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March 13, 1978

31st Parliament, 2nd Session

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Hansard Transcripts

L017 - Mon 13 Mar 1978 / Lun 13 mar 1978

ESTIMATES

COMMONWEALTH DAY

OPP ROLE IN STRIKE

INCREASE IN OHIP PREMIUMS

STATEMENTS BY THE MINISTRY

ALGONQUIN PARK

HIRING OF 18-YEAR-OLDS

AUTO ACCIDENT BENEFITS

ORAL QUESTIONS

AUTO PACT

FRENCH-LANGUAGE SERVICES

INCREASE IN OHIP PREMIUMS

FLECK MANUFACTURING COMPANY

PAYMENTS TO MUNICIPALITIES

MINI-SKOOLS LIMITED

HYDRO TRANSFORMER FIRE

CITIZENSHIP PROGRAMS

SMOKING AND DRINKING HAZARDS

OTTAWA PSYCHIATRIC FACILITIES

TOUR OF NORTH

OWEN SOUND HOSPITAL TRANSFER

NORTH PICKERING INQUIRY

OLIVETTI LAYOFFS

STUDENT ASSISTANCE

URANIUM DRILLING

MINING TAX

MERCURY CONTAMINATION

MINI-SKOOLS LIMITED

WRITTEN QUESTIONS

OTTAWA PSYCHIATRIC FACILITIES

MOTIONS

TEACHERS’ SUPERANNUATION COMMISSION

ESTIMATES

INTRODUCTION OF BILLS

HEALTH INSURANCE AMENDMENT ACT

ORDER OF THE DAY

BUDGET DEBATE (CONTINUED)

The House met at 2 p.m.

Prayers.

ESTIMATES

Hon. Mr. Welch: Mr. Speaker, I have a message from the Honourable the Lieutenant Governor signed by her own hand.

Mr. Speaker: By her own hand, Pauline M. McGibbon, the Lieutenant Governor, transmits estimates of certain sums required for the services of the province for the year ending March 31, 1979, and recommends them to the Legislative Assembly, Toronto, March 13, 1978.

COMMONWEALTH DAY

Mr. Speaker: Hon. members, today, the second Monday in March has been set aside throughout the Commonwealth as a day to be known as Commonwealth Day, on which member nations draw attention to this unique world organization of which Canada is an active member.

As members are no doubt aware, the Commonwealth consists of one-quarter of the people of this earth, and one-half of the poor people of the world are members of the Commonwealth. I am sure all members will agree with me that at a time when we as Canadians tend to look inward it is useful to recall our international commitments, not only in the governmental organizations of the Commonwealth but in the important nongovernmental organizations such as the Commonwealth Parliamentary Association. This year, of course, the Commonwealth Games will be held in Edmonton which will no doubt strengthen Commonwealth ties and the appreciation of Commonwealth relationships in Canada.

On the occasion of Commonwealth Day we have in the Speaker’s gallery today the consular representatives in Toronto of nine members of the Commonwealth. These distinguished members are: from Australia, Mr. Llewellyn Martin; from Barbados, Mr. Stanton Carter; from Britain, Mr. F. S. Fielding; from Guyana, Mr. E. V. Persaud; from India, Mr. M. L. Suri; from Malaysia, Mr. N. Sivarajah; from Malta, Mr. John Pisani; from New Zealand, Mr. P. L. Harland; and from Trinidad and Tobago, Mr. Calvin Smith. I am sure all members will wish to welcome them on this occasion.

OPP ROLE IN STRIKE

Hon. Mr. Kerr: On a point of privilege in connection with the point of privilege raised last Friday by the hon. member for Wentworth (Mr. Deans): When I answered the hon. member’s question in the Legislature last Thursday I did not recall using the expression to a radio reporter, “only half the workers at the plant want the union.” I have since had the opportunity personally to listen to a tape of my interview with the reporter outside the cabinet office and there is no question that I did use that phrase.

Mr. Nixon: You misspoke.

Hon. Mr. Kerr: Mr. Speaker, I apologize if I inadvertently or incorrectly advised the Legislature last week on this point.

As far as the second point raised by the hon. member is concerned, I refer him again to my statement in the Legislature last Thursday afternoon when I said the decision to inform workers of their rights and responsibilities during a strike was made by the local OPP detachment commander, Sergeant Roy Glover. It may well be true that the local plant manager made this request to officers who visited his plant on the morning of March 3, but the important thing is that the decision was made independently later that same day by Sergeant Glover. There is nothing in my answers to the hon. member for Wentworth --

Mr. Cassidy: What?

Hon. Mr. Kerr: -- which he quoted last Friday which conflicts with my Thursday statement.

Mr. Davidson: Who are you trying to kid?

INCREASE IN OHIP PREMIUMS

Mr. Speaker: On Thursday last, March 9, the member for Scarborough-Ellesmere (Mr. Warner), on what he considered a point of privilege, asked me to rule that the OHIP premiums are, in fact, a tax, and that any increase therein would require legislation and the appropriate message from Her Honour, the Lieutenant Governor. He referred to

section 54 of the British North America Act and standing order 86 of this House, and on Friday, March 10, he added a citation from the Magna Carta.

Mr. Makarchuk: Good document.

Mr. Speaker: I must first refer you to the Health Services Insurance Act, Revised Statutes of Ontario, 1970,

chapter 200,

section 32, clause (e), which provides that the Lieutenant Governor in Council may make regulations “prescribing the amounts of premium payable for a single insured person, an insured person and one dependant and an insured person and two or more dependants and governing the time and manner of payment.”

What the member is, in fact, doing is asking me to rule on the legality or constitutionality of legislation passed by this House. I must inform the House that this question is beyond my jurisdiction. I quote from a ruling delivered by Mr. Speaker Cass on January 27, 1969, as follows: “There have been numerous decisions by former Speakers, the most recent being that of Mr. Speaker Stewart on April 4, 1944, to the effect that it is not within the Speaker’s responsibilities or powers to give an opinion on the legality or constitutionality of any legislation introduced in the House.”

As mentioned, the matter raised by the member pertains to the legality or constitutionality of a statute. As such, it obviously is not a matter affecting the special privileges which the House and the members thereof enjoy, and I must, therefore, consider it desirable to point this out to the House. In other words, the hon. member for Scarborough-Ellesmere did not, in fact, have a valid point of privilege.

Mr. Warner: Mr. Speaker, on a matter of principle --

Mr. Breithaupt: I think he should resign.

Some hon. members: Resign.

Mr. Warner: If you’ve got a better offer.

Mr. Ruston: Resign.

Mr. Warner: Do I hear shouts of a better offer over there?

An hon. member: We’re going over our reports.

An hon. member: Back to school.

Mr. Warner: Mr. Speaker, I firmly maintain that some of my privileges and, consequently, those of --

Mr. Speaker: You can’t debate the ruling.

Mr. Warner: This is on a different matter, a different point of privilege.

Mr. Speaker: You can’t debate the ruling. You can challenge it, if you wish.

Mr. Warner: I’m not debating your ruling, Mr. Speaker, nor am I challenging the ruling.

Hon. Mr. Rhodes: Then sit down. You can’t make a speech.

Mr. Warner: I appreciate your effort. What I have is a point of privilege under

section 42 of the standing orders. I maintain that the privileges both of myself as a member and of my constituents have been removed by the action of this government. No taxation --

Mr. Speaker: Order. There is ample opportunity for you to raise that during the estimates, or during the budget debate. You can do it by way of a question. If you’re not satisfied with a question, you may have recourse to the late show, but you cannot question the ruling of the Chair, which includes the standing orders.

Mr. Warner: May I raise the matter then by way of introducing a bill this afternoon following question period?

Mr. Speaker: That’s your choice.

Mr. Warner: That’s what I shall do.

Mr. Makarchuk: We’re one step ahead of you.

STATEMENTS BY THE MINISTRY

ALGONQUIN PARK

Hon. F. S. Miller: Mr. Speaker, I’m pleased to announce that a significant step --

Mr. Wildman: Is this a policy statement?

Hon. F. S. Miller: -- to protect the environment of the interior of Algonquin Park will be taken when the regulations under the Provincial Parks Act are amended to require that after April 1, 1978, only burnable food and drink containers may be taken into the interior of Algonquin Park by canoe trippers and hikers. These restrictions follow the successful experiment introduced last year in Quetico Provincial Park. The results were all positive. Litter was considerably reduced, the quality of the environment was improved and the subsequent cost of garbage removal was materially lowered.

This significant environmental decision is aimed primarily at reducing the volume of garbage in Algonquin Park. The majority of abandoned materials are in the form of disposable food and beverage cans and bottles which decompose either very slowly or not at all resulting in degradation of values and in a decline in the recreational quality of one of Canada’s best-known parks. Obviously, this accumulation spoils the scenic and recreational value of remote areas in Algonquin Park for everyone. We have taken this positive action to prevent it.

Since its inception, Algonquin Park has provided thousands of visitors with some of the best wilderness canoeing opportunities available in Ontario. The provision of this high-quality wilderness experience has been threatened by the serious litter problem, requiring expensive cleanup programs. The ban was proposed by a number of individuals and organizations, including the Algonquin advisory committee, and has had wide public support The results of a questionnaire survey showed that a majority of the interior visitors favoured such a ban. The Ontario Parks Council has also recommended its implementation.

[2:15]

I should point out that the forthcoming ban will not apply to the organized campgrounds where special arrangements are made for garbage collection and disposal. These are primarily along the Highway 60 corridor. This restriction is another step in the implementation of the master plan for Algonquin Park which is designed to ensure that interior camping areas remain unimpaired for future use and enjoyment.

HIRING OF 18-YEAR-OLDS

Hon. Mr. Grossman: Mr. Speaker, it has been brought to my attention -- by the Minister of Natural Resources, as a matter of fact -- that there is some concern among resort and tourist operations, for example, that people of 18 will not be allowed to work in licensed establishments if the amendments to the liquor regulations raise the legal drinking age.

The question is particularly topical now because hiring decisions for summer jobs are being made in many sectors of the hospitality industry. I want to quell any doubts, by giving my assurance that whatever the government ultimately decides the legal drinking age should be, 18-year-olds will, nonetheless, continue to be permitted to work in licensed premises.

Mr. S. Smith: The Legislature decides, not the government, may I remind you.

AUTO ACCIDENT BENEFITS

Hon. Mr. Grossman: Mr. Speaker, I have a second statement. I would like to announce today that we are amending the regulations under the Insurance Act to improve automobile insurance accident benefits.

Mr. Laughren: Haven’t we got insurance, Larry?

Hon. Mr. Grossman: No-fault accident benefits, being paid at the present time, were introduced more than six years ago by this government; in January 1972, to be specific.

An hon. member: How about lowering the rates?

An hon. member: When is the minister going to listen to the consumer?

Mr. Cassidy: The minister is more right-wing than Sterling Lyon.

Mr. Swart: The government’s 25 years behind the times.

An hon. member: Why doesn’t the minister do what the consultants told him?

Hon. Mr. Grossman: I don’t think I need to go into any great detail on what inflation has done to the level of 1972 benefits in terms of 1978 dollars. Quite simply, the current benefit level is pitifully inadequate. What we are doing today is to make it contemporary.

To provide just a little background, the provision of these benefits is mandatory and must be included in every contract of third party liability insurance sold in this province. The benefits allow every insured person, including dependants and pedestrians hit by an insured automobile, to have immediate recourse to fixed payments by reason of death or loss of earnings. This eliminates the need to go to court to establish fault, and any amounts recoverable on a fault basis, on either court judgement or settlement are reduced by the accident benefits paid or payable.

The select committee on company law has recommended a doubling of death benefit and loss-of-earning benefit. To this we have added certain other changes based on the experience gathered in working with the provisions. We are today, therefore, announcing the following major benefit increases:

Firstly, increase of medical and rehabilitation benefits in excess of OHIP and other expenses within the new Health Insurance Act from $5,000 to $25,000. Chiropractic expenses, which were formerly not covered, are included in the package.

Secondly, death benefit of the head of the household and his or her spouse is increased from $5,000 and $2,500 respectively, to $10,000.

Thirdly, death benefits for all children under 21 are increased to $2,000. Previously, it was $500 for children under five, and $1,000 for children between the ages of five and 21.

