Hansard Transcripts 1980-Apr-29 | Legislative Assembly of Ontario

Mr. Speaker: Pauline M. McGibbon, the Lieutenant Governor, transmits estimates of certain sums required for the services of the province for the year ending March 31, 1981, and recommends them to the Legislative Assembly, Toronto, April 29, 1980.

NIAGARA ESCARPMENT HEARINGS

Mr. Cassidy: Mr. Speaker, I have a two-point point of privilege, on which I would like to ask for a ruling.

First, last Friday, in answer to questions I had posed with relation to the Niagara Escarpment hearings and the decision of the hearing officer not to hear any representations about expanding the planning area, the Premier (Mr. Davis) said individuals and groups who want to see their own property in the Niagara Escarpment plan can voluntarily do that.

In fact, the previous Wednesday, the hearing officer had ruled, with the concurrence of lawyers from the Ministry of the Attorney General, that the Federation of Ontario Naturalists, which has lands outside of the proposed planning area as well as inside it, could not make representations concerning their desire to add the land outside the proposed area of the plan so that those lands could be protected by the plan.

Second, during the question period yesterday, the Premier stated: “The hearings had been established to allow those people whose properties are being affected to register objections.” In fact, section 10(2) of the Niagara Escarpment Planning and Development Act states categorically, “The commission shall appoint one or more hearing officers for the purpose of conducting hearings within the Niagara Escarpment planning area for the purpose of receiving representations respecting the contents of the plan by any person desiring to make representation.”

Considering the obviously incorrect statements on this issue by the Premier in the House over the last week and the clear contradictions between what the Premier said to justify his government’s position, as well as the ruling by the hearing officer on the one hand and the direction contained in an act passed by the assembly on the other, it is my contention that the privileges of this House and of all its members have been violated, and I ask you to rule accordingly.

Mr. Speaker: The leader of the New Democratic Party seems to be misconstruing what the privileges of a member of this House mean. If there is something that is going on in this House where the privileges of an individual member, as a member of this House, are being infringed upon or abrogated, clearly it is the responsibility of this House, through the Speaker, to rule as to whether or not it is, in fact, a bona fide point of privilege.

I fail to see where any privileges that are normally attached to being a member of this House, by virtue of being a member of this House, have been infringed upon in any way. The honourable member can interpret the various acts that he cites in his way. Others may interpret them differently. I see no way in which the privileges of the member, or any individual member of this House, are being infringed upon in any way, and I would have to rule that it is not a bona fide point of privilege.

STATEMENTS BY THE MINISTRY

USE OF ASBESTOS ON FIRE-STOP FLAPS

Hon. Mr. Drea: Mr. Speaker, on April 1, I took as notice certain questions related to the use of asbestos on fire-stop flaps. Although subsequent discussions have dealt with some of the questions raised, there are certain technical matters I would like to comment on.

At the outset, I would like to clarify the confusion caused by the terminology used in the questions. The Ontario Building Code does not require asbestos coverings on fire dampers. However, article 6.2.4.10 of the Ontario Building Code does require the use of fire-stop flaps, which are covered with asbestos paper, when a ceiling is part of a fire-rated assembly and an opening to accommodate an air duct exceeds 20 square inches. This does not make the use of asbestos paper mandatory, as there are other design options acceptable under the building code which do not require the use of fire-stop flaps.

While I was asked questions specific to the use of asbestos paper coverings on fire-stop flaps, I would like to point out that there are other references to asbestos in the code. The construction industry has used asbestos in a variety of forms such as sheets, tile and boards. In those uses, the asbestos fibres are held in place by a cement or binder.

I want to emphasize that asbestos used on the flaps is in the form of paper. Although we are aware of the concerns about asbestos paper used by the home owner, we are not aware of any tests that have been conducted to determine the magnitude of fibre release under normal operating conditions. Therefore, we have retained Dr. John L. Sullivan, of the Occupational Health and Safety Resource Centre at the University of Western Ontario in London, to conduct tests on coated and uncoated asbestos fire-stop flaps. I expect to have the results within the next week or so.

We would normally await the results of these tests on fire-stop flaps and the completion of a review of other pertinent information before considering taking action. However, the use of asbestos paper on fire-stop flaps is of considerable concern to my ministry and, therefore, an amendment to the building code will be introduced immediately to repeal article 6.2.4.10. This action will not reduce the present level of safety in buildings. As I mentioned earlier, and I wish to emphasize, there are other design options allowed by the code that do not rely on fire-stop flaps.

At a meeting last week of the provincial advisory committee of the associate committee on the National Building Code, the revocation of article 6.2.4.10 was agreed to by all attending members. I am confident that the National Building Code, which is the basis of all provincial building codes, will be amended as soon as practicable. I want to assure the members that in view of our responsibility for the Ontario Building Code we will be co-operating closely with the recently announced commission into the use of asbestos.

Mr. Cassidy: The minister might have thanked the opposition for bringing that to his attention.

Hon. Mr. Drea: The member gave me the wrong data. I had to find it myself. That is what I said the first time.

I want to draw to the attention of the House that, when I used the words “amendment to the building code,” I meant it is done by regulation and is already in process.

2:10 p.m.

NONRESIDENT OWNERSHIP OF AGRICULTURAL LAND

Hon. Mr. Henderson: Mr. Speaker, during the past few years the agricultural community has been concerned over the issue of foreign ownership. Municipalities and individual farmers, as well as the Ontario Federation of Agriculture, have recorded their concerns on this issue with the government of Ontario.

In response to these concerns, existing records were surveyed in 1976, 1978 and again in 1979, when I became Minister of Agriculture and Food, to determine the extent of foreign nonresident ownership. It was found that existing legislation and records were primarily designed for taxation purposes and not specifically intended to record the foreign ownership of agricultural land. Difficulty is encountered in determining the extent of foreign ownership as it is not consolidated in these existing records.

I am, therefore, pleased to say I will be introducing a bill before this House which will require registration of nonresident interests in agricultural land in Ontario. Once implemented, this bill should provide the government with a central source of data from which we can obtain a clearer picture of the development of nonresident ownership of our most valuable resource: the land used to produce our daily food.

This bill is not restricted to mere ownership of land but extends to cover the acquisition of interests in agricultural land or controlling interests in companies that own interests in agricultural land. It applies to persons who are not ordinarily residents of Canada, to companies controlled by such persons and to residents who knowingly acquire such interests on behalf of nonresidents. It is my hope, therefore, that it will give us a more complete picture than we have been able to achieve to date.

ANSWERS TO QUESTIONS ON NOTICE PAPER

Hon. Mr. Auld: Mr. Speaker, this is in connection with a question of privilege which the member for Essex South (Mr. Mancini) raised last Thursday. On April 24, the honourable member rose on a point of personal privilege regarding the answers to questions 38 to 42 on the Order Paper which concern my ministry.

The actual answers to the questions were prepared by the due date of April 1. However, they were not presented to the Legislature for two reasons: (1) We found what appeared to be an error in the revenue figures and required additional time to have all the figures checked to ensure that they were accurate; and (2) I did not wish to give some individuals, who were interested in tendering, an advantage because of being in possession of information contained in the answers to questions 38 and 39 but which did not appear in the tendering prospectus.

Some 25 persons in total had expressed an interest in tendering. I therefore chose not to release the reply until after the tendering date closure, which was 1:30 p.m. on April 18.

ORAL QUESTIONS

SEATON DEVELOPMENT

Mr. S. Smith: I beg your indulgence, Mr. Speaker. I have been informed that the Treasurer (Mr. F. S. Miller), the Minister of Housing (Mr. Bennett), the Premier (Mr. Davis) and assorted other ministers might be in the House shortly. Perhaps the acting government House leader could let us know whether that is true, in which case I might ask the indulgence of the House to ask my questions when those ministers are here. I am facing a rather empty row; I see 11 empty seats in that section of the cabinet alone.

Mr. Speaker: Do we have that permission from the House?

Some hon. members: Agreed.

Some hon. members: No.

Mr. Speaker: There is not unanimous agreement.

Mr. S. Smith: I suppose I can waste the time of the House and ask them of the acting government House leader.

First of all, I want to pay tribute to the member for Huron-Middlesex (Mr. Riddell) inasmuch as his initiative finally has been greeted with a bill from the government.

I will ask the Deputy (Mr. Welch), who is the government acting House leader if he would be good enough to look into the following matters.

The first question should go to the Minister of Housing. Is the Deputy Premier able to explain to this House what the Minister of Housing meant on March 24 when he said he was going to delay the construction of Seaton because of prevailing economic conditions? He then described conditions, in the Globe and Mail, as “knowing when to cut your losses” and “not being foolish enough to extend them.” Why then did the Assistant Deputy Minister of Housing tell the Durham regional council that housing construction at Seaton will start in 1984?

Hon. Mr. Welch: Mr. Speaker, I would be very happy to take that question as notice for the Minister of Housing.

Mr. S. Smith: One has to wonder why we even bother showing up if the cabinet isn’t going to be here.

Will the minister make sure that his colleague, when he does report to this House, will also report on how much money is being spent on Seaton this year and what it is being spent for, in addition to the money that has already been spent? Could he explain why it is that the bureaucrats seem so determined to proceed with that North Pickering project even though a consultant’s report has shown there is sufficient serviced land in Durham for residential purposes for the next 14 years and enough serviced industrial land for the next 50 years? Why are they proceeding with something as ridiculous and as ill-fated as that?

Hon. Mr. Welch: Mr. Speaker, I will draw the questions raised by way of supplementary questions to the minister’s attention as well.

Mr. Breaugh: Mr. Speaker, since the government has changed the name of its project three times in the last eight years and the government’s position on the project has changed three times in the last three months, will the minister give us the Tuesday government position on whether it will or will not go ahead with the Seaton project?

Hon. Mr. Welch: Mr. Speaker, I will include that in my conversation with the minister. There is one thing the member can be sure of: it will not be called Breaugh.

AID TO PENSIONERS

Mr. S. Smith: Mr. Speaker, I will direct my second question to the Premier. Does he recall that in 1973 his government presented a budget introducing the pensioner tax credit, a tax credit removed by this year’s budget in favour of the augmented property tax credit system? Does he recall in 1973 that the pensioner tax credit was introduced to substitute those tax credits for what were then supplementary grants to needy pensioners, given out in $50 and $100 grants?

Since the pensioner tax credit was designed for the most needy among our pensioners, and since that is precisely what the government has decided to cut in order to increase the property tax credit portion of its program, can the Premier explain the Treasurer’s statement in the Sunday Star in which he said that the people losing the pensioner tax credit are “in the economic position where they can afford the cut”? What is the average income of the people who will be losing the pensioner tax credit?

Hon. Mr. Davis: Mr. Speaker, the Treasurer was here yesterday, and I am sure he would have been delighted to have answered that question if the Leader of the Opposition had been here yesterday. I would suggest he might wish to raise this with the Treasurer when he is here, I expect on Thursday.

I recall the program being introduced. We as a government have introduced a variety of programs to assist senior citizens over the years. The most recent program has been widely accepted and enthusiastically endorsed and supported by the majority of people, with the exception of the Leader of the Opposition.

Mr. S. Smith: Since the pensioner tax credit was originally introduced for the neediest of pensioners, and since these are the very people who will be losing out in this otherwise more generous system which the Premier and Treasurer are introducing, would the Premier agree that his program would be a lot better if, instead of introducing it exactly as presented in the budget, it were introduced with a change in it which allowed those people who might benefit by the previous year’s way of calculating it? In other words, why does he not bring in this widely heralded property tax credit system in such a way that nobody gets less than he would have got under the last system?

2:20 p.m.

Hon. Mr. Davis: Mr. Speaker, I think the Leader of the Opposition can debate this at the time of the discussion of the bill, although I have to extend this observation. If the Leader of the Opposition has his way, we will not get an opportunity to debate the bill, and the pensioners in this province are going to be the victims of the sort of approach he wants to take on Thursday night.

Mr. McKessock: Mr. Speaker, the Premier says that only the Leader of the Opposition is opposed. In view of the fact that I have one more name, that of my mother-in-law, who will be $119 worse off next year than this year -- I can give him this specific case and I can send the income tax form to him -- would he reconsider, as there are some who are going to be worse off, and take the Leader of the Opposition’s advice to see that pensioners can use either one scheme or the other next year, rather than being penalized by using the new scheme?

Hon. Mr. Davis: Mr. Speaker, apart from his political affiliation and the odd problems that he creates with escarpments and other matters, I have some respect for the very distinguished member for Grey. I cannot visualize him, being the kind of person he is, seeing his mother-in-law in any disadvantaged position. If we cannot find some way to solve it, he personally will look after it himself.

Mr. Laughren: Mr. Speaker, does the Premier not understand that he could solve the problem very simply by directing the Treasurer to ensure that no one will receive less this year under the new program? Would he listen to the suggestion by my colleague the member for Downsview (Mr. Di Santo) to get rid of the exclusion factor caused by the reference to old age security?

Hon. Mr. Davis: Mr. Speaker, there are a lot of problems we could solve if we had the wherewithal to do so. I understand what the honourable member is saying.

Mr. Speaker, in the great flexibility with which you run this House, now that the Leader of the Opposition is here today -- he was not here yesterday -- and as the Treasurer is also now here, perhaps he would like to have a supplementary on this issue.

Mr. S. Smith: Mr. Speaker, could the Treasurer explain, in view of the fact that in 1973 --

Interjection.

Mr. S. Smith: Perhaps I could put it to him in my words, and then he could answer it either way: the Premier’s way or my way.

Hon. Mr. Davis: Mr. Speaker, on that point of order: It would be the first time --

Mr. Speaker: There is no point of order.

Mr. S. Smith: There was not a point of order; it was a suggestion. My, my, we’re getting touchy today.

Mr. Speaker: Just put the question.

Mr. S. Smith: Mr. Speaker, would the Treasurer explain his statement in the Sunday Star that the people who are losing the pensioner tax credit are the people who “are in an economic position where they can afford the cut”? Would the Treasurer tell us the average taxable income of those people who will be losing out as a consequence of the new system?

Does the Treasurer not recall that the pensioner tax credit was introduced in 1973 to supplant grants to the neediest pensioners at the time and, therefore, is aimed at those who are particularly needy? What is the income of those who are going to lose out, and why not change it so that nobody loses?

Hon. F. S. Miller: Mr. Speaker, obviously when the Liberal Party’s response to the budget was made yesterday they chose a number of examples -- and I do not even blame them for it -- which showed the kind of case where somebody could potentially lose. We did not try to hide those facts.

What they forgot, though, was how many people were doing very well. Later on I will read the kinds of increases those people who have to depend upon income supplements are getting.

The key thing is this: we had in the past a fairly broad-brush program; now we have a very specific program, one aimed at helping to pay up to $500 a year of tax. If they are also one of those unfortunate people who have virtually no income of their own, we have, along with the federal government, enriched their income very handsomely. In fact, I believe they can get as much as $660 a year or more in the family through income supplements.

They would have to have more than $10,500 a year family income before they could possibly be in the category of being a loser. That’s the point at which the guaranteed annual income supplement payment cuts out.

I can show the members graphs of the area of loss on the property tax part only; that was the part they were dealing with mostly in their examples. In turn, we have enriched those people who had virtually no other income so they would have at least $10,500 a year in family income. That, I think they would have to agree, is desirable.

All programs should be aimed at helping those most in need. If the property tax is $100 for one house and $500 for another house, it does not in any way mean that the person paying $500 can afford it any more than the person paying $100 because, once that money is gone, they still have the basic costs of living to provide for; so we cover 100 per cent of the tax and leave them in an equivalent position to start with. Then, if they need income supplements, we give them income supplements so they will have enough money for those basic needs and we increase those low-level incomes so they will.

Mr. Laughren: Mr. Speaker, does the Treasurer not understand that one of the most serious problems is still being faced by single pensioners? Why does he not amend the guaranteed annual income supplement floor so that it at least meets the level of the Statistics Canada poverty line of $5,320 a year? That would solve most of the problems.

Hon. F. S. Miller: Mr. Speaker, I do not have the exact figure in front of me. Let me see if I can find it here. I think the total guaranteed income comes to $5,088 right now. If the member checks, I think he will find that, subject to the next adjustment for the federal government’s basic program, the sum total -- and I stand to be corrected -- of guaranteed annual income supplement and old age supplement will come to $5,088 for a single person. That’s the figure I have, and I will be glad to have it verified rather than claim my notes are exact.

Mr. Peterson: Mr. Speaker, we recognize that some people will be getting more, and we welcome that. The Treasurer has admitted there are a number of people who, considering all of his programs, will be getting less in total. Would he be prepared to entertain an amendment to his legislation so that no person in this province will receive less under his new scheme than he received under the old scheme?

Hon. F. S. Miller: Mr. Speaker, we are going to have an opportunity to go through that when the legislation is debated in about two or three weeks. I would say that I and this government have been criticized very often in the past for not targeting on those who are in need. We broke the program into components. We believe it is doing a more effective job. Surely that is something the honourable member can afford to support too and is more important than the one we had before.

ATTENDANCE OF MINISTERS IN HOUSE

Mr. Riddell: Mr. Speaker, I rise on a point of order having to do with the attendance of the ministers in the House. When the question period first started, there were very few ministers in the House. Then, at the completion of my leader’s questions, the ministers started to come in. We all know the question period now is being televised.

Mr. Speaker: That is not a point of order, and I thought the chair was very flexible in allowing the Leader of the Opposition and various members to question the Treasurer when he did arrive.

2:30 p.m.

AID TO CHRYSLER

Mr. Cassidy: Mr. Speaker, I have a question for the Premier about the government’s proposed assistance package to Chrysler of Canada. In view of the fact that the United States Congress has had the opportunity to study and debate the American government’s assistance package for Chrysler in the United States, will the Premier undertake, before the deal between Ontario and Chrysler Canada is finalized, to ensure that deal will be tabled in the Legislature for public study and debate so that we can quickly look at the terms? We then would be able to see we were getting a fair deal and ensure that we wouldn’t get another kind of deal like we got with Ford.

Hon. Mr. Davis: Mr. Speaker, I really cannot give the honourable member that undertaking. I think it is fair to state that, whatever determination is made by the government of Canada and the government of this province, the terms will be made public and there will be an opportunity to discuss it here in this House.

We are not the only parties to the agreement; so I cannot give an undertaking that it will be tabled here and debated before it is communicated to Chrysler Canada or whomever. I cannot give that undertaking.

Mr. Cassidy: In view of Ontario’s failure to defend the interests of workers and people in this province in the case of the Ford deal and in view of the fact that this is the largest single manufacturing investment ever made by the Ontario government, why cannot the Premier undertake to ensure that this House has a chance to look at and debate that assistance package before it is a signed commitment? Why is he trying to give us a deal to which there will be no input at all before it is signed?

Hon. Mr. Davis: I am not trying to give the honourable member anything. I question first whether it is the largest single deal; I would doubt that. Secondly --

Mr. Peterson: Second after Minaki.

Hon. Mr. Davis: The member doesn’t like what we are doing in Minaki. I have to tell the member for London Centre --

Mr. T. P. Reid: It’s a white elephant.

