Hansard Transcript 1986-Jul-03 | Legislative Assembly of Ontario

That in the opinion of this House, given the present trend towards ever-escalating court awards in the liability insurance sector and the resultant detrimental effect on the availability and affordability of insurance coverage, the government should consider placing legislated limits on court awards.

Mr. D. W. Smith: I am pleased to have the opportunity to present this resolution to the House and I look forward to hearing the many opinions and concerns my fellow members are sure to generate.

The present state of the world's liability insurance industry has been a popular subject of debate in the past year. Recognizing that the liability insurance sector is one of many facets and complexities, this resolution attempts to focus on only one aspect of this ongoing debate. However, while it is only one consideration among many, it is, none the less, an option which, if pursued, can only contribute to re-establishing some degree of stability in the liability insurance sector.

As members are no doubt aware, recent disruptions in the insurance industry are for the most part associated with the liability or third party insurance sector, as distinguished from first-party policies involving only the interest of the insured. First-party policies reportedly account for approximately half of all premiums written by all insurers, some $4 billion out of $8 billion.

While this portion of the insurance sector has been described as highly competitive, it is also characterized as operating in a relatively stable and orderly market. Risks are assessed, premiums charged and settlements paid out. Unfortunately, such is not the case in the liability sector of the industry.

In the words of Daniel Damov, past president of the Insurance Bureau of Canada, liability insurance "is another matter altogether. It is a field of constant change, reflecting public attitudes on matters of justice, fairness, entitlement, redress, quality of life and many other concepts that are no longer the sole preserve of social philosophers."

When we talk of public attitudes, I had an accident about 20 years ago, and it seemed back in that era people did not sue at the drop of a hat. I am sure with the accident I had and the time I was off I could have sued for a large amount of money, but that did not seem to be the attitude of 20 years ago.

Few would argue with such an assessment. Many would argue, however, over which series of events has most contributed to the present state of disarray within our liability insurance industry. Therefore, it may prove useful to review briefly some of the viewpoints and circumstances that are key to this issue.

Those speaking on behalf of the liability insurance sector maintain that the industry's investment income and existing premium schedules are no longer capable of absorbing an ever-increasing volume of underwriting losses largely because of high court awards. Anticipating a continuation of this trend, the insurance sector has in recent times undertaken a comprehensive review of its liability exposure. This has resulted in substantially higher premiums and the lowering or complete elimination of certain types of coverage.

A number of cities and municipal institutions across the province have seen their premiums increase anywhere between 100 and 1,000 per cent. Statistics show that in 1984, I believe, Canadian liability insurers took in $487 million in premiums and paid out $526 million in claims. Including expenses, these figures translate to $1.33 paid out for every dollar taken in.

In spite of these statistics and counter to those arguments put forth by the industry, there are those who see the industry as the architect of its own misfortune. Those who remain critical of the industry's management over the years cite a traditional over-reliance on both continuing high interest rates paid on reserves and continuing high inflation as major contributors to present problems. Further, they suggest premiums have been held unrealistically low and commissions earned have been attractively high. Another critic, Rod McQueen, made a more critical statement:

"What has happened is simply this. The insurance companies have been trying the same wrong-headed tactics on Canadians that banks adopted a few years ago. After the banks lost money on Third World loans, they socked Canadians with higher interest rates by increasing their spreads at home. From the mid-1950s to about 1980, the spread -- the difference between what the banks pay depositors in savings accounts and the prime rate, the interest level they charge corporate borrowers -- was a constant 2.5 per cent. About 1980, however, the banks began to increase the difference until it grew to twice the historical levels. Today the spread remains at a fat five per cent. The Canadian general insurance industry, seeing that the banks could get away with that kind of ripoff, adopted a similar strategy. As a result, Canadians are now paying for losses in other countries, even though losses in Canada have been low."

Regardless of which combination of factors one is most inclined to subscribe to, in my estimation it is difficult to ignore the link between ever-increasing court awards and the cost and availability of insurance coverage. It would appear to me also that if the companies raise their premiums too high too quickly, the companies will lose money as they lose clients. Examples of those are our fair boards, which are having a tremendous problem now, municipalities and school boards.

As the Hamilton Spectator indicated in February 1986, "The number of claims has increased 18 per cent over the past five years in Ontario, according to industry statistics, but the average cost per claim has increased a whopping 69 per cent."

Ted Belton, president of the Insurers' Advisory Organization of Canada suggests: "It was not too many years ago that a $1-million judgement was a headline-making thing. Now today, it is routine.... The fundamental thing is that claims costs, particularly for bodily injury, and uniquely in the province of Ontario, incidentally, have risen extremely rapidly.... And every time a new judgement sets a new precedent where it broadens the scope of liability, every existing claim has to be reviewed to see if there is a potential liability in it."

10:10 a.m.

Admittedly, much of the recent commentary has focused on one or two cases involving quite lofty awards. Likewise, those relatively few, highly sensationalized awards are still considered by many to be mere aberrations rather than precedents. Again, the statistics seem to suggest a trend in this direction.

Figures compiled by the Insurers' Advisory Organization of Canada indicate that the claim frequency per 100 vehicles has increased from 0.09 per cent in 1979-80 to 1.06 in 1983-84. More important, the average automobile bodily injury claim during the same period has reportedly increased from $10,500 to $17,587.

The problem is not so much the sporadic awards of seemingly high proportions, but the signals that such awards send to both the insurance industry and the public at large. While the often-cited Brampton case involving an award of some $6.3 million, a case which I understand is currently under appeal, is still considered the exception to the rule in this province, it has certainly sent a clear message to the insurance industry that it must fundamentally reassess its risk-capacity ratio.

The Insurance Bureau of Canada maintains that "large awards have affected people's expectations and that, in turn, affects out-of-court settlements."

A Gallup poll conducted in March this year seems to further strengthen this premise. In that poll, 18 per cent of Ontarians blamed higher premium costs on increased accident claims, 16 per cent cited increased profit-taking by insurance companies and eight per cent attributed recent hikes to the overall increase in the cost of living. No less than 46 per cent indicated that higher damage awards by judges led to higher premiums.

Many members are probably saying to themselves that 46 per cent of that sample population has regrettably fallen for the insurance industry's well-executed public relations campaign. I caution against such a hasty conclusion and return to the earlier assertion that public expectation has quite obviously played a role in the successive increases we have witnessed in liability awards. The relationship between present high awards and future settlement expectations is, in my mind, irrefutable. The resultant ripple effect is apparent.

The Insurers' Advisory Organization of Canada suggests that the unpredictability of awards has caused the crisis. In their words, "the uncertainty factor is throwing them for a loop. Underwriters cannot be sure what they are covering any more."

I have in front of me a list of actual cases which lend some credence to this claim. If the members will bear with me, I will run through a few examples of previously awarded settlements that are not only of questionable merit, but also may give new meaning to the word "award." Here are some examples from the Globe and Mail:

"A woman in Port Colborne, Ontario, received more than $210,000 in damages for physical and emotional injuries she suffered in a car accident that caused $36 damage to one of the vehicles involved. Calling the collision `a dramatically unspectacular crash,' the judge, none the less, awarded her $47,500 for pain and suffering, $140,000 for loss of income and $25,400 for medical costs. Her immediate family was also awarded $12,000 in damages.

"A youth in Windsor, Ontario, was disabled in a hit-and-run accident. Though his insurance had a $200,000 limit for accidents involving unidentified drivers, the judge ruled -- and an appeal court upheld -- that an unidentified driver was really an uninsured driver despite policy language to the contrary. The limit for uninsured drivers is $1 million.

"The husband of a Michigan woman killed in an Ontario car crash was awarded $920,000 for the economic loss caused by her death. Though the couple were childless, the wife was earning about US$30,000 as a high school teacher. The husband, who was not seriously hurt, is a civil servant."

I could go on and name some other cases, but I think the examples have been well made there. These cases and others of a similar nature show the necessity of examining the entire area of court awards. I believe that today many court awards do not represent a realistic attempt to compensate victims for their actual injuries and losses. Awards are sometimes not at all in proportion to the injuries sustained. To address this problem, I am suggesting it is time for us to review the adequacy of the present system of compensating injured parties.

As the members may know, courts in Ontario have placed a limit on awards for pain and suffering that amounts to $180,000 at present. The states of Florida and Michigan have just passed legislation limiting their awards to $225,000. I believe we should not only rethink our level, but also investigate the possibility of limiting the situations where awards can be made and limiting the maximum amounts that can be awarded for certain injuries.

It is possible this Legislature may have to limit awards for future care and lost wages to ensure that amounts awarded under these heads of damage are reasonable and rationally reflect the actual damages suffered by victims. Further, it is a matter not only of limiting awards in the sensational Brampton case, but also of limiting awards in the more routine cases where settlements are no longer proportional to injuries, having ridden on the coattails of the sensational cases.

I believe it is naïve to suggest that the present trend towards increasing court awards should be viewed separately and apart from the adjustments currently taking place in the liability insurance sector. That being said, I would like to highlight a few of the less radical options which have the potential to exert at least a moderating influence on escalating awards. As a matter of information, all these options are addressed in some detail in the Slater report on the insurance industry.

First, there is the matter of prejudgement interest as it applies to the Courts of Justice Act. As the Slater report indicates, more plaintiffs are now delaying the expeditious resolution of their claims to maximize the prejudgment interest award. In turn, this contributes to the difficulty in predicting necessary reserves and overall premium schedules. Suggested amendments to existing legislation "would provide that prejudgement interest for noneconomic losses in personal injury cases would not begin to run until sufficient medical information has been provided to the defendant, or until the plaintiff has made himself/herself available for medical examination."

Second, there are concerns relating to an injured victim's right to receive benefits from more than one source such as private disability insurance, public assistance programs and others. Known as double recovery, such occurrences are seen as contributing to waste and duplication. Various proposals have been put forth which would work to limit benefits received from collateral sources.

A third proposal outlined in the Slater report, which again involves amendments to the Courts of Justice Act, would allow the courts the discretionary power to impose "a structured settlement" in lieu of a lump sum payment. Such an amendment would effectively deal with the difficulties and uncertainties associated with the tax gross-up component reflected in lump sum personal injury awards.

Finally, there are the often-repeated concerns relating to clause 61(2)(e) of the Family Law Act, 1986. This provision, which allows for "the relatives of an accident victim to recover damages for loss of `care, guidance and companionship'" has been identified as instrumental in numerous and, as the Slater report indicates, "often trivial claims by distant relatives."

A report released by the Canadian Bar Association in April this year suggests "the problem is that unanticipated insignificant claims were advanced and...paid which were not intended to be within the ambit of the legislation." The recommendation in the Slater report is straightforward: "Amend the provision to limit recovery to those cases where the loss of guidance, care and companionship was shown to be `serious or permanent.'"

I would be the first to admit that there are numerous ramifications associated with the aforementioned proposals. That should in no way dissuade us, however, from moving towards such reforms in situations where they are so obviously needed.

10:20 a.m.

The members of this House may be familiar with a recent Court of Appeal decision which has recognized the need to place some limits on the size and extent of court awards. The original decision, based on a 1981 traffic accident that killed two people and injured several others, awarded damages totalling $3.15 million to seven plaintiffs. That decision was based on the perception that the policy's limit of $1 million applied to each claimant involved in the accident. The Court of Appeal reduced the award to $1 million, indicating that a $1-million car insurance policy is worth only that amount and should not be interpreted as meaning $1 million for each person killed or injured.

No one would deny an injured party's rightful claim to fair and adequate compensation. Likewise, we must recognize that in certain circumstances injured victims are, in the absence of insured compensation, cared for in the end at public expense. However, we must ask ourselves whether society can afford the financial burden of such an extensive and all-encompassing liability insurance system.

I believe the resolution before the Legislature, if it does nothing else, attempts to inject some degree of realism into the decisions facing the liability insurance sector and the people it is designed to protect.

Mr. Speaker: You are reserving about one minute and 25 seconds.

Mrs. Marland: I appreciate the opportunity to speak this morning with regard to the private member's resolution suggesting that we should have the government place legislative limits on court awards as they pertain to liability insurance. I recognize there has to be an answer to this problem and, having read the Slater report, understand the concerns of many of the varied groups that made submissions to be included in the comments of the Slater report.

When we talk about legislating limits of awards, I know it looks as though we are invading an individual's right to sue as it pertains to the amount. I recognize that may raise a question on its own, especially with the legal profession, and perhaps with the individual who is seeking some form of compensation for any number of causes and justified reasons.

Recognizing that there has to be an answer to the problem as it exists, because we obviously cannot continue with the situation as it is because we are getting to the point where the affordability of liability insurance is becoming a major question for a number of people, both from a business perspective and even a recreational perspective, I am not sure that limiting the amount of the award is the answer. I am wondering whether legislating the limits of liability may be the answer. When we talk about legislating the limits of liability, there should be a further study done as it pertains to the areas for which any two parties may be liable.

If we take, for example, as the previous speaker has mentioned, the now infamous case in Brampton, we can extend that scenario a little further to where there have been other cases, albeit not in the amount of $6 million, involving private property that is signed and fenced but still intruded upon. Where there was a serious accident, as there has been, and a suit followed, compensation has been awarded, although the intruder has been trespassing.

Also, in the case examples we have had through the new Family Law Act, we seem to have a selection of choices of legal action pertaining to liability insurance that can go on ad infinitum to where ultimately, it has been said, children could turn around and sue their parents at some time in the future because they did not have enough love, care and direction when they were young and, consequently, as they grew into adulthood, they developed all kinds of problems. They, in turn, could be sued as parents with that kind of responsibility. That sounds exaggerated, but under some aspects of that act, it will now be possible to pursue that kind of direction.

We recognize that the North American continent, in particular, has become a very suit-conscious nation. That is well demonstrated by the fact that people nowadays hesitate even to stop to assist a fellow citizen in an automobile accident. It has been known that the injured victim of an accident has turned around and sued whoever it was at the scene who, out of willingness to try to help, moved that person when he or she should not have been moved. There are other similar examples.

We have now got to the point where, if a member of the public falls down the steps of a public building, the first thought is: "I must sue them because they are the corporation of a large municipality. They have unlimited coverage, they have unlimited funds and maybe I can get some money out of it." However, if that person were to trip down his neighbour's step and receive a similar injury, knowing his neighbour does not have the substantial financial security and background from which to draw in the case of a liability settlement, he would not bother to sue.

In part, the mentality of the public, as we view liability suits, has brought about the situation we are dealing with today. It is very important that we look to personal income tax reform as it pertains to liability insurance settlements because, obviously, a large upfront insurance settlement has to be automatically doubled right from the beginning in order to meet the penalty with which that individual is faced in terms of personal income tax. The federal government should be encouraged to recognize that is an area which needs some reform.

I have a manufacturer in my riding of Mississauga South who is the sole manufacturer for a very small part that is used in the automobile carburetors of a US automobile manufacturer. When the liability insurance crisis was on during the latter part of last year, he lost all his export trade and had a serious consequence to his business because the US automobile manufacturer would not accept that product imported in the United States, manufactured in Canada, without the liability insurance being in place for that Canadian -- in fact, Mississauga -- manufacturer.

That is another area where liability insurance affects the businessman. It certainly affects people from a recreational point of view in terms of all kinds of use of recreational equipment. That has recently been quite well demonstrated by the concern about whether the Canadian National Exhibition would have some aspects of its midway entertainment available to the public. Until it decided to make the investment in its liability insurance, it did not know whether it could secure that protection for the public.

I can go on listing numerous areas of concern on this subject, such as the entertainment industry. The concern about personal automobile insurance goes without saying. I have mentioned manufacturers, in particular exporters who have had requirements put on them that are outside of our country. There are also retailers, wholesalers, service providers, contractors, builders, print publishers, radio and television broadcasters, municipalities and all levels of government. We are included.

10:30 a.m.

We see the concerns that are raised over and over again. It certainly comes through that we are dealing with affordability for the individual and with accessibility. There are cases where liability insurance simply is not available -- it is actually being refused now and it has never been refused before -- or if it is available, it is simply not affordable. It ends up that the individual, the group, the business or possibly, in some areas, the municipality is not able to provide the insurance. They simply cannot afford it.

If the answer is to legislate the limit of awards, then I will support the resolution. I have decided I will support the resolution at this stage because I see it as the only vehicle by which to get further answers. The Slater report is only the beginning. It is a statement of the requirement and the great need for greater answers to the liability insurance crisis as it is today. Unfortunately at the moment, the insurance industry is being blamed, whereas perhaps it is not the insurance industry that should be blamed but our whole cycle of society. Perhaps, through causes beyond our control, we have become greedy in our terms of need and settlements. With the whole matter under further review, we will have a complete answer in the future.

Mr. Swart: I want to tell the member for Lambton (Mr. D. W. Smith) immediately that I am not going to be supporting his resolution because his resolution does not deal with the real, massive problems causing Ontario's crisis in insurance. In this resolution, the member for Lambton is simply playing the insurance companies' game. He is placing the whole responsibility for the current horrendous situation on high court awards. I am not going to play that game with him when he is taking the side of the insurance companies against the victims.

