Legislative Assembly of Ontario

The House resumed at 8 o’clock, p.m.

ESTIMATES, MINISTRY OF TREASURY, ECONOMICS AND INTERGOVERNMENTAL AFFAIRS (CONTINUED)

On vote 1001:

Mr. Chairman: The first speaker I have on item 1 is the hon. member for Ottawa Centre (Mr. Cassidy). The next speaker is the hon. member for Cochrane South (Mr. Ferrier). Is it agreed that item 1 carry? The hon. member for Lakeshore.

Mr. P. D. Lawlor (Lakeshore): Simply in prolongation of the issue in order to abide more portentous voices, perhaps, in the House, I would like to bring two things to the attention of the minister. Number one is his position on debt financing. Now in this intimate little chamber, where only two or three of us are clandestine gathered together, they say when that happens the spirit lights on us and enlightens all our minds.

Years ago, I gave the Treasurer a little book by Heilbroner. Now Heilbroner is not a socialist, he is perhaps one of the better brains in economics in the United States. He continues to write; and on the theory that concerns your department, the theory of governmental financing; and he pooh-poohed and, I thought laid to rest, in a very salient way the whole theory of debt financing and the threat.

Now I think you Tories are moving toward what my colleague talked about at the question period today, namely balanced budget financing. It’s a hoary chestnut, isn’t it? It’s always a Republican, and I hope not a Conservative; because you seem to be advanced in social thinking over against that particular type of predilection, over against the Republican Party of the United States.

I just simply put it to you, having given you that particular text long before you became the minister -- and such a sultanate as you are, portentous, something out of Babylon; all the minarets, in the dead middle of the night sort of thing, here you are sitting there, now the minister, formerly a mere lecturer of economics.

Mr. Chairman: Item 1.

Mr. Lawlor: Well, I thought I would like to build it to a crescendo, where the thing would have crepusculating effects.

In any event, the theory there was that debt financing was probably necessary to the maintenance of an economy in the democratic system and within capitalistic concepts themselves as a way of picking up the failure in the private sector to do enough purchasing; and for the consumer sector to do enough purchasing, it was always the government that acted as the fulcrum that would pick up that difference.

Now if it picked up too much, there would be a very tricky position that would be inflationary, that would send the economy into something of a tailspin. But if it didn’t pick up enough you would go the other way. And you’ve got the neat little task of balancing in there somewhere as to the potential expenditure over against the productivity of this province; to estimate that, and to pick up the difference in order to maintain full productivity. That way, your tax revenues will more than make up for any expenditure the other way, on the debt financing field.

I think you are aware of all these things, and yet this niggling intransigence, this tendency towards taking the equilibrium position mindlessly is in the bloodstream at the present time, and I for one want to say a word against it.

Ipso facto, there is nothing against debt financing and there is nothing of a medallion to be pinned on your chest by the mere fact that you reduce it. The problem is, are you balancing the economy in such a way as to maintain full production and to keep the economy afloat? Debt financing may require that. The circumstances have, for the last five years, been that way. It could swing the other way and would go into a taxation freeze-up; where you would have the guts, I trust, to tax, to surtax and otherwise, innumerable individuals making over certain sums of money to take away additional purchasing power, which also is inflationary. In balancing these two objectives you’ve got a tricky task, which of course in all its integrity requires all kinds of fortitude and skill from an economist in this particular area. One watches you, stands back from a great height and says: “I wonder if the poor devil will measure up? He’s made so many blunders in the past that one more would probably put this province pretty well on the skids.”

So numerous responsibilities rest on your shoulders. To make those nostrum statements, those shibboleths’ that emanate out of Tory mouths so easily, particularly in economic matters, is neither here nor there.

We haven’t talked to you about regional government and about regional problems, and I am particularly concerned about the Niagara Escarpment. It comes to my ears by circumvallating forces whirling around in some kind of void that you are under enormous pressure at this particular time from all kinds of sources -- from developers, from those who have industrial interests in that region, particularly from the resources people along the escarpment -- to terminate your policy, make inroads on it and possibly even to abandon it.

Mr. Chairman: I must remind the member for Lakeshore that that’s matter for vote 1006.

Mr. Lawlor: Well, I sat here all afternoon and listened to every other subject under the sun. I felt maybe a little ambit might be -- what do you propose?

Mr. Chairman: There is an opportunity under vote 1006 to cover all this ground.

Mr. Lawlor: But Mr. Chairman, you must recognize that I may not be here at that time.

Mr. Chairman: It is in item 4 of vote 1006.

Mr. Lawlor: In favour of your baptism of fire, and since you are so virginal in the chair, I won’t press the matter.

Mr. M. Cassidy (Ottawa Centre): Oh no. It is a general matter that can be raised now, Mr. Chairman, I am sure.

Mr. Chairman: Are you sure?

Mr. Lawlor: Well, I am willing to abide by that particular approach.

Mr. Cassidy: Of course it is.

Hon. J. White (Treasurer, Minister of Intergovernmental Affairs): Well let’s deal with these matters separately, they being so different in nature. I am in full agreement with the theory you’ve expressed. But there must be a couple of conditions attached. In 1964 there was a series of seminars at Western which were attended by the very best economists in North America, including Paul Samuelson, Harry Johnson and others.

Mr. Cassidy: You really glory in those days, don’t you?

Hon. Mr. White: The graduate students at that time had the opportunity of talking to these people by appointment during their three-day visit. I saw every one or these great economists and I put the question to them. “In what way is a provincial government different from a household?”

Each said: “In no way”. So Heilbroner’s remark and your own proposition really do relate to the government of a nation-state with a central bank which can use its own debt-creating capacity.

I think we have a supplementary role. We should attune ourselves to federal fiscal policy, we having no monetary policy. This we have tried to do. I have sought the advice of the federal Minister of Finance in so far as general direction is concerned, and we have tried to buttress federal endeavours.

Quite frankly, we are overtaxing right now, because we are in the inflationary part of the cycle. That’s the reason we are taking in more money than we are paying out. I think it’s entirely appropriate.

I hope the people here, long after I’m gone, don’t continue to deceive themselves about the nature of these accrued liabilities. And I hope they realize the essence, which I pointed to this afternoon, well expressed in recent weeks in the Wall Street Journal.

What you’ve got to look at economically is cash in and cash out. We are taking in more cash than we are putting out, just as some months or years from now when the economy is underemployed we must take in less cash than we put out.

Now this is the tragedy of the ignorance of the Leader of the Opposition.

Mr. R. F. Nixon (Leader of the Opposition): You mean it is really not an $848 million deficit? That in fact you are making money? You think you are making money?

Hon. Mr. White: Not right now, because of course all of his biases and all of his mistakes buttress our present position, funnily enough.

Mr. R. F. Nixon: You keep reading the Wall Street Journal.

Mr. J. E. Stokes (Thunder Bay): And Fortune magazine.

Hon. Mr. White: But they will be a very grave mistake if they are extended into the next downturn in the economy.

Mr. Lawlor: Mr. Chairman, provided you remain under the present inflationary pressures before deflationary trends really set in deeply -- which they are going to do, and I’m quite sure of that -- if you increase that surplus and don’t go for the balanced concept, then I’m all in your favour; and I think it should be increased in this particular regard.

Mr. R. F. Nixon: I would quite like to get into this discussion.

Hon. Mr. White: No, just a minute. We’re having an interesting exchange. You can bring in your irrelevancies later.

I do believe when we look into 1975-1976 --

Mr. R. F. Nixon: He is your boy; you can live with him.

Hon. Mr. White: -- and anticipate a real growth of three per cent instead of four per cent plus, and an unemployment rate of 4.5 per cent instead of four per cent minus, that we shouldn’t attempt to take in more money than we put out.

My thought is that at the moment we should attempt to balance cash in and cash out, although it may be that two or three months from now it will be necessary to take in less cash than we put out. It may be that the account is going to need that kind of supplementary impetus from the provincial level of government.

I did a very simple calculation -- as a matter of fact it’s almost foolishness -- but I’m going to say that I compute that we here in Ontario have about eight per cent of the total public economic power in Canada.

Mr. Lawlor: How much again?

Mr. R. F. Nixon: Eight per cent.

Hon. Mr. White: I think we have about eight per cent. Let me take a moment, as a matter of curiosity. Let’s assume that fiscal and monetary powers are equally effective.

Mr. Lawlor: Monetary power is not very effective.

Hon. Mr. White: You run through your arithmetic. I say it’s almost foolishness.

Mr. Lawlor: All right, I will accept that for the moment.

Hon. Mr. White: Let’s assume that the federal government has half of the fiscal power, while having all of the monetary power. That leaves the provinces with about 25 per cent of the total fiscal power, of which Ontario has one-third. So we have about eight per cent of the clout, I do believe. Nonetheless --

Mr. Lawlor: That’s too quantitative.

Hon. Mr. White: Well, you use your numbers.

Mr. Lawlor: You’ve got a lot more percentage than that.

Hon. Mr. White: Amuse yourself.

Mr. Stokes: You’re right. In the initial instance it was a bit foolish.

Hon. Mr. White: We have to utilize our fiscal power, whether it be five, 10 or 15 per cent, to supplement the federal government’s endeavours to maintain full employment of our resources; and this we have endeavoured to do. In the last couple of years, in the inflationary period, we were wise, I do believe, to take in more money than we spent. And I think probably in the next couple of years we should be spending more money than we take in.

Mr. Lawlor: Let me drop a caveat just for one moment, and we will be finished with this thing. I am disappointed in your provincialism, in your small-mindedness in this regard of the provincial economy. You didn’t consult Hellyer. We could go on with this game for a while, but I’m saying to you that --

Mr. R. F. Nixon: Drop a name.

Mr. Lawlor: -- to take the position that a provincial economy of the magnitude and impact of this one leaving the qualitative terms in, of the impact of this economy -- you often plume yourselves upon the almost determinate effect on the history of this country you will have and the direction we’re going to go economically in any number of other portfolios.

Mr. Cassidy: That’s a different speech.

Mr. Lawlor: Why are you such a shrinking pigeon on this particular one? It really bemuses me; but leave it aside. You are not in the position of a domestic household economy. If you think that particular way, then you’re thinking too narrowly.

Mr. R. F. Nixon: The two pigeons are on the same roost.

Mr. Lawlor: The impact of your economic policy vis-à-vis -- sure you try to work in with fiscal policies of the federal government; and then you just as often try to work against them. They scream at you year after year on this particular thing.

Sometimes you’re right by the way, curiously enough, over against the nebuluginide concepts up there. Sometimes those things balance out and sometimes you give the economy of this country an impetus rather than a slip.

But to pretend that you’re in the position of a little housewife meting out her dollars in dracmas and measuring them very carefully is just damn nonsense.

As the minister of finance for this province, may God please, you admit that deficit financing is not an evil in itself, that it has a plenary and beneficial power to maintain an economy in motion. This is well accepted. It’s Keynes. It’s been around a long time. I thought you were abrogating that, but you reaffirmed it again tonight. Thinking in those terms is fine. You are thinking in really financial, fiscal, monetary policy. But to revert to the kitchen sink, that’s beyond me and below you.

Hon. Mr. White: Mr. Chairman, I promised myself some years ago I would never argue economics with a lawyer, and I made a mistake tonight in breaking my own promise to myself. You are completely misinterpreting my remarks. What I am saying is that a province is not a nation and hasn’t got a central bank. So what is borrowed, some time must be repaid; unlike a national government which repays its debts on occasion by printing money.

Mr. Lawlor: The only thing you can’t do is print money.

Hon. Mr. White: I’m not comparing the $8.5 billion budget of this province with my wife’s budget of about $50 a week.

Mr. Lawlor: There you are again.

Mr. Stokes: Scrooge.

Mr. Cassidy: Gee. Better tell her about women’s rights.

Hon. Mr. White: That is not the point. I have acknowledged that I accept the contracyclical budgeting theories set forth by Heilbroner and I suppose most everybody else; and we ourselves are determined to play a role. We have taken in more money than we’ve spent in the last couple of years for very deliberate reasons; that’s no accident. We are going to have to put out more money than we spent in the next period of time as the cycle comes down into a recessionary phase.

Mr. Lawlor: As your estimates show.

Mr. Chairman: The member for Brant.

Mr. R. F. Nixon: It is interesting, Mr. Chairman, to hear these two members, the former colleagues on the White committee who shared many a bottle of Liebfraumilch while they were discussing these monetary factors; monetary federally and fiscal provincially. It really is amazing how they end up as pigeons on the same roost.

Interjection by an hon. member.

Mr. R. F. Nixon: Yes, that’s true. Both of them calling upon their erudition in economics, as well as the law, to approve of the other’s point of view. I’m not sure which is a double agent, which is the socialist. The Treasurer, while he regrets arguing economics with a lawyer, is going to have to listen to a few irrelevancies from a farmer.

Mr. Lawlor: Well that is really putting it out.

Mr. R. F. Nixon: All right, you can listen or leave. Usually you are gone. What are you doing here tonight? This is the first time I’ve seen you today.

Mr. Lawlor: I always listen. I find you the most entertaining member of the House.

Hon. Mr. White: The fight’s over here.

Mr. R. F. Nixon: Oh no it isn’t. You are not even going to run again. You are not even in the battle.

Mr. Chairman, the hon. member has tried to leave some sort of an intra matter on the political system; and unfortunately he hasn’t even come up to the mark left by the hon. Darcy McKeough. He may keep trying and he might leave his mark. But all the palaver that he has been giving us tonight, about yes we’ve been taking in more dollars than we’ve been spending, simply has resulted in the bottom line of his budget being changed in his recent statements, indicating we are going to have to find $848 million extra this year to maintain the level of expenditure which he has recommended to his colleagues and which has been approved.

Hon. Mr. White: You are wrong again.

Mr. R. F. Nixon: Wrong? Maybe.

Simply, it is your statement that $848 million is going to have to be met. The thing that worries me is that we move forward on a most frightening progression.

A few years ago, the Treasurer’s predecessor -- about three before, I guess Charlie MacNaughton was the man -- stood in his place, white-lipped and trembling, and predicted a fiscal nightmare.

