Legislative Assembly of Ontario

The House resumed at 8 p.m.

SUPPLEMENTARY MEASURES

Mr. Speaker: We will allow a brief period of time for the pages to distribute the statement to be made by the Treasurer.

Pursuant to an order and the motion passed earlier, we will now revert to statements.

Hon. F. S. Miller: Mr. Speaker, in my budget message in April, I said 1980 could well turn out to be a difficult year for the Ontario economy. I pointed out that our economic prospects are heavily influenced by federal policy and the performance of the United States economy. Slowing demand in the US and Ottawa’s high interest rate policy threatened to undermine our economic stability.

The fiscal strategy for 1980-81 I adopted at that time called for a modest increase in the province’s deficit and, consequently, a pause in our long-term deficit reduction plan. In the light of the economic situation, I did not wish the budget to be a drag on the economy and therefore I did not impose any increases in taxes.

But neither did I want to break with our policy of reducing the size of government to lessen inflationary pressures in the economy and free up resources for productive private sector investment. By maintaining a competitive and stable profit and taxation environment, we ensure these resources are put to use. This fiscal policy has been the cornerstone of our economic strategy for a number of years.

In my budget I introduced a number of selective measures to stimulate job creation and investment and I have since supplemented these actions. For example, in May the government provided a substantial interest relief program for farmers. My budget also provided new grants for pensioners that increase their purchasing power this year by almost $300 million.

I have continued to monitor closely developments in the economy. Prior to the federal budget, the short-term economic outlook had already deteriorated. That budget has, in fact, further worsened the outlook for Ontario. Therefore, I will be announcing tonight specific measures to stimulate immediately the provincial economy and improve Ontario’s longer-term economic prospects.

On October 28, 1980, the federal government turned back the economic clock in the industrialized provinces of Canada. Mr. MacEachen’s “energy budget” was seriously lacking in economic leadership and it completely ignored the dualistic nature of Canada’s regional economies.

Interjections.

Hon. F. S. Miller: If I ever go back to schoolteaching I do not know what I am going to do; I am so used to the classroom talking.

At the present time, Canada has neither an agreed-upon energy pricing and supply package nor an economic strategy to take advantage of our opportunities. This situation can only further undermine the confidence of investors and could cost us dearly in the longer run in lost economic productivity and potential.

Unlike some in this Legislature, I was surprised and disappointed by Mr. MacEachen’s budget. It is profoundly unbalanced in its priorities. It does set out a four-year deficit reduction plan, but it is far from clear that the fat will be cut from the federal bureaucracy. Its economic forecast implies sluggish economic performance for Canada’s industrial heartland, but no measures are introduced to improve the outlook. It reinforces inflationary pressures, yet relies on a tired and outdated monetary policy that simply cannot come to grips with inflation. Above all, it does absolutely nothing to create jobs in the months ahead. In fact, it threatens existing jobs in this province. That is simply not good enough.

Ontario has always advocated strong federal leadership in economic matters. We will not, however, tolerate serious economic misdirection at the expense of the people of Ontario.

The most vital element of national economic leadership is the provision of long-term policy guidance and certainty. Unfortunately, the federal budget leaves many uncertainties. Even if the planned energy prices survive, they remain subject to unspecified future increases. The delays in megaprojects and threatened cutbacks in domestic oil supplies further add to uncertainty and aggravate our economic problems. Indexation of the personal income tax remains under the microscope. As well, the federal government intends to seek major savings in its commitments under existing fiscal arrangements in health, postsecondary education and community services.

8:10 p.m.

At this point, recent events force me to diverge from the printed text. Only yesterday the federal government officially announced its unilateral termination of the federal-provincial community services contribution program even though both levels of government are firmly committed to converting the existing program into a long-term arrangement. As a result of this action alone, Ontario will lose at least $86 million annually towards high-priority and fully planned water and sewage projects and other vital community services.

This thoughtless action clearly illustrates that we have a national government that tolerates high unemployment, stifling interest rates and a bloated federal bureaucracy while seeking savings at the expense of a clean environment and other social priorities. Its actions undermine our confidence in other cost-sharing commitments relating to health, post-secondary education, social services and social assistance.

We require a national economic plan. As part of this, the major energy projects must proceed and Ottawa must take firm action to shore up the sagging economy, create jobs and restore confidence. Let me repeat what I have stated on several occasions. The federal government has the fiscal capacity and the policy instruments to best undertake such action. It also has that responsibility. As a result of the clear abdication by Ottawa of its national economic leadership responsibility, we are faced with a justified call for economic leadership from elsewhere.

The government of Ontario is responding to this call with a $1-billion five-year economic recovery program which I am going to detail in a few minutes. Before so doing, I would first like to review the economic situation and outlook.

The federal budget threatens Ontario’s short-term economic prospects. According to Mr. MacEachen’s projections, Canada will experience a decline of one per cent in total output this year and an increase of only one per cent in 1981 before achieving substantially higher rates of growth in the 1982 to 1985 recovery period. While the federal outlook for 1981 is more pessimistic than many private-sector predictions, there is no doubt our economy will continue to operate well below potential. The federal budget certainly has increased the possibility of greater unemployment in Ontario in the months ahead.

There are certain aspects of the Ontario economy with which we can be very pleased -- strong sectors of the economy where employment levels are being sustained or are even increasing and upon which strength we can build. Among them are the nonresidential construction, services, manufacturing of machinery, paper and allied products, food and beverages, all of which show little excess capacity. Investment is increasing at a substantial pace across a wide range of sectors. Statistics Canada’s Mid-Year Private and Public Investment Survey indicates new manufacturing investment may be up by 44 per cent in Ontario this year.

However, some sectors, particularly consumer durables and those with high export content, are suffering because of the recession in the US and high interest rates. There have been significant layoffs in residential construction and in the motor vehicle assembly and parts industries. The major household appliance portion of the electrical products sector is performing much below capacity. Other important manufacturing industries showing high excess capacity are wood products, furniture and fixtures, and non-metallic minerals.

Notwithstanding weakness in some industries, Ontario’s recent job creation performance has been impressive. In 1979, 161,000 new jobs were created following the generation of 133,000 in 1978.

Mr. M. Davidson: How many were laid off?

Hon. F. S. Miller: Those are the nets, my friend.

Although slowing in recent months, new job creation still amounted to a significant 85,000 over the 12-month period ending September 30. While our average year-over-year new job creation exceeds over 100,000 new jobs commitment, we are neither satisfied nor complacent. The bottom line is that the labour force growth has outstripped job creation. The seasonally adjusted unemployment rate has increased from 6.2 per cent in September 1979 to 6.7 per cent in September this year. In fact, over the first nine months of 1980, the unemployment rate has averaged 7.0 per cent, and that is unacceptably high in terms of economic hardship and lost potential.

I believe effective action can and should be taken to bolster demand in the weaker sectors of the economy. Our options in Ontario are limited because reductions in income taxes are not a viable mechanism for achieving immediate relief in specific sectors. However, in the past, reductions in retail sales tax have proved to be most effective. I am therefore proposing tonight to cut the retail sales tax to provide direct stimulus in a number of areas vitally important to the wellbeing of our economy.

The Ontario automotive industry is responsible directly and indirectly for one job in every six jobs in this province. As the honourable members are aware, this North American industry must resolve major structural difficulties and come to grips with vigorous foreign competition before we can be certain of improved prospects. This government has urged the federal government to seek a better deal for Canada under the auto pact. We have also provided incentives for industry to locate here, expand investment and engage in research and development. A large-scale review of the industry’s prospects and problems is now under way to determine what more Ontario can do to secure the industry’s longer-term future. In the meantime, however, we intend to take action to stimulate the industry.

In current circumstances, measures to stimulate demand for passenger automobiles would not provide a significant enough boost to domestic employment to justify the expenditure.

Mr. Breithaupt: It didn’t last time either.

Hon. F. S. Miller: It was a different problem last time.

Many of the passenger cars purchased by Ontarians are produced in the US. Conversely, our production of passenger vehicles is predominantly exported to the US. As a result, only the recovery of demand in the US will generate substantial production and employment gains for Ontario producers of passenger cars.

This is not, however, the case with light trucks and vans. Sixty per cent of Canadian unit sales of these vehicles are domestically produced, the balance being produced in the US or offshore. All light trucks and vans produced in Canada are manufactured in Ontario. Consequently, stimulation of truck purchasers will result in a much smaller import leakage and, therefore, will have a stronger impact directly on vehicle production and indirectly on the many associated industries.

In Ontario, truck production over the first 10 months of this year was 24 per cent below last year’s levels, and sales were down almost 25 per cent from January to September compared with the same period last year. Consequently, to provide support to this sector, I am implementing a rebate of retail sales tax paid of up to $700 on new light trucks and vans not exceeding 4,100 kilograms, approximately 9,000 pounds, in gross vehicle weight. This incentive will be of particular benefit to small businesses and many persons living in more remote or rural parts of Ontario. It will commence at midnight tonight and remain in effect until June 30, 1981.

8:20 p.m.

Most truck purchases are made to replace similar older vehicles, particularly those in commercial use. Motor vehicles manufacturers have made great strides in improving the fuel efficiency of trucks and the new models will consume less fuel per mile than the older models they replace. As a result, this program will also assist energy conservation. I estimate the cost of this program at $38 million.

Unemployment rates in the construction industry have averaged 14 per cent over the first nine months of the year. At the present time demand is strong in industrial and commercial construction. In fact, there are some labour shortages in the finishing trades in the Toronto area where a $500-million to $600- million building boom is under way. Strikes in the industrial and commercial sectors have artificially boosted unemployment, but overall employment in these sectors is strong and is expected to remain firm through 1981.

The bulk of unemployed construction workers normally work in residential housing, small nonresidential buildings and renovations. For these workers the near-term outlook is not bright. I have decided to implement a measure designed to lower the cost of new residential construction and renovations to provide a boost to the building materials and construction industries.

I am proposing that the seven per cent retail sales tax be removed on many major building materials including lumber, roofing materials, kitchen cabinets, sinks, toilets and bathtubs. This exemption will be effective from midnight tonight to June 30, 1981, at an estimated cost of $94 million. I have chosen specific items to direct the benefits of this measure principally to residential construction. By focusing on specific items, the cost of the program will be contained and the exemption will be manageable for retailers.