Hon. Mr. Davis: The member’s brother likes it. He encouraged them. That’s why that party won’t get a seat north of Lake Ontario.

Mr. Speaker: Order. I heard nothing officially about Minaki.

Hon. Mr. Davis: There wasn’t; you are quite right. The Speaker likes Minaki. That is unfair, Mr. Speaker; I wouldn’t put words in your mouth.

I would only say to the leader of the New Democratic Party that it is just not possible to table here in advance whatever arrangements may be concluded with Chrysler Canada. If he wants to raise objections afterwards, if he wants to say that whatever is decided is wrong, I understand that. That is part of the process. But I just cannot say that the agreement, if there is one, will be debated here prior to there being some degree of finality.

It is important that we understand, and I hope some of the honourable members understand, that as a government we are trying to find a way, in conjunction with the government of Canada, to be of some assistance. If the leader of the New Democratic Party is taking the position that we should not be discussing anything with Chrysler, that we should not be supportive, then I wish he would get up and say so. That is not what his members have said and it is not what they are saying when they are back in Windsor. We are trying to help, and I or the minister will disclose it whenever we are able to do so. But we cannot do it at this moment.

Mr. B. Newman: Mr. Speaker, can the Premier assure us that Ontario’s involvement will be on a formula set by the government with the Ford Motor Company and that we will also be assured our fair share of research, development and jobs?

Hon. Mr. Davis: I am not being critical, Mr. Speaker, but the honourable member asked exactly that same question yesterday.

Mr. B. Newman: I didn’t ask that at all.

Hon. Mr. Davis: Yes, he did; the wording was exactly the same, and the Minister of Industry and Tourism (Mr. Grossman) gave the answer. That is the second part of the question.

Interjections.

Hon. Mr. Davis: No, no. The member asked the minister about research and development. The minister told the member specifically the answer to exactly the same question.

Mr. Kerrio: What was the answer?

Hon. Mr. Davis: The member should read Hansard. If he had been listening, he would remember.

Mr. Kerrio: I thought the Premier didn’t remember.

Hon. Mr. Davis: Oh, I remember. On the first part of the question, I think it is important to point out that there is not a formula for situations of this kind. It is a question of negotiating in the best way possible to find the best possible results. We are not married to or committed to any specific formula.

Mr. Cooke: Mr. Speaker, I would like to ask the Premier or the Minister of Industry and Tourism, whichever one wants to answer it, if he can confirm the story that was in the Globe and Mail today, that the basic deal the federal government has struck with Chrysler deals only with the van plant, and that we will have to continue to operate with the production of large cars in Windsor; and large engines, although we are not producing any engines right now.

Will the Premier or the minister go on record, as we would like to do today, saying that if that is the deal, we are totally opposed and will not support that type of a deal with Chrysler Corporation, because it does not provide for long-term jobs in the total Chrysler production in Canada?

Hon. Mr. Davis: Mr. Speaker, there are many complexities in this issue which I have a feeling -- I have not had a chance to talk to the minister since noon -- are still in the process of discussion. As I said to the honourable member’s leader, we are not in a position at this moment to table anything or to answer some of the questions; I think they are very fair, but we cannot answer them at this moment.

Mr. Sargent: Mr. Speaker, the Premier talked with great weight about his formula, whether it is going to be $100 million or $60 million, to Ford or Chrysler, or whatever. What is his formula when Owen Sound is getting a $60-million Canadian Pittsburgh Industries plant, and we needed $1 million to offset the freight factor, and he wouldn’t give us a five-cent piece. What is his formula there?

Hon. Mr. Davis: Mr. Speaker, our formula related to the policy of the member’s party and his leader’s policy probably is that we should not be giving people like that any money.

HIGH-SPEED POLICE CHASE

Mr. Cassidy: Mr. Speaker, I have a question for the Provincial Secretary for Justice arising out of the high-speed chase in my riding of Ottawa Centre on Sunday, which had a Quebec police cruiser crossing the border from Gatineau and an officer firing a shot at a suspect in a domestic dispute. The suspect finally was arrested by the Ottawa police, who had been informed by radio when the suspect crossed over into Ontario from Quebec.

Could the minister say what steps the government intends to take to ensure that this kind of incident does not happen again, where policemen from another jurisdiction are using their firearms in Ontario or engaging in high-speed chases in builtup areas rather than leaving the apprehension of suspects to Ontario or local police forces in this province?

Hon. Mr. Walker: Mr. Speaker, I know the Solicitor General is most concerned and most interested in it and intends to make some comment about it.

Mr. Cassidy: Mr. Speaker, I would like to redirect the question to the Solicitor General.

Hon. Mr. McMurtry: Mr. Speaker, I think I heard most of the question on the way in. I have had only a brief report. I have to say I am very concerned about the incident, and I have asked the Ontario Police Commission to give me a full report. As soon as I have that, I will share it with the leader of the New Democratic Party and other members of the Legislature.

Mr. Cassidy: In view of the concern the minister expresses, can he explain why there has been apparently no action taken following a similar incident last fall when a police constable from the city of Hull also was involved on the Ontario side of the border in similar circumstances? If the government is concerned over this particular incident, why did it not act the last time? What steps will the government take to ensure we do not have the difficulties created by police forces of another jurisdiction crossing into Ontario and discharging firearms?

Hon. Mr. McMurtry: It is not accurate to say that no action was taken last time. I think I recall the incident to which the leader of the New Democratic Party is referring and, as I recall, we expressed concern.

Mrs. Campbell: Concern?

Hon. Mr. McMurtry: No, we did not go to war with the Quebec police, if that is what the member for St. George is suggesting. We certainly indicated to them in very strong terms how we thought the matter should have been handled in a different way. Obviously a certain amount of co-operation is required between law enforcement agencies on both sides of the border. I will find out the details with respect to that, but certainly the Quebec police officials were told very precisely that we thought that matter had been mishandled as far as the Quebec police force was concerned.

2:40 p.m.

Mr. Cassidy: In view of the fact that the suspect in the case last fall was involved in a case concerning property damage, and the suspect in this particular case, Luc Savard, was involved in a domestic dispute, would the Solicitor General make it very clear to the authorities in Quebec that we in this province do not think that suspects in such cases should be shot at with firearms, that we have different means of apprehending them in this province, and would they please keep their firearms at home and let these cases be resolved by our forces on this side?

Hon. Mr. McMurtry: When it comes to the involvement of the police in domestic disputes, I think the member for St. George might have a different view as to the extent to which police should get involved. Notwithstanding that, I am obviously awaiting a full report. I am not able to comment one way or the other as to all the facts that have been related to me by the leader of the New Democratic Party. Obviously I share his concern, and I will report back to the Legislature.

SUDBURY TEACHERS’ STRIKE

Mr. Sweeney: I have a question of the Minister of Education, Mr. Speaker. Given the minister’s comment of a week ago yesterday -- I quote, “I am rapidly running short of patience with the parties in this negotiation, and I have established a specific date within my mind beyond which I will brook no continuation of this present impasse” -- and since the Sudbury strike now is in day 53, has that date, in her mind, yet been reached? What is the present state of negotiations? Where do we go from here?

Hon. Miss Stephenson: No, Mr. Speaker, it has not been reached. I had a meeting this morning with the students from the Sudbury region, who expressed their concern about the state of their educational program. I tried to reassure them that a great deal of activity had been going on, relatively quietly, because usually that kind of quiet pressure and quiet activity is more likely to produce a settlement than noisy stands and specifically rigid positions which cannot be modified.

I am aware, although I have not discussed it with either party this morning, that there was a meeting last night of the Sudbury Board of Education. I am aware that certain discussions have gone on within the last 24 hours. I shall be reporting to the House later.

Mr. Sweeney: I understand from some of the students that, given the provision within HS1 for independent study, which requires the school to provide examination possibilities for the students, those very students who are engaged in an independent study program are encountering difficulty in relation to having someone provide the necessary exams. Has the Ministry of Education given any direction to the Sudbury Board of Education or to the principals in Sudbury, or to anyone, that the provision for independent study is a legitimate one and must be upheld?

Hon. Miss Stephenson: There have been discussions about this between officials of my ministry and representatives within the Sudbury area. We are attempting to find a route to the solution of that problem.

Mr. Laughren: Mr. Speaker, does the minister not agree that, since the two sides are both talking, threatening back-to-work legislation at this time would be an impediment to a negotiated settlement?

Hon. Miss Stephenson: Mr. Speaker, if in fact there is some dialogue between the two sides -- and I am not entirely sure of that at this point; there is a rumour that might happen -- the announcement of a legislated settlement would not be an impediment. It would be a total prohibition of a negotiated settlement.

Mr. Nixon: Mr. Speaker, since the House will not be in a position to deal with special legislation next week because of our national unity debate, would the minister not think --

Hon. Mr. Davis: Is the member going to be here next week?

Mr. Nixon: I will be here. We are going to be talking about national unity. Would the minister not think it appropriate for her to consider action this week? Or is she in some measure deterred by the threat of the Ontario Secondary School Teachers’ Federation to call a province-wide walkout on Thursday?

Hon. Miss Stephenson: Mr. Speaker, I am not in any way deterred by that threat. The suggestion is interesting. I will consider it.

SPECIAL TAX ON CRUDE OIL

Ms. Gigantes: Mr. Speaker, I have a question of the Minister of Energy. Can the minister inform the House whether the proposal for a federal wholesale tax on each barrel of Canadian-produced oil was one of the items he discussed in his recent meetings with the federal Minister of Energy, Mines and Resources? If so, did he indicate to the federal minister whether the Ontario government is in favour of the federal wholesale tax approach?

Hon. Mr. Welch: Mr. Speaker, we did not discuss that with the federal minister at the time of my meetings a couple of weeks ago.

Ms. Gigantes: Does the minister expect to have an opportunity to thrash through this proposal with his federal counterpart? Does he consider it an important change in the federal government’s outlook? How does the government look upon this kind of approach?

Hon. Mr. Welch: Perhaps it is early to be commenting on such a question. If the honourable member is making some reference to the article that appeared in this morning’s paper, I take that as a speculative piece. I have no information that would indicate to me that this is the official position of the government of Canada at this time. Indeed, I would rather wait until such time as we have some indication from them as to what their pricing policy might be.

MUNICIPAL POLLUTION CONTROL EQUIPMENT

Mr. B. Newman: Mr. Speaker, I would like to ask a question of the Minister of Revenue. Is the minister aware that many Ontario municipalities have been required to complete substantial additions to their water pollution control plants at the explicit instructions of the government of Ontario? Is he aware that the amount of provincial sales tax that has been collected on the purchase of materials and equipment in the construction of these plants is quite substantial? Will the minister consider the return of such sales tax upon presentation of receipts by municipalities?

Hon. Mr. Maeck: Mr. Speaker, under the act municipalities are entitled to buy sales-tax free for that type of a situation. I certainly would consider it.

GENERAL BAKERIES PLANT SHUTDOWN

Mr. M. N. Davison: Mr. Speaker, I have a question of the Premier, in the absence of the Minister of Labour (Mr. Elgie), regarding the announcement today by General Bakeries Limited that on June 27 they will shut down Hamilton’s last major bakery, which is currently employing 205 people in my riding.

In view of the fact that the corporate rationale issued today was to increase the efficiency of their operation and therefore the profitability of the corporation, does the Premier not consider it at least outrageous that this very company showed a profit increase in the last nine months of 1979 of 3,390 per cent over 1978? I would ask the Premier, should not the workers be allowed to share in this remarkable wealth by the company being obliged to accept responsibility for all those workers at the Sanford Avenue plant until such time as they are re-employed elsewhere?

Mr. Worton: They are in the dough.

Hon. Mr. Davis: What is the member from the Guelph area saying? I understand he knows a bit about bakeries.

Mr. Speaker, I am familiar with the facts only as they have been recited by the honourable member. I do not dispute them. I will discuss this with the Minister of Labour and have an answer for the member on Thursday.

Mr. M. N. Davison: While the Premier is discussing those specifics with his Minister of Labour, does he not think, given the number and nature of layoffs that we are seeing in Ontario nowadays -- of which I admit this is only one example which specifically concerns me -- that the time is more than overdue for the government to take a look at our labour laws in regard to these kinds of shutdowns and closures so that workers can be effectively protected and we can treat them with at least a modicum of human decency, because the people at this plant and other plants are not being treated that way in Ontario right now.

Hon. Mr. Davis: I do not say that our laws represent perfection. I have never claimed that.

Mr. Laughren: That is an understatement.

Hon. Mr. Davis: I would say, compared to most other jurisdictions, the time and notice required et cetera compare relatively favourably with just about any other jurisdiction I know. As I say, I do not suggest for a moment it represents perfection but it is some degree of protection for the working people.

2:50 p.m.

VINYL LINERS IN WATERMAINS

Mr. Sargent: Mr. Speaker, I have a question for the Minister of Health. In view of the recent article in the New York Times, which says that the water supply in more than 200 communities in New England may be contaminated with industrial solvent suspected of causing cancer that is solely being released from the vinyl liners inside watermains supplied to these communities by the Johns-Manville Company, could the minister say whether any of these watermains have been supplied by the company for use in Ontario?

Hon. Mr. Timbrell: Mr. Speaker, that is a question I will be glad to take as notice for my colleague the Minister of the Environment (Mr. Parrott). That is not a matter that comes under my jurisdiction.

Mr. Sargent: Surely it is a matter of health. Could the minister not check the work orders or the sales records of Johns-Manville to see whether or not these vinyl liners have been sold in this province? I talked to them previously and they said they work under the same standards as in the United States. The same formulas are operative here in Ontario as the guidelines for production in the United States. Would the minister check it out?

Hon. Mr. Timbrell: As I said, I will be glad to take it as notice for the Minister of the Environment. Matters relating to municipal waterworks for years came under the Ontario Water Resources Commission. More recently, since it was amalgamated with the Ministry of the Environment, they come under my colleague. If the member would like to send me the article, I will make sure the minister gets it so that he can give him an answer when he is next in the House, probably on Thursday.

Mr. Kerrio: Supplementary, Mr. Speaker: Is the minister aware of the literally thousands of feet of asbestos cement pipe throughout the watermains of Ontario? I wonder if he would look at the same time to see whether, when they drill, tap and let loose many minuscule amounts of asbestos in those water pipes, these are a hazard to the drinking water.

INCO EMISSIONS

Mr. Martel: Mr. Speaker, I have a question for the Premier in the absence of the Minister of the Environment (Mr. Parrott). Does it really come as a surprise to the government of Ontario that a paltry $20,000 study by the feds revealed that Inco Limited is the strongest company in the world, by a strong margin, in the nickel business?

Is the Premier not aware that my colleagues and I have argued for many years that the $245 million which was used to buy ESB in the United States in about 1975 should have gone towards the new smelter which was planned and cancelled with that purchase?

That was a suggestion of ours this government ignored. Isn’t this government only now really getting tough with Inco because Inco has announced its intentions and its ability to reduce its emissions by at least 50 per cent, which is window dressing?

Hon. Mr. Davis: Mr. Speaker, the answer to the last part of the question is no. The answer is yes to the first part of the question, did we know before the federal study that Inco of Sudbury, Ontario, Canada, is one of the significant nickel producers in the world? We know that. As to the second part of the question, which comes between the first and the third, what was it?

Mr. Martel: Should the government not have followed the suggestion from over here that the money invested by Inco in ESB should have gone towards the new smelter which it cancelled in 1975?

Hon. Mr. Davis: I know exactly what the second part of the question was. We always take constructive, helpful advice from any member opposite if it makes sense.

Mr. Laughren: Supplementary, Mr. Speaker: In view of the fact that in 1975 an internal Inco document indicated that for $300 million emissions could have been reduced to about 1,500 tons per day, would the Premier investigate to see whether or not that could have been done, whether or not his government was sold a bill of goods by Inco and whether or not the company was simply waiting for a good year in which to do it? This year, with first quarter profits of almost $100 million, the time has come, and the Premier’s government has caved in finally.

Hon. Mr. Davis: Mr. Speaker, I would be delighted to find out that information for the member. I am not familiar with that specific figure or the information he is referring to. What I think is really the relevant issue here is to what extent we can, in terms of our responsibilities as a government, reduce the environmental impact of one of the major employers of the Sudbury basin, an important economic asset to the people of Ontario, and do it in a way that makes sense.

ASSISTANCE TO FARMERS

Mr. Riddell: I have a question of the Minister of Agriculture and Food, Mr. Speaker. Having met with the Ontario Federation of Agriculture this morning regarding high interest rates and the impact they are having on the farming community, is the minister or the government prepared to indicate to this Legislature what kind of a relief program he may be implementing in order to help those farmers who are having difficulty arranging finances so they can get their crop planted this year?

Hon. Ms. Henderson: Mr. Speaker, this morning I had the opportunity of meeting with four people from the federation of agriculture -- the president, vice-president, a director and one of their economists. They told me that last Thursday in Ottawa they had pointed out the deficiencies to the federal Minister of Agriculture. We talked about many solutions that could be worked out, but at this moment I haven’t had the opportunity to consult with my cabinet colleagues and I wouldn’t be at liberty to pass out any further information.

Mr. Riddell: Supplementary: Does the minister expect he will be consulting with his cabinet colleagues and arriving at the decision within the next week? The planting season is upon us and these farmers are waiting and hoping there will be some kind of credit subsidy so they can get their crop planted and harvested this year.

Hon. Mr. Henderson: For the last six weeks at every cabinet meeting we have talked about this situation and tried to find a solution. But I can’t give assurance that it will be done this week. I can assure the honourable members that we are aware of the planting season as well as anybody and we will be consulting with the appropriate people within the appropriate time.

Mr. MacDonald: Supplementary, Mr. Speaker: The OFA indicated to us in their representations last week that up to 15 per cent of the farmers will not be able to plant their crops because they don’t have working capital. The amount of money required to meet the needs of those who really have their backs to the wall is a relatively paltry $25 million in loans or guarantee of loans, not a grant -- less than the government gave to Ford alone. Does the minister not think it is time, after talking six weeks in the cabinet, that he give this House the assurance he will have a solution this week as of his cabinet meeting tomorrow?

Hon. Mr. Henderson: Mr. Speaker, cabinet met with the federation of agriculture last Wednesday afternoon. There is no indication from that body that 15 per cent of the crops will not be planted.

Mr. MacDonald: That’s what they told us.

Hon. Mr. Henderson: They didn’t convey it to us. I spoke to them directly about it this morning. They brought out maybe three cases they were aware of where there is real financial hardship -- not 15 per cent of our 65,000 farmers. The real concern is about the low prices, the income to the farmers. So the cabinet is fully aware of all these problems. We are working towards a solution.

Mr. Gaunt: Would the minister consider a loan guarantee as the immediate answer to this very important and pressing problem?

Hon. Mr. Henderson: Mr. Speaker, all types of solutions are being looked at.

Mr. Cassidy: Could the minister explain what I think I have been hearing? Is he now reneging on the commitment that was made by the Treasurer (Mr. F. S. Miller) just a week ago where he said, “We are prepared if necessary to take independent action to assist the farming community in Ontario”? Is that still a commitment or is he backing away on the commitment to the farmers of Ontario?

Hon. Mr. Henderson: Mr. Speaker, any commitments made by this government are and will be fulfilled.

