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January 29, 1987

33rd Parliament, 2nd Session

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Hansard Transcripts

L095 - Thu 29 Jan 1987 / Jeu 29 jan 1987

ORDERS OF THE DAY

PRIVATE MEMBERS' PUBLIC BUSINESS

AUTO PACT

DAY CARE

AUTO PACT

DAY CARE

DAY CARE

AFTERNOON SITTING

MEMBERS' STATEMENTS

NATIVE FISHING AGREEMENT

NORTHERN REGIONAL TREATMENT CENTRE

FESTIVE HOLIDAYS

CREDIT CARDS

AUTOMOBILE INSURANCE

NURSING HOME BEDS

WINTER CARNIVAL

MEMBER'S ANNIVERSARY

PAPER MILL

STATEMENTS BY THE MINISTRY

THERAPEUTIC ABORTION SERVICES

HOUSING FOR THE DISABLED

INTERNATIONAL BANKING CENTRES

RESPONSES

THERAPEUTIC ABORTION SERVICES

INTERNATIONAL BANKING CENTRES

HOUSING FOR THE DISABLED

THERAPEUTIC ABORTION SERVICES

HOUSING FOR THE DISABLED

INTERNATIONAL BANKING CENTRES

ORAL QUESTIONS

COUNTERVAILING TARIFFS

TECHNOLOGY FUND

FREE TRADE

PAPER MILL

COUNTERVAILING TARIFFS

THERAPEUTIC ABORTION SERVICES

LOTTERIES

PAPER MILL

TECHNOLOGY FUND

GASOLINE TAX

PLANT SHUTDOWN

COMMUNITY ARENAS

MINISTER'S TRIP

ENVIRONMENTAL ASSESSMENT

DETROIT INCINERATOR

COUNTERVAILING TARIFFS

AFFORDABLE HOUSING

RECREATIONAL COMPLEX

PETITIONS

DIALYSIS UNIT

SERVICES FOR CHILDREN

ICE FISHING

MOTIONS

COMMITTEE SUBSTITUTIONS

COMMITTEE SITTINGS

INTRODUCTION OF BILL

CROWN WITNESS PROTECTION ACT

ORDERS OF THE DAY

INTERNATIONAL BANKING CENTRES

BUSINESS OF THE HOUSE

The House met at 10 a.m.

Prayers.

ORDERS OF THE DAY

PRIVATE MEMBERS' PUBLIC BUSINESS

AUTO PACT

Mr. Grossman moved resolution 41:

Mr. Speaker: The honourable member has up to 20 minutes for his presentation and he may reserve any portion of that for the windup.

Hon. Mr. Conway: Be careful, Larry. I think there is a foreign object over there.

Mr. Grossman: No; they are all in Washington.

We have an opportunity this morning to show a degree of dedication and commitment in this assembly and also to show that commitment with a degree of restraint and diplomacy, given that these issues require all those skills to ensure the best interests of Canadians and Ontarians are served.

The issue before us is of vital importance. The Premier (Mr. Peterson), just resuming from Washington, can confirm there is no doubt that protectionist sentiments in the United States represent a genuine and major threat to many of our sectors, including the auto sector. Our trading arrangements right across the board are under scrutiny in the US. I thought it was interesting yesterday to listen to the Premier reflect upon the reality that the Americans are contemplating action, even in those sectors where the Americans acknowledge we are not doing anything that is unfair or we are not unduly subsidizing our goods. That sends an important message out.

I hope this morning we might use this opportunity to obtain unanimous agreement to the resolution before this House and thus send a message, both a symbolic one and a substantive one, because I believe both are essential at this time. I hope too that the next 50 minutes or so might be used in a constructive way to ensure that what we are all about in this House is protecting the automotive sector, not turning this into a domestic Ontario political football. Nothing would go further to cause the Americans to give that termination notice than a game of political football instigated here in Ontario over the auto pact and posturing over the auto pact.

Instead, what this province and its auto workers need today is a genuine coming together of all its legislators, national and provincial, of all three political parties, with one solid, clear voice. That is a voice that says the auto pact should not be renegotiated. We all stand as one on those issues.

We should send a message to the other provinces that Ontario is not selfishly protecting only its own position but rather is seeking to build with them a common front or a common position. That message is important because, and again I refer to the Premier's trip to Washington, it is clear that US protectionism is not being targeted at Ontario. The softwood lumber tariff was targeted mainly at another province, but Ontario was caught in on that. We will comment on that at another time.

The reality is that US protectionism is being pointed towards any Canadian industry, regardless of province, from softwood to steel and maybe to autos. In each different situation, the economic base of yet another province may be threatened. Ontario's position on the auto pact is surely not our province versus anyone else's but rather Ontario within the rest of Canada.

Apart from the symbolic message that we might send out this morning in a sense that I hope is nonpartisan, apart from the symbolic message that says we all stand together, politics notwithstanding, I hope we also send a message that we all stand together, province notwithstanding. Also, apart from that symbolic message, I hope this resolution has an important substantive content.

The fact is that over and above the ongoing trade negotiations, auto trade between Canada and the US is coming under severe scrutiny in some US circles. I emphasize this for members of the House and the public because it is a very key point. Whether or not there were freer trade discussions going on in Ottawa and Washington, scrutiny would be given to the auto pact in the US. It has nothing whatever to do with the freer trade talks. The freer trade talks give a logical platform for those who want to put it forward, but the essential point is that the trading arrangements would be under scrutiny no matter what discussions were under way.

For example, the state of Michigan has a case before the US Trade Representative urging the application of countervailing duties on certain imports in this sector in Canada. Influential members of the Senate, both Republicans and Democrats, are known to press for exactly this kind of protectionist action. Senator Danforth, a Republican from Missouri -- my friends might be surprised to realize that Missouri is now the second largest auto manufacturing state in the US -- could well be joined by Senator Riegle, a Democrat from Michigan, in promoting these countervail provisions.

In substantive terms, we must address these concerns which are obviously being looked at by the elected representatives from the two largest auto manufacturing states.

The resolution before the House makes two main points. First, it states that in the opinion of this House, the federal government should make every effort to ensure that the existing provisions of the auto pact, as they affect North American producers, remain in effect. Second, it calls upon the governments of Canada and the US to begin working on a set of mutually acceptable rules that apply to third country manufacturers who produce and sell their cars in Canada and the US.

It is one thing to express general support for the auto pact, as we all do in and outside this House; it is another to recognize the real issues and threats and take the appropriate action to avert a potential problem.

It is my strong view that much of the overt US pressure for countervail could be eliminated if the main cause for such demand, namely, the uncertain status of third-country auto manufacturers, could be dealt with. This is the reason I propose that some way be found to bring these third-country auto manufacturers under the provisions of the auto pact.

In a sense, the contested status of third-country manufacturers, whose share of production and sales is rapidly rising in both countries, is the major substantive issue underlying the current concerns about the auto pact. Surely, by developing some mutually agreed upon rules for this segment, we could complete the unfinished business of the auto pact.

All aspects of bilateral trade arrangements between the Americans and ourselves are obviously becoming subject to increasing protectionist sentiment. Protection or maintenance of the auto pact in this environment -- perhaps "protection" is not the right word -- must be taken seriously.

Let us pause to look at what has happened. Canada now has a large surplus under the auto pact, but that has not historically been the case. It has rarely been the case during the term of the auto pact that Canada has had a surplus; it has been the exception by far, not the rule.

The historic US surplus and the historic Canadian deficit under the pact have been reversed and several other factors have come into play. First, it has been reversed because it has become far more cost effective and cost-efficient to produce cars in Canada. Our lower dollar, wage rates and other factors have simply made it more profitable to produce cars here, and our people should be proud of that.

Second is Japanese investment. With only 10 per cent of the North American auto market, Canada now has 30 per cent of all new Japanese auto investment in North America, much of it with government assistance.

Third, all that Japanese investment has largely been left free of the constraints of the auto pact, unlike the American companies. In reviewing this, we cannot further ignore that formerly we had a more united auto workers' union fighting together to protect jobs, regardless of the border, on both sides of that border. Of course, that unity now has been somewhat fractured by the division in the union and the separating off of the Canadian auto workers.

Finally, General Motors has closed 11 plants now in the US, and American employment is down dramatically, although, happily, Canada has not seen any closures and auto employment is up.

Against this backdrop, the manner in which we defend our position is extremely important. It calls for extreme diplomacy and skill on the part of Canadian politicians. I urge the members of the House that our current Canadian surplus, our jobs, our new Japanese investments must not be waved as red flags in front of 10,000 newly unemployed American auto workers or their congressmen.

As we begin this debate this morning, I urge the members of this House, including members of the cabinet and the leader of the government, not to forget this, as they have recently when talking about the auto pact. I urge this upon them. Careless statements on anyone's

part could easily drive embarrassed politicians and their unemployed constituents south of the border, the unions and the suppliers south of the border, into taking action, however symbolic, to terminate the pact.

As I said earlier, the history of the pact has produced far more deficits for Canada than for the Americans but, throughout, we have believed that in the long term we benefited on both sides of the border. We could not panic in earlier years. Canada did not seek to terminate the pact. Its constancy and predictability helped our joint industries to grow, survive and thrive. Now, when the situation has been reversed, Americans should be equally encouraged to show constancy in these years when they have the deficit that we showed in the years when we carried the deficit.

I believe, if the flames are not fanned by political rhetoric and are not fanned by sabre rattling on our side of the border, the Americans will continue to recognize the mutual benefits of the pact. I believe what we need to do now as Canadian and Ontario legislators here this morning is to say, I hope unanimously, that pacts, if they are to mean anything, must hold throughout the swings of balance for the long-term benefit of both parties.

The resolution before this House will send that precise message and will recognize the need to deal with the very contentious problems before us and between us. I urge, therefore, the unanimous support of this resolution, to send a moderate, thoughtful, nonpartisan message of constancy, predictability and common sense to our American friends and neighbours in what has been a very successful pact.

The Deputy Speaker: Does the member wish to reserve his seven minutes for reply?

Mr. Grossman: Yes.

Mr. D. S. Cooke: It is a pleasure to join in this debate. We used to have a lot more discussion in the Legislature a few years ago on the auto industry than we have had in recent years. Coming, as I do, from a community such as Windsor, it is safe to say that nothing has caused more anxiety in our community than the recent discussions and publications of what the plans may or may not be at the free trade bargaining table with respect to the auto pact and the auto industry.

It is not so many years ago that we were in the midst of a very serious depression in the auto industry. Since that time Windsor, Oshawa, Oakville and other auto-based communities have not fully recovered. There has never been a full recovery from that auto depression. Chrysler Corp. and other companies are working at full capacity now, but members of the Legislature may not be aware that Chrysler used to have 14,000 employees and now, after the recession and the remodelling of some of its plants and the large amount of mechanization and automation, we are talking 9,000 jobs, a decrease of more than one third of their employment as a result of automation.

There are people who are still very much hurting as a result of the restructuring of the auto industry.

One reads in the paper that Mr. Reisman, on the one hand, says the auto pact will not be on the bargaining table and that Mr. Murphy, on the other hand, says the auto pact will be on the negotiating table. Then Mr.

