The House met at 10 a.m.
STATEMENTS BY THE MINISTRY
CORRECTIONAL SERVICES DISPUTE
Hon. Mr. McCague: Mr. Speaker, on Wednesday I proposed to Mr. Sean O’Flynn, president of the Ontario Public Service Employees Union, that we use binding arbitration to resolve the category question for correctional officers and certain pay-related classes. I suggested that an independent third party, acceptable to the government and the union, decide the matter. This proposal demonstrates my interest in seeking a peaceful resolution. The union declined to proceed as proposed.
Frankly, I was disappointed in the union’s response. A serious attempt has been made by the government to seek a solution. On behalf of my cabinet colleagues, I want to reiterate our willingness to seek a satisfactory solution to this problem. Accordingly, I sent a letter Thursday to Mr. O’Flynn, reconfirming our willingness to submit the question to binding arbitration, and attached a memorandum of agreement to this effect, which I signed on behalf of the government.
In my letter to Mr. O’Flynn, I strongly urged him, the union and the employees to explore with me a peaceful, legal settlement of this difference. Mr. O’Flynn was advised, “The government cannot and will not tolerate breaches of the law and will take appropriate steps to ensure compliance with it.”
In the event the union fails to respond to our initiative, the government must prepare for the possibility of an illegal strike.
The government intends to institute action in the Supreme Court of Ontario for an injunction to prohibit any strike activity. We have initiated action to secure from the Ontario Public Service Labour Relations Tribunal a declaration of unlawful strike and consent to prosecute the union, various officials of the union and employees, for violations of the act.
E. B. EDDY EXPANSION
Hon. Mr. Grossman: Mr. Speaker, I would like to clarify the details of the major capital expenditure program announced by E. B. Eddy Forest Products Limited in Espanola, and the major role played by the Ontario government in securing this investment.
In Espanola, on Wednesday of this week, I officially presented the E. B. Eddy company with a cheque for $16,667,000, drawn from the Employment Development Fund allocation as an incentive towards the company’s expenditure of $225 million on its facilities at Espanola and Ottawa over the next five years.
Mr. S. Smith: As an award for their excellent performance.
Hon. Mr. Grossman: Maybe the Leader of the Opposition wouldn’t have helped the company. We thought Espanola was good enough to save; he did not. I’m glad the Leader of the Opposition got it on the record that he wouldn’t have helped the company.
Mr. S. Smith: Absolutely right. Their record doesn’t deserve it, and you know it.
Hon. Mr. Grossman: Those remarks are appropriate for what we used to call the garbage track.
Mr. Ruston: You’re the only garbage around here.
Mr. Deputy Speaker: Order.
Hon. Mr. Grossman: They’ll love you guys at Espanola.
Mr. Deputy Speaker: Order.
Hon. Mr. Grossman: Some press reports to the contrary, this incentive from the government of Ontario represents two thirds of the total incentive available to the company under the joint Ontario-Canada pulp and paper facilities improvement program. The federal Department of Regional Economic Expansion will contribute the other third, or $8,333,000 in incentives over the next three years.
As many members of this House are aware, the livelihood of the community of Espanola has been in jeopardy on more than one occasion owing to the questionable viability of its ageing pulp and paper mill. The ability of E. B. Eddy management and the local labour force to maintain this operation, even in the face of the most adverse of market circumstances, must be commended.
With the company’s announcement and specific expenditure of some $210 million on the Espanola facility, the mill’s long-term commercial viability is assured and the community will have a stable economic base for the foreseeable future. In addition to expenditures at Espanola, the company will be spending some $15 million at its Ottawa facility, primarily to upgrade production equipment.
E. B. Eddy’s program accomplishes many of the goals sought by the pulp and paper facilities improvement program. For example, the pollution abatement standards set by my colleague the Minister of the Environment (Mr. Parrott) will be met at both facilities. Productivity will be significantly improved. Energy self-generation will be increased and conservation furthered. Also, the company has undertaken to source more than 85 per cent of its expenditures on Canadian goods and services. With today’s dollars this translates to $195 million, the greater part of which will be spent right here in Ontario.
Mr. S. Smith: Mr. Speaker, I would like to ask the Treasurer of Ontario why it was that on Tuesday of this week, after repeated questioning from me regarding his position on the interest rates, which had been increased by the federal government, after similar questions were asked during the week or two before that, and after telling us that his opinion was somehow a secret, he could walk right out of this House and tell the reporters for the Toronto Sun and other reporters from the press gallery.
What kind of contempt is this he has for the question period, where after we have asked repeated questions on a matter of such importance, he can walk right out the door after telling us he has no position to express, and state that we could have an interest rate two points lower or so, because it wouldn’t hurt the Canadian dollar the way Mr. Crosbie seems to think it would?
Hon. F. S. Miller: Mr. Speaker, I’ve always made a point of never saying I was improperly quoted in the press, because it’s very difficult ever to substantiate whether one is or isn’t. I was asked a whole series of questions. If the reporter drew the conclusions from those questions that he showed in the column -- which distressed me just a bit, because he talked in general terms about what I thought would happen to interest rates, what I personally felt were some of the trends and so on -- I’m quite sure I’ve said some of the those things earlier in the House.
If one goes back through Hansard and looks at some of the things I have said earlier on this matter, one will see --
Mr. S. Smith: Don’t play games with me. I’ve gone back through the record.
Hon. F. S. Miller: All right. Then the member will see I have expressed concerns about the interest rate. I have said I did not expect any dramatic downturn, that I did leave the basic policy with the federal government, that I had found six out of nine of my own people who had favoured the federal scene whereas three gave me good reasons to say they had some concern about the present policy, and, therefore, I wasn’t taking a firm Ontario position.
I have also said to this House -- and I think it is on the record; I certainly said this to the press months ago -- that I have great difficulty in rationalizing some of the arguments in favour of importing foreign capital to maintain a high Canadian dollar by maintaining a high interest rate, which in the long run can only mean we have debt payments to make in future days. Those things worry me. A lot of economists argue they are an absolutely necessary price to pay to prevent a sudden bout of inflation. Those are exactly the thoughts I expressed outside, without saying this was Ontario’s position.
Mr. S. Smith: Will the Treasurer stop weaseling around and say definitely whether he wishes to deny the statement attributed to him in the Sun, a statement saying: “Interest rates could drop as much as two points without harming the stability of the Canadian dollar, Ontario Treasurer Frank Miller told the Sun yesterday. Miller said he disagrees with the Bank of Canada czar Gerald Bouey’s reasoning that interest rates here must closely follow those in the US in order to attract loans and maintain the dollar’s relative value”?
Since that is precisely what I was saying in this House when the Premier (Mr. Davis) disagreed with me -- and that may be on the record -- and since he has failed to stand up to make Ontario’s position clear in this regard, even though there is plenty of effort to make Ontario’s position clear with regard to oil prices, will the Treasurer categorically deny this statement or, if he agrees with this statement, will he make perfectly certain that the public knows what our position is and that John Crosbie knows what our position is, and will he explain why he couldn’t have put that very position, and those very statements, in front of the parliamentary committee looking into this matter?
Hon. F. S. Miller: Unlike the member opposite, I’ve never tried to lie my way out of things I’ve said to the press, as he did at Sault Ste. Marie.
Mr. S. Smith: On a point of privilege, Mr. Speaker: The Treasurer, in his attempt now in a most despicable fashion to get out of the fact that he has shown contempt for the House, has attempted to set up and claim that I have lied on some particular matter. I ask him to withdraw that, and to answer the question I asked on behalf of the people of Ontario.
Hon. F. S. Miller: Mr. Speaker, I understand the rules of the House, that I may not use the word lie. I would leave the Sault Ste. Marie issue where it was with the press.
I have never ever, in my dealings with the press, tried to be evasive. I think the press will tell the members that. Generally, in this House, I try to be as direct as I can be. I think the members will agree with that. There are some issues upon which this province feels it does not have authority to be offering contrary advice in the national interest. I can offer private advice, and the member would do the same if he were in my shoes.
Mr. Cassidy: Supplementary, Mr. Speaker: Doesn’t the Treasurer realize the people of Ontario have no interest at all in the results of the academic seminar he’s been running in the finance department, where six say this, three say that and somebody else offers a compromise position? Doesn’t the Treasurer understand that what the people of this province want to hear is that the Treasurer of Ontario understands the needs of this province in terms of interest rate as part of the overall economic policy for Ontario? Will the Treasurer not undertake it now, so we can have clear statements about such important issues, rather than shillyshallying and leaving that vital element up to somebody else?
Hon. F. S. Miller: Mr. Speaker, what I did say, and I think it was quite accurately reported, was that I was quite interested in the last few weeks to note that the Canadian interest rates hadn’t been always going up as some of the American rates were. I made the observation that that intrigued me, because in that same period of time the Canadian dollar had not weakened and, in fact, had strengthened. I think that is historical. I was commenting upon this, because the whole argument of high interest rates has hung on one basic fact: If we dropped our interest rates slightly, equal to the American rate or below it, there would be an outflow of Canadian dollars, a drop in the value of the Canadian dollar, a loss in its purchasing power, and therefore more inflation.
I commented that historically over this period of time, whilst the argument was going on, I had been intrigued to notice that we had seen a strengthening of the Canadian dollar, and that certain agencies in certain areas observing this, such as banks, financial houses and foreign governments, were starting to say that one of the reasons for that strength in the Canadian dollar, flying in the face of a current wisdom, was that it was being considered as an energy currency. That means foreign observers and speculators are starting to say there are certain strengths within the Canadian economy which perhaps have not been acknowledged by traditional economists. I, for one, as an interested observer, made that comment. That is quite accurately reported.
Mr. S. Smith: Supplementary: The Treasurer is clearly now agreeing that what we said would happen was accurate. The difference in the inflation rate between Canada and the United States meant we didn’t have to follow them in lockstep, even though his Premier disagreed with me. Why, in heaven’s name, didn’t the Treasurer make that statement to the Minister of Finance in this country and protect the small businessmen, the farmers, the home owners and the consumers of Ontario from a totally unnecessary federal policy? Why didn’t Ontario go on the record on this matter? Why couldn’t the Treasurer at least have stated that opinion in this House rather than to the press outside this House?
Mr. Mancini: He’s trying to protect his Tory friends.
Hon. F. S. Miller: I am not protecting any Tory friends. It is interesting how quickly the positions of the governments have assumed the same role, because the fact is --
Mr. T. P. Reid: You want to blame Trudeau.
Hon. F. S. Miller: I never blamed him, never. Luckily, there won’t be Liberals in Ottawa and, luckily, there won’t be Liberals in Ontario as long as the honourable member is the leader.
Mr. Deputy Speaker: Order.
Mr. Laughren: Mr. Speaker, since the federal Minister of Finance, Mr. Crosbie, has indicated that he is not going to offer any protection to Canadian consumers in his budget, which will be coming down shortly, will the Treasurer make a commitment to implement some policies to ease the burden of interest rates on home owners, the agricultural community and the small business community in Ontario?
Hon. F. S. Miller: Mr. Speaker, obviously I am going to be awaiting, as I am sure the member for Nickel Belt will be, the federal budget with very real concern.
The very essence of the Ontario energy policy, as he will recall, was aimed at softening the effect upon the consumer in whatever interim period is required to allow the increased cash flows that are generated by increased oil prices to be properly reinvested in security of supply. We argue, and have argued -- I hope with the member’s concurrence, and I hope with the Liberals’ concurrence -- that the first purpose of extra cash flow for roughly the next two years should be the protection of the consumer. That is still Ontario’s position, and on that one issue I think all three parties are united.
We are going to have to wait to watch that budget to see whether any of the actions that are being rumoured take place. One of the great risks we have in a country like ours is that one government can have economic or fiscal policy aimed at tackling inflation, only to see it totally counteracted by a series of independent provincial moves.
Even with the Liberal government in Ottawa, I think my friend will recognize that for the last few years this province and a number of other provinces have tried to synchronize policies, because synchronized policy has a much greater chance of accomplishing the objective of, say, cutting down inflation, than everyone flying off in their own direction, saying, “To heck with you.” We still have to maintain the lowest possible inflation rate, and we have to protect the consumer. If the consumer isn’t protected, he quite properly is going to demand more salary, which, in a period where energy is the basic spark, cannot be recovered within the system without causing inflation. I think the honourable member would agree with that.
EAST OF BAY PROJECT
Mr. S. Smith: Mr. Speaker, a question for the Minister of Government Services: On the matter of the properties known as the east of Bay properties, would the Minister of Government Services not agree with me that a bus terminal in a large metropolitan area like Toronto would be most intelligently located close to the train terminal so we could have a transportation centre for those who might want to transfer from one to the other or make various kinds of travelling arrangements? Surely the minister would agree with me that the middle of the most congested area in town is no place to be building a bus terminal and to have buses coming in and out in the middle of rush hour and so on. Why, therefore, is he prepared to consider a bus terminal as a major use for those very important properties when those properties more properly should be used for a combination of office space and particularly for low-cost housing? That would be a sensible way for the utilization of the available space. Isn’t it a dumb place for a bus terminal?
