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May 25, 1981

32nd Parliament, 1st Session

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Hansard Transcripts

TRIBUTES TO DAVID LEWIS

NONAPPEARANCE OF MINISTRY OFFICIALS

POINTS OF ORDER AND PRIVILEGE

PRIVATE MEMBERS' BILLS

STATEMENTS BY THE MINISTRY

GREAT LAKES/SEAWAY TASK FORCE REPORT

ORAL QUESTIONS

VAUGHAN TOWNSHIP LAND USE

EDUCATION COMPRESSION

INTEREST RATES

TAX INCREASES

TENANTS' DEPOSITS

CORPORATIONS TAX

OPP SALARIES

VAUGHAN TOWNSHIP LAND USE

CABLE TV OPERATIONS

SKILLS TRAINING

REXDALE FIRE

EDUCATION RECORDS

SPADINA EXPRESSWAY; HYDRO CONTRACTS

DOMTAR DISPUTE

INTRODUCTION OF BILL

LANDLORD AND TENANT AMENDMENT ACT

ANSWERS TO QUESTIONS ON NOTICE PAPER

MOTION

ESTIMATES

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

HUMAN RIGHTS CODE (CONTINUED)

MASSEY-FERGUSON LIMITED ACT

The House met at 2 p.m.

Prayers.

TRIBUTES TO DAVID LEWIS

Mr. Smith: Mr. Speaker, I know all three leaders will want to rise in the House and pay tribute to the late David Lewis. It was my understanding that both the other leaders were going to be later than they are, but they are both here a little earlier than I was led to believe they would arrive. In deference, I will wait for the Premier to make his comments and I will be happy to add mine afterwards.

Hon. Mr. Davis: Mr. Speaker, it grieves me greatly to note, on behalf of the government and on behalf of all members, the sad and untimely passing of David Lewis, former leader of the New Democratic Party of Canada.

Born in Poland in 1909, David Lewis came to this country and built through his own hard work, commitment and determination a career of service to all Canadians and to the cause of democratic socialism in which he so deeply believed. A lawyer, Mr. Lewis served as national secretary, national vice-chairman, national chairman and national president of the Co-operative Commonwealth Federation between the years 1936 and 1961. He served as a federal vice- president of the New Democratic Party before being elected to the Parliament of our country and to the leadership of the party he served so long.

First elected to the House of Commons in 1962 and re-elected in 1965 and 1968 and again in 1972, he also knew his share of defeats in the many elections where he contested a constituency on behalf of the CCF and NDP. I do not rise in my place to merely indicate officially our government's sadness at his passing. David Lewis spoke for a vision of this country that was essentially humanitarian and decent. He spoke eloquently, with unlimited courage and heart, for a society of social justice, security, tolerance and decency within which personal opportunity and freedom could be enjoyed by all.

What we have lost in this country is a man who had the courage of his convictions; a man who rode the train in the 1930s and 1940s from coast to coast and from town to town, campaigning for causes in which he most deeply believed, with no remuneration, without thought for his own comfort or wellbeing. We have lost a man who humanized politics for many of us despite our fundamental differences of opinion over the best means by which to achieve commonly shared goals.

The product of working-class immigrant Canadians, a Rhodes scholar and a legal scholar of unparalleled ability and skill, a member of Parliament, a tireless political partisan, a committed social democrat, national leader of his political party, David Lewis symbolized through every stage of his life the opportunity that this country provides for all of those who are prepared to pursue it and the will which we all share to improve not only our own circumstances but also, more important, the lot and opportunities of our fellow citizens.

I know I express the most sincere and heartfelt sympathy of all in this House when I say to his devoted wife, Sophie, to his children and grandchildren, and particularly to his son and our former colleague in this House, Stephen, how deeply we all share the profound loss which they now must face.

The people of Ontario share with me, as they do with every member of this House, a profound sense of loss with the passing of a great Canadian, a committed social democrat and a citizen for whom the welfare of his fellow citizens was by far the greatest concern.

Mr. Smith: Mr. Speaker, all of us feel the same sense of loss which the Premier has expressed on behalf of the government and the people of Ontario at the passing of David Lewis.

I remember the first time I ever heard of David Lewis was when I was a university student and my father told me of this person, whom he had regarded as a hero, who used to debate at McGill and to stand up for left-wing causes in centres where they were not particularly popular and who, generally speaking, used to come out on the winning side because of his silver-tongued oratory, his great wit and his combination of intelligence and human compassion.

I feel that Canada has had very few people over the years in public life who combined that sense of merriment, that ability to put things in plain terms and that sense of dedication which allowed David to come from times that were very difficult, when they used to have to meet in basements in Montreal and elsewhere, eventually to the point where he was able to succeed not only in being elected but also in leading his party to a very substantial number of seats in the federal House. Almost all the ideas that David Lewis stood for have been incorporated one way or another by parties of various political stripes.

I think it is fair to say that his influence will continue to be felt for many years to come.

All of us knew Stephen, of course, and all of us want to send our very heartfelt personal condolences to him, to the other members of the family, and to Sophie. I think for the most part we did not know that David Lewis was suffering from leukaemia, and his death was quite a shock to us all, in addition to being a very grave tragedy and disappointment.

All we can say at a time like this is that we can only be grateful that our country had the benefit of the life of David Lewis and his ideas and his spark and his humanity. We are thankful that he was with us, and we are deeply sorry at his death. We send our very deepest feelings of sympathy and most sincere condolences to his entire family, who must be not only sad but also very proud of the contribution that David Lewis has made to this country.

Mr. Cassidy: Mr. Speaker, the news of David Lewis's death came as a shock to everybody in this Legislature and to everybody within the New Democratic Party across this province. I too would like to say some words of tribute to a man who was a towering figure in the political life of our country.

The role he played within the New Democratic Party and in the formation of the New Democratic Party, and in the Co-operative Commonwealth Federation before that, was one that absolutely could not have been replaced in terms of the contribution of the party, which to such a degree he helped to mould, towards bettering life for average Canadians by seeing that this country got such great social programs as medicare, the postwar welfare legislation and hospital insurance.

2:10 p.m.

That contribution is in large measure due to the fact that, although J. S. Woodsworth provided the original inspiration for the Cooperative Commonwealth Federation, it was David Lewis who, beginning 35 years ago when he became the national secretary of our party, was the man who provided the energy, the drive and the determination, and who held together a fledgling party, which at that time was often threatened with extinction but which survived in large degree because of the willpower that he brought to it.

David Lewis's role in the history of our country still remains to be written. It is one of my personal regrets that David Lewis's own account, his autobiography, was only half finished at the time of his death. He had written of some of the early years but had intended to write more in his time at Carleton University; now, alas, that will not take place.

His role in helping the labour movement come together in the formation of the Canadian Labour Congress, his role in the creation of the New Democratic Party out of the ashes of the Co-operative Commonwealth Federation, his role in taking on the leadership of his party and then his leadership of the party at the moment of its greatest triumph in 1972 -- all of those are a tribute to his skills as a politician and to his humanity and his capacities of leadership in the many roles that he had within the party and within the country.

But there was more to it than that, because in David Lewis the working people of this country had a champion; a man who was determined to fight for social justice, to fight for the principles of social democracy, to fight for the principles that were embodied in the Regina Manifesto of the CCF, which was adopted back at the founding of our party; and a man who was prepared to put the demands and the needs of his countrymen and of his party ahead of his own personal comfort or his own personal career and did so for so many years of the life that he spent here in Canada.

On a personal level, so many of us within the NDP owe a tremendous debt of gratitude to David Lewis. He was oftentimes our counsellor, a friend, a man who was prepared to provide support, advice and reassurance at times when things seemed a bit daunting, who had known defeat himself but was therefore able to talk and provide inspiration to us and the party as we fought for the ideals that he had fought for during so many years.

David Lewis was never a member of this Legislature, but I think that in spirit he was a member here because of the very close relationship that existed between David Lewis and Stephen Lewis. The very close contact between the two of them meant that David probably knew what went on in this Legislature better in many cases than did some members of the Legislature itself.

On a personal level, all of our hearts reach out to Sophie Lewis, to Stephen, to Michael, to Janet, to Nina, to all the Lewis family. It is a tragic loss; it is a death that comes as a shock to us all. We had all hoped, we had all expected, that David Lewis had many more fruitful years ahead of him. It is hard to think of the party or the country without David Lewis as a social conscience, David Lewis continuing to provide leadership, David Lewis as a link to difficult years in our past, and David Lewis as a beacon leading on into a future for our country based on the principles of social democracy, based on the social justice for which he fought all his life.

NONAPPEARANCE OF MINISTRY OFFICIALS

Mr. Speaker: On Thursday and Friday of last week several matters were raised that I agreed to take under consideration. First, there was the point raised by Mr. T. P. Reid, Rainy River, who raised what he considered to be a matter of privilege -- perhaps more properly a contempt of the House -- relating to the nonappearance of two public servants whose appearance was requested by the public accounts committee.

I was asked to look into this matter and to report back to the House. I must point out again, as previous Speakers have done, that it is this House which must deal with such questions, and not the Speaker.

POINTS OF ORDER AND PRIVILEGE

Mr. Speaker: The problem of what constitutes a valid matter of privilege or a valid point of order seems still to be causing some confusion. Many members feel that if they are aggrieved by another member in the House they should rise on a point of privilege. While this may constitute a point of order, it is certainly not a matter of privilege.

If the words complained of offend any of the rules or precedents relating to order, then it is a valid point of order which must be raised immediately and not at a later date. If it is something that is genuinely out of order according to the rules of the House and not simply used as a method of gaining the floor, standing order 19(

d) contains a list of actions which have been held to be out of order in debate. This list is not all-inclusive, but it does set out the most glaring breaches of order, such as making allegations against another member, imputing false or unavowed motives to another member, charging another member with uttering a deliberate falsehood or using abusive or insulting language of a nature likely to create disorder.

Privilege is entirely different, as a breach must affect one of the privileges of Parliament and its members. I direct the attention of the members to

definitions of privilege in standing order 18(

a) and in the nineteenth edition of May's Parliamentary Practice.

Standing order 18(

a) defines privilege as follows: "Privileges are the rights enjoyed by the House collectively and by the members of the House individually conferred by the Legislative Assembly Act and other statutes, or by practice, precedents, usage and custom."

May's Parliamentary Practice, nineteenth edition, reads in part as follows: "Parliamentary privilege is the sum of the peculiar rights enjoyed by each House, collectively as a constituent part of the high court of Parliament and by members of each House individually, without which they could not discharge their functions, and which exceed those possessed by other bodies or individuals. Thus privilege, though part of the law of the land, is to a certain extent an exemption from ordinary laws.

The particular privileges of the Commons have been defined as, "The sum of the fundamental rights of the House and of its individual members as against the prerogatives of the crown, the authority of the ordinary courts of law and the special rights of the House of Lords."

Examples of breaches of privilege are:

1. If an action for slander were brought against a member for remarks made by him in the House; or

2. When a member raises a matter of privilege to correct a newspaper report in which he claims to have been misquoted.

In the latter case, he really seeks to set the matter straight and has no intention of moving a motion with respect thereto. The procedure of moving a motion to bring a newspaper writer or editor before the bar of the House is one which has not been made use of in any jurisdiction in the Commonwealth for many years.