If the member had done his homework, he would know there are four causes for the unavailability of insurance and the skyrocketing rates. The first is the unreasonably low rates previously. The companies did lose some money on liability insurance. That was their fault. Second, there has been some overall moderate increase in settlements. Third, there has been the withdrawal of coverage by the reinsurers whereby the direct insurers have panicked and raised the rates to account for that. Fourth and most important, there has been a blatant and massive gouging of public businesses and organizations by the insurance companies.

Yet the member picks out only one of the causes and the most insignificant one at that. Surely the member must know that liability claims are up only marginally in this province and in this nation. From 1983 to 1984, liability insurance claims in Ontario, according to the superintendent of insurance, went up from $243.6 million to $249.1 million, an increase of only 2.3 per cent. Just recently, Statistics Canada released figures showing that between 1984 and 1985 claims, including the cost of claim settlements, went up by only 11.2 per cent, which is only 13.5 per cent in two years.

The member stated in his comments that $1.35 was paid out for every $1 received in 1984. Surely the member must know that did not include the interest on insurance companies' investments, which amounted to $1.37 billion, and surely the member should have stated that the figure of $1.35 included claims adjustment costs. Statistics Canada shows that in the first quarter of this year the loss ratio of claims versus premiums, not including insurance, was 64.5 per cent. If one includes investment income, they took in twice as much on liability insurance in this nation in the first quarter of this year as they paid out.

Yet liability rates went up a year ago by an average of 200 per cent, and the second round this year is almost as great as that first round. The Ontario Hospital Association has had an increase in insurance rates for its 125 members from $3.5 million two years ago to $40 million this year. Premiums for liability insurance alone for the Durham Board of Education this year went up from $63,000 to $217,000.

Fall fairs are likely going to be cancelled because of the increased rates or unavailability, and even our Canada Day celebrations in many parts of this province were cancelled because they could not get insurance. What a condemnation of the system in this province, caused more than anything else by the inaction of the Liberal government and the Conservative government before that with regard to insurance, that we cannot even celebrate Canada Day. What power the insurance companies have in this province.

The member for Lambton brings in a resolution to cap the awards when the minister in charge of insurance in his own government refuses even to investigate whether the unavailability of adequate liability insurance and those kinds of horrendous increases are warranted. What a facade. What a joke to bring in this kind of resolution when his own minister is not even investigating whether the insurance companies are levying unfair and unreasonable rates. The resolution even misses at least the two specific areas of reform which are not really caps on awards, the gross-up and the structured awards, which could be changed by action of his government to cut these so-called massive awards down to two thirds or even half without cutting back at all on what the individual receives.

The real situation is that the insurance companies are blatantly and massively gouging the public. The member for Lambton is aiding and abetting them by this resolution, as his Minister of Financial Institutions (Mr. Kwinter) has been doing for almost the past year. If I sound angry, it is because I am. People are being hurt. Businesses and organizations all over this province are devastated. The member and his minister stand in this Hsouse as apologists for the insurance companies.

We saw and heard all this on our tour during six or seven weeks this spring. Volunteer organizations, fair boards, social agencies and businesses, large and small, are cutting back on services and not holding events because of this insurance crisis. Even families are being split up.

We heard from Pat Gushing in Windsor, who has two sons. One was involved in a series of accidents, and his insurance went up to $8,000. He had a Corvette. What happened to the father who lives in the same home? The father's insurance tripled as well. The two sons moved out. One went to a university in British Columbia. He changed universities from the one at Windsor. His insurance, which was $2,600 here, went down to $700 in British Columbia.

I have a letter in my file which I received two days ago from a man in Niagara Falls. His son has moved out because he has had accidents. His insurance rates have quadrupled, and the father's were going to go up very substantially. The situation is even breaking up families.

Does the resolution of the member for Lambton do anything to solve the seven major problems in auto insurance, the excessive premiums and escalating rates, the arbitrary cancellation and refusal to renew insurance?

In Welland, insurance for literally dozens of motorists was cancelled because of a hailstorm that happened there. Discriminatory rate increases are applied for frivolous reasons. All drivers and households are penalized because of one driver's record. Young male drivers with good records are victimized by rates three or four times the average. There is a growing number of people driving without insurance in this province, some 200,000 now, and because Ontario's no-fault coverage is extremely limited, there are long delays in compensation and unfair settlements to accident victims. The resolution does not do a single thing about that.

Does the resolution do anything to solve the problem of the 40 to 50 per cent of people who get no compensation from disabling accidents? No. That could be solved by a New Zealand style of no-fault accident insurance coverage.

Does the resolution do anything to solve the real problems in liability which I have mentioned? No, it does not. Does it do anything to change the tort system, which is the main reason for any undue increase in settlements?

10:40 a.m.

Does the member know what is needed in this and what his resolution should say? We need five major measures implemented in this province, and his government has the power to do it. We should have:

1. A government insurance corporation, in which compulsory automobile insurance will be a major part, selling liability and general insurance in competition with the private insurance companies;

2. A comprehensive risk-sharing system for insurers through insurance pools and exchanges, and a government-organized reinsurance corporation;

3. A rate control board to examine and rule on all requests by insurance companies for increases in rates. They should have to justify them;

4. Certain limited reforms in the structure of court awards, the two that I have particularly mentioned;

5. A long-term basic, publicly operated, comprehensive, no-fault accident and sickness plan.

If the member wants to do something constructive, then he should dry his crocodile tears and put immense caucus pressure on the minister to establish a public insurance corporation such as Manitoba, Saskatchewan and British Columbia have. They do not have these problems out there.

Finally, I want to send the member a copy of an insurance report, so he will not only know what the problems are but will also know some of the solutions.

Mr. Knight: The member for Welland-Thorold (Mr. Swart) certainly is not timid in stating his position. I would hope, however, that I speak for the majority of this Legislature when I reject his suggestion that we institute a public insurance corporation in Ontario. That is not the answer to the problems that are being suggested in the resolution by the member for Lambton.

However, I suggest that although I do agree with the underlying concern that the member for Lambton mentions in his resolution, namely, that we need to take a long, hard look at our present system of compensating accident injuries, I cannot agree with the solution he has suggested. It is too simplistic, and there is an error in fact in the resolution as stated.

Currently, as far as court awards in Ontario are concerned, there are three basic components. We have our noneconomic components, general damages and the pain-and-suffering components. We then have the economic-loss section referred to as special damages. The other component comprises such things as our Ontario health insurance plan subrogation, our gross-ups for income tax purposes, our prejudgement interest, cost and other components other than the definite pain-and-suffering awards and the economic-loss awards. In Ontario, we do have a cap on those noneconomic losses.

In 1978, after reviewing three particular test cases, the Supreme Court of Canada suggested, and it has been the norm in court awards since then, that the limit on noneconomic losses be $100,000. Through inflation, that has now increased to $184,000. We do have a cap on that particular component of court awards for accidental injuries.

As far as the economic losses are concerned, I do not believe that under the present tort system we should have a cap in as much as the future earnings, the care that needs to be provided, the potential renovations to houses that are necessary to accommodate those that are severely disabled, should be compensated fully under the present system.

I do think, however, and the Slater commission has noted in the report which it presented to the government, that as far as interim solutions are concerned, some tort reforms may be possible. They certainly should be considered. Some of those suggested reforms have been mentioned by each of the speakers previously. I would like to review them again.

One is the prejudgement interest consideration, not that prejudgement interest should be abolished as such, but the rules should be changed to determine more properly when the interest should begin to be calculated to avoid plaintiffs delaying settlements by such methods as not producing very necessary medical information, with a view to increasing the size of their awards.

Also, there should be a review of the collateral benefits that are at present excluded in loss calculation to avoid the problem of double recovery. However, I suggest these collateral benefits be the ones received from the public as opposed to the private sector.

The subject of gross-ups has also been mentioned. Either we petition the federal government to change the income tax regulations or, as the alternative, a mandatory structured settlement should be imposed to eliminate the necessity of the gross-ups.

Another suggestion that is not in the Slater report, but which I advocate, is a review of the desirability of continuing subrogation rights of the Ontario health insurance plan. In my view, it is a bit of a paradox that we have universal health care; yet with the subrogation rights of OHIP, one group in society shares disproportionately in the cost of our health care system.

All these tort reform suggestions make only a modest difference to the cost and availability of insurance. I believe, and it was mentioned in the Slater report, it is important to recognize our tort system has gradually evolved to one of compensation as opposed to deterrence. Society is demanding that we find a better way to provide that compensation.

In his report, Slater has recommended that we seriously consider eliminating the present tort system and compensate accident victims in the future on a first-party, no-fault basis. He further suggests we extend that compensation mechanism beyond car accidents and work towards a universal disability compensation program. I think his recommendations in the area of no-fault coverage deserve further consideration. I recognize his report to the government was commissioned and is not a document of government policy. However, it should be considered seriously; there are some good suggestions in it.

Simply put, our present system no longer fulfils the needs of society. For those who remain sceptical, and I address my remarks to the Advocates' Society in particular, I point out there are 22 states and six provinces that have some form of no-fault insurance at present. Fourteen of those states have a pure no-fault system, and Quebec and Saskatchewan have the same in Canada. In Ontario, we have a form of no-fault insurance with our section B benefits under an auto policy. It is suggested that the no-fault insurance Mr. Slater refers to would be an extension of those first-party benefits to compensate accident victims properly.

10:50 a.m.

For the sceptics, I refer to the United States Department of Transportation study, Compensating Auto Accident Victims, which compared tort liability jurisdiction awards with no-fault jurisdiction performance over the past 15 years. The study presents statistical proof of the merit and workability of no-fault insurance. I recommend it to each member. It shows that under a no-fault system compensations to victims are higher and payouts are made far more quickly. No-fault insurance is a considerably more efficient system. Probably the best benefit is that no-fault systems relieve courts of suffocating case loads. Witness what we have in Ontario.

In summary, although I support the call for interim tort reforms and a careful consideration of Slater's recommendation that we adopt a better compensation system, that is, a no-fault, first-party compensation system, I cannot support my colleague's resolution. Unfortunately, we have to vote on the resolution as it is worded rather than voting on the comments of substance which might support that particular resolution.

The fact of the matter is that the resolution states we should put a cap on liability insurance awards. At present, we do have a cap with respect to the noneconomic portion of the award, and unless we get into proper tort reform and a no-fault system, the economic losses are justifiable because each and every victim has a right to ensure that he has the proper financial compensation for the losses he received and proper financial compensation for the expenses he will have in the future.

Mr. Runciman: I want to commend the member for Lambton for introducing this resolution. It is an opportunity for all members of this House to express some concerns and views in respect to what is really a liability insurance crisis in the province, a crisis that has been inadequately addressed by the current government and is inherent in the resolution placed before the House by the member for Lambton.

Many in the insurance industry and others were warning the government last August of an impending crisis, but it failed to respond until that crisis was upon us. In my view, the response at this stage has been slow in coming and inadequate. The member for Halton-Burlington (Mr. Knight), who just spoke, was talking about automobile insurance and a no-fault system. That was one of my concerns arising out of the report of the Slater task force. So much of the task force report seemed to centre on automobile insurance and the proposal for a no-fault system rather than addressing the real crisis in general liability. There was some reference to that, but it seemed to me that how to address that particular problem should have been the main thrust of the Slater task force hearings. It was glossed over and the emphasis was on designing and implementing a private sector, no-fault auto insurance program, and that gained the greatest amount of press and public reaction.

I do not want to indicate that I am speaking for my party on this, but I and other members of this party, many of us on this side of the House, have some real concerns about no-fault insurance. There is a perception out there that it is a first step towards the socialization of the insurance industry and government-run insurance. It certainly makes government intervention that much easier.

I have to propose that the government and others in this House consider the implications of a no-fault system very seriously. In my own riding, I have had very few complaints in respect to automobile insurance rates. I cannot recall receiving one in the past four or five years; so I have to wonder out loud about how much of a crisis there is in respect to automobile insurance.

We know the socialists, the New Democratic Party, are attempting to create a public perception that there is a crisis and they are going at individual cases of concern in the province. I grant there are some, but they can be adequately addressed in ways other than simply jumping into the no-fault bed. It is something we have to look at very seriously.

In any event, tort revisions are appealing to me and to many who have taken a close look at the crisis in liability insurance. As many members will know, a number of options are being considered by the Ontario Law Reform Commission. The member for Lambton may be aware of that. Revising the tort system to rationalize the environment that industry faces with respect to injuries will be helpful -- there is no question about it -- but another major area that has to be addressed in respect to following along tort revisions is the need to reacquire reinsurance from London and other reinsurers. That has been a real problem.

One of the things I have looked at, and I know a number of people in the industry have discussed with me, is approaching the reinsurance industry and providing a convincing case that Canada is an environment different from that of the United States and one in which insurers can price effectively. I suggest today to the government, through the member for Lambton, that to facilitate the presentation of this case, the government should look at working in close co-operation with the federal government and the industry to establish a working group, to be composed of people from the insurance industry, the judiciary, the bar, the federal and provincial governments, small business and consumer advocates. I also suggest the group meet privately without fanfare, closet themselves and work out options and proposed solutions.

I have talked to officials in the industry, and they believe conclusions reached by such a group could be accepted by all. The goal of the working group would be to agree on a course of action to facilitate a predictable environment for the insurers and to come up with a presentation that would convince London that our parameters are safe enough to offer reinsurance at affordable rates. Industry officials have assured me there would be much to talk about and any solution could be implemented within three months. We are not talking about an extended time frame here at all.

Some of the tort system revisions should be looked at, and in some instances they are being looked at. I will touch on a couple of them. We talked about the Slater task force, and many will be talking about it. I hope some action will be forthcoming as a result of the task force and the submissions the minister has asked for up to July 31, and amendments to the Family Law Reform Act, now the Family Law Act. That seems to be an area where all who have some expertise in the field feel changes are merited.

In 1978, the FLRA gave an injured person's family the right to sue a wrongdoer for the financial expenses incurred by family members and for the loss of the guidance, care and companionship of the injured person. The right to sue is restricted to the immediate family. An amendment to the Family Law Act could be introduced which would further restrict this right only to the very seriously injured.

Mr. D. W. Smith: I want to thank the participants in the debate on this resolution. I have one response to the member for Welland-Thorold. The minister stated in the April issue of the Canadian Underwriter, "Personally, I am not in favour of government insurance, but I want the task force to look at it because this may be a viable alternative." We are looking at it, and I want to state that.

11 a.m.

I also want to mention a constituent of mine who had trouble getting liability insurance this year on spraying. Last year he paid $500; this year they asked him for $3,500 for the same premium. Working around with the different insurance companies, we were able to get that insurance for him for $250, which I found almost unbelievable. If we look around, we can find companies out there that are still negotiating. I do not want to see the government having to get involved, but the message has to go out that things have to change a bit or else a lot of people are going to be out of business and a lot of events we have become accustomed to are not going to take place.

SMALL BUSINESS IMPROVEMENT LOAN

Mr. Wiseman moved resolution 45:

That in the opinion of the House, the government, through the Ministry of Industry, Trade and Technology and the Ontario Development Corp., should make available a small business improvement loan. The purpose of this loan would be to assist businessmen who have been established at least five years to renovate or enlarge their premises and allow them to upgrade existing fixtures. The loan, to a maximum of $50,000, would be payable within 10 years, with a loan under $25,000 to be repaid in five years, at an interest rate of two per cent lower than prime. This initiative would provide Ontario's service industry with a means to improve its facilities without penalizing present borrowing rates while increasing business and enhancing consumer conditions.

Mr. Wiseman: I bring forward and speak on this resolution because I feel I have earned the right to do so, having been a small businessman for 35 years in an owner-operated business. I spent a good part of that time as chairman of the retail merchants in my area. In the past 15 years, I feel I have earned the right, because a lot of my constituents have come to me with suggestions for something similar to what I am recommending today. With my years of experience as a member and my years in the business field, I feel I have earned the right to speak on it.

I would like to share with the members some of my reasoning for bringing this forward now. The $50,000 maximum falls into the category that most of the people who have come to see me have had in mind. Some may feel it is a little low, but $50,000 should cover the needs of most of the people I have seen.

Five years spent in business will eliminate people who have an idea but who have not had business experience. It might also eliminate some bankruptcies or losses of money that the government might find itself involved in if it were in a scheme of this sort. The five years would be a protection for government. Anyone who has been in business for five years will not let it go down without a lot of hard work.

The two percentage points below prime is justified to give the service industry and small business a shot in the arm. Many people in small business have been trained by the owner-operators of businesses. Many people out in the field today have had a lot of money spent on them in secondary education, colleges and universities. For the most part, these others have not had that money spent on them. The government is spending $150 million on retraining people, but that will not retrain the people I am talking about this morning; they are trained on the job by the owner-operators.

