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February 1, 1983

32nd Parliament, 2nd Session

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Hansard Transcripts

Hansard Transcripts

COMMITTEE PROCEEDINGS

ORAL QUESTIONS

BILD PROGRAM

ONTARIO YOUTH SECRETARIAT

UNEMPLOYMENT

FUNDING FOR EDUCATION

STATUS OF RENTAL BUILDINGS

IDEA CORP.

AUDIO LIBRARY PROGRAM

RESPONSE TO WRITTEN QUESTIONS

USE OF TIME IN QUESTION PERIOD

REPORT

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

MEMBER FOR ELGIN

ORDERS OF THE DAY

FUEL TAX AMENDMENT ACT

MUNICIPAL CONFLICT OF INTEREST ACT

CONCURRENCE IN SUPPLY, MINISTRY OF LABOUR

BUSINESS OF THE HOUSE

The House met at 2 p.m.

Prayers.

COMMITTEE PROCEEDINGS

Mr. Speaker: Before proceeding with routine proceedings, I would like to address a subject that was raised on Thursday last by the member for Renfrew North (Mr. Conway), who rose on a question of privilege concerning meetings with the Minister of Consumer and Commercial Relations (Mr. Elgie), his staff and the editorial staff of the Toronto Star and the Globe and Mail, at which the member alleges the minister gave information concerning Crown Trust Co., Seaway Trust Co. and Greymac Trust Co., which had not been given to the members of the assembly.

Since Thursday, I have given very careful consideration to the complex aspects of parliamentary privilege as it relates to this matter, and I have had an opportunity to review the rulings of a number of Speakers of the House of Commons of Canada on this subject. My ruling deals only with the technical and procedural aspects of the matter and not in any way with the merits of the situation or the allegations; that is, the question which I must decide is not whether or not there was ministerial impropriety but whether the situation or allegations should in fact be considered a matter of privilege.

Mr. Speaker Lamoureux dealt with this matter in a ruling on October 30, 1969. In his ruling he stated: "The question has often been raised whether parliamentary privilege imposes on ministers an obligation to deliver communications to the public through the House of Commons or to make these announcements or statements in the House rather than outside the chamber. The question has been asked whether honourable members are entitled, as part of their parliamentary privilege, to receive such information ahead of the general public. I can find no precedent to justify this suggestion.

There may be, in such circumstances, a question of propriety or a question of courtesy. There may be a grievance. But in my view there cannot be a question of privilege."

Mr. Lamoureux's ruling is in my opinion the definitive one, but there are a number of others to the same effect by Speakers Michener, Jerome and Sauvé, among others, as well as Speakers in other jurisdictions.

In finding that there does not exist a prima facie case of privilege, I am not preventing further discussion by the House of the matters in issue. The effect is to refuse precedent to this discussion but not to prevent it. No barrier is raised to the presentation of this matter under different circumstances on another occasion.

The member for Riverdale (Mr. Renwick) supported the member for Renfrew North in his remarks but dealt mainly with questions concerning the proceedings in the standing committee on administration of justice. On a number of occasions I have ruled that procedural difficulties that arise in standing and select committees ought to be settled in the committee and not in the House. It is clearly established that matters alleged to have arisen in committee but not reported by the committee may not be brought to the attention of the House as a question of privilege.

There being no report from the justice committee, the matters which occurred in the committee may not be raised as a question of privilege in the House.

Finally, the member for Renfrew North rose on another question of privilege on Friday last concerning the release of the report of the Hospital for Sick Children review committee. As I stated before, although it is a courtesy to the assembly for a member to release information in the assembly before releasing it to the press or the public, it is not a breach of the privileges or rules of the assembly if this does not happen. In this case, the Minister of Health (Mr.

Grossman) stated his concern that the contents of the report became public before its release and denied making the information concerning the report available to anyone other than those at the lockup and certain ministers. He promised a thorough investigation to determine how the leak occurred. The assembly must accept the minister's word on that account.

Mr. Conway: Mr. Speaker, I certainly appreciate very much the points you have drawn to my attention and I am quite prepared to accept the reference, particularly to the Lamoureux ruling.

I just want to indicate -- and I regret doing so in the absence of the Minister of Health, who gave this assembly an undertaking on Friday to report back on the second question I raised -- that, upon reflection, the more I think about what happened here on Friday with respect to the serious breach of the lockup and the release of the report on Sick Kids Hospital, the more I feel you should consider some review of the procedures that govern these lockups. It has to be assumed that there is a very limiting control on that kind of information.

When I read the early edition of the Toronto Star on Friday, it was clear to me that someone at the Star was in possession of that entire document many hours before the lockup began. I would hope you might invite the Minister of Health to comment on the rumours about this place that he met the day before with certain people from the Star, one of whom I have heard was the reporter in question, Ms. Susan Pigg. I have not been able to confirm or corroborate that, but I take the minister at his word that he is prepared to make a full report, and I invite him to deal with that particular rumour which concerns me a great deal.

In conclusion, it is obvious to me that this very sensitive document, which was felt to be so sensitive by the Minister of Health that it had to be controlled in its release through a lockup, was leaked to one newspaper many hours in advance of that lockup commencing. I consider that to be a very serious breach of whatever rules and regulations govern the lockup procedure, and I would like to have that procedure carefully reviewed so it might not happen again.

Mr. Speaker: I must rule that the member for Renfrew North did not have a point of privilege or a point of order. However, I did allow him to continue so that the Minister of Health might take note of his observations. I must further point out to all the honourable members that the matter of the lockup is beyond my jurisdiction as Speaker of this assembly. However, I am sure the minister will take note of your remarks and will act accordingly.

Mr. McClellan: With your indulgence, sir, if I may express for no more than 30 seconds the same concern raised by my colleague the member for Renfrew North --

Mr. Speaker: With all respect, I have dealt with it and your concerns are noted and will be noted by the minister. I am sure he will report back as quickly as possible.

Mr. McClellan: The allegation is a serious one; that the report was leaked the previous day to the Star bureau at La Scala restaurant makes it even worse --

Mr. Speaker: Order. That question may be asked at a more appropriate time. Again, I tell all honourable members, the matter that has been raised is beyond my jurisdiction.

2:10 p.m.

ORAL QUESTIONS

BILD PROGRAM

Mr. T. P. Reid: Mr. Speaker, I would like to ask the Treasurer about the so-called "bilge" program that he is so proud of, particularly in relation to the comments of Mr. Blair Tully, secretary of the Board of Industrial Leadership and Development. The Treasurer stated that he was very encouraged with the BILD program's success in stimulating the participation of the private sector and other levels of government. We have already pointed out on numerous occasions how fatuous that comment is.

Yesterday, Mr. Tully admitted that the outside reaction in the federal government and the private sector had scarcely lived up to the Treasurer's expectations. According to the Globe and Mail, Mr. Tully blamed the private sector and said that it has "got to get its act together." Had he been honest, Mr. Tully would also have explained the reasons why other sectors are not participating in BILD, namely, they see it as nothing more than a political ploy to shuffle old money under new names.

The other interesting thing Mr. Tully said was that the government is not keeping track of the jobs created by this program, which ultimately will involve billions of dollars. Can the Treasurer tell us, where are all the new jobs that were supposed to flow from this program? Where are the new co-operative ventures between the federal and provincial governments and between private industry and the provincial government? What accomplishments can the Treasurer point to and say, "This would not have happened without BILD"?

Hon. F. S. Miller: Mr. Speaker, my friend has always had trouble reading anything. He gets a "g" in the BILD program. That is a "d," not a "g." I realize it will take some time for him to sound out the letters carefully.

Hon. Miss Stephenson: A little phonetics.

Hon. F. S. Miller: A little phonetics, yes. When I was answering a question, yesterday I believe, somebody was alleging -- I think it was the Leader of the Opposition (Mr. Peterson) -- that we were not up to the $150-million figure in the first year, and I explained how we had preflowed some funds. I went on to point out that the amount of $750 million over five years, or roughly $150 million a year, was the provincial contribution of new money. There would be --

Mr. T. P. Reid: It is not new money. It was all out in the employment development fund.

Hon. F. S. Miller: No. There would be money from ministries of the province from regular budgets. There would be money from the federal government. There would be money, one would hope, from the private sector. I think the record will show that I said quite quickly that so far these were not up to matching ours, that we were still talking to the federal government and working, we hope, particularly with Mr. Johnston in his new position, towards a greater degree of co-operation with them.

There was a sense of suspicion, I detected, at the federal level when we brought out the program, and there was a year or so during which the federal government was saying to all the provinces of this country, "If you start anything unilaterally, we will not be in it."

They are in such deep trouble these days in Ottawa, they are suddenly saying: "There is a new spirit of co-operation and discussion going on these days. We want to be with you on some of the projects you are bringing along. We would like to find ways of sharing some of the great ideas coming from Ontario." So one will find in the next month or so, I am reasonably sure, that there will be meetings with our federal friends, where they will not necessarily admit their money was used co-operatively with ours, but where they will start down that road.

At this moment, my first minister and the Minister of Industry and Trade (Mr. Walker) are in the great city of Cambridge opening the Ontario Centre for Computer-Aided Design and Computer-Aided Manufacturing. I will be there tomorrow. I believe the Minister of Education (Miss Stephenson) will be there on Thursday. There will be many people coming to that.

Mr. Rae: If it takes you three days to open it, that's got to be a hell of a ribbon.

Mr. T. P. Reid: Is she the cleanup?

Hon. F. S. Miller: She may be the cleanup hitter. She will knock it out of the park. She will have a home run, because when she steps up to the bat the member will know he has been hit.

Interjections.

Hon. F. S. Miller: Is there anything else I can do to help you, Bette?

Hon. Miss Stephenson: That kind of help, I do not need.

Interjections.

Mr. Speaker: Order. I think the minister has answered the question.

Mr. Boudria: Mr. Speaker, the Treasurer seems to take offence whenever we suggest that the BILD program is nothing but old money under a new name, but he knows that is exactly what it is. The largest single project in the BILD portfolio is the radial road program, which everyone knows is not new. People laugh when they see BILD signs at every culvert on the highway.

Mr. Speaker: I presume you do have a question.

Mr. Boudria: Yes, sir. Of the $38 million the Treasurer claims municipalities have committed to BILD, more than $24 million is for the Ottawa and Toronto convention centres, which predate BILD. These centres also account for $30 million of the $84 million which BILD says the feds have committed and for $75 million of the private sector commitment.

Mr. Speaker: Order, please. I will have to ask the honourable member to place his question.

Mr. Boudria: Let me ask the Treasurer a very simple question. If he really wants BILD to be taken seriously, why does he not stand in this House and tell the people how much new money will actually go into BILD? Why does he not tell us now what is left when he takes out the 400 series highways, Darlington, the convention centres and the liquor warehouses? Is there really anything left, or have the citizens of this province been let down again?

Hon. F. S. Miller: Mr. Speaker, I was talking to Mr. Tully this morning, because any time a civil servant is quoted in the press, he has some sense of concern. I did not hear any denials from him, but I thought he felt perhaps he was a little more positive than he sounded. There is no question that we were anxious to see more money; I said that yesterday, and he said that. That is fair. We are working on more private money.

But when my colleagues start asking questions about BILD, I feel a lot better. If we are really blowing it, they ignore it. When we are making political marks, they come after us. That is what they are doing.

Mr. Roy: That is exactly what happened with the trust companies.

