32nd Parliament, 3rd Session






The House resumed at 8 p.m.


Resuming the adjourned debate on the motion for second reading of Bill 111, An Act to provide for the Review of Prices and Compensation in the Public Sector and for an orderly Transition to the Resumption of full Collective Bargaining.

Mr. Ruston: Mr. Speaker, speaking on Bill 111, An Act to provide for the Review of Prices and Compensation in the Public Sector and for an orderly Transition to the Resumption of full Collective Bargaining --

Mr. McClellan: Orderly transition?

Mr. Ruston: I suppose it is kind of a sham.

The point I want to put across to the members gathered here, the large number who are here, is that, in effect, it is a continuation of the restraint bill. What I intend to try to show to the members is that this government does not know what the word "restraint" is, if one looks back through its record from 1971 under the premiership of the present Premier (Mr. Davis).

Mr. McClellan: Larry Grossman has wall-to-wall carpeting.

Mr. Ruston: To give the members a rough idea and refresh their memories, if we go back to the 1971-72 budgetary transactions, revenue was $5,340,000,000; expenditures, $5,965,000,000; and surplus or deficit, $625 million. One will notice in this book I am quoting from, the Ontario budget of 1976, it is marked there as a surplus or deficit.

The interesting part is how they put a little scam for us. I am not saying anybody misled us, but somebody, in the printing of the document, came to the conclusion that rather than call it a surplus or deficit, because most people understand what that is, he would call it net cash requirements. I am sure some people still have not figured out what that really means. Everybody probably has some net cash requirements at some time or another. I see the member for Oxford (Mr. Treleaven) looking up intelligently and I am sure that --

Mr. Nixon: He is one of the few people who does not have to worry.

Mr. Ruston: He would not have to in his profession, but I am sure he makes recommendations to people and gives them advice on how they should handle their money. It is too bad he was not here in 1971. Perhaps he could have given a little advice to the Premier as to what he should do.

I was riding the elevator down in the Royal York once with Mr. Allan, who was the Treasurer many years ago. It was right after a budget and he had been retired for a few years. He said: "I just cannot stand those kinds of budgets. They are just not my ball game at all."

I think of a candidate for the Conservative Party in Essex South a number of years ago by the name of William Conklin, a great citizen of the community, a lumber businessman, I suppose somewhat similar to the family of the member for Renfrew North (Mr. Conway), who had been in the lumber business. The Conklins, William and prior to that his father David, were in the lumber business for many years, probably 100 years at least over the cycle of the family.

In the 1967 election I think the second telephone call I got the next morning after my successful entry into politics was from Mr. Conklin. He did not live in my riding but he just called to congratulate me on winning. We used to do business together in lumber. I was in the retail hardware business a few years prior to that, in a little competition with him. However, he would stop in on occasions and have a little visit.

He said, "Dick, I want to congratulate you on winning, but there is one thing I wish you would tell those people when you get down there." This was back in 1967, and they were starting to slip a little by that time. He said, "They should pay their way as they go. If we do have a recession, in a recession year it is understandable that you have to prime the pump, and that is the place of government. But for goodness' sake, when they have good years, they should by all means quit running these deficits."

They were only minor then. If we go back to 1967, which he was talking about, around that time there was a deficit of $119 million; in 1968-69, only $93 million; in 1969-70, $150 million; and in 1970-71, $136 million.

Mr. T. P. Reid: That is when we had Robarts.

Mr. Ruston: That was Robarts. The late Mr. Robarts was classified as the manager.

Mr. T. P. Reid: And Allan Grossman.

Mr. Ruston: I remember a friend of mine who was involved in the party of the chairman of the board for many years and attended his convention. In fact, he attended the convention when Mr. Robarts got the leadership. I think he did not support him on the first ballot, but I am sure he did later.

Mr. Nixon: They usually fall in at the last.

Mr. Ruston: Yes, they want to be with the winner.

Mr. T. P. Reid: The only time they have an annual meeting is when there is a leadership convention.

Mr. Ruston: The interjection helps. As the Speaker will notice, I do not have a prepared speech, so I am not going to be reading unnecessarily, which I am not supposed to do anyway. I would not want the Speaker to reprimand me for reading unnecessarily. If he will pardon me, he will have to accept some of the interjections as we go along. Maybe they will add more to it than what I am really putting in myself.

Mr. Speaker: So long as you keep to the bill.

Mr. Ruston: From the elevation of the Minister of Education in 1970 to the premiership in 1971, we have had a litany of deficit financing so bad that I do not think you could find anything like it in any country in the world.

Mr. McClellan: Not even Bulgaria.

Mr. Ruston: The chairman of the board is the name we gave the late Mr. Robarts. I heard that even before I came to Toronto in 1967. What is the saying of the member for Grey-Bruce (Mr. Sargent)? It is, "Who is minding the store over there ?"

Mr. Nixon: Who has got his fingers in the till?

Mr. Ruston: Yes, I have heard that too. I was riding the train one day and one of the members on the train was elected and another fellow on the train was not. The one who was elected had defeated the other fellow, who just happened to be on the train that day. The one who had been elected had a big bandage on one of his fingers and the other fellow said to him, "Did you have your finger in the till someplace?" He did not. However, that was always a saying used if a politician had his finger wrapped up.

What I want to say in very strong terms is that if we really had a serious chairman of the board over there, if we want to call him that, the Premier, who in the end is responsible --


Mr. Ruston: Sure, he has the Treasurer (Mr. Grossman). I am glad to see the Treasurer here tonight. He is very good at attending. When he is not out doing a little politicking, he stands up --

Hon. Mr. Grossman: I would not have missed it for anything.

Mr. Ruston: It will be hard for him to be a regular attender like his father. We noticed that for many years he was always a faithful attender in the Legislature to see what was going on. It was probably very dull at times, I am sure, as members will notice tonight with my speech. However, I will give credit to the Treasurer that he is one of the better attenders and takes an interest in the whole government, I am sure. Of course, we know he has plans for other things, and we know the Minister of Agriculture and Food (Mr. Timbrell) has too.

Mr. Cunningham: He is not here tonight.

Mr. Ruston: No, he is not here tonight. He has been out. He was in my riding on Tuesday morning. The last time I was at one of his functions a year or so ago he was having this little do put on because he was giving a grant to Primo Tomato Canning Co. He had two tables set up, filled with presidents and treasurers of each Progressive Conservative association riding in the district. They were all there for the luncheon and each one was introduced.

8:10 p.m.

I criticized him for that because there he was handing out a $1.2-million cheque. Before he handed out the cheque, he had to introduce all these treasurers, vice-presidents, presidents and directors of the four or five PC organizations in the area. I must say I object to that. I do not think that is the place for that when he is handing out the money of the people of Ontario, not the government's money. Lord help us, this government has not got a damned cent, only what it collects from the taxpayers of Ontario.

Anyway, there was a $625-million deficit in 1971-72 and $366 million in 1972-73. That was nice, a little better; it went down some. However, they keep going up -- in 1973-74, $379 million and in 1974-75, $546 million.

Mr. T. P. Reid: Of course, because there was an election that year.

Mr. Ruston: Yes, it makes a difference.

Hon. Mr. Grossman: Have you got the federal figures there?

Mr. Ruston: No, I am not in the federal House, Larry. If I was down there, I would have them out; you bet I would.

Hon. Mr. Grossman: I was just checking. I thought Eugene might have shared them with you.

Mr. Ruston: I would have them out because it is the federal government on this side of the border and the federal government on the other side of the border that are causing 75 per cent of the interest rate problems we have and have had for the last three or four years.

Mr. T. P. Reid: And the minister is adding to it.

Mr. Ruston: Exactly; he is adding to it, right on.

Hon. Mr. Grossman: We have $2 billion and they have $27 billion.

Mr. Ruston: Mr. Speaker, I must be getting to them because I am getting them upset. That is a good sign. In 1975-76 there was a deficit of $1 billion and -- when most people are at a meeting and start reading off figures and say "one million" or "one billion," they do not pay much attention to whether they are saying an "m" or a 'b." That is what has happened over there. They just thought the people would not know the difference.

Just imagine $1,570 million, more than a $1-billion increase in one year in the deficit in 1975-76. They call that management by the Tories in Ontario. My God, I would not want to trust them with $10 to invest. We know what they did with Suncor. I was reading what it cost Ontario just to buy that alone. I was figuring it out and it looked to me as if the government bought that with no capital funds -- they were borrowing and had a high deficit. That looked to me to be about as foolish --

Hon. Mr. Grossman: Is this Petrocan you are talking about?

Mr. Ruston: -- to be buying that thing, Larry, as it would have been if, when I had four little children and made $10 a day, I had gone and bought a new Cadillac.

Hon. Mr. Grossman: What section of the bill is this?

Mr. Speaker: Order, please. I would just remind all the members that they must refer to other members by their riding.

Mr. McClellan: The Treasurer really does not have a riding.

Mr. Speaker: The Treasurer really does not have the floor. The member for Essex North does.

Mr. Ruston: That is right, Mr. Speaker. I should call him the honourable Treasurer.

They bought a 25 per cent share in an oil company for $650 million when the government did not have the money. I think they paid 14 per cent to Suncor for half of it and the other half was borrowed on the market, or whatever it was. They actually gave it to them, but they were borrowing from other places. I just cannot imagine any real Tory businessman in Ontario doing such a thing. No way would you find a Tory businessman doing business that way. Yet over there they call themselves the great business managers.

Mr. Rotenberg: How about Trudeau buying Petrocan?

Mr. Ruston: What is that squeaking from over there in Downsview -- no, not Downsview -- it must be the member for Wilson Heights (Mr. Rotenberg). I think he must have a cold or something. I heard a squeak over there.

Mr. Speaker: Order.

Mr. Ruston: I will try not to be interrupted. To go on, in 1976-77 there was another $1,319-million deficit. In 1977-78 it was $1,762 million. That is really unbelievable. I do not think that half of the people of Ontario realize the kind of financing these people on the other side of the House have run this province down to in the last 10 years. That is why I am speaking on this tonight.

We would not need restraint if they had used their beans over there for the last 10 years on how to finance things. If they had used any kind of common sense, they would not need any restraint because we would have had it under control all the time, not like those fellows over there. I wouldn't want to run my hardware store or my farm the way those fellows do.

In 1978-79 the deficit was $1.18 billion.

Hon. Mr. Grossman: What was it the next year?

Mr. Ruston: I think if we went into the details, we would find the next year is really low, $584 million; which is still over a half a billion, which is not peanuts. Sometimes one can kind of cook the books to suit the end of the year; one can kind of work that out.

Hon. Mr. Grossman: Gee, I am glad I asked that question. It dropped in half.

Mr. Ruston: I am sure the minister wants to know about the next year when it went up to $801 million. Of course, he would want me to tell everybody about 1981-82 when the deficit was $1,503 million, but I suppose he would not want to mention 1982-83 when it was $2,548 million.

Really, what this says is that we have had complete irresponsibility in fiscal management by the government of this province for the last 10 years. Because of the position they have got themselves into now, they have raised taxes in the last two years. in November 1981 the tax was 6.3 cents per litre of regular gasoline; in November 1983 it is 7.9 cents. The members can see how much of an increase that means; and they can put that into gallons, which some Tories seem to want to use all the time; and I suppose that is okay if they so desire. I will be interested to see what Mr. Mulroney will do, if he should get elected, with some of the Tories who want the metric system changed in Ottawa.