3 p.m.

WASTE DISPOSAL SITES

Mr. Wildman: Mr. Speaker, I have a question of the Minister of Natural Resources if he is still in the environs. Could the minister explain the rationale for his ministry’s new policy of privatizing waste disposal sites in wilderness areas, so that people who wish to place their garbage in a waste disposal area rather than just strewing it through the bush have to pay a fee? Is he aware that in the areas Where this policy has already been put into effect, garbage is being left in the bush rather than being put in garbage dumps?

Hon. Mr. Auld: Mr. Speaker, if the honourable member would give me an indication of the site or sites in question, I will be glad to get him the answer.

Mr. Wildman: Supplementary: I will be glad to do that for the minister, but could he answer the question? Is it the policy of his ministry to privatize these dumps -- that is, hire people to run them rather than run them directly themselves -- and as a result, have cottagers and people who live in unorganized areas and in bush areas, who normally use these sites, pay a fee to deposit their garbage? Isn’t he concerned that if this kind of policy is extended throughout the north it will lead to even more garbage being thrown around our wilderness areas, desecrating the areas that we should be protecting?

Hon. Mr. Auld: I can give a general answer which I think I have given before. We are looking at a number of options for privatizing certain public services if we feel they can be done effectively, and we are trying some out, but I am very interested to know the areas to which the honourable member is referring.

LAND DRAINAGE IN RAINY RIVER

Mr. T. P. Reid: Mr. Speaker, I have a question for both the Minister of Northern Affairs and the Minister of Agriculture and Food -- the answer will be the same -- in regard to the Ontario Federation of Agriculture’s proposal for drainage and land clearing in the Rainy River district.

When are the two ministers going to get together and deal with the brief that has been presented to them for over three years now for a comprehensive land-clearing drainage program in the Rainy River district, which would mean hundreds of jobs and thousands of acres more farm land could be available and would produce on a conservative estimate -- if I may use that term -- between $15 million and $25 million annually in the Rainy River agricultural area?

Hon. Mr. Bernier: Mr. Speaker, if I could respond to that question, let me point out to the honourable member that it was the Ministry of Northern Affairs that funded the community employment strategy study in the Rainy River-Fort Frances area, that did surface the need for improved drainage and clearing in the Rainy River district. It would, of course, provide that area with needed employment. We are following up with the recommendations of that study.

In fact, I was in Rainy River just a week ago, in the member’s absence, I must admit. I regret that he wasn’t with us, even though I did extend an invitation to him.

Hon. Mr. Henderson: Where was he?

Mr. T. P. Reid: I was there the night before.

Hon. Mr. Bernier: I did have an opportunity of meeting with the farming community. We advanced to them a proposal at that time where we suggested a pilot project could be undertaken for drainage. We asked them to identify a specific area that we could deal with. They had that area identified.

They also asked us to go back and look at the possibility of combining a drainage program with a clearing program. We are doing that now, and we hope to get back to them in the not too distant future with a pilot project.

Mr. T. P. Reid: Supplementary: Is the minister not aware that this has been going on for three years, and that to do the entire project might cost in the realm of $17 million? Is the minister aware that both he and the federal government have been dragging their feet on a northlands agreement in this area? Does he not further agree that $17 million could have been taken out of the budget, say, of Minaki Lodge and provided employment year-round for a lot of people?

Hon. Mr. Bernier: This government has agreed to the Ontario north agreement for some considerable time now. The cabinet has approved it. We are ready to go in this province, if the member’s brother would move -- I have been after him and I asked the member to get after him -- to get the federal government to sign it, and they won’t. They are sitting on it. They just won’t move. If he gets them to move, we are ready to move.

PEEL MEMORIAL HOSPITAL

Mr. Breaugh: Mr. Speaker, I have a question for the Premier. Has the Premier intervened in the dispute between Peel Memorial Hospital, which hired, on the advice of his Ministry of Health, outside consultants, Naus and Newlyn of Canada, to do a cost-saving study for 42 weeks for $462,000? At the end of a 12-month period, no savings have been incurred and they are looking for their money back. Has the Premier intervened in that dispute at all?

Hon. Mr. Davis: Mr. Speaker, I haven’t intervened but I am aware of it.

Mr. Breaugh: Supplementary question: Has the Premier informed the Minister of Health (Mr. Timbrell) of the great cost savings that have been generated there?

Hon. Mr. Davis: Mr. Speaker, I think the Minister of Health is also very aware of it.

MOVEMENT OF EMPLOYEES TO KINGSTON

Mr. Conway: Mr. Speaker, I have a new question for the Minister of Health, keeping in mind the government’s Go East strategy and paying particular attention to the Minister of Health’s oft-repeated commitment to ensure 900 Ministry of Health jobs for Kingston. He violently shakes his head. He will have a chance perhaps to comment on the article that appeared in the Kingston Whig-Standard of April 16 in which the Minister of Government Services (Mr. Wiseman) indicated: “I don’t know about that number 900. I have heard that number but that’s why I always think it’s not wise to give a time or an exact number because everyone holds you to that.”

My question is: Three years after the minister and his government made the commitment to Kingston, can he at this time tell us and the people of Kingston the exact nature of that commitment to the city of Kingston? Is he prepared today or at a very early opportunity to table documents that indicate precisely what that commitment will amount to for the good people of Kingston and eastern Ontario?

Hon. Mr. Timbrell: Mr. Speaker, as a matter of fact, few members know better than I how good they are. First of all, I think I made it clear in Kingston in July 1978 that because of the decentralization of OHIP, the OHIP component of the move to Kingston would be something in the order of 300 jobs. We have in fact decentralized to the district offices the enrolment and the claims processing functions and thereby reduced the size of the head office. We reduced the overall size of OHIP in that process.

Secondly, I think I made it clear that the government’s commitment to 900 jobs overall was intact, and as far as the details of the remaining positions between the OHIP head office component and the balance are concerned, they are being worked out by the Management Board of Cabinet and the Civil Service Commission. Any questions on that should be directed in that direction. The member may also ask my colleague, the Minister of Government Services, about the building, but the design of the general-purpose office building is proceeding for that number of staff.

Mr. Conway: A supplementary to the Chairman, Management Board of Cabinet, or whomever, across the floor: Can he tell me and the people of Kingston today the precise nature of those 900 jobs for the city of Kingston? What are his plans today? Where are those 900 jobs coming from? When, where and how does he plan to make that commitment? At what point will they understand in Kingston the specific nature of that commitment? Can the Chairman, Management Board of Cabinet, three years after his predecessor, Mr. McKeough, made the promise here and in Kingston, tell us by virtue of an oral response or a written document the exact nature of those 900 jobs?

Hon. Ms. McCague: Mr. Speaker, there’s a commitment of some standing to transfer 900 jobs to Kingston. That’s in the process of being done. The building will be started quite soon and the jobs will come from within the public service. In due course the member will be given a list of the people who are going to be going there.

3:10 p.m.

ELIGIBILITY OF FOREIGN STUDENTS FOR PROPERTY TAX CREDIT

Ms. Isaacs: Mr. Speaker, I have a new question for the Minister of Revenue. How does the minister justify the fact that foreign students, who earn money as teaching assistants in Ontario colleges and universities, are deemed to be residents of Canada and therefore pay federal income tax, but are not deemed to be residents of Ontario and are therefore not eligible for Ontario property tax and sales tax credits even though they pay Ontario property tax and Ontario sales tax? How can it be fair to make them residents of Canada but not residents of a province?

Hon. Mr. Maeck: Mr. Speaker, this is a matter which has been brought to my attention on two or three occasions now. The way the act reads, they are eligible to pay income tax to the federal government but they do not pay any income tax to the province. Because they pay no income tax to the province nor contribute in any way to the economy of the province, they are not eligible for the property tax rebate.

Mr. Isaacs: Supplementary: But they do pay a surcharge on their federal tax, roughly equivalent to what they would pay in Ontario tax if they were paying it. I do not accept that argument but I want to ask the minister a supplementary.

Given that the problem came to the minister’s attention only last year, and given that it was the bureaucrats who found the problem, how can he justify going after the students to get money back that was paid to them in previous years when neither the students nor his officials nor federal officials knew there was a problem? Is it not unfair to make the students pay for a bureaucratic mistake?

Hon. Mr. Maeck: Mr. Speaker, in this particular instance, members will recall the public accounts committee asked that some auditing be done in this regard. The public accounts committee and also the provincial auditor drew it to our attention and we started to audit. We have gone back and found these errors and are correcting them. It is that simple.

URANIUM CONTRACTS

Mr. Sargent: Mr. Speaker, a question to the Premier: Now that we have the two heavyweights together there, what kind of mockery are we having in the House when repeatedly the Premier and the Minister of Energy (Mr. Welch) have told me and told the House they would give information about the $339-million interest-free loan to Denison Mines Limited and Preston Mines Limited as to whether that loan has been paid out or what its status is?

I am concerned about the fact the Minister of Agriculture and Food (Mr. Henderson) is going to go to the Premier, to cabinet, and the whole province knows this is in limbo. I cannot find out from the Premier or the minister whether or not the loan is paid in progressive payments. Have they started to renegotiate as Westinghouse did in the United States? What is the status of this scandalous affair?

Hon. Mr. Davis: Mr. Speaker, I think the honourable member should be very careful about his language. I could be wrong but I think Ontario Hydro is part of the estimates of the Minister of Energy.

Mr. Sargent: It was a government contract, not Ontario Hydro.

Hon. Mr. Davis: With great respect, it was Ontario Hydro. It was not the government of Ontario.

Mr. Sargent: It was a government contract.

Hon. Mr. Davis: It was not a government contract. Ontario Hydro negotiated --

Mr. MacDonald: It was one that was signed and brought to this House to be debated before finalizing it.

Hon. Mr. Davis: We discussed it before and it is Ontario Hydro’s contract. It is not a government of Ontario contract at all.

Ms. Sargent: What is the Premier going to do about it? Is he going to tell us about it or not?

Mr. Speaker: The time for oral questions has expired.

NOTICE OF DISSATISFACTION

Ms. Gigantes: Mr. Speaker, I rise under the provisions of standing order 28(a) to indicate my dissatisfaction with the response to a question I asked of the Minister of Energy (Mr. Welch) and to seek leave to debate this question at the end of the regular session this evening.

Mr. Speaker: Notice has been given of dissatisfaction under standing order 28(a). This matter will be debated at 10:30 this evening.

ANSWERS TO QUESTIONS ON NOTICE PAPER

Mr. T. P. Reid: Mr. Speaker, under section 81 of the standing orders, it is required that the ministry respond to questions on the Order Paper within 14 days. I tabled question 120 on April 14, 1980, to the Minister of Health (Mr. Timbrell) in regard to the provision of prosthetic and assistive devices. There has been no response to that question and we are now over the time limit.

Mr. Speaker: We will await a response to that point of order from either the government House leader or the minister affected.

INTRODUCTION OF BILLS

NON-RESIDENT AGRICULTURAL LAND INTERESTS REGISTRATION ACT

Hon. Mr. Henderson moved first reading of Bill 60, An Act to require the Registration of Non-Resident Interests in Agricultural Land in Ontario.

Motion agreed to.

TOBACCO TAX AMENDMENT ACT

Hon. Mr. Maeck moved first reading of Bill 61, An Act to amend the Tobacco Tax Act.

Motion agreed to.

Hon. Mr. Maeck: Mr. Speaker, this bill amends the Tobacco Tax Act to provide investigative and deterrent powers necessary to deal with the growing evidence of incidents of tax evasion arising from the illegal sale of tobacco products by unlicensed wholesalers.

There is increasing evidence of the sale by unlicensed wholesalers in Ontario of tobacco products on which the Ontario tax is not being paid. The origin of much of this tobacco is outside Ontario. This bill provides penalties and other deterrents commensurate with the tax involved and will make unlicensed wholesalers subject to the same liabilities for a breach of the law as now apply to licensed wholesalers.

SUCCESSION DUTY ACT SUPPLEMENTARY PROVISIONS ACT

Hon. Mr. Maeck moved first reading of Bill 62, An Act for the making of Additional Provisions for the Levy and Payment of Succession Duty by or in respect of Property or Persons to whom the Succession Duty Act remains applicable.

Motion agreed to.

Hon. Mr. Maeck: Mr. Speaker, this bill contains provisions supplementing the Succession Duty Act to stop the encroachment on the capital of the estate by life tenants solely for the purpose of avoiding duty. Further, for those cases where duty has been legitimately deferred to some future date, the estate may settle the deferred duty on the basis of property values at the date of the repeal of the act. This will enable the administration of the Succession Duty Act to be wound up more quickly.

I wish to emphasize that the purpose of this bill is to stop an anticipated loss of revenue that may result from the repeal of the Succession Duty Act and the Gift Tax Act.

NIAGARA ESCARPMENT PLANNING AND DEVELOPMENT AMENDMENT ACT

Mr. Swart moved first reading of Bill 63, An Act to amend the Niagara Escarpment Planning and Development Act, 1973.

Motion agreed to.

Mr. Swart: Mr. Speaker, the purpose of this bill is to alter the procedures relating to the preparation and implementation of a Niagara Escarpment plan for the Niagara Escarpment planning area. The bill also contains amendments to the development control provisions contained in the act.

3:20 p.m.

One major effect of the bill will be to remove development permit appeals from the Ministry of Housing and direct them to the Ontario Municipal Board and through it to the cabinet. The second major effect of the bill will be to cause the plan covering the Niagara Escarpment planning area to be incorporated into and composed of the official plans of the regional and county municipalities that have jurisdiction in the planning area.

The amendments require the Niagara Escarpment Commission to propose a plan in the form of official plans and amendments to existing official plans for municipalities in the Niagara Escarpment planning area. Proposed plans and plan amendments would be approved in the same manner as an official plan, and official plan amendments are approved under the Planning Act.

Mr. Speaker: Order. A brief explanation is permitted with regard to the principle and the intent of the bill. But surely ample latitude has been given by the chair in this instance.

Mr. Swart: Would the Speaker permit me one more sentence to finish the paragraph?

Mr. Speaker: If it was that important, you should have put it at the front.

Mr. Swart: The Niagara Escarpment plan is composed of the official plans and official plan amendments that result upon completion of the approval process.

NIAGARA ESCARPMENT PLANNING AND DEVELOPMENT AMENDMENT ACT

Mr. Swart moved first reading of Bill 64, An Act to amend the Niagara Escarpment Planning and Development Act, 1973.

Motion agreed to.

Mr. Swart: Mr. Speaker, the purpose of this bill is to limit the types of development that may be permitted or exempted under the act until the Niagara Escarpment plan is approved. Between April 29, 1980, and the day on which the plan is approved, only residential and agricultural development for which a severance is not required and additions to or alterations of existing buildings may be permitted, provided the estimated cost of completion does not exceed $100,000.

The bill also amends procedures relating to appeals from decisions concerning development permits. The appeal right is broadened to include a 30-day notice period, during which an appeal may be made to the Ontario Municipal Board.

ANSWERS TO QUESTIONS ON NOTICE PAPER

Hon. Mr. Gregory: Mr. Speaker, I would like to table the answers to questions 17, 30, 33, 34, 123, 124 and 125 on the Notice Paper.

ORDERS OF THE DAY

BUDGET DEBATE (CONTINUED)

Resuming the adjourned debate on the amendment to the motion that this House approves in general the budgetary policy of the government.

Mr. Laughren: Mr. Speaker, it gives me great pleasure to respond on behalf of my party to the 1980 Ontario budget. As with any response to a budget, a lot of work goes into preparing a serious response. My case is no exception. I would like to pay special tribute to two of the key researchers in this area, Sym Gill and Anne Martin, who are sitting beneath the gallery, and my legislative assistant, Vivian McCaffrey, who is underneath the Speaker’s gallery. Because of their knowledge of the Ontario economy and their editing skills, they are solely responsible for the lack of rhetoric and the quality of content.

It would not be possible to feel comfortable in a response to the budget without the wholehearted and 100 per cent support of my colleagues.

Mr. Nixon: Where is your leader?

Mr. Laughren: My leader will be in. Don’t worry about that.

Mr. Nixon: I hear you are going to miss the vote on Thursday night.

Mr. Laughren: We will be here.

The Treasurer (Mr. F. S. Miller) has brought down a budget which provides increased grants to senior citizens, aid to small business and extra funding for selected social services. As New Democrats, we are proud of our fight for these increases and, quite frankly, we have every right to take credit for them. We know these increases are very important to the people who receive them and so we will not vote no confidence in the government at this time over this budget. I emphasize, “at this time.”

There are, however, two points about the new increases to pensioners that I would like to make. We expect the Treasurer will find a way to include in the new program those senior citizens who have been arbitrarily excluded because of new eligibility criteria. The member for Downsview (Mr. Di Santo) has argued eloquently for their inclusion, and there should be no doubt about where this party stands: We want those senior citizens to have full access to the new program.

Second, we are concerned that some senior citizens will still be below the poverty line -- in particular, single pensioners. As we have been urging for the last five years, the guaranteed annual income supplement (Gains) payments must be increased for single pensioners at least to the Statistics Canada poverty level. For those who do not know what that poverty level is, for 1980, for a single pensioner, it is in excess of $5,700. By our calculation it is $5,768 for a single pensioner and $8,359 for a couple. The Treasurer should look very seriously at raising the Gains level at least to meet the poverty line that is established by the Social Planning Council of Metropolitan Toronto and by Statistics Canada.

We are far from satisfied with this budget. We are dissatisfied with the inequities that remain in our tax system. We are not satisfied that the government has done all it can in funding social services. We are not satisfied with this government’s response to the problems being faced by home owners who may lose their homes because of rising interest rates. But we are willing to examine the options which we assume will be contained in the discussion paper to be tabled.

Unlike the Liberal Party, we do not believe it is wise to set up an expensive, bureaucratic and comprehensive scheme at a time when the number of hardship cases is still undetermined. We do believe, however, that relief must be provided to those in danger of losing their homes. I shall return to this problem in a few moments.

We were pleased that a commitment has been made to aid farmers who need assistance, and we assume that will be done immediately. The Treasurer has not provided interest rate relief for small business but instead has introduced an investment tax credit and reduced the small business capital tax. These two measures should encourage new investment and job creation. Together, they provide an alternative to interest rate relief. I suspect that these concessions will do infinitely more for the small business community than the Treasurer’s 1979 brainchild, the small business development corporations. The SBDCs are not working as a tool to encourage risk capital and job creation. They have simply become a 30 per cent tax dodge and the Treasurer should abandon that program, because it is just crumbs to the small business community.

We are not satisfied with the Treasurer’s initiatives for the economy in general. This budget, while providing assistance to individuals, does not address itself to the economic problems facing Ontario. We are appalled at the complete lack of initiative shown by the Treasurer and his obvious lack of understanding of the precarious state of Ontario’s industrial sector.

The Treasurer states in his budget that “we must continue to develop and implement comprehensive policies to ensure that Ontario’s economic performance improves steadily through the 1980s.” Having said that, the Treasurer proceeds to tinker with the economy. The only initiative shown by this Treasurer, since he has assumed his portfolio, has been the Employment Development Fund in last year’s budget.