Mr. Speaker: Order.

Mr. Cooke: Mr. Speaker, I think the Treasurer has just described the BILD program exactly as we describe it. The government makes political marks and no economic marks.

I would like to ask the Treasurer what impact the BILD program has had, since it was introduced, on the very deep structural problems which exist, whether in the machinery sector, the auto parts sector or the agriculture sector. What impact has BILD had on the structural problems, namely, investment and jobs in Ontario?

If the Treasurer wants to look at the statistics, he will know that from May 19 to December of last year, we lost 20,000 jobs in the agricultural sector, 82,000 jobs in the manufacturing sector, 31,000 jobs in the construction sector and the list goes on. What has happened, and what impact has BILD had on the very deep structural problems in the economy?

Hon. F. S. Miller: Mr. Speaker, I always find it intriguing when the honourable member's party, which is a party I have always admired, because in its own way -- I qualify that as the Deputy Premier (Mr. Welch) looks at me askance: when I admire them it is because they do focus on longer-term problems a good deal of the time. I have often been very impressed by the quality of criticism that comes from them. I do not assume all criticism is invalid. When one talks, as they do at great length, about the need for economic strategies, one then starts looking at the medium and long terms.

They then see us bring in something with medium- to long-term potential and say, "And what has it done in its first year or its second year to solve all those problems?"

Mr. Cooke: It has been two years, though. It was a three-month strategy in 1981.

Hon. F. S. Miller: Just a second. It was not a three-month strategy, my friend.

Interjections.

Mr. Speaker: Order.

2:20 p.m.

Hon. F. S. Miller: I am answering the member's question. The Innovation Development for Employment Advancement Corp., for example, was in that. It took some time to get together and put a --

Mr. Cooke: You had a part-time employee as its head.

Interjections.

Mr. Speaker: Order. I sense the member does not really want an answer to that question.

Mr. Boudria: Getting back to the question I asked the minister: In view of the fact that federal officials stated they were informed of the BILD strategy and what they call the unilateral declaration from the Premier to the Prime Minister on the same date as the program was made public, and in view of the fact that municipal officials across the province have complained they were never approached by the province for their views, can the Treasurer blame anyone for thinking the government had only political considerations in mind when it brought in BILD? Can he not see that he has no one to blame for the programs but himself?

Hon. F. S. Miller: I would be delighted to have no one to blame but myself. That means I will be heaped with praise, because it is a very good program.

I do not know where my friend got the information he just read into the record about a unilateral declaration by the Premier of this province. I know there was a letter of great length sent, I believe, to the first minister of Canada by my Premier. I am sure I am correct when I say we had staff liaison, as one should have, well in advance of the actual public discussion because we were keenly aware of the need for federal participation.

We were also keenly aware of the temper of the times during which, if the federal government felt somebody was announcing something it could not attach its banners to, it would not play ball. That has changed. It has changed its ways. But we did take those steps because we genuinely wanted its participation. Why should we not? If one looks at the Department of Regional Economic Expansion programs or whatever, they have greatly assisted other parts of Canada at the expense of Ontario. We felt that with the BILD program we were bringing legitimate reasons for federal-provincial co-operation. I still feel so.

Mr. Boudria: Why did you not consult ahead of time?

Hon. F. S. Miller: We did, and I was part of that consultation. The member does not know whether we consulted. He only has somebody's record. I know we consulted. I was there.

ONTARIO YOUTH SECRETARIAT

Mr. Mancini: Mr. Speaker, I have a question for the Treasurer concerning the Ontario youth secretariat. Two years ago, when the Treasurer tabled the report on the Board of Industrial Leadership and Development, this is what was done in the first year: The secretariat was allocated $750,000 from BILD for youth employment counselling, and the Ontario Manpower Commission was to provide an additional $500,000 in the 1981-82 year. These awards were to be made on a basis of 50 per cent of the operating cost to a maximum of $60,000 per centre.

The public accounts show that in the 1981-82 fiscal year only $298,000 was spent by BILD for youth employment counselling. This was less than 40 per cent of the target of $750,000; quite a shortfall. Will the Treasurer inform the House why there was this incredible shortfall? Can he inform the House whether the moneys that were originally allocated will be able to be carried over from last year? Will the Treasurer inform us as to whether he intends to meet his original goal?

Hon. F. S. Miller: Mr. Speaker, the original shortfalls in some of the spending programs will be simple to explain because, if one goes out on January 21, 1981, or whatever day it was, and announces a program that has as many components as BILD did, one cannot expect that the spending will peak overnight.

Obviously in the first year we had the problem of organizing the technology centres and the Innovation Development for Employment Advancement Corp., and defining the roles, and the problem of setting up things such as the youth employment counselling centres. I am told we now have 23 centres across the province, and they are very successful.

In my second year, I am faced with the reverse problem to the first year; that is, more demand for funds than my budget has in it. I believe I am currently limited to $160.8 million for this year, although $150 million would be the normal expected one-fifth share of the targeted figure. I am also told that even though the Chairman of Management Board (Mr. McCague) has allocated only $160.8 million, it is likely that our drawdowns by the ministries will exceed that and I may have to ask for some reapportionment of funds.

I only say those things because obviously, as BILD continues to succeed, the demands for moneys are growing as people see, as in the case of these centres, the success that comes with them. The member cannot expect the centres to be an overnight success. As they became a success, more people wanted to copy them and the demands increased.

Mr. Mancini: The Treasurer's briefing book, brought from the recent estimates debate, lists a five-year, $11.7-million commitment by BILD to the youth employment counselling program. This is a slight improvement on the $11.2 million listed in the BILD document last January, however, it is far less than the $15-million commitment that was listed in some early BILD publications.

Given the trends in youth unemployment, which have led to 200,000 young people, or 18.7 per cent of the labour force for this group, being unemployed province-wide, with rates twice as high in certain areas, how does the Treasurer justify this reduced commitment?

If it was felt that a commitment of $15 million was needed in January 1981, when youth employment was 13.6 per cent, how can this government possibly feel that less is needed when the rate is more than five percentage points higher? How can the government let the young people of Ontario down again?

Hon. F. S. Miller: I was hoping Mr. Speaker would point out that whoever writes these questions might précis them a wee bit before members stand up. The punctuation sometimes is a bit painful.

Mr. R. F. Johnston: Précis the answers.

Mr. Cooke: We cannot all go to New York for speech therapy.

Mr. T. P. Reid: Would the minister be willing for us all to go to New York for speech classes at the expense of the taxpayers?

Mr. Speaker: Order. I point out to the honourable members that we have spent very close to 25 minutes on the first two questions.

Hon. F. S. Miller: Twenty-two minutes of which was spent reading them.

Mr. Peterson: The minister did not learn that in the personality course.

Hon. F. S. Miller: No. I have been reflecting the honourable member's happy countenance here for some time, and I get greyer and greyer day by day.

Mr. Speaker: Now to the question, please.

Hon. F. S. Miller: Since the BILD document was brought out, the thing that continues to amaze me is how well we have been able to stay with the original plan as opposed to variations on it. It was produced in a three-month time frame, and in a broad-brush way, to show the general objectives of the province and the mechanisms to achieve them.

Very early in the game we made a very conscious decision at the BILD board that it was not to be locked into any one figure for any one program, because we had to judge the success of the program and the alternatives that were coming through in government.

The members will see that of the $50 million that was passed in supplementary estimates last week, under

section 39 of the Unemployment Insurance Act, $5 million was aimed at certain training, basically for youth and unemployed people. That is $5 million doing some of the things the $50 million was to do too.

Second, not all the centres are up to the targeted $66,000-a-year funding, and they will not be until they get going. Most important of all, if we look at the success rate of those that are functioning, I am told they are having about a 50 per cent success rate in their counselling, and I would say it is one of the wisest uses of dollars. Therefore, whatever figure is in the budget today is always subject to review as the demand improves.

2:30 p.m.

Mr. Cooke: Mr. Speaker, the Treasurer stated a couple of moments ago that we cannot expect BILD to turn things around overnight. Can the Treasurer explain, then, why we have to accept that youth unemployment has gone up by 62,000 in the last year? Can we not at least expect things to be going forward rather than backward, if BILD is supposed to be working and jobs are supposed to be created? The unemployment rate is 18.7 per cent among our young people.

Hon. F. S. Miller: Mr. Speaker, my colleague is keenly aware of all the kinds of forces that change the factors for youth. First, the rules of many places of work put the young people with the least seniority back on the street if there is a slowdown. The honourable member would accept that. One of the problems that the Minister of Education (Miss Stephenson) has been worried about -- we all have been -- is the ability to keep apprentices functioning during these slowdowns, again because very often there are predetermined and agreed-upon rules for layoffs. I hate to see the training of young people destroyed by these turndowns.

The member opposite has a great deal of fun showing me that there has been a drop in employment. I have never tried to deny that. The drop has not been as deep as it would have been had we not acted, and we are taking steps to attack a number of the structural problems he is so wont to bring before this House.

Mr. Conway: Mr. Speaker, perhaps I can invite the Treasurer to share some information with those of us who are trying to sort out the promise and the performance of BILD. Would he not agree that there is some very considerable variance between the promise of 1981, when he said that $15 million would be committed over a period of five years to youth employment counselling services in this province, and two years later when we are told in his estimates that in fact this $15-million commitment will now be substantially less, something in the order of $11.7 million?

Unlike 1981, when the unemployment rate for the youth of this province was 13.6 per cent, now, two years later, long after the election is past, when his commitment is reduced by $3.5 million, youth unemployment is at 18.7 per cent with fully 200,000 young Ontarians from Muskoka to Kenora out of work.

How can the minister explain this sharply downward direction in the curve of his commitment from $15 million to $11.7 million at a time when the youth unemployment curve points sharply upward? How is that not a contradiction in the promise offered to the young people of Ontario before they went to the polls in 1981?

Hon. F. S. Miller: Mr. Speaker, would that I could match the poetic language of my colleague. He said, "promise and performance." He is a fan of alliteration, because I looked at "the Conservative casserole," which he called BILD the other night, and even my staff liked it. I must say that he has a way with a word. I would suggest, though, that --

Interjections.

Hon. F. S. Miller: Nuts to you, too.

Mr. Speaker: Never mind the interjections, please.

Hon. F. S. Miller: At least I am a high-grade nut.

The truth is that the member has taken $15 million and divided it into convenient annual instalments of $3 million each. Our first curve was that way. Now we are saying that the curve gains momentum as the centres come on stream. A present projection may not be the final one at the end of five years; it is adjusted every year. According to the latest estimate, we will have at least 50 centres functioning by the five-year mark and their budgets at that point will exceed the whole average annual requirement for money. The member should not prejudge the total spending in that area. He should wait until we have accomplished our objectives.

UNEMPLOYMENT

Mr. Rae: Mr. Speaker, I have a question for the Treasurer who asks, "Why me?" The answer is because he is not doing anything about the economy. It is the biggest issue in this province at the present time. That is why him.

I would like to ask the Treasurer a question with respect specifically to the cost of unemployment to the Ontario economy. We know the government is impervious to understanding the human cost, but perhaps if we talk about the economic cost to the province and to the Treasury, the Treasurer will come to grips with this problem.

Over $10 billion in wages is being lost to this province and $1.5 billion in federal and provincial taxes. Also, over $4 billion is being paid out in unemployment insurance and welfare payments by both the federal and provincial governments.

