Legislative Assembly of Ontario

The House met at 10 o’clock, a.m.

Prayers.

Hon. D. R. Timbrell (Minister without Portfolio): Mr. Speaker, if I may I would like to draw to the attention of the members of the House the presence in the lower Speaker’s gallery this morning of representatives of the students’ council of the University of Windsor, whom I have met this morning and with whom I discussed the various youth programmes in that area.

Mr. E. M. Havrot (Timiskaming): Mr. Speaker, I am delighted to welcome students from the great riding of Timiskaming, eight students from the Savard Public School in Charleton, under the supervision of Mr. Wayne Minnett. Please welcome the great students from the great riding of Timiskaming.

Mr. Speaker: Statements by the ministry.

FILING LAND TRANSFER AGREEMENTS

Hon. A. K. Meen (Minister of Revenue): Mr. Speaker, over the past few days we have been made aware of a severe administrative difficulty encountered by the legal profession and their clients in meeting the time limits for notifying the Minister of Revenue of agreements executed prior to April 10, 1974, but which will not be registered until after May 15, 1974.

Both the Land Transfer Tax Act, 1974, as passed, and the proposed Land Speculation Tax Act, require that copies of such agreements be filed with the ministry before May 16 next. Toward the end of the recent postal strike, we received the first indications there would be problems meeting the deadline. The subsequent review of the extent and nature of the problems leads us to believe that it is not practical to maintain the deadline. In fact, we have concluded that the difficulties, together with the administrative problems for the ministry inherent in receiving, cataloguing, maintaining and reviewing the many thousands of such agreements that are in existence, justify the removal of the filing requirement.

Accordingly, I propose to introduce appropriate amendments to both Acts, removing the requirements that such agreements be filed with the ministry before May 16. It will remain necessary, however, that the fact that execution of such agreements took place prior to April 10, 1974, be established to my satisfaction at the time they are relied upon to avoid imposition of the new taxes as created by these Acts.

Mr. M. Shulman (High Park): Oh boy; is the minister ever going to have backdating!

Hon. Mr. Meen: I don’t think so.

Mr. Speaker: The hon. Minister of Health.

Mr. S. Lewis (Scarborough West): There is nothing left of those bills.

Mr. J. A. Renwick (Riverdale): The postal strike is going to be a real boon for the lawyers.

Mr. Speaker: Order, please.

Mr. Lewis: The minister is bringing in the debate on the date that the federal budget will be coming forward in order to avoid public awareness.

Mr. Speaker: Order, please. The Minister of Health has a statement.

HOSPITAL WAGE CEILINGS

Hon. F. S. Miller (Minister of Health): I didn’t want to speak when the member wasn’t listening.

The Ministry of Health is concerned about the impact of the current inflation on hospitals and other related facilities in the province. Accordingly, certain increases will be considered. These increases, which will apply only to specific categories of cost and only to the extent to which increases are demonstrably necessary for each facility, will afford a measure of relief.

Adjustments will be considered for public hospitals and private hospitals in Ontario; rehabilitation and crippled children’s centres; private psychiatric hospitals; children’s mental health centres; and boards of health. Adjustments will be considered in respect of wages, drugs and services.

Volume adjustments have already been dealt with in the budget and are unchanged by this announcement.

I will speak first of what can be described as forced costs. Funds will be made available to meet the additional costs of unemployment insurance, Workmen’s Compensation and the Canada Pension Plan resulting from changes in legislation.

Next, under the heading of “Other Supplies and Expenses” we will consider what adjustments are necessary to meet some of the actual cost increases shown to have been sustained in the purchasing of major items such as fuel oil, food, medical supplies and the like.

Thirdly, wages and fringe benefits: because we want to maintain reasonably equitable wages for employees of hospitals and related facilities, the ministry is prepared to consider individual presentations which fully document the short-fall between the current budget approvals and the amounts deemed necessary to maintain equity. This applies particularly to those in the lower wage brackets. Each facility is being invited to submit detailed supplementary budget requests. The scope of these adjustments is comprehensive. In each case, I repeat that individual submissions will be required to form the basis of any adjustments.

Mr. Speaker: I recognize the member for Parkdale who has a group to introduce.

Mr. J. Dukszta (Parkdale): I would like to introduce pupils from a school in my riding, St. Rita’s Separate School, and Mrs. Grogan, who are sitting in the east gallery.

Mr. Speaker: Oral questions.

The member for Kitchener.

HOSPITAL WAGE CEILINGS

Mr. J.B. Breithaupt (Kitchener): Mr. Speaker, further to the statement of the Minister of Health: Since the minister’s estimates are expected to follow those of the Ministry of Agriculture and Food in the fairly near future, can the minister advise us if there is any time limit with respect to these various adjustments so that the details will be fully available to the House in time for the presentation of the minister’s estimates?

Hon. Mr. Miller: Mr. Speaker, I would suggest that the changes involved here will probably be the basis for supplementary estimates because they are not fully predictable at this point in time.

Mr. Speaker: The member for Wentworth.

Mr. I. Deans (Wentworth): A supplementary, Mr. Speaker: May I ask on the matter of wages and fringe benefits, wasn’t this the purpose of the inquiry set up by the Minister of Labour (Mr. Guindon) and the Minister of Health about three months ago? Why is he now saying he will have individual representations when that should have been done over the last three months and a decision reached?

Hon. Mr. Miller: It’s not that simple, Mr. Speaker, as I’m sure many members know. First of all, there are individual contracts available for negotiation at any point in time. It’s not like the school system where contracts fall on a certain date. Secondly, the catchup for any given hospital may not --

Mr. Lewis: I like that term “catchup.” He has taken it right out of the union files.

Hon. Mr. Miller: I’ve been brainwashed lately.

Mr. Lewis: He is doing very nicely; I’ll give him a button to wear. In fact, we will give him a membership.

Hon. Mr. Miller: That was one of those unfortunate slips of the tongue that come sometimes from listening to CFRB.

Mr. D. C. MacDonald (York South): One certainly gets slips of the tongue there all right.

Hon. Mr. Miller: However, the problems are individual. The overall levels of salaries and the impact of constraints upon the hospitals still have to be assessed by the two committees set up and we hope that these will provide us with a firmer foundation for next year’s estimates.

KRAUSS-MAFFEI SYSTEM

Mr. Breithaupt: A question of the Minister of Transportation and Communications: Can he confirm that the Urban Transportation Development Corp. has hired a public relations firm to attempt to improve the image of the Krauss-Maffei system? If so, who has been hired?

Hon. J. R. Rhodes (Minister of Transportation and Communications): No, Mr. Speaker, I cannot. I am not aware that any firm has been hired. One may have been hired by the corporation but I haven’t been advised of it.

Mr. Lewis: A supplementary: He would agree, of course, that he couldn’t possibly do anything with the image of Krauss-Maffei even if a firm were hired.

Mr. Speaker: The member for Kitchener.

Mr. Breithaupt: A supplementary to that question: On the same line can the minister confirm or is he aware of any planned junket which is apparently to take place in the fall to take a group of perhaps other sceptical politicians, newsmen and businessmen to Munich to review this system? If so, can he advise us who will be paying for that trip?

Hon. Mr. Rhodes: Mr. Speaker, I am aware of it because I read it in the Globe and Mail this morning. That is the only information I have about such a planned junket, as the member calls it.

Mr. Speaker: The member for Ottawa Centre.

Mr. M. Cassidy (Ottawa Centre): I beg pardon of the member. I won’t use the word junket but is not the reason the trip to Munich has been postponed from now until September, that Krauss-Maffei is having difficulties making the machine in its plants, which are comparable to the delays the minister is haying at the Exhibition here in Toronto?

Hon. Mr. Rhodes: Mr. Speaker, as I said, I don’t know about this supposed planned trip to Munich or whether or not it has been cancelled. According to the Globe and Mail there was one which has been put off. I don’t know about that.

Mr. Lewis: A supplementary, Mr. Speaker: Does the minister know that Krauss-Maffei, in its plant in Germany, is having difficulty developing the computer specifications to meet the specifications set out in the contracts he has and that is yet a further reason for this continuing delay?

Hon. Mr. Rhodes: Mr. Speaker, my information is that that particular aspect of the development is moving along quite well.

Mr. Lewis: It is?

Hon. Mr. Rhodes: Yes.

Mr. Lewis: Why the delays then? What is wrong with the demonstration model?

Hon. Mr. Rhodes: I don’t think there has been any -- I have not at any time said anything about delaying the development of the technology and of the project which has been carried on in Munich. What I have said is I feel we have to do some redesigning and looking at the guideway construction and the costs involved. I want to make it very clear that I am talking about the guideways and the stations being developed at the CNE. I have not at any time said anything about cancellation of the project; that is coming from the member, not from me.

Mr. P. G. Givens (York-Forest Hill): A supplementary, Mr. Speaker: If that is so, what happened to the Krauss-Maffei system which we were told a year ago by the minister’s predecessor was going to be established in Heidelberg? What happened to that system?

Hon. Mr. Rhodes: I am sorry, I am not aware of them establishing it in Heidelberg.

Mr. Speaker: The member for York Centre.

Mr. D. M. Deacon (York Centre): A supplementary, Mr. Speaker: Wouldn’t we be feeling rather ashamed of ourselves in Ontario if we had these wonderful guideways here but the technology for the actual operation of the system had not been developed at this point? Why should we be going ahead with construction of the guideways before we know the darn thing will work? Why is the minister moving ahead before he knows that?

Hon. Mr. Rhodes: Mr. Speaker, as I said, we are satisfied that the technology is good and that the system will work. That’s why we are going ahead and building the guideways to put it on and show the members.

Mr. Deacon: At $25 million, $30 million, $35 million?

Mr. Givens: The minister should see if Paddy Conklin will take it off his hands. Has he heard of Paddy Conklin?

Hon. Mr. Rhodes: Sure, I have heard of him.

Mr. Speaker: This will be the last supplementary. The member for Ottawa Centre.

Mr. Cassidy: A supplementary: In light of the reassessment of the guideway because of inflation, would the minister also make a statement to the House about reassessment of the costs of the system itself which would have been incurred if there had not been a fixed price contract with Krauss-Maffei?

Hon. Mr. Rhodes: I can’t answer that at this time and the member well knows it.

Mr. Speaker: Does the member for Kitchener have further questions.

STEEL MILL ON NOTTAWASAGA RIVER

Mr. Breithaupt: Yes, Mr. Speaker, I have a question of the Minister of the Environment. Has the minister as yet made himself aware of the facts concerning the proposed $25 million steel mill on the Nottawasaga River about which I directed a question to him some weeks ago?

Hon. W. Newman (Minister of the Environment): I didn’t catch the first part of the question. Unfortunately, I was talking to one of my colleagues.

Mr. Breithaupt: I would be more than pleased to repeat it. Has the minister as yet made himself aware of the facts concerning the proposed $25 million steel mill on the Nottawasaga River about which I directed a question to him about six or eight weeks ago?

Hon. W. Newman: Yes, I’m well aware of the plant the member is talking about. We have done an environmental study on it.

Mr. Breithaupt: Can the minister advise us if the study is going to be available to us? Does he concur with the requests made by the reeve of Essa township and has he also dealt with his colleague, the Minister of Agriculture and Food (Mr. Stewart), as he said he would do, with respect to the agricultural value of the 300-acre site, which apparently will be used by this project?

Hon. W. Newman: This is an internal study we have done within the ministry. We have consulted with the Minister of Agriculture and Food, of course, and he is well aware of the site, too.

Mr. Breithaupt: Does the minister agree with the Essa reeve? Can we expect to receive a report from the minister with respect to the impact this project would have on the environment of that township?

Hon. W. Newman: Yes, I expect members will probably be receiving some sort of report.

Mr. T. P. Reid (Rainy River): Come on.

Mr. Breithaupt: I have a supplementary but I won’t ask it, Mr. Speaker.

NOISE REGULATIONS

Mr. Breithaupt: I have another question of the Minister of Environment. How long does the minister intend to delay before proclaiming the anti-noise regulations under the Environmental Protection Act?

Hon. W. Newman: We are proposing to bring forward the noise regulations some time later this year. I know they have been promised for some time but there have been many complications.

Mr. R. Haggerty (Welland South): Since 1971.

Hon. W. Newman: It is not a simple matter to deal with noise. For instance, I don’t know whether the noise in this House would be too high.

Interjections by hon. members.

Hon. W. Newman: It might be too high in here and we might have to impose the regulations here sometimes.

Mr. Lewis: This is 3 1/2 years after the event.

Mr. Reid: Three and a half years.

Mr. Lewis: It has taken the government 3 1/2 years and it has been promised six times.

Hon. W. Newman: We have an experimental programme going on in Hamilton and we expect an experimental programme to be going on in Toronto very shortly.

Mr. Lewis: Hamilton for noise?

Hon. W. Newman: It is not an easy thing to determine. It is not hard to determine over there but sometimes throughout the other areas it is difficult to determine. We hope we’ll have some proposed --

Mr. Lewis: But the experiment in Hamilton is those signs which say “Please don’t honk as you are passing.”

Hon. W. Newman: We expect to have something probably this fall.

Mr. Breithaupt: Is there any reason that the standards being tested in Hamilton cannot become law before the summer months?

Hon. W. Newman: Yes, there are many reasons because we are only dealing with one aspect of it. That is the traffic aspect and the vehicular noise part of it. We might have that before fall. But certainly we want to do studies; for instance, it might be raining one day and the noise factor could be a great deal different from that on a dry day.

Mr. Reid: Come on.

Mr. Lewis: That has taken three years to figure out? One needs a lot of civil servants’ brain power to work that out over there.

Hon. W. Newman: It is not that simple and the members know it is not that simple.

An hon. member: Rain power.

Hon. W. Newman: We get a lot of rain power from over there sometimes, too.

Interjections by hon. members.

Mr. E. R. Good (Waterloo North): A supplementary: The minister said the vehicle noise control might be in before fall. When could we expect the regulations regarding stationary noise and, more importantly, when might we expect a model noise bylaw so that municipalities can then get some action and they won’t have to revert to the municipal noise bylaw which was passed 100 years ago? When is the minister going to have a model bylaw for the municipalities?

Hon. W. Newman: As I said, we will be doing some stationary noise studies this summer and we hope we would have a model bylaw --

Mr. Reid: Do that study on the cabinet because there is nothing more stationary than that.

Mr. Speaker: Order, please.

An hon. member: Except the member,

Hon. W. Newman: We would hope we would have a model bylaw for municipalities this fall.

Mr. Good: This fall? This year?

Hon. W. Newman: Right.

Mr. Deacon: A supplementary: Has the minister brought together people from the industry, such as manufacturers of air conditioning equipment, etc., municipal people and others who are involved in the manufacture and installation particularly of stationary equipment, because they have a lot of ideas as to how this could be solved? Why doesn’t he get together with the people who are involved?

Hon. W. Newman: What does the member think I’ve been doing?

Mr. Deacon: I have wondered.

Hon. W. Newman: Okay. We’ve been meeting with a lot of people to discuss the matter. A lot of the noise regulations which will come out will be affected by Ottawa, at the manufacturing end, because the levels will be contained there.

Mr. Deacon: The manufacturers can’t do much about installation.

Mr. Givens: Speaking about noise, is the minister doing any studies with respect to the installation of Krauss-Maffei’s gigantic elevated stations? What noise impact and environmental impact will these gigantic elevated stations have on the residential areas of Toronto? Has he been requested to make these studies?

Hon. W. Newman: We work very closely with the Minister of Transportation and Communications on all their problems.

Mr. Reid: That is why they are both in trouble.

Mr. Givens: A supplementary question: Was this ministry requested to do anything about removing 60 trees at the CNE and all the environmental damage being done down there now? Was he requested to give a report on that as well? It is environmental damage.

Mr. Good: That is a good question.

Hon. W. Newman: We are aware of the fact that trees were cut down to build the track. We are constantly monitoring all these projects throughout this city and other cities. We are keeping an eye on the Krauss-Maffei programme, too.

Mr. Speaker: The member for Scarborough West.

ALLEGED AIR POLLUTION FROM METAL COMPANIES

Mr. Lewis: Thank you, Mr. Speaker. May I ask first the Minister of the Environment why he will not proclaim lead emission regulations and standards now, in advance of the report he will receive in June or July, on which he will act sometime in August or September, in order to protect in advance those in the immediate area of the Canada Metal plant? These standards can be based on acceptable standards in certain American jurisdictions, which he can then vary if need be when his report comes down?

Hon. W. Newman: There are many problems. We have talked about that particular plant and we will have some meetings this coming week on the new anti-pollution equipment which has been in effect there now for about 40 days. We monitor it on a monthly basis and we will have the statistical figures back next week.

As the member knows, we met yesterday with many people on this matter, and also with the Minister of Health and the Minister of Labour. We were very concerned also about the two families that moved back in and we tried to help them find alternate accommodation. We are concerned about them. We are expecting this report by the middle of or the third week in June.