Mulroney, the Prime Minister, says, "The auto industry may be on the bargaining table, but if it is on the bargaining table, we will accept only changes to the auto pact that will improve the auto pact." We cannot accept that, because the reality is that anybody in his right mind understands the Americans are not going to allow amendments to the auto pact that will further increase the current surplus in trade which exists between the two countries. That is just not in the realm of possibilities in the current circumstances in US-Canadian trade.

The only possible alternative is to say clearly that Canada has no intention of renegotiating the auto pact, of having the auto industry on the bargaining table, and that it has a totally different approach to trade discussions, such as has been put forward by both my leader in the provincial Legislature and my leader in the House of Commons, Mr. Broadbent.

The Americans and Canadians should have a better understanding of some of the inequities that exist in the United States and Canadian auto industries. It is not all a matter of trade, the final figures and what is counted under the auto pact that Americans and our Prime Minister should be aware of. The reality is that inequities exist, and those inequities are primarily suffered not by Americans but by Canadians.

If one looks at the dependence we in this country have on assembly as opposed to production of parts, one knows that assembly of cars has much less in terms of value added than does the actual production of parts. If one wants to look at research and development, the auto industry does virtually no research and development in Canada, then that alone in the early 1980s was worth $250 million that the Big Three were charged by their parent corporations, and that money was transferred to the American head offices for research and development.

That $250 million does not show up in the auto pact figures, because it is not part of the auto pact. None of the management jobs is counted under the auto pact, and the vast majority of those jobs are at the head offices in the United States. That does not show up in the balance figures under the auto pact because it is not counted by the auto pact.

If one wants to take a look at the number of skilled trade jobs in Canada as a percentage of the total jobs in the auto industry compared with the number of skilled trade jobs in the auto industry in the United States, one will see again that there is a great imbalance, that the Americans have a much higher percentage of skilled trade workers, again because of our dependence on assembly rather than on some of the highly skilled jobs that exist in the auto parts industry.

Our auto parts industry has been allowed to deteriorate over the years, and it has primarily deteriorated because the Big Three have never purchased in Canada the amount of auto parts to put into their automobiles as they have in the United States.

At some point, the provincial government has to get its act together. I do not think a clear statement at all has been coming from this government, from the Premier or the Minister of Industry, Trade and Technology (Mr. O'Neil) on what the government's position is, not only with regard to the auto industry and the auto pact as it comes under the free trade discussions but also with regard to the overall package of the free trade discussions.

If anyone had an idea of where the Ontario government stood. he was absolutely and totally confused as a result of the Premier's discussions and answers to questions from my leader in yesterday's question period. I do not think it is fair that the employees of the major industry in this province should be put through the anxieties they are being put through by the federal Conservative government. Those anxieties have been increased by the lack of a defence of the auto industry by the Premier.

The fact that this resolution has had to come from the opposition rather than from the government itself is an indication of a lack of leadership by the provincial government to protect the main industry that this province is dependent on and that many communities are absolutely and totally dependent on.

We are talking about whether the surplus that currently exists under the auto pact is a result of current circumstances in the auto industry or of structural inequities that exist in the auto industry as it relates to both countries. I think it is clear it is not a matter of the structural problems in the auto industry, because the only country that has severe structural problems in the auto industry is our country. It is a result of several factors. It just so happens that some of the vehicles we are now producing in Ontario are very popular vehicles.

Whether it is the van wagon at Chrysler in my home community or some of the other automobiles being produced, these have turned out to be very popular, have sold well and have created surpluses.

Also, the Canadian dollar, as mentioned by the Leader of the Opposition (Mr. Grossman), has meant that our production is very much cheaper or more efficient than American or Japanese production. One of the other factors that makes it less expensive to produce in Ontario than it does in the United States is our health insurance plan, which accounts for a sizeable amount of money on an hourly basis in the United States as opposed to the cost for the manufacturers here.

In the last few minutes before my time expires, I want to point out a couple of things I think this government could and should do. It is time we had a Premier who was willing to defend the major industry to the same extent that Premiers such as those of Alberta and Newfoundland defend their major industries. We have never had that.

Frankly, the Leader of the Opposition should understand that the only time we got any resolution from a government, an all-party resolution, was about a year and a half ago. Right after the 1981 election, I proposed to Premier Davis that this Legislature should put forward an all-party resolution demanding that the report of the federal auto task force chaired by Mr. White and Mr. Lavelle be implemented at the federal level. Mr. Davis's reaction was that it need not be done. It was eventually done, about four years too late, but only after the Conservatives were in opposition. At that time, the government was so arrogant it would not even agree to an all-party resolution.

We should be pushing for an auto industry plan, which is certainly the basis of the White-Lavelle report. That kind of plan is still as relevant today as it was when it was produced and published. We have been put in the awkward position of simply having to defend the status quo instead of trying to build on the basic industry we have.

I have other recommendations, but my time has expired. I appreciate the resolution being put forward, and this caucus will be supporting it.

Mr. Ferraro: We have before us a resolution that seeks to obtain unanimous agreement, which I see forthcoming, from all members of this House on the importance of the automotive industry to this province and to Canada and of the importance of maintaining the auto pact in its present form.

Initially, I was concerned about what specific approach the Leader of the Opposition was going to take. I am proud to say I am pleased with the conciliatory and calm suggestion that we should be unanimous in this respect. I am delighted that is the approach he has taken. I should add that original press releases coming from the Leader of the Opposition were not quite so calm or nonpartisan.

I am not upset or surprised, but sad, that the member for Windsor-Riverside (Mr. D. S. Cooke), speaking for the third party, detracted to some degree from the calmness and had to take some political shots, specifically at the Premier and the government.

Mr. D. S. Cooke: Well deserved.

Mr. Ferraro: The third party is the first one to stand up and say: "You did not do anything. You did not go anywhere to defend Ontario." When the Premier and the minister, whoever he may be, defends this province, its obvious position is, "When you went down there, you did not do anything." It is almost hypocrisy to the nth degree, but I do not want to get into that.

I want to get to the real intent of the motion proposed by the Leader of the Opposition, and I am delighted to speak in that regard. Suffice it to say the government of Ontario agrees with the basic intent of the resolution. This government is fully aware of the importance of maintaining a competitive automotive industry in Ontario. We are fully aware of the crucial role the auto pact plays in establishing a framework for companies engaged in this industry.

I believe everyone in this House is familiar with the strategic role the automotive industry plays in the Ontario economy. It has been alluded to and I am sure will continue to be by many members of this House, including the Leader of the Opposition. At present, there are in excess of 120,000 Ontarians employed directly in this industry. The automotive industry has a significant direct impact on the economic and social health of over 40 Ontario communities.

The automotive industry also provides significant markets, both domestic and foreign, for Canadian materials, auto parts, production equipment and related goods and services. Indeed, the auto pact helped transform Canada's automotive industry from a small, inefficient, high-cost producer that served only the Canadian market into a modern, strong, efficient part of the North American and world auto industry.

There is no disputing the facts of what the auto pact has meant to Ontario since it was introduced in 1964. Employment in the automotive industry in Canada, dealing with motor vehicles and parts specifically, is up by 88 per cent from an employment in 1964 of 69,000 to an employment of approximately 130,000 in 1985. I might add that Ontario currently has 85 per cent of those jobs. In comparison, growth in total manufacturing in that period is up by only a modest 36 per cent; in 1964, to be more precise, there were roughly 1,492,000 employees, while in 1985 there were 2,033,000.

Canada as a whole has seen a 187 per cent increase in vehicle production since 1964 and, even more amazing, a growth of 2,800 per cent in the manufacturing of parts.

The pact has been good for both Canada and the United States. Exports of vehicles and parts to the US have increased by 400 times the 1964 total of $80 million to $33 billion in 1985. Our imports from the US, vehicles and parts in total, increased 38 times the size in that period, to $27.6 billion.

There are also less tangible gains for Ontario, ones that do not always show up on a balance sheet. Announcements such as the recent one at GM in Oshawa are proof that we are also gaining through the introduction of new technology to our industries. There is no doubt that we are in the midst of a technological revolution for many of our industries, and I am not just talking about the automotive ones. The message is clear. We have heard it before. Adapt or disappear.

The automotive industry is highly competitive because it is one of those industries that must, for survival, keep up to date with the latest innovations. Ontario benefits from the newest in technological processes, materials and products.

One other interesting note: despite what many people think, Canadians have also seen benefits in their wallets. Before the pact, Canada's car prices were between 10 per cent and 30 per cent above the comparable US prices. Currently, once the rate of exchange is considered and before taxes, which is a very important point, Canadian prices are actually three per cent to eight per cent below US vehicle prices.

Let us not kid ourselves. The auto pact has also had its downside for Ontario and Canada. We have seen a reduction in research and development and engineering activity in that industry in Canada. Let us be honest. The vehicle assembly industry in Canada is still 100 per cent foreign-owned. It is only in the parts industry that there is substantial and growing Canadian ownership.

None of that detracts from this government's basic stand. The auto pact works. It is good for both countries. It should not be subject to open negotiation in any free trade talks. This government and this minister have been consistent in that regard, notwithstanding the remarks from some members of the New Democratic Party.

The auto pact works for several reasons. Most notably, it is an agreement that is good for both countries. It is good for companies in both Canada and the United States. It works because vehicle and parts manufacturing companies in Canada agreed to the safeguards that were established in the agreement.

Vehicle and parts industry companies agreed to achieve safeguards because, by doing so, these companies were able to trade goods between Canada and the United States duty-free. This duty-free trade was and still is of significant benefit to the companies. As the North American market becomes more competitive, this duty-free trade will remain a significant benefit. Without this commitment on the part of predominantly US-owned vehicle and parts manufacturing companies, the auto pact would not have worked. We must. not lose sight of this crucial fact.

In the resolution that is currently before us, we are advocating that the auto pact should not be amended as a result of the present trade negotiations between Canada and the United States. For the past 12 months, the government of Ontario has been continually urging the Canadian federal government not to permit the auto pact to be discussed during these free trade negotiations.

While we have received numerous assurances, both public and private, that the auto pact will not be on the table, the Ontario government will not feel secure until Canada has received a commitment from the US government that the pact will not be changed. The auto pact can be changed in several ways, and we must ensure that none of these occurs.

If the tariffs on automotive products traded between Canada and the United States are removed, then the auto pact is destroyed. There is no incentive for a company to meet the safeguards and there is no penalty for a company that does not meet them. The tariffs must not be removed.

The safeguards must not be changed unless a change will bring additional benefits to Canada and the United States. At present, the auto pact safeguards and the additional commitments made by the US vehicle manufacturers are, in essence, Canada's automotive policy. When one considers the massive transformations that are occurring in this industry, particularly because of the major foreign investments being made by Asian vehicle and parts manufacturers in North America, one very quickly realizes that Canada should not go through this period of change without an automotive policy.

Now is not the time to change the safeguards, especially when we consider how well the auto pact has worked during the 22-year period, particularly during the past few years. Basically, the major strength lies in the commitment of both countries to ensuring the continued existence of the auto pact.

