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December 12, 1977

31st Parliament, 1st Session

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Hansard Transcripts

Hansard Transcripts

L076 - Mon 12 Dec 1977 / Lun 12 déc 1977

SUPPLEMENTARY ESTIMATES

STATEMENTS BY THE MINISTRY

HYDRO REPORTS

ORAL QUESTIONS

NUCLEAR CONTROL BOARD

URANIUM PRICES

AIRPORTS

SALTFLEET HOUSING

NURSING HOMES

MOUNT OLIVE OHC PROJECT

NATIONAL ECONOMY

INDUSTRY LAYOFFS

THUNDER BAY COURTHOUSE

TRAIN SERVICE

TEACHERS’ SUPERANNUATION FUND

ALUMINUM WIRING

OGOKI LODGE

NURSING HOMES

TRAIN SERVICE

INTERMEDIATE CAPACITY TRANSIT SYSTEM

SCHOOL BOARD BUDGETS

POLLUTION BY PULP AND PAPER COMPANIES

DOUGLAS POINT PROJECT

THUNDER BAY COURTHOUSE

MOTION

SUPPLEMENTARY ESTIMATES

INTRODUCTION OF BILLS

LEGISLATIVE ASSEMBLY AMENDMENT ACT

LEGISLATIVE ASSEMBLY RETIREMENT ALLOWANCES AMENDMENT ACT

ORDERS OF THE DAY

THIRD READING

ESTIMATES, MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS (CONCLUDED)

COMMITTEE OF SUPPLY

The House met at 2p.m.

Prayers.

SUPPLEMENTARY ESTIMATES

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

Mr. Speaker: By her own hand, P. M. McGibbon, the Honourable the Lieutenant Governor, transmits supplementary estimates of certain additional sums required for the services of the province for the year ending March 31, 1978, and recommends them to the Legislative Assembly, Toronto, December 12, 1977.

STATEMENTS BY THE MINISTRY

HYDRO REPORTS

Hon. J. A. Taylor: I am today tabling 11 detailed reports from Ontario Hydro on the present status of the implementation of the recommendations of the select committee which reviewed Ontario Hydro’s 1976 bulk power rates.

On November 9, 1976, the Legislature adopted the government’s response to the report of the select committee. In that response, a commitment was made to provide periodic reports regarding the implementation of the select committee’s recommendations.

Those items being tabled today are: a

summary report, and reports on load forecasting, load management, energy conservation, system reliability, system planning, by-product heat, solar energy, small hydraulics, and capital expenditure guidelines. These reports pertain only to Hydro’s action in each of these areas.

Later this week, I expect to table a separate report on bulk metering.

ORAL QUESTIONS

NUCLEAR CONTROL BOARD

Mr. S. Smith: I would like to ask a question of the Premier. Could the Premier comment on the matter referred to in the Minister of Energy’s statement to the House on Friday that there has been, on behalf of the federal government at least, no really meaningful consultation on the energy-related matters to be dealt with by the proposed federal Nuclear Control Board? Does he share with the minister and with myself the grave misgivings about that and what is the Ontario government’s present intention with regard to this particular bill before the federal House?

What strategy will the government follow now in terms of trying to be sure that our interests are well taken care of? For instance, has he any aggressive steps in mind such as the need for an Ontario submission to the parliamentary committee considering the bill? What action will be taken?

Hon. Mr. Davis: Mr. Speaker, I think that question more properly should be directed to the Minister of Energy if the Leader of the Opposition would like a more definitive response.

Mr. S. Smith: With respect, and by way of supplementary, given the fact that in the minister’s statement he points out that ministries other than Energy are involved, including Environment, Labour and certain others, and given the apparent reference in the statement to the federal government’s refusal to do very much, has the Premier considered what will happen to our own Environmental Assessment Act, just as an example?

If hearings are going to be held under the Nuclear Control Administration Act, federally, are we going to duplicate those hearings or are we simply going to give up our area of jurisdiction? Shouldn’t the Ontario government be planning, under the Premier, a very aggressive stance in this regard?

Mr. S. Smith: By way of a brief supplementary, would the Premier then be saying to this House that, irrespective of the existence of the Nuclear Control Board and its series of hearings, we are going to duplicate that whole series of hearings at the provincial level with regard to both energy and environmental matters? If so, surely it would be more advantageous to press for a federal-provincial single board rather than go through the whole procedure twice.

Hon. Mr. Davis: I think one would have to get into a specific case before one could discuss this. I hope there would be no duplication in terms of the kinds of review that might be held, but it could be that a review under the proposed federal legislation might be of a different nature. I think one would have to get into a specific proposal before one made that determination.

I certainly would oppose any duplication of effort, but at the same time we are very anxious that our own legislation be observed. I am quite optimistic that will be the case and they will not be fulfilling the same function.

URANIUM PRICES

Mr. S. Smith: I will ask a second question of the Premier.

Is the Premier aware of a letter to the Globe and Mail from Chairman Taylor of Hydro in which Chairman Taylor says, with regard to the possibility that Hydro may have been a victim of the uranium cartel in its contract with Gulf Minerals: “In the meantime, for specific information about the effects of the cartel, we, too, depend on evidence given in a foreign courtroom hundreds of miles away”?

Given the importance of this to Ontario’s ratepayers, does the Premier not think this is somewhat ridiculous? Can he not use his office to try to obtain information from the federal government with regard to whether this domestic producer was, in fact, involved in having to pay higher prices because of the cartel?

Mr. S. Smith: By way of supplementary, since the letter says that “if it turns out that Hydro was the victim of improper pricing arrangements, then we will seek redress in the courts if necessary,” and given the importance of this as well as the fact that Hydro is still allegedly a child of the provincial government, what I’m asking is whether the Premier is making any effort to find the information from the federal government that pertains to this, or are he and Hydro simply watching for “evidence given in a foreign courtroom hundreds of miles away.” It surely is important for the ratepayers of Ontario.

Mr. S. Smith: Just a brief final supplementary: Has Chairman Taylor asked this government to obtain information from the federal government for Hydro’s purposes, rather than depending on these news reports from Sante Fe or wherever?

Hon. Mr. Davis: I can’t say whether he’s inquired of the government. He certainly has not inquired of me.

AIRPORTS

Mr. Deans: Mr. Speaker, I have a question for the Minister of Transportation and Communications. What involvement does the ministry have with the federal government in determining the location and the suitability for the development of airports outside of Metropolitan Toronto to meet the needs of the immediate Metro area?

Hon. Mr. Snow: Mr. Speaker, I might say that the federal government on occasion has asked for input from the province of Ontario with relation to expansion or improvements to federal government airports. I’m not sure what airports or what type of airports the hon. member is referring to. We work with municipalities in the development of municipal airports. The ministry directly develops a number of airports in the unorganized territories and the remote north.

Mr. Deans: That’s not in Toronto.

Hon. Mr. Snow: In certain instances, such as, I believe, Windsor and Hamilton and perhaps London, joint committees were established where the provincial ministries of Agriculture and Food, Environment and Transportation and Communications represented and had input and recommendations to make to the joint committees studying those locations.

Mr. Deans: Let me help the minister. In the case of the Hamilton area airport, was there any calculation done by the Ministry of Transportation and Communications in Ontario to determine, first of all, the need; secondly, the overall cost; and, thirdly, whether or not it might be more practical and sensible to develop a ground transportation system which would allow people in that immediate area to gain access to the existing airport facilities, which they ultimately will need to use in any event, rather than to expend many tens of millions of dollars building an airport which may well turn out to be a hazard rather than a help?

Hon. Mr. Snow: I believe the study relating to the Hamilton airport was initiated by the Minister of Transport, Canada, and I believe there was some encouragement from the municipal representatives who were interested in having an improved airport facility in Hamilton. As I recall, quite a broad study took place where alternative locations were studied as to whether the airport should be improved at its present location or at alternative locations.

Mr. Deans: I am not worried about that.

Hon. Mr. Snow: I do not believe my ministry was involved in any discussions or estimates as to cost because we would not be involved, cost-wise. Any cost estimates, if there have been any carried out, would be done by Transport Canada.

[2:15]

Mr. Deans: I have a final supplementary question. Would the minister consider reviewing the practicality of putting an airport in the Hamilton area, less than 40 miles from the existing Metropolitan Toronto airport, given that much of the traffic would have to be transferred, in any event, by ground transportation from that airport to the international airport?

Would he consider the possibility of developing the GO Transit from Hamilton, St. Catharines, Brantford to Toronto with connections to the airport here in order to both save the taxpayers money and to provide a much more sensible and rational airport development project?

Hon. Mr. Snow: I’m sure all of these things will be considered as part of our overall study being carried out with Transport Canada on the passenger transportation needs for southern Ontario. I’m not sure which airports the hon. member is suggesting that GO Transit connect to, but I’m sure he must be aware that the facilities in Malton certainly are taxed to their limit at the present time.

Mr. Deans: I’m talking about Hamilton.

Would the minister allow one more final supplementary? I hadn’t intended to ask one. But would he not agree it is not possible to run parallel service to Toronto and to Hamilton and that there is the need for ground transportation to move passengers from the Hamilton airport to the Toronto airport or from the Toronto airport to the Hamilton airport? Would the minister not agree that it would be more sensible to simply provide suitable ground transportation in the first place?

Hon. Mr. Snow: I wouldn’t necessarily jump to any conclusions in that agreement. I don’t think it’s necessary because there are two airports. Hamilton airport is served now by a regional carrier, limited though it may be. Since the report of the committee and since the resolution of the region of Hamilton-Wentworth, I have not had an opportunity to discuss this development with the federal minister.

Mr. Cunningham: Through a supplementary, I would like to ask the minister if his ministry officials have conducted any kind of study on the ramifications of the Mount Hope airport expansion on Highway 6, running south from the city of Hamilton?

Hon. Mr. Snow: One of the considerations that will have to be given to any changes in the Hamilton airport, even as it exists at this time, is improved highway connections to the airport. One of the items listed in the resolution of the Hamilton-Wentworth regional council, which I received a few days ago, was that we be involved with improved transportation to the airport. Whether it be by Highway 6 or some other artery remains to be seen.

SALTFLEET HOUSING

Mr. Deans: I have a question of the Minister of Housing which flows from a question I asked last week and which he answered in part.

Last week I asked whether he would review the conditions of some of the houses built by Pomore Construction in the Saltfleet Satellite City. I want to ask whether he would arrange to meet immediately with Pomore and with Mr. Art Jerome of his ministry because there seems to be some conflict as to what role the ministry can play in bringing about the resolution of the many problems that confront almost all of the residents who purchased from that particular builder. Does his ministry have any power at all? I suppose that’s what I’m asking. He says the ministry doesn’t have any power. Does it?

Hon. Mr. Rhodes: If a meeting with the company and my staff would help to resolve the problem, I would be quite content to have the meeting. As far as power is concerned, we have held back some payment to that company as it relates to the problems the hon. member has mentioned. If he feels a meeting would be advantageous, yes, I would certainly convene a meeting.

Mr. Deans: Supplementary: Does the minister recognize in what he is doing a pattern that has been established over years? He delays and procrastinates time after time until there’s no way to deal with the builder because ultimately he goes bankrupt. Will the minister please make it clear to the builder that either he completes the work by November 16, as he promised he would, or the ministry will move in and do the work and bill him?

Hon. Mr. Rhodes: We are attempting in a number of projects around this province to make sure that the buildings are completed to the specifications required when the project was started. Certainly it’s true that we have experienced in the past, and probably will in the future, cases where the particular contractor, for whatever reason, finds himself in some financial difficulty. Certainly we could go ahead and do the work, and bill the particular contractor, I suppose, but if that particular contractor is bankrupt, then the total cost for such work would fall on to the ministry, because I have no more capability to recover from a bankrupt builder than anyone else does.

