this province, in the room of Ian Deans, Esquire, who, since his election as representative of the said electoral district of Wentworth, has resigned his seat, Colin Isaacs, Esquire, has been returned as duly elected as appears by the return of the said writ of election, dated April 14, 1979, which is now lodged of record in my office.

(Signed) Roderick Lewis, Chief Election Officer; Toronto, April 17, 1979.

Colin Isaacs, Esquire, member-elect for the electoral district of Wentworth, having taken the oaths and subscribed the roll, took his seat.

STATEMENTS BY THE MINISTRY

BAPTISTE LAKE RESCUE

Hon. Mr. Auld: Mr. Speaker, I have the pleasure of informing the members of still another act of bravery and resourcefulness by another member of our staff, Frank Hicks.

Mr. Hicks was instrumental in the rescue of one of five men when their snowmobile went through the ice on Baptiste Lake, in the Bancroft district, on March 31. Mr. Hicks, who is a fisheries biologist in the Algonquin Park district, was off duty and spending the weekend at his cottage by Baptiste Lake, northwest of Bancroft. Later that Friday evening, after the 11 o’clock news, Mr. Hicks retired. He had earlier heard two snowmobiles cross the lake and stop at a neighbouring cottage. It was near midnight and he heard the two machines start up for the return trip across the lake.

Moments later he heard a third machine starting at his neighbour’s, and, suspecting something might be wrong, got out of bed and watched his neighbour’s machine go out on the lake. When the tail light dipped suddenly and disappeared he knew the machine had gone through the ice. As it happened, the third machine had been going to the aid of the two men with the first two machines, which had also broken though the ice. In all, three snow machines and five men were in the frigid water of Baptiste Lake.

Mr. Hicks dressed hurriedly, grabbed a flashlight and part of a wooden extension ladder, and made his way out on the ice to the shouting victims who were about 200 yards from shore. By the time he arrived one man had got onto the ice and was making his way back to the cottage, and two other men were out of the water and trying to rescue a fourth.

Mr. Hicks fell through the rotting ice in the darkness and the fog, but managed to reach the pair and help pull the fourth man out. He told him to make for the cottage and set about to rescue the remaining fifth man who was some distance away and separated by open water. Mr. Hicks returned to shore to get his canoe and could not locate the paddle. He launched the canoe and used the ladder to paddle kayak-style to where he had last seen the remaining man in the water. As he was trying to rescue him the canoe capsized and Mr. Hicks was thrown into the water.

Using the ladder he clambered onto safe ice, emptied his canoe and launched it again. Using the ladder to steady the canoe, Mr. Hicks managed to pull the fifth man into the canoe.

The unfortunate victim had been in the water for almost half an hour and was nearly exhausted. To reach safe ice, Mr. Hicks had to make several attempts to force his canoe to override the edge of the shore before succeeding. Once on firm ice he used the canoe as a sled and dragged the man to shore.

Frank Hicks is 33 years of age, married, with three small daughters. He acted without hesitation in going to the help of the victims of a potentially tragic accident in which he might well have lost his life. Indeed, others close to the scene have commented that Mr. Hicks could have lost his life during his rescue attempts.

I am sure that honourable members will share the pride I feel that in the Ontario government service we have such splendid and selfless people as Frank Hicks of Whitney and pilot Bob Grant of Kenora whom I commended in the Legislature on March 29.

FLOOD DAMAGE

Hon. Mr. Auld: Mr. Speaker, I have another brief statement in connection with flooding in southwestern Ontario.

The Easter long weekend brought more flooding problems to southwestern Ontario. I would like to bring honourable members up to date on what has happened, and also what we expect will happen in the next 24 hours.

Mr. S. Smith: Excuse me, Mr. Speaker, I am having trouble hearing the member and I haven’t a copy of his statement.

Oh, here is the copy, thank you very much.

Hon. Mr. Auld: Mr. Speaker, this was compiled just after lunch.

Based on information from the staff of the Lower Thames Valley Conservation Authority, I can say I am cautiously optimistic that the flood crest which is passing through Thamesville now will not cause serious flooding in the Chatham area later today. I am also cautiously optimistic that the dikes along the lower Thames, including the sections where we experienced problems last month, will hold.

I would like to mention that the people of south Chatham have already experienced serious flooding this weekend. We understand that more than 200 homes have suffered water damage as a result of heavy runoff from McGregor and Indian Creeks. The flooding in this area was as serious as it was in 1968 -- the worst flood year in south Chatham. We fully sympathize with residents in the south Chatham area who we understand suffer damp basements almost every spring.

Let me review quickly what happened and what we expect. Between 1 p.m. Friday and 1 a.m. Saturday at least 50 millimetres -- that is about two inches -- of rainfall were recorded in some parts of southwestern Ontario. The soil in that area was already saturated. Any additional moisture simply runs off. The effect of that runoff from small creeks and feeder streams was felt in the main waterways on Saturday and Sunday. During this time the Ministry of Natural Resources advised the following conservation authorities that they might experience some trouble: St. Clair, Ausable-Bayfield, Kettle, Catfish, Upper Thames, Lower Thames, Saugeen Valley, Maitland Valley, Grand and Nottawasaga.

[2:15]

Water levels in the smaller watersheds peaked on Saturday morning. Water levels in the lower reaches of the Grand peaked on Monday. Some flooding had already occurred at Galt (Cambridge), Brantford and New Hamburg on Saturday and Sunday. There was also some flooding at Dresden and Wallaceburg.

We are paying particular attention today to the Lower Thames area. There is now a crest of high water passing through Thamesville. This crest is flowing at a rate of 27,000 cubic feet per second. The rate of flow during last month’s flooding was 30,000 cubic feet per second. Conservation authority flood forecasters here in Toronto tell me that this particular crest has flattened out. They expert this flattened crest to reach Chatham at approximately 10 o’clock tonight and Dover township 12 hours later. I repeat, we are cautiously optimistic that no serious flooding will occur in these areas.

Elsewhere in the province, in the Sudbury area 55 millimetres of rain have fallen, but as yet we haven’t received any reports of flooding. Lesser amounts of rain have fallen throughout central and eastern Ontario, but we do not expect problems in those areas.

ORAL QUESTIONS

DISASTER RELIEF ASSISTANCE

Mr. S. Smith: If I may, I would direct a question to the provincial Treasurer, Mr. Speaker, following the information which the Minister of Natural Resources was kind enough to give us on the recent flood situation.

Is the Treasurer prepared now to accept some of the suggestions that have come from this side of the House and elsewhere to set up a proper disaster relief fund in Ontario, and not one that depends on the government’s being able to match the contribution within a local municipality, given that flooding has become a rather regular and widespread occurrence and given that not every municipality has the same capability of fund-raising within its own local area? Does the Treasurer not think that a disaster relief fund which did not depend on the matching grant formula would be a fairer and more reasonable and equitable way to do things?

Hon. F. S. Miller: I thought for a moment the member was raising funds for his party.

Mr. J. Reed: You really don’t take it seriously, do you?

Hon. F. S. Miller: I am sure the government would be glad to review the kinds of relief we have for disasters in the province. Yet, generally speaking, I feel that the form of assistance has been fair in the cases where it has been required. The member made the comment that we are having floods more frequently or on a regular basis. I think he used words to that effect.

Mr. S. Smith: It was more regularly than frequently.

Hon. F. S. Miller: I was going to say that certainly the experience with the various conservation authorities would show that with minor exceptions the efforts that have been taken, particularly in southwestern Ontario, have been very useful. I have had some exposure to that, as the member knows.

While we lack them in several areas, the Upper Thames River Conservation Authority, I believe, is studying the Glen Gowan dam proposal at this point and a few others of that nature. Generally speaking, these efforts have really minimized insofar as possible the overall risks in those parts of the province subject to flooding.

The Chatham-Kent area, and I am sure parts of Essex, are particularly subject to flooding. In fact, if one used flood-plain criteria such as we use in other parts of the province, my recollection is that they would all fall below the requirements of the floodplain criteria. Therefore, we have a particularly difficult situation in those parts of the province.

Mr. S. Smith: By way of supplementary: in addition to changing the disaster relief fund from a matching grant formula to a more direct grant basis, would the minister consider a government-run flood insurance scheme, in which part of the premium would be paid by the government on the equivalent basis of what it now pays for disaster relief, while the remaining part of the premium would be paid by the people who would be receiving the insurance?

Hon. F. S. Miller: I would never reject out of hand any useful proposal. I don’t know whether that has been considered before or not. Rather than simply saying yes or no, I’d be glad to check into it.

Mr. Yakabuski: Supplementary: If the Treasurer is considering a change in the formula insofar as disaster funds in this province are concerned, would he also give consideration to changing the formula that might apply to Renfrew county with regard to the snow damage that destroyed so many farm buildings this past winter?

Hon. F. S. Miller: That was not only in Renfrew county. I would suspect that my own constituency had a good deal of snow damage. I learned, much to my surprise, that that now appears to be an insurable risk in certain policies. Therefore, if it is, I would think it is best to let the individual make the decision.

Mr. Mancini: Supplementary: If the Treasurer is going to look into aspects of these disaster funds, I wonder if he would consider making available low-interest loans to some municipalities which feel that matching dollar for dollar in a disaster-type fund might not be adequate, but a low-interest loan from the government of Ontario might be more adequate. Would he also look into that area?

Hon. F. S. Miller: I would have to check the details of the two kinds of relief we have. It seemed to me that the fundamental part of shoreline protection was that approach, where the interest rates were either lower or very low. Again, I’m not saying anything will happen. I’m simply saying I would be pleased to look at these kinds of programs to determine if they’re adequate, and if they are --

Mr. Nixon: Supplementary: Is the Treasurer able to recall the situation where the government was able to send aid to the victims of the fire in Cobalt, without using the normal procedure of meeting dollar for dollar the funds raised locally? Would he not appreciate that in certain natural disasters the dollar-for-dollar formula serves the government, but does not serve the people who must either rebuild or replace the property they have lost and that, therefore, it is necessary to have a program that meets the actual needs of the community?

Hon. F. S. Miller: I think I answered the suggestion earlier when I said I’d be glad to look at it.

Mr. S. Smith: Have a flood before an election.

Hon. F. S. Miller: I can’t recall exactly how the moneys to Cobalt were handled. I recall the fire very well. I think it was in June 1977.

Mr. Bolan: It was during an election campaign. That’s why you gave the money.

Mr. Nixon: You are prepared to play politics with anything.

Hon. F. S. Miller: Or anyone.

Interjections.

Hon. F. S. Miller: At that point I believe we diverted all of our fire bombers --

Mr. Warner: You are going to study it. You would send Al Capone to study the banks.

Hon. F. S. Miller: -- from a very bad fire in the Cobalt area -- in fact, it got out of control as a result of that action -- to save what parts of the community we could. In the case of that kind of action, that was a terrible fire at a very hot and windy time, if I recall.

Mr. S. Smith: Is the Treasurer referring to the election campaign? It was a hot and windy time.

Hon. Miss Stephenson: It was hot and windy because the Leader of the Opposition was there.

NUCLEAR PLANT SAFETY

Mr. S. Smith: Mr. Speaker, may I ask a question of the Minister of Energy? I guess this is a kind of supplementary question to the discussion we had a few days ago about the Babcock and Wilcox boilers which were returned.

Can the minister provide further details, which he said he didn’t have at the time, concerning how the inspection was done, an inspection which apparently allowed these boilers to be installed and only later discovered the problems in the tubing? Can the minister tell us what are the costs involved in this regard that might have to be picked up by Hydro?

How could the inspector, on behalf of Hydro, have missed the error in the first place? Is this not a serious oversight from a technological point of view? Will we be getting further details from the minister?

