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December 11, 1980

31st Parliament, 4th Session

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Hansard Transcripts

Hansard Transcripts

L138 - Thu 11 Dec 1980 / Jeu 11 déc 1980

ORDERS OF THE DAY

URBAN TRANSPORTATION DEVELOPMENT CORPORATION LTD. ACT

URBAN TRANSPORTATION DEVELOPMENT CORPORATION LTD. ACT

HIGHWAY TRAFFIC AMENDMENT ACT

HEALING ARTS RADIATION PROTECTION ACT

CORRESPONDENCE FROM PRISON INMATE

AUDITOR’S REPORT

STATEMENTS BY THE MINISTRY

COCHRANE DISTRICT LEGISLATION

ENVIRONMENTAL LEGISLATION

DURHAM REGIONAL ENVIRONMENTAL HEARING

PLANT CLOSURES AND TERMINATION ENTITLEMENTS

SPEAKER’S CHRISTMAS PARTY

ORAL QUESTIONS

INTEREST RATES

LIQUID INDUSTRIAL WASTE

USE OF ASBESTOS IN SCHOOLS

NIAGARA ESCARPMENT DEVELOPMENT

ONTARIO HYDRO LAND PURCHASES

COMMUNITY SERVICES CONTRIBUTION PROGRAM

LIQUID INDUSTRIAL WASTE

MENTAL HEALTH SERVICES

AID TO PENSIONERS

PHYSICAL EDUCATION

SUPERMARKET PRICING SYSTEMS

UNIVERSITY ADMISSION

MINISTER’S COMMENTS

GOVERNMENT ADVERTISING

ALGOMA UNIVERSITY COLLEGE

URANIUM CONTRACTS

COMMENT BY MEMBER FOR OAKWOOD

LEGISLATIVE PAGES

QUESTIONS ON NOTICE PAPER

PETITION

LIQUID INDUSTRIAL W4STE

REPORTS

SELECT COMMITTEE ON PLANT SHUTDOWNS AND EMPLOYEE ADJUSTMENT

STANDING COMMITTEE ON GENERAL GOVERNMENT

STANDING COMMIITEE ON REGULATIONS AND OTHER STATUTORY INSTRUMENTS

MOTIONS

ORDER OF BUSINESS

PRWATE MEMBERS’ BALLOTS

COMMITTEE MEETINGS

APPOINTMENT OF MEMBER

INTRODUCTION OF BILLS

ENVIRONMENTAL PROTECTION AMENDMENT ACT

SUCCESSION LAW ACT

NORTH COCHRANE DISTRICT LOCAL GOVERNMENT ACT

INSURED HEALTH SERVICES ACT

ENVIRONMENT STATUTES AMENDMENT ACT

ANSWERS TO QUESTIONS ON NOTICE PAPER

BUSINESS OF THE HOUSE

ORDERS OF THE DAY

DENTURE THERAPISTS AMENDMENT ACT

TORONTO HOSPITAL STEAM CORPORATION AMENDMENT ACT

TOWN OF MIDLAND ACT

CITY OF OTTAWA ACT

TOWN OF MIDLAND ACT

CITY OF OTTAWA ACT

MUNICIPAL AFFAIRS AMENDMENT ACT

MUNICIPAL AMENDMENT ACT

LEGISLATIVE ASSEMBLY ACT

EXECUTIVE COUNCIL AMENDMENT ACT

PENSION BENEFITS AMENDMENT ACT

The House met at 10 a.m.

Prayers.

ORDERS OF THE DAY

URBAN TRANSPORTATION DEVELOPMENT CORPORATION LTD. ACT

Hon. Mr. Snow moved second reading of Bill 190,

An Act respecting Urban Transportation Development Corporation Ltd.

Hon. Mr. Snow: Mr. Speaker, I would just like to make a brief explanation of this very brief but very important bill that we have before us this morning.

The bill outlines the

interpretation of the Urban Transportation Development Corporation, which is a company fully owned by the province of Ontario but incorporated by letters patent dated October 10, 1974, issued under the Canada Corporations Act. It is a regularly incorporated company under the federal act. The shares are totally held by me on behalf of the government of Ontario.

Section 2 of the bill declares “that the Urban Transportation Development Corporation is not an agency of Her Majesty in common law nor a crown agency within the meaning of the Crown Agency Act.” This is a similar clause to

section 13 of the Ontario Transportation Development Corporation Act, which corporation was incorporated by act of this Legislature.

Section 13 was included to state that the corporation was not a crown agency under the meaning of the Crown Agency Act.

As UTDC was incorporated under the normal method of incorporation, that was not included. We wish to give the corporation that status. That makes the corporation an operating company subject to the same rules and regulations basically as a regularly incorporated business corporation except that, as I understand it, the corporation is exempt from federal income tax under the Income Tax Act since it is more than 90 per cent owned by the crown.

The purpose of this is to confirm that the corporation is a separately operating business corporation. It will be subject to several laws of the province, such as the Planning Act and the Labour Relations Act, just as any other corporation is. It would not be exempt from those acts as a crown agency is. It will also make a difference as far as the statute of limitations is concerned, and the employees would be private sector employees and not employees of the crown.

The other main purpose of the act is to provide for guaranteeing the performance of contracts or the indemnity by the crown. As the government of Ontario is the only shareholder and the owner of the corporation, this is not an unusual procedure at all when entering into performance bonds for the carrying out of contracts. I know that when any corporation is requesting bonding by the major surety companies of the world, those bonding companies will in almost every instance, ask for guarantees by the parent corporation or by the shareholder of the corporation.

I know from my own experience, having been in the construction industry for about 25 or 30 years and procuring bonds for the carrying out of contracts, it is always the procedure of the surety company to request guarantees from the owners of the company whether they be private individuals or other corporations. This provision of the act provides that the Lieutenant Governor in Council may, on behalf of the province of Ontario, provide such guarantees of indemnity to the surety company on behalf of UTDC.

10:10 a.m.

This would provide for the corporation to obtain the normal performance bonding that any company would be expected to provide in the carrying out of any significant commercial contract. This bill provides for that purpose. That is the explanation of the bill.

Mr. Cunningham: Mr. Speaker, initially I should say we will be supporting the bill today, requesting that it go to committee.

Bill 190 causes us some real concern. On the face of it, this small item of legislation appears to be reasonably innocuous but the main thrust of the bill is to permit the Lieutenant Governor in Council, on behalf of the province, to enter into covenants or financial agreements to bond or guarantee contracts entered into by the UTDC.

Over the last six or seven years the Ontario Liberal Party has been somewhat sceptical, at least in a responsible sense, with regard to the rapid transit proposals put forward in the name of this crown corporation and its predecessor. Members of the Legislature will recall the pomp and ceremony and publicity that occurred with the ill-fated Krauss-Maffei system. I think in that year the Premier (Mr. Davis) was the beneficiary of the Transit Man of the Year award. Unfortunately, that system would not go around corners.

That same year, on September 12 or 13, 1974, we had an announcement during the fifteenth annual Premiers’ conference in Toronto, the headline on which was “Ontario and Alberta Join in Urban Transit Development Corporation.” It got headlines in all the local papers. There was a lot of whoop-de-doo in the press. Very briefly it said:

“The overriding theme of the fifteenth annual Premiers’ conference has been inter-provincial co-operation. In part, this stems from an understanding which the province of Ontario gave at last year’s Premiers’ conference in Charlottetown to seek ways by which the various provinces could work together in development programs to the mutual advantage of all parts of this country. Since last year a number of areas of joint participation and co-operation have been explored, one of which resulted in the purchase earlier this year of Alberta coal by Ontario Hydro.

“Today Alberta and Ontario are pleased to announce that the province of Alberta will make an investment in UTDC and will cooperate with Ontario in the development within the private sector of Canadian transit technology and in the Canadian transit equipment industry.” It goes on for five pages. The last paragraph quotes the Premier. “‘The government of Ontario’s original announcement of the corporation and its activities suggested that it should be a corporation serving national interests. Alberta’s participation is a significant step towards that goal,’ Mr. Davis said.”

Mr. Nixon: How much of that Alberta money did we get?

Mr. Cunningham: Not one thin dime, Mr. Speaker. It is regrettable, because I think the intent and the purpose expressed in that agreement and in the press announcement, which obtained a great deal of coverage not only here but across the country, was excellent. It is the kind of thing that, especially in 1974, might have helped to bind us today. It might have helped cement better relations today, but unfortunately, for a number of reasons, Alberta changed its mind on this situation and chose not to enter into an agreement.

Three days later, on UTDC stationery, we have a news release. It is dated September 16, 1974, Toronto, and says: “Kirk Foley, president of the Urban Transportation Development Corporation, today outlined a co-operative development program with Douglas Aircraft Company of Canada, Toronto, and the McDonnell Douglas Corporation for a North American application of the GO Urban rapid transit system.” Yet again more headlines right across the country and this was just three days later.

“Earlier today the McDonnell Douglas Corporation of St. Louis, a company noted for its commercial aviation and space exploration activities, entered into an agreement with Krauss-Maffei of Munich for exclusive US rights to the west German company’s magnetic levitation rapid transit technology. The UTDC will receive 10 per cent of the royalties flowing to Krauss-Maffei from its agreement with McDonnell Douglas. This arises out of the corporation’s own licence agreement which was signed over a year ago. The US transportation company will invest at least $20 million in further development of technology now evolving from the GO Urban transit development project in Toronto.

“‘With UTDC and McDonnell Douglas each holding exclusive rights to the use of this technology in Canada and the US respectively,’ Mr. Foley said, ‘We now have initiated a co-operative development program to bring a prototype maglev technology to production status within the shortest possible time.’” That was 1974.

“‘The decision by McDonnell Douglas to enter this field, which will involve engineering, marketing and manufacturing,’ Mr. Foley said, ‘is a result of several years of analysis of the urban transit market in the United States and an evaluation of emergent technologies for high-performance rapid transit.’” It goes on for another four or five pages.

“In making his announcement Mr. Foley stressed that this development program, including Douglas Aircraft Company of Canada, is another part of the UTDC commitment to transfer its technology rights to Canadian industry. This will ensure that the Canadian industry will load in the development of revenue systems produced for markets in this country and for export markets.” That was in 1974.

It is not surprising that we do not regularly get press releases from Mr. Foley any more. I think he anticipates just how they might be used.

I may be wrong and I stand to be corrected, but I do not think we obtained much of our 10 per cent on that. If anything, I do not think we got one thin dime from McDonnell Douglas. That particular arrangement is unfortunately ancient history. McDonnell Douglas was to share in the cost of recovery of the KM technology 50:50, and I do not think that ever happened. The maglev technology soon found its way to the back burners.

Then there was the famous announcement, made I think through the good graces of CFTO-TV, announcing that we had obtained and we were going to perform a contract to build a system from Tel Aviv to Haifa. That project never got going. There was optimism and publicity with regard to a Caracas bid. Thereafter there were bids all across the United States -- Philadelphia, Miami when it was cold up here, Boston, Buffalo. Now there are Los Angeles and latterly Vancouver.

In the meantime, UTDC has spent a small fortune developing technology -- for the most part, technology that I believe the private sector already had. The arrangement with UTDC and Hawker Siddeley to build streetcars for Toronto has been, in my view, moderately successful if at all. The cars are extremely heavy. One can get a foot massage by standing on Front Street listening to these things run up and down the street. They are incredibly expensive. My gut feeling after this experience is that Hawker Siddeley probably could have done the job cheaper and more efficiently on its own.

Not a word has been heard -- maybe it is because again I am not getting the press releases, but I do not sense that there is any progress -- with regard to the UTDC arrangement with Bombardier-MLW. I recall they were going to build articulated streetcars; not a peep. I am inclined to think that particular project is again on the back burners and there is some real doubt.

