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

April 16, 1974

29th Parliament, 4th Session

< Previous sitting day

Next sitting day >

Hansard Transcripts

L025 - Tue 16 Apr 1974 / Mar 16 avr 1974

BANK OF CANADA RATE INCREASE

HOUSING PROGRAMMES

UNION GAS

POTATO SUPPLIERS

HOUSING PROGRAMMES

ACTIONS OF REAL ESTATE AGENTS

WARRANTY ON NEW HOMES

SALE OF COLZA OIL

PUBLIC SERVICE ACT CONFLICT

PROVINCIAL SECRETARIATS

EMPLOYMENT OF HANDICAPPED PEOPLE

ATHLETIC SCHOLARSHIPS

EMPLOYMENT OF STUDENTS IN PSYCHIATRIC HOSPITALS

SALES TAX

INTERMEDIATE CAPACITY TRANSIT SYSTEM

STRIKE IN GUELPH

AID TO TORNADO VICTIMS

LAKESHORE PSYCHIATRIC HOSPITAL GRANTS

SUMMER EMPLOYMENT PROGRAMME

COMMISSIONER OF THE LEGISLATURE ACT, 1974

BUSINESS CORPORATIONS ACT

BUDGET DEBATE

ESTIMATES, MINISTRY OF CORRECTIONAL SERVICES

The House met at 2 o’clock, p.m.

Prayers.

Mr. Speaker: Statements by the ministry.

Oral questions. The hon. Leader of the Opposition.

BANK OF CANADA RATE INCREASE

Mr. R. F. Nixon (Leader of the Opposition): Minister of Housing, who obviously has one of the more important portfolios these days. Has his staff given him any estimation as to the effect of the unprecedented increase of one per cent in the prime lending rate established by the Bank of Canada on the costs of housing in this province?

Is there a possibility that the government of Ontario will undertake some sort of a mitigating programme either through the Province of Ontario Savings Office or perhaps by using new federal legislation allowing provinces to have a direct interest in banking concerns, to offer some sort of assistance to individual home buyers, whereby these lending rates are not going to have the bad effect on housing that they may very well have?

Hon. S. B. Handleman (Minister of Housing): There are a number of questions there, Mr. Speaker. In response to the first part of the question, my staff started to work on it this morning. I expect to have an answer from them within a day or two as to the total impact of the Bank of Canada’s move.

On the whole, I suppose we have to say that the Bank of Canada in acting to restrain the monetary supply is taking one of the classical attacks on inflation. It hasn’t worked in the last couple of years, and there is some doubt in my mind as to whether it will work in the future. As for the province entering directly into mortgage financing and subsidizing mortgages, we will certainly have to take a look at that after we’ve examined the impact of the Bank of Canada move.

Mr. R. F. Nixon: Supplementary: Has the minister any contingency plans, based on the work that has been done by himself and his predecessors since the ministry was set up, to provide some sort of provincial programme to meet the needs of the people in this province in the face of the high costs of capital associated with housing, rather than simply fit ourselves in with the programme as it extends across Canada? Does he have such contingency plans now?

Hon. Mr. Handleman: As the hon. member well knows, there is a preferred lending programme in Ontario which has money available at 8 3/4 per cent for certain income groups. That is the only plan that I know of at the present time.

Mr. I. Deans (Wentworth): A supplementary question: Is it the intention of the minister to extend the range of incomes for which this preferred interest rate is available, in order to try to offset not only the increase that is likely to come because of the Bank of Canada move, but the ever-increasing increases that we are seeing every week in any event?

Hon. Mr. Handleman: Mr. Speaker, I have a meeting arranged with the Minister of State for Urban Affairs on April 24 and at the top of our agenda is a discussion on the integration of the assisted home ownership plan of the federal government and the preferred lending programme of the provincial government to make sure that a wide range of in- come earners is covered by these two programmes.

HOUSING PROGRAMMES

Mr. R. F. Nixon: I have a question, Mr. Speaker, of the same minister relating to his statements over the weekend about the lack of co-operation from municipalities around Metropolitan Toronto in fulfilling the housing action programme, leading Mayor Margaret Britnell, for example, to say the Housing Minister has “completely lost his marbles.”

Interjections by hon. members.

Mr. R. F. Nixon: Can the minister give any specific instances where municipalities have failed to co-operate with the provincial ministry, or would he in fact agree that it has been red tape that has held up the approvals that the municipalities have had before the provincial government these many months?

Interjections by hon. members.

Mr. Deans: Tell them about Mel Lastman in today’s paper.

Hon. Mr. Handleman: Mr. Speaker, despite a number of bitter experiences during my life, I think I am going to continue to be accessible to and communicative with the media. I have great faith in their integrity in interpreting what people say to them.

Mr. J. F. Foulds (Port Arthur): Unlike the Premier (Mr. Davis).

Hon. Mr. Handleman: Unfortunately, space requirements do not permit them to publish everything that is said and, with my lack of articulation, I suppose I wasn’t able to get across to the reporter from the Star --

Mr. V. M. Singer (Downsview): Does the minister say that he has any marbles to lose.

Hon. Mr. Handleman: -- that I didn’t mention lack of co-operation, nor did I say that there was any obstructionism. As for losing my marbles, I don’t know that I ever had any.

Mr. M. Cassidy (Ottawa Centre): We had some doubts, too.

Mr. A. J. Roy (Ottawa East): He’ll get along well in the cabinet.

Hon. Mr. Handleman: What I did say, Mr. Speaker, was that I was expressing the same type of frustration which is expressed on the opposite side of the House at the lack of progress. Perhaps I am not as diplomatic as I should be.

Mr. D. C. MacDonald (York South): The minister will learn.

Hon. Mr. Handleman: Perhaps blunt speaking is not the right thing for this portfolio. But I felt, having made tremendous progress in certain aspects of our housing action programme and very little progress in getting municipal agreement to specific propositions, that I should draw to the attention of the press not that they were being unco-operative but that perhaps they weren’t moving as fast as we would like them to.

Mr. Speaker: The hon. member for Grey-Bruce has a supplementary.

Mr. E. Sargent (Grey-Bruce): Mr. Speaker, in view of the fact that the minister has $11 million in the budget for helping unserviced lots and he plans 110,000 housing starts, has he met with the Minister of the Environment (Mr. Auld) to question him on the fact that this will only provide 2,000 lots and we will be 98,000 lots short? What is the minister going to do about it? Is he going to meet with the Minister of the Environment and resolve this or what?

Hon. Mr. Handleman: Mr. Speaker, the amount has been mentioned before in this House, and of course we are again talking about an amount in the Ministry of Environment’s estimates for assistance in sewers and water services. What we have in our ministry is $20 million in our housing action programme facilitating fund, and this is what we are asking the municipalities to come and get. We have asked them to come and get a piece of that action.

Mr. Speaker: The hon. member for Ottawa Centre.

Mr. Cassidy: Could the minister tell us, in view of his comments over the weekend, what is the exact number of the several thousand lots he has hoped to get and how many does he now hope to get through the housing action programme, thanks to the difficulties that he is having with municipalities.

Hon. Mr. Handleman: My hopes have not been dashed, Mr. Speaker. I still hope to have the same X thousands of lots that we were talking about, and hopefully I will be in a position to make that announcement to the hon. member when I get a municipal agreement on paper.

Mr. Speaker: The hon. member for Downsview,

Mr. Singer: Mr. Speaker, does the minister not realize that his stupid diatribe against the municipalities is obviously an effort to shift the blame and that the municipalities cannot build houses by themselves unless they have money to provide services?

Mr. J. R. Smith (Hamilton Mountain): Look around you. Look around you.

Mr. Singer: What is the minister going to do about putting the municipalities in the position where they can supply services?

Hon. Mr. Handleman: Mr. Speaker, that is exactly what we propose to do with our housing action facilitating fund.

Mr. Singer: With $11 million? Baloney.

Hon. Mr. Handleman: There is $20 million. It is available not only for hard service infrastructure but for soft service --

Interjections by hon. members.

Hon. Mr. Handleman: -- and we are quite prepared to sit down and discuss grant negotiations with the municipalities --

Mr. Singer: He doesn’t blame Ottawa, he blames the municipalities.

Hon. Mr. Handleman: -- and hopefully that will be right away.

Mr. Singer: When is the minister going to accept responsibility himself?

Hon. Mr. Handleman: There was no diatribe against the municipalities. I simply commented on the situation --

Mr. Speaker: Order. The Leader of the Opposition, further questions?

UNION GAS

Mr. R. F. Nixon: I have a question of the Premier, in the absence of the Minister of Labour (Mr. Guindon): Has he been kept informed as to the circumstances attending the continuing strikes involving the employees and the management of Union Gas whereby gas has been shut off in certain communities, there has been an exchange of gunfire in one community and in one recent incident the pressure regulators have been tampered with, resulting in an increase in pressure which could have resulted in some violent explosions if in fact safety equipment had not been functioning properly?

Is he satisfied with the role played by the Ministry of Labour in trying to reach a solution to this problem, or is he as concerned as I and other citizens in the areas affected are, that we are going to have to take some remedial steps for the safety of the citizens involved?

Hon. W. G. Davis (Premier): Mr. Speaker, I think we demonstrated the government’s concern some weeks ago when we made it very clear that the personnel of the OPP would be made available to see that there were no dangers. I must confess I haven’t discussed it with the Minister of Labour today. I shall, probably before the day is done. I can only say that the government is concerned about the possibility of danger or other matters occurring with respect to this strike. I would also say, Mr.

Speaker, that everybody would like to see it finished and there is no question in my mind that the minister and the ministry, to the extent that it is possible, are devoting their very considerable talents to this objective.

Mr. Speaker: The hon. Leader of the Opposition.

POTATO SUPPLIERS

Mr. R. F. Nixon: With your permission, Mr. Speaker, a question of the Minister of Agriculture and Food: Has he made himself aware of the stories printed in the Globe and Mail over the weekend indicating collusion among the main potato suppliers in the Metropolitan Toronto area, which in fact appears to be an established cartel involving not only the ordinary wholesale companies but in association with Mr. Joseph Burnett, whose name was recently mentioned in this House in connection with laundering money?

Is he aware that this situation is traceable back to the similar situation in 1968 when the minister’s food council examined the matter and found payments, something called payola, which in fact acted for the restraint of free competition?

Hon. W. A. Stewart (Minister of Agriculture and Food): No, Mr. Speaker, I am not aware of it. I have not seen the story but I will make myself as aware as possible of it and look into it.

Mr. R. F. Nixon: Supplementary: Will the minister look into it in conjunction with the Minister for Consumer and Commercial Relations who might have some special regulatory powers in this regard? Since the food council is concerned, will the Minister of Agriculture and Food report to the House on the matter?

Hon. Mr. Stewart: Mr. Speaker, I will certainly look into this situation and what I have to report will be based upon what we find.

Mr. M. Shulman (High Park): Supplementary.

Mr. Speaker: The hon member for High Park.

Mr. Shulman: In view of the many threats to these potato growers who are foolish enough to attempt to compete with Mr. Burnett, would the minister also refer that matter to the Solicitor General (Mr. Kerr) to see if charges can be laid?

Hon. Mr. Stewart: As I say, Mr. Speaker, I will look into it. I will make no attempts to offer to do anything until I find out what the facts of the matter are.

Mr. Speaker: The hon. member for Wentworth.

HOUSING PROGRAMMES

Mr. Deans: Thank you, Mr. Speaker, I have a question of the Minister of Housing. How does the Minister of Housing explain his statement that there is progress being made in Ontario in the housing field against the backdrop of an overall decline in the number of housing starts in Ontario in February and March of this year over last year?

Hon. Mr. Handleman: Over February and March of last year? Mr. Speaker, I have examined the housing starts and in February and March they seemed to be up over last year. I would have to examine the figures again and check out the hon. member’s assumption, because I did look at the figures just this morning and they appeared to me to indicate a slight decrease in multiple-dwelling units and a large increase in single-family housing.

Mr. Singer: Whatever happened to the speeding up of the process?

Mr. Speaker: The hon. member for Wentworth.

Mr. Deans: I will wait for an answer to come back from the minister.