Much of the work of this committee will be dealing with the Carnow report. This is a highly technical situation where we have medical people involved. There is interdepartmental liaison and two outside people are also sitting on this working committee on lead. We would like to wait to hear what they have to tell us around the middle of June.

Mr. Lewis: By way of supplementary, does not the minister recognize that we will be moving well into the summer; that children will be playing in the soil immediately around the Canada Metal plant; and that he is inviting further hazard to human health by his refusal to apply the emission standards now which he knows will safeguard them, and then see if they need be varied by further scientific evidence? Why does he invite further Sick Children’s Hospital cases by not acting now and by waiting for another summer?

Hon. W. Newman: I believe we are trying to do everything within our power and within our technology in this ministry to put controls on all these plants so that we do have proper emissions.

Mr. Lewis: Well, then, do it now.

Hon. W. Newman: We have the equipment in there now. We are not exactly sure how effective that equipment is going to be until we get these readings.

Mr. Speaker: Any further questions?

Mr. Lewis: I have a question of the Minister of Housing. This is a rather different one.

Mr. Cassidy: He ducked when the member said that.

CHATHAM TOWNSHIP WATER SUPPLY

Mr. Lewis: What answer is there to the extraordinary situation in Chatham township, a mile or so along Highway 2 and a mile or two back from it, where 117 families or more do not have drinking water or water for any other facilities and use? They have to truck their water in as individual families, and are worried about the pollution and disease because of how low the water table is. There seems to be absolutely no way in government over the last two years of petitioning and pressuring any ministry to resolve the problem for this group of citizens of Ontario.

Mr. J. E. Stokes (Thunder Bay): Who is the member there?

Hon. S. B. Handleman (Minister of Housing): Mr. Speaker, I am not aware of the problem. I haven’t seen any petitions to me, but I would be very pleased to look into it. I don’t even want to hazard a guess as to what gave rise to the situation at all until

I have had an opportunity to look into it. I’d certainly be interested in receiving details of it as quickly as possible.

Mr. Lewis: Let me go to the Minister of the Environment. How is it that the Minister of the Environment has refused to Chatham township the right to build some kind of water treatment facility, simply because it is adjacent to the city of Chatham which has such a facility but which will not allow Chatham township or the residents whom I have mentioned to tap into the lines from the city of Chatham? Therefore, there is a serious water hazard and enormous difficulty for all of these families, apparently insoluble.

Mr. C. E. McIlveen (Oshawa): They need regional government there.

Hon. W. Newman: Mr. Speaker, the city of Chatham has the capacity to deal with the municipalities as it wants to. There are people down there who are elected to represent them. They have a right to negotiate with the city of Chatham on water and, I assume, Chatham township will eventually want to have sewers too. But they can negotiate; there is the capacity there. It can be worked out, I’m sure. In this ministry we’re glad to help but we won’t interfere with elected people when they have their own negotiations going on.

Mr. Lewis: Just by way of supplementary, is the minister aware that the city of Chatham has a resolution which says:

“That the township of Chatham be advised that the council of the city of Chatham reiterates its policy to the effect that city water and sewer facilities will not be made available anywhere outside of the city.”

What does the ministry do with all these residents along Highway 2 who are risking serious health hazard? There is obvious pollution. The appropriate branch of the Ministry of Housing has thrown up its arms -- I know, because we’ve dealt with it -- the Minister of the Environment has thrown up his arms; the local member can do nothing and this situation persists. Is there no way of resolving it in the Province of Ontario?

Hon. W. Newman: As the member knows, there was a development in Chatham township.

Mr. Lewis: I am not talking about the shopping centre. I am talking about over 100 families.

Hon. W. D. McKeough (Minister of Energy): That’s part and parcel of it.

Mr. Lewis: That is not part and parcel of it. It is a separate matter.

Hon. W. Newman: Part of the problem is the commercial thing that is built out there. If the township of Chatham has a problem and wants to talk to the Ministry of the Environment about it, we are prepared to talk to them.

Mr. Lewis: They talked to the ministry but the ministry told them it won’t do anything.

Hon. W. Newman: We would like to get them to sit down and talk with the city of Chatham.

Interjections by hon. members.

Mr. MacDonald: Why doesn’t the ministry do something?

Mr. Lewis: What does the ministry do in a situation like this?

Hon. W. Newman: The member does not think that anything is possible any more, does he?

Mr. Lewis: What is the minister going to do about it?

Interjections by hon. members.

Mr. Deacon: Supplementary: Does this not show the need for the Ontario government to set up an Ontario Hydro-type organization to provide basic water and sewage services to the municipalities?

Mr. G. Nixon (Dovercourt): Get off that stuff.

Mr. Deacon: When is the government going to recognize the fact that local autonomy does not mean always having to buy their own basic plants and services when they don’t have the resources?

Interjections by hon. members.

Hon. Mr. McKeough: That is centralization.

Mr. Deacon: The Minister of Energy doesn’t understand these things and he never will.

Interjections by hon. members.

An hon. member: Don’t centralize it. Take it over.

Mr. Lewis: As a matter of fact, the Minister of Energy has caused a lot of trouble around Ontario. He knows they are his constituents and he can’t do a darn thing for them.

Interjections by hon. members.

Mr. Speaker: Order, please.

Interjections by hon. members.

Hon. Mr. McKeough: Members opposite just want to centralize everything here.

Mr. Deacon: If the government is against centralizing, why doesn’t it provide the resources to look after the sewer and water problems?

Interjections by hon. members.

Mr. Speaker: Does the hon. member for Scarborough West have further questions?

Interjections by hon members.

Hon. W. Newman: To answer the hon. member for York Centre, certainly we do co-operate. Since this ministry was formed it has been involved in water and sewage problems.

Mr. Deacon: Nothing except excuses.

Hon. W. Newman: Does the member want to take away local autonomy?

Interjections by hon. members.

Hon. W. Newman: We co-operate and we give grants.

Hon. Mr. McKeough: Why doesn’t the member take over the school board in York and take over the water commission?

Interjections by hon. members.

Mr. Speaker: Order, please. We have had enough supplementaries. Does the hon. member for Scarborough West have further questions at this point?

Mr. Lewis: Well, just one.

Mr. Deacon: How are you going to put up with that dictator?

Interjections by hon. members.

Mr. Lewis: Someone called the Minister of Energy the Stalin of the Tory party.

Mr. Speaker: Order, please.

Mr. Lewis: How dare he accuse them of centralizing?

Interjections by hon. members.

FOOD PRICES

Mr. Lewis: May I ask the Minister of Consumer arid Commercial Relations a question, if I can find my notes? Have I got it right?

Hon. Mr. Handleman: The member has it right

Mr. Lewis: I am very pleased. I was prompted. What is the minister going to do in view of the Canadian Press cross-Canada survey showing that the overall costs of the items in their food basket that they review once a month has increased substantially? The recent indication is that 117 Canadian companies have had a 70 per cent profit margin. Recent figures in the last week show that wages have again fallen below the rising cost of inflation and the food factor is up over 18 per cent this month as compared to April of last year. Is he prepared now to introduce any kind of legislation to protect the consumer in the area of food prices?

Hon. J. T. Clement (Minister of Consumer and Commercial Relations): Mr. Speaker, I think the hon. member will recall that at the time we filed the study, we pointed out that we did not have the 1973 figures available because they had not in most instances been published. I also indicated at that time that when they were published they would then be brought before this House and filed as part 2 to the report. I am somewhat suspicious of short-term, quarter-annual earnings statements indicated by the press. I cannot accept them on the basis that they do reflect the truth of the matter. I am not intending to introduce any price type of legislation to this House.

Mr. Haggerty: They wouldn’t support it anyway over there.

Hon. Mr. Clement: I am intending to introduce, later on this year, certain commercial-practice types of legislation which may, hopefully, directly assist the consumer in this particular problem.

Mr. Cassidy: The minister promised us that a year or more ago.

Mr. Lewis: Supplementary, if I may: Does the minister know that the economic analysis on which his food price study is based, which he tabled in the House, does not permit of an excess profit ever to be shown? Does he know, in other words, that he is in the process of producing studies built into which is a predetermined outcome, which is that an excess profit can never be shown? Has this been drawn to his attention? We have done quite an analysis of it. I will send it out to the minister next week. Has he looked at that?

Hon. Mr. Clement: No, it hasn’t been drawn to my attention because I have great difficulty in really knowing what excess profits are. I think this is something that, when the phrase is used, Mr. Speaker --

Mr. Lewis: Yes, over --

Hon. Mr. Clement: -- you have to look at the risk that is involved and the nature of the industry. You have to look at losses that the industry has experienced.

Mr. MacDonald: That is a cop-out.

Mr. Deans: People have to buy food.

Hon. Mr. Clement: I noted with some interest the other day that the leader of the member’s party in Ottawa Was unable to define what excess profits are because, quite frankly, it is difficult to define them.

Mr. P. D. Lawlor (Lakeshore): Does the minister know what an unconscionable transaction is?

Mr. Deans: We will define it for him.

Mr. Lewis: Of course, he defined it.

Hon. Mr. Clement: Mr. Speaker, you just can’t say these are excess profits. It is impossible.

Interjections by hon. members.

Mr. Lewis: A satisfactory return on investment is 10, 11, or 12 per cent.

Mr. Cassidy: Supplementary, please.

Mr. Speaker: Is this a supplementary?

Mr. Cassidy: Yes, it is a supplementary, Mr. Speaker.

Mr. Speaker: Order, please. The hon. member for Ottawa Centre has a supplementary.

Mr. Cassidy: Has the Minister of Consumer and Commercial Relations reviewed the report of the National Council of Welfare on the cost of living of people on low incomes? If not, will the minister review it and will he pass the information on to the Minister of Community and Social Services (Mr. Brunelle) and to the cabinet so that appropriate measures can be taken, given the fact that the cost of living for the poor has gone up at a rate about double that of the average cost of living in Ontario?

Hon. Mr. Clement: Mr. Speaker, I have not personally examined it because I was not aware of its existence. I will find out from my staff but I just was not aware of its existence.

Mr. Lewis: No further questions, Mr. Speaker.

Mr. Speaker: The member for Waterloo North.

PATIENTS IN HOMES FOR SPECIAL CARE

Mr. Good: Mr. Speaker, a question of the Minister of Health: Has the minister made any changes in his support programmes to extend support for patients in homes for special care, comparable to patients in homes for extended care, so that families will not be responsible for patients who are released from psychiatric hospitals and put in homes for special care?

Hon. Mr. Miller: Mr. Speaker, I believe the hon. member is talking of the $4.50-a-day co-payment that currently exists. Is that what he is talking about?

Mr. Good: I am talking about the homes for special care where a family, if it has assets, is responsible for the complete care of the person in a home for special care.

Hon. Mr. Miller: I really don’t understand the member’s question yet.

Interjections by an hon. member.

Hon. Mr. Miller: Try me once more, and perhaps it will sink through.

Mr. Good: Mr. Speaker, does the minister understand that after a patient is released from a psychiatric hospital and put in a home for special care, the husband or wife of that patient is responsible for the financial upkeep of that person in that home, and that the patient does not qualify for benefits under OHIP or the extended care programme?

Hon. Mr. Miller: I disagree, Mr. Speaker. I am sure that many patients have been released from psychiatric hospitals in the Province of Ontario and are in homes for special care, where OHIP is paying roughly $10.50 per person per day and the balance of $4.50 is chargeable to the person himself.

Mr. Good: The minister doesn’t understand the problem.

An hon. member: Isn’t that generous?

Mr. Speaker: The hon. member for Sandwich-Riverside.

SAFETY INSPECTION OF CARNIVAL RIDES

Mr. F. A. Burr (Sandwich-Riverside): Mr. Speaker, a question of the Minister of Consumer and Commercial Relations regarding the safety inspection of carnival rides: Does the minister recall receiving a suggestion from Windsor city council last July, urging the minister to set province-wide regulations and standards for carnival rides? And has he acted on this yet?

Hon. Mr. Clement: Mr. Speaker, I do recall receiving the resolution referred to by the hon. member. I would like to get back to him on it within the next few days. I can’t recall exactly what occurred on that, so I would like to refresh my memory. But I do recall the incident very clearly.

Mr. Speaker: The Minister of Natural Resources has an answer to a question which he would like to give now.

LEMOINE POINT

Hon. L. Bernier (Minister of Natural Re- sources): Yes, Mr. Speaker, the hon. member from Scarborough West asked me a question last week concerning the Lemoine Point appraisals. I am informed that the Cataraqui Region Conservation Authority has asked for two appraisals; one was received as late as this morning, and the other is expected very shortly. The Ministry of Government Services has also carried out an appraisal, which is now being analysed by the lands division of my ministry.

Mr. Lewis: A supplementary: I take it that in terms of the psychological move toward Lemoine Point, we may well be on our way to purchasing it finally.

Hon. Mr. Bernier: Time will tell, Mr. Speaker.

Mr. Lewis: We will keep up with the minister.

Mr. Speaker: The hon. member for York Centre.

LOCATION OF SPORTS CENTRE

Mr. Deacon: Mr. Speaker, I have a question of the Minister of Community and Social Services. In choosing a location for the new major sports centre in Bronte Creek Provincial Park, why did the ministry not consider the basic tenets of the Toronto-centred region plan, which were to provide for development east of Toronto? And why would it not have picked a site such as Darlington Provincial Park, east of Oshawa, or some more easterly location, in order to provide more of an incentive for people to move to the east? Why doesn’t the minister be consistent with his government on the principle of redevelopment?

Mr. G. Nixon: Oh, get off it! Sit down!

Interjections by hon. members.

Mr. Deacon: What does the member mean, sit down? My gosh, it’s time the government realized when it’s got a programme it should stick to it. They have no understanding of basic principles.

Mr. Speaker: Order, please. The minister has an answer.

Hon. R. Brunelle (Minister of Community and Social Services): Mr. Speaker, several sites were considered.

Mr. P. J. Yakabuski (Renfrew South): The member’s leader will be really proud of the member for York Centre.

Hon. Mr. Brunelle: One of the reasons that site was considered is because --

Mr. J. Riddell (Huron): That’s more than the member for Renfrew South’s leader can say about him.

Hon. Mr. Brunelle: -- we have in Bronte Provincial Park about 2,000 acres and the centre itself --

Mr. Stokes: We already have a road going through it.

Mr. Riddell: And the same can be said of the member for York North who sits beside him.

Hon. Mr. Brunelle: -- could be constructed within the park boundary or on adjacent land.

Mr. W. Hodgson (York North): The member for Huron is still wet behind the ears!

Mr. Speaker: Order, please.

Hon. Mr. Brunelle: Also, as the hon. member knows, there is very good accessibility to that area by GO Transit bus, as well as automobile.

Mr. Stokes: Sure it is more accessible. The government’s got a highway going through the centre of it.

Mr. Lewis: It’s a very simple proposition. It’s the members for Peel North (Mr. Davis), Halton West (Mr. Kerr) and Halton East (Mr. Snow) versus the members for Oshawa, Northumberland (Mr. Rowe) and Durham (Mr. Carruthers).

Interjections by hon. members.

Mr. Speaker: Order, please.

Hon. Mr. Brunelle: Within a ratio of 70 miles it will serve a population of about half of Ontario -- about four million people will have access to it.

Interjections by hon. members.

Hon. Mr. Brunelle: So, those were the main considerations, but various sites were considered and this was the --

Mr. Deacon: Why weren’t the same considerations used by this government then, in choosing the site for a second airport, if it’s needed?

An hon. member: It is needed.

Mr. Speaker: The hon. member for Port Arthur.

Mr. Deacon: He can’t answer that.

Mr. Stokes: What Toronto wants Toronto gets.

Mr. Speaker: Order, please. The hon. member for Port Arthur has a question.

BURNING OF WILDERNESS CABINS

Mr. J. F. Foulds (Port Arthur): I have a question of the Minister of Natural Resources, Mr. Speaker. In view of the minister’s answer last week to my questions on Thursday and his correction on Friday with regard to the burning of wilderness cabins on Crown lands, can the minister tell me under whose orders his officials were acting on March 13 when they burned the cabin on Circle Lake? Why did they select that particular cabin, when there are some 500 other wilderness cabins in similar situations? Is the minister not aware that the last communication received by Mr. Hobischuck was dated Feb. 14, 1973, from Mr. McGinn, the director of his lands administration branch, and said:

“Having regard to the current standing of mining claim TB 288485, instructions have been issued to the district forester to the effect that further action pursuant to the Public Lands Act respecting the building shall be deferred at this time.”

How many more cabins does this ministry plan to destroy over the next few months? Isn’t it about time the minister stopped this current scorched earth policy with regard to northwestern Ontario wilderness cabins?

Hon. Mr. Bernier: Mr. Speaker, I’m sorry that the hon. member was not in the Legislature when I --

An hon. member: The Minister of Housing can’t build enough houses.

Hon. Mr. Handleman: I never said I could.

Hon. Mr. Bernier: -- corrected my earlier statement.

Mr. Lewis: The minister is burning them down faster than we’re putting them up.