Another increase, which I am sure everybody would like to know about, was the cigarette tax of 1981. In November 1981 the tax was 30 cents a package and now it is 52 cents. That is the increase in two years. They do not bother with five per cent or six per cent, or six and five; they put it up 30 or 40 per cent a year.

They are now finding out that the economy cannot stand these terrific high taxes they have been putting on over the years. Certainly one needs some kind of restraint, when one puts oneself in that kind of position.

Another is the liquor tax. The distillery receives $2.37 and $11 goes to governments of all kinds. I think the provincial government gets about $6.50 of that $11.

The same is true with regard to Ontario Hydro with its high borrowing that has put us in a very precarious position financially. I had a friend say one day: "You shouldn't call it Ontario Hydro; you should call it Ontario Hydra."

One day when I was here, one of the pages brought me a dictionary from behind your chair, Mr. Speaker, and I looked up the meaning of the word "hydra." It means: "The fabulous many-headed snake of the marshes of Lerna, whose heads grew again as fast as they were cut off; at length killed by Hercules. An evil resembling the Lernaean hydra ... Any terrific serpent or reptile ... A water-snake." The key thing is, one can cut the head off as many times as one wants but it still grows back on.

It looks like that is what Ontario Hydro has done. They have put the province in an unbearable position with their mammoth borrowing, which is now $19 billion. It is my understanding that when people pay their hydro bills in Ontario now about 40 cents goes towards paying off the debt and only 60 cents goes to operations. They have really put themselves in a difficult position.

8:20 p.m.

I was talking to a gentleman last night, the mayor of Essex, who had been on a visit to his relatives over in Holland during the past month or two. I was asking him how things were there and he said, "Quite frankly, I guess they are as bad as here or worse, because they are now facing terrible cutbacks in their public service and so forth as a result of high deficits and their inability to collect more tax from the taxpayers because they have been taxed so heavily in the past."

In our education system we now have people who are directors of education throughout the province -- there are about 100 but I checked on a couple in my own area -- whose salary ranges are higher than that of the Treasurer. I have a great deal of respect for the Treasurer and the Minister of Education (Miss Stephenson), but when they are hiring directors of education all over Ontario in higher brackets even than the chief financial officer of the province, I think somebody has got a little out of line some place.

I am sure the Treasurer has a difficult job compared to that of any director of education. The directors of education have their superintendents and their assistant superintendents. I have great respect for the people who do that work. However, they are limited to small areas; they are in counties, cities and so forth. The Treasurer has the responsibility of the whole province and a budget of $25 billion a year. It seems to me that if he were paid according to his staff and management, the Treasurer would have to be making $100 million a year or more compared to the other fellows.

The administrative setup in education was established wholly by the present Premier to make a modern education system where every board of education had to have a director of education. When a director is put at that high a level, all those under him come within a few dollars. Then everybody is at the top and there are not too many at the bottom, except the teachers. The new teachers certainly are. The administration is taking a lot of money out of the system.

We can understand why we need some kind of restraint, but the restraint this bill gives is really passing it on to the municipalities and the boards of education to try to do their best to negotiate. It is hoped the people who work for the municipalities and school boards will negotiate in good faith, and the municipalities as well, but they are going to be limited. They know they are only going to get a five per cent increase from the government, so it is not going to be easy.

I wanted to draw these things to the Treasurer's attention. This government caused the problem it has by fiscal irresponsibility over 10 years and now it has come home to roost. However, I do not think we have much choice but to go along with and vote for this fiscal restraint at this time because of the terrible mess they have put the province in financially.

Mr. Swart: Mr. Speaker, as a person who has some responsibility in this party for consumer prices and as one who has some real personal interest in it, I want to say a few words on this bill. If I were to pick a text for my comments, it would be the heading of the article written by Orland French on November 9, the day after the minister tabled the bill and made his introductory comments: "It Is All Smoke, Mirrors."

In no part of the bill is this more true than in the prices review section. I remind this House that the main reason given by the government for this bill, and for Bill 179 last year, was to fight inflation. Last year it was called the Inflation Restraint Act. In introducing Bill 111 this year, the Treasurer stated: "There is evidence to suggest that inflationary expectations may again be on the rise ... We could lose all we have regained ... As a government we are prepared to meet our obligation by establishing reasonable and responsible levels for public sector wage and price increases."

Let me also remind this assembly that the word "inflation" has become the pseudonym for the rise in prices of goods and services in our province and in our nation. Therefore, I say, regardless of inputs related to the final price, the main emphasis on inflation control must be knowing and bringing pressure to bear on that final price.

Further, let me remind members of Jack Biddell's comments, which were quoted several times in this House last year. They were from an article written by him in 1980 in which he commented on the inadequacies of the federal Inflation Restraint Board. He said: "Simply put, high inflation is a continuing, unacceptable rate of increase and the prices we have to pay for the goods and services we consume. To contain inflation effectively, we must slow down the rate at which prices are increasing. We must control prices." He went on with several other paragraphs in the same vein.

In the light of those comments, let us look at Bill 111 and at what the Treasurer further said in his introductory comments of November 8: "Further, firms that are either insulated from normal competition or protected by tariffs have a special obligation to avoid the temptation to pass the buck of easy and expedient settlements on to the rest of the economy ... We will continue our course of public sector wage and price restraint for one more year."

This party contended, and it was borne out by the bill itself, that Bill 179 was a wage restraint bill and that its control of prices would be negligible. However, there was within the bill the power for the government to roll back or to stop unwarranted price increases in a very limited sector of the administered prices.

The Toronto Star pointed out on November 7, the day before the bill was tabled, that the bill had been effective in controlling wages but had done nothing with regard to prices. It said: "The Ontario government's policy of restraining wages and prices has succeeded in holding down only the wages of more than 660,000 public sector workers ... But The Star has found that provincially regulated prices have risen more than five per cent. For example, Hydro rates for more than three million customers will jump 7.8 per cent next year. This year the increase was 8.4 per cent. GO Transit fares rose in July by seven to 13 per cent, depending on the distance ... A new licence sticker for a four-cylinder car costs $48 today, compared to $30 last year."

I pointed out in this House earlier this spring that the amount of provincial revenue collected from automobile licences this year was 50 per cent higher than last year. Anybody who wants to do an examination of what has taken place will realize the restraint bill last year only affected wages and did not affect prices. Of course, the prices section was not used, but it could have had some deterrent effect.

8:30 p.m.

Keeping in mind what the Treasurer has said, that we will continue our course of public sector wage and price restraint for one more year, let us look at the prices section of Bill 179. which is part II in the new bill as compared with part III in the old bill. Most of it is basically the same. There is a definition of "administered price." There is the monitoring of administered prices. If the minister feels a price is unreasonable, he can refer it to the board; then the board can report back to the minister and the minister can report to the cabinet.

Up to that point, it is exactly the same. But last year there was another section, Section 29. It said, "Notwithstanding any other act, the Lieutenant Governor in Council on the recommendation of the minister may by order (a) disallow a price increase in whole or in part; (b) where appropriate, substitute a price increase for the price increase disallowed under clause (a); (c) delay the effective date of a price increase" and so on. That section is not in the new bill.

The minister has pulled all the teeth from the watchdog. I say to him, this bill is a joke. It is smoke and mirrors. The government cannot do anything about prices even if it wants to. When I raise price issues with the Minister of Consumer and Commercial Relations (Mr. Elgie) over and over again and ask him to investigate exorbitant prices, he says, "We do not have the power to roll back prices."

Under Bill 179, they had the power to roll back certain prices and they did not use it, and now they have taken it out of the bill. The new bill is totally gutless with regard to doing anything about unreasonable increases in prices. The minister will probably say, "Of course, this year we do not exercise any direct control over wages either; so we are treating wages and prices the same." That is a lot of nonsense, because the minister stated himself that he was going to control wages by the amount of transfer. There is no mechanism whatsoever left within this bill to control prices in this province.

His rejection of any price control at all, of making any intervention in prices, is further demonstrated by the total rejection of doing anything about prices by eliminating section 33 of Bill 179. That is the section in which the government was to monitor prices in this province. It said, "The board shall (a) monitor the pattern of changes in prices and wages in the private sector of the economy of Ontario generally and report its findings to the minister from time to time as required by the minister ..."

That section is also eliminated from this bill. Here we have a bill, which the minister reiterates is designed to fight inflation -- that is, the increase of prices of goods and services -- and the government eliminates even the monitoring of prices generally. The government does not even want to know what is happening with prices. I say to the minister, the bill is a total fraud in that it does not give consumers any protection whatsoever on prices.

Does the minister not think there is something grossly unfair about ordering hospital and nursing home workers, making somewhere between $13,000 and $17,000 annually, and some of them less than that, to pay back up to $1,000 from their wages? Yet companies can increase prices at will, as Consumers' Gas did in the previous year and the year before that, with a profit increase in 1981 of 35 per cent and last year of 20 per cent. If it had not been for two organizations, the New Democratic Party and the Consumers Fight Back group, this year Consumers' Gas prices would have increased again unreasonably. This government did not intervene in any way to encourage the Ontario Energy Board to stop that price increase.

Does the minister not think it is unfair that companies processing the farmers' produce should continue to make higher profits? The Quaker Oats Co., for instance, this year increased its profits; let me quote from its annual statement for its fiscal year 1983:

"Net sales increased to $190.2 million, while net income before extraordinary items improved to $7.5 million, up 26.3 per cent from fiscal year 1982." On the next page of that financial report, it says: "Over the last five years, Quaker's net sales and net income before extraordinary items have grown to a compounded annual rate of 10. per cent and 23.1 per cent respectively."

The compounded improvement in its profits for the last five years is 23.1 per cent, while the government orders the hospital and nursing home workers to pay back a portion of their meagre wages.

In case members think that is an isolated item, I would like to quote from a report of General Mills Canada Inc. It says: "Record net earnings of $12 million before any extraordinary items are $2.5 million greater than the previous year, a gain of 26 per cent, and as a result of continued progress on all operating divisions and higher interest income, the increased earnings coupled with improved asset and cash flow management resulted in a further positive contribution to our position.

"The longer-term trend is similarly encouraging. Over the last five years sales revenues have grown to a compound annual rate of 10.6 per cent, with net earnings growing at a compound rate of 32 per cent."

The Quaker Oats Co. in Peterborough, the Speaker's home city, this year lowered the price of oats -- they get high-quality oats; they demand high-quality oats -- but they reduced the price to the farmer from $200 a ton last year to $150 a ton this year. I will not take time to read them, but I have the prices of the retail products of General Mills and the Quaker Oats companies. There has been a general, ongoing, rapid increase in those prices.

What kind of society do we have when we permit this sort of thing? We do not even want to know it, let alone intervene. Yet we pass legislation to hold down the wages of the lower-paid groups in our society.

If we wanted to pick another example of one group being permitted to escalate its profits immensely at the cost of the consumers, and business generally, it would be that of the banks of this nation. I know this province does not have control, at least not totally, over the profits which the banks make, but the banks are quite satisfied with the existing system.

