Hansard Transcripts 1982-Sep-21 | Legislative Assembly of Ontario

Mr. Speaker: I beg to inform the House that I have laid upon the table a copy of an order in council dated August 12, 1982, revoking order in council 1424/82 and advising that the Honourable Thomas Leonard Wells has returned to his ministerial duties and will resume his position as a commissioner on the Board of Internal Economy.

STATEMENTS BY THE MINISTRY

PUBLIC SECTOR RESTRAINT

Hon. Mr. Davis: Mr. Speaker --

Applause.

Mr. Kerrio: That is the good news.

Hon. Mr. Davis: I say to the member for Niagara Falls that I will try to deal with the statement without too many interjections, but if I am prompted I am ready to reply.

Mr. Kerrio: I'll be here.

Hon. Mr. Davis: Well I know you will make a deal.

Today represents a critical opportunity for the Legislature of this province to address those issues of vital concern to the health of our economy, our province and all its citizens.

For some time governments in all parts of this country have sought to define their economic goals and objectives within the context of a national program for economic recovery.

We in this province have affirmed and continue to affirm a commitment to social progress through economic growth. Indeed, the strong performance of our economy in the past has been the foundation for our greatest social achievements.

It has created opportunities for the disadvantaged to advance, for families to educate their children, for the average worker to gain the security of home ownership and an adequate pension. Finally, it has enabled government to maintain and expand on a range of public services from transportation to our health care system.

But inflation and recession both frustrate these long-standing goals and jeopardize our social advance. The economic circumstances in which we currently find ourselves limit the opportunities for young men and women to find gainful employment, reduce the rewards of work and thrift and imperil government's own capacity to maintain even existing social programs.

During the past year, all Canadians have shared a common frustration with Canada's seeming inability to share economic recovery.

We have become mired in the longest recession in post-war history. Unemployment has soared to record levels with well over a million Canadians out of work at present. Layoffs and bankruptcies have become increasingly frequent, symptomatic of the profoundly adverse impact that high interest rates have had on economic activity. Few sectors have been spared, but the construction, manufacturing and mining industries, all critical to the jobs and incomes of Ontarians, have been particularly hard hit.

Inflation continues to be a major problem. The consumer price index rose by 12.5 per cent last year, the highest increase in more than three decades.

Some have argued that recession and unemployment are necessary to reduce domestic inflation by wringing out the inefficiencies of our market economy. But attempting to wrestle inflation to the ground at the expense of jobs is surely an untenable policy for Canadians. The economic and social costs are simply too enormous.

Governments in Canada do not and cannot, of course, control all factors affecting the Canadian economy. Recession in the United States and Europe is not subject to correction by Canadian public policy. Moreover, interest rate developments in the United States do at least partially dictate the extent of acceptable action on the part of Canadian authorities.

At the same time, in our view, these constraints cannot be used to deny our domestic responsibility to make our best efforts to provide for immediate economic recovery and to create the framework for economic growth through the rest of this decade.

Throughout the 1970s, the social imperative in this country was to create jobs. It is Ontario's view that sustaining and creating employment should continue to be this nation's highest priority.

There are those who would argue that to place the need for jobs first is to deny the seriousness of the threat posed by inflation. Clearly, in our view that is not true. Ontario has warned at conference after conference, many times, of the link between domestic cost inflation, international competitiveness and lost export markets and jobs. The question, however, is how best to break inflation without losing jobs.

I think we all realize in this House that there are no easy answers, no quick fixes to the economic difficulties in which we find ourselves. But there are positive measures that can and should be taken by all levels of government.

I think everyone agrees that high interest rates are the principal obstacle to economic recovery. They have discouraged investment, depressed the housing market, added to inflation and undermined the confidence of Canadians in their economic future.

Although the whole economy suffers from high interest rates, some sectors are affected more severely. Households are hard hit by high interest rates as are small businesses, farmers and manufacturers of consumer durables, such as automobiles, appliances and capital equipment.

2:10 p.m.

Moreover, the narrow pursuit of American interest rates to curb domestic inflation has failed to reflect what ought to be our two key national objectives: creating and sustaining employment and effectively lowering the rate of inflation.

Deliberately increasing unemployment and consciously reducing domestic demand through the blunt instrument of tight monetary policy is, in our view, clearly misguided. It betrays a serious lack of confidence in the capacity of our economy to grow and to prosper. It carries unacceptably high social and economic costs which Canadians in all regions of this country have felt to be devastating in their effect. And, perhaps most important, it is simply not working.

It is our view that some more appropriate mix of fiscal and monetary policies, some middle ground between restrictive monetary and expansive fiscal policies, is necessary to achieve real and sustained economic growth.

We stated our position clearly at the first ministers' conference in February of this year, and we have repeated it on every available occasion since. We remain convinced that a national program of economic recovery, based on the objective of sustained growth without inflation, is both critical and possible for all Canadians.

While Ontario respects that each province and each region has it own particular problems and potentialities, the absolute truth is that Canadians in every part of this country have experienced the effects of a recession that is nationwide. Ours is a national economy, highly integrated, with each part depending upon the others, and ours is a federal state where each jurisdiction depends upon the others to determine our national goals.

So, while the individual efforts of provincial governments can and do have an impact upon our national economy, recovery in all parts of Canada can be engendered only by a program that embraces the whole country and in which all provincial jurisdictions act in concert with our federal government. Surely, these shared difficulties justify a national program that creates an equitable and stable framework in which economic recovery can be shaped.

One central element in such a recovery package is a national incomes policy. A comprehensive program of wage and price controls for all Canadians would have several advantages. It would reduce inflationary expectations; restrain domestic cost pressures and improve our competitive position; spread the costs of combatting inflation across a wide spectrum of society and demonstrate economic leadership at a time when consumer and investor confidence is at an all-time low in this country.

More important, such a national program would contribute to maintaining the strength of the Canadian dollar. This would in turn allow for a lowering of our domestic interest rates. As such, it would aid significantly in restoring business confidence, in increasing international trade and, most important, in restoring the thousands of jobs already lost to the vagaries of the current federal policy.

Therefore, I repeat my contention that to be truly effective, any program of controls must be national in its scope and universal in its application.

From a strictly legal standpoint, there is no question that the province of Ontario has the authority to impose mandatory wage, price or profit controls on all sectors within this province, except those industries within the federal jurisdiction. But such a program, applied only in Ontario, would impose both inequity and inefficiency upon our citizens.

Across-the-board wage controls only in this province would severely restrict the mobility of workers, with national companies encountering difficulties in both the wage treatment and location of workers doing exactly the same job. The skilled workers required to meet our high-technology sector would be drawn to other provinces when they are essential to investment projects generating both jobs and incomes for Ontarians.

Comprehensive price controls in a single province within what I still regard as a common market, which should and does currently guarantee free interprovincial trade, would also create enormous monitoring and enforcement problems.

To the extent that we could overcome these difficulties within a provincially administered program, it would in itself pose a serious threat to the free movement of labour, goods, services and capital which Ontario has always championed in federal-provincial discussions.

At this point in time, the federal government and a majority of the provinces believe that a controls program need not be universal in its application. It is their conviction that the private sector will begin to respond to the pressures of both inflation and recession voluntarily. The staggering losses of employment in the private sector, where more than 300,000 Canadians lost their jobs in the past year, demonstrate the extent to which private sector workers have had to bear the burden of the recession.

With far less job security than employees within the public sector, private sector workers may well be called upon to restrain their wage demands even further, without the imposition of mandatory controls.

Similarly, the real profit losses experienced by a number of Canadian industries seriously question the need for profit controls at this juncture in our economic history.

Reluctantly, therefore, and stating our position clearly and unequivocally, we have decided to join with those who ask that the private sector should be given an opportunity to respond in its own way to the need for restraint.

Mr. Laughren: You have changed your mind?

Mr. Martel: Is that a new position?

Hon. Mr. Davis: To those members from the New Democratic Party who are interjecting, I point out that the Ontario Federation of Labour opposed controls in the private sector as well. I thought I would pass that on to them in case they did not know.

Should the private sector fail to voluntarily comply with these demands, we believe that the federal government, in concert with the provinces, should act to put a national program of comprehensive controls in place.

I do not want to be too optimistic, but I must say that I really do sense that in the past six to eight weeks there has been some genuine movement within the private sector in relation to the inflation program. I say that as one who had some very serious misgivings in the early part of July.

To deal with the issue I have just raised, we will be tabling a bill in the Legislature today which enables Ontario to enter into an agreement with the federal government respecting a national anti-inflation program.

To assess the degree of voluntary compliance in the private sector with regard to our restraint objectives, we will be establishing a board empowered to monitor wage and price increases in the private sector for the duration of our broader restraint program.

I remain convinced that only a national program of controls could strike the delicate balance between equity and efficiency and allow for some measure of popular acceptance of the shared sacrifices necessary for economic recovery. As for our part, we cannot shirk our responsibility to do what we can effectively do within our own jurisdiction and within our own capacity to bring about economic change.