Hon. Mr. Wiseman: Mr. Speaker, we have had preliminary discussions with the bus company. As I said last night in the late show, as well as yesterday afternoon, if they are interested in the land and in giving us office space above that particular bus terminal -- if it goes there -- we will negotiate for that. But anything to do with building, if the city will allow it to go there, will have to be discussed with the city and a suitable arrangement worked out.
I don’t think it is up to me as Minister of Government Services to say this is the place it should go. They are businessmen. If they want to go there, they have to work out those arrangements with the city; that is, if we are prepared to sell it to them -- and at this point we haven’t made that decision.
Mr. S. Smith: Since the province owns the land, why would the province contemplate selling it for the purpose of setting up a bus terminal if it is a dumb place to set up a bus terminal? Why would Ontario not use the land for intelligent uses that would be in keeping with the proper planning of the city of Toronto? Why would it not use it to meet the obvious need for low-cost housing as well as for mixed uses, which are appropriate for a downtown location of that kind, including some office space and possibly a YMCA if that happens to be thought an appropriate matter as well?
If a bus terminal should not be put there, why in heaven’s name is the government going ahead with plans that will end up with a bus terminal there?
Hon. Mr. Wiseman: I don’t think the honourable member heard me. We are not going ahead with the plans. We have just had preliminary discussions with these people. Preliminary discussions do not mean we plan to go ahead with it.
As I said before, the city would have its input and they would have to clear all the hurdles with the city. Any sale of the land, if we ever decided to sell it to them, would have a rider on it that they had to do this, and it wouldn’t be the responsibility of my ministry.
Mr. R. F. Johnston: Supplementary, Mr. Speaker: I find it hard to understand why the minister continues to raise the red herrings of the bus terminal and the YMCA. The minister raised it; not myself. The minister’s reason for not answering why he will not enter into planning discussions with the city of Toronto leads me to presume the government has already decided what it wants to do with that land: It wants to go back to the pre-1973 plan to build a major government complex in that area. If it is the case, why are the two towers that are already in the city’s plan for Wellesley Street not sufficient for government expansion on that site?
Hon. Mr. Wiseman: As I mentioned last night and yesterday afternoon, Mr. Speaker, we have put together this parcel of land for government use. The government has its priorities at this time as to what buildings it should put up. As Minister of Government Services, I feel we have to look at the long-term needs of that property for the province; that is why housing at this time doesn’t fit into our plans.
Mr. S. Smith: Can the minister explain why his predecessor said to this House on November 16, 1978, “When this work has been completed I will be responding to the mayor of Toronto” -- completion of the work was only a matter of a few weeks away at that time; that was a year ago -- and yet the mayor never heard from him nor from his successor in this role?
Why has the minister shown such disdain for dealing with municipal officials if he hasn’t even contacted him since then? He finally had to get hold of the minister on the matter. Why does the minister feel, in these days of so-called shrinking government, that he is going to need more and more office space to have to use that entire site for the growth of the government when there is such a crying need for low-cost housing in that part of Toronto?
Hon. Mr. Wiseman: At the present time we own about two million square feet of office space in the downtown core. We rent approximately the same. At this time we can talk about the need for senior citizen apartments, and there is a need for that as well.
We are in almost a nil position as far as office space in the downtown core is concerned. I think we will be needing this space for ourselves in the near future, whether we do it in conjunction with something else that goes on to that site, like a bus terminal or something else, to give us the space we feel we need. We will have to look at that, but we need it for our own use at this time.
Mr. Cassidy: Supplementary, Mr. Speaker: Would the minister undertake to open up the planning process for the block east of Bay Street so the public, the city and each of the people in the whole area can be involved in the process, rather than continuing the Byzantine secretiveness which has marked this project up until now and which is comparable to the way the ministry is planning the Cartier Square block in Ottawa?
Hon. Mr. Wiseman: As I mentioned before, Mr. Speaker, we have this block of land, and we’d never again assemble a piece of land like this for the province’s needs for some time in the future. I am convinced, if the mayor were to look around, he could find property for his housing somewhere else.
The honourable member compared it to Cartier Square in Ottawa. I would just let him know that the mayor, in an article on August 8, said she was in agreement with the site, and she hoped the construction would start immediately. The honourable member says we didn’t let them know; they knew, and the Ottawa commission knew as well.
GAS AND OIL SUPPLIES
Mr. Cassidy: Mr. Speaker, I have a question of the Minister of Energy. With respect to the plight of the independent oil contractors who provide heating oil for 40 per cent of the homes in Ontario, can the minister say what action the government intends to take to protect these independent oil dealers, who now are finding their margins are being squeezed by the multinational oil companies and in certain cases having their supplies cut off completely? Does the government intend to intervene in any way to prevent these independents from being squeezed out of the market entirely over the course of this coming winter?
Hon. Mr. Welch: Mr. Speaker, I have no concrete evidence that would support the allegation of the honourable member that the independents are being squeezed out of the marketplace. The honourable member will know, if he has had a chance in the last little while to review the Isbister report, in so far as this whole area is concerned, that particular part of the report recognized the importance of the independents to the province and to the whole marketing of those particular products.
I am in the process of meeting with presidents of the various oil companies. Indeed, during those discussions not yet completed, I am raising this very question of the position of independents in so far as their own relationships are concerned. I have been assured by those with whom I have met until now that they certainly plan to honour all contracts which they currently have with such individuals.
Mr. Cassidy: Was the minister not aware that the big multinational companies, not content with the extra amounts of money they are going to earn because of the increase in heating oil prices from 70 cents to about $1.30 a gallon over the next three years, have already begun to pressure the independent suppliers in the eastern Ontario area and squeeze their margins for this winter by four cents to five cents a gallon so that some of them expect to make no profit at all?
Is he also aware that some of these independents are not having their contracts renewed, although existing contracts are being honoured? Will he investigate the case of one particular independent, whose 300,000-gallon-a-month supply is being cut to zero at the beginning of 1980 by one of the multinationals? Will he take that information in confidence?
Hon. Mr. Welch: If I could speak to the third part of the question, there is no question I certainly would be very pleased to do so if I had that information. In fact, it would be helpful if I had some specific information such as that to follow up.
I can only repeat that, in my discussions with presidents and chief executive officers of oil companies with whom I have met up until now, I have been assured they are honouring their contracts. The difficulty may be with respect to the definition of the arrangements some of these independents have had with their suppliers.
To speak to another point raised by the honourable member, I have made it quite clear we agree with that recommendation in the Isbister report, which sees and attaches some importance to the involvement of the independents in the marketplace of this province.
Mr. J. Reed: Supplementary, Mr. Speaker: Would the minister be prepared, on completion of his consultation with the oil companies, to make a public statement about the government’s position on this matter, which may be of great concern to those independents?
Hon. Mr. Welch: I would be prepared to report more fully on that after I have completed those meetings, Mr. Speaker.
Mr. Cassidy: Since the minister says he’s talking to the large multinational oil companies and on the assurances he has had from those companies, will he say what contact he’s had with the independents, some of whom fear to raise the issue publicly in case of having further restrictions put on their supplies?
Would the minister not agree that when those independents have month-to-month or year-to-year contracts, it’s very easy for the multinationals to cut them off unless there is protection and intervention from the government to keep those independents in business?
Hon. Mr. Welch: I would be very pleased to meet with anyone who wishes to meet with me. I am just a little concerned about the qualification with which the honourable member wraps this question up; in other words, that there might be some fear they would want to meet with me. I would hope that’s not the case. In fact, I would be very pleased to include representatives from the independent sector as part of those meetings.
I do repeat, for the benefit of the House, the question with respect to the relationship between companies and the independents has been raised at all of these meetings. I have had that assurance and on the basis of the questions that have now been directed to me by the honourable member, I will perhaps have some specific examples to follow up on.
I might say I am not aware, on the basis of any mail I have read within the last while, that anyone has had any hesitation in wanting to speak to me about this particular matter.
Mr. Cassidy: Mr. Speaker, I have a question for the Minister of Industry and Tourism. Can the minister say how it is that he could tell this House a couple of days ago that the job opportunities for Ontario, offered in connection with the new federal contract, are “serious offsets, firm offsets and firm commitments,” when there are so many unanswered questions surrounding this particular contract to the point that nobody else in government, in the Department of National Defence, or in the industry, is in a position to make the same kind of assurances?
Hon. Mr. Grossman: I must say, Mr. Speaker, I was providing that information on the basis of all our conversations with the federal government. I must tell the honourable member that, in view of the developments of the last few days, we will be back on the phone today to try to clarify the information they have been providing. Of course, I can only report to this House with regard to the information with which we have been supplied by the federal government from time to time.
Mr. Cassidy: When the minister spoke in the House a couple of days ago and was so sure about the commitments which he is not so sure about right now, was he aware that at the beginning of November the United States government was telling McDonnell Douglas it should not give credit in terms of job spinoffs in Canada for contracts related to the cruise missile? Was he also aware that in early November Northrop was launching legal action against McDonnell Douglas because it was offering Northrop subcontracts in Canada without authorization? Has the minister reviewed or looked at the confidential report on offsets, or has he reviewed information from the Air Industries Association of Canada, which also long ago was casting the same doubt on what he thought two days ago were firm commitments?
Hon. Mr. Grossman: We were aware of the Northrop potential lawsuit. My industry specialists -- and I do have some of the very best people who worked in the industry and who now work in my ministry -- were monitoring the situation, and I believe they had fairly full and complete access to all the federal information from time to time.
Mr. Laughren: Supplementary, Mr. Speaker: I wonder if the minister could tell us, since he made those very firm statements on Tuesday, if, when he made those statements, or even now, he had read the confidential document which everyone seems to have read at this point. Has he read the letter from the aerospace industry which expressed the very grave concerns referred to by my leader? Would he tell us if, when he was talking with the federal government, there was any discussion of not only the number of jobs that would be gained in Ontario, but also the kinds of jobs and the kind of technological knowhow, that would be gained by Ontario in this aerospace industry if and when the new fighter aircraft contract was awarded?
Hon. Mr. Grossman: Mr. Speaker, I myself have not read the confidential document the member is referring to. I believe that among the various documents and materials I have read on the subject the letter he referred to from the air industry has crossed my desk, and I have seen that. There have been a great number of documents flowing across my desk on the subject, and I have read a great number of them. I can’t be sure specifically with regard to a lot of documents.
I don’t believe I have read in depth the confidential document he is referring to, although I believe my staff has. I would have to check that, in fairness, to make sure that is an accurate answer.
The last question is fairly straightforward. As I indicated the other day, my people have been working closely with the federal government -- on the basis of the information they have been provided and on the basis of the information we have obtained -- to ensure that we do get an adequate share of the offsets for Ontario industry. The offsets, as they appeared right up until this moment, seemed to be such that we would get a very good share of the offset business and that we were going to do well.
I acknowledge that it appears from what I read in the press the last few days that some of those things may now be questioned. But I must emphasize to the member that we went through this, we have monitored it, we have asked difficult questions. I believe we have received fairly direct answers, and we are proceeding on the good faith of the federal government providing us with that information.
I also want to clarify that I have no reason, other than press reports and some things that have been raised here, to begin to question that. In other words, I am responding to what I see and read outside of the correspondence between my ministry and the federal government. Nothing has occurred in our relationship with them that would lead me to believe that is coming apart.
Mr. Cassidy: Since the firm commitments the minister thought Ontario had from the federal government are clearly -- and he acknowledges it -- no longer as firm as all that, what actions will the minister take now? In particular, what consultation and action will the ministry have with the air industries people themselves? They have been sceptical about the industrial spinoff in terms of jobs and technology for Ontario all along.
Hon. Mr. Grossman: In our dealings with the industry in Ontario -- and I have some of the very best people in that branch of my ministry -- we did not get the impression from them that they were dissatisfied with the offset provisions. If that has changed, I am confident my staff would have been informed by the industry about that by now.
The second point I would like to make is that I am not indicating I have any information that would lead me to believe that the commitments given to me, and which I reported faithfully to this House a couple of days ago, have fallen apart. But rather than blindly and blithely sitting back in the face of some questions being raised legitimately through the media and by the opposition here, I can assure the leader of the third party that I am not going to ignore them. I have already asked my staff to begin to get back on the phone and have some direct and hard discussions to try to clarify the situation for me.
ST. ANDREW’S DAY
Hon. Mr. Grossman: Mr. Speaker, just before I resume my seat, I might acknowledge that today is St. Andrew’s Day. As the representative for a riding designated St. Andrew-St. Patrick, I wanted to acknowledge it. I also want to thank one of my colleagues, unidentified in the front row, who has dressed in accordance with St. Andrew’s Day. Members may be able to spot the colleague I am referring to. I asked him to do it for me.
Mr. Peterson: The Treasurer looks silly when he wears that jacket. He should go out and change it.
Hon. F. S. Miller: I’m wearing the jacket, my honourable friend, because it’s St. Andrew’s Day. Somewhere in the process someone stole it from my office this morning --
Mr. T. P. Reid: Probably his wife.
Hon. F. S. Miller: -- therefore, I had to put on my other one.
Mr. Deputy Speaker: That’s a very good answer to the question.
Hon. F. S. Miller: As a Scot, I wear it on St. Andrew’s Day. We who are Scots are proud of this day, and we should show our interest in our ethnic and cultural background.