Perhaps we are in it now; but in those days Mr. MacNaughton was concerned about the costs of education. Tories in the backbench were saying: “Where will it all end?” It seems to be a phrase that Conservatives and some unreconstructed socialists use from time to time. “Where will it all end?” It’s sort of a talisman of the people who don’t believe in the system and are throwing up their hands and expecting John White to save them; something like that.

Mr. Lawlor: Has that thought never entered your mind?

Mr. R. F. Nixon: Remember when the costs of education exceeded $1 billion? It was almost like the four-minute mile. We felt that nothing could cost more than $1 billion. But now education is well in excess of $2 billion; and the cost of health service is well in excess of $2 billion. That is the new bête noire, a phrase that probably the farmers are just now starting to use.

Mr. Lawlor: Never use.

Mr. R. F. Nixon: The costs of health services are on the lips of the Minister of Health (Mr. Miller) frequently. He is now in Nassau evidently and can’t be here to join in this debate. But when he comes back from Nassau he will continue with his process of sensitizing the community to some sort of a programme on behalf of the government to chop off the doctors, chop off the hospitals, centralize the control of the provision of health services.

But it was the speech of the Treasurer two or three weeks ago that shook me, Mr. Chairman, and it should shake you too.

I hesitate to put words in his mouth, and I am quite sure he is prepared to say that he was either misreported or misunderstood by the farmer from Brant county when he said that our real problem -- the third level or the tertiary level, as you might call it -- is going to be the cost of providing municipal government. If that is going to escalate in any kind of a parallel with the problems we have faced over the last decade, first with education, then with the provision of hospital and medical services, if that’s the crisis we are in now -- and it is one that is in part of the Treasurer’s own making, having to do with the cost of local government -- then heaven help us indeed.

I suppose, from a simplified point of view, the Keynesian theory of cyclical financing makes a lot of sense. It seems to me in these times -- the hon. member for High Park (Mr. Shulman) says no, and I was about to agree with him; maybe we can reach some common ground before he leaves the Legislature -- but in these times when it is not unemployment that is our concern, but it is inflation that has us by the throat, the government of this province, which the Treasurer says has an eight per cent handle on, let us say, the fiscal levers of this nation --

Hon. Mr. White: I didn’t say that either.

Mr. R. F. Nixon: All right. I forget the phrase the Treasurer used, but it referred to the fiscal attributes of our economy.

Under those circumstances, if our deficit position is as the Treasurer describes it, then we have a lot to be worried about. It could very well be that when we return to this House in 1975 or 1976 we’ll be back to those problems of unemployment which we find even more devastating than those which face us now. That is the time when you should get support from the member for Lakeshore, if he is here. Certainly you will get support from me and my colleagues when you are prepared to use the credit of the province and the eight per cent fiscal involvement in the nation to see that there are jobs and that the economy does not stagnate. But we are not facing that stagnation now.

We have inflation, and it has us by the throat. And I believe that your policies are aggravating that situation and not moderating it. That is really what you are going to be remembered by when you pass off into your junior directorships of Holiday Inns and things like that a year from now. But maybe we could persuade you to stay on in the House and take some position from the seats in the opposition with regard to other policies.

Mr. Chairman, this Treasurer, with the mistakes that have been made and certainly the unhealthy concept of provincial finance which he brings forward, is aggravating the situation we face now. I don’t often find myself in agreement with the member for High Park; I really don’t --

Mr. M. Shulman (High Park): Aw, I feel badly.

Mr. R. F. Nixon: -- but I will tell you this, that these are the times when we ought to be experiencing surplus financing and we ought to be preparing for those problems which will face us next year and the year after when we may still have inflation. But the problem we will have to cope with will be unemployment, and I am sure that is a prediction that the Treasurer would share.

Hon. Mr. White: The Leader of the Opposition is either obtuse or dishonest.

An hon. member: He’s both.

Mr. J. M. Turner (Peterborough): He just doesn’t understand.

Hon. Mr. White: If one turns to table C1, one will see that the net cash requirements of this province were forecast to be $708 million, and we had in-pouring cash from captive pension plans of $1,044 million. So we took in $336 million more than we put out.

Mr. R. F. Nixon: That is intellectually dishonest.

Hon. Mr. White: That is not intellectually dishonest.

Mr. R. F. Nixon: To use a phrase I heard this afternoon, it is misleading.

Hon. Mr. White: I went through a succession of explanations relating to the characteristics of this particular budget and the way it is set forth --

Mr. R. F. Nixon: I listened to your budget speech.

Hon. Mr. White: -- attempting to explain to those like yourself who are not knowledgeable about such matters --

Mr. R. F. Nixon: Yes, you were retiring debts.

Hon. Mr. White: -- how cashing asset acquisitions while accruing certain selected liabilities gave a distorted view of this province’s financial activities. I think there is no point in my doing it again.

Mr. R. F. Nixon: Yes, you’ve got to look at the bottom line.

Hon. Mr. White: Yes. When one looks at the bottom line one sees that we’re taking in more money than we’re putting out. And this is the reason, Mr. Chairman --

Mr. Shulman: John, you never read this book.

Hon. Mr. White: -- we have been able to reduce our outstanding bonds by $594 million in the last 18 or 20 months.

Mr. R. F. Nixon: They were coming due, were they not? Did you not have to pay those off?

Hon. Mr. White: No, we did not.

Mr. R. F. Nixon: Certainly you did!

Hon. Mr. White: No, we did not. You’re wrong again. We bought them through the market. The lesson I’m trying to teach in the dying days of my illustrious political career --

Mr. Shulman: Thank God for the province.

Hon. Mr. White: -- is that when we get into higher unemployment sometime later, we simply will have to recognize --

Mr. R. F. Nixon: You may be among the unemployed; you better be careful.

Hon. Mr. White: -- the adverse effects which we would have if we tried to follow the un- reasonable, unknowledgeable, destructive policies being mouthed by the Leader of the Opposition.

Now sir, it was said by one of these critics that I made many mistakes. In the words of the National League’s most famous baseball umpire, I’ve never made a mistake in my life.

Mr. Shulman: That will be your epitaph.

Hon. Mr. White: I may err, but I’m never wrong!

Mr. Cassidy: I want to engage with the minister for a few minutes about this, because I think that he’s too taken by the book that he wrote back in 1963 or 1964 when he had his MA but not yet his PhD.

Mr. R. F. Nixon: He got that by order in council.

Mr. Cassidy: Maybe he’ll get it by order in council or from the governing council of Western University.

What the minister says, if I can try and put the quotes on the record, is: one, that a province is not a nation and therefore does not have the central bank facilities of a nation; and second, that provincial finance is just like household accounting. I believe I quote him correctly.

In other words, if in my household we were to take in $8,000 a year and spend $8,700 a year, that would be comparable to the Province of Ontario, multiplying by a few thousands here or there. And somehow, the minister says, my household should be able to do that on a permanent basis; which is something that I have not yet found the secret of doing, much to the dismay of my banker.

Then the minister says that over the last couple of years the province has been taking in more than we spend, but that over the next couple of years, as we run the risk of economic recession we may need to put out more than we take in. I think the minister will agree that these are fairly accurate summaries of his position.

It’s a piece of legerdemain, Mr. Chairman, and another of the minister’s bold strokes.

Hon. Mr. White: How did we get the triple A then?

Mr. Cassidy: You get to the triple A because of the fact that over the last couple of years you have been able, thanks to pension funds, to pay off some of your publicly-floated debt. And you have privately floated debts with the best banker in the country, which is the Canadian people, through the Canada Pension Plan and Ontario teachers and municipal employees through their retirement funds.

What the minister is doing, though, is saying that the so-called deficits of 1971 and 1972, which ran around $750 million a throw, and of 1973, which ran around $721 million, were not deficits at all. He arrived at that position by taking the money that people put into the Canada Pension Plan, the teachers’ superannuation fund and OMERS and treating that as current revenues, as quasi tax revenues from people who contribute to those three pension funds and the other smaller funds that provide these non-taxed revenues to the government.

The sums are substantial. They amounted to $958 million in 1973-1974, and are estimated at just over $1 billion in incomings in the current fiscal year.

What the minister appears to be saying is that that $1 billion is not an investment by the teachers, municipal employees and citizens who put money into those various pension funds, but that it is in fact a form of quasi tax revenue and should be treated as such. He perverts, to my view, the way in which those moneys are contributed.

If you go out on the street and ask the fellow who has just paid $2.50 or $3 last week for his CPP contribution, or the teacher who has seven or six per cent of his monthly salary deducted for the teachers’ superannuation, whether that was a kind of taxation, their answer will be: “No, that is my investment in my pension and that will grow over time in order to give me and my family security when I retire.”

That is seen as a form of savings by the people who put the money into these various pension funds and they expect it to grow. If it is a kind of savings pool from which the minister is drawing, then he is wrong to treat it as a kind of income. If he treats the savings of people in pension funds, whether they save compulsorily or voluntarily as a kind of income, then there is no difference in saying --

Mr. Chairman: Order please. Would you allow the hon. minister to speak?

Mr. Cassidy: Go ahead.

Hon. Mr. White: What I am saying is that if you are going to cash off your assets, you should cash off your liabilities; and I offered arguments in favour of that. In point of fact, the thesis I argue in my book is that you should accrue both sides. If one accrues our investments in capital works this year, we have a profit of more than $500 million.

Mr. Cassidy: That’s nonsense, Mr. Chairman.

Mr. R. F. Nixon: He’s wasting our time.

Mr. Cassidy: The minister has been through this long enough. As a teacher he knows that customarily in economics, or at least as it was taught when I was in university, many government investments are not seen to be directly productive in the way, say, that an investment in a new steel mill or a new retail store or something like that would seem to be productive.

Hon. Mr. White: Oh, oh; be careful.

Mr. Cassidy: It’s very difficult to quantify the economic return on, say, an extension of Highway 417 or the new Queensway Carleton Hospital or some other provincial investment. In fact, as far as the university --

Hon. Mr. White: A mile on the 401 pays for itself in six months.

Mr. Cassidy: Mmm?

Hon. Mr. White: A mile on the 401 pays for itself in revenue in six months.

Mr. Cassidy: It may pay for itself in six months in terms of economic return when those returns are made in the private sector, but it does not pay for itself in direct return to the public purse over a period of six months.

Interjections by hon. members.

Mr. Cassidy: Mr. Chairman, what the minister is actually trying to do is this: He is augmenting his revenues by taking in these pension plan contributions. Then he is telling us that over the current fiscal year, for example, we don’t have a deficit; in fact we have a surplus of -- I don’t know what it is -- $400 million. I would suggest to the minister --

Mr. R. F. Nixon: Sounds like WAC Bennett, doesn’t he?

Mr. Cassidy: If he wants to account in this fashion, then what he should do is follow the British practice and have an accounting above the line and an accounting below the line.

The above-the-line accounting would look at the government current expenditures and would look at government current revenues and you would not find a $500 million surplus there. The current figures here indicate a deficit of about -- $625 million is the figure estimated for 1974-1975.

Then below the line you would look at government capital expenditures and at government non-current revenues and those would mainly be in the form of borrowing, pension funds, and that sort of thing.

Mr. R. F. Nixon: That’s the way it was done until four years ago.

Mr. Cassidy: If you want want to do that, then I would at least have some sympathy for the minister. But what the minister is trying to do right now is to prepare the intellectual ground among the press gallery and among the officials, among those professors and other people who occasionally watch this place for a deficit such as this province has never seen before, in 1975 when the Conservative government under John White’s final budget tries to buy another four years in power. What the minister is saying is: We aren’t starting from a deficit position of $1,044 million, or $700 million or $800 million, we are starting from a surplus position and we will move into a deficit position.

By all of the current standards of accounting, the minister is beginning from a $700 or $800 million deficit, and he is therefore intending to lead us to a deficit of $1.25 billion to $1.5 billion -- I don’t really know what it is he intends -- while dissembling to the Leader of the Opposition and those and other people across the province that it ain’t really so at all.

Hon. Mr. White: You had better talk to your friend Lawlor about that.

Mr. Cassidy: I have, and we are in total agreement on this one. I call on the minister to come clean on these figures and not try and change horses in mid-stream. That is what he is trying to do, because he and his colleagues are desperately frightened by the size of the deficit right now and by the way in which the province is going.

You cannot say that pension contributions are like taxable income. If you do you are putting everybody in this province on a form of welfare when they start to draw pension benefits when they turn 60 and 65.

Hon. Mr. White: My dear friend, I argue in my book that we should accrue both sides. If we do accrue both sides this year we have a surplus, not of $336 million, but of more than $500 million.

I want to go back to a theme which the Leader of the Opposition is attempting to develop with your support. It has to do with the financial capability of this province.

This great rich province can afford anything its citizens want except profligacy. We can’t be stupid, but if we use our heads we can provide a very high level of public service.

In John Robarts’ last year as Premier the province consumed 11.4 per cent of the gross provincial product. Last year we consumed 10.9 per cent. This year, because of a sudden surge in expenditures, we will expend 11.3 per cent of the gross provincial product, still about 0.1 per cent less than was expended in John Robarts’ last year.

I remember Mr. MacNaughton’s remarks. I didn’t quarrel with them particularly. It is the function of the Treasurer to say: “Hey, slow down.” He pulls on the coattails of the Premier and every minister. He attempts to inform the opposition, none too successfully, I am quick to say.

Mr. R. F. Nixon: He made a lot more sense than you are making.

Hon. Mr. White: So I don’t blame Charlie MacNaughton for holding up that red flag of caution to everybody. I hark back now to 1960.

Mr. R. F. Nixon: He got his Premier to have a surplus in 1970, which is something you will never do.

Hon. Mr. White: My friendly minister, Al Grossman, will remember when Mr. Ross Whicher stood in this House and extrapolated certain figures for the year 1970 and proved we were going to be broke. But we weren’t broke in 1970 and we weren’t broke in 1974; and that is why the Wall Street Journal, two weeks ago today, was able to quote Moody’s as saying that the triple A rating was based on Ontario’s sound financial condition. Those aren’t my words.

Mr. Cassidy: Music to your ears.

Mr. R. F. Nixon: Thank God there is somebody who thinks --

Hon. Mr. White: “Well-managed debt;” the Wall Street Journal said that.

