32nd Parliament, 1st Session




























The House met at 10:01 am.




Hon. Mr. Ashe: Mr. Speaker, on May 26, the member for London Centre (Mr. Peterson) inquired as to the status of two corporations registered under the Small Business Development Corporations Act, Arcturus Small Business Development Limited and Medlon Small Business Development Limited.

I pointed out at that time that an investigation by the staff of the ministry was being undertaken and that I would report further at a later date to the extent possible given the secrecy provisions contained in the Small Business Development Corporations Act.

I also want to correct some of the facts contained in comments the member for London Centre made with respect to these two SBDCs during the second reading debate of the Small Business Development Corporations Amendment Act, 1981.

An investigation of the affairs of Medlon and Arcturus by the ministry confirmed that specific actions undertaken by or at the instigation of senior management of the companies in the period between mid-January and mid-April of this year were contrary to the provisions of the Small Business Development Corporations Act. As a result of these actions, the registrations of the two corporations were subject to revocation.

On July 15, I served a formal notice on Medlon and Arcturus of a proposal to revoke the registration of the two companies following the 60-day period required by the Small Business Development Corporations Act. It was recognized that the deregistration of the two small business development corporations may not have been in the best interests of the small businesses in which the SBDCs invested, of District Trust, the financial institution which financed the funding of the SBDCs, or of the original shareholders of the SBDCs, the vast majority of whom appear to have been unaware of the actions being undertaken by management.

The proposals of July 15 were made on the understanding that the revocations of registration of Medlon and Arcturus would not be carried out if an appropriate business plan was devised and implemented for the operation of the SBDCs and the small businesses.

The investors previously had retained Mr. Don McDougall, a management consultant, to conduct an investigation and make proposals for the future conduct of the SBDCs to realize the best possible return for the investors.

As a result of this report, negotiations were undertaken on behalf of the shareholders with District Trust and, on August 21, District Trust concluded a settlement with the shareholders of both Arcturus and Medlon. This settlement included a takeover bid for all of the outstanding shares of the SBDCs, and approximately 85 per cent of the shares of each company were tendered to District Trust under the bid.

On September 9, District Trust provided the ministry with an outline of its plan to reorganize the affairs of the two SBDCs and to assist four of the five small businesses in which the SBDCs had invested to continue and enhance their business operations.

District Trust had engaged the services of a management consultant in an attempt to determine an appropriate course of action in respect of the fifth small business, and the final report of the consultant was unavailable at the time District Trust made its submission to the Ministry of Revenue.

I am satisfied that the proposals advanced by District Trust will result in future compliance by Arcturus Small Business Development Limited and Medlon Small Business Development Limited with the technical provisions and the spirit and intent of the Small Business Development Corporations Act.

As a result, on September 11, I informed Arcturus and Medlon of my attention to abandon the proposal to revoke the registration of the two companies.

Since September 11, District Trust has announced a reorganization of its assets whereby a subsidiary would be formed to hold the shares of the two SBDCs, Medlon Small Business Development Limited and Arcturus Small Business Development Limited, together with the shares of Lonmed Holdings Limited.

The shares of the new subsidiary are to be transferred to the shareholders of District Trust by means of the declaration of a special dividend. This reorganization was made necessary by the requirements for trust companies established by the department of insurance.

The asset reorganization undertaken by District Trust will not affect the status of Medlon and Arcturus as small business development corporations. The business plan for the SBDCs and the small businesses outlined to the Ministry of Revenue by District Trust will continue to be implemented.

As I mentioned at the outset of my statement, I want to correct certain impressions created by the comments of the member for London Centre during the recent debate on amendments to the SBDC legislation.

The prospectus provided to the prospective investors when Medlon Small Business Development Limited was capitalized outlined the operations and the financial conditions of the small business in which Medlon ultimately purchased shares. Based on this disclosure, each investor had an opportunity to evaluate the potential success of the SBDC. The prospectus for Arcturus provided similar disclosure on one of the two small businesses in which Arcturus purchased shares.

The member for London Centre created the impression that the SBDCs raised their capital from the London area investors and then set about searching "frantically" for small businesses because of the requirements of the legislation. At any rate, the legislation merely requires that an SBDC invest 40 per cent of its capital in small businesses by the end of its first year of registration as an SBDC.

The member for London Centre stated that many of the investors did not fully understand the legislation or that an amount equal to the grants paid could be recovered by the province under certain circumstances. Once again, I point out that the prospectuses for the two SBDCs contain several specific references to the ability of the province to recover an amount of money from the SBDC equal to the grants paid to the individual investors.

The member for London Centre correctly stated that a third company, Lonmed Holdings Limited, was created to be an ordinary investment corporation outside the SBDC program. Lonmed was capitalized by means of joint offering with the shares of Medlon Small Business Development Limited, but the activities of Lonmed were not subject to review by the staff of my ministry administering the small business development corporations program.

Most, if not all, of the specific investment examples cited as abuses by the member for London Centre were made by companies associated with the non-SBDC holding company. The two SBDCs and the small businesses in which the SBDCs invested ran into financial difficulties after funds were diverted from these companies to cover losses experienced by Lonmed Holdings Limited and its associated companies. It was the diversion of funds in the period between mid-January and mid-April of this year that was the key contravention of the provisions of the Small Business Development Corporations Act.

10:10 a.m.

The honourable member stated that officials of my ministry and myself were terribly embarrassed by the situation of Medlon and Arcturus and that the decision not to deregister the corporations was made to avoid embarrassment. As I mentioned earlier, my conclusion was that the deregistration of the two SBDCs would not be in the best interests of the parties concerned, namely, the small businesses, the SBDC shareholders and District Trust.

Under the circumstances, the proposal by District Trust offered the best chance for the survival and ultimately the growth of the five small companies invested in by the two small business development corporations.

While I regret the events surrounding these two SBDCs, I must say that I am not in any way embarrassed by the actions of the staff of my ministry in relation to Medlon and Arcturus. The whole matter came to light at the time when the SBDCs would have been obliged to provide the ministry with audited financial statements and annual returns.

Given the relatively short period of time over which funds were improperly diverted, earlier detection of the problems would have required the ministry to monitor the ordinary business transactions of the corporations. As a general principle, it is both impractical and undesirable for the ministry to attempt to oversee the day-to-day operations of small business development corporations and the companies in which the SBDCs have invested. The main purpose of the SBDC program was to establish pools of risk capital that would be made available to small businesses.

The ministry's information program has been careful to point out to and advise prospective SBDC shareholders that an element of investment risk is ever present and that it is the responsibility of the shareholders to evaluate these risks. Indeed, the share certificates themselves point this out to shareholders in a cautionary message printed on the certificate.

In this kind of program, shareholders are expected to take these risks in return for the incentive grants of 30 per cent made available to them through the program. It would be great if every investment made was successful, but this simply does not happen with risk capital. Losses will occur from time to time and are not unexpected.

In addition to this, legislation provides for strict reporting requirements on a periodic basis. The SBDCs and the companies in which they invest must provide information initially in the form of affidavits. This information is confirmed periodically by the filing of annual and information returns together with audited financial statements. In addition, the ministry has conducted and will continue to undertake audits on an ad hoc basis of SBDCs and small businesses.

The situation surrounding Medlon and Arcturus has been clouded in rumour and innuendo. The investigation conducted by the ministry established that many of these rumours are not based on fact and that the errors contained in information presented by the member for London Centre indicate the extent to which the affairs of Medlon and Arcturus may have been misunderstood.


Hon. Mr. Ashe: Mr. Speaker, yesterday I was in the midst of a statement when, through distractions and time consumption by others, I was unable to finish. I would like to end it off today, because I think it is a positive type of statement that recognizes the contribution by this government and by my ministry to the seniors of this province.

Just summarizing what I said yesterday, I indicated a program in which the government was in the process of issuing to seniors approximately 1.4 million cheques and recognizing that, since this is a rather massive program, some technical problems do arise in that. But it is safe to say --

Mr. Bradley: The administration of that plan is disastrous, and you know it.

Mr. .J. A. Reed: I wish you would check on some of the consumers in my riding.


The Deputy Speaker: Order, please.

Hon. Mr. Ashe: Mr. Speaker, if the members opposite had a 99 per cent efficiency rate, such as this program does, they would be more than happy and would not be sitting in their rather minute numbers across there.

The Deputy Speaker: Continue with your statement, please.

Mr. O'Neil: Mr. Speaker, on a point of personal privilege: When the minister makes comments like this, I want to remind him that, as far as personal privilege concerns my constituency office, this morning I spoke with one of my constituency secretaries, and my office for the past couple of weeks has been swamped with hundreds upon hundreds of calls.

The Deputy Speaker: Order, please.

Mr. O'Neil: No. I feel that I should be able to finish, Mr. Speaker. I might also say that when my constituents call the numbers that the minister has given, they are unable to get through to that office. When I call, when my constituency office calls the minister's office --

The Deputy Speaker: Order, please.

Hon. Mr. Ashe: It sounds like question period.

The Deputy Speaker: Indeed. Mr. Minister, are you going to continue with your statement?

Hon. Mr. Ashe: Yes, I will, Mr. Speaker.

Mr. Riddell: All over the Premier's signature.

Hon. Mr. Davis: I don't think I signed them. The scrolls, I sign; the cheques, I don't.

The Deputy Speaker: Order, please. The minister has the floor. Mr. Minister, will you continue with your statement?

Hon. Mr. Ashe: Mr. Speaker, I will recommence my statement at the beginning of the paragraph in which I left off.


The Deputy Speaker: Order, please. The minister has the floor.

Hon. Mr. Ashe: I will carry on, Mr. Speaker. The Ministry of Revenue also recognizes that some seniors eligible for the property tax grant did not receive an application form in September. This was an expected development and came as a result of a ministry decision to avoid mailing application forms to ineligible seniors, such as those in nursing homes and similar institutions, as was done in the first year of the program.

Inevitably, therefore, a small percentage of eligible seniors did not receive application forms, largely as a result of changes in accommodation and personal circumstances. Such people have been encouraged through media advertising to contact our ministry, thereby initiating the manual production of an application form, which is mailed to them within three weeks.

In conclusion, I again point out that while most seniors now have returned their forms and have had their applications approved for payment by the ministry, problems remain with some accounts; we do not deny this. Whether these difficulties lie with errors in the completed applications or in ministry processing, let me emphasize to the honourable members that we are working diligently to resolve them as quickly as possible.


Mr. Kerrio: Mr. Speaker, I rise on a matter of personal privilege to correct the record as it relates to a statement made by the Minister of the Environment (Mr. Norton) yesterday.

Although we appreciate the extra effort the Minister of the Environment is making with respect to the Stouffville landfill site and drinking water concerns in the area, I wish to correct the statement that the minister made yesterday.

The minister was correct in his statement that the citizens' group from area had refused to name its laboratory. But he also said they did not share the methodology used by the lab for sampling and testing.

The report that was given to the minister's staff gives three areas, and the final one is the methodology used by the laboratory and given specifically to the minister's staff. It comes as a surprise to me that the minister is unaware of that situation.

It is no wonder they have such difficulty understanding what is going on with water quality across the province when the minister's staff gives him such statements as he read to us yesterday.

I hope the minister is going to put the priorities in order and get on with the testing and with making sure of the safety of the water supply, not only in the Niagara River but also in all the wells and situations that exist across the province.

Hon. Mr. Norton: Mr. Speaker, if the honourable member had either listened to or read more carefully my statement yesterday, he would know the reference to the methodology and the concern about the lack of detailed information about it was, I believe -- I am speaking now from recollection -- specifically related to the inability to discuss the details of the technology or the methodology with the laboratory since we were not advised as to which laboratory had done the testing. That was the reference that I made.



Mr. Smith: Mr. Speaker, if I may, I want to address a question to the Treasurer.

The Treasurer undoubtedly is aware of the comments by Mr. Tom Kierans, who was described in the Toronto Star of October 18 as "the brain behind the bid by Ontario for big oil stake," and we are all aware of his many positions in the Ontario Energy Corporation, as the head of the brokerage that recommended the deal and as the head of the Ontario Economic Council.

10:20 a.m.

Does the Treasurer agree with the views of Mr. Kierans as quoted in the Toronto Star of October 29, in which Mr. Kierans said that Canadianization of the oil and gas industry is ruining Canada's relations with the United States.

He contended, and I am quoting from the article, "that there would be little public support for nationalistic policies such as the new energy and industrial programs if Canadians knew what the costs were." He goes on to criticize the Canadianization program.

Is the Treasurer in agreement with Mr. Kierans as quoted in the Toronto Star?

Hon. F. S. Miller: Mr. Speaker, I did not happen to be at that meeting of the Ontario Economic Council; I believe that is the forum he was using for this speech.

I have great respect for Mr. Kierans's abilities both as an investment broker and as an economist. I think he has given freely of his time and of his advice to this government. I respect him for stating his points of view clearly.

I would not say that I always agree with him, but I would hate to think that in this province we did not encourage intelligent, gifted people to express freely their points of view even without the cachet of approval of this province.

Mr. Smith: Mr. Speaker, it will be noted that the Treasurer did not answer the question as to whether he agreed or disagreed with the views of Mr. Kierans concerning the Canadianization policy. But from his earlier statements we suspect that the Treasurer agrees wholeheartedly with those views of Mr. Kierans.

Is the Treasurer aware of the latest profit figures for Suncor, which were published just recently and which indicated that the profit for the first nine months was 95 cents a share, compared with $4.86 a share one year earlier?

Is the Treasurer aware that at the rate of profit that has been reported for this year and that is likely to continue for this year, it will never be possible in a million years for the government of Ontario to pay for even half the cost of the Suncor deal, the 25 per cent?

Is he aware that it will never be possible for the government of Ontario to pay for that out of profits unless there is a vast increase to about six times this year's rate of profit in the Suncor operation?

Hon. F. S. Miller: I am certainly aware that the profits for the latest period were down dramatically. I am also aware that I believe there were different pricing arrangements for the Suncor synthetic oil plant and the Syncrude synthetic oil plant in advance of the Canada-Alberta oil agreement and that the Canada-Alberta oil agreement materially changed the profitability of the synthetic oil facilities of Suncor.

But I give the Leader of the Opposition one more message. In my private business life, any time I have made a good investment I have bought a company when its profits were down, knowing they were going to come back up.