Mr. Deans: Supplementary: Doesn’t the minister feel some sense of responsibility to people who purchased under his Home Ownership Made Easy program and apparently expected to get, and quite rightfully so, a building that would be substantially completed and sound? Doesn’t he feel that in the long run it is his ministry’s responsibility to make sure that in fact the buildings are completed and to protect the individual purchasers who have no way of getting back at the builder? In this case we have had promises from May of this year right through until today --

Mr. Speaker: The question has been asked.

Mr. Deans: -- without a single piece of work being done.

Hon. Mr. Rhodes: I would be quite happy to convene the meeting the hon. gentleman has suggested. If there is any way we can resolve the problem, I will be quite happy to do so. I don’t expect people --

Mr. Deans: It’s a farce; the minister knows it is a game.

Mr. Speaker: The question has been asked.

Hon. Mr. Rhodes: I can do no more than to offer the hon. member my willingness to co-operate and to do what I can to solve the problem. If the hon. member insists upon stating that we are not doing our job properly and that it is nothing but a farce, he doesn’t make it very easy for us then to go along with his particular suggestion.

Mr. Deans: You have gone for seven months and nothing has happened.

Mr. Speaker: Order. There are far too many private conversations going on. It is extremely difficult to hear.

NURSING HOMES

Mr. McGuigan: Mr. Speaker, I wish to ask the Minister of Health when there will be a decision about the awarding of a nursing home in Kent county? Proposals were requested by his ministry last summer.

Hon. Mr. Timbrell: Mr. Speaker, I understand that is down to the final stages, although I wouldn’t expect anything for a few weeks yet.

Mr. Makarchuk: The member for Lambton (Mr. Henderson) should put a little life into them.

Hon. Mr. Timbrell: If the hon. member is referring to the 60-bed unit, he may recall that was previously all set, in that one of the hospitals was going to take it on, but then they got out of it. That has really put us back a long way, but I expect that should be wrapped up in a few weeks’ time.

Mr. McGuigan: Supplementary. Would the minister consider splitting up that award of 60 beds among the existing nursing homes that have far less than 60 in their complement at the present time?

Hon. Mr. Timbrell: Now that we have gone this far in putting out a proposal, unless they have put in proposals to that effect, I am afraid the answer would have to be no.

Mr. Ruston: Supplementary: In regard to the nursing home applications in Kent county, has any decision been made as to what the new nursing home licence fee will be? Is the one that has been batted around of $5 a bed in effect as of yet, or has the minister made a decision?

Hon. Mr. Timbrell: I don’t see that’s a supplementary, Mr. Speaker. I will be glad to answer it, though. The licence fee is under consideration and no final decision has been made.

MOUNT OLIVE OHC PROJECT

Mr. Philip: Mr. Speaker, I have a question of the Minister of Housing. Can the minister inform the House of the cost to date and the anticipated cost of renovations to the Mount Olive OHC project?

Hon. Mr. Rhodes: Mr. Speaker, I don’t have that information with me. I would be glad to get it for the hon. member.

Mr. Philip: Would the minister be willing to supply that information before the House recesses? Also, would the minister at that time either confirm or deny the rumour that these renovations, which are upwards of $250,000, have not been offered for tender?

Hon. Mr. Rhodes: I will attempt to have the answer for the hon. member tomorrow, and I will look into the second question he has asked.

NATIONAL ECONOMY

Mr. Yakabuski: Mr. Speaker, I have a question of the Premier --

Interjections.

Mr. Yakabuski: I’ll have to wait till they’re through, Mr. Speaker.

In view of the fact that over the years the federal government has been very reluctant to turn over the smallest amount of power to the provinces, and in view of the fact that Mr. Trudeau has been jetting from provincial capital to provincial capital selling his new deal to the provinces, whereby he’d turn over a greater share of managing the economy to the provinces --

Interjections.

Mr. Yakabuski: -- does the Premier not feel that this in itself is an admission of how the economy is being mismanaged by the federal government in Ottawa?

Mr. Bradley: The Premier is embarrassed by your question.

Mr. Yakabuski: Also, does the Premier not feel that the sly old fox from Ottawa may be trying to con the provinces?

Interjections.

Mr. Speaker: Let’s have some order.

Hon. Mr. Davis: Mr. Speaker, I want to say at the outset how I appreciate such a totally objective question coming from the hon. member. It certainly reflects no partisan bias on his part; if all questions in this House were as objective as that, my task would be far simpler.

I would say that the Prime Minister has been visiting all of the provincial capitals and discussing a number of issues with the Premiers. The Premier of this province has, for some months, been attempting to have the federal government come to grips with the economic issues of the day and suggesting that a first ministers’ conference related to the economy was essential.

Of course, I have to say that I’m delighted that the Prime Minister has finally accepted this guidance from the province of Ontario.

Mr. S. Smith: This is nonsense. Now you just pray you can find an idea to tell him at that meeting.

Mr. Breithaupt: That’s what your deficit is all about.

Hon. Mr. Davis: I notice they’re not applauding. I’m surprised. However, I do say this, I welcome this opportunity of discussing this issue with my fellow first ministers and with the Prime Minister, because I’ve said for some months the time has come for this province and this country to have national economic objectives.

Mr. Nixon: That’s good stuff: “the time has come.”

Hon. Mr. Davis: We must put our creative minds to work to see if something can be specifically accomplished, and I hope that something of this nature will emerge at the first ministers’ conference in February 1978.

Mr. Peterson: Supplementary to that goofy question, Mr. Speaker: Does the Premier have any specific job creation proposals to take to that first ministers’ conference, and if he has, what are they?

Mr. S. Smith: He’s taking his deficits and his camera.

Hon. Mr. Davis: Mr. Speaker, I say to the Leader of the Opposition, I have no camera. I don’t even know how to run one.

Mr. Foulds: You don’t know how to run a government either.

Hon. Mr. Davis: I have a tennis racket. I don’t use it so well, but I have one of those; I don’t intend to take that to the conference with me either.

Mr. Speaker: That wasn’t the question that was asked.

Hon. Mr. Davis: No, it wasn’t.

Mr. Eakins: You don’t even know when the ball is in your court.

Hon. Mr. Davis: Oh, I always know when it’s in my court. The skill of this game is getting it back into their court with some degree of regularity, which I attempt to do.

I would say to the member for London Centre (Mr. Peterson) that I expect a number of provinces will have some suggestions, and certainly, prior to our meeting in Ottawa, I’d be delighted to share with him any creative suggestions from the province of Ontario -- not on a confidential basis. However, at this specific moment what we will be presenting in Ottawa on the 13th, or whatever date, I am not in a position to disclose at this moment.

[2:30]

INDUSTRY LAYOFFS

Mr. B. Newman: Mr. Speaker, I have a question of the Minister of Labour. In the light of the increasing number of unemployed, now listed at 10,287 as of the end of November 1977, an increase of 98 over the previous month, has the minister been informed by industry of any contemplated layoffs or shutdowns in the Windsor area?

Hon. B. Stephenson: In the past week, Mr. Speaker -- I would like that qualification -- I have not had any further notification of any proposed shutdowns or layoffs.

Mr. B. Newman: Supplementary: Will the minister inquire of industry and find out how many are involved, whether the involvement is either temporary or permanent, and the period of shutdown or layoff they contemplate?

Hon. B. Stephenson: Of those which we have been notified we do just that; and we shall be prepared to inform the House.

Mr. Makarchuk: Supplementary: Has the minister received any indications of any layoffs anywhere in the province?

Hon. B. Stephenson: Mr. Speaker, I would have to ask if the member means in the past week.

Mr. Makarchuk: That’s right.

Hon. B. Stephenson: Yes, one of which this House was apprised -- Niagara-on-the-Lake.

THUNDER BAY COURTHOUSE

Mr. Foulds: Mr. Speaker, I have a question of the Minister of Government Services with regard to the Thunder Bay provincial courthouse. Can the minister give us an up-to-date report on the current status of the provincial courthouse in Thunder Bay? For example, is the ministry continuing to pay rent for the building, if not to the builder, John H. McCormick Limited, but to Royal Trust? If so, how much and at what rate?

Could the minister tell us what specific plans the ministry has for making the building -- in his term -- salvageable? Is it true that his ministry is planning to fill the basement, which is now the lockup, full of concrete and to build an annex on the back of the building for a lockup?

Hon. Mr. McCague: Mr. Speaker, there are a tremendous number of questions in that one question; maybe I should take it as notice and get the answers.

Mr. Foulds: Just three.

Mr. Speaker: The hon. minister said he will take it as notice.

Mr. Foulds: On a point of order, Mr. Speaker, if I might: I have raised these questions previously. The minister has not yet replied.

Mr. Speaker: There is really no point of order. The hon. minister can answer the question in any way he deems proper.

TRAIN SERVICE

Mr. Maeck: Mr. Speaker, I have a question of the Minister of Northern Affairs regarding the Northlander. I would like to know if he would advise the House what percentage of seats are filled on the Northlander, which runs from Toronto to North Bay? I would also like to know what the Ontario Northland Transportation Commission has done regarding advertising the Northlander, particularly here in southern Ontario, in an effort to have more passengers on the train?

Hon. Mr. Bernier: Mr. Speaker, as I am sure the hon. member is aware, the Northlander trains are operating between Toronto, North Bay and Timmins on an experimental basis to ascertain both the amount of passenger acceptance and the operation of that particular type of train during winter conditions. We have just completed a review of the number of passengers operating on the Toronto-North Bay run and that figure stands at about 23 per cent at this point in time.

With regard to advertising and promotional programs, that is something we embarked upon when the experiment first started. It may well be that this should be accelerated and it is certainly something that I will look into.

Mr. Maeck: Supplementary: I wonder if the minister would give me his viewpoint as to whether he feels the train from North Bay to Toronto has already run long enough to be able to assess whether it is going to be successful or not?

Hon. Mr. Bernier: One of the problems we have with the operation of that particular train, and the other trains operating between Toronto and North Bay, is the excessive cost applied to us by the CNR. As you know, they have been assessing us $13 a mile on that particular run. This is adding to the extra cost over and above our regular losses that occur on that particular run. In answer to the hon. member’s question, I do think that once we get past the next few weeks, we will have some real valuable information on which to make a decision.

Mr. Kerrio: Give it to Greyhound.

Mr. Eakins: Supplementary: I personally feel that the Ontario Northlander offers an excellent service, but why is only French wine served on board? Why do they not follow the example of the Minister of Correctional Services (Mr. Drea) and at least give the people an option of enjoying Ontario wine? Why not?

Mr. Havrot: Why don’t you talk to CN? Talk to the federal government.

Hon. Mr. Bernier: I have not had the opportunity of riding that particular train and enjoying the fine service that the members refer to. Obviously we should be serving Ontario wines. I’ll certainly look into it and make sure that the excellent bouquet from the Welland and Niagara areas is made available on our trains.

Mr. Makarchuk: Supplementary: Can the minister give assurance at this time that he will not lay off any dining car personnel on the train until such time as he has carried out the promotional program? The second part of the question is, would the minister assure us that when he negotiates the contract with the CNR, he charges them an equivalent rate per mile for rail use as they charge the ministry?

Hon. Mr. Bernier: The negotiations with the CNR have been ongoing for several months now. As I pointed out earlier, this is an experiment; so I couldn’t give the assurance that the hon. member is looking for.

Mr. Bolan: Supplementary: Do we have the minister’s assurance that the Northlander will not be discontinued in view of the great expenditure made by his ministry and by the government for the establishment of this service?

Hon. Mr. Bernier: The conventional train, to which I believe the earlier member was referring, is still in place and will remain in place on suggestion from the CTC. As the member well knows, the VIA operation comes into place on April 1. So we have no intentions of changing that particular service.