I might add that

article 4 of the auto pact provides a framework for both countries to discuss issues and concerns that may arise respecting each country's automotive industry. It is because of the existence of this framework that the government of Ontario has repeatedly stated that the auto pact should not be discussed during the free trade negotiations.

It is the policy of the Ontario government that all foreign vehicle manufacturers that sell a significant number of vehicles in Canada should make appropriate contributions as defined by the auto pact. In addition, the vehicle manufacturers that establish motor vehicle assembly plants in Canada should be members of the auto pact. The announcement of the Suzuki plant indicates that Suzuki officials intend to reach auto pact status within two years. We have similar commitments from Toyota.

In conclusion, the Ontario government is adamant and in total concert with the intent of this resolution. We realize the significance of the auto pact to Ontario and to Canada. As a party and a government, we wholeheartedly endorse that the Leader of the Opposition has brought this before the House.

Mr. Partington: I am pleased this morning to speak in support of this motion put forward by my leader and to indicate my strong support for the automotive products trade agreement of 1965 or, as it is known to most people, the auto pact. A thriving automobile industry is vital to the economic wellbeing of Ontario and Canada.

As we are all aware, the automotive industry is Canada's largest manufacturing industry. In fact, Canada is the seventh-largest producer of cars and trucks in the world. More important to this debate, 95 per cent of this country's automotive manufacturing is concentrated in Ontario. In the Ontario work force, one person out of seven is employed in the automotive sector or in an industry related to it.

From these statistics alone, it is easy to see just how important the automobile industry is to the province-wide economy; but we must not lose sight of the importance, and in many instances the critical role, that the auto industry has in the economy of many of our municipalities.

For example, it is estimated that 41 municipalities in this province depend upon auto-related industries for their economic wellbeing. More than 50 per cent of Windsor's manufacturing work force is employed in the auto industry. In Oshawa, the figure is more than 80 per cent. It is not difficult to imagine what effect a downturn in Canada's automotive industry would have on these two communities.

Oshawa and Windsor are not the only communities that would suffer under such an eventuality. Most people know there are two large GM plants in St. Catharines; in fact, in St. Catharines, GM has the largest metal casting plant in Canada. Many members may not be aware of how much the Niagara region relies on the automotive sector for its economic wellbeing.

While we are famous for our wine industry and fruit growing, the fact remains that, along with the GM plants, there are 30 auto parts manufacturers and 267 automotive-related metal fabricating and machine shops in the Niagara region, including such well-known corporations as TRW, Hayes-Dana and Court Industries. Together, these many manufacturers employ more than 26,000 workers.

Overall, these automotive and auto-related jobs represent more than half -- 56 per cent, to be precise -- of all the manufacturing jobs currently located in the St. Catharines-Niagara area. Any downturn in automotive production would obviously lead to serious repercussions for this area of our province. One event which could trigger such a downturn would be a change to the current US-Canada auto pact brought about during the course of the freer trade negotiations currently taking place.

The existence of the auto pact since 1965 has played a critical role in the development of Ontario's auto industry. For example, in 1964, the year before the agreement was signed, GM of Canada produced only 290,000 vehicles and employed fewer than 25,000 people. Two years ago, the latest year for which comprehensive statistics are available, GM built more than 840,000 automobiles, 75 per cent of which were exported to the US. Employment by the company is now at an all-time high of 50,000. Roughly 20 per cent of those jobs are located in St. Catharines, where GM last year invested $225 million. As Ron Migus, the manager of the St. Catharines GM plant, points out:

"Once the auto pact came into effect, we began to rationalize our product lines. That meant we produced more starting motors, for example, and used some at home and shipped the balance across to the US. The effect was that we had more volume, the unit cost dropped and we were more competitive. Since that time, we have just grown on and on."

There is no denying that the auto pact has played a fundamental role in the development and expansion of our automotive-based industries. It is because of the auto pact that 56 per cent of all auto parts produced in Canada are exported to the US. The fact remains, however, that this 56 per cent represents only six per cent of the parts used in the US car assembly. Without the protection of the auto pact, idle and underutilized plants in the US could easily absorb Canada's total production.

The end of the auto pact would not only devastate the Niagara region's auto industry but would also send shock waves to our provincial and national economies.

So far, I have confined my remarks solely to the direct role played by the automotive industry in our economy and the impact the auto pact has on that sector. We cannot forget, however, the importance of the auto industry vis-à-vis many of our industries.

For example, in 1985, it is estimated that our automotive sector consumed 37 per cent of all iron foundry production, 17 per cent of the rubber products, 15 per cent of the machine shop products, 14 per cent of processed aluminum, 13 per cent of wire goods, 8.5 per cent of carpeting and fabrics and eight per cent of the glass products produced in Canada. Of course, it is a tremendous user of high technology.

The Canadian automotive industry is the final destination of more than 20 per cent of all domestic steel shipments, representing more than 10,000 jobs in the Canadian steel industry. It is not hard to imagine how important a healthy automotive industry is to these manufacturers or to imagine the disastrous effect that a decline in our automotive production, brought about by changes to the auto pact, would have on these associated industries. The livelihood of the one out of every seven Canadians who depend directly or indirectly on the automotive industry for their jobs would be placed in jeopardy.

In conclusion, it is clear that the auto pact has played a critical role in the development of our automotive industry. This expansion in the auto sector has in turn fostered growth in many of our other industries. In short, the auto pact means jobs for communities such as St. Catharines, Oakville and Oshawa. The continued economic wellbeing of Ontario and its residents rests on maintaining the auto pact.

As members of the Ontario Legislature, we must take every available step to ensure that the auto pact is not amended or terminated as a result of the present trade negotiations between the governments of Canada and the US. For the sake of the workers and communities that would bear the brunt of an end to the auto pact, I urge members to support this resolution and thereby send a clear message that we are united in the support of our automotive industry. The economic future of Ontario depends on our efforts.

Mr. Morin-Strom: I am very pleased to be able to speak on behalf of our party on this resolution. It is an important resolution, one that I am sure will get unanimous support because in effect it is a motherhood resolution for the citizens of Ontario.

We have to look at the auto industry, at the jobs that are dependent upon the auto industry and at the importance of the auto industry to the whole economy of Ontario. The current strength of the economy in southern Ontario is heavily dependent on the levels of auto production and the levels of auto exports to the United States. Today we enjoy a considerable surplus because of the competitive position and the modern facilities we have in our automotive industry.

It is unfortunate that we even have to have a resolution of this type in this Legislature. It is unfortunate that the auto pact is a subject of discussion in the trade negotiations with the US. There is really no need for that to have happened.

The initiative of the federal Progressive Conservative government to put everything on the table in trying to pursue a comprehensive free trade agreement has been a disastrous one for Canada, one that has resulted in concession after concession affecting a number of industries in our country. Rather than taking the bull by the horns and focusing on those trade irritants that were the problem, we have opened up a complete new can of worms. We have opened up discussions on a wide area of concerns that were not previously concerns of the American administration.

The focus on US-Canada trade has been heightened as a result of the federal government's initiative, and we have put the focus on many areas that were not previously the subject of discussion. Prime among those is the automotive industry.

There was no suggestion that the auto pact required revision or that we needed any changes in the way the auto industry was being handled on a bilateral basis between the US and Canada. There were concerns about the heavy importation of automotive products from Japan and other importing nations into both Canada and the US, but it is only as a result of the opening up of and the focusing of discussions on the Canada-US trade relationship that the auto industry has become subject to potential disruption in Canada if, in fact, the auto pact were abrogated by the US.

The auto industry is vitally important to Ontario. I have a few statistics here. New capital expenditures in the automotive sector during the 1980s have averaged close to $800 million per year, leading all manufacturing sectors. In 1986, more than $4 billion in new investments have been announced by North American auto makers. North American auto makers in Canada in 1984 exceeded their production requirements under the auto pact by 70 per cent and their Canadian value added by more than 20 per cent.

Some have used the argument that the auto pact will not be necessary in the future because we are exceeding those targets by such a great extent today. We are in a strong competitive position in the auto industry today, largely as a result of the exchange rate and the investment that companies have put into modern facilities. There is a labour cost advantage in Canada because of the devaluation of the Canadian dollar, but historically, over the complete term of the auto agreement, the current surplus has not held up. In the longer term, we are roughly in balance in the automotive trade between the two countries.

We have to look at the auto agreement as ensuring the long-term future of that industry. We cannot be assured that we will maintain a strong competitive position in the longer run. We do not know what the exchange rate might be five years from now or whether the auto industry will continue to modernize and develop new plants in Canada. The auto pact gives us some assurances that we will get a fair share of that investment and that Canada will have a fair share of North American auto production.

One of the aspects of this motion I particularly want to support is the suggestion that all foreign automobile manufacturers building plants in Ontario should be urged to attain auto pact status. I hope it will even go beyond that, and we ask all major importers to attain auto pact status so that we have assurances that the major sellers into Canada are producing cars in Canada and that we get a fair share of the production in proportion to the numbers of cars sold in our economy by those major producers.

In terms of actions on the importers, though, we have to be concerned about the types of auto plants that are being introduced here. The evidence is that the Toyota, Honda and Hyundai plants that are coming in are not integrated manufacturing plants but rather assembly operations. I believe they are called completely-knocked-down plants in the industry.

All the sophisticated work and most of the jobs that go into the production of those cars go into the components and major subassemblies that are produced in the home countries, primarily Japan or South Korea. Then they are sent to Canada and the final assembly is completed here. In terms of numbers of jobs, my understanding is that typically less than 20 per cent of the jobs are provided in those plants compared with what would be provided in major US-owned plants such as the ones in Oshawa, Windsor and St. Catharines.

We have to ensure that we get a fairer share of the jobs in the production of those automobiles from the foreign suppliers than we are currently being assured of by the plants that are being installed here. We have to focus on that issue.

I want to express as well some major concerns about the provincial government's position. The Premier has been very wishy-washy in his approach to the auto pact. He claims to be a defender of the auto pact but he has never taken any tangible action to protect Ontario's interests in dealing with either our federal government or with the American government.

Yesterday, we heard him say that he supported the Prime Minister's initiative when he was in Washington; however, he did not understand what the initiative was. It is time that all three parties recognize what the free trade agreement is that is being pursued and stand up to protect Ontario's interests, to protect the interests of the automobile industry and the workers in this province in general by taking a strong stand and by ensuring that the auto pact and our other industries are not subject to loss in these negotiations.

Mr. Grossman: I listened with interest to the comments of the members who have spoken in this debate and I agreed with many of the comments. The member for Sault Ste. Marie (Mr. Morin-Strom) has identified the reality that the terms of trade do change between the countries over periods of years, and that is the point I was winding up with. If a pact means anything it means that the two parties, the Americans and Canadians, stand together regardless of how the winds shift from year to year, because constancy and predictability mean a lot.

I want to say to the member for Wellington South (Mr. Ferraro) that I appreciated his comments about the nonpolitical nature of the exercise this morning. I want to say that we reserve the right to criticize the handling of this issue over time. Indeed, in his remarks, the member for Windsor Riverside criticized my own party from years back for certain actions on this. We are all free to do that and I think we must.

What disturbs me is that we have an opportunity this morning to express the unanimity of this House, not for political posturing and not for rhetoric, but to give the vote of constancy that says the auto pact and the employment of auto workers in this province are more important than political posturing. Quietly this morning, we meet, three parties in this assembly, to do just that.