Mr. M. Gaunt (Huron-Bruce): Borrowed to pay the debts.

Hon. Mr. White: I am not finished yet, don’t worry.

Mr. R. D. Kennedy (Peel South): Current accounts well-managed too.

Mr. Cassidy: Let those words be etched on the record. We can afford anything we want in Ontario except for Tory profligacy.

Mr. Kennedy: That is not what he said.

Hon. Mr. White: I had another point, but these unhappy interjections have dismissed it from my mind.

Mr. R. F. Nixon: Perhaps I would recall them to your mind if I followed up on one comment the Treasurer made. It’s regarding the five star credit rating. I was looking at the ad in the Globe and Mail about a week ago. I noticed it also in one of the Montreal papers -- it didn’t appear in the Brantford Expositor. It said you were borrowing $175 million in New York at 10 1/4 per cent, but that this ad was for public interest only and that all the money had been covered in the New York market.

Why wouldn’t it be possible for you to attempt to lend some of that money directly rather than through borrowing from the government of Canada? That is the premiums in the Canada Pension Plan at 10 1/4 per cent, through some procedure utilizing the facilities of the savings office or something like that, so that the people of this province could participate more directly in this kind of a lending programme.

Ah yes, smiling; irrelevant, isn’t it? Uninformed, isn’t it? But it is my credit and that of the other eight million people in this province that you are so proud of when you go to New York and read what Moody and the New York Times say about you.

Mr. Turner: The Wall Street Journal.

Mr. R. F. Nixon: Or the Wall Street Journal.

But why wouldn’t it occur to you that the people in this province might like to participate in being those creditors to whom you are going to owe an additional $848 million this year, according to the statement that you made?

Hon. Mr. White: No, I am sorry, we are not borrowing on our account. We are reducing our debt in this province on our account by $594 million as from the last 18 or 20 months.

Mr. Shulman: That just isn’t true and you know that isn’t true.

Hon. Mr. White: The Ontario Hydro with our guarantee did borrow $400 million in Canada this year; and so if my hon. friend had wanted to invest in this province he had ample opportunity to do so.

Mr. R. F. Nixon: At 10 1/4 per cent?

Hon. Mr. White: Hydro went to market on Monday, $60 million for 25 years, a coupon rate of 10 per cent, a price of $98.50 to yield 10.17 per cent; $40 million for seven years, coupon at 9 3/8 per cent --

Mr. R. F. Nixon: You can get that from the Bank of Montreal.

Hon. Mr. White: -- priced at $99.62 to yield 9.45 per cent.

Mr. H. Worton (Wellington South): You can get that from your own local bank, my friend.

Hon. Mr. White: My hon. friend is quite incorrect in saying we are not giving Ontario citizens an opportunity to buy Ontario obligations. We are. It’s only when this market becomes full we turn to New York.

Next year Hydro is going to need $1.2 billion. If my hon. friend cares to invest $2,000, $3,000, or $5,000 he would be very welcome.

Mr. R. F. Nixon: I don’t want to ask about a few thousand. I just want to ask specifically about the $175 million that was borrowed in New York about two weeks ago at 10 1/4 per cent. That wasn’t an Ontario Hydro one. It wasn’t advertised that way. It was Province of Ontario. I believe that you have to borrow that way even if it is for Ontario Hydro purposes. But why would that not have been made available here at the same time? That’s certainly a better interest rate than you’re talking about.

Hon. Mr. White: Ontario Hydro borrows in Canada in its own name with our guarantee. Ontario Hydro borrows in New York in our name. The reason for that is if we go to market in New York in the name of the Province of Ontario, because of our high credit rating, because of “sound financial condition and well managed debt” --

Mr. R. F. Nixon: I’ve heard that. We know all that. Nobody is predicting bankruptcy.

Hon. Mr. White: -- we could get a much lower rate than if Hydro goes directly. First of all because the Ontario Hydro is not as well known as the Province of Ontario; and secondly because utilities are in the doghouse, so to speak, in the United States right now.

Mr. R. F. Nixon: And the Conservative government is sort of helping.

Mr. Shulman: Mr. Chairman.

Mr. Chairman: The member for High Park.

Mr. Shulman: I rise with some diffidence to speak to the Treasurer. I’m not sure whether he’s putting us on or whether he doesn’t understand himself. Of one thing I am convinced, that the name of John White will go down in history when all of the rest of us are long forgotten. I originally thought his name would go down because of his spectacular errors in bills, the energy tax and the speculative land tax.

Hon. Mr. White: No, because of the triple A rating.

Mr. Shulman: The triple A rating will come back to haunt you, my friend, because all the triple A rating means is that you’re going to pay off. And of course you are going to pay off, nobody questions that. The Tories have always been known for paying off.

Mr. R. F. Nixon: They will pay off.

Mr. Shulman: I really think that the reason you are going to go down in history is that you are one of the two men, or perhaps three men in this country, who are going to be responsible for the rip-roaring inflation that is going to ravage this city and this province and this country after we’re all out of here and perhaps before we’re out of here, because we’re well on our way.

You have the nerve, the colossal nerve, to rise in this House and say things which you know are not true. That’s what bothers me, because I know you have the intellectual ability to handle that.

Hon. Mr. White: Mr. Chairman, please accept my assurance that every word that I have said, in my belief, is completely true.

Mr. Shulman: Okay, I accept that without question, but that frightens the hell out of me, because if he doesn’t know what is going on, if a Treasurer can get up in this House and say -- and I wrote it down -- “In the last two years we have taken in more than we put out,” and if he doesn’t believe it, all right, I can accept that as a political necessity, as he’s got to con the opposition, he has to con the press, and he has to con the public. But if he gets up and says it, and believes it, then we’re really in serious trouble.

I just borrowed a copy of the financial report for 1974 and the simplest child in grade 1 can understand when it says that total revenue is $6.9 billion and total expenditures are $7.3 billion that there is something wrong.

The minister says, “Just ignore that; we actually took in more than we paid out.” He turns over another page and he got up and told the Leader of the Opposition -- who didn’t challenge him; I’m surprised -- that we paid off some $250 million worth of loans in this past year. And the leader said: “We had to pay them off; they came due.” But what the Treasurer didn’t happen to mention is that, sure he paid off $250 million; but he also borrowed $946 million. What are you doing? Just let’s stop and think what you’re doing. You can play games of figures in here and you can con the people in the press gallery. They’re not too bright on economics -- there’s no question about that -- in fact the gallery emptied.

Hon. Mr. White: They are a lot brighter than the Sun columnists.

Mr. Shulman: That may be. If they can read, they’ll know what’s going on. Interestingly, the press gallery emptied when this subject came up, because nobody really understands it. When the Treasurer of the province gets up and says, “We’re in a surplus position; we’re taking in more than we’re putting out” -- and he believes it -- shouldn’t the press believe it? But it isn’t true.

Even though you may have conned a lot of people, you weren’t quite able to convince the auditors -- the people who have to make these books up and go to New York for your triple A rating. So what happened! Last year you managed to put out some $300 million more than you took in. This year it’s up to $400 million. The interest you’re paying on your loans is growing astronomically. It is in the hundreds of millions of dollars; and I forecast by the end of next year it will be at the rate of $1 billion a year.

And you get up and you say, “Well, it isn’t really serious because we only represent eight per cent of the handle. And what’s more important, we’re not a federal government, so what we borrow we ultimately have to repay.”

Well, surely you must realize the fallacy here. Of course you repay it. You’re going to repay it with devalued dollars when those loans come due. But in the meantime, you’re pumping all that extra money into circulation here in this province. There is the $175 million you borrowed last week in New York; and the $100 million you’re talking about now that you’re so proud of at 10-and-a-fraction per cent.

Don’t you realize what you’re doing? You’re forcing up the price of milk and cars and hard goods and clothing and everything else, because you’re putting more and more money in circulation. And then you’ve got the nerve to get up and talk of Trudeau. You’re the villain. You’re the man who is ruining the economy.

Now, I can understand an honest politician. He says: “My God, we’ve got an election coming up. We’ve got to do things. We’ve got to get things to the people, or else they’re not going to vote for us. So all right, we bring in new plans. We’re going to increase pensions. We’re going to increase aid to the homeowners. We’re going to increase welfare. We’re going to increase aid to municipalities.”

All right, you want to buy them -- buy them! But buy them honestly. But don’t buy them and then say, “We’re not really doing it, we’re paying off our debts” -- when you’re doing exactly the opposite.

You are the one man in this House who should be doing what MacNaughton was doing when he was here. As you said it, you should be putting on the brakes and saying “Stop these expenditures!”

Instead, we find you getting up here and saying, “We’re not really spending it at all. It’s just a mirage. Just ignore what’s written in here. It doesn’t mean what it says; we’re taking in more than we’re putting out.”

You know that isn’t true. I hope you know it isn’t true. Because if you really do believe what you’ve said today, then I fear for all of us in the coming 12 months; because we are going for the biggest deficit this province has every seen. We are going for 25 per cent, inflation in 1976. And when the history books are written -- and they will be written in 1977 and 1978 and 1979 -- they’ll say this Treasurer did it.

I sincerely and truly and honestly believe this province can still be saved fiscally. But not if you won’t even admit the problem; if you don’t admit we’re spending more than we’re taking in; that we’re producing inflation. If you say, “It isn’t really happening; inflation isn’t here; we’re bringing it under control” -- how the hell are we ever going to come to terms with it?

Now, for goodness’ sake, come to terms with the problem. The problem is that we have inflation in this country -- inflation which is ruining the poor. It’s about to destroy the middle class; and before it’s through there is not going to be a person in this province who isn’t going to suffer from the effects of inflation. There are only two men in this whole country who can do anything about it -- and you’re one of them. Now the only way you can do anything about it is to cut back on our expenditures or increase our taxes.

The Premier (Mr. Davis) put it half truthfully today during question period. I said, “Why don’t you suggest to the Treasurer that we balance the budget?” He said, “Well, that means higher taxes.” There is another possibility. The other possibility of course, is lower expenditures.

Now if you, as the Treasurer of the province where all the money is -- you can call it eight per cent, I call it $7 billion a year in expenditures -- want to do something about inflation, you have to cut back on our expenditures. You cannot keep increasing the money supply. You can increase the money supply just as effectively as Ottawa can, even though you can’t print it, because you can do the next best thing, you can import it. You can import it from the United States. You can put it into circulation under the bank accounts.

The Leader of the Opposition says why don’t you give us a chance at 10 1/4 per cent. It’s a bad investment. You shouldn’t buy them. Because at the rate of inflation you’ll lose money on them. But what you are doing --

Mr. R. F. Nixon: Better stick to soya bean futures.

Mr. Shulman: -- you are pulling the money out of the bank accounts and putting it into circulation and you are pushing up prices. You are producing inflation. And unless and until you are willing to admit the problem and cut back on your expenditures, you are going to destroy us all economically. You will be remembered for that.

Hon. Mr. White: Mr. Chairman, that may sell books but that doesn’t persuade me. Now, I’m going to make one more effort to explain this to those self-appointed economists who have medical degrees and QCs.

Mr. R. F. Nixon: The QCs are all on your side.

Hon. Mr. White: Write it down. We’ve got revenue from taxation of $7,716 million.

Mr. Shulman: Right.

Hon. Mr. White: We have revenue from receipts and credits of $491 million. We have cash in from capital --

Mr. Shulman: What is that?

Mr. R. F. Nixon: What is that? That carries with it obligations.

Mr. Shulman: What is that, receipts and credits?

Hon. Mr. White: That means repaid loans and so on.

Mr. Shulman: You said it was revenue. Where is it coming from?

Hon. Mr. White: It is coming from people who are repaying their loans, for example the capital aid corporations.

Mr. Shulman: Do you consider that revenue? When someone pays back a loan do you consider that revenue?

Hon. Mr. White: We are talking about cash in and cash out.

Mr. Shulman: Oh boy!

Hon. Mr. White: Just a minute. We’ll come back to that in a minute.

Mr. Shulman: There is no hope for the province if that is the way you are going to add.

Hon. Mr. White: Well, you’d better count it. You are counting it out, but not in then.

Mr. Lawlor: How much?

Hon. Mr. White: That was $491 million. The cash in from capital pension plans, which I’m not calling tax revenue, of course --

Mr. R. F. Nixon: They carry a certain responsibility with them.

Hon. Mr. White: -- is $1,044 million. These three items add up to $9,251 million. On the cash-out side, we’ve got expenditures per se, of $8,341 million, and we have disbursements and charges, loans and such like, to Crown corporations and so on, of $574 million, for a total cash out of $8,915 million.

If one takes the cash out of $8,915 million away from the cash in of $9,251 million, one comes up once again with a surplus of cash in of $336 million, and that, of course, is why we are able to buy back these bonds from the public.

Now, my hon. friend has dealt with the economic effect of Hydro’s borrowings. In point of fact, the Hydro borrowings are spent in the United States on coal and other supplies. So it has no economic effect in this country. It has no effect on the Canadian dollar. It has no effect on prices in Canada.

So I ask my hon. friend in all seriousness to please reconsider his position and a year from now when he and I are listening -- what did Mitch Hepburn say, listen to the onions grow?

Mr. R. F. Nixon: To the grass grow.

Hon. Mr. White: When we are listening to the onions grow --

Mr. R. F. Nixon: Grass.

Hon. Mr. White: -- let us sit down rationally, and I know at that time my hon. friend, having lost his partisan passion, will agree with me and the Wall Street Journal, which had a series of articles on this subject in the last two or three weeks, the numbers you’ve got to look at are cash in and cash out. And we’ve been in surplus since the day I became the Treasurer of this province.

Mr. Shulman: Mr. Chairman, through you to the Treasurer, to bring it down to its simplest terms- and obviously that’s necessary -- let me take a very simple example. You are considering this $491 million, which is repaid loans, as revenue. Let us suppose my salary here --

Hon. Mr. White: I am talking cash in.

Mr. Shulman: -- our salary here is $18,000. If I lend you $5,000 now and you pay it back next year, do I then consider that $5,000 that is being paid back is part of my revenue? That’s what you are saying to us here.