I would also point out that the experiment which was announced prior to the implementation of that particular service, an experiment for a daily service between Toronto and Timmins, will certainly not be affected in any way by any decision we make.

TEACHERS’ SUPERANNUATION FUND

Mr. Van Horne: A new question, of the Minister of Education: Does the minister recall having said on July 7: “We will structure or make arrangements in the fall when we come back to have the Teachers’ Superannuation Commission here, because I really want you to have an opportunity to discuss with them the whole superannuation matter.” If he does recall that, could the minister tell us what progress has been made in making these arrangements?

Hon. Mr. Wells: I would be most happy to have the Teachers’ Superannuation Commission come before the social development committee of this Legislature, and I will make any arrangements necessary to have that occur. However, the arrangements should be made by the chairman and the members of the committee, and I am waiting for them to let us know when they would like this procedure to be followed through. I gather the committee has been tied up with estimates since this House began sitting in the fall.

Mr. Van Horne: Supplementary: Again I quote the minister: “Could I suggest ... that we will structure or make arrangements ... ” I am sure that the members of the committee understood that the minister would assume that responsibility. Now, if it is up to the chairman, I am sure we can pass that on to him. In the light of the miscalculation of more than $102 million and our expressed concern, surely that arrangement could have been started?

Secondly, I would like to ask the supplementary: When and if we do meet, would the minister assure us that the Treasurer (Mr. McKeough) will attend this meeting?

Hon. Mr. Wells: My friend said, “the miscalculation of $102 million.” Let’s get that straight; there has been no miscalculation. If he had taken the trouble to read what has been said in this House --

Mr. Van Horne: I have taken the trouble. Look at the supplementaries we are doing this afternoon.

Hon. Mr. Wells: -- and to understand how the teachers’ superannuation fund is operated, he would realize that an actuarial valuation of the report having been received, and following the guidelines and the regulations of the Pension Benefits Act of this province, it is incumbent on us to put in $114 million more.

Mr. Van Horne: For the simple reason that the original estimates were wrong.

Hon. Mr. Wells: There has been no miscalculation; we are merely following the laws that pertain to pension plans.

Mr. Van Horne: What would you call a $102-million shortfall?

Hon. Mr. Wells: My friends are very exercised on this. They don’t seem to realize we are going to have an opportunity to discuss this in committee this afternoon. I do not know what prompted them to bring this particular question up here. We are going to have plenty of opportunity to discuss how and why another $102 million has to be voted for the teachers’ superannuation fund this afternoon, and that can be done in committee this afternoon.

As I said before, the arrangements for the Teachers’ Superannuation Commission to appear before the committee of this Legislature are up to the committee. I have offered my offices to make arrangements for that appearance at any time the committee wishes. All it has to do is give us the dates and we will make arrangements for the commission to be there.

Hon. Mr. McKeough: Eminently sensible.

Hon. Mr. Davis: A great group of people.

Mr. Peterson: Supplementary: In response, the minister said this was not a miscalculation. On the other hand, the minister only found out about it after the budget was issued. Would he not agree that he should have known prior to the budget about this very major new expenditure that had to come out of his ministry? Is the minister sufficiently satisfied that he knows the figures for next year, the year after that and the succeeding years?

Hon. Mr. Wells: First of all, I say to my friend, who fancies himself to be much more up on economic matters than I do, that I give him more credit than to ask a silly question like that, because he knows that we did not have the actuarial valuation before the budget was structured and presented in this House and that it is quite proper, having received that actuarial valuation, to come in with this supplementary estimate. It has been done here for years.

Mr. S. Smith: You knew the ballpark and waited until after the election.

Hon. Mr. Wells: The Leader of the opposition is crazy in that remark --

Hon. Mr. Davis: He would transfer that to the municipalities and put it on the property tax.

Hon. Mr. Wells: He knows that is not possible and that the actuarial report was not available before the election.

Interjections.

Mr. Speaker: No further supplementaries are necessary.

[Later]

Hon. Mr. Wells: Mr. Speaker, on a point of order just to correct the record: As I thought back to the last exchange I had with my friends from the opposition, I think I may have inadvertently said that the Leader of the Opposition was crazy. I, of course, would not want to be associated with a remark like that and would withdraw it. What I meant was that the idea he put forward was a crazy idea, about us having the report.

ALUMINUM WIRING

Mr. Warner: Mr. Speaker, I have a question for the Premier. Does the Premier intend to implement the three reasonable initiatives which were presented to him on Saturday by some concerned residents of his riding so that people who live in aluminum-wired homes can live with some assurance of safety? Further, will he demand that Ontario Hydro start conducting itself properly at the aluminum wiring inquiry or simply terminate the hearings?

Hon. Mr. Davis: Mr. Speaker, in that I was somewhat involved in suggesting that this inquiry be established, I have no intention of terminating it. I would like to think the member opposite, in the interests of his constituents, some of whom face the same concerns, would himself not be suggesting that it be terminated. I think that would be highly irresponsible.

As his question relates to the three suggestions that I discussed with certain of my constituents on Saturday, I am reviewing those and having them reviewed and I will have a response to them some time fairly soon.

Mr. Warner: A supplementary in two parts: Could the Premier then share that response with the House? Secondly, does the word “charade” best describe what Ontario Hydro has been doing at the inquiry by having submissions screened ahead of time and cross-examining witnesses instead of simply presenting the information which it has and allowing the legal counsel for the inquiry to ask questions?

[2:45]

Hon. Mr. Davis: I think the hon. member, if he studied this carefully and checked the Public Inquiries Act, would find that under the provisions of that Act it has been a procedure followed in any commission that I am familiar with that people appearing before that commission do have the right to have counsel. They do have the right to cross-examine. It’s the same right that the member would insist be given in some other situation.

I have not been at any of the hearings. I don’t intend to attend the hearings in that I expect out of this commission will come certain recommendations which may or may not have application to government policy. They may relate to Hydro or to the Canadian Standards Association or to a number of other organizations. I think it’s only proper I remain as objective as I can, at the same time sharing the concern I have felt for my constituents for some months now.

I would say to the hon. member, if he wishes to inquire of me after I have communicated to my constituents, I might share that information. I was presented with this proposal in my home on Saturday morning around 10:30 or 11 o’clock. My custom in dealing with my constituents, perhaps unlike the hon. member’s, is that I intend to reply to them before I say anything here in the House.

OGOKI LODGE

Mr. Eakins: To the Minister of Agriculture and Food: In view of payments by this government totalling at least $194,000 to the Whitewater Wilderness Lodge, and in view of more revelations today from its DREE partners about mismanagement in the project, would the minister now consider it his responsibility to table all reports and audits done on the project?

Hon. W. Newman: I missed the first part of the question. How much money did the hon. member say we had in the project?

Mr. Eakins: A total of $194,000.

Hon. W. Newman: First and foremost, that is not accurate.

Mr. Ruston: How much is it?

Hon. W. Newman: Mr. Speaker, I know you’re as familiar with this area as anyone. This is a project which was devised by the native people and built by the native people with native help. I’d like to set the record straight on this because I think it’s important. I have a few notes on it. Members of both parties over there sometimes wonder what’s happening. We’re trying to work out something for our native people. I’m surprised the members are questioning all these things in the House.

I’m only too glad to give them the facts as they are because I think it is very important --

Interjections.

Mr. Speaker: Do you want an answer to the question?

Hon. Mr. Bernier: Are members opposite for it or against it?

Mr. Speaker: The minister is attempting to answer, I believe.

Mr. Reid: He’s failing miserably at it.

ARDA was the financing vehicle for the program, whereby special federal funding could be provided. A grant was authorized for the construction of the lodge and was made to an Indian organization called Ogoki River Guides Limited. ARDA, in fact, became considerably more involved in the administration of this project when it became apparent the costs were exceeding the original estimates. As a matter of fact, the costs to build this project per square foot are comparable to buildings elsewhere in the province of Ontario and in Metropolitan Toronto.

Mr. Kerrio: Like Minaki Lodge?

Hon. W. Newman: I would like to point out that 80 per cent of the Indians employed on the project previously were dependent on welfare payments. During the three-year construction period, they were productively employed and taken off welfare rolls. Further, this project gives them an opportunity to be productively employed in the future for guides and services. Irresponsible and adverse criticism of the project only undermines the great potential of our native people up there. That’s the way I feel about it.

Mr. Breithaupt: What about the audit?

Mr. Eakins: Supplementary: I don’t feel that questioning the spending on this project and the way it has turned out is being irresponsible. I think that’s our duty.

Mr. Speaker: You said you had a question?

Mr. Eakins: Over three years there was $100,000 from ARDA after the federal commitments, $14,000 from Culture and Recreation and $80,000 in 1976 for business management, which comes to $196,000. In the light of a DREE official’s comment that the initial estimates for the Ogoki lodge were deliberately underestimated by the grant applicants, can the minister say whether his ministry made its own determination of costs, and could he describe in detail what factors were included in such an investigation?

Hon. W. Newman: I think many of those questions have been answered. If the member checks Hansard of last week, I did give some figures in the House. As I said before --

Mr. Eakins: Does the minister agree with the $194,000 figure?

Hon. W. Newman: No, not out of ARDA funds; absolutely not. Out of ARDA funds there was $80,000 to $90,000. Check the records.

Mr. Eakins: I said government funds.

Hon. W. Newman: All I’m pointing out is that under the Ministry of Agriculture and Food, the ARDA program is the vehicle used to try to help our native people, and the member sure doesn’t help them by asking questions like that. Out of the funds that were involved, approximately $1 million went to build the lodge and the cost per square foot was about $53 a square foot. I’ll say it’s a pride to have it there. I’ll also say that the $80,000 in ARDA funds which we put into the initial construction costs was money well spent. Let’s give those people a chance to operate this lodge this coming year without trying to make it difficult for them.

Mr. Makarchuk: Supplementary: In view of the fact that he provided jobs to get native people off welfare, would the minister consider making representations to other members of the cabinet to ensure that we get non-native people off welfare by providing them with jobs?

Hon. W. Newman: That’s a very inappropriate question for me, except that I would like to point out that this government did supply money to my ministry last summer to create jobs --

Mr. Reid: One guy from New Zealand got a job.

Hon. W. Newman: -- and we did create a lot of jobs in this province and there is still some of that money being used to create jobs. Don’t forget that.

Mr. Nixon: Nobody knew anything about that program -- not even the electors. The government didn’t even sell that program.

Hon. W. Newman: We didn’t have to.

NURSING HOMES

Mr. Cooke: Mr. Speaker, I have a question of the Minister of Health. I would like to ask the minister if he has answered a letter from Sister Olive Gilchrest of Local 220, the Service Employees Union, London, dated November 25, whereby that union, representing more than 1,000 workers in nursing homes in this province, asked the minister to consider a public inquiry into nursing homes in this province.

Hon. Mr. Timbrell: I don’t believe I have answered that yet, Mr. Speaker.

Mr. Cooke: Supplementary: When the letter filters through his bureaucracy, would the minister mind sending me a copy of his response to the request?

Hon. Mr. Timbrell: Yes, I would. Since it was a letter to me -- I didn’t realize she was a religious sister -- I’ll send that to her; then I’m sure the member can get a copy from her.

TRAIN SERVICE

Mr. G. E. Smith: Mr. Speaker, I have a question of the Minister of Northern Affairs. In view of the statement given by either the chairman or the general manager of the Ontario Northland Transportation Commission that the passenger service on the Ontario Northland is under review, could the minister assure me that when reviewing the

schedule of the Northlander he will review the possibilities of having it provide train service to the city of Orillia?

