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May 15, 1986

33rd Parliament, 2nd Session

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Hansard Transcripts

L015 - Thu 15 May 1986 / Jeu 15 Mai 1986

ORDERS OF THE DAY

PRIVATE MEMBERS' PUBLIC BUSINESS

TAX-FREE GASOLINE

WATER DIVERSION

TAX-FREE GASOLINE

WATER DIVERSION

AFTERNOON SITTING

MEMBERS' STATEMENTS

HOSPITAL FUNDING

PENSION FUNDS

SOVIET JEWS

NIAGARA POWERMATIC CARWASH

SAFETY ASSOCIATIONS

MIDDLESEX-LONDON DISTRICT HEALTH UNIT

STABILIZATION PAYMENTS

STATEMENTS BY THE MINISTRY AND RESPONSES

CORPS D'ÉLITE

GREETING OF VISITORS

CORPS D'ÉLITE

YOUTH EMPLOYMENT

PROVINCE OF ONTARIO SAVINGS OFFICE

ORAL QUESTIONS

HOSPITAL FUNDING

UNEMPLOYMENT

EXTRA BILLING

SOCIAL ASSISTANCE

UNEMPLOYMENT

TRITIUM EXPORTS

POST-SECONDARY EDUCATION

NORTHERN DEVELOPMENT

GASOLINE PRICES

ONTARIO HUMANE SOCIETY

COMPUTERIZED MAPPING SYSTEM

CHEESE FACTORY

INSURANCE RATES

WEED HARVESTING

INTERNSHIP PROGRAM

RENTAL HOUSING PROTECTION LEGISLATION

POST-SECONDARY EDUCATION

PENSION FUNDS

TABLING OF INFORMATION

CONFLICT OF INTEREST

PETITIONS

GASOLINE PRICES

MOTION

PRIVATE MEMBERS' PUBLIC BUSINESS

NOTICE OF DISSATISFACTION

BUDGET DEBATE (CONTINUED)

BUSINESS OF THE HOUSE

The House met at 10 a.m.

Prayers.

ORDERS OF THE DAY

PRIVATE MEMBERS' PUBLIC BUSINESS

TAX-FREE GASOLINE

Mr. Villeneuve moved resolution 33:

That in the opinion of this House the government should permit the use of tax-free gasoline and fuel by farm commercial vehicles licensed in Ontario under the Highway Traffic Act, as lower farm input costs will benefit both producer and consumer and high agricultural input costs lessen the producers' ability to compete with subsidized foreign imports.

Mr. Villeneuve: It gives me a great deal of pleasure to be the first speaker in private members' hour of this new session of the Legislature under the new rules in the time selected for private members' business.

In a way, I was hoping the budget earlier this week would steal some of my thunder and adopt the proposal I am making today. I was hoping it would provide confidence to the agricultural community and to farmers, who are currently completing spring seeding in the hope of simply managing to break even. That is not a very wonderful thought.

I remind this House that the prices of December grains, as of yesterday, were as follows: wheat at $2.90 a bushel, corn at $2 a bushel, oats at $1.25 a bushel and soybeans at $5.40 a bushel. Those are basically the prices of 10 years ago. It disappoints me that the Treasurer (Mr. Nixon), who is a grain farmer, forgot to address this very grave situation in his budget. He chose literally to ignore this yet much-needed benefit, and I will have to carry on with my resolution because it is needed by the agricultural community. I still hope we may be able to change the Treasurer's mind on this issue and on others involving support and confidence in the field of agriculture and for farmers.

I am glad to have this opportunity to say a few words about my resolution, which hopes to address one aspect of Ontario's deep farm financial crisis. At the start, I want to emphasize that the proposal I am making will bring us into line with farm fuel provisions in British Columbia, Saskatchewan and Manitoba and will still leave us well behind the fuel rebate system available to farmers in Alberta, where there is absolutely no tax on gasoline. As a quick illustration, Alberta farmers are paying 22.3 cents per litre less than Ontario farmers to run their trucks, and the situation is similar in Saskatchewan.

Farmers in the Maritimes continue to pay taxes on farm vehicles, but with the exception of New Brunswick, these are ad valorem taxes; they are value added or value reduced taxes, which is the system we had in place at the time the new government took over. If that system were still in place, we would be paying two cents per litre less for petroleum products right now.

Ontario, Canada's largest producer of agricultural products, is the only major agricultural jurisdiction in the country to tax farmers at a high rate without compensation. Indeed, the budget reinstates a sales tax on heavy trucks. All farm produce is moved via trucks. When we consider that grain, livestock and dairy products all move from the farm to the primary market by truck, the Treasurer has made sure the costs of moving materials will go up quite considerably because of the reinstated sales tax of seven per cent on heavy trucks that is to occur at the beginning of 1987.

Currently, the tax is 8.3 cents per litre or about 37.7 cents per gallon on gasoline, and 9.9 cents per litre or about 45 cents per gallon on diesel fuel. This high level of taxation has remained in place even though fuel prices have otherwise fallen.

We are all aware of the debate on fuel prices that has gone on in this very chamber since last October. The party on this side, to which I belong, has pointed out repeatedly that the retention of the value added or value reduced tax, known as ad valorem, would have benefited all motor vehicle fuel users, including farmers. Second, it would have helped to alleviate the costs of moving farm produce from the farm or in the semi-processed state.

On the other side of the House, both the Premier (Mr. Peterson) and the Minister of Energy (Mr. Kerrio) have found time to complain about high fuel prices, although both have ignored the specific effect of the high cost on farmers. At the same time, the Minister of Agriculture and Food (Mr. Riddell) has acknowledged that all agricultural producers, including the most efficient, are facing increasing financial hardship through equity loss and poor prices.

There is no doubt that in the past year the state of Ontario's agricultural industry has worsened and that the immediate future looks very bleak indeed. The rest of the economy is doing quite well. The Treasurer has admitted he will receive more than $2 billion of additional revenue this year. The real figure may even be in the area of $3 billion. Clearly, some of that windfall revenue -- blue money, money that was allowed for and was well managed by the previous government in this province -- is a windfall to the present government. Very little of it has found its way to assist a very basic industry in Ontario, that of agriculture.

This week's budget has no new programs for farmers. In fact, it has dropped one program. Yesterday one of my colleagues questioned the minister about where the money that he has now recycled three times was going. The minister got up and read a prepared statement that had absolutely nothing to do with the question.

Most of us in this House know that Ontario farmers often suffer because their products are being undercut by highly subsidized foreign products. The European Community in particular provides excessive production, storage and export subsidies. Canada is about to be caught as the United States begins to retaliate with its own subsidies.

10:10 a.m.

The Prime Minister of Canada is well aware of this problem and has made it a priority for the discussions under the General Agreement on Tariffs and Trade. The Minister of Agriculture and Food has begun to study it. The Treasurer, however, did not even mention the problem of European subsidies in his recent budget.

We know our producers are efficient, but today that factor is no longer enough when dealing on world markets. The Minister of Agriculture and Food can hand out all the airline tickets he wants to potential food exporters, but unless we can offer competitive prices for our products, we will not get the markets we need. I strongly support provincial offshore market development programs, which were first emphasized by the member for Don Mills (Mr. Timbrell) when he was minister.

However, I also believe we must tackle the problem from the cost side and try to reduce farm input costs. Lower input costs can be passed on to our food exports and would provide an advantageous shift in the price spread between a domestic farm product and an imported one. Unlike a marketing assistance program, lower input costs would benefit our own consumers, and Ontario's home-grown products would sell even better.

It is important to remember the effect this tax relief measure would have on millions of Ontario consumers, and in this case it would benefit all of us. But clearly we must deal specifically with the worsening conditions in agriculture in this province during the past year. Many farmers are facing Depression-like conditions, while many city folk are doing very well, thank you, with very little investment compared to what our rural friends in agriculture have.

In this budget the Treasurer admitted that the agricultural outlook remains bleak. His words to this House were, "With low commodity prices, the cash flow from farming operations is too often insufficient to service farm debt, and credit is increasingly difficult to obtain." In rural Ontario we have free-falling real estate values, with no end in sight and no bottom near. The recent budget has done nothing at all to alleviate that.

The members in this House with agricultural backgrounds do not have to be told how serious the farm financial situation is, but because there is a definite shortage of farmers in the Liberal and New Democratic Party caucuses, I want to give a quick indication of the serious condition of Ontario agriculture as it has been reported and is actually happening in recent months.

On December 30, 1985, the Windsor Star carried an

article entitled "Farmers Face Bleak Year with Low Prices Forecast." It reported: "Farmers are coming off a year of bad prices, and more of the same is forecast for 1986.... Even in Essex and Kent counties, an area of fertile soils and bountiful crops," and excellent farmers, "farmers are going out of business or seriously wondering just how much longer they can hang on."

The same day, the Kitchener-Waterloo Record had an

article entitled "Farmers Say `Good Riddance' to 1985." That story said, "There's a full-blown depression under way in the local agricultural community, worse than anything since the 1930s." One month earlier, the writer of that column had stated: "The truth today is that a record number of farmers are going broke. The wolves are real, and they're at the doors of thousands of farm family homes."

On April 10, 1986, the Globe and Mail ran a story entitled "Incomes Plunging for Ontario Farmers." This was a surprising

article to see in the Globe, because it is well known in rural communities that Canada's national newspaper almost always ignores agricultural issues in Canada's largest agricultural producing province, right here in Ontario.

On January 8, 1986, the Brantford Expositor predicted, "Next Five Years Not Rosy for Farmers." In that article, University of Guelph agricultural economics professor George Brinkman was reported as telling farmers that being a good producer will not be good enough for farmers to survive the 1980s.

The London Free Press, reporting on George Brinkman's paper a month later, stated, "Low commodity prices, higher production costs, increasing debt and the shrinkage of equity through declining land prices have hit farmers hard."

On April 27, 1986, a Free Press column was headed as follows: "Many More Kent Farmers Expected to Go Broke." It spoke of high operating costs and low commodity prices.

These papers, as well as the Financial Post, the Toronto Star, the Ottawa Citizen and the Kingston Whig-Standard, have all reported on the financial difficulties of our farmers. Many of the stories have singled out the problems of high input costs and low commodity prices.

In proposing this resolution, I want to make the point that if we decide to help reduce farm input costs, fuel prices are one of the very largest farm input costs. We all realize that farm commercial vehicles should share in any fuel price benefits, and they really have not done so to this point.

There are, of course, a number of farm inputs that could be examined. In addition to fuel, farm chemicals, fertilizers and machinery can be listed as significant input costs. In fact, fertilizers and machinery expenses contribute more to farm operating expenses than do fuels. However, having said all that, I point out that the high levels of fuel tax in Ontario make fuel costs an obvious choice for some type of relief.

After the federal government's move last month to eliminate federal sales tax and excise taxes on fuel, I was sure the Treasurer would follow suit. It was a natural; his budget was coming up. Nothing happened. It simply widens the exemption that farmers receive for fuel taxes. It would go a long way to helping all producers by reducing costs, and it would benefit everyone in Ontario, because the nine million residents of Ontario are all consumers.

There is considerable support and, indeed, considerable demand in the rural community for the province to do something about farm fuel prices. I believe the many petitions we have heard in this Legislature during the past couple of weeks demanding a reduction in the cost of fuel speak for themselves.