With the costs so astronomically high, and being projected by the Treasurer as remaining that high throughout the entire period of 1983, what will it take to make him recognize that we are in the middle of an economic crisis? The costs are intolerable. He has to act by introducing money and investment into the acronyms and initials in the programs he so proudly shuffles and displays before this Legislature.

Hon. F. S. Miller: Mr. Speaker, the member is trying to fall back into that convenient pew he thinks he and his party occupy exclusively, the pew of concern for people. Whether he likes it or not, for the last 40 years this party has represented the concerns of the people of this province, and it will keep on representing those concerns.

In his heart the member knows that. Actually, he has to work himself up to these phoney attacks. Somehow he has the idea that we luxuriate in the pain and misery of people, that it is a pleasure for us to pay those moneys out. That is baloney. We are working hard. But we have a different set of beliefs. We understand the role of government in the economy.

We do not believe the entire economy should be managed by government, as the member would have it. We trust the private sector and the consumer a lot more than the member does, and we believe the signs are there that they are leading us out of the current very heavy recession.

Mr. Rae: Mr. Speaker, every economic indicator and every report from the private sector shows that consumers are saving a heck of a lot more money than they are spending, because they are terrified they will lose their jobs. Every survey shows that the private sector is looking to government for leadership. Whatever government it may be, the private sector is looking to it. If the Treasurer is going to get consumers to start spending and the private sector to start investing, government has to show leadership.

Mr. Speaker: Question, please.

Mr. Rae: When is this government going to show the leadership it so proudly talks about? When is it going to start investing in jobs and in the future, and start spending some of the money the private sector and consumers are not prepared to spend at the present time?

Hon. F. S. Miller: When we are in the middle of a difficult time, it is easy to lose faith in the things that work, it is easy to step in and destroy the system that works pretty well. There are a lot of people around the world who still envy this country.

The member does not exactly improve the problem when he stands and delivers what my Premier (Mr. Davis) calls the theology of doom and gloom. I thought he would have learned from the other fellows opposite that it does not pay off for them and that it will not pay off for him.

Mr. Rae: We are asking the Treasurer to do something.

Hon. F. S. Miller: We are doing things. The member does not like to face the fact that since this government brought in Bill 179 we have seen a steady reduction in inflation in this province, a steady reduction in interest rates in Canada and a steady improvement in the expectations of Canadians. That is a major step towards the recovery.

Mr. T. P. Reid: Mr. Speaker, all indications are that unemployment will be at least 12.5 per cent in the next year. Consumers are not spending. As well, the Treasurer has indicated that his revenues from the sales tax are down $130 million from what was projected.

2:40 p.m.

Given that consumer resistance to spending is one of the largest problems involved in consumer spending and creating jobs, is he reconsidering his ill-fated increase and expansion of the seven per cent sales tax to almost every product in the province? is he considering any selective cuts in the sales tax to spur consumer spending in Ontario, thus leading to an increase in the capacity to create jobs in the private sector?

Hon. F. S. Miller: Mr. Speaker, it is interesting to hear those questions. The last time I made a selective cut in the sales tax I was hammered by the member's leader for taking actions which, in his opinion, did nothing but shift the economy around a bit and did nothing to help anybody.

Mr. T. P. Reid: They were not needed then. They are needed now.

Hon. F. S. Miller: They were needed then. If the member does not think they were, he had better go and consult with the people who wrote in --

Mr. T. P. Reid: We need it now and nobody asked you to expand your sales tax base.

Hon. F. S. Miller: The answer of course is --

Interjections.

Mr. Speaker: Will the Treasurer address the question, please?

Hon. F. S. Miller: When the budget process starts each year, I look at every single aspect of the budget. Of course, I am not going to speculate today about any selective cuts. That would be a foolish thing to do. I do not think this is the time in the economy for some of those, but I am not going to rule out anything until I finish my budget process.

Mr. Laughren: Mr. Speaker, I wonder if the Treasurer is aware that we in this party have confidence in the people and in the future of the province, but we do not have confidence in the government to work its way out of our problems.

Does the Treasurer recall the statement by the Conference Board of Canada that wage controls are holding back a recovery in this country and are not helping the matter at all?

It is now over a year since Inco and Falconbridge announced major layoffs in the Sudbury area. There has been a massive shutdown of the Inco operations since July. The Falconbridge operation is just recently back at work. Why have the Treasurer and his government not taken a single substantive action to turn the economy around in the Sudbury basin?

Hon. F. S. Miller: Mr. Speaker, I think even the member will admit that my colleague the Minister of Northern Affairs (Mr. Bernier) is seen by many people in the north as this government's voice. He has just said $150 million has been allocated to that area. My friend knows full well one cannot artificially stimulate a demand for nickel and that is really where it is at. He also knows, which he hates to admit, that socialist dogma is undermining the world price of nickel because there is a bunch of socialist countries exporting regardless of cost into the marketplace to earn western dollars to buy other goods.

FUNDING FOR EDUCATION

Mr. Rae: Mr. Speaker, my question is for the Minister of Education with respect to Bill 127 and the province's commitment to education in general.

I would like to ask how the minister can expect the people of the province to take her at her word and the Premier at his word with respect to the seriousness of their dedication and commitment to educational funding when, since 1975, Ontario has reduced its share of educational spending from 61 per cent to 50 per cent in the province, and from 33 per cent to 15 per cent in Metro, and when -- this is the figure that really shocks -- it is now clear the province is spending less per pupil in 1982 than it was spending in 1980?

That has nothing to do with declining enrolment. That is a per capita figure. How can the minister expect us to take her at her word when she says she is taking education seriously and has a commitment to funding?

Hon. Miss Stephenson: Mr. Speaker, I would like very much to ask the honourable member where he got the figure that we are spending less per pupil. The amount being spent per pupil has increased annually for the last decade and we have been working diligently to try to keep up with the increasing cost of education, which has increased more rapidly than the consumer price index has over the past decade. In fact, the provincial contribution has matched the increase across the board and has been higher than the CPI increase for the past decade. We are trying diligently to keep it there.

Mr. Rae: The per-pupil figure in Metropolitan Toronto shows an absolute decline in funding from this province from 1982 and 1980. If the minister wants to check her figures with respect to the difference between 1980 and 1982 for Metro Toronto, that is exactly what she will find.

Hon. Miss Stephenson: That is not what you said.

Mr. Rae: There is a decline in Metro -- it is undeniable -- between 1982 and 1980 with respect --

Hon. Miss Stephenson: You didn't say Metropolitan Toronto; you said Ontario.

Mr. Speaker: Order, please. If we could just devote some attention to the member for York South while he places his question.

Mr. Rae: The minister will know that as a result of Bill 127 the school board of the city of Toronto is going to be required to lay off teachers. The minister will also know that the Ontario Institute for Studies in Education study which was published yesterday shows that over two thirds of the population of this province, all income groups with the sole exception of corporate executives, believe that we should be taking advantage of declining enrolment to maintain teachers, to reduce class sizes and to provide special services rather than firing teachers, which is the approach of this government.

I would like to ask the minister, in the light of that OISE survey, which shows the overwhelming majority of Ontarians in favour of improving quality and retaining surplus teachers, how can she justify a decision with respect to Bill 127, which will result directly in the layoff of teachers in Toronto?

Hon. Miss Stephenson: There is one rather important question which the OISE survey forgot to ask; that was to ask the taxpayers of the province if they would like to have their taxes raised in order to increase the number of teachers employed or in order to support, in additional measure, the increasing cost of education.

The member did not designate Metropolitan Toronto in his first question. He alluded to the fact that he was talking about all of Ontario, and he is wrong in terms of all of Ontario. However, I would ask the member to simply assess the increase in assessment within Metropolitan Toronto over the past year, which of course relates directly to the level of provincial grant. Since that was very significant, then there was indeed a reduction in provincial grant in order that other boards might have an increase of their support from 95 per cent of the total cost to 97 per cent of the total cost.

Mr. Cunningham: Mr.

Speaker, in view of continuing discussions that have been presented to the minister from members of all three parties of the Legislature, from school boards, students and teachers, in view of the continuing disparity that exists between urban and rural areas and areas of commercial assessment and residential assessment, and of course the attendant difficulties with Bill 127, would the minister not agree that the time might be very appropriate to appoint a select committee of this Legislature to involve members of all three parties, in the most nonpartisan way we possibly can, and to examine the very complex and controversial issue of financing our schools through the 1980s in Ontario?

Would that not be the most objective solution to this particular problem?

Hon. Miss Stephenson: Mr. Speaker, in the best of all possible worlds, and with the best of all possible intent on the part of the members of the opposition, would they promise to address this problem in a totally nonpartisan way? After their consideration of Bill 127, which has been totally partisan on both sides, I have to decline the invitation.

Mr. Rae: If anybody has turned Bill 127 into a partisan issue, it is the Minister of Education.

Mr. Roy: Mr. Speaker, on a point of order: I was asked a question by the Minister of Education and I say, of course I will address it --

Mr. Speaker: Order. The member is supposed to ask the questions.

2:50 p.m.

Mr. Rae: After the speech the minister gave at the St. David Progressive Conservative Association in 1982, there could be no question as to which minister and which party has attempted to turn this into a partisan question. It is the Minister of Education.

In the light of the meeting which is taking place tomorrow with the Premier (Mr. Davis) and the parents' group -- which is, as the minister knows so well, a genuinely nonpartisan group; in political terms it is a nonpartisan group and the minister knows it -- what will it take for her to change her mind on Bill 127, to withdraw that legislation and replace it with something that provides for some fairness in funding for education right across this province and in Metropolitan Toronto?

Hon. Miss Stephenson: Mr. Speaker, Bill 127 is in fact designed to provide for greater fairness in the distribution of funding in Metropolitan Toronto, based upon the principles which were introduced 25 years ago to this area and which have indeed profited educational programs in Metropolitan Toronto during that entire 25 years.

It seems only reasonable that the boards which jointly come together to determine the way in which assessments should be levied should have some responsibility for determining the way in which the expenditure of the moneys collected can be distributed.

Bill 127 has been through innumerable hours of debate, of public hearing, of examination -- critical examination, I must say -- and some very significant amendments have been made to it. It is indeed a matter of fairness for the entire Metropolitan Toronto area and I will listen carefully to the group tomorrow.

I am delighted to be reassured by the leader of the New Democratic Party, whose party is part and parcel of the sign campaign which is going on right at the moment, I know for a fact, and indeed was responsible for the introduction of partisan political debate related to the subject last May.

Interjections.

[Later]

Mr. Rae: Mr. Speaker, on a point of order: I just want to put on the record that the figures we have received from the Ministry of Education show that in Metropolitan Toronto in 1980, the ministry expended $608 per pupil and in 1982 it spent $590 per pupil.

Hon. Miss Stephenson: Mr. Speaker, I will respond to that point of order. The honourable member, of course, has failed to complete the equation I asked him to complete, and that was the increase in assessments in Metropolitan Toronto which made that possible in terms of the wider distribution of more funds to other parts of the province.

Mr. Speaker: The Minister of Consumer and Commercial Relations has the answer to a question asked previously.

Hon. Mr. Elgie: Mr. Speaker, I am sorry for the delay, I am just shaken by the thought that anyone would believe that party would encourage that sort of thing. I cannot accept it.

Interjections.