Hon. Mr. Bernier: As the hon. member well knows, Mr. Speaker, the train service provided by ONTC is designed, of course, to assist as many people in northeastern Ontario as possible, certainly along the entire northeastern Ontario corridor of which Orillia is a part of that situation. I would say to the hon. member that we are having certain difficulties with the CNR because of its requirement that we travel over its roadbed only at specific times and at specific speeds, but I’d be glad to take the member’s suggestion under consideration.

Mr. G. E. Smith: Supplementary. In view of the fact that one of the cities being served by the Northlander, the city of Barrie, is already receiving rail commuter service and GO bus service, and it is my understanding that the reason the train doesn’t stop in Orillia is to maintain the fast schedule, could he review all the aspects, keeping in mind the lack of rail service and GO service to the city of Orillia, to assist the commuters?

Hon. Mr. Bernier: Knowing of the member’s sincere interest, I would be glad to take that under consideration.

INTERMEDIATE CAPACITY TRANSIT SYSTEM

Hon. Mr. Snow: Mr. Speaker, I would like to reply to questions a few days ago from the Leader of the Opposition.

The Leader of the Opposition asked me a number of questions in the House and again last Friday regarding UTDC’s program in Kingston to develop an intermediate capacity transit system. The questions dealt with technical matters, and even though we will be discussing matters related to UTDC in our estimates this evening, I can relate the following answers to him.

The first question was: Did metal fatigue and stress loads in the steerable truck render it impractical? The corporation advised me that no metal fatigue occurs in the truck. The steerable truck now is under test and is operating well and the stress loads on this truck are from 20 to 25 per cent below UTDC’s original predictions. At present all aspects of the steerable truck are performing well and are proving to achieve benefits well beyond our initial expectations.

The second question was: Has the linear motor been rejected and has a rotary motor been substituted? UTDC advises they are continuing their work on many elements of motors and electric motor power control units for their streetcar program and other programs. UTDC has conducted a number of investigations into AC rotary induction motors as well. These programs are generally successful and will carry on. However, I am advised that at present there is no intention to substitute a rotary motor propulsion system for the planned linear motor propulsion system on the ICTS program.

At the beginning of the LIM development program there were six major technical feasibility risks as the corporation calls them. These related to: 1. The air gap on the motor; 2. The control of vertical forces from the motor; 3. Electrical magnetic compatibility of the motor and other subsystems; 4. Cost viability of the LIM; 5. Thrust performance of the motor; and 6. LIM cooling.

The status on each of these as of November 1971, according to the corporation’s report, is that: 1. Testing to date has shown that the risks of not achieving an 11-millimetre air gap have been substantially reduced; 2. Tests have eliminated the feasibility risks in controlling the vertical forces; 3. Testing has confirmed UTDC’s earlier analysis and the corporation believes that the electrical magnetic compatibility is no longer a risk item; 4. The present motor configuration cost viability is estimated to be within three to five per cent of the original predictions; 5.

Current testing on sheet rail laminated back iron reaction rail type have yielded satisfactory thrust performance results. However, they are currently approximately 10 per cent below our predicted thrust performance. Current testing and design of reaction rail type and LIM design modifications are intended to increase thrust performance to predicted levels.

And to the supplementary question last Friday, the current testing indicates that air cooling of the motor is feasible and there is no intention to switch to liquid cooling of the motors. The basic design challenge now is to improve fan reliability for air flow and complete the routine development for ducting air flow in a way that will not ingest snow, ice and debris from the guideway.

Significant improvements in this performance cannot be further tested until the dynamic test program is conducted on the track at Kingston. This should be by mid-1978.

The last question relates to the length of the vehicle. UTDC has indicated that it is exploring vehicle configurations ranging from 9.3 to 12.7 metres, which is approximately from 30 to 40 feet. Under any vehicle configuration, the key factor will be the station or train length. UTDC indicates it is maintaining the station and train length at 35 metres. The basic vehicle configuration will be determined by the economics of operating three- or four-car trains equalling the maximum train length. UTDC reports that there are some system economies obtained by having three-car trains rather than four-car trains.

If so, this would allow each vehicle to be slightly longer, eliminating the need for four sets of equipment, and instead substituting three equipment sets.

It is the judgement of the corporation that the program is proceeding well; it is a development program, and in the process of developing this transit system a number of changes will occur as the technology develops. At present they believe that all operating requirements established in 1976 will be met.

[3:00]

SCHOOL BOARD BUDGETS

Mr. Bradley: I have a question of the Minister of Education. At a meeting a couple of months ago in Hamilton, the Treasurer indicated that the boards of education could expect to receive all necessary information concerning provincial grants and the total amount of money that would be available to them for the year 1978. In the light of the fact that the minister had a meeting, I think on December 1, with board officials here in Toronto, could he indicate whether he provided this complete information which would allow them to strike a budget in the year 1978?

Hon. Mr. Wells: No, we did not. We will not have the general legislative grants for the boards ready until early in January.

Mr. Bradley: Supplementary: Would the minister not agree that this makes the job of the boards of education very difficult, in light of the fact that they have to look at their staff complement, whether they have to cut, whether they’re permitted to allow more people into the system, and other operating expenditures? Would he not agree that providing the information this late does not allow them to budget properly?

Hon. Mr. Wells: I don’t accept that completely. They know roughly what they’re going to get. They know there’s not going to be an over-abundance of money available. The Treasurer has indicated in exact terms the amount of increase there will be in the general legislative grant. I don’t think it takes a wizard to know that things are not going to be rosy next year, and I think that the boards are working and doing their preliminary budgeting with that in mind.

We gave them some preliminary indications, in the same manner that I’m doing right now, at the meeting with the directors on December 1. We really can’t have the general legislative grants ready any earlier this year.

POLLUTION BY PULP AND PAPER COMPANIES

Ms. Bryden: A question of the Minister of the Environment: Because of the concern about the slowness of the pulp and paper industry in meeting the 1965 standards for discharges into Ontario waters, I would like to ask the minister if he is confident that the deadline of December 31, 1977, which applies to nine control orders -- or “Kerr-trol” orders as we’ve heard them called -- affecting seven mills, will be met? Has he been in touch with the companies this month to remind them of the December 31 deadline?

Hon. Mr. Bernier: Remember what you did with Inco and Falconbridge.

Hon. Mr. Kerr: Mr. Speaker, these questions were asked three or four times by the hon. member during my estimates.

Ms. Bryden: I didn’t get an answer.

Mr. Riddell: Tell her to read Hansard.

Hon. Mr. Kerr: Yes, I should send her a copy of Hansard. In any event, to answer the hon. member’s question, it is expected that those terms of a control order which will mature the end of this year will be met by the companies.

DOUGLAS POINT PROJECT

Mr. Gaunt: Mr. Speaker, I have a question of the Minister of Energy. Since the Douglas Point greenhouses project report has now been completed, when will the ministry be making that report public? Since the government has had this report for some few days, why has the government been delaying its release?

Hon. J. A. Taylor: Frankly, Mr. Speaker, I haven’t read that report yet, but I see no reason why it shouldn’t be made public. I am anxious to see that that project is expedited as quickly as possible.

Mr. Gaunt: Supplementary. Very briefly, has the government made any decisions as to whether the project will go forward? If so, where will the project be located?

Hon. J. A. Taylor: That decision has not been made.

THUNDER BAY COURTHOUSE

Mr. Foulds: Mr. Speaker, I am not satisfied with the answer given by the Minister of Government Services to the question asked previously, and I’ll file notice with the Clerk.

Mr. S. Smith: He said he would take it as notice.

MOTION

SUPPLEMENTARY ESTIMATES

Hon. Mr. Welch moved that the supplementary estimates for the Ministry of Transportation and Communications be referred to the standing general government committee for consideration within the time already allocated for the estimates of that ministry.

Motion agreed to.

INTRODUCTION OF BILLS

LEGISLATIVE ASSEMBLY AMENDMENT ACT

Hon. Mr. Welch moved first reading of Bill 122,

An Act to amend the Legislative Assembly Act.

Motion agreed to.

LEGISLATIVE ASSEMBLY RETIREMENT ALLOWANCES AMENDMENT ACT

Hon. Mr. Welch moved first reading of Bill 123,

An Act to amend the Legislative Assembly Retirement Allowances Act, 1973.

Motion agreed to.

ORDERS OF THE DAY

THIRD READING

The following bill was given third reading on motion:

Bill 43,

An Act to revise the Audit Act.

House in committee of supply.

ESTIMATES, MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS (CONCLUDED)

Hon. Mr. Welch: Mr. Chairman, before you proceed with this; it is my understanding that it is the hope of the committee to complete consideration of these estimates just before 6 o’clock in order that this evening we can go to legislation, at which time, 8 o’clock tonight, we will start in committee of the whole House with Bill 98.

On vote 1402, commercial standards program; item 6, business practices:

Mr. B. Newman: Mr. Chairman, while the minister gets ready I would like to bring to his attention some business practices that are unfair and take advantage of many other businesses in the community. I am referring to situations such as we have had in the past where out-of-province advertisers would bill business and industry in the province of Ontario. The bill wouldn’t look like an invoice at all, but it was really an invoice asking them to pay X amount of dollars. In fact it would be a phoney invoice. Many residents in the province have thought that these were legitimate invoices and as a result have sent funds.

The US government has looked into this and I would like to bring what may be an answer to the problem to the attention of the minister. “Under new US rules,” and I am reading a December 9 newspaper clipping from the Detroit Free Press, “a disclaimer will have to be printed in colour, contrasting with everything else on the face of the material and will have to be at least three times larger than normal printing on the so-called invoice.

“People sending ads would not be allowed to include such qualifying statements as, ‘Notice required by law.’ Further, they would have to print one of two statements on the solicitation: One, this is a solicitation for an order of goods, services or both, not a bill, invoice or statement of account due; or, you are under no obligation to make any payments on the account of this offer unless you accept this offer.”

That has passed the US House. I think it has merit as far as Ontario is concerned. I hope that the minister’s officials would look into this and verify if it can be adopted in whole or in part.

After a reply from the minister on this I have two other items I would like to discuss with the minister on unfair or fraudulent business practices.

Hon. Mr. Grossman: I think that would be easier to implement on a national level, as the Americans did. It is certainly a good bit of preventive medicine. I would be happy to take a look at it, I am very interested in it.

Mr. B. Newman: I would appreciate it, Mr. Minister, to see if it can be adopted in the province of Ontario.

Another issue I want to raise with the minister is whether he has control over the pricing of radios put in as equipment in new automobiles. The US Senate also looked into the pricing of radios. Looking at the manufactured price of the radios and what is charged to the consumer, this was a rip-off 10 times worse than coffee.

An average AM auto radio in the United States costs $13.52 to manufacture. The price when installed in a US vehicle is about $70. They use a formula of one, two, three, four. In other words, $70 if the radio in the car is only an AM radio and $140 if it’s an FM; three times $70, or $210 if it is an AM-FM stereo; four times $70, which is $280, if it is an AM-FM stereo with tape deck. Yet the cost to manufacture these radios in the US -- including labour and components -- runs at $13.52 for an AM; $20.47 for an AM-FM; $35 for AM-FM stereo. There is no indication what the complete package AM-FM stereo and tape deck cost to make.

It strikes one as being exorbitant. You don’t need profit on the car if you make this kind of profit on the extras. This is in the United States, I’m not saying it is Canada. They are charging $280 for four radio components that go into that vehicle,

whereas the manufactured price of the radio unit is extremely small.

Do you have any control as far as pricing of such items for Canadian manufactured vehicles is concerned?

Hon. Mr. Grossman: The answer is similar to that of coffee. I have no power to roll back prices or to determine what is or is not a fair price. Hopefully the marketplace would determine that. If the marketplace doesn’t determine that and where all of the manufacturers of automobiles are carrying on the same practice, if the figures you have given me are true, then I suspect you are quite right in speculating they don’t make much profit on the automobile as a unit but make a fair amount of profit through extras.

