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March 24, 1980

31st Parliament, 4th Session

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Hansard Transcripts

L005 - Mon 24 Mar 1980 / Lun 24 mar 1980

STATEMENTS BY THE MINISTRY

ENERGY FROM WASTE

SEATON DEVELOPMENT

RED HILL CREEK DEVELOPMENT

EXEMPTIONS FROM THE MINING ACT

ORAL QUESTIONS

SEATON DEVELOPMENT

LONGBOAT CLAIM TO GRANT

INTEREST RATES

USE OF HERBICIDES

EMPLOYMENT DEVELOPMENT FUND

AID TO CHRYSLER

FLOOD DISASTER RELIEF

ODC LOANS

QUEEN STREET MENTAL HEALTH CENTRE

DURHAM REGIONAL ENVIRONMENTAL HEARING

MOTIONS

COMMITTEE SITTING

INTRODUCTION OF BILLS

ONTARIO WASTE DISPOSAL AND RECLAMATION COMMISSION ACT

RENT DEPOSITS ACT

AGRICULTURAL INVESTMENT DISCLOSURE ACT

FAIR PRICING ACT

PUBLIC ADVOCATE ACT

AUTOMOBILE INSURANCE RATE CONTROL ACT

CONSUMER PROTECTION AMENDMENT ACT

ORDERS OF THE DAY

THRONE SPEECH DEBATE (CONTINUED)

SUPPLEMENTARY ESTIMATES

MINISTRY OF INTERGOVERNMENTAL AFFAIRS

The House met at 2 p.m.

Prayers.

STATEMENTS BY THE MINISTRY

ENERGY FROM WASTE

Hon. Mr. Welch: Mr. Speaker, it gives me great pleasure to table today a document entitled Energy from Waste: A Program for Ontario. This publication sets out the goals of my ministry in the field of energy from waste and the methods we will use to attain them.

As honourable members are aware, last October I released a policy statement entitled Energy Security for the Eighties: A Policy for Ontario. In that paper the government established a target to increase Ontario’s capacity to produce more of its own energy from the present level of 22 per cent to at least 35 per cent by the year 1995. Over the next 15 years, through a variety of programs, we will be assisting the development of renewable and recoverable energy sources to the point where energy from waste will contribute 3.2 per cent of our primary energy needs.

This waste, which is the largest potential source of recoverable energy in Ontario, is in the form of municipal solid waste, forest and mill residues, agricultural waste, municipal sewage sludge or industrial byproduct heat.

If the energy potential of waste is properly and methodically tapped over the next 15 years and the potential for biomass conversion developed, we estimate that by 1995 this province could replace the equivalent of 27 million barrels of crude oil annually. This is enough energy to heat more than one million single-family homes each year. In 1979 terms, the annual value of the oil equivalent would be more than $400 million.

Ontario’s Energy from Waste program is designed to help municipalities and private industry take advantage of this potential. Our policy has the following elements: emphasis on commercial projects having proven technology; priority to private sector participation while advancing municipal interests; provincial support for research, development and demonstration of Energy from Waste processes and a flexible approach to financial support for participation in projects.

In line with this policy, the Ministry of Energy has budgeted $2 million in this fiscal year for cost-sharing in feasibility studies and engineering design work. As well, the ministry will provide preliminary assessments of projects and technical advisory services once a project is under way. Additional assistance will also be available under the Canada- Ontario bilateral program.

To achieve our goal we estimate that a total investment of approximately $3 billion in 1979 dollars will be required over the next 15-year period. I expect a large percentage of this investment will come from the private sector, with the balance coming from the government, municipalities, the Ontario Energy Corporation and Ontario Hydro.

My ministry anticipates that the field of energy from waste will in the coming years provide great opportunities for private sector involvement, with the attendant economic benefits for Ontario. It will also present opportunities for many municipalities to solve some of their solid waste disposal problems.

Mr. Sargent: Who are you trying to kid? It isn’t going to work.

Hon. Mr. Welch: We are far more optimistic on this side of the House. In fact, that is why we are on this side of the House; it is because of our optimism.

Already the Ministry of Energy and the Ontario Energy Corporation are actively involved in several Energy from Waste projects in Thorold, St. Catharines, Hamilton, North Bay, London and Metropolitan Toronto -- projects involving both municipalities and private industry. We are also looking into one such project in the member for Grey-Bruce’s area. We are very actively pursuing something up there. That is how most of these things start: in conversation and in meetings, as a result of consultation.

Tomorrow I plan to meet with representatives of municipalities, industry, engineering and consulting firms and other interested groups to brief them on our new program. It is my hope that the program described in the document I am tabling today will assist these communities and industries. Equally important, we hope it will give the general public an appreciation of the potential and the scope of the government’s Energy from Waste program. More information will be made available to the honourable members as the program progresses in the months ahead.

SEATON DEVELOPMENT

Hon. Mr. Bennett: I would like to comment briefly to the House on the provincially owned lands in North Pickering and to set out clearly the government’s position on the development of the Seaton new community.

The North Pickering planning area covers an area of approximately 25,000 acres where we have designated 7,000 acres for urban development, 10,000 acres for agriculture and 8,000 acres for an open-space system. Nearly 21,000 acres of these lands are owned by the province.

Because of prevailing economic conditions as reflected in today’s generally high interest rates, I have decided to reschedule the start-up of housing construction in the new community of Seaton beyond the currently scheduled date of 1982. I have instructed my ministry staff to proceed with a review of timing and scheduling of the development.

Regional development strategy in 1970 projected the development of two new communities in the North Pickering area in order to foster development in the area east of Metropolitan Toronto. The combined population of the two new communities was projected in excess of 200,000.

With the announcement of the federal airport in 1972, it was decided that the two communities would be combined into one with a population of 150,000 to 200,000. When the airport project was suspended in 1975, it was necessary to scale down the project to a population of 75,000 to 90,000 over a 30-year development period in order to continue to foster development east of Metropolitan Toronto.

Circumstances have changed over the years, and we have met those changes in a flexible way in the best interests of the province. A government without flexibility is a government without responsibility.

Long-term planning of Seaton in co-operation with the region of Durham and the town of Pickering will continue. Amendments to the Durham official plan to establish land uses in Seaton will be processed by early 1981.

The Ontario Land Corporation will retain ownership of 10,000 acres of high-quality farm land in the western portion of the North Pickering site and continue its use for agriculture on a long-term basis. With the involvement of the farmers in the area, as well as the Ministry of Agriculture and Food, we have developed a farm lease program which has become a model for management of provincially owned agricultural lands in other areas of this province. The program places strong emphasis on opportunities for young farmers.

Under provincial ownership and management, acreage in farm production in the total North Pickering planning area has increased to 12,700 acres from the 8,364 acres in 1971. Continued ownership by the Ontario Land Corporation of this acreage of fertile land will ensure that it will remain in long-term agricultural use.

The ministry will also determine the detailed disposition of the 8,000-acre open space system on the west and south periphery of the North Pickering site. Taking advantage of government ownership of this land, the open-space system will accommodate a multiplicity of uses, including corridors for hydro and gas lines, rights of way for the east Metro freeway and highway 407, and recreation, farming and conservation lands.

I want to emphasize that the decision to delay housing development in the new community will in no way affect final expropriation settlements still pending before the Land Compensation Board. All obligations to former expropriated land owners will be fully met.

Acquisition, maintenance and carrying costs for the 21,000 acres owned by the province total $270,385,415. In addition, nearly $10 million have been expended: approximately $8.8 million by the Ministry of Housing and North Pickering Development Corporation for salaries, administration, planning and engineering, and $1.1 million for legal fees on behalf of some former owners and the ministry in connection with the Hoilett hearings of the Ombudsman’s office as well as the Donnelly royal commission.

Since the Ontario Land Corporation was transferred to the Ministry of Housing in mid-1978, additional costs totalling approximately $2.8 million have accrued for salaries, planning, engineering, land management, property administration and official plan documentation, to be capitalized at the end of March of this year.

While the province has a very substantial investment in the North Pickering lands, I cannot overstate the advantage that provincial ownership provides in carrying out the province’s regional development strategies. We are preserving a large area of prime agricultural land on a long-term basis, and have established an open-space system as a buffer between Metro Toronto and North Pickering. The new community of Seaton will ultimately provide a stimulus for further development of Durham region.

In the very near future I shall be meeting with the chairman of the region of Durham and the mayor of Pickering to discuss the various matters I have covered in this statement. In conclusion, I want to assure this House that I state unequivocally that it is still the government’s intention to develop Seaton new community when the direction of the economy is clear.

2:10 p.m.

RED HILL CREEK DEVELOPMENT

Hon. Mr. Parrott: Mr. Speaker, I would like to take this opportunity to commend the regional chairman of Hamilton-Wentworth, Anne Jones, and her council for their request that the proposed highway development project for the Red Hill Creek valley area be brought under the Environmental Assessment Act.

Even though the government has indicated its desire to bring all municipal projects under the act in the near future, the time needed to implement this would have meant that the Red Hill Creek expressway would not be included.

I said during the last session of the Legislature that I hoped municipalities would see the value of voluntarily submitting significant projects to the environmental assessment process. Having had the opportunity to walk that valley for several hours, Mr. Speaker, I can tell you that I am very pleased they have made this decision.

The region has asked that two conditions apply, and I have agreed.

The first condition is that the streamlining procedures be adopted so the project will only have to go through one comprehensive hearing process under the act. If streamlining legislation, as we have proposed in the throne speech, has not been passed, then specific legislation will be drafted so that the project may receive only one overall, encompassing hearing under the Environmental Assessment Act.

The second condition is that the region be allowed to acquire land at its own risk in special hardship cases where the property owner has been unable to sell because of the uncertainty of the development proposal for the area.

I am sure that hearings under the Environmental Assessment Act will provide the community an opportunity to consider all aspects of this major project.

EXEMPTIONS FROM THE MINING ACT

Hon. Mr. Auld: Mr. Speaker, in connection with the question about exemptions from the Mining Act under

section 113, I would like to make the statement that I indicated I would do a week or 10 days ago.

Both Inco Metals Company Limited and Falconbridge Nickel Mines Limited have been granted exemptions from the provisions of

section 113 of the Mining Act with respect to their Ontario operations.

The Falconbridge exemption provides for the matte produced at the company’s new $90-million smelter facility in Falconbridge to be shipped to their wholly owned refinery in Norway for final processing.

The Inco exemptions provide for nickel oxide sinter to be shipped to the company’s wholly owned refinery in Wales; semi-refined precious metals of the platinum group to their wholly owned refinery in England; and refined nickel sulphide to jointly owned refinery facilities in Japan for final processing.

It is understandable that concern has been expressed in some quarters about these exemptions, because at first sight it might appear that to refuse them would automatically mean the creation of new jobs and wealth in Ontario, or at least in Canada. Unfortunately, the real world in which we must live and compete is not that simple.

We should not delude ourselves into believing that the industrialized nations of the world will beat a path to our door to bid for our nickel or copper, or indeed for any of our metals or minerals.

lnterjections.

Hon. Mr. Welch: I am having difficulty hearing the minister.

Interjections.

Mr. Speaker: Could we have some order on both sides of the House, please?

Hon. Mr. Auld: On the contrary, the major nickel-consuming nations -- the USA, Japan and western European countries -- currently are going to great lengths to obtain a very large, guaranteed supply line of nickel to be mined from the deepsea bed in the near future. This mining will be under provisions of the text of a new law of the sea, now being vigorously negotiated at the United Nations in New York. Nor should we delude ourselves about the need to understand and respect, but not necessarily agree with, the views of those industrialized nations who are our customers as expressed in their mineral policies.