Hon. Mr. Elgie: You did not, did you? Did you really mean that? What can one believe in any more? One cannot have trust in anybody any more.

Mr. Speaker: Now to the answer.

STATUS OF RENTAL BUILDINGS

Hon. Mr. Elgie: Mr. Speaker, yesterday there were some questions asked with respect to certain properties in Ottawa and Kitchener. These matters do not as yet fall within the jurisdiction of the ministry, but I have inquired of the Residential Tenancy Commission and I am advised that as of the present time the commission has not received applications for these properties for rent review, so it appears the commission currently has no jurisdiction.

However, I am informally advised with respect to these matters as follows:

First, the Southvale Crescent property in Ottawa. These buildings were sold recently by Mastercraft Development Corp., which took back the mortgage as part of the purchase price. The property was being managed by Maysfield Property Management on behalf of Kilderkin.

It would appear that Kilderkin may be in a cash-flow deficiency position in the operation of the buildings, resulting in at least the mortgage held by Mastercraft going into default. It would appear that Mastercraft notified the tenants of the default and directed them to pay their rents to Mastercraft. Maysfield at the same time directed them to continue paying their rent to Maysfield.

Because of this contradiction, it would appear that Mastercraft made application to the Supreme Court of Ontario, resulting in an order of the court appointing it to collect rents. If this is so, tenants would be safe in paying their rents in accordance with that court order.

If in fact no court order exists, tenants would then be well advised to seek legal counsel in the matter.

With respect to 11 Overlea Drive in Kitchener, although this property is not the subject of an application to the Residential Tenancy Commission, I am advised that it was acquired by a numbered company, 500887 Ontario Ltd., from Tresilian Developments Ltd. by grant registered as No. 718893 on December 31, 1981. At the time this property was subject to mortgages as follows:

No. 556430 registered November 13, 1975, from Tresilian Developments Ltd. in favour of Victoria and Grey Trust Co. in the amount of $2,030,000, bearing interest at 11.75 per cent, expiring November 1, 1978. Second mortgage No. 643692 registered November 15, 1978, from Tresilian Developments Ltd. to Victoria and Grey Trust in the amount of $500,000, bearing interest at 11 per cent, due November 15, 1983.

By instrument No. 644435, registered November 23, 1978, an extension agreement was entered into between Tresilian Developments and Victoria and Grey Trust with respect to one of the above mortgages in the amount of $2,010,000 at a rate of 10.5 per cent, expiring November 15, 1983. It is presumably this mortgage that is at present in arrears. If that is the case, it would appear that Victoria and Grey Trust Co. is merely exercising its rights as a mortgagee, stepping in to attorn the rents due to the default under its mortgage.

My further information with regard to the property is that on the same day as 500887 Ontario Ltd. acquired title to the property, two additional mortgages were registered as follows:

No. 718894 registered December 31, 1981, in favour of Seaway Trust Co. in the amount of $4,075,000, bearing interest at the rate of 15 per cent, payable monthly at $50,815.25, from February 1, 1982, to and including December 1, 1982. The second mortgage, 718895, registered December 31, 1981, from the same company in favour of Kilderkin Investments Ltd. in the amount of $6,846,000, bearing interest at the rate of 15 per cent, payable monthly at $85,311.15, to and including November 30, 1986.

A corporate search of 500887 Ontario Ltd. indicates the sole director and officer is one David A. Allport, who is solicitor for the company. Tresilian Developments Ltd. has as its sole director and officer one Anthony Hubert Gratt Jr., according to the ministry's corporate records. These two mortgages would seem to be at present outstanding, as well as the mortgages to Victoria and Grey Trust Co., first mortgagee, and Seaway Trust, second mortgagee.

It seems clear, therefore, that what has happened in this matter is a normal exercise by a mortgagee, Victoria and Grey Trust, of its rights under a first mortgage which has gone into default. The tenants should, I suggest, obtain legal advice, and if so advised and the rights of the mortgagee have been validly and properly exercised, follow counsel's advice with respect to the payment of rent.

Mr. Peterson: Mr. Speaker, I would like a supplementary on that. It will take some time to absorb what the minister has told me, but I understand there is now $10 million worth of mortgages on those buildings as of December 31, 1981. I assume the minister has checked into the evaluations and that his regulators, who were inspecting those companies over a year ago, approved of this kind of financial transaction on those buildings and that there is inherent value there to support those kind of mortgages.

From what he is saying, at least about the Ottawa building, it appears that Kilderkin has defaulted. Is that right? Maysfield, which is owned by Kilderkin, has defaulted. Is that just a default with respect to that building or a general default? How does this affect the rest of the tenants who are in the 20,0000 units that are controlled and run by Maysfield at present? Are there any other buildings in jeopardy? Are there any other buildings with tenants who are confused as to whom they should pay their rent? What is the status of the whole situation? Are those only isolated examples or is this whole thing, like the ministry, in a total state of confusion?

Hon. Mr. Elgie: First, Mr. Speaker, I do not accept the last remark. I suggest there is a ministry responding expeditiously to problems facing it in a very responsible way.

Now, with respect to the particular Ottawa --

Interjections.

Mr. Speaker: Order.

3 p.m.

Hon. Mr. Elgie: I've got them going. Oh well. it's all right. We have got to get people going in this world. It had to happen to them somehow.

I have reported with respect to the Southvale property. I have no information about any other defaults by Maysfield at this moment. The honourable member knows there was an application by Cadillac Fairview some two weeks ago with respect to their mortgages and an order was obtained; but the mortgage was paid before the order could be completed, so therefore it did not follow that a receiver was placed in relation to those buildings.

I have no other information about any of the buildings at the present time.

IDEA CORP.

Mr. Elston: Mr. Speaker, in the absence of the vice-chairman of the Board of Industrial Leadership and Development I would like to go to the chairman of BILD, the Treasurer, with respect to the IDEA Corp., which was created a full two years ago. To this point all we have is the appointment of a chairman and two vice-presidents. I understand that as of January 12, 1983, funds were allocated for the corporation but none of these funds are to be invested until March 1983.

Will the Treasurer advise us what IDEA has done in the past two years besides appointing these three members to the board and why IDEA has been so slow getting off the mark? Perhaps he can tell us what new idea he has for the province.

Hon. F. S. Miller: I have an idea of what you are after.

Mr. Speaker, my colleague is a reasonable man. He comes from a reasonable part of the province. I expect him to be reasonable, then, in his expectations of taking what was, I think, a dramatic concept and putting it into action. We chose very quickly as chairman --

Mr. Elston: There is no action.

Hon. F. S. Miller: Oh, there is. We chose very quickly as chairman a very competent, high-profile person in the person of Ian Macdonald. He is the kind of man who literally could have had his choice of governmental appointments because of his proven track record. He was very anxious to be associated with IDEA and with BILD, and has helped us in the last year to develop the concepts of it very carefully after many meetings.

I believe the member will find that there is a president of the company. I think he mentioned two vice-presidents. There is certainly the appointment of an operating board chosen from very high-quality business people bringing a variety of skills, and there has been an allocation of moneys totalling, I think, about $107 million over five years.

Not all those moneys are being held back until future dates. As a matter of fact they start flowing, as I recall, at once for the administration of the business. They really wanted to speed up the flow of funds beyond the five-year time frame: They wanted them all put into a very short time frame, because they have come to the conclusion that there are about six specific areas where research and venture capital opportunities exist. They have defined those. They are setting up the techniques for developing joint co-operation with industry. They have predicted that by the third or fourth year they will be self-supporting instead of requiring further infusions from the government.

I hope they are right. I will believe it when I see it. The fact is that they are trying to bring together the concept of improving the research co-ordination in this country and the concept of improving venture capital, which I believe is one of our greatest needs in North America. To assume that this can all happen overnight and have immediate results I think the member as a reasonable person would have to admit is not likely.

Mr. Cunningham: Mr. Speaker, I think the Treasurer would have to admit that there was great, if not undue, haste to announce the program on January 27, 1981, only days, if not less than a week, before the election was called. How can he stand in his place in this House today and explain to us that no action, short of hiring Mr. Macdonald and two other people, has taken place in the two years that have passed since the announcement of IDEA? What has that done for the hundreds and thousands of people who are looking for work in this province, people who require assistance and are in great despair and in need of employment? How can he stand here and tell us that?

Hon. F. S. Miller: In the first two years of BILD, because IDEA Corp. had not been structured, the bill was passed in this House. It required the members' approval, by the way. The member had an opportunity to discuss the creation of that corporation.

Interjections.

Mr. Speaker: Order.

Hon. F. S. Miller: We did a lot. The member never wants to admit it. He is the paramount critic of the Urban Transportation Development Corp. He will eat those words one of these days. This week I am going to take his leader for a ride on a hydrogen-fuelled vehicle. I hope, if he will come with me. I want to say to the member --

Interjections.

Hon. F. S. Miller: Let the member for Niagara Falls (Mr. Kerrio) calm down. He is trying to live up to his record as the best interjector in the House.

Mr. Speaker: Order.

AUDIO LIBRARY PROGRAM

Mr. Allen: Mr. Speaker, I have a question for the Minister of Colleges and Universities (Miss Stephenson). It is a subject I thought I had left behind me in the past.

She will remember that the Provincial Secretary for Social Development (Mrs. Birch) on December 2 assured this House, the province and Trent University audio library that it would continue in service. Since that time, indeed the next day, the provincial secretary's officials began to muddy the water, stating that all the government's commitment amounts to. is to continue the services for visually impaired post- secondary students. There is no notion of the way in which they will be continued.

As recently as yesterday, the provincial secretariat s committee, meeting with the audio library, would give no assurance or commitment of continuance of service because the matter was "under study" and they were exploring "all options." In the meantime, the periodical audio library in this city has gone into virtual collapse, and has lost its staff and director.

Mr. Speaker: Question, please.

Mr. Allen: What I want to ask the minister is, will she reaffirm to this House the plain words of the provincial secretary that "the audio services provided to visually handicapped people by the Trent audio library up to this time will continue"; or may I ask her and the ministries involved, is the periodical audio library's fate, in spite of its pleadings to the ministry over the last six months about its situation of extreme difficulty and tenuousness of operation and the continuing refusal of support, to be the model for the continuance of service that the Trent University audio library will have to expect?

Hon. Miss Stephenson: Mr. Speaker, the Provincial Secretary for Social Development is indeed a woman of her word and the service which is provided by the Trent University audio library will indeed be continued. The exact mechanism for the ongoing support is not totally devised at this point, but that commitment has been made. As the honourable member knows, there is funding available to that library until, I believe, April 1 and the commitment has been made that the service will continue.

We have been exploring this, not only at Trent University audio library, but in attempting to find a way in which we could ensure that library services for print-handicapped young people and older people who attend a university could be made more accessible.

Mr. Allen: I am pleased with at least the partial reassurance from the minister. I must say, however, that Trent University audio library and Trent University itself have made it plain that the fairly relaxed timetable upon which the committee is functioning really does not meet the requirements of the situation. They already have their staff on layoff notice. Their budget is in the process of wind-down. There are no new orders being accepted from clients. It is quite evident that a timetable that vaguely requires reporting some time in the spring, according to the terms of reference of the committee, is simply not early enough to forestall that process.

Will the minister please urge the committee into high gear? It has met only two out of four agencies in the course of two months and time is running out. Will she move the committee into high gear to get on with the job so that specific assurances can be given in time for that facility to continue without interruption?