For example, the Ontario Federation of Agriculture has urged action from the government on fuel taxes. The following is from the OFA's pre-budget submission of May 12, 1986, to the Treasurer:

"Ontario producers are making every effort to reduce the cost of their product in the hope of improving their profit margin" and, in many cases, simply trying to break even. "They find it especially aggravating that one of their major input costs, fuel, is very heavily taxed" by both levels of government. "In January, 55.7 per cent of the average price of a litre of gasoline was due to...taxes.

"While producers appreciate that the provincial government provides a rebate on fuel used for farm," on-farm, "purposes, they remain concerned that the remaining tax is substantial. We urge the government to address the issue of high tax-induced fuel costs in the province of Ontario."

We also know that on the government side of this House, the member for Lambton (Mr. D. W. Smith) was quick to condemn the loss of a two-cent federal rebate last year. I quote the member for Lambton, who is in this House this morning. He said, "For some farmers, it will be the final blow driving them out of business." It will be interesting to see how he reacts now that we are talking about 8.3 cents a litre. He was quick to condemn Ottawa over two cents last year, but the federal government has now done its share with a reduction of 5.5 cents a litre. It is Ontario's turn, and it is long overdue.

Prior to the OFA submission, the 1986 annual meeting of the Ontario Cattlemen's Association passed a resolution urging an Ontario fuel tax rebate program similar to Alberta's. This was the first resolution in the OCA's resolution book and it received unanimous support.

On April 2, 1986, the North Bay Nugget reported that the Timiskaming Federation of Agriculture directors' meeting had called on the OFA to consider calling for tenders for the supply of farm fuel to all OFA members. Failing that, the Timiskaming federation has declared its intention to explore the idea locally to get the best possible price for farmers.

I will now allow debate on this resolution, and I will take my remaining time at the end.

10:20 a.m.

Mr. Ramsay: I rise to speak in support of the resolution that is before us today. As a farmer, I have first-hand experience with the results of a resolution such as this and with the tax that has been placed upon farm fuels.

One area that has really been ignored when we have discussed the use of fuels on the farm is the fuel used in highway vehicles that farmers must have to go from one field to another, to transport produce and even to travel into town to buy supplies and parts. These are all business expenses and, up until now, they have not been accounted for as business expenses by the provincial government.

A full tax has been put upon this industry, and as the member for Stormont, Dundas and Glengarry (Mr. Villeneuve) has said, it causes real trouble. The provincial tax of 8.3 cents may not seem like a lot of money to many people in this province, but it is a great expense if one is very highly involved and has an intensive operation that is dependent upon fuel. One way in which the provincial government can show its goodwill to the farming industry is by eliminating this tax on farm commercial vehicles.

It is interesting to note the amount of tax that is generated on a litre of fuel, if we price gasoline and fuel at what it was just a few months ago: 50 cents. The total tax on a 50-cent litre of fuel or gasoline is 14.7 cents; 8.3 cents is provincial money, and the other 6.4 cents is federal money.

We have seen a reduction in the federal tax on farm fuel. I am not clear -- maybe the member for Stormont, Dundas and Glengarry can help me -- on whether that will be counted on farm commercial vehicle use or whether it will be just on farm use. I am not sure of the announced federal excise tax reduction on fuels. This hits the heart of the matter, because much of the fuel consumed by the farmer is off the farm. It is important that we recognize this, especially since we have an industry that is ailing at the moment.

It is particularly important now in that it becomes a mechanism that can be handled fairly readily by the provincial government. It is surely within its jurisdiction. I believe there are other powers within the province's jurisdiction, and I have brought up these concerns in the House to the Minister of Consumer and Commercial Relations (Mr. Kwinter) on the total cost of gasoline and the power he has. We have had great debates about that. The minister has said he does not have the power to control or regulate. He admits that on some days, or the Premier does, but on other days he does not admit it. We have a fuzzy area there.

We are still going to try to see eliminated some of the differences which we think are unconscionable, such as the difference between unleaded and leaded gasoline. Experts have said there is no excuse for a three-cent or four-cent differential in some parts of the province between the two grades of gasoline. It is a very big problem for motorists in general but more specifically for farm fuel users, especially when we consider that leaded gas is a poison that we are spreading throughout the environment. That is wrong. We should be encouraging the elimination of the use of that fuel.

This is one area in which the government could act. As a first step, it should investigate the pricing of nonleaded gasoline to find out why it is so high in relation to leaded gasoline.

What we are talking about today is something that could be passed immediately and that the government could act upon. It would be an immediate break for the farmer and would be like putting cash into his hand.

I fully support this resolution. I also encourage the members of the House to support it. It is something that is needed out there. We should start to pay more attention to the farmers of this province.

Mr. McKessock: I am pleased to have the opportunity to respond to the honourable member's resolution that the government should permit the use of tax-free gasoline and fuel for farm commercial vehicles licensed in Ontario under the Highway Traffic Act.

As a farmer, I will accept resolutions proposing tax-free gasoline for my truck. These days a farmer will not look a gift horse in the mouth. However, the chances of getting tax-free gasoline and fuel for farm commercial vehicles are slim. The member could have come up with a resolution that would have been equally helpful to the farmers and more easily supported by both the government and the public.

Someone once said that the world is round so that we cannot see too far down the road. This resolution makes me think of that. The resolution needs a lot of thought, because it could easily be misused.

As it stands right now, both the government of Ontario and the federal government provide almost complete rebates for sales and excise taxes on fuel used by farmers for off-farm vehicles. Gasoline used in farm vehicles by farmers is taxed at 8.3 cent per litre and is rebated at an amount of about $8 million a year. Diesel fuel, taxed at 9.9 cents per litre, is tax-exempt when used in farm vehicles, and this amounts to a tax exemption of approximately $20 million a year.

However, as the member points out in his resolution, gasoline used by the farmers in vehicles on public roads, such as the family car or trucks used to carry materials to and from the market, is taxable. Perhaps the member is pointing out that the hauling of produce to market is part of the farming business. I agree that he has a point. But to give farmers tax-free gasoline when using farm vehicles on public roads would put the farmer in a difficult position. I do not want to see the farmer put in a position where he is criticized or suspected by his city cousins of getting tax-free gasoline when he drives to Toronto in his truck for a visit on Sunday afternoon.

As the member knows, the gasoline tax for vehicles used on public roads applies to everyone in general. Exemptions and rebates are given for specific uses, such as farming, forestry and mining, but only for off-road use. Giving farmers a general exemption as a group would be difficult and expensive to enforce, would leave the farmer open to criticism and could cause commercial trucking operations to claim that farmers had an unfair advantage when hauling agricultural produce. As well, other producers in similar situations, such as foresters and miners, would feel they deserved a similar exemption.

One of the honourable member's main points seems to be that lifting the gasoline tax on farm commercial vehicles could somehow give the farmer an edge when competing with subsidized foreign imports. Although it is true that high agricultural input costs make it difficult for the farmer to compete on domestic and world markets, the tax rebate suggested by the member would have little effect on the farmers' ability to compete with subsidized foreign imports.

When it comes to subsidy, I would like to point out the well-known fact that Canada cannot afford to compete with the treasuries of the United States and the European Community. The US and EC farm sectors are about eight times as large as Canada's and feed 10 to 15 times as many people. Both the US and the EC receive vast subsidies on their farm products and can afford to sell at below the cost of production. I suggest that when competing with operations of that size, lifting the gasoline tax on farm commercial vehicles will not have much impact on our farmers' ability to compete. We are thinking of more effective ways to help the farmer.

10:30 a.m.

I spent 10 years in the Legislature trying to get the government to do more for farmers. It is good to see that with the Liberal government now in power, things are getting better. The new Liberal government has increased the agricultural budget by 39 per cent since it took office. However, I feel the farmer will never get what he deserves until he takes production, marketing and pricing of his products into his own hands. By this, I mean the farmer must get his product into the supply management system.

I have two reasons for being a supporter of supply management. First, supply management would allow the farmer to get the price he deserves for his product. Second, it would allow us to maintain our present production or close to it. At present, the federal and provincial legislation is in place for farm commodity groups to take the appropriate action to bring in supply management. Both governments at this time are supportive of such action and would work with farm groups with considerable speed.

One of the first steps in this process is for the recognized farm commodity group to get the farmers' consent and then to ask the government to take the necessary action to bring in supply management. The milk, broiler and egg businesses are currently doing considerably better than the other sectors of the agricultural community because of their supply management setups. You cannot find a farmer under this system who disagrees with it. It amazes me why other farm products do not follow suit.

I agree there are problems with supply management, such as quota pricing, but I feel there are ways these can be corrected as well. I had a potato grower tell me the other day that Ontario now produces only 40 per cent of the potatoes that it did 20 years ago and that it produces only about 20 per cent of what it needs.

In the years gone by, other provinces and countries have expanded at the expense of Ontario. If we go to supply management, we will hold the production we have, once the quotas are in place. When bringing in supply management, we may lose a few exports in the red meat industry, but I believe it is only a matter of time before we lose these exports in any case. The US will not let us have an import-export advantage in red meat for long; it can produce just as cheaply as we can.

The Americans may feel that our hogs are a better product than their own at present, but I expect the US farmer of tomorrow will produce the products the consumer wants. The other countries that were once importers are now becoming exporters as well.

To conclude, it looks as if the Canadian livestock farmer will soon be producing for the Canadian consumer. The sooner he moves to supply management, the sooner he will hold his portion of this production.

I thank the House for the opportunity to respond to this resolution and to address issues that are and will continue to be crucial to our farming communities.

Mr. Sheppard: I am pleased to have the opportunity to speak for my colleague's resolution. Farmers in Ontario need a break. The member for Stormont, Dundas and Glengarry has made an intelligent and straightforward suggestion. As a farmer, I support it; as a politician, it makes good sense.

In the great riding of Northumberland, this resolution would involve and benefit a vast majority of my constituents. Indeed, this resolution appears to simply follow the line of past legislation on behalf of Ontario farmers. It is the logical extension of policy that was already on the books.

It is obvious to everyone that the financial situation in agriculture must be a top-priority issue. Recently, the costs of many sorts of farming have risen faster than the general rate of inflation. This is also a time when the prices for commodities have declined in real terms, and yet energy continues to be one of the biggest items on the farm balance books.

Over the years, I have listened to many discussions in this House as well as in committee on ways to reduce the farm energy bill. Some have talked about alternative energy. We have talked about using farm waste to create natural gas. We have talked about using various forms of fuel alcohol. All these discussions have ended up with the same conclusion: Ontario farmers will continue to rely, for a large part, on conventional fuel. The research and technology is just not there at present to allow alternative fuel to be any more than a supplement to conventional fuel sources.

As I mentioned earlier, these discussions always lead us in a circle. That circle takes us back to the farmers' dependence on gasoline and diesel fuel. Previous administrations were wise enough to provide a break for farmers on the price of fuel for running farm equipment. This equipment, which is essential to every farmer, is expensive enough to buy as it is, let alone the cost of fuel and maintenance. Modern farming cannot do without this equipment, and so we should provide a reduction in their fuel costs. The increased taxes on fuel in the fall budget hit the people who could least afford it.

Furthermore, all the member of this Legislature know that agricultural producers have no say in their costs of production, nor have they any say in what they receive for the product. Although farmers will accept any help they can get, members will probably find that most of them acknowledge that measures such as interest-rate breaks and loan guarantees are, at best, only ways to buy time.