Now we have an announcement of a project in Vancouver. The Premier, in co-operation with the British Columbia government, has announced an advanced light rapid transit system in Vancouver some two weeks before a feasibility study in that city would be completed. Globe and Mail columnist Robert Williamson said in yesterday morning’s paper -- I will just quote it here for you, Mr. Speaker, in the event you have not had a chance to see it:

“Here, through the political chicanery of the Social Credit government, is something to behold. In a sudden stampede to pre-empt the installation of Vancouver city council and its new NDP mayor and claim the glory for the Vancouver transit system, Victoria has deceived municipal leaders into expecting up to $100 million in cash from Ottawa. The federal cabinet has not even considered the west coast transit aid, and when it does it will be looking at no more than $50 million.”

I had a discussion with officials from that ministry yesterday and I am led to believe that that in fact will probably be $40 million. The long and short of it is that it was a rather hastily arranged proposition. The cost of this is still in some doubt. I think the newly elected mayor of Vancouver is entitled to refer to this possibly as a pig in a poke and hardly the basis of a sound workable business arrangement.

10:20 a.m.

In response to questions from my friend the member for Brant-Oxford-Norfolk (Mr. Nixon), the Premier indicated no such contract exists at this time. Nothing was written and none of the real details had been ironed out.

In fact, there were more questions than answers on this particular project. Will the project be elevated or will it be below ground? Will it be a combination of those factors? Will it be run by computers or will it be manual? Will it be propelled by a linear induction motor or by a rotary motor?

These are all technical questions to be answered and questions that must be of vital concern to those of us who are concerned about the potential liability on the part of the Ontario taxpayer if this project should fail. That is what Bill 190 is all about.

Are there firm prices or are we anticipating cost overruns? Were there cost overruns at the Kingston test track? What is the assessment of the viability of this project by the independent bonding people? Very simply, are we considering advanced light rapid transit when a conventional light rapid transit might be simpler, cheaper and more efficient, and of less risk to the Ontario taxpayer?

What are the natures of the agreements with our subcontractors? Who are the subcontractors? At this point, we are not even sure who those people will be. Have we made or are we making arrangements with Bombardier-MLW? Does Canadair continue to want to work with UTDC? Does Hawker Siddeley Canada Limited? If they do not, and recognizing that UTDC has no manufacturing facility, what Canadian company would do business with us?

It is estimated that upwards of $100 million of Ontario taxpayers’ money has been spent on UTDC to date. Will this project we are speaking of in Vancouver recover those costs, or will this project in combination with the Los Angeles project recover our development costs? Those are questions yet to be answered.

It is estimated that at least 60 per cent of the costs will relate to land acquisition, and construction of terminal stations in the sky and, of course, the track bed itself. It is my understanding that the steel for the rails will not come from Ontario but will likely come from Sysco Steel in Nova Scotia or Interprovincial Steel and Pipe Corporation from the west. That leaves roughly 40 per cent of the cost of this project to be developed elsewhere, and if Ontario contractors were not to be involved, what really is the benefit of this project for Ontario? I think that must remain the fundamental question and I hope the minister will comment on that in some detail.

Through this bill we will be accepting the responsibility for a very large financial bond. I truly and sincerely hope the project works. I want to say this to the minister and I want to go on record very clearly and unequivocally right now, I will be one of the first people to admit I have been wrong on this if what has been proposed turns out to be successful, viable, there is no risk to the Ontario taxpayer and the original purpose of UTDC is achieved.

I remain somewhat doubtful with regard to that, but I would like to say our scepticism with regard to UTDC has not been unfounded. Other questions arise. Why are we putting the people of Ontario en the financial hook on this particular project? Have we tried private bonding companies? The minister has a great deal of experience in that particular endeavour. Have we looked at Canadian surety companies? Have we looked at Lloyds of London? It would almost be beneficial to take a look and see what it thinks of the viability of these projects. I would like to know why we have not gone to Lloyds.

If we have, what does Lloyds of London think about this and what does it think of a money-back guarantee that will exist on a project of this sort that has never been tried or proved, at least to date?

It would be nice to know, when we are granting our friend Mr. Foley the combination to the consolidated revenue fund, the extent of our possible liabilities. It has been said that with Vancouver it might be $300 million. My gut feeling is that the initial estimate of the cost of that project is modest indeed. Now we have word of an LA project and a possibility of bids elsewhere. It is doubtful we will get more than one of those bids in the US, but it would be nice to know and I think it would be helpful to members of the Legislature who would like to be responsible on this, the maximum downfall we may be facing should one or more of these projects fail.

Frankly, I really am delighted to hear that the technical advisory group in Los Angeles is leaning to the UTDC proposal, but again I have some very real doubts about how many jobs will be involved for Canadians and specifically how many jobs will be involved for the people of Ontario. We, through this bill, are putting ourselves on the line. We are on the hook financially. The downside is at great risk to us and I am not entirely sure that a large proportion of the jobs is going to be there for us.

Very briefly, I do not think Mr. Foley has done a particularly good job of helping the minister with his job, and that is keeping the members of the Legislature informed with regard to the corporation’s activities and just what it is doing. We have not denied UTDC funds in the past. I think we have been responsible on that. We have not pulled the plug on this corporation, in the fervent hope that at some point over the last seven or eight years Mr. Foley would come back with an order.

I, frankly, am not one who necessarily believes 100 per cent in Murphy’s law, that being that if anything can go wrong, it is bound to. Often I thought that maybe that was a principle that underlined the UTDC bid policies. However, we have had a number of major capital projects in Ontario be subjected to some doubt. From Hydro across the street, we hear announcements in this Legislature that half of the Bruce B project is mothballed; Wesleyville is half done, it is mothballed; J.

Clark Keith, a $56-million proposition in Windsor, is mothballed, and I think a $2-billion proposition, and I stand to be corrected, at the Lennox generating plant in Kingston is mothballed. That is a lot of money, and if something went wrong on this one, we really could be in a tough spot.

The original intent of the corporation I think was to assist the private transportation sector and develop a catalyst to export this particular material. The thesis remains very valid, but in practice it is now apparent that UTDC is in the process of abandoning some of its original partners and is in fact competing with them. In the recent Buffalo bid, we successfully outbid Hawker Siddeley and another Canadian company --

Hon. Mr. Snow: By about 20 per cent.

Mr. Cunningham: -- which really is inconceivable, because invariably we probably have to go back to those people and get them to do the work. I do not know how they could overbid, if they were interested in the work, and we could come under their bid if we would eventually have to use their services anyway.

It really disturbs me when the government of Ontario, or any government for that matter, chooses to go out and use its massive funding and resources to compete with the private sector. It is obvious that notwithstanding the abilities of Bombardier-MLW, Canadair, Vickers or Hawker Siddeley, none of them has the resources of the province of Ontario, the unlimited resources, and certainly none of them is going to have the key to the Treasury, as my friend Mr. Foley is going to have it when this bill becomes law.

I would like this bill to go to committee of the whole House so some more detailed questions might be answered.

Mr. M. Davidson: Mr. Speaker, we too will be supporting this bill this morning. It is a little difficult for me to talk about a light rail service or any other kind of service. Mr. Speaker, being an old railroader, you will know that when one lives in a community of 85,000 people and very seldom ever sees a train, it is kind of tough to get on track and talk about a rail service.

When we look at this bill we have several questions to raise. Many of the questions have been raised by the member for Wentworth North, who is much more knowledgeable in this than I. He has been the Liberal critic for transportation and communications for some time now and I am relatively new at it.

One of the things that we on this side are interested in is why it is the government is trying to put itself at such an arm’s-length distance away from UTDC on one hand and on the other hand is accepting responsibility for any faults that may occur during the operation.

10:30 a.m.

For example, sections 1 and 2 of the act try to suggest that somehow or other UTDC is not a crown corporation while at the same time all of the shares are held by the Ministry of Transportation and Communications. It is a nice way of saying maybe the government’s philosophy does not agree with the crown corporation structure, but let me assure the minister that I do not know whether he can sell that to the people out there, that the government owns all the shares but somehow or other this is not a government operation.

It is a good trick if they can get away with it, and I suspect by passing this act today they will get away with it in a sense that they will be able to say, “UTDC is separate and apart from us, except we have all the responsibility when it comes to putting up the bucks for performance bonds.” That is something we have to question on this side of the house. I should say philosophically that from a political point of view, were we the government, we would not attempt in any way to separate ourselves from an operation like UTDC. We would make it a crown corporation.

I can understand that when you originally got yourselves involved in this program, and you were a little concerned it was going to fall flat on its face, you would want to keep it at arm’s length and suggest that was something separate and apart. But now, with all the nice announcements you keep popping up with to the effect that suddenly this thing is going to burst out all over -- starting with Vancouver and then Los Angeles and then Miami; it could be going all over the place -- if I were the government I would be proud to stand up and say, “My God, look, we have got something there that is worth while, and it is ours. It belongs to the people of this province.”

Hon. Mr. Snow: It sure does.

Mr. M. Davidson: It may, as you say, but the way this act is written it is saying, “You guys stay over there and do the little operation and if anything goes wrong we will pay the money out of the bottom end, but we can still attach some blame on that side.” I suggest to the minister, if there are failures and the money is going to be taken out of the public purse to cover those failures, then maybe you as the government should accept that responsibility. Maybe you should stand up and say we were wrong and not just stand there and say UTDC told us this was okay, that everything was going to be fine.

I and my colleagues do not understand why it is you have to have that arm’s-length separation between yourselves and UTDC.

Section 3, which gives the Lieutenant Governor in Council on behalf of the province of Ontario the right to post performance bends for the operation of UTDC, is again something we would have to question. Some of those questions were raised by the member for Wentworth North as to whether you have looked at other types of performance bonds. Have you gone to companies and asked them what it would cost you to pay for a performance bond through an agency? We are getting stuck here with $300 million in Vancouver. If you go down to Los Angeles they are going to require a performance bond.

If all of these things get into operation you are going to have performance bonds posted in three or four major centres, all of which are going to be very costly in terms of dollars to the people of this province. If there are any failures in any of these systems that require that bond to be paid, we cannot even tell you at this moment the amounts of money that that may cost the people of this province.

Nevertheless, having said that, I can well see that again the government is putting itself in a position to own the shares through the Ministry of Transportation and Communications, fund the project, post the performance bonds, but at the same time separate itself from UTDC through legislation and not admit that it is, in fact, a crown corporation.

It is rather funny; the member for Wentworth North talked in terms of jobs and of these supposed sales, because none of us is really aware of what kind of agreement or arrangement has been made for the Vancouver system. Questions were raised to that the other day and we really do not have a response nor do we have any idea what the agreement is or the conditions of the performance bond, or any of those things. They are not on board. All this bill does today is legitimize a supposed transaction that has already been made.

Hon. Mr. Snow: That is not so.

Mr. M. Davidson: It most certainly is so. How could a performance bond possibly be posted if legislation has not yet passed through the House?

Hon. Mr. Snow: A performance bond has not been posted yet.

Mr. M. Davidson: There you go. So how do we know what the conditions of that performance bond are?

Hon. Mr. Snow: What a bunch of sceptics.

Mr. M. Davidson: Sceptics? Mr. Speaker, I would like to remind the minister we are not playing with his money, we are playing with the money of the people of Ontario.

Hon. Mr. Snow: I have more in it than you have.

Mr. M. Davidson: You may very well have more in it than I have because I do not have very much. Getting back to the job situation, we have been given to understand that if this project rolls and gets going, if we got sales to Vancouver and sales to Los Angeles, that is going to create a great number of jobs for Ontario.