Hon. Miss Stephenson: I believe it is the intent of the committee to report within a relatively short period of time. I believe they are in high gear. I believe that they have a very real concern about the task which they have been given and I am aware that they have involved a number of people outside government in the discussions to find the most appropriate vehicle.

3:10 p.m.

Mr. Boudria: Mr. Speaker, would the minister not admit that as a result of the uncertainty her government is creating for the visually impaired, whether it is with that program of her ministry or the lack of commitment of her colleague the Minister of Community and Social Services (Mr. Drea) in providing advocacy service or visual aids to the visually impaired, 14,000 people in this province are not getting the assistance they could get with only a small amount of funds which she could provide? There are 14,000 people in this province who have low vision and she is not giving them any assistance.

Hon. Miss Stephenson: Mr. Speaker, the matter we are addressing at this point is the library service provided for students and staff at universities. I would remind the honourable members that it is more than one and a half years ago that we suggested strongly to the Council of Ontario Universities that it examine its role in this to ensure there was a greater dispersion of the capacity of Trent audio library to a larger number of students in the province. We did not get any kind of positive response from COU. It is unfortunate that did not happen, but the commitment has been made that we will find a way to ensure that this service is carried on and it is our hope it will be improved.

Mr. Allen: Mr. Speaker, I would like to rise on a point of order and to correct the record. If the minister will go back and examine departmental files, she will read correspondence there which indicates quite clearly that when the ministry, having put the question of the print-handicapped, and the handicapped in general, to the universities through COU, a committee was established. It reported back to COU and then it communicated with the ministry asking the ministry what response it had to its own recommendations. Finally, a response was secured from the ministry six months later, simply a reminder that it had no interest in intervening in university affairs.

Hon. Miss Stephenson: Mr. Speaker, I believe the honourable member has reported that with a certain degree of bias, which is anticipated. The request which was made of COU did not produce a positive response related to the suggestion which had been made regarding the organization of the program.

RESPONSE TO WRITTEN QUESTIONS

Mr. Laughren: Mr. Speaker, I rise on a point of privilege. I believe the privileges of one of the members of this House has been abused by another member. I believe the privileges of the Minister of Natural Resources (Mr. Pope) have been abused by the Chairman of Management Board (Mr. McCague). You may recall, Mr. Speaker, that both you and I have been abusing the Minister of Natural Resources for not responding to questions which he promised to respond to on December 17.

We now learn that the Minister of Natural Resources is not the culprit but that he forwarded his response to the Chairman of Management Board for approval and that was meant to be forwarded to the Clerk. The Chairman of Management Board has been negligent and abused both my privileges and those of the Minister of Natural Resources.

Mr. Speaker: I am sure the Chairman of Management Board has been listening intently and will act on your request.

USE OF TIME IN QUESTION PERIOD

Mr. R. F. Johnston: Mr. Speaker, you may --

Hon. Mr. Ashe: A waste of time.

Mr. R. F. Johnston: No, I hope this is not a waste of time. It is to do with the amount of time that has again been taken in terms of the leaders' questions. There were only two back-benchers' questions again today, something I do not think we can afford to have continue.

I would like to applaud two initiatives I saw today on the Speaker's part. One was when he interrupted heckling on this side to say that he saw that we did not want to hear the rest of the question and, therefore, interrupted the flow and moved it on to the next questioner. It also happened that he stopped the Treasurer (Mr. F. S. Miller), and basically said that he thought he had answered the question when he was rambling on and not dealing with the specifics.

I wanted to compliment the Speaker, and to encourage him to be more ruthless with that if he can, because I do believe that the privileges of many back-benchers are being abused because they are not able to get up in the question period even though there is ample time to do so.

Mr. Speaker: I am quite well aware of the problem. I would suggest that those people who are preparing questions for various people, and answers as well, keep them as brief as they possibly can.

REPORT

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

Mr. Harris, from the standing committee on resources development reported the following resolution:

That supply in the following amounts and to defray the expenses of the Ministry of Labour be granted to Her Majesty for the fiscal year ending March 31, 1983:

Ministry administration program, $12,218,500; industrial relations program, $4,592,000; women's program, $1,262,000; occupational health and safety program, $29,950,300; employment standards program, $5,399,000; manpower commission, $1,770,0000; human rights commission program, $4,588,000; labour relations board program, $4,030,000.

MEMBER FOR ELGIN

Hon. Mr. Gregory: Mr. Speaker, on a point of privilege: I wonder if I might, before the orders of the day, draw the members' attention to something that was missed yesterday and on Friday.

I would like to point out to the members, for the record, the celebration of the 25th anniversary of one of the members of this House.

On Sunday, the member for Elgin (Mr. McNeil) celebrated his 25th year as a member of the Ontario Legislature representing the riding of Elgin.

Mr. McNeil was elected on January 30, 1958, in a by-election. Although I know he is not here I would like to ask the members to join me in paying tribute to him.

[Applause]

ORDERS OF THE DAY

FUEL TAX AMENDMENT ACT

Hon. Mr. Ashe moved second reading of Bill 203,

An Act to amend the Fuel Tax Act.

Hon. Mr. Ashe: This bill to amend the Fuel Tax Act, 1981, removes the requirement relative to the implementation of the coloured fuel program that an applicant for relief from the cost of construction or acquisition of tanks for the storage or transportation of fuel must obtain the permission of the minister before committing any funds for that purpose.

Some businesses, in anticipation of the start of the coloured fuel program on September 1, 1982, and needing additional tank facilities in order to comply with the terms of that program, started construction of the necessary facilities, or acquired them, before receiving the required authorization. In all other respects, these businesses qualify for relief from the cost of construction or acquisition of the facilities.

It is not the intention of this government to penalize those who in trying to comply with our program innocently disqualified themselves from financial assistance to which they otherwise would base been entitled. Therefore, I am now moving to remove that particular provision.

As well, I have included in the bill an administrative amendment which will extend the regulation-making authority of the Lieutenant Governor in Council and the minister.

These changes will allow certain ministry officials to act for the minister, prescribe the interjurisdictional carriers required to be registered, identify where labels and seals must be placed on equipment, and prescribe the time and manner for delivering a return required under the act.

3:20 p.m.

Mr. Riddell: Mr. Speaker, I want to tell the minister I am still receiving complaints from farmers who are using coloured fuel. As I receive these complaints, I send them over to the minister, and I have to thank the minister for responding. I trust he has also been responding to the farmers, as he has indicated in his letters to me. Even if he is, that does not seem to be satisfying the farmers, because we are still getting all kinds of reports of fuel pump damage from the coloured diesel fuel.

The red dye in the fuel is being blamed for the damage. Farmers say it tends to jell the fuel, and reports of farmers changing filters each hour are not uncommon. Many farmers tell me they are forever changing the filters in their machinery that uses diesel fuel, and many are replacing injector pumps. In many cases, it costs upwards of $1,000 to repair the damage that has been done by the grime that seems to collect and get into the moving parts of the engine. This wears it out and replacing injector pumps is very costly.

The farmers tell me they have had to have the coloured fuel pumped out of their tanks and they have replaced it with clear fuel. They tell me they are now prepared to do the paper work to make an application for a tax refund rather than take any more chances with the coloured fuel.

Now I am even having people who are in the business of servicing furnaces telling me they are getting much less heat from the furnaces because of the diesel fuel. I believe I sent this complaint over to the minister. They tell me the furnaces are not working nearly as efficiently with the coloured fuel. In other words, they have to turn their thermostats higher to get a little bit of heat,

whereas when they were using clear furnace oil, they were getting fairly efficient heating. That is another problem that has surfaced just recently with the furnaces using the coloured fuel.

If the farmers are going to curtail the use of coloured fuel and apply for the tax rebate, I wonder if the minister is prepared to reimburse them for the interest on the money they otherwise would have received if they had that money in the bank rather than having to pay the complete cost of the fuel and then receive the rebate. It used to take six months, but the farmers tell me they now get their rebate once a year. That is money they are not collecting interest on.

If the minister insists on carrying on with this coloured fuel program, perhaps he should also think of reimbursing farmers the interest they are losing by having to pay for the coloured fuel and getting the tax refund only at the end of the year.

We are also getting letters from machinery companies telling the farmers that if the damage done to the equipment can be traced to the coloured fuel, that piece of equipment will no longer be covered under warranty. I have here several notices from machinery companies which tell farmers they will not consider the piece of equipment to be covered under warranty if it can be shown that the coloured fuel is causing the problem.

The farmers are very unhappy with the coloured fuel program. They do not feel they were the cause of the problem in the first place. When the minister introduced the program, he indicated that government was losing in the neighbourhood of $25 million, but I do not think the farmers are guilty of much of that loss.

I will not deny that farmers may to a certain extent use diesel fuel in their pickup trucks, but I am not convinced that the pickup truck is strictly a pleasure vehicle. Farmers use pickup trucks more for farming purposes than they do for pleasure, yet for some reason they are being blamed for the loss the government has been incurring.

We know it is probably the large distributors or truckers who are the guilty parties. I cannot understand why the government does not put more inspectors on the road to seek out those guilty of using the fuel without paying tax, rather than subjecting farmers and homeowners with oil furnaces to the grief and losses they have suffered since the introduction of the coloured fuel program.

As I have said, why could there not have been more inspectors put on the road? I am sure they could have discovered those guilty of using diesel fuel without paying tax, instead of introducing this coloured fuel program, which has cost the farmers a lot of downtime. It has added to the difficulties they were already facing with high input costs and interest rates, and low prices for their products. Now the ministry comes along with a diesel fuel program which prohibits farmers from getting their crops planted and harvested on time.

The farmers are incurring greater expense than usual by having to replace filters almost on a daily basis or by having to repair their injector pumps or to install new ones. The repairs alone can cost up to $1,000 or more.

I ask the minister, once again, whether he will reconsider putting a moratorium on this program until he can come up with a better dye to put in the fuel, so that the farmers will not have to face these problems. Why does he insist on carrying on with this coloured fuel program? I do not think it is necessary for the reasons I have already given. It is causing farmers a great deal of hardship, which they simply cannot stand while they are going through these very difficult economic times.

I just mention this once again and ask whether he will give reconsideration to this program. Yes, Mr. Speaker, we are talking about Bill 203, which has to do with coloured fuel to a certain extent. I simply have to speak on behalf of the farmers, who are not happy with this program. Even the Ontario Federation of Agriculture, at its last meeting, passed a resolution asking that a moratorium be put on this program until the government can come up with a better dye to mix with the fuel which would not cause the problems that are occurring at present. I will be anxious to hear the minister's response.

3:30 p.m.

Mr. Breaugh: Mr. Speaker, it was with some reluctance that I recommended to my caucus that we support the bill, and we will. The reluctance is centred on the notion that this is an occasion to be marked, because the government now is admitting that some of the things it tried to do were wrong. In fact, in this particular bill the minister is attempting to put forward a solution to a previously caused screwup. I suppose we should be grateful at least on this one occasion to have this particular minister, who is not given to doing this, admitting that he made a couple of mistakes here and there.

The reluctance centres on the fact that this is not the first time this minister has had problems in administering what has been for the Tories in Ontario a long-standing political tradition. That is the old tradition that if you take a dollar off somebody and give them back a dime, they somehow should feel so grateful they got something back that they will support you once again.

