Hansard Transcript 1987-Feb-04 | Legislative Assembly of Ontario

Mr. Speaker: 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.

COMMISSIONERS OF ESTATE BILLS

Mr. Speaker: I beg to inform the House that the Clerk has received a favourable report from the commissioners of estate bills with respect to Bill Pr20, An Act respecting the Town of Lindsay.

Accordingly, pursuant to standing order 78(e), the bill stands referred to the standing committee on regulations and private bills.

MEMBERS' STATEMENTS

DOGSLED RACES

Mr. Pollock: I would like to invite all members of the House to attend the dogsled races in Marmora this weekend. There will be a banquet on Friday evening, and at 10:30 Saturday morning, Teddy Coe, the Snow Princess, will officially start the long-distance race. This race is 150 miles long, the longest in Ontario. It could be classified as Ontario's own Iditarod.

The 60-mile race will begin immediately following the start of the long-distance races. Promoters of this event estimate that there will be 700 dogs there. That means there will be more barking in Marmora this weekend than there is here at Queen's Park through the week.

There will be other attractions, such as pancake breakfasts, snow golf and various short dogsled races. There are usually mushers there from Ontario, (Quebec and many states in the United States. This is a family event, and everyone is most welcome to attend.

NORTHERN DEVELOPMENT

Mr. Morin-Strom: Last week the United Steelworkers of America of Sault Ste. Marie released the results of their independent study of the Algoma Steel Corp.

The central findings of the study are that the economic future of Algoma Steel cannot be secured by contract concessions by the union; that the present program of action announced by the company in April 1986 does not represent a viable solution to the company's problems, and that a winning recovery plan must involve the participation not only of Algoma and the steelworkers but also of Algoma's corporate parent, CP Ltd.; its principal banker, the Royal Bank of Canada, and also the federal and provincial governments.

I would like to endorse strongly the union's approach. It has proposed a progressive, positive course of action to address the future of Algoma Steel and the future of Sault Ste. Marie and area. The Ontario government has been asked to be a key participant in the talks to come. I ask the Premier (Mr. Peterson) to commit to participate fully and to take action to ensure the participation of the other parties with stakes in the future of Algoma.

The steelworkers' report also recommends immediate action that can be pursued by the provincial government in the area of facilitating manufacturing industries that consume steel to locate in Sault Ste. Marie. This would help to develop new markets for Algoma's output without being a direct financial subsidy to Algoma Steel.

We have recommended secondary industries for the north before. The urgency is apparent. The time to act is now.

RIDING OF CORNWALL

Mr. Guindon: As the member for Cornwall, I wish to take this opportunity to remind this government that my riding, at least to my knowledge, is still part of Ontario and that its people, hardworking and law-abiding citizens, pay their fair share of taxes, like everyone else in this province.

However, it appears to me that our riding is not benefiting as much as other areas from the overwhelming prosperity that has taken place in Ontario in recent years. Historically, we have been neglected in many ways.

In French we have a saying that goes like this: "Loin des yeux, loin du coeur." It seems that since we are located so far from Toronto, we have missed out on many opportunities to upgrade ourselves and allow us to partake in this great movement of prosperity.

In the city of Cornwall, we have an industrial park that needs expansion. Land must be serviced. If we are to attract new industries, it is a shame that we have to go on our knees to get assistance that would allow our people to help themselves to reduce unemployment and to stabilize our economy, which is still very fragile. We have an unemployment rate of more than 14 per cent. Although our economy is diversified, the loss of one single plant employing a mere 40 people would spell disaster. We need help now for our industrial park, so that we can attract new business and also accommodate those that are already there and wish to expand.

Cornwall is part of Ontario, just like Toronto, Oshawa and Kingston. I wish this government would recognize that.

PENSION FUNDS

Mr. Mackenzie: We have in our galleries today, or will have over the next few minutes, better than 110 retired pensioners from the Hamilton area, most of whom have given yeoman's service as officers of their local unions over the years before their retirement. These people have not remained inactive in the social issues that affect workers today. They have a petition from the Hamilton area alone that I want to send across to the Premier (Mr. Peterson) and the Treasurer (Mr. Nixon) containing 2,702 names, which reads as follows:

"Workers gave up wage increases in order to buy pension benefits. The costs of these benefits are calculated in the dollars-per-hour negotiated wage package. Therefore, 100 per cent of these pension funds and accrued interest should belong to the workers who negotiated these benefits. Any surpluses should be used to index the pensions of these workers 100 per cent against inflation for past, present and future pensions, to reduce vesting periods or increase levels of pensions.

"Therefore, we demand that this Ontario provincial government pass legislation now to prevent companies from using workers' pension funds for their own purposes, such as skimming of funds or reducing their obligation payment levels."

I think what these workers are saying -- I say this to the government of Ontario -- is: "No more delays. Let us see action now to deal with the skimming of funds and the indexing of pensions for the workers of Ontario."