Hon. Mr. White: I am not saying that at all.

Mr. Shulman: That is what you are saying to us. How can you possibly consider a repaid loan --

Hon. Mr. White: I didn’t say that at all.

Mr. Shulman: It’s not part of your income at all.

Hon. Mr. White: I didn’t say it was.

Mr. Shulman: Well, you sure added it in. All that you have taken in this year is that $7.7 billion. The other figures you add in to give the spurious appearance of the $9 billion are repaid loans.

Hon. Mr. White: Listen, let’s do this. Would the opposition critics agree that the time has now come to put the accounts of this province on the same accounting principles as a corporation, then subject ourselves to all of the constraints --

Mr. Shulman: No.

Hon. Mr. White: -- which we impose on corporations?

Mr. Shulman: Corporations don’t have to worry about the welfare of the people of the province. You are supposed to.

Hon. Mr. White: I am only asking that we record our financial activities in exactly the same way as we require corporations in the private sector to do. Wouldn’t that be wise?

Mr. Shulman: It is not even comparable.

Mr. R. F. Nixon: Let’s ask a specific question. Suppose the corporation has substantial pension contributions from its employees. Is there any way that that corporation ought to be able to look at that money as general revenue for anything other than putting it in very, very secure accounts so that they can pay back that obligation when the time comes? How can it possibly be considered as revenue? You remind me of the member for Haldimand--Norfolk (Mr. Allan). For the first time, he isn’t here. He usually is here either listening or taking part. He couldn’t stand to say the word “deficit.” He coined a new word. He called it a “shortfall’.” He suffers from the same problem that this Treasurer suffers from. He cannot talk about a current account and a deficit. It’s cash in, cash out, and what great shape we are in. They are both misleading, but at least the member for Haldimand--Norfolk used to blush a little bit about it when he attempted it.

Mr. Shulman: Mr. Chairman.

Hon. Mr. White: No, it is my turn. I am now asking the financial critics very seriously to consider the advantages of turning to full corporate accounting.

Mr. Shulman: Another red herring.

Hon. Mr. White: Just a minute please.

Mr. R. F. Nixon: You just changed your accounting method two years ago. We are just barely catching up with it.

Hon. Mr. White: It was against my wishes. That is one of the ones I lost.

Mr. Lawlor: Would you like to have a depreciation account too?

Hon. Mr. White: I am suggesting that we thereby accrue all pension liabilities, including the member for Lakeshore’s, just as a corporation is required to do and that we accrue our capital acquisitions just as a corporation is required to do. Wouldn’t that be a good idea? Then when we set rules for the corporate sector, we would know we were applying the same rules to ourselves and this would introduce a new constraint on the appetites of the politicians.

Mr. Shulman: Well, we sure need that.

Hon. Mr. White: Wouldn’t that be wise?

Mr. R. F. Nixon: No. In your own comments in the introduction of your budget --

Hon. Mr. White: If we would do so, we would show a profit this year of more than $500 million.

Mr. R. F. Nixon: Well, that is the point, Mr. Chairman. We simply cannot buy that kind of logic because you are going to say you can sell the highways to Quebec or you can sell the hospitals to a consortium of doctors in Toronto and turn them into cash. You say we don’t understand. You are right. We do not understand your logic because it’s wrong and the people know it’s wrong.

Mr. Lawlor: It is absurd.

Mr. Shulman: Mr. Chairman.

Mr. Chairman: The member for High Park.

Mr. Shulman: The minister said one thing about which some comment must be made, and I have given up. I don’t think I am going to pursue it but I want this for the record. He said when Hydro borrows in the United States that $175 million it doesn’t affect the cost of anything here because that money is being spent in the United States for coal and other raw resources, that it only affects them and it doesn’t affect us.

Does the minister not realize that, if you didn’t borrow that $175 million in the United States, it would have to be soaked out of the Ontario economy? That $175 million affects us down to the last penny and it pushes prices up that much and it pushes up the amount of money in circulation here. How can you ignore that? Where it is spent is irrelevant. The fact that you borrow it there and spend it there means that you aren’t raising it here, where you should be raising it, and that extra money is in circulation here and milk or bread or everything else goes up by one more notch. You can double-talk us from now until doomsday but the facts are very clear and every one of your economists knows it, and they must have told you by now.

Mr. Chairman: The next speaker is the hon. member --

Hon. Mr. White: No, just a minute. My hon. friend changes position 180 degrees --

Mr. Shulman: Not one iota.

Hon. Mr. White: -- because a half an hour ago, he was suggesting that our borrowing in Ontario was pushing up prices and now he is suggesting that our not borrowing in Ontario -- yes, I will prove it with Hansard -- is pushing up prices.

Mr. Shulman: Borrow it anywhere. It doesn’t matter. On a point of order, Mr. Chairman, the point I made was that his borrowing raises prices. Where you borrow is irrelevant. When you borrow money and spend it, you put that much more money in circulation, you raise prices, and whether you borrow it here, there or in Timbuktu doesn’t make the slightest difference.

Mr. Chairman: The hon. member for Prince Edward--Lennox.

Mr. J. A. Taylor (Prince Edward--Lennox): Mr. Chairman, the inherent contradictions in the statements of my friend from Ottawa Centre and the member for High Park are puzzling indeed.

Hon. A. Grossman (Provincial Secretary for Resources Development): What’s new?

Mr. Taylor: On the one hand the member for High Park says the government is spending too much money; on the other hand the member for Ottawa Centre says it is not spending enough. When he says it is not spending enough then he zeros in on eastern Ontario and says: “What are you doing for the poor people in eastern Ontario?”

Hon. Mr. Grossman: That is why the member for High Park is going to leave that party before the session is over.

Mr. Taylor: And here he is, the self-appointed champion of the weak and the oppressed, and he is the saviour who is coming along to redeem us all in the east.

Mr. Lawlor: You need a little redemption.

Mr. Taylor: Just a minute -- the member for Lakeshore is another one. This afternoon, as you know, we taped the programme in connection with the spending on jails and detention centres in this province, for which I may say the government only took over the responsibility in 1968. Certainly if you come to eastern Ontario, you have Belleville county jail replaced, you have the Picton jail replaced, you have the Napanee jail replaced, you have the Kingston jail replaced, your tenders are out for the new jails in east and west Toronto (Etobicoke and Scarborough), you have a new London jail and Ottawa jail. The money is being spent, and the reason I am mentioning this is that you say here we are spending too much money and a few hours ago you said we are not spending enough.

Now, I think the member for High Park has made some points, because there is no question that there has been too much government spending at all levels and I think this is one of the reasons for the inflation that we are suffering today. I think this is very serious -- not only that, but it may very well get worse.

Mr. R. F. Nixon: Good point.

Mr. Taylor: But when we talk about the economy of Ontario there is no area in the world that can compare with Ontario --

Some hon. members: Hear, hear!

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Tell us why, Jim.

Mr. Taylor: When you look at Canada, where are the investors coming? They are coming to Ontario because we have the natural resources here. We have a very strong economy and our long-term view is very prosperous and hopeful indeed.

Hon. Mr. White: Thirty-one years of perfect government.

Mr. Taylor: There is no question about sound government. You cannot spend yourself into prosperity. So, I think that we have to watch where the money is going.

Just to answer my friend from Ottawa East (Mr. Roy), I would like to make the point that I’m most mindful of eastern Ontario and have been trying for a long time to ensure that eastern Ontario participates fully in the growth and development of Ontario. Nevertheless, we are getting things done in eastern Ontario. Let me just quote a few --

Hon. Mr. White: More to come.

Mr. W. Ferrier (Cochrane South): Building more jails, too.

Mr. Taylor: Yes, you would close down the churches and build more jails, when I listen to you people.

Mr. Lawlor: We’d close down the jails and build more churches!

Mr. Taylor: Then you have seen the light. But there is another contradiction; you are paradoxical.

Interjections by hon. members.

Mr. Chairman: Order, please. Allow the member to continue.

Mr. Taylor: That’s all right, Mr. Chairman -- I don’t mind a little repartee.

The point I would like to make is that when you look at eastern Ontario -- for example, the industrial milk production centre programme from July 1, 1973, to June 30, 1974 --

Mr. R. F. Nixon: That is vote 1.

Mr. Taylor: The Leader of the Opposition will be very interested in hearing this piece of news from my riding again. There were a total of 73 applications, of which 63 were in Prince Edward county.

Mr. R. F. Nixon: For what?

Mr. Taylor: The average amount per application is $12,645, which translates into a total in this area -- and I’m talking about Prince Edward--Lennox -- of $923,085. Now there’s money coming into the riding.

Mr. R. F. Nixon: That’s great.

Mr. Taylor: That is great, especially when it also translates into increased industrial milk production of 11,291,564 lb. That’s progress.

Mr. R. F. Nixon: That’s a lot of milk production.

Mr. Taylor: And that’s eastern Ontario for you.

Mr. A. J. Roy (Ottawa East): Tell us about the cheese production.

Hon. Mr. Grossman: The member for High

Park will claim that is inflationary.

Mr. Taylor: Now, what about the capital grants through the farmers’ incentive programme? The hon. member might be interested in this.

Interjections by hon. members.

Mr. Taylor: All right, the Leader of the Opposition got up and said: “Let’s hear the farmers speak.” Now he’s going to listen to one, and he’s going to listen to what’s being done for the farmers in eastern Ontario.

Interjections by hon. members.

Mr. R. F. Nixon: The lawyer from Scarborough with a big black book.

Mr. Taylor: At least I don’t carry it into the House like you do.

Mr. M. C. Germa (Sudbury): You have never been off the pavement in your goddam life.

An hon. member: Watch your language. That’s not parliamentary language.

An hon. member: Make him take it back.

Interjections by hon. members.

Mr. Chairman: Order, please. Order.

Mr. Taylor: I’m not known as a stuffy person, Mr. Chairman, but I think that’s unparliamentary language.

Mr. R. F. Nixon: That’s right, and I think the Lord is on your side.

Mr. Taylor: If my friend would like to visit my riding, I could show him a little bit of the rural community and something that might interest him.

Mr. Roy: We don’t have to visit.

Interjections by hon. members.

Mr. Chairman: Order, please. Allow the member to continue.

Mr. Taylor: Now, insofar as capital grants to Ontario farmers in Lennox and Addington and Prince Edward counties are concerned, there was a total of $265,950 for the period from April 1, 1973, to March 31, 1974. I think that inflow of money certainly has assisted the farmers in the community that I represent, and I’m particularly proud of the government for that.

Mr. R. F. Nixon: How about the deficit? How does that agree?

Mr. Taylor: Just a minute. I’m going to tell you about some of the moneys that have been spent in just a small part of eastern Ontario, to illustrate just how fallacious and cooked were the arguments of the member for Ottawa Centre when he made his dissertation this afternoon. Unfortunately, he’s not here right now but maybe he can read about it.

An hon. member: He’s listening.

Mr. Taylor: I’m sorry that I’m not listening to you.

Mr. Germa: No, but he’s listening to you.

Mr. Taylor: That’s good. I hope he is, because he may learn something.

In housing, of course, much progress is being made in both the Picton and Napanee areas. There’s a new senior citizens’ home worth $426,000 or so in the Napanee area. We have a new county home going in in Prince Edward county for about $1.5 million. I mentioned this afternoon the kind of a deal we’re getting in terms of grants, but certainly over half of the tax bill of the ratepayers in my riding is paid by the Province of Ontario, and I think that the people are grateful for that.

Mr. R. F. Nixon: Grateful? It’s their money.

Mr. Taylor: In terms of education costs, the grants to the Prince Edward County Board of Education total about 79.3 per cent at the elementary level; at the secondary level the grants amount to 79.64 per cent.

Mr. R. F. Nixon: Norris never made a speech like this.

Mr. Ferrier: You must have heard. He is going down next year.

Mr. Taylor: So almost 80 per cent of the cost of education at the primary and secondary levels is paid by the province.

Mr. R. F. Nixon: That man ought to be made a parliamentary assistant.

Hon. Mr. White: This is the best speech I’ve heard this session.

Mr. Ferrier: Where have you been?

Mr. Taylor: The province also has been paying 87.86 per cent of the cost of operating the Hastings-Prince Edward Separate School Board. Maybe these are figures you don’t like to hear, because you wish the people to believe that the province is not doing very much for the people of eastern Ontario. I’m not for a moment saying that we don’t look for more because, of course, that’s the --

Mr. Ferrier: I thought you said the government was overspending.

Mr. Taylor: -- nature of the human animal, I suppose, to keep looking for more. But progress is certainly being made.

We have made substantial contributions to our library systems, to our museums. Through highways, of course, we have construction and maintenance. In Prince Edward county, for example, construction was $183,000, and maintenance $229,000. In Lennox and Addington, construction almost $200,000 and maintenance $277,000. I have a whole list of contributions pursuant to the tax stabilization grants programme which I mentioned was represented in the tax bills of the people of Prince Edward--Lennox.

In terms of job opportunity, again I mentioned earlier the projected jobs that were generated through the programme of the Ontario Development Corp. in terms of performance loans, and the many millions of dollars that have been put into eastern Ontario in connection with that particular programme.

That is to say nothing of the acquisition by this province of the lands that were owned by the federal government in Picton at Prince Edward Heights. They were acquired for some $1 million and the reconstruction and renovation costs are certainly in excess of about $3.5 million. This has generated a great deal of economic activity and job opportunity for not only the people of Prince Edward county and surrounding municipalities and counties, but I dare say of the province as a whole.

There were about a year ago some 365 jobs on the site which of course occupied peoples of all occupations and callings and professions, through the Ministry of Health, through catering services, the Ministry of Government Services, the Ministry of Education. The payroll in 1973 was something over $3 million a year, so we are particularly happy with the activities of the government of Ontario in terms of contributions to this part of eastern Ontario.

l think the economic impact on the area is obvious and certainly it has benefitted the commercial community as well. We are naturally looking for more job opportunities, and I’ve said in the past that we spend a great deal of money on education. We educate the young people in eastern Ontario, certainly in the riding that I represent. Sometimes the job opportunity is not available locally to accommodate the graduates of our schools, so they have to seek employment elsewhere. However, they have a lifestyle I think which is sought by many.

