32nd Parliament, 1st Session






















The House met at 10:04 a.m.



Mr. Martel: Mr. Speaker, I want to draw your attention to the Votes and Proceedings for yesterday with respect to the private members' hour. Those of us who were here yesterday will recall that the vote was 38 for the ayes and 37 for the nays.

Mr. Speaker: Order. This has already been spotted and recognized, and I was going to make a statement on it.

I would like to advise all the members that, owing to a printing error in the Votes and Proceedings of yesterday, October 15, the division on the motion for second reading of Bill 132 shows that the ayes are 37 and the nays are 37. The printing error is that Mr. Williams's name has been shown in the ayes instead of Mr. Wildman and Mr. Wrye.

This error will be corrected in the journals, and an erratum will be published in today's Votes and Proceedings.


Hon. Mr. Bennett: Mr. Speaker, as a result of a request of a member of the Liberal Party yesterday in relationship to a remark I made using the terminology "lilywhite," which seems to offend some, to keep the esprit de corps and decorum in this House, without the request of the Speaker, I will withdraw that remark.

Hon. Mr. Norton: Mr. Speaker, during the course of question period yesterday afternoon, in the heat of an exchange with the member for Hamilton Mountain (Mr. Charlton) I believe I referred to him as a "twerp." That, as I understand it, is a word that is defined as meaning "an insignificant or objectionable individual."

I must say that I do not feel any member of this Legislature is insignificant and, out of respect for the preservation of decorum in this House and great respect for the chair, I withdraw that remark.



Hon. Mr. Snow: Mr. Speaker, as you may know, public debate over truck safety in this province has intensified over the last few months, and it is an increasingly acrimonious debate.

As evidence of the strongly divided feelings on this issue, I would like to cite a couple of brief comments from two well-known trade magazines. The first was published in the April edition of Canadian Motorist. I quote:

"As our dwarfish cars continue to shrink ... this most dangerous of commercial transportation modes will be more and more responsible for the carnage that follows carelessness, a split second of inattention ... or a drink too many."

Rolf Lockwood, the editor of a popular magazine for truckers, responds to this charge in the May/June issue of Driver Owner. In his editorial he says:

"That magazine and its opinion don't deserve attention ... so I'll let it go by saying that the author and his editors got things wrong. Very wrong. The truth is that truckers are not as careless, and trucks not as dangerous, as the critics claim."

The truth of the matter probably lies somewhere in between these two extreme positions. But there are no credible and reliable data to confirm or deny these charges and counter-charges.

With this kind of public dialogue, reinforced by extensive media coverage of every spectacular truck accident, a growing public concern about the standards for trucks and their drivers comes as no surprise.

As a member of the Legislature who travels the Queen Elizabeth Way each day, one of the busiest truck routes in the province, I can sympathize with motorists, particularly those driving small, energy-efficient vehicles.

At the same time, I can sympathize with truckers who feel the allegations of carelessness are unjust, for I know members of the trucking industry who are very conscious of the need for highway safety. As a matter of fact, there are truckers out there who feel very strongly that some of our existing truck safety regulations are discriminatory.

I believe we have to get to the root of this problem, one way or another. We have to determine whether truck safety is a real or perceived problem in this province. It is a vitally important issue to resolve in terms of both this government's commitment to highway safety and our commitment to economic growth and stability.

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As we all know, trucks play a very key role in the transportation of goods in this province, and we want them to continue to make this contribution as safely as is humanly possible.

I have commissioned a comprehensive study to investigate and report back on the status of truck safety in Ontario. In doing so, we will not only resolve the current debate but also fill the gaps left by the select committee on highway safety, undertaken by this House in 1977. That committee did not have time to conduct the kind of in-depth investigation necessary for a complete understanding of the truck safety issue.

I am therefore pleased to announce that Dr. Robert Uffen of Queen's University will conduct the Ontario Commission on Truck Safety. Dr. Uffen is not an expert in the trucking field and was deliberately chosen for that reason. We do not want anyone conducting this study, particularly in the middle of a heated public debate, who has an axe to grind. I believe Dr. Uffen, who is seated in your gallery this morning, Mr. Speaker, fits that bill. I ask Dr. Uffen to stand.

I have talked with him at length and was most impressed by his strong, analytical mind and his keen sense of fairness, which are attributes that will help him maintain public credibility while tackling this difficult assignment.

He has a long list of credentials for the job. In addition to his scholarly duties at Queen's University, Dr. Uffen is a member of the Ontario Royal Commission on Health and Safety Arising from the Use of Asbestos in Ontario. He has also served as a member of the board of directors of Ontario Hydro, including four years as vice-chairman.

Dr. Uffen has also served as chief science adviser to the federal cabinet and has been a member of such distinguished organizations as the National Research Council, the Defence Research Board and the Council of Regents for Colleges of Applied Arts and Technology in Ontario.

The commission will consider such areas as driver training, the classified driver licensing system, vehicle inspections and vehicle length and configuration, and will generally define public and industry expectations. In its final stage, Dr. Uffen will summarize the current state of truck safety in Ontario and will report his findings with emphasis on practical solutions to identified real problems.

I expect that Dr. Uffen will submit his final report to me before the end of 1982. I am confident that Dr. Uffen's investigation will provide us with the facts to satisfy our own and the public's concern on this important issue.


Hon. Mr. Welch: Mr. Speaker, today I am pleased to table for the honourable members a synopsis of the report of the Ontario Hydrogen Energy Task Force. This synopsis contains the executive summary and recommendations of the task force. The several volumes of the report itself are being printed and will be released in the near future.

As you and members of the assembly are aware, Mr. Speaker, it was on February 25 last year that I announced the formation of the task force under the chairmanship of Dr. Arthur C. Johnson of York University, who I am happy to say is here today.

Dr. Johnson and the 10 other members of the task force were assigned to determine the potential role of hydrogen in Ontario's energy future. Their report confirms my belief that this province is in a strong position to become a world leader in the development of hydrogen as a fuel.

As the honourable members may know, there are two preferred ways to make hydrogen in the province. The most common method is to extract hydrogen from a hydrocarbon such as natural gas. The other method, and currently the most expensive, involves electrolysis: using electricity to separate water into its component parts of hydrogen and oxygen.

Hydrogen is now used primarily in oil refineries and in the production of ammonia. It is also used in the manufacture of certain metals, drugs, chemicals, plastics and foods. As those interested in the American space program know, hydrogen powered the space shuttle Columbia.

As the task force points out, we do not have much oil and gas in this province, but we do have lots of electricity from hydro and nuclear power. The cost of electricity from these sources is going down in relation to the cost of energy from fossil fuels.

This, coupled with the success of our Candu reactors, our substantial supply of uranium and our sophisticated manufacturing industries, puts Ontario in an enviable position to expand our use of hydrogen.

We would be building on an energy source indigenous to this province of ours.

In fact, this task force report says that hydrogen produced in Ontario through the electrolysis of water could be competitive as a feedstock within 10 to 20 years.

The report suggests that the first use of hydrogen made here with electricity would be to replace the more expensive hydrogen from natural gas being used in oil refineries.

But the task force report notes that if hydrogen is to make the maximum impact in this province it has to be used as a transportation fuel. This is important, because Ontario uses about one third of the crude oil consumed in Canada, and about one half of that is used in transportation.

According to the report, long-distance buses and transport trucks will be the most likely vehicles to use hydrogen. It could be used to fuel trains, ships and airplanes. It also could be used in cars once a suitable small-scale, on-board storage system has been developed.

The honourable members will recall that in June of this year I announced that a contract had been signed between the Ministry of Energy and the Urban Transportation Development Corporation. The five-year, $6.2-million contract is to develop hydrogen storage and fuel systems that will be used to equip two transit buses. This program will provide us with some of the experience we need to move into the hydrogen era in transportation.

This contract was the first step in my ministry's five-year $75 million program to develop alternative transportation fuels. As the honourable members know, work is being done to develop other fuels, such as propane, methanol, ethanol and compressed natural gas, which will be medium-term alternatives to gasoline until hydrogen fuel is commercially viable.

Last January, I suggested to the federal government that it co-operate with us to set up a hydrogen research centre in the province where scientists could begin to develop the technology necessary to produce and utilize hydrogen on a greater scale.

I am very pleased to see that this report supports my proposal that an institute be established here soon. I am also pleased to report that plans to this effect are under way and that we hope to make an announcement about a hydrogen institute in the very near future.

We think such an institute will attract experts from around the world whose work will put Ontario in the lead in developing the systems to produce, distribute and utilize this new fuel. Their research will help us develop ideas about how hydrogen should be stored, moved and handled, and may help create new designs for hydrogen engines and fuel cells.


Hon. Mr. Welch: Mr. Speaker, I encourage all members of this Legislature to read this synopsis and, later, the report itself. It might be wise to read it even before the interjections are volunteered.

Mr. Foulds: Why? The minister did not read it before he read the statement.

Hon. Mr. Welch: What does the member think I was doing last evening? I was reading it from cover to cover.

We could be at the beginning of the development of a new form of energy as significant as that of electricity.

At this time, may I extend my thanks to Dr. Johnson and the other members of the task force for the excellent work they have put into this report.

My ministry staff will be studying this document with a great deal of interest to decide how best to implement the various recommendations. I will be very pleased to keep the honourable members up to date with respect to our progress.


Hon. Mr. McCaffrey: Mr. Speaker, earlier this week all honourable members found on their desks an invitation from my colleague the Chairman of Management Board of Cabinet (Mr. McCague). In his absence, I would like to speak briefly to that invitation.

On November 3 and 4, the Management Board of Cabinet is hosting an event called Performance '81, which is a showcase designed to help management staff meet the demands of the 1980s.

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We are all very much aware of the changing environment around us. Issues such as inflation, energy costs, changing social values and the technology explosion impact on all of us and in particular on the government in the management of its day-to-day and longer-term affairs.

In order to help our managers meet the demands of the 1980s and to further improve management across the entire public service, this government, spearheaded by Management Board, has undertaken several initiatives. These include an expanded role for internal audit, a management-by-results improvement program and the establishment of a management standards project.

Performance '81 will focus and elaborate on many of these initiatives. We want all members to feel free to attend any part of this two-day event, as I am sure they will learn a lot more about how well our government is managed and how we are constantly seeking ways and means even to improve on that. Members of the press gallery will be receiving notices of this event as well.

The invitations, addressed to all honourable members, asked if they would like to join us for a pre-conference breakfast session at 8 a.m. on Tuesday, November 3. I personally hope many of the members will see their way clear to do so, as that session will help set Performance '81 in the context of general management improvement initiatives under way across this entire government.



Mr. Smith: I have a question for the Minister of the Environment, Mr. Speaker. The minister has claimed publicly that none of the information in the report on Niagara River water quality -- The Ravished River is the title of the report -- was a surprise to his ministry. He also says he is prepared to take legal action to stop the pollution going on on the American side of the Niagara River.

If this information was well known to his ministry in the past, can the minister please explain to us why he has not acted before now? Is he not afraid he is going to give the impression that only when matters become public does his ministry become interested in protecting its backside, and as long as the information is there and not public there is no need to take strong public positions?

Hon. Mr. Norton: Mr. Speaker, I think the honourable Leader of the Opposition is reading something into my statement that was not intended. Certainly I did say, and I will reiterate, that on the basis of our review of that document there would appear to be almost no new original information. Any time I have been asked for this, I have tried to qualify it by noting an exception: there do appear to be some new samples of sediment and leachate from some dump sites. But that did not significantly add to the body of knowledge, because we had certainly done testing of some of those sediments as well.

I think the reference to the possibility of pursuing legal action is again a legitimate position, especially in the context of all else failing in terms of present co-operative efforts that are under way. For example, we have a group composed of representatives of the federal government in Canada, the Ontario government, the New York state government and the Environmental Protection Agency in the United States which is engaged in very detailed monitoring and documentation of the situation in the Niagara River at the present time.

As I have indicated, there is a forthcoming meeting involving the Premier and Governor Carey, the commissioner of the Department of Environmental Conservation in New York state and myself. However, I did say, and I will reiterate, that if there are no signs of very significant progress we will explore legal action.

I have asked my staff to review the American legislation and to seek whatever advice is necessary on those avenues that would be open to us. There are some that come to mind immediately, such as the opportunity to intervene when the existing permits for some of these companies come up for review in the near future. I presume there will be other avenues as well, although I will await a review of the American legislation before knowing precisely what they are.

