Hansard Transcripts 1984-Oct-29 | Legislative Assembly of Ontario

Hon. Mr. Drea: Mr. Speaker, before entering into the formal statements, for a few moments this afternoon I would like to pay a farewell and final tribute to one of the outstanding servants of this Legislature. Probably in terms of personal impact upon the less fortunate in the community, he was our outstanding servant.

I refer to Dr. James Band, who was laid to rest last Friday. In his 50 years of service to this Legislature, this government and this province, he probably touched more lives, and touched them for the better, than anyone in our history. During those 50 years of service, he brought hope out of the hopelessness of the Depression when he began his career with the government of Ontario as a relief inspector in the very worst days of that Depression.

He served in the very hardest-hit communities; first in northwestern Ontario, then in northeastern Ontario; then for all of northern Ontario at a time when municipalities were threatened with bankruptcy; then in the old township of York, which was one of the hardest-hit municipalities in southern or eastern Ontario. He saw the sick and the less fortunate at first hand and saw that there was very little for them.

When he became Deputy Minister of Social Services in this province some 34 years ago, there were only two kinds of people who were entitled to provincial assistance: some kinds of mothers, because not all sole-support mothers qualified in those days, and people over 70 years of age. In between, it was a case of whether the municipality had a program or felt a person was qualified for public assistance.

He changed all that. The disability pensions in Ontario preceded the Canada pension plan and its disability features by many years. He changed the children's aid societies and organizations dependent upon charity and personal collections to mandated services funded by the taxpayers at both the municipal and the provincial level.

He was one of the fathers of day care and, indeed, probably his greatest contributions were for the very young because, through his motivation, his inspiration and his innovation, more than 10,000 infants and young children were adopted and, instead of being raised in institutions or facilities without a home, did enjoy a family life. At that time, eyebrows were raised because he began that program of finding homes for children with paid newspaper ads. That was certainly heresy in the social work area at that time.

Out of that came Today's Child, Parent Finders and so on, which in the beginning managed to adopt the conventional child who needed a family and which latterly found families and brought parents forward for the handicapped, the hard-to-place and those who never before would have had a family.

I do not know how any Legislature thanks or salutes someone who has brought homes to 10,000 people who otherwise would not have had them; nor do I know how a Legislature or the public can properly salute a distinguished public servant who by his own leadership changed the homes for the aged literally from homes of refuge or work houses into the very modem system that has enabled us to provide care for the elderly and underscored the fact that the elderly in this province do have dignity.

Perhaps the Toronto Star summed up his career best when it said he would be remembered fondly because of his personal interventions; the fact that when people had troubles in their own life or their friends or family had troubles, there was always one place to go. The good and the not-so-good came to see him and the rich and the poor came to see him and the educated and the not-so-educated came to see him.

It always fascinated me over the last 15 or so years that it was almost impossible to travel anywhere in Ontario where someone did not recall a personal intervention for the better by Dr. Jimmy Band.

Today we say farewell. The flags are at half-mast in a token of salute from a very grateful province, a province that was graced by his presence and his service and that by his memory will be reinforced in its determination to do what must be done for the less fortunate.

As everyone knows, notwithstanding the enormous contributions he made to the public in this province, he did have a private life. His private life revolved around horses and horse racing. I think it touched everyone last Friday, at just about the time he was being laid to rest in Windsor. If one looks at the videotapes of the feature race at Woodbine, there was a stately mare by the name of La Vera holding on to win, and one can see the flags over the tote board at the racetrack at half-mast. Perhaps that too was one of the very final tributes to a very great man.

2:10 p.m.

Dr. Band's daughter, granddaughter and other members of his family are in the Speaker's gallery today. On behalf of a very grateful province and a very grateful Legislature -- at all times he was our servant -- I want to express not only our condolences, because there is no question that he will be missed, but also a final salute to one of the greatest men who has ever been in this province.

Mr. Wrye: Mr. Speaker, I want to rise on behalf of the Liberal Party to join the Minister of Community and Social Services in paying tribute to Dr. James Band. We pay tribute not just to his 16 years as deputy minister of that ministry but also to a lifetime of commitment to the people of this province, particularly those who are economically disadvantaged. His commitment to people brought progress in so many areas that are today taken for granted, from day care for our young to homes for the aged for our senior citizens.

I did not have the opportunity to meet Dr. Band. In speaking to my colleagues who were here when he was the deputy minister, I was struck by the high praise for a man who was considered a first-class civil servant by all and, more important, a gentleman in the best sense of the word.

Finally, my own community of Windsor has lost a special friend. According to my colleagues, James Band always had a special affection for that community and for those in the Legislature who represented Windsor.

To his daughter and granddaughter in Toronto and to his brother and sister from the Windsor and Detroit areas, I extend the sympathies of my party on the death of Dr. Band.

Mr. Martel: Mr. Speaker, I would like to associate myself with the previous speakers. I knew Dr. Band when I was critic of the ministry many years ago, when my friend the Honourable René Brunelle was minister.

More than once we agreed to disagree and, on occasion, to agree. One of the important things about Dr. Band was that he listened. He might have disagreed with you, but he listened. He gave whatever you tried to present a fair hearing. There were occasions when we made headway. The province made headway with Dr. Band, and the people of the province have been served well by that.

I want to join those who have already spoken to offer our sincere sympathy to his family. Ontario is a better place because Dr. Band was here.

STATEMENTS BY THE MINISTRY

WINTER EMERGENCY SHELTER AND ASSISTANCE PROGRAM

Hon. Mr. Drea: Mr. Speaker, two winters ago my ministry introduced an innovative, short-term assistance program called the winter emergency shelter and assistance program. That program was developed in response to the unprecedented need for emergency assistance created by the economic recession, a recession that was by that point worldwide.

The program was operated in co-operation with churches and municipalities. Its purpose was to supplement Ontario's ongoing hostel program under which the minister shares with municipalities the cost of purchasing shelter from various service providers for people in need.

The winter emergency shelter and assistance program was designed to provide short-term assistance during the difficult winter months to disadvantaged people living primarily in large urban centres; the men and women, in other words, who had been the hardest hit by economic hard times. Based on the response we received to the first program, we introduced a second such emergency shelter and assistance program last winter.

During the summer and early fall, we received many requests from interested churches and municipalities to renew the program again. We have reviewed those requests. In doing so, it has become clear that even though the economic situation is improving, there is still a definite need for this kind of program, particularly in the wintertime. I am pleased to announce today, therefore, that we will be working with churches and municipalities across the province again this winter to provide emergency shelter and assistance to those who need it.

This year my ministry has allocated $1 million to this program. This will go towards providing funding from November to April 30, 1985, to centres across Ontario. Some of these centres are as follows: Brantford, Guelph, Kitchener-Waterloo, Metropolitan Toronto, North Bay, Ottawa-Carleton, Owen Sound, Sarnia, Sudbury and Thunder Bay.

I want to emphasize that this is in addition to the funds that will be spent on regular hostel beds across the province. Last year expenditures in this area amounted to about $25.5 million.

Mr. Speaker, may I give some details about our emergency assistance program? Basically, the idea behind the program is to support and expand the traditional caring role that churches have always played in the community. Through this program my ministry provides participating churches with funds to operate various emergency winter shelter and assistance projects. These might include emergency hostels, drop-in centres and emergency programs for food and other necessities.

In Toronto, for example -- Ontario's largest municipality and therefore, not surprisingly, the one we found to be most in need of this kind of program -- a total of 29 churches and church-affiliated organizations participated in the program last year. Projects sponsored by these churches last year included 22 direct assistance programs, five emergency shelter programs and seven meal and drop-in programs.

In terms of emergency shelters, we provided funding through the winter emergency shelter and assistance program for a total of 238 additional hospital beds for Metropolitan Toronto last winter. That included 34 beds for women, 189 beds for men and 15 beds for families. Programs funded ranged from the Salvation Army's 100-bed emergency shelter program for men, to Rendu House, a 24-bed shelter for transient single women operated by the St. Vincent de Paul Society.

I should point out that these beds are in addition to the approximately 1,700 beds provided on an ongoing basis throughout Metro through the province's year-round hostel program.

Direct assistance projects funded varied from large projects such as the Salvation Army's nine depots, to "food cupboards" such as St. Luke's Deacon's Cupboard operated by St. Luke's Anglican Church. Direct assistance offered included food vouchers, food parcels, clothing, and emergency help with utilities, transportation and medication. In some cases, the organizations also offered practical counselling and life skills training as a major component of their program.

Of the seven daytime drop-in and meal projects funded, three, including Council Fire, a program for native people operated out of All Saints Church, were able to increase and improve their meal programs. In addition, capital funding was provided to several drop-in centres such as the Friends of the Bag Ladies centre. Here the funding went towards replacing furniture and equipment, adding shower and laundry facilities and the like.

A fact I find particularly gratifying, and I am sure the Legislature will, is that in many cases volunteers from the various congregations of the participating churches played an active role in the operation of the various projects. In fact, a large part of the success of this program can be attributed directly to the support given by the members of the congregations and the commitment of the clergy involved.

Let me point out, too, Mr. Speaker, that approximately $780,000 is being made available for emergency shelter and assistance projects in Metropolitan Toronto this winter -- about a 32 per cent increase over last year's total expenditure for the program in Metro.

Final details are being worked out with local churches right now and the program will be getting under way in Metropolitan Toronto at the beginning of November.

I can also tell the members that the majority of the 29 Metro churches and church-affiliated groups that participated last year will be providing direct assistance, emergency shelter, and meal and drop-in programs similar to last year's.

In closing, let me say my ministry continues to welcome this opportunity to work in partnership with churches and municipalities to ensure that there is immediate, emergency help available during the difficult winter months for those who need it most.

2:20 p.m.

NURSING HOME INITIATIVES

Hon. Mr. Norton: Mr. Speaker, I wish to advise the members of the House about a number of new policy and program initiatives being taken with regard to nursing homes in the province.

I am announcing today the creation of the Compliance Plan Review Board to review the physical and structural shortcomings that may exist in any Ontario nursing homes and to provide me with advice regarding the current status of nursing homes in this province.

Mr. Sam Ruth, president of the Baycrest Centre Foundation and an acknowledged expert in long-term care, has agreed to be chairman of this board. Beginning this January, the board will review the status of each individual home with reference to physical compliance and conformity to structural standards as specified in the regulations of the Nursing Homes Act.

In addition, the Compliance Plan Review Board, when requested by the nursing home owner, will discuss any individual problems a home might have in achieving compliance with the standards. The review board will then make recommendations concerning how each case might best be resolved.

I want to emphasize that the Compliance Plan Review Board is directed towards ensuring that community-based nursing homes are maintained in our smaller communities. During the course of its work the review board may also consult with district health councils and other community organizations regarding any relevant matter about the state and the status of nursing homes in their area. The review board will therefore work towards developing consistent physical standards in nursing homes throughout the province.

I want to outline for the benefit of the members three other initiatives designed to improve the quality of life in Ontario nursing homes.

Nursing home residents who might have a complaint about their home now have recourse to discuss the matter with nursing home staff, their residents' council and the Ministry of Health. For some time, however, I have believed that an external advisory group could provide us with valuable assistance in reviewing complaints originated by nursing home residents, their councils or their representatives. I should point out that this concept has also been endorsed by both the Ontario Nursing Home Association and the Concerned Friends of Ontario Citizens in Care Facilities.

I am therefore announcing today the creation of the Nursing Home Residents' Complaints Committee under the chairmanship of Dr. Dorothea Crittenden. Dr. Crittenden brings extensive experience of relevance to this task, both as former Deputy Minister of Community and Social Services and as former head of the Ontario Human Rights Commission. The Ministry of Health will continue to investigate all complaints related to the legislation under which nursing homes operate. Dr. Crittenden and her committee will be dealing with complaints affecting quality-of-life issues.

To give regional representation to the committee and in order that there might be good access to nursing homes in different parts of the province, the Nursing Home Residents' Complaints Committee will be divided into subcommittees with a regional vice-chairman and two regional members. The regions are northwestern Ontario, northeastern Ontario, southwestern Ontario, eastern Ontario and central Ontario. Dr. Crittenden will chair the meetings in central Ontario. She will also meet regularly with the regional vice-chairmen to promote consistency and cooperation among the regional subcommittees.

As a second initiative affecting quality of life, the ministry will undertake a thorough review of the role of advisory physicians in nursing homes. In carrying out the review, we will work closely with the Ontario Nursing Home Association and the Ontario Medical Association to develop guidelines for the role of advisory physicians in nursing homes and to ensure that high standards of medical care are being maintained.

I expect as a result of this review that we will see greater involvement of advisory physicians in the day-to-day activities of nursing homes. I want to note that beginning in 1985-86 the ministry will provide financial assistance to nursing homes that have introduced an advisory physician service.

Finally, the Ministry of Health will provide the Ontario Association of Residents' Councils with a grant of $20,000. This money will be used to help the association expand its membership and encourage a broader representation of nursing home residents' councils in the association.

I am pleased to report to the members that as a result of government actions to promote the formation of residents' councils in Ontario, councils now exist in 98 per cent of the province's nursing homes.

I trust the members of this House will give their support to these new initiatives; they reflect the ongoing commitment of my ministry and of this government to ensuring that the best possible nursing home care is being provided in Ontario.

ORAL QUESTIONS

COMMUNITY COLLEGE LABOUR DISPUTE

Mr. Peterson: Mr. Speaker, I have a question for the Minister of Education with respect to the now 13-day-old community college strike.

At the beginning we obviously were hopeful it would not go on as long as it has. Now it is very clear that the jeopardy to thousands of students across the province is increasing on a virtually daily basis. It is also clear that the work load issue is one of the issues at stake here. There have been calls from at least one side for the minister to inject new money into the system to alleviate this work load problem to some degree.

Is the minister prepared to use her good offices to come to the two sides with some new money to put into the system to try to deal with this work load problem, end the strike and get the students back to school? Is she prepared to take that kind of leadership?

Hon. Miss Stephenson: Mr. Speaker, I would like the Leader of the Opposition to know that within only the past four years, in the college system alone, there has been an injection of $150 million in new money. It seems to me that is a considerable amount of new money that should be able to deal with most of the circumstances.

The allocations for this year are not as yet completed. We will do our very best to ensure that the kinds of increases that have been in place for the college system, which have been consistently above the rate of inflation for the past four years, will continue to apply for the system.

Mr. Peterson: The minister will be aware that the information she gives this House is most incomplete. It is unfair to present only that one-sided view. She knows that. She should not cause any more problems than she is already causing.

Mr. Speaker: Question, please.

Mr. Peterson: The minister is aware of the jeopardy to literally thousands of students in the system. For example, we were told about half an hour ago that 4,000 to 5,000 students in the system who are now receiving training allowances from the Canada Employment and Immigration Commission are in jeopardy of losing those training allowances by the end of the week if the strike is not over. What is the minister going to do to try to keep those students in the system and to keep those training allowances alive? Is she just going to break faith with them and let them go their way?

Hon. Miss Stephenson: The honourable member will recall that I did speak about this in answer to a question raised at the end of last week. In addition, I think I have probably provided the factual information in response to all his questions related to this dispute over the past two weeks.

It is my understanding that the CEIC is examining the matter of the unemployment insurance allowances, which are the training allowances he is talking about, to those students who are within the college system at the present time. It is determining the best method of dealing with that problem. We have provided the CEIC with information about the circumstances, and it is a matter that is to be pursued by the commission.

Mr. Allen: Mr. Speaker, may I ask the minister why she does not reflect on the fact that while the global grants for the system have crept ahead of inflation, enrolment in those colleges has leaped ahead year by year? Whenever we have asked her about that, she has always given us the runaround that she did not have adequate figures. Surely that is no excuse.

Mr. Speaker: Question, please.

Mr. Allen: I wonder whether the minister has received letters such as the following from teachers at the colleges:

"When I started I taught four classes five times a week. Each class contained an average of 15 students. That is a total of 60 students. Each student was assigned an average of four programming assignments and I had about four tests per semester. That meant an average of 480 tests or assignments to mark every semester, plus exams.

Today I teach five classes with whom I meet four hours a week. Each class contains an average of 30 students. This is a total of 150 students. Somehow, I still give them four programming assignments, but only three tests a semester, for a total of 1,050 tests or assignments to mark, every semester, plus exams."

May I ask the minister whether that does not suggest a major problem of work load and of quality education? Does it not require more of the minister than simply to stand up and tell us the grants to the colleges have crept ahead of inflation year by year?

2:30 p.m.

Hon. Miss Stephenson: Mr. Speaker, I would consider that an increase from $312,835,000 in 1980-81 to $463,613,000 in absolute grant increase is very significant. I do not think that is creeping. Since every single dollar of this is supplied by the taxpayers of Ontario, and it comes from no other source at all, I think it is appropriate that we look very carefully at what is being done with the money that is allocated to the college system.

I have read the figures the honourable member has related. There is no doubt there are some teachers with a fairly significantly increased work load. Does that mean the quality of their teaching is decreased? I do not think I can answer that question. I doubt that my professor friend can answer it either.

Mr. Martel: You have all the answers.

Hon. Miss Stephenson: No, I do not.

Mr. Speaker: Order.

Mr. Peterson: I will remind the minister that the taxpayers of this province pay for the advertising programs, Suncor, land banks and all the other things designed to glorify her and her friends. I think she should be a little more even-handed in her description of the problems.

Mr. Speaker: Question, please.

Mr. Peterson: On the information we received half an hour ago, the federal department is saying it is very likely to cut off those allowances by the end of the week if the strike is not resolved. We also know there are many students in courses across this province that are in jeopardy.

The minister has heretofore been secretive about her plans to make up those courses and make sure people will not fail to graduate. I give her the examples of Felice Jager, in the advanced computer programming course at Humber, who is going to lose her course. Jackie Bailey at Fanshawe, in the co-op program, is going to lose her course. We talked about nursing students at Seneca, advanced motor vehicle training at Conestoga College -- everywhere there are examples of jeopardy and every day the situation is getting more serious.