[3:15]

It is an interesting point, talking about the workings of the marketplace, that businesses like Canadian Tire, which retail the units themselves for installation in the cars, are able to retail them at a lot lower figure than the figures you are giving me, for in-car delivery as it were. Firstly, this would lend credence to what you are saying; and secondly, it would indicate that consumers in the province ought to be looking at the retail outlets as a viable alternative to being locked into the in-car purchase of a radio.

Mr. B. Newman: Mr. Minister, I will send you a Xerox copy of the article. It is a fairly recent article, from September of this year. It does really amaze one, when you read the cost of the

article concerned and what the selling price happens to be.

Hon. Mr. Grossman: The answer is similar to the situation on coffee, I don’t have any power.

Mr. B. Newman: The only other thing I wanted to raise with you -- I have a lot of additional matters but there are others who want an opportunity to raise other issues and if we are working for a six o’clock deadline I would prefer to be fair and give everyone else a chance.

Hon. Mr. Grossman: They would not be that good to you; but go ahead.

Mr. B. Newman: The other matter is the hearing aid business. Do you have any control over that at all? I notice that the US Congress is cracking down on that industry. Not that I am saying that the Canadian industry is corrupt or anything of that sort, but when you see what is going on in the United States you wonder if some of those practices don’t cross the border and are not copied here in the province of Ontario.

They do seem to have some answers for some of the problems in the US. They are passing legislation, or have passed legislation, so that you cannot buy a hearing aid unless you have a doctor’s prescription indicating the need for the hearing aid.

There are a lot of other things, but I would rather not take up the time of the House. I will Xerox the

article I have; your officials could look it over and see if it merits some type of action on the part of the province of Ontario.

One more item; I think every one of us got a letter from some individual exposing the pyramidic sales practices that are going on. A letter showed up in my mailbox this morning, as others have over the past week or two. Are we controlling pyramidic sales or do we still have people taken advantage of and as a result find themselves put into an embarrassing financial position?

Hon. Mr. Grossman: First let me say about hearing aids: I am glad the member brought it up, because it is something that, in fact, has been on my own personal list for some time. Frankly, I have been just awaiting the winter/spring ease-off in the initial rush of business in my office to sit down with my staff and --

Mr. Foulds: To get tested for one.

Hon. Mr. Grossman: -- have a very close look at the subject.

I have, frankly, a friend of mine who is a otolaryngologist -- I think I have said that right, we will see how it comes out in Hansard -- who has been doing extensive work with senior citizens and has complained to me bitterly, with letters and documentation, drawing my attention -- and this was long before I was appointed to this post, I might add -- to the susceptibility of senior citizens to the type of practice that may be carried on; and indeed instances in which, advertently or inadvertently, machines, hearing aids, without appropriate warranty provisions or without appropriate testing with regard to the real source of the problem, are sold to rather unsuspecting senior citizens.

It causes me a lot of concern. I want to provide my specific assurance to the member, and the House, that it is something that will receive our very careful attention in the new year. The Pyramidic Sales Act is at the moment under review to determine its continuing relevance, and whether or not pyramidic approaches to product marketing should continue in view of the maturing of people’s awareness of and comfort with other forms of distribution. In fact it may no longer be necessary to allow companies to recruit distributors on this basis.

You can tell from the fact I’ve been able to read that to you that we have been looking at the problem and are concerned about it. We have prepared a definite review and response on that matter. You can take that response as a policy statement with regard to where we are right now in pyramidic sales.

Mr. B. Newman: I have other questions but I’ll give someone else a chance first.

Mr. Young: In connection with pyramidic sales, I wanted to push this matter a bit further. Last February a gentleman who was working with the St. Vincent de Paul Society came to my office. He said while delivering Christmas parcels -- this was a year ago -- he came across a family that needed help. The gentleman said, “You’d have to see their apartment to believe it. It’s falling apart. They have no couch and the furniture is all in pieces.”

The gentleman who lived in the apartment and who was in trouble earns $3.50 an hour and his wife works at the minimum wage. They have a four-year old daughter. They’ve been in Canada from South America for four years. When questioned, the gentleman said he was $6,000 in debt and it took all his earnings to pay the rent and keep up. He saw no way of getting out of it. He was desperate but did not know where to turn.

I asked the gentleman to bring the Spanish person in. He came in next week with his parish priest who speaks Spanish. I got a written statement from the parish priest and I’ll read parts of it, I don’t want to take the time to read all of it. He says, “Further to our telephone conversation, the gentleman was first contacted by a friend” -- and he gives his name -- “who then lived in Bramalea.” He has since moved and they don’t know where he is. “The gentleman concerned attended a meeting at the office of the Bestline company on Oakdale Road. This meeting was held on October 1, 1976.

By October 5, 1976, the gentleman went to the Bank of Nova Scotia at 95 Dundas Street East in Mississauga. A loan had been arranged by the gentleman mentioned before, whose address is no longer known, and the forms were ready for him to sign at the bank. The loan was made for the $6,000.” I have a copy of it here.

“The loan was for $4,965. The cost of the loan was $1,310, making the total note $6,276.36. In security, certain things in the household were taken.” What the parish priest said after examining them was that, “the goods were anything but what they were represented to the bank.” They included a refrigerator and stove which belonged to the apartment; a stereo which turned out to be a second-hand one which Mr. Fernandez had purchased for $30, and a carpet which had little value and was given to the gentleman by a friend -- I used his name. Apparently the Bank of Nova Scotia failed to verify if these assets actually existed.

In any case, the gentleman got several of his friends, as he was instructed by Bestline, and became a distributor. He got the material and found that he couldn’t sell very much of it. His friends could not sell it either and he was stuck with the material and with the debt.

Certainly he was allowed to return the material to the company within the six-month period, provided the cartons were unopened; but the distributor to get his material out and the people in order to sell had to open the cartons. They could only get back 75 per cent of the total value even when it was returned, so the company was assured of 25 per cent profit off the top, regardless of what happened.

I contacted the minister’s department and Mr. Baird did a rather efficient job in this whole field. He was able to persuade the company, by whatever means he has, to allow the material to be returned even though it was not in sealed packages. So the gentleman concerned was able to recover a good part of his assets. It turned out better than he had expected at the time he approached us.

There are two or three things I want to mention to the minister and ask some questions about.

First of all, under the present Pyramidic Sales Act, which we thought we had tightened up several years ago and made this kind of process impossible, the company only has to file a prospectus with the government setting out who they are, what they are and what they plan to do. Having done this, their obligation is finished and they can do what they want to do with whomever they want. That seems to be a place where this matter is too wide open.

The unfortunate part of it was that that fortune just did not exist. The company was able to take the 25 percent off the top regardless; then of course they made their profit out of what was sold.

We have had various communications about Bestline, and companies like it. Bestline is approaching people who are more or less newcomers, who are anxious to get ahead, who do not know the hazards that are facing them in this kind of a situation.

Evidently the bank was willing to advance $6,000 to this particular person to buy goods without proper security. It was in this case, although I spoke to the bank manager and he agreed that they should stop this kind of credit. I don’t know how the bank slipped up here, because ordinarily they demand airtight security. They didn’t here. Why they should co-operate with a company like Bestline to take these people to the cleaners I just don’t understand.

Perhaps the banking fraternity is learning something from experiences like this, because certainly this man never would have been able to make his payments. They were getting a few early payments, but beyond that nothing. What they were going to do in order to get their payment I don’t know. They could garnishee a man’s wages, but then he would lose his job and the bank again would be out in the cold.

I wonder if the minister would make a comment on this and tell us, in his examination of this whole situation, that this kind of thing must stop, that no longer can this kind of exploitation take place in a province like Ontario? I know caveat emptor is the great phrase, “let the buyer beware,” and in this case let the person beware who was being sucked into this kind of a situation; however most of these people who are taken to the cleaners this way are innocent people who don’t know enough about Canadian life, who don’t know enough about credit and who are helpless in this kind of a situation.

[3:30]

Perhaps they should know more, and should inquire more before they get into a situation like this, but the fact is this company is able to operate, not only in this case but is evidently operating on a wide scale according to the memos we are getting. So the pyramidic sales legislation which a few years ago we thought had tightened up this whole process only means, as far as I can discover that the company has to file a prospectus and then it is home free from that point on. I wonder if the minister would comment.

Hon. Mr. Grossman: Yes. First the member talks about caveat emptor; as I have said in several of the public speeches I have given, I don’t believe that the pure concept of caveat emptor ought to be the policy of this or any government in 1977 or 1978, and that is especially the case where there is a clear imbalance of information.

Secondly, to answer your question about the current Act; of course I wasn’t here when it was passed, but whether there was an understanding that you were putting pyramid operators out of business or not I can’t say. The Act does do certain things. For example, it permits the registrar, before issuing a certificate of acceptance, to look at a lot of things. I will read you some of the parts without taking too much time.

Section 6(

a) of the Pyramidic Sales Act deals with an assessment of the promoter’s financial position. Can he “reasonably be expected to be financially responsible ... ?” In subclause (

b) we get to “the past conduct of the promoter

c) whether “the promoter is or will be carrying on activities that are in contravention to the Act ... under (

d) we look at whether the “prospectus contains any misleading facts or omissions”; (

e) whether “there is any immediate availability” or inavailability “of the commodity ... ” And it goes on to enumerate 12 things that the registrar looks at. They are fairly comprehensive and permit the registrar to look at all aspects of the scheme.

I say that not by way of a defence of the current situation, but by way of explaining what the Pyramidic Sales Act now provides. It does provide a certain review of the operation. That review is also in the context of the fact that the same Act provides something that’s very important, and that is an escrow fund from which the people you are concerned about were able to obtain some money.

That’s very important, as the members will have heard me say before. I think one of the problems we have in the whole area of consumer protection is restitution. Just prosecuting someone or putting him out of business doesn’t put money back in the hands of the consumer who has been duped, so it seems to me to be very important that under the Pyramidic Sales Act there is something there, an escrow fund for a period of time, six months; and a lot of money too, in the sense that you can get 75 per cent of your money back under the circumstances you have enumerated.

Now those are products of the Act, they are functions of the Act, so some real protection was granted by you and the other legislators who were here in 1974. In fact, in the case of Bestline, as of December 7, there was $1.2 million in that company’s escrow fund standing there available to those persons who reclaimed it. That’s a lot of money available to those people. That, it seems to me, is an important part of the Act.

I want to confirm for you that the fact there can be that amount of money in the escrow fund gives me great cause for concern. I mean it gives you some outline of the number of people who are being -- I don’t want to say taken in, but I do want to say participating in pyramidic sales.

Mr. Young: How does the victim of this situation get his money from the escrow fund? In the case which I cited to you today, there were a half a dozen people at least who were out there in the cold. They knew nothing about the escrow fund. They had given up. All they knew was that the bank was after them and that they had to pay the bank every month.

Hon. Mr. Grossman: Unless I missed a part of the question, and please tell me if I have, the ordinary course is for a claimant to write the company and ask for the money back -- providing of course it’s within the six-month period. If there is any difficulty whatsoever, then my ministry should be contacted immediately, in which case the registrar and other staff will look into it immediately. Under the Act, the registrar can suspend or withdraw approval of the registration under

section 8 of the Act, so that action can be and is taken immediately. The role the member plays quite properly in this particular instance he’s giving me -- is to direct his constituents to my staff.

It’s not a problem unique to pyramidic sales. Often people out there, and we’re concerned about the fact, don’t know exactly who to call or where to call. We’re trying to deal with that problem through advertising and other means. But the simple answer is to go at the company to exercise your rights under the Act. Failing that, come to the ministry. In fact people may come to the ministry first and we’ll undertake to make the necessary contacts with the company.