The other day during question period the Premier indicated that I did not know my mathematics. Somehow or other the understanding was that part of the agreement with the BC government was that a certain number of component parts would be manufactured in BC. The Premier stood up and said when you start from nothing and you end up with 300 jobs, just to use a figure, then you have to gain. He said that was the old math. Thank the Lord I have children who taught me the new math. The new math in my view is, if the potential were 500 jobs and we gave 200 of them away, we have lost jobs in this province. We have not gained, even though we do end up with 300. You do not give away the jobs.

That is why I suggested the other day that the performance bond in terms of dollars is one thing, but in actual fact if you are going to allow the component parts of the units to be made outside the province then your guarantee is really a lot more than $300 million. Your guarantee is perhaps 100 or 200 jobs and all of the benefits those would have brought into the province. Let’s not finagle with figures. There are the facts. Even though you may end up with 200 or 300 jobs, you are still giving some of them away. That is the truth of the matter.

10:40 a.m.

I am like the member for Wentworth North: if I am wrong I will be the first one to apologize, but let me tell the minister, if this system fails and we have to start paying out those millions of dollars, the minister is going to hear from me on behalf of my people.

Mr. Nixon: Mr. Speaker, I appreciate the good spirits of my colleagues and I am extremely interested in this bill. As a matter of fact, I might as well tell the minister that I find it extremely offensive. The Urban Transportation Development Corporation has been in operation for many years and I do not see why, if it requires these cosmetic changes to its corporate structure as well as the very important government responsibility to back it with a performance bond, we could not have had the legislation months or even years ago.

We could have had an opportunity in a committee outside this House to question the officials of UTDC and others who might have had an impartial ability to judge the quality of what we have produced here. Instead, the minister introduces the bill, which lies dormant for a few days, and then it is --

Hon. Mr. Snow: Two weeks.

Mr. Nixon: No, more than two. It was introduced on November 15, I believe. The minister then says this is an important bill that must be carried because --

Hon. Mr. Snow: Almost four weeks.

Mr. Nixon: Everybody is looking at it -- it says November 14. When we questioned the Premier, of course, there was little or no information forthcoming but simply a challenge that would dare us to oppose this bill.

Honestly, going by the record and the information that we have, I personally feel it approaches irresponsibility to support it. I really feel that way. My colleague the member for Wentworth North has gone over the record of UTDC and its various predecessors, which is the only thing that is available to us, and it is a sorry record.

The only break in the corporate continuity was when the chairman either resigned or took a leave of absence to seek a Progressive Conservative nomination. He was defeated by a guy named Spurge Near -- was that not his name? Maybe that is irrelevant, but honestly, there is nothing in the record of either the minister or his corporation to establish any confidence that would lead people on this side, let alone the supposed good business managers who support the minister, to say, “Here is $300 million as a corporate bond which will be paid out of the consolidated revenue fund if your trains do not run on time.”

We asked the Premier about the contract and he really was a little vague about it. He kept referring to the other side of the contract as the greater Vancouver authority or something, and then he went on to say that maybe the province of British Columbia was involved. Is that supposed to instil confidence in those of us on this side who are attempting to get some information that will permit us to support the very confident minister? He knows all of the background and it has been very well put down by my colleague.

He even goes back further than he described, because I was here at the time the original announcement was made. My colleague used the word “fanfare,” and believe me that is a very conservative noun to use in conjunction with what occurred. As I recall, we were all trundled up to the Ontario Science Centre. The very best hors d’oeuvres were flown in from Bulgaria. Everything was there. They had special banners flying from the walls of the science centre. I had a flashback to Nuremberg.

Hon. Mr. Snow: I was not there.

Mr. Nixon: Think about it; all right, the minister was not here.

Hon. Mr. Snow: I was here, but I was not there.

Mr. Nixon: The minister had other responsibilities. The Premier was flanked by -- I do not know whether it was Stan Randall or somebody else; all I can remember was the Premier giving us the same shot that he gave us yesterday: “Shrink back ye of little faith, you people without the breadth of vision even to contemplate magnetic levitation. Forget all this. Go over to the lunch table.” He probably knew my weakness even then. “Leave all these important matters to us. We are working on a worldwide scale, with international agreements.

All of my friends with special connections in the business communities of Switzerland and Germany have advised me this is what to do, that this international corporation with a reputation ne plus ultra called Krauss-Maffei is actually making us the North American agents for magnetic levitation.” It is just a riot when you look back on the damned thing, it really is.

Part of the Premier’s vehemence in response to the rather moderate questions put to him on this is based upon the fact that, in his own selective memory, this is one area he cannot rationalize as anything but an abject failure --

Mr. Mancini: A boondoggle.

Mr. Nixon: -- “boondoggle” is a better word -- and a failure that the electorate, which he is so careful to curry and stroke, has never really been aware of. He has been able to tell us that there has never been any significant amount of money lost on that, and yet I have been out --

Interjection.

Mr. Nixon: All right, I am not objecting, other than to the public relations costs; even the Beluga caviar must have cost somebody something. I regret I had only a couple of little wafers of the stuff and I did not like it very much either.

Mr. Sargent: The last figure was $72 million.

Mr. Nixon: My colleague chimes in with “$72 million,” but, certainly the public relations costs must have approached $1 million.

Even in those days, the Premier had this funny weakness of being carried away with his own enthusiasm. It may be some kind of a background worry about his place in history, that he has to have concrete pylons stuck into the earth with his initials carved on them or something, because the first thing he did was to announce that we were going to have this blooming train run around a test track at Exhibition Park. Even before it had been tested in any way, the holes were being dug, gas mains had to be moved, pylons were poured, trees were ripsawed or chainsawed down, and it was all in the interests of the William G. Davis people mover.

Then, all of a sudden, we did not hear much about it. It turned out the damned thing would not go around corners, and there was some concern that the guideway, if it had even a mere mist of snow on it, would cause the linear induction engine not to work efficiently, or to work sideways, backwards or something like that. So that drifted off.

Then, with bombast, he said we had not lost anything except, of course, the public relations costs, which were really designed not so much to levitate magnetically, but to convince the people of the province, who seemed to be so readily convincible by some of these arguments, that we had entered into the twenty-first century and that Bill Davis was the magus. I was thinking of something like “tooth fairy”, but I have to be careful of that since this House has become remarkably sensitized to some of these words.

The honourable member has put in detail before you, Mr. Speaker, the procedures used by UTDC -- and it used to have another name; I think it had “Ontario” in it: Ontario Transportation Development Corporation. It had several changes.

Hon. Mr. Snow: Only one.

Mr. Nixon: The minister did not even have a corporation when he started this thing. The minister is just like the Premier, who went out to Vancouver and delivered this oeuvre, I think the word is, about a commission on western separation. He must have had a cup of coffee, or maybe two cups of coffee, with a couple of the ministers out there, had a handshake while they looked deeply into each other’s eyes, and have come back with a contract that really is not backed by anything at all.

There are no papers you can lay on the table. The minister himself has said the performance bond has not been signed, so I would think the BC government is not stupid enough to sign anything on its part without Ontario putting all the money up, front and centre, in case anything goes wrong. Does the minister think they are going to take a risk with this business?

We hope it works. We have been listening to their propaganda for years about how wonderful it is. I see the minister has Hugh Winsor on his side in a big way; but even he admits, like most of us, that we love to see trains that work, and that they are exciting and really nice. However, the minister has not gone out of his way to provide any of the information for the members of the Legislature, who are asked to give him the authority to pay out $300 million from the consolidated revenue fund if the thing does not work.

10:50 a.m.

It has never worked in the past. We have seen it going around on television and in the minister’s own promotional films. There are always the minister and the Premier with a broad smile. Mr. Foley, who has joined us, is there, conducting everybody through it, saying: “My God, is that not quiet? You can carry on a conversation standing right beside this as it goes around its nice little track on its little rubber wheels.” Honestly, I do hope it works. I am very interested in this sort of transportation, I really am.

My daughter rides to work on the new streetcar. It is almost half as nice looking as the ones I have seen in Amsterdam, and I do mean the streetcars. She says if you want to get up to signal your station, you cannot reach up and pull a string or push a button. You have to stand up and yell at the guy, “I want to get off at the next stop,” or something like that. It is extremely heavy. It cannot be air conditioned. I like the looks of them and the paint job really is very nice, at $500,000 each.

They had those in Warsaw in 1939, did they not? They ran on electricity and on rails, except that they were lighter. They were just as fast and they were not so expensive but I do not think the paint job was nearly as impressive.

The thing I really find offensive is that the ministry is asking us for this authority, which is very far-reaching, and this could be extremely expensive. We all hope it does not cost us a nickel. We hope that, but we have been so severely disappointed in the past. They tend to oversell the thing even to us.

Hon. Mr. Snow: I have never oversold anything.

Mr. Nixon: The minister is not as good a salesman. All he could do was get 401 six-laned out to his farm. Is that not right? That is one of the things that did not occur in the big speech last week. I was waiting and waiting. We heard about poor old Clarke Rollins getting his shoulders paved and all the rest, but they never get around to the Minister of Transportation and Communications who had 401 six-laned right from outside this office here to his farm, and then it sort of falls off into a gravel road. It is not exactly a gravel road, it is a four-lane, controlled access --

The Deputy Speaker: Now back to Bill 190.

Mr. Nixon: Oh, yes, back to this bill. I was particularly interested in the comments that have already been made about

section 2, about the minister being proud of the fact that he has all the money in UTDC. In fact, its policy stems from the Ministry of Transportation and Communications, and I have a feeling that it is like the Ontario Institute for Studies in Education, educational television and certain other sacred cows in the stable of the Premier. I am quite sure nothing happens in UTDC that he does not know about even before the minister. Is Mr. Foley the president or the chairman?

Hon. Mr. Snow: President.

Mr. Nixon: President and chairman and chief executive officer. I will bet he has Bill Davis’s home phone number and that every time the thing goes over 73 miles an hour or whatever it is, he phones and says: “Bill, wow, it is really working. We are really going.” I have a feeling the Premier is staying in politics to prove to everybody that he can build a railway, that he can really build a people mover.

It will be a relief if he finally achieves it after all the false starts, all the money we have thrown around, all the press releases we have had to wade through and all that crap we have had from him -- if I may use that word, Mr. Speaker; you think about it -- just like what we had yesterday when, since there was no information he said, “I dare you to vote against it.”

Honestly, I really would like to vote against it. It has nothing to do with jobs in the province. All we can do is to look at the record, which has been abysmal. There really has not been anything that we can point to with any pride.

It is hard to sell these things. We know. We have been trying to sell the Candu, which is an extremely good reactor, and there was a time when I was critical of that and it is part of my job to be critical. I cannot look into the future. All I can do is to try to be as responsible as possible and to look at the facts that are available.

I do have quite a bit of confidence in the minister, and it is probably just a coincidence that the highway is six-laned out that far; I believe it is just a coincidence; almost a coincidence. I knew him when he was the chief panjandrum of the regional Lions Club and used to come out and speak to all the clubs. He was pretty definite and personable even in those days. But when it comes to pushing something down your throat, the Premier is the guy who does it.

This only leaves one thing for him to correct, and that is the teensy thing that happened a few years ago when he lost his majority. That is the only thing that would now drive him, assuming that this people mover -- is that really what we call it? -- this thing does function up to the specifications. I do not see any reason why it would not. It runs on wheels; the linear induction motor probably could be replaced by ordinary motors if necessary.

Some hon. members: No.

Mr. Nixon: All right, I see members are saying no and the minister is shaking his head, but the linear induction motor is probably just one of the reasons we ought to think about our $300 million. It was invented years ago. The principle of it is extremely simple and the obvious advantages should have led to its development, if not perfection, half a century ago. But so far the very brightest engineers have not really been able to make it a workhorse type of kinetic energy concept.