Net bank profits in this nation in 1977 were $732 million; in 1978, $976 million; in 1979, $1.105 million; in 1980, $1.237 million; and in 1981, $1.71 million. Then the impoverished banks last year had a drop way down to $1.512 billion; it was only the second highest in their history up to that time. This year they are able to recoup it, and they are going to make profits in the neighbourhood of $1.85 billion this year.

In a humane society, a society where we believe in equality, there would be measures taken by government to see that there was some fair sharing of the load of a recession in this province -- one does not load it on to the backs of the workers -- so that it caused the banks and some of these profitable corporations to pay their share, to carry part of the load.

There are many reasons we cannot support this bill. They have been covered well by other members of this party in their speeches. This bill restricts the freedoms and civil rights of the workers of this province, particularly the public workers. It is an injustice to one sector of the economy, the public employees. It does not deal with the economic problems. It does not solve the economic problems. In many respects. it makes them worse. It does not even fight inflation.

I just want to conclude by saying that if the fight against inflation is the goal, instead of Bill 111 we should have a fair prices commission. We should have a public advocacy agency. We should base an insurance rating board. Most of all, we should have a government that cares about consumers.

8:40 p.m.

Mr. Haggerty: Mr. Speaker, I want to follow my colleague from Welland-Thorold. I thought perhaps he would be really thumping tonight with reference to the big guns that were down in his area on Wednesday, November 16, in Welland. There was an article in the Guardian Express about it, though I would not want to quote the story.

Mr. Swart: Quote the headline.

Mr. Haggerty: It says, "PCs Laugh Off Our Problems."

Mr. Bradley: That is a good headline; very accurate.

Mr. Haggerty: That is right.

It says the Progressive Conservative Party, instead of offering Welland wisdom, had wine and jokes that night and had nothing to offer some of the areas to resolve the problems that are facing Ontario and the many persons who are unemployed. If I were to quote some of the language in there, Mr. Speaker, you would rule me out of order. However, I will pass that on to you so you can smile and laugh about it as you read it.

Mr. Speaker: Now to the bill.

Mr. Haggerty: Now to the bill, yes.

I am delighted to speak on Bill 111, the Public Sector Prices and Compensation Review Act, 1983. The 1982 bill read, "Ontario brings in wage and price restraints and a five per cent limit on public sector settlements." So there is very little change, except, I hope, a phasing out of the wage restraint program in Ontario.

I spoke on the restraint bill last year and my topic was concern about the banking industry in Canada, particularly the huge profits that were made. I was often brought to order by the Speaker telling me I was out of order.

if we are going to have any restraint program, we have to include all sectors of the economy. By rights, it is at the federal level, but I thought perhaps when the top ministers of this province were addressing this matter with the federal ministers and ministers from all provinces across Canada, interest rates should have been one of their top priorities. I have seen so many people who have lost their homes because of high interest rates.

If anybody is still banking money today, they do not have the gold account of a couple of years ago when one received a good portion of return on investment, one might say, in the gold savings accounts in the banks. Today, it is down to about seven per cent interest on savings, but borrowing money is as expensive as it was two years ago.

One area that I thought this government would be taken to task about is the banks. Somebody must be speaking out against them and their huge profits. My colleague the member for Welland-Thorold (Mr. Swart) went into the size of the profits they make. I read in an article recently that bank profits would be up 40 per cent this year.

I spoke with some reservations about the bill last year and I still have reservations about it this year. I draw to members' attention that something has to be done by this government to take the leadership role, as it claims it does in many other areas. With the federal government, and their partners from other provinces from coast to coast, they must go after the Bank of Canada and have that spread between the interest rates on savings and loans reduced. At one time it was around 1.5 per cent. Today it runs anywhere from six or seven per cent to 10 and 11 per cent. If the government wants to have a restraint program and bring reasonable stability into our economic programs, then it must tackle the area of the banks and the profits they are making.

It is great to say this government and the federal government can take credit. They all take credit now because the inflation rate is down considerably, from more than 12 per cent to less than five per cent today. To accomplish that, it had to be done in an adverse way. It had to be done on the backs of those persons who were unemployed. They stand up here and say, "Yes, I will take credit for bringing it down; but to bring the inflation rate down one has to slow down the economy." When one does that, it means jobs are going to be lost.

I appreciate the Treasurer bringing in this bill today, although it still has the inequities that were in the previous bill. It does give the government, the people of this province, the unions and employed persons an opportunity to phase out a program and to bring in new areas of -- I would not say restraint -- new areas of policy with priorities to see that the same thing does not happen as occurred after the 1976 wage and price restraints that affected every sector of the economy. After that it was a catch-up; "I have to catch up on what I have lost."

I was amazed at the Treasurer saying that this year the doctors will be caught under the restraint program. Last year it did not apply to them. As my colleagues the member for Haldimand-Norfolk (Mr. G. I. Miller) and the member for Brant-Oxford-Norfolk (Mr. Nixon) indicated, the doctors are going to be brought in; but not at a five per cent increase, it is going to be eight per cent.

Although the restraint program was in effect last year, we saw the increase in the ad valorem tax on gasoline, an increase in Ontario health insurance plan premiums and hydro rates. It is interesting that a number of members speak about Ontario Hydro. I have something here I should read into the record, Ontario Hydro Quarterly Update. This is the second quarter and I received it on October 11, 1983.

It says: "Commentary to Financial Statements. Financial Results: Ontario Hydro's net income for the first six months of 1983 was $266 million, an increase of $105 million over the corresponding period for 1982. Revenues totalled $1,867 million, up $109 million over 1982. Primary revenues increased $114 million, mainly due to an 8.4 per cent average increase in power rates partially offset by a one per cent decrease in the volume of sales."

We can see here that even Ontario Hydro is following the same principle as this government. I suppose if one can call it leadership, they increased the areas of taxes on many things. I have mentioned OHIP, hydro rates, ad valorem tax, personal income tax.

Yet when one looks at the restraint program the government has, one wonders if there is any restraint program. Revenues have increased considerably in Ontario through the tax increases and yet there has been no reduction in the areas of deficit spending. The province continues to spend and spend.

Perhaps one of my colleagues can bring it to my attention if I am wrong, but I think 1970 was the last year this province had a surplus. It was under different leadership, under the late Premier John Robarts. There was a Premier who understood economic problems in Ontario and fiscal restraint policies. From 1970 to 1983, we have seen the deficit increase year by year. This year it is estimated to be over $3 billion.

8:50 p.m.

I threw an interjection to the Treasurer about Darcy McKeough, the former Treasurer of Ontario. It is too bad Darcy is not over there now. If anybody brought Hydro under control, it was Darcy McKeough. I believe it was 1976 when he withdrew some $500 million Hydro was seeking. That set them back a little. That was when the select committee on Hydro affairs was established. I believe it was 1976 or 1975. That committee did an excellent job in bringing Hydro under some measure of control, but lately Hydro is getting out of hand again. It has often been discussed in this House that perhaps we should establish that committee again.

I think the Treasurer in his wisdom should be doing that. That committee could perhaps assist him in bringing about some fiscal constraint programs in his ministry and have some control over the money that is being spent.

I have some difficulty in following the principle of the new bill. It does say we are going to have a form of arbitration now that is going to deal with areas of grievances against wages and other areas at the bargaining table. Perhaps that may give some merit to the bill, but the point I am concerned about is in part II of the bill.

The explanatory notes say: "In part II of the bill, procedures are established for the review, on the basis of criteria to be provided by the Minister of Consumer and Commercial relations, of prices, fees and charges established, regulated, required or recommended by public agencies or public regulatory agencies in Ontario. The minister is authorized, where he considers it necessary, to report to the Lieutenant Governor in Council instances in which these 'administered prices' are increased contrary to the criteria provided by the minister."

I do not think he has indicated to the House what criteria we are looking at. It is difficult to draw the intent of this bill without having that criteria tabled.

Hon. Mr. Grossman: Five per cent.

Mr. Haggerty: That is interesting. Five per cent and that applies across all government agencies and municipalities. It is difficult for many of the municipalities to stick within that five per cent increase. There are other areas besides wages that have to be considered in dealing with local municipalities.

I will cite one example. I raised a question with the Solicitor General (Mr. G. W. Taylor) and I have a letter here just received recently from the Mutual Aid Fire Services Association. Here is one area where I think the province is going to have to share in some of the cost. It is the regional municipality of Niagara Mutual Aid Fire Services Association. It says:


"Submitted by the regional municipality of Niagara Mutual Aid Fire Services Association. Subject: implementation of regulations respecting protective equipment for firefighters.

"Whereas the Minister of Labour has already served notice that the specifications of the Ontario code for head protection of firefighters be mandatory effective June 1,1983; and

"Whereas the province of Ontario is considering more regulations under the Occupational Health and Safety Act respecting protective equipment to be used by firefighters; and

"Whereas the proposed regulations, if approved, will require new equipment for face and foot protection, turnout coats and turnout pants and respiratory equipment and other protective equipment; and

"Whereas the cost of implementing the proposed regulations will require all municipalities, not only in Niagara but across the province of Ontario, to expend considerable funds for new equipment by 1985,

"Therefore, be it resolved that the province of Ontario and the minister, the Solicitor General, be petitioned to assist municipalities with the financial burden for the cost of changeover to the equipment proposed under the new regulations."

I would bring to the attention of the Treasurer this is one area that is going to cost the municipality a considerable amount of money. I think in my area in the Erie riding, in particular the town of Fort Erie, the city of Port Colborne and the township of Wainfleet, there are 10 or 11 firehalls with all the equipment. As to the particular equipment and special gear for the firefighters, I can just imagine what it is going to cost per man to meet the required safety standards. It is going to cost a considerable amount.

There are perhaps 60 to 70 volunteers in almost every municipality. In some cases there may be more than that, but the average would probably be about 60. I do not know where the municipalities are going to dig up the money to pay for the safety equipment for firefighters, who provide one of the best emergency services that can be found in any body of special services in Ontario.

That is one area. I have seen areas where, in certain municipalities I think the town of Fort Erie -- they have had to increase their water rates to local industries and commercial areas by 300 per cent. One might say this is another form of taxation where the local persons, the consumers, have to pick up that 300 per cent increase.

There are areas which affect local school boards, the county school boards or the regional school boards. I know the hardship which was put on to them. They have had to cut back on certain services in providing education. Perhaps it should be improved in that area.

Again, I suggest that many of the school boards and municipalities are really being hurt by this. They really cannot supply the needed services without going above that five per cent. If they go above the five per cent, it means the local taxpayer will have to pick up that extra cost. The cost now to the taxpayers in the area is unfair; inequity is there.

I concur with the phasing out of the restraint program. I am pleased it has taken two years and that perhaps this bill will be winding down. Hopefully, there are other measures. I do not know what kind of measures could be applied after the bill is wound down next October. I suggest that some place along the line this government is going to have to provide additional leadership in this area so that we do not have the same thing -- the surge, that catch-up -- that occurred after the last restraint program in 1975-76.

I know that many unions today have backed off on wage increases and other things which they have gained over the years at the bargaining table, such as pensions and other fringe benefits, if it can be put that way. However, I think the fault is with this government and all the governments, and even perhaps the unions and those persons who went to the bargaining table.

Not too long ago, back in the early 1960s, I found that in industry they had what they called a cost of living allowance formula based upon the consumer price index. The feeling at the union meetings at that time was, "I do not care if the inflation rate goes up because I am protected." I can see it being withdrawn in many areas now because of the decline in the inflation rate, so perhaps there is no need to have the COLA formula there.

