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November 1, 1976

30th Parliament, 3rd Session

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Hansard Transcripts

L103 - Mon 1 Nov 1976 / Lun 1er nov 1976

POINT OF PRIVILEGE

LIQUID WASTE DISPOSAL

PUBLIC HEALTH NURSES’ NEGOTIATIONS

PRESERVATION OF NIAGARA AGRICULTURAL LAND

RACIAL DISCRIMINATION ALLEGATIONS

POLLUTION OF LAKES

FRENCH-LANGUAGE EDUCATION

HURONIA REGIONAL CENTRE

COMMENTS OF OSC CHAIRMAN

REALLOCATION OF JUVENILE INSTITUTION RESOURCES

HIGHWAY 400 EXTENSION

UTDC-ONTC TRAIN DEAL

PAYMENTS TO MILK SHIPPERS

RADIOACTIVITY AT PORT HOPE

FAMILY BENEFITS RATES

ZUCCHINI RECIPE

WESTINGHOUSE ANTI-TRUST SUIT

INDIAN LAND AND RESOURCE CLAIMS

REPORTS

ONTARIO ENERGY BOARD REPORT

POWER CORPORATION AMENDMENT ACT

The House met at 2 p.m.

Prayers.

Hon. Mr. Handleman: Mr. Speaker, I would like to invite all members of the Legislature to join with me in welcoming a distinguished visitor from the province of British Columbia, the Hon. K. Rafe Mair, Minister of Consumer Services, who is in the gallery.

POINT OF PRIVILEGE

Hon. Mrs. Birch: Mr. Speaker, I rise on a point of personal privilege. Last Friday, when the death of a 14-year-old girl was raised in the Legislature, I was very emotional and, indeed, I still am. I do not apologize for the intensity of my reaction. Ministers, after all, are human beings and are touched by tragic loss of life as any other thoughtful person may be.

The Minister of Correctional Services (Mr. J. R. Smith) and I have requested a four-ministry internal investigation as to the events preceding the tragic death raised on Friday. A report on that investigation will be made to the House tomorrow, and it will reflect the findings of officials from the ministries of Health, the social policy field, Correctional Services and the Solicitor General.

Mr. Lewis: I’m sorry, I missed one of the things the provincial secretary said. Did she say an investigation into the events that preceded the death or followed it? I didn’t hear that part.

Hon. Mrs. Birch: I said preceding the tragic death.

Mr. Speaker: Statements by the ministry.

LIQUID WASTE DISPOSAL

Hon. Mr. Kerr: Mr. Speaker, I would like to correct some information I gave to the leader of the Liberal Party in reply to a question asked of me last Friday regarding the proposed liquid industrial waste disposal site in Canborough township.

The hon. member asked if I would agree to having the hearing held under The Environmental Assessment Act rather than under The Environmental Protection Act. I incorrectly replied that the hearings were to be held under The Environmental Assessment Act. The Canborough hearing which is now under way is being held under The Environmental Protection Act, by, as I said, the Environmental Assessment Board. I regret having incorrectly informed the hon. member.

Section 33 of The Environmental Protection Act has been used since 1971 for such hearings and applies directly to waste disposal of all kinds.

The Environmental Assessment Act, as the hon. members know, is new legislation and we have not yet proclaimed the

section which would bring specific private sector projects under the Act.

Mr. Godfrey: Why not?

Hon. Mr. Kerr: I wish to assure hon. members that the review of the environmental factors of this project will be as extensive and thorough under this procedure as it would be under the assessment legislation.

The major difference between the two proceedings as they apply to this case is that the hearings under the EPA will consider the project as it is advanced by the proponent and the board will recommend a course of action to my ministry, rather than making a decision on the proposal as it would under The Environmental Assessment Act.

There may be some confusion at this time as to the responsibility of the Environmental Assessment Board. The board is now empowered to hold hearings under three major Ontario Acts: The Ontario Water Resources Act, The Environmental Protection Act and The Environmental Assessment Act. I don’t intend to go into the details of the three hearing procedures other than to say that the hearing by the board in Canborough is a public forum, will be thorough and will cover much more than the economic and technical aspects of the proposal.

Mr. Speaker: Oral questions.

Mr. Lewis: Perhaps picking up on what was said by the Provincial Secretary for Social Development, may I place the question to her: Can we then assume that in the statement before the Legislature tomorrow the various events, at least in factual form, prior to the occurrence of the death will be dealt with, including the role of Thistletown hospital, the actual judge’s recommendation for the young girl and the role of Correctional Services at the point in which wardship was assumed? Will there be a factual setting out of that kind of information?

Hon. Mrs. Birch: Mr. Speaker, I anticipate that that kind of information will be available for the statement tomorrow.

Mr. Lewis: By way of supplementary, given what I believe to be the extraordinary relevance of it, would it be possible for the minister to release those aspects of the transcript of the referral of the judgement, not that relate to any matters of confidentiality which she would want to provide at the inquest, but of the actual judicial determination?

Hon. Mrs. Birch: Mr. Speaker, I would have to take that under consideration. I am sure the hon. member appreciates the desire on behalf of this government to protect the privacy of this girl’s family.

Mr. Lewis: Of course. That’s why I say only the release of the judicial determination.

Mr. Nixon: Mr. Speaker, perhaps there might be a further question there. As the minister indicated that she felt betrayed when she answered a question similar to this a few days ago, has she inquired as to why she was not informed of the circumstances of this tragic event until it appeared in the newspapers in Toronto two months after the suicide?

Hon. Mrs. Birch: Yes, Mr. Speaker, I have been assured and that also will be answered in our statement tomorrow.

PUBLIC HEALTH NURSES’ NEGOTIATIONS

Mr. Lewis: A question, if I may, for the Premier, Mr. Speaker: Since the dispute in the public sector involving the public health nurses appears to be going on forever, would it be possible for the Premier to call into his office or a place of his choosing, along with the Minister of Labour (B. Stephenson) all the heads of the public health boards across Ontario which have not settled -- 28 or 29 I believe -- in an effort to see whether or not the logjam encompassing all of them might be broken and bargaining be restored?

Hon. Mr. Davis: Mr. Speaker, I must confess that as a local member I became somewhat involved in the discussions in the region of Peel, which apparently have been resolved. Whether the idea of having in the other 26 or whatever number would serve any useful purpose or not, I’m not sure, but it’s certainly a suggestion that I shall consider.

Mr. Deans: Supplementary: Have you any suggestion to make, then, other than the ones that have been made from this side of the House, with regard to ways of resolving the dispute, given that it appears the boards of health have together decided they have no interest in reaching a satisfactory solution to what is a very difficult problem?

Hon. Mr. Davis: Mr. Speaker, I’m not going to defend one side or the other. I think it’s perhaps a little unfair for the hon. member to suggest the boards of health have no interest in coming to a conclusion. I think they have an interest.

Mr. Sargent: Give them the money then.

Mr. Nixon: Might I ask the Premier if one of the alternatives that has been proposed from this side of the House and from the community at large, for compulsory arbitration or arbitration, is one of the alternatives that the Premier might give further consideration to, since the House, being in session, could deal with it without further delay?

Hon. Mr. Davis: Mr. Speaker, this was a suggestion coming from some groups. I think the Minister of Labour answered this question last Tuesday or Thursday, I forget which date. She pointed out the concerns that we have. I recall the views of the Leader of the Opposition and his concern about compulsory arbitration. Quite obviously his party wouldn’t support such an approach.

Mr. Nixon: We would. Presumably you would. So let’s do it.

Hon. Mr. Davis: Well, I would say to the member from Brant, one of his problems is that he presumes too much. I wouldn’t presume that necessarily at this moment.

Mr. Ruston: Now you are saying you won’t then.

Mr. Nixon: What the Premier is saying is, arbitration if necessary, but not necessarily arbitration.

Hon. Mr. Davis: No, Mr. Speaker. That too is one of the difficulties of the hon. member. I didn’t say that.

Mr. Nixon: No, you didn’t say anything.

Mr. Lewis: It bothers us that you should be more progressive on labour matters than they are. That’s unfair.

Mr. S. Smith: You are two of a kind. Big business and big labour.

PRESERVATION OF NIAGARA AGRICULTURAL LAND

Mr. Lewis: May I ask the Premier another question relating to matters discussed in this session? Can you give the House an undertaking that you will make a public determination of the Niagara fruit and grape belt land controversy, the proposal put to you by the Niagara regional government, in a time sufficiently short that this Legislature can debate it before the House rises?

Hon. Mr. Davis: Mr. Speaker, I would like to give the hon. Leader of the Opposition that undertaking. However, being quite realistic and knowing how complicated it is and the need for this to be considered very carefully by government, I can’t give that undertaking. I would like to have some sort of decision -- and I’m just expressing this now without thinking it through very carefully -- whether the decision itself would require or really necessitate any sort of debate here.

Mr. Lewis: Yes, it would. It depends on the decision, doesn’t it?

Hon. Mr. Davis: See, you’re presuming too much too.

Mr. Lewis: No, I am not. I just want to know what it is.

Hon. Mr. Davis: Yes, you are. You’re saying it’s going to necessitate a debate without even knowing what the decision is.

Mr. Lewis: Let me ask the Premier by way of supplementary, what is this incomparable stalling about the agricultural land of the Niagara Peninsula, when last year at this time his Minister of Agriculture and Food (Mr. W. Newman) repudiated exactly the same decision? Why is the Premier taking so long to indicate to Ontario and to Niagara what the determination of government is?

Hon. Mr. Davis: Mr. Speaker, I don’t want, you know --

Mr. Lewis: Be provocative.

Hon. Mr. Davis: -- to be picayune on this, but when the hon. Leader of the Opposition says it’s incomparable, which means that no decision has taken any longer than this --

Mr. Lewis: Incomparable stalling.

Hon. Mr. Davis: -- I have to say that I know other government decisions that have taken longer than this.

Mr. Lewis: Well, you are pushing it.

[2:15]

Mr. Swart: Supplementary to the Premier: Could I ask him if he recognizes that the boundaries issue in Niagara revolves around an official plan, and that as in other official plans it can be changed very readily subject to following a decision. Is he therefore prepared to have some new regulations or legislation developed to give some greater permanency to any decision that is made that is now given by an official plan?

Hon. Mr. Davis: Mr. Speaker, I try to listen very carefully to the hon. member who represents a particular point of view and interest in that area which is not necessarily consistent with that of a lot of his colleagues who surround him.

Mr. Samis: He got elected.

Hon. Mr. Davis: I am referring to his former colleagues on the regional council where the hon. member’s point of view was not necessarily always in the majority.

Mr. Lewis: Are you backing down on Niagara?

Hon. Mr. Davis: I’m not backing down, I am just saying --

Mr. Speaker: Order please. This is a supplementary question.

Hon. Mr. Davis: -- we are not yet ready to tell him -- and I know he wants to know -- what it is the government’s position is going to be. This may come as a great surprise and a great shock to him but the fact remains we are not.

Now, what was the member’s question?

Interjection.

Hon. Mr. Davis: The member wants me to alter those boundaries so that Welland gets larger and the other gets smaller. That’s really what he is saying to me. We really haven’t considered that possibility.

Interjections.

Mr. Swart: Mr. Speaker, I don’t think I got a reply to my question. My question was, is the Premier prepared to change legislation or regulations so that a decision on an official plan for Niagara has some greater degree of permanency than exists under present official plan legislation?

Hon. Mr. Davis: One thing I will say for the hon. member for Welland-Thorold, he has always been a great supporter of regional government until very recently and now he wants us to interfere with the regional government structure.

Mr. Swart: We find it doesn’t work. We want to change it, yes.

Hon. Mr. Davis: Oh no. I’ve known the member so well for so long. He tries to have it both ways whenever it suits.

Interjection.

Hon. Mr. Davis: I would say to the hon. member we really haven’t considered that possibility.