Evidently this is an important breakthrough because, obviously, if it works, is reliable and runs the trains on time, we have something that is saleable and valuable. If it does not, it is going to cost us $300 million. We will not even know. By that time the Premier will be retired to a rest home in Brampton and we will be trying to remember to send him a Christmas card. God knows what the minister will be doing; he is going to be specializing in local planning, or something like that.

Hon. Mr. Snow: I’ll have Highway 401 to Campbellville.

Mr. Nixon: All right, the 401 might be six lanes to Campbellford.

Hon. Mr. Snow: Campbellville.

Mr. Nixon: Campbellville, one of those great towns. But I simply want to express to the minister my grave concern that this bill is more important than he seems to realize. In the long run it could cost us an amazingly large amount of money, which he is asking us to approve without giving us any kind of significant background except to say, “Trust us.” The Premier, in fact, says, “Trust me.”

Mr. Hennessy: It’s better than trusting you.

Interjection.

Mr. Nixon: Fine. I am not trying to sell you a pig in a poke. I would know better than that. You are a pretty good salesman too.

I think it is close to irresponsible to put it on that basis. But I would not worry for a moment to take a personal responsibility to vote against it if that would make any difference. I do not want to stop the thing; I hope it works. Whether the minister and his buddy four or five seats to his right believe it or not, I do hope it works, but I will tell him that I get awfully sick of the baloney he and his predecessors have passed out to the long-suffering public in support of these programs. It is about time they got it right.

Mr. Renwick: Mr. Speaker, I want to make two or three points on this bill but I do not want to bring to it the vehemence that the former speaker just brought to the topic. As a friend of the minister I hope he will not, for some time, accept any telephone calls from the Premier without recalling what happened to his predecessor when the doors on the light rail transit at Exhibition Park did not open that day. I think it was the next day that Gordon Carton, the former minister and member for Armourdale, got the telephone call and left the cabinet very abruptly.

Mr. Nixon: He’s now running a milk store; you be careful!

Mr. Renwick: That is just a friendly warning to a friendly minister of the pitfalls of politics that he may not be aware of.

Hon. Mr. Snow: Now, de Grassi Street.

Mr. Renwick: That was my second point.

I was concerned that it was not within the principle of the bill, but now the minister admits that it was, I would like, when the bill is in committee, to introduce an amendment to the bill to provide for the reconstruction of the GO station at de Grassi Street, and for a permanent indefinite stop, at least to the end of the century, for the GO train in that de Grassi Street area.

11 a.m.

I have never had any support from the member for St. David (Mrs. Scrivener), whose riding is immediately across the street on the west side of de Grassi Street. I do not know why there is lack of concern by the Conservative members for people east of the Don and their ability to get to and from work. As I say, I am delighted that the matter is within the principle of the bill, and in committee I will introduce an appropriate amendment which I am sure will have the approval of the House.

The third matter I am concerned about is that we are the authority for an open-ended guarantee that we are permitting, if this bill is passed in its present form, without some kind of limitation or protection. I ask the minister to consider introducing an amendment himself, to save me the trouble of drafting the amendment, to provide first of all for the immediate tabling in the assembly -- and, if the assembly is not in session, immediately upon the assembly being in session -- of the order in council and the contract of indemnity for which the guarantee is going to be given.

We have to have some kind of assurance that at the earliest possible moment the assembly is aware of the nature and extent of the open-ended obligation that is being assumed.

I recognize the difficulty of doing it but, certainly with respect to the financing of the government, there is always a dollar upper limitation in the bill, which will be introduced within the next few hours; I forget the name of the bill, but the annual financial bill which is introduced always has an upper dollar limit in it. Is it not wise for the minister to insert in this bill a protective upper limit for the guarantee and obligation which the government is asking authority to give? I think the assembly should expect that this kind of limitation would appear in the bill.

I ask the minister and his advisers in good faith to see if they cannot draft the kind of amendment to the bill that would do the two things; that is, to provide, for the immediate information of the assembly, the nature and extent of the contract and indemnity that is to be guaranteed; and, secondly, the specific question of whether this bill should require an upper limit and, if the upper limit were going to be exceeded, would require the minister to come back into the assembly and to have it adopted.

I thought a little bit about the question of taking the UTDC out of the Crown Agency Act, and I agree with that way of ordering the relationship between the government and UTDC and the relationship of UTDC to its clients or customers with whom it may from time to time contract. I do not have any difficulty with that aspect of it, but on the other two matters I ask the minister to respond to them and, if possible, to work out a suitable amendment in committee to answer my concerns.

Mr. Kerrio: Mr. Speaker, I rise to speak to one aspect of the bill that concerns me. Having been involved in many contracts over the years dealing with municipalities and companies and having provided performance and maintenance bonds, in nearly every instance, it comes as a complete surprise to me that this government is now seeming to enter into a contract that is complete open-ended, as the previous speaker has just mentioned.

It is one of the reasons that it sort of contradicts the whole philosophy of the Tory party about free enterprise. When a free enterprise corporation enters into performance or maintenance bonds, it limits itself because of the value of the company. In the event that there is a major problem with providing the service or the performance or the maintenance and that company goes bankrupt, what the performance or maintenance bond does is suggest that a company that provides this kind of bonding is willing to see the job through to its conclusion.

Hon. Ms. Snow: That is exactly what we are doing.

Mr. Kerrio: Except, and this is a big exception, the people of Ontario are on the hook no matter what it costs the government. There is no limit. I wonder if any government should put the taxpayers on the hook for that kind of involvement. The railways might be running in British Columbia 10 years from now with the people of Ontario providing the means to keep that transportation system going. That is unconscionable. Unless this government can provide some kind of evidence that is not going to happen, it comes as a complete surprise to me that it should be asking us to put forth this kind of money.

I defy the minister to suggest that it is any different. It is just like the Candu reactor sales.

I am surprised the government does not have a sales group in the middle of this whole organization doing the selling and taking another great big chunk of money. A corporation that can take these kinds of chances and limit itself is one thing but, I say with all respect, it is asking the people of Ontario to take a great deal of responsibility to enter into such an agreement where money will flow continually from the taxpayers of Ontario to British Columbia.

I hope the minister does not enter into another contract with Los Angeles and two or three other places so that he would put this government in a position of not being able to fund it because we will not be able to raise enough money here. The people of Ontario will not be able to support those kinds of involvements.

If the minister can tell us this is a way to provide jobs in Ontario and that is the purpose, I can accept that, just as Candu reactors may have provided jobs for people across Canada. But to come here and tell us we are going to guarantee a system before it has been truly tested seems a most inappropriate way to enter into any kind of contract. I am certain there are not many people in the private sector who would do that. I cannot believe an airplane has ever been put in service that was not pretested and made damned certain it was going to carry people and do the function for which it was sold.

There are not too many people willing to take the risk they are asking the people of Ontario to take -- not the government, which keeps pumping itself up as though this is a great thing the Tories are doing. It is not. The government is really taking money entrusted to it and putting it into a venture that is very questionable and I say, be careful.

Mr. Sargent: Mr. Speaker, briefly, we are in favour of this bill in principle. I am concerned because we continually have these large amounts of money -- $300 million here, the Minister of Industry and Tourism (Mr. Grossman) talking about $700 million for Toronto, building subways for this great area of Toronto, paid for mainly by the outlying parts of the province. We are fed up to the teeth reading bills the government keeps bringing in to squander hundreds of millions of dollars of our money over which we have no control on how it should be spent.

In the Grey-Bruce area we do not have any means of transportation. Our trains have been cut off. Our bus system is run in a half-assed way. We have no way of being connected with this part of the province. We have Canadian National and Canadian Pacific railway tracks with nothing on them. The people in the outlying areas of the province are tossing their money into the big pot down here, watching the Minister of Industry and Tourism and the government throwing away hundreds of millions of dollars.

Mr. Rotenberg: Where is the money coming from?

Mr. Sargent: It is coming from the outlying parts of the province, not from the people down here. We are paying the freight and the government is spending it.

The minister is asking us, in essence, to give him a blank cheque for $300 million and, in any form of business, we have no purchase orders, no signed contracts, no idea of how he is going to assemble it or where he is going to do it. He is saying, in effect, “Give to this one department, not to a crown agency but a special department, $300 million to play with.” That was the last caper Stan Randall pulled.

11:10 a.m.

They could not make it work in Germany, but they have brought it over here with more fanfare than there is now, and it was a fiasco. The minister is now saying to us that he wants this kind of money. With tongue in cheek, I have to support this because it may be good. As the member for Brant-Oxford-Norfolk (Mr. Nixon) says, it may be good for the economy. It may be good for jobs in the province. It may be.

We have seen the minister flop on a lot of other things too; so how do we know he is right on this one?

Mr. Nixon: He has just started this.

Mr. Sargent: And God forbid if he gets mixed up in it. My point is that the minister has totally disregarded the need for transportation in western Ontario. I had planned to come to him and suggest we make a three-point deal, with the federal, provincial and western Ontario municipal governments putting the money in the pot, to let us run a GO train back and forth from Toronto; but we would get nowhere with the government, because we are subsidizing the GO train in Toronto here, including a great wealth of assessment for outlying parts of the GO train areas. We are paying for that through our taxes, but we cannot get the transportation to Owen Sound in the Grey-Bruce area.

As former speakers have said, unless the minister comes up with guaranteed purchase orders and contracts from a would-be buyer, and his modus operandi as to how he is going to build this equipment and where he is going to build it -- the total package -- he has an awful lot of nerve just asking us to give him a blank cheque without these things amended to the contract. Our party is supporting it, but we do it with these things on the record and we will watch him very closely.

Mr. Haggerty: Mr. Speaker, I want to raise one question concerning Bill 190,

An Act respecting Urban Transportation Development Corporation Ltd. I have heard members talk about $300 million but, as I interpret this bill and the explanatory note, it could be $300 million, it could be $1 billion, it could be who knows what. It is a blank cheque.

Mr. Kerrio: It is seed money.

Mr. Haggerty: Seed money; the member for Niagara Falls is correct. It is a blank cheque the minister is going to be issuing to this company. As I look at it, it is a company.

I just question whether it is such a sure thing, this new type of transit car or vehicle that is going to carry passengers on rail. If the minister is so sure of the performance of this thing, why does he not go to the Ontario Development Corporation to borrow the money? Why does he not go to the Federal Business Development Bank?

Hon. Mr. Snow: We are not borrowing money at all.

Mr. Haggerty: He is not borrowing money at all. Surely somebody is going to have to put up some money to get this thing going.

Mr. Kerrio: The taxpayers.

Mr. Haggerty: The taxpayers; that is right. There is a hidden cost in this thing. The minister may tell me that his decision and the performance of that design may look good on paper. I have to say to him that, while I am not an engineer, my experience in the fabricating and machine shop business tells me the minister could have many complications in such a design that is not yet proven. The minister is head of the Ministry of Transportation and Communications. If this thing is that sure, then one would think this minister would be leading the province into mass transit system.

We have the task force on rail services which has reported that the government should be heading in this direction just for the conservation of energy alone.

Hon. Mr. Snow: Did you ever hear of Hamilton?

Mr. Haggerty: Has the minister ever heard of Port Colborne and St. Catharines in the Niagara district? I have mentioned before to the minister that one place he should be trying out this type of transit system -- he should go back and perhaps bring back the old rail service that used to travel between Port Colborne, Welland, St. Catharines and Port Dalhousie. It was an exceptionally good rail service, carrying numbers of passengers on streetcars. That would have been a good place for the ministry to have tried this out and checked its performance, but I have not seen any of that, and I have been sitting here for 10 years.