Mr. Peterson: What about the car rebate? That was creative.

Mr. Laughren: That was creative, but it didn’t do much for the Ontario economy.

The Treasurer is a sly fellow. He refers to 1980 as a year of growth, healthy job creation and strong investment performance in manufacturing. He hides on a statistical table the fact that the real growth rate for Ontario will be only 0.3 per cent. Nor does he say that job creation will drop dramatically from 161,000 to 59,000 jobs. Nor does he mention that housing starts will drop from 57,000 to 50,000. We had to examine the statistical tables for that information too.

Of course, this Treasurer is renowned for his optimism. Last year he predicted a growth rate of 3.3 per cent. It turned out to be 2.6 per cent. He predicted housing starts at 71,700, and there were only 57,000. The Treasurer may well be too optimistic this year again. The Conference Board in Canada forecasts a negative growth rate of 0.6 per cent for Ontario, the second lowest in Canada. Of even more concern for Ontario is the conference board’s prediction for the province’s manufacturing sector of a 3.8 per cent decline in production. With the massive deficit in the manufacturing trade of $17 billion, it is a serious matter indeed to see a forecast of a further decline.

3:30 p.m.

The Conference Board in Canada predicts a seven per cent decline in construction and a 16.5 per cent decline in housing starts for Ontario. That would be 10,000 fewer housing starts than last year and down 25,000 starts from two years ago. It is only a matter of time before those statistics translate into a housing shortage and a lack of rental accommodation. Given the 30 per cent unemployment rate in Metro Toronto’s construction industry and the 34 per cent rate in northeastern Ontario, why is the Treasurer ignoring that problem of unemployment in the construction industry and the need to create more housing starts?

This Treasurer is preoccupied with trivia. He has provided increases to senior citizens but has not touched our tax system, which remains incredibly regressive. Ontario citizens pay the highest, most regressive taxes in Canada. I say that without fear of contradiction. When personal income tax and health premiums, less tax credits, are considered, a family earning $15,000 a year pays a tax rate of 68.5 per cent of the federal income tax, higher than any other province in Canada. I say without fear of contradiction that those people are paying the highest rate of tax in Canada, which makes it a very regressive tax system.

I must say it is reaching rather deep for the Treasurer to boast about the absence of tax increases, when previous Tory Treasurers have already burdened us with the highest tax rate in Canada. The Treasurer fails to mention the tax he could have raised without affecting the vast majority of Ontario residents. I refer, of course, to succession duties, which would tax only the top three per cent of estates and collect revenues in excess of $60 million. Those are the succession revenues which this government wiped out last year. Corporation and mining profit taxes also could have been raised to increase revenues.

Let us contrast for a moment the burden of taxation of individuals with that of the corporate sector. A couple of weeks ago in this chamber we debated a private member’s bill dealing with the phenomenon known as tax expenditures. We in the New Democratic Party have been demanding for years that this government come clean on the cost of tax write-offs.

Mr. Peterson: Which bill was that?

Mr. Laughren: That was the bill of the member for London Centre (Mr. Peterson), and we supported that bill.

Indications are that the cost to taxpayers is enormous. Estimates of federal tax expenditures are in the neighbourhood of $30 billion per year. Since Ontario paid out most of the federal tax expenditures, we knew that hundreds of millions of dollars are flowing into corporate coffers.

I recall a debate we had in this chamber with Treasurers John White and Darcy McKeough over the sales tax exemption on production machinery. And we are not talking only of sales exemptions. Tax expenditures include processing allowances, nontaxation of capital gains, depletion allowances and so on. Most of these measures have been shown to increase corporate profit much more than they have increased investment. The mining machinery tax exemption is just an example. How much does that cost us? If the Treasurer knows, he should tell us. His predecessors could tell us neither the cost nor the number of jobs it supposedly created.

We need a tax expenditure budget. In Ontario. We need a tax expenditure budget that provides details on lost revenues, jobs created and income redistribution. The Treasurer is prepared to introduce a tax expenditure for large corporations without adequate evidence that it benefits either the private sector or high-income earners. Any tax expenditure, however, that provides relief to low-income earners is brought in with much statistical justification and breast beating.

The abolishment of succession duties and gift taxes last year was done with absolutely no proof that it was necessary, but a reduction in Ontario’s Health Insurance Plan premiums or a freeze on tuition fees would be unthinkable for this Treasurer. If it ever did happen, he would table mountains of documentation detailing arguments against any such scheme, or he would simply pass the buck to the federal government.

Let no one be misled: This budget is not one that a New Democratic Party government would introduce.

Mr. Kerrio: You probably can’t support it.

Mr. Laughren: When I think of what the federal Liberals are going to do to this country in the next year, I can understand why the provincial Liberals are clamouring for an election now rather than in six months or a year from now.

Interjections.

Mr. Deputy Speaker: Order. Order.

Mr. Laughren: I would like to spend a few moments on the subject of interest rates. While I understand that interest rate policy is an area of federal jurisdiction and a responsibility of the federal Liberal government, the protection of small business, home owners and farmers is a provincial responsibility.

At the federal level, the NDP has rejected the Conservative, Liberal and Bank of Canada policy of importing its interest rate policy from the United States. The NDP says we need a made-in-Canada interest rate policy. That is where we differ from the provincial Liberals.

Surely the Treasurer can see that current high interest rates will cause lower investments, less residential construction, severe hardships for many Ontario residents and fewer jobs? This, on top of the Treasurer’s own forecast of 0.3 per cent growth for Ontario in 1980! The NDP does not think it is good enough for the Treasurer to sit back if the federal government provides no interest rate relief for farmers and home owners. We believe that an interest rate relief program is incomplete if not accompanied by an economic plan to make us more independent of United States monetary policies.

Ontario’s home owners and tenants will not be well served by a slump in the construction industry and a housing shortage two or three years from now, by rising rents or by the supply of apartment buildings drying up. Ontario consumers will not be well served if Ontario farmers have to raise prices substantially to cover their borrowing costs, if young farmers cannot continue to operate their farms, or if our farm land falls into fewer and fewer hands.

Ontario will not be well served if the small business sector faces a spate of bankruptcies or if fewer jobs are created by this sector. It makes no sense whatsoever to allow high interest rates to cause such social and economic upheaval in Ontario.

The disastrous consequences of federal Liberal and Conservative interest rate policies are readily apparent. Indeed, this minister’s own study in November of the economic impact of high rates spells out very dramatically what serious effects high interest rates will have. It showed that current policy is reducing growth and adding to unemployment.

One of the things we are losing sight of in the current debate is the basic cause behind our high interest rates. The Treasurer is right when he points out that monetary policy is in the jurisdiction of the federal government, but that does not absolve him or his government of responsibility to aid those who will be worst hit.

But the Treasurer and the Davis government have an even deeper and more significant responsibility, because it is not only the economic policy of the federal Liberal government which has led to the present crisis. Successive provincial Conservative governments have consistently and foolishly adopted an economic strategy which has led to the present crisis. A pox on both their houses when it comes to interest rate policies.

Let me be very specific. Our enormously high trade deficit with other countries has had to be financed by attracting foreign capital, and this has been done by raising interest rates. The primary cause for our high deficits has been the underlying structural weaknesses of our economy and the reluctance of both Tory or Liberal governments to deal with the real issues. The real structural problems have been pointed out to the Treasurer over and over again. But he and his predecessors have not only stood by, they have actively encouraged more foreign investment while doing nothing to stop the erosion of our manufacturing sector.

It is the dependent nature of the Ontario and Canadian economies which has led to the high deficits. These deficits have been covered by attracting foreign capital and foreign capital has guaranteed further deficits, thus perpetuating a vicious circle which can only be broken by a concentrated policy of readdressing the structural deficiencies of our economy.

The consequences of using high interest rates to attract capital and prop up the dollar have been restrained spending, reduced growth, unduly high mortgage and loan rates, and excessive unemployment and inflation. That is why we feel so strongly that this government has a responsibility to assist those who are worst hit by interest rates and not to abandon them to the marketplace.

It is the government’s policy of neglect of our basic industrial strength which has been a major contributor to conditions that have led to high interest rates. I will describe in detail later some of our proposals for dealing with these long-term structural problems.

However, it is clear that what they require is a vision and a capacity to formulate a manufacturing and industrial strategy that will free us from the shackles of a resource-based and dependent status. I seriously doubt whether this government has the vision and capacity to respond to that challenge, but at least it has the capacity to act in the short run to mitigate the worst effects of high interest rates.

3:40 p.m.

I am encouraged by some aspects of the budget in this regard. The aid to small business will go some way towards relieving the burden there, and we will insist that the budget’s commitment to aid the farm community is kept by the Treasurer and his government.

That leaves us with the home owners. I fully understand the Treasurer’s reluctance to jump in with a full-blown subsidy scheme and repeat the political embarrassments of Mr. Crosbie’s mortgage deductibility plan. The federal Liberals recognized the inequity of that proposal, and I am sure they would recognize the inequity of handing over millions of dollars in grants to home owners with incomes of $35,000 or 37,500, as their provincial counterparts would have us do, but inequity was never a preoccupation of the Ontario Liberals, anyway.

I hope the Treasurer agrees with me that we have to focus our assistance on those who need it most. What we are proposing to the Treasurer is the establishment of a temporary fund -- my leader has called it a home owners’ security fund -- which would be able to provide either loans or grants to families in the income range of $25,000 a year or less, who would be facing severe constraints to mortgage renewals at current rates. Such a program should embody the long-established principle that the gross debt service should not be higher than 39 per cent of family income. The Treasurer would be following the principle of the assistance program for owners under the Assisted Home Ownership Program, which I believe both he and the Minister of Housing (Mr. Bennett) have welcomed.

As far as tenants go, there simply has to be an enriched tax credit program for tenants. That means that high mortgage rates for the renewal of apartments are not passed through to the tenant without relief. We say there needs to be an enriched tax credit program for tenants as well.

I will give a couple of examples of our program of interest rate relief. I know the Treasurer would want me to be specific. Let us use the example of a family with an income of $15,000 a year and an outstanding mortgage of $30,000, which is having its mortgage refinanced from, say, 11 per cent to 16 per cent. In order to get that family down to 30 per cent of family income on mortgage payments, it would receive an annual grant of $1,320.

Another example is a family with an income of $20,000 and an outstanding mortgage of $35,000, and which is refinancing, for example, at 16 per cent. To get that family down to 30 per cent would require a grant of $672 annually.

Finally, another example: A family earning an income of $25,000, with an outstanding mortgage of $40,000, would receive a grant of $144.

We would have a more equitable system. In the case I have used, the family at $15,000 would get a grant of $1,320, the family with an income of $20,000 would get a grant of $672 annually, and the family with an income of $25,000 would get a grant of $144; so it is a more equitable system. We feel very strongly about that, and we assume the Treasurer, when he finally brings forth his plan, will give serious consideration to that plan which would help home owners in need.

I want to turn now to the fundamental challenge facing the Davis government, and that is the rebuilding of our industrial economy. Regardless of ideological stripe, no government will be able to turn our economy around without rebuilding its foundation. For it is that foundation, built on resources and foreign capital, that is now inadequate to carry the weight of an economy straining under high unemployment, high inflation and huge manufacturing trade deficits.

Ontario has always been the industrial heartland of Canada. Ontario accounts for 80 per cent of Canadian exports of manufactured goods. While the economic clout of the west is growing, Ontario will remain the key to the industrial success or failure of this country for many years to come. But we are in trouble. Excluding trade in automobiles and parts, only 17 per cent of Ontario’s exports are finished products, and the proportion of employment engaged in manufacturing in Ontario is declining from an already low level by international standards.

To rely on the expansion of resource exploitation to increase exports is unacceptable. Resource projects are both energy- and capital-intensive, and the spinoff or employment multiplier is lower than that for manufacturing. It is frightening to realize that while this country has a much-touted trade surplus on goods, nearly two thirds of that is in crude and fabricated material, and that surplus comes from a very narrow range of goods: cereal grains, natural gas, forest products, nonferrous metals and alloys, coal, and iron and steel products. Imports of all other foods and crude and fabricated materials exceed exports. We could have accomplished as much a hundred years ago. We have the standard of living of an industrialized country and the trade pattern of an underdeveloped one. But the area of both disaster and salvation for Canada and Ontario is manufacturing, especially the high-technology sectors.

Manufacturing has recorded a deficit for 25 years, but the picture is getting dramatically worse. In 1979 alone the deficit increased from $12 billion to almost $17 billion. It is not difficult to identify the worst problem areas. Auto production registered a record $3-billion deficit in 1979 and machinery a record $5-billion deficit. Both industries are essential to an industrialized economy.

In high-technology goods the Science Council of Canada has stressed that the trade deficit is growing by leaps and bounds. Trade deficits represent lost jobs, lost wealth, lost government revenues, less money for social and health services and a warning about the future. When a province is suffering serious unemployment, to export jobs through trade deficits is clearly wrong. If the huge deficit in manufactured goods speaks volumes about our future, the escalating deficit on services speaks to the indiscretions of our past.

The deficit on interest payments, dividends and business services was $9 billion in 1979, up from $3 billion just five years earlier. The services deficit is very substantially the result of excessive foreign ownership in the economy. Interest and dividends and fees for licences, machinery, consultants and financial services now make up the majority of the services deficit. The establishment of the Foreign Investment Review Agency was an act to allay the growing fears that we were being completely sold out.

FIRA has acted as a perfect smokescreen which gives Canadians the impression that foreign takeovers and now investment are being monitored. In fact, since its creation in 1974 about $20 billion in interest and dividends has been paid out to non-Canadians and foreign ownership is still growing rapidly. More than 90 per cent of all applications are approved and Ontario rubber-stamps most of them, in sharp contrast with Saskatchewan which has set out guidelines for each sector. If the takeovers continue, our services deficit will keep growing, making matters worse.

I was astounded yesterday when I heard the member for London Centre (Mr. Peterson) talk about the problems of a branch-plant economy, when it was the federal Liberal government that conducted a sellout of this country that has no equal in the world.

I can only hope the provincial Liberals are in contact with federal counterparts to tell them it is unacceptable and that kind of policy must end once and for all. It wears a little thin hearing the provincial Liberals talking in this chamber about the problems of high interest rates and the problems of foreign ownership. Maybe they should talk to their federal cousins in Ottawa so we can start rebuilding and repatriating the Ontario economy.

Mr. Nixon: If you had the guts to vote against the Tories. Talk about a lily-livered approach to policies. Yours takes the cake.

Mr. Laughren: If there is a lily-livered approach to the Ontario economy, it is by the provincial Liberals and the federal Liberals.

We cannot solve the problem of our deteriorating manufacturing sector or our huge services deficit without tackling the problem of foreign ownership. We cannot tackle the foreign ownership problem without government intervention in planning the economy. Thus an explanation surfaces -- a solution ideologically unacceptable to this government.

Instead of action, the Davis government has decided to ignore the problem of foreign ownership of the Ontario economy. We have the spectacle of our Minister of Industry and Tourism (Mr. Grossman) begging for more foreign investment with his glossy booklet The Profit Centre, despite the evidence that the advantages of such policies are short-run and illusory, and the disadvantages long-run and very tangible.

As though our dependency were not bad enough, the federal government, with the tacit approval of this government in Ontario, is steering us towards freer trade with the United States. One would think that the past experiments in free trade, such as the auto pact, would sound a warning to our government. But such is not the case. Our Treasurer, the Premier and the Minister of Industry and Tourism have put out a siren call to foreign investors to take advantage of free trade on the North American continent.

We all know the arguments for free trade, but we believe they are virtually irrelevant when applied to the Canadian economy. Free trade does little to stimulate exports by the branch plants which stalemate our manufacturing sector, because many have export restrictions and sell to the Canadian market only. The arguments for freer trade with the United States are based on the concept that trade occurs between equals, with each country exercising its natural advantages. This is not the case in Canada, particularly when we consider that more than 70 per cent of our trade is with the United States.

3:50 p.m.

Continentalism assumes that Canadian industry would be efficient and prosperous if it had access to a larger free-trade market. In fact, export opportunities exist for those industries which have first developed the expertise and efficiency to meet domestic demand. If the Treasurer and the Minister of Industry and Tourism were being honest with the people in Ontario, they would call continentalism by its real name instead of trying to gloss it over with fancy names, because that is really what they are all about.

Besides, the domestic market is not too small in several very key industries, sectors which are absolutely critical to the rebuilding of Canadian manufacturing. We have a large domestic market for machinery; electrical products, such as hydroelectric equipment, wire and cable; consumer electronics; agricultural machinery; mining machinery; processed food; automobiles and parts. These are the very industries where we have huge trade deficits and, in some cases, free trade with the United States.

Our serious problem will not be resolved with more foreign ownership, with a preoccupation with export-led recovery, with free trade with the United States, or with global product mandating. This is the Tory industrial strategy, but it is plainly and simply misguided. We in the New Democratic Party believe we should concentrate on replacing imports to revitalize secondary manufacturing, manufacturing owned by Canadians.

Let us further examine this government’s strategy and the one we New Democrats propose. At the centre of the Ontario Conservative strategy is an export promotion gimmick called global product mandating. It is a strategy designed to encourage multinational branch plants in Canada to specialize in a narrow range of products for sale on world markets. It is a strategy known as export-led recovery. It is a wrong policy for Canada and Ontario, because it simply encourages the rationalization of Canadian manufacturing into the North American market, which is really disguised continentalism.

In Canada we will make one product line, according to this government’s philosophy, and import the rest. When the parent company decides in the future to rationalize further and produce that line in the southern United States, we will import all the product line and our deindustrialization will continue. Recent cases in point are production cutbacks at Winchester-Western in Cobourg and Outboard Marine in Peterborough. How many examples does the government need before it understands that it is the wrong policy that it is pursuing?

Global product mandating is a fool’s paradise. Who believes that the parent company will transfer research and development to Canada? Will such a strategy give us more skilled jobs? If the Treasurer is being honest, he knows that it will not. Global product mandating is the wrong policy because it means this government has abdicated to the multinationals any control it has over economic planning. The government is really saying to the multinationals, “Do your own thing.” That is what it is saying, and that is not in the best interests of Ontario.

If the Treasurer believes that export-led recovery is the right strategy, I hope he will stand in his place and tell us of jurisdictions that created or rebuilt a healthy manufacturing sector without first meeting the demands of the domestic market. Surely it is understood by serious economic planners that we must develop the economies of scale and expertise in manufacturing by meeting domestic needs before launching ourselves into world markets.

Since the US is the prime target of global product-mandated sales, does the Treasurer seriously believe the Americans, with their own balance-of-payment problems, will tolerate increased imports from Canada?

The Tory strategy has some other components besides continentalism through global product mandating: increased foreign investment, a Shop Canadian program, globe-trotting trade missions, government procurement with a paltry 10 per cent preference for Canadian-made goods, and the Employment Development Fund. The Ontario government has put a lot of effort into attracting more foreign investment to Ontario this past year. Not only did they approve 92 per cent of foreign investment applications, but they also actively sought capital on trips to Japan, Europe, England and the southern United States. If I did not know better, I would think the Treasurer was a Liberal, the way he is trying to sell us out.