In this regard, I repeat my call for public sector expenditure restraint. Reduced government demands on the capital market will make an important contribution to reducing pressures on interest rates.

Public sector cost reductions can be passed through to the private sector through the tax system and through other charges for government services. These reductions alone will have a significant impact on the performance of the consumer price index and will contribute to reduced inflation in the private sector.

I wish to make abundantly clear that the fundamental principle that should govern our approach to restraint is simple. Our restraint programs should not needlessly or ruthlessly add public employees to the unemployment rolls; nor should they undermine the capital base of our economy upon which sustained recovery will depend. Our task is to find efficient yet sensitive ways to achieve economic recovery.

Restraint by all public agencies in this province can actually preserve jobs and diminish unemployment. It is surely better to have many employees who share a moderate pay increase than to have people out of work because local school boards, hospitals or governments in themselves cannot afford higher settlements.

I think the record of this government on restraint is a sound one. Over the past seven years --

Mr. Cooke: Tell the doctors that.

Hon. Mr. Davis: I know my friend has a hangup about the doctors.

I think this government's record on restraint is a sound one. Over the past seven years, the number of our public servants has actually decreased by six per cent. The salaries at the senior levels of government have risen at about one half the rate of inflation for almost 10 years. In our most recent budget, we cut the level of salary increase to six per cent for all senior government employees, well in advance of any federal government initiatives. In fact, that also applied to members of this House. In July and August of this year, we expanded upon our commitment to constrain expenditures in this current fiscal year.

2:20 p.m.

These achievements have allowed us to have some fiscal room to deal with the current economic situation without cutting back on services or eroding the job security of employees within the public sector. But there still is much that can be done.

Under the direction of Management Board, all ministries will be asked to identify areas where further expenditure restraint will be possible without affecting the level of service to the public. In keeping with these directives to significantly reduce our current fiscal account, Management Board is currently working with all ministries to reduce their operating budgets.

Mr. Cooke: What about the International Monetary Fund?

Hon. Mr. Davis: If the honourable member wants to raise the IMF, he should speak to his leader; he told me yesterday what a great performance it was in terms of our visitors from overseas. The member says he did not like it; he should consult with his leader as to what he felt about it. Let him go and ask Bob Rae.

Mr. Speaker: Order. Just continue with your statement, please.

Mr. Breithaupt: He liked the opening night at Roy Thomson Hall.

Hon. Mr. Davis: Yes. He liked the opening night at Roy Thomson Hall as well.

Mr. Van Horne: He probably likes motherhood too.

Hon. Mr. Davis: I hope so. I will repeat the last sentence I read before I was so rudely interrupted by the member for Windsor-Riverside (Mr. Cooke).

In keeping with these directives to significantly reduce our current fiscal account, Management Board is currently working with all ministries in order to reduce their operating budgets.

As an example of our need to reflect on all our expenditures and to take into consideration changing priorities, we have reached an agreement with Canadair Ltd. in Montreal to cancel our order for the Challenger jet --

Applause.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Davis: -- to cancel our order for the Challenger jet in return for a commitment to purchase two CL215 water bombers and related equipment required for our forest fire service.

Interjections.

Mr. Speaker: Order, please. You will have plenty of time -- order. Now back to the statement, please.

Hon. Mr. Davis: Mr. Speaker, I would like to add two brief observations so that this will be clearly understood. I think I recall what the member for Lake Nipigon (Mr. Stokes) was reported to have said in committee, that we should have done it 10 years ago.

Interjection.

Hon. Mr. Davis: Yes, I know the member was in support of it; I understand that.

I just make two points. In politics one deals with perceptions. I understand the symbolism that is created by the acquisition of the Challenger jet. But I also want to make it abundantly clear, so that all members will understand, that this does not reflect upon the technical proficiency of the plane itself.

Mr. Laughren: Oh, no.

Hon. Mr. Davis: I only say to the honourable member, I want to make it abundantly clear --

Interjection.

Hon. Mr. Davis: No, I am not getting into any trouble at all. I just want to make it abundantly clear that Canadair is the only Canadian company producing an aircraft of this kind, with a lot of the components produced in Ontario. That was part of the decision.

For those in the Liberal Party opposite who applauded so vigorously, I have a list of the total number of executive jets currently being used by federal government cabinet ministers and those on order. I will send a list and they can communicate it to them.

Mr. Peterson: What are you going to do? What about your strategy?

Interjections.

Hon. Mr. Davis: I would say to the honourable member that while he was cynical about the concept of --

Mr. Speaker: Order. This is not question period, and I would advise all members to withhold their questions until the proper time. Statement, please.

Hon. Mr. Davis: Mr. Speaker, I would just add one further editorial comment. While the Leader of the Opposition (Mr. Peterson) was cynical about this aircraft being outfitted for ambulance service, that was being done. The people of the north, I am sure, will understand.

Mr. Breithaupt: They sure will.

Hon. Mr. Eaton: The last Liberal seat in the north will go.

Interjections.

Hon. Mr. Davis: They will not get a Liberal seat up there in the next --

Interjections.

Hon. Mr. Davis: Mr. Speaker, is it not proper for you to name strangers in the House? I see a stranger sitting over there.

Mr. Speaker: I am not sure whether he is a stranger or in camouflage.

Hon. Mr. Davis: Camouflage is a wonderful word.

Mr. Speaker: However, I did have an interview with the member for Rainy River (Mr. T. P. Reid) in my office, and I can assure you he is the same person.

Hon. Mr. Davis: I am sorry to hear that. I was hoping he had changed.

Since the announcement of a federal restraint program in June of this year, we have spent many hours discussing the design and implementation of a more broadly based restraint effort within our own province.

I hope this House and the people of this province will believe me when I say that no decision taken by my government has received so much attention, so much discussion and so much genuine concern.

While we proceed with some reluctance, I sincerely believe that the program we have developed is the best one that could have been developed, given all the vagaries of federal economic strategy and all the constraints of provincial fiscal policy. In essence, we are proposing to the Legislature, for its approval, a one-year, five per cent wage freeze in all areas of the public sector in this province, with appropriate transitional arrangements.

In designing the program, which the Treasurer (Mr. F. S. Miller) will address in detail, we have stressed the following principles: the widest possible coverage of those receiving public funds, equity through comparable treatment, equity in the treatment of those with relatively low incomes, the continuation of labour-management negotiations on a range of non-monetary issues and attention to increasing productivity and maintaining public sector employment.

I have been quoted as saying that singling out the public service is inequitable. I am not retreating from that contention. But the truth of the matter is that there is a great deal of inequity in our current economic circumstances.

For example, the measure of job security afforded those who work in the public sector must be viewed as somewhat inequitable when many taxpayers are facing reduced work hours, lower or no salary increases or the total loss of income through layoffs.

This program, therefore, may not be equitable in the narrowest sense of the word, and I am not suggesting for a moment it is, but we believe it to be fair and, most important, we believe it reflects the most we can and should do on the wage side at this time.

However, we cannot and do not expect public sector workers to accept these wage restraints without some measure of relief on prices. All prices and fees charged by ministries within this government will be held to increases not in excess of a five per cent guideline.

A cabinet committee will be established to review all those increases in prices set or regulated by government agencies and boards, taking into account that some reasonable cost pass-throughs and economic criteria will form part of our considerations.

We fully expect that a wide range of regulated prices will be held to the five per cent rule on the advice of the cabinet committee. Where any question arises as to the allowable increase, cabinet may refer these price increases to a board empowered to administer both the compensation restraint program and the monitoring of private sector wage and price settlements.

2:30 p.m.

I would take this occasion to announce that as a first initiative within the administered price regulations, just as an illustration, tuition fees for colleges and universities will not be allowed to increase by more than five per cent in the next academic year. That refers basically to the fall, although some will be on a staggered year.

The administration of this program will require judicious, experienced leadership. As such, I am pleased to announce the appointment of Mr. Jack Biddell --

An hon. member: Jack Riddell?

Hon. Mr. Davis: No, God forbid; Biddell -- former chairman and chief executive officer of the Clarkson Co., as chairman of our inflation restraint board. I think he will bring experience and a real measure of sensitivity to this most difficult position. His years of public service, especially with regard to the federal anti-inflation program, combined with his lengthy private sector experience will be a valuable source of counsel to this government in the fight against inflation.

The inflation restraint program which we are proposing today is but one step in a process to promote economic recovery. We are currently working on a further series of initiatives designed to generate further employment and to stimulate economic activity.

We will require the co-operation of the federal government of Canada to achieve these objectives. As such, I would ask the Prime Minister to reconsider his position and convene a first ministers' conference on the economy as soon as possible. An important second step would be the establishment of a national task force on economic recovery, involving all levels of government, industry and labour. It could provide a valuable forum for business, labour and governments to review proposals and to establish the policies necessary for a sustained and vigorous economic recovery.

Failing such co-operation, we, as the government of this province, are prepared to do what is necessary to protect the jobs and security of our citizens. The Treasurer is contemplating a range of measures for introduction this fall, barring any federal efforts to help us in this regard.