Fourthly, funeral expense benefits are increased to $1,000 from $500.

Fifthly, the maximum payable for loss of earnings has been doubled from $70 to $140 per week.

Mr. McClellan: Why won’t you raise the compensation rates the same way?

Hon. Mr. Grossman: The regulation is in keeping with the provisions of the Family Law Reform Act in that it incorporates a new definition of spouse. As a result, there are benefits for the partners in a common law relationship of five years’ duration or in a relationship of some permanence, regardless of the length of time, where there is a natural child.

A very important part of the regulation changes the concept of “whole and continuous disability” to add a provision which entitles an individual who has consented to return to work and who has suffered a relapse within 30 days, to a resumption of benefits. This will encourage members of the labour force to attempt to resume work without penalizing them if it is then discovered that the attempt was premature. This regulation will come into force July 1 of this year to give the insurance industry sufficient lead time to revise forms and reprogram computers. I might add that the much-needed revision of this regulation followed extensive dialogue in consultation with members of the industry.

The no-fault benefits were introduced in 1972 by this government to eliminate financial hardship for those involved in automobile accidents in the interim period while the insurance companies and the courts wrangled over whose insurers should pay. It was a concept which worked, but it can only continue to work if the benefits reflect 1978 costs.

The government feels this is a progressive amendment which will help alleviate the hardship suffered by those consumers unfortunate enough to be involved in an accident.

ORAL QUESTIONS

AUTO PACT

Mr. S. Smith: A question for the Premier, Mr. Speaker: In view of the somewhat over 12,000 unemployed in the city of Windsor, and in view of his interest and ours in ensuring a more equal balance in the auto trade agreements with the United States, can the Premier tell the House if he has been informed by Chrysler concerning any possible plans they may have with regard to the pickup truck assembly plant -- the one at Tecumseh and McDougall? Has the Premier been informed as to any plans they might have to move that plant out of Canada into the United States? Could he report to this House on that?

Hon. Mr. Davis: Mr. Speaker, I have had no information of that kind. I will check it out for the Leader of the Opposition, but there’s been no information of that nature brought to my attention.

Mr. S. Smith: I’m pleased to hear that. By way of supplementary may I ask the Premier to give some consideration to a letter addressed to him, which is probably in his office, from the president of Local 444 of UAW? And will the Premier speak to Chrysler and make a full report to this House? Thank you.

Hon. Mr. Davis: Yes.

Mr. Makarchuk: Supplementary: In view of the fact that the whole matter of auto parts and auto manufacturing is one of concern between both the provincial and the federal governments, is the Premier prepared to call either a press conference or some kind of a public gathering where he can state Ontario’s case? The members of the federal government who are responsible for this particular sector of our manufacturing economy could also state their case, and the Premier would be able to tell them to get off whatever they are doing and insist that we get our rights and our proper share of the manufacturing in Canada.

Mr. Makarchuk: I think the people of Ontario would want to know what you are all about.

Mr. B. Newman: A supplementary to the Premier: During his discussions with Chrysler concerning the potential phasing out or closing down of the pickup line assembly plant, will he use his powers of persuasion, if the Chrysler officials decide on closing that plant, to keep it open as long as possible and/or substitute some other operation in that plant so the work force in the city of Windsor can remain at Chrysler as it is today?

Hon. Mr. Davis: It has always been the approach of myself and the government -- the ministers -- to do their best to ensure employment opportunities whether they be in Windsor or even in Brampton.

Mr. Cooke: Mr. Speaker, a supplementary for the Premier: I would like to ask the Premier, in view of the fact it was mentioned in the Throne Speech that it was felt something had to be done with the auto pact, what specific new initiatives is this government prepared to take to see that the auto pact begins to work and a balance begins to exist, so that cities like Windsor do not have to put up with 11.4 per cent unemployment any longer?

Mr. Cooke: I said “new initiatives.”

Mr. S. Smith: I’ll have copies of that. I think it would be a good idea.

Hon. Mr. Davis: Yes, I have got a lot of stuff I want to send you.

Mr. S. Smith: Send it along, send it along. It’s better than the usual secrecy anyway.

FRENCH-LANGUAGE SERVICES

Mr. S. Smith: A second question to the Premier on a different topic: Since the Premier believes, as we all do, that we must “reduce factional sentiments in our society” -- I am referring to his speech at Bucknell University on Friday -- does he not agree that an all-party committee of the Legislature to review and report on the state of French-language programs and services in Ontario would be the first step to finding, as the Premier put it, “reasonable accommodation to situations our forefathers were perhaps not as prepared to discuss”? Is the Premier now prepared to establish such a committee, as I have asked him to do?

Hon. Mr. Davis: I appreciate the suggestion from the Leader of the Opposition. I’m delighted to see he read that small excerpt in the Globe and Mail from my rather lengthy lecture to the students and faculty of Bucknell University which is in Lewisburg, Pennsylvania.

Mr. S. Smith: I wouldn’t have missed it.

Mr. Lewis: Maybe the Premier should circulate that as well.

Hon. Mr. Davis: If the member will read it, I’ll circulate it. It’s really one of the better lectures that have been given.

Mr. Martel: That doesn’t say much for the quality of the lectures.

Mr. Makarchuk: The Treasurer circulates his speeches. Why can’t the Premier?

Hon. Mr. Davis: As I say, it’s one of the better ones. I can only make a judgement because it’s the first one I’ve heard of that particular lecture series.

Mr. Lewis: You mean given by you.

Mr. Laughren: Modesty might become you.

Hon. Mr. Davis: No, at that particular university because I’ve not attended that university.

Mr. Cassidy: I am reconsidering the idea the Premier should leave politics for academic life.

Hon. Mr. Davis: There was no degree. I was there on a working mission.

Mr. Cunningham: There was not even a football team there?

Hon. Mr. Davis: No, Bucknell is not in that; they play basketball very well.

Mr. Speaker: Order.

Hon. Mr. Davis: I was interrupted, Mr. Speaker.

Interjections.

Hon. Mr. Davis: Actually, in my observations, I was talking about factual or regional differences in a Canadian perspective. Perhaps when the Leader of the Opposition reads that lecture very carefully, he will understand what it was I was attempting to say.

Mr. Samis: I doubt it.

Hon. Mr. Davis: While I appreciate the constructive suggestion as to the possible establishment of a select committee, I really think the best way for this to be discussed and debated is here in the Legislature. I haven’t a closed mind on any subject. I told the Leader of the Opposition when he mentioned this to me a few days ago that I didn’t have a closed mind on it. But I think for an analysis of our existing programs and some greater awareness and understanding of them, perhaps some discussion here in the House might be a better route to go. However, I haven’t said: “No.

We will never have a select committee.” If he is asking me whether at 2:15 this particular afternoon we are ready to appoint a select committee, the answer to that would have to be no.

Mr. S. Smith: By way of a supplementary, while I appreciate that the Premier did tell me that the other day, could I ask him, first of all, if he will ask his House leader to find a day for a special debate on this very matter, as he suggests? Secondly, since he says his mind is not closed to the idea of a select committee, could he, in thinking about that, recall that the main purpose of such a committee would be to depoliticize and take out some of the partisan aspects of what is potentially a very divisive topic but which could be a very useful topic for the future of our country and our province?

Hon. Mr. Davis: I’m delighted to sense that the Leader of the Opposition is aware of it being potentially divisive, if that is the right way to pronounce it. I think some discussion in this House perhaps after the recess might be appropriate. I have always attempted to depoliticize this issue.

Mr. Martel: Yes, that was obvious last July.

Mr. Samis: Can I ask the Premier if he is concerned about an increase in backlash in this province against minority rights, and as Premier, in the interests of national unity, what is he doing to challenge and confront such a backlash?

Hon. Mr. Davis: The hon. member may be more aware of a backlash than I am. I can only give him my own personal observations and they are not totally representative. I haven’t talked to large numbers of people, although in just about every gathering in some casual conversation this matter is discussed. I still sense a very genuine feeling in this province on the part of the people with respect to the language rights of the Franco-Ontarians.

I recognize there are always exceptions to this. It’s fair to state that, contrary to the policy of the member’s party, there is fairly general support for the present position of the government in what we have been attempting to do, with, I think, some measure of success. I question whether there is this backlash. The hon. member may feel there is.

[2:30]

Mr. Samis: You mentioned it in Montreal.

Hon. Mr. Davis: Mr. Speaker, I did not mention it in Montreal. I was asked a specific question, “Was there ... ?” and I said there could be. I did not say there was, and I think any accurate reading --

Mr. Samis: You are splitting hairs again.

Hon. Mr. Davis: -- of what was said will show that, because I am very careful what I say on that particular topic.

Hon. Mr. Welch: There’s an important distinction.

INCREASE IN OHIP PREMIUMS

Mr. Cassidy: Mr. Speaker, ignoring the Leader of the Opposition’s efforts to depoliticize every issue in this province, I would like to ask the Premier this question: In view of the mounting crescendo of public opposition to the OHIP premiums increase as announced in the budget, is the government prepared to reconsider its position and to maintain OHIP premiums at or below the levels which existed before last week’s budget?

Hon. Mr. Davis: Mr. Speaker, I recognize the leader of the New Democratic Party wants to politicize everything in sight. That’s part of our process. I don’t quarrel with that, but I would say the answer to that question at this moment, of course, is no.

Mr. Cassidy: Supplementary: With the growing amount of public opposition to premium increases, will the Premier not take the initiative and bring this issue to the Legislature by means of resolution or by means of legislation in order to submit his government’s plans to debate in this House to be followed by a vote?

Hon. Mr. Davis: Mr. Speaker, these matters are always contentious. They are always difficult. It is not easy for government in its assessment of the situation in this province to make decisions with which everybody is going to agree, but to ask for a specific resolution, I think the leader of the New Democratic Party knows full well the process in this House. I fully expect from what I have read that in his contribution tomorrow afternoon he will introduce a motion of less than confidence --

Mr. Martel: What else do you expect?

Hon. Mr. Davis: -- and that is the process that I think should be followed. The avenue for members to make their views known and to offer constructive suggestions to us is open to us in the budget debate, but the leader of the New Democratic Party can, tomorrow at about 3:15, take whatever steps he may feel he wants to take, although I would just urge him in advance to take a look at the total economic situation, take a look at the total health costs, ask himself in terms of being responsible what other --

Ms. Gigantes: Soak the poor.

Hon. Mr. Davis: -- opportunities are there in terms of government administration and policy --

Mr. Swart: All your policies are reason for no-confidence.

Hon. Mr. Davis: -- and sort of put that into the mix. I know his answer is very simple, tax the corporations out of existence so we don’t have any tax base --

Mr. Martel: He didn’t say that.

Hon. Mr. Davis: -- on which to fund the economic and social policies of this province.

Mr. Makarchuk: Six other provinces do not charge for OHIP.

Mr. S. Smith: Since, as the Premier knows, our concern on this matter is one that we feel ought to be dealt with in the social development committee, where we hope that alternatives --

Mr. Cassidy: Going to depoliticize it, eh?

Mr. Lewis: What a copout that is.

Mr. S. Smith: -- can be put forward by all parties, since it’s easy enough to criticize but not as easy to present alternatives --

Mr. Martel: There is Xaviera Hollander again. Another position.

Mr. S. Smith: -- will we have the assurance of the Premier that we are going to have the co-operation of the government in our search for the various possible alternatives, that all studies done by the Ministry of Health and by the Treasurer (Mr. McKeough) will be made available to that committee for use and that the results of that committee will, in fact, be taken very seriously by the Premier?

Hon. Mr. Davis: Mr. Speaker, I take the results of every select committee of this House seriously. I took the results of the Hydro select committee very seriously in terms of a certain issue.

Mr. Lewis: Right. Got you off the hook.

Hon. Mr. Davis: I waited, and in that I didn’t get any, shall we say, constructive alternative, then the government obviously had to make that decision. I can assure the Leader of the Opposition that I think the Minister of Health (Mr. Timbrell) is prepared almost literally to inundate the committee in terms of material, statistical information et cetera, and I can assure him that in terms of the functioning of the committee it will not be short of any co-operation from the government.

Mr. Lewis: It’s like a godsend to you to have a Liberal Party to shore you up.

Mr. Martel: They help you, don’t they?