Mr. Kerrio: All speculators do that.

The Deputy Speaker: Order.

Mr. Cassidy: Mr. Speaker, since the leader of the Liberal Party of Ontario --


The Deputy Speaker: Order. Please continue with your question.

Mr. Cassidy: Will the Treasurer communicate to the Leader of the Opposition the position on Canadianization of the oil industry which has been taken by the Honourable Marc Lalonde and by the federal Liberal government, and will he ask the Ontario Liberals to get together with the federal Liberals to determine which side of this issue they happen to be on?

Mr. Bradley: The enemy is over there.

Mr. Nixon: The NDP is in bed with the Tories.

Hon. F. S. Miller: Mr. Speaker, one of the great advantages of having two opposition parties in this House --

Mr. Cassidy: What about moving to the left, Stuart? Remember that?


The Deputy Speaker: Order, please. Mr. Treasurer, you are answering the question, I understand.

Hon. Mr. Davis: Remember Mel Hurtig's speech to your convention? Remember what he said about it?

The Deputy Speaker: Mr. Treasurer?


The Deputy Speaker: Order, please. Allow the Treasurer an opportunity to respond.


The Deputy Speaker: Mr. Treasurer, will you please respond? Never mind the interjections.

Hon. F. S. Miller: I am being very tranquil. I am waiting for the bullfrogs and bullhorns over there to shut up.

Mr. Nixon: You look like four failed undertakers.

Hon. F. S. Miller: One of the great advantages of this House is that there is always two official opposition parties --

Mr. Kerrio: No, there are not; there is only one.

Hon. F. S. Miller: Well, two opposition parties --

Mr. Smith: You pay them as though there were two.


The Deputy Speaker: Will you answer the question, Mr. Treasurer, please?

Hon. F. S. Miller: It is germane.

Mr. Nixon: Quit stalling.

The Deputy Speaker: Order, please.


The Deputy Speaker: Mr. Treasurer, will you please respond to the question.

Hon. F. S. Miller: What was it? What was the question?

I am now trying very hard to reconcile their point of view that 51 per cent is the least we should have and their point of view that zero per cent is the least we should have with the positions of the federal Liberals and the provincial Liberals.

Let me say that if I have learned anything in the past few years since the Leader of the Opposition took office, it is that he is buddy-buddy with Trudeau the day it counts at the polls but he is sure opposed to him on the day he thinks it does not.

Mr. Smith: If the Treasurer feels that he has bought this company when it is low and that it is going high again based on the Canada-Alberta oil agreement, does the Treasurer see any irony at all in a situation where he and his Premier have spent the last several years distorting our position on oil prices to say that we were for the world price when, in fact, we were not?

He now tells us that the only hope he has for profit on this speculative and dangerous venture of his is that Suncor from now on, by the new agreement, will be allowed to charge the world price for its oil. Does the Treasurer see any irony at all in the fact that he is now counting on world price for oil to make this speculative deal anything less than a financial disaster?

Hon. F. S. Miller: One would have to study the Canada-Alberta agreement quite carefully to find the categories of oil pricing in it; some of them are considerably less than world price, and the average Canadian price continues to be less.

The Ontario position was always consistent, although the member often chose to misinterpret it. That position always was that the price of oil of all types should not be increased until such time as an agreement was reached between the producing provinces and the federal government on the distribution of oil, until such time as steps were taken to ensure security of supply in this country and until such time as the ways and means of redistributing the surpluses across the provinces were determined.

That was our position in 1979, and it remains our position.


Mr. Smith: Mr. Speaker, I have a question for the Minister of the Environment.

The minister undoubtedly is aware of the reports that have appeared in newspapers recently concerning the 417 parts per trillion of dioxin found in carp from the Niagara River near the Love Canal.

Is it the minister's understanding that there is a substantial quantity of dioxin buried in the Love Canal as a consequence of the actions of the Hooker Chemical Company in the late 1940s and early 1950s? Is there dioxin there?

Hon. Mr. Norton: Mr. Speaker, there is no specific knowledge of quantity of dioxin, if there is dioxin present there.

Mr. Kerrio: There are about 2,000 pounds.

Hon. Mr. Norton: The Leader of the Opposition's critic has just thrown out one of the figures that is speculated in terms of the Niagara area, but it is clearly not known specifically. The estimates range all over the map, in fact.

Mr. Smith: Is the minister at all concerned that Mr. Grant Mills, who is regional director in the west-central region and a man on whose advice he relies regarding interventions on the Hyde Park dump and other areas, stated yesterday that while he has heard of the dioxin's existence, he still believes that it is not specifically known that there is any dioxin there; he has heard talk about it, but he does not really know that it is there?

How can he say that, and how can the minister say that he is not at all sure of the matter, in view of the documentation in The Ravaged River, for instance, and in the definitive book by Michael Brown, Laying Waste, which is the book on the Love Canal and the dioxin question, which makes it very plain that there are some 170 pounds of tetradioxin buried as a consequence of the actions of the Hooker Chemical Company in the Love Canal.

If the minister and his chief officials in this matter are still unsure as to whether there is dioxin in the Love Canal, does that not go some distance towards explaining their hesitancy to protect our interests in this area?

10:30 a.m.

Hon. Mr. Norton: If the member had listened to my earlier response, I did not say the uncertainty related to whether or not there was but rather to speculation over the quantity. He used the figure of 170, and his own critic just said 2,000 pounds. That is a very good illustration of the kind of speculation that has taken place.

Mr. McClellan: Mr. Speaker, I wonder if the minister will give us an undertaking to prepare and table in the House a summary of all the testing that has taken place by his ministry for dioxin in fish, listing the number of fish that have been tested and the results since the testing began, to date and henceforth.

The reason I ask is that there seems to be a certain degree of ambiguity, at least in my mind, as to how much testing actually has been done and whether the ministry is doing the kind of testing his predecessor said would be undertaken when he made the commitment back in December 1980.

Hon. Mr. Norton: As I think the honourable member knows, Mr. Speaker, we made the results of our testing available as soon as it was completed on the --

Mr. McClellan: On 14 fish? Is that all the minister has done?

Hon. Mr. Norton: No, not 14 fish. For goodness' sake, the member knows we released the results of the tests in June or July this year, and then this very week we released the results of further tests on nine fish, which is part of an incomplete testing program.

I felt it was important to release that information as soon as we had it, because of the results that were detected. We have always made the information available as soon as we had it or very shortly thereafter.

Mr. Smith: Is the minister not aware that in the book Laying Waste, by Michael Brown, it is indicated that Bruce Davis of Hooker Chemical admits to the existence of dioxin there and it is pointed out that, according to the calculations of Mr. Whiteside, there would be 130 pounds of tetradioxin in the Love Canal.

Does the minister not understand the point I was making in my first question, that Grant Mills, the chief Pooh-Bah in that area, when asked by my own researcher the day before yesterday, did not argue quantity but said that, although it has been speculated that dioxin is buried in the Love Canal, he does not personally know of its existence and he is not prepared necessarily to believe it is there?

Will the minister kindly talk to his expert in the area, give him a basic reading list and make sure the people representing Ontario's interest at least have read the fundamental documents on this matter?

Hon. Mr. Norton: I do not propose to speculate about conversations the honourable Leader of the Opposition's minions have with people wherever. If he wants to, he can converse with me. I have already stated my views on that subject. He knows what I have said.

In so far as he is relating this alleged conversation with a man for whom, I might say, I have a great deal of respect -- he is much more competent than some of the people the member relies upon -- I suggest that the member rely on his conversations with me or his questions in this House rather than speculating about other conversations.


Mr. Cassidy: Mr. Speaker, I have a question for the Premier. Is the Premier aware that the campaign contributions of the member for Ottawa South (Mr. Bennett) included 45 companies connected to the real estate industry? They included not only a number of companies in construction and real estate in the Ottawa area but also major Toronto area developers like Markborough Properties Limited, S. B. McLaughlin and Company Limited, Costain Limited and Nu-West Development Corporation Limited?

Does the Premier not think it is improper that the minister responsible for housing should be accepting campaign contributions from so many companies in the industry in which the minister is required to regulate and make planning decisions? Would it not be healthier if we had limits on spending by candidates in this province so that a minister did not have to put himself into that kind of improper position?

Hon. Mr. Davis: Far be it from me to say there were two questions rather than one, but the reality is there were two questions. First, was I aware and the answer to that is no. I confess, knowing some of the decisions of this government. I am a little surprised that some in that industry were forgiving enough to make a contribution. Second, the question of who contributes is public. That is the important aspect and it really is not relevant to the amount of expenditure.


Mr. Cassidy: For the record, 66 of the ridings won by the Conservative Party were also ridings where they spent more money than either of the other two parties. That is why they are applauding.

Contributions are clearly related to spending. And the Minister of Municipal Affairs and Housing would not have required $20,000 in contributions from developers and people in the real estate industry if he had had a $27,000 campaign rather than a $74,000 campaign -- in other words if he had spent sensibly. In view of this, would the Premier be willing to put this matter into the hands of an independent tribunal to determine whether they would recommend that there be spending limits on campaigns? Specifically, would the Premier be prepared to refer this matter to the election expenses commission and have them report back to the Legislature within a year?

Hon. Mr. Davis: I should also point out that the contributions made to the Progressive Conservative Party are made, as I believe they are to the Liberal Party of Ontario, on a totally voluntary basis. People make that determination for themselves. There is no pressure; there is no indication they have to contribute to certain funds in order to support a political party. They do it because they want to do it. I know that offends and upsets New Democrats because that is not the way people contribute to their party. I think the public is a little tired of the sour grapes --

The Deputy Speaker: The member for Ottawa Centre on a point of order.

Mr. Cassidy: Is the Premier suggesting that people do not contribute voluntarily? Is he not aware that when workers contribute via the checkoff, they --

The Deputy Speaker: Order. The member for Ottawa Centre is out of order. Continue, Mr. Premier.

Hon. Mr. Davis: I think the honourable member should do some calculations and look at his total expenditures and the number of seats. I would only refer to the campaign in Ottawa South. I do not know what the totals are, but the Progressive Conservative in that riding could have spent less and won by as large a vote. I am not going to argue that because the NDP was never in the ball game. No one in that riding would have any support for their philosophy even though the leader happened to live next door. He had great difficulty convincing even his own constituents to support the political point of view he was trying to persuade the people of Ontario to accept.

The member should please understand one thing. We can debate the amount of expenditures; I do not quarrel with that. I am prepared to debate it any time. But the fact remains he lost because he was not able to convince voters his approach to the economic and social wellbeing of the people of Ontario made any sense. It is as simple as that. He lost because he did not have the policy. I will not put it on any personal basis as to his own ability to project those policies he supports.

Mr. Conway: My supplementary touches on my concern about the Premier's response to the leader of the New Democratic Party and it deals with the expenditure side. Since there is apparently a wide degree of public support for the federal ceilings which limit expenditure at the local level I want to know in the name of what public morality is it acceptable in this province that the taxpayer, through the political tax credit, should subsidize the extravagance of an open-ended expenditure? In other words, why are we going to allow endless expenditure at the local level?

10:40 a.m.

In the name of what public morality is it that the taxpayer, through the political tax credit system, should subsidize that extravagance to the point where we now see the taxpayer subsidizing $8,000 post-election parties? These and a variety of other expenditures surely violate the spirit, if not the letter, of the initial electoral reforms entered into in this province some five or six years ago.

Hon. Mr. Davis: Mr. Speaker, I do not quite follow the logic of the honourable member's question. I really do not.


Hon. Mr. Davis: I will tell the member for Wentworth North (Mr. Cunningham), who is probably most able of anybody over there to demonstrate that attitude of sour grapes, why his party lost. Does he want to know why? No, I will not tell him.

The Deputy Speaker: Mr. Premier, would you respond to the question?

Hon. Mr. Davis: Mr. Speaker, I do not really follow the logic. The law makes it very clear that every member who receives whatever percentage of the vote is entitled to the same basic amount. If the honourable member is suggesting that some member should and some member should not, I would question not "the morality of it" but the equity of it. How does the member make that sort of determination? How does he know what an individual candidate may raise in the next election, for instance?

I think the legislation which this House voted upon and which was accepted, was based upon the equity of every candidate receiving the same measure of support. That was the underlying principle. I would be surprised if the honourable member, in thinking it through, would want to upset that principle.

Mr. Cassidy: I want to put this question very seriously to the Premier. He is entitled to his opinion that there is no need to have any limit on the spending in local campaigns by candidates for the Ontario Legislature. After all, 66 of the winning Conservative candidates were the top spenders and, therefore, it is obviously in the interests of the Conservative Party not to have any limit on spending.

However, is the Premier prepared to have the question of whether there should be ceilings on spending by central campaigns and by candidates in Ontario referred to a nonpartisan inquiry which could be carried out by the election expenses commission? Is he prepared to measure his opinion against the opinion of that nonpartisan body and have that body come back with a report and recommendations to this Legislature on which we can subsequently act or not act depending on the will of the House? Will the Premier agree at least to make the reference to the election expenses commission on the question of ceilings on spending in election campaigns?

Hon. Mr. Davis: With great respect. while the commission operates I hope in a nonpartisan fashion, to say that it is a nonpartisan body when the NDP appoints to it, when the Liberal Party of Ontario appoints to it, really is not expressing the facts. It is not a nonpartisan body.

The member can go through riding by riding and he will find in those ridings where the Progressive Conservative candidate was successful they quite possibly had better campaigns. I quite honestly cannot recall the exact amount in the riding of Brampton, but one has to look at some of the figures. The member has the figures there. He has them all. I do not carry them around with me. It was something like 540,000 or 552,000.

I have probably in the neighbourhood of 70,000 voters. I think I am fairly close. The population is about 120,000 to 125,000. All the member has to do is calculate in my riding, as an example -- if my figures are roughly correct -- it means it is about 75 cents per voter. That is what our expenditure was. It was somewhere in that neighbourhood. I cannot give the member the exact amount.


Hon. Mr. Davis: I am not saying whether it is a sensible limit. I am just saying the member is including me as being one of the extravagants.

The Deputy Speaker: Order, please. We will have a new question.