I say with all respect that I was more than a little disappointed to see that for most of this debate two, and on one occasion three, of 51 members of the Liberal Party of Ontario were present in the House for what I consider to be an important opportunity to express confidence in the auto pact. As we wind up the debate and get ready for the next, three more have entered. No cabinet minister in this province has deemed it important enough to attend a one-hour discussion in this House to protect the auto pact. No minister of this government thought it appropriate to take one hour of his time simply to sit and express by his presence his concern about maintaining the auto pact.

Mr. Ferraro: On a point of order, Mr. Speaker: Notwithstanding the remarks by the Leader of the Opposition, the Minister of Industry, Trade and Technology was here for most of the remarks made by the opposition, as was the Minister of Education (Mr. Conway).

The Acting Speaker (Mr. Morin): This is not a point of order.

Mr. Grossman: In the remaining time I have, I want to make this point because it is relevant to the point I was making about the degree to which the auto pact is going to become either a political football in this province or a symbol that we are all going to stand together for the auto workers, not for anyone's personal political gain.

We have talked this morning about how well Canada is doing currently under the auto pact. We have talked about the surplus we have had and about the Japanese investment we have here. We have talked about the economic climate and about our productivity. We have talked about the 11 GM plants in the US that have been closed. We have talked about the fracture in the United Auto Workers. We have talked about all those things with a lot of intelligent contributions made.

If anyone takes these facts, runs them up the political flagpole and does it in such a way as to try to turn it into a campaign to fight something that is not there, he is going to put it there. If we invite those beleaguered UAW members, the 10,000 laid-off auto workers and their congressmen to take action against a perceived problem -- and the member for Sault Ste. Marie has made the point -- the productivity, the surplus here is not an auto pact function, it is a function of how well we make cars in Canada, the competitiveness of our workers here, the environment within which they work, the wage rate and our efficiency.

If, indeed, anyone in this province -- and I say this now that we have one minister of the crown taking time to join in this resolution this morning, l say to that one minister present -- if any member of the government, including its leader, chooses to use this as a platform to raise a red flag in front of the Americans -- who at any time, this morning, this afternoon, next week or on the Premier's next visit to Washington, could serve notice of termination of that auto pact with or without the freer trade talks

-- then someone is going to have to be called to account for having said to the Americans, having put in the front page of the Detroit, Michigan and Missouri newspapers, having put it to them in clear and blunt terms that we are doing well here in Canada, we like it and do not interfere, remind them how well it is going for us here and then turn it into a political football to fight and bash the Americans, where what we hope they do is sit quietly while we enjoy a surplus under the Auto Pact -- a surplus we are entitled to, just as they were entitled to one when they had it.

I close this morning in thanking the members for indicating what I think will be unanimous support to this resolution and remind them that the support they express in words has to be expressed in the way they express those words, in the way they handle these issues, in the degree to which they will put diplomacy and tact on behalf of protecting those jobs ahead of a real political desire to score some domestic political points in order to achieve a domestic political goal.

It is simple in my view. The more people play politics with the auto pact in Canada, the more they are likely to kick off exactly the notice of termination south of the border that they want to pose here as trying to fight against. It is time for statesmanship and leadership.

Let the words, echoing in a very empty chamber thanks to the absence across the floor, echo from here throughout the government building and the cabinet room: diplomacy and tact, looking after the auto workers ahead of political rhetoric. I thank the members for their support for this important resolution.

Hon. Mr. Conway: On a point of privilege, Mr. Speaker: Briefly, I want to respond to a charge made by the Leader of the Opposition, which quite unhappily speaks to his peculiar sense of morality. I happened to have been in this assembly and to have heard the honourable member's speech in its entirety. It is not true to say, as the Leader of the Opposition said, there was no one here listening to him. I sat through the entire presentation. I left only to process --

lnterjections.

The Acting Speaker: Order. May I remind the member to take his seat. Order. Would you please take your seat? Order.

This ends the debate on resolution 41.

DAY CARE

Ms. Gigantes moved resolution 42:

That in the opinion of this House, since:

(1) the fact that the select committee on health (established to consider the role of the commercial, for-profit sector of health and social services) has not yet reported;

(2) the fact that this government is on record as supporting a moratorium on further privatization of health and social services;

(3) the fact that the Legislature has waited a year for the promised white paper on child care; and

(4) the fact that the consultation process to lead into the white paper on child care has not begun;

The government of Ontario should prohibit direct public funding of commercial child care programs, for the following policy reasons:

1. the effective use of government revenue;

2. the growing evidence that nonprofit child care programs are superior in quality to programs provided in commercial setting; and

3. the experience of inadequate service and lack of public accountability in the similar field of care programs for the elderly, that is, commercial nursing homes.

The Acting Speaker: The honourable member has up to 20 minutes for her presentation and she may reserve any portion of it for the windup.

Ms. Gigantes: I feel I should explain the rather negative tone of the resolution that I have brought before the Legislature this morning. It has a positive purpose.

At this time, we are at a decision point in terms of our policy on the provision of child care services in Ontario. We know from balloons that have been floated on behalf of the government and leaks through associations of commercial day care operators that the government is on the point of deciding it will provide direct operating funds, public funds, for operating costs to child care operations in this province, including those run on a commercial basis.

Because we are at that decision point and because I feel that decision constitutes a turning point in our approach to public policy on this question, I believe we must directly address the question of whether public funds should be going to commercial child care operations.

I remind members of this Legislature that, included in the commitments undertaken by the Liberal government in the accord with the New Democratic Party in June 1985, following the election and the change of government in this province, there were four important commitments that have a direct influence on the decision that lies before us in the field of child care policy.

First, the accord said there would be a select committee to examine the commercialization of health and social services in Ontario. There was a recognition in the accord, an acknowledgement by the Liberal Party of the certainty the NDP had identified, that the growing commercialization of people services in this province was a threat to the financial structures of this province in terms of public fiscal responsibility and to the quality of care we seek to provide for those people in our communities, whether they be old, young, handicapped or deprived in some way.

The quality of care we provide for them in a public sense is threatened by the fact that we are allowing the commercialization of the services we provide.

It is in acknowledgement of that fact that the Liberal government agreed with the NDP that we should have a select committee inquire into the question of commercialization. That select committee has not yet reported, but this government is clearly on the verge of increasing the degree of commercialization in the child care sector of this province and beginning on a path of development of child care services that will see us go down the road we have travelled on nursing homes in providing care for the elderly in this province and that we have seen in other provinces as a bad example of how to provide services to people.

In the NDP accord, the government also agreed that there would be reform of the present nursing home system, the licensing and inspection system of nursing homes in Ontario. That is a crying need the government has had to acknowledge, because it has been a shock for people to recognize during the past several years the level of services and the degree of accountability of nursing home operators and their operations in Ontario. There is an acknowledgement by the government that we have to do something very basic in terms of reform of our nursing home system.

We have not seen that take place yet, in spite of the many months that have passed with this new government, but there has been an acknowledgement the problem exists.

The accord affirmed there should be "reform of day care policy and funding to recognize child care as a basic public service and not a form of welfare." Following on that acknowledgement and promise made in the accord, we have been told to await a government white paper which will provide us with an outline of government policy on the subject of child care. That white paper was expected in and promised for June 1986. It has not appeared. It looks as if the government is about to take measures in terms of financing for the direct operating costs of existing centres which will inhibit an overall comprehensive review of the development of a good child care service for the people of Ontario.

The fourth item in the accord to which this question is directly related, in my view, is the statement that the government would undertake "affirmative action and employment equity for women, minorities and the handicapped." In terms of the needs of women in this province, a good child care system is an absolute necessity.

In the past few years, there has had to be an acknowledgement that the situation of child care services in this province has been dismal. There must be a radical effort made -- and I mean radical, a whole new approach -- to provide good quality child care services for the families of this province. It is not a women's issue; it is a children's issue and bears directly on the future of this province.

Women are in the work force. Women with young children are in the work force. In fact, 64 per cent of the women of Ontario with small children were in the work force in October 1986. At that point, there were only 85,479 licenced or supervised spaces available in day care centres in this province. In 1985, 59 per cent of the women of this province who had children under the age of six were in the labour force. That represents a remarkable increase in the participation of young mothers -- some of them may be old mothers but they have young children -- in the work force of Ontario.

There is a problem in the provision of child care services. We can break that problem down into sections. There is a problem with access; there are not enough spaces. We know there is a problem of affordability -- the fees being charged are outside the means of the ordinary working family -- and there is a problem with quality. We do not have a system which ensures quality. In fact, we may be on the verge of funnelling money into the very part of the system, the commercial sector, in which the quality now is the lowest.

Members will be aware that last week the Coalition for Day Care in Ontario publicly released a survey undertaken for the work of the parliamentary committee in Ottawa considering the development of child care policy. That survey indicated that, according to the inspectors of day care services, there is a marked difference in quality of programs across Canada when one compares commercial child care centres with nonprofit child care centres.

That is the first comprehensive look at the quality of program provided in child care centres across Canada. It is a survey done by people who know what that service is, who are paid to look at that service in terms of quality. It is a survey that should give the government full warning that to pour public money now into the operating costs of commercial child care centres is not the way to go if we are aiming for quality programs for children in this country and, more particularly and of more concern to us, in this province.

As late as yesterday, he said he and other provincial ministers, who met with the federal Minister of National Health and Welfare in Ottawa last week, discussed the question of federal cost sharing of provincial public funding for commercial centres and that only one province was against the idea. That one province was Manitoba, and I am very proud of the position of that province. There has been a willingness in Manitoba to face facts about the relationship between public funding and the need for public accountability about quality of service for vulnerable populations. In that, I include the children of Ontario as well as of Manitoba and other provinces.

If we are going to look for good child care services, if we are not going to do an experiment with the children of this province, a whole generation of children whose mothers are at work from the earliest ages when those children are growing up, then we have to take care about the way we develop our system. It is absolutely vital.

The minister tells us he wants to make sure there is a choice available to families. He makes it sound as if the choice that families are looking for is putting children in a commercial day care operation as opposed to putting them in a nonprofit day care operation. Somehow he tends to mush those ideas together to try to confuse the issue. That is not the choice people are looking for. The choice families and mothers are looking for is one of having a service of high quality available or not having it.

The fact right now is that the choice is not available, and the answer to that problem is not to fund commercial sector day care, but to provide nonprofit day care which we know even now is of higher quality.

If we look at the experiences of other governments, we can see a very bad experience in Alberta, which in 1980 began operating funding for commercial day care centres. There is no doubt in the mind of anyone who has looked at the situation in Alberta since then that there has been a noxious effect on child care services in Alberta. The diversion of public funding to commercial sector child care operations has increased the number of spaces in Alberta, but at what cost?

Objective observers will say, and I will cite articles from the Calgary Herald to indicate it, the quality of service for children in day care centres in Alberta has gone down as a direct result of the decision to provide public funding to private operations. The reason for that is simple. As public funding has been available to commercial operators, they have aggressively gone into a market which is huge, where demand is overriding and competition is nonexistent.