The farming industry's reliance on borrowed money ensures that the debt will always be a central issue, but the answer for those who want to stay in business is not how to shed their obligations but how to meet them. We could assist them in meeting those obligations by allowing this resolution to be passed. This resolution is aimed at providing financial relief for nonroad farm vehicles such as the trucks that take goods to market. This could easily be called the transportation sector of farming, which is a significant cost on its own.

Since 1980, the provincial government has been actively encouraging the transportation industry to reduce its use of gasoline and diesel fuel. We have seen plans for pooling trucks, for improving truck efficiency and for providing alternative fuel. These ideas are most effective in urban areas and with owners of large fleets of vehicles. In rural areas, some of these ideas do work, but considerations such as distance, different needs and different markets prevent effective pooling operations in general. Alternative fuels are not easy to come by or as convenient.

Again we are led back to the beginning, and that is the farmers' dependence on fuel. As we are all aware, there is a growing concern over the price of gasoline in Ontario. No one can predict with any certainty the long-term price of gasoline, but any discussion of the price of gasoline avoids the central issue. That issue, once again, is that farmers are dependent on this fuel. At whatever level the price of gas is set, it continues to take a large chunk out of farm income.

These days it is even more important for farmers to have ready access to the city marketplace. Severe competition makes it all the more important for Ontario producers to get their product to market quickly, especially during the all-important season from midsummer to early fall, when fresh fruit and vegetables are available. This results in many trips to the city food terminals and markets. It also results in more use of fuels by the farmers to ensure that produce is on the table when the consumers want it.

Again we are inevitably drawn to the fact that Ontario farmers must rely to a great extent on fuel for their livelihood. Anything that helps ease the burden this dependence causes will be welcome in farming communities.

To my mind, my colleague the member for Stormont, Dundas and Glengarry had a good idea when he proposed tax-free gasoline and fuel for farm commercial vehicles. The mechanics for setting up this system should not be very difficult. It could be arranged that commercial farm vehicles with farm plates licensed in Ontario be given a special permit so that gas bar operators would know that tax was to be deducted from their gasoline bill. Or perhaps an average could be worked out by the farmer and an official of the Ministry of Agriculture and Food, resulting in the farmer getting a cheque from Queen's Park giving him a reimbursement of tax paid for fuel.

10:40 a.m.

A system would have to be implemented, however, to ensure that the farmer's cash flow was not interrupted at a time of tight money. Taking into consideration the amount of the refund, farmers could apply for a tax rebate on a monthly or a bimonthly basis, as opposed to applying once a year. As I mentioned earlier, we have to realize that interest rates are a consideration. When one has to borrow money to obtain supplies, interest rates are an added expense for any business.

We need to provide all the help we can to keep the farming industry alive today. This would involve a fair amount of paperwork for the ministry and farmer alike, which is why I personally prefer the special permit idea.

A number of other approaches could be taken to turn this resolution into an effective cost-cutting measure for the farming communities in Ontario.

At a time when the government in its fall budget advanced funds to help farmers leave the land, I would hope that the members of this Legislature would give serious consideration to my colleague's resolution. Let us in every way we can help the farmers to survive instead of encouraging them to leave the land. Let us help the farmers to get their products to market cheaply, thereby helping the consumers to get the best possible price for home-grown Ontario produce.

Lower farm input costs would definitely benefit both the producers and the consumers. If we are truly serious about promoting self-sufficiency in food, we should take a good look at this resolution and do what we can to make it official government policy.

I am proud to support this resolution for the benefit of all farmers in Ontario. I urge all members to support it.

Mr. Hayes: I rise in support of the resolution moved by the member for Stormont, Dundas and Glengarry, which would permit the use of tax-free gasoline and fuel by farm commercial vehicles licensed in Ontario under the Highway Traffic Act.

I support the resolution, but I believe it barely scratches the surface of today's problem in the agricultural industry. One of the biggest problems, and the main problem, is that the farmers are not paid a fair price for their commodity and their labour. If this were done, we would not be here today speaking about this kind of resolution.

Many of the farmers in my riding of Essex North and in Ontario in general have to work at off-farm jobs to hang on to what they have or to try to finance their farm operations. In my riding alone, I know of a large number of farmers who work in the auto industry, not because they love putting in another eight, 10 or 12 hours a day but because of the way the system works. They are not getting paid a fair share.

One does not have to be an economist to realize the effect it would have on our economy if the farmers were able to work full-time and not have to work at another job to supplement the farm operation.

When the agricultural industry is doing well, the whole economy will do well. This is why this government should put more emphasis on looking into and improving our agricultural industry. Too many family farms are being lost today. And it is not only that farms are being lost: Families are breaking up; people lose everything; they lose their own dignity.

We also have to look at another area. We always seem to be talking about finding money for the farmers and subsidies and grants. Farmers are proud. They do not want handouts. They want a fair price for what they do; they want a fair price for their commodities and their labour. Farmers are always faced with very high input costs. The prices of fertilizer, seeds and fuel continue to go up. At the same time, the farmers do not know from one season to the next whether they will ever be able to recover their costs.

As I mentioned earlier, this bill only scratches the surface and is the least this government can do to help preserve family farms and take some of the burden off the farmers in Ontario. I was very surprised to hear the member for Grey (Mr. McKessock) indicate that he was not particularly in favour of this bill. I repeat, it is probably the least thing we can do to take off some of the financial burden in that particular industry. I reiterate that I support this bill, and I hope we can move on with it as quickly as possible.

Mr. D. W. Smith: I too am pleased to take

part in the debate on this resolution put forward by the member for Stormont, Dundas and Glengarry. In listening to the member as he spoke on this resolution, I know he has put a great deal of thought into it.

On the surface, I believe the proposal appears to be excellent and would assist in reducing the cost to the farmers. When we look around us, though, everything else seems to be going up. All the things we buy seem to be going up in price. I wonder whether asking for another handout is going to be the answer to our problem. Everyone else's cost of living is going up, and wages keep going up, but farmers' revenues keep going down.

I think we have to address this issue from another angle. We must consider that taxes are imposed on different products or services to help balance the different sectors of government and society. From time to time the government can give exemptions or rebates to aid a certain group or sector, thus giving that group encouragement and helping it over a certain difficult period. This concept has been used in the past, and I would have to say it has been quite successful in accomplishing the government's goal.

I also want to tell members that I have been in favour of assisting farmers, fishermen and the mining industry in this way on off-road use; I certainly stand behind that. The one thing I have never liked is the dye they put in fuel designated for off-road use. This has created a tremendous number of problems for the farmers. I know thousands of dollars have been spent to rectify what looks like a very small problem but becomes a major one for the person or individual who happens to own an expensive diesel engine. If we could get rid of the dye in the fuel, it might help.

10:50 a.m.

The member for Stormont, Dundas and Glengarry is suggesting in his resolution that we exempt the tax on farm commercial vehicles that are licensed. I can see that this will likely create problems with other people down the road. We have to work towards getting the price of our primary commodities higher; that is the first and foremost objective we should be trying to get across. That is necessary for a number of reasons, the main one being that not enough dollars are generated at the primary source to create profits to flow through the economic community and therefore enhance the social aspects of that community.

I am not saying the resolution of the member for Stormont, Dundas and Glengarry is not an excellent thought, but I believe it may not go far enough to accomplish a great deal of value or help to the farming community. There needs to be more fundamental change to keep our economic system and our small communities thriving.

The farmers' cash flows with the banks are now based on high input costs, as they have been for the past number of years. In that time, however, we have had declining revenues on the other side of the ledger. Over time, this is going to create tremendous equity problems within the farming community. In fact, it has reached that point right now.

Quite frankly, in my own riding of Lambton we have a number of farmers who are almost coming to blows with the bankers. In past years when they went to the bank, they were able to get their operating loans; there had been no problems. However, it seems that this year all of a sudden they are running into problems.

We have to turn around the thinking of the public at large almost 180 degrees. I have heard people from different walks of life say, "The farmers are just asking for another handout," that we are doing so in this resolution and that we are always crying for more. I think the farming community has this economic system figured out, and all they are asking for is their costs of production plus a profit, the same as anyone else seems to be entitled to in our society.

I can safely say that during the past 35 years you could take some of our major commodities, especially the ones we export, and you would find that in possibly only three or four years have farmers actually received their costs of production plus a profit.

I agree with the member for Essex North (Mr. Hayes) when he says a lot of the farmers are working in plants or in heavy industry. They are not there because they want to do a double job. They are there because they have to be to maintain their farms.

I want to mention a little

article I noticed in the Toronto Star yesterday. It concerns the inquiry into the banks before Mr. Justice Estey. Claude Thomson stated that there were more banks in trouble to nearly the same degree as the Northland Bank and the Canadian Commercial Bank in western Canada, but he would not go on to say which they were or the numbers involved. He told the media he might have said too many things already.

I agree with the member for Stormont, Dundas and Glengarry. To turn this situation around in the farming community, yes, we would help the community to a small degree by voting in favour of his resolution, but I believe we have to turn around the thinking of the public at large. To make our economy work, to make our banks stronger and give them a better debt-asset ratio, we have to give our farmers increases in commodity prices. I agree with the member, but I think we have to go one step further.

I am pleased I was able to take

part in the debate on this resolution. I have to support it, but I cannot put the government in an awkward position as well. I want to say to the people of Ontario, "We are not crying for more; we just have to have our costs to make the whole system work."

Mr. Guindon: In his budget, the Treasurer came out and admitted that agriculture was in trouble. Then he went on to provide nothing new for agriculture, except to cancel one program and to make trucks more expensive. My colleague and neighbour the member for Stormont, Dundas and Glengarry has pointed out that these types of trucks are used to transport food and milk. As the cost of the trucks goes up, the cost charged the farmers for deliveries of milk will have to go up as well. This cost will, of course, be passed on to the consumers.

Instead of reducing costs to farmers, the budget is actually starting to make things worse for farmers. The budget gives agriculture a 13 per cent increase this year, but it is common knowledge that most of the increase will go for 1985 stabilization payments, which the government delayed making in the past fiscal year. There is nothing in the budget to help farmers reduce their input costs so they can make a profit. The Treasurer should accept this resolution and change the Gasoline Tax Act and the Fuel Tax Act to give farmers at least this bit of relief.

Today is the first chance we have to demonstrate that the budget let farmers down and that it took the wrong approach in increasing farm costs. This House clearly showed it wants farm programs to increase input costs as well as the debt relief and interest rate issues. My riding is in the middle of the united counties of Stormont, Dundas and Glengarry. Many Cornwall residents work at providing services to the farmers of Stormont, Dundas and Glengarry, and many others work in the area of food plants. These people stand to benefit indirectly by assistance to farmers on the input side. They will not benefit from the programs contained in the budget.

This government has put all its eggs in one basket in its farm programs. Everything now depends on interest rate relief and loan assistance. Even though the Treasurer recognized that farm prices were a real problem, he did nothing about them. This resolution by my colleague suggests that we look at input costs. This resolution suggests that we give a fuel tax break for farm trucks as a means of helping to reduce input costs.

My colleague was interviewed by the Morrisburg Leader on this resolution in its March 26 issue. There, he used the example that a farmer hauling wet corn to the elevator may get as little as five miles to the gallon under those conditions. This year, corn prices are dropping. If a farmer looks at the additional costs of moving that corn --

The Acting Speaker (Mr. Morin): Your time is up.

Mr. Villeneuve: I thank my colleagues the member for Timiskaming (Mr. Ramsay), the member for Grey, the member for Northumberland (Mr. Sheppard), the member for Essex North, the member for Lambton and the member for Cornwall (Mr. Guindon) for participating in this debate.