Mr. Cassidy: Mr. Speaker, I have a new question of the Minister of Consumer and Commercial Relations who is supposed to be responsible for protecting the consumers. The government did nothing to investigate the wholesale milk price increases that took place in February and in August, and which together have added about eight cents a litre to the price of milk this year. In view of this would the minister say what he intends to do when, on Monday, Neilson's dairy has indicated it intends to add two cents a litre to the price of milk on top of the two cents a litre which has been awarded by the Ontario Milk Marketing Board for farmers?

Hon. Mr. Walker: Mr. Speaker, that is the same question the member for Welland Thorold (Mr. Swart) asked last week. Is that where the member is getting his research now, by reading old Hansards? Maybe he can ask the question he asked two weeks ago.

The Deputy Speaker: Answer the question please.

Hon. Mr. Walker: I answered the question two weeks ago. We have been discussing it quite thoroughly in the estimates process downstairs. The member might like to drop in there and continue it further.

I note the price of a three-quart bag is $1.89 today in the Dominion store. It is worth knowing that. The member's question involved the Neilson company. It is interesting that the NDP members raise all kinds of different companies. The critic, the member for Welland-Thorold, raised the question a few days ago that related to Silverwood and chose not to report all the figures that were presented. It was very convenient some reference was made to all the great profits Silverwood was making, but he failed to mention that in the first six months of 1981 there was a substantial loss. I find it interesting the member is very selective in his choice of names and the choice of ones he wants to bring out.

Mr. Cassidy: Since the minister gave a totally irrelevant answer, perhaps I can ask the question again. Since the farmers have to justify before the milk marketing board every penny of any increase they get in the price of milk, why should not the same apply with respect to the wholesale price charged by the dairies?

Why is it the dairies, Neilson in particular, on November 1 are going to take a two cents a litre price increase with no requirement to justify it? Why will the minister not move in to protect consumers and make dairies justify their wholesale price increases the way the farmers have to?

Hon. Mr. Walker: What the member is really advocating here is simply a form of wage and price control.

Mr. Swart: Supplementary. Mr. Speaker: Does the minister not realize -- and he must -- that eight out of 10 provinces have some form of price review between the farm gate and the consumer? Is the minister so out of touch with reality that he does not realize the retail prices of milk in Quebec average six to seven cents per litre less than in Ontario?

Quebec has approximately the same consumer marketing system and population as we have here. Does the minister realize in Quebec the dairy as well as the farmer must justify any increase? So must the retailer. Hearings are held where the consumers have a voice. If they can sell that milk that much --

The Deputy Speaker: Question please.

Mr. Swart: -- cheaper in Quebec and pay the same to the farmer, does the minister not think we should have that kind of system here?

Hon. Mr. Walker: Mr. Speaker, I had some difficulty hearing the member. Maybe his microphone was not on, I am not sure. Maybe he had it in his mouth. It was all muffled.

The Deputy Speaker: Come on, respond to the question.

Hon. Mr. Walker: It is very interesting how --


The Deputy Speaker: Respond to the question.

Hon. Mr. Walker: I am just trying to quiet down the other side. They are a bit rambunctious this morning. They are having their normal Friday morning blues.

The Deputy Speaker: Respond to the question.

Hon. Mr. Walker: It is interesting that the leader of the New Democratic Party has just determined in effect that he wants price controls in relation to the wholesale price of milk. He is saying they must appear and justify. On the other hand, the member for Welland-Thorold has referred to price reviews that other provinces may have. There is quite a substantial difference between the two.

It is interesting the leader of the NDP raised the question of Neilson; Neilson has reported to us this is their first fluid milk price increase since February 1, 1981 -- a period of nine months. Yet in the same interim period they too have had substantial increases. For instance, their energy costs alone have gone up. They wrote us a letter dated October 26 in which they asked --

10:50 a.m.


The Deputy Speaker: Order. Order. Are you going to respond to the original question from the member for Welland-Thorold (Mr. Swart)?

Hon. Mr. Walker: That is exactly what I was doing, Mr. Speaker.

The Deputy Speaker: New question.


Mr. McGuigan: My question is to the Minister of Agriculture and Food, Mr. Speaker. It relates to the evidence presented before the Royal Commission of Inquiry into Discounting and Allowances in the Food Industry in Ontario and the pressure exerted on the farmers and independent retailers by the trade practices of major chain stores. Given these and given the latest supermarket price war would the minister assure this House, the farmers and independent retailers that this battle will not be fought on the backs of Ontario farmers?

The minister realizes the chains have little effect on imported products, because the prices of these products are set in a market of about a quarter of a billion people -- there are several questions here. The price of --

The Deputy Speaker: Let us try to have one question. Try it again. One question -- now.

Mr. McGuigan: Does the minister realize the chains have little effect on imported products. because those prices are set in a market of a quarter of a billion people? Does he realize they do have a tremendous effect on the prices of domestic Ontario products, which are set in a market of just over eight million people?

The Deputy Speaker: Thank you. We have the question.

Mr. McGuigan: Will the minister call on the heads of these companies --

The Deputy Speaker: Order, please. We have heard the question.

Hon. Mr. Henderson: Mr. Speaker, there is a combination of questions -- not a lot of questions, but a combination. Would the honourable member please single them out and ask me? I will answer them, but will he give me one at a time so I can answer them and so he will not get his mind clouded?

The Deputy Speaker: We are having difficulty here. Let us try a supplementary.

Mr. McGuigan: I think my supplementary sums it up, Mr. Speaker: Will the minister call on the heads of these companies and tell them that he will not stand by and watch them fight the war until the last farmer and the last independent retailer is dead?

Hon. Mr. Henderson: Mr. Speaker, I am trying to understand the question. Do I take it the honourable member is suggesting the stores should not engage in this competition? Is that the intent of the question?

Mr. Smith: No. He is not saying that at all.

Hon. Mr. Ashe: Sure he is. Indirectly he is.

Hon. Mr. Henderson: Is that the intent of the question, Mr. Speaker? My concern is the pressure that these stores might put on the individual farmer, and if the honourable member can bring in a report from any individual farmer that this type of pressure is being put on --

Let me take this a step farther. I remember reading in the paper recently -- like this week -- that the price of beef in these chain stores has gone down five or six cents a pound. In the same paper I read that the small packing companies are paying four cents a pound less for the beef. So if the chain stores are applying it they are applying it to large companies that are processing the beef, and they in turn are buying it cheaper from the farmer. That is the part that really concerns me: the overall farm economy, the prices the farmers are getting. And this is brought on by the high cost of borrowing money, caused by the government of Canada.

Ms. Copps: Final supplementary, Mr. Speaker: The honourable member mentioned two elements of society who are being particularly hurt by this -- small farmers and small businesses. Was I correct in hearing the minister say the only group he was interested in was the small farmers? Was he not interested in the small business persons, who were one of the areas mentioned in the supplementary raised by the member for Kent-Elgin? Is his government not concerned about the small business person in this province?

Hon. Mr. Henderson: It is easy to see the honourable member was not listening and really is ready to destroy the economy as are her federal colleagues. This government is interested in the total economy, at whatever level one wants to take it -- small business, the farm machinery agents, the little storekeeper and, more important, the farmer and the consumer. We are interested in both -- that they have the appropriate supply of food at a price at which the farmer can afford to supply it.

Ms. Copps: Mr. Speaker, on a point of privilege: The minister said 'his only concern,' and Hansard will read that way. He may want to stand up and change his statement, but that is not what he said in this House.

Hon. Mr. Henderson: Mr. Speaker, I am not changing my statement. This government is interested in every citizen in this province.


Mr. McClellan: Mr. Speaker, I think the Hammy award went to the wrong member.

I have a question for the Minister of Health with respect to Peat Marwick and Partners consulting report on the Queen Street Mental Health Centre which is located in my constituency. The members will recall the minister has refused to make the interim report available, but I have a summary of that report which was prepared for department heads at Queen Street.

My question is with respect to problem area number 10, the large number of absent without leave patients identified by the consultants. Can the minister explain how many patients per day, both voluntary and involuntary, go AWOL? Can he explain why it is that voluntary patients at Queen Street are apparently able to leave the hospital clad in pyjamas without anybody paying any attention? Second, why is it that involuntary patients who are there on a certification are permitted to leave the hospital at all?

Hon. Mr. Timbrell: Mr. Speaker, I think it is fair to say one of the recommendations coming out of this review is that the philosophy which has governed the operation of that hospital for a number of years needs to be changed. More needs to be done to effect secure arrangements for those who need secure arrangements.

The purpose of engaging Peat Marwick to do an external review of the hospital was generated by our conviction there were indeed problems in that hospital's operation which required an objective external examination to assist us in ensuring that, once completed, the program was appropriate for all -- the staff, the patients and the community.

I did not know it was in the member's constituency. I thought it was in the constituency of the member for Parkdale (Mr. Ruprecht).

Mr. McClellan: He has the boarding homes. I have the hospital.

Hon. Mr. Timbrell: The member may, too. That is one specific problem which led us to conclude the time was right to examine the operation and particularly to re-examine the philosophy which guides it and to make the necessary changes.

Mr. McClellan: I asked the minister this privately and raised it on a matter of privilege. I asked him privately a second time. I ask him publicly if he will make an undertaking to table in the House the interim report of the Peat Marwick consultants. That interim report calls for a major change in the role of the Queen Street Mental Health Centre to one of providing tertiary care -- that is long-term chronic care -- for approximately 60 to 70 per cent of its patients.

I would ask him to table that report and, second, to table the full report of the Peat Marwick consultants before a final decision is taken by cabinet and the government. In this way, those who are concerned -- and it is not just those in the mental health field who are concerned but everybody in the health care system who will be affected by a major shift in the role of Queen Street Mental Health Centre -- can have an opportunity to see and discuss the report before a final decision is taken by government.

11 a.m.

Hon. Mr. Timbrell: Mr. Speaker, if it is the honourable member's impression that Queen Street Mental Health Centre is not now serving a tertiary care role then I am afraid he is mistaken. That is not something new. Queen Street Mental Health Centre, together with the other nine provincial psychiatric hospitals, serves a tertiary or regional role.

When the report is finalized, as I indicated to the member last evening, it will be released. I am sure whatever are the contents of the final report, whatever are the decisions of the government, any changes that will take place at Queen Street Mental Health Centre will not occur overnight. They will take place over a considerable period of time. We accept that we have the responsibility in the ministry and in the government to decide on what those changes will be and to take responsibility for them.

Mr. Ruprecht: Supplementary, Mr. Speaker: Is the minister now prepared to reinstitute a committee that was established at one time to deal especially with housing of ex-psychiatric patients in the Parkdale area? Will he make a commitment that people leaving psychiatric centres, especially the Queen Street Mental Health Centre, will be able to find housing accommodation? In short, is he able and willing to reinstitute that committee that looks after people who are leaving, especially this psychiatric institution?

Hon. Mr. Timbrell: Mr. Speaker, perhaps the honourable member was not in the House a few weeks ago when we discussed this matter, but I indicated that we have established an assessment unit at Queen Street Mental Health Centre to examine the needs of our dischargees. Also we have begun, with the assistance of a number of outside organizations, to try to access available housing accommodation for people who require it. The bulk of our patients, when they are discharged, go back to their own homes, but there are a number who do require assistance. So we are already doing that.

If the member would like, I will be glad to send him a copy of a letter I sent to the district health council two or three weeks ago that outlines all the things we are doing with respect to the housing needs of discharged patients, particularly those who require some form of a more supervised atmosphere than a totally independent one.


Mr. J. A. Reed: Mr. Speaker, I have a question for the Minister of Energy (Mr. Welch). On Monday, the government revealed the results of a very extensive study that shows the tremendous potential in Ontario for the development of peat resources, which are one of the great potential energy areas for the future in this province. On Tuesday I asked the minister a question about the wisdom of investing $650 million in Suncor. In his answer -- and I would like to read it into the record -- he said, "So I do not think the honourable member serves the people of the province well by attempting to convey the impression that we are ignoring other areas of responsibility."

Almost within 24 hours of that time -- I think it was a little prior -- the Minister of Natural Resources (Mr. Pope) said there was no incentive or investment in the peat industry being undertaken by the province. All he said was that some incentives were being contemplated. So I would like to ask the minister just what incentives are being contemplated for the private or the public development of peat resources in Ontario?

Hon. Mr. Welch: Mr. Speaker, I think it is very important to emphasize the importance of context. The honourable member raised a question on Tuesday near the end of the question period. I am sure if there had been time, and in supplementary questions, there could have been some expansion on the answer. The honourable member, in fairness, will realize it was the very last question and he did not even have time for a supplementary question.

I started off by saying it was not an either/or proposition from the standpoint of looking after the security of the energy requirements of the people of Ontario. We had to be active and involved on a number of fronts. He made some reference to the Suncor transaction. I would remind him that for the present and the foreseeable future, the hydrocarbons -- that is oil and gas -- will form a very prominent place in the energy requirements of Ontario. At the moment it represents about 65 per cent of our total energy requirements.

In the meantime we have to be busy -- in the name of crude oil self-sufficiency and for a number of reasons which the honourable member and I have talked about during estimates and on other occasions -- doing things in the alternative energy areas and building on the indigenous resources of the province. In fact, as a provincial jurisdiction we have established a goal in this province of 37.5 per cent of our total energy requirements coming from resources indigenous to Ontario.

It is obvious, as a result of this symposium, that peat will form a very important part of that consideration, as will lignite, as will uranium, as will our hydraulic resources and soon. We have already shared with the honourable members of this House the investments that we are making over a period of time to accomplish those goals and to reach those targets. We will obviously be encouraged now as a result of this symposium to do some further work with respect to this particular resource, as we are doing in a number of other areas. That is the context in which I gave an all too brief answer at the end of the question period on Tuesday.

Mr. J. A. Reed: I appreciate there was no time to get into supplementaries last Tuesday but the impression was clearly left, and I could read the whole answer, that while responsibility was being taken in these other areas, other parts of the government suggest that there is no investment in these other areas. I am asking a very simple question: What incentives are being contemplated for the private or the public development of peat in Ontario, and have any decisions been made?

Hon. Mr. Welch: In answer to the second part, no decisions have yet been made. The whole principle behind the alternative transportation fuel program announced a year ago in this House was our involvement and our investment with respect to research and development and to bring some of these developments to a particular level that might be attractive to the private sector.