I know my colleague went through the whole procedure from the beginning until now of the hopes and dreams of having this system work. Until this day, we have not seen it developed in the province. Perhaps it has been tested on the site at Kingston, but I suggest to the minister if it is that good, this is where he could borrow the money.

The system may be questionable because there are people more knowledgeable than the members of the Legislature who might ask: “Is it worthwhile going into the area of development of this proposed advanced streetcar?” They would probably take a good look at it and say, “No.” Somebody mentioned Candu. The same thing applies to them. There are many checks in the system, but again it is not backed by the government of Ontario or taken out of the consolidated revenue fund. Ontario Hydro pays for much of the design and research and development, the same as the Atomic Energy Control Board in Ottawa, which sets it up through its system of checks and balances. We do not seem to have it here.

I am being told to give the ministry a blank cheque for promotion. I hope it is successful, because I am looking forward to seeing new job creation programs in Ontario. I am not convinced that this is the right way to go. I think there are other areas from which the ministry can obtain the money to back it up.

As my colleague the member for Niagara Falls says, any private sector operation has to get a performance bond without the government’s backing. They get it from respectable business people in the industry, who say, “If it is worthwhile, we will back it and support it.” Here, the minister wants a blank cheque, and I just question whether we are moving in the right direction in promoting this new scheme which has not been proven yet. If be wants to try it out in an area to promote his scheme, he should try it in the Niagara district, because we need a rapid transit system there.

Mr. T. P. Reid: Mr. Speaker, I hope I will not repeat all the concerns that have been expressed about this project. I wonder if I could --

Hon. Mr. Snow: How about Atikokan?

Mr. T. P. Reid: If the government is going to spend $300 million, that is as good a place as any and better than most.

I will not go over the history of this thing; it has been an albatross and an embarrassment to the government all these years. We hope it will work and will have the effect we have been promised for almost 10 years.

However, I would like to just pose some questions to the minister in the hope that he might be able to answer some of them in his wrapup. I appreciate the fact that all the specifics are not known at this time, but I hope the minister will have some idea in the back of his mind, or perhaps on paper, as to what is involved in this.

For instance, can he tell us the specific terms in regard to the $300-million bond? What is going to be in this performance bond? Does it cover everything from

an act of God down to a wheel-nut coming loose? Exactly what is involved in this? By the way, I trust, just to add a little levity, that they will not have the minister driving the train, because I do not think we could get insurance for that.

Will it cover the operations of the trains? For what period of time; up to five years? If so, when will it be effective; from the beginning to the end? Will it be when they formally take over the system? Will it be from day one, when the trains start to run? What are the specifics on that?

11:20 a.m.

For instance, again to be specific, if a wheel falls off will the taxpayers of Ontario have to pay for its replacement? If the wheel was supplied by an Ontario company, will that company be obliged to supply the material and labour to replace it on behalf of the Ontario government? Will this be covered under the terms of a performance bond to be submitted by the supplier to whom work was subcontracted?

In other words, is the minister going to require a performance bond from someone else, either the subcontractors or somebody who is going to be doing some of the work under contract to UTDC? What are their performance bonds going to cover and what liability is there going to be for their work by the Ontario government? Let us face it, that is who is going to be responsible. When I say the Ontario government, I am talking about the taxpayers of Ontario.

Who will be responsible for the repair of equipment supplied by a British Columbia company in the event of malfunction of parts, shoddy workmanship or mistakes that can be made anywhere by anybody at any time? Who is going to be responsible for that? Will UTDC be drawing up the specifications for the work that will be done by companies in British Columbia, and will we have inspectors and engineers to ensure that things are built to the standards and design that presumably we have already in Ontario?

In the event of any malfunctioning or damage that might in total exceed $300 million, what liability will rest with the Ontario taxpayers? To take the worst case presumably -- and I am sure somebody would have insurance somewhere -- if there were an accident of some kind, if there were material damage or damage done to human beings by way of accident, how far is this liability going to go? In a project this large, conceivably it could be more than the $300 million. Is that going to be part of the performance bond, or is a separate insurance policy going to be provided?

These are all questions we are concerned about. As one of my colleagues mentioned, we are buying something of a pig in a poke, because we do not know the specifics. I hope the minister will be able to provide some of them here today.

My final question is, if the minister does not know all the specifics -- I presume he does not and will not be able to answer each and every question -- will he guarantee this morning that, as soon as the performance bond is drawn up and the specifics are known, that bond will be tabled in the Legislature so the members of the House and the public at large will be aware of its specifications and qualifications?

Hon. Mr. Snow: Mr. Speaker, I shall try to respond to the comments I have heard from my colleagues on the other side of the House. Listening to this debate today, it reminded me a great deal about when I started in the construction business on November 30, 1948. At that time, as a young fellow, I thought it might be a good idea and there might be a future in the construction business in Ontario and, having a total of $600 in working capital to my name, I decided --

Mr. T. F. Reid: You were wealthy even then.

Hon. Mr. Snow: No. I thought I had better get some advice; so for instance, I talked to a number of fathers of friends of mine who I chummed with in those days and I told them I was thinking of starting in the house building business in the town of Oakville. To the last one, everyone advised me this would be a foolish move, after all, this building boom we had in 1948 was almost over, and the demand for houses in the future could not possibly last. If I ever built that house, there would never be a customer to sell it to.

Mr. T. P. Reid: But you didn’t have the government of Ontario backing you to the tune of $100 million, did you?

Hon. Mr. Snow: No, I did not. I have never had the Ontario government backing me in anything. As I usually did and as I usually do to this day, I got advice from everyone possible and then did what I liked.

Mr. T. P. Reid: Could you have lasted 10 years without government assistance?

Hon. Mr. Snow: All I can say is that it usually worked over the years.

The member for Wentworth North (Mr. Cunningham) went into some of the history of the UTDC, OTDC, Krauss-Maffei and so on. He discussed something about a meeting of the Premiers of Canada when there was some agreement amongst them to have a co-operative effort with other provinces being shareholders of a corporation. I must say there was some planning for this type of arrangement shortly prior to my taking over responsibility for this ministry. It was considered and discussed with the federal government.

It became the Urban Transportation Development Corporation because the federal government and others did not want to be shareholders in anything called Ontario, which is understandable. When I got into the thing and when there were so many strings being attached by other possible shareholders, mainly the federal government, I recommended to my colleagues in cabinet that we not proceed with other shareholders in the corporation. The Urban Transportation Development Corporation has remained a wholly owned Ontario government company. It was not a case of people backing out.

I met in Edmonton with Dr. Hugh Horner, who was the Alberta Minister of Transportation at that time, and we discussed UTDC. Dr. Horner said to me: “We have a commitment with you. If you want us as shareholders, we are still with you. We will become shareholders of the company.” As I say, we did not proceed with bringing in other shareholders.

Mr. Cunningham: Did you put out a big press release saying that?

Hon. Mr. Snow: No, I did not, as a matter of fact. I do not want to go into all the history. We all know the discussion on magnetic levitation. The proposal did not work. We happened to be astute enough business people that we could see that proposal was not going to proceed. As soon as we found out the problems, the German government withdrew its support of the program on the other side of the Atlantic. Through the very excellent negotiations by my predecessor and Mr. Foley Ontario was paid its total costs on the project. The papers were tabled in the Legislature which members have seen, I know. The total costs were paid by Krauss-Maffei when it cancelled the contract.

11:30 a.m.

The honourable member for Wentworth North stated the private sector had the technology, that it could have done all these things. We all know that is a lot of claptrap. It is not true. There is no technology in the world today like the technology we have now. There is no doubt in my mind that UTDC is looked upon around the world as having the best technology in transit today.

It was very interesting to hear the honourable member say Hawker Siddeley Canada could have built the streetcars cheaper, designed them cheaper, and so on. It was very interesting that in the bids on the streetcars for Buffalo, the low bid was $34,780,000; UTDC $35,771,000; Siemens was $37 million; Bombardier was $39 million, and Hawker Siddeley was almost $43 million. So they certainly are economical when it comes to bidding.

Mr. Nixon: We put $100 million into our firm and Hawker Siddeley has to find its investors.

Hon. Mr. Snow: That is absolutely a total fabrication.

Mr. Nixon: We put $100 million into UTDC, did we not?

Hon. Mr. Snow: We have not.

Mr. Nixon: How much did we put in? What were the total ball park figures initially?

Hon. Mr. Snow: We have invested $6 million capital in UTDC. My ministry has had a development contract on the intermediate-capacity transit system program for something in the neighbourhood of just over $60 million. That has nothing to do with Hawker Siddeley and their price on streetcars.

Mr. Cunningham: You would have to reflect that in your cost. If UTDC got the contract, who would they have build it?

Hon. Mr. Snow: There would have been numerous subcontractors.

Mr. Nixon: Hawker Siddeley --

Hon. Mr. Snow: Hawker Siddeley could have been one of them for a portion of it. There are many other companies that were involved in the subcontracts.

Mr. Cunningham: What are the names of them?

Hon. Mr. Snow: I can give you the names of every one. There was Garrett Manufacturing Limited, SPAR Aerospace Limited, IT and T, Dominion Foundries and Steel Limited -- how many more do you want?

Mr. Cunningham: The shell game.

Hon. Mr. Snow: The member would not know how to play shells.

Mr. Cunningham: I cannot afford to.

The Acting Speaker (Mr. MacBeth): Mr. Minister, this is all very entertaining but I think we should ignore the interjections. This is second reading. Get on with your remarks.

Hon. Mr. Snow: The honourable member is concerned about the assessment of the viability of this product. I would like to draw to his attention the fact that UMTA, the Urban Mass Transportation Administration of the federal government of the United States --

Mr. Conway: I am with UMTA.

Hon. Mr. Snow: It is obvious the member does not know what he is talking about. It is obvious he does not want information.

Mr. Kerrio: Where do you have one running that is carrying people?

Hon. Mr. Snow: In Kingston.

The UMTA organization did a complete study of the UTDC technology, and approved it as one of the four suppliers of this type of technology for projects funded by the federal government in the US. I think that has to be one of the greatest pluses. The Los Angeles technical committee, made up of their transit authority, their engineers, their specialists, did an evaluation of the proposals put in for the Los Angeles system. As I announced the other day, they recommended to the Los Angeles council that the UTDC proposal was the best for their system based on a number of factors.

The member wanted to know whether we were going to recover the $60 million to $70 million that we invested in developing this technology out of the one contract in Vancouver. I would have to say no, and we would not expect to. When one develops a technology like that, one does not expect to recoup development costs on one job. The member for Niagara Falls is nodding his head. He knows that.

When Boeing developed the 747 at a cost of God only knows how many million dollars, it would probably have to sell 400 to 500 747s before it would have its development costs back in its pocket. Similarly with any such product as that: de Havilland, in developing the Dash 7 and Dash 8, will have to sell 200 or 300 airplanes before it will recover its costs -- that great crown corporation owned by the federal government.

Canadair spent hundreds of millions of dollars developing the Challenger, which has been very successful and sold more than 125 airplanes, I believe, although they have not got their final certification yet. The company will not recover those development costs until it has sold a couple of hundred airplanes, I am sure.

Mr. Kerrio: You did not get the Arrow money back.

Hon. Mr. Snow: No. That was all spent in Ottawa by the Liberals.

Interjections.

Hon. Ms. Snow: We know who spent it; we know who stopped it too. Those are two different things.

I am told that the development or installation of these transit systems, as far as jobs are concerned -- and jobs are one thing we are all concerned with -- will provide something over 300,000 man-years of work for each $100 millions of contract. With a little bit of new or old math, whichever one wishes to use, with the Vancouver project and the Los Angeles project, if they both evolve into contracts, we have something like $800 million worth of contracts there. That comes out to something like 24,000 man-years of employment over the next five years.