I think that the activity of the government in terms of economic development, the industry that it has enticed, the industry that it has helped through loans, will see more job opportunities made available for the people of eastern Ontario so that they can not only continue to live in the community in which they were raised, but also can establish their own homes and raise their own families in that community where they prize the particular environment that their forefathers developed and which they cherish very much.

It’s not a question of producing another Hamilton, a heavy industry locality. It’s a matter of generating jobs through a keen industrial and commercial development. I think that the government has done just a tremendous job in assisting in this programme. Naturally, we are looking for more assistance, more direction. I think that the thrust of growth and development in Ontario is more toward the east. You can see this happening and no doubt as time progresses development will take place there.

We are also particularly proud, Mr. Minister, in working with your programmes in terms of municipal organization, and we only believe in the unification of essential services where that unification accommodates the local people and serves a very useful purpose. We don’t believe in bigness for the sake of having something larger than the people next door.

But, with your programme of restructuring, where the initiative is left with the local people, we now are in a position to assess our municipalities to see what services might be unified so that they afford a better service and convenience to the public. Where that suits us then, of course, what we do is proceed in co-operation with the adjoining municipalities. That’s something that is being looked at today in terms of sewers and water, and it’s something that was looked at in Prince Edward county in terms of the restructuring of the county government itself.

So there’s no question that it is not a matter of pressuring the people of eastern Ontario to develop large regional areas. We’re particularly proud that we can direct our own growth, our own government, and can look after our own services. We’re not for centralization, we’re for local autonomy, so that not only do we have the right but we have the responsibility of governing our own communities.

We have experienced a tremendous co-operation from your ministry in that and also, I may say, the financial contributions have been significant --

Interjections by hon. members.

Mr. Chairman: Order, please.

Mr. Taylor: -- so we are assisted in developing our communities to play a more meaningful and, I suppose, a greater role in the economy of Ontario.

Hon. Mr. Winkler: Typical of the Davis government.

Mr. Taylor: As I say, I’m particularly proud that we have this philosophy which is guiding us, and I may say that the assistance that has been given has not been in terms of attaching conditions and strings so that we experience centralization rather than self-determination.

I think the financial assistance has not been minute. I don’t think that the member for Ottawa Centre, Mr. Chairman, was accurate at all when he looked at the people of eastern Ontario as the poor country cousins who were suffering from a lack of regard by this province in terms of the expansion of the eastern economy, I think that we are thankful for your programmes and your help. As a matter of fact, only yesterday the Minister of Industry and Tourism (Mr. Bennett) toured the Napanee area, and we have been assisted, through that ministry, in generating further jobs and opening up opportunities in eastern Ontario. I am sure that we’ll see more of that.

So I think that it’s essential to put a proper perspective on what’s happening in eastern Ontario. We can’t spend ourself into prosperity; at the same time I think that the direction of funds to the east, the direction of job opportunities to the east, means of course the growth in population of the eastern communities so we can become more self-sufficient in terms of cultural, social and economic amenities. I trust that that is the philosophy of this government. I trust that as the funds are allocated we will be getting at least our fair share of those funds so that we can continue to grow and develop and enjoy the economic prosperity of this province, which is second to none in any province in Canada, and of course the economy is second to none in the entire world.

I just wanted to put the record straight in that regard, Mr. Minister.

Hon. Mr. White: Mr. Chairman, these remarks and comments are very helpful and encouraging to me, I must say.

Mr. Lawlor: Just like Fortune magazine.

Hon. Mr. White: I stepped out of the chamber for a moment, but I want my colleague to know that I was listening to him from Mr. Speaker’s repeater out there.

Mr. V. M. Singer (Downsview): Careful.

Mr. J. R. Breithaupt (Kitchener): You will never get another chance.

Hon. Mr. White: Eastern Ontario is a delightful part of this province for a number of reasons. It has a quality which is lacking elsewhere. I’m not saying it is any better or any worse than western Ontario but it is very different and that difference is charming and very pleasant no doubt and very supportive to the people who live in that part of the province.

At the same time, it must be admitted that that part of the province has had less than its fair share of economic resources. We have attempted over the years to remedy that in a wide variety of ways. We are redoubling our efforts now. The EODC is just one of several examples that could be given.

I really do hope and believe that the Ontario Land Corp. will become a new source of financial strength and impetus to eastern Ontario, not just because the corporation itself will lend money to a large corporation for a large industrial centre from which all kinds of economic benefits will devolve but because the OLC -- and this is very very important in the scheme of things -- will have the power under the statute to lend money to some number -- I don’t know if I am talking about five or 55 -- provincial-municipal industrial parks in those municipalities which want to have such a facility so that their own young people can stay at home and be gainfully employed.

Mr. Singer: Fern Guindon would speak very highly of that.

Hon. Mr. White: So, as I said before, we will thereby create a hierarchy of industrial parks in eastern Ontario which I have no doubt --

Mr. Singer: He speaks of little else as he walks up and down the streets.

Hon. Mr. White: -- will attract attention not just from central Ontario but from corporations of one kind and another from all over North America and hopefully from all over the world. I really do believe we can do even more than we have done before, although I very greatly appreciate the constructive remarks offered by my hon. friend.

Insofar as the government structure is concerned, there isn’t the compelling need in that part of the province as there was on the periphery of Toronto to restructure local government. I have believed, as I said from the very first since I took this position, that the people in the areas concerned have the wisdom, the feel of the area, and are best able to put in place whatever improvements they want.

We have four counties now going through a restructuring study. Four are about to do so; four are considering it. That’s 12. Frankly, I would just as soon we slowed it down a little bit. I’m not pushing it at all. If Oxford county had said to us, “No, please don’t proceed,” I would have said fine. I say that to the member for Oxford (Mr. Parrott). He knows what I am saying is the truth.

We are not pushing these people at all. We are glad to see them take whatever time it takes --

Mr. Breithaupt: Even in Oxford.

Hon. Mr. White: -- to formulate their own points of view and to bring their people along with them because --

Mr. Lawlor: Of course you are not.

Mr. R. F. Nixon: That is intellectually dishonest.

Mr. Breithaupt: Even in Oxford.

Hon. Mr. White: -- part of the secret no doubt is to have the support which the new structure requires.

Mr. Breithaupt: Even in Oxford.

Hon. Mr. White: So, we are not going to take the initiative. We are not going to use unsuitable inducements. We are going to stand back and accept whatever decisions are made in the area.

Mr. Lawlor: So, you are not going to lose a single vote.

Hon. Mr. White: So I say that to my hon. friend and to all those who come from those parts of the province where there has been no such modernization attempt.

Mr. R. F. Nixon: Mr. Chairman, I wonder if the Treasurer’s statement falls into line with what he said this afternoon when he said he is not prepared to force it down anybody’s throat unless it is absolutely necessary. I have a feeling that in many respects his attitude is that. As long as people agree with him then he is prepared to agree with them, but if they don’t then it’s down the throat.

But I would like to change the subject, if you will permit me, Mr. Chairman, on a matter of policy on the first vote.

Mr. Lawlor: Discretion is the better part of valour.

Hon. Mr. White: I don’t remember saying “unless it is absolutely necessary”. I can hardly imagine a set of circumstances which would require me to move in. If it should happen that a community was heading straight into bankruptcy, I suppose I would have to make a grant to it or something. I don’t understand the Leader of the Opposition’s remark at all.

Mr. Singer: Put on a sweater and turn down the thermostat.

Mr. R. F. Nixon: Mr. Chairman, I wanted to just ask the Treasurer, with your permission, on another matter, to express his views on the policy of unconditional grants. There has been quite a programme of opposition to deconditionalizing certain grants that certainly all of us as members of the Legislature have been exposed to, but I had thought the statement made by the Treasurer had been a steady move toward deconditionalizing these grants.

Is it true that any thought of deconditionalizing, let’s say, conservation authority moneys and so on has been abandoned for the time being? Has the policy of the government changed in that regard? We might very well discuss it on another occasion but since it seems that we can discuss these matters under the policy vote, it seems to me that the policy of the government should be clarified in that regard.

Hon. Mr. White: Mr. Chairman, in April, 1973, I offered a list of 12 candidates for deconditionalization. In April, 1974, nine of the 12 were, in fact, deconditionalized and three were put over on to a new list of 14 or 16 candidates for deconditionalization. Now, let me set your mind at rest. I wouldn’t contemplate for an instant deconditionalizing grants to conservation authorities --

Mr. R. F. Nixon: That was on your list.

Hon. Mr. White: Yes, that was on my list of candidates.

Mr. Breithaupt: What about libraries?

Hon. Mr. White: I am coming to that. That was on my list of candidates. This was to invite MPPs, municipal councillors, conservation experts and others to offer opinions. That’s why it wasn’t done as a fait accompli. I have had some response from a variety of sources, including our own caucus, and I want to say in the clearest language possible, I wouldn’t contemplate --

Mr. Cassidy: Make it perfectly clear.

Hon. Mr. White: -- deconditionalizing grants to conservation authorities unless the conservation authorities themselves asked me to do so. No, no, now I am not finished. I am not finished yet. I have made this statement not once, but at least twice to the provincial- municipal liaison committee, which is the fountainhead for deconditionalization.

Now let me turn to library grants. I showed them in April, 1973, as a candidate for deconditionalized grants. Believing, as I do, that if they met the competition out on the streets of their towns they would get more money and not less, I had a meeting with this group some time before the April, 1974, budget came in, and I offered them five alternatives. I am sorry I cannot recapitulate all of those now, but to give you the essence of the alternatives, I said, “Would you like to try it for a couple of years and if it doesn’t work we will go back to conditional grants? Would you like to try it by regions and if it doesn’t work we will go back?” and a couple of other such alternatives.

I am sorry to say that the library association in convention a month or two ago touched on this list of five options without really fully debating it, and so I didn’t get the kind of response I had hoped for. Notwithstanding that minor disappointment, I now want to assure the House that I wouldn’t deconditionalize library grants unless the librarians’ associations agreed to one of the five alternatives, and this is not a new idea. This goes back a year.

Mr. Chairman: The Chair recognizes the hon. member for Kent.

Mr. J. P. Spence (Kent): Mr. Chairman, it has been very delightful to hear the remarks of the provincial Treasurer.

Mr. R. F. Nixon: Almost entertaining.

Mr. Spence: Of course, Mr. Chairman, I am not an economist, I am just a layman in finance.

Mr. R. F. Nixon: Good common sense.

Mr. Spence: Actually, Mr. Chairman, I have to rely on the newspaper. After listening to the Treasurer outline the financial conditions of this province, you pick up the newspaper and you read some of the articles that come before your eyes. I saw a few days ago in the Globe and Mail: “A Quiet Panic Hits Ontario Cabinet.” This is what it says. Actually you want to keep it hidden. You get all the blankets to cover it up. I am not going to take up too much time, but it says here that to meet the increased range of services demanded by the modern urban society “the current Ontario budget increased the amount going to municipal governments to 29 per cent of total spending, about $2.3 billion. Without this aid, according to Treasurer John White, there would be only two alternatives: ‘Huge mill rate increases, which would be a regressive form of additional taxation, or the virtual collapse of local government.’ And there will be large mill rate increases next year anyway ...” Now what are we to believe as laymen when we hear your remarks that the financial condition of this province is tremendous, and you look at the increase in interest paid on the capital debt of this province, and then we see it is reported to have cost an extra $25 million to have those six regional governments in the Province of Ontario?

As a layman, Mr. Chairman, it staggers me to read these articles in the paper that we are in sound financial condition. If these regional governments were a better way of government, you wouldn’t have to give increased grants.

Why wouldn’t the grants be the same for the local governments that aren’t in the regional government? You give larger grants to the regional governments than you do to those municipal governments that aren’t in regional government. It staggers me that you have to give financial incentives to encourage people to go into regional government.

Now, if it is such a good thing -- and regional government has been in force for quite a number of years -- why does this government have to give such financial incentives to encourage people to form new regional governments?

I notice they have changed the name from regional governments to structural governments. Why would you have to change it? The people who aren’t members of this Ontario Legislature are a lot smarter than the ones in it. It staggers me to listen to some of the remarks that we are in sound financial condition.

Hon. Mr. White: That was not my phrase actually, that was the Wall Street Journal quoting Moody’s rating service saying we are in sound financial condition. Those were their words, not mine.

Hon. Mr. Grossman: You agree though, don’t you?

Hon. Mr. White: I agree, but I don’t want it thought by anybody here that I would be immodest enough to apply those words to my own budget.

I want to acknowledge, in the pacific mood in which I find myself, what a great pleasure it has been for me to associate with J. P. Spence, the MPP for Kent for the last 16 years. I worked as a boy, at 15 and 16 years of age in Leamington, not so very far away from the hon. member’s riding and I gained a great deal of admiration for the quality of life down there which, as I mentioned earlier, is somewhat different, I believe, from that of eastern Ontario, but equally delightful.

Mr. R. F. Nixon: Are you sure you are giving up politics?

Hon. Mr. White: Now my hon. friend is quite rightly confused. He is confused by a very good columnist on a very bad day, and maybe by a very bad columnist --

Mr. Breithaupt: On a very good day.

Hon. Mr. White: -- on a very good day. He is confused, secondly, by his own leader who has used this $25 million figure. Even if his leader were right, we would be talking about less than one per cent of our total grants to municipalities.

Now, sir, since the great tax reform budget of March, 1969, we have increased our grants by $1.1 billion; we have kept property taxes more or less where they were and we have diminished --

Mr. R. F. Nixon: Where they were in 1969? Baloney.

Hon. Mr. White: -- property taxes as a proportion of gross provincial product from -- I think -- 4.7 per cent to 3.8 per cent. We did it deliberately, for reasons we have gone into before.

Why are regional government grants larger than non-regionalized areas? Because they’re taking greater responsibilities, including all the planning responsibilities, from us here at Queen’s Park.

Now, I had the privilege this morning, at 7.30, of going to a breakfast meeting --

Mr. Breithaupt: It’s good to be up early isn’t it?

Hon. Mr. White: -- at the ACRO convention in Windsor. And I had the privilege of speaking to several hundred people at that early hour.