However, I do suggest this is one of the areas which has caused the inflationary rise in Ontario and in Canada as a whole. I think much of that is started by governments themselves. I suppose it is done to keep peace among the employees of government agencies. This is one area which I think has caused much of the problem. Although some say I should not be talking about the COLA formula because it should remain there, I think it is one of the areas which has caused the difficulties we are in.

The other area is the continued increase in the cost of borrowing money. When I started out, I said that I had seen many families who had lost their homes because of the high interest rates. In many cases today, people who are buying homes are still paying 18 to 22 per cent interest on their mortgages.

I suggest to the minister that this government must show some leadership in discussions with the ministers in the other provinces and with the federal minister responsible for policy in this area. I concur that we should have a phasing out of the restraint program and I am delighted to see that the minister has brought it forward. I do have reservations about it. As I said, everybody can take credit for the drop in inflationary rate, but it has been done on the backs of those persons who are unemployed.

9 p.m.

I would like to see the government go further and come in with some program now to get those persons who are unemployed back working, so that they have a source of income, because in many areas many families have been hurt by it. This government is going to have to move forward with some program to create jobs. Industry is going to have to do something to create jobs, too, because I think it does have a responsibility in this area.

Another concern is that this province has caused problems by borrowing money. It has increased the inflationary trend. This government is going to have to take some consideration about borrowing money. It cannot continue to borrow the way it has done. It has increased taxes and still has borrowed beyond its means. That is a cause of inflation. The new Treasurer is going to have to look after that.

I suppose I have to support the bill because we are phasing out the program. On that basis I hope the minister has listened to some of my comments.

Mr. Breaugh: Mr. Speaker, I rise in opposition to Bill 111. A lot of things have been said in the course of the debate about what this bill does and does not do. I have serious reservations about almost every aspect of the bill.

Let me start with the title of the bill. It strikes me that there is a skill being used here which is rather old, which this government has practised for a long time and which continues, quite frankly, to be reasonably successful for it. The skill is to identify its greatest weakness and then pretend to run straight at that.

Part of the title of this bill is An Act to provide for the Review of Prices. The first order of business is to call it an Act to provide for the Review of Prices. If there is anything this bill does not do, it is review, control, monitor or do a hell of a lot in any respect about prices. But the skill is to name that as the first priority. As we walk through the bill and go through the clauses that talk about price control, there is very little except a passing eye kept on prices in this legislation.

The bill title also includes Compensation in the Public Sector and an orderly Transition to the Resumption of full Collective Bargaining. If we look at the provisions of this bill, it is not a transition bill; it is a wage restraint bill very much like the one we looked at last year. The details are somewhat different, probably having more to do with recent court decisions than with the current desires of the Treasurer or the government.

The bill is touted to be a transition bill to get us from a restraint period, which is what they had in the title of the bill last year, into a free collective bargaining period, which is what they say will come at some point in the future. I noticed in a story in the Sun this morning that the Treasurer established a little more clearly what he means by this bill. He says it is a voluntary restraint bill, but if it does not work, he will bring in mandatory restraint. That is not much of a choice for people who are working in the public sector or people on school boards and councils who have to deal with that kind of problem.

I looked for some quotes of other people's assessments and I thought it was most interesting to find quotes from those who were in support of the legislation in their analysis of the bill. For example, there is a little government publication called Background, put out by the Ministry of Municipal Affairs and Housing. It quotes an editorial from the Ottawa Citizen of November 10:

"It's not hard to admire the political craft that fashioned the veil of smoke and mirrors that is Ontario's new public sector restraint program. By replacing wage controls with a five per cent guideline, Treasurer Larry Grossman has shifted the onus for enforcing restraint to public sector managers and unions while maintaining the appearance of government action."

This is an editorial from a newspaper which supports the legislation, but it frontlines that --

Hon. Mr. Grossman: What paper is that?

Mr. Breaugh: From the Ottawa Citizen.

Hon. Mr. Grossman: Read the whole article.

Mr. Breaugh: The minister knows if I had four hours, I would he happy to read the whole article to him and anything else he wants read, but in the meantime he can sit there and listen to my 15 minutes.

Hon. Mr. Grossman: Read the good part.

Mr. Breaugh: The minister will probably get a chance to read the good part. I think the amazing thing is that it begins its analysis of the government's program by using the polite term, which is becoming a trend, by saying this is "smoke and mirrors." Where I come from, we do not use that kind of language, but then, Mr. Speaker, you probably would not let me use that kind of vernacular in the House this evening.

It identifies very carefully that what is at work here is a restraint program which is crafted in crass political terms rather nicely, but which has the same effect, perhaps even worse, than last year's restraint program. This government is making municipal councils, school boards and a vast range of agencies and bodies out there, controlling the lives of 680,000 people now, the villains in the piece. The government of Ontario will sit back. It has accomplished virtually what it set out to accomplish last year. It will do it again this year, except it refuses to take the political heat for that. It has transferred that heat on to local boards, agencies and commissions.

There is a measure of -- the nicest word I can think of -- deceit in this approach because it pretends to he a transitional period and it is not. It pretends that restraint will be exercised in one sense by the government of Ontario because it will hold the line on transfer payments, but then it puts all the accountability on people who are sitting out there on the councils.

I watched the local municipal response to this legislation rather carefully. It will be seen that people in local government positions are saying: "That is it. The province of Ontario is going to limit us to a five per cent increase in grants and that is going to be the restraint program. There is a five per cent limit on settlements." Yet the legislation does not say that. The legislation rather coyly moves around that and says, "You can roll over the five per cent if you want, but you will pick that up locally. You will not get that in grants from the government of Ontario."

The second paragraph I wanted to pick out of this editorial from the Ottawa Citizen kind of hits the nail on the head. It says: "An extension of strict wage and price controls would have inflamed organized labour and made the transition to decontrol that much more difficult. Besides, in light of last month's Ontario Supreme Court ruling on Ontario's old restraint legislation, there is reason to doubt that similar legislation would have been upheld by the courts." That is probably getting much closer to the truth than anything I have heard the Treasurer say.

They tried a full-tilt restraint program in Ontario last year, got it kicked around in the courts and then decided they would do the political thing this time, and that is not call it a restraint program but put a different face on it and make sure that it will be local boards that take the heat instead of the province. But, in essence, they have done exactly what they did last year, sideways. If there is a purpose to the exercise, it is to avoid a direct confrontation about the honest-to-God's truth as to what the government of Ontario is attempting to do with this legislation.

One other little place I looked for some guidance from people who I thought would probably accept the program in its essence was from the Ontario Hospital Association in the little memo which they put out on November 16. They have done a review of the restraint package and are raising what I think are interesting questions, such as: "What do you mean by total compensation? What do you mean by interpretation of the ability to pay? Just exactly how will this arbitration process work?"

That brings me to the second point I wanted to cover this evening because I think that ability to pay stuff is important. What the government has done is red-flag ability to pay; and it has its number for that, a five per cent limit; and that is exactly the way it would be interpreted and exactly how this thing is going to come out in the long run.

The arbitration process is an interesting one in Ontario's system, because it has been a traditional tool. Although most of us who are advocates of a free collective bargaining system are not great fans of the arbitration process, traditionally in Ontario it has served a noble purpose. Where one is bargaining with a group that one knows cannot resolve differences, there is at least a mechanism to try to do that. There have been breakthroughs; for example, in many parts of rural Ontario, it is often pretty tough for the first little bargaining unit of a local to go in and establish a first contract; very often arbitration can serve a useful purpose there.

Very often arbitration is used in a crass political sense at the local level when nobody wants to take the heat for doing what he knows ought to be done. A local council or school board will say, "Well, maybe these people deserve this kind of an increase, but it is not going to be this group that gives it to them. We will whip this one off to arbitration somewhere and let some stranger do the right thing, make an arbitration award which is fair and reasonable for all sides." That probably could have been resolved locally, but politically they do not want to do that so they do not do it.

The arbitration process has made several breakthroughs in bargaining for fairness. It probably could not have happened at the local level, or at least it would have been very difficult to do.

9:10 p.m.

I do not want to go on at any great length this evening, but I do want to make some basic points I think are being missed a bit. I know the face of this program is not as cruel and as hard as the face of the program last year, but the net result is exactly the same. I do not think there should be any doubts about that.

The price being paid for this kind of a restraint program is a heavy one. I know a lot of people on municipal councils and school boards who have mixed feelings about this. They have a gut instinct that perhaps a restraint program is not a bad thing, though I sensed at the Association of Municipalities of Ontario meeting I attended this summer that the kind of catchword aura around restraint and the kind of fashionableness of it all has faded. It is not quite the popular thing it was even a year ago.

I think more of them are becoming aware they have been set up as fall guys. They did not have the chance to decide what the restraint program would be, but they are going to be the villains who have to tell their workers exactly what is what in terms of this legislation.

The government is building a history of unfairness in the minds of people who work for municipalities, school boards and all those other agencies. They did it last year with the restraint program and they are doing it again this year with the restraint program. They know what happens when they build up that kind of frustration among workers.

Inevitably, that means a strike at some point. In my view, strikes do not happen over one particular incident and they rarely happen over one particular thing like someone's salary or a benefit package. They happen because workers have been frustrated over a long period. They happen because people are mad. They are not mad over what their wages are going to be this year or what their benefits will be this year. They get into that frame of mind when they have been repeatedly frustrated in their negotiations. It is a cumulative thing. One of the things I am anticipating through this year and probably into the next year is that this frustration is going to get vented.

The government might have been able to say to people there will be a restraint program for one year, but they are now making it on into two, and in reality longer than that. That frustration has to vent itself. Sadly, I predict they are causing a disruption in the labour force, with municipalities and school boards in particular, that is going to vent itself some time during this year.

We are going to see a lot of activity in contracts going to arbitration when they normally would not do that. I think that is unfortunate. The turmoil that was caused last year and that has been extended this year is all building up out there. That is going to vent itself at some point, and the only possible way I can think of -- and it has already been talked about at some of the public sector unions now will be in strikes of some sort, some disruption to the normal bargaining process.

For those and a number of other reasons, I find this program every bit as distasteful as last year's version of it. I do not care whether it has been politically crafted in a more saleable form. I do not care that they have transferred the responsibility of taking the heat to somebody else.

It seems to me that the end result of this program is almost identical to that of last year's program. They have put an unfair burden on people who represent their municipalities on school boards and local councils. It seems to me that in the process of doing that they have screwed around with the arbitration process and they now have it in what I consider to be an untenable position.

They cannot say to somebody, "Arbitrate a labour dispute, do what is right, do what is fair, but here is the limit." They have made it in such a way -- almost an ingenious way, I might add -- that there is a limit, but no limit. If that is not traditional Toryism in Ontario, I do not know what is. There is a word that summarizes my feelings about this particular restraint program. It stinks.

Mr. McKessock: Mr. Speaker, I rise to support Bill 111, the restraint bill. I come from a rural area where money has been scarce over the last few years. To see that the rest of the country is called to exercise restraint is an important part of our economy as far as I am concerned.

I notice, though. that the government is going to leave the responsibility up to the municipalities and school boards to set the tone and the size of the restraint. That, of course, takes the heat off the government, but the municipalities have not got much choice but to hold their increases to five per cent when the government is only going to allow them that much of an increase.