I’m not saying that would necessarily be lawful. I’m pointing out that they would move to a different façade in order to perhaps carry on the same practice. It’s for that reason that dealing with it at the time at which I may be bringing forward a new franchise bill -- not a new one, the first one in the province -- perhaps in 1978, then we may be able, at the same time, to repeal the existing legislation and make an attempt to end pyramidic sales in the province. It gives me a great deal of concern that the practice is being carried on to the extent that is obvious from the figures I have given you.

As I said right at the top of my remarks, I’m looking very carefully at whether or not we ought to be permitting this sort of practice at all in the province at this time. If we reach that conclusion, which I’m inclined to say appeals to me, then we would have to do it in conjunction with the franchise Act in order to make sure there are no loopholes available.

To point out the difficulty in this, if you outlaw pyramidic sales you then have to deal with the absence of an escrow fund for those people who might get involved though those operations that will switch to a franchise type operation. I don’t pretend to be able to assure the House that whatever franchising legislation we may come up with will be absolutely devoid of loopholes that clever people may try to take advantage of.

I hope the hon. member will understand I’m saying this without even knowing what form the ultimate franchise Act will take, but it’s not inconceivable that some people could take advantage of a new Act, try to do what they’re doing now, and because we wouldn’t be requiring the type of procedure now available under the Pyramidic Sales Act we may end up with less protection because the escrow fund wouldn’t be there. You will understand that in the case of a normal franchise operation -- for example you wouldn’t have McDonald’s Restaurant being required to set up an escrow fund.

So those are some of the concerns. I am saying this to the member honestly, telling him my concerns and my desire to continue to frown upon this sort of practice and to see what we can do to end it.

With regard to Bestline, I would like to deal with that specifically for a moment. We are not unaware of the problems around Bestline. We are just having a look at their operation to make sure that all aspects of it -- I really don’t want to give you the specifics of what we are looking at, but the whole operation is being looked at intensively by my people right now.

Mr. Young: I wonder, Mr. Chairman, if the minister could tell me if the banking system is still making loans for this purpose? It seems to me that the banks are in business to make a buck by loaning money, and how they loan it is pretty hard for us to say, but it may well be that in this case the security was not there and there was carelessness somewhere on the part of the bank concerned. Certainly the manager, and I talked to him, was very upset that this should have happened. He had thought there was plenty of security, which did not exist when they finally took a long look at it.

I am wondering whether in looking at this the 25 per cent is not too generous an amount. That is, the company only has to refund 75 per cent of the value of the goods; in other words they make their profit anyway, regardless of what happens.

Secondly, they are not, it seems, so concerned with selling goods as they are in getting people lined up who will get these loans and bring the cash flow into the office of the company, whether the goods are sold or not.

It seems to me if a pyramid sale is going to happen, if we are going to allow it -- and I quite appreciate the minister’s difficulty in this whole field because it looks as though if you smash down an evil thing in one place it bobs up someplace else; it is hard, legally, to stop that whole process -- but I am wondering whether or not there isn’t some way that the selling of goods can be made paramount, rather than putting emphasis on bringing money in through a multiplicity of agents? I suppose that whole thing would destroy the pyramid idea, but as far as I am concerned that wouldn’t be a bad idea.

The other question in my mind is the matter of past conduct. A pyramid company applies for registration and brings a prospectus to the ministry. The whole thing is outlined, that is what they plan to do, and yet they have no past record. I suppose it is a case then of seeing what the credit rating of the partners is, or the company itself, and making the best judgement you can as to whether or not this company will live up to its promises; that is if it is a new company.

Hon. Mr. Grossman: I tend to agree with the member that 25 per cent is on the high side. I also want to say that that is not as a result of an intensive study by myself of the industry, if you want to call it an industry. In my initial thoughts when I read the Act in detail -- I guess it was just shortly after I got on the job in late September -- that was one of the things that concerned me and it hasn’t been dispelled.

[3:45]

Secondly, your point is very well taken that some of these people may be in the business of head hunting, not the sale of goods. It is precisely on that point that we are studying the existing operators and that is the area to which we will be addressing a review of the legislation which we may be bringing into force. You are absolutely right that it should be goods, not head-hunting. We have to find a way to force them to deal with goods, not heads.

Finally, on the matter about banks; one of the problems is when the people who are bad guys -- let’s call them bad guys -- in the business get their paws on someone, they probably are not adverse to counselling them as to how best to get money from the bank to complete the scheme. If that is the case, depending on the circumstances of course, then they would be party to a fraud if they have misrepresented circumstances to the bank. It would be a fraud, and that would not be a matter for us but it would certainly be a matter for the federal authorities.

Mr. Young: I have one further question along this line. Has any discussion taken place with the banking fraternity about this business of credit? It looks as if what is happening is that companies like Bestline are able to transfer their liabilities to the banks so that Bestline is not in the line of fire at all. The bank has to collect what Bestline now has as an asset. It seems to me the banks must have had some grief in this field. I can’t see why this kind of an experience hasn’t been multiplied many times.

It may be that what the minister should do is have a nice long talk with the people who run the banks in our province to see whether they might co-operate in choking off some of this credit instead of taking the rap for companies that should be meeting their obligations and not shifting them to the banking fraternity.

Hon. Mr. Grossman: I could speculate on the reasons why there aren’t a lot of companies into pyramidic sales. In fact, we’ve got only one registrant under the Act, Bestline, and no other applications. One of the reasons for that, I suspect, and I could be wrong, is that the availability of money isn’t quite what it could be. In other words they are probably having some difficulty in getting banks to lend money to their prospective customers or whatever. I could be wrong, but I would speculate that may be part of the reason for the fact there is only one company in the business at the present time.

I really would hope, even without our intervention or suggestion to them, that banks are exercising some sort of an analysis of where the money is going. Surely they should, in spite of the fact that the people who come to them for loans have perhaps been counselled as to how to handle the manoeuvre. We are talking about the very same applicants for a loan when we talk about their susceptibility to high-pressure tactics, and it would seem to me those people would not be the persons who, you would think, are most likely to be able to con a bank manager out of some money in turn.

If they were that smooth, they would probably be able to con more customers and sell the product they are taking on. I would find that just shocking.

However, in terms of what is happening out there, I tell you that if $1 million represents 75 per cent of six-months action for Bestline, there must be some money getting out from the banks. I would hope they would be more careful. I am going to think about that one, that’s not a bad suggestion.

Mr. Young: In this particular case, the work with the bank was done by a person who was involved with the company.

Hon. Mr. Grossman: Oh really.

Mr. Young: He went with the Spanish-speaking person to the bank, arranged the loan and outlined the security. All the gentleman had to do was to sign on the dotted line. Then the other person evidently couldn’t be found. We tried to trace him but he wasn’t at the address where he was supposed to have been. The trouble with many of these people, once they get the bank loan, is that they will struggle endlessly to pay it off. That’s a pretty serious obligation as far as they are concerned and the garnishee is there as a threat. They will go without almost anything else in order to keep up that bank payment.

It is a serious situation and one which I am glad to know the minister is seized of and that some progress can now be made along this line.

Hon. Mr. Grossman: In closing this topic, I want to confirm my concern about it and invite the member to give us any further information he may have, or any suggestions he may have for us in dealing with it. It frightens me.

Mr. B. Newman: Mr. Chairman, I wanted to ask of the minister if in his new franchise legislation he is going to include the problem of the gasoline retailers. We know the difficulties they have had in the past and how they were being taken advantage of by the big corporations. As a result, many of the small independents had no choice but to get out of the business completely or go into strictly repair work. They could not operate their gasoline outlets because of the regulations and the rules set by the supplier of the product. Are you considering the gasoline retail industry in your new franchise legislation?

Hon. Mr. Grossman: Yes. The approach I am taking, or hope to take in the franchise legislation -- I have said so publicly -- is not a registration approach but rather what we call an umbrella approach similar to the Business Practices Act. It will be an all-encompassing type of guideline with regard to what you have to disclose, and will have certain rules that ought to be followed.

If we went the registration route, then there would be some opportunity for exclusion by way of deciding who does have to register and who does not have to register. Our inclination now is to go the umbrella route, not registration but rather guidelines for carrying on business. Taking that approach, we would not be excluding the gasoline franchisers, it would be all encompassing.

So yes, we will deal with it. Admittedly, it is such a special case that we will be addressing our attention to the special relationships involved so we will know the applicability of our legislation to them; they will be covered in the new Act.

Mr. B. Newman: I am pleased to hear that, because I am sure you are aware of the problems the gasoline retailers have had, over I would say approximately 10 years now. They have never been able to seem to get any redress or any action on the part of your government. We hope that you will now be able to show a little light at the end of the tunnel for them and they will once again be able to operate as independent retailers rather than be at the mercy of the multi-national supplier.

One of the other items I wanted to raise with the minister concerned the safety of certain articles in the marketplace. If it is your responsibility I wish you would answer, and if it isn’t likewise let me know. One

article is the flying saucer, a circular device on which the youngsters sit and go down the hills. The fact that it cannot be guided or directed is a tremendous hazard to the individual who uses it as a toy, especially youngsters. Your officials may recall, Mr. Minister, back several years ago I was in contact with a professional engineer by the name of Mr. Green from the Niagara Falls area who lost one of his children as a result of a flying saucer accident. It ended up hitting a tree and killed the child.

He has attempted to get some type of action on this from both the federal and the provincial governments. To date, to the best of my knowledge, he has not been successful. I think a device like that should not be allowed to be sold because of the great hazard in its use.

I wanted to know if the minister has anything new to report as far as the children’s flying saucers are concerned.

Hon. Mr. Grossman: I am shocked by that sort of thing going on. I would hope all of us can play a bit of a role in cautioning parents against ever buying one unsafe product that is in the marketplace. It has been, I think still is, something that properly lies within the jurisdiction of the federal government under product safety. Right now the Ontario Law Reform Commission is studying the whole subject of product liability, and I think the case you mentioned would fall under that category.

There is currently an intergovernmental task force in existence to deal with the whole area of unsafe products, especially children’s products, and toys, I think, are on the agenda for March. Yes, in March there is a meeting of federal and provincial consumer ministers and at that time the matter will be discussed further.

I should take this opportunity to state also that one of the things we’re very concerned about is, if not overlapping of jurisdiction which does occur in very many instances, at least some confusion about who is going to do what and who should do what. That will also be discussed at the conference in March.

In any case, I believe the Law Reform Commission will ultimately be recommending some specific action in this area. I can report that because my ministry has had, in fact, some direct conversations and meetings with Law Reform Commission to deal with that subject. In the meantime, I think I ought to reaffirm my ministry’s availability to help disseminate any information you or any other member may have with regard to any patently unsafe products.

Mr. B. Newman: I hope, Mr. Minister, that your officials and the federal officials don’t dilly-dally on this item. We have one definite case where an individual was killed, and we don’t know how many hundreds of others may have been injured. We should force it off the market and that’s all.

There is a similar device, the sled, but at least you can guide that sled. The amount of plastic involved in the sled is approximately the same as the flying saucer, but at least you know, or you think you know, it’s going to go in the direction in which you want it to go.

The other item I wanted to raise with you, Mr. Minister, is the problem of supermarket carts. It’s a real problem in the United States. The public is being confronted with all kinds of accidents and injuries as a result of the design of the cart and as a result, I would probably say, of reckless driving on the part of the housewife who is manipulating that cart up and down the aisles.

Hon. Mr. Grossman: Don’t be sexist.

Mr. Warner: Reckless driving; they should have a licence.

Mr. Blundy: Yes, running over the toes of other customers.

Mr. Foulds: Motorized or unmotorized?

Hon. Mr. Grossman: The shopper or the cart?

Mr. Foulds: The cart.

Mr. Warner: Carts should have turn signals.