This incentive will benefit individual consumers, builders and contractors. It will lower construction costs and encourage home and apartment owners to undertake renovations and remodelling. These activities are taking on increasing significance and, by stimulating them, it is hoped that persons previously employed in new home construction will find alternative employment for their skills. Also, this incentive should be of particular benefit in the redevelopment of inner core areas. The period of tax relief will coincide with a traditionally slow period in the Canadian construction industry, encouraging activity that might otherwise not have taken place.

The major household appliance industry is an important part of Canadian manufacturing. Because of the “big ticket” nature of household appliances, this industry has been hard hit by the recent period of high interest rates and economic slowdown. As well, the low level of housing starts has depressed demand for these products. In fact, appliance production was down 9.2 per cent in the first half of 1980 from last year’s level. Sales of refrigerators and electric ranges in the first half of 1980 were down eight per cent from the same period last year.

To stimulate purchases of certain major household appliances, I propose to remove the seven per cent retail sales tax from new refrigerators, freezers, ranges, washers and dryers, effective midnight tonight. This retail sales tax exemption will apply to purchases made by June 30, 1981, and will cost $25 million in forgone revenues. The low leakage of demand to foreign products in this largely Ontario-based industry should result in a positive impact on inventories, production and employment. Most purchasers of new homes and many persons undertaking renovations buy new appliances, and I anticipate this measure will reinforce the incentive provided by the exemption for building materials.

The residential furniture industry, like the major household appliance industry, has also felt the impact of lower housing starts and higher interest rates. Household furniture store sales declined by 6.1 per cent during the first half of this year over the same period last year. Output levels in this sector are at only two thirds of their capacity.

This industry plays an important role in our economy. It is largely Canadian-sourced and directly employs a significant number of Ontarians. Therefore, effective midnight tonight, I propose to remove the seven per cent retail sales tax from new residential furniture purchases made until June 30, 1981. This action will provide $65 million in tax savings to consumers and will encourage increased Ontario production.

Members will recall the unsatisfactory situation in the hospitality industry in Ontario and in Canada only a few years ago. Low prices in many foreign destinations and a strong dollar resulted in huge deficits in Canada’s balance of trade in travel. However, in the past two years, a lower exchange rate and considerable private investment in facilities have combined with a broad range of Ontario tax incentives to make Ontario an attractive and inexpensive travel alternative. Overseas visitors and North Americans alike are discovering the beauty of Ontario and the warmth of its people. The new $65-million downtown convention centre and the $108- million investment in phase one of the Wonderland complex at Maple will soon be major attractions for visitors.

Members will be familiar with many of our actions to assist this industry. The retail sales tax was removed from accommodation and American plan charges, kitchen equipment and hotel furnishings. The sales tax has also been removed from disposable items used in hotel rooms and from prepared meals priced at less than $6. Further assistance is available through corporate tax incentives and the tourism redevelopment incentive program.

This year’s increases in tourism are gratifying and the industry’s member companies have every reason to be optimistic. To ensure its continued growth, and to spur the development of improved facilities through new construction and refurbishing of existing infrastructure, I intend to continue needed support for this industry. I am therefore announcing my intention to extend the temporary exemptions for transient accommodations, furnishings and restaurant kitchen machinery and equipment, scheduled to expire next March 31, until December 31, 1981. The cost of this measure will be $38 million in 1981-82.

These retail sales tax cuts that I have announced amount in total to $260 million. Most of the benefits will be realized over the next eight months and will stimulate the economy during a difficult period. Specific details are contained in the appendix attached to my statement. My colleague the Minister of Revenue (Mr. Maeck), with your permission, will introduce a bill later this evening to give effect to these stimulative measures.

The actions I have announced to stimulate demand will assist the economy in the current business cycle. However, with the structural problems in our economy, other more profound measures are needed. I am accordingly proposing a five-part program to improve Ontario’s economic prospects in the 1980s.

First, with the failure of the federal budget to address strategic economic and industrial issues -- I like that line; I will read it over again: First, with the failure of the federal budget to address strategic economic and industrial issues, the province has commenced a complete review of our economic development programs, which total $2 billion in 1980-81.

Second, Ontario will provide $750 million for new initiatives in employment and regional development over the next five years.

8:30 p.m.

Third, a full review of tax incentives is under way to ensure they are cost effective and efficient and I am preparing to redirect such incentives if necessary.

Fourth, explicit initiatives will be brought forward to implement a tougher buy-Canadian public sector procurement policy.

Finally, Ontario will introduce specific measures beginning this quarter to advance high technology, world scale industrial development, research and investment in the province.

As I stated earlier, Ontario’s basic economic strategy has been to promote an attractive investment, profit and tax environment within which the private sector can flourish. The creation of the employment development fund and its board in 1979 was designed to complement this overall policy with the provision of selective direct assistance to private industry. The board provided a valuable cabinet committee structure to ensure co-ordination of the government’s program of direct assistance. It was Ontario’s response to similar initiatives introduced by other North American jurisdictions.

The EDF will have secured private sector investment of over $3.5 billion by committing $300 million of direct assistance to Ontario industry, a levering of more than $11 of private investment for every taxpayer dollar invested. This will ensure the undertaking of new projects with a job creation potential of over 19,000. At the same time, the EDF assistance to the pulp and paper industry has helped to further the long-term job security of 20,000 mill workers and loggers in Ontario.

Mr. Sargent: Where are you going to get $3.5 billion?

Hon. F. S. Miller: Go to Dryden, go to Iroquois Falls and ask them how; they know it, Eddie. They know it.

Hon. Mr. Davis: Just go to Owen Sound and ask the hotel operators what they think about the tax. Ask the hotel operators in Owen Sound.

Hon. F. S. Miller: The fund has assisted the development of employee skills training programs, urban transportation projects, mining exploration, small business and other industries.

The fund was intended as a short-term measure. Therefore, in keeping with the government’s original commitment, we have reviewed this program. I am announcing tonight that the employment development fund will be sunsetted at the end of the current fiscal year.

Mr. Mattel: It was so good you got rid of it.

Hon. Mr. Davis: Just be patient.

Hon. F. S. Miller: Wait for the next shoe. Some carryover funding will be required in 1981-82 to finance outstanding commitments made by the EDF. Provision will also be made to continue certain ongoing programs which have been financed under the EDF umbrella. I am thinking of the Small Business Development Corporation legislation, the tourism redevelopment incentive program legislation, the mineral exploration program and so on. These particular programs will be transferred to the ministries that currently handle their administration.

The EDF program was successful in developing and co-ordinating Ontario’s program of direct financial assistance to industry. It showed clearly the advantages of a cabinet committee to better focus and co-ordinate the government’s total regional economic and employment activities. We have decided, therefore, to establish a new body called the Board of Industrial Leadership and Development -- BILD.

Mr. Martel: BILD, that is a great slogan. That is really catchy. It grabs you.

Mr. S. Smith: Like bile.

Interjections.

Hon. F. S. Miller: It is the new spelling. Bile is what you fellows were getting listening to us talk about BILD.

Chaired by myself, the board will incorporate the present employment development ministers and certain other ministers as circumstances dictate. The board will consolidate and co-ordinate the government’s total economic development budget.

I should mention that this substantial budget does not include the additional cost of incentives to saving and investment provided through the tax system. It will manage expenditures of up to $750 million in new initiatives for economic and regional development over five years and this will be in addition to the $185-million five-year program already announced by the Minister of Energy.

The board will review matters relating to federal-provincial consultation and co-operation in economic and employment development initiatives and ensure a comprehensive and cohesive industrial leadership program through which the government of Ontario can invest in the future of the people we serve.

I would like to emphasize that $360 million of the $1-billion economic recovery package is allocated to the period ending March 31, 1982. This amount comprises $260 million for the retail sales tax, $75 million for new structural initiatives to be determined, and $25 million on special initiatives in rural Ontario which I will now describe.

This government is committing $5 million in 1981-82 and $21 million in total over the next five years for programs for the rural counties of the central part of Ontario. Those are counties that our Liberal friends in the Department of Regional Economic Expansion would not include such as Peterborough, Haliburton -- and Muskoka, I think, was one of them.

Mr. Breithaupt: Even Muskoka?

Hon. Mr. Davis: And some of you will write your weekly columns and say what a great thing it is. You will pretend you were members of the government.

Hon. F. S. Miller: It also applies to Grey and Haliburton and a few other places, at the strong urging of people such as the honourable members.

Members will recall a similar initiative was undertaken for the rural parts of eastern Ontario under the DREE agreement. The major focus will be in forestry with one half of the total funding being directed to increasing production of wood fibre from public and private lands. This action will help offset continued depletion of quality hardwood stands critical to the viability of local forest-related industries and will generate significant employment.

The other components of the package are: an intensive geological survey aimed at increasing mining investments; greater access for small business in rural Ontario to assistance from the Ontario Development Corporation, and increased funding for programs that assist tourist operators with the cost of upgrading their facilities.

Members will recall that on April 10, 1980, the Premier addressed the Legislature on the subject of rural electrical rates.

Specifically he requested the Minister of Energy (Mr. Welch) to obtain from Ontario Hydro concrete proposals to reduce the differentia between electricity rates paid by rural residents and those paid by urban residents. He instructed that the proposals be made available by this fall so a new and more equitable --

Mr. Sargent: But you kept on the $7-billion deficit, didn’t you?

Hon. F. S. Miller: Does the member not want these in his county of Grey?

He instructed that the proposals be made available this fall when a new and equitable rate structure might be introduced. At present, average rural rates are considerably higher than average municipal rates. This is primarily because of higher distribution costs experienced in less densely populated areas serviced directly by Ontario Hydro. Moreover, the trend has been for the differential to widen as the more densely populated portions of the rural areas have come increasingly into the service area of the municipal utilities, leaving even fewer people to share the costs of the rural system. This is clearly an inequitable situation.

8:40 p.m.

As the electricity rate structure is quite complex, it will require some time to alter this structure. The government has decided, therefore, to instruct Hydro to eliminate the undue differential between rural and urban electrical rates by 1982.

Interjections.