If the loans are administered by the Eastern Ontario Development Corp., the Northern Ontario Development Corp. or whatever, a lot of people will not be needed to administer this. I believe it could be done by a couple of people. It would be their job to review the applications before they went on to the bank for the loan guarantee. It would work two ways. We used to have a program with the Ontario Development Corp. where it went out and assisted small businesses in looking after their cash flow and one thing and another. That worked well for the first time around, but there was no follow-up. This way, they would build a rapport with these people from the ODC that would carry on after the loan and would help small businessmen to look after their cash flow, their purchases and so on.

The benefits I see to government would be the added sales, the seven per cent in sales tax and added employment.

Going back to my own experience, every time we restored one of our businesses, business increased; not only in sales but to the point where we had to hire a part-time or full-time person. Those jobs, as we can see by taking the two per cent off the prime, are a lot less expensive than most of us know it is costing to create jobs in industry. I am sure the present government is looking very favourably at some sort of assistance to industry, whether it be loan guarantees, interest-free loans for certain periods or a grant. Those jobs are costing $25,000 to $30,000 or more per job. Many of them are in some sort of trainee position; they have to pay for training at the end of that time as well. This would help in that way.

I mentioned the seven per cent sales tax.

We also know the people from whom we buy those goods might have to enlarge their staff at the factory where it is produced, and all the goods and services that go into whatever commodity is being sold. Again, that is a payback to government. In communities the size of the towns I and many of us have in our ridings, it would help in the goods as well as the other fixtures that go into repairs and alterations. Carpenters, electricians, people in the lumber yards and so on all benefit by that, and each time they do, the government gets a payback of the seven per cent or the added employment, which probably puts them into a better tax bracket as well.

The federal government has a program I was not aware of when I brought this forward. I went in and talked to two bank managers last week and I asked them about the federal program. They thought at first it was similar to what I am recommending here, but when one looks at it, it is not.

The federal program is one per cent above prime and, over and above that, one has to pay a startup fee to the bank of $500. One probably has to have one's place remortgaged. The bank wants a first mortgage on that, not a second; so if one already has a first mortgage, one has to arrange to have it stood down to a second and let the bank have the first.

11:10 a.m.

I said: "Be honest with me. On a small loan of $25,000 to $50,000" -- and the federal program's goes to $100,000 -- "how much upfront money would it cost a small businessman to get started in that?" It is a minimum of $1,500, over and above the one per cent above prime. I said: "Tell me one thing further. Have you given many of these?" Both bank managers said: "No, we have not given many of these. We only keep it to use if we are a little shaky about lending it to this person; we are guaranteed 85 per cent of what we loan out."

Looking at that program, it is much different to what I recommend here. This would be a loan guarantee. Many of us here, the member for Grey-Bruce (Mr. Sargent) and a few others, know what it is like to go to the bank and have the manager look at our statement and set our credit for the year, whatever that credit might be for operating.

Going back to when I started from a pretty humble beginning and needed every penny to get ahead, I found from personal experience when I started to renovate my places, as I mentioned about every 10 years, I had to rob Peter to pay Paul. I took away from my operating money to do the upgradings. I might have got away with that in the past because of interest rates and one thing and another, but with interest rates fluctuating as they have in the 1980s, I do not think one can do that today.

Small businessmen have got themselves into problems in the past because they have borrowed against their operating money to enlarge or upgrade their premises and then found they did not have the money to buy the goods and services to help to pay the added wages plus the added cost of paying off the loan for upgrading their premises.

I have done a survey in my riding through some of the newspapers. I was pleased that many of the small editors went out and talked to the businessmen along the street and asked them what they thought of this program. For the most part, it was very well received. They all said they had never had any assistance to help them in their business in the past and they thought it would be a good thing, that the government should do it and that the cost of setting this up would be minimal.

I have jumped around in my notes, but I feel that talking from the heart and talking from experience is the best teacher. As members look this over and talk about it, if they have any questions to address in their remarks, I hope they will do so.

Speaking as a member sitting in my office listening to people who come in to ask me for loans, or whether there are any loans available, I find some of them are in grey areas. We always send them down to the Eastern Ontario Development Corp. in my area to see if they qualify, but the majority of them do not. Many of them are the small businessmen I have mentioned here this morning, who fall into the category of this $50,000-loan guarantee.

It is frustrating, and it must be frustrating to other members in the House, to have to say to these people: "I am sorry. We have done a lot to help businessmen in the government, but we do not cover that part. Wse cover industry, secondary industry or tourism, but we have never done anything for the very small businessman." I am talking about people with probably fewer than 10 employees, but it could go even a little higher than that.

I hope all members will support this resolution. I know the government will be looking at the cost of this program. I am fully aware that we should keep costs in mind and I have always, throughout my 15 years in government, tried to hold costs down. I believe if they look at it in the way I think they should, they will see this program will not cost a lot of money.

As I said before, it will cost much less than it costs industry, where it costs $25,000 to $30,000 a job. There would be no training by the government, no added expense; training in most cases would be by the people on the job. There would be added jobs, incentive, more sales, with the sales tax paid back to the government. With the added jobs and the payback to the government, I believe it is well worth while. I would be interested in hearing what the other members have to say. I know I still have a few minutes left, but I feel we might as well give them all meat and no potatoes.

The Deputy Speaker: Thank you. That means you are reserving the remainder of the time for your windup.

Mr. Ramsay: I appreciate the resolution today from the member for Lanark. As a fellow member with constituency work, I especially appreciate his concluding remarks. I too have small businessmen coming into the office and I find that when one goes through the programs, many small businessmen seem to fall through the cracks of the various programs we have.

It is very frustrating. If one is starting a business or if one is in the right line of work, there seem to be some programs there to help; but if one is basically in the service industry and the business has been in existence for a couple of years and one desires to expand, these are the people which own the bulk of small businesses and seem to be in trouble in getting any sort of government aid.

I support this resolution wholeheartedly and I encourage other members of the House to do so. It would do a lot for the growth of this province if we had this type of program. It is not a grant, because small businessmen do not want grants, but they would like to be able to borrow at a reasonable rate. What we have had lately are interest rates running at basically seven per cent above inflation. In real terms, we have very high interest rates still in this growth economy we have now and it is still a hindrance to many small businessmen who want to enlarge or expand their operations. With that comes greater productivity and growth in the number of jobs Also, as the member for Lanark says, there are greater returns to the government in the form of sales and small business taxes.

It is frustrating for small businessmen. They feel bitter because they have made it on their own and now would like to expand. In some cases, they would like to expand because there is a new business just down the road that got started through government money, and they feel bitter about that. That is understandable because they have been in the community all those years and have established a business, and now someone from the town who has received new money from some new program comes in. They do not feel that justice has been served.

There has to be something for the people who are there, who, because of competition, want to expand their businesses. It is frustrating because there are many programs. We have a plethora of programs in the province, but I find so many people who come to my office fall through the cracks of all these programs.

The member mentioned the Ontario Development Corp. We in the north have our own, the Northern Ontario Development Corp. , as he has his in the east. It deals with export sales, plant and equipment expansions, product improvement, particularly in high technology, and tourism. Again, these are not for the bulk of small businesses which service the service industries.

The new government program, the small business development corporation, is again primarily engaged in the manufacturing processes and tourist activities, book publishing, research and development, the development of computer applications or systems software, mining, forestry, etc. What about the average small town business that has three or four people? Maybe it is a furniture store and it would like to expand into a bicycle repair shop and have some capital to expand its facilities. There is nothing for those people.

Programs especially designed for the north, such as the northern Ontario regional development program, for instance, are good for the people they serve, but so many of these small business people fall through the cracks of these programs and are not included.

11:20 a.m.

It is wrong and it is hurting the economy. We have a group of business people who create the bulk of the jobs in this province. According to a Department of Regional Industrial Expansion study, small and medium-sized businesses had a net job growth of about 375,000 between 1978 and 1982. In contrast, big businesses created fewer than 50,000 jobs during the same period. This is specifically targeted to the people who are the generators of job creation in this province and this country.

If we look at tax breaks, the deductions, exemptions, write-offs and credits for big business increased in the last few years while they declined for small business. We have not been paying attention to small business people. The effective federal tax rate for smaller firms remained relatively unchanged at about 22 per cent between 1977 and 1981. The effective rate for big business declined from 18 per cent to 14 per cent. We seem to be giving all the breaks to big business and not to small business, and that is wrong.

If we look at job growth, in companies with one to 19 employees the percentage of net job growth was 86 per cent between 1975 and 1982. It is that very small businessman who seems to slip through all these programs; yet he is the person who creates most of the jobs. For instance, if every small business in Ontario could hire one additional employee, we would create 250,000 jobs. To put that in perspective, we would accomplish the same thing as setting up six companies the size of General Motors, and it would be much easier. Lending money at a reasonable rate is a very cost-effective way to stimulate job growth at no real cost to the province.

I have many case studies in my file of people who are not served by the program today. I received a letter a few months ago from a person in Englehart who had started a small country store on his own a few years ago. He would like to expand because a new establishment has received a grant to start up; yet he cannot get any money to expand in competition with that other business which got started with government help. These people see a real injustice in the system, and I think they are right.

A program like this is reasonable and cost-effective. It would generate jobs and other income for the province. It would stimulate a lot of growth in a very simple way and encourage a lot of people to go into business for themselves. It would encourage those who are already in business to expand and provide jobs for other people in this province.

I encourage other members of this House to support this resolution. I certainly do. Let us hope when the votes are counted at 12 o'clock today this motion passes.

Mr. Ferraro: It is with great pleasure that I rise to speak on this proposal by the member for Lanark. He has a right to speak on it because of his interest and experience, first and foremost in small business.

In that regard, let me say I suspect my background, which has been in the area of banking, mortgage lending and personal loans for the past 13 and one half years, gives me some right to speak on it. As the parliamentary assistant to the Minister of Industry, Trade and Technology (Mr. O'Neil), I am furthering my interest in that regard. If the House does not know, I have two other titles: chairman of the committee of parliamentary assistants for small business and small business advocate for Ontario. If I get another title, I can legally be declared a library.

Mr. Ramsay: Conflict of interest.

Mr. Ferraro: In this particular case, I may have a conflict of interest, but I think it is one that is acceptable to all members of this House.

The member speaks from his heart and his experience. I was listening intently when he spoke. Quite frankly, I had not made up my mind whether I was going to support him or not. I was leaning towards not supporting it to a small degree and I hope I will be able to justify that in my ensuing arguments. I know this is private members' hour, but if I could vote entirely on the basis of sentiment or intention, it would be without hesitation. It is the content that I have some concerns with.

A small business in Ontario has fewer than 100 employees. I could go on and give statistics for the next 10 minutes. There are roughly 315,000 of them, employing 1.7 million people and affecting the livelihood of 4.5 million people, when one counts the families in Ontario, or roughly half the population of Ontario. In the past 12 months, 99,000 new small businesses were created. There were 185,000 new jobs created in the past year, generating more than $500 million in new investment.

Sixty-five per cent of our young people -- they classify young people as being less than 24 years old, but I am not necessarily sure I agree with that -- get their first job and are employed by a small business. One quarter of all new businesses are started by women, and the women of this province will be happy to know that our recent statistics have proven they are much more successful business people than men. People under the age of 30 started more than 40 per cent of the new small businesses in 1985. Eighty-five per cent of the small businesses, roughly 268,000 of the 315,000, employ fewer than nine people; and 70 per cent, or roughly 220,000, employ fewer than five people.

The members are right on when they say too much attention has been given to the big corporate entity in the past. The little guy has been carrying the freight. From 1978 to 1982, which are our most recent statistics, net jobs created by small business was 90 per cent of the overall total. The little guy carried the freight. Let me expand on that a little bit. In that same period, those employing more than 100 people created 11 per cent of the net new jobs. Those employing from 20 to 99 people lost 10 per cent. Those employing one to 19 people created 89 per cent of the net new jobs. The little guy carried the freight, and we have not acknowledged it to the degree we should have.

We started that with our new ventures program. I could spend a whole hour talking about that. The member is addressing the problem of the little guy who is in that predicament and wants to expand but is not getting enough attention. That was addressed by the other member as well. We started that with the new ventures program. There are three main reasons for failure in business today: poor managers, poor management and lack of working capital. New ventures forces all three to be addressed, but I do not want to get into that particular program in depth. What I want to do is give the member my reasons for not being able to support the resolution on the basis of the content.

One of the first suggestions in the resolution is that there be a loan guarantee. That was an adjustment from the original proposal of direct loans. I totally agree with the aspect of loan guarantee. The member for Lanark suggests it be subsidized by two per cent. The Canadian Federation of Independent Business, which represents 80,000 small businesses in Canada, 35,000 of them in Ontario, has taken a poll in that regard and well over 50 per cent of them have said they do not want subsidized loans.

11:30 a.m.

Banks have been accused of throwing out an anchor when one is drowning, but I do not think most members of this House would argue that the banks are not entitled to some profit. I suspect it should be one per cent, with a floating rate or the option of having a fixed term rate. It scares the hell out of me when we starting talking about floating rates. Members will recall that rates went as high as 22 per cent in 1982, and if one had a floating rate of two per cent below prime, one was paying 20 per cent. That was as detrimental to trying to survive as it could possibly be.

I think there should be an option, and I do not think the member will object to that. There should be either a floating rate or a fixed rate of, for example, two per cent above prime. Those should be the options for the prospective individual. The resolution stresses the fact that a business has to be in existence for five years. Statistics have proved that if a small business can last for five years, it has pretty well made it. During years one and two, the individual usually has enough money to survive. The real problem is in years three and four. In my view, once one deals with startups, as we have had done with the new ventures program, attention should be given to those in years three and four.

When you subsidize rates, there is going to be a situation where the guy who does not get the subsidized loan is going to come to every member of this House and say, "You are creating competition for me unfairly." We would do that by the sheer number of people who would subsequently have to apply for the loans. By creating a situation where we have one per cent or two per cent above prime, either floating or fixed, we would get away with it because it would not be a government handout.

The member indicated, and I appreciate his honesty, that he was not aware of the federal Small Business Loans Act before coming in with this, but he checked it out. I have some confusion. The member indicated there was a $500 startup fee. My understanding about the Small Business Loans Act, which is not widely publicized by the federal government or by the banks, is that it is directly related to the amount one applies for. The maximum is $200,000, the average is $40,000 and the cost is one per cent. If one gets the average loan of $40,000, it will cost $400, probably with another $300 for legal fees. I do not think that is exorbitant to the degree that it would preclude anybody using it.

The only qualification is that it must be secured by goods or real estate. The real problem is that it does not address the working capital issue. There are a lot of programs for building buildings or something, but the real problem is that a guy needs some bucks, some financial advice and some assistance to survive. He needs the money to buy inventory or to hire a salesperson or marketing person. The attention should be given there.

My final concern is the administration costs. Even if it is put under the Ontario Development Corp., they are exorbitant. It should be left to the banks.

I want to conclude by saying that I vote for the sentiment and intent of the bill, but I have some serious reservations about the contents and I hope to discuss those with the member.

Mr. Sheppard: I am pleased to rise in the Legislature this morning to speak on the resolution of my colleague the member for Lanark regarding the implementation of a small business improvement loan that could be made available through the Ministry of Industry, Trade and Technology and the Ontario Development Corp.

We are all aware, as the Treasurer (Mr. Nixon) so pointedly indicated in his budget last May, that "small business is the most dynamic component of the private sector and creates most of Ontario's new jobs."

Small and medium-sized businesses are the backbone of the Canadian economy, because they make up approximately 90 per cent of all businesses in Canada. Initiatives and incentives were brought forward by the previous government, and many businesses currently in existence would never have been created otherwise. Entrepreneurial opportunities have been expanded and undertaken, thanks to these government initiatives.

At a time when unemployment is still very high, especially in smaller communities, we as government representatives owe it to our constituencies to do what we can to promote and encourage the concept and survival of our small businesses.

The Ontario Development Corp. helps create new businesses, new products, new exports and new jobs. Since 1963, it has helped finance more than 6,000 Ontario businesses. It encourages the entrepreneurial spirit in our province. The ODC is there to share the risks and to provide services to the entrepreneurs to turn their good ideas into practical projects as we help to expand businesses with high growth potential.

During the 1984-85 fiscal year, according to its annual report, the ODC approved 665 loans and guarantees totalling $61 million for small and medium-sized industrial enterprises. These statistics underline the importance of the small business community to Ontario's economy. They also reflect, however, the growing importance of self-employment in owner-managed businesses as an important reality in a changing society.

We must realize that the emerging generation has a significantly different perspective on economic opportunities from that of the generation approaching retirement. Younger workers can now expect to engage in several careers in their working lifetime. The implications of these trends for social mobility and economic flexibility underline the importance of ensuring that economic policies recognize and accommodate the realities of small and medium-sized businesses.

The resolution proposed by my colleague appears to be the natural extension of an existing successful entity. As we know, the development corporations provide most of their financial assistance in the form of direct loans to new and existing businesses when funds are not available from conventional sources on reasonable terms and conditions.

We must be realistic and realize that this small business improvement loan, if funded solely by the government, would be very costly. We also know that the ODC currently makes every effort to secure funds from private lenders. We may view this as a viable alternative solution to strictly government funding.