Mr. Cassidy: In view of the fact that the amendments to the budget and the budget itself will not be voted upon until December, and in view of the fact that the cabinet his already acted by order in council concerning this premium increase, does the Premier not agree that it is contrary to the principles of parliamentary democracy to impose a tax increase without legislation from this House and does he not agree that there should be no taxation without legislation which is passed before May 1?

Mr. Martel: Fought a couple of wars over that, didn’t they, Bill?

Hon. Mr. Davis: I would only remind the leader of the New Democratic Party of the ruling that you made earlier this afternoon, Mr. Speaker. I think that really is an answer in itself.

Interjections.

Mr. Warner: A supplementary question to the Premier: Noting that at least one of his cabinet colleagues has publicly disavowed any responsibility for the budget -- and there are probably others --

Mr. Lewis: At Hy’s steak house, no less.

Mr. Warner: -- could he please explain why he has rejected the democratic principle of no taxation without legislation?

Mr. Eaton: Have you ever heard of paying fees for service?

Hon. Mr. Davis: This government has never rejected any tradition or principle of the parliamentary process. The process is totally understood, I think some days, even by the hon. member who asked the question.

Mr. Speaker: A new question?

Mr. Cassidy: Final supplementary, Mr. Speaker: In view of the fact that the Premier has already rejected any action arising out of this legislative committee, does the Premier not understand that the opposition to these OHIP premium increases among the public of Ontario is real and that this is not sabre-rattling on the part of the New Democratic Party of Ontario?

Hon. Mr. Davis: Since the new leader assumed office, I can never distinguish between real problems and sabre-rattling, because he rattles his sabre -- if I may use that terminology -- at every opportunity he gets.

Mr. Martel: That’s a great answer. You just ignored the question --

Mr. Cassidy: The people of the province will judge that, not just this Legislature.

Mr. Eaton: You blew it again, Mike.

Mr. McClellan: What is your position today?

Mr. Martel: It’s a new position, isn’t it? Xaviera Hollander would be envious of you.

Mr. Hodgson: Show some respect, Elie; you’re a House leader now.

FLECK MANUFACTURING COMPANY

Mr. Cassidy: Mr. Speaker, I have a new question for the Solicitor General. Does the Solicitor General have any comment on the affidavit he received today concerning what has been happening at Fleck Manufacturing Company in Centralia, particularly in view of the apparent contradictions between it and his earlier statements, and especially the fact that the police were apparently involved at least two weeks before the minister had previously admitted?

Hon. Mr. Kerr: Mr. Speaker, I have had a chance to read the letter which accompanied the affidavit. I really haven’t had a chance to look at the affidavit; it was handed to me just a few minutes before two o’clock. However, the letter refers to the affidavit and makes certain allegations. I intend to look into them.

Mr. Mackenzie: Supplementary: If indeed the information is verified, that the police were in that plant at least two weeks prior to what we have been told to date and discussing the strike situation with management and employees, and in view of the comments that were in Saturday’s Toronto Globe and Mail made by Sergeant Glover of the Exeter detachment of the OPP, who said, “There is no doubt that barring the individual in question from the strike site has it effects; this does the job,” would the minister not take a look at some other form of investigation, rather than having the OPP investigate their own complicity in this situation?

Mr. Martel: That is like putting Dracula in charge of the blood bank.

Hon. Mr. Kerr: There was a visit by a police officer to the plant, I believe in late January or early February, in respect to another investigation. I understand it was in respect to a criminal investigation and not in respect to the present dispute at the company between labour and management. As far as the report in the newspaper is concerned, I will look into that. I didn’t see that particular quote.

Mr. Speaker: Final supplementary; the member for Hamilton East.

Mr. Mackenzie: Would the minister then comment or also check into the statement in the affidavit as to whether it was a criminal investigation some two weeks prior? As to the comment made in that affidavit, Mr. Turner approached me and said that Constable Maclntyre would be on the picket line the first morning of the strike. Further, in checking that, would the minister also find out if, just before a previous attempt to organize this plant, some eight or nine months prior to this successful organizing drive, the Ontario Provincial Police were also in the plant, discussing with management and the employees the effects of a union in that plant?

Mr. Warner: Shameful. Union-busting.

Hon. Mr. Kerr: I will look into those matters.

Mr. Martel: I think you should fire a few people.

Mr. Riddell: This is a new question to the Premier on a topic related to the Fleck Manufacturing Company strike. As a prelude to my question, I might say that I spent two hours this morning talking to the workers in the plant, to the workers outside the plant and to the management --

An hon. member: Too little too late.

Mr. Speaker: Question?

Mr. Riddell: -- and it appears that considerable headlines were made last week arising from questions put by the NDP, information which was in a large part erroneous --

Ms. Gigantes: Question?

Mr. Speaker: Question?

Mr. Riddell: -- accusations which were false and allegations which were unfounded.

An hon. member: Where were you last week?

Mr. Speaker: Order. That’s not a question; that’s a statement.

Mr. Riddell: In the interest of de-escalating --

Mr. Deans: In whose opinion?

Mr. Riddell: In my opinion, after talking to the workers --

Mr. Deans: After management put the words in your mouth.

Mr. Speaker: Order.

Mr. Riddell: After I talked to the workers.

Interjections.

Mr. Speaker: Order. If the hon. member doesn’t wish to pose a question, I can recognize someone else.

Mr. Riddell: I’ll pose my question, but I’m getting a lot of flak, Mr. Speaker.

Interjections.

Mr. Laughren: Fleck, it’s called -- not flak.

Mr. Davidson: You’re getting a lot of Fleck.

Mr. Riddell: In the interest of de-escalating an explosive situation --

Mr. Lewis: What do you mean, explosive?

Mr. Riddell: -- explosive from the standpoint that there are supposed to be 1,300 shift workers coming from Talbotville --

Mr. Lewis: Oh, I see.

Mr. Riddell: -- will the Premier review and report to the House on the situation at Centralia concerning the Fleck Manufacturing Company so that the facts may be known? I refer specifically to what the police said to the workers before the strike began and how the police, strikers and workers have conducted themselves --

Mr. Deans: Welcome aboard.

Mr. Martel: You know they always are in every strike -- the police.

Mr. Riddell: -- since the strike occurred. Will the Premier undertake to ascertain the facts and report to the House? In that connection, will the Premier also undertake to table the documentation concerning the application, consideration and terms of the lease which Fleck Manufacturing Company holds at Huron Industrial Park with the Ontario Development Corporation?

Mr. Lewis: We’re not as nasty as you are, my friend. Not as insidious.

Mr. S. Smith: Don’t put on that kind of attitude -- holier than thou. That’s why you are the third party.

Mr. Lewis: Well, come on. You open up by asking falderal and then you get to what you really want. You never change.

Interjections.

Mr. Speaker: Order, order.

Mr. Kerrio: Hang up your skates, Stephen, you’re done. Put your stick away.

Mr. Deans: We at least ask about things that are immediate and relevant.

Hon. Mr. Davis: Mr. Speaker, I’m tempted to ask the hon. member if he would repeat his question, but --

Mr. Riddell: He’d be glad to.

Hon. Mr. Davis: It was the

preamble before that I’m sure he wanted to repeat. I must say he looks very healthy -- I welcome him back. Nice to have him here.

Interjections.

Mr. Speaker: Order, order.

Mr. Riddell: Point of privilege -- after a very heavy two months on legislative business I was just giving nature a chance to get ready for another year of dedicated service.

Mr. Deans: That’s as much hogwash as the first piece.

Mr. Speaker: Order, order.

An. hon. member: The Premier has a tan.

Mr. Speaker: I don’t think the Premier or any other member of the House is too concerned about the degree of tan that the hon. member is sporting.

An hon. member: He asked about it.

Hon. Mr. Davis: Nor are we interested in the health of his body, for that matter, but --

Mr. Reid: We know the health of his mind --

Hon. Mr. Davis: Yes, it’s his mind that we worry about.

Mr. Reid: Looks like a terminal case.

Hon. Mr. Davis: In answer to the first part of the question, I think really the Minister of Labour (B. Stephenson) has dealt with some of the matters raised, but I will alert her --

Mr. Laughren: That’s what bothers you.

Hon. Mr. Davis: -- as to the specifics of the question the hon. member asked and will ask her to make a report to the House.

With respect to the second part of the question, I will ask the Minister of Industry and Tourism (Mr. Rhodes) to table whatever documentation there is, which I think is pretty close to what has already been reported in the press. But if the hon. member hasn’t had a chance to read that, the lease, I’m sure, will be readily available.

Mr. Martel: They’re scandalmongers.

Hon. Mr. Davis: Listen, your own leader didn’t cover himself with glory, either.

Mr. Speaker: The hon. member for Welland-Thorold.

Mr. Martel: No, no. I read what he said.

Mr. Speaker: Will the member for Sudbury East allow his colleague to ask a question?

Mr. Martel: I am having a discussion with the Premier.

PAYMENTS TO MUNICIPALITIES

Mr. Swart: Will the Treasurer recall that according to his own figures the province one year ago had a net balance owing to municipalities of $18 million? Will he recall that through his unilateral change of the Edmonton commitment, making it retroactive for a period of four years, and that in September that $18 million owing was changed to $298 million owing by the municipalities to the province, and that he now claims in a new budget that he has overpaid municipalities by $444 million?

Because he has now unilaterally, without any notice to municipalities, assessed new costs against municipalities in the amount of tens of millions of dollars for OHIP premiums and for licences and for taxes, will he give this House and the municipalities an assurance that he will not recover by way of reduced transfers the $444 million which the Treasurer says the municipalities owe the government, either next year or in the future?

[2:45]

Mr. Warner: Fiscal finagling.

Hon. Mr. McKeough: I thought the member would draw attention to the chart which shows that after five years we have delivered some $ 13.581 billion to the municipalities out of a commitment of $13.583 billion -- which indicates that we are only, after five years, $2 million short. I thought the member was standing up to commend us on that today, and I am a little surprised he didn’t.

Elsewhere in the budget the member will find some reference to the fact that we hope to get along with market value assessment, with property tax reform --

Mr. Martel: Another 10 years.

Hon. Mr. McKeough: -- that there will be discussions about grant reform and we will move on from there to a redefinition of the commitment. Therefore it would be premature of me to answer that question today.

Mr. Warner: You fiscally fiddle while the province burns.

Hon. Mr. Davis: Oh, Scarborough is in pretty good shape.

Mr. Swart: By way of supplementary: You didn’t answer that question, but may I ask the Treasurer if he will not, in the coming year, transfer to municipalities an offsetting amount equal to the new taxes that he unilaterally levied against them this year? Is he not aware, because he hasn’t increased the property tax credit, that the property tax increases, like OHIP premiums, hit the modest- and low-income taxpayers the hardest?

Hon. Mr. McKeough: I find it hard to believe that OHIP premiums hit the lowest-income people hardest, inasmuch as most of them are exempt.

Interjections.

Hon. Mr. McKeough: Some 1,820,000 in this province will not pay the premiums.

Mr. Makarchuk: There is a difference between the pensioner and the low-income person.

Hon. Mr. McKeough: I recognize the member will pay and that I will, but 1,820,000 people will not pay the premiums in this province.

Mr. Swart: How about those who make $7,000 a year?

Hon. Mr. McKeough: Beyond that I am not aware of where we have hit municipalities. And no, I don’t intend to go back and redistribute the amount of money which was determined back in September. I can’t think of anything more upsetting. We make our announcements in September, and within a few millions of dollars those are the amounts of money which are delivered to the municipalities, which they have been counting on since January 1. No, we will not be going back.

Mrs. Campbell: Are you sure it isn’t a question?

MINI-SKOOLS LIMITED

Hon. Mr. Norton: I would like to respond to the questions raised by the hon. member for Bellwoods (Mr. McClellan) in the House on Thursday last. I would have responded on Friday, but I delayed one day in order to clarify my position through my legal staff with respect to an injunction which I understood had been issued relating to the documents which had been passed to me by the hon. member. Having received an opinion from our legal staff, I will respond to the questions.

The first question raised by the hon. member was whether or not it was true that Metro awards agreements without proper financial submission or adequate accounting. Requirements for submission of budget and financial information prior to negotiating a purchase-of-service agreement with privately operated nurseries are established by the municipalities in question. Metro social services has set up its own criteria in such matters.