Hon. F. S. Miller: The member can call me many things, but not that.

Mr. Laughren: That is what we have to think. The federal Liberals have sold this country out, and now the provincial Tories are doing it. I am glad someone, and I am proud it is our party, is standing up and saying it is time to repatriate the Ontario economy. Somebody has to say it.

The most tangible effort is the government’s slick brochure called The Profit Centre, in which Ontario is sold as a lucrative place to invest industrial capital, because of the large market, moderate corporate taxes, no restrictions on the use of capital, and competitive wage rates. No restrictions on the use of capital means, in other words, they make their money here and take it out. And we wonder why we have a trade deficit.

The only real argument the government can make for this blatant pitch for more foreign control is the creation of jobs in the short run. In fact, it only neutralizes the hundreds of jobs that are disappearing from existing branch plants as the parent companies rationalize their production. It does nothing about the 350,000 jobs that are lost as a result of our manufacturing trade deficit or about the thousands of jobs that are represented in the annual billions of dollars in service payments that flow out of Canada.

The cornerstone of the Treasurer’s budget last year was the Employment Development Fund. It was designed to provide funds for new investments and, above all, jobs. When the scheme was introduced, we criticized it because it had no focus. No commitment was made to rebuild any particular sector. One year later, our criticism remains valid. If no change is made in the employment development program, the money will continue to be scattered over the entire manufacturing sector with no coherent strategy in place.

The New Democratic Party is committed to rebuilding and repatriating our manufacturing sector. But if public funds are to be used, we believe the result should be a public presence in the manufacturing sector. We would select a sector and make it count. The Ontario taxpayers would have a tangible stake in their economy by insisting on equity and performance guarantees to go along with the public’s investment. When I see the agreements this government is signing, in conjunction with the federal Liberals, who after all are putting up a third of the money in these employment development programs, I have to wonder what kind of managers they are of our economy. A combination of Liberals and Conservatives trying to dabble in the economy is a disaster.

The Davis government’s measures are not the way to repatriate and rebuild the Ontario economy, and they will have no significant effect on our balance of payments deficit. The New Democratic Party has a strategy for Ontario. We believe there is enormous potential to rebuild our manufacturing sector, to further process our resources and to repatriate our economy. I know that the Davis government would claim the same goals, but the crucial difference between what they say and what we say is that we are willing to challenge the traditional theories and strategies that have put us in our present untenable position.

We see Ontario’s economic problems as deep and structural, and we would intervene to solve them. Import replacement would be our main goal. We would shift demand to Canadian-made goods. We would work with the private sector to rebuild our manufacturing industries and intervene publicly in strategic sectors where private businesses are unable or unwilling to do the job. Since the rebuilding process will take time, we would carefully select particular sectors, especially in high-technology areas, where we have a large domestic market and where imports capture a large portion of the market.

Transportation, processed foods and beverages, synthetic textiles, health-care products, energy conservation, consumer electronics, electrical products, and machinery are examples of sectors that desperately need rebuilding. Mining machinery is a classic example of a structural deficiency that must be corrected. I have raised this issue many times, but the government’s only response has been to have a trade show.

The Minister of industry and Tourism is the master of saying one thing and doing another. On February 29, 1980, he said to the Edmonton Chamber of Commerce, and I quote: “During the mining boom of the 1950s, firms in Canada placed orders for hundreds of millions of dollars worth of mining equipment with companies in Sweden, Germany and the United States. Those orders effectively underwrote the research and development work that has made their manufacturing industries internationally dominant. In short, we helped to create the industrial strength within those nations which now rank among our major international competitors.”

I hope no one ever accuses the minister of learning from his mistakes. His government has done virtually nothing about the problem, and here we are importing an increasing proportion of our mining machinery. We are still doing it. Seventy-three per cent of our mining machinery is imported, up from 48 per cent in 1964. We are number three in the world in the production of minerals, we are number two in the consumption of mining machinery, and we are number one in the importation of mining machinery. If ever a high-technology sector screamed out for government intervention, it is the mining machinery sector.

4 p.m.

We have the world’s greatest laboratories, and the potential for growth is awesome when we contemplate projects such as heavy oil. In northeastern Ontario alone, Inco, Falconbridge, Rio Algom and Texas-gulf provide a potential for $750 million in sales per year. The federal Department of Energy, Mines and Resources estimates that new mining projects in Canada already scheduled up to 1990 will require $3.5 billion worth of equipment, and even that is not all-inclusive.

We estimate that, with spinoff jobs included, mining machinery imports represent a total of 10,000 potential jobs in Canada. But this government, as a direct result of its ideological paralysis, refuses to intervene and establish a crown corporation to produce mining machinery or explore the possibilities for joint ventures.

The New Democratic Party, with resources in the public sector, would have the leverage to develop an aggressive, modern mining machinery complex. We believe this would provide Ontario with new jobs and research and development expenditures. We believe that further processing of our ores in northern Ontario, combined with the production of mining machinery, would give northern Ontario a new lease on life, while taking an important step towards rebuilding secondary industries.

In other high-technology sectors already mentioned, the justification for our commitment to replace imports is as compelling as that for mining machinery. The Treasurer has not taken a single new initiative in this budget to create jobs. I know the Treasurer views all government job creation as make-work projects. He does not understand that government can create new wealth, rather than simply absorb it.

New Democrats are not confined by such ideological straitjackets. We believe there are enormous opportunities in Ontario and that this government has an obligation to take advantage of them. We have huge trade deficits in mining machinery; we should produce the machinery here. We desperately need alternatives to nuclear energy, alternatives that are cheaper and more labour- intensive.

We are in the middle of a severe residential construction slump, and it is going to get worse. We need affordable homes and rental accommodation. An enriched home insulation program would conserve energy and create jabs. A solar heating subsidy would save energy, encourage research into this key alternative energy source and create jobs. Special grants for hard services for northern Ontario would provide much-needed sewer and water supplies and create jobs.

It should be noted that this budget ignores northern Ontario, except for minuscule mining exploration incentives. There was a day when this government would not have brought in a budget which so totally ignored northern Ontario. It is a sad commentary on the government.

We have an increasing deficit on processed food. We should grow and process it here. I am sure the Treasurer has seen the Ministry of Agriculture and Food’s poster showing a fork laden with processed mixed vegetables -- carrots, peas, green beans and corn -- suspended over the declaration, “Good things grow in Ontario.” The poster should read, “Good things used to grow in Ontario.” For that matter, they used to be processed here, and the cans and containers were manufactured here. Instead, that one forkful of vegetables cost Ontario farmers and workers close to $1 million in lost wages in 1979. Add to this the other $33 million in forfeited wages in just 12 other processed fruits and vegetables crops, and the seriousness of the situation becomes obvious.

Thirty-four million dollars in lost wages translates into a good many jobs. It could mean the difference between some Ontario farmers staying in production or going out of production. It does mean the difference between jobs and unemployment. While this Treasurer is forever bragging about jobs being created by the private sector, he chooses to ignore situations where the private sector is failing miserably.

Food processing is an industrial sector which the government should regard as critical. The Minister of Agriculture and Food (Mr. Henderson) sees his responsibilities as beginning and ending at the farm gate. The Minister of Industry and Tourism (Mr. Grossman), who should be concerned about this, thinks that food is grown and processed at La Scala. The Treasurer regards the problem as one that the marketplace will resolve. That is a fine combination of concerns.

There is one major issue simmering throughout Ontario and that is nuclear energy. While I have grave reservations about the safety of nuclear power plants and the storage of their wastes, I would like today to deal with the economic and job- creation aspects of energy. The conventional wisdom being preached is that, while nuclear energy is expensive, there are no acceptable alternatives. The facts, however, show that alternative forms of energy have real potential for providing jobs. The introduction of a broad range of currently feasible conservation measures could simultaneously cut the consumption of rapidly depleting energy resources and create hundreds of thousands of new jobs. The expansion of solar energy programs has similar potential.

Perhaps the Treasurer would prefer an analysis using some Bay Street language. There are numerous studies that compare the impact of large-scale, highly centralized technologies like nuclear power, or tar sands plants with that of the smaller-scale, dispersed, decentralized option. These studies conclude that, normally, the turnaround for capital invested in conservation measures is much shorter than for capital invested in large-scale megaprojects.

As an internal Department of Energy, Mines and Resources memo put it: “Consider energy conservation in buildings: payback of investment in residences of five years, at 1977 energy prices; in commercial buildings, the criterion is overall probably closer to two years. Furthermore, energy savings often commence immediately investment is made.

“Now compare that with investment in energy supply enhancement projects, such as an oil sands plant. At international prices, the payback on investment when production commences would be at least five years. The sum of the investment must be made seven years before production ever commences. On average, that payback is probably closer to 10 years at international prices. At 1977 prices, the payback would be over 12 years.”

The intervening years have changed the numbers, but the principle illustrated remains the same. As we members from northern Ontario know all too well, there is a boom-and-bust cycle associated with very large-scale projects, which tend to leave the regions involved with little to show for the investment once the project is completed.

For instance, despite the investment of at least $34 billion in the Bruce nuclear power development, the region remains economically sterile and dependent on continued investment in project construction for economic health. Investments in conservation or solar, on the other hand, tend to be considerably more dispersed, extend over a longer period and create more stable employment because of the relatively small scale of the projects or products involved.

It should be emphasized that small-scale diversity will not work for all our energy problems, but it will work for many sectors in cases and has advantages to recommend it quite apart from cost comparisons.

The Treasurer should step back for a moment, from the immediacy of the debate over nuclear safety, Darlington, and his government’s hype over the superiority of the Candu reactor. He should investigate very thoroughly the alternatives to nuclear. He should take a long and sober look at the economics of nuclear power.

Despite the obvious need for job-creation projects such as the alternatives to nuclear and others I have just discussed, the Treasurer has chosen to ignore these needs and the unemployed in Ontario. It is simply breathtaking to see the Treasurer deliberately overlook this while taking credit for holding down provincial spending and castigating the federal government for its excessive spending.

In addition to government planning and intervention in key sectors, an NDP government would provide an infrastructure for manufacturing, including skills training and research and development. One key area that needs attention is skills training.

It is an astonishing indictment of this government that in 1980 we are still hearing about the lack of skilled tradespeople in Ontario. In the 1960s, both the select committee on manpower training and the then Minister of Labour, Dalton Bales, argued that it was no longer satisfactory to rely only on immigration and informal training to meet our manpower needs. That was in the 1960s. Despite these longstanding concerns, the Ontario government still actively helped employers to import almost 1,000 skilled workers in 1979. In fact, over the last five years, the Ontario government has aided in the importation of 5,580 workers.

The announcement in the budget of funds for employer-sponsored training (EST) does not indicate that this government has yet taken seriously the need for a comprehensive manpower training policy. The EST program remains the government’s dam new initiative, but there were only about 915 trainees as of February of this year, and about 325 completions. That is hardly a sufficient response to the needs.

4:10 p.m.

There are a number of myths that surround the whole area of industrial training which this government must face up to in designing and supporting adequate training programs. First, it is contended that new trainees are often not attracted to skilled trades because of the negative image associated with blue-collar work. There does not seem to be any evidence to support this notion.

Indeed, a second myth, that there is a shortage of applicants for skilled trades training, is also false, and belies the notion of a negative image for skilled trades. Almost every single training program or technical course is oversubscribed. Contrary to the assertions of the Minister of Education (Miss Stephenson), there is no lack of applicants. Instead, there is a lack of suitable programs which this government should be providing.

In this connection, let me say that even a relatively small addition of budgetary funds for the colleges of applied arts and technology would see immediate returns. Many of their technical courses have twice as many applicants as there are places.

Another persistent myth revolves around industrial training and the perception by employers that it is unproductive to train because of poaching by other employers. In fact, the most recent evidence suggests that the retention rate is quite high and much less of a problem than is supposed.

Finally, employers are reluctant to train because they think the investment required is too high and will not be paid back. Again, the evidence suggests that not only are the costs of training relatively low, but also the investment in training is returned quite quickly in the form of increased productivity and output.

This government has had study after study over the last 20 years telling it that skilled trades training was being ignored. The response over the last 20 years does not inspire great confidence in this government’s capacity to come to grips with manpower training.

Lastly, I will offer some suggestions about how to begin that process.

1. There needs to be a much larger infusion of funds and staff for technical courses in the community colleges. These are suffering from inadequate facilities, not lack of applicants.

2. Retraining and upgrading programs should be established which would allow tradesmen in the construction trades, for example, to retrain for industrial purposes. It does not make any sense to import industrial electricians when unemployed construction electricians could be easily retrained.

3. A much greater responsibility for manpower training must be assumed by industry. Serious consideration should be given to a policy of requiring funding from industry for training, with a system of returning such funds as training is actually carried out. Since the main beneficiaries of training are employers themselves, it is only equitable that they share a fair portion of the cost.

A second area needing government intervention is research and development. If we are to put Ontario on a sound industrial footing, we must do it by becoming less dependent upon second-hand technology. It should be clear to this government that encouraging foreign corporations to do more research and development here is not enough.

This government’s global product mandating scheme embodies the pious hope that branch plants will do more research and development work for a product line here in Canada. We believe the Ontario government must impose a research and development levy on large producers who fall short of research and development targets. A grant levy system would ensure a pool of funds for research and development purposes. The fund could be used by the Ontario Research Foundation and by private firms as well. At the same time, tax credits could be enriched to encourage research and development by small and medium-sized firms in those industries that have the greatest potential.

This role will increasingly fall to the provinces because the General Agreement on Tariffs and Trade now defines subsidies as nontariff barriers, thereby allowing foreign firms to retaliate. Provincial subsidies, however, are exempted from this rule.

In addition, the Ontario government must, in conjunction with federal departments and a beefed-up Ontario Research Foundation, sponsor important programs of applied research. We would also expand university research programs to encourage research and development in areas such as energy conservation as well as other programs which would benefit both the public and private sectors.

Finally, an NDP government would strengthen government procurement programs by increasing the 10 per cent price preference for Canadian content. As well, the private sector must be persuaded to more vigorously seek out Canadian-made goods and services before awarding contracts to non-Canadians. As a matter of fact, when I examined the Employment Development Fund criteria for manufacturing and for the pulp and paper companies, it struck me that the regulations for procurement of Canadian goods and services were extremely weak; they should be strengthened.

If we in Ontario are to direct our economy rather than allow it to drift, ad hoc government tinkering is not good enough. Private corporate planning effects us all, often adversely. It is essential that the government plans as well, using the growing public economic power to overcome the dominance of the private sector and to maximize the benefits of public- and private-sector activities for Ontario’s social and economic future.

The New Democratic Party would create a crown investments corporation to direct long-term planning for Ontario. Following the example of Saskatchewan, a crown investments corporation would exercise financial control, provide policy direction, co-ordinate operations and establish major investment priorities for public holdings. It would bring existing and new commercial crown corporations and agencies into the crown investments corporation system, including Ontario Hydro, the Ontario Energy Corporation and the Ontario Development Corporations. It would ensure full public accountability by having the board of directors of the crown investments corporation include cabinet ministers, who as a major part of their responsibility would also head up one or more of the constituent crown corporations within the crown investments corporation.

The province of Saskatchewan has a crown investments corporation; while we do not argue that our economies are similar, nevertheless the role the public sector plays in the economic development of Saskatchewan is very impressive. In Saskatchewan, of the 17 commercially operated crown corporations, 16 had a profit in 1978 -- the exception being the Saskatchewan Mining Development Corporation, which is just commencing uranium production.

In Saskatchewan, crown corporations are primarily active in the resource sector. In Ontario, we must determine our own priorities. The New Democratic Party believes we must emphasize the rebuilding of key manufacturing sectors, but we also recognize the fundamental importance of the resource sector.

This government has not provided a coherent resource policy or a manufacturing strategy, or any policy to link the two together. This government has no intention of establishing a public presence in the Ontario economy. While this may be ideologically satisfying to the Treasurer, it is appalling to see such a posture maintained in the face of overwhelming evidence that intervention is necessary.

I could not talk about economic planning without spending a moment on our nonrenewable resources. The neglect of our resource sector is more than serious. It is beyond belief that we receive less than two per cent of the value of mineral production in Ontario. Saskatchewan receives revenues in excess of 13 per cent of the value of production. I am talking about mineral production, and not about oil and gas production.

The noninterventionist resource policy of the Davis government is guaranteed to provide a negligible return. Taxation without threat of public intervention is ineffective, because the private sector simply extracts a higher grade of ore as the tax level rises. We call it high-grading.

Of course, there is always the threat of shutdowns or layoffs; we have seen that.

Mr. Makarchuk: They give us acid rain.

Mr. Laughren: Yes, it’s a nice trade-off.

In Saskatchewan, a resource policy was developed with three key objectives: (1) diversification of the economy away from agriculture; (2) stabilization of economic growth by smoothing out the booms and busts associated with resource sales; and (3) reduction of regional disparities, particularly in northern Saskatchewan.

Those are three reasonable objectives, and in Saskatchewan the government moved to achieve them with government intervention. The Davis government falls short on all three counts. Rather than using our resources to further diversify, with more processing, this government encourages precisely the opposite.

In 1979, this government awarded Falconbridge a 10-year exemption from section 113 of the Mining Act which requires that refining of ores be clone here in Ontario. This government has, in effect, told Falconbridge, that even after producing in Ontario, extracting all ores in Ontario for almost half a century, it can ship its ores to Norway for refining and then be allowed to write off those Norwegian refining costs against taxes they should be paying here in Ontario. There is no better example of adding insult to injury, Mr. Speaker, and I can tell you agree with me.

4:20 p.m.

This government exports jobs and reduces resource revenues all in one fell swoop. This government encourages neither forward links from our resources to further processing and secondary manufacturing nor backward links to the purchasing of supplies, such as mining machinery. It sees resources as one part of our economy and manufacturing as a separate part. We have no evidence that the Treasurer has any understanding that the level of social and health services we can afford depends on the health of our wealth- producing sectors.

A laissez-faire government such as this one always fails to achieve the delicate balance between economic development and social cost. In Ontario, we get no sense at all from the government that our nonrenewable resources are being husbanded in such a way as to maximize their lifespan. We get no sense that development will be controlled in order to string out production to protect markets, maintain prices and minimize social environmental costs. Regional disparities continue in Ontario precisely because of the lack of a sensible resources policy. The people of Ontario have every right to expect more from this government.

We in the New Democratic Party know we could do better. We know there is enormous potential to use our resources to create new wealth, to create jobs, to improve our manufacturing trade balance, to build better and more stable communities in northern Ontario and to make a substantial contribution to provincial tax revenues. The New Democratic Party has been calling for many years for a Northern Ontario Tomorrow Fund derived from resource revenues. Such a fund would maximize revenues from our resources and provide a pool of money with which to deliver improved social services in the north and to use as a hedge against the day when nonrenewable resources run out. Both Saskatchewan and Alberta have heritage funds. That would be our commitment, and not just to northern Ontario because all of Ontario would benefit by such a strategy.

Rather than establish a tomorrow fund or a heritage fund, this government created a Ministry of Northern Affairs. There is a world of difference between government action to increase resource revenues for the people of northern Ontario and the creation of a pork-barrelling, bureaucratic ministry which consumes wealth rather than creates it.