Let’s first consider the Falconbridge exemption. It provides for the shipment of matte from the company’s new smelter facility at Falconbridge to their wholly owned refinery at Kristiansand in Norway. The exemption was recommended by me after consideration of detailed investigations and analyses by specialists in the mineral sources group of my ministry. These indicated a very real possibility that mine, smelter and supporting jobs in Sudbury would be placed in jeopardy if an inflexible position were taken.

A brief historical note is worth giving here. Falconbridge acquired an existing nickel refinery at Kristiansand, Norway, about 50 years ago when it began to develop the mine in the Sudbury area. That acquisition was the only available means whereby the company could obtain rights to use a certain electrolytic refining process. The exclusive rights to its use in Canada had been assigned to others.

This energy-intensive electrolytic process benefited, and continues to benefit, from the abundance of hydroelectric power available in Norway at rates considerably lower than those prevailing in Ontario. The impact of this on the mines is that substantially larger reserves at lower grade would become economically viable and would extend the Ontario mines’ projected life.

The highly industrialized western European countries provide substantial consumer markets which Falconbridge has cultivated and which responded favourably when the company offered long-term sales agreements out of its Norwegian refinery. This was achieved, notwithstanding the competition from other producers such as the French SLN refinery near Le Havre which processes matte from New Caledonia, where vast resources of nickel ore are known to occur.

The whole world market situation has changed significantly over the years, with Ontario’s and Canada’s share of that expanding market dropping from about 80 per cent in 1947 to about 25 per cent for Ontario, or about 35 per cent for Canada as a whole, more recently.

Fortunately, in terms of actual tonnage, Ontario’s nickel production has not dropped alarmingly. Competition from developing countries and from the Communist bloc has increased to the point where their share of the world market now exceeds ours. This is due in part to new developments and to new technology, including that in the major-consumer stainless steel industry where less pure forms of nickel, that is class II nickel, have superseded the highly refined, more costly pure nickel known as class I. For certain class II product processes the sulphide ores are not suitable as feed.

It should be understood that Falconbridge has made various attempts to perform further processing in Canada. Within the context of

section 113 of the Mining Act, production from the company’s nickel-iron refinery built at Falconbridge in the late 1960s qualified as yielding -- and I quote from the act -- “refined metal or other product suitable for direct use in the arts.”

This project was seen as an ambitious attempt to introduce new technology to the acknowledged nickel capital of the world and keep it abreast of world market requirements. The fact that the process failed, in spite of successfully passing the pilot plant stage, is regrettable; to say the least for the company, it resulted in losses amounting to about $75 million.

Also, in 1971, the company announced plans to build a nickel-copper refinery at Becancour, Quebec, on the shores of the St. Lawrence River, principally in connection with its proposed Ungava operation, but also to treat part of the Sudbury production. This plant would have qualified under

section 113(1) of the Mining Act.

The combined impact of oil-pricing policies of the Organization of Petroleum Exporting Countries and of some 50 per cent or more escalation in the capital cost estimate caused the company to halt the project in 1974 after expenditure of several millions of dollars. Nevertheless, further feasibility studies have been carried out; but results so far point to uneconomic situations which would place the company’s competitive position in world markets in jeopardy.

2:20 p.m.

The ability of Falconbridge to finance another refinery at this time should not be taken for granted. It is well known in mining and financial circles that a succession of recent events, including recessionary trends in world economics and the province’s insistence that pollution-control requirements be met at the Sudbury area operations, have put a severe strain on the company’s cash flow and general financial situation. Apart from normal market constraints, the company has been subject to certain restrictions on further borrowing. I would refer honourable members to the company’s annual reports for financial details.

With regard to the exemption -- that is 10 years -- I would point out that in an industry such as mining, which is very sensitive to the cyclical nature of business, long-term planning is essential.

Some years ago Falconbridge embarked on its aggressive marketing strategy which offered customers long-term contract sales out of the Norwegian refinery. Significant benefits deriving from this are that the lucrative European market responded favourably; there is long-term security for Sudbury implicit in these arrangements and the financial community has been reassured.

Our investigations certainly do not support the argument that refusal to grant an exemption to Falconbridge would create new wealth and jobs in Ontario and further diversify the Sudbury tax base. While I and my colleagues in government would certainly welcome such an end result, there is no assurance that feasibility analyses for any new Canadian refinery to meet the requirements in

section 113 would point to either Sudbury or another Ontario location as the most logical construction site.

With regard to Inco, it is important to note that about 90 per cent of the company’s processing in terms of value added is already performed in Ontario. Inco has progressively added to its facilities in Ontario, spending about $1 billion on mining and processing plants in the late 1960s and 1970s. A most recent development is a $25-million rolling mill built in 1978 in response to Ontario mining tax incentives.

Many of the observations made with regard to the Falconbridge exemption apply equally forcefully to Inco. However, with particular reference to the nickel oxide sinter shipped to Wales, relatively little further processing is required to make it into a marketable product for direct use in the arts; and this is almost entirely absorbed by the British nationalized steel industry -- it’s a kind of preferential access.

The Welsh refinery is not totally dependent on nickel oxide sinter for feed from Canada; it also treats material from Inco’s mines in Indonesia and Guatemala. Should feed from Ontario be denied, it would be relatively easy for the industry to increase supplies from other sources such as the tropical lateritic nickel suppliers. This would further reduce Ontario’s and Canada’s share of the international market and would eventually lead to unwelcome cutbacks in the Sudbury operations.

With regard to the semi-refined precious metals concentrates shipped to the Inco refinery at Acton, England, it must be clearly understood that gold, silver and certain other elements in the ores are already separated out in the Sudbury refining plant. It is the complex platinum group metal concentrates only -- PGMs, as they are called -- that are sent to Acton. These call for highly-specialized treatment and skills that have evolved at Acton over 60 years since researchers there first developed a commercially viable refining process just after the First World War.

The Acton refinery can and does process scrap, residues and other extraneous sources of precious metals in addition to the Sudbury material. The rationale for building a PGM refinery in Canada -- one would hope in Ontario and possibly in Sudbury -- is under constant review and discussion. At this time neither lnco nor any other refinery operator can justify such a development as an economic proposition.

In the matter of the refined nickel sulphide shipped to jointly owned refineries in Japan, I point out that only the sulphur content needs to be removed to yield a marketable product in that country; and it represents quite a small proportion of Inco’s Ontario metal production. It has been made abundantly clear that refined nickel sulphide is the product that these customers wish to purchase. If it is not made available from Sudbury, other sources in the world are readily available.

Notwithstanding the exemptions and the circumstances, we shall continue to monitor the operations of both companies and to persist in our discussions towards fuller implementation of the requirements set out in

section 113(1) of the Mining Act.

We shall continue to provide significant incentives in the Mining Tax Act to encourage such further processing in northern Ontario, believing that in the long run incentives will be more effective than attempts at coercion. We must keep in mind, however, that Ontario is not the only source in the world of nickel or other metals and that we must furnish our customers with products they are willing to buy, which may not necessarily be the ones we would most prefer to sell.

Before I close, I think this is an opportune time to expand on that other source of concern in certain quarters: sea-bed mining. The nodules that are considered for recovery from the ocean floors contain nickel, copper and cobalt, in some cases in amounts comparable to those in the Sudbury ores. Because it is of very direct concern to us, the mineral resources branch of my ministry has been closely involved in monitoring the United Nations’ Law of the Sea Conference which is addressing the subject.

“Widespread misconceptions about the nature of the nickel reserves of Ontario, Canada and other land-based producers have led to overly optimistic views about the near-term potential of sea-bed mining. These could lead to premature and possibly subsidized development of sea-bed mining capacity, which could have serious effects upon present and potential land-based nickel producers here and in the developing countries.”

Mr. Speaker, let me state categorically that I and my colleagues in government will not be manoeuvred into being the cause of, or into contributing towards, any such premature and subsidized development of the sea bed. In all circumstances, the government of Ontario is satisfied that steps taken thus far are in the best interests of all Ontarians and particularly of those in the Sudbury area.

ORAL QUESTIONS

SEATON DEVELOPMENT

Mr. Nixon: Mr. Speaker, I have a question for the Minister of Housing dealing with his complete and abject reversal on the development of the North Pickering area. Can he explain why in November 1979 both he and the Premier (Mr. Davis), within a week of each other, assured the House there would be no change in policy and the Premier said “a continuation would be good business in relationship to North Pickering,”

whereas now he has completely reversed that, indicating in his statement to the press that “the decision not to proceed means we are biting the bullet and that makes the best business sense”? Surely we should have trusted the Premier in this connection and not the minister.

Hon. Mr. Bennett: Mr. Speaker, I recognize the statement I made at the time of my estimates back in November and the statement the Premier made. I think I indicated clearly that we were reviewing the facts of Seaton and those economic situations that surrounded it.

In the light of some of the statistics that have come to my office over the last number of weeks and the discussions I have had with other interested sources, including the financial institutions of this province, it has been our decision that there be a deferment or postponement of the startup time in the range of four to five years for units actually to be in place in Seaton. That is why I have asked the ministry people to do a complete review of the economic situation with a view to determining when would be a more appropriate time, economically, to bring Seaton back on stream as a viable entity in the region of Durham.

2:30 p.m.

Mr. Nixon: Since the minister was associated with the Treasury as parliamentary assistant at the time of the acquisition of this property, as well as of Edwardsburgh, South Cayuga and Townsend, and three of those four seem to have vanished with huge costs to the taxpayers, can we presume that the matter of Townsend is also under some review and that the government policy may be as dramatically changed without notice in that connection as well?

Hon. Mr. Bennett: All of the projects that the representative of the Liberal party has mentioned this afternoon, including Pickering, are investments. I consider Pickering to be an investment; I really do.

The fact remains that the government of this province and the people of this province own better than 21,000 acres in Pickering, of which more than 12,700 are in very active and high-quality production agriculturally, which is 50 per cent better than it was in 1971 when we acquired the land. I think that follows along on the agricultural policy of retention of agricultural land in Ontario.

Mr. Breaugh: The minister is a Socialist.

Hon. Mr. Bennett: I’m a long way from that. I have to disagree.

Mr. Speaker: Just ignore the interjection.

Hon. Mr. Bennett: With my particular background, Mr. Speaker, it’s hard to ignore when I’m called a Socialist.

As far as Townsend is concerned, I believe the member from that particular area happened to be with me some months ago when we turned the first sod for the construction of highway 69, which will make Townsend a viable community. Townsend comes into an entirely different program, as opposed to Seaton or some of the other communities, inasmuch as the Steel Company of Canada is located there; within the next several months they’ll have a staff of better than 1,300 people. There’s a very supportive staff for the McColl-Frontenac or Texaco operation, and the Ontario Hydro plant is there as well.

The member knows that in Townsend we’re into an entirely different program -- as I’ve already mentioned -- inasmuch as the steel company will bring 3,000 acres of industrial land on as a private entrepreneur, which I see as a tremendous spinoff for development.

There is no intention by this government or my ministry to defer the project of Townsend. I give the two members for that area the full assurance that Townsend is under way; the road sewer and lagoon systems are being installed, and there has never been any doubt in the last number of months.

Mr. Breaugh: Supplementary, Mr. Speaker: I would like to ask the minister about two small items that aren’t in the statement. There are about 3,000 acres that aren’t accounted for in this particular statement. Would the minister share with us what he intends to do with those 3,000 acres? The minister is completely silent on the matter of the excess capacity in the big, blue pipe and the related costs of that. Who does the minister expect to bear that part of the tag?

