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January 27, 1983

32nd Parliament, 2nd Session

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Hansard Transcripts

COMMITTEE PROCEEDINGS

CORRECTION OF NEWSPAPER REPORT

TABLING OF REGISTRAR'S ANNUAL REPORT

CLERK OF THE HOUSE

STATEMENTS BY THE MINISTRY

BUILDING REGULATIONS

TRANSFER OF CROWN TRUST ASSETS

ORAL QUESTIONS

TRANSFER OF CROWN TRUST ASSETS

ANNOUNCEMENT OF MINISTERIAL POLICY

PROTECTION OF CADILLAC FAIRVIEW TENANTS

CLOSING OF CCM PLANT

CASE OF ADY GANDOUR

INVESTIGATION OF CHILD ABUSE CASE

TAKEOVER OF TRUST COMPANIES

AMI (CANADA) LTD.

CORRECTION OF LEGISLATIVE BUILDING DISPLAY

REPORT

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

MOTIONS

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

ORDERS OF THE DAY

CROWN TRUST COMPANY ACT

MOTION

HOUSE SITTING

ROYAL ASSENT

CROWN TRUST COMPANY ACT (CONCLUDED)

MOTION

COMMITTEE SITTINGS

BUSINESS OF THE HOUSE

The House met at 2 p.m.

Prayers.

COMMITTEE PROCEEDINGS

Mr. Conway: Mr. Speaker, I rise to raise what I believe is a point of privilege and a matter of great import to this Legislative Assembly. To set the context for my point of privilege, I want to read a brief

section from

chapter 10 of Erskine May's Parliamentary Practice, 19th edition. From that chapter, I read on page 136, "Acts or Conduct Constituting Breach of Privilege or Contempt," and I quote directly:

"It may be stated generally that any act or omission which obstructs or impedes either House of Parliament in the performance of its functions, or which obstructs or impedes any member or officer of such House in the discharge of his duty, or which has a tendency, directly or indirectly, to produce such results, may be treated as a contempt."

The fifth edition of Beauchesne's Rules and Forms of the House of Commons of Canada,

chapter 2, the "Privilege" chapter, page 11, says on this point of privilege:

"The distinctive mark of a privilege is its ancillary character. The privileges of Parliament are rights which are 'absolutely necessary for the due execution of its powers.' They are enjoyed by individual members, because the House cannot perform its functions without unimpeded use of the services of its members, and by each House for the protection of its members and the vindication of its own authority and dignity."

He was referring as well to Erskine May.

My point of privilege in this connection relates to the fact that yesterday, as a substituting member on this assembly's standing committee on administration of justice, I sat on a reference initiated by the member for Riverdale (Mr. Renwick).

Clearly the main import of the reference was a desire for this assembly, through that committee, to look at the general area of loans and trusts in this province through a review of the 1979 report of the registrar of loan and trust corporations; and from the intentions given by the member for Riverdale, it was to be hoped that with the concurrence of the committee there would be a broader look at the specific difficulties that are currently before us as a result of the Crown, Greymac and Seaway business.

Yesterday in that committee, the member for Carleton (Mr. Mitchell), the parliamentary assistant to the Minister of Consumer and Commercial Relations (Mr. Elgie) -- I reiterate, he is not only the member for Carleton but also the man who serves as parliamentary assistant to the minister in question -- put a motion that occupied the committee for almost three and a half hours. The import of that motion was basically that the committee ought not to proceed because the discussion might very well prejudice the public interest generally and the interest of the depositors of the various trust companies.

At the very time the parliamentary assistant was moving forward with that motion in a committee of this assembly, we now have learned, his superior, the Minister of Consumer and Commercial Relations, was preparing to depart, having given to all honourable members on many occasions inside and outside of this chamber the assurance that as important, relevant information in this multifaceted business became firm, he would release it to us here in this House.

The minister invited our trust, and on most occasions we have tried to reciprocate in a generous way.

Having been invited to extend trust to him in that respect, those of us who sat in that committee and were faced with this resolution were shocked, and I personally was upset and outraged, to learn that while the parliamentary assistant was moving that motion, the minister was preparing to depart from these precincts to go downtown to the editorial offices of the Toronto Star and the Globe and Mail to reveal information of a most sensitive and relevant kind, which clearly impacts upon our rights and privileges as members of this assembly, members who are charged this very day to deal with an unprecedented bill, Bill 215,

An Act respecting Crown Trust Company.

We read that the minister and his cohort, Messrs. Biddell and Macdonald, went to the editorial offices of Toronto newspapers in the interest of setting the record straight, clearly in the interest of setting government policy, in the interest of setting clearly the dictates of poetic justice, apparently in the interest of manipulating the media, and gave sensitive, relevant and extraordinarily important information theretofore denied this assembly and all members.

2:10 p.m.

Apparently he gave that information willingly to those newspapers, at his own invitation, and I am very upset in so far as I trusted this minister. I trusted him routinely. I believed him when he said he would take all honourable members into his confidence on each and every one of these occasions as soon as the information we requested was available to him.

I feel more than a little upset and very handcuffed now, as I try today to deal with this extraordinary legislation, Bill 215, to find out that the import of this bill apparently was much more talked about in some editorial offices than it has been in this assembly.

I want to conclude by inviting you, Mr. Speaker, to look very seriously upon this. As individual members, all of us have been through a rather exceptional set of circumstances with respect to this business of trust and loan companies. I reiterate that we were regularly invited to place our trust in the minister; we trusted; I trusted.

I feel let down. I feel my privileges and my rights have been abused and abrogated. I wanted to stand in my place today, not only on my own account but also, I hope, on the account of all members here present to register our strongest and most basic parliamentary objection to what has transpired in the past 24 hours.

Mr. Renwick: Mr. Speaker, on behalf of our party, I want to support the essential thrust of the remarks of the member for Renfrew North (Mr. Conway). I am rather concerned, however, that the essential thrust of the argument has been destroyed somewhat by the moral indignation that member must bring to bear, considering the Achilles' heel from which he operates because of the private but nonconfidential meeting -- whatever that can be said to be -- they had with a representative of the minister with respect to the disclosure of information. In the matters related to fundamental questions --

Hon. Mr. Davis: His leader heard it all.

Mr. Peterson: That is an absolute falsehood.

Interjections.

Mr. Peterson: Mr. Speaker, when the Premier of this province states a falsehood --

Interjections.

Mr. Peterson: He said it, sir, and Hansard will show that it is on the record.

Mr. Speaker: I did not hear the remark, and quite obviously --

Mr. Peterson: I heard it, sir, and I am asking you to ask him to withdraw that remark.

Mr. Speaker: Order. I am going to ask you to withdraw that word you used --

Mr. Mancini: It should be the reverse.

Mr. Eakins: Let's start with the Premier.

Mr. Speaker: In all honesty, I did not hear the exchange. I was concentrating on what the member for Riverdale was saying. I did hear you when you stood up. I ask you to withdraw the use of that word, please.

Mr. Peterson: Mr. Speaker, sitting in his place, the Premier said that the Leader of the Opposition heard it all. I heard it, my colleagues heard it and I suspect his own colleagues heard it. Whether Hansard heard it, I do not know. The fact that you did not hear it, sir, I respectfully submit, is not all that relevant in the circumstances.

That is a deliberate falsehood in the circumstances. I did not hear and my colleagues did not hear everything that presumably, at least according to press reports, the minister, Mr. Biddell and Mr. Macdonald had to say to the editorial boards of certain newspapers. It is the Premier's responsibility to withdraw that suggestion.

Hon. Mr. Davis: Mr. Speaker, I did not realize the Leader of the Opposition was so easily upset. I am delighted to withdraw it.

He is quite right. I was not present when he talked to Mr. Biddell. I was not present when the minister was talking to the editorial board of the two newspapers. So I was privy to neither conversation. But I have reason to believe that the Leader of the Opposition was fully aware in a substantial sense of whatever was discussed with the editorial board.

Mr. T. P. Reid: That is not true.

Mr. Wrye: That is not true.

Hon. Mr. Davis: I say "in a substantial way"; that is all.

Mr. Peterson: The extent of my knowledge in this entire matter is a meeting we had with Mr. Biddell; that is all public knowledge at this point. Many of my colleagues were there, and those who were there will clearly understand that the Premier's remarks are not in conformity with the facts.

Mr. Rae: They should settle this private quarrel somewhere else, Mr. Speaker.

Mr. Speaker: I am not going to adjudicate. I did not hear whether you withdrew the --

Interjections.

Mr. Speaker: Order.

Mr. Peterson: Considering the generosity shown by the Premier, I withdraw my remarks.

Mr. Speaker: Thank you.

Mr. Renwick: Mr. Speaker, I want to pick up on a minor thread with respect to the point of substance on the question of the privileges of the assembly.

I am under no illusion about the cynicism of the Minister of Consumer and Commercial Relations, because none of the information he has disclosed since Monday afternoon, when he stood in his place to introduce Bill 215, which we will be debating this afternoon, could not have been disclosed on that afternoon; and it has been made available to this House only because the editorial opinion across the province was contrary to what he wanted. So I have no illusion that we are forcing information from the government.

The government is playing its usual cynical game. I may say they played it again in the committee yesterday in breach of the privileges of this assembly: first, in that the minister did not make available the two reports for 1980 and 1981, and second, by not permitting a discussion with the registrar about the discharge of his statutory obligations, not as a member of the ministry but as a registrar appointed by the Lieutenant Governor in Council and having a status that required his presence before that committee.

There is no way in which this assembly can discharge its responsibilities with respect to the matters that are before us if on each and every occasion when the rules of the House permit the reference of that kind of matter for consideration, the government, always prompted by the parliamentary assistant to the particular minister, moves to disrupt the work of that committee.

In that sense I want to associate myself with the essential element of the remarks of the member for Renfrew North. I want to say, however, that it is extremely difficult to distinguish the Liberal positions on so many matters when a smokescreen is raised continuously by that party about where it stands on the issues.

We will be very interested in the debate this afternoon on Bill 215.

I would like you to take under consideration, if you would, Mr. Speaker, the valid point with respect to the privileges of this assembly and what happened in the standing committee on administration of justice yesterday and what has been happening on every single occasion as this government moves, in great cynicism, to disrupt the work of the committees of this assembly.

2:20 p.m.

Hon. Mr. Elgie: Mr. Speaker, first of all, I think I should comment and be quite frank about it.

Mr. Mancini: That would be the first time.

Hon. Mr. Elgie: It is nice to have the honourable member back. He adds a certain amount of something to the official opposition. I am not sure what it is, but others can make up their own minds.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Elgie: I find it intriguing that from the beginning of what my friend the member for Renfrew North has called the matters related to these three trust companies, there has been one constant, continuous and overworked criticism of this minister: he has not come out enough to talk on the issues.

I have to tell the member it was my determination that there was an understanding gap, and I determined to explain the material that has been placed before this House in an effort to help give a better understanding to those who I felt did not understand it properly. That is what was done. If the member looks over the material that has been presented before this House in the emergency debate and was presented in answers to questions, he will find the material he is talking about is material that is substantially known to this House.

I also want to make it very clear, because I have heard reference to this --

lnterjections.

Mr. Speaker: Order.

Hon. Mr. Elgie: Does the member want me to check in with him before I take the opportunity of having my press interviews?

Mr. Conway: That is a damned important question.

Mr. Speaker: Order.

Mr. Conway: It is a very important question.

Hon. Mr. Elgie: Let me tell the member, he does not check in with me before he holds his press conferences.

Mr. Conway: Where has the minister said he was going to parcel out Crown Trust?