Hon. Mr. Auld: Mr. Speaker, answering the last part of the question first, yes, we will. I have not seen the interior of one of those boilers, but I can send the Leader of the Opposition a sketch. It’s a very complex and large mechanism. Certain tests are done, I assume, at the factory. Certain other tests are done by Hydro when the unit reaches the site and further testing has been going on of specific boilers because of various anomalies that may have been detected, or the fact that the testing process by Hydro, as I mentioned, is a very lengthy and cautious and careful process.

It actually took several months to get to the point which Hydro did -- I guess it was mid-December when it suggested that manufacturing on the remaining numbers cease until further and more detailed testing was done, which I believe eventually involved the taking apart of one of the units to check the inside.

I will send the Leader of the Opposition a sketch showing this, and I will attempt to get the detailed information for him as to the methodology as soon as I can, although I am not sure that all the tests have been completed.

Mr. Warner: Right; the minister should study the boiler from the inside.

Hon. Mr. Auld: As far as the matter of cost is concerned, as I mentioned, this is a matter of discussion between Hydro and the supplier, and apparently Atomic Energy of Canada Limited which is also involved and was involved in the design. It may take some time to resolve this matter. I will not speculate, but I think there are a number of costs involved and some of these may be expected by Hydro to be borne by the manufacturer and, conversely, expected by the manufacturer to be the cost of Hydro or Atomic Energy of Canada Limited.

Mr. Warner: This is nothing, wait until supplementary time.

Mr. Mattel: Would the minister repeat that answer?

Hon. Mr. Auld: After I’ve seen Hansard.

Hon. Mr. Welch: It is in Hansard.

Mr. Grande: Does the minister mean that Hansard picked it up?

Mr. S. Smith: It’s with the greatest of trepidation that I hazard a supplementary question.

The minister will appreciate that bent, pinched or narrow tubes seem rather fundamental to a boiler. Could the minister therefore explain how it is that these tubes could have escaped the notice of Hydro until the installation had taken place and that only then, at that point, did it realize that this very fundamental deficiency existed? The whole thing had to be disassembled, taken out; and now there is a dispute, I take it, regarding tens of millions of dollars of cost as to who pays for the taking out and reinstallation of the boilers. How could Hydro have missed in the inspection the fundamental problem with the tubes right from the beginning?

Hon. Mr. Auld: I was going to say unfortunately, perhaps I should say fortunately, I don’t have the details. I have the wrong book for the details today.

Mr. Nixon: The minister left the details book at home today, did he?

Hon. Mr. Auld: A possible, very simple explanation which I understand --

Mr. McClellan: Possibly an explanation?

Hon. Mr. Auld: -- is that previously the tubes, of which there are several hundred and which are inside a thing called the moderator, were heat treated, and the rest of the structure was heat treated, and then the tubes were welded into the other structure. It may be that in these ones -- as I mentioned it’s a different metal too -- when they were assembled and then heat treated it was in the method of heat treating.

Mr. Laughren: Are you Tory backbenchers following this?

Mr. Turner: Are you?

Hon. Mr. Auld: Would the Leader of the Opposition like me to continue?

Mr. Nixon: I’m sure the minister could.

Mr. S. Smith: Did they meet Hydro specifications when they left the plant?

Mr. Turner: Listen to this, Floyd.

Hon. Mr. Auld: I’m sure the specifications didn’t change. It’s what happened inside the boiler that may have changed.

Mr. M. Davidson: A supplementary: Can the minister confirm that the damage to the tubes resulted primarily from a change in method of process, a method of process that was being carried out by Babcock and Wilcox, and on instructions from either Atomic Energy of Canada Limited or Ontario Hydro to Babcock and Wilcox the method of process be changed?

[2:30]

Hon. Mr. Auld: I can’t confirm that, because I have read that Babcock and Wilcox indicated there had been some change in the specifications, not put forward by B and W, but recommended by either the customer or Atomic Energy of Canada Limited.

Mr. Speaker: Final supplementary, the member for Halton-Burlington.

Mr. J. Reed: When the minister is apprising himself of the facts surrounding the inspection and standards expected by Ontario Hydro, would he also do a comparison as to the method of approval used by Hydro right now, as opposed to the way it was seven or eight years ago when Hydro inspectors actually went into the processing plants? At that time they took for testing samples of the castings that were being poured and their related ingots. Would the minister find out if in fact they still do that kind of thing; or are they now relying more on what is being told them from a distance?

Hon. Mr. Auld: It would seem to me there is a great opportunity for honourable members to get the technical details first hand, because, I believe Hydro will shortly be appearing before the select committee to answer questions about its safety program. If there are questions unanswered at that time, I will be delighted to try to get the answers and relay them to the House; although I do think it would be more effective to get them directly from the technical people involved.

HEALTH SERVICES

Mr. Cassidy: I have a question for the Minister of Health arising out of questions I put to the Premier (Mr. Davis) last week. The Premier said last week that the minister would endeavour to find a solution to the problems facing people in Windsor, where the only two neurosurgeons have both opted out of the Ontario Health Insurance Plan. One of these neurosurgeons is now charging rates that are almost double the OHIP rate.

Hon. Mr. Timbrell: Mr. Speaker, first of all, I think the principles as outlined in my statement of March 29 are very clear. With respect to in-hospital care, the principle that applies is that the services will be available at the OHIP rates. As regards other aspects, where the patient has not agreed beforehand he does not pay. I have not had any report back on that particular situation.

The member might be interested to know that just about a year ago right now the concern being expressed in the city of Windsor was that it was not going to have any neurosurgeons at all. The concern a year ago was that the elder of the two gentlemen was going to retire and leave the practice of medicine completely, and that the younger one was going to leave the city. There was very real concern that in emergencies people would have to go to Detroit.

It was with that in mind, being very much concerned about providing incentive to keep neurosurgeons there, that I approved putting a CAT scanner in Windsor as an inducement to retaining their neurosurgical expertise in the area, or to recruit others if in fact either of those gentlemen, for whatever reason, did leave their practices in that community.

Mr. Cassidy: The minister hasn’t answered the question at all. He says his agreement only covers in-hospital care and he hasn’t said how it relates to care in the offices. Since one of the doctors in question, Dr. Kleider, the elder of the two, has said that he has doubled his rates in an effort to force the Ontario government to put doctors on salary --

Hon. Miss Stephenson: Oh, come on; you’ve got to be kidding, you really have to be kidding.

Mr. Cassidy: -- can the minister explain why the government is not providing this alternative for doctors who wish to practise medicine this way; and why the government instead is sticking so rigidly, and only, to the fee-for-service system?

Hon. Mr. Timbrell: Mr. Speaker, we do have salary arrangements through the hospitals, for instance for emergency services; there are a number of hospitals in the province where the emergency departments are operated by groups of physicians on a contractual basis. I would not be opposed at all to considering that kind of arrangement, if the doctor wants to propose that through the hospital in which he has privileges and if they want to put it forward to us.

Mr. B. Newman: Mr. Speaker, a supplementary: I was going to ask exactly the same question the member asked of the minister. I wonder if the minister would consider having him put on staff at one of the hospitals and put on salary?

Hon. Mr. Timbrell: Mr. Speaker, each physician of course deals with individual hospitals on the question of hospital privileges. It so happens the Hotel Dieu of St. Joseph is the centre for neurosurgical services in that community; that is where the new CAT scanner is going to be located. All I am saying is, if those physicians want to put together a proposal through that hospital, I am quite prepared to entertain it.

Mr. Cooke: A supplementary, Mr. Speaker: Is the minister aware that both these neurosurgeons in Windsor have sent out letters to all general practitioners in the Windsor-Essex area telling them that if there is any hardship on the patients they are to contact the doctors and more or less plead their case for charity medicine in the city of Windsor? Does the minister approve of that kind of process?

Instead of giving us all this waffling, as he has done today, what is the minister prepared to do? The facts are clear. What is the minister prepared to do to guarantee neurosurgical service in offices and hospitals in Windsor?

Hon. Mr. Timbrell: Mr. Speaker, one possibility would be to introduce what has been proposed by the Ontario Medical Association, namely patient streaming and balanced billing. If the honourable member is saying his party now believes in patient streaming and balanced billing, that is an interesting revelation.

Mr. Warner: What are you going to do?

Mr. Breaugh: Is that your answer?

Mr. Cooke: You are a disgrace.

Mr. Martel: You are digging yourself in.

Mr. Cassidy: Every day we lose a bit more of the health system in Ontario, and it is because of that minister and that government.

Hon. Miss Stephenson: Balderdash! The only people who are destroying the health care system are the NDP.

Mr. Martel: Oh, yes. We are in power!

FOOD PRICES

Mr. Cassidy: Mr. Speaker, I have a question for the Deputy Premier and Provincial Secretary of Justice.

Since the price of beef has gone up by 24 per cent in the three and a half months since the government promised action to monitor the outrageous food prices we are having today, and since food prices are now running at 21 per cent higher than a year ago, could the Deputy Premier tell us when we can expect some action from the government to protect consumers from the seemingly relentless increase in food prices which is going on week after week and month after month across the province?

Hon. Mr. Welch: Mr. Speaker, I must apologize for the fact that my colleague the Minister of Consumer and Commercial Relations (Mr. Drea) is not here. No doubt he is out giving some thought to that particular question now.

There was, as the honourable member will know, some reference in the speech from the throne with respect to that ministry having some responsibilities to monitor that; and certainly when the minister gets back he will no doubt be able to respond more fully to that question.

Mr. Cassidy: Is the Deputy Premier aware of the existence of the group Women Against Rising Prices, a group which was established in the backyard of the Premier (Mr. Davis) himself because of concern over the inaction of the government in terms of not just monitoring prices but also rolling them back?

Is the Deputy Premier aware that this week the group has called upon consumers across the province to boycott flour because its price has gone up by half in the course of the last three months?

Is the Deputy Premier aware that the group is now calling upon consumers across the province to boycott chicken because the price of chicken has gone up by a third over the course of the past year?

Does the Deputy Premier not think it about time for the government to step in, rather than making ordinary consumers do the work of the government for it by having to step in because of the inaction of this government?

Hon. Mr. Welch: Mr. Speaker, while the member is looking at his notes for a supplementary question, I should point out that the Minister of Consumer and Commercial Relations did not have to wait for any organization of women to remind the people of this province of the power of the consumer in the marketplace; indeed, his record speaks fairly clearly on that matter.

Mr. Foulds: Give us one concrete action he has taken.

Hon. Mr. Welch: I am aware of all of the concerns. I did not have to have an organization of women to tell me; my wife has been telling me that all weekend.

HYDRO TRANSMISSION LINES

Mr. Stong: Mr. Speaker, a question of the Minister of Energy: Now that the southern three municipalities in the regional municipality of York, namely, Markham, Vaughan and Richmond Hill, have passed a resolution calling for an environmental assessment study of the 550 kilovolt transmission line through their area, would the minister exercise his discretion and grant them this much-sought-after impact study?

Hon. Mr. Auld: Mr. Speaker, as I recall, the part of the transmission line that is in the parkway belt could not be moved outside the parkway belt without really starting from scratch. However, I will be delighted to look into the honourable member’s suggestion, although I think that, legally, it is not possible in part of the route. There would be no point in doing an assessment unless there was going to be a change which could not be achieved otherwise.

As the honourable member is aware, the parkway steering committee has been looking at a

section of the line, has been in touch with the municipalities, has had several public information meetings, has been in touch with the members involved, and is expected to report very shortly. When we have seen that report, then we would be, again, in a better position to judge what the next step would be.

GLANBROOK LANDFILL SITE

Mr. Isaacs: Mr. Speaker, I have a question for the Minister of the Environment. With regard to the hearings that are going on in Glanbrook under the Environmental Protection Act, could the minister explain why his staff are participating in those hearings in support of the application for a landfill site when it is the responsibility of the board to make a recommendation to the director, and hence to the minister, concerning the disposition of the region’s application for a dump? Does the minister not agree that participation by his staff in support of the application suggests prejudice on the part of the ministry?