Mr. Smith: My colleague the member for Niagara Falls (Mr. Kerrio) accused the minister the other day of being negligent -- and I think he used even stronger terms than that -- and the minister's answer to that was that he had not even seen the document yet and therefore presumably could not have been expected to act since he was in ignorance of what it contained.

Now that the minister admits the document contained nothing of real substance that he did not have as knowledge in his ministry and he can no longer plead ignorance, I would suggest that negligence, once again, becomes the only possible thing he can plead.

I ask the minister in this instance to recognize that if he did not take or even talk about taking legal action before, when he did have the information, then either he is grandstanding now because the matter is public or he has been negligent up until now. Which one is it?

Hon. Mr. Norton: It is neither. If the Leader of the Opposition would read his own question and the preamble to that question in Hansard, he might have some difficulty understanding his own logic.

First of all, how does he know what I have or have not discussed before? For example, my comment yesterday was in response to a specific question. I was not grandstanding. I was asked if we would consider the possibility of legal action, and I very thoughtfully and methodically explained our position. The Leader of the Opposition should not accuse me of grandstanding under those circumstances. If he had the wit to ask me that question in the House, he might have received the same answer.

Mr. Cassidy: Mr. Speaker, given that a water supply to Niagara-on-the-Lake is now being built so that the people there will not have to drink water from the Niagara River, and given that the member for Brock (Mr. Welch) is drinking bottled water, I understand, so that he does not have to get water from Niagara-on-the- Lake's present water supply, is the Ministry of the Environment prepared to make the same facilities available to the less affluent people of Niagara-on-the-Lake so they too can avoid what is in the Niagara River until their new water supply is built?

Hon. Mr. Norton: Mr. Speaker, I can assure the honourable member, with a fair degree of certainty, that the member for Brock, his wife and his family do not drink bottled water except possibly on occasions when they mix it with something else.

Mr. Kerrio: Mr. Speaker, now that the minister has taken the stand that he has, how can he explain the fact that he and his predecessor have constantly refused to appear on the SCA issue, the Hyde Park dump issue and the treatment plant issue in Niagara Falls, New York? We have had to drag the minister kicking and screaming over there to make his objections known, and at this late date he has now decided that he is going to become involved.

Is the minister going to tell us now in this assembly that he is going to send representation over there to object strenuously to what the Americans are doing and look into the involvement of his own ministry with the control orders and plants on our side? I wonder if one of the reasons he might have hesitated is that we do not have that good a record over here.

Hon. Mr. Norton: Mr. Speaker, I will not grandstand on this issue. I will continue to approach it seriously and thoughtfully. The honourable member says we have been dragged kicking and screaming. That is nonsense. In the hearings that have been under way in New York state, we have had three staff members there on a daily basis monitoring those hearings. I have also indicated -- and I am not sure if the member has asked me this before, but others have -- that when the hearings on the SCA relaxations are held later this fall, we will also have staff there to monitor.

Mr. Kerrio: They are polluting our river right now.

Hon. Mr. Norton: But the fact of the matter is that when we intervene it is critically important that we be able to do so on the basis of very sound scientific information. There is not much point in intervening if, on the basis of existing information, we do not have a strong foundation for objection.

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We are monitoring very carefully what is going on, but it seems to me that is a different matter from what I was suggesting when the member's leader asked me a question about the possibility of legal interventions at a time when existing permits for the dumping of effluent are coming up for review. Either the extension of those or their relaxation would be something in which we would very seriously consider intervention, but we would only do it if we had a sound foundation. If one were to rant and rave down there the way the member opposite sometimes does here --


Mr. Speaker: Order. Order. A new question from the Leader of the Opposition.

Mr. Smith: The Minister of Energy (Mr. Welch) went as a private member himself once to the SCA hearing.

Hon. Mr. Welch: I live there --

Mr. Smith: Yes, indeed, he was.

Hon. Mr. Welch: -- and I think the member opposite should be more responsible to those people, to assure them that their water is all right.

Mr. Smith: Tell the minister about it.

Mr. Speaker: The member for Lincoln has not been asked a question at this point.

Mr. Smith: Brock. Brock.

Hon. Mr. Welch: I am not the member for Lincoln, I am the member for Brock.

Mr. Speaker: I am sorry.


Mr. Smith: Do you see what drinking that water does to you, Mr. Speaker?

Mr. Speaker: I thought the area was noted for producing other beverages.

Mr. Smith: I do not drink from the same bottle, I am afraid.



Mr. Smith: Mr. Speaker, I have another question for the Minister of the Environment with respect to the Felske report on Inco's capacity to clean up by 1985 to below 1,000 metric tons of sulphur dioxide emission a day.

Has the minister been contacted by agents of the United States government who called my office and asked me for a copy of that report? I told the people from the American consulate, who were acting on behalf of the American embassy, that I was not in a position to give them the report, since it had been prepared for the Minister of the Environment, but I recommended that they might want to contact his office for the report.

Has the minister's office been contacted for a copy of the Felske report? And if it will be contacted -- if it has not already been contacted -- would it be the minister's intention to give the United States government a copy of that report?

Hon. Mr. Norton: Mr. Speaker, to the best of my knowledge, there has been no such request received by my office. I could check and see whether they might have contacted the office this morning, but I am not aware of it at this point.

When the member opposite asked about the Felske report the other day in the House, I said I had not seen it, and I had not at that time. He had the impression somehow that it was being kept under cover or under lock and key or hidden on my desk or something -- and it is possible sometimes, because of the condition that the surface of my desk gets into.

Nevertheless, that report was commissioned, going back into last year, I believe, before my coming to the ministry. One of the purposes of its being commissioned was so that it could be provided to the Ontario-Canada task force, which is looking at options in terms of technology that might be pursued with Inco, Falconbridge and other smelting operations. That is where it is.

The report has been transmitted to the federal-provincial task force at this point. And it is not secret; there are members of the public on that task force who are not government employees, and it will be part of their recommendations, which I expect will be made by early 1982.

If I do receive such a request from the American consulate, certainly I will give that very serious consideration.

Mr. Smith: I asked if the minister was going to give them the report. He says he will.

An hon. member: It is under consideration.

Mr. Smith: I did not ask for consideration.

Hon. Mr. Norton: I have not received the request, to the best of my knowledge. I have no interest in keeping that report or anything else secret --

Mr. Speaker: You have already answered that question.

Mr. Smith: Fine. If the minister is going to give that report to the Americans, he must surely realize that the Americans can read, and unlike the minister's chief advisers, they are actually interested in the contents of the report and will not keep it from their own minister the way his advisers kept it from him.

I would ask the minister what counterarguments he could give the Americans. They will state plainly upon reading that report that he could have asked Inco to come down by 1985 to between 700 and 800 metric tons of emissions a day with known available technology -- without drastically hurting the company, without costing any jobs, and increasing the efficiency of the company in the long run. What counterarguments will he give to the Americans when they ask why Ontario did not do that?

Hon. Mr. Norton: I have no intention of making any counterarguments. The fact of the matter is the present order to which Inco is subject runs until next year. If the member will recall from reading the report, if he has read it, he will understand that Felske, as I recall, recommends that, if action is commenced in 1982 and if that course of action is pursued, the flash furnace could be in place and operating by 1985.

That is still within the realm of possibility. When the task force has evaluated that technology along with other technology, and makes some recommendations to us and the federal government on what is the most effective way in which to approach further abatement, that may well be the course of action that is taken.

But I am not now going to stand here and say absolutely it will be a flash furnace when we have a group of experts at the federal and provincial levels, and people from the public, looking at this technology and commissioning reports on other technologies. From these they will make recommendations as to the best.

The member might wish to operate that way if he were in a position where he bore the responsibilities I have -- not weighing alternatives, not looking for the best alternatives, but just grasping the first thing that comes along, saying, "That is going to be it." That is not the way I operate. I am looking for the best and most effective way in which to reduce our emissions in Ontario.

Mr. Martel: A supplementary question, Mr. Speaker: The only thing they have done so far is to put up a superstack. In 1973-74 Inco indicated it had the technology and it was merely a question of money to make the necessary improvements. Why is it that in 1974 and 1975 Inco was allowed to take the money it had in reserve to purchase ESB in the United States rather than build a new smelter in Sudbury and, in that period of time, the orders which were imposed were watered down? When is the minister going to get serious about the acid rain problem from Inco?

Hon. Mr. Norton: Mr. Speaker, I am serious and I always have been serious about that subject. We will continue to be serious about it and do the very best we can. I am afraid I have not been in this House or at Queen's Park as long as the member has and I do not know exactly what happened in 1972.

Mr. Kerrio: A supplementary question, Mr. Speaker: Does the minister now think he has done irreparable damage to the negotiations in Washington because we have not been completely honest with the Americans? Is that not going to give them every reason in the world not to comply with his request and the request of the federal government?

Hon. Mr. Norton: I do not know what the member's suggestion is that we have not been completely honest. We have been completely honest in our dealings with the Americans and continue to be.

Mr. Kerrio: They were not told this.

Mr. Smith: You said you were doing all you could at Inco and you were not.

Hon. Mr. Norton: Oh, malarkey. Calm down. I do not think I will have to retract that one. We have been open and honest with the Americans in terms of what we have achieved and orders we have in place and what we will achieve by the end of this decade.

Mr. Kerrio: That is not what they are saying now.

Hon. Mr. Norton: Of course that is not what they are saying. They hear people like the member who for political advantage are trying to undermine the integrity of the very strong position that Ontario and Canada have in these negotiations.

10:40 a.m.

Mr. Smith: I took my position a year and a half ago and you know that.

Hon. Mr. Norton: Sure, your loyalties are all south of the border.

Mr. Smith: I stand on a point of privilege, Mr. Speaker. The minister has just said that my loyalties are south of the border. I ask him to withdraw that contemptible comment. Furthermore I ask him to be a man and recognize that I took the position that there was enough information available a year and a half ago to say Inco could have been brought under a control order of under 1,000 tons by 1985. This is not a recent position.

For a man who claims to be waging his number one war against acid rain, does he not think it is pretty shoddy that he did not even know of this report that was available for more than a year? I ask him to withdraw the comment about where my loyalties lie. My loyalties are as leader of Her Majesty's loyal opposition.

Hon. Mr. Norton: Mr. Speaker, the honourable member did not ask me which border I meant; I might have meant Halton-Burlington, or whatever.

I will retract that. But I do think it is important the honourable members understand that when they make these free-wheeling allegations they really are potentially playing into the hands of very powerful interests in the United States who are fighting not only us but the American states that are doing something seriously about acid rain. The Leader of the Opposition is not helping our situation at all.

Mr. Smith: Helping him hide it. He has not withdrawn the statement, either.

Mr. Speaker: Order.

An hon. member: He did so.

Mr. Smith: All right. It is my environment researcher who is heading the whole fight down there, as the minister well knows.

Mr. Speaker: Order. Order.


Mr. Cassidy: I have a new question for the Minister of Housing, Mr. Speaker. Yesterday the minister said that at least 35,000 home owners in Ontario would be paying more than 30 per cent of their income in mortgages because of mortgage renewals taking place this year. Will the minister undertake to share that report by tabling it in the Legislature? Will he not agree that people who are put in that situation will be put in dire straits because of the increase in interest rates?

Hon. Mr. Bennett: Mr. Speaker, I indicated very clearly yesterday there would be 35,000 households paying 30 per cent or more of gross disposable income on shelter if the mortgage rate was 22 per cent. I was very cautious in saying there would be that number out of 230,000 mortgages which would be renewed in Ontario in the current year and out of the overall total of 1.1 million which exist in the province. I said 35,000 households, according to our statistics, would be paying in excess of 30 per cent of their gross disposable income. I emphasize again that it relates to 22 per cent on the mortgage rate, and I am prepared to table in this House the facts and figures we have in the ministry to back up this information.

Mr. Cassidy: Thank you, Mr. Speaker. Let me give the minister a couple of examples of people who are in the situation that was described. Here is a Mrs. Diane Brighter, who lives on Fairview Avenue in Windsor, who signed a two-year mortgage at 11.75 per cent two years ago. It is being renewed on October 1 this year, and her mortgage payments will jump from $569 a month to $1,035 a month on a home that is in the $60,000 range. She must sell the house and lose the $12,000 that she put into it two years ago.

