Legislative Assembly of Ontario

The House resumed at 8 p.m.

STANDING RESOURCES DEVELOPMENT COMMITTEE (CONCLUDED)

Resumption of the adjourned debate on the motion for adoption of the report of the standing resources development committee on the Pickering B generating station steam generators supplied to Ontario Hydro by Babcock and Wilcox (Canada) Limited and the addendum thereto.

Mr. Villeneuve: Mr. Speaker, it is a privilege for me to review with the members of this House the report of the standing resources development committee on Ontario Hydro Pickering B steam generators.

Members will recall that the committee’s principal concern over the past few months has been the settlement of issues arising from defects in 37 boilers at the Pickering B nuclear station. It was discovered that there were defects or flaws in the boilers, which in fact meant that they had to be replaced at the expense of Ontario Hydro, and therefore to the consumers of Ontario, or the manufacturer, Babcock and Wilcox of Cambridge, Ontario.

The steam generators are a major component of a nuclear generating station. These boilers are some 48 feet in length, weigh 100 tons, and have 2,600 half-inch tubes within. The report contains a detailed description of these generators and their operation. It also gives details about what went wrong.

Basically, three factors led to the damage to the boilers. The first was the use of component metals with what turned out to be incompatible heat expansion factors. The second factor was certain design modifications in the support brackets. The third factor that gave rise to this unfortunate situation was the type of heat treatment process used by Babcock and Wilcox in manufacturing the boilers.

I would like to take this opportunity to thank each and every member who served on the committee. I was very impressed by the extent to which members were able to rise above partisan concerns. After a thorough examination of the complicated situation members were able to reach fairly swift agreement on what I consider to be a good set of recommendations.

Our first task was to sort out and define the issues we had to deal with. With the very capable help of committee counsel, we were able to sort out an agenda of 35 questions in 10 categories. These ranged from concerns about the cost and responsibility for it, to questions of a more general nature on public safety and the public interest. The list of these questions forms the introduction to our report.

We proceeded to seek answers to all these concerns. We heard evidence from some 24 witnesses and we reviewed a wide, range of relevant documentation. In most respects, we were fortunate to have excellent cooperation from those whose knowledge and views we sought. We experienced some delay in one area. We had to wait for information regarding out-of-province contract settlements which were under way as we met. These concerned Hydro Quebec nuclear facilities and also a Candu facility in Argentina where similar problems had occurred but are now settled.

The committee found a number of possible errors in judgement in the procurement procedure. We discuss this in the report. We agreed that the long-range benefits of competitive tendering outweigh any short-range benefits which may flow from the negotiation process within a repeat concept. In other words, we feel that each new project ought to be tendered on its own. We recommend in the report that, “competitive tendering ought not to be replaced with negotiation except perhaps in the most unusual circumstances.” We further recommend that Hydro conduct its business affairs such that more than one supplier is available to tender competitively.”

I don’t want to take the time of the House by going over the report’s recommendations in detail, but it might be worth while to highlight certain convictions on the part of the committee. We all feel that a basic reason for this problematic situation was that Ontario Hydro placed too great a dependence on a single supplier, a situation which we feel should not arise again.

There are, I know, good reasons for this decision, but committee members seriously questioned the overall judgement of Hydro management in allowing such a dependence to form. Negotiations for the financial settlement were going on as the committee met and formed an important part of our program for consideration. Babcock and Wilcox eventually advanced a proposition which ultimately formed the basis for settlement.

I must commend the work of committee counsel, Mr. Barry Wortzman and his assistant. They worked very diligently at reviewing great quantities of information on the financial and other aspects of the deal. Also, they very competently screened information on the confidential material for the committee’s consideration.

In general, I think I speak for all or most of the members of the committee when I say that, all in all, the matter has been settled in a responsible and generally satisfactory manner.

In our report we quite clearly discuss some management decisions and policies in effect that Ontario Hydro and other firms involve, which we feel are to some degree questionable from the point of view of the public we serve, but overall I do not wish to give the impression we consider Hydro management or engineering staff to be incompetent or irresponsible.

There is one area, I though, which I do want to bring to the attention of the House. That is the matter of the quantity and quality of information that Ontario Hydro has been in the habit of giving to the Minister of Energy and officials of his ministry as it relates to the Pickering B problem.

Ontario Hydro is part of this government. It is not a satisfactory situation in any way that this whole matter had to come to light by means of a news report that was leaked to the press. This is profoundly disturbing. It was only last March when Hydro officials realized that the Pickering B problem was about to become public knowledge that they initiated action to give the minister and his staff the required information.

The mechanisms within Hydro for provision of information to the minister and his staff must be improved. This means, too, that the information given by Hydro’s technical staff to its corporate relations branch must be accurate and complete. The report contains a number of recommendations in this area.

At the moment the settlement between Hydro and Babcock and Wilcox is finalized. I have received confirmation also that the settlement with Quebec Hydro and Argentina has been finalized.

Thank you, Mr. Speaker.

Mr. Bradley: Mr. Speaker, back in the late spring and early summer of this year, members of the official opposition, 20 in number, followed the procedure which enabled this item to be referred to the resources development committee for its consideration and for investigation. Subsequently a counsel was hired to assist members of the committee to deal with what we felt at the time was an extremely important matter, a matter of great financial consequence to Hydro customers, those who pay its rates in the province of Ontario.

We encountered at the very beginning some initial resistance. However, when members of the committee recognized there was a determination on the part of the majority of the members of the committee to deal with this matter, and when members of the committee recognized its importance, not only in terms of assessing the past but of looking at the potential action that would take place in the future on the part of Ontario Hydro and on the part of the government and this Legislature as it relates to Ontario Hydro, there was an acquiescence to having this matter dealt with, and dealt with in a very meaningful and thorough way by the committee.

We looked at various aspects of the problem and brought before us various witnesses. One of the initial conclusions, which I think we came to rather unanimously, was the fact that those who pay Hydro rates in Ontario needn’t have been put to the expense to which they are going to be if officials of Ontario Hydro, in conjunction with the officials of Babcock and Wilcox (Canada) Limited, had come to the conclusion as early as November, 1977 that a problem existed with the post-weld heat treatment process. If it had been concluded this was the main problem, and if officials were willing to consider that seriously as being the problem, Ontario Hydro customers would not have been put to the expense they were.

[8:15]

As we know from the subsequent deal that was signed between Babcock and Wilcox and Ontario Hydro, $10 million in direct costs will be assumed by Ontario Hydro. There was justification made for that in various ways, and I won’t go into the details, but what it really amounted to was justification for bailing out B and W on this. Few people would contradict that, I think; they just put statements beside numbers and justified it in that way.

We also recognize that as a consequence of these boilers not being in operation, and therefore the Pickering B nuclear plant not being in operation, that some $351 million of consequential loss will be accepted and paid for by the Hydro customers in the province of Ontario. This, of course, is a matter which we in the official opposition feel is catastrophic, a term which was used on one or two occasions. I am sure this view is shared by many on the government side.

Out of this came some pretty reasonable recommendations, and most of those recommendations were accepted unanimously by members of the committee, albeit after some considerable debate.

While I am on my feet, I should commend as well one particular member who I think faced a difficult time, and that is, the former Minister of Energy (Mr. J. A. Taylor), who sat on the committee and brought to it a good deal of expertise. I thought he was rather frank in his assessment of the problem, and rather penetrating in his questioning, being one who has had the experience of having to deal with Ontario Hydro and answer in this House for the transgressions or otherwise of that utility.

It is obvious by now, and it did not happen in three major cases, that competitive tendering has been seen now as the best possible method of proceeding when dealing with contracts of this kind. Members of the House will recall that in the case of the Bruce A nuclear generating station, and subsequently we get into Bruce B, but in the Bruce A case there was competitive tendering. The lowest tender was not accepted, even though recommended by the Hydro board and by AECL, Instead, the tender of Babcock and Wilcox was accepted, though it was not the lowest. This was the first step in not accepting lowest tenders.

In the case of the Bruce B plant and the Pickering B plant, it was determined by Hydro officials that it would be best to negotiate this contract with Babcock and Wilcox because they were dealing essentially with what was a duplicate plant. I think most members of the committee recognize that with the advancement in technology in a period of 10 years, it was difficult to countenance that you could have a duplicate of one plant 10 years after the other plant had been built. Therefore, members of the committee rejected this as being a reasonable way of proceeding, that is by the negotiated contract.

Certainly those around the province of Ontario involved with competing companies would feel left out of the process because, indeed, on a public tender they would have had the opportunity to compete for contracts in multi-million dollar categories. They were prevented from doing so because of the negotiation process in two cases, and because of the fact the lowest tender was not accepted in the other case.

The recommendation that attracted many members of the committee stated that, “Relative to the procurement of major equipment Hydro should employ competitive tendering except perhaps in the most unusual circumstances,” and we considered those not to be unusual circumstances; further that, “Hydro should conduct its business affairs such that more than one supplier is available to tender competitively; and (iii) at the very least, Hydro should require such suppliers to provide a performance bond.”

I know other members of the committee will no doubt want to address themselves to the latter point, because a performance bond was not required in the case of the Pickering B plant, although Hydro Quebec did ask for and receive a performance bond in the case of Gentilly.

A second recommendation which was particularly attractive to members of the committee stated, “Hydro never again expose itself to the substantial risks and potentially harmful repercussions flowing from an unhealthy and unwise dependence upon one supplier.”

It would be difficult to conclude anything other than the fact one supplier was treated with a good deal of favouritism by Ontario Hydro. Whether that was because, as some stated, it was necessary to keep at least one supplier afloat and therefore it was necessary to assign to that supplier the lion’s share, or indeed almost all of the contracts, whether that was justification or not most would conclude indeed it was not and that it is something that should not be repeated.

Some concern has been expressed about one of the other recommendations which said that prior to the award of contracts for procurement of major equipment, senior Hydro management should fully inform the Minister of Energy of all particulars relating thereto. In the fourth was that, “Prior to the establishment of any policy formulation which is expected to involve substantial expenditure of public funds or which otherwise is expected to significantly impact the public, senior Hydro management should fully inform the Minister of Energy of all particulars relating thereto.”

