REPORT, SELECT COMMITTEE ON PLANT SHUTDOWNS AND EMPLOYEE ADJUSTMENT
The House resumed at 8:01 p.m.
REPORT, SELECT COMMITTEE ON PLANT SHUTDOWNS AND EMPLOYEE ADJUSTMENT
Consideration of the draft final report of the select committee on plant shutdowns and employee adjustment, January 1981.
Hon. Mr. Gregory: Mr. Speaker, prior to calling order 39, I wish to remind you of the agreement among all three parties as to the distribution of time. I think all three parties agree that the time should be allotted on an equal basis. Might I add that the Clerk's table will keep the time.
Hon. Mr. Elgie: Mr. Speaker, I am pleased to have this opportunity to acknowledge, first of all, the diligence with which members of the committee on plant shutdowns and employee adjustment have discharged their responsibilities.
I believe the members involved made a substantial contribution by clarifying both for members of the Legislature and for the public many complex issues related to terminations of employment as a result of plant closures.
I commend the members in particular on the fact that they have conscientiously examined all the relevant points of view. The draft final report faithfully records the positions of the various groups that appeared before that committee.
It is, of course, the responsibility of the government to develop legislation it believes to be appropriate, having regard to the alternative and often conflicting positions advanced by the parties of interest. In the bill I introduced earlier today in this Legislature, I believe we have succeeded in achieving a fair and equitable balance.
Mr. Cassidy: It is a copout.
Hon. Mr. Elgie: My friend is a copout. He should just sit still and behave himself. He should try it; he might like it, and others might like him more.
Mr. Cassidy: It is a copout and nothing more. The minister kowtowed to the chamber of commerce, and he would not listen to his own members on the committee.
Hon. Mr. Elgie: I also want to note that our positions on interim pension reform, on cooperative employee adjustment measures and, of course, on severance pay are in keeping with the more important themes of the committee's draft final report.
The government and the committee appear to be in agreement on the rationale for introducing measures to diminish both individual and societal disruption caused by plant closures and the resulting large-scale terminations of employment. We recognize that when employees are terminated they lose, along with job security, their seniority rights and promotion prospects as well as their rights to pensions and other benefits. The losses suffered by longer-service employees are necessarily proportionately greater.
When the termination of larger numbers of employees is brought about by a complete or partial closure of an establishment, there are unquestionably losses of service-related rights and benefits that will never be recaptured and that, on principles of equity and fairness, should be recognized and compensated for.
As I have said, the government has introduced legislation to address what I believe to be the major concerns identified in the report and in the various briefs presented to the committee. Members will recall that in December, for example, the Pension Benefits Act was amended in several significant aspects. As a result of those amendments, persons who have vested pension rights but have not yet reached early or normal retirement age at the time of the plant closing are further protected.
In addition, a pension guarantee fund has been established to protect unfunded liabilities when a pension plan is terminated because of a plant closure or for other reasons.
These provisions were introduced to address the immediate problem that has been identified with respect to pension entitlement in instances of plant closure.
As members know, the government also announced in the throne speech that a select committee of the Legislature would be established to study the recommendations of the Haley Royal Commission on the Status of Pensions in Ontario --
Mr. Cassidy: It is the worst report on pensions this country has seen.
Hon. Mr. Elgie: If anyone wants to know about the worst, he just has to look over at the honourable member. Perhaps he could sit still a minute and listen.
The recommendations concerning earlier vesting and portability have particular relevance for employees terminated in the circumstances I have described, and we will all await with interest the results of the deliberations of that committee.
The bill that I introduced earlier today has some effect on the pension rights of employees who receive notice of termination under the Employment Standards Act. Under that bill, employer contributions to benefit plans, including pension plans, must be maintained during the period of notice of termination as well as during the period for which notice should have been given and where pay in lieu of notice has been given instead.
For purposes of administration of the Employment Standards Act, contributions to benefit plans will be considered as wages, thus enabling officers of my ministry to enforce their payment.
As I mentioned earlier today, the bill also includes provision for severance pay where there is a permanent discontinuance of all or part of the business involving the termination of 50 or more employees.
As I have said, there are a number of details that will require elaboration as we proceed to second reading and later to clause-by-clause examination of the bill. For example, entitlement is dependent on five years' service with the employer. The bill provides one week's wages for each year of service up to a maximum of 26 weeks.
To protect against the avoidance of severance pay obligations by an inordinately long period of phase-out, the bill stipulates a period of six months for determining the total number of workers affected by any full or partial closure.
There are other provisions dealing with the entitlement of part-time employees, employees on strike or who are locked out, employees absent owing to illness or injury and employees who, upon closure, elect to retire on full or reduced pension benefits.
Exceptions are made for employees who refuse offers of reasonable alternative employment with their employer or who fail to exercise their seniority rights to secure alternative jobs.
Setoff provisions are made for supplemental unemployment benefit plans and for contractual severance pay benefits.
We will have a full opportunity to discuss these and other important aspects of the bill as it proceeds through the legislative process.
As I have also mentioned, the bill recognizes that productive re-employment is the ultimate goal of any program to relieve the effects of large-scale termination. It provides, therefore, that the minister may require employers to participate in actions and measures to facilitate the re-establishment in employment of those who are being terminated.
This portion of the bill envisages the establishment of manpower adjustment committees, but it may also lead to other measures which may be more effective in achieving re-employment goals. I happen to regard these latter measures as extremely important. They support the initiatives of my special adviser in this area, Mr. Robert Joyce, and of our plant closures branch, which was created last fall.
Members will recall that Mr. Joyce was appointed to inquire into potential plant closures to determine whether those closures could be averted and to co-ordinate the various government services that might be appropriate in any given situation. Since the first of the year, Mr. Joyce and his staff have been looking at alternative routes of achieving the efficient and satisfactory relocation of employees affected by mass termination.
8:10 p.m.
Of particular interest is a pilot project now under way in the Toronto area. I think it represents the kind of practical measure and action to which the proposed legislation refers in general language. It also reflects our conviction that employers and government agencies can work productively in mobilizing all available resources and expertise to help those who risk becoming either unemployed or inappropriately employed.
If I may, I wish to share with members this evening some of the details of this initiative.
Impartial professional advice is often an important component in a successful job search, and this is available now through a number of private and public agencies. Workers who are terminated under any circumstances become eligible for counselling under federal government programs once they become unemployed.
However, we in this government happen to believe that those who are terminated as part of a large group have special needs for informed counselling and could best benefit from this counselling before they become unemployed.
Mr. Cassidy: Tell the worker how well off he is by losing his job.
Hon. Mr. Elgie: The member opposite should just sit still. He should try it; he will get used to it and he might learn something.
Because of the interest the government has in counselling before unemployment, when we were notified of the pending termination of a group of employees because of a Metro area plant closure we met with company representatives and arranged a contact with a local community college to design and implement an intensive program of counselling for the designated employees.
Within a very short time the college had developed a proposal that provides five days of group and individual sessions for each employee, to which the company agreed. The cost is being shared in this instance by the employer and the college. The employees are being given time off during the notice period to avail themselves of the college's services, and two thirds of the employees are actively participating in the program.
While it is too soon to measure in precise terms the success of this new and promising venture, I am very encouraged by it. We have planned evaluations from four points of view: the employer's point of view, the employee's point of view, our own point of view and the Ministry of Colleges and Universities' point of view. I will be happy to provide those evaluations to this House when that program has been completed.
We are optimistic that this approach will prove to be extremely beneficial and may very well serve as a model for other situations.
Counselling is directed at helping employees to examine the options that may be open to them. Retraining, perhaps through the college system, is one of those options; relocation may be another. If a worker has lost one position because the industry in which he is employed is declining it may be unwise to seek another job in that same sector, because it may be a reflection of the changing economy and the changing demand.
A counsellor may help to identify skills that are transferable or portable into some other area of expertise, and the client may be advised on how best to market himself or herself. In any case, the goal is to help that employee to obtain a potentially long-term and satisfying situation.
While the overall long-term solution to unemployment depends upon the strength of our economy -- a subject, I might say, that is being addressed by other government initiatives, such as those referred to in the Board of Industrial Leadership and Development document -- I am confident that the employment adjustment measures we have taken within the Ministry of Labour will be of assistance in addressing the very real human problems related to full and partial plant closures.
Mr. Cassidy: The minister should tell us about his concern; he should tell the unemployed workers about his concern.
Hon. Mr. Elgie: Let the member talk. He is not going to be doing it for very long; that decision has been made.
The deliberations of the select committee have provided very useful insights for us in establishing the direction of the government's program. Quite frankly, I commend that committee for its important work.
Mr. Van Horne: Mr. Speaker, I am very pleased to be able to participate in this debate this evening. Not more than 30 or 40 seconds ago, I was reflecting on the problem a lot of people have from time to time when they start to speak on a topic. The problem is that occasionally one has so many things to say that one does not know which point to make first.
As I look into the gallery and see the many young people here this evening, I am very pleased to see these young folks sitting in on a debate like this. What we are looking at is a topic that will affect each and every one of them as they move through the next five, 10 or 15 years.
I make that observation simply because for the last two years I have spent many hours and considerable energy in trying to assess what I perceive to be the problem of the labour market here in Ontario as it relates to the relative happiness or unhappiness in the lives of the people of this province. We simply cannot divorce one from the other. What happens with workers, those people who punch the clock every day, has a direct and definite bearing on the lives of each and every one of us.
Having made that observation, and having been exposed to considerable input because of my presence on the committee that is presenting this report and, prior to that time, having spent about two years as the Labour critic for our party and having been involved with the workers in my community, I hope in the few minutes I have to speak this evening that I can present a fairly objective view of what is happening and what should be happening to the workers in Ontario, if not in our country.
If I may, I want to begin with my own community of London. The statement has been made many times, "You are very fortunate, very lucky, to be in that rich, wealthy community of London, Ontario, with all the millionaire insurance people," et cetera. Let me tell you, Mr. Speaker, our community of more than 250,000 people contains a very large number of folks who are average, blue-collar, working class people.
We have a significant number of industrially oriented folks who are there day by day working in plants such as General Motors, Kelloggs and Northern Electric. I could go on and recite a long list of industrial workers in our community who help make the fibre of our community just as they do in many other communities across Ontario.