PRIVATE MEMBERS' BILLS

Mr. Speaker: The second matter was raised by the leader of the New Democratic Party, who suggested that, in blocking the first reading of Mr. Philip's bill on Thursday, the party supporting the government was blocking a private member from bringing an item of business before the House and of participating in the private members' afternoon.

The vote on Thursday only decided that the bill would not be given introduction and first reading at that time and, in fact, it was introduced without objection on the following day, Friday. It is therefore obvious that the member is not blocked from bringing his business before the House; and he is certainly not prevented from participating in the consideration of the private members' business, as he may use the bill in question if and when its turn is reached on the ballot if he so wishes, or any one of the other numerous bills which he has already on the Order Paper.

Finally, I was asked to rule on whether Mr. Philip's bill constituted a money bill. I have examined it carefully and taken legal opinion and have come to the conclusion that, as the bill attempts to confer no power on the government which it did not already have and merely requests the government to exercise that power, it cannot be considered to direct an expenditure. In fact, it appears to me that, as it has no operational effect, it is of no more force than a resolution and might be more properly introduced as such, requesting the government to take the necessary action.

2:20 p.m.

STATEMENTS BY THE MINISTRY

GREAT LAKES/SEAWAY TASK FORCE REPORT

Hon. Mr. Snow: Mr. Speaker, I am pleased to inform the House that I have received the report of the Great Lakes/Seaway Task Force from its chairman, Mr. Ralph Misener. I will table three copies of the report with the Clerk at this time. Copies of the report are being made available to each member through the legislative post office this afternoon.

As you will recall, Mr. Speaker, the Great Lakes/Seaway Task Force was created last year to examine the existing state of Ontario's portion of the St. Lawrence Seaway system to formulate a fuller understanding of how this great natural resource can fulfil its potential as an integral component of Ontario's overall transportation system.

The report of the task force outlines the concerns and comments of many individuals associated with the marine mode and offers to the province background information and recommendations that will prove useful in future negotiations with the federal government, municipalities along the seaway and representatives from other jurisdictions.

While I have not yet had the opportunity to read the complete report, as I just received it about an hour ago, I am familiar with the broad policy areas explored by the task force, having met with them during their deliberations. I am therefore aware of their concerns relating to the limited capacity of the Welland Canal and that they are calling for a reassessment of environmental issues relating to the ports and waterways of the province.

The task force is also calling for the creation of an information program that will better inform the general public of the economic and industrial importance of the Great Lakes/Seaway system within the diversified transportation mix of our province.

Throughout their deliberations, task force members were well aware of the economic, environmental and fuel conservation issues affecting the transportation industry today. With this in mind, their approach within the terms of reference set up for the study has produced a document that not only considers a wide range of concerns but also clearly indicates Ontario must take a stronger stance on Great Lakes/Seaway policy.

The importance of marine transportation to Ontario cannot be overstated. For example, more than 60 million metric tons of raw materials, grains and other commodities were carried through the Welland Canal in 1980. This immense movement of goods and products not only is important to the industrial sector of the province but also provides a major contribution to the Canadian overseas balance of trade.

As members will recall, my ministry recently established a marine and pipeline office, which will be the focal point for the co-ordination and development of the recommendations contained in this report. Through this office, programs such as the upgrading and expansion of Ontario shipyards and a $10-million annual investment in system improvements -- programs outlined in detail in the Board of Industrial Leadership and Development program announced by the Premier (Mr. Davis) earlier this year -- will be administered.

Once my senior ministry staff has had the opportunity to further review the report of the Great Lakes/Seaway Task Force, I will make a further statement on the direction that government policy will take towards the marine mode.

Finally, Mr. Speaker, I wish to note that we are honoured to have the chairman, Mr. Misener, and the members of his task force in your gallery this afternoon. I therefore want to take this opportunity to express my appreciation, along with that of the government of Ontario, to Mr. Ralph Misener and members of his task force for the time and effort put into the research, preparation and production of this report.

I also wish to add that Mr. Misener, his task force members and the technical advisory committee will be available to answer questions relating to the report in the media studio at 3 p.m. today.

ORAL QUESTIONS

VAUGHAN TOWNSHIP LAND USE

Mr. Smith: Mr. Speaker, I have a question for the Minister of Agriculture and Food. Can the minister explain the very serious contradiction of policy between himself and the manager of the plans review

section of his ministry?

I am referring, of course, to the Ontario Municipal Board hearing over the use of certain farm land in Vaughan township in which the plans review manager -- the same Mr. Pinder who wrote most of the Foodlands Ontario guidelines -- told the municipal board that the land in question should be preserved for agricultural purposes. At the same time the minister wrote a letter to the OMB urging them to rezone the land in favour of a number of real estate developers.

Why did the minister write the OMB with a position that was opposite to that held by the man who presumably had the most expertise in matters of this kind and who continued to hold his position in a day and a half of testimony even after seeing the letter written by the minister.

Hon. Mr. Henderson: Mr. Speaker, I do not have the file with me today. I believe the Leader of the Opposition is referring to a letter written maybe six months to a year ago, looking at an area of land that is not large enough to be an economic operation. The reason my letter went to the chairman of the OMB is as simple as that. If the honourable member will look at the land and the overall plan, instead of looking at the letters he thinks he has, he will find three or four small parcels of land that I suggested were not economic operations any longer.

Mr. Smith: The point is not whether I think these very large acreages would be economic as farms but that the expert within the minister's own ministry, whose job it is to know of these things, spent a lot of time looking at it and spent a day and a half testifying as to his opinion on the matter. The minister's own expert believed these lands ought to be preserved for the most part as farm lands, and he continued to hold that opinion even after seeing the opinion of the minister was somewhat different.

In view of this, can the minister explain why he is now supporting an appeal to cabinet via his letter? Since the OMB agreed with the expert in the ministry, why is the minister now supporting an appeal to cabinet by the developer's lawyer? This man is very familiar to the Premier. He is his former friend and law partner, Ronald K. Webb of Davis and Webb of Brampton.

Hon. Mr. Henderson: This points out quite clearly that the minister does not interfere with his staff and any recommendations they want to make. My letter went forth; my staff were left there to give whatever evidence they wished. That was the letter from me.

Mr. Swart: Supplementary, Mr. Speaker: If the minister cannot interfere with his staff, at least he could have some discussion with one of his colleagues.

Is the minister aware that the plan originally had clauses for phasing of the use of that farm land, although not much of it was to be used? Is he also aware that the Minister of Housing (Mr. Bennett), now the proposed minister of municipal affairs and housing, deferred the phasing part of that plan and did not send it to the Ontario Municipal Board, although it had been requested? By the act he must refer it to the Ontario Municipal Board; it had been requested by APPEAL, the Association of Peel People Evaluating Agricultural Land, the group trying to preserve the agricultural land there, along with about 40 other items.

Can the minister find out for this House why the Minister of Housing did not follow the act and, like the Minister of Agriculture and Food, took the action to promote the use of that prime agricultural land for urban development?

Hon. Mr. Henderson: Mr. Speaker, it shows that the honourable member does not know the area. He does not know the situation as it actually happened.

Mr. Smith: Since more than one member of the minister's own ministry repeatedly examined that land in very great detail, and since the manager of the branch who wrote the food land guidelines continues to hold the view that the minister is dead wrong in his letter, which I understand was based on a brief visit to the site by the member for Elgin (Mr. McNeil), can the minister say whether one of the realities of March 19, now that we are back to majority government, is that we are back to the times when friends of the government can make millions of dollars by means of a well-placed phone call by a well-placed person?

Hon. Mr. Henderson: It is easy to understand why that member is sitting over there. He does not want to face the real world. He does not want to see the facts come out. Again, we, as the government, let our staff make the decisions they wish and we, as ministers, make our decisions.

2:30 p.m.

EDUCATION COMPRESSION

Mr. Smith: Mr. Speaker, I have a question for the Minister of Education. The minister is quoted in the Toronto Star of May 24 as making comments about reducing the 13 years of the curriculum to 12. She is quoted as saying: "What I have said publicly is that we could eliminate grade six or compress other areas of education."

Does the minister not think that it is immoral to give some opinion on the matter of compressing 13 grades into 12 since, when I asked her to give an opinion in this House on that very matter, she said she was unable to do so on grounds that it would be immoral to offer an opinion?

Can the minister explain why she refused to answer a question in this House on compressing 13 years into 12 but went out to another group outside this Legislature and spoke of the possibility of eliminating grade six?

Hon. Miss Stephenson: Mr. Speaker, the Leader of the Opposition asked whether I was in favour of eliminating grade 13. I have not made such a statement and I will not. The question I have asked repeatedly for two and a half years is whether the educational experience that these young people acquire during the period of time in which they complete their secondary school honour graduation diploma could be compressed, and I continue to ask that question. I do not know whether it is possible.

I am prepared to listen to reasonable presentations on the subject, but I continue to ask the question. And it was asked in the form of a question, although it may not have been quoted that way. I am sorry, but I do not read the Sunday Star.

Mr. Smith: The minister's reading abilities or choices notwithstanding, can I ask her either to deny that she made this statement or once again to explain the basis upon which she made the statement? Her statement is: "What I have said publicly is that we could eliminate grade six or compress other areas of education."

Since we on this side had suggested that very compression of 13 years into 12 and were greeted with the point that she could not offer a point of view on that matter, I ask again for the minister to explain when she said publicly that you could eliminate grade six or compress other areas of education, and why she could tell them that and not us.

Hon. Miss Stephenson: If the honourable member reads his question from some days ago in the Legislature, I think he will find that he asked whether I was personally in favour of eliminating grade 13. I reiterate that for the benefit of the slow learner across the House.

As I said, I have publicly asked on a number of occasions over the past two and a half years whether it would be possible to compress that period or whether it was necessary to retain that length of time. I said on Friday morning to a group of school trustees that I had publicly asked the question, "Is it possible to eliminate grade six? Is it possible to compress in other areas of the educational system?" That was precisely what I had asked earlier, and that was the same statement I had made about the question I had asked in other forums.

It may be reported as a statement. I will be happy to look at the article; I have not seen it.

Mr. Grande: Supplementary, Mr. Speaker: Will the minister confirm that she is in favour of eliminating junior and senior kindergartens in our schools, since last year she did withdraw the grants to --

Mr. Speaker: Order, please. That's a new question.

Mr. Sweeney: Supplementary, Mr. Speaker: Given that there is a reference in the report of the secondary education review project to a possible compaction of grades seven through 12 but no reference whatsoever to grade six or anything below it, can the minister indicate what the curriculum reasons would be that she would even make such a proposal?

Hon. Miss Stephenson: Mr. Speaker, another question that I have asked repeatedly is whether we challenge our young people sufficiently within our school system, and I do not know at this point, since I am not a professional educator like the honourable member, whether that is possible to do or not.

If there is possible compression between grades seven and 12 in order to achieve what the secondary education review project is recommending, perhaps as the inclusion of all of the curriculum within a shorter period of time, the question I would have to ask is whether it can be compressed in other areas as well. The question I have asked repeatedly is, "Is it possible to do the compression by the elimination of a year, or must one simply compact the entire educational experience into a shorter period of time?"

I do not know the answer. As I said, I am not a professional educator and, therefore, I am waiting for the considered opinions of all of those who have been charged with the responsibility of looking at this and who will be responding to the very preliminary SERP report, which the Leader of the Opposition wants to make its final report today.