The Ministry of Community and Social Services does not review these procedures and does not participate in the negotiations concerning the agreements. The municipalities submit proposed per diem rates to the ministry and a proposed budget for purchase of service. We review the Metro social services budget and approve both the per diem rates and the total net municipal expenditures.

We are satisfied that the rate proposed by the Metro social services in 1977 for its purchase of service with Mini-Skools is competitive. This rate was compared with those for other nurseries. The proposed per diem for 1977 for Mini-Skools was $10.57 in each of the six nurseries. We understand that the per diem rate will now be reduced to $10.17 for all Mini-Skool nurseries as a result of the experience over the past year.

The $10.57 was not the highest per diem rate for a private nursery in the budget submitted to us by Metro social services. It also compared very favourably with the per diem of $15.92 in Metro-operated day nurseries.

We are pleased that the actual per diem is coming in at a lower level than was originally proposed. Once a month Metro social services inspects the accounts submitted to it under purchase-of-service agreements to establish the validity of the accounts. Each nursery is checked once a month to reconcile the attendance of each subsidized child with the amount being claimed on his behalf.

This is one of the most intensive municipal audits of purchase-of-service accounts in the province. In addition, the ministry employs claims examiners to review the same account on behalf of the province and because of the intensity of the scrutiny by Metro social services it is very rare that any adjustment is necessary in those accounts.

The second question raised by the hon. member related to the issue of whether or not subsidy payments without a signed contract are legal under the Day Nurseries Act. Metro social services have signed agreements for 1976 with Mini-Skools covering purchase of service. There is no requirement in the Day Nurseries Act that purchase-of-service agreements be in writing, although we do by policy require them to be in writing. Metro social services have negotiated a new agreement for 1977 and we are advised that it was almost finalized and would have been signed except that they now wish to wait until the questions which have been raised have been settled.

In the fall of 1976 Metro social services requested budget information from Mini-Skools in connection with the renewal of the purchase-of-service agreement. In 1976 Mini-Skools had not submitted such information and it was decided that no agreement would be signed for 1977 until this was received. It was finally received in December 1977 and the agreement negotiated for a per diem of $10.17, as opposed to the higher figure earlier in the year. This rate has not yet been paid by Metro social services to Mini-Skools. Provincial subsidies are still based on 1976 rates.

We have a legal opinion that the arrangements for 1977 can be construed as an extension of the previous agreement and on this basis subsidies have been paid by the ministry to Metro for 1977 based on the conditions which pertained in 1976.

The next inquiry was whether the profits of Mini-Skools are a ripoff. The Ministry of Community and Social Services has no direct knowledge of either the profits or losses of operators of day nurseries unless these are financed directly by the province. In the case of Mini-Skools we do not know how much profit, if any, was made by them.

We do know that a per diem rate of $10.17 compares favourably with those negotiated by other nurseries with Metro social services. Metro social services budget criteria do allow a profit of 10 per cent based on income and expenditures as defined in their budget guidelines.

The next inquiry was whether Mini-Skools’ rated capacity exceeds the licence capacity established by the ministry. The term “rated capacity” is not one which the ministry uses and we have not been able to determine precisely how it is defined by Mini-Skools. In the statement by Elody Scholz to the social services and housing committee it is indicated that rated capacities are internal goals for enrolment.

Based on ministry inspection reports since 1975, Mini-Skools did not have in any nursery an enrolment overall which exceeded its licensed capacity. We have no evidence from our inspections that Mini-Skools overenrolled generally. In specific rooms, there were from time to time more children than would be permitted under the space requirements set out in the day Nurseries Act.

Finally, Mr. Speaker, in response to the fifth question, it was indicated in that question that the child-staff ratios of Mini-Skools centres are violated as a matter of habit. There have at times in the past been problems with child-staff ratios. In view of this, inspections are made more frequently than once a year at some Mini-Skools centres. Notice is not given of inspections prior to their being carried out by our staff.

Mini-Skools have complied with the child-staff ratios after requirements have been discussed with them. The 1975 licence for Tuxedo Court was issued with a condition requiring the operator to comply with the regulations concerning staffing, and this was done.

It is not our practice to revoke licences immediately when difficulties are encountered, except in situations where the safety or wellbeing of the children appears to be in jeopardy. We meet normally with the operators and discuss the requirements of the legislation and give them a specified period during which they have an opportunity to comply. Closing a nursery creates difficulties for all concerned but particularly for parents and children. We therefore provide some consulting service to assist operators to meet the standards within a specified period.

Mr. Speaker: Detail was sought in the multiple questions that were put by the hon. member for Bellwoods, and as I recall in the supplementaries that followed. I think in future a question as detailed and requiring as much detail in the answer should be put on the order paper. I’m going to add five minutes to the question period.

Mr. McClellan: May I have a supplementary?

Mr. Speaker: A brief supplementary.

Ms. Gigantes: He’s got a right to it.

Mr. McClellan: Rather than get into the details of his response, do I gather from what the minister has said that he had refused to undertake the kind of inquiry I requested, which would have involved his use of his authority under regulation 13 of the Day Nurseries Act to obtain full financial and enrolment records from Mini-Skools and determine whether the material which I presented to the minister, which I gather he didn’t even study, indicated violations of the Act and irregularities in the contract awarding?

Hon. Mr. Norton: I don’t think that degree of sarcasm is necessary in response to what was a sincere attempt to respond to the hon. member’s questions of the other day.

Ms. Gigantes: That’s a sincere question.

Mr. Martel: Boy, you’re touchy.

Hon. Mr. Norton: No, it does not mean I am closing off the matter.

Ms. Gigantes: Talk about sarcasm.

Hon. Mr. Norton: Obviously, we will continue to look into this but I do want to indicate to the hon. member very clearly that this is not a situation that has not been under regular supervision by our ministry staff and, as I understand it, by the Metro staff. Obviously we will look in detail at the rather copious material that was supplied to us.

Mr. McClellan: Couldn’t the minister have done that before he answered?

Hon. Mr. Norton: If there is any truth to the innuendo and outright accusations that the hon. member has made, certainly I will respond.

Mr. McClellan: It’s not innuendo.

Hon. Mr. Norton: I will continue to examine the matter.

Mr. McClellan: May I have another supplementary?

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

HYDRO TRANSFORMER FIRE

Mr. Gaunt: I have a question of the Minister of the Environment. Since the Ministry of the Environment report on the PCB fire in downtown Toronto positively identified only one toxic compound, since the Ministry of the Environment believes that other toxic substances were present but couldn’t be identified because of the limitations of its own laboratory facilities, and since Dr.

Harding of the Ministry of Labour’s occupational health branch has asked for the funds for a study on the liver functions of those people most likely to have been exposed to these extreme toxic substances at the scene of the fire, has the minister, in conjunction with the Ministry of Labour’s occupational health branch, sought and attained funds from OHIP for such a study; and when will it commence?

Hon. Mr. McCague: No, not as of this point.

Mr. Gaunt: Supplementary: Is the minister pursuing the matter with the Ministry of Labour; and if so, when does he think this problem will be resolved?

Hon. Mr. McCague: I am not personally pursuing it. The staff is.

Mr. Gaunt: Supplementary: At what stage are the negotiations?

Hon. Mr. McCague: At the staff level; I will find out for the member.

Mr. Riddell: The minister better take a holiday.

Mr. Gaunt: Will the minister report back?

Hon. Mr. McCague: Certainly.

[3:00]

CITIZENSHIP PROGRAMS

Hon. Mr. Welch: I would simply ask the hon. member what information does he have that we are?

Hon. Mr. Welch: My response to that is that this government will maintain its commitment to ensure that this program is not impaired in any way. The hon. member knows that a great deal of this program is run through the community colleges of the province; and indeed as far as the involvement of the ministry itself is concerned it is to look after some of the shortfalls there. I am quite prepared to stand here and say that no one will go without support in order to maintain this program; that’s our commitment. The hon. member is now talking about particulars, I am talking about the commitment.

We will look after this program. As the hon. member knows, the estimates of this ministry will be before the standing committee on social development on March 28 and we can go into this in further detail at that time.

Mr. Martel: Will the minister look into the firing?

SMOKING AND DRINKING HAZARDS

Mr. Reid: I have a question for the Minister of Health. Has the Minister of Health any plans on publicizing the ill effects of smoking and drinking on pregnant women who are about to give birth, and the effects that those two vices will have on the birth of their child?

Hon. Mr. Timbrell: I think questions on the effect of these lifestyle problems on pregnant women are already well covered in material which is put out both by our ministry and by various private sector groups. If the member has any particular suggestions or problems in that regard, I would be pleased to consider them or refer him to the appropriate counselling authorities.

Mr. Reid: I was more concerned about the minister himself Mr. Speaker. But, unlike the Minister of Health, I don’t hang around doctors’ offices and prenatal clinics. Is there information available to women in doctors’ offices and in clinics on the effect that drinking and smoking will have on the health of their children?

Hon. Mr. Timbrell: I will be glad to send the member copies of the material that we send out or which we make available to physicians. He may have seen the small brown stands in pharmacies and doctors’ offices.

Mr. Nixon: There is one other pamphlet you should send.

Ms. Gigantes: This is not funny.

Hon. Mr. Timbrell: You don’t go to doctors?

Mr. Eakins: Send him the full kit.

Hon. Mr. Timbrell: Yes, I’ll send the member the material we have. It’s optional for the doctors to have these pamphlets in their office at all or which of them they use. I may say the pamphlet program is very successful in that last year we distributed over 800,000 pamphlets on a wide variety of subjects to schools, doctors’ offices, pharmacies and hospitals around the province.

OTTAWA PSYCHIATRIC FACILITIES

Ms. Gigantes: I have a question for the Minister of Health. It’s not a funny question; I didn’t think the last one was either. I wish he would take his responsibilities a little more seriously on this subject.

Mr. Warner: Shame.

Ms. Gigantes: I am assuming the minister is familiar with the tragic murder last week of two members of an Ottawa family, two young girls, and the charging of an alleged suspect who was a member of that family.

I would like to know if the minister is prepared to respond to the very well-placed criticisms that have been levelled at his ministry concerning the lack of adequate psychiatric facilities in the Ottawa area? These criticisms are now coming publicly from the director of psychiatric services at the Royal Ottawa Hospital.

Hon. Mr. Timbrell: Let me say, first of all, I take myself not nearly as seriously as perhaps the hon. member does. Once in a while I can look at myself and not be so stuffed up as the hon. member that I can’t see the lighter side of life.

Mr. McClellan: This is a riot.

Hon. Mr. Timbrell: As regards this, I understand there were some things in the Ottawa press late last week. We have over the last few years attempted to ensure the provision of more psychiatric services in the area. The member will know that this is one of the aspects of the review by the district health council of all facilities and programs in that area, which is of prime importance. Once we have that review in hand, within the next year or year-and-a half, we will be able to make some decisions about the provision of psychiatric services, not just in Ottawa but in all of eastern Ontario, that one wouldn’t want to make without having a complete study in hand.

Ms. Gigantes: Supplementary: I wonder if while we are holding our breath on this matter we could get some encouragement from the ministry in terms of citation of what new programs are being developed. The only result I know of currently from the review process that's been going on is a holding motion which has led to the dissolution of projects like the mental health project.

Hon. Mr. Timbrell: The hon. member will know that over the last number of years there have been developed in all parts of the province a number of community mental health programs as the process of de-emphasis on the traditional psychiatric incarceration has been accelerated.

I can only say she is quite mistaken if she sees the review of the district health council as some form, as she puts it, of “holding your breath” or trying to stall. Rather, for the first time in the development of the district health councils and in the further development of modern health care planning, we are in the region of Ottawa-Carleton coming together under the auspices of the health council and using the services of the university and a number of other agencies within government --

Ms. Gigantes: There are no facilities and no programs.

Hon. Mr. Timbrell: -- to develop a long-term plan for all aspects of health care in that region. I’m sorry the member is not supportive of that process.

Mr. Cassidy: Supplementary: Is the minister aware that it is now more than a year since recommendations have been made to the ministry about a forensic program for the Ottawa area which would include a secure psychiatric ward at the Royal Ottawa Hospital so that patients do not have to be taken to Penatanguishene, 300 miles away from Ottawa, and that this tragedy might have been averted had the action that was promised in that program during the election campaign last June been taken by the ministry rather than put forward as a kind of pre-election promise?