Hon. Mr. Bennett: Mr. Speaker, if the member would read the statement carefully, I’m sure he would see that I’m talking about the 25,400 acres in the planning area of North Pickering; it was spelled out very clearly on March 2, 1972, when the entire announcement was made, that the planning area was 25,400 acres. I indicated clearly today that we, the people of Ontario, own roughly 21,990 acres. The difference of the acreage happens to be in service roads and highways that are present within the planning area. They are owned by the municipality, the province and so on.

The member also asked about the Durham-York master sewer system, which comes up from the lake and extends as far west as Woodbridge, and which services some 12 or 14 communities. The cost factor of this sewer system has been worked out, and I’m sure the chairman of the region and other members will be in to see the Minister of the Environment (Mr. Parrott) and my ministry, as they have in the past, about deferring certain costs related to infrastructures, such as sewer and water. We have been rather lenient with them in giving them an extended period of time for repayment.

May I say that the capacity of the York-Durham regional sewer was designed to serve 881,000 population and some 17,500 acres of industrial land. Of the 881,000 population served by that sewer, 90,000 was projected to be used by Seaton. I think you would have to agree that is rather a small percentage of the overall capacity. Obviously, the sewer is serving that entire regional area as far west as Woodbridge and will continue to do so. The cost factors and the triggering period of costs to be born by the municipalities will have to come under further discussion.

Mr. Sargent: Mr. Speaker, does the minister consider the $250 million involved a good investment? There are 25,000 acres and you’re holding it for $10,000 an acre. Is that a good investment? Is that land worth $10,000 an acre?

Hon. Mr. Bennett: Mr. Speaker, I think if the member would look at the situation, I said very clearly there are 25,400 acres in the whole development or planning area. There are 8,000 acres of open space to be used by a number of public agencies. which would have been acquired at some point by this province. Some are for conservation use, some for the corridor for highway 407, the hydro and gas rights of way, and so on.

Seven thousand acres will be used for the development of Seaton some day in the future; I figure that’s down the road four or five years. The balance of 10,400 acres will be used indefinitely for agricultural purposes. I hope, as the leases come up for those who at present have them and do not wish to renew them, we will put greater emphasis on the junior farmer program to make sure we give the young people of this province who want to stay on the land an opportunity to do so.

Mr. R. F. Johnston: Supplementary, Mr. Speaker: On what basis does the minister think that four to five years are going to change anything about the need for more population in the Seaton area, when the population of Metro Toronto is in decline and there is a need for major redevelopment here because gas and oil prices are rising? On what basis does the minister possibly think he is going to reopen this can of worms?

Hon. Mr. Bennett: Mr. Speaker, that is an assessment made strictly by the member regarding the can of worms. I’m saying that the review the ministry will undertake over the next period of time will indicate what will be a realistic date for reintroducing Seaton on a construction basis.

I said four or five years. I think we would like to be a little bit optimistic that the economy of this country and this province will change considerably over the next short period of time.

As far as the declining population of Metro is concerned, I think if we review the situation we will find there is an interest in the population of Ontario to move beyond the borders of Metropolitan Toronto, and that’s why we’ve tried to put in place a policy for developing communities to the east of this great metropolitan area.

LONGBOAT CLAIM TO GRANT

Mr. Nixon: I would like to put a question to the Attorney General concerning my esteemed constituent, Tom Longboat, Junior. Has the Attorney General made himself aware of the circumstances involved in the claim that a $500 grant made by the city of Toronto to Tom Longboat, Senior, in 1905 has never been paid; that in fact it should be paid with interest to the Longboat family now, not necessarily because of their personal need but in order to see that justice is done, an area which is supposed to concern my honourable friend?

Hon. Mr. McMurtry: I’m not particularly familiar with the claim the honourable member refers to. Tom Longboat, Senior, was one of our most distinguished citizens in the history of this province; I recognize that. It seems to me I have some recollection of reading somewhere recently about this claim, but I do not know the details.

As the member knows, it is not the role of the Attorney General to intervene in what might be a private dispute between a family and a municipal corporation or a city. But I certainly know the honourable member, with his many friends and admirers in the legal profession, should have no difficulty in seeking any appropriate advice.

Mr. Nixon: I’m sure the minister would agree with me that if this argument fell into the hands of the lawyers, that money would be used up in the first 10 minutes. Would he not agree that a matter such as this is not one that should be sent to the courts but is one where the minister, with his undoubted good offices and high reputation, might very well advise the municipality of Metropolitan Toronto or the city of Toronto to do the right thing in this connection and see that the transference of funds takes place?

Frankly, I like both ideas, that some of the money should go to the family and some should be set up as a fund to encourage athletes, particularly Indian athletes. In both of these areas the minister has shown his undoubted personal concern. Why can’t he take some interest in this and help to see that justice is done?

Hon. Mr. McMurtry: All I can say, Mr. Speaker, is I’m sure the city of Toronto will do the right thing in the circumstances.

2:40 p.m.

INTEREST RATES

Mr. Cassidy: I have a number of questions, Mr. Speaker, arising out of the consequences of the runaway interest rates that we’re experiencing in the province right now. If the Minister of Housing could respond, I’d like to know, in view of Finance Minister MacEachen’s rejection last week of any immediate action or assistance for home owners who were hit by the runaway interest rates, could the minister say what action this government plans to protect Assisted Home Ownership Program home owners, and to protect home owners with conventional mortgages who are coming to him and are facing big increases in the cost of their monthly mortgages over the coming months?

Hon. Mr. Bennett: Mr. Speaker, I believe the House is fully aware of the fact that the Treasurer of this province (Mr. F. S. Miller) and I had the opportunity last week of meeting with Mr. MacEachen and with the Honourable Paul Cosgrove, the Minister for Public Works reporting for Canada Mortgage and Housing Corporation, and reviewing with them the problems we foresee in the field of mortgage interest rates, particularly in respect to a government-initiated home ownership program such as AHOP, and what the downside happens to be for some of the people in those units.

My ministry, along with the Treasurer’s department, has been reviewing the situation. We believe there are about two thirds to 70 per cent of the people in AHOP who could be in some financial difficulty as a result of the escalation of interest rates and the fact that the triggering of the second mortgage will now come into action on the renewal of their mortgages.

While we discussed the problem with Mr. MacEachen and Mr. Cosgrove, without any definite position being given by the Liberal representatives, they said clearly they would be looking at the overall situation in the next short period of time to try to contemplate what they might be including in the federal budget, which will come down at a date to be decided by them.

I am meeting this Friday with Mr. Cosgrove to review with him some of the further developments or schemes or proposals that would offer some relief which my ministry and Treasury have put together and we hope he will take forward to his cabinet colleagues over the next short period.

May I say also to the House that, for some time I have been meting with people in the construction industry and the finance industry, those in the mortgage and insurance fields who look after mortgaging and housing in Ontario, trying to secure from them some further input as to what they believe are programs that might be introduced by governments to overcome some of the problems in the conventional mortgage market.

I will be meeting continually this week with a number of groups and I would hope that by Friday I would have some proposals to bring to Mr. Cosgrove that, in turn, he could present to and review with his ministry people at CMHC. I would hope that in a reasonable period he will be in a position to present them to his colleagues in the federal cabinet.

Mr. Cassidy: If I could redirect a question to the Minister of Agriculture and Food, Mr. Speaker, would the minister say what immediate plans this government has to assist farmers who are now facing increased financial costs for financing their spring seeding, the planting, and the cost for chemicals and fertilizers particularly in view of Statistics Canada’s reports that net farm incomes in the province will fall by 40 per cent this year and that young farmers with heavy debts will be the ones particularly affected?

Hon. Mr. Henderson: Mr. Speaker, I looked more or less for a question of this nature today. I have done considerable research into it and have met with staff.

Steadily rising interest rates are now of increasing concern among several members of the farm community --

Mr. Cassidy: Several? Every farmer in the province.

Hon. Mr. Henderson: -- particularly those who are operating with substantial amounts of borrowed capital.

Significant increases in the costs of purchases such as fertilizer, feed and fuel, which affect nearly all farmers and which are caused, in part, by the higher interest rates, have also been forecast.

On March 19 the Ontario Federation of Agriculture, at a regular directors’ meeting in Toronto, addressed the problem of high interest rates. My ministry was made aware of the meeting and in fact we had two staff members there to take

part in the debate. At this meeting there were several suggestions made which the Ontario Federation of Agriculture felt would be helpful to the farmers.

First, the federal government would be asked to freeze interest rates at 12 per cent for qualified farmers.

Second, the Ontario Federation of Agriculture should establish a criterion for determining a satisfactory subsidy rate for short-term credit to farmers.

Third, a subsidy rate should be established on a year-to-year basis for interim-term credit for those farmers being squeezed out of business. While this resolution received the support of the meeting, I am advised that considerable variations of opinion existed among those present, and throughout the farming community, regarding the pros and cons of subsidized interests. It is my understanding that the OFA intends to meet again in the near future in Ottawa to press for measures from the federal government to alleviate the problems caused by the high interest rates.

I will be watching the results of this initiative and the response of the federal government, as well as any further changes in the interest rate, to determine the impact on the agricultural community.

Our government is aware of the high interest rates. We are in a position where we are ready to accept directions from the federal government, if they have any.

Mr. Nixon: Mr. Speaker, I have a supplementary question for the Minister of Housing. Does he recall the commitment made by himself and his party, in the words of the Premier (Mr. Davis) on September 11, 1975, specifically relating to this eventuality that is discussed in the question? I quote from the Premier’s speech at that time:

“What we would propose, if we are forced to act, is to extend tax relief to present and prospective home owners through a new tax credit which would offset three quarters of the mortgage interest costs which are above 10.25 per cent. Such tax relief would be allowed to a maximum $500 annually and would apply only to principal residences.”

My question to the minister is: Since this was an undertaking made politically before an election, why isn’t the government acting on a similar program if not that one?

Hon. Mr. Bennett: I think I said very clearly that, in our discussions with Mr. MacEachen and Mr. Cosgrove, we were looking for a federal plan. We indicated -- the Treasurer indicated, that Ontario is prepared to piggyback, similar to what we did with the Assisted Home Ownership Program, in trying to find ways to solve the problem.

We also have to realize that the financial responsibilities of Canada rest with the federal government, and interest rates do not start at the east boundary of Ontario and stop at the west boundary. We have a national problem, to which we might collectively find a solution rather than trying to put all the responsibility on the provincial treasury, which my friend and I couldn’t agree to do even if we wanted to.

We, as ministers of this government, are continuing to find ways to resolve the problem and to offer some solutions to Ottawa. The simplicity of my friend’s remarks is not very well appreciated by the financial world, nor indeed by the public of Ontario. They realize the problem is very severe, and the fact that he tries to make it so simplistic is not very well received.

We admit the problem is not one that is easily resolved. If it had been, and if it could be, I am sure governments all over Canada, and indeed around the world where there are inflationary factors involved, would have taken immediate action.

The government of Ontario has indicated clearly to Mr. MacEachen and his other colleagues that we are prepared to co-operate with them in trying to find a solution to allow people to retain the ownership of their homes so they do not become the second part of the equation that, if they get out of their homes, they then want rental accommodation, in which we know there is going to be a shortfall as well.

Mr. Makarchuk: Supplementary, Mr. Speaker: In view of the fact that certain housing projects which come under the Ontario Housing Corporation have second mortgages on the land component of the total cost and they will have to be paid starting in the next few months, is the minister prepared at this time to delay those people having to pay off that second mortgage in order that they will have the money to meet the cost of the first mortgages?