Later:

Mr. Smith: Mr Speaker, on a point of privilege -- a very brief one and it will not be a difficult one: I just want to draw your attention to the fact that Hansard of May 4, 1981, shows in my questioning of the Minister of Education that I made several references to 13 grades -- graduates in Ontario requiring 13 grades,

whereas graduates from elsewhere are accepted after 12 grades -- over and over again. At no time did I say that I thought grade 13 itself should be eliminated, but that the 12 grades should be enough instead of 13.

Mr. Speaker: I will accept that as clarification.

INTEREST RATES

Mr. Cassidy: Mr. Speaker, I have a new question for the Premier about interest rates, now that the prime rate is at 19.5 per cent and may go even higher at the end of this week. The Premier has kept insisting that the interest rates are basically a federal matter, but is he aware that Ontario has a means to help protect people in this province against the effects of high interest rates?

Specifically, since bank profits for the major banks were up by 56 per cent in the first three months of this year, will the government undertake to introduce an excess profits tax on banking operations in Ontario and use the proceeds to cushion interest rate increases for people who have mortgages, for small businessmen and for farmers?

Mr. Cassidy: Since Ontario is such a large part of the national economy, is the Premier not aware that just for the five major banks in the first quarter of this year their profits went up from $277 million to $433 million, a jump of 56 per cent, and that increase occurred because they were profiteering on the basis of the increases in interest rates? Does the Premier not think Ontario should be prepared to come in with an excess profits tax, all of which could be avoided by the banks if the banks stopped charging such high interest rates and gave people in Ontario a better deal on interest rates and stopped imposing the increases?

Hon. Mr. Davis: I should point out to the leader of the New Democratic Party that he can single out the banks if he so wishes, but that a great deal of the mortgage financing is done other than through the chartered banks. A lot of the institutional money finding its way into the mortgage market comes from trust companies, from insurance companies, many of them located in Kitchener, and from many private sources. I guess the member would say, "Let's have an excess profits tax on those people who have their life's savings invested in mortgages."

Mr. Mancini: Supplementary: Has the Premier yet become sufficiently concerned that because of these high interest rates many hard working Canadian families will not be able to continue to live in the homes that they worked so hard these many years to buy and to keep up, and will he assist these Canadian families to keep their homes by implementing the program which he has had available since 1975 and provide interest rate relief to families who wish to keep their own homes and who are unable to do so because of the present high interest rates?

Hon. Mr. Davis: I can only say that from my knowledge everybody who has a home at present wishes to keep it, so that applies to everybody.

I think it is fair to state this government has always expressed a genuine concern with respect to mortgage interest payments, bank interest payments and any interest payments people have to make during these periods of high interest.

2:40 p.m.

Mr. Cassidy: Since Ontario has the constitutional right to put an excess profits tax on the banks and since that is one means available to this province to provide rate relief for farmers, small businessmen and mortgage holders, would the Premier tell the House and the province, is the government prepared to use the powers available to it to protect people in Ontario against high interest rates or has he abdicated his responsibility?

Hon. Mr. Davis: I will answer just the last part of the question. This government never abdicates its responsibility.

Mr. Yakabuski: Mr. Speaker, I am not about to talk about MacEachen, the wrecker of homes, but I did want to ask a supplementary to the question the leader of the New Democratic Party asked of the Premier. In answering, the Premier said on the surface it did not appear feasible. I would pursue that a bit further. In view of the gigantic profits the banking firms have made over the past years, rather than looking at it on the surface, perhaps we could have a much deeper and broader look at the whole affair of bank profits.

Hon. Mr. Davis: Mr. Speaker, I am sure the Treasurer (Mr. F. S. Miller) is always looking at legitimate ways to increase modestly the revenues of this province.

TAX INCREASES

Mr. Cassidy: Mr. Speaker, I have a new question for the Premier relating to the equity of the tax system in Ontario. Does the Premier think it is equitable that after the increases in taxes announced last week a family earning $25,000 a year will, with federal tax, provincial tax and OHIP premiums, pay a tax rate of 31 per cent while the banks which operate in the province and across the country were paying in 1980 an effective tax rate of only 16.1 per cent of their balance of revenue?

Is it equitable that people earning $25,000 a year should be paying an effective rate of tax, including OHIP premiums, almost double the rate of tax being collected from the banking system across the province?

Hon. Mr. Davis: Mr. Speaker, I think one has to be careful getting into these comparisons. I point out to the leader of the New Democratic Party it is not valid to draw comparisons between what we as individuals may pay by way of tax rate and what a bank or a company may pay. One must understand the banks also have shareholders and they pay salaries. People pay taxes on the salaries and taxes on the dividends from the shares they hold. Banks have good years and bad years.

Some years the honourable member would be the last one to acknowledge that if the balance sheet showed something less by way of profit they should receive any modest consideration. This is true not just of banks but of corporation taxes generally.

I think the Treasurer pointed out to the members of this House that one can single out the banks or other areas in the corporate community, but the intention of this government is to remain competitive in terms of corporation or business tax. I think it is fair to state there are many jurisdictions where the corporate tax rate is competitive with ours and where we are not anxious to lose investment because the investment climate in terms of taxation levels may be somewhat more advantageous elsewhere.

Mr. Cassidy: The Premier is defending the fact that even though they had profits last year of $1.4 billion, banks should be paying a tax rate only half that of the average family in the province.

Could the Premier explain the equity of the tax proposals being made by his government under which a family earning $25,000 a year will pay provincial taxes and OHIP premiums equal to 65 per cent of the federal rate, but a family earning $20,000 will pay provincial taxes and OHIP premiums equal to 70 per cent of the federal rate, and a family earning $15,000 a year will pay provincial taxes and OHIP premiums equal to 80 per cent of the federal rate? Why is it that the less one earns, the higher the tax rate in Ontario under the tax proposals the Premier is proposing in this Legislature?

Hon. Mr. Davis: Mr. Speaker, I think perhaps the member was not here last Tuesday evening, although my recollection is that he was. The tax proposals are being made by the Treasurer of Ontario. I will be delighted to get him to explain to the member the equity of the tax proposals he is presenting.

Mr. Smith: Supplementary, Mr. Speaker: Perhaps before the Premier washes his hands totally of the budget presented by the Treasurer, I might ask him, when he is talking to his Treasurer, to find out what the Treasurer's thinking might have been. I wish he would also ask the Treasurer how he could possibly bring in a tax on the profiteering that is already going on in terms of the price of gasoline, given the difficulty that people have in paying for gasoline and the fact that we are heading for many price increases from time to time and possibly even more than we already expected and know about.

How can the Premier possibly justify piggybacking and profiteering and compounding those increases at the expense of the ordinary citizen?

Hon. Mr. Davis: Mr. Speaker, I am really doing my best not to be provoked today in spite of the Leader of the Opposition's initial question in reference to the Minister of Agriculture and Food (Mr. Henderson). I will deal with that on some other occasion.

I would point out to him what the Treasurer said to him, that whatever the consumer in this province is paying, in spite of the seeds the Leader of the Opposition may wish to sow in the minds of the viewers as he performs here on this occasion, the reality is that the ad valorem tax that the Treasurer has suggested for this province is following what I think is done in every province of Canada with the exception of two. I would also point out that whatever the consumers are paying today with the new tax, it is substantially lower than they would be paying for gasoline and fuel oil if they had ever been sufficiently unwise as to adopt the Liberal energy policy for Ontario.

Mr. Cassidy: If I could ask the Premier to resolve the ambiguity of his last response to me, does the Premier support the tax proposals that were put forward by the Treasurer or does he repudiate them? If the Premier supports them, how does he defend a tax system that imposes a much heavier rate as a proportion of the federal tax on people earning $15,000 a year than on people earning $20,000 or $25,000 a year? How can he support a tax policy that effectively soaks the poor and makes them pay higher rates than people who are better off?

Hon. Mr. Davis: The tax policy does not soak the poor. Yes, I support the proposals presented by the Treasurer of Ontario.

TENANTS' DEPOSITS

Mr. Epp: Mr. Speaker, I have a question of the Attorney General. All of us are aware that interest on rental deposits -- and parenthetically the interest on rental deposits is six per cent -- falls under the jurisdiction of the Minister of Consumer and Commercial Relations (Mr. Walker). We are also aware that

section has been appealed to the Supreme Court of Canada by the government of Ontario.

However, given that the Attorney General is responsible for the Residential Tenancies Act and that this act could easily be amended, either to increase the six per cent to somewhere around the going rate or the current rate, or so that the setting of interest on rental deposits could come under regulation, is the minister prepared to bring in a bill this spring to amend that

section of the act?

Hon. Mr. McMurtry: Mr. Speaker, I had not considered any amendment at this time.

2:50 p.m.

Mr. Epp: Given that the Attorney General has not considered this item to date, I wonder whether he would give consideration to it, take it to caucus and the cabinet and be prepared to bring in some amending legislation as soon as possible. As I pointed out to the House a few weeks ago, some of the larger landlords could make profits of around half a million dollars or more a year on paying interest of six per cent.

Hon. Mr. McMurtry: I will be happy to discuss the matter with the Minister of Consumer and Commercial Relations and advise the members opposite as to whether there is any likelihood of amending legislation this spring.

Mr. Philip: Supplementary, Mr. Speaker: Since the Minister of Consumer and Commercial Relations has promised to look into the formula proposed in a private member's bill I introduced -- namely, tying it to the Canada Savings Bond rate -- would the Attorney General kindly look at that formula and ask the Minister of Consumer and Commercial Relations to report back when we can have an answer as to when some action will take place and we will have his views on the formula I proposed?

Hon. Mr. McMurtry: Mr. Speaker, I do not see any reason that cannot be part of our discussions.

CORPORATIONS TAX

Mr. Wildman: Mr. Speaker, I have a question for the Premier. Given that there are over 259,000 active corporations in Ontario, can he explain how it is that one of them, the Liquor Control Board of Ontario, contributes about four cents of every dollar of provincial revenue while the other 259,000-odd corporations contribute a total of only 11 cents of each dollar? Could the Premier explain this apparently huge discrepancy in provincial revenue from corporations?

Hon. Mr. Davis: Mr. Speaker, I think that is a traditional differential well known to the members here in that the odd one has been involved in contributing to that differential.

Mr. Wildman: Could the Premier comment on the fact the Treasurer indicated in his budget that one of the reasons he was facing a revenue squeeze was the increasing number of corporate tax reductions, exemptions and deductions?

Is the Premier aware leading tax experts such as Richard M. Bird of the University of Toronto contend there is no evidence these measures actually work? They do not necessarily increase investment. Rather, they only ensure that provincial corporate revenues decline. Does the Premier not think something should be done about how little revenue the provincial government receives from corporations?

Hon. Mr. Davis: The government always assesses the level of revenue from the corporate sector. I will repeat what I said to the member's leader and repeat what the Treasurer said during his budget statement and since, that our corporation tax level is comparable and competitive with other jurisdictions. It is important we maintain this competitive environment in Ontario.

I do not care what professor the member may quote, but having spoken to a number of people who are considering investing, reinvesting or potentially making new investments here in the province, I have to tell the member one of the first things they look at is the level of corporation tax. That does have some modest bearing on investment decisions.