ACTIONS OF REAL ESTATE AGENTS

Mr. Deans: Can I ask the Minister of Consumer and Commercial Affairs whether he intends to take some action to strengthen the Real Estate Act to ensure that persons who are dealing in the purchasing of housing and who are in fact real estate agents inform prospective buyers or sellers that they are acting on behalf of a real estate agency rather than a private buyer?

Hon. J. T. Clement (Minister of Consumer and Commercial Relations): I am sorry. I don’t understand the import of the member’s question, Mr. Speaker. Agents invariably act on behalf of the vendor. There are exceptions to that arrangement but --

Mr. Deans: Let me refer the minister to the Toronto Sun

article of the weekend, in which it was stated by a speculator in housing that, among a number of the manipulations that are going on, there is a failure on the part of real estate agents to inform prospective sellers that they, the agents, are not acting on behalf of purchasers but rather on behalf of real estate companies; and that, in fact, they are acting as a middleman -- buying, inflating the price, and then selling the property off again. What action does the minister propose to take to try to put a stop to this particular speculation?

Hon. Mr. Clement: An agent acting on behalf of any vendor must by law notify that vendor if he is acting on behalf of any other interested party. If he’s buying on his own behalf or on behalf of another client he must disclose that. If he doesn’t disclose that, he forfeits his commission as well as giving grounds for the lifting of his licence. There are cases pending of a similar nature to that right now, and we prosecute them vigorously.

I think the member’s colleagues who are familiar with the practice of law will assure him that that is a very serious breach of the Act itself, and we won’t tolerate that type of activity by any real estate agent or broker.

Mr. Deans: Is it the intention of the minister to investigate the content of the story to determine the validity of the claim by the real estate agent to ensure that this act will be stopped in Ontario at this time to cut down the cost of housing?

Hon. Mr. Clement: Mr. Speaker, I’m not familiar with the particular story to which the hon. member makes reference. But I’m sure my staff will take a look at it. I’ll make a note to have it drawn to their attention.

Mr. Speaker: The hon. member for Wentworth.

WARRANTY ON NEW HOMES

Mr. Deans: I’d like to ask the Minister of Consumer and Commercial Relations whether it’s his intention to institute a homeowner’s warranty during this year, recognizing that what has been offered by the construction industry is not going to be satisfactory, and that Mr. Basford, frankly, seems to be dragging his heels?

Hon. Mr. Clement: Mr. Speaker, I think it’s incumbent upon this government to implement some form of warranty programme. If no federal programme which is acceptable to us is forthcoming -- and that appears to be the trend in which we are moving -- then I think we have no alternative but to implement some type of warranty programme. I should point out to the House, Mr. Speaker, that I will be meeting in about three weeks’ time with all the consumer ministers across Canada, and this is one of the matters that we have on the agenda as to a provincial programme for each and every province.

Mr. J. A. Renwick (Riverdale): We can’t wait that long.

Mr. R. F. Nixon: Why doesn’t the minister accept the member for York-Forest Hill’s private bill?

Mr. P. G. Givens (York-Forest Hill): Does the minister accept my bill?

Mr. Deans: I have one final question, Mr. Speaker.

Hon. Mr. Clement: What’s the member’s name?

Mr. Speaker: The hon. member for Wentworth is asking questions on behalf of the New Democratic Party.

Interjections by hon. members.

Mr. Deans: Would the minister read his bill?

Hon. Mr. Clement: Yes.

SALE OF COLZA OIL

Mr. Deans: I have one final question of the Minister of Health. Has the Minister of Health been made aware of the ban in Italy on the sale of colza oil? It’s a vegetable oil used as a substitute for olive oil. Is the minister aware that similar types of oils are sold in Ontario, and will he order that they be examined to determine whether similar kinds of side effects might not be occurring from the sale and use of colza oil in Ontario?

Interjection by an hon. member.

An hon. member: That’s a good question.

Hon. F. S. Miller (Minister of Health): The member said it for me.

Interjections by hon. members.

Hon. Mr. Miller: In all seriousness, Mr. Speaker, I am not aware of that oil, but I will be pleased to look into it in case there is some potential risk to the people of Ontario.

Mr. Shulman: Ask Mackey.

Interjections by hon, members.

Mr. Deans: Supplementary question: May I send the minister a bottle of the oil to have it examined?

Hon. Mr. Stewart: What are the side effects?

Hon. J. R. Rhodes (Minister of Transportation and Communications): Is that guaranteed?

Hon. Mr. Miller: I would not accept it.

Mr. Deans: And let me, by way of a supplementary question, ask the minister whether he’s aware that it also goes under the name of rapeseed oil, and it has been claimed that it causes sterility?

Hon. Mr. Rhodes: Show us the bottle. That could have come from Morty’s private stock!

An hon. member: That’s of great concern to us.

Hon. Mr. Miller: I was going to suggest, Mr. Speaker, that he should try some.

Interjections by hon. members.

Hon. Mr. Miller: I recognize it under its old name much better.

Mr. Speaker: Does the hon. member for Wentworth have further questions?

An hon. member: Make sure it’s in the bottle one is supposed to send to his doctor.

Mr. Speaker: The hon. Minister of Colleges and Universities has the answer to a question asked previously.

PUBLIC SERVICE ACT CONFLICT

Hon. J. A. C. Auld (Minister of Colleges and Universities): Mr. Speaker, I was so wrapped up in that bit about the oil that I hope you won’t think this is a slippery answer.

An hon. member: It would not be the first time either.

Hon. Mr. Auld: Mr. Speaker, I’d like to reply to a question raised by the hon. member for Kitchener (Mr. Breithaupt).

In 1971-1972, Dr. D. T. Wright received $39,863 in remuneration from the Ministry of Colleges and Universities while acting in the capacity of chairman of the Committee on University Affairs. Dr. Wright did not receive any other salary or per diem payments through this ministry or any other ministry. The other figures referred to by the hon. member were not received by Dr. Wright, and this fact was specifically set out in the Provincial Auditor’s report for 1972-1973.

The hon. member asked, at the same time, whether Dr. Wright received benefits for consulting work done on the structural steel contract at Ontario Place. In his university work, prior to becoming chairman of the Committee on University Affairs, which I may say is not a civil service position, Dr. Wright specialized in the theory of structures, gaining an international reputation for the design of space frame structures. The architectural design of the dome theatre and forum at Ontario Place called for such a structure. An Ontario firm won the contract and, in turn, asked Dr.

Wright to advise it on some special aspects relating to the strength and security of the building. For his specialist work in this connection he received a professional fee from that firm.

Mr. Speaker: The hon. Minister of Transportation and Communications has the answer to a question asked previously.

Hon. Mr. Rhodes: Mr. Speaker, the hon. member for Nickel Belt (Mr. Laughren) had asked the question. In his absence, I will wait until he returns.

Mr. Speaker: The hon. member for Ottawa East was first.

PROVINCIAL SECRETARIATS

Mr. Roy: Mr. Speaker, I have a question of the Premier. I wonder if the Premier would comment on an

article in the Ottawa newspaper last week referring to statements by the former policy secretary, the member for Carleton East (Mr. A. B. R. Lawrence) and the former policy secretary, the member for St. George.

Mr. Singer: The former member for St. George (Mr. A. F. Lawrence).

Mr. Roy: The member for Carleton East stated that the policy secretariats didn’t work because they were too efficient; they built up too much momentum; and they threatened to overrun the traditional thinking in the party in the Conservative caucus.

Mr. MacDonald: Thinking?

Mr. Roy: The former member for St. George stated that in theory secretariats were good, but they went off the rails because of personality clashes. Now I wonder if the Premier agrees with these comments.

Hon. Mr. Handleman: Is this of urgent public importance?

Hon. Mr. Davis: Mr. Speaker, I am certainly delighted to answer that question of urgent public importance, which is typical of the --

Mr. Roy: The government is wasting a million bucks.

Hon. Mr. Davis: -- questions from the member for Ottawa East.

Mr. Speaker, really if you assess what has happened since the rather innovative approach here with the development of the policy field secretariats, from a very personal standpoint I think they have worked very well.

Mr. Roy: The Premier is the only one who thinks it.

Hon. Mr. Davis: Well I can too! There is one difference, Mr. Speaker, between myself and the members across the House. I happen to know how they are working; they don’t.

Mr. Cassidy: The Premier is the only one; nobody else does.

Interjections by hon. members.

Hon. Mr. Davis: I think, Mr. Speaker, now that I have been asked, I will just take a few minutes to outline some of their functions in that --

Mr. Roy: Yes, well, that is not what the Premier’s colleague said.

Mr. Speaker: Order.

Hon. Mr. Davis: -- obviously it is a matter of urgent public importance. As for the former member for St. George, a very able member of the cabinet, a very excellent constituency person, who moved on to the federal arena where he will, I would think some time in the not too far distant future, become a member of the government in Ottawa --

Mr. J. R. Breithaupt (Kitchener): Is that after the Premier becomes the leader?

Hon. Mr. Davis: -- I think it is fair to state that knowing that individual as well as I do --

Mr. Singer: The Premier can go up there and he can come down here.

Hon. Mr. Davis: Well, I am very flattered that the member for Downsview thinks I might have the capacity to go up there. I really find that I have my hands full here, particularly from the member for Downsview. He keeps me mentally stimulated all the time. I would hate ever to move and miss his contributions.

Mr. Singer: Well, I am glad. I enjoy the Premier’s baiting.

Hon. Mr. Davis: I knew the member would be glad. I could sense the frustrations of the former Provincial Secretary for Justice from time to time. I would say this about the observations made by the former provincial secretary for the resource field who, in my view, is one of the very able people in political and public life in this province, that he made a very --

Interjections by hon. members.

Mr. R. F. Nixon: A little late for that kind of patronizing.

Hon. Mr. Davis: -- a very excellent contribution --

Mr. Speaker: Order.

Hon. Mr. Davis: Mr. Speaker, if the member for Ottawa wherever it is and the Islands wants to interject that the hon. member has left the executive council, one of the great things about the party I happen to lead is that we recognize and are prepared to make changes when we feel the time has come.

I fully appreciate that the member for Ottawa and the Islands envisages himself in the vacant seat of the leader of that party but I will be so bold as to make a prediction that it will never happen because he doesn’t have the capacity to do it. He just doesn’t have it.

In fact, I will go a step further --

Interjections by hon. members.

Mr. Speaker: Order.

Hon. Mr. Davis: I don’t think any of his caucus colleagues do either. I tell members the former Provincial Secretary for Resources Development had so much more talent and ability and commitment to public life in this province that the member for Ottawa and the Islands really has a great deal of nerve to mention his own contribution here in this House and I make no bones about it.

I think it is also fair to state. Mr. Speaker, and I have made this observation before, one of the limiting factors which we think is slowly changing in the role of the provincial secretary is not internally with the decision-making process. The difficulties we have encountered, and I think this would be shared by everybody who has held that particular responsibility, are the political perceptions of their responsibilities not just here in the House, where one doesn’t expect a completely objective viewpoint in any event, but as far as the general public is concerned.

Mr. Roy: It is not working and the Premier knows it.

Hon. Mr. Davis: We think this is in the process of change but as far as the functioning of government is concerned, in their contribution to cabinet and the development of policy, I can only say, Mr. Speaker, it works extremely well.

Mr. Roy: Supplementary.

Mr. Speaker: The hon. member for Sandwich-Riverside.

Mr. Roy: Mr. Speaker, I have just a short supplementary.

Mr. Speaker: If we can depend on a short supplementary answer perhaps we can permit it.

Mr. Roy: My question was short; it was his answer that was long.

Interjections by hon. members.

Mr. Roy: In light of the fact --

Hon. Mr. Davis: I will tell the member, if he is not satisfied, I am not going to be here at 6 o’clock.

Mr. Roy: See that? He is interrupting me again. Order, Mr. Speaker, please.

Mr. Speaker, to the Premier, in light of the fact that we are going to vote something like $1 million in estimates for these three superministries, the policy secretariats, doesn’t the Premier feel he should level with the people of Ontario, save us $1 million and do away with them? Isn’t it apparent to him that he is the only one who doesn’t realize they are not working?

Hon. Mr. Davis: Mr. Speaker, not only is it not apparent to me, I would say with respect --

Mr. Roy: He is the only one.