RACIAL DISCRIMINATION ALLEGATIONS

Mr. Lewis: A question of the Minister of Labour, if I may, Mr. Speaker: In this very unhappy situation at Milrod Metal Products Limited -- the charges of race discrimination now coming before the Human Rights Commission -- has the ministry attempted to persuade the company to have them do the time study analysis of that plant by the special firm, Sheldon and Kellogg, to which they had once agreed, rather than by people from within their own corporation which seems to be at the core of the constant upheavals in that work place?

Hon. B. Stephenson: Mr. Speaker, I am not sure at this point that that is at the core of the upheaval at this time. However, both the Labour Relations Board and the Human Rights Commission are presently, at my request, investigating the situation. I anticipate we shall have a report from both of those bodies within the next few days and hopefully will be able to make some recommendations to that company to resolve this difficulty.

Mr. Lewis: A supplementary, if I may: Since this company is now a subsidiary of ITT and -- Well, smile and shake if you will, I want to remind the minister, lest she has forgotten, that since January, 1976, that little plant, Ontario Malleable Iron in Oshawa has been locked out by ITT, and does she think she might deal with this conglomerate in terms of its labour relations and the way it behaves in the province of Ontario in a fairly vigorous fashion?

Hon. B. Stephenson: Mr. Speaker, ITT has obviously some other subsidiaries in the province of Ontario and those subsidiaries have in fact dealt with their labour relations problems quite rationally.

Mr. Lewis: Where are they?

Hon. B. Stephenson: There is a problem, there is no doubt about that, at Ontario Malleable and obviously there is a problem here. We are attempting to find out the root cause of the problems and hopefully we will be able to help the employers and the employees to resolve it.

Mr. Breaugh: While the minister is sorting that out, does she have any advice for those 200 families at Ontario Malleable as to how they feed one another, since they have been locked out without a salary for 11 months now?

Mr. Lewis: It’s not Chile you know, this is Ontario.

Hon. B. Stephenson: Mr. Speaker, there is no doubt about the fact that the senior officials of the Ministry of Labour have been actively involved in attempting to resolve the problem at Ontario Malleable for a prolonged period of time. They are still working very hard at this. There is a degree of intransigence on both sides of this situation which I find unacceptable.

I would hope that because of the active pursuit of the problem by officials of the ministry and by myself, because I have made some pretty disturbing remarks which neither side really appreciates apparently, I believe we will be able to resolve that one eventually. The difficulty is that I hear from a number of employees that they have been bruiting about the statement that they don’t really care whether it’s resolved or not, and I find that extremely disturbing.

Mr. Breaugh: Could the minister clarify that last part of her answer?

Mr. Lewis: Which employees?

Hon. B. Stephenson: The company has said that if it is not resolved within a reasonable period of time it will close the plant, and some of the leaders of the employees’ groups have said, “Fine. Go ahead and close the plant.”

Mr. Moffatt: Which leaders?

POLLUTION OF LAKES

Mr. S. Smith: I have a question of the Minister of Natural Resources. Now that it’s been reported that the state of New York has decided to switch its coho salmon planting to Lake Erie from Lake Ontario because of the Myrex in Lake Ontario, is the minister still continuing to plant coho and chinook, which I believe is the programme at the moment in Lake Ontario, despite the high levels of Myrex?

Hon. Mr. Bernier: I believe the state of New York is not totally moving its plantings from Lake Ontario to Lake Erie. I believe there will be a certain quantity planted in that particular lake. I would say that the question of our planting is being reviewed right at the present time. I hope to have something more positive to say in the next few weeks.

Mr. S. Smith: By way of a slightly related supplementary if I might, now that we hear also that Lake Simcoe is polluted, in this instance with mercury, can the minister assure us that we are now in possession of a complete list of all the lakes in which unacceptable levels of various industrial pollutants have been found, and if not, would he undertake to table such a list?

Hon. Mr. Bernier: I’d be glad to table a list of the lakes that we have in our possession. I would say that our studies are ongoing; reviews of lakes are an ongoing matter within the province of Ontario. We think we have something like well over 100,000 lakes in this particular province. I’m sure the member will agree that it will take some time to assess them all. But what we have, we’ll be glad to table.

Mr. Godfrey: Supplementary to the question: Will the minister also include the streams that empty into Lake Ontario, Lake Huron and Lake Erie -- for example, Duffin Creek and other areas like that which we already know are contaminated?

Hon. Mr. Bernier: Yes, we’ll be pleased to give members all the information we have available on those streams.

FRENCH-LANGUAGE EDUCATION

Mr. S. Smith: A question for the Minister of Education: in view of his statement on October 6 that he would have further statements on French education for anglophones and statements on testing in our schools in the not-too-distant future, can the minister tell us when he intends to come forward with those promised statements?

Hon. Mr. Wells: I will have some statements very shortly.

Hon. Mr. Davis: Do you want us to check the date?

Mr. S. Smith: In view of the emergent situation in Waterloo where, due to the cutback in grants, the board has now cut out its pilot bilingual programme, which means that students who have taken that course during the first, second and third grades will now have no more French until grade 6, which means they’ll pretty well lose what investment they’ve already put in of an educational nature, could he tell us what plans he has to assist Waterloo to keep its bilingual programme going?

Hon. Mr. Wells: I would be very pleased to hear more detailed information about the situation in Waterloo. I have not been made aware of the fact that they have cancelled any programme. Indeed it was at one point that the Waterloo county board, if that’s the board the member is talking about, had in fact cancelled the buses for French-language students who were going to another area. But I’m happy that those buses were reinstated by that board just a few weeks ago.

HURONIA REGIONAL CENTRE

Mr. S. Smith: A question for the Minister of Community and Social Services: Can he tell us whether the report which he had commissioned on the Huronia mental retardation facilities is prepared now -- it was presumably only going to take a short time -- and will he be making it public?

Hon. Mr. Taylor: No, the report has not as yet been completed. It is being written. It did take a longer period of time than we anticipated. That was because Dr. Willard was anxious to ensure that everyone who wished to be heard from was heard from. I think he took something in excess of 175 interviews from people who were concerned about that particular operation. He also was sick for a while and that delayed the report as well, but I do expect it soon and I can assure the member that it will certainly be given the consideration of my ministry and government.

Frankly, my general view is that matters such as this should not be kept under wraps, if that’s the suggestion the member may be implying.

Mr. S. Smith: By way of supplementary, although I appreciate the minister’s general view about the distinction between information and intelligence -- I think I have heard it at one or two points -- can we be given some guarantee that this report will be made public?

Hon. Mr. Taylor: I am not in a position to guarantee anything --

Interjections.

Hon. Mr. Taylor: You smile at that. All I can guarantee the member is that it will be acted upon in the best interests of the people of the province.

Mr. Lewis: Does the minister realize that almost single-handedly, as a minister, he is a walking testament to the need for a freedom of information Act in this Legislature?

Mr. Speaker: Order, please. That is not supplementary to the question.

Hon. Mr. Taylor: May I reply that I have heard other accusations with equally little foundation in fact or truth.

COMMENTS OF OSC CHAIRMAN

Mr. S. Smith: A brief question for the Minister of Consumer and Commercial Relations, Mr. Speaker: Is he aware of the comments made last month by Arthur Pattillo, the chairman of the Ontario Securities Commission, in which Mr. Pattillo expressed disappointment and said, “I think it is unfortunate that [basically, the essence is] Bill 98 was not proceeded with past first reading”? He feels, as the minister may know, that this is hurting the investment community in this province. Could the minister comment on that speech?

Hon. Mr. Handleman: Yes, I am familiar with the speech. I don’t agree with the conclusions drawn by the hon. member. Mr. Pattillo did express disappointment that it was not re-introduced at this session. He knew that when it was introduced it was for first reading and for submissions and discussions which we have had with members of the investment community.

There is a tremendous amount of amending to be done and my position is that there would be no point in introducing it again unless we were sure the time constraints would permit us to pass it. Since they will not permit us to pass it, in view of the heavy workload of the standing committee on justice, it will probably not be reintroduced until next spring at the earliest.

Mr. S. Smith: By way of brief supplementary, is the minister aware of the consternation it is causing in the business community, which put considerable time into making submissions in order to improve this bill? Does he know, for instance, of the editorial in the Financial Times which says Ontario’s delay in introducing some of these worthwhile amendments is a disservice to investors in all provinces since Ontario takes the lead? Surely something as important as this could be proceeded with?

Hon. Mr. Handleman: Mr. Speaker, I am fully familiar with the editorial comment which has been made. I have been in touch with some of the ministers in other provinces. My understanding is that some of the other provinces are quite prepared to take our Act -- and they are welcome to it -- and introduce it and have it debated. We think there’s no time in this session to introduce it and unless I have the assurance of the hon. members opposite that there would be no debate and no amendments there isn’t time to take that kind of legislation through in a short session.

Mr. Eakins: This is not the closing of hospitals.

REALLOCATION OF JUVENILE INSTITUTION RESOURCES

Ms. Sandeman: A question for the Minister of Correctional Services: Could the minister please explain to us what the plans of his ministry are with relation to children now in training schools under

section 9 of The Training Schools Act, particularly in the light of the increasing evidence that many children are inappropriately placed in training schools under that section? Does he still intend to follow his policy, stated on April 13 of this year, of maintaining 1,100 beds in the training schools for the foreseeable future?

Hon. J. R. Smith: Mr. Speaker, the whole matter of our capacity and the fact that the schools we are operating at present are under capacity -- even since we closed Grandview, they are still under capacity except Cecil Facer -- is constantly under review.

Ms. Sandeman: A supplementary: The minister didn’t address himself to my question. Grandview had already been closed when he made that statement in April. What plans does he have for reviewing the situation of children in the training schools under

section 9 if they are inappropriately placed in that setting?

Hon. J. R. Smith: We have no further plans for

section 9 children.

[2:30]

Mr. Lewis: Supplementary: Even in the light of what has happened, does the minister have no further plans since he sees how inappropriate that placement was?

Hon. J. R. Smith: As a result of what has happened at the Kawartha Lakes School, this is one of the things I intend to turn my attention to -- to make a complete review of

section 9 and whether or not it is being used --

Mr. Reid: I thought that was being done already.

Hon. J. R. Smith:

Section 8 children are being brought into the training school system under

section 9.

Mr. S. Smith: He doesn’t mean to betray you; he just doesn’t know any better.

HIGHWAY 400 EXTENSION

Mrs. Campbell: Mr. Speaker, my question is to the Minister of Transportation and Communications. Considering our discovery in January of this year of some 24 acres of borough and private land in the path of the proposed Highway 400 extension north of Eglinton Avenue, will the minister tell us what the present status of this property is and how much money will be required to purchase it?

Hon. Mr. Snow: Mr. Speaker, I am not completely sure I heard all of the member’s question. I think I heard the general content of it. There is, as I believe has been stated before in this House, one parcel of private ownership land on the Highway 400 right of way north of Eglinton Avenue. All the other land is either owned by the ministry or by the municipalities. At the present time preliminary planning is under way for that

section of the road from Jane Street down to Eglinton, and I believe the alignment of the private lands that are required has just been finalized. The property request has gone out to our property people to purchase that land, and I don’t believe any price has been established on it as of yet.

Mrs. Campbell: Supplementary: Is the minister aware that an official in his ministry has advised us that the land required for the Highway 400 extension had been set aside by the borough of North York specifically for roads, while the borough tells us that it is presently designated green belt? Just what is the status of this land?

Hon. Mr. Snow: I can’t explain that particular discrepancy in the information that the hon. member has received, but I shall look into it.

UTDC-ONTC TRAIN DEAL

Mr. Wildman: Mr. Speaker, I have a question for the Minister of Transportation and Communications. Can the minister confirm whether or not UTDC will make a profit of about a quarter of a million dollars per year from the Ontario Northland Railway on the leasing arrangements for the 15-year-old diesel trains purchased in Switzerland? Does he anticipate, if this is the case, ONR having to raise their fares in order to pay the $1-million-a-year bill?

