Legislative Assembly of Ontario

The House resumed at 8 p.m.

BUDGET DEBATE (CONTINUED)

Mr. Peterson: I trust everyone enjoyed his little break, Mr. Speaker. I know I did.

I want to finish up with a few other areas that are of great concern to us and I’ll by not to take any more time than I have to. One of the things that had been bandied around and deferred on almost a constant annual basis is the whole matter of property tax reform in this province. Perhaps the most blatant example of government waste and lack of return for dollars spent is the three commissions appointed to investigate, to make recommendations and reform the property tax:

The Ontario committee on taxation under Smith dealt extensively with property tax reform in 1967.

Taxation in Ontario, a programme for reform under John White, did the same thing the following year. Neither of these reports has ever been acted upon, although the need for reform remains acute.

In May 1976 the government appointed yet a third commission under Willis Blair with the same intent -- to study property tax reform based on the proposals put forward by the government in budget paper E of the 1976 budget. Again the government is stalling. As the Treasurer (Mr. McKeough) conceded in an interview after the Blair commission report early in March, there is virtually no chance of implementing a province-wide system of taxation based on market value assessment as scheduled next year. One can speculate as to the reasons why. However, the Treasurer supplied the best one himself when he said that basically we are dealing with something that affects 3,500,000 property owners in this province. I can think of few issues that are more potentially explosive in a political sense or any other sense you want to name. That’s a lot of voters and many more are affected and concerned, and the issue is most definitely explosive. The citizens of Ontario are angry at many of the proposals.

If the Premier (Mr. Davis) is still fishing for an election he may be interested in looking at the Blair commission proposals on budget paper E. I was just reading tonight over dinner a speech that the Treasurer gave at 1 o’clock this afternoon, talking about honest politicians, dealing honestly with the issues that faze us. This is a perfect example of an inability and an unwillingness to face up to real issues. We’ve seen these deferrals for almost 10 years now and depending upon the political climate at any given time, I don’t look for any action in the near future. But more of that speech in a little while.

I want to deal with budget paper E and the Blair commission report. As the leader of my party said of both the proposals and the report:

“The whole thing is a misguided, tangled, and futile exercise which should never see the light of day. It fails to address itself to the real problem which is the sickness affecting municipal financing today -- a sickness that is almost terminal. Municipal financing needs rejuvenation, not tinkering. The government fails to understand the nature of the problems which face the municipalities. We need municipal diversity and autonomy. Instead, the government seems determined to create a whole series of games and amusements for bureaucrats. The use of market value as the standard for property taxation is completely arbitrary. We do not believe in it, and we feel that other standards of comparison between communities, based on per capita income, would make far more sense. Furthermore the municipalities need a share of other taxes more than they need adjustments to property tax.”

As we stated in our brief to the Blair commission, the government has put the cart before the horse. The property tax proposals represent yet another case of government action taken without careful and thoughtful planning. The uncertainty that has surfaced in much of the discussion of the proposals across the province is attributable to the lack of in-depth studies on the effect the imposition of the proposals will have on specific communities.

Detailed assessment figures should have been released prior to the commission hearings. Municipalities would then have had an opportunity to assess them and to determine if major shifts in local taxation would occur. Such shifts would of course affect local planning and priorities. Concerned groups have not had available to them the data necessary to them to evaluate and comment upon the new system.

With regard to proposal number one, taxes on residences, which the commission concurred with, we feel that only detailed studies will yield the appropriate percentage of property tax which residences in Ontario should bear, and we know the government has not undertaken such studies. The municipality is the level of government best equipped to determine what percentage of tax load should be borne by residents and what percentage by industry. It may well be best for the tax rate to be set at the municipal level so it is flexible and can vary according to commercial and residential tax bases available in each individual community.

The commission’s recommendations concerning proposal number two, especially as it affects golf courses, are a small improvement on the government’s original proposals, which would have put many golf courses out of business. We believe golf courses and other open recreational spaces deserve encouragement and protection and should not suffer at the hands of this new proposal.

Proposal number four on farms and managed forests stated that farm land, farm buildings and managed forests be taxed at 100 per cent of market value and that those taxes be paid by the province.

It is evident from the objections being raised loudly and clearly across the province that farmers do not want the province to pay their taxes. As responsible members of the community, they feel it is their responsibility and duty to contribute a fair share through tax dollars.

Further, many feel payment of taxes by the province is tantamount to government control of their land, that their status as independent businessmen is being constantly eroded, and that this trend could ultimately lead to the government dictating what and how much is to be produced. Farmers are also sensitive to the notion that may arise among the non-farming public as a result of the implementation of this proposal, that farmers are a heavily and perhaps over-subsidized group in society, a privileged group. Such a notion is simply untrue.

As a response to the outcry on the part of farmers to this proposal, the commission recommended that the farmers pay 10 per cent of the property tax on the above-mentioned properties and that the remaining 90 per cent be paid by the province. To us, this is ridiculous. Whether the government pays 90 per cent or 100 per cent of farm land tax is irrelevant. Either the system is totally opposed to the wishes of Ontario’s farmers, or it isn’t.

All they ask is that they should pay their fair share of the taxes according to the productive capacity of the land -- no more, no less. Tax for soft services such as educational and social services should be eliminated from farm land and farm buildings. The present farm tax rebate system is still preferable to the government’s new proposals.

One of the main objectives of budget paper E was to achieve a more neutral business assessment rate. If the commission’s proposal on business assessment is implemented, it will deal a harsh blow to business, especially owner-managed business, while providing a favourable tax bias for enterprises such as breweries, distilleries and financial institutions. The proposal discriminates against the already hard-pressed small businessman and against businesses with low earning capacity, especially new businesses, and bears no relationship to the income-earning capacity of business or its ability to pay tax.

Mr. McCague: Are you sure about that?

Mr. Peterson: I’m absolutely sure.

No explanation has been given by the government for adopting 50 per cent additional assessment of market value as the appropriate rate. The only clear reason for putting forward this proposal is that it is simple. There is no excuse for the discrimination which will result.

We believe that non-profit and charitable organizations should continue to be exempt from property tax. The proposal to remove this exemption would only serve to erode the viability of the voluntary sector. Voluntary organizations play a valuable and irreplaceable role in community life, helping people to help themselves, fostering and supporting an attitude of self-reliance and community spirit. If these organizations are subject to property taxation, donors will be discouraged from giving and much of the time and energy that volunteers now devote directly to community services will have to be diverted into fund-raising activities. This is not only a waste of a valuable human resource, but it may also serve to erode the base of volunteer support as many feel they will no longer be working to provide services but to pay taxes.

The government’s suggestion of providing grant assistance to non-profit and charitable organizations is not acceptable to us. As stated earlier, grant systems are uncertain, negate the possibility of long-range planning and increase the likelihood of government interference in the decision-making of organizations concerned. In any case, to take the money and then give it back is bureaucratic idiocy. Further, the government has traditionally denied grant support to private schools and secondary schools past grade 10. There is no indication that this policy is about to change.

The commission recommended the creation of exemption review committees at the municipal level, which would decide if exemptions should continue to apply in certain circumstances. Inevitably, this proposed system with respect to tax exemptions for charitable and non-profit organizations will lead to chaos and confusion. The system of periodic review, and the establishment of review committees, will lead to organizations lobbying politicians and influential people to gain exemptions. This might give a tremendous advantage to strong organizations and discriminate against smaller but equally worthwhile groups. I repeat, there should be across-the-board exemptions for charitable and non-profit organizations.

The Liberal Party feels the property tax structure must be the subject of major reform. Tinkering with the present system, which is all the proposals presented by the government and the report of the commission will accomplish, is not an adequate response. As far back as the election of 1943, the Conservative Party under George Drew promised a sweeping revision of the whole property tax system in order to reduce the burden of real property taxation, and to make home ownership more accessible. Over 30 years later that promise remains unfulfilled. During that time the responsibilities of municipal government have grown enormously. The property tax system is simply not a sufficient revenue source to deal with these new and onerous burdens. A massive review of the system of real estate taxation is long overdue and must be undertaken immediately.

One of the reforms Liberals advocate is the taxation of residential buildings and a specified amount of accompanying land for services to land -- for hard services such as roads, water, sewer, police and fire protection but not for services to people, or soft services, so-called, such as education and welfare. Payment for soft services by means of the property tax represents a form of regressive taxation. The Ontario property tax credit goes some way in reducing the regressivity of the property tax itself. However, the proportion of the tax that pays for soft services still applies equally to all taxpayers, regardless of ability to pay.

Mr. McCague: What about Blair on that?

Mr. Peterson: What about Blair on that?

Mr. Speaker: Order, please. The hon. member for London Centre has the floor.

Mr. Peterson: The inclusion of soft services in the property tax also discourages the construction of affordable housing.

Mr. Davidson: How can you judge a report when you haven’t seen the report yet?

Mr. Peterson: The added burden that relatively-high-density, low-cost housing places on the provision of municipal services, leads many municipalities to place barriers in the way of construction of low- and moderate-cost housing. The removal of these services from property taxation would greatly facilitate municipal approval of housing at prices which people could afford. Genuine reform of the complete area of municipal finance is necessary and long overdue.

That should give you chaps something to talk about in the next campaign.

Mr. McCague: Don’t be provocative now. There are a few holes in that.

Mr. Peterson: In my judgement I am coming to the single most important area in the budget that was neglected. It is of a very great concern to me personally. It’s something that I’ve been interested in for a long time and I see continuous default by the government in terms of coming to grips with it in any meaningful way. That is the whole area of energy policy.

Mr. Haggerty: Look out, Jim, he’s rolling up his shirt sleeves.

Hon. Mr. Taylor: Pugilistic.

Mr. Peterson: I regret to say that the failure in this connection has been even greater at the federal level and I’m not proud of that. I think they should very seriously be pressured into a national energy policy. However, in fairness I have to say that just because the federal government has not reacted I don’t feel that is any excuse in any way for the failure of this government to protect the future of this province or to protect the people of this province or the consumers of this province. Let us not forget that this is the major energy-consuming province in this country.

It has long been my view that it is an indication of the Premier’s view of the situation that he has only relatively recently established the energy ministry. He really doesn’t understand or appreciate fully the implications of the problems. In addition to that, he has neglected to grace that portfolio, I’m sorry to say, with a minister of insight, courage or clout.

Hon. Mr. Taylor: Careful, now.

Hon. Mr. Handleman: Yes, don’t get personal.

Mr. Peterson: The only consistent policy has been to blame the federal government for all of our problems. I am glad the minister is here to hear this because I feel very strongly we will push him, we will do everything we can to make him come to grips with this issue. His report last week did not do it.

Hon. Mr. Taylor: It’s about time you understood what the situation was and understood --

Mr. Speaker: Order, please.

Mr. Peterson: Well, we have understood the situation.

Mr. Speaker: Order, please.

Mr. Peterson: You’ve never understood the situation.

Hon. Mr. Taylor: You have just confessed your ignorance.

Mr. Speaker: Order, please.

Mr. Peterson: Well, we’ll wait and see about that.

Mr. Ruston: What is the matter, Jim? My goodness, did you have sour milk for supper?

Mr. Peterson: I can say this to you.

Hon. Mr. Taylor: You know better than that.

Mr. Peterson: If I was Premier of this province --

Mr. Kerrio: One more year of your energy policy and the lights will go out.

Mr. Peterson: This portfolio should be considered in the top two or three most important portfolios and it is not because you are in it. If the Premier thought it was serious, he wouldn’t have put you in it.

Mr. Speaker: Order, please. Will the hon. member speak through the Speaker, please, and continue his remarks over the interjections?

Mr. Peterson: Would you convey my remarks to the minister, Mr. Speaker?

Hon. Mr. Taylor: I didn’t expect anything flattering from you.

Mr. Peterson: You won’t get it.

No policy area will have a greater impact on the lives of the citizens of this province and the future of this country, and indeed, the entire western world. Energy policy in the future, even more than at present, will have an impact on human settlements --

[8:15]

An hon. member: You’ve been rehearsing.

Mr. Peterson: -- on economics, on environment, on transportation and the whole social structure. In our judgement, it’s absolutely imperative that governments understand and appreciate this fact and start to act accordingly. I desperately hope that President Carter’s new initiatives will instil in this government a sense of urgency and a sense of priority, just as I hope they will do the same for the federal government -- to get off their duffs and do something about this. I must say, I was frankly insulted when I read in the paper about the federal Minister of Energy saying it may make his road a little easier. I thought he was absolutely ridiculous, the way he handled that situation. These things should have been done before. He’s at fault and this government is just as much at fault.

An hon. member: There you are.

Hon. Mr. Taylor: Why don’t you get the facts before you start talking?

Mr. Wildman: Why don’t you get the facts?

Mr. Speaker: Order, please.

Mr. Peterson: We had our warning in 1973 when oil prices began to increase dramatically. Daily, we’ve had new evidence of how precarious our position is. Even the minister acknowledged this recently in his paper, The Energy Future.

I must say I was impressed last week that he had at least revealed some understanding of the problem. I have yet to see one concrete proposal.

I want to share some of the realities of the situation as we see them in the Liberal Party and I will send the minister a copy of this paper, right after. I hope he’ll start acting on it.

In Canada, we have the highest per capita consumption of energy in the world -- the equivalent of 49 barrels of oil annually at a cost of $9.75 a barrel. That’s approximately $440 per capita.

Of course, world prices in refining would be substantially more, but the Resources for the Future Institute, a Washington-based think tank, maintains that Canada uses 20 per cent more energy to produce the same amount of goods as the United States. Granted, we have different weather and transportations needs -- I’ll give the minister that. But Sweden, with a relatively similar climate and a relatively similar standard of living, uses on average 60 per cent of the energy per capita that we do here.

Hon. Mr. Taylor: You aren’t telling me. You’ve been reading my speeches.

Mr. Peterson: You’ve been reading our speeches. You’ve only had the job for about three months, and you haven’t mastered it yet.

Hon. Mr. Taylor: I’m still way ahead of you.

Mr. Wildman: Sweden is a good country to learn from.

Hon. Mr. Taylor: Have you ever been there?

Mr. Peterson: Roughly 80 per cent of our $7.5 billion worth of energy is imported, which has a marked effect on our balance of payments and our standard of living.

Mr. Nixon: Don’t bend my coat.

Mr. Peterson: That total of $7.5 billion breaks down roughly this way: transportation, $2.9 billion; residential, $1.3 billion; commercial, $1.1 billion; industrial, $1.9 billion; other, $0.3 billion -- for a total of $7.5 billion.

In my judgement, we need a detailed analysis of all the areas where major consumption goes; we must take effective measures immediately, start attempting to curb our annual growth in demand which has, historically, been at the level of five per cent.

Just to inform the House and the members that this is possible, let me recount a study by the Brookhaven National Laboratory which estimates that on average -- and granted these figures are rough, but very revealing -- we waste, in North America, 68 per cent of the energy in utilities; 50 per cent in industry; 60 per cent in residences; 87 per cent in automobiles; 84 per cent in transportation and 60 per cent in commercial applications. In other words, we waste approximately two thirds of our energy. In Ontario that would be about $5 billion annually.

Mr. Nixon: And the government continues to drive those limousines.

Hon. Mr. Handleman: What about you?

Hon. Mr. Taylor: How about Mitchell Hepburn?

Mr. Nixon: We’re going to auction them off.

Hon. Mr. Norton: In Varsity Stadium.

Mr. Nixon: It just occurred to me.

An hon. member: It’s a good idea, Bob.

Mr. Riddell: And, furthermore, we’ve got an auctioneer who can do it.

Hon. Mr. Taylor: You don’t know a car from a cow.

Mr. Speaker: Order, please, the hon. member for London Centre has the floor.

Mr. Peterson: Even if we could eliminate half this waste, or even a percentage of this waste, it would result in massive savings to the people of this province.

It is our belief that the cornerstone of an energy programme must be conservation. I can tell you, I’ve sat through committee meetings, I’ve listened to ministers in estimates and it’s been pooh-poohed constantly. I must say in fairness, it’s only been in the last two or three months there’s been any understanding of that fundamental precept at all.

Mr. Nixon: Do you mean since Mr. Taylor became minister?

Hon. Mr. Taylor: That’s right.

Mr. Peterson: He was told to do so. Somebody wrote him one reasonably good speech.

Mr. Lewis: What speech?

Mr. Nixon: His mother.

Mr. Lewis: Jim Taylor? A reasonably good speech?

Mr. Peterson: I am trying to be charitable and constructive. It is not easy.

It is my belief that with imaginative and tough programmes --

Mr. Singer: There is something about these evening debates that’s most edifying.

Mr. Peterson: Particularly if you have been at La Scala for dinner, Vern, or the Albany Club.

It is my belief that with imaginative and tough programmes, we can substantially reduce our growth in demand without in any material way affecting our standard of living or creating major personal discomfort. A general, fair, equitable winding down of our consumption habits is preferable to what in my judgement will be some day soon a catastrophic day of reckoning. That’s why I am going to lay before the Energy minister, and before the House, some very specific proposals which I recommend to him and I hope he takes courage from the strong initiatives that President Carter has instituted. We recommend a comprehensive compulsory set of insulation standards for all new buildings, be they residential or commercial.

An hon. member: Tax free.

Mr. Peterson: Imperative, no question.

An hon. member: Windmills are next.