In the throne speech in April 1986, the Liberal government promised to co-ordinate and target its efforts to accelerate growth and to open up jobs and opportunities for Ontarians. Furthermore, the Liberal government promised it would expand opportunity for small businesses and entrepreneurship because, as I have stated before, small business is directly responsible for most of the new jobs created in the past decade. The government also promised to introduce several measures to enhance the competitiveness of the vital small business sector.

This resolution is a means by which the Liberal government can fulfil its throne speech promises. Small business improvement loans would be available for the purpose of financing existing businesses in various aspects, such as the renovation, improvement, modernization and/or extension of premises or the purchase of insulation, renovations, improvement or modernization of equipment.

With the aid of small business improvement loans many small businesses, such as Amara Company Ltd. in my riding of Northumberland, can continue to expand and revitalize their company, thereby enhancing the province's overall economic growth. Regardless of how the small business improvement loan is implemented, through either private lenders or government funding via the Ministry of Industry, Trade and Technology and the ODC, we must provide Ontario's service industry with a means to improve its facilities while increasing business and enhancing consumer conditions.

Let us remember that small and medium-sized businesses are the backbone of some of our rural ridings. Therefore, we must do what we can to support and facilitate the continuation of this very important sector. I ask that everyone in the House this morning support my colleague's resolution.

11:40 a.m.

Mr. Morin-Strom: I am pleased to have an opportunity to speak to the resolution presented by the member for Lanark. The resolution is very interesting, one in which the sentiments are such that I support the intention of the member in wanting to encourage and assist small business to thrive in Ontario. However, I have some concerns about some of the specifics included in this resolution. I do not have formal remarks written up, as the member for Northumberland (Mr. Sheppard) had, but I do have several points I would like to make on this resolution today.

I am somewhat concerned about the priorities indicated in this resolution. The resolution appears to be an attempt to assist small businesses, but I do not think it is assisting them in the areas of encouragement we need most desperately in our economy, most fundamentally in the area of job creation. I and my party historically have said that government assistance or tax breaks to business should be provided only when tied to job creation.

The major economic priority for our province today is to create employment opportunities so that everyone who is willing and able to work will have the chance to do so. We have to encourage those economic policies that will ensure we have full employment in the years to come. Simple handouts to businesses and breaks in financial support, which this offers by providing a two per cent lower interest rate than they would be provided with otherwise, are not specifically going to assist in job creation.

I am particularly concerned that the purpose of this resolution is stated to be that this loan is to be established "to renovate or enlarge the premises and allow them to upgrade existing fixtures." Down in the last sentence it is reiterated: "This initiative will provide Ontario's service industry with a means to improve its facilities without penalizing present borrowing rates," etc. There is no mention whatsoever of the need to create jobs and to tie such financial assistance to assurances that there will be additional employment generated by the investment the businesses would be making in either renovating or enlarging premises.

I find it interesting as well that the type of assistance provided here, particularly in terms of the lower-than-prime interest rate, contradicts a principle supported by even the Canadian Federation of Independent Business, which has shown in its surveys that businesses do not like to see such broad-ranging financial incentives and handouts being made as a wide-open scheme to all businesses.

The concern is that if one business in a given field applies for and gets such a loan, it becomes incumbent upon everyone else in the same field to do so as well. If one business, say a motel or a restaurant, has the opportunity to borrow $50,000 at a rate two per cent below prime, it gets a competitive advantage against everyone else in the field. It then creates pressures for everyone else to do the same thing. It becomes a handout from the public purse, two per cent of those borrowings, to a virtually unrestricted number of businesses, which can apply for that financial assistance.

We have to gear programs that are more restrictive and more specific to ensure that the money provided to encourage small business development gets used in the most productive way possible. To do that, the money should be very closely tied to job creation projects.

The other point I find somewhat discriminatory in this, and it is a concern to people starting out in new businesses or trying to get businesses off the ground, is the restriction to assist only businesses that have already been established for at least five years. In terms of what we are talking about, that is one of the most common complaints I hear from new entrepreneurs who are trying to get into the field of operating their own businesses.

Small businesses start up every day, and a very large percentage of small businesses are less than five years old. It is quite discriminatory to suggest that only well-established businesses should be able to get financial assistance from government, particularly against those who are trying to create new enterprises, new ventures and employment for themselves and others within this province.

In summary, I think such a broad, general plan as this could be subject to the charge that what we are doing with such a program is providing socialism for the wealthy. We are saying that those businessmen who are already well established and have had businesses going for five years will be eligible for additional assistance and a financial handout representing at least two per cent, and perhaps more than two per cent if they cannot borrow at the prime rate now, for $50,000 of their current or future debt.

I would like to do whatever is possible to encourage new small business development and the growth and expansion of small businesses. The most important aspect of encouragement for small business is the fact that it has been a major job creator in our economy. There is no question about the statistics in terms of job growth in the small business area, and it is in that area we have to continue to focus our efforts as a province.

While supporting the sentiment of encouraging small business, I ask the member to rethink his motion. Perhaps at a later date he or the government will be more inclined to provide us with incentives tied directly to job creation to ensure that we do provide the jobs we need throughout Ontario. In my own case, there is a definite need for job creation in northern Ontario and in Sault Ste. Marie. That is where the economic resources of our province should be focused, and jobs should continue to be the major concern of our economy.

I hope that is where the government will focus its attention, rather than on such a broad, general resolution as is provided to us today.

11:50 p.m.

Mr. Mancini: I note that my time is limited. Unfortunately, I will not be able to make all the comments I want to make on the resolution introduced by the member for Lanark. Most of us who have been in the Legislature for a number of years have gotten to know the member for Lanark quite well and know of the seriousness with which he takes matters such as small business. We do not want in any way to discourage his activity, as a former businessman, a former member of the cabinet and an active member of this House, to promote the needs of small business. We need people in this House who want to advocate the problems of small business.

However, the things the honourable member wants this government to do are being done in some cases, and in others are being done in a different way, which I believe to be a better way. The moneys he is asking for are to renovate or enlarge premises and to upgrade existing facilities. I believe it has already been mentioned in the House this morning that the Small Businesses Loans Act, operated under the auspices of the government of Canada, provides up to $200,000 of that type of funding.

The member indicates he would like a lower interest rate for these loans. It has also been indicated that the representatives of the small business community feel that would be unfair. The member does not tie any direct job creation to his proposal, something I believe to be very important.

The member for Northumberland sat as a government member for four years and evidently was not able to get anything done for small business through his government. He seems to want to spend his time criticizing this government while not knowing what positive action it has taken. The small business committee, which is made up of a number of parliamentary assistants and chaired by my very capable colleague the member for Wellington South (Mr. Ferraro), has been extremely active in reviewing the problems of small business. He has also been named a small business advocate, which has received very favourable reviews within the small business community.

The new ventures program the small business committee was able to put forward to the Treasurer, who was able to accept the proposal although he was short of funds at the time, shows our government's commitment to small business and particularly to the creation of new businesses. We know jobs will be created when new businesses are formed. We have tied the moneys we will be giving to these new small businesses to job creation.

The other special thing I want to mention about the new ventures program before my time expires is that we made special arrangements for northern and eastern Ontario. I am surprised someone such as the member for Northumberland has not stated that we need special arrangements for the people in eastern Ontario. I am surprised he has taken his time only to give a campaign speech perhaps.

Interjection.

Mr. Mancini: Is the member off and running for the campaign? Is that what he wants us to do? I do not understand.

We understand where the member for Lanark is coming from, and we commend him for his effort to try to advocate good things for small business. We need a viable small business community in this province; we would like it to prosper and grow.

Mr. Speaker: The member for Lanark has a little more than five minutes to wind up.

Mr. Wiseman: I thought I had a little left over there.

I thank the member for Timiskaming (Mr. Ramsay) for his remarks. We can tell the businessmen in the Legislature when they come out with remarks such as he did.

I was a little disappointed in the remarks of my friend the member for Wellington South. I know he is a businessman, he was a bank manager and so on, but he left out a little in some of his remarks. I am sure he did not do it intentionally. When he gave credit to small business and showed how successful small businesses with 19 and fewer employees are, how many jobs they are creating and so on, I thought at that point maybe he was going to support the resolution.

Mr. Sheppard: He should support it.

Mr. Wiseman: I think his conscience would like him to, because he is a fairly reasonable person, but perhaps other members on his small business board would not allow him to.

However, the member did make a mistake -- I guess he has been away from banking for a little while -- when he said the federal loan was $200,000. As of last week, both bank managers whom I went to see in Perth said the maximum was $100,000. The member also gave a figure of $300 or so for a setup fee. Those bank managers in my area said it is more like $500. The member knows, if he wants to get right into it, that an appraisal has to be done and the appraisal is on top of that. He did not mention that. He mentioned the lawyer's fees of $300, and some small businessmen need to include an accountant.

When we look at who is right, I think we will find it would probably cost a small businessman approximately $1,500 to set up, as my bank manager told me, on top of the one percentage point above prime. There is also the problem of trying to get the person who holds the first mortgage to take on a second mortgage while the bank takes the first. However, I do not want to waste a lot of time on that.

Regarding the five years' experience, both the member for Wellington South and the member for Sault Ste. Marie (Mr. Morin-Strom) wondered why it should be five years. When I spoke before, I said I am interested in costs. I am also interested in these businesses being successful. As the member for Wellington South said, if one is going to fail, it will probably be in the first three or four years. I was looking for government to provide a cushion so people who survive have a good chance of paying back the dough to be put in this program.

Regarding the two percentage points below prime, I was not thinking of the bank reducing its profit; I was thinking that would be the cost to the government.

The member for Sault Ste. Marie mentioned creating jobs. Perhaps I was not clear enough, but this will create jobs. It has been my experience for 35 years that every time I have done this in my own business, I have increased the number of jobs, whether it was a part-time job for a lady who needed money for her home or a full-time job. I can cite from personal experience where that has happened.

I know it must help the factories from which small businesses buy. They have to increase their purchase of goods. There may be employment at the factories. As well, jobs are created at the local level -- nobody seems to have heard me the first time -- where they are doing the actual work on these repairs: the carpenters, the electricians and so on. That is extra employment. Those people are going to pay extra taxes and so on. I was trying to cover the recovery cost for the government as well.

I get a little emotional about this because we are all talking about helping the small businessman, but all we seem to do most of the time around here is give him lipservice. I say that to the member for Essex South (Mr. Mancini). He is in government now and on this committee. Why does he not do something else besides give lipservice? He comes to eastern Ontario saying he will create jobs, but he has not done that at all.

Mr. Sheppard: All talk and no action.

Mr. Wiseman: Yes. All talk and no action. The member for Essex South was a small businessman. He should know what is at stake. I do not blame the member for Sault Ste. Marie. He has not been here long enough and he has not been in business. He has been in a protected business. I think he was teaching. They get their cheques whenever they come. However, a businessman who has to go out and scratch for it is a different story.

Mr. Ferraro: What a low blow.

Mr. Wiseman: Is he not a teacher?

An hon. member: No, he is not.

Mr. Wiseman: He is one of the few who is not. However, from the remarks he made, I bet he is not in business.

I ask all members to look at this and vote with their hearts.

12:05 p.m.

INSURANCE RATES

The House divided on Mr. Smith's motion of resolution 46, which was agreed to on the following vote:

Ayes

Andrewes, Barlow, Bernier, Bossy, Cordiano, Dean, Epp, Ferraro, Gillies, Gregory, Henderson, Hennessy, Jackson, Lane, Mancini, Marland, McCague, McFadden, McGuigan, McKessock, McLean, McNeil, Miller, G. L, Morin, Newman, Nixon, Pierce, Pollock, Rowe, Runciman, Sheppard, Smith, D. W., Smith, E. J., South, Stevenson, K. R., Villeneuve, Ward, Wiseman.

Nays

Baetz, Breaugh, Bryden, Callahan, Charlton, Foulds, Gigantes, Hart, Hayes, Knight, Laughren, Mackenzie, Martel, McClellan, Morin

Strom, Philip, Polsinelli, Ramsay, Reville, Sterling, Swart, Taylor, Wildman.

Ayes 38; nays 23.

SMALL BUSINESS IMPROVEMENT LOANS

Mr. Speaker: Mr. Wiseman has moved resolution 45.

All those in favour will please say "aye."

All those opposed will please say "nay."

In my opinion the ayes have it.

Motion agreed to.

The House recessed at 12:11 p.m.

AFTERNOON SITTING

The House resumed at 2 p.m.

SUPPLEMENTARY ESTIMATES

Hon. Mr. Nixon: I have a message from the Honourable the Lieutenant Governor signed by his own hand.

Mr. Speaker: Lincoln Alexander, the Lieutenant Governor, transmits supplementary estimates of certain additional sums required for the services of the province for the year ending March 31, 1987, and recommends them to the Legislative Assembly. Signed by Lincoln Alexander, July 3, 1986.

MEMBERS' EXPENDITURES

Mr. Martel: On a point of privilege, Mr. Speaker: It is not often that I have raised a point of privilege in all these many years.

When I finally make the front page of a newspaper back home, it is a miracle, especially when it is with a picture. When the headlines say, "Martel Top Spender Among MPPs," I have no objection. Frankly, I have no objection to the report indicating the amount I have spent to look after the needs of the people I represent. As a former member of the Board of Internal Economy, I tried for years to get the board to put in what is correct and what is not correct. This is a total and complete distortion of what goes on.

Perhaps I can draw to Mr. Speaker's attention that there are people who spend $6.02 for postage, people who spend zero for stationery, people who have chauffeur-driven limousines and who week after week show no cost in getting to and from home. A member gets headlines that compare him to the Premier because the Premier spends $81,200 and the member spends $158,000, even though the Premier has an account of $2.5 million down the way. This has gone on long enough.

When they were in the opposition, I recall Liberal member after Liberal member, such as my friend the member for St. Catharines (Mr. Bradley), objecting to this type of reporting. It is not the fact of reporting; it is the total lack of truth in this report. This must go to the standing committee on the Legislative Assembly so that we can find a proper process where all the money spent personally on behalf of members, and I do not care whether they are cabinet ministers, shows up in this annual report. Otherwise, it is a total distortion that is conveyed by the press to the public. It is time this stupid little game stopped.

Hon. Mr. Nixon: I have not heard these speeches since last year. I want to point out that the expenses for all members of the cabinet are listed in the Public Accounts in due course. The honourable member even indicated that the Premier's office has an additional $2.8 million. It was debated just a week ago and roundly criticized, even though it is substantially lower than last year. It is possible that a fairer way of reporting these expenditures might be brought forward. Perhaps instead of being alphabetical, it should be listed in order of amount.

Mr. Callahan: On a point of privilege, Mr. Speaker: I did not have the pleasure of being the top spender in Brampton, but the Brampton paper fell into exactly the same trap mentioned by the member for Sudbury East in that it listed former Premier Davis as having spent only $186 out of his riding office during the period of his term. I tried to explain to the press that would have been all through the Premier's office. I would file the same objection as my friend that the press distorts the facts.

Mr. Harris: In addition to the comments raised by my colleague the member for Sudbury East, with which I am not unhappy associating myself when the way the information is reported is misleading, there is in addition this year, as I do not recall in any other year, a category called "constituency staff," in which Queen's Park staff and legislative staff are included. When that goes to the newspapers back home, it will appear as though all the money is being spent on constituency staff and the newspaper wants to know where all this staff is. When it is done that way, it appears that although this new government objected to the way the reporting was done before, it has gone even further to distort the facts of how money is expended.

I would suggest that while the former government was in the throes of cleaning up this mess, this government has taken it even further into distortion and something ought to be done about it.

Mr. Speaker: It has been a most interesting discussion and I would remind the member for Sudbury East -- in fact, all members of the House -- that the Speaker and the Board of Internal Economy have authority over expenditures through the Office of the Assembly. We have no authority over the expenditures in the ministries. It is up to the House to decide what should be done in the future. I appreciate the member bringing it to the attention of the chair; however, I cannot understand it being a point of privilege.

Mr. Martel: If I may just take it one step further

Mr. Speaker: Order. I listened carefully to the member's point along with comments of other members and I do not feel that it may be a point of privilege. The honourable member had the opportunity to make his point. Order.

Mr. Martel: May I ask a question then?

Mr. Speaker: No. The member certainly may not.

Interjection.

Mr. Speaker: No. Order. Would the honourable member take his seat.

2:08 p.m.

MEMBERS' STATEMENTS

WASTE DISPOSAL

Mr. Sheppard: If you will recall, Mr. Speaker, on May 1, 1986, I made a statement in this House expressing my opposition to the siting of low-level, radioactive waste disposal facilities near the town of Port Hope. The people of Ontario and the people of Northumberland want to be assured that the disposal of any radioactive materials is done in the safest possible manner.

I believe it is absolutely necessary for the federal government to launch a national search for a permanent, low-level, radioactive waste disposal site. This site should be far removed from population centres and Lake Ontario.