Hon. Mr. Snow: Mr. Speaker, I know where this question was derived from, and I am sure if the hon. member had taken his pencil and paper to figure out the matter a little bit he would have soon come to the conclusion that the UTDC will not be making a profit of a quarter of a million dollars, as I believe he stated, on the leasing of the four trains.

The four trains were purchased by UTDC for, I believe, something in the neighbourhood of $3.7 million to $3.8 million. They are to be leased to the ONTC for a five-year period at a rate of approximately $1 million per year. Obviously there is a difference of about $1.2 million between what the UTDC will receive for the five years and what they paid for the trains.

Of course, taken into this calculation is the cost of financing the trains, the amortization of the trains over the five-year period, as the trains are to be sold -- or at least the ONTC is to have an option to purchase the four trains at the end of the five-year period at $100,000 per train. In effect, the ONTC is not only leasing the trains, it is also amortizing the purchase price of the trains over the five-year period, which must be taken into consideration. Any profit that might be derived by UTDC is very minimal indeed.

Mr. Reid: Supplementary: Can the minister explain why he’s going through all this accounting shuffle? In fact, would the minister not agree that all he’s doing is causing higher expenses and trying to improve the balance sheet of UTDC, and that if such a programme should have gone ahead it should have been done by the ONR and that he is trying to confuse the taxpayers by trying to plump up the balance sheet of UTDC?

Hon. Mr. Snow: No, I wouldn’t agree with that statement at all, Mr. Speaker.

Mr. Wildman: Supplementary: Can the minister explain why the ONR couldn’t purchase these trains directly itself, instead of going through UTDC?

Hon. Mr. Snow: Mr. Speaker, the trains are being purchased from the Swiss National Railroad in Switzerland. Certain modifications are being made to the four trains in Switzerland before they will be delivered to UTDC. The reason for UTDC handling the arrangement is because of its contacts in Switzerland, the fact that it is presently dealing with the Swiss railroad company and the Sig Corporation in the development of the prototypes for the TTC streetcars.

They have a staff available to supervise the modifications of the trains in Switzerland, and it was a much better and cheaper arrangement to have UTDC carry out these negotiations and the upgrading of the trains because of their people already located over there.

Mr. Reid: Would the minister not agree that there are serious accounting difficulties involved in this? Is he aware of the auditors’ report on UTDC, in which they say they are very concerned about the accounting practices of UTDC, that in their opinion this practice is not in accordance with generally accepted accounting principles, and that, again, the UTDC is trying to confuse and mislead the public and that its accounting practices are already suspect by the accounting firm? What is the minister doing about those things?

Mr. Cunningham: What’s going on over there?

Hon. Mr. Snow: I don’t know how to answer all those questions at once. No, I wouldn’t agree that UTDC is trying to mislead anyone and I wouldn’t agree that there are any accounting complications --

Mr. Reid: What about the auditors?

Mr. S. Smith: Read the auditor’s statement.

Hon. Mr. Snow: If you’ll just hold your britches for a moment. There is no confusion whatever in the accounting arrangements for the purchase of the four trains by UTDC and the leasing of the four trains with the option to purchase to the Ontario Northland.

Mr. Reid: You are just juggling figures.

Hon. Mr. Snow: I don’t think anything could be a simpler business arrangement than that. Mr. Speaker, with regard to the auditor’s notes in the UTDC financial statement, I’m well aware of those. I don’t believe the hon. member is right in saying the accounting practices of UTDC are suspect. I don’t think the auditor gives that impression at all.

The auditor draws to our attention the fact that certain costs involved in the development of certain engineering projects are being carried on the books of the company as costs relating to that project which will be recovered from the sale or the development of those particular products. UTDC is strictly a research and development organization. We realize that perhaps if General Motors was developing a new automobile --

Mr. Reid: Why are they funding the ONR?

Hon. Mr. Snow: -- it would not be using that same type of accounting procedure.

Mr. Reid: That’s pretty slim.

PAYMENTS TO MILK SHIPPERS

Mr. McKessock: Mr. Speaker, I have a question for the Minister of Agriculture and Food: In view of the recent announcement by the Quebec Minister of Agriculture that he is guaranteeing now and forever the revenues of his farmers in paying industrial milk shippers this year 40½ cents per hundredweight on in-quota milk, plus paying all penalties in any in-sleeve production, would the minister consider doing the same for Ontario industrial milk shippers?

Interjections.

Hon. W. Newman: Mr. Speaker, in order to answer the member properly, first I’d like to point out that the province of Ontario led the way in putting up a guaranteed bond for the in-sleeve production to be released --

Interjections.

Hon. W. Newman: -- from the Ontario Milk Marketing Board to the milk shippers of the province of Ontario. That guarantee could amount to $10.4 million. That was done by us first. The same offer was made to all the other provinces. They did not do it.

Second, I was the one, with the co-operation of the Ontario Milk Marketing Board, who asked Ottawa to release --

Mr. Nixon: The farmer’s friend.

Hon. W. Newman: -- the four million hundredweight of milk on a pro rata basis to the industrial shippers across this country --

Mr. Sargent: Good for you.

Hon. W. Newman: -- which means 127 million pounds to the producers of the province of Ontario. The Ontario Milk Marketing Board is meeting, I believe, tomorrow and Wednesday to try to work out a formula for the best way to distribute this 127 million pounds of milk --

Mr. Good: Last week you told us it was Thursday and Friday.

Hon. W. Newman: -- to the producers of this province.

Mr. Riddell: Maybe he read the letters I sent.

Mr. Speaker: Order, please.

Hon. W. Newman: I have also met with the board to discuss with them how I feel they could best distribute this quota.

Mr. McKessock: Supplementary: In view of the fact that the minister indicated that Quebec has followed him on the in-sleeve coverage, would he consider following them now on the 40½ cents per hundredweight?

Interjections.

An hon. member: There’s an election on now.

Hon. W. Newman: You know, I won’t even comment about the election. I’ll just comment on the national supply management committee. There is an agreement between Ottawa and all provinces and my understanding about this 40 cents, if it is paid out and as the Quebec Minister of Agriculture is no longer going to be seeking office, I’m not exactly sure what’s going to happen with that --

Mr. Sargent: Answer the question; answer the question.

Interjections.

Mr. Speaker: Order, please. Order.

Hon. W. Newman: The national supply arrangement committee, under the Canadian Dairy Commission, says if they allow payments to be made by a province directly to producers it is breaking the national agreement. If they’re breaking the national agreement, then I will ask Ottawa to step in in this particular case, which I will be doing this week. We have no indication at this point in time that the amount of money has been paid out.

Mr. McKessock: Supplementary: If the federal government does allow the Quebec government to pay this, will the minister follow suit and pay the same?

Hon. W. Newman: Listen, I don’t want to destroy the national programme on milk in this country --

Mr. Nixon: You can’t do less.

Hon. W. Newman: Oh, listen, you fellows really don’t understand it, do you? You really don’t understand it. You would destroy for political expediency the milk policies of this country. Two years down the road, we’d be in chaos, and you know it.

Hon. Mr. Welch: Shame, shame.

Mr. Nixon: Why doesn’t the minister resign?

Mr. Speaker: Order, please. Order.

RADIOACTIVITY AT PORT HOPE

Mr. Yakabuski: Mr. Speaker, I have a question for the Minister of Health: Because it is common knowledge that the Port Hope cleanup has begun and that already thousands of tons of material have been removed from sites in that locality and dumped in the --

Mr. Singer: In Renfrew.

Mr. Yakabuski: -- in property in the Chalk River area belonging to Atomic Energy of Canada, I’m just wondering and I want his assurance, that we are not just transferring --

Mr. Warner: Question, question

Mr. Yakabuski: -- the Port Hope problem to Renfrew county.

Mr. Nixon: Never.

Mr. Moffatt: No. They’ve already got a problem.

Hon. F. S. Miller: Mr. Speaker, the responsibility is federal. I think that should be kept clearly in mind when the hon. member is discussing the issue in his riding.

Interjections.

Mr. Singer: Good answer, that.

FAMILY BENEFITS RATES

Mr. McClellan: I have a question for the Minister of Community and Social Services. It has been 17 months since the family benefits rates in Ontario were raised in May, 1975, and during that period the consumer price index has gone up 10.7 per cent. I want to ask the minister why there has been such a delay in raising the social assistance rates in the province and whether he will assure us that he will raise those rates this month to alleviate very real hardships that are being experienced by social assistance recipients.

Mr. S. Smith: He can’t assure you of anything.

Mr. Wildman: Can’t guarantee it.

Mr. Speaker: Order, please.

Hon. Mr. Taylor: I sure wouldn’t guarantee the member for Hamilton West anything.

Interjections.

Mr. Sargent: That wasn’t very nice.

Hon. Mr. Taylor: Well, you don’t blame me, do you?

Mr. Speaker: Order, please. The question’s been asked.

Mr. S. Smith: That’s as good as the Premier’s remark about chickening out.

[2:45]

Hon. Mr. Taylor: As members know the family benefit rates are not automatically indexed so there are no automatic increases depending on fluctuations in the cost of living. However, they are periodically reviewed as members very well know.

Mr. McClellan: Seventeen months.

Mr. R. S. Smith: Seventeen months is a little more than periodical.

Hon. Mr. Taylor: I can assure the House that that policy has not changed.

Mr. S. Smith: He can’t assure you of anything.

Mr. McClellan: Mr. Speaker, to that non-answer, I wonder if the minister, when he gets around to reviewing the rates, would take into account the publication by the Ministry of Housing released today, Rental Market Survey? I want to ask the minister whether he’s seen that and whether he realizes that the rental rates which he pays under his family benefits legislation are about half the average rent levels in the metropolitan area and whether he will assure us that he will take that into consideration when he revises the rates, I hope again this month.

Hon. Mr. Taylor: May I say in response, that no person should know better than the member for Bellwoods, having worked as a social worker, that the amount of money or the breakdown for rent and other items is considered. However, he should also know that if one is going to earmark a specific lump sum for rent across the board, there may very well be a tendency for landlords to meet that target even though they may be charging less. Really what counts in the final analysis is the overall lump sum payment that is given to people.

Mr. Lewis: You are a great social services minister.

ZUCCHINI RECIPE

Mr. Good: Mr. Speaker, a question for the Minister of Agriculture and Food: This has to do with an August 9 release from his ministry. Is the minister aware that the rather exotic and unusual recipe for zucchini squash as published and which is purported to have been developed by the ministry is the same as a recipe which appears on page 59 of The Cooking of Vienna’s Empire, published by Time-Life Books, New York city, copyrighted in 1968?

Hon. Mr. Handleman: Plagiarism.

Mr. Speaker: Order, please. We can’t hear the man.

Mr. Good: I’d like to ask the minister the same question that was asked me: Does the minister not feel that there’s no reason or excuse for his ministry to be indulging in the rather dishonest practice of plagiarizing recipes?

Hon. W. Newman: Mr. Speaker, I consider this of the most urgent public importance and I’ll be glad to answer the question. Yes, there was a recipe put out by the ministry called --

Mr. Nixon: You can’t blame this on Gene Whelan.

Hon. W. Newman: Aren’t you glad you separated parties? Anyway, the recipe is called zucchini with dill sauce. This is the one the member handed to me the other day. We’re looking into it. I understand there might be some interest by another group but I’ll suggest my wife has a better recipe than this one.

Mr. Good: Has the minister received a letter yet from the legal department of Time-Life book publishers?

Mr. Singer: A writ.

Hon. W. Newman: No, we have not.

Mr. Good: Well, you’re about to, I believe.

Mr. Nixon: They are going to take it to the Supreme Court.

Mr. Speaker: Order.

WESTINGHOUSE ANTI-TRUST SUIT

Mr. Burr: A question for the Minister of Energy regarding Westinghouse Electric Corporation’s anti-trust suit filed recently, accusing 29 major uranium-producing companies, including some in Canada, of forming a cartel to fix prices. The question is: Does the minister know which Canadian companies are being sued?