Here is the case of a Patrick Raymond, who lives in Essex, Ontario, also near Windsor. He is one of the workers affected by the layoffs at Chrysler, and he has worked there for eight years. His payments are going from $270 to $506. He does not know whether or not he will have a weekly income because of the layoffs at Chrysler, and his interest rate has gone from 10.75 per cent to 21.25 per cent. That is a home that has been owned for 10 years on which they owe only $30,000.

Are those people not in dire straits? What does one say to those people when they turn to us in government and ask, "What kind of action are you going to take so we can keep our homes?"

Hon. Mr. Bennett: Mr. Speaker, again yesterday I recognized that not all 35,000 we spoke of in that 22 per cent interest rate category -- or whatever the number happens to be: if it goes down to 20 per cent it is 30,500 and so on, and it drifts down in relation to the interest rates. I would be wrong to say there will not be some in that number of mortgages being renewed who will be very badly affected by the very rapid escalation in the interest rates they are going to meet on their mortgages.

I said yesterday, and I repeat, our people in the Ministry of Municipal Affairs and Housing have met with Canada Mortgage and Housing Corporation and have met with Mr. Cosgrove, and have discussed the question with the federal government. I want to make it very clear that the federal government should be involved in a program that could very well assist those who are hardest pressed, where their shelter allowance exceeds the 30 per cent of gross debt service. It certainly is not my privilege at this time to try and predict what is going to be in the federal budget, but I think it is reasonable, according to Mr. Cosgrove's remarks anyway, to have the feeling there will be some assistance for those who are extremely hard-pressed and can indicate it.

The federal Minister of Finance has clearly said to the financial institutions they should try to be as lenient and as compassionate as possible in their renewal of those mortgages and should assist those who are hardest pressed. As some members of this House know, there have been a number of proposals made, both by the financial institutions themselves and by government, of ways they could defer some portion of the principal and reduce the monthly payments so those individuals could retain their homes.

On behalf of the Ontario Mortgage Corporation, we announced in this House, and we have since extended it, that on those mortgages that are being renewed by OMC we do offer alternatives in the interest rate in relationship to CMHC section 58, which sets the national interest rate as far as the federal government is concerned. If one is to renew a mortgage with the OMC, if they take it for a one- to two-year period, it is two and a half per cent below the section 58 rate set by CMHC. If it is for a two-year term it is two per cent below, and if one wants to take a four- or five-year term, it is one and a half per cent below the rate set by CMHC. I think this government through OMC, our direct responsibility, has tried to show some leadership for those in the other areas of mortgages.

Mr. Nixon: Final supplementary, Mr. Speaker: I wonder why the minister does not simply expand his policy, which he uses to persuade people to buy homes in Townsend, to the rest of the province. In Townsend, as the minister knows, he subsidizes the mortgage rates down to 14½ per cent to persuade people to go into that herd of white elephants he calls his new town.

This is a subsidy of more than $4,000 per buyer, and if he were to use that policy, even in selected areas across the province, that would be the sort of assistance which would not depend on Mr. MacEachen's initiative, or federal laws, because he is already doing it.

Why can he not apply that kind of assistance to cases of the type of George and Barbara Wryghte of Toronto? George is 26 and earns $13,500 as a shipper with a computer company, and $20 a night as a car jockey at a racetrack. Barbara is in her mid-20s and earns $6.40 an hour at a tape manufacturing company. They have a 13-month-old daughter. They purchased their two-bedroom east end Toronto bungalow in 1978 for $41,500. Their monthly payments then were $400. Upon renewal they will be $700, a 75 per cent increase. They could not afford to renew and offered their house for sale in September, 1981. That is the sort of case the minister could respond to without any reference to federal policy, or Mr. MacEachen, or that malarkey.

He has already shown that he can subsidize in order to get the people into his $60 million development in Townsend, where I think there may be 25 or 26 people living -- 36, pardon me, I am corrected -- by subsidizing each one $4,000 per year.

Hon. Mr. Bennett: Mr. Speaker, the case of Townsend and the offering of mortgages to the development industries, which would be transferred on to the new home owners, is not dissimilar to what happens in the rest of the private mortgaging field. When I spoke here Tuesday during the emergency debate, I indicated very clearly that most contractors in this province, in new structures, have either secured financing at an early stage -- and that is exactly what happened in Townsend. The financing was secured by the contractors by the end of June this year. That is why they got in on a more favourable rate.

10:50 a.m.

Mr. Nixon: You've got a $3 million shopping centre.

Hon. Mr. Bennett: Mr. Speaker, I said on Monday -- I beg your pardon?

Mr. Peterson: You spent all your money.

Hon. Mr. Bennett: I would suggest, Mr. Speaker, that is not parliamentary.

Mr. Speaker: Order. The minister is responding to a question from the member for Brant-Oxford-Norfolk (Mr. Nixon). Will he please continue or has he answered the question?

Hon. Mr. Bennett: Very simply, Mr. Speaker, this government has offered in Townsend some interest rates --

Mr. Peterson: Where did you find 14 to 15 per cent in June?

Mr. Speaker: Order.

Hon. Mr. Bennett: Mr. Speaker, I would suggest to the member for London Centre (Mr. Peterson) that if he wants to run his campaign from this floor that is fine. But if he looks in his own local newspaper --

Mr. Peterson: You've lost any chances you ever had. You're so inadequate.

Mr. Speaker: Just ignore the interjections.

Hon. Mr. Bennett: It is very difficult, but I will try Mr. Speaker, because their content is about as worthy as the answer I will give them -- which is zip.

I am sure, as I said on Tuesday, if one looks around --


Mr. Speaker: New question. The member for Ottawa Centre (Mr. Cassidy). Order.

Mr. Cassidy: Final supplementary, Mr. Speaker.

Mr. Speaker: That was the final supplementary.

Mr. Cassidy: I am sorry, Mr. Speaker, but unless you have changed the pattern, we normally get a final supplementary on this side. There have been two questions from me and one from the official opposition.

Mr. Speaker: That is right.

Mr. Cassidy: Is that a new policy, Mr. Speaker?

Mr. Speaker: No, it is not a new policy. I have always allowed the questioner one supplementary, come back to the other party and then to another member of the original questioner's party.


Mr. Speaker: Order. New question.

Mr. Cassidy: Mr. Speaker, on the point of order, I am quite prepared to ask a new question now, but on the point of order --

Mr. Speaker: There is no point of order. Supplementaries are at the discretion of the Speaker.

Mr. Cassidy: May I ask, Mr. Speaker, who was the member of our party who asked another supplementary after the member for Brant-Oxford-Norfolk?

Mr. Speaker: Nobody.

Mr. Cassidy: Nobody?

Mr. Speaker: Right. But you already had a supplementary. I am not going to argue with you. Do you have a new question? If not, we will proceed.

Mr. Cassidy: I have a new question, Mr. Speaker.


Mr. Cassidy: Mr. Speaker, I have a question of the Minister of Consumer and Commercial Relations, if he would like to resume his seat. Now that the minister has had three and one half months to ponder the future of rent review and three and one half months to make a number of contradictory statements as to whether he intends to make any changes or to bring the rent increases up to what he has termed a more realistic level, would he tell the House what that more realistic level might be and how in any way that could benefit the tenants who are not protected by rent review?

Hon. Mr. Walker: Mr. Speaker, there have been a number of representations made in respect of any increase. Indeed, there have been representations made both by those who reflect the views of tenants and those who reflect the views of landlords. I have to say that no decision has been made.

Mr. Cassidy: Supplementary: If the minister says no decision has been made, that means he is contemplating a change in the levels of rent review or he is contemplating abandonment of the rent review that was brought into this province in 1975, which the Premier said during the election campaign would remain in force in Ontario as long as he was Premier. Would the minister explain exactly what he is contemplating changing? Does he, therefore, intend to listen favourably to such people as the landlords on Dundonald Street, who have applied for increases of 25 per cent to 46 per cent in rents in the units they happen to hold? Is that what the minister is contemplating, or is it his intention to maintain rent review the way the Premier said back in the election campaign?

Hon. Mr. Walker: The Premier's commitment stands. The rent review process will be maintained; there is no change in that. We would have to go back some six or eight months ago to repeat the statements of that time. There is absolutely no change whatsoever. That is in spite of the fact the NDP housing critic, the member for Etobicoke (Mr. Philip), said the ceiling on rent increases may be a little low. We appreciate he might have said that at one time back in March, and we recognize he is housing critic and made those representations and they were not retracted, so we take that representation as being a valid consideration as well.

Mr. Philip: A supplementary: The minister obviously does not listen very well in this House. It was pointed out to him before that at no time did I ever say we would change the base. Since the minister has indicated publicly that he feels the base should be raised because of the high interest rates, is he aware that in every case to go before the review board that has been reported to date in Metropolitan Toronto by the Federation of Metro Tenants' Associations and by any MPP who has been acting on behalf of tenants, where an apartment has been refinanced because of a resale, sale or a second mortgage coming due, the average rent increase being sought, because of high interest rates, is between 20 per cent and 40 per cent? How can the minister justify raising the base on the grounds of high interest rates unless he is talking about the 20 to 40 per cent and those people are going before rent review anyway?

Hon. Mr. Walker: The member should not get up here and start making such outlandish statements as that. It is a little bit ridiculous to come in here and frighten people the way the member for Etobicoke is doing. There are just no grounds at all for him to be saying that kind of thing. He himself knows that any person who owns property could go before the Residential Tenancy Commission -- as opposed to the rent review board -- and they could ask for a 6,000 per cent increase. That is not to say it would be granted. It is likely there would be something far less than that and probably far closer to the six per cent ceiling.

In fact, by the process we have, when they go before the Residential Tenancy Commission, the commission makes the decision based on the facts before them and the cost pass-through process. That is the way it is. One is not going to come up with the kind of figures he is talking about, although there may be exceptional cases where that might happen, if there were some kind of new mortgage that were brought on. Mortgage rates these days are in the 20 per cent, 23 per cent range, so obviously there might be the odd occasion when that would happen.

The average granted by the Residential Tenancy Commission for the past year -- and members will have a chance to see that in their annual report -- will be something in the range of 11.5 per cent. That is what they have granted on average over the past year for the individual cases before them. To suggest, as he is, any percentage like that is just ludicrous.

Further, while the member may try to change his position -- and I can appreciate there are certain colours that may want to be changed here in certain species of people -- the fact of the matter is that on the date of March 14, 1981 -- that was during the election process; the member might have been a little flexible perhaps back then -- the NDP housing critic was quoted in the Toronto Star as having said, "'The six per cent ceiling on rent increases may be a little low,' said Ed Philip, MPP for Etobicoke riding and the NDP housing critic."

Mr. Philip: A point of privilege, Mr. Speaker: As I pointed out to the minister before, I further stated at that time we would not change it in the foreseeable future, particularly --

Mr. Speaker: That is not a point of privilege.


Mr. Peterson: A question to the Premier, Mr. Speaker. In view of the foment from various agriculture, labour and academic groups about the potential dismemberment or destruction of the Ontario Economic Council -- and I understand representations of the Treasurer who wants to get rid of that independent body -- could we have the Premier's assurances that body will remain intact as a centre of independent research for the province, the only one that does Ontario-based research of this type?

Mr. Martel: It is still subversive. Remember John Smith? I think that is probably why you wanted to get rid of them.

Mr. Speaker: Order.

Hon. Mr. Davis: They really are interrupting, Mr. Speaker, because I was ready to give a very simple, straightforward, clear answer.

Mr. Martel: That would be new.

Mr. T. P. Reid: That would be a first.

Hon. Mr. Davis: Yes. In fact, I think the Treasurer has already said so.

11 a.m.


Ms. Bryden: Mr. Speaker, I have a question for the Minister of Labour. The Irwin Toy Company's refusal to engage in genuine collective bargaining with its employees has resulted in another bitter and long-drawn-out first-contract strike, similar to those at Fleck, Radio Shack, Blue Cross and Fotomat. In view of this and of the fact that many of the workers are low-paid women with family responsibilities, putting their jobs on the line in an effort to improve their starvation wages and appalling working conditions, will the minister end this scandalous denial of workers' democratic rights by bringing in first-contract legislation and anti-strike-breaking legislation this session?

Hon. Mr. Elgie: Mr. Speaker, just so the House has a better appreciation of that strike, which I admit has been going on for a long time and which is for us, as for the member, a troublesome strike, let us understand that there have been no accusations or charges made before the labour relations board of any unfair labour practice. So the member's initial comment was really inappropriate. If there is solid and sound evidence of unfair labour practice going on, the mechanism is there to deal with it.