That comes very close to 5,000 man-years of work per year for five years. That, of course, would be spread out in the manufacturing end, the civil engineering end and all aspects of the contract. However, it adds up to a lot of employment.

It has been suggested that private bonding companies should be bonding this contract. I assure you, Mr. Speaker, that is the proposal, that a private bonding company would bond UTDC to the British Columbia government or to the greater Vancouver transit authority or whoever the final contract is signed with. That would be a performance bond to guarantee the performance of the contract.

Mr. Kerrio: If Ontario went broke. Because we keep paying as long as we can pay. That is what that does.

Hon. Mr. Snow: I am trying to explain it, Mr. Speaker, and I will try to disregard that. Comments coming from the other members of the House who are not as familiar I could understand, but not from the member for Niagara Falls.

The Acting Speaker: Mr. Minister, please disregard their comments. Sometimes I think you invite them.

Hon. Mr. Snow: First of all, when someone gets a bond to bond him on the contract, the bonding company issues a bond, which is a standard form that guarantees the fulfilment of that contract by that company, in this case by UTDC. But that bonding company also will ask the principals behind that company for their guarantee. The member for Niagara Falls states he got a lot of bonds in his construction business and never gave a personal guarantee to the bonding company. I would have to doubt that very much.

Mr. Kerrio: Oh, yes I did.

Hon. Mr. Snow: I know, I went through it for years. I had to sign guarantees; my wife had to sign guarantees. I had to sign over my life insurance policies and I had to tell them how many bats I had in the belfry and how many pigeons in the loft. Those bonding companies want to extract every bit of blood they can out of someone before they put their name on the line. In this case my wife and I did, as owners of our company. We put our money where our mouths were and we guaranteed that our company could perform that bond.

11:40 a.m.

Mr. Kerrio: You were limited in your assets, so when they were gone the bonding company would finance completion of the contract.

Hon. Mr. Snow: All the bonding company would do would be to take everything I had, except my wife.

Mr. Kerrio: That is my point.

Hon. Mr. Snow: The thing is that in this particular case the government and the people of Ontario are the owners, the shareholders of UTDC, so all the bonding company is asking is for the principal of UTDC, which is the Ontario government, to stand behind its company in the same way it would ask me to stand behind mine or the member for Niagara Falls to stand behind his. That is exactly the way it is and I do not know what is so difficult to explain about that.

Mr. Kerrio: You are putting the taxpayers of Ontario on the book.

Hon. Mr. Snow: That is right, but unless one is going to go and bury one’s head in the sand some place with the ostriches, one has to be on the hook some time.

I am not sure where I was, but there have been a number of questions asked as to who the contractors will be. There will be many subcontractors to UTDC on any one of these projects, whether it is the project in Hamilton, Vancouver, Los Angeles or wherever. I cannot tell the members who every contractor will be. Obviously, the civil engineering work, the construction of the guideway, the installation of the transformer banks, the transformer vaults, the installation of the rails, all those things that go together to installing that part of the contract, will be tendered and will be with contractors probably based in British Columbia.

It is impossible to construct a guideway in Ontario, construct guide piles in Ontario and transport that pile foundation to Vancouver, but that seems to be what I am being expected to do, which is crazy. We estimate that roughly 50 to 55 per cent of the total value of the contracts will be in the civil engineering structure and that type of work, whether it is Los Angeles, Hamilton or Vancouver, and will be done at the site of the installation. Surely we can understand that.

That leaves probably about 45 per cent of the value of the contract in the rolling stock, the engineering, the linear induction motors, the control systems, the signals system and so on, which will basically be built by contractors in Ontario. UTDC is not going to become a manufacturing company, UTDC may be assembling and testing the components once they are assembled into the car. It will be responsible for that end of the project and for the total engineering design, supervision of the overall transit system, wherever it will be.

I cannot tell the House who is going to supply every nut and bolt in the project. There are many capable manufacturing companies with capacity in Ontario to manufacture the car bodies, to manufacture the trucks. The number of companies that can manufacture the linear induction motor is limited. SPAR is the expert in the linear induction motor. We have Westinghouse Airbrake for the braking systems. I do not know whether that is for this or whether that is for the streetcar, but these are the type of Canadian manufacturers.

Garrett Manufacturing was one of the big manufacturers for the streetcar, not for the ICTS, but those are the type of companies that will be doing the manufacturing of the many different components that will go into the actual system itself.

I do not knew where the member got the idea that the steel rails were going to be bought some place else. Where was that? I cannot tell the House where the rails would come from for Los Angeles. Obviously there are rail rolling companies in the US. I understand the Japanese market supplies rails to the US. I cannot say they are going to go from Ontario. That will depend on bidding and so on.

I would certainly expect that rails for any project in Canada would come from Algoma Steel in Sault Ste. Marie. The honourable member talks about Interprovincial Steel and Pipe Corporation. Some years ago I used to be a shareholder of Ipsco and I surely never understood it was a company manufacturing railroad rails. It may have gone into that. Maybe he knows something I do not; that is possible. But the major company that manufactures rails in Canada is Algoma Steel and it would be very likely Algoma would be the supplier. This. of course, would supply jobs in Sault Ste. Marie, in transportation and in many other spinoffs. One cannot trace the jobs to where they end up.

I would point out there have been comments about the Premier’s visit to Vancouver last week, about his peering into somebody’s eyes and coming up with a vision. I do not know where that came from. I would tell the House, this project has been negotiated for many weeks and months. On November 25, 1980, there was a press release from Mr. Edward Lumley, the federal Minister of State for Trade. He has been working with and had many discussions with UTDC about its technology and is most interested in seeing it developed and sold offshore. His press release stated the federal government was prepared to assist in the funding of a transportation system in BC, developed by UTDC.

The minister said federal assistance would be on the condition a Canadian system was used. He also said “a contribution would be directed primarily towards engineering design and prototype work, with vehicles and control systems being developed by the Ontario corporation,” referring to UTDC. That announcement was made by the federal government long before Mr. Vander Zalm, British Columbia’s Minister of Municipal Affairs -- who I might say was in the gallery here about two weeks ago when he visited Toronto -- made his announcement last Saturday morning.

Mr. Cunningham: Two weeks before the feasibility report was completed.

Hon. Mr. Snow: I do not know where you got that idea. I will not comment on it. It sounds ridiculous.

Mr. Cunningham: The Globe and Mail.

Hon. Mr. Snow: The Globe and Mail is not the fountain of all knowledge although it seems to be the fountain of yours.

I have probably answered most of the questions from the member for Cambridge while replying from the notes I have for the member for Wentworth North. I think the member for Riverdale summed up as well as I could the good reason, or probably better, for

section 2 of the bill not setting aside the corporation as a crown agency.

The member for Cambridge again discussed lost jobs to the province that were never here. If there are 25,000 man-years of employment created by this $800 million worth of construction and if 60 per cent of those are in Vancouver, Los Angeles, Hamilton or wherever the structure is built, it supplies jobs in those areas, but that leaves about 45 per cent of those jobs mainly in the manufacturing sector in Ontario.

11:50 a.m.

There may be some subcontractors involved in the development of the car, and some may be from Quebec, BC or wherever. In the manufacturing industry, there are many specialized products that one has to buy where they are produced. There will still be a tremendous number of high technology jobs provided in Ontario. I cannot tell the House exactly how many there will be, but I have given you my best estimate.

I was most interested to hear the member for Brant-Oxford-Norfolk enter the debate. I have heard that same speech several times. When I first came to this House in 1967, my former colleague Mr. Simonett used to sit just behind me and hear that speech and answer questions about the nuclear generating station at Pickering. The honourable member mentioned he had great doubts, and was perhaps his severest critic. He used to suggest to the government and to Mr. Robarts at that time that we were leading the Ontario taxpayers down the garden path.

Mr. Nixon: No, no. You are misquoting me.

Hon. Mr. Snow: I am quoting the intent, as I recall it from when I was sitting over there in -- I hate to say it -- the seat now occupied by the member for Etobicoke (Mr. Philip). I used to look with longing eyes at these front benches on this side. I well recall the member for Brant-Oxford-Norfolk and his sceptical attitude towards research and development: why were we spending this money on nuclear power, why was a certain boiler delivered last week with some damage done to it, and how much was this going to cost the taxpayers of Ontario?

Mr. Nixon: Who is going to ask those questions if we don’t ask them? By the way, how many of those have you sold outside Canada? How much money have you made on any one of them? Not a heck of a lot.

Hon. Mr. Snow: Mr. Speaker, if we are talking about Candu reactors, we are talking about the federal agency that is responsible for the selling of Candu reactors.

He talked about the record of UTDC and how bad it was. I have to say I am 180 degrees away from the member on that. I know he really did not mean that, because I know that member and he is a rather sincere, nice sort of fellow. Usually he takes a rather equalized approach to these things, so I take that comment with a grain of salt. I think UTDC’s records of performance, of development and of achievement to this day have been unequalled by any other organization I can think of.

Maybe the member should read the

article in Popular Science magazine last month which stated what great accomplishments UTDC has made. I will see that he gets a copy. Again, I refer to the Urban Mass Transportation Administration and its evaluation of UTDC, to the Los Angeles people and their evaluation, and to the BC people who were down here.

Mr. Nixon: Why can we not evaluate it? We are paying for it.

Hon. Mr. Snow: Over the last five years as this technology has been developed, members of this Legislature have been invited on numerous occasions to take advantage of the chance to visit and be briefed on it. Nothing has been hidden. Members of the legislative committee, including the members for Wentworth North and Etobicoke, have gone to Kingston to be briefed on the development as it progressed.

Mr. McClellan: In a few years the public accounts committee will go out and look at it too.

Hon. Mr. Snow: We hope you will.

There is a problem in trying to explain how a contract of this type is developed. It is not like us designing a bridge where we design specifically what has to be provided. Contractors who are prequalified by the ministry bid on that bridge; they do not bid options or alternatives. They all have to supply the same bridge. When the tenders are opened, unless there is some imperfection in his bid, the low bidder in 999 cases out of a 1,000 is awarded the contract and the contract document may be signed within a week, allowing that contractor to proceed.

In this type of business, going back to when we bought the double-decker GO Transit cars, I recall an announcement was made by my predecessor of the contract. I signed the contract probably three or four months after the actual contract was awarded but after all the evaluation and details of that contract were worked out. Before I actually put my name on those contracts, it was three or four months after the announcement that the contract was awarded.

The tenders on the Buffalo streetcars went in six weeks ago or two or three months ago, I am not sure. They are being evaluated. Some people bid on four-axle cars and some bid on six-axle cars. The Japanese car may not meet the specification. We are the second bidder. I am not saying we are out of that contract now. It is not like bidding on a bridge when one knows he is out when he is not the low bidder. We do not know where it stands at this moment. They are evaluating those bids. They may scrap the whole works and recall it. We do not know what they will do.

When they evaluate the bids, as Los Angeles evaluated the intermediate-capacity transit system bid and made its recommendations, the technical committee in Buffalo may come back to city council and recommend that the UTDC bid, after taking all things into consideration, is the lowest. What we have at this time is a proposal that has been put to Los Angeles and a proposal to Vancouver and these have been evaluated. Now it has been recommended that these proposals be accepted. The detailed contract will be worked out. The performance bond will then be provided and I assure you, Mr.

Speaker, the performance bond will be tabled in the Legislature. One request was that the order in council be tabled. As you know, Mr. Speaker, orders in council are posted after every cabinet meeting. I do not think it is necessary to table it in the Legislature.