Mr. MacDonald: That’s what I call a sharp question.

Hon. Mr. Parrott: I wonder who prepared it for him.

Mr. Cassidy: How much does the minister’s speech writer get?

Mr. MacDonald: That’s why he got elected.

Mr. Speaker: The question was fairly direct; it is to be hoped the answer will be equally so.

Mr. Cassidy: Who wrote Gordon Dean’s speeches?

Mr. Laughren: What a cheap shot.

Mr. Cassidy: When in doubt, bluster.

Mr. Speaker: Order.

Hon. Mr. Parrott: It is an interesting experiment with which the member has started off his career, and I am sure he sees that his party is perhaps more interested in the question than it is in the answer.

Mr. Laughren: What a silly man you are.

Mr. Cassidy: Withdraw your staff from the hearings now if you want to be impartial. Withdraw your staff now, that is what you should do.

Mr. Speaker: Order.

Hon. Mr. Parrott: Mr. Speaker, if we should withdraw our staff from the hearing, I am sure the first thing we would hear is that we refused to put forward any information that might help. It is so typical of the position; regardless of what stand this ministry and its staff will take we will be subject to criticism, that is normal for the course.

However, I think we can be at those hearings without showing a bias for or against. We have an obligation to put as much information forward for the environmental assessment hearings as is possible. We want those decisions to be made based on facts, not emotions. That’s why we are there, trying to put facts forward that will allow the assessment board to make a valid decision.

[2:45]

Mr. Isaacs: Supplementary, Mr. Speaker: Given the minister’s non-answer, will he assure this House the services of his staff will be made available on an equal basis to those who oppose the landfill site on environmental grounds, as they are being made available to the proponents to the site?

Mr. S. Smith: You wouldn’t want them, they wouldn’t be much help.

Hon. Mr. Parrott: Mr. Speaker, we are prepared to put as much information forward as we have. It matters not whether it supports the application or is in opposition to it. Our attempt is to put forward the information. We don’t have a closed mind on the value of that site like the members opposite have.

Mr. Foulds: You have a closed mind and an open mouth; you are a bad loser.

Mr. Cunningham: I would like to ask the minister, recognizing this proposed site involves 550 acres much of which is very good farm land, if this is not in his view a case for consideration under the Environmental Assessment Act what is?

Hon. Mr. Parrott: No one questions whether or not we should have an environmental assessment; that was our position. I don’t understand the question; of course we believe it should have an environmental assessment.

Mr. S. Smith: Under which act?

Hon. Mr. Parrott: Well I am not sure it matters.

Interjection.

Hon. Mr. Parrott: Sometimes it is wise, I would say to the member for St. George, to wait until the full sentence is completed.

Mr. S. Smith: What is the point of having an Environmental Assessment Act?

Hon. Mr. Parrott: I am not sure that in this particular case, given the broad parameters under which the board always hears matters, whether it’s under the Environmental Protection Act or the Environmental Assessment Act, that there’s any real difference. The board has not limited discussions to the pure technical aspects of the matter. It has heard the broad concept, as it would under the Environmental Assessment Act; therefore it makes very little difference which act it is heard under. There is a difference in the appeal procedures but not in the hearing procedures.

THAMES RIVER FLOODING

Mr. Watson: Mr. Speaker, I have a question for the Minister of Natural Resources.

Mr. Speaker: Will the Minister of Natural Resources come to order?

Mr. Watson: I guess he is the Minister of Energy at the present moment. I appreciate very much the statements the minister released today on the flood conditions, but I do have a question. There have been, from time to time, proposals for a dam on the Kent system to prevent such floods from happening. It is my understanding about two thirds of the water that goes through Chatham does not now go through any restraining system. Would the minister consider some type of study or some kind of investigation into a dam, and specifically the Wardsville dam that has been proposed? Could that be looked into again?

Hon. Mr. Auld: Mr. Speaker, I believe the Thames River study did recommend the possible construction of two other dams below Glen Gowan. One was to be located at Thamesville or at Wardsville. Apparently the soil conditions at Thamesville were not adequate for a dam, consequently Wardsville would be the choice. However, the Wardsville dam would not be effective, as I understand it, until the Glen Gowan dam is completed. At the moment there is an environmental assessment in progress about the Glen Gowan dam.

We expect that to be completed very shortly and then there will be a decision taken about proceeding with the Glen Gowan dam. I will attempt to get for the honourable member the latest information about Wardsville, although my understanding is it would not be effective, as I said at the outset, without the Glen Gowan dam.

FOREIGN PURCHASES OF AGRICULTURAL LAND

Mr. Riddell: I have a question for the Minister of Agriculture and Food on the business of foreign investment in land, which doesn’t seem to excite him too much. Would it cause the minister concern if I told him that just recently $45,000,000 in German money has been transferred to banks in Huron county and surrounding areas to be used for the purchase of farm land and that that represents somewhere in the neighbourhood of 30,000 to 40,000 acres?

Hon. W. Newman: I am always concerned about agricultural land and its proper use in this province.

Mr. Martel: That is why you didn’t follow up the resolution by the member for Timiskaming (Mr. Havrot).

Hon. W. Newman: I pointed out to the member that we were doing an update on Kent county. We are also doing a study on Huron county, which should be completed before too long, and a study on Huron township and Bruce county. We are looking into that request by his seatmate.

If there is this money in the banks that the member is talking about to buy land in Huron county and in other areas of this province, I would like to know to what use that land is going to be put, if foreign interests are buying it, and if they are going to put people on it.

I wouldn’t want to remind the honourable member that in Huron county there is an operation, which I think his seatmate knows very well about. It is a very well-run operation, and representation was made by his own party to release the land transfer tax on that particular property.

I am not criticizing the member, because I think he did the right thing.

Mr. Gaunt: Those people are actively farming the land and are exporting hogs all over the world. That is quite different from absentee foreign ownership.

Hon. W. Newman: Let me say that I am concerned if large tracts of land are being bought. At this point in time, one real estate person writes me a letter or somebody else phones me and tells me they are going to buy a 1,000-acre block here and a 1,000-acre block there and they are taking the going price, whatever price the farmer sets. Until I have some facts and figures in front of me, I want to have a very close look at it and see what those are.

An hon. member: That is too late.

Hon. W. Newman: No, it is not too late at all.

Mr. Riddell: Supplementary: Is the minister aware that at least four other provinces in Canada have passed legislation restricting foreign ownership of land? Is he also aware that just recently the United States government sent out a questionnaire to every landowner in the United States requiring them to disclose who the owner of the land is and whether there is foreign capital in that land? If they fail to provide that information the penalty amounts to 25 per cent of the assessed value of the property. If all these other jurisdictions are concerned, what in the world is it going to take to move the minister?

Ms. Mackenzie: Ontario for sale is government policy.

Hon. W. Newman: To deal with the member’s specific question regarding the US legislation; yes I have read it, I am fully aware of the fact that foreign owners of land must register with a certain agency in the US to acquire it. I am also aware that some of the provinces do have some legislation. The member may forget that we do have a land transfer tax.

Mr. Riddell: Which means nothing.

Hon. W. Newman: That’s the member’s opinion. There is a 20 per cent land transfer tax in the province of Ontario on farm land and recreation land.

By the way, I have read the speech the member gave in the House. I would suggest he check his figures in Hansard, because I think he was misquoted. Outside of that, I would point out that there are a lot of good people buying land and that money is coming from other countries. Many of these foreign citizens are coming here to farm that particular land and many of them are taking out landed immigrant status.

Mr. MacDonald: Supplementary: Would the minister consider making representation to the cabinet for the establishment of an investment review board in the province of Ontario so that we will know what is going on in this gradual takeover of so much agricultural land by foreign interests?

Hon. W. Newman: I just finished saying that we are keeping an eye on the two areas of concern which have been brought to my attention.

Mr. Mackenzie: Branch plant farming as well as branch plant manufacturing.

Hon. W. Newman: We did a study of Kent county when members opposite were making a great deal of noise about the takeover of land in Kent county; it turned out to be about one per cent of the land, and that wasn’t necessarily being taken up by foreign owners. They could have been Canadians who were resident somewhere else -- in the United States or some other part of the world. The member is making a tremendous hue and cry --

Mr. MacDonald: Answer my question.

Hon. W. Newman: I just point out that the member always likes to make a lot of noise about these things. Let’s get the facts and I will make the decisions.

Mr. Foulds: That’s what he asked you.

Hon. W. Newman: I said I will get the facts and make a decision.

Mr. Mancini: Supplementary to the Minister of Agriculture and Food. He informs the House that his staff is reviewing this problem in many parts of Ontario. Does the minister have a specific plan that he would be prepared to implement if his staff finds that foreign ownership of agricultural land in Ontario is very large? Does he have a plan he is prepared to implement?

Hon. W. Newman: We are always looking at plans and programs in my ministry.

Mr. T. P. Reid: That means no.

Hon. W. Newman: We have looked at the foreign ownership of land. From the last survey we did we do not feel there was any major problem to be concerned about at that time.

Mr. MacDonald: It was all gone by then.

Hon. W. Newman: Oh nuts. What does the member know about farming? I have to give him a lot of credit. I say we are watching it very carefully. We have the capacity of the land here to do what we want to.

Mr. Riddell: The select committee of which you were a member made recommendations that the sale be restricted and you dissented.

Mr. Martel: Supplementary: Does the minister not recall a select committee on which the Minister of Correctional Services (Mr. Walker) and a number of his cabinet colleagues served and which called for all land to be sold only to Canadians or landed immigrants, and when does the government intend to move in cabinet to have those recommendations adhered to?

Hon. W. Newman: I believe the member had better read that report again and see what I said at the bottom of that particular page. I think he’d better read that report again.

Mr. Martel: I was there.

AID FOR ELDERLY

Mr. R. F. Johnston: Mr. Speaker, my question is for the Minister of Community and Social Services. Given that many of the alternative-cure experimental projects that are at present provided in communities to support the elderly around the province are fast approaching the end of their initial funding period, can the minister inform the House as to the date or dates upon which these projects will receive confirmation of their 1979-80 funding status? They are all a little nervous about their ability to continue.

Hon. Mr. Norton: Mr. Speaker, in so far as not all of those projects are under the jurisdiction of my ministry, I can only respond for those which are. I cannot give the honourable member a specific date but I can assure him that they will be advised in the very near future as to the future funding that will be available to them.

Mr. McClellan: When is the very near future?

Hon. Mr. Norton: Very shortly.

Mr. R. F. Johnston: Supplementary for the minister: The majority of these projects under his ministry have already been evaluated by his ministry officials. I am wondering whether there is any intention either to duplicate or expand the successful projects, whether he plans just to let them all die and just keep on the present ones at their present level of funding, or is he going to make some sort of major commitment to keeping the elderly in our communities and in their own homes?

Hon. Mr. Norton: Mr. Speaker, I think it is evident from the conduct and attitude and approach of my ministry over the last several years that we do have a major commitment to assist in maintaining the elderly in their own homes or in the community. That is clearly the direction, as I have indicated numerous times, that we are moving in, and that commitment will be maintained throughout this fiscal year and ensuing fiscal years.

[3:00]

DISCRIMINATION IN HIRING

Hon. Mr. Elgie: Mr. Speaker, last Tuesday the member for Middlesex (Mr. Eaton) asked a question regarding the hiring practices of the recreation committee of the city of London. The Ontario Human Rights Commission’s regional supervisor was in touch with the personnel director of the public utilities commission and the human rights officer was advised that this was not the policy of the public utilities commission.

