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October 1, 2008

39th Parliament, 1st Session

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Hansard Transcripts

Votes and Proceedings

Orders and Notices

Hansard Transcripts 2008-Oct-01 (PDF)

LEGISLATIVE ASSEMBLY OF ONTARIO

ASSEMBLÉE LÉGISLATIVE DE L'ONTARIO

Wednesday 1 October 2008 Mercredi 1 er octobre 2008

ORDERS OF THE DAY

IDEAS FOR THE FUTURE ACT, 2008 /

LOI DE 2008 SUR DES IDÉES D'AVENIR

INTRODUCTION OF VISITORS

LEGISLATIVE SPRINKLERS

ORAL QUESTIONS

ONTARIO ECONOMY

YOUNG OFFENDERS

FEDERAL LIBERAL

ELECTION PROMISES

FINANCIAL INSTITUTIONS

MANUFACTURING JOBS

SPECIAL INVESTIGATIONS UNIT

PAN AMERICAN GAMES

PROPERTY TAXATION

LOCAL HEALTH INTEGRATION NETWORKS

AGGRESSIVE DRIVING

GOVERNMENT ADVERTISING

LOCAL HEALTH INTEGRATION NETWORKS

INVASIVE SPECIES

C. DIFFICILE

BUS TRANSPORTATION

VISITORS

PETITIONS

HOSPITAL SERVICES

TAXATION

INTERNET ACCESS

ENVIRONMENTAL ASSESSMENT

HOSPITAL FUNDING

HOSPITAL SERVICES

GUN CONTROL

ONTARIO SOCIETY

FOR THE PREVENTION

OF CRUELTY TO ANIMALS

HOSPITAL FUNDING

STROKE THERAPY

POPE JOHN PAUL II

GASOLINE PRICES

MEMBERS' STATEMENTS

DAY OF GERMAN UNITY

CITY OF BRAMPTON

EID-UL-FITR

GLOBAL EDUCATION INITIATIVE

PEOPLE'S REPUBLIC OF CHINA

LONG-TERM CARE

WINTER COATS

FOR CHILDREN PROJECT

KOFFLER SCIENTIFIC RESERVE

EID-UL-FITR

USE OF ELECTRONIC DEVICES

IN HOUSE

NOTICE OF DISSATISFACTION

PRIVATE MEMBERS' PUBLIC BUSINESS

STATEMENTS BY THE MINISTRY

AND RESPONSES

SMALL BUSINESS

SMALL BUSINESS

SMALL BUSINESS

DEFERRED VOTES

COLLEGES COLLECTIVE

BARGAINING ACT, 2008 /

LOI DE 2008 SUR LA NÉGOCIATION

COLLECTIVE DANS LES COLLÈGES

OPPOSITION DAY

YOUNG OFFENDERS

ADJOURNMENT DEBATE

GOVERNMENT ADVERTISING

The House met at 0900.

The Speaker (Hon. Steve Peters): I ask members to join me in the recitation of the Lord's Prayer, followed by the Sikh prayer.

Prayers.

ORDERS OF THE DAY

IDEAS FOR THE FUTURE ACT, 2008 /

LOI DE 2008 SUR DES IDÉES D'AVENIR

Mr. Duncan moved second reading of the following bill:

Bill 100,

An Act to amend the Corporations Tax Act and the Taxation Act, 2007 / Projet de loi 100, Loi modifiant la

Loi sur l'imposition des sociétés et la Loi de 2007 sur les impôts.

The Speaker (Hon. Steve Peters): Debate? Minister of Finance.

Hon. Dwight Duncan: Mr. Speaker, I will be sharing my time this morning with my parliamentary assistant, Wayne Arthurs, the member for Pickering–Scarborough East.

I'd like to talk about this important piece of legislation which I introduced last week. Bill 100, Ideas for the Future Act, 2008, is designed to attract individuals with great ideas from all across Canada to set up their businesses in Ontario. What we're talking about here is turning innovation into Ontario jobs by establishing high-tech companies that will in turn provide a boost to the economy. This bill, if passed, would provide a 10-year corporate income tax exemption for new companies that turn home-grown ideas into Ontario jobs and products.

We have the support of post-secondary institutions. The president and CEO of Colleges Ontario, Linda Franklin, claims that half of the jobs in the next 15 years will require the ability to use technology that has not yet been invented. Ms. Franklin supports this measure, which would promote applied research and innovation across Ontario's 24 colleges.

The Ontario government is helping workers and families across the province as well. We are helping businesses and communities. We are helping to make the transition to a new period of economic growth.

With this bill, the McGuinty government is helping to turn ideas into high-tech jobs. What we are trying to do is encourage Ontario's entrepreneurs to commercialize public research in these leading areas. This is a landmark corporate tax measure and is the first of its kind in Canada. It provides a strong incentive for firms to take ideas and turn them into real commercial products. We are supporting innovative businesses in commercializing research at post-secondary schools and research institutes.

New businesses in Ontario that commercialize eligible intellectual property developed at qualifying Canadian colleges, universities and research institutes would be eligible to claim this 10-year corporate income tax refund if this bill is passed.

This legislation supports Ontario's ambitious innovation agenda. Our 2008 budget promotes a culture of innovation and builds on the government's innovation agenda through almost $300 million in new investments and proposed tax initiatives that support the start-up and growth of innovative firms. Right now, somewhere in a lab in Waterloo or Ottawa or any number of places—Leamington—Ontarians are helping to invent our future. They are discovering cleaner ways to generate power. We certainly see that, Mr. Speaker, in the greenhouses in your neck of the woods. They are discovering new ways to treat disease.

They are developing new technologies for empowering businesses and connecting communities. From the discovery of insulin to the BlackBerry, the phenomenal impact of Ontario inventions has spread around the world.

Our economic and social prosperity is dependent on this ability to be innovative and to compete. We are investing in an aggressive innovation agenda to ensure that we are one of the winning economies in the 21st century. This agenda builds on the strengths of Ontario's creative environment, our diverse culture, our highly skilled workforce, our world-class education system and our internationally recognized research community. It builds on this province's greatest strength. That strength is the talent and ingenuity of our people. Ontario is truly a home to innovation and a destination for success.

For example, last week the Premier was at the Honda engine plant opening in Alliston. Honda opened this new plant to make fuel-efficient engines. The Premier thanked Honda for its continued confidence in Ontario's highly skilled workforce.

Our innovation agenda is aimed at igniting growth in the industries that will shape our future and create Ontario's next generation of jobs and prosperity. With this bill, eligible intellectual property would include patented property and copyrighted computer programs that constitute a technological advancement. Commercialized ideas will create jobs for Ontario's future. This bill, if passed, would encourage Ontario entrepreneurs to commercialize public research in areas like bio-economy, clean technologies, advanced health technologies, and telecommunications, computer and digital technologies.

These are important sectors of the economy we must succeed in if we want Ontario to be a global leader. They are the keystones of a new evolving economy. This bill, if passed, would allow a start-up company to take new ideas developed at Canadian public research institutes to market and enable more highly-skilled people to work in a more robust and productive economy.

In an increasingly global market, we are helping to launch the next wave of Ontario's innovators. This new and exciting program is aimed at encouraging economic growth, new energy development and assisting the environment. We are doing this by reforming the tax system through this bill—if passed—to promote leadership in investment and economic growth in the province.

The McGuinty government believes that our colleges, universities and research institutes provide a wealth of knowledge to be tapped to capitalize on innovation. I would like to talk about some of the key programs and tax incentives we have in place that are designed to encourage innovation in Ontario. The Ontario innovation tax credit allows small and medium-sized Ontario corporations to claim a 10% refundable tax credit on qualifying research and development expenditures in Ontario.

The Ontario research and development tax credit for taxation years ending after 2008 allows corporations to claim a 4.5% non-refundable tax credit on qualifying research and development expenditures in Ontario. The Ontario business research institute tax credit is for Ontario corporations to claim a 20% refundable tax credit for qualifying research and development expenditures incurred in Ontario as part of an eligible research contract with an eligible Ontario research institute.

The innovation demonstration fund provides financial support of up to 50% of eligible costs to help Ontario companies with the commercialization and initial demonstration of their innovative technologies.

Our Next Generation of Jobs Fund has three streams of funding. The first, the jobs and investment program, is designed to help companies in a range of sectors to expand in Ontario and develop innovative products for global markets—up to 15% of eligible project costs. The second, the biopharmaceutical investment program, supports the expansion of research and advanced manufacturing by pharmaceutical and biotechnology firms—up to 20% of eligible project costs.

The third, the strategic opportunities program, supports industry-led public-private collaborations focused on increasing Ontario's innovation expertise in the bioeconomy and clean technologies, advanced health technologies and creative industries—up to 25% of eligible project or program costs. In addition, the Ontario research commercialization program provides grants ranging from $100,000 to $750,000 a year for up to three years. This helps publicly funded Ontario research institutions and not-for-profit organizations transfer their research to the marketplace.

For this Ideas for the Future Act, 2008, we also have the support of Dr. Paul Genest, president and CEO of the Council of Ontario Universities. Dr. Genest says that this new tax measure would help create a greener, healthier, economically stronger province by tapping into our research excellence, strengthening the partnerships between researchers and businesses, and promoting commercial success. If this bill is passed, a qualifying corporation that commercializes an idea would be eligible for the tax exemption if developed at a Canadian university, college or research institute.

We're taking the next step in sending a message to researchers and companies around the world. That message is that if you've got an innovative project that will build on our research strengths and create jobs, Ontario is the place to be. In fact, when foreign venture capital invests in Canada, 60% of that capital comes to Ontario. Ontario's competitive strengths do attract business investment and create jobs.

The McGuinty government is investing in key sectors and making the tax system more competitive to promote investment and encourage economic growth. But we have to do more. A fast-moving global economy is the reality, and Ontario must compete—and compete to win. Innovation is one of the keys to the future of our economy, and the McGuinty government recognizes its importance in an increasingly competitive global market.

As I mentioned when I introduced the bill earlier this month, I'm working closely with my colleague the Honourable John Wilkinson, Minister of Research and Innovation.

This legislation would also provide for flexibility so that other innovative technologies can be added in the future.

I'd like to mention some of the key qualifications for this proposed tax incentive. The company must be a new start-up incorporated in Canada after March 24, 2008, and before March 25, 2012. In addition, substantially all of the company's revenues must come from a new active business in the priority areas for economic growth. Priority areas for economic growth include advanced health; bioeconomy, which includes initiatives related to clean energy and telecommunications; and computer or digital media technologies.

Eligible intellectual property must be developed by an employee or a student of a qualifying Canadian research institute. Finally, the company must be in the business of commercializing eligible intellectual property developed at a qualifying Canadian research institute.

The Minister of Research and Innovation, my colleague Minister Wilkinson, will be responsible for certifying an eligible commercialization business and would issue a certificate of eligibility to the qualifying corporation for the purpose of applying to the Minister of Revenue for a refund. I ask members to pass this measure, so that we can get these ideas of the future working here in Ontario today to create jobs. This initiative builds on our existing measures to cut taxes for businesses, such as eliminating Ontario's capital tax and reducing high business education tax rates across the province.

I'd like to take a moment to speak about that economy. There are challenges, and they include the slumping US economy and the current global economic turmoil. We saw these challenges ahead, and that's why last fall we introduced a comprehensive five-point plan for the economy. We will continue to implement that plan of investing in skills and knowledge, investing in infrastructure, enhancing Ontario's competitiveness through strategic tax cuts for businesses, strengthening the environment for innovation, and forming key partnerships to strengthen Ontario's industries. The plan does not and cannot cover everything, but it does effectively help with matters that we can control.