Hon. F. S. Miller: Just listen for a second. However, in order to provide immediate relief to rural electricity users, the province will provide $20 million to Ontario Hydro during the 1981-82 fiscal year. These funds will enable Hydro to provide direct discounts to rural customers who at present pay excessive rates.

Hon. Mr. Davis: We are going to assist the people in the rural areas, Brother Breithaupt, and that bothers you, I know.

Mr. Speaker: Order. Order. I am sure the people in Armstrong want to hear this.

Hon. F. S. Miller: I think the people in Armstrong will like what they hear, Mr. Speaker. On your behalf I will pass a word to the people in Armstrong who, I am sure, are watching.

Ontario’s tax incentives are an integral part of the tax structure. Tax expenditures, as they are popularly called, are not directly equivalent to spending programs: a dollar given up by a tax incentive is not necessarily the same as a dollar given in a grant. Tax incentives are fundamentally important in establishing a competitive tax structure and achieving our economic goals. It is important that these incentives be closely examined in the context of the economy’s structural difficulties to ensure they are cost effective and efficient. My ministry reviews our incentive programs on an ongoing basis. These reviews are carefully done and are instructive. However, I believe a more comprehensive analysis should now be undertaken and I have instructed staff to commence this review immediately.

I would like, in so far as possible, to concentrate our tax incentives more selectively in areas with the greatest promise and which offer the biggest potential economic gains. For example, I believe we should do more to encourage exports, import replacements, research and development and high technology industries such as aerospace, communications and microelectronics.

Mr. Cassidy: They are just slogans.

Hon. F. S. Miller: I am following the advice those gentlemen gave me yesterday. I rushed it into print last night, and held the press until then so he could say he affected this. It is exactly what he told me to do yesterday, is it not? It is right down the line, every bit of it. It is all on the record.

Mr. Cassidy: The Treasurer is five years behind the times. Where were you last year and the year before? I used to tell Darcy McKeough the same thing.

Hon. F. S. Miller: It’s going to be very hard to tell me it isn’t right.

Research and development is an activity supported by tax incentives, yet R and D spending in Canada is woefully insufficient to ensure this country the economic resilience associated with high levels of R and D activity. We are currently examining options or stimulating R and D, particularly to encourage both new Canadian investment and greater spending by multinational corporations. It may prove necessary to relate incentives to success in achieving certain threshold levels of spending. I want to make it clear I expect to see some improvement in this area.

I want to talk about a tougher buy-Canadian public sector procurement policy. Structural policies to strengthen the Ontario economy can be reinforced by an aggressive buy-Canadian public sector procurement policy. Buy-American regulations such as the Surface Transportation Assistance Act, Japanese domestic purchasing policies, the North Sea oil sourcing legislation, foreign government-sponsored marginal pricing, and growing provincial sourcing preferences that now threaten the Canadian common market -- all of these are competitive realities that confront Ontario’s “open door” procurement stance, with our strict adherence to competitive principles and an across-the-board 10 per cent preference for Canadian goods and services.

On the positive side, opportunities for Canadian participation in the upcoming resource projects have moved the federal government and Canadian industry to seek aggressively a better sourcing deal for Canadian business. Ontario has tested these waters, too. In the pulp and paper modernization program we have secured commitments from the companies to purchase equipment from Canadian sources where feasible.

The existing 10 per cent Canadian preference applies at the present time only to Ontario government ministries and not to public agencies such as school boards and hospitals, crown corporations and municipalities that receive provincial transfer payments. Ontario ministries alone currently spend $600 million annually, or 75 cents out of each purchasing dollar, on goods and services made in Canada; but more can be done.

Several initiatives will be undertaken to stimulate Canadian industries through a tougher public procurement policy. A procurement policy office will be set up to establish and implement effective policy guidelines, set industry target ratios for domestic content, monitor progress and develop further initiatives. The Canadian preference will be extended to all provincially funded agencies through these guidelines. The Canadian preference will also be extended to those industries receiving provincial development assistance through commitments in their corporate sourcing policies.

These steps will ensure a bigger role for Ontario and Canadian companies in supplying the needs of the public sector and in participating in private sector expansion.

To have maximum impact, the activities of the new Board of Industrial Leadership and Development and those at the procurement office, and the direction of tax initiatives and incentives will require close co-ordination and co-operation in federal-provincial actions. I will be addressing this issue when I and my colleague the Minister of Industry and Tourism (Mr. Grossman) meet with the federal ministers of Finance and Industry, Trade and Commerce in Ottawa in the near future.

Since the mid-1970s, the economic situation has required the government to give a high priority to economic and employment development. Spending has been prudently managed and net cash requirements reduced in a balanced budget framework as a contribution to lessening inflationary pressures. Major tax increases have been avoided for the same reason. Significant incentives have been provided to promote investment and job creation. However, at no time has this strategy been allowed to hurt effective delivery of major social programs.

Over the period 1972-73 to 1980-81, combined spending on health and community and social services has increased faster than total budgetary spending excluding public debt interest. Ontario’s support for the elderly and disadvantaged has increased considerably faster than total spending. New initiatives will be brought forward in recognition of the International Year of Disabled Persons.

Economies have been secured by cutting out waste. For the past four years, we have realised average annual gross savings of $400 million, mainly to finance in-year spending increases in the social field without adding to total spending. This year is no exception.

Funding of the Ministry of Health has been increased since the budget. Health expenditures now represent approximately 28 per cent of total government expenditures compared to 25.8 per cent prior to the imposition of restraint.

In April 1980 the government provided a 10 per cent rate increase for family benefits and general welfare assistance recipients at an annual cost of $54 million. Further increases with an annual cost of $49 million will be announced by my colleague the Minister of Community and Social Services (Mr. Norton). For this fiscal year, a further $1 million will be provided for day care. A more extensive program announcement for next year will also be forthcoming from the minister.

8:50 p.m.

Unlike the Liberal government in Ottawa, we intend to respect social priorities and values while keeping our own fiscal and industrial priorities in clear focus. Let others tax those who can least afford it, let others acquiesce to inequity and economic injustice; this Conservative government, the government of the Honourable William C. Davis, will not.

I would like to talk about relief from home heating costs. The Liberal government in Ottawa has shown it is insensitive to the impact of rising energy prices on people with fixed and low incomes. Sudden increases in energy costs, staged or not, impact unfairly on these people. They need assistance to enable them, over time, to adjust their household budgets -- budgets already strained by inflation -- to the new realities.

The government of Ontario believes a temporary program of relief from sharp increases in home heating costs, one that is income-tested and of three years duration, should be implemented as soon as possible. Benefits should start being delivered no later than the first quarter of 1982, in respect of the heating season beginning next fall, when the new prices will start to hit the lowest income groups hard. I will be making specific proposals to the Minister of Finance for a shared cost program. I might add that we will pursue unilateral action should the federal government be unprepared to see the error and injustice of its ways.

As a result of my proposals tonight, net cash requirements for this fiscal year are now forecast at $1,059 million, or $110 million over budget. This deterioration is wholly accounted for by a revision to the revenue forecast -- $33 million reported in the September 30 Ontario Finances and $77 million resulting from tax relief measures announced this evening. The balance of the net costs of the temporary incentives, $147 million, will fall in 1981-82.

I have made no change to the 1980-81 expenditure forecast at the present time. The Chairman of Management Board of Cabinet (Mr. McCague) assures me that, as in the past, maximum effort will be made to secure savings to offset the in-year increases we have allowed in priority areas.

The higher level of net cash requirements in 1980-81 and the flow over into 1981-82 are well within the capacity of the province to finance without resorting to public borrowing -- unlike some other governments. Some would perhaps question our commitment to restoring the capacity to balance the budget. Well, we did achieve that capacity last year.

In view of the economic situation, we decided this year to allow a break in the pattern of regular reductions in the deficit. However, we have remained vigilant and prudent in our spending.

Mr. Peterson: You’re flexible.

Hon. F. S. Miller: We have to be, my friend, because the economy is not a static thing. If we are not flexible -- if we are as rigid as the member’s federal friends -- they cannot adjust to the realities of the day and we can.

Mr. Peterson: They don’t listen to you.

Hon. Mr. Davis: You understand being static. You have been static all your life.

Hon. F. S. Miller: As a matter of fact, static is something I hear in my ears a lot trying to explain what happens.

Mr. Peterson: Sitting beside the Premier, you are just crazy.

Hon. F. S. Miller: With a resumption of reasonable economic growth, we will be able to lower our cash requirements once again.

As we have stated from the outset, the purpose of cutting the deficit is twofold: first, to reduce inflation, and second, to give the province control and flexibility to meet its priorities. We are now using this flexibility to invest heavily in Ontario’s future. Surely that is the ultimate mission of compassionate and sensitive government during challenging times

Pour résumer, M. le Président, on peut dire que notre programme de relance économique aura pour effet: d’aider des millions de contribuables, des milliers d’entreprises et plusieurs communautés négligées par le gouvernement du Canada; de faire preuve de ce leadership économique dont la carence au palier fédéral a des effets si lamentables; d’exercer à court terme un effet stimulant l’économie; de créer des emplois en Ontario; d’assurer une sage gestion économique de notre avenir.

D’engager de nouvelles ressources en vue d’une croissance et d’une prospérité continues; de réaffirmer notre appui aux priorités sociales, au développement régional et à la promotion des régions rurales de l’Ontario; d’investir intensivement dans les compétences de nos entrepreneurs et dans le potentiel industriel de notre province et de sa population; de fournir un cadre pour les investissements dans les industries faisant appel à une technologie avancée et pour les travaux de recherche et de mise au point d’importance si vitale pour l’avenir de l’Ontario.

Mr. Roy: Tu ne viens pas à Carleton parlant comme ça.

Hon. F. S. Miller: Que c’est que tu veux? Je l’ai fait dans votre circonscription l’autre jour, mon ami. J’ai trouvé qu’il n’y a personne qui va voter pour vous.

To summarize, Mr. Speaker, this economic recovery program will: assist millions of taxpayers, thousands of businesses and many communities ignored by the government of Canada; give economic leadership sadly lacking at the federal level; provide effective short-term stimulus to the economy; create employment in Ontario; ensure sound economic management for our future; commit new resources for continued growth and prosperity; reaffirm our support for social priorities, regional development and rural Ontario; invest heavily in the entrepreneurial skill and industrial potential of our province and her people; provide the framework for high technology investment, research and development so vital to Ontario’s future.

