31st Parliament, 4th Session

L009 - Thu 27 Mar 1980 / Jeu 27 mar 1980

The House resumed at 8:01 p.m.


Hon. Mr. McCague, on behalf of Hon. F. S. Miller, moved resolution 6:

That the Treasurer of Ontario be authorized to pay the salaries of the civil servants and other necessary payments pending the voting of supply for the period commencing April 1, 1980, and ending June 30, 1980, such payments to be charged to the proper appropriation following the voting of supply.

Mr. Nixon: Mr. Speaker, the Treasury critic for the official opposition is also away from the chamber tonight, so it lies with the honourable member who has introduced the resolution, myself and no doubt a participant from the NDP to have, I would suggest, a major discussion on the economic thrust of the province at this time.

I am informed by my colleagues, however, that a debate having to do with a shorter period of interim supply has already taken place in this session, and I know, sir, our rules about being repetitive are very strict, particularly with you in the chair, and it is not my intention actually to go over all of those points again even though, because of my responsibilities as your representative elsewhere, I was unable to attend the original debate.

The matter of interim supply is of extreme interest, of course, to myself and all other members. But I can recall, as can many our colleagues, the time when a motion was passed at this time of year, as we came to the end of one fiscal year, authorizing the Treasurer to pay the accounts of the province for a full year. Then we went into a very lengthy debate not even on that motion but on the estimates of expenditure which sometimes took us many months. I remember on one occasion we debated the matters clear into August, even though the essential motion permitting the government to spend the money had already been passed.

I sometimes still feel that the examination of estimates, if not the debate of the budget itself, is a bit futile. The debate of the budget, of course, is an opportunity where the opposition parties may get together and declare that they no longer have confidence in the policy of the government, and 1980 may very well be one of the years when that happens, if the democratic Socialists to my left would screw up their courage to join the official opposition.

That is a matter of course that remains to be seen. But our rules, as they have evolved over recent years, do permit the opposition parties, as well as supporters of the government if they so chose, to have a very full and free discussion of the economic policies of the government in this connection.

You may recall, Mr. Speaker, the former member for Sudbury, Elmer Sopha, used to berate not only the leader of the government, but the Speaker, the Clerk of the House and anyone else who would listen, in the days when we did not have a debate of a confidence nature pertaining to supply. With the changes in our rules, I do feel that at least we have some useful opportunities to bring our concerns to the attention of the government and to the Legislature and, of course, through the Legislature to the public in general.

The motion before us permits the government to pay the bills of the province until June 30, which is now becoming part of our tradition, a section of the year that usually coincides with the recess for summer after the spring session of this chamber.

The expenditures expected this year will be well in excess of $15 billion. An announcement was made today by a representative of the Treasury that the budget will be presented to this House, I believe on April 22. It will be at that time, of course, that the fiscal policies will be enunciated by the Treasurer (Mr. F. S. Miller). There will be a debate following, which in this banner year of 1980 may lead to very interesting political developments indeed. Frankly, I am one who hopes that is the case.

Hon. Mr. Norton: You are a hawk, then.

Mr. Nixon: It is not often I am referred to as a hawk, perhaps a well-fed hawk, with the doves over there opposite us and the chickens to my left.

The matters we are concerned with tonight have to do with the granting of interim supply and in the customs that have come down to us from many years, in fact I suppose centuries --

Mr. Lawlor: The British didn’t teach you very much, did they?

Mr. Nixon: Oh, you are fighting on your own ground again, are you?

The British taught us that before we grant supply it is possible to bring to the attention of Her Honour’s ministers any matters that are of concern in our own areas. The presenting of petitions or, I suppose, in another sense simply complaints from the constituencies, is very much a part of a debate of this nature.

It is not my intention to use the time tonight for that purpose but simply to say that we, on this side of the House, have already expressed our lack of confidence in the policies of the government. It is not our intention to move an amendment to this motion which would lead to a division at this time, but we look forward to an expression of our disappointment at the policies of the government, and in fact the injustices that lead from those policies, at a suitable occasion at the end of the debate on the speech from the throne.

Mr. Renwick: Mr. Speaker, I want to speak about three or four matters on this interim supply motion, if I may.

I may say to my friend who has just spoken that, of course, it was an NDP motion which just four months ago toppled one Conservative government. Our natural sense of moderation and restraint would indicate that we not repeat that immediately here.

Mr. Nixon: Moderate in all things.

Mr. Renwick: There will come an appropriate time when we will move a motion, either directly or by way of amendment, which will be the basis on which the government will fall and on which we will go to the country, but that time is not quite yet.

Mr. Nixon: You’ll never screw up your courage.

Mr. Van Horne: Like you have screwed up everything else.

Mr. Renwick: We are certainly not going to play chicken, I can tell you that.

The four matters I want to direct to the attention of the Chairman of Management Board of Cabinet (Mr. McCague) in the absence of the Treasurer (Mr. F. S. Miller) relate again to the sad announcement late this afternoon that four of the chartered banks have increased their bank rate to 16.5 per cent and the fifth of the leading banks will likely follow suit in the next little while. We have had an example in the two weeks under this so-called floating exchange policy introduced by the Liberal government in Ottawa of a point-and-a-half increase in the bank rate from 14 per cent to 15.49. Perhaps if I could round it out in accounting terms, I should call it 15½ per cent. That rate means that at 16½ per cent for the prime lending rates of the chartered banks tomorrow or the next day -- the beginning of the week at the latest -- there will be a further increase in the mortgage rate in the province.

For every one per cent increase in the mortgage rate, on $1,000 it is $10 and on a $30,000 mortgage it’s $300 -- an extra $25 a month in carrying charges on a normal transaction in a house on a renewal of the mortgage. I say to the chairman of management board, I don’t know about the people in his riding but I know the people in the riding of Riverdale cannot at this time afford these additional carrying charges for residential mortgages in the Riverdale area.

I spoke briefly the other night -- I think it was the night before last in this House -- on a number of matters and one of those matters was with respect to Bill 10 standing in my name on the Order Paper. It would provide temporary relief by way of an extension of term of the existing mortgages that will fall due during this year. I commend that bill to the government, not because I made the remarks but because it will elucidate the reasons I believe this Legislature has the power to provide that kind of temporary relief until this government and the government in Ottawa can sort out what, if anything, they are going to do to protect the residential home owners.

In my judgement, for whatever that may be worth, that is the crucial problem facing us at the present time with respect to the living costs of people. If there is one thing we need, and something this government and the government in Ottawa -- the present one, its predecessor, the Conservative government, and the one before that -- has failed to provide, it is a stable price structure, not only in commodities but now in the cost of money.

If this government wants to persist along the road where they wish to be defeated in this assembly, they need simply sit back and do nothing about that problem. Because they will not only be defeated in this assembly, they will be defeated in the country on that single question -- coupled with many other questions because no election is ever fought and won on a mere single issue. However, a short time ago we had an indication that perhaps the 18 cents on the excise tax was the sole single isolated incident, if one had to choose, which caused the downfall of the complementary government of the Conservative Party at the federal level.

Hon. Mr. Norton: It is only 16 cents now.

Mr. Renwick: Yes, we haven’t heard that yet and I gather we are going to sell off a little natural gas in order to keep it down to that level as well. Penny wise and pound foolish, I guess.

The third matter I want to address myself to is a question related to the balance of payments of the country and Ontario’s participation in it. I spoke again briefly on this the night before last and I don’t intend to repeat myself about those matters. I have a simple direct request to the Chairman of Management Board of Cabinet and I have a specific request that he relay it to the Treasurer.

Canada, in the year at present closing, has a $10.1 billion deficit on current account -- that is the account between Canada and the rest of the world in goods and services. I would like to see in the budget of the Treasurer, when he brings it down on April 22, a chart or some other form of presentation of the key elements in that balance-of-payments deficit and Ontario’s contribution to that particular deficit. I recognize that that deficit can be analysed in any number of ways. I am not suggesting for a moment I am knowledgeable about all the ways in which the analysis can be carried out, but let me say to the chairman of management board that there are four or five key areas of analysis that have to be done and then prorated, with whatever arbitrary accounting notes to justify the necessary division, to show what Ontario contributes to it.

First of all, there is a very significant $3.1 billion deficit, I think it is, on the automobile trade account with the United States. A goodly part of that is referable to Ontario because the major part of the automotive trade with the United States is in Ontario. We in Ontario are contributing a substantial part to that part of the deficit on current account.

I believe there is either a marginal surplus or a marginal deficit on the trade in other goods. To divide those goods between raw materials or semiprocessed goods and manufactured goods is another way in which the balance of payments in goods, as distinct from goods and services, can be analysed to show the extent to which there is a deficit on the manufactured goods account and the extent to which this province is responsible, being the major centre of contribution to the secondary manufacturing industry.

A third area of analysis is on the question of the business services which are payable for services of all kinds rendered to Canada, which Canada doesn’t need, but which it has to pay for because they have their origin abroad. The business services account has gone sky high over the last few years. They are continuing payments we cannot and should not have to make. We have the skills and the capacities within the corporate sector of the country to provide all of the services. In my judgement, a substantial part of that business services portion of the deficit is an escape hatch as an alternate to the payment of dividends or the payment of interest on capital debt.

The analysis of that business services account is absolutely essential. Since we are, in the words of Dalton Camp, the branch plant capital of the world here in Metropolitan Toronto, I believe the great bulk of the origin of those business service payments, certainly those referable to the secondary manufacturing industry, have their origin in agreements made with organizations in Ontario.