I am glad the Treasurer is here because I wanted to make some comments to him. I notice his picture was in the Farm and Country. I am sorry I threw it out today because I wanted to bring it up tonight and --

Hon. Mr. Grossman: The member threw my picture out?

Mr. McKessock: His overalls were dirty, so I threw out the picture. Actually, the Treasurer looks pretty good in coveralls. I really appreciate the fact he did go out and speak to the farmers on their territory and listen to their complaints because I hope he did get --

Mr. McClellan: Where was Dennis Timbrell?

Mr. McKessock: The farmers had been talking to the Minister of Agriculture and Food for some time. I had a group of people come down to meet Mr. Timbrell a week ago. When they left, they said, "Maybe we should be meeting with Mr. Grossman."

I said that might be a good idea and maybe the next time they should do that or they should do that very soon. One group of people that has known what restraint is in the last couple of years is the farmers. If they do not get a payout for 1983 for the beef industry -- and I suspect they asked the Treasurer for this -- they are going to be in very serious trouble. In fact, they are in serious trouble now.

Does the Treasurer want to hold the beef industry in Ontario or does he want to let it fall to the other provinces which are supporting their beef farmers?

Hon. Mr. Grossman: Do you know I was in your riding last night?

Mr. McKessock: Yes. I heard you were there. Did you have a good time? I hope you did.

Hon. Mr. Grossman: There were 300 Tories. It was unbelievable.

Mr. McKessock: That is about how many there are. That is true. I am glad they all turned out to see you.

Hon. Mr. Grossman: I heard you had 100 at your dinner.

Mr. McKessock: I would like to get back to the topic of restraint. I am sure the farmers impressed on the Treasurer that Quebec has a program for its farmers, as does the Progressive Conservative government in Saskatchewan and the government in Manitoba. I just received a letter this week from the Wellington county cattlemen who told me they are at least $500 per head behind these other provinces over the last two and a half years because of the assistance these other provinces have given their farmers.

The other provinces are expanding and we are going broke. It is not a fact that so many have to go out of business, as the Deputy Minister of Agriculture and Food said. If no other provinces were giving support, we would gladly lose our share of the industry, but the fact is the other provinces are supporting their farmers and we are losing the share of the industry for all of Canada. I hope the Treasurer does not want this to happen. I am sure the farmers stressed to him that they would have to have a payout for 1983 or the industry is going to be left in a very sad and depressed state at the end of this time.

Restraint is nothing new to the farmers, so I have no trouble supporting the bill to keep a little restraint on other areas of the economy.

I might also mention to the Treasurer that it has been pointed out to us that Ontario cannot make a payout this year because it would interfere with the federal stabilization plan. This is utter nonsense. I read right in last month's Cattlemen magazine that Saskatchewan has already extended its deadline to December 15 for signing up for its own stabilization plan, which means that it is going to be making payments well into the year 1984. We should be doing exactly as they are, having our own program and saving our own farmers until the time the federal plan comes in; then we can drop our own plans.

9:20 p.m.

Ontario's idea is that we do not pay anything; we wait for the feds to do it. All we are doing is giving in to the other provinces and helping them out. They are in no hurry for a federal stabilization plan, because they have their own plans that are doing quite nicely. Their plans probably do much better than the federal plan will.

I am glad to see in this bill that the arbitrators will have to consider the employer's ability to pay. Arbitrators over the years have been one of the causes of inflation, because they usually award contracts that are much greater than the employer can afford and have added to inflation. Now the bill states they will have to look at the ability of the employer to pay.

I look at the ability of the government to pay the beef farmer for 1983, and it looks pretty sad because -- the Treasurer is not paying any attention to me.

Mr. Van Horne: Even if he were looking at you, he would not be paying any attention.

Mr. McKessock: I hope he pays good attention to whatever he got on his boots in the barnyard because -- I want to impress this on him -- all the beef farmers in Ontario are going to get this year from feeding their cattle is what the Treasurer got on his boots. It is very small pay for the effort, work and cost they have put forth in their industry this year.

If the beef industry and the farming industry as a whole were given greater support by this province, this would help the machinery business and all businesses in small towns to pick up. Perhaps the money put into Massey-Ferguson would then not be lost. As it is, the farmers will not be able to afford those tractors even though they are subsidized by the Ontario government.

Since the Treasurer is not going to listen to any more of my beef problems, I am going to stop.

Hon. Mr. Grossman: I listened to every word, and I will read the Hansard next week.

Mr. McKessock: Okay; we will look for that 1983 payment before the end of the year.

Mr. Rae: Mr. Speaker, my colleagues have spoken, led off by the member for Port Arthur (Mr. Foulds), at some length in this debate about the issues that are of the greatest importance to us with respect to this legislation. I want to focus my remarks, if I may -- I would appreciate having the attention of the Treasurer while I do this, since it is one of the few opportunities we have outside question period to attempt to elaborate on an argument with a fellow member of the assembly and to attempt to put some arguments before him that I think are worthy of consideration. They are things the government is going to have to reckon with.

We have been through a very difficult year as a province and as a people. We are in the middle of a recovery that has not yet touched literally hundreds of thousands of our fellow citizens. We are in the middle of a time when government has lost even a modicum of commitment to social justice in the public sector and when there is very real insecurity in the public sector, as there is in the private sector.

It is with a considerable degree of irony that a great many public sector employees might look back over the speeches of the now Minister of Industry and Trade (Mr. F. S. Miller), who made such a point of saying, not only in this House but also in correspondence with so many workers in the public sector:

"The reason we are introducing this program is precisely so we can protect jobs in the public sector. It is better to have people fully employed in the public sector, perhaps making a little bit less than they might if there was free collective bargaining or freer arbitration, than to have them unemployed."

In other words, they would have to start firing people if they did not bring in the restraint package which they brought in last year.

I think of the Kennedy Lodge nursing home workers, the Ballycliffe Lodge nursing home workers, the Brantwood Manor nursing home workers, the workers at Toronto General Hospital and Toronto East General and Orthopaedic Hospital. Those remarks of the minister's are nothing but a sad travesty.

We have had insecurity in the public sector. We have had people with seven, eight, 10 and 12 years' seniority in the public sector being thrown out on the street by unscrupulous employers and replaced by people working for private subcontractors. We have had this side by side with the kind of restraint program that has worked such an unfairness and hardship on the workers at Sensenbrenner Hospital, the Pine Grove Nursing Home, the Pinewood Court home in northwestern Ontario and Van Daele Manor in Sault Ste. Marie.

I want to say to the Treasurer, if I could have his attention for a moment, that nothing has so ill become him and his government as the soft-shoe routine the workers at Sensenbrenner Hospital have seen from the government of Ontario in the past three weeks.

Mr. Biddell said, "The chickens have come home to roost." Those words are very true. Perhaps in a sense Mr. Biddell did not quite understand. The chickens of restraint have indeed come home to roost -- only they have come home to roost on the neck and back of the Treasurer. They have come home to roost in a way that shows, more clearly than anything we could have said in the four months that we debated this legislation last year, the very real unfairness, the brute unfairness, of Bill 179, the Inflation Restraint Act, which was introduced last year.

If the minister thinks he is going to get this legislation through the House without a full accounting with respect to the workers at Sensenbrenner and those other workers who have been forced to pay back or who are in the middle of being forced to pay back their wages to their employers, then he is sadly mistaken. That is an accounting we fully expect in committee. It is an accounting the workers in those jobs fully expect in committee.

We want to see an arrangement worked out with respect to those workers that will not mean they are going to be earning less next year as a result of having to pay back what they were forced to pay back from last year. I am sure the Treasurer knows exactly what I am saying.

It is extremely important that we recognize these workers have had nothing short of a disgraceful runaround from the government of this province. It is a runaround that has earned no credit for the Treasurer in terms of straightforward dealings with the people of this province and with those workers. They expected better.

They certainly expected more, given the statements he was so quick to make to the press on November 4, although he was not prepared to make them to the House. In fact, he was very careful. He was loath to say to the House on November 4 what he was prepared to do. It was only when he left this place that he suddenly got up the courage, if I may put it that way, or developed a program that was going to produce the salvation of the workers at Sensenbrenner Hospital.

They have now been waiting and waiting and they have heard nothing with respect to any serious program or any serious commitment from the government that would allow them to keep wages they feel they have earned, the hospital feels they have earned and the arbitrator who has set their terms and conditions of employment feels they have earned.

That is the issue that really sticks in the craw for us. That is the issue, I suggest, that is going to cause some real problems when it comes time to deal with this legislation further down the road as it goes through committee and into third reading.

9:30 p.m.

I want to look at what I believe to he the central thrust of this legislation. I guess there are two views one can take. There is the view that has been expressed by members of the Liberal Party, which is that they are supporting the legislation because they think it is, in their own words "innocuous," or as has been said by the Leader of the Opposition (Mr. Peterson), who, unless I am mistaken, has not even spoken in this debate, that it does not really signify anything, does not matter, and it deserves the support of the Liberal Party.

That party last year was only too quick to run into the arms of the government the very first day it was announced, and the leader of the Liberal Party supported it without even having read the legislation. He said there was no problem with it. It did not go far enough; that was the only problem. It was not long, hard or wide enough, but otherwise it was good legislation.

It was only after the systematic attack on the legislation that was launched by members of our party that members of the Liberal Party started looking for escape routes. They wanted to put in 196 amendments to the legislation, only they were not allowed to. That is why they voted for it on first, second and third reading: they were so strongly concerned about its constitutionality.

Just as we raised concerns about the constitutionality of the bill last year and proved to be right, despite the refusal of the Attorney General (Mr. McMurtry) to appear before the committee and give an opinion and despite the refusal of the Minister of Labour (Mr. Ramsay) to appear before the committee and give an opinion with respect to its impact on collective bargaining, we stood alone and opposed it.

I make no apology for what we did with respect to Bill 179. If one looks now at what the Treasurer has said about the confidence he has in the collective bargaining system and how they want to make it work, it really does make one laugh when one thinks of what they were prepared to do with respect to collective bargaining last year and the double-edged message we are getting from the Treasurer, which is to say: "Ladies and gentlemen, we have full confidence in the collective bargaining system -- only take one step over that line and we are going to go right back into an across-the-board control program." That is the kind of confidence that the Treasurer has in the collective bargaining system: "You make it work our way, you do as we say, or we are going to lose confidence in that system."

That is a demonstration of the danger that is contained in this legislation. It is the straitjacket of the five per cent limitation, it is section 10 -- which I want to come back to, because think it is the fundamental problem with the compensation side of this legislation -- it is the complete absence of any consumer protection legislation and any control over administered prices, the problem that was dealt with at some length by my colleague the member for Riverdale (Mr. Renwick) in his remarks on administered prices and by my good friend the member for Welland-Thorold (Mr. Swart).

The member for Welland-Thorold has been such a single-minded ombudsman on behalf of the people of this province with respect to administered prices. He almost single-handedly forced the government and the Ontario Energy Board to deal with the question of the Consumers' Gas increase. He has done a great public service to members of all parties who rely on their natural gas companies for their heat this winter and in terms of his ability to focus attention on what is happening in the price field.