9 p.m.

Ontario is a part of a nation and a continent experiencing fundamental transition caused by international economic forces and energy policies beyond our control. Effective leadership from Ottawa could effect this transition in a fashion that profits all Canadians. That leadership is not forthcoming. We must assess our own priorities here in Ontario and defend our fundamental entrepreneurial values. We must advance Canadian ownership and Canadian technology. We must move now to invest in and secure our future -- a future which, under the leadership of the Honourable William C. Davis, holds immense promise and opportunity for us all.

Hon. Mr. Maeck: Mr. Speaker, I wonder if I might have the permission of the House to introduce one bill relevant to the budget statement made by the Treasurer.

Mr. Speaker: Do we have consent? Agreed.

INTRODUCTION OF BILL

RETAIL SALES TAX ACT

Hon. Mr. Maeck moved first reading of Bill 187, An Act to amend the Retail Sales Tax Act.

Motion agreed to.

SUPPLEMENTARY MEASURES (CONTINUED)

Mr. Peterson: Mr. Speaker, if that effort from the Treasurer deserves a standing ovation, those guys are going to be standing on top of their desks jumping through hoops when I am finished.

It was a real case of promise unfulfilled. I have never seen so much activity in this building today, scurrying around in great anticipation of the mini-budget to solve all the province’s economic ills. I am going to get into it in substance in a minute, but I want to tell the House it is a hollow superficial document that may or may not apply in the next two, three and four years. There is very little of any substance to contribute to any economic logic now or in the immediate future.

I am constantly struck by the difference between the government’s press releases and the substance of its actions. I am sure that a difference was noticed tonight when the minister was reading it -- the great $1-billion project to bring about economic recovery. I will prove it is less than we are spending now on economic development in this province. It is a fraud. It is a sham. He has fooled everybody.

I do not know, maybe it is a deliberate sabotage. Maybe a few of the people in the ministry went down to Treasury. Maybe this is the Treasurer’s deliberate move to sabotage the Treasury because I notice some interesting play in this budget tonight about how the Treasurer wants to review all the economic programs that the Minister of Industry and Tourism is currently undertaking.

It is hollow and superficial and it is not going to work very well. I am going to put our alternatives to you, Mr. Speaker.

I always like to have a little text when I am speaking to heathens and tonight I have chosen a text from the Financial Post, which my friends opposite will read on occasion and my friends to the left probably do not understand at the best of times. On the timing of the mini-budget, our former departed friend Sidney Handleman said this:

“Miller sees this as an opportunity to do what he was going to have done anyway for next spring, let’s face it. The mini-budget could have a big impact on the by-election, especially if incentives for high technology industry concentrated in the Ottawa region are implemented.”

Mr. Speaker, I can tell you the minister has disappointed poor old Sidney Handleman. He has disappointed us and I think he has disappointed every thoughtful observer. All this fuss today has amounted to nought. If he had read this as a quick statement in the House today it probably could have sneaked through, but he created such high expectations by his own hand that he deserves to suffer the slings and arrows for his failure to deliver on those expectations.

We understand as well as the minister does the politics of this event. I find it very amusing when he stands and regales us with the great leadership of William G. Davis. I can tell you, Mr. Speaker, next week under Stuart Lyon Smith we are going to have another member in this House sitting on this side. The people of Carleton are going to see through this. Those guys are not even in the race, so do not despair. We are going to have another member next week and I look forward to that.

The reality is we are facing as dismal an economic circumstance in this province at this time as we have in recent history since the Depression. Unemployment is bad and real income is not keeping pace with inflation. I could go on and recite statistic after statistic. There are not many thoughtful observers in this province or in this country who could not see this coming; that is the tragedy.

We have made speeches and speeches from this side of the House. We have quoted every respectable economic authority in this country and this province and what we see today is no surprise. What we see has not caught us by surprise because we were arguing for the kind of substantive investment in wealth-creating instruments in this province that could have prevented the kinds of problems the government is attempting to respond to today.

The response is a superficial one. I cannot stand here and say I am against sales tax cuts because it is Christmas time and who is against Santa Claus? When we are dealing with a tax expenditure of $280 million, of which the minister is going to undertake a complete review, there are very creative ways to use that money. One of the things he could have done, the parsimonious chap, was to extend aid to the elderly, those people he disfranchised in his last budget. He could have spent $10 million doing that to help the poorest of our senior citizens. That is something serious he could have done.

Hon. Miss Stephenson: Talk about misleading. Talk about fraud. The member is it.

Mr. Peterson: I have exercised the Minister of Education (Miss Stephenson) and I do not mean to do that.

Mr. Havrot: How did you get in the front bench?

Mr. Peterson: Whoever arranged that front bench did not have an aesthetically well-trained eye. I am just looking at the minister over there. They look for all the world like a tag team in an obscene mud wrestling match, sitting there together yelling, shouting and winking at each other.

I want to deal with this statement of the minister today as best as I can respond. I have chosen to go through it in the order that the Treasurer presented it tonight.

Mr. Speaker, I would appreciate any effort you could make to keep the yelping down to a dull roar. I certainly expect some of it. When one inflicts pain, one expects some screaming and yelling, but it would probably be to their benefit to listen, at least to some extent.

9:10 p.m.

I have heard the Treasurer on numerous occasions wail against the federal government for its lack of a national economic plan. That is hypocrisy in the extreme. There is no such thing as a provincial economic plan of any description and even some of the initiatives he alludes to in this document are so lacking in specificity or are going to take place so far in the future that he has contributed nothing here tonight to the sum total of knowledge in this province.

I understand the political intention of their trying to dissociate themselves from their federal friends in Ottawa, from the federal government. That is their prerogative and I don’t deny them that, but they do it on such wrong grounds. This is no $1-billion, five-year economic recovery program. It just is not. The press releases are wrong. The whole description is wrong.

I am interested to read, even by the Treasurer’s own prescription, on page four of his statement tonight he says, “Our economy will continue to operate well below potential.” I assume that means even after his new economic initiatives here tonight because that is the way it reads. That is a pretty dismal kind of approach because I can tell him we decry very much the lack of ability to live up to our potential in this province -- unemployed young people, the lack of skilled workers, the lack of apprenticeship programs. There are always allusions to it, always studies on it, always noise about it.

There is the Minister of Labour (Mr. Elgie) grunting and laughing over there. This failure is going to rest clearly on his shoulders and tonight, still again, there is no initiative. I can tell him the gravestone of that government is going to read, “We failed to do anything about skills training in this province.” That is the biggest single failure. That is something over which they have complete constitutional jurisdiction. They can’t blame that on the feds. That is their fault. They have the responsibility. They have the institutions. But they don’t have the imagination and the guts to pursue it.

One federal study I read said there would be a shortage of 35,000 skilled workers in this province by the year 1985. We know it is coming. We also know the spinoff. We also know that every skilled worker creates employment for five or six other workers. We are talking, in total, of 150,000 or 200,000 workers -- yet again rhetoric, yet again promises, yet again blame for the federal government, but no specific action. That is a glaring failure in this document.

The job creation figures here are again dismal, even after this economic stimulus, even after this $1 billion worth of expenditure whose method of deployment we have yet to see. Even there the job creation figures would be down something like 47 per cent this year, even with an expanding work force. That is a dismal admission of failure by this government.

I want to deal with their response, their action to solve the economic problem. They have pulled out the tried and true method of sales tax cuts. How many times have we tried them before? The quick fix, the short-term solution -- neat, clean and easy to administer.

He can put a cutoff date on it and there is a cutoff date on this: June 30, 1981. I will guarantee something right now: The next provincial election will be some time before June 30, 1981, because that is when all this stuff runs out. It is so blatantly politically motivated, it is fraudulent.

I want to read something about sales tax cuts in general. The Conference Board in Canada found that the 1975 sales tax cut on cars in Ontario led to a decline in sales of cars in 1976. This conclusion is the same as the Jump and Wilson study we had. All we know, on the best evidence from the best authorities, is that sales tax cuts lead only to a change in the timing of the purchasing. Admittedly, sometimes there are reasons for changing the timing of the purchases, but again it is an attempt at a quick fix for political reasons that does nothing to solve the structural problems in the province. I find that deplorable.

In 1978 a study by the Department of Industry, Trade and Commerce found’, the sales tax cut on footwear, furniture and textiles in Quebec had a similar effect. All it did was change the timing. Being a politician, I understand as well as they do the necessity of good timing, particularly around election time, but we have done it so many times since 1975. We saw the biggest deficit ever in the history of this province in 1975, pre-election obviously, when we gave away all the money on first-time owners’ grants and sales tax cuts for which we are still paying a price.

What we do when we get up into a tax expenditure of this type is just force future purchasers, future consumers, future taxpayers to pay for our consumption now. I am not saying there are not some justifications sometimes, but had we spent all that money over the past few years building the structural base, the sound foundation, the job training, the skills training on research and technology and that type of industrial infrastructure, we should not have to fool around with quick fixes and superficial cures today. Therein is the major failure of this government and of this document.

When we cut the sales tax on light trucks we are substituting about 40 per cent of those that will be imported from the United States and Japan and from other countries. To that extent about $15.3 million in forgone revenue will go to subsidize imported vehicles.

I was not able to determine the exact figure on building materials, because we were in the lockup, but again a lot of the $94 million going to cut the sales tax on building materials will go outside the province and outside the country. It is interesting that was all done on the pretext or rationalization of creating jobs. Admittedly a lot of people .are involved in the renovation business and it will probably create some jobs, but if they want to take a fix for the economy of about $100 million, there are other ways to do that.

What about a wage subsidy program at this critical time? The government has the mechanism in place for a $1.25-an-hour wage subsidy. We have suggested before in the House programs such as a 20 per cent tax credit for new jobs created. When we want to direct the power and might of government to achieve a specific purpose, we have to be more creative than just cutting sales tax. We think we could have created more employment, which is what we want to do as the immediate short-term objective, by involving ourselves in a wage assistance program of some type. But again this is a quick fix with the appearance of great activity.

