role="main" class="main-container container js-quickedit-main-content" id="main-content">

January 15, 1987

33rd Parliament, 2nd Session

< Previous sitting day

Next sitting day >

Hansard Transcripts

L087 - Thu 15 Jan 1987 / Jeu 15 jan 1987

ORDERS OF THE DAY

PRIVATE MEMBERS' PUBLIC BUSINESS

FARM TAX REDUCTION PROGRAM

AGRICULTURAL PRODUCTION

FARM TAX REDUCTION PROGRAM

AGRICULTURAL PRODUCTION

AFTERNOON SITTING

MEMBERS' STATEMENTS

DAY CARE

SOLICITOR GENERAL'S REMARK

RECOGNITION OF SENIOR CITIZEN

SOLICITOR GENERAL'S REMARK

SCHOOL BOARDS

DRIVER EXAMINATIONS

YOUTH UNEMPLOYMENT

STATEMENT BY THE MINISTRY

CREDIT CARD

RESPONSE

CREDIT CARD

VISITOR

MEMBER'S ANNIVERSARY

ORAL QUESTIONS

GASOLINE TAX

CREDIT CARD

CHILDREN'S MENTAL HEALTH SERVICES

DAY CARE

LOCATION OF FEDERAL AGENCY

PLANT SHUTDOWNS

EDUCATION FUNDING

PENSION FUNDS

ONTARIO INSTITUTE FOR STUDIES IN EDUCATION

YOUTH UNEMPLOYMENT

FARM TAX REDUCTION PROGRAM

UNIVERSITY FUNDING

AGRICULTURAL STABILIZATION PROGRAMS

SALE OF UNREGISTERED HOMES

LOCATION OF FEDERAL AGENCIES

ATTENDANCE OF MINISTER

PETITIONS

NORTHERN HEALTH SERVICES

CONTROL OF SMOKING

REPORTS BY COMMITTEES

STANDING COMMITTEE ON GENERAL GOVERNMENT

STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS

INTRODUCTION OF BILL

RETAIL BUSINESS HOLIDAYS AMENDMENT ACT

ORDERS OF THE DAY

ESTIMATES, MINISTRY OF HOUSING (CONTINUED)

BUSINESS OF THE HOUSE

The House met at 10:01 a.m.

Prayers.

ORDERS OF THE DAY

PRIVATE MEMBERS' PUBLIC BUSINESS

FARM TAX REDUCTION PROGRAM

Mr. Pollock moved resolution 73:

That in the opinion of this House, the Minister of Agriculture and Food (Mr. Riddell) in conjunction with the Minister of Revenue (Mr. Nixon) should immediately move to increase the farm property tax rebate from 60 per cent to 70 per cent.

The Deputy Speaker: The honourable member has up to 20 minutes for his presentation and he may reserve any portion of it for the windup.

Mr. Pollock: I am pleased and proud to introduce this resolution. It is straightforward and self-explanatory. This is an issue which is of great concern to me and many of my constituents. I hope all members of this House will support this resolution, particularly the Minister of Agriculture and Food and the Minister of Municipal Affairs (Mr. Grandmâitre), because theirs would be the two ministries that would implement the increase.

As the resolution states, I feel the government should move quickly to increase the farm property tax rebate from 60 to 70 per cent. The implementation of this would require only minimum changes. I also feel that if the government were to increase the farm property tax rebate, it would show it really does care about the farm community, contrary to popular belief.

This type of rebate is considered to be one of the fairest types of assistance, because not only a chosen few but everyone in the farming business would be helped. The farm property tax rebate was introduced some years ago to adjust for inequities in the property tax system. The rebate was increased from 50 to 60 per cent a few years ago by the Progressive Conservative government. I feel the current financial crisis facing farmers in Ontario justifies the increase to 70 per cent.

For the benefit of some members who may not be familiar with the way the farm property tax rebate works, I will briefly outline the basic criteria. Application forms are sent out on an annual basis on information provided by the municipality and the assessment department. For a person to be eligible, the land must be farm land which is currently in use as farm land. The farm must produce either $5,000 worth of products and goods in eastern or northern Ontario or $8,000 in southern Ontario. If the land is sold for development, all the money rebated to the farmer over the immediate past 10 years has to be paid back with interest at 10 per cent.

The definition of what the farm may produce is quite broad. It is to produce anything that is useful to man. This includes everything from Christmas trees to nurseries. Also eligible are horse-breeding farms and farms that raise fur-bearing animals.

Further, if a house is situated on the farm land, it is eligible for a rebate of 60 per cent, provided the house is occupied by persons who are involved in actual farming. The rebate is paid only after the minimum 60 per cent of the applicable property taxes are paid by the farmer.

Corporations which are at least 50 per cent Canadian-owned and which meet other criteria that I have already mentioned are eligible for the 60 per cent property tax rebate.

In general, this system has worked well over the past years, but as with everything else, it must be kept in tune with the times. That is why an increase to 70 per cent is warranted.

There was a proposal a few years ago to have the system changed and to have a farmer pay tax on his house and one acre of land. This sounds practical until one starts to take a look at the overall process. For example, for a farmer in a predominantly farming municipality, possibly 80 or 90 per cent of the money to run that municipality comes from the farming community. To take the taxes off the land and the farm buildings would mean that the mill rate on the house and one acre of land no doubt would have to double.

A municipality has to have money to operate. That is a recognized fact. Proponents of this system suggest the government might even give a grant to the municipalities to make up for such a loss of tax revenue. This would mean the tax rebate would be paid to the municipality and not to the farmer. The municipality is not totally made up of farmers; so the nonfarming residents in that particular municipality would also be getting some of the assistance.

I maintain that we have a good system in place, so why change it? The farm tax rebate is working well. It just has to be updated to 70 per cent.

The financial problems facing farmers in Ontario are well known and well documented. While most of the people who are employed in other industries receive an effective wage increase of an average of four per cent, the farmer is faced with a reduction in income on cash crop farming of 30 per cent.

Reduced commodity prices caused by the trade war between the United States and the European Community are a main contributing factor. Another financial burden of the farmer is the increased property tax. In a community with which I am familiar, the property tax went up by 7.9 per cent and is likely to go up by another 7.9 per cent next year. In other areas, the taxes are going up at an even greater rate.

Another cost that the farmer must absorb is the extremely high insurance rate. This province is still in a period of rapidly rising liability insurance rates. The small family farm also has to absorb a large portion of the cost of environmental insurance as a result of the implementation of the spills bill. One farmer said his liability insurance went up by $100. The fact of the matter is that the small farm owner is not the one responsible for the greatest amount of pollution; it is primarily the large corporations. A fairer system to establish the rates charged to the farmer could be worked out to assist these people through a very tough financial time.

The farm tax rebate is one of the fairest rebates of subsidies paid to farmers. Some farmers invest heavily in farm machinery and farm land in order to produce more food. In some cases, they receive an interest rebate on the money borrowed. If the end result is that the farmer makes less than the minimum wage, then I would have to say that particular subsidy is a subsidy to the processors, the supermarkets and the consumers, not the farmer.

After the government was sworn into office on the front lawn of the Legislature, it promised the world. It said it would double the amount of money going to the farming community. That has not happened. In my estimation, actual money going into the Ministry of Agriculture and Food will be about 1.5 per cent of the total budget committed, while 1.4 per cent of the Ontario budget was paid to farmers back in 1981-82. Those were difficult times for everyone -- the farmer, the small businessman and, in some cases, big business.

During 1985-86, the economy certainly has improved for the business community but not for the farmer. One of the reasons for this is that the European Community gives large subsidies to farmers in those countries and, as a result, the American government is subsidizing its farmers to the tune of billions of dollars. The government of Saskatchewan has increased its subsidies, as have Alberta and Manitoba. Here in Ontario the farmer receives only about 1.5 per cent of the total budget committed, an insignificant amount above what he received during the recession and nowhere near double.

Looking back over the past year, I have real doubts about how committed the Liberal government is in seeing a financially sound agricultural industry in Ontario. In the face of setbacks suffered by various sectors of industry, the minister seems extremely reluctant to offer any assistance. By increasing the farm property tax rebate to 70 per cent, the government will be helping farmers of the province who are falling behind the inflation rate.

The Ontario Federation of Agriculture has reported that farm incomes for 1985 are at only 55 per cent of the 1973 level. I am certain that if other sectors of the economy were forced to survive on 55 per cent of the income they were earning 13 years ago, Ontario would be in drastic financial shape. The truth is that Ontario is one of the most prosperous provinces in Canada and Canada is one of the richest countries in the world. It is extremely unjust that the people who feed the people of Canada as well as the people of many other countries of the world are forced to live at the poverty level.

A move by this government to help farmers get through these rough times would be a great step forward. The minister has the resources at his disposal. Let him take this small step and help our food producers.

The cost of increasing the tax rebate from 50 per cent to 60 per cent a few years ago was in the neighbourhood of $20 million annually. The cost of an increase from 60 per cent to 70 per cent would, no doubt, be in the $20 million area again. I regard this as $20 million well spent.

The Deputy Speaker: Does the member wish to reserve the remaining time for his wrapup?

Mr. Pollock: I do.

Mr. Hayes: I want to compliment the member for Hastings-Peterborough (Mr. Pollock) for introducing this resolution to increase the farm property tax rebate from 60 per cent to 70 per cent. A resolution of this nature will help farmers somewhat. When a resolution such as this is introduced in the Legislature, whether it is passed or not, more than anything else it further highlights the problems the agricultural sector is faced with today.

Even though I support this resolution, I cannot help but think that here we are coming up with another Band-Aid solution to a very serious problem, another piece of legislation that will help a little in the immediate future but does not address the real problem, and that is the question of commodity prices or fair prices for farmers' commodities.

I do not want to get off the track, but it upsets me to have this government continue to introduce programs that help some farmers when it seems to be so hesitant in dealing with the real problems in agriculture. Existing programs help in some cases, and this resolution to increase the farm property tax rebate will also help in some cases. However, why is this government so hesitant in tackling the real problem head on? Why is this government and why was the last government so afraid to push for supply management? Are they waiting for family farms to disappear totally, letting the multinationals take over as they have in other industries?

We are in a situation today where we have to put more funding into agriculture and also implement incentives to encourage farmers to stay on the land. Rather than continue to put Band-Aids on a large wound, we should be doing everything in our power to give farmers a just price for their commodities and their labour. That is supply management. When this is accomplished, we will not have to discuss government programs and subsidies nearly as much as we do now in this Legislature.

I support this resolution wholeheartedly. I know it is a step in the right direction to help farmers immediately, but let us not stop here; let us get some political will in this House and work seriously towards preserving the family farm in Ontario and Canada.

Mr. G. I. Miller: I am pleased to rise this morning and have the opportunity to speak on resolution 37, brought forward by the member for Hastings-Peterborough, "That in the opinion of this House, the Minister of Agriculture and Food in conjunction with the Minister of Revenue should immediately move to increase the farm property tax rebate from 60 per cent to 70 per cent."

I am a farmer and also an elected representative for one of the most agriculturally productive areas in all of Canada. I know about the difficulties facing the family farm. We have many tobacco farmers in our area and, as we all realize, this is an industry that has been hit very heavily in the past few years. It is our responsibility as members of the Legislature to take any necessary steps that will help ensure that farming remains a viable economic alternative. It is this responsibility that compels me to support the resolution put forward here today.