That alternative transportation fuel program, a five-year program, was announced a year ago. It is there for the member for Halton-Burlington and all members of the House and the people of Ontario to see the initiatives we are taking on a number of fronts.

Mr. Stokes: Supplementary, Mr. Speaker: For the benefit of the member for Halton-Burlington, I would like to ask the minister why he did not mention the $58 million Canada-Ontario agreement, dollars for industrial demonstration projects, that was touted by both federal and provincial representatives at the peat symposium in Thunder Bay on Monday and Tuesday?

If the minister is aware of this program, will he support my application to this program so that Ontario Hydro will conduct such a program or project to develop the peat resources indigenous to the area of Armstrong, where they are paying 40.5 cents per kilowatt hour for energy at the commercial rate? Will the minister undertake to support my application to the program so that Ontario Hydro will act as the vehicle for a demonstration project?

Hon. Mr. Welch: Mr. Speaker, I am familiar with that program and I assume the honourable member who has asked the question is familiar with the program. We have discussed it in our estimates as a shared program between the government of Canada and the government of Ontario. Certainly I would want to stop short of making a commitment with respect to any particular application until we have had the opportunity to review. It is sufficient to say at this stage that I am attracted to the tremendous potential we have in this province because of the extent to which we have these holdings.


Mr. Swart: Mr. Speaker, I have a question for the Minister of Agriculture and Food. In view of the indifference of the Minister of Consumer and Commercial Relations (Mr. Walker) to the dramatic increase in the retail price of milk, does it bother the Minister of Agriculture and Food that the farmers' share of the retail price in Ontario is dramatically reducing, while it is being held or increasing in most other provinces in Canada?

Does the minister know, for instance, that in Manitoba the farmers' share of the retail price of milk has increased by four per cent in the last three years; in Alberta by two per cent; and in Saskatchewan by six per cent, while the farmers' share here has dropped by six per cent in three years? Does he know that the increase which is going to take effect Monday will reduce that still further? Is the minister willing to intervene on behalf of the farmer to see that he gets his proper share of these increases?

11:10 a.m.

Hon. Mr. Henderson: Mr. Speaker, it is too bad the honourable member for York South (Mr. MacDonald) -- the asphalt farmer -- is not here. Yesterday I hand delivered to that member a copy of a letter from the chairman of the Ontario Milk Marketing Board. That letter set out the percentages that the farmer is getting at the gate for his milk here in Ontario, and it compares it with eight jurisdictions all around the world.

The farmer in Ontario is getting something like 64 per cent, and it is fine with the chairman of the milk marketing board, Mr. Ken McKinnon. It goes on and points out that there are areas of the world where the farmer gets only 45, 48, 54 per cent.

I personally have looked at the price of milk around the world, and I find that wherever we go the farmer gets about a cent an ounce for fluid milk. I find the price paid by the consumer for the three-quart pack here in Ontario is about as cheap as it is in any jurisdiction.

Sure, we may find a place where instead of paying $1.75 or $1.80 for the three-quart pack they might be paying $1.74. But, all in all, the consumer in Ontario is getting as low a price as the majority of the world.

Mr. Cassidy: Where has the minister been? He is two years out of date.

Hon. Mr. Henderson: No, I am not.

Mr. Swart: I might remind the minister that he does not have jurisdiction over the price of milk around the world; he has jurisdiction here over what the farmer gets, whether he gets his fair share.

Does he not know that a farmer in Quebec, where they have a market similar to what we have here, gets a substantially higher share than a farmer does here? Would he please answer my question, when he gets up, on why in other jurisdictions, in all the populated provinces but Ontario, they have been able to increase the farmer's share while it is dropping here?

Hon. Mr. Henderson: The other provinces just increased them to the percentage the farmers in Ontario have been getting.


Mr. Riddell: Mr. Speaker, I have a new question for the Minister of Agriculture and Food. Since the cabinet meeting with the Ontario Federation of Agriculture on Wednesday, in which the president of the OFA called for the declaration of a state of emergency in the farming industry, has he had a chance to discuss the matter further with the Premier (Mr. Davis), and is he now convinced that the $3 billion investment in Suncor over 10 years would have been better spent on the farming industry in order to get it back on its feet, since the farming industry provides one job out of every five here in Ontario?

The Suncor investment will provide no additional jobs, and it is questionable whether it will provide benefits of any kind here in Ontario. Has the minister had a chance to discuss with the Premier what the government can now do to get the farming industry back on its feet?

Hon. Mr. Henderson: Mr. Speaker, apparently the honourable member does not want to assure a supply of energy to our farmers. We in the government are interested in making certain that there will be energy for our province to operate on. The Premier of this province is fully aware of all the activities within this province. We have an opportunity for dialogue with our Premier that apparently the member opposite does not have with his leader.

Mr. Riddell: I notice the Minister of Energy (Mr. Welch) was very quick to get a little memo over to the minister. I was expecting his usual response -- that it is a federal government jurisdiction.

When is this government going to stop blaming the federal government? Has the minister ever stopped to consider that maybe the federal government MPs are not too concerned because they know all the other provinces have a program implemented to help their farmers? Therefore, it may be very difficult for the Ontario MPs to convince all the other MPs there is a problem here in Ontario.

With that consideration, does the minister not feel it is time to implement a program here in Ontario similar to those of the other provinces in order to give the farming industry here the lift it has to have before we in Ontario lose the status of being the breadbasket of Canada?

Hon. Mr. Henderson: Mr. Speaker, I have really been wanting an opportunity to give a few facts and figures. The honourable members over there ignore this, but they know that we as a government have already given $20 million to the finished-beef farmers in this province. Let us look at Durham, Bruce and Grey, the three counties where all the noise comes from that we are doing nothing. We have put $6.5 million into those three counties in the last three months through beef stabilization, and the member says we are doing nothing. He knows better.

Mr. Wildman: Supplementary, Mr. Speaker: Can the minister please explain why in Ontario -- where he is concerned, as he said, with the supply of fuel for farmers -- he cannot also match the program that was brought in for low interest loans in Saskatchewan, where they are also concerned about the supply of fuel for farmers?

Hon. Mr. Henderson: Mr. Speaker, the honourable member really has not studied our budget or he would be able to tell this House that 60 per cent of the budget that comes under my ministry goes out in the form of direct subsidies to the farmers -- not as interest or anything, but direct subsidies. And yes, his riding gets some of it, too. He knows that full well.


Mr. Cooke: Mr. Speaker, I have a question for the provincial Treasurer. I would like to know if the minister is aware of the rather desperate condition the city of Chatham is in with an unemployment rate of over 11 per cent and an unemployment rate among auto workers in that city of 25 per cent? Is he further aware that there have been massive layoffs at Canadian Fram, Motor Wheel, Eaton Yale and Rockwell, which has just closed down a plant, just to name a few plants, that their welfare budget has gone up 33 per cent in 1981 above 1980 --

The Deputy Speaker: Question.

Mr. Cooke: Is the minister aware of this, and what is he planning for Chatham and many of the other cities in southern Ontario that are suffering from extremely high unemployment because of the high interest rate policy of the federal government?

Hon. F. S. Miller: Mr. Speaker, of course I am aware, because for one thing we have a very fine member from Chatham-Kent (Mr. Watson) who keeps me fully informed about the problems of that area. That member deals with the ministers of government to try to tackle the fundamental problems of our economy, and the member helped me, as the opposition pointed out, by naming the most important one. Mr. Iacocca, no less, said that he has three problems in the automobile industry: high interest, high interest, high interest. That problem emanates from the federal government.

Does the member know that today the interest rates in Canada are between three and four per cent higher than they are in the United States simply because the incompetence of and lack of confidence in the federal government are driving many a Canadian manufacturer out of the country through lack of trust?

The Deputy Speaker: The time for questions has expired.

11:20 a.m.



Hon. Mr. Wells moved that the House adjourn on Tuesday, November 10, at 6 p.m. and stand adjourned until 2 p.m. Thursday, November 12.

Motion agreed to.

Hon. Mr. Wells: Mr. Speaker, this means the House will not be sitting on the evening before the November 11 holiday. I might also inform the members that it has been decided we will begin Monday evening sittings on November 9.



Mr. Eves, seconded by Mr. Cousens, moved first reading of Bill Pr32, An Act respecting the Town of Bracebridge.

Motion agreed to.


Mr. Eves, seconded by Mr. Cousens, moved first reading of Bill Pr33, An Act respecting the Town of Gravenhurst.

Motion agreed to.


Mr. Eves, seconded by Mr. Cousens, moved first reading of Bill Pr34. An Act respecting the Town of Huntsville.

Motion agreed to.


Mr. Foulds: On a point of privilege, Mr. Speaker: On October 16, I placed question 145 on the Order Paper asking the government to table any documentation leading up to the decision to purchase Suncor other than the glossy material the Premier (Mr. Davis) had at the press conference on the Suncor deal. I asked them to table any documents such as those that were done for Project Wellesley when Hydro was thinking of taking over the uranium mines. I also asked the government to table the agreement in principle that was reached and signed, presumably on October 13.

Today it is 14 days since that question was placed on the Order Paper and there has not been an indication either from the minister or the government House leader that even an interim answer is forthcoming. I would request that information before the end of the day.

Hon. Mr. Wells: Mr. Speaker, I will be glad to check that out for my friend. Obviously, I do not think anything will be ready today. I apologize for the delay and I will see if I can get an answer.

Mr. Breithaupt: Mr. Speaker, with respect to the same theme, if one looks at question 150, additional information is being sought by the opposition concerning the matter of fees and commissions with respect to the firm of McLeod Young Weir in this same matter. If the information can be made available today as well, this would be most helpful.

The rest of the questions, obviously, are within the two-week frame, but these two points in questions 145 and 150 raised on the Order Paper by the member for Port Arthur and the member for London Centre (Mr. Peterson) would provide information to the House which would be most appreciated.

Mr. Van Horne: Mr. Speaker, on a point of order in the same vein as the earlier two members, I was hoping the Minister of Consumer and Commercial Relations (Mr. Walker) would be here so I could raise this point: On June 16, 1981, I asked a question related to the Housing and Urban Development Association of Canada funds which were available for claimants. I specifically asked if the minister would investigate the criticism and report back to the House with respect to the broadening of the term "major structural defect." His response was: "Yes, I will get that information for the member."

We have called his ministry on a number of occasions to try to get this response and it has not been forthcoming, and here we are, some five months later. Is there any way we could impose on the government to see that the minister does provide that information for us?

Hon. Mr. Wells: Mr. Speaker, I think the proper way to handle that question is to direct the question to the minister from whom the member wishes the information. If he has not provided it, the member can ask him why and indicate that he wishes the answer. I do not think there is any other way of handling that particular matter. It is at the discretion of the minister how he answers the question.



Hon. Mr. Wells moved resolution 11.

Reading dispensed with. (See Votes and Proceedings).

Resolution concurred in.


Hon. F. S. Miller moved resolution 10:

That the Treasurer of Ontario be authorized to pay the salaries of the civil servants and other necessary payments pending the voting of supply for the period commencing November 1, 1981 and ending March 31, 1982, such payments to be charged to the proper appropriation following the voting of supply.

Hon. F. S. Miller: Mr. Speaker. I have no opening statement.

Mr. Smith: Mr. Speaker, I rise to discuss this motion by the Treasurer at a time which is most propitious in the financial affairs of the province of Ontario.

We have just had distributed to us Ontario Finances, dated September 30, 1981. Ontario Finances indicates the most significant change that I have seen in one quarter since coming to this House in 1975. This change is due partly to bad budgeting and partly to the poor performance of Ontario's economy. However, it is due mainly to a very major purchase entered into by the government of Ontario.

We are aware that this purchase involves a 25 per cent interest in the Suncor business, a company which although it does refining and marketing in Ontario is primarily involved in the extraction of oil from the tar sands of Alberta, and is engaged in a certain degree of exploration in frontier lands with respect to attempts to find oil and gas in this country.

11:30 a.m.

We have repeatedly asked for the vital information upon which this major expenditure was based. We are told such information is contained in a report by the respected brokerage house of McLeod Young Weir. Further, we are told an analysis of the business end of this deal is contained in a report from Price Waterhouse. Yet, although the government apparently utilized these reports in the decision to make this purchase, it has denied the opposition access to those same reports.

We in the opposition believe that if democracy is to have some meaning, then when the most major purchase is made by the government of Ontario -- at least in the time I have been here representing the good people of Hamilton West -- when we are asked to say "yes" or "no" to supply, when the government wants money to spend and when it spends it primarily on matters such as Suncor -- which according to Ontario Finances is the main reason for the tremendous increase in the deficit at this time -- we think we are entitled to the same information the government had at its disposal when it made the decision. We can conceive of no reason whatever why, in the democratic process, the opposition should be denied that kind of information.

We have asked for a compendium. What did we receive? We received what must be classified as either a bad joke or a calculated insult to the opposition. We received an amalgam of tired old speeches and public statements written for the Minister of Energy (Mr. Welch), presumably by the people in his department. They undoubtedly form the basis for excellent commercials on television, but they in no way form a basis for the decision to buy Suncor.

We are given the front page of Suncor's annual report, a matter available to everybody and a matter available to the 12 or so companies which looked at Suncor as a possible purchase and decided against it. We are given little else. We are given nothing of real substance.

We are not the only ones concerned about this lack of information. Frankly, there are more Conservatives in this House concerned about it than there are Liberals. The fact is the decision to purchase Suncor was announced on a day when there was a Tory caucus meeting. As you know, Mr. Speaker, from personal bitter experience, the meeting came to an end not two hours before the Premier (Mr. Davis) announced this major decision in this assembly. Yet not a word of it was breathed to the Tory caucus itself.

Although one can respect the Premier's judgement that the Tory caucus could not be trusted to keep quiet for two hours -- apart from a willingness to accept he might have been right in that respect -- they have been just as much insulted as we have been.

Let me go beyond that. We are told on good authority the cabinet itself was kept totally in the dark with the exception perhaps of the Treasurer, who opposed the deal, the Minister of Industry and Tourism (Mr. Grossman) -- we are not sure what he said about the deal -- and the Minister of Energy (Mr. Welch), who presumably said: "Yes, sir. I am all for it. Whatever you say, Mr. Premier."