Mr. Williams: On a point of privilege, Mr. Speaker: The television cameramen have found the dialogue so tedious they had to leave the room. I am wondering if we could have the television lights turned down to save the members’ eyes.

Mr. Peterson: I would like to thank the member for Sleepy Hollow for his contribution. It is interesting that we are going to have a sales tax fix of $25 million on household appliances. Our studies on that say the market in Ontario is about $250 million a year. About half of that is produced outside our borders. Again, we are trying to stimulate employment. It is not necessarily the most effective way to achieve that aim.

9:20 p.m.

Residential furniture is about the same. The market in Ontario is around $1 billion, about half of which will be imported from outside our borders. A high percentage of the money we are talking about will assist production from external sources and isn’t focused as well as it could be on creating employment in Ontario now.

It is interesting that the federal-sector task force report on the furniture industry a couple of years ago recommended a sales tax cut for that sector. Ontario’s formal response to that report rejected the proposal as being of only temporary value with no long-term impact; that is a fact. It is interesting only in that they did not anticipate a by-election.

My colleague from Wentworth North (Mr. Cunningham) pointed out an interesting discrepancy tonight on removing the tax on household appliances. On page 28 an ineligible appliance is defined as an appliance designed for commercial use. Yet on page 30 the Treasurer includes for sales tax exemptions under the tourism sector kitchen equipment purchased for use in restaurants. I would just like to tell the Treasurer about that, as he may want to work this out and decide what is eligible and what isn’t eligible before he brings in the legislation on this particular bill.

It is interesting also that his incentives for the tourism business, the $38 million, do not take place this year. It is an extension only of an existing program to the era of fiscal 1982. That, realistically, is the only initiative in this budget.

I want to point out some interesting figures on the way it has been calculated, and these are at the back of his little book. We have about four and a half months left in fiscal 1980-81 and there will be a net tax forgiveness or a tax expenditure of about $77 million in four and a half months. The major impact from these tax cuts comes next year when $147 million worth of tax expenditure will be achieved basically over a three-month period. The major stimulus is going to be in the 1981-82 fiscal year, not in this year, not over the tough winter we are facing right now, which is a very interesting way for the Treasurer to manipulate his figures.

Having left the sales tax cuts -- and obviously our party will support them, but we will try to be as constructive as we can about alternative ways to use those moneys creatively to create the kinds of social and human objectives we want to create -- I can tell you, Mr. Speaker, that Ontario’s program for industrial and economic development, BILD, the Board of Industrial and Leadership Development, as I gather it is called, or BUST, is not worth the paper it is written on tonight.

First, the Treasurer is going to have a complete review of our economic development program. That, of course, is our little friend at the end of the bench, the boy who would be Treasurer, as he is effectively known. The Treasurer is now going to relinquish it all to his colleague at the end of the bench, who is going to amuse himself. He says it totals $2 billion in 1980-81, which again is no new initiative.

There is going to be $750 million for new initiatives in employment and regional development over the next five years, not starting this year but next year. That is less than we are spending now, interestingly enough. There is to be a full review of tax incentives, which I will get to in a minute, which was my bill that was introduced in this House. I am glad they are finally getting around to it.

They are going to have a buy-Canadian sector, a complete policy lifted out of our industrial strategy, which I am happy on behalf of my colleagues to see. There are to be other specific measures, beginning this quarter, to advance high technology, world-scale industrial development, research and investment in this province. That is the end of the specificity. There are no more details. I am convinced that this Treasurer, that bureaucracy, has no bloody idea what it plans to do. They thought it would be a nice round figure, $750 million over a period of time. That is why they decided at this time of political crisis for them to introduce a program.

They are going to form an economic board, BILD, which is something like BED in Ottawa, something that they criticized very seriously. It is really no different from the employment development now. It is chaired by the Treasurer and it is going to have the Minister of Industry and Tourism on it. There is really no substantial change, not one initiative here.

He is going to spend up to $750 million over five years. Get that, Mr. Speaker: it is “up to,” with no commitment of $750 million. What is interesting is he makes a specific promise. He said this year, being up to the end of 1982, he is going to spend $75 million for new structural initiatives to be determined, and $25 million in special initiatives for rural Ontario which he will now describe. That is his commitment. It is $100 million in new money to the end of 1982.

Over the last two years he has spent $300 million through the employment development fund on economic initiatives, which averages out to $150 million a year. His only commitment next year to the end of 1982 is to spend $100 million. That is why I said at the beginning, and I say to the House now, it is less -- and I want the House to hear me -- than he is doing now. That is the full commitment out of that Treasurer. That is why it is such a hollow proposal that he has brought to us tonight. It does not bear serious approval by any sophistical observer of that document.

Of that $100 million, $20 million is not to encourage industrial development but to subsidize the rate differential between rural and urban hydro users. One could not really argue that is to create industrial development, it is to honour a political promise the Premier made when he was under pressure from a rural delegation a few months ago. They do not know what they are going to do about hydro rates so they are going to buy them off for the short term. That is the reality. In fact, it is a reduction from $150 million a year to a commitment of less than $100 million, more like $80 million a year. Still, we do not know what he is going to do with it.

We did know what he was going to do when he brought in the employment development fund. Some of us disagreed with various parts of it, and the way he did it, but at least we knew what he was going to do. We still do not know what he is going to do now. I defy you, Mr. Speaker, and I defy any other observer to tell me what he plans to do.

He is going to spend $5 million growing trees. I congratulate him. It is the old two-for-one proposal, I guess. He has promised that for years. I think it is a worthwhile expenditure of public funds and I congratulate him for it.

He is going to spend $20 million to sort out the differential on hydro rates. Again, as I said, that is to honour a political commitment of the Premier. One could not argue that is industrial development.

He goes on with a tax incentives policy. It is a most curious statement in this review by the Treasurer. He said: “My ministry reviews our incentive programs on an ongoing basis. These reviews are carefully done and are instructive.” Now get this: “However, I believe a more comprehensive analysis should now be undertaken, and I have instructed staff to commence this review immediately.”

Either he is doing good work or he is not doing work. Obviously he is not doing good work. As I said earlier, my private member’s bill passed in this House, yet his House leader has never called it forward for third reading. My bill said we should have published tax expenditure studies so we know exactly where every forgiven dollar is going and can analyse whether that is the best investment on behalf of the taxpayers of this province. I support that. I hope we see more than just words from him.

His buy-Canadian policy, as I told him before, it is a straight lift out of the quite brilliant industrial strategy published by my leader about a year and a half ago. I was proud to be associated with that. It is interesting that over the two or so years that it has been out it has stood up to the most rigorous kind of scrutiny. It has weathered well with age. It is as meaningful now as it was then. It is substantive. It is sound.

It is worth while and shows far more vision -- from our limited research staff and the people who work with us -- than what the minister’s whole bloody bureaucracy could produce, or has produced at this point. That shows that if we can get our hooks on that bureaucracy to function the way we think it should function with new energy, new initiative and new political guts, we can turn it from the dispirited, disgruntled lot it is now working for the Treasurer, into a creative force for the betterment of the taxpayers of the province.

9:30 p.m.

The most outrageous section I have here is one entitled, “Sensitivity to Social Priorities.” My God, one would almost think the Treasurer had a heart by reading the titles to this. Then he goes on to say: “Let others tax those who can least afford it, let others acquiesce to inequity and economic injustice; this Conservative government, the government of the Honourable William G. Davis, will not.” Noble words, noble words.

The Treasurer is the one who snookered the poor old people out of their rightful entitlement. The Treasurer is the one who did it all -- all in the name of equity and fairness. The first thing we will do when we get into government is rectify that inequity he has created, again for his political gain. There is not a lot of money; it is only about $10 million. He could have afforded it with all these outrageous programs he has outlined.

The fiscal integrity of this province has been even further distorted. I do not believe that this Treasurer cares about a balanced budget. I think it is just rhetoric. He hauls it out to his right-wing friends at his right-wing meetings, if it serves his political purposes at any given time, because there has been a major perversion from that philosophy.

We are still paying almost $4.5 million a day in interest. We are up over $1 billion again in terms of budgetary deficit. Again, we are going to have to rape the pension fund and again defer our problems on to future generations of taxpayers. We are now over the $1-billion figure for the deficit; and this has been a major disappointment to us.

We would spend taxpayers’ money on a number of things. We have three priorities in this party right now. The first one is to create wealth in this province by building the manufacturing base and to that end we have a number of specific proposals. Second, we would protect those people in society least able to protect themselves from the ravages of inflation and other economic policies. Third, we would cut out the unnecessary and stupid expenditures this government has made in a number of areas over the years. I refer to the hundreds of millions of dollars of land banked, to Minaki Lodge, to advertising of his ill-conceived programs -- there are so many areas.

It is not as if those moneys are not there to be employed creatively, because we think they are, and we would do it without bringing on the major fiscal distortions that my friends to the left do not even understand or care about, because we do believe in fiscal responsibility. Within the budgetary context of Ontario we could do it. I can promise that.

But there has been failure to deal with skills training, with research and development, with a manufacturing base, with re-tooling, with developing indigenous industry in electronics, machine tools, food processing, communication and all those other areas that we have a natural structural advantage for. The failure to recognize we have a problem and to do anything about ft is going to kill this government.

The formerly most respected treasury in this country had national clout and national power. When our Treasurers went to Ottawa, Ottawa listened. But the treasury has now been diminished under this Treasurer’s authority -- not only in Ottawa but here with the voters too. People understand that.

There is a widespread malaise in this province. There is deep economic insecurity. There is a deep disgruntlement with the government and its ability to manage the economic problems of this province. I have never felt more confident in my political career that people are looking for substantial and reasonable alternatives. This rules out my friends to the left and puts us clearly in the driver’s seat today. It is not too far away that we are going to form the government; mark my words.

Our leader has brought creative leadership to this party and to the office of Her Majesty’s loyal opposition. Members should just watch next spring after all these little programs of the government run out and we have an election. They should watch who is coming back to sit on that side of the House to bring some new vitality and energy to the economic growth of this province.