Hon. Mr. Davis: -- it is not apparent to those who are involved in the process.

Mr. Roy: What do they say here?

Hon. Mr. Davis: If the hon. member wishes to vote against them and to be critical of them because he doesn’t have the capacity to recognize change in administration, he can be my guest.

Mr. Roy: What do they say?

Mr. MacDonald: Mr. Speaker, on a point of order, would you consider adding two minutes to the question period to compensate for the diversion of the Premier in attacking my colleague here when he was answering a question there?

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): What is the member doing himself?

Mr. Speaker: I usually do consider the length of the statement. I did not in that particular case think it was an exceptionally long reply to the provocative question.

The hon. member for Sandwich-Riverside.

An hon. member: It was only irrelevant.

Mr. Roy: The question was relevant.

EMPLOYMENT OF HANDICAPPED PEOPLE

Mr. F. A. Burr (Sandwich-Riverside): Mr. Speaker, a question of the Minister of Labour regarding his interest in drafting legislation which would require large employers to provide a certain percentage of jobs for handicapped and disabled persons. Could the minister give us a progress report?

Hon. F. Guindon (Minister of Labour): Yes, Mr. Speaker, I know that my hon. friend from Sandwich-Riverside has shown a very keen interest in the last couple of years in handicapped people in this province. We have had a number of discussions. I had promised the hon. member that, if at all possible, I would like to consult the labour department in Great Britain. Unfortunately, because of the political climate and because of the election which took place, I was unable to go to London, England, but I do propose to do so at the first opportunity.

Mr. Speaker: The hon. member for Windsor- Walkerville has a supplementary.

Mr. B. Newman (Windsor-Walkerville): Mr. Speaker, may I ask of the minister if he is recommending to his cabinet colleagues that they adopt the same principle insofar as the civil service is concerned?

Hon. Mr. Guindon: Mr. Speaker, we are giving this matter very serious consideration.

I had hoped, as I said, to visit some of the countries where this is being done. Whenever I have a real study made of the situation here in Ontario, I’ll be glad to make recommendations.

Mr. Speaker: The hon. member for Grey-Bruce.

ATHLETIC SCHOLARSHIPS

Mr. Sargent: Mr. Speaker, I have a question of the Premier. In view of the trend of many of our top athletes in Ontario of going to the States on sports scholarships, doesn’t the Premier think it’s about time that we in Ontario had an ongoing lottery to provide funds for these scholarships to keep our athletes here?

Hon. Mr. Rhodes: They can’t play football here.

Hon. Mr. Davis: Mr. Speaker, I think there are two aspects to this question. One is the question of whether a lottery would be the appropriate means whereby one would finance “athletic scholarships.” I would think that if there were athletic scholarships there are probably other ways to finance them.

The really basic question that has not been resolved -- in Ontario at least -- is the question of whether or not the universities are prepared to offer athletic scholarships leaving apart the source of funds. In my own limited experience in a former ministry, I can recall this being raised from time to time, and I happen to be somewhat interested in athletics. The question was always raised as to whether or not a university in this province should, by way of a recognized programme, have athletic scholarships for students in attendance at the institution.

I can recall the former Minister of Correctional Services having some public views on this, and I must confess, Mr. Speaker, I’m of somewhat mixed feelings myself. I regret seeing a number of Ontario students going to Michigan State, Michigan, Denver, some to play hockey, some football, some basketball -- not many -- quite a few track and field, because I would prefer to see them here at our own post-secondary institutions.

I think it is also fair to point out though, Mr. Speaker, and I don’t say this in any critical sense, that athletic scholarship programmes at some institutions in the United States have been abused. I think this is the part that is the concern of the universities in this province -- the question of abuse being built into the system.

I happen to believe in intercollegiate athletics. I think the programmes, quite frankly, should be expanded. I would like to think that no student, really, is prejudiced or precluded from attending an Ontario university by lack of finance and I don’t think that many are, if any. However, when you have free tuition, perhaps other forms of inducements to go to one of the American colleges, it is sometimes difficult for a student here to say no.

As I say, Mr. Speaker, I question whether the lottery would be the right approach. I think, really, it would be a matter for the universities of this province to resolve amongst themselves as to whether or not they wish to build scholarships for athletic competence into their form of student assistance, or student awards.

As I say, I haven’t really given this subject much thought in the last six or seven months. I would be quite delighted to do so and, perhaps, give a more definitive answer. But the universities do concern themselves with this matter because I say very frankly, from some very personal knowledge, the scholarship system in some institutions south of the border has, without any question, been abused. I think all you have to do, Mr. Speaker, is read some of the material from time to time and you will find that’s factually to be the case.

Mr. Sargent: One supplementary: In view of the fact that a lot of American states are using lotteries very successfully, why is Ontario dragging its feet in creating this new source of capital?

Mr. Roy: There’s a lot of Ontario money going outside the province too.

Hon. Mr. Davis: Mr. Speaker, that is, as I say, a separate question. Whether or not there should be an Ontario lottery for some purpose, whatever that purpose is, is something the government has not been neglecting.

Mr. Sargent: You buy lottery tickets any place in Ontario, Mr. Speaker.

Hon. Mr. Davis: I just say we’re not neglecting considerations of that, Mr. Speaker, but I just have no policy statement to about it at this moment.

Mr. Speaker: The hon. member for Parkdale.

EMPLOYMENT OF STUDENTS IN PSYCHIATRIC HOSPITALS

Mr. J. Dukszta (Parkdale): I have a question of the Minister without Portfolio in charge of the Youth Secretariat. As yet no money has been allocated for the unclassified staff in the provincial mental hospitals. Summer students fall in this category. Could he tell me how much of the $9 million allocated for the summer students will be given to employ students in the mental hospitals -- the psychiatric hospitals of Ontario?

Hon. D. R. Timbrell (Minister without Portfolio): Not offhand, Mr. Speaker, but I will get an answer for the member.

Mr. Speaker: The hon member for Lanark.

SALES TAX

Mr. D. J. Wiseman (Lanark): Yes, I have a question of the Minister of Revenue. In regard to the tax-free items that were mentioned in last Tuesday’s budget, could the minister tell us when these items will be tax-free so that we might tell some of the merchants in our area?

Mr. Singer: As of May, he said the other day.

Hon. A. K. Meen (Minister of Revenue): Yes, Mr. Speaker, I hope to have it finished later this week with information out to the merchants of Ontario in the course of next week so that they will be able to bring the reductions into effect on Monday, April 29.

Mr. R. F. Nixon: A very inconsistent policy; I would say hypocritical.

Mr. Speaker: The hon. member for supplementary, yes.

Mr. Wiseman: Could the minister tell me in the case of the $30 limit for a pair of shoes, if a person purchases a $40 pair of shoes, does he pay the tax on the $10 over the $30, or the full $40?

Mr. Cassidy: That is a conflict of interest, because the member sells shoes.

Mr. Shulman: Just buy one shoe at a time.

Hon. Mr. Meen: Mr. Speaker, once the price exceeds the minimum figure of $30, the tax is payable on the full purchase price of any article; just as it is payable on, let’s say, a meal in a restaurant above the minimum figure -- the rate of tax is on the whole of that meal. If it is to be otherwise, then it is a matter of policy for the Treasurer and Minister of Economics (Mr. White) to determine.

Mr. Cassidy: What about one-legged customers?

Mr. E. R. Good (Waterloo North): Can they buy them one shoe at a time?

Mr. Speaker: The hon. member for Downsview.

INTERMEDIATE CAPACITY TRANSIT SYSTEM

Mr. Singer: Mr. Speaker, I have a question of the Minister of Transportation and Communications. In view of the obvious failure of the computerized operation in the BART system in San Francisco, and in view of the failure of the government of the United States, after having spent $57 million in an experiment of its own to provide computerized transport, does the minister have any real reason to believe that his experiment, or the government’s experiment, is going to succeed -- even at the Exhibition, where he is spending considerably less?

Mr. R. F. Nixon: The “Davis train” doesn’t have wheels -- so it is going to work better.

Mr. Givens: That is right.

Hon. Mr. Rhodes: Yes, Mr. Speaker, we have reason to believe that it will be successful.

Mr. Singer: Why?

Hon. Mr. Rhodes: The situation as it involves the BART project employs a technology developed over some 15 years; they were unable to keep up with today’s changing technology. In the case of the Morgan- town experiment, it was basically the same

-- an old technology.

Mr. Roy: The minister didn’t even know about the wheel before he became minister.

Mr. Speaker: The hon. member for Windsor --

Hon. Mr. Rhodes: Mr. Speaker, I didn’t complete the answer. I sat down because I believe the hon. member for York-Forest Hill has some profound statement to make, and I don’t want to interrupt him.

Interjections by hon. members.

Mr. Speaker: The hon. member for Downsview.

Mr. Singer: Well, he is not finished yet, he said.

Mr. Roy: If the minister is going to stand up, he should answer the question.

Hon. Mr. Rhodes: Mr. Speaker, as I said at the outset, we have every reason to believe that our programme will be successful, despite what has happened in the incidents in the United States. We are testing our technology continually. Both projects were referred to in an

article in the Globe and Mail this morning. Both of them went ahead and built their projects without doing adequate testing of their systems. That is not happening in this particular case.

Mr. Singer: Mr. Speaker, by way of supplementary, I was not referring to the difference between the magnetic levitation system and the wheel system. I was referring, in particular, to whatever reason the minister might have to believe that a computerized operation would work here when it hasn’t worked in the United States -- with the best technicians available, with the best technical advice and with the expenditure of far, far more money than even this government is putting into it.

Hon. Mr. Rhodes: Mr. Speaker, for exactly the same reason that we talked about the various modes of moving the equipment. I’m sure the hon. member will agree that computer technology has improved somewhat over the past 15 years; and if he doesn’t believe so, then he is certainly behind the times.

Mr. Singer: That is why they are going to blow up $57 million in the United States?

Mr. Speaker: All right, supplementary.

Mr. Sargent: In view of the fact that BART is 7 1/2 years down the road now on its programme and they are 1,000 per cent wrong on their carrying load, is the minister still committed to this programme? Is he going to go ahead with it?

Hon. Mr. Rhodes: Yes, Mr. Speaker.

Mr. Speaker: The hon. member for Windsor West is next.

Mr. Cassidy: Just a supplementary, Mr. Speaker.

Mr. Speaker: The hon. member for Ottawa Centre on a supplementary.

Mr. Cassidy: The cost of the BART programme having risen by more than double since it was inaugurated, can the minister now give us an estimate of the escalation in the per-mile cost of the GO-Urban system?

Hon. Mr. Rhodes: No, Mr. Speaker, I can’t give that estimate at this time; I will attempt to get the figures for the hon. member.

Mr. Speaker: The hon. member for Windsor West.

Mr. R. F. Nixon: It is escalating.

STRIKE IN GUELPH

Mr. E. J. Bounsall (Windsor West): A question of the Minister of Labour, Mr. Speaker: Would he not agree that Doehler Canada Ltd. in Guelph, on strike since Jan. 29, and wholly owned by National Lead Co. did not bargain in good faith inasmuch as prior to the commencement of that strike it did not offer even one penny per hour increase in wages, and especially since the company’s lawyer is one Ted Stringer, an organizer of the anti-union conference in Hamilton?

Hon. Mr. Guindon: Mr. Speaker, I am not in a position to say whether they have been bargaining in good or bad faith. I’d be glad to look into it and to report to the member.

Mr. Bounsall: Supplementary, Mr. Speaker: Could the minister at that same time report on the progress that he or his ministry officials have been making of late in trying to solve that strike?

Hon. Mr. Guindon: Can the member repeat the question? I didn’t hear it.

Mr. Bounsall: When the minister reports to us on what degree of bad faith the company has been showing, could he also report on the progress he or his ministry officials have been making of late to solve that strike, now some 13 weeks old?

Hon. Mr. Guindon: Mr. Speaker, I have never said we would report on the company’s bad faith in this negotiation. There is no wav I can say that, as the member can realize. However, we would be glad to report and I’d be glad to find out exactly what has taken place lately; and if need be I would even go so far as to call a meeting between parties.