When they do not know a lot about London, people say, "You are lucky, because you do not have a lot of plant layoffs" et cetera. In fact, we have experienced plant layoffs and closures in London. We have seen the effects of people being summarily thrown out of their jobs or being given notice at the last minute that they will no longer be working at such places as Commando Chrome, which is an automotive-related industry in our community. They said: "Sorry, the job is finished. Here you are. Find work elsewhere."
This concern has come to practically every member in this House. What I say on behalf of my party as an opening statement is simply this: We see the problem day by day.
We also have to be critical of the government of Ontario, a government that has been in power since 1943. Although the government did agree to establish the select committee on plant shutdowns and employee adjustment last October, it did so only after the House reopened and we had to cajole, prod, do whatever we could to get the government to establish this committee.
When the House reopened in the fall of 1980, the government did not say a single word until we prodded it to get this committee going. We wanted to do this because we were more and more aware of and convinced of the severity of the problem across Ontario.
8:20 p.m.
Aside from that, by way of opening comment, the government has to take a moment to look at itself and say: "Why did we as a government not look at the problems facing the working man in Ontario prior to this time? Why did we not do something earlier?" The simple answer to that is that the general attitude of the government is: "React to problems. Don't plan for the future."
This province has been blessed, or cursed, by a government that has done nothing more or less than accommodate itself to the day-to-day problems we have in Ontario. It has done nothing to address itself to planning for the future. If it had, it would not have waited until the fall of 1980 to look at what we have addressed ourselves to in this committee. It would have acted back as early as 1973, 1974 or 1975, if not earlier, when there was evidence coming to us in Ontario and in North America that we would have significant problems with our industrial communities.
Economists told us that would happen. I have heard people say, "Economists are nothing more or less than educated guessers." One could say the same thing about a lot of professional people in the world. One could say it about neurologists or brain surgeons, for heaven's sake.
The point is that there were all kinds of signs on the horizon a decade ago, telling all of us in North America that we had significant industrial problems. Some of the problems came from our apparent willingness to be dictated to and directed by forces outside of North America, the European and the East Asian markets. These things are coming home to rest where we do not want them to rest, in the pocketbooks of the people of Ontario, in terms of what they are paying for energy et cetera.
I realize I am getting a shade off the theme, but I want to give this background for the simple reason that I am suggesting the government in Ontario could have been addressing itself to the problems now facing the workers in Ontario years ago. It did not address itself to themes such as severance pay, adequate notice of layoff or the need for laid-off employees to be trained and adjusted into other areas. It did not address itself to those basic themes until we prodded it in the fall of 1980 to establish this committee.
One final piece of evidence: Not only our party -- and I must give the third party its due --
Mr. Epp: Not too much.
Mr. Van Horne: Not too much, but just enough to keep their attention.
We suggested, from both sides, that provisions should be made to accommodate people such as I have been describing for the last few minutes, who find themselves summarily dismissed from their jobs.
Let me give an example. In 1980, I had the pleasure to present to this assembly a private member's bill entitled Bill 154, An Act to amend the Employment Standards Act. The purpose of this bill was to amend that act to provide additional protection to employees who were laid off or whose employment was terminated.
The bill extended the period of time for giving notice to an employee of a layoff or termination of employment. The bill required an employer to provide assistance to the Minister of Labour, trade unions and employees in any action or program designed to re-establish employees in other employment.
The bill also required an employer to pay severance pay, which is the subject of a bill that came into this Legislature this afternoon. Here we are in 1981 and the government is finally reacting a year after the fact.
We have been suggesting these things for a long period of time. I do not want to overwhelm my colleagues on the left but, to give them due credit, both parties have been suggesting this kind of legislation for a long period of time.
Finally, we are getting to it. Finally, we are spending a few minutes, or a couple of hours at the most, talking about legislation. Really, we are not even talking about legislation. I have to be quite candid with my colleagues opposite who are newly elected and to the people in the gallery who may not be familiar with this.
What we are doing is spending a token couple of hours reviewing a report that was almost ready to be brought into the House at the point the 1981 election was called here in Ontario. We almost had it together. We had been given a mandate in October. We had worked like mad between October and January. We almost had this report together, and we were cut off by a government that said, "We will give these guys a token acknowledgement but we will not let them bring in their report."
I say this in all deference to my colleague and friend the member for Armourdale (Mr. McCaffrey), who was the chairman of this committee and who is now a Minister without Portfolio. I am sure he will be elevated within the near future to an important post here. He was a good chairman. He is one of the few members opposite who had some idea what we were trying to get at.
But what happened? We were cut off at the pass by a devious group of bandits with blue suits who said: "There shall be an election. They shall not have the opportunity to bring this report in."
Hon. Mr. Elgie: Tell us about how we destroyed the grievance. Tell us about that.
The Deputy Speaker: Continue with the debate.
Mr. Van Horne: The comments I made to the chairman of this committee were made in all sincerity because he and, by and large, the various members of that committee attempted to address themselves to the concerns we had laid out as our terms of reference.
We had to look at the need for portability of pensions. We had to address ourselves to the need for adequate notice for layoff, to the need for severance pay and to two other themes, the employee adjustment theme and the theme of companies baring their souls if they wanted to close. They would have had to address themselves to a public forum to justify why they would want to close.
The Deputy Speaker: Foreign corporations, Mr. Van Horne?
Mr. Van Horne: Foreign corporations, Mr. Speaker, gets us into another theme because, if you want me to spend a moment or two on this, we in Ontario have found ourselves to be directed by and basically controlled by foreign interests that have made us nothing more or less than pawns of those folks who are corporate giants in the world. We find ourselves a community that does not have the ability to direct its own concerns and its own efforts. We find ourselves, in a sense, a branch plant community.
I want to direct a few comments to the report of the committee as it relates to what it should be. I say this again in deference to the government's agreeing to this committee being established. I want to suggest that in our view we, as a political community, as an opposition party, addressed ourselves to this theme many years ago.
8:30 p.m.
Back in the early 1970s, and when we really came to grips with it in the mid-1970s, we determined that this should be pursued. We did pursue it and we came up with an industrial strategy for Ontario -- and I have it here with me -- which is a very broad, sweeping paper that addressed itself to the need for Ontario to bring itself out of the doldrums. When I say itself, I mean the workers who make up the fibre of this community. In April 1979, our party accepted this report.
In this report we have addressed ourselves to the needs of the industrial community in Ontario, and let me tell the members that we have answers in here not only to the immediate problems of Ontario but also to the future of Ontario. We have suggestions here for such things as energy policies for the future, apprenticeship policies for the future and research and development policies for the future which would resolve Ontario's problems right now.
I have to tell members that this document is so significant that most of the civil servants in the Ministry of Labour have this filed somewhere in their main desk; it is not salted away somewhere in the boondocks. If the Deputy Minister of Labour had the foresight to come up with this, either he would have been beatified by now or the minister would have had him bronzed and put on the front lawn, because this document has more positive suggestions for improving the industrial lot of the workers in Ontario than he or his predecessors have ever thought of.
This is an excellent document, and I am looking forward to the minister coming back to his chair and saying to me an hour from now, or whenever he chooses to come back, that he has a better alternative than we have. If he says to us that he or his colleagues have something better, I want to hear it because so far they have not said a word. They have not done anything but parrot the things we have put our minds to in this particular document.
Mr. Foulds: What is that industrial strategy?
Mr. Van Horne: Mr. Speaker, I am going to leave some time for my colleagues who want to address themselves to the specifics.
I am not equating myself with the minister; that would be too presumptuous and over-gratuitous to one who has the advanced years, which I do not have. I simply want to speak in general terms on behalf of my party.
I submit to my colleagues on my left who threw out a word or two just a moment ago -- and I refer to our official opposition industrial strategy -- that our efforts as the Liberal Party in Ontario have been recognized by the voters in Ontario.
Hon. Mr. Elgie: Not very well, but never mind.
Mr. Van Horne: I want to tell my friend the member for Oshawa that I have been looking through this Ontario labour magazine, which was put on my desk just a day or two ago. Cliff Pilkey and the Ontario Federation of Labour have a lot to do with this. They make a little statement as they do their obituary for those members who were with the third party in the last parliament but who are long gone. They have little crosses on the front lawn for each of them, for my friends Bud Germa and Mac Makarchuck -- there are a whole lot of them. They have pictures of three of them.
What this little document acknowledges is this: "It seemed for a time in the 1970s that the party" -- the New Democratic Party -- "was building to power on a coalition of organized workers and ethnic voters." Here is the significant part: "The 1981 results show" -- and I hate to give the Minister of Labour equal time but I will, given his advanced years -- "both the Conservatives and Liberals have made major inroads into these blocks of support."
We are doing this because we know the problems of the working men and working women in Ontario. We are working to help them. We have put our minds and hearts to the efforts of this committee and we are not going to quit until the working man and working woman here in Ontario are properly recognized.
Mr. Cassidy: Mr. Speaker, at times I think the government is working to advance the interests of the chamber of commerce, with the Liberal Party not very far behind.
It is a pleasure to comment on this particular report. I hope the minister does not go very far, because I hope very much that after listening to this debate he will be prepared to make some announcements we have yet to hear from the government with respect to the continuation of the select committee on plant shutdowns and employee adjustment in order to allow it to complete its work, and also with respect to major changes in the legislation on severance pay that was presented today.
I want to begin by commending the members of the select committee, from all parties: one, because they worked hard; two, because they worked well; three, because they worked quickly, and four, in commiseration, because before they could complete their tasks they were cut off at the pass by a government that was more interested in exploiting what it calls the realities of March 19 than in either keeping its promises or allowing a committee that had done a good job and heard a great deal of very relevant evidence about the situation of workers and communities affected by shutdowns to complete its work.
The draft report we have before us for consideration this evening is just that: it is a draft. As the then chairman says in his introduction, "This is not an official committee report, and the texts and recommendations contained in it only represent proposals which were never formally debated or adopted by the committee."
There is absolutely no reason, between the time this House resumed in early April and today, the government could not have called together the committee and allowed it at least to have considered the draft report and to have made its recommendations in a number of areas where options were laid out by the staff, as is their job, but where the ultimate resolution was left to the committee.
The fact is that major issues which affect laid-off workers, which affect plants where shutdowns are planned or are imminent and which affect communities where shutdowns have occurred or are likely to occur were addressed in the draft report but have not been resolved because the committee has been cut off in mid-flight, and that is wrong.