Mr. Peterson: Number two, we advocate a comprehensive and compulsory programme of thermal upgrade, retrofitting and insulation for all existing structures. I want to talk about that for a minute, because I think it’s very important and critical to the debate at hand. If we brought our existing housing stock up to 1975 federal standards at a cost of approximately $860 per unit, we could save 36 per cent of our residential heating bill or the equivalent of 824 million gallons of oil, which would mean about $412 million annually.

Hon. Mr. Taylor: Have you checked the federal government building code?

Mr. Peterson: Sure.

Hon. Mr. Taylor: And the provincial building code? You don’t even have this in the federal building code. We have them in the provincial.

Mr. Peterson: You do not. You don’t have any.

An hon. member: Where were you for supper, Jim?

An hon. member: You copied it. You copied the federal code.

Mr. Deputy Speaker: Can we have some order please? Will the hon. member for Prince Edward-Lennox and the member for Cochrane North please try to contain themselves. The hon. member for London Centre has the floor.

Mr. Peterson: Just to put the savings in relative terms, Mr. Speaker --

An hon. member: Cochrane North? Has he been banished to Cochrane North?

Mr. Peterson: To save 10⁶ Btu in energy through insulation costs about 50 cents. Mackenzie Valley gas when delivered will cost about $5.00 per 10⁶ Btu. That’s the relative cost of what we are talking about.

In our judgement the cost of this massive insulation programme should be capitalized and spread out over a term of years, so that even though the home owner was paying for insulation, when the cost was set against the savings in his fuel, his total bill would be less.

The advantages, apart from the savings in energy, in our judgement, right now are absolutely immense. This type of work is highly labour intensive -- approximately 50 per cent of it. It would immediately create jobs. It is highly decentralized and it would include, to a large measure, small business. The technology is simple and available. All that is lacking is government direction.

Does the government want to create jobs? Does it want to create them tomorrow morning? Bring in a programme like this and it can be financed with no additions to the public purse. My problem with the NDP programme, frankly, is that it is going to increase the deficit. I am saying this can be capitalized. I am saying it can be spread out over a 10-year period or a five-year period, and it can be done.

Mr. Renwick: There was nothing in the remarks of the member for Ottawa Centre (Mr. Cassidy) that would increase the deficit.

Mr. Peterson: In fairness now, the NDP position was that there should be contributions up to $500 or a third of the bill depending on the price. That sounds to me very much like a handout in these kind of situations. I think everybody in this province is in this difficulty together. I think with leadership and direction you can actually prove that the bill would be less if you capitalized it over a term of years. Government can come in with low-cost assistance.

Hon. Mr. Taylor: It’s not direction, it’s dictation.

Mr. Nixon: If only we had a senior Minister of Energy. Bring Darcy back.

Mr. Peterson: We estimate, Mr. Speaker, and I will grant you that this is rough, but this kind of programme at this particular point in time would create -- and I think the NDP figures are a little different from mine -- but about 150,000 man-years of work at about $15,000 per annum.

Mr. Renwick: I think the minister would prefer it if Gerry Ford was in the White House.

Mr. Peterson: He would prefer it if Calvin Coolidge was in the White House.

Mr. Deputy Speaker: There is no responsibility on the member for London Centre to react to the interjections.

Mr. Nixon: Or the member for Riverdale to interject.

Mr. Peterson: I really enjoy it though, Mr. Speaker, no kidding.

Mr. Singer: He had his time this afternoon.

Mr. Deputy Speaker: Just ignore the member for Riverdale.

Mr. Singer: It’s easy.

Mr. Peterson: In addition, we propose that motor vehicles should be licensed on the basis of weight or a formula related to energy consumption -- not on the basis of the number of cylinders because that’s a very inexact guide, as the minister knows. The number of cylinders is not an accurate measurement of efficiency. The Treasurer in his budget pays only lip-service to energy conservation. It’s a throw-away line when he starts increasing the fees.

We believe that a phased increase in motor vehicle licence fees to discourage inefficient vehicles and encourage efficient models is the answer. It would be phased, and everybody would be on notice that it would be over a period of years so that people could start adjusting their own habits and the manufacturers could start adjusting their production. We think that’s fair and reasonable.

We recommend a series of tax credits for the installation of renewable energy equipment. In addition, we must remove any increment in local assessment where renewable energy devices are now installed. In certain applications already in existence, a combination of solar and oil heating devices are competitive with fossil fuel applications.

In our judgement we need efficiency standards for all energy-consuming devices, including houses. This should be clearly displayed and tagged in terms understandable to any consumer. There are various ways of doing that. It can be an efficiency rating, but the preferable way to do it, in my judgement, is in terms of dollars so everybody understands the financial implications of any purchase of an energy-consuming device.

I want to repeat something that we’ve said for a long time. We think we need a rate structure in both electricity and natural gas which is progressive, i.e., the more you use the more you pay. Our current rate structure encourages consumption in that the more you use the less you pay per unit. The Liberal Party view is that the exact opposite should be the case. We have an obligation to people on low and fixed incomes to deliver, as a matter of public policy, a quantity of energy at as low a rate as possible. Thereafter, the larger consumer and the excessive consumer would pay progressively more.

We believe that we should introduce a time-of-day pricing structure for hydro to discourage use in peak periods and to assist in better load management. We think that would have a measurable improvement in load management and would assist Ontario Hydro in its capital programmes.

We need programmes to stimulate the development and manufacture of renewable energy devices here in Ontario; and I’m talking about a whole myriad of them, including solar, wind, biomass and methanol. I want to say a little bit about methanol technology. My colleague from Halton-Burlington (Mr. Reed) is an authority on this, and I’m sure he’ll be speaking at other times in the House on this. But methanol technology is a perfect example of a renewable resource which could be grown and synthesized completely within our provincial borders. It has the potential to make a major impact on our petroleum requirements.

Mr. Nixon: Methanol can’t be put to any other use.

Mr. Peterson: Some of the Tories will recall that Hitler ran the last two years of his war with it.

Feedstocks are any carbohydrate source -- wood waste, special energy crops, garbage or sewage sludge. Professor Donald Mackay of the University of Toronto in a current study indicates that the cost per gallon ranges from 45 cents to 69 cents. The technology is currently available and operating in plants in such places as West Virginia.

The advantages are immense. All raw materials are indigenous to Ontario, it could help solve our waste problems and it would substantially assist in the balance-of-payments problem. We need direction in that area, in my opinion, and that’s one the government should be leading in, when we have these massive tracts of forest here; unfortunately, the government’s not reforesting them.

I semi-agree with the minister’s proposal that we need a federal-provincial agency to co-ordinate more, but I would take it much further.

Hon. Mr. Taylor: Don’t get too cosy now.

Mr. Peterson: I want to repeat what we think the function of that federal-provincial agency should be. This agency should make some of the energy investment decisions which have previously been reserved only for private companies. Its board would determine investment priorities among a full range of energy options -- and that’s a new problem we’re running into today -- including exploration, research and development, renewable resources, provision of nuclear energy, energy conservation, coal gasification and whatever. In many cases, these options would be implemented through partnership agreements with private industry.

What we don’t fully understand is the tremendous competition for capital that’s going to go on in this country; and, Lord knows, we have those problems now. It’s going to be highly inflationary; it’s going to alter our whole savings and consumption pattern in this country, in my judgement. I think we are better off co-ordinating this and having some of those tough decisions made in co-ordination with governments and private enterprise. That’s why I say the kind of body that the minister proposes should go one step further.

[8:30]

In addition, let me just say by way of interest, it is estimated that in the energy field alone we are going to need some $125 billion in the next 10 to 15 years. That’s substantial, and it’s going to affect everyone’s way of life. We cannot afford to waste it, we cannot afford to misappropriate that money and that’s why we need much better co-ordination.

Mr. Nixon: That’s for Canada.

Mr. Peterson: In addition, the joint federal-provincial agency would function as an energy ombudsman for Canadians, with the power to examine the books of energy companies, to independently assess oil and gas reserves and determine the potential of other energy sources for Canadian use.

I want to say this -- and I don’t pretend to have laid out a comprehensive energy policy, there are many other aspects to it which we will come to. But I have made a number of suggestions which in my judgement and in the judgement of the Liberal Party would impact immediately on this province. Not only in massive savings in terms of our provincial balance of payments, but also in terms of immediate job creation.

To the Treasurer, to the minister and to the government I would say this, as forcefully but as charitably as I can. They have been derelict in this area; they have been lead-footed, and they have been irresponsible --

Mr. Nixon: Ham-handed. Unimaginative.

Mr. Peterson: -- and I think they’ve got a lot to do, and they should start now. I really hope the Minister of Energy has the clout to pull it off in cabinet. Because if he has, we’re going to be right with him, and I am sure that our friends of the left who sit to the right will be there too, because by and large they would share a lot of these thoughts -- maybe not all of them, but a lot of them. It’s important this should become a non-partisan issue. If the minister comes up with tough measures, I can almost assure him of the support of the people in this part of the House. We are all in it together; it’s a collective responsibility to make sure everybody in this province understands it.

Mr. Nixon: Oh, we’ve only got six more weeks to put up with these people, anyway.

Mr. Eakins: Monday it will be all over.

Mr. Nixon: You will be the minister, David.

Mr. Eakins: Can you hold out until Monday, Jim?

Mr. Ferrier: We will let you vote for our amendment.

Mr. Peterson: Before I take a detailed look at some of the provisions in this year’s budget, I want to make a couple of observations on two previous budgets brought in by the Treasurer. In many respects, the people of Ontario are still paying the price of the 1975 election-year budget, in which --

Mr. Nixon: The price was $600 million.

Mr. Peterson: -- the government introduced programmes blatantly aimed at vote-catching. You know what’s so interesting to me, Mr. Speaker? Here we are in 1977, if you read back the old speeches of 1975 when he opted for this massive stimulation --

Mr. Nixon: Marvin Shore’s speech.

Mr. Peterson: That’s irrelevant in the political annals of this province.

Mr. Deputy Speaker: The member for Brant-Oxford-Norfolk doesn’t have to interrupt his colleague.

Mr. Peterson: If you listen, Mr. Speaker, they’re awfully clever.

Mr. Kerrio: That is asking for direction.

Mr. Peterson: But it’s curious to watch the shift in economic philosophy, depending on the political circumstances at the time. Obviously the Treasurer’s reading is restrained to the measure of the day to day. In 1975, not nearly as in serious shape as we are in today, he had a totally different philosophy, a totally different set of precepts. And it is interesting to me to read and follow through those great disparities. It really speaks a lot, in my judgement, to the consistency of the government across the hall -- across the pit, the middle.

The people of Ontario are still paying the price for that 1975 budget in which the government introduced programmes blatantly aimed at vote-catching. Revenue lost to the province, for just three items -- a two per cent reduction in provincial sales tax, the tax rebate on cars, and the first-time home owners grant -- was almost half a billion dollars. That year alone the deficit rose by $934 million, an increase of 171 per cent over 1974, to a total of $1.5 billion. The debt burden carried by every person in the province rose by 41 per cent, or $172.17 that some year.

And Marvin Shore agrees with me. Marvin agrees with us.

Mr. Nixon: Yes, Marvin is a very agreeable chap.

Mr. Shore: That is the only part I agree with.

Mr. Nixon: Now, now, back to the Hunt Club, Marvin.

An hon. member: These were your notes from last year, Marvin.

Mr. Peterson: Net cash requirements were 2.8 per cent of gross provincial product that year as compared to 1.6 the year before.

Mr. Shore: Good faith.

Mr. Deputy Speaker: If the member for London North wants to agree or disagree he will do it from his own seat.

Mr. Kerrio: Wherever that is.

Mr. Edighoffer: Where is his seat?

Mr. Peterson: You pointed that out very well. He doesn’t know his seat, and he doesn’t know whether he is agreeing or disagreeing. You pointed it out very well, Mr. Speaker.

Mr. Swart: He’s lucky if he finds the right side of the House, let alone his seat.

Mr. Nixon: He’s closest to his spiritual home now.

Mr. Peterson: If the money required to service these enormous deficits had been available on the markets these past two years, the economy would have been in far healthier condition than it is now, even given the effect of those stimulative measures. What was the effect? In budget paper A of the 1976 budget, the Treasurer quotes an article by Professors Jump and Wilson indicating the sales tax reduction, including exemptions for production machinery, reduced the rate of inflation by 0.3 per cent. Had the Treasurer quoted further, we would have learned that these professors also believed that in 1976, the end of the temporary reduction would serve to increase that rate of inflation by 0.2 per cent. That’s selective editing by the Treasurer.

Because the sales tax reduction reduces transaction requirements for cash, the impact of the provincial measures upon interest rates is minimal in the current year. Next year, however, the increased borrowing puts upward pressure on interest rates, with short-term rates rising 39 basis points and long-term rates eight basis points by the end of 1976.

To some extent the automobile sales tax rebate may have stimulated sales, but these were at a near record level just before the tax break was announced. Possibly one effect of the tax rebate was that sales would slump, because people planning for a new car in 1976 took advantage of the tax rebate and bought in 1975.

The home buyer grant, which cost this province $90 million in revenues initially, has become the most notorious item of the three. In its eagerness to get the $1,000 cheques out to the people before the election, the government did not bother to establish a proper mechanism to screen applicants.

Mr. Nixon: The Tory candidates delivered them by hand.

Mr. Peterson: The only rule in getting that out was, the cheques have to move fast. No affidavit, no affirmation required.

Mr. Eakins: Just Lorne Henderson.

Mr. Peterson: I have heard testimony before the public accounts committee that that was the only criterion -- move the cheques.

Mr. Nixon: Spend the money.

Mr. Peterson: Of the 87,000 people who received cheques, the ministry now estimates that as many as 9,000, perhaps more, went to ineligible applicants. This means that the programme cost at least an additional $9 million which the government, in an expensive audit procedure, is now trying to recover. Depending on the number of ineligible recipients who are discovered, the government will be paying out up to an additional $4.35 million in the next two years in supplementary grants.

And the impact of all this spending? Well, it is estimated that about half of those who received their grants would have purchased their first home in any case. Further, 1976 housing starts were reduced by the amount of demand which was shifted into 1975 by virtue of the tax. Again, Professors Jump and Wilson, whom the Treasurer was so proud to quote, assume about one third of the increased demand in 1975 represents such borrowing from 1976 demand. We have paid and are continuing to pay now for a budget designed with no greater purpose than a re-election.

As for the 1976 budget, what more need be said about it than that the Treasurer has been dead wrong in his predictions?

Mr. Nixon: McCague wouldn’t be here without that $600-million bribe.

Mr. Peterson: He could be had for about five cents, I'm sure.

Mr. Nixon: Oh yes, his price is a lot less than that.

Mr. Peterson: He told us there would be 116,000 new jobs created in Ontario in 1976.

Mr. Nixon: Where’s the Treasurer?

Mr. Peterson: In fact, 76,300 jobs were created, a shortfall of almost 40,000 jobs. Ask me about predictions by this Treasurer. His estimates of the government’s net cash requirements were underestimated by $158 million, his budgetary deficit by $302 million, and his budgetary expenditures by $55 million. His estimates of revenues were overstaffed by $169 million -- or overstated by $169 million.

Mr. Nixon: He’s overstaffed too. He’s got one too many legislative assistants.

Mr. Peterson: It’s interesting to look at his predictions for next year. He’s predicting four and six per cent growth. Today the Conference Board came out with a three per cent growth rate for Ontario. We’re going to find -- you mark my words -- we’re going to find that his revenue predictions are totally off again. We’re going to find ourselves in the same pickle, and we’re going to find the Treasurer next year being still around talking about restraint. We’re going to be talking about the same old things, and he’s going to be just as wrong next year as he was this year.

Mr. Nixon: He won’t be Treasurer next year.

Mr. Peterson: I wish the Treasurer were here because he was learning a lot this afternoon when he was here.

Mr. Nixon: He’s finishing up dessert at the Albany Club.

Hon. Mr. Norton: Because you are not going to extricate yourself.

Mr. Nixon: He’s a great one for dessert.

Mr. Peterson: Mr. Speaker, I want to look at some of the specific proposals in the last budget, and I want you to know that I’m drawing reasonably close to the end of my remarks, unless there’s a popular request that I go on.

Interjections.

Mr. Peterson: The Treasurer asserts, “We remain convinced that the highest priority has to be allocated to a strategy for the 1980s and that this strategy should embrace, in a comprehensive way, the key aspects of our economic and social life. This is not the time,” he says, “to slide off into makeshift remedies because they will come back to haunt us and our children for many years.” It is shades of the past. It is very curious --

Mr. Shore: Are you for it or against it?

Mr. Peterson: We are against the government. We are for responsibility.

Mr. Shore: Who is going to make that speech next year?

Mr. Peterson: This is precisely the kind of budget that we have here.

Mr. Nixon: Marvin, you are not going to be here to make any speeches.

Mr. Peterson: A Band-Aid budget, a series of isolated incoherent measures.

Mr. Nixon: Back to the drawing board, Marvin.

Mr. Shore: Who is going to make the speech next year?

Mr. Wildman: You know how Liberals can straddle the fence, Marvin.

Mr. Eakins: You won’t have to work nights next year, Marvin.

Mr. Conway: Anyway, they got you on sale.