Mr. Boudria: Supplementary, Mr. Speaker: Could the Premier tell us why he is so concerned about the corporate tax rate being conducive to making sure foreign investors invest here, yet he is not concerned with having an individual tax rate to keep our young people here when they are leaving for other jurisdictions?

Hon. Mr. Davis: Mr. Speaker, may I point out to the honourable member that I did not specify foreign investment. I know that is a real concern to the member's party and leader, because he has made many speeches on this subject, although I saw little of it during the campaign itself, particularly after his editorial lunch with the Globe and Mail. But I know what goes on. I would point out to the member that I am not concerned --

Mr. Mancini: The Premier should not be so condescending.

Hon. Mr. Davis: I am not condescending at all. Does the member want me to share it with him?

I would say to the member that it is important not just for investment from outside Ontario but for people who are presently located here, perhaps even industry in the member's own riding. The level of corporation tax does have an impact on investment, and I think if the member assesses it carefully he may find that to be the case.

OPP SALARIES

Mr. Piché: Mr. Speaker --

[Applause.]

Mr. Piché: Thank you to my confrères.

Mr. Speaker, in making my debut in the question period as the member for Cochrane North, I would like to direct my first question to the Solicitor General in connection with the raise granted recently to the Ontario Provincial Police.

Is the minister aware of the repercussions that have been and are being caused as a result of the recent collective agreement between the province and the Ontario Provincial Police? Because of this settlement, which provides for an increase of $5,890 over a 21-month period and brings the salary of a first-class constable to almost $30,000 -- $29,825 to be exact -- effective January 1982, for an increase of 24.6 per cent, there is some concern over the repercussions felt in many municipalities.

As a result of this unusually high settlement for the OPP, municipal police departments have been under pressure to negotiate comparable salary increases to match the OPP settlement in order to attract new officers. It is, however, beyond the ability of these communities to pay such high salary raises. It would seem that the province, with its resources, would be mindful during negotiations of the effects created throughout Ontario, particularly in the smaller municipalities that operate their own police forces.

Would the minister comment on the situation that has resulted from a precedent-setting agreement between the province and the OPP, which apparently did not take into account the impact on municipal police forces? Will the minister assure municipalities throughout the province which operate their own forces, as they should, that this unusually high settlement will not affect municipally operated forces and that the ministry will find ways and means of assuring comparable wages for all police forces, municipal and provincial, since they are all equal in ability and qualifications?

Interjections.

Mr. Speaker: Order, please. The minister has a very brief answer.

Hon. Mr. McMurtry: First of all, Mr. Speaker, I am not a party to the salaries that have been negotiated for the Ontario Provincial Police, but I would like to add quickly that the OPP are worth every cent of them. I know all members would agree that we in this province are indeed very fortunate to continue to be served by such able, committed and dedicated men and women as those who serve on our provincial police force.

It seems to me that the total of the settlement is not out of line with the awards or negotiated settlements that have been made with respect to many of the major municipal and regional police forces in this province, and I think if one looks at the salary range for first-class police constables in Ontario there is not a significant variation, although I would be the first to suggest that perhaps the cost of living in some parts of the province is obviously greater than in others.

3 p.m.

As to the pressures that may have been placed on municipalities with respect to any bargaining under way, again I think it is quite clear. I would ask my distinguished colleague to remind some of his municipal friends that many of the settlements negotiated by municipalities and regional police forces -- quite apart from the Ontario Provincial Police -- are very much in line with this negotiated settlement. I certainly sympathize with the difficulties many municipalities face with respect to increasing policing costs, but given the importance of this crucial service to the citizens of every community, I think it is an expense most citizens are prepared to bear.

Mr. McKessock: Supplementary, Mr. Speaker: Is the Solicitor General now going to take the opportunity to raise the municipal per capita police grants to the same level as regions are getting to help offset the increases they will have to pay for policing?

Hon. Mr. McMurtry: Mr. Speaker, this is not a matter for the Solicitor General. I have no direct involvement in these grants. The Minister of Intergovernmental Affairs (Mr. Wells) states it is still within his responsibilities. I was not sure whether this had been taken over by the new minister of municipal affairs and housing. I do understand that some greater amounts are forthcoming with respect to these per capita grants, but again I am not directly responsible for these grants.

Mr. Wildman: Supplementary, Mr. Speaker: Is it not the case that the municipalities have been given grants lower than the increase in inflation this year? The question really is not that the OPP increase was too great but that the provincial government is not providing sufficient resources to the municipalities of this province.

Hon. Mr. McMurtry: Mr. Speaker, I am obviously not the minister responsible for these grants. I do know from the many discussions I have had with the Treasurer and the Minister of Intergovernmental Affairs that the needs of local municipalities and regions for policing is a matter to which they always give the highest priority.

VAUGHAN TOWNSHIP LAND USE

Mr. Smith: Mr. Speaker, I want to go back to the Minister of Agriculture and Food about the matter of Vaughan township and the answers he gave me earlier. The minister said earlier that the area was not large enough to be a viable farm. Is the minister aware that he is talking about an area of 1,225 acres? Could he explain how it is that in these times an area of that size is thought not to be viable?

Mr. Pinder, the expert in these matters, in preparation for the hearing -- and I quote from the Ontario Municipal Board decision -- "spent two days walking over the lands contained in amendment 95, during which time he measured various land slopes, inspected buildings and interviewed farmers in and around the block 48 area, and he said that as far as he was concerned there were 975 acres that certainly were worth saving." Inasmuch as he took that length of time to examine it, will the minister tell us exactly how much time he and the member for Elgin spent in coming to the opposite conclusion?

Hon. Mr. Henderson: As I said earlier, I do not have the file here. Apparently the Leader of the Opposition does. Will he read the letter I sent?

Mr. Smith: Indeed. The problem is that I have read the letter. All the letter of December 2 said was, "With regard to the above file, it has come to my attention that the staff of my ministry commented on this application," and in his view the lands were similar to other lands in the amendment 95 area and were withdrawn. There are no reasons given.

In a previous very short letter, he says: "The proposed amendment to the official plan was brought to my attention by my parliamentary assistant, Mr. Ron McNeil. Mr. McNeil personally inspected the area, and he and I reviewed our ministry comments with my staff." Based on this discussion, he says he withdrew the objections of his staff.

His staff are experts who spent two days walking up and down the area examining an area of about 1,000 acres and found it to be viable farm land that should be saved. The OMB thought the same. Apparently the member for Elgin made some examination that was satisfactory to the minister to try to overrule the experts in his ministry. I want to know how much time the member for Elgin spent walking up and down the land, and what are his qualifications?

I want to know particularly whether the minister is now prepared to withdraw this ridiculous attempt on his part to push through something on behalf of developers and friends of his?

Hon. Mr. Henderson: When the honourable member starts speaking about the qualifications of my parliamentary assistant, I will put him up against that whole party any day when it comes to talking about agriculture. The honourable member knows full well that I was referring to a portion of that 1,200 acres. He does not want to bring that out here. I will bring the file tomorrow and show what I am talking about.

Mr. MacDonald: Supplementary, Mr. Speaker: Since the minister claims that he gives his staff the freedom to come to conclusions on the basis of their expertise, but he then exercises the freedom to countermand their conclusions, does the minister care to inform the House who made representations to him with regard to making that change? Is the Leader of the Opposition correct that a certain lawyer was the one person? Were there other people who came and persuaded the minister that he should countermand the decisions of his experts in his ministry? If so, who were they?

Hon. Mr. Henderson: Mr. Speaker, my parliamentary assistant is a very capable farmer in this province. He was asked to go and view this property. As I say, I do not have the file in front of me, but I will certainly look and see, and I will bring back the answers either tomorrow or Thursday.

CABLE TV OPERATIONS

Mr. Stokes: Mr. Speaker, I have a question for the Minister of Transportation and Communications.

Is the minister, along with his colleague the Minister of Northern Affairs (Mr. Bernier), still of the opinion that the Canadian Radio-television and Telecommunications Commission is wrong in its denial of the right of cable television operators in northern Ontario to intercept satellite signals for transmission to their subscribers in northern Ontario?

Will the minister support the cable operators and their subscribers in opposing this denial of basic rights as enjoyed by most people in southern Ontario and certainly by the people in Quebec, who get French signals from the republic of France?

Hon. Mr. Snow: Mr. Speaker, I am not sure whether the honourable member is asking if I still feel the CRTC is wrong; and I am not sure whether I would be right in saying the CRTC is wrong or the federal Minister of Communications is wrong -- perhaps both are wrong -- because that is my personal opinion.

One policy of the federal government with which I do not disagree is that there is a limitation of four on the number of United States signals that can be carried on a cable television system; that is, it is limited to the three commercial stations and one noncommercial station that any cable TV system here in southern Ontario is allowed to carry.

3:10 p.m.

The requirement limiting the number of US signals to four should be uniform across the province, and it should not depend upon how that signal is received. As the honourable member knows, cable TV operators can receive that many and more signals here in southern Ontario off air, by microwave or by land lines. To say that the cable system operators in northern Ontario cannot give their customers four United States signals because they have to get those systems by a satellite transmission, I think is fundamentally wrong.

The cable systems in northern Ontario should be able to supply four US signals, the same as they do in southern Ontario, whether they get them by satellite, by microwave or off the air.

There is some progress being made on this, after a long while, but there should be more effort made and more signals on our Canadian satellites so that a further choice of signals could be available in northern Ontario. But, regardless of how many Canadian signals we have on the satellite, I think the basic rule of four US signals should be uniform.

Mr. Stokes: The Minister of Transportation and Communications and his colleague the Minister of Northern Affairs made a joint submission, through the Deputy Minister of Northern Affairs, before the Canadian Radio-television and Telecommunications Commission in Geraldton a little over a year ago.

That is the reason I asked the minister whether he was still of the same opinion. If he is, what is he going to do in his representations to either the CRTC or the minister responsible, the Honourable Francis Fox, to see that the formula he believes is a true and a realistic one is made available to the people of northern Ontario? Does the minister not see that as his responsibility on their behalf?

Hon. Mr. Snow: I certainly do, and I have been attempting for almost the last six years to do exactly that. But for the past period of time it has been very difficult to get any meeting with or any message across to the federal Minister of Communications.

I cannot remember the exact date, but a communications ministers' conference was arranged to be held in Winnipeg, and shortly before it was to take place Mr. Fox notified everyone he would not be in attendance. The host minister from Manitoba cancelled the conference. The minister from New Brunswick called a meeting of provincial ministers of communications about a year ago and asked Mr. Fox to attend. Mr. Fox declined to attend that meeting.

I believe there was a meeting of communications ministers called for Quebec City in February by the Quebec minister -- it was during the election period, but it was called before that -- and we thought Mr. Fox would attend. Although I was not there, my deputy and other officials of the ministry were. Mr. Fox did not attend that meeting.

Mr. Stokes: Since you cannot get his attention, will you cite him for civil disobedience?

Mr. Speaker: Order, please.

Hon. Mr. Snow: If the honourable member will just give me a moment, I am not through yet, Mr. Speaker.

We then arranged a communications ministers' conference for this spring -- in May or June -- again in Manitoba at the request of the Manitoba minister. I just got notice -- although I was scheduled to be there in mid-June for a two-day meeting in Winnipeg -- that conference has now been cancelled. I believe it was cancelled at the request of Mr. Fox, but he has agreed to attend the conference in Winnipeg in September. So it does not look as if there will be a chance for us, as provincial ministers, to meet with Mr. Fox, after all of those cancellations, until September. I hope that one will come about.