Hon. Mr. Timbrell: No, Mr. Speaker, I don’t. This is a matter strictly and purely within the prerogative of the federal government.

Mr. Burr: A supplementary: If it turns out that Canadian companies have been indeed charging exorbitantly high prices, not only to the American power companies but also to Ontario Hydro, will the minister seek to recover the over-payments which have been charged against Hydro?

Hon. Mr. Timbrell: I think the hon. member is, first of all, prejudging the net effects of the action in the United States. I think perhaps he would be well advised to look at some of the background of that action and why Westinghouse has launched it at all, to look at some of their sales and some of the agreements -- perhaps questionable agreements -- they made five and 10 years ago for the provision of fuel. I think it’s very premature and very hypothetical at this point.

INDIAN LAND AND RESOURCE CLAIMS

Mr. Sargent: I have a question of the Minister of Natural Resources. On June 3 I asked the minister if there was any reason why the cash payment can’t be made to the Indians now concerning the lands acquired from the Indian reserves by the ministry over the years in the Bruce Peninsula. He very adeptly stick-handled around the goal a bit and finally said: “These are being resolved by agreement with the three parties” -- that’s the feds, this government and the Indians. “Once that is resolved and clarified, then we will be able to make payments to those Indian bands whose funds are being held in trust on their behalf.”

I am continually having to phone down to get cheques from Indian Affairs to have them balance their books. Why in hell can’t you pay them the money you owe them?

Hon. Mr. Bernier: I have to tell the hon. member that these discussions are very complex, as he well knows. They are still going on and we are as anxious to clear up the matter as he is. I can assure him that we will do everything we can to expedite the situation.

Mr. Sargent: That isn’t good enough. If they pay out money they have to have it coming in.

Mr. Speaker: The oral question period has expired.

Petitions.

Presenting reports.

REPORTS

Hon. Mr. McMurtry tabled the report of the Public Trustee for the year ended March 31, 1976.

Hon. Mr. Parrott tabled the financial report for the University of Waterloo and the University of Western Ontario for the year ended April 30, 1976.

Mr. Speaker: Motions.

Introduction of bills.

Orders of the day.

ONTARIO ENERGY BOARD REPORT

Consideration of the report of the Ontario Energy Board respecting Ontario Hydro bulk power rates for 1977.

Mr. MacDonald: Let me remind the House of two basic points to begin with, and then I want to zero in on what I think is the real focus of this debate. Members of the House will be aware of the fact that Ontario Hydro requested a rate increase for the year 1977 of 32 per cent. This was submitted to the now-required review by the Ontario Energy Board which reduced it to 30 per cent. Secondly, Ontario Hydro is in something of a financial difficulty at the present time.

I think this must be frankly acknowledged at the outset so that one can put any comments and any proposals with regard to easing this rate increase within the context so that they can be presented responsibly and can be judged to be responsible.

As we learned in the select committee, particularly in the second half of our sessions in the first six months of this year in testimony from many different officials of the corporation, Ontario Hydro is experiencing financial difficulties because of the fact that its revenues are dropping and its costs are continuing to rise. Their revenues are dropping because Canada and Ontario are tending to experience now somewhat in lag behind that of the United States a rather significant drop in the industrial use of power because of the whole economic slackness of the last year or so.

Secondly, to some degree, at this point rather inestimable and I suspect rather small, there is some impact on the whole ethic of conservation. So Hydro’s sales are dropping and therefore their revenues are dropping. And that, combined with a continued rise in costs, in keeping with rising costs generally across the board, means that Hydro’s net position is a difficult one.

Now, having said that --

Mr. Deputy Speaker: Could we have some order in the chamber, please? There are far too many private conversations going on.

Mr. MacDonald: In other words, viewed strictly from a traditional budgeting and accounting procedure, the 32 per cent increase which Hydro asked for is defensible. But the point I want to make to the House with great vigour this afternoon is that that doesn’t alter the fact that what Hydro may have asked for represents an intolerable burden upon consumers in this period of AIB restraint. If anything is to be done by Hydro and/or the government, it should be done to ease that burden. The New Democratic Party submits that something can and should be done.

In fact, let me put it in what I think are defensible and yet rather tough phrases. I think this government would be irresponsible if it didn’t move to reduce the proposed Hydro rate increase. It would be irresponsible, because this government is committed to an implementation of the Trudeau-Davis wage and price guidelines. And I insist that they are Trudeau and Davis guidelines. They were laid down by Ottawa; they were accepted unquestionably by this government --

Hon. Mr. Timbrell: By Blakeney and Schreyer too.

Mr. MacDonald: That’s irrelevant at the moment. There were some points that Blakeney and Schreyer disagreed with and they had the intestinal fortitude to speak up. The trouble with this government is it accepted holus-bolus what Ottawa suggested even though there were some things that they muttered some concern about, and now they are committed to an implementation of those guidelines.

As long as the people of the province of Ontario are going to have to live with rather strongly implemented wage controls, then there is an obligation on this government to operate within its jurisdiction to do something about correcting the rather soft implementation of price controls which we have experienced in the first year of AIB.

I don’t want to stray unduly, because I understand there will be an appropriate time later in this month to discuss the whole report, but I just draw your attention, Mr. Speaker, and the attention of the minister to a recommendation IV-10 on page I-27, in the earlier portion of the final report of the select committee, which is entitled “Easing the Burden on the Consumer.” I think I’d just like to read those paragraphs into the record.

“The bulk power rate is applied only to the relatively few direct industrial customers and to the municipal utilities. Most consumers of electric power buy from municipal utilities at prices that are set by, and unique to, each utility. Under the memorandum of agreement signed by Ontario and Canada, jurisdiction for the direct application of the Anti-Inflation Act and regulations to the municipal utilities was assigned to Ontario Hydro.

“The committee has, from its beginning, been deeply concerned about the impact of Hydro’s bulk power rate increases on the consumer. In its interim report, the committee specifically hoped that the 1976 rate increase could be kept to a level that could be related to the increase in incomes allowable under the guidelines.’ The committee therefore carefully considered the impact an increase in the bulk power rate would have on the typical residential customer.

The committee expects that Hydro will use its regulatory powers to contain municipal rate increases in much the same way as the committee has approached Hydro’s bulk power rate increase: applying the general intent of the guidelines; examining each component of cost; and looking at the rates in a longer-term perspective.”

The implication of that -- namely that Hydro should see that any saving is passed on to the customer so that the impact in price increases will be as close to the guidelines as possible, if not within the guidelines -- is that there is an obligation on the government to make certain the bulk power rate increase is such that, when passed on, it will be close to or within the guidelines.

That, of course, raises a key question: Is it possible to do so? I want to suggest to you, Mr. Speaker, that it is possible to do so by rather a simple procedure. It’s not a new procedure. It’s one we talked about ad nauseam in the select committee. It is the procedure of smoothing the rates over a two- to three-year period, specifically over a three-year period.

[3:00]

Let me remind the House that in the testimony before the select committee last spring, Hydro forecast then and has confirmed since that its rate increase for 1977 would have to be in the range of 32 per cent. It pointed out, however, and it has confirmed since that it anticipates its rate increase requirements for 1978 would be in the range of 15 per cent; in 1979, in the range of 11 per cent and in the years beyond that in the range from five to 10 per cent. In short, there is in prospect a rather significant drop in the increase required each year in order to meet Hydro’s needs.

If we are living in a period of restraint and if this government is committed to see that that restraint is imposed and lived up to as much as possible, then I submit that there’s an obligation on the government to do this year what has been talked about -- I won’t go into the difficulties and the failure of implementing it in the past -- and implement a smoothing of the 32 per cent required for 1977, the 15 per cent forecast for 1978 and the 11 per cent increase forecast for 1979 which would be a rate increase in our view, in the range of 20 per cent over the next three-year period; at least 20 per cent for the first of the three years.

Let me go one step further. I remind the House of what happened last year. Last year, Hydro’s first indication of its rate increase requirements was 38 per cent. The minister may shake his head all he wants but it is correct -- 38 per cent. They smoothed it out to 29 point something or in the range of 30 per cent.

There was a hue and cry as a result of that proposed 30 per cent rate increase which was initiated in the first instance within this House, primarily by the leader of the New Democratic Party (Mr. Lewis), but it was obviously voicing a widespread concern across the province --

Mr. Peterson: Yes, from the Treasurer (Mr. McKeough).

Mr. MacDonald: -- that the government tended to ignore to begin with but significantly, within a matter of weeks, certainly within a matter of a month or so, the two responsible ministers, particularly the provincial Treasurer, had joined the hue and cry. To borrow his phraseology, he said the prospect of a 30 per cent rate increase was appalling. Because of that word from on high, Hydro reviewed the situation and revised its rate increase requirements to 25 per cent.

I always assumed that the government thought that even that might be reviewed still further, otherwise I don’t know why it set up the select committee to engage in that exercise. In any case, the select committee did review the situation and recommended a further reduction in the increase to 22 per cent. The government accepted it. Hydro implemented it.

Let me review what happened last year. Hydro’s initial forecast was for 38 per cent. It smoothed it to 30. It voluntarily cut it to 25 per cent when the provincial Treasurer and a lot of other people found it to be appalling. The select committee took it down to 22 per cent.

What we are going to have this year is Hydro asking for 32 per cent. The Energy Board has reduced it to 30 and if there is no further reduction in terms of the budgetary and accounting needs of Hydro, then I submit the government has this remaining option -- to say to Hydro that the rates should be smoothed over the next three-year period and that for the year 1977 it should be no more than a 20 per cent increase.

I predict that in the second, third and fourth year of the smoothing -- because it’s an ongoing process in which each year one takes a new year into the smoothing process -- and as we reach into the 1980s when the forecast increase requirements are in the range of five to 10 per cent -- at least that is the forecast now -- we can avoid the intolerable impact of this 30 per cent increase.

I say to the provincial Treasurer, through you, Mr. Speaker, that if he thought a 30 per cent increase was appalling last year by what tortured logic does he come to the conclusion that it isn’t appalling this year?

The echoing silence is significant. There is obviously no rhyme or reason as to why it shouldn’t be just as appalling this year. We are still engaged, certainly at the federal level, in as vigorous an implementation of the wage controls, and presumably this government is going along. We are still engaged in a soft implementation of price control, and a refusal on the part of this government to do what it can to reduce that 30 per cent is just to play the game of a soft implementation of price control, which erodes the whole credibility of the AIB programme.

The government can’t have it both ways. If it wants to have a programme then it has to exercise its powers within its jurisdiction to make certain that that programme is going to be effective. I remind you, Mr. Speaker, what could flow from this, if we were to smooth the 30-15-11 over the next three years to a rate that in 1977 would start with 20 per cent. Twenty per cent in bulk power rates would on the basis of past experience translate itself into a rate for most utilities, across the board in most utilities, in the range of 15 per cent. Last year it was 16 per cent, when our bulk power increase was 22 per cent it was 16 per cent.

Hon. Mr. Timbrell: Seventeen per cent.

Mr. MacDonald: Well 16 to 17 per cent, and then the rate for the mythical average residential consumer was 13.9 per cent. All I am saying is that if you take your 20 per cent smooth rate for 1977 it could escalate down to that mythical average residential consumer at the rate of perhaps 13 per cent -- admittedly not wholly within the guidelines. What is the minister looking so puzzled about?

If a bulk rate increase last year of 22 per cent, ended up with 13.9 per cent for the mythical average residential consumer, is it not a likely prospect that a bulk rate increase of 20 per cent would result in an increase for the residential consumer in the range of 13 per cent? Sure it would. He can shake his head all he wants. I would be interested to see any counter argument to that.

I think I have made the case, and I don’t want to take an undue amount of time, Mr. Speaker. I just want to deal with one final point. Admittedly if Hydro’s requirements for next year, now fixed by the Ontario Energy Board at a 30 per cent increase, are smoothed out at 20 per cent for 1977, that is going to leave Hydro with a cash flow problem. They will get 10 per cent less revenue than they were expecting. In short, instead of having an increase of 30 per cent on their $1.5 billion revenue, which would be roughly $450 million, they would not get in 1977 about $150 million.