Obviously it was the feeling of the majority of the members of the committee, that Ontario Hydro in effect was out of control and might still be considered to be out of control in terms of the kind of authority this Legislature should have over its affairs. Indeed, as the chairman of the committee has stated, a good deal of concern was expressed over the fact the Minister of Energy was not informed, as he should have been, of all of the things going on, and therefore he was unable to put a stop to some of the practices members of the committee thought should have been halted in their tracks.

Another matter we considered very seriously was the subsidization of any supplier. Again it was the conclusion of the members of the committee that it is not the responsibility of the Hydro rate-payers and the taxpayers of the province of Ontario to keep a particular company afloat, in this case Babcock and Wilcox (Canada) Limited.

Some of course argued very strongly against a crown corporation, because they feel government should be kept out of matters of this kind. Yet, in effect, Babcock and Wilcox was a company which enjoyed all the advantages of being a crown corporation without having government ownership at the same time.

Mr. M. Davidson: You are reaching for that one.

Mr. Bradley: The fact the final deal struck between Ontario Hydro and Babcock and Wilcox provided them with such favourable terms, including the provision for having Babcock and Wilcox (US) provide the tubing -- over $20 million worth of tubing, I believe, even though they hadn’t provided this kind of tubing before; and even though there is a Canadian competitor, Noranda, which could provide that tubing -- that certainly indicates once again that Hydro, in this case probably out of necessity, was in the position of showing considerable benevolence towards Babcock and Wilcox.

We’ve reached a stage in the province of Ontario where there is an extremely unhealthy dependence on this one particular company and that dependence has been brought about because of the policies of Ontario Hydro. When I look at some of the recommendations made to Ontario Hydro, I go first of all back to the Bruce A situation, where in the report it tells us both AECL and Hydro staff recommended to the Hydro commission, as it was then known, that the contract be awarded to MLW on the twofold premise that it had the lowest tendered price as well as the lowest evaluate price, arid that its anticipated performance would be superior to that of B and W. There was a report by AECL on B and W, and this was provided to the staff of Ontario Hydro on January 30, 1970. It says the following:

“Power projects have recommended supply by B and W of three important reactor components and a large number of less significant components; the Gentilly steam drums, the Pickering boilers, the reactor headers for Pickering 3 and 4. All of these three orders have come upon significant difficulty. Delivery has been late, quality has been questioned and the engineering effort to assure design adequacy and to expedite production has been substantial.

“B and W display an attitude of indifference to the customer’s preference which is not in keeping with their own performance, in our experience, Throughout our dealings with them, truculence and intransigence are the rule.

“The promise and the hope, in dealing with B and W, is that their production and quality control methods, supposedly sharpened and refined by extensive US nuclear experience, would yield excellent design and prompt delivery. That is not true. Whatever B and W in Gait have received from B and W in the US, expertise and management is not notably present. In the field of technical assistance also it is surprising that the Canadian operation works largely without assistance from or reference to US technology. In the area of welding, wherein B and W in the US have some of the finest facilities and the broadest experience available anywhere, B and W in Galt get into serious trouble again and again and in every case they seem to have to get themselves out of it -- at considerable cost in time.”

The committee goes on to conclude that: “The AECL comments were tragically prophetic of what in fact occurred subsequently with respect to Pickering B; further, AECL did note in its report that, “We see no disadvantage to MLW in the areas of management competence and technical expertise.”

Now, included in the report dealing with the whole matter of tendering, once again in the middle of the report, it states that the report, “further recommends that Hydro conduct its business affairs such that more than one supplier is available to tender competitively.” This is all flowing out of the reports and the experiences that have been had by the Ontario Hydro in its dealing with B and W. that one.

Further to that, we find out that B and W -- and because the information was given in camera we are not in a position of quoting precise figures -- but “the anticipated gross profit margin on Pickering B, of B and W, was significantly greater that its anticipated gross profit margin in Gentilly 2.

“Furthermore, B and W’s anticipated gross profit margin on tendered Hydro steam generator contracts were significantly less than its anticipated gross profit margins on negotiated Hydro steam generator contracts,” which gives us an idea, even though there was some confusing evidence presented to the committee, that their anticipated profits are always higher when they don’t have to subject themselves to competitive tendering. Of course, we know once again that they had that particular favoured position in terms of getting the contracts.

Further in the report, it goes on to say that: “B and W’s failure to draw upon its US parent’s expertise is to be condemned, a concern noted earlier by AECL when it recommended that the Bruce A steam generator contract be awarded to MLW and not to B and W. Another Canadian steam generator manufacturer appears to have successfully employed a full-vessel circulating gas heat treatment process on the AECL Korean project; and yet another Canadian steam generator manufacturer testified that it has been his policy not to perform full-vessel heat treatment since approximately 1970.”

[8:30]

Despite this fact, despite the fact that it has not what one would call a glowing record in terms of its past performance, despite the fact that it will have to carry out a tremendous number of repairs, not only here in the province of Ontario but also in New Brunswick, Quebec and in Argentina; and despite the fact that its financial position is obviously going to be adversely affected by the fact that it has had to sign an agreement with Ontario Hydro and AECL and Hydro Quebec for fixing the boilers that I have mentioned in Ontario and in other jurisdictions, we have a situation now where in the Darlington contract, which was by public tender, Babcock and Wilcox (Canada) Limited, is going to be allowed to proceed with that contract.

This leads some to believe that this might have been a silent part of the deal. We have, I guess, a written part of the deal between Ontario Hydro and Babcock and Wilcox, but one could draw the conclusion, particularly when one looks on page 28 of the report, when the president of B and W (US), who is also the vice-chairman of J. Ray McDermott Incorporated, is recorded as having stated, “he was concerned that B and W (Canada) Limited might be blackballed by Hydro.”

How would one assure the president of B and W (US) that it would not be blackballed? One could do it, of course, by assuring that the Darlington contract would remain in the hands of B and W, regardless of what has transpired. Therefore, there is a great concern about that.

In light of these things and in light of the statement that it is obvious that the problems we have had are the result of Ontario Hydro’s “unhealthy and unwise dependence upon one supplier,” a circumstance which the committee recommends ought never to occur again; despite all of these facts, we face a situation now where this one company, which has not proven to be as reliable as most in this province would have hoped, is going to be once again given a contract.

We in the official opposition are very concerned about this, We think the circumstances have changed. We think the record as it stands with Babcock and Wilcox at the present time is such that a new look is required in terms of the Darlington contract. Therefore, I am going to propose an amendment to the motion.

Mr. Deputy Speaker: Mr. Bradley moves that the following words be added to the motion to adopt the report of the standing resources development committee:

“And, further, the legislative assembly recommends, in light of Babcock and Wilcox (Canada) Limited’s poor performance in respect of the boiler supply to the Picketing B and Bruce A generating stations, that Hydro’s contract with Babcock and Wilcox for the supply of boilers to the Darlington generating station be reopened with a view to implementing forthwith recommendation B of the committee’s first report, namely, that Hydro should never again expose itself and the public of Ontario to the substantial risks and potentially harmful repercussions flowing from an unhealthy and unwise dependence upon one supplier.”

Mr. Bradley: Mr. Speaker, I’ve outlined in some detail the concern of members of the official opposition about this particular contract and about the fact that the company which has already experienced a lot of difficulties is going to receive this contract unless tendering is reopened.

The committee looked as well at the fact that when it came down to making a deal between Ontario Hydro and Babcock and Wilcox (Canada) Limited, Ontario Hydro was so committed to this particular company it had to submit to a kind of blackmail perpetrated by negotiators for this company.

In other words, when Ontario Hydro suggested that B and W was totally responsible for the problems that existed and should be totally responsible for the repairs, the reply was that if B and W was forced to assume that kind of responsibility -- first of all they denied it -- it would close the doors of its Canadian plant. We have this threat being used against Ontario Hydro, so that not only because of one repair project at Pickering B but because of other outstanding contracts, in terms of I think, $200 million and other very essential and crucial contracts in terms of $100 million, Ontario Hydro could say little other than “uncle” when forced to the floor by the negotiators for B and W.

Therefore, we see this extremely unhealthy dependence showing up, in that not only are they the only company supposedly that was able to carry out the repairs in the first place, but secondly when they got into trouble they were almost able to dictate their own terms of settlement, As I have pointed out to members of the House those included not only the $10 million, which I call a gift, that Ontario Hydro in effect provided for assisting in the repair of the boilers, but also the $350 million in additional consequential costs that Ontario Hydro and its customers in Ontario assumed, as well as that rather lucrative contract for tubing. Right along the line we noted that one company has been kept in business and that other suppliers, not only in the province of Ontario but also outside, have been prevented from being involved in the competitive tendering process and therefore from participating in what we consider to be the democratic process in the province of Ontario, particularly in light of the fact that two other companies located in Ontario have indicated they’re able to carry out this kind of work.

Mr. Speaker, it was only after a good deal of thought and consideration this amendment was put to the House. We hope that all members of the House will recognize that, because of the past record it would be wise to reopen the tendering process. This does not preclude, of course, B and W from tendering, but it does allow for tendering in light of 1979 or early 1980 circumstances as opposed to those which existed back at the time of the original tender.

Other members of this party will be speaking on other aspects of this report, which we feel is an excellent one and which I was pleased to see was endorsed unanimously by all members of that committee.

Mr. Makarchuk: Mr. Speaker, I think after all that has been said and done in the committee, we have to bring this back into perspective in terms of how it all started or where the problem developed.

It all really started, one could say, with a sense of corporate greed. The company decided that by changing the heat treatment process from what was specified by Hydro it would manage to save something like $40,000. Members must understand the total contract was at the unescalated price at that time of something like $25 million. The price now is roughly $60 million, so $40,000 is very small peanuts indeed.