I want to deal for a few minutes with the question of section 10 of the legislation, the section of the bill that says and I will read it, because I think it deserves to be read:

"Every act or regulation" -- that is fairly sweeping -- "that requires or permits an issue that arises in collective bargaining by or on behalf of employees to whom this part applies" -- and that is virtually every worker in the public sector; literally tens of thousands, hundreds of thousands of people -- "to be submitted to or determined by arbitration shall be deemed to include a provision that the arbitrator shall consider the employer's ability to pay in the light of existing provincial fiscal policy."

Some time ago I had an exchange with the Treasurer in which I suggested to him that if a farmer were confronted with a government determined to expropriate his land and the expropriation legislation provided that the arbitrator, in considering what a fair value for that land would be, the farmer would receive the market value and replacement value of the land and everything else, but in making its decision the land compensation tribunal would have to take into account the government's ability to pay.

I suggested to the Treasurer if that were the case in that legislation he would have a revolt on his hands. He would have a revolt in every one of the ridings of these Liberal members from southwestern Ontario who have been so quick and so fast falling over themselves to support the Tories in their major economic bill this year, just as they were last year.

For example, consider an assessment review court and the average home owner of this province taking a case to the assessment review court with respect to the assessment value on his house if the court dealing with the question of assessments said: "We will reassess your home in terms of what we think it is now worth, because you have urea formaldehyde or something else in it and we will reduce your taxation. But wait a minute, before we reduce your taxation, we are going to have to take into account the municipality's ability to live with that different assessment."

The public has to recognize that we cannot have it both ways in our society. The municipalities. school boards, many of the smaller municipalities, some of those hospitals and nursing home operators, the Ontario Nursing Home Association and all those powerful lobbies that have been putting such pressure on the Tories, on the Liberal Party and on us as well -- we have met with them and talked with them about this question of changing the rules of the game of arbitration -- have to understand what it is that is offensive about this notion of putting in the province's fiscal policy this so-called phrase "ability to pay." What is wrong with it? It sounds so reasonable; it sounds so plausible; it makes so much sense.

I simply want to set out, in the few minutes that I have, what it is that is wrong with that notion. First, how does the collective bargaining process work? What is arbitration? Arbitration is a process that has been established as a substitute and replacement for collective bargaining.

We have argued in our party that in almost all circumstances it would be far better to allow collective bargaining to work both in the public sector and in the private sector. It would make far more sense to say to nursing home workers, hospital workers and others: "You have the same rights with respect to collective bargaining as people do in the private sector. We have confidence" -- if I may use that phrase in its full sense -- "in your ability to negotiate and we have confidence in your willingness to negotiate in ways that are reasonable."

It is important to recognize that arbitration is not something that has been adopted or put forward or pushed by our party. Arbitration is something that has developed in the system because the Tory party and the Liberal Party of this province have not had confidence in the collective bargaining system in the public sector. They do not think it should be there.

Whether it is in opposition to the right of teachers to go on strike, which is the view from time to time of different members of the Liberal and Tory parties -- frankly, I do not know what the position of the Liberal Party is today, because I have not kept up with it on that kind of basis, but I do know that historically they have changed their mind at least 12 times on the issue -- their resistance to that kind of freedom and ability to bargain collectively has led to an arbitration system in the province which is based quite simply on the premise that an arbitrator has to substitute in a sense for the result that collective bargaining would have reached if collective bargaining had been able to work.

We spent some time arguing last year about the meaning of the term "freedom of association," and we were laughed out of court by the Tories. They said: "You guys do not know what you are talking about. We are not here to talk about rights. The Legislature can do whatever it wants when it comes to rights." The Liberal Party could not make up its mind on the issue with respect to what freedom of association means.

As to the international courts, if I may put it that way, the international covenants of which Canada is a party, the decisions of the International Labour Organization with respect to public sector bargaining and its replacement by arbitration have been clear about the meaning of arbitration, what arbitration is supposed to do and what governments can and cannot do.

I am proud that we have a Supreme Court of this province which has recognized in its three-nil decision that governments cannot simply take away rights to bargain and take away rights to arbitration and put nothing in their place. When they do that, they make a mockery of the meaning of freedom of association.

9:40 p.m.

I suggest also that governments cannot make arbitration an unacceptable alternative to collective bargaining. Governments cannot so confine and restrict arbitration that it is incapable of producing the same result, the fair result, that would be the case if collective bargaining had been allowed to occur.

I again suggest that the government is going to have some legal problems because the International Labour Organization and the covenants to which Canada is a member are very clear about this. The important feature of the Supreme Court decision which was taken with respect to Bill 179 is that the criteria and standards of international law with respect to collective bargaining and arbitration, the kinds of due process which have to he followed and the kind of latitude which have to be given to this process in order to allow it to work have been incorporated as part of the law of Ontario under the Charter of Rights and Freedoms, which is part of the law of Ontario to which this assembly is subject.

This is why the question is not an academic question; this is why it is not just a question of lawyers arguing in Geneva any longer. It is a question which affects all of us in this assembly. If I may say so, and I am coming to this point immediately, it is also a very immediate political and practical question which faces us.

What is wrong with asking arbitrators to act in the light of existing provincial fiscal policies is that it really means arbitration will no longer have the confidence of literally tens of thousands, if not hundreds of thousands of employees. It really means that those employees are being told by an arbitrator that the law is requiring the arbitrator not to decide their wages on the basis of a comparison of fairness, not to decide their wages on the basis of a comparison with what other workers, say in the nursing home sector or the hospital sector, are making, not to make a decision on the basis of what that arbitrator feels is a legitimate comparison to make in the market place but on the basis of what the government is telling the arbitrator it is willing and prepared to pay.

This basically means what is happening here is that an industrial relations decision, an industrial justice decision, is becoming a political decision, an administrative decision, and the arbitrators are becoming nothing more or less than the enforcers, the apparatchiks for a political process which has been imposed by the party in power.

When that happens, the notice of arbitration as a system in which parties have confidence is destroyed. I suggest that when that happens we are going to get statements such as we got from Mr. Walter, who is the head of the Metropolitan Toronto Police Association. We are going to get feelings from every firefighting association right across this province who are going to say:

"Wait a minute. Either we are treated according to a sense of social justice in this province, either the arbitration system is a system in which we can have a degree of confidence or it is not. If it is not a system in which we can have any confidence, then we refuse to live under that system any longer. We insist on our ability to take collective bargaining action like other workers elsewhere in the private sector."

I suggest that all those members in the Liberal Party and in the Progressive Conservative Party who have been so fast to say, "Here we are. We are defending the taxpayer and we are enforcing the taxpayer's will. We are doing what the taxpayers want us to do. We are responding to that sense of real need out there. We are responding to that sense of fiscal conservatism out there. We are going to get those arbitrators. We are going to haul them into line," think they are actually going to be accomplishing something. However, they are not accomplishing what they think they are accomplishing; they are going to he creating industrial chaos in the public sector.

Mr. Nixon: I do not think the member has been listening to our speeches very well.

Mr. Rae: I do not know. Let me say to the member for Brant-Oxford-Norfolk that I listened very carefully to his speech. I read his speech very carefully. I agree with what he said with respect to the independence of arbitrators, but he should not think for a moment that this is what the bill says. He should not think for a moment that his colleague the Leader of the Opposition is right when he asserts in this House that the phrases about ability to pay and the fiscal responsibilities and the fiscal policies of the provincial government are meaningless.

If they were meaningful, I say to the member for Brant-Oxford-Norfolk, he would not have the overwhelming consensus of arbitrators which exists and which has existed in this province for 15 years with respect to the rejection of ability to pay and with respect to a rejection that arbitrators have to be limited and bound by the overall policies that have been put forward by the provincial government.

That is why I say to the member that I read his speech carefully; I admired it; I agree with him. The only area where he and I disagree is that he thinks this is an innocuous bill which does not do anything and I think it is the beginning of the end of arbitration as it has been known as a consensual process in this province. I say that with no exaggeration.

Mr. Nixon: Okay, that is not unfair.

Mr. Rae: I say that with no exaggeration, that is our difference of opinion.

Mr. Nixon: Desperately trying to make an issue out of nothing.

Mr. Rae: He has a Leader of the Opposition who stated in his normal cavalier fashion -- let me say to the former leader of the Liberal Party and now the House leader of Liberal Party, why would they put this in if it has absolutely no meaning whatsoever?

Mr. Nixon: Window dressing for the rednecks in the back row.

Mr. Speaker: Order. I would point out to the honourable member that this is disintegrating into a debate and I would ask him to --

Mr. Foulds: It is a debate.

Mr. Speaker: Between the two members.

Mr. McClellan: I think you need a vacation.

Mr. Renwick: If you are not careful, this place will turn into a Legislative Assembly.

Mr. Speaker: Just a minute, just hear me out. You are not to address your remarks to anybody other than the chair and direct your remarks completely and totally to the bill. Thank you.

Mr. Rae: Mr. Speaker, God forbid we should have any part political discussion in this assembly. I happen to believe in partisanship and I guess that makes me --

Mr. McClellan: To say nothing of debate.

Mr. Rae: To say nothing of debate. However, be that as it may, I want to say that is the difference between us on this score and the members of the Liberal Party who have spoken.

I think it is important to recognize that the Treasurer of this province, when he was answering questions which I put very directly to him with respect to this question, said it was his view that what arbitrators had always done -- if I may summarize his remarks, and I do not think I am being unfair; if I am, I am sure the Treasurer will, in the time that has been allotted him, make it very clear how unfair I have been -- he said, "The job of an arbitrator is to basically try to reach a compromise between what the employees are demanding and what the employer can afford to pay."

That is not the way arbitrators have worked in the public sector for the last 20 years. That is not the way the system has operated and there is a very good reason why it has not operated like that. It has not operated like that because arbitrators have consistently said, "The test that has to be applied, the comparison that has to be made, is between jobs that are being done in the public sector and comparable jobs that are being done in the private sector.

"There are basic criteria of fairness that have to be satisfied and once those criteria of fairness have been drawn up and once that comparison has been made, once that comparability has been established, it really is not up to the arbitrator to say to the government or the employees, "You are worth $7.50 an hour, making a market comparison with what other workers are doing next door who are working for the private sector, but because you are working for the government of this province you are going to make only $6 an hour."

Arbitrators have rejected that test and they have rejected it for very good reasons, because they believe it is not their job to act as enforcers for the government of Ontario. They would not have any respect from employees if they simply threw up their hands and said, "You are worth $7.50. You are a nursing home worker and you are worth $8.75, but because the nursing home operator here is broke, we are going to pay you only $5 an hour."

9:50 p.m.

If I could just quote from one award by arbitrator Innis Christie in February 1981, "Interest arbitrators in the Canadian public sector have apparently universally rejected" -- now this is the argument that the Liberal Party of Ontario says is of no significance at all -- "the legitimacy of an 'ability to pay' argument."

Mr. Bradley: The enemy is over there.

Mr. Rae: We have enemies all around us. That is one of the disadvantages.

They have not allowed governments as employers to hide behind their own skirts in their role as the source of funds to escape pay increases indicated by the other criteria. This has been so even where, as in the Ontario hospital sector, the employing body and the funding body are legally and formally different. The accepted view is that to allow government underfunding to justify the payment of substandard wages is to ask public sector employees to subsidize the rest of the community."