Mr. Speaker: Order. The member for Renfrew North will resume his seat, please. I do not think we need any further outbursts. We will hear what the minister has to say, and then I will take the matter under advisement.

Hon. Mr. Elgie: I want to make it very clear -- from some remarks I have heard, there is talk of a coverup -- that we are in an uncover operation here. We are involved in clear and determined efforts to make public all the knowledge that is possible about the events that have been before this House. That should be very clearly understood. There is no coverup; it is an uncover operation.

For the member for Riverdale to suggest I have a cynicism about this House is to deny what I think this House stands for in parliamentary democracy. I do not accept that. I do not think it is worthy of him to say it, because the member knows in his heart the respect I have for the traditions of this Legislature.

It troubles me very much to hear the member say that. If anyone displays cynicism and if any group is playing politics over an issue that I deem to be one of the most important issues before this House, I think the member knows who does. If I am not wrong, I think all of us know where that group sits. I have no further comments, sir.

Interjections.

Mr. Speaker: Order, please. I will be very pleased to take the point of privilege that was raised by the member for Renfrew North under advisement, and I will report back to the House as quickly as I can.

Mr. Roy: Mr. Speaker, in response to the minister's comments, I want to raise this point of privilege. As my colleague the member for Renfrew North said, when we met with Mr. Biddell, we were never told that there would be division of the assets in the sale --

Mr. Speaker: Order, please. You are talking on the first point of privilege. I have said I will report back to the House.

Mr. Roy: Mr. Speaker --

Mr. Speaker: No. You are out of order.

Mr. Roy: Mr. Speaker, this is another point of privilege. Please hear me out on something said by the member for Riverdale. He has made an accusation against --

Mr. Speaker: With all respect, that really is not a point of privilege.

Mr. Roy: Please hear me out before you rule my point of privilege out of order.

Mr. Speaker: If you are going to talk on a new point of privilege --

Mr. Roy: It is a new point of privilege.

Mr. Speaker: All right. I will listen to it.

Mr. Roy: Mr. Speaker, the new point of privilege is this: The member for Riverdale accused the official opposition of having a secret meeting with Mr. Biddell. This was not a secret meeting. In fact --

Mr. Speaker: Order, please.

Mr. Roy: Hear me out.

Mr. Speaker: No. The member for Ottawa East will please resume his seat. It could not be construed in any way as a secret meeting, because I saw it reported on the news and I read about it in the press.

Interjection.

Mr. Speaker: Order. Resume your seat, please.

CORRECTION OF NEWSPAPER REPORT

Mr. Nixon: Mr. Speaker, I rise on a point of order to correct the record. In yesterday's Toronto Star there is a headline that reads as follows: "Approval of Crown Sale Stalled by Opposition." The byline is that of Trish Crawford. That is incorrect.

You are aware, sir, that the bill before us was introduced just a few days ago. It could have proceeded earlier than today. We have already agreed, at least in this party, to sit over the supper hour to continue its debate, and we have proposed to the government House leader (Mr. Wells) that the House or its committee can continue its work over the weekend because we feel it is important that this be fully deliberated. The last thing we want to do is delay it.

The reason it is very important is that many people who have money on deposit with Crown are extremely anxious that a suitable and viable solution be worked out before they lose their money. For the Toronto Star, a reputable newspaper, to indicate that the opposition, either this party or the New Democratic Party, is stalling the deliberation is clearly incorrect. I want that so noted.

Mr. Speaker: I am sure the people involved have taken note of that. I am not sure what they will do with it, but I am sure they have taken note.

TABLING OF REGISTRAR'S ANNUAL REPORT

Mr. Cunningham: I have a separate point of privilege, Mr. Speaker. Members of the Legislature rely greatly on the tabling of statutory reports on an annual basis. Yesterday, in the course of the work of the standing committee on administration of justice, a letter was directed and circulated to members of the committee, signed by Murray Thompson, registrar of loan and trust corporations, advising us that the 1980 annual report was not circulated, pursuant to standing order 33 of the House.

Mr. Thompson said in his letter in part: "It is therefore with some embarrassment that I must advise you that the tabling of the 1980 report was not carried out in accordance with our normal practice. I will make arrangements with the minister to have this done.

"The report for 1981 is still at the printers. In this regard, the time required in the preparation and checking of numerous tables contained in the report has always resulted in a substantial delay in the release of the reports. Recent technical improvements in our word processing equipment will enable us to store much of the information required in the reports on floppy discs."

I would ask you, sir, if you could have a dialogue with the minister in charge to see if these floppy discs can start working so that members can receive these statutory reports, reports that might add some clarity to the operation of that very messy department.

Mr. Speaker: I am sure the minister has taken note of what you have said and will correct the tabling of the reports as you have requested.

CLERK OF THE HOUSE

Mr. Speaker: Now, if I may move along to something a bit more pleasant but as noteworthy. Inasmuch as Roderick Lewis, our eminent Clerk of the House, succeeded his father, he today has broken the record of his late father in being the longest-serving Clerk of the House in Ontario. He told me with all modesty that this event was celebrated during the noon hour in an appropriate fashion; so we should not rule on any important points of order.

STATEMENTS BY THE MINISTRY

BUILDING REGULATIONS

Hon. Mr. Sterling: Mr. Speaker, in my capacity as both the Provincial Secretary for Justice and the minister responsible for regulatory reform, I have recently initiated an interministerial committee to examine conflicting building regulations in Ontario.

The committee, which consists of representatives from two ministries within my policy field, Consumer and Commercial Relations and Solicitor General, also includes the Ministry of Municipal Affairs and Housing.

Although there are numerous pieces of legislation which exist for building, our committee has concentrated on three key acts which have a general application throughout Ontario and are at present under the jurisdiction of three separate ministers.

They are the Planning Act, which falls under Municipal Affairs and Housing and enables municipalities to pass and enforce property standards bylaws; the fire code and Fire Marshal's Act, which contain standards for building fire safety, and they and their enforcement are the responsibility of the Solicitor General (Mr. G. W. Taylor); and, finally, the Ontario Building Code and the Building Code Act, governing the actual construction, renovation and demolition of buildings, currently under the Ministry of Consumer and Commercial Relations.

It has been brought to my attention that while the division of these areas of responsibility provides the necessary involvement of various government agencies, it has caused the builders considerable concern when trying to satisfy all the regulations involved. It has been the primary focus of this committee to examine ways to simplify the process for those who deal with government and the construction of buildings in Ontario, to eliminate any duplication which may exist and resolve conflicting building requirements.

In this regard I am pleased to announce, as chairman of the committee, that effective February I the building code branch will be transferred from the Ministry of Consumer and Commercial Relations to the Ministry of Municipal Affairs and Housing. Except for matters relating to fire safety, this transfer will consolidate all the major regulations and legislation now dealing with the construction, renovation and rehabilitation of buildings in Ontario.

2:30 p.m.

I am also pleased to announce that the committee has also been examining existing procedures which address the disputes that may arise between local building inspectors, the fire department and the builder. There are at present six municipalities which have implemented voluntary dispute-resolution mechanisms for this purpose. I have instructed my committee to explore the methods employed by these municipalities, with the intent of incorporating these models across the province.

I am confident that the transfer of the responsibility for the building code to the Ministry of Municipal Affairs and Housing will contribute greatly to reducing any overlap among provincial acts relating to buildings. The consolidation has been recommended to the government in two reports and has the general support of industry, building officials and municipalities across our province.

It is our intention that by further reforming the regulatory process relating to buildings, we will ensure a high degree of safety in building across our province.

TRANSFER OF CROWN TRUST ASSETS

Hon. Mr. Elgie: Mr. Speaker, in the light of continuing developments with respect to Crown Trust Co., and the necessity of dealing with the legislation before the House on a priority basis in order to allow arrangements to be made with Canada Deposit Insurance Corp. and a new owner, I wish to make the following statement.

There should be no conceivable reason for delay or doubt over this legislation. There is no information or explanation gap, as some may assert. There is clearly, in the minds of some, an understanding gap. So let me restate as simply and clearly as I can what the real position is that faces this House with respect to the depositors of Crown Trust Co.

There are two choices, and soon there will be only one. The first choice, which this government has rejected, is to put Crown Trust Co. into liquidation. If this had been done, or if the result of delay in this House leaves it as the only alternative, the results will be very substantial losses and long-delayed recoveries for uninsured depositors, a substantially greater loss of public moneys through higher losses on uninsured deposits by Canada Deposit Insurance Corp. and the Quebec deposit insurance organization, Régie de l'assurance-dépôts du Québec, and no possibility -- and I emphasize this -- no possibility of any recovery by preferred or common shareholders.

The second choice is the one adopted by this government. Once the government determined that Crown Trust Co. lacked a borrowing base to justify its continuing in the business of taking deposits from the public, the question for the government was how best to protect the stake of the existing depositors in the Crown Trust Co. assets in a manner which did not violate the legitimate rights or interests of shareholders or other creditors.

The course adopted was to take possession and control of the Crown Trust Co. assets under the legislation enacted on December 21, 1982, to operate the business in as nearly normal a manner as possible, to investigate fully the financial and business position of the company and to assess the best means of maximizing the value of its assets.

We realized from the beginning that we were faced with a race against time in maintaining faith in Crown Trust Co. until the continuance of its business could be reasonably assured. This has now all been done in a timely manner in conjunction with the Canada Deposit Insurance Corp.

The result is that if the legislation were to be passed today, I could assure the House that all depositors will be paid in full as their deposits fall due, the CDIC losses will be substantially reduced from what they otherwise would have been, most of the jobs at Crown Trust Co. will be preserved, the possibility of some recovery for shareholders will remain in the event that the questionable investments eventually realize substantially more than is now expected, and the right of shareholders to complain of reckless or imprudent management or of an improvident sale of assets will be retained.

This is a simple choice which this House faces. This government has taken its full responsibility in the matter and I can assure the House that we have made known every relevant factor to a decision on the legislation by all members of this House. The matter now rests with the House. The time for action is now, not because I say so, but because the risk is increasing that customers of Crown Trust will start to vote with their feet while other issues totally irrelevant to the interests of Crown Trust Co. depositors, creditors and shareholders are being raised as an excuse to delay taking a position for or against liquidation of the company.

That is the only question. Vote now, for or against the legislation, or delay and create the very real possibility that by the time legislation is finally passed it will arrive too late to save the uninsured depositors, leaving liquidation as the sole alternative.

There are three types of concerns about this bill which I have heard which need to be addressed. They do not reflect a lack of information but a lack of understanding of the purpose and effect of the bill.

First, there is the suggestion that this bill is some form of punishment of some of the shareholders of Crown Trust for possible wrongdoing on which all the facts are not in and in which no court has adjudicated. The truth is that this bill is not directed against shareholders and does not depend on there having been any wrongdoing.

It is the consequence of Crown Trust having been operated in such a way that it no longer had a borrowing base entitling it to continue to receive public deposits. It is that simple. Rather than being directed against shareholders, who collectively at least had some control over the operations of Crown Trust Co., it is directed to the protection of depositors, whose stake is some 20 times as large as that of shareholders and who had and could have no control over the company's operations. Compared with the only alternative, liquidation, the bill is the shareholders' last, best hope of ultimately receiving something.

Second, there is the suggestion that this bill amounts to some form of confiscation of shareholder interests retroactively. The truth is that it is a responsible proposal to the Legislature to step in before it is too late to prevent the practical certainty that there can be nothing for the shareholders if Crown Trust Co. is dealt with under the only other alternative legislation and is liquidated.

2:40 p.m.