Since October 2003, more than 449,000 net new jobs have been created in Ontario—51,000 net new jobs this year—with real wages increasing. However, as we all know, certain key sectors, such as manufacturing, forestry, agriculture and tourism, face serious challenges. So far in 2008, we know that employment is up 1.7% from a year ago, retail sales are up 5.4%, wages are up 4.6% and housing starts are up 19.6%.

Two days ago, I released the economic accounts for the second quarter of calendar year 2008. While second quarter GDP is up, my concern is not whether we have two quarters of negative growth in a row but a protracted period of little or no growth. That's why, like Ontario families who are tightening their household finances, we will continue to make the necessary adjustments to best respond to the needs of the economy and of all Ontarians. This bill is a fundamental part of Ontario's five-point economic plan, which will help us sustain the high quality of life we enjoy today and create the high-value-added jobs of the future.

In closing, I'd like to talk about an important point in the big picture. We believe that for much of our work to count in a meaningful way, Ontario requires a true partner in the federal government. Ontario is reaching out to the federal government, and our hope is that it will listen. We're not looking for a special deal or anything beyond what is fair for Ontarians. The Premier recently launched an online petition that's getting people talking during this federal election. He is asking Ontarians to sign the online petition to ensure fairness for Ontario, and I encourage all Ontarians to visit www.fairness.ca.

What we're going to require after the next federal election is a partner who is more committed than in the past, a partner who understands that you can't leave our auto sector on its own, that you can't have unfair employment insurance benefits, that you can't have a situation where Ontario doesn't get equal per capita health care funding—and not have to wait for that until 2014. The facts about employment insurance, health care funding, economic development and infrastructure funding are there and, in many cases, acknowledged by the federal government.

We're also calling on Ottawa to put in place an economic development strategy for southern Ontario. Every part of the country except southern Ontario has such a strategy.

I ask my honourable colleagues to pass this measure, so that we can get these ideas for the future working here today in Ontario. By helping to maintain a tax system that promotes investment, encourages economic growth and supports Ontario's fundamental strengths, all Ontarians win.

The Deputy Speaker (Mr. Bruce Crozier): The member for Pickering—Scarborough East.

Mr. Wayne Arthurs: I'll keep my comments relatively short, so that all sides of the House will have an opportunity during this period of debate to share equally in the time allocated.

I'm happy to rise on Bill 100, the Ideas for the Future Act. This is a cornerstone piece of legislation that will encourage turning innovation into Ontario jobs by establishing high-tech companies here in Ontario. As the minister said, I certainly urge all members, when the time comes, to offer support to this bill. It's intended to attract individuals with great ideas from across Canada, not just Ontario, to set up businesses right here in Ontario. The bill will provide a 10-year corporate tax exemption for new companies that turn homegrown ideas into Ontario jobs and products.

In an increasingly global market, we're helping to launch the next wave of Ontario innovators. The legislation allows for flexibility, so that other innovative technologies can be added in the future. We're sending a message to researchers and companies around the world. That message is that if you've got an innovative project that will build on our research strength and create jobs, Ontario is the place to be. The Ontario government is helping workers and families across the province, and we're helping businesses and communities, too. We're helping to make the transition to a new period of economic growth.

The McGuinty government is investing in key sectors and making the tax system more competitive to promote investment and encourage economic growth. A fast-moving global economy is the reality, and Ontario must compete, and compete to win.

This bill would encourage Ontario entrepreneurs to commercialize public research in areas such as bioeconomy/clean technologies and telecommunications, advanced health technologies, and computer and digital technologies. These are important sectors of our economy that we must succeed in if we want Ontario to be a global leader. They are the keystones for the new and evolving economy.

Here is how the bill would work. A researcher working at a college or university develops an idea to improve upon an existing product. He or she then proceeds to take that idea to market and sets up a corporate entity to make that happen. The corporation could then be eligible for this 10-year tax exemption. This is a rather simplified version of the events that would have to take place, but it gives you an idea of how the legislation would assist in promoting innovation in Ontario.

Innovation is one of the keys to the future of our economy, and the McGuinty government recognizes its importance in an increasingly competitive global market. This landmark corporate tax measure is the first of its kind in Ontario and in Canada. It provides a strong incentive for firms to take ideas and turn them into real commercialized products. The government is helping to maintain a tax system that promotes investment, encourages economic growth and supports Ontario's fundamental strengths.

What we are trying to do is encourage Ontario entrepreneurs to commercialize public research in these leading areas. We're supporting innovative business in commercializing research at post-secondary educational institutions and research institutes, because this government believes that our colleges, universities and research institutes provide a wealth of knowledge that can be tapped into to capitalize on innovation. In fact, the associations that represent Ontario's colleges and universities support this bill. The bill has a champion in Dr. Paul C.

Genest, president and CEO of the Council of Ontario Universities. The bill also has the clear support of Linda Franklin, president and CEO of Colleges Ontario.

Right now, somewhere in a lab here in Toronto, in Oshawa or in any number of places throughout the province, Ontarians are helping to invent the future. They're discovering new ways to treat disease and cleaner ways to create power. This legislation supports Ontario's ambitious, innovative agenda. Our 2008 budget promotes a culture of innovation and builds on the government's innovation agenda through almost $300 million in new investments and proposed tax incentives that support the start-up and growth of innovative ideas. We are investing in an aggressive innovation agenda to ensure that we are one of the winning economies in the 21st century.

As I said in the beginning, I encourage all members of this Legislature to support Bill 100.

The Deputy Speaker (Mr. Bruce Crozier): Questions and comments?

Mr. Ted Arnott: I'm pleased to rise on behalf of the people of Wellington—Halton Hills this morning and participate briefly in this debate on Bill 100, Ideas for the Future Act, 2008, and respond to the Minister of Finance and his parliamentary assistant.

I've had a chance to review some of the issues surrounding this bill this morning and I find it something that I believe I can support in principle. It's a modest proposal on the part of the government to attempt to address the economic challenges that we're facing in this province today. As I understand it, this bill will support innovation, as the government has said, allowing companies to apply for a tax refund—if they create a brand new company, I should say, and take an idea developed at a university, college or research institute and turn it into marketable goods and services.

I have one question for the Minister of Finance or perhaps his parliamentary assistant, if they will answer it. The question is, why is it that research that is developed at colleges and universities and research institutes is the only research that is deemed eligible for this sort of favourable tax treatment? Why is it that research that is developed in the private sector is not eligible for this same kind of tax treatment? I would hope that the parliamentary assistant will respond to this.

I'm looking forward to the presentation this morning by our finance critic, the member for Niagara West—Glanbrook. He's going to speak for approximately an hour, I think. I look forward to his thoughts on the economy, generally speaking, as well as the challenges that we're facing, because as you well know, the province of Ontario has lost more than 200,000 manufacturing jobs in—

Mr. Ted Chudleigh: It's 240,000.

Mr. Ted Arnott: My colleague from Halton, who is our economic development critic, advises me it's 240,000. Clearly, the government needs to come forward with an action plan that is actually effective in addressing this serious concern. We're talking about many thousands of families who are facing real economic hardship because they've lost a good-paying job that they may have had for many years and, I'm sure, are finding difficulty replacing that lost income.

I would ask the parliamentary assistant to address this issue and answer my question.

The Deputy Speaker (Mr. Bruce Crozier): Questions and comments?

Mr. Michael Prue: I listened intently to the minister and his parliamentary assistant today, and they used two perplexing words, given the scope and the magnitude of this particular bill. The minister called this a landmark bill. By "landmark," I take it that this is something that is going to set Ontario and Canada and the world aside because it's going to be so magnificent that it's going to be like the Eiffel Tower or Niagara Falls or something you just can't miss.

My colleague the parliamentary assistant called it a cornerstone, and by "cornerstone," I think of that by which a whole building is built and upon which everything else rests, that which is the foundation. So you can understand how perplexed I am when we made some inquiries yesterday as to approximately how much the government is going to spend on this particular bill, how much the taxpayers are going to foot for this magnificent new experiment, this landmark, this cornerstone, of legislation, and discovered to our dismay that it's $5 million this year and $7 million next year.

I want to say that if this is such a landmark and a cornerstone, then I find it passing strange that the government is investing so little of its budget in this area and is investing so little of the capital of this province, if in fact they intend that this is going to do something. Five million dollars this year and $7 million next year is not going to establish a lot of jobs in this province. In a province where we bleed jobs almost every day, in a province where this morning I woke up and saw what was happening in Goderich, it saddened me to the quick.

The Deputy Speaker (Mr. Bruce Crozier): Questions and comments?

Ms. Leeanna Pendergast: I also have been listening intently this morning, and it's my pleasure to rise and join the discussion on

An Act to amend the Corporations Tax Act, or the

short title, the Ideas for the Future Act.

I am proud to reinforce that this government has a five-point plan for the economy, which includes investing in creating an environment for innovation. This legislation is a key component to encourage investment and also fits in with strategic tax cuts to encourage investment. This is about jobs. This is about the next generation of jobs. This is about bringing those jobs to Ontario, both now and in the future.

I just want to take a minute to talk about my constituents in the riding of Kitchener—Conestoga. We are very, very familiar with innovation and the positive effect that innovation has had. Specifically, we have Conestoga College right in the riding, and in the larger Waterloo region we have the University of Waterloo and Wilfrid Laurier University. We have experienced the wonderful phenomena of Pickstream, of Canada's Technology Triangle and, of course, Research In Motion—you're all familiar with the BlackBerry.

We have seen how things have developed and strengthened in our communities. We have seen and witnessed first-hand the effect this innovation has on our economy, the effect this innovation has on our infrastructure and on our partnerships, the effect this innovation has on our lives in general. We have witnessed first-hand the skills of our youth, the retraining of our workforce and our competitive edge in a global economy. The McGuinty government is opening doors to the future, opening doors for our youth with these ideas for the future.

The Deputy Speaker (Mr. Bruce Crozier): Questions and comments?

Mrs. Joyce Savoline: I think this is another one of those good ideas, but a huge missed opportunity. It's really unfortunate that the bill is too narrowly defined and that it helps just a tiny segment of the business community. It actually would only contribute to about 2% of the jobs in Ontario when we are in such tough economic times and have lost so many manufacturing jobs.

I believe that what this bill does is list more ineligible than eligible companies and entities, and it lists them in a way that makes it so difficult for even the eligible organizations to participate, through all the paperwork that needs to be completed, that perhaps it may take the entire eligibility time of this initiative to do so. I think what that does is discourage.

It also could cost these organizations a lot of money to go through the process. It's been proven in other parts of the world and in other parts of Canada that this type of process is cost-ineffective. It costs the organizations a lot of money to hire additional staff just to go through the process.

I think we had an opportunity here to allow not just new organizations and not just public organizations to participate, but existing corporations that have proven themselves and perhaps could work through and bring to an end these new innovations much more quickly. After all, we need to do this to be competitive in Ontario. It's a missed opportunity.

The Deputy Speaker (Mr. Bruce Crozier): Response?

Mr. Wayne Arthurs: I want to thank the members from Wellington—Halton Hills, Beaches—East York, Kitchener—Conestoga and Burlington for their comments. Let me say that I'm particularly pleased, obviously, that folks were listening carefully to the minister in opening second reading debate and to the comments I had the opportunity to make as well.

The member from Wellington—Halton Hills was querying the sort of public-private sector initiative. Clearly, this legislation is targeting our colleges, universities and research institutes here in Canada to be able to create great ideas and see them commercialized here in Ontario. There are tax incentives in place already for research opportunities for the private sector, but this is clearly targeting that public sector, that new innovation, those in colleges and universities and research institutes in the country.

This is a cornerstone, and the member from Beaches—East York spoke to the issues of cornerstone legislation and the like—it is. It is because it's a first in Canada. It's a clearly defined focus on the next generation of activity, that brainpower that comes out of those sectors, in turning great ideas into real products and creating real jobs here in the province of Ontario.