[Interruption]

Mr. Speaker: Order. I would like to remind all our guests, our visitors in the galleries, that we are glad you are here, but the standing orders say there must be no demonstration from any gallery.

1340

VOLUNTEER FIREFIGHTERS

Mr. McLean: A serious problem was brought to the House on January 14 by the member for Sarnia (Mr. Brandt), and I have discussed this problem with firefighters in Orillia township. It concerns the plans of the Ontario fire marshal not to offer summer courses for volunteer firemen.

This is a problem that members from the urban areas may not fully comprehend, as they have full-time, paid firefighters. We from the rural ridings are used to having totally or almost totally volunteer firefighting staff. These people are hard to find and must be highly trained when they are found. As volunteers, they often use their hard-earned summer vacations to take courses at the Ontario Fire College. Those are taken on their own time and away from their families.

Therefore, as a result of the question raised on this side of the House, I hope the Treasurer (Mr. Nixon) has made plans to provide the necessary funds in his next budget to allow the courses for the volunteer firefighters to be held this summer at the Ontario Fire College.

Mr. Wildman: Along the same lines, I would like to point out that it is my understanding that there is a proposal before Management Board of Cabinet for an increase in the staffing of the Ontario fire marshal's office -- approximately 19 additional staff -- and additional funding, so it can make up for the woeful record of the past and the failure of the government to provide the kind of training that is required by volunteer firemen in this province, particularly in the unorganized communities in northern Ontario, so they can protect themselves and the general public when they are faced with emergency situations and have to enter burning buildings to try to protect property and people.

It is most unfortunate that we were not given that information by the minister yesterday when the matter was raised in the House. It is most unfortunate that the minister seems to take the view that because there was a little more training last year than the previous year, everything is fine. In fact, there has been only about one tenth the number of hours' training required, according to the fire marshal's own figures.

It is important that we do all we can to ensure that the people who give their time and are willing to risk their lives to protect others are given the greatest amount of training possible, so that they know what they are doing and can protect themselves and the general public adequately.

STATEMENT THE MINISTRY

NIAGARA RIVER WATER QUALITY

Hon. Mr. Bradley: This morning I signed a four-party declaration of intent to clean up the Niagara River. As members and the people of Ontario know, this agreement was reached neither quickly nor easily.

Ten months ago, Ontario was the lone holdout, refusing to approve an earlier draft. That draft was a statement of good intentions, but it left some important basic elements to be specified in the future. Instead of agreeing, Ontario said it wanted a specific percentage target for reduction of pollution entering the Niagara River from both point and nonpoint sources. I proposed then that, as our interim goal, the four governments seek at least a 50 per cent reduction by 1996.

The draft agreement also lacked any mention of excavation of the leaking toxic dump sites on the United States side of the ever. Instead of agreeing, Ontario said it believed that containment would prove to be an inadequate measure for some of the dumps immediately adjacent to the river and that excavation and destruction will be the necessary ultimate solution. I proposed then that any good Niagara River cleanup agreement must contain a meaningful reference to excavating those dumps.

Over the months, we have achieved the improvements we sought, and today representatives of Canada, the United States, New York state and Ontario signed the agreement.

Key elements of the declaration of intent include a target of 50 per cent reduction of persistent toxic chemicals by 1996 from point sources such as industrial and municipal dischargers by 1996; a target of 50 per cent reduction of persistent toxic chemicals by 1996 from nonpoint sources such as leaking chemical dumps, and annual reports, starting next year, on technological developments applicable to dump-site cleanups, with particular emphasis on excavation and destruction.

The agreement is a good framework for a meaningful cleanup of this vital and world-renowned waterway. All parties have an enormous stake in the speediest and most thorough cleanup of toxic sources entering the river. For the people of Ontario, certainly, restoring and protecting water quality is imperative to maintain our environment and to safeguard our economic, social and physical wellbeing.

For one thing, the greatest concentrations of Ontario's population -- and Canada's -- are in Toronto and communities along the shores of Lake Ontario, into which the Niagara River flows. Many of our recreational and aesthetic needs are satisfied by this body of water. It provides a vital source of drinking water for many Ontario households.

Drinking water alone is reason enough to demand that we clean up this river, but there is more. Restoring the river also protects the long-term interests of the many industries and services that have developed along both the Canadian and US shorelines. As expensive and difficult as abatement and cleanup programs may be in the short term to individual industries, these measures ultimately lead to a more secure environment for sustained economic development.

I remain convinced that containment of the US chemical dumps leaking into the Niagara River is only a short-term palliative. Ultimately, we will all agree that those dumps immediately adjacent to the river will have to be excavated and the toxic chemicals destroyed. Anything less means we risk disastrous toxic surprises down the road. It puts all our costly and hard-earned Niagara River cleanup achievements at risk, not to mention the health and welfare of untold numbers of US and Canadian residents.