Our understanding is that probably not even one other member of cabinet was told about the deal before it was announced in the Legislature. This secrecy is very hard to understand. I could understand they might have felt it would affect the shares of Suncor if they were traded, but the shares are not traded. How could this secrecy have affected the stock exchange? It is hard to understand that.

Furthermore, it is incomprehensible what justification may exist for this secrecy after the deal has been announced. Why should we be denied the basic information from Price Waterhouse and from McLeod Young Weir, and any other relevant information upon which the Premier of Ontario saw fit to make this purchase?

It is interesting to note the people who are opposed to this purchase. The most recent interesting addition to those who are opposed likes to style itself as Toronto's other voice. It is the Toronto Sun. There was an editorial on October 29 in the Toronto Sun, a newspaper which I must admit I do not normally read and certainly do not normally quote in this Legislature, but I quote it only out of the irony which is involved.

On the Suncor deal they say: "With a revitalized NDP" -- which they refer to as "honest, open Socialists" -- "and a fresh provincial Liberal Party, once the taint of Trudeau has gone, Ontario Tories will be thrown out by the people. The way things are going, the Sun will do what it can to help get rid of them."

That comes from the party's official organ in Toronto. That certainly must give pause to the Tories. After all, it is doubtful that the Sun will be likely to support "honest, open Socialists" of any kind, so presumably it will support what it terms a "fresh provincial Liberal Party, once the taint of Trudeau has gone."

The only thing that is going to be gone from this party is me. I do not know if I am the taint of Trudeau in the mind of Mr. Worthington -- I have difficulty understanding anything in the mind of Mr. Worthington -- but conceivably if I am the taint of Trudeau and I will be leaving, this party will then enjoy the dubious distinction of having the support of the Toronto Sun, which is not something I would look forward to, frankly, if I were staying.

Mr. Nixon: Can't you see Claire Hoy praising us day after day?

Mr. Smith: If I were staying, I have to confess I would not really look forward to that. I would have to question anything we stood for if we found ourselves with the support of that paper.

But the interesting point -- and the point that is not lost on the Treasurer who happens to agree totally with the Toronto Sun on the Suncor deal, and who would have left by now except that he agrees even more with the pay cheque he receives every month -- is that this is a deal that simply is not acceptable to thinking people in Ontario.

I do not know how the Treasurer can ask for supply in this House and expect us to grant supply when he will not even share with us the reports upon which that important decision was based.

It is my intention -- in fact I will move it at the end of my speech -- to move an amendment. The amendment will read -- I will move the amendment now.

The Acting Speaker (Mr. Cousens): Mr. Smith moves, seconded by Mr. Nixon, that government motion 10 be amended to read, "commencing November 1, 1981, and ending December 31, 1981."

Mr. Smith: May I speak to this motion?

The Acting Speaker: Order. I am disappointed at the conversation going on at the side which is disrupting the speaker. Carry on, Mr. Smith.

Mr. Smith: Thank you, Mr. Speaker. Speaking to the motion, the Treasurer will surely understand --

The Acting Speaker: I say to the honourable member, I really respect what you are saying and I would ask that other members would carry on a more quiet discussion or go outside the House if it is going to continue.

Mr. Sweeney: He does not even hear you, Mr. Speaker.

Mr. Shymko: I was speaking to the --

The Acting Speaker: We would ask you to respect the fact that another member has the floor and it is disruptive. I am hearing the sounds of your conversation.

11:40 a.m.

Mr. Shymko: Mr. Speaker, on a point of privilege: I have been approached by a member from the opposition who is constantly asking me questions and I am simply answering --


Mr. Shymko: I apologize, I will not --

The Acting Speaker: The apology is accepted. The member for Hamilton West has the floor.

Mr. Smith: Mr. Speaker, the Treasurer will understand the great difficulty the opposition is placed in, when we are asked to grant supply to the government and that government has refused to share with us the fundamental basis for the decision that has been made. I will be very glad to withdraw my amendment if the government will produce, during this morning's debate, the Price Waterhouse study and table it, the McLeod Young Weir study and table it, as well as any other relevant information that led the government to its decision.

Failing that, Mr. Speaker, it is my intention to speak at some considerable length on this particular amendment and, if it so happens that in speaking at considerable length I find myself running to the end of the time, then the government will not have supply after tomorrow. The Treasurer shrugs and implies it does not matter. Well, Mr. Speaker, I would like to quote from October 30, 1979, not long ago, when the Treasurer himself said, "Any delay in supply is a confidence question. I think that is one thing we have to recognize."

Hon. F. S. Miller: You have to have the vote first.

Mr. Smith: The simple fact is that although special warrants can be issued when the House is not in session, the government will not have access to special warrants because the House is in session. If the government does not get supply today -- and it is my avowed intention to make sure it does not get supply unless it produces the documents it has been withholding from us, which the people of Ontario have every right to know about -- then I believe the government will have suffered a loss of confidence in this House, and I use the Treasurer's own words on the matter of what the implications of a delay in supply of any kind happen to be in a democratic situation.

You will know that by tradition, Mr. Speaker, the people seek redress of their grievances at the time the government seeks supply. I do not stand here lightly to try to block the government's supply. I have never done that sort of thing. I am prepared to give the government supply and withdraw my amendment, but I am not prepared to give the government supply when I honestly and deeply in my heart believe it is withholding vital information from the people of Ontario, information that need not be withheld and that there is no justification for withholding.

I honestly feel I would be derelict in my responsibilities as leader of Her Majesty's loyal opposition to allow the government to receive supply in the absence of reasonable information of the kind we have requested to have tabled in this Legislature.

I want to explain why we are so concerned about this information so you will understand, Mr. Speaker, that this is not a frivolous matter with us. The Financial Post referred to the justification for Suncor as "flimsy." The heading was "Flimsy Reasons for Suncor Purchase." I think they are correct. I think the reasons are flimsy.

I want to make clear the view of this party on the Canadianization program of the federal government. This is something that seems to vex the leader of the third party, but then again so many simple matters vex the leader of the third party. But the position of the Liberal Party is that we support the Canadian government in its Canadianization program. Frankly, we have nothing against the idea of governments owning oil companies -- nothing against it philosophically at all.

In my view, the government of Canada has a responsibility to own oil companies. I never again want to see the government of Canada dependent upon the information given them by oil companies to decide if we do or do not have reserves, a need to export, a need to import and so on. I support the Canadianization program fully. The Treasurer and I differ there. He is against the Canadianization program.

Hon. F. S. Miller: No, I am not.

Mr. Smith: The Treasurer says he is not. Later on in my speech I will get to what he said to Le Devoir about the Canadianization program. There he made it plain he believes the Canadianization program is actually behind the loss of confidence that has occurred in the Canadian dollar and is one of the reasons we are stuck with high interest rates which he thinks are damaging to the economy.

It is hard to know how he can be in favour of a program which is doing the amount of damage he thinks it is doing. He has said and I quote, "To spend the taxpayers money to buy oil companies is a misallocation of resources and a waste of time." So he is against the program.

However, I am for the program. I believe Canadianization of oil companies is a good idea. If Alberta or Saskatchewan wanted to buy one of the oil companies doing business in their province, seeking to use the resources of that province, I would have no objection. In fact, I personally favoured the purchase of Denison Mines by Ontario Hydro.

If we were going to get all our uranium from somebody, and give them hundreds of millions of dollars up front, interest-free, with a guarantee of billions of dollars over the course of 30 years, I thought it better to buy the company. I thought it made good sense. It would have been a heck of a lot cheaper. I have no philosophical difficulty.

Mr. Wildman: It was not that way in the committee.

Mr. Smith: I agree with the member. There were certain members of my party who did not feel that way. The member for Algoma (Mr. Wildman) is correct. I am giving my view. I have no difficulty with that. It is not a philosophical problem for me, nor is the Canadianization a problem the way it is for the Treasurer. I strongly support Canadianization of our economy.

I think the Treasurer has undoubtedly seen the study which shows that even when our dollar goes down, we do not benefit in Ontario very much. Branch plants in manufacturing continue to import from their mother companies no matter what the price and we get no benefit, therefore, of the lower dollar.

That Statistics Canada study based on the year 1978 shows plainly the need for Canadianizing Ontario industry. However, it has never come to my attention that the oil sands were an Ontario industry. I find it very difficult to understand the benefit of Canadianizing the oil sands by using Ontario taxpayers' money which we do not even have, but have to borrow. Why should Ontario set that as a priority? If they want to Canadianize something, let them Canadianize manufacturing and they would have my full support. But they did not do that.

We are told the best aspect of this deal is the financial aspect. The Treasurer has said it does not create jobs. He has said it does not create security of supply for oil. They have admitted that. Not an extra barrel of oil is going to come our way because we are sitting there with 25 per cent of the shares of Suncor -- not one barrel.

So they have said it is a good deal financially. The Treasurer has said, "I do not know if we needed it, but the price was good." That is essentially what the Treasurer told me that fateful day when I attacked him a little in the House. I felt badly on a personal basis. He looked very pale. I wish him no personal harm, as he knows, because I like him as a human being and a fellow politician. But he looked very pale the day I raised the issue of his basic opposition to this deal.

What he said, in essence, was: "I do not know if we needed the damn thing but the price was good. I could not resist the bargain." It reminded me of a guy who has a family at home. There is no food for the kids. The roof is leaking. He does not have any money and things are not going well. The domestic economy is kind of running down a bit and --

Mr. Kerrio: He is in deficit.

Mr. Smith: He owes a lot of money already, that is right. He goes to his bank and he convinces the bank manager he has to have some dough because the kids are not eating well, the roof is leaking, the furnace is not working very well.

11:50 a.m.

So he gets the money. As he is going downtown to spend it a guy meets him on a street corner and says, "Hey, buddy. How would you like to buy 25 per cent of a racehorse?" And the guy looks and says --

The Deputy Speaker: Is the member speaking to the amendment?

Mr. Smith: Oh yes, because it is the financial information on the deal that is relevant. All right?

The guy asks, "How would you like to buy 25 per cent of a racehorse?" And he goes and takes this money and buys 25 per cent of a racehorse.

Please understand: I have nothing philosophically against buying racehorses. I think there can be excellent racehorses.

Mr. McClellan: It might have been a left-wing racehorse.

Mr. Smith: Yes, that is the question. And it is even conceivable that, as racehorses are bought and sold nowadays, the price may have been a bargain. It may have been a lot less than he would have paid at E. P. Taylor's annual auction. I do not deny that. It is even conceivable that a few years from now the damn horse may even win a race or two. I do not say it is impossible, but it is irresponsible.

If anybody receiving welfare from the province of Ontario to patch the leaks in his roof and pay for heating and get food for his family went out and bought a racehorse he would be cut off the welfare rolls for irresponsibility.

Hon. Mr. Sterling: How can you compare a racehorse with an oil company?

Mr. Smith: It is a question of the price, Mr. Minister.

Hon. Mr. Sterling: It is a question of the investment.

Mr. Smith: What the Treasurer says, essentially, is that we may not need an oil company -- it will not give us any oil, it will not give us any security of supplies, it will not fill any jobs in Ontario -- but it is a bargain.

That way I can compare it with some other bargain he might have been sold on his way to the forum. A funny thing happened to him on the way to the Legislature: Some guy, Tom Kierans, calls him aside and says. "I think you ought to buy Suncor" -- the same Tom Kierans who now says the whole program is ruining the country -- that he is dead set against it.

This Tom Kierans must bean interesting guy. I do not know if he is a knave or a fool. On the one hand --

Mr. Rotenberg: He is a Liberal.

Mr. Smith: He is not. He happens to be a very significant Tory, a well-known Tory, as the member for Wilson Heights should know. He is the son of a Liberal -- granted. But he did not see the light: he went the wrong way and became a Tory. I cannot help that. I happen to know the man personally, so I do not want to insult him. But under other circumstances, when a man is the brains behind the Suncor deal --

All right? This is how he is referred to. On the Ontario Energy Corporation he recommends the deal; in McLeod, Young, Weir Limited he recommends the deal; on the Ontario Economic Council he recommends the deal. Then he resigns from all these things -- except McLeod, Young, Weir, of course -- and turns around and says he thinks this whole program is dreadful, that it is hurting the economy and that if the people knew what it really cost they would hate it.

If I did not like the man personally I would say there were two things I do not like about him: his face. Really, the simple fact is that he cannot possibly have these varying views and still be a sensible adviser. The Treasurer has a Dr. Jekyll and Mr. Hyde there. As it happens, the Premier does not listen to the Treasurer; maybe he listens to Tom Kierans. But I just find this incomprehensible.

However, I am getting a little away from the main issue. The main issue is: What kind of bargain is this? And so --

Hon. F. S. Miller: I thought I would stand on a point of privilege.

Mr. Smith: There is no point of privilege here. Mr. Speaker.

The Deputy Speaker: That is my decision. A point of order?

Hon. F. S. Miller: A point of privilege: He has been talking about me buying racehorses, Mr. Speaker, alleging that I bought a quarter of a racehorse.

The Deputy Speaker: The Treasurer has the floor temporarily.

Hon. F. S. Miller: The only compliment the Liberal party ever gave me one day was to say that if they tried to sell me a dead racehorse I would walk out having bought a saddle for it.

Mr. Smith: It seems like an important point of view. Anyway, I am sure if I think about that for the rest of the day, Mr. Speaker, I may see the relevance of the point. Perhaps I am a little slow.

Hon. F. S. Miller: The Leader of the Opposition never did see the relevance of points. That has been his problem.

Mr. Smith: If the Treasurer tells me I have had problems in the political realm I cannot deny that; that is why I will not be leader any more. I understand that. But I do feel none the less that the Treasurer is being even a little more obscure than he usually is with his humour. However --

Hon. F. S. Miller: It came from the Liberal side. It came from your party.

Mr. Smith: Did it? Well, I am interested to hear that. It is quite relevant, I am sure.

The Acting Speaker (Mr. Cousens): On the amendment.

Mr. Smith: The question on the amendment is: What kind of bargain is it? And I do not know. It is very difficult for anybody to say what kind of bargain it is, because all the financial information on which this decision has been made has been denied us. That is what rankles; that is what goes against the grain in a democracy.