My friend from Kitchener—Conestoga mentioned RIM during her comments, and that's just one example that we're all so terribly familiar with. It wasn't that long ago in this Legislature—I recall arriving five years ago and was somewhat surprised to find that so many members on all sides were yet to use a BlackBerry. It was like a new tool, and by that time I'd had the opportunity to use one for a few years. Now, virtually everyone here is taking advantage of those types of opportunities. Those are the types of great ideas that we want to see produced here in Ontario.

The Deputy Speaker (Mr. Bruce Crozier): Further debate?

Mr. Tim Hudak: I want to say at the start it's the first time I've seen on the second reading of a bill that the parliamentary assistant's two-minute rebuttal was longer than his entire remarks. Holy smokes, they call it a landmark piece of legislation, a cornerstone for the economy, and they barely gave passing remarks here in the Legislature, not even using up half their time.

Landmark legislation, cornerstone—glory hallelujah, Bill 100 is at second reading. Hark, the herald angels sing. This is going to turn the economy around because of, as my colleague from Beaches—East York said, a $5-million to $7-million investment in the economy. Holy cats: $5 million to $7 million, the Minister of Finance's own figures on what the economic impact of this legislation is going to be.

Let's put that into perspective, by the way. My friend the member for Wellington—

Mr. Ted Arnott: Halton Hills.

Mr. Tim Hudak: —Wellington—Halton Hills points out on page 26 of the Ontario budget 2008-09 that the Ministry of Tourism is "investing $8 million ... to conduct research on new tourism markets, inform Ontario's tourism strategy" etc. Eight million dollars in a tourism study alone actually dwarfs the value that the Ministry of Finance believes that this will have for Ontario businesses.

By the way, on that topic—and I know my friend from St. Catharines, a former tourism minister, probably has the exact same concerns that I do: $8 million, a sort of farewell party for Greg Sorbara, is a bit of an abuse of taxpayer dollars. Maybe I'll give him the benefit of the doubt. We'll see what kind of study comes at the end of the day. Well, listen, he was successful. He won by a large margin last election. To give him credit as chair of the Ontario election campaign, he did have two majority government wins. So in the annals of Liberal Party history—

Applause.

Mr. Tim Hudak: Go ahead and applaud Greg Sorbara. You are sending him off on a world tour to the tourism capitals of the world to thank him for all his work on behalf of the Ontario Liberal Party. We don't see him much here in the Ontario Legislature anymore, because he is probably travelling to Tokyo and Paris and Milan and New York and San Francisco and Auckland—the list would go on and on. Probably the places Greg Sorbara is going to visit on the backs of the $8 million from Ontario taxpayers would take my entire hour, so I won't go into that much longer.

Interjection.

Mr. Tim Hudak: No, Greg Sorbara is a good friend of Dalton McGuinty's. He helped him to win two election campaigns and he's being rewarded with this gold-plated, $8-million fun fund—paid for, by the way, by hard-pressed Ontario taxpayers, who are facing higher fuel costs, higher home heating costs, higher grocery costs, higher taxes and, thanks to Dalton McGuinty's new assessment scheme, skyrocketing property assessments, coming in their mailboxes this fall.

Bill 100 is at second reading. I'll give a little bit of credit to the Minister of Finance. He is at least finally proposing some form of tax reductions in the province of Ontario. I know it's one of these "We're freezing over" type things—the Liberals actually proposing a tax reduction of some kind. To keep the religious theme, it's a bit of a conversion on the road to Damascus, although, sadly, the Liberal wagon pulled over on the road with Damascus barely in sight.

As has been pointed out, this so-called tax break is extremely narrow in focus, heavily bureaucratic, and weighed down by ideology that says government bureaucrats and politicians are better at picking winners and losers than the markets or full-time, experienced investors.

Interjection.

Mr. Tim Hudak: It's true. My friend the Minister of Research and Innovation groans at that comment. But you're going to be a busy fella. You're going to be an extremely busy fella if this legislation passes, because the Minister of Research and Innovation personally, according to the bill, is going to sign off on these certificates of eligibility.

You, sir, will be the judge, jury and executioner when it comes to these companies coming to Queen's Park to ask you to bless their projects and approve them under the narrow confines of this legislation so they can benefit from a tax reduction, which, by the way, in the majority of cases, I think will be relatively small because for many of these firms it takes some time before they're making profits of any particular value.

Why don't I get into that a little bit early in my remarks? When you look at the actual legislation—I know my colleague the Minister of Research and Innovation is listening quite closely—the Minister of Research and Innovation, under Bill 100 as it reads today, would determine who is eligible for a certificate of eligibility. So every company that wants to take advantage of this tax incentive would then apply to the Minister of Research and Innovation for a certificate of eligibility. This is

section 57.15 of the legislation:

"Certificate of eligibility

"57.15(1) To be eligible to apply for a refund under this part, a qualifying corporation must apply for, be eligible to receive and receive a certificate of eligibility for the year issued by the Minister of Research and Innovation."

I will ask the minister, and maybe he could reply later on during debate, if this means that every year, each individual corporation would have to reapply for the fund, according to 57.15.

Mr. Ted Chudleigh: Do you have to be a Liberal to apply?

Mr. Tim Hudak: My colleague from Halton asks if you have to be a Liberal to apply. I don't think that will be the case. It doesn't say that in the legislation.

However, the point I'm making is, when the McGuinty government is convinced that the bureaucrats who will be hired to run this new program—because we know there will be a significant number of hirings of more government workers to determine which companies are eligible and ineligible, what year they're eligible for etc. Maybe the minister will reply on exactly how many new individuals he will be hiring.

Maybe those 600 or so people who lost their jobs, sadly, at Volvo in Goderich or the 800 individuals who lost their jobs at John Deere in Welland with the decline in the manufacturing sector in Dalton McGuinty's Ontario will be looking for jobs. I hope the minister will describe exactly how many jobs they are going to create in his ministry to referee this particular part of the act.

My colleague from Halton asks, "Do you have to be a Liberal firm to qualify?" Well, it doesn't say that in the legislation, but I worry that if it's the minister himself who is deciding what companies are eligible and ineligible—and it's very grey in the legislation which companies are going to be eligible because of the

definitions; it gives great scope for regulation-making—there will be heavy lobbying efforts upon the minister himself, or herself, if that changes down the road, to determine whether a company is eligible. So while you may not have to be a Liberal to apply, I say to my colleague from Halton, it certainly is going to help sell tickets to the minister's fundraiser.

Section 57.15 goes on to detail how the application system will work: "An application for a certificate of eligibility for a taxation year shall be made to the Minister of Research and Innovation after the end of the year to which it relates, in a form approved by the Minister of Research and Innovation." So not only will you be determining, from a big stack of papers on your desk, who will be eligible for these certificates, as you sign them one by one, but you also get to determine exactly what the form will look like. So I'm sure you'll be busy in the time ahead, if Bill 100 passes, in determining what this form is going to look like.

Let me point this out as well: The government describes this as a tax reduction. In reality, when you look at Bill 100, it's a refund with a very heavily, thickly bureaucratic process to apply for those funds.

So if you picture some of the companies that are being targeted, and my colleague from Kitchener—Conestoga had spoken about young university students etc., they are going to be relatively, I would think—well, actually, extensively—hard-pressed to work through a thick bureaucratic system, first to apply for the certificate of eligibility from the minister and then to take that certificate in hand to the Minister of Revenue, another ministry altogether, and begin negotiations to receive a refund from the Ministry of Revenue.

I'm not sure that the process—all paperwork, by the way; it's not electronic—dealing with two and perhaps three different ministries is conducive to helping these young entrepreneurs who may be recent graduates, may be university or college students etc.

"Additional information or records

"57.15(3) A corporation applying for a certificate of eligibility shall provide such additional information or records as the Minister of Research and Innovation may specify in order to evaluate the application.

"Criteria for issuing certificate of eligibility

"

(4) The Minister of Research and Innovation may issue a certificate of eligibility to the corporation for the year if he or she is satisfied that the corporation carried on an eligible commercialization business during the year."

What does that mean, "eligible commercialization business during the year"? Well, our young entrepreneurs, busy making new innovations and trying to get them to market, will have the distinct pleasure of reading through Bill 100 and the extensive

definitions.

Under the

definitions section:

"'eligible commercialization business' means an active business,

"(

a) that in the opinion of the Minister of Research and Innovation is,

"(

i) an advanced health technology business,

"(ii) a bioeconomy business,

"(iii) a telecommunications, computer or digital technologies production business that is primarily engaged in activities described in categories 3341, 3342, 3344 or 5112 of the North American Industry Classification System 2007—Canada, as published by Statistics Canada, or," the catch-all,

"(iv) a business that is prescribed by or that satisfies the conditions prescribed by the Minister of Finance...."

And that's not all. So if you are a young entrepreneur with a new innovation you want to take to market and you want to benefit from this refund, not only would you have to win the support of the Minister of Research and Innovation to get one of these prized certificates of eligibility, but you would have to find out what an eligible commercialization business is; you would have to read through Bill 100.

And then heaven forbid you're in communications, computer or digital technologies, because you're going to have to figure out what the heck categories 3341, 3342, 3344 or—don't forget—5112 of the North American Industry Classification System 2007—Canada, as published by Statistics Canada, are. If I listened closely to the minister and the parliamentary assistant, I don't think they described exactly what categories 3341, 3342, 3344, or 5112 in fact are.

But, as the expression goes, that ain't all. Our young, intrepid entrepreneur then would have to satisfy a second criterion:

"(

b) that in the opinion of the Minister of Research and Innovation has as its sole purpose,

"(

i) the sale of property that derives more than 50 per cent of its value from eligible intellectual property,

"(ii) the sale of property an essential element of which is eligible intellectual property,

"(iii) the licensing of computer programs that are eligible intellectual property, or

"(iv) such other purpose as may be prescribed by the Minister of Finance; and

"(

c) that satisfies such other conditions as may be prescribed by the Minister of Finance...."

So let's take this back a step. Not only would our young entrepreneur with an innovation that she wants to take to market have to win the support of the Minister of Research and Innovation, would have to be in one of those very narrowly defined fields, very much open to

interpretation, and then satisfy the Minister of Finance that certain conditions are met with respect to the value of the intellectual property—if we're talking about small firms, we're talking about entrepreneurs who have an innovation and are desperately trying to get it to market, who have small levels of capitalization, and who are very busy in developing those markets. To think they will have the spare time to walk through this heavily thick bureaucratic process is, I fear, wishful thinking at best. It gets worse, by the way.

There are further

definitions in terms of exactly what a bioeconomy business is and what exactly an advanced health business is. Let me see here:

"'advanced health technology business' means a business that is primarily engaged in using technology,

"(

a) in the development of assistive medical devices, pharmaceutical drugs, regenerative medicine, biologics, medical procedures or surgical procedures, or

"(

b) in human tissue engineering...."

"Bioeconomy" is also defined:

"(

a) the production of biofuel, biogas or bioplastics, or

"(

b) the development of technology or processes that enable the use of wind, water, a biomass resource, hydrogen, biofuel, biogas, landfill gas, solar energy, geothermal energy, tidal forces or thermal waste as a source of energy...."

I will look forward, with some interest, to the estimates for 2009-10, if the minister does appear at that committee, to see exactly how many staff have been hired to referee all of these

definitions, to referee this thick process and to referee exactly how somebody will get a certificate of eligibility, let alone before they begin the negotiations with the Ministry of Revenue. I would expect that the costs of implementing the regime, as you have brought forward, probably exceed the benefits. If it is $5 million to $7 million, then I would fully expect that the costs of actually running this through the three ministries involved—I wouldn't be surprised if it exceeded that level of benefit because of the complexity of their system.