Mr. Speaker: The hon. member for Perth is next.

AID TO TORNADO VICTIMS

Mr. H. Edighoffer (Perth): A question of the Minister of Agriculture and Food: Is the minister considering making funds available, or recommending to the cabinet that funds be made available, to assist the farmers of Hibbert township and surrounding areas hit by the tornado last Sunday? There was considerable damage to houses and barns.

Hon. Mr. Stewart: Mr. Speaker, a disaster policy has been in operation for a number of years. I believe it is administered by the department of the Treasurer and Minister of Intergovernmental Affairs --

Mr. R. F. Nixon: A very ineffectual one; it never cost the government very much.

Hon. Mr. Stewart: -- in which the province matches any moneys that are raised locally by subscription or otherwise.

Mr. Speaker: The hon. member for Lakeshore.

LAKESHORE PSYCHIATRIC HOSPITAL GRANTS

Mr. P. D. Lawlor (Lakeshore): To the Minister of Health, Mr. Speaker, pursuant to our little conversation in the hallway of a few days ago: Has the hon. minister had an opportunity to investigate the conditions, the grants, the pulling back, the confusion as to what moneys are available to the Lakeshore Psychiatric Hospital; particularly with its plans to decentralize?

Hon. Mr. Miller: Mr. Speaker, we had a conversation in the hall the other day, but I don’t recall all those adjectives.

Mr. R. F. Nixon: The question was asked in the House before.

Mr. Foulds: They were nouns.

Mr. Deans: That’s why he doesn’t answer.

Hon. Mr. Miller: I thought they were adjectives, but that explains why the member is a teacher and I am not.

Mr. Lawlor: Mostly adverbs.

Hon. Mr. Miller: One of the statements the member made at that point was that in fact we had cut back budgets at Lakeshore Psychiatric Hospital, and this is not true. On verifying the figures with our staff, I find we increased the budget by about four per cent. At the same time the number of patients being treated was reduced by almost 10 per cent. Now no programmes were eliminated as a result, although a few programmes that were being considered for implementation have not been started; we are continuing with the same slate of programmes as was carried on before.

Did the member want the answer to the earlier part of his question about the land? Is that implicit in this?

Mr. Lawlor: The minister may continue; yes.

Hon. Mr. Miller: Thank you, thank you.

Mr. Lawlor: The minister remembers the nouns now.

Hon. Mr. Miller: Yes, I have trouble with those.

There was a switch of property made between Humber College and Lakeshore Psychiatric Hospital to serve each of the institutions better. A mental retardation facility is planned to be built on property, currently owned by Humber College I understand, some distance from Lakeshore Psychiatric Hospital; and in turn some acreage was given to Humber College for the construction of buildings on property currently owned by Lakeshore Psychiatric Hospital. After studying the needs of both institutions it was felt this exchange of land made good sense and would serve both well.

Mr. Lawlor: Supplementary.

Mr. Speaker: The hon. member for Lakeshore, supplementary.

Mr. Lawlor: On those slated programmes that have been cut back, is it the ministry intention to cut back the programmes for a centre for mentally retarded adults and a forensic centre for the criminally insane at that location?

Hon. Mr. Miller: Mr. Speaker, the member mentioned the forensic programme was to be a new programme, I believe, in talking to me earlier.

Mr. Lawlor: Yes.

Hon. Mr. Miller: This programme is not being implemented at the present time. This is the understanding I was given.

Mr. Lawlor: How about the mentally retarded project -- all right!

Mr. Foulds: Is there a cutback?

Hon. Mr. Miller: There is no cutback that I know of in mentally retarded facilities there.

Mr. Sargent: What does the minister mean?

Hon. Mr. Miller: As the member knows we transferred most of the mental retardation facilities from this ministry to the Ministry of Community and Social Services effective April 1, and therefore I’d have to refer the member to that minister for a specific answer.

Mr. Speaker: The hon. member for Kitchener -- or for Waterloo North I should say.

Mr. Good: Thank you, I accept your apologies.

Mr. Roy: He accepts that as an apology.

SUMMER EMPLOYMENT PROGRAMME

Mr. Good: A question of the Minister of Consumer and Commercial Relations: How much money was allocated under the Experience ‘74 programme for setting up of consumer complaint bureaus in storefront operations this summer to create employment for youth?

Hon. Mr. Clement: Mr. Speaker, a request came in from one of the faculty members at Niagara College for this type of a pilot programme. We advised that particular individual that we had no funding available and referred it to the Youth Secretariat. The Youth Secretariat reported back to me that it endorsed the programme -- the total programme was to cost $11,000, $9,000 of which would have to be approved by Management Board of Cabinet -- on condition that $2,000 would have to be raised locally for administrative costs by the Niagara College people involved.

The last I heard of it, a week or 10 days ago, the people at Niagara College -- and I don’t know the number of administrative staff I’m talking about, whether it’s one or five people -- regretfully were unable to raise $2,000. Therefore, as the matter stands right now, we are reviewing it to see if we are going to proceed with that programme or not.

Mr. Good: A supplementary, Mr. Speaker --

Mr. Speaker: The time for questions has expired.

Mr. Good: Just one supplementary?

Mr. Speaker: The time has expired. I will perhaps recognize the hon. member at the next question period if he wants to ask a new question.

Mr. Roy: When is that going to be?

Mr. Speaker: On Thursday next.

Mr. Roy: Thursday, thank you.

Mr. Speaker: Petitions.

Presenting reports.

Motions.

Introduction of bills.

COMMISSIONER OF THE LEGISLATURE ACT, 1974

Mr. Singer moves first reading of bill intituled,

An Act to provide for the Appointment of a Commissioner to investigate Administrative Decisions and Acts of Officials of the Government of Ontario and its Agencies and to define the Commissioner’s Powers and Duties.

Motion agreed to; first reading of the bill.

Mr. Singer: Mr. Speaker, this is the ninth consecutive time I’ve introduced this bill. Sometimes I think I’m making a little progress, sometimes I’m not quite sure -- but I’m going to persist in it.

Mr. R. F. Nixon: Arthur Wishart almost bought it one year.

Mr. Singer: The protection of citizens and investigations of their complaints in regard to civil servants cannot be overemphasized. The success of this type of office in other jurisdictions, such as the Province of Alberta, has been noteworthy and certainly should be followed now in the Province of Ontario.

BUSINESS CORPORATIONS ACT

Mr. Roy moves first reading of bill intituled,

An Act to amend the Business Corporations Act.

Motion agreed to; first reading of the bill.

Mr. Roy: Mr. Speaker, this is the second consecutive time I have introduced this bill. The reason for this bill is the activities of certain companies that are compelling certain people to give up their fingerprints for the privilege of cashing cheques.

The bill was introduced last year in the hope that it would curtail the activities of these companies in that they could not compel people to give their prints and, secondly, once prints were taken, by controlling what could be done with the prints.

I am told the activities of these companies have extended to the point where they now want to footprint babies, nose-print dogs and even start taking fingerprints from people who are on welfare. We feel, Mr. Speaker, that this activity should be curtailed and controlled.

Mr. Speaker: Orders of the day.

Clerk of the House: The first order, resuming the adjourned debate on the motion that this House approve in general the budgetary policy of the government.

BUDGET DEBATE

Mr. Speaker: The hon. member for Kitchener.

Mr. J. R. Breithaupt (Kitchener): Mr. Speaker, the true measure of the 1974 Ontario budget is not in the rhetoric of the Treasurer’s statement but in his forecast for Ontario’s economy this year. The Treasurer (Mr. White) speaks of “measures to restrain inflation” yet he forecasts the rate of inflation will accelerate to 10 per cent or more this year. The Treasurer claims he has introduced measures “to increase the supply of housing” yet he predicts there will be fewer hoaxing starts in 1974 than there were in 1973.

The Treasurer claims his budget introduces greater equity yet he predicts there will be a 15 per cent increase in unemployment in Ontario this year over last; that is, a rise from 143,000 to 164,000.

I presume, Mr. Speaker, that the Treasurer talks with his friends in Ottawa; that is, his Conservative friends. His national leader spends most of his time trying to throw banana skins under the federal government but the most likely result is that Father Lewis will be tripped; however that is another story. If Mr. Stanfield is correct, inflation is running rampant and it will destroy the middle classes and those pensioners who save for a better future in their retirement.

If the federal Liberals are correct, the inflation rate in Canada is to be compared with that of other nations. We are to be seen as comparatively successful when we see most other nations -- such as Switzerland, Yugoslavia and Vietnam -- suffer through annual rates of 12, 24 and 65 per cent.

Whichever view one may accept, the facts are that Ontario is not controlling its own contribution to inflation. Ontario is not taking the lead that is needed. This government usually claims that its programmes are the best in Canada or in North America or even in the western world. Each minister of the Crown uses the press facilities and those of selected public relations firms to tell our citizens the wonders of Toryism in Ontario. But the failure of our wealthy province to influence inflation pressures is not as well brought before our eight million people.

Quite simply, the solutions offered in this government’s budget will not relieve inflation, will not increase the supply of housing and will not control unemployment. Rather than try to solve the problems of our economy, the Treasurer has chosen to obscure them with insincere and superficial remedies. He has substituted rhetoric for real solutions.

The government’s cynicism is nowhere more apparent than in the claim that this budget will have a neutral economic impact. The Treasurer made the same claim in last year’s budget yet he ended the year with a deficit of $421 million and inflation advanced for our citizens by more than nine per cent in that year. This year, spending will increase by more than $1 billion. The gap between revenues and expenditures will grow by more than 17 per cent and the budgetary deficit will rise by $625 million.

This government will have added more than $2 billion to the public debt in four years, and annual interest payments on the debt have jumped by 177 per cent to $674 million this year.

Mr. R. F. Nixon (Leader of the Opposition): It is a shame. A fiscal nightmare.

Mr. Breithaupt: These uncontrolled spending increases are adding to the inflationary pressures in our economy. In its 1974 economic forecast the Financial Times of Canada says of Ontario, “The most critical problem for the province will probably be to bring public spending into better balance with revenues.” The Chamber of Commerce agrees with the following comment, “What is urgently required is fiscal discipline from governments in Canada.

The current rates of growth of government spending are excessive and have contributed in a major way to domestic inflation.” A recent report by the Ontario Economic Council stated bluntly that rising government expenditures were inflationary in their impact on the economy.

Mr. Speaker, in January of this year, Ontario’s Treasurer said the following to a meeting of Canadian finance ministers:

“I acknowledge the contribution of the public sector to inflation. In its ninth and tenth annual reviews, the Economic Council of Canada recommended reduced expenditure growth in the public sector. I agree with this recommendation.”

Well, as quoted, the Treasurer may agree with the recommendation but he has certainly not heeded it. Last year he increased Ontario’s rate of expenditure growth from 7.5 per cent to 12.7 per cent. This year he has increased the rate again, to 14.3 per cent.

Interim statistics for the last fiscal year indicate the lack of control on provincial government spending. Total government expenditures were about $35 million over budget, and the budgetary deficit was $19 million more than the Treasurer predicted. His own ministry overspent its budget by $13 million. The Ministry of Education overspent by $37 million. Community and Social Services overspent by 15 per cent, or $74 million more than was budgeted. Interest payments on the public debt were $26 million over budget.

Expenditures were also out of control in 1972-1973. The Ministry of the Environment overspent its budget by 35 per cent. The Ministry of Agriculture and Food overspent by 18.5 per cent. Indeed, total government spending that year was some $117 million above the budgeted amounts.

Mr. Speaker, the Treasurer is rather sensitive about the size of the provincial debt. Instead of embarking on another wild spending spree this year, the government should be restricting its expenditures until they are needed to stimulate the economy. The budgeted increase of more than 20 per cent on direct capital expenditures is particularly inappropriate and inflationary.

The Ontario economy is now operating very close to capacity. Demand is outstripping supply in many segments, and bottlenecks are developing in the supply process. The provincial government should not be competing with the private sector for scarce resources. Such competition will only aggravate the existing shortages and drive prices even higher. The expansionary policies that were necessary two years ago to relieve high unemployment are not suitable to our present generally almost full-employment situation.