The Treasurer tells us, "Granted there is no oil in it, granted there are no jobs in it: but it is a bargain." Yet we cannot find out what kind of bargain it is. We have suspicions. We look at the latest earnings, for instance. The latest earnings as carried on for the current year would come to about $68 million for the company this year. Now, 25 per cent --

Hon. F. S. Miller: Did your staff workers turn the lights on?

Mr. Smith: The fact that when I speak it brightens up the assembly is something I cannot help.

Mr. Rotenberg: That is the only light on the speech all day.

The Acting Speaker: Order.


Mr. Smith: I have been accused of arrogance, but the record will note that I did not say, "Let there be light." Let that be very clear.

The Acting Speaker: The member for Hamilton West is speaking to the amendment.

Mr. Nixon: He keeps being interrupted by all those people over there.

The Acting Speaker: Order.

Mr. Smith: Mr. Speaker, I am speaking to the very serious question of whether the matter of Suncor is or is not a bargain. And it is a very serious issue. If one looks at the earnings of Suncor for the current year they are going to come in at about $68 million. I think the Treasurer will not dispute that. They are about $50 million for three quarters of the year, so it is reasonable to figure that they are going to come in at about $68 million. I am sure that is not far off.

If we figure our share of that would be one quarter, and if there were some way we could get that quarter out of the company -- I am not saying it is wise to take a company and bleed the earnings out of it; I do not think that is necessarily good business, but even if there were some way we could just bleed the whole profit out -- that would be $17 million for Ontario. Of course, it would also mean about $50 million going south of the border to the folks who own three quarters of the shares, but that is another aspect of the great bargain we are getting into.

Even if we could bleed the whole $17 million and say it was Ontario's, at the rate of $17 million a year, if that is all we get out of this, that would not even pay so much as a third of the annual interest costs alone on half the price. That is the $325 million that is supposedly going to be financed by notes back to Suncor to somebody else.

The Treasurer will say. "Oh yes. This has been a bad year." He will say he is just smarter than the other 12 companies or so which turned down Suncor, and that he has seized the opportunity to buy a company when it is down, knowing from Santa's Village and other situations with which he has had great experience that this is when one can really make a killing. Buy when Santa is low and sell when Santa is high.

Hon. F. S. Miller: That is not very often.

Mr. Smith: I understand that. I appreciate that. Believe me, given the state of the used-car business, I can well understand why the Treasurer will not resign his portfolio and wishes to keep his paycheque. I understand all this, believe me.

Hon. F. S. Miller: I cannot sign it after tonight, apparently.

Mr. Smith: Yes. That is true. Unfortunately, neither will I be able to. Do not think that has not occurred to me.

To continue on the great bargain the Treasurer has told us about: He says he is pretty sure the earnings will go up. I am glad he has that faith. He might say that in the past the earnings were higher. He did mention that on one occasion, and he feels they are going to come back again. In the past the earnings were higher. Two years ago the Montreal Alouettes were in the Grey Cup, but who would buy them now? In the latest standings they are even below the Argos, if one can imagine such a thing.

One has to judge a company to some extent on its current performance. The Treasurer says, "No, don't judge the company on its current performance, judge on its assets," which in his view are undervalued. He said the other day the plant in Alberta is worth a heck of a lot more than what it seems.

12 noon

There are people who even like the deal with Suncor. There is an independent group called Corpus that put out something called Public Sector. They are friends of the government and they like the deal. They like the whole thing; they think it is a great deal. But even they say. "Financial terms are generous. In total, 50 per cent of the asset value of the company is being paid for a 25 per cent equity."

If it is the assets that are important and not the earnings, frankly, we are overpaying for the assets. It is conceivable there is information about the assets that I do not have. I freely concede that. It is probably contained in the reports from McLeod Young Weir and from Price Waterhouse. We are not permitted to see those reports so we have to continue speculating about what kind of bargain this is.

We look at the question of what it really cost. At 17 per cent compound interest it comes to some $3 billion over 10 years. The Treasurer has made a legitimate point by saying one does not usually refer to a house that way. One does not call a $100,000 house a $1 million house even though that may be what it costs over the course of 25 or 30 years.

I understand his point, but he must surely recognize there is a certain difference. In the first place, if instead of investing $650 million in Suncor they had simply invested $650 million in any of the commercial banks in a daily interest savings account they would receive interest compounded monthly. We have to look at Suncor as an alternative to the simple expedient of taking the money and putting it in the bank. Certainly by that comparison our figures are dead accurate.

Hon. F. S. Miller: That is true of all equities.

Mr. Smith: I do not deny it is true of all equity decisions: I simply tell the minister that year after year, if it is his privilege to continue as Treasurer, he is going to find himself having to pay interest on interest. We are in a continuing deficit position and we do not pay it back. That is one of our problems. Therefore, our figures are accurate.

In addition I would point out that unlike a home, if we make a decision to buy a home on a mortgage, we have to compare the cost of carrying the mortgage to the fact that we would have to buy shelter anyhow. We would have to rent a home or an apartment if we did not buy a home. So the opportunity cost surely has to be considered in what happens apart from the basic cost of shelter.

There is nothing compelling Ontario to buy an oil company, for heaven's sake. It is not as though we either have to buy it or rent it. It is not as though we were forced into a situation where we are obliged to be in the oil business. Far from it. I believe the comparison with a house is wrong.

Third, when we buy a home, the Minister of Municipal Affairs and Housing (Mr. Bennett tells us we should not get in over our heads. He tells us we should not buy a home if we have to mortgage 100 per cent of the price. When would this government suggest that anybody buy a home in Ontario and take out a 100 per cent mortgage? Never. Yet that is what is being done. At least when one pays a mortgage on a home one is occasionally paying off capital. It is not obvious to me how capital is ever going to be paid off with our continuing deficit position in Ontario.

What kind of bargain is it? What does the government know about this that we do not know? The minister says it is like buying a house but he would not expect us to approve of his buying a house if we were not even allowed to search the title. This is the problem. He wants us to approve giving him money to spend when he shows how he spends it, which is on things like Suncor. With all the need in Ontario, he wants us to give him money to spend after the government has proven itself so unworthy of the confidence of the people of Ontario by taking money and spending it in this way.

I want to look closer at the details. The Premier said at his press conference that the rate of return would be 15 per cent. It does not take a genius to figure out that even if he gets a rate of return of 15 per cent -- and it is not obvious to me how that is going to happen, given the current earnings of this company -- let us say they discover oil, some fabulous things happen, the racehorse wins, and the government makes the 15 per cent the Premier says it is going to make, it is paying 17 per cent on the money. I have a lot of difficulty figuring out a business deal in which one pays 17 per cent for ones money and makes 15 per cent and calls that a good deal. I really have a lot of difficulty in seeing that.

Mr. Kerrio: What about the prestige, and the jet?

Mr. Smith: Granted the Premier will now be able to fly somewhere in his jet. He can go out to Alberta and look at the tar sands, and he will even have a guaranteed source of fuel for the jet, possibly, coming from the tar sands. But apart from that, I really seriously ask what kind of a deal it is where he makes 15 per cent and pays 17 per cent? Unless he says he is going to make 32 per cent on the $650 million -- that will be the day, my friends.

If the government has that information, if I am wrong, I want to be corrected. I want to see the McLeod Young Weir study that indicates the government can make 32 per cent on the $650 million. I want to look at that stuff. Is it unreasonable to say that if government members are going to come in here and tell us that a province that is already in debt is going to borrow $650 million at high interest rates, and is going to make 32 per cent on that deal -- surely I am not unreasonable to say that I have difficulty swallowing that, and that I insist on seeing some facts to back it up. There are simply no facts.

Mr. Nixon: When the Treasurer saw the facts, he would not back it.

Mr. Smith: There are no facts at all to suggest that $650 million represents a decent investment at this time and that it will bring in 32 per cent. I do not say it is impossible. I do not say, as the other 12 firms that turned down the Suncor deal said, it is impossible. I say I have to be shown that.

Mr. Stokes: Look at the profit they made on Syncrude.

Mr. Smith: True enough. The member for Lake Nipigon, an esteemed friend of mine, a valued colleague, said they made a killing on Syncrude.

Mr. Stokes: Why did they sell it?

Mr. Smith: That is a good question. They could have held their interest and then had an interest in both the oil companies in this country that sell oil at world price, but instead they have an interest in only one. They say they are going to benefit from having a window on the industry. I want members to think about that.

Mr. McGuigan: That is a pain.

Mr. Smith: My colleague the member for Kent-Elgin points out that is a pain. I think he deserves credit for that pun.

But what is this window going to do? I can understand the federal government needing a window on the industry, but the federal government, after all, has to pass laws regulating the flow of oil. It has to pass laws regulating the exploration for oil. The federal government may have to apply export duties from time to time. It may have to negotiate on behalf of Canada with other nations, either consumers or producers of oil. The federal government darn well needs a window on the industry. I well understand that.

Further, I can understand that the Ontario government might benefit from a window on the manufacturing industry, where we are being taken to the cleaners day after day because of our branch plant situation. It might benefit from a window on auto parts. It might benefit from a window in forestry, where our trees are not being replanted. It might benefit from a window on uranium where, after all, the entire nuclear policy of this government is dependent upon the production of uranium from Ontario.

I can understand a window in any of those areas would give Ontario information that might help the government in knowing how to tax, knowing what to demand of the companies by way of performance, knowing the financial viability of any given sector, making some deals for Ontario products abroad. I can understand all that. I recognize that thoroughly. But I am mystified at what the Ontario government can possibly do with its window on the oil industry.

12:10 p.m.

Is the Ontario government going to use the insider's knowledge it gets by having Malcolm Rowan attend Suncor meetings? Is it going to use that to change the leases given to the thousands of companies exploring for oil in the vicinity of Toronto? Is it going to use the window to regulate the flow of oil from the wellhead in Alberta? How will the inside knowledge that Malcolm Rowan will slip back to the Ontario government, through that window on the industry, affect so much as one iota of government policy in Ontario when it is not our industry?

I think that is a reasonable question. Maybe Price Waterhouse and McLeod Young Weir have thought of an angle by which Ontario would get inside knowledge from Suncor and use it to support some other industry. The Minister of Industry and Tourism (Mr. Grossman) has spoken, quite rightly, of the possibility that Ontario might get a share of the burgeoning energy market in terms of the valves we produce, the exploration equipment. He and I share that viewpoint. He knows that. But I do not see how having Malcolm Rowan sitting on the board of Suncor, along with one or two others from Ontario, is a window on the industry that will give us important information not otherwise available to us in --

Hon. Mr. Grossman: Malcolm is a great window.

Mr. Smith: That is right. I am sure Malcolm is a great window. One can see right through him. The question is how this window is going to help the industry that produces equipment here in Ontario. It is difficult to see how that is going to happen.

What about the dividend policy? I have trouble with that policy. The thought was that the $325 million, that is not just coming out of our deficit, is somehow to be borrowed, possibly from the company itself or from other sources. The Premier and Mr. Rowan said we are going to be able to pay that back out of money we are going to make from the company. We are going to pay that back, not by increasing the deficit, but out of profits over the next 10 years.

Members should think about that for a moment. Let us grant -- what is not truly grantable -- that there will be profits of the order of $400 million a year, recognizing that will be about six times the profits of this year. Let us say there will be such a miracle. Let us say it could happen. I do not say it is impossible. It is possible. McLeod Young Weir may have the proof of it. Until I see the documents, I do not know. Let us grant, for the sake of argument, that could happen.

How are we going to get the money out of the company to pay back the note? That is the question. It is one thing to say there will be profits, but one has to get one's hands on the profits to pay back the note. The thought was that we will dividend it out. The problem is that if we dividend it out, we cannot dividend it out to one shareholder and not to another. If we are dividending it out to one shareholder, we are obligated to dividend it out to another shareholder.

Three quarters of the shares are held in the United States of America by the Sun Oil Company. Only one quarter will be held by the government of Ontario. So every time they try to dividend out a dollar so that we can use that money to pay back the notes or the $325 million, we have to dividend out $3 to the majority shareholders.

Under these circumstances, what this means is that for every $100 million that Ontario takes and uses to pay off the notes, $300 million will go home to the Sun Oil Company in Pennsylvania. The tragedy of that, Mr. Speaker -- I see I am keeping you awake; I am sorry --

Hon. F. S. Miller: That is the third time you have said that. It is like a baseball game on a reel. A third variation on the same theme.

The Acting Speaker (Mr. Cousens): Order. On the amendment.

Mr. Smith: On the amendment Mr. Speaker. Have I so much as varied one iota, one jot, one tittle from the amendment? Not at all. I have been right on target. The point is that for every $100 million that will come to Ontario to help it pay for the note, some $300 million will go to Americans.

The tragedy about that is, up until now the Sun Oil Company has never taken out any money on the common shares. They have taken an occasional small dividend on the preferred shares, but they have never taken out substantial portions of money on the common shares; they have never dividended it. All the money has in fact been reinvested in Canada.

Now, not only will money flow south of the border in the form of the $325 million paid for the shares; not only will money flow south of the border for the next $325 million; not only will it flow south of the border for the interest on the second $325 million, if it is the American company that holds the note, but money will flow out of Suncor itself by way of dividends in a company that previously did not have that kind of policy.

That really is a very serious matter because the drain out of the country is very bad. Consider that the drain out of the company will set up a situation where the company will be drained of all its profits by way of dividends -- three quarters of which will not even go to Ontario but to the United States -- it will drain the company of profits for each of the next 10 years and will deeply affect its investment policy and its investment possibilities. There is a serious question to be asked as to whether this is a bargain or not, if the company finds itself in that situation.

The real question is, what could the money have done if it had not been spent on Suncor? They ask for supply. They say: "Let us spend money without your permission, don't worry. You can trust us." Then they go and spend it on a thing like Suncor. That is why I am very reluctant to give them supply. I am going to do whatever I can to prevent it.

Consider this situation in Ontario today. The Treasurer will remember the campaign -- which before the Treasurer rushes to remind me that I lost, I acknowledge fully that 1, in fact, lost. He will remember that. I may well be remembered --

Hon. Mr. Bernier: History will show that. You are so humble.