Mr. T. P. Reid: Mr. Speaker, in the absence of the Premier (Mr. Davis), the Minister of Natural Resources (Mr. Auld) and the Minister of Northern Affairs (Mr. Bernier), I would like to address a question to the Treasurer in regard to one-industry communities, and Atikokan in particular.
Is the Treasurer aware of whether the Minister of Natural Resources has had meetings with either Caland, Inland Steel or Steep Rock Iron Mines with a view to ensuring that the mine at Steep Rock Lake is completely mined out?
Second, has the so-called cabinet committee on mining communities met on this particular issue?
Third, what does the Treasurer intend to do in view of the lost revenue, not only to the provincial coffers, but also to the taxpayers of Atikokan?
Hon. F. S. Miller: First, Mr. Speaker, I haven’t had any knowledge of the discussions between the Minister of Natural Resources and the companies. Perhaps the provincial secretary of that policy field may have -- he’s nodding his head, saying he has no knowledge.
Second, I can assure the member that when, as Minister of Natural Resources, I was chairman of that committee, there were discussions about those specific communities. Obviously, at that time their mines had announced the phasing out. I think the member will recall, I visited Atikokan once or twice, met with the union on one occasion and the town council on another occasion. At that point we provided some moneys for their industrial park, commission study, et cetera, to try to help them diversify a bit.
I’m aware of those things from my own experience. As to more recent ones, in terms of whether the committee has discussed it recently, I could not answer personally, since I have not seen a minute on it.
Mr. T. P. Reid: In 36 years, one of the government’s failures over there is its dealings with northern Ontario and protecting those communities up there. What is the Treasurer going to do to ensure the tax base of that town so that the people who can and want to remain there, to work and live there, are not going to be burdened with a tax rate that is so crushing it will force them out because they won’t be able to pay for the services that are going to be provided? What policy does the Treasurer have to help these one-industry communities where the industry is being lost?
Hon. F. S. Miller: I’m sure the honourable member, when he was sitting with us the other day listening to the discussions of the Northwestern Ontario Chamber of Commerce, recognized that while there were many problems in the north, that group -- which represents the business interests of the area -- came as close to being congratulatory and generally supportive as any group we see.
Mr. T. P. Reid: They’re more supportive of northern Ontario than is the Progressive Conservative Party.
Hon. F. S. Miller: The problems are extremely complex and difficult to resolve. I’m sure the honourable member knows that. The fact that one finds, through the grace of God, a good mineral deposit in a community like Atikokan, and therefore a community is caused to be formed basically because of that deposit, at the same time almost assures its eventual demise as a mine.
If the member will recall the history, that’s one of those few cases -- unlike the ones in the riding of Sudbury East anyway -- where there has been a discontinuation of mining operations for economic reasons. One can safely say that 35 years was the predicted span of the operations in Atikokan, if I recall the figures; the day the community started, that was understood. I’m sure we have now totally and properly changed our attitudes towards the north. Once communities are formed with the kind of heart and spirit that Atikokan has -- and it has more spirit than many places I have visited; I am sure the member would recognize that -- one must find ways to support them.
For example, we looked at the Bending Lake proposals. Does the member recall that? This province, at that time, was willing to support the Bending Lake proposal, with a slurry pipeline costing a fair amount of money, should that be an economically feasible alternative; that is, instead of moving a new community to Bending Lake, one brought the ore to Atikokan. Currently the economics of iron ore are such that it is not feasible; but it is still a possibility. I believe at the same time the Ministry of Transportation and Communications even started building the road that would generally serve that area.
So should the economics change, we could see that happen. I guess the Minister of Industry and Tourism (Mr. Grossman) would be in a better position to talk about this, but we have been carrying on discussions with a number of companies that might come there. For example, we have looked at Pluswood -- which I guess is the remaining major industry in the community, apart from the Ministry of Natural Resources itself -- and the operations of some of the Domtar facilities in the Sapawe area. We are trying to make sure those remain viable. It is extremely difficult to find an alternative to the basic reason for the creation of some of the northern communities.
Mr. Foulds: Supplementary, Mr. Speaker: Since it is not through the grace of God that Ontario now imports 58 per cent of its iron ore from outside the province, can the Treasurer tell us what steps he is taking to ensure that the three big steel producers in Ontario adapt their processes to use the kind of iron ore we have in northwestern Ontario? Can he tell us if he has access to the study those three producers did about the iron ore deposits in northwestern Ontario? Why hasn’t the Treasurer insisted they develop the deposits at Bending Lake and Lake St. Joseph while Atikokan was running down?
Hon. F. S. Miller: The fact remains that Canada is a net exporter of iron ore; I think the member would agree with that. The member knows that a fairly comprehensive study of potential iron ore sites in northwestern Ontario was carried out. I believe it showed the Lake St. Joseph area was potentially the richest area -- also some of the ones in the Nipigon area, if I recall correctly. It showed certain economic priorities in terms of which would be the most likely to succeed.
Those deposits, as I recall, are relatively small in most cases -- relatively low-grade and fairly costly to transport. So it is not as simple as one might want to make it look.
The member knows that various mills have capabilities to handle various types of ore and are predicated upon them. In fact, we underwrote experiments on the very ore in this gentleman’s riding to see if it couldn’t be used elsewhere. It fell apart.
POLICE ACTIVITY IN LABOUR DISPUTES
Mr. Foulds: Mr. Speaker, I have a question for the Attorney General. How can he, as Solicitor General, have the gall to make the statement he did yesterday that police have not been used as strikebreakers? How can he say the police do not treat alleged offences on picket lines differently from those in other circumstances, when sworn testimony by Constable Woodland of the Fort Frances police at a show-cause hearing for Norman Lyle Meyers on January 19, 1979, indicated the crown attorney specifically instructed the police attending the Boise Cascade picket line to treat the strikers differently from other alleged offenders?
Hon. Mr. McMurtry: If it’s a matter that was drawn to my attention some time ago, I can’t be certain it’s the same reference. I looked into the matter and satisfied myself that the police officer had received no such instructions. I think the police officer later confirmed that. I think there was some confusion over what was said in the transcript.
I’m sorry I’ve forgotten some of the names, but I believe it’s a matter we’ve already looked into. I stand by what I said yesterday, as being absolutely factual.
Mr. Foulds: Supplementary: Is the Solicitor General saying to me that Constable Woodland contradicted to him his sworn testimony given before the show-cause hearing on January 19? May I remind the Attorney General/Solicitor General of the following exchange?
Mr. Wolder, who was the lawyer acting on behalf of Mr. Meyers: “We have a man here of favourable reputation. It’s a property offence. Why wasn’t he released on his own recognizance in the first place?”
Answer: “Because it’s our instructions from the crown attorney, Mr. Saranchuk.”
Question: “And you have those instructions for all charges arising out of strike-related incidents?”
Question: “So you are saying police constables now are instructed not to use their discretion?”
Answer: “That’s right.”
Question: “So the usual practice, constable, on charges other than strike charges, is the accused is released on his own recognizance?”
Answer: “Prior to the problems we have, strike-related problems, yes.”
Is the Solicitor General saying the constable contradicted that testimony he gave under oath?
Hon. Mr. McMurtry: Mr. Speaker, I want to check the matter, the transcripts I had, to confirm we’re talking about the same matter. I’ll do that and I’ll report back the results of our investigation.
I believe it’s the same matter, but I would like to confirm that. I will be happy to deal with that in the House, or I’ll be happy to deal with it in the Solicitor General’s estimates that are currently in progress.
Hon. Mr. Snow: Mr. Speaker, just briefly, a few days ago the member for St. Catharines (Mr. Bradley) asked me questions regarding certain actions on construction projects during the Mississauga evacuation. I would like to say the answer I gave the other day was absolutely correct. I would like to expand on it.
The contract on highways 5 and 403 was closed down during the evacuation. There was no construction work going on at that location, although the paved detour was in effect prior to the closedown.
On the highway 5 contract, west of highway 25, there was certainly no holdup in traffic there. This job was practically complete prior to the closedown and only minor trimming on the road sides and whatnot were in progress.
On the Trafalgar Road-Queen Elizabeth Way contract, there was absolutely no holdup of traffic there. The contractor was working on some off-road work, but materials were not available for the contract because of the evacuation.
On the Queen Elizabeth Way-Cawthra Road interchange contract, this job was closed down from November 11 to November 13 because of the evacuation. The contractor worked from November 14 to November 16, but this did not affect traffic as the Queen Elizabeth Way itself was closed down from Trafalgar Road to highway 27.
On the highway 401 contract, from Mississauga Road west to Trafalgar Road, the contractor did do some work during the Mississauga evacuation. The contractor’s operations were restricted to working ramps free of traffic. Consequently, the contractor’s paving operation was shut down as the delivery of asphalt would have impeded traffic on highway 401.
One thing I will say is that at the request of the police, the new north to eastbound ramp at Trafalgar Road, which is not paved, was open to traffic on the granular base and was maintained in an excellent condition by the contractor during the problem. There was no delay of traffic and no cutting down of the number of lanes available on that section of highway.
Mr. Bradley: Supplementary: In relation to highway 401, there was an additional lane that might have been used at the time, when all the traffic was being channelled north of Mississauga and highway 401. One of my questions to the minister is would it not have been possible to utilize one of the lanes that had not been paved at that time? I’m talking of the one immediately after Trafalgar Road.
The other thrust of the question, the initial part of the question which the minister has not answered, revolves around how the Burlington Skyway could be tied up, once again, in the middle of the Mississauga crisis when the traffic was held up all around Mississauga -- and, we recognize, justifiably so. How could his crew still tie up the Burlington Skyway with routine maintenance?
Hon. Mr. Snow: Mr. Speaker, it is my understanding absolutely no routine maintenance that did not have to be done was being done on any of those highways during the period of the crisis. When the member says the Burlington Skyway was blocked off, I don’t think that is correct.
Mr. Bradley: I drive over the Burlington Skyway and it was.
Mr. Deputy Speaker: Order. I think the honourable minister, when he started, said he was verifying the answer to a question. I’m going to add two minutes to the question period.
Mr. Kerrio: I have a question of the Minister of Industry and Tourism, if I may. Would the minister consider the request of the Niagara Falls Chamber of Commerce for accommodation in the new information centre at Niagara Falls for the various tourist agencies to give Niagara information to 16 million visitors who come to that part of the peninsula?
Hon. Mr. Grossman: Yes.
Mr. Kerrio: Thank you very much, Mr. Minister. I wanted to raise a supplementary and I certainly should stop while I’m ahead but I would like to pose this particular question to the minister.
In putting up his information centres across Ontario, is the minister giving consideration to local interest groups, such as chambers of commerce and information centres, for accommodation in the various places? The problem is that if the information centre is removed from the centre of town, or the centre of interest, the people might be directed out of a given area. I wonder if that kind of consideration is given most information centres.
Hon. Mr. Grossman: Yes. Let me clarify that most of our 37 information centres are being rebuilt on exactly the same sites as the previous ones.
Secondly in the case of Niagara Falls, we have to find a new site. That has been done and essentially agreed to by the municipality.
Thirdly, in each case we’re going to have self-service kiosks. In the kiosks there will be space for rent, as it were, on the boards listing all sorts of things. The local chamber of commerce can make an arrangement with us, of course, for themselves, for other industries and for other tourist attractions to try and focus people back into or towards those particular attractions, those in the local area they think are worth promoting through our self-service kiosk.
If I might just clarify something: In each case where we’re building a tourist information centre, there will be adjacent to the tourist information centre a self-service kiosk as well.
Mr. di Santo: In the same vein, has the minister given any consideration to building the convention centre on the Downsview site?
Mr. Deputy Speaker: I think that’s out of order.
Mr. Swart: My question is to the Minister of Intergovernmental Affairs. Does he recall that two weeks ago I urged him to give fast and favourable consideration to the $1 million request from the Red Cross for aid to Cambodia?
Subsequently, I wrote a letter to the Premier (Mr. Davis) urging speed on that decision. In view of the fact the minister has as yet made no commitment to the Red Cross as to what aid he is willing to give, even though the plight of the Cambodians is screaming at us through all the news media, can’t he now come to a decision on this urgent issue and tell the House today what be is going to do?
Hon. Mr. Wells: Mr. Speaker, we are still reviewing it. I think it needs to be said, first of all, that the people of Ontario are contributing about $7 million to the plight of the people in Cambodia. How are they doing that? They are doing it through the $15 million the government of Canada has pledged to Cambodian relief, which is raised, by taxes, all across Canada. I think first and foremost in these international matters, that is from where people would expect the support should come.
The Red Cross has asked us, in round terms, for $1 million. We are looking at assisting certain medical teams and that discussion is still going on. I don’t have an answer yet, but I just think it should be emphasized that the people of Ontario are contributing $7 million in round figures to the relief in Cambodia.
Mr. Swart: By way of supplementary: May I ask the minister, does he not realize that although the International Red Cross has asked for something like $251 million they have as yet received only about $10 million of that and they only have enough money on hand to carry on the aid for another 10 days or two weeks? They have not yet got the necessary medical supplies or personnel to even touch the problem in the refugee camps, let alone Cambodia itself.
Doesn’t the minister feel there is some real urgency for this and he should take some initiative in his government to do something in this matter?