The member also knows full well that, about two weeks ago, I appointed a disputes advisory committee to try to help the parties resolve the issues that are keeping them apart. They are now in the process of doing that, and I think we should let that process work.

Mr. Mackenzie: Supplementary, Mr. Speaker: I am wondering if the minister is aware that the young women on the morning picket lines at Irwin Toy have been told by one of the Irwins and by various management personnel on an ongoing basis there will be no union in that plant. It seems to me this is in spite of the fact they have been certified under the Ontario Labour Relations Act.

Does the minister not consider this rather contemptible management action a denial of the rights that are guaranteed to workers when they are finally able to achieve certification, which is not always easy? Does he not think this is literally thumbing their noses at the laws of the province? Does he not think such flagrant action as this makes a clear case for first-contract legislation, where it is obvious that the problem is not the negotiation of a contract, but a determination that there will not be a union in that plant?

Hon. Mr. Elgie: Mr. Speaker, again, so that the House clearly understands the legislation relating to first-contract arbitration the members are referring to, in those few provinces that have such legislation there must be a prior finding of an unfair labour practice before that section can be invoked. Quite frankly and quite honestly, I believe we now have legislation in this province that is equal to or superior to that. If there is an unfair labour practice taking place and proven before the labour relations board, the member knows very well that board has issued certain directions in the past which have led to the correction of the situation. Frankly, I think he is really asking for something the board now has the power to do.

Ms. Copps: Supplementary, Mr. Speaker: How can the minister say this is progressive labour legislation when he knows full well that in the last sitting of the Legislature, with the help of the NDP, he passed legislation that, in effect, would allow scabs the right to vote on first-contract negotiations?

Hon. Mr. Elgie: Oh, Mr. Speaker, I think the member should review the debate very carefully before she says that. She knows very well if there is any dispute as to who is to vote and who has the right to vote under the then section 34(e), those ballots will be segregated and a decision will be made based upon whether there was a right to vote.


Mr. Nixon: Mr. Speaker, I would like to direct a question to the Minister of Industry and Tourism, the minister who did not want to campaign against Mr. Coutts. As one of the leaders of the trade delegation to Australia, is he responsible for the information which led the Premier's office to announce $100 million in contracts and new business, presumably on the basis of the Premier's presence in the antipodes, which was responded to by Gerry Sutter, a spokesman for General Motors -- which was said to have shared a $30.7 million contract to send Titan trucks to Australia -- with the quote, "We have already completed delivery;" or by Scott Lincoln, a spokesman for de Havilland Aircraft of Canada -- mentioned as having secured $37.6 million in options on eight Dash-8s -- who said, "We announced our deal in Paris in June;" or by Mark Sully, with the international sales division of Champion Road Machinery of Goderich, who said, "We have been doing business with the Australians for 15 years"?

Since the Premier was vacationing in Fiji at the time that press release came out from his office, will the minister accept responsibility for the incorrect information and the attempt to make this junket to Australia look like something useful?

Hon. Mr. Grossman: Mr. Speaker, while the member was no doubt meeting with Mr. Coutts back here in some luxury to sort out his career and perhaps, for all I know, in the same discussion Mr. Coutts was trying to sort out the future career of the member's leader, the Premier, a group of businessmen and myself were working very long days in Australia and New Zealand.

In point of fact, we worked so many long hard days -- including in one case a 14-hour travel day from New Zealand to Perth, Australia -- that, against our wishes but on our doctor's advice, we had to recuperate for a couple of days before we returned to this country, in fairness to the taxpayers who expected some good judgement from us, which they always get, when we got back here.

May I say, to correct the record, that in New Zealand and Australia the information collected and reported back here was on the basis of an analysis done by us at the end of a particularly long series of meetings when many questions were asked about current business, about business to date and about expected new contracts to be entered into as a result of that visit. I must tell the member the $100-million figure was a rather modest figure selected to make sure we would not come back here and be accused by the member and others of inflating the figures.

We took an estimate given to us by the people on the mission, all of whom were selected because they have a tradition of doing business in Australia and New Zealand; an estimate of current business, of business they will be doing as a result of this mission and future business. We wrote those figures down very substantially.

I think if the member checks back, and feels free to ask six months from today in this House what the actual figures will prove to be, he will find they will be far in excess of $100 million. It was a rather modest, written-down figure estimating all the business in progress, the business coming out of that specific mission and the offshoot business that would come in that part of the world as a result of factors one and two. Quite seriously, I think the member will find it is an understated figure and the firms will be in a position to confirm that to him several months from today.

Mr. Nixon: Since the minister transferred his assistant, Jerry Gautreau, the person who got together this compendium of impressive sales and new business, has he had him transferred to Foster Advertising, which is obviously where he should be working?

Hon. Mr. Grossman: No, he has gone to work for Dan Heap.

Mr. Nixon: They all voted for Dan. They took your lead; they all said there must something about Laura Sabia they didn't know.


Hon. Mr. Grossman: No, no, guys; even the hardworking, precise Mr. Gautreau could not have helped Mr. Coutts in that election. Indeed I hope he would not have, because I was working, as were so many of my colleagues, very hard for Mrs. Sabia, who no doubt will win Spadina riding in the next federal election.

11:10 a.m.

I want to be serious, because Mr. Gautreau happens to be a very efficient, meticulous, hardworking civil servant, a civil servant I am particularly proud of, who has done very well in his current job. He had a very difficult responsibility because he was dealing with information sent back by us from 10,000 miles away.

Mr. Smith: Oh, that explains it.

Mr. T. P. Reid: So you can't blame him.

Hon. Mr. Grossman: Listen, I never blame my civil servants. Unlike the Leader of the Opposition, who blames riding presidents, organizers, advisers, people working in his office and his caucus, I take responsibility for what we do. I sent the figures back and it is not Mr. Gautreau's fault.

Mr. Speaker: A new question, the member for Sudbury East.

Mr. Martel: That tells you why the minister needed a $140,000 campaign. No, you don't blame your civil servants.

Mr. Speaker: I trust you do have a question. If not, let somebody else ask one.


Mr. Martel: I have a question for the Minister of Labour regarding National Steel Corporation. How can the minister continue to deny severance pay benefits to the employees of National Steel when at the time they were laid off, the company stated, "It is only fair to say that the current projections of iron ore demand indicate this property may be idle for perhaps up to four years"?

In view of the fact that the company continued to pay into the pension plan up until January 19, 1981, and it was only on January 19 that the company notified the union to this effect, "This letter is to advise you that the shutdown should now be considered a permanent shutdown," what kind of evidence is it going to take to force the minister to force that company to pay severance benefits to employees who were laid off and the layoff became finalized only after the legislation took effect?

Hon. Mr. Elgie: Mr. Speaker, it is not a matter of what anyone can force me to do or not do; it is a matter of what is in the law and what it means. As I have written to the member for Sudbury East on two or three occasions now, it is clear to our legal staff that after January 1979 there were no longer any employees.

There was the possibility of a mine reopening, but there were no employees at the time the severance pay legislation came into effect in its retroactive way as of January 1980. It is the conclusion of our counsel after a repeated review of the problem that the legislation does not apply to that particular group of workers.

Mr. Martel: If the fact that this became a permanent shutdown did not occur until after the legislation took effect, then in reality these people were just laid off. Because the termination only became permanent in this new year and the legislation took effect on the first of the new year with respect to permanency, should they not be entitled to benefits? Why not?

Hon. Mr. Elgie: I really do not think there is any point in getting down to what I may or may not wish for those particular employees. We are bound by what the law says and by the interpretation of that law. I know there are some who would like to go ahead and do whatever they wish, but unfortunately when one has to be accountable one has to live up to what the law says. My legal counsel have gone over it and they assure me that as of January 1980 those workers were not considered employees. Their employment had been indefinitely terminated. Had the plant reopened, the situation would have been different. It is not a matter of anybody trying to say it would not be nice if it could happen, but that is just not the fact.

Mr. Cooke: Supplementary, Mr. Speaker: I would like to ask the minister why in this particular case he defines an indefinite layoff as a permanent layoff to eliminate these workers from getting severance pay, yet the other day when I raised the question of the 1,500 Chrysler workers an indefinite layoff was considered to be a temporary layoff and therefore they do not qualify for adequate notice.

Hon. Mr. Elgie: Mr. Speaker, I know the particular member is not in the campaign for leadership, but he still persists in using these derogatory phrases like why do I do these things. I do not do these things. I comply with the law and I think it might be a habit the member should get used to, complying with what certain regulations and laws mean. That is all we are doing. Let me tell the member, it is not a matter of any minister or this government wishing to do or not to do anything; it is a matter of what the law says and it has been clearly interpreted in those ways.


Mr. Bradley: Mr. Speaker, I have a question of the Minister of Consumer and Commercial Relations regarding laws for the rich and laws for the poor. I would like to ask the minister why an exceptional drinking permit was granted to a group known as Les Musts de Cartier. This was a ball held for approximately 600 of what have been described as Toronto's elite at the Harbour Castle Hilton last Wednesday night. This special permit allowed the bar to stay open until 2 a.m. instead of 1 a.m., when it would normally close in good old Ontario.

In the light of the fact that the gentleman in charge of the Liquor Licence Board of Ontario, Mr. Willis Blair, said the licence was granted because Cartier Incorporated had their plans laid out months in advance; taking that into consideration, would the minister be able to explain what reasonable reason could be advanced for allowing this special, wealthy, influential group to have this kind of permit when thousands upon thousands of average people in Ontario are denied the same privilege?

Hon. Mr. Walker: Mr. Speaker, that is very nice; a special law for the rich. This is the exception I think the member is referring to, an exceptional law for the rich but not for the poor.

Mr. Bradley: I am saying you are making an exception for the rich.

Hon. Mr. Walker: Do I hear the member saying we are making special exceptions for the rich? Well, here is an interesting case. First of all, it was a licence extension and so the Harbour Castle, which would normally have closed that lounge at one o'clock, was allowed to go until two o'clock. Section 38 of the liquor licence regulations gives the board the authority to extend the hours of operation past 1 a.m. for an event of municipal, provincial, federal or international significance.

At least we have the law on our side. The people at the board made the decision to grant it. Why did they do it? Because this was a charity. It certainly was for a good cause. It is a nonprofit operation that was there, This particular operation was the Young People's Theatre of Toronto and this was an international event that had celebrities from international bases and it was a fund-raising event, the proceeds of which would go to this particular good cause, the Young People's Theatre.

It has been done before --

Mr. Bradley: But not very often.

Hon. Mr. Walker: That is true, but exceptions are made.

Mr. Bradley: Three times.

Hon. Mr. Walker: An interesting thing about exceptions being made, now the member would suggest that the exceptions are made for the rich -- I think he said a special law for the rich and not for the poor.

Mr. Bradley: It has that connotation.

Hon. Mr. Walker: The last exception I can remember being made was for the St. Catharines Liberal Association.

Hon. Mr. Grossman: The underprivileged.

Mr. Gullies: They were poor in spirit.

Mr. Speaker: Order.

Hon. Mr. Walker: This particular rich association was having another one of its fund-raising functions. Was it for fund raising? In continuing our exceptions for the rich, the Liberal association of St. Catharines at the behest of its individual member, in this case the member for St. Catharines, intervened during the month of August 1981 and asked if there could be an exception made to our rule.

We have this rule, as it involves special occasion permits. This was the Henley Rowing Club, which had been called up on the carpet for a special problem and they were in the midst of a hearing. During these hearings it is just not so that any permission is granted for any particular club. In this case a special exemption was given to the St. Catharines Liberal Association at the behest of the member. They seemed to have good cause; they seemed to have good reason.

11:20 a.m.

I can appreciate there are times when exemptions should be made and I tend to think this was the opportunity. I am certainly prepared to support the member in the interest he has expressed.

Mr. Speaker: The member for Brantford has a supplementary. Does the member for St. Catharines have a supplementary?

Mr. Bradley: Yes. I will rise on a question of privilege in a minute, because the minister has completely distorted the matter. All he has done is to take an instance --

Mr. Speaker: The member does have a question?

Mr. Bradley: Yes, my supplementary question to the minister is --

Hon. Mr. Grossman: Why did I ask that question?

Mr. Bradley: My question is not why did the taxpayers have to subsidize the campaign of the Minister of Industry and Tourism to the tune of almost $100,000 through the tax credit system. That is not my supplementary question.