I want to address myself to the most critical situation now facing any industrial sector in Ontario, the layoffs in the auto industry. It is because the auto industry is by far the most important industry in Ontario, employing one in six, that I was distressed at the lack of action taken on the automobile sector in this budget. Because the reason for these layoffs reaches deeper than the downturn in the business cycle, I expected more than a statement of intent in the Treasurer’s budget.

There are some 20,000 auto workers laid off indefinitely across Ontario this month. Both Ford and Chrysler have laid off 35 to 40 per cent of their work forces. In Windsor, the city which used to boast, “What Chrysler builds, builds Windsor,” 20 per cent of the labour force is out of work. The auto makers have so far closed the doors on nearly 10,000 people. The Chrysler supplementary unemployment benefits fund ran out last September, and thousands more have exhausted their unemployment insurance benefits.

Other southern Ontario towns have been severely hit with auto parts layoffs. Chatham and Kitchener each have 2,500 indefinite auto parts layoffs. Plants like Sealed Power of Stratford, Canada Ferro Limited in the Premier’s own riding and Firestone in Whitby are shutting down completely.

The layoffs tell the human side of the story. The other side of the coin is the deficit in trade in automotive products with the United States, a deficit that affects each and every Ontarian by pulling down our dollar and pushing up interest rates. As the Treasurer noted in his budget, in 1979 the auto deficit reached $3 billion and the parts deficit rose to $4 billion.

This deficit represents $355 for every Ontario resident and $32,000 for every auto worker. Experts predict it will exceed $5 billion by 1985. These deficits are climbing, despite the fact that sales of North American vehicles in Canada rose last year, with the exception of Chrysler products. That is something the Treasurer seems to forget: It is not the slump in the Canadian market that is causing the problem; it is the slump in the American market.

The reason for these high deficits is the recession and the energy crisis in the United States which have caused sales of cars there to plummet. Since more than 70 per cent of Canadian car and parts production is shipped to the United States, Ontario auto workers are bearing a disproportionate share of the American slump. The same thing happened in 1975. Exports have declined while imports of vehicles have risen by more than 30 per cent.

Together with parts, imports into Canada last year increased by 20 per cent. This increase alone represents about $2 billion worth of business for the giant auto companies. The irony of the situation is that while Canadian auto workers are bearing the brunt of the American recession, the expanding Canadian market is providing a vital safety cushion for GM, Ford, American Motors and even Chrysler.

This government has chosen to hide behind the market slump in explaining away the severity of these layoffs. Day after day the Premier, the Treasurer and the Minister of Industry and Tourism have stood in this chamber promising a return to normal once the American auto market picks up. Unfortunately, most economists and critics are less optimistic. The American automobile industry is in decline because of energy restrictions, market saturation, poor management decisions and increased foreign competition. It is a telltale sign that Chrysler Canada Limited has just announced a giant sidewalk sale of 1980 cars and trucks at its silent Windsor car plant. We can only be thankful that the Treasurer was not jogging past that sidewalk sale, or he would be there buying one of the bargain cars.

The crucial factor for the future of the Canadian car industry is not just the upturn in the Canadian market, but rather the mix of cars we will make. The fact is that while overall sales of Big Three automobiles plummeted in the United States last year -- thus denying Canada its usual level of auto production and export -- US sales of subcompacts soared, and none of these is built in Canada. While relief will be on the way with the retooling next September of the American Motors plant in Brampton and with the opening of the new six-cylinder engine plant in Windsor, the Canadian industry nevertheless will be saddled with a preponderance of large cars and vans whose popularity has sagged in the United States.

That is why my colleague from Windsor was being very firm this afternoon when he said that aid to Chrysler should not be based on production of vans only. Even what production of smaller vehicles there is in Canada fell by some 26 per cent last year. In contrast, compact and subcompact production in the United States rose by nearly 40 per cent last year.

As the auto industry retools for the new generation of small cars and parts, it is crucial that we assess the prospects for a fair share of that investment in Canada. Only that investment will ensure the future health of our auto industry. The auto companies, like the oil giants, are experts at confusing and twisting the facts about investment prospects. But what figures are available about Canada’s share raise an alarm.

GM plans to spend $38 billion around the world to 1985, $30 billion of that in the United States. Canada deserves at least $3 billion of the investment, based on sales. We have been promised only $2 billion. Some of that was a reannouncement of earlier investment intentions. Ford will spend $20 billion to 1985. Canada will get an engine plant and an aluminum casting plant, but that is not a fair share.

Chrysler, if it gets through its immediate financial troubles, plans to spend $14 billion to $15 billion in the United States. Chrysler promises us from $1 billion to $1.4 billion in investment in Canada. That is roughly six per cent of the North American total, but the Canadian market accounts for 12 per cent of the North American sales of Chrysler products. One does not have to be a mathematician to understand that if we got 12 per cent of the sales we deserve more than six per cent of new investment. The auto pact has failed to provide a reasonable and fair share of parts production, investment and research and development.

In a recent study by the Science Council of Canada, Canada’s shortfall was once again confirmed. This study estimated a shortfall of 1,400 engineers plus 2,800 support staff, as well as 19,000 in in-house parts industries, by the major auto makers. Despite its own calculations that achieving a fair share would mean an additional 25,000 auto jobs in this province, this government and the Liberal government in Ottawa have so far shown no sign of putting strong pressure on the auto companies to live up to the pact. Year after year, customs duty remissions totalling more than $400 million to date have been granted to manufacturers who have failed to live up to the production-to-sale ratios of the auto pact.

The approaches of this government amount to tinkering with some of the most powerful corporations in the world, trying to offset the reality that the American auto industry is centralizing investment south of the border. For the Ontario government to sit in neutral while the Minister of Industry and Tourism revs his engine is irresponsible.

Mr. Cassidy: He spins his wheels.

Mr. Laughren: He spins his wheels and revs his engine, and he goes nowhere.

4:30 p.m.

The New Democratic Party believes that the status quo is unacceptable. The governments in Ottawa and Ontario are not powerless in this matter. Canada’s market is large and important to the Big Four. As well, the United States trade surplus with Canada is a very important element in the overall US trade surplus of manufactured goods. With America’s deteriorating trade position in the 1970s, this surplus with Canada was doubly important. Neither the auto makers nor the US government can afford to turn their backs on the Canadian market.

Canada’s market for automobiles is very large in world terms. Canadians buy 1.4 million new cars and the same number of new trucks, for a total value of nearly $10 billion. Canada’s market exceeds the production of most successful European auto makers. France’s Peugeot-Citroen produces 1.6 million cars and trucks, with sales of $10.6 billion. Daimler-Benz of West Germany thrives on the production of 560,000 cars and trucks. Sweden’s Volvo is profitable on the production of 300,000 vehicles. And Japan’s Honda turns out 745,000 cars and trucks, with sales of less than $4 billion.

This government must make it clear to the auto makers and Washington that the present functioning of the auto pact is unacceptable to Canadians. The rules in the North American auto game must be changed. The auto pact must be revised to reflect a justifiable increase in Canadian content in the North American cars that are produced and bought in Canada. The current Canadian value added of 70 per cent must be raised at least to 75 per cent or even to 80 per cent. it is estimated that each five per cent increase in Canadian content would provide 7,000 more jobs.

New letters of commitment for investment in small cars and their components must be forthcoming from the auto makers in return for continued duty-free access to the Canadian market. The waiving of millions of dollars in duty remissions required, because the auto makers, particularly American Motors, have failed to live up to the auto pact safeguards over the years, must be halted.

In the auto parts sector we have two proposals which would increase production in Canada. The provincial government must come out strongly in support of federal duty remission schemes with offshore producers. Foreign vehicle imports now are capturing 18 per cent of the Canadian market. It would be foolhardy to deny Ontarians thousands of job opportunities which can be secured for making parts for these vehicles in return for a reduction in custom duties.

Canada is the only industrialized nation in the world which has allowed its automotive industry to function as the adjunct of the automotive industry of a larger nation. Internationally, 31 countries have created jobs at home through the imposition of local content requirement on vehicle imports without entering into formal treaties.

Duty remission schemes with foreign producers must be extended and strengthened. The threshold of Canadian content required in order to qualify for duty remission should be raised. Faced with rising foreign imports, the American Auto Workers Union is currently pressing for a content rule of 75 per cent for foreign auto makers, as well as quotas. The US demand vis-à-vis the Japanese auto imports are remarkably similar to those heard in Canada over the auto pact, yet the US-Japan auto deficit is only one third the size of the Canada-US deficit on a per capita basis.

This government should also establish a provincial research and testing facility for auto parts. Companies would have access to this facility on a user-pay basis. The government should also set up an agency to help provide a link between parts producers and auto makers. Too often insufficient lead time and opportunity are given to independent Canadian parts producers to develop parts for vehicles of the future.

Those are two positive, precise suggestions we have for the Treasurer to try to turn around the problems in the auto sector.

The matter of financial aid to ailing Chrysler is one I want to discuss for a moment. This government has been singularly unforthcoming about lack of participation in the negotiations. We in the New Democratic Party find this appalling since Ontario taxpayers likely will have to put up some 40 per cent of the funding. We want Ontario’s aid package debated in this House before the deal is signed, as has been done in the US Congress. That is not asking too much. We think it is completely outrageous to have a fait accompli presented to us after it is signed. We are saying that, as they have done in the United States, that package must be debated here in this chamber. We are most insistent upon this.

Chrysler has a bad record of taking public money and not providing jobs. We must not repeat the British fiasco in Ontario. We have reason to question the business sense of this government because of the totally inadequate guarantees contained in the agreement with Ford. We discovered that jobs were not even mentioned. We found that production at only half the capacity of the plant was guaranteed, and no production is guaranteed after 1987. If those agreements had been debated here, they would have been inserted, because the opposition would have insisted on it.

The New Democratic Party expects that negotiations with Chrysler are taking place against the background of its poor performance under the auto pact. The people of Ontario are not willing to watch their government bale out the seventh largest corporation in Canada without strict guarantees that the company be maintained as a viable operation far into the future.

As a first step, we have urged the two levels of government to ensure the wellbeing of the Chrysler workers by establishing a proper temporary assistance program during the transition period necessary for establishing a viable and reorganized Chrysler Canada. We say the workers deserve an equal portion of any aid given. We have said that financial assistance should be a combination of loans and equity in Chrysler’s plants, subject to the following:

1. that reorganization of Chrysler be undertaken, with Chrysler Canada being set up as an independent corporate entity with an arm’s-length relationship to its parent; and

2. that development by Chrysler Canada of an automobile that is competitive in the small-car market be undertaken, with guarantees that research and development be done in Canada;

3. that parts, including engines, be manufactured in Canada; and

4. that it has the freedom to seek the United States and world markets.

In the event that Chrysler in the United States goes under, we would want to consider the new set of circumstances, of course. In preparation for this possibility, the net worth of Chrysler Canada and an inventory of its facilities and technological capabilities should be established now.

Shoring up the auto pact and extending duty remission schemes to foreign car makers will not, however, remove the gnawing fact that Canada on its own does not have the technological expertise required to build an all-Canadian automobile. Many Ontarians are beginning to think about this possibility. They are wondering why Canadians can design, build, and sell a sophisticated aircraft, yet have never pursued the viability of producing an all-Canadian car. It is time this government put some technical and financial experts to work on exploring these possibilities. The possibilities would include bargaining for auto technology when awarding major contracts to foreign producers. The most recent case when such an opportunity was thrown away was when the $3-billion contract was awarded for fighter aircraft.

It would also include actively seeking joint ventures with competent foreign manufacturers for the development of modified vehicles for use in Canada’s resource industries and suitable for its cold climate.

Many people have suggested the idea of producing a safety car modelled on the one mothballed by Chrysler. I want to remind the Treasurer that in its brief to the Bladen commission on the automotive industry 20 years ago, the CCF government of Saskatchewan recommended that Bladen give consideration to the production of a Canadian automobile “that would be more utilitarian, less subject to model changes, easier to repair, and less expensive than the recent American models.”

Finally, I want to impress upon the Treasurer the fact that the current crisis in the auto industry may last for another one or two years. Layoffs have already reached crisis proportions and will continue to occur. In the US, tens of thousands of auto workers are receiving compensation for layoffs due to imports. Because of the special problems facing auto workers, largely resulting from the weaknesses of the auto pact, we will continue to support the United Auto Workers in calling for some form of temporary assistance benefits. It is terribly important that not only the auto pact -- the whole problem of the auto industry -- be turned around, but also that the auto workers be given some assistance in the meantime.

I want to spend some time talking about the provision of social services as mentioned in this budget. In his budget, the Treasurer promised a 14 per cent increase to day-care programs. The increase is welcome, but the Treasurer should understand that the need is much greater. The New Democrats believe that the provision of affordable, quality child care for all who require it is absolutely essential to achieve the goal of full and equal participation of women in the economy.

4:40 p.m.

In 1979, there were 54,437 day-care spaces in Ontario. Of this number, only 22,378 were subsidized. In 1977, the Social Planning Council of Metropolitan Toronto estimated that 114,000 children needed day care in Toronto alone. Given that there are no comparable studies on day-care needs for the province as a whole, one can only dare to imagine the number of spaces needed all across Ontario. And 1979 was the third year in a row that the Minister of Community and Social Services (Mr. Norton) failed to spend his full day-care estimate allotment. In 1976-77, he returned $4.38 million in unspent daycare operating funds; in 1977-78, $3.99 million and in 1979, $1.5 million.

Such action is irresponsible, given the glaring need for significantly increased day care across this province. Lack of public financing directly affects access. Until the current system of subsidies to families is drastically overhauled, good day care will continue to be the preserve of the very poor who are subsidized and the relatively affluent who can afford fees. The larger group of low to middle-income working families will be excluded.

In November 1979, the Social Planning Council of Metropolitan Toronto published a study which pointed to 100,000 pre-school children in Metro who are in unsupervised, substitute child-care situations while their parents work. The council considers these children to be at risk. The risk factor may involve physical injury because of overcrowding, lack of training of those providing the care or the less dramatic but equally tragic risk to children’s developmental capacities by unstimulating, limiting environments.

Mr. Peterson: Like your speech.

Mr. Laughren: The member for London Centre may not like my speech, but there are some very positive suggestions in it by which, if the government would take them up and implement, we would have a better Ontario.

Any equitable day-care policy must have the concept of universal access embodied in it. This will be the only means by which the needs of all Ontario children will be met. The system most closely approximating a universally accessible day-care service is our system of public education. Day care administered through local school boards would give parents closer proximity to the democratic process through locally elected trustees.

A publicly funded day-care system is the only way by which day-care stall will ever achieve reasonable salaries and working conditions. The establishment of an equitable system assumes the elimination of a municipal funding involvement with its regressive property tax base. This would leave the responsibility for funding day care in the hands of the province with, one would hope, possible federal participation. But, given the federal Liberals’ commitment to women’s causes in this country, I doubt there would be much hope of getting much from them.

The Treasurer is still living in the days of his own childhood, when the proportion of women in the labour force was a fraction of what it is today. We in the NDP understand very well the competing demands on limited tax revenues, but we also understand twisted priorities when we see them. Perhaps the Social Planning Council of Metropolitan Toronto said it best in its paper of last fall, entitled 100,000 Children. The council said:

“High-quality child care is a basic necessity for healthy development and is therefore the right of each child. Since all parents are not able to provide this care, supervised care as a basic social and economic service must be made accessible and affordable to all parents who desire such a service for their children.”

One of the welcome announcements in the budget is the commitment to increase the health-care budget by 11.4 per cent, or $487 million. During this past year, Ontario New Democrats were engaged in a long, hard and sometimes frustrating battle to stop the erosion of universal access to health care. We launched a caucus health tour and visited 11 communities and made contact with 13 general hospitals, four district health councils, three community health clinics and more than 40 union locals and community groups.

During the fall we conducted a campaign around the crisis in health care, and we were impressed with and reinforced by the public concern over the deterioration in health services in Ontario. As a result of that campaign, we collected the most signatures ever on a petition presented to this Legislature. Almost 300,000 Ontario residents told this government that protecting our medicare system is absolutely essential.

Our struggle last year would have been easier, Mr. Speaker, I speak to you very frankly, and our victory speedier, if we had been joined in battle by the provincial Liberals. May I remind you, Mr. Speaker, that the Liberal leader refused even to sign our petition calling for an end to the erosion of health care in Ontario. He even refused to sign the petition.

The struggle to maintain our health-care system demanded hard work, thousands of volunteers and a commitment to a cause, and the Ontario Liberals are lacking in all three commodities. That is why they did not get involved. They thought there were no votes in preventing the erosion of health care, and they were wrong. Now they are feeling guilty about it. It is only because they know they were wrong.

Mr. T. P. Reid: Oh, baloney. You had a chance a week ago, and you’ll have another chance this Thursday night.

Mr. Deputy Speaker: Order.

Mr. Laughren: Mr. Speaker, as a party we are proud of our efforts last year and of the labour movement who worked with us. Medicare is more than a political issue with us. It began in this country under the CCF government of Tommy Douglas, and nothing rallies New Democrats to the cause as quickly as a threat to universal health care.

Mr. Peterson: Is that the Treasurer’s suit the member is wearing?

Mr. Laughren: This is a Socialist blue suit.

Last year, in response to the budget, when we talked about medicare -- we do not just talk about it when it seems convenient to do so -- I quoted my colleague from Parkdale (Mr. Dukszta). He said: “The fight for universal health care is a significant part of our party’s struggle to equalize the distribution of wealth and income in our society.” We believe that profoundly, and we are proud of both that belief and our efforts to defend it.

Mr. Peterson: Stand aside, the NDP are coming through.

Mr. Laughren: As a matter of fact, we are. There is no doubt in my mind whatsoever that as the people in Ontario increasingly understand the close relationship between the federal Liberals and their destructive policy, and the provincial Liberals, their kissing cousins, they will reject the Ontario Liberals out of hand. There is no doubt whatsoever that as the months go by we will certainly witness the decimation of the Ontario Liberal Party. The Ontario Liberals cannot forever defend the policies of the federal Liberals. They cannot continue to do it and have any credibility whatsoever. I said some time ago -- I was going to ask the Speaker if I really said that, I thought it sounded so well -- that we are coming through. I meant it then, I mean it now and I will mean it when we go to the people of Ontario.

Mr. T. P. Reid: You are driving backwards.

Mr. Laughren: Mr. Speaker, I wonder if the members would let me conclude my speech. Maybe that would quieten them down.

In conclusion, I say to the Treasurer that in bringing down this budget he could have done much better. He and his government have failed to grasp the nettle. No serious attempt has been made to take advantage of the industrial opportunities that exist for Ontario. We have the social infrastructure and natural resource base to build an exciting province, but it will not happen with a Tory Band-Aid or a Liberal wishing wand. Those are the alternatives for Ontario: an NDP alternative, a Tory Band-Aid or a Liberal wishing wand. Those are the alternatives for the people of Ontario.

Mr. Peterson: That’s clever rhetoric. Who wrote that line? Mickey Mouse?

Mr. Laughren: I wrote that line.

4:50 p.m.