Hon. Mr. Wells: I think I have indicated we are reviewing this with some urgency. If the honourable member would talk to the Red Cross, they wouldn’t put the matter quite the way he is putting it and the record of this government is it has never shirked its responsibilities, even though, first and foremost, we felt basically a lot of these are federal responsibilities in this country. The federal government, on behalf of all Canadians, acts in international matters. In other areas we have certainly helped, as we did just recently with the help in the refugee camps, where the boat people are located. We presented a cheque to Red Cross for $315,000 just a couple of weeks ago.
The matter is under consideration; we are looking at supporting medical teams and we will have an answer shortly.
Mr. Nixon: Mr. Speaker, I would like to direct a question to the policy secretary in the social field, often referred to as the super-minister for social policy.
Since the strike in the Brant-Brantford school system is now in its 18th day, is there any policy, or preparation, for action to be taken by this House so the matter can be brought to a conclusion before the Legislature adjourns for Christmas?
Hon. Mrs. Birch: Mr. Speaker, I am given to understand a mediator from the Education Relations Commission met with both sides yesterday and negotiations took place. The mediator is meeting again today with the negotiating team. Both sides are aware of the interest of the public and the honourable member in this matter and hopefully it will soon be resolved.
Mr. Nixon: Supplementary: I certainly thank the minister for that report, and it is well known in the area that negotiations are continuing. It is certainly regretted, and I am sure the minister would agree, that a conclusion of the strike and settlement has not been possible. Is she not aware, however, that one of the problems is that the salary matters could very well be sent to arbitration, with agreement by both sides, but other matters dealing with the organization and operation of the system cannot be sent to arbitration because the school board objects?
If that is so, would the minister not, in her policy position, consult with the Minister of Education (Miss Stephenson) and the Premier, so those matters might be sent to a special committee established by the government, so arbitration on the salary matters could go forward and the strike could come to an end with a clear understanding on both sides that the matters in contention, dealing with the operation of the system, would be dealt with in a fair, equitable and, I hope, expeditious manner?
Hon. Mrs. Birch: I am sure the mediator is well aware of all of those particular concerns and, hopefully, that is exactly what he will be dealing with when he meets with the negotiating teams today.
Ms. Bryden: I have a question for the Minister of Labour. In view of the fact the strike at Blue Cross is now in its tenth week and the company has refused to bargain since the strike began, will the minister tell us what efforts his officials are making to bring the parties together in order to enforce the law about bargaining in good faith and to end this distressing strike by employees trying to obtain a first contract?
Hon. Mr. Elgie: I am sure the member is aware the mediation staff in our division remains willing and eager to participate in any mediation endeavours at any time. If the member has reason to believe intervention by that staff at this time to facilitate further meetings would be helpful, there is no problem at all in asking them to do so. As of the present moment, we have had no immediate indications from either party that there are any prospects for such a meeting, but if the member has reason to suspect now is a good time for further negotiations to commence, we will be glad to arrange it.
Ms. Bryden: Supplementary: I visited the picket line at Blue Cross this week. They indicated they were willing to have a mediator come, so it seems to me it is up to the ministry to go to the company. They told me the main issue in this strike was the question of union security for a newly certified union. I would like to ask the minister, will he not change his views and commit himself to bring in legislation as early as possible next session on union security to avoid the necessity for --
Mr. Deputy Speaker: The question has been asked.
Hon. Mr. Elgie: The member asked that before and my answer remains unchanged. It is a matter which is under consideration and no commitment can be given at this time.
Mr. Mancini: I have a question for the Deputy Premier and Minister of Energy. It has been nearly four years now since I first brought to the House the plight of the Ontario greenhouse farmers, which has given the government ample time to take a direct course of action to assist the greenhouse growers of Ontario.
In view of the fact this has not happened, could the Minister of Energy inform the House if he will make representation to the Ontario Energy Board on behalf of the Ontario greenhouse farmers that they should not be charged the new 1980 prices for natural gas and that their fuel bills should be frozen at 1979 levels, the difference being subsidized by the government of Ontario?
Hon. Mr. Welch: The honourable member certainly knows it would not be proper for the minister to intervene with respect to any particular group of users. The industry to which he makes reference has an association. If they feel they want to make some representations, particularly as they relate to rates, they are at liberty to do so, I suppose, when any rate applications are brought before the board.
The honourable member has perhaps overlooked the fact the Ontario Energy Corporation is involved now through the agripark development to see what the possibilities are of recovery of some of the heat from some of our plants and there is experimentation in this line. This doesn’t speak to the particular problems greenhouse people will have at their locations now. The member for Kent-Elgin (Mr. McGuigan) made that point at the standing committee on general government when we were going through the estimates of the Ministry of Energy last Wednesday.
I can say I would be very happy to continue discussions with the honourable member to see in what ways the Ministry of Energy can be of more particular assistance with respect to the concerns he has expressed. No doubt, the Minister of Agriculture and Food (Mr. Henderson) would want to be involved as well.
STANDING RESOURCES DEVELOPMENT COMMITTEE
Mr. Yakabuski, on behalf of Mr. Villeneuve, from the standing resources development committee reported the following resolution:
That supply in the following amounts to defray the expenses of the Ministry of Industry and Tourism be granted to Her Majesty for the fiscal year ending March 31, 1980:
Ministry administration program, $3,694,100; policy and priorities program, $2,158,000; industry development program, $19,669,000; tourism development program, $15,524,000; Ontario Place Corporation program, $1,941,000; and industrial incentives and development program, $21,635,000.
STANDING GENERAL GOVERNMENT COMMITTEE
Mr. McCaffrey from the standing general government committee presented the following report and moved its adoption:
Your committee begs to report the following bill without amendment:
Bill 164, An Act to amend the Assessment Act.
Ordered for third reading.
Hon. Mr. Wells moved that the standing resources development committee be authorized to meet on the evening of Monday, December 3, to consider Bill 24, An Act to amend the Environmental Protection Act, 1971.
Motion agreed to.
Hon. Mr. Wells moved that the standing administration of justice committee be authorized to meet on the afternoon of Wednesday, December 5, 1979.
Motion agreed to.
ANSWERS TO QUESTIONS ON NOTICE PAPER
Hon. Mr. Wells: Mr. Speaker, I wish to table the answers to questions 360 and 364, inclusive, standing on the Notice Paper.
ORDERS OF THE DAY
The following bill was given third reading on motion:
Bill 164, An Act to amend the Assessment Act.
CONCURRENCE IN SUPPLY
Resolution for supply for the following ministry was concurred in by the House:
Ministry of Housing.
House in committee of supply.
Resumption of consideration of the estimates of the Ministry of Treasury and Economics.
Mr. Deputy Chairman: The honourable member for Nickel Belt (Mr. Laughren) had been speaking at the last session. I believe he was waiting for a reply from the minister.
Hon. F. S. Miller: First, I assume he has completed his introductory comment. May I ask, Mr. Chairman, if I understand my two critics correctly, that looking at my estimates in general they prefer not to stick to item and vote numbers? In other words they want to have a free-ranging discussion in the time period so they do not have to be pulled up by the chair in the event they stray from a particular vote and item? Is that what I understand they would like to do? It certainly is acceptable to me, because in this particular ministry, unlike some others where programs are clearly defined, one may wish to talk about one topic that appears in two or three votes or may appear to be applicable to two or three votes.
Mr. Deputy Chairman: Mr. Treasurer, I want to be reasonable with the other members of the House who may not be here. As you know, we have allowed pretty wide-ranging comments on vote number one, but after vote number one it generally happens that we move along more quickly. I shouldn’t say we like to move, but I am glad to hear your suggestion.
Mr. Peterson: We have had brief discussions among ourselves. I think my colleagues agree, and I think my friend from Nickel Belt agrees, we are just going to have a wide-ranging discussion; we could stack all votes and do them all at the end; we won’t address our minds to specific votes until the very last moment.
Hon. F. S. Miller: Mr. Chairman, if you wish to put the general discussion under vote number one for the convenience of the chair, that’s fine by me.
Mr. Deputy Chairman: All I am saying is we have spent a great deal of time on vote number one. I presume that’s what you want to do, but at the same time I have got to be reasonable with the other members who are not here now and who may want some time to discuss some other particular items.
Mr. Peterson: We are certainly happy. I know I am and I think my colleague from Nickel Belt is, as is the Treasurer. Any other members of the House who want to participate can do so at any time. I frankly don’t detect all that much interest in it. It’s a tragedy that we are the only ones interested in the fiscal integrity of this province. We have certainly never seen that kind of concern demonstrated by the government at least; however, we will do our best to bring responsibility back to this faltering government.
Mr. Deputy Chairman: I think we have the tone the committee wants to follow.
Hon. F. S. Miller: Mr. Chairman, in trying to answer the opening comments of my two critics I may wander a bit or I may be a bit repetitious, but I will try to cover the points they brought up. First, I was quite happy with their respective comments. I recognize the basic function of critics is to criticize and to point out things that can be done better. I would say that having done that, I sensed both of them were quite fair in their approaches. I take their criticisms as being sincere ones rather than the kind one senses are sometimes offered the House, that is more for the record than for substance.
Mr. Laughren: We didn’t even comment on your sartorial habits.
Hon. F. S. Miller: It only happens once a year.
Mr. Laughren: That may be why they don’t take you too seriously in Ottawa.
Hon. F. S. Miller: It’s true; it’s an indication of my thrift. May I then look at the comments of the member for London Centre?
Mr. Peterson: The radical middle in London.
Mr. Laughren: The soft under-belly of London.
Hon. F. S. Miller: Yes. The first thing of interest he touched upon, apart from his comments about the general accuracy of the figures being given out by the province, and the election giveaways of 1975 and 1977, and ambiguity on interest rate policy, all of which have been touched upon at other times, is the discussion about the Lambert report and the approach in Ottawa to the control of spending. The question implied, I assume, that that kind of an approach was the best to use in the province of Ontario. We have followed the Lambert report and have reviewed it, obviously with great interest. I think that interest to some degree is substantiated by the fact a senior deputy minister is going to Ottawa, is being seconded to the very group implementing the Lambert report, and is bringing with him the expertise he had in Ontario as chairman of management board and in other positions, General Anderson.
Mr. Peterson: Who is that?
Hon. F. S. Miller: He is being seconded to Ottawa. I think the press release stating that just came out within the last day.
Mr. Laughren: Is he a general?
Hon. F. S. Miller: Yes, he is a general. In any case, I suppose he is being paid for by Ottawa -- I don’t go into those details -- but he is representing, in effect, the interests of Ontario and the expertise that Ontario has gained in the fiscal process.
I would think perhaps that is a compliment to the government of Ontario and its fiscal management, because one of the comments I recall from the Lambert committee, or the Auditor General of Canada, was that the federal government was totally out of control from a spending point of view.
Mr. Peterson: It was Macdonell who prompted the Lambert commission.
Hon. F. S. Miller: Yes, and through that the commission which looked at the mechanisms of controlling expenditures. It may be the feeling of my opposition critics that is applicable in Ontario, but the fact is that Ontario was perhaps well ahead of the federal government in its recognition of the need to bring the spending of government under the control of the Legislature and of the politicians, rather than letting the process itself continue to proliferate.
If I recall the gist of Mr. Macdonell’s comments that was really it, that the cancerous growth of the bureaucracy in Ottawa appeared to be going unchecked by any form of control. Any of us who have had any contact with it, I think, sense that. Certainly the budgetary deficits of the last few years, during which there have been horrendous changes, would indicate that.
He implied that the federal government should go to a five-year plan, and you talked about that. I would say this: while we deal with budgets one year at a time, the assumption that Ontario doesn’t plan past that, of course, is wrong. You could look back to the budget papers that are attached each year, perhaps to the 1977 budget paper that talked about moving “towards a balanced budget,” where we spelt out the prerequisites. I talked about it in my first budget this year, where I said it required something like a 2.5 per cent spread between revenues and expenditures to achieve a balanced budget and we had the potential to do it.
Ministries have always worked a number of years ahead. Certainly in the Ministry of Health, the minister there couldn’t help but be planning the hospital requirements of the province or the programmatic requirements. We talk about regional priority budgets; we very often phase them over years. The Ministry of Transportation and Communications could easily show you its future planning. But one reason we have avoided going on a five-year record in public is that one of the great advantages of our system of government is we are flexible enough to adjust, either by speeding up or slowing down some of those forward planning projects to meet a given year’s economic state.
A number of the techniques suggested by the Lambert report were talked about the other day when the debate in this House was carried on. I think my friend the member for Oriole (Mr. Williams) spent some time discussing it, and some of his comments are still apropos about management by objective and the policy-program budgeting systems under new names that perhaps were suggested by Lambert.
The fact is that some of those have been used; some of them still are used; and some of them, sadly enough, in our experience often add to the very problem they are trying to solve. They so bottle up the civil service in the planning process that they are planning but not doing. Those of us who have had some experience in private enterprise usually underplan and overdo; if there is a fault of government it is that it over-plans and underdoes.