Those areas in the north and east where unemployment remains high should be assisted with regional development programmes. However, the large provincial deficit for which the Treasurer has budgeted can only generally add fuel to the fires of inflation.

Cost cutting could begin in the Premier’s own office, where the staff has now grown to 58, including his newly appointed press secretary who will cost us $30,000 per year. This press secretary is in addition to a $25,000 per year press aide, who maintains contact with the press gallery at Queen’s Park. The government would be well advised to note the comments of Mr. J. L. Kozlowski in a letter to the Welland Tribune last month. Mr. Kozlowski wrote:

“Why should the taxpayers of Ontario pay for the services of the new press secretary, whose duties will actually involve public relations work on behalf of the Premier (Mr. Davis) and the Conservative Party? This kind of misuse of the public’s money to try to improve a badly damaged image brought about solely by consistently inept and bungling performances by members of the Premier’s party and staff is absolutely ludicrous and irresponsible and typical of a government that has lurched from crisis to crisis since the last election.”

Salaries and wages in the Premier’s office and in the cabinet office jumped 335 per cent in the first two years of the Davis government, and travel expenses multiplied by five times.

The policy secretariats or superministries have been a failure; yet they will spend about $1.3 million annually. Their lack of success was indicated recently when three ministers with the resource development policy area were arguing in public over the appropriate routing for the oil pipeline extension to Montreal.

The government should admit that these secretariats were a mistake. The Premier was able to front-bench his rivals in the last leadership campaign so that two of them have since dropped from sight. Now that his position is secure within his party, he could eliminate these useless appendices to power. This is even more apparent when the sometime Attorney General has now taken over the justice policy secretariat -- which appears to have submerged without a bubble, except for the continuing cost.

This government could save another $17 million by cancelling its Krauss-Maffei magnetic levitation experiment at the Canadian National Exhibition grounds. The Krauss-Maffei system has been seriously discredited as a solution to Ontario’s urban transport problems. Even if it does work, it will be inferior to comparable but less expensive systems already in use around the world. Urgently needed transit developments in Ontario’s cities are being delayed while the provincial government wastes time and money with this experiment.

The pork-barrel payments to Conservative back-benchers for their service on boards and commissions should also be stopped. The recent commission on the Legislature, of which Mr. Dalton Camp is the chairman, found no other jurisdiction where this practice is so overworked as in Ontario.

The member for Dufferin-Simcoe (Mr. Downer) receives $7,000 annually as a member of the Liquor Licence Board of Ontario. The member for Fort William (Mr. Jessiman) gets $5,000 as chairman of the Ontario Northland -- apparently together with many other perquisites as the recent reports in the Globe and Mail have shown. The member for Ontario (Mr. Dymond) receives $5,000 as chairman of the Ontario Science Centre. The member for Haldimand-Norfolk (Mr. Allan) gets $5,000 as chairman of the Niagara Parks Commission. The member for Hastings (Mr. Rollins) gets $5,000 as chairman of the St. Lawrence Parks Commission.

The member for Wellington-Dufferin (Mr. Root) gets $100 per diem when he sits as a member of the Environmental Hearing Board.

In fact, there are only about a dozen members of the Conservative Party in this Legislature who do not get payments of some sort beyond their basic salaries of $22,500. These payments may help them cope with rising prices, but in fact they aggravate inflation in Ontario by adding, if nothing else, to the provincial debt.

Unfortunately, the recent reappointment of the member for Simcoe Centre (Mr. Evans) as a director of Ontario Hydro with a salary of $7,000 is another indication that this government intends to continue its ill-conceived system of rewarding faithful back-benchers.

Last year, Ontario Place lost some $1.7 million, even though entrance fees were increased by 50 per cent. Now, the same bureaucrats who produced that extravagance are promoting Maple Mountain for northeastern Ontario. The government has already spent $250,000 on feasibility studies and, according to the Conservation Council of Ontario, has made significant expenditures to improve road access to the area.

This government must involve the public in discussions about the entire Maple Mountain project immediately. Surely the citizens of the province have a far greater right to know what is going on than the chosen business confidants of the Ministry of Industry and Tourism, who all stand to profit from their proximity to the seats of power in Ontario.

Mr. R. F. Nixon: Don t they know it! Don’t they like it!

Mr. Breithaupt: Certainly the costly errors and expenses that were part of Ontario Place and of the Science Centre in their election year starts must be avoided before Maple Mountain is paraded before us by a Davis government bent on seeking re-election in 1975. The combination of the Krauss-Maffei kiddie cars at the CNE and Maple Mountain for northeastern Ontario will be too blatant, even then, as our citizens are once again bribed with their own money.

Hon. L. Bernier (Minister of Natural Re- sources): The member will regret those words.

Mr. Breithaupt: There are dozens of steps this government should be taking to bring its expenditures under control and reduce its inflationary deficit. I have just referred to a few of them. The greatest savings will result from a realignment of priorities within programmes, rather than the complete elimination of certain expenditure items.

Greater emphasis on preventive health care, for instance, would substantially reduce overall health care expenditures. Another saving would result by cutting sharply into advertising expenses. There was some $2 million spent within Ontario last year. We should eliminate all advertisements that do not either alert our residents to some danger or inform them of the steps they should take to benefit from government programmes.

Mr. Speaker, the soaring expenditures associated with regional governments are all adding to the provincial debt. The programme of this government, whereby regional governments have been imposed throughout Ontario, has aggravated the cost-price squeeze for many goods and services. The attempt to achieve economies of scale by centralizing municipal decisions has backfired, and the dramatic increase in regional government costs are now contributing to inflation.

In Waterloo county, my part of Ontario, the cost of services assumed by the regional government increased by 36 per cent in the first year of regional government.

Mr. R. F. Nixon: Economies of scale, they call it.

Mr. Breithaupt: In Kitchener, costs rose by 25 per cent; in Waterloo they were up by 82 per cent.

An hon. member: Not bad.

Mr. R. F. Nixon: In Burlington it’ll be even worse.

Mr. Breithaupt: In the township of North Dumfries they went up by 120 per cent. Start-up costs in the region were $1.8 million, a quarter of which was paid from the provincial Treasury; the balance was added to the property tax burden of the region. The extension of municipal police services to rural areas allowed the Ontario Provincial Police to decrease its detachment by five officers. But the region added 43 more policemen at a cost of some $300,000.

Mr. R. F. Nixon: How about that?

Mr. H. Worton (Wellington South): That’s economy.

Mr. Breithaupt: Here are some quotations from an

article that was printed in the Kitchener-Waterloo Record on April 11, last Thursday, and which was based on research done by Robert Mackenzie of that newspaper. And I quote:

“Sixteen months ago, before regional government in Waterloo county, the various levels of municipal government provided about 1,750 full-time jobs, employing slightly more than one in every 100 workers of the county’s estimated labour force of 120,000.

“The population and labour force have each grown about three per cent since Jan. 1, 1973, the official start of regional government. But municipal employment has skyrocketed more than 55 per cent to more than 2,740, up about 990, including slightly more than 1,000 who work directly for the region.”

Mr. R. F. Nixon: And the taxpayers pay.

Mr. Breithaupt: Mr. Mackenzie goes into some detail as to the net gains and losses with the appearance and disappearance of the several municipalities. The one further comment that I think is worthwhile in this area concerns the activities in the new city of Cambridge, a municipality which Mr.

Speaker represents. This will suffice:

“The story in Cambridge still is a mystery. A report on current employment in Cambridge as compared with the former municipalities of Gait, Preston and Hespeler, before amalgamation, was prepared about two months ago. However, city officials refuse to make it public.”

Mr. Speaker, the total is presumed to be about 450. Formerly Gait had about 240 employees, Preston had 100 and Hespeler had 26. That means an increase of 23 per cent in total, even after the regional subtractions of police and parks and recreation are considered.

Mr. Worton: What a way to go!

Mr. Breithaupt: And the rate of increase is to continue at five per cent each year, so we are told.

Mr. R. F. Nixon: It’s a spending machine.

Mr. Breithaupt: The experience in Waterloo region is unfortunately not unique. In Georgian Bay township, one resident’s taxes rose by more than 400 per cent, from $49.50 in 1969, before regional government was introduced in Muskoka, to $254 last year. This year the rates are expected to rise by another 173 per cent to $695. In all, a total change of 14 times the original amount in only five years.

In four years of regional government in Niagara, the annual cost of operating the regional municipality, exclusive of the local municipalities, has jumped by 85 per cent; from $22 million to $41 million. In Ottawa-Carleton, spending by that regional government has increased by 88 per cent in five years.

These soaring expenditures affect all of the taxpayers in Ontario, not only those who are living in the regional areas. The provincial Treasury paid some 46 per cent of all municipal government costs last year. This amounted to $1.9 billion and the excessive costs associated with regional government add unnecessarily to provincial government spending which further aids inflation. However, in the past year, when the consumer price index has advanced by the largest single amount in 22 years, this Conservative government has implemented five more regional governments on our people. The costs for this expensive form of municipal involvement are apparently out of control.

The Premier was quoted in the press as having talked recently about the matter of hypocrisy. As an acknowledged expert on the subject, he might have referred to his own Ministry of Health, which restricts the spending increases of hospitals to about seven per cent this year but which will increase its own departmental expenditures this year by almost 13 per cent.

Mr. R. F. Nixon: There’s hypocrisy for you, Mr. Speaker.

Mr. Breithaupt: We can also refer to the 1974 Ontario budget, which begins with the following words -- and I am sure you will recall them, Mr. Speaker -- “The most important problem facing us today is inflation.”

The budget ends with a record budgetary deficit of $625 million.

Mr. R. F. Nixon: They’re trying to have it both ways.

Mr. Breithaupt: Without the courage to stop inflation, this government cannot hope to control inflation in the whole of Ontario’s economy. Provincial government spending constitutes more than 15 per cent of Ontario’s gross provincial product. Strict controls on such a major portion of our economy would not only slow price increases.

Ontario’s government cannot slow the inflationary spiral in the provincial economy until it can find the courage to control the inflation of its own expenditures.

Mr. R. F. Nixon: And until the Treasurer can find the courage to come in and listen to the debate.

Mr. Breithaupt: Such an approach would dampen the psychology that accepts continual price and cost increases as inevitable. It would also reduce the high demand pressures that propel the inflationary spiral.

Besides limiting its own expenditures, the government of Ontario should be reducing the extreme inflationary pressures originating in the business sector.

According to statistics compiled by the federal government, Canadian businessmen propose to relieve the supply bottlenecks that have developed in the economy by a 21 per cent increase in capital investment in 1974.

In some areas of the nation, particularly in the Maritimes, massive capital investment may be beneficial. But in Ontario it would result in even greater inflationary pressures generated by shortages in materials and in skilled labour.

The Canadian Imperial Bank of Commerce noted last fall:

“Labour shortages have become increasingly apparent in various skilled trades and in various regions in Canada ... In addition, the shortages of capacity which are now apparent in a number of industries are also likely to continue for some time.”

Canadian Business magazine agreed in its 1974 forecast for Ontario:

“There is a shortage of materials and specific labour skills and little excess capacity in many industries. That would seem to create difficulties in expanding business activity to the same degree as in 1973.... The preliminary estimate of business spending intentions for 1974 indicates an even larger expansion, particularly in the manufacturing sector. There is a real question whether such a large in- crease can be accommodated, given the shortages of labour and materials.”

Production of steel, which is already in short supply, will only increase by about four per cent this year, and shortages of roofing and insulation materials are expected to continue throughout 1974. Unrestrained business spending can only force prices higher.

The federal government is currently reducing corporate income taxes by one per cent annually to encourage capital investment in those regions of the nation where extra demand can be accommodated. The federal tax has been reduced from 40 per cent in 1972 to 38 per cent this year, and it will be reduced by an additional two per cent by 1976.

This economic stimulus though appropriate in some regions of the country, contributes most importantly to inflation in Ontario.

The provincial government should consider stepping into the area that has been vacated by the federal authorities and increase its own corporate tax by the two per cent that has been given up. Accommodation for developments in northern and eastern Ontario could, of course, be made as deemed necessary.

Such an increase, we expect, would withdraw some $96 million from the business sector in 1974 and would help to reduce the inflationary pressures within Ontario’s economy accordingly.