Hon. Mr. Bennett: Mr. Speaker, we are looking at the overall problems of Ontario Mortgage Corporation and, indeed, as they relate to the Canada Mortgage and Housing Corporation portfolio as well.

Frankly, I have suggested to the minister at Ottawa that they could very well look at applying the hardship clause under the AHOP scheme, which gives the federal minister the opportunity of exercising the hardship clause in relation to the amount of income that is expended on behalf of mortgage and interest payments and so on. If it exceeds the 30 per cent, the minister has the right to defer the second mortgage for a further period of time.

Frankly, if the same conditions apply -- and we are looking at the entire Ontario Mortgage Corporation portfolio, as I said the week before last in the House -- we are pegging our rate at 13.5 per cent, which is one to two points below the market situation at this date, and we are going to retain it there in some relief to the mortgages that we hold on behalf of the people of Ontario.

2:50 p.m.

Frankly, if there is an area -- and I am not sure of the ones the member speaks of -- there are some Home Ownership Made Easy projects where we had the second mortgage on land that had a long period of time to run without a renewal clause involved. I am not aware of the ones the honourable member speaks of. We are reviewing the portfolio to give as much relief, from the Ontario Mortgage’ Corporation’s position, to our taxpayers and the people who hold the mortgages as we possibly can.

Mr. Breithaupt: Supplementary: Since there appears to be widespread agreement that the people involved in the Assisted Home Ownership Program are a special and particular case, and since there are some perhaps 8,700 persons in that category whose mortgages are going to be renewed this year, will the minister be making specific proposals on the AHOP situation, separate from the general concerns he has on interest-rate increases for all of us in all aspects of life in the province?

Hon. Mr. Bennett: I think I said in my original remarks regarding the question of the leader of the third party that one of the areas of vital concern to us was AHOP, where government at the federal level initiated a program that brought into the marketplace a number of people who are now finding it exceedingly difficult. The fact is that at the time rates were then written down to something about 8.5 per cent. Even if they had been paying 10 per cent at the time, some of them would have found it financially unbearable to have maintained or bought a home. AHOP is obviously one of the areas of prime concern to both this government and the federal government.

The 23,000-odd units that will be renewed in this province this year, with a total of about 34,000 or 35,000 over the next year or two, are of concern. I have asked Mr. Cosgrove, the minister reporting to CMHC, not only to look very carefully at implementing maybe a one-year hardship clause that exists at present in the AHOP agreement but to look at it on a much broader basis as a two- or three-year term. I don’t think one year is going to be sufficient to get some of these people over this hump, to get them beyond the difficult stage.

We might as well face reality today rather than doing it on a year-to-year basis. A year-to-year basis, in my opinion, based on my discussions with the federal minister, is not sufficient to give any certainty or guarantee to the property owner that he or she is really going to be able to maintain that residence for a period of years down the road.

I am suggesting to the minister that if we do not find some solution to this problem and these people continue to move out of their AHOP homes, they then come back into the rental market. Most of that pressure will be in the metropolitan areas of Ontario. Not all metropolitan areas are suffering from an insufficient supply of rental accommodation, but in the Metropolitan Toronto area and one or two others there is a shortfall in rental accommodation and will be an even further shortfall over the next 12 to 18 months.

I suggested to both Mr. MacEachen and Mr. Cosgrove that we are dealing with a double-headed monster: If they do not decide to try to compensate some way --

Mr. Speaker: This is getting to be a ministerial statement rather than an answer to a question.

Hon. Mr. Bennett: I don’t intend it to be, Mr. Speaker, but I think it’s one of the prime issues in Ontario and Canada today. I think it is deserving of a full explanation as to what the discussions were between the ministers federally and provincially.

Mr. Peterson: Particularly since he isn’t doing anything.

Hon. Mr. Bennett: The member for London Centre does just about that all the time in this House so it doesn’t make much difference.

We are suggesting to the federal minister that we look at the situation. If we do not find some source of subsidy for AHOP owners they will leave that particular area and move into the rental field. There will have to be substantial incentives or subsidies in the rental field to initiate enough construction to house them. The fact remains, then, that the federal government is on the hook for two. They are now the proud owners of an AHOP that has been left vacant by the individual and the pressure has been applied in a rental situation. That is one of the areas that on this Friday I hope we will pursue even further with Mr. Cosgrove.

Mr. Sargent: Mr. Speaker, on a point of privilege, the Minister of Agriculture and Food had a question and you did not allow a supplementary. May I have my supplementary now?

Mr. Speaker: I think we have spent enough time on this general subject.

Mr. Sargent: We didn’t have one supplementary. This is very important.

Mr. Speaker: There was a supplementary directed to the Minister of Agriculture and Food.

An hon. member: No.

Mr. Speaker: Yes, there was.

Mr. Sargent: He answered a question.

Mr. Speaker: No, it was a supplementary.

Mr. Sargent: On a point of order --

Mr. Speaker: There is nothing out of order.

Mr. Sargent: -- the minister answered a question, I asked for a supplementary and you wouldn’t allow it.

Mr. Speaker: We have spent 25 minutes and we haven’t concluded the questions from the leaders yet.

USE OF HERBICIDES

Mr. Cassidy: I have a question which I think is to the point; it is to the Minister of the Environment. Can the minister explain why he is planning ‘to allow the use of 35,000 gallons of existing stocks of the herbicide 2,4,5-T when this herbicide has been effectively banned by ministerial order for the past year and for very good reason? Has the minister had any new information to justify this change of position at this time?

Hon. Mr. Parrott: Yes. Mr. Speaker, may I say to you I was tempted to have a statement during the statement period on this. I have a very short answer which is two pages long. Will you consider that as an answer to the question or a statement?

Mr. Speaker: If it becomes unusually long, I will deduct the time from the question period.

Hon. Mr. Parrott: In answer to that question, I prepared these comments. I wish to correct any misunderstanding in regard to the herbicides 2,4,5-T and 2,4,5-TP that may have been caused by recent media stories. My office has been receiving calls this morning from citizens concerned that a dangerous chemical is about to be sprayed all over the province for mere convenience.

First of all, I would refer the honourable members and the members of the press gallery to the March 6 -- some time ago -- news release from my ministry which outlined in detail what our decision was and why it was made. I have extra copies if anyone wishes one. In an effort to relieve the concern, I would like briefly to restate our stand. When concerns were raised last year about the use of these herbicides, I decided temporarily not to issue permits for the use of this material and then to ask the technical experts to assess again the latest data.

That examination of data has taken place over the past year by the Pesticides Advisory Committee, which came to the following conclusions. This is a letter from them. In answer to the member’s question as to whether other information has come to light, indeed it has. I will quote from the letter from the chairman of the Pesticides Advisory Committee and I will be glad to give the member a copy of it. This is only a portion of the letter, but he may see it all, of course.

“It is our opinion that these additional reports and reassessments do not support the conclusion that 2,4,5-T or 2,4,5-TP constitutes a public health or environmental hazard as regulated and used in Ontario.”

However, there still remains some unanswered questions about the long-term use of these pesticides. So, in consultation with the committee, I decided that continued use of the herbicides not be allowed. That still left the considerable problem of handling existing stocks in the province, which are at present being stored in their undiluted form. Again I quote from the advisory committee’s recommendations to me in that letter I have already referred to.

“The committee is concerned over the considerable quantity of formulated product in the hands of users. The deteriorating condition of the stored containers has been brought to the committee’s attention, and it is only a matter of time before disposal or cleanup operations will be needed. It is the committee’s opinion that the issuing of permits would allow the orderly utilization of the chemicals in a safe and controlled manner.”

The ministry is following that recommendation to allow the strictest and, I would like to emphasize, very limited control in application of existing stocks under these controlled conditions only. There is no evidence to show that this constitutes either a health or an environmental risk.

Mr. Cassidy: Supplementary: Bearing in mind that 2,4,5-T contains traces of dioxin, which is one of the deadliest chemicals known to mankind, isn’t it utterly ludicrous for the minister or for his committee to say that the stuff is too dangerous to store and, therefore, we are going to spray it into the environment where plant life, wildlife and humans can be exposed to this chemical across Ontario? Isn’t that a ludicrous position for the Minister of the Environment to be saying we can’t store it, so we will expose the population to it instead?

Hon. Mr. Parrott: No, it is not at all ludicrous. As I said, these materials that are at full strength do pose a hazard as left in those containers. Under the very strict and controlled conditions that will be forced upon those who apply, after reading this letter of February 28, we think we have had strong advice from the very best people in this province to do exactly as we are suggesting for the remaining materials. I am as concerned as the member is.

It is on that basis I said we will not allow this use of the material in the future, but we do have to deal in a responsible way with the materials that we have on hand at present. I think, and they have strongly recommended, that the most efficient way of dealing with those materials is to do as we have proposed.

3 p.m.

Mr. T. P. Reid: Supplementary: In view of the fact that this material has been mishandled, particularly in northwestern Ontario, in the riding of the Minister of Northern Affairs (Mr. Bernier) and partly in mine, can the minister indicate more specifically what the guidelines will he for the use of this, and can he indicate how much of this material is in the hands of various government agencies? Will that material in the hands of government agencies, whether it be Natural Resources or Environment or whatever government agency, be stored rather than disseminated into the environment one way or the other?

Hon. Mr. Parrott: I will be pleased to supply that information. I was previously able to gather that together and I supplied it to the critic for the New Democratic Party. I will be more than pleased to supply it to the honourable member.

Again, I would like to read just one sentence from the letter that was written to me by Dr. Huntley. It said, “The so-called Alsea report on” --

Mr. Cassidy: Why don’t they just get new containers instead of spraying stuff around the province?

Mr. Speaker: Order. Just answer the original question, please.

Hon. Mr. Parrott: -- “the 2,4,5-T in Oregon was cited as the reason for an emergency cancellation of 2,4,5-T and 2,4,5-TP by EPA in the US.” He says: “It has been thoroughly discredited.”

There we have a very strong recommendation by a well-constituted, broad cross-section opinion of experts who are making the statement. It is not surprising to find the leader of the third party believes he has greater knowledge on this subject. I am afraid it isn’t so.

Ms. Bryden: Mr. Speaker, since the minister in his press release states that some questions still remain about the long-term safety of these chemicals, and it appears that the main reason for allowing the stocks to be used this year is because of the difficulties of continuing to store them, does it not make more sense for the minister to get on with his job of finding safe ways of disposing of these hazardous chemicals, as was urged on him by the resources development committee 18 months ago, and in the meantime to move the stock to secure storage space?

Mr. Speaker: The question has been asked.

Hon. Mr. Parrott: Yes, indeed, it would make a great deal of sense to get on with obtaining facilities to destroy not only these products but many other products. I tell the honourable member that one way we could do that much more quickly and much more efficiently is if she and other members of her party would take a very positive approach to the hearing process and not be unconditionally opposed, but go there in an effort to try to get treatment facilities on stream. I say we need those treatment facilities so badly in this province, and it is my unconditional effort to get them.

She knows that as well as I, but until she supports getting facilities on stream, rather than continuously objecting, not based necessarily on fact, we will suffer the consequences of not having it.

EMPLOYMENT DEVELOPMENT FUND

Mr. Haggerty: A question directed to the Ministry of Industry and Tourism: Can the minister recall that on November 2, 1979, I directed a question to him relating to the government Employment Development Fund and the serious problems of certain industries in phasing out their operations within certain municipalities in the Niagara region? I had suggested to the minister that every consideration must be given to having the area qualify for assistance under the federal DREE program. His reply was, “I certainly would support any effort to have the area included in the DREE agreement.”