Let’s grow up. Let’s try to provide those services ourselves. In the analysis I am asking that the Treasurer present to us, I am asking what Ontario’s share is of the overall contribution made to this astounding deficit by payments on account for business services rendered to companies and to corporations within Ontario from abroad under so-called know-how agreements or transfers of information agreements.

The fourth area, as a suggested area of analysis for our purposes, is to show to what degree and to what extent there has been a deficit on the tourist travel account and to what degree and extent the province and the people of Ontario have contributed their share of that remarkably ascending deficit on the tourist travel account.

8:20 p.m.

I am not interested in these mythological arguments between academicians about whether they are cyclical or whether they are structural or whatever they are. I’m pointing out that of the $10-billion deficit, those four areas would make up for a goodly portion of it, and a goodly portion of the overall country deficit in those four areas could be reasonably attributable to Ontario. It would be a measure of the degree and extent to which this government, in co-operation with the government at Ottawa -- but not, for one moment, suggesting that this government doesn’t have a responsibility to come forward on April 22 with a new set of economic principles which will reverse over time the constant, unending indebtedness to Canada and of the province of Ontario abroad -- is importing goods and services; then, to that very same extent in excess of the goods and services we export, we have to make it up by importing capital.

If we’re importing too much, let’s start to cut back so that we can get out of this eternal treadmill of having to support the Canadian dollar abroad. We have to bring more and more capital into Canada which requires us either to provide a method for foreign investment from the United States because there is rumour of a find of significant natural resources in Newfoundland and the money is flowing through the American stock exchanges to the Canadian securities and stocks referable to that resource expansion, or we will find that the federal Minister of Energy, Mines and Resources, the Honourable Marc Lalonde -- as I was saying with the Minister of Community and Social Services (Mr. Norton) a few minutes ago -- is going to bargain so that the price he will impose on the rest of Canada in his deal with Premier Lougheed will be below what this government tried to impose on the people of Canada last December at the expense of having to sell off significant amounts of natural gas to the United States, rather than conserve that gas so that it can be used in an economical and reasonable way over a long period of time in Canada’s future for the next few months.

This is the third area which is of immense concern to me. We simply have to turn the economic policies around and start now to reverse them so that we are not constantly and continuously moving in lockstep with the United States and dependent so entirely on the results of their economy and the functioning of their world. I don’t think the people in Canada are prepared to put up with that continual inability to have some sense of independence and direction with respect to their own affairs; to be constantly told by the business community, supported by the government in Canada: “We have no elbow room; we can’t do anything else. All we can do is to move in lockstep with the United States or at least a very short distance behind the United States.”

If those figures and projections put forward by the Conference Board in Canada bear out -- and everything indicates they are not very far off the range of projections made by everybody else in the area with respect to increasing unemployment, with respect to increasing price instability and inflation, with respect to the lack of sustained growth in our economy, with respect to our enlarged and continuing to be enlarged current account deficit and with respect to the continuing inequitable distribution under any fair share representation of the net balance of income available to us -- to people in the province -- those are the kinds of things that this government cannot get off the hook about. It bears a portion of the responsibility for all of that downturn; it cannot escape the responsibility. It spent a goodly amount of time in the 1960s and 1970s telling us that the good things about the economy were because of its doing. It has now to share the responsibility for the downturn, and it has to devise and bring forward the economic policies that will make certain the long-range turnaround of this country can take place.

The fourth point is one that is somewhat technical but I want to speak about it. I tried to engage the Treasurer (Mr. F. S. Miller), but he tends to spar a little bit with me and never seems really to get around to answering it. Some time last fall I think -- it was last October -- when we had an interim supply debate, I was trying to talk about how Ontario on its own, and not as a supplicant to the federal government, should make a deal with Alberta for the redistribution through Ontario, which contributes so much of it, of some of the funds generated by the production and sale of crude oil and natural gas.

I was trying to suggest to the Treasurer that there must be some taxing mechanism of the revenues, generated at the pumps in Ontario, of the transnational oil companies operating in Canada and largely based in Alberta so that we in Ontario could have the benefit of a significant share of the revenues generated within this province from Ontario residents and thus receive additional funds.

I am not particularly keen about the proposal that we in Ontario should become a have-not province. I know the leader of the official opposition and my leader were speaking about it the other day. But I think there well may be a much better way rather than for a province of the immense capacity and diversified wealth of Ontario to have to become one of the have-not provinces. There would be something fundamentally unfair in my judgement. I think analysis would bear out that; that a country of this kind of stable and diversified wealth -- even if we are not quite able to get it all together -- should look after itself and, to the extent that it generates any surplus, contribute to the equalization payments necessary for the diminishing number of provinces which need such assistance.

I guess it is a reflection on the economic policies of this government that we now are in that position, that the wealth generated here is going to end up producing the kind of net figures, which, on a strict interpretation of the equalization formula, would entitle us to some benefits.

What bothers me is the traditional method of taxing corporate profits in Ontario. This is the same method, which was agreed by all of the provinces with regard to a transnational corporation doing business in various provinces, for the formulas that would be used to determine to what extent the profits were apportionable to each of the provinces -- Ontario, in our case -- so that the tax rate imposed by this Legislature under the corporation tax could fasten upon that portion of the allocated total net profit of those transnational corporations, subject to tax, on more or less a formula basis related to sales, payroll and some technical reasons.

That system is about to go by the board. I was curious the other day. I am not certain how it operates, but the Minister of Finance in Quebec, the Honourable Jean Parizeau, has introduced, I gather, almost a sales tax at the pump related to the actual sale price. That doesn’t seem to me to meet the problem, because that is a user tax and, unless there is something I have missed, it would very much be an add-on tax. This would simply be further moneys coming out of the pockets of the people who went to the pump.

I guess I have missed something, because Mr. Parizeau is a considerably brighter economist than I am. But that seemed to me what he was saying, although I haven’t analysed it.

8:30 p.m.

Mr. Lawlor: He wants to blame the feds for the increase.

Mr. Renwick: He may want to blame them, but I don’t particularly want to see us go from the kind of number of cents per litre that is now the gasoline tax in Ontario to some sales tax on the price at the pump.

It seems to me that would simply add an additional burden to the already hard-pressed residents of the province. It leads me back to this question of the diminishing base of the corporate tax with respect to those major transnational organizations which are moving their offices out to Alberta, because it now bodes a fundamental change in their organizations. It is a fundamental change in the sense that the old system of allocating profits across the country in transnational operations on the basis of sales and payroll is going to give way to these theories of centres of profit.

That leads me to the next question of transfer pricing within multinational corporations, which is between constituent parts of multinational corporations, and which has nothing to do whatsoever with market prices. The question is how much one constituent part charges another part for the goods supplied to that constituent part which, in turn, may sell them to the public.

Let me see if I can express it. I am indebted to Mr. Michael Gough, who is one of the main legal advisers in a financial sense to the Treasurer of Ontario, for sending over to me, after my last participation in the interim supply motion last year, a jaw-breaking book that only my colleague from Lakeshore (Mr. Lawlor) could properly understand and called Fiscal Transfer Pricing in Multinational Corporations, and a legal case to try to illustrate it. I want to try to simplify in my own words what I think the problem is going to be.

I am going to use the name Imperial Oil simply as an example. I do not know whether what I say relates to the reorganization of their corporate structure or not. I am going to use it simply because it’s the leading oil company in the country at the present time.

Let me assume that Imperial Oil, formerly located in Ontario -- that is, having its head office here, having its seat of control here, being subject to tax here, selling its products across the country -- was subject to an allocation of its net profit on the basis of sales and payroll so that Ontario had a substantial part of the profit of Imperial Oil allocated to Ontario for taxation under the Corporation Tax Act of the province.

Anyone can see that if that amount of allocated profit in Ontario were to shrink, then the rate wouldn’t matter; we would simply start to lose revenue, and very significant revenue. The very revenue we are arguing about is the revenue from the production, distribution and sale of crude oil and natural gas.

How is it that problem is going to rear its head for us? I’m using Imperial Oil only as an example -- I don’t want to say that this coincides with what they do, because I am not privy to their world -- but it’s going to come about if Imperial Oil transfers its head office, the seat of control of its operation, to Alberta; then Imperial Oil, instead of selling its oil here, will set up a sales company in Ontario.

Let us say that because the corporate tax rates in Alberta are low, and because that’s the place where they generate the oil and from which it is shipped through to Ontario, they decide that they want to maximize their profits in Alberta from their whole cross-country operation, what do they do? It is not by reference to a market price at all that it determines the price at which Imperial Oil will sell its oil to its Imperial Oil sales company in Ontario.

It doesn’t take very much to say that if they want to maximize their profits back home they sell at a high price to the sales outlet company in Ontario. The higher that price is, the closer it is to the retail market price and, therefore, the profit available in Ontario is only the profit of the sales company. That is the difference between its gross revenue and the cost of the product they sell, which has come through at a maximum versus the Minister of Finance for the proving to do with the market price at all. Sure, it’s a market price out here, but not as between Imperial Oil Alberta, the major part of the enterprise, and the sales outlet in Ontario.

I happen to think that what has not been a problem for the province is not very far off. Certainly the reverse has been true. Again, I’m indebted to my friend Michael Gough for sending over to me the case of International Nickel Company of Canada versus the Minister of Finance for the province of Manitoba. In that case, in the Court of Appeal, that’s what happened. The sale price was fixed to the other part of the corporate organization at a level that reduced the number of dollars that were available as the pool to be taxed in Manitoba. It was upheld. That’s the course which corporate profits are going.