Interjections by hon. members.

Hon. Mr. Bernier: But I would point out to him that --

Mr. Speaker: Order, please. Order, please.

Hon. Mr. Bernier: -- in our efforts to clean up a situation of illegal occupancy of Crown land -- actually breaking of the law -- we must be forceful. We must comply with the rules and the laws of the land as laid down by this Legislature. And we are moving ahead. We’re not selecting any particular cabins to remove.

Mr. Deans: He is just burning them down methodically.

Hon. Mr. Bernier: Our policy is not to burn down cabins, as I pointed out in my earlier statement, but to give the occupant --

Mr. Stokes: Is the minister saying somebody violated the policy?

Hon. Mr. Bernier: -- the illegal owner sufficient notice; and this notice usually stretches over a period of two or three years.

Mr. Lewis: It is a pretty dramatic way of showing authority.

Mr. MacDonald: Sounds like Vietnam.

Hon. Mr. Bernier: We have the authority and they are properly notified. We ask the individual to remove it himself --

Mr. Lewis: Some extraordinary methods, I must say.

Hon. Mr. Bernier: -- and if he will not, then we have no alternative then but to take the actions that we do.

Mr. Cassidy: Do they use napalm?

Mr. Foulds: Supplementary, Mr. Speaker: In this case, the last communication from the ministry indicated that it was not going to proceed under the Public Lands Act Does the minister consider that adequate notice?

Mr. Lewis: Are the tenants out before the cabins are burned?

Hon. Mr. Bernier: I think that if the hon. member will do a little further research, he’ll find that we were in contact on many occasions prior to that particular date and accelerated our programme to improve the situation on Crown lands.

Mr. Foulds: Does the hon. minister improve this action?

Hon. Mr. Bernier: Is the member advocating we should let this go on?

Mr. Speaker: Order, please. The hon. member for Kingston and the Islands.

Interjections by hon. members.

FUNDS FOR CHILDREN’S CLINIC IN KINGSTON

Mr. C. J. S. Apps (Kingston and the Islands): Mr. Speaker, I have a question of the Minister of Health.

Interjections by hon. members.

Mr. Speaker: Order, please.

Interjections by an hon. member.

Mr. Speaker: Order, please. The hon. member for Kingston and the Islands wishes to ask a question.

Mr. Apps: I have a question of the Minister of Health, Mr. Speaker. In view of his statement this morning, does that mean that the Beachgrove clinic for emotionally disturbed children, connected with the Kingston Psychiatric Hospital, will now have sufficient funds to maintain its current service?

Interjection by an hon. member.

Hon. Mr. Miller: Mr. Speaker, without being definitive I would like to look at the budget of that operation and give the hon. member an answer shortly.

Mr. Apps: Supplementary, Mr. Speaker: In view of the fact that there is now a waiting list for young people to get into the clinic, I would appreciate it if the minister would try and make certain that they are covered under this new report.

Mr. MacDonald: The member knows how slow they are; push them.

Hon. Mr. Miller: Mr. Speaker, we are advising psychiatric facilities, and so I would hope and trust that this institution is covered.

Mr. Speaker: The hon. member for Huron.

ASSISTANCE FOR EGG PRODUCERS

Mr. Riddell: Thank you, Mr. Speaker. A question of the Minister of Agriculture and Food. Considering the very critical situation that the egg producers now find themselves in throughout Canada, is the minister rendering any assistance at all to the federal minister to try to resolve the problem, or is he going to implement --

Mr. Yakabuski: That’s a federal matter.

Mr. Lewis: Here we go. This is called a setup.

Interjections by hon. members.

Mr. Riddell: -- or is the minister going to implement a provincial programme whereby he can subsidize the egg producer in Ontario until such time that the market stabilizes itself again?

Mr. Stokes: This is a shell game.

Hon. W. A. Stewart (Minister of Agriculture and Food): I don’t know which shell; that’s the problem.

Mr. Lewis: Does the minister think he can handle this?

Hon. Mr. Stewart: I am not sure. Mr. Speaker, I welcome the question, quite frankly.

Mr. Lewis: Sure he does.

Interjections by hon. members.

Hon. Mr. Stewart: I thought perhaps it might come this morning, after last night’s Globe and Mail headlines.

Mr. MacDonald: I don’t know why the Liberals do it; I know why the Tory backbenchers do it -- because they like it.

Hon. Mr. Stewart: Well, these people understand what I have been doing to help the people of Ontario. The great and unfortunate problem, Mr. Speaker, is --

Interjections by hon. members.

Hon. Mr. Stewart: The great and unfortunate problem, Mr. Speaker, is that my friends over there are so apologetic for the lack of action at Ottawa they are trying to blame us.

The real truth of the matter, Mr. Speaker, is that as early as last September, at that great conference that Prime Minister Trudeau called, or insisted his Minister of Agriculture call, we insisted at that time that there be a stabilization programme put in place for agricultural commodities that would be a realistic stabilization programme.

Mr. E. Sargent (Grey-Bruce): Atta boy.

Hon. Mr. Stewart: Nothing has been done to date, to amend the Stabilization Act at Ottawa. As late as last Thursday -- and I was in Ottawa to discuss this very matter -- I wondered when and if there would be some action taken --

Mr. Sargent: He’s a tiger, all right.

Hon. Mr. Stewart: -- to implement the position that had been taken by the government of Canada; that if and when the egg producers of Canada put their own house in order, they would then look for some assurance that these eggs would not flow in from outside this country to destroy the position in which they put themselves. That action has not been taken.

Now I am hopeful that this very day -- and I was assured last Thursday --

Mr. Sargent: Answer the question.

Hon. Mr. Stewart: I was assured last Thursday --

Mr. Sargent: What is he doing?

Hon. Mr. Stewart: -- that the federal minister would be putting in place some assistance programme we had hoped last Friday; but as late as last night we were given to understand that there would be an announcement made today. Certainly something has to be done, there is no question of that whatever.

Mr. Sargent: What is this government doing?

Hon. Mr. Stewart: We are doing what I believe is in the best interests of this country and that is not to get into the place or position of commodity subsidization by individual provinces. For instance, there is no possible way that we can compete with the Province of Alberta in commodity subsidization of any commodity due to the oil revenues now accruing to that province. It just makes common sense to stay out of it. I am hopeful, Mr. Speaker, that by tonight we will have some action taken that will, in my opinion, stabilize this incredible situation that has been allowed to develop.

Mr. MacDonald: That was one of the better replays of the old scenario.

Mr. Riddell: Supplementary: Is the minister aware that other provinces do come to the aid of their producers -- and I think he well knows -- for both pork production and egg production? Why does this province just sit idly by and allow the farmers to get into a difficult situation? Is there nothing we can do to bail them out for the time being?

Hon. Mr. Stewart: Mr. Speaker, if my hon. friend knew anything at all, he would know that there is no way we can compete with other provinces in this particular aspect.

Mr. H. Worton (Wellington South): We do on everything else.

Mr. Yakabuski: He doesn’t know.

Hon. Mr. Stewart: Unfortunately, he doesn’t seem to realize that the enormous amount of money now flowing into both Saskatchewan and Alberta out of oil revenues that they never had before, is able to put those provinces in the position that they can outbid any other province.

We took the position at Ottawa -- and, incidentally, if the hon. member even knew what his federal minister says, he would know he agrees with the position I’ve taken -- that there should be one stabilization programme across Canada.

Interjections by hon. members.

Hon. Mr. Stewart: I thought that when he was at Sudbury last week, he would have given the members opposite a little history or a little bit of education, but he probably didn’t do that.

Maybe they ought to have another provincial Liberal conference, at which the federal minister could come down and tell them a few of the facts of life, on which he agrees with me. That, to me, means we must have a stabilization programme right across Canada that will be financed by the taxpayers of Canada to stabilize agricultural food production. But if we allow one province to get into the field, another province simply outbids it.

That’s what the tractor parades were all about in 1966. But the hon. member doesn’t remember those kinds of things. That was why we took the position at that time -- and the other provinces agreed completely with our position; the federal government agreed with our position -- that there should be a single stabilization programme.

Mr. Foulds: This is a ministerial statement, Mr. Speaker.

Hon. Mr. Stewart: Now, if the hon. member talks to his friends in Ottawa in the way he wants to perform politically here, he’d get some action at Ottawa -- and that’s where it counts!

Interjections by hon. members.

Mr. Speaker: The member for York South.

Mr. Lewis: They’re all on payroll. Every one of them is on payroll.

Interjections by bon. members.

Mr. Speaker: Order, please. The member for York South has an important question.

Mr. MacDonald: Mr. Speaker, if I could still the troubled waters. Ministers of Agriculture always face the same problem: they’re never backed by their cabinets, including this one.

CREDIT UNIONS’ LENDING RATE

Mr. MacDonald: I have a question of the Minister of Consumer and Commercial Relations with regard to credit union legislation: Now that the increased interest rates have virtually eliminated the margin between what credit unions can borrow money for and the statutory ceiling on their lending rate, is the government giving any consideration to an amendment of the statute?

Hon. Mr. Clement: Mr. Speaker, I received on Monday or Tuesday of this week, I believe, several letters from credit unions pointing out this particular matter. I’m taking a look at it right now. My first priority would appear to be the introduction of the Act, reflecting the recommendations of the select committee report of 1969-1970.

Mr. MacDonald: When is that going to happen?

Hon. Mr. Clement: I will be introducing that bill, hopefully, this spring. I have met with the federation and the league in connection with the legislation, and we might consider the change of interest at that time. I haven’t actively put that on the top of the list, and I didn’t have it drawn to my attention until the other day, but I am aware of the problem. We’re well aware of the prime interest rate now being charged by the banks, particularly the Bank of Canada, which is setting it.

Mr. Speaker: The hon. Minister of Housing has the answer to a question posed yesterday by the leader of the official opposition (Mr. R. F. Nixon). Does his House leader wish the answer to be given now?

Mr. Breithaupt: Yes, Mr. Speaker.

Mr. Speaker: The Minister of Housing.

HOUSING IN OTTAWA AREA

Hon. Mr. Handleman: Thank you, Mr. Speaker. The hon. Leader of the Opposition asked me a question yesterday regarding the amount Ontario Housing Corp. paid for lots in Goulboum township for use under the HOME plan.

I challenged the hon. member’s arithmetic, and I note that instant Hansard has quoted him as saying that OHC had paid up to $25,000 per lot, but I recall very clearly, I think that he said $20,000. I accept that as the figure he mentioned.

The fact of the matter is that OHC purchased 1,500 land units in this development in 1967 at the very advantageous price of $6,000 per single lot, $5,500 per semi-detached lot and $2,500 per townhouse lot. So far, 274 units have been built and leased in the Glencairn subdivision, 46 are nearing construction completion and another 326 units are in the early stages of construction.

These lots are leasing for between $20 and $50 a month, depending on their size and the house style. Single detached houses on the lots have been selling for anywhere from $17,850 to $20,100 and semi-detacheds from $17,350 to $19,550. Townhouse units have not yet been bid on, so I can’t quote any prices on those just now.

The subdivision has been very successful, and its future extensions are expected to carry along with the same success.

Mr. Speaker: The hon. member for Etobicoke.

ALLEGED AIR POLLUTION IN ETOBICOKE

Mr. L. A. Braithwaite (Etobicoke): Mr. Speaker, I have a question of the Minister of the Environment. I want to ask him a question about two companies that operate in north Rexdale. One is known as Continuous Colour Coat Ltd. and the other is known as Canadian Lukens Ltd.

Is the minister aware that over the years, these two companies have continued to pollute the air and the environment of north Etobicoke with impunity? Is the minister aware that his predecessor (Mr. Auld) had promised during his estimates to clear this up? Can the minister state to this House when his ministry will be bringing legal action against Continuous Colour Coat and Canadian Lukens?

Hon. W. Newman: Mr. Speaker, in answer to the hon. member’s question, I can’t give him a complete update at this moment in time, but I’ll get an update and give him a report.

Mr. Braithwaite: Okay.

Mr. Lewis: Update? He will get some input from an update.

Mr. Speaker: Supplementary, the member for Etobicoke.

Mr. Braithwaite: In light of the fact that the health of the residents of that area is continuing to be injured, could the minister expedite this update and let us know in the very near future what his ministry intends to do? And if he should determine that his ministry officials have been neglectful, would the minister state what action he is going to take against his people so that this doesn’t happen again?

Hon. W. Newman: I just said I’ll look into the whole matter.

Mr. Speaker: There are about 30 seconds. We’ll allow a new question by the New Democratic Party. The member for Thunder Bay.

Mr. Stokes: Yes, to the Minister of Natural Resources: Can the Minister of Natural Resources assure the people of Armstrong --

Mr. Sargent: Supplementary, Mr. Speaker --

Mr. Speaker: There wasn’t time for another supplementary. I’ll allow one new question, and that will be the end of the period.

Mr. J. T. Turner (Peterborough): Sit down.

USE OF RESOURCES IN ARMSTRONG AREA

Mr. Stokes: Can the Minister of Natural Resources assure the people of the Armstrong area that his ministry will insist that Domtar use the unused allowable cut to provide some viability by way of a saw-log operation in the Armstrong area?

Hon. Mr. Bernier: Mr. Speaker, I am very much aware of the concern that the member for Thunder Bay has for the community of Armstrong, and I want to assure him that this government shares that concern. I have to say to him that I hope to make a formal statement within the next two weeks concerning Domtar’s position.

I might say that we met with the company as late as yesterday afternoon to discuss that situation and we have formed a committee, under the Provincial Secretary for Resources Development, (Mr. Grossman), which has been working for some considerable time now with all the ministries. The provincial secretary will be making a formal contact with the federal government to find out what they can provide us with to assist in that situation at Armstrong. So, hopefully, within the next few weeks we can say something positive.

Mr. Speaker: Time for oral questions has expired.

Petitions.

Presenting reports.

Motions.

Introduction of bills.

Orders of the day.

Clerk of the House: The 20th order, House in committee of supply.

ESTIMATES, MINISTRY OF ENERGY (CONCLUDED)

Hon. W. D. McKeough (Minister of Energy): Mr. Chairman, if I might clarify something on which I think I confused the issue thoroughly last night. I think the staff have talked to the member for Sandwich-Riverside (Mr. Burr), but I was just told about this. We were talking about the price of heavy water, and I was talking kilogrammes and the member was talking pounds; if you equate the two they are not far off, but there was that confusion, for which I apologize.

On votes 1801 and 1802:

Mr. Chairman: The member for Windsor West.

Mr. E. J. Bounsall (Windsor West): Just finishing off very briefly the topic I was on last night, I’m interested to hear that the Minister of Energy is at least going to consider -- he said maybe in the future -- getting into the problem of having someone in this ministry charged with looking more seriously at new sources of energy and spending some funds for that purpose.

The minister also implied, however, that one of the reasons the programme was not being particularly considered now, or was not active at the moment, was that the Science Council, AECL, the National Research Council and others were into this game and this was part of their problem. Well they aren’t, any of them, very far into this game. I don’t know of any specific National Research Council funds which have been allotted to the development of new energy sources or specifically, of an applied nature, to develop the technology in any specific area.

I would say to the minister that if his ministry was going to consider taking part in the development of even one plant in the tar sands area of Alberta, one is talking in terms of maybe $600 million or $700 million, and maybe approaching $1 billion, to partake in that programme out there, for conventional energy sources. We heard last night that the minister thought the $5 million to $10 million per year that may be required from us to take part in some original research on new energy sources was a figure which he had found a little high.

What I am saying is that the Ministry of Energy in the Province of Ontario is a unique ministry in terms of what the other provinces have. I understand that no other province in Canada has a Ministry of Energy. It has been a sort of appendage to some other ministry, as Hydro was in the past an appendage, re- porting through various other ministers mainly in charge of something else.

Here in Ontario we now have a separate Ministry of Energy and a Minister of Energy, which other provinces do not have. We are an energy-consuming province; and I think it is very incumbent upon Ontario, being an energy-consuming province, at the rate at which we do consume, to partake in development programmes for new sources of energy -- new, unconventional sources of energy. We are uniquely placed in that we have a ministry in which this can be developed, where the sole concern is this problem of energy in general. We are in a different situation than any other province in having a minister and a ministry dealing solely with energy.

I suggest very strongly to this ministry that it spend some small amount of funds in co-operation with the Science Council, AECL or National Research Council or whatever other body is considering the matter in terms of developing a programme to look at new, unconventional to date, sources of energy.

This would be a good expenditure of money and a good investment in the future by the Province of Ontario. Ontario would then own a part of the technology that results from that expenditure of research funds. No matter what it relates to -- the production of hydrogen from water or solar energy or wind energy; for which, in all three cases, the natural resources are either very available in terms of water or there to be harnessed in terms of the other two -- if we developed a technology, this is technology which can be very easily exported and sold to other nations of the world; because all of them, unless they are completely land-locked countries, have the source of that supply.