The minister’s announcement of March 3 this year provided incentive grants totalling $54.5 million to the pulp and paper industry in Ontario for mill modernization at the Ontario Paper Company, Thorold, and Abitibi-Price Incorporated. Can the minister assure the assembly that with the commitment of public funds, production machinery will be designed and manufactured in Canada? Will the DREE program now apply across the whole of the Niagara region where unemployment is constantly high?

Hon. Mr. Grossman: On the latter question, the entire matter of the areas covered by DREE agreements is under constant discussion between our Treasurer (Mr. F. S. Miller) and the federal DREE officials.

Of course, we have long taken the position that to restrict it to the northern and eastern parts of this province when there are certain pockets, such as you are referring to quite properly, is to neglect the basic principle for which DREE was drafted, which is to look after regional economic disparities. I think you have to be able to identify pockets of regional problems and include that part of the province, and both the Treasurer and myself made that point very clearly to the federal government.

The pulp and paper action we took in Thorold was pursuant to a specific DREE agreement on an industry basis -- which was, of course, the pulp and paper industry. I’m pleased that in that case we have been able to really anchor that industry in that part of the province. It will bring a great number of benefits to that part of the province, of course, in terms of employment and general economic well being.

With regard to the purchase of the machinery, I don’t have the specific figure on the Ontario Paper agreement but in no case is the figure on Canadian procurement less than 80 per cent and in most cases the requirement is that 85 per cent of the equipment be purchased in Canada.

Lest the honourable members wonder about the difference between the 80 per cent and 85 per cent, we very closely monitor the situation before the contract is signed with regard to the kinds of equipment that is going to be required for each individual operation. We know precisely which equipment is available in Canada before the agreement is signed. If it is available in Canada then the agreement requires that amount of procurement occur in this country. In simple terms, they have to buy it in Canada if it is available in Canada.

So, to the extent that there might be the ability in that part of the province to supply Ontario Paper or any of the other pulp and paper plants that are being modernized and upgraded, then they would participate. I would hope the plants in the member’s region participated in our Pulp and Paper Opportunities Show that we held up in Thunder Bay.

If he has any specific questions about any specific firms in his region to make sure they do participate in this modernization program, I would be happy to process that for him and make sure they do participate.

AID TO CHRYSLER

Mr. Cooke: Mr. Speaker, I also have a question for the Minister of Industry and Tourism. It is regarding the latest layoffs that were announced at Chrysler Corporation in Windsor just before the House resumed.

I would like to ask the minister what discussions with or notification did he have from Chrysler Corporation regarding the 900 layoffs at the van plant in the elimination of any production at the engine plant?

I’d also like to ask him if be would immediately contact the federal Minister of Industry, Trade and Commerce and ask that one of the conditions of the Chrysler aid package be that the 360 engines continue in production in Windsor until the conversion takes place because the vast majority of the plant is not being used at all; and also ask that the van plant be immediately converted to small truck and small van production, instead of the projections of 1984 or 1985, so that these jobs are not lost for a number of years as Chrysler is now predicting.

Hon. Mr. Grossman: With regard to the first part of the member’s question I must inform him we had no advance notice from Chrysler of that situation. They had indicated some concern that if the market didn’t correct over some period of time there would be layoffs in those two areas, but they did not let us know, as I thought they ought to have, before those layoffs occurred.

With regard to the latter part of his question, these are both things that have been put to Chrysler as part of the overall negotiations, we would hope due in part to our pressure to the federal government. I must say the federal government has been responsive -- both the old government and the new government -- to ensure not only that new investment goes into Windsor as a result of the discussions with Chrysler but that there isn’t an unnecessarily long or large layoff period from the current situation to 1983 or 1984. Both of those things have been discussed and are continuing to be discussed.

Mr. Cooke: Supplementary: Is the minister aware that now the production for the 360 engines will be out of Windsor altogether, the only place those engines will be produced for the North American or world market will be in Mexico and that of the 90,000 360 V-8 engines produced in Mexico, 45,000 will be exported into the North American market?

3:10 p.m.

Since Chrysler Corporation didn’t even have the courtesy to talk to the minister about the layoffs, even though it comes to the governments of this country cap in hand for money, will he initiate discussions with Chrysler and tell it that if it wants him on its side to get that type of aid, it has to maintain production of at least the number of V-8 engines it was producing with the 400 employees in that engine plant?

Hon. Mr. Grossman: I can assure the honourable member that the discussions that have taken place with Chrysler have not been easy ones. As far as this government is concerned, we have dealt very strictly and very toughly. We have taken a hard line with Chrysler simply because the end result of any financial contribution we made to that company has to be to anchor jobs into that community and to keep them there so that we don’t lose a work force between now and 1983, when any retooling or new plants have been completed. We have made these and very many other points to Chrysler.

Without getting to the specifics as to whether the proposal the member put happens to be the best one in the circumstances, let me assure him we have been negotiating through the federal government on a very hard and difficult basis with Chrysler to ensure that any net layout of taxpayers’ dollars, be it by way of loan or grant, is absolutely tied to maintenance of jobs -- if anything, increase of jobs -- and net new investment into Windsor that is good, futuristic investment, not simply a patchwork of retooling into old plants.

Those are the terms under which we have been talking. I regret to say I can’t disclose very much more, but I can assure the House that is the way the discussion has been going, and those are the things we are looking for.

Mr. B. Newman: Supplementary: Will the minister, with the co-operation of the Minister of Labour (Mr. Elgie), have legislation passed that would require that industry give the government a substantial notice before any change in its plans, be it layoffs or layoffs that mean modifications in the plant, so that at least the worker knows there will be X number of days or weeks of employment and will be able to prepare or adjust himself accordingly?

Hon. Mr. Grossman: A lot of those items are customarily covered in collective agreements which vary from firm to firm. It is hoped that the collective agreements as negotiated reflect the difficulties the people in the different sectors have in relocating themselves.

I must say in all honesty that in some sectors and in some industries I have seen personally the notice period clearly doesn’t turn out to be enough. Whether that is a result of disparity in the bargaining process in terms of the sides of the bargaining process or not, I don’t know. I can assure the member -- and he may want to address a further question to the Minister of Labour on this item -- that the question of the amount of notice necessary is a matter that is always under review by this government, especially by the Ministry of Labour.

From our own standpoint, it seems that the terms currently in the provincial labour legislation roughly correspond to those in the competing jurisdictions. From the standpoint of workability, in terms of attracting new industry, I wouldn’t want to see the situation get terribly out of whack here in comparison with our competing jurisdictions.

FLOOD DISASTER RELIEF

Mr. Rowe: Mr. Speaker, I have a question of the Minister of Intergovernmental Affairs. I know the minister had the opportunity this forenoon to visit the town of Port Hope which, as I guess the whole world knows by now, was severely damaged by floods over the weekend. May I ask the minister his assessment of the situation and the conditions there? In other words, will he be declaring it a disaster area, thus making it eligible for special assistance funds?

I should also point out that there are several other communities in the immediate area which have somewhat similar, though less, damage.

Hon. Mr. Wells: I am happy to reply to that question. This morning I did tour the town of Port Hope with the mayor, Bill Wyatt. There is no question that a disaster struck last Friday when the river flooded rather suddenly. The kind of damage I saw convinced me that this certainly qualifies for the disaster relief assistance program this province has. I am going to so recommend to cabinet on Wednesday.

I have no doubt cabinet will approve that -- in fact, I told the mayor that today -- so that our Ontario disaster relief assistance program will come into play. That will assist those people, private citizens who have lost homes or where damage has been caused to their small businesses, to receive assistance.

Other ministries of the government, particularly the Ministry of Transportation and Communications, are now in touch with the municipal people there to see what can be done to assist in the areas of public damage, notably the roads, many of which are very severely damaged.

In so far as other areas are concerned, there’s no question that there has been damage in other areas around the Port Hope area and other areas of the province because of the flooding on Friday. Our staff is now assessing the damage in those other areas, and I’ll have further announcements as we get those reports back in.

Mr. Nixon: The minister says the area qualifies for assistance. Does that mean a dollar contributed for every dollar raised, or will they arrive at some other figure? Would the minister not think it is time that, instead of treating these disasters on an ad hoc basis, there be a clear understanding of the sort of support that will be available in these matters, rather than leaving it simply to the generosity and the judgement of whatever the government happens to be at that particular time?

Hon. Mr. Wells: Mr. Speaker, the initial program has always been dollar for dollar. A dollar raised will be matched by a dollar from the government. That program is the base level that is guaranteed. As my friend knows, if as a campaign progresses in an area and the ability to raise significant or needed sums of money is not possible, then we have changed our program to perhaps two to one, three to one, or four to one. This has happened over this last year, where we’ve had about 12 or 13 disasters.

As this point I don’t exactly view that as an ad hoc arrangement. I think it’s not a bad rule of thumb to work on and this is what I told the mayor there; that we are approving the one-for-one program. If it looks like something other than that is needed, we will reconsider within the next six or so weeks.

ODC LOANS

Mr. Eakins: A question to the Minister of Industry and Tourism, who is very popular today: Can the minister explain why in 1974 25 per cent of all Ontario Development Corporation loans were directed towards tourism-oriented businesses,

whereas now, after five years of steady decline, the tourism sector receives less than six cents out of every dollar of ODC loans? Can the minister give us any reason for the drastic decline that has taken place under his leadership ?

Hon. Mr. Grossman: I must remind the member that to take any particular period of years and presume it means we’re failing to support that particular sector is really quite unfair, because in the years immediately preceding this there was a great deal of money going to the tourist sector, because they were responding, in some cases, to new and special programs in those years. Of course, if you have a good program structure -- and I think we did have in those years -- then all those in need of that sort of assistance which was more or less all of those, came in and were able to expand their capacity.

There was a period of time over the ensuing years when there was some further expansion, but basically the expansion occurred in those years. What we’re seeing now is that as interest rates increased and the tourism picture charged -- that is, people were looking now for destination resorts, convention-type facilities -- it was time to structure a new program because new and different kinds of funding mechanisms were required. In other words, it is five or six years later and vast, new, different programs are required.

The old programs were structured to increase the number of units essentially, and that occurred. We got the job done, but what was happening was people were not expanding their meeting-room facilities, indoor swimming pools, indoor tennis courts, and so on. Hence, the Tourism Redevelopment Incentive Plan program has been developed as a function of the Employment Development Fund. The takedown on that has been really quite excellent. Although we haven’t announced many of them to date, I can tell you there are now somewhere more than a dozen applications which have been approved and in most cases I’m talking about half a million dollars each.

In essence, what we are seeing is a great deal of new money being reinvested into the tourist section; quite a different picture than the one the member suggests.

3:20 p.m.

Mr. Eakins: In many of the minister’s statements he speaks of going with winners, which indicates he is going to help the big industries. Why is it so difficult for the small family operation to get assistance from the Ontario Development Corporation? They’re frustrated. Why are so many of the applications received turned down; why are they not approved? Why is it so difficult for the small family operation? That’s why there are only five per cent being approved,

whereas a few years ago the figure was 25 per cent.

Hon. Mr. Grossman: I know the member is not suggesting that we approve every ODC tourist loan application. With respect, we rely a great deal on the advice of our field staff. The member has some of our field staff in his community. They try to make an honest-to-goodness assessment of the ability of the small tourist operator to use the money in a constructive way to develop his or her business.