What are the facts?

(1) No one has deprived any shareholders of their shares. If there is anybody who believes those shares have a net value, he or she has not come forward and offered to buy those shares from the present shareholders on terms which protect the depositors and leave no public moneys at risk.

(2) None of the shareholders or anyone else has yet demonstrated a willingness to buy the Daon mortgage or the mortgages in the Cadillac Fairview properties at their face value and thereby protect both depositor and shareholder interests.

This bill does not prevent either. Rather than confiscation, this bill provides the registrar with an alternative way of realizing the Crown assets to protect depositors to the very much less satisfactory and costly existing legal alternative of liquidation. No one believes it is confiscation if a lender realizes on a mortgage or other security to recover loans which have been defaulted.

Why is it confiscation if, under new legislation designed specifically for this one transaction and passed by a duly elected Legislature, the registrar realizes on behalf of those depositors in the most beneficial manner the assets on which they have the prior claim? Why is not confiscation on the other hand if, under existing winding-up legislation, the registrar or some depositor or creditor realizes on behalf of depositors in a very disadvantageous manner the assets on which they have the prior claim?

Finally, there has been a suggestion that there is some lack of legitimacy in a free society in what is being proposed. The truth is that the power to sell was deliberately not included in the legislation passed on December 21 because the government believed at the time that the case for such action should have to be made on an individual basis by standing up and being counted in this Legislature and seeking approval by

an act of this Legislature.

For our part, speaking on behalf of this party, we know of no more legitimate procedure to have law enacted by members of this House and then to have to justify that law to the voters of this province in an election.

But, beyond this, why is it somehow illegitimate in a free and democratic society for this House to recognize that acting under the only applicable existing law -- the procedure provided for winding up or liquidating a trust company that has lost the right to do business and does not have the funds to pay depositors or other creditors in full -- will hurt every interest with a stake in Crown Trust Co.: depositors, the two deposit insurance organizations, other creditors and both classes of shareholders?

And why, if the House recognizes that, is it somehow illegitimate in a free and democratic society to introduce legislation which can only better -- and let me emphasize this -- legislation which can only better the interests of every stakeholder in Crown Trust Co.?

This government does not say there are not other issues for this House in relation to the affairs of the three trust companies and the events which led to the present position. What it does say is two things: first, these other matters do not affect one way or another the wisdom of proceeding to pass this legislation now; and second, there will be a full opportunity for review and debate of all these matters by the Legislature at a time which is appropriate.

I am already committed to a full review by a committee on this use of existing loan and trust corporation legislation and administrative practice when the white paper on the subject is presented to this House. I am also committed to making public the results of the Morrison inquiry. I can envisage that when these results are public they could provide part of the basis for legislative committee consideration of the report of the registrar under the Loan and Trust Corporations Act which is currently before the justice committee of this House.

Mr. Mancini: Mr. Speaker, I rise on a point of privilege concerning the minister's statement. He has, on several occasions in his statement, referred to the fact that we must move speedily, we must move quickly, there is no time to waste and the bill he has before the House must get speedy passage by this Legislature. I wish to put on the record that the House did not sit yesterday. If this matter is the subject --

Mr. Speaker: The honourable member does not have a proper point of privilege. Will he please resume his seat.

ORAL QUESTIONS

TRANSFER OF CROWN TRUST ASSETS

Mr. Peterson: Mr. Speaker, to the Minister of Consumer and Commercial Relations: We all understand here what I consider to be the dishonest and contemptible game the minister is playing in his statement today and throughout the last week. Let me ask, if this matter is so serious today, why did he not call it on Monday or Tuesday, or ask for a special sitting on Wednesday? Why did he wait until today to call this bill?

Hon. Mr. Elgie: Mr. Speaker, if the House leaders of the opposition parties had that sort of interest, as we did from day one, they should have said so at their House leaders' meeting, because this minister is prepared to stay any day and any night --

Interjections.

Mr. Speaker: Order.

Mr. Martel: Mr. Speaker, on a point of privilege: The minister has made a suggestion that the opposition House leaders could have indicated. The House leaders met today. They arranged an orderly timetable to proceed with the business in agreement with the government House leader (Mr. Wells) as to the best way of passing this piece of legislation. It was agreed by the House leaders that we would try to wind up the debate tonight on second reading, and that it would go to committee tomorrow.

It is also scheduled in the order of business to be announced at six o'clock that, if need be, we will have extra sittings Monday and Monday evening, even though they are not in the orders, when the particular committee that is going to look at it sits, and we are prepared to sit extra time in order to achieve that. Now that minister is trying to leave the impression that it is the opposition House leaders who have prevented this from occurring.

I join with the Leader of the Opposition (Mr. Peterson) in saying we could have sat yesterday if it was so important, as we could sit all Wednesdays and do some business around here.

Hon. Mr. Elgie: Mr. Speaker, I am not accusing anybody of anything, but there were very clear indications that the opposition parties -- certainly their questions on Tuesday supported it -- viewed this as a very important and substantive piece of legislation, as we do. I remain prepared to consider this bill at any time and without any criticism of anybody that we did not do it earlier. I said on Monday it is important that we get it done. I offered to have my special adviser Mr. Biddell meet with the two opposition parties to help them further understand the issues.

This minister and this government have made very clear the urgent way we look upon this bill and the urgent way it should be treated.

Mr. Van Horne: Mr. Speaker, on a point of privilege: This minister offends me very much and certainly does infringe on my privileges when he says what he just said about not bringing the bill in until today. We met with his representative two days ago and understood from him that he was trying to get it brought in earlier. He is not being fair with us right now.

Mr. Speaker: That was not a proper point of privilege.

Mr. Peterson: Mr. Speaker, I understand that the House leader for the government was quoted in this morning's Globe and Mail as saying he expected second reading to go until tomorrow. Now I gather the minister is saying he has to have it passed today and presumably implicit therein is that if we do not pass it today there is going to be further erosion for which he is going to blame us. Why did he not call this bill last week? Mr. Biddell told us he was urging him to call it last week. Why did he not proceed then?

2:5O p.m.

Hon. Mr. Elgie: Mr. Speaker, believe me, I do not want to get into a confrontation over a matter that I think the Leader of the Opposition really understands in his heart. I think he does understand that there is some urgency.

I have told him, and I am sure others have, that we have serious concerns about the erosion of those parts of the assets of Crown Trust that make it attractive as something that should be an ongoing institution. I say that quite frankly and openly, and I hope the Leader of the Opposition understands it, because I am deadly serious.

It is not an issue whether anybody says that what the Leader of the Opposition said is quite inaccurate. As he knows, there were discussions going on between potential purchasers and the owners of shares last week, and while that was going on we were drafting legislation in readiness for this alternative. It is the only alternative that is in the best interest of the shareholders and, particularly, the depositors.

Mr. Rae: Mr. Speaker, that is the kind of discussion that would normally be held in a committee. We in this party think it should be held in a committee, in the light of day, where the press and everyone can be there for a good, healthy give-and-take from the minister and his advisers.

Mr. Speaker: Question, please.

Mr. Rae: I would like to ask the minister whether he can tell us what he apparently told the editors of the Globe and Mail yesterday. He has not made that clear in his statement.

First of all, how much money is involved with respect to the Canada Deposit Insurance Corp.? Why has the minister not made that information public with respect to how much money he expects CDIC to have to put forward?

Second, can the minister tell us whether he is any further advanced in his plans with respect to any particular company --

Mr. Nixon: On a point of order, Mr. Speaker: That is not supplementary to the question put by my leader.

Mr. Speaker: No, it is not a proper supplementary, with all respect.

Mr. Rae: Oh, come on.

Mr. Speaker: No, it is a new question. It is a completely different subject.

Mr. Martel: It is right on the statement.

Mr. Speaker: It is on the statement but it is not on the original question nor the answer to the original question. I was prepared to listen but we had an objection.

Mr. Peterson: To clear the record, I want to invite the minister to tell us the exact facts of what has transpired and not to use blackmail to shift the onus on to the opposition parties. I want him to say that no one in the opposition parties has obstructed him at any turn when he wanted to bring in this bill. I am asking the minister to give the people of this province and this Legislature the facts.

Hon. Mr. Elgie: I feel this Legislature will be able to evaluate whether or not there is opposition to this bill. I have not heard the Leader of the Opposition say he is going to support it and help to get it through quickly. I am not saying he will not; I have a sense he understands the urgency of it and, although he may oppose parts of it, he will not obstruct it. I will be frank and honest about that: I do not think the Leader of the Opposition honestly wants to obstruct this bill.

What I am trying to get across is that if we all have the same serious concern about the best interest of depositors, then we should seriously get on with this bill as quickly as possible.

ANNOUNCEMENT OF MINISTERIAL POLICY

Mr. Peterson: Mr. Speaker, I have a question for the Premier. Did the Premier have prior knowledge that the Minister of Consumer and Commercial Relations (Mr. Elgie) was going to the editorial boards of two newspapers in town yesterday and subsequently giving an interview on the record to reporters from one particular newspaper to reveal a new policy from the government? Was the Premier aware of it and did he approve of it?

Hon. Mr. Davis: Mr. Speaker, I have no hesitation in saying that I knew the minister was going to have discussions with the editorial boards of those two papers. As I look at this whole discussion, one of the problems -- and I say this in a nonprovocative sense -- is that we have not been able to delineate the issues and focus on what this bill is attempting to achieve.

Not only did I know, but I encouraged it because I think it is a matter of public responsibility for any minister of the crown to communicate and to explain what it is the government is doing. I know leaders of the opposition have met with the editorial boards of papers and I have met with them on a number of occasions. I think it is a matter of government or ministerial responsibility.

I confess to the Leader of the Opposition that I have met with editorial boards in a number of communities in relation to government policy. As I read the press reports, I did not see anything in them that indicated any alteration in government policy.

I will attempt to explain to the Leader of the Opposition the government policy as it relates to this bill. The policy is very simple, that is, to protect the depositors of Crown Trust. If one reads the bill, it is made abundantly clear as to the determination as to how the assets are sold, to whom they are sold, whatever the proposals may be -- and I do not know what the proposals are -- and what sort of variety they may make up. Surely the Leader of the Opposition, who purports to be something of an expert in this field, would understand that the potential for the registrar to sell some assets and not sell others is, I am told, a normal process in questions of this nature.

There is nothing new by way of government policy in anything I have read. I have encouraged ministers of the crown on many occasions to sit down with those people who have the obligation and the public responsibility of leading public opinion, to communicate and explain to them what government policy may be. I would be surprised and disappointed if the Leader of the Opposition did not feel this was part of government responsibility.

I do not intend to ask him, but I know the Leader of the Opposition's predecessor, and his predecessor, have on more than one occasion met with the editorial boards of papers to explain to them the policies of the Liberal Party. His previous leader did it in terms of energy; I remember it full well.

I would also say to the Leader of the Opposition that it is fun to play games. I understand that. I am a politician and I take pride in it.

Mr. Mancini: We are not playing games; you are playing games.

Hon. Mr. Davis: Come on, sit down. Grow up and act your age.

Mr. Mancini: You took over three trust companies. We are not playing games.

Mr. Speaker: Order.

Hon. Mr. Davis: I am not suggesting you are playing games with three trust companies but, in terms of the politics, I would say to the Leader of the Opposition he has never confined --

Mr. Mancini: This statement is playing games.

Hon. Mr. Davis: Would the member for Essex Whatever please -- I do not interrupt him other than in good fun; I really do not.