Mr. Shore: How are you doing, Sean? Did you come in for the day?

Mr. Deputy Speaker: Let’s have some order, please. The hon. member for London Centre still has the floor in spite of the opposition from the member for London North.

Hon. Mr. Handleman: You’ve been saying that now for three hours, Mr. Speaker.

Mr. Peterson: Mr. Speaker, in our judgement there is no evidence of a strategy here of any type of the kind the Treasurer describes. There is no evidence of a comprehensive assessment or a plan for the economy as a whole, or even for the crucial segments of the economy. In the 1976 budget considerable emphasis was given to the need for a realistic energy policy and for a revitalization of the auto industry. Indeed, an entire supplementary budget paper was devoted to an analysis of Ontario’s performance under the auto pact. It is interesting, I am going to get into this a little later, but I have a copy of a speech given by the Treasurer at noon today to the auto parts industry. I’ll get to that a little later, because I can’t pass it up.

Mr. Nixon: He is making a lot of speeches, have you noticed? About three a week, all scripted.

Mr. Conway: I hear he is the one who is going to talk to the Lieutenant Governor.

Mr. Peterson: He did nothing then and he has done nothing today.

Mr. Nixon: I don’t know what he has in mind, because the Minister of Labour (B. Stephenson) is away ahead of him in the leadership race.

Mr. Deputy Speaker: We don’t need the interjections from the member for Renfrew North or the member for Brant-Oxford-Norfolk.

Mr. Peterson: The Minister of Energy is ahead of him in the leadership too. That is how grim things are.

In his 1977-78 budget, energy, acknowledged to be one of the most crucial problems facing us today, is virtually ignored. Concern for the auto industry is reduced to one line which says only that Canada’s role and share in the auto trade pact has to be a matter of great concern to us. No strategy is in place. There is no evidence of any kind of follow-up to some of the previously designated problems. The problems we face today in our judgement are mammoth and are going to have much impact on our future.

Mr. McCague: Who wrote this?

Mr. Peterson: What we need is a comprehensive series of policy proposals in many vital areas. I am proud to have participated today in the presentation of some of these policies.

There is a lot of allusion made to productivity. It is a concern in everybody’s mind today. Everybody reads about productivity. Are we behind or are we ahead? We look at C. D. Howe’s revised figures and ask, are we behind the United States or aren’t we? Let me say this: It is a very difficult concept, and nobody really has a precise handle least of all the Treasurer of this particular province.

Mr. Nixon: And his staff.

Mr. Peterson: It is my judgement that this should be a fundamental area of concern, particularly in this province with its very strong manufacturing base, which has the most to lose in the context of the present economic forces, the energy problems and all of that kind of thing. He should have a handle on that. He should be studying those kind of matters, even if he had to direct the Ontario Economic Council into those kind of studies.

In Canada today, for example, we have twice the capital intensity of Japan but the same productivity. We have roughly the same capital intensity as the United States but, in most people’s judgement, we are running 20 per cent behind in terms of productivity.

Mr. Conway: Gordon Walkers says the Tories are too pink anyway.

Mr. Nixon: Whatever happened to Gordon Walker?

Mr. Grossman: That could have been your last speech, Sean.

Mr. Peterson: What concerns me, Mr. Speaker, apart from the low quality of the interjections coming from members of my party -- they have declined since the one about the moon and the cheese --

Mr. Deputy Speaker: Interjections by your own colleague, I might add; from the member for Renfrew North specifically.

Mr. Grossman: They’re the best part of the member’s speech.

An hon. member: He is a good man.

Mr. Peterson: Let me say, I think the Treasurer’s priorities are wrong. He is spending his time --

Mr. McCague: You are wasting our time.

Mr. Peterson: He has appointed a commission on inflation accounting.

In my opinion, in a provincial context alone, that isn’t worth a damn -- excuse me, isn’t worth a hoot, Mr. Speaker. He has a study on pensions. But he should be studying this very difficult concept of productivity -- the labour input, the technology input, the capital input and all the constituent elements -- to get some kind of a consensus of all the people in this province about some kind of an industrial strategy.

[8:45]

Constantly the Treasurer harps that there is no such thing as a federal strategy. We need one. We need one provincially. It’s the richest, strongest province with the greatest manufacturing base. I repeat, we have the most to lose. I would urge him to go into a massive study. As evidence of the Premier’s inability to deal with this problem, I want to quote to you from Hansard on November 23, 1976. I asked the Treasurer a question here.

Mr. Martel: Did he answer?

An hon. member: He didn’t know the question.

Mr. Peterson: The question is, “Does the Treasurer have any plans or any projections that he is going to require capital investment of so much to get so much increase in productivity? Does he have any plans or goals in this area?”

An hon. member: No.

Mr. Peterson: “Mr. McKeough: Nothing that I would say specifically. I think there is no question that productivity” -- and here he went into one of his basic grade one lectures -- “productivity is the sum of several parts” --

Mr. Shore: It’s a grade one question.

Mr. Peterson: “It happens to be -- to put it in lay terms -- how hard we work” --

An hon. member: It’s a kindergarten answer.

Mr. Peterson: -- “how much money we invest; how technologically advanced the machine is. It will be a combination of a number of these things which is going to bring about productivity gains or continuing productivity gains.

“Without being specific this afternoon I can only tell the member that the Premier, the Minister of Labour, the Minister of Industry and Tourism, the Provincial Secretary and others have been giving the whole subject a great deal of thought.”

Mr. Nixon: Segal wrote that answer, you know.

Mr. Peterson: “We have nothing definite to put before the House at this time.”

An hon. member: Very profound.

Mr. Grossman: He can’t read the answer -- how can he understand it?

Mr. Peterson: I think frankly it’s going to go against the myth of the competence of the Treasurer that he doesn’t have something more precise to say on this kind of subject; that he doesn’t have more plans on this kind of subject. He should have, and I would recommend that he start very quickly.

Mr. Nixon: Bad case, Larry. I don’t think he can run a plumbing retail store.

Mr. Peterson: Well, he can’t. Why else is he here?

Mr. Grossman: He could, but wouldn’t have it.

Mr. Peterson: When the federal Treasurer brought down his budget on March 31, our leader expressed our disappointment that the budget failed to meet the most important economic challenge in Canada and Ontario -- the urgent need for new job creation.

Mr. Shore: Are you for or against it?

Mr. Peterson: While the investment incentives are a step in the right direction, they will provide no significant assistance to labour-intensive small businesses. The Treasurer plans to balance the budget by 1980-81, an admirable objective. However, we can have little confidence in his ability to achieve this goal in light of the past management of our economy, particularly the size and increase of the deficit.

Obviously the Ontario Economic Council shares our doubt for a study prepared for the council by economists from the University of Toronto predicts deficits of $3.9 billion in 1981 and $4.2 billion in 1982. These are a long, long way from the Treasurer’s projections. Nor can we overlook the fact that as the Treasurer tentatively undertakes this noble task, three other provinces either have or are projecting balanced budgets for this year. Alberta had an overall budgetary surplus in 1974 and 1976 --

Mr. Eakins: There’s leadership.

Mr. Nixon: How did they do that?

Mr. Peterson: -- with a surplus of $248 million projected for their 1977 budget. That province estimates an increase in expenditures of 12.4 per cent and in revenues of 14 per cent.

Mr. Nixon: That’s real good management.

Mr. Peterson: British Columbia has brought down a balanced budget this year with increases in revenues and expenditures of only 5.9 per cent over 1976. They worked steadily at lessening the deficit from $511 million in 1975 to $28 million in 1976 to a balanced budget this year.

Mr. Nixon: A lot of Liberals in that government

Mr. Peterson: Nova Scotia also plans a surplus budget in 1977. Now, there’s a good Liberal government.

Mr. Nixon: That Premier is going to go places.

Mr. Peterson: They are projecting a 12.5 per cent increase in expenditures this year and a modest overall surplus of about $92,000.

Mr. Nixon: Oh boy, that Regan is a great leader.

Mr. Peterson: Ontario could and should be doing as well or better than these provinces yet we continue to flag. The Treasurer would have us believe that the Ontario economy at this time is displaying “signs of solid strength in several sectors where we have produced positive results in terms of rising incomes and jobs as the year unfolds.” As we pointed out earlier this afternoon, before all you people fell asleep, Ontario’s performance in all the leading economic variables --

Mr. Shore: It is the only observation you recognized.

Mr. Peterson: -- in 1976 leads one to a totally contrary conclusion.

Mr. Roy: You agree with that, eh Marvin?

Mr. Shore: The falling asleep, yes.

Mr. Roy: That’s what you said last year, remember?

Mr. Peterson: His belief that the annual rate of growth of the Ontario economy will move from four per cent a year in the first half to a rate of six per cent by the last half is not shared by the Conference Board in Canada --

Mr. Shore: Did the noise wake you up, Albert?

Mr. Peterson: -- who feel it will grow by about three per cent in real terms this year.

An hon. member: Read your own speeches.

Mr. Peterson: I want to take issue with the Treasurer’s statement that in “the Speech from the Throne the Ontario government announced a wide range of initiatives to reinforce and guarantee an expanded role for small business in the economy.”

Mr. Nixon: What a difference a year makes.

Mr. Peterson: There is virtually nothing of substance in the Throne Speech or in the budget initiatives to truly assist hard-pressed small businessmen.

Mr. Nixon: There is nothing but Liberal policy that will help them.

An hon. member: There was nothing in it -- nothing.

Mr. Peterson: Proof of this government’s sincere interest in promoting small business would be an integrated set of policy proposals, such as our party has developed. Instead, the government provides a hodgepodge of Band-Aid solutions that at best would affect only existing business, and do nothing to assist new business.

Mr. Grossman: Marvin, he is reading your old speech.

Mr. Peterson: A true indication of the direction in which the government is moving is spelled out clearly in the section called “Industrial Rationalization” where the Treasurer states, “We cannot afford in many instances, with our relatively small market base, to have many firms competing in one sector.” I guess that here his plan is to buy it and then let it go bankrupt.

Mr. McCague: Is it your party that did that?

Mr. Peterson: I continue to quote the Treasurer, “For this reason, my colleague the Minister of Industry and Tourism fully supported the recent industrial consolidation of our electrical appliance industry which was achieved through the merger of the major appliance divisions of General Steel Wares and General Electric Company to form the Canadian Appliance Manufacturing Company. We need to encourage more of that kind of rationalization. In doing so, we can rely on imports to provide effective price competition to the benefit of consumers and we can take full advantage of the economies of scale which industrial rationalization brings.”

Mr. Grossman: Not like Shakespeare.

Mr. Peterson: That’s only a very small part of the answer. The Treasurer fails to understand that this is only part of the solution. To quote James Conrad, director of legislative affairs for the Canadian Federation of Small Business, the Treasurer “is locked into the obsolete bigger-is-better philosophy.” Mr. Conrad’s opinion shows the Treasurer is looking to large corporations to stimulate the economy. I believe the Treasurer is so obsessed with bigness that he’s forgotten the small business sector employs 60 per cent of the labour force and is able to create new jobs quickly. Perhaps this is why his job creation proposals continue to fail year after year.

Mr. Nixon: And he figures what is good for Union Gas is good for Ontario.

Mr. Grossman: I thought you were going to say unions.

Mr. Peterson: The Liberal Party believes in the worth of small business, of free enterprise and a healthy competitive economy. Our policy paper, released only recently, deals in a comprehensive way with the problems and needs of small businessmen.

Mr. Nixon: Right up to date.

Mr. Peterson: It recommends a complete programme to promote and encourage the growth and prosperity of this sector. I was very interested in the remarks of the member for Ottawa Centre yesterday. He was identifying with the NDP policy of trying to leap on any cause that comes its way.

Mr. Nixon: A handful of votes there for them.

Mr. Peterson: He was trying to maintain that the NDP was the only party identified in any way with small business.

Mr. Nixon: Just because he’s a small member.

Mr. Peterson: I may be wrong, but I’m not sure. Is there one businessman in your caucus? Certainly if there is a successful one they would not be in that caucus. Is there one?

Mr. Roy: What I want to know, Jim, is are you going to go after corporate contributions this time round?

Mr. Peterson: I want to say that the promotion of small business is consistently and has been, a fundamental principle that the Liberal Party adheres to.

Interjections.

Mr. Deputy Speaker: Order. Give the hon. member an opportunity to be heard.

Mr. Peterson: I want to read into the record some aspects of our small business policy. I will spare you the reading of the whole thing.

Mr. Wildman: Did you say small?

An hon. member: Read it.

Mr. Peterson: We have extra copies in our office. Any of the members interested in a copy will be welcome to drop in after the speech and pick one up.

Mr. Nixon: On the payment of a small fee.

Mr. Roy: The Tories will probably steal it word for word.

Hon. Mr. Handleman: I will mail it to every voter in my riding.

Mr. Peterson: I do want to state our philosophy and policy with respect to small business. Liberals are committed to the free enterprise system, in the support of the independent entrepreneur.

Free enterprise is an important part of our democratic tradition in Canada. It has helped the country to grow and to prosper in the past and has an important role to play in the future.

Mr. Conway: -- in the public trough.

Mr. Peterson: Survival of the free enterprise system depends not only on the survival of big business but, more importantly, in a flourishing small business sector.

Mr. Lawlor: It doesn’t exist in big business, come on.

Mr. Nixon: And a strong agriculture community.

Mr. Peterson: My leader has said very well on many occasions: It doesn’t really matter to a person -- if he’s working for a large company -- if his shares are owned by the government, as you have it, or by a large corporation. The real feel of people for the free enterprise system, with its scope for social mobility and growth, is through independent business. We are not doing enough in our educational system, or through any government policy, to foster that quality of entrepreneurship which, in my judgement, is going to be one of the few things that may allow free enterprise to have a chance in the future with this kind of policy.

I am obviously bothering the member for Riverdale. He would have preferred I just mail him a copy of my speech, but --

Mr. Renwick: We’re obviously in complete agreement.

Mr. Grossman: No, no. He wants you to recite a bit of Shakespeare.

An hon. member: Recite most of it.

Mr. Peterson: The Conservatives in Ontario are committed to a policy of large scale. In a recent submission to the royal commission on corporate concentration, the Treasurer stated that he needs more concentration. Liberals do not accept the inevitability of concentration and strongly resist moves in this direction. The NDP are committed to the support of large unions and therefore are also committed to business on a large scale.

Mr. Nixon: Whatever Joe Morris says.

Mr. Peterson: Both these parties think in terms of bigness, in business and in government.

Mr. Wildman: And unorganized workers as well.

Mr. Peterson: Liberals believe in the need to deconcentrate economic and political power to give individuals a feeling of importance and a genuine stake in society and to enable them to contribute in a meaningful way. Liberals have a fundamental commitment to competition and diversity --

Mr. Roy: That’s us.

Mr. Peterson: -- as essential elements of a prosperous democratic society.

Hon. Mr. Handleman: Diversity is the key word.

Mr. Roy: That’s us.

Mr. Peterson: In recent years, governments have hindered the growth of the private sector through bureaucratic regulations and red tape and by taking over an increasing proportion of available resources themselves, leaving less and less to the more competitive and efficient private sector to develop. For our economy to grow in a healthy manner, a new balance must be established between the public and private sectors. Each can assist the proper functioning of the other.

Mr. Conway: I hear Marvin bought a Bricklin.

Mr. Peterson: A healthy economy should consist of a mix of small, medium and large firms, since each enterprise has a different optimum size in terms of efficiency and effectiveness, depending on the market it serves.

An hon. member: Excellent policy.

Mr. Peterson: A constant flow of new venture start-ups is necessary in order to preserve this mix by preventing a natural tendency towards industrial concentration. Small firms do operate effectively and efficiently in specific sectors.

Mr. Wildman: Is he going to read that whole thing?

Mr. Peterson: While government policy has done much to assist medium and large corporations through the use of tax incentives, write-offs, credits and deferrals, little has been done to aid small business. This sector must be viewed as a separate entity. Policies designed to benefit large corporations often have a negative impact on small business. At least their problems and needs are not the same and it is now time --

Hon. Mr. Welch: He reads well.

Mr. Peterson: -- indeed it is long overdue for government to come to the aid of small business.

Hon. Mr. Welch: When are you going to start the yellow pages?

Mr. Peterson: You’re going to get it.

Mr. Nixon: Where did the minister come from?

Mr. Peterson: If I really wanted to bore you, I’d read back one of your old speeches.

Mr. Nixon: We thought you were out drawing tickets.

An hon. member: No more Wintario to give out, eh?

Mr. Peterson: We define small business as follows --

Hon. Mr. Welch: What about the St. Catharines phone book? The yellow pages.

An hon. member: What happened to that rule about reading speeches?

Mr. Peterson: -- a small business concern is independently owned and operated and a small business concern is not dominant in its field of operation.

Mr. Nixon: The minister must have got out of the Albany Club early tonight.

Mr. Peterson: The Minister of Culture and Recreation should like small business.

Hon. Mr. Welch: That’s right.

Mr. Peterson: The small business sector employs between 50 and 60 per cent of all working Canadians. Because of its size, small business is flexible, able to adapt quickly to changes in the market and possesses great potential for technological and other innovations.

Hon. Mr. Welch: We would like to look after the tenants of Ontario. We have got rent review to do and the Essex school board Act.

An hon. member: Oh, they don’t want that.