But I emphasize this -- and I am digressing from my notes -- I have to say publicly that while many premiers' conferences lead to something other than unanimity -- they certainly have over the past two or three years -- I genuinely sensed in Halifax, and sure I was the only one who felt that the public sector control program should be national and I guess I differ with my colleagues on some other things, but on one issue there was total unanimity, and that was that there was a responsibility, and the other first ministers were prepared to accept theirs, in terms of a federal-provincial meeting, co-operation or what have you, in a way that I have never sensed before.

It was not just a question of blaming the feds. There was just a feeling that I sensed that the other first ministers were saying to the Prime Minister of this country: "Mr. Prime Minister, this issue is not going to be solved by any single government, certainly not by a provincial government. We are prepared to work with you to find some tenable solutions."

With respect to the program being announced today, we will need the understanding and support of all Ontarians if we are to successfully position this province for economic recovery. In particular, the public servants of our province will be asked to bear an additional burden for the period of one year. I have every confidence that they will assume their responsibility in this fight against inflation.

I have reminded my fellow premiers that the economic difficulties we face go beyond mere political partisanship. I repeat that caution. Hopefully some will be listening today. No responsible leader should be tempted to use the economic hardships of millions of Canadians as a means of advancing his own political ends. I trust that together we can find the means and the will to best achieve economic recovery for this province and for our country. The people of this province and country deserve our fullest efforts.

WAGE AND PRICE RESTRAINT PROGRAM

Hon. F. S. Miller: Mr. Speaker, in the last 10 years we have all been caught up in a period of extreme economic turmoil. All groups in society have reacted as best they could to meet their respective needs and obligations.

In the process, however, we have collectively tried to take out of the economy more than it has been able to provide. In doing so we have created serious problems for the future. I think the vast majority of Ontarians recognize this and realize that the time has come when we must all pull back, and all pull back together.

I mention this fact because I want this House to know that the legislation I will introduce today on behalf of the government is not an attack on any one sector. This province has the finest public service in the country. We are simply asking that sector to moderate its wage increases.

First and foremost, this is a program to get inflation under control. It aims to accomplish its objectives by avoiding draconian measures such as massive layoffs. It lessens the burden of government on the economy. It is a crucial step in this province's economic recovery plan.

I now wish to turn to the details of this program. It has three main thrusts to it. First is the imposition of wage restraint in the public sector. Second is the creation of an administered price restraint program. The third thrust is the introduction of legislation which would enable the province to enter into a national anti-inflation program.

Let me deal first with public sector wage restraint. This program will apply to all elements of the Ontario public sector. Coverage will include members of the Legislature, employees of the provincial government, all Ontario municipal and provincial corporations, commissions, boards and agencies. This includes all universities, colleges, hospitals, health boards, library boards, and so on; all provincial and municipal appointees, including directors of public agencies, members of provincially and municipally appointed boards and provincial judges; members of municipal councils, local councils and school boards.

There are a number of organizations that deliver public services on behalf of government. They are either funded directly by us, or are under contract to us. These groups will also come under our restraint program.

The wage restraint package which I am introducing will introduce and create a control year. That year will run from October 1, 1982, to September 30, 1983. Compensation plans that expire during the control year will automatically be extended for 12 months with a five per cent limit. The only exceptions to this limit will be employees at the lowest end of the pay scales. Full-time employees earning under $15,000 will receive an increase of up to $1,000 per annum, allowing them raises in excess of five per cent.

Current contracts that are scheduled to expire after September 30, 1983, will also be affected by the controls program. For example, a two-year contract running from April 1, 1982, until March 31, 1984, would be limited to a five per cent pay increase for one year as of April 1, 1983. In other words, the controls will go into effect on the contract's anniversary date during the control year.

At some point all public sector workers will have to pass through the program. The exact time of passage, however, will vary.

The program recognizes that there are a number of outstanding contracts from the precontrol period. The legislation contains transitional provisions that will deal with these situations in a fair and equitable manner.

2:40 p.m.

In addition, all public agencies that charge prices and all private companies whose prices are provincially regulated will be subject to price review. This will be for a period of one year, starting from the date of any price increase after September 21, 1982.

Examples of public agencies whose prices will be reviewed include GO Transit and the Ontario Northland Transportation Commission.

Private companies whose prices will be affected are those that are subject to regulatory review by bodies such as the Ontario Energy Board, the Ontario Highway Transport Board and the Ontario Telephone Services Commission.

The program will be administered by an Inflation Restraint Board. A further responsibility of the board will be to monitor wage and price developments in the private sector. The government will use this information to encourage responsible behaviour in the marketplace. It will also make this information available to the government of Canada.

The second thrust of our program -- Mr. Speaker, I am having a problem. A note has just been passed to me. Two pages are out of sequence in my speech.

Mr. T. P. Reid: That's the way you see it.

Hon. F. S. Miller: If the honourable member has noticed it, he is better than I am. In any case, at this point I'll put 6 behind 7 and go ahead on schedule.

Mr. R. F. Johnston: The province is in your hands, Frank, which is some indication of why we are in an economic mess.

Interjections.

Mr. Speaker: Order.

Hon. F. S. Miller: The members opposite will never notice the difference, because I am now on page 6.

The compliance period for all fees, licences and prices charged by ministries will begin immediately. As the Premier mentioned, tuition fees will be limited to a five per cent increase next year. The same will hold true for car licence fees, provincial park permits, hunting and fishing fees and so on. These constraints will be in place until December 31, 1983.

Now, this is the page we repeat:

In addition, all public agencies that charge prices and all private companies whose prices are provincially regulated will be subject to a price review. This will be for a period of one year starting from the date of any price increase after September 21, 1982.

Examples of public agencies whose prices will be reviewed include GO Transit and the Ontario Northland Transportation Commission.

Individual ministers will be charged with ensuring that administered prices within their domain conform to the guidelines. Let me summarize the two main elements of the criteria that will be used in assessing allowable price increases for regulated private companies.

First, in determining what a fair price increase is, we will recognize up to a five per cent increase in the compensation package. Second, all other cost increases, including purchases of goods and services, financing charges, depreciation and taxes, may be passed through.

When a minister identifies a price increase that does not conform with these criteria, he may bring it to the attention of a new cabinet committee on administered prices.

The chairman of this committee will be the Minister of Consumer and Commercial Relations (Mr. Elgie). His committee will have authority to recommend to cabinet that it reduce, delay or disallow any administered price increases. It may also request that the Inflation Restraint Board review a particular increase and report its findings back to the committee.

If the application of the criteria causes adverse economic impact, such as layoffs or seriously impaired financial status, then this will be taken into account in a review by the cabinet committee.

The third element of this program that I wish to discuss deals with the second piece of legislation that I will be tabling today. The program we are introducing gives the private sector the opportunity to respond on its own to the need for restraint. However, if their efforts are not successful, the legislation enables the province to join with the federal government and other provinces in a comprehensive national program.

The steps this government is taking today are not merely symbolic. They should demonstrate to management and labour in the private sector that we ask no more of them than we do of ourselves. No program can be completely equitable. This program does not treat every Ontarian alike because every Ontarian is not alike.

For almost half a million of our fellow citizens the biggest difference, the biggest inequity, is that they are unemployed. By limiting public sector wage increases, this program attempts to refrain from adding to these rolls by avoiding the need for public sector cutbacks and layoffs. In addition, we believe that by easing government demands on the economy we can set an example, one that will help avoid the jarring inflationary settlements that have led to layoffs in private industry.

There will inevitably be comparisons between the federal six and five program and the one introduced by us today. I would like to point out to this House some of the more salient differences. Our program has dramatically broader coverage provisions than the federal program. Ottawa has covered its public service and its crown corporations plus the railways. The Ontario program covers not only the entire provincial public service and its crown corporations, but also workers in the municipal, health and education sectors.

In order to give this House a full appreciation of just how significant an undertaking this program is, we are dealing with over 50 separate labour organizations affecting some 2,700 collective agreements and over half a million employees. Furthermore, where under the federal program most employees would not reach the five per cent limit until the second year, our program will bring over two thirds of Ontario's public sector directly under the five per cent limit within the next 12 months.

On balance, we believe our program contains measures that are significantly tougher than Ottawa's, but which at the same time provide greater flexibility. The federal government treated the highest income groups the same as the lowest. In our program, as an example of our flexibility, we have made special provisions for low-income groups.

The program this government introduces today is among the most important initiatives it has ever brought before this House, not only because of its broad scope, but because it sets a new direction in this fight against inflation. It calls upon the federal government to work with us in developing a national program for economic recovery. It calls upon the private sector to continue its efforts to moderate wage settlements and increase productivity. It calls upon the members of Ontario's public sector to support the efforts of this program, not only in curbing inflation but in getting the 500,000 unemployed in Ontario back to work.