The bureaucratic process can become so complex through some of these techniques, that may work reasonably well in certain circumstances, that we felt, first of all, Ontario isn’t out of control; and secondly, some of these techniques would simply add to the burden of the present bureaucracy. Interestingly enough, the bureaucracy agrees with that. Look back across the record of the years since Mr. McKeough, in the fall of 1975, said, “The growth of government has been so rapid that something must be done. We physically won’t be able to borrow the money to finance this province if we keep on at the present rate. We’ve simply got to bring things to a grinding halt.” We then embarked upon pretty Draconian measures. If the members recall, that was the midwinter I embarked upon the hospital constraint exercise, which was not a very pleasant task. However, it was perhaps the most symbolic of all of them because it was the one the public --
Mr. Peterson: Symbolic but not successful.
Hon. F. S. Miller: I would argue that. Hindsight is a great thing. I don’t pretend to have planned what happened as a result of the measures I chose to undertake to meet the Treasurer’s requirements.
I say I chose, because a lot of people went around assuming I was told this was the route I had to take to save the money the Treasury asked me to save. That wasn’t so. As the then Minister of Health, I have to say I take the responsibility for the choices made, because they were mine. Let me say the purpose was to stop a system that was growing at the rate of 25 per cent a year from continuing to grow at that rate. That has something to do with this Lambert report.
At that point the political will was imposed upon the system. Routes were chosen that weren’t necessarily totally accurate or successful, but which in the final analysis had exactly the result the Treasurer wanted, which was that we brought a realization, not just to the health system but to a good number of other agencies and government-dependent organizations, that the days of unlimited growth were over and the days of budgetary control had to start.
In fact I found the hospital system itself reacted with a great deal more responsibility in looking at its spending and brought it under control very quickly, albeit with some disagreements, but interestingly enough not half as many as the press of the day made us think. The support through the system was great. I’d say the message there was that the essential part of a government control exercise isn’t a system one designs or a bureaucracy one sets up, but a determination by the politicians it must happen and the will to see it happens.
Ontario will be criticized to some degree, I’m sure, by the two members, but Ontario has been looked upon by many other jurisdictions as having done a job in advance of the public perception of the need to do it, and in time to avoid some of the catastrophes we’ve been seeing on the federal scene in Canada and are seeing in other countries.
Interestingly enough, about two or three weeks ago I had a visit from the West Germans. I guess all of us have the perception they are in great control of their economy. Mind you, I was talking to their opposition people so I wasn’t hearing the best side of things.
Mr. Laughren: Unlike Ontario, where you hear the best side from the opposition.
Mr. Peterson: The truth comes from the opposition here.
Hon. F. S. Miller: Yes. They were quite impressed with the fact that Ontario alone had done some of the things they were unable to do even in a country as used to authoritarian decision-making process as they have been.
The member got on to the balanced budget. At one point in the course of his comments, he asked what my predictions were for cash requirements. I think he saw in the papers yesterday that the third quarter of the year was surprisingly buoyant. I think they mentioned a 1.8 per cent growth or some such figure. We keep on being pleasantly surprised by the buoyancy of the Ontario economy this year.
We predicted somewhere around 133,000 jobs for the year. We’re currently at a 170,000 level, and it looks as if we’ll manage to hold that through to the end of the calendar year. We kept saying, when the results were good -- we were at the 145,000 level back around June or July -- that it was better than we predicted but we really were expecting some softening; so far it hasn’t happened.
What does that do to my cash requirements? My inflow of cash in some areas lags behind the events of the economy. On sales tax the lag is not much, but it could be 50 days; sales tax being collected on the 23rd of the month reflects something that occurred at least 23 days before, and perhaps as much as 53 days before.
Corporate tax payments reflect a much longer lag. They may reflect a quarter of a year lag or more, depending on the size of the corporation. I suppose the smaller the corporation the greater the lag, because their accounting practices don’t necessarily adjust their corporate payments to reflect that immediate quarter. They look at the whole year for their picture, rather than quarter by quarter.
I can safely say that because we have had a good first three quarters of the calendar year, which means two quarters of a fiscal year, we’re mildly optimistic about the cash requirements for this year. We add the caveat that I still have January, February and March to go through. Those months could see the predicted downturn; they could see the cash requirements change somewhat.
We have had a few disasters hit the budget, literal disasters, apart from the kind the member would imagine with me in control. I refer to things such as the Woodstock incident; the blight on the tobacco crop; the Mississauga disaster, which is as yet unassessed in terms of any provincial cost, outside of those immediate policing costs and so on. We have also made some discretionary decisions to increase healthcare spending. But even so, the spending side is doing very well in terms of being close to projected figures, as the quarterly report shows.
The revenue side is buoyant. Therefore I can say, with some measure of security, that by the end of this fiscal year we will probably better the projected cash requirements. If I recall them, they are $1.158 billion in the budget. Who knows? It may be under $1 billion at the end of the year if we don’t have a very soft January-February-March. So in the short-term view, things are looking pretty good.
If one goes to the next year, we have many unknowns. The Iranian situation, I’m sure, is of great concern to any person anywhere in the world who is making a budgetary forecast. The federal budget, coming down as it will in 12 to 13 days, can have a direct impact on growth in Canada. There are bound to be increases in taxes which will have some negative influence upon spending power.
Therefore, almost as I answered the question of my critic this morning about what I was going to do to soften the blows, I really have to await the budget forecast of Mr. Crosbie to know what actions may be necessary in Ontario to do whatever we can to alleviate the results.
The Canadian price of oil, one can be reasonably sure, is not going to affect us too much until mid-year. I think the member would accept that, wouldn’t he? I don’t expect we’re going to see anything other than the agreed-upon $1 increase on January 1.
Mr. Laughren: Psychologically it will affect us before then.
Hon. F. S. Miller: The psychology of it is affecting us right now. Let’s be honest. The psychology of the American scene is affecting us more than the psychology of the Canadian scene.
Recently, one of these consumer confidence polls that some group was running showed that our people still had very high confidence. This is obviously because people are at work. The human being who feels his job is reasonably secure, or who is employed to begin with, is generally a person who looks around and says, “I think I can make this purchase or that purchase.” The problem in the United States is that degree of confidence hasn’t been manifest.
Hon. F. S. Miller: Auto workers in Ontario, with good cause, have not been secure. When we get to the member’s point I’ll try to discuss that.
Mr. Peterson: The NDP caucus isn’t feeling too secure.
Hon. F. S. Miller: Become Treasurer and you could almost become paranoid.
In any event, I’d say I’m satisfied that progress towards balancing a budget is as good as we anticipated and perhaps a little better. I am aware the economy could make this government, possibly with your concurrence, take steps this coming year or the following year to stimulate the economy.
Mr. Peterson: Particularly if there is an election.
Hon. F. S. Miller: There won’t be an election this coming year unless we’re forced into one. I think that’s a safe thing to say.
Mr. Peterson: We may be obliged to straighten this place out in a hurry.
Hon. F. S. Miller: You may be obliged to? You would probably be obliging us if you did so, because that would immediately put us back in a position of majority.
Mr. Peterson: Oh, we’ll see about that. Don’t get too cocky.
Hon. F. S. Miller: We don’t want you to hurry up. We’ve grown accustomed to your face and your suits.
The member talked about small business development corporations to some degree too. As to what the SBDCs are doing, as a matter of confidence, we’re required as a government not to reveal certain things; that’s part of the rules of the game. In general terms, without getting into particular companies and particular investments, while most of them are still in the organizational phase, obviously, others are choosing and making investments. It’s interesting to see they’re taking some flyers. I see a couple of them making investments in solar heating manufacturing.
Mr. Peterson: How many investments have there been?
Hon. F. S. Miller: I think there are 18 registered.
Mr. Peterson: How many different investments would that be?
Hon. F. S. Miller: I can’t tell you how many specific investments. I’ve got the dollars already invested per company. The investments made were $432,000 as of the date this was printed. That’s two or three weeks old.
Mr. Peterson: How many companies would that be?
Mr. Laughren: The auto workers in Ontario aren’t feeling too secure.
Hon. F. S. Miller: In the range of 10 different investments. The fact that 10 of the companies haven’t as yet made any investments would indicate that some of the companies are into more than one thing right now.
Mr. Peterson: That’s not very much; this is six months after the fact.
Hon. F. S. Miller: I’m more than pleased with what’s happening. I found that while you and I in this room can assume that because we talk to each other about a program it must be instantly understood, out in the business world people who one assumes would be right up on top of things often aren’t.
I have little chats and lunches with executives of corporations and others, such as union members and union leaders,
Mr. Laughren: Stop trying to back-fill.
Hon. F. S. Miller: No, I don’t need to. I can gladly take you to members of my own family who are members of unions.
Mr. Laughren: Your sister is probably married to one.
Hon. F. S. Miller: As a matter of fact, she is. I have three sisters; two of them were married to union members. I have several nephews who are union members.
Mr. Bradley: This must be somewhere in the Treasury estimates.
Hon. F. S. Miller: There is a voice from the wilderness. I have to tell you, at the same time, I don’t have any biases, such as you want me to have, against such things. As your learned Speaker once said to me, with my background, where did I go wrong?
In any case, I would say that we are seeing the kind of success that is at least as good as predicted for SBDCs. Yesterday, when the northwestern Ontario chamber of commerce group came in, they made certain suggestions to us about the application of SBDCs in the north. I was pleased to note some of these investments are obviously going to the north. Does the honourable member want to hear some of the kinds of things --
Mr. Peterson: Yes, give us details.
Hon. F. S. Miller: I can’t give details of specific companies, but only the kinds of things, like specialized pump equipment manufacturing, tool and die manufacturing, electrical parts, mining machinery manufacturing, aerospace components, digital clocks, microwave ovenware manufacturing, electrical parts manufacturing, tools for the automobile industry, solar heating investment, lumber production, clothing production, fertilizer, artificial fire logs, tourist complex -- that is one of the biggest ones, $1 million. Again, more aerospace products, for processing and wineries. Those are the kinds of investments that so far have been made by companies.
As I have said, I was interested about the northwestern Ontario group, because they say they liked the plan and were quite enthused about it, but in the smaller communities of northern Ontario, finding enough people to raise a quarter of a million dollars was difficult. I think the honourable member may have mentioned that in his opening comments to me. I think he will recall my saying nothing was sacred in the plan, but we had to start somewhere and we had chosen certain things.
What I did say to the northwestern Ontario group yesterday in response to their point was that I could quite accept this was so and that I would like to take a good hard look at the statute and regulations to see whether there are ways and means of making exceptions for smaller communities in the north. If there are, I would think the honourable members would agree it should be done.
Mr. Peterson: Why not drop the limit to $100,000 or $150,000?
Hon. F. S. Miller: It may be the way we choose to do it; I don’t know yet. All I said yesterday -- and I think it surprised them and probably surprised me -- is that, yes, having listened to the arguments, I accept your point for the north.
Mr. Peterson: Do it in the south and the east, too; it doesn’t really matter.
Mr. Laughren: You can start in Atikokan.
Mr. Peterson: What about debt versus equity? Is that --
Hon. F. S. Miller: Do you mean in these companies? I have no details; I have only the investments of the small business development corporation, which has to be equity. These are all equity investments shown here.
Mr. Peterson: Has the minister had representations to employ it more for debt going into companies?
Hon. F. S. Miller: No, I don’t see those. The administration of it is under the Minister of Revenue (Mr. Maeck).
Mr. Peterson: I am just wondering what kind of feedback the minister is getting, whether he should --
Hon. F. S. Miller: I haven’t had any criticism on that. I have had to look at a number of applications where one had to decide whether the intent of the act was being met. We had to put one limitation through policy, that the sum total of SBDC interests in any one ESB would be 60 per cent, because we saw some rather neat arrangements being made. We wanted basically to protect the small entrepreneur. We didn’t want him moved right out of his company by two SBDCs taking the 98 per cent that, theoretically, they could take in the beginning. On a policy basis, we have been sticking to 60 per cent and that seems to be acceptable.
Mr. Peterson: That is the maximum SBDCs can take in any company. It is something we talked about at the time.
Hon. F. S. Miller: Yes, so we did stick it at 60 per cent as a matter of policy, after some specific examples came in where the ESB could be a higher percentage.
Mr. Peterson: Because we are talking informally, I am just as happy as if we were sitting in a committee room chatting, if we can do that.
Hon. F. S. Miller: I have no objection at all.
Mr. Peterson: If the Chairman has no objection, we can just sort of sit and chat.
Mr. Laughren: I feel a little uneasy about that because I would like to have the Treasurer respond.
Hon. F. S. Miller: Let me finish my response. If members feel they need to make an interjection, they have never been prohibited in the past. If it is a worthy interjection, I will be glad to respond.
Mr. Laughren: You will sit in judgement.
Hon. F. S. Miller: Yes. We got into a discussion, as we almost always do, on equalization payments in Canada and Ontario’s position on it. That is almost a topic by itself.
Let me try to summarize my feelings about it. I feel the oil issue has unduly complicated the public perception of equalization payments. I will be a bit didactic for a second. You know the reason for them in the beginning. They were started 20 years ago simply to transfer to provinces with low tax yields something like the national average on three basic sources of revenue: succession duties, corporate tax and personal income tax. That gave those provinces a little more revenue so they could carry out certain programs we felt all Canadians were entitled to, which a given province may not be able to afford.