The Ontario farm tax reduction program is not perfect; I do not think any government program is. The farm tax rebate program does, however, put money back into the farm economy of Ontario and that must be considered the bottom line.

The resolution put forward here today asks that we support an increase from the current level of farm tax rebate assistance. The farm tax rebate program was established in 1970 under the Ministry of Agriculture and Food Act. In 1970, 1971 and 1972, the level of assistance was 25 per cent of the municipal and school tax base on farm assessment. This was increased to 50 per cent in 1973 and to 60 per cent in 1984. The member for Hastings-Peterborough is asking that in 1987 the rebate level be increased again, this time to 70 per cent.

The farm tax rebate program is unique in that it is a co-operative effort of three provincial ministries. The Ministry of Agriculture and Food provides the overall guidance and funding, the Ministry of Revenue provides the assessment information and the Ministry of Municipal Affairs provides the administration. The advantages or disadvantages of the current three-ministry system is something that should perhaps be debated at another time.

The farm tax rebate program does not provide tax rebates to farmers; it provides tax rebates to land owners, and therein lies one of the inequities of the present system. In order to receive the farm tax rebate, one does not have to be a farmer. All one has to do is to own property assessed as a farm for the current taxation year. There is no doubt that a great many land owners in Ontario live on and farm their property. These are the people this program is designed to assist.

There are, however, some glaring examples of land owners who are not farmers in the true sense but who are receiving substantial rebate assistance under the program. In 1982, Stelco Inc. received $55,697 in rebates. In 1983, Dofasco Inc. qualified for $35,807. These companies qualified for farm tax rebates because they owned agricultural land that was intended for industrial development. In one five-year period, Windfields Farms Ltd., one of Canada's most prosperous horse farms, received $100,000 from the rebate program.

I have brought forward these examples in an effort to ensure that members of this House have a clear and complete picture of the program we are discussing this morning. In that same spirit, I would like to take the time now to outline the full eligibility requirements for the farm tax rebate program.

In order to qualify under the current program, the property in question must be assessed as a farm. The applicant must be a citizen or resident of Canada, at least 60 per cent of the property tax must already have been paid, and the property on its own, or as part of a larger farming operation, must produce a minimum value of $8,000 worth of farm products in a normal production year in southern Ontario or $5,000 a year in northern Ontario.

If these criteria are met, the property is eligible for farm tax rebate. Farm owners who have had their farm tax rebate appeal denied are provided with an avenue of appeal through the Farm Tax Rebate Appeal Board. This board is made up of seven independent farmers from across Ontario. As I mentioned earlier, a farm property in southern Ontario must produce $8,000 worth of farm produce per year to qualify for the tax rebate program. To reach the $8,000 figure a farmer would have to grow five acres of tomatoes or 31 acres of corn or sell eight head of beef cattle for slaughter or keep four sows from farrow to finish.

One of the big questions surrounding the farm tax rebate program is whether the money is getting out to the people who need it the most. As is the case with any financial assistance program, this question must be answered before it can be judged a success. The farm tax rebate is not, as we have already seen, limited to the farmer in financial difficulty. The money in the program is allocated on a universal basis to the farm property owners of this province.

If we increase the rebate to 70 per cent, as this resolution suggests, we will increase the assistance to those who do not need it as well as to those who do need it. There should be no question that the property tax burden on farmers is substantially greater than that on nonfarmers.

The question is the point at which the rebate becomes higher than the amount needed to bring rural property taxes to the same level as those in urban areas.

When the farm tax rebate program was first introduced in 1970, there were 224,000 farm properties considered eligible for the rebate; the program cost that year was something in the neighbourhood of $15.8 million. The rebate was increased to 50 per cent. There were approximately 158,000 properties considered eligible; that is about 70 per cent of the 1970 figure. The total dollar value of the program in 1973 was approximately $28.1 million. In 1984, the rebate was increased again, this time to 60 per cent. The number of properties considered eligible was 149,000, 33 per cent below the number in 1970. The farming community is decreasing.

The cost of the farm tax rebate program in 1984 was $93.9 million. In the 1985-86 fiscal year, 154,000 properties received rebates totalling more than $101 million. The program budget for the 1986-87 fiscal year is expected to be $104 million.

In 1970, the average farm property received a rebate of $71. In 1973, that figure was $177. In 1984, the average rebate was about $627. In 1985, it was more than $655. For 1986, that figure is expected to be close to $700 per property.

There is no doubt that a good many of these dollars reach the farmers who need them the most. Unfortunately, some of this money is also reaching those farmers who are able to make it financially without government assistance.

The farm tax rebate program was originally conceived as a way to correct the inequities of the property tax system. The farmers of this province were paying more than their fair share under the current farm tax rebate system.

The Ontario government is committed to the concept of helping farmers help themselves. I think we have done that. The provincial budget for agriculture has increased by 39 per cent. In the fiscal year 1983-84, the province's budget for agriculture was $303 million. In 1986-87, that figure is expected to be more than $430 million. We have committed ourselves to programs designed to put money back into the pockets of deserving farmers. The best example of this is the recently announced OFFIRR Plus program, the Ontario family farm interest rate reduction.

As my time is running close to being finalized, I would like to say in conclusion that although I have some reservations concerning the program, I will be offering my support to the resolution brought forward here today.

Mr. J. M. Johnson: I also am very pleased to have the opportunity to speak in support of the resolution of the member for Hastings-Peterborough, "That in the opinion of this House, the Minister of Agriculture and Food in conjunction with the Minister of Revenue should immediately move to increase the farm property tax rebate from 60 per cent to 70 per cent."

While a 10 per cent increase does not seem to be very much, it would amount to approximately $18 million to $20 million this year and would be money well spent as it would help alleviate some of the serious financial problems farmers are facing these days in the world marketplace.

The farm property tax rebate is one of the best benefits Ontario farmers receive from the government; indeed, it is the largest single annual agricultural expenditure made by the Ontario government. This year, the estimated expenditure is set at $104 million for this program. Compared to the millions of dollars going to our western farmers, especially in Alberta and Saskatchewan, through their new provincial subsidization programs, this 10 per cent increase would be a very small amount of money to spend to assist further our Ontario farmers.

No one knows the cost of the US farm bill, so called, but it is estimated that it will cost the American taxpayers anywhere from $20 billion to $30 billion a year -- billions of dollars, not millions. The European Community also financially subsidizes its farmers so heavily that many farmers in Europe receive 50 per cent to 70 per cent of the cost of production of food from their governments. Our Ontario farmers are forced to compete in this very unfair world marketplace. Surely an increase in the farm property tax rebate program requested by this resolution is not unreasonable under these circumstances.

A few years ago, the member for Don Mills (Mr. Timbrell), then Minister of Agriculture and Food, proposed that the system be changed, that farm land and buildings be exempt from taxation and only the farm house and one acre of land be taxed. Many farmers supported this proposal, but many were opposed to it, such as the member for Hastings-Peterborough. It is my understanding that many Ontario Federation of Agriculture executives and members still favour this proposal. I for one feel there is some merit in it and it should be given consideration.

I would like to suggest to the government that if for any reason it is opposed to increasing the percentage of the farm tax rebate, it should at least give consideration to reviewing the alternative proposal to eliminate all tax on farm land and buildings.

Perhaps at this time, the proposal of the member for Hastings-Peterborough may be the best way to go. The government has made a commitment to preserve farm land in Ontario and, naturally, nearly everyone supports that concept. It seems logical to me that the best way to preserve farm land is to preserve the farm. If the farmer can stay on his land, he will do so, and by doing so, he will preserve the land as well.

An increase in the farm tax rebate is one way we can help farmers cope with their ever-escalating costs. The consumer would also benefit and therefore would be supportive of this proposal, because this would contribute to keeping the cost of food products at an acceptable level while at the same time assisting our enterprising but financially depressed farmers to remain in operation.

At this time, I would like to draw to the attention of the House once again a very serious problem we are having with the present farm tax rebate system because of the inability of the Minister of Municipal Affairs to administer this program.

In September of each year, the ministry mails out the application forms to a list of farm owners provided by the municipality and the assessment department. In September 1986, only half the forms were mailed out on time. The other half may or may not have been mailed out by this date. On November 24, the member for Durham-York (Mr. Stevenson) questioned the delay. I raised the same question on December 18, and on Tuesday, January 13, the member for Stormont, Dundas and Glengarry (Mr. Villeneuve) also brought this concern to the attention of the minister.

In response to the question from the member for Stormont, Dundas and Glengarry, the Minister of Municipal Affairs admitted that the delay had been caused by human error and he apologized. At the same time, he also stated that all application forms had been mailed and he had received the co-operation of the post office in Toronto to make sure all these applications were in the mail. Unfortunately, that is exactly what his staff has been saying for more than a month. The standard reply has been, "It was mailed today." That reply was given to my office on several occasions from November up to and including last Friday.

Since the minister has admitted that his ministry and the Ministry of Government Services erred in not providing half the farmers of the province with their farm property tax rebate forms in October when other farmers received them, it is incumbent on both ministers to explain to the members of this Legislature why it took more than three months to discover that there was an error and why staff kept advising the members and township clerks that the forms had been mailed out when they had not.

I feel the Minister of Agriculture and Food should share in this comedy of errors. Surely he has the responsibility to see that the farmers of this province receive all the financial assistance that is available to them through programs such as this one.

In my riding of Wellington-Dufferin-Peel, the clerks of West Garafraxa and East Garafraxa each received 10 to 15 calls last week from farmers asking about the farm tax rebate program forms.

It is not acceptable that the ministry can allow this type of development to occur, take so long to resolve it and constantly tell the members, staff members and clerks of this province that the forms have been mailed out when they have not been. To take three months to discover the error is not acceptable. I hope the minister will clear this matter up now once and for all.

Since the minister admits his ministry was at fault in causing this undue delay, thereby penalizing thousands of farmers by delaying the property tax rebate forms up to four months, would the minister give consideration to paying interest to these farmers for that period of time? I hope next year's program will be administered more efficiently and with the same degree of excellence with which the previous government handled its program.

In conclusion, I request all members of this Legislature to support this excellent resolution brought forward by my colleague and good friend the member for Hastings-Peterborough.

Mr. Charlton: I too rise to support the resolution by the member for Hastings-Peterborough, although during the course of my comments, I am going to make a number of criticisms. This is the second time since September we have debated a resolution in this House to provide assistance for farmers; that is indicative of the criticisms I will make in terms of the lack of solutions in the approach we are taking.

I am supporting the resolution for the same basic reason as my colleague the member for Essex North (Mr. Hayes) did; it is an opportunity for us to say clearly in this House that there is a problem in the agricultural community in Ontario, that there are serious problems for the independent family farmers in Ontario and that solutions have to be found if we want agriculture to survive in this province.

When he was speaking, the member for Haldimand-Norfolk (Mr. G. I. Miller) pointed out some of the major flaws in the present farm tax rebate program. People in this province who in no way can be described as farmers are getting the rebate; that has to be ended. The member mentioned Stelco and Dofasco; we could also talk about Imperial Oil and Shell Oil, which rent out land on tank farms for farming and get the 60 per cent tax rebate on that land.