While I commend the committee for its report, and in particular for the way in which members of all parties clung to their belief that at the very least we should be prepared to provide a week of severance pay for every year of service to workers who are laid off, it is a great deal more difficult to commend the minister or the government for the way they have behaved.
The longer I have had a chance to look at the legislation that was presented in the House today and the statement that was provided by the Minister of Labour, the more shocking and arrogant and irresponsible I find that particular declaration by the minister. The minister will be aware that when the committee made a recommendation in December they said quite explicitly that they believed one week of severance pay should be provided for every year of service to every worker who loses his or her job because of a layoff.
In the draft report a number of options with respect to severance pay are put forward. In all cases they relate to all workers who lose their jobs because of layoffs. At no time did the committee consider that there might be a qualification saying that only those workers who were affected by what is known as a permanent layoff or a permanent partial closure would qualify for severance pay. That word "permanent" is a weasel word that has been injected into this bill and injected into this discussion by the Minister of Labour, by the cabinet, by the civil service and, I regret to say, by the friends of the government in areas like Bay Street and the chamber of commerce in an effort to stop the government from keeping the promise the minister made last December.
Last December the minister committed himself and the government to the principle of severance pay, and he said it would be retroactive to the first of the new year. We, in good faith, were prepared to accept that. I am afraid that on the evidence we have had today, neither the minister nor the government was acting in good faith.
I will cite some figures to show specifically what I mean. The minister admitted today in discussions with the press that of those workers in firms where the severance pay provisions would apply, only about half would have five years' service and would, therefore, benefit. He estimated that in the first three months of 1981, for which there are now figures, some 600 workers would actually receive severance pay under the proposals.
8:40 p.m.
Hon. Mr. Elgie: Because most of them are getting it already.
Mr. Cassidy: Don't get so shirty. Only about 600 workers would actually get the benefit. The government's own figures indicate that in the first three months of this year there have been -- I have the figures here -- about 6,603 workers laid off where layoffs have been announced in 23 closures. Of that total, however, there are at best 1,900, as near we can estimate, where there are permanent shutdowns, who seem to fall into the definition the minister has talked about -- some over a period of months, some at once. The minister says 600 workers will actually benefit. That would be something like a third of the workers in the plants where permanent shutdowns are taking place, rather than the half he also suggested. Six hundred workers out of 6,600 workers laid off in the first three months means less than 10 per cent will benefit. That is not keeping the promise in my language and it is not keeping the promise in a way that anybody outside would understand.
We checked as regards 1980, when just over 30,000 were laid off, according the Ministry of Labour statistics. Of those 30,000 workers, we estimate that approximately 9,208 were in companies where they would have a possibility of qualifying, because the closure taking place is either a permanent closure or a permanent partial closure; immediately, 21,000 workers are excluded. On top of that, the minister indicates that half the workers in qualifying firms -- in work situations that qualify -- would not qualify because they have not had five years' service. So that 30 per cent comes down to 15 per cent. One worker in six in 1980 who was hit by a layoff or a shutdown would have benefited in some way from the proposal the Minister of Labour is putting forward. I find it hard to believe that can be called "Keeping the promise." In fact, it is breaking the promise and the promise is being broken by a government that knows better and a government which, in its own civil service, has been prepared to grant much more liberal provisions.
I have here a copy of the collective agreement between the Ontario Public Service Employees Union and the crown with respect to employees in the public service. This is the 1980 contract, and it makes it very clear that workers in the public service of Ontario are to get one week of severance pay for every year of service if they are laid off. Prior to 1978 the figures change a little bit, but the essence of the principle is a week of severance pay for every year of service.
There is no restriction that it must be a permanent shutdown or closure. There is no restriction like that. If workers are laid off and they are not going to get their jobs back, if there is an indefinite layoff or permanent layoff, then they qualify for severance pay if they work for the government of Ontario. But if they work in the private sector, then they must be sure there were 50 employees in their company; they must be sure they have five years' service; and they must be sure they are under what is called a permanent layoff rather than a reduction of operations.
I had a look at some situations in the first three months of this year. Budd Canada in Kitchener, which had 900 employees, laid off 90 in February 1981. It was a reduction of operations, so they did not qualify under the minister's bill. Canadian Fabricated Products in Stratford is laying off 50 of its work force in January. It is a reduction of operations, so they do not qualify. Canadian Pittsburg in Owen Sound is reducing operations by 69 workers, of whom 20 will go in January 1981. They do not qualify because it is a reduction of operations. Daal Specialties of Canada in Collingwood is laying off 95 workers with 75 having gone in January 1981, but they do not qualify because it is a reduction of operations.
Dominion Chain Limited in Stratford is letting 55 workers go. That is more than 50. However, they do not qualify because it is a reduction of operations. Up in Maitland in the Cornwall area, Dupont is laying off 130 workers in January 1981, but it is a reduction of operations so they do not get any benefit under the severance pay plan.
International Harvester laid off 240 workers with 175 workers going in January 1981, but that was a reduction of operations down in Chatham, so they don't qualify. Kelsey-Hayes was laying off 194 in Windsor. That was a reduction of operations announced in January, so they don't qualify. McDonnell Douglas was laying off 229 in January on top of a series of layoffs of 100 and 200 that occurred over the course of the fall. That was to take place in January and was a reduction of operations, so there was no severance pay to those workers despite the fact they may never get their jobs back; despite the fact that they are simply out on the street looking for a new job.
In the case of Robin Hood Multifoods in Trenton they are laying off 62 workers in January out of a work force of 241. It is a reduction of operations so they do not qualify.
That is the situation in company after company, in plant after plant. Some 21,000 employees last year would not have had a chance of qualifying for severance pay, despite the fact they were out on the streets irrevocably as though their company had closed its doors for good.
If International Nickel decides to reduce its operations because of a shortfall of nickel demand, say, or because of a decision to transfer some of its mining to Thompson, Manitoba -- if it decides to lay off 3,000 workers on an indefinite basis in Sudbury -- not one will qualify for severance pay unless they happen to have it in their collective agreement. They will not get it under the proposals the minister has brought in in contravention of the report of the select committee.
If GM decides to eliminate the second shift at the south plant in Oshawa I am afraid those workers will not benefit because it is not a permanent partial closure; it is a reduction of operations. The company is transferring operations somewhere else; however, there will be no severance pay provided.
I can give example after example. The fact is that this proposal which is meant to be implementing the recommendations of the select committee is nothing more than a farce. I do not know how the minister can say he is the Minister of Labour when he has brought forward this bill. He is hitting the members of the chamber of commerce over the head with a bowl full of limp spaghetti, then asking us to congratulate him for what he calls pioneering legislation. I say he is pioneering in going backwards; he is pioneering in finding reasons why most of the workers in this province should not be protected. We in the NDP say it is about time that workers should be acknowledged as having a stake in the companies for which they work. If the company shuts down or if there are layoffs those workers should be compensated with severance pay for the investment they have put into the corporation. That should be the law of Ontario.
I had a chance to sit in on some of the meetings of the select committee. I was there when the people from Essex International told us how they were too busy to even set up a manpower adjustment committee. I was there and heard about some of the problems in Atikokan, where the company was not prepared to look at what might be done and where this government was not prepared to use any muscle to get those jobs preserved and to ensure that the mining activities in the community went on.
The fact is, as the draft report indicates, there were many other problems which relate to plant shutdowns besides the issue of severance pay. Those problems should be resolved now by a continuation of the committee rather than by this government's effort to put the whole matter on the shelf with a one-day debate on the evening of Thursday, June 4, 1981.
I cite something that is mentioned in the draft report which at times is worthy of a report from the Waffle group of the NDP: The structural weaknesses of our economy; the fact that we have branch plants in a foreign-owned economy where foreign-owned multinational corporations call the shots and we in Canada are powerless to fight back; the fact that the auto pact has created grave difficulties for Canadian auto workers and auto parts companies, not because of the shortfall of demand in our country but because the industry is so dependent on the fluctuations of demand in the United States; the fact that we have a large number of mature industries and of declining industries. While the investors are protected with handouts like the employment development fund's grants to the pulp and paper industry, the workers are told, "If a reduction of operations is taking place, you are not going to benefit in any way."
8:50 p.m.
We have the problem in Canada of lower tariffs which permit a great deal of imports and the problem of tariff and nontariff barriers which prevent Canadian manufacturers from breaking into other markets and preserving jobs here.
The committee was asked to consider recommendations for more adequate disclosure of the operations of foreign subsidiaries to put them on the same footing as public companies here, something we would support. It was asked to consider recommendations for justification and recommendations for a study of the cost of shutdowns. That should go forward and not be put on the shelf.
The committee was asked to consider -- and I hope the majority of the committee would have been prepared to agree -- that where there was a viable operation in Canada, for example, a division of a multinational corporation which was retrenching but whose operation in Ontario was viable, rather than watch that operation, those jobs and that technology go down the spout, the government of Ontario and the Ontario Development Corporation be prepared to step in and work with the community, the workers, maybe the management and some interested investors, to keep that division viable and operating, thereby saving those jobs.
I would like to know whether the Conservative members of the committee would have been prepared to continue to endorse that principle, which I think is a valuable one, as they would have had the chance to do if the committee were being continued. It seems to me those were questions on which we would have benefited from the advice of the committee, and I think it is tragic the committee is now being shut down rather than having its work continue.
The committee did not have firm conclusions in the draft report over how much advance notice should be given in the case of shutdowns. That issue has to be joined. Clearly, eight weeks of notice is not enough when one is putting people's livelihood on the line. In our opinion, where layoffs of over 50 workers are involved, six months' notice should be required.
It works in Europe. We even heard of cases where multinational corporations shut down their operations in Ontario because they found the notice provisions and other provisions to protect the workers in France or other Common Market countries were so much tougher they preferred to save the jobs in Europe and let the jobs in Ontario go down the drain. Our workers in Ontario deserve protection at least equal to workers in the Common Market or other parts of the world where they have more progressive legislation.
The question of social impact of shutdowns will be addressed by my colleagues the member for Windsor-Riverside (Mr. Cooke) and the member for Oshawa (Mr. Breaugh). In the case of that social impact, the cost to the community surely has to be considered and not just the balance sheet, which is all the people from management who came before the select committee seemed to be prepared to look at.