Mr. T. P. Reid: Supplementary, Mr. Speaker: Will the minister indicate whether he has been in touch with the CRTC and its chairman, Mr. Meisel, to point out Ontario's position in this regard? And will he say whether he has had a response from Mr. Meisel?

Hon. Mr. Snow: Mr. Speaker, we have made representations at practically every significant hearing of the CRTC on matters relating to communications in this province.

To answer the member's question specifically, I would have to refer back to our files to see what replies we have received. I know we have sent a number of written submissions to the CRTC. I do not recall replies, but that does not necessarily mean those submissions were not taken into consideration in making the decision that was made recently, for instance, to put some of the Canadian superstations on the satellite.

SKILLS TRAINING

Mr. Bradley: Mr. Speaker, I have a question for the Minister of Education. I want to ask the minister whether she agrees with the policy announced by the former Minister of Community and Social Services regarding attempts by the provincial government to encourage people who are receiving mother's allowance and other kinds of social assistance to become financially independent?

If the minister does agree with that policy, will she be prepared to investigate the situation at Niagara College, where a particular program that allows people to upgrade themselves academically so they can go into technical courses or obtain jobs -- which would allow them to get off social assistance -- is being cut back? Will the minister investigate that and take whatever action necessary to ensure that the former minister's policy is carried out?

Hon. Miss Stephenson: Mr. Speaker, the basis of the policy developed at Niagara College was, of course, the federal program which permitted the addressing of the basic knowledge requirement for admission to skills programs. As my honourable friend knows, his friends in the federal government have cut out that program completely. Niagara College has attempted to try to fund it on its own and has been unable to, and that is the reason for its demise this year.

It is a matter of grave concern to me and one of the reasons that we have been looking at the entire area of continuing education, particularly in the basic skills-basic knowledge requirement of a number of those who were unfortunately required to leave or voluntarily left the elementary secondary system before they could acquire the knowledge which they now need for entrance into a skill training program.

It certainly was not a provincial government activity that caused the demise of this program; it was their friends at the federal level who did it.

Mr. Bradley: In view of the fact that it is very easy to always blame the federal government when something does not go right but to take the credit when something does go right, will the minister tell the House what specific action she is prepared to take on an immediate and urgent basis to ensure that this program does not disappear and that these people who face unemployment or who face a situation where they are going to be on social assistance when they do not want to be are able to get off this and are able to take advantage of what was admittedly a very good program, I thought, at Niagara College?

Hon. Miss Stephenson: One cannot look at a program such as that in isolation. One must look at programs of similar nature in the various colleges throughout the system, and that we are doing.

Mr. Swart: Supplementary, Mr. Speaker: When the minister is examining this program at Niagara College and blaming it all on the federal government, will she would look at the situation whereby the college itself has contracted with the federal government, under manpower retraining, for them to purchase all of the seats in certain trades because they need the money so badly that they cannot risk the situation of some fee-paying students not carrying on; so that many students in the Niagara Peninsula who have graduated from high school and now want to go into a skills trade are not able to get a seat at the college because of the action of the board?

Hon. Miss Stephenson: Mr. Speaker, colleges are not permitted to sell all of the seats in any program to the federal government. There is a percentage that must be retained for students in the local vicinity who are not referred by Canada Manpower.

REXDALE FIRE

Mr. Philip: I have a question of the Solicitor General. Can the minister inform the House whether he has ordered a widespread inquest into the death of Kenneth Whalen and Carole Miller, who died in a Rexdale fire where arson is suspected? Can the minister inform the House what his investigators may have uncovered to date, since there are a number of very uncomfortable rumours spreading through the neighbourhood over this particular fire?

Hon. Mr. McMurtry: I have not had a report as of this moment, Mr. Speaker, but I will be obtaining a report and will report back to the Legislature.

3:20 p.m.

Mr. Philip: Will the minister assure the House, since Mr. Whalen is reported to have been the Rexdale commander of the Ku Klux Klan, that any investigation, or indeed any inquest, will look into the activities, if there are any, of that organized group in the Rexdale area?

Hon. Mr. McMurtry: Obviously we are very interested in the activities of the Klan in any area of the province. If there is going to be an inquest into this fire, it is not likely that it will relate to the purported or alleged activities of the Klan unless there was some relationship between these activities and the deaths of the two individuals.

EDUCATION RECORDS

Hon. Miss Stephenson: Mr. Speaker, as the honourable member may not know, there is a very specific action taking place to divorce any identification of students in the educational program by number from the individual identifier that is used for social insurance. I do not think it is to be accomplished this year, but it is to be accomplished by the end of the school term next year. However, I shall explore that, because it was not my understanding that the number was to be used this year.

Mr. Boudria: If the minister is right in what she is saying, can she explain to the House why these envelopes are distributed by the unemployment insurance office to kids to apply for social insurance? They are distributed to three-year-old children as they apply to start pre-kindergarten in the fall when they will be four years old. One was distributed to my daughter.

Hon. Miss Stephenson: Canada Manpower has absolutely nothing to do with the school system of the province, and I do not know how those envelopes could have been distributed through the school system. I will investigate that.

Mr. Boudria: They always are.

Hon. Miss Stephenson: No, they are not. They may be in the member's area, but they are not in mine.

SPADINA EXPRESSWAY; HYDRO CONTRACTS

Mr. Renwick: Mr. Speaker, time is short; so my question to the Premier has two parts, if I can just have his attention. The Premier is fond of referring to the reality of March 19. I am fond of referring to the other reality; that is, the Premier's word.

Does the Premier recognize that there is a time limit on the credibility of his word? During his term of office as Premier, will he (1) introduce legislation into this assembly that will fulfil his commitment to the city of Toronto with respect to the extension of the Spadina Expressway and (2) file as quickly as possible, in accordance with the promise he gave to this assembly, the report of the former judge of the Supreme Court, Mr. Justice Campbell Grant, related to the Ontario Hydro contracts at Arnprior and Bruce?

Hon. Mr. Davis: Mr. Speaker, dealing with the second matter first, I will consult with the Attorney General (Mr. McMurtry). I told the honourable member I would do that.

As to the first matter, I am still hopeful that we might resolve it without the necessity of a piece of legislation.

DOMTAR DISPUTE

Mr. Villeneuve: Mr. Speaker, I want to ask the Minister of Labour, at what stage are the negotiations between Domtar in Cornwall and the workers? It is a very serious problem in our area, affecting not only the city of Cornwall but also the whole community around. This strike has now lasted seven months.

Hon. Mr. Elgie: Mr. Speaker, I am pleased to advise the House that negotiations over the weekend resulted in a memorandum of agreement that will be voted on later this week.

INTRODUCTION OF BILL

LANDLORD AND TENANT AMENDMENT ACT

Mr. Boudria moved, seconded by Mr. Van Horne, first reading of Bill 83,

an Act to amend the Landlord and Tenant Act.

Motion agreed to.

Mr. Boudria: Mr. Speaker, the purpose of the bill is to provide increased protection for tenants residing in mobile home parks who are forced to move from parks by a landlord who requires possession of the park for certain other purposes. The act currently requires the landlord to give a tenant 120 days' notice before terminating the tenancy agreement. The bill increases this notice from 120 days to one year.

ANSWERS TO QUESTIONS ON NOTICE PAPER

Hon. Mr. Wells: Mr. Speaker, I wish to table the answers to questions 90 and 91 standing on the Notice Paper. (See Hansard for Friday, May 29.)

MOTION

ESTIMATES

Hon. Mr. Wells moved, seconded by Hon. Mr. McMurtry, that, notwithstanding any standing order of the House, estimates for the Provincial Secretariat for Social Development be referred to the standing committee on social development and be taken into consideration for up to five hours following the estimates of the Ministry of Culture and Recreation.

Motion agreed to.

Mr. McClellan: Mr. Speaker, I am quite happy to agree to the motion, although it has come rather quickly and without much notice. I only want to ask the government House leader and the minister to make sure the briefing material is made available to the critics this week, because as yet it has not arrived and we are scheduled, I gather under the terms of this motion, to begin on Monday.

Hon. Mr. Wells: Yes, Mr. Speaker. The arrangements have been made to have the material available, and this was done in consultation with the House leaders.

Mr. Sweeney: Mr. Speaker, I was under the impression that a decision had been made at the last meeting of the social development committee that a private bill would be brought before the committee this coming Monday. Do I misunderstand that? The people involved have been advised of that.

Hon. Mr. Wells: Mr. Speaker, all we are doing is referring the estimates to the committee setting the order and the time for them. The scheduling and the dates when the estimates will be heard are up to the committee. They will order their own business.

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

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

Mr. Peterson: Mr. Speaker, it is my very great pleasure once again -- I think this is the fifth time -- to rise on behalf of my party to present our views on the budget.

I must say I am delighted to see the Treasurer (Mr. F. S. Miller) here today. I know how very busy he is. I think it is the first time in my experience with two Treasurers that a Treasurer has decided not to be here on the day of the response. I know how terribly busy the man is travelling about trying to put out some fires, particularly at this time, but this had been scheduled for some time. However, that is his prerogative. It probably indicates, to some measure at least, the extent of his embarrassment over this budget.

3:30 p.m.

In my five years of criticizing the budgets on behalf of my party I have never seen one that is so easy to criticize and that is more iniquitous, given the economic circumstances. I hope in the course of my remarks during the next hour or so to lay out our view of the specifics of the budget. I will also set out what we would have done; in other words, our positive alternative to the budgetary practices of this government.

Before I start, I want to thank a few people who have assisted me greatly. We in this party are the beneficiaries of a great deal of expert advice from a number of people -- not only on our own staff but also across the province -- who share with us their points of views and who contribute to the development of our policy. I want to thank all of those people who have assisted us.

I say with some pride, on looking back over the years we have been responding, that I do not think we have said anything we are embarrassed about after the fact. Unlike the government, I do not think we can be caught in one duplicitous position. I do not think the government can catch us once where we have said one thing and where we changed our minds two or three months after. That is very much unlike the government. Through the campaign, through the budgetary documents, it has changed its fiscal and political strategy depending on the political forces at any given time, and it has almost lost credibility.

I am sorry the Minister of Industry and Tourism (Mr. Grossman), the erstwhile Treasurer, is standing up to leave the House, because I would enjoy it very much if he would stay here and learn. This young man has demonstrated some capacity to grow and learn. If he were prepared to sit here at my knee for an hour or so, we might even turn him into the real Treasurer. Whatever meetings he has this afternoon, I can assure him none is more important to his political career than the time he should be spending here.

Hon. Mr. Grossman: I will read Hansard later. I will read it to my children.

Mr. Peterson: If the member does have trouble sleeping tonight, he can get a copy of Instant Hansard to console himself in his insomnia.

I do want to thank a few people specifically: These are research people -- Jane Shapiro, Sandie Giles, Norma Graver -- all of whom worked very hard at assisting me with my remarks, and Donald Gray, who is my trusty assistant for the summer, sitting up in the gallery.

Mr. Nixon: What about your colleagues?