It concerns me greatly when I hear the member for Grey in his defeatist attitude say he is worried about the farmer driving his pickup truck to Toronto with a farm licence on it on Sunday afternoon. I hope the member is not saying he is going to prevent this farmer from driving to town on Sunday if the farmer happens not to have any other vehicle. I have some problems with that.

Mr. McKessock: I do not want him to be criticized by his city cousins.

Mr. Villeneuve: City cousins should never complain when their mouths are full.

The Liberals want to keep farm land in agriculture, but they do not care about the farmers out there. That concerns me no end. We have the systems in place. First of all, we use coloured fuel for diesels. I agree with the member for Lambton; I would like to do away with that because it causes problems, but it is there. We also have a rebate system for farm vehicles that do not have licence plates for rebate of the gasoline tax. At the Ministry of Transportation and Communications, we have a category for farm licence plates. All systems are in place.

I have a further point. During the recent debates on the topic of freer trade, much had been said about increasing United States protectionism and US countervailing. This resolution is not countervailable; it will not cause problems. Programs that are countervailable by the US are those that provide funds to producers of selected commodities in specific amounts and rates.

11 a.m.

I agree with members who say we are not going far enough. Of course we are not going far enough. Agriculture is in deep trouble, but this is a message. It is not a great amount of money, but it is a message that this Legislature recognizes the problem of input costs being faced by the agricultural community. It would send a message out that we now realize, appreciate and are starting to address the problems. Instead of simply handing out a rebate on interest and offering loan support, this would address all agriculture, not just those segments that are in trouble.

In conclusion, I hope I have been successful in showing that Ontario agriculture needs that positive step towards assisting in the cost of producing food, the food that the nine million people in this province consume and a lot of which is exported to markets that are difficult to obtain. I hope this House realizes that agriculture needs help and that the message we will be sending in a positive move on this motion will tell agriculture that the Legislature of Ontario knows and supports it.

The Acting Speaker: The time for this ballot item has expired.

WATER DIVERSION

Mr. Morin-Strom moved resolution 32:

That in the opinion of this House, recognizing that the water resources of both the Great Lakes basin and the James Bay basin are precious public resources, and recognizing the constitutional jurisdiction of Ontario to manage and protect its freshwater resources, and recognizing the Great Lakes charter to which Ontario is a signatory, and recognizing that Simon Reisman, Canada's chief trade negotiator has publicly stated that the GRAND Canal project could provide key leverage to negotiate a free trade deal with the United States, this House condemns any attempt to link free trade with diversion of Ontario's water resources; that water resources cannot be part of any trade discussions with the United States, and that Ontario will not consent to any major diversion of its fresh water, now or in the future.

Mr. Morin-Strom: I am very pleased this resolution has finally come up for debate. I hope there will be a vote with very strong support from all three parties. I feel this resolution is vitally important in the context of the free trade negotiations currently going on and of the fact that our chief trade negotiator, Simon Reisman, has been such a strong proponent for the negotiating of a major sale of Canada's water resources to the US as one of the factors that he thinks should be entered into in the negotiations with the US.

This issue came up last fall. It was at that time that I introduced this resolution. It was spurred more than anything else by a major

article entitled, "Canada-United States Trade at the Crossroads, Options for Growth." This

article came out in the autumn 1985 issue of the Canadian Business Review, a very respected business publication put out in our country. The author of the

article is Simon Reisman.

This is a major seven-page

article which goes into some depth on his fervent belief that a free trade deal would be good for Canada. However, most disturbing to me was the link he made between the need for a free trade agreement and the sale of Canadian water.

The subheading just above his name reads, "A comprehensive Canada-United States free trade agreement would be good for Canada, and Canadian water could be used to negotiate a deal." Under the highlights on the front page, it goes on to say: "The author proposes that the United States be offered access to Canadian water by converting James Bay from a salt-water body to a fresh-water lake by building a sea-level dyke across the mouth of the bay. The project is known as the GRAND Canal." I believe the word "GRAND" stands for great recycling and northern development; this was the acronym.

The

article goes on to talk about free trade to some extent, but as well, it goes into some detail on Simon Reisman's thoughts on the GRAND Canal project and some description of this project. It includes quite a diagram, which lays out the whole concept.

The proposal envisions the building of a sea-level dike across the mouth of James Bay, which would create a fresh-water lake from what was previously a salt-water body. Simon Reisman proposes that the United States be offered access to this Canadian water through a system of canals, dams, pumping stations and underground water tunnels fed through the Great Lakes-St. Lawrence water basin. The water would then be distributed through an elaborate canal system of reservoirs, aqueducts, pumping stations and power plants. The new water would then reach water-deficient areas of Canada and the United States.

The James Bay water basin is a major water basin in Ontario. I am sure many members do not realize that the amount of water flowing into the James Bay basin is approximately double the water flow going into all of the Great Lakes system. The amounts of water we are talking about are absolutely incredible and would have a devastating effect on the water flows through the Great Lakes system.

The project proposes to move into Lake Huron a volume of fresh water equivalent to twice the flow of the current Great Lakes system. It would do this by pumping the water upstream to roughly the source of the Ottawa River and then, via the Ottawa River and across through the French River, into Georgian Bay.

From there the flow that now goes from Lake Michigan into Lake Huron would be reversed, and instead the water would flow back into Lake Michigan and from there out west. As well, the flow from Lake Superior would be essentially cut off going through the St. Marys River into Lake Huron, and it would be forced via canal to pumping stations out west through the western end of Lake Superior.

The project may appear to be a rather harebrained one, but it is being backed by a number of important interests in the Canadian business world, including the world's largest construction company, Bechtel, the Power Corp. of Ontario and the nuclear power industry in Canada, and it has been endorsed by Quebec's Premier, Robert Bourassa.

Concerning the GRAND Canal project, to quote directly from Simon Reisman, "The magnitude is five times that of the Apollo moon project, and the project will cost approximately $100 billion and would take 10 years to construct and put into operation."

He goes on to say: "To me, most importantly, there would be bargaining leverage that Canada could exercise by virtue of owning this water and being in a position to control its use. I believe that this project could provide the key to a free trade agreement with the United States."

Very shortly after Mr. Reisman authored this article, he was named chief trade negotiator by Brian Mulroney. Of course, as we all know, we are just in the process now of beginning formal trade negotiations. It is vitally important that Ontario stand up for its interests in protecting its own water resource and protecting its long-term heritage, take a very strong stand and say that this issue is under Ontario provincial jurisdiction and we will never agree to a major diversion scheme of this sort.

11:10 a.m.

There has to be serious concern about the potential for a project such as this and about the support this project has within the federal government. The GRAND Canal project is getting support from Brian Mulroney as well. He has been quoted as saying he views with enthusiasm the prospect of getting Ottawa involved in looking further at this scheme. In recent months, the National Research Council has approved further funding for the GRAND Canal Co., which is looking at further studies towards the development of this project.

There are concerns, however, about why this has been greeted with enthusiasm by certain officials high up in our federal government. The scheme could well be a mega-disaster in both an environmental and political sense. As an Environment Canada official, J. P. Bruce, pointed out at a conference held in Toronto, "There are severe environmental uncertainties associated with large-scale diversions."

Such diversions could alter the world's climate. Our north would become warmer, with our more populated south and the United States suffering drought. That is only a part of the environmental worry, but politics comes into it too. Drought could cause even more demand for our water. Which drought-stricken country would be entitled to meet its needs first? Would it be the US as the buyer or Canada as the seller?

If we were to dig this GRAND Canal, we might end up with little or no say in the matter. As Mr. Bruce states, "Once Canada allows large volumes of water to be exported, the diversions will probably be there in perpetuity." A $100-billion pipeline to the US could not be simply shut off at will, particularly once those on the other end have become dependent on the water. We would no longer have control over our own water.

One of the serious issues here is whether the water is actually needed in the US. There are talks of shortages of water in the US Southwest, but the Americans could handle their impending shortages by taking better care of their own supplies. The US Water Resources Council concluded in 1978, "There is no national water shortage problem now nor in the foreseeable future," but there could be pressure enough to go ahead with the diversion scheme if the US does not conserve more water.

The US has tried diversions within its borders, but it has been pointed out that the real effect of these projects has been to transfer income from one region to another. Vast sums of public money have been spent to provide cheap water for a number of western farmers, in many cases, huge, corporate agribusinesses.

The US Comptroller General studied six irrigation projects and found that what these customers paid for their water was less than 10 per cent of the water's cost. The US taxpayers were the ones who found themselves footing the bill for the rest of the cost.

If these relatively small irrigation projects make such little economic sense, why should anyone believe a transcontinental canal would be any better? If we were to build such a canal, could we really expect the US farmers to pay more than they have been paying in their own country? Who would end up paying the real cost of a Canadian diversion? Would it be the buyer or the seller?

One of the major concerns about this proposal for northerners has to be the means by which the energy will be provided to lift the water from the level of James Bay up to the height of the source of the Ottawa River. If one goes back to high-school physics, there is something called conservation of energy. The amount of energy required to lift the water is the same as the energy that is provided as the water falls.

As we know, that means that to lift all this water flowing into James Bay, it has to be equivalent at least to all the potential hydro power that can be generated from all the rivers flowing into James Bay, only a portion of which have been developed to this point. That is why the energy component to this is the most critical part of the whole project, and the energy component obviously is greater than the hydro resources we have in all northern Ontario and northern Quebec.

As a result, the project would require the building of nuclear power plants along the canal at the various pumping stations as we lift the water from one man-made lake reservoir to another. We have quotes that indicate the energy for this proposal would come from Hydro Québec power plants and from Ontario's nuclear plants.

Gilles Marinier, a former James Bay energy corporation vice-president, who is now closely associated with the project through another major construction company, The SNC Group of Montreal, has been quoted as saying, "One possibility would be to build nuclear stations along the canal." This has to be profoundly disturbing to residents throughout northern Ontario, particularly to our native population.

I have received very strong support for this resolution from a number of northern native groups that are concerned about the possibility of nuclear power development in the north and, of course, a total disruption of their way of life around James Bay and along the proposed route for this canal system.

If nuclear power is used, this would present a danger to anyone living nearby. Also, the uranium required to make the fuel for the nuclear station would mean more uranium mining and an increased demand for uranium that can serve only to hurt people further. Cancer deaths, miscarriages, birth defects and the poisoning of the plants, birds and animals, air, earth and water have been well documented.

Finally, I would like to address again the question of whether large-scale water-diversion projects such as the GRAND Canal are really necessary. While certain regions in Canada and the United States are experiencing water shortages, it may be predicted that these local deficiencies will worsen in the years to come if present trends continue. However, these water shortages are largely the result of waste and mismanagement of local water sources. Another contributing factor is pollution, which makes large quantities of water useless, dangerous and unable ever to support life again.

The focus has to be on getting both Canadians and Americans, in particular, to clean up their act and to get their water usable, drinkable and into a state where their own current water sources could be used rather than having to drain off our pristine water now flowing into the James Bay area.

Massive water-diversion projects such as the Grand Canal are not necessary if people in the dominant society become conservers of water rather than wasters and polluters. Maybe it is time that the non-native people on this continent started to pay attention to the traditional native ways which were once common the world over.