That is not going to occur until there is a requirement of justification, until companies have to open their books, until they have to show why it is they are shutting down and until communities are given a chance during the process of justification to show that maybe there is another way the jobs can be kept.
We believe it was time for the government to consider and enact the creation of a community adjustment fund which would be funded on the one side by the people of the province and on the other side by companies which were contemplating shutdowns or had shut down their operations.
When the Marmora mine closes down, when the Steep Rock mine in Atikokan closes with the loss of a third of the work force of the community, when the Moose Mountain mine closes, the major employer in Capreol, when Outboard Marine shuts down 1,500 jobs in Peterborough over the course of eight or 10 years, surely the community is entitled to some compensation for the investment the people of the community have put in, an investment which is every bit as costly as the investment the workers have put in or the investment the shareholders have put in? Often, the investors have not put a nickel into the Canadian operation. They started up a branch plant many years ago and it has been expanding and growing on the basis of Canadian bank loans and retained earnings. There was not a nickel of investment in some of those cases.
The investments by Peterborough, Atikokan, Capreol, by the town council in Whitby where Houdaille was located, those investments are very real. The loss of jobs to the community, and the economic blow to the butchers, the bakers, the candlestick makers, the pizza deliverymen and all the other people who provide goods and services to the residents of the community working in that industry, can be very intense.
Surely it is about time that we insisted there be a community adjustment fund that is also a part of a network of legislation designed to protect communities and individuals, save companies and save jobs. I am very disappointed on how inadequate the response of the government has been in the legislation introduced today.
Hon. Mr. McCaffrey: I want to speak briefly tonight to this report for several reasons. Mr. Speaker, you will remember that the last time we had a chance to discuss the workings of our committee in a formal way was in mid-December on the occasion of the tabling of that interim report. For a variety of reasons, all of us were quite rushed that night.
As chairman of the committee at that time, I did not have the chance to do what I would like to do tonight and that is to pay those very proper and richly deserved courtesies to the members of the staff of the committee who helped us so much in our work. In particular, I mean Mr. Graham White, who could not be here this evening; Mr. John Eichmanis, research officer, who was up in the Speaker's gallery earlier; and Mr. Rick Jennings, the research officer, as he is described in the report. Rick Jennings is one of the senior researchers in the Legislative Library here. He did an outstanding job, supported ably throughout by both Graham and John. I know all members of the committee are deeply appreciative of his work.
Rick Jennings assisted us in our many months of work and carried on after we left. This draft report is in part a testament to that. I would say, particularly to the new members, that it is a reflection of the first-class work that is being done by the research people in the library. Our experience of using library personnel as full-time consultants in standing or select committees has been a brief but rewarding one for us and I hope for the staff.
I want to explain why we are tabling this kind of report, described on the Order Paper as a draft final report, sessional paper 57. We had other alternatives. One of them was to restructure that very committee into one with the same title, made up of new members in this new Parliament, to take a look at the questions we looked at last fall and in January 1981. If we had done that there would not be a draft final report available to members of the assembly and I think a lot would have been lost.
I do not think this evening's debate suffers because of the tenuous nature of this piece of paper. Rather, I think there is an opportunity for those who were not on the committee to look through it and, because it is a report without final vote, get a better sense of those things we discussed. There are some 24 recommendations, half a dozen dealing with the matter of pension vesting alone. I do not think that weakens the report. It reflects the concerns of those before the committee and the committee members. I think it is a more valuable document for that reason.
Nobody has been denied the opportunity in this debate to make his own particular points. The leader of the New Democratic Party has spent a considerable amount of time on the specific issue of severance. Opportunities to get into that matter again in detail will be available to all of us very shortly.
9 p.m.
I wanted to touch on some of the circumstances leading up to this draft report, circumstances that most obviously started with those shutdowns we were all familiar with through the spring, summer and early fall of 1980, and the concerns about the weakness of the auto industry, a North American phenomenon. There were very real fears in the community at large that the spectre of continuing shutdowns was going to continue and maybe even accelerate. There were concerns about job creation, reflected by virtually everybody in this assembly in the former Parliament, and reflected in the determination of the government to encourage existing firms in this jurisdiction to expand through grants -- something we have talked about before -- and in attempts through the Ministry of Industry and Tourism in particular to get new firms and manufacturing concerns to locate in this jurisdiction. Those were some of the circumstances when we, as a select committee named by this assembly, sat down to begin our work in late October.
I also want to talk briefly about the politics in this place at that time. I think it would be naive and impossible to look at this piece of paper and take part in this discussion without reflecting back on what was actually happening in the latter part of 1980 and in January 1981. We were rapidly approaching an election -- there is no question about that. In a variety of ways, particularly because we went to the Thursday just before the issuance of the writ, we knew, or increasingly the feeling was, that we were literally days away from the writ --
Mr. Mancini: We did not know that. The government sprang it on us.
Hon. Mr. McCaffrey: But there was a sense developing the Thursday when we left here, when we were originally scheduled to come back Tuesday, Wednesday and Thursday of the next week, a goodly number of the committee thought we might not actually get to the final vote and, therefore, to a final report of that committee.
The politics in late 1980 and early 1981, in my judgement, led us as a committee, led the media for certain and led others who were watching our deliberations to see in the issue of severance pay something more than the issue meant at that time. Severance pay became the handle, I believe, the grossly oversimplified handle, to show whether one was sympathetic or unsympathetic to workers who were losing their jobs. I think it distorted a lot of the work being done by the committee. If anybody had wanted to take the time to read the transcripts of the deliberations over those four months, I think he would have seen that. In fact, not very much time -- the member for Essex South would remember this better than I -- was spent on the issue of severance pay per se.
Let me touch on just a couple of the issues over which we deliberated. I would ask the member for Essex South to interrupt or correct me if I am wrong. The members of the committee learned from witnesses and from one another a great deal about some of the broader North American manufacturing and employment problems, the problems related to a maturing economy. We learned an awful lot about the impact that exchange rates can have on manufacturing concerns. In some instances -- I think of our Canadian resource firms -- there has been a short-term benefit and a real major benefit from exchange rates.
We learned about the impact of tariffs. We had experts make testimony on that. There was a lot of discussion about foreign ownership, a lot of discussion about investment in the domestic sense of the word. We had great deliberations about the expression "jurisdiction shopping," where firms in Canada and the northeastern states look around for other states or provinces where they can get the most attractive low tax rate or the most attractive tax deal before they locate. We sensed very much the competition in North America to face this same problem.
A lot came before the committee under the broad heading of corporate responsibility. What is a corporation's responsibility to a community? Is a corporation's responsibility as it was some time ago only to the bottom line, as they say?
We learned about people's pension expectations, their pension disappointments and their fears about the whole question of pensions, both private and public; so severance pay was one of a number of very important and complex issues before the committee. Notwithstanding that, we began to be perceived as a group of people who were lining up to be either pro or con severance pay, and it was seen to be then either pro or con the laid-off worker. I think that was never the case before the committee.
Just briefly, if I may, I want to say that for my part I learned one major lesson. It was that those who will search for an easy villain in this period of closures are going to be disappointed. I learned that playing the anticorporate politics game is too tempting for some, but it is wrong.
The anticorporate political game, which I suspect people in here can play at all-candidates meetings with real skill, starts normally with an antiforeign bias. One speaks against foreign-controlled multinationals; it has a nice ring about it. In the wake of that attack, sometimes innocently, we attack therefore the Canadian-controlled multinational. That kind of attack becomes a threat to corporations per se. Those who pretend they would slam only the big corporations inevitably make the mistake, through rhetoric, of setting a list of characteristics that make it impossible for the small business, which everybody politically seems to wish to champion; the small business gets caught up in the same thing.
Both in reason and in logic, an anticorporate game impacts those that people are really pretending oftentimes to wish to help. The fact is that there are a great many first-class, small Canadian firms. There are first-class Canadian multinationals whose roots can be traced back to small Canadian firms, but somewhere along the way they lose their political sex appeal if people choose not to support them. It is worse than that; they choose only to attack them.
I remember another committee, the select committee on health-care financing and costs, which sat in the early part of 1978 for some months. We had an opportunity as a committee to get right down to the nitty-gritty of recommending corporate income tax increases to pay for our health care if premiums had been abolished. But neither Mr. Warner, the former member for Scarborough-Ellesmere, nor the member for Hamilton East (Mr. Mackenzie) recommended an increase in corporate income tax rates. That is in the report of the select committee on health-care financing and costs.
If the member for Hamilton East were here, I think he would acknowledge the fact that, going into that committee, that was perhaps a temptation, maybe even a bias. But after we had worked together with people from Treasury and other ministries we saw the impact that an increase in corporate income tax can have at a time when we are trying to keep manufacturing firms here and encouraging them to expand, and when we are trying to attract new ones here.
On page 17 of sessional paper 57, reference is made to the tribunal. In chapter two, the costs of plant shutdowns, it says: "Plant shutdown decisions are made by corporate management based solely on the costs faced by the corporation. A requirement that shutdown decisions be justified before a public tribunal could ensure that social costs be considered."
That first sentence certainly reflects what the situation has been in the past: "Plant shutdown decisions are made by corporate management based solely on the costs faced by the corporation." I will even go so far as to say there are instances where that is still the case today.
What I wish to make clear is that this does not mean those decisions to close are easy. It does not mean, as some people are inclined to wish to believe, that a closure decision is made voluntarily. It does not mean that an owner or owners do not have a lot of their own blood, sweat, hopes and dreams tied up in that particular firm. It does not mean many corporate owners have not over the years, when we have had slow cycles, had to forgo rewards in the form of profits and during those periods have often chosen to protect their own workers first. There are thousands of instances of that.
9:10 p.m.
A public tribunal, if one follows that argument very far, would be concerned with looking at the books of the corporation and ultimately having to make the decision about what constitutes an adequate rate of return. I do not think there is any denying that. We can investigate the corporation. We can investigate the impact, if it closed, on any given community. But ultimately the real question such a tribunal is going to have to answer is at what point a corporation must continue to stay in business and, in my judgement, the owner or owners, if not the only people to make that decision, are best qualified to do so.