Where are the minister's secret plans so these young people's courses will not be in jeopardy? Is she prepared to try to break the logjam by putting more money into the system so we will not have this problem any more?

Hon. Miss Stephenson: It has been the role of the ministry to be in touch with all those who have a regulatory role in the results of the educational programs at the college level to request more flexibility. There is jeopardy of loss of the year, yes, but to say that they are going to lose their year is a misleading statement.

It is unfair to the students to suggest that this will happen when we have said we will do our utmost to ensure they do not lose the credits for the year and that they do not lose their academic progress in this year. It would be my very fondest hope that both sides to these negotiations would recognize the concern of the students in these negotiations and work deliberately to finding a solution for it.

Mr. Peterson: There are totally different positions on this. The minister said they would not lose their year, and now she is saying they may lose their year; she said she had secret plans and now she is not prepared to tell us her secret plans.

Hon. Miss Stephenson: I do not have secret plans.

Mr. Peterson: She told us she had them before, but now she will not share them with us.

Mr. Speaker: Order. New question, please.

CREDIT RATING

Mr. Peterson: Mr. Speaker, I have a question of the Treasurer. It goes back to his discussions with his friends in the rating agencies in Wall Street and his subsequent return here and the memo of the Premier (Mr. Davis) to the cabinet with respect to the transfers to municipalities, hospital boards and others.

It is obvious the financial rating of this province was in some jeopardy and that the Treasurer had to make certain concessions to those rating agencies in Wall Street. Did he discuss with them the possibility of reining in Ontario Hydro and cutting back its requirements? Did he discuss with them other options that he has of selling off some nonproductive assets, such as Suncor, the oil company that has cost this government more than $200 million in interest alone, after the dividends, in the past couple of years?

Did he discuss with them hiving off assets such as unproductive land and putting those moneys into constructive people programs in this province? Would he not say that is another option he has to manage the finances of this province? Did he discuss it with them? Why will he not follow that route?

Hon. Mr. Grossman: Mr. Speaker, we did not discuss any of those things because we did not give any future undertakings, nor were we asked to. We were not asked to make concessions, we are not expected to and, quite frankly, that is not the way the rating agencies work.

The honourable member must understand that the rating agencies are retrospective. They simply look at what has occurred. They do not look into the future and try to figure out what one is likely to do next year or get any assurance with regard to what one is likely to do, because they do not see that as their job vis-à-vis the province, the people they rate or the people who buy bonds based on that. All they are asked to do by the people who buy bonds is to look at the performance to date and assess that against other performance.

Having done that, as I indicated last week, the entire discussion is retrospective. They look at what has occurred, how good the recovery has been, how good the improvement in the deficit has been and then decide whether that indicates the province is still worthy of a triple-A credit rating. It is all retrospective. Having done that, they concluded we were quite worthy of a triple-A credit rating.

Mr. Peterson: It is quite obvious, if that memo is factual, and the Treasurer has never denied that was the case, that he was required to shave increases this year to the municipalities and to other agencies or possibly lose the credit rating. Presumably some assurances were made, or if those assurances were not made, at least he and the Premier had taken under advisement that they had to bring in those kinds of harsh policies on the social side to maintain the credit rating.

Mr. Speaker: Question, please.

Mr. Peterson: If that is not the case, will he go to the Minster of Education (Miss Stephenson), who is now involved in a very serious strike involving jeopardy for thousands of students in this province, and free up some moneys for her to inject into the community college system? It would probably end the strike if he were prepared to do that. Is the Treasurer prepared to undertake those kinds of discussions, assuming the money is available?

Hon. Mr. Grossman: Let us remember that in terms of the moneys available to my colleague and the post-secondary system and the community college sector, transfers went up by at least 7.5 per cent, if not more, and inflation is currently at 3.8 percent. As much as the member would like to make an argument for underfunding and allowing them to fall behind, even he would have to agree that with a transfer level up in excess of 7.5 per cent and inflation at 3.8 per cent, quite to the contrary is true; they have received almost double the rate of inflation through our transfer payment increases. With respect, the member really could not make that argument.

May I say with regard to his suggestion about that memo being factual, the memo is factual. It is a Xeroxed copy of a memo that was sent around. What he is perhaps not aware of is that almost exactly the same kind of memo goes out every year in this government. It is the way we begin our allocations process. By the way, it is the way we retain good fiscal management around here, by reminding each other that it is important not to increase debt levels too much and to maintain our programs.

Just to emphasize, while the member may find the memo distressing, I should tell him that memo, in almost exactly the way it is, in one form or another has been going out around here for many years. With respect. there has been no savaging and no cutting of social programs whatsoever during that period.

Mr. Rae: Mr. Speaker, I wonder whether the Treasurer can tell us if there is any truth in the account that appeared in the Toronto Sun on October 28, 1984, in the column of Mr. Claire Hoy, who says:

'What actually happened was that Grossman, who was in New York, learned that Standard and Poor's had decided to demote Ontario's rating because the accumulated debt, expected to reach 12.6 per cent of revenue next year, was too high.

"To make matters worse the company planned to release its ratings report the next week, likely September 5, one day before Davis and Grossman were to host a major economic conference of their own at the new Metro convention centre.

"Grossman called Davis about the fiscal emergency and the Premier dropped everything and headed immediately to New York to promise concessions in return for the triple-A credit rating."

I would like to ask the Treasurer whether those three paragraphs are true and, if they are not true, can he tell us precisely and exactly in which respects they are incorrect?

2:40 p.m.

Hon. Mr. Grossman: Mr. Speaker, while I have a copy of that article here, I have not devoted as much time to it as perhaps the honourable member is in the habit of doing. I understand his admiration for the columnist; we all share it to some degree.

I am not going to walk through each and every point, except for a couple. It is not accurate to say that we suddenly learned the credit rating was in danger. It is not accurate to say that I called the Premier and said, "Drop everything and rush down here." That is not at all what occurred.

What occurred -- and with the Speaker's forbearance I will repeat it even though I went through it last week -- was that Standard and Poor's chose this year to review each province and Canada as a whole. The proof of that is contained in this third-quarter report that came out in early September, reporting on each of the provinces.

Having chosen this year to do that report, the government of Ontario, because it cares a great deal about the credit rating and keeps in close touch with all of the credit rating agencies, decided it would be prudent to go down and remind the rating agencies of the stresses we have been through and just how our affairs are being managed. We chose to do that some time early in August. We thought that was prudent.

I should remind the honourable member that we also chose to visit Moody's in New York, which was not in the process of this kind of review, but again I thought it was prudent to keep in touch with those agencies. That is only prudent and good management.

Having heard more about the fact of a total review, I decided this was a good opportunity for the Premier to join me in repeating our assurances and our proof the government was running its affairs well. There was nothing urgent about the Premier's visit. He decided he would join me. That was preplanned before I went down there and it was at my request, no one else's request. He came down with me. We spent some time with Standard and Poor's and I spent some time with Moody's, talking about what the situation has been for several years.

I guess the final thing I should add is to read directly from the conclusions that Standard and Poor's drew. "S and P affirms its triple-A ratings on long-term debt issued or guaranteed by the province of Ontario. The ratings are based on the strength of the province's continuing economic recovery from the 1982 recession" -- a recovery which members opposite still like to deny exists -- "its low financing requirements relative to the provincial economy" --

Mr. McClellan: Does he mean the sputtering recovery. Is this a sputtering recovery?

Hon. Mr. Grossman: The member wants to call time now, does he not?

Mr. Martel: Are you in trouble again?

Mr. McClellan: He said it is sputtering. What do you mean?

Hon. Mr. Grossman: -- "and its relatively stable debt level." That is what Standard and Poor's concluded.

[Applause]

Mr. Wrye: Why is the Minister of Agriculture and Food (Mr. Timbrell) not applauding? Come on Dennis, applaud a bit.

Mr. Peterson: Mr. Speaker, let us see this for what it is.

Mr. Speaker: Question, please.

Mr. Peterson: The Treasurer was in very serious trouble and he took the Premier down to New York with him to try to save his bacon.

Mr. Speaker: Question, please.

Mr. Peterson: That is what happened. He smooth-talked them for one more year, but there is very serious worry now, as there has been in the past, about that credit rating because of the profligate spending on so many unproductive things.

Why does the Premier's memo put emphasis on cutting social programs as opposed to attacking the nonproductive spending that the government does with such gay abandon over there, such as Ontario Hydro, the advertising, the land banks, Suncor?

Why would the government not attack that fat in its budget as opposed to social problems which we all know are desperately short of money at the present time; such as the Peel Memorial Hospital, for example, as was mentioned in today's Toronto Star. There are examples across this province that every member in this House knows about. Why would the government choose to attack that side when there are so many other areas to attack?

Hon. Mr. Grossman: The record perhaps may not sustain the suggestion the honourable member makes with regard to cutting back social programs. If he will recall for a second, transfer payments to hospitals, schools, welfare agencies, municipalities, colleges and universities transfer payments, plus public debt interest, the group I have just talked about, comprises over 82 per cent of the provincial budget.

The stuff the member is talking about as the heart and soul of the problem, of course, is all contained in the other 18 per cent, as are Ontario Provincial Police requirements, assistance for the Ministry of Agriculture and Food, the Minister of Energy and the Ministry of the Environment. All of that is contained in the 18 per cent.

But if the member wants to talk about controlling tax dollars and controlling deficits, obviously any discussion that limits itself to less than 18 per cent of the provincial budget is a rather unproductive discussion. Therefore, he has to look seriously at the 82 per cent -- less the portion that is public debt interest, which is about 12 per cent -- if he is going to be faithful to the words that his critics use during my estimates -- as they did on Friday and always do, quite properly -- and that the member himself uses when he is on the campaign trail in talking about fiscal integrity, the importance of the credit rating and good financial management.

If the member does not pay attention to that 82 per cent, then he is not doing the job. With respect. he is being a little trite when he suggests that contained in that 18 per cent, together with Environment, Energy, Agriculture and Food, Industry and Trade and other ministries, is so much fat, so much of the other things like advertising, much of which he and his Tourism critics support, that he could solve any problems we have whatsoever.

In fact, prudent management requires two things: first, sustaining the credit rating through paying attention to the 82 per cent of the expenditures I have just talked about; and second, maintaining, as this government always has -- not cutting, not being lean, but maintaining and improving -- the social service structure in this province, which even the member would acknowledge remains the best in Canada.

Mr. Rae: Mr. Speaker, I have a question for the Treasurer. It follows upon this saga of who said what to whom in this committee room on Wall Street, and I think we are all entitled to know.

It is my understanding from conversations we have had with Standard and Poor's that it has a five-stage rating procedure. The first stage is that there are some meetings with the so-called issuers, which in this case means the province of Ontario. Next it presents the proposed rating to the rating committee, which either affirms or changes the rating. The third stage in this case is that the province is notified of a provisional decision. The fourth stage is that the province has the right to appeal and to present additional information. The fifth stage is that the rating committee convenes again to reach a final decision.

That is my understanding, on the basis of conversations we have had with some of the analysts at Standard and Poor's, of the process that is involved. If I am wrong or if this analyst is incorrect, perhaps the Treasurer can tell us.

At what stage in this process did he first intervene? Was it by phone from Toronto? At what stage did he decide to go down to New York? At what stage did he decide to phone the Premier and at what stage did the Premier get involved in this process?

Hon. Mr. Grossman: Mr. Speaker, I cannot tell the member what stage Standard and Poor's was at. All I can report to him is that in mid-summer my staff said to me, "Standard and Poor's is doing a review of Canada, and I think we should go down, when you have a chance, to meet with them." I said, "That sounds reasonable."

Interjections.

Hon. Mr. Grossman: When have I turned down a trip to New York? That is right.

Having decided to do that, I could be wrong but I think it was the following Wednesday at cabinet when I said to the Premier -- because I do not always have to telephone him; we sit together in cabinet -- "I am going down to New York to meet with the rating agencies. I think it might be helpful if you came, since they are doing a pretty in-depth review of Canada." He said he was busy campaigning for the future Prime Minister of Canada but was never too busy to pay attention to important matters around here. He said, "Let me know what the date is, and if I can join you I will." Indeed, it worked out that he could join me.

I can also tell the member the Premier told me it was quite possible -- and it was not worrisome to me, I might add -- that he might not be able to make it. It had none of the aura that the member is trying to suggest.

2:50 p.m.

Mr. Rae: I do not think we have had an answer from the Treasurer as to exactly what happened, and I think we are entitled to an explanation. We now have two accounts from reporters who, with respect to factual matters, are normally reliable, both of whom have stated on the record that the Premier of this province made certain commitments with respect to a reduction of the deficit, in the Treasurer's presence, at a meeting with Standard and Poor's.

Specifically, I would like to ask the Treasurer, were any commitments of any kind whatsoever with respect to the deficit, the levels of spending or the raising of revenues made either by him or by the Premier at a meeting with Standard and Poor's at any time?

Hon. Mr. Grossman: Let me be clear. We did not make commitments. What I said, not the Premier, was, "In looking back at past performances, this is what I believe you, the rating agency" -- and any responsible rating agency -- "would be concerned about." I went over a number of issues and tried to make the point that in my budget and in those of my predecessors, we had shown proper financial management to be sure we did not reach a critical problem in this province, and they agreed that we had.

In terms of what has been interpreted in the media as a commitment, all I can say to the member is that I repeated what I have said quite publicly before in prepared texts distributed to his caucus office as well as that of the official opposition; that is, I believe that the growth of public debt interest has to be stabilized and that we cannot continue to increase the amount of money we are paying in interest costs every year. Needless to say, any bond purchaser, any rating agency or indeed any taxpayer would find that very important and very reassuring.

If the member wants to take that as a commitment given to Standard and Poor's instead of a commitment which I gave to the public long before August 1994, let him feel free to do it. But I repeat, as I have read all this, the only thing that has been interpreted as a commitment is the suggestion that we have to continue to reduce the deficit. I am proud to be able to stand here with each and every one of my 70 colleagues and say that we on this side are committed to reduction of that deficit.

Mr. Peterson: In the Treasurer's conversations with the analysts at the rating agencies in New York, did they express to him any concern about the size of the spending on the social envelope in Ontario or the size of the borrowing by Ontario Hydro? What were their concerns in those areas?

Hon. Mr. Grossman: Again I wish to emphasize that this is not a case where one goes to the agencies and bargains. I fear there is a perception now growing that one goes there and bargains with someone to establish spending levels or spending patterns that will allow them to say, "Okay, you can do this for another year." That is not the way it works. With respect, I think Moody's, Dominion Bond Rating Service and Standard and Poor's would object vociferously if it were put to them that this is the way it works.

In point of fact, all that happens is that they study the past -- what you have done, where those spending patterns go, how quick your recovery has been and how you have been doing on deficit management -- and they draw their conclusions from that. They do not stand back and bargain with us, saying, "If you will do A, B and C, or cut social spending or capital spending, we will leave your rating the way it is." That is just not the way it goes.

We meet with them every June, after the budget, which we did this year in Toronto. We review the budget and all our figures, and they draw their own conclusions. I am being quite honest and open when I say that any prudent treasurer, be he the treasurer of a company or the treasurer of a government, obviously argues the best possible case. That goes without saying. I did that both in June and in August. But it is only putting the case. There is no sense of someone saying: "Give me this. Take that. Adjust here." That is not the way it goes. We run our affairs; later on the rating services assess them and draw conclusions, but there is no sense of bargaining.

Mr. Rae: We have now just been told by the Treasurer that he saw this group of worthy individuals twice in the space of roughly six or seven weeks. That is very different from the information he provided this House in the last four or five days. It is substantially different. The Treasurer is shaking his head.

Mr. Speaker: Question please.

Mr. Rae: Can the Treasurer confirm that what Standard and Poor's does is to give not simply an analysis of the past but an overall assessment of what it regards as credit-worthiness, which, as the Treasurer knows, is based on an assessment of future revenues; it is based on the recovery. The Treasurer has just said that. It is based on an assessment of future spending plans as much as it is based on the past.

Will he at least admit to this House that this overall assessment took place; that he has now admitted he met with these individuals twice; that the overall spending pattern of the province was discussed; and as a result of that discussion, he somehow convinced these worthy individuals to leave the credit rating a triple A?

Hon. Mr. Grossman: Almost everything the member said is wrong. With respect, the member may not have seen it, but I have indicated before that every year after the budget there is a review by the agencies of that budget. Moody's and Standard and Poor's were both here in June, as they are every June. We had that meeting. They indicated that everything was just fine. That was in June.

If the member wants to put the proposition that there is something mysterious afoot, just to prove he must be wrong, I put it to him that they were here in June and nothing happened between June and August. If anything, the economy improved, and our first quarterly report which came out around that time, in August, indicated our revenue picture had improved.

Nothing happened between the budget and August that would have deteriorated the situation. In June, when they were here, they said, having looked at the budget: "Everything is fine. The triple-A credit rating is fine." That was a regular June meeting. The member already knows why I chose to visit in August. In addition to the annual post-budget visit, they had done a complete review of Canada and were completing that review. Prudently, one goes down there to talk to them about it at the time.

Mr. Speaker: New question.

Mr. Rae: Mr. Speaker, I want to continue this line of questioning with the Treasurer. I want to focus now on the issue -- because I do not think he has resolved the earlier question -- of what happened and who said what to whom. I do not think that has been clearly determined; the story changes with each question.

As a result of these meetings and whatever commitments may or may not have been made, how is it that the government has now determined that the cutbacks and the restraint will be taking place on the social service side rather than with respect to the other side of the moon of government spending and raising of credit, which, of course, is the work of Ontario Hydro?

I know the Treasurer is aware of the fact there was a study done in the mid-1970s, an analysis by three individuals who stated that if Hydro was on its own -- this is in the mid-1970s -- it was agreed that Hydro's current financial position, showing a low-interest coverage, a high ratio of debt to equity, and low return on equity, would probably result in about a B or even lower credit rating.