Interjections.

Mr. Peterson: Are you against small businessmen or what?

Interjections.

Mr. Peterson: Most important, small business is labour intensive and can create new jobs more quickly and cheaply than --

Interjections.

Hon. Mr. Welch: The Treasurer told us about that in his budget.

Mr. Deputy Speaker: Let’s have some order, please.

Mr. Peterson: I agree with you.

Mr. Grossman: We thought you were finished.

Mr. Peterson: Thank you, Mr. Speaker.

Mr. Eakins: A good job somebody’s for the small businessman.

Hon. Mr. Taylor: Why don’t you take it as read?

Mr. Peterson: It’s estimated that the small business sector can produce a new job for in the order of $5,000 -- of course, that’s variable -- while the capital intensive sector may require anywhere from $70,000 to several hundred thousand dollars in capital investment, depending on the industry.

It is for these reasons and foremost its capacity for job creation that the Liberal Party believes that the small business sector must be supported and promoted. Small business has demonstrated potential for dynamic, innovative production. To continue and to expand its role in the economy, government assistance is required. This is not to be confused with government regulation or control, which would certainly be rejected by independent entrepreneurs. Rather, incentives and programmes specifically designed to ameliorate the problems facing this sector are required.

This whole paper that I am reading from is devoted to an analysis of the problem --

Mr. Deputy Speaker: I hope you won’t read at any great length, quoting from a document, because that’s not permitted.

Mr. Peterson: Well, Mr. Speaker, in our judgement --

Mr. Nixon: That’s a new application. I haven’t heard that since 1918.

Mr. Deputy Speaker: Not any one document anyway.

Mr. Shore: He has been reading for three hours, Mr. Speaker.

Mr. Nixon: He has copious notes, Mr. Speaker.

Mr. Peterson: If we can keep the interjections from the Chair down, Mr. Speaker, I can get through this a lot faster.

Mr. Conway: The Premier set a new low in that regard last Monday night.

An hon. member: You bet he did.

Mr. Peterson: This paper is devoted to an analysis of the problems facing small business in Ontario and the presentation of options for their solution.

[9:00]

All actions should be directed towards the development of business capacity for self-regulation and self-sufficiency. At the outset there are several factors that should be considered that constitute important parts of the environment in which small business operates. First, a study of small- and medium-sized businesses recently released by the European Economic Community says small- and medium-sized undertakings are important for job stability and the maintenance of industrial peace, and that legislation should be geared towards maintaining independent business.

Second, an extensive Canadian managerial and entrepreneurial class has failed to develop. The dynamic free enterprise system in Canada depends on Canadian entrepreneurs. Every small businessman is a manager, therefore a flourishing small business sector will automatically produce a strong Canadian entrepreneurial class.

Third, rising energy costs are making large, highly-automated capital- and energy-intensive centralized enterprises less viable. This problem brings to the fore the need to move in the direction of small, energy-conserving, labour-intensive industries. Small business has an important role to play in determining the future of the health of the Canadian economy.

Finally, governments at both the federal and provincial levels are increasingly becoming competitors with the private sector. In Ontario, this competition takes the form of direct government operation of services such as the Ontario Housing Corporation or occurs in the recruitment of personnel. Governments are often able to pay more for similar services, or can offer fringe benefits beyond the reach of the private sector, particularly to their friends.

Government activity dominance in these areas only serves to restrict the growth and prosperity of the private sector and therefore the economy as a whole. This competition is particularly harmful to the small business sector, as they do not have the capacity of large companies to compete with big government.

I want to, Mr. Speaker, if I can, and I’m going to spare you because --

Mr. Deputy Speaker: Order, please, the hon. member for Windsor-Riverside has a point of order.

Mr. Burr: Mr. Speaker, rule 16, section 4, says a member must not read unnecessarily --

Hon. Mr. Handleman: What do you say about the member for Ottawa Centre yesterday?

Mr. Burr: -- unless he is complaining about something that has been said or is defending himself against misrepresentation. This is certainly not the case.

Mr. Roy: How often do you get up and speak without reading?

Mr. Deputy Speaker: The hon. member’s point is well taken and I think the hon. member for London Centre has just completed his quote.

Mr. Peterson: I would say you are quite right, Mr. Speaker. I should say in fairness, I think maybe the distinguished hon. member’s eyesight is failing. These are just notes. He can’t distinguish between copious notes and a speech.

Hon. Mr. Handleman: Don’t follow them quite so closely.

An hon. member: What about the Premier’s speech last week?

Mr. Deputy Speaker: The hon. member for London Centre may continue.

Mr. Peterson: I just want to put into the record our suggestions to create a viable small business.

Hon. Mr. Welch: It is just a filibuster to stop us passing legislation.

Mr. Nixon: The other parties are not very interested in that.

Interjections.

Mr. Peterson: 1. We would establish entrepreneurial advisory centres to be funded by the government and administered by the private sector.

2. We would decentralize advisory services and locate centres in every municipality with a business community large enough to support one.

3. We would undertake an extensive advertising campaign to inform the public of the existence of the advisory centres and the services provided.

4. We would provide a special service to the advisory centres to allow businessmen to fill out a single application for financial assistance, which would be channelled to all agencies providing funding.

5. We would sponsor educational programmes and seminars to potential existing entrepreneurs given through community colleges, business associations, OECA and cable TV.

Mr. Wildman: Where can we get a copy of this?

Mr. Peterson: 6. We would allow a full tax deduction against other income for investment in venture capital corporations, for small business start-ups and expansion by both corporations and individuals.

7. We would provide for government sharing of losses actually experienced by financial institutions on loans provided to small businesses.

Mr. Deputy Speaker: I must again caution the hon. member that he can’t quote at great length from any document.

Mr. Peterson: Sure, I can.

Mr. Deputy Speaker: No, you can’t. No, you can’t.

Mr. Peterson: Mr. Speaker, in fairness --

Mr. Deputy Speaker: No, you cannot.

Mr. Peterson: -- these are notes that we are using to -- this is just a short --

Mr. Deputy Speaker: Order, please. If that is your own speech, a speech of your own making, it is quite acceptable. But if you’re going to quote at great length from another source, it is not permitted.

Mr. Peterson: Mr. Speaker, I wrote this in anticipation of this, so it is clearly my own work.

Mr. Deputy Speaker: I am sorry, I did not hear the hon. member.

Mr. Peterson: I wrote this, Mr. Speaker, clearly in anticipation of this.

Mr. Deputy Speaker: If that’s of your own making you may continue. If you’re quoting from another source, it’s not permitted.

Mr. Grossman: What’s the title of that document?

Hon. Mr. Welch: Dispense with it.

Mr. Ferris: There’s a precedent if I ever heard one.

Mr. Peterson: And you must admit, Mr. Speaker, it’s a very fine piece of work.

An hon. member: Who wrote the Premier’s speech?

Mr. Nixon: So you can read it if you wrote it yourself, right, Mr. Speaker?

Mr. Peterson: We would clarify the role of the Ontario Development Corporation so they would address themselves specifically to small business and expand it to include start-ups and a broader category of small business.

Hon. Mr. Welch: Why don’t you table it?

Mr. Peterson: We would ensure that the Ontario Development Corporation emphasized the support of Canadian owner-managed firms.

10. We would enable the Ontario Development Corporation, under special circumstances, to take equity positions in small businesses.

11. We would extend the provision of government-assisted loans, negotiated through lending institutions.

12. We would encourage lending institutions to provide, at least, equitable financing and access to credit for small businesses.

Mr. Wildman: How?

Mr. Peterson: Would you like me to read it out?

Mr. Grossman: What is the title of the document?

Mr. Peterson: Mr. Speaker, there’s a request.

Hon. Mr. Welch: Would you table that paper?

Mr. Makarchuk: We’ve read it.

An hon. member: He’s reading the short form.

Mr. Peterson: We would lower the corporate tax cost to small business to assure their ability to develop internally-generated sources of equity capital. We would assist with payroll taxes for each individual worker employed by a firm in a given year, up to a net gain in manpower of a specified number of persons over a three-year period to create employment.

We would provide tax credits in the form of deductions against corporate income tax, for energy conservation investments. We would extend the forgiveable succession duties on small business corporations to apply to businesses where shares are owned by more than one family.

We would simplify and integrate tax jurisdictions. We would urge the federal government to extend a five-year loss carry-forward limitation on non-capital losses under The income Tax Act.

We would discourage government dominance of research activity by having each ministry and agency contract out as much R and D work as possible. We would give preference to Canadian owner-managed businesses in allowing research grants and loans. We would require that any innovation resulting from government-funded R and D conducted by foreign-owned firms be translated into jobs for Canadians in the secondary sector. We would simplify and streamline the application procedures and information programmes for R and D.

We would provide incentives to small industry-related businesses to form co-operatives for the provision of central services. We would undertake a publicity campaign to explain the benefits of co-operative associations. We would provide advisory service on the mechanics of establishing co-operatives.

We would undertake a preferential purchasing policy for all government contracts from small business. We would set a target of 40 per cent of all government contracts and sub-contracts to be awarded to small businesses within a three-year period.

Mr. Conway: Only 50 per cent to the Tories.

Mr. Peterson: We would encourage big business to sub-contract to small business, particularly in government contracts.

Let me say, Mr. Speaker, the last recommendation is to establish a unit within the Ministry of Industry and Tourism promoting Ontario-produced goods, both domestically and internationally, particularly as a general marketing service for small business.

Mr. Nixon: That’s a very good programme.

Mr. Peterson: I want to say, Mr. Speaker, if you wanted any more details, as was the request from one member, I would be happy to provide them.

Mr. Wildman: Absolutely not.

Mr. Maeck: Why don’t you just table it?

An hon. member: We don’t mind if you steal our policy.

Mr. Peterson: You’re very welcome to it.

Interjections.

Mr. Deputy Speaker: Order, please.

An hon. member: It was a better speech than Segal’s, eh?

Mr. Peterson: I want to deal briefly with two or three more matters, Mr. Speaker.

Mr. Grossman: Briefly?

An hon. member: I was just wondering if you could keep your head up.

Mr. Peterson: We, in the Liberal Party, are very, very uncomfortable and displeased with --

Mr. Eaton: Do you mean your leader?

Mr. Peterson: -- the Treasurer’s new projection of 5.3 per cent target of full employment. This means that something like 236,000 people have been resigned to being permanently unemployed in this province.

In his budget statement, the Treasurer described Ontario as being “unparalleled abundance” and is quite prepared to consider the province to have full employment while 236,000 people cannot find jobs, nor is he willing to design a strategy to assist them. We know of no other government in the western world that’s prepared to accept this -- that would lie down on its back with that kind of a rationalization and say: “We have hit full employment.”

Mr. Warner: Give up.

Mr. Wildman: Supinely surrender.

Mr. Peterson: According to former federal Manpower Minister Andras, given a seven per cent unemployment rate, about four per cent is due to structural or frictional problems; 2.6 per cent is due to economic problems; three per cent is the result of problems with seasonal variation. The assumption that 2.6 per cent is caused by economic stresses can be addressed effectively and relatively quickly the acceptable rate of unemployment drops to 4.4 per cent. That’s almost a full percentage point below the Treasurer’s acceptable level.

I would like to remind the Treasurer that eight years ago Ontario had a functional unemployment rate of four per cent and that five years ago in an earlier budget he said, and I quote: “Any unemployment figure in excess of three per cent is not acceptable to the Ontario government.” How this Treasurer changes his philosophy and his views consistently is to me very alarming.

Mr. Reed: Political expediency.

Mr. Peterson: I also bring to the Treasurer’s attention the fact that in Saskatchewan and Alberta unemployment has been around four per cent for some time. How can it be in Ontario, this land of opportunity, that we are going to allow 1.3 per cent over that amount?

Mr. Wildman: Ontari-ari-ario.

Mr. Peterson: And as for the government’s much-touted job creation programme, what does it really amount to? At a time when an additional 12,000 people, an increase of five per cent, are expected by the government to be unemployed in 1977, and when unemployment in the construction industry is running at 19.2 per cent as of January this year and 3,356 jobs are to be created in the construction sector at a cost of $22,500 each, it is frankly a drop in the bucket.

Mr. Makarchuk: Right on.

Mr. Peterson: Yet these are the only jobs of any duration proposed in the budget. They are expected to be completed within this fiscal year. There will be no employment spin-off from these jobs because they are all in repair and expansion projects. There are no capital projects planned. This measure is no more than a holding tactic at best on the part of the government.

Mr. Nixon: Well, you can make jobs in the cabinet for only 45.

Mr. Peterson: We are not at all more encouraged with the job creation programme for Ontario’s youth. With a single minor exception, not one of the jobs created is designed to last more than 16 weeks. This means most of the 143,000 unemployed in Ontario between the ages of 15 and 24, representing almost 15 per cent of the labour force in that age group, will be back on the job market in the fall.

Mr. Wildman: But they get 250 jobs.

Mr. Peterson: The expanded regular summer employment programme is a 16-week programme, as is the Experience 77 programme. While Ontario’s Career Action Programme functions year-round, the jobs are only for 16 weeks in most cases although a very few are for 32 weeks.

Hon. Mr. Norton: There are 700 for year-round. What are you talking about?

Mr. Peterson: Read the budget.

Mr. Nixon: The population of the province is eight million.

Mr. Peterson: It is an apprenticeship-type programme that carries no guarantee of future employment.

The youth care for senior citizens, another 16-week programme, is creating employment for 250 young people in the budget at an exorbitant cost of $10,400 per job. Finally, there is the new Ontario youth employment programme. Contrary to the Treasurer’s contention that the programme will provide a 16-week subsidy for up to 20,000 young people at a cost of $10 million, in fact the programme will fund fewer than 16,000 summer jobs, each lasting only 16 weeks, and will not necessarily create one new job.

Mr. Nixon: Shame.

Mr. Peterson: That is up to the private sector to decide and the government hasn’t done anything for the private sector. Ministry officials assured us there was no administrative cost involved in the funds allocated for this programme, which means that no attempt will be made to check whether the programme is functioning as intended. In other words, whether the subsidy is, in fact, being used to finance new jobs or whether existing employees will be fired and new ones hired to fill the same positions but at a subsidized rate, we don’t know and we will never know it because already the government has set out a shoddy, superficial programme that allows it to go around and talk about 20,000 new jobs. In our view, it is functionally useless.

Mr. Wildman: Functional overlay.

Mr. Peterson: In sum, the Treasurer proposes to create 6,131 man-years of work for Ontario’s youth but only one job for every 23 of our unemployed young people and only for the summer.

Mr. Conway: Shame.

Mr. Warner: Absolutely shameful.

Mr. Peterson: Ontario’s total unemployed figure at this time is 312,000. Yet the Treasurer is proposing only 9,487 man-years of new job creation, one job for every 33 unemployed Ontarians. Even at this, the Treasurer’s projection of 6.3 per cent unemployment remains substantially below the Conference Board’s estimate of seven per cent for Ontario.

None of the other measures proposed in this budget will do anything directly to create jobs in the economy. In other words, not one single measure is directed towards long-term job creation. I don’t know why, for example, and I agree with my friend, he couldn’t raise the exemption up to 25 cents to keep the chocolate bar industry, for example, rolling at this time when it is in dire trouble. I don’t know why he is so intransigent on these kinds of issues when all of the evidence has been before us that he should take that kind of action. To us, it is just elementary and we support that kind of a move.

[9:15]

One of the things that concerns us is that the Treasurer has really not come to grips with serious problems but he has attacked certain problems in certain funny ways as revenue-raising devices. It has been a failure in trying to deal with energy conservation, for example, through motor vehicle licences or dealing with litter through the pop can tax. He just fools around with it, using the tax mechanism as a device to punish certain kinds of unacceptable social behaviour. Why doesn’t he address that form of behaviour?

The increased motor vehicle registration fee served no other purpose than to generate revenue. It’s another Band-Aid solution. I’ve talked about this earlier, and our policy is clear on this: We think it’s just a cheap trick to raise revenue.

Mr. Grossman: State your policy.

Mr. Foulds: That is their policy.

Mr. Peterson: The environmental tax also falls into the Band-Aid category. It’s clearly meant to be a generator of provincial funds rather than a solution to solid waste pollution problems. This tax is a licence to litter; government now has a stake in litter. I can tell you, Mr. Speaker, when you give government a stake in this kind of thing they keep increasing their role and they never solve the problem.

Mr. Kerrio: It should have been a deposit.

Mr. Nixon: Just like the profit in booze -- $450 million this year.

Mr. Peterson: If the government was genuinely interested in reducing the volume of solid waste in Ontario, it would have introduced a five-cent deposit on all cans.

Mr. Kerrio: Taking it from the kids.

Mr. Peterson: Such a proposal makes far more sense, as it encourages people to return empty cans when they can be recycled. This is particularly important when it is realized that collection is the major cost -- some estimates put it as high as 70 per cent -- involved in recycling.

Mr. S. Smith: The member for Carleton should be Minister of the Environment.

Mr. Peterson: I just want to make a couple of remarks about the venture investment corporations proposal, which we think is half-baked and totally inadequate. What it’s going to work out to -- mark my words -- is a tax dodge for major corporations and isn’t really going to solve the problem of creating new business or new jobs or new venture companies in this province.