Today's corporations, in spite of a lot of the comments the leader of the New Democratic Party made earlier tonight, do not operate in isolation from the rest of the community. At the very worst, corporations -- even bad ones -- pay taxes as a minimum condition of doing business. They pay taxes at three levels of government. Those taxes are used to subsidize those important cushions, those important programs. All one has to do is go through the latest budget of this government, or any government budget, and seek out the corporate taxes paid to see how many social programs would have to be cut without them.
Closures are not going to stop. It is inevitable, in my view, that if we carry on under the safe heading "Industrial Strategy" -- think a little bit about what that means -- and modernize some of the old plants, it will mean there will likely be more closures in the future. What is essential, in my view, is that we collectively try to change our attitudes to the three major players in this equation -- which is the government's clear goal and the government's record, by the way -- the corporation, the owner and the workers.
If we are going to continue to apply yesterday's rhetoric to tomorrow's problems, I am convinced we are guaranteeing failure by doing that. We are faced with a maturing economy in North America and with a real need to encourage our own manufacturing concerns to expand, doing what we can, within the legal framework and tools available to us, to encourage new investment here.
All of that goes without saying, but we are not going to do it if we approach issues like severance pay with an anticorporate bias. This is another tool with which one chooses to punish the business community. We are guaranteeing failure.
Mr. Foulds: So we are going to punish the workers instead.
Hon. Mr. McCaffrey: No, we are not. I do not think the rhetoric from any particular group in the 1960s and 1970s is going to work in the 1980s and 1990s.
Mr. Foulds: Who suffers the most in a plant shutdown?
Hon. Mr. McCaffrey: In a plant shutdown -- and the member can measure this -- a community suffers a great deal.
Mr. Foulds: Who suffers the most? The workers who lose their jobs.
Hon. Mr. McCaffrey: Probably the workers do suffer the most. But I think we have in place already a good number of important programs to minimize that hurt -- cushions, if I can call them that. One was introduced today -- it is a new one -- and there will clearly be more.
But one can also take a look at countless communities within our own jurisdiction that have benefited tremendously by the contributions not only through taxes but also in a variety of other ways, of one or another corporation in that area.
At some point, the New Democratic Party is going to have to find one corporation that it is prepared to stand up and say is a good one. Until they can do that and prove it is not just a multinational or not just a big corporation, and until they can establish that it is not an anticorporate bias that permeates virtually every approach to the things this government has done and is going to continue to do, none of us is going to make any progress.
Mr. Mancini: Mr. Speaker, I wish to take this opportunity to make some comments on the draft final report of the work undertaken by the select committee on plant shutdowns and employee adjustment.
I must say at the very beginning of my comments that at this time we should not be debating the draft final report but we should be debating the final report of the committee. We realize there was an election called by the Conservatives because polls told them the time was favourable. We realize there was an interruption. However, some considerable weeks have passed since the March 19 election and, at the rate the select committee was working, I believe we would have had a fair opportunity to have the report completed.
I can recall very well last year we went through the two emergency debates that precipitated the formation of the select committee. I can recall very well many of the comments made by the Minister of Labour. I thought at that time he was genuinely concerned about plant closings, about employees who had permanently been terminated from their jobs and about the communities both small and large that had been devastated economically. I do not believe I can continue to believe that at the present time, because neither he nor any other member of the Conservative cabinet has raised a single voice to reconstitute that particular committee.
Why is it that a committee that is investigating what happens to workers who have been terminated from their work is not important enough to be reconstituted? Why was it important enough last October to have the select committee formed? Why was it important enough that we were told in our mandate to report to the Legislature as soon as possible? Why was it that we were told we had to have a draft report in before Christmas?
Why were we told that we had to commence our work immediately in the new year because these plant closings were all emergencies and we had to find out what was happening to the workers and we had to get this information to the Minister of Labour so that he could assess all this and take action as far as legislation was concerned?
This was nothing but shallow, hollow, political rhetoric. It was just a leadup to the call of the election on February 3. It was nothing more than cynical Conservative politics. That is what we have had: cynical Conservative politics.
This evening the Minister of Labour spent just about all of his time going over the legislation on severance pay he introduced this afternoon. Yes, that was one recommendation that was made by the select committee; but that was not the only thing the select committee dealt with. We dealt with the issue of justification, we dealt with the issue of pension and pension reform, and we dealt with the issues of social services and how they were affected when large layoffs occurred.
It seems as if the Minister of Labour has forgotten that all this was written in this draft report. It seems that the only important thing to him was to somehow get out of that famous promise he made to the House. That was the promise where he stood up in the Legislature and told us before the Christmas recess that we would have severance pay legislation and it would be retroactive to January.
9:20 p.m.
Basically, I believe the committee and the committee's work -- this draft final report and the debate this evening -- are much bigger than the severance pay question. The report went right to the heart of our economy: the type of economy we want and the structural changes we need in our economy. All those were dealt with in a cursory fashion in this report. Yet the Minister of Labour chose to ignore all those vital matters and instead chose to try to explain the legislation he introduced this afternoon, hoping he would have as little flak as possible.
Other speakers have pointed out the depth that was missing in that piece of legislation, and I do not want to dwell on that. I want to talk about the economy of Ontario in general, about what causes our plant shutdowns and about what needs to be done. I want to ask the Conservatives, now that they have 70 seats, if they are going to be able to muster the courage to tackle these structural problems, to ensure that Ontario workers have a future to look forward to as well as steady employment and, one hopes, a better way of life for themselves and their families.
In the early part of the committee's deliberations, we found out right away what was wrong with our economy. It is dominated to such a large extent by foreign multinational corporations that we in Ontario basically have no say in what is going on, on what is going to happen and over the future of our citizens. I say to the minister, that is wrong.
Mr. Cooke: Why do you not say that to the federal Liberals?
Mr. Mancini: When I make my political career, it will be for more than just criticizing Herb Gray, the federal Minister of Industry, Trade and Commerce. However, I want to get back to the draft report.
We found out immediately in our deliberations what the initial and biggest problem is. I want to take some time this evening to point out to the House the worst example the committee came across as far as plant shutdowns are concerned. I do not have to go far from my home area. I only have to travel from Amherstburg to Windsor to find that worst example of a plant closing with no care for the workers, with complete disregard for the community and, unbelievably, with no justification whatsoever for the closure. I refer to Bendix Automotive, which was in Windsor.
I see many of the new members are here this evening. I know they have not had a chance to read the Hansard reports of those committee hearings. I just want to read some of this back to them so they know why we feel such anger at some of these corporations that locked their doors and crossed the border as quickly as they could.
Mr. Earl C. Smith, president and general manager of Bendix Automotive, appeared before our committee. I asked him: "I would like to know how much equipment was in the plant at the time of closure. I would like to know the condition of that equipment."
Mr. Smith, perhaps sensing the point of the questions said, "There is no question that Bendix Automotive of Canada Limited in its Prince Road facility was facilitated as an ongoing business with the latest and best equipment available for the manufacture of the kind of products that were manufactured there with significant and meaningful investments made in the immediate year of the closing and prior years. In no way was it substandard or considered secondary in that sense to any other Bendix location. There was a substantial investment there."
I went on to further question Mr. Smith.
"Mr. Mancini: So we can safely say then that the plant itself was in very good condition and all the equipment necessary to carry out a proper business was A-1 as far as the company was concerned?"
"Mr. Smith: Absolutely. In my opinion it was an outstanding facility."
That is the plant they closed. As the questions continued, I asked Mr. Smith where he had moved the equipment that had been in the Windsor facility. I want the member for Oxford (Mr. Treleaven) to know. I asked Mr. Smith where the A-1 equipment was moved to. Incredibly, the answer was: "It is in a bonded warehouse in the United States."
This company, with its headquarters in the United States, gave its Canadian president less than three weeks' notice that the Canadian plant was to be closed. They ordered out that A-1, paid-for machinery -- paid for, I am sure, with high tax write-off, deferral or whatever you call what they get from the federal government where they can decrease their tax dollars; so we in Canada helped pay for that equipment. They moved that A-1 equipment to a bonded warehouse in the United States. At that time, they did not even know where the equipment was going. Can members imagine that?
Mr. Nixon: Unbelievable.
Mr. Mancini: It is unbelievable if the Conservative members can sit back and allow any corporation to come into our province, take advantage of all the opportunities we have here and then at the drop of a hat, with three weeks' notice from the United States to the Canadian president that the company was to be closed and his top-notch facility was no longer to be in operation, to have this equipment in a bonded warehouse, not even knowing where it was going.
I do not think that we here in Ontario, and communities such as Windsor, should have to face the severe financial repercussions of irresponsible and callous decisions such as were made by the Bendix Corporation. I do not think we should have to tolerate it without at least being able to seek a justifiable reason as to why the closure occurred.
The philosophy of the members opposite is one of bringing in any business, no matter what it is, because as long as the Premier (Mr. Davis) is cutting ribbons, things are good in Ontario. That is not true, because as the Premier and the Minister of Industry and Tourism (Mr. Grossman) are enticing this foreign capital to come in, they are not coming in because they like the Premier's silver hair; they are coming in to take advantage of the economic situation we have here in Ontario. They are coming in to take advantage of the stable and productive work force. They are coming in because they can remit their money out of the country at will.
They are not coming in because they think the Ontario Tories are a bunch of great guys. When they close their doors and leave our communities, they leave all the taxpayers holding the bag. So don't think the government is doing any of us a big favour by enticing all of these foreign corporations into our province.
9:30 p.m.
Some time ago the Minister of Industry and Tourism prepared this fact book, which came in this egg crate -- I do not know where it was assembled; I am afraid to guess. I want to quote this to the member for Oxford, because he has been in the Legislature for only eight weeks. I am sure he has not had a chance to read it, with all his other important duties. I want that member and all the other members to know what the Minister of Industry and Tourism is doing to entice business into our province and what he is telling business. It is going to take a couple of moments.
The Deputy Speaker: Mr. Mancini, I am just worried whether we are speaking to the report. But if there are no objections, I am sure members would like to --
Mr. Mancini: Mr. Speaker, with all respect, this has everything to do with the report. This report is on plant shutdowns. This fact book asks plants to come into Ontario. It has everything to do with this report.
The first section I would like to quote from is headed "Lower Labour Costs." It states: "In 1978, our average hourly pay for workers in industrial production was US$6.15 an hour, 37 cents an hour less than the US average, from 33 cents to $1.81 less than the rate in the Great Lakes states joining Ontario."