The personnel director himself had just heard the recreation committee was pursuing such a policy and was looking into the matter. He also stated that currently many of the employees of the public utilities commission live outside the London area and he agreed with the human rights supervisor that such a preferential hiring policy would offend the spirit, if not the word, of the Ontario Human Rights Code.

As a result of these discussions and an apparent misunderstanding, I understand that the personnel director of the public utilities commission has issued a memorandum to all branch directors that hiring is to be done on the basis of qualifications and not on the basis of residence.

Mr. Eaton: Supplementary, Mr. Speaker: I have in writing a direction from the public utilities commission stating they will not hire people from outside the city. Would the member take that letter, when I deliver it to him, and see it is followed up on and that the situation is fully corrected, not just indicating that that is not their policy?

Hon. Mr. Elgie: I have been assured that a memorandum has been sent to all portions of that public utilities commission indicating that is not the policy of the public utilities commission.

Mr. Van Horne: Supplementary, Mr. Speaker: I would like to clarify the record in respect to this question. As part of the question, the member for Middlesex asked whether I had anything to do with that policy which is alleged to have been discriminatory. I would submit that the reference to me was for that period of time in which I was the commissioner and also chairman of the public utilities commission.

Mr. Peterson: You did a grand job.

Mr. Van Horne: To support the statement of the minister, and in defence of the commission more than of myself, I would submit that I, personally, have checked with the general manager and I am satisfied there is no discrimination in their policy. I have a copy of his statement to all department heads. Unfortunately the member for Middlesex has in his possession a letter from a constituent of his, a letter which was written by a department head who had not the authority to respond as he did. That department head has been told of his error, and all department heads are now in receipt of a directive from the general manager making it very clear hiring is on competence only and not geography.

Mr. Speaker: That was a statement to correct the record, not a supplementary.

FLOOD RESCUE

Mr. Nixon: I have a question I would like to direct to the Minister of Natural Resources. Is the report I heard on the news over the weekend true that rescue in the London area of people marooned and endangered by flood waters was by an American coast guard helicopter?

Hon. Mr. Auld: I don’t know, Mr. Speaker; I didn’t hear that report. I shall inquire.

Mr. Ruston: Yes, it is true. There was a picture in the paper showing “US Coast Guard” right on the side.

Hon. Mr. Auld: Did the honourable member say the London, Ontario, area?

Mr. Nixon: It was Dorchester.

Hon. Mr. Auld: I am not aware of it. I will inquire.

Mr. Nixon: As a supplementary: Since the veracity, at least, of the report has been confirmed by my colleague, and it was mentioned in a number of news reports, I want to ask the minister if it is not possible the many airplanes and helicopters that come under his jurisdiction could be made available to assist in these flood rescues and flood work?

Does he recall one of the arguments against dynamiting the ice floes in the Grand River that caused flooding was that no helicopter was available except through the OPP and that their helicopter in that area was busy on police work? Does the minister not think that with the scores of aircraft under his control, these aircraft could at least be made available under some circumstances in these weekend floods?

Surely it is ridiculous that our many millions of dollars worth of equipment just sits there idle under these circumstances, and we have to depend on the Americans, who evidently work weekends.

Hon. Mr. Auld: The Ministry of Natural Resources does not own any helicopters. We have two score and a quarter of mainly pontoon-equipped aircraft. We lease helicopters in the summertime and sometimes in the winter for such things as putting radio transmitters on moose and so on.

Mr. G. I. Miller: What about Hydro?

Hon. Mr. Auld: Ontario Hydro have three, I believe, which they use for patrolling the lines. I am not sure they are suitably equipped with windlasses and so on. But I will inquire about the report in the first instance.

Mr. T. P. Reid: The Wright brothers live.

Hon. Mr. Auld: I might say that the Canadian Coast Guard have a number of their coast guard vessels equipped with helicopters and perhaps that’s the area we should be looking to for liaison.

Mr. Nixon: Supplementary: Since there is such concern in these flood communities where neither the conservation authorities nor the Ministry of Natural Resources are doing much but issuing press releases after the flood as to why they can do very little under the circumstances, would he not take the responsibility to see that there is a co-ordination of provincial and federal facilities, municipal and conservation authority facilities so that there is not going to be pressure brought to bear on our citizens who are having to cope with these matters so frequently?

Mr. Breithaupt: Sort of an emergency measures organization.

Hon. Mr. Auld: I expect to be getting recommendations from the committee that I set up about a month ago. I believe their report is in the process of being typed, and we’ll certainly look at that. However, the honourable member knows the primary responding agency in the province for disasters of any kind is the OPP, who have the communications network to do it. We would be looking at any scheme with that in mind.

Mrs. Campbell: Maybe they don’t work on Sunday either.

MINING TAX

Mr. Laughren: Mr. Speaker, I have a question of the Treasurer. Could the Treasurer tell us how he justifies reducing the top marginal tax rate for the mining industry from 40 per cent to 30 per cent, in view of the fact that we already receive only about one half of one per cent of the value of mineral production in Ontario in the form of revenues, a total of about $40,000,000 out of over $2,500,000,000 worth of mineral production, and in view of the fact that when Inco Metals Limited appeared before the layoffs committee last year, they indicated to us quite clearly that the problem with exploration and development and so forth was not the tax rate in Ontario but rather, world markets?

Hon. F. S. Miller: Mr. Speaker, the member is judging the entire metal industry on the basis of one company’s comments. Two things: Last year the federal government, with the help of the 10 provinces, had a sectoral study. That sectoral study specifically looked into the problems of the mining industries in Canada.

One of the recommendations of that sectoral study was that greater uniformity of both taxation and processing allowance criteria be set up within the provinces.

Mr. Laughren: Which you took to mean lower.

Hon. F. S. Miller: In fact, it was requested that there be absolute unanimity across Canada. I think that would be very difficult to achieve in mining taxation as it would in any other form of taxation, whether it be gasoline or income tax, you name it, because individual provinces’ needs vary.

Whether the 40 per cent rate did or did not get used I can’t be categorically correct, but it was very seldom; I believe once, maybe, on Inco. I once said it had never been used but Inco corrected me and said in 1974 or thereabouts it did apply. The fact remains though, that decisions made by mining corporations are often based upon hearsay and upon perceptions, not necessarily upon fact.

Ontario responded to two things in our current budget --

Ms. Gigantes: Especially if the Premier goes around spreading misconceptions.

Hon. F. S. Miller: (1) the recommendations of the sectoral study; (2) the obvious perception abroad that the 40 per cent rate, coupled with a 36 per cent rate, for corporate tax --

Mr. Laughren: That’s nonsense.

Hon. F. S. Miller: -- was very high. I know it’s nonsense --

Ms. Gigantes: Well, you kept saying it was nonsense.

Hon. F. S. Miller: -- in terms of what, in fact, applies. I’m not arguing that. I’m talking about perceptions.

Ms. Gigantes: You have been arguing that for years.

Hon. F. S. Miller: Perceptions are often more important than fact when other people who don’t take the time to check them out hold them.

Mr. Cassidy: Boy, you pander to the preconceptions of the corporate sector.

Mr. S. Smith: You’ve done something meaningless to the tax.

Mr. Laughren: Supplementary: I have some sympathy for a Treasurer who’s whipsawed in such fashion, but I want to ask him how it is that he explains the fact that Saskatchewan -- which has one of the healthiest mining environments in all of Canada -- at the same time received 22 per cent of the value of production to the consolidated revenue fund instead of the one and a half per cent we do here in Ontario?

Further, the Treasurer stated in his budget that many northern Ontario communities depend entirely on the mining industry for jobs. Could the Treasurer tell us how he justifies, when he’s saying that many northern towns depend on mining industry for jobs, a reduction in the top processing allowance which would encourage further processing and, therefore, more jobs in the north? How can he justify how he encouraged, or let stay on the books, the exemption to

section 113 of the Mining Act which says they should process here?

Further, how is it he endorses the whole foreign processing allowance which allows them to write off processing costs against their Ontario operations? How does the Treasurer fit all that into a scheme to create more jobs in the north, given the fact it hasn’t worked in the past and the fact we have a 9.4 per cent unemployment rate in northern Ontario at the present time --

Mr. Speaker: The question has been asked.

Mr. Laughren: -- and 12.4 per cent in Sudbury?

Hon. F. S. Miller: Mr. Speaker, that was a very long, involved question.

Mr. Mancini: It was a statement.

Hon. F. S. Miller: First of all, the processing allowances have to be in harmony with the tax rates. Therefore, if one changes the tax rates, and we did, one has to change the processing allowances. You could have had processing allowances exceeding the tax rate had we not also brought those down because the maximum processing allowance rate was 35 per cent, and the maximum tax rate was 40 per cent. We have brought the processing allowance down so it cannot exceed the maximum tax rate. I hope the member will accept that as a reasonable solution.

Ms. Gigantes: The Treasurer is going the wrong way.

Hon. F. S. Miller: The balance is probably better answered by the Minister of Natural Resources.

Mr. Foulds: Nothing is better answered by the Minister of Natural Resources.

Hon. F. S. Miller: In his absence, I would point out last year when I was Minister of Natural Resources I dwelt at length upon the need, at certain times, to have processing done elsewhere when, in fact, we are not the only source of the semi-processed materials. There were, as I recall, seven jobs in the mining concentrating end in Canada for every one we lost offshore and, in fact, we were protecting Canadian jobs to the maximum of our capability.

Mr. Laughren: Oh, the minister doesn’t believe that?

Mr. Peterson: A supplementary.

Mr. Speaker: A new question.

Mr. Peterson: It is an important question.

I would just like to ask the Treasurer what those two increases in allowances he talked about have to do with his stated intention of bringing new mines into production in this province. How are they related?

Hon. F. S. Miller: Again, Mr. Speaker, when I was Minister of Natural Resources I chatted with a number of companies that had prospective sites for development here, proven or reasonably good ore reserves, who were making economic assessments on incorrect figures or turning down a decision to go forward because they heard our tax rates were prohibitive. The fact is they were reasonably competitive when one allowed for the processing allowances. To listen to my colleague from Nickel Belt, one would say they were overly generous.

He tends to dwell upon only mining tax as the only source of revenue from that industry, but I do not. I look upon the creation of wealth, the creation of employment --

Mr. Laughren: No, no, corporation taxes too.

Hon. F. S. Miller: -- tile creation of corporate tax and the creation of a taxable income for the workers.

Mr. Laughren: There are fewer jobs now than there were 10 years ago. What is the minister talking about?

Hon. F. S. Miller: All of those are just as important.

Mr. Laughren: There are fewer jobs.

Hon. F. S. Miller: They’re all very important, I’m sure the member would agree, in the process. The mining tax is a direct raw material charge for our share of the wealth.

Mr. Laughren: There are fewer jobs, not more.

Hon. F. S. Miller: With great respect, I’m sure there are other mechanisms that are needed and, I’m sure, we will find ways and means of stimulating more development apart from just this change.

Look at the small business development corporations, I’m sure in the member’s speech today he may have something to say about those, and undoubtedly it will be supportive. If he looks at that, mining development is eligible under the SBDCs because we’re trying to funnel more money into the exploratory steps. The creation of a good junior market for mines is important.

Mr. Laughren: Stop the giveaways. What nonsense.

MINING EXPLORATION

Mr. T. P. Reid: I really find the remarks of the minister offensive considering it was the government that ruined the junior mining exploration --

Mr. Speaker: Order. Does the member have a question?

Mr. T. P. Reid: -- business in the province.

I have a question of the Minister of Natural Resources on the junior mining

section of the province that accounted for about two thirds of the active mines in Ontario. The minister indicated that the Hudson Bay lowlands would be made available for mining exploration by way of tendering or lease, is there any guarantee that the smaller, junior mining exploration companies will be able to get a piece of that action, or are they going to be simply at the mercy of the large companies in the tendering process?