Three years is long enough for a complete set of government proposals to have developed in this area, and it has taken three years of fooling around and mentions in almost every budget. Even this proposal will have little effect on small business. I want to quote Mr. Conrad again: “Rather than support venture investment corporations, which benefit only large companies, what is needed is a tax system to encourage individuals to invest in small business.” Not venture capital corporations, but individuals. That’s where it sits.

Hon. Mr. Handleman: That is what it is for.

Mr. Peterson: It is not. The minister should read the legislation; he doesn’t understand it.

The Treasurer’s proposal, on the other hand, will be mostly of benefit to large business. Past experience demonstrates clearly that venture capital corporations have a propensity for investing in larger, high-technology enterprises, usually for the international market. They are not normally labour-intensive and so contribute little to Ontario in terms of job creation.

Finally, while the Treasurer asserts that Ontario has demonstrated its concern for those in our society who are less fortunate, we find absolutely no provision for that kind of people. It really is, in my judgement and in our judgement, a big guy’s budget.

I have laid before the House and the members a lot of policy matters that I wanted to raise, and I want you to permit me a couple of more remarks, if you will.

Mr. Conway: More. More.

Mr. Peterson: The Treasurer spoke at 1 o’clock today to the annual meeting of the Automotive Parts Manufacturers Association. This speech is just hot off the press. It’s almost like the education policy of the government; the ink is still wet. But the Treasurer now is attempting, through a series of speeches, to explain the budget ex post facto.

I want to deal with some of the things he mentioned in that speech today because, in my judgement, it shows no contrition and no understanding of the issues that have developed after the presentation of the budget. I wish the Treasurer was here, because I must say it is a very deplorable speech. He said very nasty things about you, by the way, as per usual.

Mr. Lewis: Oh, he said delicious things about me. I am very pleased about it.

Mr. Peterson: I want to just take issue with some of his remarks. He said: “I call for a national industrial strategy that focuses our efforts on industries where Canadians have special talents and special skills.” Clearly, what is lacking is an Ontario industrial strategy. It’s a clear case of putting his responsibility over on to the feds; it’s easy to do and it could be done if he had the will.

Hon. Mr. Handleman: How can you do that without controlling tariffs?

Mr. Cassidy: The minister shouldn’t get so excited. He may not be back.

Mr. Peterson: He calls for “a major public assessment and review of the productivity problems in Canadian industry, along with examination of its capital requirements, and the development and implementation of a strategy for upgrading productivity.” Let me tell you, Mr. Speaker, he’s done nothing about it. He mentioned the auto pact in the last budget and he’s done nothing about it since. He’s just carping, complaining and shifting the responsibility.

He says: “This economy requires a boom in long-term investment.” You know, he should talk to the Premier. The Premier was quoted as making a speech just a few days ago saying the problem with this province is that people aren’t spending enough. He is trying to encourage people to spend, the Treasurer is trying to encourage people to invest. Those two should get together. One believes in the trickle-up theory, one believes in the trickle-down theory, and it’s all going to trickle down right on all of your heads, pretty soon.

Interjection.

Mr. Peterson: You gave this speech last year, Marvin.

Mr. Speaker: Order, please. The hon. member for London Centre will continue his remarks.

Mr. Peterson: I probably won’t go through the rest of this speech, I just commend it for humorous reading to everyone in the House.

I just want to say one thing before I wind up, on a personal note. I think a marvellous opportunity faces the government, and indeed, all the people of the Legislature at this time of national crisis. I am one of those people who believes that part of our problem, collectively, is that all parties, all levels of government have not efficiently delivered services to the people of this country. They see incredible amounts of duplication. They see federal and provincial departments of labour; federal consumer and corporate affairs, provincial consumer and corporate affairs. I would say respectfully we are all in this together. Almost the whole history of federal-provincial relations has been one jurisdiction looking for a loophole or an area and jumping into that area, either for reasons of revenue or to assert their power as an election goodie.

It seems to me it is time for that kind of thing to stop, now. I would recommend to the government that they take a lead in this kind of thing; sit down, with a new redistribution of powers --

Interjections.

Mr. Speaker: Order. The hon. member for London Centre only, please.

Mr. Peterson: I just want to share this personal reflection, because I think it’s going to be one of the keys to keeping this country together. It’s not the whole answer, obviously, but it is one of the keys, that we make people feel we are not unnecessarily and continuously squandering their tax dollars. When we see these endless rounds of federal-provincial conferences, with minister of energy spatting with minister of energy; and industry and tourism against industry and tourism; and environment against environment; and all these kinds of things, in my judgement, it undermines the credibility of government at all levels.

I am saying we need a new separation of powers. You are going to have to give some lip, you are going to have to take some; and you’ll have to do it more efficiently. I assure you that with the good intentions expressed by the Leader of the Opposition and by my leader to this kind of thing, I feel very confident that you can involve all members of the House in that kind of co-operative effort. I recommend it to the House. I recommend it to you as fast as is humanly possible.

I was part of a commission from the University of Toronto Law School when it made a submission to the bi-and-bi commission about 1964, when I was very young. At that time, we suggested to the bi-and-bi commission that they look at a new redistribution of powers, that they look very closely at the German system where the upper house makes provincial appointments and has a substantial influence over national policy. I want you to know that I am still very much attracted to that kind of a philosophy and that kind of a point of view.

Hon. Mr. Taylor: That’s where he got his energy policy.

Mr. Peterson: I leave it with the government to try to take some major initiatives in that kind of an area.

Hon. Mr. Handleman: Trudeau would never believe that.

Mr. Peterson: I am just coming to the end, and I must say I thank the members of the opposition and the worthy members opposite for their indulgence.

Mr. Conway: Marvin did that.

Mr. Peterson: I have enjoyed this. It has been a long time, and I have taken a lot of time of the House.

Mr. Conway: More, more.

Mr. Peterson: I appreciate the opportunity to lay our very solid, constructive proposals before this House. I can say to you that they are done as charitably, as honourably as can be done. We have some fundamental disagreements. Some are with the government’s words, some are with its strategies, and a lot with its policies. We lay them there for you. Use them, pick them up, take them; we’d be delighted, we’d be flattered. You’ve done that before, you’ll do it again; and we’re delighted.

What we need now is not a lot more rhetoric and a lot more nonsense -- I have contributed my share to that and I’m about to sit down -- we need to start, collectively, with the great task of creating jobs tomorrow morning. There are lots of suggestions for you; take it up, use it, and good luck.

Hon. Mr. Handleman moved the adjournment of the debate.

Motion agreed to.

Mr. Lewis: Why was the minister in such a rush?

RESIDENTIAL PREMISES RENT REVIEW AMENDMENT ACT (CONCLUDED)

Resuming the adjourned debate on the motion for second reading of Bill 28, An Act to amend The Residential Premises Rent Review Act, 1975.

Mr. Speaker: When we rose I believe the hon. member for Wentworth (Mr. Deans) had the floor, but he is obviously not here to continue his remarks.

Mr. Lewis: What do you mean, obviously?

Mr. Speaker: I can see. Is anybody else going to participate in this debate?

Mr. Lewis: We have about an hour, Mr. Speaker.

Mr. Speaker: I’m not putting a time limit on. I recognize the member for Riverdale.

Mr. S. Smith: Much ado about nothing.

Mr. Conway: We have had our Shakespeare for today, Jimmy.

Mr. Renwick: I have just a few remarks I’d like to make on the rent review bill.

Mr. Germa: Talk about Shakespeare.

Mr. Renwick: I have a very minor contribution to make in the unavoidable absence of my colleague, the member for Wentworth --

Mr. Eakins: You made it this afternoon.

Mr. Kerrio: He wasn’t making much sense.

Mr. Renwick: -- about the rent review bill. I think it is essential from the point of view of this party that we get on with this bill and get it passed. We’ve got to go through second reading. I anticipate there will be no division on second reading. I think the bill has then got to go into committee. We’ve given notice in accordance with the rules about the amendments which we propose to move to the bill, and we’re prepared to expedite the passage of the bill.

There is, however, one comment that I wish to make, because of the confusion which arose at the end of last week when there was a certain fluttering among the dovecots of the Tories because the House leader was absent. When they had no speakers to rise on this bill at adjournment on Thursday afternoon, they then put up a series of speakers because they obviously didn’t know how to cope with a proposal that in some way or other, at some point in time --

Hon. Mr. Handleman: A series -- three?

Mr. Renwick: -- the eight per cent should be reduced to six per cent. I want you to understand our position very clearly. We will move, as our first amendment in the committee of the whole House on this bill, that the eight per cent be reduced to six per cent. If that attracts the support of our colleagues on the left or, indeed of the government, then of course we should be quite happy.

If by chance it does not attract that kind of unanimous support or the support of the party on the left, we understand, from the press and from what has been said in the House, that the Liberal Party proposes to move an amendment to provide that the rent percentage be tied in some way to the AIB wage guidelines at that time. We’re quite prepared to support that amendment, subject to a subamendment which we would move. We would move it to the Liberal amendment unless the Liberal amendment contains that provision. We would then support -- as a second best to our own amendment, if it didn’t achieve the support which we wanted -- an amendment which said that we would go to the AIB guidelines on October 14, 1977, provided the maximum is six per cent. Now on those conditions we’re quite prepared to support the Liberal Party’s proposed amendment, if they wish to make it that.

Mr. S. Smith: That has the same effect; it has the same effect as your amendment --

Mr. Lewis: It has exactly the same effect, precisely.

Mr. Renwick: Or the Liberal Party can, if they wish, stop playing games over a period of a few months and come with us to a flat six per cent.

Mr. Lewis: That’s our campaign slogan by the way -- come with us. I want you to know that. Fashioned spontaneously, tonight.

Hon. Mr. Welch: Count us out.

Mr. Renwick: If I could say to my friend the House leader of the Conservative Party, with that peppercornious remark in this debate, I now take my seat.

[9:30]

Hon. Mr. Handleman: Mr. Speaker, it seems I have been waiting forever to make these wind-up remarks on this very important bill. I think I recall that when I opened the debate with very brief introductory remarks, constituting about 30 seconds in order to save time, I pointed out to the members of this House the urgency of passing this bill. I am a little disappointed in the member for Riverdale (Mr. Renwick) suggesting there was any intention on the part of the government or the government members to delay the passage of the bill.

Mr. Warner: You should have brought it in December.

Mr. Speaker: Order, please.

Hon. Mr. Handleman: I think I should point out, Mr. Speaker, and get it on the record, that there have been nine speakers from the New Democratic Party on this bill.

Mr. Sargent: Why all of a sudden the hurry?

Hon. Mr. Handleman: Five from the Liberal Party and three from the Conservative Party.

Mr. Davidson: Your strategy was busted, wasn’t it?

Hon. Mr. Handleman: I think it is unreasonable to suggest, and even arrogant to suggest, that there was any ulterior motive on the part of our members in speaking on this bill. In fact, many more of them wanted to speak but because of our concern for the interest of tenants we have decided to let this bill come to a voice vote tonight.

Mr. Nixon: Yes, but one of them was Frank Drea.

Hon. Mr. Handleman: The suggestion made by the member for Riverdale that we were trying to delay the passage of this bill is the kind of device that is --

Mr. Warner: You should have brought it in a month ago.

Mr. Lewis: You know that three government speakers on any bill constitutes a filibuster.

Mr. Cassidy: They couldn’t get three different speakers on 30 bills.

Mr. Speaker: Order, please.

Hon. Mr. Handleman: Mr. Speaker, I think that suggestion from the member for Riverdale smacks of the kind of hypocrisy which we have come to accept from that party.

Mr. Cassidy: You should know about hypocrisy, Sidney.

Mr. Warner: Why don’t you resign? It is the only honourable thing you can do at this time.

Mr. Speaker: Order, please. Will the hon. minister keep his remarks as parliamentary as possible, and I consider that was not a very parliamentary remark. Will the hon. minister keep to the principle of the bill.

An hon. member: It will be the first time anybody did.

Hon. Mr. Handleman: Mr. Speaker, if the word hypocrisy is unparliamentary then I’ll use the word sanctimonious, which I know has been used by the Leader of the Opposition himself to describe --

Mr. Nixon: How about unctuous?

Mr. Speaker: Order, please. Will the hon. minister continue with the bill.

Mr. Sargent: Tie a can of beer to it.

Mr. Speaker: Order.

Hon. Mr. Handleman: Mr. Speaker, many of the points which have been raised in the debate will be repeated later in clause-by-clause discussion in committee of the whole, and therefore I am going to restrain myself in commenting on them. It really is tempting to try to destroy some of those suggestions now but we will have an opportunity at some later date.

Mr. Davidson: You are a restraint.

Mr. Conway: Be sure you restrain the Premier (Mr. Davis).

Mr. Ferrier: No filibustering now.

Hon. Mr. Handleman: But I would be remiss, Mr. Speaker, if I allowed to go without comment some of the remarks which have been made and directed at me personally by some of the members opposite. Not all of the members adopted that approach, and I think I should single out the two who didn’t in my view. I was somewhat warmed by the preliminary remarks of the member for Armourdale (Mr. Givens), who is not here tonight, and may not be here for very much longer, as I understand.

Mr. Warner: You scared him off.

Hon. Mr. Handleman: I was warmed by his remarks until he dashed cold water all over everything that I have done, but I think that is par for the course.

Mr. Conway: You are a bit of a cold fish.

Hon. Mr. Handleman: And the member for Cornwall (Mr. Samis), who is not here, spoke so reasonably on this particular bill.

Mr. Lewis: He is a very reasonable man.

Hon. Mr. Handleman: In much the same manner as I have been speaking for the past year and a half.

Mr. S. Smith: Does he also say it is a mess?

Mr. Nixon: Sounds like subversion.

Mrs. Campbell: Who says it’s hypocrisy?

Hon. Mr. Handleman: I think it really is a remarkable thing that he is in that particular caucus. If he is not around here after a certain event I think I might ask him to come and give me some advice, because it is the kind of advice that I have been seeking.

Mr. Nixon: You won’t be in the ministry.

Mr. Speaker: Order, please. We are wasting valuable time here. The hon. minister will continue with his remarks.

Hon. Mr. Handleman: Mr. Speaker, aside from those two members, the other speakers who very piously said they were going to approve this bill in principle, and obviously they are going to, spent the rest of their time, at considerable length, in tearing apart everything in the bill.

Mr. Lewis: Well, what is wrong with that?

Hon. Mr. Handleman: Nothing wrong of course; that is normal debate, blaming the government for it specifically. It is a government bill, I accept that; despite all the amendments which have been made by other parties. But specifically, of course, the criticisms seem to be directed at me as the minister responsible for the administration of the Act. That goes with the territory too, I am not suggesting it shouldn’t; but what I would like is to have that criticism based on fact.

Mr. Conway: You sound like Duplessis.

Mr. Speaker: Order, please.

Hon. Mr. Handleman: I don’t think it should be based on hearsay; it shouldn’t be based on backroom gossip; it shouldn’t be based on headlines in the press which may or may not reflect the articles beneath them. I would like to set on the record my own personal position with regard to rent review as I have enunciated it across this province during the past year.

Mr. Warner: You are going to resign.

Mr. Cassidy: You have six minutes.

Mr. Speaker: Order, the hon. minister has the floor.

Hon. Mr. Handleman: I am a person who believes in the free market and I appreciate the benefits that system has brought to the people of Canada and the people of Ontario. Because of that belief, I am naturally apprehensive about over-regulation, about unwarranted intervention in the marketplace by government. I believe I share that apprehension with the majority of the members in this Legislature and the majority of the people in this province, and I think they will show that in the very near future.

Interjections.

Hon. Mr. Handleman: But that doesn’t mean, Mr. Speaker, that there doesn’t come a time for intervention, and the government must intervene when it is necessary. That time came in 1975 when legislation was introduced by the Minister of Housing.

Mr. Conway: Yes, because you were desperate for votes.

Hon. Mr. Handleman: It was needed in 1975 and it is needed in 1977 --

Mr. Cassidy: Both election years.

Hon. Mr. Handleman: -- and according to this bill, it is going to be needed in 1978. Despite the carping criticisms of some of the members of the opposition the legislation has worked.

Mr. S. Smith: Is it not a mess?

Hon. Mr. Handleman: It has worked well -- and it is appreciated by the vast majority of the tenants in this province; and even by some of the landlords, surprisingly enough.

But what it hasn’t done -- and I wish the member for Cornwall was here -- it has not solved the problem it was designed to meet. It has met the problem but it has not solved it. I think I have heard from almost every member in this House that the problem is the shortage of rental accommodation in this province. Rent review, rent control does not solve that problem, and I think every member in this House, if he was honest, would admit that.

That is what I have been saying, that rent review does not solve the problem. If anything it exacerbates it.

Mr. S. Smith: Neither have any of your other policies solved that problem.

Hon. Mr. Handleman: But that doesn’t mean it is not necessary, that doesn’t mean it hasn’t worked; because what it was designed to do was to phase in --

Interjections.

Mr. Speaker: Order, please. The interjections are not adding to the calibre of the debate.

Hon. Mr. Handleman: Mr. Speaker, it seems to be an accepted technique of the opposition to take every one of the measures introduced by government or proposed by government and deal with them in isolation from each other. There is nothing wrong with that, except that it doesn’t give a full picture.

Mr. Wildman: You’ve got a lot to learn about opposition techniques.