We know that with the support of the people of Ontario, including our civil servants, teachers, hospital workers and other members of the public sector, this program will succeed. With its success, we will see inflation's rise blunted and this province firmly planted on the road to economic recovery.

Whatever differences we may have, whether they are between public and private employees, labour and management or even between political parties, they are far outweighed by the common interest we share in seeing a strong and stable Ontario. It is therefore very much in the interest of every group to work together to achieve the objectives of this program.

Mr. Wildman: Mr. Speaker, surely we should let the Minister of Labour get up and give a statement on job creation and the effect on collective bargaining.

Mr. Speaker: Order, order.

Mr. Cooke: What about the right to strike? Why didn't you mention that?

2:50 p.m.

ORAL QUESTIONS

JOB CREATION

Mr. Peterson: Mr. Speaker, I have a question for the Treasurer. The Treasurer is no doubt aware that in the months intervening since his last budget there has been a very serious and major deterioration of the economy in Ontario. Unemployment is up dramatically, as he said in his statement. We have close to 500,000 unemployed. Layoffs increased dramatically in July. The number of people employed is down over a month or a year ago. Business bankruptcies are up by a dramatic number.

What I am saying is that the economy of this province has deteriorated. At this point we see absolutely no evidence of any job creation programs, with the exception of Morley Rosenberg. What is the minister going to do for the 500,000 unemployed in the province now and over this long cold winter we are going to have?

Hon. F. S. Miller: Mr. Speaker, I am sure the Leader of the Opposition was aware of the meeting of the premiers held in Halifax and the discussions in that meeting about the state of the economy. While there was not total agreement on actions to be taken by provinces to restrain public spending, I would say there was unanimous agreement that there was a need for a national economic recovery program.

I have met with the new Minister of Finance. I have passed to him the message from my Premier that there is an urgent need for a first ministers' meeting on the economy and an urgent need for an economic recovery package. Twice Ontario has submitted a long list of potential ways of improving the economy. We believe they need to be tackled at the national level and we are prepared to work with them.

Mr. Peterson: The Treasurer believed the restraint program should be handled on the national level too, but he went ahead on his own and did not follow the leads the federal government provided. Obviously there are very serious problems. Is his response going to be, "There is nothing we can do here in Ontario," or is he going to come forward with a recovery program here in this province? We are the biggest. Relatively speaking we are still the richest even though we are deteriorating. Why can the Treasurer not do something? He did something in the restraint area.

Hon. F. S. Miller: The Leader of the Opposition assumes we have done nothing. In the last few months a few things have been abundantly clear. While other people are falling by the wayside with their triple-A ratings this province still maintains one. Why? Because we have maintained a credible economic posture. That triple-A was not a measure just of our credit worthiness. It was a measure of the underlying strength of this economy.

I would like to point out that we have seen a dramatic drop in interest rates across the summer. I believe that drop is going to continue. We have put about $500 million of various incentives into this year's budget. Those are paying off now. We are seeing an improvement in housing sales, for example; we need more, but at least we have taken some steps, not the least of which has been to continue to restrain our spending.

Mr. Foulds: Supplementary, Mr. Speaker: Would the Treasurer mind explaining how restricting wages in the public sector, for people who work in children's aid societies and rehabilitation centres for crippled children, and taking away their right to collective bargaining, creates one new job in Ontario when there are 689,000 people unemployed today?

Hon. F. S. Miller: Mr. Speaker, my friend in the NDP would assume that the surest way to have more people at work is for government to spend more money. That is not true. We have to be very conscious not just of organized private sector employees and organized public sector employees, but unorganized private sector employees who are perhaps the ones suffering most in today's economy.

I would have to say those of us who share -- and the members and I do to a degree -- relative security of income have a responsibility not to be getting increases at a time when other people cannot even have their jobs. We have to show that leadership.

Mr. Peterson: When I asked the Treasurer about unemployment, he gave us a speech on our triple-A credit rating, which is floundering at the moment because of some questionable expenditures the government has made with its oil companies and things of that type. It has been under review for those reasons. My question is not about our credit rating. My question is about the 500,000 unemployed people in this province, a record number since the time of the Great Depression. What is the Treasurer doing about it? He is the one who said in his statement today that this is only the first step. How long do these people have to wait for relief?

Hon. F. S. Miller: It is not the responsibility of the Leader of the Opposition ever to see anything good done by this province or by this government, I accept that. A lot of other people, though, have been looking at it and have said that this province hasted the way. It is up to the federal government now to do a few things itself. We simply suggest we are prepared to.

The only thing that will make our industries productive is for government not to occupy all of the savings of this country, as it is currently doing, by high spending. That is one of the reasons we took these steps today.

ECONOMIC RECOVERY

Mr. Peterson: Mr. Speaker, in their statements today, the Premier and the Treasurer said the restraint program is only the first step. They are calling for national action for an economic recovery package. We agree with that. The question is, what are they doing? Is their only response to call a meeting or do they have some plans, and if so, what are they?

Hon. F. S. Miller: Mr. Speaker, obviously our purpose is to negotiate with the federal government first.

Mr. Peterson: What did the Treasurer tell Mr. Lalonde? What are the Treasurer's ideas for economic recovery? What does he want the federal government to do? What can he do here? Why is he not doing something now?

Let us not deceive anyone in this province into thinking the government is going to solve our economic problems just by bringing in some restraints. If the Treasurer says that, he is less than honest as a Treasurer.

Hon. F. S. Miller: We have been quite critical of the six and five program in Ottawa as only one part of the solution. We have said, and all the premiers have said, that this is a country; it does require a national understanding.

Belatedly, the first minister has turned his mind to that; he has appointed a new Minister of Finance. I happen to think very highly of the gentleman. I would rather spend some time giving him and giving ourselves the chance to work out co-operatively some of the problems of this country than assume he is not prepared to do so. I have seen him. He has been my counterpart for three years in Health. I think I understand him. Let us see if we can solve those problems, but it does require them working with us.

Mr. Cooke: Mr. Speaker, I am sure the Treasurer has read the Premier's statement made at the first ministers' conference where he said, "During the past year, we as provincial premiers have shared a common frustration with the lack of leadership demonstrated by our federal government."

This cabinet has been sitting for four months to make a decision to come in with this kind of plan that includes no job creation whatsoever. Does the government not understand that if jobs are to be put in place for those hundreds of thousands of Ontarians who will be unemployed this winter, they have to be created now to provide those jobs for the winter?

Where in blazes is the leadership in Ontario? Is this government not just as irresponsible as the Prime Minister of the Liberal government in Ottawa?

Hon. F. S. Miller: Mr. Speaker, the answer to that is obviously no.

Mr. Peterson: How much money is being saved by the public treasury by virtue of the restraint program that has been introduced today? What is the government going to do with that money? How many jobs can be created with it?

Hon. F. S. Miller: It is interesting that the Leader of the Opposition should ask that. What we are doing is limiting the spending of all levels of government. What am I going to do with it? Consistently, the opposition tells me I have too big a deficit. Do they want me to spend more?

WAGE AND PRICE RESTRAINT PROGRAM

Mr. Foulds: Mr. Speaker, I have a question for the Premier. Does not even the Premier see the double standard and hypocrisy of his so-called restraint program which applies to 52,300 unionized, direct government employees who have a total wage package of $1.1 billion? Compare that with the 15,000 medical doctors who will directly receive $1.5 billion from the provincial government in 1982-83. Can the Premier explain why he has hit ruthlessly at the one sector of public employees, yet the bill is silent when it comes to the doctors' settlement?

3 p.m.

Hon. Mr. Davis: With respect, as one reflects on the bill and after having read speculation, I think for the honourable member to say that we are dealing ruthlessly with public sector employees in this province just will not stand the light of day. I know he likes the rhetoric, I know he likes to inflame people -- he has tried for several weeks with limited success -- but to say that this government is dealing ruthlessly with the public sector in this province is totally unfair, inaccurate and does a great disservice in terms of what we are attempting to do.

I just will not accept that terminology.

Mr. Laughren: Answer the question.

Hon. Mr. Davis: That is fine. The members of the New Democratic Party always feel they can say what they want to say but when I reply they get up in high dudgeon. They do not like it. They do not like it when we sort of take issue with what they say.

I will deal with the medical profession. There is a distinction, and I know the NDP would love to legislate all the doctors as public servants on a salary. That is the stated objective of the NDP. I understand that and that is where we differ. I just have not accepted that principle. Let Mr. Rae go out into York South one of these days fairly soon and say to everybody there, "We are going to legislate the doctors as public servants." Just see how far that will get him in that by-election.

I say to the honourable member that I recognize the sensitivity of the issue. They are not public servants in the sense of the word as described. They are public-spirited people, but they are self --

Interjection.

Hon. Mr. Davis: All right, listen, The honourable member can be as critical of the profession as he wants, but they happen to be self-employed professionals. He does not like it, but that happens to be the reality.

I have communicated with the head of the Ontario Medical Association. I have asked him and his colleagues to meet with the government to discuss this issue. I will say no more than that at this moment. I have no intention on a supplementary of hypothesizing or anything of that kind. I just say what I have done.