[3:15]

Hon. Mr. Auld: Mr. Speaker, as I think I indicated in the statement, it is open to everyone. So far I’m not sure who has indicated interest. My expectation is that there would be some interest on the part of some of the smaller companies.

Mr. T. P. Reid: Supplementary: My question to the minister was: is there any formula or guarantee that these smaller, junior exploration companies will be on a par in being able to bid against the larger companies for the exploration rights.

Secondly, in relation to the Treasurer’s statement, when is the minister going to make a definitive study about junior mining exploration in the province? He has all kinds of studies on the role of small enterprises in the Canadian mineral industry with a focus on Ontario which indicate that it was this government, particularly through the Ontario Securities Commission, that destroyed junior mining exploration in Ontario. When is he going to do something about that instead of giving tax breaks, or the perception of same, to the larger companies?

Hon. Mr. Auld: It’s certainly agreed by the Ontario Mining Association and the Canadian Mining Association that the security rules in Ontario are not conducive to encouraging exploration by the smaller --

Mr. T. P. Reid: Your own study says that.

Hon. Mr. Auld: -- by the so-called junior companies. Discussions are going on with the Ministry of Consumer and Commercial Relations in connection with some change.

DISPOSAL OF HAZARDOUS WASTES

Mr. T. P. Reid: Point of privilege, Mr. Speaker.

Mr. Speaker: What part of your privileges have been abrogated?

Mr. T. P. Reid: Mr. Speaker, on April 10 in the Legislature the Minister of Natural Resources, in response to a question from myself and the member for Port Arthur (Mr. Foulds) in regard to disposal of hazardous wastes, stated that, and I quote: “This news report was not accurate and has subsequently been corrected. Ontario has not yet approved research drilling near Atikokan, although I understand the Atikokan municipal council supports such drilling, as does the member for Rainy River.”

I would like to state that I did meet with members of Atomic Energy of Canada Limited. I was under the impression that they would be having public information sessions with the people in the area and that they would not proceed with any drilling until those public information sessions had been carried out. In fact, I asked in the House

-- obviously, because the minister responded -- what Ontario’s obligation was in ensuring protection to the people of --

Mr. Speaker: Which of your privileges has been abrogated?

Mr. T. P. Reid: I think I have been misquoted, Mr. Speaker.

Mr. Speaker: Well, you didn’t say so.

REPORT

STANDING ADMINISTRATION OF JUSTICE COMMITTEE

Mr. Philip from the standing administration of justice committee reported the following resolution:

That supply in the following amounts to defray the expenses of the Ministry of Correctional Services be granted Her Majesty for the fiscal year ending March 31, 1980:

Ministry administration program, $6,204,100; institutional program, $105,365,000; community program, $19,857,000.

MOTION

COMMITTEE SUBSTITUTION

Hon. Mr. Welch moved that Mr. Cureatz be substituted for Mr. McNeil on the select committee on Ontario Hydro affairs.

Ms. Gigantes: No more Ronnie McNeil? That’s terrible.

Mr. Nixon: We know why you got it, Ronnie.

Motion agreed to.

INTRODUCTION OF BILLS

FUNERAL SERVICES AMENDMENT ACT

Mr. Foulds moved first reading of Bill 61,

An Act to amend the Funeral Services Act, 1976.

Motion agreed to.

Mr. Foulds: Mr. Speaker, the purpose of this bill is to bring some modest reform to the Funeral Services Act in order to provide some consumer protection in this neglected area.

There are seven amendments in the bill. The number of consumer representatives on the board of funeral services is increased. The responsibility for the bill is moved to the Ministry of Consumer and Commercial Relations from the Ministry of Health. Those other than funeral directors may provide removal services, funeral supplies and advice in respect of funeral services. Embalming may take place only by the consent of the purchaser or if the body is to be transported out of Ontario. Finally, the bill makes it mandatory for a funeral director to provide an itemized price list for funeral supplies and services supplied to the purchaser.

ONTARIO HYDRO ACCOUNTABILITY ACT

Mr. J. Reed moved first reading of Bill 61,

An Act respecting the Public Accountability of Ontario Hydro.

Motion agreed to.

Mr. J. Reed: Mr. Speaker, the purpose of this bill is to provide a means of clarifying the functions and duties of Ontario Hydro related to the production, generation, transmission, distribution, supply, sale, use and development of energy resources in Ontario.

The bill requires the Minister of Energy, on behalf of the government of Ontario, to issue a policy directive setting out the policy framework within which Ontario Hydro is to make operational and management decisions.

The Power Corporation Act is amended to clarify that it is a responsibility of the board of Ontario Hydro to ensure that the business of Ontario Hydro is conducted within the limits established by the policy directive issued by the Minister of Energy.

EMPLOYMENT STANDARDS AMENDMENT ACT

Mr. Breaugh moved first reading of Bill 62,

An Act to amend the Employment Standards Act, 1974.

Motion agreed to.

Mr. Breaugh: Mr. Speaker, the purpose of this bill is to extend the application of

part XII of the Employment Standards Act, 1974, to employees who are employed for a definite term or task and to persons who are laid off or terminated during or as a result of a strike or lockout at their place of employment.

This unfortunate slippage in the current act was brought to my attention more than a year ago by some employees at a plant called Robson-Lang in Oshawa who even the employment standards people themselves felt were entitled to certain benefits, most notably what is commonly known as severance pay or payment in lieu of notice.

There was a hearing on that, and it was then ruled that they would not be applicable --

Mr. Speaker: Order. Any further comment would certainly be extraneous.

ANSWERS TO QUESTIONS ON NOTICE PAPER

Hon. Mr. Welch: Mr. Speaker, before the orders of the day, I wish to table the answers to questions 58, 104 and 105 and the interim answer to question 113 standing on the Notice Paper.

ORDER OF BUSINESS

Hon. Mr. Welch: I’d like to take this opportunity to indicate our proceedings for today. As members know, well call the order for the budget debate and the member for London Centre (Mr. Peterson) will make his contribution to that debate. There’s some reason to believe that might be completed before six. If that were to be the case, we’ll then have royal assent. There are two or three bills that require royal assent and Her Honour has to be brought into the House for this assent because of a supply bill.

So, when the member for London Centre is completed, we’ll ask Her Honour to come in. We’ll have to bring Her Honour into the House for assent, following which we’ll then go into committee of supply and start the estimates of the Ministry of Government Services and continue after supper until 10:30 with those estimates.

As members will recall, we reversed the proceedings for Thursday. In the afternoon on Thursday next, we’ll have the contribution of the member for Nickel Belt (Mr. Laughren) on the budget debate and in the evening the private members’ public business.

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

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

Mr. Peterson: Mr. Speaker, I’m very happy to rise on behalf of my party to contribute to this debate which will go on for some months and which, I gather, will come to some sort of resolution in December next. That, of course, gives us some time to monitor the affairs of the government -- the management ability of this government -- and we are going to be looking very carefully at that. We are limited today, of course, to confining our remarks to what was presented by the new Treasurer (Mr. F. S. Miller) just last week.

It was an interesting budget by virtue of the fact that the Treasurer was new. The member for Nickel Belt is, of course, an experienced critic by now and has been doing this for years. As a financial critic, he has proved a wonderful school teacher over the years. Of course, I am the eldest one in the whole group, this being my third year; my third opportunity to respond to the Treasurer.

I’m a little bit at a disadvantage because he’s not here right now and some of my very best stuff I save for him specifically.

Mr. Nixon: He’s washing his hands.

Hon. Mr. Welch: He’ll be here to hear it.

Mr. Peterson: Perhaps the House leader would undertake to discuss my response with the Treasurer and tell him of all the good advice I had to provide for him.

Hon. Mr. Welch: Too bad Hansard can’t record how well dressed you are today.

Mr. Peterson: If you would like to make an interjection about how well dressed I am, I’m sure Hansard would record it and I would like to show it to my children at some time in the future.

Mr. Nixon: Is that a carnation or a pansy?

Hon. Mr. Welch: Argument weak, fragrance strong.

Mr. Peterson: Like all budget nights, it was an auspicious occasion. It’s virtually impossible for any private member to get tickets to this House because the galleries, of course, are packed with the friends of the Treasurer.

Mr. Laughren: No problem to them.

Mr. Peterson: They were all particularly curious, in these circumstances, to see what kind of man the Treasurer is and probably more important, in his case, to see what he would be wearing. That turned out, in retrospect, to be the most interesting part of the entire evening. There was some speculation afterwards, of course, that the Treasurer had got dressed in the dark that particular morning. Why else would anyone --

Mr. T. P. Reid: It was the same way he wrote the budget.

Mr. Peterson: There goes my best line. If the member for Rainy River has to go somewhere else to a committee meeting or maybe even go and do some constituency work for the next two or three weeks, he’s certainly welcome; he’s certainly free to do that.

Over the years, you know, I’ve always chosen a text for my remarks. A couple of years ago, it was Darcy McKeough himself who said something to the effect that “government spending is the chief cause of inflation.” Then, of course, he went on to rack up the biggest single deficit in the history of this province.

I have chosen a text this year. It’s not the Bible but it’s as close as I could come; it’s the Toronto Star, January 20, 1979. It was quoting from an

article by the Treasurer. He had been interviewed, I gather, and he said, “I make decisions on intuition and impulse and that is a terrible admission.” And the

article said, “he says, with a chuckle.” I think that’s disturbingly accurate.

I hope not to take as long as I have in the past, although, if the House leader from the government party threatens me, I may. So I reserve my right to speak for up to four or five hours, depending on how he behaves and how attentive he is. But I think one will see, in looking at that quote, how that is exactly the way the Treasurer has devised the budget at this time.

[3:30]

I want to present an overall view, if I may, of how the Liberal Party sees the bind we are in today, our thesis about why we got into the troubles we are in today, and then finally the only way we see our way out of some of the present economic difficulties we have created for ourselves.

We have always been constructive in this House. If one looks back over the past two or three or four years, we have tabled in this House a myriad of position papers and constructive suggestions. If members check the speeches of my leader, he has always taken the view we would never criticize unless we had a responsible alternative to present to the people of this province. Without one single deviation from that course, we have always been prepared to stand up and present our alternative.

We gave the Treasurer a very distinct advantage this year. We presented to him in advance our industrial strategy, and of course he had time to work on that. We gave him at least 12 hours’ notice. Government members should not say that isn’t enough notice; they should remember the famous educational about-face of Tom Wells.

Mr. Foulds: Given that strategy, it is ample notice.

Mr. Peterson: That came two hours before a speech our leader was going to make about two or three years ago.

Mr. Nixon: Intellectual theft.

Mr. Peterson: So one cannot say we have not given the government enough time. I think had the Treasurer taken that document seriously --

Mr. Nixon: If he had only got it right.

Mr. Peterson: -- and if he had been able to run down to the printing press, he would have had a far more impressive budget than he had. It is interesting to note that even by his own admission he is not at all sure that one of the principal proposals of his budget is going to work -- and of course I share that view. We predicted in 1977 that his VIC proposals would not work. We weren’t unduly pessimistic about it, but it’s true in retrospect there was not one single registration under that piece of legislation. The Treasurer quite frankly admits it probably won’t work. At least he’s not at all sure -- I don’t mean to misquote him -- it’s going to work this time.

If I were Treasurer, I would probably be darn sure when I brought in things that they would work. I wouldn’t put my credibility on the line for things that were questionable. When I had enshrined in legislation something I believed in, I would make darn sure it worked. It’s a different point of view.

Mr. Laughren: Pretty heavy stuff for a Liberal.