Hon. Mr. Handleman: Mr. Speaker, the Speech from the Throne, while succinct, outlined the measures this government is bringing in to solve the problem, not just to meet it. Rent review is to meet it and it will do that.

Mr. S. Smith: Well stay here and solve it.

Hon. Mr. Handleman: Solutions are in the Speech from the Throne and have been introduced in this House by ministers responsible.

Mr. S. Smith: I didn’t see anything in the Speech from Throne about an election.

Hon. Mr. Handleman: I want to put those measures each in turn, and then put them together and suggest to you, sir, that we are finding the solutions. They will not be overnight solutions, they will not be the pushbutton solutions the NDP will undoubtedly propose to the people of Ontario.

Mr. Lewis: What is going on here?

Hon. Mr. Handleman: The first measure --

Mr. Lewis: Are you personally announcing the election?

Interjections.

Mr. Speaker: Order, please.

Hon. Mr. Handleman: I am speaking in response to the arguments put forward by the members in this debate.

Mr. Lewis: You are a back-bench cabinet minister --

Mr. Speaker: Order, please. The hon. Leader of the Opposition does not have the floor, please.

Mr. Lewis: Well, Mr. Speaker, on a point of order.

Mr. Speaker: No.

Mr. Lewis: On a point of order. What do you call this?

Mr. Speaker: Order, please. That’s not a point of order. The hon. minister has the floor to continue his remarks.

Mr. Hodgson: Sit down, Stephen.

Interjections.

Mr. Lewis: For the moment why don’t you just say you’ve cleared the way for June 9 and it will stop all this nonsense?

Mr. Speaker: Order, please. Will the hon. member subside to his seat, please. The hon. minister.

An hon. member: We’ll get Jack Stokes to throw you out.

Hon. Mr. Handleman: The hon. Leader of the Opposition wants to know what this is all about. It’s too bad he wasn’t here for the debate, because I am answering the points raised by his members and others during the debate; and I would like to have an opportunity to do so.

Mr. Lewis: I listened to the debate.

Hon. Mr. Handleman: The first measure which was announced in this Legislature, and went almost completely unnoticed, was, I think, a great achievement -- the merger of AHOP, the federal programme, and the provincial HOME programme.

Mr. Lewis: That wasn’t an achievement.

Hon. Mr. Handleman: It’s not much of an achievement? I tried it three years ago on the then minister in Ottawa, Mr. Ron Basford, and was turned down completely. I think it is a great achievement. And it is the kind of thing --

Mr. Warner: You are too modest.

Hon. Mr. Handleman: -- that the member for London Centre, in his comments, was talking about.

Mr. S. Smith: He is out of order, Mr. Speaker.

Hon. Mr. Handleman: It takes a great deal of persuasion to convince Ottawa to co-operate with the province in a programme for the people of this province, and that was done. I think my colleague deserves a great deal of praise for it; that’s the kind of co-operative federalism we’ve been looking for.

Mr. S. Smith: Out of order, that is not addressed to the bill in any --

Hon. Mr. Handleman: And I think we can get more of it as we continue to bargain.

Mr. Ferrier: Out of order.

Mr. Speaker: Order, please.

Hon. Mr. Handleman: The merger of these two programmes will make it possible for persons of modest income to own their own homes in those urban centres where the AHOP ceilings have been pierced.

Mr. Lewis: Oh, come on.

Mr. Martel: At $30,000 a year?

Hon. Mr. Handleman: They want to know how many units this will result in, that’s always the question. Put the figures into a computer and out comes the answer. Well that is not the way it is done in the private sector.

Mr. Ferrier: Back to the principle of the bill.

Hon. Mr. Handleman: This is going to affect the private sector considerably.

Mr. Lewis: This doesn’t do anything for persons of modest income.

Hon. Mr. Handleman: Anyone who wishes to approach this problem with any kind of objectivity Mr. Speaker, cannot but recognize that when persons of modest income have an opportunity to own their own home they would rather do that than rent.

Interjection.

Hon. Mr. Handleman: Persons of modest income; in this province in 1977 $8,000 and $9,000 a year is modest income, and these people will be able to purchase under the merged programmes.

Mr. Lewis: No; they just compete for a limited number.

Mr. Speaker: Order, please.

Hon. Mr. Handleman: There will be homes built specifically to sell to that market. Those people will move out of accommodation; some of it rented, some of it substandard, but it will free up rental units. How many? I don’t know the answer to that, nor does anyone.

Mr. Lewis: About 10.

Mr. Martel: I thought you said it solved the problem.

Hon. Mr. Handleman: It’s part of the solution. There is no single solution. Unfortunately for the NDP, that is not the way things happen. They would like to see it done that way but it won’t happen that way.

Mr. Conway: I hear Otto Jelinek is moving.

Mr. Lewis: You are such fundamentalists over there.

Hon. Mr. Welch: Doctrinaire.

Hon. Mr. Handleman: Yes, the next step which was taken, also by the Minister of Housing, was the announcement of the rental incentive programme. This has been scorned by the New Democratic Party as giving us only 3,000 new units. That’s the goal. The Minister of Housing, quite rightly I think, is being very conservative in his target, saying we will get 3,000 new units out of this incentive programme; mostly in Metro, some in Ottawa.

Mr. Wildman: Get on to the principle of the bill.

Hon. Mr. Handleman: If we add those 3,000 to the 1,500 units which were built under the federal programme, plus the 1,000 units which were built without any government assistance, it would appear there could be as many as 5,000 new units in the next 18 months in Metro, Ottawa, Thunder Bay -- the areas this is designed to assist.

All that will do is add approximately one percentage point to the vacancy rate. One percentage point isn’t very much. All we can do is we change it from two to three or one to two.

Mr. Lewis: It’s a good thing you are in that portfolio.

Hon. Mr. Handleman: I listened to the member for Oshawa (Mr. Breaugh) talk about vacancy rates and he came up with a five per cent vacancy rate. That is what he suggests as a reasonable rate that we should be aiming for. I don’t know whether he saw the report that was given to the civ of Toronto by the organization called the Bureau of Municipal Research and looked at the vacancy rates in Toronto. Starting in 1971 -- that was the year many of us arrived here looking for rental accommodation, which was very plentiful, there was no shortage whatsoever. We all had good opportunity to get good rental at reasonable rates. The rate in December of 1971, which was a couple of months after many of us arrived here, was 2.4 per cent in the city of Toronto; in Metro it was 3.4. Most of us were looking for places in the city. It has never since 1971 in the city of Toronto been higher than 2.8 per cent and there were ample rental units available with that kind of a vacancy rate. Any talk of five per cent is absolute nonsense.

An hon. member: What about income?

Mr. Speaker: Order, please, every hon. member has had an opportunity to debate this bill. The minister is replying. Order, please, the hon. minister is supposed to be replying.

Hon. Mr. Handleman: I am responding to the points raised by hon. members, Mr. Speaker.

Mr. Conway: It’s an election speech.

Hon. Mr. Handleman: The budget brought forward one incentive which apparently has not been related at all to rental accommodations. I notice that one of my colleagues -- at least, in the NDP -- on the economic and cultural nationalism select committee is here, and he may recall when we were discussing the possibility of putting barriers in the way of foreign ownership there were many people in the private sector came to us -- and I must admit that I didn’t listen to them too well -- and warned us that if we put any kind of barriers in this kind of purchase there would be a lack of investment of a kind that we were trying quite frankly to stop, which was German investment in apartment units. There’s a reason for that: German investors are able, under their own tax laws, to purchase apartments in Ontario and in Canada and, because of their own tax laws, they can either pay a higher price or accept a lower return than a Canadian investor can for exactly the same building.

Mr. Sargent: You are building slums.

Hon. Mr. Handleman: The 20 per cent land transfer tax cut that market off and, as a result, nobody in Germany has bought a building since that date. What has happened is that many builders, who built small apartment houses and then intended to sell them to an investor because they were not managers, were stuck with them --

Mr. Martel: We opposed the tax, if you recall.

Hon. Mr. Handleman: -- and they had no money to go out and build new ones. Whether the member opposed it or not, that has been removed in the budget and adds another incentive to build rental accommodation in Ontario. Put those measures together --

Mr. Martel: We opposed it and so did you.

Mr. Lewis: Can you give us a stitch of evidence on that? Can you give us one concrete example?

Mr. Deputy Speaker: There is no obligation that the minister answer any question on second reading.

Hon. Mr. Handleman: I don’t mind responding to the Leader of the Opposition on that. As Minister of Housing, shortly after the tax was introduced, I met with apartment owner after apartment owner who said that sales were in progress and were immediately cut off on the imposition of the tax. They needed their money in order to build more apartments.

Mr. Lewis: Give us one example.

Mr. Conway: Just one example.

Hon. Mr. Handleman: I have said I met with apartment owner after apartment owner, by the dozens, people from Hamilton, people from Kitchener, people from Metro, all of them saying the same thing.

[9:45]

Mr. Conway: Name one.

Mr. Nixon: You and Bill Kelly.

Hon. Mr. Handleman: Now you want me to pick out the name of somebody? No, I will not. I don’t recall, three years ago -- I recall the meetings and they didn’t come in the ones. They came in the 10s and the 20s. So they were quite sincere about this.

Mr. Nixon: We warned you, Sidney.

Hon. Mr. Handleman: In any event, if anybody is thinking about this objectively, Mr. Speaker, they must recognize the removal of that tax will provide the kind of roll-over investment that we need to encourage people to build small apartment units in this province. That will happen once the tax -- once it is known, at least, in foreign circles, that the tax now has been removed from that kind of investment.

Mr. Wildman: Are you going to advertise?

Hon. Mr. Handleman: Now the other aspect of this thing is that everybody’s been saying that this is short-term; nobody’s giving any thought to the future whatsoever, no programmes are in place. Well again, read the Speech from the Throne. I wish the member for Cornwall was here because he made some suggestions which were identical to suggestions that I made six months ago. We will be proposing to this Legislature and to the people of Ontario a number of policy alternatives; and there is a variety of these, Mr. Speaker.

Mr. Conway: The question is, can the government be believed?

Hon. Mr. Handleman: Oh, well --

Mr. Conway: We’ll watch the Premier’s words.

Hon. Mr. Handleman: We’ll be believed enough so that we’re in a position to come back and do it; and we will do it.

Mr. Deputy Speaker: Order, please. The hon. minister’s remarks are appropriate as long as it’s within the ambit of the principle of Bill 28.

Hon. Mr. Handleman: Again Mr. Speaker, I simply urge all members, as I have done before, to read that portion of the speech which deals with what our future course of action will be to develop the kind of alternatives that we need; if people accept that this is temporary legislation, and it’s not temporary as long as you don’t have an expiry date on it. There is no way that you can come back here, except if the legislation is temporary, and say well, we’ll come back and we’ll rescind the legislation when the time comes. If you set a date at least you have a target to try to meet, and I think that’s exactly what we’ve done by putting that date on it.

One of the problems that came up during the debate, and it seemed to me speaker after speaker mentioned this, that what you have to do is give the tenant equal status with the landlord in hearings before the board. That is based, of course, on the whole idea of confrontation, the whole idea that this is adversary legislation, that you’re pitting the tenant against the landlord. That really reflects a failure to understand the whole purpose of this legislation.

The onus to prove anything in this legislation is entirely on the landlord, regardless of who initiates the appeal. If the tenant brings the appeal, he immediately transfers the onus to the landlord to prove that the rent increase which is being appealed is justified. If the landlord is required to bring a review under the legislation, he must prove to the rent review officer that he is justified in asking for that. And really, it seems to me Mr. Speaker, there has been a conscious attempt to stir up the kind of confrontation which, as I said before, the NDP thrives on. Without that confrontation they really have nothing to offer the people.

Mr. Renwick: That doesn’t make it non-adversary.

Mr. Cassidy: You weren’t even letting tenants into some of the hearings.

Mr. Conway: Old iron-heels Sidney.

Hon. Mr. Handleman: It’s my hope that we will be able to present to the people of Ontario --

Mr. Cassidy: You’ve stripped them of the right.

Hon. Mr. Handleman: -- that series of policy alternatives to enable the government to have in place permanent legislation. I said in a number of speeches, and many of the members opposite have heard this, we can never go back to what it was before. Once you have intervened to this extent, you’ve established a future permanent programme. But it need not be rent control or rent review, and I’m suggesting that a programme of tenant protection is something that this government can and will bring forward for discussion among the people of Ontario. And as I say, I think the member for Cornwall may be free to give me some advice along those lines, and I’d be glad to ask him.

Mr. Warner: We all are.

Mr. Conway: You need a new parliamentary secretary.

Hon. Mr. Handleman: One of the problems that has come up in this -- and I hate to open up old wounds on this, Mr. Speaker, because one of the members responsible happens to be in the House -- but I see signs again of “let’s take credit”. The member for Oakwood (Mr. Grande) used that phrase over and over again in his speech.

Mr. Lewis: That’s our new election slogan: “Let’s take credit.”

Hon. Mr. Handleman: Who’s going to take credit for this? Who can take credit for this?

Mr. Lewis: We found it tonight.

Hon. Mr. Handleman: There’s nothing new about that.

Mr. Conway: Darcy’s given you a pretty good head start.

Hon. Mr. Handleman: There’s nothing new about it at all, but I really --

Mr. Lewis: We are sticking with the first one.

Hon. Mr. Handleman: I really can’t pass up this opportunity to read it into Hansard that crushingly revealing paragraph --

Mr. Nixon: Are you going to permit this reading, Mr. Speaker?

Hon. Mr. Handleman: -- in the famous caucus memorandum which is co-authored by the member for Ottawa Centre and the member for Durham East (Mr. Moffatt). I’m reading very briefly from another document. It reads as follows and I quote: “We must be seen to be initiating the pressure to extend rent review.”

Mr. Bain: Not only be the pressure, but be seen to be the pressure.

Hon. Handleman: “If the Tories eventually agree, as is likely” -- their prognostication is somewhat correct -- “we then still win credit.” Great phrase. You’ve got to win credit or what’s the use of doing anything?

Mr. Nixon: Did you get that in a plain brown envelope?

Hon. Mr. Handleman: I continue to read: “If the Tories don’t agree, then we stand alone as the party which works for tenants”. And, gentlemen, it goes on to say: “If we can make the Liberals make a clear anti-tenant vote along the way, so much the better.”

Interjections.

Mr. Cassidy: On a matter of privilege --

Mr. Deputy Speaker: A matter of privilege?

Mr. Cassidy: Yes, I think it should be put on the record that it is because of the pressure of the NDP that we ever got this protection for tenants in the first place.

Mr. Nixon: That wasn’t even a good interjection.

Hon. Mr. Handleman: If I may continue on the point of order, the NDP is going to claim forever for it.

Mr. Lewis: That document was called the corporate overview, 1976-80.

Hon. Mr. Handleman: It is so typical because it doesn’t seem that really there is any concern here to help the people; let’s get credit for, and never worry about it.

Mr. S. Smith: You never do that.

Mr. Conway: What have you got Darwin Kealey doing, Sidney; is he out taking alms?

Hon. Mr. Handleman: There is one other point that I really must dwell upon, because there’s been a great deal of speculation --

Interjections.

Mr. Deputy Speaker: Order.

Hon. Mr. Handleman: There has been a great deal of speculation on one other point and that is the proposed amendment which was announced by the member for Perth in his opening remarks last week.

Mr. Conway: Another sycophant looking for a public job.

Hon. Mr. Handleman: Now I know what the New Democratic amendment is, they have made no bones about it. They have said all along that they would move to reduce the guidelines from eight per cent to six per cent and hang the consequences. Never mind what will happen, that will be seen by the tenants of Ontario to be in their interests. Whether it is or not, it will be seen by them.

Mr. Bain: It is, it is.

Hon. Mr. Handleman: I accept the fact that that is a very simple thing to try to explain. I happen to have more respect for the intelligence of tenants than that; but okay, that is what the NDP amendment is going to say. But the Liberals have suggested that they will introduce an amendment which does not contain any figure, which ties us to an order in council passed by the federal cabinet, which can be rescinded, changed, altered at any time --

Mr. S. Smith: It is known as the Anti-Inflation Board. The Anti-Inflation Board is mentioned by the Treasurer from time to time, that great phrase AIB.

Hon. Mr. Handleman: If they look at the regulation, the regulation is passed by the Governor General in Council, which is the federal cabinet; no matter how they cut it, that is the way it is going to be done.

That is not surprising coming from the Liberals, but what really surprises me is, before we sent the compendium, which showed why we had arrived at eight per cent in our Act -- and we gave all the figures -- before we had sent the compendium the leader of the Liberal Party said he couldn’t see very much wrong with eight per cent.

Mr. Nixon: Let wages be tied to six per cent, you are still going to stick with eight per cent.

Hon. Mr. Handleman: I suppose we made the mistake of providing them with too much information to prove that eight per cent was in fact logical and was not something that had been pulled out of the air --

Mr. S. Smith: That is right, and it affects people’s wages.

Mr. Nixon: You never learn, do you?

Hon. Mr. Handleman: -- but was arithmetically calculated, based on certain cost components.

Mr. S. Smith: The Treasurer likes the AIB.

Hon. Mr. Handleman: Once he had seen that, then we get the amendment to say, you know, “we must try not to be seen as anti-tenant voters, according to the NDP memorandum, we must try to get some of that credit.”