An exciting, healthy Ontario will happen only if the government realizes that it is no longer possible to divorce government from economic planning and management.

We are prepared to make a number of commitments to the people of Ontario. We would encourage the farming and small business communities in Ontario. The New Democrats would manage our resources better in the public sector and create new wealth through further processing and by building mining and industrial machinery.

The New Democrats would rebuild and repatriate manufacturing in Ontario by concentrating on sectors vital to an industrial economy. We would build affordable housing and create jobs for the construction industry. We would emphasize alternative energy sources and high technology to create more jobs, save money and protect our non-renewable resources.

The New Democrats would rebuild the auto industry into a revitalized Canadian auto parts industry. We would obtain a fair share of the North American auto production or begin to build and develop our own auto technology.

The New Democrats would make a major commitment to universal day care so that equal opportunity becomes a reality, not just for women, but for children as well.

The New Democrats can do these things, and we will do them very soon.

Mr. Ramsay: Mr. Speaker, it is distressing to hear the remarks being made by the members opposite with respect to the excellent budget brought forward last week by my colleague the Treasurer of Ontario. It is part of the nature of the parliamentary process that we in government should be requested by the opposition to defend our propositions; that is well and good. However, it is distressing to feel that the members opposite are motivated primarily by what they perceive to be potential political advantage, rather than by the positive benefit to the people of Ontario that a responsible government is able to work towards.

In many ways it is important to emphasize that we are living in a real world, as the saying goes, and that the proposals contained in this year’s budget are geared to the responsible management of those things over which we, as a provincial government, have control.

The people of Ontario have no reason to feel any lack of confidence whatever in the Progressive Conservative government’s management of our economic affairs. The whole country has entered a new decade and a year of critical choices. Our economic progress and wellbeing require continuous steadfast, stable and capable leadership. Drifting about aimlessly and panicking are two options we must avoid at all costs.

While Canada as a whole saw marked economic improvement over the past decade or so, it is erroneous to say that the economy of our province has declined. Relative to some other provinces, possibly it has, but is this not a desirable element? To have every region and province in the country achieve maximum prosperity is in everyone’s best interest.

We have not declined in any absolute sense. While the historically unprecedented prosperity of the decades following the Second World War may no longer be the norm in the industrial economies, there is no reason to say that our economy is on the skids or that Ontario is in a period of serious decline. That is quite incorrect. Despite spill-over from the recession that appears to be under way in the United States, as well as the impact of high interest rates and international economic forces, Ontario continues to experience a relatively high degree of prosperity.

There are, in addition, many signs of strength on the horizon. Where I think the main strength of the budget lies is in its absolute recognition of those dynamic trends and tendencies and in its support of them. Let us consider one example: responses to the problem of interest rates. The opposition has been crying out for us to step in and interfere with free market forces and with circumstances that are in many ways beyond the control of any provincial government.

Even while this pleading has been going on, the rates have begun to come down. Had we moved instantly to put into place some mechanisms intended to provide stop-gap relief, such measures might very well have had the effect of reinforcing the very pressures that were causing rates to go up.

My colleague’s budget recognizes squarely that interest rates are a national problem, not a provincial problem. In fact, I believe it would be more accurate to say they are an international problem. His budget outlines three areas where the provincial government may be able to act. In the housing area, the Ontario government will be continuing to demand that some national initiatives be undertaken to reduce interest rates, particularly for those home owners participating in the federal Assisted Home Ownership Program. Following a meeting between my colleague the Minister of Housing (Mr. Bennett) and federal officials, some relief has been extended to AHOP participants.

Second, as the budget address indicated, in May the government will table in the Legislature a discussion paper on interest rates which will outline the options for action that we actually have in dealing with this pressing situation. I understand it is intended that this paper shall detail several national alternatives to provide short-term assistance for home owners, small business people and farmers, should the rates still be so high as to present difficulties.

In addition, I understand the paper will explain the roles of various parties, including borrowers, lenders and government. I look forward to that paper, as I am sure do all members of this House, because this is a very complicated area and one which I know is of pressing concern to many of our citizens.

Let us not forget that high interest rates, like everything else, it seems, are a two-sided coin. While they present undoubted hardship to some members of our society, they also represent an earned reward for those with capital to invest and move the wheels of our productive machinery. We must not lose sight of that, for those with savings to invest make a very important contribution to our wellbeing and they deserve to be rewarded for it.

As the Treasurer stated in some remarks he made a couple of months ago, “There is an onus upon all public lenders to explain the facts and to behave responsibly when it comes to establishing the climate of investment opinion.” I agree with my colleague in taking strong exceptions to attempts made by some members opposite to tarnish the image of our economy. Fiscal, economic and monetary matters are not the easiest area to understand. Thus, it is doubly important for all of us to exercise great discretion when we discuss these matters should we not wish to have a negative impact, directly or indirectly, on the actual turn of events.

Mining is one industry that is of particular interest to me as it is an economic mainstay of the area of the province I hail from. Therefore, I was particularly pleased at some of the provisions in this year’s budget which promise to be of tremendous assistance to the mining industry. It is a very important one to Ontario and the source of much of our wealth. The mining industry has traditionally received special attention from the Ontario government as it is a major source of employment and provides a large chunk of our provincial exports.

The Ontario Mineral Exploration Program announced last week in the budget offers new incentives to encourage mining incentives. It will provide part of the risk capital to the prospector and those corporations actively involved in mineral exploration. It also will encourage individual investors and independent companies not currently active in mining to become involved in financing mining exploration.

These measures will be most welcome in Ontario’s mining community. I am sure that such measures hold great potential to stimulate growth and development in this important industrial sector. These measures also typify the responsible approach to the management of our economy that people have come to expect from this government.

Under the Ontario Mineral Exploration Program, individuals who invest in a joint venture involved in mining exploration in Ontario will be eligible for a grant equal to 25 per cent of their investment. This is in addition to existing personal income tax incentives.

5 p.m.

I think we can take tremendous pride in this year’s budget. Its positive proposals stem directly from the responsible and dedicated efforts of every citizen in this province. Ontario’s outstanding quality of life and sound financial position are the outgrowth of the collective contribution to the Ontario economy of all Ontarians.

Just as each of us must act in a responsible manner when it comes to managing our affairs, so too has the government of Ontario been committed to carrying out a mandate of prudent management of this province’s fiscal resources. As a result, Ontarians will see no tax increases in 1980-81.

To those who would downplay the hard-earned progress we have made in Ontario over the past few years, I would point out some salient facts about this province’s economic performance. Not unlike other jurisdictions, Ontario faced major adjustments during the 1970s, in large part because of spiralling trends in oil pricing. Despite a decade of inflationary and recessionary pressures, we outperformed West Germany, the United States and the combined countries of the Organization for Economic Cooperation and Development in terms of real output growth.

As the budget points out, during the past decade Ontario’s labour force grew three to four times faster than those of West Germany and Japan, not to mention the fact that the past 10 years have seen the creation of more than one million new jobs in this province. Furthermore, we have moved effectively towards curbing disproportionate growth of employment in the public sector. The record shows that over the past two years we have created 294,000 net new private-sector jobs.

As outlined in the budget, Ontario is clearly committed to laying a secure foundation for industrial expansion in the 1980s. Created last year, the Employment Development Fund now serves as Ontario’s foremost vehicle for investment and job creation. Sectors critical to our economy, such as the pulp and paper, automobile, textile, clothing and knitting industries, have received necessary assistance from the EDF to improve their competitive position. An important spinoff is job security for the thousands of people who work in these industries.

In view of its success, the EDF program will continue to operate in the coming year. It will allow for initiatives to finance urban transportation development and expansion of our ambitious manpower training program. An amount of $5.3 million has already been added to the $200 million federal-provincial manpower training program currently in operation.

Significant tax measures have been introduced to help stimulate small business, research and development, farming and energy conservation. As well, increased funding has been allocated to the Ontario Youth Employment Program, to provide for an additional 10,000 summer jobs out of a total anticipated 75,000 jobs for youth in 1980-81. As well, employers who hire young individuals under the Ontario Youth Employment Program will receive a direct wage subsidy of $1.25 per hour.

Health expenditures will increase by 11.4 per cent this year, or $487 million more than last year. This is certainly proof that in Ontario health care remains a non-negotiable item.

I am particularly pleased that the budget for the day-care program operated by the Ministry of Community and Social Services will be increased by 14 per cent in order to help working mothers.

Perhaps more than any others, pensioners feel the pinch of inflationary pressure. For this reason, the government of Ontario is extending relief from property and sales tax through a direct rebate. Grants of up to $500 will be directed to pensioners to offset their property taxes, while a sales tax grant of $50 will be paid to pensioners receiving the old age security pension. There will also be a substantial increase in guaranteed annual income supplement assistance.

The budget represents the desire of this government to deal with the problems of inflation and, in particular, to alleviate its effects on small businessmen and pensioners. As the Treasurer pointed out in his budget speech of last week, inflation may well worsen in the year ahead. Job creation will be slower, but real economic growth is expected.

Though interest rates have started to decline in the past few days, spelling some temporary relief for the bond market, market analysts project further increases in the long term, as the federal government will continue in its attempt to protect the value of the Canadian dollar by matching interest rate increases south of the border. In this context, the demand for goods and services would have declined drastically in the face of higher interest rates had this government not acted in a sound fiscal manner by following a policy of no tax increases. Unlike the federal government’s excise tax increases as a response to our economic situation, this government hopes to stimulate consumer demand or at least to maintain existing levels of demand in the hope that this will encourage expansion of small business concerns throughout the province.

It would be fiscally naive to provide business tax incentives on the supply side without matching such efforts on the demand side. This we have done by not increasing taxes in the coming year and by providing sales tax relief and property tax or rent relief to pensioners. This government takes its fiscal responsibility seriously and recognizes the combined effects of fiscal policy.

Accordingly, our budget assists low-income pensioners by increasing guaranteed annual income supplement payments by $10 per month. It provides more job opportunities for the young and provides a needed expansion of our health-care system. It opens up a new source of capital for Ontario Hydro and provides new incentives for energy conservation. All of this is done while holding down the provincial deficit.

Ontario has a great future ahead of it -- a future shaped by this government and a future assured by this budget.

Mr. McKessock: Mr. Speaker, I want to take a few minutes to elaborate a little on what I mentioned in question period and to bring a specific case before the House pertaining to the so-called pensioners’ benefits in the budget.

Each year I fill out my mother-in-law’s income tax form. I happen to have a good relationship with my mother-in-law. I had just finished filling out her income tax form when this budget came in; so it was very fresh in my mind. What she will be getting back this year is a $337.90 tax credit. That involves 20 per cent of her rent. This year she is paying $70 a month in the small town of Chesley, where rents are not as high as they are in some parts of Ontario. There are a lot of small places in Ontario like this where pensioners moved into buildings some years back.

My mother-in-law moved into a house in Chesley after my father-in-law died, and the rent has not been increased on her over the years to any great extent. She pays $70 a month, which works out to $840 a year. Twenty per cent of that is $168. To that is added the 10 per cent occupancy cost, which adds another $16.80. That gives a total occupancy cost of $184.80. To that is added the sales tax credit, which comes to one per cent of her total exemptions, which is $43.10. Then, of course, there is the pensioner tax credit of $110 for those over 65 years of age. The total of those three items adds up to $337.90.

5:10 p.m.

Now look at the budget and the new proposal for this year. Here one gets 20 per cent of one’s rent, up to $500. So 20 per cent of my mother-in-law’s rent for the year comes to $168. Add to that the $50 grant from the sales tax, and that gives $218. If we subtract that from the $337 she is getting this year, she will get $119 less money next year than she receives this year. That is as far as the property tax is concerned. One could say there is more in this budget in that it gives an extra $10 a month on Gains. That is true. Add on that extra $10 a month and she just about breaks even. She will still be a few dollars under, but it will be close to the same thing.

This program is going to cost the government a lot of dollars because it is going to have to pay this now to pensioners who are millionaires. They will get their $500 cheques, whereas my mother-in-law will get a cheque for $218. That will be less than she gets this year.

It would be better if this new program did not come in at all. It would save the government money, because it would not have to pay it to all the people who do not need it. My mother-in-law would get more money and so would a lot of others throughout Ontario. The government would not have to send those cheques out every year, which is going to cost an enormous amount in administration. Right now it is very simply done on the income tax form.

It was amazing to me how the Treasurer (Mr. F. S. Miller) seemed to make reference to how it would be much easier now as they would not have to fill out their income tax forms. We know how pensioners and older people hate filling out forms, but they are going to be filling out the form most likely anyway; so it might as well be done on that form. Now they are going to have to fill out another form to qualify for the property tax credit. It has already been said they are going to be sent a form in the fall. They have to prove their taxes have been paid before they will get it. They are going to be very confused about filling out another form.

I can see what is behind it. The government thinks it has gone too long on the income tax form and too many people now are unaware the tax credit comes from the provincial government. They feel if they pull it off the income tax form and send them a cheque it is going to be visible that it is coming from Ontario. That is a very poetical way of looking at it and a very costly way. It would be much cheaper to leave the old program in place, and it would be of greater benefit to those who really need it than the new program.

If it costs the government any more in the new program, it will only be because it is paying it to those who have never had it before. When they take a look at the program and say it is going to cost another $34 million, it means it is going to go to people who really do not need it and to those who have not been getting it before.

Mr. Eaton: A lot of those people are home owners who are trying to pay taxes on the same amount of money your mother-in-law is getting.

Mr. McKessock: The same people the honourable member is talking about could get it under the old plan.

Mr. Eaton: But not as much.

Mr. McKessock: All I am saying is there are some who will get less and it is going to cost the government more money, which is going to put us further into debt.

Mr. Watson: Next year you won’t have to file that income tax form for your mother-in-law.

Mr. McKessock: Yes, I will have to fill out her tax form for her, because she has $900 in interest.

Mr. Watson: On the first $1,000 you don’t have to file it.

Mr. McKessock: Another thing that really disturbs me every year when the budget comes out is how the Treasurer can stand up and mince words or put it in a way so it sounds as if they are reducing the deficit. When you first hear it, you think the deficit is going to be reduced. He makes a statement like the one on the first page: “It is with some pride as Treasurer that I can inform the members of our achievement of a reduction in the deficit of $494 million below the original target for the fiscal year just ended.” It reduces the deficit from how much he thought he was going to be in debt.

We still have a deficit but, instead of it being close to $1 billion, it ended up being more than $600 million. The debt this year will add another $300 million or more to the debt we had last year, which puts us into the position of being just about $1 billion in debt. There is some argument going on about whether it is $1 billion or a little more than $1 billion, but we know it’s around $1 billion the budget this year puts us in debt.

When the Treasurer says there is no increase in taxes this year, one reason is that we are $300 million further in debt, or he has made a $300 million bigger deficit this year than he did last year. If he does that, of course, he does not have to increase taxes. He can give out a few little goodies without increasing taxes if he puts the province further in debt.

I hope the public is aware of this. I do not like the way it comes across. I would rather the Treasurer stood up and said, “I’m sorry that I couldn’t balance the budget again this year,” because that is the point. We have not balanced it for how many years? It has been 10 or 12 years since the budget in Ontario was balanced. I think a balanced budget would be a great thing, as would be the day he could stand up and not mince words by saying: “I reduced the deficit by $494 million.”

If we are going to distribute the wealth in this province and put it where it should be, maybe we will have to increase the taxes to give the farmers what they deserve. That brings up a good point I want to mention. We were certainly looking to this budget to give something to the farmers as being the place where the money was coming from. I was not going to take any excuses that it should be coming from the federal government and that we should wait for it, or whatever.

An industry like the food industry, which gives us 40 per cent of the jobs in this country, should get a little more reward than it gets from the Ontario government. Is it one per cent of the provincial budget that is given to agriculture? That is shameful. The food industry creates 40 per cent of our jobs and gets one per cent of the provincial budget.

If the Treasurer has to raise taxes to get a bit of money for an industry that does that much for the province, then all well and good, but I still believe he should be balancing the budget. Of course, that would mean either raising taxes or cutting out some useless programs.

5:20 p.m.

There is one program that we could dispense with and that is the Minaki Lodge project. At least $25 million has been put into that useless cottage up north which would have brought the farmers through this distressed period. To think that another $12 million is going to go into that lodge before anybody gets a chance to sleep there! The government could not find anybody in Canada to run the place. They had to go to the United States to get a manager for it. It seems every time the budget comes down, there are another few million going into Minaki Lodge. It does not deserve that amount of money or that type of thought. I do not know why they do not just write it off as a bad debt and sell it to somebody. I guess it is pretty hard even to give it away. That seems to be the problem.

I hope the Treasurer and the Minister of Agriculture and Food (Mr. Henderson) are working hard on an announcement to help the farmers in Ontario that they did not make in the budget, an announcement that should give the farmers the same competitive opportunities that farmers in other provinces are getting. Other provinces did not wait for the federal government to help their farmers. They took the initiative themselves. They realized the advantage of agriculture to the province and they stepped in and assisted the farmers on interest rates and allowed them to keep their share of agricultural production in their own province.

Ontario has been gradually losing its share of Canadian production over the last 10 years in the staples of swine, beef and dairy products. Gradually Ontario’s percentage has been dropping, while the other provinces have been holding their own or increasing their share of Canadian production. If we are going to even hold our own, we are going to have to give agriculture a lot more thought than we have in the past.

Mr. Wildman: That’s the problem. The minister has been giving it lots of thought.

Mr. McKessock: That’s right. We got from the budget that they were going to come out with a little more discussion of the problem before they made any announcement. I feel we have had enough thought and enough discussion; it is time we had a bit of action.

In Quebec, the farmers get the first $15,000 at 2.5 per cent interest and the next $185,000 at eight per cent interest. That seems to be a reasonable thing. If Ontario would like to come through with that, I think the farmers would be quite happy. I think we deserve as much as Quebec.

But that’s only Quebec. Take a look at Alberta and Saskatchewan and British Columbia. I listed them here the day the resolution was debated. They are all giving similar aid. In fact, they were not all listed on that day. If we want to get into what Quebec does for their farmers, there are about four pages of the initiatives they took to support their farmers.

Mr. Eaton: You ought to take a look at why they did that.

Mr. McKessock: I would like to. I know a French farmer who lives in my riding, and I would like to take him with me on a trip through Quebec, especially at this time with the referendum. It would be very educational for me. He is quite bilingual; I could ask the questions and he could get the answers from the Quebec people, and I think I could have a very enjoyable time.

But I am afraid of doing that, because I am afraid he might stay there. As a farmer, when he became familiar with all the programs they have in Quebec, he might be tempted to leave Ontario and go to Quebec.

I know of some farmers in Bruce county who have sold their farms and moved to Alberta because of the greater opportunity that is there. I feel sad about that. I feel Ontario is the best province in Canada. I hate to see it going downhill the way it has been doing over the last years, and not only in agriculture. When we talk about economics, industrial expansion and so forth, we do not seem to have any trouble coming in 10th.

The problem is that not only are we going to lose a lot of our farmers if we do not give them help now, but we are also going to lose that production to the provinces that are giving assistance. Right now, there are buyers going through Ontario buying beef cows for British Columbia and Quebec. They are picking up the production we are dropping. Nobody in Ontario wants to buy beef cows today with the interest he has to pay on them.