Hon. Mr. Timbrell: I am not aware of any pre-election or intra-election promises on the subject. Let me say on the question of secure units, as the member knows, if funds permitted we would perhaps do a lot of things we don’t do now. We have an excellent program at Penetang and one which is probably better known and better appreciated outside of Ontario than it is by members opposite.

Mr. Cassidy: You were very warm during the election period.

Mr. Martel: One of your promises was to have a hospital built in Sudbury.

Ms. Gigantes: How many people have to get killed?

Mr. Makarchuk: Is the minister aware that because of his cutbacks in mental or psychiatric hospitals, the net result has been deaths in his hospitals because of lack of staff? Is the minister prepared at this time --

Mr. Speaker: The question dealt specifically with an incident in Ottawa.

The hon. member for Brant-Oxford-Norfolk.

TOUR OF NORTH

Mr. Nixon: I have a question of the Premier. Does he recall that traditionally the government has arranged a tour of northern Ontario for the members of this House at a convenient time following each election? If so -- and I’m sure he does recall this -- will he undertake to set in train the mechanics for planning such a tour, which I personally think would be valuable for new members of the House, as well as for some old war- horses, so that we might perhaps visit the Indians in their own community, perhaps go and see the timber limits that have been under discussion -- and maybe even wet a line?

Hon. Mr. Davis: To reply to that question it’s quite obvious to me why the members of the Liberal caucus would like to visit northern Ontario because it would be, with the exception of one, their only relationship to it.

Mr. Breithaupt: Which one?

Mr. Reid: Quality, quality.

Hon. Mr. Davis: Listen, I’ve never argued the member’s quality. Never. His judgement, yes, but his quality, no.

Mr. S. Smith: North Bay gets a $10 licence.

Hon. Mr. Davis: I certainly would want the member’s leader to get to Sault Ste. Marie. It would be the first time since he said he’d never be back.

Interjections.

Mr. S. Smith: You got an excellent reception in Sault Ste. Marie.

Mr. Breithaupt: See Ontario first.

Hon. Mr. Davis: However, to get back to the question; the House leader from the Liberal Party is suggesting there be a tour of northern Ontario. I certainly think that’s worthy of exploration.

OWEN SOUND HOSPITAL TRANSFER

Hon. Mr. Timbrell: To answer the last part of the member’s question first, yes, the transfer will go ahead.

The answer to the first

part is that it will be reviewed by Management Board in cabinet within the next few days.

Mr. Charlton: A supplementary: Can the minister tell us if there is a problem with the transfer of the land; and if there is how that will affect the transfer itself?

Hon. Mr. Timbrell: As I recall there is some difficulty with regards to a sewer easement or something of that order, but nothing so major as to delay the effective date of transfer. It is something which can be worked on by the respective parties after April 1.

Mr. Charlton: One final supplementary, Mr. Speaker: Is the minister aware at all of the possibility of any layoffs in this transfer, as somebody from the administration of the General and Marine Hospital in Owen Sound has indicated that there may be some layoffs?

Hon. Mr. Timbrell: All employees of the MacKinnon Phillips Hospital have been offered employment by the Owen Sound General and Marine.

NORTH PICKERING INQUIRY

Mrs. Campbell: My question is to the Attorney General. In view of the fact that he has now released the abortive commission report on Pickering, and in view of the fact that the Ombudsman has publicly challenged the position of that report, has the Attorney General given any consideration to a reply to the Ombudsman’s position with reference thereto?

Hon. Mr. McMurtry: No.

(Laughter.)

Mrs. Campbell: A supplementary, Mr. Speaker -- I am sorry that I don’t think it is a matter for levity.

I would ask if the Attorney General is prepared to give consideration to a reply to that matter, because it seems to me it’s of great importance in the field of justice in this province?

Hon. Mr. McMurtry: It may be that the Minister of Housing (Mr. Bennett) may wish to say something at the appropriate time. It’s my own personal view that with this unfortunate North Pickering problem any decisions may very well have to await the report of the Hoillett commission, which is expected sometime in May.

[3:15]

OLIVETTI LAYOFFS

Mr. Wildman: Mr. Speaker, I have a question for the Minister of Industry and Tourism. In view of the cuts in the work force at Olivetti Canada on Don Mills Road from 180 to 55 over the past year and a half, and the fears at the plant that further layoffs may be pending, will the minister investigate to determine if these cuts at Olivetti’s Canadian plant results from dumping in Canada by Olivetti’s plants in Brazil, in Britain and elsewhere? And if he would be willing to look into this, would he also approach his federal counterpart to ensure that dumping by foreign typewriter manufacturers will not take place at the expense of Canadian jobs?

Hon. Mr. Rhodes: Mr. Speaker, certainly I will look into that. There is no question that we are not in favour of allowing offshore companies to dump into our markets. I will certainly look into that.

Mr. Wildman: Supplementary: Would the minister also inquire to determine what Olivetti’s plans are for the future of its Ontario plant to ensure that it is not intending to phase out operations completely, and would he investigate to determine whether or not the provincial government has purchased foreign-produced typewriters and other business machines?

Hon. Mr. Rhodes: Yes.

STUDENT ASSISTANCE

Mr. Sweeney: A question to the Minister of Community and Social Services, Mr. Speaker: Given that the minister’s colleague the Minister of Colleges and Universities (Mr. Parrott) is making it more difficult for university students to get money these days --

Hon. Mr. Davis: Shame.

How can you distort things like that?

Mr. Sweeney: -- I wonder if the minister would please advise me why it is necessary for the Association for Single Student Parents to indicate in their most recent newsletter that those who are on welfare will have some of their money deducted from their grant by municipalities?

Hon. Mr. Norton: Is the hon. member suggesting -- excuse me, Mr. Speaker, this is a question -- that the municipalities would take into account the student grant or loan as income?

Mr. Sweeney: My understanding is that the municipalities, through the Ministry of Community and Social Services, will deduct --

Hon. Mr. Timbrell: Question.

Mr. Sweeney: -- and this is the question, why is it necessary for them to deduct some of the grant for single-parent students?

Hon. Mr. Norton: I have not looked into that matter -- I will -- but presumably the grant or loan would be awarded to the students on the basis of their total responsibility and living expenses; and if that were the case, then presumably that portion would be income which was designed for their support and the support of their child. If they were to continue as a student, it would seem to me that it might be appropriate that the municipality consider the total income when they are assessing the need, if they are contemplating giving some assistance to the student.

Mr. Sweeney: Supplementary: Given the fact that the welfare amount is even less than the family benefits payments that come from his ministry, does the minister think this is reasonable?

Hon. Mr. Norton: The hon. member’s assumption is correct that it’s less than family benefits. I would have to comment on a specific case before I would know whether it was a reasonable decision. If the hon. member is asking, do I think there ought to be discretion? I would say yes. But if he asks me, in a specific case, do I think it’s reasonable; I would have to know more before I could respond to that.

URANIUM DRILLING

Mr. Martel: A question to the Premier: In view of the fact that Hollinger has now indicated it won’t drill Lake Wanapitei, in view of the fact that the regional municipality has dropped the legal proceedings against the firm, is the Premier now prepared to give assurance to the regional municipality of Sudbury that his government will not give permits or licences to anyone else to drill in Lake Wanapitei for uranium?

Hon. Mr. Davis: Mr. Speaker, I think that question should be properly directed to the Minister of Natural Resources.

Mr. Martel: I am sometimes afraid of the answers I get from him, because there is never anything concrete in them. With your permission, Mr. Speaker, I would like to redirect that question to the Minister of Natural Resources.

Hon. F. S. Miller: Mr. Speaker, my answers are as concrete as the questions.

I am not going to commit this government, or my ministry at least, at this time to refusing any application in the future. I only would suggest to the hon. member that we will give it very serious consideration before any decision is made.

Mr. Martel: That is the reason I put the question to the Premier in the first place. In view of the fact that his government has given the regional municipality of Sudbury, under Bill 164, the responsibility for drinking water for the region, is he prepared to change Bill 164 so that the responsibility for drinking water doesn’t rest with the region but in fact, because his government is going to play around, that it rests with the province?

Hon. F. S. Miller: That does not relate to my ministry.

Mr. Martel: No, and that is precisely why I raised the question with the Premier in the first place. You can’t have it both ways.

MINING TAX

Mr. Reid: I have a question for the Minister of Natural Resources -- which I believe is within his ministry if perhaps not his competence -- dealing with mining taxes.

Hon. F. S. Miller: If you can think of it, I can answer it.

Mr. Reid: That’s a good point.

Can the minister indicate what line he will be taking in going to Ottawa to discuss with his federal counterparts taxes within the province relating to mining, and the impact of the federal tax? And can he indicate if his committee dealing with mining tax has come up with any solution for declining resource communities, and the tax base which will be affected by that decline?

Hon. F. S. Miller: I read with interest the report of the select committee of the Legislature that was set up to look into the Inco matter. The member may recall that he suggested we look at tax measures as they relate to these municipalities and to the industry itself.

Just this last week the prospectors and developers were in Toronto, and I had an opportunity to talk to Mr. Gillespie and to five other provincial ministers. The one thing we all agreed upon is that we are, as ministers, going to meet regularly on the matter of taxation. We are going to try our best to make -- not uniform rules across Canada, because I believe with 10 provinces they are neither appropriate nor possible -- but we are going to do our best to simplify the system and to put in stimuli to encourage investment.

As far as the single-industry community is concerned -- a place like Atikokan, which I am sure is one that is near to the member’s heart at this moment --

Mr. Reid: Right.

Hon. F. S. Miller: We are very concerned. I have been in touch with officials in Atikokan within the last few days and have assured them that I am going to be talking to them and that my committee is trying to find alternatives.

Mr. Reid: May I ask, by way of supplementary; I presume that the minister and his federal counterpart and the five provincial ministers agreed that perhaps the taxation load, on the mining industry in particular, was killing any incentive for new exploration and development of mines in Canada and that this is one of the objects of the meeting?

Hon. F. S. Miller: That wasn’t the object of the meeting on Monday, but it certainly got discussed in a long panel meeting with the mining people present. In the last fiscal year, no one could possibly say that the taxes collected in Ontario for mining were a burden to the industry. What has been the problem, because there were very few profits --

Mr. Reid: That’s true, there is no incentive to open a mine even.

Hon. F. S. Miller: We collected taxes to the best of my knowledge from fewer than 15 mines in Ontario last year --

Mr. Martel: Darcy said that’s great stuff; he gave me a junior economics lecture here one day.

Hon. F. S. Miller: -- and probably less than $20 million in total.

Mr. Cassidy: You are trying to get out of this as well.

Hon. F. S. Miller: However, the issue was not that but the impact year by year, when profits went up; the relative tax rate when they went up. The changes mentioned by the Treasurer in the budget were aimed at levelling the good and the bad years in Ontario. They are going to do that to a large degree.

Mr. Reid: That doesn’t deal with the problem.

Hon. F. S. Miller: The federal government has an aspect of that.

MERCURY CONTAMINATION

Ms. Bryden: I’m very glad to see the Minister of Natural Resources is here; I have been trying to ask this question for 10 days, but either he wasn’t here or --

Mr. Kerrio: Why weren’t you here?

Hon. F. S. Miller: You can’t ask it from Florida.

Interjections.

Ms. Bryden: He hasn’t been here whenever I was able to catch the Speaker’s eye in the last 10 days.

Hon. F. S. Miller: The government stated its position clearly last May on this matter. The federal government has the power to close the river system --

Mr. S. Smith: So do you.

Hon. F. S. Miller: Certainly we have. I’ve never denied that. We have decided not to close it. If the federal government wishes to close it within its power, it may do so with our blessing.

Ms. Bryden: Will the minister agree to provide them with every assistance in enforcing a closure if they decide to close the river?

Hon. F. S. Miller: I’d have to consider that, but I would assume that would become their responsibility.

MINI-SKOOLS LIMITED

Mr. McClellan: Pursuant to standing order 27(

g) I wish to give notice that I am dissatisfied with the answer to my question of the Minister of Community and Social Services and wish to pursue it at the adjournment of debate at the next opportunity.