I think the track record is quite interesting to look at. Our default rate and our arrears rate in the tourist industry are the largest of all the sectors of the ODC loan program. What does that indicate? That indicates, as opposed to the picture the member wants to create, that the fact is we are supporting a great number of tourist operations -- I mean a great number -- which simply are having difficulty meeting their ODC mortgage payments, and those are lower than they can get at the bank.

The fact is we have been giving it to people whom banks wouldn’t otherwise support. We have been giving it to firms that wouldn’t usually be categorized as the big fancy winners -- the Deerhursts, for example. We have been supporting exactly the kind of firm the member is talking about. When that small tourist operator runs into difficulty we are not pulling the plug; we are permitting him to go into arrears and supporting him.

When I talk about doing that, I want to tell the member that the arrears rate in DC tourist loans is well over 30 per cent. Of all the loans we’ve given to the tourist industry, over 30 per cent of them are now or at some time have been in arrears. We have not only carried them, we have made sure that additional financing was available to those small operators who have needed it.

Mr. T. P. Reid: How much of that is Minaki?

Hon. Mr. Grossman: None of it.

All in all, I say to the member, he can’t give me an instance where ODC has failed to support a small tourist operation or where we’ve put them under. It’s just not true.

Mr. Di Santo: Supplementary: Can the minister tell the House whether the money for Minaki Lodge comes from the Ontario Development Corporation? Can he also tell us how much it has cost the province to date and whether he has found the solution he promised several months ago?

Hon. Mr. Grossman: First, no, ODC will not be funding the new Minaki proposal. Second, for the cost to the government to date I would have to look back to get the up-to-date figures out of the public accounts, but I think they are around $8.5 million now. What was the last part of the question?

Mr. Di Santo: Whether the minister has found a solution, which he promised in November.

Hon. Mr. Grossman: I promised it by March 31. I have another week.

QUEEN STREET MENTAL HEALTH CENTRE

Mr. Breaugh: I have a question of the Minister of Health, I would like to know what the minister is doing to rectify the situation at the Queen Street Mental Health Centre, which is described by Dr. James Cray as going from crisis to crisis. I would like to know what steps he is taking to respond to the position taken by the psychiatrists there that after March 27 they will stop taking further referrals.

What would be his ministry’s response to the Ontario Psychiatric Hospitals and Hospital Schools Medical Staff Association’s stated intention that some program of withdrawal of services should be approved by the general membership and prepared for implementation by April 1?

Hon. Mr. Timbrell: Mr. Speaker, I met personally with the medical staff at the Queen Street Mental Health Centre in January -- I can’t recall the exact date -- at which time we discussed a variety of issues and I think cleared up one having to do with educational leaves. We had a very frank discussion of their concerns about their salaries and various other things, but principally about their salaries, and at that time I indicated to them I would make representation on their behalf to the Civil Service Commission and Management Board of Cabinet, which I have done.

I anticipate being able to indicate to them in the not too distant future exactly what I’ve been able to get for them by way of an increase in their incomes. As regards the matter which appeared last week, I am confident.

There have been a variety of other discussions and, in fact, another one is scheduled for tomorrow between my assistant deputy minister and representatives of the medical staff. I am sure, though, given the contractual obligations of the individual physicians, but even more importantly the ethical obligations of the physicians, that we are not going to see a dismembering of the program. I know the physicians are just as concerned, too, about retaining their status with the university as part of the teaching process and that’s a very important matter to them as well.

As regards certain other matters on the question of the number of physicians, I can tell the honourable member that in the last two or three years the number of physicians at Queen Street has grown from 42 when Lakeshore was opened and Queen Street had separate facilities and now, I believe -- I’m going from memory -- it is about 47. The number of staff has increased.

Mr. Breaugh: A supplementary: It is then clear to the minister that as of March 27, and correct me if I’m wrong, they will cease to take referrals, and that perhaps by April 1 we may have the first doctors’ strike in Ontario?

Hon. Mr. Timbrell: Mr. Speaker, that is not at all clear. I’m confident that will be averted.

DURHAM REGIONAL ENVIRONMENTAL HEARING

Mr. Ashe: I have a question of the Minister of the Environment. As the minister knows, the Environmental Assessment Board has started deliberations in the town of Ajax to consider a proposal by the regional municipality of Durham to establish a liquid industrial waste plant in the town of Ajax.

The principal group in opposition, namely the Ajax Citizens Together, or ACT as it is better known, is very concerned. It has expressed concern to me relating to an order issued by the minister under

section 85 of the Environmental Assessment Act on Wednesday, March 12. Can the minister justify or rationalize the reasons for the issuing of that order?

Hon. Mr. Parrott: Yes, I think quite readily so, Mr. Speaker. It was simply to clarify and make it well known exactly what the situation was. In fact, I have a copy of the order and I think if I read a couple of the paragraphs it would state it very well. There are a bunch of “whereases” but I’ll try to summarize them. It’s a project by the municipality to treat and dispose of liquid industrial waste. I think the member for Beaches-Woodbine (Ms. Bryden) would be able to suggest that we are trying to get these facilities on stream, and other areas are as well.

It’s the opinion of the proponent, in that case the municipality, that it is not subject to the Environmental Assessment Act. The region has made an application to the director for a certificate of approval under the Environmental Protection Act and may be making an application for approval under

section 42 of the Ontario Water Resources Act.

Whereas the director has required the Environmental Assessment Board to hold a hearing -- and that’s rather an important part -- and

whereas I was also advised that the question had been raised as to who the proponents were so we could put all that into perspective, it is my opinion that it was desirable to remove any doubts. Based on that, and again this is readily available for any one who wishes it, we were also asked by the legal counsel of the region to remove any doubts. It was for those variety of reasons that we thought it was wise to issue this formal statement.

I think nearly everyone who had previous knowledge was well aware of what was proceeding, but this put all of those things into perspective in a very regular way. It added nothing new; it took nothing away.

Mr. Gaunt: A supplementary: With respect to the Ajax liquid industrial treatment plant, the minister made some comment on W5 on March 9, in which he indicated that the plant was going there regardless. Having said that, was he trying to dictate the recommendations of the Environmental Assessment Board or was he trying to in any way threaten the citizens of Ajax?

3:30 p.m.

Hon. Mr. Parrott: I am really pleased that question has been asked. It gives me an excellent opportunity to set the record very straight. We have looked at that several times and we have listened to it several times. The member won’t find those are my words. Let’s be very clear on that.

I made it very plain, contrary to what the member for Beaches-Woodbine suggested earlier in this question period, that I wanted treatment facilities in this province. I made it very plain that we believed that was a good treatment facility. I am sorry the member wasn’t there for all of the interview because if he had been, I think he would have supported much of what was said.

I also made it very clear that it is an independent board and that it cannot and will not take direction from me. I went the people of this province to know that treatment facilities for liquid industrial wastes, according to the testimony of the member himself before the standing committee, have now become a crisis. I agree with him. I will do anything I can do to get those treatment facilities on line, provided that full protection is given to the citizens. That means giving them all the information. That means the board acts in an independent fashion, independent of any of my wishes.

That is its mandate and it knows it, and I hope the member knows it. If it does that, then I want to support with every ounce of my energy getting some treatment facilities so that we can solve what is one of the biggest problems.

MOTIONS

COMMITTEE SITTING

Hon. Mr. Wells moved that the select committee on Ontario Hydro affairs be authorized to meet Thursday, March 27, 1980, and Thursday, April 3, 1980.

Motion agreed to.

INTRODUCTION OF BILLS

ONTARIO WASTE DISPOSAL AND RECLAMATION COMMISSION ACT

Mr. B. Newman moved first reading of Bill 16,

An Act to establish the Ontario Waste Disposal and Reclamation Commission.

Motion agreed to.

RENT DEPOSITS ACT

Mr. Epp moved first reading of Bill 17,

An Act respecting Rent Deposits in Ontario.

Motion agreed to.

Mr. Epp: The purpose of this bill is to require that interest on rent deposits be paid at the rate of 12 per cent per year.

AGRICULTURAL INVESTMENT DISCLOSURE ACT

Mr. Riddell moved first reading of Bill 18,

An Act to provide for Disclosure of Non-Resident Investment in Agricultural Land in Ontario.

Motion agreed to.

Mr. Riddell: The purpose of this bill is to establish a means of ascertaining the nature arid extent of nonresident ownership of agricultural land in Ontario. The bill requires every nonresident person, as defined in the act, to submit a report to the Minister of Agriculture and Food concerning each purchase of agricultural land. The bill also requires land registrars in Ontario to inform the minister about every conveyance of agricultural land registered by the land registrar so that there is an affidavit indicating that the transferee is a nonresident person.

The minister must report to the Legislative Assembly on an annual basis concerning the nature and extent of nonresident ownership of agricultural land, and the report is then referred to a standing committee of the assembly for consideration.

FAIR PRICING ACT

Mr. Swart moved first reading of Bill 19,

An Act to provide for the Fair Pricing of Products and Services sold to Consumers in Ontario.

Motion agreed to.

Mr. Swart: The purpose of this bill is to require a fair price for every product and service sold to consumers in Ontario. Where a retail seller charges an unfair price, the bill sets out procedures and remedies for ensuring compliance with the fair pricing requirements by giving the Ministry of Consumer and Commercial Relations the power to prevent increases or roll back prices. The bill provides for an appeal of fair pricing orders to the Commercial Registration Appeal Tribunal.

PUBLIC ADVOCATE ACT

Mr. Swart moved first reading of Bill 20,

An Act to provide for a Public Advocate in Ontario.

Motion agreed to.

Mr. Swart: The purpose of this bill is to provide for a public advocate in Ontario. The function of the public advocate is to represent the public interest in Ontario at rate hearings before tribunals and commissions. The public advocate is also provided with the authority to intervene in hearings at which environmental matters or a broad general interest may be affected as a result of the hearings. The bill provides for the public advocate to be appointed by the Lieutenant Governor in Council on the address of the Legislative Assembly of Ontario, and the public advocate is required to report annually on the affairs of his office to the Speaker.

The bill also provides authority for the Lieutenant Governor in Council to fix a levy to be paid by corporations that make application for a rate increase for the purpose of paying the expenses incurred by the public advocate in the carrying out of his functions and duties.

3:40 p.m.

AUTOMOBILE INSURANCE RATE CONTROL ACT

Mr. Swart moved first reading of Bill 21,

An Act to establish the Automobile Insurance Rate Control Board.

Motion agreed to.

Mr. Swart: Mr. Speaker, the bill establishes an Automobile Insurance Rate Control Board that would have the power to approve and fix rates and to conduct public hearings dealing with rate increases.

CONSUMER PROTECTION AMENDMENT ACT

Mr. Swart moved first reading of Bill 22,

An Act to amend the Consumer Protection Act.

Motion agreed to.

Mr. Swart: Mr. Speaker, the purpose of the bill is to require that every product offered for sale bearing a product code must also be marked with its purchase price. The bill prohibits increases in the purchase price of a product above the price initially marked on it by the retailer. The bill also provides if a price marked on the product differs from the price associated with a product code, the purchase price of the product is the lower of the two prices.

ORDERS OF THE DAY

THRONE SPEECH DEBATE (CONTINUED)

Resumption of the adjourned debate on the motion for an address in reply to the speech of the Honourable the Lieutenant Governor at the opening of the session.

Mr. S. Smith: Mr. Speaker, in replying to the speech from the throne, I want to say on behalf of the Liberal Party and the official opposition that we believe the 1980s can be a time of unprecedented prosperity for Ontario. We believe that, unlike most places on the globe, Ontario has a very rare combination of highly educated people, of industrial experience and sophistication, of food land capable of producing at extremely high levels, of resources that are the envy of most of the world -- and we have all of these together just as we are entering a decade when the world will require high technology goods.