We as Progressive Conservatives believe in broad-based tax reductions. We have faith that businesses, if they are given the ability to compete on a level playing field, will be successful, hire more people, will innovate, will create wealth in our economy and help to turn our economy around. We have always known an Ontario that was a leader in Canada, and now, under the McGuinty government's tax-and-spend approach, it has fallen to last in Confederation in economic growth and in job creation.

Let me give you a few more reasons why I am concerned about the very narrow focus of Bill 100. As I said, I don't want to discourage the government.

Finally they have seen the light that their early decisions to raise taxes on working families and seniors, which sucked up disposable income from our economy, their early decision to raise business taxes to the point now where, according to their own special adviser to the Premier, Roger Martin, they are now the highest on new business investment in all of North America—we have seen a price in terms of lost jobs in the province, slow growth and low levels of wealth creation.

So I think, though they probably won't admit it here during debate on Bill 100, finally the McGuinty government understands that their early decisions, some of which were clear election promises that were broken, have been harmful to our economy. Dalton McGuinty's penchant for runaway spending, high taxes on businesses, consumers, seniors and working families, runaway red tape and high energy costs have exacted a real price on Ontario families and on Ontario businesses.

So Bill 100, as I've explained, when you actually read the bill, far from a landmark or cornerstone piece of legislation, is actually very narrowly focused, heavily bureaucratic and weighed down by an ideology that says that the minister and the staff around him are best at picking winners and losers, rather than markets or people who are full-time investors.

The refund—I should be careful; it is not really a tax cut—is only available, as well, to new businesses, so businesses incorporated between March 24, 2008, and March 25, 2012, and it excludes the merger of two existing businesses and provides no incentive whatsoever for existing businesses to commercialize new intellectual property. So if there is a business in Ontario—and there are many—that is successful and has a demonstrated track record of success in commercializing new businesses and taking the innovations from the labs, from the think tanks etc. and bringing them to market, this actually will cause a disincentive for new innovations to use successful businesses to go to market.

Interjection.

Mr. Tim Hudak: My friend the minister disagrees, but there is no tax benefit, there is no refund to existing businesses. If I wanted to benefit from this and I had an innovation, I would have to start my own company, rather than relying on somebody or partnering with somebody who already has demonstrated expertise and success in the marketplace.

I do appreciate my colleague from Wellington—Halton Hills's suggestion that this would go to committee, that we would hear from those who are impacted by this legislation and look for ways of broadening its impact, from the very narrow-focused and bureaucratic approach that Minister Duncan has decided was superior.

The second major concern we have in the official opposition: The refund under Bill 100 is only available to new businesses in the following government-identified priority areas—as I read through earlier on in the definition

section of the bill, what's called an eligible commercialization business—advanced health technology, bioeconomy, telecommunications, and computer or digital technologies production. These are all important industries. They're all job-creating industries. They have impacts in various parts of the province. The problem is that that represents approximately only about 2% of GDP in the province of Ontario. So some 98% of other industries who may be bringing an innovation to market, who may want to commercialize a new discovery, a new way of doing things, would not have any benefit whatsoever from Bill 100.

We think that should change and we will bring an amendment forward that will change that, so the other 98% of new businesses in the province could benefit from this approach, if this is the one the government chooses to take.

The other major concern we have on the narrow focus of the bill is that it is only available to businesses that bring to market intellectual property developed at qualifying institutions, excluding intellectual property developed outside universities, colleges, non-profits and hospitals. "The sole purpose of an eligible commercialization business must be the sale of property that derives ... 50% of its value from eligible" IP "developed at a qualifying institute." Therefore, Mr.

Speaker, if you or I were to patent an idea or a product that was developed outside of one of the government-approved institutes, we would not qualify for the tax refund. Maybe we'll hear from members of the government side during debate why they have narrowly limited where the intellectual property can come from. If you do this on your own, in your own home, you would not be eligible for this fund.

If you, heaven forbid, worked in the private sector, where the wealth in the province of Ontario actually comes from, you would not be eligible for the tax benefit, because the intellectual property would be deemed ineligible.

I really can't for the life of me understand why they have done a very, very narrow focus. We will bring forward an amendment to this bill that broadens its impact. Obviously yes, intellectual property developed at our outstanding universities and colleges should qualify; those in hospitals should qualify. But I don't know why you draw the line and say that only those that are approved by the government under the regulation-making authority of this bill should benefit, why it's not more broad-based or why the McGuinty government, because of its ideological bent, which if you read through Bill 100 is anti-private sector—

Hon. John Gerretsen: We have no ideological bent.

Mr. Tim Hudak: No, no, I say to my colleague the minister, this is very ideological, right? You're basically saying that the private sector need not apply. If you are a private small business, if you are an individual who doesn't work at a university or a college or a hospital, you can't apply for this. Only those deemed eligible by the McGuinty government, the limited list that I read a bit earlier, qualify for this. We think it should be broader.

We think it should include a much broader range, including those that come from the private sector, those who are individuals that make the government short list not just because of their ideological bent in Bill 100, which is anti private sector and only supports government-approved institutions.

The sole purpose of the eligible business must be the sale of property that derives 50% of its value from eligible IP developed at the qualifying institute, which I discussed, a very narrow focus of those that would qualify under this legislation.

The other important point—and I'm pleased that the Minister of Research and Innovation is here for debate, because he will play an important role in this and the Minister of Revenue.

Mrs. Julia Munro: That's why it's Waterloo.

Mr. Tim Hudak: Because he lives close to Waterloo? Fair point.

Interjection.

Mr. Tim Hudak: The minister lives in Stratford? The minister lives in Stratford, so not too far down the road from Waterloo.

Certainly, the Cambridge-Kitchener-Waterloo triangle has many of the businesses that we want to see qualify for Bill 100 under the amendments that we will propose, given that we're in committee.

I would strongly suggest to the minister—given these are, ideally, businesses to make a profit, to create jobs and wealth in the province of Ontario—that you put a timeline into the bill, so that when people apply for their certificate of eligibility they will have a response, yea or nay—and hopefully, if our amendments pass, more yeas than nays—so that they will know that it was done in a short time frame so they can move forward with their decisions, their investments and their growth plans without spending months and months or years on end waiting for this thick bureaucratic process to end.

I see the minister has made some notes on that. I appreciate that, and hopefully we'll see that improvement to the bill—strict and clear timeframes for responses for those who apply for the refund under Bill 100.

At the same time, if I did read Bill 100 properly, this is a paper-based process: The applications are paper-based, the certificate of eligibility is paper-based and the refund would be paper-based. It's relatively ironic that when this government is focusing this legislation in large part on new technologies, improvements, software etc., the application process would be paper-based. I do hope that we will see in this legislation an ability to apply for this tax refund electronically, which would be the way that most of these businesses will do business. That certainly would, I expect, expedite the process. I hope those changes are made.

But most importantly, we will be calling for, in addition to our usual approach of broad-based tax reductions to encourage businesses to invest in the province of Ontario, to remove Ontario's image under Dalton McGuinty's government of having the highest taxes on new business investment to one that is actually open for investment and job creation and a leader in all of Canada.

As I said, Bill 100's impact on that larger picture, if Ministry of Finance figures are accurate, between $5 million and $7 million would not be up to the level the government would boast of in their grandiose language and their opening remarks. We do hope, though, that amendments to Bill 100 that will be proposed by the Progressive Conservative caucus would make this a much more valuable tool for new businesses.

During my response at first reading, I had a chance to give some views of experts in the field on Bill 100, and I know that these well-respected individuals' comments will be taken quite seriously by the government. They seem to reinforce the critique that the official opposition is bringing forward, and what I expect my friend from Beaches—East York, on behalf of the third party, would also recommend. Roger Martin, in his appearance at the finance committee in pre-budget consultations, January 1, 2008—so not too long ago.

Roger Martin, of course, the dean of the Rotman School of Management and a special advisor to the Premier, was also one of our guest speakers at the recent economic summit hosted by John Tory and co-hosted by Ted Chudleigh, my colleague the economic development critic, and I. Mr. Martin, in his comments on the government's general approach during the finance committee, said the following:

"We've got to define and support innovation broadly. Innovation is critical to upgrading competitiveness, innovation and policy, and Ontario cannot characterize innovation so narrowly as it does. Whether or not there is a truly conscious consideration of the issue, innovation policy in Ontario construes innovation to be something that happens in a narrow range of industries—computer hardware and software, communications hardware and software, aerospace vehicles and engines, pharmaceuticals and biotechnology, and medical devices—and that innovation is all about scientists working on technology."

Mr. Martin went on to say that many of the firms that have been successful innovators, have created jobs and wealth in Ontario and have been successful, many of the multinationals, would not actually fit in with the very narrow definition of "innovation" used by the McGuinty government.

Let me give you an example: Innovations made by Masonite, Four Seasons, Couche-Tard, Gildan, Magna and McCain, which are all global leaders, companies of which we should be proud in terms of the investments and jobs that they've created in our country, would not be counted as innovations under the McGuinty government's extremely narrow definition. That was Roger Martin appearing at the finance committee.

Mr. Khalil Ramal: That was before we introduced Bill 100.

Mr. Tim Hudak: Yes, sure. My friend from London—Fanshawe says that it was before we introduced Bill 100. It's true: It was the January 21, 2008, finance committee. But the same types of decisions that you were making in January with the very narrow definition of "innovation" continue in Bill 100. My earlier points, when you read through under the legislation what an eligible commercialization business would include—it's very narrowly focused. So I think Roger Martin's comments to the finance committee in January hold true as we enter the first day of October 2008, when you read through Bill 100's

definitions.

Jim Milway, executive director of the government-funded Institute for Competitiveness and Prosperity—they do some excellent reports, as you know, Mr. Speaker. They're always very good reading and thoughtful. Mr. Milway criticized the government's decision to give a 10-year tax reduction to new businesses.

"If a new technology becomes available, he said, an existing business will have no particular incentive to develop it—even though an already successful firm might be able to do so faster and better than a start-up company could. Lowering overall taxes would be more effective, he said.

"'It would do more for innovation.'"

That was Mr. Milway, quoted in an

article entitled, "Ontario's 'Innovation Agenda' Does Nothing to Save Jobs, Tory MPP Says; Critics of Plan Say it Does Little to Help Existing Businesses." That was the Ottawa Citizen, May 1, 2008—a similar critique that we are bringing forward in the official opposition: that successful existing firms could actually bring a new innovation to market faster and, because of their experience, successfully, have no benefit whatsoever in this bill. In fact, it creates an incentive for new innovators not to use existing and successful businesses.

Gary Will, in the Waterloo Tech Digest, May 6, 2008, said the following:

"I'm still opposed to the government's proposal to offer income tax exemptions to companies commercializing university-created IP—but not to other companies commercializing innovation. This may be the final relic of old-school innovation theories— that innovation is something that primarily happens in universities and labs and that university-generated innovation should be given special treatment over other innovations, regardless of the potential economic impact that each offers.

"Great ideas with the potential for significant economic benefits to the province can come from anywhere. With any luck, it won't take another two or three years to overthrow the view that innovations generated outside universities and labs are less deserving of support."

Again, that was Gary Will, Waterloo Tech Digest, May 6, 2008. Mr. Will makes a very important point, again reflected in the critique of the official opposition on Bill 100. No doubt that if they're using this approach of a refund under Bill 100, the universities, colleges, hospitals—the innovations that stem from there, good research—should benefit. The question we have is, why does the government limit it to only these government-approved institutions? Why does it have this bias against everything else? Why does it have this ideological bent against the private sector coming up with innovations? Gary Will echoed those concerns in his comments in Tech Digest in May.