It is difficult to imagine that a minister such as the current Minister of Revenue would have difficulty giving away money, but he does. This is not the first time he has had trouble giving away money. We are all familiar with the problems relating to rebates for senior citizens which were the subject of massive advertising programs. Those problems still persist despite the fact that there are hot lines, advertising programs and computers at work. There are still foulups there.

This particular bill purports to correct an injustice in this one. I am not so terribly sure it will do so, but we have to give the minister the benefit of the doubt and at least give him an opportunity to rectify what he obviously fouled up in the first instance. We seem to have a minister here who is giving a new depth and clearness to the word "inept." None the less, he is doing that and once again he has presented us with an occasion when the Legislature must correct some faults in a program that less than a year or so ago he purported to be a great solution.

I think it is worth putting on the record once again that there are problems with the coloured fuel program. Unlike the minister, I do not believe it is everybody else who is wrong. I believe that in some major perspective one has to admit that the government took on the coloured fuel program because it perceived there to be a problem in getting enough revenue. To rectify that situation, they sought to provide a correction that would cause the ministry the least amount of inconvenience and maximize the amount of money that would come in. The problem with that, of course, is that the inconvenience now is being handled by the consumers.

Although I have heard and read on several occasions that they do not know how to mix the dye properly, that they do not use the right kind of dye and that they use the wrong mix in the wrong weather, there now seems to be, as the previous speaker indicated, sufficient evidence to say that the program has its problems, that not everybody out there can be fouling up and that perhaps the foulness might be central to the kind of program the government is trying to run.

It cannot be that every piece of machinery out there is operating incorrectly. Nor can it be, as some would say, that all the farmers and suppliers out there do not know what they are doing. It seems to me there now is sufficient evidence to indicate that this is a rather awkward way to identify who is using the fuel properly and improperly.

I think we are faced with a program that was flawed initially, even though we might have reluctantly granted the minister one point, which was that there were revenues that should have been coming to the government but they were not getting. It seems to me they picked a flawed program in the first instance, and the bill we have before us this afternoon attempts to correct one of those flaws.

I wish I had more confidence in the minister and in his ability but, unfortunately, I do not. We will support this bill, because not to do so would be to attempt once again, as the minister often does, to punish the victim; and we do not want to do that. It seems to me he has admitted his fault, he has put it in print and put it before the Legislature, and we are prepared to accept his humble apology.

Mr. McGuigan: Mr. Speaker, I also rise to support Bill 203 because, as the honourable member has just said, to do otherwise would be to punish people who went ahead in good faith and put up tanks and various construction items to look after their customers because of the extra requirements that were imposed on them by this program.

This bill illustrates that this program was brought in very hurriedly, without proper consultation with the people who administer the Gasoline Handling Act and without consultation with the users. I would think

an act that had such an impact and would become as visible as coloured fuel becomes to the user would have required that some hearings be held or at least that some advertising be done to fully explain the technical matters that were being carried out.

The minister has done that somewhat after the fact in some of the bulletins he has put out. They describe some of the difficulties. In one of the bulletins they describe problems with the injector system. I am talking not about the injector systems of diesel engines but about the injector systems at the refineries that inject this material into the fuel. Even at that point they are having some difficulties.

I just want to read from the bulletin, and again I want to point out that we are talking about events at the refinery:

"The proper mixing of FOM-50 when manufacturing dye mix, combined with the proper placement of the dye-line outlet and the use of a five-micron filter prior to the dye mix being received by the injector, eliminates precipitate in either the injector or in the fuel being coloured. The proper mixing and filtration of dye mix prior to interjection in the fuel through manual dyeing also eliminates any precipitate in the coloured fuel."

This points out that when proper procedures are not followed, there are difficulties at the refinery. It follows that, if proper procedures are not followed, there are difficulties for the user. This is particularly true in the case of fuel that was manually treated, fuel that was in transit between the refineries and the users during the introduction period.

Another thing that is pointed out in these bulletins is that some of the people who manually treated the fuel, who manually put the dye into the fuel, used summer-grade diesel fuel. As all members know, we change the particular qualities of both diesel and gasoline to prevent them from being affected by cold weather. I think diesel fuel tends to solidify or wax up or turn into a gel in cool conditions. If you look at the calendar, you will see that a lot of this fuel hit the farmer during the fall months, when he was running into cool conditions. Summer-grade fuel was used in some instances as a carrier to mix the dye and then added to the fuel.

What we are really seeing here is that a number of mistakes have been made, and I think it is incumbent upon the minister perhaps to confess, as it is good for the soul; but it would also be good for the program. We in this party really are not opposed to the objectives of the program. We realize this is perhaps, if not the best way to solve it, at least an attempt to solve it. If the minister had explained to people the shortcomings that were evident during the introduction of this program, perhaps it would have been accepted and it would have become the norm.

Farmers seem to have had a lot of trouble with filters during the fall. I have had calls, not hundreds but several, from people complaining that their fuel filters plug up. They state that the life of the fuel filter is not as great as they would normally expect.

There is a great deal of suspicion and uncertainty out there among the users. I would hope that before spring, when we again come into the season of heavy use, the minister would really come clean and lay it on the line to let people know what has happened.

3:40 p.m.

While we approve of the retroactivity of payment for changes that were made in tankage and for construction, I have heard from one of the distributors in my area -- and I know other members have heard it from other distributors --that the cost allowance, which I believe is $4,000 per tank wagon, is not nearly enough to convert the tanks to their new use. Under the old system, most distributors had a tank wagon with four compartments. Now they believe they require five compartments owing to the regulations of the Gasoline Handling Act.

I have read two quotations into the record, on a previous occasion, stating that to convert a tank wagon to five compartments would cost approximately $20,000 as against the $4,000 that is allowed. I noted that shortcoming, and I am sorry the minister did not include provision for it in his bill. However, I believe it could be changed by regulation, and I would urge the minister to do that.

We support this bill, but reluctantly.

Mr. G. I. Miller: Mr. Speaker, it gives me some pleasure to bring to the minister's attention the problems affecting many farmers in my area connected with the use of coloured fuel. It was not brought to our attention until after the procedure was brought into effect that it was causing the farming industry so much trouble.

As an example, one farmer uses a tomato picker and employs 12 people in the operation. After using the coloured fuel, he had a great deal of trouble with the filters on his equipment which caused downtime. It has cost this small businessperson a considerable amount of money.

As my colleagues have pointed out, it is not only the farmer who is affected. It is also costing the distributor money, which has to be passed on to somebody and that somebody is the end user of the product. This is another indication that the government is increasing the costs of the small businessman instead of assisting him.

The minister is collecting $25 million more in revenue, but it is also costing more to implement this program. He has had to hire more people, which I believe cost around $1 million; if I am wrong, the minister can give us the correct information when he responds. If that money had been put into place under the old system, it would not have created so much chaos and so many problems for the farmers.

During the combine operations last fall, the most severe problems involving filters caused by using the coloured fuel apparently were experienced by Allis-Chalmers Canada Inc. That was brought to my attention, and I would like to bring it to the minister's attention.

I wonder, would the minister indicate in this Legislature whether farmers could use uncoloured fuel and then apply for a tax rebate; that is, to follow the same policy as they do with gas? If so, rather than applying once a year, could they do so on a monthly basis so as not to tie up their money too long? The minister will realize that interest rates are a consideration. When one has to borrow to obtain supplies, interest rates are an added expense for any business. We need all the help we can get in the farming industry and in small businesses to keep them alive today.

Hon. Mr. Ashe: Mr. Speaker, I want to thank all the honourable members for their participation in this debate on Bill 203, and I would like to touch on a few of the issues they raised.

First, I do not acknowledge that this bill is rectifying a mistake per se. The original bill was written very deliberately to indicate to members of the general public that they should come forth with a proposal, we would approve of it, and then they would go ahead with it. That is exactly what we are doing.

What did happen was that some people, through not knowing what was in the bill, went ahead in good faith to prepare for the start of the program on September 1. They made commitments or expenditures and only found out afterwards that they should have had approval of their program first. The program they went ahead with met all the criteria, and they would have qualified if they had come for permission first. In my view, that is not a reason why they should not receive compensation. That is the reason for this bill.

If we were doing it all over again, the bill would be written in exactly the same way. It is only reasonable and prudent to suggest to people that when they are making expenditures that will involve some public funds, they should have some approval in advance to indicate that what they are doing is fair, reasonable and responsible, not only to themselves but also to the taxpayers who will be involved in that program in terms of rebates. It is not a rectification in that sense.

As for the various problems, there have been some: I do not think there is any doubt about that. The member for Kent-Elgin (Mr. McGuigan) particularly touched upon the main reason for some problems we have checked out; that was in the downstream handling, the hand-dyeing that took place, when people did not follow the instructions.

I guess they thought it was not important to have some kind of accuracy in how they would hand-dye the fuel, and they were a little overgenerous with the quantity of dye and/or they did not mix it properly after adding the dye. This has caused some problems, mostly in the way of inconvenience, it would appear, but none the less some problems.

As we moved along and the injection systems were put into operation so that it is done at the refinery level and some of the earlier startup problems were overcome, it is safe to say the number of concerns and complaints dropped off considerably.

In regard to heating deficiencies and inefficiencies, frankly, I am not aware of any as yet. We have had one or two complaints about space heaters, and they have been investigated. They did not have to do with loss of heating efficiency. It was more a case of a filter being clogged.

I have had our people investigating all complaints that have come to us either from honourable members or from the Ontario Federation of Agriculture. I have had a good dialogue going with the president of the federation. We have been following up on them all. It is the obligation of the inspector to report to me in detail about all the complaints. I have those that have been followed up and reported on to about mid-January. There are 109 in total.

In most instances it is safe to say, and this is generally being backed up by the marketplace, that the main problems are not really related to the coloured fuel. I acknowledged before that there were some. I am not saying there were none, but the majority of the problems, when one got right down to it, had nothing to do with the coloured fuel.

3:50 p.m.

The main difference was one of perception. If one ends up looking into a clogged filter or if one changes a filter and looks at it, now it is red; before it looked gray, brown or muddy because of the sediment that had accumulated and collected. That is its purpose. That is exactly what the dye is supposed to do. It said there were red items in the host fuel and it indicated it accordingly because, naturally, the sediment turned red.

In terms of the business from some supply companies that was referred to by the member for Huron-Middlesex (Mr. Riddell) where they would not honour a warranty if it could be shown that there was a problem caused by coloured fuel, I have not been made aware specifically of any such instances.

There is no doubt at all that it is still a pretty safe statement for anybody to put out. It has been my understanding that no reputable manufacturer has even suggested that, because they know very well it would just be a particular crutch they were trying to hang their hat on in case something went wrong with their equipment. We would be quite prepared to back up anybody who was getting the excuse from a supplier or a manufacturer that it was trying to negate a warranty on the basis of suggesting a problem was caused by coloured fuel.

As to why we went into the program, I am not denying that one of the principal reasons was to close the loopholes that were there. There were revenues that were not being paid into the Treasury in an estimated amount of some $25 million. There is no doubt it is an estimate; it could be more and it could be less. The other principal consideration for going this route, because others were examined, was to follow with the government's plans for deregulation, and the Fuel Tax Act does exactly that.

If we had gone some other suggested routes, the regulations and paperwork that were in effect before would have been multiplied many times. The Fuel Tax Act eliminates many thousands of people from having to worry about reporting, forms, claiming refunds and so on.