Mr. Speaker: Just before the supplementary, I would caution our visitors in the public galleries that they are not allowed to participate in any of the debate or otherwise demonstrate. Thank you very much.

Mr. Foulds: Surely the Premier can see that for all the fine words in his speech and all the fine words in the Treasurer's (Mr. F. S. Miller) speech about the integrity and the dedication of Ontario's public service, those are mere words. Why does he continue with the double standard when he rigorously, definitively and arbitrarily, without previous discussion and consultation, imposes a wage settlement and a abrogation of collective bargaining rights on one group of employees who receive money from the public treasury, and yet he goes begging, cap in hand, to the medical profession on a voluntary basis? Surely even the Premier sees the double standard and the hypocrisy there.

Hon. Mr. Davis: Mr. Speaker, it really is "an" abrogation, not "a" abrogation. I say to the honourable member --

Mr. Foulds: I was the English teacher.

Hon. Mr. Davis: If he was the English teacher, I would take a look at his certificate tomorrow.

Hon. Miss Stephenson: No. I shall.

Hon. Mr. Davis: The Minister of Education says she will.

I understand the sensitivity of the issue. The member does not have to tell me; I know. But I also suggest, with respect, it was not done without consultation. Sure, not in terms of the specifics, but I had it made abundantly clear to me by both the private sector unions and the public sector unions that they were not in support of a restraint program. I knew that. That did not come as a surprise at all. So he should not suggest that we did not ask them and that I knew what the answer would be.

While I know the member has some difficulty in making a distinction, this government has sensitivity to the fact that the medical people in this province, apart from the interns and so on who are on a full-time basis at some of the hospitals, in spite of the member's desires, are still self-employed professionals. For many of them, there is no question as to where their income comes from. That is not debatable. We know it.

He may rest assured that I am not going cap in hand to the profession. I have invited them to come in for discussions. For the time being, that will have to be all I can tell him.

Mr. Conway: Mr. Speaker, surely the Premier will agree that the success or failure of this restraint program will turn on the perception of equity and fairness that the broad community will feel.

How does the Premier expect the community at large to accept this as a fair and equitable restraint program, and how does he expect it to work, when the society's highest-income group, which has the self-employed professional status the Premier talks about but which also negotiates with the provincial government and which I think this year draws down $1.2 billion from the public treasury, is specifically exempted from its provisions?

Hon. Mr. Davis: Mr. Speaker, I assume the honourable member is asking a question in the context of what would be the position of the Liberal Party, and I respect that. I am not sure his leader has formulated that policy yet, but I say this very respectfully to the member: They are self-employed professionals. We agree on that definition; I understand that. At least that is what I heard him say. I understand the sensitivity of the issue.

I am saying to the member that I have asked the head of the Ontario Medical Association and whoever he brings with him to meet with the government to discuss this issue. I can say no more than that at this moment. They happen to be in Saskatoon at the moment. I expect those discussions will take place next week.

Mr. McClellan: Mr. Speaker, this question is purely to elicit information to refresh my memory.

Can the Premier confirm whether the agreement with the medical profession which was reached earlier this year included 11 per cent plus three per cent catch-up for 1982-83, 8.75 per cent plus three per cent catch-up for 1983-84, and a base of seven per cent plus three per cent catch-up for 1984-85, raising the average doctor's income after expenses from $80,300 per year in June 1982 to $122,000 by the end of 1985, for a 52 per cent increase over this period of time at a cost of between $750 million and $1 billion? Is that the agreement the Premier is proposing to exempt from his wage control program?

Hon. Mr. Davis: Mr. Speaker, in that the honourable member was quite obviously reading the figures somebody had already given him or he had made a note of at the time of the discussions, I would say he really asked a question to which he already knew the answer.

Mr. McClellan: I want them verified.

Hon. Mr. Davis: I saw him reading them all.

Mr. Foulds: Mr. Speaker, that is a question to which the Premier has no answer. I would like to put another question to the Premier.

Can the Premier explain why there are firm controls on wages to grader operators for the Ministry of Transportation and Communications, to nurses, to teachers, to municipal employees and to foresters? Can he explain why there are firm controls on those people and why, as we read the bill, there are only flexible guidelines on government-administered prices, for example, home heating prices and hydro costs?

Publicly administered prices have risen at twice the rate prices have risen in other sectors, and profits have increased dramatically in that sector. Can he especially explain that sort of difference for us?

Hon. Mr. Davis: Mr. Speaker, I thought the honourable member, as the one-time financial critic for that party, would have some understanding of that without asking the question.

Mr. Foulds: My memory is bad today.

Hon. Mr. Davis: I understand the member's memory is bad. I will just make this observation.

One can take two or three commodities where existing agreements between, say, the government at Ottawa and the government of Alberta and the government of Saskatchewan -- which latter agreement incidentally was executed by the New Democratic Party Premier of the day -- made it possible for certain price increases to be granted in Saskatchewan and Alberta which have been exempted from the federal program. Any increases in the cost of home heating oil, gas, etc., are costs that have arisen as a result of the wellhead price increase that has been set by those agreements.

Surely the member knew the answer to that. If he does not recall it, I suggest that he give Allan a call and he will refresh his memory.

3:10 p.m.

Mr. Foulds: Surely even the Premier, with his facility for saying nothing with a lot of words, would like to explain to the House and to the province in clear, dramatic words that leave no room for double interpretation. Surely the Premier would like to do that at least once in his career as the leader of the government of this province.

Can he explain why he and his ministers have introduced an if-but-maybe price control guideline when he could institute, as he has the authority to do, a freeze on Consumers' Gas, Ontario Hydro, home heating and gasoline retail prices in this province?

Hon. Mr. Davis: I could reply in kind but, when the member asks a question that he understands and can explain properly, I will give him an answer he will understand. I will try to rephrase it for him. Is he the Energy critic as well? I will try to explain it to him. Look at the federal program. The federal program --

Mr. Foulds: Let's look at the provincial program.

Hon. Mr. Davis: Listen, be a bit patient. I will try to be as definitive as I can. The federal program specifically exempted "energy" so that when, under the existing federal-provincial government agreements, the wellhead price for natural gas or oil or what have you goes up, there is no way that we as a province can control the price of that commodity.

What we are saying on the administrative price side is that to the extent that controllable costs of those agencies or those companies applying to our agencies can be reduced by the wage constraint package, then the rate increases will he impacted in the same way. In other words, some input costs that are beyond this government's control have to be taken into account. There is, quite frankly, no other alternative. We do not control the wellhead price of oil and gas. It is as simple as that.

Mr. T. P. Reid: Mr. Speaker, the Premier knows well, because the Treasurer just recently increased the gasoline tax, for instance, by putting it on an ad valorem basis, that the government is living off the avails of inflation as surely as anyone else. Is the Premier, with all this good spirit he is trying to exhibit, therefore prepared to tell the Treasurer to go back to the old modus operandi of taxation of gas and oil, to do away with the ad valorem and simply to set a seven per cent tax on a pre-set figure so that it does not go up every time the wellhead figure goes up?

Hon. Mr. Davis: With great respect to the honourable member, he oversimplifies it. The answer to that quite obviously is no. But I do point out to him that, in terms of what this program will accomplish, it does, to the extent of any wage increase, reduce the potential in terms of the rate increase. It is as simple as that.

I say to the member -- because I know he communicated with his brother and said, "You should not exempt energy"; I know he vigorously raised this with his brother, knowing full well he did not -- the energy source in the western provinces has not been impacted by the federal program. We do not control that.

Mr. Swart: Mr. Speaker, the Premier will know that by his document tabled today, Ontario Government Wage Restraints and Administered Prices Program, price increases that are above the guidelines may end up at the cabinet, but not necessarily. They may just take the extra increase and, on the recommendation of this committee, cabinet may disallow a proposed increase in whole or in part or delay the effective date of an increase.

Does the Premier recall that members of this party appealed the Consumers' Gas award, made last February, which allowed a 32 per cent increase in home heating costs and enabled Consumers' Gas to increase its profits this year, by its own estimate, by 20 per cent? Just five days ago cabinet confirmed that increase of 32 per cent. How does the Premier expect anybody in this province to believe his cabinet will take a single step to stop any of his corporate friends from price-gouging the people of this province?

Hon. Mr. Davis: Mr. Speaker, I had difficulty hearing the final part of the honourable member's question. I would only point out to him --

Interjection.

Hon. Mr. Davis: Sure, he can quarrel with the administrative price side of it. I would be very surprised, because there are "a limited number of situations." If the member feels the cabinet has not dealt with it, if for some reason we have ignored it or the board has ignored it, there is no question that somebody in this House will bring it to our attention.

I can only say to the member, we are developing a system that we think is workable, practical and, from the standpoint of the administrative price side, will achieve those results.

I gave the House one example today.

Mr. Swart: I gave this one. They had a 20 per cent increase in profits.