The company decided to go along with that and Hydro agreed to it, which brings into question the whole supervisory capacity of Hydro. For the information of the House, I will explain what in effect the company intended to do. Ordinarily the tubing could have been treated individually. Where the tubes are bent and the bent areas are heated, the stress will be relieved in the bends. The tubes will be installed and there will be no problem.

However, in order to make the extra $40,000, Babcock and Wilcox decided to heat treat the tubing in the shell completely. As a result of that the problems developed.

It should also be noted that the problems developed because of different coefficients of expansion in the various metals used in the boilers. There is Inconel or Monel metal for the tubing, and ordinary plain carbon steel for the shell and for the broach plates supporting the tubing. Naturally, these metals expand at different rates.

The whole matter of heated metal expansion does not involve new technology; it is very simple technology. It is something any person who takes a welding course discovers, that he should take into account the fact that metals expand and move at different rates when they’re heated. As a result, one has to be careful how one handles the metals.

Certain procedures have to be taken into consideration to ensure there will be no problems. In this case it boggles the mind. There was the engineering staff of Hydro, the engineering staff of Babcock and Wilcox of Canada, and the parent corporation in the United States, which we presume has hundreds of engineers. Yet nobody in all that time during the process of heat treatment took into consideration the fact that when the heat treatment was applied to the boilers there would be a difference in expansion rates which could harm the tubing. That’s exactly what happened.

As was pointed out earlier, the parent firm in the United States had a considerable amount of experience in the area of building boilers. We would assume if the firm in Canada does not have the technology it will go to the parent firm. That is one of the advantages of a multinational, that it can draw on the technology; but in this ease the Canadian company didn’t even consult with the parent firm. Hydro on its part had similar problems with Pickering A when heat treatment was involved with the boilers there. Despite the fact there were problems with Pickering A, Hydro readily agreed to go ahead with the new heat treatment process on Pickering B. To me that is just plain irresponsible, that’s all it is, on the part of Hydro. After it had gone through an experience and knows this problem has happened before, it goes ahead and allows the company to do the process again. All, I may add, for a matter of $40,000, on something that right now could add up to about $1.4 billion.

It should also be noted, as was pointed out earlier by the member for St. Catharines (Mr. Bradley), Hydro prides itself on making good deals, getting proper costs and ensuring the consumers of Ontario are getting value for their money. Hydro Quebec was able to get a better deal on their boilers, on Gentilly 2 boilers, than what Hydro got from Babcock and Wilcox here in Ontario when they negotiated the contracts with that company.

[8:45]

Again it makes one wonder in whose interests does Ontario Hydro operate that they permit themselves to be conned, to be sucked in or whatever term you want to use, by a firm that has shown some sense of irresponsibility itself.

During the construction of the boilers, certain tests were done on the tubes. Some of the tubes had leaks in them and they decided to start testing them. They were using a method called an eddy current test, which consists of putting a probe to the tube and passing electromagnetic currents through and watching the results to see what kind of response they get, what echo comes out of the tubing. If the tubing is thinner or thicker in certain places or there are bumps, the electronic echo is different.

In the Pickering B situation, Hydro started testing the boilers. They found out there seemed to be problems, so they entered into negotiations with the company. The company said there was something the matter with Hydro’s equipment. Hydro did not pursue this to any great extent. They felt there was a problem.

They packed their crew up, the crew that was testing the boilers at Cambridge; they took them away from there and hauled them off to Bruce to do some testing up there. In the meantime, the company, Babcock and Wilcox, continued to build boilers, continued to heat treat them in the same way, despite the fact that Hydro all along had very good suspicions that something was wrong; that something was not done properly and that possibly there were technical faults with the boilers. Nothing was done and the company continued to build the boilers. The crews that were supposed to be testing them were somewhere else.

In terms of Hydro’s responsibility, they did not ensure an adequate supply of trained personnel with the proper equipment, to provide the necessary testing, Again, I’m not sure whether this was a matter of economy, but certainly in this case it is indicated that a matter of hiring four more people with equipment would not have been, probably, more than $100,000 a year or slightly more. For that amount of money we end up paying considerably more, something like $351 million.

In addition to that, Hydro committed itself to building the Pickering B station on the basis that boilers be available at a certain time. They had a timetable, a schedule, and part of that schedule was that the boilers should be available at a certain time. Hydro committed the financing, they borrowed the money, they committed themselves to paying the principal and the interest. The only way they would get the money back was to ensure that the station went into operation and the electricity was provided and sold.

This should have indicated to anybody with any sense of concern, that when you embark on a project where the chances are that you stand to lose the maximum amount should some of the suppliers not deliver the goods, what you ordinarily would do, common sense would dictate this to you, is ensure that your suppliers are providing the components for the project on time and the equipment is properly constructed and operational.

I can understand the company, Babcock and Wilcox. They basically were out to maximize their profits. That is all their function is; and they certainly went ahead with that process.

But I find it difficult to understand just what Hydro’s function was in this situation. They handed out the contract and then pretty well gave the company a free hand, agreeing to just about every request to do what the company wanted. Once again comes the question in whose interest was Hydro operating?

It seemed to be very lackadaisical. It was aware that there were faults developing. It noticed that when the probe was being passed through the tubing it used to get stuck in one particular area. It was something more than just coincidence that the probe would get stuck at the top broached plate. That would have indicated to anybody with any sense that somewhere, some place, something was wrong in the boilers. But, no, they just went ahead and built the damned boilers. They built them all.

When they got the last boiler built, they decided that they should perhaps look inside and see what the matter was. They cut open the last boiler and, lo and behold, the tubing was bent; the broached plates were bent; the shrouds were torn away; and the whole thing was a mess. The problem is that this same mess existed in boilers one, two, three and five. About boiler seven or eight, Hydro was aware that there was something wrong. But it wasn’t until they got to boiler 34 or 35 that they opened it up and found out.

Mr. Kerrio: Number 32.

Mr. Makarchuk: Boiler number 32 was opened up and they decided they were right and that their suspicions were correct, but then the contract was completed. The boilers were there, so now they were going to have to start to solve the problem.

When they got to the matter of renegotiating, the only ace in the hole that Hydro really had was to take over the company because the company, in effect, said to Hydro, “If you don’t like our deal, we’ll pack up and go.” It was a take-it-or-leave-it proposition. That’s exactly what was said by the president of the parent corporation of Babcock and Wilcox.

The only alternative Hydro had at this time was not to bow and accept the blackmail, which it was. They had the choice of taking over the company and operating it. It’s not such a difficult process. The figures that were given at the hearing was the company had a book value of only $15 million. We should understand that Hydro’s own figuring indicated that if Babcock and Wilcox did the repairs, the total cost to Hydro would be $351 million. If Babcock and Wilcox didn’t do the repairs, if somebody else had to do the repairs, the boilers would have to be rebuilt from scratch and the delay would have been another two or so years. Then the cost would have been something like $1.4 billion

It should also be taken into account that at the same time Hydro had contracts of $200 million with Babcock and Wilcox. So when one looks at it in terms of straight economics, for $15 million Hydro was in a position not to accept the blackmail. Hydro was in a position to get into the boiler manufacturing business, and that is important. Canada would have been in a position to have another one of its own nuclear-component manufacturing plants where we would not have to be dependent on a foreign power, foreign personnel or foreign technology. We could do it ourselves and prove to the world that we could do it ourselves. This was possible.

Of course, Hydro said that was on the shelf. Like everything else in Hydro, it was on the shelf. The big thing that was on the shelf that comes out of this report is a sense of responsibility. That seemed to be on the shelf all along.

Anyway, the ideological blinders came out that private enterprise could not get involved in these kinds of things. The net result is that the consumers of Ontario will pay extra because of this. In a sense, it’s almost like having our own Petrocan, in having our own Hydro operating station. Joe Clark wants to sell Petrocan. The portion that makes money should be sold off and the portion that doesn’t make money will be left to the taxpayers. In effect, Hydro is in that position right now. The money-making proposition, which is the boilers, is left in private hands, while the cost part, the plant and operation, is in the hands of the public, and that’s the price they pay. In this case, they would have been in a position to take over some of the money-making proposition.

I should point out to the House, Mr. Speaker, that we tried to introduce a motion saying that Hydro should consider taking over Babcock and Wilcox. Of course, the motion was opposed by our Liberal and Tory friends who were on the committee.

Mr. Mancini: The member withdrew the motion; don’t twist the facts.

Mr. Makarchuk: No, I didn’t. Anyway, the motion was opposed.

During the course of the hearings, Mr. Speaker, we questioned the officials from Hydro to the effect that now, in view of the fact that they had made a mistake, that they were aware there was something wrong there, were they going to change the procedures, the internal procedures of Hydro. Were the board of governors concerned about this? We found out in the reply that, no, nothing had changed.

The board of governors, yes, they were concerned, but they were just telling us, “All we can do is salvage as much as we can out of the deal.” And there is nothing at this time to indicate that some time in the future the friends of Bill Davis who run this operation are not going to impose a similar mistake on the consumers of hydro in Ontario.

We can go to another exercise of a similar nature, because Hydro, up to this point in time, has not changed and refuses to change its internal operations and the same things could recur. I would suggest to you, Mr. Speaker, and suggest to the Minister of Energy over there, that he should get rid of the governors he has now because they haven’t demonstrated their responsibility. They have not taken their jobs seriously. I don’t know where he gets these hacks. He puts them on there, they sit there; I am not sure what they do.

Mr. Nixon: Are you talking about William Stewart that way?

Mr. Makarchuk: Yes, I am talking about various people. They sit there, they don’t question the internal operations. They are told on occasion, “Yes, we have a problem.” They don’t go after the personnel who created the problem or who are responsible for the problem. They don’t bother changing the procedures to ensure the problem doesn’t happen again. The question that comes to mind is, “What do they do?” Do they have tea in the afternoon, or do they drink something stronger?

Mr. Worton: Not in the afternoon.

Mr. T. P. Reid: Not in the NDP caucus.