The world will require those goods that deal specifically with the extraction and the husbanding of resources, those goods that deal specifically with the creation and the transmission of energy, those goods that deal specifically with the protection of our environment, with the making of our planet habitable for the increasing millions of people who are joining the planet year by year. The world will require all these things and it is unlikely the world will be able to obtain all these technologies, all this knowledge, all these methodologies anywhere except in the technologically advanced areas of the world, which are represented by a small fraction of the globe.

We in Ontario are extremely fortunate to be in a position where we can provide for the world the technology, the thinking, the research, the farsightedness. We can be an example to the world in the way in which we conduct ourselves, and we can lead the world in a good many of these new areas.

I have a vision of Ontario as a place where we use our young people productively, where they are given education, where they are given the knowledge of all their forebears and of all the science that has gone before and where, with the benefit of our own resources, with the benefit of being part of a vast and great country, with the benefit of our own productive land and the benefit of our own stable and reasonable background, these people can produce, can invent, can discover, can provide for the whole world in a way that perhaps no other place on earth can hope to do.

We have not been ravaged by war and by factionalism the way so many countries in Europe have been. We have not had the enormous racial problems, the enormous problems in our cities, which have existed in other places including our good neighbours to the south. We are in a position that is probably the most fortunate on this earth, and I speak for all my fellow members of this party and of this official opposition -- it is to be sure we do not waste these opportunities in the 1980s the way these opportunities were squandered in the 1970s.

The fact is that during the decade of the 1970s, despite unparalleled opportunities in world markets, despite an explosion of wants and needs for manufacturer goods throughout the world, Ontario fell from being a leading manufacturer, from being poised to take advantage of this explosion of new markets, to being hobbled, to being crippled, to being virtually unable to defend itself in international competition as a centre for Canada’s manufacturing. Indeed, in Ontario we actually dragged down Canada during the 1970s because we were the manufacturing heartland and we failed to deliver.

I ask you to look, Mr. Speaker, at what has happened as Japan, as Germany, as Sweden, as the United States took advantage of the new markets in manufactured goods. We failed not only to penetrate those markets, but also we allowed other countries to penetrate our own domestic market to an extent unparalleled in human history in any advanced nation and to an extent that is now nowhere approached anywhere on the globe.

During that time that Canada’s domestic market fell to foreigners, when our own industries were incapable of taking advantage of the opportunities that presented themselves elsewhere, we found Ontario in a position of decline vis-a-vis the rest of this country. We found Ontario now, during the 1970s, ranked 10th and last among all the provinces in average annual percentage growth, per capita gross provincial product, per capita income, per capita disposable income and residential construction.

These are all terms that for the average citizen may be highly technical. I can go into numbers and we can presumably find these numbers printed on the back pages of a newspaper somewhere beside the crossword puzzle, but in human terms this means we have 323,000 unemployed people in Ontario, in this place of prosperity, this place that should be leading the country, not last in the growth rate in this country.

It means we have hundreds of thousands of young people who are at present working, but working far below the capacity for which they were prepared, for which they were educated and the level to which they have every right to aspire. It is not that these young people want somehow to be terribly affluent or want to take in far more than they deserve. They want to contribute and they can’t contribute because we still follow the old dictums, which failed us in the 1970s but were successful in the 1960s, of basically sending out our resources and letting other people manufacture.

3:50 p.m.

We have seen this happen through the 1970s. Some will say that reciting what happened in the 1970s is a picture of gloom and doom, a prophecy of negativism. Far from it; no one can be more optimistic than I about the future of Ontario. We have the resources, we have the young people and we have the technology. We lack the leadership; that’s what the government has not provided throughout the 1970s.

Mr. Speaker, it’s interesting that when you note the fact, and so many newspapers have now noted it, that Ontario has been in a position of steady decline throughout the 1970s, you are told: “It is all relative. It is only because we do not have any oil in Ontario.” I ask you to consider that in Germany there is no oil, in Switzerland there is no oil, in Sweden there has been precious little oil, in Japan there is no oil.

Not only that, but those countries have had to import their food, which we, thank heaven, can produce for ourselves, they have had to import the raw resources, which we fortunately can produce for ourselves, and they have out manufactured us all the way around the block for every year during the 1970s.

It’s because of the fact that in Ontario the government, which has now been in for some 37 years, has used a method that allows it to be full of largess and generosity and buy votes everywhere by building all over the place using the money it got from foreign-owned companies here. It can point to the fact that these branch plants were being opened all over Ontario. It paved the roads with the money we got by shipping out our resources and failed to recognize that when the crunch would come it would be only the Canadian-owned manufacturing enterprises that would be willing to get out there to compete in the world.

All we are stuck with now with our branch plants is enterprises that are not internationally competitive and that furthermore are obligated to send across the border their dividends, interest payments, service charges and special inter-company transfers -- all of which means our country has a chronic drain on its balance of payments and all of which is responsible for the fact that we now find ourselves against the wall, we now find ourselves uncompetitive in the world.

We find ourselves in a position where the government is resorting to giving out to prosperous corporations the taxpayers’ money that should better be used for health, education and social services. We are having to give it out, to hand it out to huge, prosperous corporations because of the fact that the business climate in Ontario is so diminished in terms of what it could have been and what it used to be.

I say that Ontario has squandered opportunities that are unparalleled. The reason we have squandered those opportunities is that you can’t expect a branch plant to be going out to do the research and development to develop the new products and new technologies, to look for new opportunities in international markets, when in fact its mandate is simply to feed the domestic market. It’s the home company that is busy doing the research and development. If we had done even close to our share of research and development over the last couple of decades we would be a place of unparalleled prosperity in the world today.

Hon. Mr. Grossman: Too bad you didn’t give Trudeau that line.

Mr. S. Smith: I hear now from the minister a little comment. He is going to play the old game of saying, “It was all the fault of the feds.” We are familiar with that game.

Interjections.

Mr. Deputy Speaker: Order.

Mr. S. Smith: If Ontario, as the centre and heartland of manufacture, could not stand up for itself during this time and demand a chance in that policy and demand a Canadianization of our manufacturing industry, who will speak for us if we don’t speak for ourselves?

But hark; I want the House to know exactly what the minister has been doing to change this representation by branch plants, to change the situation in which we are too dependent upon foreign-owned companies that won’t do their research and development here. He has put out a glossy brochure at $9.50 each in which he says: “You are free to operate as a public company, a private company or a branch plant. No foreign exchange restrictions; you are free to deploy the money you make here as you see fit. Profits, dividends, royalties may be remitted at will.”

He goes on to point out what a great place Ontario is because our wages are low. He is so proud of this accomplishment. Let me tell the House what that accomplishment is. Do you know, Mr. Speaker, that real family income in constant 1971 dollars in Ontario declined from $13,518 in 1976 to $12,916 in 1978? He is proud of that; he advertises that to the world, to invite more branch plants in here.

Hon. Mr. Grossman: Do the members behind you want branch plants? Ask them.

Mr. Deputy Speaker: Order, order.

Mr. S. Smith: I realize it is hard for the minister to have to listen to some of this and to recognize the way he has continued the very same policy that got us into this problem. By putting out this glossy “Ontario is for sale” brochure, saying how we can get everybody through the Foreign Investment Review Agency as easily as possible and not to worry about FIRA at all, it is the same old thing over and over again. Unfortunately, it is all too successful.

I had a visit from the consul of West Germany, and he was kind enough to say that I would be happy to know -- partly in response, I am sure, to the minister’s urging -- that we were now going to be the recipients of a branch plant in which a German engineering company was going to do a certain amount of assembly -- lower technology stuff, you understand -- here in Ontario, and wasn’t I delighted to hear this. I said: “How did this happen? Why is it you are doing this?” He said: “Well, after all, wages in our country and our standard of living have gone up quite a bit in recent years; we are very prosperous now.

But your wages, by comparison, are very low, So we are farming out some of the lower-technology items to Ontario so that you can produce them here and put these things together in an assembly form, much as Japan has farmed out certain operations to Korea and the Philippines over the years and, I suppose, if you go back far enough, as we used to do to Japan.”

Maybe this is the industrial strategy the Premier (Mr. Davis) has in mind, that we will somehow over the next 35 years improve ourselves. I said to the gentleman -- and he was a very fine gentleman; I say nothing against him: “You will appreciate it, sir, if I am not terribly thrilled by this news. I remember your country at the end of the war was in total devastation and ruin.

We, never touched by war, with all the technology that the western world has ever developed, with our enormous investment in education, which is the highest investment per capita in the world, now have to be reliant upon you to come and farm out low technology to us? Is this what things have come to?” He was a little surprised by this response.

Hon. Mr. Drea: You didn’t say it like that.

Mr. S. Smith: No. I didn’t say it like that; I didn’t shout at him, that’s correct. I was polite to him, but I did point out to him that this is what things have come to and that I was very dismayed. Instead of smiling, the members opposite, perhaps, should also be a little dismayed that this is what things have now come to in Ontario.

4 p.m.

Hon. Mr. Grossman: What riding is that in?

Mr. Deputy Sneaker: Order.

Mr. S. Smith: The Minister of Industry and Tourism can be forgiven for his compulsion to interfere from time to time when he hears what a mess his colleagues have made of this situation. Coming fresh from his hardball triumph over the Toronto Island homes, he can be forgiven for being rather full of himself at this moment. A victory like that doesn’t happen every day. after all, and he is undoubtedly terribly proud of that accomplishment.

Hon. Mr. Grossman: We’ll talk about what you’re doing for Hamilton one day.

Mr. Deputy Speaker: Order.

Mr. S. Smith: I’m not so much dismayed by the fact that the minister insists on interrupting as I am totally dismayed by recognizing that he truly believes Ontario’s future depends on more foreign investment in branch plants. When I see that, I am genuinely deeply saddened. I tell the minister that most sincerely. I thought he knew better than that.

Ontario’s rate of increase in value added per capita in manufacturing was 10th and last in Canada. One would think they would have learned from it. What have they done? They decided to give a recent grant -- $15 million -- from Ontario to Abitibi-Price Incorporated, a pulp and paper company that made $114 million in profits last year. With the new production machinery and so on that the company will bring in, they will actually lose 240 jobs over the next five years.

But I want the House to know as well that no sooner did Abitibi-Price get the $15 million from Ontario than it went out and signed a contract with Finland to buy $20 million worth of production paper-machinery equipment. Are they just going to continue to bury their heads in the sand and continue to give out public funds for machinery that’s not being bought here?

The minister says they couldn’t get the equipment here in Canada. All right; let the minister explain to this House how it is that Finland is in the position to put out pulp and paper equipment when Ontario is one of the world leaders in the production of pulp and paper. Why are they able to produce pulp and paper equipment and we don’t have pulp and paper equipment?

Why doesn’t the minister have his assistant come out, as he did at a seminar the other day when the minister didn’t want to attend, and announce that it’s because the domestic market in Finland is larger, I suppose, than Canada’s? He said the reason Germans produced equipment that Canadians didn’t produce was that they had a large domestic market. Well, what about Finland? Is their domestic market larger than Canada’s? How is Finland producing pulp and paper equipment that we in Ontario are incapable of producing?

Hon. Mr. Grossman: We’re providing 85 per cent --

Mr. S. Smith: Tell it to the judge, my friend. Thirty-seven years and we are now no longer in the business of producing pulp and paper equipment? Come on, what’s happened to Ontario?

lnterjections.