I have not heard the Leader of the Opposition restrict himself to comments, information, and a desire to communicate with and persuade the press that are confined to this Legislative Assembly. I guess there is a certain feeling on the part of the members opposite that only ministers of the crown are obliged to communicate their views here in the House, while they can communicate them at any time. I happen to believe he has the right to communicate outside the House and to express points of view, but I also think ministers do too.

Mr. Peterson: The Premier's point is that we are being personal while he is not when we are called impertinent for raising this matter some months ago and have endured almost every personal word the ministry could throw at us over the past week or two, or months -- almost everything they could do to try to discredit the facts in this case. That is the reality.

Interjections.

Mr. Speaker: Question, please.

Mr. Peterson: It is the reality. I am not going to take a two-bit lecture from him on this, let me tell the House.

Mr. Speaker: Question, please.

Mr. Peterson: His political advice has not turned out to be all that good.

As part of my original question, I asked whether the Premier approved of giving out government policy subsequent to the editorial meetings to restricted reporters in a restricted newspaper. He said, I gather, that is now government policy.

3 p.m.

Am I right in assuming the Premier approved of his minister's going to some reporters from the Globe and Mail and explaining a very major new development in this whole matter? I refer to the parcelling up of the Crown Trust assets, with the Premier and the government taking over the so-called hard assets and leaving Mr. Rosenberg with $130 million of soft mortgages plus a $90-million liability to the Canada Deposit Insurance Corp. and a $20-million responsibility to preferred shareholders. The shareholders may or may not realize anything of this -- and they probably will not. Is that the government's application of poetic justice?

Hon. Mr. Davis: Mr. Speaker, if the Leader of the Opposition is making a brief for the common shareholders I would be surprised.

Mr. Peterson: Preferred shareholders.

Hon. Mr. Davis: All right, if he is making a brief for the preferred shareholders ahead of the depositors.

Can I explain it in simplistic terms to the Leader of the Opposition? As I sense the discussion, as I understand the situation -- and I put myself in the position of a depositor in Crown Trust, which I am not --

Mr. Bradley: Or Re-Mor.

Hon. Mr. Davis: Or Re-Mor.

Mr. Bradley: Or Astra.

Mr. Peterson: British Mortgage.

Hon. Mr. Davis: Let us say the member for St. Catharines (Mr. Bradley) is a depositor in Crown Trust. Let us say he is there for $70,000, for the sake of argument. Surely the responsibility of government is to protect to the best extent possible the $10,000 that is in excess of the CDIC guarantee before we have a responsibility to the preferred or common shareholders. Surely that makes sense. Surely that is a matter of public policy.

I was not with my colleague. If the Leader of the Opposition is asking me if I agree that he should have discussed this with the editorial boards, the answer to that is an unhesitating yes, certainly, he should have. I suspect the Leader of the Opposition over a period of years will do the same thing -- discuss the policies of the opposition.

I am not here to give him a lecture. I will not even give advice. I gave advice to his predecessor; he did not accept it. I listen to the present leader today and wonder if he is following in his predecessor's footsteps -- which I think would be regrettable.

Very simply, no new policy was enunciated. The member and I had a discussion with respect to this business and he pointed out to me some of his knowledge with respect to Seaway, as I recall. I recall him making the observation that he was not sure the legislation was going far enough. Those were his exact words.

I ask the Leader of the Opposition to put himself in the position of a successful businessman, which I read in his fund-raising letters that he is. Is he saying that a credible purchaser who would become involved in this situation is not going to distinguish between -- I do not know the terminology -- the good assets vis-à-vis the questionable assets? That is not a matter of government policy. It is a matter of trying to get at the root of what the bill really means.

We think we have found a way to protect the depositors. That is what this government is interested in, and that is what we are attempting to accomplish. We are doing it in a way that, if there are funds left over, the interests of the preferred shareholders and even of the common shareholders are not being prejudiced if ultimately there are sufficient funds available.

Mr. Rae: Mr. Speaker, can the Premier please tell us why the minister and Mr. Biddell gave certain information to the editorial boards with respect to the exact amounts that were expected from CDIC, the nature of the support that was going to be forthcoming from CDIC and with respect to the nature of the parcelling-out proposal? The latter left Crown Trust intact with two bum mortgages as its only assets, in a sense.

Can the Premier please tell us why those things were told to the editorial boards of the Globe and Mail and other newspapers and not told to this Legislature at any time up to and even including today?

Hon. Mr. Davis: Mr. Speaker, the leader of the New Democratic Party as a matter of choice -- and I am not quarrelling with it -- chose not to meet with Mr. Biddell.

Mr. Roy: He did not tell us anything.

Hon. Mr. Davis: Again going only from press reports, I sense the Leader of the Opposition gave a figure to the press which I believe was $150 million and which he must have got from Mr. Biddell, as it relates to the possible commitment of CDIC. There was no attempt to hide that figure.

The minister, I think, has used the term "massive amounts of money." To the leader of the New Democratic Party, $150 million may or may not fall within the definition of massive. I can tell him some of these figures have emerged in fairly recent days. I do not think the issue is what CDIC may or may not have to put in. I cannot give him a definite figure. I would say, with respect, it is not relevant.

It is relevant that -- and I emphasize this to the leader of the New Democratic Party -- we have arranged with CDIC to guarantee them, if the assets are sold or in some way brought into a viable situation, so that every depositor in Crown Trust is going to be protected. Surely that is the essence of what we are trying to accomplish. Whether it is $150 million, $140 million or $160 million being put in by CDIC is surely not the relevant issue; the relevant issue is that CDIC is going to do it. Whatever the figure, it is a heck of a lot of money.

Mr. Peterson: Will the first minister commit himself to two things? One, could we have his pledge that his government will protect all the depositors in Greymac Trust and Seaway Trust, in addition to the depositors in Crown Trust? Two, will he commit himself to a thorough and fully independent inquiry into this entire matter? I can specify the details that should be included therein. Will he commit himself to those two principles?

Mr. Speaker: Order, please. With all respect that was not a supplementary to the main question.

Mr. Peterson: What do you mean?

Mr. Speaker: It was a completely different topic.

Mr. Peterson: Of course it was a supplementary.

Interjections.

Mr. Speaker: Order.

PROTECTION OF CADILLAC FAIRVIEW TENANTS

Mr. Rae: Mr. Speaker, my question is to the Minister of Consumer and Commercial Relations. In the statement the minister apparently made to the editors of the Globe and Mail yesterday with respect to the parcelling proposal, it appears to be clear the government plans to leave what I have described as bum mortgages relating to Cadillac Fairview with Crown Trust, which will still be owned by Leonard Rosenberg.

I would like to ask the minister what exactly this does for the tenants in this situation, remembering that they are the original victims of this whole problem. In particular, what action does the government intend to take to force the owners of the numbered companies to come forward and disclose their identity and reveal to the public the exact nature of the transaction so that their responsibility for this fiasco can be pursued?

Hon. Mr. Elgie: Mr. Speaker, since the member and others have referred to the parcelling, which from Mr. Biddell's perspective -- please let me take a minute on this because I think it is a very serious and important part of the mechanics of the sale. It has nothing to do with the principle of the sale. The government is not confiscating shares or interests of people. What the Canada Deposit Insurance Corp. is doing, and what we are proposing in this legislation, is that an ongoing business with assets that equal liabilities, one plus two, would be acquired by a purchaser matching assets and liabilities.

Members must remember this is a company that has lost its borrowing base and is no longer able to carry on business because of that.

What it is proposed to sell are matching assets and matching liabilities, CDIC infusing up to $200 million in funds to provide some liquidity, which is not there without that massive infusion, and to provide a borrowing base to allow the company to continue to take depositors' money. Once there are investments that are qualified and other assets, and they are matched with liabilities, then there is something that is saleable and provides all depositors with complete and total protection.

The unqualified assets, the ones that clearly have some softness or doubt as to what they are worth, remain with Crown Trust, the shell, along with some CDIC obligations that it has assumed because it has paid some depositors.

3:10 p.m.

If by some miracle -- and it may not be a miracle -- but if by some chance those soft assets happen to be worth more than those who have reviewed them think they are worth, then that is the only opportunity shareholders and creditors have of getting anything. In liquidation they will get nothing -- absolutely nothing. Let us understand that. There is nothing going on behind the scenes; it is all out in the open. We are trying to do the best for those depositors and yet provide whatever is possible for the shareholders. Without this there is nothing, and I kid you not.

The honourable member asked about the tenants. I would like to think we all understood that when I made my statement of November 16 I indicated that because of the uncertainties surrounding these events, the tenants deserved protection. Legislation was introduced and passed by this Legislature placing a five per cent limit while a royal commission reviewed the adequacy of our rent review legislation.

In addition to that, the Residential Tenancy Commission on its own introduced guidelines that give them the option of not allowing during the first five years anything but mortgages attributable to the first sale. So whatever the outcome of all this is, tenants are receiving thorough protection while a royal commission evaluates the adequacy of our rent review legislation and while the events before us now finally come to fruition and full understanding.

As to the numbered companies, I have told members many times that several options are available which I think will reveal the information we require. Members know what the Residential Tenancy Commission has done in one case and presumably will do in other cases, given the right circumstances. Members know I have told them this is an issue the Morrison commission will be looking at and that parties with that knowledge are under subpoena to appear before the Morrison commission.

If a commission operating under

part II of the Public Inquiries Act, with the power to subpoena and the power to take evidence under oath, cannot find out that kind of information, then I think we do have a problem. But I believe it can and I am prepared to wait and find if that is so, and I ask members to do the same thing. I mean that sincerely.

Mr. Rae: Mr. Speaker, the minister has discovered lots of information, some of which he has made public and some of which he has not made public. But the one piece of information he does not know -- and that is the reason he has not made it public -- is who owns those properties. I would think that was a pretty fundamental question not just for the tenants in those properties but also for the government.

In all the inquiries, investigations, commissions and royal commissions established by the government with respect to this matter, has the minister ruled out the possibility that Bill Player and Kilderkin are the owners of the numbered companies? Has he ruled out the possibility that Leonard Rosenberg and the Greymac group of companies are the owners of the numbered companies? Has he ruled out the possibility that some third group of people is the owner of the numbered companies?

Why does he not tell us? Why does he not take measures to find out that crucial information? Does he not think the tenants deserve to know who the hell their landlords are?

Hon. Mr. Elgie: Again, Mr. Speaker, I think it is important to find out the exact ownership, at least with some degree of absolute certainty, of those numbered companies. But I have told the honourable member that under

section 152 of the Loan and Trust Corporations Act, a public inquiry under

part II of the Public Inquiries Act is endeavouring to find out that very information.

I am prepared to wait and see if they can get it, because they do have the power to subpoena and the power to take evidence under oath, and I am satisfied they have the capacity to obtain that information.

Mr. Speaker: Order, please. I would ask all honourable members to please not hold private conversations in the House. Order.

Mr. Peterson: I gather the minister has ruled out the fact that the member for Etobicoke (Mr. Philip) may be the owner of those buildings.

My question is this: The minister has now had three working days before a whole series of rent cheques are coming due. Has he satisfied himself as to the financial viability of Maysfield Property Management? Has he satisfied himself that those rent cheques will be well handled in the normal course of financial transactions -- that is, they can be banked and the person responsible for paying the bills for the maintenance and upkeep of those buildings will discharge that duty? Is he satisfied there will be no disruption in any way to the rights of the tenants who occupy those buildings?

Hon. Mr. Elgie: I think the member is asking a lot of things with respect to information he knows may not be available to me. But on the present information available, the leaseback arrangements to Kilderkin made them the effective owner for the time being.