Mr. Eaton: What are the figures on the drop in production? Our production hasn’t dropped.

Mr. McKessock: Does the member for Middlesex want me to get him the figures? I have them in my office. They show the facts. Our percentage of the Canadian production is dropping and has dropped over the last 10 years.

Mr. Eaton: That is different to the drop in production.

Mr. McKessock: Not in production, but in our percentage of the Canadian share.

Mr. Eaton: Then make it clear.

Mr. McKessock: I have made it clear. Why should we not keep our percentage up? Why should we have a drop in our share of production? It is because we have not given agriculture the assistance and thought it should be given in this province. Ours is the best province in Canada, and we would like it to stay that way, but it can not float on its own without giving it the assistance that is needed.

Mr. Eaton: We were ahead of other provinces and they decided to catch up.

Mr. McKessock: Yes, at one time we were ahead. It is too bad we had to slip back.

I came on here very suddenly, and there are other things in the budget. Maybe there aren’t. There is not too much in the budget worth mentioning. I was going to say that maybe there is, but really there is not too much. There were two things of concern to me. One was that there was no help for the farmers. That was very disappointing to me. The other thing was that it appeared as if there was help for the pensioners, but when we get into it we find out there really is not.

I appreciated the chance to say these few words on the budget. We will just have to hope for better things next year.

Mr. Cooke: Mr. Speaker, I would like to begin by noting that yesterday, when we received the Liberal response to the budget, it was raining outside and very dismal weather. Yet today when our critic began his speech we had similar weather, but by the time he finished the light had appeared on Ontario and it was sunny outside. The clouds returned when we got a Tory speech and another Liberal speech.

I would like to spend a few minutes talking about the budget. In particular, I would like to mention that one of the areas of great concern to the people in my riding is the health-care problems we have been experiencing over the last couple of years. I am very pleased to see that in this budget there is an 11.4 increase in health-care spending. I think there is no doubt at all that the party that can take credit for that health-care increase is the New Democratic Party, which led the fight by bringing specific cases in front of this Legislature.

Mr. Eaton: You would take credit for anything.

Mr. Cooke: Doesn’t the member for Middlesex have some constituency work to do down in his office?

The 11.4 per cent increase was a result of specific cases that were raised in this Legislature by each and every member of this caucus. We talked about the backup in hospitals and the use of hallways and emergency rooms for people who did not have beds to go into because of the budget cutbacks. As a result, the government took a poll and found out that what we were talking about was getting through to the voters of this province, and it had no choice but to respond.

I am glad we fought that battle alone. We introduced no-confidence motions to try to force the government to bring in the extra increase for hospitals. We did not get the support of the Liberal Party last year at all. We did not even get questions from the Liberal Party. They were basically supplementary questions to our questions. I think the New Democratic Party can take a great deal of pride in that part of the budget, which is something we are responsible for.

Mr. T. P. Reid: You’ve got to look for something, because there is no pride left in you now since you started to support the government.

Mr. Cooke: I don’t know what that says about the Liberals’ pride. What does that say about their pride in the last three years of support they have given the Tory Party?

Interjections.

Mr. Acting Speaker: Order. The member for Windsor-Riverside has the floor. Will he proceed and try to ignore the interjections.

5:30 p.m.

Mr. Cooke: Mr. Speaker, if the member from the Liberal Party who talks about our pride is saying we have lost our pride, I do not know what that says about the Liberals’ pride. They have always supported the Tories.

I want to spend the majority of my time, Mr. Speaker, talking about the auto industry, and in particular the auto pact, something this budget and the throne speech did not address in a way I would like to have seen.

The state of the auto industry in Ontario is critical and crucial to our industrial future, because it is the hub of our manufacturing industry in Ontario. That is not the case in the United States, where when there are major layoffs and a downturn in the auto industry, they have other major industries to turn to, such as the chemical and electricity industries, and a large military production.

In Canada, as I have said, we rely almost totally in the manufacturing industry in the production of automobiles. In 1976, 75 per cent of Ontario exports of manufactured goods came from the automobile industry and the auto parts industry. Auto assembly and auto parts assembly employ 10 per cent of all Ontario manufacturing workers. One in six is employed directly in auto-related activities.

Auto assembly and auto parts industries account for one ninth of the gross provincial product. Cities like Talbotville, Windsor, Oakville and Oshawa are virtually company towns because they are primarily auto towns. One-industry towns, of course, either prosper or fall when their particular industry is on either an upswing or a downswing.

There are many other regions that rely very heavily on the auto industry. They include Durham county, outside of Oshawa itself, which has 1,057 auto workers; Owen Sound, which has 845; Simcoe, which has 560; Toronto, which has nearly 5,000; Waterloo, which has 4,076; and the Niagara region, which has 8,607. These statistics show very clearly that the problem in the auto industry must be of concern not only to members of the Legislature who represent auto cities, but also to members of the Legislature from all regions of the province.

Ontario is very vulnerable to a downturn in auto sales. Layoffs are said not to be as dramatic in Ontario as they are in the United States. However, because our dependency on the auto industry is so great and we do not have the diversification in other manufacturing industries as they do in the United States, when there is a downturn it is felt very drastically in this province.

I realize that the auto pact is a federal responsibility, a responsibility that has been neglected by the federal Liberal government for 12 years under Mr. Trudeau’s leadership. Now we have returned to his leadership, and while there is a lot of talk from the Minister of Industry, Trade and Commerce again, I am waiting to see the result of this talk. To date, it has been all talk. He made a promise that he was going to take Ford Motor Company to court to make sure that the jobs at the casting plant in Windsor were maintained. He made that statement which raised expectations in Windsor and he had no justification for making it.

One just has to look at the Ford agreement the Ontario government signed. One could go through it in five minutes and realize there were none of the safeguards that Mr. Gray was threatening to take Ford to court on. I think he took a very irresponsible approach on the Ford deal.

In this province right now there are 20,000 indefinite layoffs in the auto industry, and Ford and Chrysler have an unemployment rate ranging between 35 and 40 per cent. Ninety-five per cent of the auto jobs are in this province; therefore, it is appropriate that we have a full discussion of this industry in this Legislature. The Minister of Industry and Tourism, the Treasurer and the Premier all have a responsibility to make sure that industry is turned around and developed in a way that will create jobs for the people of Ontario.

In the throne speech there was only one paragraph that dealt with the auto industry. I want to quote it: “The Minister of Industry and Tourism will develop approaches to assure the long-term health of the automobile industry in relation to the Canada-US auto pact, the shift to lighter, fuel-efficient vehicles and import competition.”

That statement was made in the throne speech. We have now been in the Legislature for a number of weeks and we have heard nothing at all as to what approach the government plans to take. This is in 1980. The government did realize there was a problem back in 1978. In an open letter the Premier sent to Mr. Trudeau, the Prime Minister at the time, he stated the following:

“I am concerned at the slow progress you and we seem to be making with the major automobile companies in gaining a fair share of jobs and investment in Canada. It appears that Canadians are being asked to provide subsidies and special financial assistance for this industry. I would suggest that the point has to be made that we expect a fair deal, not an auction-block deal in which the highest bidder wins. I am most concerned when the spirit of the auto pact is being eroded by the use of unfair cost comparisons with fire-sale tax deals and capital grants offered by many states in the US.

“My view is quite clear on this matter. This is a Canadian market. The federal government made a pact with the companies and the US government. The companies have received millions of dollars in rebates on import duties as part of the arrangement and we expect that, in return for their dominant share of sales in our market, we have a fair share of the investment and jobs in the North American industry.”

We in this party have absolutely no disagreement at all with that statement by the Premier. Not too long after that, this government and the federal government got involved with a deal with the Ford Motor Company. They gave out $28 million of the money of every taxpayer in this province, including my money, to the Ford Motor Company after the Premier was very critical of the auction-block approach he referred to.

The concerns in 1978 were appropriate but they were too late then. Now in the throne speech we see there is a paragraph that mentions it, and in the budget the auto industry, and in particular aid to Chrysler, has been all but ignored by this government.

We have had 13 years since the auto pact was signed, and the annual deficit grew to $3.1 billion in 1979. That represents $322 for every Ontarian or $32,000 for each auto worker. We are talking about significant amounts of dollars and a significant increase that could result in a better standard of living for this province if those jobs were located in our country. But that deficit was very much concentrated in the auto parts section, where the deficit was $4 billion. While we may think that is the total deficit in the auto industry, those figures do not include the exported profits to the Big Four that go south of the border as well as the export of research and development charges to the Big Four that also go south of the border. I will talk about that later in my presentation.

In the early 1900s we had a Canadian-owned automobile industry. In Oshawa there was the McLaughlin company, which was sold in 1918 to General Motors. With the tariff protection that grew, albeit with a branch-plant economy here in Ontario, the auto industry also grew in this country. But after the Second World War the industry grew more slowly. Then in the late 1950s and early 1960s there was a very serious slump, although not as serious as the one we now appear to be getting into.

The decision in the 1960s was either to integrate the Canadian and US markets or to produce a Canadian car to serve the Canadian market. The decision was to go for an integrated market. It left Canada with a branch-plant economy in the automobile industry. It was felt that the Canadian industry would benefit from a larger market and that Canadian cars would be lower-priced.

I would like to point out to members something I do not think many people realize: the price never did get lower in Canada. We always paid a higher price than they did in the US, and statistics show that the difference in price between the same car sold in the United States and the one sold in Canada has paid for every bit of investment the Big Four made in Canada.

5:40 p.m.

There has been no flow of money from the United States to Canada from the Big Four to increase production and to invest. They have not had to dip into any of the profits that would normally have been achieved if we had sold cars here in Canada at the same price as the United States. They have simply been able to take the differential in price between the Canadian car and the same car sold in the United States and apply that to investment. They have not had to spend another cent. I think that is a disgrace and speaks very loudly to the problems we have with the auto pact and with the branch-plant economy.

Looking at it now, I wonder whether it was a wise idea to integrate the market in the 1960s or whether at that time we should have made a decision to look at the industry and see whether a Canadian car would not have been the better approach in the long term for Canada and for Ontario.

It is surprising that Japan has seven auto companies that are profitable and Sweden has two auto companies. Canadians each year purchase 1.4 million cars and trucks at a value of more than $10 billion; so we are talking about a significant market.

In Japan, for example, Honda produces 745,000 cars a year, with $4 billion in sales, and it is a profitable company. In West Germany, the Benz company produces 560,000 cars and trucks per year and is a profitable company. In Sweden, Volvo produces 300,000 cars a year and is a profitable company. In Canada, our auto industry sells 1.4 million cars per year, valued at more than $10 billion; so the market is there for a Canadian automobile industry.

Mr. Rotenberg: The workers want too much money. That’s the problem.

Mr. Cooke: The member can blame it on the workers. I choose to look at the industry. I have studied it a lot more than he has. The problem is not with the workers. The problem is bad planning on the part of the companies and the governments of this country.

Mr. Eaton: How many cars are produced here?

Mr. Cooke: I will get into the production and the investment we have got over the years, which I think will answer that question eventually.

The Canadian market in 1965 was 6.8 per cent of the North American market; in 1972, it was 6.7 per cent; in 1973, it rose to 7.5 per cent; in 1974, it went to 9.8 per cent; in 1975, it was 11 per cent; in 1976, it was nine per cent; in 1977, it was 8.4 per cent; and in 1978 and 1979, it was approximately nine per cent of the North American market.

I want to compare those figures with the investment figures we have got from the Big Three in North America. In 1972, while we had 6.7 per cent of sales, we got only 4.3 per cent of investment; in 1973 we had 7.5 per cent of sales, but we only got 5.8 per cent of investment; in 1974, 9.8 per cent of sales but only 7.4 per cent of investment; in 1975, incredibly enough, we got 11 per cent of sales but only 6.8 per cent of the investment. The latest figures are for 1979, when we had approximately nine per cent of the sales but only 7.3 per cent of the investment.

From 1965 to 1970, the average investment was only 7.4 per cent; from 1970 to 1976, the average was 5.4 per cent. in 1965 to 1976 altogether, for the entire life of the pact up until 1976, the average was only 6.4 per cent. Our sales figures as a percentage of the North American market are now running close to 10 per cent; so it is obvious we have not got our fair share of investment.

On the employment side, in 1970 we had 8.3 per cent of the total North American jobs in the auto industry. In 1978, even though there had been a dramatic increase in sales and a percentage of the market here in Canada, we still had only 8.6 per cent. It has gone up 0.3 per cent of the North American market. Our percentage of the market has grown dramatically, but our percentage of the jobs has not grown dramatically at all. In fact, it has stayed pretty stable.

In Canada, 50 per cent of our workers are involved in parts and 50 per cent in assembly. In the United States, 65 per cent of their workers are involved in parts and 35 per cent in assembly. There has to be a redistribution of parts production in North America. We should be getting more of our parts production.

Parts production requires more skilled labour, higher-paying jobs and more research and development. Those are all areas in which we have not been doing very well. In fact, in the total automobile industry of Canada, 65.3 per cent of its workers are nonskilled, 28.5 per cent are semi-skilled and only six per cent are skilled workers, whereas, in the United States, only 44.5 per cent of their workers are nonskilled, 46.7 per cent are semi-skilled and 8.8 per cent are skilled workers.

In other words, we are not getting our fair share of skilled workers, and, therefore, we are not getting the higher-paid jobs associated with that. On this page I wrote down some other statistics that were not included originally. I just got them today and found them very interesting.

In 1979, Canada’s production of small and compact cars fell, incredibly enough, by 26 per cent. That is obviously where the demand is. In the United States, production of small compact cars rose by 40 per cent. No one can say that we are getting our fair share of investment, jobs, research and development or skilled workers. These kind of statistics have not been dug up by the New Democratic Party. They are statistics verified by this government, some of them out of a government document, verified by the United Auto Workers and by the federal government.

Research and development in the automobile industry is concentrated overwhelmingly in the United States. The importance of this automotive research and development to the American economy is described in the Arthur report. The report says:

“An important consequence of this concentration of development effort is that the United States has experienced most of the indirect benefits that flow from this form of activity. Opportunities for industrial research and development projects in the motor vehicle industry will grow as the level of government involvement increases and cost factors escalate.

“This will stimulate the concentration of research and development activity not only in the motor vehicle industry but in other manufacturing sectors as well, which will more pointedly identify technology as the main vehicle of economic progress in the future, although it is not all that clear that there is a direct relationship between research and development expenditures in a country and the level of economic growth.

“It is generally accepted, however, that industrial research and development and the consequence of this activity do affect the way in which a country develops in the long run.”

Here are the statistics on research and development in the auto industry. Research and development in the United States has averaged 2.3 to three per cent of net sales in the United States, or $2 billion per year. In Canada this would mean $230 million a year of research and development.

The Arthur report states that approximately $230 million a year is transferred by the Big Four to the United States for research and development. Research and development has not come to Canada because we have a branch-plant economy and because we have a government that has not bothered to put pressure on the Big Four to get some of that research and development here. With strong pressures on the companies and perhaps letters of commitment and, in the end, changes in the auto pact, we could expect our fair share of research and development in Canada.

5:50 p.m.

Continued reliance on an industry which gives us assembly jobs and little opportunity for skilled workers and research and development, means we will not progress as the industry progresses.

Mr. Conway: The member is too close to being a new Disraeli to have to read his speech. I want to hear those from-the-heart flourishes.

Mr. Cooke: After being in here for three years and hearing the types of things the Liberals present and the answers we get from the government, it is hard to speak from the heart any longer. I can do that back in Windsor where I talk to people who understand.

Mr. Conway: Standing orders notwithstanding.

Mr. Cooke: The implications for lack of research and development in this country are clear. In my portfolio as colleges and universities critic, I see that many of our graduates have to go south of the border. Now they are travelling to some of our western provinces, such as Alberta and Saskatchewan, which are getting more research and development and are producing the types of jobs we should have here in Ontario.

We can talk about the problems with the auto pact all we want, but we also have to talk about some solutions. Canada obviously entered the auto pact to gain the benefits of a North American market and to gain the jobs we expected would come with getting entry into the American market. The United States and the companies entered the agreement to gain permanent duty-free access to the Canadian market, which is a healthy, profitable market, as I have already stated.

I have pointed out many times that Canada has one of the most lucrative automobile markets in the world. I believe it is third or fourth. However, in the auto pact there are two very important clauses which seem to be contradictory and which must be ironed out.

Article 1(b) reads: “The liberalization of the US and Canadian automotive trade in respect of the tariff barriers and other factors tending to impede it, with a view to enabling the industries of both countries to participate” -- and this is the important part -- “on a fair and equitable basis in the expanding total market of the two countries.” That clause clearly indicates what should be happening; that is, as the Canadian market takes up a larger percentage of the North American market we should be getting the jobs that develop from that.

Article 1(c) is the clause that causes problems: The development of conditions in which market forces may operate effectively to attain the most economic pattern of production and trade. Of course, what that means is that the auto companies have it within their power to locate their new plants wherever they feel it is most beneficial to them. We see a lot of companies now locating down south trying to avoid unions and trying to pay lower wages. Therefore, Ontario is losing out on jobs it should be guaranteed under the auto pact.

There is no doubt in my mind, and I do not think there is any doubt in anybody’s mind here in this Legislature who understands the auto pact, that it was the intention of the Canadian government to make sure article 1(b) was the operative clause. That was the clause that indicated we were to share equitably any new markets and expansion of markets, therefore getting our fair share of jobs. To me, a fair share of investment and jobs means not just a fair share of assembly jobs, but also a fair share of jobs in the auto parts sector, a fair share of jobs in research and development, and a fair share of our skilled, semi-skilled and nonskilled jobs. As I have said, research and development is one of the most important parts if we are going to expand and progress in the automobile industry.

However, this has not happened because article 1(c) basically states that the companies can place their plants wherever they want. The two articles are not complementary, and they must be rationalized or clarified in some way.

If we were to get our fair share under the assumption our federal government was involved in, and probably our provincial government, we would have between 20,000 and 80,000 more jobs in the automobile industry. If the same pattern continued, the vast majority of those jobs, something in the neighbourhood of 25,000 to 28,000, would be located here in Ontario.

Where do we go from here? I think we have a perfect opportunity with one of the corporations that is now bargaining with our federal government for aid, namely, Chrysler Corporation. They need assistance from our federal government, and they are going to need part of that assistance from this provincial government. This will be, as I understand it, the largest investment from this government in the manufacturing sector in its history. Chrysler Corporation needs our help, and I think we have to put conditions on that corporation which will guarantee long-term jobs and our fair share in all sectors of the automobile industry.

If the report that was in the Globe and Mail today is accurate, the federal package is primarily looking at the van plant. It will be for retooling that plant only for what they are going to call van-wagons, which is a cross between a station wagon and a van. It will be the first van ever to fit into a home garage. If that is the only area the federal government is negotiating with Chrysler, and that is the only plant that is going to be retooled, then I say with no hesitation at all that we would be opposed to that package. The package has to look at all the plants in Windsor, which includes the spring plant, the engine plant, the car plant, and the van plant. They all have to be retooled to meet the new down-sized market.

The House recessed at 5:57 p.m.