The Hopi Indians in Arizona have been growing corn in a desert environment since the beginning of time. They do not even use irrigation, yet they have enough to eat. These people have perfected agricultural techniques which are suited for land with very little water. The Hopi people have been able to maintain balance and harmony with the natural world. This lifestyle has many things to teach us all, particularly those living in similar climatic areas. The Hopi people are water conservers. They know, love and respect the natural world because they know they are part of that natural world. They are taken care of by the natural world, and this is a good and responsible way to live.

I would ask that my remaining time be reserved, and I look forward to hearing the comments of other members in this debate.

11:20 a.m.

Mr. D. R. Cooke: I rise to support the resolution of the member for Sault Ste. Marie (Mr. Morin-Strom). I do so representing perhaps the largest area in population remaining in the province which is not serviced by Great Lakes water at present. If we take a look at the map of Ontario, practically all of the province is bounded by the Great Lakes or the Ottawa River, with the exception of the areas in the Canadian Shield. London is now serviced by a pipeline, I believe from Lake Erie.

We have some concerns about water supply and perhaps we could be an area that could be looked at as having some problems akin to those in the United States.

Yet, adopting the view, as I understand it, of the Grand River Conservation Authority, I reject outright the thought that we want to have a pipeline from Lake Erie to our community so that we can drink our own pollution. Rather, the needs in that area have to be resolved with the continued use of wells; but that is a different subject. I am concerned that serious credence is being given to such a far-fetched and outlandish concept.

In 1985, the then-dying Conservative government entered into a Great Lakes charter with the other provinces and states that border on the Great Lakes. That charter was meant to be principles for the management of the Great Lakes water resources, which were described as being precious, public natural resources. That charter indicates that the waters of the Great Lakes basin are interconnected and a part of a single hydrologic system. The multiple uses of these resources from municipal, industrial and agricultural water supply; mining; navigation; hydroelectric power and energy production; recreation, and the maintenance of fish and wildlife habitat and a balanced ecosystem are interdependent.

The signatories went on to indicate a desire to preserve that. I am disturbed that the federal government is seriously looking into the concept of diversion with the GRANDCo project. I understand that GRANDCo has been granted $30,000 for a water export project feasibility study and that it is seeking a further a $763,000 from two different federal sources. The province has a great deal to say in this regard and it is not something that can be seriously considered without our approval. I do not know that there is any particular approval in this House. The Leader of the Opposition (Mr.

Grossman), despite his party's opposition to this concept in the past, seems recently to have refused to confirm his commitment to oppose water diversion.

I understand one of the things that could happen if this project went through is that the polluted waters in the Niagara River, which the Americans are so unconcerned about, could be diverted from Lake Ontario back into New York state and into New England and be visited upon the polluters themselves. I do not suggest they should have that problem visited upon them, even though they may, unwittingly, wish it. I suggest the Americans take a good look at that.

We should take a look at the problems that have occurred with the Aswan Dam, where the Soviet Union and Egypt tried a huge water diversion project, which has caused all kinds of ecological problems that were not predicted at the time: stagnant waters; a snail's disease, where if you even touch the snail or its slime you end up dead. They did not know about these things when they asked for the Aswan Dam to take place.

I reiterate the suggestion I made during the throne speech debate last week, that when you look at new technology, you can never tell what all the downsides will be. We have to take a few leaps, but in this case, the downsides are so incredible and there must be so many we do not know about that they are frightening.

There are probably hundreds of thousands, if not perhaps millions, of species of birds, fish and flowers that will be endangered if we change the ecosystem of North America to this great extent, in areas in which we have not put any thought. I think about a situation where the previous government permitted a road to go through Ipperwash Provincial Park, and a simple, short road destroyed the last of a species of flower. That sort of thing would be incredible. I understand the Nishnawbe-Aski people have indicated their whole lifestyle would be completely destroyed. Therefore, I ask the House to vote against the project.

I am pleased there is a shoreline management review committee, with the member for Kent-Elgin (Mr. McGuigan) as the chairman, which is looking at some of the huge problems that exist from a very slight change in the present ecosystem in the Great Lakes, where the water level changed slightly. How could we ever be certain of our control? Many of us have cottages near the upper side of a dam. Those simple dams in those simple circumstances are subject to serious problems of control.

What if a dam broke? What would be left of Ontario? Some serious questions have to be pondered. I think it would be a proper course for this House to tell the federal government and the GRANDCo people that we are not interested.

Ms. Fish: I rise to join in the call for the House to refuse to be any part whatsoever of a water diversion scheme as part of a free trade agreement with the United States or, I might add, part of any agreement with the US. The proposed diversion has been around since the days of Eric Kierans in 1959. It was unacceptable then, it is unacceptable now and it will be unacceptable in the future. The reasons are simple, they have been known for years and still apply today.

Among other things, this proposed diversion involves removing a precious resource from us. There are those who say that, with the flooding problems we have on Lake Erie and elsewhere, when we look around our province at the amount of water we have, surely we can afford to make use of that and export it. The fact that we have flooding problems in no way suggests we have water to burn in a long-term, permanent diversion arrangement with the United States.

Yes, there are flooding problems in Lake Erie. Yes, they should be dealt with. Yes, there should be relief for those near the banks of the Great Lakes. Yes, we should be prepared to see some shifting of the levels in some small way as emergency relief. That is not what this diversion scheme proposes and that is not what the free trade negotiator for the federal government has indicated he supports. He has indicated support for a massive diversion that would, among other things, place at real risk many of the ecological environments as well as the agricultural industries of this province.

11:30 a.m.

For example, all the information to date suggests there may be a devastating effect on fish spawning grounds, an area of care and concern in my government in the years we were in office, with the investment we made in ensuring that the fisheries were strong and our waters full.

There is also the very serious concern about diversion that would replace fresh water with salt water, an incredible proposal. What impact does that have? Apart from the fact that very different marine life lives in salt water and in fresh water, there is the important impact on the climate: the fact of the freezing point differential between salt water and fresh water and the impact this in turn has on the moderating effect that large bodies of water currently have on the climate immediately around them.

It is perhaps most important to realize that the fight we have in front of us for our water is a fight to ensure clean water. It is a fight to ensure that the toxic chemicals that are now discharged into our waterways and drinking water sources are stopped; that they are cleaned up; that the water we do have is returned to the uses we always used to feel should be made of it, and that perhaps in more halcyon days, when we did not understand the impact of the chemical load in our water sources, thought was the case.

That is to say for the important fisheries, for the importance of tourism; and perhaps more important than anything else, for the basic and fundamental health of the people of Ontario as they draw their drinking water from these same areas, as they have their recreation on them, as they are exposed to the chemicals that are there now and as they would be protected from that exposure with a cleanup in the future.

Another question, surely, is the need. Part of the interest in the United States for this incredibly short-sighted approach on the part of some huckster promoters in this country to sell out our fundamental resources is because of a flagrant disregard for the environmental impact of overdevelopment in the US and an assumption that water can always just come down from the north. In the first stretch, it was in northern parts of the US. In the second stretch, it is a little bit over that border, which has been observed only occasionally; that is to say the Canadian north.

The procedures the US has undertaken in its development practices have been echoed in its agricultural practices. The wanton disregard for the drain on aquifers that took millions of years to fill means they are being reduced in less than a lifetime.

The answers, as the Worldwatch Institute of Washington, DC, has clearly indicated, is found not in taking someone else's water, with a potentially devastating impact on the environment of a friendly neighbour -- namely, ourselves -- but rather in finding changes in the agricultural practice in the US to go to dry-crop farming and changes in its development practice for conservation of the existing US water supply. The US is not short of water any more than Canada is short of water; it is short of sensible and practical policies to ensure that the water is well used.

We trade a number of things with the US and a number of things may warrant some review, a review that we hope will always be to the benefit of Canadians. However, in the area of the environment, the trade has been all one way and it has been all to our disadvantage. We are currently dramatic importers of acid rain produced in the US. We are dramatic importers of toxic rain produced in the US. We are dramatic importers of chemicals that leak down the Niagara gorge, that are emitted from proposed Detroit treatment plants and that come to us from throughout the northeastern US and the coal-producing states of the Midwest.

We import a great deal that has seen a tremendous devastation in our environment, that has seen our lakes die, that has seen our tourist industry crippled, that has seen an impact on our fisheries, that has seen a tremendous expense put forward to us in securing safe drinking water for our population, and expenses and a price in health as well as in facilities that we cannot even yet begin to contemplate with the impact of the cocktail effect that currently exists with the chemicals in our waterways.

Now is not the time to place on the table the issue of the draining of our water that will have such a terrible environmental impact if the diversion goes through. In any discussion of exchanges with the US, in any discussion of the balance of import and export, now is the time to place on the table the real priority: ensuring the complete cleanliness of water and ensuring that responsibility is exhibited by the US to prevent the lethal draining of old, uncared-for, unregulated, unattended dump sites, industries and municipal sewage works into the waterways we drink from. That is the priority.

If there is a sensitivity that the discussions should have, directed as they are from Ottawa, it is surely to understand that the priority in exchange is to deal with the deleterious effects we have already suffered from an unwarranted import; not to take the resource we are struggling to improve and send it south of the border to a country that does not need it and that has refused in the past to assist us in ensuring water purity and cleanliness.

Mrs. Grier: I am very pleased to participate in this debate and to support the resolution proposed by my colleague the member for Sault Ste. Marie. I am very pleased to hear support for the resolution expressed by members of the other parties.

It is vitally important that this House be on the record and register very strongly its opposition to any scheme that would see the water, the environment and the ecosystem of this province placed on the table as a pawn in the trading that is going on between our federal government and the US government.

In that debate over free trade, it seems to me there are many different classifications of arguments, and in some of them perhaps the answer is not clear. Some say jobs will be created by free trade; some say jobs will be lost. Some say social services will be diminished. Some say economic growth will increase; some say it will lessen. I think free trade is going to be very bad for our country for all those reasons, but I can at least listen to the arguments on the other side. I am not sure we know for sure what the consequences will be.

But when it comes to trading off our water, when it comes to the scheme to divert the waters at James Bay south to the United States, surely there can be no question about what the consequences will be; the environmental consequences are irreversible. It seems to me the height of arrogance to feel that we can play creator and change the face of the landscape with a project of this magnitude. It seems to ignore the vulnerability of the ecosystem that is involved and to ignore the traditional lifestyles of so many people in northern Ontario -- the native peoples and the rest of the population who have made that area their home and their economic base.

Over the course of the past few years, we have been lulled into a feeling that perhaps things were improving on the Great Lakes. There was a gradual sense that they were important and that improvements were going to occur. I refer to the Great Lakes charter, which was signed in February 1985 by Ontario, Quebec and eight states in the US.

11:40 a.m.

That charter was hailed as a step in the right direction and as an improvement in the environment of the Great Lakes basin. It stated very explicitly that there would be no diversions on a large scale. But when one probes beneath the surface of that agreement, one finds that it is not legally enforceable. One finds that all it really provides is prior notification to the other signatories when diversions are contemplated. In reality, one finds the effect of that charter has been to streamline the approval process rather than to prevent diversions.

The diversions, albeit on perhaps a small scale, are now easier to have approved by those people who feel that is in their interests. We have to be very careful in hailing as forward steps charters of this sort or agreements that may be signed between the federal governments of Canada and the US if they do not contain any meaningful safeguards to protect our environment and our water.

One of the positive results of the signing of that charter has been the formation of an organization known as Great Lakes United. It is a unique coalition of groups that are concentrating their energies on the preservation of the Great Lakes and that are unanimously opposed to the GRAND Canal diversion schemes.