I regret that the member for Brant-Oxford-Norfolk -- this hurt me a little bit and I would like to look at Hansard -- referred in a somewhat derogatory manner as far as promotion goes to my predecessor. I happen to think that my predecessor, the late Honourable John Rhodes, was one of the finest members this Legislature ever had and a fine Canadian. I wish he were still with us and I regret he was brought into this debate.

Mr. Nixon: On a point of order, Mr. Speaker: If the minister is under the impression that I do not agree with him about the qualities of the late John Rhodes, then I certainly want to say very clearly that I do. He was a personal friend of mine and I admired him. I was talking about the minister’s predecessors who go back for quite a while. Some of them did make some mistakes. I do not know any of them who was perfect.

Hon. Mr. Snow: Mr. Speaker, I certainly understood the member to refer specifically to myself and my predecessor.

Ms. Nixon: Predecessors.

12 noon

Hon. Mr. Snow: The member for Riverdale discussed open-ended liability of the power that is granted in this act for the Lieutenant Governor in Council to guarantee performance of contracts. I really do not know how to deal with that matter because I do not know how it would be possible to put a limitation on it. I suppose some limitation could be put in the bill, but things move very quickly.

I would hate to see a situation wherein the corporation had an opportunity for a contract and, because of the limitation in the bill and because the Legislature was not in session during the summer recess, we were not able to take the contract because the Lieutenant Governor in Council was bound by a limitation as to the number of guarantees that could be outstanding at any one time.

We can almost expect that any contract for a transit system will be something over $150 million to $200 million and rise. As we see the Vancouver contract, eventually, taking into consideration inflation and escalations, by 1986 it will probably be $650 million.

I assure the House it is the intention of the corporation to ask only for the necessary guarantees from the Lieutenant Governor in Council to guarantee the outstanding bonds at any particular time. Of course, a great many of these bonds will be offset by performance bonds that we will receive from subcontractors.

If we are calling for tenders in the Hamilton project, for instance, for the construction of the concrete guideway -- and that may be worth $10 million or whatever -- then we would be obtaining a contract performance bond from that contractor, whether it be Piggott Construction, McNally and Sons, KBM Ready Mix Concrete, or whoever might make the successful bid. They would give a bond to UTDC that they would successfully perform that part of the contract.

Then you call the electrical contract for all the major substations, and so on. That contractor would, no doubt, be providing a bond. I am not going to say that every time we want to buy $100 worth of nuts and bolts we are going to ask a hardware store to bond us. Obviously, that is not going to happen. But a considerable portion of the overall liability will be offset by subcontract bonds to the corporation.

The member for Niagara Falls referred to airplane manufacturing companies testing their planes before they sold them. I would like to draw to his attention that that is exactly why we developed the Kingston test facility: so we could develop this technology, test it and have those three vehicles running around that track. I do not know how many thousands of kilometres they have put on. Very extensive testing has been done. It is very similar, basically, to the testing that is carried out in the development of a new aircraft. The only difference is that you do not end up with a final certification from some bureaucrat to say it is all completed. That is about the only difference.

The member for Erie made a great many comments about our borrowing money. He asked us why we did not go to the Ontario Transportation Development Corporation. As far as I know, OTDC is an arm of the government. To borrow from OTDC is to take money out of one pocket and put it into another. I would point out that we are not borrowing money. What UTDC is asking is that its shareholder, myself and, through me, the Legislature, guarantee its performance bond as any other company would ask its shareholders to do. The corporation runs on a normal basis and does normal bank financing just as any other company would do.

I would remind the member for Erie that the first system I expect to see running with the ICTS technology will be in Hamilton. That is fairly close to the Niagara Peninsula.

The member for Rainy River had a number of specific questions. The terms of the bond, as I said, will basically be a standard performance bond. It will be tabled. The member heard the Premier give that commitment. If he wants to see the bond, that is fine.

The bond will cover the performance of the contract. There will be subcontract bonds. UTDC will be the prime contractor. UTDC will be responsible for the specifications and the supervision of the contract. I am already committed, as is the Premier, to the tabling of any performance bond the Legislature requests.

Motion agreed to.

Ordered for committee of the whole.

House in committee of the whole.

URBAN TRANSPORTATION DEVELOPMENT CORPORATION LTD. ACT

Consideration of Bill 190,

An Act respecting the Urban Transportation Development Ltd.

Section 1 agreed to.

section 2:

Mr. Nixon: Mr. Chairman, I have been interested in the debate as to why it was necessary for the House to declare that UTDC, which is wholly owned by the government of Ontario on behalf of the people, is not a crown corporation. I listened to the information put forward by the member for Riverdale (Mr. Renwick) and the minister, but it seems to me if we have to convince the people with whom we are doing business that we are not unnecessarily protecting ourselves as crown corporations, we could write into the specific contracts any protection the buyers might possibly require.

It just seems ridiculous for this House, having set up this public company with the Minister of Transportation and Communications as the single shareholder on behalf of the government and the people of Ontario, to pass

section 2, which says this is not a crown corporation.

As a matter of fact, I rather resent being asked to give up any protections crown corporations normally have that might be there. Those protections have been established over many years of tradition and enactment for the very purpose of protecting the taxpayers against some bad corporate judgement that might be entered into by individuals no matter how extensive their experience in using their wife’s life insurance for bonding purposes.

There is no way I would ever question the minister’s motives, credibility and responsibility, but this is or should be a crown corporation. If we cannot sell what the crown corporation has developed, technically and with hardware, then I suppose we could consider permitting a contract that divests us of specific protections. I resent

section 2, and I am not convinced it is necessary.

Hon. Mr. Snow: Mr. Chairman, I do not know how much more I can say. It is a way of clarifying the corporation. It is not a crown corporation. It is a business corporation incorporated under the Canada Corporations Act. The member and I could go out tomorrow -- maybe this afternoon if we could pull a couple of dollars together -- and incorporate a company under the Canada Corporations Act. This is what this is. It is a business corporation. It so happens that Ontario is the shareholder for that corporation.

To remove any doubt as to the fact that it is a business corporation rather than a crown agency, I have been asked by the Attorney General (Mr. McMurtry) and the Treasurer (Mr. F. S. Miller) to clarify that point in this bill.

12:10 p.m.

Mr. Cunningham: Mr. Chairman, I am sorry to prolong this, because we have gone on a long time and I know there are other matters that the Legislature would like to consider, but in view of the fact that it is quite clear that as of October 1974 this is a corporation under the Canada Corporations Act, this really is redundant. The corporation’s standing is quite clear.

Why would the Attorney General ask the minister to come here today and, basically through this item of legislation, indicate that UTDC is not a crown agency. It is very clear that it is not a crown agency. UTDC is a corporation under the Canada Corporations Act, 1974. Is this not superfluous? What are the reasons that the Attorney General has asked the minister to do this?

Possibly to stimulate the minister here, is it so that the corporation does not have to come to the estimates? Is it so that the corporation, when it is bidding for these projects, can say that it is not related to the province and is an entity unto itself?

I am having a difficult time understanding this. The minister was asked this question specifically in debate by the member for Cambridge (Mr. M. Davidson), by the member for Riverdale (Mr. Renwick) and latterly by my former leader, and we have not heard any answers on it.

Hon. Mr. Snow: No, Mr. Chairman, it has nothing to do with the estimates. The relationship of the corporation to my ministry and the committee studying estimates will not change. I believe what it does is it limits the liability to the taxpayers of Ontario to the investment that the taxpayers have put into the company and the guarantees given to the company. In other words, the government does not need to be brought into any third-party action in a case of a dispute with the corporation.

Mr. Cunningham: The next

section indicates that the province, through the cabinet, will allow a guaranty, covenant or indemnity in connection with any contract the separate corporation enters into. Frankly, I am doing the best I can to understand the minister, but I am having a very difficult time understanding the relationship of this company to the government and the potential pitfalls for the Ontario taxpayer.

The minister has made reference to a Buffalo project, we have read about Los Angeles and now we are talking about Vancouver. There could be a myriad of others. Quite frankly, if the worst happened -- and sometimes it does, especially in Hydro projects -- we could be in for a lot of money. I am just wondering to what extent sections 2 and 3 are in conflict.

Hon. Mr. Snow: I have explained the reason. I cannot understand why no one can understand it. I feel it is clear anyway but, by clarifying the fact that it is not a crown agency, we have said the employees will not be civil servants; the changes of statute of limitations make the corporation subject to the Planning Act and Labour Relations Act The employees of the corporation have the protection of the Labour Relations Act and all those types of things but it limits the liability of the province to the investment that we have put into the company and the value of guarantees given to the company.

Mr. Cunningham: Through the minister’s explanation I think I have developed an understanding of it. It does not limit the liability; it limits the time in which somebody ostensibly could recover some moneys as a result of the failure in the corporation. If I am wrong there, let the minister tell me. If UTDC is a crown corporation, then legally -- and I am not a lawyer -- there is a time limitation during which one can attempt to sue the crown to recover moneys that one feels the crown owes one. I believe that, under the act, notification must be within six months.

This being separate and unique from that, the provisions of common law would apply. I think that is the reason. Is that not the reason?

Hon. Mr. Snow: Not really. That is one of the things it does, I believe, under the statute of limitations. Someone who was going to bring action against the corporation, if it were a crown corporation, would have to do it within six months. This would give them six years or some such period to do that. But it limits the liability the taxpayers can be put to. We have invested, as I say, $6 million or whatever in shares in the corporation; so we have an investment there. The corporation has assets if it makes money and what not. It has its own assets.

If we guarantee $300 million for a bond, the maximum is the liability. Just as if one buys shares in any other company, one puts one’s money up as an investment, and the personal guarantee one puts up in this case is a guarantee of surety for the bond.

Mr. Cunningham: If this private corporation operating pursuant to the Canada Corporations Act is involved, let’s say hypothetically, in some negligence and 400 people go off one of these embankments or whatever and there is a tremendous loss of life, would the province’s liability in that regard be limited in the context of common law?

Hon. Mr. Snow: Yes, as I understand it. That is a specific reason. If some disaster happened, the suits would be against UTDC, their insurers and so on, but they would not be able to bring in Ontario as a third party to the action.

Section 2 agreed to.

section 3:

Mr. Cunningham: Mr. Chairman, so that we might better understand the potential liability we may have in the event of a failure, is the minister prepared to undertake today to table the presentation he has made to Los Angeles and to Vancouver -- I see his lawyer shaking his head --

Mr. Nixon: That’s not his lawyer; that’s his best friend.

Mr. Cunningham: -- and to inform us generally what projects he is in so that we might understand what the very minimum downside would be in the event there was a failure? Is he going to give Hamilton the same guarantee he has given these other areas?

Hon. Mr. Snow: Yes. Hamilton would be the same thing. Because it is one of our municipalities, I expect the contract will be between the regional municipality of Hamilton-Wentworth and UTDC for the installation of the system. The fact that the money is coming from the ministry by way of grants is the same as their buying from UTDC instead of buying buses from General Motors or whomever.

I cannot give the honourable member a guarantee or a commitment to table documentation of tenders and specific contracts that include much information. It is proprietary information, and no company could continue to do business if that type of information were being made available to their competitors, to the Japanese and French companies we are bidding against in this type of system.

As far as the bonds are concerned, normally when one gives a performance bond for the performance of the contract, it is either a 50 per cent bond or 100 per cent bond for the performance of that contract.

Mr. Cunningham: We are being asked, through

section 3, to grant the power to the cabinet to provide and enter into those covenants, agreements of guaranty, bonds and so on. I would like to know from the minister whether they have attempted on any occasion to go to the private sector, to private surety companies such as Lloyd’s or United States Fidelity and Guaranty or whomever? Have they gone to the private sector to attempt to obtain these very same indemnities possibly to lessen the liability of the people of Ontario in the event that something does go wrong?

12:20 p.m.