Paul Mayne, in an

article in Western News, April 7, 2008: "According to the C.D. Howe Institute, Ontario's new 10-year corporate income tax holiday for commercialized intellectual property developed by qualifying research institutions is 'ill-designed.' Tax holidays, also used in Quebec, are high-cost, low-impact policies, typically found in Third World countries and well proven to be ineffective." Those are some pretty harsh comments. Sources: Chen and Mintz, Limited Horizons: The 2008 Report on Federal and Provincial Budgetary Tax Policies, C.D. Howe Institute, July 2008; and Anwar Shah, Fiscal Incentives for Investment and Innovation, Oxford University Press, 1995.

Rob Herold, industry liaison officer for engineering and sciences at the University of Western Ontario, my alma mater—go, Mustangs—says that long-term capital-intensive opportunities, such as nano-materials and therapeutics, may take as much as 10 years to become profitable, although they may generate lots of knowledge-worker jobs in the process. "I don't see the program necessarily changing the investors' decisions in these cases."

There are other things I want to say about the bill, so I'll end with this quote, again from Gary Will in Waterloo Tech Digest, May 6, 2008: "If the Ontario government wants to give a tax break to new companies commercializing innovative technology, let it extend that benefit to all tech start-ups regardless of their starting points. If the goal is to assist in the economic development of the province, it shouldn't matter whether companies that drive our economic success are university spinoffs or not."

I agree, and I would think that my colleagues across the floor in the government benches would agree. I don't think this bent by Dalton McGuinty to be anti-private sector is shared by the colleagues in the Legislature today. Many of them come from private business backgrounds, and I hope they will support the PC amendment that follows the advice of Gary Will and others to allow the benefit to accrue to other start-ups, not simply those that come from the university sector.

Let me read that one last time. Gary Will had good advice, and I hope it does sink in as we deliberate on Bill 100. Mr. Will said, "If the Ontario government wants to give a tax break to new companies commercializing innovative technology, let it extend that benefit to all tech start-ups regardless of their starting points. If the goal is to assist in the economic development of the province, it shouldn't matter whether companies that drive our economic success are university spinoffs or not."

Let's delve into that a little bit and give some real-life examples.

Waterloo region has a venture capital firm, Tech Capital Partners. My colleagues from the area or those who follow this may be familiar with Tech Capital Partners. The companies that Tech Capital Partners invests in would be ranked among the most promising tech companies in the area. It's an impressive record from Tech Capital Partners. Of the companies it has invested in over the last eight years, 79% were not commercializing technology from university employees or students.

Tech Capital Partners has a successful track record of investing in companies, helping them take new innovations into the marketplace, creating jobs and wealth in the province of Ontario—mind you, the more people are working, the more wealth is created; the more companies are operating in the black, the more revenue to government to help them to finance things like health care, education or the train to Peterborough, by way of example.

The sad thing is that under the extremely narrow and ideological approach of the McGuinty government that seems to be anti-business, only 20% of the firms that Tech Capital Partners has invested in would be eligible under the narrow confines of Bill 100. They said that 79% of the firms they've invested in to help get into the marketplace were not commercializing technology from university employees or students.

Metranome: Metranome is a developer of wireless digital media applications—supposedly one of the government's priorities. But it was founded by ex-Research In Motion employees, and under the

definitions under Bill 100, as I understand it, wouldn't qualify for this tax refund.

Primal Fusion—it's a good name—is a developer of sophisticated software that it hopes will revolutionize how we collect and organize ideas and find information on the Web. It has doubled in size over the last year. It's an Ontario firm creating jobs, investing in our province—not eligible under the

definitions of Bill 100.

Client Outlook has created imaging tools. Again, it's digital media used in the health care field for remote collaboration and training; again, a successful company, entrepreneurs, innovative, the kind of model you'd think the government would want to support, if they're doing a tax incentive like this. It doesn't fit the

definitions, the narrow constraints of Bill 100.

I hope I get a response from the government members in their time in debate on Bill 100. If they want to replicate, if they want to support these types of entrepreneurs, those that are creating jobs in the new economy, that are in the tech sector, why then are they not emulating the success and supporting the companies that have successfully commercialized? Why then are they narrowly defining the scope of this legislation so that these types of companies or the next generation of them would be ineligible?

Speaking of the tech side, let me get to the crux of the matter here. I'm going to recommend this

article to members, a National Post

article of March 5, 2007. It was just over a year and a half ago, but I would suspect that the issues raised in this

article have grown as a concern in late 2008. Mr. Speaker, you may remember this article. It was entitled, "Tech Start-ups Find it Tough to Raise Cash: Ontario a Wasteland for Technology Capital": Tony Wanless, National Post, March 5, 2007. Mr. Wanless tells the story of Dan Matlow, chief executive officer of Toronto's Medworxx. Though Mr. Matlow "is a veteran technology entrepreneur with a string of successful businesses behind him, it wasn't easy for him to find money to expand his latest venture. That's because there isn't much available to technology businesses these days."

In 2004, "Mr. Matlow co-founded Medworxx, which provides knowledge management software to the health care industry in Canada and the United States. It was financed by his own money with the support of some angel investment backers." Angel investors, of course, are high-net-worth individuals who invest privately in a company's earliest stage.

I'll pause Mr. Matlow's story for a second. I want to give credit to my colleague from Haliburton—Kawartha Lakes—Brock, who is the critic for the Ministry of Research and Innovation and at the estimates committee pressed the minister about this very issue: the lack of angel investors or incentives to bring capital to these early start-ups to address this issue that the

article deems Ontario "a wasteland for technology capital." She asked the minister some excellent questions about this, and unfortunately the response in Bill 100 falls well short of what the true nature of the problem is, when it comes to these types of innovators and start-ups.

So in 2004, Medworxx was formed. Mr. Matlow co-founded, with his own money and financing from angel investors. Since then, Mr. Matlow "followed a predictable fundraising pattern to raise about $2.4 million to expand his company from seven to 35 people," a fivefold increase, "and about 150 client hospitals throughout North America." That's impressive, right? In three years, he increased his workforce fivefold and has expanded his clients to 150 hospitals throughout North America.

After bringing in the investors, "he received seed capital from the venture capital company, Growthworks, which manages several labour-sponsored investment funds (LSIFs), also known as labour-sponsored venture capital corporations (LSVCC)." We'll get into these LSIFs and what happened to them under the McGuinty government momentarily.

"Usually, seed funding leads to follow-up rounds of larger financing by syndicates of venture capital companies, but when Matlow began looking last year for more than $2 million for further expansion," according to the article, "he hit a brick wall."

Mr. Matlow's story points out what the true nature of the problem is here, and that's the gap between seed funders and investment banks and the lack of venture capital in these types of innovators and start-ups. I don't think Bill 100 gets to the crux of the problem. I think Bill 100 falls well short of addressing the true issues.

I had the chance to do a roundtable with my colleague and friend from Nepean—Carleton, Lisa MacLeod. She's very concerned about the demise of the tech sector that we've seen in Ottawa. A few months ago, she gathered up some young entrepreneurs and some veterans in the industry for a roundtable meeting to discuss how we can help take advantage of this enormous human capital in the Ottawa region that has been displaced from the larger firms, a lot of these types of start-ups. In 2001, they addressed this issue about access to capital in moving from the smaller phase into commercialization.

I don't remember them highlighting an approach as Bill 100 does, which is a relatively minimal refund. Hopefully, it will be helpful to many companies, particularly if they follow our advice and broaden its impact. But they said the true nature of the problem was encouraging angel investors, encouraging loans and investments in these small start-ups to get to that second phase, as Mr. Matlow's story illustrates.

"After weeks of scouring Toronto for investment, Matlow put together his funding. But he had to be creative: He brought his original angel investors into a syndicate that included a couple of boutique private investment firms.

"'I had no choice really,' Matlow says. 'The VC pool is drying up out there. You can take a lot of meetings, but you won't get many deal offerings. Most VCs are just servicing the companies they already have.'"

Why am I talking so much about Dan Matlow and Medworxx? Well, "Matlow's quest illustrates a unique situation that is affecting entrepreneurial companies in Ontario, and threatens to stall economic growth in the province's industries of tomorrow—technology and other knowledge-based businesses," according to Mr. Wanless in the National Post. "The private investment vertical has been hollowed out, almost stopped dead between the start-up and seed stage, and the higher publicly listing stages served by investment banks."

The

article says that, as we heard during Ms. MacLeod's roundtable session, "This is partly because many investors shied away from technology after the crash of 2001 and never came back, especially after traditional resource play investments began to boom again."

By the way, I know my colleagues from northern Ontario and other parts of the province will be concerned. Take the mining sector, for example. Ontario has some of the most innovative, leading mining companies. We're the mining capital of the world, or at least we have that potential. It's been downgraded a bit in recent surveys by the Fraser Institute because of the government's policies of raising taxes and hydro rates and such. The TSX is the main source of raising funding for mining plays. There's enormous mineral potential, great innovators and entrepreneurs. The mining sector is not eligible under Bill 100.

There are those concerned about the forestry sector in the province of Ontario, which has hit very difficult times. The government has said that the forestry sector needs to be more innovative. That's usually the line they use. The forestry sector, which has seen mills shut down and northern and rural communities decimated, is not eligible under the definition of Bill 100.

I say to my colleague from London—Fanshawe, because I know he's concerned about this, Ontario's second-largest industry is agriculture, the agri-food business, impacting on many, many ridings here in the province of Ontario, the backbone economically of ridings like my own in Niagara West—Glanbrook. The agriculture sector is not eligible under the narrow

definitions of Bill 100. I know the Speaker will be concerned about that, and I hope he'll speak with the finance minister and Minister of Research and Innovation about that, that the second-largest industry in Ontario, agriculture, is deemed by the government not to be innovative or creative enough. "You don't need to apply for this fund."

Mining, forestry left out; I hope the government will reconsider its very narrow

definitions under Bill 100.

And back to Mr. Matlow. In 2006, according to the article, the Ontario government added to the problem; again, the problem is lack of investment, where you're moving from entering the market and moving into bank investment: "The Ontario government added to the problem when it knocked out a strong underpinning to private investment by killing its participation in labour-sponsored investment fund tax credits. The system funnelled funds from ordinary investors to LSIFs by providing 15% federal tax credits and," you'll recall, "matching 15% provincial tax credits."

When Minister Sorbara, in his 2004 or 2005 budget—anyway, one of his budgets—said that he was going to phase out the 15% tax credit, beginning in 2008, funding immediately dried up for most Ontario-based LSIFs, which meant there was a shrinking pool of capital to invest in companies that needed it.

Let me tell you what that meant. According to the article, the fallout of the McGuinty government's decision was palpably illustrated "when the Canadian Venture Capital and Private Investment Association (CVCA) released its 2006 year-end results. LSVCCs raised $907 million in 2006, down a full 25% from the previous year. And Quebec, which still has a tax credit system intact, accounted for about 85%" of that fundraising. The

article points out that the fundraising problem, because of the government's decision to phase out the tax credit for the LSIFs without an adequate replacement or other incentives for this type of venture capital investment, had ripple effects in the venture capital industry. "This is especially acute at the early stage of the financing chain that helps companies expand from start-up to maturity," which, I think, if I listened to my colleagues opposite, they said was the main purpose of Bill 100.

Here are the numbers. It's quite striking. In 2000, 283 new Ontario companies received $1.6 billion in the early stage—called A-round—financing.

Let's pause for a second here. According to Ministry of Finance figures, read to the Legislature by my colleague from Beaches—East York earlier this morning, the tax benefit will probably be between $5 million and $7 million. In 2000, 283 new Ontario companies received $1.6 billion in early-stage financing. So, "landmark cornerstone legislation"? Horse feathers.