It is interesting to note the variety of groups that are part of Great Lakes United. Organizations include the Michigan United Conservation Clubs, the League of Women Voters, the United Auto Workers, the city of Toronto, the Great Lakes committee of the Sierra Club and the Canadian Environmental Law Association, to name just a few. The range of interests and the breadth of the concerns reflect the diversity of the membership of Great Lakes United.

The resolutions passed by Great Lakes United over the past two years express concern about air pollution and fallout; the protection of water quality and quantity in the Great Lakes; hazardous wastes and toxic substances and their effects on the Great Lakes; levels, flows and diversions; navigation; fish, wildlife and habitat; land use; energy distribution and development; and education.

In pointing out the diversity of its interests and the depth of its discussion, my intention has been to emphasize again that these groups and these resolutions are unanimous in their opposition to the diversion scheme. We ought to take note of the expertise and the depth of concern that have been developed.

Earlier this year, Great Lakes United and the Nishnawbe-Aski nation came to this building and held a press conference asking the province to join in their opposition to the GRAND Canal water diversion scheme and to express concern about the fact that our federal government was giving grants through the National Research Council to enable people to study the feasibility of this scheme.

The fact that such grants are available and have been awarded indicates the creeping nature of decisions such as this. They are promoted, but everyone feels: "That is too farfetched. It will never happen." Gradually, bit by bit, segmented approvals are given until we suddenly find ourselves faced, perhaps unknowingly, with a scheme that has been partially committed. That is why it is so important that today we register very strongly our opposition to this scheme.

My colleague the member for Sault Ste. Marie has talked about the fact that nuclear power plants are going to be required to make this scheme a reality. I would like the members to reflect on the folly of building major nuclear power plants to pump water in a direction that water does not naturally flow. I would ask that they also reflect on the consequences to us all of that expansion of nuclear power.

As the member for St. George (Ms. Fish) has said, the solution is not the diversion south of Great Lakes water; the solution is a very concentrated effort on the part of all governments surrounding the Great Lakes to clean up the waters that flow there and to clean up the effects of contamination and toxic waste that for too long have been allowed to go unchecked. Only when that happens can we be sure that schemes such as the GRAND Canal water diversion are only that: schemes that are never going to come to reality. A good first step will be taken when we support this resolution later today, and I look forward to that vote.

Mr. South: I rise to support the member for Saint Ste. Marie. As I have mentioned before in this House, the battle for the waterhole has engaged man since the dawn of history. All that has changed are the locale and the actors. With limited water, there is limited life; with no water, there is no life. The amount of water on our planet does not change; all that changes is the place, whether it is in the oceans, evaporating, becoming rainfall or falling on the earth and becoming fresh surface water or ground water.

We in this country are blessed with a great fresh-water resource. We must use it well. In the past 20 years we have witnessed some very emotional battles, both international and national. We have seen the battle on our own Pacific coast between us and the Americans over the development of hydro rights on the Columbia River. Internationally, in the Middle East we have witnessed the battle for the control of the Jordan River and we are constantly seeing the continuing battle in the US Southwest among five states and Mexico competing for the Colorado River.

Today we have the technology to move vast amounts of water great distances, by pumping it, by blasting out the land divide between existing watersheds or by any one of a number of other new technologies.

Populations today are very mobile. Many people have decided to migrate, either temporarily or permanently, to the warmer climates of the southern US. Most crops grow more easily in these warmer climates. Of late years, there has been a movement of industry to the less developed southern US. This has been encouraged by lower labour rates, taxes and property costs.

However, the movers and the planners have forgotten one essential part of the equation: the adequacy of water. There is not sufficient water for the agriculture, the industry and the people in the southern US now. They are out of water. Ask the government of Mexico. Ask the farmers of California's Imperial Valley; there they are mining water. In some areas, the water table is dropping at a rate of 10 feet per year. It is like a bank account where one is withdrawing more than is going in. The banker will call and some day someone will have to pay the tune.

Our neighbours to the south are getting drier and drier. The question becomes whether we move the water to the people, where large numbers of people want to go, or whether we move the people to the water. The fresh water we have is fast becoming our most valuable resource. It is our heritage, and we as Ontarians and Canadians are temporary stewards. We must be thoughtful and vigilant, and we have to be apprehensive about the present Ottawa representatives at the international water poker table.

Do we send our water to Texas, Arizona and California so the American farmers can sell us more vegetables and the American car manufacturers of California can sell us more autos? No. I say to our American neighbours to the south: "Send us your grocery list. Send us your car needs. We will use our water to meet your needs. It is your choice whether you want to sit in the sun under a palm tree with a Coca-Cola to slake your thirst or whether you want to sit beside one of our Great Lakes under a maple tree with Adam's ale. Our water is our heritage, our birthright, and it is not for sale."

11:50 a.m.

Mr. Taylor: I have some difficulty in subscribing to the resolution by my friend the member for Sault Ste. Marie. I come close to embracing the proposition, but only in part.

If one reads the resolution, he is using water as a poker chip, as my friend the member for Frontenac-Addington (Mr. South) has said, in bargaining the issue of free trade. That is one issue. In so far as the resolution condemns putting on the table the sale of Canadian water resources as a stimulus to encouraging free trade with the United States, I disagree with that approach and I agree with that part of the resolution.

However, the resolution goes on to say "that Ontario will not consent to any major diversion of its fresh water, now or in the future." In my view, that is a different issue altogether. It is unrelated to the free trade issue as we know it today, let us face it.

Mr. Morin-Strom: It gets to the heart of the matter.

Mr. Taylor: I hear the carping from the member for Sault Ste. Marie. He is concerned about free trade, as his party is concerned about free trade. They are absolutely opposed to the concept of free trade and very adamant in that. They follow the party line and the line of the unions that support that party. That is a separate agenda with a special interest in it.

The wording of the resolution is an attack on Canada's chief negotiator, Simon Reisman, in ascribing to him motives that are not there. It is an attempt to undermine his integrity. The statement by Simon Reisman was made prior to his appointment as chief negotiator for Canada. He has said since that those views are not relevant to his role as chief trade negotiator. Again, it is a red herring in a way; the member is undermining Canada's chief negotiator because of his views in regard to another project altogether.

If the member is concerned about free trade, perhaps he should remind himself of the problems in Sault Ste. Marie today. We had an emergency debate that has propelled the standing committee on resources development into motion. Next week, it will visit Sault Ste. Marie and Wawa to look at the impact of US protectionism and the downfall in the steel market. Only yesterday we heard from an expert in this area that free trade would resolve the problems in the Sault and Wawa area and that US protectionism would be a calamity. Perhaps the member had better rethink his posture in terms of the free trade issue rather than bring in red herrings.

As I mentioned, this whole business of the GRAND Canal system is a separate item altogether. The GRAND Canal system is what we have heard debated today. I think before condemning that system, there should be further investigation of that system. I do not think we should conclude summarily as to the merits of that project. It is altogether different from the issue of trade and using our water resources as a bargaining chip in regard to the issue of free trade.

Therefore, while I subscribe to the proposition that we not use it as a bargaining chip and that part of the resolution, I cannot subscribe to the part of the resolution that states that Ontario should never sell any of its water, that Ontario will not consent to any major diversion of its fresh water, now or in the future. That, of course, could be a diversion within Ontario for Ontarians; it could be a diversion within Ontario for Canadians. It does not necessarily mean the export of fresh water to the US. That is a different proposition altogether.

The proposed GRAND Canal, as the member for Sault Ste. Marie mentioned, is a very large scheme, five times the size of the Apollo moon landing project, which has been mentioned. The current price tag is something like $100 million. The project would employ approximately 300,000 workers, 150,000 directly and 150,000 indirectly, with a time frame for completion of 10 years.

I do not think the House is in a position after an hour's debate to come to a conclusion about the merits of that project, which is altogether different from the proposition of free trade. What the member for Sault Ste. Marie is doing is trying to put another string to his bow in undermining the whole concept of free trade and the proposition that it would be beneficial to Ontario to have free trade.

Interjection.

Mr. Taylor: I am sorry. I did not hear that.

Mr. Speaker: Interjections are out of order.

Mr. Taylor: Thank you, Mr. Speaker. I am looking at the clock. I am rushed by it and I am afraid my time is now up. Thank you for this opportunity.

Mr. Speaker: The member for Sault Ste. Marie has reserved approximately three minutes.

Mr. Morin-Strom: I am pleased to hear that we appear to have nearly unanimous support for this resolution in the House. I was pleased to hear the comments of the member for Kitchener (Mr. D. R. Cooke) and the member for Frontenac-Addington representing the government party. I was particularly pleased to hear the details and extensive support outlined by the member for St. George for the official opposition party.

Unfortunately, I am not quite as happy with the remarks made by the member for Prince Edward-Lennox (Mr. Taylor). The issue here is not fundamentally an issue of free trade. The fundamental issue here is the issue of the environment, the protection of our natural heritage; the protection of our northern way of life; the protection of the ability of all of us to enjoy the wilderness, the recreation opportunities in the north; and the protection of lifestyle of our native people.

It is also to ensure not only that this potential project that has been brought up, the GRAND Canal project, is not discussed in a serious manner in the current trade negotiations, but also, as the member for Prince Edward-Lennox points out, that Ontario not consent to any major diversion of its fresh water, now or in the future. This is not limited strictly to the GRAND Canal project; it establishes a principle, which I think all of us should support, in regard to the utter devastation that a major diversion could create for the province and for our way of life here in Ontario.

By passing this resolution, the Ontario Legislature would be condemning any attempt by the federal government to link free trade with the diversion of Ontario's water resources in the current context, which is where the pressing concern is today. We will ensure that Ontario's fresh water is off the table in the current negotiations, and that is simply what this is trying to do in the current context. As Ontario legislators, we cannot countenance the views of Simon Reisman, who has publicly stated that Canadian water could be part of a trade agreement with the US.

Previous comments by members of the other two parties in the Ontario Legislature have indicated that they share the abhorrence of my party towards the idea that Ontario water resources should be an item for negotiation with the US. The provincial government has the constitutional jurisdiction to manage and protect Ontario's fresh-water resources. By supporting this resolution we will be enshrining the principle that Ontario will not consent to any major diversion of its fresh water, now or in the future.

12:06 p.m.

TAX-FREE GASOLINE

The House divided on Mr. Villeneuve's motion of resolution 33, which was agreed to on the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Bernier, Breaugh, Charlton, Davis, Eves, Ferraro, Fish, Foulds, Gigantes, Gillies, Gregory, Grier, Guindon, Harris, Hayes, Henderson, Hennessy, Mackenzie, McCague, McClellan, McKessock, McLean, McNeil, Miller, G. L, Morin, Morin-Strom, O'Connor, Partington, Philip, Pierce, Poirier, Pollock, Ramsay, Reville, Reycraft, Rowe, Runciman, Smith, D. W., South, Sterling, Stevenson, K. R., Taylor, Treleaven, Villeneuve, Warner, Wildman.

Nays

Callahan, Conway, Cooke, D. R., Cordiano, Epp, Hart, Newman, Nixon, Polsinelli, Smith, E. J.

Ayes 50; nays 10.