Just turning quite briefly to another point: The minister is aware of the problems which Ontario Hydro has had in southwestern Ontario with its transmission corridors, particularly the section from Douglas Point down to the Wingham junction. I had a meeting on April 4 with Neil McMurtrie of Hydro. At that meeting I was rather pleased to find that he was very aware of the problems in that area and seemed quite determined to see that they did not happen again. They had realized their errors. They had realized, according to Mr. McMurtrie, that the way in which they had gone about things was very detrimental to those concerned, very disquieting to those concerned, and he seemed to understand the ins and outs of what happened there and that it would not happen again.

In reading the Hydro public participation programme outline, I believe when it is applied in other areas -- and by and large it was applied in the area from Wingham junction down towards the Kitchener-Waterloo area -- that many of those problems we had in the area down to Wingham junction will in fact disappear.

At that one meeting, though, a point was raised, on which Mr. McMurtrie was not clear. He mentioned that one of the options being considered for any farmer across whose land Hydro transmission lines would run would be, he hoped, an option to sell to Ontario Hydro. Ontario Hydro could then lease it out through ARDA or in whatever form it wanted. But one of the options would be the option to sell if Ontario Hydro had to put transmission corridors across that particular farm.

Rather than going down to 85 acres from 100 acres and the farmer finding that difficult to deal with, one of the options offered would be a sale to Hydro, or a Hydro-arranged sale to ARDA and so on. Is this the case? Has this now become Hydro’s policy with respect to transmission corridors across farm lands? Will the farmers have an option to sell as one of the options open to them?

Hon. Mr. McKeough: Hydro is reviewing this at the moment. Certainly there are a variety of approaches. In the past Hydro has either bought the land or taken an easement. There are some other alternatives, which my colleague, the Minister of Agriculture and Food (Mr. Stewart), has concerned himself with. The parliamentary assistant and the former Provincial Secretary for Resources and Development (Mr. Lawrence) and his deputy have advanced several ideas based on the experience in the United Kingdom. As I understand it, the board is taking a look -- and I think this is at the staff level at the moment -- at the possibility of a variation on easements. In the United Kingdom, as Dr. Solandt mentioned in his report as well, they simply lease the tower site and not the land in between -- it would be possible to do both or either -- then apply a yearly rental, which of course would escalate with inflation and changing times and changing value of the property.

In answer to your question, all I can say is that this is under review by Hydro, as compared with the two things which they have normally done. The only qualification 1 would put on it is that I think that if you are starting from A to B, I would suspect they would want to be consistent right from A to B. I don’t think it would make sense, because the first farmer wanted to sell, the second farmer wanted to give an easement and so on, to apply a different principle on the route of that line. Perhaps it would be possible to find out on a particular line what the majority would favour, then proceed on that basis rather than mixing it up. I would suspect that is the direction in which they are going.

Hydro also point out, of course, that as we develop multi-purpose energy and transportation corridors, if they are to be multi-purpose, then ownership should probably vest in the Crown or in the Crown’s agency, rather than simply taking an easement -- and I would agree with that.

Mr. Bounsall: Well further to that, if there is going to be a corridor, in which facilities are provided, I agree that the reasonable thing to do would be to purchase the land. But in some cases where the corridors cut across farm land, can one place the corridors on the back lot line? In some cases they do cut across the farm in such a way that you have acreage separated from the buildings of that farm by a corridor that is presumably fully-owned now by the province, which would make that farm uneconomical.

What I am asking is, could one of the options be that the farmer could sell the entire property to Hydro. Is that one that is being considered?

Hon. Mr. McKeough: Yes, and put in practice.

Mr. Bounsall: Fine. And put in practice? Already? Is that a standard option that is given?

Hon. Mr. McKeough: No, not necessarily, but that is one of the things which has been done, at Arnprior for example. It has been done in other areas as well.

Mr. Bounsall: All right; just one other point, in conclusion, about the line from Wingham junction east. The plans by Ontario Hydro for outright purchase or easement purchase, whatever the case may be along that line, involved the purchase of enough land for three 500 kilovolt lines. That was based on expansion of the nuclear facilities in western Ontario post-1990.

For that particular piece of line from Wingham junction east, at the moment there is only going to be one 500 kv line and one 250, so one doesn’t need to buy the entire width at this moment for three 500 kv lines. In essence, by purchasing easements or outright purchase of that width of line at the moment you are buying 1990 land -- if approval is given for nuclear expansion -- at 1974 prices. I would ask the minister if, in that area, a decision has now been made to do it differently and that you simply purchase enough for the two lines at the moment?

You can maybe have an agreement or an option to purchase the rest for the post-1990 period but not, in fact, purchase that land at the moment. Or if, having taken that option for 1990 uses, it becomes clear that no nuclear expansion is going to take place in the west requiring the additional property, an arrangement could be made whereby that option lapses. Or are you still proceeding to take enough property, enough width to accommodate the three 500 kv lines?

Hon. Mr. McKeough: I believe that is something which was worked out; the member for Huron-Bruce (Mr. Gaunt) had something to do with working this out; and was most helpful as a matter of fact, as I understand it. It was worked out in that particular section between Bruce and Bradley junction. It was complicated by the fact there had been a hearing of necessity but I understand that solution was put in front of the hearing officer. It is my understanding that he agreed with it; whether it has been finalized or just what stage it is in at the moment I’m not sure but I think the simple answer to your question would be yes.

Mr. Bounsall: You’re talking about a different piece of the line than I’m talking about. I’m talking about the one from Wingham junction east. Has that been decided?

Hon. Mr. McKeough: From Wingham junction?

Mr. Bounsall: From Wingham junction east.

Hon. Mr. McKeough: No. I can’t answer that; I’m not sure.

Mr. Bounsall: Okay. The problem there --

Hon. Mr. McKeough: The principle has been accepted. Presumably the principle is a good one and can be applied in areas other than the particular place where there was a hearing.

Mr. Bounsall: Okay. The problem from Wingham junction east is that Hydro planned to take enough property for the three 500 kv lines but it only needs enough for one 500 and one 250 at the moment. The farm community was very upset over the taking of this width of property when it wasn’t needed until 1990 and even then only if approval was given for the nuclear stations.

I would hope that land would not be taken until it is needed, if needed. I see no objection to Hydro building into agreements the fact that it would be able to purchase, at 1990 prices, if its approved, the additional land to put the three lines along. I would certainly stress very strongly to the minister that that land should not be taken at the moment.

Mr. F. A. Burr (Sandwich-Riverside): Mr. Chairman, I suppose the minister hasn’t the figures available but could he get them for me? How many square miles of the province are occupied by tower corridors and how many towers have we in Ontario? What is the current price of a tower and installing a tower?

Hon. Mt. McKeough: We can get that.

Mr. Burr: Thank you.

Mr. Chairman: The member for Sudbury East.

Mr. E. W. Martel (Sudbury East): I have a couple of brief questions, Mr. Chairman, to the minister. I’ve had some correspondence with respect to Hydro in the past couple of years because of the little pockets of housing development it starts. In fact, it becomes virtually impossible for these residents to get Hydro power. It has always bothered me from this point of view that it’s some other agency of the government that originally sells or allows those homes to develop and then Hydro says; “No, there aren’t enough”; or: “if you take extra units, then we might go in.”

It seems to me there’s got to be a solution for that sort of thing, Mr. Chairman: I can well recall in writing the chairman of Hydro, the Premier (Mr. Davis) and the minister’s colleague with respect to eight or 10 houses in the St. Charles area that are within a couple of miles of Hydro either way -- whether it be from Warren or from St. Charles. There is a pocket of houses and the cost to those citizens to get Hydro power is so great it prevents it.

It seems that this ministry has got to move in and ensure that type of random development can no longer occur. The reason I raise it with this minister is that I realize he is responsible or was responsible, for some of the phases of development that went on with respect to unorganized townships when he occupied another ministry; and I think some of them he brought in were at my request in the area I represent. It does cause a hardship. For those which are there, there has also got to be a policy worked out which will provide them with Hydro service. That’s the one point I want to raise.

The second one deals very briefly with gasoline. Has anything come to the minister’s attention with respect to the possibility that gas might rise by as much as 15 cents a gallon in northern Ontario? I have been advised by one retailer that he has been advised by his supplier that gas in the Sudbury area could go as high as 15 cents more a gallon. I’d like some assurance that the amount of increase in the north will not be any greater than it is here in the south.

Hon. Mr. McKeough: Well Mr. Chairman, I haven’t heard that specifically about the Sudbury area. I have heard of some instances here where gasoline for some independents will go up 15 and 16 cents, somebody told me, because their last year’s contract was a very favourable contract and they are starting from a much lower base. But presumably the average will be somewhere around the 8- or 10-cent mark, which has been discussed.

Mr. Martel: Does the minister not have any comment with respect to Hydro and some way of overcoming the fact that there are people in Ontario who are only two or three miles away from Hydro service who will not or cannot, unless they pay large amounts, obtain Hydro power?

Hon. Mr. McKeough: Sure; I will make this comment. I have made it before. They knew that when they built there, or when they bought there. I don’t think it’s up to the power users of the province to subsidize that sort of operation. There is some element of subsidy built into the extension of lines now. But I don’t know that I now, as a power user -- with increasing costs, by the way, and great rate increases -- should be responsible for picking up those people. When they built there was no power available, or when they bought there was no power available. Now if the government in its wisdom sees fit to do this out of the general tax revenues of the province, fine and dandy; but I don’t think that it should come from the power users.

Mr. Martel: I just want to make one point, though, that possibly the minister is right and it should be the government itself that undertakes this; however, the people I represent do subsidize people in Toronto for a GO transit system. They subsidize for transit systems they never make use of. The “subsidy streak” works many ways -- and they are not going to make use of the subway station down here. They are not going to make use of the monorail the government is devising -- and that’s out of general tax revenues. They are going to pay to subsidize that. It seems to me that one of the most basic amenities they need is Hydro power and the government should be moving in to insist that all citizens in this province are entitled to Hydro power as one of the utilities in this province.

Mr. Chairman: The hon. member for Huron.

Mr. J. Riddell (Huron): Mr. Chairman, I would like to turn our attention again to the oil situation, particularly the price of oil, as I am really concerned about the ever-increasing costs to those consumers who certainly cannot afford it. I am concerned also with the plight some of our producers are in at the present time, but that is another matter. I have been reading several articles lately and I have been trying to do some research. I have been trying to separate the wheat from the chaff; so I am going to make a few comments on this oil business. All I ask of the minister is to give me his own personal opinion as to what he thinks after I’m through, and as to what he feels the Ontario government’s position should be in establishing some kind of an energy policy.

If one examines the reasons given by the oil companies for their recent fuel price increases, we can only conclude that these prices are both unjustified and unnecessary. Moreover, it brings to light the fact that the Minister of Energy’s policy of doing nothing with regard to domestic fuel price increases is inexcusable. All justifications given by the oil companies for price increases really support the fact that government must extend its control over prices of domestic fuels. From the recent $2.50 a barrel increase in crude oil. Alberta, Saskatchewan and British Columbia will receive approximately $1.60 a barrel’ for oil produced in each province. Of the remaining 90 cents, the oil companies will net between 60 and 70 cents while the federal government will receive 20 to 30 cents a barrel through additional corporate income tax. The additional 60 to 70 cents a barrel should increase the profits of most oil companies by perhaps 35 to 60 per cent.

Surely the industry’s need of a minimum $500 million in extra revenue annually that it will receive must be questioned. One reason given by the oil companies as an explanation for the price increase is that the new prices would provide incentives for new oil discoveries and development, which are a very expensive operation. However, while the industry is pouring millions into frontier exploration, it most certainly expects and will reap that profit.

A quick look at the industry’s published profits will surely confirm this. Also, there is no reason for the price of found oil to bear the cost of new exploration, unless it can be shown that the industry does not have sufficient capital without it. This, however, has not been shown to be the case; but even if it was, one should logically ascertain the magnitude of the industry’s need and set the domestic price accordingly.

Regarding the oil companies’ response that they must generate, internally, a large proportion of their funds because of the risky nature of their business, the Carter commission argues that the risks involved in petroleum exploration are no greater than the risks encountered in research and development under- taken by firms in other sectors of the economy. Furthermore, it states that by pooling risks through joint ventures, by conducting several ventures simultaneously, by diversifying their operations and by being able to offset costs of unsuccessful ventures against production income, the large established oil companies would be able to minimize the risk considerably. Also they could be financed by other means, such as through new stock or bond issues.

This was the suggestion that was made by, Mr. Fred Lazar I think his name was, who is on the faculty of the economics department at York University. We may even ask whether greater degrees of exploration are desirable at this time. Along these lines the Carter commission states:

“We have been told that there are no insurmountable technical obstacles to the commercial production of oil from the Athabaska tar sands. The principal problem is that, if oil from the tar sands is to be competitive with conventional crude oil, large-scale production facilities are required and these must operate near rated capacity.

“Devoting resources to the search for conventional oil is, or will become, unnecessary. Hence to grant increasingly generous tax concessions to encourage the discovery at higher and higher costs of more conventional oil, when the tar sands crude was available in limitless quantities but could not be exploited because of the limited market, would be perverse.”

The timing of the higher price increases must also be examined. The forecasts submitted to the National Energy Board by both Gulf Oil Canada Ltd. and Imperial Oil Ltd. indicate that conventional sources of crude oil will be sufficient to meet domestic demand until 1980. One can only conclude, then, that these higher prices are not needed now, despite the claims of the oil industry that financial capital requirements for development of tar sands facilities can only be met by higher internally-generated cash flows. The price increase of the oil companies would thus seem to be totally unwarranted and government intervention and regulation is required. The oil companies should thus be made accountable to the consumers in pricing activities through government action.

On the basis of these comments, Mr. Minister, I want to ask you if you feel in your own mind that the $2.50 increase was necessary at this particular time, and considering that current conventional sources of crude oil will be sufficient to meet domestic demand until 1980, do you believe that higher prices are needed now; or would you not agree that a more practical solution would have been to allow the oil companies to increase the prices of crude oil at an annual rate of five to seven per cent until the middle 1980s and then keep it at that level for the remainder of the century?

Oil companies say that higher crude oil prices are the only means available for financing exploration activity. I am wondering if you believe this. Do you believe that increased expenditures on exploration for conventional oil are necessary, given the vast potential of the tar sands and the coal deposits? If you feel that increased expenditures are necessary, do you not think they could be financed in other ways, such as through stock issues or some type of bond issue?

This brings me to my final question: Considering that Ontario accounts for one half of the Canadian consumption of oil produced in western Canada, do you not believe that Ontario should have some say in the pricing activities of oil companies; and would you not agree that the power of the Ontario Energy Board should be expanded to extend its control over prices of fuel for domestic purposes?

I am not sure whether the minister got all those questions or not, Mr. Chairman. I notice he had some other business to attend to, but I did ask a series of questions there and I wondered if maybe he could give me an answer to them?

Hon. Mr. McKeough: Mr. Chairman, I read with a great deal of interest in Tuesday’s Globe the story by Mr. Lazar and I thought there was a considerable amount that would commend itself to the House and to informed readers. Certainly some of the points which were made in that article were exactly the points which we had been making and will continue to make. The member mentioned the Carter Commission, which Lazar mentioned. Good Lord, it was the first time I knew where you were getting your stuff when you mentioned Carter, because it was the first time I had heard Carter mentioned, I think, for at least three years. But Carter made that point and there’s no question the oil companies do finance their activities --

Mr. D. C. MacDonald (York South): Out of the public purse.

Hon. Mr. McKeough: -- with a much higher proportion of equity than other areas of the economy. They go the equity route, the internal generation of funds route, as opposed to the debt route. Carter made the point that this perhaps wasn’t necessary. Somehow or other you would have to turn the industry around altogether, I think. They would all have to do it, start making a change to go to a higher debt-equity ratio. I don’t think one company could do it or I suspect they might find themselves in some trouble in the market or at least that’s what they say and I can appreciate that.

But the fact is that the government of Canada made the decision to disagree with Mr. Carter, and in the white paper they discarded what Carter had said about the resource industries. When the white paper was ultimately legislated in tax reform, they completely disregarded it, so to some extent it is at the moment an academic question, which point seems to have escaped Mr. Lazar, I might say, with some respect to most of what I thought was a rather well written article.

In the broader terms perhaps Mr. Turner, in his budget on Monday night, may come to grips with this problem; and if the excess profits legislation sees the light of day perhaps there’s a place for it there. There is no question that historically the oil industry, to a much greater extent, has financed internally and not from debt sources. For example, the figures in the oil industry are roughly the reverse of what they are in Ontario Hydro, which admittedly is an extreme example the other way. The utilities, for example, are roughly on a 50-50 basis.

The member mentioned the tar sands and how they will be financed. My guess would be that the $6.50 price of oil at this moment will allow the development of the tar sands on an orderly basis, and I would stress orderly. I think that is a point, with respect, which may have escaped Mr. Lazar’s attention.