Mr. J. F. Foulds (Port Arthur): It must have been a shock for them if not for you.

Hon. Mr. White: Naturally, I was pleased at the close attention they paid some of my words, including the following.

An hon. member: Naturally.

Hon. Mr. Grossman: At 7.30 in the morning, gee!

Hon. Mr. White: “When I speak of providing” -- I’m quoting from myself here, a sign of an egomaniac.

Mr. Breithaupt: There’s an unimpeachable source!

Hon. Mr. White: I’m trying to enlighten the hon. member for Kent.

Mr. Lawlor: I thought reading your own speeches was against the rules of the House.

Mr. Chairman: Order, please.

Hon. Mr. White: To continue:

When I speak of providing every available dollar, I am not indulging in rhetoric. I’m referring to the $2.4 billion that we’ve passed along as transfer payments to local governments this year, a figure representing an increase of $250 million over last year.

I’m also referring to what we call our Edmonton commitment, a two-part undertaking in which we have pledged first to increase our transfer payments to the municipalities at the same rate as provincial revenues increase. And second, to pass along to the municipalities, 100 cents of every new dollar of revenue we receive from Ottawa.

I’m going to skip a few paragraphs here.

Hon. Mr. Grossman: Read it all, it sounds pretty good.

Hon. Mr. White: I provided a set of tables for the wardens, chairmen, councillors and others who were in attendance.

Mr. Foulds: I hope they were more accurate than the ones tonight.

Hon. Mr. White: And I said to them:

As you examine the tables in this document you will see that the province has substantially shifted the burden of taxation from real property in order to make the Ontario tax system more progressive. As a result, we see the provincial revenues have increased, making it possible to decrease municipal taxes from 4.3 per cent of gross provincial product in 1968 to 3.7 per cent in 1973.

Mr. R. F. Nixon: Putting it all in sales tax.

Hon. Mr. White: I continued:

To focus on the question of mill rates, we selected 20 municipalities more or less at random, making sure there was some balance between urban and rural municipalities. Examining their mill rate increases we find they averaged only 10 per cent for the entire five-year period. Such a modest increase of two per cent per year does not include one particularly significant factor. It does not take into account the extent to which tax credits have reduced the regressiveness of property taxation.

The old property tax reduction programme cost Ontario taxpayers $110 million in 1968. Since then, with the introduction of our current system of property tax credits, and supplementary benefits to the elderly and farm tax rebates, we’ve increased this form of assistance by $155 million, which means the total for 1973-1974 is about $265 million.

Now, I don’t want to go on too long. You’ve been very patient with me. I’ll read the next two paragraphs, that’ll be a compromise.

Hon. Mr. Grossman: They’re not enjoying it.

Hon. Mr. White: I said:

At the same time, transfer payments from the province to the local sector have increased by $1.1 billion. This sum has been financed largely by the provincial tax increases I referred to a moment ago.

The conclusion, Mr. Chairman, is inescapable. The province has been raising the money and passing it along to the local governments to enable higher levels of municipal services combined with a decreased dependence on regressive municipal taxes.

Now, I’ll be glad to read the rest of this if anybody so desires.

Hon. Mr. Grossman: I do.

Mr. Chairman: The hon. member for High Park.

Mr. Shulman: Mr. Chairman, isn’t it wonderful how the Treasurer is able to distribute all these billions of dollars he talks about without running deficit financing, without raising the money by taxing? He is indeed a miracle worker.

Hon. Mr. White: I didn’t raise taxes. Don’t forget that.

Mr. Shulman: I want to pursue this myth which he is trying to propagate so well that we are not using deficit financing because if we follow his tortured logic and take it down to Ottawa, they too are apparently running a surplus. Does the minister think that they are using deficit --

Hon. Mr. White: They are $2 billion in deficit.

Mr. Shulman: Ah, you’ll accept that they have a deficit? Because --

Mr. Breithaupt: Like beauty, it’s in the eye of the beholder.

Mr. Shulman: Oh, I see. In other words, if we are in Ottawa, we balance off revenue and expenditures. But if we are in Toronto, at Queen’s Park, it doesn’t work that way. It’s just so ludicrous it’s not debatable.

The minister said one thing, though, that is worth commenting on briefly. He made a great, important point of the fact that we are only using in Ontario some 11.3 per cent of the gross national product.

Hon. Mr. White: Gross provincial product.

Mr. Shulman: All right.

Mr. Breithaupt: It is just as gross.

Mr. Shulman: Well, what difference does it make? It’s completely irrelevant. All you are doing is comparing our performance with that of the other provinces.

Hon. Mr. White: It would be about 3.5 per cent of the gross national product. That’s the difference.

Mr. Shulman: What difference does it make whether that figure has gone up or gone down?

Hon. Mr. White: That is the difference it makes.

Mr. Shulman: It makes no difference. It’s a matter of numbers. The only difference is whether you are spending less than you’re taking in.

Hon. Mr. White: We are spending less than we are taking in.

Mr. Shulman: It is absolutely incredible. There are even smiles in the rows where your advisers are sitting.

Mr. Breithaupt: Even among those who are standing.

Mr. Shulman: I have got to come back to something the Leader of the Opposition said because he said something which you brushed over but which is probably the most important thing said in this debate.

What you are doing, and you may kid your followers -- they may cheer for you and you may fool the press and you may fool the public, but everybody in this room knows it -- is that you’re running deficit. What this means is when the time comes when we have unemployment here, and this is the point that was raised by the Leader of the Opposition -- give him full credit -- you are not going to have the leeway to increase your expenditures.

Hon. Mr. Grossman: God is listening.

Mr. Shulman: Well, thank goodness somebody is listening. The minister isn’t listening. It’s a two-sided tragedy. You’re producing inflation on the one hand and on the other you are reducing the possibility of a future minister to respond to a deflation, to a depression, to unemployment, because the classic --

Hon. Mr. White: It is not likely.

Mr. Shulman: It is indeed.

Hon. Mr. White: Get a grip on your paranoia. You are completely incorrect.

Mr. J. E. Bullbrook (Sarnia): Do you realize what he just said? “Get a grip on your paranoia.”

Mr. Chairman: Order, please. The hon. member for High Park has the floor.

Mr. Bullbrook: Do you understand what that means?

Hon. Mr. White: My hon. friend wrote a book telling people how to benefit from paper manipulation --

Mr. Shulman: I have not finished. Sit down. Mr. Chairman, do I have the floor? He is out of order.

Hon. Mr. White: -- which is one of the root causes of inflation. There is where the villain stands -- across the aisle.

Mr. Shulman: Mr. Chairman, since we are on that personal note, yes, I did write a book telling people how to make money by profiting from the mistakes of government ministers; but I wish I had saved that book until tonight because I have never seen one who is making as big a mistake as you are making.

Of course, people are going to make fortunes from your mistakes. If you insist on producing inflation, of course speculators are going to take advantage of it and, of course you are going to make millionaires here, there and everywhere else. The tragedy really is what is going to happen two or three years from now when the minister has gone smelling the onions, as he said, and we have some other minister who has to sit there thinking, “What am I going to do with unemployment up to nine or 10 per cent when my predecessor refused to cut his budget, refused to save where he could and refused to live within his means?”

When that time comes, then we are going to have only one recourse. Then you are going to have to go down to Ottawa and you are going to have to plead with them and say print some more. The minister won’t listen to me and I suspect that nobody else will either, but I say to you, Mr. Minister, you and I are leaving this House very shortly. You said to me I should let the passions of my political party leave me. I say they left me a long time ago. I say to you -- and I mean this from the bottom of my heart -- you are destroying the economy of this province. You are insisting on spending money we do not have. You are insisting on counting as revenues the deposits people make in the savings banks and loans people repay to you. This is a cruel charlatanism which is going to come back to haunt us all.

Hon. Mr. White: I say to you from the bottom of my heart, that we are taking in more cash than we are putting out, that in this and other ways we have a deflating effect, and that we have ample capacity to provide a very high level of public services which will no doubt evolve over time and will take in more areas. At the same time, we have unused credit capabilities, as proven once again by the triple A rating, which can be wheeled into place when needed to put great public works in place to utilize whatever underemployment of our resources there may be some months from now.

There are a number of reasons why governments must incur debt. My hon. friend from Lakeshore dealt with one of them earlier today: To bring unused resources into employment during a recessionary phase of the business cycle. That’s an entirely appropriate reason and one which we ourselves wall adapt when it’s appropriate. It is not appropriate in 1974.

Mr. Shulman: But it is not appropriate today and you are doing it today.

Mr. Lawlor: Not just in a recessionary cycle; at other times.

Hon. Mr. White: We are not doing it today. It is absolutely essential to provide that source of savings, that avenue for investment in the public sector.

Hon. Mr. Grossman: That is what your party wants us to do.

Hon. Mr. White: It is necessary to have roads, just as it is necessary to have trucks. So there are a number of reasons why we are well advised in a period of underemployment to fully utilize the credit capability of the province. This is not the year and that’s the reason we are taking in more cash than we hand out and that is the reason why we bought $594 million worth of bonds from the market in the last 20 months.

Mr. Shulman: But you have placed another $960 million.

Mr. Bullbrook: I want to, if I may --

Mr. Chairman: The hon. member for Sarnia.

Mr. Bullbrook: I hesitate to come after the member for High Park because of the fact that we all know he has a degree of expertise in the field of finance and economics.

Hon. Mr. White: Medicine.

Mr. Bullbrook: I beg your pardon? Medicine?

Hon. Mr. White: He is an expert in taking out appendixes.

Hon. Mr. Grossman: And how to come to grips with paranoia.

Mr. Bullbrook: I would think he has some degree of expertise. I know he has considerable more expertise, Mr. Chairman, than do I.

Hon. Mr. White: I don’t think he has.

Mr. Bullbrook: I want to say this to you, if I can quietly, and with as much respect as I can muster for the Treasurer of Ontario: I think he has more expertise than you do because you are full of sound and fury and you really signify nothing of any consequence.

There are some of us here with some knowledge about things you do and say. You said to the member for Thunder Bay this afternoon: “Do you read my speeches?” And he said: “Yes, I read your speeches. I read the speeches you make in Newfoundland.”

I have read speeches you have made and I looked at the rationalization you have made. I read a speech you made on Sept. 10. I don’t have the text here so I want to say this, Mr. Chairman: Every time I misquote you, I invite you to get up and resist what I say.

You spoke to the Canadian Club in New York on Sept. 10. Correct or not correct? Correct.

And you spoke about the new taxes in Ontario. Correct or not correct? Correct.

And you began with the mining tax. Correct or not correct? Correct.

And you went to the land speculation tax. Correct or not correct? Correct.

And then you talked about the land transfer tax and this is where you are so insidiously pompous, full of sound and fury and spewing forth nothing but platitudes. Let me tell you what you said. They have given me a copy of your speech.

I think it’s on page 7. You talked about the criteria for exemptions under the Land Transfer Tax Act, matters of policy promulgated by this government to substantiate an imposition of a tax to create speculation in connection with land, to control foreign investment, but premised on a revenue position. Not a primary position, a secondary position.

Hon. Mr. White: Mr. Chairman, on a point of order, it was not page 7, it was page 11.

Hon. Mr. Grossman: Seven eleven.

Mr. Bullbrook: I knew I would make one mistake tonight. Page 11, right?

It is to a group of businessmen in New York that he is rationalizing these taxes. I won’t even talk about the rationalization of the mining tax because this was a superior effort on his part. I won’t talk about the burden he placed upon the Minister of Revenue (Mr. Meen) in connection with the land speculation tax because that’s a burden we have seen over the past. But I want to quote for you, Mr. Chairman, his part about the criteria available to the government in objectively evaluating the exemptions available to those who sought those exemptions in connection with the Land Transfer Tax Act.

I quote them from memory. I believe the first one to be the creation of new employment. Correct or not correct?

Mr. Breithaupt: Correct.

Br. Bullbrook: I believe the second one was the advancement of technical research. Correct or not correct?

The third one was, of course, something that has really occupied the time of the member for Thunder Bay and others; the resurgence of the economy of northern and eastern Ontario.

Now, the fact of the matter is this -- and I put it to you, and I want you to interrupt me -- I say to you in connection with every exemption that has been approved by the government of Ontario, not one of them met all the criteria -- not one of them. These weren’t criteria that were exclusive each to the other. These were concurrent criteria all put together. These were the things that the government said as a matter of policy they wanted. He throws up his hands.

I intend to get to some other matters. I just want to begin by showing you that you go around mouthing these things throughout this country and other countries, making a fool of yourself and your government and coming back and doing nothing of the things that you say you would do.

I invite you to my own riding. I have told you by press release. You have responded by a platitude of itself that the tax really wasn’t a tax, it was an effort in policy. I asked you this afternoon. I accepted your premise. I began by accepting your premise that your intention wasn’t to tax. You got up in your place and your first answer was, “Well, you must realize that we didn’t intend to tax.” I began by accepting your premise, that rationalization, as stupid as it was. If you have a policy to develop, then develop from the tax point of view.

I take the position, and I hope everybody in the Legislature takes the position, that a tax is a tax. We talked about this during the debates in connection with the imposition of these taxes. I hearken back to this, Mr. Chairman; not once was he in the House, not once did he join that debate. He burdened his colleague, the Minister of Revenue with carrying these bills through the House, when we were vitally concerned with the principle of taxation. And surely if there is something that is concurrent with parliamentary responsibilities and a democratic government, it is the equal disposition of taxes to the public. There is nothing in this statute from a policy point of view that conveys that, because in my own riding a company from the United States was dispensed of $800,000 worth of tax. Who dispensed them of that? The Treasurer and, of course, his advisers.

Maybe they did it in good conscience, and maybe it was worthwhile. I don’t know. I am not prepared to say that. I am not prepared to say that I didn’t want that dispensation effected. I am prepared to say this to you, though. I am not prepared, as a member elected by the public, to let the public servants or any ministers of government in a very discretionary and arbitrary fashion, outside the ambit of the criteria that they established themselves, to come to these conclusions. We can’t do that.