It is only the fact that the government of Ontario is guaranteeing Ontario Hydro that has resulted in the triple-A rating. Since that time, Ontario Hydro has gone to the public markets for more than $10 billion at the same time as the government of Ontario has gone for $800 million, less than a tenth as much as Ontario Hydro.

Mr. Speaker: Question please.

Mr. Rae: Why is it that in his announcements and pronouncements thus far no statement has been made with respect to Ontario Hydro, its pattern of borrowing, the extent of its public borrowing and the fact that were it not guaranteed by the government of Ontario, Hydro itself would not have a triple-A credit rating?

3 p.m.

Hon. Mr. Grossman: The reason that memo did not refer to Hydro was because the Hydro process is quite different from the allocations process. That memo went out to begin the allocations process for 1985-86. It was a memo to ministers talking about the procedure we would follow at Treasury and Management Board and the policy and priorities board of cabinet, which is the ordinary fall exercise where we hear about the spending intentions and needs of each ministry.

Hydro, obviously, is not a ministry. It does not report to the policies and priorities board of cabinet, it does not get its funding from the consolidated revenue fund and it does not impact on the Treasurer's budget next May, where he has to fund any of the increases that are granted this fall. That is the simple reason, of course, that Hydro is not included in that memo.

Mr. Speaker: May I have the attention of the House? Would members please not carry on private conversations, particularly when somebody is trying to answer a question. Will members please return to their seats or carry on their conversations outside the House.

Mr. Rae: Mr. Speaker, it sounds as if a lot of campaigning is going on over there.

I would like to ask the Treasurer whether it is the intention of the government to deal with the question of Ontario Hydro's borrowing. Is it the intention of the government to deal with the question of the extent to which Hydro practices are threatening other government programs? It is now clear that the government is now choosing to protect Ontario Hydro at the expense of social programs and social spending.

Given the impact this is having on his decision-making process, to the extent that he is mesmerized by the triple-A rating, what does the Treasurer intend to do with respect to Hydro's debt and Hydro's borrowing practices?

Hon. Mr. Grossman: Mr. Speaker, let us make a couple of points. We do not neglect to deal with Hydro's borrowing. Almost a year ago now, I asked Hydro to reduce $200 million out of its borrowing program and it did take $200 million out of its borrowing program, thanks to the request emanating from right here.

Lest the leader of the third party think Hydro is in a critical circumstance in terms of the amount it is borrowing, we had our triple-A credit rating last year with a projected provincial deficit of $2.7 billion, as opposed to $2 billion this year. When Hydro was going to borrow $200 million more than it did, there was no problem with the rating. Subsequently, I cut $200 million off Hydro's borrowing. Hydro is, therefore, obviously borrowing at least $200 million less than it could and still retain its triple-A credit rating. That is the first point I would like to make, to have very clear and to have on the record.

Another point I would like to make about Hydro is to suggest the member looks at how it is doing at all those things he says indicate it is out of control. Its debt-equity ratio in 1984 is at its lowest level in nine years, its interest coverage is the second best in the last 10 years and its interest as a percentage of revenue is lower now than it was 10 years ago.

Those are hardly indications that Hydro is growing and that its financial circumstances are deteriorating to the degree the member would like to suggest. In point of fact, it is quite the reverse. Hydro's circumstance is improving and has improved quite dramatically over the last nine years.

Mr. Martel: Tell us why it is seeking a rate boost of 8.5 per cent. That is not the provincial guideline.

Hon. Mr. Grossman: Those are the figures. Challenge them if you wish.

Finally, let me make this point to the leader of the third party. He talks about us being mesmerized by the triple-A credit rating. What worries us, and perhaps what mesmerizes us, is the circumstance where the old federal government was paying 32 cents of every dollar it raised in interest. We are currently paying 12.6 cents of every dollar in interest and that is why we worry about the credit rating. When we lose the credit rating, the interest rate goes up and, therefore, the amount of money we pay in interest goes up. That means, quite directly, we are paying interest to banks instead of providing social programs.

Mr. Conway: Mr. Speaker, the Treasurer can be very direct in answering this question. In his discussions this year with the rating agencies, can he indicate whether those rating agencies made any reference of concern at the size of the social policy envelope in the Ontario government?

Hon. Mr. Grossman: No.

Mr. Rae: Mr. Speaker, I would like to ask the Treasurer to address himself to this phenomenon. Hydro rates are going up by 8.5 per cent. That is a symbol to the ordinary consumers of this province of what it is costing them to pay for the overbuilding and for the excess capacity that now exists as a result of government policy.

How does the Treasurer think the ordinary family feels when it sees class sizes increasing while its kids are going to school, when it sees the quality of roads going down, when it sees the Ontario government spending two cents for every federal dollar on nonprofit housing and then sees this memo last week saying everything is going to be held to three per cent right across the board in all the social service areas at the same time as Ontario Hydro is getting an 8.5 per cent increase per annum? How does the Treasurer think that feels to the ordinary family?

Does he not think this is a very clear message to the ordinary family that the government of Ontario has decided to protect those who have power, wealth and a vested interest and to stick it in the neck to those who do not have any of those things?

Hon. Mr. Grossman: Mr. Speaker, the next time the member has a chance to chat with someone whose opinion he might respect -- say, Bob White -- ask him if he thinks American Motors would be locating in Brampton if it were worried we might have brownouts somewhere down the road 10 years from today. Ask him if there would be thousands of jobs coming into Oshawa if General Motors thought it might be facing electrical problems 10 years down the road.

Let me tell the member what the ordinary consumers in this province would be saying. The ordinary consumers in this province are saying they are paying significantly less for power today than those in most other jurisdictions and that they have the best electrical energy system in the world.

Interjections.

Hon. Mr. Grossman: They would be saying that.

Just to get some balance on the horrible situation the member opposite tries to draw, let us be honest. Consumers not only have the best electrical system in the world, they not only have very competitive rates and very reliable energy, but notwithstanding the horror story the member paints, they also have the best roads, the best schools, the best education and the best public housing anywhere in the world today.

COMMERCIAL FISHING QUOTAS

Mr. McGuigan: Mr. Speaker, my question is to the Provincial Secretary for Justice. Is he aware that a decision by Mr. Justice Smith of the Supreme Court of Ontario on October 15, 1984, declared certain federal and provincial fishery regulations to be unconstitutional and of no force and effect?

Is he also aware that his colleague the Minister of Natural Resources (Mr. Pope), in his attempt to enforce these regulations by confiscating fishermen's property and lifting fishermen's licences, has acted in deliberate and contemptuous contravention of the declared law of this province?

Is the minister aware of these actions, and what is he doing to ensure that the law of the province and the determination of the Supreme Court are respected?

Hon. Mr. Walker: Mr. Speaker, in light of the involvement in this case and the decision of the court, I know the Attorney General (Mr. McMurtry) and particularly the legal department of the Ministry of Natural Resources are now looking at the question.

Mr. McGuigan: What assurances has the provincial secretary issued to fishermen so that they can continue the lawful pursuit of their work and not be threatened and intimidated by ministry officials?

Hon. Mr. Walker: I have issued no assurance. It is not my responsibility to issue an assurance. The member will have to ask that of the Attorney General, and I will convey the question to him.

3:10 p.m.

REGULATION OF REST HOMES

Mr. Cooke: Mr. Speaker, I have a question for the Minister of Health based on a statement he made in the Legislature last week referring to rest homes. The minister said, "If members of the rest home association are saying there are persons being inappropriately admitted to rest homes, then they ought to cease that practice."

I would like to refer to two statistics. We checked with two placement co-ordination offices. We could have checked with many others, but this will prove the point. Is the minister aware that in Windsor there are 24 individuals of whom the placement co-ordination office is aware who have extended care certificates but who are placed in rest homes? In Ottawa there are 46 individuals who have extended care certificates but who are placed in rest homes.

Does the minister not understand that because there are inadequate numbers of nursing home beds available, people are being inappropriately placed? Since he says rest homes do not provide medical and health care, does he not understand these people who have extended care certificates have very substantial health care needs and their needs are obviously not being met in rest homes? What is he going to do about it?

Hon. Mr. Norton: Mr. Speaker, I would be pleased to check into the specific cases the honourable member has raised. On previous occasions he has made the same allegation, which gave rise to my having an assessment done of the residents of a particular nursing home, and not done by staff of my ministry I might add. The conclusion arrived at was that his information was incorrect, that the residents were not inappropriately placed.

If he has the names or at least some means of identifying the rest homes in which these persons are resident, I will be willing to have them checked out. In some instances it is possible the assessment upon which his information is based may not be correct. It is obviously a matter of concern to me if people are being inappropriately placed. I know some are in hospitals when they might be better off in long-term care facilities. I recognize what gives rise to that problem, and we are trying to address it. With respect to rest homes, there ought not be persons there who require nursing home care.

I do wish the member would not sit like a dog in a manger with what he alleges to be information about inappropriate placement of people in rest homes, only to use it on the floor of this House but not to forward it to me for appropriate action.

Mr. Cooke: I will give this information to the minister. It is on a letterhead from the Victorian Order of Nurses which sent the information, signed by Margaret Ann Prince, placement co-ordinator.

Mr. Speaker: Question, please.

Mr. Cooke: I would like also to point out to the minister that one of the other statistics in this report from Margaret Ann Prince is that there are two people requiring chronic care who are also in rest homes in Windsor.

Does the minister not understand that as long as he refuses to regulate rest homes in Ontario, as long as rest homes remain in the private sector and bodies and individuals mean income for these rest homes, they will take anyone and everyone. Anyone who is in touch with health care in Ontario and talks to placement coordinators will tell him this. As long as they are unregulated they will take anyone they can in order to generate revenue. People are being very poorly served and their health is at risk because there is no regulation.

When is the minister going to act to get at the real root of the problem, which is province-wide regulation of rest homes in Ontario?

Hon. Mr. Norton: The honourable member has been around the mulberry bush on this one many times. He knows full well that the appropriate and competent level of government to deal with rest homes as a place of accommodation is the municipal level. Municipalities have the authority to pass appropriate bylaws to ensure standards. They have the authority through the local medical officer of health to insist on appropriate health care standards. The constant thrust coming from the member and some of his colleagues on the opposite side of the House to try to have everything in this province done out of Toronto is totally inappropriate.

I suppose the next step is to have every individual home inspected by the Ministry of Health to ensure an appropriate standard, in which case I am sure my house would immediately be in jeopardy.

Mr. Wrye: Mr. Speaker, the minister's statement that the municipality should be looking into this is absolutely nothing short of incredible. To suggest that property taxpayers have that kind of role in the health care field --

Mr. Speaker: Question, please.

Mr. Wrye: So that I can pin this down very specifically, my question to the minister is, will the minister commit his ministry to get in touch with Margaret Ann Prince, who is a placement co-ordinator, and review thoroughly on a case-by-case basis the need for nursing home care or care in a home for the aged of people who are now improperly placed in rest homes so that, for once in our lives, rather than deal in a very narrow area, we can look at the whole problem community-wide?

Will the minister make that commitment and will he commit himself to get back to the Legislature or to the members of the standing committee on social development during the Health estimates which are starting this afternoon?

Hon. Mr. Norton: Mr. Speaker, by the sound of it, the exercise the member wants me to make a commitment to undertake would take much longer than I expect the estimates to take.

I have already indicated to his colleague the member for Windsor-Riverside (Mr. Cooke) that if he would provide the information upon which he is basing his question I would be quite happy to try to explore it.

I am willing to do anything that is reasonable, but I would hasten to point out that I wish the same were true on the other side of the House. If the member were to put the appropriate kind of pressure, if he had the guts to do it, on his own community, with his own local municipality, he would not be standing on the floor of this House perpetually bellyaching over the fact that his municipality is not doing its job.

ELECTROSHOCK THERAPY

Mr. Sweeney: Mr. Speaker, I have a question of the same minister. Since we are talking of someone having intestinal fortitude -- I believe that is another expression for what he said -- let us see whether he has it or not.

Mr. Speaker: Question, please.

Mr. Sweeney: I have a copy here under the heading of the Ministry of Health for Ontario of an announcement of a study with respect to electroshock therapy. It says very clearly in this announcement that organizations are invited to make written submissions. I would remind the minister that it was his own concern, as a result of a decision made by Madame Justice Mabel van Camp, that this whole issue should be investigated and that this commission should be set up.

But the minister is well aware that there is tremendous consternation outside of this Legislature that Mr. Clark, chairman of the committee, is not permitting public hearings.

Mr. Speaker: Question, please.

Mr. Sweeney: Knowing of that consternation, can the minister advise us why he would allow such a practice to continue?

Hon. Mr. Norton: Absolutely, Mr. Speaker. In fact, I felt from the very beginning that, although the committee ought ultimately to be allowed to make that decision on its own, the last thing a problem as serious as this ought to be is a media circus but should be dealt with in a very deliberative fashion.

If the member reads carefully what Mr. Clark has said, he made it clear, based upon the written submissions -- and they need not be learned documents that are submitted; a simple letter from individuals who have a concern will suffice -- and based upon the information they receive, they may well decide that further information, further clarification or discussion is merited, and they will invite individuals or groups to come before them on that basis.

That is quite a different matter, I agree, from holding what the member presumably regards as public hearings. When one is trying to address the moral, ethical and human dimensions of this particular issue, I do not think a media circus is the appropriate way in which to do it. I think it is time we started to address some of these serious issues in our society in a deliberative fashion, not in an entertaining fashion.

Mr. Sweeney: I would most certainly concur with the minister that we do not want a circus. That is obvious.

Mr. Speaker: Question, please.

3:20 p.m.

Mr. Sweeney: But the minister will appreciate that, of all the groups of people who would want to have something to say on this, one of the most -- I use the word "one" deliberately -- significant groups would be those people who have undergone the experience themselves.

The minister will also be aware that Dr. Tyrone Turner of the psychiatric medical patients' advocates program has indicated that it is most difficult, and in some cases impossible, for these very people to make a coherent written report simply because of their experience.

Mr. Speaker: Question, please.

Mr. Sweeney: On this basis, if we do want to hear from these people and if a written report is not appropriate for many of them, would the minister not agree that there has to be some opportunity for such people to be heard orally and in some public forum? Otherwise, the whole confusion and the whole problem are simply going to continue even after this report is submitted.

Hon. Mr. Norton: If I could deal with the latter part of that question first, again the emphasis is upon public forums. If, as the honourable member has suggested might be the case, the concern arises out of the difficulty in articulating one's concerns by those who have experienced it first hand, surely the last place in which one would be able to articulate it would be in a public forum before television cameras and media people. It would seem to me that if one has difficulty in articulating concern, that would only exacerbate the situation and make it worse.

With the announcements we have had in the last while suggesting that there are a number of solicitors in the community who have volunteered to help individuals prepare submissions if they wish, with the kind of concern that has been expressed by Tyrone Turner -- I might say that statement on his part only reinforces, thank goodness, his independence from the policy of this minister, from the committee and from anything else relating to the ministry -- perhaps he would volunteer his assistance as well to help those individuals who cannot articulate their concern to do so either in writing or otherwise before the committee.

I reiterate that the structure of the committee is one that is designed to ensure there is an equitable consideration of the range of issues before the committee with respect to making sure there is representation of the encroached consumers or those persons who have had first-hand experience, that there are spokespersons there who represent their interest.

Mr. Cooke: Mr. Speaker, the minister must be aware that this whole process has been one that has been less than satisfactory. First of all, the committee was not neutral in its original composition and the minister had to be convinced to accept representation from consumers. I understand Carla McKague was finally appointed.

Mr. Speaker: Question, please.

Mr. Cooke: Does the minister not understand that if he is having a public process and individuals want to go in camera to make a presentation, surely that can be accommodated, as is done in our standing committees here in the Legislature?

Why does he not look at this as not only being a process to develop public policy but also a process for public education? Through the news media there can be public education on this very important issue. He should open up these meetings to the public so there is confidence from the individuals involved on both sides and so the public is educated. Will the minister not reconsider that position?

Hon. Mr. Norton: Mr. Speaker, I shall not. I want to make it perfectly clear once again that the committee was struck at my request for purposes of offering me well-informed and carefully deliberated advice. I have no intention of creating a body to provide me with that kind of advice and then to thrust it before television cameras so as to create entertainment and the sale of newspapers in this province. I want this to be a very serious and deliberative process, and I hope that will be the case.

The honourable member's allegation that the original structure of the committee did not take the consumer into consideration is patently false. In fact, there is representation on the original committee by persons who were recommended by the advocacy group. If the member does not happen to believe it, I can prove to him that is the case. It is true that since then one additional person has been added. I did not make that decision; I left it to the chairman's discretion.

MOTIONS

COMMITTEE BUSINESS

Hon. Mr. Wells moved that standing order 72(a) respecting notice of committee hearings be suspended for the consideration of Bill Pr27, An Act respecting the City of Nepean; Bill Pr7, An Act respecting the London Regional Art Gallery; Bill Pr30, An Act respecting the City of Belleville; and Bill Pr32, An Act respecting the City of Ottawa by the standing committee on regulations and other statutory instruments on Thursday, November 1.

Motion agreed to.

ESTIMATES

Hon. Mr. Wells moved that in the standing committee on administration of justice the time allocation for the estimates of the Ministry of Consumer and Commercial Relations be reduced to 11 hours and 28 minutes; in the standing committee on general government the estimates of the Ministry of Labour be reduced to 15 hours; in the standing committee on social development the estimates of the Ministry of Education be reduced to 14 hours; and in the standing committee on resources development the estimates of the Ministry of Energy be reduced to 12 hours and the Ministry of Transportation and Communications to 10 hours, to be taken up following completion of the estimates of the Ministry of Industry and Trade.

Motion agreed to.

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS (CONTINUED)

On vote 1001, ministry administration program; item 1, main office:

Mr. Bradley: Mr. Chairman, is the Treasurer (Mr. Grossman) going to be here for this? Is anybody aware whether the Treasurer is coming in, or is there someone other than the Treasurer here who can answer questions? Is the parliamentary assistant to the Treasurer here? I am told the Treasurer is out with the press.

The Acting Chairman (Mr. Kerrio): Yes. He is expected back.