WRITTEN QUESTIONS

Mr. Speaker: On Friday last, the hon. member for London Centre (Mr. Peterson) raised with the Chair the question of the apparent delay in a response to his written question number 10. I note that on the same day the hon. member was provided with an interim answer in accordance with standing order 10(b). I can only advise the member that the ministry has complied with the requirement to respond within 14 days, even though the response is only an indication that more time will be required. That’s in keeping with provisional order 10(b).

OTTAWA PSYCHIATRIC FACILITIES

Ms. Gigantes: Pursuant to standing order 27(

g) I’d like to give notice that I’m not satisfied with the response of the Minister of Health to my question concerning psychiatric services in the Ottawa-Carleton area, and I’d like to raise it after adjournment of the debate tomorrow evening.

MOTIONS

TEACHERS’ SUPERANNUATION COMMISSION

Hon. Mr. Welch moved that the annual report of the Teachers’ Superannuation Commission for the year ending December 31, 1976, be referred to the standing social development committee for consideration today following the routine proceedings.

Motion agreed to.

ESTIMATES

Hon. Mr.

Welch moved that the following estimates be referred to the committees as follows: To the standing administration of justice committee -- Justice policy, Attorney General, Consumer and Commercial Relations, Correctional Services, Solicitor General; to the standing general government committee -- Office of the Assembly, Office of the Provincial Auditor, Office of the Ombudsman; to the standing resources development committee -- Resources Development policy, Agriculture and Food, Energy, Environment, Housing, Industry and Tourism, Labour, Natural Resources, Transportation and Communications; to the standing social development committee -- Social Development policy, Colleges and Universities, Community and Social Services, Culture and Recreation, Education, and Health.

Motion agreed to.

Hon. Mr. Welch: Just as a matter of information, we’ll be bringing in by way of a statement on the business of the House the agreement which has been arrived at with respect to the allocation of time for the consideration of these estimates. The estimates of the Ministry of Government Services will commence in the House in committee of supply on April 3. The estimates of the Ministry of the Environment will commence in the resources development committee on March 28 in the evening, and the estimates of the Ministry of Culture and Recreation will commence on the afternoon of March 28 in the appropriate committee.

[3:30]

INTRODUCTION OF BILLS

HEALTH INSURANCE AMENDMENT ACT

Hon. Mr. Warner moved first reading of Bill 32,

An Act to amend the Health Insurance Act, 1972.

Motion agreed to.

Mr. Warner: Mr. Speaker, this bill repeals provisions of the Health Insurance Act, 1972, that authorized the Lieutenant Governor in Council to establish the cost of premiums by regulation.

ORDER OF THE DAY

BUDGET DEBATE (CONTINUED)

Resumption of the adjourned debate on the motion that this House approves in general the budgetary policy of the government.

Mr. Peterson: Mr. Speaker --

Hon. Mr. Welch: Double-breasted suit!

Mr. Peterson: I rented this suit from the Treasurer (Mr. McKeough) for the day.

Mr. Nixon: You look like an NDP critic.

Mr. Martel: That’s an insult.

Mr. Peterson: Mr. Speaker, I am very happy to rise for our party today and to make our contribution to this budget debate. As you recall, last year I was representing the third party, now Her Majesty’s official loyal opposition. I am expecting the logical progression, Mr. Speaker, is that next year we will be presenting the budget. We will look forward to see what kind of an opposition critic the Treasurer of this province is.

An hon. member: Don’t hold your breath.

Mr. Rotenberg: Are you going to pull the plug?

Mr. Peterson: We may just pull the plug. Just keep ready all the time.

Some hon. members: We are ready.

Mr. Peterson: It has been very difficult to prepare this budget response because of the considerable number of things that I would have liked to have said which we unfortunately had to cut out. About three-quarters of the good stuff has been eradicated, Mr. Speaker, but I want you to know I am prepared on short notice to come back to this House if there is a popular request for my so doing to include the stuff I am not going to have time to talk about today. I gather my time is till 6 o’clock. There is a great round of approval from my House leader on that particular matter. He is suffering, Mr. Speaker.

He feels a bit persecuted today because his obligation is to sit here and listen to all of this stuff.

Mr. Nixon: It is what I am paid for.

Mr. Rotenberg: Can you take it, Bob?

Mr. Lewis: You could go on this evening.

Mr. Peterson: I appreciate that very much.

In analysing the budget of a province or of any jurisdiction I think one has to put it in the context of all the other major documents -- the social documents, the other planning documents of a province or of a jurisdiction. I think maybe when one analyses the discrepancy between the Throne Speech and the speeches and all of the attendant good things that were attached to the first ministers’ conference and then you see the budget, one is bound to be somewhat disappointed.

In fact one wag has said if you really want to understand the soul of a government you have to look at their budget, because that clearly outlines their priorities and how they feel about the social problems -- how they feel that financial burden should be distributed among the people and the institutions of a particular jurisdiction.

I think that as we analyse this budget we are going to see our party differing very substantially in a great number of the priorities.

I said after the budget it is not an easy thing to make up a budget today.

Mr. Laughren: Not with those Liberals in Ottawa

Mr. Peterson: We have so spent out our options, we have so little room to move without incurring massive deficits. I am going to point out in the course of this speech the tremendous constraints put on the budget of this province over the next 20 years because of our financial obligations, our obligations to pay back capital, having exhausted all of our sources of capital; it is very alarming.

I can tell you that whoever forms the government in this province in the next two or three years -- and I suspect it is going to be somebody different from those members sitting across there now -- and I really don’t, in all fairness, think it will ever be my friends on the left.

An hon. member: I don’t think so either.

Mr. Lewis: Why don’t you be unfair?

Mr. Martel: They are not biased.

An hon. member: Thirty-four seats again is hardly overwhelming.

Mr. Peterson: I can tell you that it is going to be extraordinarily difficult. If you think we have economic problems today, let me tell you they are going to be a lot more critical, because we have been exhausting our options, we’ve been using up all of our flexibility.

In the old days, perhaps it was more fun to be in government, perhaps there weren’t the great demands on government that there are today. Maybe they didn’t have to make the tough priority decisions that they have to make today. When things were running in a balanced sense, when governments could have surpluses or deficits, there was lots of flexibility, and I understand that. But I can tell you that flexibility is not there today. To that end, and to that extent only, I sympathize with the Treasurer.

Given those constraints, though, I think that the decisions he made were not only wrong but they were abjectly unfair, and I think that the people of this province are going to show that to the Treasurer.

Mr. Haggerty: He’s been wrong six times.

Mr. Peterson: Personally, I have detected, just in the last couple of weeks -- pre-budget as well as post-budget -- that people are looking at the Treasurer with a new set of glasses. Because of his demeanour, and with the assistance of his tailor and barber and the stewards at the Albany Club, he was able to project an image of confidence, but now we are seeing far more bluster. We are seeing a far less specific response to some of the very difficult questions. We are finding that he is in a bind.

If you look at question period for the last week, look at his responses to the straightforward questions asked, look at how he has changed the rules; it is my opinion that the decline of Darcy McKeough is starting to set in.

Mr. Haggerty: The duke is on his way out.

Mr. Peterson: I think that we are going to see a very different view of this gentleman held by the people of this province.

I planned, today, to talk briefly about some of our historical problems because I think they are important and relevant to the financial bind we are in today. I expect, in the process, to analyse our relative position, to talk briefly about how we compare to the other provinces in Canada, because I think it is important that we understand the trends and the kind of situations that we have developed for ourselves today.

Then I intend to discuss the present government’s solutions: how we differ, how our priorities would be different; then I would go to our constructive suggestions.

And that is going to include our specific suggestions for job creation, our specific suggestions for developing an industrial strategy in this province -- which the Treasurer mouths the need for but does absolutely nothing about -- and I intend to talk briefly about an energy strategy for this province, because we are the most energy-consumptive people in the world per capita; and as we find that we are totally vulnerable -- because we are importing some 80 per cent of that energy and the energy bill is getting into the area of 10 per cent of the gross provincial product -- it becomes an area in which we need massive new invigorated strategies with new insights, a new toughness.

We on this side of the House are prepared to provide that, and I intend to lay out some of our approaches and give our reasons why. So with any luck I will be finished by 6 o’clock; if we are not, well we will try to accelerate it.

Before I start I would like to thank many people who assisted in the preparation of all of this work. As I have said before, the research department of the Liberal Party of Ontario -- that you may or may not be familiar with, Mr. Speaker -- is just first class. They have just done a marvellous job. We have assistants with new insights, taking us into new areas; and I, for one, am very grateful to them. I am going to take the liberty of reading five of these names into the record just because they have been a great help to me.

And it will be interesting when their children read Hansard -- and they will particularly want to refer back to this debate, I am sure -- and they can see their mommies’ and daddies’ names in Hansard. They are Daphne Rutherford, Jane Shapiro, Lou D’Onofrio, Sandie Giles and Jean Shilton, who have been terrific and worked many long hours and many weekends to assist me. In addition to that we have had many outside experts who have assisted. That's one thing that gratifies me.

Mr. Laughren: Walter Gordon tried that too.

Mr. Peterson: Many outsiders -- economists, people in the labour movement, people in the investment business -- are now coming to us with positive ideas. They are trying to provide meaningful input. Today the Liberal Party of Ontario, I say with great pride, has gained under the leadership of the member for Hamilton West (Mr. S. Smith) a great deal of respect in many communities and in many constituencies in this province. We will continue to grow as we continue to attempt to represent all of those constituencies as fairly and as equitably as we can.

Mr. Samis: Finally.

Mr. Martel: I’m glad the member for Brant-Oxford-Norfolk (Mr. Nixon) is here.

An hon. member: I’m glad he got the message.

Mr. Peterson: I want to start off with a little historical view of the situation. The Premier (Mr. Davis) took over the reins of government inheriting a provincial budget of some $5.2 billion. Today the budget stands at $14.OO5 billion, an increase of some 171 per cent.

Mr. Johnson: That’s an irresponsible statement.

Mr. Peterson: Prior to the Premier’s advent, this province had the benefit of sound financial and economic management. Our economy grew steadily and we led the nation. The first Davis-McKeough budget in 1971 promised controlled public spending and delivered a 15.6 per cent or almost $1 billion increase in government expenditures. That year saw, not coincidentally, an election and a record provincial deficit of $1.28 billion.

With the characteristic inaccuracy that we have grown to expect on a yearly and even monthly basis from this government, the Treasurer underestimated his budgetary expenditures in that year by more than $1 billion in 1971 and against in 1972.

Mr. Haggerty: He’s consistent.

Mr. Peterson: Expenditures went up by 7.5 per cent or almost $450 million, increasing 50 per cent more than the spiralling cost of living.

In 1973, with a different Treasurer at the helm, the provincial budget called for increased spending to the tune of $750 million, or 11.8 per cent compared with the preceding year. Ultimately, expenditures increased by some $811 million, an increase of 12.7 per cent at a time when Ontario’s inflation rate was running at 7.6 per cent.

Inflation was still rampant in 1974. Experts agreed that control of public spending was absolutely essential. The government of Ontario responded by calling for a 14.2 per cent increase in expenditures, notwithstanding a predicted inflation rate of 7.7 per cent. Again the budget was overspent, this time by about $385 million. Increased spending rose from an estimated 14.2 per cent to an actual 20.8 per cent. Did I hear “shame” from my benches?

Mr. Nixon: Shame.

Mr. Peterson: Thank you. The 1975 budget envisaged an increase in government expenditures of 16.8 per cent, about $1.5 billion. That was the year of the “mini-budget,” which boosted the increase in government spending to 21.2 per cent. Updated to December, 1975, budgetary and non-budgetary deficit figures were $1.976 billion, within nudging distance of the dreaded $2 billion mark -- almost half of the entire provincial budgetary expenditure when the Premier took over.

Deficit financing had clearly become a way of life for the government of this, the province of opportunity, for they knew no other way. Our budgetary and non-budgetary deficit had gone from $566 million in 1970-71 to nearly $2 billion in December, 1975. The year 1976 saw net cash requirements increase by $158 million to nearly $1.4 billion, an increase of 12 per cent in government spending, the budget overspent by $55 million and a budgetary deficity of $302 million more than the estimated amount.