Let's get back to the point. In 2000, 283 new Ontario companies received $1.6 billion in early-stage financing. But last year"—and for the sake of this article, it says 2006—"only 60 new companies received a mere $120 million, less than 10% of the 2000 total," so a 90% drop in the venture capital invested in these types of firms.

That's the true nature of the problem. You heard the round table in Ottawa talking about the tech sector, we had a round table in Waterloo; we're expecting to hear debate during public consultations. The true nature of the problem is access to venture capital. No doubt there were concerns expressed about LSIFs, but the government sort of wantonly eliminated the tax benefit. Causing these types of ripple effects without an adequate replacement was a major error that has had impacts on these types of start-ups, as illustrated by Mr. Matlow and those like him.

"According to Les Lyall, head of the Association of Labour Sponsored Investment Funds," these impacts have "slowed commercialization of promising technology, and left tech companies unable to expand. Already, he says, many young and educated people in the technology field are fleeing to the United States where they are receiving more encouragement to innovate." Here's the quote from Mr. Lyall, as I finish referring to this particular article: "In Ontario, the whole effort and initiative to commercialize has stopped because of financing problems. We're in a crisis"—a strong way to end the article.

Given the realities of the drop in investments in these types of start-ups, given the realities of young entrepreneurs heading to other provinces or across the border into the States, where there's a more positive environment for innovation and job creation, what did the McGuinty government do? It increased taxes on businesses to the point where, again according to Roger Martin, C.D. Howe and others, Ontario now has the highest level of tax on new business investment in all of North America. There's a good way to punish entrepreneurs: Whack them with the highest level of taxation in competing jurisdictions.

The red tape that spools out of this government day after day after day is strangling entrepreneurs and innovators in the province of Ontario. Certainly, they're decisions that have led to higher prices in energy and other products. Particularly fuel and home heating will have an impact, no doubt. Despite early boasts of major investments in public infrastructure to support job creation, it's hard to think of a major project that people like Mr. Matlow will see as beneficial to creating jobs in the province of Ontario and supporting these young entrepreneurs.

The government basically has done everything to work against these types of businesses: higher taxes, higher utility rates, more red tape and rapid increases in government spending. Their approach under Bill 100 is to have an extremely narrowly defined benefit, where companies like those that I listed earlier on need not apply.

Their approach has been to be very ideological, to say, "If you come from the private sector, you need not apply." Their approach has been so narrow in focus, in picking particular industries, that if you work, for example, in agriculture, if you work in mining, if you work in forestry, if you work in many aspects of manufacturing—which has seen some 200,000 jobs leave our province, including, sadly, many well-paying jobs at John Deere, in my colleague from Welland's riding, impacting also on many of my constituents—you need not apply. It's far from landmark or cornerstone legislation.

You know, I'm disappointed. When you hear the trumpets roaring on the other side of the Legislature about this bill in the short remarks at second reading, compared to what the bill actually contains, it's a far cry from the government's boasts.

As I said, we in the official opposition—and I'm very pleased to be sharing critic's responsibility on this with my colleague from Haliburton—Kawartha Lakes—Brock, Ms. Scott, who I think has been an outstanding critic on research and innovation. Working together, we will bring forward some amendments to this bill to broaden its impact, because I know my friend from Peterborough would probably object quite strongly, when he reads through this bill, to see that if it's a company that is doing an innovation in Peterborough for example, or an individual, maybe a former staffer, that the vast majority of those, representing some 98% of our GDP, would be deemed ineligible.

We're debating Bill 100 at a time when a recent report by Scotiabank says that Ontario is dead last in economic growth in Confederation, last in job creation. Other surveys that have come out from other banks put Ontario, if not last, second to last. Just this past week, TD Economics put out its report: Time for a Vision of Ontario's Economy—Much of the Foundation of Past Economic Success Has Crumbled.

A very important part of the report says, "Slowing economy no excuse for inaction." TD Economics goes on to say, "Tax cuts need to feature more prominently ... in the vision than they have in recent budgets ... the priority should become improving business and personal income-tax competitiveness." TD has other recommendations that I don't have the time to address in my remarks today, but they do start off by noting, "The Ontario economy is currently in its biggest funk since the early 1990s downturn...."

That's Dalton McGuinty's Ontario. Dalton McGuinty's Ontario is one that now sees more talented Ontarians leave to go to other provinces. It sees the flight of some 200,000 well-paying manufacturing jobs and brings forward Bill 100, which I hope we can improve with our amendments from the official opposition, but it's a far cry from making up for the high taxes, runaway spending and increased red tape this government has brought forward.

The Deputy Speaker (Mr. Bruce Crozier): Questions and comments?

Mr. Michael Prue: I listened intently for the entire hour to what my friend had to say, and I want to commend him for what I think was a well-reasoned, well-rounded speech and for raising the issue of financing, because I think the whole thing will come down to financing.

If this bill is going to work, and I would suggest that it does have some merit within the body of it, the government has to expand it, as my colleague from Niagara West—Glanbrook had to state. It needs to be expanded. To spend a paltry amount of money—$5 million for this fiscal year and $7 million for the next fiscal year, as the Ministry of Finance has stated is the intent of this bill—is not going to give true measure to it.

My friend also raised the whole issue—and I hope to be able to deal with this on the next date, when my turn to come to speak will be up—of venture capital. That is a problem, a far greater problem, in this province than is going to be resolved by this particular bill. Since 2001-02, the amount of venture capital in this province has dried up considerably; at first, because of the crisis that took place that year with the meltdown, but secondly, because policies and procedures within the Ministry of Finance have not been such that would allow for companies and for people who want to risk their funds to come forward.

Certainly, the whole issue about labour-sponsored investment funds needs to be carefully looked at. The government has indicated its desire to phase these out. This was one of the greatest venture capital pools possible. It's being phased out by 2010. I don't know where the government is coming from on this, when they want to invest only $5 million or $7 million, as my friend from Niagara West—Glanbrook had to state, but the reality is that, if we are going to use new technology to create jobs, there has to be capital for it. This bill is not the answer, although I really have no real problem with the bill. The real problem is venture capital.

Mr. Khalil Ramal: I was listening carefully to the member from Niagara West—Glanbrook in detail. I know he wasn't totally negative about the bill and thinks strongly that this bill is a very important bill for the province of Ontario, to allow many researchers and innovators to come to Ontario and launch their companies. He talked about the limitations of this bill, but this bill came as a complement for many different initiatives launched by the government last year. I want to remind the member from—

Mr. Michael Prue: It's a complement, not a cornerstone.

Mr. Khalil Ramal: It's a cornerstone for the purpose of inviting innovators and researchers to come and launch their companies in Ontario, when they give them a 10-year tax break. I think that's a very important issue.

Last year, I believe, our government launched a program they called the Next Generation of Jobs Fund. The member was talking about how come we don't support a private company or organization that wants to expand in Ontario. I know that many different companies in the province want to go to the Next Generation of Jobs Fund and apply for those funds if they want to update their equipment and turn it into a green technology. I think they'll be eligible for this one here. We have set aside almost $1.2 billion. Also, when you apply for that fund, within 45 days you get the result. I think that's a very important initiative.

When we talk about Bill 100, I think the member opposite should remember exactly: We have to support Ontario and Canadian companies that want to launch in Ontario and want to patent their innovation and research in this province. We also don't want to give it to multi-billion dollar international companies that have a small branch in Ontario or in Canada. That's why we want to narrow the scope in order to support homegrown companies, innovators and researchers.

Also, we welcome anyone from across the globe who wants to come to this province and launch their ideas, because we believe strongly that this province will be the hub of research and innovation if we pass this bill because of the things that are cornerstones for many researchers and innovators.

The Deputy Speaker (Mr. Bruce Crozier): Questions and comments?

Mr. Gerry Martiniuk: I enjoyed the speech of my colleague the member from Niagara West—Glanbrook; it was most thoughtful.

What are we dealing with with this particular bill? I believe what we're dealing with is another smokescreen: $7 million in tax cuts. We're talking about the Premier who will go down in history as the high-taxation Premier, the Premier who let in tax increases at one time greater than any other in history. He has spent billions in deficit since he was elected, combined with his higher taxes. So what all of a sudden is his interest in lowering taxes? Well, I believe it's a matter of a smokescreen.

First of all, he has the fairness campaign: Let's blame the feds. You know, sometimes Dalton McGuinty is like a jet engine; he really moves quickly. The big difference is that when you turn off a jet engine, it stops whining. That's what we're getting from our Premier: Instead of action, we're getting whining.

Something has got to be done, because they know the deficit is now on the horizon. How do I know that? I'm not an economic expert. Dalton McGuinty's newsletter called the Toronto Star recently did an

article on Mr. Maynard Keynes about how deficits are good. That's got to tell you something. They know a deficit is coming. It's that light in the tunnel coming toward us, and they're doing nothing about it. We are in big trouble, as a province. We are in grave trouble, and Dalton McGuinty is turning his back on the problem.

The Deputy Speaker (Mr. Bruce Crozier): Questions and comments?

Mr. Pat Hoy: I'm pleased to join in this debate this morning.

What we're talking about here in Bill 100 is part of our five-point plan. It is to strengthen the environment of innovation, and this is one part of that.

The opposition has been remarking about $5-million to $7-million costs, and I want to remind persons in the Legislature and those who might be watching this debate that this is the Ontario tax exemption for commercialization and would involve an exemption on Ontario corporate income tax and corporate minimum tax for its first 10 years. So I don't think that we can reliably predict what the forgone revenues to the government would be 10 years from now. However, we are trying to point out to persons that there would be some initial cost or forgone revenues to the government. Perhaps that $5 million or $7 million is correct or perhaps it will exceed that by a greater amount.

I have the opportunity to talk to school-aged children often, and I talk about education being the key. It is the ticket to success in the modern world that we live in. To point this out to younger children who might be in grade 5 or less, I talk about something as simple as the television set that is in most of our homes. At one time, television was black and white, then came colour, then came remotes—we didn't have to get up and turn that channel; there were remotes involved—then came flat-screen televisions, then came plasma, then came high definition.

We don't know what innovation out there lies for the people of Ontario, but we have to be on the cutting edge of that innovation here in Ontario, and that's what this bill will help Ontario to do.

The Speaker (Hon. Steve Peters): The member from Niagara West—Glanbrook has two minutes to respond.

Mr. Tim Hudak: I thank my colleagues all for their comments. I say to my colleague from the Chatham-Kent area that—I mean, the working figures were given, so we have been given these figures from the Ministry of Finance of $5 million to $7 million. If it's more, then please have the ministry communicate to us what the benefit is going to be. Let me point out again that in 2000 the types of companies that this bill purports to help received some $1.6 billion in early-stage financing, and under the McGuinty government, by 2006, it had dropped by some 90% to about $120 million.

If it's $5 million, $7 million, $10 million, $14 million, that is still a far, far distance from the $1.6 billion that had existed previously in 2000.

The crux of the problem is the access to venture capital for these firms. This bill is very narrowly defined. It only supports IP developed at government-approved institutions; it only impacts on about 2% of the value of GDP. Major sectors like agriculture, mining, forestry, the majority of manufacturing need not apply.

I do question the ideological bent of the McGuinty government that is anti-private business under this legislation, that basically says that if you come from the private sector, if you come up with innovation on your own, or you come from an existing successful company and are bringing forward your own innovation, you need not apply. Only those that are approved by the government through a very thick red tape process would be deemed eligible.

Successful Ontario companies like Sandvine, Metranome, Primal Fusion, Client Outlook and Covarity, among others, the types of companies that tech capital partners invest in, would not be eligible because of the extremely narrow and ideological focus.

The Speaker (Hon. Steve Peters): The time for debate has ended.