Earlier today at the signing ceremony, I made Ontario's position on excavation clear to the other three parties.

Today's agreement does give us a good basis for turning the attention and resources of the four governments on the many individual trouble spots which plague the Niagara. This agreement ends an era of neglect and opens a long and no doubt arduous but, I believe, ultimately successful campaign to clean up the Niagara River and safeguard Lake Ontario and its vast supply of drinking water.

RESPONSES

NIAGARA RIVER WATER QUALITY

Ms. Fish: We see another loss in the course of transboundary discussions and international relations among Canada and the United States, Ontario and New York state. We have in front of us the signing of a declaration of intent which will not in itself do one thing to reduce the pollution and the loadings in the Niagara River. This is not an agreement; this does not set out implementation. It simply sets out sweet little fantasyland notions of the goals to improvement.

I remind the minister of his comments on May 13, 1986, when he said, "I have indicated consistently that the position of Ontario is based upon the recommendations of the report of the Niagara River Toxics Committee. First, there should be a scheduled reduction of pollution into the Niagara River; second, there should be extensive monitoring, and, third, there should be provision for the excavation of those toxic waste sites immediately adjacent to the river.

"In all good conscience," the minister continued, "I could not sign any agreement on behalf of the people of this province that did not contain those provisions."

His good conscience has apparently fled, and in bald face and bad conscience this minister has signed an agreement that at best may monitor some of the pollution that is going in, but does not implement any of the reduction and certainly does not excavate the sites. This minister's version of excavation of sites is a grudging consideration by the US authorities possibly to consider some newer technology that might deal with excavation, sort of, maybe, if they are in a good mood that day. This is a betrayal of the people of Ontario.

1350

Mrs. Grier: The minister has claimed that this is a better agreement than the one he was offered to sign 10 months or six months ago and I suppose that is a legitimate claim. The one he was offered 10 months ago was not worth very much at all and this one perhaps has some merit to boast about. It is certainly better than no agreement at all, and my friends to the right never managed to sign one.

The fact that it is slightly better than the one that was first talked about justifies the number of times we have raised in this House the minister's strong words about signing a strong agreement. The weakest link in the agreement is those very strong words the minister uttered about his commitment to excavation.

On May 12, 1986, he said he would sign no agreement that did not contain a commitment to excavation and in the last couple of weeks that has become "a meaningful reference" to excavation. That is still the outstanding question of this report. Will we ever see excavation of the S area dump, of the Durez site, of the Hyde Park dump site? I am not sure we are going to. There are even qualifications about the reduction of the toxins.

What strikes me most about it is that we have seen agreements before. We have seen the Great Lakes water quality agreement. All agreements are only as good as their implementation. Is it not a strange day when we have all this attention, all this excitement about an agreement that people will do their job? If it is not the job of the federal Minister of the Environment, of the provincial minister and of the US officials to safeguard our environment, whose job is it and why has it not been done until now?

We were faced this morning at the signing with the sight of 400 civil servants brought together to pledge once again that they would get on with cleaning up the environment. It has some very weak links. It is something we have long waited to see happen. We have an annual monitoring and I can assure the minister we are going to be watching him every step of the way until the day when we can be sure no dioxins in those dumps are going into the Niagara River.

Mr. Rae: In addition to what was said by our critic, I want to make two points to the minister. First, I wonder whether the minister is satisfied with the statement, which is as follows, and I think it should be quoted in full:

"In 1988 and annually thereafter, review and report in depth, based to the maximum extent possible on existing parties' reporting requirements, on the state of new and emerging technologies applicable to hazardous-waste landfill-site remediation, with particular emphasis on such techniques as the excavation, removal and on-site destruction of contaminated material."

If he thinks that means the Americans have committed themselves either to excavate or to destroy chemicals, he is sadly mistaken. He cannot stand in his place and say that. If that is the position he is putting forward in the House, he is sadly mistaken. That is the first point that has to be made.

The second point that has to be made with respect to this agreement is that it is a declaration of intent among four ministries. It does not give the citizens of Ontario additional rights to sue in the US -- which is crucial and what we desperately need -- it does not give us the kind of right of action that we desperately need in order to enforce the law; and it does not take the power away from governments and give it into the hands of the people, which is where environmental power really belongs.

I see the minister is very touchy. He is used to being praised to the heights. In the last two weeks he has had a hard time. He better get used to that fact. Not everybody thinks he is the cat's pyjamas and he better get used to that fact. It is hard, but he must learn to take it. He is not the cat's pyjamas on the environment any more and everybody knows it. The cat is out of the bag with respect to the minister's record on the environment.

What has to be said is that this agreement is simply a declaration of intent. It is not binding in law on anybody and that is disturbing. It means it is not a legal treaty; it is not binding. It cannot be enforced anywhere. With respect to excavation, the minister has achieved far less than he might like us to believe and perhaps even far less than he would like himself to believe, which is the saddest thing of all.