I suggest there is an answer in which the government can do something about that and it is right back in the court of the provincial Treasurer.

I know that Hydro is trying desperately to live within its current debt-equity ratio. I know that this government is painfully sensitive about Hydro’s borrowings. When we listened to the investment dealers before the committee last year the record will indicate that they were very frank. They weren’t worried so much with regard to Hydro’s borrowings.

They were looking through Hydro at the situation within the provincial government -- a government that was running a debt of $1.9 billion at that time -- and while they wouldn’t choose to describe it as fiscal mismanagement, those on this side of the House have deemed that to be rather an appropriate description of the situation. In other words, the problem rests with the government.

Okay. Just because the government is uptight and brought in a budget last spring to try to deal with this problem and fix the ceiling for Hydro of $1.5 billion capital availability for the next three years, I don’t think it should be an inflexible straitjacket that doesn’t permit at least a minor relaxation to cope with this situation so that you could ease the burden on the consumer from this unnecessary 30 per cent rate increase. Perhaps $150 million might have to be borrowed at the end of the first year to compensate for the drop in cash flow that Hydro would have.

In the second year, if you were picking up 19 per cent or 20 per cent instead of the 15 per cent that was forecast, you would be getting more money than you needed so you could start repayment immediately on this short-term borrowing of $150 million.

It doesn’t need to be added into the long-term borrowings for Hydro. It doesn’t need to alter the debt-equity ratio. Indeed, one of my colleagues, the hon. member for Wentworth (Mr. Deans), our House leader, has done some interesting calculations, and later in the debate he will give them to you, Mr. Speaker, to show you that a smooth rate in the range 20, 19 and 18 over the next three years would leave Hydro with more money rather than less.

Admittedly, in the process you would have certain interest charges that are difficult to calculate because it depends at what point in the year you make your borrowing in 1977 to compensate for the drop in cash flow, and at what point in the next year you start to repay it, but it’s a sensible kind of proposition.

I submit, in

summary, it would be a reflection of this government’s willingness to accept its obligation to play its part to control prices that fall within its jurisdiction, otherwise they are acting irresponsibly, they are paying lip service to the AIB, the Trudeau-Davis wage and price controls, but they’re not doing anything to implement it, certainly on the price side.

Mr. Reed: Mr. Speaker, if we consider that the first real inquiry into the affairs of Ontario Hydro occurred only this year -- the 1975-76 select committee on Ontario Hydro -- it’s small wonder that Hydro has been found wanting in both its policy directions and its management practices. Seen in the light of the general financial situation, the 30 per cent asked-for increase can hardly be surprising. And the possibility that we’ll be facing further rate increases in subsequent years is certainly not out of the question.

On the issue of the nuclear component, one must recall that it has been well over 20 years since the Ontario government made the decision that projected increases in demand could be met by thermal production of electricity. So complete has been the government’s commitment to its nuclear policy that in some cases hydraulic plants have been simply closed rather than conscientiously repaired or refitted. Moreover, any arguments that questioned cost, reliability or long-term conservation either went unrecognized or were ignored.

Hydro’s own figures for 1975 show the cost per kilowatt for thermo-nuclear electricity is some eight times that for hydraulically produced electricity. The ministry has made a serious error in judgement in operating Hydro under the assumption that the more you use the cheaper it will be, and thus, use as much as possible. We know that that sort of rationale, economically at least, has some reason connected with it with the old hydraulic component, but with the thermal component it simply doesn’t add up.

As Hydro’s rationale is to produce electric power at cost to the people of Ontario, it would appear obvious that their approach to marketing does not correspond to their approach to production. Ontario Hydro to this point has not changed its method of pricing, a method which discriminates against the smaller consumer. We have no doubt that better methods of pricing could influence the levels of consumption of electricity in the province, and that the average household could be given a preferred rate on initial purchases.

Hydro currently capitalizes to meet a peak demand, which usually comes some time in February and lasts for a few hours. This peak could be reduced, not only by incentive pricing but through effective technical adjustments as well as a more fundamental commitment to conservation. Hydro’s failure with regard to the management of demand during this peak period is endemic of a more general attitude. Indeed, the entire Hydro financial situation and the policy of meeting demand come what may begs the question why Hydro was allowed to operate for so long without any legislative scrutiny.

[3:15]

Using thermal generation as we do at the present time, almost two-thirds of the energy input is lost. As can be so readily shown, this need not be the case. Moreover, as thermal generation allows for effective decentralization -- for example, certain important industries can benefit because equipment can be relocated virtually anywhere -- the need for further costly expansions of the provincial grid might be substantially reduced.

There is no question that the responsibility for this and future price increases falls directly on the government’s shoulders. Energy is the key to our economic hopes, our standard of living, and we can no longer accept at face value the statements of a government that has shown itself so lacking.

At the same time, I am still of the opinion regarding the 30 per cent increase that if that proportion of Hydro’s income -- which it denies as profit but which is undeniably a profit -- were ordered into the general revenue, the increase still might be reduced at least a few percentage points. I would urge the government to so order, as I understand that it has done on occasion in the past.

Hydro’s mandate is to produce power at cost to the people of Ontario, and while Ontario Hydro would argue that it does not make a profit there are certain cushions which, through this critical year, could be eliminated. I believe the approach to be reasonable and responsible and still capable of maintaining the financial integrity of this system.

Mr. Nixon: Mr. Speaker, is it the minister’s intention of concluding the debate at this time?

Hon. Mr. Timbrell: Well, if I can, I thought I’d speak now.

Mr. Nixon: There are other people to speak.

Hon. Mr. Timbrell: I haven’t seen the full list. How many others do you have?

Mr. Deputy Speaker: It’s the understanding of the Chair that the debate will conclude at 5 o’clock, and it’s my understanding that the time allocation has been split up evenly among the three parties; 40 minutes each.

Hon. Mr. Timbrell: Mr. Speaker, I understand by indication from the member for York South (Mr. MacDonald) that there’s one other speaker for the official opposition party.

Mr. Moffatt: Two more over here.

Mr. Peterson: There are several here.

Hon. Mr. Timbrell: Well, I understood that there was an agreement that we would rotate.

Mr. Nixon: I don’t want to delay it, Mr. Speaker, but it is often the procedure that the minister in charge will wind up, so that the arguments can be answered or further information supplied.

Hon. Mr. Timbrell: Mr. Speaker, I am at the disposal of the House, as far as that goes. If you’d rather --

Mr. Nixon: No, that’s fine.

Hon. Mr. Timbrell: -- that I wait until later, I will. If you want to proceed with your next speaker, then go ahead.

Mr. Drea: Mr. Speaker, one of the difficulties in assessing the recommended rate increase for Ontario Hydro by the Ontario Energy Board is that at first hand it seems to defy a great many aspects of the anti-inflation programme in this country. Certainly a sizable increase in a very essential commodity has to be looked at, particularly at this time, in the light of whether there is an alternative to it that will do three things:

1. Protect the financial integrity of the corporation, which happens to be a very significant borrower in foreign markets;

2. Provide the utility with the financial revenue to carry on its operations within the limits that have been imposed upon its borrowing;

3. -- and I regard No. 3 as the most significant -- Provide the greatest benefit to the residential consumer, both in the light of the rates that will be paid, the service that will be provided, not only now but in the future, and the consequence of deviating from the recommended increase which has been reviewed by the Ontario Energy Board.

First of all, let’s discuss the implications upon the utility in the markets where it must borrow and there is no argument in this House today that Hydro must borrow. It would be foolhardy to suggest that it could pay as it goes. It is less than a year ago since the smoothing process, which has been suggested as the alternative, went down the drain so rapidly that it isn’t even mentioned in the report which came to this Legislature from the select committee recommending the 22 per cent increase which was finally adopted.

I say it went down the drain so quickly that it wasn’t mentioned. It did not go down the drain without the considered discussion and thought of the select committee. There is not a member on that committee who didn’t know exactly what was happening and they wanted the rates for 1976 to be as low as possible to cushion the impact of that raise.

I do not find it a reasonable alternative to propose to a corporation now that it revert to a financial position which was abruptly and decisively turned aside by this Legislature less than a year ago.

In short, I do not believe that smoothing -- I agree with the member for York South that smoothing is an accepted practice. It has been accepted practice in this province for a great number of years. I agree that it makes admirable good sense. I agree that it probably helped put Hydro into the financial position it is in today. But not at this time. It was put out a year ago and everybody knew what was happening.

One doesn’t play with the financial operations of a utility of the size of Ontario Hydro, saying that in 1975 on this rate increase it goes one way financially and in 1976 it goes another way. The obvious question is what happens a year from now in 1977? One can only play with financial figures and financial acumen for so long. Sooner or later we come to the day of reckoning, the bottom line, and this is the year when the bottom line is there.

Secondly, in terms of the revenues which must be raised, how can we go to a utility and say, less than a year ago, “Restrain yourself. Do not borrow. If you are going to have to build, build within the limitations of your borrowing, the obvious point being that if you are going beyond the limitations which have been imposed upon you in your public borrowing, you are going to have to raise more revenue from your rates.” Those are the only two ways that Hydro can raise funds.

Then we come back a year later and say, “Notwithstanding all that, go out and borrow a little bit more because perhaps next year the revenues will be higher; the recession may be over; a great number of things may happen. The New York bond market may be this, that or the other thing but by 1978 you will be back in a financial position where your revenues are keeping pace with what has been reviewed and found desirable by the Ontario Energy Board for the rate year of 1977.”

Finally, we come to the consumer. The consumer is being asked to pay a bill --

Mr. MacDonald: They burn while we fiddle.

Mr. Drea: The consumer is being asked to pay a bill. The consumer was asked last year to pay a bill. In the light of the Ontario Hydro bulk rate increases until last year, as reflected in the rates charged by the local utilities, the raise last year was, quite frankly, to many consumers, appalling. Incidentally, the word used by the provincial Treasurer (Mr. McKeough) was obscene, not appalling.

Mr. Peterson: You are obscene; he is appalling.

Mr. MacDonald: I didn’t see any big correction.

Mr. Drea: This year it is not so appalling. On the one hand, the federal government by its own action has raised most significantly, most substantially and most appallingly the two competitive sources of fuel and of energy for the consumer far more than even this increase.

Secondly, members opposite are asking the consumer to buy this kind of a flim-flam: “Yes, we will lower your rates this year; and while we can’t guarantee what is going to happen next year or the year after in terms of fixed costs with Hydro, such as the cost of fuel, we’re going to take it easy on you this year because we can spread it out, but don’t really worry too much about it because by 1978 or 1979 it will all balance out.” The time has come in this province where people expect to pay their full costs for energy.

From government they want the commitment that their electrical energy, which they own and which they control, will be produced at cost and that it will be supplied at cost or as near to cost as is possible.

I don’t think it does any good when we’re asking people to meet the challenge of not only the high cost of energy, but indeed the changing times in energy supply, production and availability, when we’re asking them to tighten their belts one way, to accept energy conservation as a way of life, then to say, notwithstanding that, we are going to play a few little games with you on what the rate is and somehow we are going to try to postpone the day of reckoning into 1978, 1979, 1980 and so on.

If I thought smoothing would do a scintilla of good towards Ontario Hydro’s financial position in terms of its borrowing, towards Ontario Hydro’s financial position in terms of the revenue it must generate for the system, if it would really do anything for the consumer, then I assure you I would be a very strong advocate of smoothing. But the question of smoothing and all the things that went with it were given most deliberate, most detailed and most substantive discussion by the select committee in 1975.

At that time, as I said before, smoothing and the other alternatives to meeting the day of reckoning were discarded. The work of the select committee was to make Hydro adapt itself financially as well as in an operational way to changing times, to quote the cliché, to take the fat out of Hydro. In the ensuing months by and large that has been done.