Mr. Deputy Speaker: Order.

Mr. Breithaupt: The people will judge your programs.

Mr. Deputy Speaker: Would the Minister of Industry and Tourism please contain himself for a short while.

Mr. S. Smith: Actually, if he were to be self-contained, it would be following the fact he is a self-made man. Unfortunately, he hasn’t finished the job.

An hon. member: A fairly small container is all he’ll need.

Hon. Mr. Grossman: I need a good shrink.

Mr. S. Smith: I think he has already been shrunk. That’s the last thing I would ask for in his position. Could I hire the minister as a straight man, by any chance? Of course, straight is one of the things he hasn’t been called.

I would like to deal with another matter facing Ontario. The interest rates facing the people of Ontario at this time have the potential to be absolutely devastating to several segments of our society, but especially to small-town Ontario. Let me explain this.

The prosperity of the small towns in our province depends virtually entirely on the prosperity of the surrounding farms and also on the prosperity of the small businesses that make up the bulk of the economy in small-town Ontario. I point out that high interest rates are a tremendous burden on farmers who have borrowed so much money on demand loans from the bank and are now forced to pay huge interest rates which are virtually wiping out farm income and rendering a good many of the farmers I have spoken to very susceptible to bankruptcy in the very near future, if something is not done about it.

In addition to that, the small businesses, generally speaking, suffer much more from high interest rates than do the large industries. There are many reasons for that. In some instances small businesses have a higher ratio of debt to equity. Furthermore, they usually have to pay higher interest rates. When money gets tight, their credit rating is not as good, and in addition to that they don’t usually pay as much in the way of taxes. Consequently, their after-tax interest rate is effectively much higher than it is for the large industries.

A surge in interest rates is far more harmful -- it’s devastating -- to small business, where the bulk of the people happen to be employed. It’s harmful to large industry as well, but not as harmful as to small business. This poses the gravest threat to small-town Ontario. This plus the energy problem pose the gravest threat to small-town Ontario in the lifetime of any of the members here. Therefore, it’s vital that we take some action to protect the farm segment and the small-business segment of our society.

In addition to that, thousands of people are facing the prospect of having to walk away from their homes and go into a rental market which, as the government well knows, is already very crowded. This is absolutely the opposite direction from the way in which we want our society to move.

Surely we believe that people should be moved towards having more stake in society, not towards having less stake, not towards losing the stake they’ve been developing. We cannot sit and wait for these people to be out of their homes and then ask whether there is something we should have been able to do about the interest rate.

I happen to feel there are some federal matters with regard to interest rates, and I would like to see the federal government act on these. I would like to see our interest rates not follow the American rate quite so closely as it does. In fact, when I asked the Treasurer (Mr. F. S. Miller) to make that precise intervention when the previous federal government was raising interest rates in lock-step with the Americans, he refused to do so. Now there is a government of a different colour he feels free to make that intervention. That’s fine. We know he’s playing politics, but it’s a reasonable intervention that should have been made earlier.

4:10 p.m.

There is more the federal government should do. The federal government should take the primary responsibility for helping the people in the Assisted Home Ownership Program. These people are in the most acute difficulty. They have to be assisted as rapidly as possible, and that is really a federal obligation. I have every reason to hope and to believe that the federal people will accept that obligation. If they don’t, we must; but I believe that they shall.

There are, however, a good many people in the middle class and a good many people in the lower-middle class who have worked, saved, struggled and now have a home of their own in which to raise their families. They have high mortgage payments to meet. A four per cent or five per cent increase in the rate of interest in their mortgage payments will be devastating to them. It’s surely the responsibility of Ontario to act if the federal government fails to act.

By all means, we must exhort the federal government to act, and we do so. But it surely is the responsibility of Ontario, just as the Premier promised back in 1975, to help our citizens maintain the stake in the community they have managed to get hold of with the tips of their fingernails, Surely we don’t want these people dispossessed of their homes. Surely we in Ontario have an obligation to cushion the blow of high interest rates, a blow forced on us to some extent by the actions of the American government and the situation of the American economy, but a blow we can afford to cushion and we must cushion in Ontario.

I see there are some ministers who are here. The Premier, regrettably, is not. The ministers who are here I ask to use their influence in cabinet to see to it that if the federal government does not act, at the very least Ontario will do something to cushion the blow for the farm segment, for the small businesses and for the home owners in Ontario.

Hon. Mr. Henderson: The Leader of the Opposition is in agreement that the feds should act then.

Mr. S. Smith: Yes, indeed. I say to the Minister of Agriculture and Food, as I’ve just done, that the feds should act. But if they don’t, I hope the minister is in agreement with me that Ontario then must act. Does he agree? The minister’s head has suddenly stopped nodding. What’s happened to it? It’s rigid.

Hon. Mr. Henderson: This government has cared for the people of Ontario for many years and will continue doing so.

Mr. S. Smith: Oh, I see. Apparently he doesn’t agree. The government of Ontario apparently does not agree to take action to cushion the interest rates. But I say that Her Majesty’s loyal opposition is prepared in the next little while to make public a very detailed plan to cushion the blow on the farm segment, on the small-business segment and on the home owners of Ontario if the federal government fails to act. We’re prepared to put that forward and we hope and earnestly ask of this government that it will accept the suggestions and will cushion the blow for Ontarians before small-town life is devastated and before home owners are forced to give up all they have striven for over the years.

The problems of inflation are enormous.

Interjections.

Mr. S. Smith: I can see the leader of the New Democratic Party is becoming restless. I thank him for the courtesy of being here for the speech. I say that sincerely. I assure him I will have one or two comments of great interest to him as time goes by. I ask him merely to be patient because I’m saving the best for the last.

Mr. Cassidy: I don’t think the government is trembling and neither are we.

Mr. S. Smith: The government doesn’t have to tremble as long as it has an ally in all of those NDP members to avoid an election. It’s just amazing. However, more of that anon; let’s deal with the matters at hand.

We are always talking about the ravages of inflation and yet the citizens of Ontario have been visited with a good many increases in the cost of living which we owe their origin to no one else other than the Conservative government of Ontario; not to the world situation, not to crop failures in Kenya or Brazil, not to anything but the decisions taken by this government.

Look at hydro rates, for instance, the rural hydro rates in Ontario which are the highest of any province west of New Brunswick. Why should that be? Why should it be that we have our rural people paying hydro rates that are simply grossly unfair. That is the only possible way to describe it. Why do we have our consumers of hydro having to face increases that average 16.4 per cent in 1980?

That is away above the rate of inflation and that is strictly due to decisions taken by this government, to the waste of money in the heavy water plant, to the waste of money in not mothballing the heavy water plant on time, to the waste of money in the Clark Keith generating station, to the waste of money in every aspect of Ontario Hydro’s planning and performance.

Much as they now take a lemon and try to make lemonade out of it by saying how wonderful it is that we have extra electricity, given the ayatollah’s being in Iran -- although they still haven’t told us how we are going to use it all, but presumably there will be some way that we can substitute for Iran’s oil -- they have to recognize that what they have really done is put a tremendous burden on the householders, on the ordinary citizens of Ontario, who have had to pay through the nose for Hydro’s bad planning and for this government’s mismanagement.

Look at property taxes, Mr Speaker: regional government which resulted in a huge increase in property taxes. There was an experiment for you. What has happened to that lately? We haven’t seen any regional government in London. What happened to that? We haven’t seen any in Chatham. Of course, we never did, did we? What happened to regional government lately? It is amazing that John White and Darcy McKeough have both managed to be in and out of politics, inflict regional government on virtually everybody else, but their own ridings escaped. It is one of the amazing feats of history.

Look at the property taxes. Look at the way in which the government has deliberately reduced its support for education so that whereby it previously supported 60 per cent of the cost of education, it has been continually withdrawing, moving that level down now to 50 per cent and deliberately putting the burden on the property tax payers in Ontario.

Hon. Mr. Bernier: What’s your position?

Mr. S. Smith: I am asked by the governor of northern Ontario what our position is. I say to the governor that our position is to return to the 60 per cent level of funding. Our position is not to burden the property taxpayers of this province. Our position, unlike the government’s, is to favour the ownership of property. We actually believe in it, believe it or not. We actually want people to be able to afford their homes.

What a cruel joke it has been, a restraint program of the government that is no restraint program at all but merely a shift of the burden on to the property taxpayers of Toronto, of Hamilton, of Windsor, of Ottawa, of northern Ontario, of every part of Ontario. A cruel joke played on the taxpayers because they won’t know that it is the government’s actions that did it. They will think it was their local council and get mad at some alderman or school trustee and they won’t know the government did it so they can avoid taking the heat.

4:20 p.m.

That is the way the government plays the game; it is clever but it is not a very honest way to deal with the people of Ontario. This government is very fortunate in one respect: For some reason, which should be analysed at some later date, the people of Ontario take very little interest in provincial politics. It is a very interesting fact. I have spoken of the provincial House as the American Hockey League of politics in the sense that the National Hockey League gets the attention and we are somehow ignored.

Today the Minister of Housing (Mr. Bennett) stood up and pretty well admitted a waste of almost $300 million in one colossally stupid program of buying up land. I won’t even talk of the waste of human resources, the throwing of people out of their homes, the destruction of their homes, the destruction of a sense of community. I won’t talk of any of that -- just about the money itself.

Do members remember the refit of the Bonaventure? It is held up as a colossal instance of government waste and mismanagement. What did it cost; $15 million or something like that? We could buy the whole navy for the amount of money that has been wasted on Seaton alone. It’s incredible. Yet the average citizen of Ontario will not take the time to familiarize himself with the Seaton fiasco any more than he did with the hundreds of millions lost in South Cayuga or any other similar fiasco.

Somehow or other, if it is federal -- if it’s the Bonaventure aircraft carrier; if it’s a horse in Camp Borden or something -- it somehow catches on. It becomes something that is spoken of on television. It somehow becomes something people are interested in, an example of waste.

But if it is a waste of hundreds of millions of dollars in Ontario -- a waste of half a billion dollars in land banking; a waste of another half a billion dollars in Hydro -- somehow or other it makes the headlines for one day and kind of disappears. I admit to being baffled by this.

For the benefit of those who may think my sense of frustration in this regard is the reason we are seeking an election, let me assure them it is not. But I do admit to a certain sense of frustration in dealing with an image across the way of good managers when the story is the precise opposite. Never has there been mismanagement on such a colossal scale anywhere in North America. I doubt anywhere in the world has there been mismanagement of this kind. Yet they maintain this facade of being in full charge and that everything is just fine; there’s a steady hand at the helm and all that.

Well, the ship is going to icebergs and, as I said before, the steady hand has rigor mortis. None the less, they somehow get away with maintaining this particular outlook and imagery. It is totally beyond me.

But look at that colossal waste. Any board of directors in any company with shares on the stock exchange which was responsible for a waste like Seaton or South Cayuga would be forced by the shareholders to resign. We intend to force exactly that to happen.

We have an interesting situation emerging with regard to equalization payments. Ontario, under the existing formula, is owed about half a billion dollars in equalization payments. Ontario, for some reason best known to itself, refuses to accept this money. Somehow or other, the pride of Ontario would be hurt. The government would have to admit that under its stewardship Ontario has not kept pace with the opportunities the world has presented to it.

As Alberta improved, Ontario could have improved as well by making some of the equipment, by making sure we encouraged the federal government to demand access for Ontario goods into international markets along with our oil or gas. But none of this happened; Ontario sat quietly, twiddled its thumbs and lost its position.

Now it doesn’t want to accept half a billion dollars in equalization payments. This is very mysteri