Once again, I urge the Minister of the Environment (Mr. Bradley) to exercise his provincial responsibility to ensure that any site chosen by the federal government is safe for the permanent storage of hazardous wastes. Furthermore, I urge the minister to exercise his influence in a manner that the federal Minister of State for Mines be requested to honour the commitment of the Prime Minister on August 21, 1984, to ensure that such radioactive waste be stored in a location removed from major population areas and kept well away from major water resources such as Lake Ontario.

POLICE TRAINING

Mr. Mackenzie: A number of years ago in this House, I requested the previous government that the Solicitor General and the Minister of Labour of the day work together to arrange for the participation of labour through the Ontario Federation of Labour during training programs for police officers at the Ontario Police College in Aylmer.

The purpose was to make sure that police officers have a better understanding of the feelings and rights of workers in a legal strike in Ontario. This mutual respect is particularly important in regard to new Canadians and women. It is important to ensure both fairness for the workers and respect for the police during a legal strike situation.

For a short time, this participation by labour was included in the training program, and I have some reports that it was a useful initiative. Unfortunately, this stopped some two or three years ago and is no longer included during police training.

I urge the Solicitor General (Mr. Keyes), the Minister of Labour (Mr. Wrye) and their government to reinstitute the practice whereby officials or members of the OFL are included in the training program at the police college in Aylmer, so there is a better understanding among police officers of the situation in which workers find themselves during a legal strike.

INTERNATIONAL PLOWING MATCH

Mr. Pollock: I want to take this opportunity to remind all members of this House that on September 16, 1986, the International Plowing Match and Farm Machinery Show will open just north of my home town of Stirling in the riding of Hastings-Peterborough. The show, which has traditionally been very popular, should prove to be spectacular again this year. Many events have been planned, and I want to invite everyone to the official opening at 2 p.m.

I am also challenging all members, particularly city members, to a plowing match competition, which will be held following the opening ceremonies. There will also be a parade; quilting, sewing and cooking exhibits; antique and farm machinery displays; a queen of the furrow competition and much more.

I hope to see everybody there. I will be sending all members a letter with a questionnaire and I would appreciate their response.

PRISON FACILITIES

Ms. Bryden: I want to draw the attention of the Minister of Correctional Services (Mr. Keyes) to a statement made by the Ombudsman, Daniel Hill, in his 1985-86 report, which was tabled last week. The Ombudsman stated, "I find it repugnant that in the 1980s in Ontario we are still housing inmates in cells that are seven feet deep, 32 inches wide and seven feet high, have no running water, toilet facilities or interior lighting."

Earlier this session, I drew to the minister's attention the case of an elderly inmate who was confined in such a cell for 85 days this year in Millbrook Correctional Centre. I pointed out that it was inhumane in the 20th century to continue to use this kind of cell for any inmate, regardless of the nature of his crime. I am glad the Ombudsman agrees with me after his recent visits to seven provincial correctional institutions.

I am asking the minister to make an inventory of the number of such cells in all our correctional institutions and jails throughout the province.

RED MEAT PLAN

Mr. Stevenson: There is much dissatisfaction --

Mr. Callahan: Is this going to be partisan?

Mr. Stevenson: No. There is much dissatisfaction and confusion with the tripartite stabilization program signed and negotiated by the Minister of Agriculture and Food (Mr. Riddell). The low rate of sign-up is a clear indication of the confusion. The government should consider ways of altering the program to improve it and make it more appealing.

One initial move I encourage the minister to consider is to waive the $6.60 per animal fee for the slaughter cattle program and to have it subtracted from the expected payment for the second quarter.

Other governments in Canada have taken special actions to address the special needs of farmers in Canada in the 1986-87 production year. Such special actions have been noticeably absent from this government. Farmers who need protection the most have no cash to put up front for anything. These are unusually harsh times, and it is going to take special actions to resolve the farmers' current situation.

MEMBERS' EXPENDITURES

Mr. Martel: I want to return to this little subject because Mr. Speaker would not let me finish what I was driving at.

Mr. Speaker, previous Speakers have used the same argument you presented, that you cannot deal with expenditure in a cabinet minister's office. It does not come under the funds of the Legislative Assembly. It is my understanding that when one talks about expenditure for members, there is a formula that is supposed to be used which would indicate the transfer of funds for ministers using mail and the quantity and so on for their constituencies and their legislative duties. When it shows up as zero expenditure, one can only suggest that they are not using the formula to show what their expenditures are here.

I do not mind what my expenditures are. I am simply saying there has to be a way of reporting that is fair and honest. Make these birds put in their expenses according to the formula that is there before them. Then we might get the facts. As it is now, it is a complete distortion.

INTERNATIONAL PLOWING MATCH

Mr. McGuigan: I want to congratulate the member for Hastings-Peterborough (Mr. Pollock) on the fact that he announced the International Plowing Match is going to be in his county. I notice he is wearing his plowing match jacket today. I want to warn him I won the title of the worst-dressed man in this institution for wearing the jacket of Kent county in 1979 and the jacket of Elgin county in 1985. I challenge him. He will have to go a whole lot further than one plowing match before he is going to take the title away from me.

RENTAL ACCOMMODATION

Mr. Cousens: On the one hand, I would like to thank the Minister of Housing (Mr. Curling) for the good news of 143 rental units for Richmond Hill. On the other hand, may I say how sad it is that we did not find out about it a little sooner. The mayor did not know about it. The planning department of the town did not know about it. The Richmond Hill-Thornhill Liberal, a good paper in spite of the name, did not appreciate all the ramifications of this. I suggest, with great respect, that better communication should come from the ministry to make these announcements.

2:19 p.m.

STATEMENTS BY THE MINISTRY AND RESPONSES

SENTENCING OF POLLUTERS

Hon. Mr. Bradley: I am pleased to introduce legislation that dramatically restructures the existing enforcement provisions of three important laws. This legislation amending the Environmental Protection Act, the Ontario Water Resource Act and the Pesticides Act provides for jail sentences and quintuples fines for pollution offences. It also gives the courts the power to strip polluters of ill-gotten gains.

The bill will remove barriers to conviction of corporate offenders and make it easier to introduce evidence. It will improve the efficiency of enforcement by ensuring that simple requirements to improve environmental quality can be imposed by the court that convicts polluters.

These changes are needed because the current penalty structure is little more than a licence to pollute our air, our water and our food chain.

This is not fair to the people of Ontario, who want a higher level of environmental protection, nor is it fair to the majority of corporations which take pains to obey our environmental laws. I want to protect the competitive position of these good corporate citizens by imposing stiff punishment on the recalcitrant minority which cuts environmental corners to make an extra buck. The changes I am introducing today will make it cheaper to comply with our laws than to violate them.

As Minister of the Environment, I intend to enforce the laws vigorously and evenhandedly. This legislation will help the courts to apply the appropriate level of sanction to unlawful conduct. Minor infractions can be recognized as such and punished appropriately. For flagrant infractions, the courts will have the power to bring down the full weight of the law. The current fine structure fails to reflect the much larger financial resources available to corporations and their greater ability to cause widespread harm to the environment and human health.

We have retained the same fine structure for most offences for individuals, but we now have a separate structure for corporations prescribing higher maximum fines. For the most serious offences, those involving polluting and violating Ministry of the Environment stop orders, corporate fines will be five times as high: $25,000 per day for first offenders and $50,000 per day for subsequent convictions.

The option to imprison flagrant offenders will apply to the most serious offences -- those involving actual pollution, violation of a stop order and mishandling of hauled liquid industrial and hazardous waste. Where legal responsibility can be proven, corporate directors, employees and agents can be fined as individuals a maximum of $5,000 a day for first convictions and $10,000 a day for subsequent convictions. For the most serious offences, they can be imprisoned for up to one year.

The courts will also have the power to impose additional fines to deprive law breakers of any financial gain achieved by polluting Ontario's environment. Thus, the maximum fine for a corporation which pollutes for profit will be the full amount of the benefits obtained from committing the offence, plus a fine of up to $50,000. In addition, a person who is convicted of an offence will be subject to higher fines for a second violation of any of the environmental statutes, not just a violation of the same statute.

Fines will be doubled to $50,000 for the first offence and $100,000 for a subsequent conviction for improper handling of hazardous waste which causes actual harm to human health or the environment. This new penalty structure reflects society's increasing awareness that pollution is a serious assault on our wellbeing and prosperity.

In addition to fines and imprisonment, the courts will also have the power to impose orders, similar to a probation order, requiring offenders to take steps to prevent continuation or repetition of the offence and requiring them to rectify the harm caused by the illegal activity. This is necessary because the probation provisions available under provincial statutes apply only to individuals. This provision is needed to ensure that substantial environmental offenders, most of whom are corporations, are subject to appropriate supervision by the courts. The courts will also have the power to order straightforward steps that can be taken quickly to abate and clean up pollution resulting from the offence. This will protect both the environment and the direct victims of the offence.

In another change, if fines are not paid, the court will be able to suspend licences, permits and approvals issued under the Environmental Protection Act, the Ontario Water Resources Act and the Pesticides Act until payment is made. The judicial process will be streamlined to avoid unnecessary expense and delay, without compromising defendants' rights to a full and fair trial. The courts will be empowered to accept as evidence documents and certificates setting out uncontroversial facts, without the need to call witnesses.

The legislation will clarify that corporations are responsible for the conduct of their employees and agents. This will be a strong incentive for corporations to set up proper pollution prevention systems, properly train and supervise employees and provide in contracts with their agents that activities on behalf of the corporation must be carried out in an environmentally sound manner.

The general thrust of this legislation reflects the direction recommended by the Law Reform Commission of Canada. In recent reports, the commission has viewed environmental protection as a fundamental human value and has advocated more effective sentencing options and tougher environmental laws. I believe the new enforcement structure introduced today will provide appropriate deterrence for offences against the environment in Ontario.

Mr. Stevenson: I wish to respond to the statement of the Minister of the Environment. It is passing strange how two conflict-of-interest incidents can spur the government into action. For the second time in two weeks, we have seen the government trot out its supposed environmental white knight to try to cover its exposed assets.

We approve of the actions the government is taking to monitor substances in the environment and to crack down on polluters. Although I have not had time to state it, the announcement seems quite similar to the one by the member for St. George (Ms. Fish) last year. In June 1985, the present minister said he would have this legislation ready to be brought into the House in three weeks. That is how close the legislation was to being prepared a year ago at this time.

Mr. Gillies: What happened? Rip Van Bradley went to sleep for a year.

Hon. Mr. Bradley: That is a lot shorter than 42 years. We are 41 years ahead of the previous government.

Mr. Stevenson: We should try to get the Ministry of the Environment to monitor the verbal emissions of this minister to see whether they live up to the actions. I think one can be a bit cynical as to whether his government is working on an environmental or political timetable.

While the minister is taking these actions, and as we discussed yesterday in estimates, although we approve of his two announcements in the past two weeks, we stress that he should start putting some of his money into toxicology so we will understand what some of the measurements they are going to be taking mean and so we will have the trained scientists in the future to interpret the measurements of the chemical cocktails we now find in our food, water and air.

Interjections.

Mr. Speaker: Order.

Mrs. Grier: The legislation the Minister of the Environment has promised to table today has been promised for a long time, since 1983 when Peat Marwick recommended changes in the levels of fines and penalties. I would like to say congratulations to the Minister of the Environment that we finally got it. However, I point out that the fact we got it was helped along by a statement in that very famous accord, a statement that said new enforceable mechanisms were required to establish the principle that the polluter pays. Today, we seem to be establishing that principle.

When we see the actual wording of the legislation, I hope it will contain something about the minimum level of fines as well as the maximum. I regret somewhat that the maximum level for a corporate violation of the pollution laws is no higher than that for the illegal sale of a lottery ticket, but that would be to cavil.

I hope the government House leader will expedite passage of this legislation. The minister has long promised that when I saw it I would smile, and I am happy to tell him I am smiling.

INTEGRATED HOMEMAKER PROGRAM

Hon. Mr. Sweeney: I wish to table before this House a bill entitled the Homemakers and Nurses Services Amendment Act, 1986. The purpose of the bill is to ensure that integrated homemaker services are made more readily available to frail elderly and physically handicapped adults in this province.

Through the integrated homemaker program, homemakers provide personal care and homemaking services to enable frail seniors and physically handicapped adults to remain in their own homes rather than living in hospitals and other facilities.

I announced the program on January 28 this year. It is now operating in six locations throughout the province and, as I informed this House only a few weeks ago, on June 2, it will be extended to include an additional six to eight communities by March 1987. The province will spend $60 million over the next few years to introduce the program across the whole of Ontario.

The growth and acceptance of this program is further evidence of the widespread community need for integrated homemaker services. It has made necessary certain amendments to the present Homemakers and Nurses Services Act, so that our obligations to this important group in our society can be fulfilled.

The legislation as tabled contains three new and significant provisions.

First, the Homemakers and Nurses Services Act is being altered to permit homemaker services to be obtained without charge by frail elderly and adult physically handicapped people.

Second, the amended act will allow for my ministry and the Ministry of Health to be recognized as providers of homemaker services and thus be eligible to cost share this program with the federal government.

Third, the amendments will allow less costly, but equally satisfactory, services to be substituted for more expensive services. Let me give one example of such a substitution. A frail senior receives the services of a homemaker three days a week, but on one of those days that senior requires some help only with preparation of a main meal; therefore, instead of the homemaker coming in just for that reason, the local Meals on Wheels organization, as a substitute for the homemaker, might provide a hot meal on that day.

These recommended amendments to the Homemaker and Nurses Services Act are designed to help translate into reality part of this province's blueprint for the future. We want every Ontario senior and disabled adult to enjoy as comfortable and independent a life as possible. My ministry and our colleagues in the Ministry of Health are moving closer to that goal through the bill I will table today.

Mr. Cousens: We are pleased to see progress being made with the integrated homemaker services. I am reminded of the title of a book by Massey, What's Past is Prologue. The history of our party's concern and interest that has been demonstrated over the years for the elderly, the seniors and the frail is very genuine, as manifested by the Leader of the Opposition (Mr. Grossman) himself in his special task force on human and social services.

The emphasis we have to maintain in this province is to keep people comfortably and happily within their own homes. I am concerned about where these new six to eight sites will be, that they are not all going to be in Liberal or New Democratic Party ridings and that the quality of the service will be as high as possible. It is too bad the government cannot negotiate a cost-sharing program on some of the other important policies that are needed in this province for child care and other things. This is the right emphasis, and I am glad we began it.

Mr. D. S. Cooke: In 43 seconds, on behalf of our party, I want to congratulate the government on the announcement of the introduction of the home services bill. I might point out that our party has been saying for several years that this was going to require legislation. The previous government first promised this legislation back in the 1977 election and finally, nearly 10 years later, we are getting it.

Only one thing seems lacking. There is no clear indication in this legislation whether the Ministry of Community and Social Services is in power or the Ministry of Health is in power.

Obviously, the jurisdictional battle is still in place. Also, $60 million is not adequate to do a proper homemaker program in this province.

FUTURES PROGRAM

Hon. Mr. Sorbara: Last November I launched Futures, a unique program designed to get thousands of unemployed young people into satisfying permanent employment.

Futures has been an overwhelming success.

[Laughter]

Hon. Mr. Sorbara: I am glad my friends in the Conservative Party agree with that.

It has put young people into jobs where they are taught the skills they need and that employers need. They gain experience that, for many, has already led to permanent employment. Since November last, 33,500 young people have signed up, and nearly 70 per cent of these are either back in school or working permanently, or both. I am also pleased to report that more than 2,500 young people have already taken up the challenge of our guarantee option. We expect to more than double that number before the year is out.

Against that successful record, we have determined to continue funding Futures at the same level as allocated last year for hard-to-employ young people, at more than $135 million in fiscal 1986-87. We expect more than 50,000 young people to participate in Futures this year.

Moreover, this year we intend to increase the number of points of entry to Futures. Pre-employment preparation services will be offered in more than 25 locations this year, and 24 new Futures work placement centres will be opened. This expansion will bring service to 21 communities this year that have previously not had local access to this program.

We are keeping Futures as human as possible. When we were told that restrictions relating to the length of time a young person had to be unemployed to enter the program were causing hardships, we eased up. Now a young person is not penalized for having had a part-time or casual job. We also extended the age limit for disabled participants to 29 years of age.

Le problème du chômage chez les jeunes n'est nulle part ailleurs en Ontario aussi grave que dans le Nord. C'est pourquoi nous avons décidé d'étendre et de faire connaître davantage les services du programme l'Avenir dans les collectivités du Nord.

Premièrement, nous consacrerons plus de 21 pour cent du budget du programme, soit $29 millions, aux jeunes de cette région qui sont difficiles à employer.

Deuxièmement, nous avons l'intention d'ouvrir 10 nouveaux bureaux de placement et 12 nouveaux services de formation préprofessionnelle dans le Nord de la province.

Third, we have made a special commitment of $1 million to ensure that Futures is available to native youth in remote communities. This fall, the Ministry of Citizenship and Culture counsellors who serve remote native communities by air will offer Futures to young people on 50 reserves in the north.