Second reading debate deemed adjourned.

INTRODUCTION OF VISITORS

The Speaker (Hon. Steve Peters): We have a number of guests we would like to welcome to Queen's Park today.

On behalf of the member from Welland, in the west members' gallery, Denise Oertle from St. Gallen, Switzerland, and Reverend Maria Lallouet from the Hungarian Presbyterian Church in Welland: Welcome today.

On behalf of the member from London—Fanshawe, in the east members' gallery, we would like to welcome Paul and Deedee Ingram to Queen's Park today.

On behalf of page Scarlett Michael, in the public galleries today is Jane Michael, her mother. Welcome.

LEGISLATIVE SPRINKLERS

The Speaker (Hon. Steve Peters): I just wanted to let the members know that there were a number of inquiries that came to my office yesterday: In the middle of a rainstorm, people were querying as to why the sprinklers were running on the front lawn. I just wanted to let you know that they weren't running; they were being drained to be put to rest for the winter. We were not wasting water in the middle of a rainstorm, so anybody that had queries, and especially the media who were curious as well, that was what was being completed.

ORAL QUESTIONS

ONTARIO ECONOMY

Mr. Robert W. Runciman: There are a lot of tears around this place too, but I don't think you can do anything about that.

My question is for the Minister of Finance. Yesterday the Premier, in a scrum, made some disturbing comments, which I suspect he now regrets, when he said certain parts of our economy are gone, never to return. He effectively was the coroner issuing a death certificate for far too many families and communities who have lost jobs under your watch. For years now, the Premier has been telling Ontarians, "Don't worry; this too shall pass," and now he tells them, "Actually, you're dead in the water; no lifeguards in sight."

Minister, these are challenging times for Ontario. Do you share your Premier's fatalist view for the future?

Hon. Dwight Duncan: The Premier of Ontario has a plan that is designed to ensure Ontario has a better future. No Premier in the history of this province, I would argue, has done more in difficult circumstances to promote employment growth, to promote investment, to promote innovation, to promote better working relationships with other governments. There is no doubt that there are challenges in the economy, and every time a family loses its job, this government takes it very seriously.

We will continue to make investments in skills. We will continue to make investments in innovation. We will continue to invest in infrastructure. We will continue to work to build partnerships with all levels of government and the private sector. That's the plan that will see us through these difficult times, led by a Premier who cares as much as anyone could for the well-being of the men, women and families of this province.

The Speaker (Hon. Steve Peters): Supplementary?

Mr. Robert W. Runciman: That response will instill confidence—not.

With the United States heading for a recession, Ontario perhaps already in one, about 240,000 manufacturing jobs lost in the past four years, now is not the time for the Premier of Ontario to be waving the white flag. Ontarians are proud of their province and they want a leader to be courageous and inspirational in troubled times, not a complaining defeatist.

Minister, will your government finally listen to experts like TD Economics and include their recommendations and those of other experts and economists, recommendations you've blithely ignored for the past two years? Will you include those recommendations in your upcoming economic statement?

Hon. Dwight Duncan: I'll remind the member opposite that it was Jim Flaherty who advised people not to invest in Ontario, and that's a shameful thing to do—absolutely shameful—for a federal finance minister.

We routinely receive advice from economists, including Mr. Drummond, who has offered very good advice to this government on many occasions. His most recent report recommended a number of things and, by the way, I'll remind the member opposite, also congratulated this government for a number of initiatives it has taken and has endorsed this government's approach; that is, a multi-pronged approach. He called for skills training investment, infrastructure investment, targeted tax cuts.

Our government has laid out a plan that is working, recognizing that there continue to be challenges in the economy and there will always be more to do. Our government has the right plan. We'll continue to pursue it in the context of all the challenges in the world economy today.

The Speaker (Hon. Steve Peters): Final supplementary.

Mr. Robert W. Runciman: This morning the Premier, apparently trying to justify his ill-considered remarks, said he was just being honest. I don't know how Liberals define "honest." We know keeping campaign promises doesn't fall under that definition. I guess telling a community like Goderich, which just lost 500 jobs with Volvo, that there's no hope is the Premier's idea of honest. I call it depressing defeatism, unbecoming a Premier of this great province. If you want to be honest, Minister, stand up today and admit that you're not up to the job, that your government policies over the past five years have weakened Ontario and placed our economy in jeopardy. Try that on for honesty.

Hon. Dwight Duncan: I think the people of Ontario rather decidedly determined who wasn't up to the job, I would remind the member opposite. To the people of Goderich, this government will work with them. To those families at Volvo, we will continue to offer the services we've offered at every one of these. I'll remind the member opposite, this government is investing at Bruce Power, for instance. Thousands of jobs have been created there, the largest infrastructure project anywhere in this country.

There's no doubt that there are challenges. There's no doubt that jobs are being lost in certain sectors. In spite of your criticism of the Premier, I'll remind you what your own leader said in today's Toronto Star: "I think we do see that when plants close and equipment moves out that some of those particular jobs are not coming back." That's John Tory.

The people of Ontario have endorsed this government's plan through their votes—

The Speaker (Hon. Steve Peters): Thank you. New question.

YOUNG OFFENDERS

Mr. Robert W. Runciman: Do you want to give me an extra supplementary, Speaker?

My question is to the Attorney General. As you know, this afternoon we'll be debating a Progressive Conservative motion calling for strengthening of young offenders legislation. I'd like to give you a chance to clarify your position, because you can't seem to figure out where you stand on the federal government's new proposal to deal with youth crime. In one breath you say the feds have got it all wrong and then in the next breath you say they're not being tough enough. A straight answer would be appreciated here, Minister. Do you support amending the YCJA to allow judges to emphasize public safety and deterrence when dealing with older repeat and serious young offenders? Yes or no?

Hon. Christopher Bentley: It's unfortunate that the member opposite wishes to play politics with an issue that is very important for all Ontarians, and that's the safety of our communities. Our position throughout is that we should have a legislative and an enforcement approach that is as tough as it needs to be on those who pose risk to society—the greatest risk to our communities—and that we need to invest in the programs that will ensure, particularly for young people, that when they make that first non-violent entry into the criminal justice system, we have the supports to keep them out of justice for the rest of their lives.

Now the member wants me to comment on another Harper promise. I know I will have two more opportunities in the supplementaries to do that, and I look forward to it.

The Speaker (Hon. Steve Peters): Supplementary.

Mr. Robert W. Runciman: I'm asking the minister to comment on a motion that's before the House today. Last week, in response to a question on youth crime from the member for Whitby—Oshawa, you said that you asked the federal government to bring in changes that would get tougher with youth who "posed the greatest risk." That's exactly the issue our motion addresses: improving the way the system deals with the most serious and repeat offenders.

Minister, we've recently experienced a wave of violent youth crime, even into our schools. We've heard your rhetoric. Now is the chance to walk the walk. Will you support our motion?

Hon. Christopher Bentley: The member quite rightly outlines the problem. He wants me to comment on a promise by the Prime Minister, Mr. Harper, a promise by the Conservatives. Well, let's look at the risk of commenting on those promises, because let's see whether they delivered on previous promises.

First of all, they promised 2,500 police officers across Canada; just a couple of years ago they made that promise. How many have we got? Money for a thousand. For how long? Five years. A broken promise—so it's a bit risky commenting on that promise. They promised to deliver tougher youth legislation, and what did they deliver? They delivered amendments to the Youth Criminal Justice Act that didn't even comply with the recommendations made by the Nunn Commission in Nova Scotia. The promise missed the mark—big risk buying into Tory-Harper promises.

The Speaker (Hon. Steve Peters): Final supplementary.

Mr. Robert W. Runciman: Bluster and baloney—a double-talk sandwich. We're talking about a motion before the House this afternoon, specifically tying in with comments you've made publicly. Out of one side of your mouth, for public consumption, you say you want tougher laws for youth posing the greatest risk to society, but when you're given the opportunity to put your money where your mouth is, the real Liberal apparently comes out—a false front, a sham. When it comes to taking real action against repeat, serious young offenders, you're missing in action.

If that's not the case, stand up right here today and say that you will support our motion and that your colleagues will support our motion to do something really meaningful to impact youth crime in this province .

Hon. Christopher Bentley: So rather than a motion to comment on Tory-Harper promises that are going to be broken, how about the Leader of the Opposition and his party supporting our plan? First of all, ban handguns throughout the country. You don't need handguns. He talks about a risk of youth violence. Why would you want to put handguns in the hands of the youth of the province? Ban handguns. Stand up for the people of Ontario. How about more police officers on the street? We funded an extra thousand police officers on the street. Will he pick up the phone, call his buddy Mr.

Harper and tell him to live up to the promise to put more police officers on the streets of our communities like London, like Toronto, like Ottawa and like Belleville to support real community safety? And will he call upon his chum Stockwell Day to improve border security so that smuggled guns don't get across the border in Ontario? Why won't you stand up for the people of Ontario?

FEDERAL LIBERAL

ELECTION PROMISES

Mr. Gilles Bisson: My question is to the Minister of Finance. Since the days of John Robarts, every Premier has run a fairness-for-Ontario campaign. On this side of the House, we agree that Ontario needs a federal partner on employment insurance and economic development—no question—but the Dion Liberals released a 76-page platform with not one mention of expanding employment insurance eligibility or introducing an economic development agency for hard-hit southern Ontario. Would the minister agree that the Dion Liberal platform will not deliver fairness for Ontario?

Hon. Dwight Duncan: I remind the member opposite that Premier McGuinty wrote to the leaders of all the federal parties and asked them to respond by October 3. That is the day after tomorrow, I believe. We look forward to those responses from all of the party leaders and, indeed, from candidates throughout Ontario.

A number of our members today were out distributing Vote for Fairness Ontario brochures at subway stations here in Toronto. Signs will be going up in different ridings. I know I'm going to be putting one and my colleague from Sudbury will be putting one on his front lawn.

We look forward to those written responses from all of the party leaders and for a realistic plan as to how they will address all the things they say they're going to do that won't harm the overall Canadian economy.

The Speaker (Hon. Steve Peters): Supplementary.

Mr. Gilles Bisson: Minister, despite your government's call for employment insurance fairness, the Dion Liberal proposal will only mean more EI unfairness for laid-off Ontarians, and despite this Liberal government's call for the creation of a southern Ontario economic development agency, the Dion Liberal platform will only mean more job losses in hard-hit manufacturing communities like Welland and your own community of Windsor. Only the federal NDP platform promises to help protect jobs and support unemployed workers. Since the minister has been highly critical of the Dion plan, when will he endorse Jack Layton and the NDP as the right choice for Windsor and all of Ontario?

Hon. Dwight Duncan: The government of Ontario is committed in a non-partisan way to fairness for the province of Ontario. We have asked all the federal party leaders to respond. We have asked candidates across Ontario to respond to four specific issues. When we are in receipt of those responses, we will publish them. We will advise the people of Ontario. We will continue the campaign.

This is a serious issue. Whether you're talking about fairness in health transfers, employment insurance reform or equalization, it's about laying out a plan that's realistic and achievable and isn't just a bunch of promises to everybody with no plan to actually fund them.

The Speaker (Hon. Steve Peters): Final supplementary.

Mr. Gilles Bisson: I agree it's a serious issue, but this government has written letters, created petitions and even has a fancy website. Now the party platforms are out, the Dion Liberals want a carbon tax that will hurt hard-working Ontarians. They have no job creation strategy and offer no help for the unemployed. Jack Layton and the NDP will expand EI eligibility and create a southern Ontario economic development agency.

Earlier this week, this minister dismissed the Dion carbon tax as a bad approach in tough economic times. Why won't he now dismiss the entire Dion Liberal platform as not delivering to Ontarians in these tough economic times?