I have said this many times before, but I think it bears repeating. It is exceedingly important to put on the record that Ontario is not the leader in this program at all. As a matter of fact, we are one of the last jurisdictions in Canada to go to a coloured fuel program. The adjacent province to the east of us, Quebec, has had the program in existence for more than three years using exactly the same dye, put forth by exactly the same manufacturer, and used in exactly the same numbers, 20 parts per million. It had a few startup problems as we have had but, since the program has been in place, I understand it has had virtually no problems with it and it is serving a very useful purpose.

As to those farmers or others who choose to go the route of buying clear fuel and claiming a refund, we will allow them to do that. That is an option and a choice they make. We have come up with a program that will not necessitate them to do that but, if they feel more comfortable with it, so be it; they make that choice. But it would be unfair to suggest that they should receive interest on their moneys because they made a choice to go that route rather than the program that eliminated their having to finance those costs.

As for the time element involved in rebates, it is a matter of anything that is reasonable depending on the volume of the rebate. In other words, for anybody who is using a substantial amount of fuel, and hence claiming a substantial rebate at a time, we will handle it on a regular basis.

The idea of not putting in a claim too often is particularly geared to those who would fill in claim forms for a relatively few dollars; and I mean that in a sincere sense, just double-digit dollars rather than triple-digit dollars. In fact, it is hardly worth anybody's effort, theirs or ours, to be handling a multitude of these small claims. We encourage them to accumulate the claims for some reasonable period of time, but we will process them very judiciously when they do come to us.

In terms of the cost of the program and the actual rebate per se, there are indeed costs. There is the capital cost of the tankage etc., which is a front-end or once-only cost that will be fully expended in the first couple of years of the program. Then there is an ongoing cost, which will approximate up to $1 million a year in total, but I suggest that $1 million producing something like $25 million is a pretty reasonable rate of return for the investments that are being made.

As for the actual costs of tankage, changes to tank trucks and so on, all our figures and proposals were examined by outside consultants, people who are experts in the field -- we do not profess to be experts at all -- and were approved by them.

The program we are funding is felt to meet all the regulations of the Gasoline Handling Act and other legislation and should suit the needs of virtually all situations. There is no doubt that there will be the odd situation in possibly somewhat remote territory where there may be a little inconvenience in terms of their delivery schedule. I acknowledge that and accept that we just cannot take care of every situation, but I think we have taken care of most of them.

The member for Kent-Elgin (Mr. McGuigan) talked about one problem that has been evident in some parts of the province, and that is the one relating to using summer-grade diesel. When we investigated this, we found that was exactly what happened: it was a result of using the wrong fuel, not the wrong dye. The dye material and the dye mixture were correct, but the dye was improperly added to a summer fuel in the late fall and early winter. Whether or not the dye was present did not make any difference to the problem caused by the delivery and ultimate usage of that fuel; it would have happened anyway.

But it was not caused by the dye. We have had several of those situations, and in a few instances the consumer has changed suppliers.

Mr. McGuigan: It was the use of the dye that precipitated the use of the summer-grade fuel.

Hon. Mr. Ashe: No, it did not. It was a matter of the supplier using the wrong host fuel, but that was a choice he made.

Briefly, I want to give some idea of half a dozen or so of the particular concerns that have been passed on by the member for Huron-Middlesex (Mr. Riddell). I think it is interesting to note a few of them; there are 109 in here, but I will try to pick out very specific ones.

One received December 16 from the honour- able member said an inspector called who happened to be a Mrs. Thomas of the Simcoe South Liberal Association. Some farmers had complained of filter clogging. They really had not had any themselves and there was satisfaction expressed for our interest. She in turn passed this on to another concerned person in Utopia, Ontario. Our inspector called, and Mr. Hammond stated that he had not experienced any problems but had read of them.

I can cite

chapter and verse of many situations of this kind where there was only a perceived problem and not an actual one. Another one from the same member said the inspector called, and Mr. Broadfoot stated that he did not have any complaints regarding problems with his equipment but he had heard rumours of other farmers who had problems.

In another case our inspector called and found that the fuel tank had not been cleaned out in many years; in fact, the problem was the dirt in the tank. Again it had nothing to do with the fuel. That happened to be a Mr. Finkbeiner.

Another one: Vincent Farm Equipment was called on after checking with Mr. Hunkin, and Mr. McClure of that company stated there were numerous reasons for the Hunkin tractor problems. He stated that they do a large volume of tractor work and have had no coloured-fuel-related repairs.

4 p.m.

I can go on and on with this. Another one is Mr. Webb. He has had no problems to date. He switched to clear fuel because of problems experienced by others. Some have done this, and that is fine. It is a matter of personal choice. If they want to go back to the method of claiming rebates and so on, we can accommodate them. I want to make it very clear, however, that many of these so-called concerns were not really concerns when we got to them. People had heard about them or had been told that somebody else may have had a problem.

In another case somebody ended up switching fuel suppliers, after examination, from Gulf to Petro-Canada. That was also from the member for Huron-Middlesex. Last but not least of his examples was the fuel pump situation of Mr. Shillinglaw. As of January 6, the fuel pump was still on the combine even though the problem was apparently in the third week of December when the pump was taken off to be sent in for service. We are still following up on that. I just wanted to let the member know we followed up on those people.

In this case, I presume it was because the combine was laid up for the winter, and he had just not got around to taking it off yet. We followed that up with him and will continue to do so.

There are many similar situations. I want to thank the members for their support of this legislation. I think the concerns are being overcome, and it is more a matter of becoming accustomed to the fact that the host fuel is now a different colour than it was before. In fact, the colour itself has not been, in most instances, the cause of any problems that we have been able to ascertain out in the field.

Motion agreed to.

MUNICIPAL CONFLICT OF INTEREST ACT

Hon. Mr. Bennett moved second reading of Bill 14,

An Act to revise the Municipal Conflict of Interest Act.

Hon. Mr. Bennett: Mr. Speaker, the purpose of this bill is to revise the existing act in order to make it more understandable to the layman, to make it easier for municipal councillors and the members of elected local boards to do their jobs and to levy more severe penalties in cases where a contravention has resulted in personal financial gain. The revised act retains the same basic purposes and procedures of the existing act, and provides a code of conduct governing the entire field relating to conflicts of interest as they may arise in relation to members of municipal council and local hoards in the province.

Bill 14 has been drafted in the light of considerable experience with the current Municipal Conflict of Interest Act, and follows a major critique and proposal for reform by the Association of Municipalities of Ontario. The bill has been drafted after consultation with AMO and the Ontario School Trustees' Council. Copies of the bill have been sent to every municipal electric utility, school board and municipal council in the province.

The failure of a member of a council or of a local board to disclose a pecuniary interest in any matter under consideration at a meeting of a council or a local board will render the member liable to having his seat declared vacant, being disqualified from being a member of any council or local board for a period of up to seven years, and having to make restitution. A major reworking of several sections has been done to correct drafting problems, to improve clarity of expression and make the order of presentation more understandable.

The major changes from the current act are the addition of a new exception by reason of a member having a pecuniary interest in common with the electors in general; an expansion of this disclosure provision to require a member to declare the nature of his pecuniary interest; and a new penalty provision that would allow a judge to order a member to make restitution in cases where the contravention has resulted in personal financial gain.

As we proceed through, I understand the members of the opposition would like this bill to go to committee and we are prepared to recommend, after today's second reading, that it go to the standing committee on general government. I believe at that time we will have two or three amendments to make relating strictly to some wording and to some dates that were put in the bill when it was originally introduced.

Mr. Epp: Mr. Speaker, I welcome the minister's agreement to send this to committee because I know a number of people have asked to have it go to committee, if only for a short period. I am not sure there will be many representations, but there will be a few, I am sure.

I also want to commend the minister for being here today. Pieces of legislation often come before this House that affect his ministry and we have not seen him here for legislation for some months now.

Hon. Mr. Bennett: Where were you last Tuesday?

Mr. Epp: With that exception.

Hon. Mr. Bennett: I explained the reasons for my absence. They are in Hansard.

Mr. Epp: I want to commend the minister for being here. I have made points in this Legislature when he has been absent, and I think I should obviously make a point when he is present.

I welcome this legislation. The municipal councillors of this province welcome the legislation. The trustees of school boards welcome the legislation. Board members, commission members and so forth welcome this legislation. It is a piece of legislation that the ministry has brought forward together with the municipalities, with a lot of prodding by the municipalities. Of course the ministry has seen itself that there are certain deficiencies in the present legislation.

As a result of this, we have a much improved conflict of interest bill before us which will clarify many of the areas of concern that politicians have expressed over a number of years. There is no doubt we needed the legislation. There was a considerable amount of pressure last fall. We wanted to bring it forward, particularly since the present Minister of Intergovernmental Affairs (Mr. Wells), who had the responsibility for municipal affairs, had promised it a few years back and the present minister also had promised it. We finally have it before us.

As an interesting sidelight, a number of people in December were blaming the opposition parties for the delay of the legislation. That was somewhat surprising to me; why would anyone on this side of the House be criticized for holding up the legislation when we do not order the business of the House? Our answer at that time, as always, was that the government can bring forth its legislation whenever it wants to.

Hon. Mr. Bennett: I am glad the member is smiling.

Mr. Epp: The minister is smiling, but he knows he can bring it in at any time. As the Speaker knows and can substantiate, the government orders the business of the House as it sees fit.

For their own reasons, they chose not to bring it forward. Nevertheless, if at any time they want to abdicate that particular responsibility, we will be glad to take up the gauntlet and do our bit, but they should not blame the opposition for holding up second reading of this bill or any other bill because they can bring them forward any time they want.

Mr. Ruston: Bring them in any Wednesday.

Mr. Epp: That is right. When I pointed this out to some of the municipal representatives they had to agree with me. Nevertheless, they still came around to see us, and of course we were glad to see them because they always have a substantial contribution to make.

Looking at this piece of legislation in a historical perspective, we have to go back to 1973 when the present act was proposed and was adopted on third reading on January 17, 1973, I am told, when it also got royal assent. It was printed in the Ontario Gazette exactly one month later on February 17, 1973.

Prior to that, conflict of interest for municipal politicians, county school board trustees, commission and committee chairmen and so forth, was treated in the Municipal Act. It was dealt with in kind of a three-pronged way. There was a

section dealing with the prohibition against holding certain offices; there was a prohibition against contractual relationships, direct or indirect, between the municipality and members of council, and there was a requirement for the disclosure of any pecuniary interest in contracts discussed at a meeting of a council or of a local board.

4:10 p.m.

In its wisdom, the Legislature in 1973 brought in new legislation that I think was an important improvement over what had gone on before that. Nevertheless, after 10 years of having the present act in force, it has been found wanting in many areas. The new legislation is a real improvement.

I just want to quote a statement made in Municipal World by Mr. Michael Smither, the co-chairman of a group of primarily municipal politicians who prepared the Report on Municipal Conflict of Interest, Association of Municipalities of Ontario, 1979. It is a very substantial report, and I commend them for doing this work. When we read through it we find that they have really done their homework, and it must have been of substantial assistance to the ministry when it drafted the legislation.

Mr. Smither said: "Unequivocally, the intricacies of the subject should be lucidly expressed in statute form with particular attention to detail and simplicity. However, the Municipal Conflict of Interest Act, 1972, is incomplete and ambiguous and in numerous instances has been misunderstood and disregarded. What should be easy-to-comprehend procedures have become a trap for the unwary and a subject of magnitude in the minds of the members, the public and the press." When we look at the present act we find exactly that.