Let me be very clear. I hope there’s something wrong with what I’m saying. I hope there’s a better way of dealing with it. I may not understand it. I may not understand what Mr. Parizeau has done. I may not understand what is happening when one looks in the telephone book today as compared with the telephone book five years ago to find out whether Imperial Oil, Gulf, Texaco and Shell are still here in the same way they were then. They aren’t. A number of them are out west.

It may well be that it does not affect only the up-front and centre part of the revenue problem -- that is, the oil companies as such -- but I have a feeling there are substantial other economic enterprises that are moving out to Alberta because of favourable tax rates; because of all of the reasons that people move out. In a funny way, I have the feeling Ontario is going to be in that shrinking pool of available corporate profits to which our Corporation Tax Act will apply.

I don’t know whether I’m right. I spoke with the Treasurer, and I have his agreement -- not that I expected he wouldn’t agree -- and I expect to sit down with Michael Gough and some of the people in Treasury to see whether I’m crazy; whether the fear I have is one of real concern or not. I happen to think it is, and I happen to think it bodes very poorly for the future of our Corporation Tax Act with respect to the major transnational companies which formerly had their main operations here and which had our profits allocated on the basis of sales and payroll. Our sales and payroll were very high in Ontario; so we got a goodly part of that pool.

Now, I think, it’s going to be the other way around. With the combination of the transfers out there and the transfer prices being set on a nonmarket basis but for the purpose, in corporate jargon, of a transnational organization with various profit centres established, they decide arbitrarily where they want to maximize the profits. They maximize the profits there at the expense of all of the constituent parts. That is a matter of major concern to me.

8:40 p.m.

Those are the four matters of immense concern to me. The first is this continuing upward rise, regardless of whether the rate floats half a per cent above the auction price for the treasury bills, or however it is working out, that brings us tonight at this point to 16.5 per cent as the going prime rate of the chartered banks. That leads me to the question with respect to my concern, a concern which I am sure is shared with everyone about residential mortgage rates, for those who are having mortgages fail in this year and my anxiety that the government seriously consider some version of that temporary relief bill I put on the Order Paper, Bill 10. Then there is a plea to the Treasurer to put into the Treasury document some analysis along the lines which I suggested, or along some other lines, regarding this problem of the current account deficit of the country and our share in contributing to that overburdened deficit and the problems that causes for us.

Fourth, there is this vexed concern and fear I have -- a combination of perhaps hope, but mainly fear -- that somehow or other the corporate structure of organization of the transnational companies is being changed in such a way that we are going to have a shrinking pool of corporate profits available for our corporations tax.

I appreciate the courtesy of the chairman of management board in listening to those remarks. I hope that he will convey them to the Treasurer and that in due course I may have some response to them.

Mr. Lawlor: Mr. Speaker, in the absence of our Treasury critic, I wish to make a few rambling remarks tonight too. The first remarks I have to make are on a document received fairly recently in all our offices, called Supplementary Expenditure Estimates, 1979-80, which indicates, without going through it with any thoroughness, that there is a sum of $400 million added on as supplementary estimates to last year’s picture.

That argues for me a fair incapacity -- and I suppose a fair amount of it must fall upon management board -- to assess shrewdly and with prudence and perspicacity what the government’s expenditure estimates are likely to be. Four hundred million bucks in differential between what they set forth to us initially and what they end up at is a startling sum, which argues to certain deficiencies in the government apparatus in that way.

The second matter I want to speak to for a moment is interest rates, with perhaps a suggestion. When in the United States 10 years ago individuals were finding trouble financing mortgages because of escalating real estate values, I believe the way in which they basically handled it, particularly through their national housing auspices, was to extend the life of the mortgages. What were previously 10-year mortgages, say, amortized on a 15-year basis, became 15-year mortgages amortized on a 25-year basis.

Under the Veterans Land Act in the United States, they extended them to 35 and 40 years, et cetera, on an amortization period. If we extended the mortgages, which in Canada, I would think, are basically done on a 25-year basis now, to something like 60 years, we would cut the payments per month in half.

There is a counter-argument, as there is in every one of these things that affects our lives. There is a shadow side; that is, don’t estimate what the amount of interest at the end that day would be, because it would be in many multiples of the size of the principal. But the mortgages would come open every five years in any event, as they do under our present Mortgages Act, giving any individual the opportunity to pay as much off the principal as he was able to do so at that time, thereby cutting into both the interest side of the fence and the mortgage itself and terminating it. I could see nothing wrong with the basic principle of the extension.

The private market is going in precisely the opposite way. In the past few days the Royal Trust, for instance, has announced a scheme of a six-month mortgage, during which no principal is paid, only interest. That is a little like a moratorium. Back in the old days when things were really bad in Ontario, if one remembers, they brought in legislation -- my God, it was their government too -- under duress, of course, of the heartiest kind, which was resisted up until 1933, with respect to where only interest, taxes and insurance had to be paid and the principal stood outside and nothing had to be contributed to it for a moratorium period.

Using these concepts, perhaps by the responsible people in this government whispering in the ear of the financial magnates with whom they are so closely associated, it might be possible to find some alleviation by that route.

Standing here, I will confess I am a little leery about the business of subsidization. It has its shadow side too, namely, that the money lenders et cetera, knowing they are going to be the beneficiary of government largess, not directly, but immediately and indirectly, would have no incentive in those circumstances to reduce the mortgage. On the contrary, it might even escalate the interest rates by a point or two in that particular area and we might very easily get 18 per cent first mortgages.

Of course, the economy is completely out of control. The government hasn’t got a clue what to do with it, the Liberals much less so; it is a total vacuum. Look at them in Ottawa and listen to their economic strategy here in Ontario. We are in a parlous state indeed, as things stand.

I am going to make a couple of suggestions under that head as I go along tonight. Before I do, I want to make two or three economic points. When we listen to the antediluvians talk, and they are pretty highly placed these days, we hear people talking about printing money. They say the printing presses at the Royal Canadian Mint in Ottawa are going night and day, and the pouring out of dollar bills and currency is the cause of our problems. I hear people literally talking in those terms, saying that if they slowed up the presses or put a bomb under them, all our discontents would be rectified.

The fact is, it is in the private sector, and not the public sector, that the escalation or multiplication of money takes place. It is not printing in any literal sense. The creation out of clean air of currency and of the wherewithal with which to do financial transactions -- the borrowing power and the lending side of the thing -- is done through the banking institutions.

Everyone knows the basic elementary principles of banking: For every dollar deposited, $12 theoretically can be lent. No bank goes to that extent. They haven’t gone out of their minds yet to create a 12-to-one ratio, but the ratio is $7 or $8 to a $1 deposit. This is a book entry. Every time you or I go, or a manufacturer goes, to borrow money, that is the basis upon which the money is lent. Based on those deposits, we can see there is enormous elbow room for the banking institutions to move in a purely hypothetical heaven. Would that we were able to operate so magnificently with other people’s cash by creating mythologically something that doesn’t exist, but which has to be bloody well paid, because we are the ones upon whose head it falls.

8:50 p.m.

Such are the banking institutions of the country. So I say that it’s in the private sector that element of inflation is generated. I wish we could dispel some of the myths that percolate through our society with the Barry Goldwaters of this world -- for whom there is seemingly enormous sympathy: “He knows in his heart that he’s right.” That’s Smith, you know. “We know in our guts that he’s nuts” was the response in that election.

The second element I want to talk about in the inflationary picture is the sources of inflation, an element which I don’t think has ever been particularly elaborated. The main reason for worldwide inflation at present is the Vietnamese war. Hundreds of billions of dollars were expended on that war. Americans were purchasing all over the world, particularly in the European market, purchasing on such a vast scale that their money depreciated in value over a period of about seven or eight years. Lyndon Johnson and the Kennedys continued that war; they fought that war with vastly expanded expenditures while seeking to retain a full-blown domestic economy. It was the first time in history that anyone had tried that trick, and it simply hasn’t worked.

What is happening at this time in our history is that the repercussions and the consequences of that policy are seeping through the economy. It’s not the Americans only, for heaven’s sake, but the European economies -- because they picked up these substantial funds from the Americans; they didn’t get themselves involved in this and they were able to resist it to a better extent than anyone else. That’s the reason for the present relative munificence in those countries.

The capitalist concept, the Financial Post concept, is that the whole thing was generated through the Organization of Petroleum Exporting Countries and the fourfold escalation in oil prices in 1973 as a result of the Arab-Israeli war and the resentment that was built up in the Arab nations against the western role in that matter. Of course, that was a second factor, and an important one too, but diminished in significance over against the one I just finished mentioning.

The third area I would like to mention is that there is an increasing concentration going on in our economy. Whereas 30 years ago there were 200 to 250 major corporations in the United States, there are only 100 now. There are ongoing merger and monopolistic practices. According to our competition policy, there’s nothing wrong with that -- that’s always been highly beneficial. But in fact what arises out of monopolistic practices, as with General Motors, is a thing called administered prices.

I believe my colleague from Riverdale (Mr. Renwick) just made some reference to it, that this province is going to be the victim of administered prices from the oil magnates within a very foreseeable time. They set the prices. The market has absolutely nothing to do with it. The price is administered. They set their target goals and, whether they produce great or little, those margins must be met. So there’s none of the ancient operation of supply and demand or any of the play in the market that there used to be. Therefore, stagflation becomes the norm and there’s no way of defeating it; it’s working into the very marrow of the economy. That’s the kind of world we are living in and the kind of economy we are suffering from.