Even if the tar sands, at a price, are economic and can be brought on, the government of Alberta feels -- and I would concur with this -- and the industry feels that there is a maximum rate at which they can be brought on in terms of a shortage of materials; in terms of the shortage of skilled manpower; in terms of the shortage of engineers. Alberta, I think, has said perhaps one plant every three years; some people would say one plant every two years. Those are 100,000 barrel plants and it’s going to take some years before there is a significant proportion of Canadian consumption coming from the tar sands.

Mr. Goyer, the member’s colleague in Ottawa, made one of the more asinine suggestions which have been made and said: “Let’s build 20 of them and build them with Japanese and German money and give them the oil.” That, as I say, has to be one of the more ridiculous suggestions, in my view, which has been made in some time. I don’t accuse Mr. Lazar of making the same suggestion, but there is a limit as to how fast the tar sands can be brought onstream.

In terms of the pricing activities of the oil companies, the member said we should do something about it. We have absolutely no control over the price allowed at the wellhead -- or which is paid at the wellhead by an oil company -- to the producers in western Canada. That control could be exerted either by Alberta -- I suppose through its marketing legislation -- or more particularly by the government of Canada which we believe, and which has never been denied, does have the power to bring in wellhead price control.

What we have to remember is that if we moved to amend the Act or, as they have done in Nova Scotia, to regulate the price of gasoline or heating oil, we would be regulating a smaller and smaller proportion of the total amount of the price.

This is one of the things which concerns us about the regulation of gas. It used to be that, using a figure of, say about $1.25 per 1,000 cu ft in a household, 20 cents of that was the price at the wellhead, which was completely unregulated; 30 or 40 cents was the transmission charge by TransCanada, which is regulated by the National Energy Board; and the remainder was regulated by the Ontario Energy Board, that is the distribution charge within Ontario and within the particular city.

The 20 cents price paid for gas -- it used to be 10; it is currently on an average, about 24 or 26 -- was unregulated. That price, I suppose, is going to go to 60 or 70 cents very quickly.

There is no way we can regulate that price which is paid to, or demanded I think might be a better term, by the producing company aided and abetted -- not aided and abetted, encouraged might be a better way of putting it -- by the government of Alberta.

If you are looking at the oil companies -- I don’t want to say I am apologizing in any way for the oil companies, because that upsets the member for York South and I don’t want to upset him on Friday morning.

Mr. MacDonald: It doesn’t upset me.

Hon. Mr. McKeough: I think it is generally recognized on oil company profits -- the Minister of Consumer and Commercial Relations (Mr. Clement) made this point this morning -- that one shouldn’t get worked up about quarterly figures. I think, if that is true in any case, its true of the resource industry which, regardless of tax laws and regardless of the equity of tax laws, really has to be looked at, in my view, on a minimum of a 10-year basis.

Somebody gave me figures yesterday -- or it was in a speech from one of the oil companies, I guess the second largest -- which indicated they had made a 6.7 per cent rate of return over the last 10 years. In 1973 it achieved a 10.2 or 10.3 rate of return, which even the member for Scarborough West (Mr. Lewis) indicated this morning was perhaps an acceptable figure. I think, in the first quarter, the rate of return is perhaps 11 or 12 per cent; I’m not sure of that. The profits were up, I don’t know, 88 per cent over the previous year in the first quarter. That’s a nothing comparison, I think, really to be fair about it.

Mr. MacDonald: The minister is making excuses again.

Hon. Mr. McKeough: It is a great headline in the paper but obviously, and I say this with respect, that whether you are talking about food production, whether you are talking about the plumbing business, whether you are talking about the oil business, whether you are talking about the brokerage business, the person who is investing is really not interested in making a fantastic profit in one quarter. He does look at things for a little bit longer period.

In looking at it for a longer period you will find that Imperial Oil, the biggest and the best and the most efficient, have made about 12 per cent rate of return on a deflated base. If you compare that to what an investor would say, he would say they have been making four or five per cent over the period. But they made 12. Gulf I think was 6.7 per cent; Shell was much less than 10 -- and this was over the 10-year period.

Go a step beyond that and the oil companies will say, and I think this was generally recognized by the analysts, that where the money was being made was at the production end. If they were making a 10 per cent rate of return in the industry, for example -- and as I have just said, they were not -- the greatest proportion of that was coming from the production end.

This is one of the reasons why Imperial did better than the others, because Imperial had a better rate of find and had more success over the last seven or eight or nine or 10 years. But it was made at the production end. If anything they broke even at the refinery end and they were losing money or making practically nothing at the dealer end. That was a generally accepted fact and I think it is still true.

Mr. MacDonald: Is there any reason why they shouldn’t be forced out of the dealer business --

Hon. Mr. McKeough: Out of the dealer business? I think many of them would be delighted to get out of it.

Mr. MacDonald: -- the retail end? If they would like to get out --

Hon. Mr. McKeough: They would be delighted to get out of the retail business, I think, in many instances.

Mr. MacDonald: Why?

Hon. Mr. McKeough: Because they have not made the money at that end. One of the companies told me that during 1973 at one point they had 60 per cent of their outlets on consignment -- in other words, on subsidy -- with the outbreak of the gasoline wars during that period of time which continued right up until -- when? -- the spring of 1973. I guess then 1972 would be the year I am referring to, with the 60 per cent on consignment.

I see no reason this is going to change, and if you are talking about getting at the high profits, the profits are being made at the production end. They are not being made or they have not yet been made to date -- at the refinery end or at the dealer end. I frankly don’t think that is going to change. So what the hon. member is talking about -- the most effective price control, if that is what you want to have -- would be at the wellhead on the price paid to the producer, which as I have said, I think we can do very little about here.

Mr. MacDonald: Mr. Chairman, the minister has raised one or two points which I would just like to speak to.

With respect, the minister is still using the companies statistics and they are self-serving. I don’t want to spend a great deal of time arguing the points this morning. Let me give you one example.

The companies have argued that only in about 1964 did they begin to break even in terms of their expenditures as opposed to the profits that they had made, because of their great investment in exploration and development in this country. What they choose to ignore -- I am sorry, let me put a figure on that. It was around $18 billion or $19 billion; they had invested that amount, this was the amount of return they had gotten.

What they chose to ignore is that they meanwhile have $51 billion in proven reserves, which is money in the bank. It has all been accumulated by the kind of tax structure which permitted them in effect to use the public treasury for all of this development.

This is where the case of the hon. member for Huron is on sound ground. I am glad to hear the Liberals taking this ground for a change, but he is on very sound ground.

If the companies, through depreciation allowances, through all of the various kinds of tax concessions they have, have in effect been paying virtually no tax at all and therefore tapping into the public treasury for their development, why should we sit back? And, Mr. Minister, why should you, as the Minister of Energy, be getting up and repeating excuses of these self-serving statistics, instead of saying: “You use public money to develop and now we of the public have an entitlement to look at your excess profits” -- and I’ll use the word “excess” profits -- “and not permit you to milk the public in terms of walking off with the profits when you use the public treasury for the development”? That’s the essence of a broader and the more comprehensive analysis of the situation.

Now I am most intrigued at this suggestion from the minister, that the oil companies would like to get out of the retail business. I am most fascinated, you know. I am always -- forgive me -- I am always a little suspicious about these companies which say they would like to get out of something when they are breaking their neck to stay in and they are devising every new kind of technique to puff up the Chicago-gangster-kind of competitive atmosphere that they have got in that business. They don’t want to get out because they are making some money; and they are cooking the books and the government is accepting their cooking of the books. That’s the kind of thing that’s gone on.

However, the minister has raised an awfully good idea; an awfully good idea. I think that the time has come in the Province of Ontario, when I think of the battle that has been fought in this Legislature for the last 15 years, to give voice to the Ontario Retail Gasoline Association on the state of vassalage to which the average member of that group has been reduced.

They have to do as they are blessed well told or they are kicked out in the most summary kind of fashion. Their life savings may be frittered away. Oil companies will come in and establish, under a new name, another outlet down the street that will undermine a lifetime’s achievement by an operator in building up a clientele in a certain area. When their gasoline sales go down -- because selling at 55 cents they can’t keep their sales up as they compete with the same oil company selling down the street at 50 or 51 or 49 cents, or something of that nature -- then they are tossed out and told they are inefficient. A man suddenly becomes inefficient after he has been with the oil company for 23 years.

I am not talking off the top of my head. I am giving the minister details of a specific constituent of mine.

Now I think the time has come, quite frankly, when by statute we should exclude the oil companies from this area. I am glad to hear the minister say they are losing money. That means they will agree with us, because companies don’t like to lose money. We should exclude them from the retail field and that field should become an area where we can encourage the development of small entrepreneurs, who will be assured they are going to get a gasoline supply if they can’t get it from one of the oil companies.

That is another reason why we should have a national petroleum corporation which will sell it to them on a contract. Let them go ahead and sell gasoline on a discount bar basis if they want, or they can sell it as part and parcel of a package of services at a somewhat higher price.

In other words, we would have genuine private enterprise, genuine free enterprise; instead of the fraud that is paraded today in this area as an example of free enterprise.

So I welcome the information the minister has given us this morning. He has emboldened us to pursue a very clear cut part of the New Democratic Party programme, which will likely be confirmed when we get to our convention in Sudbury. I am glad to see the minister is going to be on our side and we can go out and rescue all of the thousands of gasoline retailers in this province from the kind of economic vassalage they have suffered for many years under the oil companies.

Now that was by way of reaction, Mr. Chairman, to the provocative comments of the minister in his very benign mood this morning.

I did want to raise a matter, which I think clearly comes under vote 1802. I have some other things I want to get back to, but I had assumed they come under the Energy Board on vote 1803. We seem to have lumped all the votes pretty indiscriminately. I don’t suppose it makes that much difference.

But what I did want to raise with the minister is to come back again to this question of the southern route for the line. The government tabled, two or three days ago, the intervention that Ontario is making before the National Energy Board, and I just want to say one word about that.

As far as it goes, fine. At least the government now is going to accept an obligation which I think it should have been exercising 10 or 15 years ago when these oil companies or these pipeline companies operated like 19th century freebooters. There were continuing problems that farmers had had all through southern Ontario because of the arbitrary way in which the companies operated and the rather slipshod manner in which they dug the trenches and put the pipes in. They left stones on the top and the best land down in the bottom of the ditch -- and all the rest of it. I’m still getting letters of complaint from farmers down in Leeds county for Interprovincial action some 10 years ago --

Mr. Chairman: This definitely is dealing with pipelines and transmission lines and definitely should be discussed under vote 1803. Would you mind letting us finish up votes 1801 and 1802? Then you can come back on this.

Mr. MacDonald: What I said, Mr. Chairman, was that I was going to say a brief word about this intervention and commend the government for doing at least a limited amount in protecting the farmers. But I wanted to move on to a policy issue, under vote 1802 --

Mr. Chairman: Let’s get back to the vote.

Mr. MacDonald: -- namely, why this government, stubbornly and in a bloody-minded fashion, sticks to the southern route without using its powerful influence before the National Energy Board to have this matter reviewed. That’s what I want to speak about; that’s policy.

Now let me go back to the rationalization that was given of all the confusion in the cabinet, of conflicting spokesmen on this southern pipeline -- the rationalization that was given by the Provincial Secretary for Resources Development (Mr. Grossman) on March 7.

I want to pick out one sentence just to show you how specious is the stance of the government. After he had spelled out all that could and should be done, he added this: “I might add that we would support the federal government in its ultimate national goal of an all-Canadian pipeline.”

If the government really means that, the minister should be going before the National Energy Board and saying, as he did in his whole approach with regard to the Mackenzie Valley pipeline: “As we understand it now, we support it. But we are keeping flexible. We are keeping our options open, and we may change our mind.”

My argument is that the government should change its mind on the proposition of the southern pipeline before going to the National Energy Board. The reason they should do it is in a sense contained in that sentence. If they really are in favour of an all-Canadian pipeline, let’s face the fact that if we don’t get an all-Canadian pipeline now, we will never have it. There is no real prospect of enough gas or enough oil from western Canada to justify a second pipeline once we have built one in the south.

I was rather interested to hear -- I didn’t see it myself, because I think it was a local telecast -- the observations of Donald S. Macdonald, the federal Minster of Energy, Mines and Resources, in Sudbury this past weekend when he was up at that clambake. Perhaps the hon. member for Huron saw it. But I am told by some of my colleagues who came from the area that Donald S. Macdonald, when interviewed along with the Leader of the Opposition (Mr. R. F. Nixon), stated they were going to delay any further consideration of this all-Canadian pipeline because it may not be ultimately needed if eastern offshore sources of oil come into production.

In other words, even he is now arguing, along with this minister and a lot of other people, that if we produce oil off the east coast, we won’t need to build an all-Canadian pipeline.

Well I’ll tell you, Mr. Chairman, we in the New Democratic Party believe that while it may cost more money, we concede it and argue that that is part of the price of maintaining this nation; it has been a price we have paid from Confederation on, and I think Canadians are willing to pay it. We believe we should be moving to the all-Canadian pipeline now and not dealing in a specious manner by saying that we ultimately will support it, when in fact by building a southern pipeline you are destroying the economic viability of a northern pipeline at any time.

There are one or two other reasons which I think justify it. I think that the crisis is over for the time being. And don’t let the minister get up on his political podium and beat his breast as a patriotic Canadian, saying that he is willing to act in the interests of all the rest of Canada and that we are sort of ignoring those interests. Nonsense. That’s a bit of political garbage. We are just as mindful of those interests too.

If we had done a little bit of planning down through the years, instead of always reacting to crises, we would have been planning for this some time ago. But we got ourselves locked into the southern pipeline -- and I will agree that everybody, including the New Democratic Party for a time, sup- ported the proposition because we thought we genuinely had a crisis. But to a considerable extent the proportions of that crisis have subsided.

I noticed in the paper yesterday that Imperial Oil is going to be taking a great deal more crude oil, through the water routes, down to Montreal. I suggest to you that it would be possible to establish a short-term crash programme to get whatever resources are needed from offshore or western Canada into Montreal to meet the needs there for the next year or so. You can be blessed certain that Quebec and the Maritimes aren’t going to be short -- mainly Quebec, because I think the Maritimes can get enough offshore -- and give us now an opportunity to do what we really want to do; to have a first choice not a second choice, because then the minister himself concedes that the southern route is really a second choice.

So let’s quit kidding ourselves and the public and everybody else that we are in favour of the proposition of ultimately having a line, because you are destroying the economic viability of an all-Canadian line by building the southern line, and if the southern line is the kind of thing that the farmers are still opposed to, I invite the Minister of Agriculture and Food to get up and not be such a panty-waist champion of the farmers, not champion them because it suited his political purposes for a month and then say he got all of the facts and, having got all of the facts now, he is going to accept the decision.

I suggest to the minister that wherever the pipeline is built you should proceed with the kind of stipulations you have in your intervention, that there must be new standards and there must be inspectors and there must be training of those inspectors and they must be on the job all the time so that the companies can’t get away with the freebooting that has characterized their operations in the past.

But in addition to that you should go to Ottawa and say to the National Energy Board: “Conditions have changed. We really are in favour of an all-Canadian pipeline.”

Hon. W. A. Stewart (Minister of Agriculture and Food): Come to think of it, I believe I should --

Mr. MacDonald: Did I hear the Minister of Agriculture and Food say that he should do that?

Hon. Mr. Stewart: No, it had nothing to do with what you are saying, my friend.

Mr. MacDonald: Well it should, that is the problem. When it suits your politics you champion the farmer, when it doesn’t suit your politics and Tory politics dominate, then the farmer gets lost in the shuffle and you are no more of a champion than anybody else. That’s the problem of our Minister of Agriculture and Food, as I interjected this morning; he is a loner, an isolated, impotent individual within the cabinet, because the cabinet really isn’t in favour of farmers and the protection of their interests.

However let me get --

Mr. Chairman: Order, please.

Mr. MacDonald: I knew you were getting worried, Mr. Chairman.

Mr. S. Lewis (Scarborough West): As soon as he said impotent you got nervous, Mr. Chairman.

Mr. MacDonald: I hope I haven’t been so provocative that I cannot get a quiet, rational reply from the minister as to why it isn’t possible for him to adopt that degree of flexibility -- which I will concede he has adopted in a fast changing kind of picture in other aspects of policy -- why he can’t adopt that kind of a stance, or why that kind of a stance can’t be adopted by the Province of Ontario when they go before the NEB. Does the minister really believe, in his lip-service to an ultimate all-Canadian line, that it will ever come if we build the southern one now?

Hon. Mr. McKeough: Mr. Chairman, we dealt with this a week ago last Thursday at some length. I made some unemotional comments at that point. I would suggest the member read them. I have nothing further to add to what I said the other day and, with respect, I don’t think the member has added anything to what he had to say the other day. If we want to go over it again we can.

Mr. MacDonald: Well just a minute now.

Hon. Mr. McKeough: I don’t think, with respect, the member has said anything he didn’t say the other night, and I really have nothing to add to what I said the other night.