Mr. Makarchuk: I would suggest, Mr. Speaker, that when you look at some of the other boards -- Ontario Place is another good example. I am digressing a little bit, but the board of governors there seem to have their tea in the afternoon; that place ran into all sorts of problems and I would suggest that we stop drinking tea and start getting rid of these governors.

When you put people on, put people there who have some sense of public responsibility, who perhaps may believe in the fact that public enterprise sometimes can perform certain functions in this society and therefore, should have some commitment to public enterprise. If you put your private enterprisers in there, possibly I can understand their reluctance to do anything more useful than fill a chair, and I am not sure that that is exactly useful.

Finally, Mr. Speaker, because of this lack of responsibility on the part of the board of directors of Hydro -- friends of Bill Davis -- the committee had no choice but to insist, as part of the recommendations from the committee, that Hydro should be made to appear before one of the standing committees of this Legislature at least once a year so we can ensure that this giant energy supply house is accountable to the public.

Ms. Gigantes: Mr. Speaker, on a point of personal privilege. I hate to interrupt my learned colleague, but I must call to his attention, remind him, as I am sure the Ministry of Energy would, that one of the members of the board of Ontario Hydro is much more a friend of mine personally than he is a friend of the Premier of this province, and that is Mr. Bill Dodge. I am sure the member for Brantford would want to be reminded of that.

Mr. Worton: What does he say about Bill Dodge?

[9:OO]

Mr. Makarchuk: The friends of Bill Davis and the friend of Evelyn Gigantes have got to pull up their socks.

Mr. Deputy Speaker: Perhaps the honourable member would refer to members by their ridings or ministries.

Mr. Makarchuk: Whatever it is, I am not happy. I am not happy with what the board of governors of Ontario Hydro is doing.

Mr. S. Smith: Surely, any friend of the member for Carleton East is a friend of the member for Brantford.

Mr. Makarchuk: Not necessarily; it works the other way around as well.

Ms. Gigantes: That’s correct.

Mr. Makarchuk: That is why we should make sure. We have a new Minister of Energy, who perhaps will be in a position to insist the information he is being fed is accurate, as opposed to what the previous minister was getting.

It was coming out in the report that the stuff he was being fed by Hydro was inaccurate. In reply to the Leader of the Opposition -- what do they call that, male cow droppings or something like that -- that was coming across the floor here? That was what was coming out of Hydro and we had to accept that as gospel truth.

I want to conclude, Mr. Speaker, in general, the amendment introduced is not really going to change the situation. Any other firm can pull off the same kind of stuff and become just as irresponsible if they are allowed to. If they are permitted to operate in a slipshod manner, they will operate in a slipshod manner. If they are permitted to do things on their own without any supervision, they will operate without supervision. Changing horses in midstream is not necessarily improving the situation. I am not particularly enamoured of the amendment provided by the Liberal Party.

However, I want to stress to the minister it is about time he buckled down on what is essentially sloppy, loose, irresponsible brass and top brass in Ontario Hydro. I want to point out it was amply demonstrated in the evidence that was presented to this committee during the months of July and August that if they were on their toes, if they were watching what was going on, the Ontario consumers of hydro energy right now would not have to be paying something like a minimum of $351 million extra. That is not peanuts and that is one of the minister’s responsibilities. I want the minister to make sure, now he has taken over this portfolio, that we don’t have a recurrence of this situation.

Mr. Deputy Speaker: The member for Durham West.

An Hon. Member: Give a speech, don’t read one.

Mr. Ashe: I am going to do some of both, just to make sure the members get the message.

It is indeed a pleasure to participate in this very important debate this evening. I think it is extremely important to put this whole issue into its proper perspective and really bring to the fore the issues before this Legislature this evening,

Before I deal with some of the issues arising out of the standing committee’s report, I would sincerely like to commend the members of that committee for the undoubted hard work and the perseverance they put into their duties. They had to go through, distil and review an awful lot of verbiage, an awful number of reports and oral documentation which was presented to them during the course of their deliberations.

The committee’s report clearly points out the scope and complexity of Ontario Hydro’s procurement activities and the impact which Ontario Hydro’s purchases have on their relatively small number -- and I think this is important -- of major equipment suppliers in Ontario and, in fact, the rest of Canada. The committee’s report also underlines the risks faced by both the manufacturer and the purchaser of sophisticated equipment, when talking about equipment in which technical difficulties are bound to occur.

In reading the committee’s report, members should keep in mind technical difficulties such as those which occurred with the Pickering B boilers, are not, indeed, a recent phenomenon. Nor is Ontario Hydro the only victim of this. Technical difficulties are bound to occur whenever and wherever new and sophisticated equipment and techniques are being developed and used. This was true in the past and I am sure it will continue to be true in the future, therefore it is something that must always be guarded against, at least to the extent possible.

I would like to begin my remarks specifically relating to the standing committee’s report by stating that the government is not in a position to comment on the accuracy and completeness of the facts and conclusions contained in the report -- and I think quite rightly. It is up to the Hydro board of directors to respond directly to the report and the suggestions and recommendations pertaining thereto. But the government generally supports the thrust of the committee’s recommendations -- and members may be surprised to hear that. However, the government has serious reservations about three of the recommendations, Since we have the amendment before us I might add to that a fourth, which I will touch upon at the appropriate time.

The government’s first concern is as follows: Some of the recommendations are open to the interpretation -- a very serious interpretation, if you read the word -- that the government should intrude and interfere in the day-to-day affairs of Ontario Hydro, and in particular in Ontario Hydro’s decisions to award contracts for major equipment.

Mr. J. Reed: Billions and billions.

Mr. Ashe: This interference is particularly apparent in recommendation (c) which specifically calls for Hydro to inform the minister fully prior -- and I think that is a very key word -- to the award of major contracts.

Mr. Kerrio: That sounds like a very good recommendation.

Mr. Ashe: It is really difficult to believe the standing committee intended such an interpretation, yet that’s exactly what is said in recommendation (c) of the committee’s report.

Mr. Kerrio: That’s exactly what we meant.

Mr. Ashe: As members may recall -- hopefully the member for Halton-Burlington will recall -- in my remarks in the debate on his Bill 61, the Ontario Hydro Public Accountability Act --

Mr. J. Reed: A good bill.

Mr. Ashe: It had some good points.

Mr. J. Reed: Did it get blocked?

Mr. Ashe: I did remind the honourable members at that time that responsibility for the business and affairs of Ontario Hydro is invested in the Ontario Hydro board of directors. I said there were very good and compelling reasons why Ontario Hydro’s business operations and day-to-day affairs should be kept at arm’s length from government or legislative interference.

Mr. Kerrio: At arm’s length but not out of reach.

Mr. Ashe: This is a position which the government strongly supports and one which cannot be stressed enough.

This government has scrupulously avoided interfering in Hydro’s purchasing practices --

Mr. Kerrio: Look at the results.

Mr. Ashe: -- believing as I do that Hydro’s day-to-day decisions should be based on business considerations and not based on political considerations.

Mr. Kerrio: Then why did you decide to keep Babcock and Wilcox in business?

Mr. Ashe: This is not to say the Minister of Energy should not be kept informed about Hydro’s purchasing decisions. Indeed, Hydro’s existing practice is to inform the minister immediately after Hydro board approval of contracts in excess of $25 million, when it is the lowest evaluated tender, and contracts in excess of $10 million, when it is other than the lowest evaluated tender.

It is important for proper business operation for the government to respect the integrity and responsibility of the persons appointed to that board. I submit to the members that we cannot ask persons of the quality of those who serve on that board to remain figureheads.

I can’t really believe that the members of that committee, in fact of this Legislature, would really suggest there should be political interference, political before-the-fact consultation in the awarding of contracts.

Interjections.

Mr. Ashe: It seems to me there are certain members who brought forward to the standing committee an insinuation that at some time back in history there was a member of this government who tried to influence the awarding of contracts. Quite rightly the members of the committee berated any kind of insinuation that there should be political input, political interference, political direction, from the government prior to the awarding of contracts.

Interjections.

Mr. Ashe: I find it unbelievable that the members of the Liberal Party and the members of the New Democratic Party would suggest the government should be involved in this political kind of interference, because that’s how they would interpret it, call it what they will now. That’s how they would call it after the fact. Any time there was an award of a contract made, they would say, “The government told them how to do it.”

Mr. Kerrio: That’s what you have done. We want to bring it here in the open.

Mr. Ashe: “The government suggested how they do it. The government had control over who Hydro would award it to and that isn’t right.”

Mr. Bradley: In other words, the minister shouldn’t know if they were negotiated or tendered, eh?

Mr. Ashe: It’s unbelievable that the members of that committee and the members of those parties across the floor would suggest that’s really what they are talking about.

Mr. Kerrio: Now we know why he is not the minister.

Mr. Ashe: I find it unbelievable.

Mr. M. Davidson: A point of order, Mr. Speaker:

Mr. Acting Speaker: A point of order.

Mr. M. Davidson: Mr. Speaker, I should point out to you the subject matter to which the present speaker is now referring, this document, was signed by members of all three parties and there was no dissent from his party on the subject to which he is speaking.

Mr. Acting Speaker: That is not a point of order. The member has not suggested otherwise.

Mr. Ashe: Mr. Speaker, just because I happened to highlight the political philosophies opposite, rather than the one on this side, I didn’t really say nobody else signed the report. I don’t remember putting that on the record, in any event.

Mr. Conway: You’re insulting the member from Glengarry?

An hon. member: The member has a poor memory.

Mr. Ashe: I appreciate that there were members from all sides who were maybe led astray with their perception of recommendation (c) in that particular report.

Mr. S. Smith: Praise your caucus friends.

Mr. Makarchuk: Is the member saying we’re stupid?

Interjections.

Mr. Acting Speaker: May I remind the House the member for Durham West has the floor. Interjections are in order but not running commentaries.

Mr. Ashe: Mr. Speaker, we will see a little later on the evening whether that’s really what the members of the committee, that’s what the members of the parties opposite, are suggesting the government do. They will have an opportunity to put on the record at 10:20 p.m. or when it may be, whether they really are saying they want political transfusion into the system prior to the giving out of contracts by Ontario Hydro. We will see a little later on in the evening.