Mr. Leluk: On a point of personal privilege, Mr. Speaker: Yesterday in this House, during my question to the Minister of Health (Mr. Elston) regarding the pharmacy bills, Bill 54 and Bill 55, the member for Brampton (Mr. Callahan) and the member for Waterloo North (Mr. Epp) interjected comments alleging a conflict of interest on my part.

For the record, I do not own a pharmacy nor have I ever owned a pharmacy in this province or elsewhere. I am not a practising retail pharmacist and have not practised retail pharmacy since prior to 1961. I am not currently and have not been on the payroll of any pharmacy or the pharmaceutical industry. Should these members, or either of them, have any evidence to the contrary, I ask that they table it with the Clerk of the House.

Mr. Speaker: I listened very carefully to the member for York West (Mr. Leluk). I cannot see where that is a point of privilege. It sounds like a point of information to me.

Mr. Leluk: Mr. Speaker --

Mr. Speaker: Order. I listened to the honourable member. I do not consider it a point of privilege.

Mr. Leluk: Allegations were made in this House yesterday --

Mr. Speaker: Order. Will the member take his seat. Are you challenging my ruling?

Interjections.

Mr. Speaker: Order. The next item in routine proceedings will be oral questions.

ATTENDANCE OF PREMIER

Mr. Harris: There are matters of fairly urgent and significant importance to the people of Ontario that involve the Premier (Mr. Peterson). We were told he was going to be here. If he is not handy, I ask unanimous consent to stand down our questions.

Hon. Mr. Nixon: I am informed that the Premier will be here in a few moments. I will recall for the House leader of the official opposition and others that in past years this has happened on occasion, particularly when members are anxious to put questions to the Premier. It is quite acceptable to all sides if the leadoff questions are stood down. They are special because they have an additional supplementary and we can return to them at everybody's convenience. I am told the Premier will be here in a moment.

Mr. Speaker: Is it agreeable that leaders' questions be stood down?

Agreed to.

Mr. Harris: I have to go so far down on my list. If the New Democratic Party wishes to start and give us back our turn, we will be agreeable to that. I think it would be better if we recessed for five minutes.

Mr. Speaker: Order. I have called for oral questions. I understand leaders' questions have been stood down. I now ask for further questions.

ORAL QUESTIONS

NIAGARA RIVER WATER QUALITY

Mrs. Grier: I have a question for the Minister of the Environment. In our response to his statement, we talked about his previous commitments to excavation of the toxic waste dumps in the Niagara River. Perhaps it would be helpful if the minister would give us a clear, simple and maybe even brief explanation of why he was unable to include in this statement of intent a commitment to excavation of those dumps.

Hon. Mr. Bradley: As the member would be aware from the statement I made and from subsequent statements I made during a press conference after the signing took place, when discussions were on some time ago, our goal at that time as a ministry and a province was to have in the agreement, first and most important of all, a specific timetable, a specific number of years in which a specific percentage reduction would take place; second, as I indicated to the member in the House, much more extensive monitoring than was called for in the previous drafts of this kind of agreement, so we could really pinpoint the sources and determine whether they were rising or falling; third, a commitment to the long-term goal of the virtual elimination of persistent toxic substances from the waterway known as the Niagara River.

In addition to that, I talked about excavation of the sites. I am sorry I did not see the member earlier during my remarks; I would have noted her presence. I believe the member was there when I was speaking and would know I made a reference to this at that time and I indicated Ontario's position. The Americans have consistently refused in the past to give any consideration at all to excavation. That has been their position. Subsequent to that, we had a very substantial reference to it.

Mr. Speaker: Order. Perhaps the minister would allow the member to place a supplementary.

Mrs. Grier: That kind of generalized statement is fairly typical of the agreement or declaration of intent that we have before us today. I am trying to get some specific commitment from the minister as to what is different today from the situation yesterday.

Can the minister tell this House whether today we are going to have any assurance that the Hyde Park dump, to take that as an example, is going to be no longer a threat to the people who take their drinking water from the Niagara River? As the minister knows, one gush of dioxin and Lake Ontario is no longer available to us as a drinking water source. What assurance can he give us today that we are any closer to preventing that than we were yesterday?

Hon. Mr. Bradley: As the member would have noted, because she attended the press conference as well --

Mr. Hennessy: Was she invited? Are we invited?

Hon. Mr. Bradley: Yes, everybody is invited to the conference, as far as I know. The member was there herself; she took the initiative.

Mrs. Grier: I was not invited.

Hon. Mr. Bradley: The member went; good for her.

Mr. Speaker: Order. Does the minister have a response?

Hon. Mr. Bradley: I am trying to get to the answer. At the press conference, the member will have noted that I made no attempt to oversell any particular agreement and emphasized that what is as important as any agreement are the activities that will flow from that agreement. It is my view, with the written commitment of the four parties on those items I have discussed, that we will see the kind of activities that will have the effect of reducing contaminants to the river. I expect, and the member has stated in her response to me, that she will be ever vigilant, as will other members of the House, environmental groups and others, in ensuring that the provisions of that particular agreement are lived up to.