Mr. Peterson: You got the ink. You had John Bulloch running around the country saying what a wonderful fellow you were, taking credit of course for drafting that act with a few minor deviations. Two years from now, if there are no registrations under that act, who is really going to know? There will be an innocuous question in the House some time: how many registrations under the SBDC Act. The Treasurer will say: “None, and I am terribly sorry. Gee, I guess we misjudged it.” But again they were the beneficiaries of publicity for some modest attempt to be creative.

I will get to this later in my speech; I use this only as an example of the kind of commitment that the government has to basic reform, to structural reform and to changing things. To a large measure, this Treasurer is a victim of, and captive of, the same rhetoric that we have heard from Treasurers in this province for a goodly amount of time.

I will prove later, I think, when we examine the deteriorating figures, when we examine the deterioration of manufacturing output, not only in historical context but in a context relative to the other provinces, thoughtful people are saying: “We must change our point of view.” The old laisser-passer, laissez-faire point of view is not at this particular time in history serving Ontario very well.

But given that -- and I will come back to some of these things in more detail in a moment -- we are fundamentally in an economic strait-jacket today that we have not been in before. We were in it last year but not as bad, and every year it has deteriorated. I am one person who has a great deal of sympathy for anyone charged with responsibility for developing fiscal and economic policies for this province at this time, because we have so little room to move. That is a function essentially of some of the sins of our past, sins of the past decade, principally the Davis-McKeough regime.

Our new Treasurer inherited those things. He is trying to do the best he can in the circumstances and I think in retrospect, and I am looking at it, it wasn’t a very creative endeavour.

There is more that could have been done, there are more creative ways to use that money and we have to refocus the concentrations of the power of the government and resources of this government in the province, and they have to be in the future, on the creation of wealth. We have been so busy spending it, we have been so busy thinking of new ways to tax, but we haven’t been thinking of any new ways to develop and create wealth, and that is the basic thrust of the Liberal Party’s proposal that I will present, and has been presented in some detail and I want to summarize in the House today. That is our concentration.

The government’s concentration is only to increase taxation. It is a very interesting point of view for a free enterprise government. The Treasurer was presented with a shopping list and he said to himself: “My goodness, I am committed now. We were committed to balancing the budget in 1981, now we have to balance it in 1984.

I had better generate some more revenue somewhere.” So he looked at a big long list of potential tax increases and a few potential decreases and said: “We will steal a little more here and a little more there and give a little back here and a little more there,” none of which alters the fundamental structural problems in this province, in my judgement at least, but what they do, and even more insidious, is reveal a mentality that says: “We must go on increasing our taxation,” and we see no end to that.

This year, of course, he will generate another $181,000,000 worth of revenue from so-called new taxation, new taxes or at least new increases on old taxes; all of which are regressive, all of which hit the little guy, the small taxpayer, from a percentage point of view much harder than they hit the wealthy person. I say, as one committed to fiscal responsibility, probably more so than the government, but I say as a Liberal I am one who is committed not to tax the lower stratum in our province from an economic point of view any more than we already are. Any taxation increases have to be done on a progressive basis; we are already choking them to death as it currently stands.

Just let me take you ahead a year, Mr. Speaker, because it is important. Even though the Treasurer says his net cash requirements are going to be about $1,153,000,000 in fact his deficit is closer to $1,700,000,000. I will speak more of this later on, but it is important to know that even to finance his decreased cash requirement in his estimate, he is still borrowing over $1,500,000,000 from his internally-generated pension fund to pay for that net cash requirement which he says is lesser. What it necessarily commits us to next year, and which is so disturbing, is at least $130,000,000 more a year in interest, minimum.

I can sit right now and predict what is going to be in the budget next year. It is going to take 9.4 per cent more just to service this year’s debt next year. That necessarily means we are talking next year about an additional $355,000 a day minimum just to carry new debt incurred this year, and rather than an interest bill of $3,800,000 a day, as we have this year, it will at least be $4,200,000 next year. That will bring debt servicing, interest payments on past consumption, to in the order of 10 per cent of the budget next year.

That is what is so disturbing about it; because if one looks back to the beginning of the decade about 4.9 per cent of our budget was going on debt servicing, this year it is 9.2 per cent, next year it will probably be 10 per cent.

We can see the unending chain, we can see the unending spiral; and the year after that it is going to be worse and the year after that it is going to be worse, and after that and after that and after that. I will prove to you, Mr. Speaker, later when I show some of the debt figures we are going to have to deal with in the future, how terribly disturbing that really is.

Mr. Laughren: It’s almost as bad as the federal Liberals.

Mr. Peterson: Collectively, we are experiencing some of the worst crises in our institutions in this province, worse than we have had in a goodly length of time. They are difficult problems for everyone, for the government and the opposition, and we all share them communally from a broad point of view.

There is no question that we differ in many respects on the priorities of this government, but I want to quote a couple of figures to show the kind of crisis we are in.

In 1970, we were spending 29.6 per cent of our budget on health care. In 1979, we are spending 27.7 per cent of our budget on health care. Of course, those health-care institutions and the people involved look at those numbers and say, “Why are you giving us the short end of the stick?”

In 1970, we were spending 31.4 per cent of our budget on education. Today, we are spending 26.1 per cent of our budget on education.

These percentages are declining for a simple reason: Our interest payments are going from 4.9 per cent of the budget to, this year, 9.2 per cent of the budget. Necessarily -- without massive tax increases -- the government’s share in transfers to these various services is going to decline as our interest burden accelerates as a percentage of our budgetary expenditures. That is probably the most disturbing underlying trend in the budget the Treasurer has presented to us: We are going to have less for programs and more for interest.

The Treasurer has spoken, and of course it has been a fundamental tenet of this government, about balanced budgets. Remember the famous Brampton charter, or Bramalea charter? Everyone is trying to deny responsibility for it; so they are trying to move it to another jurisdiction. Pretty soon it is going to be the Muskoka charter, because everybody is so embarrassed about it and will blame it on this Treasurer.

In any event, remember that charter saying we were going to balance our budget in 1981? That was a foundation principle of the government in the election in 1977. Of course we found very quickly, and I am sure sophisticated observers inside the ministry knew at the time, that it was impossible, given this government’s record.

In fact this Treasurer, after he inherited the mantle, was under a considerable amount of pressure. People wanted to find out, who is this man? What does he really believe in? Is he really just a used-car dealer come to the big city? We have had our experience with used-car dealers in politics before, and they do not always command the highest amount of respect in the community. In fairness, I would never equate the two, but I say that at face value there is a presumption against used-car dealers in politics.

Hon. F. S. Miller: I have a deal for the member.

Mr. Peterson: I could not afford to deal with the Treasurer; I know he would do it to me somehow. He would change the numbers somehow and I would get fooled in the deal.

The net cash requirements, as I said, are $1,153,000,000 this year. But in fact, the real budgetary deficit -- in our judgement, a deficit means the difference between current revenues and current expenditures, not taking into account all of the non-budgetary transactions which we have seen fiddled dramatically for the last two years to the benefit of the government; and I hope everyone can see through that -- the real budgetary deficit has improved by only $38,000,000 this year. There was no $200,000,000 or $300,000,000 improvement; it only improved by $38,000,000.

Mr. Speaker, I say this to you: I have had sophisticated trained economists look at this, and what they tell me is, that it is going to take 43 years to balance the budget of this province at this rate. That is the kind of budget that has been presented to us. That projection does not consider the selling off of the assets. One never knows about this Treasurer; he might run across the street and try to flog off the Robarts Library if he could find a taker. That is the kind of accounting he is involved in. He is flogging off mortgages; he is flogging off Syncrude interest. Who knows what asset is next? It may be your chair, Mr. Speaker; so hang on to it, it is a handsome chair.

Hon. F. S. Miller: If I could sell the member’s, I would.

[3:45]

Mr. Peterson: But it is very important that we look at these things in seriousness. What it comes down to is that this government has a vested interest in inflation. The greater inflation is, the less the government has to pay back. That is why we have seen no serious commitment by this government to bring spending and revenues into line to lessen that deficit, to lessen those net cash requirements, all of which have a very profound inflationary influence.

That is why one can argue that governments, and this government especially, has such an interest in inflation they will never really address their minds to those problems; because they will be paying back in 10 years in much cheaper dollars than they are right now.

Mr. S. Smith: Why is the Treasurer leaving? Does he not want to hear the criticism? We had to listen to his speech.

Mr. Kerrio: We hung in through yours, Frank.

Mr. Peterson: As I said, our thesis is we must concentrate the power of government, the resources of government, the imagination of government, the ingenuity of government and all of its attendant people, into the creation of new wealth. Principally, in our view, that is manufacturing here in the province.

We have seen the difficulties of relying on the vicissitudes of the resources sector; and today we are paying a price, I think, for an economy that got to be prematurely wealthy. We generated a degree of wealth we didn’t genuinely deserve in terms of our real contribution to production of that wealth. Today, with the change in the commodity market, with international competition abroad, we are paying a price for not having invested in the things that are going to carry our children 10, 20, 30 and 40 years from now.

As we see the declining manufacturing base, as we see our economy becoming increasingly untenable in the way we are doing it, that sounds the alarm to serious people and they say, “We must do something specific.” I say with pride we have been specific; we have been never afraid to lay our program on the table in this House or anywhere else. If the government wants to steal it, God bless them, because it is probably the best source of ideas they have; in our party we work fairly cheaply.

On Thursday our friend the member for Nickel Belt (Mr. Laughren) will be responding to the budget. In a sense, I regret I don’t have the opportunity of following him. He has the advantage on me. It’s not that I really want to switch from official opposition to the third party, I don’t want that read into these remarks.

Mr. Foulds: That’s going to happen, give us another by-election.

Mr. Peterson: In some respects I wish I had an opportunity to follow him, because I am convinced I probably know in advance what he is going to say. He is a reasonably predictable fellow.

Mr. Laughren: Can I borrow your flower?

Mr. Peterson: In about two days it will look just about right for you. It will be faded and wilted and droopy; just perfect to match your outfit.

Mr. S. Smith: It will be light pink by then.

Mr. Philip: Right now it’s rich and thorny, just like your ego.

Mr. Peterson: I suspect my little friend won’t address himself to some of the problems, at least the way I see them. I see all of our problems in the overall fiscal framework with which we have been presented. I think any kind of responsible budgetary response or budgetary proposal will have to be done in that particular context. I hope my friend will address himself to those kinds of things. Heretofore I have never seen anyone in his party do that with any degree of precision or commitment.

They have been like the transit riders who jump on the bus for any cause that happens to come by and it doesn’t really matter very much, because they never ask where the money is going to come from, they only think of new, creative ways to spend it.

Mr. Kerrio: Don’t bother us with details.

Mr. Cassidy: No wonder your party is going down the drain in the federal election.

Mr. Peterson: It is very interesting that the leader of the third party says our party is going down the drain. I say with a great deal of pride our party has never been in better shape in 36 years. It is his party that is going down the drain. In every single by-election we have increased our percentage of the popular vote. We are moving; everywhere in this province we are picking up a new credibility; there are people coming to our party today.

The third party has a distinct advantage: nobody takes anything they say very seriously anyway so it is not subjected to the same kind of scrutiny. People are coming to us today; they are looking at our proposals seriously and looking at our people. I say with pride, I have some of the finest of colleagues in this House sitting within our party; we are in a position to form the government tomorrow.

Mr. Laughren: Name one.

Mr. Peterson: Don’t press me; I allow the member a little fanciful rhetoric.

Mr. S. Smith: Does he have time for 34 names? Explain that to him.

Mr. Peterson: I want to talk about Ontario’s relative position, because I think it is important to put this debate into the proper context. We have found that Ontario has a declining share of production in this country over several years. Capital investment in Ontario is declining as a percentage of the national total, both for total capital investment and for private sector capital investment. For example, we are forecast this year to have about 32 per cent of the total capital investment and 34 per cent of the private sector investment, versus 38.5 per cent of the total gross national product. In 1972 Ontario had 42 per cent of the gross national product. Now it’s down 3.5 per cent.