Although spending reductions will reduce legitimate inflation, the government also must protect consumers from unjustified price increases, and this it has failed to do.

A standing committee of the Legislature should be empowered to function as a provincial prices review board, and it should be provided with the necessary powers and staff. It must not only examine price in- creases that are within provincial jurisdiction, but also recommend action, including rollbacks, to the Legislature.

A provincial prices review board would have been required to approve the recent milk price increase, for instance, after hearing evidence from the Ontario Milk Marketing Board and the other interested parties, including consumer groups. It would also review proposals to increase medical fee schedules or car insurance rates to ensure that such changes were justified by higher costs.

Hon. Mr. Bernier: A page out of the NDP book.

Mr. Breithaupt: The review board would also be able to study pricing practices in specific industries and to recommend a permanent review or control mechanism wherever price-gouging is widespread. Such a review of the apartment situation and rent structures generally should be an urgent priority.

There is already considerable evidence, particularly in the Toronto area, that apartment owners are taking advantage of the extremely low apartment vacancy rate to institute substantial rent increases.

This procedure would give all sectors of our economy a forum for information, for response and ultimately for action.

The 1974 Ontario budget takes a small step towards easing the impact of inflation on the elderly, the blind and the disabled, with the introduction of the guaranteed income system.

Hon. Mr. Bernier: Biggest increase in any province in Canada.

Mr. Breithaupt: The new system, of course, Mr. Speaker, is identical to that proposed by the Liberal Party in October, and we welcome the government’s announcement.

It is appalling that Ontario had not acted until now to create this much-needed programme. It is even more difficult to understand why the 311,000 beneficiaries should have to wait another 2 1/2 months for the programme to be implemented.

This new programme will provide only limited protection against inflation unless the benefits are indexed and adjusted at least annually to offset the full amount of the rise in the consumer price index.

The Treasurer’s vague promise that “the guaranteed income levels will be increased periodically” is not sufficient.

The government should also be adjusting other social benefit payments as prices rise, including Workmen’s Compensation Board payments and family assistance payments.

The GAINS programme, as outlined by the Treasurer, is only a beginning. A retired couple can now receive up to $433.33 per month, but a mother with one child must still subsist on a monthly payment of only $252 under the family assistance programme. There is the additional $20 in federal family allowance payments, of course, but the total remains 42 per cent less than the retired couple receives.

A study of 524 poor families in Toronto, which was made in December, 1971, showed they paid an average of $37 more for rent per month than the provincial assistance budget provided. The amount which was left for food, personal care expenses, clothing, household maintenance, school supplies and emergencies was therefore reduced to about $128 a month.

As a result, some families had as little as 50 cents per person per day to spend on food. The budget allowance for a family of four was increased by $30 in January, 1973, but only $5 of this increase was allocated to shelter costs and the total increase has since been wiped out by inflation.

Mr. Speaker, rapidly rising food costs and prices are the most cruel and most alarming aspect of the present inflation and yet the Treasurer did not even mention food costs in his budget address.

Mr. R. F. Nixon: There goes another busy minister.

Mr. Breithaupt: In low-income families --

Hon. Mr. Bernier: This is what we heard last year.

Mr. Breithaupt: -- higher food prices especially caused a shift to food of lower nutritional value. Results can be devastating. A report prepared by the government of Quebec found, “The higher functions of the brain, logic and reasoning, and some other activities, reading and writing, are greatly compromised in the undernourished child.”

The National Council of Welfare has also reported “The poorly nourished child has trouble paying attention, is more likely to fall asleep in class, is more restless, more irritable and less alert.”

I suppose that could refer to --

Mr. A. J. Roy (Ottawa East): They are all undernourished on the other side.

Hon. W. A. Stewart (Minister of Agriculture and Food): I never knew what was wrong when I listened to the member’s speech before. That is what happened.

Mr. R. F. Nixon: That is what happens to the Minister of Agriculture and Food. He didn’t have his Wheaties this morning.

Mr. Roy: Is the minister talking about food for thought?

Mr. Breithaupt: It could happen, Mr. Speaker, that --

Hon. Mr. Stewart: I am undernourished. That is the problem.

Mr. Breithaupt: -- certain members of the House might be afflicted with those problems but I doubt --

Hon. Mr. Stewart: I thought it was the member’s speeches.

Mr. Breithaupt: -- if it is a lack of nourishment for any of the members opposite.

Food prices have risen 16 per cent in the past year in Toronto; 17.8 per cent in Ottawa and 14.8 per cent in Thunder Bay. In just one year, beef prices have increased by 25 per cent; poultry prices are up 35 per cent; the cost of eggs has risen by 26 per cent; the cost of fresh fruit has jumped 27 per cent; and the cost of sugar soared by 72 per cent.

The price of milk increased from 36 to 41 cents per quart just yesterday, an increase of 14 per cent.

Hon. G. A. Kerr (Solicitor General): Why doesn’t the member talk to Beryl Plumptre? How about he and Beryl getting together for the weekend?

Mr. Breithaupt: Some of these increases have no doubt been necessary.

Mr. Speaker: Order.

Mr. R. F. Nixon: Don’t throw him out. There are few enough of them over there.

Mr. Breithaupt: Yes, I don’t think we would have a quorum if you disposed of the Solicitor General, Mr. Speaker.

Mr. R. F. Nixon: Although on other occasions it might be all right.

Mr. Roy: We might get some intelligent comments, though.

Mr. Breithaupt: In any event, of course, we are here to deal with the business of this province and I think we have an obligation to deal with the things that are of provincial concern. Whether other jurisdictions have their problems or handle them in ways that they think best is really not our problem here.

Some of these increases as I have said, Mr. Speaker, have no doubt been necessary to offset higher costs and others, such as the milk price increase, have been necessary to enable some farmers to stay in business. As the Minister of Consumer and Commercial Relations (Mr. Clement) will discover when he studies the activities of the food industry for 1973 it is apparent that some food price increases have not been justified. These are increases that Ontario consumers will bear, if not very gladly.

Some price increases were in fact apparently not justified and they are now appearing as higher profits in the food industry. Profits of the food processing companies in Canada rose by 81,1 per cent in the fourth quarter of 1973; by about 60 per cent for the entire year.

Maple Leaf Mills, one of the larger food processers, had profits of $7.9 million in 1973 compared with $3.1 million in 1972, a 155 per cent increase.

George Weston Ltd., of Toronto, increased its profits by 86 per cent in 1973 from $18.6 million to $34.6 million. J. M. Schneider Foods increased profits by 35 per cent last year, and Burns Foods increased its profits in the first nine months of 1973 by 24 per cent over the same time period in 1972.

Canada Packers’ profit was up 33 per cent for the nine months ended’ Feb. 1, 1974, over the same period last year.

Officials from these companies and many others should immediately be summoned before a standing committee of the Legislature to justify their enormous price increases. If they were found to be unwarranted, the Legislature should be asked to consider measures to roll back prices in the food processing industry, and a mechanism should be established to review future price increases as I have already suggested.

The government’s study into the economics of the food industry for 1973 must be accelerated to aid the standing committee in its work. The government, if it was serious about inflation would also require food retailers to provide detailed information about their internal economic structures in their annual reports so that consumers would have more information to consider on that subject.

At the retail level, unit pricing should be required by law to assist food shoppers in getting the best value for the money spent. Wasteful packaging should be controlled and in particular, non-returnable cans and bottles should be outlawed. If any such convenience packaging is thought necessary in particular exceptions, the premium should be sufficiently high to discourage all but exceptional use.

Soft drink manufacturers faced sharp price increases for cans and bottles on April 1, but only 50 per cent of the soft drink containers sold in Ontario are in returnable bottles. Bottlers maintain that returnable containers would lower their production costs. Surely we must have a standard returnable soft drink container similar to the standard beer bottle used in Ontario. This would reduce costs.

If inflation in the price of food is to be controlled, we must not only look at the effects in the manufacturing and retail levels. We must also look at the effects on the farmers who are the primary producers in the chain.

One of the most important long-term factors in the spiralling price of food is the loss of prime agricultural land. This government must act now to preserve our best land for agricultural use. Ontario has about seven million acres of prime farmland -- this is equal in amount to nearly one-third of all of the best land available in Canada. But lands are now being used for housing, for hydro rights-of-way, for highways and even for airports. Even successful dairy farmers can make a better living by selling their farms and collecting interest on the proceeds, than by working the land and keeping herds and producing much needed foodstuffs.

Data from the 1966 and 1971 federal census indicates that the Province of Ontario loses 26 acres of arable farmland every hour of every day. The acreage of improved land has dropped by some 9.5 per cent in the past five years.

This dangerous trend must be stopped. As the Ontario Federation of Agriculture has reported:

“It is not only farmers’ incomes that depend on preserving farmland. How land is regulated will also determine how much food will be on the supermarket shelves in the future, and at what price.”

As residential and industrial development occur, a directly proportionate demand for food arises. With every acre of farmland that is consumed by urban sprawl, the ability to produce food is altered although the demand for food is increased.

However, because of the actions of this government, farmers on the fringes of urban development are unable to expand their operations because of the artificially high prices for land and because of the inflated property taxes. Some farmers in Peel county recently expressed the view that these pressures will eliminate their activities within the next six months. It may well be that unless this government acts effectively, some food products may not be available locally at any reasonable price.

The main objective of the government of Ontario should be to keep viable farmland in production. A clear policy is needed to assess the provincial impact of projects such as highways and dams. If that was done, the Minister of Agriculture and Food could also make comments on such matters and not have to restrict his remarks to federal government projects alone, such as the Sarnia to Montreal pipeline.

Mr. Speaker, development should be prohibited on class 1 and class 2 farmland unless it is demonstrated that no other suitable land is available for such development. Property taxes on these lands should be levied at agricultural rates. Methods of compensating farmers for lost development rights should be carefully studied and an equitable solution arrived at in this important area. The cost implications of issuing long-term debentures to farmers whose land is so restricted must be considered by this government

As a short-term solution to production needs, the government should consider enacting legislation that would require farmlands bought or now being held by speculators to remain in agricultural production until development proceeds. The activities of speculators in raw land have contributed to an artificial reduction in agricultural production. These persons buy viable farms, and, in many cases, remove them from active agricultural production. They allow the buildings to become dilapidated and the fields to be overgrown with weeds.

Ontario’s Minister of Agriculture and Food has admitted: “There are hundreds, yes, thousands of acres of good farmland held by developers, speculators, hobby farmers, retired or tired farmers that could be put to use.” But his government has not listened to him. The Liberal opposition agrees with the opinion of the committee on farm classification that land which is not used for production should not be eligible for the same benefits as bona fide farmland. We endorse the view expressed by the Sarnia Observer that “if empty land is purchased and not put into production, it should be taxed as industrial land. Disappearing farmland is a very real threat, one that will need firm laws to stop.”

In the longer term, a major thrust of government policy must be to steer growth away from class 1 and class 2 farmland. Some people advocate doing this by stopping all developments, but this is obviously not a realistic solution for Ontario, where our population increases annually by about 125,000 people. A real provincial development plan is needed to decentralize the growth that contributes to the urban sprawl in the “golden horseshoe.”

We must ensure that all parts of the province share in industrial expansion and in the accommodation of our growing population. Surely all members of this House will agree with me that the use of our prime agricultural lands to develop the industrial and housing sites we need is no longer an acceptable solution. Prime agricultural land is a limited resource, and it is one which we must carefully and wisely use.

Mr. Speaker, the failure of this government to provide an adequate supply of serviced building lots has resulted in a critical housing shortage and in rapidly rising prices for accommodation of every sort. The Ontario Economic Council reported a year ago that by concentrating its efforts on house building instead of on land servicing, the province is “treating the symptoms and not the disease.” The OEC also noted that Ontario “lacks a planned programme of ensuring an adequate supply or serviced land in the correct places.”

The Treasurer announced in last week’s budget that the province will allocate $11 million to “increase the supply of serviced lots” in 1974. His proposal, Mr. Speaker, is practically meaningless. In Ontario, it costs from $5,000 to $6,000 to service a single building lot, especially in the Toronto area. In northern Ontario the costs are, of course, much higher. Even at $5,000 per lot, this pathetic programme will service at the most some 2,200 building lots -- hardly a bold new response.