Hon. Dwight Duncan: What we can dismiss is Jack Layton's la-la land, tax-raising, job-killing plan for Ontario. Mr. Layton's $51-billion plan will raise taxes on the very companies that we need to have investing in Ontario. Mr. Layton is prepared—

Interjection.

The Speaker (Hon. Steve Peters): The member for Hamilton East is not in his seat.

Hon. Dwight Duncan: Mr. Layton has not laid out a plan. He's laid out a bunch of promises with no idea of how he could ever, ever possibly implement them.

It is incumbent in the debate for the leaders of all the federal parties to respond to Premier McGuinty's very reasoned, very pointed, very specific issues that are affecting the Ontario economy and that they explain it in a way that they can actually afford to pay for it. Mr. Layton's plan reminds me of the Agenda for People. That was something that was here—

The Speaker (Hon. Steve Peters): Thank you.

FINANCIAL INSTITUTIONS

Mr. Gilles Bisson: Another question to the Minister of Finance. At the same time that Ontario's losing hundreds of thousands of manufacturing jobs, the world is witnessing one of the biggest financial crises in history. Despite the unprecedented nature of this crisis, your government insists on taking the same hands-off approach to the financial meltdown as it has in the manufacturing crisis. What is this government going to do to protect Ontarians' hard-earned savings?

Hon. Dwight Duncan: The member opposite has correctly pointed out that there are enormous challenges in liquidity in world financial markets. These challenges are impacting every western economy.

Ontario has some of the most aggressive legislation for the protection of pensions, for the protection of insurance and a number of other things. We have been in constant communication with the Securities and Exchange Commission, leading economists, to assure ourselves that our financial institutions continue to remain stable and are certainly much more stable than some institutions in the United States.

The member quite correctly points out that these events will impact on all of us. I think it's incumbent on all of us to continue to monitor this. We have been doing that. We've been making investments through our five-point plan and other areas to help address these challenges, and we'll continue to work with all members of this House as we address this world situation.

The Speaker (Hon. Steve Peters): Supplementary.

Mr. Gilles Bisson: I'd also remind the minister that Ontario has the responsibility for securities regulation and we have oversight over the Ontario Securities Commission. Yesterday, my colleague Nickel Belt MPP France Gélinas did what the government should have done and insisted that the OSC officials appear immediately before the committee to discuss this financial crisis.

At a time when Ontarians' pocketbooks are hurting and they're worried about the security of their savings, why is this government sitting on its hands?

Hon. Dwight Duncan: I'd remind the member that the Securities Commission has oversight for the value of the shares and how they trade; it has no regulatory authority over liquidity in the banking markets.

I can tell the member that regular compliance audits in terms of securities disclosures have been done. The head of the Securities Commission tells me that our financial institutions, those for which we have oversight, remain in relatively strong shape compared to others.

So you can talk about that, I say to the member opposite, but it really has nothing to do with it. I would suggest that we take this issue a little more seriously instead of throwing up pieces of legislation that really have nothing to do with it. It's about liquidity in international markets. The Ontario Securities Commission has no ability to influence that, with respect.

The Speaker (Hon. Steve Peters): Final supplementary.

Mr. Gilles Bisson: Minister, Ontarians have every right to expect that this government will use every tool at its disposal to protect jobs and hard-earned savings. While your government looks on from the sidelines and does nothing, New Democrats at both the federal and the provincial level have laid out effective jobs plans and taken action to ensure that our financial watchdogs explain what they're doing to protect hard-earned savings. When will this government stop engaging in diversions like the fairness for Ontario campaign and take real action to protect the jobs and savings of hard-working Ontarians?

Hon. Dwight Duncan: I think Ontarians are looking to us for leadership, and that involves not using pieces of legislation that have no impact on that.

I think people are worried about their savings and their future and I think we shouldn't be exploiting that fear. I think we should be watching these situations carefully, relying on our regulators, who are very competent in their jurisdictions, who assure us and who publish reports annually around the challenges in the areas that they regulate, recognizing that there are roles for the federal government, provincial government, and local authorities in some instances.

These are very, very challenging times. We need a very calm and reasoned approach, and I think all of us should work together to try to reassure Ontarians and Canadians that we will get through these very difficult circumstances.

MANUFACTURING JOBS

Mr. Ted Chudleigh: My question is to the Minister of Finance. Yesterday morning, 500 good workers at the Volvo road grading plant in Goderich were told that their jobs were going or gone. After 50 years of success on the shores of Lake Huron, the company is consolidating its North American manufacturing base in a low-tax jurisdiction of Pennsylvania. It's a very sad time for Goderich. The plant was the town's top employer. Its workforce was 7% of the population.

I wonder if it could have been avoided. I wonder, if the government hadn't given away all its money to a select few, whether it might have had something left to offer Volvo before they decided on Pennsylvania. Well, it's too late now. Volvo is gone, and Goderich is decimated—just another 500 names to add to the list.

Minister, your government's economic policies have failed the people of Goderich. If you don't change course now, the bleeding will not stop. How many small towns in Ontario must suffer like this before you realize that we are living in a—

The Speaker (Hon. Steve Peters): Thank you. Minister of Finance?

Hon. Dwight Duncan: First of all, this government is very concerned about the families that are affected by this unfortunate decision. Our discussions with the company are based on a range of considerations that go beyond simply what you were talking about. We are making investments to help attract new investments. In fact, the Premier was at the expansion of the Honda plant just late last week. There's no doubt there are challenges in the manufacturing sector. I remind the member opposite that those challenges are being experienced in many jurisdictions, including most of our leading competitors.

In fact, Ontario's manufacturing job loss has been substantially lower than that of some of our competitive jurisdictions. I would submit to the member opposite that, through the investments that we are making, we wish to continue to try to prevent this type of situation. We believe it requires a multi-pronged approach. We disagree with you, sir, that tax cuts in and of themselves will solve—

The Speaker (Hon. Steve Peters): Supplementary.

Mr. Ted Chudleigh: The minister has been giving the same answer so often, he is starting to believe it. The answer is simple; it's Economics 101. Businesses who are interested in long-term growth and stability will locate in low-cost jurisdictions. Don't take my word for it; take a former Minister of Finance's word for it: "People pay attention to the level of taxation in Ontario to make investment decisions as to whether they're going to invest in the province, and thereby create jobs and more economic prosperity. So the principle of a competitive tax system is right at the foundation of the work we do." That was Greg Sorbara on October 27, 2004.

Minister, it's time to listen to your colleagues. It's time to listen to the experts. It's time to listen to the business community. Will you give Ontario the competitive edge that it needs? Will you move towards making Ontario an attractive, low-cost jurisdiction?

Hon. Dwight Duncan: We have been reducing the corporate tax burden—a $3-billion cut over four years.

Interjection.

Hon. Dwight Duncan: The member opposite says $3 billion is a pittance. It's too bad you didn't have that much money for our schools and universities when you were here. We are going to continue to make the investments we've made, including targeted tax cuts to businesses. It's questionable whether a cut in general corporate taxes would even benefit these companies who aren't making money. Our approach is the right approach. It's an approach that is endorsed by economists. It says that you have to have a range of policies that respond to all of the challenges in an economy.

With that, the people of Ontario can be assured that their government is working in their interest, and that is one of the reasons why we continue to attract new jobs, in spite of challenges in some companies in some sectors.

SPECIAL INVESTIGATIONS UNIT

Mr. Peter Kormos: A question to the Attorney General: Provincial Ombudsman André Marin finds the province's special investigations unit to be toothless, timid, biased and ineffectual. When will the minister commit to implementing Marin's recommendations?

Hon. Christopher Bentley: I would like to thank the member for the question. I recognize—we all recognize—as Ombudsman Marin did, that the SIU plays a very important function in our society. It is the only independent civilian oversight of police activities in Canada. Ombudsman Marin made some excellent recommendations as a result of his report, and we've already started work from the ministry perspective on those recommendations.

I look forward to speaking in more detail on the supplementary, but let's be clear: The Ombudsman's recommendations that the investigative capacity be enhanced is the direction that we are going to go. The Ombudsman's recommendation that there be increased transparency—absolutely. The Ombudsman's recommendation that there be increased and enhanced accountability—absolutely. We look forward to working with the new director of the SIU and all community partners and police agencies to strengthen this very important institution.

The Speaker (Hon. Steve Peters): Supplementary?

Mr. Peter Kormos: When the people don't have confidence in the SIU, they don't have confidence in the police. If they don't have confidence in the police, police officers and the public are all at risk. Ombudsman Marin made some very specific recommendations after some startling and shocking revelations. He said, "The SIU has become so timid and fearful in its watchdog role that police oversight has hit rock bottom in Ontario." Why won't this minister commit to implementing the Marin recommendations?

Hon. Christopher Bentley: We are very thankful for the recommendations made by the Ombudsman and we are working very hard to make sure that his goal—all of our goal—of a strengthened SIU is achieved.

The community has received the report that was made public just yesterday. It's important in strengthening the SIU that we get good input from the community—from community agencies, from the police, from the honourable member, from all those who recognize, as the Ombudsman did, as we do, that this SIU, which is the only independent civilian agency for oversight in Canada, needs to be strengthened because it performs such an important function. We want to get it right, so we are going to take whatever time is required to make sure that we get it right.

PAN AMERICAN GAMES

Mr. Wayne Arthurs: My question is for the Minister of Health Promotion. Since April of last year we've heard much about the 2015 Pan American bid for the Greater Golden Horseshoe. Held once every four years, the games last came to Canada in 1999. Ontario is not the only player in the game. Caracas, Lima and Bogota may also put bids forward. The Pan American Sports Organization will choose the host city later this year and time is of the essence if Ontario is going to win these games.

I know we sat on pins and needles waiting for a consensus with the federal government, but in early August the federal government made a commitment to support the province of Ontario's 2015 Pan American bid for the Greater Golden Horseshoe. Since that time, many municipalities, including those in Durham region, have shown keen interest in the bid. Would the minister give us an update on our bid?

Hon. Margarett R. Best: I want to take this opportunity, first of all, to thank the member for Pickering—Scarborough East for his question. As many of you already know, the Pan American Games present a great opportunity for the Greater Golden Horseshoe and for all Ontarians to be part of what will be a historic achievement for the province of Ontario. As a great mind once said, "Nothing great was ever achieved without enthusiasm."

I urge all members of the Legislature and the people of Ontario to throw their support behind the Premier, and the chair, David Peterson, who was appointed by the Premier on September 10, 2008. Just yesterday, Mr. Peterson nominated a key individual as the president and chief operating officer to oversee the bid—Ms. Jagoda Pike.

The Speaker (Hon. Steve Peters): Supplementary? The member for Hamilton Mountain.

Ms. Sophia Aggelonitis: Hamiltonians are showing a keen interest in the games and are excited about the bid. Hamilton proudly hosted the first Commonwealth Games back in 1930. People in my community are hopeful that they will have the chance to showcase Hamilton to the world again in 2015. Mayor Eisenberger and others in Hamilton are ready to help Ontario any way they can. David Peterson has indicated that Hamilton will play a key role if Ontario wins the Pan Am Games.

Would the Minister of Health Promotion tell us how the 2015 Pan American bid will benefit Hamilton and the Greater Golden Horseshoe should we be successful? What would be the next steps in regard to the bid and when should we expect to know if we've won the bid?

Hon. Margarett R. Best: I want to thank the member for Hamilton Mountain, who I must say is a great advocate for her community.

If the Toronto-Greater Golden Horseshoe bid is successful, it is projected to inject almost $2 billion into the economy of Ontario, creating 17,000 jobs and attracting approximately 250,000 tourists. The 2015 Pan American Games would potentially inject a billion-dollar capital investment into sport and recreation, provi