Some of these figures won’t be particularly meaningful to those listening today, but if they see them in context it will sound the clarion call for some kind of positive action.

According to the Canadian Imperial Bank of Commerce, Ontario at the end of 1977 was doing better than Canada as a whole on eight economic indicators and worse on two. By October 1978 it has slipped to doing better on only four and worse on six, including manufacturers’ shipments, retail sales, car sales, non-residential construction and housing starts.

On gross provincial product per capita, Ontario has been the slowest-growing province per capita throughout the 1970s. So it is not just as if we are comparing ourselves to Alberta. We are comparing ourselves to the national average, the good and the bad.

The Conference Board in Canada states that output growth of the manufacturing sector as a whole last year in Ontario is now estimated at less than five per cent, in contrast to national manufacturing output growth of 6.4 per cent. This estimate is clearly supported by the manufacturing shipments data. These reveal Ontario’s rate-of-shipments growth to be the lowest of all 10 provinces in terms of the first 10 months of 1978 over the corresponding period in 1977, with Ontario’s manufacturing industries trailing their national counterparts in 14 out of 20 classifications.

According to the Financial Post, Ontario manufacturing shipments grew at 12.9 per cent in the first six months of 1978 while the rest of Canada had a growth rate of 18.3 per cent. Ontario’s share of Canadian manufacturing shipments also fell to 49.7 per cent in the first half versus 50.8 per cent a year earlier.

Employment in manufacturing increased marginally, to 783,000 in May 1978 from 781,000 a year earlier; but it’s still well below the peak of the summer of 1974.

In the pulp and paper industry Ontario had an increase of eight per cent in the first half of 1978, versus 11 per cent for producers in the rest of the country.

In the electrical products industry, Ontario’s increase was six per cent -- a small decline in real terms -- versus 16 per cent for producers in the rest of the country.

In the machinery industry, Ontario’s increase was nine per cent versus 13 per cent for producers in the rest of the country.

Slow growth in Ontario was also experienced by the transportation equipment and non-metallic mineral production sectors.

In terms of employment, the conference board forecasts an unemployment rate for Ontario of 7.8 per cent for 1979, narrowing the gap on its national rate to less than one per cent. The budget forecast is only 7.1 per cent, though the real unemployment rate in March 1979 is 7.6 per cent.

The conference board also forecast the employment growth rate for Ontario would be 1.8 per cent for 1979, which is less than the national rate of 2.1 per cent. The budget forecast is for an increase of 3.3 per cent.

The Conference Board in Canada forecast an increase of 8.9 per cent for 1979 in retail sales, about the same as the national rate of increase. In 1978 Ontario lagged behind the national rate by almost a full percentage point.

In terms of housing, during 1978 urban housing starts for Ontario declined 12 per cent from 1977. The nation as a whole experienced an overall decline of 11 per cent.

During the first two months of 1979, urban Ontario starts fell 41 per cent from the same period in 1978, while urban Canada had 33 per cent fewer housing starts.

I know it’s not all that attractive for the members to listen to a long list of figures like that, but they are important. Without that, I couldn’t tell the story as I see it.

Mr. Foulds: That’s right; carry on.

Mr. Peterson: Without that, I couldn’t explain what, in reality, is happening in this province.

I want to speak very briefly --

Mr. Eaton: We are all listening intently, Dave.

Mr. Peterson: We had a little word from Thelma Eaton over there.

Mr. Eaton: I just said we were listening intently.

Mr. Peterson: Good.

I want to give a little historical perspective on what has happened in this province in the last decade. We have found budgetary expenditures have more than tripled, from $4,200,000,000 to $13,900,000,000 -- an average annual rate of increase of 14.4 per cent. The projection for 1979 is over $15,000,000,000.

From a budgetary surplus of $150,000,000, we have now a budgetary deficit totalling over $8,000,000,000. The projection for 1979 adds another $1,700,000,000 to that deficit.

The province’s funded debt -- and there’s been a change in the way figures were presented this year -- has increased 233 per cent, from $4,200,000,000 to $14,000,000,000. The projection for 1979 has the funded debt rising a further 9.3 per cent, to $15,300,000,000, an increase of 263 per cent over the decade.

Interest payments on the public debt rose 489 per cent, from $209,000,000 to $1,200,000,000. Projections for 1979 show a further increase of 12.6 per cent to a total of $1,400,000,000 in interest payments, that’s $3,800,000 a day in interest on the public debt.

Mr. Nixon: Three million eight hundred thousand a day?

Mr. Peterson: Isn’t that terrible? And next year it’s going to be $4,200,000 minimum.

Mr. Nixon: It’s time for a change.

Mr. Peterson: The funded debt per capita has increased 200 per cent, from $551 to $1,653; and it’s projected to rise this year to almost $1,800, an annual increase of 14 per cent.

All of this has left us in a financial position which has substantially declined since the beginning of the decade. It has left us with a debt load that is going to be very difficult for our children to carry. We have virtually used up all of the internally-generated sources of capital that were at our disposal.

I spoke last year at great length of the pension funding crisis in this province, but the fact remains that this province has had unlimited access to pension funds in the order of billions and billions of dollars. I have subscribed to the thesis that they’ve worked on an availability-fed demand thesis, in that they have spent almost every penny available to them. They have said: “The consequences be damned.” They are saying: “Somebody else will look after that later.” This year, for example, we will borrow over $1,500,000,000 from these internally-generated funds.

All of these funds, or the majority of them, have large unfunded liabilities, for some of which the province is responsible. We are seeing a drying up of that capital and no one, including the Treasurer or his advisers, has any idea how we’re going to refund, roll over or repay that debt. They all say, “We will worry about that at some time in the future.” It is a known fact that we’re going to run into a negative cash flow situation with the Canada Pension Plan early in the 1980s when our interest payments on an annual basis are greater than the amount we can borrow.

They’re going to start drawing down capital in, probably, the year 1985 or 1986. By the year about 2000 the fund will be bankrupt, so they will have to draw back not only all the interest that we owe them but all the capital that we owe them. Where are we going to get the money?

We will invade the private capital market -- it’s highly inflationary; we’ll compete for capital with the already capital-starved industrial infrastructure, and that’s highly inflationary -- or we will increase taxes. Any way you cut it, our children are going to pay. We have put our burdens, our debts, onto someone else.

I think one of the worst things history is going to say about these neo-Keynesians is that we have been so involved in these intergenerational transfers of wealth that we have been, in the grand scheme of things at least, irresponsible. We have no right to extract more than our fair share as we go through at any given point in history. We are creating a crisis that is going to be absolutely stupefying.

I want, if I may, to read a few numbers into the record. We have done a considerable amount of work trying to determine the extent of the liabilities of this province, and we have talked about the public debt that is owed.

Mr. Eaton: Who are you talking to?

Mr. Sterling: He’s talking to Bob.

Mr. Nixon: He’s sick of talking to you.

Mr. Ruston: There are only four on the Conservative side. It’s pretty weak over there.

Mr. Peterson: We’ve talked about the non-public debt that is owed. We’ve talked about certain transactions that have been undertaken in Deutschmarks; and I’ll talk about that in a moment, but that turned out to be one of the most flagrantly irresponsible things ever done in the history of this province. We’ve talked about unfunded liabilities, the billions of dollars worth of unfunded liabilities that no one knows how we are going to finance in this province. Then we look at the total amount.

If one extends it out to about the year 2018 we find that -- excluding Hydro, which has an additional debt on top of this of something in the order of $9,000,000,000 or $10,000,000,000, that I won’t get into today but we are going to have to start repaying this debt in the very near future -- we will have to repay a total of public, non-public, foreign, unfunded liabilities -- as you add all of those things together -- in 1979 we must repatriate $574,000,000 worth of debt; in 1980, $269,000,000; in 1981, $251,000,000; in 1982, $261,000,000; in 1983, $343,000,000.

From the period 1984 to 1988 it is $2,539,000,000; an average of about $507,000,000 a year. From 1989 to 1993 it is about $3,371,000,000; an average of $674,000,000 per year. Between 1994 and 1998, $5,522,000,000; an average of over $1,104,000,000. In 1999 to 2003, $2,547,000,000; an average of about $509,000,000 per year. So it goes out to the year 2000, 2010, 2018, a total debt we are going to have to pay back of $16,455,000,000.

[4:00]

Mr. Ruston: Shocking, shocking.

Mr. Peterson: And no idea in the world where it is going to come from -- not a clue, and no plans therefore.

Even the great, august Darcy McKeough, when, asked about these kinds of problems said, “We will worry about it later. No sense getting too excited now. I’m not particularly sure. Growth may take care of that in the future.”

Certainly there are different points of view on the growth of this province. According to the Treasurer’s formula and the way he is behaving I suspect the growth is going to be relatively small. Some people have optimistic forecasts, others less optimistic; but in my judgement it is going to run between two and four per cent in the foreseeable future. That is not, by historical standards at least, a great deal of growth which is going to automatically look after some of these problems we have created. We are going to have to look at new sources of financing, new devices, new taxation to handle that debt.

I want to speak briefly about the borrowing this year. As I said earlier, the budgetary deficit is not $1,153,000,000; it is close to $1,700,000,000. It is $1,659,000,000, an improvement of $38,000,000 over last year; really, by any standard, peanuts in terms of improvement. Frank Miller has not improved the financial health of this community one little bit.

Mr. Laughren: Where is Frank Miller?

Mr. Peterson: What we are doing is interesting. As I said earlier, we are borrowing $1,554,000,000. We are actually borrowing more this year -- I want to make this point very strongly -- we are borrowing more this year than we borrowed last year when we had higher net cash requirements and a marginally higher budgetary deficit.

The only reason it is as low as it is, is because again this year the government has fudged the figures. On their non-budgetary deficit, they are selling off $105,000,000 worth of their Syncrude repatriation. They are taking into current income -- or at least, to reduce the deficit with that -- they are also taking into account $100,000,000 worth of mortgages they are going to sell to reduce the net cash requirements.

Mr. Eaton: Didn’t they create a requirement the year they were acquired?

Mr. Peterson: They use those figures in many different ways throughout the budget. They say, for example, the Employment Development Fund is really not going to cost anybody any money because they are using that money they are repatriating to finance the Employment Development Fund. Had they not done it, of course, had they not had the Employment Development Fund, they would have taken that into current revenues.

Every single time you look at the budget and a particular presentation of numbers, Mr. Speaker, it is always presented in a most self-serving way; it always distorts, in my judgement, the real picture. That is a major problem.

Mr. Nixon: Then cook the books.

Mr. Peterson: For example, I tell you, the Employment Development Fund is presented on the books this year as an investment in capital assets. That is no more an asset than fly to the moon. That money is not going to be retained in any furniture, fixture, roads, bridges or whatever by this province; it is going to be given away to corporations. How can you possibly call that a capital investment? But they do that to support their old argument that they never borrow more than their capital investment.

It just isn’t true. They are borrowing more than they are spending on capital investment. They are borrowing today to finance current consumption. It is that simple. As much as they tried to fudge it in the past, that is the reality of today.

Mr. Nixon: That’s what they did with the Syncrude revenue. They sold the farm to buy liquor.

Mr. Kerrio: They are burning the furniture to keep the house warm.

Mr. Nixon: That’s a better analogy, I’ve got to admit.

Mr. Eaton: Didn’t they put that money into expenses when they purchased it? Or doesn’t that count?

Mr. Laughren: David, do you need this support -- the backup you’re getting?

Mr. Peterson: I’m very grateful to my caucus, I have a first class caucus.

Mr. Nixon: We’ll help you on Thursday too, Floyd.