I have already indicated to this House, at least with respect to Crown Trust, that the third- mortgage payments have not been made as of December 10 and January 10. There are still some legal issues that are being considered with respect to whether or not a deposit on account with Crown Trust can be used -- what directions would be necessary to do so -- to pay those mortgages. Those are issues that are being considered at present.

But as of this day, registered on the title, there is a leaseback arrangement to Kilderkin, which therefore, as of this time, makes it the owner. The management company operating on behalf of them, the staff of the previous Cadillac Fairview buildings, are still in operation. When further information is available or when further steps are to be taken by the government, I will announce it here.

Mr. Rae: Does the minister think that Kilderkin and Bill Player are the owners? If so, one might ask why it has taken 10 weeks for Kilderkin and Bill Player to make an appearance before the Morrison inquiry to give us even the most basic information with respect to what has happened.

In that regard, Mr. Speaker, the tenants have been given notice of application by Maysfield Property to the Residential Tenancy Commission for an on-average increase of 19.5 per cent on these properties. Is the minister satisfied that the tenants should continue to pay their rent to Maysfield Property and management services under Kilderkin?

Why does the government not end the terrible uncertainties that are being faced by the tenants in these buildings by taking possession of the properties itself? Perhaps the minister would agree that if he used that technique, perhaps we would find out who the owners are pretty darned quickly. Would it not be better than having to beat around the bush and wait for Mr. Player to have the manners to turn up before a commission headed by Mr. Morrison?

Hon. Mr. Elgie: Mr. Speaker, with regard to the

preamble of that question, I really do not think the member is telling me that I should direct Mr. Morrison's inquiry. Surely he believes Mr. Morrison has able counsel. Does he believe that? Does he believe that Mr. Hynes is an able counsel and does he believe that Mr. Morrison is an individual with a strong and high reputation in his field?

Mr. Rae: Let the minister answer the question.

Hon. Mr. Elgie: If he does, and even if he did not, surely he would not expect this minister, or any government, to be directing him what to do. He is exploring the issues within the terms of reference laid down by this government and he will report when he has that information, and the member would expect no less.

With respect to the rent increases that are reported to be asked regarding various buildings, again that matter will come before the Rent Review Commission. The commission now has legislation in place to guard them and now has its own guidelines in the event they would produce a lower increase in rent.

There is absolutely maximum protection given to tenants during these very troublesome times. I understand their legitimate concerns about the payment of their rent and where it should go. All I can report, at this time, is who are the owners and who is managing the building. I can only say the government, through its lawyers, is reviewing certain aspects of the deal with those very concerns in mind. When there is a resolution of that issue I shall be pleased to report it to the House.

3:20 p.m.

CLOSING OF CCM PLANT

Mr. Rae: Mr. Speaker, my new question is for the Minister of Labour. I would not want him to feel left out of these proceedings.

The minister will know that there has been a virtual epidemic of layoffs, plant shutdowns and closures in Ontario in the last while. I would like to turn his mind back to some questions I asked him before the Christmas break with respect to severance pay and bankruptcy and the very real problems that are being faced by workers whose companies go bankrupt and who are thus not in a position to get any severance pay whatsoever.

I know the minister will be aware of the closure and the bankruptcy of the CCM plant, which has been in existence since 1899 in this province making bicycles for people of all ages. How does the minister feel about the fact that more than 400 workers have been laid off as a result of the bankruptcy of that firm? Many of them have been working for that firm for more than 35 years, many are the third generation of workers to be working for CCM, and they are not going to get a nickel of severance pay from that company. They will not receive a dime in recognition of their 30 and 40 years of service to that company.

How does the minister feel about that and what does he intend to do about it?

Hon. Mr. Ramsay: Mr. Speaker, I feel the same despair and the same sorrow the honourable member opposite feels.

Mr. Rae: I am sure that will come as a lot of consolation to the workers who have been left out in the cold by this government, by virtue of the fact that banks come before people for this government.

Mr. Speaker: Question, please.

Mr. Rae: Mr. Speaker, my question is with respect to the pension plan that affects these workers. I wonder if the minister can confirm that, as a result of the fact the company did not pay all of its necessary contributions to the pension plan for these workers, they are going to be receiving far less in pension money -- on average $8 per year of service as opposed to $13.50 per year of service? I wonder how he feels about that when it affects workers 55 and 60, who the minister knows very well are not going to be able to find any more work for a very long time in Ontario.

Hon. Mr. Ramsay: Mr. Speaker, the honourable member opposite would like to leave the impression that he and his associates are the only ones concerned about the layoffs and closures that are taking place in this province each and every week. I would invite him to come into my office and to sit at my desk for a week and have to deal with each and every one of those as they come along. Then he would feel some real despair.

Mr. Wrye: Mr. Speaker, it is amazing that this minister, who is part of a government that has done nothing about the problem, would throw it back at the opposition and suggest we should be bringing in policies to solve the problem. It is his government that should be doing so.

Mr. Speaker: Question, please.

Mr. Wrye: I am well aware of the minister's views on federal initiatives to solve the problem of severance pay in the case of bankruptcies. Can the minister outline for us, though, what initiatives he is now considering, if he is considering any at all, on the severance pay issue? I refer to initiatives that will ensure the vast majority of people who are laid off permanently, who are thrown out of work by plant closings, will indeed receive severance pay -- and so few are -- and get that extra floor underneath them to help them as they look for a new job?

Hon. Mr. Ramsay: Mr. Speaker, first I was not throwing the problem back at the opposition. I know where the responsibility lies: it lies with this government, and we are dealing with that responsibility. There are only two other jurisdictions on the North American continent that have any severance pay whatsoever. We are dealing almost weekly with the federal government, hoping they will address the bankruptcy problems with Bill C-112.

Mr. R. F. Johnston: Mr. Speaker, it is not just CCM; it is many companies, as the minister knows. Can he tell us what is happening to the workers at the Konar Corp. in Scarborough, my riding? It is an electronics firm, high tech, which makes computer boards. As of January 14 it has laid off 100 more employees with no vacation pay, no severance pay and no pay for the last two weeks. What is the minister going to do to help those people?

Hon. Mr. Ramsay: Mr. Speaker, I am aware of the circumstances, and it is being investigated at the present time by our employment standards branch.

CASE OF ADY GANDOUR

Mr. Breithaupt: I have a question of the Attorney General, Mr. Speaker, concerning the case of Ady Gandour, a victim of armed robbery who defended himself and who then faced a charge himself. The charge was dismissed but then the dismissal was appealed.

Can he explain why the appeal was taken, who authorized it and whether they had a transcript of the evidence before authorizing it? Can he further explain why the crown failed to comply with the provisions of the Criminal Code and the rules of practice by not serving Mr. Gandour with the transcript?

Hon. Mr. McMurtry: Mr. Speaker, I first became aware of that case having read some newspaper reports today. I appreciate that it does raise some interesting and important questions, and I will obtain an answer for the honourable member. I do not have that information at the present time.

Mr. Breithaupt: While the Attorney General is obtaining that information, can he find out for me as well why the 140-page transcript and the crown memorandum of fact and law were not served on counsel for Mr. Gandour until two working days before the appeal was to be heard? The rules of practice require that the material be furnished at least two weeks before the appeal and, in fact, the crown had the transcript for two months before that.

Finally, can he tell this House why, since every move the crown made in this case has been shown to be wrong, the Attorney General's ministry should not compensate Mr. Gandour for his expenses at trial as well as on appeal? This should be regardless of what order may be eventually made with respect to costs.

Hon. Mr. McMurtry: I will certainly undertake to obtain the answers to the other questions raised by my honourable friend in his supplementary question with respect to what happened here.

However, I would like to inject this modest caveat: I think it would be unfair -- and I am sure the member would agree -- to make any final judgement in this matter based on fairly incomplete media reports. I am not suggesting the journalists who were interested in this case have not done their best to obtain the relevant information, but I think we must have all the information before we make any judgement about any impropriety, or possible impropriety, on the part of the crown attorney's office involved in this prosecution.

INVESTIGATION OF CHILD ABUSE CASE

Mr. Samis: Mr. Speaker, I have a question of the Minister of Community and Social Services regarding the sorry saga of the 15-year-old girl from Alexandria.

Now that he has had time to assess the reports on the matter, and reflect on them, could he advise the House whether he is satisfied, in his opinion, that the children's aid society acted in the best interests of the girl in the matter?

Could he advise the House of the nature and scope of the investigation his ministry has launched into the matter? Could he explain whether parties other than the CAS would be allowed the opportunity to provide input into that investigation?

Hon. Mr. Drea: Mr. Speaker, if the honourable member had been following some of the remarks I have made, he would know the third part has already been taking place for several days, even prior to the events of last Wednesday. I am still collecting information, and when I have collected information -- it is public knowledge; I am surprised the member does not know -- from a great number of jurisdictions, I will come to some conclusion.

There have been some press reports concerning a telegram to me. I do not know who sent the telegram, because there is no name on it. I understand counsel in the matter has said he knows nothing about it. However, it is incumbent upon me to say the following words about the matter.

Since this case is before the courts, it would be highly improper for the minister to intervene by meeting with this juvenile or her representatives prior to the court hearing on February 2, 1983. The court is the proper place to hear any and all representations in the matter. Meanwhile, I have asked the official guardian to act as guardian ad litem in this case before the courts.

3:30 p.m.

Mr. Samis: Mr. Speaker, can the minister be a little more specific in outlining the exact parameters of his investigations as opposed to just receiving reports? Exactly what is his ministry investigating in the matter? Can he advise us whether he has had any communication with the children's aid society as to the possibility of pressing charges in the hearing? Can he also tell us exactly whom he has spoken to so far in terms of receiving his information?

Hon. Mr. Drea: Mr. Speaker, I am perfectly prepared, at the end of what I am doing, to discuss where my information has come from. I am in the process of collecting it, and I think the honourable member will know it is from several jurisdictions, and not just the county of Stormont or the jurisdictional area of that children's aid society.

I also point out to the member that I have said, and I think I have been quoted quite accurately, the information I am seeking and getting, and some is still coming to me, deals with all the events of 1982.

Mr. Nixon: Mr. Speaker, has the minister informed the other children's aid societies, in the unlikely event this matter surfaces again while the review is continuing, that they might seek the advice of the Attorney General (Mr. McMurtry) or the official guardian before they make a specific decision at the local level?

Hon. Mr. Drea: Mr. Speaker, that is quite well known to children's aid societies.

Mr. Nixon: Does the minister mean since the event?

Hon. Mr. Drea: It had been known for some time previously.

Mr. Nixon: Were they were supposed to have done that?

Hon. Mr. Drea: No. In answer to the supplementary question, let me say -- and this has nothing to do with last Wednesday -- it has been a policy that the 51 children's aid societies in this province have autonomy in this regard. They make their own policy, provided it is within the statutes of the Dominion of Canada. If they need advice, they know that under the Child Welfare Act they can go to my area director. They know they can seek advice from the office of the official guardian. That has always been there.

TAKEOVER OF TRUST COMPANIES

Mr. T. P. Reid: Mr. Speaker, I want to ask a question of the Attorney General in regard to the situation surrounding the individuals involved in the three trust companies. I am concerned about the legal rights of those people as we have them under our new Constitution.

Does the Attorney General feel that the rights and privileges of Mr. Rosenberg particularly, as well as perhaps those of Mr. Player, Mr. Markle and others involved in this, and the due process of law in our Constitution are being protected, and that Bill 215 does not offend the Charter of Rights but protects the due process of law and the rights of those people as individuals?