Hon. Mr. Grossman: I want to say that to the best of my information housewives are no worse operators of carts than --

Mr. Foulds: Than house-husbands.

Hon. Mr. Grossman: I didn’t know what word to use -- than their husbands, common law or otherwise; we’ve covered everyone now.

Mr. Foulds: Or singles.

Hon. Mr. Grossman: That’s true. Before we leave, what do you call those devices?

Mr. B. Newman: Flying saucers.

Hon. Mr. Grossman: Flying saucers, yes. I wanted to make clear I believe the federal government now has the power to either directly order unsafe products off the market or exercise some very powerful arm-twisting to get products off the market. I know they’re doing this with toys all the time, where they’re testing products such as children’s toys for safety and are getting them off the market. Offhand, I can’t tell you whether that’s a direct power they have or a power they exercise; but that’s where it’s at, they have that power right now.

I would be happy to forward the information you give us to the federal government for their attention. I’m sure they would assess it before they’re put out of existence, I guess I should add.

Finally, with regard to the carts; what can I tell you? It’s something I haven’t heard before. If you have any advice I’ll tell my wife, who takes each of my kids in turn shopping on Thursdays. If she’s driving carelessly I sure want to know.

Mr. B. Newman: Mr. Minister, I can make one suggestion. Spread the wheels out farther, because once you load that cart it becomes topheavy and it tilts very easily. The reason I bring this to your attention is that in the United States in the last year there were 12,500 injuries directly involved with the carts.

[4:00]

Anything that happens over there eventually comes to the fore here, and if we can come along and stop it, or minimize it, I certainly think we should do the thing. I don’t know what the answer to the problem is, but I thought I’d bring that to the minister’s attention, because there can be some better design of the cart, the use of some type of bumper device or something of that sort.

Another thing I wanted to raise with the minister is some of these games that are on sale today that sell violence. There is the game called the death race game. The city council of Windsor was so concerned that it even endorsed a resolution asking that sale be banned in the province. If I’m not mistaken, the resolution originated with the council of the city of Owen Sound and it has been endorsed by many other municipalities.

The whole purpose of the game is to see how many individuals you can kill in the course of playing the game. Surely, we’ve got a better way of entertaining our youth today, and our grownups, than using that type of a sadistic approach in the sale of entertaining items, so the council of Owen Sound asked that that game be specifically banned and this was endorsed by the council of the city of Windsor.

I don’t know if the minister could do a thing like that, it may be federal legislation; but the resolution was passed by the city and it was sent on, if I’m not mistaken, to the Provincial-Municipal Liaison Committee for endorsement. Whether it did get there or not, and whether it was endorsed or not I don’t know; but have the minister’s officials heard of that, and if they have what action could we take to resolve that problem?

Hon. Mr. Grossman: My officials claim to have some recollection of the game, not that they’ve played it.

Mr. Davison: Are they the testing division?

Hon. Mr. Grossman: It causes me to wonder whether people won’t put out another game called Minority Government and ban it as a dangerous game.

Mr. Warner: Or revolving cabinet chairs.

Hon. Mr. Grossman: I might say about the carts, perhaps we might have hockey helmets mandatory for the kids, and seatbelts.

Mr. B. Newman: And shin-guards.

Hon. Mr. Grossman: And shin-guards, yes.

I also should say that it’s a classic instance where retailers and people who design these games are just encouraging more and more activity by government in some of these areas. They just show absolutely no ability to use some common sense and good judgement in the games that they put out. You are right, they’re selling violence.

I have two boys and each of them got some sort of damned big robot for the holidays, for Hanukkah, and believe it or not each of these items shoots different missiles. One of them shoots stars and the other actually shoots something that looks like a bullet. It shoots it across the room, and if you raise the robot’s arm it will shoot it up in your eye or some other delightful places. In any case, the robots were back in the boxes 10 minutes after they arrived and I had two crying kids. I just found that horrendous; and death race, I’m sure, is the same type of thing.

I would join you in telling the manufacturers and distributors that they are only inviting more and more attention by legislators if they continue to market these sorts of things.

Mr. Warner: The robots were probably sent to you by an opposition member.

Hon. Mr. Grossman: I might bring one into the House.

Mr. Warner: They are trying to encourage your kids to get rid of you.

Mr. B. Newman: May I ask what an individual does when he cannot get satisfaction with the car that he purchases from one of the dealers in a community; or when he attempts to get satisfaction from the industry itself and seems to be pushed off all the time? Should he be approaching this ministry to get satisfaction?

Hon. Mr. Grossman: Yes, both through our business practices division on occasion, depending on what exactly has happened in terms of what he has been told the car is and should be and so on; and as well under the Motor Vehicle Dealers Act. It may well be appropriate for that branch of my ministry to have a chat with the motor vehicle dealer involved.

I’m informed that last year that branch of my ministry achieved restitution or rescission for purchasers of motor vehicles to the tune of about $300,000. So do write and do call.

Mr. Deputy Chairman: May I remind the members of the House we have spent a considerable time on this one item and that there has been some agreement to wind up the estimates of this ministry at 6 o’clock. There are many more votes to go. I don’t want to restrict any member, but please keep that in mind as you talk.

Mr. Ziemba: I have a beef with the Better Business Bureau. Two of my constituents, Mr. and Mrs. Koshurba, went to the Home Show last year and were impressed with a model kitchen display. They put in their name for a visit by the operator of the booth. In time he did come out and quoted them a price for renovating their kitchen, somewhere in the neighbourhood of $3,000. Before they would give him any deposit, they checked with the Better Business Bureau and were informed that the firm in question, Supreme Kitchens, had a clean bill of health, a clean record.

There had been one small complaint lodged against Supreme Kitchens by a little old lady, but it had been cleared up. So my constituents were very confident they could deal with Supreme Kitchens.

The owner of Supreme Kitchens came back on a subsequent visit. They gave him a small deposit and contracted for the work. He put them off for a month or two, then came back and asked for a bit more money. He said he needed more money for materials. He ended up in getting, in total $1,200 by way of deposit. To assure them he would do a proper job, he recommended they check out another renovation in the area. They went out and visited the home in question and found that the job had been first rate and the people were quite pleased with the way the work was done. They had every confidence in Supreme Kitchens.

They gave him the $1,200. They borrowed it from the credit union at Canadian General Electric where Mr. Koshurba works.

To make a long story short, there was a lot of stalling and eventually Supreme Kitchens went bankrupt. I attended at the bankruptcy hearings and found there were a number of other complaints along the same line. People had given fairly large deposits, $600 and $1,000, and received nothing in return. There was very little by way of assets and the bankruptcy officers could come up with only a few pennies on the dollar for the 20 or 30 creditors who were in the room at the time.

The point I would like to make is that this outfit, Supreme Kitchens, was not so much in the business of renovating kitchens as it was in the business of collecting deposits. The Better Business Bureau, as far as I am concerned, was an accomplice to this activity because it cleared Supreme Kitchens. People have good faith in this outfit. The first thing that comes to their mind when they are about to contract with someone is to check with the Better Business Bureau. My constituents had every confidence in this man.

I would like to find out from the minister what he thinks of the Better Business Bureau. Perhaps it’s time his ministry investigated the Better Business Bureau to find out what value it really has in protecting consumers.

Hon. Mr. Grossman: Before the member takes off at the Better Business Bureau, as if they were an accomplice, which they aren’t, let’s deal with what the Better Business Bureau is supposed to do. Before I do that, let me say clearly, if he hasn’t read the estimates or studied the ministry, the Better Business Bureau is more than at arm’s length from us. We may consult with them or exchange information from time to time, and encourage their activities, but they are not carrying on an unfair business practice nor are they an arm of this ministry for which I can or do or should report to the Assembly.

I want to establish the arm’s length relationship between us and the Better Business Bureau. I say that because every other company that’s been referred to in these estimates has been referred to because someone has a complaint about the way it carries on business.

The member’s complaint today is simply that the Better Business Bureau could not provide enough information, or any more information than it was able to do, which is to report to the caller with regard to any complaints the Better Business Bureau had received. That’s all the Better Business Bureau holds itself out as doing or offering.

I don’t know the situation with Supreme Kitchens, but on the information the member has given me, the Better Business Bureau reported, I think, one claim. That was a factual report, I’m sure, with regard to the number of complaints the Better Business Bureau had received. I have a high regard for their integrity, and the decency and care with which they carry on business and deliver information.

They unfailingly say to the caller, “We have X number of complaints.” They don’t hold themselves out as having conducted an investigation of the financial stability of the firm, nor do they suggest they went out and carefully inspected any particular installation made by that firm. They are there so that careful consumers can call and find out if other careful consumers have reported difficulties with a particular firm. That’s what they hold themselves out as doing; that’s exactly what they do.

They never held out to the public nor the people the member talked of specifically that they would assure them of the financial stability of a company, nor comment on the financial stability of a company; nor endorse the work they had done in any particular case, unless a complaint had been received by them.

The member may have some comments with regard to the efficacy of the Better Business Bureau. I don’t think they’re terribly appropriate to this particular vote, but it’s his decision as to whether he wants to talk about it. What I do want to say specifically with regard to the Better Business Bureau is if the member wants to stand up in these estimates, outside the House or anywhere else and suggest the Better Business Bureau was an accomplice to a consumer fraud, a bankruptcy or whatever, then he’d better stand up with the facts and tell me in just what way the Better Business Bureau was an accomplice.

The facts as he has given them to me tell me the bureau did nothing but provide exactly the information they had on hand.

Before the member says they were an accomplice, he’d better stand up with some other details with regard to how, in fact, they were an accomplice. Did they give wrong information? Did they fail to do what they said they would do? Did they mislead the caller? Did they participate in an active way?

I’m going to sit down now and hear any details the member may have of how they were an accomplice. By reporting the number of complaints they had received and nothing more, they were doing exactly what their mandate is to the public, and what they hold themselves out to be to the public. If he can stand up and give me some details of how they were an accomplice, that’s fine. If he can’t, then I suggest he stand up and withdraw the remark, in fairness to the Better Business Bureau.

Mr. Ziemba: I certainly won’t withdraw the remark in regard to the Better Business Bureau, because in fact Mr. Koshurba is out $1,200 he borrowed from the credit union, which he has to pay back, because he was misled by the Better Business Bureau. The very name, Better Business Bureau, suggests better business. What kind of business is it when all they’re doing is listing the number of complaints? Why don’t they call themselves a complaint registry bureau? That would be fair. When Mr.

Koshurba phoned them, he believed they would give him an analysis, a profile of the company, a fair opinion on the company’s financial standing. When I went to the bankruptcy bearings, I found that Supreme Kitchens hadn’t paid their rent for the better part of a year; I found that their books had been two years behind the times.

Surely to God if the Better Business Bureau was at all interested in promoting better business, they would have investigated Supreme Kitchens and found that indeed this wasn’t an outfit to be proud of as having just one little complaint from a little old lady. No, I won’t apologize for what I said about the Better Business Bureau. In fact as far as I’m concerned they aren’t the Better Business Bureau, they’re apologists for any and all who want to use them.

Mr. Deputy Chairman: I would like to point out, both to the member for High Park-Swansea and the minister, that the Better Business Bureau is not an arm of government and we are not discussing the Better Business Bureau.

Mr. Ziemba: He shouldn’t be defending them.

Mr. Deputy Chairman: Unless you can connect it up, I would like to terminate that discussion. The member for Sarnia.

[4:15]

Mr. Blundy: I want to just go back to a matter touched on earlier. I realize we have a great deal to cover, but this is of so much concern to me I want to express an opinion on it to the minister. The hon. member for Windsor-Walkerville (Mr. B. Newman) did draw to his attention gasoline outlets, gas station operators and so forth. I want to further express concern regarding the automatic car wash dealers, who I am sure the minister will recognize have made a very considerable capital investment in their equipment.