If you can get a licence, you have a market, a high level of demand for your product, but the quality is not there. The quality of service has gone down; the commercial sector in child care has expanded aggressively and the result has been access, more spaces, but no quality care for a great many children in Alberta and a system which is not publicly accountable either in financial terms or quality of service.

I will quote very briefly from a series of articles done by the Calgary Herald in the fall of 1985 in an attempt to assess what was happening in child care in the province and what had produced the effects that were then visible. They quoted directly from day care operators, from parents and from people who worked in day care. When one reads through these articles, it is quite clear there has been a cause-and-effect relationship between the decision to fund commercial centres and the fact that the whole child care sector is now dominated very heavily by commercial services; the quality of those services is low and the public accountability is low.

One day care operator was quoted as saying to the reporter who worked on this series: "If you want to make a lot of money, go into real estate. If you want to make a little less and care about children, then go into day care." He ought to know. For 10 years, he has been building day care centres in Calgary and throughout the province. He now has about 20 day care centres with 1,500 children being provided services through those centres. He is a very rich man.

He also says that he accepts the need for more governmental regulation but his bottom line is free enterprise. This is how he puts it: "If people do not like your damned day care, they do not have to go to it." That is what competition is about in the provision of services to people. The demand is so overwhelming out there that if we provide public funding to those commercial operators, that is the area of service that will boom aggressively.

If anybody has any doubt about that, he should take a look at the press release that was put out last week by the Association of Day Care Operators of Ontario, the private day care operators, the commercial sector in day care. It is a very aggressive statement about how they want public support in financial terms for growth in their sector of that service industry. Take a good look at it. These people are not content to see grandfather clauses; existing day care centres are going to get $3 per space and no new commercial day care centres will get money, and this is the proposition the government has been floating. They will not stop there.

As in Alberta, these commercial, profit-oriented operators are going to move forward aggressively in this market and if we give public funding to them, we are delivering over a new service sector to commercialization and privatization in this province. We are doing it and putting our children in the position of being the vulnerable recipients of a service for which there is no quality accountability and there is no financial accountability. Let us see the books of operators to whom we give money. We have gone through this in the nursing home field. If we have not learned the lesson now, we are dumb.

This is a negative resolution. I phrased it that way so I could be as direct as possible in indicating why I feel we must turn from this kind of project to the better way, which is to insist that services to people in Ontario, particularly the most vulnerable groups of people in the province, the elderly, the young, must be provided on a nonprofit basis.

In Ontario, it is essential to remember that half of the present licensed capacity and approximately one third of the subsidized spaces are provided by the for-profit centres. We cannot negate that factor. It is an important piece of information that we simply cannot remove. It is a realistic one; it is one that currently exists.

As the government struggles with this question and examines new funding approaches, there is a need to ensure that the existing spaces I have just referred to continue to be available to families currently dependent on them. There is also a need to ensure that the same quality continues in the for-profit centres as well as in the nonprofit centres.

I want to refer to the famous report to which the member has referred and other members have looked to for an explanation of quality in child care. The report is called An Explanatory Review of Selected Issues in For-Profit Versus Not-For-Profit Child Care. It was released last week. It is frequently referred to in terms of its funding related to a differential in the quality of care between nonprofit and the commercial sector. However, what has not been referred to is the analysis of the potential impact of differential funding support and the recommendations of that report.

I notice the member smiling, but we have to look at this in an objective fashion. Because of the potential implications of such a policy, the report outlines concerns about the introduction of any policy designed to discriminate against for-profit businesses. I have to look at some of the terms of reference. According to the report, if we discriminate against for-profit businesses, we run the risk of producing a negative impact even on commercial centres that closely resemble the nonprofit centres that are operating at a high-quality level.

The relatively high incidence of low-quality care found in for-profit day care centres, particularly among small independent operators, is mainly due to the fact that for-profit operators generally do not have access to the level of public financial assistance that is available to nonprofit operators. That is a fundamental distinction. Obviously, the not-for-profit centres have greater resources. Consequently, the quality in those centres is marginally better in some cases and far better in others. The report has referred to this.

Finally, the report states that if we use any measures that use auspices -- and that is a designation indicating whether a particular child care operation is profit or nonprofit -- if we use it as a restriction, we run the risk of limiting the number of child care organizations or raising costs, and in that way pushing parents towards the unregulated child care operators. That is a very great portion of the kind of care that is being offered, and a lot of parents have to turn to it. That is a realistic situation that exists, and we want to ensure that it does not continue and that the situation will not be aggravated.

The study concludes that efforts to discriminate against for-profit operators should therefore be approached with great caution. It goes on to state, "Rather, a more productive strategy for improving the quality of care is through an integrated approach which combines change in the legislative and regulatory framework with changes in the level of financial assistance."

This government is giving consideration to new funding measures such as the member has pointed out, but I want to make a distinction between what she is saying and what we are attempting to do. I am going to allude to that later. We are looking at direct operating grants and a move from needs testing to income testing.

To maintain the existing commercial sector and support quality service, equity requires that consideration be given to this sector. As a result, Ontario will be pursuing with the federal government greater flexibility within the cost-sharing arrangements to include the commercial sector.

Members have to remember that under the present legislation in Ontario all licensed centres, whether commercial or noncommercial, are subject to exactly the same standards and inspection requirements. That is going to continue to be the case.

Ms. Gigantes: There are no inspection requirements; there are no provincial standards.

Mr. Cordiano: Sure there are.

As the minister stated yesterday, he is committed to providing an early indication of our program initiatives. However, the effect of the federal-provincial discussions needs to be considered before announcements can be made. I am going to tell members what the agenda calls for in terms of the timetable. On February 1, a series of bilateral meetings between individual provinces and federal government officials begins. Finally, in June, a federal-provincial agreement should be confirmed at a meeting of ministers. The Minister of Community and Social Services (Mr.

Sweeney) stated yesterday in the Legislature, "I am assured by the federal government and other provinces that this timetable is the speediest they can follow."

I want to go back to what the member for Ottawa Centre (Ms. Gigantes) referred to with regard to the trend towards commercialization. She was referring to some of the information brought out by the federal report. The minister has indicated, as I am sure she is aware, that the report is in error and that the growth since 1985 in the commercial sector has not been the reported 38.5 per cent but 4.1 per cent. That is a substantial difference and is fundamental to understanding where this government is going in terms of the question of the commercialized sector or the not-for-profit sector.

There is no intention on the part of the government to expand the commercial sector. We are simply trying to increase the quality of what we have now. The situation is that half of the day care spaces available are in the commercial sector. There is no way we can change that around in the immediate and foreseeable future. We are going to move in a transitional stage to the Utopian vision my honourable friend has. That is where we are.

In a perfect world with unlimited resources, we could do what the member is calling for, but I do not believe that is a very realistic proposition. We do have a commercialized sector. Also, one is talking about an investment in capital in taking these over, in turning these centres from commercialized to not-for-profit or nonprofit centres. Sure you are.

The resources that would be required to do that would jeopardize the entire number of spaces, which I believe is about 50,000 in the commercial sector. What are we going to do to shore up the spaces there now if we are going to eliminate those commercial spaces?

For that reason, I cannot support the member's resolution, at least the last part of her resolution.

Mrs. Marland: I must say at the outset, in rising to speak in strong opposition to the resolution from the member for Ottawa Centre to deny direct funding to commercial child care, that I was tremendously amazed that of any member in the House, this member would make this resolution without a solution. Even if that was ideally the thrust of her wish, I have not seen any solution in anything I have heard today.

I also would like to take very strong exception to the fact that she is suggesting that the experience of inadequate service and lack of public accountability in the similar field of care programs for the elderly, i.e., commercial nursing homes; that is a very dangerous and malicious slam against commercial nursing homes. There certainly are some problems in some areas, but to make a generalized statement such as that is not in the interests of the care of the elderly in this province whatsoever.

I oppose and call on others to reject the resolution before us today. To call for the government to prohibit direct funding of commercial child care programs is a shortsighted, narrow approach that is grounded in ideology and ignores the reality of the child care situation in Ontario. Moreover, it represents a punitive approach in two ways. First, it seeks to discriminate against private sector day care operators who happen to supply half the province's licensed group of child care spaces. Second, and still more important, it would punish the thousands of parents who have their children in private centres.

This resolution is also irresponsible. It would create a situation in Ontario in which we might have to forfeit the opportunity for increased assistance to all our day care centres. Believe me, profit and nonprofit alike, they are all struggling with the same big problems, such as liability insurance costs, shortage of qualified child care workers and the justified need to increase the salaries of those workers.

If a new arrangement can be reached with the federal government to allow the cost-sharing dollars to flow to both commercial and nonprofit child care centres, we must take advantage of these new moneys to enhance the quality and availability of all forms of child care. I cannot, nor should anyone else, support a position that will deny Ontario the chance to benefit from a new arrangement that would help address some of the chronic problems we face in terms of quality, affordability and availability of child care spaces.

As a Progressive Conservative, I strongly believe that there is room for all sectors to play a role in the delivery of child care. Parents in this province should be provided with a wide range of alternatives in choosing the type of care that they, and not the government or some political philosophers, want for their own children. This means a free choice among government-operated, nonprofit and commercial centres. Only by providing many different modes of delivery can we produce the highest quality of care.

Having said that, I want to place it on the record that I am apprehensive about the direction in which the Minister of Community and Social Services is moving in terms of lobbying Ottawa. The Liberals want direct funding for child care centres. I am concerned about this approach. Specifically, I am not convinced that the problems in child care are best addressed by setting up a whole new funding structure that provides money to the centres instead of to the parents.

I have very strong reservations about moving in that direction of transforming child care into a directly funded institutional bureaucracy. If the Minister of Community and Social Services had taken the time seriously to consider the views of the province's commercial day care operators, he would have known that even the operators themselves do not want direct grants.

They advocate moving to income testing and expanding the current system of subsidies so that more families can qualify for assistance, so that more money will be available for subsidization and so that cash flows are higher so that salaries can be raised and centres can attract good staff. Instead of direct grants, a better approach would be to focus all efforts on expanding and improving the existing subsidization system by implementing income testing in both sectors and giving more money to the parents.

I am in support of part of the minister's position, specifically his efforts to convince the federal government to allow income testing to be applied to the commercial sector. Income testing is less intrusive, easier and cheaper to administer and would allow more parents to qualify for the assistance they need. I urge the minister to focus his efforts on improving the whole subsidy system.

In many towns across the province, the only child care spaces are in commercial centres. To deny direct moneys to such centres would not only discriminate against them, but it could also lead to a situation where private sector operators pull out, leaving no child care of any kind in those towns.

I would like to conclude by stating clearly I do not support this resolution because it ignores the realities of child care in Ontario and it represents a shortsighted, punitive approach towards the private sector which we so often find as a characteristic of members of the third party.

If the argument is seriously because of the variance of standards and quality of the private centre providers, then let us deal with these through licensing and inspection of an upgraded mode, but let us not throw the entire province into chaos. Let us not show such callous disregard for parents who, because of the socioeconomic climate in our province today, require the services of day care centres.