In his resolution, the member has not dealt with a number of other resolutions that have already been passed by this House. I believe it was in 1979 that this House overwhelmingly passed a resolution that dealt with paying for the costs of education out of the property tax base. This resolution again is indicative of the failures of this Legislature.

The previous Conservative government failed to provide property tax reform in Ontario; it failed because it tried to reform the assessment system in isolation from the question of municipal finance. If you are going to reform property taxes in the province, you have to reform the whole municipal finance structure, including the financial relationship between the province and the municipalities. You cannot do one without doing the whole package or it will not work, and it has not. We have failed.

The present government is unfortunately following down the same road. It is currently spending millions and millions of dollars shipping assessors into Toronto to do the study, which it is hoped will convince Toronto and Metro to do a

section 63 reassessment. We are spending millions and millions of dollars paying travel costs for assessors from Hamilton, St. Catharines, Kingston, Oshawa, Whitby, London, Cambridge, and God knows where else, to come to Toronto and stay in hotels and get paid for their meals while they are here, to provide a minuscule change in the property tax system in Metro Toronto that will not give fairness and equity in that system.

The assessors brought in for the study are only the tip of the iceberg. The Treasurer (Mr. Nixon) announced only last week that the ministry probably will not be able to have the reassessment in Metro, if Metro decides to go ahead, in place by 1988, as Metro was saying. It will probably take five years because, once the study is done and Metro decides it wants to proceed, the assessment division in the Ministry of Revenue is going to have to bring in hundreds of assessors from across the province for long periods of time while the total reassessment is done in Metro Toronto.

We will spend those millions upon millions of dollars for some small improvements to the fairness of people's property tax but still we will not, after all these expenditures, address the major problem. We have run away from the total question of municipal finance. I find the same problem with this resolution, although I am supporting it because it addresses the issue of the problem for farmers and because it will provide some additional assistance to farmers.

The member for Wellington-Dufferin-Peel (Mr. J. M. Johnson) mentioned in his comments that the former government had proposed at one point a property tax rebate system for farmers that would exempt all the farm land and all the farm buildings, so farmers would only pay property taxes on the house and a lot, roughly equivalent to a residential lot in their community of about an acre. In that case, and the member did not mention this, the government proceeded to spend tens of millions of dollars having assessors from across this province go out and make the calculations, the divisions and the measurements.

They did not do that to find out whether farmers were happy with the proposal. They did go out and consult farmers, but they spent all that money, those tens of millions of dollars, to find out how much it was going to cost the province for the transfer payments to the municipality. That is why they backed out, not because some farmers supported the proposal and some opposed it. Those of us who worked in the Ministry of Revenue got the memos, and we know what was said.

There are serious problems in the farm agricultural community in Ontario. The independent family farm is at risk. If we do not sit down and do what I have suggested we have to do with property tax reform, the family farm in Ontario will die and disappear, as is now being predicted in the act. Someone has to sit down and determine what the net bottom line is; someone has to determine what conditions have to exist for an independent family farm to be able to operate economically. I am not suggesting we have to set up a system that will protect the bad managers but we have to set the basic conditions under which a good farmer can operate economically and make a living.

In some areas, the problem for farmers is the cost of land and, therefore, the cost of their mortgage payments; in other areas, there are other problems. We have to sit down and devise a package of programs with criteria. The same programs will not necessarily apply to every farmer, but they will give us the bottom line and will be related one to the other, so we can see their collective impact. When those programs click in, because certain conditions exist in certain counties in this province, the net result of the package of programs will create the condition of economic stability for the family farm.

There is no question that this issue was here when the previous government was the government, and it is still here now. The new government has thrown some additional programs at farmers, but the Minister of Agriculture and Food cannot stand in his place in this House and tell us the collective net impact of the new programs he has put in place. He could not even begin to tell us, because that analysis has never been done.

Until that analysis is done and until we put together a package of programs that will create the economic condition in this province in which farmers can economically operate and make a decent living, then we will have failed to address the problems of agriculture and the independent family farm in Ontario.

Every month and every year, we will continue to debate the problems in agriculture in Ontario, the number of farms that are going out of business and the number of farmers whose loans are being called in because they cannot make payments and so on. It will not end until we are prepared to put together a comprehensive agricultural program in Ontario.

Mr. McGuigan: I want to address the reasons behind the rebate. If members will consider for a minute a house and lot on a country road, it may be a quarter-acre lot with a husband, wife and family living there who probably commute and work in town. What expenses, tax-wise, does that family generate? The biggest one is education because about 60 per cent of their taxes go to pay for their children going to school. The remainder is for roads to provide access to town. There may be fire and police protection, matters of health and so on that are part of the county expenses. That is a house and a lot.

Across the road are a house and farm buildings on a 300-acre farm, which is the average farm in Ontario. What expenses does that farm generate? It is just about the same because the owners send their kids to school and they need fire protection. It might be a little more for fire protection because they have a few more buildings. It might be a penny or two more for the roads because they have a transport truck to sell their milk, grain, livestock or whatever. There might be a little bit more, but it is a very small amount more that is required for that. They are very similar in generating the need for money.

Then we look at the taxes that are generated. They are both assessed at about the same rate, but the farmer has 300 acres of very valuable land in terms of real estate and he pays assessment on that land. At the bottom line, we end up with the farmer probably paying several multiples of the tax that the other chap and his family pay.

That is the basis for the previous government bringing back a tax rebate, but as the parliamentary assistant to the Minister of Agriculture and Food, the member for Haldimand-Norfolk, mentioned, I think farmers themselves want to be fair about it. They want a system whereby they pay their proper share. I am not prepared to argue whether that is 60, 70 or 72 per cent. I am quite willing to support the amendment of the member for Northumberland (Mr. Sheppard).

I remind him that the previous government did bring in a plan offering 90 per cent at one point. That was roundly rejected by farmers. Perhaps in today's climate they will not reject it, but the feeling at that time was, "If someone is paying 90 per cent of my taxes, they somehow own my land." There is a perception out there that if one pays one's taxes, one owns the land. That is based on the fact that if one does not pay one's taxes, in three years' time the township or the county can take over the land. The assumption is that as long as one pays one's taxes, one owns the land.

If one does not pay one's taxes, one does not own it. I point that out to members. The previous government really ran into a hotbed of opposition on that matter. I would like to leave that.

On the matter of helping farmers, I specifically mention the point that was brought up by the member for Essex North, which was to ask this government to bring in supply management systems for agricultural commodities. I am sure it is no news to most members that the government of Ontario and the Minister of Agriculture and Food are quite prepared to bring in supply management for any product the farmer wants brought into a supply management program. We now have five products that are under supply management.

The law is in place in the Farm Products Marketing Act of Ontario and the agricultural agencies act in the federal government. Those two acts combined provide the means for our farmers to carry petitions, to vote and to have a product brought into a supply management system. It is open and it is available, and everyone knows that. It has been tested with a number of other agricultural commodities, the most notable one being beef. The beef producers have argued this for many years. They are arguing it again now. There is a small group, the Beef Producers for Change. It has about 700 members.

It is very active and it wants to see a supply management system brought in, but it is faced with about 25,000 other beef producers who are not so convinced.

I know the member for Essex North means well when he suggests that we have supply management, but I do not think the member would want this government or any other government to force a supply management system on farmers and say to them: "You shall have a supply management system. We are going to bring in a czar of beef cattle, and you are going to be told how many beef cattle you can raise on your farm. If you raise any more than that, we are going to take severe, drastic action."

I do not know whether that action would be some sort of financial penalty that you charge the farmer for every extra animal the cows drop, or whether you charge the dairy people when they put their male animals into the beef stream or when they put their cows into the beef stream after they have lived out their milk-producing lives. I believe this was last voted on in 1983 and it failed to carry.

If beef producers among themselves go out and sign up 15 per cent of the producers in Ontario and present that petition to the government, the government has no course other than to hold a vote. Fifteen per cent triggers a vote. The vote would be held and it would be presented to the 25,000 beef producers. It would probably have to be presented to the dairy producers as well, because I do not see how you can be fair about it if you do not give them a vote. I am not sure how that works out in the industry, but you would probably be faced with presenting the vote to the dairy producers as well, and it would probably fail.

I have attended many meetings of beef producers, and they want the opportunity to sell those cattle across the US border at times when the US market is hot. Of course, everyone here knows that when you bring in a supply management system, you automatically cut off your opportunity to export beef cattle to the US. You can go to meeting after meeting and people will stand up and say: "I want to run my own business. I want to determine the number of cattle I am going to grow and I want the opportunity, when it comes along, to sell them to the US market."

You have to remember that you have to sell this to the western beef producer too. Where is his nearest market? Because of the geography of this country, his nearest market is the United States. You have to sell it to producers in the Maritimes as well. Where is their nearest offshore market outside the province? It is the United States because of the geography of this country.

That opportunity exists for any farmer in Ontario and, as a matter of fact, for any farmer in Canada where the province has a farm products marketing act. It exists for any farmer to go for supply management. I am sure the Minister of Agriculture and Food would welcome situations where producers can prove in theory and later on in fact that supply management systems would be to their advantage. As the member for Kent-Elgin and an agricultural producer myself -- I come from an agricultural county -- I certainly support the opportunity for any farmer to apply to be in a supply management system.

Mr. Pollock: To wrap up, I appreciate the comments from all members of this House saying they are basically going to support the resolution.

To cover some of their comments, the member for Essex North mentioned that farm communities should be moving to supply management. I point out that a former minister of agriculture, William Stewart, did bring in supply management for the milk producers of this province. They are one of the biggest and largest lobbying groups in Ontario. This was brought about, as the member for Kent-Elgin (Mr. McGuigan) mentioned, with a vote of a majority of the producers who wanted a supply management program. Former Progressive Conservative governments have worked to bring in supply management.

I understand and agree with my colleague the member for Kent-Elgin that the legislation to bring in supply management has been on the books in this province ever since 1937 with a majority vote of those producers.

Mr. McGuigan: Brought in by a Liberal government.

Mr. Pollock: That could be; I do not know. It was mentioned that Dofasco and Imperial Oil get this 60 per cent subsidy.

Mr. G. I. Miller: Stelco.

Mr. Pollock: Stelco and whatever. In one way, that may not be fair. On the other hand, they no doubt own land. That land is producing food, and all governments try to have a cheap food policy. That subsidy is helping to produce cheap food. It is not really helping the small family farm, but it is helping to supply food for a nation. However, is it any worse subsidising Imperial Oil and Dofasco than subsidizing somebody who is making $40,000, $50,000 or $60,000 a year and lives in subsidized housing? I just throw those comments out to him. We do not live in a perfect world.

Somebody who is making $40,000 or $50,000 a year and living in subsidized housing is no better than Dofasco or Imperial Oil.

The member for Haldimand-Norfolk mentioned horse farms. There might be some horse farms that make a profit, but I am sure that if one investigates that, one will find that a lot of those horse farms are hobby farms. They are basically employing a lot of people. They are write-offs -- no question about that -- but they are employing a lot of people. If they are not making a dollar themselves, then a subsidy for them is about as fair as in some other situations.