ATTENDANCE OF PREMIER

Hon. Mr. Nixon: On a matter of information, Mr. Speaker, the House leader for the official opposition was concerned about the presence of the Premier. I indicated he would be here soon. I am now informed that he is meeting with Thomas Niles; the meeting has gone over substantially and he is not sure when he will be here. A number of my colleagues in the ministry are here, and I cannot tell you when the Premier will attend.

Mr. Pope: The fact that the Premier is talking to Mr. Niles really relates to the question I am about to ask. It fills us with dread and, I suspect, fills 46,000 steelworkers in this province with dread, given the performance of the Premier in Washington.

Mr. Speaker: The question is to which minister?

STEEL EXPORTS

Mr. Pope: My question is to the Minister of Industry, Trade and Technology. The Premier is reported in the January 27 edition of the Toronto Star as saying something similar to what the minister was reported to have said in the January 28 edition of the Globe and Mail, both advocating the same thing. To quote the Premier: "...he said after the meeting with Heinz that he hopes the dispute is resolved through industry and federal government talks aimed at getting Canadian steelmakers to voluntarily restrain their exports to the US market, valued at more than $1.4 billion last year."

The minister himself echoed a voluntary approach or point of view with respect to the steel issue. Senator Heinz has now tabled his legislation proving to all Ontarians, particularly the 46,000 steelworkers, that our Premier, regrettably, failed to have any influence on Senator Heinz in Washington.

Mr. Speaker: And the question is?

Mr. Pope: He failed to have any influence on the trade negotiator in Washington.

Can the minister tell me in detail what proposals for voluntary restraints of Ontario steel exports to the United States did the Premier support and put to the American administration in Washington?

Hon. Mr. O'Neil: First, I do not feel the Premier failed in Washington at all; I feel he was very successful.

Mr. Brandt: I would hate to see him be a failure. Tell us what he did.

Mr. Speaker: Order. This is question and response period. I wish the members would allow every member to be heard. The minister, with a response.

Hon. Mr. O'Neil: As also mentioned, we feel that the voluntary restraints have worked over the past two to three years and there have been no problems. We feel that this can possibly work again. That is not to say we are not looking at other possibilities of things that can be done.

Mr. Pope: There are 46,000 jobs at stake in this province and the minister responsible for trade has no idea about any specifics of the discussions in Washington. He cannot tell us what the Premier offered specifically by way of voluntary restraint.

Can the minister tell me, then, since he does not know what went on in Washington, what consultations he or the Premier had with representatives of the steel industry, or the steelworkers and the unions representing steelworkers in this province prior to going to Washington and taking that position on their behalf?

Hon. Mr. O'Neil: I believe the honourable member asked the same question a few days ago. As I mentioned to him, meetings have been ongoing for some time now, for many months, and they will continue to go on. Other meetings in the future are scheduled and they have been going on as late as last week.

Mr. Pope: There are 46,000 jobs at stake right across this province. The minister has yet to answer a specific question. There are 46,000 jobs at stake in this industry. What meetings took place, where and with whom? Does he understand the question? What meetings took place since last October, with whom and what positions did he take at those meetings?

Hon. Mr. O'Neil: Again, as I mentioned to the member a couple of days ago, there have been meetings among the Ontario government, the federal government and the government of the United States. There have been meetings going on with the steel people and with the union people, and we will work to see that those jobs are safeguarded in this great province.

SALE OF LANDS

Mr. Gillies: In the absence of the Premier, my question is to the Minister of Municipal Affairs regarding the Vaughan land scandal. On December 8 in this House, the minister informed the House that staff had looked into the possibility of calling an inquiry into this matter and that he had been advised by the town of Vaughan that no inquiry was necessary. Yesterday, the Ontario Provincial Police raided both businesses and residences of practically everybody involved in this matter.

My colleague asked the minister in November whether an investigation was being undertaken into this matter. He said it was ongoing, despite the fact that his staff told my colleague the member for Brock (Mr. Partington) the investigation was completed on September 30).

A ratepayer in the town of Vaughan, Mr. Meyers, now alleges that he brought his concerns about this sale to the attention of the minister's colleague the Minister of Colleges and Universities (Mr. Sorbara) last April. Now that the police are clearly taking this investigation very seriously, why did the minister and his colleague the Minister of Colleges and Universities fail to act on the ratepayers' concerns for a period of some seven months?

1410

Hon. Mr. Grandmaître: I indicated back in December 1986 that my ministry was conducting an inquiry, if one wants to call it an inquiry, in the town of Vaughan concerning the sale of two parcels of land. At the time we were conducting the review, we learned about the Ontario Provincial Police investigation. I said in this House, and I will repeat it so the member and the rest of the House hear it very clearly, when the OPP entered the picture my ministry pulled away from that review. I said I would report back to the House once the OPP review or inquiry was completed. With respect to my colleague from the area, the Minister of Colleges and Universities, I am not aware of these dealings that went on back in April 1986.