When we look at the situation globally across this nation and recognize that we have 4.3 million day care spaces in Canada, 174,000 of which are licensed, we know we are still dependent on the small homes, on the people who provide for their relatives within their own family setting. The whole issue of child care is one that is reflected and needed by our economy.

Mr. R. F. Johnston: On a point of order, Mr. Speaker: I was hoping you might rise and call the member for Mississauga South (Mrs. Marland) to order. My point of order is to ask you whether you might do that.

The member used the word "malicious" which, in my view, impugns motive to the member for Ottawa Centre in terms of her reference to the nursing home industry. The definition of "malicious" in the dictionary provided to me by one of the friendly pages goes as follows: "motivated by vicious, wanton or mischievous purposes." I suggest to you, sir, that word is unparliamentary and should be withdrawn.

Mr. Speaker: I did note that. I think the phrase was "a malicious attack." I did consider whether it was impugning motives and I do not believe it was. I also considered whether it was insulting and likely to create disorder. It is very close to the line, but I decided it was not out of order, so I did not call the member on it. Perhaps the member in the future, though, would pick words a little further away from the line.

Mrs. Marland: Mr. Speaker, in the interest of maintaining the decorum for which I have very great respect in the Legislature, I would be happy to withdraw the use of that marginal word as you have so it described today.

Mr. R. F. Johnston: Let me thank the member for her prompt response. It was very appropriate.

I rise today with two hats to speak on this issue in support of the member for Ottawa Centre's resolution. First, as critic of my party for the Ministry of Community and Social Services since 1981, I have had a long history of dealing with child care issues in this province and I am very nervous about what I see as an impending Liberal change of philosophy on this matter.

Second, I speak as a member of the select committee on health which, as the member for Ottawa Centre said, has been established to look at the whole question of commercialization and privatization of health care and social services in the province. As members of that committee, we are just receiving information now on the background of programs within the Ministry of Health and the Ministry of Community and Social Services. I do not like the idea that the government will be moving on a major policy change before we have had a chance to have hearings or major discussions as a select committee on this issue. I think it is an affront to the committee.

There are two questions that come to my mind. What has happened to the Minister of Community and Social Services? What has happened to the reformist Liberals who spoke so proudly about their reformist zeal as a government?

Last spring the Minister of Community and Social Services promised he would have a white paper for us on government directions in day care by June. There was even a tentative date set between the Attorney General (Mr. Scott) and the Minister of Community and Social Services to make that announcement in Thunder Bay in June. It got snowed and stopped at cabinet, by whom I do not know. It is interesting to see the Treasurer (Mr. Nixon) here today. It might have been because of financial concerns. Who knows? We did not see it then.

We were told it would be out in the fall, and it did not come out then. Then the new strategy of the Liberal government started. It was, "We will wait to see what the feds are doing and then we will make our response on day care policy to what the federal government" -- that progressive force, the Mulroney government, which it relies on so heavily -- "might come forward with."

Mr. Cordiano: We need the federal money.

Hon. Mr. Nixon: The Progressive Conservatives want to send a grant to the Contras.

Mr. R. F. Johnston: I would not be surprised.

An interesting point was raised by the parliamentary assistant, who is new at his job. I will forgive him for that. Needing federal money has never been a problem in this province before in the sense that -- and his critics in the past have raised this point, as I have -- we have never used the Canada assistance plan to its maximum for child care. If we wanted to spend more money under the present plan, we could do so; we have not done so. It is not a difficulty.

Hon. Fir. Nixon: Because the municipalities would not co-operate.

Mr. R. F. Johnston: It has not been a policy of the Association of Municipalities of Ontario, as is being alluded to by the Treasurer. It has been a problem of the will of the government, which used to be Tory and which is now Liberal. It is hard to tell the difference these days when it comes to this kind of issue.

The select committee is likely to decide within the next week that child care is one of the issues it wants to look at. In the preliminary report that we received back from Cathy Fooks from library research -- who, I see, is here today -- we learned that the Ministry of Community and Social Services is one of the areas with the largest amount of commercialization in it. That amount is staying at least consistent or is growing slightly. Any change of policy such as the one the government is talking about -- that is, giving money to the commercial sector directly for its operating services -- would be fundamental.

For that reason, we will probably be saying it is one of the things we should be looking at during the break.

It is not appropriate this government to start tinkering around with that system now and talking about what it thinks is some harmless expansion into giving direct grants to the commercial sector when we have not yet had a chance to look at what the implications are.

I encourage the member for Downsview (Mr. Cordiano) to look at the report that was made to us. From the comments he was making, he obviously has not had it. That report tells us we have a statistical dearth of information about day care. The kind of compilation we have is totally inadequate to know what the quality is in our services today. We are talking about a major policy change which, without any doubt, would expand the commercial sector amazingly and bring us to a system which is like that in Alberta or the United States, where the major chains see this as a major profit-making possibility for them and will change the balance dramatically in favour of the commercial sector.

To do that when we do not have inspection reports that are made public or collected province-wide, that are done only in regional offices, of which we have no systematic review at all, to which we have no public access, is a major mistake.

I have been around here for a fair amount of time, although not for as long as others. I remember that when I was working for a former leader of mine, Stephen Lewis, he raised the question of Mini-Skools and the quality of care in Mini-Skools in Ontario. I encourage the member to look back at that, to see what the problems were, and to look at the fact that today we have no policy at all in terms of looking at the quality of care in an open and public way. This is a major problem.

From looking at the report we have had from our researchers, we do not even know from the ministry in accurate terms what the breakdown is of profit and nonprofit. They cannot break that out for us. They use two different kinds of statistics in terms of individuals who may be running their own operations and corporations that may be running their own operations. They do not seem to know which of those figures they want to use and could not give the select committee consistent statistics for this.

This government supposedly committed itself to a moratorium on expansion of commercialization and privatization until such time as the select committee has a chance to look at this. In other areas, the government can argue that it is expanding equally in the private and nonprofit areas and that therefore it does not change the balance. However, the moment it gives a direct grant to pay a subsidy to those private, commercial operators, it is going to change the balance dramatically in Ontario.

Mr. Cordiano: All we are doing is improving salaries.

Mr. R. F. Johnston: Oh, improving salaries. At the moment, there is equal funding between the private and nonprofit sectors. There are no direct grants to the nonprofits at this stage, as the member knows. I ask the member to look at the statistics as to who pays whom good salaries.

Ms. Gigantes: They get the same amount.

Mr. R. F. Johnston: They get the same amount now and it is the profit-making sector that underpays its workers right now. If the member is going to give them both direct grants, what makes him think this is going to narrow the gap in wages one iota? It will not.

Mr. Cordiano: That is one item in the equality question. You are not looking at that.

Mr. Speaker: Order.

Mr. R. F. Johnston: What we have at the moment are four major issues in child care, none of which is addressed by just giving money to the commercial sector. One is affordability, and that will not change it. As the member for Oakwood (Mr. Grande) was just saying to me, there are some good quality private, profit organizations out there; there is no doubt about that. They cost a fortune. They are not accessible to the person who is having trouble with budgets.

Let us look at the commercial sector right now under the equal funding system we have currently. Who provides subsidized spaces? Is it the profit sector? No, it is not. They provide a much smaller proportion of subsidized spaces. They have much less consideration for the poor in our society than do the nonprofits. The member knows this is true and it would not change one iota by giving them extra money to increase their profit margins.

To say that it is not appropriate to link this with nursing homes is preposterous and outrageous. Of course, we have to look at that. It is the obvious parallel with the questions of accountability, affordability, quality of care and access that are being raised about the elderly at the same time as about children. To suggest we should move to that model after all the problems that have been raised by the member for Windsor-Riverside (Mr. D. S. Cooke) and other members of this party for years, including by my leader, would be a terrible thing for us to do without at least having a select committee review it.

Mr. Cordiano: How do you address those?

Mr. R. F. Johnston: I know the member for Downsview was not here before. If I had more time, and I do not, I would quote him some of his critics' comments in the past about expansion of commercial day care. I indicate to the member that what he is talking about is a major change in Liberal policy, which has never been taken before any convention of his party. It has never been discussed by his party and certainly not by this House, let alone by the public. To make that kind of announcement while we have a select committee trying to look seriously at this issue is a very dangerous thing to do and is basically an affront to us.

I do not have much time. I suggest in closing that the minister has obviously had to back down from this policy. We are expecting the announcement this week. I do not know whether he was sandbagged by the Treasurer or by the fact that he finally saw this was not a wise policy. However, I hope he continues to stay away from it, leaves it alone and gives the money to the nonprofit sector where it is needed.

Mr. Speaker: The member for Ottawa Centre has reserved two minutes, I believe, so there will be about three minutes for the member for Brampton.

Mr. Callahan: I will be very brief. I am sure there has been a lot said on this motion. I would like to rise to the defence of the select committee and point out the very salient feature that had so many committees not been struck as a result of specious arguments from the opposition -- I believe the committees number 14 at this point, including the select committee -- we would perhaps have been able to get on with the issue of the select committee.

Mr. R. F. Johnston: On a point of order, Mr. Speaker: He knows our problem is that the ministries would not give us the information. Come clean, sir.

Mr. Callahan: No, that is not correct.

Mr. R. F. Johnston: Come clean.

Mr. Callahan: That is not correct.

Mr. R. F. Johnston: We did not get that information until January.

Mr. Speaker: The member for Scarborough West (Mr. R. F. Johnston) was able to speak previously. That is not a point of order.

Mr. Callahan: If the member for Scarborough West reflects on that, I think he will recognize the fact that we had difficulty in securing time to deal with the select committee simply because there were so many other committees sitting. I look at the fact that two weeks are now going to be spent on the standing committee on the Legislative Assembly in order to review a matter that was raised by the member for Brantford (Mr. Gillies), which may very well turn out to be a bust. In the light of that, very important things have been kept back.

I would also add that, in the preliminary information we have received prior to preparing an interim report of the select committee on health, we have found that the figures between for-profit and not-for-profit are roughly -- and I say this roughly -- about 50-50.

In the light of that, suddenly to decide now, as is the purpose of the private member's bill, to restrict or not to allow any changes to take place might very well result in the for-profit sector disappearing and having to be caught up and supplemented by not-for-profit. I submit that that is a very important factor.

It is just like volunteers in a municipality. If you were suddenly to get rid of all the volunteers, you would find that you would require public dollars to pick up the slack of the vacuum that was created by that.

I suggest that at this time it is premature for such a motion as my honourable friend is suggesting and I am going to vote against it.

Ms. Gigantes: Very briefly in the remaining time, I would like to respond to a couple of the points that have been raised in a vague kind of way to try to murky the waters around what is a very clear issue.

The issue is simply whether we decide for the future that we are going to promote commercial services in the child care area. That is the decision that lies before us. We want to see accessible day care, we want to see affordable day care and we want to see quality day care in this province. It is a crying need.

The government has responded to that need. It looks as though it is going to take the wrong turn in terms of policy developments in this area and is going to promote the growth of the commercial provision of child care services to the children of this province.

When I speak against providing public funds to unaccountable commercial operators, over whom we have no control mechanisms now in terms of quality or finances, then I am accused of trying to withdraw existing services in the province. Not at all. The commercial sector in Ontario now gets $142 million from fees from parents and from subsidies from this government for people who cannot afford to pay the costs of putting their child in day care centres. It is $142 million. They are making a profit. Let them alone.