When the Minister of Labour and the Minister of Industry and Tourism say they cannot legislate more benefits for workers, because we would then put our production costs higher than those of our competitors, our own Minister of Industry and Tourism says that is not true.
Next page: "On a US basis, Ontario's manufacturing unit labour costs fell by 4.5 per cent in 1978, but they climbed 7.7 per cent in the US, 15.6 per cent to 20 per cent in France, Italy and West Germany, 25.1 per cent in Japan and 25.6 per cent in the UK."
It has this to say about research and development under the title "Incentives:" "Companies may write off 100 per cent of the current and capital expenditures on R and D in the year of the outlay another significant benefit."
We heard only a few days ago that we could not raise corporate taxes but we could sock it to everybody else. Under the heading of "Taxes:" "Corporate income tax as a percentage of book profits for manufacturing companies, 1978: Ontario, 31.9 per cent; Texas, 37.6 per cent; Ohio, 41.3 per cent; New York, 43.1 per cent."
Under the heading "Setting Up Business" there is a chart that states: "Study proves it is far quicker and cheaper to build in Ontario. In a detailed 1979 case study the British developer Slough Estates Limited compared factory construction costs in key foreign jurisdictions, including building costs, procedures and implementation periods. We find that in the United Kingdom it would take 97 weeks to construct this plant; in Australia 77 weeks; in Belgium 41 weeks; in the United States 38 weeks; in France 43 weeks; in Germany 51 weeks; in Ontario 27 weeks.
I believe there is more than enough evidence in the Ministry of Industry and Tourism's own document, The Fact Book, to dispel all the baloney we have been getting from the Tories. We have been getting it from the Minister of Labour and from the Minister of Industry and Tourism about the need to make Ontario a place suitable for investment, where investment dollars want to come.
It is also important to protect the workers in those industries. It is important to protect the communities where those industries are located and it is important to protect the Ontario taxpayers' dollars. Every time one of those closures occurs it cost us from thousands to millions of dollars in unemployment insurance, social services, loss of payroll, loss of property taxes, loss of business taxes and on and on.
The Conservative members may think it is great stuff when the Premier goes to cut the ribbon, but their responsibility does not stop there. Their responsibility should also entail the workers and the commitment these corporations have to our province and to our people. I think all workers should be treated the way the Tories treat the New Democrats. They come back with 21 seats and they are treated as if they had 30.
The Minister of Labour -- and I know he is listening intently -- helped constitute this select committee on plant shutdowns. He thought it was important enough to make a promise in the Legislature late in December, just before the election. If it was important enough then, it is surely just as important three or four months later. Let us reappoint the committee on plant shutdowns. Let us get a final report from the committee, not a draft final report. Let us really find out what happens to workers when they are thrown on the industrial scrap heap after these closures take place.
Mr. Breaugh: I want to make some comments about the matter before the House tonight because I think the process and the subject matter is something we should take note of.
This time last year, in my area, the realization dawned that something unusual was happening. People's lives were being affected adversely. By this time last year, about six major employers in our area had decided that their production facilities in the Durham region should close. They were in various states: some had already closed their doors and moved their equipment out; some had given notice; some had told their employees; some had not. There was a good deal of flux and flow in the area. It was beginning to get to the level where at this time last year in the Oshawa area we determined we had lost about 3,000 jobs in about a six-month period.
9:40 p.m.
In the course of providing these notices, one of the places that had posted its papers and fulfilled all the requirements Ontario at that time required for the closing of a plant was a place called Houdaille. In the course of the summer period at Houdaille, the people who worked there decided there was a need to say as sharply and as clearly as they could that it was not fair, not right, for a company like KKR to come into a community like Oshawa to make full use of all the federal and provincial incentives that were there for industrial redevelopment, in fact to re-equip a plant with about $10 million worth of new equipment, make money on the situation, and then decide as a corporate entity it would simply provide notice and close its doors.
The occupation of a plant last year in Oshawa got a good deal of media attention and focus. I do not believe any other member of this House was present during the course of that occupation, though I was. During the 14 days that the workers occupied the plant itself, in the middle of the afternoon and in the middle of the evening, one would find people who had spent their lives working in an industrial plant like Houdaille, not a very pleasant place by many people's standards, but reasonably well paid. The reason was that it had a good union with the ability to negotiate a decent wage and benefit package for its employees, and it did that.
These were people who live in my neighbourhood, across the street from me, around the corner, people who were friends, people who had worked for me in previous elections, people I met everywhere I went. Through the course of the occupation of the Houdaille plant a sinking feeling came to almost everyone I met. They did not understand what they had done wrong. In fact, they had done what everybody else said they ought to do: go to work; try to work hard; lead a good life; participate in a union and in the political process. Yet it seemed to many of them and to their families that the whole thing was relatively hopeless and that there was a need to take action on their own in a manner which I suppose most people on the opposite side, being very interested in this evening's debate and in having friendly little chats and gossiping with one another, really do not give a damn about.
Many of us in Oshawa had questions as to whether the occupation of a plant was really the proper technique to use. I must say it was rather an amazing experience when an entire community decided that the Houdaille workers, among all the other workers in the area who had been rather hard done by in the industrial complex in our area, were right. Never mind the laws of Ontario about occupying private property. Never mind that some might have seen that as illegal, though the Attorney General and Solicitor General (Mr. McMurtry) and everybody else who was a general around here did not bother the workers very much. There was general agreement that, in that instance as in some others, a bandit corporation had acted irresponsibly.
Out of that came an interesting set of discussions. Through the fall during the last Parliament there was a select committee dealing with this. We tried as best we could to provide to the select committee, as we had to previous legislative committees, some people to offer opinions and some evidence as to the effect of all these shutdowns and layoffs on a community like Oshawa. I invited the mayor to bring some members of his council before the select committee. I followed its proceedings, and General Motors came in and made their views known.
In general, we gathered the consensus that these shutdowns were an expensive proposition for the regional municipality of Durham, probably around $30 million this year, in various shapes and forms. Many of us who have friends and relatives who worked in these plants that went down in our area had to learn to live with the tragedy that is there. The municipality has the additional expense of trying to arrange some form of retraining or some relocation of these workers, many of whom are very difficult to place at that time in their lives.
Corporations responded in their various ways. Out of the 19,000 people who work at the General Motors facilities in Oshawa, I think about 100 of them are people who came out of these other plants in our area. They came out of Houdaille, Firestone, Pedlar Castings, Robson-Lang and some out of Chrysler.
The odd thing that remains is that we used the legislative committee, with supposedly all the powers of this Legislature. We used the staff we have around here. Those who worked with this committee were people I happen to know personally and have used in other circumstances. They are fine, intelligent, competent and sensitive people.
The upshot is the guy who lives across the road from me put in 20 years at Firestone and did what he was supposed to do. He has spent the last year wandering around in various retraining programs, sometimes able to get a bit of a job for a two or three week period. Every day of his life he now lives with a kind of inward shame not knowing what he did wrong, but he must have done something wrong because the job he had is not there any more. He and his family, and the community he lives in, paid a price for that and, frankly, no one seems to give a damn.
As I look around this evening, there are lots of pleasant little chats under way on the government side. There is a thing before this House tonight called sessional paper 57. I do not know what the hell that is. Let me tell you the guys out at Houdaille do not know what the hell it is either and they do not care. The guys at Firestone do not know and the families which were destroyed when Robson-Lang closed down do not know and do not care.
They do not know this debate is going on tonight. All that time, all that money, all those people have been wasted. What have we to show for it after all that exercise of parliamentary democracy, after all the expertise that was before the committee, after the mayor and members of council came down here and tried to explain the problems that would be generated? Just what the hell did happen?
What did the government do for the guy who used to have a job at Houdaille who is sitting tonight at his kitchen table, probably with a bottle of rye, trying to figure out how to put his life back together again. There are no answers. That is the sad thing. This House, with all its ability, with all its resources, has failed those human beings.
Many are personal friends of mine. They are people I have known for a long while. They do not deserve what happened to them. They do not deserve to have their personal lives ruined and to be considered some kind of social phenomenon that ought to be examined by sociologists, that ought to be written up by scholars, and that ought to wind up as some damnable document called sessional paper 57. They do not deserve that at all. They deserve an even break.
The responses and answers we want are not mysterious at all.
Last June about this time, when Firestone was a subject of some concern to the Legislature, we brought them in. They were guys out of the union, guys out of management. We brought them before the legislative committee. We put in front of the committee what it was like to lose one's livelihood. The same is true for management people as for the hourly-rated worker except, of course, there is a little buffering, a little sweetening and a little more potential to regroup, retrain and get one's life in order again.
But the upshot is the same for everybody when a plant closes down, whether it is the guys who work on the floor at Houdaille or the women who work in the office at Houdaille. It is not pleasant for either party.
We brought them here and we said: "Here it is. This is what it is like when a plant closes." Everybody nodded a little. There were a few unfortunate remarks made by some members about how they were almost ready to break into tears.
I congratulate the people we brought here for showing restraint. I think about it being my job that had gone out the window. If the response of the government of the day was, "That is too bad," and somebody made a wisecrack, I think they had every right in the world to hit him over the head with a chair, table or a wall, because they deserved a decent hearing.
For the most part last June and throughout the work of the select committee I think we revealed, and the decent hearing process helped, that there was a chance for people to come before a committee of this Legislature and tell their stories There was a chance to identify all the things which might have been done. We had identified those last June, I remind the House again.
Clearly, on the part of the government, there was some choosing of things it was prepared to do and other things it was not prepared to do. But it has been no secret for a long time that what a government can do is relatively limited and relatively simple, and that it requires an act of will on the part of the government to plan its economy, to intervene when its workers are being screwed by its own system, to require some justification for shutdowns, to provide for severance pay, to provide for portable pensions and to provide for retraining, and to do so in a way that means something to the human beings who are involved.
9:50 p.m.
At the end of it all it is not an academic exercise. To the people who lost their jobs at the plants that have shut down in my area this whole exercise tonight is useless. Worse yet, they will probably be expected to pay with their tax dollar, without any beneficial effect at all, for all the proceedings that have occurred.
As a matter of fact, at the end of this whole exercise so far -- I do not exclude the possibility that the minister might change his mind or change his ways, but I do not have a great deal of hope for it -- one piece of legislation is being proposed, which the minister introduced today and which, for all of these people, all the ones who identified the problem initially, will do not one damn bit of good. If anything, the legislation that came in today will be an insult to the people at Houdaille who paid the price and get nothing in return.