Mr. Gillies: I am sure the minister will appreciate that the allegations being made by the ratepayers are very serious indeed, namely, that a minister of the crown was made aware of allegations of municipal corruption in the month of April last year and failed to act on them for a period of some months when it was common knowledge, and I am sure the minister will agree it was common knowledge, that one of the councillors under investigation by the OPP was his colleague's campaign manager.

In view of this very serious situation and the concern being publicly expressed about the conduct of ministers of the crown in this respect, as minister will he request of the OPP that this investigation be broadened to look into the conduct of his colleague, or do we in the opposition have to make that request?

Hon. Mr. Grandmaître: I repeat that this inquiry is in the hands of the OPP. I have great confidence that they will conduct this inquiry thoroughly. I will await the final report before the ministry will act.

Mr. Gillies: I am afraid that is simply not good enough. The minister's conduct in terms of sitting on the report through the fall now is in question. The conduct of his colleague now is clearly in question. Mr. Meyers also tells us that in the month of September of last year the Premier (Mr. Peterson) was --

Mr. Haggerty: Are you saying the OPP will not do a job now?

Hon. Mr. Scott: Questioned by whom? Nobody is questioning it but you.

Mr. Shymko: Do not get upset. Do not get defensive.

An hon. member: I think we have struck a nerve.

Mr. Speaker: Order.

Hon. Mr. Sorbara: On a point of privilege, Mr. Speaker: My friend the member for Brantford has called my conduct into question. He has, and I say advisedly, not properly represented the truth in this House.

Mr. Speaker: Order. I think it is time we all cooled down a little bit. I am somewhat concerned about the language used by the member for Brantford and now by the language used by the Minister of Colleges and Universities. I have to say the minister is not putting forward a point of privilege.

Mr. Gillies: To the concerns of my colleague, these are not concerns originating with myself or the opposition; they are concerns originating with ratepayers in his constituency.

By way of supplementary to the minister --

Mr. Speaker: Directly through the chair to the minister.

Mr. Gillies: Thank you, Mr. Speaker. By way of supplementary through you, the Minister of Municipal Affairs has indicated to the House that he was unaware of any of the activities, or indeed of the knowledge, of his colleague in this regard.

Will he further confirm that Mr. Meyers, the ratepayer in question, spoke personally to the Premier about this last September and wrote to the Premier? Can the minister indicate to the House his knowledge of that exchange of views and what bearing it may have on his determination or lack of determination to press ahead with the investigation?

Hon. Mr. Grandmaître: I can assure the member that I do not know if Mr. Meyers spoke or wrote to the Premier. I can assure the member that last June or July -- I cannot recall the date or the exact month -- I did speak to Mr. Meyers and I reported directly to my ministry. This is when the inquiry was started. That is all I know.

GUARANTEED ANNUAL INCOME SYSTEM

Mr. R. F. Johnston: My question is for the Minister of Community and Social Services. Last December I warned that Canada pension plan increases for the disabled would be matched by reductions by the minister's government in assistance under the guaranteed annual income system for the disabled.

As the cases now start to come in, it is clear the minister is indeed taking money out of the pockets of the disabled. Why does he think that Clive Langman in my riding should lose to the provincial Treasury $135 of the $157 CPP has given him in an increase? He has a total income of $422 a month. How many thousands of others are there like Clive Langman whom the minister is cheating out of their benefits? Can the minister tell me how many millions he will be adding to the Treasury from their pockets?

Hon. Mr. Sweeney: The arrangements provided for the disabled who are transferring to the federal program are twofold. First, they can retain the benefits they have if they are going to drop below the value of the total package. Second, they will have the option of staying on the provincial program as opposed to moving to the federal program.

The member surely understands there is a mandatory agreement between the province and the federal government that all income has to be taken into consideration with respect to assistance programs. If they switch, we have no choice.

Interjections.

Mr. Speaker: I will just wait, if you like wasting the time.

Mr. R. F. Johnston: The minister must remember these are people who are disabled and, by definition of the Canada pension plan, will not work again. I have one Michelle Osporne from Thorold, a victim of strokes. She has lost the entire $191 of Gains assistance she used to receive. This has reduced her $291 increase from CPP to just $100. There is no choice but to stay with the federal program, because it is higher. She has also lost all her drug and medical benefits.

I want to know, and the minister did not answer my question, how many thousands of people are in this position, how many are going to lose their medical benefits and what is the dollar savings to the Treasury for this move.

Hon. Mr. Sweeney: The honourable member seems not to choose to hear the response. The fact remains that the mandatory, not voluntary, agreement between the federal and the provincial government is that all sources of income have to be taken into consideration for someone to qualify for a benefit. I have no choice over that.