Mr. Smith: I tell my friend the Minister of Northern Affairs that when he and his pals are still running the joint up there, still running his fiefdom up in northern Ontario as the governor --

Hon. Mr. Bernier: You never came up to see it. I waited for you for three weeks.

Mr. Smith: I admit fully that I lost that election. I hope there is no doubt, everybody understands it. I lost the election, all right? I may even be remembered as the man who lost the election in 1981. I may well be remembered as that.

Hon. Mr. Grossman: And in 1977.

Mr. Smith: You can hardly blame me for 1977, be fair. But I may well be remembered as the man who lost the election.

Hon. F. S. Miller: I don't blame you this time either.

Mr. Smith: If you want 1977, you can throw it in.

Mr. Stokes: That is reality.

Mr. Smith: I am a psychiatrist, I accept reality.

Hon. Mr. Bernier: Do you know what they are saying in northern Ontario? Who is Stuart Smith? Is he real? Is he alive?

12:20 p.m.

Mr. Smith: The Minister of Northern Affairs, a good friend, has said there are many people in northern Ontario who do not know who I am. He is dead right. There is no doubt about it.

Hon. F. S. Miller: That is why you still got 20 per cent of the vote.

Mr. Smith: There are even some up there who do know who I am and that is why they do not vote for us. We understand that very well.

I come to this philosophical turning point in my life, this point where I am moving out of the honour of being the leader of this great party, having lost the election. I understand this. But I really must say I would rather be remembered as the person who lost the 1981 election, and a person who may have too few friends in northern Ontario, than be remembered as the person who presided over the decline of the once great economy of Ontario. That is what the Treasurer and the Premier will be remembered for.

During the election I said --

Hon. Mr. Bernier: I heard that speech 10 or 15 years ago. We are still around.

Mr. Smith: The Minister of Northern Affairs is proud that, despite that decline, his party is still around in government. Politically, those guys are very good. I do not deny it. I take my hat off to them.

I also tell them, however, that they have done no genuine service to the people of Ontario by allowing the economy of this province to run down, by forcing 37,000 of our people to go west to find jobs in the last year alone, and by destroying the base of human services which was usually so strong in Ontario to a point where we now have universities on the brink of disaster, hospitals unable to give proper service, the poor getting poorer, the rich getting richer and the simple fact of trees that are not being replanted. I invite the Minister of Northern Affairs --

Hon. Mr. Bernier: For 37 days you said that and they didn't accept it. The people of Ontario didn't accept that line.

Mr. Smith: They did not accept it, I know that.

Hon. Mr. Bernier: They told you, they gave you a message that you were on the wrong track. They didn't accept it.

Mr. Smith: Politically you may be right.

The Acting Speaker: The member for Hamilton West is talking to an amendment he has proposed.

Mr. Smith: Indeed, I am pointing out the amendment --

Mr. O'Neil: The Minister of Northern Affairs is being very provocative.

Mr. Smith: The Minister of Northern Affairs points out that the people did not accept my message. That is darned obvious, isn't it? But the simple fact is my message was correct. They may want to call me Dr. Negative because I pointed out our growth rate was the lowest in Canada over the 1970s and is going to be the lowest again over the 1980s. They may want to call me Dr. Negative for bringing the bad news. They may prefer jingles that say, "Davis can do it" and the BILD program and all this "Preserve it, Conserve it" type of thing.

They may have preferred that. The people may have preferred it. I do not say "no," but the people were wrong. The simple fact is that after the election we see articles in the magazines. Let me quote from Quest magazine: "Alas, Poor Ontario: The Have-not Awakening of a Province on its Way into the Cold." That is from Quest magazine. Unfortunately, it was after the election. I wish those people had had the courage to print it before the election.

Then there is Today Magazine: "The Decline of Ontario: To Have and Have Not." There is Saturday Night magazine: "A Province That Was Once the Richest and is Now Declining."

The message I brought was not a popular one. It could even be argued I did not bring it in a popular way, but what we said was true. The people in Brantford today will tell them what we said was true. The people in Windsor will tell them what we said was true. The 14,000 jobs that were lost outside Metro Toronto when the government was busy creating the 100,000 jobs it speaks so proudly of -- outside Metro 14,000 have actually been lost.

The Acting Speaker: On the amendment.

Mr. Smith: Yes, it is on the amendment, Mr. Speaker. It is on the amendment for the following reason. I believe the money should have been used to strengthen Ontario industry and provide jobs in Ontario rather than to buy some share of the oil sands in Alberta.

Look at the study done for the Ontario Economic Council by two Ontario economists. One reads the article in the Toronto Star, October 27, 1981. I may or may not have it with me at the moment -- it is irrelevant and does not matter -- but the study says Ontario has slid into what they call economic middle age. I guess the Treasurer and I have slid into that as well, have we not?

Hon. F. S. Miller: I have slid a little faster.

Mr. Smith: He slid faster. We are both sliding, I am afraid, but Ontario unfortunately has slid into economic middle age. It says that unless we respond to the difficulties being faced, particularly in our manufacturing sector, the outlook is bleaker than anyone has imagined. The central theme of the report is the crisis Ontario faces in the erosion of our industrial base and our manufacturing sector.

My House leader has been kind enough to hand me a copy of the article which speaks of the report done by Peter Dungan and Douglas Crocker of the Ontario Economic Council. They go through and point out very clearly the terrible problems faced by Ontario, particularly in the manufacturing area. According to this, by 1990 we will lose some 44,000 manufacturing jobs. We will face major losses in industries like machinery, electrical products, primary metals and fabricating, textiles and paper. The motor vehicle industry will lose jobs -- and that is already happening.

I found it interesting today that the Minister of Industry and Tourism or the Treasurer said the main reason that Chrysler was losing money was because of high interest rates.

Mr. Nixon: It was the Treasurer.

Mr. Smith: Was it the Treasurer who said that? Is the Treasurer not aware of the fact that when people buy Japanese cars they also have to pay interest? Is the Treasurer not aware of the fact that Japanese cars are, in fact, increasing at quite a rate.

Hon. F. S. Miller: I quoted Mr. Iacocca.

Mr. Smith: He says he quoted Mr. Iacocca. The fact remains that Mr. Iacocca was quoted by the Treasurer plainly with the Treasurer trying to make the point that it is the high interest rates that are the problem. I do not believe he was disagreeing with Mr. Iacocca. He is shaking his head, no. If he agrees with Mr. Iacocca then I ask, before he jumped in to agree, why has he not thought that Ontario people and Canadians and Americans have to pay interest on Japanese cars, and there is certainly no problem selling those now.

The problem has to do more with Ontario's declining industrial base and with poor management in many of the industries in this province and certainly has to do more with the branch plant nature of our economy and the fact that our auto parts companies cannot rely on markets within the auto companies themselves because the big auto makers do not buy from Canadian auto companies in proportion to the number of cars they sell here. They are not even close to being in proportion. We have serious problems in manufacturing.

They would never get opposition from me if this government wanted to move in to help in the auto parts industry or if this government felt it could do something important to modernize that industry, such as in substituting certain new products and certain new computer-assisted devices to modernize the automobile of the future.

We made a suggestion, for instance, that we ought to take the lead in Ontario in producing cars that burn more than one kind of fuel. This would create jobs on the assembly line. It would be great for Ontario because we do not produce oil here. It would encourage people to switch to other fuels. The minister must know and the Minister of Industry and Tourism -- who I frankly admit is aware of these things and is doing his job in this respect, he is meeting with people and finding out about this thing -- must know what Ford said not long ago when it came to the question of fuel alcohol. They said they would be quite prepared to prepare a car for the burning of fuel alcohol or for propane, as the Treasurer might prefer, but they could not very well do it until they had a policy to guarantee the stuff would be available at a gas pump.

Similarly, the oil companies say. "We are not going to put this stuff at the gas pump if there are not going to be any cars on the road to burn it." Now there is a spot for government, because the oil companies and the car companies are each going to say, "After you, Alfonse."

The simple fact is that the government has an opportunity here to say: "All right, we will declare that fuel alcohol will be sold in so many pumps in Ontario by a certain date. It will have to comprise such and such a per cent of the gasoline sold, either in the form of mixture or whatever." They have to be in a situation where they would agree that the road tax perhaps would be forgone on fuel alcohol to make it competitive for a little while. They could do something like that and then the Ford Motor Company and other companies would start to produce engines that could burn it and that would create more jobs.

12:30 p.m.

Ontario people, instead of buying a Japanese car because of its fuel efficiency, would recognize the wisdom of buying a car that can burn more than one kind of fuel, recognizing that in Ontario we are moving towards another fuel. That is an intelligent use of government and money. There would be no objection from me if the government wanted to use $650 million to start a fuel alcohol industry, none at all, because it would help in the automotive industry if it did that. New parts would have to be designed to help in the burning of fuel alcohol. This would all be grist for the mill, to bring people back to work in Ontario industries.

But the government is not going to create one job in Ontario by buying from the Sun Oil people in Pennsylvania some shares in a company whose main activity is extracting oil from tar sands in Alberta. It simply stands to reason. It does not create jobs in Ontario doing that. So if it has money and it recognizes the degree to which things are in decline, surely its responsibility is to spend the money where it can do the most good.

Anyone who can read knows we are in trouble, and this is not just Dr. Negative saying we are in trouble. The government got away with that. They won an election pinning me as the negative gloom and doomsayer. All right, that is fine. I was open to that because, frankly, the Conservatives had the polls in their favour. There was not an awful lot we could have done anyway except to attack their performance and tell people the truth and, of course, we were open to being the bearers of bad tidings, the negative guys. We could be painted that way. We knew it was a risk. We took the risk. I do not think we could have won if we had done anything else, frankly.

Okay, I am Dr. Negative. I will be remembered as Dr. Negative. That is fine, but the government cannot ignore the message. The message is true. Ontario is in serious decline. What I really enjoyed reading the other day was the utterly arrogant statement of Duncan Allan, the friend of the Minister of Industry and Tourism who has now been put in to rescue the Minister of Agriculture and Food (Mr. Henderson).

Hon. Mr. Grossman: He doesn't work for me.

Mr. Smith: I know he is no longer with the Minister of Industry and Tourism.

Mr. Nixon: The minister has got Bernard Ostry. Wait until he comes on the scene. Why don't you unveil him some morning?

Mr. Smith: The Minister of Industry and Tourism has decided to get a Liberal to help him. I can well understand that. But Duncan Allan, the famous Tory supporter, has now been sent in to try to rescue the Minister of Agriculture and Food, and that is a heck of a job.

Mr. Nixon: To make him float.

Mr. Smith: He would not have a whole lot of trouble floating, but unfortunately his policies are sinking, and the farmers are sinking while waiting for him to understand the difference between A and B.


Mr. Smith: Duncan Allan says he is tired of hearing about how Ontario used to have a great economy. He says, "That is nothing but irrelevant nostalgia."

Mr. Wildman: That is pretty mild for Duncan Allan.

Mr. Smith: That is what he is quoted as saying in a family newspaper, I tell my friend from Algoma. He may have said more.

Mr. Nixon: I'm sure they cleaned it up.

Mr. Smith: I would not be surprised.

When you have senior people in the government and senior Tories like Duncan Allan saying --

Hon. Mr. Grossman: He's not a Tory.

Mr. Smith: Oh, no. He was in Orangeville and those areas telling people just how terrific the Tories were and what a good thing it is that they are in and what a fine Board of Industrial Leadership and Development program he has been running.

Hon. Mr. Grossman: He is like Bernard Ostry, a nonpartisan dedicated civil servant.

Mr. Smith: Bernard Ostry may or may not be. Time will tell what happens with him, but we know what happened with Duncan Allan. The simple fact is that he is now saying it is irrelevant nostalgia to talk about when Ontario used to be a strong industrial producer. I honestly believe, to give the Minister of Industry and Tourism credit --

Mr. Nixon: Don't give him too much.

Mr. Smith: I will give him one bit of credit. I honestly believe he himself believes --

Hon. Mr. Grossman: Don't interrupt him now, for God's sake.

Mr. Smith: I honestly believe the Minister of Industry and Tourism himself believes it is still conceivable and possible for Ontario to become industrially strong again. I think he believes it is possible. I happen to believe it is possible, too. He and I may be the only optimists in Ontario in that regard.

Hon. Mr. Grossman: The Premier believes that too.

Mr. Smith: No, he does not. I say to the minister -- and it will not matter, because I will not be around -- I honestly and sincerely believe the Premier has come to the conclusion that with the decline of the industrial northeast in North America, which is a continental phenomenon, the inevitable shift of power westward and so on cannot be resisted in any way and the most one can do is sort of patch up some of the damage as it happens.

I honestly and sincerely think he believes -- and I really mean this: there is no political point, and I am just telling the minister this -- that the degree of foreign ownership of our manufacturing industry is simply irreversible, that there is not anything real we can do about that and that the most we can do is to try to cajole and maybe occasionally chat with them and do a global product mandate or something like that in the hope that we might keep the thing from collapsing as rapidly as it might in Quebec, let us say, where if the textile industry or something like that goes they are in serious trouble. I honestly believe the minister has more confidence in Ontario industry than the Premier. I say that very sincerely --

Hon. Mr. Grossman: He has as much confidence as I do.

Mr. Smith: I doubt it. I seriously doubt it. I say that very honestly. I do not think he does.

Hon. Mr. Grossman: Yes, he does.

Mr. Smith: I think the minister believes that if somehow we could get our people together we could improve our productivity: I believe that. We could have a more directed approach to manufacturing: we could pick sectors where we have a real chance to compete and we could get out in the world and sell. The minister has a background in St. Andrew-St. Patrick which leads him to believe that kind of tough competitive attitude is possible. I do not believe the Premier believes it. I honestly do not.

Hon. Mr. Grossman: Yes, he does.

Mr. Smith: No, I do not believe it. I believe he believes that the banks believe that they are better to go with the big proven enterprises, the big American guys, the safe ones, the ones that have been around a while. The Premier does not have the ministers belief, I assure him. He will find that in the future.

Let me get back to the point. Richard Thomson, the chairman of the Toronto-Dominion Bank, has said that Ontario, outside of Toronto, is in real trouble. Dick Thomson is a man known to the ministry. He is also known to the Treasurer; the Treasurer knows him very well. I know him very well. Dick is not known as a partisan individual on any side. He tends to be fair-minded and open, but he is a close adviser of the government from time to time. He gives them advice. The government knows that.