Mr. S. Smith: You control wages, you control rents.

Hon. Mr. Handleman: That is the amendment they are going to be bringing in. But I don’t see much point in providing a compendium if it’s not going to be read.

Mr. Nixon: Wait until the reeve of Nepean gets to you.

Hon. Mr. Handleman: Almost every speaker, except the member for Perth, suggested that they had seen no information to justify the 8 per cent. I suppose the member for Perth did not share the compendium with his other colleagues; but we sent it to them, we showed them why. I think perhaps we now have to put it into the record, because nobody else has seen it.

Mr. Nixon: He made a knowledgeable and reasonable speech.

Mr. S. Smith: Why did you leave yourself the loophole that you could lower it at any time? What was that about?

Hon. Mr. Handleman: Because the figures may change, right? Exactly.

Interjections.

Mr. Nixon: And you would do it by order in council.

Mr. Conway: Just like Spadina.

Mr. Ruston: Two weeks before the election, lower it.

Hon. Mr. Handleman: When the figures do change, under our Act we will have to give as much as 120 days advance knowledge of it so that the system can work.

Mr. Ruston: Just before the election.

Hon. Mr. Handleman: There are certain timeframes in the legislation, in The Landlord and Tenant Act. At the moment there is no reason to lower that figure, and until you have those figures it seems to me irresponsible to suggest lowering it.

Mr. S. Smith: Like mid-campaign.

Hon. Mr. Handleman: If I may mention what the figures are, municipal taxes, which on the average in Ontario constitute 25 per cent of operating costs in rental units, have an inflation factor of 13 per cent according to the best information we have been able to obtain.

Mr. S. Smith: Do you expect them to go down, and energy prices to go down?

Mr. Deputy Speaker: Order, please. During the course of this debate the members of the opposition have asked several questions. I’m sure they expected a reply. Please do courtesy to the minister and allow him to be heard.

Mr. Conway: We didn’t expect an election.

Hon. Mr. Handleman: Thank you, Mr. Speaker. Maintenance and repairs constitute nine per cent of the cost and will have an inflation factor of approximately 10 per cent based on wage guidelines. Administrative costs, which form nine per cent of the costs, will have in inflation factor of approximately 20 per cent due to some legislative changes in Ottawa and, of course, the continuation of rent review. Fuel costs, which constitute seven per cent of the costs, are expected to rise by 30 per cent. Electricity and water costs are expected to increase by approximately 12 per cent.

Mr. Conway: The road to Damascus.

Mr. Davidson: You implemented them.

Hon. Mr. Handleman: These five factors, none of which have an inflation factor below 10 per cent, constitute approximately 55 per cent of the total operating costs on the average. That doesn’t mean some landlords will experience less and others more, but they are the only reliable figures we have at the present time.

Mr. Davidson: The government implemented them.

Mr. Conway: Sidney on the road to Damascus.

Mr. Deputy Speaker: Will the member for Renfrew North stop his yammering?

Hon. Mr. Handleman: So, using the figures we have, using the inflation factors we have and the weighting factors we have, we have given to both opposition parties the figures we have and which they have, to show that the operating costs will rise by approximately 8.65 per cent. It could be less or it could be more, but the eight per cent seems to us -- and I see no evidence from anybody to suggest otherwise -- to be supported by the facts that we all have available to us now.

Aside from the fact that we have arithmetic figures to show that eight per cent is a reasonable guideline, and it’s not a ceiling, it doesn’t provide any right to the tenant that he doesn’t have now. Six per cent won’t give him any more than he now has. He can appeal any rent increase, whether it’s one per cent or seven per cent.

Mr. Warner: That makes just about as much sense as we can expect.

Hon. Mr. Handleman: That’s our rationale. Aside from the fact that other provinces have put in higher guidelines, Manitoba and Saskatchewan are both over eight per cent, British Columbia, which has had rent review over 3½ years now, has just recently, effective in three months from now, reduced theirs to seven per cent; seven per cent and not six per cent.

Mr. Lewis: Do you know what the vacancy rates in Victoria are now? Close to 10 per cent, with rent controls.

Hon. Mr. Handleman: I am told that the Act in British Columbia now effectively applies only to greater Vancouver and this is where it’s going to be used most of the time.

Mr. Lewis: That is right and the vacancy rates went up.

Hon. Mr. Handleman: If I can get back to the proposed Liberal amendment, by tying the guidelines to the action of the federal government over which we have no control --

Mr. Davidson: Oh, you’ve tied everything else to it.

Hon. Mr. Handleman: We haven’t tied anything to it. If members look at the bill they’ll see no reference whatsoever to the federal government or to AIB.

Mr. Nixon: You have surrendered all the wage controls to them.

Hon. Mr. Handleman: We have an expiry date of December 31, 1978. That’s been set by this government and this Legislature. It has nothing to do with the federal government.

Mr. Nixon: What a hypocrite; what a cheap comment.

Mr. S. Smith: The Treasurer loves the AIB. Why don’t you listen to him?

Hon. Mr. Handleman: I can understand the Liberal Party being willing to give the federal government the right to amend our legislation. That goes with their game.

Mr. S. Smith: Just as you gave them the right to set the wages of this province.

Hon. Mr. Handleman: There’s nothing in my legislation that says anything about the federal government.

Mr. Roy: You signed us over.

Mr. Nixon: Even the Supreme Court said you were wrong, 9-0.

Mr. Ruston: Nine-zip.

Hon. Mr. Handleman: I should point out as clearly as possible, notwithstanding all the other factors, that the effect of lowering the guideline below eight per cent can only result in higher rents in this province. I know that, again, is something that the opposition would rather gloss over. We will be seen to be the champions of the tenant.

Mr. Nixon: You are the glosser.

Hon. Mr. Handleman: Perhaps I can have a moment just to explain how that can come about, because it isn’t difficult, and I’m sure that most of the members of the opposition will be able to understand this.

At the present time, the major landlords in the province, aside from the one in my riding that the member for Ottawa Centre knows about since it’s headed up by one of his former campaign managers, aside from that one, most of the major landlords in this province have accepted eight per cent, and if a tenant wanted to appeal that he had every right to do it. Some of those tenants have, in fact, done that, but that has been the guideline accepted by major landlords. They’re not suffering under it, and I would suggest that there is no way that they would suffer under it because they have other investments and they can smooth out any problems they have.

Mr. Nixon: Oh, they are providing rental accommodation at a loss, is that what you are saying?

Hon. Mr. Handleman: However, and we’ve checked this with them, if the guideline goes to six per cent, it is a figure that they will not be able to offer voluntarily to their tenants and, if they don’t, they certainly won’t be offering eight per cent, they’ll be offering 15 or 16 per cent.

Mr. Good: Let them go to the rent review board.

Hon. Mr. Handleman: Then they’ll go to rent review and they’ll have to justify it, but the average rent increases in this province that have gone to rent review have been over 12 per cent.

Mr. Nixon: That is the way the procedure is supposed to work.

[10:00]

Hon. Mr. Handleman: I’m suggesting to you, and to the members opposite, Mr. Speaker, that if you do that the average rent increase may be 11 per cent or it may be only 10 per cent, but it’s not going to be eight per cent because they will be able to justify higher costs. If they go to the costs of going to rent review, they are going to apply for more than eight and they are going probably without prejudging --

Interjections.

Mr. Nixon: It sounds like you are inviting

Hon. Mr. Handleman: I haven’t invited them.

Interjections.

Hon. Mr. Handleman: It’s a quasi-judicial process. The rent review offices will deal with figures as they are put before them.

Mr. Lewis: That’s a terribly irresponsible invitation to increase rents all across the province.

Hon. Mr. Handleman: It is no invitation at all.

Mr. Lewis: You have invited landlords to increase rents.

Hon. Mr. Handleman: The landlords have been satisfied --

Mr. Lewis: You have no right to. It is a disgrace to the principle of this bill.

Hon. Mr. Handleman: I know the facts hurt but that is going to be the effect of this bill.

Mr. Lewis: You have invited it.

Hon. Mr. Handleman: I hope it won’t be the effect of this bill

Interjections.

Hon. Mr. Handleman: But there is no reason to believe it. Telegrams are starting to pour in now.

Interjections.

Mr. Wildman: Bring us back the member for Sault Ste. Marie (Mr. Rhodes).

Mr. Deputy Speaker: Order, please.

Interjections.

Hon. Mr. Handleman: We are talking about the major landlords. We are talking about landlords who account for up to 200,000 units in this province who have not gone to rent review.

Mr. Lewis: You urge them to go.

Hon. Mr. Handleman: I am not urging them to go. They have sent telegrams. They have given us phone calls. I would regret the fact that they may go because there are 200,000 units.

Mr. Lewis: Why do you change your tune?

Hon. Mr. Handleman: There goes the fight for credit again and the fight for credit is on.

Mr. Cassidy: Table those telegrams. Who is trying to intimidate the Legislature?

Hon. Mr. Handleman: Absolutely no --

Interjections.

Hon. Mr. Handleman: I think some of the members opposite have received some of them.

Interjections.

Hon. Mr. Handleman: I have discussed vacancy rates very briefly. There has been some suggestion that we should have this Act guided by vacancy rates in various localities.

I am sure the hon. members know that if the vacancy rate, say, in Barrie is four per cent, if we decide to free it up while the vacancy rate in Metro is two and we keep rent control here, there is a possibility that a landlord who has units in Metro might also have units in Barrie and he might be tempted to try to make up whatever he feels he is losing in Toronto.

Mr. Lewis: Another invitation to the landlords. You are just unbelievable.

Hon. Mr. Handleman: We haven’t done it. That won’t happen. That is very good of the Leader of the Opposition. It has been proposed by that side of the House, not by this side of the House.

Mr. Lewis: You are running on a platform of rent increase.

Mr. Deputy Speaker: Will the Leader of the Opposition come to order and will the minister ignore the interjections.

Interjections.

Hon. Mr. Handleman: I don’t want to belabour the vacancy rate but perhaps I might explain to some of the members of the House how those vacancy rates are obtained. First of all, they are obtained in only 22 urban centres in all of Canada, eight in Ontario. I am sorry, nine in Ontario. I want to be accurate because we should know what we are talking about here.

Mr. Wildman: What about Sault Ste. Marie?

Hon. Mr. Handleman: The vacancy rates in Ontario range from 0.2 in Thunder Bay to 3.1 per cent in some city in Ontario called Ottawa-Hull. When I tried to find for the benefit of my friend from Ottawa Centre what the vacancy rate in Ottawa was, I was told CMHC doesn’t keep those figures so you can weight that one out and that means we have eight in Ontario that have any reliability at all. They give you no vacancy rates on kinds of apartments but we know from our own figures that there is a surplus of three-bedroom apartments and a shortage of one bedroom apartments. What good a vacancy rate is in determining whether one should have or should not have rent review I really don’t know.

Mr. Ferris: Oh, be serious.

Hon. Mr. Handleman: Vacancy rates in a small locality can change dramatically from one day to another, depending on when the survey is taken.

Mr. Foulds: That’s why when you get a vacancy in Thunder Bay it goes up one per cent.

Hon. Mr. Handleman: Sure, exactly.

Mr. Wildman: My colleague says the largest vacancy rate is in your head.

Hon. Mr. Handleman: The member for Wilson Heights isn’t here. All I can say is that he mentioned the business of providing the tenants with copies and he said we should be doing it. We now have had copy machines in our rent review offices across this province for several months. They are being used by some people but not as much perhaps as people thought they might be.

Mr. Cassidy: You were so grudging with that that it hurt.

Hon. Mr. Handleman: They are not being used to the fullest possible extent but in any case they are there.

Mr. Cassidy: You turned off every tenant in the province first.

Hon. Mr. Handleman: The suggestion that they are not there indicates again a lack of knowledge about the bill. One of the members opposite -- I think it was the member for Scarborough-Ellesmere -- suggested we should put the name of the landlord in the lobby and I think that’s an excellent suggestion. In fact, it is so good we did it a year and a half ago. It is in The Landlord and Tenant Act. It has been there ever since that member has been in the House. It is a great idea.

Mr. Wildman: But most of them don’t follow it.

Hon. Mr. Handleman: We have accepted that one, so he can take that out of his list of objections. We have been told that this programme is administratively complex, and it is. There is no question about it. Rent is not a simple thing. There are a tremendous number of factors that have to be taken into account.

I’d like right now, Mr. Speaker, despite some of the criticism that we heard of the staff, to pay tribute to the staff for making this thing work despite the kinds of provocations and, to some extent, interference they have received from many members in this Legislature. I said before in these remarks that the operation of the rent review programme is quasi-judicial in nature.

Mr. Nixon: What members have interfered? That’s irresponsible.

Hon. Mr. Handleman: It should be allowed to operate without people calling the rent review officer in the middle of his deliberations.

Interjection.

Mr. Deputy Speaker: Order, please. Let’s have some order.

Hon. Mr. Handleman: I have no objection to any member of this Legislature appearing at a rent review hearing either as an observer or on behalf of the party to the hearing. But there have been cases where people have called rent review officers and rent review board members --

Mr. Renwick: I should hope not.

Hon. Mr. Handleman: -- while they’re deliberating on the evidence that has been given before them, and really I suggest that that should be allowed without pressure.

Mr. Sargent: But it’s okay for Eddie Goodman to appear.

Mr. Wildman: Name one.

Hon. Mr. Handleman: I have stayed faithfully away from those people and allowed them to do their job as they’re trained to do it, and I think that’s the way it should be.

An hon. member: Name one.

Mr. Lewis: On a point of order --

Mr. Deputy Speaker: Order, please. There is no point of order.

Mr. Deputy Speaker suspended the proceedings of the House for 10 minutes.

On resumption:

[10: 15]

Mr. Deputy Speaker: When the House was suspended for 10 minutes the hon. Leader of the Opposition seemed to be rising on a point of order. If he has a legitimate point of order, I’ll hear it.

POINT OF ORDER

Mr. Lewis: I must admit to you, Mr. Speaker, I don’t know whether it’s a point of order or a point of privilege, but the Minister of Consumer and Commercial Relations had indicated quite specifically in his remarks that members of this Legislature had interfered in the rent review process which he himself had called a quasi-judicial proceeding. It seems to me that those are very serious accusations to level at the Legislature holus-bolus, involving more than one person -- the minister said several members of the Legislature -- and I think that if the minister is going to make that kind of charge, he has an obligation to name the individuals who have allegedly interfered. I was surprised and taken aback at the way in which he put that, and that’s why I rose.

Mr. Sargent: Withdraw.

Hon. Mr. Handleman: If I have in any way impugned the integrity of any member of this Legislature, Mr. Speaker, I would like to withdraw those comments. There is no question in my mind that there have been calls from members to rent review officers during the course of their deliberations, sir; I think the time for that is at the rent review hearing or after the issuing of an order, but not before.

Mr. Deputy Speaker: Let’s make it quite clear. It is a serious allegation for any member of this House to cast aspersions on all members of the House without being more specific, and I think it’s very serious for any member to charge another member with interfering with the normal duties of civil servants in the course of their duties. So unless the minister wants to be more specific, I think he should withdraw the allegation and withdraw it unequivocally.

Hon. Mr. Handleman: I certainly don’t want to name any hon. members without naming all, Mr. Speaker; I’m not in a position to do that, so I withdraw the allegation.

Mr. Deputy Speaker: The hon. minister may proceed.

Hon. Mr. Handleman: As I was about to say before the Leader of the Opposition rose on that point of order, Mr. Speaker, I wanted to thank you very much for maintaining order during this debate. That ends my winding-up speech. I look forward to the calling of the vote.

Motion agreed to.

Ordered for committee of the whole House.

ESSEX COUNTY FRENCH-LANGUAGE SECONDARY SCHOOL ACT (CONTINUED)

Resumption of the adjourned debate on the motion for second reading of Bill 31, An Act to require the Essex County Board of Education to provide a French-Language Secondary School.

Mr. Deputy Speaker: It’s my understanding that the last speaker in the debate was the hon. member for Hamilton West. In the normal progression, if there’s any member from the Conservative Party -- I’ll recognize the hon. member for Scarborough Centre.

Mr. Drea: Thank you, Mr. Speaker. I shall be brief. I think the previous speakers --

Mr. Bounsall: Point of order, Mr. Speaker. I adjourned the debate at the close of the last hearing, but if the member for Scarborough Centre wishes to have the floor --

Mr. Deputy Speaker: In the interests of equal time it seems to me that we should rotate the speakers and the natural order of sequence would be a member of the government party. The hon. member for Scarborough Centre.

Mr. Lewis: This is a good time.

Mr. Roy: You can have a saw-off and call a member of ours.

Mr. Drea: Mr. Speaker, I rise in support of this bill. The previous speakers have been very eloquent in their support of this legislation; not only their support but indeed their personal feelings which deal upon the background of this legislation. I want to compliment my friend and colleague from Scarborough North, the hon. Minister of Education, for going into such great detail, not only about this bill but indeed about the whole history, good and bad, of the educational opportunities granted and denied to minority groups over more than a century in this province.

I would hope this bill does not result in emotional feelings because it boils down to one thing -- there is a law, the law must be obeyed.

Mr. Roy: You are wrong there. There is no law.

Mr. Drea: I find it very difficult to understand --

Mr. Nixon: There is no law yet, that’s why we are here.