I suppose means can be devised through law and taxation policies to counteract that trend, but the main thing is to recognize the trend and to acknowledge that it exists. But the government refuses to do this, as far as I can see. It is totally incapable of coming to terms with it. It won’t admit that the free market isn’t operating in its plenitude and that all the benefits we have enjoyed in the past and what it says we are going to be enjoying in the future stem from that market. The government won’t admit that it is no longer free and that it must deal with it in terms of tackling that central issue just as it stands.

The business cycle was supposed to have been overcome in the 1960s. Under the new Keynesian theory, the troughs and the heights were supposed to be evened out, and we would finally gain control over the economy. On the contrary, one can now see that it goes into recession after recession under shorter durations of time. One of the inequities of this situation is that these recessions are sometimes, and very often, artificial. They are induced. They are made and deliberately provoked.

I want to quote from a former guru of the American Treasury, Arthur Burns, who said: “Most people now realize that our economy is not recession-proof and that our government’s ability to deal with recessions, to say nothing of its ability to anticipate or forestall them, is quite limited. Most people also understand that, however regrettable recessions may be, it is a mistake to view them as simply being pathological phenomena. In fact, recession often performs an unavoidable function by forcing managers to improve efficiency, by enabling interest rates to come down and by wringing some of the inflation out of the economic system.”

Fourthly -- and he didn’t say this -- its function is to bring labour to heel, to take its forcefulness and its militancy away from it because of depressed conditions all around. This is the way of restoring some kind of health to the economy.

Thinkers as distant as Herbert Hoover and Karl Marx would agree with Burns and, although Burns or Hoover would not put it this way, it can be added that the process they described is rooted in a system of unplanned, profit-maximizing production with the correlative structure of maldistributed wealth.

How do they seek to deal with these ups and downs in the economy, induced or natural, as this economy stands? We have got a real kook in the world at present. We have got lots of them. I am one of them, but there are a few more. One of them is a guy by the name of Friedman in Chicago. He has been over telling Margaret Thatcher what to think. I hope Nixon didn’t run across his path.

This troglodyte is the chief spokesman for all the monetarist trends that are taking place as a way of solving things. They have got away from fiscal policy pretty well entirely and are now relying solely on interest. This is the bankruptcy or the desperation of the system. Having despaired of the use of the cyclical budgeting and despaired of taxation policies, or not having being willing to bring them into any efficacy, they have turned to interest as the sole chrysalis by which they can solve the whole economies.

The theory is if you can raise interest high enough you will slow down the economy sufficiently to have some long-term effect. Friedman says some of these things take an awful long time, as much as 10 years, for their impact to be felt. He says it is just now beginning to work after three years through the British economy. He says: “Stick to your guns, Margaret. Keep those interest rates and bank borrowing as high as you possibly can.”

I suppose he gets up in the morning when it has gone up a point and a half from the previous day, eats a hearty breakfast and rejoices because I am sure he has a built-in indexed pension plan upon which to retire. These fellows do tend to look ahead.

9 p.m.

This government is falling into the same snare, and it is the victim. It will bring a crash to the total picture. It isn’t so much regret on my part, but the system the government so much reveres and feels so solicitous towards will fall in fairly short order about its ears. In this regard, as the good bishop said the other day: “It is better to give away your rings than to have your hands cut off.”

I have one other point on government spending. I think it’s fairly common knowledge, and once in a while one sees an article on the editorial page, say of the Star, about government deficit spending. There is nothing detrimental in government deficit spending. It is an investment in the future. If it is used for the production of wealth and if the borrowing for the deficit is done internally to the economy, then it is simply a circulation of internal money et cetera that is available. The real fault comes when the borrowing is done externally and the dividends, interest and collateral payments go out of this country into other hands. That is a drain on the economy; that will eviscerate or take all the strength out of the operation.

As long as it’s held internally -- and a great deal of our debt can be; most of our debt at present is held by pension funds internally generated in Canada, spent in Canada and utilized in this country, backing up the dollar both here in the province and on the federal level -- that can be and, in terms of a stimulation for the economy, is the only way in which that stimulation can take place. So all the shying away, all the hammering on the desks and the Treasurer’s Neanderthal policy with respect to this seem to be completely beside the point, and he is spoliating our own economy here in Ontario by a too rigid adherence to some out-worn orthodoxy that he picked up -- I don’t know where -- in some remote place.

I have three rostrums that seem to be necessary if any mending is to be done to the economy. The first one is that I don’t think the western world and Ontario, and certainly this country in particular, are going to solve their present economic difficulties, which are escalating in intensity every day. There will continue to be increased unemployment at the same time as inflation continues to escalate. It’s all around us; it’s appalling.

There is a certain takeoff point for these things. I don’t know whether we have reached it or if it is in the process of escalating right now. It’s shooting up like a rocket. It seems to be the case, if one looks at the bank rates. This is one of the best indexes of the thing. Once it takes root and begins to spiral, there is no knowing where it will go and what one can do about it.

The only thing that has been discovered -- and my friends all shrug their shoulders now, everybody has given up the ghost -- is that it has to do with price and wage -- but mostly price -- controls. We have to reintroduce into this country a price and wage mechanism of control. It doesn’t have to be elaborate but it has to be highly selective with respect to the peaks of the economy, the banking situation, steel, major chemicals and the 60 major industries.

New Democrats are not supposed to say what I’m saying at the present time.

The last experiment under Trudeau was such an abysmal failure that it turned everybody against the concept itself, particularly the trade unions. I don’t blame them a bit. They were the targets; they were the only ones who fundamentally suffered in the whole process. The next time it is introduced -- and it will have to be introduced within the next three years; I don’t care who is in government, they will bring it in. Otherwise, the shattering effect of the rocketing of the economy is going to be overwhelming, and the whole house of cards will collapse.

I look forward to highly selective but very determined price controls over the economy that will filter down and have an immediate repercussion on wages, because I don’t think wages are that difficult to keep in line; they are infinitely easier to control than the other. To say that only in wartime conditions is there sufficient zeal and generosity on the part of the whole community to accede to these measures -- well, there can be a kind of turbulence, a kind of violence in time of peace that can easily resemble war if an economy is shattering and falling to pieces in front of one. That realization will begin to dawn.

There is a second thing I would like to suggest for the future. I am very strong, not on worker control as such, but on management-labour participation in the running of industry. If there is any solution to labour problems and continuing strikes -- I would take Chrysler as an example and even give some credit to Herb Gray. He is a bit of a left-wing fellow, a kind of independent thinker. Herb tells Chrysler, “If we’re going to give you all this largess to prop you up, we want some of that equity; we want to participate.”

It seems to me it would be a very feasible thing to have some representatives -- knowledgeable people, perhaps an accountant or two, some economists and environmentalists, some consumer advocates and workers in the plant, along with men who are singled out as specific management personnel -- sitting on the board of directors, not just at Chrysler Corporation, but also at most of the corporations in this country. There would be a great deal more peace in the world and far deeper understanding, because they would be responsible to some degree for management decisions. While we can’t use the German model, because our conditions here are quite different, at the same time there must be a will to bring about a participation and an ongoing colloquy between the two deeply divided sides.

America lives on conflict; it is called the power of positive thinking: “The more hostile to you I am, the better for both of us.” We try to make something affirmative or positive out of sheer hostility. That is both morally and psychologically the most backward basis on which one can set up a country that I can possibly think of; but the reason socialism hasn’t gained much power in America is precisely that this conflict has been institutionalized. Everybody wants to perpetuate it, each seeking his own best interest to the total detriment of all. The concept of a common good or an overall benefit is severely lacking.

That brings me to my third and last point. It is ironical that the more life becomes social the more atomic it also becomes. They are pouring on to the market these days any number of texts about the isolation, the loneliness, the anomy, the sense of hostility of individuals -- each one narcissistically living for himself. That was attacked by the flower children of the 1960s, and it has now grown back as a central feature into the total society -- the most retrograde step imaginable. Instead of participation along the lines I was speaking about, we are becoming more alienated from each other and, therefore, from ourselves. A person who is divided from his society and from his neighbours is a divided human being.

9:10 p.m.

A certain member of this House has written a certain book about this very problem. He tried to give it an element of song, but it’s nothing particularly to sing about. It is probably the most devastating aspect of the society as it is emerging at present, which means that it again will make a contribution to collapse and anarchy. If one looks around at the present time, one sees the spread of this disease is pathological in form. I think it is something we all, particularly legislative people in positions of responsibility for shaping society through the instruments of law to the extent that we can do that, should be particularly aware of and wary about. That is a strange diatribe for a matter of interim supply, but I had to fill in the gap somehow.

Mr. Charlton: Mr. Speaker, I too was asked to say a few things tonight in the absence of our Treasury critic. Isn’t it amazing, for such a small fellow, how many of us have to come to fill in for him? I won’t be quite as long or as philosophical or interesting as the last two speakers, but I do have a couple of things I wish to raise tonight. In the absence of the Treasurer, I’ll direct my remarks to the chairman of management board. I’ll comment at the outset that I notice the Minister of Revenue (Mr. Maeck) is also in the House tonight. Perhaps he can take note of some of my comments. I ask him to take note although I understand, as he has told me so many times, that the majority of the programs his ministry administers are not his to take, to change and to use as a policy, but are set by the Treasurer. For the purposes of my comments, I will hope they are referred to the Treasurer, but I hope the Minister of Revenue will also take note of them.

We’ll start out talking about property tax reform for a few minutes again. We have reached a situation where things are happening. Some of them appear to be nothing, and some of them aren’t talked about. The major overall problem, though, is not dormant. The Minister of Revenue initiated a program under section 86 of the Assessment Act a year and a half ago, wherein 12 or so municipalities equalized under section 86 in 1978 for 1979 taxes, and another 90-odd, I believe, did so last year for this year’s taxes.