We are also making special efforts to increase student employment opportunities this summer in northern Ontario. Members will be aware that in a number of northern communities, my ministry is assisting private sector campaigns that encourage employers and householders to find additional summer job opportunities for youth. In North Bay, the city's youth trust and chamber of commerce will run their second annual job blitz next week. In Elliot Lake, the chamber of commerce will be leading a campaign based on North Bay's successful model. In Sudbury and Sault Ste. Marie, Bell Canada is the lead company sponsoring Youth Action/Jeunesse Action `86. These local campaigns involve private employers, community groups and governments. By identifying more than 1,200 additional jobs in these communities, they will help bridge the summer employment gap.

As an additional response to the difficult northern employment situation, I am announcing today that we are extending the deadline in northern Ontario for applications for private employers under the Ontario youth employment program to July 18 and adding more than $1 million to the budget. We are also opening a special OYEP office in Thunder Bay, mounting a campaign to communicate with northern employers and setting up a special toll-free number. Our objective in this extension is to find 2,000 additional jobs on top of the 5,000 approved already for northern Ontario.

Mr. Jackson: I am pleased to respond to the Minister of Skills Development. I was delighted with his announcement in the House today. I noticed he had left the chamber for all but two minutes and thought he might miss this opportunity to receive a well-deserved compliment. I assume he is going to the telephone to call Hearst to advise a certain by-election in the province of his new-found conversion to the concerns of the youth of northern Ontario.

Thirty million dollars is a lot of money to decide all of a sudden, at this late juncture, to inject into northern Ontario on youth employment, especially in view of the fact that we have unemployment problems with the Urban Transportation Development Corp. in Thunder Bay, Great Lakes Forest Products in Thunder Bay, Kimberly-Clark in Terrace Bay and the list keeps growing.

It is probably quite a cynical approach to the concerns of northern Ontario, but perhaps the government can take a signal and encourage the former member for Cochrane North to resign once a year and in so doing draw more attention and support from this government for northern Ontario.

Mr. Wildman: I rise to respond briefly to the announcement by the Minister of Skills Development. This may appear as if I am looking a gift horse in the mouth, but I want to point out that the minister's triumphs he is talking about for this program relate mainly to southern Ontario, where the economy is picking up. The reason there has been little takeup and why he has to extend the program in the north is that the economy is in such terrible shape up there that employers are not as interested in training youth as they might be in southern Ontario.

We welcome the addition of the offices that the minister has announced, but I want to point out that the unemployment rate in the north is already at twice the provincial average, and in some of the northern reserves it is as high as 90 per cent.

I would like to know what the minister thinks he is going to be training the youth for. Unless this government does something to produce economic development and jobs in the north, it does not make a lot of sense to be training young people so they can continue to be unemployed after they finish their training.

ONTARIO LOTTERY CORP.

Hon. Mr. Eakins: Later today, I intend to introduce legislation to amend the Ontario Lottery Corporation Act. These amendments will prevent individuals from engaging in a business that involves the sale, distribution or advertisement of lottery tickets for lottery schemes conducted or managed by the Ontario Lottery Corp. unless specifically authorized by the Ontario Lottery Corp.

This legislation will make mail order ticket operations clearly illegal in Ontario. It will also prohibit the purchase of tickets in Ontario for the purpose of engaging in a business located outside this province that involves the sale, distribution or advertisement of lottery tickets. Further, no ticket may be sold at more than the face amount shown on the ticket. Conviction under these amendments can result in a fine of up to $50,000 or imprisonment for a term of not more than one year, or both.

My colleagues will recall that the mail order of lottery tickets is not a new issue. In the past few years, the corporation has received thousands of complaints from United States residents who sent money to unauthorized mail order agencies and either did not receive their tickets, did not receive prizes they felt they were entitled to or could not get information they required. These mail order agencies traditionally sold tickets at large markups. This government will not ignore the problem.

If left unchecked, this type of activity could cause serious harm to the integrity and credibility of this province's lotteries, something I am sure members of this House agree must be avoided. As the minister responsible for the Ontario Lottery Corp., I will not allow it to happen. Ontario's lotteries are among the best in the world. This legislation will help the corporation to ensure tickets are sold only by those individuals authorized to do so.

Mr. Haves: I would like to compliment the Minister of Tourism and Recreation on the action he is taking to stop the abuse in lottery ticket business. At the same time, I would be remiss in not mentioning the person who raised this issue in the fall of 1985 and several times since, our member for Welland-Thorold (Mr. Swart). I am very pleased the minister has seen the light and has followed the recommendation of the member for Welland-Thorold.

Mr. Swart: I would be unfair if I did not rise in my place and say to the Minister of Tourism and Recreation that although the legislation is a little later than I had hoped, I compliment him on introducing it and on what appears to be the quality of the legislation, particularly the section that does not permit anyone to sell lottery tickets above their face value.

I know this will probably not be dealt with for a few months, but I say to the minister to stand tough on this legislation; it appears to be good legislation. Perhaps he could persuade his colleague the Minister of Financial Institutions (Mr. Kwinter) to deal with some of the insurance proposals I have made in the same commonsense way that this minister has dealt with this.

VISITOR

Mr. Speaker: If members will allow me, I want to draw to their attention and welcome the former member for Lake Nipigon and former Speaker, Jack Stokes, in the members' gallery.

Mr. Grossman: I want to join in welcoming the former member for Lake Nipigon and former Speaker. We wish him well in his attempts to prod the government into action on behalf of the people of northwestern Ontario.

2:46 p.m.

ORAL QUESTIONS

EXTRA BILLING

Mr. Grossman: My question is to the Premier. As we enter the fourth week of what is now the longest doctors' strike in the history of our country, we discover that the Uxbridge Cottage Hospital, a fine small community hospital, is no longer going to be able to perform obstetrics because the consulting obstetrical specialist has withdrawn his services from that hospital and is going to concentrate them at Scarborough Centenary Hospital, because of Bill 94.

Can the Premier tell us whether he considers this to be only an inconvenience for the pregnant women in that area or whether he is worried about the situation those women face?

Hon. Mr. Peterson: I am not familiar with the situation the honourable member raises in the House today about the obstetrical services in the Uxbridge hospital. I will take any advice he has in that matter under advisement to work with the ministry or the hospital, if it wants to maintain the services in that area. I have no idea whether it is the choice of one physician or what the circumstances are. We are happy to work with the hospital, if it requires the assistance of the ministry.

Mr. Grossman: The Premier's expression of his concern and indication of his willingness to try to sort this out does nothing for the women in that area who are worried about their opportunity to get access to services. Their problem is solely and singly caused by what the Premier did in his insistence on pushing through Bill 94. He caused this problem, and now the women and their families are asking what the government is going to do about it.

Is the Premier not now becoming concerned about reduced access to the system? We have seen a reduction in access to spinal surgery at the Hospital for Sick Children and a reduction in obstetrical services in the Uxbridge area, all because of Bill 94 and the Premier's attitude. Is he not getting concerned about access?

Hon. Mr. Peterson: As I said, I had not heard about the Uxbridge problem. Presumably, if the local mothers are concerned, and there may well be some who are, they have been in touch with the member but not with me. I do not know whether they have been in touch with the Minister of Health (Mr. Elston). I have to take the member's word for it that there is a lot of concern about the change in services in that area.

It has been a difficult situation in the past three weeks or so, but I believe the ministry has coped extremely well. As the member knows, it is still the medical profession, the doctors, who are making judgements about medical urgency and diagnosing situations. To the best of my knowledge, all emergency situations have been taken care of.

Mr. Grossman: It is ironic that with crisis and chaos through the system, the Premier is counting on and relying on the goodwill and professional instincts of the very people he has criticized, condemned and name-called for the past several months across this province.

The Premier is acknowledging that he does not know anything about the Uxbridge situation. I presume his minister has been telling him about the big problems in the system. It was the headline story in the Uxbridge Times Journal of Wednesday, July 2, and the subject of an editorial wherein the chairman of the board of the Uxbridge Cottage Hospital, a prominent Liberal in the area, John Bakelaar, is quoted expressing his concern about care.

Mr. Speaker: Question, please.

Mr. Grossman: Will the Premier tell us how, in the fourth week of the longest doctors' strike in Canadian history, which he has caused, he can fail to be aware of serious circumstances, which I consider these to be, why he is not up to date on them and why he is not able to report to this House with regard to an action plan developed by his minister?

Hon. Mr. Peterson: I apologize to the honourable gentleman, but I do not read the Uxbridge Times Journal. I have never heard of John Bakelaar, the prominent Liberal who is chairman of the board there. He has not been in touch with me.

I do not agree with the member's analysis or choice of words that there is chaos and crisis in the system. He has been maintaining that every single day. The only person who believes that is the member, because no one else I know shares that view of the system. The member's analysis of the situation is a little like Chicken Little.

If the member has specific questions on these matters, on Uxbridge or on others, perhaps he would like to refer them to the minister; he might know something that I do not.

ALLEGED CONFLICT OF INTEREST

Mr. Brandt: I have a question for the Premier. I continue to be troubled by some of the information that is coming out of Cochrane North with respect to the affairs of the former minister. Yesterday, the Premier stood in the House and indicated the minister resigned his portfolio and his seat in this House as a matter of principle and as a matter of honour.

In yesterday's edition of the Kapuskasing Northern Times, the former member for Cochrane North stated to a reporter that he resigned, not because of any conflict-of-interest charges but because the cabinet had delayed consideration of a forest management agreement, as it would directly benefit his family. The former member's exact words to the Premier were, and I quote, "I had said that if Hearst did not get the FMA, I would resign."

In view of that information and in the light of the fact that we now have a situation that involves not only mining interests but also subsequent interests in an FMA, timber rights and a lumbering company in the north, is it the Premier's position with respect to this matter that irrespective of what happens, whether we have an inquiry, a committee review of the allegations and the questions surrounding this entire issue, he intends --

Mr. Speaker: Order.

Mr. Brandt: I am getting to my question, Mr. Speaker.

Mr. Speaker: I thought you had already asked two questions.

Mr. Brandt: My question is, does the Premier intend automatically to appoint the former minister back to cabinet?

Hon. Mr. Peterson: First, I am not familiar with the situation the member raises from the Northern Times. The Northern Times is owned and published as well as written, I gather, by the member's departed colleague in that area, René Piché. I know the paper has been a constant supporter of the government and an objective chronicler of all the events in the situation. This matter has been reported to the standing committee on the Legislative Assembly of this House. If the member would like to bring the matter before the committee, he should feel free to do so.

Mr. Brandt: Let me say to the Premier that the question of who printed the newspaper I am quoting from is of no relevance whatever, but his nonanswer is of relevance. The nonanswer we are getting is to a very specific and, I thought, very easy question. All I asked --

Interjections.

Mr. Speaker: Order. The member for Essex South (Mr. Mancini) and the member for Cochrane South (Mr. Pope) will please allow other members to ask questions.

Mr. Brandt: I thought the question was fairly straightforward. Did the former member for Cochrane North resign on a question of honour or on the question of whether the Minister of Natural Resources (Mr. Kerrio) had come to a conclusion in concert with his cabinet colleagues with respect to the FMA? It was one or the other.

We hear one story in the House, and we are hearing another as a result of certain published editions of the newspaper from the area. All I want to know with respect to the Premier's decision is whether the former member will be appointed automatically to cabinet irrespective of the findings when the inquiry is completed?

Hon. Mr. Peterson: With respect, there has been a discussion about an FMA in that area for some long period of time. As the member knows, cabinet deliberations are secret, but I can tell the honourable member it has not been dealt with by cabinet.

Second, he was asking me about a particular situation. If he has some information to present that I am not aware of, and if he is presenting things that would bear on this case, then he should do so. I told him --

Mr. Gillies: Is the Premier saying somebody can get away with murder like that and get back into his cabinet?

Mr. Speaker: Order.

Hon. Mr. Peterson: What I said to the member yesterday was that I believe, on the facts as presented and as I understand them -- if there are more facts in this situation that he is aware of, they should be clearly brought out; there is no question about that -- I view that as a technical violation at best. However, if the member has more information that bears on this subject, then that will bear on the conclusion.

Mr. Brandt: I want the Premier to know that I am not the one writing these quotes in the Northern Times. I am only sharing them with him because apparently he does not read any newspapers. I am trying to be helpful in this regard. All I want to know is whether the information --

Mr. Speaker: Question.

Mr. Brandt: I remember discussing the early question about the former member for Cochrane North about a week ago in quite the same context when the Premier's response to me was that once he had determined whether the allegations were correct, he would take the necessary action. We are still waiting with great apprehension for that action, whatever it might be, because the Premier has done nothing with respect to the former member for Cochrane North. Those allegations have been proven correct based on the information I gave him.

Mr. Speaker: Is the question, "Do you agree"?

Mr. Brandt: My question to the Premier is, if the information with respect to the FMA is correct -- and I have some more questions I would like to address to him on that --

Mr. Speaker: How about putting one question now?

Mr. Brandt: I will put one now. If that information is correct, will the former member be appointed automatically to cabinet?

Hon. Mr. Peterson: The member is surprised that I do not read his former colleague's newspaper, the Northern Times. I confess in all candour that I do not regularly read the Northern Times or the Uxbridge Times Journal, although I do appreciate it being brought to my attention when there is something newsworthy in those papers.

If my honourable friend has some information that bears on the subject of an FMA or on other subjects, it should be brought forward very clearly. I can assure him that and every other decision this government makes will be dealt with completely on their merits, having gone through the system as they are supposed to do in the circumstances. Any conversation like that has never been reported to me and never at any time has there been any suggestion of that in the resignation --

Mr. Harris: The Premier has had a year to get the information; what has he been doing about getting the information?

Mr. Gillies: Answer the question.

Mr. Speaker: Order.

Hon. Mr. Bradley: They are being disruptive.

Interjections.

Mr. Speaker: Order. Will the Premier take his seat.

Hon. Mr. Eakins: What did Moe Carter say today?

Interjections.

Mr. Speaker: Order. Once again I will just wait.

3 p.m.

Mr. Rae: I have a question for the Premier. I would like to ask if he can explain his remarks yesterday outside this House when he said that, regardless of the findings of the committee that has been established to look into the matter of Mr. Fontaine's conflict of interest, he will reinstate Mr. Fontaine into the cabinet on August 14. Can the Premier explain that extraordinary contempt for the legislative process? If he is going to ignore the committee completely, why did the government House leader stand yesterday and refer the matter to the committee?

Hon. Mr. Peterson: It is our view that all the facts should be brought out and that the member should have an opportunity to cross-examine and make any points he wants.

The facts as I know them have been revealed in this House. If there are more facts, obviously they should come out. It is not an impossible situation when the member's opinion on interpreting a set of facts differs from mine. We have honest differences of opinion on a great number of issues, not just this one. Ultimately, governments have to make judgements on the basis of the information they have at hand. Surely that is not a hard situation to comprehend.

Mr. Rae: What I find hard to comprehend is somebody who came into the House yesterday and accused other members of placing themselves above the political process. That was the Premier's song-and-dance act yesterday in the House. Then, just after he did that, he went out of the Legislature and said that regardless of the findings of the legislative committee that has been established to question Mr. Fontaine, to let him put his case and to ask him some new questions, the Premier will put Mr. Fontaine back into the cabinet on August 14. If that does not put the Premier and his judgement above the legislative process and the political process, I do not know what does.

We are entitled to a clear indication from the Premier that if the committee finds there has been a substantive conflict of interest and a breach of the guidelines, Mr. Fontaine will not be put back in the cabinet on August 14.

Hon. Mr. Peterson: Let us go back for a minute. I said that on the basis of the facts as I knew them, at best one could construe that there had been a technical violation of the conflict-of-interest guidelines with no suggestion of any benefit. If the member has some other information that there was, if he wants to come to another conclusion, that is quite legitimate.

That is the way this committee will work. The member is entitled to go to that committee, bring information, cross-examine and draw his own conclusions on that situation. I have told the member that, on the basis of the facts as I see them, that is the way it is.

Mr. Rae: Can the Premier explain, not only for this House but also for the public, what is a technical violation in failing to report ownership of 17,000 shares in a mining company, whatever their value may be, when one is the Minister of Northern Development and Mines? What is technical about failing to disclose a $63,000 credit interest in two corporations? What is technical about the nature of those two omissions? What is technical about a statement placed before this Legislature -- there are many other such statements, of which the Premier's is one and every member of the cabinet has one -- that, on its own admission, is inaccurate, incomplete and therefore misleading? What is technical about those violations?

Hon. Mr. Peterson: Let me go back to this situation. As the member knows, it was not a question in strict legal terms of outright ownership. These shares were escrowed. It is a sufficiently grey area. He has absolutely no control over them. They are in the hands of a trust company. He could not have transferred them to a blind trust, because he had no legal power over them whatsoever.

Therefore, it is not quite as clear as my honourable friend may want to point out in the circumstances. I gather Mr. Fontaine had advice that it was not the same kind of situation.

Interjections.

Mr. Speaker: Order. I will just wait patiently. I am sure there are other members who want to ask questions.

Mr. Rae: I will go back to the Premier. I will preface the question by pointing out to the Premier that the statement made by the minister was not that there was some technical legal reasoning behind his forgetfulness with respect to the escrow shares; it was that he forgot. He forgot that he owned them. That is how I read the statement. He said, "I forgot to list the escrow shares."