Mr. Hodgson: Mr. Chairman, on a point of order; the Ministry of Treasury and Economics is far too important a topic for us to be sitting here with only seven members in the House. I don’t see a quorum.
Mr. Deputy Chairman called for the quorum bells.
Hon. F. S. Miller: For those members who have rushed in from some other place, I will now carry on and I would expect to see them disappear as quickly as they came.
I have a sneaking suspicion, Mr. Chairman, that now that we have brought in this many people there may be more interruptions.
Mr. Deputy Chairman: If the Treasurer will proceed with his reply we will try to keep it a little more formal.
Hon. F. S. Miller: I will return to my discussion on equalization payments, their basic principle and what has happened to them.
We started with those three tax revenues. Let us recognize that we are talking about provincial tax revenues versus personal income of citizens within a province. They are not totally unrelated, one would think, but they can be unrelated particularly if a province chooses not to levy a particular tax, or has a lower rate of levy of a tax.
With those three sources of revenue, perhaps life was reasonably simple. But as we finally expanded the program to include 29, life became a little more complex, because not all provinces have all 29 sources of revenue. Even then, we find some, like Alberta, have great gobs of revenue in one of the accounts and another province, like Ontario, might have very little revenue in a particular account. A province like Prince Edward Island has virtually zilch. I am thinking of, say, resource revenue.
Mr. Peterson: It’s a function of size, too.
Hon. F. S. Miller: Sure. It’s not just a function of the size though; it’s a function of many things. But it’s always supposed to be a measure of a province’s ability to raise the funds to produce necessary government services. I think that was the fundamental principle. We have amended it so that we only allow for half of the resource revenues. We have amended it to have the formula of gross payout limited so that no more than one third of it is resource revenue. Those two caps will of course restrict what happens in the future.
As I see it, the great weakness of equalization payments has been that they committed the federal government to make disbursements without necessarily giving it a revenue source to cover those obligations. This was particularly emphasized when the oil and gas revenues started to flow in large measure to the wealthier or to the producing provinces. We see then the obligation going from something in the range of $150 million in its first year to something around $3 billion in the next fiscal year. It has gone up, in some ways, at a compounded rate of 15.5 %, if I recall. Anyway, it has gone up almost 100 per cent per year, if you look at the figures, from $150 million to $3,000 million in 20 years.
If the source of the federal revenues to meet the equalization payment obligations was somehow proportional to the wealth of the provinces, I think it would be reasonably fair. What has happened is the taxing powers of the federal government have not given it access to certain forms of wealth, but have left it with its traditional tax bases. So you see it turning to the alleged 25 to 30 cents a gallon excise tax on gasoline. That has nothing to do with the oil price at all. It is strictly a fiscal measure, aimed at trying to solve the kinds of problems brought about by the great growth in the federal government’s responsibility to meet equalization payments out of its legal tax base. That, of course, then brings us into the oil fight, the revenue fight. It is of interest to Ontario in a very direct sense because 43 per cent of all federal revenues come from Ontario. Therefore, 43 per cent of equalization payments come from Ontario. I think you would accept that.
Mr. Peterson: Yes, but it’s not as direct a phenomenon as you would have us think.
Hon. F. S. Miller: No, but in general terms if the requirements of the federal government go up, unless they find a new way of reallocating their tax moneys within this country, we can be expected to pay our share of it. I don’t think we have argued that, except to say that no longer reflects the ability of the people or the province to pay. That’s where the issue comes in, because the money we pay at the pumps or at the home for gas and for fuel oil -- that price is, admittedly, artificially set -- flows directly to the producing provinces. It gets split 45-45-10, roughly. The 45 per cent that goes to the provinces, without envy, simply is not available for the federal government, yet it is used in the calculation the federal government has to use to meet its obligation.
Therefore, they make their payments, turn around to their tax bases where they can find them and raise the money. That means that not only do we pay more for the oil at the pump or the home but in turn, we in Ontario have to pick up 43 per cent of the equalization tab inflated by the oil wealth of the province.
Mr. Peterson: You still get 60 per cent back, so you are a net winner.
Hon. F. S. Miller: We don’t get anything back on equalization payments. That leads us to the point you brought up. Why isn’t Ontario taking its money on the equalization payments? If you didn’t bring it up directly in your opening comments, it’s a point you have raised before and your leader certainly has raised.
I would have to say at that point the exact figures for the record, according to our estimates, are that in 1977-78 the federal government would have owed us $109.9 million. In 1978-79, they would have owed us $202.5 million. In 1979-80, they would have owed us $154.4 million. We really can’t predict what they would owe us in the next fiscal year until we know the price of oil.
Mr. Peterson: Are you using the present formula or the Bill C-26 formula?
Hon. F. S. Miller: That’s the present formula, as I recall. For your information, the total equalization payments made by the federal government in those same years in the same order are $2,587.3 million, $2,857.5 million and $3,010.7 million. Ontario was entitled to somewhere between four and seven per cent of the gross payout under the formula, whereas it’s contributing some 43 per cent of it.
Obviously, when one starts negotiations, one should not cut off too many alternatives, so if I sound cautious in what I am saying, it is not through unwillingness to try to be specific, but it is in the interests of having a free enough hand to look at propositions that may come up on the federal scene as we discuss this problem.
Ontario’s first position was, “Don’t raise the price because all you are doing is compounding the problems and causing governments to take actions to support consumers that are not necessary if you don’t raise the price.” I think all parties have agreed on that.
Assuming the price goes up, then Ontario has said, “We do not believe the equalization formula had the intent nor the design to give us back the moneys we see as being needed to recycle oil revenues, as it presently is designed.” Therefore, we are not encouraging that route and, therefore, we haven’t taken our money, because we do not believe it was the intent of the original design.
Second, being totally realistic and pragmatic, while Bill C-26 was not passed -- and I was wrong on that one day; I quite honestly admit that -- the intent to pass it retroactively is there, and I believe it is still there. I am not sure, but I believe that is so. In any case, they are already carrying out calculations on the oil-lease revenues, I am told, on the assumption that they are going to be changed. Ontario had agreed with that in the beginning.
I am only saying that if all negotiations fail and the bill doesn’t come in, Ontario may eventually say: “Fine. Having lost on other fronts, this money is now due us.”
Let us look, though, at the alternative to that. If a good redistribution of oil revenues isn’t worked out in Ontario’s interest, then I would think the second position Ontario would have would be to look at equalization payments in a totally new light, a totally new purpose and totally new design. Then one would be saying they are there not only to support governments to make basic individual services, but may also be there to redistribute wealth. This would enable taxes in certain provinces to be lower than they otherwise would and, therefore, consumers would be left with more money in their pockets because oil prices are maintained at a high level. That kind of thinking may be required.
So we are going to be entering a very interesting and complex time as we go through the discussions of the redistribution of oil wealth and the equalization-payment formula.
Mr. Peterson: Can we pursue this later?
Hon. F. S. Miller: Yes, sure.
At one point in your comments you talked about debt-to-equity ratio at Hydro, I believe. I don’t have figures at my fingertips, but I thought they were somewhere around the 80 per cent level.
Mr. Peterson: Get George out here.
Hon. F. S. Miller: I was going to go through my opening statements without a phalanx of bodyguards and then we will have those people who really know the answers out here.
Interestingly enough, the major way to cut the debt ratio in Hydro is to increase the rates.
Mr. Peterson: Or cut back the borrowing.
Hon. F. S. Miller: Or cut back the borrowing, yes. In fact I would guess that the borrowing this year will not reach its projected levels. The reason for that will be that revenues for Hydro from export sales are a little better than they have been and certain projects have not come on stream as fast as originally predicted.
But I hope you recognize that a fundamental part of the Minister of Energy’s long-term proposals is the substitution of oil by other forms of energy, either indigenous to Ontario or renewable. Electricity can fall into both categories. Is it 37 per cent of Ontario’s electricity which is currently generated by water? Obviously, there is some potential for expansion. I think that is correct. Let’s not argue. I used 30 per cent one day and immediately got corrected by somebody from Hydro who said it was 37 per cent. It’s 30 per cent to 37 %; the balance is the principal. The balance is either oil-fired, coal-fired or nuclear.
Ontario has emphasized nuclear power for the simple reason it is low-cost power and dependable. We have, we think, the best system in the world. We have the resources to produce the fuel for reactors within the province and we see a need, as time goes on, to --
Mr. Peterson: You have friends in the business.
Hon. F. S. Miller: We all have friends in the business because they’re citizens of Ontario. Surely all citizens of Ontario are my friends, your friends, and the NDP’s friends.
In any case, of necessity there will be a replacement by electricity of oil in particular, gas to a degree and coal to a degree in so far as we can fuel by other than those fuels. While the load forecasts have been criticized and while no one would attempt to defend whether we should or shouldn’t have the 20 per cent excess capacity we have, the fact remains it is going to look very good as time goes on.
When one goes to Quebec and sees them opening up the Baie James project, one is able to say right now what the cost of electricity will be in Quebec in the year 1995. I think the member would agree with that. The capital costs are known. There will be some variation in the insignificant parts of electrical generation -- that is repair, maintenance and the labour of maintaining the lines. They’re not insignificant in total dollars, but perhaps in terms of the cost of power, that advantage can look better and better.
While nuclear power doesn’t have quite that kind of stability in terms of forward pricing, once the plant is in place a great big chunk of your future forecasting cost is in place. I think you would agree with that. The only variable then, apart from the manpower to run it, will be the future price of uranium. There are a lot of arguments about that. I’m not about to say what it will be, but I suspect, since we’re finding more and more uranium deposits as time goes on through this country and through the world, there’s probably going to be some competition for sales for a while. This may be in the interest of Hydro and others.
The deteriorating debt-to-equity ratio, if it is deteriorating -- and I would have to see the figures to say whether it is deteriorating or maintaining a higher level than one would expect to see in a privately-owned operation -- has been, in large measure, an attempt to make sure the increases in the cost of hydro to the consumers of Ontario were kept to their absolute minimum level. If one built in an extra two or three per cent in the rate, one could obviously start cutting down, either in the borrowing, which would be the current basis, or some other form of debt reduction.
The member also got into pensions and I have some notes on pensions. I assume you looked at the province’s recent paper on pensions, Treasury Study 16. That was put forward as a staff paper for interesting discussion and analysis, by people who have more knowledge of the variables than I pretend to have, because when I start looking at some of the equations and curves I will be the first to tell you, I couldn’t be a critic of them.
The basic conclusion of the third part was an interesting one. It says, “A Policy Dilemma” -- did the member read that? The basic conclusion of the third part talked about pay-as-you-go or funded pensions. I think that’s the issue you tackle most times when you talk in this House.
It says, “A Policy Dilemma: The Conflicting Conclusions Post a Dilemma.” The conflicting conclusions were that contribution rates are lower on pay-as-you-go in the early stages and higher in the later stages. The economy appears to do better on a funded pension plan; the total costs are lower on a funded pension plan, but the initial costs are higher to the person making the contributions. You have that dilemma of deciding what is in the immediate and long-term interests of the people involved.
Since our last lengthy discussion on this in my last estimates I have had the benefit of talking to a number of people who are actuaries and in the business. I was rather surprised to find that they’re not half as gung-ho to support totally funded pensions as I expected they would be. I guess my first simplistic reaction, in advance of being Treasurer, was that a totally funded pension is the only safe pension. Their answer, in many cases, is that somewhere in between is probably going to be the right mix. I’m now talking not about government people but people who sell pension plans and are in the private business world.
I am going to await the findings of our royal commissioner. The member said I would say that. But in all honesty, I think for a minister to stand up in the middle of a royal commission and pontificate upon the outcome would prejudice the work of that commissioner.
Mr. Peterson: Not if he doesn’t know anything about it.
Mr. Laughren: And they know he doesn’t know anything about it.
Hon. F. S. Miller: Even if he doesn’t know anything about it, it’s assumed he does.
Mr. Peterson: You assume people take you seriously.
Hon. F. S. Miller: In my case, the analogy the member attempted to draw was totally erroneous.
The fact remains I really respect the need for the royal commissioner to require a certain degree of freedom from prejudgement of her work. I only hope the report comes in as quickly as possible, although I set June 1980 as the most likely date.
Mr. Peterson: What’s your opinion of the economic council report that came out this week?
Hon. F. S. Miller: What aspect of it?
Mr. Chairman: Order. There will be ample time to ask further questions.
Mr. Peterson: On contribution rates.
Hon. F. S. Miller: The 9.9 per cent, or whatever it was.
Mr. Peterson: Seven per cent.
Hon. F. S. Miller: That’s the very kind of thing I think I should not offer a public opinion on because I hope it’s the kind of thing I’m going to be hearing from the royal commissioner in due course. We have put out here, without attempting to tell you the answers, the problems and the alternatives.
Mr. Peterson: I know the problems and I’ve got the alternatives.
Hon. F. S. Miller: That’s the great advantage of being totally certain.
The fact remains I hope that will be a useful discussion piece within the areas where people pay a good deal of attention to it.
Mr. Peterson: The Treasurer can get his two-handed economists working on that.
Hon. F. S. Miller: If the member can find me a one-handed economist, I’d like to meet him.
Mr. Peterson: What about the problem of funding to pay back the CPP over the next 20 years?