The work of the select committee may go down in history as something that was useful in an academic sense; but in the one simple, fundamental way that a Parliament might be useful to its citizens, and particularly to the people in my area and across the province who are the victims of plant shutdowns, this whole process has been a useless exercise. For them nothing of any consequence has occurred. Lip service has been paid. The government of the day has said that it cares; it has provided some evidence, some visible indication, that it will move in some small way to provide some legislative production. But for guys like Bill Rudyk that does not mean a damn thing.
This government has done nothing for Bill Rudyk. Rudyk did what society asked him to do: he went to work in a bumper plant for about 25 years. He has not been retrained; he does not stand a hell of a lot of chance of getting a new job or replacement. The same is true for literally hundreds of other people, thousands of other people in my area alone, who have paid the price in direct and personal terms -- as have their families and the rest of the people who live around them -- in our costs for policing, in the escalation of batterings that occur in the home, and in the escalation of incidents of alcoholism that occur in our community. That is a heavy price indeed to pay just for the basic proposition that a government should not intervene in the workings of the private sector.
This should be a sad occasion, because it is a recognition, whether the members want it to be or not, that this Parliament has failed its citizens. This Legislature was unable to deal with a problem that was surely identified very clearly. It has failed to deal with alternatives that were identified equally clearly. And it is an unfortunate situation for the human beings from one end of this province to the other who have been affected that the end result of all of these words, of all of this expectation and discussion, is a thing called sessional paper 57.
Mr. Williams: Mr. Speaker, I feel privileged to have an opportunity to participate in the debate this evening on the draft final report of the select committee on plant shutdowns and employee adjustment.
First and foremost I would like to recognize the fine work and effort that the chairman of the committee displayed throughout the deliberations and hearings of the committee. I think the member for Armourdale (Mr. McCaffrey) was exemplary in the manner in which he conducted himself in a very difficult situation. On occasions when tempers were high and the rhetoric was coming hot and heavy he seemed to be able to maintain a firm hand and control on the committee, to ensure that everyone had an opportunity to be heard and to ensure that the business of the committee was carried out in a responsible manner. I compliment the chairman for the way in which he handled himself and the way in which the committee as a whole responded to his leadership as chairman.
I would like to go back to the beginning when the committee got into action and the way in which it set itself up. I think it gives us some indication as to the reason for the way in which things unfolded as the hearings proceeded.
I think it was incumbent upon the committee to acquaint itself with what the existing laws were within our own province and what government policy was with regard to pertinent legislation. This applied to legislation whether it was in the jurisdiction of the Ministry of Labour or the Ministry of Industry and Tourism or within the Ministry of Consumer and Commercial Relations. All of these ministries have legislation that has a direct bearing on the activities in the labour market and in industry and commerce in general.
I think perhaps one of the most informative days we spent in the hearings was the first one when we had an opportunity to hear representations from officials of the Ministry of Labour. At that time they had an opportunity to present to the committee an outline of the legislation that has been enacted in this province over the years. I think a lot of the members, in receiving a summary of this legislation and policy that has been developed over the years, could not help but be impressed by the fact that Ontario has some of the most enlightened labour legislation to be found anywhere in the world.
I think this is something that was overlooked. The extent of the legislation I guess really is one of the reasons why this government has been in power for all these years. We have been able to meet the needs of a changing society and the needs of an industrial province and the needs of the working people. This was clearly reflected in this report that was put forward in the opening hours of the committee's hearings.
While some members of the committee were inclined to turn a deaf ear to some of the positive things that were happening and that had been accomplished by this government on behalf of the working people in this province, the evidence was clearly there. I think the ministry is to be commended for the detail in which it was able to make its presentation to the committee on such relatively short notice.
It certainly set the stage for the work of the committee. In looking back I was impressed with the overall activities of the committee -- the overall balance of presentations from labour, from management and from government. As the chairman of the committee said in his remarks earlier this evening, in order to have a balanced perspective on what the committee was all about one had to recognize throughout the hearings it was really a three-party involvement. It was not just a question of what management was doing with regard to plant shutdowns. It was not just a question of what was the role of government in expressing an interest and concern in this matter. It also involved labour and those who represent the working people in the labour unions.
10 p.m.
Overall, I was impressed and felt that all three sectors performed well before the committee. I was impressed by their frank and open presentations to the committee that were most helpful to the members and enabled them to understand the complexities of the problems that confronted the economy of Ontario at the time in certain specific sectors of our industrial society.
There were the odd exceptions where representations were made to the committee that seemed to be extreme and somewhat radical and perhaps a little less than objective, but I think by and large all of the presentations were made with conviction and with sincerity; save and except one or two exceptions where one or two unions presented rather militant and provocative briefs to the committee that one would almost think had been scripted by the research writers for the New Democratic Party. Over and above that -- those one or two exceptions -- I think the presentations were thoughtful, informative and helpful to the committee.
The chairman mentioned earlier in his remarks, and I think it bears repetition, the fact that all of us were somewhat surprised by the complexity of the problem. The question of jurisdiction shopping and the term global mandating are new terms and clichés which we had not even known existed on some occasions. Yet these are all very relevant terms that were components in the overall complex picture that was laid before us.
While we are all obviously aware of the adverse recessional effects at the time on business in general, I do not think some of these broader issues had really been brought to our attention prior to their detailed assessment and presentation during the committee hearings. I do not think any of us had realized the matter of competitive shopping between neighbouring jurisdictions was so significant in the industrial field.
The whole matter of foreign ownership was exhaustively discussed and reviewed. As is commonplace, the foreign corporations became the whipping boys of those on the committee who were looking for somebody or something to whip. This seems to be tradition. That has been reflected here again this evening when we saw the leader of the third party rising in the House and starting where he seemed to have left off in the past of taking to task the big foreign corporations, the multinationals. It seems he has an obsession with that part of our society and feels that all the ills and wrongs of our society seem to be concentrated in that one area.
It is unfortunate that this type of tunnel vision prevails, particularly with regard to a leader of a provincial party. Probably one of the reasons he finds himself in the difficulties that he is in today is because of this tunnel vision approach and doctrinaire view he has, whereby everything in society seems to be less than satisfactory unless it has a clearly socialistic solution to it within his vision.
Certainly, foreign ownership was and continues to be a concern of all of us, even though it is taken to extremes by people such as the members of the New Democratic Party. On the other hand, we on this side of the House, as well as the members of the official opposition, recognize that there are certain problems that may be associated with a significant degree of foreign ownership in this country.
However, I think this argument has been exaggerated too much and too often by the opposition parties, to the point where they are virtually scaring off legitimate foreign investment in this country. I have said in this House in the past, and I reiterate it, that I think one can flog a dead horse too often.
While foreign ownership seems to be the only whipping boy the third party has, it has caught the attention of the official opposition in recent months, and they seem to be getting on that same bandwagon, to the overall detriment of industrial development in this province.
Industrial concerns from across the border and around the world watch what goes on in this province and in this country. They see us as a province and a country of political and economic stability. But when they hear these cries of doom and gloom and derogatory statements towards those who show an interest in coming into our country and our province to invest and build, clearly it must be disturbing and upsetting to these people. If they hear enough of it long enough, they obviously will start to have second thoughts about whether they should take these investment risks.
One has to understand clearly that, if it were not for foreign investment, we would not be enjoying the high standard of living we enjoy in this country today. We have learned a lot from the foreign companies and the foreign investors in this country, and we have accomplished more in 113 years, as far as industrial progress is concerned, than our neighbours to the south accomplished in twice the time and other industrialized countries in the world accomplished in four times the time. Of course, we have been able to capitalize upon their technology and know-how and we have benefited in that fashion.
It is important that we keep a clear perspective. While I want to speak in particular about some of the organizations and groups that came before the committee, the two I was most impressed with were representative of the small business community.
It always seems the small businessman, like the middle-income earner in society, is caught in the middle between the underprivileged and the over privileged, the big companies and the individual entrepreneurs. It seems the small business entrepreneur is caught in this problem of big government and big labour unions and big business.
It is therefore interesting to see that the two representative organizations for small business in Ontario, the Canadian Organization of Small Business and the Canadian Federation of Independent Business, both made very significant, worthwhile and positive contributions to the committee's deliberations.
10:10 p.m.
It is interesting to note that two of the suggested recommendations made by the former association I referred to, the Canadian Organization of Small Business, are contained in the bill tabled in the House this afternoon by the Minister of Labour. One was a suggestion with regard to severance pay proposals, that individuals who decline offers of approximately comparable employment should not be eligible for severance pay. The other suggestion was that there should be a minimum of five years' seniority as a requirement before employees may become eligible for severance pay.
The Deputy Speaker: Time, Mr. Williams.
Mr. Williams: Mr. Speaker, I was just starting to get warmed up on this matter, and I thought I had two and a half hours to go, but I understand my time has been somewhat limited and I will have to live within those time constraints.
I can only conclude by saying that, by the introduction of the legislation today by the Minister of Labour, we again have a clear example of our government keeping the promise for the people of Ontario.
The Deputy Speaker: Mr. Wrye, I would like to explain that, according to the division of time, I think you have approximately five minutes.
Mr. Wrye: Mr. Speaker, I want to say that, if the member for Oriole wanted a little more time, perhaps we could have had more than the pittance the government has offered us to debate this important matter, but we will have to suffice with two and half hours to debate the future of the workers of Ontario.
At the outset I want to talk a little about some of the specific recommendations of the draft report, a report that I hope, but do not expect, the government will take under careful consideration and a report that I fear will feel the weight of many dusty years on the shelves of the government.
When I first got from my old business into this new one of politics, I promised myself that I would not always be partisan; that I would give credit when credit was due. I see the Minister of Labour has come back. I want to say that I welcome the legislation on severance pay. It is long overdue. I want to give credit to the minister, who has obviously fought it through a cabinet made up of very conservative Conservatives and brought forward legislation that is a small step forward in this general review of matters in the draft final report of the committee.
In the few minutes I have, let me deal first with a local matter. I guess I am pleased in the sense that the committee saw fit to deal with it in its draft final report. On page 25 of the report there is a recommendation that goes to the heart of the problems we face in Windsor, a community that has faced the worst unemployment crisis in all of Canada in the last 18 months. The statistics bear that out.