They really think of themselves as being businessmen in the community, with their own businesses and with a great deal at stake in the community. But they no longer have control of their businesses because of the dictates of the providers of the gasoline.

I am not speaking of one company, I am speaking of several companies. From what I have understood from the automatic car wash operators, these companies obviously get together, because when they come around it doesn’t make any difference whether it is Gulf, Sunoco, Shell or Imperial, they are told not only exactly how much they can charge but how much they can make on the gasoline they sell. It seems to be a situation where people have gotten together to do this.

You were talking about a franchise Act. I would like the minister to really take into consideration the concern being expressed by the automatic car wash operators. In my opinion some of them are on the verge of being put out of business. I think in this province a man who is in business and has a very considerable investment should be able to charge what he wants.

I am told by at least one car wash dealer he is not able to do that. I wonder if the minister has any further information on that particular line of business?

Hon. Mr. Grossman: I believe, at the start anyway, you were discussing the problem within the confines of our proposed franchising legislation. The price of gasoline and the attempts by the petroleum dealers and the petroleum industry to control the end price of gas, I believe, is not properly within the jurisdiction of franchise legislation. The whole matter of the price of gas and petroleum products more properly lies with the federal government and the provincial government through, I think, the Ministry of Energy, which plays a role in the pricing of gas and so on.

While it is something I think we ought to be looking at and addressing when we look at the franchise legislation, I wouldn’t want to mislead the member in any way by suggesting it is something we will be able to control in franchising legislation, I would doubt that it is. If in fact there is a true price fixing operation going on -- and I don’t suggest there is or isn’t -- then it seems to me it would probably be a combines matter for the federal government.

With regard to some of the other aspects of petroleum franchises, my ministry in the last year did succeed in developing guidelines for the entire industry for the province by bringing together the petroleum industry and the franchisees. They worked out a pretty decently acceptable code of behaviour, which essentially called for fair play. It sets out factors with regard to disclosure surrounding the terms of the lease, and deals with the rent that can be charged. It generally has met with pretty wide approval and has substantially improved the relations between the franchisors and franchisees in the area. It has practically eliminated any complaints.

You will recall prior to a year or so ago there were a heck of a lot of complaints with regard to early termination of leases and so on. That has been rectified somewhat by these voluntary guidelines. They seem to be working well so far.

Mr. Blundy: Mr. Chairman, just to straighten out one observation. The people I am talking about are really not franchisees. These are people who own their own business, their own property and their own equipment, which is of a very sizable amount. In my opinion, the operation of their business is really being dictated by the providers of their products. Yet they are really independent businessmen who are not able to act independently.

Hon. Mr. Grossman: I don’t deny the legitimacy of the point. I can’t, in honesty, tell you that I know how to deal with the problem. Of course the most serious problem is the one to which the member refers, that is where the fellow is not a franchisee. He owns this property, although in a sense he is enfranchised to sell the gasoline of a certain company. The relationship between the company and the person they are wholesaling the gas to for purposes of a retail sale would be the subject of the usual rules and laws against unfair trade practice.

For example, has the retailer been misled with regard to where the price is going to go; that is his freedom or otherwise to adjust the retail price? So that aspect of the relationship is always subject to fair business practices. Again I’ll be looking into that, that’s an interesting twist.

Mr. Davison: I wonder if I could raise three or four brief points before we move on from this vote, Mr. Chairman. The first two have to do with the real estate sector of the business practices division.

I wonder if the minister can explain to me, because I am having some trouble understanding it, the whole situation with regard to the Manitoba realtors in northern Ontario coming across the border and getting involved in transactions in northern Ontario? This eventually led to complaints from the member in the area, Mr. Bernier, to your ministry, and Mr. Cox of your ministry telling Mr. Bernier and other people that while this was a terrible activity, there was really nothing you could do in your ministry. It was not really illegal in Ontario for this to happen, or it was illegal but you just couldn’t get a handle on it and you couldn’t do anything to control it.

Finally, you had to write to the registrar in Manitoba, who was nice enough to threaten real estate agents and brokers in Manitoba with dire consequences if they continued with the raiding. I understand to some extent that is now cut down.

I don’t understand the inability of your ministry to deal with the situation. If there was some inability, was there not some kind of legislation you could have brought in that would have allowed you to get control of the situation?

While you are thinking about that, I have another question about real estate and you can perhaps deal with them both at once.

Hon. Mr. Grossman: In fairness, it’s a complex matter. In fact it was something that I dealt with myself in my office at some length, and I don’t have the material with me. If you want an answer, if you would just hold on my staff and I will try and reconstruct our recollection of the transaction and the discussion in my office. It involved some implications for our own brokers registered in Ontario who might be affected by some response that Manitoba might have to any action that we took.

I want to get it precisely right for the member, so if he will just bear with me for a minute while I try and refresh my own memory with regard to our discussions it would be appreciated. Okay. We have refreshed our memories with regard to what happened. It was, I think, a couple of months ago that we had everyone in our office. The situation is essentially that it’s occurring on both sides of the border. It is a two-way street, but weighted against us in the sense that Manitoba agents are putting up signs in Ontario. Technically that may be defined as not trading in real estate in Ontario, but it also may be.

At the same time there is no question but that there are ads being placed in Ontario newspapers, for example, for properties in Manitoba. At the same time there are ads being placed in Manitoba by Manitoba real estate agents for Ontario properties. By far the majority of the property which is a subject of extra-provincial agents is in Ontario however.

As a result of some of these difficulties, we arranged for our people to go up there. They were up there as recently as two weeks ago studying the practices being carried on there and just who is doing what, and whether it is tantamount to trading in real estate in Ontario by unregistered agents or brokers. We are looking into it right now. There are people up there as a result of these discussions.

Mr. Davison: I do not want to dwell on this. I understand it is very complex and we could get into a very long and detailed discussion. It is my understanding that in August of this year the registrar in Manitoba was issuing warnings to Manitoba real estate agents. I take it that really had a minimal effect and the problem is still as serious as a problem on our other provincial border, it was earlier this year. I wonder, is it also with the province of Quebec? Has the same situation developed along the Quebec border?

Hon. Mr. Grossman: I should point out with regard to the action taken by the Manitoba registrar that that action was taken as a result of our initiatives. That is, my ministry made the necessary contacts, discussed the matter with the Manitoba registrar and he was acting as a result of our concern over the practice.

The answer to your second question is no, to our knowledge there is not an equivalent situation on the Quebec border.

Mr. Davison: I am sure you will endeavour to keep us informed of any developments, and I understand that you are making a very serious effort to do what you can.

Hon. Mr. Grossman: We always keep you informed, you know that.

Mr. Davison: That is right; sometimes overly informed, but rarely.

While we are on the subject of real estate, the Ontario Real Estate Association is complaining about activities of the government when they step into the field of real estate. The legislation committee of the association is apparently currently investigating reports by several of their members regarding certain property acquisitions by the government and its agencies that appear on the surface at least to have been carried out in an extremely heavy-handed manner.

North Pickering aside, is this a problem that has come to your attention through the association? And if so, is there anything at all your ministry could do about it? Have you made your own inquiries; or do you feel that you have no capacity in which you could look into this situation?

Hon. Mr. Grossman: No, it’s not properly the subject matter of the business practices division of the ministry. We register real estate agents and brokers on the basis of their integrity and honesty and so on. We would not ordinarily get into that sort of thing. You may want to take that up with the Minister of Housing (Mr. Rhodes), in the case of North Pickering; or with your friendly Ombudsman, I suppose; or perhaps the Minister of Government Services (Mr. McCague); but we have not only no authority in those areas, we have not been in receipt of any complaints, either from the public or the OREA.

[4:30]

Mr. Davison: I said aside from North Pickering, because the commission’s still out on that one, if we could say that.

Hon. Mr. Grossman: It’s still out?

Mr. Davison: Right. I wonder, from the comments of the association, if indeed the government could match the regulations that private real estate agents and brokers have to match. I suspect we’ll wait for an answer.

In regards to business practices, beginning to bother me considerably is the question of warranties in cases where a product is purchased as a gift for another person. For example, if I go out and buy a colour television for myself, there’s a warranty in place. I can have recourse in case of a problem. However, if I go out and buy a colour television and give it to you, Mr. Minister, as a gift, and you didn’t return it --

Hon. Mr. Grossman: Let’s try it.

Mr. Davison: -- or perhaps I could buy you two little robots that throw stars and imitation bullets, and you managed to have problems with the

article and the

article would no longer function, then in most cases the warranty would be totally worthless. You would be stuck with this toy robot or colour television that didn’t function, but you couldn’t get any repairs done under the warranty.

I’m wondering if that’s of concern to your ministry. I realize it doesn’t happen with every warranty, but it happens with most of them. Is there something you can do about that, because it’s not really a problem addressed by the Business Practices Act? It’s just something that’s simply not being done. Gould you possibly step in here with legislation?

Hon. Mr. Grossman: Yes, very likely. The draft bill my predecessor had for first reading in the last Parliament would have dealt with, and did deal with, the gift situation. Indeed, when I stand before you with a new product warranties Act, which I hope is in the not-too-distant future -- I’ll be here, I hope you’re still here, sort of -- I can assure you we won’t be dropping that

section of the legislation. It does concern us. We’re continuing to deal with that problem. I think it’s easily solved, as exhibited by the bill introduced last session.

Mr. Davison: My goodness; if I could spend $59,000 on each of my election campaigns I would be here forever.

Hon. Mr. Grossman: You’d win by more than nine votes.

Mr. Davison: Finally, before we leave this, there’s been a lot of criticism of your ministry in a very general vein. I noticed the other day comments arising out of the Bevlen Building Products case where Judge Killeen said that Ontario legislation, including the Consumer Protection Act, falls far short of the mark in protecting the public from the kinds of selling tactics that were involved in that case. There were charges brought by Professor Belobaba of Osgoode Hall. There are examples of surveys. Here’s one where a number of lawyers and judges were asked if they had ever heard of the Business Practices Act, and the vast majority answered in the negative.

I’m aware a lot of that is unfair criticism, because I really haven’t dug into the ministry. They’re not really aware of the statistics. I notice from your briefing book the following statistics. Could you tell me if I’m misinterpreting them? The way I read it, under the Consumer Protection Act in 1976, you received, classified and closed 6,095 complaints. However, arising out of those 6,095 complaints, there were only two prosecutions under the Act. So out of over 6,000 cases closed, there were two prosecutions.

In the Motor Vehicles Act, 2,713 complaints were closed; and there were 45 prosecutions. In the Pyramidic Sales Act, there were 29 complaints and no prosecutions. In the Real Estate and Business Brokers Act, 575 complaints were closed with two prosecutions; the Travel Industry Act, 276 complaints, four prosecutions.

I don’t know how we can get into a situation if my

interpretation of these statistics is correct, where consumers seek recourse under the Consumer Protection Act and only two cases of 695 have actually been wrong and were prosecuted. If my

interpretation of those statistics is not unfair, then I wonder, when we get down to the specifics, if some of those general criticisms may well be appropriate and that your ministry isn’t really living up to the commitment it’s making to consumers.

Hon. Mr. Grossman: Yes, I think you’ll find that even in the jurisdictions which have a reputation, justified or otherwise, for a lot of prosecutions and high profile activity, the number of prosecutions, using the same comparison you’ve used, is relatively low. Ours is not terribly out of line, although it is lower than, for example, BC’s would be. Nonetheless, I don’t think you’ll find BC’s to be an enormously high figure.

The reason is most jurisdictions, including our own, concentrate on, as I’ve said before, immediate action, stopping the practice in the marketplace, issuing cease-and-desist orders for appropriate cases; getting the people in and effectin