In some respects, it has provided some beneficial change. It has also provided some problems that, although small in numbers in terms of people and properties, were rather significant, perhaps even astronomical, in terms of the size of the individual problems. Under the section 86 program, we had areas of municipalities that were overassessed getting reductions of four, six and seven per cent over fairly large areas of the municipality. There were some properties with a more rural nature, larger in size, with fewer services for the most part, and properties where, in many cases, the people who owned them had absolutely no idea of their real value or even of their potential value because these were real honest home owners, people who bought the properties 35 years ago for $135 and built a house on them. They had no concept of what they were really being confronted with until they received assessment and tax increases that ranged anywhere from 70 to 100 per cent and, in some cases, up to as much as 5,000 per cent in one year.

I mentioned at the outset that some of the changes were going on and not being spoken about. I refer now to some policy changes that occurred last fall and with which the Minister of Revenue is now having some problems over and about which I’ve talked to him a number of times. The problem was brought to the minister’s attention that under the section 86 program some of these excessive things were happening. For whatever the real rationale was, some changes in policy were made to try to deal with at least some of those. We got into a formula situation where I would assume the minister approved a policy, even if he wasn’t exactly sure what it was he was approving, where, on residential undeveloped land, where a developer held the land and went in and registered a survey, under normal circumstances under the Assessment Act that survey would be required to be assessed at market value or some percentage of market value that was equal to the percentage used in the residential sector of that section 86 equalization that was being done.

In some instances that meant for the developers rather large assessments and tax increases of the nature of the 70 per cent, 100 per cent or 1,000 per cent and, in some cases, 3,000 and 5,000 per cent. Under the current or old assessment system, however the House would like me to refer to it, raw land was very rarely ever assessed at the same rate as the land in the rest of the municipality until such time as it was developed. In other words, if a developer bought a farm and put a registered plan of subdivision on that farm, until that land was developed or at least mostly developed, most likely the total assessment on the farm would be taken and divided up among the lots.

I guess that was the bottom-line procedure in a lot of municipalities. There were a number of variations that went on across the province between that procedure and what should have been happening under the legitimate terms of the Assessment Act. However, when the legitimate terms of the Assessment Act were applied, I would assume again -- because I wasn’t there in the minister’s office or in the office of his director of the assessment division when the complaints came in -- that the complaints came in and the changes in policy occurred as a result of a large number of complaints from some fairly substantial, powerful complainants, from fairly large developers like the developer whose case in the Ottawa area received a fair bit of publicity over the past number of months, which was in Kanata.

As a result, instead of applying the real letter of the Assessment Act, the market value or the percentage thereof, which was equal to the rest of the residential sector in that municipality, we got into a situation where the policy was changed to say that, where a registered plan of subdivision was put in place, the land would be assessed at only one third of market value, or the relevant percentage.

9:20 p.m.

When all the major services had been put in place, the land would only be assessed at two thirds of market value, and the land would not go to full market value, or the relevant percentage of full market value, until such time as the development on that property was completed or the developer no longer held 50 per cent or more of the lots in the subdivision.

I would assume the minister felt under the circumstances that was a fair and equitable procedure to assist a developer in the holding period. Unfortunately, the policy, and I have suggested this to the minister in discussions we have had, with an almost total negation of the whole concept of market value. This was the concept on which this equalization was supposed to be based and which was supposed to make the tax system fairer.

Ultimately, when one sector is given a break like that, somebody else has to pick up the tab. I mention again the Kanata case. We don’t have exact figures, but we have estimated that some $620,000 of assessment was lost as a result of the policy change in that particular municipality and that some $32,000 worth of taxes were lost to the municipality. Somebody has to make up those taxes in order for the municipality to end up with the number of dollars it felt it required in the first instance. Logically, and as happens in every case, to make up the difference of that $32,000 there is a general mill rate increase.

The minister has made it clear to me that the whole situation is being reviewed and that he understands there are some problems there. The municipality in question is screaming to get its money back, because it doesn’t want to stick the rest of its taxpayers with that increase. Something is going to have to be done.

I would like to see the minister not only sit down, as he has suggested he is doing, and have a close look at the Kanata situation, but also have a look at what the policy changes have meant right across this province, in dollars and cents -- assessment dollars and tax dollars. He should look at who is getting the breaks under this policy and how much of an increase it is going to mean for other taxpayers in the municipality in order to carry that burden.

The other problem with last fall’s policy change is that in the instance of the 12 municipalities that first went under section 86, the assessment loss and the tax loss was clear and obvious to them, because they got an assessment roll and then they got a policy change which gave them a new figure on the development lands. Those municipalities that are going on section 86 this year -- those municipalities whose assessments were only equalized last summer and last fall -- are not at the government’s door screaming about whatever numbers of dollars this policy change may have cost them, because they have no idea; they don’t know.

Some of the more sophisticated municipalities may have done some work on it; I don’t know. I don’t even know how many of the 96 which went this year would have development lands of a magnitude that it would be very significant but, of those 96 municipalities, there are very few that even know of the potential losses, never mind anything else.

I would suggest to the minister that he take a look, when he is going through this process, at exactly what the province-wide picture is. How many dollars of assessment are we talking about that have been lost? How many dollars in taxes does that reflect? The amount varies from municipality to municipality depending on the mill rate, whether it is a region with another mill rate and all the rest of the things that go on in the tax structure. How much money are they getting from the province in transfers and so on?

Did he have a look at the total number of assessment dollars lost through this policy change and the tax dollars? Did he also have a look at who it is in those municipalities for the most part that is having to pick up the difference?

The thing that has come out of the whole static position we have been in concerning property tax reform is that, as I understand from the Treasurer, the government has set up a cabinet committee to discuss property tax reform. I am not sure which ministers are involved in that committee, but I would assume there would be the Treasurer himself, probably the Minister of Intergovernmental Affairs, probably the Minister of Education, the Minister of Revenue and perhaps one or two or three others. I am not sure. But my understanding is that this committee will be looking at the whole problem of property tax reform this year. It is to be hoped that committee will be making some decisions and proposing some directions before the end of this year.

I would suggest to the chairman of the management board that he pass on to the Treasurer my concern that there at least be no more quiet, behind-the-scenes finagling with the system while they are having a look at it. If he is going to make changes like the section 86 change where he is going to get up and talk about it publicly so that, if it happens to be a totally unacceptable change and there is a big public backlash, he can back off before he makes a mistake, then that’s one thing. But let’s not have any more changes in policy which affect the taxes people pay without talking about them publicly and perhaps discussing them with the committee itself because, if we create a new problem by a policy change, it is just another problem this committee is going to have to solve before it can come back to this House with some kind of proposal for a new direction in property tax.

I sincerely hope the committee is able to deal with this question this year. I can recall the presentation of the first budget I was here for in 1978. I think it was the first full budget because in 1977, when I was elected, everything that had been introduced before the election was reintroduced and we didn’t go through the whole process. A lot of things, for me at least, were missed because of the rush we were in.

That 1978 budget -- we are now two years past that, and I would assume from the throne speech that the things I am going to talk about in a moment will not be in this year’s budget either; there were no indications of them in the throne speech -- the 1978 budget proposed a new formula for property tax credit. It would have created the first increase in the property tax credit since its introduction, I believe, in 1974.

Unfortunately, the new formula has never been implemented. We do not now have the advantage and the use of that formula, because the formula was tied to the introduction of property tax reform. The then Treasurer, Mr. McKeough, said very clearly that the formula would substantially increase the benefits for low-income people, people on fixed incomes and seniors in this province -- and it would have -- but the new formula would not be put in place until such time as property tax reform was implemented in this province. We still don’t have any indication of when we will get that.

9:30 p.m.

It is now 10 years since we first started talking about property tax reform, market value and all of the other things. We are going on 11 years past that mark and property taxes in this province have gone up 88, 90, 92, 93, 95 per cent in varying municipalities across this province. I would suggest that most people’s wages, most people’s ability to pay their property taxes, have not gone up by anywhere near that degree in that same period.

I would suggest most certainly, for example, that property taxes in the last five years, since 1975, have gone up roughly 50 per cent -- some slightly less, some slightly more, depending again on the municipality. But most people’s wages certainly have not gone up by 50 per cent since 1975, and certainly not with three years of that five-year period under wage and price controls. As my colleague pointed out, that period dealt hardest with wage earners in this country and the wages that they earned, so most certainly people’s ability to pay their property taxes has not increased by 50 per cent or anywhere near that amount since 1975 but the property taxes have increased by that amount.

I raised this matter with the Minister of Revenue two years ago, I raised it again last year and I raise it again now. There are all kinds of people in this province, the very people whom the property tax credit was intended to assist and the very people whom the property tax credit was intended to provide the maximum assistance to, some of whom are not now getting any credit at all. Their wages have gone up, and when they take out the two per cent of taxable income at the end of the calculation, that figure is substantially increased but it doesn’t mean their relative position in the economy has increased nor does it mean their wages have increased relative to their property taxes.

Many more who still get some credit get a much reduced credit from what they got five years ago. Even those that are still getting the maximum credit -- those people on pensions; whether they be disability pensions and they are only 55 years old or whether they be old age pensions and supplements and they be 85 years old, it makes no difference -- those people on fixed incomes, the people right at the bottom, the people the property tax credit was intended to assist the most, those people who have not even come close to keeping up with the escalations in cost, who have fallen substantially behind not only property taxes but every other cost in their lives over the past five or six years since the property tax credit plan was implemented, those people, even if they are still getting the maximum credit, are not getting what they used to. When we work out their calculations -- and the minister well knows this, because he probably does some seniors’ income tax in his riding; and if he doesn’t, his assistant does -- I am sure that he runs that kind of operation, because I and my assistant have done several hundred this year -- these seniors are getting back, depending on whether they are renters or taxpayers, from about $310 to about $425 in Ontario tax credits. That includes the seniors’ tax credit. That’s not just a straight property tax credit.