My supplementary question is, in terms of the law whereby there is a 1 a.m. or a 2 a.m. closing, whatever we want to call it, why does the minister not make one set law and leave it at that? There are many charities that would have been equally as deserving as this particular charity.

Hon. Mr. Walker: I would certainly be pleased to hear any submissions made, if the honourable member would like to take up a charitable cause. I admit his own riding association was not a charity so it fell beyond the normal exemption rules, but in this case, when they do make exceptions from time to time, I think it makes the law more humane. Is the member advocating a 2 a.m. closing? If we were to accept what the member is suggesting, that maybe there should be a 2 a.m. closing, I suppose the St. Catharines Liberal Association might come along and want to have a 3 a.m. closing some day.

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

Mr. Bradley: A question of privilege, Mr. Speaker.

Mr. Speaker: A point of privilege?

Mr. Bradley: A point of privilege, sorry. The minister, in an attempt to avoid this question, has made reference to a situation that exists in the city of St. Catharines, which I think he is not going to be very happy with by the time I finish bringing this up. This is the situation, and I think it bears a pretty detailed explanation because the minister has gone on at some length. The Henley Island alumni association --

Mr. Speaker: Can the member identify his point of privilege, please?

Mr. Bradley: Yes, my point of privilege is that the minister is distorting the facts and my privileges have been abused as a result. I think, in all fairness, I should be permitted to clarify the situation, because the minister has given an impression that is clearly not correct. I do not want to use the word "misleading."

Mr. Speaker: With all respect, the member's personal privileges have not been abused.

Mr. Bradley: Yes they have, Mr. Speaker, because he has made this accusation to the member for St. Catharines.

Mr. Smith: We never hear two sides of any story. He is allowed to make a statement, but we cannot answer.

Mr. Speaker: Order. The member's personal privileges have not been abused.

Mr. Bradley: The minister has made an accusation, an insinuation, Mr. Speaker.

Mr. Speaker: Let us hear it then and we will see.

Mr. Bradley: What happened was the Henley Island alumni association had a problem right near the end of May during the Canadian Schoolboy Regatta. As a result, a report went in to the Liquor Licence Board of Ontario concerning this problem that existed at the end of May. There was considerable delay by the liquor board as to when any action would be taken against the alumni association.

This delay, of course, permitted the St. Catharines Progressive Conservative Association in late July to hold an event at Henley Island without any interference from the liquor board. However, when the St. Catharines Liberal Association was to hold an event, all of a sudden the board found it convenient, or at least found it reasonable, at that time to start cracking down on the licences.

Along with other groups that were experiencing problems with the liquor licensing board at Henley Island at that time, even though there was not a hearing held, the St. Catharines Liberal Association was permitted -- as were other groups, not just the provincial Liberal association -- to have the special occasion permits, which were normal for the alumni association, because they said that after August 27, or something of that nature, they were not prepared to grant these permits; interestingly enough, after August 27.

So the minister is attempting to insinuate, first of all, that the St. Catharines provincial Liberal association somehow had an extension of hours, which is not accurate, and second that somehow they were given special privileges because the member intervened. I do not know whether that is accurate or not, because there was great assistance rendered by the other members in the area. The member for Lincoln (Mr. Andrewes) was kind enough to act on behalf of the alumni association to ensure that events were allowed to proceed; I believe the office of the Minister of Energy (Mr. Welch) was kind enough to act on behalf of the alumni association to ensure that events were to proceed.

So, Mr. Speaker, the minister has attempted to drag in something that is entirely different and apply it to a question that is embarrassing to him.

Mr. Speaker: Order. That was a very interesting chronological report of the events, but I fail to see that your privileges were abused.

Mr. Nixon: Mr. Speaker, on a point of order: It may have escaped your attention, sir, since you are responding as you are, that the minister said a special request was granted to extend the drinking until two o'clock, as there was in the other case down at the Harbour Castle raised by my colleague. My colleague has said there was not an extension to two o'clock. If you do not think he was interfered with by the minister's statement I must take issue with you.

Mr. Speaker: That was not the point; the point was whether his privileges were abused.


Mr. Speaker: Order. Order. I would perhaps ask the members to make themselves familiar with the standing orders. Ministers may reply in any way --

Mr. T. P. Reid: You cannot mislead the House, whether intentionally or inadvertently.

Mr. Speaker: Are you suggesting --

Mr. Philip: The minister misled the House.

Mr. Smith: On a point of order: I ask to be guided by you, Mr. Speaker. If a minister, in the discretion -- admittedly a fairly wide discretion -- that is granted him in answering a question, says something that is factually inaccurate and furthermore casts aspersions on members of the opposition, in what conceivable forum and by what conceivable means under the standing orders can a member of the opposition rise to set the record straight except by rising on a point of privilege?

Mr. Nixon: As soon as possible.

Mr. Speaker: Well, why not?

Mr. Smith: He has done so.

Mr. Speaker: Right. But he corrected the record; that is all I am saying.


Mr. Bradley: On a point of privilege, Mr. Speaker: In view of the previous incident we just had with the minister attempting to insinuate one thing which was totally inaccurate, I would like to ask that you ask the minister to withdraw the statement that there was any extension of hours for the St. Catharines Liberal Association in regard to a liquor licence.

Mr. Speaker: I would ask the member to allow me the opportunity of checking with Hansard to see what was actually said. I would suggest to the member for St. Catharines that he, indeed, did an adequate job in correcting the record, which I think was the whole purpose of rising on the point of privilege as he did. However, I will check Hansard and have a decision for you early next week.

Mr. Stokes: Mr. Speaker, if I might speak to the point of privilege, I am sure that you want to continue the practice of having the person who made the allegation correct the record rather than somebody else who was not responsible for the statement. It has been the past practice that if it has been proven or shown that any honourable member did put something on the record that was not in keeping with the facts, all honourable members would want to correct it themselves.

Mr. Speaker: Thank you; and that is the point of checking Hansard and getting back early next week.



Hon. Mr. Wells moved that Mr. Cureatz be deleted from the order of precedence for private members' public business and that all members of the Progressive Conservative caucus listed thereafter be advanced by one place in their turn, and that notwithstanding standing order 64(d) Mr. Rotenberg and Mr. Jones exchange positions in the order of precedence for private members' public business.

Motion agreed to.

11:30 a.m.



Hon. Mr. Henderson moved second reading of Bill 100, An Act to amend the Livestock Community Sales Act.

Hon. Mr. Henderson: Mr. Speaker, the main purpose of this bill is to permit livestock co-operatives to hold six feeder cattle sales per year that are exempt from the Livestock Community Sales Act. This will provide immediate benefit to the marketing of feeder cattle this fall, and, needless to say, these are difficult financial times for beef cattle producers.

Producer co-operative cattle sales were initiated in northern Ontario in the mid 1950s and have contributed greatly to the economic wellbeing of beef cow-calf producers. There are presently seven co-operatives holding sales, located as follows: Wiarton has held four and will need another one; last year they sold 14,403 head; Thessalon in Algoma, one sale, 1,969 head; South River, Parry Sound, held three sales, 1,853 head; Rainy River, Stratton, one sale, 3,309 head; New Liskeard, one sale, 1,400 head; Manitoulin, one sale, 3,361 head; and eastern Ontario, one sale, 560 head.

In 1980, seven co-operatives sold a total of 26,860 head of cattle. Unfortunately, last year the Wiarton sale had to turn away approximately 3,000 head of cattle as it was impossible to handle them at the four sales that are permitted at present.

The bill also provides for removal of section 9; which by the way is now section 15, if members have the new updated bill, but it was section 9 in the old bill. There is already authority in the act to make regulations in this regard, and there is currently a regulation which duplicates the contents of the section being removed. Bearing in mind that improvements are constantly occurring in cleaning and disinfecting methods, it is important for the administrative purpose to respond to these changes and this can be done much more readily by regulation. In summary, the changes are quite straightforward and are designed to facilitate the efficient marketing of livestock in the province.

Mr. Speaker: Before any other member speaks, I would just like to draw the attention of the members to standing order 55 as a reminder that a reply is allowed to the minister or to the parliamentary assistant, whichever the case may be, who has moved second or third reading of a bill, after all members wishing to speak to the motion and any amendments thereto have spoken, and the Speaker shall inform the House that the reply closes the debate.

Mr. Riddell: Mr. Speaker, we in the Liberal Party are supporting this amendment to the Livestock Community Sales Act as we recognize the assets of the northern Ontario livestock sales, not only to that part of Ontario but also to the beef industry in general.

It certainly does give our producers throughout Ontario a chance to go to these sales and procure the livestock they require to fill the feedlot operations they have constructed in the more southerly and easterly portions of Ontario. It saves them from having to go out west to buy all their cattle and to suffer some of the consequences associated with shipping fever and some of the other diseases these cattle seem to pick up on the route down from western Canada.

It is an industry we are proud to have retained in Ontario; one has to admit, of course, that some of the cattle sold in these northern Ontario sales no doubt originated in the west, but a lot of the cattle are produced in northern Ontario. This is the place where I feel we should see the cow-calf operations, where they cannot grow such cash crops as we can in southern Ontario where we depend on forage. I would like to see more cow-calf operations established in those parts of Ontario, but the price has to be right for those producers to be able to do that.

Certainly, if the northern Ontario sales were not able to handle the numbers of cattle produced in that part of Ontario, then it is only logical that we should be extending the number of days in which they can hold sales to move the cattle and give those producers from other parts of Ontario a chance to go up and bid on those cattle.

Unfortunately, I understand, many of these cattle are being moved to Quebec. It certainly has to be some indication that there is greater incentive for the Quebec producers to produce cattle than there is here in Ontario. But this gets into another matter and we have been dealing with that a bit in estimates. I am sure we are going to be raising it from time to time in this Legislature.

Some of the community sales no doubt had some reservations about extending the number of days northern Ontario sales can operate, as I am sure some of these community sales used to pick up the overflow cattle. I cannot think that any of the sales down in the part of the country I represent are all that seriously affected because, even though they hold stocker sales, they are able to pick up most of the cattle within a few miles of the location of that particular community sale.

In northern Ontario, I assume some of the overflow cattle from these northern Ontario sales went to other community sales such as Keady Livestock Market and, of course, it was a source of revenue for the owners and operators of the Keady sale.

Still and all, I am convinced most of these community sales do get these cattle moving through their operations at some time, whether they are calves coming down from the west and being sold out to these northern Ontario people who are going to raise them as stockers, or whether it is a case of taking the fat cattle back out of the feedlots and marketing them as fat cattle.

I would think the community sales would want to be a little careful about objecting to an extension of time for these northern Ontario sales to move the stocker calves and cattle that they have in that area, whether they are cattle they have raised themselves or whether they are cattle that originated in the west and simply were fed in northern Ontario and then sold to the operator who is eventually going to fatten them.

11:40 a.m.

The other part of the bill deals with the deletion of cleanup and sanitation provisions from the act. The minister mentioned the reason for this was that we have made some technological advancements in spraying et cetera to get rid of any disease and that any cleanup is going to now be established by regulation. I am sure a lot of the community sales operators would like to know what these regulations might be.

At the present time they have to clean and disinfect 12 hours before they can hold another sale or before they are allowed to bring livestock into that sale. With the change the minister is making, he is going to establish it by regulation. Does this mean that a community sale could hold two consecutive days of sale and then clean up after the second day, or could it hold three consecutive days of sales and then clean up after the third day? I am sure they would like to know what they are expected to do.

I do not fully understand the information that was provided with the bill. I simply want to quote: "The act requires the operators of livestock community sales to clean and disinfect the premises 12 hours before any livestock are received as set out by legislation." We know that this has been the normal custom. "The practical effect of this requirement has been to prohibit the use of the sale facilities on two consecutive days, which essentially limits routine licence sale operation to two days a week."

I know they have not been able to sell on two consecutive days, but I do not see where the minister gets this fact that they are limited to two sale days a week. If they held the sale on Monday, they would have to clean up on Tuesday. They can hold a sale on Wednesday, and they would have to clean up on Thursday and they could hold a sale on Friday.

Why does it limit the sale days to two days a week, as suggested? The minister will have a chance to reply after the other members speak, but I simply fail to understand why he thinks community sale operators are now restricted to two days a week of sales when I can see that under the present legislation they can have three sales a week.

I would like the minister to elaborate on the type of regulations he is looking at in connection with the newer technology for cleaning and disinfecting the premises. If a sale barn operator decides he wants to hold a two-day sale or even a three-day sale with the idea that they can clean up after that sale is over, is he going to be permitted to do so under the regulations?