If we are going to promote affordable, accessible, high-quality care, we put public funding in the sector that we know we can have made accountable to the public, to the families and to the elected representatives, and that is the nonprofit sector.

The Treasurer introduces another canard. He again blames the municipalities of this province for interfering with accessible day care. He says they are not playing ball. He has said it before. It is not true. If you give $3 a day to a commercial operator, what you are doing is underlining the bad policy we have now, which creates geographic divisions. Municipalities should not have to pay for this stuff.

AUTO PACT

Mr. Speaker: Mr. Grossman has moved resolution 41.

Motion agreed to.

DAY CARE

Mr. Speaker: Ms. Gigantes has moved resolution 42.

All those in favour will please say "aye."

All those opposed will please say "nay."

In my opinion the nays have it.

DAY CARE

The House divided on Ms. Gigantes's motion of resolution 42, which was negatived on the following vote:

Ayes

Allen, Bryden, Charlton, Cooke, D. S., Gigantes, Grande, Grier, Johnston, R. F., Laughren, Mackenzie, Martel, McClellan, Morin-Strom, Philip, Warner, Wildman.

Nays

Andrewes, Baetz, Barlow, Bernier, Bossy, Brandt, Callahan, Caplan, Conway, Cooke, D. R., Cordiano, Cousens, Cureatz, Dean, Ferraro, Gillies, Haggerty, Jackson, Johnson, J. M., Knight, Lane, Mancini, Marland, McFadden;

McGuigan, McKessock, McNeil, Miller, G. I., Mitchell, Morin, Newman, Nixon, Offer, O'Neil, Partington, Pierce, Pollock, Polsinelli, Pope, Rowe, Runciman, Sheppard, Smith, D. W., Smith, E. J., Stevenson, K. R., Taylor, Turner, Villeneuve.

Ayes 16; nays 48.

The House recessed at 12:09 p.m.

AFTERNOON SITTING

The House resumed at 1:30 p.m.

Mr. McClellan: I have a point of privilege, Mr. Speaker. Courtesy would require that I wait until the Minister of the Environment (Mr. Bradley) arrives; so if I may, I will hold my point of privilege until the minister arrives.

MEMBERS' STATEMENTS

NATIVE FISHING AGREEMENT

Mr. Bernier: During the past several weeks, the newly formed association known as Tourism Northwest in northwestern Ontario has been very vocal and very successful in assisting the provincial native fishing agreement negotiator, Al Stewart, in promoting public educational meetings.

I want to inform the Legislature that on Tuesday evening, January 27, more than 800 people from the Dryden area jammed the legion hall to attend the so-called educational meeting on the native fishing agreement.

After repeated calls made directly to the Premier (Mr. Peterson) and to the Minister of Natural Resources (Mr. Kerrio) to attend these meetings personally, to listen to the public's concerns and to answer the many questions that are being raised constantly, answers that the civil servants cannot answer and should not be called on to answer, they have failed to appear.

Several more such public meetings are being planned in places such as Rainy River, Thunder Bay, Sault Ste. Marie, Sudbury, Chatham and Toronto. The ministers responsible for negotiating this native fishing agreement must be there as they, and only they, can answer the questions that are being raised.

I say to the Premier, the Attorney General (Mr. Scott) and the Minister of Natural Resources to stop hiding behind their senior civil servants and start attending these very important public discussions.

NORTHERN REGIONAL TREATMENT CENTRE

Mr. Laughren: In April 1986, the Minister of Correctional Services (Mr. Keyes) and his staff identified a need for a treatment centre in northern Ontario for northern Ontario inmates. In June, a public meeting was held, and since that time other meetings have been held and commitments made. We were led to believe that Sudbury was the preferred location for such a treatment centre. Since that time, after a series of meetings and commitments, some things have not changed.

First, Sudbury is centrally located. Second, Sudbury has the required psychiatric professionals necessary. Sudbury has the professionals in the school of social work at Laurentian University. Sudbury is prepared to provide a site at absolutely no cost to the Ministry of Correctional Services. Sudbury has a pool of bilingual professionals to help operate the centre.

As a result of a regional council meeting last night, there is unanimous consent that such a facility be located in the community. It was supported by the local aldermen, by the mayor, who lives in the immediate area of the preferred site, and by the entire regional council. At this point, the minister should be prepared to send staff up there to answer all the questions the residents have and to make a firm commitment.

FESTIVE HOLIDAYS

Mr. Morin: Today is the most important day of the year for the Chinese, Vietnamese and Korean communities in Ontario. The Chinese, Vietnamese and Korean calendars are based on the cycle of the moon and, according to the lunar calendar, today marks the beginning of a new year. For the Vietnamese community this will be the Year of the Cat and for the Chinese and Korean communities it will be the Year of the Hare.

In the Chinese, Vietnamese and Korean communities, New Year's Day is primarily a family affair. It is a time for visiting relatives and friends and for the exchange of greetings and good wishes. It is also a time to enjoy the abundance of delicious food that traditionally accompanies this celebration. The festivities can last for up to a week. The continued observance of these traditional celebrations not only adds another colourful facet to the Canadian cultural mosaic but also helps to preserve the customs and culture of an ancient heritage.

I am sure all members of this Legislature will wish to join me in extending our best wishes to the Chinese, Vietnamese and Korean communities as they welcome the hopes and challenges of a new year.

Je souhaite donc une bonne et heureuse année aux communautés chinoise, vietnamienne et coréenne.

CREDIT CARDS

Mr. Harris: The Treasurer (Mr. Nixon) will know that pretty sound fiscal policies from the federal government have allowed substantially lower interest rates for consumer and business loans in Ontario. This success has contributed to the economic recovery and it has contributed to growth in this province. I might add it contrasts sharply with some of the failed policies of the former Liberal government in Ottawa. It contrasts with some of the policies we see here in Ontario.

There is a major problem with interest rates. Today, when we will probably see prime rates down around 7.5 per cent, we are looking at credit-card interest rates as follows: Visa, 18.6 per cent; Bank of Montreal MasterCard, 21 per cent, and Royal Bank Visa, 18.6 per cent. We are looking at Imperial Oil charging 24 per cent; we are looking at Eaton's, 28.8 per cent.

In essence, what happens is that it is the poor who end up financing through credit-card interest rates and therefore it is the poor who are paying the credit-card charges for everybody, instead of a reasonable fee being charged for credit cards.

It has been said provincial governments cannot do much. Illinois has found a way of doing something. It has threatened to withhold its funds from companies that charge these interest rates.

The government can look at its purchasing policies and where it buys gasoline. There are a lot of things this Treasurer can do to help correct this problem.

AUTOMOBILE INSURANCE

Mr. Swart: In question period on Monday, I said the total profits of the Manitoba Public Insurance Corp. now stood at $54 million and there is $321 million in reserve investments against unpaid claims. The Minister of Financial Institutions (Mr. Kwinter) countered by saying, "The reserves in Manitoba are only $60 million." He said this in spite of the fact that he had a letter in his hand signed by the minister in charge of public insurance in Manitoba stating, "The funds for the investments total $321.2 million in the 1985 fiscal year."

I have here the 1985 annual report of the Manitoba Public Insurance Corp., which shows assets of $378 million and gives details of where $290 million of what the minister states is only $60 million is invested in public institutions. The minister provides the same kind of incorrect figures over and over again in the Legislature in his defence of the private auto insurance companies here against the far superior, driver-owned NDP public system in the west.

I suggest that even his slavish subservience to the giant private insurance companies here do not permit that kind of distortion. No wonder he does not want an investigation done to show the true comparison of the two systems. It would show, for all the world to see, how wrong he is.

NURSING HOME BEDS

Mr. Offer: I rise today to acknowledge and thank the Minister of Health (Mr. Elston) for his recent nursing home allocation in Mississauga. Mississauga will receive 100 additional nursing home beds over the next three years. The ministry will be issuing a request for proposals in the fall from those interested in operating 100 beds in Mississauga, either in existing or in new nursing homes, and the ministry will give preference to proposals from nonprofit organizations. This addition of nursing home beds was recommended by the Peel District Health Council.

As we know, the ill and the elderly want to stay in their homes as long as possible. The concerted efforts not only of the Minister of Health but also of the Minister of Community and Social Services (Mr. Sweeney) and the Minister without Portfolio responsible for senior citizens' affairs (Mr. Van Horne) for the introduction of the new integrated homemaking services demonstrates this government's commitment to home care. But the very success of the home care programs in helping to keep people at home longer means that many of those people tend to be older, with more serious health care problems when they finally need long-term institutional care.

We must be certain that the right mix of services is available in each community. With this increase in nursing home beds and, incidentally, the announcement last summer of an additional 200 chronic care beds for Peel, this minister and this government have moved to meet the challenge of combining home care needs with intensive long-term care.

WINTER CARNIVAL

Mr. Andrewes: In the brief time that is left. might I take the opportunity to invite all honourable members to the Jordan Lions winter carnival, which will be held this weekend. This is a unique festival in that it contains unique sporting events in keeping with the climatic advantages of the Niagara Peninsula. The proceeds, of course, go to worthy causes, and I look forward to seeing members there.

MEMBER'S ANNIVERSARY

Mr. Grossman: Mr. Speaker, on a point of whatever you might determine it to be, but with the consent of the House I should like to say a few words about our colleague the member for Elgin (Mr. McNeil), who is celebrating his 29th anniversary in the Legislature.

Mr. Speaker: I understand there is unanimous consent.

Mr. Grossman: Our colleague the member for Elgin joined this House on January 30, 1958 -- would members believe it? -- a mere 15 years into the period of time during which the former government had the pleasure of leading this province. He was first elected locally as member of the municipal council of South Dorchester, 1946 to 1948. I was riding a tricycle at the time, being, like the Premier (Mr. Peterson), two years old.

Mr. Wildman: Now you are on a treadmill.

Mr. Grossman: I later got a driver for my tricycle and I have missed it ever since.

He subsequently served as reeve from 1949 to 1952 and as warden of Elgin county in 1952.

As all members of the House will know, he has served with great honour, dignity and distinction. He has been one of those persons who I would say has always perfectly represented, in every way possible -- in his manner, his style, his caring -- the people he represents.

On this day, I should simply like to acknowledge his first 29 years in the House. Since he has only turned 67 last week, I would hope to be able to watch, long after my time in this House has finished, as he celebrates many, many more years serving his people as effectively in the future as he has for the first 29 years of his term in office here.

Mr. McClellan: On behalf of my colleagues, I would like to offer the congratulations of the New Democratic Party to our friend the member for Elgin for his stupendous achievement of 29 years in this place. I spoke last week about the strange accomplishment of the member for Brant-Oxford-Norfolk (Mr. Nixon) in keeping his sanity after a quarter of a century --

Mr. Rae: That is debatable.

Mr. McClellan: The member for Elgin has served with integrity and distinction for more than a quarter of a century. I do not think I am incorrect in saying he is the only Conservative left in southwestern Ontario. Am I wrong?

Mr. McNeil: Two.

Mr. McClellan: I gather there is another Conservative somewhere in southwestern Ontario.