I would like to ask the Premier a question following from that and following from his statement yesterday with respect to the appointment of Mr. Aird. Is the Premier aware that there are now only two provincial jurisdictions in Canada which have no legislation dealing with conflict of interest? One is Prince Edward Island and the other is Ontario.

Is the Premier also aware that if we were in Manitoba, for example, one of the penalties available upon application to a court by either a voter or the standing committee on privileges and elections of the Legislature would be disqualification from office? It also states that an application can be brought, notwithstanding that the member is no longer a member or that the minister is no longer a minister.

How can the Premier compare that situation with the situation that appears to exist in Ontario, which is that whether or not there has been a violation of the act, a by-election somehow will resolve the conflict whereas in other jurisdictions a member is disqualified from even participating in an election?

Hon. Mr. Peterson: I am not familiar with all the legislation the member mentioned. I am not aware of it. It is certainly my view that the situation we have in the province at present is inadequate. One can look at those guidelines; they are just guidelines. The inherent problems are (1) that it is very difficult to know what they mean legally; (2) there is no ongoing monitoring, and (3) there is no ongoing enforcement of the situation. That is why it is my belief we need to change the situation, and perhaps the member's solution or the Manitoba solution is the correct one.

In these circumstances, the former minister felt the honourable thing for him to do would be to resign his seat. Is the member saying that because the former minister forgot to list these shares, he should leave for ever or not come back? What punishment is the member suggesting? That he get out of the political process for ever? He decided to put himself in the hands of the electorate of this province, which will ultimately make a decision.

Mr. Rae: I am happy to have the Premier asking me all the questions and I am sure one day I will be able to give some of the answers. Is the Premier aware that in at least two provinces in this country the ploy which he engineered out of his office with respect to the calling of the by-election would be completely and utterly illegal? Is he aware of that fact? Is he aware that two jurisdictions have decided that kind of manipulation of the electoral process is completely out of bounds? Does he not feel this at least calls into question the good faith of the kind of ploy with respect to what has taken place in a conflict of interest he has orchestrated and attempted to put across on the people of Cochrane North and the people of Ontario?

Hon. Mr. Peterson: I am not familiar with the legislation in the other provinces, although I think it behoves us all to become familiar with it. I reject the member's contention that it was some ploy hatched in my office; that was clearly not the case. I have a much higher respect for the people of this province than the member does. Ultimately, everything we do is subject to the scrutiny of the people of this province. I am prepared to put myself in their hands at the appropriate time and be judged on the decisions of the electorate.

3:10 p.m.

Mr. Rae: Let us go back to this point. Is the Premier aware that there are at least two jurisdictions next door to us in this country, Manitoba and Saskatchewan, where this determination is made in the courts? A determination is made after an application is made either by voters or by a standing committee of the Legislature with respect to a violation. All the questions the Premier is unable to answer are answered by a court, and if the court finds there has been a violation, the individual found to be in violation is disqualified from running in the next election.

Given that this is the morality which appears to exist in respect to public life in other jurisdictions, what is the common sense of the Premier avoiding taking his decision when, under the guidelines established in Ontario, he is the only person who can enforce them? He said the standing committee cannot enforce them, he said the Legislature cannot enforce them and he is not prepared to enforce them. Who is supposed to enforce the guidelines that are in place?

Hon. Mr. Peterson: The member points out the inherent problem we have in our conflict-of-interest guidelines. I agree with him that we have to bring them up to date and change them. He has some interesting ideas.

Interjections.

Hon. Mr. Peterson: It is not easy to make myself heard over all the noise that is going on at present.

We have a different tradition in this province, obviously. I am not suggesting for a moment that it is a better tradition. We should all examine the options that are ahead of us.

Mr. Fontaine did what he felt was the most honourable thing in the circumstances. He resigned and the whole matter has been referred to a legislative committee for thorough, open airing.

Mr. Brandt: My question is to the Premier. In response to questions raised in this House, the Premier has made quite an issue over the difference between whether or not the former member for Cochrane North received a benefit as a result of his holdings in Golden Tiger. That really has no relevance to the case that has been put before this House, where we have indicated simply that the lack of disclosure on the part of the former minister was in violation of the guidelines.

However, with respect to the issue of benefit, and since the Premier insists upon putting this issue before the people of Ontario, will he admit to them that, as a result of the fact that the former minister owned shares in Golden Tiger, there is every reason to believe that one of three things could happen to those shares: they could go up in value, they could go down in value or they could remain at the same value? Will the Premier admit that there could be some fluctuation in the price of those shares as a result of certain --

Mr. Speaker: Order.

Hon. Mr. Peterson: My honourable friend has an extremely profound understanding of the stock market. It can go up, it can go down or it can stay the same. He is right.

Mr. Brandt: Will the Premier agree, since he makes the point that the former minister did not receive a direct benefit and that it was simply a technical violation with respect to disclosure, that the minister did own those shares and, as a result of owning them, could at some future point have benefited as a result of an increase in the value of those shares? Is that true, yes or no? It is a simple question.

Hon. Mr. Peterson: It is a theoretical possibility. The member knows that those shares were in escrow. He has absolutely no control over then. They are in the hands of a trust company. As a theoretical possibility some time in the future, as the member so wisely says, they could go up or down or stay the same.

Mr. Brandt: On a point of order, Mr. Speaker: If the Premier feels Mr. Fontaine had no control over those shares, why was the former minister constantly speaking to his partner, Paul Martin?

Mr. Speaker: Order.

RENT REVIEW

Mr. Reville: I have a question for the Minister of Housing. I want to pursue my insatiable curiosity about the true meaning of Bill 51, the rent review bill. Under relentless questioning yesterday, the minister, in some kind of paroxysm, actually suggested that the rent guidelines in 1987 will be in the region of 5.1 per cent. Those were his words.

Will he now acknowledge, seeing we are doing so well on these answers, and we want to keep the ball rolling, that under Bill 51 the 5.1 per cent can have added to it variously two per cent, five per cent or as much as 10.2 per cent, depending on which kind of building a tenant is unlucky enough to live in?

Hon. Mr. Curling: The member knows the type of guideline we had in the past did not recognize certain buildings. These rates were going up by 10, 15 or 20 per cent, and there were no controls on these buildings. This guideline has recognized and brought into place all rental units post and pre-1975 and 1976. On the average, rents will reduce much less than what was happening in the past.

Mr. Reville: I think the minister has invented a new parlour game that will be played throughout Ontario. It will be called "I wonder what he meant."

Mr. Speaker: Do you have a question to ask about that?

Mr. Reville: Yes. I have a question about what the minister might have meant.

Does that mean, now that I can deduct the 0.1 per cent relating to yesterday's answer, that my rent may go up $25.50, $35.50, $50.50 or $76.50 on my now legendary $500-a-month unit?

Hon. Mr. Curling: I think they know the answer, Mr. Speaker. The member has this hypothetical number that I must deal with.

I remind the honourable member that Bill 51, which will be introduced and I hope passed -- and I intend to have it passed before we leave this sitting -- has added protection for all rental units in the province. It will reduce rent increases. When the member stands here and says he feels his rent is going to go up, I want him to tell members out there and all tenants that over the couple of years that are coming along, rent will be reduced. I hope I will get the full co-operation of all members to get Bill 11 and Bill 51 through before we go and that they will stop stalling this bill.

RESPITE CARE

Ms. Hart: I have a question for the Minister without Portfolio responsible for senior citizens' affairs. As I am sure the minister is aware --

Interjections.

Mr. Speaker: Order.

Interjections.

Mr. Speaker: Perhaps the member will take her seat, and we will wait until there is a little more quiet and a little more respect for the other members.

3:20 p.m.

Ms. Hart: As I am sure the member is aware, the traditional family structure has changed dramatically over the last decade. Among other things, this has meant a change in the ability of families to provide support services for elderly members. Family support is complicated by the fact that many women today have entered the labour force, often out of necessity, and are no longer able to provide consistent care. Moreover, many sons and daughters of elderly people live great distances away.

In view of this reality, what does the minister plan to do to assist families who are caring for elderly members? Has the minister considered the possibility of respite care?

Hon. Mr. Van Horne: I am sure all members will agree that very thoughtful question was what I was waiting for. I am sure they will also agree that it reflects the member's ongoing concern for the very large number of seniors who reside within her community.

We have given thought to that and we are in the process of working out details of various programs, the generalities of which were announced in our statement last month. I remind the member, and all members for that matter, that we are not working in isolation but in full cooperation with the Ministry of Community and Social Services and the Ministry of Health.

Ms. Hart: I receive calls in my constituency office virtually daily from people asking about respite care. Can the minister advise us how long it will take to implement respite care programs in this province?

Hon. Mr. Van Horne: I am sure all members are aware that when a white paper comes out, it takes time to work out the detail of implementation. I remind all members that the white paper is not a discussion paper but a paper of statement of government policy. Our intent is there and our will is there. The detail of the program will be worked out as quickly as possible. I hope before the end of this calendar year the exact detail the member is looking for will be available for her.

ATTENDANCE AT MEETING

Mr. Pope: I have a question of the Attorney General. Can he confirm that he was present at a meeting within the last two weeks with the member for Oriole (Ms. Caplan), her spouse, her lawyer, a lawyer for the Liberal caucus, Mary Eberts and her lawyer?

Hon. Mr. Scott: I was present at such a meeting in the building.

Mr. Pope: Does the Attorney General, the highest law officer of the crown in this province, think it appropriate that he be present at a partisan meeting where decisions are being made as to what information will be given to the standing committee on public accounts?

Hon. Mr. Scott: That was not the purpose of the meeting, and I do not regard attendance at that meeting as inappropriate.

OCCUPATIONAL HEALTH AND SAFETY

Mr. Laughren: I have a question of the Minister of Industry, Trade and Technology. The minister may be aware that a company called Waferboard Corp., near Timmins, had a serious accident about a year ago last August. Since that time, three orders have been issued by the Ministry of Labour.

Interjections.

Mr. Speaker: Order. Perhaps the member for Nickel Belt would take his seat. It is very difficult to hear the questions and responses. The member may try again.

Mr. Laughren: I was trying to communicate with the Minister of Industry, Trade and Technology about a company called Waferboard Corp., near Timmins, where a serious accident occurred in August 1985. Since that time, three orders have been issued by the Ministry of Labour but no charges have been laid despite the pretty clear evidence of negligence. Does the minister have any idea why it took seven months to complete that investigation and why no charges have been laid?

Hon. Mr. O'Neil: I am not aware of that case. The Minister of Labour (Mr. Wrye) is not present today, but I will be very pleased to discuss it with him as soon as he arrives.

Mr. Laughren: While the minister is finding out why no charges have been laid and why it took so long, can he also find out why, in view of the fact that isocyanates are used in that waferboard plant and investigations have indicated they are exceeding the level of isocyanates in the air, no control orders have yet been issued to control the level of isocyanates in the air? Finally, why was the company given advance notice of the visit by Ministry of Labour officials to do the test?

Hon. Mr. O'Neil: Again, I would be very pleased to discuss that with the Minister of Labour and ask him to get back to the honourable member with answers to both those questions.

ALLEGED CONFLICT OF INTEREST

Mr. Harris: I have a question of the Premier. The former member for Cochrane North has indicated that his decision to resign did not stem from the conflict-of-interest charges. He further stated that at last Wednesday's cabinet meeting the Premier pulled consideration of the Hearst forest management agreement because of accusations Mr. Fontaine and his family would benefit from the deal. Could the Premier confirm that?

Hon. Mr. Peterson: I cannot confirm whether he said it. The member has read it presumably in the Northern Times, so I cannot confirm whether that is accurate. What I can confirm -- and the member knows I am not in a position to speak about what transpired at cabinet --

Interjection.

Hon. Mr. Peterson: He is entitled to say his views on the matter. Mr. Fontaine was not there, but he is entitled to speculate.

To the best of my knowledge, the resignation had absolutely nothing to do with anything except the issues that were raised in this House.

Mr. Harris: This is a direct quote from the former member for Cochrane North. The Premier could comment on two things. One, has the member broken cabinet confidentiality in releasing this information to the press in Cochrane North? Two, can the Premier confirm what Mr. Fontaine indicated? He said, "I had said that if Hearst did not get the FMA, I would resign."

Hon. Mr. Peterson: Mr. Fontaine was not there. How could he have said it? I have never ever heard him say that there or anywhere else.

SINGLE-INDUSTRY COMMUNITIES

Mr. Wildman: I have a question of the Minister of Colleges and Universities. Is the minister aware that out of 24 grants totalling $500,000 which were awarded under the geoscience research grant program, only three totalling about $45,000 went to engineers and scholars in the north?

Mr. Speaker: I am sorry to interrupt the member for Algoma, but I did not hear a thing.

Mr. Wildman: There is something wrong with the machine, Mr. Speaker. We have to keep starting over again.

I was speaking to the grants made to scientists under the geoscience research grant program, and I was pointing out that only three of 24 went to scientists in northern Ontario for a total of about $45,000, while 21 went to scientists in southern Ontario for a total of 10 times that amount. Is the minister aware of that and can he explain why geoscience work which is being done in the north is being funded to scientists who are not from the north?

Hon. Mr. Sorbara: First, I was not aware of the statistics my friend -- is it the member for Cochrane South? -- the member for Algoma mentioned. I do not approve those grants. They are done by peer review and they are done on the basis of submissions that are made. The decisions are made by scientists in the community. The member says 21 went to scientists in southern Ontario and three went to scientists in northern Ontario. I take him at his word. Is he saying to me that scientists in northern Ontario somehow have been disregarded or their abilities have been overlooked? I am not sure what point he is making with his question.

3:30 p.m.

Mr. Wildman: I do not pontificate the way the member for Cochrane South (Mr. Pope) does.

My point is simply that there are not the facilities for scientists to locate and work in the north. Now that the Minister of Colleges and Universities recognizes these statistics, which come from government figures themselves, is he prepared to agree to have the government implement the recommendation of the Advisory Committee on Resource Dependent Communities in Northern Ontario, in the so-called Rosehart report, for the establishment of an Ontario mining development foundation in northern Ontario? This would encourage exploration, processing and new mining technologies in northern Ontario so this work could go to the north and be done in the north.

Hon. Mr. Sorbara: My friend was on the Rosehart committee. He is aware of the recommendations, and he is aware that this government has taken the recommendations contained in that report very seriously. I am not going to tell him today that we are going to implement its recommendations tomorrow or the next day, but I will tell him that we take them very seriously.

Perhaps for the first time in Ontario's history, ways of making our institutions in the north fully participating members of the university community of this province are being looked at. These things are not going to change as of September 1, but we are and will be taking steps to bolster our capacity to do research at Laurentian University, at Thunder Bay and in our other institutions.

NORTHERN DEVELOPMENT

Mr. Pierce: My question is to the Premier. Now that the Premier has taken over the portfolio of the Minister of Northern Development and Mines and has stated to the press that he will be using the by-election in Cochrane North to announce programs to assist the people of northern Ontario, does he believe the time to announce programs for the north is now, today, or only at the time of a by-election in northern Ontario?

Hon. Mr. Peterson: Very much the contrary. The member will see what has been transpiring. There have been very thoughtful questions from some members -- not all of them northern members, but some -- about initiatives this government is going to be undertaking. It is no secret to the member. Did the member not participate in the Rosehart committee? He will be familiar with all that kind of thing. We announced some time ago that we were going to be making a number of announcements in northern Ontario on July 8. The member knew that long before the resignation of Mr. Fontaine. That was no secret. If he is asking me not to do anything in northern Ontario for six weeks, he should please stand up and say that and then he can go home and explain it.

Mr. Pierce: It is not my intention to have the Premier withhold any announcements he has for northern Ontario. I had only hoped those announcements could be made without the by-election. If those programs are available now, will the Premier announce them in the House today?

Hon. Mr. Peterson: Just to be clear, the member is happy about what we are doing. He was familiar with the fact that we were going to make some announcements. He will be aware of what is happening in Sault Ste. Marie on Tuesday next and how we have been working with that community. We hope to bring some approaches -- we do not have all the solutions, but we have some approaches -- to some of those problems. I hope the member will be there on Tuesday and will support the meeting. It is no secret this is going on.

WASTE DISPOSAL

Mrs. Grier: I have a question for the Minister of the Environment concerning the very troubling problem of the disposal of pathological or biomedical waste. The minister will be aware that a change in the regulations last September classified biomedical waste as hazardous, and I am sure he will agree the $15 million that has been inserted in the budget could not begin to address the problem of upgrading existing disposal facilities. Can the minister tell the House why he has not proposed a comprehensive strategy to help the hospitals of this province deal with the problem of pathological waste?

Hon. Mr. Bradley: The member, who is familiar with this subject, will likely be aware that the Ministry of the Environment, in conjunction with the Ministry of Health and others in government who have opinions to offer in this regard, has been involved in a task force on this very subject. It has been gaining opinions from those who are in the various fields dealing with pathological waste. As a result of the task force, proposals are being formulated that I hope to announce in the relatively near future. They will deal with a problem that she recognizes has existed for a number of years in the province and is only one of a number of difficult challenges facing us in the field of the environment.