Mr. Chairman: Please disregard the interjections or questions.
Mr. Peterson: Mr. Chairman, it’s not an interjection, it’s a discussion.
Mr. Chairman: Order.
Hon. F. S. Miller: When I have my staff beside me, we’ll be coming to the specific questions such as the honourable member is now posing.
I will move to the opening statement of the member for Nickel Belt (Mr. Laughren), representing the NDP. I had a lot more notes on him. I’m not sure I can answer them clearly.
Mr. Peterson: The eight questions.
Hon. F. S. Miller: Eight questions, yes.
I would only make one of my snide political comments that we always have to have a bit of rhetoric in our opening statements. The member for Nickel Belt was talking about the public ownership of resources being the key to the health of the economy.
Mr. Laughren: On a point of personal privilege: If I recall my words correctly, I said the public ownership of the resource industry was the key to unlocking the economic development of Ontario.
Hon. F. S. Miller: I think the member is probably quite right. I even have the words “economic development” in my notes.
Mr. Laughren: It’s a nice lever.
Hon. F. S. Miller: The member for Nickel Belt wants a healthy private sector. He also said that. So do I. That made me think of my days as Minister of Health when healthy things were all I was interested in. I learned then of an interesting cause of disease.
I read a book by a man called Ivan Illich. The lady behind me introduced me to him once. It was called Iatrogenic Diseases or some such thing. Those are diseases induced by the physician. Those are diseases caused by going to see a professional.
The big difference between you and me is the determination as to how involved the physician should be in the health of the economy. If one has a physician too involved in one’s personal health, one starts to suffer from diseases caused by the physician. May I suggest to you the same parallel applies in the economic field. We could have iatrogenic economic disorders. How’s that for an economist?
Mr. Laughren: If the patient doesn’t look after himself then the physician must.
Hon. F. S. Miller: That’s true, but that’s a big difference between your approach and my approach. I agree completely with that. There is a role for the state. I wish things were as white and black as our theoretical philosophies would make us believe they are. I’ve come so far towards understanding that there is a need for the role of government that I have the Employment Development Fund doing things. But the real difference is one of degree. It’s not a question of absolute differentiation. So I would have to say public ownership of resources would not be the answer to unlock the key to economic development but, rather, private ownership is -- with government involvement in the process and profiting from the development of those resources.
I’m going to have more trouble answering the member for Nickel Belt’s questions than I had the member for London Centre’s. You talked about our manufacturing industry. You noted, I think it was in your speech, the relative decline of the percentage of jobs in the manufacturing sector. I’m not here to quarrel with those percentages. I don’t have any counteracting figures. But I would say that’s one of the problems with taking one statistic by itself. If 30 per cent of the work force a few years ago was involved in manufacturing, and 24 per cent now and 22 per cent a couple of years ago, whatever the figures were -- I’m going by memory -- it doesn’t necessarily follow that there’s a decline in the manufacturing sector. We have been entering an age of greater and greater automation, as you know, and this involves more output per person employed.
Second, that means there are more people employed in non-manufacturing sectors as the economy improves and we have seen a great growth in the service sector. So the percentage of total jobs in manufacturing has declined, true, but the total number of jobs has increased, true. So we can both look at the factors and say from your point of view it’s a failure, and from my point of view it’s a success. That doesn’t mean we have solved the problems of manufacturing in Ontario. We haven’t.
You touched upon GATT and what’s going to happen in that. Ontario has consistently said throughout the GATT negotiations that our industries were the most sensitive to the changes. We did have some of the higher protective barriers. Perhaps we have been naive as Canadians in the world market because it wasn’t just tariffs that protected industries; it was the policies of governments that protected industries.
We lost the UTDC deal in the States a while ago, I think it was Philadelphia. Just yesterday, somewhere, someplace, I read the kinds of pressures that were brought to bear upon Philadelphia, and Boeing, to make sure Canada didn’t get the deal and that a Japanese consortium did. That is the kind of trade-off that some of the foreign countries have been taking.
I must say the aggressiveness, particularly of Japan and Germany in the foreign markets and their protection of the home market -- especially in Japan -- has made tariffs just one and perhaps not the most important of the many factors that relate to our success in foreign trade.
Even so, we recognize that we will have to work with the federal government to have adjustment aid available. The Minister of Industry and Tourism (Mr. Grossman) can more appropriately discuss the form of aid that will have to be available.
I also take great pleasure in looking at the jobs created, and where they are created over the last couple of years. Last year, of the 144,000 -- or whatever it was -- jobs created in Ontario, 102 per cent were in the private sector.
Mr. Laughren: Say that again.
Hon. F. S. Miller: I said 102 per cent were in the private sector.
Mr. Laughren: I thought that’s what you said.
Mr. R. F. Johnston: That is naturally obvious.
Hon. F. S. Miller: It is obvious, because there was a net decline in the public sector.
That compared to an historic average of something closer to 70 per cent private, 30 per cent public, over a number of years. I am told that in 1979, 170,000 jobs are again 100-odd per cent at least, private sector. That can’t help but be a healthy sign, because it means all of those are net producers of wealth. You don’t have a seven-to-three ratio of dependence upon others for income.
Mr. Laughren: But if London Life hires another 10 insurance salesmen, that’s individual wealth, not community wealth.
Hon. F. S. Miller: Wealth is created in many, many ways in the private sector, and London Life is not likely to hire 10 to flog it, unless somebody is making money to buy it.
Hon. Mr. Gregory: That’s commission; they’re not paying anyone, they’re not paying a soul.
Hon. F. S. Miller: The honourable member got onto the conference board and its forecasts of growth. I think he talked about 30,000 jobs being predicted for next year. We haven’t come to our predictions for next year yet and we won’t until the federal budget is through and we get into our final budgetary process.
I would like to look back at the years 1974 and 1975 and say that while I wouldn’t want to use them as a yardstick, we still saw something like 54,000 jobs created in a year where recession followed an American recession. That could quite possibly be a dangerous thing to do this year, so we are not going to make an estimate of next year’s jobs. We will see the federal government’s budget and then we will have to come forward with our own, after we have a better understanding of the parameters that are going to apply to the Canadian economy.
To get on to the deficit in manufactured goods.
Mr. Laughren: May I put a question, Mr. Chairman?
Mr. Deputy Chairman: That is up to the minister. Agreed?
Mr. Laughren: I am wondering if the Treasurer is not going to go into a little bit of detail about the whole redeployment problem as a result of the GATT negotiations, or whether he is saying that is up to the Minister of Industry and Tourism, because I think that is an economic problem for Ontario, not just an Industry and Tourism problem.
Hon. F. S. Miller: I quite agree it is not just an Industry and Tourism problem. The basic actions that are taken are usually just like the pulp and paper things of today. They are usually announced through that ministry and usually argued as part of their issue. I don’t want to go further today but to say, “Yes, there is a recognition of the need.” There has been a stated recognition throughout the whole process. When we have the economic development conference that is scheduled for the federal government, in Winnipeg in mid-January -- January 18, 19, 20 -- is that it?
Mr. Laughren: Winnipeg in January?
Hon. F. S. Miller: Yes, Winnipeg in January, which is not for the --
Mr. Laughren: Balmy organizers.
Hon. F. S. Miller: In any event, I suspect that kind of issue is going to be high on the agenda of government planning. Certainly it is something Ontario is interested in. As you know, there is going to be a conference, with governments, unions and industries represented. Do you know anything about it?
Mr. Laughren: No.
Hon. F. S. Miller: That was one of the platform planks of the new Progressive Conservative government that there would be a conference something like the one we had in February 1977 in Ontario, the Partnership for Prosperity conference.
The federal government feels, regardless of any provincial interest, there is a need for a national-level conference to discuss the economic future in the longer term and the steps that have to be taken. I hope this kind of issue is going to be high on its list.
Mr. Laughren: Are you going to it?
Hon. F. S. Miller: I don’t know.
Mr. Laughren: I would like to go.
Hon. F. S. Miller: They have said there will be 150 people from all across Canada.
Mr. Peterson: It would be 151 if Mr. Laughren could make it.
Hon. F. S. Miller: If they prorate from across the provinces, that is 11 divisions into 151. Allowing for the feds to have their share, that gives Prince Edward Island about 13 and Ontario about 13. The fact remains that they will be choosing the delegates, and I assume ministers will be invited. I have heard some of the provinces are not willing to send ministers.
Ontario is willing to send its minister, provided ministers are attending as a general rule. In other words, Ontario is quite happy to go along with the conference, be present at the ministerial level and be observers in it. As I understand it, we wouldn’t be anything but observers unless we are asked to partake in a discussion or a working session. It is aimed at getting a handle on some of the kinds of things you were talking about and, of course, many others too.
The deficit in manufactured goods, which I assume also would be discussed at a conference like that, is one of those areas where, while we may differ in solutions, we surely don’t disagree in principle. Whether we talk about autos, which are a specific part of it, or whether we talk about mining machinery, also a specific part of it, the whole issue is we do need to see a smaller deficit on manufactured goods. That has to be one of the major objectives of this province.
You and I have argued at times as to whether one achieves it by reducing imports or by increasing exports. I would like to say I don’t give a darn which way we do it. The net thing is to work on both of them and come up with an increasingly declining percentage.
The first thing we have to have understood in Canada by our sister provinces is the recognition this is a Canadian problem and requires a degree of Canadian cooperation to solve it. In fact, there should be a Canadian preference exhibited right across this country for products manufactured at home.
Mr. Laughren: It takes chutzpah for you to stand there and talk about procurement policies, given your record.
Hon. F. S. Miller: I would say the Ontario record is pretty good.
Mr. Laughren: I will bring up some specific cases.
Hon. F. S. Miller: The fact remains that we haven’t always seen, we felt, the same enthusiasm for Canadian procurement in other provinces if the sourcing was within Ontario.
One of the things that encouraged me was mentioned by Mr. Bouey when he was talking about the high interest rates, namely, that one of the reasons for maintaining them high was that even if we let the dollar drop, our export industries couldn’t profit because they are already too busy. That is not true, of course, of the auto industry at the moment.
One of the encouraging statistics in front of me is that capital investment in Ontario is running ahead of this year’s expectations. When we started the year we said that of the $100 billion that was expected in gross provincial product, about $10 billion would be for capital investment. We are told it’s running closer to $14 billion now.
Coming to the auto pact, I would point out that we in Ontario have repeatedly taken the position that Canada has to have its fair share of North American auto production. We have met and supported the Automobile Parts Manufacturers Association several times. We have supported their briefs and presentations to the federal government in that connection. We even had a paper on it in April 1978, called The North American Automotive Industry -- An Ontario Perspective. In that we stated that a fair share meant we in effect should see our production growth move in step with our domestic consumer use of cars.
Of course that’s the big problem in the last year, as the honourable member knows. Our sales went up about the same amount as the American sales went down. It happened that the products that were the biggest losers were the ones that happened to be assembled here and so we saw very serious implications for us.
The study the feds had a while back on the auto pact -- I think it was done by the gentleman who was one of its negotiators in the beginning -- implied that it wasn’t wise to reopen the talks right now. I would support that in the sense that there may be more to lose than there is to gain at the present time.
Mr. Laughren: Would you sign a document that it would cost you more than it is costing us now?
Hon. F. S. Miller: We sense that the American Congress right now hasn’t been willing to provide many trade concessions. I think the member would agree with that because they are facing a recession and they are facing a deficit in their foreign trade also. Obviously they are starting to protect the home front. We are going to have to do our darnedest; and I think though the Employment Development Fund we have implemented some good measures this year to what we call “tilt” some decisions to the Ontario side. It is the only real purpose of that fund to see that it tilts something away from the United States to Canada, or maintain something here like the pulp and paper industry that otherwise would have some stormy weather ahead of it.
Mr. Laughren: You shouldn’t have used public money to get our fair share though.
Hon. F. S. Miller: No, we shouldn’t have to. I am the first to say that. My Premier has told the auto parts manufacturers that in my presence. He has also said it publicly. The fact remains, it’s a fool’s game being pursued by a number of states that force other states -- I use “states” in the generic sense -- into the same kind of game. It’s like so many shooting wars or price wars. Obviously there are winners, but there are a lot more losers than there are winners.
Ontario would do just as well without any incentives being offered on the other side of the border or here, I am totally satisfied. In other words, if one left the choices to the marketplace without trying to influence them we would do just as well. But, sadly, that was not the state of affairs when we decided to get into the Employment Development Fund. While it offends me, as it offends the honourable member --
Mr. Laughren: Because they don’t honour the fair share concept.
Hon. F. S. Miller: I am not talking about the auto pact particularly. I am talking in general. I have to live by the way the game is being played right now whilst trying to change the way it’s being played right now to what we think it should be.
We have had support for the duty remissions scheme. There has been quite a difference of opinion in some parts on that. I think Volkswagen has been one of the companies to get involved in that. I think some of the Japanese companies are now starting to be involved in it too.
I have talked about the Employment Development Fund assistance to the auto parts industries. As of now, we have provided $4.51 million in grants and $1.5 million in loan guarantees to nine auto parts firms in Ontario. We estimate those grants will create about 2,000 direct jobs and will cause $73 million worth of investment to be made in the industry and would raise our exports by $515 million, in round figures, over the next five years.