1420

The second point I make is that each person who is faced with the decision to move from a provincial program to a federal program has the choice of picking whichever one is more financially beneficial to him or to her. Since individuals will be making that choice and will also be eligible for continued benefits if their total figure drops below what they were getting before, there is no way we can possibly know what the total impact is going to be. We have to allow people the option of making that choice. That is in the process of happening right now.

Mr. R. F. Johnston: This is truly outrageous. A month ago, these people all qualified for the minister's program and for topping up which is totally in his jurisdiction. It is up to the minister what levels he tops it up to, and he knows that.

What has happened to the minister's commitment to raise the disabled rates up to the rates of the elderly? Surely the federal government has just given the minister the perfect opportunity to raise those rates at this time by the large increases they have given. Is the minister not ashamed that the Mulroney Conservative government is more progressive about incomes for the disabled than the supposed reform Liberal government here in Ontario?

My question --

Mr. Speaker: I have already heard about two questions.

Mr. R. F. Johnston: My question is important, Mr. Speaker, because today I noticed that we have an increase in the budget of $919 million, which is almost a billion dollars -- the billion-dollar smile of the Treasurer (Mr. Nixon). How much of that is going into the government's campaign war chests out of the pockets of these people?

Interjections.

Mr. Speaker: Order.

Hon. Mr. Sweeney: The latter part of that question does not deserve a response.

Mr. Rae: It certainly does.

Mr. Speaker: Order.

Hon. Mr. Sweeney: I can advise you, Mr. Speaker, and through you the honourable member, that the additional funds available to the Treasury have included a $92-million increase in my ministry's budget.

Mr. Rae: I did not hear an answer to the question from my colleague and I think we are entitled to an answer. We have a statement here from Ontario Finances, which has been issued by the government and which shows an additional revenue of $919 million. There is an increase of $94 million in lottery profits alone, to say nothing of personal or corporate income tax.

Can the minister tell us how much money his ministry is saving on the backs of those people who are choosing to take a Canada pension disability and are not able to get the money from Gains. How much money is the minister saving?

Hon. Mr. Sweeney: I have clearly indicated that, given the fact that each disabled person has the right to make a choice of which program he wants to have support in, there is no way of knowing how much money is going to accrue to this government. I can make very clear to the member, however, that the range of other expenses to the disabled and many other people in this society is going to use up whatever number of extra dollars are available. There is no surplus; there are no savings.

Mr. Rae: I am sorry, but the minister cannot continue to play this game. He has to understand that when one gives someone a choice between a program that pays $20 or $30 more and another one that pays $20 or $30 less, that person is going to be forced into the federal program. That is the reality. Do not talk about the rich and the poor having the same freedom to live under bridges, which is exactly the kind of freedom he is talking about. Let us talk about the reality of social choice for those people.

We are asking the minister today to tell us what the effect is going to be on his budget with respect to the Gains program. How much money is going to be saved on the backs of these people who are being deprived of money, which one would have thought a relatively parsimonious, to say nothing of incompetent, government in Ottawa has decided to provide them? How much money is he saving by benefit of that program, instead of passing on that money to people who need it every day of the week? The minister knows that full well.

Hon. Mr. Sweeney: The fact that we are expending in excess of $92 million in new dollars above and beyond the May budget would clearly indicate that no money is being saved. The money may be reallocated to other expenses, but no money is being saved -- none.

Mr. Rae: We have seen some examples over the last number of weeks and we heard only today of the government's sensitivity with respect to the disabled. What I want to say to the minister is that, first, it is not $92 million, it is $80 million; so he is $10 million off. Second, the programs which are contained in this release from the Treasurer have nothing to do, apparently, directly with the disabled; they have to do with a number of other problems which are in the Ministry of Community and Social Services.

We are talking about a reduction in benefits, a reduction of a minimum of $100 in payments to people who are disabled. The minister must have calculations galore in the Dickensian calculus for which his ministry is so famous. Precisely how much money is he saving on the backs of these disabled people?

Hon. Mr. Sweeney: Given the fact that each person can choose which program he wants to support, given the fact he is obviously going to choose the program that is more beneficial to him and given the fact that no one will be worse off than before, there are no savings. I repeat that the difference between the May budget and the present expenditures is $92 million. There are no savings.

Mr. Cousens: There is a loose nerve here somewhere, and there is a lot of nerve on the part of the government at this point in not coming forward with a straight answer, because the minister had to know back in November that the federal Minister of National Health and Welfare was about to make a change effective January 1. The Minister of Community and Social Services had to know that a number of the recipients of Gains-D in Ontario would be affected negatively. The minister had to know that something had to be done about it.

What is his interim plan and how many people are going to be affected by it right now? It is a serious problem. People are losing on it; the minister thinks they are benefiting. What is he going to do about it?