The Treasurer (Mr. Nixon) saw fit to include in his budget a sum of some $15 million to assist the Ministry of the Environment and the Ministry of Health in dealing with this problem. We are currently in consultation with representatives of the Ontario Hospital Association and others who have a specific interest, with a view to finding the longer-term solutions the member seeks as well as those that will serve us in the short term.

Mrs. Grier: The minister is probably aware that just last week a judge dealing with charges laid against four Metropolitan Toronto hospitals for illegal disposal of biomedical waste said the proceeding "is at the head of my list of time-wasters and the Environmental Protection Act is too loosely worded and ambiguous."

Does the minister not agree that he is placing hospitals in an untenable position by not becoming an advocate of sound environmental disposal procedures and by not reviewing the procedures under the Environmental Protection Act when he classifies the waste as hazardous and lays charges and yet has provided no comprehensive direction to the hospitals as to what they are supposed to do?

Hon. Mr. Bradley: I do not think what the member has described is entirely accurate.

Mr. McClellan: She is always accurate, and the minister knows it.

Hon. Mr. Bradley: I cannot agree with the member who interjected.

Mr. Speaker: Please disregard the interjection.

Hon. Mr. Bradley: I recognize that on many occasions that is the case, and I compliment the member on that. I do not entirely agree with her assessment of the situation, however.

I am not in a position to comment on an individual judge's opinion. I can say personally that I consider all aspects of the Environmental Protection Act to be extremely important. I know the member would not want to give the idea that she would support having one rule for the private sector and one rule for the public sector, because on many occasions she has been heard to say the ministry should enforce all laws that are in effect. That is what we are doing.

In addition, as I indicated in my initial answer, we are reviewing biomedical wastes. The initiative has been taken by the Treasurer to provide financial assistance that will be helpful, and we are reviewing regulations on an ongoing basis in the context of the task force to ensure that we come forward with yet another environmental initiative that will improve the environmental climate in this province.

ALZHEIMER'S DISEASE

Mr. Offer: I have a question for the Minister without Portfolio responsible for senior citizens' affairs. In his white paper he makes reference to the emphasis on basic and clinical research. With respect to seniors, which research areas will the minister be emphasizing? Specifically, what emphasis will be placed on research on Alzheimer's disease?

Hon. Mr. Van Horne: The member for Mississauga North (Mr. Offer) has reflected his concern and interest for seniors with a thoughtful question. It is this government's view that through research a better understanding will come to deliverers of service to seniors and through that I hope we will encourage early intervention that will keep people out of institutions.

To that end, during the course of this summer, I and my special adviser, Mr. Heagle, will be consulting with experts on gerontology to confirm what we feel are key areas that require research to establish our priorities. We will be meeting this summer with members from the Gerontology Research Council of Ontario, with some of the staff at McMaster University and with the Canadian Geriatrics Research Society.

Beyond that, the member asked about specific areas and included Alzheimer's disease in his question. To date --

Interjections.

Mr. Speaker: Order.

Hon. Mr. Van Horne: It is interesting that the party opposite --

Mr. Speaker: Order. The minister is now straying.

3:40 p.m.

Mr. Offer: In view of the significant role the federal government plays in funding research, will the minister be encouraging his federal counterparts to act swiftly in these areas?

Hon. Mr. Van Horne: The answer is that research, in our view, should be complementary. Therefore, we hope the efforts made by Ontario will be in concert with whatever the federal government is doing.

In my original answer, before I was so rudely interrupted by the members opposite, I was about to make reference to Alzheimer's, which is a prime concern to this government.

Through the Ministry of Health and the Ministry of Community and Social Services, we have two projects that have just been completed or are nearing completion, one at Queen's University and another at Sunnybrook Medical Centre. As we assess the results of those two pieces of research, we will be discussing the results with the federal government and encouraging it to take a leadership role. If it does not see its way clear to do so, we hope to provide the leadership for the much-needed research on the ageing process, not only for Ontarians but also for all Canadians.

POLICE INVESTIGATION

Mr. Shymko: My question is to the Attorney General. In a letter dated February 24, 1985, it was stated his party shares the concern that "the allegations of corruption within the sheriff's office be fully probed and that appropriate charges be laid." Why has the minister, to this day, not laid charges in connection with the 2,000-page investigation by the Ontario Provincial Police into corruption within the York county sheriff's department?

Hon. Mr. Scott: Certain discharges took place in the sheriff's office, and grievances are proceeding with respect to those. If the honourable member will be good enough to send me a letter, I will try to inquire whether anything else either requires to be done or is being done.

Mr. Shymko: Can the minister explain why Delbert Adams, the man who had the courage and decency to expose this scam so as to preserve the integrity of the sheriff's office, is out on the street while Robert Campbell, the former purchasing chief, who was fired as a result of the investigation, has been rehired by the minister? Is there a coverup in his ministry? If not, why was Campbell rehired?

Hon. Mr. Scott: These acts all took place under the previous government. I will look into the question of the rehiring and, if it occurred, attempt to explain to the member why it occurred.

NUCLEAR SAFETY

Mr. Charlton: I have a question for the Minister of Energy. He may be aware that the Canadian Nuclear Association announced some weeks ago it would be spending $300,000 on a public relations campaign to try to allay public fears about nuclear power in Ontario and across Canada. I think he is also aware that Ontario Hydro contributes to that organization.

In view of the fact that the three oldest operating nuclear units Ontario Hydro has -- Pickering units 1 and 2 and Bruce unit A -- are all down because of tube failure, does the minister not think it might be more appropriate for Ontario Hydro and this government to be involved in ensuring that we have a full-scale study of nuclear safety in Ontario, to be conducted by independent experts, as was recommended by the Porter commission and by the select committee on Ontario Hydro affairs, of which he was a member?

Hon. Mr. Kerrio: I do not know whether the honourable member is going to try to pre-empt the report that is coming down this afternoon, I hope, from the chairman of the select committee on energy, relating to this very important issue.

The thing that gives me some comfort about Candu reactors as they are generating within Ontario is the support that was given by Canadian Union of Public Employees Local 1000 and the workers within the nuclear plants of the province. I am encouraged by the position they have taken and will take into account what the member has to say about looking into the safety of our reactors.

Mr. Charlton: The minister referred to the report that will be coming down this afternoon. Will the minister make a commitment to this House to follow the recommendations of the committee with respect to a nuclear safety study?

Hon. Mr. Kerrio: It is high on the list of this government's priorities to make certain of the safety of our reactors, as is the kind of effort we are going to put forward in efficiency, in conservation and in alternative forms of generation. Those are the things we are going to take an active role in with Ontario Hydro. I suppose many of them will be addressed in the report.

I will give the member the undertaking that this government is going to take into very serious account what the report says. As soon as we have time to peruse it, we will make statements and comments to the House. I recognize that the member has a major concern as to the safety of Candu reactors. I should share with the House the fact that a former committee actually studied the report, and I am very willing to go forward in a serious way on how we should look into the safety of Candu reactors.

PETITIONS

SALE OF BEER AND WINE

Mr. Barlow: I have four petitions, all headed the same way. There is a rather lengthy preamble, but I will read it anyway. The subject is beer and wine in Ontario grocery stores, and it reads as follows:

"To the Honourable the Lieutenant Governor of Ontario and the Legislative Assembly:

"We understand that the government of Ontario plans to introduce legislation to permit sale of some beers and wine in Ontario grocery stores. We have also read reports that this may be confined to so-called independent stores.

"We, the undersigned, wish to express our objection to you, as our elected representative, to any legislation which would exclude us and our place of employment from the opportunity to sell our customers any products simply because we are not a so-called independent store.

"This practice would discriminate against our customers who choose to shop here of their free choice for reasons we believe we have contributed to. This practice would discriminate against us by encouraging our customers to shop elsewhere. We believe we work hard and conscientiously for our customers and intend to do so for beer and wine as well as for any other products we sell, including many strictly regulated products. We object to any government action which jeopardizes our jobs and earnings by manipulating free consumer choice.

"We believe we have earned the right to be respected for the way we do our work. We demand that, if legislation is passed permitting beer and wine to be sold in grocery stores, our grocery store be given the same permission."

These are signed by 84 employees of three Zehrs Markets in Cambridge and one Miracle Food Mart in Cambridge.

Mr. Speaker: I remind the honourable members -- it came to my mind just this moment -- that when presenting petitions, it is not necessary to read the whole petition. If you read the standing orders, you can forgo the "whereases" and just come to the "therefores."

Mr. Philip: I have a petition that is just as long and contains the same information as that read by the member for Cambridge (Mr. Barlow); so I will not read it at all. I will, however, say I am in agreement with it. It is submitted by the employees of Miracle Food Mart at 1701 Martin Grove Road and Miracle Food Mart at 2592 Finch Avenue West in Weston.

BIG GAME ANIMALS

Mr. Pouliot: I have a petition signed by 12 tourist outfitters in the riding of Lake Nipigon. They are asking the Ontario government to add the black bear to the list of big game animals, thereby protecting and prolonging the life of this species.

NATUROPATHY

Mr. Offer: I have two petitions, each signed by 50 persons and each dealing with the same subject matter. They indicate naturopathy has had self-governing status in Ontario for more than 42 years and ask the government to introduce legislation that will guarantee naturopaths the right to practise their art and science to the fullest without prejudice or harassment.

3:50 p.m.

REPORT BY COMMITTEE

SELECT COMMITTEE ON ENERGY

Mr. Andrewes from the select committee on energy presented the committee's final report and moved the adoption of its recommendations.

Mr. Andrewes: This report probably deserves the anticlimax-of-the-week award. It has been the subject of a lot of speculation and comment. Therefore, I think it is incumbent upon me as chairman of the committee to expand in some detail beyond what one normally would say when tabling a report in the Legislature and to put some factual information on the record relevant to the report itself.

The select committee on energy was appointed on July 10, 1985, by the Legislative Assembly of Ontario to inquire into and report on the affairs of Ontario Hydro. In December 1985, the committee filed an interim report on the Darlington nuclear generating station. At that time, the committee recommended that no further significant contracts for units 3 and 4 should be let for materials not required for construction during the next six months, while the committee studied demand-and-supply options.

Today, the committee is pleased to submit its final report on demand and supply options, thus fulfilling its mandate. The report, entitled Towards a Balanced Electricity System, contains a total of 26 recommendations aimed at building a more balanced electrical system that can deliver power at the lowest economic and social cost to the people of Ontario.

Ontario has entered a new phase of electric power planning characterized by higher uncertainty and increasing risk. Accordingly, we must strive to increase the flexibility and diversity of our electrical system to reduce uncertainty and manage risk. We have found this can be done through increased energy productivity, with all its attendant societal benefits, by adding a number of smaller, more flexible supply options.

Flexibility and diversity, the way of the future, are leading us away from the nuclear generation option. Its benefits are declining while the risks associated with it are increasing. However, we have a huge nuclear plant, Darlington, which is approximately two thirds complete. Unfortunately, we find ourselves with no responsible alternative to Darlington.

At this time, we are unable to respond to the imperatives for system flexibility and balance. Too little is known about the timing and cost of conservation to risk thousands of jobs and billions of dollars of investment. No other supply options can compete with the low incremental cost of completing Darlington. More than $7.1 billion has already been irretrievably committed.

Therefore, the committee has found that proceeding with Darlington is the lowest-risk option for the province in the short term. The government should take advantage of the time resulting from the surplus provided by Darlington. The committee urges the government to take strong action to ensure that our choices are not circumscribed in the future as they are today.

In the report, we recommend that no further commitments to nuclear be made at this time. Ontario Hydro should build a strong capability in conservation. The Ministry of Energy should pursue alternative energy forms to diversify our generation mix. Our report provides explicit directions to guide these agencies of government in carrying out these tasks.

The committee has found a marked similarity between the findings of its review of demand-and-supply options and the recommendations of past reviews. To ensure that the committee's recommendations are implemented, we recommend changes to the decision-making process to significantly strengthen government's role in the determination of our electricity future.

Rigid guidelines are developed for Ontario Hydro's planning process so that all resource options are given fair evaluation. We recommend that the planning process be opened up to allow for meaningful public input on key issues at several stages of that process. We recommend a thorough review by a strengthened Ontario Energy Board of resource plans before new options are chosen. Finally, we advocate the expansion of the Ontario Energy Board's powers to include the setting of electricity rates.

Our report provides the Ontario government with a blueprint for building a balanced electric system and gaining effective control over Hydro's planning process.

I would be remiss if I did not thank a number of people who have had a major role in the formulation of this report: the clerk of the committee, Franco Carrozza, and Lynn Mellor, who assisted Mr. Carrozza when he was unable to be with us because of other responsibilities; Jerry Richmond and Beth Ward of the legislative research service and Dr. Larry Moore from the Ministry of Energy, who assisted us in the research and the preparation of documentation in the report; and finally, members of the committee, who gave their undying trust and initiative in the pursuit of making this an effective and thorough report.

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

INTRODUCTION OF BILLS

ENVIRONMENTAL ENFORCEMENT STATUTE LAW AMENDMENT ACT

Hon. Mr. Bradley moved first reading of Bill 112, An Act respecting the Enforcement of Statutes related to the Environment.

Motion agreed to.

Hon. Mr. Bradley: I have given a statement on the bill; so I will not elaborate on the bill itself. Because he was in the gallery for the statement and for other activities, I would like to take this opportunity to offer congratulations to, among other people, John Swaigen, who was with the Canadian Environmental Law Association from 1972 to 1982 before he joined our ministry. Mr. Swaigen was one of the founding fathers of environmental law in Canada and one of the first executive directors of CELA. Whenever a bill of this kind is brought forward, the efforts of many are involved, and I want to commend him, along with my other ministry staff, on this initiative.

HOMEMAKERS AND NURSES SERVICES AMENDMENT ACT

Hon. Mr. Sweeney moved first reading of Bill 113, An Act to amend the Homemakers and Nurses Services Act.

Motion agreed to.

MUNICIPALITY OF METROPOLITAN TORONTO AMENDMENT ACT

Hon. Mr. Grandmaître moved first reading of Bill 114, An Act to amend the Municipality of Metropolitan Toronto Act.

Motion agreed to.

Hon. Mr. Grandmaître: This bill will increase the size of Metropolitan Toronto council from 39 to 43 members, plus the Metro chairman. Two of the additional members will come from Scarborough, with an additional member each from Etobicoke and North York. This legislation has been requested by the metropolitan council, and I am pleased to be implementing that request today.

4 p.m.

ONTARIO LOTTERY CORPORATION AMENDMENT ACT

Hon. Mr. Eakins moved first reading of Bill 115, An Act to amend the Ontario Lottery Corporation Act, 1986.

Motion agreed to.

Hon. Mr. Eakins: I made some opening comments. I will not speak further except to express my appreciation to the member for Welland-Thorold (Mr. Swart) for the interest and leadership he has given in this bill.

LOAN AND TRUST CORPORATIONS ACT

Hon. Mr. Kwinter moved first reading of Bill 116, An Act to revise the Loan and Trust Corporations Act.

Motion agreed to.

Hon. Mr. Kwinter: I wish to withdraw Bill 87, the Loan and Trust Corporations Act, 1985, and introduce a new bill for first reading, the Loan and Trust Corporations Act, 1986.

There are several purposes for this action, one of which is to change all references relating to the Ministry of Consumer and Commercial Relations to the Ministry of Financial Institutions.

The new bill also contains a provision to permit trust companies to own a percentage interest in a securities dealer, consistent with the policies relating to the securities industry that I announced last month.

After second reading debate, I will be recommending that the Loan and Trust Corporations Act, 1986, be referred to the standing committee on administration of justice. Accordingly, changes of a technical nature have been made to the new bill so the time of the committee will not be taken up needlessly by these matters.

The intentions I have just outlined have already been discussed with members of the opposition, who have been provided with annotated copies of the new bill.

MINORS' PROTECTION AMENDMENT ACT

Mr. Swart moved first reading of Bill 117, An Act to amend the Minors' Protection Act.

Motion agreed to.

Mr. Swart: The purpose of this bill is to prohibit the sale of low-alcohol beverages to children. Currently, anyone can purchase drinks with less than one per cent alcohol.

It may be unusual for members of the two opposition parties to have their names on one bill, but the member for Peterborough (Mr. Turner) has been extremely interested in this matter, and I think it is appropriate.

This low-alcohol-content beer may serve a useful purpose for adults, but it has no place whatsoever as a children's drink.

CITY OF TORONTO ACT

Mr. Offer moved first reading of Bill Pr25, An Act respecting the City of Toronto.

Motion agreed to.

ORDERS OF THE DAY

ONTARIO ASSOCIATION OF SPEECH-LANGUAGE PATHOLOGISTS AND AUDIOLOGISTS

Mr. Reville moved second reading of Bill Pr1 , An Act respecting The Ontario Association of Speech-Language Pathologists and Audiologists.

Motion agreed to.