Mr. Peterson: Of course, I owe a great deal to my colleagues. The political wisdom these gentlemen and ladies have demonstrated over the past years in forging a responsible economic policy augurs very well for the future of the Liberal Party in Ontario.

We have not been a party that has advocated unlimited spending. We are not like the NDP, who have never had to reconcile both sides of the balance sheet, the expenditure side and the revenue side. I see my old friend the ex-critic smiling like a Cheshire cat, relieved as he is of the duties he used to have. He is not a bad fellow, and I think he probably felt badly about some of the things he was forced to say to veil his Socialist principles under the guise of some sort of fiscal framework. I think he is probably very happy to be relieved from that burden. Now he can speak only to the expenditure side -- the great programs the NDP have to recreate the world in their own image.

We have fancied ourselves as being financially responsible. We have never made criticisms when we did not feel we had an alternative. We have never advocated unlimited spending. We were prepared to make cuts where we were prepared to make expenditures. As a matter of philosophy, our party does not believe we can go on in perpetuity and put the taxpaying public and our future generations into a perpetual burden of debt. I will be talking about that a little later, more specifically about some of the fiscal problems and the financing problems this province is going to face over the next 10 and 20 years. I have yet to see any attention to these problems from the government.

I think this budget is particularly interesting because it is just in the wake of an election. A budget is very frequently a political document -- at least it is used for political purposes. When we see the juxtaposition of what we were presented with last week and what was promised before the election -- indeed, what was offered in the last budget -- it strains everyone's credulity; it strains the credibility of this government. When one sees the stark juxtaposition of giving at one time and taking away severely a year later, he can see no consistency, he can see nothing except an ill-conceived perception of some economic or electoral gain.

I have no doubt the things said in the last campaign and in the last budget contributed in at least some small measure to the electoral success of our friends opposite, because they were totally different from what we have been presented with today. In that regard it is the most shameful budget I have seen in my brief years here and we have, at the same time, the most shameless Treasurer. He almost openly admits the political context in which he brought down this document and admits the great disparities that have come about.

I just want to give a few quotations of things we have discovered. In Decision 1975, a pamphlet of this government in the 1975 campaign, it said this: "In the Canada of 1975, no one has fought harder for the consumer and the taxpayer than Ontario's PC government. From the outset, Ontario fought against increased energy costs because higher costs meant fewer jobs and more inflation, and when Ottawa jacked up the oil and gas prices and increased by 10 cents the federal tax on gasoline, Ontario responded with a 90-day price freeze at the provincial gas pumps." They would have us believe it is a government of the consumers.

Let us go to a statement by the Premier (Mr. Davis) of this province at a press conference at Queen's Park when he called the election on February 2. He said, "We seek a mandate to combat inflation through smaller and more efficient government, avoiding tax increases and supporting those on fixed incomes," blah, blah, blah, as he is wont to say.

We had the Treasurer, when speaking about increased energy prices on a national basis say, "Increased energy prices are a mistake and a distortion and a clear raid upon the spending power of the average citizen of this province and of Canada as a whole."

That is the kind of ambiance they have created. We had a feeling before the last campaign, and the government tried hard to create the feeling, that all was well in Ontario, it was a "no tax increase" budget, in fact there was some extra money for one if one needed it; for example, if you needed a Wintario grant. We remember he sent a number of his ministers about the province with a great big bushel full of cheques, passing them out here and there for arenas or whatever was the order of the day, all symbolized by the quote from the great Minister of Agriculture and Food (Mr. Henderson) saying, "Me and the Premier brung you this cheque." There was a feeling all was well.

Why should other people be critical of or complain about the economic performance of this government and this province over the past decade? What we will find when we do our analysis is the single most important problem facing this province is its lack of fiscal capacity. It is losing its ability to create wealth so that we can all enjoy the services we have become accustomed to.

The rundown in our economic health is forcing the government of this province to take a higher take from the average taxpayer and the average consumer and is creating a tax climate today that is most unattractive compared to other provinces. We are seeing that gradual rundown. I say with great pride that my leader pointed it out in the last campaign, although a lot of people criticized him and said he was Dr. Negative, but history will say he was right.

Maybe we have had too many moral victories on this side and not enough electoral victories, but one day we will translate that into an electoral victory. There is a stark juxtaposition of the dishonest approach this government takes. We have tried from our point of view to be specific about the problems and suggest solutions. I think two or three years from now people are more apt to see the wisdom of that point of view than they perhaps did in the last campaign.

I intend to talk today not only about errors of commission in the budget, but also about errors of omission. It was a singularly unimaginative document except in extracting money from the taxpayer's hide. There were no new wealth- creating initiatives, just a rehash of the old Board of Industrial Leadership and Development program that is already in disrepute in most circles. We saw little creativity except inflationary tax grabs contributing to higher prices.

3:40 p.m.

In spite of the fact that the Treasurer walks out of here and says the new ad valorem tax on gasoline is not inflationary, his own officials, who -- and it has been demonstrated on a number of occasions -- know very much more about the whole budgeting and financial process in the country than he does, admit that it is an inflationary tax. Now the Treasurer has, of course, a vested interest in higher oil prices to satisfy the unquenchable coffers of the Ontario Treasury. He is profiteering by inflation; he is contributing to inflation. It is exactly the wrong tactic at this time in Ontario's history.

I have had the experience in the last four or five days, along with my colleague the new financial critic for the New Democratic Party (Mr. Wildman), of appearing on a number of open-line shows, talking to a number of people and chatting about the budget, as we are wont to do. Interestingly enough I think the Treasurer was invited to all those shows. He refused to show up, because he was not prepared to defend this silly document in public. Rather than take criticism he avoided the forum.

We sat and listened, and it was not very interesting radio or television because there was no real conflict. No one defended the budget and no one of any substance phoned in to defend the government. There are a few people who phone in, of course, and say what a wonderful province we have and how grateful we should be to live in it. Of course we have. But the priorities of this government are wrong. There could be a fairer and more even distribution of wealth and more devices to create wealth in this province. That is what we are complaining about here. None of us wants to leave Ontario. We are all going to stay here and fight for what we consider best. That is not the issue,

But we talked to people who phoned to say: "I am a single mother. I have two children and I just cannot cope. How will I pay these extra taxes?" The story goes on from individual to individual, from small businessmen to farmers. Mr. Speaker, I know you have those kinds of people in your own constituency. What this budget has done, to some extent at least, is rob these people of hope.

It has said to them, "No matter how hard you try there are certain forces conspiring against you: high inflation rates and high interest rates." Granted, they are not the direct responsibility of this government even though the results are. But now they are assaulted by an equally punitive budget that is going to extract more money from their disposable income and they are asking themselves, "How can I cope?"

I do not have an answer for them. I do not know what they can do tomorrow morning except tough it out, because there has been no promise held out in this budget. Therein, maybe, from a sociological point of view, lies the single most iniquitous thing about this budget: it is robbing people of hope. People who previously thought that by hard work and saving and doing what most people want to do in this life they could build for the future have now in some respects lost the hope of building for the future. That is a very serious phenomenon in our society as I know it, and that disturbs me very greatly.

I know my colleague the member for Algoma (Mr. Wildman) would agree with those sentiments too, because he went through the very same thing I went through.

I wish the Treasurer had been there to hear that, because it moved me. There were other people far more harsh. They phoned and said: "The taxpayers of Ontario deserve what they got. They voted Tory -- let them suffer." I do not take that harsh view, because I think the economic and sociological repercussions of what we have done are too serious. We are going to use whatever devices we have on this side -- and unfortunately there are not nearly as many as we used to have -- to try to get this government to change its mind and reorder its priorities.

Unfortunately, the biggest weapon we have in opposition today is rhetoric, and that is not always effective when we are facing a majority on the other side of the House.

We are going to continue the fight. We totally, fundamentally and absolutely reject some of the tax increases that have been presented by this government, particularly because of the politically dishonest way in which they were introduced. After a no-tax-increase budget last year we pay double this year. A lot of false promises were held out to the people of this province, and there is a sense of moral outrage from people who feel they were deceived last year.

Maybe the government is right. Maybe the government thinks people are not very smart or that they will forget what they have done. Perhaps they will be right four years from now. We will see tax increases again next year and see those wind down the year after that, and a budget with no tax increases just before the next election. That has always happened.

In the process of working on our remarks today, we did a review of the last 10 years of the budgetary process of this province. Always, without exception, the major fiscal distortions in the budget were in the year prior to an election -- in 1971, 1975, 1977, and last year, 1980. That is when you see the major aberrations. The citizens end up paying in the two or three years following that, giving the government their money so they can buy their votes. I think at some point there is a degree of cynicism that will set in that will defeat the government that continues to try that old tactic. That is my opinion.

It is not going to be easy, but we are going to take that message to the people of this province in any event.

I want to talk about what we see are the economic realities of May 1981, what we are facing, what the government was facing, and what they should have been dealing with. We have virtually record-high inflation rates and interest rates. I do not think we have to get into a discussion today on who caused that. I recognize it is a federal responsibility, but the spillover effects of that are clearly a provincial responsibility for those people who reside in Ontario. There are ways that individuals, home owners and small businessmen can be protected and should be protected. I will talk about that in more detail later.

We are paying, as I said, not only an economic price but a very high human price for that phenomenon which is caused generally by external forces, forces beyond our borders. We have the responsibility to repair the damage at least in some limited way. We see small businessmen, probably the most vulnerable sector of our economy, being assaulted on a daily basis by these high interest rates.

A Canadian Federation of Independent Business survey said some 60 per cent of those small businessmen were creditors to bankruptcies and 57 per cent of those got nothing back. When one small business or a few start to go, there is an impact on their friends and neighbours and the people with whom they do business. You cannot regard the effects of high interest rates and inflation on these small businesses in isolation. They have an impact on society as a whole, and ultimately end up affecting us all.

We are also seeing a phenomenon where the average person in this province cannot afford to own a home. The average home price in April was $87,534. With an 18 per cent mortgage, 10 per cent down, and taking into account taxes and heat, and assuming the ratio of 30 per cent of disposable income should go to carry a mortgage, one requires a pre-tax income of $47,000. That is about $20,000 more than the average family income in this province.

We are removing hope. We are not offering the prospects and the hope for the future that we should be in gearing our political system towards offering that kind of promise. My colleague the member for Huron-Middlesex (Mr. Riddell), has spoken eloquently about the plight of the farmers. I get the impression, very sincerely, that he and his colleagues who work with him are the only people who really understand the plight of the farmers in this province and are prepared to do anything about it. Members have seen the passion and commitment with which he speaks on that issue.

The government is being most foolhardy in not moving in that direction. What we have seen is a 75 per cent increase in farm bankruptcies in 1980 and net farm income down 32 per cent. All of these phenomena going on at the same time speak to a great deal of trouble in the economy in Ontario.

My leader has spoken before about the erosion of the middle class, this phenomenon that is dividing the working poor from those people who have some assets which are increasing in value through no particular accomplishment of their own. Those people who have money or assets today see them growing at phenomenal rates, way beyond what they are contributing to the gross national product, through that iniquitous phenomenon known as inflation.

On the other side of that, we are seeing the people who are working, the majority of whose disposable incomes are going towards handling mortgages, feeding their kids and just surviving, and who are getting poorer by the day. If one goes back in history, one sees that one of the things that contributes to the destruction of a relatively stable society is the destruction of that middle class which happens to be its backbone and generally keeps it functioning. That is my judgement and the judgement of a number of other people.