Hon. Mr. Snow: As I tried to explain several times, that is exactly who would be supplying the bond. I do not know about Lloyds; maybe they are in the bonding business -- they are in almost everything. United States Fidelity and Guaranty, Canadian Indemnity and different other bonding companies supply performance bonds. I would fully expect that one of those companies would be writing this bond for UTDC.

What we are saying, as I have tried to explain and I have discussed with the member for Niagara Falls (Mr. Kerrio), is that what we are doing is giving a guarantee to the bonding company, the same as he would give a guarantee to a bonding company if he were getting a bend for his company to build a bridge or whatever.

Mr. Kerrio: Mr. Chairman, the bond actually does nothing for the corporation. The bond is being insisted on by the buyer. It does nothing for us because, in reality a bond does not protect the selling agency. We have guaranteed, through the consolidated revenue fund, just to keep pouring money in there to do what has to be done. So the only demand for this kind of guaranty is from the buyer. Is that right?

Hon. Mr. Snow: That is right, Mr. Chairman. It would be the bond provided, just as, when I used to be in the construction business and we bid on a new school or something like that, the specifications would call for either a 50 per cent or 100 per cent performance bond. I would have to arrange with United States Fidelity and Guaranty to supply me with that bond if I were successful in obtaining that contract. In the bond document itself, the contract for indemnity would set out the limits of the bond’s liability.

The bond I said we would table in the Legislature would set out the limit of the liability of that bond, and the guarantee for the bond cannot be more than the limit of the liability of the bond.

Mr. Cunningham: I understand it is a little difficult to tell us to what end we might obtain a percentage return on this project with regard to development costs but, in the context of our responsibility as it relates to funding this potential liability, to what end does the province recover development costs or profits from this corporation? Does the money go back to the UTDC or will it ultimately come back to the province?

Hon. Mr. Snow: They should be one and the same. If UTDC makes a $50-million profit out of this $650-million contract, or whatever, that is a profit to UTDC. The corporation can use that money for increased working capital, for new research and development or for working capital for other projects, or it can declare a dividend and pay a dividend to the shareholder; as I am shareholder, they cannot declare a dividend without my approval.

Mr. Cunningham: I am not entirely certain whether this relates directly to

section 3, or either to

section 1 or

section 2, but I would like to ask the minister to table the evaluation he made reference to from UMTA, in view of the fact that we are going to be doing a fair bit of business with them.

While he considers that, I would also like to ask whether he would table the Buy America agreement so that we might have an idea, especially with regard to American projects, of the extent to which Ontario corporations under that policy will be able to participate, and whether Ontario people will lie able to get jobs through this.

Hon. Mr. Snow: Do we have a document from UMTA? They have done an evaluation and have approved the use of technology that qualifies for their funding by Los Angeles, Miami and Detroit.

Mr. Cunningham: Do they do it over lunch, do they issue a statement, or what?

Hon. Mr. Snow: The message I got here is that we will table the

summary results. I presume that is a

summary of the evaluation. I was hesitant on what I could table because of what UMTA gave us. They have approved our system for installation in those cities, but they may not have given us all of the very technical evaluation they have done.

Section 3 agreed to.

Sections 4 and 5 agreed to.

Bill 190 reported.

On motion by Hon. Mr. Snow, the committee of the whole House reported one bill without amendment.

HIGHWAY TRAFFIC AMENDMENT ACT

Hon. Mr. Snow moved second reading of Bill 188,

An Act to amend the Highway Traffic Act.

Hon. Mr. Snow: I am sorry, Mr. Speaker; there was a change in schedule. I was not anticipating proceeding with Bill 188 this morning. However, a number of the sections involved in the bill relate to the reciprocity agreement and the provision of all the details for legalizing a CAVR cab card that would take the place of a licence when a vehicle from another province is operating on our roads. The main

section provides for an appeal on the medical standards, as I announced on first reading of the bill.

Mr. Cunningham: Mr. Speaker, we have taken a lot of time on an earlier bill which was a very technical bill and one that has either great benefits for the people of Ontario or possibly some great problems some time down the road. I would like to restrict my comments on this bill very briefly.

I want to commend the minister for bringing in these amendments. We all are very supportive of less duplication of regulations, especially in the transportation industry across Canada. Quite frankly, I am very keen to admit that in Canada I think the extent of our regulatory process is somewhat less than what is seen in the United States, that is, after one gets a licence.

In the United States when one has to travel from state to state one just about has to be a lawyer to maintain a firm grip on the different fuel regulations, weight restrictions, length restrictions, insurance restrictions, indemnity restrictions, et cetera. Many of those states are in conflict. The reciprocity agreements here help facilitate a more orderly movement of goods across this country.

Section 16, with regard to the responsibility of drivers when directed by officers to proceed to scales, is a rather important

section relating to enforcement. I want to go on the record again very clearly as stating that, if we are going to have a regulatory system of the movement of goods in Ontario, it is fundamental to improve our enforcement system. This is a step in that direction, as is

section 22.

It is very distressing to people who obey the law, who go through the regulatory process, make applications to the Ontario Highway Transport Board and, more important I suppose, pay the licence fees to know that others are not going through that process but are skirting the law and sometimes avoiding the law where they can and are able to obtain benefits from that. It is very distressing to people who obey the laws to see that as a reality here.

I know we cannot have a Green Hornet, as the people in the industry refer to some of our enforcement officers, at every corner or every mile on the highway. But if we are going to maintain the system we have, and it is not a bad system at all, we have to step up the vigilance on the enforcement, especially as we contemplate the movement of dangerous goods and commodities in Ontario.

I hope

section 22 can be broadened in time to permit some expansion of authority in that regard.

12:30 p.m.

My final comments relate to the provision for appeals and a re-evaluation of the ability of some of our people, who heretofore have been looked upon as being disabled, to drive on our highways. I knew the minister is a fairly decent individual and I suppose is as compassionate an MPP as any of the rest of us. He gets the brunt of a lot of calls from members of all parties with regard to drivers who have been disfranchised and denied their right to drive certain trucks or buses after a heart attack, another medical condition or, as many of us are aware, diabetes.

Frankly, the blanket application of some of the policies contained in one of our regulations, in my view, is somewhat unfair. I think this amendment will go a long way. It is a step. My personal preference would be to see drivers evaluated on their individual merits, not withstanding any regulation we may have, and to have a medical advisory committee, complete with an appeal process, judge the efficacy of an individual’s licence.

With the large number of drivers we have in Ontario, it is not an easy job and I am totally sympathetic with the ministry and the task it has in determining the right of an individual to drive a vehicle carrying other people that would be sufficiently heavy to do a lot of damage to somebody if an accident occurred.

I can think of a situation in my own constituency, if I may elaborate briefly. A gentleman came to me. He had had a coronary blockage. He had not at that time had a heart attack, or an infarction, as the regulation would have it. He went through the operation and, by way of law, the medical practitioners were required to notify the ministry that this operation had occurred.

The long and short of it is that, after the operation, the individual was a healthy man again and the blockage had been corrected. Ironically, this man was far healthier than he had been for many years. His licence, unfortunately, had to be removed. We negotiated and worked very carefully with the assistant deputy minister for safety and regulation, who was extremely co-operative in this and wary at all times of the possible danger to the public. Ultimately it was determined that, as a result of this operation, this individual was healthier than he was before the operation and really was not a danger to anybody.

Often that is the case with coronary patients, especially with people who may have had a lifestyle or conditions of living that would contribute to a heart failure, rather than a congenital situation. Many of them, as we read in the paper, moderate their living habits, take up jogging and do what they can to improve their lifestyle. After a heart attack or an infarction, they may be far healthier than they were for many years and at no great danger to the rest of the driving public.

The same, I suggest, applies to people who have diabetes. As we approach 1981, which I understand will be the International Year of Disabled Persons, we should be reflecting with a little more insight upon the problems of many people who have, through no fault of their own, such an affliction as diabetes. It is not a disability, but it is often perceived to be such. It is such a common disease, unfortunately, that I am sure almost every one of us has had contact with someone who is affected by diabetes. My grandfather was so affected and was able to function for the larger balance of his life. Ultimately, he did not die of diabetes.

We are having problems right now, and I have raised the matter with the Minister of Labour (Mr. Elgie). I am quite confident that he will endeavour to look into this situation in great detail, but prospective employees and current employees of Brewers’ Retail are now required to obtain licences that would allow them to drive Brewers’ Retail trucks, notwithstanding the fact that only probably 15 to 20 per cent of them would ever have to drive a truck on any occasion.

The blanket application of this policy by Brewers’ Retail ostensibly means a diabetic cannot work for that company. It is a rather silly situation. I raised two specific examples with the Minister of Labour on this. I think he tends to agree that it is a discriminatory type of proposition, and it is a situation that may not see current changes or current regulations affecting a change. Conceivably, if a young man or young lady was affected by diabetes at age 13 or 14, naturally he or she would not have had a licence and naturally would not be able, in a retroactive fashion, to have a licence returned. I commend the minister for the amendments and we support them.

Mr. M. Davidson: Mr. Speaker, we, too, in the New Democratic Party will be supporting the amendments that have been placed before us today. While the entire bill as amending the Highway Traffic Act is a good one, we are particularly pleased with sections 9 and

Section 9 is the one where an appeal process is now going to be allowed for those who have lost their licence or had their licence downgraded as a result of some form of medical disability, and we are pleased to see that the minister has included that in the amendments before us today.

I say that because the member for Wentworth North (Mr. Cunningham) is absolutely correct. I doubt very much if there is a member in this Legislative Assembly who has not at one time or another had someone from his own riding approach him with the fact that he has had his licence taken away for medical purposes or downgraded so that the person can no longer perform the job he had been doing. It is a situation where in many cases there are corrective surgeries or various other treatments that can make this person capable of returning to the health he once had, at least in a controlled situation.

Such people should be given the opportunity to have the decision of the registrar reviewed and perhaps have their licences reinstated.

I point out just one case. There is a Mr. Gourgon of Ottawa who had been a transport driver for most of his working life. He is a gentleman in his forties. He had his licence downgraded as a result of an angina condition. But in 1980 he went through corrective surgery to the heart and apparently, according to the information we have received from his doctor, his cardiologist states he is less likely to suffer heart problems now than previous to the operation and his health is better now than it has been for years.

This is a prime example of a gentleman who probably will take advantage of the appeal process once it is put into effect in an effort to get his licence back so that he can go back to doing the work he was doing previously.

Section 13 deals with the handicapped, and my colleague from Bellwoods (Mr. McClellan) will be speaking to that

section a little more specifically than I. We in this party are pleased to see that the minister has included this amendment in the bill, given that over the years there have been very serious accidents and implications resulting from the transportation of handicapped persons. I hope passing this amendment will make that a little bit better for those people.

We do not want to hold up passage of this bill. I do not want to spend too much time with it, other than to say that we are in agreement with the bill. We have no intent to amend any

section of it.

12:40 p.m.

Mr. B. Newman: Mr. Speaker, I rise to support Bill 188. I intend to speak on only two sections of the bill. One is

section 9, which deals with the downgrading of a licence because of a heart condition. I speak on this because three different constituents have contacted me within the past month and made mention that their chance for continuing in their employment had been completely eliminated as the legislation had been until that time. With the inclusion of

section 9 in the bill, they can see there is the opportunity, if they provide medical evidence, that their licences can be restored to them once again.

Under

section 9, an individual by the name of Russ Collins has contacted me. I brought his problem to the attention of Mr. Mackie in the ministry office. He was extremely cooperative as far as obtaining information was concerned and in advising me as to what I could pass on to Mr. Collins. Mr. Collins is the gentleman who appeared in the Legislative Building last Thursday and actually intended to demonstrate because he was los