I ask the Speaker to consider one other remark made by Kenneth Swan in his article, "The Search for Meaningful Criteria in Interest Arbitration, 1978." Mr. Swan says this:

"Fairness remains an essentially relative concept, and it therefore depends directly upon the identification of fair comparisons if it is to be meaningful; indeed, all of the generally stated pleas for fairness inevitably come around to a comparability study. It appears to me that all attempts to identify a doctrine of fairness must follow the circle and come back eventually to the doctrine of comparability, if any meaningful results are to be achieved."

If I could just quote one last time from Mr. Burkett in the award he made at the Wellesley Hospital in 1977. He is talking about the tradeoff that exists between losing the right to strike and the right to bargain and an arbitration. What he says is:

"Equity demands that those whose collective freedoms have been curtailed be compensated in line with a pattern established by those whom they serve. If the taxpaying public through the Legislature, determines that it requires an uninterrupted service, then it must be prepared to pay those who provide the service, commensurate with community standards."

I want to suggest to the Treasurer that I have no doubt the course he is following is one that is in the immediate and short-term sense politically popular. I have no doubt at all about that. I have no doubt at all that the "strategy" that is being followed by the Liberal Party -- if I could elevate what is being done to that level -- is in some sense following what they perceive to be a kind of public move.

Just as last year we fought in our party and stood up for the question of rights and we withstood this unholy alliance that took place among 102 or 103 members with respect to Bill 179 because we felt that the rights of workers were important and were not to be trampled upon, just so are we going to be saying on this bill at this time that the rights of the workers in the public sector are again being taken away, although in a different way and in a form that is apparently more benign and more innocuous, to use the words of the House leader of the Liberal Party, more subtle perhaps.

We also feel that what is being done is wrong. Its results are going to be damaging to good industrial relations. They are going to be damaging to industrial peace. They are going to be damaging to industrial harmony. They are going to be damaging to social justice and to social harmony. I do not think any of us in our party could stand in our place and support a policy just because it seemed to be politically expedient in the short term to do so, because that was the wave of a public mood at the time. The government cannot put the workers of this province into a straitjacket and call it justice. The government has done it twice in a row. It was wrong the first time and it is wrong the second time and we are going to fight the government all the way.

Mr. Van Horne: Mr. Speaker. the leader of the third party on more than one occasion in this past hour has indicated that he did not know where our party stood on this issue. It bears repeating that my leader, before this legislation was brought in or before Bill 179 was brought in or before the Legislature reconvened the second last time around, indicated very clearly what our stance was.

I do not think that when he was calling for restraint there was any question in anybody's mind as to where he or our party stood. Having said that, I will simply repeat that although we support this particular bill, we support it as we did Bill 179, with considerable concern and considerable comment for it being changed.

Mr. Foulds: I thought 179 was not big enough. was not wide enough, was not long enough, was not strong enough.

Mr. Van Horne: Mr. Speaker, I would be pleased if you would ask the member for Port Arthur to shut up.

Mr. Foulds: Oh, Mr. Speaker, I believe that is unparliamentary.

Mr. Speaker: Order, order.

Mr. Van Horne: In the few minutes that I have left, I would like to remind the members of this chamber that the present Treasurer on his inaugural day indicated he was going to do much to change the ways of the government. He was going to involve the citizens of this province, the industrial leaders, the commercial leaders and the labour leaders in debate before he came up with the new budget. He would involve them with the thinking of critical decisions.

I have to remind him and remind this chamber that in 1979 I had the opportunity to present two private members' bills. One dealt with program cost disclosure and another with fiscal planning. In both cases, the government saw fit to throw those pieces of legislation away. Both of them were turned down. Yet a few years later we have a new Treasurer saying the consultative process, the involvement process, is something this province needs.

Let me remind the chamber, too, that its chief spokesperson at that time in 1979, the member for Oriole (Mr. Williams), said as follows: "I only need direct the members to the 1977 budget presented by the then Treasurer, the Honourable Darcy McKeough. At that time it was explicitly stated, in fact it could not have been stated more clearly, that the budget was not designed to deal simply with the immediate 12-month period for which he was immediately accountable. It projected the possible revenue deals that were anticipated over a three-year period, not just a 12-month period to which he was addressing his budget," etc., etc.

Of course, the member for Oriole was trying to make the point in defence of "a balanced budget," to use his words in that same paragraph. Now, not fully four years later, here we have a government saying it must again bring some form of restraint in to one particular sector of this province of ours.

I find it passing strange, with all of the concerns we have today, matched by all of the competence of the government in the mid-1970s that it could handle the economic and fiscal problems of this province, that even today as the various members of this chamber sit through the exercise of estimates for each of the ministries of this government, very seldom do we hear about restraint in the estimates process. It is supposed to be sort of the lifeblood of the running of this province of ours. The estimates are the accounting period, if you will, for the spending and fiscal policy of each ministry of this government.

What do we hear when a minister makes his or her opening statement? We hear grand and general comments with very few specifics relating to restraint. The Treasurer should at this very moment -- and I hope he is doing it as he reviews the demands and needs of his various ministers for their budgets for next year -- spend a little bit of time asking them where they are reviewing and cutting back in programs.

Where are they cutting back in terms of building? Where are they cutting back in terms of staffing? Where are they cutting back in terms of advertising? Are they continuing to operate on a year add-on budget process, or are they operating or designing their budgets by objective? Are they using, as the member for London South (Mr. Walker) has claimed to have raised to salvation, the zero-base budget process, or are they simply going through the add-on process?

10 p.m.

I realize the minister will be speaking in a moment or two. I did not want the opportunity to pass for me personally without reminding the government of the demands that some of us attempted to put on it a few years ago, that is, to plan its fiscal affairs, to run its budgets and to run the economy of this province in a projected and intelligent way, and not in a Band-Aid way as it so obviously has done over this past few years.

Mr. Speaker: Does any other honourable member wish to participate?

Mr. Nixon: We want to hear the Treasurer.

Mr. Speaker: If not, the Treasurer.

Hon. Mr. Grossman: Thank you, Mr Speaker.

Mr. Bradley: It looks like a bald spot.

Hon. Mr. Grossman: Where? We had better keep the lights off. Does the member think so?

Mr. Conway: Statesmen get bald.

Hon. Mr. Grossman: Not this one.

Mr. Bradley: Just a wide part.

Hon. Mr. Grossman: I am showing the signs of age. I will be 40 next Friday. That is the problem. Can the members believe it?

Mr. Bradley: Already 40.

Hon. Mr. Grossman: I am going to see how the poll comes out. If it says I should still be 39, I will stick with 39 for a while.

Mr. Speaker, I wanted to make some points, having listened so carefully and intently to the debate on second reading, which I think perhaps in some cases have not been totally understood by those members participating in the debate.

I should emphasize that the bill we have before us is the product of an extensive amount of consultation. That consultation made clear a couple of things to us. First, all the parties involved had a keen sense of awareness of the difficult circumstances our economy is facing. All parties assured us they understood their responsibility and the need for a degree of restraint in the amounts of money they were demanding and the amounts of money they were heretofore willing to pay.

That gave us some encouragement to move back into full collective bargaining in this the second year of public sector wage restraint. The government felt, after looking at the situation carefully, that it would be a mistake to keep on tight controls for yet another year, a position advocated by the official opposition, for that would not only compound the number of inequities that invariably come up during a hard and tight restraint program, but also would have the demands pent up for a second year. It would also create a circumstance where people were coming out of that program into an economy which would probably be stronger and lend itself more to a catch-up mentality than perhaps this year would offer.

If we believe in the collective bargaining system, which we do, we felt we must begin to get out of the program and this was a major step to take. In so doing, we felt the only responsible thing to do was to have a five per cent transfer payment control mechanism because there are so many people in our society who still have to pay the cost of any public sector wage settlement and so many of those people are either unemployed or are getting wage increases of far less than five per cent.

In addition, the major reason for this legislation and a continuation of public sector wage restraint is the continuing need to fight inflation. We can take some solace from the fact that this month the inflation rate is down to 4.9 per cent, the lowest mark in a long period of time. None the less, the fact is that 4.9 per cent figure is likely to rise as we get into 1984 and trends will be higher through 1984. Most people are predicting that the pull, if anything, is on the upward side of that figure.

If that turns out to be true and Canada once again experiences inflation at the six, seven or eight per cent level, while the American inflation rate is substantially lower than that, then we will be talking about unemployment figures which are far higher than the current intolerable level. That would spell disaster for us.

With that in mind, we selected a figure which reflects not a minimum nor a mandated sum for public sector wage settlements; rather, it is a figure which should be used as an important guide. For those transfer payment recipients, it is a figure that should be kept in mind because it should reflect public sector wage compensation in total.

There is a lot of room for those people who have suggested in the municipalities and school boards that they could have settled last year for less than five per cent; this will be an opportunity for them to do that. Five per cent should not come to be known as an acceptable level of inflation. It is not. We must see settlements in the zero to five per cent range, and we must have inflation coming down below five per cent over the next few years or our economy will be in difficult circumstances.

I should like to talk for a moment about the arbitration circumstance. The arbitration circumstance, as I explained on introduction, is one which introduces for a one-year period two very important concepts. First, that the arbitrators and the parties to an arbitration clearly analyse, assess, understand and set out the actual cost of all parts of a settlement. That seems to be eminently reasonable.

Mr. Cassidy: Once they have begun it won't be for one year; this is the thin edge of the wedge.

Hon. Mr. Grossman: The member for Ottawa Centre (Mr. Cassidy) and members of his party think there is something wrong if arbitrators, the parties to arbitration and the public which is being asked to pay the price of those arbitrations, if all those parties know the true cost of that settlement. I cannot even begin to endorse that sort of interpretation. I sat here for a long time listening to opposition parties suggesting that openness, full knowledge and complete information provided to the public are appropriate.


Hon. Mr. Grossman: Michael, I can tell where you stand from where you sit.

Mr. Speaker: Would the Treasurer please refer to the members by their ridings and not by their names.


Hon. Mr. Grossman: That is just the point I was going to make. The New Democratic Party reminds me of that. I wish advertently to clarify the record. The NDP wishes to be on record, I presume, as supporting the change this year that requires arbitrators to cost all parts of their awards. That is a welcome addition to --

Mr. McClellan: We did not say that either.

Hon. Mr. Grossman: I see. They sound like the Liberal Party now. They can correct the record. They will have lots of chances. They do not want to do it tonight. They want to think about what they want to do first.

The member for Bellwoods (Mr. McClellan) does remind me they have not objected so far to the costing provisions we have introduced here.

Mr. McClellan: You have demonstrated your incompetence; go home.

Hon. Mr. Grossman: Hold it; I have only seven minutes left.

10:10 p.m.

On the other part of the arbitration, ability to pay seems to me to be an important concept to every wage determination issue. In this climate, when arbitrators are being brought back into the system and we are restoring the traditional wage determination mechanisms --

Mr. Rae: You are not doing that and you know it. You are doing no such thing.

Hon. Mr. Grossman: Of course we are. The members opposite are disappointed that we are. I watched their faces as I read the statement. They were all ready to bring out all the fire wagons. They were all ready to come at us with everything they had. They were setting up the couches in the hall to ring the bells. They already had the speeches written for the Massey Hall rally. They had it all together and, horror of horrors, the big cause they would have to show their friends at the Ontario Federation of Labour, whom they are losing so quickly, that they really are able to get it together and mount the barricades, the whole cause was gone.