If they are not seniors, if they happen to be on a disability pension or if they happen to be just one of those people who work for the minimum wage -- they don’t get the extra $110 credit a senior gets; they are getting substantially less again. They are in the $270 to $325 range. All of those people are now getting less than half of their property taxes back; but if you look at the average property taxes when this tax credit plan was implemented, those very same senior citizens were getting almost all of their property taxes back -- not quite all, but almost all. Now they are getting far less than half back. It is an inequitable program that we have to deal with and we have to deal with it soon.

We have seen proposals and we have heard it talked about, but the government has said quite clearly, “No changes, no increases, until we get property tax reform.” So I suggest -- I even beg and implore -- that the Minister of Revenue and his colleagues, the Treasurer and the others who are involved in the cabinet committee on property tax reform, as quickly as they can possibly get their act together should come into this House with some kind of a proposal that we can deal with.

Hon. Mr. McCague: Mr. Speaker, it has been a pleasure to listen to the member for Brant-Oxford-Norfolk (Mr. Nixon), who didn’t take long to say the little bit he had to say, and to the three members of the NDP who took a long time to say very little. However, I do appreciate the comments of the three members from the front bench who, over my term here, have made quite a contribution to the debates of this Legislature.

The member for Brant-Oxford-Norfolk called upon the NDP to screw up their courage. I think they are a little too smart for that. They really don’t want to see any opportunity given to the honourable member to screw up a lot more than his courage. I don’t think he will get the opportunity, but should he ever --

Mr. Nixon: You’ll make a great bed fellow with the NDP.

Hon. Mr. McCague: I will take my cracks both ways.

The member for Brant-Oxford-Norfolk mentioned that on many occasions the estimates process and the debates on interim supply are really to a great extent a waste of time. We have again proved that this evening. I think there is a real opportunity in this House for the three parties to get together and to reassess their position on debates of estimates. Over the years I have sat through several of those sessions, and the odd thing to me, as a member from the country, as is the member for Brant-Oxford-Norfolk, is that we are in estimates debate and money is very seldom mentioned.

We get dissertations like the one from the member for Hamilton Mountain (Mr. Charlton), who stands up and goes on and on and on about a matter that really has something to do with Revenue rather than the Treasurer’s (Mr. F. S. Miller) side of things or my particular side. So I think it would behoove us all to rethink our position and probably go into some of the debates that the member for Riverdale (Mr. Renwick) would like us to get into -- those of national unity and Confederation and so forth; show a little more interest in the future of our country instead of just having a little bit to say about something that might be of interest to somebody in our particular riding.

I will bring to the attention of the Treasurer those things which have been mentioned by the various members who have spoken tonight. I think that, as has been said, we do have some problems in this province and in this country, but I really think we are all fortunate to be Canadians and, moreover, to be Ontarians.

Motion agreed to.

9:40 p.m.

House in committee of supply.


On vote 502, provision of accommodation program; item 2, capital construction, and item 4, real property acquisition:

Mr. Ruston: I see from the information supplied to us that capital construction is $1.8 million in the accommodation program. Apparently, from the explanation here, that additional funding is for government buildings under construction that have progressed at a faster pace than anticipated, primarily as a result of a mild winter and improved contract performance.

There is another figure that is a great deal more, namely, $54,650,000 for property acquisition. That’s a reimbursement to Ontario Hydro for parkway belt west lands purchased on behalf of the province. I know this has been on the go for some time, though I’m not too familiar with it myself. I understand it is the green belt Hydro had purchased for a right of way and for whatever necessities the government may require at a later date. Now it’s being taken over by Government Services for permanent acquisition.

Could the minister inform us what the interest charges have been on this property over the period of years? Of the $54 million, what is the actual cost of property and how much of it is for interest purposes? The $1.8 million for capital construction is an increase in his regular budget. What effect will that have on his new budget for 1980-81? Is he going to bring forward some other projects, or would this be taken off his proposed 1980-81 budget?

Does that mean he may increase his construction program for the next year? That might be a good idea because I understand there are a number of areas where capital construction is required. In some areas, I understand there is a need for new justice buildings or court buildings. That’s a great problem in many areas. I know in our own area and in Ottawa they’re going ahead. In the newspapers lately are long lists of court cases that are hanging on for as many as two years.

In our own area, the judges seem to feel we need more room for courts at least. There is a backlog of cases. If justice isn’t carried out within a reasonable period of time, it’s difficult to operate the courts. It’s difficult to get a fair trial because sometimes the cases are as much as two years old. I’m just wondering if the minister may bring forward some projects in 1980-81 since some of the buildings here are now being completed.

Mr. Young: In looking at these particular items here tonight, I understand the first one, capital construction, is because of the kind of weather we have had and the ability of many of the contractors to move forward much faster that they might otherwise have done in the case of snow and heavy storms. Money is needed, evidently, to catch up with this progress; that’s clear, I think.

The second one is the real property acquisition of $54.6 million, reimbursement to Ontario Hydro for parkway belt west lands purchased on behalf of the province. I understand in this case Hydro determined the kind of land it wanted. The province then expropriated or bought it; Hydro paid for it and the province is now reimbursing Hydro for the section of land it does not need. I am wondering whether the minister can tell us something of the division of that land, how much land was in fact brought under public ownership and how much of it is going to stay in the public domain for recreation purposes.

I understand much of it is now rented, perhaps back to the farmers who owned it originally. I think in the western area, that section following the parkway west belt, there is certainly a great need for recreational land. I know the use highway 400 is put to, going north, is very narrow and without this kind of provision. People drive north on it on weekends, although the driving may become less as gas becomes more expensive, and many pull off to the side wherever they can for picnic lunches and it is widely used. This will provide that kind of service for people travelling west -- a much more adequate service if the original vision of government is carried through. However, I understand the amount of land has been cut down rather dramatically from what was originally intended. That is generally what happens. We have grandiose plans we think will serve the purposes of the future; then local opposition develops and that plan is minimized.

Perhaps the minister can tell us exactly what the plans are and what the future is for that particular section.

There is one other matter I will also raise with the minister, and perhaps I could get an answer for the record. That is the application of Redford Gardhouse and Walter Scott on behalf of themselves and the Interested Citizens Group, Halton Hills Corridor Community. This was an intervention for the purpose of bringing to the attention of the National Energy Board a complaint regarding a certain matter. That intervention was registered. They were asking for certain things, and sought to have a public hearing to inquire into the environmental impact of and the necessity for the routing, siting and alternative routes available and other relevant information on the Ontario Hydro transmission line.

This matter has not been resolved, and I wonder if the minister could tell us whether this change of ownership from Hydro to the province itself will in any way affect this application. If those answers are given us, that may be all I have to ask tonight, although there may be some other things that will develop as the minister’s answers come to us.

Hon. Mr. Wiseman: Mr. Chairman, to answer the questions asked by my friend the member for Essex North (Mr. Ruston) regarding the amount of interest and the cost of the land: The total cost of the land we are talking about for Hydro is $40,384,191.91. The interest that has accumulated over the years is $17,862,531.70. On top of that, there are overhead charges amounting to $903,542.70 for a total of $59,150,266.31.

The honourable member mentioned that we have spent an additional $1,800,000 on our capital projects. I think both honourable members asked the reasons for this expenditure, and the member for Essex North asked if we would be spending more money on capital projects, such as renting more courthouses and so on. I hope the Treasurer (Mr. F. S. Miller) was listening and that when the budget comes out this year he will give us a little more money in that vote to spend on those very things.

9:50 p.m.

The member for Yorkview (Mr. Young) was asking about the number of acres purchased. The total number was 5,294 acres. I have a breakdown I could give him. For Hydro, there are two different purchases. There is the purchase for the stations, which was 524 acres, and for the right of way, which was 1,758 acres. For the Ministry of Transportation and Communications, we have 617 acres, from Milton to Trafalgar. From Milton to Claireville, in public open space, we have 83 acres; for utilities corridors, we have 153 acres, and for transit corridors, two acres. We have a surplus that will be disposed of over the next number of years of 2,157 acres of land. This should make up the figure of 5,294 acres.

The member for Yorkview also asked about Scott and another name I didn’t catch.

Mr. Young: Gardhouse and Scott.

Hon. Mr. Wiseman: Gardhouse and Scott. In discussions with the honourable member a few days ago, he asked whether we had gone on with some problem about exporting hydro to the United States. I’m told this line would have gone through anyway, whether or not we sell any to the United States. I think the concern of Mr. Gardhouse and Mr. Scott will be settled in the courts, in the fullness of time.

I believe I’ve answered the questions I was asked. If there are any others, I would be pleased to answer them.

Mr. Young: Will this transfer affect this action?

Hon. Mr. Wiseman: As I understand, this will not affect this transaction for this amount of money.

Mr. B. Newman: May I ask the minister if any of the $1.8 million he has under capital construction for acquisition and/or construction of physical assets is going to be spent in the city of Windsor? Is it going to be spent to lease and/or purchase the Steinberg block so additional court facilities could be provided to the community? The minister is aware there is an acute shortage, and as a result, justice is being delayed. When it’s delayed, it is being denied.