I think we have been around the horn quite a few times on the comments made about a farmer paying taxes on just a house and lot. In my first comments, I mentioned that if he pays taxes on just his house and lot, then if he lives in a predominantly rural community the mill rate on that house and lot will have to double to make up the taxes to run that municipality.

The Acting Speaker (Mr. Morin): The member's time has expired. This ends the debate on ballot item 37.

AGRICULTURAL PRODUCTION

Mr. Stevenson moved resolution 74:

That, in the opinion of this House, the Minister of Agriculture and Food should undertake a thorough study of the concept of flexible production targets or production goals established by government in conjunction with producer groups. The minister should pressure the federal government to extend this study to the rest of Canada and the study should include an investigation of economic incentives through the stabilization program or other government programs to guarantee a high percentage of producer involvement. The study would concentrate first on production goals for field crops.

The Acting-Speaker: The honourable member has up to 20 minutes for his presentation and may reserve any portion of that for the windup.

Mr. Stevenson: I appreciate the opportunity to bring this resolution to the House. This resolution is worded to pertain primarily to Ontario. Because this is the Ontario Legislature, it is our responsibility to deal with policies relating to Ontario. However, I want to make clear that the thrust of my presentation goes far beyond the boundaries of Ontario and, indeed, beyond the boundaries of Canada. My presentation as well will differ somewhat from the resolution because, as I develop my ideas, I take a slightly different thrust, although it is certainly right along with the wording of the resolution.

If we are to design new agricultural policies, we must look at where we are today, where we have come from and into the near and more distant future. Today, in the food-producing countries of the world, we have overproduction in almost all major food and feed commodities. Importing countries, which can afford to buy agricultural commodities, are finding a clear buyer's market. This substantial overproduction has gradually accumulated during the past 15 years and has resulted from many factors. Significant technology developments and progressive, efficient, well-trained farmers are two important reasons.

Also, government programs around the world have contributed extensively to overproduction.

Almost without exception, government programs in all major food-producing countries are production-linked or production-driven. The more a farmer produces, the more support he or she will get when government programs are triggered. The best example of how production-linked government programs lead to excessive production is the situation in the European Community. In the early post-war years, the countries of western Europe were net importers of most food and feed commodities. In the early 1960s, the EC decided it would become self-sufficient in all commodities that it could produce well.

We cannot argue with that sort of approach. It began subsidizing at very significant levels the production of these commodities.

Canada, the United States and many other countries have had to deal not only with lost markets in Europe but also, more important in recent years, with the doubly subsidized exports coming into the world market, primarily from the European Community. The US finally had enough and in December 1985 the US Congress passed the Food Security Act, commonly know as the US farm bill in its present form. The Food Security Act delineated a new philosophy for the US and made three major thrusts to counteract the EC program.

One move, lowering the loan rate, effectively reduced the floor price for all world grains; thus grain producers around the world, who are not isolated from the real market as they are in Europe, have been dealt a major financial blow. The second is that the US now supports its own producers at a very high level regardless of what the actual market price is. The third is the new BICEP program to subsidize its own exports into the world market to compete with the EC. In fairness, to sign up with this program, farmers in the US did have to cut back their acreage by 15 per cent and in the coming year it could be as high as 35 per cent. At least they are trying to minimize their production.

Canadian governments have had to respond with some significant agricultural policy changes as well. The main component of that here in Ontario has been the $1-billion special Canadian grains program that was announced recently for Canadian grain growers. Although we welcome that program, again the basic message behind it is to produce: the more you grow, the more help you get.

I believe it is now time that Ontario and Canada must start to look at our support programs and make them market-linked or market-based programs. Ontario and Canada must show the world that we are prepared to do our small share to bring world food and feed production into line with realistically available markets.

We must start taking a few pages from the book of the Organization of Petroleum Exporting Countries. It is generally agreed that excessively high or excessively low oil prices are not good for the economies of most countries. Clearly, the same must be true for agricultural commodities.

There is a price range where exporting areas and producers selling commodities can get a fair price, and there is a price range where importing areas and consumers can buy at a fair price. The only way to get agricultural prices into an acceptable range for producing nations and producers is for the producing nations and producers to start taking responsibility for their production.

Canada clearly must take leadership to end the economic lunacy in world agricultural production. It is a battle that we cannot win. In my proposal, governments in Canada and producer groups would sit down annually to estimate the realistic market or production target, both domestic and export, that Canadian producers should expect to supply.

Each producer would be given an allotment based on historical production levels, and any government support -- I am talking about support such as stabilization or the new Canadian special grains program -- would be based only on the individual's allotment. If producers decided to produce in excess of that allotment, they would do it totally at their own risk, and there would clearly be no support for any production above that allotment.

Producers would be allowed to alter the size of their operations. They would be allowed to get in and out of production. There would be no quotas as such and no quota values. This would be a very flexible system that would address both the immediate and long-term needs of our producers.

This concept is not totally new in Canada. To a significant extent, this production target and individual allotment system is currently in effect in the annual allotment of market share in industrial milk. In grains, which my resolution specifically mentions, much of the necessary structure is already in place. The western grain stabilization program and its delivery quota system, which is currently based on seeded acreage, could be easily altered to fit the proposed market-based production system.

In Ontario and eastern Canada, the grain production histories on individual farms are not as readily known or as sophisticatedly followed, but it does not seem to be a major challenge to put that kind of information in place. A few years ago, a study group working within the Ontario Pork Producers' Marketing Board and looking at policy and marketing options suggested that a system similar to the one I am proposing this morning would be one of the best alternatives for that industry to investigate seriously.

The market-based production system might require some land to be set aside. However, I believe that this requirement could be met with marginal agricultural lands. Property owners would be given incentives to plant hybrid poplar, pine or any other satisfactory species on such land. This would have obvious environmental and natural resource benefits.

This program would be funded with money already in stabilization programs as well as other ad hoc support programs, such as the recent $1-billion special Canadian grains program. Additional funding would be required from provincial governments. The total amount of money would have to be sufficient to keep our support at least in the shadow of that of the European Community and the United States or our farmers will be annihilated under the current world situation.

It is not a question of whether we can afford it. We must keep our agricultural industry viable. The key difference here, though, would be that our producers would be producing to meet the actual markets and not producing to fill every storage in sight.

Economically, my proposal is an idea whose time has come. Politically, its time is coming. The idea will be particularly difficult to sell in western Canada today. Western Canadian producers clearly remember the unsuccessful Lower Inventories For Tomorrow program in the early 1970s. More important, there is no accumulation of grains in storage in the west. The 1985 crop was largely sold out. It is unlikely that producers will be so successful in selling the current crop. Barring major droughts, grain accumulation should be substantial in the west by 1987 or 1988. If the expected occurs, western grain producers will be much more receptive to market-based production programs at that time.

Currently in Ontario, several individuals and groups have expressed interest in this general type of program. I strongly suggest that the governments of Ontario and Canada immediately start investigating market-based production programs. This concept of production, if properly developed, could be put into place quickly. This system might prevent producers from drastic reaction to a difficult economic period or situation.

To summarize, the obvious advantages of the system I have proposed today are as follows: the system is very flexible to annual changes and market size, both domestically and internationally, the system is market-driven and the marketplace still has the controlling force.

The flexible structure would address both immediate and long-term needs of farmers. Support programs of a stabilization type would immediately respond to moderate and disastrous price downswings. We would not have the whole litany of support and ad hoc programs we have today, so many programs that most of our agricultural people in our ag offices can hardly keep them straight and farmers are totally confused. Producers would still be allowed to make individual decisions outside the allotment but would do so totally at their own risk. There would be no long-term quotas or quota values. Each producer group would decide independently whether it wished to develop such a program.

Canadian producers cannot win in the current agricultural trade war between the European Community and the US. Any leadership shown by Canada will increase our chances of success in ending the trade wars in the upcoming talks on the General Agreement on Tariffs and Trade.

Programs such as the property tax rebate and the Ontario family farm interest rate reduction programs would continue to function as they do today; only the delivery, and probably the nature, of the stabilization programs and current special programs would change under this structure. The benefit would probably reduce the likelihood of countervail actions on our commodities being taken by the US.

I urge the members of this Legislature to join with me today to urge the Ontario and Canadian governments immediately to begin studies on the development and operation of market-based or market-driven production systems for Ontario and Canada.

I will reserve the rest of my time for

summary at the end.

The Deputy Speaker: That will be three minutes and 50 seconds.

Mr. Swart: I am pleased to rise to speak on this resolution, generally in support of it, because it deals with not only an area of our economy but also an area of our way of life that is in extremely serious trouble, an area that has not recovered at all yet and in fact is probably in a worse economic condition today than it has been at any time since the Depression, while other areas are improving somewhat.

I must immediately draw the attention of this House to the fact that the Minister of Agriculture and Food (Mr. Riddell) is again not in his seat. It is inexcusable when we are dealing with a topic that is so important to an area of the economy, the agricultural community, which is so depressed, that the Minister of Agriculture and Food does not see fit to be in this Legislature.

Unlike other matters debated in this House, these debates are never surprises; we know a week or two weeks ahead that they are going to take place. It seems to me that for the Minister of Agriculture and Food not to be in this House on a day when agriculture is the subject of two resolutions is disgraceful, and I hope somebody will convey that to him.

The farmers in this province are suffering. They deserve the right to have the attention of the Minister of Agriculture and Food. When these issues are being debated in this House they deserve the right that he be here to take part, or if not only to listen.

Mr. McGuigan: What did the member call farmers a few years ago?

Mr. Swart: I am not sure what the member is referring to, but I want to say that during my life I have never made any derogatory comments about the farmers in this province or any place else. I have no idea what the member is referring to.

I said I will support this resolution. I suspect it will get the general support of the House. It is a vague resolution. It comes to this House from a source which gives me some surprise for two reasons. First, the previous government was in power for 42 years and could have implemented those studies in this province and urged the federal government at that time to do the same thing, and it never did.

Second, it comes as a surprise because of the philosophy that party has always demonstrated. It wants to stay away from economic planning. Those are dirty words to the Conservatives. They want to stay away from matters of supply management unless it is almost forced on them. It is with some surprise that it comes from the previous Minister of Agriculture and Food.

I am also a bit surprised that, unless I missed something, the member did not give credit where credit was due about where this proposal originated. I have in front of me the October 1986 task force report commissioned by the Ontario Institute of Agrologists. Let me read the recommendations from that group under the

section on meeting the objectives and production:

"1(

a) The federal government define and publish a policy for the Canadian agricultural industry that sets targets for domestic requirements as well as export and import levels on a commodity basis at both the production and processing levels.

"1(

c) Commodity groups and farm organizations give leadership in adopting production targets."

That is very similar to the resolution we have before us today. It is almost the same thing, and yet the member who introduced this resolution did not even bother giving credit to the Ontario Institute of Agrologists, which does a great deal of fine work in this province and which has made recommendations over the years.

Mr. McGuigan: It goes back further than that. It goes back to the NDP in BC. That is where the idea really came from.

Mr. Swart: It probably originated from the New Democratic Party. I would not take any objection to that.

As I say, OIA has made good recommendations with regard to agriculture over the years, perhaps almost more than any other group of that nature. It seems to me that credit should have been given to it when this resolution was introduced here in this House.