Mr. MacDonald: In short, that you don’t think there is any justification for going to Ottawa at least to review the proposition as to whether a northern route, for a variety of reasons, isn’t now feasible rather than being locked into the second best on the southern route?

Hon. Mr. McKeough: We went through this the other night, Mr. Chairman. We can go through it all again if you like.

Mr. MacDonald: What did you do? The other night you said you agreed on the southern route, and you agreed on the southern route because it was done at a time when this nation faced a crisis; and you patted yourself on the back that you were a patriotic Canadian and we were ignoring the interest of Canada. That’s what you did.

Now I’m saying conditions have changed. I know the minister doesn’t want to deal with the issue again. He doesn’t want to take a flexible approach here. He wants to cop out on it, because it is mildly embarrassing. He knows that his Minister of Agriculture and Food would love to get out and champion the farmers once again but he’s been locked in and shut up by the cabinet position.

Mr. Lewis: That is right; muzzled.

Mr. MacDonald: Sure, muzzled. He certainly was speaking a lot when he was unmuzzled. He’s not speaking now, so one concludes he is muzzled.

Mr. Chairman: Order.

Mr. MacDonald: It is simple logic. It is a cabinet decision. However, if the minister is not willing to act as a Minister of Energy and champion the interests of Ontario and the consumers of Ontario, let him concede it. Let him admit it by his persistence in being silent, because no part of this country is going to benefit more from the building of that line than northern Ontario. We have listened to an awful lot of claptrap about this government’s interest in northern Ontario but I’d like to see some indication of its willingness to back up these idle political promises with some reality in terms of policies. Here is a chance for you to do it and apparently you won’t.

Mr. Chairman: No more comment from the minister? If not, the hon. member for York Centre.

Mr. Lewis: May I comment on the same subject for just a moment? May I ask the Minister of Energy, recognizing that you have opted for the southern route and you have put the northern route aside, what think you of the interesting arguments that have been made about that portion of the pipeline which would fall between Sarnia and Toronto and the two existing 20-in. pipes carrying a volume sufficient that, were we to close the contracts with the refineries in Buffalo, we would have enough capacity in those pipes not to have to build anything between Sarnia and Toronto, thereby preventing the disruption of the agricultural land which the Minister of Agriculture and Food and others feel most strongly about?

Hon. Mr. McKeough: I read the member’s remarks, a week or so ago, in London I think it was. We are exporting about 135,000 barrels, going through the line to Buffalo. That will not, of course, be sufficient for eastern Canada even at the minimum amount of 250,000 barrels which is to go through. It will not provide for growth. I point out that in terms of growth we are looking at such things as about 75,000 barrels, hopefully, for the Texaco refinery at Nanticoke, which will replace imported product. We are looking at probably 100,000 barrels a day before we are through, at Wesleyville and Lennox. We are looking at 170,000 barrels a day for Ontario’s needs in terms of the Petrosar project. Simply to cut off the 135,000 which is presently going to Buffalo doesn’t really accomplish that much.

The member also talked about surplus in the line. The surplus capacity exists when there is a movement by ship but it can’t be counted on. That is the point I was making.

Mr. Lewis: That is really quite interesting because you have already used figures which my arithmetic tells me add up to 345,000 barrels a day for specific Ontario use and you haven’t included the Oakville refineries which are expected to increase their consumption of barrels per day over the next little while. What will be left in this line for eastern Canada now that you describe all of the additional that Ontario will use?

Hon. Mr. McKeough: No, it is what will be left -- the subtraction of what is going to Buffalo won’t achieve very much; that is the point I am making.

Mr. Lewis: Will the new line achieve it with its capacity? I hadn’t realized Ontario intended to take quite so much of the capacity which even the new line has.

Hon. Mr. McKeough: The potential of the new line for Lennox and Wesleyville exists; it is not there at the moment. That is the only part of it which would come off the new line. What is already coming to Ontario is going to have to be added to, plus what will go through on the new line. We are confusing lines there.

Mr. Lewis: You are saying that if we moved the existing pipes to capacity, plus what might go to Lennox from the new line, we would cover our needs and those of eastern Canada as well, but that it is still necessary and the present 20-in. pipes which we are now using cannot handle both. This is what you are saying? I am sorry; I am putting that badly. Even if we cut off what we export to Buffalo, we could not possibly handle it because of the increased requirements for Lennox, etc.?

Hon. Mr. McKeough: Yes.

Mr. Lewis: I must admit I had not realized that.

Hon. Mr. McKeough: I will give you a breakdown of those figures. I have them very roughly, but I will give you a breakdown.

Mr. Lewis: The figures I used were put together by the federal New Democrats and were largely used by Cyril Symes in the Soo when he was making a case for a northern route as opposed to the southern route and was trying to raise some of the questions about the viability of the southern route. Now I know the figures used were legitimate; in fact, I see them confirmed. I must admit I hadn’t recognized the increased demand in barrels per day that you are talking of, over and above the existing pipes. If you do have a breakdown of that, I would appreciate it.

Hon. Mr. McKeough: I will get it worked up for you.

Mr. Lewis: Thank you.

Mr. Chairman: The member for York Centre.

Mr. D. M. Deacon (York Centre): In connection with the construction of Hydro transmission lines, going back to that subject --

Hon. Mr. McKeough: I beg your pardon?

Mr. Deacon: In connection with the construction of Hydro transmission lines, one thing which came out of the Solandt hearings was that in North America the types of tower we are using and the capacity of the lines are substantially less than those that are being used in Europe where the available land on which these lines can be constructed is much more restricted.

Would the minister tell us what has been the experience in Europe under weather conditions there with regard to failure of the lines due to collapse of towers under the conditions of stress because of storms and that sort of problem? Has the failure rate been any worse than that experienced in North America with the type of towers and transmission lines under which we operate? Could the minister tell me if there has been a worse experience over there with their lines, which apparently have a much greater capacity?

Hon. Mr. McKeough: I simply don t know. We can get that information.

Mr. Deacon: I would appreciate that. It seems to me that we have to think of ourselves in southern Ontario as living under conditions similar to Europe. And because there is so much more intensive development of our province necessary, in this area we should think in terms of developing towers that would resist breakdowns to the same degree at least as they do in Europe. My understanding is that in Europe they have not suffered any more from severance of service due to storms than we have; and I don’t think the weather conditions are much different.

Mr. Chairman: Shall votes 1801 and 1802 carry?

Votes 1801 and 1802 agreed to.

On vote 1803:

Mr. Chairman: The hon. member for Huron.

Mr. Riddell: Mr. Chairman, in connection with this vote on the Energy Board, once again the people of Ontario are facing increasing costs, according to the news yesterday of Ontario Hydro submitting its application to the Minister of Energy for an increase in wholesale power rates for 1975. The new rates would mean an increase of about 15 per cent to municipal utilities, which buy in bulk from Ontario Hydro, and for large industrial users served directly by Ontario Hydro an increase of about 16 per cent is proposed for 1975. They haven’t indicated as yet what the rate will be for some 680,000 rural customers who receive power directly from Ontario Hydro, but there is no question those rates will increase as well.

My question is, owing to the fact that Ontario Hydro is a Crown corporation and that you as Minister of Energy are one of the representatives in this House elected to serve in the best interests of the people of Ontario, are you going to present a brief to the Ontario Energy Board to oppose this rather excessive increase?

I say it is excessive, although I am prepared to admit that costs have gone up. There is no question about that. The cost of labour, the cost of equipment and the cost of fuel have all gone up. But I am not prepared to admit that the costs have gone up so much as to warrant a 15 per cent increase.

I would just wonder if you were prepared to present a brief to the Energy Board to oppose this increase?

Hon. Mr. McKeough: No, Mr. Chairman. That’s not the function of the Ministry of Energy. The Ontario Energy Board reports through me to this Legislature. It would hardly do for my ministry to be appearing before an emanation or an adjunct of our ministry. Certainly what the Ontario Energy Board is going to try to determine is whether that 15 per cent is correct or whether it should be 14 or 13 or 10 or 18. I suppose it’s conceivable they may say that in their best judgement Hydro is on the low side. I don’t think we should preclude that.

To do that, they will have whatever resources they need and that they can marshal in the time that is available, including anything that we can provide them from our ministry, and anything that can be provided from Treasury, Economics and Intergovernmental Affairs and any other ministry of the government. But, essentially, they run the review themselves and will come to their own conclusion. We are not competent to do it. One of the historic problems has been that there hasn’t been, within government anywhere, the competence to determine whether Hydro was right or not. I have no inclination to say that Hydro was not right in their pricing policies over the years; but there was no competence -- perhaps there was one person within government -- to assess the validity of Hydro’s rate increases from time to time. And that’s precisely what we are trying to build up now in the Energy Board. It’s a bit of an uneven struggle because there are 22,000 people at Ontario Hydro and there are -- what? -- 29 at the Ontario Energy Board. But right will win.

Mr. Riddell: Then I am to assume that Ontario Hydro will certainly be presenting their picture in front of the Energy Board, and I would imagine they will do this very capably. But then who is going to present the picture from the standpoint of the consumer?

I mean, there are always two sides to everything and the Energy Board, as I understand it, are completely neutral. They are to listen to the briefs that are presented and try to determine whether the rates are justified. But we all know that Hydro will do a tremendous job of trying to justify these rate increases.

I’m just wondering, Mr. Minister, is Hydro now operating at full capacity?

Hon. Mr. McKeough: Do you mean today -- or on a daily --

Mr. Riddell: Yes, at the present time.

Hon. Mr. McKeough: I suspect they are. They may have some of the coal-fired plants down from time to time for environmental reasons, but certainly if you’re looking at the last year, with the success of Pickering, with no problems at Douglas Point, with no problems really of a mechanical nature at any of the generating stations, water-powered or coal-fired. Hydro operated at a very high rate throughout the past year. High water levels were another factor which allowed for the production of perhaps more water-power electricity than would be normal in the past 12 months.

I haven’t asked, but I assume the first quarter of this year is roughly on the same basis, that there have been no problems. I think one of the units at Pickering is to come down later this year to be repaired, but as far as I know, that’s just normal maintenance.

Yes, they are at their theoretical capacity.

Mr. Riddell: Is Ontario Hydro then producing more electricity than is used here?

Hon. Mr. McKeough: Yes.

Mr. Riddell: So we’re exporting about what percentage?

Hon. Mr. McKeough: At a peak, if you net out for the whole year, I would imagine that the export figure might have, last year, run to perhaps 10 per cent of the total. I don’t think it was that high -- it was 10 per cent? Let’s say 10. It varies. At some periods in the year -- even last year -- we are importing; at other time of the year we were exporting a great deal. What the hon. member is coming at is a matter which has been in front of the

Energy Board and on which they have not yet given a decision. It is a matter on which the Energy Board spent more than a few days and to which Mr. Macaulay, in his closing testimony, devoted a great deal of time and attention.

What the member is getting at, and this is one of the matters that I specifically referred to the Energy Board for review, is the whole question of a reserve margin. Hydro is not authorized to build, nor have they ever built, to produce one megawatt of power for export purposes. In terms of present policy, that is not what Hydro is constituted to do.

What Hydro does say, as does every other utility, is that we have to build more than we need in case anything goes wrong. That is known as the reserve margin. The present reserve margin of Hydro is about 21 or 22 per cent. The North American standard, which nobody has achieved but which Hydro would like to head for, is 27 per cent. It is really 127 per cent of what you need. As the units get bigger there is some argument that the reserve margin should go up.

From a lay point of view, there are not many of us who can afford to build 127 per cent of what we need. But if a unit goes out, if we have low water, if there was a breakdown at Pickering, then that is what the 27 per cent, or 22 per cent, or whatever the figure is, is used for; so there aren’t any disruptions.

I said everything was working well last year. We brought Pickering onstream in record time and with 84 per cent capacity factor during the year, which is very high; with high water, and essentially with American pull and Americans who wanted the electricity, we were able to export a considerable amount of that difference between 100 and 122 because everything was working well.

Another year, if we run into low water or a coal strike and a breakdown at Pickering, we will need every bit of that power for our own use. We could be importers again. I don’t see that happening in the foreseeable future but it could happen.

Now what has been referred to the Energy Board for discussion, and on which representations have been made on by a number of groups, and what Mr. Macaulay questioned vigorously, is the adequacy of that 27 per cent or 22 per cent or what that figure should be. Some people think we can take more of a chance and it can be less than 27 or less than 22. This is worked out on probability tables to a possibility of a brownout every 10 years or every 50 years, that sort of thing.

That is one of the things, a large thing really, but one of the things to which the Energy Board is directing its time, its attention, its consultants’ time and staff in their hearings. It is important, because really the generation programme flows from that; and from the generation programme flows the financial position of Hydro and from the financial position flows the rate structure.

Now it is not going to be all wrapped up in a nice, neat little bundle because the Energy Board says -- and Hydro and the government agree -- that we can get along with 21 per cent reserve margin forever. I just picked that figure out of the air. It is not as simple as that, but it is a very keen component. Much of the criticism of Hydro’s exports from time to time comes from a non-appreciation of the fact that there is a reserve margin, that the reserve margin is healthy, and that all has been going well and therefore we have been in a position to export more in the last three or four years. That was when the turn around was. Before that, quite often in some years, we imported more.

Mr. Riddell: Am I correct in assuming, Mr. Minister, that the $15 billion expansion programme is an expenditure which Hydro feels has to be applied in order to meet the future demands of our own people? In other words, it is not being used to generate a lot more electricity so we can export that much more into the United States?

Hon. Mr. McKeough: No.

Mr. Riddell: Well I am glad to hear that, because I don’t think that our own Ontario consumers should be paying for a programme that is designed to generate electricity in order to export to the United States, and I can understand that we probably do need this reserve margin to which you are referring.

Now in this information sheet that I picked up yesterday, the one that was sent to the press, it states here:

“In its Feb. 28 written submission related to the Energy Board’s review of Hydro’s financial policies and objectives. Hydro presented three alternative financial programmes but later indicated its preference for continuation of the 1974 financial programme.”

I am wondering if the minister could just briefly outline what the three alternative programmes were and what this programme is that Hydro have settled on?

Hon. Mr. McKeough: No, I really couldn’t. It’s in a book this big and a backup book about that big, and that’s what was put in front of the board. It’s enormously complicated. That’s been the problem, I think, which we finally faced up to last year in asking the Energy Board to review this. We used to review Hydro’s options at the standing committee in the morning and we had no more idea of what we were doing than flying to the moon.

Mr. Lewis: In fact flying to the moon might have been easier.

Hon. Mr. McKeough: It might have been easier, yes.

Mr. E. R. Good (Waterloo North): Not with that report.

Hon. Mr. McKeough: But the three options were a variation, really, in terms of a return on equity, maintaining the debt-equity ratio, and of improving the debt-equity ratio. These were just various tests of what they were trying to prove.

They made a start last year, really, and determined last year -- Hydro did this -- to set their rates so that the existing debt-equity ratio would not worsen. And this was one of the options they would have this year, either to improve on it, and many people would think they should -- the OMEA, for example, at one point wanted to wipe out the whole debt. That’s an over-simplification, but what they are doing is holding the present debt-equity ratio; at least that’s what they are proposing to do in the option which they accepted.

Mr. Riddell: One final point and then I will turn it over to somebody else.

A statement that came out in the paper, which Mr. Macaulay was alleged to have made -- he maintained that he was taken out of context, but I can’t believe that he was taken that much out of context when he said that it was impudent for anybody to question him about the hourly rate or the amount of money that he made up to the present time. And then he went on to say that it was impudent for anyone to question him about anything.

I am wondering, if this is the case? Owing to the fact that he is counsel for the Energy Board, can he not be questioned by members of the Legislature; or have we actually witnessed the second coming?

Hon. Mr. McKeough: I have not seen the clippings. I have not got around to reading last Saturday’s Toronto Star. I expect to this weekend.

I think we are talking about a bit of a tempest in a teapot. I understand there were retractions, there were criticisms. I think it’s a tempest in a teapot, quite frankly.

As I stated here last night, the important part is not what Mr. Macaulay is being paid but the work he is doing. As I indicated last night, as far as I am concerned he is earning every penny of it, if not more.

Mr. Riddell: I am not questioning the ability of Mr. Macaulay, but I still think that as long as he is performing a service for the Ontario government he can be questioned by members of the Legislature.

Mr. Chairman: Thank you.

Mr. Lewis: Mr. Chairman, I suspect Mr. Macaulay’s irritated response related more to the source of the questions than to their authenticity.

Hon. Mr. McKeough: I can understand that.

An hon. member: Isn’t that blasphemy?

Hon. Mr. McKeough: It doesn’t bother me.

Mr. Lewis: Not any more; lessons having been learned, one relapses into somnambulance.

I wonder, Mr. Chairman, whether I could ask the minister this. It’s just inconceivable to me that Ontario Hydro can possibly increase the rates to the extent that they indicate they would wish to, without some kind of consumer outcry, without some kind of tremendous public response. My arithmetic capacities are very limited, but as I work it out what Hydro is asking for in the area of municipal utilities -- and for that matter probably the rural customers -- they are asking for an increase of 100 per cent in five years.