Hon. Mr. McMurtry: Mr. Speaker, I am of the view that Bill 215 does not offend the new Charter of Rights. I also want to say that obviously the rights of shareholders, common or preferred, have been very much a matter of concern for the executive council and, indeed, for all members of the government caucus, as well as our concern for the depositors.

It is quite clear from what has transpired that very significant emphasis has been placed on the rights of the depositors, and every reasonable effort has been taken, is being taken and I hope will be taken to do what we can to bring about a result pursuant to which no depositors are out of pocket.

Whether this will happen will depend to a great extent on what happens here in the next little while, as the Minister of Consumer and Commercial Relations (Mr. Elgie) has already stated. He stated in this House that he was fully in support of a mechanism that would provide a forum for any of the shareholders, preferred or otherwise, if it can be alleged at any point down the road that they have been treated unfairly, unreasonably or arbitrarily.

He has stated to the Legislature that this would be done even if it required amendments to legislation -- and we are not just talking about Bill 215; members are probably familiar with

section 8 of the ministry act, which provides certain protection for people like the registrar, unless they are not acting in good faith.

As these matters evolve, the honourable member can rest assured that the legitimate rights of these individuals will be carefully considered. The government will make every effort to ensure they are treated fairly.

In a very difficult situation such as this, it is quite clear that one has to establish some modest order of priorities. What is critical now is the protection of the rights and interests of the depositors. By moving in that direction, we do not have to sacrifice the rights of any of these other individuals. That does not necessarily follow.

I am afraid what some people on the opposite side of the House appear to be suggesting is a course of inaction that would undermine and be detrimental to the rights of not only the depositors but also the shareholders of both preferred and common shares.

Mr. T. P. Reid: I am somewhat shocked that the Attorney General, the first law officer of the crown, seems to put the rights of shareholders, which we are all concerned about, above the principle of the rule of law in Ontario.

Hon. Mr. McMurtry: Do not twist what I said. That is not what I said at all.

Mr. T. P. Reid: The Attorney General's words are in Hansard.

Hon. Mr. McMurtry: Yes. Fortunately they are.

Mr. Speaker: Question, please.

Mr. T. P. Reid: If we look at the Canadian Constitution, I believe what has gone on here, and to some extent Bill 215, offends the

preamble to the Constitution and sections 1, 10 and 11. I am concerned that sections 9, 10 and even 11 of Bill 215 offend those rights and the rights of the individuals concerned. I find it strange that the Attorney General puts the shareholders above the rule of law.

Mr. Speaker: Question, please.

Mr. T. P. Reid: First, was the opinion of the Attorney General and his law officers asked for in the drafting of this bill? Second, can he assure us by stating specifically the rights of those individuals to go to court to recover those rights or to be judged? Whether we like it or not, those individuals have been judged and tried by him by bringing in Bill 215. We want to know what recourse there is for any individual in this province to have his say in court.

3:40 p.m.

Hon. Mr. McMurtry: How the member could possibly distort my earlier answer and infer that I had said the rights of the shareholders were somehow above the rule of law is really beyond me. I hesitate to attempt to respond any further to his question, because obviously he is choosing not to listen to my response.

Fortunately we have an excellent Hansard staff that records our responses. With some of those people making the foolish statements they do, it would be an unhappy situation if we did not have an excellent Hansard staff.

I said that in my view the legislation did not offend the Charter of Rights. I said that our immediate concern was the rights of the depositors and that we were attempting to do everything we could at this point to protect their rights. Obviously, and it is to be hoped, the shareholders will benefit if the security of the deposits currently with this company, or those deposited with Crown Trust Co. and the other companies, are protected.

I simply said that in my view the Minister of Consumer and Commercial Relations had made it abundantly clear to this House on a number of occasions that in recommending initiatives to protect the depositors, he was in no way turning his back on what may be the legitimate rights of shareholders, both preferred and common. If the member does not understand that, that is his problem, not mine.

AMI (CANADA) LTD.

Mr. McClellan: Mr. Speaker, I have a question for the Minister of Health with respect to his apparent new policy of privatizing Ontario's hospitals in violation of our tradition of medicare and the federal medicare legislation.

I would like to ask the minister, who described the AMI (Canada) Ltd. deal with the Hawkesbury and District General Hospital as an experimental process, whether he would tell us the names of the six large hospitals in Ontario which Mr. Gerry Rowe, president of AMI (Canada) Ltd., indicated to us his firm was negotiating with for additional contracts, in view of the fact that Mr. Enright of the Ministry of Health has told us as well that the ministry is a keen observer in these negotiations.

Since I do not have time for a supplementary, would the minister also tell us the name and the location of the chronic care hospital which Harold Livergant, soon to be the owner of Crown Trust, intends to build on the grounds of a hospital here in Ontario during the course of the next year?

What are the six hospitals currently negotiating with AMI for additional contracts, and where does Extendicare intend to build its private-enterprise chronic-care hospital here in Ontario?

Hon. Mr. Grossman: Mr. Speaker, I do not know where Mr. Livergant or Extendicare plans to commence construction of a new chronic care facility in the next year.

Mr. McClellan: He says he is negotiating with you.

Hon. Mr. Grossman: I am giving the member the answer. With regard to the six other hospitals, AMI, like a lot of firms, probably is having discussions with many hospitals with a view to convincing them that it can bring some expertise to their hospitals. Only when that hospital wants to get approval from the ministry will it bring a hard and firm proposal to the ministry and ask, "Is this the sort of contract you would find acceptable?"

With respect to those six hospitals, there may be fewer, there may be more; and they may be negotiating with AMI and others. But that is not our concern until AMI and the hospital come to us and seek permission to proceed.

CORRECTION OF LEGISLATIVE BUILDING DISPLAY

Mr. R. F. Johnston: Mr. Speaker, on a point of privilege: I have received some information from a closet left-wing journalist in the gallery, who no doubt will therefore want to remain nameless, but I verified the information, and it is a slight against the entire caucus of the New Democratic Party that I would like you to correct at your earliest opportunity, if you might.

There are display cases downstairs with historical information on Ontario, and in one of them there is a reference to Agnes Macphail and Rae Luckock, two great former members of the Co-operative Commonwealth Federation and women's rights activists. The CCF is called the Co-operative Consolidated Federation rather than the Co-operative Commonwealth Federation.

I wonder if you would correct that for us, because it is a bit of a slight, you will agree.

Mr. Speaker: I sure hope none of my staff was responsible for that, but I will be very happy to have it corrected.

Mr. Swart: Mr. Speaker, on the same point: Will you find out whether the same person who did that prepared these documents on our desks, which list 21 members of the NDP instead of 22?

Mr. Roy: Mr. Speaker, on the same point of order: If that party was so much in love with the name "CCF," why did it change it?

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

REPORT

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

Mr. Robinson, on behalf of Mr. Shymko, from the standing committee on social development reported the following resolutions:

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

Ministry administration program, $73,651,000; institutional health program, $3,901,820,000; public and mental health program, $527,953,000; health insurance program, $2,040,333,000.

Further, that supply in the following supplementary amount and to defray the expenses of the Ministry of Health be granted to Her Majesty for the fiscal year ending March 31, 1983:

Institutional health program, $110,000,000.

MOTIONS

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

Hon. Mr. Wells moved that the standing committee on resources development sit Monday evening, January 31, rather than Tuesday evening, February 1.

Motion agreed to.

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

Hon. Mr. Wells moved that the standing committee on social development be authorized to travel to Kleinburg, Ontario, to visit the McMichael gallery on the afternoon of Wednesday, February 2.

Motion agreed to.

3:50 p.m.

ORDERS OF THE DAY

CROWN TRUST COMPANY ACT

Hon. Mr. Elgie moved second reading of Bill 215,

An Act respecting Crown Trust Company.

Hon. Mr. Davis: Mr. Speaker, I appreciate the fact that it is traditionally the good fortune of the minister to lead off the discussions, but it is such an important debate that I want the opportunity briefly to make a contribution. I am doing so early in the debate because I think I know what may be said from across the House and, quite honestly, I will be in other places later on today.

Mr. Cunningham: The Senate?

Hon. Mr. Davis: The Senate? No, no.

Mr. Nixon: He's going to stand around in Winnipeg in case there is a draft.

Hon. Mr. Davis: Actually I am headed for Minnesota to pour a little oil on troubled waters. Is that a good way of putting it?

Mr. Cunningham: Are you going to Hawaii?

Hon. Mr. Davis: No, I am not. Listen, I want the member to know, I have been a fan of the Dolphins for nearly as many years as the Argonauts. That is not bad in one year: Argos in the Grey Cup and the Dolphins in the Super Bowl. No, I am not going to look at the domed stadium either. I am meeting with the governor to discuss matters of mutual concern, whatever they may be. I may get delayed there.

Mr. Riddell: I'm sure Joe Clark won't miss you.

Hon. Mr. Davis: Mr. Speaker, I direct my remarks to everyone but in particular to the member for Kitchener (Mr. Breithaupt), who over the years has been one of the resident experts in this field, and to the new leader of the New Democratic Party (Mr. Rae), who is a lawyer by profession if not by training and knowledgeable in the economic field; he is a gentleman who is interested in equity and justice and who has the capacity, I hope, to centre on what really is the issue in the bill we are debating.

I listened to the observations of the House leader of the Liberal Party (Mr. Nixon), and I will make no observations about the perception of a reporter from the Toronto Star. I never quarrel with what is reported, because I learned long ago that it does not do me any good in any event.

I was almost unhappy, sir, when you ruled the last question of the Leader of the Opposition (Mr. Peterson) out of order a few moments ago, because I was well primed for an answer -- no, I cannot do it when he is not here; it is no fun.

Leaving all that aside, I want to deal with this in what I hope will be a nonprovocative and serious way. The reason I am entering into this discussion is the serious nature of the situation and the very real, tangible possibility of a solution to an important part of this problem through the passage of this legislation.

I am endeavouring in these brief remarks to try to come down on what is the basic issue. I have been here for many years, and I do not minimize the interests of the members opposite; I do not quarrel with the political arena, because that has been my way of life, and it has been the way of life of many here. But I say to the member for Kitchener that there obviously will be ample opportunities to debate some of the peripheral areas -- and there are some; I do not minimize them for a moment -- and that I hope we can single out the issue at hand as contained in the bill itself.

The bill really is simplistic; it has been described by the member for Ottawa East (Mr. Roy) as draconian. I am not going to use that sort of language. It is a unique bill; I do not question that for a moment.

Mr. Sweeney: It is precedent-setting.

Hon. Mr. Davis: Yes, I say to the member for Kitchener-Wilmot. We have set precedents in this House before, we will be setting them again; that is one of the responsibilities of any Legislature. I am not reluctant to set a precedent, although I may not always be comfortable with some precedents.

A precedent was set when the member supported us in the bill respecting restraint. That was a precedent in many respects for the members of this House. The member was not reluctant then. Some of his colleagues were a little reluctant, but they did not say so. I know the member supported it with enthusiasm. The member's colleague the member for St. Catharines (Mr. Bradley) supported it with enthusiasm, except when he was talking to some of his friends in the teaching profession.

Mr. Nixon: Do you have anything to say about this bill?

Hon. Mr. Davis: Yes, I am getting around to it, but the Liberal House leader's colleagues are interrupting me. Will he keep them in order?

I think the issue is very simple. There are some critics and there have been stories written that suggest maybe there is some other agenda or a hidden motivation. The member for Ottawa East is not comfortable with the wording of the bill, but I believe it is very clear. I do not think there can be any ambiguity in the bill. There cannot be any confusion. The bill is designed very specifically to protect the depositors in Crown Trust. That is what the bill is about. It is the intent, and it will be the practical application.