Mr. Drea: There is a law.

Mr. Nixon: It is permissive.

Mr. Drea: There is a procedure by which the minority in this province has the right to obtain schooling in its own language.

Mr. Nixon: It is permissive and not obligatory. That is what is wrong with it.

Mr. Deputy Speaker: Order, please.

Mr. Drea: Mr. Speaker, I say to you, if that law is not obeyed then no one in this Legislature has the right to point the finger at some of those apparitions in Quebec who want to break the law. It is that simple.

Mr. Nixon: You are dreaming.

Mr. Roy: On a point of order, Mr. Speaker --

Mr. Deputy Speaker: There is nothing out of order.

Mr. Sargent: Yes there is.

Mr. Deputy Speaker: Order, please. Every member of this Legislature has a right to be heard. You may disagree with him --

Mr. Sargent: He can raise a point of order if he wants to.

Mr. Deputy Speaker: You may disagree with him, but he has a right to be heard. There is nothing out of order, so there is no point of order.

Mr. Sargent: Stay up on your point of order; stay up there.

Mr. Deputy Speaker: Order, please. The hon. member for Scarborough Centre may continue uninterrupted.

Mr. Sargent: State your point of order.

Interjections.

Mr. Deputy Speaker: There is nothing out of order. He has a right to be heard. He even has a right to be wrong, but he has a right to be heard.

Mr. Lewis: Frank, what word did you use? Did you say aberrations?

Mr. Drea: Apparitions, and if it offends sensitivities in here that I called Rene Levesque an apparition then so be it.

Mr. Roy: That is not the point. It is just that you are wrong on the law.

Mr. Drea: I am not wrong on the law.

Mr. Roy: Of course, you don’t know any better, that is why.

Mr. Drea: I belong to a minority group in this province --

Mr. Roy: You are not kidding.

Mr. Ruston: One of 125.

Mr. Drea: Mr. Speaker, with all due respect, I don’t think that is a remark that calls for humour.

I am a member of a minority group in this province. In the field of education, as a Roman Catholic who supports the separate schools, if it were not for the majority of people in this province obeying the law then my minority group would not have the educational system that it has today in the separate school system.

Mr. Nixon: Nobody is breaking the law.

Mr. Drea: My children would not have their educational opportunities.

Mr. Nixon: Baloney. Nobody is breaking the law.

Mr. S. Smith: What law are you talking about?

Mr. Drea: To me this is a very fundamental proposition.

Mr. Nixon: Why don’t you get it right then?

Mr. Drea: Like the member for Carleton East (Ms. Gigantes) it grieves me somewhat that the Legislature has to come to this confrontation on the issue. I would have hoped that common sense, goodwill and above all the determination in this province that the majority must not only protect the rights of the minority, it must enhance them because that is the way that the minority, and all those in the minorities that will come, blends into a very common culture and into a single province, and without that it is useless to attempt anything toward national unity. It starts at home.

I am very pleased to support this bill. I compliment the Minister of Education on his courage, his integrity and his forthrightness for bringing it before the House at this time.

Mr. Nixon: Of course, you are trying to get into the cabinet.

Mr. Bounsall: I also rise in support of Bill 31. My mind, intellect and sense of justice and fairness are totally committed to the establishment of this French-language secondary school for Windsor and Essex county. I rejoice with the francophones as they near the end of their eight-year torturous struggle but my heart as well o’erflows with sorrow and dismay that there should ever have been required to come before this Legislature a bill so tragically entitled An Act to require the Essex County Board of Education to provide a French-Language Secondary School, a title that would cause, I would think, even the most casual visitor in the gallery today to think, “My God, what must have been going on in Essex county? What must be the history of anger and hatred and heartache and lack of interhuman understanding and tolerance that this would -- ”

Interjection.

Mr. Bounsall: “ -- require a bill like this to be debated here?”

I commend the Minister of Education for his opening address when he outlined so thoroughly and accurately, step by step, the history from 1969 to the present day that so clearly indicated why it is so imperative for us, the members of this Legislature, to support the principle of this bill, the provision of a French-language secondary school for the students of Windsor and Essex county.

The wording of the clauses of this bill is stark and uncompromising, brutal almost, but necessary, and leave no doubt as to what our intentions are: “On the day this Act comes into force, the board is deemed to have passed a resolution to construct a building ... ” It further leaves no doubt that it is to be a new school with the words “within 30 days ... the board shall ... select a site ... that is not ... the location of an existing school.” The minister has now so belatedly -- and lamentably, I am sure -- judged the depth of feeling and emotions in Essex county for it pounds yet further forward: “Where ... the board fails to take the action ... the minister may thereupon cause all such things to be done as are necessary to construct the school.”

Mr. Speaker: If I may inquire, has the hon. member further remarks to make? If so, he might adjourn the debate.

Mr. Bounsall: Yes, Mr. Speaker, I do. I will continue at the next time with the remarks dealing with -- rather than having such a stark and uncompromising a bill as we have before us -- the alternative which we would have preferred to have seen.

Mr. Bounsall moved the adjournment of the debate.

Motion agreed to.

Mr. Speaker: In accordance with our announcement this afternoon and in conformance with standing order 28(a) I deem a motion to adjourn to have been made, and will call the order of business as announced earlier.

As announced earlier this afternoon, in accordance with standing order 27(g) and provisional standing order 4, due notice was given on two counts of matters to be debated at the close of this evening’s session.

I call upon first of all the member for Brantford who has announced that he was dissatisfied with the answer given by the Minister of Revenue (Mrs. Scrivener). The hon. member for Brantford has five minutes.

[10:30]

LAND SPECULATION TAX EXEMPTION

Mr. Makarchuk: On April 4, 1975 Lynden Hill Farms sold 197,491 acres of land to Lenendorff Services. The sale price was $20,254 per acre and the total sale price was $4 million. The property was purchased and owned by Maxwell J. Webster, a name that is not unknown in Ontario racing circles, or for that matter, in the Tory party. He bought it in May 1972 for $120,000, approximately $1,200 per acre.

Unlike the Ronto situation, there is no argument as to whether the property was owned before or after April 9, 1974, the date that the speculation tax came into effect. What is of concern in this case is did Lynden Hill Farms pay tax, or did they not pay the speculation tax?

Despite questions in the House and on the order paper, the minister is evasive and refuses to answer. In fact, I get the impression -- and this is shared by others -- that the government is trying to stonewall all inquiries into exemptions granted under the land speculation tax.

Mr. Shore: You’ve got to be out of your mind.

Mr. Grossman: So, what else is new?

Mr. Makarchuk: It is important to know if this tax was paid, because if Lynden Hill Farms paid tax, then the question arises -- why wasn’t tax levied against Ronto?

Also of concern is the amount of tax, if any; was it collected and on what basis? The minister should realize that the property appreciated in value because the land was officially annexed by the city of Brantford in October 1974, although the OMB approval was given on July 4, 1974. I should again point out that the sale was in 1975.

The minister should also be aware that the annexation occurred after April 9, 1974, and the tax should have been assessed on the fair market value of the property as of that date. Assuming that the ministry officials did their own audit and did not blindly accept the submission of some lawyers, they will probably find out that at that time in that area, land was being sold between $6,000 and $10,000 an acre on valuation day. Therefore, it is conceivable that Lynden Hill Farms could owe the province close to $4 million in speculation tax. The exemption to Ronto was $2 million. To this company it’s $400,000. A total of $2.4 million. At this time, the city of Brantford has requested the province to fulfil its legislative commitments and pay 15 per cent, or approximately $1.5 million, as its share of the cost to the expansion to the sewage treatment plant. Of course, the city was told that no funding is available, we have restraints, et cetera. It makes you wonder just what the hell is going on in the province.

Interjections.

Mr. Speaker: Order please. Will the hon. member keep his language more parliamentary?

Mr. Makarchuk: It makes you wonder just what’s going on in the province. But you find that Tory friends can make $14 million and get away with it; yet the taxpayers in Brantford are supposed to pick up the bill for the sewage treatment plant -- the $1.5 million which the province refuses to collect and the province refuses to pay.

Mr. Grossman: Garbage.

Mr. Makarchuk: I should also like to point out to the Treasurer sitting over there that we have a $15 million capital debt. With the sewage treatment plant, that capital debt will be increased by $9 million or $23 million in total in a one-year increase; that’s more than 50 per cent.

I question the minister as to just exactly what’s going on, whether she has one law for the rich and one law for everybody else. That’s the only way I can describe it.

If the Minister of Revenue cannot provide answers regarding the taxes on this matter, then I feel that this should be brought to the attention of the public accounts committee for investigation. There is no way this Parliament or this province can or should tolerate a government that is horribly biased and irresponsible in the way the laws of the province are applied.

Interjections.

Mr. Speaker: The hon. minister, if she wishes, has five minutes.

An hon. member: She doesn’t know anything.

Hon. Mrs. Scrivener: On April 4, the member for Brantford tabled a question concerning the supposed exemption of Lynden Hill Farms from land speculation tax; on the sale of certain lands in Brantford. And on April 18, I answered that question fully, by informing the member that while a lien clearance was given, Lynden Hall Farms Limited remained liable for land speculation tax. Frankly, I regret his allegations. However, his remarks this afternoon and again this evening -- and his innuendo -- indicate that he remains confused -- that’s the kindest word. I welcome the opportunity to clarify this matter once and for all.

Mr. Swart: About time.

Hon. Mrs. Scrivener: The member’s misunderstanding of this matter centres on two points: first, that the granting of a lien clearance on the sale constitutes an exemption to Lynden Hill Farms from land speculation tax; and, second, that no tax has yet been paid. As I clearly stated in my answer given on April 18, the lien clearance is not an exemption from tax and Lynden Hill Farms remains liable for any tax payable.

Mr. Nixon: Why don’t they pay it from profits?

Hon. Mr. Rhodes: Obstruction.

Interjections.

Mr. Speaker: Order, please.

Hon. Mrs. Scrivener: For the benefit of the members I shall now elaborate on my answers by explaining the details of how the land speculation tax applies to this case.

In 1975, Lynden Hill Farms sold the property in question for $4 million, as the member has described. The application of the Act requires the determination of the fair market value of the land as of April 9, 1974, in order to determine whether there is a taxable gain. It is Lynden Hill Farms’ position that there was no taxable gain during this 11-month period, that is, from April, 1974 to March, 1975.

Mr. Makarchuk: That’s nonsense.

Mr. Nixon: Boy, if you buy that!

Hon. Mrs. Scrivener: My ministry, however, has questioned the valuation declared by the corporation. Real estate valuation is an extremely complicated matter involving conflicting professional opinions. Also, it is necessary to determine an accurate and defensible value for the ministry in negotiations and possibly in court actions.

Mr. Nixon: You accepted one opinion on Ronto.

Hon. Mrs. Scrivener: Inevitably, this is a time-consuming process and it is quite common for tax assessments involving real estate to take several years. For these reasons, the question of whether Lynden Hill’s sale is taxable remains open.

Meanwhile, the government’s position is protected in two ways. First, I would point out that giving a lien clearance for speculation tax purposes is a routine matter. It allows the transaction to go forward and gives the purchaser a clear title to the property. However, I would stress that it does not absolve the vendor from any tax liability that may eventually be established. Taxes assessed against the vendor are a debt due to the Crown and will be collected.

Mr. Nixon: But you don’t have a lien on it.

Hon. Mrs. Scrivener: Since Lynden Hill Farms Limited is a corporation, its assets are subject to a statutory lien under The Corporations Tax Act.

Mr. Shore: There it is. Listen.

Hon. Mrs. Scrivener: Therefore, any disposal of property by the corporation requires a lien clearance from my ministry under that Act.

Mr. Shore: Right on.

Hon. Mrs. Scrivener: Second, the Crown’s financial interest is protected, because when the issue is finally resolved and taxes found to be payable, it will be assessed and will bear interest at nine per cent from the time it should have been paid, that is, 90 days after the sale closed in 1975.

Mr. Nixon: Unless you give Webster an order in council as you did Ronto.

Mr. Speaker: Order.

Hon. Mrs. Scrivener: Thus, Mr. Speaker, as you can see, the Crown is properly secured. In closing, I wish to assure all members that my ministry --

Mr. Sargent: Go and tell it to Eddie Goodman.

Mr. Speaker: Order, please.

Hon. Mrs. Scrivener: -- is continuing to review this matter to protect the Crown’s interest.

Mr. Sargent: He is looking after us there.

Hon. Mrs. Scrivener: In particular, we were in contact with the solicitors for Lynden Hill Farms as recently as April 12 last.

Mr. Nixon: Who was that?

Hon. Mrs. Scrivener: Since our negotiations are still in progress, it is not in the best interests of the Crown to refer this matter to the public accounts committee as was suggested earlier this day.

Mr. Sargent: How are you going to stop it?

Hon. Mrs. Scrivener: This would delay and could prejudice our negotiations as well as unfairly implying that Lynden Hill Farms is improperly evading the payment of tax.

Mr. Speaker: Now the hon. member for Carleton East.

Mr. Warner: You should resign.

Mr. Shore: You probably don’t understand

Mr. Speaker: Order, please.

The hon. member for Carleton East now has five minutes to explain her objection.

WOMEN IN LABOUR FORGE

Ms. Gigantes: A week ago tonight the Treasurer of Ontario presented the budget of the government for 1977. Among the other questionable elements of that budget was a new description of the Ontario labour force. In budget paper A, section 1, the labour force is divided into two main groups: the primary labour force and the secondary labour force. The primary labour force is defined as including males 25 to 54 years of age. The secondary labour force is defined as everyone else.

Last Thursday I asked the Treasurer if he could provide a rationale for counting all women as part of the secondary labour force. The Treasurer responded as follows: “I can’t recall off the top of my head. I’ll get the answer for the member.”

That was five days ago, Mr. Speaker. In question period today, I asked the Treasurer if he had managed yet to come up with the rationale for counting all women as part of the secondary labour force in Ontario. He replied, “I undertook to get an answer to that question. I haven’t and I will.”

I find that an unsatisfactory response. If the Treasurer of Ontario can’t explain one of the chief analytic definitions of his budget, given five clear days to reflect on the subject, then something is wrong. And I think I know what is wrong.

Let me suggest that the definitions “primary labour force” and “secondary labour force” are not helpful analytic definitions. Anything but. Instead, they serve only to muddle the mind and obscure the truth. The truth is that the so-called primary labour force has a higher level of employment than other groups. And the so-called secondary labour force is experiencing a low level of employment. The implication of this definition and the way it is used in the budget is that if you belong to a group that has low employment, you are counted as part of the secondary labour force. It is somehow of secondary importance economically and socially if you are out of work.

This is not an acceptable analysis. It is not okay for males aged 15 to 24 to suffer high unemployment. It is not okay for males aged 55 and over to suffer high unemployment. And it is not okay for all women over 15 years of age to suffer high unemployment. The people in these groups are not second rate, either as citizens or as members of the labour force.

The really miserable thing about the Treasurer’s definition, the thing that is most discouraging to me as a member of the group called “women over 15 years of age” is that by definition we will always be counted as members of the secondary labour force. We can’t have the hope of growing up to join the primary labour force and we will never have the satisfaction of having been in the primary labour force. We can’t make it, by definition. It is somehow assumed that we all have daddies or husbands or children to provide us with primary income.

This is true of some women at some times in their lives, but it is not true of most women all their lives. Most women at some time in their lives need jobs. They need jobs because they are single and self-supporting, or they need jobs because they are married and their families need two incomes, or they need jobs because they are single heads of families and are desperate for family income.

If we are to be considered part of the secondary labour force all our lives, then I would suggest that males aged 25 to 54 years who have private sources of income should be disqualified from the primary labour force. The definition of secondary labour force should be extended to its logical conclusion. Males aged 25 to 54 with a private source of income should join the category of the secondary labour force. I’d like to nominate the first person eligible for redefinition, Mr. Speaker. The Treasurer of Ontario. If he’d move on over there’d be one more job available for the rest of us secondary labour force types.

Mr. Speaker: The hon. Treasurer has five minutes, if he wishes to respond.

[10:45]

Hon. Mr. McKeough: In the discipline of labour economics, as in so many areas of this field, the terminology is traditional. The term “prime-age labour” was developed to describe men 25 to 50 years of age who are the principal breadwinners and sources of support to their families. Obviously, the opportunities for women to work have expanded rapidly in the last 20 years and more and more of the women in the work force are the sole source of support of themselves and their families. However, I think it is fair to say that the terminology of economics has not kept pace with this development. I have no doubt --

Interjections.

Mr. Speaker: Order, please. Order.

Hon. Mr. McKeough: I have no doubt that the terminology of primary and secondary labour force will gradually drop from usage and --

Interjections.

Mr. Speaker: Order, please. Full attention was given to the member for Carleton East. We expect the same courtesy --

Hon. Mr. McKeough: -- and we will come to describe labour force groups more explicitly by age and sex.

Mr. Lewis: You put out the paper which discriminates on that basis --

Mr. Speaker: Order, please. I declare the motion to adjourn --

Mr. Lewis: You are a hoax. You are a secondary hoax.

Mr. Speaker: Will the hon. Leader of the Opposition please restrain himself.

I deem the motion to adjourn to have been carried.

The House adjourned at 10:47 p.m.