If one takes approximately 15 per cent a year and simply multiplies it cumulatively, it works out very close to 100 per cent over five years. How can we possibly have a doubling of Hydro rates in five years in the Province of Ontario? It is just inconceivable. There are too many people on fixed income; too many rural customers; too many who are too vulnerable. Well that seems to me to introduce matters of very profound economic policy on the part of the government.

It is the Ontario Energy Board that should -- let me try to put it another way. On the face of it -- whether one is looking at debt-equity ratios; or whether one is looking at the contingency rate stabilization fund; whether one is looking at increased costs -- on the face of it, it might be possible to say that the increase should be 15 per cent a year for five years; but doesn’t that raise major matters of economic policy which are governmental rather than those of the Energy Board?

For example: Over what extended period of time might the debenturing take place in order to relieve people now and in the next few years from the inordinate costs which Hydro is asking?

Is the Ontario Energy Board going to took at it in that context, or does the minister at some point kind of intrude himself into the argument and say: “While on the face of this one could argue for doubling Hydro rates in five years; that is socially intolerable in Ontario. We can’t do that and therefore we are going to work out a new method by which Hydro is financed over a protracted period of time so that we can somehow amortize it rather less brutally for individual consumers.”

When does all this take place? For Hydro simply baldly to put out this kind of release is to invite very great public antagonism.

That will grow. That will grow as the first 15 per cent rate is applied. Can the minister talk a little about it?

Hon. Mr. McKeough: Well, remember the whole rate-setting structure and the financing of Hydro, was examined in really great depth by Task Force Hydro. It left a number of unanswered questions; again which is why we wanted the Energy Board to review some of these questions.

Where do we interject or where do we start to become involved? Well obviously we are concerned with that kind of a rate increase, and particularly over a five-year period. It is staggering. Obviously we are going to have our talks when we see what the Energy Board has to say, from a social and broad economic picture rather than from an individual situation.

The other place will be as and when Hydro completes or when the Energy Board completes, its report on the phase 2 study. Phase 1 was the generation programme and phase 2 is the financial policies on the basis of which the rates are being developed. It is going to be probably two or three months before that phase 2 report is done. Phase 1 is going to take some time to come out.

I think we will want to take a look at that. Hydro undoubtedly will want to take a look at that. If the Energy Board disagrees, for example, with some of what the underlying policy is, or if the Energy Board says that one of the generating stations in phase 1 is not necessary in the period, then that changes the end figure which is worked out to 15 per cent to the utilities.

So it is not time yet -- because we haven’t got enough in front of us. But I think there is a point where we have to look at what the Energy Board has said. And Lord knows the last thing to be looking at, I suspect, is the fact that you can’t tinker with the amortization period much further. I think many would say that Hydro was amortized about as long as it can be.

What is even more worrisome, at this moment in time, very worrisome, is the cost of money in terms of what they have to spend in the next few years; and not only the cost but the availability of long-term money. Hydro’s whole financing programme over the years, or practically all of it, has been built on 30 and 40-year debentures. I don’t know where, today, you can sell -- unless you pay a big price -- where you are going to sell a 25-year debenture.

If it is going to be short-term, that really is all the more reason why they should be paying more as they go, instead of putting it on the debenture load. It is worrisome.

I guess I am not giving the member a very good answer to his question, but I agree that there are social and economic problems that can be created, even if this rate increase makes complete sense as far as Hydro is concerned, and is the minimum, let’s say, that can be done to maintain Hydro’s viability. There is obviously a broader social question with which the government may well have to concern itself.

Mr. Lewis: Well I appreciate your reply. You used the term “staggering”; obviously it is true. I said it was inconceivable; obviously that is wrong. It probably is conceivable and it may well happen, but it won’t happen without rebellion in the streets, using a slightly hyperbolic phrase.

So when do we in the Legislature get a chance to have debate on, reflections about or participate in the kinds of basic economic considerations that you are talking about? I appreciate your willingness to raise these things, but isn’t it time now to begin to examine publicly the extraordinary alternatives which must present themselves?

I listened very carefully to the minister, and this is what I heard -- you tell me if I am wrong. I heard the minister tell me that Hydro’s rate increase applications would mean a staggering increase -- to use your word -- over the five-year period, if they occur. All right. That is No. 1.

No. 2: We both concede that at 15 per cent a year, Hydro rates in Ontario will double over a five-year period. Well I just can’t get over that, and I didn’t realize it until I did some multiplication.

Hon. Mr. McKeough: Let me just interject one thing. This is not a red herring. I am not sure of the breakdown between the Hydro costs and the municipal costs, the distribution costs. What we are talking about as far as you and I as consumers are concerned, if we are in a utility, may not necessarily reflect in a doubling of the cost. The cost of power may increase -- and I don’t want to put in this red herring, but it is a little like the price of gas at the well-head going up three times; that doesn’t mean our gas bills are going to go up three times.

As a matter of fact, I believe I saw this morning that it worked out to probably 10 or 12 per cent. It may be more than that; it may be 20 per cent. But it isn’t 300 per cent. We should guard what we are both saying in that context, but it is not nearly as valid as it is in the case of gas.

Mr. Lewis: Yes, I would have thought that, because when Hydro says the new rates would mean increases of about 15 per cent for 1975 to municipal utilities, who buy in bulk from Ontario Hydro, and in turn supply the majority of Ontario’s 2.5 million users, then there may be some marginal discount, but the figures are more likely to be approximate in this case than the red herring which you so neatly interjected and eschewed.

Having dealt with that, let’s come back to the other matter. You are also agreeing that the social implications are again really quite frightening. They are impossible to consider in the case of fixed-income groups, impossible to consider in the case of low-income groups, impossible to consider in the case of rural users, who also welcome Ontario Hydro transmission corridors through their lands and Arnprior dams flooding their lands. The generosity of Ontario Hydro to the rural community knows no limits; it hasn’t even set the rates for 680,000 rural users.

You are entering into a period of such crisis proportions around the cost of Hydro to the consumers of Ontario that it seems to me that you must introduce a defence. All right, the minister says, phase 1 was the major building programme of Hydro, before the Ontario Energy Board. In phase 2 are the financial implications. We are going to look at all that and see whether the rate increases requested by Hydro work out properly. Perhaps they are going to cut out one of the generating programmes.

Everything blurs in my mind but I spent part of Wednesday afternoon at Nanticoke and I was absolutely overcome. That place dwarfs humankind to the extent that it is difficult to recover after you have spent an hour or two in the premises. I imagine that Hydro was so infatuated with the possibilities for colossus after colossus across Ontario that there will be no way of containing the future development programme. It is irresistible -- it is like airports; you just develop a fixation and they grow.

I suspect that the generating programme won’t be diminished. I suspect further that the financial examination by Bob Macaulay or anyone else will show that whether it’s 14 or 18, it’s approximate.

So then what happens? What I think happens is that the government of Ontario steps in and steps in now. The Minister of Energy says: “Just a second. We cannot tolerate a 100 per cent increase in rates in five years so the basic economic policy underlying Hydro will now be re-examined.”

You put before the Legislature the cost of long-term borrowing which Hydro has engaged in over the last few years and is expected over the next few years and we take a look at the implications of that. You put to the Legislature the problems of debenturing over a longer period or the amortization factor and why you think we have reached the limits. You put to the Legislature the whole question of the contingency rate stabilization fund and whether it can be used as a way of delimiting rate increases.

You put to the Legislature, in effect, a number of serious policy decisions in the financial and economic areas of Hydro. You don’t just allow the disaster to overtake you. There are some things in this world which must be contained by simple common sense.

To what extent the state subsidizes hydro-electric power -- which is, I agree, another possibility -- or to what extent you deal with it in a different economic way, this is the time to do it.

Hydro does none of this. Hydro puts out a press release that says: “We have submitted our application to the Minister of Energy for an increase in wholesale power rates for 1975.” It doesn’t occur to Hydro to say this is going to cause enormous problems for the consumers of Ontario. Hydro never says anything of that kind. Hydro simply announces rate increase application and all of the economic decisions which underlie it are not even broached.

I have put this to you and to others in terms of gas and oil. We have put it to you and others in terms of food prices. We have put it to you in terms of automobile insurance. Who protects the consumers of Ontario? Where is the protection? Why don’t you, the day this kind of a release comes out, stand in the Legislature and say: “It is intolerable to double rates in five years and therefore we, as a government, are now examining the very rationale of the economic and financial decisions of Hydro over the next period of time.”

The Ontario Energy Board simply assesses the application and decides whether it is right or wrong. The Ontario Energy Board is not empowered to alter the major economic policy surrounding Hydro. That is not the use of the Ontario Energy Board now. That is not how you envisage it. They are subjecting Hydro to a scrupulous examination of its programme. That is why I wasn’t as willing to jump at Bob Macaulay as others were, because this is the first time in a long time this has happened. And some, including my colleagues, tell me he’s doing a pretty good job.

I will tell you, for $1,000 a day I would do a pretty good job for you, too. I would prefer to be a labour arbitrator, but I would be happy to be paid at roughly those levels. I have no other expertise.

The Ontario Energy Board is simply dissecting what it has in front of it. It is not making basic social and economic policy; and that is where you have to intrude yourself -- right now, at this point in time -- because you have a crisis in Hydro rates which boggle the mind.

Doubling the price in five years? Not even food prices, not even energy or oil and gasoline, prices are verging on that kind of disproportionate effect on the consumer.

Surely it isn’t simply a matter of vagaries. It isn’t simply a matter of reassurances. It isn’t even a matter of red herrings or diversion. It’s a matter of your saying: “I’ll make a statement on economic and financial policy, as it relates to Hydro, about what we as a government would like to see reappraised and what we will set in motion to protect the consumers of the province.”

I think that should be done now and I think it should precede what the Ontario Energy Board is doing. You can be affected by their findings and influenced by their findings, but you have to give some guarantee that you know what the devil is going on, because this is called providing power at cost. This is a Crown corporation. This is the public interest; and Hydro is still running as though it was a freebooting, entrepreneurial venture. They don’t understand the public responsibility; and if they don’t then you must.

The Ontario Energy Board is but a kind of sounding board at the moment, without the powers which abide only in government. So I ask you for that kind of debate at some point, that kind of statement at some point, and that kind of assurance at some point. In fact, I would ask you to stand and say that the doubling of rates in five years implicit in this announcement will not occur and that you, as Minister of Energy for however many months more, will not allow it to occur.

Hon. Mr. McKeough: Mr. Chairman, I thank the member for his thoughts. There are several things that need to be pointed out. To begin with, the announcement says annual increases of 10 to 15 per cent are anticipated.

Mr. Lewis: Well?

Hon. Mr. McKeough: Do you want to strike it off at 12.5 then, as an average?

Mr. Lewis: I wouldn’t saw it off at 12.5. You know what happens to those predictions.

Hon. Mr. McKeough: I don’t think anybody knows at this moment.

Mr. Lewis: I would go above 15.

Hon. Mr. McKeough: I don’t think anybody knows at this moment, nor can in a period of obviously changing prices and inflation. I think we have to put this in context. At the present rate, we have an annual rate of inflation approaching 11 per cent. On that basis, I suppose Hydro is four per cent over.

What they do point out in their release, and correctly so, is that the price of coal has increased something like 36 per cent. We are all aware of what has happened to the price of oil, which is in their projection. For a variety of reasons, the next couple of plants which come on stream will be fossil fuel plants, namely the rest of Nanticoke and Lennox. Some of the units of Bruce will come in, and Wesleyville comes on reasonably soon. So you have an increase in the use of high-cost fuels for the next few years, but that will level off.

Obviously what should be happening -- and I am sure that this is something that the board will look at and perhaps Hydro are doing -- is that the prices of fuels should be averaged and not depend on whether a Lennox comes on stream this year and a Pickering, which has no fuel costs, comes on stream the next year. Surely there’s a way of averaging that out and taking out some of those peaks and valleys.

I don’t disagree with what the member has said, but before the government jumps, and before I jump to the conclusion that ruin is about to approach the province because of this increase --

Mr. Lewis: Not ruin, just a great deal of cost to the consumer.

Hon. Mr. McKeough: Well very close to it. As the member got a little bit more worked up, we were really getting a pretty calamitous speech.

Mr. Lewis: No, it is calamitous for the consumers.

Hon. Mr. McKeough: You went beyond staggering and right into calamity I thought, as you got a little bit more worked up.

Mr. Lewis: Well, if I can’t use words any more extravagant than yours, why am I over here? As you used staggering, you forced me.

Hon. Mr. McKeough: I thought as we were getting closer to lunch the member was getting more eloquent. I will put it that way.

At any rate, before I would come to all the conclusions that the member came to in his eloquence, I would want to know the facts. I think this is why we have to have the Energy Board report and various reports and why we want their view.

At the same time, obviously, the government is giving consideration, not just to the effect of this rate increase but to the increases of inflation. As you know, we have done some things.

We were asked here what about the civil service salaries. That’s something, as I think the Chairman of the Management Board (Mr. Winkler) said, we have under consideration.

If we are going to be ravaged by the ravages of inflation, then that’s part of a much larger package. Before we come to a conclusion on Hydro, we certainly want to know the facts. That’s what the Energy Board has been asked to bring out and give us their views and recommendations on, remembering of course that these rate increases are not effective until Jan. 1, 1975, if they were all passed through at the same time. None of them will happen before then.

Mr. Lewis: I understand.

Hon. Mr. McKeough: So we do have some time to consider it calmly and dispassionately, and in due course have our lunch.

Mr. Chairman: The hon. member for Rainy River.

Mr. T. P. Reid (Rainy River): Mr. Chairman, we are all in a very reasonable mood this morning, so I’d just like to maybe get off Hydro for a moment -- unless someone wants to continue that -- and ask the minister if he can give us some more information on the recent arbitration award in Alberta, I believe, in regard to natural gas? The Premier has been quoted in today’s paper, indicating that could mean --

Hon. Mr. McKeough: I think while the member was out --

Mr. Reid: We covered that?

Hon. Mr. McKeough: I think while the member was out we passed the first two votes, and we are on the board now. If you could find some way, I’ll give you an answer.

Mr. Reid: Well, I thought that --

Mr. J. R. Breithaupt (Kitchener): Why don’t you give that one answer?

Mr. Reid: It could be one of your usual --

Hon. Mr. McKeough: I just didn’t want to set a precedent.

Mr. Reid: Well if I may, I am talking about the Ontario Energy Board, because I want to know what --

Mr. Chairman: That covers rates for the sale, transmission, distribution and storage of natural gas, as it says in the programme description.

Mr. Lewis: Oh, yes, he is right. It was a place of impishness.

Mr. Reid: Thank you, Mr. Chairman, I appreciate that. Now that that problem has been solved, I wonder if the minister could indicate the effect of the Alberta award. The Premier was quoted as saying it would cost the Ontario consumer perhaps $100 increase in the next year for those using natural gas.

How does the arbitration award affect the Ontario Energy Board? Do they have any control over this supposed increase of $100? Where does the Ontario Energy Board come in on it?

Hon. Mr. McKeough: Not $100. I am not sure what the Premier said, but I think that if the price does escalate as of Nov. 1, 1975, to the 73 cents awarded by the arbitration board across the board, then probably it would average about $70 per household in Ontario. There are a couple of other things that are happening -- transmission charges being raised, and so on -- which might raise that from $70 to $80.

What does the Energy Board have to do with the 60-cent price or the 73-cent price? Really nothing, really nothing.

Mr. Reid: No control over that at all?

Hon. Mr. McKeough: No, the cost of gas really isn’t part of the board’s responsibility. In other words, when the board looks at the figures of Consumers’ Gas, the cost of gas is fixed and there really isn’t much they can do about it. They can look at every other figure and see if they are too high or low, but they can’t control that 60 cents, nor can I. The only people who can do that are either the federal government or the Alberta government. This was an arbitration which may or may not be completely legal and we are taking a look at that aspect.

But essentially that part of the setting of a gas price in Chatham or Toronto or Rainy River is really beyond the control of the Ontario Energy Board and it is really at this moment in the political arena, I think, rather than in the regulatory arena.

Mr. Lewis: Mr. Chairman, if I may return to Hydro for a moment, can the minister indicate what underlies the tremendous, disparity in rates which are paid by different communities for the kilowatts they use? I am really taken aback by the extent to which it is true.

Let me quote some figures to you since they are really quite interesting, and I’d like to show you what has happened. In 1969, if you were using 60 kwh per month, it would cost $1.48 in Kenora and $3 in Peterborough, for a differential of 202 per cent in the costs. If you were using 100 kwh per month, it would cost you $1.89 in Fort William and $3.60 in Nepean township, for a differential of 190 per cent. If you were using 300 kwh per month it would cost you $3.36 in Ottawa and $7.40 in Nepean township, for a difference of 220 per cent. If you were using 1,000 kwh per month it would cost you $6.86 in Ottawa and $13.95 in Sandwich West, for a differential of 203 per cent.