I want to point out, however, that it recognizes in this document that this is only a small part of the steps that need to be taken to correct the major problems that exist in agriculture in this province and in this nation. It also recommends and deals at length with such things as "methods to preserve the resource base, to attain self-sufficiency for Canada in products we produce efficiently, to improve Canada's balance of payments through exports and to enable capable farmers to continue in production through sufficient returns to labour, risk capital and management." These are alternatives that we also have to deal with in this province.

I am really concerned that there is little or no mention made of the lack of self-sufficiency that still exists in this province with regard to imports and exports of agricultural products. I quote from the 1985 Agricultural Statistics for Ontario, which indicate that we import into this province some $2,974,000,000 worth of agricultural products and export only $1.84 billion, a difference of $1.1 billion between the agricultural products we import and the products we export.

All of us who know anything about agriculture know there are some products grown in warm climes which we cannot produce here. However, what bothers me is such things as oilseeds, for instance. We imported something like $181 million worth of oilseeds and oilseed products into this province and we exported only $47 million worth of oilseeds.

Surely that is an area in which a caring government and a government that is prepared to intervene to help the farmers would move, so that we would have greater self-sufficiency and greater sales of oilseeds in this province. I concede that there has been a move in recent times to greater self-sufficiency in this field, but there is a long way to go yet and the government should be involving itself in that area.

There are also such things as nursery stock, poultry and eggs, where there is a tremendous deficiency between our exports and our imports, and this has not got any better in total over the past 10 years. It is a lot worse dollar-wise, but even percentage-wise there has been no improvement. A caring government would move to ensure that we have greater exports.

I know the battle that takes place in the international field in the matter of agricultural exports, but I suggest that with 500 million people in this world still hungry, if the Ontario government were really concerned about the exports of our farmers, it would be finding a way of getting those agricultural products to the needy nations of this world. I know it is difficult, but it can be done if we care enough not only for the farmers of this province but also for the hungry people throughout the world. There are ways of accomplishing it, and this government should take the leadership on that.

My colleague for Essex North (Mr. Hayes) dealt with the issue of greater financial assistance to farmers, as have the agrologists, in a resolution about a month ago showing that Ontario is doing much less. That is another area in which this government can improve its operations. It can at least get up to the level of the rest of the provinces in its level of financial assistance to farmers of this province.

This proposal goes part-way on the right route, and I will support it.

Mr. McGuigan: As I mentioned in one of my interjections, this program is not new. It is simply a re-jigging of the many programs that thinkers all over the world have tried to bring in to solve the problem. I first heard it advocated in a program in British Columbia a number of years ago.

This government and this member do not support the resolution. Here we are on the battlefield of free trade, already joined by the federal government, in answer to the entreaties of the President of the United States. We have danced the jig in Ottawa with them and now we are dancing at the end of the string because of those entreaties. Before the battle was joined, we gave up on drug prices, and we gave up voluntarily the battle on softwood lumber. We did not have the guts to stick with it and fight it through to the International Trade Court in Washington.

We find ourselves being drawn in on the auto pact, the jewel of Ontario's and Canada's manufacturing industry. It was passed in 1965 by a Liberal government. It has brought unprecedented advantages in employment in this country. Now we find it is on the table. These are things we were assured in the beginning were not on the table.

If we adopt this resolution, we will be laying on the table the agricultural system of Canada. We will be voluntarily pulling out of this race before the battle is even joined. It is wrong to give up voluntarily. I know the member's motives are fine. He is trying to find a way out of the dilemma in which the world finds itself, brought about, as he says, by good motives that followed the Second World War when Europe decided it was going to feed itself, followed by not so good motives in the United States.

They brought in a system that is not market-driven, as the member has talked about; it is driven by the greed of legislators in the United States, many of whom are big farmers themselves. They set up a system whereby the US government was used to boost all kinds of money into the agricultural industry and into the pockets of only 18 per cent of US farmers.

Studies have been done in the US showing that of those people who require money to maintain their family farms, only 18 per cent get any money. The thing is tied to big acreages and big operations. In 1981, the amount of money the US government put into that program was only $4 billion. In 1986, the figure is estimated to be anywhere between $25 billion and $30 billion. No one really knows.

How did that system work? It said to the farmer, "If you reduce your acreage, we will give you certain incentive payments towards your crops." Last year it was 20 per cent on corn, as the member mentioned. What does the farmer do in that situation? He puts more energy and input into the remaining 80 per cent and comes up with even larger crops. There is enough corn and grain in storage right now in the US for 90 per cent of next year's requirements. They only need to grow 10 per cent of their last year's crop to fill not only their own demand but also export demand.

That system has not worked. It is not market-driven; it is driven by greed and ignorance. They think the farmer is some stupid lout. However, the farmers in the US, as everywhere, are smart. They have had a recent program to pay them to take a million dairy cows out of production because there are such mountains of dairy products in storage. What did the farmer do with the money? He shipped his old cows to market, pocketed the extra money that was given by the government and put that money into new, younger animals and new facilities. It did not make a dent in the oversupply of dairy products.

Mr. Stevenson: Those programs have absolutely nothing to do with what I have said here.

Mr. McGuigan: They have everything to do with the system of going in and bargaining about our situation in free trade. If we, as the smaller producer in this battle, voluntarily say to the United States that we are going to opt out of it, then we are going to drop our farm production by 50 per cent.

Mr. Stevenson: We are producing for every market we can realistically attain. We are not pulling out of any race. What you are saying is absolute nonsense.

The Deputy Speaker: Order. The member will have time to reply.

Mr. McGuigan: It is absolute truth, what I am saying, because if the member opposite is talking about raising prices, is that not what this is all about -- getting more money to the farmer through a market system? Therefore, you have to raise the prices. When you raise those prices, you take us out of the world market, because the world market is at a depressed price.

I have spent all my life in farm marketing; I know something about it. The fuzzy-headed thinking this resolution presents and the fuzzyheaded thinking behind it are not part of the real world. If you are going to raise prices in Canada, you have to cut off a full 50 per cent of our agricultural production, because that is the amount of our production that goes into the world market.

Mr. Stevenson: You have missed the whole concept of my presentation.

The Deputy Speaker: Order.

Mr. McGuigan: The whole concept of the member's presentation will take us into very serious situations in this world battle. This government on this side of the House and this Premier (Mr. Peterson) are standing up for the people of Ontario, the farmers of Ontario and the workers of Ontario as best we can against the fuzzy-headed thinking that exists in Ottawa. The member's program fits right in with it. We have to look at the realities of that marketplace.

The Ontario government has entered with the federal government into a program to devise a market strategy to try to work out some of these problems. We have those same problems within Canada, because if you curtail grain production in Ontario and if the main grain you have to curtail to get that price up is corn, immediately you are flooded with western barley. You are flooded with it in a system where the government actually pays the railroads to bring it down here almost free. You are then immediately up against the task of trying to resolve the differences with those western people, as the member for Durham-York (Mr. Stevenson) said himself.

We have entered a program with the federal government to try to work out a strategy. Again, to focus on corn, if you are going to allot some sort of acreage that is going to be the better-priced acreage for the Ontario farmer, a certain percentage of his present growth of corn, you have to put that at a price way above $3 a bushel. You have to look at $4 a bushel, even $4.50 to $5 a bushel on the part that is market-oriented. Then the member says he is going to let the farmer grow the balance of his crop on the free market.

The minute you step in and put a high price on part of the allotment that the member speaks of, you immediately raise all sorts of problems with the United States. Just think what they would do to our hogs when they factored that in through the countervail process, because corn goes into hogs and hogs go to the US. Thirty per cent of our hog production goes to the US.

Mr. Sheppard: It is with pleasure that I rise today to say a few words on the resolution brought forth by the member for Durham-York.

The resolution proposes that the Minister of Agriculture and Food should undertake a complete study of the concept of flexible production goals established by government in conjunction with producer groups.

I want to take a moment to congratulate the member for Durham-York for proposing this resolution. I believe it is a good resolution. It makes common sense and it could prove to be the long-term solution to our agricultural problems.

Agriculture is one of the most highly subsidized industries in the country and perhaps in the world, yet the industry is facing a financial crisis that has caused more changes in the past three years than we have seen in a long while.

Federal government subsidies are already very large. They totalled nearly $6 billion in 1986, approximately one third of the total farm revenues. Even this substantial aid, however, is only a temporary solution to a problem that will not resolve itself in time.

Today we are faced with an incredible amount of surplus food. There is a glut of grain on world markets, cheese and beef in storage around the world and enough surplus butter in Europe to supply Ontario for 15 years.

We can attribute these problems to several, factors: (1) technology; farmers are able to grow more with less manual effort thanks to machinery available today; (2) aggressive farmers; and (3) government policy. In the 1970s, when many countries such as the US and Europe decided to become self-sufficient, farmers were encouraged to grow as much as possible. Furthermore, farmers were paid extremely inflated prices for their production through subsidized programs at the taxpayers' expense.

Although the European Community and the US were the prime offenders, Canada now produces twice as much food as it can possibly use domestically. Also, countries such as China, India and Pakistan are now exporting food.

The public spending is so large -- about $25 billion in the US and about $45 billion in the European Community -- that it has knocked the bottom out of the world food market. As a result, we are faced with the inevitable. World markets have collapsed and we in Canada are facing a financial crisis because our farmers depend on market prices.

Yet, knowing these facts, farmers in the US, the European Community and even Canada to a lesser extent continue to produce far more food than the world can eat. This overproduction has distorted world markets. Basically, what it boils down to is that the country willing to subsidize prices to the lowest level becomes the winner, and the loser becomes the taxpayer, because in the European Community and the US the cost of the trade war has been shouldered by the general taxpayer. In Canada, however, the burden has been absorbed by the farmers. This has been reflected in bankruptcies, foreclosures and a steady decline in the price of farm land.

The federal government has tried to insulate Canadian farmers by paying them higher subsidies, such as the recent $1-billion, no-strings-attached cash payout, but there is no way for us to compete with $25-billion and $45-billion figures.

One of the obvious misfortunes of the agricultural policies in Europe and the US is that they do very little for future generations of farmers. We in Canada must guard against that.

One of the long-term solutions is for countries to stop their massive subsidization of the agricultural industry. In other words, let the marketplace settle itself. Canadian farmers could likely compete on the export market if all subsidies were discontinued, but they would be limited to certain crops under certain conditions. For example, the Canadian farm industry could probably compete in wheat, feed grains, pork, some beef and vegetables. On the other hand, we could not expect to sell milk, chickens and eggs on the export market.

This so-called solution, however, would cause much suffering to Canadian farmers. There would certainly be a readjustment in the farming sector; land prices would go down and some farmers would disappear, as we are already beginning to see.

We in Ontario and in Canada must provide leadership, domestically and worldwide, in order to regulate supply and demand for the benefit of all.

We must devise some sort of flexible supply management system, preferably without the severe controls of management boards, as this resolution proposes. Supply management could replace traditional market forces with controlled production in order to match supply with demand. A formula that would allow efficient farmers a reasonable return could be used to guide pricing at the production level. Retail prices could be based on the demand in the marketplace.

Consumers would gain from supply management because they would always be assured of a ready supply of fresh products. Producers would also benefit from a guaranteed market for their crops. This would allow farmers to better plan their cash flow and expenditures, which is a very important factor in the farming industry.