3:50 p.m.

I was at a great investment seminar the other day where a speaker from the United States was saying that exactly the same thing is going on in the United States. We are seeing the destruction of the middle class. We are dividing those who have from those who have not. We are making that hurdle much harder to jump, and, as that goes, there are going to be a lot more assaults on the political system as we know it. We are going to see a much more distinct polarization. We are going to see more conflict and more tension, and we are going to remove that buffer, the middle class, which keeps society together.

We are going to see many more political problems in the future if we cannot solve these kinds of problems and offer hope to people.

Do you know the Treasurer's response to all these problems, inflation and so on, Mr. Speaker? All he said about inflation and interest rates in his budget was this: "It is with concern that I view the levels of inflation and interest rates we are currently facing. This government is resolved to meet its responsibilities to limit the debilitating effects of high rates of inflation," whatever that means. Those were just a few words about the most serious problem we are facing and there was not one program to solve the matter. That failure to recognize all the problems in the budget this year, except with just a few platitudes, is a glaring omission in our judgement.

As I said earlier, the single most important problem in this province at the present time is the decline in wealth-producing capacity, and a lot of the other problems we have stem therefrom. The government's response to that was a raid, an assault on the taxpayers. They have given up the fight against inflation and are now profiteering from inflation through their ad valorem tax on motor vehicle fuels. They have given up the fight.

I have to give the former Treasurer, Darcy McKeough, with whom I had many arguments, credit for one thing, that even though he did not always perform the same way, he stood at least for some sort of fiscal rectitude, for trying to control government spending, for trying to cure the iniquitous force of inflation in our society. Now his government, or what remains of it, has given up that fight and is joining in and profiteering from inflation.

That is an amazing conversion this government has gone through, rather than fighting a problem to profiteer from it, and doing that on the backs of the consumer and the taxpayer in Ontario. At the same time the response was to provide absolutely no new initiatives in the wealth-creation process in this province.

As I said, we saw the BILD program fleshed out a little bit more, we saw it recycled for the third time -- I will deal with that a little later, but I think it has been ineffective in most areas even though there are some specific parts of which we approve.

The Liberal priorities in budgeting would be these: number one, government policy and the might of government force must be focused on the creation of wealth in Ontario now, or else we are going to continue with the squeeze on social services and all the other cutbacks we have experienced for the past half decade at least.

Mr. Jones: That is what the whole BILD program was about, remember.

Mr. Peterson: If the member will wait a minute he will find out how it is not working. It was a cheap political document designed to get votes and not to accomplish very much else. Look at the number of new jobs it has created. Look at the handouts that were inappropriately given. Most rational people looking at that program say on balance it has not been very effective. But that is our first priority, and we would do it much differently than the government has done it.

Number two: as a government priority we must protect the disadvantaged, those people particularly hard hit by the high interest rates and inflation today. We recognize we cannot afford an open-ended program, we cannot afford universal support, but we could afford a targeted sectoral budgeted amount of money to help those people most in distress. We have specific ideas on how to do that, and they would be geared to income.

That would be a much better disposition of $100 million today than a $260 million tax expenditure on retail sales tax cuts or $100 million for the pulp and paper companies which was not needed anyway. That is why we totally disagree with the priorities set by this government. That would be our second priority, to help those people who cannot cope now. Believe me, there are a lot of them.

When we are in our constituency capacity we are in a very different capacity than our political capacity, because then we get close to people. We understand what is bothering them and they come to us with their problems. I am sure that applies to my friends sitting on the opposite side. Who has not had people come to him and say: "I have troubles. I do not know what to do. My business is going under. I cannot keep up my mortgage payments." I have no idea what they say to them, but it is a real and immediate problem.

Not only that, it is not in society's interest to see home owners thrown out, businesses fail or people thrown off their farms. It is not in our long-term interest. I believe we have a social, moral and political responsibility in those areas.

In my judgement, a third area where this government has failed miserably in this year's budget is there are still a lot of unnecessary expenditures that could have been cut from the budget. A lot of money could have been reordered in terms of priorities.

Mr. Jones: What are they?

Mr. Peterson: To answer my friend, I will deal with those in a minute. I have already talked about them on more than one occasion. That money could have been freed for more productive purposes in the budget and that should have happened.

I want to document my original point on the decline of Ontario over the past decade and particularly over the past five years. In 1980, Ontario, with 36 per cent of the Canadian population, created only 20 per cent of Canada's new jobs. Ontario's unemployment rate grew more in 1980 than that of any of the other provinces. During the 1970s, Ontario dropped from a position of prominence among the provinces to last place in virtually every major indicator of economic growth.

Ontario is last in the growth rate of gross provincial product per capita, in the growth rate of per capita income, of personal disposable income, in the per capita growth rate of wages and salaries and value added per capita, in the growth rate of public investment and residential construction and in manufacturing shipments. That is documented. That is fact. I would like to give a couple of examples of what this means to the province's consumers in real terms.

In 1980, Ontario's growth in per capita personal disposable income was only 93.9 per cent of the Canadian average. If Ontario had managed to grow at the same rate as the rest of the country during the 1970s, each man, woman and child of the province would have had an additional $1,001 to spend last year alone. That is an extra $1,001 most Ontarians could have put to good use.

Between 1970 and 1978, Ontario was not last in everything. We were first in growth in per capita interest on the public debt. Our growth rate in this area was 23 per cent higher than the Canadian average. If Ontario had managed the same growth rate in interest on public debt as the rest of Canada, we would have saved $440 million -- $52 for every person in Ontario in 1978 alone.

That $440 million would have more than covered the $235 million the Treasurer is getting by raising personal income taxes this year and the $119 million he needs to get by raising OHIP premiums again. If we had been able to curb our debt level so that payments were no more than the Canadian average, we would not have needed to raise income taxes, OHIP premiums or the fuel tax this year to generate extra revenues for a desperate government. The consumer would have had more of his money left in his pocket to help make ends meet and to get the economy going.

Ontario's industrial growth performance during the 1970s was also significantly below the Canadian average in many categories, such as real domestic product for manufacturing, mining, construction, trade and utilities. This dismal performance translates into substantial job losses for the people of this province.

In 1980 alone, the number of manufacturing jobs in Ontario declined by 28,000. Any decline in manufacturing is critical to Ontario since manufacturing accounts for 30 per cent of the province's real output. Yet the manufacturing share of Ontario's employment has been dropping steadily from 27 per cent in 1971 to 25 per cent in 1979 and 23 per cent in 1980.

4 p.m.

According to the latest forecast of the Conference Board of Canada, Ontario will experience another decline in manufacturing output this year, by far the largest percentage decline of any Canadian province and more than double that of the country as a whole.

Capital investment in manufacturing for construction machinery and equipment also dropped in 1978 and 1979. While there was some recovery in 1980, it is not widespread and appears to have been more an aberration than a trend, because capital investment intentions of large companies for the period 1982 to 1984 reveal a continuing lack of confidence in the Ontario economy.

According to the most recent Statistics Canada survey, investment by large companies in Ontario will increase by only four per cent in 1982 compared to a 12 per cent increase for the rest of Canada. By 1983 and 1984, investment spending is expected to drop sharply in Ontario, 2.1 per cent and 1.3 per cent respectively, compared to 9.5 per cent and 4.4 per cent increases for the rest of Canada. Indeed, by 1984 these companies intend to invest nearly $1 billion less in Ontario than during 1981.

This is simply not acceptable. Manufacturing is the source of Ontario's wealth and prosperity for the future. We cannot allow these declines in production, employment and investment to continue unabated. Yet this government seems either content with the situation or devoid of any ideas to redress the crisis. Not a gesture, not a mention, not a word in the budget was directed towards a revitalization of the manufacturing sector, except the BILD program, of course. I will have more to say on that in a minute, but first I want to complete the picture of Ontario's economic performance.

The Premier always compares this province to upstate New York, Michigan or Pennsylvania. It has been recognized that in many respects they are going through the same problems we have. In fact, Newsweek offered the opinion that in Detroit, Youngstown and Pittsburgh the productivity crises were largely symptoms of a degenerate disease that threatens the living standards today and for future generations. These are the generations with which the Premier would have us compete. We have to set our sights much higher.

It is hard to believe that during the 1970s Ontario's performance and real output was inferior to all other provinces in Canada, more than half of the US states, and about 85 per cent of the developing countries in South America, Latin America and around the world. This is the legacy of really a squandered decade and it is not as if we are only aware of this now. It is not only as if we had a great conversion after the fact. We were aware of these things going on during the 1970s I think this opposition had some responsibility in bringing them to the attention of the government. That is still the problem and the symptoms have gone unanswered.

This is the legacy of the Premier and this government. It used to be the province of opportunity, but it needs some vision, it needs to look at the future. It needs a comprehensive plan and an agenda and a priority for action. It is going to have to make some hard decisions about where it sits. They are not easy, but I can tell members they have not been made on that side of the House, and I will be interested to see what my friends to the left have to say tomorrow.

To answer my friend from Mississauga North's questions about our analysis of the BILD program, I want to talk about that, because that has been the only government response and in our judgement it is highly unsatisfactory.

We must address ourselves to the critical question of wealth creation. It must be part of a comprehensive overall plan which establishes priorities and goals and means to achieve them. This government's only contribution has been in the BILD program. This election ploy was announced with great flourish and fanfare and yet behind the fluff there is precious little substance.

The $1.5 billion the government proposes to spend during the future years does not in fact involve the expenditure of any new money. It is made up of $750 million, which will be spent over five years on unspecified industrial initiatives and which was first announced in the mini-budget of last November. There must be a limit to the number of times they can get mileage from the same old program. Of course, $750 million is to come from the federal government, local governments and the private sector.

This means that the government is spending no more than $150 million a year, and those dollars are eroding with inflation. It is actually spending less than it spent with the employment development fund program in 1979 and 1980.

The BILD document, in true political fashion, contains a paragraph for every problem that has arisen in the last four years, but the program is so vague and in many cases so ill conceived that the federal ministers on whom they depend for some financial support, Herb Gray and Bud Olsen, could not respond to it seriously and asked for more details about the program. What is clear about this program is that it contains not a single job creation target, very few price tags and a few recycled ideas.

The most consistent response to perceived problems is to call for the creation of a board or commission to investigate the matter or to urge action or to recommend a course of action in another matter. In fact, it calls for the creation of 14 new government agencies. As soon as the Minister of Consumer and Commercial Relations (Mr. Walker), who is trying to cut these things out, finds out about that, those members over there are going to be in trouble.

Ontario needs more than this. The BILD program is not a blueprint for the future; it is a political document. It is a vague whitewash of our problems in the hope that they will go away of their own accord. That, of course, is the government's tradition.

BILD does not follow in the footsteps of the employment development fund, which it succeeds. Money is allocated without criteria, it is given where it is not needed and sometimes it is used for purposes other than those intended. It even lends itself to a lot of fraud in a number of cases. We have just had an interesting situation in London, Ontario, where it looks as if three small business development corporations have gone down the pipe, taking a lot of investors with them. It will be interesting to see what kind of monitoring the government is doing on that.