The member for Elgin has always spoken eloquently from deep and convincing firsthand knowledge about the needs and aspirations of his constituents. We have always enjoyed listening to the contributions he has made to the debates in the House and in committee. He is a very well respected member of this assembly, and as he embarks on his second quarter of a century of service in this assembly, we wish him long life and happiness.

Hon. Mr. Nixon: It is a great pleasure to join with the Leader of the Opposition (Mr. Grossman), the member for Bellwoods (Mr. McClellan) and all the other members in offering our congratulations to the member for Elgin on the 29th anniversary of his election.

The two of us have often participated in debates in this House, and, like the member for Bellwoods, I have the greatest respect for the member for Elgin's experience and his ability to put forward the judgement based on that experience associated with his long-term responsibilities in his local community and particularly in the agricultural community. I have special reason to feel very warm towards our friendship. He graduated from the Ontario Agricultural College in 1942, about the same time my brother was a student there; so our association goes a long way back.

The member for Bellwoods indicated that the member for Elgin is one of the few Conservatives in southwestern Ontario, but it was not always thus. While I would say he is philosophically established in the right party, in his early days he was quite influenced by the great Mitchell F. Hepburn, who was also a representative from Elgin. He even messed around just slightly with the Liberals until better judgement put him on the straight and narrow, which he has followed ever since.

I have always had a feeling of some regret that the Liberals were not more aggressive in seeing that the member for Elgin was a candidate for us, but sometimes you miss out on the good ones. Anyway, we have had a long and pleasant association in this House, and I want to congratulate the honourable member on behalf of all my colleagues in the Liberal Party and to wish him well.

He has embarked on additional personal responsibilities in the past few months. Having met Mrs. McNeil, I can congratulate the member on his continuing good fortune. We are just delighted that he is healthy and, obviously, happy and effective here. We wish him many long years of happiness and community service, if not here, well, who knows where?

Mr. Speaker: I am sure the members wish to hear a few words from the member for Elgin.

Mr. McNeil: First, I want to thank the honourable members for their very kind words. I might say to the Treasurer (Mr. Nixon) that I did have a lot of respect for Mitchell Hepburn, because he was one of the most colourful Premiers this province has ever experienced and the only Premier who came from the great riding of Elgin. One of his greatest accomplishments was to bring an industry into Elgin that has served the people of Elgin for many years and will continue to do so, and that is the St. Thomas Psychiatric Hospital.

Hon. Mr. Nixon: That is available to everyone.

Mr. McNeil: Who knows? That may be a future home for the present member. There are people who probably would think it should be.

I might say the members' words are very much appreciated. I shall always cherish the friendship I have had with various members of this House, regardless of political affiliation.

Members might be interested to know that the by-election was called by the then Premier of the province, Mr. Frost, on January 30, 1958, to fill a vacancy that had been caused by the death of Fletcher Thomas in November 1957.

I know many of us are experiencing some very difficult times in the agricultural economy at present. It is rather interesting to note that during that election campaign a new system for selling flue-cured tobacco had been developed and was being used for the first time in the riding of Elgin, as well as in Norfolk, the riding of the member for Haldimand-Norfolk (Mr. G. I. Miller). There were growers who were not very happy with the new system, there were buyers who were not very happy with the new system and the sale of tobacco was discontinued -- really, it came to a standstill -- during the by-election.

It is also interesting to note that Mr. Frost, as Premier of this province, had never experienced losing a by-election, and it very much looked as though we would lose that by-election. He called all the interested parties to Toronto. They came to an agreement, tobacco started to sell and, fortunately, there was a good organization.

As the member for Sarnia (Mr. Brandt) said to me one time, "You must have an excellent organization." I said, "We certainly do." He said, "It would take one hell of an organization to elect you to nine consecutive terms."

Mr. Brandt: On a point of order, Mr. Speaker: I want to make clear to my colleague that I said it would take a good organization. I did not use that other word.

Mr. McNeil: I apologize to the honourable member, because I know that profanity is one of his specialties and it is his second language.

As the Treasurer mentioned the other day, the services we enjoyed back in 1958 were not quite what they are today. As the Treasurer said on that occasion, Mr. Frost said that every member was entitled to a desk, and that desk was right here. It was not anything unusual to come into the House in the morning and see various members of all political parties dictating to their secretaries, who belonged to a pool. I do not recall ever having any filing system. I guess if a member had a filing system, he had to take it home, because there was no office space here for files.

Members might be interested to know that when I was first elected, there were nine Progressive Conservative members at the immediate left of the Speaker, and then there were a few Liberal members -- not very many. There were three New Democratic Party members, and then there was solid blue there and solid blue over there. I have often heard people say something about the good old times. Those were good old times, I can tell members that.

One of the reasons for holding the by-election on a Thursday -- and at that time, the date of the by-election was set by the Premier, not by statute -- was that Mr. Frost did not like to have a by-election or an election on Monday, because it interfered with the housewives' washing. Wednesday was out because we had half holidays for businessmen. That left Tuesday and Thursday. Friday was out because otherwise the weekend would be upset.

The by-election was on Thursday, and the House went into session on the following Tuesday. At that time, members would be interested to know the member for Peel, who had been Premier of this province and Minister of Agriculture, the Honourable Colonel Thomas Kennedy, moved the speech from the throne, which was seconded by the father of the member for Cornwall (Mr. Guindon). I was going to say Stormont, but it is not.

Fern Guindon had been elected in September 1957 and was representing the riding of Glengarry. He was reselected in 1959. Then, in 1963, he ran as our candidate in Stormont, which is now the riding of Cornwall, and was elected as the member for the riding of Stormont.

I remember when he was making his last speech as the member for Glengarry, he said it would be the last time he would have the opportunity to speak as the member for Glengarry, on behalf of the constituents from Glengarry, but he said, "Mr. Speaker, I will be back." He was back. At that time, that riding was held by a Liberal, who made a great contribution to this province and who has since that time served as a director of the Ontario Plowmen's Association with distinction.

I would also like to mention that when I arrived, the fathers of two members who are here now were members of the Legislature at that time. The father of the Leader of the Opposition was the member for St. Andrew. Now, of course, that riding is St. Andrew-St. Patrick. He had been elected as a member in 1955. The father of the provincial Treasurer was here as the member for Brant. He had been elected to the Legislature in 1919. He had a very distinguished career as a member of this Legislature and served here for 42 years.

I well recall at one time the provincial Treasurer's father was making a speech in the Legislature. While he was speaking about a rather controversial subject, something about liquor, the fire alarm went off and we had to evacuate the building. When he returned he said he had made quite a number of speeches in the Legislature, but that must have been the hottest speech he had ever made.

During those days, it is rather interesting that all the work of the Legislature was done in the Legislature. The estimates of the various departments were all carried out in the Legislature. We met at three o'clock in the afternoon, recessed for dinner and then went until anywhere from 10:30 p.m. to one o'clock or two o'clock in the morning. It just depended on how we were getting along with the work of the House.

Members might be interested to know that the salary was not that high in those days, but we were getting a room at the Royal York Hotel, as the Treasurer said, for $5 a night, which was a pretty good rate. We were paid once a year, on March 31. We could make a draw before Christmas, if we applied for it, and most members did. I guess the reason was they thought we should have a very good Yuletide season. I will not tell the members how much the salary was, but it certainly --

Interjections.

Mr. McNeil: I think it was about $2,600 a year with, I believe, $1,300 for expenses.

Hon. Mr. Nixon: But you had to use it for expenses.

Mr. McNeil: It is rather interesting to note that in that first session the by-election was on Thursday, January 30, and the House opened on the following Tuesday. In that year, as some of the older members may recall, we had a very successful federal election on March 31. This House had adjourned 10 days before the federal election. At the time, it was always felt the session should take place during wintertime. I guess the preceding Legislature felt the same way. We always tried to get finished so that the farmers could be home for seeding. Those were the good old days.

I will conclude by saying I feel very fortunate to have had the opportunity of representing the citizens and constituents of the great riding of Elgin for all these years. I realize I have been fortunate to have sat in this House. It is a great privilege for anyone to have the opportunity of serving as a member of this Legislature. I hope I may continue.

I have had the opportunity of serving under four Progressive Conservative Premiers -- Mr. Frost, Mr. Robarts, Mr. Davis and the member for Muskoka (Mr. F. S. Miller). When the Treasurer was speaking, he mentioned I got married something like a year and a half ago. The member for Muskoka wondered whether I had become a father, and I can say I have not. I also now look upon it as a great challenge to be a member under the leadership of the present Premier (Mr. Peterson). He is very fortunate in the fact that his wife was raised in a very strong Progressive Conservative family.

Once again, I thank the members for their kind words and I look forward to the challenges that lie ahead.

PAPER MILL

Mr. McClellan: I indicated earlier I had a point of privilege to raise. I notice the Minister of the Environment (Mr. Bradley) has been in the House for some time and has not risen to his feet, so I will raise this matter of privilege. Yesterday, during question period, my colleague the member for Lake Nipigon (Mr. Pouliot) asked the minister a question about the status of negotiations with respect to Kimberly-Clark and specifically asked him for an update as to where the situation was at this time.

In response, the Minister of the Environment said at about 2:45 p.m., "I assure the member that discussions have taken place and are continuing...." This morning the leader of the New Democratic Party, the member for York South (Mr. Rae), spoke to Jack Lavallet, president and chief executive officer of Kimberly-Clark of Canada, and confirmed a radio report that discussions between Kimberly-Clark and the government had ended yesterday morning around breakfast time during a breakfast meeting.

Whether the minister was misinformed or misinforming is not for me to say. The fact remains that the House was given false information yesterday in response to a question from a member of my caucus on a matter that affects the fate of about 1,600 jobs. When they ask questions of ministers, particularly when they ask questions of such urgency and seriousness, members of this assembly are entitled as a matter of privilege to receive factual answers from ministers of the crown. That did not happen yesterday.

Mr. Speaker, I ask for your guidance as to what we are to do about this situation.

Hon. Mr. Bradley: I can understand how the member would come to that conclusion. I want to inform him that when I answered that question in the House, I indicated that discussions were continuing and indeed they did continue. There was a further discussion that afternoon, a communication that was made with the company at that time. I would not ever want to give information that would not be accurate to the member for Lake Nipigon, who has a very special interest in this. In fact, communication did continue.

Mr. Rae: For the record, if the minister is not prepared to fess up to what has taken place, not only yesterday but also during the past number of weeks, he may choose to remain in his position, but I do not see how anybody in this House can seriously ask him questions and take what he says at face value. The answer he gave in the House was an answer that could only be construed as leading to a different conclusion from the facts as we now understand them from conversations we have had with other parties.

Ms. Fish: On the same point, I wish to associate this side of the House with the remarks that have been made by the New Democratic Party House leader and by the leader of the third party. It is perfectly clear that references to talks having occurred and continuing lead to one possible conclusion, namely, that active discussions are under way, not that there is a communication one way that might occur some hours after the question has been answered when it is clear the discussion and negotiations have broken off. It is a very serious circumstance when a question of fact is answered in what is clearly not a factual way by the minister.

Hon. Mr. Bradley: If