It is one thing to have supply management; the difficult

part is making it work. Pricing decisions would be based on the cost of the most efficient producers, so farmers would constantly have to improve their operations to remain profitable. Supply management would require having the discipline to match supply with demand and to make it stick without exceptions.

In 1975, for example, Canadian industrial milk production was much greater than demand. Milk production had to be cut to avoid a costly surplus. It was a hard pill to swallow, but Canadian farmers reduced their milk quota by 18 per cent. As a result, we have a healthy dairy sector that balances production and domestic requirements.

Supply management is not an easy marketing system by any means. In Ontario, however, the system has worked for the milk industry despite the seasonal changes in consumption. Since 1965, dairy farmers have been able to invest and improve their efficiency, knowing they could rely on a stable market for their products.

I see this resolution as a viable, long-term solution to the crisis our agricultural sector is faced with at present. I urge every member to vote in favour of this resolution if he is genuinely concerned about our farmers.

Mr. Hayes: Unlike the member for Kent-Elgin (Mr. McGuigan), who appears to be afraid of change, of taking chances and of taking the initiative to improve the agricultural industry, even if it is tough I have to support it and support this resolution. It is a step in the right direction in meeting the needs of farmers in Ontario and Canada.

This is a resolution that affects not only Ontario farmers but also Canadian farmers. We have to work and co-operate with the other provinces towards a goal of a national agricultural strategy for Canada. The current food policy practised by the policymakers of this country and this province, which results in cheap food at the farm gate, has generated the present instability in farm production and uncertainty among farmers as to their future.

Over the years, Canadian consumers have been provided with cheap food at the expense of the bankruptcy and disillusionment of thousands of farmers each year. Another reason for the low prices farmers are getting is oversupply. Part of our oversupply is caused by farmers producing more in response to lower prices. While this would seem to be the wrong response according to supply-demand economics, it is a natural response of a farmer whose total assets are in land and equipment that can be used only to produce food. The farmer has thought, "I can double my income by producing twice as much." Everybody thinks like this and prices are further depressed.

We must stress to the federal government that projected food production targets will only be attained if farmers are rewarded by farm prices through marketing mechanisms that will return full farm costs of production, including adequate returns on investment, management and labour. Failure to reach this objective has resulted in many family farm units being forced to supplement farm income with off-farm employment, or alternatively, getting out of farming by selling or going through bankruptcy.

This resolution states, "That, in the opinion of the House, the Minister of Agriculture and Food should undertake a thorough study of the concept of flexible production targets or production goals established by government in conjunction with producer groups." It is a resolution that suggests a form of orderly marketing, supply management or whatever title one wants to put on it. For this resolution to be effective, the marketing system must include supply management to prevent excessive inventory buildup while ensuring adequate supply to meet domestic needs as well as export opportunities.

Much of the present confusion on the subject of farm production and marketing in this country stems from the contradictions between federal policies and programs and those of the various provincial governments. That is why Ontario should take the initiative in working towards a national agricultural strategy for Canada by pressuring the federal government to work with Ontario and the other provinces to reach this goal.

I stand in favour of this resolution, and I hope it gets unanimous support.

Mr. G. I. Miller: It is a pleasure for me to rise and to speak on the resolution. My colleague the member for Kent-Elgin has indicated we will not support the resolution.

It is not that this government is not progressive in its thinking. The member for Welland-Thorold (Mr. Swart) took some unfair shots at the Minister of Agriculture and Food this morning when he asked why he is not in the House. As the parliamentary assistant to the minister, I am here and listening closely to any new ideas and suggestions that will assist the agricultural industry. We feel strongly that we can and should improve the farmer's lot in the Ontario and in the Canadian economy.

The resolution is predominantly a federal responsibility. We are playing a role in assisting in the marketing of some of our products. We have taken that step in the past few months by setting up a committee to look into marketing, under the leadership of Art Loughton, a former director of the horticulture experiment station at Simcoe. The committee is working with industry and trying to find new markets and new products we can grow in Ontario.

On December 11, 1986, I brought in a resolution that "in the opinion of this House, the Ontario government should further encourage the use of Canadian-grown and Canadian-processed food products by all ministries, government agencies and provincially funded institutions."

We have a deficit of $2 billion in our agricultural industry in Ontario. As the member for Welland-Thorold pointed out this morning, there are a lot of fresh fruits we cannot grow here. We are not trying to get at that issue. We are trying to make sure that we produce the food we are producing and have some exports. Our corn production is only a fraction more than our needs. Our production of soybeans and oil-producing products is too small to meet our needs. I believe Ontario is served well by our marketing agencies such as our milk boards and our chicken boards, where there is controlled production.

When we look at the overall statistics, while we are having a lot of farm bankruptcies, we have fewer than in other provinces of Canada where the regulations are not as well organized. I agree we have to get the cost of production for the products we grow. There is no doubt about that. Particularly in the grain industry, the price received is below the cost of production. Corn that is selling for $80 a tonne is selling at Depression prices. Some areas of our agriculture are in a better and stronger position.

We will be listening. The group of farmers or agrologists who made the recommendations on which this resolution was based are certainly working in the best interests of agriculture in Canada. We will be researching and working along with that group and with all groups who represent the agricultural industry in Canada to strengthen the industry in Ontario. I am sure the ministry and the minister are listening and will be trying to improve the lot of farmers as we go down the road, so that agriculture can be strong.

Mr. Speaker: The member for Durham-York has reserved three and a half minutes.

Mr. Stevenson: I appreciate the support of those members next door here and I appreciate the comments they have made.

I specifically draw attention to the comments of the member for Welland-Thorold. It is true that I did not mention the Ontario Institute of Agrologists in my comments. Some of the ideas in here were contained in its report, but certainly people such as George McLaughlin, Gordon Bowman, Richard Pike, the Ontario Corn Producers' Association, many different individuals and groups over the past few years have suggested systems generally of the type suggested here this morning in this motion.

Since the concept has been talked about for some time -- and as I said earlier, it is not totally new; in fact, there are precedents already in Canada where this system is working -- I did not attempt to go through the whole list of people and organizations that have had input into this general line of thought and this type of system.

The member for Kent-Elgin stated that we were pulling out of the race and voluntarily giving up. I am not sure how he got that idea from my presentation. It certainly is not at all in my thoughts, and I am sorry he got that idea from the wording of my presentation. I must go back and carefully reread it and see whether there are areas where it implies that. Certainly that was not my intent.

The prices of food and feed commodities will not increase until all producing nations agree, as the oil producers have at least temporarily agreed, to see the price of their commodity go up somewhat. Until that happens among all producing nations, Canada can basically do nothing.

FARM TAX REDUCTION PROGRAM

Mr. Speaker: Mr. Pollock has moved resolution 73.

Motion agreed to.

AGRICULTURAL PRODUCTION

Mr. Speaker: Mr. Stevenson has moved resolution 74.

Motion agreed to.

The House recessed at 11:59 a. m.

AFTERNOON SITTING

The House resumed at 1:30 p.m.

MEMBERS' STATEMENTS

DAY CARE

Mr. Eves: For some time now, there has been a demand for improved child care services in my riding. During my time as MPP for Parry Sound, progress has been made. We now have excellent day care facilities in west Parry Sound and Mattawa as a result of the co-operative and dedicated efforts of local officials, individuals and community groups.

We have been working towards the same goal in east Parry Sound. I am pleased to report our efforts are ready to bear fruit. A needs study has been completed, the district social services board has conducted a property acquisition review and we have demonstrated a clear and immediate need for action.

In the light of these facts, I urge the Minister of Community and Social Services (Mr. Sweeney) to act now to establish a child care centre in east Parry Sound. I further ask that the minister ensure this centre meets the needs of area residents by providing the flexibility to serve those on shift work as well as those with nine-to-five jobs. That kind of flexibility in day care arrangements is vital to many Ontario communities, and nowhere is it more in demand than in our riding.

I look forward to the minister taking immediate action to address the clear child care needs in Parry Sound riding.

SOLICITOR GENERAL'S REMARK

Mr. McClellan: I wish to read excerpts from a letter sent today from the member for York South (Mr. Rae) to the Premier (Mr. Peterson) about the Solicitor General (Mr. Keyes). The letter reads:

"Ken Keyes' responsibilities include management of the police and Ontario's correctional institutions. As such, he sets the standard for the conduct of thousands of officials who must be especially sensitive to a multiracial Ontario. What happened yesterday -- the slur as well as the difficulty in getting Mr. Keyes to realize the offensiveness of his unthinkable remark -- reveal judgement so questionable that his position in cabinet is no longer tenable, coming as this does only shortly after Mr. Keyes' previous failure in judgment ... .

"The hard reality is that the standard of conduct for ministers is different. They are representing government and the people of Ontario. He represents especially sensitive portfolios.

"The question for all of us is not whether or not we make mistakes -- we all do. The question is how we respond to them and whether we learn from them. No one has tenure in the cabinet and none of us has a monopoly on virtue. Surely it's fair to say that membership in a cabinet is something that is earned every day. Trust must be continually renewed.

"I know how difficult and unpleasant these choices are. I hope you will understand the spirit in which this is written, and that I take no partisan joy in any of this.

"Yours sincerely, Bob Rae, Leader, Ontario New Democrats."

RECOGNITION OF SENIOR CITIZEN

Mr. Offer: I am pleased to rise to inform the Legislature of the recipient of the city of Mississauga Senior Citizen of the Year Award. This award is jointly sponsored by the Mississauga parks and recreation department and the Port Credit Rotary Club. The recipient of this year's award is Elsie Edwards, who has been characterized by many as utterly reliable and always having the seniors' welfare at heart.

For more than a decade, Elsie Edwards has been, among other things, a key member of the Park Royal Seniors' Advisory Council, an active participant in the Lorne Park Seniors Club, a member of the Clarkson Friendship Centre and a regular patron of St. Bride's Church.

The seniors of this province are a vibrant, enthusiastic and energetic group of individuals, people who have, in no small part, shaped the communities in which we live today. They are responsible for having contributed so much to this province. The activities of someone such as Elsie Edwards, 75 years of age, are characteristic of so many seniors across this province.

I would like formally to acknowledge and congratulate Elsie Edwards on her award and for her contribution, not only to the city of Mississauga but also to Ontario.

SOLICITOR GENERAL'S REMARK

Ms. Fish: I rise today to associate myself and my colleagues with the remarks contained in the letter that was recently read to this chamber by the member for Bellwoods (Mr. McClellan).

Questions of racial intolerance, racial slurs and the basic and fundamental issue of an absolute conviction to a multiracial society in Ontario and Canada are not questions of partisan politics; they are questions of the clear leadership and fundamental base upon which society is built. I am therefore pleased to indicate our support for the position taken by the leader of the third party.

SCHOOL BOARDS

Mr. Allen: I am delighted the Minister of Education (Mr. Conway) is in the chamber with us today. I want to refer to some problems in native representation on school boards. He will be quite aware that we have in recent months passed legislation that bears on the representation of other groups, namely, the francophone community, with respect to the governance of French schools.

He will also be more aware than I am that there is a study process under way at present which is re-examining the whole question of school board representation, its basis and equity across the province.

While the regulations at this time allow native representation on school boards, and while those regulations are in force and the representations are properly in place across the province for the most part, there are one or two places where there is a question of whether the proportion of students and the proportion in the local population do not warrant substantially more presence for native people on the boards which exercise control over the education of their children.