By this time, the bizarre fiscal policies of the Premier and his colleagues had incurred a well-nigh intolerable burden of debt for the people of Ontario. Between 1970 and 1974, the accumulated provincial net debt had more than doubled, from $1.4 billion to $2.9 billion. Within the next two years, to March, 1976, it more than doubled again to $6.2 billion.

Mr. Haggerty: It sounds like a balanced budget.

Mr. Peterson: Last March it was estimated at $7.2 billion; in fact, at the end of the fiscal year it is $7.8 billion. The projection for 1978 is $9.1 billion. Soon we will be in debt by almost twice as much as the entire provincial budget when Mr. Davis became Premier and Mr. McKeough started to get his hooks into the Treasury.

I just want to recap this because it’s meaningful in terms of the environment we’re in today. Since John Robarts’ last full year as Premier, we have witnessed the following: Budgetary expenditures have more than tripled from $4.2 billion to $12.9 billion, an average annual rate of increase of 15 per cent. The projection for 1978 is over $14 billion. From a budgetary surplus of $150 million we now have budgetary deficits totalling $6.4 billion.

The projection for 1978 adds almost another billion and a half to that deficit. The provincial net debt has more than quintupled. It has increased 450 per cent, from $1.4 billion to $7.8 billion. The projection for 1978 has the net debt rising a further 17.5 per cent to $9.1 billion. The net debt as a percentage of gross provincial product has increased by 112 per cent. With the 1978 projection, that increase will be over 120 per cent.

The net debt as a percentage of budgetary revenue has more than doubled, increasing from 31.9 per cent to 68.5 per cent. For 1978, the percentage is expected to rise to 72.1 per cent. Interest payments on the public debt rose 472 per cent from $209 million to over $1 billion. Projections fur 1978 show a further increase of 15.4 per cent, the largest increase in the budget, to a total of $1.2 billion in interest payments. That is about $3.3 million a day in interest on the debt accumulated by this government.

The net debt per capita has increased 391 per cent from $189 to $928 and is projected to rise this year to over $1,000 -- $1,077 to be exact -- an annual increase rate of 22 per cent.

These are the sad facts but they are important to setting a context for today’s budget debate, for the situation that we are in today.

What we found is the Treasurer isn’t stupid. He understands the evils of his past and now we find him trying to run against his past. We see him making or trying to make a virtue of denying his own past excesses at the public expense. When we have seen this massive growth in debt and the raiding of the pension funds in order to finance it we have seen a situation entirely created by this government, no one else. That is something that he is going to have to own up to. It is something that he is going to have to pay for in the near future. I suspect he won’t be in government to have to deal with it when the crunch comes.

Mr. Nixon: He’ll be back pushing plumbing.

Mr. Peterson: It’s important that I also discuss Ontario’s economy not in terms only of its past but in terms of its relative position in this country and indeed in this world.

The decline in Ontario’s economy in the last eight to 10 years is serious enough when viewed in isolation. In comparison with developments in other selected provinces and the Canadian national average the implications are cause for very real anxiety.

Let’s consider the compound annual rate of growth in gross provincial direct and guaranteed debt in Ontario between 1968 and 1975 -- which was 14.5 per cent. This was the third highest growth rate in the country. Moreover, the actual debt was greater in size than Quebec’s by $4.5 million; than Alberta’s by $10.8 million; and British Columbia’s by $9.1 million.

The per capita compound annual growth rate in gross provincial direct and guaranteed debt for Ontario between 1968 and 1975 was 12.5 per cent. This was the third highest growth rate in the country. In 1968, Ontario ranked behind Alberta in having the lowest debt per capita. By 1975, Ontario had dropped to fifth place.

While Ontario has the highest personal income per capita in the country at present, the compound annual growth rate in personal income, per capita, between 1968 and 1975 in Ontario was the lowest in Canada; 9.8 per cent compared to 10.4 per cent in British Columbia, 11.3 per cent in Quebec, and 12 per cent in Alberta. In these circumstances, we cannot expect that Ontario will continue to rank first for very long.

Ontario’s compound annual growth rate in provincial government gross annual revenues between 1972 and 1976 was 14.7 per cent. This was the lowest growth rate experienced by any province in the country.

The compound annual growth rate in Ontario’s gross provincial product from 1970 to 1976 was 13 per cent -- lower than the national growth rate of 13.6 per cent.

Another area in which Ontario’s performance over recent years compares very unfavourably with other provinces in the national average is in terms of housing.

With the exception of 1972, the annual percentage increase in housing starts in Ontario has lagged the national average since 1970. If Ontario starts are removed from the national total the difference in percentage increase is dramatic.

In 1975, Ontario experienced a decrease of 5.7 per cent over 1974, while nationally, excluding Ontario, there was an increase of 16.6 per cent in urban housing starts. Again, in 1976, while Ontario had an annual increase of 5.4 per cent in urban starts, nationally there was a 15.3 per cent increase. If Ontario starts are excluded, the rest of the country experienced a percentage increase of 21.2 per cent.

These are a lot of numbers and in some ways I apologize for putting these in the record today, but I think it is very important that --

Mr. Nixon: Don’t apologize.

Mr. Peterson: -- we set the stage properly.

Mr. Nixon: It is a serious indictment of inadequate policy over many years.

Mr. Peterson: While urban starts in 1977 finally improved over the national average increase, the number of starts has declined. With the exception of 1975, the total is the lowest since 1970. Urban starts declined by one and one half per cent over 1976. While all starts came in close to, but under, the projected level of 80,000 starts for 1977, they were targeted by the government at a level almost six per cent lower than 1976; so reaching this goal cannot be considered a great achievement.

The data for January of this year is not promising, especially in multiple dwelling starts where an increase of 25 per cent for Ontario in January of this year over January 1977 was matched by a national increase of 57 per cent. Ontario’s increase is less than half the federal. If Ontario starts are excluded from the national increase, the latter increase would have been more than 73 per cent over the period last year. This is of particular concern, given apartment vacancy rates for selected Ontario cities in October 1977 as follows: London 1.6 per cent, Ottawa 1.2 per cent, Sudbury one per cent, Thunder Bay 0.2 per cent, Toronto 0.2 per cent and Windsor one per cent.

That’s just too low and has tremendous distorting effects on the local housing markets.

In almost every case these figures represent a decline in the apartment vacancy rate from October 1976. The national figure, which represents the average for 24 centres across Canada, rose from 1.3 per cent in October 1976 to 2.2 per cent in October 1977, coming slowly closer to the three to four per cent apartment vacancy rate which federal housing experts maintain is healthy -- conducive to fair rents and the construction of more buildings. Ontario is making no progress towards that healthy target.

The government is forecasting 80,000 housing starts for Ontario in 1978. This represents no increase over the 1977 level. This is also a far cry from the 100,000 starts which the government-commissioned Comny report four years ago said would be necessary annually for a decade to avert a housing crisis. Indeed in each of the intervening years we have fallen so far short of that level that it would take a monumental effort, far beyond anything we have come to be able to expect from this government, to rectify the situation and to provide the number of starts required.

The target for 1978 will certainly not help in this regard. We will not even fulfil the famous Brampton charter which forecast 90,000 housing starts per year for a decade. The low levels of housing starts are due to a high inventory level of newly-completed homes. Clearly what Ontario continues to need is not housing but affordable housing.

Ontario has lagged substantially behind the national percentage increase in retail sales in 1973, 1974 and 1976; and while this province finally slipped by the national increase in 1977, it was attained by a lower annual percentage increase than was achieved in 1976. In 1976 and 1977 Ontario failed to reach the percentage increases predicted by the government. An increase of 12.3 per cent was forecast for 1977, but only 8.4 per cent was achieved, a shortfall of $1.1 billion in retail sales. The 8.4 per cent achieved is certainly a far cry from the Treasurer’s prediction of 10 per cent for 1977.

From 1970 to 1977, capital expenditures for the nation as a whole increased by 161 per cent. Ontario experienced an increase of only 110 per cent, lagging behind the other growth provinces during this period. Alberta had an increase of 298 per cent, Quebec 215 per cent, British Columbia 132 per cent. If the Ontario figures are excluded from the national total the increase for Canada was 194 per cent from 1970 to 1977, compared with 110 per cent for Ontario. The gap in expectations for 1977 between Ontario and the national average widened over the course of the year.

From 1970 to 1977 capital expenditures for machinery and equipment showed the same trend, rising by 159 per cent for Canada and only 116 per cent for Ontario. Again, the other growth provinces fared better; Alberta 370 per cent, Quebec 190 per cent and British Columbia 125 per cent. When the Ontario figures are excluded from the national total the increase for Canada was 191 per cent compared to 116 per cent for Ontario. Again, the gap in expectations for capital expenditures between Ontario and the national figure grew over the course of the year.

The lagging trend for Ontario shows no signs of changing. Specifically, the annual average percentage increase in capital expenditures in 1976 was 7.6 per cent for Ontario and 12.1 per cent for the nation as a whole. In the entire country, only Newfoundland experienced a lower yearly percentage increase in 1976, at 5.2 per cent; while Alberta saw an increase of 27.6 per cent, uebec 10.7 per cent and British Columbia 10.2 per cent. For 1977 the increase for Ontario at six per cent was well below the national increase of 11 per cent.

Ontario’s share of the country’s planned capital spending in 1977 works out to 31 per cent, down from 39 per cent in 1970. This will mark the fifth year in a row that Ontario’s advance in capital spending has lagged behind the national average.

The situation may, however, improve slightly for Ontario in 1978. Predictions by the Conference Board in Canada rate Ontario as number three nationally in production growth and increased retail sales, number three in real provincial growth, and second in gains in employment and personal income.

As a Toronto Star economic columnist stated -- and I really don’t want to read a lot of editorial comment; I know that the Premier was very worried about that, because almost every editorialist in this country has castigated this government in the last week, but I just want to quote the Toronto Star economic columnist. He says this about Ontario:

“It’s not bad for a has-been,” and he commented: “One factor, obviously, is that the province has done so badly in the recent past that it has plenty of room to improve. Ontario may be over the worst of its painful adjustment to the fact that it is no longer number one in just about everything.”

Indeed, a survey conducted by the Toronto Star last month found that a growing number of politicians and economists believe that Ontario is in an economic decline from which it may never recover its once envied position. Not one of the experts interviewed held out hope for an upturn in Ontario’s fortunes this year.

Arthur Donner, a respected Toronto economist, expressed the view that rather than holding our own, “we’re slipping both ways; in Canada and in the rest of the world.” Whether 1978 proves to be a year in which this province improves slightly over its dismal performance of the last six to eight years, or whether we decline even further in major indicators of economic growth, the fact remains that our situation is critical.

This government has allowed our provincial economy to drift, providing no leadership, no direction for recovery or growth.

The survey conducted by TV Ontario is clear proof that the people of this province lack confidence in the economic future of Ontario. And this attitude, of course, affects investment intentions which are so important to any turnaround in the economic climate.

We do not have to take a defeatist stance, we do not have to take a hands-off stance -- the one taken by the government which believes the solutions lie with the federal government.

Ontario possesses the resources, both human and financial, to become a leader again. We must have economic leadership. We must chart a course to prosperity by building a manufacturing base and by putting our skilled and motivated labour force to work. It is tragic that the Ontario economy has been allowed to deteriorate to its current state when the decline, in large part, was avoidable.

Government, along with the private sector, should have planned and must plan together for the future. Unfortunately, the government’s economic performance in 1977 hardly represents a step in the right direction.

I just want to point out a discrepancy that bothers me. I think that the Treasurer understands these trends because he’s faced with them daily. Indeed, when he went to Ottawa and presented his paper reassessing the scope for fiscal policy in Canada, he presented this statement as one of his major conclusions. Of course, the Treasurer and the Premier came away from that conference very smugly. The people felt they were looking to the Premier and the Treasurer for leadership because he said this:

“The composition of unemployment in Ontario and the rest of Canada merits more attention. Skilled, permanent jobs for youth is highlighted as the pre-eminent challenge to governments in the immediate future. Required are fundamental structural changes in the economy to enhance competitiveness, to increase exports and generate well-paying jobs in the private sector.” When it came to his budget some months later, there isn’t one reference to this. He denies, in almost everything that he says there, having made that kind of a statement.