Hon. Mr. Wiseman: Mr. Chairman, this money is money that will have been spent or has been spent this winter as a result of speedup in construction -- the fact that some of the firms haven’t been as busy as usual and in the open winter they were able to get more done. As I mentioned to the member for Essex North, if in our budget for the upcoming year a figure of that amount is transferred forward, we will have more to spend on things like that.

Ms. B. Newman: I notice on sheet three it refers to acquisition and construction, so I wondered whether you were acquiring properties in the Windsor area, not necessarily constructing anything.

Hon. Mr. Wiseman: Concerning the area the member mentions, I could get back to him on that. I don’t have information as to whether we’re into renting or purchasing land in his area. If the member would allow me to send him that information, I will.

Mr. Young: The minister gave us figures which are just a bit disturbing. Eighty-three acres of public open spaces will be left after the roadways are provided for and the hydro lines are provided for and other certain small acreages; then the surplus of 2,157 acres is to be disposed of at a future date.

As I recall, the whole concept of this corridor was to have a lot of open space. It was to be a park belt with more than just the hydro line and the road, and yet it seems now that that’s going to be constricted to just about that kind of space, with, in that long area, only 83 acres of public open space left. That’s a tremendous shrinkage from the original concept.

The minister says a surplus is to be later disposed of. That means then that the 2,000 acres that we thought might be public open space, a breathing space in that whole west corridor, is to be disposed of and the whole idea of public open space, the idea of a breathing space for that western corridor is finished. Is this the meaning of what the minister has told us?

Hon. Mr. Wiseman: Mr. Chairman, this is for the disposal of the land that is outside the belt that is needed for hydro. As you notice, we had 1,758 acres of right of way, and there would still be a lot of open space under those lines and so on. This is for just the land that is outside of that belt that will be used for the hydro corridor.

I think the honourable member asked me one day what we were doing with that at present. Anywhere it is possible we are leasing it back to farmers, and that land is being used if the acreage is such that it warrants itself to be turned into agricultural purposes.

Mr. Young: Fine, Mr. Chairman, I have no quarrel with leasing it back to the farmers at the present time for their use and to produce food, but it seems to me that once it comes into the public domain it becomes a very great public asset which, down the road in the future, might be very useful for public purposes. So it seems to me to be shortsighted for this government to think in terms of selling that land once it is in the public domain.

As I say, I have no objection to its being leased until such time as you may need, it -- grow the food there if necessary -- but one of these days down the line we are going to need that for purposes we perhaps don’t even realize at the present time. Certainly, to sell it back to the private sector when it is now public land is extremely shortsighted. It seems to me the minister and the cabinet ought to give this pretty serious thought before such disposition is made.

Hon. Mr. Wiseman: I appreciate what the honourable member has said. We have tried to cover off areas such as the Ministry of Transportation and Communications that might need it for roads, utilities and transit corridors, this sort of thing, so that I do appreciate what you are saying and we’ll consider it.

Mr. Ruston: Just to go back to the property acquisition where you read off figures such as $40 million and some odd, $17 million and some odd, and you came to $59,150,000: Today you are asking for $54,650,000. Has that other $5 million been paid out prior to this so you just need the $54 million now? Is that the reason?

Hon. Mr. Wiseman: No, Mr. Chairman, we are able to make a saving within our overall budget this year of the difference between this figure that I have given you and what we are actually asking for. The difference is the saving within our overall budget.

Vote 502 agreed to.

Mr. Chairman: That completes the supplementary estimates for the Ministry of Government Services.

10 p.m.


On vote 704, regional priorities and development program; item 2, northern roads, and item 5, air services:

Mr. Kerrio: Is your aeroplane going to have the governor’s insignia on the side?

Hon. Mr. Bender: The governor of northern Ontario, yes.

Mr. Chairman, we’re requesting approval for $2 million extra for additional expenditures in the capital structure program of the highways of northern Ontario.

Mr. Nixon: Are you making that road into Hudson eight lanes?

Hon. Mr. Retailer: No, just four lanes; four lanes into Hudson, right to my driveway.

We are also asking approval for an expenditure of $1.2 million for the acquisition of a new Twin Otter aircraft that we’re accepting delivery of very shortly. That’s to add to the norOntair fleet that’s operating in northern Ontario. It will bring our total fleet up to eight, and of course it will provide the needed service that we require in northern Ontario.

Mr. Kerrio: Are you making that air force pay?

Hon. Mr. Bernier: Yes, I’m glad you mentioned that. I don’t want to deviate from the estimates here but I do want to point out to the members of the Legislature that the norOntair service that we have in operation in northern Ontario is truly the transportation success story of the last decade. We started at a substantial subsidy for passengers seven or eight years ago and in many of the months in 1979 we were actually in the black. It’s an excellent service.

It serves something like 20 communities in northern Ontario now. That completes the first phase of the operation. We have undertaken a very intensive study into the second phase of the norOntair operation, which will take in the request of 15 additional communities that want to tie on to the service. I think that will give you some indication as to the desire of the northern Ontario municipalities to be part of the norOntair operation.

It’s something that I think the members of the Legislature can take pride in. It is serving all the communities of northern Ontario, doing it exceptionally well, and your approval tonight of another $1.2 million will assure that that service will be maintained and improved.

Vote 704 agreed to.

Mr. Chairman: That completes the supplementary estimates for the Ministry of Northern Affairs.


On vote 2502, land management program; item 4, extra firefighters:

Hon. Mr. Auld: Mr. Chairman, this has to do with emergency firefighting and, of course, the expenditures in this activity are never predictable. The reason we are asking for this amount now is that the overexpenditure in 1979-80 was due primarily to a heavy fire load in the northwestern region, and to a lesser extent in the north-central region. Other regions experienced normal fire situations.

Mr. Nixon: I just have one comment to make on this. Actually it’s a question and then a comment. Is it intended that this money be used to lease firefighting aircraft? The reason I ask is that the minister may recall the correspondence he had with me about this. One of my constituents has a rather elaborate air service with which he does spraying of crops. He has a contract, I believe, with the government of New Brunswick to do spraying and firefighting on a lease basis with that province.

On a number of occasions he has explained to me the advantages to this province that a similar service might have. In the past I believe it’s been the policy that the province own all its facilities, but of course since the firefighting season does not go on all year, there are obviously advantages if we can lease the planes and the equipment for the period when the fire hazard is the highest.

Just recently my constituent, Mr. Tarr, once again has brought to my attention the fact that he feels that the policy of the government, perhaps while it is coming around to leasing some of this equipment, still hasn’t been approaching it in what he considered to be a fair and knowledgeable way -- as least as far as he is concerned and perhaps other leasing firms in this province as well. It occurred to me, since this extra money, more than $6 million, is for extra firefighting, it may very well be that some of it would be used for leasing. I trust and expect the minister will see that all those who are capable of participating and tendering for this lease will have ample opportunity to do so.

Hon. Mr. Auld: I recall the correspondence and, in fact, we do lease a number of aircraft that are not equipped for dumping or spraying and so on. They are called bird dogs. They are generally two-engine small aircraft that lead the aircraft which are actually carrying the fire-retardant materials, whether it be water or foam or whatever, and we are expanding that.

We do lease some aircraft. We lease a CL-215 from Quebec and we lease other government aircraft from other jurisdictions, depending on the severity of an outbreak and what equipment of our own and others is available.

We are in the process of changing some of our own equipment and it may be that we will find we can lease equipment from private suppliers, provided -- and I think this is where the most difficult part might turn up -- they are available on a long-term and on a relatively short standby fee. The greatest conundrum and the difficult part of the financial planning is that we never know what kind of a fire season we are going to have: whether it is going to be spread around the province by season or by time of year, or whether other jurisdictions will have available aircraft and other equipment.

What we need to have is security of supply of the firefighting equipment. I am particularly anxious that we first of all have security of supply of equipment and then that we have as little capital investment as possible. These are sometimes not mutually attainable objectives. In the rapidly changing technology that is going on in the kind of equipment used for fire-retardant material, the distance one has to go from a base and what kind of a base are not usually worked out.

This is a long way of saying I would be delighted to be able to say we would be able to use all those who would like to work for us, but it may not be possible to have all of them working for us when they would like to have the work and we would like to have them.

Mr. Kerrio: Mr. Chairman, on the various committees that I participated in, it is always a question that I raise with ministers as to their liaison with other jurisdictions as it relates to problems we might have here in the province. The question I would pose to the minister is whether he has ever had any communications with the forest firefighters in northern California, where they have sophisticated radio detection devices, where fires are started by lighting. Of course, you know that early detection is half the battle.

10:10 p.m.

I would just pose the question to you: Do you have the kind of liaison with those jurisdictions that have the same kinds of problems we might have, that have developed some sophistication in detection and firefighting we could readily avail ourselves of?

Hon. Mr. Auld: Mr. Chairman, I guess we were the second jurisdiction to acquire the kind of equipment to which the honourable member refers and it is in operation basically out of Dryden. All the bugs haven’t as yet been worked out of it. This will be the third year it will be in operation. It is basically radio detection by triangulation of the lightning strike.

What needs to be added is the weather forecasting by radar of how much moisture is falling in those areas and some technological improvement of the equipment. It is working very well for us so far and when it is really perfected, we will apply it in other areas and it will save us a lot of money and, more important, a lot of forest.

Vote 2502 agreed to.

Mr. Chairman: That completes the supplementary estimates for the Ministry of Natural Resources.