Hon. Mr. Davis: I say to the member for Welland-Thorold that part of the Consumers' Gas rate increase reflects the wellhead price increase.

Mr. Swart: Of course, that is not what I am talking about.

Hon. Mr. Davis: Sure, it does, and some other price increases reflect the price of crude oil. One of the reasons for the price of crude oil going up is a grievance between the former government of Saskatchewan and the government of Canada. I did not hear the member bleating in the House about what his former colleagues in Saskatchewan did with respect to those agreements. I did not hear him say a word.

ONTARIO MUNICIPAL BOARD APPOINTMENT

Mr. Roy: Mr. Speaker, I have a question to the Attorney General. It has to do with the front-page story in the Toronto Star dealing with the mayor of Kitchener and his appointment to the Ontario Municipal Board.

All of us have heard stories about defeated Tory candidates, and we all have our suspicions. I would like to ask the Attorney General, as chief law officer for the crown, what he thinks of this sorry spectacle of the chief magistrate of a major city of Ontario writing a letter to the Premier of Ontario (Mr. Davis), on the letterhead of that municipality, bargaining with the Premier about becoming a provincial court judge because he had been a Conservative candidate in the last provincial election.

Does the Attorney General, as chief law officer for the crown, not believe that he should intervene and first of all state that such a spectacle reduces the credibility of the administration of justice? Does the Attorney General not feel that he should be tabling with the House all correspondence from his office and the Premier's office dealing with this situation and possibly appoint an independent inquiry, preferably led by a county or Supreme Court judge who would look into the alleged conduct of Mr. Hoskinson, and maybe the conduct of Mr. Goodman and Mr. Rosenberg, and finally the conduct of the Premier, to determine whether there has been a possible breach of the provisions of the Criminal Code of Canada?

Hon. Mr. McMurtry: Mr. Speaker, the letter that was written was obviously, to put it mildly, a very foolish letter. I want to assure the honourable member that at no time was there any communication, either by letter or verbally, between the Premier and myself with respect to the appointment of Mr. Rosenberg to the provincial court bench. That just happens to be a fact. There just has been no communication whatsoever.

Mr. Roy: I would not like the Attorney General to think that he can slough off the situation, because in my opinion if he does, he is undermining the credibility of the administration of justice. The fact remains that serious allegations have been made, some of which have been denied. Someone is lying someplace. That is the first problem.

3:20 p.m.

Second, will the Attorney General look at the fact that he wrote a letter some time in June 1982 and he ended up on the OMB in September 1982? What is the relationship in that situation? Does the Attorney General feel that, given the present situation, Mr. Rosenberg should continue dispensing justice from the Ontario Municipal Board when he did not want the job to start with? He wanted to be a judge. Does he like his present job?

I also want to ask the Attorney General whether such an individual, who has been called a liar by people even in the Premier's office and by Tories back in Kitchener, is a proper candidate to be dispensing justice from the Ontario Municipal Board?

Hon. Mr. McMurtry: I have nothing to add to my first response.

Mr. Renwick: Mr. Speaker, perhaps the Attorney General will advise the House whether Mr. Goodman and he have had any discussions about a possible appointment of Mr. Rosenberg to the provincial court of Ontario.

Hon. Mr. McMurtry: Mr. Speaker, I can tell the honourable member that in any correspondence I have had from anybody, the answer was the same: simply that as far as I was concerned, there were no vacancies for which Mr. Rosenberg could be considered.

Mr. Van Horne: Mr. Speaker, on a point of order: I think it is important while we are on this topic to point out something my leader said. I think he indicated that the only evidence of the Conservative government's job creation program was the appointment of Mr. Rosenberg.

Mr. Speaker: Order.

Mr. Van Horne: The record should show that the defeated candidate from London North --

Mr. Speaker: Order.

Interjections.

Mr. Speaker: Order.

Mr. Sargent: On a point of order, Mr. Speaker: I always thought that when we had a question, the member asking the question had a supplementary, then it went down there for a supplementary and it came back here for a supplementary. You disallowed that. Why? This is an important matter.

Mr. Speaker: If you will just resume your seat, I will tell you why. All members are allowed an original question, all members are allowed a supplementary, and then either the opposition or government side may ask the final supplementary. This is the procedure that was followed, and that will continue to be followed.

FALCONBRIDGE EXEMPTIONS

Mr. Laughren: Mr. Speaker, I have a question for the Treasurer concerning the community that is enjoying Canada's highest unemployment rate -- caused, I might add, not by the salaries of civil servants in the Sudbury district but by layoffs and shutdowns of both Inco and Falconbridge. Since that has happened, the Treasurer and his government have done absolutely nothing substantive to ease the problem there.

Will the Treasurer cancel the processing exemptions under section 113 of the Mining Act currently being enjoyed by Falconbridge, which allow them to ship their ores to Norway for refining there? Further, will he cancel the tax break he brought in a couple of years ago which allows Falconbridge to write off its costs of refining in Norway against its Ontario operations, which costs us jobs and tax revenues here in Ontario?

Hon. F. S. Miller: Mr. Speaker, first, I do not accept the statement made by my colleague that the refining at the Kristiansand plant in Norway costs jobs in Canada.

Mr. Martel: Of course it does.

Hon. F. S. Miller: It does not. The fact is that for every job there, there are about six or seven jobs at the Canadian end; and, in fact, certain types of electrolytic refining are required there. That is something I had a good deal of time to look at when I was Minister of Natural Resources. Each time, however, we are guided by the advice from our colleague. We do not have a monopoly on the nickel markets of the world any more. I am sure my colleague knows that. There was a time when we did have; we no longer have.

Mr. Laughren: The only more ridiculous answer than that was the answer of the federal Minister of State (Mines) that it was the Russians who were causing our problems.

Mr. Speaker: Question, please.

Mr. Laughren: Since Inco obviously has excess refining capacity in the Sudbury basin, will the Treasurer direct Inco and Falconbridge to strike an agreement to have Falconbridge's refining done at the Inco refinery pending completion of its own refining operation in Sudbury?

Hon. F. S. Miller: Mr. Speaker, that is a question I would rather see directed to my colleague the Minister of Natural Resources (Mr. Pope) when he is here, since he would be up to date. I am at least four years out of date with the exact details.

Mr. Martel: I want to say to the Treasurer that his colleague would be out of date with his resource policy.

Mr. Speaker, since the reduction of SO₂ emissions is important to the health of people in Ontario and to the health of the economy, will the Treasurer direct that pollution abatement measures be taken to reduce emissions, create jobs and utilize the Cargill township phosphate deposits to manufacture fertilizer in the Sudbury area?

Second, since we still do not produce mining equipment in the Sudbury area, is his government prepared to go it alone with respect to the production of mining equipment since the federal government obviously is backing out of its commitment to provide funding for the establishment of Clark in Sudbury?

Hon. F. S. Miller: Mr. Speaker, I have visited the Cargill township site of phosphate rock. I understand they are hoping to use Kidd Creek sulphuric acid for that. I do not know that it matters what source we get the sulphuric acid from, whether it is Kidd Creek or Sudbury. The fact is that there is a potential, we believe, for the utilization not only of a rock but also of a product that is in excess supply and is imported from the United States. It all makes good sense.

I understand that my colleague the Minister of Natural Resources is following that. As chairman of the Board of Industrial Leadership and Development, I had some interest in seeing that this was done. I still have. Market conditions and analyses of the rock were going on. It is not a large deposit. I am sure the member knows that. The fact is that it is a 20-year deposit, I think, at the present tonnage, and it would be very useful.

That does not happen just because of government, but we are doing what we can to help. That is all I can say.

BUDGET FIGURES

Mr. T. P. Reid: Mr. Speaker, I, too, have a question of the Treasurer. In view of the fact that his budget of May 1982 is now out of date and that we are faced with three particularly serious problems in terms of job creation -- there are 224,000 more unemployed at this time in August this year than there were last year, there are 174,000 fewer people employed in Ontario at this time than there were last year and all his projections in his May budget being incorrect -- will he tell the House what he gave to Mr. Lalonde in terms of a list of items he wished to see in a national program?

Second, what can he tell the House and the municipalities in terms of transfer payments, welfare assistance and general operating grants that he is now going to follow in view of the fact that his budget projections are incorrect?

Hon. F. S. Miller: Mr. Speaker, the assumption that all budget projections are incorrect is not accurate. As a matter of fact, revenues have dropped somewhat but not perhaps as precipitously as the honourable member may have assumed from own-source revenues. We have had some cuts that are fair, that are retroactive in terms of federal transfers to Ontario apart from those that were unfairly removed through the established programs financing readjustments.

Some years we win in those retroactive adjustments and some years we lose. This is a year where we happen to have lost, at least to date. I keep hoping there may be some further adjustments upwards, and there may even be some signs that there will be.

Where we have the biggest concern, of course, is on the question of unemployment. Unemployment, I believe, is very much a function of confidence in the economy and interest rates. There still is a relatively high level of saving.