Mr. Smither goes on to say that the departure from the previous legislation "rejected the former attitude that politicians are corrupt and adopted the more realistic assumption that politicians are at least as honest as the persons who elected them." This was as a result of the new legislation that was brought in some years ago.

He goes on to say with respect to equal rights for members: "The new statute no longer provides for disqualification for contractual relations with the municipality or local board. It thereby permits councillors generally to enjoy the same rights as any other citizens to do business with the municipality or local board of which they are a member, provided that the transactions are open to public scrutiny and the member has abstained from participation or decision-making when such matters are under consideration."

When we look at the proposed legislation, the member, be he a member of a council, a board or whatever, has to indicate clearly his or her particular conflict of interest. In the present act that is not the case. Members just declare a conflict of interest but do not indicate what that conflict is. In the proposed legislation they are going to have to indicate the exact conflict.

I want to look at some of the conflicts of interest that have come to our attention in the last few years, and I am sure these are but a handful of the many that have gained the local attention of the populace and the media.

I have one in Cambridge four or five years ago where an alderman was shown to have a conflict when he moved a motion to have George Street extended, which would have taken traffic off Blair Road, the street on which he lived. The judge in that case, Judge Costello, found that this person did have a conflict of interest and he was removed from council.

I am not sure whether there is a direct relation between his having been removed from council and his not being re-elected to council in the next election, which was about two months away. He was removed from council because he was shown to have a conflict of interest. As a result, he was not re-elected to council. I am not sure whether the electorate endorsed that particular finding of conflict of interest and in a sense endorsed his removal from council or not. Anyway he was not re-elected.

Then there was another conflict in the same municipality. This was in March of 1982, where an alderman who had a sign company represented a client before the planning committee, of which he was not a member. At that time he indicated he was appearing before the committee as a private citizen. The judge later found that he made a bona fide error in judgement and did not remove him from council.

It is also interesting to note that the person who pressed the charge against him was a former alderman in that municipality. I am not sure whether this alderman defeated the former one or not, or what happened there, but the judge felt that this person did not have a conflict of interest to the extent that he should be removed from council. He said he had made a bona fide error in judgement, and as a result he remained on council. The judge also said that the person who had made the bona fide error in judgement should pay the legal fees of the complainant in this case.

The case is interesting because a citizen of the municipality pressed the charge. The

article points out that there are many instances in Ontario -- and I have seen it myself -- where aldermen, particularly those who are lawyers, appear before council in another instance, represent a client and they are never charged with having a conflict of interest. That is not to say that they would not be found guilty, it is just to say that nobody really presses the point at that time.

In another case, in Windsor, we find a conflict of interest where a member of the school board tried to balance working for one school board while serving as an elected member of another school board. In this case, he was a vice-principal with the public board and chairman of the separate board. When he cast the deciding vote that approved a teachers' pay raise, a ratepayer took him to court on the charge of conflict of interest. The judge agreed saying that this alderman did indeed have an indirect interest in the teachers' contract. This person appealed the case and the decision was upheld.

This is another case involving teachers. I am surprised how many teachers across the province -- and I am not suggesting there are hundreds of them, but there might be one or two dozen -- are members of school boards and also members of council and have to make a decision on the expenditure of money. In this case that was found to be a conflict.

There is still another case where the mayor of Oshawa was involved in discussions of the plans for Marion Place in Oshawa, a proposed senior citizens' residence planned by the congregation of St. Mary of the People Church. When this matter came before council, he said he was a member of the church and wondered whether he had a conflict of interest.

The

article goes on to say, "Isn't there something wrong with conflict of interest regulations when they are so obscure that an elected representative must consult a lawyer about whether or not a conflict exists?" In this case his lawyer suggested he did not have a conflict, but this person felt that at least it was necessary for him to find out whether he did have a conflict of interest. I do not think anything more --

Mr. Breaugh: Excuse me, Mr. Speaker. I do not mean to interrupt the honourable member, but I think we ought to correct the record on what the member is quoting. It was not the mayor of Oshawa. It was a member of council for the city of Oshawa, but not the mayor.

4:20 p.m.

Mr. Epp: If he was not the mayor at that time, he was the mayor a little later.

Mr. Breaugh: Just to correct the record, the member is raising the case of Alderman Michael Lisko in the Marion Place case, where he was challenged about a conflict of interest, but it is not Mayor Allan Pilkey.

Mr. Epp: I will read the article. Maybe I read it too quickly. It points out, "Mayor Jim Potticary pointed out again this week how silly our laws are, or lack of laws, and conflicts of interest are." It abbreviates there. As mayor of this city, he was involved in discussions on the plans for Marion Place, a proposed senior citizens' residence planned by the congregation of St. Mary of the People Church.

"The mayor, a member of the congregation, found that he might be in a delicate position and could be involved in a conflict of interest, considering some of the decisions that had been rendered. He has since consulted his lawyer and has been advised he has no conflict and can therefore take

part in any discussions on Marion Place. But isn't there something wrong with conflict of interest regulations when they are so obscure that an elected representative must consult a lawyer about whether or not a conflict exists?"

That is in this

article in the Oshawa Times. If I am wrong, I can only say the Oshawa Times is wrong and I apologize for the Oshawa Times being wrong.

Mr. Breaugh: The Oshawa Times is usually wrong. I should point out that Jim Potticary is a prominent Liberal who was defeated by Allan Pilkey, a prominent New Democrat. Allan Pilkey is now the mayor of Oshawa. Jim Potticary is now back on the council of the city of Oshawa.

Mr. Epp: If he wants to point that out, I can point out that Morley Rosenberg was a prominent New Democrat and then supported the Conservatives.

Mr. Breaugh: He never was that powerful.

Mr. Speaker: I think we should be referring to the bill.

Mr. Epp: Some people would suggest that when his brother Lenny comes before him and wants to make some change, he will have a conflict of interest. So there we go. There is also a third brother. If he wants to speak about Oshawa, we can speak about Kitchener.

Nevertheless, I can only say, in referring to the mayor, that is what this

article indicated. If the

article is wrong, then I am wrong. But the

article should be right since a member of the press wrote it.

There are a number of other instances where we have had interesting situations. In Hamilton, back in 1980, there was a member of the council who in May 1978 was a member of a five-man board of control which approved a $610,000 contract for Saltfleet Construction of Stoney Creek for the foundations of the library market complex.

Saltfleet then bought concrete for the project from Day and Campbell, a company of which this alderman is a co-owner. The tender was approved in May but there was no bona fide deal with Day and Campbell until a couple of days before June 1, when the shipment of concrete was actually made to the site.

What happened was he was a member of a board which approved the contract, but his firm did not get something until much later. It was not part of it. He wondered whether he had a bona fide conflict of interest.

Then there is the case of Hazel McCallion, which is well noted, who was ruled to have the costs assessed against her by Judge West in this case because West had ruled McCallion committed technical breaches of the act by participating in a November 2, 1981, council meeting dealing with land development in seven planning districts. In this case, Mayor McCallion and her husband own a house in one of those districts. That particular case was appealed and upheld.

What we have here is a number of instances -- I have more here, but I will not deal with all of them -- where people were found to have a conflict of interest. What the present law does is clearly lay out what people should do if they have a conflict of interest.

In my own case, in almost 10 years on council I declared a conflict of interest in one case. That was towards the end of my last term. The reason I declared a conflict of interest was because my property backs on to park land. Farther up the park land there was a development of about 25 acres. They were going to build about 100 houses, four or five houses per acre. There were some wells there. Some environmentalists indicated that if the development were to go ahead the wells might be interfered with and dry up. Those wells in turn were supplying water to a lake which was in the green belt. As I indicated, my property backs on to that green belt.

I declared a conflict of interest because if that lake in fact dried up, it would affect the green belt from a visual aspect. In that case it might in some way affect the value of my property. I was lectured by one lawyer from Cambridge who represented one of the developers and told me I did not have a conflict of interest, but I felt that in fact I did. To this day I still feel I did the right thing by declaring a conflict because someone in that case could have taken me to court.

One of the interesting things we have in the new legislation is that in dealing with some of the areas and clarifying some of the points, the definition of relatives has been clarified. It encompasses only the spouse, the children and the parents.

As I indicated earlier, the person has to declare a conflict of interest and describe what it is. Another aspect is that municipalities may take out insurance for members who are seen to have conflicts of interest. Of course that insurance cannot be drawn on if the person is found guilty. Obviously there is no way that somebody should be found guilty and then have somebody else pay his legal fees; he should have declared that earlier.

Another interesting thing here is that the quorum stipulations are changed so that as few as two people can vote on a particular matter. If everybody else has a conflict of interest and fewer than two people are available to vote on a matter, they then have to take it to a judge and get his approval to proceed.

Two other aspects in here are, first, the exemptions and interest in common with electors generally, which should help eliminate some of the frivolous conflicts of interest that have been charged over a number of years, and second, the

section that covers remote and insignificant conflict.

As I have indicated, the act is a good one. The municipal leaders and school board trustees and so forth are particularly pleased with most of the conditions in it. Only time will tell; it depends on how the courts rule on people who accuse others of having a conflict of interest and whose cases go before the courts. But on balance, it is an improvement over what we have and I think the municipal politicians out there will be pleased with its application.

4:30 p.m.

Mr. Breaugh: Mr. Speaker, we are pleased to support this bill on second reading. We are a little perplexed as to why it actually took so long to have the bill finally reach the Legislature for second reading debate.

Many of us who are interested in municipal politics have been aware for some time that there continue to be a number of vexing situations around conflicts of interest that do not seem to resolve themselves nicely in court. Many of us are also aware that the Association of Municipalities of Ontario, through their various committees and executive, have been grappling with the various parts of this problem for some time now. In fact, about two years ago they arrived at the conclusion that is now before us in this bill, or something very close to it.

So it has been sitting on the back burner for quite a period of time. In my own caucus, for example, I have been prepared and anxious to get at this legislation for almost a year now, having recommended to my caucus that we support this bill, and we have not been able to do so. Maybe the minister took a look around the gallery this afternoon and decided that the full galleries here -- two people being in attendance whom I can see from my vantage point -- perhaps reflect the interest of the population at large in the matter.

But among those people who are serving on municipal councils and school boards there certainly is a keen interest in attempting to clarify this whole concept of conflict of interest, and for many of us the proposal that is now in front of us in legislative form is a good, sensible compromise piece of legislation. There has been a request from this side, particularly from me, to have at least a small number of public hearings. It is not that we want to go back to square one through all of the work that has been done by AMO, for example, on this matter, but there still are a number of questions to be answered.

We think this can best be done by having an opportunity for the various groups that will be directly affected by this legislation to come before a committee of the Legislature to present once again, perhaps in some cases for the seventh or eighth time, their positions on the bill. I also think there needs to be a bit of redefining or clarification of some of the

definitions that are in here.

We are aware that it has continued to be a perplexing problem in a number of municipalities. I think it is also not unfair to say that the current situation has lent itself to a little bit of abuse. We are aware that now in many communities, for example, someone will challenge a member of council as having a conflict of interest. Of course, this is hot news and it provides certain people with a bit of press coverage for a short time; then the conflict charge is subsequently withdrawn at the time when you would actually have to get serious, get a lawyer, go to court and go through all of that. So it points o