Mr. Laughren: Mr. Speaker, I will show a great deal of restraint and address my remarks to the Treasurer’s mini-budget rather than to the remarks of the member for London Centre.

I would just say quickly, though, before I get too involved in the mini-budget, that it does take a lot of courage to stand up in this House as a Liberal following the federal Liberal budget of a couple of weeks ago and to criticize anybody’s budget, let alone the Tories in Ontario. It does take a lot of courage.

As a matter of fact, I am surprised the member for London Centre did not just stand in his place and give us a eulogy of the Liberal budget so he will receive a formal welcome if he ever decides to move to Ottawa.

Mr. Roy: “Move aside, we are coming through,” Floyd says.

Mr. Laughren: As a matter of fact, I will say it again: Move aside, we are coming through.

Mr. Bradley: Are you moving no confidence?

Mr. Laughren: Perhaps if the member will listen to my remarks he will understand exactly how this caucus feels about this budget. I will ask him to listen for a few moments.

This budget -- sorry, “supplementary actions” I understand the Treasurer would prefer to have it called -- these supplementary actions do not do anyone in Ontario any harm but they do not help those people who need it the most either. The same can be said for individuals as for the economy as a whole. It does not do the economy any harm to cut regressive taxes. As a matter of fact, it does it some good. It does not do any harm to individuals to cut taxes that should not be there in the first place, As a matter of fact, it does some good. But it does not solve the underlying problems in the Ontario economy. Naturally, we in this party understand there are some parts of these actions we must support and that indeed we would have implemented a long time ago.

This speech of the Treasurer’s tonight was supposed to be a response to the federal budget of a couple of weeks ago. That is what the Treasurer told us. We agreed, and still do, that there is a need to respond to that federal Liberal budget, which was really more of an energy statement than a budget.

I understand, too, why the Treasurer wants to put as much distance as quickly as possible between his government and the Liberal government in Ottawa. We understand that. They have seemed to be too cosy for too long and it is time to put some distance between them. I am surprised they did not make the distance greater and do so at greater speed.

We agree with the Treasurer that the tax cuts are necessary at this time and that they not only will provide relief to taxpayers, because those were regressive, but will also provide a short-term stimulus to the Ontario economy.

The Treasurer one week ago yesterday at the opening of his Treasury estimates said his mini-budget was going to be a response to the cyclical problems of the Ontario economy. He used the term “cyclical problems”. If the Treasurer really believes that Ontario’s economic problems are cyclical, then I suppose one could say his statement tonight does something to address the cyclical problems, assuming of course that the cycle lasts between now and next spring.

9:40 p.m.

We know we are not into those kinds of economic difficulties; the Treasurer will admit that. At one moment he is castigating the federal Liberal budget because it does not address itself to the structural problems of this country, and the next moment he is telling us he is going to bring supplementary actions in that will address themselves to the cyclical problems of the Ontario economy. Where is the consistency in that? I do not know of any two Ministers of Finance or Treasurers who deserve each more than this Treasurer and his counterpart in Ottawa, MacEachen.

Hon. F. S. Miller: You have been nasty before, but this is going too far.

Mr. Laughren: The layoffs of thousands of workers this year are a result of the structural deformities in the Ontario economy. The Treasurer does not seem to understand that. A branch plant economy, one whose owners can repatriate at will -- just ask the Minister of Industry and Tourism about what the owners of the branch plants in this province can do if they want to. In his profit centre booklet, he stated very clearly there are no restrictions on what they do with their capital. So what do the owners of the branch plants do? They shut down their plants and repatriate their capital, just as they are invited to do by the Minister of Industry and Tourism in that booklet.

Hon. Mr. Grossman: Bob White asked for more branch plants.

Mr. Mackenzie: Why do you not stop being silly for once?

Mr. Laughren: Mr. Speaker, the Minister of Industry and Tourism is one of the causes of the structural deformities in this province by inviting ever more foreign control of the Ontario economy. That is what he is doing rather than understanding that one of the real problems with the Ontario economy is the fact that, for example, our exports are built, aside from autos, on fabricated materials and raw resources. That is not a good way to build an economy.

Our imports are manufactured goods. This country had a deficit of $17 billion last year, up $5 billion in one year, and the Minister of Industry and Tourism is doing nothing about that. All he seems to think is that if he gets out there and sells Ontario to the world our problems will go away. He is fooling none of us at all with his glossy document, his expensive packaging. That profit centre booklet was the Minister of Industry and Tourism in bound form; nothing more, nothing less. That is exactly the way he is -- glossy, fast-talking and slick.

Mr. Mackenzie: All plastic.

Mr. Laughren: That was what that was, and that’s the Minister of Industry and Tourism. He is the pink flamingo of the Tory cabinet.

Mr. Foulds: Seventeen-dollar pencil cases. That is what the minister puts out.

Hon. Mr. Grossman: Bob White thinks it’s great. He wants more foreign investment.

Mr. Laughren: No, no. Not true. The minister is thinking of the member for Sarnia (Mr. Blundy), who thinks there should be more branch plants in Ontario.

Not only are there structural problems, which have been there for some time, but also the government has sat icily by and not even monitored very carefully what is going on. It is not as though this is a new problem. We are held up to ransom when somebody like Ford says: “We will either build our plant in Windsor or some other place. We have grants from some other place; so you had better give it to us.” We are held up for ransom in the pulp and paper industry where, and let me be very specific about this, the Treasurer told all of us those grants were absolutely necessary for us to remain competitive. That is how far the Treasurer and the Minister of Industry and Tourism and others in the government allowed the state of the pulp and paper industry to deteriorate before they moved in and did anything about it at all. They are the ones who sat back and watched the industrial machine called Ontario wind down and did nothing about it until it became a crisis situation. Then he says, “Look, we either have to do this or the thing goes down the pipe and the communities are threatened.” That is some kind of economic stewardship for Ontario. He failed even to monitor the situation carefully.

This government will forever be slapping Band-Aids on the problems rather than practising preventive economic care. That is what it has failed to do. It is almost as though it was transposing the economic problems from the health care system where preventive care has virtually no role at all.

We in this party are eternal optimists. We are very optimistic about our confidence to turn the economy of Ontario around. We are not the purveyors of doom and gloom; they are the Tories themselves, not us. We happen to believe we can turn adversity into opportunity, but we know that to do that we must plan carefully and act courageously. We would be prepared to do that. We agree there is an element of risk whenever one does that but we think it simply must be done.

I would like to remind the Treasurer of a few things that we think should be done.

One reason we are so upset about the Treasurer’s BILD program announced in his budget tonight -- someone referred to it as a bilge program -- is it is nothing but a delaying tactic to allow the Treasurer to sit idly by yet again and hope that the US economy improves, that we will get some slopover benefit and that things will pick up in this province. That is all he is trying to do with his BILD program. I will tell the Treasurer why I am so sure of that.

He says he is going to have the BILD program look at some specific sectors that need to be encouraged. We could give sector after sector that needs to be rebuilt. There needs to be no further identification of the sectors that are in trouble in Ontario: sectors that are high technology, sectors where we have a large degree of imports, sectors that are high technology and provide skilled jobs.

We know those. Those have already been identified and we have raised them with the Treasurer time and time again.

For example, the auto parts sector: We had a $4-billion deficit in auto parts last year, which we all look after in Ontario. Those are skilled jobs, high-technology jobs. Obviously they are imports. It would relieve a lot of the economic problems in the Windsor area if the Treasurer would Canadianize and rebuild that particular sector. It is a crucial sector, and the Treasurer should be doing something about it. He does nothing except complain to Ottawa that we are not getting our fair share.

How long will he say the problem is Ottawa’s and not his own? He knows the problem will go on forever if he leaves it to those people in Ottawa to solve his problems in Ontario. They are preoccupied with repatriating the constitution rather than the economy. They are not going to worry about Ontario. When is the Treasurer going to wake up and realize that?

A second sector that needs to be rebuilt -- just so I can get some of the work load off his BILD program -- is the mining machinery sector. I know the Treasurer said in the estimates debate the other day that he understands mining machinery. He said he knew we were number one in the world in importing mining machinery, number two in the world in the consumption of mining machinery and number three in the world in the production of minerals. Imagine being number three in all the world in the production of minerals and number one in importing mining machinery.

What an outrageous situation, and yet the Treasurer does not a single thing about it. The Minister of Industry and Tourism put on a trade show in Sudbury where $40 million or $50 million worth of machinery was on display. That was his answer, just as the BILD program is the Treasurer’s answer. It is a sham. It is like the old pea under the shell game, but there is no pea under the shell. We are just moving around empty shells. That is fraudulent.

If one looks at mining machinery, there is a regional development component there for northern Ontario if only the Treasurer would use it. There is a component of highly skilled jobs. It is a high-technology area. Ontario alone had imports last year of about $175 million. There is enormous job creation potential there in the mining machinery area. Think of what it would do for communities such as Sault Ste. Marie, North Bay and Sudbury. To make it worse, a month or so ago, Jarvis Clark, one of the big companies that produces mining machinery in North Bay, decided it was going to expand. They cannot handle all the orders, they have tremendous export orders as well; and what do they do? They expand in Burlington, not in northern Ontario. One reason they did is that there is no regional economic development plan into which they could plug to help develop northern Ontario. There is nothing there.

9:50 p.m.

Regional development has to be a priority. There was a day when regional development was a priority of this government. There was a day when no budget would have been brought down without a special section for northern Ontario. There is not a word this time. They even talk about exploration and development in central Ontario, for heaven’s sake.

Another area that has an enormous amount of potential is the whole question of these massive energy projects, most of them out west, that are going to be taking place in the next 10 years. The opportunity for us to provide the equipment and machinery is awesome.

A report by the Canadian Institute for Economic Policy stated there is going to be a total of $67 billion worth of machinery and equipment required between 1980 and 1990, in just 10 years. There is absolutely no reason why we should not have a part of that.

There are two major categories, and I would like to quote very briefly from that report; they are talking about two new categories: “Projects that are new to Canadian and global experience. These will include oil sands and heavy oil, where Canada is already a world leader, frontier and offshore field development and the more promising of the renewable energy technologies. These sectors provide opportunities to develop an indigenous technology base with export potential. Maximizing Canadian participation from the start in these new markets will be vastly preferable to letting these opportunities slip into other hands.”