Surely now is not the time to say that after a few short months let’s go back to the game of let’s give this, let’s give that and let’s see what happens next year. I suggest to you, Mr. Speaker, the Ontario Energy Board has very carefully considered the application by Hydro. It has very carefully listened to the witnesses. It has issued a very detailed report. I think it would be foolhardy to try to fool the consumers of this province that there is an easy way out. The truth of the matter is there isn’t.

As a matter of fact, hard as the increase may be this year, at least we have reached the end of the tunnel. To postpone it and put it down the road, quite frankly, is asking to go back to the gropings of late 1974 and early 1975; and to me that is a very grave disservice, not only to the consumers of this province but to the utility that must supply them.

[3:30]

Ms. Gigantes: Mr. Speaker, I can’t resist picking up on a few of the points made by the hon. member for Scarborough Centre. He makes smoothing, this very sensible suggestion that’s been put forward by my colleague, sound like some kind of sin that is carried out in dark corners. Smoothing is a perfectly reasonable kind of adjustment which Hydro has itself carried on its rates for many years; and the reason it was not adopted in 1976, I should point out, was that you would have been smoothing up to the projection that we now have in front of us for 1977, and I would expect that even a Conservative member would understand that.

He talked about three elements that he wished to see satisfied before he would accept smoothing as a possibility for 1977. He said the financial integrity of Ontario Hydro had to be protected in foreign money markets. Of course it has to be protected, and every member who sat on that select committee is very well aware of the nature of the concern expressed by the money lenders in New York about not Ontario Hydro but the Ontario government.

The fact remains that the Treasurer’s limitations on borrowing for Ontario Hydro were made, in his own words, “to allow the government of Ontario room in the money market.” He then later announced that he intended not to borrow in New York during this year and there is, therefore, no good reason for the kind of limitation which he has placed on Hydro. I’m quite convinced, from the kinds of testimony that we had before the select committee, that the amount of borrowing that would be involved or smoothing for 1977 would not be a danger to Ontario Hydro’s financial integrity.

He talked about meeting the borrowing guidelines and the whole theme of his speech seemed to be summed up in the attitude he displayed on this question. Because what he’s saying is, “What is, is; because it is, it shall be.” That simply is not a very good explanation for anything, let alone our Hydro rates for 1977.

He talked of benefit to the consumer and I think he rather dismissed what happened to the consumer in the last few years facing hydro increases. Last year, as you’ll recall, Mr. Speaker, with great reservations the select committee recommended that the rate for 1976 should be a 22 per cent increase over 1975. We are now contemplating a recommendation for a 30 per cent increase. Surely the member for Scarborough Centre and the Minister of Energy (Mr. Timbrell) and Ontario Hydro cannot believe, nor can the Treasurer, that the consumer of Ontario is not aware that the crunch is on.

He’s been crunched; he knows it, she knows it. There is no need to drive home what seems to be almost a moral lesson this government is trying to make. I think the consumers in Ontario have felt that lesson, and if they didn’t get it sooner I suggest that the fault lies partly with the government of Ontario.

What we’re talking about now is the projection over the next three years. It says: “In 1977 Hydro rates shall go up by 30 per cent. In 1978 they shall go up by 15 per cent in addition. In 1979 they shall go up by another 11 per cent” -- the Minister of Energy shakes his head; good, good; I hope it’s better -- “and we are going to have a decreasing rate of increase after 1979 and into the 1980s.”

Let’s look backwards at how we got into this situation. There is a kind of broad outline, as I see it, of the reasons for suggesting smoothing at this stage. It’s several years ago -- it must be several years ago; it must be between five and 10 years ago -- that Ontario Hydro became aware that, based on its historic growth pattern of seven per cent, which it followed, the growth and demand has gone up seven per cent every year, smoothed over the last 50 to 70 years, that we would be getting to a crunch in our hydro costs just about now.

What’s been happening is we have been running out of sites for cheap hydro-electric development -- and that was clear to Hydro for years back. Then it had to make a judgement about what the alternatives were. It had to make a judgement about what to do, now that cheap hydro was a thing of the past. It had to make a choice: It could go nuclear versus other fossil fuels, it could go a centralized system versus a decentralized system and it could go for a growth system or a conservation system.

Let’s review what kind of choices it has made. Hydro chose the nuclear system; that system now stands in question in my eyes and I think in the eyes of many who were on the select committee. Hydro chose the centralized system, the system with large installations where you have to have massive reserves in case one of your units goes out. Hydro chose a growth system; Hydro assumed that the seven per cent increase in demand for electric power in Ontario would keep on, that every 10 years our demand for electric energy would double. Those were the choices Hydro made.

Hydro is a publicly owned company, and the public has been content over the last several decades to allow Hydro to make its own planning; it has been content with the way Hydro has operated. We have been going through a period when Ontario Hydro could supply us with electricity at a decreasing price in terms of our take-home pay. Hydro knew that was going to change, it knew many years back that was going to change, and it still made those choices, which I consider to be questionable choices when you look back.

Hydro is one of the biggest businesses in the world, and the public has been content to let it operate with a dynamic of its own because it produced for us what we needed: energy at a good low cost. Hydro has been used to creating its own demand for its own produce. It has been selling electric energy. It has created, in a sense, the crisis that we now face. It is used to considering costs as something that get passed through, and it is used to planning and operating, like other huge corporations, without any kind of concern about what public reaction will be.

Now things are changing. We began to see, through the months that we sat in the select committee on Hydro, a change coming too in the attitude of Ontario Hydro. It is a very slow change. It is, I suggest, a very reluctant change. This organization has rolled on for years with its own dynamic, its own inward looking view of how to produce energy for Ontario at what price and for the benefit of whom. This corporation doesn’t take kindly to the kind of investigation that we put it through during the select committee procedure, but it is nevertheless beginning to respond.

I suggest to you, Mr. Speaker, that when Ontario Hydro, and indeed the Minister of Energy, came before the select committee last fall, they were not very enthusiastic about conservation. This day marks day two of conservation week in Ontario, and the attitude has obviously changed: conservation is now in. In a limited way it is beginning to get going for Ontario Hydro and for the Ministry of Energy. But last year, just a year ago, the Minister of Energy, ministry officials and Ontario Hydro were definitely downplaying to us in testimony the positive benefits that conservation could bring to Ontario. But times change; even Hydro changes.

I think that Hydro has not changed enough yet and I don’t think the Minister of Energy has changed enough in his attitudes yet. I heard him, in interviews this summer in the Ottawa area, dismissing the benefits that could be achieved with a revised rate structure for Ontario Hydro.

Hon. Mr. Timbrell: Mr. Speaker, on a point of order. The member purports to credit certain comments to me. I am afraid, from what she said, that she’s dead wrong -- as usual.

Mr. Deputy Speaker: That’s not a point of order.

Mr. Breithaupt: It’s not even a point of view.

Mr. Cunningham: It’s not even a point.

Ms. Gigantes: Mr. Speaker, I can only report what my ears heard. There is an attitude on the part of the Minister of Energy, the Treasurer of Ontario, and Ontario Hydro, which I can only describe as a “brownmail” attitude. They go around talking about brown-outs; it is “brownmail.” They are trying to frighten us into saying that whatever they decided seven years ago, 10 years ago, is going to hold true today; and whatever costs they decided seven years ago we could take today, we are going to take and it is good for our souls while we do it.

I think our souls have had enough and I would like to see the pinch come back on Hydro. I think the select committee rattled Hydro. I like to see Hydro rattled and I think the people of Ontario like to see Hydro rattled. They have lost confidence in what is happening with Ontario Hydro. I think we should keep rattling Ontario Hydro and I think one of the ways we should rattle it for 1977 is to insist that it smooth its rates. I think this is a very reasonable proposition.

I suggest that when the AIB controls are off it would be much more appropriate for us to take the kind of burden which is being suggested for this year of controls. I think it very unfair of this government to have signed an agreement with the federal government which allows industry to pass through costs, and which is going to put the same kind of burden on residential consumers who cannot pass through costs.

I know that industries are going to have to pay increased costs for hydro-electricity, for electricity, in the coming year. They are going to have to pay the 30 per cent bulk rate increase, too, but they can pass on their costs. Residential consumers can’t and their wages are limited these days.

I would like to make one further point. The longer we can delay the brutality of a 30 per cent increase -- in other words, the more we can smooth that kind of increase -- the more time the residential consumer has to prepare for the future of conservation, the conservation future we need in Ontario. We still need some time to get all that insulation into our houses. This is a cold winter in Ottawa. It has started already and it snows every two days. God help the consumer in eastern Ontario if he is going to have a winter that lasts for eight months. That is the way it looks.

Mr. Peterson: I want to address a few remarks to the minister which I think would be helpful.

At the outset I want to say I am surprised that we are in this kind of debate today, this House never having had an opportunity in any detail or in any substance to address its mind to this very major report, the public policy and the direction for Hydro. We had, as I recall, a very brief debate last spring when this thing was introduced. To this point in time I have seen absolutely no results from that investigation or any meaningful results through the ministry.

I think it is fair to say that observers of this scene have looked at that report and said it is really a very fine document and a fine piece of work on Hydro. There were a great number of recommendations in there which should be addressed by the Ministry of Energy particularly.

I think what is very revealing to me -- I would like to point out that the terms of reference of that committee were to investigate a price increase last year. As members recall, at that time Hydro was talking about a 30 per cent increase. I think my friend from York South was quite right, Hydro did really want a 37 per cent increase last year although it asked for only 30 per cent. It went down to 25 per cent, then to 27 per cent and eventually, some time very late in December --

Interjection.

Mr. Peterson: Would you be quiet please? You can have something to say afterwards.

Hydro came back finally with a 22 per cent increase. It was a long, cumbersome, unfair procedure in the sense it was very unfair to Ontario Hydro because no company of that size, that magnitude, can be expected to plan on the basis on which the ministry has really forced it to plan. That is just one of the things which I think has to be pointed out in fairness.

What bothers me about this is that this very substantial document to the best of my knowledge -- the minister may know more about this than I do; however, I doubt it. It may have been reviewed by the ministry and something may have come of it but I think we should address the minds of this House, and the ministry should address its mind to acting on these very significant proposals.

Let’s not forget that out of 41 proposals, as I recall, 20 are addressed to the Ministry of Energy, not to Hydro; not to Hydro but to the Ministry of Energy. I want to read to you, Mr. Speaker, and put on the record of this House what the first recommendation of that committee was. I have great respect for all the people who were on that committee for the final report because I think it was very well done.

Mr. Deputy Speaker: With respect, to the hon. member, we are dealing with item 31, consideration of the report of the Ontario Energy Board as opposed to item 29 which will be discussed at a later time.

[3:45]

Mr. Peterson: I might have lost you in this, Mr. Speaker, but I see them as very relevant and I see that this should antecede the debate we’re having today. I think the whole structure of this thing has been a very serious mistake. I think you’ll find they’re related and I beg your indulgence. Thank you.

I just want to read the first recommendation and put it on the record: “That the Ontario government develop and clearly articulate government policy towards Ontario Hydro.” This was done last spring, and now here we are, in the absence of this, debating energy rates, starting in 1977. I see it frankly as a very superficial approach to this very serious problem we’re all in. I think the ministry should have some very clear answers for the reason and the way this situation was handled at this time.

My friends have had some interesting points of view, and I frankly don’t disagree with them very much. I don’t think my friend the member for Carleton East (Ms. Gigantes) has the idea that we just want to go on rattling people or rattling Hydro, I don’t think that’s the point. We have to dramatically change its direction, its focus and its management. There are so many things --

Mr. MacDonald: That’s another definition of rattle.

Mr. Peterson: Rattle? That’s certainly not the street definition of rattle. You may have your own.

Ms. Gigantes: I don’t hang around streets.

Mr. Breithaupt: You never know with the NDP.

Mr. Moffatt: A group of old smoothies over there.