I think, for example, of the Manitoulin Board of Education where there are 328 of 1,014 students who are native Indian and 260 out of some 725 in the secondary school alone.

The population in the area is one-third native Indian, and the minister might want to consider, in the course of re-examining this whole question, the appropriateness of special consideration for the Manitoulin board.

DRIVER EXAMINATIONS

Mr. Sheppard: I was recently informed that, effective April 1, 1987, driver examination service to the village of Brighton and area will be discontinued. In turn, anyone wishing to be tested will have to travel to either Trenton in the Kingston district or to Cobourg, Port Hope and Campbellford in the Port Hope district.

Since this announcement was made, I have also learned from the driver examination office in Campbellford that at the end of March services to that town will be cut from one day per week to one day every two weeks. Complaints have already started to pour into my office and to the examination offices. This reduction in services from Campbellford and the elimination of services in Brighton will prove highly inconvenient to everyone, especially seniors, students, firemen, and school bus and truck drivers who have had to wait up to six weeks for an appointment to be tested.

I strongly urge the Minister of Transportation and Communications (Mr. Fulton) to reconsider the reduction of services to the Campbellford travel point office as well as the closure of the Brighton travel point office.

YOUTH UNEMPLOYMENT

Mr. Warner: The Minister of Skills Development (Mr. Sorbara) yesterday had a very complacent response to the Dryden report. Quite astonishingly, he suggested that if I took a look at the Futures program, I would be impressed by the statistics.

He should recall instead that Mr. Dryden said "only a small percentage of unemployed youth can be accommodated in youth programs." And that in the Futures program, on average, the number of young people in the program at any one time is approximately 12,500. He ventures a personal speculation that, "many, probably most, jobs filled as a result of job creation programs would have been filled had the programs not existed."

Further, "When youth unemployment rates go down, but slowly, these programs get judged not for what they are, but what they are understood to be. And they fail, because they must. They do not and cannot deliver what is expected of them. And when they do fail, concrete and visible, they come to stand also for all that a government is not doing about youth unemployment."

Again, "...this means the current job creation programs directed to the private sector will have little impact on the current youth unemployment rate."

In other words, Mr. Dryden has clearly identified the problem and this minister remains complacent as he does little or nothing.

STATEMENT BY THE MINISTRY

CREDIT CARD

Hon. Mr. Nixon: I have a statement in response to the question from the member for Nipissing (Mr. Harris) yesterday concerning the selection of the American Express credit card. The member does not have a copy? It is coming right now.

Selecting a corporate card to pay for government employee travel expenses is being introduced to save an estimated $3 million a year; so the concept of using a credit card is extremely useful.

Before requesting proposals, a range of evaluation criteria was established, against which the submissions were measured. I am tabling these criteria today, together with the request for proposals.

The technical bids were submitted with the request by bidders that we observe confidentiality. This has been further reinforced this morning by a request from one of the losing bidders. Therefore, the information tabled listing the bids identifies only the winner specifically. The numbers are all there.

Of the bids submitted by the six Canadian companies, the proposal developed by American Express Canada Inc. was the low bid, tied by one other competitor. American Express was selected on the basis of better meeting the universality and other criteria. The other competitors ranged upwards to as much as $240,000 more per year.

American Express Canada Inc. is an Ontario corporation and the company has operated in Ontario since 1853. With 1,900 employees, virtually all Canadian, mostly resident in Markham in the constituency of York Centre, American Express has an enviable record of good corporate citizenship in Canada. The card does not indicate it is an American company; rather, it prefers to view itself as international with operations in more than 100 countries based on the same local organization as we enjoy here in Ontario.

RESPONSE

CREDIT CARD

Mr. Harris: Are there no more statements, to give me time to read this?

Hon. Mr. Nixon: I am sorry it was not in the member's hands earlier.

Mr. Harris: So am I, because obviously it has been available although, contrary to when I first raised it, the Treasurer (Mr. Nixon) did not comment on his answer to the first question, which indicated these were internal documents. However, between the first and the second, somebody must have nudged him and realized this is public information and should be readily available.

I have not had time to analyse all of the data the Treasurer has tabled here today, although I find it passing strange on a number of things. There is no mention in this statement today that this was tendered. When the Ministry of Government Services was talking about centralizing its travel arrangements, as we have read and heard about today, there seemed to be some great secrecy surrounding what went on when the bids actually came in and what happened after that, but at least the acting Minister of Government Services (Mr. Conway) put out a tender call, advertised and invited everybody who might be able to provide travel services to tender.

I find it passing strange that the Treasurer, when he was looking at credit card services, did not tender. There was a very selective proposal call. In other words, some were invited to submit proposals. Many Canadian trust companies were not invited to submit proposals. Many other credit card companies were not invited to submit proposals and had absolutely no opportunity to enter into this contest with the very select ones that were invited to submit proposals. Some might say it was almost a very secretive way of inviting people to make money off the Ontario government.

I add that I have not had a lot of time to look through the request-for-proposal questionnaire that was given relatively secretly to selective card companies in Ontario. However, I can tell the Treasurer that in the past 24 hours I have had some comments from others involved in this industry throughout Ontario that indicate that, in their opinion, this corporate credit card request-for-proposal questionnaire was very slanted and biased in favour of American Express before the process even started. It is not my accusation; it is an accusation made by others in the credit card business, whose names I will be glad to furnish when the appropriate time comes

There is something rotten in the way this was done. The Treasurer talks about saving $3 million as a justification. There would be the $3-million justification no matter what credit card company was selected. I do not have a breakdown; I asked for that and I have not seen it submitted. However, I assume the $3-million saving is on the basis of the amount of interest that does not have to be given in cash advances to employees, the other method that was being used by the Ontario government.

It all sounds grandiose. I look forward to examining the information on the bids that was supplied to me. I would appreciate receiving from the Treasurer information on this $3-million saving and finding out whether all the alternatives were supplied or whether somebody intentionally went out and said, "We should give all this business to American Express," drafted a proposal that made it very attractive that this be the company and did not look at the other alternatives for saving money and not look closely at many Canadian credit card companies that were excluded from this process.

VISITOR

Mr. Hennessy: Point of privilege.

Mr. Speaker: Point of privilege?

Mr. Hennessy: Yes, Mr. Speaker. I take this opportunity of recognizing the presence of the mayor of the city of Thunder Bay, Jack Masters, in the gallery.

Mr. Speaker: That is not a point of privilege.

The Minister of Education on a point of --

Hon. Mr. Conway: May I say parenthetically, but it is a point of view that members on this side share with the member for Fort William (Mr. Hennessy).

MEMBER'S ANNIVERSARY

Hon. Mr. Conway: I request unanimous consent so that we might observe a certain anniversary this afternoon.

Mr. Speaker: Is there unanimous consent to observe a certain anniversary?

Agreed to.

Hon. Mr. Conway: I appreciate the cooperation of the members.

Hon. Mr. Nixon: Is this going to be lengthy?

Hon. Mr. Conway: I promise my colleague the member for Brant-Oxford-Norfolk (Mr. Nixon) that on my

part it will not be a lengthy oration, but I do want to take this opportunity. I know all members of the House would want me to note that later this week, actually on Sunday, the province will celebrate the 25th anniversary of the election to this Legislature of our good friend and colleague the member for Brant-Oxford-Norfolk.

January 1962; I remember it well.

Mr. Barlow: You fell out of your cradle.

Hon. Mr. Nixon: His pants were wet.

Hon. Mr. Conway: I do, because it was in that winter that the province saw five by-elections take place in the early part of the Premiership of John P. Robarts. One of those by-elections was in my own county, where a cousin of mine representing the Liberal Party was elected to the House on that occasion. He was to lose 18 months later to another relative-in-law, so to speak, the current member for Renfrew South (Mr. Yakabuski).

Our colleague has, over the past 25 years, brought a great deal of colour, character and commitment to this assembly. He represents, of course, a very important tradition in Ontario politics, a tradition that I know is well recognized by those who appreciate the history of this province.

In the old days, my colleague the then member for Brant used to say on many a platform, "It is time for a change." We are delighted on this side that some 19 months ago a change finally and happily occurred in this great province.

Mr. Rae: That is a matter of opinion.

Hon. Mr. Conway: We note the opinions of the leader of the third party. We appreciate the opinions of the leader of the third party.

Hon. Mr. Nixon: We appreciate the leader of the third party.

Hon. Mr. Conway: And as the member for Brant-Oxford-Norfolk says, we appreciate the leader of the third party.

However, it was in the fall of 1919, some 67 years ago, that the father of the current Treasurer entered this assembly as the member for North Brant and as Provincial Secretary in the United Farmers government at that time. During the 20th century, the Nixons have played a very important and constructive role in the public life of this province.

It is a tradition of father and son that is shared by others in this assembly. I know my friend the Leader of the Opposition (Mr. Grossman) would want me to note that he carries on the very distinguished tradition begun by his father some 32 years ago. We had Harry and Bud Price, Conservatives from Toronto. We had Norm and Michael Davison from the Hamilton area representing the New Democratic Party, father and son. In fact, in my area we had the great Conservative family the Dunlops, father, son and grandson, who all served in this assembly.

It is interesting when one looks back to January 1962 to see what the current leader of the House, the then candidate for the Liberal Party, was about. He was described about that time by a certain Val Sears as a gangly, six-foot-three, 195-pounder. Some things have changed.

Mr. Wildman: Obviously, there have been some changes.

Hon. Mr. Conway: The photographs from the brochure of 1962 indicate that other things have changed a bit. The commitment and the language have in many ways not changed. I was struck, and I know you would appreciate this, Mr. Speaker, that in that first campaign the candidate for the Liberal Party in Brant was saying, "The farmer does not want to be pampered or mollycoddled, but he wants a right to expect a firm and consistent hand in the establishment and implementation of sensible farm policies."

The member has gone on over many years to give practical, positive and powerful effect to that commitment. I want to say, and the Premier (Mr. Peterson) would want me to say, that those of us who were recruited when our friend the member for Brant-Oxford-Norfolk was the leader of the party feel a particular pleasure on this occasion.

I will not remind my colleague the member for Brant-Oxford-Norfolk what it was he sent via emissary to Pembroke when he heard that some juvenile delinquent was actually seeking the Liberal nomination in 1975. More seriously, I can say, on behalf of all of us who were recruited in 1975, and certainly before, because I know you, Mr. Speaker, came to the standard and the banner when the member for Brant-Oxford-Norfolk was the leader of this party, we have always felt a special relationship to this most remarkable Canadian. Yes, he is irrepressible. There are times when he is positively impossible.

Mr. Laughren: Obnoxious, even.

Hon. Mr. Conway: No. I certainly would not say that.

I noticed in the morning press the observation that he was the general plough-horse of the current government, and that is true. One of those articles observed that the farmer from Brant county was "more sophisticated than you'd expect, and there's less ego." That is the truth. One of the things you discover about the farmer from Brant-Oxford-Norfolk when you are privileged to work with him is that he is a very interesting, multifaceted personality.

On behalf of all the Liberal caucus and on behalf of all Liberals in this province, whom he has led both as president and as leader of the party, I want to say that we greatly appreciate the dedication he has shown and the encouragement he has extended to all of us.