I suggested before that the employment development fund would be more appropriately called the employment depletion fund. A London Free Press survey, conducted in March, of firms receiving EDF grants which were intended to create jobs failed to turn up a single company that had created a job. Indeed, some companies had laid off workers; and one company in Sarnia, which had received $200,000 to create 296 jobs, has gone out of business entirely. The government is an unsecured creditor in that case -- at the bottom of the list, presumably.

One Windsor firm received $170,000 to create 60 jobs. They reported they had hired some and laid some off again. A London firm used the money for capital expenditure -- not labour -- at a new plant, which was then closed down. The main plant cut down production and, according to the president, "We have expanded but we have retrenched."

At best, the employment development fund was designed to assist large firms, many of whom were very prosperous, to do even better. In some cases it does not appear to have accomplished even that limited purpose. The purpose for which government money should be invested in industry in Ontario is to assist small and medium-sized growing Canadian-owned firms, particularly in the manufacturing sector, to compete and expand internationally. Small firms are our greatest source of wealth and new job creation.

In the most blatant perversion of this approach, the Ontario government has given $98.2 million to seven pulp and paper companies over the last one and a half years for plant modernization. These firms refuse to clean up and modernize their operations without government assistance, despite the fact that they all had healthy profit margins and some were even the subject of competitive takeover bids.

According to the report prepared for the Royal Commission on the Northern Environment, the grants were probably wasted, because the pulp and paper industry can modernize and still make money without government grants. One company executive referred to in the study indicated his company does not need the grant but took the money anyway because all the other firms did.

One can see the perversion of the private enterprise system where these companies are turned into corporate welfare beggars. And if they are not showing up down here with their hands out asking for some money even though they do not need it, they are not being responsible to their directors or shareholders. It is the government that is corrupting the system.

Domtar received $10.5 million in grants while recording a 1979 profit of $98 million, a year-end increase in net income of 55 per cent; for the six months ended June 30, 1980, net income increased a further 14 per cent on a 15 per cent gain in total revenue over the corresponding year-earlier results.

Great Lakes Forest Products Limited, a subsidiary of CPI, got $25.3 million while recording a profit of $50 million in 1979. For the nine months ended in September 1980, net income jumped 83 per cent on a 66 per cent gain in total sales over a year earlier.

Abitibi-Price received $15 million after having a profit of $115 million for 1979. For the six months ended June 30, 1980, Abitibi-Price reported net income on operations increased 13 per cent on a seven per cent gain in sales over a year earlier.

American Can got $4.6 million while enjoying a profit of $85.7 million in 1980 -- and on the list goes.

If the government wanted me to be specific about cutting back in expenditures and about the failure of the BILD program and why it was unnecessary, it has it; it is right there. We continue to give away huge amounts of money to firms that are profitable and do not need it. And if they were being honest, they would say they do not want it but come because it is offered. They told the Minister for Industry and Tourism they did not want it. If this were not absurd enough, in total these grants will result in the loss of 600 to 800 jobs. Surely the priority of any government strategy has to be job creation, but this is a job uncreation program.

4:10 p.m.

I want to talk about what we would do, what we would have done, our priorities and how we would have allocated these moneys. If Ontario is to alter its present economic and industrial direction, we must develop our priorities. The government must stop listening only to the loudest and squeakiest wheel and oiling it with ever larger amounts of unnecessary funds. This kind of ad hockery is not acceptable, particularly at a time when fiscal flexibility is so limited.

We must adopt a plan that emphasizes efficient use of resources, both human and natural. We must begin to train our young people for the jobs that are and will be needed. We must increase support to the universities, instead of slowly starving them of equipment and staff. We must undertake more applied industrial research and development. We must introduce significant incentives to selected manufacturing industries based on areas of determined growth potential.

The Ontario Liberal Party has been calling for a comprehensive co-ordinated industrial strategy in this province for well over two years and will continue to call for one until the government either gets the message or gets booted out so we can finally get Ontario back on the track again.

We believe a strategy must be developed and a set of objectives must be delineated. An industrial strategy for Ontario must emphasize the manufacturing sector and must have job creation as its primary objective. A strong, innovative manufacturing sector provides for a whole range of jobs from highly skilled technicians, engineers, scientists and craftsmen through white-collar professionals to semi-skilled and unskilled workers.

Again and again we have proposed improved apprenticeship programs for our young people. This call has been echoed by study after study, and year after the year the speech from the throne has promised new, enhanced skill-training programs, but nothing ever happens. I am looking at the Minister of Labour (Mr. Elgie), who is sitting under the gallery right now.

In fact, while Ontario in 1972 spent 12 cents on manpower training for every one dollar of unemployment insurance payment, the most recent statistics show Ontario in 1978 was spending five cents on manpower training for every one dollar of unemployment insurance payments. Ontario is the only province that has failed to increase manpower expenditures enough to keep pace with inflation. The Minister of Education (Miss Stephenson), in spite of her frown, knows we are right.

In 1972, the Ontario government also paid more than one third of the total cost of vocational and occupational training in the province. Now, while most other provinces have undertaken new efforts to train their unemployed, Ontario has reduced its contribution to the cost of retraining to one sixth, and ranks second to last.

The costs in both social and economic terms of not training our young people for the jobs required by industry are just too great. Industrial strategy must promote an indigenous research and development capability. We have proposed several incentives to encourage research and development, including cash rebates to Canadian-controlled small business equivalent to 15 per cent of their R and D expenditures.

Industrial strategy must also promote and assist small business in Ontario. Small business is flexible, able to adapt quickly and possesses great potential for technological innovation. More important, small business can create jobs more quickly and cheaply than capital-intensive industries, at about $5,000 per job.

The Canadian Federation of Independent Business contrasted this cost with the job creation record of the employment development fund, now BILD, and found the total capital outlays levered by EDF grants were about $38,190 per job. It is not difficult to conclude which sector deserves government backing. It is only difficult to understand why this government has never done it.

Small business not only has great growth potential, but it is also a sector from which we will derive the greatest returns on our investment. We would support small business through a preferential government policy extending to Hydro and all other agencies and institutions of the provincial government. We would also implement incentive plans to encourage equity investments by individuals in Canadian businesses.

A comprehensive plan like this requires a reordering of priorities and a shedding of the baggage and shibboleths of the past. One of the advantages of changing government is that there is no emotional tie to try to justify some of the stupid programs of the past. Some time in the very near future, this province is going to be swept by a new broom and, not being committed to some of the errors of the past, we can take a fresh look at some of the priorities. We can only do this by reordering our priorities and expunging some wasteful expenditures, like $200 million in employment development fund grants and $120 million in pulp and paper industry grants.

People always ask, "If you guys are so smart, where would you cut expenditures?" I want to talk about where I would cut expenditures, because that is probably the biggest area of black in the budget. There has been no attention paid in the budget to cutting expenditures. Of course, we are not in favour of cutting hospital expenditures, but there are a lot of wasteful ones that could have been got rid of. That money could have been freed either to lessen the tax load or to invest in wealth-creating devices here in this province.

We would have put an end to the election-inspired sales tax cuts. The last round will cost about $260 million in lost revenue and will have precious little, if any, real effect on this province. It is not a stimulant. It has been proved that the import spillover is at least 50 per cent; so at least 50 per cent of that money went to subsidize jobs and assist people in other jurisdictions from which we import these things. That is where we start.

A Canadian Tax Journal study undertaken after the sales tax cut inspired by the 1975 campaign said that one possible effect was a slump in future sales. In fact, it robbed from the future, because people only changed the timing of their purchases and not the volume. In times of high inflation and higher interest rates it is all the more likely to be true. We are robbing from the future again.

On top of this, the increased levels of personal taxation imposed by the budget will surely curb consumer consumption in the future. So the combined effect of these contradictory measures to stimulate and then restrict consumer demand probably will be a drag on the economy at least to the equivalent of whatever benefit was bought for the $260 million last fall.

We must also get rid of some of the numerous white elephants this government has acquired over the past decade. Some of them, of course, are John White's elephants. There is a legacy of grandiose, fast-spending, easy-money policies of the Tories during the 1960s and 1970s.

In the early 1970s, the government began buying up land for the new industrial sites and new cities it envisioned for the near future. Unfortunately, they were consistently wrong about the attraction of these sites for residential and industrial development, and we are now burdened with more than $508 million in land investments that show little in return.

These investments include $280 million in North Pickering, or Seaton; $9.6 million in Edwardsburgh, now in its third incarnation growing trees; $47 million for Townsend -- and more money is being dumped in there daily; I am told that something like $60 million is going into the townsite development and municipal buildings when, God knows, we do not need it, and a further $52.5 million, that is an accurate figure, has been spent to promote Townsend -- $37 million in South Cayuga; $31 million in Saltfleet; $12 million in Cambridge; $20 million in Milton; $13.8 million in Carlsbad Springs, near Ottawa; $16.6 million in Whitby; $4.8 million in Oakville; $3.5 million in Windsor-Riverside -- and the list goes on and on and on.

Not only that, it is accumulating interest daily. It was such an embarrassment to the Ontario Housing Corporation, which owns this property, that it cut off the interest expenditure from Treasury. Treasury made a deal with them and perverted the bookkeeping so they would not have to pay the interest and so they would not make their carrying costs look as high as they are. The public accounts committee, under the very able direction of the member for Rainy River (Mr. T. P. Reid), looked into this and recommended to this House and the people of Ontario that at least there should be an honest bookkeeping system.

There are so many devices that this government has to hide the real cost of things, and that is just one example.

A $500-million purchase at today's interest rates is accumulating interest at least in the order of $75 million a year. How can we possibly justify soaking the taxpayers more when we are carrying on interest with that kind of ridiculous expenditure?

According to the Toronto Real Estate Board, the Ontario Land Corporation will have $650 million tied up in Townsend, North Pickering and South Cayuga by 1985, even if it does not buy one more acre. These are all funds that could have been used to produce wealth in Ontario rather than be lost on shortsighted, unplanned acquisitions.

The list goes on and on about the Minaki Lodges, the polls, the advertising and all the things that in our judgement have gone into wasteful spending that is not properly allocated at this time, given the squeeze on government revenues. If it were 1960 and we had all this money left over, we could think of something to do with it. But we do not have those privileges today. We have to be far more disciplined in the ordering of our choices.

4:20 p.m.

There is one area where we feel the government has failed miserably, and that is university funding. I am glad the Minister of Education is here to know this. They are squeezing the university sector again this year. For the fifth straight year, I believe, they are funding that sector at below inflation rates. That is an area we think is sacred because of its investment in our future. In crass economic terms, it is an investment in the economic health and future of this country.

Ontario's operating grants increased at a slower rate than those of any other province during the period 1974-81. Operating grants to universities in the rest of Canada were increasing at a rate of about 65 per cent more than they were in Ontario. In terms of operating grants for university enrolment, Ontario declined from fifth place in 1974-75 to last place in 1980-81.

If I make any mistakes, my able colleague the member for Kitchener-Wilmot (Mr. Sweeney) will correct me, because he has been fighting hard. He has waged, almost alone, a personal battle in conjunction with his party to bring some fairness and equity to that sector.

The gap between Ontario's grant for a student and the average for the rest of Canada was a staggering $812 in 1980-81. In operating grants per capita, Ontario ranks ninth in 1980-81. In total expenditures by total personal income per province, Ontario ranked tenth in 1979-80. In terms of operating expenditures throughout North America, Ontario is one of the lowest. Of