Mr. Peterson: Let me say this needs far more attention and direction. There are many things that we have talked about in this party and my friends have talked about from the NDP, and they’re not wrong. They are conscientiously trying to develop and contribute something to lessen the impact on the average consumer. What I don’t think enough attention has been paid to in this debate today is the impact on the average consumer. I understand the things that my friend from Scarborough West -- or whoever was talking about --

An hon. member: Scarborough Centre.

Mr. Drea: I am not your friend either.

Mr. Peterson: It’s all right; I used that word loosely.

Mr. Good: With licence.

Mr. Mancini: Anybody who sits next to the member for London North (Mr. Shore) is in trouble.

Mr. Peterson: This is going to have very serious repercussions and very serious effects for a lot of people who are on fixed incomes or on lower incomes. There are ways to handle that situation and my friends have pointed out several. I think they’re making a meaningful contribution to this debate.

But what happens is that all of us in government, in my view, are creating a tremendous credibility gap with the people of this province and the consumers because at least you did and we did participate in a debate and agreed to opt into an anti-inflation programme that controlled wages and controlled prices, and I don’t want an argument about that. The point is that on one hand when we do that and on the other hand go back and say we are in a government-controlled institution but put the prices up 30 per cent, I’m telling you we’re all losing credibility, and you’re losing more than anybody.

I see that as probably the single most important reason at this particular time to bring into account all of the dramatic things we can do to lessen the impact on that average consumer today. That’s why I believe we are furthering the rift between people and government and people on the streets and the average consumer of this province by bringing in this kind of legislation. Believe me, it’s a mistake and believe me, you have an awful lot of apologizing to do. You will never be able to convince the people you’re doing the right thing in this particular issue. I see it as a very serious issue.

There are lots of small things we could have done, and we are very late in terms of years in addressing some of the very serious problems in Hydro today, in my mind. Certainly you have many excellent suggestions. With regard to the rate structure, it’s coincidental or fortuitous or incredibly good judgement on your part -- and you people are so good at sliding out things at the very last minute; you glance over the tops of subjects but you really don’t get to the guts of the subject -- to come up two days ago with a change in the rate structure.

It’s not the kind of rate structure in my mind that’s going to really solve the problem, and by your own words we’re into 1979 before implementing that. With all of the planning staff you have, with all of the bureaucrats you hire, surely you should have seen these problems coming, surely you should have been planning a lot further back than just this last year. We should have been in rate structures that discourage consumption, not encourage consumption. I am glad to see some small step for mankind in that particular area.

It’s late coming and it’s not very satisfactory, but it’s better than nothing, I’ll grant you that.

There are massive programmes in load management and education that could be brought in -- that could have been brought in two, three, four, five years ago. Instead, as my friend has pointed out, the government has really run an organization that’s helped to create the demand, it has created a mess, it is to a large extent the author of its own misfortune and the misfortune of the people of this province at this time. I see it as regrettable that it’s so late coming about. I see it as regrettable that the government has not addressed its mind to this issue far sooner than we have today.

Later on today my friend, the member for Grey-Bruce (Mr. Sargent) is going to be talking about a private member’s bill on his method of pricing for Hydro. I support that. I think it’s a valid one. It’s worked in certain jurisdictions in the United States and it’s one that the futurists and people are looking at for an intelligent way to make people pay the fair cost of what they are consuming, but on the other hand not to penalize that person who’s on a low or a fixed income where that person is sensitive to and careful with our finite resources, and we’re finding that hydro is one of those.

What we haven’t done is we haven’t changed the mandate of Hydro, and it has to change. It is no longer going to be acceptable just to say, “Well, they reasonably well fulfil their obligation to provide power at cost.” We are working under totally different constraints today. It’s how much we can afford. We are going to have to build within those confines today and every one of us is going to have to adjust his behaviour and consumption patterns into that particular framework rather than just go on trying to cater to everyone’s demand as they perceive it.

Frankly, the ministry’s been very slow to realize this and very slow to do anything about it. For the sake of this province and for the sake of everybody’s children, it’s got to start doing that faster and tougher, and with more authority, and it has to put its stamp on this thing. This takes a hard minister and it takes a tough minister; and frankly we haven’t seen it so far.

Thank you, Mr. Speaker.

Mr. Deputy Speaker: The hon. member for St. Andrew-St. Patrick.

Mr. Mancini: Are you supporting the increase?

Mr. Grossman: Getting back to the item on the order paper, Mr. Speaker, I anticipated the debate would, of course, get off into a discussion of things that were covered in the presence or absence of some of the members of the select committee on Hydro last fall and spring, and some of the other matters which, as the member for London Centre (Mr. Peterson) has suggested, would be more appropriately dealt with at the time at which this assembly deals with the report of that committee.

But I did want to address myself to what really is going on today. We all knew at the select committee what lay ahead for Hydro on the rate hearings in 1977.

In fact, last December when the select committee came before this assembly to ask for a new, refreshed, expanded mandate to sit into the spring, the reason for that, as well outlined then by all members of the committee who spoke on that day, was a general recognition of two things: First, that it wasn’t quite as easy as a lot of members had anticipated to slap around Hydro rates for the sake of political convenience without seriously impairing Hydro’s financial stability and the health of the provincial economy generally.

After a few weeks, when most of the members of the committee came to understand that it wouldn’t be such a politically attractive committee, that it wouldn’t be a situation in which we could go in there at 25 per cent and come out at 12 per cent and go back to the folks at home and say, “We’ve saved you a heck of a lot of money,” after that settled in and those persons who wanted to be on that committee in order to accomplish that disappeared, then we got down to the real gut issues.

We realized and reported to this House that very careful, lengthy deliberation was necessary before we began to juggle with even one or two percentage points when it came to the recommendations of the OEB last year.

We went through that exercise -- and I might add all members of the committee, sitting through the winter and spring months, worked very, very hard and diligently at understanding as much as we could about the processes of Hydro, what was involved in the New York bond market, what was meant by financial integrity, and one thing that the committee has included, and it’s reflected well in the debates in this assembly subsequently, was that it’s really the systems expansion programme of Hydro that affects the rates directly and that causes the generally greatly increasing rates over the last few years.

I think it’s relevant to understand the great emphasis that all members of the committee last fall and last spring put upon the financial integrity of Hydro. Remember at that point we were dealing with the difference between 25 per cent and 22 per cent. We went from 25 to 22 and there was some discussion at the committee of how attractive it may be to get it down another two points from 22 per cent to 20 per cent, but at what cost?

In the midst of that discussion -- I think it’s important to reflect back on what we were thinking of then and how careful we were when it came to even going from 25 per cent to 22 per cent, and when we had brought Hydro to that narrow margin, how we decided not to go from 22 per cent down to 20 per cent for whatever reasons, under whatever systems, be it smoothing or anything else.

I’d like to read an excerpt from the transcript of the key night of the committee -- indeed, I see it occurred at 10:55 p.m., which was a lengthy night session during which we dealt with the guts of the report, December 4, 1975.

“Mr. Renwick: ... The increased deficit and the cutback in the shared cost programmes with the federal government, those were matters. So it seems to me [I can’t understand the language, I might say] that so long as we maintain in difficult times, which everybody recognizes, a slight improvement in the Hydro position, then the basic problem which the New York bond market faces to the extent that what Ontario does can change their attitude anyway, relates to the province’s decision with respect to the budget.”

We then came into the House on December 17, 1975, and without taking the time of the House to read a lot of the excerpts, I think for an example we can read at page 1842 the remarks of the member for Carleton East (Ms. Gigantes), and I quote from page 1842:

“I don’t think there is any question in the minds of anybody who sat on that committee that in the long run we must examine not only the points which have been raised but whether or not Ontario Hydro should be limited in its operations by what is called its credibility on the bond market; or what is called its financial integrity. After five weeks’ work and leaving Ontario Hydro out alone in the bond market, with none of us there promising to buy the bonds, we all felt, I think, that we had to allow Ontario Hydro a few months in which it could get the needed capital flow and in which we could take serious steps to examine the total direction of Ontario Hydro.”

Later on the member continues: “We have to be able to provide that supportive action for Ontario Hydro before we can send it out sailing into the rough waters of the international financial market in times such as these.”

And I think, in listening today, the member for Carleton East accurately reflects the very proper and careful concern of herself and her party for those financial integrity matters as they relate to Ontario Hydro. But those were the things which caused us in December to recommend in an interim fashion that we go only to 22 per cent.

[4:00]

But subsequently the NDP made a proposal to smooth the bulk power rates so that the increase this year would be 20 per cent, next year 20 per cent and the following year 20 per cent. The net effect of that would be to trace the debt-equity ratio, one of the important indicators of the New York bond market, so that the flow would have been 83 per cent in 1975, worsening to 85 per cent in 1976 -- those are facts -- and under the proposed smoothing scheme of 20 per cent it would worsen it once again to 86.1 per cent. Again, a steadily worsening financial position.

I think one must keep in mind the remarks made so carefully in that very important evening session of the select committee on Thursday, December 4, where Mr. Renwick and others commented at quite some length upon the importance of continually improving the picture so far as the financial integrity of Hydro was concerned; even if one could not substantially improve it to the satisfaction of Hydro, among others, the important thing was to show that the situation was improving. Yet the smoothing proposal as presented by the official opposition would continue the decline in the financial position of Hydro.

I want to be fair to the member for Carleton East. I was listening outside, and I thought I heard her suggest that it’s an academic argument this year because Hydro is not going to the New York bond market. Is that unfair?

Mr. MacDonald: No. The government is not.

Mr. Grossman: Government is not, but Hydro is. Exactly. Hydro is still going to the New York bond market for some $650 million in any event, so the argument has to retain some very important validity.

I also want to say that the select committee, regardless of our mandate, did deliberate at length on just about any matter that we really felt was relevant to Hydro rates in the next ensuing years; and for that very specific reason we asked that our mandate be extended into the spring.

May I draw your attention to Exhibit IV-12, the source being Ontario Hydro Exhibit B-95 as filed before the committee. There, it was clearly set out that 1977 was going to be the very bad year in terms of Hydro rate increases and subsequently it would drop, at least in the charts shown here, to something like 14 per cent in 1978, 10 per cent in 1979 and about seven and a half or eight per cent in 1980.

The point I am making, of course, is that these exhibits were before the select committee. We were willing to sit as long as necessary to cover all the points that were relevant. All of us were there, well educated in the relevant facts as they related to Hydro rates in the next few years. No one at the committee suggested that we get into a long or detailed discussion of smoothing over the next few years. I must say that my memory may not be as good as that of the chairman of the committee. He certainly was very diligent and was there for every minute of the deliberations; I must applaud him for that.

He may remember a little better than I do, but I think it would be a gross exaggeration to suggest that we debated the issue of smoothing ad nauseam. I just don’t think we did; at least I wasn’t in the room when we did, and I wasn’t gone for very long.

In looking over the minutes of the select committee, which I did over the weekend, I could find one or two places at which we discussed smoothing. I think the most substantial instance was at 10:40 am, on December 4 in response to some very good points raised by the member for Erie (Mr. Haggerty). But I wouldn’t say the discussion was ad nauseam, particularly compared to some of the other evidence we heard on some rather more obscure points.

I really did want to make the point that I think the committee could well have dealt with this as a proper matter if members of the committee thought that smoothing would be a problem. We knew what the projected picture was for Hydro rates. It was right in front of us; here it is in the report. I objected strenuously when the committee instructed our very excellent and able Mr. Fisher to come out with a model projection which confirmed Hydro’s projection. The chairman of our committee dealt with this when he brought our final report into the House on June 18, 1976.

I’d like to read from page 3578 of Hansard, Friday, June 18, 1976.

“Last week there was quite a flurry when it was noted in the committee’s discussion of the final draft of the report, that Hydro’s rates next year might likely result in a 34 per cent rate increase. May I emphasize that this is not the committee’s recommendation; that this is not the committee’s view.