I am sure the government will hear many issues -- I do not say irrelevant, by any means, or maybe even unrelated -- but when it gets right down to the crunch and the members opposite are called upon to vote, the intent of this bill, the practical implication of this bill and its practical application are simply this: Through this bill, the government in co-operation with Canada Deposit Insurance Corp. and to a certain extent with the very clear understanding from CDIC that without this bill their support of the ongoing nature of Crown Trust in some form or another would not be supported. That, in essence, is what the members opposite are going to be asked to vote for or against.

I understand that the members opposite will try to rationalize their way around wanting to protect the depositors of Crown Trust while at the same time voting against the bill. I sense what they are going to do. I say that with some regret, because I think there are occasions when we can separate ourselves from the politics of a situation, when we can recognize the simple intent of a bill and say that for these reasons we intend to support it.

We are not asking the members opposite to lessen their concern about Seaway or Greymac. We are not asking that the debate as it relates to the Morrison report or any other documentation be limited in any way. What we are saying is that it is incumbent upon all of us as legislators acting in the public interest, vis-à-vis the depositors in Crown Trust, to demonstrate that we, the members of the Ontario House, have found a vehicle whereby they can be protected.

Whatever the rhetoric that may be used or whatever the rationalization that may take place, I ask the member for Kitchener, whom I have known for many years, whether in his own heart of hearts he can stand up and oppose a bill that accomplishes this objective.

There have been certain discussions as to some other aspects of the bill that relate to the concern of shareholders, both common and preferred. I did not hear all of the Attorney General's answer, but this too has been taken into consideration. The legal opinions we have received indicate that this legislation does not take away the ultimate rights of the preferred or common shareholders or other creditors once this bill has been approved.

I am not going to lead anyone astray. I am not an expert in this field, and I readily confess it. I am not saying for a moment that the assets will be sufficient to look after the total needs of the creditors and the preferred and common shareholders, but the opinion is that the shareholders will have none of their legal rights abrogated. I heard the minister say -- and I do not take any pride of authorship in terms of any legislation -- that if there is some doubt as to the legal rights of the shareholders, the minister would not be reluctant to see credible amendments to make that abundantly clear. It is the intent of the bill.

In the question period, it became obvious that the rights of the preferred and common shareholders and the creditors will depend to a very great extent on what has been described as -- I have never heard this term before -- the "soft assets," that is, those mortgages that are at this time of questionable value. It may be that somebody will emerge at some time and say to us, "Here are the funds to pay those third or fourth mortgages," whatever it be. There may be some dollars; I sincerely hope there are, but at this moment there are not.

That does not alter the fact that in the opinion of those making these assessments, the value of those mortgages is in excess of the loan limitations in the Loan and Trust Corporations Act. I think there has been very little debate about or disagreement with that position.

Mr. T. P. Reid: We do not know. We are taking your word for it.

Hon. Mr. Davis: No. I say this not to go back in history to be provocative, but my recollection is that the Leader of the Opposition and others at the time of the consummation of the Cadillac Fairview deal, as it has been described, cast very real doubt as to the value of -- whatever it was -- $500 million. They raised it with us, and with cause.

4 p.m.

We have opinions in terms of valuations, or opinions given by those who are knowledgeable in the field, that without question these X mortgages -- and I cannot give the number -- exceed the traditional value approach for real property mortgage value. The member for Rainy River may not accept this advice, except I think it was his own party which suggested this at one point.

So, whatever the legal opinions that we have received may be, I would make it clear -- and the minister said this in answer to questions on Tuesday afternoon last -- that if there is any doubt, to my view at least, it would be very simple to make it abundantly clear. But that, too, is the intent of the legislation.

I have lived with this issue in a peripheral sort of way during these past few weeks and I do not purport for a moment to be as knowledgeable as the minister. But I really have explored, as best I can with my limited ability in this area, just really what are the alternatives. I think maybe at the point when the registrar moved in under the legislation which we approved in this House in December, there was some hope, because one always lives in hope, some expectation or hope, at least, that maybe there was sufficient substance in Crown Trust that it could be rescued in its entirety without any action of this kind.

I would remind members that I do not think I am being unfair to the Leader of the Opposition, because while I had a discussion with him prior to the introduction of that bill I do not think I asked him to keep it confidential and I sense from what he has said since the meeting that he certainly did not keep it as confidential. I am not quarrelling with that. But I recall him observing to me, when he knew the general thrust of the legislation, "You may not be going far enough because you may have to do" what it is we are proposing to do in this bill.

I do not know whether in debate on the bill the minister said this -- I know that I felt it at the time -- but we recognize that the bill that was passed in December did not provide for a solution of this nature. I think it was clearly felt by many of us who listened to the discussion that that was a possibility we hoped might not occur, but one which we realistically anticipated and one where we felt we should deal with it on an individual basis rather than having universal or comprehensive legislation on the statute books of the province. I happen still to believe in that point of view.

The member for Ottawa East keeps reminding me of how important -- he uses a different word -- this legislation is. One of the redeeming characteristics, I would say to the member for Ottawa East, is that we are not doing this by way of general legislation. It is related to a specific event, a specific entity, which we feel, in our terms of responsibility, we must do our best to assist or to find a solution for.

I can only say to the Leader of the Opposition -- and this has really not been a secret; the minister has indicated this -- those people advising us on this issue have been seeking and have received -- and I cannot tell the House leader the nature of those; I guess I can guess at the nature of the proposals that have been made, but I can tell him that no judgement has been made; at least there has been no recommendation to the government. I can say that in total sincerity, because it has not happened.

Obviously this legislation is predicated upon somebody assuming some measure of responsibility. We would not be passing this legislation if we did not think there was that very real possibility. So I say to the members opposite, really there was not any alternative.

I have listened to the views expressed in many question periods and in the debate earlier as to how we got there, the problems that are there, etc., but I really did not hear -- and I do not say this in any critical sense -- any alternative to what the government is doing. I really did not. If the members opposite explore their own consciences and their own recollections, they will be hard pressed to find any suggestion, other than this, as a credible way of dealing with the situation related to Crown Trust.

There was the suggestion -- and I think the minister referred to this, and I will just remind ourselves -- that perhaps the legislation could have gone the route of selling the shares. That would have been an expropriation of the shares. Some would argue that would be, in legal terms, I say to the member for Kitchener, a cleaner way and a more simplistic way of dealing with the issue. He has had far more experience in the law than I have had and I would not quarrel with that legal point of view.

But I personally was not comfortable with that and I really do not think it was considered seriously from the standpoint of putting it into the legislation. I do not say for a moment I am holding out any great comfort to the common or preferred shareholders, but I think the route we are going at least does provide some measure of potential realization of the investment they have.

If one looks at what it is we are attempting to accomplish, if one in fairness really asks himself if there is any other route to go but this one. I say with the greatest respect I would find it difficult to have the members opposite say at this late stage, "You can now do thus and thus." I fully expect some of them will say, with the 20-20 hindsight we are all blessed with, "X number of years ago, one might have done thus, thus and thus." I understand that, but that is not the bill and that is not the intent of what we are trying to accomplish.

Because we are not dealing only with investors, it is also important to point out that if we went the only other route of liquidation, we are also dealing with people and with X number of employees of Crown Trust. Some members will say that in terms of numbers it is not as large as in some areas in the auto sector and so on, but they are human beings, they are people employed in Ontario. Again there is no question, if one looks at the human aspect along with the question of the depositors, that one has to say, "Here lies a better opportunity for the jobs of the employees of Crown Trust to continue."

I have had no personal experience but I have had people who have been investors or are investors in Crown Trust who have been very complimentary at the way the employees have reacted to the present situation, and they speak highly of the bulk of the employees of that historic trust company in this province. So there is, as a peripheral issue, the concern of the employees of that organization, which I think can be maintained if the direction followed in this legislation is approved.

Mr. Roy: The employees get no protection under this act.

Hon. Mr. Davis: No, I recognize that. There is nothing in the act that says that, because I cannot guarantee that, but I am telling the member and I hope he assesses what I am saying with his usual attitude of fairness. I am trying not to be provocative but I could be provoked. His leader has said the odd provocative thing over the past few weeks, but I do not intend to today because this bill is too serious.

Third, and this too is essential to all of this discussion, we are not operating here in isolation: we are operating with the Canada Deposit Insurance Corp. and I want to compliment it. I do not know any of them and I have never met them. I guess they are a sort of anonymous group, which sometimes has great comfort -- people who are discharging a rather difficult public responsibility.

They have been involved in this from day one. They knew of the need for us to move in under the previous legislation and they have, in my humble opinion, acted not only as responsible managers or whatever title one gives them, but they have operated as responsible insurers with a very real measure of sensitivity in relation not only to the possibility of Crown Trust being continued in one form or another, but, most important, to the depositors themselves.

I am not going to say that CDIC said to us, "It is this or that or we do not perform." I was not part of the discussions, but I genuinely believe that what was developed was done in a spirit of co-operation. Let us not fool anyone. They do have a statutory obligation or mandate. They are limited in terms of what they can and cannot do. I say to the leader, and he can convey this, whether it is $100 million or $150 million I honestly do not know and I am not sure anyone can give him the exact figure because I am not sure it will be known for a period of months, maybe even a couple of years.

Mr. Haggerty: Years?

Hon. Mr. Davis: It may not be, because they are going in and saying: "We think there is sufficient strength there. There is a sufficient asset base so that we are prepared to guarantee every single depositor in Crown Trust." That is a guarantee I do not think the members opposite want to ignore. I know they do not, and one way not to ignore that is simply to vote for this bill.

Mr. Conway: We know where they are going to get that money, though. We know where most of that money is going to come from.

4:10 p.m.

Hon. Mr. Davis: I would say to the member for Renfrew North (Mr. Conway), I am not an expert. The money comes into Canada Deposit Insurance Corp. through premiums or whatever. It is public money in that sense of the word. But can I say to the member --

Mr. Conway: Jack Biddell told me that most of it comes from the federal Treasury.

Hon. Mr. Davis: It may, and that is the member's money and mine; and in that the member has no deductions whatsoever -- and it is time he had some -- it is probably more of his than mine on a percentage basis, although my deductions have now diminished.

Mr. Nixon: Of course, the Premier's salary is a bit bigger.

Hon. Mr. Davis: Yes. But I would say to the member for Renfrew North, I think there is some expectation -- or I do not think CDIC would be doing this -- given the proper approach that we are attempting to develop, that while CDIC will have to put up funds it will not lose any money.

Mr. Nixon: They would have preferred that you did not mess it up in the first place.

Hon. Mr. Davis: There is no guarantee of that, but I am sure that Mr. Biddell may have communicated to the members over there that there is every expectation. In fact, I do not think CDIC would be doing it if it did not think it was minimizing or lessening its exposure. They are not philanthropists there. That is not their obligation.

Mr. Kerrio: The feds bailed the government out again. You are in deep trouble.

Mr. Nixon: What gall. He gets into a mess and they have to bail him out.

Interjections.

The Deputy Speaker: Order, please. Bill 215.

Hon. Mr. Davis: The members are provoking me. I know what that party's former leader said and I know what the present leader has said about the present federal leader and Prime Minister of this country.

Mr. Conway: I know what the Premier thinks. His government's record speaks for itself.

Hon. Mr. Davis: So does the member's record. Does he remember the Community Party?

Mr. Foulds: Stay on the high road, Bill.

The Deputy Speaker: Order. Would all honourable gentlemen refrain from provoking the Premier and let him get on with Bill 215?