Mr. T. P. Reid: According to certain people, there was not much there to recoup.

Hon. Mr. Grossman: You are right.

Mr. Foulds: Watch it. He's going to kneecap you.

Hon. Mr. Grossman: No. This is not the Liberal Party.

There is a clear part of the arbitration innovations we have brought in this year that --


Mr. McClellan: The Premier is interrupting the Treasurer.

Mr. Speaker: Order.

Hon. Mr. Davis: You are quite right, Mr. Speaker. I apologize. Carry on.

Hon. Mr. Grossman: Anyone on this side can interrupt the Treasurer any time.

Hon. F. S. Miller: And they do.

Hon. Mr. Grossman: And they do; that is right.

The point I wish to make about arbitration is that this is one year during which we think these kinds of innovations, particularly the ability to pay consideration --

Mr. McClellan: Especially for nursing home workers, hospital orderlies and cleaning staff. Don't pay them too much, Larry.

Hon. Mr. Grossman: No. They are arguing ability to pay. The NDP does not think ability to pay should be a factor in these things. We do, particularly this year. What this means is that for this one-year time frame the fiscal policy of Ontario should be a factor. I think that is only responsible. Might I say that the NDP has not taken account of the fact that this provision is in place for one year, in the true spirit of consultation with which we developed this legislation.

Mr. Rae: That is what you said last year.

Hon. Mr. Grossman: And we told the truth. That is exactly what happened.

We are asking labour and management to join with us in reviewing this one-year experience with ability to pay and the costing mechanism that the NDP supports. My colleague the Minister of Labour (Mr. Ramsay) will have the opportunity to see how it works, to see whether those things are appropriate, to see how it has gone this year; and labour will have a full and complete opportunity to consult with us to see what lies beyond this year. I think this is fair, moderate and flexible in this particular year. The proof of that, of course --

Mr. Foulds: You're standing on your hands on top of your tongue.

Hon. Mr. Grossman: Listen, a week before the legislation was brought in, my friend's leader, the leader of the New Democratic Party, was talking about court challenges and about how outrageous it was that we were going to bring in the bill he thought we were going to bring in. He was fighting it before he saw it. When he saw it, he was in real trouble, because he did not have that bill to fight.

As we wrap up debate on second reading, I want to say that we have come a great distance in terms of introducing fairness and flexibility into a continuation of the restraint program. The New Democratic Party -- I want to say this clearly -- is raising some proper and appropriate concerns about the arbitration process. I do not happen to agree with their analysis that ability to pay should not be taken into account, particularly during this restraint year. None the less, when the arbitration process is being looked at, studied and analysed, it is important that we have full and complete discussion over those issues.

In fairness, as we move to vote on second reading, may I say to all members of this assembly that in a moderate and responsible way, this government has continued restraint and has made sure it is a program in which every member of our society participates. We have not moved in a way that polarizes our people.


Hon. Mr. Grossman: I know the members of the New Democratic Party are disappointed that we did not polarize the public. That is what the members opposite trade on and that is what they want, but that is not what they are going to get. We do not polarize. We introduce legislation that is responsible but fair.

I have sat here for some time listening to problems and concerns raised about many people caught in the public sector wage restraint program. Now they have an opportunity within the confines of a continuation of the restraint program to solve their problems, to sort them out themselves. What could be more fair and flexible?

I invite the members of this assembly to peruse the restraint programs across the length and breadth of this country and tell us where they will find a jurisdiction that has been as fiscally responsible as this jurisdiction and where they will find a jurisdiction that has also introduced fairness, flexibility and protection for all those who were asked to participate in the restraint program such as one finds in this province.


Hon. Mr. Grossman: The members of the New Democratic Party knew they were not expecting this. Listening to their speeches, I knew they had to throw away all those old ones and think of something to say tonight.

Mr. McClellan: Your time's running out, Larry. Ten seconds to go.

Some hon. Members: Five, four, three, two, one!

Mr. Speaker: Order.

Hon. Mr. Grossman: Just as I conclude, the member for Rainy River (Mr. T. P. Reid) wants to know when he gets the criteria. The criteria, which will be published in the Ontario Gazette under subsection 4(3), are very simple. The criteria are five per cent. That is what it is, that is the way it will be published and that is what it ought to be. That is all there is.

I urge all members of this assembly to join me in supporting the fair, flexible and sensitive continuing restraint program introduced by this government.

10:29 p.m.

The House divided on Hon. Mr. Grossman's motion for second reading of Bill 111, which was agreed to on the following vote:


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

MacQuarrie, Mancini, McCague, McEwen, McGuigan, McKessock, McLean, McMurtry, Miller, F. S., Miller, G. I., Newman, Nixon, O'Neil, Piché, Pollock, Pope, Ramsay, Reid, T. P., Robinson, Rotenberg, Roy, Runciman, Ruprecht, Ruston, Scrivener, Sheppard, Shymko, Stephenson, B. M., Sterling, Stevenson, K. R., Taylor, J. A., Treleaven, Van Horne, Walker, Watson, Wells, Williams, Wiseman, Wrye, Yakabuski.


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

Ayes 80; nays 22.

Bill ordered for standing committee on social development.

Hon. Mr. Wells: Mr. Speaker, this bill having now been referred to the standing committee on social development, with the concurrence of the House I would like to revert to motions.

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

Agreed to.



Hon. Mr. Wells moved that the standing committee on social development be instructed to commence its consideration of Bill 111, An Act to provide for the Review of Prices and Compensation in the Public Sector and for an orderly Transition to the Resumption of full Collective Bargaining on Tuesday, November 29, 1983, and that the committee be authorized to meet on the afternoon of Thursday, December 1, 1983.

Motion agreed to.


Hon. Mr. Wells: Mr. Speaker, I would like to indicate the business of the House for the remainder of this week and next.

Tomorrow morning, we will consider the estimates of the Ministry of Northern Affairs.

On Monday, November 28, in the afternoon and evening, we will consider the estimates of the Treasurer.

On Tuesday, November 29, in the afternoon, we will consider legislation as follows: third reading of Bills 68, 90, 92, 106, 107 and, if it is reported, Bill 97 and any Pr bills on the order paper; then second reading and committee of the whole if required on Bills 118, 128, 95 and 96; and in the evening, Bills 93, 94 and 100.

On Wednesday, November 30, the usual three committees have permission to meet in the morning.

On Thursday, December 1, in the afternoon, private members' public business in the names of the member for Essex North (Mr. Ruston) and the member for Welland-Thorold (Mr. Swart). In the evening, we will continue any legislation still remaining on the order paper from Tuesday, followed by Bill 113.

On Friday, December 2, we will deal with the estimates of the Treasurer.

Mr. Speaker: Before proceeding, I would like to advise all members that I have been advised that the member for Armourdale (Mr. McCaffrey) has been discharged from hospital and is at home.

Mr. Martel: Mr. Speaker, can I ask for clarification? I did not hear the House leader say Bill 94, the Charities Accounting Amendment Act. Is that included in his list? I thought it was for Tuesday.

Hon. Mr. Wells: I am sorry?

Mr. Martel: Bill 94. I did not hear the minister. I think he said 96, not 94.

Hon. Mr. Wells: Perhaps I missed it. Bills 95 and 96 are in the afternoon on Tuesday, and in the evening, Bills 93, 94 and 100.

Mr. Speaker: Pursuant to standing order 28, the member for Renfrew North has given notice of his dissatisfaction with the answer to his question given by the Premier (Mr. Davis) concerning the conduct of Mr. Alan Gordon.


Mr. Conway: Mr. Speaker, I have a very serious concern and personal upset about the way in which the Premier has handled the very serious questions which we in the opposition have placed about the matters raised in the Provincial Auditors report about the administration of public funds in the Ministry of Government Services.

This afternoon in this House the Premier indicated, and I quote him directly, "I take some pride in the way this government is administered." My question to the first minister, who left this place moments ago, is how can he take pride in an administration where a parliamentary colleague of his and of ours was sacked and a deputy minister of the government of some 17 years' experience, as we heard in the public accounts committee this morning a deputy minister who has been at a senior level for almost 17 years, continues on his merry way notwithstanding the fact that the Provincial Auditor for Ontario has indicated that the deputy minister has knowingly and repeatedly spent money in an unauthorized and/or an improper way, often against the strong, known and expressed opposition of the minister responsible?

This afternoon in a scrum outside his office the first minister said, "Oh, it was really nothing more than a difference in recollection." The first minister does a great disservice to the issue and to this Legislature because it is more than that. It is much more than a confusion of recollection.

Somebody is lying to the people of Ontario. I have to believe it is not one of our esteemed parliamentary colleagues, the member for Lanark (Mr. Wiseman), who has said repeatedly today in these precincts that he stands by his story. The deputy minister involved has not only denied his former boss but in the committee this morning he also denied himself, did that deputy minister, who has the most exceptionally personalized view of responsible government I ever heard. I want that deputy minister and his boss the member for Brampton (Mr. Davis) held to account.

In fact, the issue is corruption. It is a fundamental corruption of that basic principle of responsible government. The Premier of this province must accept his responsibility for allowing a deputy minister to continue on his merry way of spending hundreds of thousands of dollars in clear violation of the rules of the Ontario Manual of Administration and of this government. It is more than just that.

A few weeks ago, Canadian Press broke a story about one of the members of the Management Board of this government, the member for London South (Mr. Walker), whose contractual arrangement with his good friends from London, Gwyn Williams and Donald Martyn are well known. The member for London South said at the time, "Despite all those comments about ideally these contracts ought to have been tendered, I did it because we all do it." That is not only the Provincial Secretary for Justice but a member of the Management Board.

It is more than that. Tonight in the Globe and Mail for tomorrow's edition, there is a story indicating that millions of dollars have been let to Camp Associates by the Ministry of Tourism and Recreation in an apparently improper fashion. The report goes on to quote the upcoming auditor's report to suggest there is much too close a relationship to Camp Associates.

Oh yes, Mr. Norm Atkins and Mr. Hugh Segal et al; much too close a relationship, says tonight's Globe and Mail on reporting the auditor's upcoming report to this assembly, between that advertising agency and the government of Ontario.

Mr. Bradley: Another scam.

Mr. Conway: Another scam, yet another indication that on top of the member for London South, on top of Allan W. Foster and Associates, we now have much more from the very people in Tourism and Recreation who were before the public accounts committee six months ago. The members will remember that. The former assistant deputy minister, the then deputy minister John Laschinger, said: "I would do it again. The auditor and the devil can take the hindmost."

I will say in conclusion this is a rot and a cancer which is spreading within the caucus of this 40-year-old government. The first minister would do well to take the concerns of this assembly far more seriously, to get on with the business of discovering who is running the ship and who is telling the truth. Let him come to this assembly with a commitment to the people of Lanark, Renfrew and Ontario to set to rest the very serious words and question raised in the auditor's report and in tonight's Globe and Mail.

Mr. Cassidy: Mr. Speaker, on a point of order: Perhaps the member for Lanark would care to reply in the absence of the minister. It is about time the member for Lanark was allowed to speak and to speak fully about the situation, because I think he has been maligned on it and we should hear him in this Legislature.

The House adjourned at 10:43 p.m.