These are just some of the things that came to my mind when I was reading this bill and the information the minister so kindly provided along with the bill. I am sure I am also speaking on behalf of many of the community sale operators who would like to know what the minister has in mind as far as the cleanup and the disinfection of their premises is concerned before they can have another sale.

Mr. MacDonald: Mr. Speaker, we also shall support this bill on second reading. It is essentially a housekeeping bill.

Some of us during the current consideration of the estimates have been reflecting the growing view across the province that the Ministry of Agriculture and Food has been drifting increasingly throughout the past decade, and on occasion events sort of catch up and pass them by, so that their procedures and statutes are out of date and tend to frustrate rather than facilitate the objectives of the act as originally spelled out. I think this is a classic example.

The limitation of four sales up in the north for reasons that have been spelled out by the member for Huron-Middlesex, which reasons I shall not repeat, obviously indicated there was need for some measure of relief and flexibility with regard to that four sales limitation; so it was taken to six.

I do not know, any more than the last honourable member, who has taken his seat, exactly what they have in mind but, in terms of the new regulations for cleaning and disinfecting premises, once again events have just popped up and passed by the statute. Conceivably, those events took place five years ago. Who knows exactly when they took place? Somewhat belatedly, we are now bringing our statute in conformity with modern practices, which make it possible for cleaning and disinfecting in a fashion so that one does not have to give this 12-hour period the original statute spelled out.

I repeat, this is a housekeeping bill, bringing the legislation into the current day, if not the modern day, and the sooner we do it the better. Therefore, we support it.

Mr. McKessock: Mr. Speaker, I rise to support Bill 100, which will change the northern feeder sales or co-operative corporations' sales from four to six sales a year. I am not sure I agree totally with the member who just spoke, saying this amendment is just making the act conform with modern-day practices, but I will get into that.

Mr. MacDonald: Modern-day needs.

Mr. McKessock: Or modern-day needs; I am still not entirely convinced about that. However, I am supporting the bill.

I want to say what a great contribution these sales have made to the farmers since they were started some time ago. Prior to that, we had a lot of farmers who were at the mercy of buyers who would go around from farm to farm: farm buyers, or one might even call them scalpers at times.

In the fall there are a large number of cattle for sale. These buyers would go around, and the farmer did not have a great choice of buyers to sell his cattle to at that time. A buyer would enter his farm, say he had bought cattle from his neighbour at a certain price and convince the farmer to sell to him too. If the farmer was not sure of the price of cattle, he would often sell below the real market price.

Once these sales were brought into effect, specifically for that reason, the farmers could take their cattle there in the fall and receive competitive prices. The cattle were sold by auction and they got the top dollar as a result of these buyers bidding against one another, and this was good.

One of my concerns with this amendment is that it will cut into community auction sale revenues. When it was set up, it was agreed by the community auction people involved that four sales a year would be granted to the co-operative corporations. I know the reason behind extending this to six sales is that every sale is overfilled -- they are in Wiarton, which is close to our farm -- and they cannot accommodate all the farmers who want to put cattle into the sales; so it seems necessary that they have the right to a couple of more sales.

However, I think the government should take a good look at this before it makes any further amendments to the act. If these sales were too great in number and too many cattle were taken away from the community auction people, who are giving the farmers of the area weekly service, they could be put in jeopardy. They have to run a viable operation as well, and the benefits derived from these sales by the farmers on an ongoing basis are valuable.

11:50 a.m.

I am not sure the repealing of section 9 is a good idea. Twelve hours does not seem like an unrealistic time for a sales barn to be cleaned up and sit idle. I spent many years in the veal calf business, and I realize how important it is to clean and disinfect barns before animals enter the premises.

I myself use high-pressure, powered equipment to clean the barns, and I always like to have the barn sitting idle for 12 hours after cleaning before new animals come in, because the drying process after cleaning is part of the germ eradication. Did the minister contact the veterinary services branch at his ministry before making the decision to repeal this section of the act and, if so, what was the response of the veterinary services branch?

Mr. Wildman: Mr. Speaker, I do not intend to speak at length. I just want to reiterate the comments made by others of the important service that community sales provide for the cow-calf producers in northern Ontario.

I agree, especially in terms of the Wiarton sale, that the numbers of cattle being brought in have made it difficult to accommodate all the producers. I agree that there is a need to expand the possible number of sales days open to them.

I disagree somewhat with the member for Grey (Mr. McKessock). At the annual Algoma community sale at Thessalon, many of the producers in our area would have a very difficult time in getting their cattle to market if they did not have the option of a local sale. In our area, we do not have the kinds of community auctions they have in southern Ontario, and there is a need for this kind of service.

I agree with the comments of the member for Huron-Middlesex (Mr. Riddell) about some of the difficulties, especially in the last couple of years, that cow-calf producers have faced because of the pressures on the buyers and, as a result, the downward pressure on prices at the community sales.

The fact that a good portion of the cattle appear to be going to Quebec indicates that there may be significant advantages for producers in Quebec which would make it possible for them to pay a higher price and would make it difficult for the industry to continue on an even keel in Ontario. I hope that in another context the minister will be prepared to take action. If and when that happens, perhaps we will see a more vibrant beef industry in this province.

Again, I want to reiterate that I support the bill and the whole concept of co-operative sales for the producers in northern Ontario.

Hon. Mr. Henderson: Mr. Speaker, I will respond first by saying that regulations are now in place. If I might just read one section of the regulations that were put into effect, regulation 568 as amended by regulation 316 of 1972:

"Every operator shall, at least 12 hours before any livestock is received on his premises for the purpose of community sales, remove manure and refuse from and clean the premises for his community sale yard and use a disinfectant on the premises. After the removal of manure and refuse therefrom and after the cleaning thereof" -- and it goes on.

That is in place. We do not plan on changing that at this moment.

I have a note here from the director of the veterinary services branch of my ministry. That branch helped to draft the legislation; so I think that is as much consultation as one could have. This is the note he has just sent me; he is here Under the gallery:

"We are considering changes in respect of time limits for cleaning and disinfecting. We will be considering at some time present limits on licensing community sales -- holding two sales per week. We will also consider the possibility of holding sales on consecutive days. But we do not intend to take steps that will increase health hazards to the livestock." So we are still protecting it, but we are going to try to assist.

Another question was asked. The honourable member asked why they could not hold them on a regular day-after-day basis. I am sure the member for Grey can tell the member that these cattle go into the community sale barn four to five days ahead of time. They are then sorted into groups of the same weight and colour so they can be sold in groups in which the feeder wants to buy them; so they are really in there four to five days before. There is no possibility of one animal being overfed; they all get the same feed. I am not sure, but I think there is a limit of one hour on the time they must be there before the sale.

I appreciate the support of the other parties, and I believe I have answered their inquiries.

Motion agreed to.

Third reading also agreed to on motion.


Hon. Mr. Ashe moved second reading of Bill 79, an Act to amend the Corporations Tax Act.

Hon. Mr. Ashe: Mr. Speaker, this bill to amend the Corporations Tax Act, 1972, includes significant changes arising out of the 1981 budget as well as administrative changes.

With respect to the resource industry, the federal income tax treatment of Canadian exploration and development expenses is to be adopted. As a result, exploration expenses incurred in Canada after May 19, 1981, will be fully deductible in the year in which they are incurred by all corporations, and not just by corporations whose business is mining or oil and gas production.

Development expenses incurred outside Ontario after May 19, 1981, by mining corporations and oil and gas companies will be limited to a maximum annual deduction of 30 per cent of their undeducted expenses. Development expenses incurred by these corporations formerly were fully deductible in the year in which they were incurred. Development expenses incurred in Ontario by all corporations continue to be fully deductible.

Expenditures after May 19, 1981, by all corporations for Canadian oil and gas properties will be limited to a maximum annual rate of 10 per cent. These expenditures formerly were fully deductible by mining corporations and oil and gas companies in the year in which they were incurred.

In the budget, the Treasurer (Mr. F. S. Miller) announced that Ontario will parallel recent changes made by the federal government to its earned depletion allowance system. This proposal will be made later by changes to the regulations under the Corporations Tax Act. This proposal affects oil and gas corporations rather than mining companies. The effect of the Ontario proposal is to reduce the extent by which oil and gas corporations may deduct depletion allowances from their income.

Taken together, the changes affecting the resource industry will increase Ontario corporations tax revenues by some $15 million.

12 noon

Also announced in the budget was a change that may affect corporations whose tax liability exceeds $2,000. This bill contains amendments that restructure the basis for calculating monthly corporation tax instalments.

Corporations that have fiscal years of less than 12 months and corporations that have recently amalgamated or reorganized will, for taxation years that commence after September 30, 1981, have to pay tax instalments on a full year's tax based on their new corporate structure.

This amendment ensures that these corporations pay full monthly instalments and do not delay until after their year-end the full payment of their tax liability.

In addition to the foregoing, there are a number of administrative amendments. Some of these amendments close loopholes; others simplify the administration of the tax.

For example, the amendment to the foreign tax deduction will prevent corporations from claiming a greater deduction than they are entitled to.

Another amendment to the interest provisions will make it easier to calculate the interest to be credited to corporations if they overpay their corporate tax instalments.

The changes to the permanent establishment provisions will simplify the rules that apply to entertainment corporations.

This bill will not only implement the changes announced in the budget but also improve the administration of the corporations tax.

Mr. Nixon: Mr. Speaker, we certainly accept the continuing concept that our Corporations Tax Act, wherever possible, should parallel the federal statute and regulations. The simplification of the tax procedures and the sharing of responsibility for the general principles of corporation taxation are concepts that we have supported and will continue to support.

I have a feeling that the minister may be in somewhat the same position as I am. I do not want to insult him, but I have the feeling that the elaborate wording and intricate meanings of the statutes and the changes are sometimes rather difficult to keep in one's mind all at once.

I have a terrible feeling that the corporations tax statute here and its regulations are like some elaborate religious procedure understood by only a very select priesthood of lawyers, a very select group of lawyers, none of whom I know personally, and a few public employees who are at least clever enough to give the impression that they grasp it sufficiently so that the minister has the confidence to come into the House and read the statement that he just read. I am sure that he read it before, but I have a feeling that the actual development of the statement was about as far removed from him as it was from me.

Just in trying to examine some of the amendments, one would have to turn immediately to a researcher who was skilled in the law, one preferably with some experience in the collection of corporation taxes. We as legislators have really abdicated our responsibilities almost entirely except for the main concept: the NDP say they are not paying enough, the Conservatives say they are paying too little and we think it is just about right, just like Little Red Riding Hood or whoever it was who ate the porridge.

I am particularly interested in this bill because the first section deals with family farm corporations: not that I am a part of one, but I certainly represent many people who are interested in that, and we are particularly pleased that the 95 per cent requirement of farm assets in the corporation has been changed to 75 per cent. This gives family farm corporations at least some reasonable leeway even in the collection of interest payments. Believe it or not, there are some family farm corporations, I understand, that collect interest instead of only paying interest.

Certainly this is a problem that has been brought to my attention by some farmers who have also expanded their farm-related business to the selling of seed, fertilizer, weed sprays and that sort of thing, where they have had some difficulty with the real corporation tax people -- that is, the ones in Ottawa -- who feel that when those revenues or profits or assets exceed the five per cent formerly permitted, they should be taxed on another basis.

I am very glad that has been set straight and that any ambiguity in the holding of family farm shares has been cleared up. I vaguely looked at the section once when I thought our rather inadequate holdings in South Dumfries might be put into a corporation in which my sons and daughters would be shareholders. But when it said that every share of the capital stock -- rather than read the whole paragraph that is written here, referring to "every share" rather than "all shares," I would say the amendment is clearer.

One of the other sections I was interested in referred to entertainment corporations and the costs of entertainment. Once again, without doing the kind of research the minister has undoubtedly done, I have a feeling there is a reference there particularly to companies that might be making feature films, or other films, in Ontario. We are becoming the Hollywood of the north for high quality Canadian-type films.

I had the great pleasure of going down to Theatre in the Dell earlier this week. One of the skits there featured a young man who was singing about his joy at finally getting into the Canadian film business, starring in a film called Murder in Texas. He said "We even found a place in Ontario where we can film this and you would never be able to tell you are in Canada." One of the things wrong with our entertainment industry is that somehow or other, while these films are high quality -- they have not attained the quality of the Texas Chainsaw Massacre and those classics -- but still some people in the area --

Hon. Mr. Grossman: You do not want those censored?