Mr. Wildman: Who are you trying to kid?

Mr. S. Smith: Non-political people like Hugh Macaulay.

Mr. Ashe: Mr. Speaker, as I mentioned, we have a few other concerns. I would suggest that is by far the main one, but I find it so unbelievable I had to dwell on it to some degree. We have a couple of others.

Mr. Kerrio: You act as though Hydro is a free enterprise.

Mr. Ashe: Mr. Speaker, the government’s second concern is that the recommendations, in and of themselves, do not take into account the practicalities of implementation in all situations. This is an area where judgement and discretion are required --

Mr. Wildman: Who wrote this speech?

Mr. Ashe: -- and where the Ontario Hydro board and Ontario Hydro management must be free to make informed decisions, taking into account the real world -- and some of us do operate in the real world and so do Ontario Hydro -- difficulties which are faced in managing major complex projects and contracts in an ever-changing world.

Mr. Kerrio: Forty per cent over generation capacity proves it.

Mr. Ashe: Those of the members who have been involved in private enterprise know exactly what I am talking about. The real everyday world will be different tomorrow from what it was today and different from what it was yesterday.

Mr. Kerrio: Hydro’s not in that world. What are you talking about?

Mr. S. Smith: This is not one of your better efforts, George.

Mr. Ashe: By way of example, Mr. Speaker --

Mr. Acting Speaker: Order, order.

Mr. Sargent: You are embarrassing your minister. Sit down.

Mr. Acting Speaker: Order, please.

Mr. Ashe: By way of example, Mr. Speaker, I draw your attention to recommendation (a)(iii) which states that Hydro should conduct its business affairs such that more than one supplier is available to tender competitively. This recommendation ignores a number of complicating factors.

Mr. Sargent: Who wrote your speech for you?

Mr. Ashe: For instance --

Mr. Kerrio: It’s hard to look after your friends.

Mr. Ashe: -- necessary proprietary information and technology on some occasions, believe it or not --

Mr. Sargent: You are out of order.

Mr. Ashe: -- may only be in the hands of one supplier. Second, the marketplace for some specialized products may not be large enough to support more than a single supplier. Do you want two companies which go out of business or one that stays in business?

[9:15]

Mr. Kerrio: But that determination should be made here; not at Hydro. Right here!

Mr. Ashe: If you have nobody in business, there is nobody to make the decision.

The government’s third concern relates to recommendation (e), which states that Hydro should not take into account the subsidization of any supplier in the decision-making process relating to the award of contracts.

Interjections.

Mr. Acting Speaker: I wonder if the members of the official opposition will please be less demonstrative with their voices at the present time. The member for Durham West does have a right to make his points, whether or not you agree with them.

Mr. Ashe: Mr. Speaker, it is always very flattering that I can get them so involved in the debate.

Mr. Acting Speaker: You could do a little to make it not quite so controversial.

Mr. Ashe: As members are aware, Ontario Hydro follows the Ontario government’s buy- Canadian policy, under which a price preference of up to 10 per cent is allowed for Canadian-made goods. Hopefully, that’s not what the committee was talking about.

Mr. S. Smith: Quebec is part of Canada, you know.

Mr. Ashe: But in fact, if the standing committee is recommending that this preference be stopped, the government could not support this recommendation. We just put that in the record by way of clarification because we assumed that that’s really not what the committee is challenging, or suggesting.

It is the responsibility of the Hydro board of directors to comment on the specific recommendation and the recommendations and the facts and conclusions contained in the standing committee’s report. In this connection, the Minister of Energy is writing, and has in fact written to the Ontario Hydro chairman, asking them to review the report and bring back their comments on the report and how any recommendations might be implemented. I have been advised that the Ontario board of directors will be considering this at the first opportunity.

As you can see, we really had concerns originally in three areas. In fact we have now added a fourth, The highlight of one obviously is the suggestion -- I suppose you would call it a recommendation, because that’s what it is -- that the government should interfere in the awarding process before the fact. I think we have dwelled enough on that.

But now, with the amendment put before us by the honourable member opposite, I have another one. Again I find it unbelievable that a party, a so-called free-enterprise party, that always talks about the tendering system, the free-enterprise system --

Mr. J. Reed: Yes, tendering, that’s what we are talking about.

Mr. Ashe: -- would really bring forward an amendment along these lines.

First of all, may I say that a resolution of this House could not change the responsibility given to the Hydro board of directors in the Power Corporation Act. That’s number one. Their responsibility already exists. That won’t change it.

Second, I would suggest that what this amendment is trying to do is destroy the competitive tendering system. That’s exactly what it is trying to do.

In this case Babcock and Wilcox secured this Ontario Hydro tender in a very open and competitive way. They were by far the low tenderer, both in terms of dollars and in terms of the evaluation of their tender contract proposal. The members opposite are suggesting that that process, of which they have been critical, be thrown right out the window.

I really do find it unbelievable that that so-called free-enterprise party -- I can imagine this amendment coming from the third party; I think I could --

Mr. Kerrio: Hydro is not free enterprise.

Mr. Ashe: But that it came from that party opposite is unbelievable, it really is. It is unbelievable.

Mr. Wildman: You don’t understand anything. We wouldn’t move an amendment like that.

Mr. Ashe: I am glad to hear it. We have just had some indication from the members of the third party that even they see that this amendment is wrong and they are not going to support it. We will see about 10:20 or thereabouts.

Really what this is suggesting is that the whole tendering process be thrown out the window. Added to that, let me just point out a few other technicalities of that kind of a cancellation, besides the system just going out the window there might just be --

Mr. Sargent: Is the member trying to imply he made a deal with the NDP?

Mr. Acting Speaker: Will the member for Durham West please proceed.

Mr. Ashe: Thank you, Mr. Speaker, for your courtesy.

It is proposed the system be thrown out the window, but I would suggest to you there may be a few other complications. We have many legal beavers in here, but I would suggest there might be the odd lawyer who could make a substantial fee out that kind of cancellation. There might be a few legal complications to cancelling a contract that has been entered into by both parties in good faith and in due process.

An hon. member: Are you against lawyers now?

Mr. Ashe: Maybe one can’t do it legally so he negotiates his way out of the contract.

Mr. Cunningham: That’s breach of contract.

Mr. J. Reed: You’re on the hook.

Mr. Ashe: Is the member really suggesting one would throw good money after bad, to use his term? Is he suggesting one would negotiate with a substantial settlement in buying his way out of the contracts? I recall some of these members using that as a criticism at the select committee on Hydro affairs about having to buy themselves out of contracts because they had to cancel them.

Mr. Hall: They’re experts at it.

Mr. Ashe: There’s one other point I’d like to draw to the members’ attention which was made by the honourable member when he was putting his amendment. He used words something like “the $10 million from Hydro to Babcock and Wilcox was really like a gift.” Let me suggest it’s far from a gift.

Mr. Bradley: It’s a giveaway.

Mr. Ashe: I can imagine if that had come from some member who was not part of that committee we could put it down to their not knowing any better. They just looked at the numbers and they really didn’t comprehend what it was all about, because they didn’t have the time or opportunity to be present, nor the time or opportunity to read the transcript of the debates and the testimony that was put before the committee.

But let me point out that a great deal of this $10 million -- and I won’t try to say all by any means -- is because of actual changes in the technology --

Mr. J. Reed: The technology is over.

Mr. Ashe: -- actual changes in the boilers themselves that came about from the actual tubes, the installation in a different way and the different kind of tube by Babcock and Wilcox coming from a different supplier.

Mr. Bradley: Removing, transporting and installing the main generators, $3 million.

Mr. Ashe: I would suggest it was put well on the record that some of these things were not an expenditure by Ontario Hydro but an investment by Ontario Hydro that may very well have been made under any circumstances.

Once again, just in closing, we think the committee generally did a good job. There are a few exceptions to that which I hope I’ve been able to put on the record. I would hope the honourable members would think seriously about two of the major points -- the one relating to the process of suggesting the government be involved before a contract is signed and issued; and, second, that we’re really talking about throwing the tendering system right out the window. I have a real difficulty in thinking this Legislature, in all conscience, will support that.

Keeping that in mind, everyone will have an opportunity at about 10:15 or 10:20 to indicate which way they’re thinking.

On that basis I have an amendment to the amendment that I’d like to propose.

Mr. Deputy Speaker: Mr. Ashe moves that the motion for the adoption of the report be further amended by adding thereto the following:

“That the report be adopted with the exception of recommendation (c) on page 80 which shall be struck out and the following substituted therefor: senior management of Ontario Hydro should fully inform the Minister of Energy of all the particulars relating to the procurement of major equipment following the awarding of the contracts.”

Mr. Ashe: In closing, Mr. Speaker, I would hope that with the defeat of the amendment, which would properly put the tendering system back in its right light, and with the passage of this amendment which now stands as the amendment to the amendment, we would properly reflect what I think are the true feelings not only of the committee but in fact of this Legislature.

Mr. Mancini: I would like to make some comments on the report of the standing resources development committee which was tabled in the Legislature some time ago and made available for debate this evening.

As many of us may recall, this matter was brought to the attention of the Legislature by the Lender of the Opposition (Mr. S. Smith). I am sure if we were in the House at that time we can recall his questions to the then minister with two portfolios, the Minister of Natural Resources and Minister of Energy. I will at n later point in the debate make some comments on that aspect of having one minister holding two very important portfolios in Ontario.

We can recall the questions of the Leader of the Opposition and we know we didn’t get very far. We didn’t get very much information from that minister. I would like to inform the House that we didn’t do much better with Ontario Hydro.

I was able to keep a copy of an article from the Globe and Mail of May 25, 1979, after the matter had been raised by the Leader of the Opposition, dealing with some questions the paper had raised with a Hydro spokesman about having kept secret the multi-million-dollar contract with Babcock and Wilcox for the Pickering B nuclear generating station boilers which were found to be faulty.