That is what is going to happen. Those will be opportunities we will lose as long as the Treasurer keeps laying down delaying tactics and smokescreens like BILD which will not address themselves immediately to the problems. They are not going to wait. Those projects are there now for the having but the Treasurer says he is going to develop a five-year plan. I never thought I would see the day when this Treasurer would talk about five-year plans.

Ontario has too much at stake. We cannot stand back and wait for Ottawa to develop a national investment strategy. That is what is needed so that we have a leverage with our resources to machinery. We have never had that. We never had it in Ontario, we never had it in this country at all; and that is what is necessary. Norway does it; Britain does it, very successfully; but not this country. I agree it should be a national policy, but we are not going to get it from those people in Ottawa. We are the industrial base; so we have to take the initiative here or we will lose it.

It is as simple as that. That is why I say we can turn our problems into tremendous opportunities and potential for developing this province. We are very optimistic about the future as long as we take action, but it is not going to happen on its own.

I know the Treasurer is very fond of the invisible hand out there in the marketplace, but that invisible hand is not doing what the Treasurer or any of us think it should do. We cannot wait for that invisible hand any more. It is a myth; it is a withered hand.

What I am trying to say to the Treasurer is that he cannot forever bemoan inaction on the part of the federal government. That is not an adequate action; it is downright dumb.

I get particularly offended at the Treasurer when he falls back on his free enterprise rhetoric. That is most offensive. One minute he is handing out grants to the private sector, and the next minute he is spewing forth his free enterprise rhetoric. It would be funny if it were not so irrelevant and if it were not so downright illogical. Most particularly, it would be funny if the Treasurer did not take it so seriously. It is not going to happen with the private sector; we have had all sorts of evidence of that.

I do not want to burden the Treasurer with too much statistics, but I want to give him a couple of examples of those energy investment potentials.

Between 1970 and 1980, a 10-year period, there has already been a lot of investment in energy-related fields, and there is going to be more. Statistics Canada is giving us figures every month of the year which tell us the problem, which lays it all out before us, and a person doesn’t have to be an economist to read the tables.

I would like to tell the Treasurer about just one area, imports, and what happened to imports of energy-related equipment between 1970 and 1980; for hydraulic turbines and parts, imports went from $2 million to $30 million; gas turbines, from $10 million to $26 million; well-drilling machinery, from $39 million to $300 million; petroleum and gas field production equipment, from $11 million to $96 million; valves, from $44 million to $101 million; fittings, from $33 million to $120 million; zirconium alloys, from $3.6 million to $13 million; diesel and semidiesel engines and parts, from $25 million to $133 million; and construction equipment, from $167 million to $721 million.

That is what happened with import increases on machinery and equipment that we could be supplying for our energy projects. Ontario could be supplying a lot of that but, oh no, the Treasurer stands back and thinks it is all going to be solved, and he lays down yet another smokescreen.

I am just saying we have the economic muscle and the political muscle in this province to do something about it. All we have lacked till now, and still lack, is the political will to get in there and mix it up and do something about it, and that is what the Treasurer has failed to do.

I heard the Treasurer read in his statement tonight, for example, that manufacturing investment intentions are up 44 per cent in 1980. Perhaps he will stop using that figure and, rather than talking about intentions, start talking about what is really happening. Manufacturing output is down seven per cent in 1980, and it is forecast to be down another one point something per cent in 1981. I will not tell the Treasurer which road is paved with good intentions, but the real world tells us that manufacturing output is down this year and is going to be down again next year; the Treasurer should stop using intention figures which really are not applicable.

I know that the Treasurer and the Minister of Industry and Tourism are very fond of talking about creating jobs in manufacturing, but there have been at least 10 times as many layoffs in Ontario this year as there have been jobs created. That is a sad commentary on what is going on in the province.

I have outlined just a few sectors that we could take a look at, and I did not even talk about housing. We have a real problem in rental accommodation and we have high unemployment in the residential construction trades. There is a beautiful tie-in there. But as long as the government stands back and does not do anything about that either, we are not going to solve that problem. I know the Treasurer is cutting the tax on building materials. I have no quarrel with that; I think that is a good suggestion. But it is not going to address itself directly to the rental accommodation problem in places like Metro Toronto, where we are flirting with a one per cent vacancy rate, which is virtually none. I can see the pressures coming from that side to remove rent review, using the spurious argument that rent review is causing the problem of supply for rental accommodation. What total nonsense that is. Why do they think we had rent review in the first place? There was no rent review when the shortage first occurred; so why are they blaming it now? It is total nonsense.

There are a number of serious gaps in this mini-budget tonight. One of them that fascinated me ties in with the new Board of Industrial Leadership and Development; I refer to the Treasurer’s statement that he is going to cancel the employment development fund program. I can recall how over the last two years the Treasurer bragged and boasted about how EDF was the cornerstone of their economic development program in Ontario. Every time we would say, “You are not doing enough,” they would say, “We have the EDF program.” That is what they told us. Only a week ago, in my leadoff, I was asking the Treasurer in his estimates about EDF grants. He could not say enough good things about them, how they had saved the pulp and paper industry and how they had stimulated the auto sector. Tonight he pulls the rug on it.

10 p.m.

Is there no consistency in the Treasurer at all? One has to wonder what happened. Was it the Lakehead report? Did the Lakehead report shake him up? Is that why he said there are too many questions here? Was it his free-enterprise philosophy that said we should not be giving out these grants? We do not know, do we? Was it the feeling, as expressed in that report, that those who need it were not getting it?

The cancellation of the sales tax on building materials is something of which we approve. This party would be much happier, however, if the Treasurer had made a commitment to nonprofit housing and co-op housing where there is a tremendous opportunity to take some of the pressures off rental accommodation in places like Metro Toronto. That is where the thrust should be. Once again, it would create jobs and relieve some of the high unemployment in the residential building trades, professions and jobs. As I say, it would also take the pressure off rental accommodation.

The Treasurer used some rather strange language when he talked about protecting people on low incomes. He said: “Unlike the Liberal government in Ottawa, we intend to respect social priorities and values while keeping our own fiscal industrial priorities in clear focus. Let others tax those who can least afford it, let others acquiesce to inequity and economic injustice.”

That is pretty hard to swallow, coming from a government that has taxed people in this province more heavily than any other province in Canada. Personal taxes in Ontario are higher than in any other province. If we add together provincial income tax and Ontario health insurance plan payments and subtract from that tax rebates and credits, we end up with Ontario being the highest-taxed province in all of Canada for people in low- and middle-income brackets -- not the high-income people, but low- and middle-income brackets. That is assuming a constant property tax in every province. There is no doubt but that we are overtaxed. When the Treasurer says that and, at the same time, refuses to do anything for people who need help the most, it really is hypocritical. The same day the Minister of Labour stands in his place and says he is not going to raise the minimum wage.

Hon. Mr. Elgie: I didn’t say that.

Mr. Laughren: Yes, he did. We have gone 22 months now with no increase in the minimum wage, and the Minister of Labour would make no commitment today.

Hon. Mr. Elgie: I didn’t say that.

Mr. Laughren: Did he make a commitment today to raise the minimum wage? No. He made no commitment.

Hon. Mr. Elgie: Don’t distort it.

Mr. Laughren: Make it now. Here is the opportunity.

Hon. Mr. Elgie: Carry on. I didn’t say that today, and the member knows it.

Mr. Laughren: Yes, I will carry on. It is an absolute disgrace for Ontario to have the lowest minimum wage in all Canada. There is simply no excuse for that. This budget provides no direct relief for low-income people. At the same time as we have the lowest minimum wage, we have the heaviest tax burden on low- and middle-income people. Put all those things together and it makes the Treasurer’s words ring pretty hollow. That is simply not playing according to the rules.

I searched through the budget document for a statement on day care. There has been an enormous amount of pressure applied to the government throughout Metro Toronto and other communities to provide adequate day care in Ontario. If my memory serves me correctly, the number of places required in Metro Toronto just to ease the most critical burden was 1,400, and then a compromise was worked out by the Metro chairman for 500 places for Metro Toronto alone. What the Treasurer has said tonight is that he is going to provide 500 extra places for all of Ontario.

It is interesting that we get from this government no policies at all to provide any kind of economic justice for women, no commitment to equal pay for work of equal value, no commitment to day care, no real affirmative action program on the part of the government, none.

Is it not interesting that when this party introduced three bills tied in with economic rights, the government blocked them. One dealt with full employment and the government blocked it; they would not even let it come to a vote. When we dealt with pension rights and job security, the government blocked it and would not even let it come to a vote. Today, when we tried to bring in a bill that would provide a modicum of economic justice for women, the government blocked it and would not let that come for a vote either. What kind of commitment is that to economic justice? When I see the Provincial Secretary for Social Development (Mrs. Birch) standing there to block a bill like that, it makes me wonder about the priorities over there.

The Treasurer has done this province an injustice with his failure to provide an adequate number of day care places in the province, and that is a very serious injustice. I believe women now constitute about 40 per cent of the work force in the province, and the government does not seem to have woken up to that. They do not seem to understand the kind of needs and pressures that puts on people; so they dawdle on and throw $1 million to day care when the demand is so much greater.

It is not as though there were not opportunities to raise more money. Some of our programs we talk about cost money. Most of the ones I have talked about tonight would create wealth so that we could get on with the business of distributing it in a more equitable manner. We believe very strongly that a government has to create wealth before it can distribute it. What this government fails to understand is that, unless they get busy and start creating the wealth by rebuilding those sectors, we are not going to be able to redistribute it fairly.

It is no wonder the government has all these pressures on social services and educational services, because the Treasurer will not do anything about creating the wealth that is necessary. The Conservative backbenchers sitting there in their grey splendour would have a much easier life and would get along much better with their constituents if they could convince the Treasurer of what is needed. We need meaningful job creation projects out there that would create wealth and ease the burden on all those social, health and educational services that have been cut back. The Treasurer can talk all he likes about not cutting back, but there have been very serious cutbacks in social, health and educational services.