Mr. Peterson: Beyond dispute, we have the finest interjections in the whole House right here in this caucus.

Mr. Nixon: Hear, hear.

Mr. Peterson: Because they have the finest wits and the quickest brains in this whole House; not only the most profound are they.

Mr. Philip: They know that you can’t get many of your ideas out because you’ve got chapped lips from kissing mirrors.

Mr. Peterson: I want to talk very briefly. There’s Ed Philip, now he’s a quick one isn’t he? Are you grumbling about something?

I want to talk briefly about the revenue side of the budget this year. We’re seeing taxes increase about 14.1 per cent, which is faster than the growth in --

Mr. Philip: Stay out of the bush in the mosquito season, boy. Your nose will catch them.

Mr. Peterson: -- gross domestic product of 10.9 per cent and our expenditures at eight per cent. Clearly the amount the government is spending is inflationary. It’s the amount of government taxes that really hits the little guy and that’s what we are seeing in this particular case; they are extracting taxes out of the taxpayer’s hide at a faster rate than real wealth is being created.

This gets back to my original point at the beginning of my diatribe today. With this government we are necessarily committed to a course of higher taxation year after year after year. Our Treasurer talks about controlling expenditures; some time in the very near future he’s going to have to talk about controlling taxes.

Another interesting point on expenditures, Mr. Speaker. The expenditures are really up eight per cent this year when you include interest. He says, of course, that real spending is only up 6.9 per cent because he doesn’t want to look worse than last year. In fact, real spending is up 7.4 per cent this year because he excludes the $200,000,000 in the Employment Development Fund. You see he wants credit for it on one hand in one part of the budget, but he won’t take responsibility for it in the other part of the budget.

That’s the kind of dual presentation of various facts that we’ve had presented to us by the Treasurer. People are going to say, “Look very seriously at Frank Miller.” Sophisticated analysts are going to say, “What is this man really up to?” I don’t think he has gone any further than he did pre-budget in answering the question, “What is Frank Miller, or what does he really believe in?” Because we have been presented a document absent of philosophy, absent of purpose, absent of vision, totally absent from our point of view.

I talked earlier about the balanced budget, and of course as I said earlier this was a fundamental tenet of this government. This year in the budget they want to ensure the capacity to achieve a balanced budget, or they talk as if the scope exists to balance the budget. There’s nowhere contained herein a commitment to so do. It would be interesting to ask the Treasurer what his real commitment is.

The Treasurer says that net cash requirements could be reduced to zero or a surplus position by 1984 if revenues grow by two and a half per cent more on average than expenditures. But it’s interesting that that did not take place in his budget. Budgetary revenues grew 9.4 per cent; budgetary expenditures grew to eight per cent, a difference of 1.4 per cent. Even by his admission, we will not be able to balance the budget by 1984, or probably never.

If you include the non-budgetary inflows and outflows -- and here is where I was referring to him selling off the furniture -- with non-budgetary revenue it’s up 9.6 per cent; with non-budgetary expenditures it’s up 7.4 per cent, a difference of 2.2 per cent. Still, including the below-the-line non-budgetary transactions, he is not hitting his own goal of keeping a differential of 2.5 per cent. He has made no progress towards balancing the budget,

One has to assume that he doesn’t intend to balance the budget, that it was only a politically expedient thing to say at the time because he felt there was pressure for it, and that there is no more real commitment to it today than in fact there ever was.

It says this in the budget paper: “Efforts will be directed towards holding spending growth below the rate of revenue growth in order that tax increases may not be required.” Last year the government increased taxes; this year they increased taxes. They will continue to rise, as I pointed out, because of the large debt load increase this year. The real deficit decline of 2.2 per cent falls away off the projected figures.

Then there are the current figures and the performance this year by which to judge this Treasurer. Let us not forget, also that this government changes its commitments as easily as it changes cabinet ministers. Both its ministers and its principles are highly expendable. But, given the brief look we have had at this new Treasurer, we are seeing that we haven’t got a chance of balancing the budget, judging by current performance, before 43 years.

I want to turn to something that has been discussed in this Legislature, namely the entire matter of foreign borrowing. It shows the problems one can get into if one has to borrow and if one has necessarily to borrow abroad. I will start in 1968 after the Treasurer at the time, Charles MacNaughton, had just returned from a trip to Europe. He announced to the Legislature that he was considering borrowing funds in offshore markets. A debate at that time was initiated -- not by Morty Shulman, I want you to know, Mr.

Deputy Speaker, because you will be proud to know it, but by our esteemed leader of the time, the member for Brant-Oxford-Norfolk (Mr. Nixon); he was the one who asked the Treasurer at that particular time what he was up to. He was joined by Don Deacon and Jim Bullbrook, other esteemed members.

I want to say Morty Shulman participated with great perception in that debate too, and I will get to some of the remarks. The debate took place on a bill authorizing the raising of money on the consolidated revenue fund. At that time Morton Shulman put on the record, and it turned out to be prophetic -- the following, quoting from Hansard page 5,156: “Mr. Chairman, I would like to sound a warning, if I might, to the provincial Treasurer and to the government.

I fear you may be making an error financially in doing your borrowing in the United States and in the European market.” Morty Shulman was talking about revaluation and the dangers attendant therein. The Treasurer (Charles MacNaughton) replied this way: “The possibility of revaluation must always be considered. I would have to say, upon investigating this matter and discussing it at length, not only in Germany but in other markets and in other areas, that it is regarded as a very unlikely possibility.”

Mr. S. Smith: He must have talked to his cabinet colleagues.

Mr. Peterson: I suspect that the present Treasurer is getting the same financial advice as Charlie MacNaughton was getting some 10 years ago. That’s the quality of it. Don Deacon, in the same line of attack during the same debate, said at the time: “We may well be paying back -- ” and they were talking about a $400,000,000 loan at the time “ -- in the order of $450,000,000 for that loan.” It seemed like a staggering amount of money at the time.

The Treasurer, nonetheless, repeatedly told members that he was just considering a loan; that all was well and no commitments had been made, and would not be made until all the matters were properly pursued. In 1969, despite the warnings and the admonitions of the members opposite, he went out and borrowed money in German Deutschmarks, and the results have been incredible. I want to read the results of that into the record because they are important. I know one must appreciate that very much depends on what day one is talking about because of fluctuations in exchange rates that are still constantly going on.

Deutschmarks have been one of the strongest currencies in the world. The first of the loans became due and payable in 1975. Along with this, a portion of the second loan became due and payable on February 1, 1975. The principal amount was $28,000,000 and change at the time. The face amount had skyrocketed to $37,000,000 in exchange. It left Ontario with a loss in 1975 of $9,552,026 due to an upward revaluation of the Deutschmark from the issue date of those debentures.

The province at this time still holds two debentures issued in Deutschmarks. The first of these issues was originally taken out on February 1, 1969, in the amount of 150,000,000 Deutschmarks, or $40,100,000 Canadian. From February 1, 1975 to February 1, 1984, an amount of 15,000,000 Deutschmarks -- that’s a little over $4,000,000 Canadian -- was to be redeemed annually. The second issue, originally taken out on September 1, 1972, for 100,000,000 Deutschmarks, is redeemed on the basis of 12,500,000 Deutschmarks annually from 1980 to 1987. The amounts outstanding for these two issues, as of October 31, 1978, was recorded at $48,400,000 Canadian.

[4:15]

However, due to the upward movement of the Deutschmark, the Canadian dollar equivalent at that date had risen from $48,400,000 to an unbelievable -- can you imagine it, Mr. Speaker -- $114,000,000, a loss of $65,600,000 because of one bad loan. That is almost two and a half times the original issue price -- 2.4 times to be precise.

This is a loss that will not be fully realized if the Canadian dollar recovers, vis-à-vis the Deutschmark, before all those debentures are redeemed. However, since 1975 we have been redeeming a portion of the principal amount, 15,000,000 Deutschmarks on February 1 of every year. That means we have been realizing an actual loss every year on the annual maturity of 15,000,000 Deutschmarks at a face value of about $4,000,000 Canadian. Last year it took an extra $3,620,800 to make up our foreign exchange payments.

We are told that $200,000 of this amount can be attributed to US dollar issues. All of the rest was for the principal repayments in Deutschmarks of $4,000,000 Canadian. That means in 1978 it took almost twice as many Canadian dollars to pay back the Deutschmark loan as the amount we actually borrowed. Since that time, the Deutschmark has continued its upward climb. This year it took more than twice as many Canadian dollars to meet our principal repayment on the loan. That is still going to cost this province a great deal.

I want at this point to mention Hydro too, because that has been a subject of contention in this Legislature, just to show the kind of exposure we have in this province. Let us not forget that we in this province have responsibility for all of Hydro’s loans. Not only did Hydro take out loans in Deutschmarks, it also had the foresight to take out loans in Swiss francs, the only currency in the world that was stronger than the Deutschmark. In fairness, they did not take out any loans in yen. That showed they only missed on two out of three.

As of September 30, 1978, Ontario Hydro had outstanding loans of 380,000,000 Deutschmarks and 330,000,000 Swiss francs. The face value of the Deutschmarks was $126,600,000 Canadian. The value on December 31 of last year $245,000,000 Canadian, showing a face loss of $119,000,000 Canadian for Hydro. The Swiss franc loan was $114,700,000 Canadian; its face value on December 31 of last year was $238,000,000 Canadian, a face loss of $124,000,000 Canadian.

Hydro also held $4,500,000,000 in US funds at the time. We pointed out last fall from Ontario Hydro’s own prospectus that if those loans became due and payable we would realize a real loss in this province of $924,000,000. That shows the problems of exposing oneself to the foreign currency markets and the foreign investment dealers.

If we had been more prudent with our own pension funds, if we had used Canada Pension Plan, teachers’ superannuation and OMERS funds, not to finance consumption in this province but to finance real wealth-creating devices like Hydro plants and things like that, we would have not been subjected to the vicissitudes of the foreign market. In addition to that, we would have created real wealth in this province by Canadian dollars. Herein lies the story and the dangers of being too heavily involved in the foreign marketplace.

Just to put this into perspective, there was a prospectus floated by Ontario Hydro last year. On one issue they wrote off $48,000,000 in Swiss francs because it had to be refinanced. That is in their prospectus; it is also public knowledge.

Let me just return now to the province’s balance sheet. Our foreign exchange payments for 1977-78 totalled $3,620,800, all of it on the DM issue. The foreign exchange payment in 1976-77 was $2,300,000; in 1975-76, $1,600,000; and in 1974-75, $10,052,627, which represented the $9,500,000 loss on the 1975 redemption of the DM issue to which I referred earlier.

The total cost to the province in foreign exchange from 1975 to 1978 was $17,565,813, a real loss realized at this time and excluding future losses of up to the order of $1,000,000,000. We have already lost $17,565,813. Another repayment of 15,000,000 Deutschmarks was made on February 1 of this year. That cost in the order of $9,000,000 to pay back $4,000,000 this year already. In addition to the $17,565,813 we had lost up to last year, we have lost an additional $5,000,000 this year, bringing our total, real, incurred exchange loss to this point up to about $22,500,000.

This, of course, does not include the difference in interest on these amounts. That is a separate calculation and would bring the amount much higher because as the face value of the currency changes, necessarily, we are obliged to pay a higher amount in interest to pay that off. I think it is a horror story that should be told in this House and should be repeated to the future Treasurers and money managers so that government will never have to get involved in that kind of operation again.

One of the things that can operate in our favour -- and from this point of view I hope it does -- is that if the Canadian dollar rises all those liabilities are lessened. Of course you face the danger there that if Joe Clark is elected he wants Sinclair Stevens to become Minister of Finance. He wants to hold the dollar at about the 88-to-90-cent level, a level that we are very close to today; and of cours