What did Mr. William Morison, Hydro’s director of design and development, tell the Globe and Mail? He said, “I don’t know what you could see there. Tendering documents are open to the public, but thereafter any contracts between us and the company are private.”

When further attempts were made by the Globe and Mail to procure an answer, a Hydro spokesman said, “At the moment, none of them is capable of talking. They are all working full bore.” There was nobody capable of talking, nobody capable of making public what the public needed to know.

It was after events like that that the official opposition in its press release of May 28, 1979, gave notice to the Legislature that it intended to invoke standing order 33(b) to have the annual report of Ontario Hydro referred to the standing resources development committee.

[9:30]

It should be on the record, as I have stated, that we had to struggle to get this whole matter before the public. Up until that time we had received very little co-operation from the then minister, who was wearing two hats, and also officials of Ontario Hydro.

I was very proud to serve on that committee because when it was all over the members of all parties were able to come to a consensus. I think that is rare in this type of political atmosphere and when so much is at stake. I want to say that I commend all members for working diligently together under much stress and being able to come up with a report that all of us could sign.

The report itself deals with many of the problems that have already been raised. For the information of the House, I would like to go over some of them and expand on them. Before I do, I want to mention to the House that even as the committee was being started, even as we were preparing to do our work, there was further intimidation from Ontario Hydro. I now know why Hydro did not want us to go to this open forum and break out all these facts.

That intimidation, in my opinion, was levelled at the committee by the then chairman, Mr. Taylor, who wrote the committee a letter. I quote from the Globe and Mail of June 21, “Mr. Taylor said public analysis and discussion of this issue would likely bring negotiations to a premature end, with the two parties being deprived of the right to arrive at a mutually satisfactory settlement.”

The events of the last few months have shown that to be totally false. In no way was the committee or any of its members a hindrance to Ontario Hydro or Babcock and Wilcox in their signing an agreement. The very fact that they signed an agreement, which Ontario Hydro, for reasons known only to them, seemed to like, proves that Mr. Taylor possibly prejudged the situation.

Anyhow, the committee was able to establish itself. We were able to hire expert counsel. I wish to commend Mr. Wortzman for the tremendous work he did -- we all know he put in many hours -- and his assistant, Mr. Malette.

One of the things that has always puzzled me, and to this day still does, was referred to in the committee’s report on page eight. I cannot understand, and sitting through all the hearings it was never explained to me why, when Hydro staff recommended MLW for the Bruce A work, its recommendations were overruled,

A few minutes ago, we heard from the member for Durham West. His speech in the last few minutes centred on political interference. He made mention that we were promoting political interference. How opposition members can promote that type of activity is beyond me. But the government, which is able to make these decisions and is able to interfere, if it so wishes, did so. It did so through a former minister of this Legislature.

A former minister, whose name became well known after this incident, had written a letter to Ontario Hydro. He informed them that the Babcock and Wilcox people had been in to see him and that they had made a great presentation. He believed they would be worthy of having the contract, even though their tender was $1 million greater.

That is when all the problems began. When the then minister, Mr. Randall, wrote his letter, which was widely publicized thereafter, we saw what political interference could do, We’ve been paying for that political interference ever since that day. It did not matter that AECL had documentation which, under any normal circumstances, would have been enough not to award anyone a contract, even if they had been the low tender.

Further to that, Ontario Hydro staff had documentation. This wasn’t hearsay in the halls of that shiny, new building just across the street from the Legislature where people gather together, I’m sure, in their hallways and whisper secrets to each other. It wasn’t that kind of thing at all. It was strict documentation in writing as to why B and W was incapable of doing the work. Maybe Mr. Randall’s letter wasn’t the thing that did it, But, to me, that’s the only thing I can grasp at as to why, under these unusual circumstances, Hydro would buckle under and give a job to a company whose record was not very good and whose bid was $1 million higher.

The member for Durham West did not address himself to that question. Therefore, the committee recommended that competitive tendering should not and ought not be replaced. We supported that wholly. All members of the committee signed their names to the report which contained that. I think it’s a practice which must prevail if the taxpayers are to he protected.

Then we delved into another area when we moved on to discussions concerning Pickering B. After Pickering B was awarded the contract instead of it being tendered on the open market, we wanted to know from Ontario Hydro why they would do something like that. If they were supposed to protect the public interest, why would they award a contract to a company that had previously been given a very tainted image by its own staff, not by someone from outside, but by its own staff? Why would they award a non-tendered contract to a company like that? We were told that there was money to be saved. Pickering B was going to be a repeat of Pickering A.

The chairman of the committee will well remember the evidence of that nature which was given to our committee by Ontario Hydro. I’m surprised they would tell the committee something like that. I’m surprised they would assume we would not think through a statement like that.

All of us know it takes approximately 10 years to put a nuclear plant on stream. It is impossible to repeat. There is no way Ontario Hydro could have repeated Pickering A. There were too many technological advances. That argument goes down the drain.

We moved on to the subject of, “The contract had been awarded without tender. Did you get a fair market price? Were the people of Ontario protected?” Yes, we were told.

It states on page 13 of the report: “Hydro’s overriding concern within the negotiations was to procure the steam generators at a fair market price, as if tenders had been called. It was Hydro’s evidence that the negotiated price of approximately $25 million (unescalated) was in fact the fair market price. The committee disagrees.”

All members of the standing resources development committee signed a report which stated, “We disagree with Ontario Hydro’s testimony” -- not just the Liberals, not just the New Democrats, but all members of that committee disagreed.

There is a lot of other evidence that should be brought to the attention of the House. I see my time running short, but there are a couple of other things I want to mention before I close, because I feel they are so important.

One is the attitude of the Hydro officials themselves. It never ceases to amaze me just how many people come out of the woodwork when Hydro has to give testimony before a standing committee of this Legislature. As I sat in that committee and looked over the room and the people who were there watching, I could not believe the amount of money and talent in that room solely for the purpose of taking notes.

Why they could not rely on the Instant Hansard, which was already being paid for by the people of Ontario, and why they had to send a slew of civil servants from Ontario Hydro Corporation, all of them taking notes at the same time, was beyond me. I could understand if there were two or three meetings going on, in possibly two or three different rooms, you might need several people, but with Instant Hansard, that becomes questionable.

Having a slew of these civil servants, all in the same room, all taking notes of the same proceedings, is beyond me. It is beyond me and I think is indicative of one of the problems at that crown corporation.

The other point I would like to make concerning Babcock and Wilcox is the unbelievable position taken by its American parent and by its spokesman, Mr. McDermott.

Unfortunately, I am out of time. If you will allow me 30 seconds, Mr. Speaker, I want to make one final point.

In this province of Ontario, when people go to the polls to vote, they vote for a government that would put an elected official at the head of the ministries. We see elected ministers at the head of the Ministry of Government Services and at the head of the Ministry of Revenue, which are important, but not as important as the Ministry of Energy. Yet this government allowed the Ministry of Energy to go one full year without a minister. It was one full year without an elected person working full-time protecting the people of Ontario. I think that is shameful.

[9:45]

Ms. Bryden: Mr. Speaker, we started out tonight with a unanimous report from 16 members of a standing committee who spent nine weeks of the summer recess investigating what was a very serious matter: whether Hydro’s procurement practices were lax and whether the hydro consumers of this province were being saddled with costs they should not have had to pay.

These serious questions were dealt with by the committee in a report that indicted Hydro for not following competitive tendering, for not having performance bonds and for not following inspection and monitoring practices which would have prevented the necessity for having such a committee. Any expense the committee incurred would have been unnecessary if the recommendations that are in that report had been implemented before the committee ever met.

I think the trip was worth while, if the recommendations are implemented, because the recommendations call for an improvement in Hydro tendering practices and an improvement in the accountability of Hydro to the Legislature and to the minister. That is simply all that is being asked for when it is suggested that the minister should be informed of Hydro contracts for major procurement before the contract is awarded.

The effect of the award of a large contract can spill over into many sectors of the economy. It can affect employment. It can affect foreign investment in this country. It can affect future energy supplies. It can affect the kind of energy we are going to have. If the minister is not informed that major procurements are being considered in the energy field, he is walking in the dark.

I think the amendment of the member for Durham West completely nullifies what was recommended by the committee as a reasonable way of keeping the Legislature and the minister informed of what is going on in a major way in the letting of contracts in the energy field.

I remind you, Mr. Speaker, all members of the committee from the Conservative side voted for this recommendation that the member for Durham West is going to upset. Is he asking them to reverse themselves and now to vote against that recommendation? They were undoubtedly aware of some of the problems he mentioned. The only evidence that could be interpreted as political interference was the letter which is on record in the report from a former Conservative Minister of Trade and Development. But the members of the committee were convinced that simply informing the minister of the impact of large-scale procurement would not be opening matters to political interference.

As for the Liberal amendment, I cannot understand how, if they felt the Darlington contract should have been considered by the committee, they did not raise it in the committee. In effect, what they are doing is suggesting that Darlington be reopened and that the government go looking for another contractor, even if there is no other contractor in the field. Maybe they will have to go down to the States or hire a completely offshore contractor, if they are going to look for another one.

Many of us on this side of the House would like to see the question of Darlington reconsidered.

Mr. Haggerty: You want a moratorium on Darlington.

Ms. Bryden: We would like to see Darlington put on the shelf for some time until this tremendous surplus of electrical energy that we now have is used up. This seems to be a very back-door way of expressing any concern about whether Darlington is going to produce excess energy capacity.

Mr. Cureatz: You are not bringing that in before the committee decides, are you?

Ms. Bryden: I do not support a back-door examination of the Darlington question. I think that is a question for the Hydro committee to make recommendations on, and then we will deal with that in this House.

On the question of what one does when one calls for tenders and there appears to be only one potential supplier in Canada, one has to look at the desirability of developing a Canadian capability for Ontario Hydro purchases. But it isn’t going to be done simply by saying we will try to find two tenderers in every case. Perhaps the industry will only support one tenderer in Canada, We don’t particularly want to say we will insist that one tenderer be Canadian and one be American.