What do you think the people would think of us if we say we will make our decision on whom the tax is imposed and on whom it is not imposed? Taxes aren’t developed for that purpose. If the purpose of taxes is to resist land speculation, let’s develop policies that will resist land speculation. If the purpose of taxes, Mr. Chairman, is to stop foreign control of land, let’s stop foreign control of land by policy and legislation.

I say this to you without reservation, let’s not leave it to a group of public servants or ministers sequestered in some room, to make some subjective evaluation as to whether taxes should be imposed upon one citizen or not upon another citizen. That is not right. It never will be right. And that is what we have done. I tell you what we have done. We have done this, Mr. Chairman, on the basis of the budget speech that he made.

I want to say this to you. He misled the Canadian Club at New York in respect to those criteria, none of which have been adopted by this government -- not on one occasion. I have invited him to get up now and tell me I am wrong. Not once in connection with the exemptions that he has given to the foreign companies in taking over control, not once have these criteria been adopted. Not only did he mislead the Canadian Club, but he misled this House. And I want to say to you that I am within the parliamentary rules.

Hon. Mr. Grossman: It is unparliamentary.

Mr. Bullbrook: I am saying to you that I am within the parliamentary rules because he didn’t intend to mislead this House. He didn’t know better.

Mr. Chairman: The hon. member for Sarnia has made a statement that the hon. minister misled the House. I think that he should take that back.

Mr. Foulds: Unknowingly.

Mr. Chairman: I think it is very unparliamentary that any member makes a statement that the minister misled the House.

Mr. Bullbrook: You shouldn’t do this to yourself, really, because you are going to divide the House.

Mr. Shulman: He has done that 20 times tonight.

Mr. Bullbrook: If you think for one moment that I am going to retract what I just said, just get away from it, because don’t you understand that I just said, “He misled the House. He didn’t know he was misleading the House; he didn’t know any better.” Now, if you think that’s unparliamentary, I want to say to you, sir, that if you are demanding that I retract that, I just can’t retract it because it’s a stated fact substantiated by the circumstances.

Just this afternoon he said that he made a guess, you recall, in answer to my question. The Treasurer, who is responsible for $8 billion of budgeted expenditure -- and one would hope budgeted on the premise of revenues -- agreed that he had guessed, and the guess was 8,000 per cent wrong. That’s what he said. Now, if you want me to retract that, I can’t retract it.

I say to you that I have too much respect for you, Mr. Chairman, to challenge what you say. Please reconsider the fact that I am not suggesting that he overtly misled the House; I’m saying that he didn’t know any better. We all know he didn’t know any better; he just didn’t know any better, that’s all. He said he guessed -- right? He guessed. Now I ask for your ruling.

Mr. Chairman: Well, what the chairman heard in the first place was that he accused the minister of misleading the House. Then after I made the statement that it was unparliamentary to say that the minister was misleading the House, you had some different version of what you said in the first place. Shall we let it stand as it is and let the minister speak for himself?

Hon. Mr. Grossman: He withdrew it, in other words.

Mr. Bullbrook: I am very much appreciative of your indulgence. I am very much concerned about this whole issue. I, of course, disagree with the provincial secretary for whatever he does, saying that I withdrew it -- I didn’t withdraw it, I am interested in what the provincial secretary does, really. That’s a digression -- I shouldn’t give into it.

Hon. Mr. Grossman: I don’t speak when I have nothing to say -- let’s put it that way.

Mr. Bullbrook: No, that is true. It keeps you silent most of the time, really.

Hon. Mr. Grossman: It might be better if you did likewise. What vote is this on, Mr. Chairman?

Mr. Bullbrook: If you weren’t involved with your responsibilities, you’d never have anything to say. Today the House leader, the Chairman of the Management Board, talked about saving money. God, what a way he could save money by dispensing with your job, because you do nothing. In any event, let’s not be deflected for a moment. I don’t know what the House leader said; I’m really not interested, because of course there really is no greater lack of talent in the whole place than the House leader.

In any event, I don’t want to be deflected, I wanted to use this as an example of the fact that the Treasurer -- my leader just mentioned it a moment ago -- stood in his place today and talked about intellectual dishonesty. There never was a greater example of that than the Treasurer’s response to the member for High Park just a moment ago when he said in effect that we’ve got more money coming in --

Hon. Mr. White: Your leader had the greatest of blush and quite rightly so.

Mr. R. F. Nixon: I am always embarrassed in your presence.

Mr. Bullbrook: -- that we’ve got more money coming in than we have going out.

Mr. Shulman: This is scary.

Mr. Bullbrook: This is the type of intellectual dishonesty on which that speech, and almost every other speech made by the Treasurer, is based. The interesting thing, as is the situation with most of the frontbenchers on the government side, is that when you touch them closely they don’t want to listen. The fact of the matter is that when I came in here in 1967 the budget of Ontario was $2.4 billion --

Hon. Mr. White: And Ross Whicher was crying, “The sky is falling.”

Mr. Bullbrook: This year, it approaches $8 billion -- and there is a contemplated deficit of $800 million. The deficit alone this year is a third of the total budget that confronted the elected people only seven years ago.

Mr. Shulman: But he denies there is a deficit.

Mr. Breithaupt: That’s right.

Mr. Bullbrook: Mr. Chairman, we can talk all day, but I think the prime consideration of the people of Ontario right now is the question of inflation. I think it is also a concern of the federal government.

The member for High Park has said he’s getting out. The Treasurer is getting out. There is a triumvirate; I’m leaving too. I’ve enjoyed it very much, but I’m not going to run again. One of the prime reasons I am not going to run again -- and I make no bones about it -- is the fact that the legislative process has changed completely. Tonight, for example, we are dealing with the Treasurer’s estimates -- the essence of digesting the expenditure of $8 billion -- and what have we got in the House? We have three cabinet ministers. There is nothing new in this.

Mr. Cassidy: There are some who will leave voluntarily and some who won’t.

Hon. Mr. Grossman: Mr. Chairman, I rise to a point of order. The hon. member has made some reference to the fact that at this moment there are only three cabinet ministers in the House, and a few moments ago he said something about us not listening when he’s speaking. Half of his caucus, sitting in seats behind him, are reading newspapers. Let that be recorded.

Mr. Breithaupt: Speaking to that point of order, Mr. Chairman --

Hon. Mr. White: And there are other cabinet ministers in the standing committee.

Mr. Breithaupt: I’m quite sure that the point of order is valid, and of course, we could very quickly call for a quorum count in the House. If such were the case, I think it would be apparent that there are perhaps some dozen or so members of the government side present, some six members of the NDP and some nine or 10 members of the opposition present.

Hon. Mr. Grossman: Your member made the reference there is nobody listening. We are the only ones who are really listening.

Mr. Breithaupt: I rather doubt that the minister is listening all that closely --

Hon. Mr. Grossman: We gave him full attention.

Mr. Shulman: Your Treasurer is not listening,

Mr. Breithaupt: -- because if you were listening, you would change the things that were going on; and if you weren’t listening, you’d carry on the way you are.

Mr. Chairman: The hon. member for Kitchener has no point of order.

Mr. Breithaupt: But it was the minister’s point of order to which I was speaking, Mr. Chairman, not my own. If I didn’t have one, he certainly didn’t.

Mr. Chairman: There is well over a quorum here.

Hon. Mr. Grossman: Well, you dropped your paper anyway.

Mr. Bullbrook: I don’t want to speak to the point of order by the provincial secretary, but I want to tell the hon. member for St. Andrew--St. Patrick -- and this is no intellectual dishonesty -- that I really do not know what he is secretary of. I think it is social development -- I think it is.

Hon. Mr. Grossman: I don’t care whether you know or not. I couldn’t care less whether you know. That is probably why the hon. member is leaving. He doesn’t know a lot of things.

Mr. Bullbrook: I’m not asking whether you care. Would you understand for a moment that I’m just telling you I don’t know and many people don’t know.

Mr. Cassidy: He has a monumental impact on the province.

Hon. Mr. Grossman: All fury and no sense. Why don’t you say something? A lot of noise.

Mr. Bullbrook: The tragedy --

Mr. Shulman: He has said a lot of sense tonight.

Mr. Bullbrook: If I may, Mr. Chairman, the tragedy of this whole exercise, when we hear that --

Hon. Mr. Grossman: You are wasting the time of this House.

Mr. Chairman: Order. The member for Sarnia has the floor. Let him speak.

Hon. Mr. Grossman: He is not on the vote.

Mr. Bullbrook: When we heard the House leader speaking this afternoon -- and I think this is referable to the vote, because it has to do with the Treasurer’s estimate; that is, the expenditure of public funds which are involved in revenue. When we hear him saying, “We are going to hold the line,” then surely we must of necessity, as a matter of logic, say to ourselves: “Aren’t there methods of holding the line?” And this is why you come to mind immediately. Like night to day, it comes to mind. It really does.

But I want to get back on the point, because really you are significantly insignificant. You have no function at all.

Mr. Chairman: Order. Order, please.

Mr. Bullbrook: You used to play the court jester; and you don’t any more. The fact is, Mr. Chairman --

Mr. Chairman: Will the member for Sarnia get back on vote 1001?

Mr. Bullbrook: Mr. Chairman, I wonder whether you would know the difference. But in any event, may I say this to you, Mr. Chairman: I was trying to outline, for example, just one example of a speech made of complete intellectual dishonesty. You see, I can’t be asked to retract that because the Treasurer accused my leader of that this afternoon, and the Speaker didn’t ask him to retract.

It’s intellectual dishonesty when the Treasurer speaks to a group of businessmen in New York and says: “Those are the criteria that we will establish in connection with the resolution of our decision with respect to exemptions under this tax.”

I invite him now to interrupt me and give me one example where those criteria were -- all right, one example where every criterion was met; the creation of new employment --

Hon. Mr. White: Mr. Speaker, I have in my hand the speech in New York --

Mr. Bullbrook: I don’t yield. Sir, I don’t yield. Now wait.

Hon. Mr. White: -- and I would like to read the wording of the paragraph on which these allegations are based.

Mr. Bullbrook: Mr. Chairman --

Hon. Mr. White: I ask the members here in their fairness --

Mr. Bullbrook: Mr. Chairman, I don’t care one tittle about the members and their fairness. I don’t yield unless he is going to give me one example --

Mr. Shulman: He can’t give you an example. There isn’t one.

Mr. Bullbrook: I yield if he will give me one example of where the discretion was exercised where those criteria were met -- one example. Other than that, I don’t want any speech. Oh, no, not a quotation from that speech.

Mr. Chairman: The member for Sarnia has asked the minister to give him an answer.

Hon. Mr. White: Homes Insulation --

Mr. Bullbrook: Mr. Chairman, I want an undertaking from you that he is going to give you an example where the three criteria were all accepted and all fulfilled in connection with the exercise of the exemption. Would you ask if he is going to give you that?

Hon. Mr. White: Homes Insulation --

Mr. Bullbrook: No, I don’t yield. I don’t yield.

Mr. Chairman: Will the minister --

Hon. Mr. White: Is the --

Mr. Bullbrook: Mr. Chairman, I do not yield. I don’t yield.

Mr. Chairman: If the minister doesn’t have a reply then the member for Sarnia wants to carry on.

Mr. Bullbrook: The fact of the matter is he began with the words “Homes Insulation.” Homes Insulation was the acquisition by Babcock & Wilcox -- right? -- of United States Homes Insulation, a principle asset of John Blund. He had gone to the federal government and cried to the Foreign Investment Review Board and he must, of necessity, have co-operation. And of course, they are just as bad as you people are; just as bad. You are two birds of a feather, all the time. He got the higher-ups to agree with that.

You see, as the minister went along in his New York speech he talked about the acquisition of Homes Insulation and he said, “It protected the continuity of employment.” That’s what he said.

Of course it didn’t create any new employment. It didn’t create technical research. Of course, what it did was to acquire property in the highest capital outlay area -- not just in the Province of Ontario -- in the Dominion of Canada. Do you think you need a new industry in Sarnia? You need it like you need a hole in the head. We have got a half a billion dollars worth of industry going on in Sarnia. You don’t need an American company coming in to acquire Homes Insulation. Read his speech. That’s what he was going to get up to tell you. He was going to read the end of his speech saying it would protect employment. It wouldn’t protect employment one tittle. You dealt with one of the greatest pirates of business in our area, who wanted to effectuate a significant gain and leave the country, in effect, for new and other adventures.

That’s what Blund wanted to do. He wanted to get out of the business. He was strapped for cash. That’s all it was. And of course you just went to bed with him. This is the point I made in my comments this afternoon. This is the invitation to disaster that that type of subjective discretion gives. You say to a person, “You don’t have to pay $800,000 worth of tax.” What happens when you go to him at the next election and say, “Would you like to make a contribution to our party?”

Mr. R. F. Nixon: He is lined up.

Mr. Bullbrook: Lined up is right. Johnson & Johnson in Guelph are lined up for $200,000. One after another they are lining them up. The whole aspect of that type of tax is nothing but a charade, a revolting enterprise as far as the public is concerned.

Hon. Mr. White: Look at the minister.

Mr. Bullbrook: I look at the minister because of the fact that the minister has one of the finest public servants as his deputy, and he is subjecting that man to the administration of that type of partisan, political opportunism. That’s all it is.

I use that as an example to show that your popped-up buffoonery, when you get up here in the House saying, “I love eastern Ontario. Oh, it is a grand part of the province. And I love western Ontario,” doesn’t fool us for one moment. The fact is, you are the architect of nothing. The greatest thing you are the architect of is a lack of combating the inflationary tendencies of our economy. And you want to get up in your place with your colleagues spread across that House and say it is the fault of the federal government.

I am the first to join you. I would like a little more initiative on the part of the federal government. But I invite the subject. I have no personal or professional respect for the Treasurer, none whatever, Mr. Chairman. But you are in power and I’m not. I am getting sick and tired of the involvement I have with Community and Social Services.

Hon. Mr. White: Come off it.

Mr. Bullbrook: I am getting sick and tired

-- I don’t know whether other members are -- of people on fixed incomes coming to me and saying, “I just can’t live on this.” I am saying to you: “Fine, you fight the federal government. You act as a burr under their saddle, you act as a catalyst and we will be behind you.” We don’t act as Boswell to their Johnson, and my leader will be the first one to say that we don’t and we never will.