We are beginning to see a couple of the programs that we put in place in the budget take hold. We believe that the home owners' grant is starting to create more sales of new houses than were visible in the first few months. We are appreciative of the federal grant of $3,000, because we understand it too is stimulating the used market as well as the new market.

We have put that $171 million to work for job creation within government sector programs. We have the $250 million flowing back into small business.

Although they are hard to find, there are some signs that we are past the worst. I have been warned that all the key indicators will stay bad for a while, even though we believe we are seeing signs of a pickup in the economy. Most important of all is that, psychologically and in fact, the steps we have taken today will help lower interest rates.

3:30 p.m.

Mr. T. P. Reid: I heard Mr. Mackness, I believe, at the Conservative convention tell us a number of things but the fact remains that unemployment is worse than it was. It is going to be worse over the winter. The Treasurer knows that. The Treasurer knows his revenues are down $364 million, from whatever source. He knows that a lot of the municipalities are in trouble because of the higher welfare case load they are carrying. He knows it is going to be a long, cold winter and he knows his revenues are falling.

Is it not time, in view of all this, that he were working on a mini-budget and that he be prepared to bring a mini-budget in very shortly during the fall session to do something about the severe unemployment problem we are going to have over the winter? Is it not also necessary to spell out in some detail what the municipalities and other people who get transfer payments from the province are going to get under this restraint program so they can amend their budgets as well?

Hon. F. S. Miller: On the latter part, we will of course be advising municipalities once the allocation process is complete. But let me point out that because of the varying times of anniversary dates in contracts at the municipal level and at the educational level, calculating the immediate savings to municipalities and school boards on an individual basis is not an easy task.

There will be those boards of education whose teachers, for example, have signed a contract for the next year at whatever per cent. I think it is 12 per cent in Peel. That will carry on until September 1 of next year. Others will not have signed by today and they will be subject to an upper limit of less than 10 per cent. Some municipal employees will be renewing contracts before long and will be subject to five per cent. Obviously, calculation of those individual transfers this year will be complex.

On the question of works, the member asked me earlier what I gave Mr. Lalonde. I did not give him anything in that first visit. The first visit was, most important, to talk to each other, establish contact and prepare for future discussions. What I did ask him was to review the things Ontario placed on the table in writing at the first ministers' meeting. I did not have to go over them again. They are there. Nearly all of them are as appropriate today as they were in February when the Premier (Mr. Davis) delivered them to Mr. Trudeau.

We said: "While we can do something at the provincial level, we can do a lot more at the national level. We are prepared to work with you. Let us not play games. Let us try to solve the problems." We are waiting for that response in the hope it will be accepted.

Mr. Cooke: Mr. Speaker, in the May budget of this government the Treasurer stated and I quote, "While the last few months have been very difficult, there is now a strong potential for the economy to follow a recovery path throughout the rest of the year."

He goes on to say: "Because of these factors and action, the Ontario economy should strengthen during the balance of the year. Employment year-end should reach 125,000 over current levels. Real growth in GPP in the second half of 1982 should be four per cent on an annual basis."

On the basis of this budget which is only a few months old, I would like to ask the Treasurer, since his predictions were so inaccurate and so out of touch with the economic reality of this province, is it not proper for him today to tender his resignation as the Treasurer of this province?

Hon. F. S. Miller: No, Mr. Speaker.

WELFARE PAYMENTS

Mr. R. F. Johnston: Mr. Speaker, my question is to the Minister of Community and Social Services.

Today's statement by the Premier (Mr. Davis) has a lot of high-falutin words, including the first paragraph which says that today represents a crucial opportunity for the Legislature of Ontario to address those issues of vital concern to the health of all its citizens. Because there is no mention of the poor, who have certain concerns, and because there are certain issues which are of vital concern to them -- including those who are single seniors, single mothers, people on general welfare, the disabled -- and since the minister stated on September 9 when he was asked when he would increase welfare payments, "I will do it when I want to do it, okay?" did the minister not want to do it now?

Did he not feel this was an appropriate time to tell the poor that they were of some worth in the economic plans of this province, or does he have no influence when it comes to economic plans in the province and no influence on the Treasurer (Mr. F. S. Miller) or on the Premier when they make major economic pronouncements?

Hon. Mr. Drea: Mr. Speaker, in all fairness, I did not think that member would get up today. Today is not the kind of day to get publicity. We already have enough on our plates. Indeed, his little publicity stunt has been going downhill since the day he announced it and agreed with me that it was a publicity stunt.

I do not really think I have to tell this Legislature what economic impact I have in the cabinet. I think it is well known.

Mr. R. F. Johnston: Also on page 1 of the statement it says this provincial government has created opportunities for the disadvantaged to advance. Would the minister not agree that since he has been minister the only advances the poor in the province have had are for them to advance to the Scott Mission for food, which used to be covered under income maintenance, and for them to advance from apartments which they cannot afford, from rooming houses which they cannot afford, down to hostels and the floors of churches in this city?

What levels will the minister be recommending for these people? Does he expect them to exist on five per cent? How long should these people have to wait for social justice when for many months now people have been clamouring for him to act?

Hon. Mr. Drea: That is a remarkable speech from a social dilettante; from a man who travels around with his cold pack so he can carry his stew when the cold pack is far more than any poor person in the province could afford.

Mr. Mackenzie: You are pretty sick, you know, Frank.

Hon. Mr. Drea: No. I am very well. It is also the same member who just a few moments ago mouthed "double standard." In his little performance in the welfare world, has there been a double standard? Every time the little man gets a little bit hungry it is time for another New Democratic Party caucus so he can eat.

The member has really been going downhill. He and his pals on the Social Planning Council of Metropolitan Toronto tried it out with yet another review of our social assistance rates. He must have died on that radio program when they admitted that what I said was right, that they cooked the books. I could hear the deep breathing. They got caught with their pants down on that one and with their rates. But not only that, they now want to use my statistician. The affirmative action program for under-achieving lefties now wants to use the government's statistician.

I do not want to waste all my good lines today. I defer to the Premier and the Treasurer. It is their day.

Mr. Cooke: Very funny, Mr. Premier.

Hon. Mr. Drea: Are you at it again? What is your problem? The last time I saw the member for Windsor-Riverside he was asking me to take it easy on him because I liked him. Now he is starting it again.

Mr. Speaker: Never mind the interjections, please.

Hon. Mr. Drea: We will have a nice, quiet fall together.

3:40 p.m.

One of the proposals that was put up -- at least I read about it and I presume all the things he says in the media are true --

Interjections.

Mr. Speaker: Never mind the interjections.

Hon. Mr. Drea: One of the proposals the member was suggesting in terms of social assistance was for increases of between 36 and 60 per cent. I would suggest that anybody who is talking in those ranges today is talking in terms of around $800 million, which just happens to be the entire transfer payment amount to all the municipalities of this province by my friend and colleague the Minister of Municipal Affairs and Housing (Mr. Bennett).

I would suggest that we are reviewing the social assistance rates as a government with a great deal of sensitivity and sympathy. We are reviewing them in the light of a new class of person coming on to those rolls because he or she is running out of unemployment insurance and literally has no job or very little potential for any future credits.

Mr. Mackenzie: Could you not see that months ago?

Hon. Mr. Drea: I could see it about as much the member's party did in Ottawa when it was cheering certain things.

Interjections.

Hon. Mr. Drea: What was that?

Mr. Speaker: Never mind. Answer the question please.

Hon. Mr. Drea: We are reviewing it in the light of the restraint program. When we come to a decision, we will certainly bring it forward to the House.

Mr. Conway: Mr. Speaker, surely it is of genuine concern to the minister that recent data seem to confirm that Ontario has among the worst levels of social assistance across the country. There may be a dispute and a debate about that, but certainly we do not rank among the best.

Notwithstanding the fact that the minister does not want to exhaust all his best lines and is saving his Mad Dog Vachon act for another day, can the minister help us specifically with when it is he intends to conclude the review, in view of the fact that we face a very difficult fall and winter, and in these areas the provincial government does have a very significant constitutional responsibility?

When does he intend to let the people in this province know when that review is going to be concluded? Accepting that he does not agree with the member for Scarborough West's proposal, what specific guidelines and new levels is the minister going to entertain and when will we all know about them?

Hon. Mr. Drea: Mr. Speaker, with the exception of a rather derogatory remark, that was a very fair question. Members will recall that last year --

Interjections.

Hon. Mr. Drea: While he was the critic he never asked me a question. Maybe when you get liberated you do a few things.

A year ago we discarded the old policy of universal rate increases. A year ago -- this may be of some assistance to the fading memory of the member for Scarborough West -- we ended the double standard for the permanently unemployable. We took them up to the top rate in two steps. We have brought in widows. We have expanded, particularly in the disabled field. A significant amount of our additional expenses has gone to those who are on fixed incomes and whose chances of improving their lot, regardless of what inflation and the economy were, was somewhat slim.