Yet the chairman of the Toronto-Dominion Bank says that, outside of Toronto, Ontario is in real trouble. The unemployment figures indicate what has been happening in Ontario, particularly outside of Metro, where, as I say, 14,000 jobs were lost.

The Minister of Industry and Tourism (Mr. Grossman) and the Treasurer are very fond of talking about the creation of 110,000 new jobs in Ontario. Needless to say, that fell well behind the growth in the labour force and, therefore, unemployment is still very bad. Unemployment is so bad that for every five members on the unemployed rolls a month earlier, last month they were joined by a sixth person, which is pretty sad testimony to what is happening in Ontario.

The simple fact is that outside of Metro, far from creating jobs, there has been an actual loss of jobs despite growth in the work force. It is statistics of that kind that have a profound human impact, because we are losing our young people. Because we are spending money stupidly on things like Suncor instead of revitalizing our manufacturing industry, 37,655 people left Ontario for the west during 1980. Even my ill-fated commercial, the one that said somebody is leaving for the west every so many seconds and so on, was based only on 30,000 people leaving.

Hon. F. S. Miller: When are you going?

Mr. Smith: I am waiting for a good offer. However, the fact of the matter is that I was optimistic on behalf of Ontario. I only said 30,000 people were leaving. But now it is 37,000, and they are our best people. They are the people who have training, skills, a sense of adventure, youth. These are people --

Mr. Wrye: Liberals.

Mr. Smith: They will not be for long when they get there. They may be Liberals when they leave, but they will not be for long when they get there, I am afraid. However, that is neither here nor there. The simple fact is that we are losing our best people. These folks are going out west and I am very concerned that we are losing highly trained individuals.

12:40 p.m.

We have the statistics documenting the current decline. We have predictions by the Ontario Economic Council that the decline will become more and more critical unless new initiatives are taken. People are leaving for the west, and Ontario's economy is collapsing, with the exception of the situation in Toronto. We have the Statistics Canada analysis of 1978 showing that, even if we have a low Canadian dollar, Ontario industries are not poised to take advantage of that. Because of their branch plant nature, Ontario industries are not taking advantage of the low dollar when it exists.

Why should the government choose to spend $650 million in borrowed money, or $3 billion over 10 years if one considers compound interest, out west rather than here in Ontario? The government may not realize this, but I asked the minister: "Why are you buying a company in Alberta? It is not going to do us any good here. There is no oil or jobs for us in that." His answer was, "That's where the action is."

Mr. Kerrio: There are 37,000 people to prove it; 37,000 people agree.


The Deputy Speaker: Mr. Smith, perhaps at this time, when we have a little break --

Mr. Smith: I am continuing. There is no break at all.

He said. "That's where the action is." Why would an Ontario government conclude that out in Alberta is where the action is? Why would it reach a conclusion like that? What message is being given to investors in Ontario when the government itself says that, when it goes out to borrow $650 million and when it is looking for a good opportunity for investment, it has to go to Alberta because that is where the action is?

Mr. Speaker, even though you are still a relatively young man, you will remember that there was a time when the action was here in Ontario. Even the Treasurer will remember when he could sell cars. He will remember that there was a time when the action was in Ontario.

When the government of Ontario says the action is in Alberta and that is the only place it can find a real bargain in terms of purchasing stock, and when it says it does not pay to create a new industry in Ontario or to invest in Ontario industry because the action is in Alberta, it is giving a message of defeat with respect to our economic future. Respected independent economists tell us our manufacturing base is eroding and we face economic ruin. Our government's response is to buy an Alberta oil company.

What could we have done in Ontario with that money instead? Why should we give supply to a government that spends its money in this way with such distorted priorities? The simple fact is that the priorities of this government are seriously distorted.

We could have used $650 million to invest in fuel alcohol. We could have put up six 1,000 ton-a-day plants, which could have been constructed with the capacity to produce 430 million gallons of fuel alcohol a year. By 1990, these plants could have replaced 15 per cent of Ontario's gasoline requirements. In addition, such a project would have created nearly 7,000 direct and continuous jobs as well as more than 1,000 jobs during construction of the plant.

Such a venture would have secured these fuel supplies for the province, would have kept the capital in Ontario and would have created badly needed jobs. It would have helped revitalize our provincial economy.

The recently published study entitled Evaluation of the Potential of Peat in Ontario further confirms that the money should have been spent here in Ontario. If it were to have been spent on energy-related use, the energy potential of peat would have been one place to start, because peat in energy potential has 10 times this country's estimated reserves of natural gas.

Look at what this study says, for Heaven's sake. It says: "Conventional peat mining methods, such as the milled and/or sod peat systems used in Finland, appear well suited to Ontario conditions, at least for the portion of the province south of the southern limit of permafrost. Irish mining systems featuring narrow-gauge rail transport are expected to present difficulties in Ontario because of the more severe winter conditions. Wet mining systems are not yet commercially proven, but the ones in Finland are well suited."

It goes on to say: "Products can be obtained from peat by a combination of the following operations: mining which delivers the process, either wet bog material or solar-dried solids, pretreatment consisting of mechanical pressing, wet carbonization and thermal drying either singly or in combination."

There is tremendous potential in Ontario's resources. Why should we spend $650 million on Alberta's resources, which we are then going to import to use in our automobiles?

Ms. Copps: They have to have something to fuel the jet.

Mr. Smith: Even the jet eventually will be able to go on fuel made from this. It may not be far away. But here we have peat, an Ontario resource, and yet we are not doing much about it.

What about other matters? Take, for instance, the question of reforestation. The simple fact is that we are going to find ourselves in northern Ontario with ghost town after ghost town unless we are able to get the trees replanted.

Hon. Mr. Bernier: You don't even know where the north is.

Mr. Smith: The simple fact is that, although the Minister of Northern Affairs (Mr. Bernier) is happy at the moment to enjoy his fiefdom and his governorship there, let the record --

Hon. Mr. Bernier: Come up and see me some time.

Mr. Riddell: I am almost tempted to sell my farm and go up there and run against you.

Mr. Nixon: It would be the end of him.

The Deputy Speaker: Order, please.

Mr. Smith: Let the record show that I stated here on October 30, 1981, that there will be towns of the north closed down totally as a consequence of the lack of reforestation going on right now in northern Ontario, as a consequence of some of the clear-cutting methods being undertaken by some of the companies and as a consequence of the poor forest management of this government. Let the record show that.

Mr. Speaker, if you had money to invest and you had a choice between investing the money in something that would protect the resource base of Ontario or, instead of that, you had another option, which was to be shareholder in an Alberta resource, surely common sense and reasonable prudence would dictate that the money should have been used for the protection of this vital Ontario resource.

12:50 p.m.

We are going to live to see towns in the north shut down long after the Minister of Northern Affairs has lived off the fat of the land in Minaki. There will be towns shut down because the government is not protecting the forest resource.

My colleague the member for Rainy River (Mr. T. P. Reid), the esteemed Liberal-Labour member, has been speaking in this House lo these many years. He has stated time and time again that if we do not protect the forest resource, we are letting down the people of northern Ontario and there will be ghost towns there. I am sorry to tell them this; it sounds like more Dr. Negative, but it is a fact.

Apart from our forest resource, mines are not being opened up in Ontario. The Treasurer, when he was Minister of Natural Resources was, in my view, the best Minister of Natural Resources we had. I am sorry Parkinson's Law has operated in his case and he has been promoted to the level of his incompetence.

Mr. MacDonald: That's the Peter Principle.

Mr. Smith: Unfortunately, he was a much better Minister of Natural Resources, where he had a natural understanding of the situation, than he has been as Treasurer. The Treasurer understood this when he was the Minister of Natural Resources. He knows that in Quebec they have an aerial survey and are able to be of tremendous assistance to individual prospectors, to the kind of people who go out and find the mines.

The great mines found in Ontario were not found by the big companies; the big companies move in and buy them. They were found by the hard work and dedication of individual prospectors out there with pick and shovel. That is the Ontario spirit.

Those prospectors today are not getting the support of this government. For one thing, junior mining stocks are so closely regulated on the Ontario exchange that it is virtually impossible to get a good gamble --

Hon. Mr. Bernier: Oh ho, is that so?

Mr. Breithaupt: Except for NDP research. They do all right.

Mr. Smith: That is right. The members of NDP research do not do badly.

Apart from that, we do not have the kind of aerial surveys available in our mining industry that they have in Quebec to help the individual prospector. We could spend the money in the production of our own resource industry.

Let us talk about the share value of the Suncor deal. We are told that somehow those assets were undervalued. I said earlier that there are some who feel we have paid twice the price of the assets in proportion to the amount of shares we have received.

I wonder what the McLeod, Young, Weir study said about asset value. I think of the comments made in the press about Petrofina and the purchase by Petro-Canada. I tend to feel Petro-Canada may have paid a little too much for Petrofina. They may have paid a lot too much for Petrofina. Compared to that outlandish price, Suncor may have been a bargain. However, I am prepared to look at the facts. I am prepared to look at what valuation was placed on these shares by McLeod, Young, Weir in making this recommendation.

Members will remember that my colleague the member for Grey-Bruce (Mr. Sargent) was ejected from this House -- as used to be his habit at one time, I understand -- because he asked some questions, with unfortunate wording perhaps. The real import of his question, if we can leave aside the question of the wording, I do not think should be lost.

What my colleague for Grey-Bruce was saying was that McLeod, Young, Weir, which apparently produced a very important report upon which the Premier based this decision, could have asked for a finder's fee in bringing together the Ontario Energy Corporation and the Suncor people. They could have asked for a commission on the deal. In fact, we are told that one per cent is considered a standard commission, a standard custom, in this business. I am not in that business, but I am told on pretty good authority that one per cent could have been asked as a commission and normally would have been asked as a commission.

How is it possible that McLeod, Young, Weir has not received a commission on this deal? I ask members to contemplate why McLeod, Young, Weir should suddenly have become such a charitable institution as to give up $6.5 million presumably for no explicable reason. I ask members to consider that it is not an unreasonable question to ask what consideration McLeod, Young, Weir received if they did not receive their commission?

There is no innuendo in that. I am not suggesting that there is anybody who is dishonest. But I am saying that the people of Ontario have a right to know what consideration has been received by that firm, if not their normal commission. Why has it gone that way via some other form of consideration? Maybe if we saw the report that McLeod, Young, Weir prepared, we would have a better idea about that.

But one cannot help if the opposition asks a serious and sensible question, if the opposition says: "Look, this is a very large deal, arranged by a certain brokerage house apparently. Why are they not getting their normal fee?" That is a perfectly sensible question. There is no effort to impugn anybody's motive here. If members of the government party were on this side of the House, they would ask that question. It is not an unreasonable one. If they did not receive the normal consideration, then surely we are entitled to ask what consideration they did receive.

I do not understand the role of Mr. Kierans in this whole deal, because Mr. Kierans is a good Conservative. He has certainly been a close adviser of the government as head of the Ontario Economic Council. I know he is a friend of the Premier. I know he has given advice from time to time to the government. I know he was on the Ontario Energy Board and, in fact, resigned so as to avoid any implication of conflict of interest. I know that he is president of McLeod, Young, Weir, which prepared this report that they insist upon keeping secret. As far as I can see, the Premier has not tabled the report from McLeod, Young, Weir or the report from Price, Waterhouse.

Do members of the government party understand that question 150 on the Order Paper has also asked for information on that matter and the government has not answered that, even though that question was asked a long time ago? What does the government have to hide? Why should the government expect that we would give them the right to spend money and to have supply when they have not answered our fundamental basic questions? If the Suncor deal is such a bargain, then why are they afraid to table the financial information that makes them think it is such a great bargain?

Why should the government keep this information secret from us, from the people's representatives? We lost the election, but we did get a million votes. We represent 34 constituencies. We are the official opposition in this House. We and the other opposition party have every right to the same information the Premier had, which he did not even share with the majority of cabinet and which he kept secret except from only four members of cabinet --

Mr. Breithaupt: Much less the caucus.

Mr. Smith: -- and which he did not share with the caucus.

Mr. Breithaupt: Or the party.

1 p.m.

Mr. Smith: We have the right to have that information, and I tell the government, if we do not get that information, I intend to continue to stand and oppose it getting supply.

By the views of the Treasurer of Ontario as expressed in this House in 1979 --

The Deputy Speaker (Mr. Cureatz): Time.

Mr. Smith: -- any delay of supply is a matter of confidence. We tell the people opposite us, "Government of Ontario, you have just spent $650 million that you do not have on a company that is located primarily in Alberta. Either you justify that by tabling the reports upon which you based that decision or face the people and ask their views on the matter of whether you should spend $650 million on Suncor. Face the people."

The government does not have the confidence of the people in this House. It has lost the confidence of the people in this House. I want to make it clear that it does not have the confidence of the people in this House.

The Deputy Speaker: Order, please.

Mr. Smith: I am sorry. What is out of order, sir?

The Deputy Speaker: Time has expired.

On motion by Mr. Smith, the debate was adjourned.


The Deputy Speaker: Just prior to the adjournment of the House, I beg to inform the House that in the name of Her Majesty the Queen, the Honourable the Lieutenant Governor has been pleased to assent to the following bills in his chambers.

Clerk of the House: The following are the titles of the bills to which His Honour has assented:

Bill 18, An Act to amend the Dog Licensing and Livestock and Poultry Protection Act;

Bill 19, An Act respecting the Marketing of Sheep and Wool;

Bill 22, An Act to amend the Racing Commission Act;

Bill 47, An Act to establish a Corporation to promote Innovation Development for Employment Advancement;

Bill 71, An Act to amend the Small Business Development Corporations Act;

Bill 74, An Act to amend the Livestock Branding Act;

Bill 79, An Act to amend the Corporations Tax Act;

Bill 80, An Act to amend the Retail Sales Tax Act;

Bill 84, An Act to amend the Ministry of Community and Social Services Act;

Bill 100, An Act to amend the Livestock Community Sales Act;

Bill 141, An Act to amend the Power Corporation Act.


Hon. Mr. Wells: Mr. Speaker, before we adjourn, I wish to table the answers to questions 145 and 150. (See appendix, page 3039.)

The House adjourned at 1:04 p.m.