The Ontario Task Force on Housing reported several months ago that there is “a near crisis in housing” in this province, but the Speech from the Throne and the budget for 1974 have both revealed that this old Conservative government lacks the will to control spiralling land and housing costs.

Everywhere in Ontario, house prices are out of control. The average cost of a home in Metropolitan Toronto has increased by 36 per cent in the past year, an escalation of about $1,000 a month.

The situation in the Kitchener-Waterloo area has been well documented by my colleague, the member for Waterloo North (Mr. Good) in his contribution to the Throne debate, and I shall not repeat those details here.

Other cities in Ontario have also been experiencing alarming house price increases. Shelter costs in Ottawa rose by 22 per cent last year, and in Thunder Bay housing costs went up by 25 per cent. In January of this year, the agency members of the Mississauga Real Estate Board sold twice as many houses as they did last year, but the value of the sales tripled. The average price of resale homes in Hamilton was 21 per cent higher in the last half of 1973 than a year earlier, and in Sault Ste. Marie house costs have risen by 25 per cent in the past 18 months.

I think we would all benefit from a look at the proposal which this government has now brought forward to deal in some way with this problem.

I refer, of course, to the proposed land speculation tax.

While I can agree with this kind of tax in principle, I fear that the programme may contain too many loopholes to have any significant effect on the price of housing.

Unless the tax is coupled with measures to substantially increase the supply of serviced land, it will only underpin the present inflated price levels. Indeed, without a mechanism to prevent its effects from being passed on the house buyer, the tax may even aggravate the problem.

The speculative profits of all developers to date are to be exempted from the tax; so the biggest land owners, including the 13 foreign-controlled companies, which we are told own half of the land available for housing between Oshawa and Burlington, will not pay any tax on their windfall profits.

The select committee on economic and cultural nationalism reported last fall that “through market linkages, hyper-investment in urban commercial developments is putting undue upward pressure on residential real estate prices and shelter costs.”

However, the terms of the proposed tax would not apparently apply to the speculative profits made from the sales of commercial or industrial properties.

The effectiveness of the proposed land speculation tax is further undermined by the exemption of sales where the vendor has made capital expenditures on the property equal to 20 per cent of the acquisition cost.

The tax will therefore not apply to the type of house speculation that is rampant in inter-city areas like Donvale and Cabbagetown in Toronto. Typically, these houses are purchased from lower-income families, then renovated and resold at a significant profit. The cost of renovations often exceeds 20 per cent of the purchase price and the speculative profits would therefore not be taxable under the Treasurer’s proposal.

One house in Cabbagetown, at 410 Sumach St., was purchased for $31,000 in 1972, then renovated and resold last year for $56,900. That is a price increase of 84 per cent. Another, at 435 Wellesley St. E. was purchased in 1972 for $24,000 and resold within the year for $58,000, a profit of 142 per cent.

This type of speculation is particularly a problem, since the displaced low-income families usually have no alternative accommodation but subsidized housing.

Undoubtedly the number of speculative transactions will decrease once the proposed tax is implemented, but a quick calculation, using 1973 figures, gives some indication of the magnitude of the moneys involved.

The president of the Ontario Real Estate Association, who is not likely to over-estimate in such matters, said last month that at least 30 per cent of real estate sales in Ontario involve speculators. Speculative real estate sales therefore had a value of approximately $2.4 billion last year.

If real estate prices across the province rose by an average of 15 per cent during the year, speculator profits were about $360 million. A tax of 50 per cent on these profits would have yielded $180 million, but the Treasurer’s proposed tax is expected to yield only $25 million or 14 per cent of my last figure.

The Treasurer has argued that “the success of this speculation tax will be inversely related to its revenue yield. The smaller the revenues, the greater the desired impact on curbing speculation.”

In fact, he has provided so many loopholes that the revenue from this tax could drop to zero and speculative activity could continue almost unabated in the guise of land development or of urban renewal.

A study of the effect of the land speculation tax on smaller builders illustrates one method by which the amount of the tax will probably be passed on to the home buyer. The role of the smaller builder in providing housing is particularly important in northern Ontario, where only very few companies can afford to finance the complete development process.

The smaller builder who adds services to a building lot must recover his investment at that stage in the development process, and he will then often sell the lot to another builder who actually puts up the house.

In Sudbury, where there are no large builders, the price of an unserviced lot is about $500. It will cost another $500 for the necessary surveying, engineering and legal fees. If the land is not excessively rocky, services may cost another $7,000, plus about $400 for interest charges on the money used for the construction of services. The builder’s total cost, before he starts to construct a house, is about $8,400.

If the present selling price for a serviced lot is in the $10,500-$11,000 range, there will be a profit of some $2,600 for the work he has done. However, the land speculation tax at this stage will cut his after-tax profit from about $1,000 to $500, unless he adds the difference to the selling price of the serviced lot. With the tax structured as the Treasurer has proposed, he will have little alternative but to do just this.

The proposed change in the land transfer tax should discourage the limited number of short-term foreign speculators and hopefully will slow the alienation of our best recreational properties.

However, this tax will likely not deter many of the Swiss, American, Japanese, German and British investors who are competing with Canadian residents to buy real estate in Ontario as a long-term investment.

An apartment building on Kingston Rd. in Toronto, which sold last year for $300,000, was recently purchased by Japanese interests for $1.3 million. Such buyers will not be discouraged by a 20 per cent surtax.

In addition, any foreign company can buy land, withhold it from the market for four years, develop it and then resell it to Canadians. The profits can then be exported from Canada without the payment of either the land speculation tax or the increased land transfer tax.

The proposed change in the land transfer tax is but a pale reflection of the recommendation made by the select committee on economic and cultural nationalism.

The committee said that the ownership of land by other than Canadian citizens or residents should be prohibited. Indeed, how much more of our heritage must be sold off before this government will take really decisive action?

Even a complete prohibition of foreign land ownership and an effective tax on speculative land profits can only slow the rise in the price of housing. In order to reduce and stabilize housing costs in Ontario, the provincial government must ensure that there is always an adequate supply of serviced land available for residential development.

There has already been too much delay. Housing costs in Toronto have already risen by 50 per cent since the provincial Throne Speech of 1972, which promised bold action on the urgent housing problem.

The provincial government has assembled almost 18,000 acres of land for residential purposes, as my leader has so carefully documented on many occasions. There are some 300 acres in Kitchener and some 3,000 acres in the area north of Cambridge in Waterloo region. There are another 1,300 near Oakville.

These lands are being held undeveloped while the near-crisis that was reported last year by the Ontario Task Force on Housing is becoming more and more serious.

This government has badly mishandled its land-banking programme.

The Waterloo assembly removed about 3,000 acres of developable land from a market which was already suffering from a lack of supply. As a result, all the land prices in adjoining areas have increased and supply is almost non-existent.

This government has delayed too long.

The land now being held must be developed for housing needs immediately. If we are to reduce land costs, this government must also abandon its current policy of selling off its land holdings at the prevailing high market prices.

In Metro Toronto, at the Malvern land assembly, building lots that cost about $8,000 to assemble, service and debenture are being sold by the province for twice that amount and more.

Instead of using its land banks to reduce housing costs, the Davis government has been supporting high land prices and collecting its windfall gains like any other speculator.

Mr. E. R. Good (Waterloo North): Shame on the government,

Mr. Breithaupt: This practice must end, but I doubt if it will end until this government ends.

Mr. D. M. Deacon (York Centre): They are the worst speculators of all.

Mr. Breithaupt: The provincial government should not be profiteering from the current land shortage, but should be selling its assembled land at cost in order to lower prices.

A vigorous programme to provide serviced building lots throughout the province is urgently required. This programme should be undertaken by the Ontario Housing Corp.

OHC should build the necessary trunk services for sewer and water as public utilities, and sell them to municipalities in much the same way as Hydro sells electricity to its consumers.

Mr. Deacon: It certainly can’t be the Ministry of the Environment. They won’t spend money on increasing services.

Mr. Breithaupt: Shelter costs are soaring throughout Ontario and the primary cause, as the Ontario Economic Council noted last year, is the scarcity of developed land.

The government must start treating the cause by developing its own land holdings and by initiating a land servicing programme.

Although steps to control Ontario’s land costs are the most urgent priority, action is also required to reduce residential housing costs in Ontario.

Land costs seldom account for more than half of the price paid by a home buyer. The balance is attributable to labour costs and building material costs. The building materials account for about a third of the total cost of house accommodation in Ontario.

Mr. Speaker, the cost of residential building materials used in Ontario has jumped by some 24 per cent in the last two years. The provincial government has not only profited from these price increases through higher sales tax revenues but last year it added another two per cent to the ultimate cost when the rate of the sales tax was increased from five per cent to seven per cent.

The provincial tax on building materials added about $101 million to housing costs in Ontario last year. A house priced at $43,000, for example, became $1,000 more expensive because the province added seven per cent to the cost of the lumber, nails, plaster, concrete and other materials used in construction.

The sales tax on building materials is an inequitable and unjustified addition to the already high cost of housing in Ontario. Building materials used in hospitals, schools and nursing homes are exempt from the provincial sales tax. Building materials used in houses and apartment accommodation should be also.

The provincial government should also be encouraging wider use of inexpensive housing forms, including mobile and factory-built homes. A pre-fabricated three-bedroom home on a $15,000 lot would sell today in Ontario for between $30,000 and $35,000. These are permanent homes, usually set down on a concrete foundation.

A 500-unit community of factory-built homes just south of Barrie has been built to National Housing Act standards and it is so successful that another 150 units will be added this year. The low costs have made this neighbourhood into a popular retirement community as well. In the Waterloo area, a complex of 108 factory-produced homes was completed last month.

But, Mr. Speaker, the building codes of most cities bar such housing not because of structural specifications but because of house and lot size restrictions. Municipalities demand oversized lots, wide streets and the highest quality of services because of their heavy reliance on property tax as a source of revenue. Low cost housing on smaller lots means lower property tax revenues. I would suggest that more communities follow the example of Kitchener by changing the standards and building good quality housing.

Hon. Mr. Kerr: Is that up or down?

Mr. Breithaupt: Satisfactory; I think that is the important word,

The 1974 Ontario budget discussed inflation only in a province-wide context and ignored both the role of regional development as a counter-inflationary force and the related problems of regional disparities in prices and economic growth.

By focusing Ontario’s growth on the Toronto-centred region, the provincial government has bled people and jobs from other parts of the province, particularly the north and east. As a result, unemployment rates in those parts of the province are unnecessarily high and unnatural inflationary demands for accommodation have been created in Toronto and nearby centres. While the area between

Oshawa and Burlington has a 10-year growth rate of 31 per cent, the population of Kingston is dropping by one per cent per decade, and the population of Timmins is declining by seven per cent.

Mr. C. J. S. Apps (Kingston and the Islands): Mr. Speaker, on a point of order, did the member say the population of Kingston was dropping one per cent per decade?

Mr. Breithaupt: That is the information I have.

Mr. Apps: That is absolutely wrong. The member had better check his figures.

Mr. Breithaupt: Perhaps the member for Kingston and the Islands can enter the debate and correct me if the facts are incorrect.

Mr. Apps: Mr. Speaker, on a point of order, I will correct him now.

Mr. Good: The member for Kingston is no more of an authority than the member for Kitchener.

Mr. Apps: I sure am because I live there. I know what the population is in Kingston.

Interjection by an hon. member.

Mr. Apps: The population has increased by 10,000 people over the last 10 years. It’s gone up 1,000 each year.

Mr. Breithaupt: Well, that is the information I have, Mr. Speaker.

Mr. Apps: That’s a far cry from decreasing one per cent per decade.

Mr. Breithaupt: If it is incorrect or not completely accurate, I appreciate the information given by the member for Kingston and the Islands.

Mr. Apps: I trust the member’s other statements are not as inaccurate as that one.

Mr. Breithaupt: I think the member will find they are quite correct. The Kitchener and Guelph areas have grown by about 35 per cent in a 10-year period.

Interjection by an hon. member.

Mr. Worton: It is due to the Liberal members, that is.

Mr. Breithaupt: But Peterborough and Thunder Bay grew only six per cent.