It seems to make much more sense, when one is dealing with the purchase of very large pieces of equipment for nuclear and other generation, that one sees that the jobs are kept in Canada; that there is a Canadian capability. If there is only opportunity for one firm to have enough business to operate in Canada, it seems to me the government should consider operating that firm itself or in partnership with that firm. Then there is control over the effect on the economy. There is no reliance on a foreign owner who can threaten to pull out at any moment, as happened in this case when it came to the question of who would pay for the repairs to the boilers.

We know that the threat was held over the head of Hydro that, if it did not share some of the costs, the company would be forced to close down. We don’t know how true that was or if it was simply a method of bargaining or negotiating. But when we leave ourselves at the mercy of a multinational corporation, and we do not have an alternative in the country, we cannot create artificial alternatives in the way the Liberal motion seems to suggest.

We should really be developing our own capability so that our hydro needs are supplied by a Canadian firm -- possibly government-owned -- with Canadian workers. There are lots of jobs in that area, and the impact on the economy can be controlled when we do control it. Our party did move a motion to that effect; unfortunately, the motion was rejected by the committee. Perhaps now they have seen the alternatives, they might be willing to reconsider it.

I am going to oppose both amendments, Mr. Speaker. I think we should adopt the report because, if the recommendations are followed through and implemented, it will mean an improvement in our control over the biggest crown corporation in this province, the one that spends the most money and the one that affects our economy the most. We must have that corporation answerable to this Legislature. That is why it must come back once a year to a standing committee to report what is going on. That also was an amendment we moved, but it was not adopted by the committee. I hope the Legislature will reconsider that at some future date.

Mr. Lane: Mr. Speaker, as a member of the resources development committee, I welcome this opportunity to comment on the report that was tabled in the Legislature in October.

To begin with, I would like to compliment the members of the committee for their diligence and patience in investigating this very complicated and highly confidential matter.

The performance of the committee has in no way jeopardized the very sensitive negotiations that were being carried on between Babcock and Wilcox, Atomic Energy of Canada Limited and Quebec Hydro with respect to modifications of their boiler systems.

It is a refreshing change for the resources development committee to write a majority report where all three parties agree on the final recommendations.

It is most unfortunate but not unusual that problems and delays occur in developments of highly technical and sophisticated industries. Ontario Hydro continues to break ground in the field of nuclear energy and electrical power generation and certainly difficulties are bound to develop which are unavoidable.

The difficulties that have developed in respect to the Babcock and Wilcox steam boilers should not in any way overshadow Ontario Hydro’s excellent record in continuing to supply power to Ontario consumers. Ontario Hydro and Babcock and Wilcox Limited have hammered out what I think is a very good settlement with respect to the Pickering B boiler defects and it will not have too much impact on the Ontario consumers.

The immediate cost to Ontario Hydro for the rebuilt program of 34 boilers will be about $9.9 million. Of that total, $3 million will be for transportation costs and $6.9 million will cover the added costs of improving the performance of the boilers.

In the long term, the cost to Ontario Hydro and to the consumers of the province will be substantially less. Hydro will be receiving a more efficient boiler and the rebuilt boiler will have a greater heat transfer capability as a result of the improved Monel tubing to be installed. Fewer tubes will be plugged than was expected. These modifications will raise the overall performance of each boiler, which will improve the total efficiency of the Pickering B facility and continue to save Hydro consumers money over the lifetime of the plant. In addition, Hydro will be able to save time and money during the installation of the boilers because the tubes no longer need eddy current testing.

The report also recommends that Ontario Hydro should utilize a competitive tendering process for the procurement of major equipment to a greater degree. As a supporter of the free enterprise system and open market competition between companies, I feel Ontario Hydro should have entertained tenders for all possible supplies of the Pickering B boilers.

Ontario Hydro did offer valid reasons for choosing B and W for the Pickering B contract, especially since B and W did win the original contract on the basis of the results of a competitive tendering process and exact duplication was a major concern to Ontario Hydro in terms of plant maintenance. But Ontario Hydro is a public corporation and it has had difficulties with B and W in respect to other contracts, so it should have asked for bids on this contract.

I fully support the recommendation that the performance bond and a complete financial background of companies should be obtained by Ontario Hydro as well as the use of the competitive tendering process in order to avoid any further public misconceptions as to the tendering and contracting practices of Ontario Hydro.

Finally, I would like to address the general question of the overall reasons for this committee examining the B and W boiler contract. I fully endorse the short list of recommendations the committee has drawn up but I feel the committee had very little, if any, impact on the actual settlement of the boiler rebuild program.

The committee did reinforce the need for improved communications between Hydro and the Minister of Energy. These information links must be improved and any major event of public concern must be passed on to the minister. The government of Ontario must be kept up to date on all matters that concern the people of this province, But I doubt very much that the people of Ontario were well served by having this committee spend well over $100,000 listening to this problem when we had very little to do with the final settlement that was arrived at.

As a northern member with a large rural population, I have been observing Ontario Hydro’s shift in focus to demands of the major centres. Rural consumers continue to pay for the constant improvement of facilities that benefit only the urban centres.

Over the past 10 years, Ontario Hydro has spent more than $10 billion in capital construction in order to meet the peak load demand of the urban parts of Ontario. Over the last 10 years the gap between the Toronto consumer’s hydro bill and the rural customer’s bill has increased fourfold. The major communities in most areas continue to be removed from the rural power grid patterns, thus raising the cost to rural customers. If hydro rates were standardized across Ontario, the cost to the rural resident would be decreased by 22 per cent and the city dweller would face an increase of approximately four per cent.

[10: 00]

Four provinces have already standardized provincial power rates across the province and three provinces have a very nominal decrease for towns and cities. Only Ontario and Alberta have substantially higher rural rates and Alberta has a number of private utilities that are attempting to make a profit from the consumer.

I sincerely hope Ontario Hydro would implement the policy changes suggested by the committee report. Since Ontario Hydro is a public corporation, it should take closer notice of the rising cost to the rural communities of this province. In a day and age of energy conservation, the heavy consumer of power should not be given a discount at the expense of the small consumer.

In closing, I would just like to say that I, as one member of the committee, would like to get a response from Ontario Hydro before this report is either adopted or rejected or amended or otherwise.

Mr. Kerrio: Mr. Speaker, my colleagues have addressed themselves to some of the particular parts of the contract as they relate to the Babcock and Wilcox holler contracts.

There are a couple of matters I would like to touch on.

I think the citizens of Ontario, and particularly those paying Hydro rates, are fortunate indced that minority government is at least opening some doors relative to the function of Ontario Hydro. While it was the intent, initially I think, of the government to treat Hydro at arm’s length, I am afraid Hydro has got completely out of reach.

Mr. Speaker, is there some time limit as it relates to this debate?

Mr. Deputy Speaker: I am not aware of any time. It is up to the members to govern themselves accordingly.

Mr. Kerrio: Hydro has actually become bigger in the sense of its mandate than the government that spawned it. While the member for Durham West has suggested this legislative body shouldn’t interfere with Hydro or its direction, the fact remains that a former Treasurer--

Mr. Warner: On a point of order, Mr. Speaker: I understood we had by agreement split the time equally three ways. My understanding from the clock is that the Liberal Party has exhausted its allotted time. Am I correct in that?

Mr. Nixon: Speaking to the point of order, Mr. Speaker, I agree that that was the arrangement. When the last speaker, the member for Algoma-Manitoulin, sat down and you called for further speakers, nobody got up, so the member for Niagara Falls simply got up to speak.

Certainly, if the NDP or whoever’s turn it is wants the time, I suppose that’s all right, but someone has to stand up and start talking.

Mr. Deputy Speaker: The member for Niagara Falls.

Mr. Kerrio: I would just like to wind up my remarks then, if I may. I don’t like to leave them in mid-sentence.

It has to be drawn to the attention of this chamber that while one member from the Conservative Party stood up and suggested the direction of Ontario Hydro should be removed from this chamber, a former Treasurer was certainly able to alter the direction of Ontario Hydro in a very significant way. I can’t agree with him in his assessment of the mandate of Ontario Hydro. It is time we looked into some of the changes in the Power Corporation Act so that Hydro will be more responsible to this Legislature and to the people of Ontario.

Mr. M. Davidson: Mr. Speaker, I was quite willing to give my friend from Niagara Falls a couple more minutes. I am not sure I can use up the 10 minutes.

Mr. Kerrio: That’s actually where it all started--generating power, you know.

Mr. M. Davidson: I would like to speak to the report. Not being a member of the committee as such, I did, though, as the member from where Babcock and Wilcox is located, in Cambridge, spend a considerable amount of time during the committee hearings--

Mr. Watson: You didn’t like to lose those 1,400 jobs.

Mr. M. Davidson: --watching the committee in action. I must congratulate all of those who took part in the committee hearings for having to absorb what I considered to be a large amount of material that had been produced by both Ontario Hydro and Babcock and Wilcox and trying to determine what, in effect, both of those corporations were trying to tell them. I’m quite sure there were occasions when much of the information being provided to them required a great deal of sifting out in order to decide finally what it was each of those two parties was putting forward.

There are those who throughout the course of the debate tonight have suggested that perhaps some of the recommendations put forward in this report were actually put forward only by members of either the Liberal or New Democratic parties. I would point out again, as I did when I rose on a point of order when the member for Durham West

-- the parliamentary assistant to the Minister of Energy -- was speaking, that this document we have before us this evening for debate was, in fact, signed by all members of that committee, including members of the Conservative Party.

The recommendations included in this report were endorsed by the members of the Conservative Party who were on that committee at that time. I would suggest any effort on the part of the parliamentary assistant to the Minister of Energy to suggest anything other than that, while he may not be trying to mislead his House, he certainly is trying to give misinformation to the public in Ontario. I don’t think that’s worthy of him.

I think he should be prepared to say the members of his party did, in fact, support this document. I think he should be prepared to say the recommendations in it are highly critical of Ontario Hydro and the operations of Ontario Hydro in this province. I think he should be prepared to say his party accepts these recommendations in all good faith and will be prepared to try to implement them should this report pass in the House this evening.