Mr. Haggerty: Let us move adjournment until he gets back.

Mr. Bradley: Is there a provision to move the adjournment --

Mr. Kolyn: Just keep talking.

Mr. Bradley: I will proceed because I am so co-operative.

Mr. Kolyn: The Treasurer is here.

Mr. Bradley: The Treasurer is now here. I understand these things and I am quite accommodating to the Treasurer. I am not being critical of him at all. One never knows when question period will end and so on.

The House leader of the Liberal Party, who is also the finance critic for the Liberal Party, will be coming by soon to take up the debate. He has asked me to raise a few items for him with the minister.

I am going to take advantage of the opportunity to raise an item I chatted with the minister about, if not in the House certainly on a personal basis, the last time there was an opportunity during estimates before the House, either supplementary estimates or the estimates themselves. It is a matter affecting the drydocks in this province, and if I can be parochial enough to mention one, it happens to be in the provincial constituency of St. Catharines.

3:30 p.m.

The Treasurer will know that one of the reasons the Niagara Peninsula has experienced such a high rate of unemployment during the past few years is the lack of contracts in certain areas. It is my understanding, for instance, that last year the minister placed $12.5 million for drydock construction in his budget. His excuse for not proceeding at that time was the age-old excuse, which was available then, that the federal government would not move on it. The minister indicated he was not prepared to allocate provincial funds unless he could also have funds from both the federal government and the private sector.

The minister said at that time: "As my staff recalls the specifics of that item, one quarter of the amount was to be put up by the companies, and they indicated their willingness to do so. We have indicated our willingness, as evidenced by our allocation here, to come to the table as well and provide that degree of funding. The federal government to date has not been willing to make a firm commitment to those projects. When it does, our commitment will be drawn down. I am informed that the private sector has indicated its willingness to participate to the extent of 25 per cent. All we need is the federal contribution."

He went on to say, when pressed in the House on this matter in November 1983: "All parties have agreed that federal participation is necessary to make the project go. We stand ready in this circumstance to fund the amount we have indicated as being set aside and committed for that, provided the federal government comes in for its portion." He also pointed out: "But drydocks are a federal responsibility. We put those moneys up to try to lever quicker action and get those projects under way." There was mention of three shipyards and works that could be done.

What I am attempting to draw from the minister this afternoon is what commitment he now has to programs that would assist drydocks in this province. For instance, when I look across the Welland Canal as I drive down the Canal Road I see a drydock that is almost empty. There is a small federal military ship there at the present time that is receiving some servicing. But if one talks to the employees, the union members and, I guess, the management as well at the drydock, one will find that the prospects for new contracts are not very good. They would certainly look for some help from the provincial government in updating and expanding the drydocks to be able to undertake projects that might not otherwise be possible.

I believe this minister expressed some interest in the last year and said that if the federal government would get moving, he could get moving as well. I will be looking for an answer from the minister on whether he is prepared to offer more hope to the drydocks in this province which have been hit by the economic recession.

The federal government has over the years moved projects around from east coast to west coast, Quebec and Ontario, in an attempt, I guess, to balance out the employment. But we are now at the short end of the stick and in pretty desperate straits. Many of those people who are unemployed from the drydock have looked to other areas and have moved out of the community; others are waiting to see whether the provincial government is prepared to move on this item.

Mr. Chairman, I do not know whether we are going on an item-by-item basis in which the critic sits down and gets an answer or whether you want me to go through several items. I will keep going through several items; the minister indicates he would prefer that method.

Second, I would seek the minister's opinion on ad valorem taxes. He was not the Treasurer at the time the ad valorem gas tax was introduced, for instance. Obviously we have liquor and tobacco taxes that use the same principle. He was not the Treasurer when this was brought in, and I would like this minister to express his views on the fairness of the ad valorem automatic tax grab. The disadvantages that members of the House will be aware of are that it makes consumers hard pressed and adds to energy costs when we have this ad valorem tax on gasoline.

In the May 1981 budget, after the election, the government introduced a new method of taxation for gasoline. The tax rates were changed from a fixed volume or per litre basis to an ad valorem percentage basis, to be established at 20 per cent of the retail price and adjusted four times a year. In February 1981, the tax on a litre of regular gasoline was 4.2 per cent per litre or 19 cents per gallon. Of course, that was before the election that took place on March 19, 1981. The May budget increased it to 5.4 per cent per litre or 24 cents per gallon.

Thus, as we all recognize, as the price of gasoline increases, so does the amount taken by the Ontario Treasury. It imposes a built-in increase that will take effect automatically with every rise in price, four times a year. Because the ad valorem tax is the last tax to be imposed, it taxes other taxes, including federal excise and sales taxes.

By this action, the government has allowed inflation to move forward. We are happy to see inflation coming down, but the government is not contributing to that by allowing for this escalating tax. Every time the price of gasoline goes up, the growth in the amount of revenue taken by the Ontario government through its ad valorem tax is compounded. Indeed, Ontario takes more tax at the pump than Alberta receives at present using that method.

As recently as July 1, 1984, the government raised the tax at the pumps to eight cents per litre or 36 cents per gallon. Provincial gasoline taxes have jumped by 100 per cent in the past three and a half years. To make matters worse, the tax increase is often based on inflated figures when the gasoline price falls because of price wars.

This unwarranted tax grab will give the government a windfall profit of $976 million next year, up by some $44 million from last year, and I presume when we are talking about this year we might be able to expect that.

There is another thing the minister should be concerned about. As a person who probably has a belief in the legislative process here and a strong belief in the checks that take place through budgetary increases that come through revenue bills, the minister must share the feeling of those of us on this side of the House that a hidden tax is not a good tax. A tax that automatically takes place and does not have to be justified to the Legislative Assembly is not a democratic tax.

Certainly the provision is there, and he has the power to do it -- no one denies that -- but it would be far better, if he needs further taxes, to come to the House to attempt to justify them by explaining where expenditures are increasing or the reason he happens to need those revenues. Of course, he can sneak this by the people of Ontario because it is an automatic tax, and it may be considered to be politically smart or shrewd to do so, but I wonder whether it contributes very much to the democratic system in the province.

When the minister has the opportunity to do so, I would like him to comment on his view of the ad valorem gas tax. To be fair to him, he was not Treasurer at the time that was introduced. I recognize he was a member of the cabinet and, therefore, had to support a cabinet decision, but, as a person with a clean slate when he came in as Treasurer, I wonder whether he has any plans to go back to a more discernible tax, a more visible tax and one that can be called to account in the Legislative Assembly as often as possible. That is another area I would like the minister to look at.

3:40 p.m.

Another area is sales tax exemptions. Once again, the Treasurer was not the person in charge of the finances of Ontario when some of the sales tax exemptions were brought forward. Given the battle that some of us fought against his predecessor's 1982 budget, we felt we should press this Treasurer to restore some of the former exemptions, and I would like to know whether he has any plans to do so.

The tax on feminine hygiene products is an obvious example. Our views on this are well known. We have expressed them in the House and outside it. The exemption level for shoes is another. All of us have noticed when we have talked to family people around the province that one of the things they talk about is the exemption on shoes. That was a good exemption, but $30 is simply not good enough any more. The current $30 ceiling for tax-free status was set in 1974 and has never been altered.

Many people in the Canadian industry are worried because they cannot compete with the low-cost shoe market. If the ceiling were adjusted for inflation, it would stand at about $70 today. That exemption of up to $30 was a good one. At that time it was probably appropriate, considering the price of shoes in 1974, but we are talking about 10 years later and we are talking about a particularly inflationary period of time. I suggest to the Treasurer that he make known to this House his desire to see that raised substantially, I hope to $70, which would make it equal in value to what it was in 1974.

There was considerable discussion, particularly during the federal campaign, and the three parties seemed to agree to some degree that there was a need for some kind of minimum tax. People in this province or this country -- let us look at the provincial tax, for instance -- should not be entirely exempt from taxes, manoeuvring the system by legitimately using the tax breaks available to people in this province.

The member for Rainy River (Mr. T. P. Reid) raised the issue of a minimum income tax last spring some time before it became a high-profile item during the federal campaign. If my memory is correct, and Hansard bears this out, the current Treasurer basically supported the idea and urged us to speak to our friends, relatives and colleagues in the federal government. Since his Tory friends are now in power, it is probably worth asking the Treasurer how avidly he is pursuing this reform.

As a person who will be announcing later this week that he is pursuing the leadership of the Progressive Conservative Party of Ontario, and ultimately the premiership until at least the next election, I would be interested to know just how vigorously the Treasurer is pursuing the matter of a basic income tax with the federal Minister of Finance, that is, the idea that everybody in this country should pay some tax. The three political leaders agreed with that, in varying degrees, in the last campaign. This Treasurer sounded as if he was in favour of it. I want to know how vigorously he is pursuing it.

There are also the federal taxes that go up and increase the provincial take. Both the House leader of the Liberal Party and the leader of the New Democratic Party raised the issue of the automatic revenue increase Ontario received as a result of the one per cent increase in the federal wholesale tax.

The leader of the NDP cited a figure of around $50 million as the gain for Ontario resulting from the federal government increasing the federal sales tax rate on manufactured goods from nine to 10 per cent, on tobacco and alcohol from 12 to 13 per cent and on building materials from five to six per cent, effective October 1. This estimate, with which the minister may or may not agree, was provided by the leader of the third party. The best estimate of the cost of the federal increase is about $1 billion, of which about $400 million would be collected in Ontario, that is, the federal tax collected by the federal government in our province.

The Ontario seven per cent sales tax on this tax would net about $28 million from this amount. Given that other higher sales tax rates apply for some products, such as alcohol and tobacco, and the inexactitude of the federal estimate -- it says $30 million or $35 million is probably the best estimate of the provincial windfall over the next year as a result of the federal action -- and since the increased federal rate is scheduled to remain in effect until December 1988, Ontario's total windfall over four and one third years will undoubtedly exceed $150 million and will likely reach $225 million when inflation and growth in sales are considered. What I am pointing out to the Treasurer is how he gains revenue by having the federal government apply taxes and he slaps taxes on top of them.

I see the Minister of Consumer and Commercial Relations (Mr. Elgie) coming into the House. He must be interested in this because during his estimates he will face questioning from members of the opposition on the prices of some of the products that come under his jurisdiction through the Liquor Control Board of Ontario. He knows that his government benefits considerably when taxes at the provincial level are slapped on top of taxes at the federal level.

If neither of these ministers has the clout with the federal friends he now has in Ottawa to ask them to rescind this tax, which in opposition they said was almost a sinful tax, I ask what action the provincial Treasurer in consultation with the Minister of Consumer and Commercial Relations is prepared to take to alleviate this problem.

Another area that has probably been pursued by my colleague the member for Brant-Oxford-Norfolk (Mr. Nixon), the critic for the Liberal Party in the field of the Ministry of Treasury and Economics, is that of unemployment and the allocation of funds in the Treasury estimates for solving unemployment problems.

I represent part of a region of Ontario that experienced an unemployment rate last winter of some 22 per cent at one point. That was certainly not very pleasing to the people of our area.

I now hear the minister talking about having to cut back to keep the deficit down. We understand the deficit cannot go completely out of control. However, I look at some expenditures that even the Minister of Consumer and Commercial Relations, who is on the left wing of the party, would probably not agree with or probably was not told about. I think of Suncor. One of my favourites is the $650 million spent on Suncor.

Hon. Mr. Elgie: Is that not the one Jimmy Coutts likes?

Mr. Bradley: Jimmy Coutts is certainly a federal person --

Mr. Eakins: It is the one Frank Miller did not like.

Mr. Bradley: Those who think that was such a wise expenditure probably should all end up in the same place. The voters of Spadina obviously disagreed with Mr. Coutts on that issue.

Mr. Rotenberg: It was not the issue that beat him.

Mr. Bradley: Supporting the Ontario government on Suncor probably in itself defeated him.

Mr. Rotenberg: You were never in Spadina if you think that.

Mr. Bradley: I know the member for Wilson Heights (Mr. Rotenberg) agrees with me on that.

Mr. Rotenberg: Not at all. That was not even an issue in Spadina.

Mr. Bradley: Being a strong right-winger, he would not have agreed with that expenditure. He is a person who believes in fiscal responsibility. He established his reputation in the municipal field.

I look at the allocation of funds to municipalities that the minister will make in the Treasury estimates. Going back to the combination of the unemployment problem and the municipalities' problem, what really concerned me was when I looked at the transfer payments.

The minister says: 'We have transferred enough money. They have to cut back. They have to live within these budgets." That is all well and good, except they often have to carry out mandated programs. In the case of boards of education that is the case, and it is also the case in situations facing municipalities at the regional or local levels.

Particularly when we faced high unemployment in specific areas of the province last year, what happened was that those people had to pay their property taxes. If someone makes less money because of unemployment or other reasons, he pays less income tax. He probably does not spend as much money so he pays less in sales taxes. However, the one tax he has to continue to pay is the municipal property tax, regardless of what his financial circumstances are.

When the city or municipality or whatever sends a bill to a person, unemployed or not, that person is obligated to pay the bill. If it happens to be $1,500 in taxes for one year, that bill shows up. In our area, it would pay for regional government, local government, and at least a portion for education.

3:50 p.m.

A person is obligated to pay that, yet that person's income is down substantially. That is why it is important for the minister to work both on the problem of unemployment and on making sure municipalities have sufficient provincial funds to carry out their obligations.

The member for Brant-Oxford-Norfolk has arrived and wishes to carry on with many of these issues.

Mr. Nixon: Not for a long time yet.

Mr. Bradley: He is out of breath. I am told that happens when one gets over the age of 40.

Mr. Nixon: Those steps are very steep.

Mr. Bradley: The steps get longer each time.

I would ask the minister to deal with some of those items I have brought to his attention. I am parochially interested in the drydock situation and am interested in the other ones as a province-wide politician.

I will resume my seat now. The minister can reply and then no doubt others will want to intervene.

Hon. Mr. Grossman: Mr. Chairman, I might just try to assist my friend with some of those items.

With regard to the federal tax changes and what the member describes as a "windfall," might I say I would not call them "windfalls." Sometimes changes can work against the province. In such cases, he would not be calling them windfalls. I do not know what the reverse of a windfall is offhand, but I would not be too happy with that. What would one call that?

Mr. Bradley: A vacuum.

Hon. Mr. Grossman: Maybe. On balance, what we all have to remember is that the taxpayers end up paying it one way or another. The honourable member mentioned a figure of $150 million -- I do not know whether that is right -- over five or 10 years. The fact is, while in the first year the member is right, the Treasurer does not have to come here and report or get approval for a tax increase, the taxpayers at least can assess what the Treasurer has done with the added tax revenues they have paid. They can assess whether the Treasurer has gone for more money or applied it against the deficit or whatever.

It is not really a windfall to anyone. In a sense, the only windfall is it makes it a little easier politically when the Treasurer does not have to come here and get permission for another tax increase.

On the other hand, what the members have seen from our financial statements in the past is that much if not all of those increases in revenue has gone to reduce the deficit. It seems to me that indicates the taxpayers are benefiting very directly. It is not as though the government is getting additional revenues which it is spending on things that were not otherwise needed. That indeed would be unfair to the taxpayers.

As for basic income tax, I think it is more accurately referred to as minimum income tax. I wrote to the former federal Minister of Finance on June 7, 1983. I do not want to take more than an appropriate share of the credit on this one occasion, but I think that letter may have touched off the round of discussions that is now occurring at the official level among the various governments in Canada on the question of minimum tax. We are well on the record.

Mr. Bradley: The minister is pursuing it vigorously with the new minister?

Hon. Mr. Grossman: I am pursuing it as vigorously with the new minister as with the old minister, obviously with more hope of success now.

The member asked about the ad valorem question. Because the most recent ad valorem tax was put on gasoline, it tends to get singled out as a special ad valorem new departure in terms of tax policy. I would argue that many if not most taxes are of an ad valorem nature. The retail sales tax is quite simply the same as the ad valorem tax on gasoline. Every time an item increases in price, be it an automobile or a shoe horn, the amount of dollars produced for the government, for the taxpayers as it were, out of the same tax that I have not come back to this House to get approval for, increases fairly significantly, but it is the same tax rate.

I do not hear anyone suggesting that every time any of the thousands of items subject to retail sales tax goes up in price, we should come back to this House or, in the alternative, keep the value of the seven per cent tax on a $13,000 automobile at the same level, even though the price of the automobile goes up.

The principle would be quite unusual if we said that every time the same tax produces more revenues we should be back in the House. After all, the ad valorem tax on gasoline operates exactly the same as the retail sales tax. One could extrapolate that argument, with some qualifications, to income tax, where the more one makes, the more one pays. It is even an exaggerated ad valorem tax.

Mr. Bradley: That is not entirely true with income tax.

Hon. Mr. Grossman: It is.

Mr. Grande: In Ontario the less one makes, the more one pays.

Hon. Mr. Grossman: Yes, I know all about it. The member is wrong.

The member for St. Catharines (Mr. Bradley) has raised the question of the dry docks with me previously. In the period of time since he last raised it, we have been continuing discussions with the government in Ottawa to try to arrive at a way to accommodate upgrading of our Ontario shipyards which do, as the member has indicated, need that upgrading.

It is a very large and expensive proposition and one I know the member has agreed with me earlier does properly call for and require federal assistance. While we are continuing those discussions, and we are pursuing them quite vigorously, as the member would say, we have had a situation arise in Collingwood. With the assistance of the member for Dufferin-Simcoe (Mr. McCague), we have agreed to provide $1.5 million assistance to the shipyards there for construction of a state-of-the-art freighter. Discussions of a similar nature are being held with the Port Weller drydocks which want to undertake something along the same lines.

I consider that assistance extremely important in both circumstances, but if I were asked whether that should be the purported solution to the problems our drydocks are facing, my answer would be no. I wanted to raise that, however, because it does indicate our continuing commitment. We are not simply saying to the shipyards or drydocks, "Nothing is going to happen until the federal government comes up with some assistance." We are doing what we can to help while we continue negotiations.