Mr. Nixon: I do not even like what they have on the Royal York TV, but that is another matter.

Hon. Mr. Grossman: What have they got?

Mr. Nixon: The minister ought to check in sometime. They really do not come up to real-life experience and things of that sort.

I have a feeling, however, our Minister of Revenue might very well take some initiatives in this field that would perhaps provide additional impetus to the film industry. Toronto is a great filmgoing community. I think the per capita ticket sales here are higher than almost any other community in the world -- North America at least. We might very well be using the powers of the Ministry of Revenue in a way that would encourage the film industry more than it has been encouraged in this area. Federal initiatives have really made the industry as it is. Maybe we could do something to improve it, particularly if we could do something about its quality. That would be extremely acceptable.

I was also interested, although certainly nonplussed, by the changes in the depletion allowances that are granted in the legislation. The minister indicated they simply parallel what is happening in Ottawa, and that is fine with me. But, once again, we should be looking at a direct application to Ontario.

The Minister of Energy (Mr. Welch) -- in one of the strangest statements I have heard from him in a long time, and he has had quite a list of strange statements -- is getting very enthused about the prospect of oil being found in the Hudson Bay plateau, and out in Hudson Bay itself. It sounds great, and I sincerely hope his optimism is justified. But it seems strange to me the geologists of the world have not found that relatively easy source of exploration in the past.

When I was first elected, the then Minister of Mines, the Hon. George Wardrope, now deceased, was informing the House with the same degree of enthusiasm that the clay structures there were typical of the kind in which diamonds were located. Extensive research was going on north of Cochrane to locate the diamonds he was sure were there. I hope I am pleasantly surprised but right now I feel the statements made by the Minister of Energy, in his prospects for oil exploration, are just about in the same category as the Wardrope diamond mine.

Hon. Mr. Grossman: Diamonds are forever.

12:10 p.m.

Mr. Nixon: They are still underground, as far as we are concerned.

We desperately need a little bit of improvement in the prospects for northern Ontario. But if we want to encourage research there, and give some indication to the hard-headed people in the oil industry -- at least they were hard-headed until Tuesday of this week, when the Premier got into it -- we could encourage the kind of exploration that might be to the benefit of the people of Ontario. Even if they do not find oil, at least there will be jobs and machinery going into this search. I was a bit disappointed that one of the newspapers is referring to the Premier as, "Dry Hole Billy." I hope that is not right, because of our commitment to the oil industry from which we hope we will be getting some reasonable return -- if not in oil at least in cash or jobs.

I do not mind supporting the bill. My colleagues may have more specific questions that would require a review in committee, but I am quite prepared for the bill go to third reading directly.

Mr. Charlton: Mr. Speaker, I rise to speak to Bill 79 from a bit of a split perspective. When we take the specific sections of the bill in isolation, we in this caucus find little objection to many of them as they stand on their own. However, if we relate the specific sections, as the minister has suggested, to the provisions of the budget of last spring, then we find we have some serious concerns with the things specifically laid out in this bill as they relate to the approach this government took in the budget.

We have no objections to the work the ministry has done in this bill in terms of clearing up some definitions concerning family farms. We are also happy to see the reduction of the asset requirements from 95 to 75 per cent, and the same with family fishing corporations. We have no objections to the attempt the ministry has made to plug loopholes. We sincerely hope the actions being taken in this bill to plug those loopholes accomplish what they are intended to.

However, I must refer to the whole question of the budget itself and the provisions the budget sets out and how that budget relates to this bill. The minister attempted to portray that relationship as, "This bill is the fulfilment of those things discussed and promised in the budget." Unfortunately, we do not see this bill in that light. The budget attempted to do a number of things, one of which was to increase substantially the revenues to the province through a number of the other items the budget dealt with. We had increases in personal income tax; we had ad valorem taxes on gasoline and motor vehicle fuel, which were not just tax increases but an endless series of tax increases that may some day haunt this government in its relationship with the public; there were increases in OHIP premiums; there were a whole series of items whereby this government attempted to deal with the question of revenue, and presumably tried to relate that to its budgetary deficit.

The specific provisions of this bill do provide some housekeeping and some clearer definitions and attempt to plug some loopholes in the taxation of the corporate sector in Ontario. But they do not deal in the same way as those other bills that were attached to this budget do, nor in the way we understood the Treasurer (Mr. F. S. Miller) to be saying about the budgetary policies of this government. They do not deal with the specific questions the Treasurer raised in the budget, the specific needs the Treasurer laid out for this government and for the province in the course of his budgetary endeavours in 1981-82.

My colleague the member for Brant-Oxford-Norfolk (Mr. Nixon) referred to this major sector when he referred to himself and his colleagues as the happy middle ground. The government has taken the position it needs additional revenue but seems prepared to get it on the backs of the individuals and the families of this province rather than from some of the other sectors they could also have dealt with. The member for Brant-Oxford-Norfolk and his colleagues, who feel so comfortable in that happy middle ground, may at some point not too far down the road also find themselves in a serious position with the people of this province if they, like the government, continue to support rather hefty tax increases in all those sectors dealing with personal taxes at the same time as they clearly support holding the line in the corporate tax sector.

We on this side of the House understand the arguments the government has made in the past about corporation taxes. On a number of occasions it has expressed clearly the pride it feels as a government over the level of corporate taxes in this province. It has bragged on a number of occasions about how they have kept taxes down in the corporate sector as compared with other provinces.

I would like to remind the Minister of Revenue and perhaps the Treasurer, although he is not here this morning, of the bragging they do about the corporate tax in this province. They have also on a number of occasions spent a lot of time in this House bragging about personal income taxes in this province -- bragging that the personal income tax rate in the province was -- and I emphasize was -- the lowest in Canada. On a number of occasions we have gotten into serious arguments with the government about whether or not that was true, in relation to the question of Ontario Health Insurance Plan premiums and whether they are a tax when you compare them with the tax structures of other provinces.

But that is an aside at this point. The decision that was made in this 1981 budget put that bragging and boasting into effect. But it distorted it in the case of personal income taxes and slapped on a rather substantial tax increase in a sector that this party has talked about repeatedly in relation to overall taxation policy as one of the areas that is fairest to tax.

We attempted to provide some opposition to increases in the personal income tax, not because we have changed our minds about whether or not that is one of the fairer taxes to move on for raising additional revenues but in relation to what the government is really saying in this budget -- its approach to that revenue by increasing personal income taxes and not touching the corporate sector at all.

12:20 p.m.

The Minister of Revenue referred a number of times during his opening remarks to the fact that this bill implements the policies that were set out in the budget of last spring. That is what we find a lot of discomfort with. In our view, this bill negates a number of things the government has bragged about in the past in relation to its approach to tax policy. In this past budget, the government has made it clearer than probably it has ever been before that its real philosophy in terms of tax policy is that the protection of its friends, specifically its friends in the corporate sector, is its ultimate and paramount priority.

Its second priority, perhaps, is this thing it has been hooked on for the last five or six years -- through a process of cutbacks, restraints and now tax increases, attempting to reduce the deficits with the eventual hope of balancing the budget. But the government has now made it quite clear that its intention is to go through that process, no matter whether it is a three-year, five-year or 20-year process, to get eventually to that point of balanced budget, if it ever does, by balancing the budget in this province on the backs of individuals.

The bottom line is that in every single instance in the budget of last April, the tax approach this government took was towards individuals. It not only went after individuals with the income tax increase, it also went after them with the gas tax and with OHIP premiums. It has made it quite clear it no longer intends to deal with the Corporations Tax Act; and that sector this tax represents is an important source of revenue, an important part of the budgetary process in Ontario.

This government made its first major approach to revenue increases in the last budget, as compared with the last five budgets where it nickled and dimed and played little games with all kinds of taxes. Not only did it do that but it found itself in some windfall situations earlier this year when it got some additional revenue out of the ad valorem gasoline tax that it had not even expected to get. It had not even budgeted for that.

The budget this year the Minister of Revenue refers to was the first major attempt in a number of years on the part of this government to increase revenue sources. It has said to the people corporation taxes are not a significant part of what we have to deal with in revenue collection in Ontario. Unfortunately it has not very clearly laid out why. It has not been fully honest with the people and it has not said out front why it has totally neglected to deal with this sector.

We have a bill here with a number of housekeeping provisions, most of which are fully acceptable in isolation and in their individual intent. But our caucus finds the bill as a whole, as it relates to the budget and the approach this government took to taxation in Ontario, extremely offensive. We feel as we did with the gasoline tax and a number of the other approaches that were made in the budget last spring.

We do not intend to oppose the bill because we still have to deal with its specific provisions, but we want it clearly on the record that the approach expressed in this bill is a totally unacceptable one. The people of Ontario have to be clearly brought up to date in terms of what this government is doing in its approach. That includes the approach of my colleagues to my right, as expressed by the member for Brant-Oxford-Norfolk in the happy middle ground.

The appropriate sector in this province is a sector that has never fully paid its fair share as it exists at present. It is far from paying its fair share. It is a sector whose effective tax rate is far less than that of the average individual working person in this province, and has been for a considerable number of years.

It is a pattern that has continued to shift against the individual with the assistance of this government and the federal government in Ottawa. That is a process which has been exaggerated in this bill and in the budget this year. It is a question we cannot allow to continue to go undealt with.

Mr. Wildman: Mr. Speaker, I will only speak briefly on this bill. I was goaded into speaking by the minister who said this bill was in some way bringing to fruition the principles of the budget and for that reason this House should support it. As my colleague has said, because of the specific provisions within this bill we will support it. But we cannot accept the philosophy of this government exemplified in the budget which basically said corporations should not share in an attempt by the provincial government to increase tax revenue.

It is rather difficult at this stage, this week, to talk about any kind of philosophy behind the budget statement of last spring. Last spring, when we received the budget it seemed what the Treasurer was saying was that he had a fiscal problem, that he wished to increase revenues, that he wanted to limit his deficit -- although not at the rate he had previously talked about -- and to keep it below $1 billion.

He wanted to increase his revenues, but he stated quite clearly in the budget statement that he could not move to increase corporation taxes significantly, that he had to maintain a good investment climate -- I believe that was the term he used in the budget -- that corporations had to have room to move and that it would be counterproductive to increase the corporate tax rate. So, as my colleague has said, he moved to increase his revenues by the new ad valorem tax on gasoline, but also by increasing the health care tax in this province. which we call OHIP, and the personal income tax rate.

12:30 p.m.

The reason it is rather difficult to talk about the philosophy behind that budget is that we had an announcement this week by the Premier (Mr. Davis) of the purchase of 25 per cent of the shares of Suncor. This does not seem to fit in anywhere with the budget statement or the philosophy expressed by the Treasurer at the time of his budget. Certainly it increases the expenditures on the government side. The only thing that might very obliquely relate to the purchase of Suncor in the budget is, I suppose, the ad valorem tax on gasoline which increased revenues to the government somewhat at the expense of the energy consumer of the province.

The increase in the deficit as a result of the purchase of Suncor is not in line with the Treasurer's philosophy. I think that was demonstrated yesterday when the Treasurer was put in the very uncomfortable position of defending that move. I suppose he, as Treasurer, was not really involved in the cabinet decision. I understand via the grapevine that only four or five cabinet ministers were involved. If the Treasurer was not really influential in it, the Minister of Revenue probably had even less influence in that decision, so it is rather difficult to talk about the philosophy of the budget.

I want to relate what we consider to be wrong with the bill. There has not been any move to increase revenue at the same rate or better from the corporate sector, while there was a concerted drive to increase revenue at the expense of the individual taxpayer who pays OHIP premiums in the province. The philosophy expressed last spring by the Treasurer is that one must leave the corporations with room to move -- there must be a good investment climate maintained in Ontario. Basically he was saying we must maintain the tax expenditures that we now have.

What he is really saying is that the taxpayers of the province must continue to subsidize the corporate sector because we forgo millions of dollars in corporate revenue that could flow into the coffers of Ontario through all sorts of incentive programs that have been put in place over the years supposedly to encourage corporations to do things they might normally not do because in their view it was not profitable.

Even when one follows that philosophy, and the argument used by the Treasurer, the irony in this whole thing is that when he was referring specifically to research and development in his budget statement he said the incentive programs provided by the government -- and for that matter by the federal government, I suppose -- to encourage an increase in research and development by the corporations operating in the province have failed. He doubted we would meet the 1.5 per cent of the gross national product target set by the federal government for 1985 if the present rate of R and D continues in this province. Basically he was saying that the incentives provided for R and D were not working.