WATER DIVERSION

The House divided on Mr. Morin-Strom's motion of resolution 32, which was agreed to on the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Bernier, Breaugh, Callahan, Charlton, Conway, Cooke, D. R., Cordiano, Davis, Epp, Eves, Ferraro, Fish, Foulds, Gigantes, Gillies, Grier, Harris, Hart, Hayes, Henderson, Hennessy, Laughren, Mackenzie, McCague, McClellan, McKessock, McLean, McNeil, Miller, G. L, Morin, Morin-Strom, Newman, Nixon, O'Connor, Partington, Philip, Poirier, Pollock, Polsinelli, Ramsay, Reville, Reycraft, Rowe, Runciman, Smith, D. W., Smith, E. J., South, Sterling, Stevenson, K. R., Warner, Wildman.

Nays

Dean, Gregory, Pierce, Taylor, Treleaven, Villeneuve.

Ayes 55; nays 6.

The House recessed at 12:19 p.m.

AFTERNOON SITTING

The House resumed at 2 p.m.

MEMBERS' STATEMENTS

HOSPITAL FUNDING

Mr. Brandt: Yesterday, in response to a question from the Leader of the Opposition (Mr. Grossman), the Premier (Mr. Peterson) indicated that the $850-million commitment to capital investment for hospitals over the next five years would allow hospitals to engage in long-term planning. He also indicated that this amount was an increase in funding, although I have some difficulty with the arithmetic being used by the government.

If last year's capital program totalled $170 million in capital spending for hospitals and was deemed to be inadequate by the current government, I fail to see how $850 million over five years, or perhaps over as many as eight years -- surprisingly enough, it is exactly $170 million a year if taken over five years-can be deemed adequate. That may not be new math, but it is accurate. There has been no increase in funding on the basis of the figures we have seen to date.

Be that as it may, chronic bed shortages in my area of Sarnia are reaching crisis proportions. A commitment from the government is needed to complete the years of planning that have already taken place. St. Joseph's Hospital has already raised close to $4 million. The local community has done its part. The present government now has an obligation to fulfil its commitment, which means nothing short of an approval to proceed, coupled with the necessary funds if, to use the Premier's words, it is to get on with its long-term planning.

PENSION FUNDS

Mr. Mackenzie: The government of Ontario has sat back over the last year and watched a massive raid on the pension funds of workers in this province. More than $187 million of so-called surplus earnings in private plans has been pocketed by a variety of different corporations in the last year alone. Right now, Rexnord Canada

Ltd. in North York and Port Hope is applying for more than $4 million of earnings in the workers' pension funds, at a time when it is in the process of rationalizing the operation, shutting down a plant and eliminating the jobs of long-service employees.

Most private pension plans lack indexing, most of them are inadequate to begin with, and any surplus earnings should go back to the workers. The principle that pensions, however negotiated or funded, are deferred wages is something that has been almost universally accepted in this country for a number of years. This government appears to be backing off from that principle and is reversing the principle of pension contributions as deferred wages.

If this government has decided this is the case, it owes an explanation to the public of Ontario and to workers over the ownership of workers' pension plans.

SOVIET JEWS

Mr. Offer: I am pleased to inform the House that a group of students is travelling across Canada on behalf of Soviet Jewry. Today, they are in Toronto and will be conducting a rally this evening at Queen's Park to express outrage at the deprivation of human rights experienced by Soviet Jews. They will be travelling across this country to Expo 86 in Vancouver, taking the issue of Soviet Jewry to the people of this country.

It is gratifying to see so many of our youth in this issue taking up the cause of the right of freedom of expression, freedom of worship and freedom of speech. In this province and in this country, we are grateful to be able to express ourselves freely at all levels of involvement. It is incumbent upon all of us to take note that this freedom is not given to all in this world. These students and others, by their actions, serve to remind us that the sweet fragrance of freedom is one which cannot be shared by all.

Their commitment, determination and sacrifice give many thousands of people the hope that one day they too will be able to live as we do. I am confident of the future when I see the energy of our youth fighting for something so dear to all of us.

NIAGARA POWERMATIC CARWASH

Mr. Partington: Following a letter I sent to the Minister of Consumer and Commercial Relations (Mr. Kwinter) late last month, he will be aware of problems at the Niagara Powermatic Carwash where, on October 25, 1985, contractors for the Liquor Control Board of Ontario began excavating for an outlet at 179 St. Paul Street West in St. Catharines. The removal of soil along the west foundation and under the footings of the car wash, which is next door, caused complete collapse of a large portion of the west wall and serious damage to those portions left standing. As a result, the car wash is now inoperable.

An architect's report indicates the building cannot be salvaged. It will have to be taken down and completely rebuilt.

The innocent victims in all this are Peter and Don Kobryn, the owners. The LCBO has turned the matter over to its insurer and there the matter sits. However, while a settlement is awaited, while court proceedings unfold, the Kobryns face bankruptcy. They have had to lay off all their employees; they have lost their source of income; they have been burdened with legal and engineering costs; and they have been making mortgage payments on an inoperable car wash.

Also, the people of west St. Catharines deserve an immediate resolution of this matter so they may have their long-awaited LCBO outlet.

I ask the minister to take whatever action is necessary to expedite a conclusion to this matter. I also ask that he make interim financial assistance available, perhaps in the form of an interest-free loan, until settlement is reached. In that way, he will protect the innocent owners of the car wash, save the jobs of the Kobryns' employees and show sensitivity in his handling of the affair.

SAFETY ASSOCIATIONS

Mr. Philip: This morning in the standing committee on public accounts, I introduced a motion for an inquiry into expenditures by nine safety associations in Ontario. The motion will be debated and voted on next Thursday.

The expenditure of these associations has skyrocketed from $9.9 million in 1975 to $31.4 million in 1985. One must ask whether value for money is being received, since work-place injuries have increased by 25 per cent in the last two years alone.

Among the issues we will be looking at are the following: In 1984, the Industrial Accident Prevention Association moved into new headquarters at approximately twice the cost of some that could have been obtained down the street. Last year, close to $1 million was spent by IAPA staff on travel alone. IAPA has spent money on such extravagant items as oil portraits of its general managers.

These are but a few of the fiscal concerns we will be looking at. One must ask if these extravagances are in the best interests of employees, of companies burdened by Workers' Compensation Board premiums or the public.

MIDDLESEX-LONDON DISTRICT HEALTH UNIT

Mr. Reycraft: I want to draw to the attention of the Legislature a very happy event that will take place in the city of London tomorrow afternoon. It will occur at the site of the very historic forks of the Thames, a site that was once proposed by the then governor, John Graves Simcoe, to be the capital of Ontario. Had that proposal been followed, it would be the site of this chamber and the building in which it is now contained.

While the site is important, its importance is secondary. For many years, the Middlesex-London District Health Unit has been labouring diligently to provide quality health care services to the people of London and Middlesex county. The unit has laboured under the handicap of having its accommodations dispersed in three or four different locations around the city. The board of health has been attempting with some diligence to try to achieve a consolidation of the facilities.

As a result of their work, a lease agreement with the council of the county of Middlesex has been achieved to construct a new facility for them. The new accommodation, which is as attractive as it is functional, is to be opened tomorrow afternoon. I want to congratulate the councils of the county of Middlesex and the city of London, as well as the board of health, on the official opening of their new accommodation tomorrow afternoon.

STABILIZATION PAYMENTS

Mr. Stevenson: This morning at 10 o'clock, John Wise, the federal Minister of Agriculture, announced an interim stabilization payment for corn and soybeans. This payment is $5 per ton for corn and $9 for soybeans. It is approximately 50 per cent of the expected final payment, which will be calculated at the end of this crop year ending on October 31, 1986.

The payment for the same period on the provincial stabilization program is expected to be $7 a ton. If our payments were calculated on Ontario prices only and not on a pooled price of Ontario and Quebec, that $7-payment would rise to an expected $8.50. We firmly believe the Minister of Agriculture and Food (Mr. Riddell) should announce today that he will also come forward with a $5-per-ton interim payment to the cash-starved Ontario farmers.

2:12 p.m.

STATEMENTS BY THE MINISTRY AND RESPONSES

CORPS D'ÉLITE

Hon. Mr. Eakins: We are honoured today by the presence in the west gallery of the first four recreation volunteers to become members of Corps d'élite Ontario. Earlier this afternoon I had the pleasure, along with His Honour the Lieutenant Governor, to present awards to Albert Bourdeau of Embrun, Joseph Craig of Scarborough, Mrs. Frances McHale of London and Frederick Whiskin of Burlington.

Corps d'élite Ontario is a new program created by my ministry to honour individuals who have made a significant impact on the development of recreation in this province. It is in keeping with our government's commitment to honour those who care about their communities.

Joseph Craig and Frederick Whiskin have made notable contributions to recreation through their involvement with the Boy Scouts of Canada. Mrs. Frances McHale developed day and wilderness camps for youths as well as recreation programs for older adults. Albert Bourdeau assisted in the development of regional and provincial recreation programs and services, including the development of a francophone recreation association.

These four members of the Corps d'élite Ontario are the first of many. In future presentation ceremonies up to 35 awards will be conferred annually at the provincial level.

The Corps d'élite Ontario program also recognizes volunteers on a regional level, and this part of the program is just getting under way. During the next few months, outstanding volunteers will receive recognition in each of my ministry's five regions. Up to 15 people will be honoured annually in each of the regions.

The first four members of the provincial Corps d'élite were selected by a special committee of seven parks and recreation leaders from across the province.

The role of the recreation volunteer has long deserved greater recognition. It is estimated that volunteers contribute more than 20 million hours a year to recreational organizations, events and activities in this province. By honouring these four individuals, we are also honouring the thousands of other volunteers, coaches, leaders, managers, co-ordinators and committee members who give generously of their time and talents to recreation. Without them, the quality of community life in Ontario would not be as we know it.

I ask all honourable members to join me in congratulating these four outstanding individuals.

[Later]

GREETING OF VISITORS

Mr. Grossman: Mr. Speaker, on a point of order and privilege: I notice that the Corps d'élite members who were introduced by the Minister of Tourism and Recreation (Mr. Eakins) a moment ago, just as happened yesterday, have now been escorted out of the House prior to an opportunity being granted to the opposition parties to join the government in welcoming them to the House.

Yesterday, the government House leader apologized and promised it would not happen again. Now for the second time, perhaps pursuant to the strategy of the Minister of Citizenship and Culture (Ms. Munro), which was outlined in that offensive document, the government continues to do something which we on this side of the House find totally offensive.

These are not partisan events. If the government wishes to have partisan events, it can have them outside of this House. When they introduce visitors to the House, opposition parties should have an equal opportunity, in accordance with the courtesy established here many years ago and only violated since this government came into office, to join the government in expressing the greetings of all members of political parties in this House. We are offended.

Mr. McClellan: It is a matter of very basic and elementary courtesy to the opposition parties that the practice which happened yesterday and again today be discontinued.

I have one suggestion. After the discussions we had and the apologies which were rendered, I believed we had solved the problem, but obviously we have not. May I suggest to the government House leader, first, that statements welcoming distinguished visitors and guests be put at the bottom of the list of ministerial statements and, second, that ministry staff be instructed not to escort distinguished visitors and guests out of the galleries until the other two parties have had an opportunity to extend non-partisan greetings to them.

I hope this does not happen again.

Hon. Mr. Nixon: I believe the difficulties that have been brought to the attention of the House on two successive days are essentially a result of the new rules rather than a result of any intention on the part of the ministers concerned.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Nixon: Under the previous rules, a tradition had grown that right after prayers members on all sides would introduce visitors of note. Quite often it was accepted that other parties would respond in the usual way.