Finally, I should say we will have drydocks on our agenda as one of a number of items we wish to take up with the new government, commencing with the fall round of discussions with the federal government on economic matters.

Ms. Bryden: Mr. Chairman, unfortunately our critic the member for Port Arthur (Mr. Foulds) is in Port Arthur today on important constituency business, but other members of our party have a number of questions we would like to continue with and to place before the Treasurer.

I am particularly interested in asking him some questions relating to women. I hope, since the Treasurer has now declared he is a leadership candidate, he will be struck by the same bolt of lightning that struck the leadership candidates in both the Conservative and Liberal parties. It made them discover that women's issues are very important and that they should pay some attention to them, particularly in their campaigns for the leadership and later in their campaigns for the votes of the electors in the federal election.

4 p.m.

I am expecting the Treasurer to be all ears when I raise some women's issues to find out his position on them.

Mr. Grande: The Treasurer should pay attention.

Ms. Bryden: I am not sure whether he is listening. He has not been struck by the bolt of lightning yet.

I would like to raise the question of the record of his own ministry in the matter of women's issues. If one studies the latest report of the women crown employees office, one will find his ministry is not a shining example of progress in closing the wage gap for women in particular.

Unfortunately, the latest report we have from the women crown employees office is for 1982-83. That came out about a year ago. At that time, when questions were asked about the next one, it was promised that the one for 1983-84, for the year ending March 31, 1984, could be expected about mid-fall. We have not yet seen that one either, so I am still basing my comments on the 1982-83 report. I would hope there has been some considerable improvement since that date.

Let me draw to the minister's attention a few of the figures on page 140 of the 1982-83 report regarding his ministry.

First of all, it shows that the average salary for women in the ministry is $24,805. The average salary for men is $35,718. That means women make 69.4 per cent of what men make in the ministry. In the Ontario public service generally, the Minister responsible for Women's Issues (Mr. Welch) keeps pointing out to us and boasting that, overall, women in the Ontario public service are now making 75.8 per cent, almost 76 per cent, of what men make. The wage gap is only a mere 24 per cent.

That is progress over the previous year by two percentage points, but the wage gap in the Treasury is 31 per cent. That is something the minister is going to have to account for when he is travelling the province on his campaign for the leadership.

Also, I noticed that the number of what one calls ACD initiatives, or accelerated career development initiatives, used by the ministry in the fiscal year 1982-83 was nil. The government boasted about setting up this incentive fund to help women move into jobs above the ones they were holding. The fund was to pay the extra salary for a period so the ministry would not necessarily have to put up the extra money and there would be bridging for six months to a year while a woman moved into the higher ranking job and somebody replaced her in the job she had been holding. Apparently, none of that incentive fund has been used by the Treasury.

The report does say there were other ACD initiatives taken up by 10 women. That may have contributed to a slight improvement in the number of women represented in the higher ranking administrative module. There are still only 37.5 per cent of women in the administrative module and very few in the professional and technical modules, particularly the technical. Actually, the percentage is nil in this report in the technical module. I am not quite sure what technical jobs the ministry has. Are the accounts-computer operations in that module?

The other item that strikes me is the report boasts that the ministry has set up an affirmative action newsletter to let women in the ministry know about affirmative action. The government has had an affirmative action program which it boasts about on its books for over 10 years. If it just setting up a newsletter to let women know about it now, one wonders why it was keeping it a secret. It probably was very inactive.

The report also draws attention to the fact that the ministry published a brochure, entitled Accelerated Career Development and Affirmative Action MBR Planning, a rather ponderous title. This brochure, it says, was prepared to assist managers in developing action plans that address affirmative action goals and objectives.

One wonders what the managers have been doing up to now and whether the brochure is just coming out now to tell them what kind of plans they should be developing. It seems to me that, like other ministries, this ministry is great on commissioning and publishing booklets, but very little is happening in the action field.

The women crown employees office report also says it has set up a public relations task force within the women crown employees office drawn from various ministries, including the Treasury, which I believe furnished the chairperson of the task force. That task force's job was to do public relations on affirmative action programs within the Ontario public service. Again, public relations seems to be the strong point of the ministry, but there is very little action.

In talking about public relations, I draw to the Treasurer's attention the fact that in 1983 we spent $27 million on advertising. That was the highest figure ever. It was 933 per cent above the figure 10 years ago. Where is the restraint in the minister's advertising program? We have been sixth among the top advertisers in Canada for the last four or five years, so we are certainly among the big spenders here. Yet the Treasurer keeps saying there is no money in the pot for community colleges to expand their staff.

It is true that the grants to community colleges have gone up more than the cost of living, but so has the enrolment. It has gone up tremendously, mainly because young people just cannot find jobs. They are all deciding that further education is a possible answer, a possible route to a job, and so they are flooding into the community colleges.

Classes are being doubled and the teachers are being overloaded when classes double. But the Treasurer and the Ministry of Education have no money to give the community colleges to add to staff and overcome this overload.

I have heard stories from many community college teachers that the overload is very real in very many areas. It may not be so in every area, but particularly in the popular areas, such as business administration, computers and math, the overload is real and teachers are being stretched beyond their capacity to handle it. They are suffering from stress and illnesses and they are really being asked to work very close to what might be called speedup or slave labour.

4:10 p.m.

The Treasurer does not have money to overcome that overload. He does not have money for more day care spaces, particularly day care spaces with subsidies. We all know that women cannot go out to work unless there is adequate day care, and so they end up on welfare. That also costs the Treasurer money, but he does not seem to see the connection between providing adequate day care and keeping women off welfare.

He is not able to find more money for chronic nursing home beds to overcome the great shortage of space in acute bed hospitals. Some elective surgery is being held up and people's lives are at risk in those hospitals because there is not enough space for people to get in. It seems to me that the $27 million on advertising would create quite a bit for some of these things I have suggested.

Getting back to women, who are affected equally with men on these community college problems and more affected on day care problems, I would also like to ask the Treasurer when he is going to improve pension plans for women. Only about 30 per cent of women are covered by private pension plans and they are covered at very low rates because in many eases their pensions are based on their wages and they are in very low-paid occupations. As a result, many women come out of the work force on retirement with very inadequate incomes.

The Treasurer has been promising great improvements in the private pension sector and trying to ride through on that. I guess he hoped the election would intervene before he had to do anything about it. When are we to see this promised legislation, which will increase vesting and which will increase the obligations of private pension operators, so that we do not have situations such as the CCM situation where they just do not pay their share of contributions into the plan and when employees discover after the firm goes bankrupt there is no money in the pot, the government can do nothing because it did not check up on them earlier? When are we getting that promised pension legislation?

The minister did refer in his leadoff speech to the areas in which he hoped to bring in legislation, in which he has been promising to bring in legislation. He mentioned we had now reached a broad consensus on major private pension issues, including vesting, membership criteria, survivor benefits and minimum employer contributions. We have had so many reports, white papers and green papers on pensions from both the federal and provincial governments that there is no lack of assessment of the need and no lack of proposals for reforming the system. There just seems to be a lack of will across the floor there.

While the Treasurer may point to the small movement he made on the guaranteed annual income supplement, fitting it in with the increased federal pensions, which were part of the pre-election buildup, he has only supplemented the federal increase. He has done it in two bites, so that pensioners are having to wait until December to get the full amount of the additional help he was promising.

I guess he hoped the election would be called before he had to ante up with any further help in the public pension sector. Single persons particularly have been very badly treated by the Treasurer over the past many years and have been getting much less than 60 per cent of what a married couple gets. It is high time we saw some action. When is he going to move farther in the field of public pensions in order to make them adequate, particularly for single pensioners and particularly for the large numbers of women who are living below the poverty level? At least two thirds of single women over 65 are living below the poverty level.

The third area where I hope the Treasurer will show us some plans for action is in response to the technological revolution and its impact on jobs. Has he studied the impact of technological change on his own ministry? Has he really looked into how many jobs may disappear? If he has, has he discussed this with the civil service union so that it is alerted? Is he planning both retraining and readjustment programs for the employees of his department and of the Ontario public service generally who may be displaced by technological change?

As the Treasurer well knows, the New Democratic Party had a task force last year which produced a 20-page report with 42 recommendations on how adjustments to technological change could be made so that those who are displaced are not the victims of technological change, but will share in the benefits of any increased efficiency that comes from technological change.

So far, practically none of the recommendations of that task force has been implemented, including provisions for shorter working hours so that we take some benefit from increased efficiency and pass it on to the employees. That task force called for full involvement of the employees in planning for technological change. It also suggested that the government and the Treasurer might look at early retirement --

Hon. Mr. Grossman: No, I am not. Thanks anyway; but I am not looking at early retirement.

Ms. Bryden: -- for those employees who wish to take it. The Treasurer may have to do it. There are people who would be quite interested in retiring early and opening up jobs for young people coming up if the Treasurer would see that those people had adequate pensions with bridging conditions in their pensions.

My leader has suggested a pension adjustment fund that could be made up of contributions from employers which could go to help employees who opt to retire early, say, at 55, until their pensions come in at 65. I am sure Inco would grab the idea because it has been offering early retirement to many employees and has been finding that employees are accepting it. They are doing this to open up jobs for younger people in Sudbury.

The Treasurer says he is not planning anything about early retirement.

Hon. Mr. Grossman: I am not planning anything personally -- no early retirement.

Ms. Bryden: I see. It is just the Treasurer himself. I am talking about making early retirement legislation generally an option.

Hon. Mr. Grossman: As always, I want it for others but not for myself.

Ms. Bryden: It may be that the voters at the leadership convention will give the minister an early retirement.

Hon. Mr. Grossman: It could be.

Ms. Bryden: I understand a task force on the impact of technological change has been appointed by the government. Unless I have missed the tabling of it, I do not think it has reported to the Legislature or brought out any recommendations yet. Has the minister himself been involved in looking at its report? Can he tell us how it might affect what the impact is going to be on his own ministry? It seems to me he should be looking into that problem and making definite plans to readjust the working conditions and training of people who will be affected.

4:20 p.m.

Those are three areas I would like the Treasurer to comment on and indicate what kinds of action we can expect. The fourth area, and this is my final one, is the question of the wage gap resulting from the failure of equal pay for work of equal value in this province. Professor Gunderson recently estimated that women were underpaid by from $1 billion to $3 billion as a result of the lack of equal pay for work of equal value laws. In looking at this figure, the Minister of Labour (Mr. Ramsay) said we could not afford to bring in equal pay for work of equal value because the price was too high.

Of course, somebody is paying that price. The women of Ontario have been paying similar sums for years to subsidize employers, in effect. It seems to me the cost of discrimination should not be put on the backs of those who are discriminated against but should be put on to the general economy to overcome that discrimination.

I ask the Treasurer, since we are in a state of recession and the outlook for the winter is not very good, is he looking for means of stimulating the economy? If he is, why does he not consider a staged program to bring women up to equality in wages? That will create a great deal of purchasing power in Ontario. Those women who are underpaid will go out and spend that money immediately on raising their standard of living, their standard of housing, their educational qualifications and many things of that sort. He would find there would be a great boom resulting from putting that $1 billion to $3 billion back into the economy. It is one of the best ways he could spend money on job creation.

I ask him why he has rejected this proposal. Is it not a better way to stimulate jobs than to create all these little make-work jobs that look good on paper but do not really produce very much?

I particularly refer to the ministry's new book called The Job Book, which came out from Ontario youth opportunities. It contains a list of several thousand jobs available to young people. The only catch is that they are only jobs that last for five and a half months. I would ask the minister to look at that book, too.

Hon. Mr. Grossman: Mr. Chairman, I must say right from the outset that a number of those issues, which are very important issues, are unfortunately not really issues involving the Ministry of Treasury and Economics. For example, training and retraining, readjustment and other questions with regard to the Ontario public service most properly lie with the Civil Service Commission and the Chairman of the Management Board (Mr. McCague), who reports for the Civil Service Commission.

Having said that, I think the honourable member will find in our budget and other initiatives a number of programs of which women inside and outside the public service can take advantage and which are specifically pointed towards the training and readjustment issues the member talks about.

I was most pleased to hear the member discuss the task force on employment and new technology. That is being done under the auspices of the Ontario Manpower Commission. It was funded by the Board of Industrial Leadership and Development, which I chair. We are looking forward to receiving the task force report.

Ms. Bryden: When is it due?

Hon. Mr. Grossman: In June 1985

Ms. Bryden: Is that before or after the election?

Hon. Mr. Grossman: The member for Beaches-Woodbine will have to wait and see. Frankly, I hope it is before, because I would like her to be here to discuss it.

Mr. Grande: The Treasurer is so cynical.

Hon. Mr. Grossman: My friend is too.

I can reflect back to 1979 and 1980 when -- I have caught the member's disease; my voice is fading as was my friend's -- under my auspices, the Ministry of Industry and Tourism had a microelectronics task force which not too many people understood or paid much attention to at the time. Its report was the first of its kind prior to the great change that came upon us through the 1980s. I acknowledge that it dealt with the kind of issues that are much better developed today than they were at that time, given what everyone has learned since then. I wanted to mention that because it shows we were not unaware of these issues. We were working on them, doing reports long before the problems and job dislocations were so apparent. We were working on the issue as the technology was being introduced.

When one looks at some of the statistics coming out of the recession and the recovery, one will find that through a variety of measures -- changes in attitude, training programs; all of those things -- we are having some success. As always, the technology comes in more quickly than we can quite anticipate, but in our ability to cope with those things we are not doing all that badly.

This year, through the budget, we have put in place our technical upgrading program. Members will be aware of that program and the fact that almost all the persons taking advantage of it are women. It is the kind of program the member talked about in her remarks. It has proven to be a very successful program. Likewise, the training in business and industry programs, TIBI I, II and III, have provided many more opportunities for women to enter nontraditional occupations. Again it is a program for which we continue to increase the funding because of its success.

I could share with the members some of the statistical comparisons of pre-recession and post-recession periods. All of them indicate the kind of improvement in wage differentials which the member and everyone acknowledges. To acknowledge what my colleague the Deputy Premier and Minister responsible for Women's Issues has acknowledged -- and he is dealing with it all the time -- the reality that the gap is not closing quickly enough is unfortunately to state what we all know. We recommit ourselves, as we are apparently doing with some success, to playing our part in closing that gap.

The member has no doubt asked all the ministries questions relating to the role of women in their ministries, about the numbers and senior positions. The member will find good progress across the board, as no doubt the Deputy Premier has pointed out to her. She will find a much greater geometric progression in the years to come, given the groundwork that has been laid. The task force report expected in June 1985 will help us all in dealing with some of these technological issues over the next decade.

4:30 p.m.

The member mentioned pension reform, and I am glad she raised it. First, with regard to the guaranteed annual income system, the select committee with representation from all three parties -- that committee was either chaired by or greatly assisted by the chairman of the committee of the whole House today; is that right?

Mr. Chairman: I served on it.

Hon. Mr. Grossman: When he was parliamentary assistant for Treasury and Economics he played a major role in developing the Ontario position on pension reform. All the members of that committee recommended that the guaranteed annual income system single guarantee be at least 60 per cent of the couples' guarantee, and that is what we are accomplishing now.

In terms of the balance of pension reform, the member is aware of the initiatives that have been taken. I know the member would want to be fair to us and acknowledge that we have made great progress since August 1983, when the Premier (Mr. Davis) got the agreement of all the other Premiers that Ontario should chair the first-ever provincial meeting of ministers responsible for pensions.

Pension reform discussions have been going for 10 years now. We have had both provincial and federal suggestions. To be fair, we have accomplished a great deal. I had the pension ministers here in June, subsequent to many excellent meetings with officials from all provinces, trying finally to move beyond general conception and general policy and get into some specific agreement on the form.

Mr. Grande: It has taken 10 years.

Hon. Mr. Grossman: No. it only took me 10 months.

We met here on June 5. One of the important things I would like to mention is that the federal government asked whether it could send some representatives to that meeting. Provincial meetings are not usually places where one finds federal delegates. They tend to be meetings where provincial ministers get together -- the old federal government would say "gang up" -- to discuss our frustrations and our needs in terms of federal government funding and federal government policy. By and large, those meetings have been quite useful and important over the years, and I have been at them in four or five ministries now.

This particular meeting was not one where the pension ministers were gathering to exchange secret information about the federal government or to plot strategy, as used to be the case in the area of health care. This was a genuine effort by provincial ministers to try to reach a consensus on pension reform that would not only assist us but also would move towards finalizing legislation on a national basis. To have done that without federal government representation would have been a mistake, in our view.

I wrote to all the pension ministers and asked them for their concurrence in having federal government representation at this provincial pension ministers' meeting. They agreed. When we met in June, we had federal representatives there with us, who reported back to the then federal Minister of Finance. That was most helpful in getting genuine consensus across Canada and across party lines on pension legislation.

I want to point out that in the past 10 months, after 10 years of dialogue and discussion, we have made quite significant progress. To be fair, it culminates royal commission reports, the report of the federal select committee under Mr. Frith, the provincial select committee --

Mr. McClellan: Provincial select committee?

Hon. Mr. Grossman: I mentioned it while the member was out, and the sterling contribution made by the member for Mississauga North (Mr. Jones).

Mr. McClellan: Can the Treasurer share some of this so-called progress with us? Some of us are getting a little sceptical.

Hon. Mr. Grossman: I have, but I will be pleased to review it.

Mr. McClellan: I will read it.

Hon. Mr. Grossman: No, I want the member to hear it.

The point I wish to make is that while we have made a great deal of progress over the past 10 months, to be fair to all our predecessors at the federal and provincial levels, that progress was only possible because of the extraordinary work that was put into a very complex and difficult subject over the past 10 years.

Mr. McClellan: It is not that complex.

Hon. Mr. Grossman: I find it complex. The member may not.

Mr. McClellan: Somehow I do not believe the minister really does.

Hon. Mr. Grossman: I find it very complex. Given that groundwork, in credit to all the governments, we took the reports and agreed that no more reports were necessary and that we had to move fairly expeditiously towards legislation. The Frith report was out in January. We met in June and achieved consensus at the provincial level on about 21 of 23 or 24 points. That is exceptional progress and agreement.