“Hydro’s balance sheet is not favourable and the last estimate the committee was able to make was that on the basis of those costs Ontario Hydro’s rate increase next year might well be in the range of 34 per cent; the year after that in the range of 14 per cent; and beyond that it would drop down to under 10 and even to under five -- when we get on to 1983, 1984 and 1985, an under five per cent increase each year.

“Whatever is going to be the fact rather than the speculation for this coming year we will know rather shortly because the statutory obligation on Hydro is to announce what rate they feel they will need for next year.”

That is the excerpt. Of course, that’s precisely the point -- all of us knew and were aware of the ensuing problems. The committee should have dealt with the smoothing problem; it should have called all the witnesses appropriate at that stage. The chairman of the committee and everyone else understood what the reason for the anticipated 1977 rate increase requested, in any event, was going to be.

The chairman of the committee, as he spoke in the House, although the inflections in his voice may have been as clever and glib as they usually are when he said this -- I haven’t perhaps said them as well as he might have -- seems to have been fairly straightforward and unequivocal in predicting what was going to happen in 1977. It was hardly a secret.

Mr. MacDonald: What I’d like to predict is what the government will do to cope with it.

Mr. Acting Speaker: Order, please.

Mr. Grossman: Today’s debate really focuses on the smoothing aspect of it. I suggest that one must keep in mind in determining this problem all the reasoning, all of the work, that went into deciding that 22 per cent, not 21 per cent, was the appropriate level for the 1976 rates. I recall last December all members of the committee save and except for two -- the member for Sarnia and the member for London Centre -- rising in the House to be very critical of the suggestion made by the member for London Centre in particular.

I don’t want to be unfair to the member for Sarnia but the member for London Centre in particular had tended to suggest that the determination was an arbitrary one by the committee. It just wasn’t; everyone agreed that we thought very long and carefully about arriving at 22 per cent.

Mr. Mancini: He didn’t agree with you.

Mr. Grossman: My point is that when we went through that long exercise to get the 22 per cent, not 21 or 23, if we were going to smooth out what we knew was to be a large rate increase for 1977, no one on the committee would have objected to a long series of witnesses dealing with that very important matter of smoothing -- in a report emanating from that committee we certainly weren’t shy in going far afield to deal with any recommendations we felt were appropriate in the energy field because we knew we were dealing with energy rates, with Hydro rates, in 1977 and 1978 and so on. If it was appropriate we should have done it then.

I might say that it could be that smoothing is appropriate at this point in time. Not having heard all that evidence, not having had the witnesses, not having had the opportunity to update the financial situation of Hydro, I don’t hold myself out as some other members do as having all the knowledge there is to have in the field of energy as of today’s date, nor as of any date I might add.

The point I want to make is that we went through careful deliberations. I think it’s careless at this stage to say arbitrarily, “Let’s go for 20 per cent across the board for the next three years. It’s pretty safe because by next year who is going to remember that otherwise the rate would have been 11 instead of 20?”

Finally, I want to say that there’s a whole other broad issue and that is, when we get into deferrals, which we did get into, cancellations, which we did get into, then we begin to really upset the desirability of making those people who are using the system pay for the system in the proper year. That’s a very complicated theoretical argument, but every time we get into one of these things, let’s save for today and shove it on to tomorrow, then we are tending to distort any attempt to properly allocate any of the costs that are attributable to Hydro to the proper consumers.

We could, of course, debate for days and days as to who should be paying for nuclear plants, if we continue to have them, or whatever, which consumer should be paying how much in which year. My point is that when we get into a select committee that sits for months and months and comes out with a determination, a difficult one, and then come along later and say, “Let’s move it out and knock it off for two years,” then we are arbitrarily in that sense setting up a different balance, a different apportionment of bearing the costs of electrical energy among the proper consumers. Thank you, Mr. Speaker.

Mr. Deans: The comments made by the previous speaker are interesting, but they don’t really address themselves to the problem that we currently face. The committee did, in fact, deal with the matter referred to it, but the matter of this year’s hydro increase wasn’t referred to the committee and so, therefore, it could hardly deal with it.

Mr. Nixon: That is precisely the point he made when he started, when he was criticizing the speaker immediately before him, so there is nothing new.

Mr. Deans: Okay, so what we are going to talk about now is the impact of the increase that is being proposed now and the only opportunity to do that, Mr. Speaker, is today here in the Legislature. The

part I think we have got to understand is that when we consider the 30 per cent plus increase that is being proposed, we recognize that this increase is being imposed at a time when wages are under severe pressure, when the AIB is continuously rolling back wage increases to a level that makes it very difficult for the average individual to keep pace with the cost of living.

So when we take a look at what’s being proposed and we try to extrapolate what will likely come in the years ahead, we come to the conclusion that while it would be nice if the people of the province of Ontario in the year 1976 could afford to carry the full burden of Hydro’s needs in the year 1976, it isn’t practical in the year 1976, and so we have to look at alternative ways of providing Hydro with their financial needs while at the same time ensuring that the public of Ontario won’t be overburdened, and that’s exactly what we proposed from this party.

We said that for major expenditures it’s not uncommon for people to look at evening out or smoothing out the impact of those expenditures or purchases over a number of years. This happens in everyone’s day-to-day life, where they look ahead and they say, “I would like to pay for it all today but I really don’t have the income that would allow me to do that.

I anticipate that next year I may have a little more income, and the year after I may have a little more even then than I have now.” Therefore, if we could even it out over two or three or four years and bring the increased costs down to something more manageable, then that would be in the best interests of the people of the province of Ontario. That’s the position that we put forward and that’s the position that we stand by.

There is nothing wrong with smoothing, provided smoothing means that the reduced costs that will hopefully flow from the recommendations that were made last week that the minister tabled in the House, and from the other projections that have been made with regard to the overall needs of Hydro to meet future commitments --

Hon. Mr. Timbrell: Rates?

Mr. Deans: I am talking about rates and everything, the fact that in years to come the increases that will be necessary will be considerably smaller, presumably, than the increase that is being levied this year to meet the Hydro commitments.

[4:15]

So our suggestion is quite simple, that we understand that these may well be Hydro’s needs, and we understand that the province of Ontario doesn’t have the intention at the moment of going into the marketplace and borrowing money, and that the province of Ontario, because it doesn’t, is in a position to borrow short-term money at a reasonable interest rate by today’s standards, and that therefore we could make the impact less this year, and next year, and even the year after, if we were to smooth it over three years.

If you were to follow the process out to its logical conclusion it could be smoothed over a longer period than that if necessary in order to ensure that people on fixed incomes -- the people whose plight was raised this afternoon with the Minister of Community and Social Services (Mr. Taylor) won’t have to bear this additional burden, and that the people on pension won’t have to bear this additional burden, and that people who are the working class people of the province of Ontario, whose incomes are being severely restricted by the Anti-Inflation Board, also won’t have to find the additional moneys necessary.

The minister may say, as he has said, that in dollar terms the amounts of money that they are talking about on average across the province, the difference between 30 per cent and 20 per cent, is $1 or $2 a month. This argument was put forward some time ago. The problem there is that if we were to adopt that theory and say that it doesn’t make any difference because it is a little amount, and if we were to apply that theory against every other cost increase, we would find that people would be unable to meet their commitments.

Therefore, I think we have to be more careful in the way we approach it. We are not suggesting for a moment that Hydro needn’t get the amount it requires. We don’t think they need it all in January. We think it is possible that 30 per cent or 33 per cent of the total increase projected for this year could be smoothed out over the two remaining years. We think that would serve the public of Ontario better than the proposal put forward at the moment. We know the money that would have to be borrowed would have to be borrowed on short-term notes by the province of Ontario, but we also know that would not appreciably upset the fiscal integrity of the province or of Ontario Hydro.

Then, if we look at it more carefully we find that in this year if we went to a smoothing operation, and we had 20 per cent increase this year, 20 per cent increase next year, rather than the 30 per cent proposed and the projected 15 per cent that I understand is in the offing for next year, the actual over the two years that remain of the Anti-Inflation Board, the total amount of the increase to the consumer would be six per cent to eight per cent less.

That would mean the consumers in Ontario, while they were under the Anti-Inflation Board would pay considerably less for Hydro service than they would under the proposal that the minister appears to be following and appears to be going to accept as reasonable.

We suggest it is wrong, it is simply wrong in this province at this time to propose a 30 per cent increase. It is wrong, not because it isn’t needed. We understand that. No one is arguing whether Hydro may need that much money. I don’t know, but I suspect that probably they do need the money. That is what the Energy Board tells me. But what I am saying is the public of Ontario cannot carry that burden this year. It can’t carry that burden this year. But if the minister will allow the smoothing operation to be put into effect, they can carry the total three-year burden smoothed over three years.

They can carry it more readily than what he is proposing to do or what Hydro is proposing to do and what I suspect the minister and his government intend to adopt.

I don’t know how we tell people on a fixed income that they are to find the additional 30 per cent to pay their Hydro bill. I don’t know how they will find it. I don’t know how I’d go into apartment buildings and tell many of the elderly that I deal with every day that they have to find another 30 per cent in addition to what they paid last year for their Hydro rates. Therefore, I’m suggesting whatever we can do that is any way reasonable to reduce that particular burden to something more manageable is an obligation we have to undertake in this Legislature.

While you may tell me that in the long run over the whole three-year period it will cost more to smooth than it will to pay as you go, I suggest that very same principle attaches itself to almost everything in life; that it would cost less to buy your car outright in 1976 than it would to pay for it over the period of three years. The fact is that people can’t afford it and so, therefore, they do it over a period of time they can manage within their capacity to pay.

If this were the only increase that people were to be faced with during this current year, then of course you may say that since this is all that they’re going to have to pay and there will be no other increases in any other commodity area it is a reasonable increase. But this isn’t the only increase; it’s only one of a large number of increases that they’ll be forced to pay.

Mr. Acting Speaker: Perhaps I could draw to the hon. member’s attention that his time has just about expired.

Mr. Deans: I won’t take more than 30 seconds to wind up. What I’m suggesting is that while the minister may, in a statistical way be able to show that the money that’s being asked for is necessary, and while he may argue that it would be better to pay as you go, my counter-argument is that what is better isn’t always possible. In the province at this time with the Anti-Inflation Board already in place and restricting wages and incomes, and given that there are other price increases imminent and already occurring, we have to take every step to ensure that the impact isn’t too great.

I suggest to the minister that a 30 per cent impact at this time is more than the average consumer can afford, and we should make every effort to reduce it to something more manageable by a smoothing operation.

Mr. Acting Speaker: Perhaps I might draw to the hon. members’ attention that it is my understanding there was 40 minutes allocated to each party. The NDP has used its 40 minutes, the Liberals have used 17 minutes and the Conservatives 30 minutes.

Mr. Nixon: Just 17?

Ms. Gigantes: You had nothing to say.

Mr. Sargent: Mr. Speaker, I will confine my comments to about two and a half minutes because we have some very good talent in the wings here in our party. Whether it’s a 30 per cent increase or a 50 per cent increase, we’re so close to the forest we can’t see the trees. About 40 per cent of the total revenue of Hydro goes to pay interest. The mess we’re in today, talking about a 30 per cent increase, is totally because of nuclear power. As for the $35-billion programme we’re embarked on, we’re shooting craps with destiny, believe me.

Isn’t it strange that here we have the largest programme of its kind in the whole world, the biggest project we’ve ever had, $35 billion, in the hands of a neophyte minister, in the hands of a man who has had no knowledge in the area of government or business, a minister who’s completely under the control of Hydro.

Mr. Good: Right.

Mr. Reed: It’s true.

Mr. Sargent: Even if this programme ever comes into being, in our lifetime it’ll only handle about 10 per cent or 15 per cent of the total load. Our position today in the bond markets of the world is so bad that shortly they’re going to be closing the doors on us. The credit of the great province of Ontario is zilch right now. Down the street about 400 yards from us, fellows, is a statue of Sir Adam Beck. He created Hydro for the people. We own Hydro, but who sets the rates for Hydro? We’re in bed with a great massive programme, a billion-dollar programme of nuclear