On vote 2604, provincial roads program; item 3, capital and construction; and vote 2605, provincial transit program; item 1, capital and construction, and item 2, operations:

Hon. Mr. Snow: Mr. Chairman, I have three items in the supplementary estimates of my ministry: one additional item for capital and construction, provincial roads program, which is in the amount of $8 million to accelerate the construction of the E. C. Row Expressway; $5 million in capital and construction for provincial transit to accelerate the commuter rail program, and $2,450,000 in GO Transit operations to provide for additional operating subsidy resulting mainly from the payments of outstanding retroactive charges under the agreement with the CNR plus payment of the new diesel fuel tax.

Mr. Warner: Mr. Chairman, I will be brief. Part of the money, I gather, is for the expansion or improvement along the GO Transit line, is that correct?

Hon. Mr. Snow: Yes.

Mr. Warner: I have corresponded with the minister asking him to try to apply a few more imaginative ways to support public transit in an effort to save energy and to try to keep cars at home, keep them off the roads.

One of the suggestions I made was that he consider trying to enter into an agreement with the Toronto Transit Commission, for example, that a user of the TTC be able to apply a transfer from the TTC to obtain a lower or reduced fare to ride on GO Transit. I applied what I thought to be a reasonable amount: a 50-cent reduction in the GO fare if one arrived at the GO station by way of public transit. The person would then be encouraged to leave the automobile at home, ride the TTC bus to the GO Transit station and, having paid his fare to the TTC, use his transfer as a way to reduce the fare on the GO Transit system by 50 cents.

That was just one idea of what I thought would be a good positive way to try to promote the greater use of the public transit facility, including the GO system. I would appreciate knowing whether the minister is ready to accept that kind of idea. If not, why not? Has he some other positive suggestions of his own to encourage people to use public transit so we can help to conserve energy and of course save the precious supply of fuel?

Hon. Mr. Snow: Mr. Chairman, we are working very closely with TTC and with other transit authorities on exactly this particular program. Last year we initiated an integrated fare system as an experiment in the Brampton area, where a person can ride the Brampton Transit bus to the GO station and then transfer on to GO Transit. They really get a free ride on the local transit. That ride is now shared I believe 25 per cent by Brampton Transit and 75 per cent by GO Transit.

It had a very positive effect on getting people to come to the GO Transit station via public transit rather than via their car. From our standpoint, of course, it cost us money. It cost us 37.5 cents to get that customer on the train without his car, but that is less than it costs us to provide the parking space if he drove. It’s working out well for the Brampton Transit and is working out well for GO Transit.

We are also looking at other areas where we may do this very same thing. We have discussions on right now with the TTC. As you know, the TTC are bringing in a monthly transit pass in Metro. We are proposing, working with the TTC, the possibility of a joint pass that would be available. From my own riding, for instance, someone would buy a GO Transit pass from Oakville to Toronto and he could also buy a TTC pass. We are proposing a joint arrangement where one pass would let him ride the GO and the TTC.

For instance there are discussions right now with Oakville Transit, a similar deal to Brampton and a further experiment in a different situation, where if a person had one particular pass, he would be able to ride Oakville Transit to the GO station, go to Union Station and ride the TTC to wherever he may want to go.

Your specific suggestion of riding the TTC to the GO and then riding the GO downtown would be expensive. If they get on the TTC, they can ride anywhere in Metro, so why would they need to ride the GO? If they ride the TTC to the GO station stop, then of course they have to buy a GO ticket, which makes it a much more expensive ride than if they ride all the way down on the TTC. We are certainly working with the TTC on a joint TTC-GO pass and that may just serve the purpose you are suggesting.

Mr. Warner: Mr. Chairman, I am encouraged by the response from the minister and I appreciate it. To answer his question, out in the east end of Scarborough, for many people it’s more efficient, more effective for them to ride the GO system, particularly if they live near Lake Ontario and they are near one of the stations and they are coming downtown. That’s why I was proposing the combination with the TTC.

I appreciate what the minister has mentioned because that’s a step forward, in my view. Anything more that can be done in that way to promote the use of passes or promote people leaving their cars at home and riding the public transit is first rate, in my opinion, and needs to be encouraged. I appreciate the answer that has been given.

10:20 p.m.

Mr. Kerrio: I see in the provincial transit program under capital construction that the projects have been accelerated as a result of the federal contribution of $30 million over three years. Is that $30 million an unconditional grant, or is it earmarked for specific programs as it relates to your ministry’s involvement?

Hon. Mr. Snow: I could give about an hour’s speech on this one. This $30 million was committed by the federal government -- $10 million in the year ending in another few days and $10 million in each of the following two years -- to accelerate the construction of the Bathurst Street, Union Station, Streetsville, Milton GO Transit capital expenditure. This was a commitment that has been on again, off again with three different federal governments. I think it is all on again.

Mr. Kerrio: You have the $30 million?

Hon. Mr. Snow: No, I haven’t got the $30 million yet. We had a commitment for $10 million from, I should say the previous federal government now, the one that should still be there but unfortunately is not.

Mr. Kerrio: You don’t elect governments; you throw them out.

Hon. Mr. Snow: I can hardly wait. We have a $10 million commitment for 1979-80, plus similar commitments for 1980-81 and 1981-82.

Mr. Kerrio: The new government is going to honour this commitment?

Hon. Mr. Snow: I would fully expect it would.

Mr. B. Newman: I want to ask one question of the minister. In the $8 million you have concerning capital cost construction, none of the funds in there is allocated in any way, shape or form to railway relocation studies, is it?

Hon. Mr. Snow: No. That $8 million is to accelerate construction of the E. C. Row Expressway in order to honour the commitment the government made to both the city of Windsor and the Ford Motor Company to expedite construction of the E. C. Row. We are spending an additional $8 million in 1979-80. It already has been spent. There is an additional $20 million to be spent in 1980-81 and about $4 million more in 1981-82. That is in addition to the work that is going to be done at the other end of the expressway. This is a major acceleration of the E. C. Row work.

Mr. Bounsall: Just to continue with the E. C. Row question, does this mean that the minister has reconsidered his position and in this year is going to provide the funds for both of those two west end phases? I have written to the minister on it. At one point just one of them was to be completed in the coming year, though both phases at the west end had been originally planned. Is he still completing just one of those two phases in that E. C. Row funding?

Hon. Mr. Snow: This $8 million has nothing to do with anything the honourable member is talking about. This is money that has been spent in this current year on the section adjacent to the new Ford plant. There is one contract under way right now for the CPR overpass and there are two major contracts out to tender. This is at the east end or north end. There is one major contract to be called later this year at the highway 18 end. That will leave one more contract in 1981.

There is just no way I can manage such a large construction program as you and many other people would like in the Windsor area in this particular year.

Mr. Kerrio: In your capital program, I wonder if anywhere there is any kind of money set aside to study other things beside relocation. On a particular area that you addressed yourself to on the Sandplant hill between Niagara Falls and St. Catharines you did a major reconstruction job as it related to guardrails and lights to clean up a very dangerous situation. Has any money ever been allocated to the widening of that rail bridge there, provincially and federally? If not, I just wonder if you might put it on your list.

Hon. Mr. Snow: Mr. Chairman, that certainly doesn’t involve these particular supplementary estimates. This is something we can discuss in a couple of weeks when we get into my estimates for next year.

Mr. Bounsall: Mr. Chairman, I would just like to take this opportunity to say to the minister, in terms of the tender call for one of the two west-end phases that will be completed on E. C. Row in this coming year, if those have not been prepared and gone out would the minister see that they go out as soon as possible?

The concern around Windsor is that both can be built because of the traffic problems that would arrive if both the west-end portions weren’t; but also there is the timing factor. I gather they are ready to go, the engineering has been done and as soon as those tenders can be placed and the construction actually going in this coming year, the sooner it obviously will be completed. Does the minister see any holdup at all? What is the delay, if any, in getting that one west-side project around 18A moving?

Hon. Mr. Snow: Money is the reason.

Mr. Bounsall: But the minister was having the money set aside in this coming year for it and we’re almost there. Could this not be called in?

I feel we have lost the battle on the two west-end portions; only one is being done but it is all ready to go. Why are the tenders not called, if they haven’t been, so that the construction can start right away once the next fiscal year is upon us?

Hon. Mr. Snow: There are numerous reasons on that, Mr. Chairman. We have many million dollars’ worth of work under way on the E. C. Row right now in Windsor. We have $22 million worth of work out to tender at this moment and it’s just inappropriate, in contract management, to add many more millions of dollars to a market in a particular area at a particular time. The other reason is that my overall budget will not allow an early tender call on the other jobs. We are giving the priority to the Ford plant end of the contract. The other job will be called a little later this year.

Mr. Bounsall: Just as long as the minister realizes that one piece from Huron Line to Dougall is part of the Ford project service portion. The trucks need to get from the bridge, down Huron Line and on that portion of E. C. Row between Huron Line and Dougall which still awaits the tender call in order to get to the Ford plant. That needs to be going and completed this year so that that logical one-piece portion is completed in time for the Ford operation. It’s part of the operation work.

The next piece from Huron Line to Highway 18 is for the Maple Leaf Mills Limited plant which is about to come into operation. The two or three streets in the west end of my riding will be highly congested until that is done -- I gather not until the following year. But that one piece -- phase 20, I believe it is -- is all part of the Ford traffic movement and needs to get moving just as clearly as does the east-side portion in order that that full bridge to the Ford plant connection be made.

Votes 2604 and 2605 agreed to.

Mr. Chairman: That completes the supplementary estimates for the Ministry of Transportation and Communications.

On motion by Hon. Mr. Gregory, the committee of supply reported certain resolutions.

The House adjourned at 10:30 p.m.