The recommendation says: "Information on the full social costs of a plant shutdown to Ontario as a whole is inadequate. The full costs borne by laid-off workers, their families, local communities and local, regional, provincial and federal governments is unknown."
So the final report recommends, and I wish the government would pay great heed to it: "A provincially funded study should be undertaken to ascertain the full social costs of plant shutdowns and indefinite layoffs in the Windsor area. This study should include a profile and subsequent tracking of the affected employees, the impact of social services in the area and costs, including lost revenue, borne by all levels of government."
May I suggest tonight to the Minister of Labour that, while he is dealing with the many recommendations of this draft report, he should look at this one and recommend to cabinet that the Minister of Community and Social Services (Mr. Drea) look into the implementation of this important recommendation, which could give us great headway in terms of the problems when we face them in the future. Make no mistake, the problems we face with industry will lead us time and time again to cyclical shutdowns in many industries. We hope they will only be of a short-term nature, but they are shutdowns we should be prepared to face at all levels.
There are a number of additional recommendations in this draft report to which I would like to speak in the time remaining. In many ways, the draft report is literally a direct steal from the very fine industrial strategy that my colleague the member for London North (Mr. Van Horne) alluded to earlier in the debate, an industrial strategy we brought in during the campaign. Unfortunately, this time the voters did not feel they should adopt it. I am sure they will next time.
I want to read a couple of the recommendations of the draft report. The first is: "The Ontario government should develop an industrial strategy emphasizing high-technology industries and industries to which Ontario is uniquely suited." In addition, the select committee recommended: "Government aid and support should be directed to domestic owned firms."
There are a number of other recommendations in the draft report that go to the heart of the matter in terms of the government procurement program. I hope this government, which promised that kind of procurement program in the throne speech about which there has been a lot of rhetoric but no implementation, will follow its own recommendations as time goes on.
There are a number of other things I would like to speak about, but I am told time is running out. I will just say in addition that there is one other area the government should be looking at, and that is the area of justification. I refer the minister to page 26 and the first recommendation under public justification, which says:
"A firm planning a plant shutdown or mass layoff be required to appear before a public tribunal appointed by the provincial government. The appearance would be required before the firm issues notice to its employees as required under the Employment Standards Act."
We need some public justification of plant shutdowns. My colleague the member for Essex South (Mr. Mancini) referred to the shutdown of Bendix early last year and the fact that there was no justification, simply a shutting of the doors. That cannot be allowed to continue. I hope this government in its wisdom and with its majority will choose to move towards some progressive actions in the future.
Mr. Cooke: Mr. Speaker, I too wish we had more time to debate this report. However, I would not want another two and a half hours if it meant that the member for Oriole (Mr. Williams) were going to speak for that time. That would be unanimously agreed upon by this side.
I do want to touch on a few points. As a member of the committee that reviewed the problem of plant shutdowns and employment adjustment, I can say the problem is getting worse in this province, not better.
When we discuss the severance pay bill introduced today, we will certainly talk about the inadequacies of severance pay. It is a step in the right direction, but our guesstimate is that the bill will cover approximately 25 per cent of the people who are on permanent layoff in this province. That is obviously inadequate.
In the first three months of this year, we have had 23 plant closures. If that rate continues, we will have 90 plant closures this year, compared with 68 in 1980. The problem is getting worse, and there is clear justification for the select committee on plant shutdowns and employee adjustment to be reconstituted so it can complete its report and make satisfactory recommendations.
I must endorse the comments made by the member for Oshawa (Mr. Breaugh). I feel really uncomfortable speaking in this debate tonight, because after the cost of that select committee to the taxpayers and after the work that was put into the presentations by the various groups -- whether they be business, labour or individuals -- that committee was short-circuited by an election that was called on the same day as we were to start writing our final report.
I urge the Minister of Labour and the cabinet to take a look at that committee and to reconstitute it for this summer so we can look at the problem and come up with some unanimous or consensus recommendations.
10:20 p.m.
We looked at a number of the problems, and again severance pay was only one of the small items to help workers who lose their jobs through plant closure. Other points were justification, adequate notice, community costs and community adjustment and, most important of all, an industrial strategy that will turn this economy around, make the economy Canadian controlled -- an economy that has been sold out to American interests by our federal Liberal friends and our provincial Conservative friends.
The member for Essex South (Mr. Mancini) talks about the lack of Canadian control of the economy, but his friend Mr. Gray is in charge of the Foreign Investment Review Agency, and I have not seen any massive reforms in that particular agency since he took over as Minister of Industry, Trade and Commerce.
The Bendix situation came before the committee and I am sure all the committee members were alarmed at the way that company closed its plant. On June 16, 1980, at a negotiating meeting for a new collective agreement for both plant and office workers, Locals 195 and 240 of the United Auto Workers, the union was made aware that Bendix was doing studies as to which plants were feasible.
We have all heard of these feasibility studies. As soon as one hears of a feasibility study, one knows that plant is out the window. There are rumours for three months, which are all denied, and then eventually the plant is closed.
The union asked the company about the problem at that time and was told there was a feasibility study. As a result, negotiations broke off, and on June 20 a meeting was held. The corporation representatives made a statement that they were closing the Windsor plant as of that moment.
If you can believe it, Mr. Speaker, the company asked the union representatives to go from where they were negotiating over to the plant and help them tell the workers and provide for an orderly exodus of the workers on that particular day. Can you believe a company using those kinds of tactics, giving eight weeks' pay in lieu of notice, saying on Friday, June 20: "Your plant is closed. You have no job. We are not giving you a reason," and then asking the union to help them make the system work by getting the workers out of the plant?
Obviously, the workers at that plant were upset, and eventually the plant was occupied. It was only because of the occupation that the company was willing to negotiate with the union, and eventually a satisfactory agreement was attained, if any agreement can be satisfactory to workers when their jobs are lost.
As the minister will know, the union contacted him on July 2 and asked if he would investigate, but his position at that point, according to his officials, was that the decision had been made and there was nothing this government could do. Obviously, under present legislation, there is nothing this government can do. Bendix refused to set up a manpower adjustment committee.
Incidentally, that plant was a profitable plant, with the exception of a short period in 1980. The manager who appeared before the committee indicated that it was profitable and that he thought it could maintain its profitability but, in his opinion, by transferring the production from Canada to the United States more profits could be made. That was the justification in this particular case.
We in this province lost 500 jobs at that time, and there had been at one point up to 900. So it was a loss of 900 jobs to the economy as well as a continued increased deficit in auto parts, because now we import those parts from Bendix into Canada.
I wanted to talk about SKF, another example, but I do not have much time; so I will skip that one. I do want to make a couple of comments about the layoffs at McDonnell Douglas. That was one that upset me and most of the committee members.
The McDonnell Douglas people came before us. They were losing 1,000 jobs after a multibillion-dollar contract had been signed for the F-18 with the federal government. The company officials had not seen the contract for the F-18. They had to bid for any of the subcontracts on an equal basis with any other companies that could fill those contracts in Canada. They got no preference. As a result, we spent billions of dollars to get the F-18, and we lost 1,000 jobs at McDonnell Douglas. The Canadian management had absolutely no input, no knowledge, none whatsoever. Obviously, McDonnell Douglas is an excellent example of the problems of a branch plant economy in this province, a problem this government refuses to come to grips with.
I want to talk about some of the community effects of plant closures and the cost to the community. I think there is an economic basis to why there should be justification; why plants should be stopped from closing their plants if they cannot justify the closing.
First, let me quote from a report that was done a year ago by the mayor's committee on services to the unemployed in Windsor. It says: "Some agency representatives are perceiving an increase in mental health and alcohol- and family-related problems. They attribute the increase in the incidence of these problems to unemployment."
It goes on to talk about family breakdowns, increased demand at social agencies, people not being able to make it on unemployment insurance and general welfare assistance and the resulting anxieties it creates. It talks about loss of homes and a total destruction of people's lives. It is not only a loss in human terms; it is also a very real loss to the taxpayers who pay for these welfare programs, unemployment insurance programs and the various social agencies.
When the mayor of Oshawa came before our committee, he indicated they had had a direct payroll loss of $21 million annually; a loss of sewer and water revenue of $250,000 resulting from the Houdaille closure alone; a loss of $900,000 by the public utilities commission from Houdaille's closing; a loss of sewer and water revenue of $100,000 from the Firestone plant closure; a loss of business assessment of $2,458,000 and an increased cost of $3.3 million in general welfare.
Obviously there is justification for setting up a study to find out the full cost of unemployment. One of the recommendations I think we were able to get through the committee -- one that I pushed for -- was that Windsor should be the city chosen for a detailed study of the cost because of the extremely high unemployment there over a number of years now. I hope the Minister of Labour will pursue that matter, because I think it is incredibly important for planning.
I want to spend a little bit of time quoting from another study. It is a study that was done in my riding on the Drouillard Road area 25 years after the massive plant closure of Ford when they moved to Oakville. I think this study 25 years later indicates very clearly the problems of plant closures.
On page one of the report it says: "The Drouillard Road neighbourhood has been in existence for a number of years. The area began to develop around the turn of the century when the Ford Motor Company moved in. This industrial development brought with it an influx of workers and their families into the area. Residential and commercial development flourished during the next 30 years. Drouillard Road became known as a thriving shopping district in the late 1940s.
"When the Ford Motor Company moved a part of its operations" -- it was 5,000 jobs they moved -- "to Oakville in 1953 there was a decline in the neighbourhood. The work force was cut in half. People began leaving the area, businesses began to fail and the total neighbourhood suffered as a result."
I do not have time to quote the other parts of the report I wanted to refer to tonight, but it is a rather massive document. It talks about the high crime rate that exists in that area. Something like 60 per cent of the storefronts are boarded because the whole community has literally been destroyed. We have a high incidence of alcoholism in that area. We have a high crime rate. We have juvenile delinquency problems and a generally rundown area that can all be attributed to the plant closure of 25 years ago.
I wish we had more time to debate this matter. We will debate it somewhat on the severance pay bill, but I think there is much more this government can and must do. I hope one of the things it will do is look at conducting a study in Windsor. I hope it will also reconstitute the committee.
The House adjourned at 10:30 p.m.