One of the areas I hope the Treasurer will think about -- there is no mention of it in his budget -- is the whole question of interest rates. Right now, interest rates on mortgages are, I believe, about two per cent higher than they were a year ago at this time and there are predictions that they are going to go higher. Surely the government should have a mechanism to monitor defaults and foreclosures.

We presented a package to the government last spring which could relieve the problem. It would have cost around $20 million I believe, and it was income-related. It was a sensible program, it was not particularly expensive, and it would solve the most pressing problems. The Treasurer should take another look at our proposals, because he may have to implement those in the not-too-distant future.

Another area that bothers me about this budget is that there is nothing at all in it for northern Ontario. I said earlier there was a day when no Treasurer would have brought in a budget that did not make some concessions to northern Ontario, that did not recognize the particular problems that are faced in northern Ontario. This budget does not talk about freight rates which cause problems in northern Ontario; it does not talk about further processing of minerals in northern Ontario; it does not talk about the opportunities for mining machinery investment in northern Ontario; it does not talk about the whole problem of iron development in northern Ontario.

10:10 p.m.

There is nothing at all about the north. There was a day when no Tory government would have dared to do that. But lately the Treasurer seems to think the north is just fine and he does not need to pay any attention to it. That is simply not right. Not only that, but also there is still no food terminal for Timmins.

Mr. Foulds: Alan Pope should resign.

Mr. Laughren: The member for Cochrane South (Hon. Mr. Pope) is the minister without a food terminal. I want to see him on television and radio in Timmins explaining why there is still no food terminal in Timmins. He promised one in 1977. He said, “You elect me and there will be a food terminal.” Here we are, heading for 1981, and there is still no food terminal in Timmins. We know what happened. He complained loudly from the back benches, and the Premier said, “Come here, Alan.”

Mr. Hennessy: He gave him a cabinet post.

Mr. Laughren: He gave him a cabinet post. Exactly. The member for Fort William (Mr. Hennessy) understands how it works. The Premier said: “Come here, Alan. You are in the cabinet now; so shut up.” That is exactly what happened.

Mr. Foulds: And that is what Alan Pope has done.

Mr. Laughren: That is right: I hope the people in Timmins start writing letters to him saying: “Where is that food terminal that was going to distribute goods more efficiently in northeastern Ontario? Timmins needs a food terminal.” I have not heard a word from the member for Cochrane South.

I have talked about the food terminal and about northern Ontario, mentioning specific cities, but I am serious when I say there was a day when this government would not dare to bring in a budget that did not deal with regional development. When they were talk in about southwestern Ontario, there was enormous potential in southwestern Ontario with the auto parts industry and food processing. There is opportunity all over this province, but the Treasurer does not see it as a regional development problem. I have been here nine years, but it is only in the last couple of years -- as a matter of fact, since the member for Muskoka (Mr. F. S. Miller) became Treasurer -- that we have stopped hearing about regional development and about northern Ontario.

Mr. Makarchuk: Or eastern Ontario.

Mr. Laughren: Or eastern Ontario; thank you.

Mr. Sterling: Have you ever heard of the Eastern Ontario Development Corporation?

Mr. Laughren: I just talked about eastern Ontario, hut I never hear the Treasurer. If the Treasurer were serious about economic development in eastern Ontario, he would have made a specific commitment here tonight to develop the Ottawa area as the Silicone Valley of the north so we can have a high-technology electronic area in this province second to none.

Mr. Sterling: He has already made a commitment.

Mr. Laughren: No. He made no commitment to regional economic development at all. All the Treasurer did was lay down a delaying tactic. That is all he did, and the member for Carleton-Granville (Mr. Sterling) knows it.

Mr. Foulds: And that member swallowed it.

Mr. Laughren: There is another area I am surprised the Treasurer made no mention of at all. It has to do with farming machinery and implements. It is incredible in this province we did not have a reduction or elimination in the sales tax on farm machinery and equipment.

Mr. Makarchuk: Right on.

Mr. Laughren: That inspired suggestion came from the member for Brantford. He is not being parochial. He understands the needs of all of Ontario.

In another area, it would not have cost very much money but it would have been a very nice gesture if the Treasurer had raised the exemption for sales tax on footwear. It stands at $30 now. It should be raised to at least $50, when one considers the price particularly of outer footwear for the winter. The sales tax should be removed on that.

In conclusion, we welcome the tax cuts for their short-term value. The sales taxes were regressive to start with and this will provide a short-term stimulus. I guess the BILD program is this government’s admission that planning may be necessary. I am amazed that the Treasurer is the one who brought in this statement on the BILD program. I have no illusions whatsoever but that it is a delaying tactic. The only delaying tactic he knew he could get away with was something that addressed itself to long-term structural problems in Ontario; so he called it a BILD program.

He knows he will have to take no specific action at all until after next spring, when the election will be behind us. We know that and we understand the cynicism of that act. It is also an indication that the Treasurer’s faith in the private sector is somewhat diminished. There was a day when he would not have touched that. As I said earlier, we regard this budget as one that does not do anyone any harm, but it sure does not help the people and the parts of the economy that need it the most.

TELEVISION CAMERAS

Mr. Martel: On a point of privilege, Mr. Speaker: This is the second occasion on which the television cameras have come into this Legislature. In fact, they allow the government side with all its pomp to present to the people of Ontario the government’s position on the economy. The second that occurs and is delivered, they then shut the cameras down when the critics for the Liberal Party and my party are responding, whether it be in the appropriate budget time or a week later, and those responses are not delivered to the people of Ontario.

It is time this House said to the media, “You damned well do it for all three or you do not do it for any.” I am getting increasingly frustrated at the television people, whom we allow in here. It is a privilege for them to be in this Legislature, as a result of the Morrow report in 1975 and 1976, which you helped to bring about as Speaker in this Legislature. But the bias shown by the media and the disrespect they show to the two opposition parties are unacceptable any longer.

Mr. Speaker, I ask you, in conjunction with the House leaders, to ensure that it does not occur again. If they are not prepared to televise my critic and the Liberal critic, in addition to the Treasurer, then they are out on this occasion as far as I am concerned. I will do everything I know to obstruct them, because this will not go on again as long as I am here. I ask you, Mr. Speaker, to make sure there is some fairness to all political parties in the presentation of the budget and the responses; otherwise it is for nought. I ask that you take this matter into consideration immediately.

Mr. Speaker: I want to remind the honourable member that the guidelines that were laid down to allow the electronic media in here were done on the basis of the Speaker’s ad hoc committee that was set up many years ago before I assumed the duties I now hold. I want to remind the member that I am a servant of the House. If the House wishes to take the kind of action that you think appropriate, it is up to the House to direct the Speaker as to what action that should be

10:20 p.m.

Mr. Martel: I would ask the government House leader to respond. I think it is incumbent upon the government House leader to indicate to this Legislature that he is in agreement that, if we are going to have the Treasurer televised -- and I have no objection to it -- it is incumbent on the media to give the same opportunity to the Liberal Party and the New Democratic Party. Otherwise, there is a bias that is unacceptable as far as I am concerned. I hope the government House leader will agree that we have to expand the coverage of what goes on in the Legislature so people of this province understand what is going on.

Hon. Mr. Wells: Mr. Speaker, I think the wisest thing to do would be for you to convene at your convenience a meeting of this ad hoc committee so we could talk about this. I do not disagree with the criticisms of the member, but I do not think we should take any hasty action to remove television cameras tonight. Quite frankly, I was surprised when I saw them in here tonight. I do not recall being made aware that the cameras were going to be in here tonight for this particular statement.

There is a normal procedure for cameras to be provided during question period and any other time. The special cameras are here. I do not know under what agreements they are here. Perhaps we should have a meeting and talk about that again. I think we did talk about television in a very good way and set some good ground rules for the Confederation debate. Perhaps we should get that committee together again and take a look at this and see what can be done.

Mr. Breaugh: Mr. Speaker, next Thursday morning the members’ services committee and the procedural affairs committee are attempting to hold a joint meeting. Both committees have matters relating to the television coverage of proceedings in this House on their agendas.

It is my understanding that there had been agreement reached previously on how the cameras would enter the House and how they would function and precedents were set about the kind of coverage that would go on during the coverage of the Confederation debate. I did notice this evening the precedent that was set in terms of the kind of shots that would be taken, the precedent that was so carefully laid down during the Confederation debate, was not followed this evening.

It would be our pleasure for those two committees to serve in an advisory capacity to the House and perhaps to make a report to the House if that would be the wish.

Mr. Nixon; Mr. Speaker, just before you respond, perhaps I could ask you, who did give permission for the special lights and the camera positions to be put in?

The point made by the government House leader is valid, that by agreement television can come in any time they want, turn the lights on any time they want and take pictures of whatever they want, but this stuff of course works a special hardship on the members who are here.

If they are going to go to all this elaborate trouble, they should televise all participants. I remember, when this first started, that was what was done. The idea was that the budget of the province would be televised and the full hour-long responses of both opposition parties would be televised. No matter how excellent the response -- the member for York South (Mr. MacDonald) remembers just how excellent they were -- I can say that there is a certain feature of diminishing returns associated with it, because the only letters I got about my response were giving me hell for pre-empting The Edge of Night. There are intrinsic problems here which even the committees meeting together might not be able to solve.

Mr. Speaker: To answer directly the question raised by the member for Brant-Oxford-Norfolk (Mr. Nixon), I was not asked directly whether permission would be given for the extra lighting or the two camera placements, one behind the government benches and one behind the opposition benches. I was notified by the Sergeant at Arms earlier today that they were being installed and that they had talked to the director of administration, who normally monitors the camera positions in keeping with the guidelines that were laid down by the ad hoc committee on radio and television.

I appreciate the sentiments expressed by all members who have spoken. I was aware that there was to be a joint meeting of the standing committees on procedural affairs and members’ services. We have a file on that in the Speaker’s office. It will be made available to the chairmen of those two committees so it may assist them in their deliberations.

Perhaps, rather than convening the ad hoc committee, we could await the findings or any recommendations that might come forward from the joint committee that the member for Oshawa referred to earlier. I make the commitment to co-operate in any way possible.

Hon. Mr. Wells: Mr. Speaker, we had a member who wished a late show.

Mr. Speaker: By agreement of both parties, that was deferred until next Thursday.

The House adjourned at 10:26 p.m.