Now, as I understand it, there was to be a systematic effort from that day to this to remove those enormous disparities by taking a close look at some of the individual utilities and see what was in their bank accounts or what other cost factors there might be, and to level them out. Yet I find that as of

1972-1973, if you’re using 100 kwh per month, in Sault Ste. Marie you’re paying $2.37, in Whitby $4.50, for a differential of --

Hon. Mr. McKeough: You should never have used the Soo.

Mr. Lewis: I shouldn’t have used the Soo? Why?

Hon. Mr. McKeough: It’s the most efficient utility in the province. It’s privately owned.

Mr. Lewis: Well, fine. Privately owned? Well, you know, a privately owned facility --

Mr. MacDonald: You betray your prejudice and you undermine my faith as a protector of Hydro.

Interjection by an hon. member.

Mr. Lewis: I don’t mind you betraying your prejudice. Of course, you’re a private enterpriser.

Hon. Mr. McKeough: I don’t really follow in the tradition of that.

Mr. M. Cassidy (Ottawa Centre): You’re just a freebooter, that’s all.

Mr. Lewis: It says something about the way in which Ontario Hydro functions. I know you’re not a red Tory. I was once under that misapprehension, but I’ve learned better. You’re just a sophisticated yahoo! But that doesn’t mean that one doesn’t enjoy your presence in the House -- I didn’t even finish my comparison.

In Whitby it would cost $4.50, and the differential is 190 per cent. For 250 kwh in Cornwall it is $4.55. and in Gloucester it’s $8.40, a difference of 185 per cent. For 500 kwh in Ottawa it’s $6.60, again in Gloucester $10.65, a difference of 161 per cent. For 1,000 kwh a month in Ottawa it is $10.10, in Sandwich it’s $16.23, for a difference of 160 per cent.

It seems to me that the disparities are diminishing in the sense that there are fewer at a level of 190 per cent and over than there were. They’re now 160 per pent and over. But, again, is there a matter of policy which can correct this? Is there some process? After all, we all pay for Hydro; it is a Crown corporation. One assumes that one could level it out across the province, as one tries to do in other programmes.

Maybe your private sector view of the world just is too much of a prohibition to allow you to deal with a public corporation in the public interest. Maybe that’s the problem. I don’t know whether the retirement of

George Gathercole and the change of the board will alter attitudes, but what can be done about this? I admit to you, off the bat, I don’t know.

Hon. Mr. McKeough: Well, we’ll look at those figures. But in nearly every comparison, other than the Soo, which is a private utility -- Cornwall too, I guess; wasn’t that one on the list? -- but at any rate, you’re looking at new and old communities. That’s not the only reason. The cost of power across the province is essentially the same as provided by Ontario Hydro to those utilities. But the internal workings of those utilities may be either more or less efficient -- but that’s not really what we’re talking about here -- and it depends on how much of their local plant they have paid for.

If you want a comparison, Toronto Hydro’s rates are less than they are in Scarborough because Toronto has paid for so much over the years, whereas I suppose Scarborough is just beginning to pay in their debenture debt for the cost of all the extensions of power. Now, that’s the basic reason.

Also, over the years they have built up “an equity in Hydro,” on which they were getting a return. Obviously the city of Toronto would be getting $1 million, I believe, while a lot of those little ones you mentioned wouldn’t be getting anything. Task Force Hydro recommended that that should be done away with. The OMEA have agreed, and the board have now agreed, and it will be phased out over a six-year period. So it’s going to take some time to level those things out.

But I think we’d better take a look at some of those other figures, and perhaps give you a better answer than I’ve given you.

Mr. Lewis: Okay, is the ministry at liberty to say, or has he announced the last appointment to the board of Hydro?

Hon. Mr. McKeough: I haven’t seen a press release on it, but the Premier announced it to the Federation of Labour on Wednesday.

Mr. Lewis: So it can now be made public?

Hon. Mr. McKeough: I believe it is Mr. William Dodge, yes.

Mr. Lewis: William Dodge, almost formerly of the Canadian Labour Congress, but he has about two weeks to go; yes.

Mr. MacDonald: Constitutionally another 60 days before he steps out of office.

Mr. Lewis: Well, then, the votes will be 11-2 on almost every issue rather than 11-1. It will make a model distinction on the board.

Mr. MacDonald: Mr. Chairman, as I look at the clock I note that 1 o’clock is approaching and there are two or three matters I want to deal with as expeditiously as possible, and they are all on the Energy Board.

May I first make a brief comment on the board itself? When I think of the ludicrous charade that we went through for years in this Legislature with Hydro coming before the standing committee on government commissions with a 45-minute speech that brainwashed us all -- and then we were given the privilege of asking questions for half an hour -- it was really absurd.

Therefore, I must say that my reaction to the operations of the Energy Board by way of an improvement over that facade is perhaps overly generous. I have noted the kind of reaction of the odd citizen who felt that the administrative procedures of the board were keeping citizens from an opportunity to be there and present their views. I have noted the rather sharp criticisms that have been made by Pollution Probe of the board’s operations, and more particularly of Robert Macaulay’s operations. But it still is a vast improvement; and I just want to make this one point.

Review boards of prices in public utilities are a very, very necessary operation. But in Canada, when I think of the operation of the board at the federal level vis-a-vis barrel and freight rates and things of that nature, they too were a farce. They are paper tigers. They really don’t delve into the situation in the kind of fashion that is necessary.

When you have a few little people with the municipalities of the country passing the hat and collecting $5,000 or $50,000 to cope with Bell, which spends a million dollars with its battery of lawyers, accountants and everything else, it was an uneven contest from the word go.

Therefore, the point I want to make is that it seems to me the board has got to be not just a passive board; but it has to be a vigorously aggressive, active board in terms of not just examining, but sharply questioning.

Now, I know that this is the approach of the board -- theoretically this is the approach of our board. This is the role of Robert Macaulay. But some people are arguing -- and I haven’t had the opportunity to attend and come to my own conclusions -- some people are arguing that all Bob Macaulay is doing is forcing Hydro to explain their position. He is not really challenging their position. There is a difference. It may be subtle, but it is really fundamental.

It is that kind of thing that is done, ironically, by some of the public utility review boards in the United States, that last bastion of capitalism. At least they are consistent. When they are dealing with the free enterpriser who is going to gouge the market and cut the corners and break the rules as much as possible, they really zero in.

I have cited many times the instance in California where they zeroed in on one of Bell’s subsidiaries and said that they had breached their allowable level of profits by three-eighths of one per cent and they had to cut it back -- and even ordered them to reimburse their consumers; though that was reversed in the higher court. But it is that kind of vigorous approach we need.

I just say in the presence of the chairman of the board and others that I think this is the role, if it is going to do its job, that the Ontario Energy Board should play.

If it is true that Robert Macaulay is only asking for explanations, and not rigorously challenging the expansion programme of Hydro, or its financing or whatever, then I hope we can get into that. Maybe if he does, maybe if it is done, then it will ease the kind of problem that my leader has just been raising with regard to the government’s obligation to come in and take a look at the social and economic factors in it.

Now let me move from that rather quickly -- and I don’t know what real purpose there is -- but I am going to come back to it again. I was really taken aback with the minister’s reaction to my proposal in the leadoff that the power should be extended to the Energy Board to have a review and rollback role on prices in the petroleum field. As I read the record, all the minister said was that he was viewed in Calgary with some interest and conceivably approval, but he was awaiting the appeal to the courts. Well, what is he procrastinating for in awaiting the appeal to the courts in Nova Scotia? The appeal to the courts is idle. We know that the province has jurisdiction in this field.

I have the feeling that the minister has about 100 excuses that he is going to resort to in succession. And indeed, when the first hundred is over he will have another 50, because his determination is to do nothing. This is what I want to get at.

I mean, the minister tells them out in Calgary that there has been a great backlash at the proposition of the increase in consumer prices in Ontario because of the jump from $4 to $6.50 for a barrel of crude. He tells them out in Calgary that there has been a backlash stronger than he would have expected, and then goes on to point out his being impressed with the rollback capacities of the Nova Scotia legislation, and he points out the fact that the Imperial Oil company has said, “We charge whatever the market will bear” and says this is no longer an acceptable philosophy. In fact, he then adds:

“That is the industry’s problem, that the spillover effect of public opinion calling for, demanding government action, can only be ignored by government at the politician’s peril.”

Well, Mr. Minister, you are a politician and you have admitted that you are in a bit of peril. I would think you would be logical, not only in terms of the reaction to this traditional philosophy of Imperial Oil and the free-enterprise sector, but of your obligation to protect the consumer. I mean, what are you waiting for in bringing in an amendment and extending the powers to the Ontario Energy Board so they can take a look at it?

You see, interestingly enough in the speech in Calgary, the minister said:

“I suspect the backlash arises more from the two or three cents extra that the companies are going to rip off beyond the seven or eight cents that presumably they are entitled to because of the in- creased ... ”

Hon. Mr. McKeough: I didn’t say rip off.

Mr. MacDonald: No, I am just giving your words the kind of meaning that you intended but which you couldn’t, because of your inhibitions, say. That is your problem.

Interjections by hon. members.

Mr. MacDonald: However, let me not interrupt myself.

The main problem was the two or three-cent ripoff and surely the minister will agree that there is an obligation on somebody, and surely he will acknowledge that the Energy Board is the appropriate body to examine that extra two or three cents.

In fact, I have been rather fascinated. Shell has said they are not going to do it. Something funny is happening in the coterie at the moment. Shell has said they are not going to do it. I am not aware that any of the other companies are following Shell’s suit on this issue. Isn’t that all the more reason why there should be an examination of it? If Shell is going to forego this extra two or three cents, why then should Imperial Oil and Gulf and Sunoco and all the rest of them be taking it?

But you know, Mr. Minister, I go one step further. I don’t accept the proposition that seven cents is justified -- or your rather cavalier adding of one more cent to it; it is only another $43 million or whatever it is; saying that eight cents is justified when you were speaking in Calgary. I am not certain that that is the case. I am not going to take time to bother the minister with telling him the profit levels of the oil companies because he immediately comes into a counter-offensive and explains why the profit levels aren’t very high.

Hon. Mr. McKeough: It really is not under this vote either.

Mr. MacDonald: He is not making excuses for the companies -- heaven forbid that he should be making excuses for the companies -- but every second time he speaks he is rationalizing their alleged high profit levels, that they are defensible, that you have got to take them on the whole year’s basis, and that you have got to remember all the hardships that they have had.

Well, I point out, as I did a moment ago in reacting to his position in this connection, that the oil companies have developed because they were operating out of the public purse to a very great extent. They were paying no taxes when everybody else had to pay taxes and therefore the public purse is being used for this development purpose.

I submit that the Energy Board should now have the power to examine these “excess profits” and to roll back the prices so that they will disappear. Because, Mr. Minister, surely you -- even you -- will concede that if the oil companies had been making this rather impressive increase in profit, whether calculated on a quarterly basis or an annual basis, when the barrel of crude was selling at $4 and now it is up to $6.50 or $6.70, what do you think the profits are going to be a year or so from now? They are obviously going to be even more indefensible.

So my question to the minister is why? What is the reason for your delay in bringing in an amendment to give it to the Ontario Energy Board? I’d like an answer to that before I come to my final point.

Hon. Mr. McKeough: Mr. Chairman, I’ve given this answer before. This doesn’t come under this vote, by the way; it obviously doesn’t. It is not the policy of the government as to what goes to the board and what doesn’t go to the board and how the board’s Act will be legislated. But I’ll give the answer again -- it has been given by my leader on half a dozen occasions -- we think it is better done nationally than it is provincially.

Mr. MacDonald: Oh, no.

Hon. Mr. McKeough: The member got awfully upset -- no, he didn’t; that’s wrong -- with the remarks of the Minister of Agriculture and Food this morning --

Mr. MacDonald: No.

Hon. Mr. McKeough: -- in terms of nationally subsidizing things, food commodities.

Mr. Lewis: The minister was quite right this morning.

Hon. Mr. McKeough: It is the same thing.

Mr. MacDonald: We agree with him. We always agree when he is right.

Mr. Lewis: We always agree when he answers the Liberals.

Hon. Mr. McKeough: It is exactly the same principle as here.

Our other great reason is we want to be convinced, insofar as we can be, that if something is developed it works; that it will work and that it will stand up and that we don’t simply legislate something for the sake of legislating something or arrange hearings for the sake of having hearings. We are still learning -- this is not a justification -- we are still obviously learning a great deal about the Hydro hearings and about how we examine Hydro. It’s taken us nearly a year to gear up to this first phase and the member and the member’s leader have made some valid criticisms of the point we’ve arrived at and I would agree.

I think Probe’s criticism was somewhat unfair. I won’t go into the reasons why I think it was unfair -- it doesn’t matter -- but I would simply say, in conjunction with Hydro, we are not satisfied and won’t be, I suppose, for some time that we’ve reached a perfect state of affairs as far as an examination either of Hydro rates or of gas rates is concerned. I said in a speech the other night in Oshawa that I’m giving some consideration -- I haven’t even discussed this with the board -- to the idea they may want to hold some hearings in the province before they start a Hydro rate review to simply give the guy off the street you talked about a chance to come and sound off and to make notes of what the concerns are.

There is also the question on which I’ve built up a file over a period of over a year now and which I haven’t resolved in my own mind but which is touched on -- that is, the positioning of the board and whether it should be in this ministry at all. A corollary to that is whether the counsel for example, should be, in the Attorney General’s office or in the Ministry of Consumer and Commercial Relations. Those are things which I can only tell you we are looking at. There is the whole question of outside counsel; obviously, even at a reduced rate, we can’t go on using outside counsel forever, or at least, not to the extent that we have. Those are things which we are considering in conjunction with Hydro and which we have before us.

Mr. MacDonald: Let me react very briefly. Those are excuses 102 and 103 and there are another 900 more; obviously you are not going to do it.

However, let me indicate rather quickly why you’ve got to move. I was fascinated to read a clipping to the effect that the minister a year or so ago --

Mr. Chairman: I’d like to remind the member for York South he has about half a minute left.

Mr. MacDonald: Right; now you’ve taken 10 seconds of my half-minute. Otherwise I’d have been almost finished.

Mr. Reid: You just took another 10 seconds.

Mr. J. M. Turner (Peterborough): You just took another six seconds.

Mr. MacDonald: On Sept. 6, 1973, the minister indicated that perhaps the government should subsidize the extension of the western oil pipeline to Montreal; that it might be justified in the national interests. I happen to have a research bulletin from one of the downtown investment companies, Geoffrion, Robert and Gelinas Ltd. Let me read you one paragraph of one of the bulletins they put out with regard to International Pipeline Co.

They are talking about two factors which are going to contribute to the future financial well-being of the company and the second factor is this:

“The tariff charged by IPL will be so small in relation to the asking price of foreign substitutes that it appears certain that the company will be allowed to maintain its traditionally high return on equity without the threat of drastic tariff cuts feared in some quarters. In fact, maintenance of IPL’s customary levels of return is one of the conditions of the company’s construction of the Montreal pipeline.”

In other words, they’ve had high levels of return.

Hon. Mr. McKeough: Sure.

Mr. MacDonald: They demanded that they will retain them and they have used the excuse that the cost of oil is so high now that our high level of return really gets lost in the shuffle and is relatively meaningless. And this, presumably, is the basis upon which they were given the contract, that all of this might be maintained. I suggest to you, Mr. Chairman, this is just another of the kind of thing that an energy board should be zeroing in on in a serious way and examining,

Hon. Mr. McKeough: Mr. Chairman, ours is not a national energy board and the inter-provincial pipeline is regulated as a federal undertaking, not by a provincial board. The hon. member knows that.

Mr. MacDonald: Touché. The minister has something of a point, if the federal board will really be doing it. But since it is going to be servicing the consumers of Ontario, whether you do it or the Energy Board does it, in protecting that, what I am looking for, Mr. Minister, is somebody who might champion the consumers and I have lost faith that you will give it.

Mr. Lewis: We can’t get it from anyone over there.

Mr. Chairman: Does vote 1803 carry?

Vote 1803 agreed to.

Mr. Chairman: This completes the estimates of the Ministry of Energy.

Mr. J. F. Foulds (Port Arthur): Mr. Chairman, before the committee rises and reports, I would beg your indulgence to introduce to you a group of 110 students and nine adults from St. Lucius Separate School of the great riding of Port Arthur. They are in both galleries.

Hon. Mr. McKeough moves that the committee rise and report.

Motion agreed to.

The House resumed; Mr. Speaker in the chair.

Mr. Chairman: Mr. Speaker, the committee bf supply begs leave to report a certain resolution and asks for leave to sit again.

Report agreed to.

Hon. W. D. McKeough (Minister of Energy): Mr. Speaker, I don’t think there are any announcements, and I understand the order of business is as it was laid out last night.

Hon. Mr. McKeough moves the adjournment of the House.

Motion agreed to.

The House adjourned at 1:05 o’clock, p.m.