It was also a very healthy custom that the member on any side who was introducing an individual or group of note would make sure other parties knew about it so that all could take

part in what is essentially, and must continue to be, a non-political and useful exercise.

With the acceptance of the new rules, it was understood that these informal interruptions, if I may call them that, in the general order of business would come to an end. For the first 10 minutes, private members would have an opportunity to introduce visiting dignitaries of whatever level, including hockey teams and so on. This was generally accepted, and by mutual agreement the ministers were excluded from participating during that time period.

The suggestion that any ministerial statement be at the end of statements so that the next

section would be the response from opposition parties is an excellent one. We have not had a chance to instruct ourselves as a cabinet since the occasion yesterday, but the ministers are here and they are aware of the dislocation -- and to some extent the embarrassment -- the new rules can cause. We are all aware of this.

I assure the members that this is not in any way an overt obstruction of the opposition. To the contrary, I assure the members on behalf of my colleagues that we do not want this to happen. I should also say that the members of the Corps d'élite group who left went of their own accord; they were not escorted out. I am sure they would very much miss the opportunity to hear the comments of opposition members.

I think we will straighten this out. I would ask that you, Mr. Speaker, and the honourable members accept my assurances that we feel we are responding to the rules, but we can do better and we intend to do so.

Mr. Speaker: I have listened carefully. The Leader of the Opposition (Mr. Grossman) rose on a point of order or a point of privilege. Again, I have to say it is not really either of those points, but rather, it is a point of objection. I think it has been taken into consideration.

[Later]

CORPS D'ÉLITE

Mr. Rowe: I take this opportunity to join the Minister of Tourism and Recreation (Mr. Eakins) in congratulating the first four recreation volunteers in the Corps d'élite program. Our party realizes the important role of individuals who make a significant impact on the development of recreation in this province, and we salute the four citizens who have the honour of becoming the first four recreation volunteers in the Corps d'élite program. We say to them: "Well done. Your communities and your province appreciate your commitment."

Mr. Hayes: On behalf of my colleagues in the New Democratic Party, I also want to join the Minister of Tourism and Recreation in congratulating the four members of the provincial Corps d'élite. We feel recreation is a very important fibre in our way of living, and it is a good way to develop young people in our society. It is also another very good way of keeping our seniors active. Without people like the four members of the Corps d'élite, many of our recreational activities for the young and the old would never be possible. Once again, I congratulate and thank them very much for what they are doing for this province and this country.

YOUTH EMPLOYMENT

Hon. Mr. Sorbara: Earlier today I took

part in the kick-off of a private sector campaign to create summer jobs for students in Metropolitan Toronto and York region. The campaign is one of three in this province where the private sector is assuming a leadership role and stimulating more opportunities for summer employment for more young people.

These initiatives are taking place in Metro as well as in the national capital region, including Ottawa, Hull, Gatineau and Aylmer, and a July campaign in North Bay. Each is unique and addresses the particular needs of the local community.

Je suis ravi que mon ministère participe à cette campagne en collaboration avec le gouvernement fédéral, le gouvernement du Québec pour la région de la Capitale nationale, les administrations locales et dans une large mesure, le secteur privé.

It is my pleasure today to salute the leaders of these local initiatives. They are: Don Cruickshank, vice-president of corporate communications at Bell Canada, who is providing leadership for Youth Action/Jeunesse Action `86, which is the Ottawa campaign; Dennis Mills, the vice-president of corporate affairs for Magna International, who is the leader of Youth Network, the Metro campaign; and Mayor Stan Lawlor, chairman of the North Bay and District Youth Trust, who is the leader of the two-day job blitz to take place in that lovely city on July 7 and 8.

These initiatives complement the summer jobs programs of my ministry, which I announced in this Legislature four months ago. The sum of $43.8 million was allocated for Experience `86, the Ontario youth employment program and Start-Up, the last of which provides interest-free loans to eligible students. The deadline for Experience `86 has passed and the deadlines for Summer Start-Up and the Ontario youth employment program will both occur in the next month, just as these private sector initiatives go into high gear.

In each of these private sector campaigns, the target is additional summer jobs, beyond the number normally achieved through regular hiring and government programs. In Ottawa, the target of Youth Action `86 is 2,000 additional jobs. In Toronto and York, the target is 10,000 jobs. Last year in North Bay, a one-day job blitz generated close to 250 jobs for summer students.

My ministry, through the office of the Ontario youth commissioner, Ken Dryden, has provided some of the inspiration for the campaigns. In addition to ongoing advisory support, we have also loaned staff and made a financial contribution to the national capital and to the Toronto-York campaigns, which has been matched by the federal and local governments. It is worth noting that the combined support from all levels of government amounts to slightly more than one quarter of the total costs of these campaigns. It is largely the private sector, through financial contributions and donated services, which is accepting this significant responsibility.

These initiatives will draw out additional summer jobs, and summer jobs for young people who otherwise probably would not have them, from the private sector that may not be there in the absence of volunteer effort.

La création d'emplois d'été, afin de permettre à nos jeunes d'acquérir de l'expérience et une certaine formation professionnelle, est un noble objectif que nous nous efforçons d'atteindre par la collaboration.

Once again, I want to take this opportunity to congratulate and thank all of those who are working with government to increase summer job opportunities for our young people.

Mr. Gillies: In response to the statement by the Minister of Skills Development, I join with him in saluting the efforts of the three private sector individuals who are doing what they can to create summer jobs for young people in this province this summer.

We certainly hope, as the minister does, that some thousands of new jobs for young people will result. This is necessary, faced with the lack of increased commitment by this government to the young people of this province. The minister, as if with pride, repeated that the government of Ontario will be spending $43.8 million on youth employment this summer. This is exactly the same amount as last summer without even an inflationary increase.

As recently as yesterday, the Treasurer (Mr. Nixon) repeated that the entire youth envelope of the government this year will be $175 million, exactly the same as last year. The $25 million in additional funding promised by the Treasurer in his last budget is missing. All of this points to the fact that if additional young people are going to get jobs in a very tough summer, they will indeed have to get them through the private sector, because they are not going to get them through the government of the Premier (Mr. Peterson).

We wish them well. The students need these jobs, so that they can return to their studies next year. They need every effort and advantage we can offer them. I suggest to the minister that, rather than statements and press releases, what we need from the current government is real commitment.

Mr. Warner: In response to the statement of the Minister of Skills Development we are supposed to be grateful for small crumbs, but I want to remind him of some very simple arithmetic. Many university students will obtain minimum wage jobs this summer that will net them approximately $2,400. The cost of attending university in town is approximately $6,000 and out of town it is approximately $10,000. What he is doing is guaranteeing that young people will mortgage their futures.

He has to do one of two things. He has either to create a more buoyant economy or to find a way to lessen the cost of university for young people or they will continue to mortgage their futures. He has addressed neither of those two potentials. It is a very disappointing response to an urgent need in our community.

Mr. Martel: Right on.

Mr. Speaker: Order.

PROVINCE OF ONTARIO SAVINGS OFFICE

Hon. Mr. Nixon: As Minister of Revenue, on January 13 I introduced a new daily interest savings account in the Province of Ontario Savings Office. I would like to bring the members up to date on the progress of this account.

As of today, POSO clients have opened more than 21,000 Trillium accounts with deposits totalling $400 million. While in large part this is the result of existing customers taking advantage of the benefits of our daily interest account, what is significant is that our deposits since January 13 have increased by $87 million. This is particularly encouraging because it means former customers are returning to POSO and existing customers are transferring deposits from other institutions.

We are gratified by the return of many valued customers. The slow decline in POSO accounts has been dramatically reversed. Indeed, we fully expect to regain the $100 million that customers transferred out of the Province of Ontario Savings Office in the past year or so in order to gain daily interest. We anticipate additional increases in deposits.

Since we introduced the Trillium account, the interest rates have increased eight times, reflecting our determination and ability to compete in the changing financial marketplace. Trillium accounts with daily balances of $5,000 and over now earn eight per cent, while daily balances under $5,000 earn 6.5 per cent.

Several of the members have told me they have followed my advice and opened a Trillium account. I advise the other members to follow our lead, exercise their financial acumen and go over to the Queen's Park branch in the Macdonald Block and say, "Bob sent me."

Mr. Philip: While I welcome the statement by the Minister of Revenue (Mr. Nixon), which indicates that deposits in the Province of Ontario Savings Office have risen to $400 million, this is very small and pale indeed compared to the $4.2 billion now on deposit in the Alberta Treasury Branches. The difference between Alberta and Ontario is that the Alberta Treasury Branches have the opportunity to compete with the banks and to make loans. That was envisioned by the father of the current Treasurer (Mr. Nixon) and his government when they established the Province of Ontario Savings Office. It is too bad the Conservatives diluted the powers of those savings offices in 1923.

Once again I call on the Treasurer to adopt my private member's bill to allow the Province of Ontario Savings Office to be competitive. If not for my sake, then at least in his father's sake, I say to him to restore the Ontario savings offices to their original intention.

2:31 p.m.

ORAL QUESTIONS

HOSPITAL FUNDING

Mr. Grossman: I have a question for the Minister of Health. We asked this question of the Premier (Mr. Peterson), but he did not quite seem to understand what the budget announcement was. I am sure this minister does.

With regard to the announcement of $850 million for hospital capital over five or eight years, it appears that the current commitments or undertakings for hospital capital would have the government spend approximately $170 million per year during the next few years. If this is all additional money, can we presume that this coming year there will be not $170 million but $340 million spent on hospital capital?

Hon. Mr. Elston: The honourable gentleman will realize that what this announcement quite clearly indicated was that there was $850 million in new money for the planning stage. We will be making announcements in the upcoming days and months that will indicate the addition of upwards of 4,000 new beds in our system, and he will understand that it will be new money, not having to do with past commitments.

Mr. Grossman: If it is new money, I remind the minister that the budget plan -- that is this document -- this week reported $168 million capital for this coming year, which is the flat-lined number; so we can presume that none of this new money is going to be spent in this coming year, according to the budget.

As further proof of that, can the minister tell us whether, in the moneys already committed by the ministry and therefore not included in his new announcement, are the North Bay Civic Hospital, St. Mary's General Hospital in Timmins, Sensenbrenner Hospital in Kapuskasing, North Albany Hospital and Espanola General Hospital?

Hon. Mr. Elston: Those projects are already on go; they have been budgeted for. The honourable gentleman knows full well, having contacted our ministry through his research department, that those are projects that have been and are budgeted for under the old capital program. They are in addition to the $850-million phase I program that was announced by the Treasurer (Mr. Nixon).

Mr. Grossman: The position of the Minister of Health is that his government, when it announced the technology fund, did not just announce the $50 million a year of new money but took the old money and added the new money to announce $100 million a year, or $1 billion.

The minister is taking the position that his government has underestimated its spending, that it did not include all of these previous commitments for northern Ontario when announcing what its capital program is going to be for northern Ontario in the next five or eight years.

If that is his position -- which I would be highly suspicious of, given the way he has been putting out news releases -- is the $850 million the government's share, or is that the total cost of all the projects, including the one-third contribution by the public?

Hon. Mr. Elston: The commitment to northern Ontario will go up in the phase I program; it will be four projects there. I do not want the Leader of the Opposition to leave the impression that there are no new initiatives set for northern Ontario, because there are. The $850 million, about which the Treasurer announced the commitment of this government in terms of real dollars for the building of new hospital beds throughout Ontario, is the government's money for the start-up of that phase I program in