But you begin something. You stop the deficit financing that has a tremendous inflationary tendency. You stop the stupid administration of programmes like the drug eligibility programme, where people, because of the stupidity of administration -- not said by me, but said by the people in your Ministry of Health -- saying it was promulgated too quickly. It was an exercise in futility before it began.

Surely to goodness you must have people come into your office as I do, saying, “Mr. Bullbrook, my druggist will not fill this prescription and I must have it.” You phone the druggist, and this has exactly to do with what we are talking about -- the expenditure of a million dollars of public funds foolishly. Surely to goodness the GAINS programme and the drug eligibility programme were meritorious in concept. But of course what you do is just throw the money away for the purpose of straight political advantage.

I am concerned about the inflationary tendencies on my constituents of fixed income. I will be out of here in another year. My responsibility will be finished, but I wonder when you get up and laugh at the sincerity of our comments and our questions, whether you are involved with this or whether you have some executive assistant who is involved with it.

The time has come when we’d better have some straight talk from you. What programmes are you eliciting now in connection with spiking inflation? What are you going to do in connection with the Province of Ontario? I’m no expert -- I’m a small-town lawyer -- I don’t know my economics from second base. I don’t. But I am the very first one to admit it. But as I am responsive to what I read, I would think that something should be done in connection with the question of credit buying. I think that is essential. I think something should be done in connection with the field of compulsory saving. It seems to me that is essential.

Mr. E. M. Havrot (Timiskaming): Talk to Pierre in Ottawa.

Mr. Bullbrook: And it doesn’t have to be done in Ottawa. We can lead the way. If we pride ourselves here on being the richest province and the most progressive province -- and we are --

Mr. Breithaupt: We usually do.

Mr. Bullbrook: -- surely to goodness we can be rich and progressive in connection with the fight on inflation. I invite consideration of something from a small-town lawyer. Why not a compulsory savings programme, for example? Why not a surcharge on the provincial income tax in connection with people who pay a tax in excess of $1,000, a 10 per cent surcharge of compulsory savings at a guaranteed rate to be used for houses? Just a thought. I don’t know whether it would work. I have no idea. But it seems to me that if a person is going to pay $1,000 worth of tax, it is not --

Mr. Shulman: Sure it would work.

Mr. Bullbrook: -- not an undue --

Mr. Havrot: I don’t know what he is saying but it sounds good.

Mr. Bullbrook: Oh God, if that fellow would only shut up over there. He makes no contribution to this House -- the member from Kirkland Lake -- none whatever. But in any event --

Mr. Havrot: I make my contribution to my constituents.

Mr. Bullbrook: I want to say to you I am very sincere in this. I ask because you hold yourself out --

Mr. Cassidy: Your best contribution to your riding is running outside of it.

Mr. Bullbrook: Your moment, if there are moments of vainglory involved with you, and we all have them, is when you talk about your dealings as a professor of economics. So help me, it seemed to me that from what I understand, one of the necessities is basically a retrenchment of spending.

And I ask you to consider the question of some type of restraint in connection with credit buying. I don’t have to be an economist to realize that it can’t be a carte blanche restraint. It can’t. For example, all industry, basically, is dependent, under our economic system, so much upon credit buying. I’m not asking for that. But give us some invitation. Make us stop listening to radio commercials that say to people, “If you want to buy a new car tomorrow, come on in to Trans Canada Credit and we will give you whatever you want.” These are things we talked about years ago. And we now start to say to ourselves having regard to the situation economically, is this really appropriate?

But I want to ask you, as an economist so-called -- and I don’t mean that in a derogatory way because I don’t really know whether you are an economist or not -- I want to ask you really from what I understand. I think it is really essential that government guide and government lead. We no longer can get into phoney baloneys about speeches to the Canadian businessmen in New York. It has no essence of purpose, no integrity of purpose, no foundation in fact.

What we need now from the Treasurer is for him to get up and say, “People of Ontario, we are going to begin. Trudeau doesn’t want to begin. Turner doesn’t want to begin. We’ll begin. We say to you this is what has to be done; we will tighten our belts.” Not with platitudes about holding the public service at the level that it is -- that really doesn’t answer the question, you know it doesn’t. How much of the gross provincial product is paid for the public service? Perhaps too much. But holding it at that level isn’t the answer.

I invite your consideration of something like a compulsory type of saving programme that would fund the housing that is needed in this province.

I say to you, through the chairman, that I am vitally concerned with the older people who come in to me. I think frankly in all sensitivity you would be. I don’t know whether you are dealing with them now or whether your executive assistant does. But we as individual members deal with them day in and day out. They come in and they can’t make it. They can’t make it. And this becomes a question of public responsibility.

But I am vitally concerned about another group of society, that is those young people who are just starting to build their families. The Prime Minister of Canada promised them $500 and I want to say to you that I think --

Mr. Havrot: It was just a promise.

Mr. Bullbrook: -- his response in the House --

Mr. R. S. Smith (Nipissing): Quiet, Eddie.

Mr. Bullbrook: -- to a question from the opposition in connection with this responsibility was not only facetious, it almost was vexatious. We all must feel that.

It might come, I imagine it will come, because it was a promise, but it is a promise of proximate need and it is a promise that is needed by these people now and you can’t give them that old “in due course” platitude. The people need it now, and housing is a tremendous difficulty.

The Treasurer has been a businessman, he says, all his life. I say to him, knowing his background, that he and I, I think, have been well blessed in this respect, that we can look back upon the earlier years of our marriage and say that we were able to acquire a home, and to have our family, but they can’t do it any more, they can’t. They can’t do it from the point of view of acquiring the necessary equity. To acquire the real property they can’t possibly contemplate at these present interest rates the burden that would last 50 and 60 years. Surely we have got a responsibility there. It is not too much to ask.

I close in saying this to the minister. This is all I wanted to give the minister really. I wanted to give the minister the comment that I think some of your speeches really beggar our credulity. You send them to us and then you say this afternoon, “Do you read my speeches?” Sure we read your speeches. What do you think we are here for?

Does he think this is some game, Mr. Chairman? This is no game. I read your speeches, and I want to believe in your intellectual honesty. I want to believe that you feel the same as I do. Let’s stop the gamesmanship here. We are not on one side and the minister on the other and he is trying to make the minister look good one hour and us look bad the next. It has got to stop.

The minister is the Treasurer. Let’s stop the games. Tell us how you are going to try to combat inflation. Tell us about what the minister is going to do to assist the people of the province. Don’t let me have to get on your back about this kind of really inherent stupidity, this type of fooling the public, because it really doesn’t. In the long run you know it doesn’t.

We want you to succeed. We applaud every day that the land speculation tax is effective. We applaud every day that the land transfer tax is effective. We applaud that. If the minister came in and sat in that place and said to us, “I made a mistake in the concept that I had in connection with the revenues that might be available, but I am very proud of that,” then fine, we would have accepted that, but instead, of course, you go outside this House and you try to rationalize the response to our comments in connection with it.

I am basically not interested in the reply with respect to the land speculation tax. I want to say that has been, Mr. Chairman, a consummate disaster.

Hon. Mr. White: You have given me a lot of freedom.

Mr. Bullbrook: Mr. Chairman, that has been a consummate disaster.

Hon. Mr. White: I hope you will give me about three minutes to reply to this tirade?

Mr. Bullbrook: Yes, certainly, you have ample time.

Mr. Turner: You just said it worked.

Mr. Bullbrook: Those taxes have been a consummate disaster from the time that the Treasurer stood in his place and put a burden upon the Minister of Revenue to rationalize, over seven weeks, how those taxes would work. The fact of the matter is that they haven’t worked.

I don’t want a response to that. If you want to make a response, fine. If you want to play the game, fine. If you want to continue that type of game, fine. That is a two-way street, we can play it all day. If you want to get to one-upmanship when I sit down, if you want to get up, fine.

I ask you this --

Hon. Mr. White: I would like to reply to you. Give me five minutes. Just give me five minutes.

Mr. Bullbrook: I very seldom make speeches of length, now. I don’t.

Mr. Havrot: You should sit down after that contribution.

Mr. Bullbrook: I wanted to talk about egg marketing tonight, but I couldn’t get on to it. But I want to say that to the minister if I may. I am very, very interested if the minister would tell me -- and let’s not talk about Moody’s three-star because Moody’s three-star, whether you like it or not, is based on two things.

Mr. F. Drea (Scarborough Centre): Don’t you invest in it?

Mr. Bullbrook: Moody’s three-star is based on two things basically.

Mr. Drea: How about your clients?

Mr. Bullbrook: And you don’t have to be an economist either. Do you know what it is based on? The tremendous advancement that the government made in connection with the provision of hydro-electric and other electrical power. That is the first thing.

Mr. Drea: Hepburn wanted to sell it.

Mr. R. G. Eaton (Middlesex South): Which you fellows opposed.

Mr. Bullbrook: All right, that’s the first thing. The second thing is the basic resources that this province has, and the third thing is the confidence that really any government could administer that without any difficulty at all. That’s how you got the Moody’s three- star. There’s no difficulty there at all. So let’s get off Moody’s three-star. My goodness gracious, we’ve been indulging in it 10 times this afternoon and tonight.

Just tell us this. Tell us how you’re prepared -- which should be your essential responsibility -- to protect the people of Ontario as best you can from the inflationary tendencies. And don’t tell us how the federal government should do it.

Mr. Shulman: He won’t even admit there is a problem.

Mr. Bullbrook: Tell us, if you can, what you have in mind for these people.

Hon. Mr. White: Mr. Chairman, there are nine points made, I think, by the hon. member. I can run through them in about five minutes. He said the criteria on a transfer tax had never been met. And he emphasized how he read my speeches. In point of fact, he misread my speeches. On page 12 of the speech in question it reads as follows:

In determining whether a land purchase is of significant benefit to the province the government is guided by various criteria, such as: whether the purchase will result in the creation of new employment where this is desirable; whether it will increase exports or replacements for imports; whether it will bring about development in northern or eastern Ontario where economic growth is slow; or whether it will somehow contribute to the province’s technological capacity.

So “or” is implied between each of these phrases and there hasn’t been a single exemption made that didn’t meet one of these criteria.

Mr. Bullbrook: Tell us about that. What did they mean?

Hon. Mr. White: In the case of Homes Insulation, a Sarnia company called Homes Insulation was sold to a US firm, Babcock & Wilcox. In this case the purchaser was granted exemption because the purchase would preserve 100 jobs. The Homes company was going to close down its plant.

Mr. Bullbrook: It didn’t create new jobs, though.

Hon. Mr. White: The purchasing company also intends to introduce new lines of products for export. So I have met two of the criteria.

Mr. Bullbrook: It didn’t meet any of them -- don’t you understand?

Hon. Mr. White: Now, in the matter of returns from the land speculation tax and the wording used by me earlier today, which was “educated guess,” I now quote from the budget statement on page 7 under the heading: “Land Speculation Tax.” It says: “The success of this speculation tax will be inversely related to its revenue field.”

Mr. Bullbrook: My God. Don’t you realize we agreed to that?

Hon. Mr. White: “The smaller the revenue the greater the desire to impact on curbing speculation. For this fiscal year the revenue yield from the speculation tax can be little more than a rough estimate.”

The Minister of Revenue put these bills through because starting in 1968, when I myself became Minister of Revenue, there having been no separate minister previously, the Treasurer, Charlie MacNaughton, having borne both the Treasury and Revenue responsibilities, it was decided by the government that the Minister of Revenue, as in other jurisdictions, including, I’m quite sure, Ottawa and Westminster, should take the bills through after the Treasurer’s budget statement. Now, I did that in each of the years that I was the Minister of Revenue myself.

Two years ago I came in with some dramatic and complicated new policy changes -- such as the energy tax, if you will. At that time the Minister of Revenue and I sat down and we decided that in those circumstances it would be appropriate if the Treasurer took the tax and bills through as, indeed, I did.

Now, this past spring I said to the new Minister of Revenue: “Do you want to take these bills through as I used to do as Minister of Revenue, or would you rather I took them through as, indeed, I did in April, 1973?” He said: “I would like to take the bills through.” That’s the way it was and I’m sure he’ll confirm it, if you wish.

We haven’t got a cash deficit this year. We have a cash surplus of $336 million which I have enumerated here half a dozen times today. I listened to my hon. friend suggest a compulsory saving through the PIT and I remind him once again --

Mr. Shulman: You can’t believe that.

Hon. Mr. White: -- that the personal income tax is the exclusive preserve, in respect to structure and conditions, of the federal government. We did indeed have credit controls.

Mr. Bullbrook: No, it’s not. Don’t mislead the House. It’s not.

Hon. Mr. White: We had federal credit control in World War II. We had federal credit controls in the Korean War. Yes, they did work and yes, Mr. Turner should consider them.

I’m not going to take a back seat to my hon. friend about old people. I’ve had the oldest and largest critic in this province starting before he even thought of running for this Legislature in 1960.

Now, the reference to a three-star designation are most unfortunate. He may be thinking of three stars by Michelin or Seagram’s Three Star. We have a triple A rating because, as the Wall Street Journal said, we have “sound financial conditions; well-managed debt.”

Mr. Bullbrook: What about inflation? Not a word about inflation in the whole speech.

Mr. Chairman: Order, please.

Mrs. M. Campbell (St. George): Not a word about inflation; not a word.

Hon. Mr. White: One more moment. What we are doing about inflation is contained in this document, called “The Ontario Budget Statement,” all of which deals with the subject of inflation. And I will send a copy to the hon. member.

Mr. Shulman: Not a word in there.

Hon. Mr. Winkler moves the committee rise and report.

Motion agreed to.

The House resumed; Mr. Speaker in the chair.

Mr. Chairman: Mr. Speaker, the committee of suppy begs to report progress and asks for leave to sit again.

Report agreed to.

Hon. E. A. Winkler (Chairman Management Board of Cabinet): Mr. Speaker, before I move the adjournment of the House I would like to say that on Thursday we will deal with the Ministry of Consumer and Commercial Relations.

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

Motion agreed to.

The House adjourned at 10:30 o’clock, p.m.