Mr. McClellan: The government could have done it 10 years ago.

Hon. Mr. Grossman: Not so. Let me say why we could not have done it 10 years ago. We have been through extraordinary changes in terms of pension plans and how they operate and the impact of inflation on those pension plans. There is information available now on a historical basis that was not available when pension legislation was first talked about in 1972 or 1973.

I was not responsible at the time, so I need not be defensive about it at all. I can only say that had some of these pension reforms occurred in the early 1970s, the then unknown impact of inflation on pension plans would have wrought some very severe stresses on pension plans and our ability to fund them, to deliver the benefits and to understand the appropriate benefits and the appropriate first stages in pension reform.

Now we have a great deal more information. It is empirical, it is well known and it is well understood, and we face far less danger now from the impact of inflation on the changes we are about to make.

Mr. McClellan: One would think the government was inventing pension plans.

Hon. Mr. Grossman: We are reinventing them.

Let us look at the major terms of consensus. One is compulsory eligibility for membership of full-time and part-time workers after five years of service. I should add that some jurisdictions are opting for compulsory membership; at the moment, Ontario believes only compulsory eligibility is appropriate. Another is vesting and locking in of the accrued value after five years of service. Yet another is minimum employer contributions of at least 50 per cent of the accrued benefit upon termination or retirement; I suggest that is a very important and significant change.

Is the member for Welland-Thorold (Mr. Swart) retiring? Why did he shake his head?

Mr. McClellan: We are talking about the by-elections on December 13.

Hon. Mr. Grossman: What by-elections?

Mr. McClellan: St. Andrew-St. Patrick is one of them.

Hon. Mr. Grossman: That is what I get for missing a cabinet meeting.

Preretirement survivor benefits of at least 60 per cent of the accrued pension and post-retirement survivor benefits of between 60 and 66 2/3 per cent also have been agreed upon.

Regarding the inflation protection issue, one might say that Ontario is providing the leadership in that area. We are the only jurisdiction that wants to provide that protection. Having studied that issue very carefully, I am satisfied that we will be able to reach some consensus on this very important issue with the other provinces when we next meet.

I will not review the other 15 or 16 points of agreement. However, they are very significant, and I want to point out to the members that the pension ministers will be reconvening once again. The current scheduled meeting date is December 3, happily here in Toronto. I am satisfied that 1985 should be the year when we can achieve new pension legislation across Canada with a great measure of uniformity both in the provinces and at the national level. That is very good progress in terms of pension legislation.

Having chaired that meeting, I might say I found that the pension ministers were very anxious to achieve uniformity and reform, and we were all fairly optimistic about our chances to do that in 1985. That implies a willingness among the 11 ministers that we move off some of the positions we hold. It will require a great deal of thought and consultation, but if we are all serious about it and if we believe in uniformity, which I think is essential, each of the 11 ministers will have to contemplate making a few alterations in the position he has taken.

4:40 p.m.

Mr. McClellan: There is no opposition to any of this stuff; there never has been.

Hon. Mr. Grossman: Sure there is. Only Ontario supports inflation protection.

Mr. McClellan: There has not been any for five years.

Hon. Mr. Grossman: Only Ontario supports inflation protection, and that is very key, of course.

In any event, I am optimistic on those points. With regard to some of the other points that have been raised, if they are extremely important ones, I offer the advice that they would more appropriately be dealt with either by the Chairman of Management Board or by the Deputy Premier, who have direct responsibilities in the areas the member has discussed.

Mr. Nixon: Mr. Chairman, the Treasurer has already defended today his scurried trip to New York in the company of the Premier to maintain our credit rating, but I did want to say something about the pressures that have come on the credit rating and about what he might do even if he just follows the example of his illustrious predecessor.

The minister may recall my brief remarks on Friday afternoon in which I pointed out to him something he probably already knew by drawing together some of the very bad decisions and some of the unfortunate events associated with Ontario Hydro. He may recall that I made reference to the general overbuilding of Hydro, resulting in a capacity well over 50 per cent beyond our requirement; that in general we permit, for comparison's sake, a cushion of 25 per cent in potential hydroelectric development, but that even this is a very large cushion for a mature agency such as Ontario Hydro and that 18 to 20 per cent would be considered sufficient. The overbuilding is tremendous and, of course, it was provided with dollars borrowed on the international money markets at high interest rates.

The administration of Ontario Hydro has contracted on a long-term basis for 12 million tons of coal a year; we are using about nine million tons. It has contracted for oil, which we do not use at all as a fuel. We have agreed to take delivery of 22,000 barrels a day until April 1992, I believe. We are currently in the courts with Petrosar trying to wriggle out of that agreement.

Our uranium contracts are really the most amazing ones ever entered into by any corporation, public or otherwise. We gave Stephen Roman an exploration fee for uranium he had already found. We even put a special clause in his contract guaranteeing him a profit equal to or greater than that of any other uranium company in the Elliot Lake area just in case he might have made some slipup in his calculations.

As a result of our deal with Mr. Roman and the other uranium mining corporations, we expect to have before the end of the century a surplus of 23,000 tons of uranium -- above and beyond what we can use at Darlington and 12 additional Pickering reactors of that size -- and the surplus will have cost us $2.7 billion. We have mothballed $2.5 billion in expensive installations, many of which are by no means used up; some of them, the oil-fired installations, have not even been fired up at all.

We have an absolute fiasco on electrical transmission lines that is going to result in our bottling up power in the Bruce atomic plant starting within the next few months and going on for at least four years. the cost of which is almost impossible to calculate since it will have to be replaced by expensive energy from coal sources.

Our business dealings in heavy water, particularly our contracts with Lummus Canada Ltd., have resulted in cost overruns approaching $1 billion. Even though former Treasurer Darcy McKeough cancelled one of the huge installations, we still have a tremendous amount of heavy water being developed or potentially to be developed in the Bruce facility for which there is absolutely no possible market.

Our contracts with Babcock and Wilcox are really quite amazing. They were entered into by Ontario Hydro at the behest of the government of Ontario. They are no-fault contracts; no matter what Babcock and Wilcox does wrong, it cannot be charged for it. The contracts were let without tender; there is no performance guarantee; there is built-in inflation protection. The American Babcock and Wilcox firm has no liability whatsoever. We have agreed to give the firm payment before delivery.

Because of an argument between Atomic Energy of Canada Ltd. and Ontario Hydro as well as Babcock and Wilcox, they insisted on defying their contracting partners and going ahead with an unusual heat-annealing process which meant their boilers, even after they had been put in place and set in cement at Pickering, had to be removed and fully remanufactured. It is estimated this mistake alone will cost Ontario Hydro and the energy users of the province $850 million.

The problems of decommissioning our atomic facilities are almost unbelievably gargantuan. The facilities are designed to be in operation for 40 years and we are already close to half-way to that point. There has been no build-in of any decommissioning costs. There already is the example at Three Mile Island. That is unlike any decommissioning we will have, but the problems of working in a situation of high radioactivity are somewhat similar. It is estimated that we will have 30,000 tons of high-level radioactive waste to dispose of and, as yet, there is not even an inkling of a procedure for such disposal.

If the present Treasurer finds himself Premier within the next few weeks or months one of the problems he will face, probably towards the end of his regime 18 months from now, will be the disposition of high-level radioactive waste.

The politician does not live, and I do not expect will live in the future, who could persuade any community to have this radioactive waste buried in plutons underneath its community. Even in the far reaches of the north, or anywhere else, the problems are going to be such that we are not going to be able to cope with them.

Acid rain largely comes from the burning of coal and the sintering of nickel ores. Ontario Hydro is at least the second largest source of this pollution. The costs of reducing the depredations of acid rain have never even been calculated, let alone approached by the public utility.

The Treasurer may recall that in the list of promises we were supposed to help the Premier keep three or four years ago was one designed to cut acid emissions from Ontario Hydro stacks. Even though this was included in an early speech from the throne by the government following the last election, absolutely nothing has been done.

The credit rating problem is one that concerns us all. The Treasurer has indicated this was just a matter of passing interest, but he perhaps will remember the quote from Darcy McKeough that I read to him on Friday in which the former Treasurer indicated in 1972 that he was not going to permit this province to get to a point where Ontario Hydro had gathered to itself all the borrowing powers of the province, leaving the province itself to use its normal revenues to support and expand our social services.

In spite of his warning, we are now at the point where Ontario Hydro uses all our international credit, or all we choose to use at this stage, plus it is getting a larger and larger share of the money that we borrow automatically or naturally from the Canada pension premium paid on behalf of Ontario, and from other sources. It is like putting the head of the camel in the tent. The camel is all the way in except for its rear end at this stage. As I understand Ontario Hydro, it is pushing to get even that part of its anatomy into the credit tent that has been built so carefully over the years.

4:50 p.m.

We have not had a Treasurer who dealt with this matter since W. Darcy McKeough. In July 1975, he peremptorily cut $1 billion out of the borrowing program of Ontario Hydro for that year. I do not know whether he even consulted with the Premier.

The Premier has often had a special arrangement with Ontario Hydro and I have a feeling Darcy felt that if he consulted he probably would have been stopped. Knowing him as slightly as I do, I have a feeling he is quite capable of sending a missive, probably tied around a rock, down to Ontario Hydro headquarters with "Cut off $1 billion" written on it.

In January 1976, he announced a cut of $5.2 billion in the 10-year capital expansion program of Ontario Hydro. Since that time nothing of any significance has come from Queen's Park towards Ontario Hydro by way of any sort of rational control of its $90-billion expansion plan.

When we think of what the people of Ontario Hydro tend to commit by way of capital expansion, it should shake even the present Treasurer. The Premier coped with this by putting a political lieutenant in at the chairmanship of Ontario Hydro. I think he probably felt that in this way he would at least be able to know what is going on and know there was somebody there who thought the way he did.

I personally do not feel that chairman, Mr. Macaulay, was tough enough to indicate to the board of Ontario Hydro that it would have to draw in its horns. It is almost like getting into a church; unless a person supports the basic tenets of that religion, they are going to kick that person out the back door.

The first basic tenet of the religion of Hydro is exponential growth. The second basic tenet is there is no way too much money can be spent on the capital installations for Ontario Hydro because in the long run we will need it and it will be seen to be politically good.

I feel the former chairman, Mr. Macaulay, has bought both of those tenets of Ontario Hydro and because of that he did not provide the brake on its expansion we should have expected.

Now we have the former Deputy Treasurer as chairman of Ontario Hydro. It may be -- and I do not know the relationships particularly -- that the Treasurer has confidence that he will bring in a harder fiscal approach to what Ontario Hydro is undertaking.

Frankly, I have my doubts. The reports so far have been that the new chairman has been rather shaky in his grasp of the business of Hydro when he has appeared at any public forum that has been reported. I am not prepared to be critical of his actions other than that I have not seen anything that has been commendable in taking a new approach under these circumstances.

I would simply say the Treasurer and the Premier -- who may be the same person -- simply have to consider seriously the effect of Ontario Hydro's long-range plan, not on our triple-A rating -- I feel sure we will be able to maintain that, at least in the reasonable future -- but in the long run.

I felt after the election of 1981 that the pollsters and certain others convinced the present Premier that the people want too much electricity, that they feel comfortable when the Premier says: "Is it not great to have too much rather than too little?" I think probably that is right, but somewhere in between there comes the place for a hard-headed management decision, which I think is going to have to be imposed on Ontario Hydro by the government of Ontario.

I do not know the solution, except that I want to express my regret that this House approved legislation making Ontario Hydro a crown corporation rather than the commission it had been from its inception. When it was a commission, we had a cabinet minister as vice-chairman of that commission. He not only could report to the House, but also carried some responsibility on behalf of the government, the cabinet and the Legislature and on behalf of the people.

I would say further, unless we get some sort of direct control -- and if it has to be a political control, so be it -- religious fanaticism based upon unjustified exponential growth is going to have something more serious to do with our credit rating than we envisage at the present time.

Since we are really on the first vote, I want to raise another matter having to do with policy. I will do it rather briefly, but it is a matter of great concern to me. The Treasurer may be aware of a book called The Great Brain Robbery by three University of Toronto and York University professors, David Bercuson. Robert Bothwell and Jack Granatstein. Granatstein is the only one I know personally. I believe they all have good reputations and I believe the book --

Mr. McClellan: Are they all Liberals? I do not know.

Mr. Nixon: Granatstein and another writer produced one of the first rotten articles about my hero Pierre Trudeau, and I will never forgive them for that. Maybe he is now regretting it himself, but that is another matter.

I just want to say the Treasurer should not simply discuss this book with the Minister of Colleges and Universities (Miss Stephenson) who, once again, has to defend the status quo. She has been minister long enough that she is really a part of the status quo in education, and maybe that is a good reason for the next Premier to consider moving her to the Treasury or something more challenging.

Mr. McClellan: That has a defeatist assumption behind it.

Mr. Nixon: I think we are going to have a new Premier before we have a Liberal Premier. The member should think about it.

I do not know how the NDP, with only two members here, can be so disruptive. If they are not talking to me, they are talking to each other at the top of their voices.

The Deputy Chairman: I call the honourable members to order.

Mr. Nixon: I simply want to recommend to the Treasurer, even if he is just preparing for this little contretemps in the party in the next little while, that I certainly think it is essential that he understand this book, referring to a decline in the quality of education, has something to do with more than just the operation and management of the universities and colleges.

The minister is probably aware that in the Financial Post in the last two issues there has been a series of articles indicating the impact of education quality on the economy of the nation and particularly this province. There is quite an interesting quote from Hyman Solomon, whom the minister may know, in the most recent Financial Post. I will not read all of it. I will read just this: "The Post's two-part series, concluding this week, points out that much of corporate Canada considers the problem and its resolution a key to industrial survival and international competitiveness."

They are referring to the problem as a national crisis in higher education. I simply leave it at that, rather than discussing it in any further detail. Particularly in Ontario, the three authors writing this book underline the problems that we are experiencing in funding an up-to-date curriculum, the problems of tenure and the problems of quality both in the faculty and in the student body.

I am sure members are aware that many faculty members in our university and college system have attacked this book vociferously and that obviously they feel everything is fine and the only thing we need is a lot more money. It may well be that more dollars are required in the post-secondary system, but I would assure the Treasurer -- maybe the next Premier -- that this, too, is a basic problem that a new, "revitalized" regime in this province is going to have to consider.

It is obvious that we are not turning out graduates either with the broad liberal education required in a modern business situation or with the sort of up-to-date specialized education that is going to give these young people an opportunity to take part in the world of work. It is a matter of grave concern that I believe the Treasurer and the head of the government have to consider, as well as the Minister of Education and Colleges and Universities.

5 p.m.

In drawing my remarks to a close, I also want to pick up on something my colleague the member for St. Catharines mentioned earlier in the day. The minister made a defence of the ad valorem tax which is an interesting one. He indicated that, of course, sales taxes cannot be ad valorem taxes and that all they are doing is bringing the other taxes into line with income tax and sales tax.

The minister, however, is aware that placing an ad valorem tax on motor vehicle fuels three years ago in 1981 and making it a movable ad valorem tax, depending upon the price as it fluctuates up and down, has doubled the revenue since 1981 for that particular tax without the government's ever once coming to the Legislature for approval of such a large new tax. The tax, as it was then in the old English system, was about 19 cents per gallon and it is now about eight cents per litre. This compares very well, from the revenue standpoint, with the take of the government of Canada and even of the government of Alberta.

I think we should realize this particular tax is a very high revenue producer now, since the Ministry of Revenue establishes what the ad valorem figure is by way of a formula, rather than specifically by what people are paying at the pump.

The reason I want to raise it specifically is that the minister, in response to complaints that came from the tobacco marketing board of Ontario, indicated he felt there should not be a policy in this province of placing provincial tax on provincial tax. There was some thought in the tobacco-producing community that, because of that, he would remove the sales tax from tobacco products, which already had a provincial tobacco tax placed on them.

The Treasurer has failed to do that and the ramifications are very far-reaching. When the government of Canada under Mr. Mulroney decided to go ahead with the additional one per cent tax that had first been established but not brought into force by the former Liberal government, that is, the increase of one per cent on liquor and tobacco products, the ramifications were very great. The federal tax went up by one per cent, but the effects on the provincial tax were also great.

I noticed a special release came out from the Liquor Control Board of Ontario saying its facilities were going to be closed down, as the prices of liquor and other products coming under this tax were increased. The products that were already in the stores before the tax was levied were sold at the old price, but a 40-ounce bottle of liquor had another 80 cents, I believe, added to the bill.

I suggest to the minister, particularly in these areas where he levies tax on his own tax, he might very well consider rationalizing that approach. If it is the decision of the government, supported by the Legislature, that these taxes go ever upward, even while in the case of the tobacco tax it is evidently having a very serious downward effect on sales, then at least it should be on the basis of a tax that is clearly understood and that is not a hidden tax. I hope the minister will be able to respond to that.

I also hope in the three hours and 40 minutes remaining we will have an opportunity to look at the specific votes in these estimates. The House may decide simply to use the time for general discussion. However, it seems to me there are quite a number of opportunities, in interim supply and so on, when general speeches and general responses on the economy of the province and tax policy are possible.

I hope on this occasion we might be able to go over the votes specifically, so we can look at the information provided by the ministry in its briefing book and get specific answers in the informality of this House as it acts as a committee of supply on these estimates.

Hon. Mr. Grossman: Mr. Chairman, I listened today as carefully as I did last Friday to the comments about Ontario Hydro and about some of its specific policies, whether it had overbuilt or not. Obviously, those matters properly lie within the purview of my colleague the Minister of Energy (Mr. Andrewes).

Let me endorse, however, very strongly, at least from the Ministry of Economics side of my portfolio, the view that does say, and the member has acknowledged this, it is better to overbuild than underbuild.

Mr. Nixon: It is better to do neither. Build just right. Try it for once.

Hon. Mr. Elgie: A good old 1937 Liberal technique.