The bankruptcy of the Treasurer's position was that the only proposal he had, other than the IDEA Corporation, was for the federal government to increase incentives for R and D in this country, because he said this provincial government could not afford to do that. He is saying it does not work, it has not worked, but the only option is to continue doing it; try, try again and maybe it will work. The fact is that what happens, when tax expenditures, incentives, tax write-offs and so on to the corporate sector are increased, is it usually increases profits in the corporate sector. It does not lead to the reinvestment, production of jobs and so on that it was intended to lead to.

If this government really intended to increase the revenue, to cut its deficit -- although that now has changed, of course; it has moved away from that six months later. I understand Tory thinking involves never thinking in the past, always in the present and the future. So something the government has said before is no longer operative. I do not know how long it takes for it to become inoperative, whether it is an hour, a week, a month or a year, but at any rate something said before does not count any more. I have learned I have to accept that with the Tories.

The government has obviously said now that it does not want to maintain its deficit at less than $1 billion this year -- unless the added revenue from ad valorem is going to help it resolve that, of course. It has bought into Suncor, but it has not been willing to move in the resource sector in this province. The arguments used by the Premier about Suncor could apply just as easily to uranium, when we talked about the uranium contracts for Hydro, but that is not related directly to the principle of the bill.

As I said, we support the bill because of what is in it, but we are very unhappy about what is not in it. The government that said it wanted to increase revenue has decided to increase revenue only by increasing taxation to the individuals and families of this province, by increasing the personal income tax rate, by significantly increasing the health care tax and by leaving the corporations to go scot free with an effective tax rate that is significantly lower than the effective tax rate for individuals.

I do not see how even this government with its philosophy can justify that. It is with great disappointment that we see this continuing trend of moving the tax burden away from those with the best ability and most responsibility to pay to those who are already hard pressed to get by in the difficult economic times we have today.

Ms. Bryden: Mr. Speaker, I think we have to look at this bill in its context as part of the post-election budget. We have seen the pattern the Conservative Party invariably follows of a no tax increase pre-election budget, then a lot of election promises, bribes and belated adjustments to starved programs. Then the government presents the bill in the post-election budget, but to whom does it present it? Not to all of the taxpayers, but only to the personal income taxpayers, the OHIP premium payers and the users of gasoline, tobacco and alcohol.

But the budget asks not a penny more from corporations. As a result, the corporate share of budgetary revenues in this province will be only 12 per cent in 1981-82, compared to 48 per cent for personal income taxes. Corporation taxes have dropped from 18 per cent of the share of budgetary revenue as an average in the decade ending in 1970 to 12 per cent today. I did not notice the Liberal Party fighting this trend in the budget in the same way as it filibustered against the gasoline tax. It seemed to let the corporations get off easy, the same way the government did.

This bill will further reduce the contribution of the corporations to budgetary revenues, because it does include some new tax concessions. The thing is, we do not know how much those tax concessions will amount to because the figures for what are called tax expenditures are not published, which, as my colleague mentioned, is one of the major leaks in our budgetary system.

12:40 p.m.

At the federal level, it has been estimated tax expenditures amount to about $30 billion. We have never been able to get the Ontario government to make an estimate of what tax expenditures amount to here, but we know they substantially reduce government revenues. I hope the next budget will bring us a figure on tax expenditures in Ontario. It has been done in a number of US jurisdictions and in other countries as well. It is now being done at the federal level.

Without that, we do not know what use the corporations are making of the moneys they gain from various tax concessions, some of which we are considering in this bill. We do not know whether the money goes to job creation here, to investment abroad or to corporate extravagances like executive jets. The Premier has joined in this kind of extravagance. We do not know how many jobs are created as a result of incentives given through tax expenditures. I hope the next budget will bring us that information.

By loading the entire amount of the tax increases in this year's budget, which amount to $603 million, on to the individual taxpayer, the government is adding to our serious economic recession. I call it a recession because the number of layoffs and the slowdown in the whole economy is really a recession today.

The government is adding to that recession because it is cutting the purchasing power of the average Ontarian by $603 million and is funnelling the money into nonproductive activities such as buying the cabinet jet and buying a share of Suncor. That expenditure needs to be looked at more closely in terms of what other investments could have been made in joint ventures that would have increased our job creation capacities in this province.

The Premier has yet to give us a good reason why this particular expenditure was made and the deficit increased by this amount in the next year or two. It would appear he is simply assisting his friends in this company to achieve a better tax position. He puts it in terms of increasing the Canadianization of the oil industry, but one questions whether in Ontario there are not more urgent things in which to invest in terms of job creation.

I think the Treasurer should have looked at various ways of adjusting the corporations tax to yield more revenue. He could have increased the rate by one or two points. He would have collected about $82 million per point. He could have withdrawn some of the tax concessions since he does not have any definite proof they are creating jobs.

He could have looked into the question of the capital gains tax and whether the province should move into the other half of it. He could have looked into resource taxes, which Saskatchewan is tapping to a much greater extent than we are. He could have looked at all these things, but instead he exempts corporations from any tax increases. This really reflects the government's philosophy that any money given to a corporation will produce additional investment and additional jobs. I ask the minister to prove this to us. We have no figures on it, and we still are waiting to see how much these various tax concessions amount to and what they actually do to the economy.

Therefore, though we are supporting the individual items in this bill, partly to ensure as much uniformity as possible between the federal and the provincial corporations tax legislation, we do think the province should look at increasing the corporate tax and withdrawing some of the additional tax concessions it gives in this province on top of the federal ones. That would get us moving towards a fair tax system, which we certainly do not have in this province at present. It would also increase the purchasing power of the people who are now carrying most of the tax load.

I hope that next year we will see a change in the trend to more and more concessions to the corporations and that we will get into a proper tax policy which recognizes that all taxpayers rather than just one section of the taxpayers should be sharing in the cost of paying for that very costly election.

Hon. Mr. Ashe: Mr. Speaker, first of all I would like to thank the honourable members for their general support -- and I appreciate the reservations added to that by the spokesman from the NDP -- for the bill per se and what is in it.

There were a few questions raised and a few things that I feel I have to clarify for the sake of the record. The member for Brant-Oxford-Norfolk (Mr. Nixon) referred to the elaborate procedure, et cetera, within the Corporations Tax Act. I acknowledge that I am not a corporate tax act expert, as he, I think, acknowledged he was. I think I could honestly say I have a pretty good general understanding of what is contained in this bill and would be prepared to answer questions accordingly within the Corporations Tax Act per se, without pretending that I am an expert by any stretch of the imagination.

The member raised a question about the entertainment corporations, particularly in the Hollywood of the north, which Ontario and more particularly I suppose the Toronto area has been known to be. I just want to assure him that within our corporate tax structure Ontario now does allow the same capital cost allowance to investors in a film as given by the federal government. So I do not think that we can go much further than that.

This particular section in Bill 79 pertaining to nonresident corporations and live entertainment is strictly that, live entertainment; it has nothing to do with the film industry per se.

Mr. Nixon: What could it be? What does the minister mean by live entertainment?

Hon. Mr. Ashe: Exactly that. The group or singer comes in and they are nonresident citizens, and it can be many different forms. Many different entertainers have different talents that they like to display in various forms. I leave it to the member's imagination to decide what form of entertainment best suits the individual purpose.

Mr. Nixon: I think we ought to tax some of those forms.

Hon. Mr. Ashe: Yes, different forms.

Mr. Nixon: All those Tories go down there and spend a lot of money on it, so we might as well get something back.

Hon. Mr. Ashe: The member for Hamilton Mountain (Mr. Charlton) made reference to the bill and the general budget approach. I have to voice some general disagreement vis-à-vis what the corporations tax does and what the philosophy of this government has been over quite a number of years, and actually put to rest the inaccurate interpretation that the corporate sector over the last decade has not generally been put through the same increases in taxation and is not contributing as much as or more than it did 10 years ago.

12:50 p.m.

First of all, Mr. Speaker, let me draw your attention to the budget document itself. This is a relatively short time frame, but I will expand upon it in a moment.

In the fiscal year 1977-78, corporation taxes contributed 9.4 per cent to the provincial revenues. In 1981-82, it was 11.2 per cent of provincial revenues. In my mathematics, 11.2 per cent is greater than 9.4 per cent.

Mr. Grande: Oh, come on! As the Minister of Education (Miss Stephenson) would say, that is totally illogical.

Hon. Mr. Ashe: The member said it was a lesser percentage of the provincial revenues.

Mr. Nixon: The minister is right.

Mr. Grande: It is a computation of money and wealth.

Hon. Mr. Ashe: It is a matter of dollars and cents that 9.4 is a lesser percentage than 11.2. The member can argue whether that should have been 20 and 30, and that is fine.

Let me also point out that, from the fiscal year 1971-72 to the 1981-82 estimates, the personal income tax dollars have increased by 328.6 per cent. That is just a little over threefold in that decade. On the other hand, looking at that exact same time period, the dollar contributions of the corporation tax sector -- we are not talking about percentage now; we are talking about their dollar contributions -- have increased by 353.1 per cent. The comparative percentage increases are 328.6 and 353.1.

The other thing that the New Democratic Party philosophy always fails to get through to me -- and I guess I am a little dense in that regard -- is the straight understanding that a corporation is some magical being in the sky. We happen to know that corporations ultimately are people. People own corporations in one way or another, people work for corporations in one way or another and, ultimately, corporations are people. So I find it very difficult to go along with this analogy about the corporate bum up there.

There was, of course, the reference that within this bill itself there is no increase in corporation taxes. It is true that there is no increase in this particular budget in the corporate tax rate per se. That is acknowledged and, I think, defended quite rightly by the Treasurer in his budget statement and since then on more than one occasion.

I point out and acknowledge that even the relatively minor changes within this bill will generate additional revenue beyond the growth rate of the various tax sectors of some $15 million. I appreciate that, out of a budget the size of Ontario's, $15 million is a relatively small sum, but it is an increase.

Let me also point out that the last year the personal income tax rate was changed was 1977. Since that time the corporate tax rates have increased on two occasions, from 12 per cent to 13 per cent and to 14 per cent. So, if one looks at those numbers, there has been a greater percentage increase in the corporate percentage since 1977, as well as more occasions of change, namely, two compared to one this year.

When people speak about actual rates of tax, it defies the arithmetic that they seem to come up with. They look at the corporate tax rate and say: "It is 10 per cent or 14 per cent, depending on whether it is a small business or otherwise. That compares with 46 per cent of a provincial tax rate." They subtract 14 per cent from 46 per cent and say that means the private individual is paying more than 30 per cent extra. Of course, that is a very inaccurate argument, as we all know, because we are talking about completely different apples and oranges.

When we are talking about our personal tax rate in the province of Ontario, we are talking about the percentage of tax that we put on top of the federal tax; it is a percentage of the tax. When we are talking about the corporation tax, we are talking about the taxable income of the company, and not the tax rate itself. As we all know, corporations have to fill in not only a provincial corporation tax return but also a federal tax return.

When one adds up those percentages -- and I can give members all kinds of numbers at any level they want -- let me assure them that the average corporate tax rate compares very well and is considerably higher than generally personal incomes are until you reach something in the order of $50,000 of personal income.

On other occasions and for other purposes, the NDP would suggest that somebody in the $50,000 tax bracket really should not have to worry about those kinds of problems anyway. But that is the case. If one looks at an average provincial income tax rate for somebody earning $50,000, it works out to 12.22 per cent. If one looks again at the corporation, it varies anywhere from 10 to 14 per cent, depending on the nature of the business and whether it is allowed the small business deduction. If one goes down into lower levels, to $20,000, the average provincial rate is down to just over nine per cent, which is even lower than the 10 per cent rate based on the small business deduction.

It is safe to say that the corporate sector in this province does pay, has paid and always will continue to pay its fair share of the provincial needs. More important, though, is the recognition that corporations are not pie-in-the-sky stars; they are not just a figment of the imagination. Corporations are people, and without corporations and without people we would not even be here at all.

I hope I have covered most of the points. I would like to make sure I have answered all the points raised today. I would prefer to look at the transcript from Hansard today and respond on Monday.

On motion by Hon. Mr. Ashe, the debate was adjourned.

The House adjourned at 12:57 p.m.