The question we are looking at now, and I notice that the member did not raise it, is the question of the ability of municipalities with a tremendously increasing case load -- and we have to be realistic because I do not think the federal government can decree that unemployment insurance extensions will be the final cushion for the recession; there are tremendously increased case loads, plus the double-header of a rate increase to general welfare assistance recipients. That is a matter that has to be looked at with a considerable amount of sensitivity. I would think from the member's own riding, he would understand what I am talking about.

We will be reviewing it and we will make a decision before the winter.

GOVERNMENT JET

Mr. Bradley: I have a question for the Premier. I would like to begin by congratulating him on the announcement he made on page 16 of his presentation to the House this afternoon.

Having gone through the escapade of ordering a new Challenger jet, having sent it to Texas to have it refurbished and converted into an air ambulance -- it is a pity it could not be converted to a water bomber -- and now having to cancel the order and give an undertaking to order two water bombers, could the Premier tell the House what the cost will be to the taxpayers of Ontario for this escapade on the part of his government?

Hon. Mr. Davis: Mr. Speaker, I will be delighted to get the exact figures. The discussions have been going on for some weeks with Canadair. I think I am right in saying that the value of the two water bombers in total will be comparable to the credit note or whatever, which will be in excess of what we were to have paid Canadair for the Challenger.

Mr. Bradley: Having denied himself, his cabinet ministers and senior government officials this efficient and comfortable mode of travel, would the Premier be prepared to give an undertaking to this House that he is not going to take any new initiatives in the foreseeable future to provide the same kind of travel mode for his friends, himself and senior government officials?

Hon. Mr. Davis: I am not sure what the honourable member meant. I deal with realities. I would just point out to him that in terms of transportation or other facilities, ministers of the crown in this government -- and I say this advisedly -- have shown a more significant measure of restraint than his federal friends. I really believe that.

Interjections.

Mr. Speaker: Order.

Hon. Mr. Davis: With great respect, it is the member's problem. His leader says it is their biggest problem.

Interjections.

Mr. Speaker: Order. The member for St. Catharines will please contain himself and we will hear the answer from the Premier.

Mr. Wildman: Mr. Speaker, in getting the figures for us, could the Premier check into whether or not there was compensation paid to the company as a result of cancellation of the original agreement? If so, what exactly was there in compensation besides the commitment for the purchase of two other planes?

Hon. Mr. Davis: I sense the member for St. Catharines basically asked that question. When the details are finalized, I will be delighted to share all the information. As it relates to the cost of the Challenger itself, it may turn out that, to the extent the government ever makes a profit, there was a modest return on investment.

ANTI-INFLATION MONITORING

Mr. Swart: Mr. Speaker, I wonder if the Minister of Consumer and Commercial Relations would give us some details about the monitoring program of the so-called anti-inflation board. Specifically, recognizing the tremendous increase taking place this year in automobile insurance rates -- some 20 to 30 per cent, which is going to cost the people of this province some $200 million more in insurance -- will his government give the anti-inflation board the power, as it has constitutionally, to roll back excessive increases in rates?

3:50 p.m.

Hon. Mr. Elgie: Mr. Speaker, so the member has a clear understanding of exactly what is in the bill, there are two elements to the role this minister will be playing. The first is with respect to a cabinet committee overseeing, where the minister in charge deems it necessary, contentious or disputed increases in prices that come within the control of that particular ministry.

The second area, and I think this is probably the one he is referring to, is the area where the anti-inflation board has been given the task of monitoring wage and price behaviour in the private sector and reporting to me from time to time as we may direct. Obviously, we have not had meetings with that board yet to establish any time for those reports, nor indeed have I made any decision yet as to what comments I may make and when I may comment upon those reports, but that information will be forthcoming.

I am a little disturbed the member threw in the issue of automobile insurance because I know his position is that everything should be in the public sector, but I hope he is open and honest enough to agree that the competitive forces in this province have given us extremely low automobile rates. I know he likes to talk about a recent rate he is concerned about without looking at the facts.

Since 1977, premium rates on average have gone up only seven per cent in this province while the payout on claims has gone up over 52 per cent. I know he can do miracles but I have to tell my friend that someone has to pay for those losses, and in spite of all that, this province still has competition in place which provides us with rates that are as good as anywhere in this country.

PETITIONS

HOSPITAL FUNDING

Mr. Hennessy: Mr. Speaker, this petition is for the Minister of Health (Mr. Grossman). It is from the residents of the city of Thunder Bay.

"We the undersigned, as concerned citizens of Thunder Bay and the surrounding region, demand an immediate resolution of the funding crisis that our hospitals face. This erosion of health care must stop now."

This is from McKellar General Hospital, St. Joseph's General Hospital and the General Hospital of Port Arthur.

ONTARIO MUNICIPAL BOARD APPOINTMENT

Mr. McClellan: Mr. Speaker, I have a petition which reads:

"Pursuant to standing order 33(b), we the undersigned petition to refer the most recent annual report of the Attorney General to the standing committee on administration of justice for consideration of the circumstances surrounding the appointment of Mr. Morley Rosenberg to the Ontario Municipal Board, together with the allegations contained in an article and letter published in the Toronto Star, September 21, 1982."

This is signed by 21 members of the Legislative Assembly who happen to be members of the New Democratic Party caucus.

Mr. Speaker: I have had the opportunity of examining the petition and find that it meets the requirements of the standing orders. The annual report therefore stands referred to the standing committee on administration of justice.

MOTION

Hon. Mr. Wells moved that the standing committee on resources development be authorized to sit tomorrow afternoon, Wednesday, September 22, 1982.

Motion agreed to.

INTRODUCTION OF BILLS

INFLATION RESTRAINT ACT

Hon. F. S. Miller moved, seconded by Hon. Mr. Davis, first reading of Bill 179, An Act respecting the Restraint of Compensation in the Public Sector of Ontario and the Monitoring of Inflationary Conditions in the Economy of the Province.

4:30 p.m.

The House divided on Hon. F. S. Miller's motion, which was agreed to on the following vote:

Ayes

Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Birch, Boudria, Bradley, Brandt, Breithaupt, Conway, Cousens, Cunningham, Cureatz, Davis, Dean, Drea, Eakins, Eaton, Edighoffer, Elgie, Elston, Epp, Eves, Fish, Gillies, Gordon, Gregory, Grossman, Haggerty, Harris, Havrot, Henderson, Hennessy, Johnson, J. M., Jones, Kells, Kerr, Kerrio, Kolyn, Lane, Leluk;

MacQuarrie, Mancini, McCaffrey, McCague, McGuigan, McKessock, McLean, McMurtry, McNeil, Miller, F. S., Miller, G. I., Mitchell, Newman, Norton, Peterson, Piché, Pollock, Ramsay, Reed, J. A., Reid, T. P., Riddell, Robinson, Rotenberg, Roy, Runciman, Ruprecht, Ruston;

Sargent, Scrivener, Sheppard, Shymko, Snow, Spensieri, Stephenson, B. M., Sterling, Stevenson, K. R., Sweeney, Taylor, G. W., Taylor, J. A., Timbrell, Treleaven, Van Horne, Villeneuve, Walker, Watson, Welch, Wells, Williams, Wiseman, Worton, Wrye, Yakabuski.

Nays

Allen, Breaugh, Bryden, Cassidy, Charlton, Cooke, Di Santo, Foulds, Grande, Johnston, R. F., Laughren, Lupusella, Mackenzie, Martel, McClellan, Philip, Renwick, Samis, Stokes, Swart, Wildman.

Ayes 95; nays 21.

ANTI-INFLATION AGREEMENT ACT

Hon. F. S. Miller moved, seconded by Hon. Mr. Davis, first reading of Bill 180, An Act to authorize the entering into of an Agreement with the Government of Canada with regard to an Anti-Inflation Program.

The House divided on Hon. F. S. Miller's motion, which was agreed to on the same vote.

Hon. Mr. Wells: Mr. Speaker, with the consent of the House, I would like to revert to motions.

Mr. Speaker: Do we have the consent of the House to revert to motions?

Agreed to.

MOTION

STANDING COMMITTEE ON SOCIAL DEVELOPMENT

Hon. Mr. Wells moved that the standing committee on social development be authorized to sit Wednesday morning, September 22, 1982, to consider Bill 138, An Act respecting the Protection of the Health of the Public.

Motion agreed to.

Mr. Roy: On a point of order, Mr. Speaker: I do not recall that in the statements made by either the Treasurer or the Premier there was any statement on whether these two bills had received a legal opinion from the Attorney General (Mr. McMurtry) that they are constitutional. You will recall that the last time we got involved in this our record before the Supreme Court of Canada was not very good; so I would just like to know whether there is a legal opinion that both these pieces of legislation are constitutional.

Hon. Mr. Wells: Mr. Speaker, before moving the adjournment of the House, it is our intention to proceed with second reading of the first bill on Thursday. The exact order of business for Thursday has not been worked out; the House leaders are meeting tomorrow to consider that point. But I can assure the House that I think we will be beginning debate some time on Thursday on this first bill.

The House adjourned at 4:41 p.m.