Northern Ontario’s population has dropped from 11.6 per cent of the total provincial population in 1961 to 9.9 per cent last year; and the area east of Oshawa is growing only about half as fast as the Toronto region. This concentration of growth in one small part of the province hurts all regions.

The provincial government must decentralize Ontario’s growth and correct the serious regional imbalances that are occurring in our economy.

Hon. Mr. Kerr: All the figures are suspect now.

Mr. Breithaupt: I am quite sure, Mr. Speaker, that even the Solicitor General will realize that his part of the province is growing much more quickly than are some others.

Hon. Mr. Kerr: Good members.

Mr. Worton: What can one attribute to them?

Mr. Breithaupt: Part of the solution will be in relocating some provincial government activities to these areas. Moving the Ministry of Natural Resources to the north, for instance, would not only stimulate the northern economy but would also result in more responsible government.

A government-run land servicing programme, like the one I suggested earlier, would permit more orderly growth throughout the province. Specifically, it could decentralize growth pressures by providing inexpensive land for housing in eastern and northern Ontario.

An effective programme to decentralize growth must also include stimuli for industrial development and employment opportunities in the north and east. These will require fundamental changes in the economic policies and development priorities of the provincial government.

The Ontario Development Corp. should be transformed from a grantor of funds to an initiator of businesses. ODC should work with private and public agencies to identify development opportunities and carry new projects to the stage where conventional business organizations are prepared to fund and manage them. This would also confront the problem of foreign domination of Ontario’s economy by adding to the number of Canadian-owned enterprises and by developing Canadian managerial skills.

Regional variation of tax policies is also required as part of any serious programme to overcome regional disparity. As one incentive, the five per cent tax credit for investment in machinery and equipment which expired last year should be renewed, but only for goods that will be used in the regions east of Oshawa and north of the French River.

When it was introduced in the 1971 Ontario budget, the investment tax credit applied to all parts of the province. At that time, the then Treasurer said:

“This tax credit approach to stimulating investment, economic growth and job opportunities in Ontario has major advantages over alternative measures. It will have an immediate impact because it produces immediate tax savings to companies that invest in economic expansion. It does not reduce the value of capital cost allowances. It is simple to understand and administer.”

Such an alternative is still required in the north and east, but this Toronto-centred government has again ignored those parts of the province.

The north, as I have mentioned, has 9.9 per cent of Ontario’s population, but produces only 5.2 per cent of the manufacturing shipments in the province. In the east, where some 16.7 per cent of Ontario’s residents live, the value of manufacturing shipments is only 8.5 per cent of the provincial total. A five per cent investment tax credit for companies in those regions would permit them to reduce their tax payments to the province by $5 for every $100 of investment in machinery and equipment and would contribute to a more even distribution of population and industrial growth throughout the province. The provincial revenue loss would be about $30 million.

Regional price inequities must also be overcome if more people and industries are to be attracted to the north. The cost of living in Thunder Bay rose by 8.7 per cent in 1973, almost one per cent more than the price rise in Toronto, with the result that the gap between prices in northern and southern Ontario is now wider than ever. Local newspapers recently advertised pork for 99 cents a pound in Thunder Bay and 78 cents a pound in Toronto. Twenty-six ounce bottles of Pepsi were four for $1 in Thunder Bay and five for $1 in Toronto.

Similar inequities exist in other parts of the north. A 24 oz loaf of white bread costs 41 cents in White River compared with 30 cents in Toronto. A sofa that costs $580 in Toronto is $70 more in Smooth Rock Falls.

Some companies have formally established two-price systems in Ontario -- higher in the north and lower in the south. The Simpsons-Sears catalogue, for instance, lists dozens of prices for identical tools and parts that are anywhere from 50 cents to $25 higher in the north than in the south. These discrepancies exist partly because transportation costs to the north are higher. These different prices would not be a serious matter if incomes in the north were correspondingly higher than those in the south. But the per capita income in northeastern Ontario is $210 less than in Toronto, and incomes in northwestern Ontario are another $240 lower than that.

The provincial government’s response to these discrepancies has been to equalize beer prices across the province. No comprehensive policies have been formulated. The government has not even stated that price equity across Ontario is its goal. It certainly has not indicated that it has any plans to achieve such a goal.

One effective method of sharing cost differences throughout the province would be to reduce the rate of retail sales tax to five per cent north of the French River. The revenue loss from such a reduction would be approximately $37 million for the fiscal year 1974-1975. The same objective could be achieved by increasing the retail sales tax credit available to residents of northern Ontario.

The government should also take steps to relieve the burden of high transportation costs for people who live in the north. Cars cost about $150 more in Thunder Bay than in Toronto and gasoline costs four cents a gallon more than in southern Ontario. The recent oil price agreement reached by the Canadian first ministers will equalize prices between the area east of the Ottawa Valley line and southern Ontario, but prices will remain higher in northern Ontario because of the cost of transporting products from the refineries.

The importance of transportation to northerners is best measured by the large percentage of gasoline sales in that part of the province. Although only 8.5 per cent of the total passenger car registrations in Ontario are north of the French River, industry sources advise that 14 per cent of Ontario s gasoline sales are in the north. Gasoline costs in northern Ontario could be approximately equalized with those in the south by reducing the gasoline tax from 19 cents per gallon to 15 cents per gallon in the north. The revenue loss from this measure would be about $15 million.

These losses of revenue entailed in these measures to promote regional development and to reduce regional disparity should be offset by further increases in mining taxes. The mining tax changes proposed by the Treasurer fail to secure an adequate return for the province’s mineral resources. While the new progressive rates will mean higher taxes for about six companies, another 37 companies will pay lower mining taxes. The mining tax, therefore, becomes a very unreliable revenue source, as it will now be extremely sensitive to the profits of a few large companies.

However, the Liberal Party rejects the position expressed by the leader of Ontario’s third party that a 15 per cent royalty should be collected on the value of all mineral production in Ontario. Such a tax would fail to discriminate between high-grade ores that can be extracted at little cost and the low-grade ores which are far less economical to produce, with the result that many mines will be forced to close.

The Smith Committee on Taxation reported another problem with royalties. Since 1908, Mr. Speaker, the province has not reserved the mineral rights whenever it made grants of land, and all reservations previously made were relinquished in that year. As the committee noted:

“This sequence of events has had a significant effect on the form of mineral impost available to the province. It is well established that a province is constitutionally unable to impose a royalty on mineral production from privately owned land as such a royalty is construed to be an indirect tax. In 1928 the judicial committee of the Privy Council held that a percentage tax on the gross revenue from the sale of coal by a mine was an indirect tax which is ultra vires the enacting province.”

The committee, of which I happened to be a member, concluded;

“For administrative and constitutional reasons ... the imposition of a royalty or gross income tax on the output of Ontario mines is impracticable. A profits tax is the logical alternative.”

However, Mr. Speaker, the provincial government is not taxing the real profits of mining companies, but an artificial profit figure that is arrived at after special deductions for fast depreciation and depletion. Instead, the mining tax should be applied against the companies’ cash flow, or real operating profit, less a portion of actual expenditures on exploration and development within Ontario.

The difference between operating profit and taxable profit is often substantial. In 1972, for instance, International Nickel’s before-tax profit was $98 million less than its operating profit. Falconbridge had an operating profit of $94 million, but was taxed on a profit of only $18 million. Rio Algom’s before-tax profit was $20 million, or $15 million less than its operating profit McIntyre Porcupine Mines had an operating profit of $2.5 million, but for tax purposes this was reduced to a loss of $8 million.

A mining economist has estimated that the 1973 operating profit of mining companies in Ontario was in the vicinity of $900 million. If these companies could deduct 25 per cent of their exploration and development costs which totalled $110 million in 1970, the latest year for which figures are available, and even if the average tax rate was only 20 per cent, a tax on operating profits would generate about $175 million or about twice as much as the revised tax is expected to produce. The province certainly must restructure its mining tax to capture an appropriate revenue from our mineral resources.

With these comments, Mr. Speaker, I have outlined only some of the comments which the opposition has concerning the budget brought down by the provincial Treasurer last week. Other members of the caucus will be making comments, as they make their own contributions to this debate, which will not only elucidate some of the points which I have raised but will, no doubt, add many others for your consideration.

Mr. Breithaupt moves, seconded by Mr. Deacon, that the motion before the House be amended and that all the words after “that” be struck out and the following added:

“This House regrets the lack of any government policy to effectively deal with the problems of inflation in areas of provincial concern;

“This House regrets the government’s failure to provide for an effective review of price increases by using a standing committee of the Legislature for such a purpose;

“This House regrets the government’s failure to have a satisfactory policy to reduce housing costs and review rents and to stimulate new housing construction through such measures as the removal of provincial sales tax on residential building materials and the servicing of lands in provincial landbanks and other areas;

“This House regrets the government’s failure to control exorbitant increases in the costs of regional governments implemented by this government; and

“This House regrets the government’s failure to have any effective programme to equalize the costs of living throughout the province or to plan for the balanced development of northern and eastern Ontario.”

Mr. MacDonald moves the adjournment of the debate.

Motion agreed to.

Clerk of the House: The 10th order. House in committee of supply.

ESTIMATES, MINISTRY OF CORRECTIONAL SERVICES

Mr. Chairman: The estimates of the Ministry of Correctional Services. The hon. minister.

Hon. R. T. Potter (Minister of Correctional Services): Mr. Chairman, as my predecessor, the hon. member for Kingston and the Islands (Mr. Apps), did last year, I intend to review briefly the major developments of the past year and to broadly indicate the directions in which we are going in the correctional field.

The ministry’s annual report for the year ending March 31, 1973, was tabled on Tuesday, Oct. 30 last, and it is not my intention to be repetitious but rather to trace developments from where that document leaves off. In other words, I am covering almost exactly the fiscal year 1973-1974 in my review and looking forward principally over the period for which supply is sought.

Before I do so, however, I want to pay a sincere tribute to the work of the member for Kingston and the Islands while Minister of Correctional Services. Preoccupied as I was with the Health portfolio, I confess that I had not realized the great deal of work that my colleague was quietly pushing forward without fanfare.

It should be borne in mind that during my predecessor’s term of office such innovative measures as the development of group homes and the inception of co-educational programmes in the training schools in Ontario were initiated.

The concept of volunteer workers in our system and the expansion of temporary absence programmes were also encouraged during this time, while the correctional centres in the adult training centres developed new and imaginative programmes.

I was also surprised to discover just how much patient groundwork had gone into the preparations for the fifth United Nations Congress on the Prevention of Crime and the Treatment of the Offender, which is to be held in Toronto in September, 1975. Canada will be the host nation and Ontario the host province to over 2,000 delegates from around the world. I would like the record to show the sustained effort by the member for Kingston and the Islands to make the congress a success and his close co-operation with the federal government on the various details of such an undertaking.

One of his efforts which did come to fruition during his ministerial term of office was the federal-provincial conference on correction, which was held in Ottawa Dec. 12 to 14, 1973. This meeting was the first of its kind in 15 years and was “an indication,” as he told the participants, “of the lack of communication which has existed in the field of corrections.” But his idea at that time won the day and the conference will henceforth be an annual event.

The hon. member was instrumental in having continuing committees established, with Ontario staff representation, on parole jurisdiction; federal and provincial facilities rationalization; services programmes and funding arrangements for young persons in conflict with the law; criminal information and statistics; native offenders; and community-based resource or residential centres.

In the years to come, it will become apparent to everyone -- as it is apparent now to those who work in this field -- that the hon. member for Kingston and the Islands was the man who led this ministry in the movement from institutional care to community care.

Mr. Chairman, this is the all-star record of a remarkable gentleman, and I would like to take this opportunity to salute him for an impressive term of service to the people of Ontario and for a job well done.

As a result of the federal-provincial conference, the Solicitor-General of Canada has assured us that the Ontario Board of Parole will, within the not-too-distant future, assume complete responsibility for the parole of all inmates in the correctional institutions of this ministry. Ontario has long urged that the continuity of care can be assured by giving to the jurisdiction with the responsibility for the institutional care of an inmate, the added responsibility for his subsequent parole supervision -- and the federal government has now conceded this point.