The Deputy Chairman: Order.

Hon. Mr. Grossman: I know the member served with me on the select committee on Hydro shortly after I entered the House in 1975. One of the things I always remembered took place early in 1976, I guess, when all sorts of groups came in to project average annual growth rates for electrical demand during the next decade. We have almost completed the decade we were then talking about.

I remember we called in the Sierra Club -- I know the member will recall that day very well -- which came from the United States. That very esteemed and low-priced lawyer Alan Schwartz had brought in the Sierra Club in order to bring to the committee the most extreme view available on the downside of predictions.

In 1976, when Hydro was saying seven per cent, some others were saying six or 5.5 per cent, but most were netting out at six per cent, I remember the Sierra Club came in and shocked the committee by suggesting -- I could be wrong by one percentage point -- four or five per cent. I forget which one it was. Even Evelyn Gigantes -- and who knows where she may turn up in the next 44 days, let alone the next six months --

Mr. McClellan: Right here.

Hon. Mr. Grossman: I have some money with me. We could wager on that. I lost my last bet.

Mr. McClellan: On this one you are on.

Hon. Mr. Grossman: Okay, you are covered.

Even Evelyn Gigantes was sceptical about whether it would be as low as four per cent, but that was the lowest figure we ever heard. With great respect, I did not hear, even from the third party, any suggestion it would ever be below four.

Mr. Nixon: The recommendations from the committee were eventually at three per cent.

Hon. Mr. Grossman: Shortly after we heard the Sierra Club --

Mr. Nixon: It went down to zero.

Hon. Mr. Grossman: That is right. My point is that when Hydro is charged with the task of planning to build plants that take 13 years from decision date to the day they come on stream, and when the circumstances are such that demand for electrical energy is so unpredictable as to be --

Mr. Nixon: Darcy McKeough was clairvoyant.

Hon. Mr. Grossman: He was on many issues.

Mr. Nixon: He was a good Treasurer.

Hon. Mr. Grossman: He was a fine Treasurer, as was his successor and my predecessor, and as will my successor be, provided he or she is from this side of the House.

Mr. Grande: Encourage him to come in.

Hon. Mr. Grossman: There is room for everyone.

Mr. Nixon: In politics if anything bad can happen, it will. That means he is going to run.

Hon. Mr. Grossman: How do you know that is bad? It could be very good.

Mr. Nixon: It is not good for you, kid.

Hon. Mr. Grossman: In any case, the point I want to make is that the situation is so volatile that even the lowest predictors in 1976 said four per cent, and three years later it was zero. Hydro has to plan 13 years out and make a judgement 13 years in advance with regard to what the demand is going to be, and that is a very difficult task.

To be fair, I know the member sat on that committee. I can only go on what I heard, and it was several years ago, but it has been sustained by others I have spoken to in my discussions internationally. It is a view that the people at Hydro are, given the inexactness of that science, pretty good compared to all others who are in the business and forced to make serious and difficult decisions 13 years in advance.

Mr. Kerrio: They are all wrong and you are right.

Hon. Mr. Grossman: They are not terrible. With respect, they are the best there are. The problem is that the variables 13 years from today are somewhat hard to predict. None of us would like to have to make billion-dollar decisions today on the basis of an estimate of what economic conditions, demographic conditions and international circumstances are going to be brought to bear 13 years from today. It is very difficult.

5:10 p.m.

I guess all I can say is that history will show Hydro has been pretty good. It erred on the right side. The member for Brant-Oxford-Norfolk has agreed that one has to err on the safe side, which is to build more, not less. When one looks at the post-Darlington scenario, one will find that a reasonable level of economic growth, say, three or four per cent extrapolated over the next 10 or 12 years, will leave us in a circumstance by the turn of the century where what now seems a huge surplus will not be a surplus. It will prove to have been the right amount of energy.

Mr. Nixon: We will be paying for it for 30 years.

Hon. Mr. Grossman: There is nothing new about that. One has to pay for these things as one builds them.

Mr. Nixon: Without using it.

Hon. Mr. Grossman: With respect, the point being --

Mr. Nixon: The minister is justifying all that overcapacity. I do not see how he can do that.

Hon. Mr. Grossman: If Darlington were not being built now, the electricity would not be in place when we needed it. One cannot decide by --

Mr. Nixon: They claim they will need it by 1994.

Hon. Mr. Grossman: We cannot decide in 1995 that we are going to need a lot more electrical energy and begin to build a Darlington in 1995, when it will be needed in 2000. One does not have five years; one needs 13 years. Those decisions have to be made 13 years in advance. If we have a percentage growth rate of three or four per cent steadily from now to the end of the decade, we would have --

Mr. Nixon: You are speeding up Darlington.

Hon. Mr. Grossman: It has not been speeded up. There have been delays.

Mr. Nixon: Sure it has.

Hon. Mr. Grossman: No. That is wrong.

Mr. Nixon: You delayed it and then speeded it up, right after the election.

Hon. Mr. Grossman: With respect, it was speeded up and then delayed.

The member has talked about the part that properly relates to Treasury, which is Hydro's borrowing. I have some points I should make. Last year at this time, as I indicated in question period today, we cut $200 million from Hydro's borrowing. That indicates continuing awareness by this government of the circumstances --

Mr. Nixon: That $200 million will not last two days.

Hon. Mr. Grossman: That is something of an exaggeration. It was a big reduction. It is $200 million on about $2 billion this year. The figure is $2.4 billion this year. That is a fairly large reduction of about 10 per cent. It is a significant reduction. They have absorbed it. As I said in question period today, that indicates that since we had our credit rating intact at a $2.7-billion provincial deficit, and with Hydro borrowing $200 million more than it ultimately turned out to be, Hydro is today borrowing significantly less than would create a problem with the credit rating.

The second point is that the honourable member has suggested Ontario Hydro uses all our international credit. That is not the case. There is a lot more money available to us. It is a credit to us that neither Hydro nor the provincial government chooses or needs to go for more money internationally or domestically.

Mr. Nixon: Available at a triple-A credit rating?

Hon. Mr. Grossman: It surely is. It would cost more within the triple-A credit rating range, but Hydro and the province could borrow some amount more without endangering it.

Mr. Nixon: That is what Brazil found. That is what Argentina found. The government can borrow all it wants.

Hon. Mr. Grossman: The other point is that the member suggested that Hydro needed to borrow so much that it not only went to the American market, but borrowed Canada pension plan moneys. The situation is quite different. We contracted some borrowing for Ontario Hydro through the province from CPP because, happily, the affairs -- I say this seriously -- were so well managed in two years --

Mr. Nixon: Why is that quite different from what I said?

Hon. Mr. Grossman: -- that the CPP moneys available to the province were greater than the province was borrowing on its own account. CPP contributions are available through borrowing to the provinces in the same amount that the money is put in. The money was available, and we ran our affairs so well that the Treasurer did not need to borrow as much money as was available from CPP.

The member will agree with me that if we need to borrow any money, it is CPP money that should be borrowed for a variety of reasons. Therefore, rather than have Hydro go for other moneys more expensively outside the country, we chose to use our unused capacity to borrow from CPP.

Mr. Nixon: That is just what I said. Ontario Hydro is enlarging its share of the credit pie.

Hon. Mr. Grossman: In that case, the member would criticize Hydro. Every time we do a good job here of reducing our deficit, that is exactly what happens. We did not increase our deficit commensurate with CCP contributions; therefore, the Hydro borrowing relative to ours may have increased, but that does not indicate Hydro is overspending at all.

It would be unfair to say that because we have had some success here, Hydro has not had success. We have totally different circumstances. We were able to do things here so that its borrowing could take up some of the CPP borrowing we could not take.

As Treasurer, I would be delighted if we could bring down our deficits to the point where there would be even more CPP money available for Hydro. The only point I wanted to make juxtaposed with the member's remarks was that implicit in those remarks, and I want to be fair, was the suggestion that Hydro was borrowing so much that it had tapped its American capacity and had to go into CPP moneys.

Mr. Nixon: The government did not want to borrow any more New York money.

Hon. Mr. Grossman: That is not the case at all.

Mr. Nixon: That is what I say and that is what I believe.

Hon. Mr. Grossman: All that money could have been borrowed in New York. There was Canadian money available which was Ontario's right to borrow first. It is a preferential rate as against the American price, so obviously we borrowed here instead of the money that was equally available.

Mr. Nixon: Mr. Chairman, if you will permit me, the point is the government is spending this money on Hydro, which is unnecessary, rather than on the social capital of the province, which is rapidly running downhill. The Treasurer calls it good management; we say it is bad management.

Hon. Mr. Grossman: As the member is obliged to. I would only say that --

Mr. Nixon: The Treasurer is obliged to say the opposite. He should be a little more direct about this.

Hon. Mr. Grossman: If the member wants to argue that our social capital has run down, we could have a dandy discussion on that.

Mr. Nixon: We are 10th out of 10 in post-secondary education. Let us start there.

Hon. Mr. Grossman: We can start with post-secondary education, and that does not give anywhere near a full picture of whether our contributions to post-secondary are commensurate with the other provinces, as the member well knows.

Mr. Nixon: No. It just means the government is 10th out of 10.

Hon. Mr. Grossman: It does not. The point I am making is it does not mean we are 10th out of 10.

Mr. Kerrio: The minister should look at the opportunity he has when the province is 10th out of 10. There is no way to go but up.

Hon. Mr. Grossman: It is apples and oranges; those figures are not any good. They are pretty high. One cannot extrapolate from our discussion on Hydro and then take a quantum leap over to say that, because of Hydros borrowing, our social capital is being run down.

Mr. Nixon: Is that your deputy, by the way?

Hon. Mr. Grossman: Yes, this is my new deputy minister.

Mr. Nixon: I am very glad to meet him.

Hon. Mr. Grossman: The member will get to know him more from that side. He is a very fine deputy.

Mr. Nixon: He is now writing the minister's jokes. Why does the Treasurer laugh when he looks at what the deputy minister wrote?

Hon. Mr. Grossman: They were very accurate figures, not ones I wanted to use, but very accurate.

Mr. Nixon: So it is ninth out of 10.

Mr. McClellan: I think the minister should use them.

Hon. Mr. Grossman: Someone no doubt will.

Mr. McClellan: Maybe a page could bring them over.

Hon. Mr. Grossman: The member has raised his hero Pierre Elliott Trudeau. It is ironic he would be mentioning Trudeau as well as our credit rating and investment of social capital, particularly in education, when it was his hero who capped our post-secondary payments at six and five.

Mr. Nixon: My hero pays half the cost of post-secondary education, half the cost of something that is totally the provincial government's responsibility.

5:20 p.m.

Hon. Mr. Grossman: Getting rid of the revenue guarantee cost us $300 million. If one were to accept the member's proposition that colleges and universities and post-secondary education are suffering at all, I know the member would want to attribute at least part of that blame to his hero, who dramatically cut back on the very transfers that were designated for those uses.

I have to go back to Ontario Hydro, just to be fair to the new chairman, and report it is not my information that he is at all shaky or having difficulty getting his hands on things over there. I can report that with some accuracy. As I said at the going-away party we had for him last week. I have been speaking to him at least as much since he left as when he was my deputy. I am hearing from him on a regular basis.

Mr. Nixon: I will bet the minister is. If he gets digging around over there, he will want to come back.

Hon. Mr. Grossman: It seems to me he has a very firm grasp on the situation. By the way, he seemed to have that when he was Deputy Treasurer. He was one of those who indicated to me that it would not be an oppressive measure to ask Hydro to reduce its borrowing by $200 million. That is a point I intend to remind him of at a later time. That is why I wanted to get it on the record.

Mr. Nixon: He knew $200 million would not scare them much.

Mr. Kerrio: When Darcy gave a $5-billion shot, he really pulled out a lever.

Hon. Mr. Grossman: It is because that money came out that there is not that much left to come out now.

On the tobacco tax, the member quite properly points out that I had expressed some concern about the tax-on-tax situation. We are continuing to look at that. I know he will acknowledge, as did so many of his constituents, that we did not increase the tobacco tax as so many people had --

Mr. Nixon: No, but the revenue increased by $50 million.

Hon. Mr. Grossman: The fact that the revenue increased did not mean there was a tax increase. That is like saying there is a retail sales tax increase when automobiles go up in price this year. One just cannot argue that there was a tax increase.

To be fair, the farming community in the riding of Brant-Oxford-Norfolk and the great riding of Oxford expressed appreciation and acknowledgement -- at least in Oxford through their very fine member -- for the fact that we did not increase the tobacco tax. It would have been a difficult year for the farmers had we done that. I am happy the representations made to me by my colleagues the member for Oxford (Mr. Treleaven), the member for Elgin (Mr. McNeil) and others brought that circumstance to our attention.

Mr. Kerrio: So did the member for Haldimand-Norfolk (Mr. G. I. Miller) and the member for Brant-Oxford-Norfolk.

Hon. Mr. Grossman: And the member for Brant-Oxford-Norfolk did as well.

Mr. Nixon: Do not worry about me.

Hon. Mr. Grossman: I was not. Chief Staats will look after both of us, no doubt.

It has also been acknowledged that part of that was due to my determination in the last budget to avoid tax increases of any nature if possible. I hope that will be possible in the future. The tax-on-tax situation is one that both governments have to review. The measures taken by the federal government to relieve some of that pressure with regard to how they calculate their portion has been of assistance as well.

The final thing I would like to raise is the question of the brain drain. While I have not read the book, I was interested to hear the member's comments on it. I must admit I first thought it was what had happened to his caucus in the past six months. Having realized that would be inappropriate in this circumstance, I only want to say I will read that book.

I have discussed those issues at some length with my colleague the Minister of Colleges and Universities. Let me say quite clearly that, to be fair, we have increased our post-secondary funding well above the rate of inflation this year, as I indicated during question period today. Inflation is now at about 3.9 per cent. Our post-secondary transfers are at least 6.5 per cent and 7.5 per cent respectively.

Mr. Nixon: Hydro rates are going up by 8.6 per cent.

Hon. Mr. Grossman: I am not sure what relevance that has. In any case, post-secondary funding is running at double the rate of inflation this year, which is a significant increase.

I do not know what the premise of The Great Brain Robbery is, whether it talks about equipment, funding, building, courses and curricula, wages and salaries, working conditions and all those -- I do not know, and I will read the book -- but the point I would like to make is that those kinds of increases, and I must be quite open and direct with the member, could go a long way, with inflation at 3.8 per cent, to remedying some of the research, accommodation and other pressures that I hear from faculties themselves are real problems at those institutions. In my view, they are not necessarily entirely right on those issues, but I said I hear from faculty members that those are pressures.

With inflation at 3.8 per cent, I hope those transfers running at 7.5 per cent will largely end up where they ought to end up, which is in those institutions, as opposed to going almost automatically to wage increases in excess of five per cent, let alone in excess of 3.8 per cent.

For my part, providing more funding to post-secondary education, as we have this year, is important. As Treasurer, I can stand and say that in the budget policy brought in by this government, we showed that quite clearly both in the transfers, double the rate of inflation, and in terms of specific measures in the budget.

Many of the economic policy initiatives we introduced in the budget were focused right on universities, enterprise centres, innovation centres, research funds and the like. All those efforts will be lost if those extra funds end up not in the institutions but in faculty salaries, when those same faculties are telling us almost daily of the financial needs of their institutions.

While I acknowledge the strains and pressures, I will take this opportunity to ask the members of the House to join us in saying quite directly and clearly to faculty members and staff of those institutions that seven, eight, nine, 12 or 18 percent increases in salaries and wages surely cannot be the major priority for those institutions that need the extra dollars for the institutions themselves.

I remind all of them that inflation is running at 3.8 per cent. That is something they have to take cognizance of and reflect it in good faith during what some of them see as a year, post Bill 179 and Bill 111, when they might want to take larger increases than we funded for the universities and colleges. We funded them, of course, for five per cent.

Mr. Charlton: Mr. Chairman, I would like to go back with the Treasurer for a few minutes to the discussion that was going on a little earlier about Ontario Hydro.

I do not know whether the Treasurer realizes just how silly the scenario he set out for us sounded. He stood in his place and talked about 1976, when he was on the select committee. Ontario Hydro people were projecting demand increases of seven per cent; they were the most wrong. People from the Sierra Club came in and said they were not sure of the figure; they were the most right in terms of reality, even though they were the least believed at that point. Now the Treasurer is asking us to believe we should believe those who were most wrong in terms of the future.

5:30 p.m.

The Treasurer talks about the lead time that is necessary to bring a plant like Darlington on stream and the necessity of completing that plant anyway. The Treasurer should be aware that there is already more than the capacity of Darlington sitting idle in this province. He should be aware that to get the power from the last two units at Bruce nuclear out to the place in the province where it is said to be needed, it is going to cost Hydro $1 billion just for the transmission lines. There is already idle capacity sitting in the area of the province where it is said we will need that power.

The $1 billion is just for the transmission lines, forgetting about the last two units at Bruce and forgetting about building Darlington and all the lines it is talking about in eastern Ontario. The $1 billion for the southwestern Ontario transmission line alone would put scrubbers on facilities that are now sitting idle because, by the government's own claim, they produce acid emissions. The moneys for that line alone would put scrubbers on four units that are currently sitting idle in this province or are being used as backup in some instances.

The kind of economic scenario the government is setting out for us is that it is telling us to believe the proponent that has been most wrong. It is telling us that we need the capacity Darlington will provide when we already have more capacity than that sitting idle, in addition to a 50 per cent surplus.

I am not going to get into an argument with the Treasurer about whether Ontario Hydro's borrowing is affecting his overall ability to borrow. That is not the discussion I want to have here. The discussion I want to have is about the economic sanity of the whole expansion program of Ontario Hydro.

He has told us the Sierra Club was the most right in terms of predictions a decade ago. Why is it that we are now totally ignoring groups such as the Sierra Club, which have been the most right? Does the Treasurer know what the Sierra Club would be saying about Ontario Hydro's present expansion program and whether it is necessary? It would tell him it was not necessary. Some of us do listen to those groups from time to time.