That statement summarizes what we believe has to be done for the economy of this province. We have, and I will be laying out this afternoon, constructive, positive ways to reach this goal -- a goal that the government has stated but from whom it has completely backed off. I for one am disappointed -- not only disappointed but struck, very frankly, by the hypocrisy between those two documents.

I think it’s important that we run down some of the past budgeting of this province to understand how deeply in error they have been on so many occasions and how any objective observer, looking at their past record, is going to not face the numbers with a great deal of credibility.

[4:00]

At the time of the 1977 budget, revenues were estimated at $12,621 million with expenditures at $13,698 million. Net cash requirements were quoted as $1,077 million. The publication Ontario Finances, issued by the Treasurer’s ministry on June 30, gave revenues as $12,529 million, expenditures as $13,606 million. It’s interesting to note the immediate post-election drop of $92 million in revenue. Possibly even more interesting is the fact that, as soon as it became necessary, the government was able to reduce expenditures by the required amount. In one stroke of his magic wand he cut out that amount of expenditure to arrive at this revised revenue figures.

What I am going through now is a litany of the number of budgets we have had in the last year. We have had six or seven budgets, each time the figures being revised in major proportions.

Let’s not forget either that much of the loss of revenue resulted from delay in implementing tax measures -- a delay caused by the government’s determination to have an election no matter what the cost to the people of Ontario. Nor should we overlook that fact that while the Treasurer maintained that performance of the economy was weaker than had been expected, the only so-called authority who was really surprised -- or pretended to be -- was the Treasurer, whose pre-election optimism or, for want of a better word, pseudo-optimism had led him astray.

By mid-September, the Treasurer was once again forced to undertake far-reaching “refinements” of his financial statements because of his irresponsibly optimistic predictions last spring. He admitted that his revenue projections had been inaccurate; revenues were now stated to be lower by some $309 million. The implications were particularly serious, given that we were at that time only five months into the fiscal year.

As of June 30, 1977, the Treasurer’s net cash requirements had been the same as his budget estimate. On September 16, he admitted that these would be another $217 million more than this figure. In other words, within two and a half months he had estimated an increase of some 20 per cent.

Two weeks later, on September 30, the Treasurer reported a further drop in revenues of $158 million, or $467 million less than the budget estimate. Once more, a sluggish economy was blamed, together with a downward re-estimate by the federal government of Ontario’s 1977 personal income tax by some $350 million. However, even given this federal re-estimation, Ontario’s revenues were off $117 million in five months -- not even halfway through the fiscal year. By this time, net cash requirements were up $375 million or 35 per cent since the budget estimate.

The December 31 issue of Ontario Finances offered us yet another revision of the budget plan and, as the publication noted, “one significant change -- the need for an additional $103-million contribution to the Teachers’ Superannuation Fund.” This figure is actually $107 million. Even more noteworthy is the fact that this was the second time in 1977 that the government was forced to admit that it owed the fund over $100 million more than it had thought. It was also the second time in 1977 that the government was able to accommodate an additional expenditure increase or loss by cuts in other spending areas.

In June, $134 million was found through “a reordering, of priorities and implementation of spending cuts.” In December, another $103 million was found.

If reductions in expenditures are that simple to achieve, surely a tough and disciplined budgeting process could bring about far greater reductions in the initial budget allocations. For if the Treasurer can continue to make this kind of adjustment to compensate for loss of revenue, then obviously there is considerable fat in the provincial budget. This is not a time when we can afford to tolerate such loose budgetary procedures. If this government sincerely believes in restraint, let’s see a budget so tight that it cannot be pared down.

I want to get back to the figures for a minute. Revenue in December had dropped off yet another $162 million and fell another $5 million by the time the 1978 budget was introduced -- a total decrease of $634 million in revenue over the year. Net cash requirements have now risen by $539 million or 50 per cent since the last year’s budget estimates. The budgetary deficit rose to more than $1.6 billion from the predicted $992 million, rather than decreasing by some $287 million over the year as anticipated.

Again the Treasurer blames his new revenue loss on a downward adjustment by the federal government of its personal income tax payments to the province. I would like to take a few minutes to consider this matter and to relate to this House a very important exchange that took place between the Treasurer and myself and his executive director of fiscal policy during the consideration of the ministry’s estimates.

My colleague the member for Brant-Oxford-Norfolk, now the famous House leader, and I were asking about the reliability of the forecasts the federal government provides to us as to the amount Ontario receives in personal income tax payments. Mr. Allan, the executive director, stated: “We run an independent capacity, just for our own interest” and “We’ve had a pre-warning since 1970 that they’re” -- and I’m referring to the federal government -- “all screwed up basically.” The Treasurer later corroborated this view by saying: “They have continually underestimated the effects of indexing and it’s caught up with them.”

I then asked Mr. Allan if the fiscal policy division did its own independent forecast on these figures, and he replied: “We always do. We run computer programs on the income tax tapes.” To this the Treasurer added, “Obviously, in creating our own picture -- a snapshot of what we think the economy is -- we estimate a whole lot of things on our own and we take a look at the income tax.” Later he said: “We do our own forecasting of the economy, what the personal income tax or the retail sales tax, or any one of the other things may turn up.”

Two very important points flow from this exchange. First, on the day before this discussion, on October 18, 1977, I asked the Treasurer the following question in the House: “Does the ministry do independent forecasting, its own forecasting, about the provincial take on income tax as well as mining tax?” To this the Treasurer replied: “We do our own forecasting of mining tax. We do not do a forecast on the income tax.” Those were two entirely different answers in two days.

I would suggest that the Treasurer was not being honest with this House in his answer to me, and that it was only after his official inadvertently gave me the facts that the Treasurer told the estimates committee the truth. How can we be expected to have faith and confidence in the Treasurer if we can not trust his statements in this House?

I believe, and I told the Treasurer this at the time, that he has an obligation to make an apology to this House and to myself for the deliberately incorrect answer that he gave me at that time.

Mr. S. Smith: Hear, hear; half a billion dollars.

Mr. Peterson: The second point arising from this exchange concerns Mr. Allan’s assertion that the federal government is “all screwed up” in its predictions, and has been told so since 1970. I later asked Mr. Allan if he told the Treasurer there was a risk in putting that particular budget number, the income tax revenue based on federal figures, in his budget. He replied: “I suggested that we couldn’t believe that the income growth could be nearly as high as that being projected by the federal government”; and the Treasurer added: “What he is saying is that he was pessimistic that the incomes would generate that amount of taxes.”

If the Treasurer and his senior advisers have so little faith in the federal government figures, how can they in good conscience base their annual budget revenue forecasts on them? Since they have doubts and since they do their own calculations, why does the Treasurer not act responsibly and at least give us the numbers he thinks are correct and the revenues he believes will be generated, based on these figures?

What is the point of doing an expensive provincial forecast, which he believes is correct and which has apparently proved reliable over the last several years, and then ignoring it and calculating budgetary revenues on the basis of figures he does not believe are correct and have not been very reliable in the recent past? As I said, the very least the Treasurer can do is to inform us of the discrepancy and say what, in his opinion, we can in fact expect the revenues to be.

It is amazing to me, given this record, this blatant discrepancy in just a two-day period, how any sophisticated observer of the budgeting process in this province can have very much faith in the figures. The record, frankly, doesn’t warrant very much faith. I think the Treasurer’s credibility is increasingly going to be an issue in this House and in this province.

I want to discuss an area of very great concern to me. I have spent a lot of time looking at this and a lot of time studying it. It is the distortion on the capital markets by the access this government has had to public service pension fund money. It’s a difficult area, it is complicated and most people won’t understand it. It may not be an area of broad public concern, but we have to make it an area of public concern, because it shows very clearly how we have sold out our future options and how we have really reduced our flexibility.

Starting in the years 1982 to 1985, when we have to go back to massive return payments of capital for the amounts we have borrowed in the past six or seven years, we are going to have a much worse time than we have today.

The province currently owes our pension funds about $12 billion dollars, made up as follows: Canada Pension Plan, about $7 billion; teachers’ superannuation, $2.5 billion; OMERS, $1.2 billion; public service superannuation fund, $1.1 billion. These totals increase every year, as do the interest payments. Over the decade to March 1, 1977, interest was over $2 billion for CPP, over $600 million for teachers’ superannuation, and almost $300 million for OMERS. This year the interest on our public debt soared to $1.2 billion.

The province has appropriated this large pool of capital funds, which has earned a lower rate of return than it would have, had it been invested in the Canadian capital market. Each year the Treasurer has spent an amount equal to revenue plus the amount available for borrowing from internal pension funds. I would suggest that this is not good fiscal management.

Last year the Ontario Economic Council endorsed our view that the Treasurer has no incentive to balance the budget any closer than the level of provincial expenditures plus the amount available for borrowing from the pension funds. The council’s report singled out as the most important development affecting Ontario’s finances in the next decade the dramatic reduction in the future availability of non-public funds, strongly suggesting government financing will be complicated in the 1980s by a decline in net financing from these sources.

Deceleration of growth of CPP funds has raised many questions on alternative financing methods, the most obvious being a contribution rate increase. Even this would only postpone, not eliminate, the day when the province could no longer rely on the CPP as a net source of new finance.

The council warned that provincial governments might respond to an increase in available funds by increasing provincial expenditures. That has been the story in the past. It’s been an availability-fed demand -- anything that’s available, they spend. This distortion in recent budgeting is probably the most critical we’ve faced in the history of this province.

This year, in a study on business investment in the province, the council stated that: “As the level of investment gradually accelerates, led by energy and resource developments, the need will arise to redirect a larger percentage of domestic saving from the government to the private sector and from short-term investment instruments to long-term investments more suitable for financing long-term capital investments.

“An increased flow of private savings from the public to the private sector could be encouraged in several ways. The largest flow to the government sector occurs through the medium of the Canada Pension Plan. Consideration should be given to depositing at least a portion of the net contributions in a special trusteed fund in each province to be available to the private sector on a competitive bid basis. To ensure the maximum availability of such funds to finance business capital investment it might be desirable to limit the use of such funds to equities or debt with a term of 100 years or longer.”

Business capital expendure dollars have always been high-powered. They create additional employment income and output demand in other sectors of the economy. Yet available funds for business investment may become more and more scarce in the future because of the growing burden of providing adequate pension benefits.

Not only will government savings in the period ahead be biased downward by a decelerating rate of net savings from government-operated pension funds, but there will also be a downward bias in corporate savings arising from the accelerating costs of funding corporate pension plans and the large outstanding liability represented by the unfunded portion of these plans. That is a great worry, Mr. Speaker.

Thus the picture emerges. Vast amounts of government-operated pension fund dollars must be redirected to the open market to stimulate the efficient growth of our business sector. Also, there is a danger that available pension funds will become scarce in the years ahead, due to the trend toward indexing benefits in line with inflation -- in itself reason enough to emphasize placing those funds on the open market.

The trend toward indexing increased pension funds benefits in line with inflation has forced Canadian pension funds to take measures to ensure that they are maximizing the rate of return on total fund investments. An increase of even one per cent in the fund’s rate of return can greatly increase the value of the fund and its ability to meet future payments, according to the estimates of investment measurement analysts.

With the exception of a portion of OMERS funds, government-operated pension funds have been invested in non-marketable province of Ontario debentures at preferential interest rates. The public service superannuation fund in Ontario doesn’t even go that far. It is deposited with the province’s consolidated revenue fund and the net increase in the value of the fund at year end is given interest at the current long-term, 25-year bond rate issued by or guaranteed by the province. On March 31, 1977, the overall blended interest rate on all funds in the PSS account stood at 7.94388 per cent. The balance of the fund at that time was about $1.1 billion.

A joint study group looking into the investment policies of OMERS concluded that the funds should be invested in a broader range of Canadian securities to obtain a higher rate of return. We have endorsed this position, and, in fact, urged the government to follow this course a year ago. We are pleased to see that the Treasurer has seen fit to follow this course, even if it is in an extraordinarily moderate way.

[4:15]

It’s just unfortunate that he delayed so long in deciding that these pension funds should be allowed to assist in the capital financial expansion projects of Canadian companies. If the funds had been available 10 years ago, we might have seen a more prosperous provincial economy. We would have seen less unemployment. We would have seen more real income. S