Hon. Mr. Davis: That is right. The Premier is a sensitive soul and does not want to be provoked.

Mr. Conway: This from the man who eviscerated Joe Clark.

Hon. Mr. Davis: That is all right, but I have never hesitated to run and have our candidates run as Progressive Conservatives. They have not become candidates for the Community Party of Ontario. Think of the shame in York South.

Interjections.

The Deputy Speaker: Order, please. Back to Bill 215. Will the member for Sudbury East (Mr. Martel) allow the Premier to continue his remarks on the bill?

Hon. Mr. Davis: Have I convinced members yet?

Some hon. members: No.

Hon. Mr. Davis: That is one of the early shortcomings I have seen in the member for London North (Mr. Van Horne).

Mr. Speaker, I think I have tried to narrow down the issue that is in front of the House. I do not say for a moment that there will not be opportunities for debates and committee discussions of other aspects of this broader issue. I suggest, with the greatest of respect, that while I think it is obvious this has not been an easy matter for the government, we believe that through the sensitive, intelligent and logical way this has been handled by the minister, we have found a vehicle, we have found a piece of legislation which, in essence, is simple. Some lawyers may say it is complicated but it really is very simple.

I say to the member for Kitchener, the legislation is this. With his approval, with some proper consideration, diligence and a sense that it is important that it be moved forward expeditiously, as legislators in this province we can, by this bill, move in and assure the depositors in Crown Trust, one of the historic, traditional old institutions in this province, that they will be protected. That is what the bill is about. That is what the members opposite are being asked to support or oppose.

I caution the members that I could conjure up, if I were of the mind, the rhetoric and rationale for not supporting it, but I think the public will know, I think all of us in this House will know that if this bill is not being supported the members opposite have missed the essence of the bill. That essence is the protection of the depositors and the ongoing activities in one form or another of Crown Trust and the important ingredient of Canada Deposit Insurance Corp., which has said this legislation is essential for us to move in and guarantee the operations in one form or another of this organization.

In one final brief observation, because I have lived through several issues in my limited political experience --

Interjections.

Hon. Mr. Davis: The members opposite can interject as much as they like, but I want to say this. I have been in constant communication with the Minister of Consumer and Commercial Relations. It is easy to be critical. The members opposite do not have to listen to me. I will turn around and say it to the minister, and the member from Wetland or Wentworth or wherever --

Mr. Nixon: Get to it.

Hon. Mr. Davis: I do my best on occasion to -- I will say it to the Speaker; I want to put it on the record. I do not know of any minister of the crown on an issue of this nature who has worked harder, with greater integrity, with greater intelligence, with greater sensitivity, with the objective of protecting the depositors, finding a solution that is workable and practical, and who has given the effort, the nervous energy, the enthusiasm, the honesty -- any descriptive word one wishes to use.

I want it clearly on the record that the Premier of this province is saying to the minister -- maybe the members opposite will not like it, or maybe in their heart of hearts they will tend to agree, but I want them to know -- that he has handled this extremely well. That is not just my assessment. It comes from individual depositors in Crown Trust. It comes, very importantly, from the industry, people who know what has happened, who know what is going on, who have some realization of the complexity and importance of this issue.

In case there is any doubt in the mind of the minister, I may not be here for the vote, but if I were here I would vote for it not only as a matter of enthusiasm, but also in recognition of the great work he has done in handling a most difficult situation.

Mr. Breithaupt: Mr. Speaker, I suppose I should begin my remarks by saying that this minister has indeed worked in a dedicated and honourable way. He has done all those things the Premier has said. He has done as much as the last one who had to do it. That is the difficulty within this province.

Despite the blandishments and the encouragements of the Premier, I regret to advise you, Mr. Speaker, that at this time we cannot undertake to support this bill. It is offensive on many counts. There is no regard whatsoever for requirements of due process. It is a device to cloak in secrecy all future activity by the ministry and by the registrar.

We have had regard for the information of Mr. Jack Biddell. We have heard his advice regarding the merits of the sale of Crown Trust. However, the only details we have, the ones of the proposed sale, are gleaned from reading this bill, and that is very oppressive information. Since the end of October 1982, we have been calling for a public inquiry, first, into the Cadillac Fairview deal, and lately into the horrendous trust companies fiasco.

Initially our concerns were focused on tenants and those concerns for the tenants involved, some 10,000 or so, persist. We pointed out in November that in the event the series of flips in the Cadillac Fairview sales were mere sham transactions, then not even one nickel of increased rents would be justified. We are increasingly concerned for tenants as they receive notices for rent increases of as much as 19.5 per cent. We are concerned about a potential failure of delivery of services to tenants as a result of this trust company fiasco.

We began raising these concerns over compliance with the Loan and Trust Corporations Act. We were concerned about the value of trust company assets because it was this value that stood behind the depositors' money. Immediately after the province's seizure of these companies, we urged the federal government to increase the claims limit to $60,000 under the Canada Deposit Insurance Corp.

4:20 p.m.

Ever since this government disclosed its intent to sell Crown Trust, we have repeatedly asked it to give comparable assurances to the depositors of Seaway Trust and Greymac Trust. The depositors in those two companies have some $500 million on deposit. They are every bit as entitled to full recovery of their deposits as are the depositors of Crown Trust. There is no apparent justification for giving any Crown depositor preferential treatment.

Looking at a list of municipalities provided to me by the treasurer of Kitchener this morning, while some $31 million, by his quick calculation and phone calls, appears from municipalities that have placed funds with Crown Trust, there is $1 million in Greymac Trust from the city of Mississauga, $1.5 million from Hamilton-Wentworth and $500,000 from the borough of East York. There may be more. I have no particular knowledge of any municipalities that have funds involved in Seaway Trust, but there may be some.

We only have to look at the variety of institutions that are involved, not only municipalities but organizations such as the Peel school board, which I am informed has some $3 million in Crown Trust.

Mr. Cunningham: The local member will hear about that.

Mr. Breithaupt: Yes, I presume the local member will hear about that, as many of us have heard, particularly as I have heard my city of Kitchener has $1 million on deposit in Crown Trust. It has certainly been our concern.

Mr. Barlow: You don't want it out, do you?

Mr. Breithaupt: Yes; I might even have preferred that it had never gone in. Be that as it may, I would like to see those funds out. I am going to suggest to the member for Cambridge (Mr. Barlow) that there are some other things we also have to look to in this regard.

The concerns we have raised with respect to the tenants and the deposit protection, not only in Crown but in Greymac and Seaway, are well known to the minister. Our concerns have been echoed in the other three preconditions for our support of Bill 215.

The conditions we have placed before the public from our point of view are as follows: first, the guarantee of all deposits within all three trust companies; second, government consent to a full public inquiry; third, public documentation supporting the necessity of a speedy sale of Crown Trust. I might add the fourth particular area in which we are all interested is the rule of law and the preservation of the rule of law in this and the other contingent matters.

We will be introducing a variety of amendments to this bill. On January 25, the minister told the House with reference to this bill: "It was never the intention of the government to deprive shareholders or preferred shareholders some access in order to determine whether or not the registrar had acted with good commercial prudence. If the phrase 'good faith' does not provide that access then I am prepared to amend it in some way to make certain they do have that access to provide that the registrar, to their satisfaction, acted with good commercial prudence in what we are trying to do to protect depositors."

We will certainly be submitting a variety of alternatives to this legislation. The first area in which one must look at amendments is particularly how they will relate this bill to the Charter of Rights. This government was among the vanguard of the procedure by which we have now created within Canada our own constitutional responsibilities.

Let us look at some of the sections of this charter. Let us look at

section 7, which says, "Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice."

Let us look at

section 8, which says, "Everyone has the right to be secure against unreasonable search or seizure."

Finally, let us look at

section 12: "Everyone has the right not to be subjected to any cruel and unusual treatment or punishment."

I was interested that in response to the questions from my colleague the member for Rainy River (Mr. T. P. Reid) the Attorney General (Mr. McMurtry) appeared not to place the quality on these component parts of the Constitution that I had thought his office and background would lead us to expect. The Attorney General was almost of the view that in particular instances a certain bending of, a certain dealing with, a variety of these themes could be considered to be acceptable if the Legislature so decreed.

But I suggest that the legal opinions upon which those views may be held, or indeed the legal opinions available to the Minister of Consumer and Commercial Relations as to the constitutional view that may well arise in this matter, are items that we in this Legislature should have available to us.

There is, of course, a second theme, and that deals with the rights of shareholders. As we know, Greymac Credit owns all but approximately 600 issued common shares of Crown Trust, well over 99 per cent of the total. But then let us look at the preferred shareholders, the series A and B groups that are involved. There are some 1,700 or so holders of preferred shares, exclusive of the institutional investors -- that is to say, the communities, the school boards, the municipal organizations and others to which I have referred.

The shareholders' equity of the preferred shares is in the neighbourhood of $20 million, so we are informed. According to C. Wallis King, acting on behalf of many preferred shareholders, this group is known in the trade as "the widows and orphans." I am sure it is not meant to be a derogatory statement, it is simply meant to show, in the tradition of the market, that certain issues and certain securities are often purchased by estates, by small investors who look for a certain stability, a certain income and not for a particular capital gain.

As a result, companies such as Bell Canada or others of that ilk attract the purchase of small numbers of shares by smaller investors in their decision to seek that safety and liquidity and preference in juxtaposition to the matter of capital gain.

So most, or at least many, of these small holders whom one might refer to have got much of their life savings invested in these preferred shares, and this bill, to my view, cuts out all of their rights, whether under the Loan and Trust Corporations Act or under the Corporations Act. There is no insurance that applies to them under the Canada Deposit Insurance Corp. They have no recourse to any court or even to the Ombudsman under this act. They may be left with whatever Lenny Rosenberg can scrape together if he is left with only those soft assets of Crown Trust that were reported in the Globe and Mail and have been referred to in the Legislature this afternoon.

To suggest that these preferred shareholders should be left with only these soft assets is really a perversion of our responsibilities within the Legislature. After all, it was their capital infusion that permitted Crown Trust to acquire the hard assets that are referred to. We all know of the ability of a trust company to use its borrowing base and, from that capital, usually by a multiple of 20 times, to build up a portfolio of investments that come and go and are dealt with, for the benefit but from the base of the funds those shareholders have contributed.

Now we see that this government is going to hand out the remaining hard assets, possibly even at fire sale prices, and leave the legitimate, honest purchasers, those equity owners who have invested in either the class A or class B preference shares, with only the soft assets; and we all know that those soft assets are the third mortgages and the wraparounds and the other financial tools which might or might not accumulate some benefit in some years, at some time.

4:30 p.m.

We must restore the basic essential elements of due process to these shareholders of the preferred Crown Trust stock. The minister must know who many of these preferred shareholders are.

One holder was put through the nightmare of the Atlantic Acceptance Corp. and the scandal that resulted there. He lost almost his entire savings and as a result he made the decision to invest in only the safest company. Unfortunately, in this instance, he happened to choose to invest in Crown Trust preferred shares.

There are of course other preferred shareholders of Crown, who chose Crown Trust because of its security or because it was such a prudent, conservative investment. After all, Crown Trust dates back to 1897. It has been long regarded as a substantial and important company and it comes as a shock, not only on this side of the House but I am sure to the minister, his supporters and to the public of the province, that the assets of that company could be apparently so dealt with and so dispersed and compromised in but a period of three months.

Some of the people who invested in these preferred shares were burned in the British Mortgage scam. Some were involved in the Astra/Re-Mor fiasco. Possibly even some were burned in the Argosy collapse. Wel