We are in an expansion program at Ontario Hydro where, whether or not the Treasurer is prepared to say that Hydro's borrowing is affecting the government's ability to borrow -- that is not the crucial question as I see it -- it is creating a debt load in this province that the residents of this province are going to have to carry. I do not think the Treasurer can find any way around that.

The debt load that Hydro is currently incurring is a debt load that the residents of this province will have to carry. Hydro happens to be a commodity that almost everybody is dependent on. They have to pay their Hydro bills, and ultimately this debt load is going to be reflected in those Hydro bills. The whole program that is currently being undertaken is totally unnecessary, as my colleague the member for Brant-Oxford-Norfolk said.

The scenario the Treasurer sets out about lead time is all very well, good and true. It does take 13, 14 or maybe even 15 years to bring a facility on stream, but we have capacity sitting idle, capacity which, for much fewer dollars, we could be retrofitting to deal with the potential for future need. In the broadest stretch of my imagination, I cannot conceive how the approach currently being taken can be classed in any sense of the word as economically sane.

If the road building programs in this province were as outlandish as Hydro's approach to expansion, the government would have public interest groups all across the province opposing its highway construction. However, it does not because it is not out of whack. I say to the Treasurer that when he gets into a situation where he finds groups from all over the place opposing the massive, unnecessary expansion Ontario Hydro is involved in, it is time for him to sit down and think about why all those groups are popping up in opposition, at rate hearings, at hearings around plant construction and at all the rest of the things we have seen going on.

If and when one finds that kind of opposition developing, it is not opposition that is coming from nowhere. Sure, some of the opposition that is involved out there is related to the nuclear program of Ontario Hydro because some of it is from groups that oppose the nuclear option, period. But a lot of the opposition that has evolved around Hydro has nothing to do with the question of whether it is nuclear or not nuclear; that opposition would be there whether it was coal-fired, oil-fired or water plants that the government was spending money on when we do not need them.

It is time for the minister, instead of steadfastly and stubbornly defending Ontario Hydro's progress, to think back to the select committee he sat on, to think back to the way this government protested against the need to mothball the heavy water plants at Bruce right up until a week before Hydro, on its own volition, finally got up and announced the mothballing of, I believe, Bruce D.

I think the Treasurer needs to respond to some of the economic realities that are inherent in Hydro's whole program.

Hon. Mr. Grossman: Mr. Chairman, let us first just get the old select committee-Sierra Club scenario into some perspective. It is very nice to say that the Sierra Club was the most right of the groups offering a view.

Mr. Nixon: Most correct.

Hon. Mr. Grossman: "Most correct" is what he means; that is right. But even the Sierra Club, I would think, would acknowledge that in 1976 it did not have prior knowledge of the oil crisis that would be created by the Organization of Petroleum Exporting Countries in 1978. Even the Sierra Club did not anticipate the lineups at the gasoline pumps in the United States in 1978 and 1979. All of that had a tremendous rebound impact, not only on gasoline consumption but also on the whole energy conservation field.

The Sierra Club, as well informed as it is, did not understand totally the impact of those events or of the economic recession that befell us in 1981-82. To be fair, it was the most correct, but a set of circumstances it did not anticipate made it correct. The same variables, working out in an equally unpredictable way, could have made it the most wrong. One should not presume that the Sierra Club, any more than, for example, the Conference Board of Canada, which itself once in a while turns out to be correct --

Mr. Nixon: Now the Treasurer is backtracking, covering his $100,000.

Hon. Mr. Grossman: One should not presume from the fact that it happens to be right on an occasion or most correct on a certain event that it has any better insight or any better judgement than anyone else.

Mr. Charlton: I was not suggesting that. I was just suggesting that the minister again is totally ignoring groups like that.

Hon. Mr. Grossman: I would argue fairly strongly that the processes we have set up in Ontario, such as the Ontario Energy Board rate hearings, select committees -- the member will remember them -- and estimates here are all opportunities that have been provided both by this assembly and by this government to allow those groups to have a great deal of scope and input into the system.

The member opposite may not agree with their results, and I respect that. Indeed, I do not mind saying that as a member of this government I have had occasion not always to agree with some decisions handed out by courts and by administrative tribunals of all types. But the fact is that the way you organize society and government is to allow an important forum to be set up for that kind of debate, to make sure there is good access to it and to appoint competent people to it.

Notwithstanding the suggestions I hear across the floor from time to time, I have rarely heard suggestions that the people appointed to things such as the energy board are not competent people. Some may have preferred that they belong to different political parties, but no one has really questioned their competence or ability; so I would argue that those groups are not ignored in the system.

5:40 p.m.

The select committees here call all those groups, and a lot of time is taken. The Ontario Energy Board rate hearings are held annually. Every time a transmission line goes in, as we have found recently, the courts will protect the system we on this side of the House have set up to make sure there is full and complete input from anyone who can be said to be even remotely affected by a transmission line. I guess I would argue that, far from neglecting or ignoring those groups, there are extraordinary steps taken in this jurisdiction to make sure those groups get their say.

Mr. Charlton: That is only if one assumes that input happens in the first place.

Hon. Mr. Grossman: That is a fair premise. I was just going to say that one can debate --

Mr. Charlton: If the government listened to those groups a little bit in advance, perhaps we would not have had to waste all the money the government has wasted on the transmission line hearings.

Hon. Mr. Grossman: My friend will find that if we had listened to those groups invariably -- and this is not manufactured or dreamed up by me -- then American Motors Corp., General Motors and Honda would not be putting in $2 billion worth of auto investment. If we slavishly followed those groups, we would simply have a shortage of electrical energy.

Mr. Charlton: None of them has ever suggested that. Hydro itself contends that we have to run at about a 25 per cent surplus to run the system. Nobody disputes that.

Hon. Mr. Grossman: The member can debate those issues with the Minister of Energy. The only point I am making is that my friend was talking about which groups we follow and which advice we take, and I just point out there would be a gross error made if we slavishly followed the advice of the groups the member suggested we follow.

In point of fact, I would argue that the system set up here, which sends these matters to things such as rate hearings and has them analysed in this House, constitutes important procedures because it does not allow anyone to be a slave to either one of those groups. These matters are under extreme scrutiny here. I would not want members to think --

Mr. Charlton: What will the Treasurer's response be when Hydro, of its own volition, announces a postponement of Darlington?

Hon. Mr. Grossman: The member can ask that question in a minute. Let me just make the point, and I say this most sincerely, that anyone who believes that people on this side of the House do not pay attention to those groups really does underestimate us. We do pay attention to those groups. We have learned a lot from those groups. This member has learned a lot from those groups.

Mr. Nixon: Stop the expressway then. The member for Don Mills (Mr. Timbrell) says he is thinking about it.

Hon. Mr. Grossman: That is right. That is a good example.

I can say quite clearly that this member learned a great deal on that select committee over the course of a year. It was very valuable. I learned far more than if I had just been reading Hydro documents or government documents. The groups such as Sierra Club, Energy Probe and others that came in offered a great deal of information that all members of that committee would not have had but for that process, and I do not mind saying that. We are open to learning all of that and hearing all of that. They become a very important part of the process, and I for one would defend the processes we have in place here to allow that sort of input.

I am really agreeing with the member in the sense of saying that no set of forecasters and no group of experts should be followed slavishly, whether from Hydro or the Sierra Club. They always have to be analysed critically both by elected officials and in forums such as the Ontario Energy Board as well as, when it comes to transmission lines and all those kinds of hearings, representatives of the public.

The member talks about the debt load and says we are allowing Hydro to run up debt loads which the public cannot sustain. I would remind --

Mr. Charlton: I did not say anything about the public sustaining them. What I said was that they were going to be paying off unnecessary debts.

Hon. Mr. Grossman: To put it in some perspective as against other jurisdictions, obviously a portion of the Hydro rates that are being paid covers interest payments on the accrued debt, and that would be the case in all jurisdictions. Therefore, when one looks at the Hydro rates in this province and measures them against the rates being paid in other jurisdictions, it is not a complete measure, but it is some measure of the amount of debt load that is being carried by the current ratepayers to support the system, whether it is overbuilt, underbuilt or whatever.

I think members will find it is interesting that Ontario Hydro rates remain quite low in comparison with those of other utilities across North America, and that includes, interestingly enough, utilities that do not have the excess capacity Hydro has. It means even those jurisdictions that have erred on the low side and have not built enough, let alone excess, capacity, have been managing their affairs in such a way that they cannot even match Hydro's record in terms of the cost of running the system, where Hydro has built excess capacity. I argue very sincerely that is a great testimony to Hydro's competence, excellence and management, given the variables it faces and given its shortcomings, and there are some.

Finally, the member should take up with the Minister of Energy the whole question of money being spent on transmission lines versus being put into scrubbers on plants. That is a very important point and I suspect he will find a fundamental difference between the views put forward by the member and those of my very fine colleague the Minister of Energy. There is nothing I can add to that.

Mr. Nixon: There are one or two specific questions on the first vote I want to put to the minister while we have a chance, as well as a more general matter. I am looking at page 22 on that foldout he provided. Under the main office vote there is an additional $106,000. Under "Details," it says, "Under provision 1983-84." Can he tell me what that additional $106,000 is for?

In the same list, there is something called, "Transferred from another branch," which lists for personnel services $121,000 and for analysis and planning $102,000. As well, there is a $51,000 addition for services in the information field. Is the minister beefing that up even further?

Are these the kinds of questions we should not bother the minister with?

Hon. Mr. Grossman: No. As the member knows, I like to handle these things, but I like to be quite precise in the information I offer. It will take a moment until the precise information gets here from my staff.

Mr. Nixon: While the minister is waiting for that, it is page 22 in the paragraph down at the bottom.

I also wanted to ask the minister something that really comes in a later vote, Mr. Chairman, if you would prefer it dealt with then. It has to do with the $100,000 we are paying for the Conference Board of Canada's information. We have some research available to us too. Of course, we do not have nearly the quantity, although I think the quality is good, that is available to the minister.

I think we would agree the Conference Board's forecast is slightly pessimistic. Still, it is interesting to note that Michael Wilson has warned that growth will fall dramatically in 1985 and will have a significant impact on employment. He may be talking about lesser provinces, but I am concerned that the Treasurer, who is supposed to be reliable in these matters and has yet to be proved unreliable, still has that sort of booster approach when he tells the press that everything is fine.

It is true the Conference Board ranked Ontario as number one in economic development related to unemployment for 1984, but in 1985 the Conference Board rates us as projected number 10. That may account for the reason the minister is already taking swift kicks at them every time they stand still. For the Conference Board to rate Ontario's performance projected into the next year as 10 out of 10, after rating it as one out of 10, first among the provinces, is very serious indeed.

Another group we deal with in detail is one the minister will be aware of. It is called Informetrica Ltd. Does he know about them?

Hon. Mr. Grossman: Yes.

5:50 p.m.

Mr. Nixon: Does he? So do I. They rated Ontario not number one out of 10 this year, but fourth out of 10. That is in the rate of growth compared with the unemployment rate and general overall assessment. But, when they look at 1985, Informetrica Ltd., which the Treasurer does not kick every time it stands still, rates us eight out of 10 by projections.

The statistics available give us the projections from all sorts of sources. Some of them, no doubt, are better than others and as a simple farm boy I am not in a position to rate them. But such sources as Bank of Montreal, Burns Fry Ltd., Chase Econometrics Canada, Data Resources of Canada, McLeod Young Weir Ltd., Nesbitt, Thomson Bongard Inc., Royal Bank of Canada, Wood Gundy, Woods Gordon and so on, all of their projections, while they may be somewhat more optimistic than the Conference Board of Canada, certainly do not reflect the glassy-eyed optimism that the Treasurer treats us to every time he looks past January 27.

I am telling him, speaking on behalf of my electorate, I am concerned about his foresight. I wonder what the minister is going to do to relieve the concern I feel and that is also expressed by these multitudinous, independent resource concerns that also indicate Ontario may very well be 10 out of 10 in 1985 and not be moving forward dramatically as the Treasurer indicates. After all, the Treasurer just has a new deputy and a couple of people over there who have as yet to find page 22.

Hon. Mr. Grossman: Let me make a couple of points. I cannot help noticing that every election year the Conference Board of Canada makes us 10 out of 10. They did in --

Mr. Nixon: Will you go for eight out of 10?

Hon. Mr. Grossman: The last year we were 10 out of 10 was 1981 and things will no doubt work out just as well this year.

I think in terms of next year, and I want to make this point as clearly as possible, there are a couple of things to remember. First, when the federal minister says things like, "growth will fall dramatically," this has been an extraordinary year. The member has acknowledged my foresight was not as optimistic as even I thought it might be and that it will end up around five per cent.

When we look at the growth rates from 1979 to 1983, the average annual growth rate in Ontario was 0.8 per cent. This year we are having five per cent growth. That is really a staggering increase and far better than most people predicted.

What does that mean? It means this year we are far and away leading the rest of Canada. It also means, when the federal minister says growth will fall dramatically next year, that it can go back to more traditional levels which would be in the two, three and 3.5 range and still be very steady, secure growth. In fact, in my prebudget statement and in several public statements, I have indicated I think the best course for this province is steady, predictable growth over a period of years. By that, I mean in the two to four per cent range.

We could have what people would call growth fall dramatically below five per cent, in the two to four per cent range, and not have problems of any great nature. The reason is when people hear that growth will fall dramatically, they think there is going to be a recession next year or there is going to be negative growth, which we have seen, but that is not at all what I think the federal minister is saying. I do not even think the Conference Board of Canada is saying it will be negative in Ontario next year. What it is saying is that growth will not be as strong as this year and that is not only understandable but predictable.

Mr. Nixon: They say real growth will be minus one.

Hon. Mr. Grossman: They are, I can say with some confidence, wrong.

Mr. Nixon: I hope so. You know that, do you?

Hon. Mr. Grossman: Have I let the member down before? He said that in May when I predicted 4.7 per cent and it turned out to be five.

Mr. Nixon: I did not say anything.

Hon. Mr. Grossman: His leader did. He said there was no chance we would hit 4.7 per cent.

That is the first point I would like to make. People should understand clearly that next year's growth will not be five per cent. With all the public attention and fixation on economic indicators and figures, people should not think that because the rate of growth next year will be less than this year it indicates economic slowdown. It means there will be continuing growth. It will be at more predictable levels and in a quite safe range of two to four per cent. If we hit that target, we will be very happy.

Mr. Nixon: You have 11 per cent unemployment.

Hon. Mr. Grossman: We have 9.5 per cent unemployment.

Mr. Nixon: It is projected for 11 per cent next year.

Hon. Mr. Grossman: I do not project that.

Mr. McClellan: What do you project?

Hon. Mr. Grossman: We will make our predictions later in the year when we are more certain of them.

When we have a recovery that is quicker than those of the other provinces, as we have with five per cent growth this year, then in measuring next year I can say with some confidence that I do not think we will be 10 out of 10 in growth. The others have not received anywhere near the growth we have this year and they start on much lower bases.

They are just now coming out of the recession. They have not had nearly as much advantage and success as we have had. The other provinces, particularly those with smaller economies such as Newfoundland, Prince Edward Island and New Brunswick, could have growth rates well in excess of the two to four per cent range next year. I say clearly that I hope they do. They need it. They ought to have it. It is extremely unfortunate they did not have it this year.

To understand what we are talking about, the fact that next year those provinces will begin to share the great recovery we have had this year should not be taken to mean there will be any problem with our recovery next year. If we are 10 out of 10 next year in percentage growth, as long as our growth is in the two to four per cent range, and as long as the rest of Canada is sharing well in our economic recovery, there is no reason for the Treasurer of Ontario or any member of this House to be worried that other provinces are beginning to share equally in the recovery we have experienced this year.

Mr. Nixon: Are you now projecting two to four per cent?

Hon. Mr. Grossman: I could not say that, and I will not be saying that perhaps until our prebudget statement this fall. If we end up in that range, it will be quite a good performance.

Mr. Nixon: I do not know whether you understood my question.

Hon. Mr. Grossman: What figure did the member offer on page 22?

Mr. Nixon: On page 22, under main office down near the bottom there is an additional $106,000 justified only by the words "Under provision 1983-84." A decision must have been taken then that cost us $106,000.

Hon. Mr. Grossman: I stand to be corrected on this. We will check it for the member. As I glance at our briefing notes --

Mr. Nixon: Do you want to let it go until Friday when we come back?

Hon. Mr. Grossman: I think that is reflected in the increase in the prebudget consultation process, plus the addition of Mr. Jackman who joined us and staffing up for him. He has come from the Ministry of Health and has proved to be quite valuable. I think that largely accounts for that.

Mr. Nixon: What is the additional $51,000 under information services?

Hon. Mr. Grossman: I think that is accounted for by our beefed-up, prebudget consultation process where we took the prebudget process outside Toronto to several locations. That required staffing and some equipment. We got to 10 communities. I can only offer this to my successor if I am not in this ministry next spring that, if anything, those 10 visits to 10 communities proved to be extremely valuable, some would argue even more valuable than many of the meetings we held in our boardroom here.

Mr. Nixon: Valuable for what?

Hon. Mr. Grossman: Valuable in terms of ideas coming from those communities and giving those communities --

Mr. Nixon: Not valuable as in nice dinner parties?

Hon. Mr. Grossman: None whatever.

Mr. Nixon: "Transfer from another branch, $121,000 and $102,000." I will get to that Friday.

On motion by Hon. Mr. Wells, the committee of supply reported progress.

BUSINESS OF THE HOUSE

Hon. Mr. Wells: Mr. Speaker, before moving the adjournment of the House, in indicating last Thursday the business of the House for this week, I indicated we would deal tomorrow evening with the Public Libraries Act, Bill 93, and then with Bill 77 in committee of the whole. I am informed Bill 77 is not reprinted, so we cannot deal with it.

I am going to suggest that we deal with Bill 89 and Bill 91 after we complete Bill 93 tomorrow evening.

The House adjourned at 6:03 p.m.

October 29, 1984