I want to say in conclusion, on behalf of the Premier and the government, that we look forward to many long years of continued service. General plough-horses cannot be easily or soon retired, and we expect that we celebrate this week the first 25 years. There is a tradition that suggests there will be many more, and we wish him well at Treasury, in the bakery, in the bookshop and in all those other wonderful places we know this remarkable individual inhabits.

Mr. Grossman: I want to add some remarks on behalf of our party on this great occasion and unlike the minister, who promised to be brief -- we appreciate that it was brief under his definition; we would have missed question period had it been his usual length -- I want briefly to add our thoughts on this day.

As the minister has pointed out, it is in my case with a special sense of collegiality that I have an opportunity to do this. My father and I have served in this House for 32 years now, but that seems to pale against the Nixon dynasty of 68 years. Some would have thought that 42 years was a long time. It could be a great campaign slogan in Brant: "Forty-two years is enough."

However, in the years that the current Treasurer has served here, he has shared many offices that I have had the opportunity to have: the Treasury, obviously, government House leader, opposition House leader, Leader of the Opposition. He has had the opportunity to lead his party as the third party in the House. That is something I do not aspire to do. I rather aspire to one of the offices that his own father held, which was Premier of Ontario, but I did have in mind more than 90 or so days when I get the chance.

I have many fond memories, and still collect them, of the time the member for Brant-Oxford-Norfolk has spent in the House, and not only the days when he enlivened this House with suggestions and comments, which some of us have remembered but which the Treasurer does not always remember; he sat on these benches making marvellous suggestions, mostly in a very good-natured way.

Hard as it is to believe that attendance would lag in the House, particularly on things such as budget debates and even on windup speeches, somehow attendance sometimes would lag. I always remember, when we sat on the government side, we always found more of our members than usual here when we knew the wrapup speaker was the member for Brant-Oxford-Norfolk.

I should not say this when it will so bruise the ego of the Minister of Education (Mr. Conway), but when the wrapup speech was made by the member for Brant-Oxford-Norfolk, our members tended to come in larger numbers, because his speeches were always informative and entertaining and mostly fair. During the long time the member not only served in this House but also came to the House, he showed all of us that there was a lot to be learned, at least in earlier days, from sitting in the House and listening to what was happening.

Among my fondest remembrances is the testimonial dinner given for my father when he retired in 1975. The then leader of the Liberal Party was asked to attend the dinner and speak; indeed the member for Brant-Oxford-Norfolk was there as a head-table guest. He spoke warmly and fairly about my father, something that touched everyone there. Unfortunately, the member was the best speaker of the night, something we have never forgotten either.

We have enjoyed working with and listening to the current Treasurer in all the capacities in which he has served. I particularly feel a warm spot for him because at the leaders' debate in 1975, when I was running and our polls showed I was in third place in my riding, if the Treasurer had not been kind enough to begin to refer to the then Premier as Bill instead of Mr. Davis, I would probably have lost the election. I thank him very much in a personal sense. By way of rewarding him, we regret here many times on this side of the House that he did not accept a Senate appointment when it may have been available. If there is anything we can do, he should let me know soon.

Interjections.

Mr. Grossman: I want to get it done.

In closing, on behalf of not only the boys at Earl's Shell Service in St. George but also the women there, and on behalf of men and women gathered everywhere across this province who have benefited from the member's time on both sides of the House, let me extend our heartiest congratulations. He has made a marvellous, sincere and important contribution.

I want to dissociate ourselves from Mr. Sheppard's

article this morning where he says, "Mr. Peterson may be the new political star and Attorney General Ian Scott the darling of some of the media and intelligensia." We think if only the media and intelligensia got to know the Treasurer, he too could be their darling.

Mr. McClellan: It is my pleasant task to speak on behalf of my colleagues in the New Democratic Party in paying tribute to the member for Brant-Oxford-Norfolk and on behalf of those members of the assembly who, unlike the previous two speakers and our honoured minister, did not inherit their seats.

The Treasurer has achieved the milestone of a quarter of a century in this assembly with all his marbles intact.

Interjections.

Mr. McClellan: I did not think that was a controversial statement. He has survived with all his marbles intact and with a marked improvement in his personality and temperament, unlike the experience most of us go through. We recognize that signal accomplishment. Something, perhaps having to do with the change that occurred in March 1985, has put a contented smile on the minister's face which has not vanished since that day.

The papers this morning were full of articles about our friend the member for Brant-Oxford-Norfolk. They remind us of a number of things, particularly his almost forensic skill in anticipating the wave of the future. For example, in 1976, he supported the illustrious Stuart Smith as leader of the Liberal Party, thereby putting into limbo for a full 10 years the member for London Centre (Mr. Peterson), for which we thank him. As well, in 1984, he supported Jean Chrétien, another of his accurate predictions.

I recall so clearly in January 1985, lowly worm backbencher that I was, drinking coffee with the member in the lobby and lamenting the fact he had been passed over for appointment to the Senate.

I recall previous farewell speeches, particularly in 1976, when he stood down as leader of the Liberal Party of Ontario. The tributes at that time reminded us of what those of us who have served with him during the past 10 years have come to appreciate: his extensive, encyclopaedic knowledge of Ontario and of all the small nooks and crannies of this province. I do not think there is another member in this assembly who knows more about more parts of this province than the member for Brant-Oxford-Norfolk. We have had the benefit of the tremendous breadth of his knowledge of the people of this province for a quarter of a century.

The Globe and Mail, also a paper of national record, does document -- and I think this has to be pointed out -- that despite his reputation as a frugal and parsimonious farm person, he does have a taste for canaries washed down with expensive Beaujolais and for fine, expensive red wine.

Today, I want to assure him of our affection and respect. All of us who have had the opportunity of working with the member for Brant-Oxford-Norfolk know him to be a forthright man whose word is his bond, a man of complete and utter integrity with whom it has been a real privilege and pleasure to work. I am sure my colleagues share those sentiments.

His father served for 43 years in the assembly, so the member is only halfway on in his sentence, unless of course he succumbs to the blandishments of the Senate. We will have to wait and see. In the meantime, we offer our congratulations and best wishes to him, his wife, Dorothy Nixon, and his family.

Mr. Speaker: The Treasurer may have a word in response.

Hon. Mr. Nixon: I cannot recall a more uncomfortable quarter-hour in the 25 years I have experienced in this House. I hate this stuff.

I want to thank my good friends who have spoken for their kind remarks. I certainly appreciate that. While all of us enjoy the opportunity to serve our fellow Ontarians in this House and to take

part in the democratic process, the real, memorable enjoyment is our interaction with good friends and colleagues in this House. That is the most enjoyable and, in the long term, productive and valuable part. There is no doubt about that in my mind.

When I was first elected, I was ensconced in seat 119, now the seat of the member for Hastings-Peterborough (Mr. Pollock). That was mine. I immediately made good contacts with my New Democratic Party friends and always enjoyed these relationships with all parties. It is often said elsewhere that while we can debate heatedly, and sometimes acrimoniously -- unfortunately, we sometimes have differences of opinion that are not real and often have differences that are real -- it rarely interferes with our personal friendships, and I think that is a credit to the human condition.

We are very fortunate that this is true and will continue to be true. I have a feeling this has been maintained in this House perhaps more than in some other Houses. Comparisons are not valuable, but I think the tradition here for decades has been this close personal association, which is an extremely valuable adjunct to our democratic process.

When I first assumed my place in the House, the members had no offices at all and no telephones, except for a pay phone in the hall -- just out there by the government caucus office -- which took nickels in those days. There was no secretary, and when this was put to Mr. Frost, who was then Premier and who, when I came in, sat in the front bench at place 1, where the member for Windsor-Walkerville (Mr. Newman) now is, he always said, "Look, you are elected to a seat in the Legislature; that is it."

He was quite serious. We had ink in the inkwells that are now blocked off with nice little circles of walnut. We had pens with nibs that shoved in and we wrote with those. All our letters would be placed in the box which, for posterity, is still there. If one put a letter in there to be posted, it might not be picked up. We seemed to get along all right.

The Leader of the Opposition then, my good friend John Wintermeyer, had a very nice office in the members' reference library, or whatever we call that nice room in the west lobby. I do not want to spend a lot of time on that, other than for members to contemplate how our facilities and amenities and the availability of assistance have increased.

It is not only as Treasurer that I think of those extra dollars; I often think also as a member of the House whether the effectiveness of the work we do in the House has increased. That is not quite so clearly set out. It is still somewhat problematical. However, when I hear the questions of the member for Nipissing (Mr. Harris), I realize he must have a vast array of researchers assisting him in these matters.

In those days, it is interesting to note, the members could not get home as readily since the House sat for lengthy evening sessions, often going through on a regular basis until after midnight or until 1 a.m. or 2 a.m. I am very glad we have abandoned evening sessions, although from time to time I say publicly they should be brought back on some occasions.

Most of the members stayed in the Royal York Hotel because it had a nice rate for us. We paid $5 a night, but if one wanted a cheap room, one went to the King Eddie, which was $3 a night. Since then, inflation has affected that; and I should add in parentheses that we paid for that out of our tax-free expense allowances. I put that out for members to think about.

It is funny. I can remember those things much more clearly than the dramatic issues that have swept back and forth like tidal waves in this chamber. All of them were important. But as is so often the case in politics, particularly when one gets oneself in some kind of trouble, which from time to time all of us do, and goes home and thinks, "O God, is this not terrible?" a month later one cannot remember what the big deal was all about. The nice part of this business is it is difficult to remember whom you are mad at and what the big issue was a month ago.

I have enjoyed it tremendously. People tell me that is obvious, but I can tell members also that I feel very satisfied with my position here, just as I felt my position in opposition was worth while. I can tell my friends that one gets used to it. It gets better; so they should not despair. They are going to like it better and better.

I go back to what I said to begin with. We have great responsibilities here and no one should question that what we do is worth while. Whether we are in opposition or government or whatever our individual responsibilities are, it is worth while and valuable. However, ahead of everything else, the human relationships are the things of personal value that we will remember. I thank my honourable friends for their kind remarks and I look forward to being associated with them for many years in the future.

Mr. Pope: Now.

Hon. Mr. Nixon: Let's get back to it.

Mr. Speaker: In this harmonious spirit, I now inform the members that it is time for question period.

ORAL QUESTIONS

GASOLINE TAX

Mr. Grossman: I have a question for the darling of the media and the intelligentsia, the Treasurer of Ontario.

Mr. Ashe: The honeymoon is over.

Mr. Grossman: He said he found the previous 15 minutes uncomfortable, so I want to change his perspective a bit, if I can.

Since we first raised the question one day ago of the gasoline tax, of the increase the Treasurer put in his first budget, another half a million dollars has been taken away from the motorists of the province because of the tax increase he brought in in that first budget. The boys and girls at Earl's Shell Service in St. George would be interested to know this. Since the tax increase has resulted in about $160 million per year in excess revenue and since he boasted of $400 million in excess revenue in the first six months, is he now prepared to consider revoking his tax?

In response to the honourable member's question, I was concerned that there was something in his comments, both in the House and outside, that indicated that somehow or other our tax system now permits increased revenues as the prices go up and does not allow revenues to reduce when prices g