Mr. Laughren: What about the tariff reduction in auto parts? Did you dig that out?
Hon. F. S. Miller: I can’t answer that. Perhaps later on I can get some specific information. The key thing is the auto parts firms which are getting that assistance are spending, on an average, $16 for every dollar Ontario is providing. That contrasts with the Ford deal which was $20 for every dollar our government provided. That’s one step we took in that particular area. The member has asked eight questions, and I am going to have trouble with your eight questions, because I don’t have answers in the order they were produced.
Mr. Laughren: That’s all right.
Hon. F. S. Miller: You were rattling them off so fast I had some trouble --
Mr. Laughren: I made special allowances for you.
Hon. F. S. Miller: You usually do.
You talked about government procurement policy to some degree. That’s the one I am turning to now, government procurement. That was the next page in the notes anyway. Our Ontario policy has been to give a price preference of 10 per cent in respect of Canadian content of goods and services for government purchases. That’s been in effect since 1974. In 1976, it was estimated that 99 per cent of the ministry purchases were from Canadian suppliers and the domestic content of those purchases was between 85 and 90 per cent. We tried very hard to make sure the purchases that were secured outside of Canada were confined to things that were not made domestically.
Mr. Laughren: There were exceptions to that.
Hon. F. S. Miller: Certainly, there are some exceptions. The member got on to one specific project in Peel and I think since then you’ve had an opportunity to talk to the Minister of the Environment (Mr. Parrott) in the question period, so I will skip that one.
We in Ontario, and I think I mentioned this earlier, are going to keep on pushing for a “buy Canadian” policy. That was basically agreed upon at the first ministers’ meeting a year ago I think in April. It has been fairly actively promoted by the Ministry of Industry and Tourism in Ontario, and I think it’s starting to have its effect.
Mr. Laughren: Have you figured out a way to label chickens yet?
Hon. F. S. Miller: Yes. One of the things I am intrigued about, talking to some Japanese business people, is if one offers a product for sale in Japan which is not made there and it is lower in price and better in quality, they tell me the Japanese buyer still prefers to buy the Japanese product. Would that we could educate our Canadian consumer to do the same. I wouldn’t particularly ask them to pay a premium, but I surely would like to increase the awareness of all of us of the need to keep buying Canadian-made products.
I sometimes get quite upset when specific things come along. I will tell you one of those stories that happened to me, two little stories. One didn’t have success and the other did. These days I burn a little bit of wood at home. A number of us are doing that. I can’t afford the oil, so I went out to my woodlot and cut down some trees.
Mr. Laughren: The Indians say they know it is going to be a bad winter because the white man is cutting a lot of wood.
Hon. F. S. Miller: In any event, having tried to start my chainsaw, I brought this wood over to the house and had to split it. Having spent a week in hospital after having tried to split it, I bought a wood splitter.
Mr. Laughren: You spent $2,000 to save yourself $100. Some Treasurer!
Hon. F. S. Miller: You know how it is. Have you ever estimated the true cost of burning wood? I saw the economics of it once, between the OHIP payments. I am being a bit facetious. I bought the wood splitter about a year and a half ago because we were splitting quite a bit at that time. One of our company’s projects was actually selling it. We discovered we couldn’t buy a Canadian-made wood splitter, and I conscientiously went around asking for a Canadian-made wood splitter.
I can’t think of a simpler piece of machinery to make. It has got a hydraulic ram and a stationary wedge and an I-beam underneath it, connected by a couple of hoses to whatever hydraulics you have on your tractor or to a small portable gas engine or electrical engine, depending upon the kind you buy.
Not having found one, I asked the Ministry of Industry and Tourism to tell me if there was a Canadian source for such a thing.
Mr. Peterson: You got the whole bureaucracy working on it.
Hon. F. S. Miller: Yes. They responded and said they understood somebody out in BC did make some, but they didn’t necessarily market them in eastern Canada. I then wrote to one of the companies in my riding that makes light machinery and said, “Maybe this is something you could build because as the wood industry grows in this province there will be more demand for them.”
Mr. Laughren: With two trees being planted for every one cut, there are going to be more trees around too.
Hon. F. S. Miller: That’s right. There is going to be a great demand. Those are all going to be straight, true and made into lumber and chips.
The sad part of that story -- I am just telling it in anecdotal form -- is that I haven’t seen anybody take any action to build them. The other one was a little happier, and that gets into government procurement.
Mr. Laughren: Just before you leave that one, the dining room could use them for breaking their rolls as well.
Hon. F. S. Miller: The ones they leave on the table where I sit.
We have got government procurement at the municipal level. Maybe this is a level we need to dwell upon too, because they are spending $4 billion at the municipal and educational levels in this province. At least that is our transfer to them. That means about $8 billion.
We have a little company in my riding that makes garbage packers to go on the back of a large truck and pick up the garbage.
Mr. Peterson: Is that your speech writer you are talking about?
Hon. F. S. Miller: Yes. Once they had the garbage track, I needed a garbage packer who was a speech writer. You can sort that one out in a while.
This company made a frantic phone call about a year ago to say it was tendering on a Metro Toronto tender. They were low tender but they weren’t being accepted because they were new in the business, even though they had an American design, et cetera, that they had purchased the rights to in Canada.
I entered the foray very late. The orders were already issued and nothing could be done, but I was appalled with that. It was a matter of familiarity with the product that made a municipality say, quite properly, “We like what we are buying and we are not willing to risk buying something made in Canada.”
I think that is something we have to be prepared to do. I hope you would agree with me that as Canadian firms come on stream in this country and do make products, either of their own design or under purchased rights, people will have the confidence to try them.
The success story is this: this year with a large number of other packers they tendered on another municipality’s deal. Again, they were turned down for exactly the same reasons, but this time we heard about it early enough. As the member for the area, I had that corporation called and said, “What’s wrong with buying Canadian?” They gave us the old reasons. We said, “Would you even take the time” -- the politicians hadn’t heard about it -- “to talk to the company and listen to their point of view?”
I don’t know for sure but I’m told they decided to try half of their order with the Canadian product and half of their order with the old one.
Consciously, we as politicians all have that responsibility in this Legislature when it comes to procurement on behalf of either our own constituents or the greater constituency of the province. It’s interesting sometimes how a little thing such as that can tip the balance in favour of a Canadian supplier.
We do the same thing with the employment development fund. When we talk to a company that is getting a grant from us, one of the basic questions is, “Where are you going to source the materials you’re buying?” In a number of cases, the Ministry of Industry and Tourism has acted as a broker saying, “Do you know that there’s a Canadian supplier for this product?” We have had some degree of success in bringing the supplier and purchaser together.
Mr. Laughren: Except the big ones.
Hon. F. S. Miller: I’m happy to see us succeeding to any degree. It starts to move in the right direction because as your companies get healthier, they become better known, their products are better accepted, people are not nervous about the low tender, et cetera.
I think I’ve talked enough about the merchandise account. The service account was touched upon. One of the reasons we are worrying considerably about balancing the budget, of course, is that we are concerned about the worsening service account of Canada and we are hoping to prevent us, as a government, from borrowing abroad so we can leave more money at home and, therefore, have less interest to pay to foreign countries.
I think the member made some comments about small business through the process. One of the programs I am delighted to see being acted upon very quickly by people in the member’s area and my area is this Tourism Redevelopment Incentive Program.
When I was with the Northern Ontario Tourist Outfitters Association on Wednesday evening in Sault Ste. Marie, I was astounded to find that few of the operators had, as yet, become aware of it. That was quite different from operators in southern Ontario, who appeared to be immediately aware of it. I’ve now concluded it was because the southern Ontario tourism conference occurred very shortly after the announcement whereas the northern one has just occurred; the Northern Ontario Development Corporation has just had the chance to explain it to the operators present.
I hope the member would accept that as a very positive move to attempt to help at least one sector of the business community and the small business community with some of the high interest that we’re facing today. We expect that the only problem we will face is whether there will be enough money to meet the requirements of the industry as it decides to improve its facilities.
I’m a great believer that the tourism industry is about to turn around in Canada and that we are on the edge of seeing a return to fairly healthy long-term-stay tourism. We all have had the best year in our history in Ontario. One year, however, does not make a trend. The fact remains that the year was healthy before the Americans had their gas problems because reservations were made well in advance and before the spectre of gasoline shortages had reared its head in the United States. So, one can’t say that Americans suddenly flocked to Canada once they saw that they couldn’t travel at home.
I sincerely believe that the era of foreign travel will start to fade, somewhat, that we’ll see Canada becoming a better and better destination for Europeans, to some degree, but for Americans and Canadians in particular. Our biggest market still remains our own, right here.
I think what tourism needs, of course, is a reinvigoration because in the 20 years I’ve been in the tourism business, with great dismay I’ve been seeing old resorts gradually deteriorate, fail to update, stay in the hands of people who stay in the business 10 years past the point where they want to be, or should be -- like me -- the prime property ends up as subdivisions and is removed from the tourist industry. That’s particularly true of those centres that are close enough to our major metropolitan areas. It’s not true of northwestern Ontario or northeastern Ontario once you pass North Bay, I would say; but it certainly is true of the sector south of Lake Nipissing. It’s been a very real concern to me.
I think we have an absolutely essential task to maintain that industry. It’s employing 413,000 people at peak -- admittedly not year-round, admittedly not at high wages. But the fact remains it’s an essential ingredient in our economy and has to be supported. That program will help that, I think.
The member talked about the role of the public sector in the economic development of Ontario. Again, we would have some philosophical difference with him on the degree of involvement. Nationalization is obviously not the cure for every ill. I think we both moved a bit. We just emphasized that one of the first roles the public sector has in the economic development of Ontario is the one I mentioned earlier when I was talking about jobs -- that is, not to expand itself too fast, so that resources are left for the balance of the economy untaxed.
Mr. Laughren: If the public sector creates wealth it is not absorbing it.
Hon. F. S. Miller: Yes. You’re not going to get me to disagree with you. I’m going to be giving very serious thought to the comments the member for Nickel Belt made about mining machinery. I think I have some specific notes on it.
Mr. Peterson: You made them last year.
Hon. F. S. Miller: I may be a little more optimistic than I was. These are the notes my staff gave me. They said that in 1978 the trade deficit on the whole range of machinery was $4 billion in Canada. The interesting thing, though, is that the growth of imports has been less than the growth of exports in the last 10 years.
Mr. Laughren: But the deficit is greater.
Hon. F. S. Miller: Okay. It’s the rate of growth we’re talking about there, and the fact that Canadian manufacturers are beginning to specialize in export. I’ve seen evidence of this down in Mississippi, watching them cutting down forests. I was very pleased to see equipment made in North Bay, I think it was.
I’m delighted to see companies like Champion Road Graders, of Goderich, competing in a world market, as I understand. I would choose a couple of those companies as evidence that the ability to do it is with us. The question is what range of product can you afford to be involved in and do it well. I think that’s the key issue before us, and perhaps to some degree our industries are starting to come to that.
Mr. Laughren: Start in an area where you’ve got a large domestic demand.
Hon. F. S. Miller: In mining machinery the member for Nickel Belt used a figure that probably was low. The 1978 trade deficit of $616 million for mining machinery was less than the 1976 figure of $646 million. Since 1974, imports have grown at an annual rate of 14.6 per cent; exports have recorded an annual growth of 21 per cent in mining machinery.
The recent trade show in Sudbury we hope should serve to continue to reduce the imports and to encourage rationalization in the mining sector so we can afford to make some of the products here. A lot of the mining machinery that is being imported into Canada is earth-moving and earth-drilling equipment, et cetera, for projects like Syncrude.
Again, digressing from my notes here, I was very happy to see a picture in one trade magazine this week of the largest rear-dump loader ever made in the world. Was it from London? It was made by the GM division. Is it the Euclid division down there? It was a 300-ton unit for the mining industry and, in that case, for export. I quite quickly admit there are many imported components, but the fact remains here is the vital part of the mining industry, on a major scale, being built here and showing the potential for that.
Canadian manufacturers’ shipments of mining machinery and equipment, excluding hoists, rose from about $180 million in 1973 to $280 million in 1971. We have certain areas of rock drilling and earth-drilling machinery, et cetera. We hope we will see an improvement.
May I stop at this point?
Mr. Deputy Chairman: It would be a good point.
On motion by Hon. F. S. Miller, the committee of supply reported progress.
Mr. Deputy Speaker: I beg to inform the House that in the name of Her Majesty the Queen, the Honourable the Lieutenant Governor has been pleased to assent to certain bills in her chambers.
Clerk Assistant: The following are the titles of the bills to which Her Honour has assented:
Bill 122, An Act to provide for the Establishment of Local Services Boards;
Bill 146, An Act to amend the Municipal Franchises Act;
Bill 147, An Act to amend the Local Improvement Act;
Bill 148, An Act to revise the Certification of Titles Act;
Bill 156, An Act to amend the Securities Act, 1978;
Bill 160, An Act to provide for Compulsory Automobile Insurance;
Bill 164, An Act to amend the Assessment Act;
Bill 165, An Act to amend the Corporations Tax Act, 1972;
Bill 172, An Act to amend the Municipality of Metropolitan Toronto Act.
The House adjourned at 12:57 p.m.