There have been, as I said, a number of comments made throughout the course of the hearings, in newspaper reports and other areas, highly critical of the Babcock and Wilcox company. As I said one day in camera in committee, and I’ll say here publicly, there is no question in my mind that the responsibility or part of the responsibility for the damages which have occurred very well could be the judgement of management of Babcock and Wilcox, but when people start talking about the workmanship of the product, they are talking in terms of the guys down there on the floor slugging around trying to build and develop these boilers.

While it may be the information those guys received prior to building these boilers was such, they’re the guys who have to take orders from their top management people; they carry out those orders. The fact the boilers do not in fact, operate properly should not be a reflection on the working guys in that plant. They’re doing the job they’re instructed to do.

It’s these same workers in that plant who are very much concerned and puzzled by what was taking place here during the course of the hearings. They’re not sure of their futures, given the statements made by some of the top officials, of Babcock and Wilcox (US). They certainly were not receiving that information from the Babcock and Wilcox (Canada) people. When it came to the point where they found out there was possibility of closing down that plant, certainly, 1,600 workers are going to be concerned. If we add to those 1,600 workers their wives and their families, we’re talking somewhere in the neighbourhood of 3,500 to 4,000 people in the city of Cambridge who could have been affected should the company have closed down

I’d like to quote the Kitchener-Waterloo Record of September 15, 1979, from a full-page story about this problem written by Mr. Hugh Patterson, who is with us in the gallery tonight. I think it was a very objective coverage of this problem. He did an article after he had held discussions with the local union president, Mr. Frank Crystal.

Mr. Crystal is quoted as saying, “It bothers me going home after work and not knowing what we’ll read next in the newspaper. You don’t work here 23 years and say it doesn’t bother you. Until this happened our company had a damned good name in the boiler business -- the best in Canada. I’d just like to see this over with and let us get back to making boilers the way we’re damned well capable of making them.”

He says further, “I think we can put this company on its feet again and give it back the name it has always had in the boiler business.”

I suggest that by implementing the recommendations here, and by putting the problem where it actually belongs -- in the hands of Hydro and the Minister of Energy -- perhaps Mr. Crystal and his fellow workers can go back to doing what they have done over many years; that is, produce a capable working boiler that can survive in any industry in this country.

I would like to point out a couple of things: Certainly the problems of stress relief were the major problems that existed in the damage to the Pickering B boilers. It was the stress-relief process that caused the damage. But let’s take a look at the evidence that has been presented. Ontario Hydro had originally, in its specifications, suggested that the stress relief should be localized; in other words, the relief should only be carried out at the areas where the weld was in place.

I would like to quote from the report, which says: “Drawing upon its anomalous Pickering A experience, Hydro stipulated in its specification that the steam generators be locally stress-relieved. This was consistent with what appears to have been the preferred method in the industry at that time. B and W, however, took exception thereto and proposed full-vessel stress relief. Hydro ultimately agreed to this deviation from its specification and approved the relevant procedure submitted by B and W.”

I suggest if Hydro had been the kind of corporation it is supposed to be, if it were interested in the cost to the consumers of this province, it would have demanded that the original specifications be met or the contract would not be carried out by Babcock and Wilcox, but would be carried out by some other provider of the same equipment in this province.

The fact that B and W negotiators were able to negotiate a better contract than Ontario Hydro can negotiate is not the fault of B and W. That fault lies with Ontario Hydro. That is what this report hopes to rectify and clarify. I certainly hope it passes in the House tonight.

Hon. Mr. Welch: Mr. Speaker, before bringing this debate to a conclusion by putting the questions that are before the House, I wonder if I might comment briefly on one or two matters which have been the subject of some considerable discussion tonight.

Certainly, as Minister of Energy, I have found helpful, instructive and informative the exchange that has taken place and, indeed, the report itself. One can hardly argue with the spirit of the report, which calls for improved communications between the public utility and the minister responsible for that utility, in so far as accountability in the Legislature is concerned.

The Minister of Energy does find some concern with recommendation (c) as set out on page 30 of the report. It is one thing to talk about senior Hydro management keeping the minister fully informed with respect to contracts. But surely any recommendation that leaves open to misunderstanding and misinterpretation in this province that there would be a period of time between informing the minister and the actual awarding of the contract leads to all sorts of problems with respect to public perception of the objectivity of the whole system.

The amendment to the amendment proposed by my parliamentary assistant pleads with this House to preserve the objectivity of the public tendering system. There is absolutely nothing wrong with the spirit of (c) which says the minister should be kept fully informed with respect to that contract. But I invite the members to look carefully at the wording. It says, “prior to the award of the contract.” That leaves a lot of opportunity for people to speculate as to what happens during that discussion prior to the award of the contract. As the present minister, I really don’t want that particular opportunity for innuendo. I would rather protect the system.

[10:15]

All the amendment of the parliamentary assistant says is that the spirit of recommendation (c) be preserved, but that there not be that particular exchange prior to the award, that the public tendering system and all the principles of that system be preserved. In the same situation, the amendment of the member for St. Catharines further destroys the system by asking now that we reopen the award of a contract.

I would assume, on the basis of this presentation, members would support the amendment to the amendment and defeat the amendment.

Mr. Kerrio: You’re going to sell us out, like the Socreds.

Mr. Speaker: Mr. Villeneuve has moved the adoption of the report of the standing resources development committee on the Pickering B generating station steam generators supplied to Ontario Hydro by Babcock and Wilcox (Canada) Limited and the addendum thereto.

Mr. Bradley has moved that the following words be added to the motion to adopt the reports of the standing committee on resources development:

And further, the legislative assembly recommends, in the light of Babcock and Wilcox (Canada) Limited’s poor performance in respect of the boilers supplied to the Pickering B and Bruce A generating stations, that Hydro’s contract with Babcock and Wilcox for the supply of boilers to the Darlington generating station be reopened with a view to implementing forthwith recommendation (b) of the committee’s first report, namely, that Hydro should never again expose itself and the public of Ontario to the substantial risks and potentially harmful repercussions flowing from an unhealthy and an unwise dependence upon one supplier.”

I have a new version of an amendment to the amendment. Because the amendment didn’t mean anything, I’m going to allow the member for Durham West to place again his amendment to the amendment.

Mr. Ashe: Mr. Speaker, the actual amendment reads exactly as it did before. I apparently did not place it completely correctly -- for which I apologize -- and hope to put it in order now.

Mr. Speaker: Mr. Ashe moves that the amendment to the motion for the adoption of the report be amended by striking out all the words after “that” and substituting the following words therefor:

“That the report be adopted, with the exception of recommendation (c) on page 30, which shall be struck out and the following substituted therefor: ‘Senior management of Ontario Hydro should fully inform the Minister of Energy of all the particulars relating to the procurement of major equipment following the awarding of the contract.’”

The House divided on Mr. Ashe’s amendment to the amendment to the motion for adoption of the reports of the standing resources development committee, which was negatived on the following vote:

Ayes

Auld, Ashe, Belanger, Bennett, Bernier, Birch, Brunelle, Cureatz, Davis, Drea, Eaton, Elgie, Gregory, Grossman, Havrot, Henderson, Hennessy,

Hodgson, Johnson, J., Jones, Kennedy, Kerr, Lane, Maeck, McCaffrey, McCague, McNeil, Miller, F. S., Norton, Pope, Ramsay, Rollins,

Rotenberg, Rowe, Scrivener, Smith, C. B., Snow, Stephenson, Sterling, Taylor, C., Timbrell, Villeneuve, Walker, Watson, Welch, Wiseman, Yakabuski.

Nays

Blundy, Bolan, Bounsall, Bradley, Breaugh, Bryden, Charlton, Conway, Cunningham, Davidson, M., Davison, M. N., Di Santo, Eakins, Pep, Gaunt, Gigantes, Grande, Haggerty,

Hall, Isaacs, Johnston, B. F., Kerrio, Lupusella, MacDonald, Mackenzie, Makarchuk, Mancini, McClellan, McGuigan, McKessock, Miller, C. I., Newman, B., Nixon,

O’Neil, Philip, Reed, J., Reid, T. P., Renwick, Riddell, Ruston, Sargent, Smith, S., Stung, Swart, Sweeney, Van Horne, Warner, Wildman, Worton, Ziemba.

Pair: MacBeth and Edighoffer.

Ayes 48; nays 50.

The House divided on Mr. Bradley’s amendment to the motion, which was negatived on the following vote:

Ayes

Blundy, Bolan, Bradley, Conway, Cunningham, Eakins, Epp, Gaunt, Haggerty, Hall, Kerrio, Mancini, McGuigan, McKessock, Miller, C. I., Newman, B., Nixon, O’Neil, Reed, 3., Reid, T.P., Riddell, Ruston, Sargent, Smith, S., Stong, Sweeney, Van Horne, Worton.

Nays

Ashe, Auld, Belanger, Bennett, Bernier, Birch, Bounsall, Breaugh, Brunelle, Bryden, Charlton, Cureatz, Davis, Davidson, M., Davison, M. N., Di Santo, Drea, Eaton, Elgie, Gigantes, Grande, Gregory, Grossman, Havrot.

Henderson, Hennessy, Hodgson, Isaacs, Johnson, I., Johnston, R. F., Jones, Kennedy, Kerr, Lane, Lupusella, MacDonald, Mackenzie, Maeck, Makarchuk, McCaffrey, McCague, McClellan, McNeil, Miller, F. S., Norton, Philip, Pope, Ramsay, Renwick, Rollins, Rotenberg, Rowe, Scrivener, Smith, C. E., Snow, Stephenson, Sterling, Swart, Taylor, G., Timbrell, Villeneuve, Walker, Warner, Watson, Welch, Wells, Wildman, Wiseman, Yakabuski, Ziemba.

Pair: MacBeth and Edighoffer.

Ayes 28; nays 70.

Report adopted.

The House adjourned at 10:40 p.m.