Hon. Mr. Sweeney: There was a clear understanding, as the honourable member just expressed, that some people could have been negatively affected. Because of that possibility, I went to the Treasurer and to my cabinet colleagues and got their support for two measures.

The first one is that the benefit package which accrues to the disabled through the provincial program will continue for any person who would be negatively affected by the transfer.

Second, I got the approval and the support that each disabled person could make the choice as to which program he wanted to stay on, in which case no disabled person will be worse off today than he was in November.

1430

Mr. Eves: The minister may be interested to know his ministry has made some commitment that it will grandfather the drug eligibility cards these people are receiving now, but only until the person turns 65 years of age. That does not apply to any new applicants for this program and he is still making these people choose whether they want the federal program or this program. Will he not give this House an assurance today that nobody will lose those benefits, the prescription drug privileges or any benefits anyone has been entitled to under the Gains-D program up until now? Let the minister answer yes or no, today and right now.

Hon. Mr. Sweeney: The obvious reason the benefits under the present program will continue until age 65 is because at age 65 these people will qualify for the benefits as senior citizens anyway.

Second, I have already indicated that anyone who is currently on the provincial program will have his benefits continue if, in transferring to the federal program, he will be negatively affected. What can be clearer than that?

ATTENDANCE OF PREMIER

Mr. Harris: On a point of order, Mr. Speaker: I will be very quick. While we were having the hassle that the Premier (Mr. Peterson) was here, was not here, was coming, was not coming, was afraid to come and now was not coming, I suggested that if the New Democratic Party wished to start off, provided we could pick up a question, we would agree to that. I wonder whether we can pick that up now.

Mr. Speaker: That is entirely up to the House. I was going by the standing orders. They say we rotate, and actually that is where we started. Is it agreed to pick up a question?

Agreed.

Mr. R. F. Johnston: On a point of order, Mr. Speaker: What does a member do when he feels the truth has not been spoken by a minister? We know the disabled are not --

Mr. Speaker: Order. Will the honourable member take his seat? I would like to remind some honourable members, one in particular, that there have been many occasions when I have received notes from members about wasting time in question period. Standing order 30(a) states that you do have an opportunity if you are not satisfied.

HELP CENTRES

Mr. Jackson: My question is for the Minister of Skills Development. The older workers' help centre in Lindsay is being run by two people who have been working there without pay for the last six months because they care about the program there, even though the minister so far has refused to provide any of the $27,000 approved for its operation last spring. The minister had no difficulty in announcing to the media, in the Peterborough Examiner, such funding. Can he please tell this House when he is going to start showing the same kind of dedication and commitment to this program that the workers in Lindsay are showing? When is he going to start taking responsibility for his ministry and forward those funds to the Lindsay centre?

Hon. Mr. Sorbara: My friend knows very well that the unemployed help centres program, which was set up by the previous government, provided for a two-year review. My friend the member for Brantford (Mr. Gillies), who now spends most of his time in the sewer, was for a time minister there.

Mr. Gillies: A class act.

Hon. Mr. Sorbara: From where the member opposite is sitting he should hold his nose.

Mr. Speaker: Order. Minister, response.

Hon. Mr. Sorbara: That review is now complete and I will shortly be announcing our ministry's intentions and the government's intentions with respect to unemployed help centres. My friend should know, because he has studied these matters, the regime governing unemployed help centres is that there is equal commitment from the Ministry of Skills Development, this government and the community. When that equal funding is in place, the help centres generally proceed, but it is the support from the community that calls out the support from the government.

Mr. Breaugh: Mr. Speaker, on a point of order: I probably should not be the one who does this, but I heard the minister say that a member of this House "spends most of his time in the sewer." That may be parliamentary in some places but it should not be parliamentary here and the minister should withdraw that.

Hon. Mr. Scott: Talk to him, Elie.

Mr. Martel: There is a difference between a swamp and a sewer.

Mr. Speaker: Order. If I could have the attention of the members, I am sorry to have to --

Mr. Martel: I have not said he is in a swamp or anything like that.

Mr. Rae: He did not say he lived in the swamp. He said he was master of the swamp.

Mr. Speaker: Order. I understand the member for Oshawa (Mr. Breaugh) heard, I suppose, what the minister said. I am not sure.

Mr. Sheppard: We all did.

Ms. Fish: It is in Hansard.

Mr. Speaker: Order. If the minister said that, I would ask that he withdraw it.

Hon. Mr. Kerrio: Let the member withdraw.

Mr. Martel: No, no.

Mr. Polsinelli: Ask Martel what a swamp is.

Hon. Mr. Scott: A sanitary landfill site.

Mr. Speaker: Order. I really would like to hear whether or not it was said. I could not hear it before. Minister, if you said it, would you withdraw?

Hon. Mr. Sorbara: I must admit I do not keep an accurate record of where the member for Brantford (Mr. Gillies) spends all his time and, on that basis, I will withdraw the comment.

Mr. Shymko: Your mouth runs faster than your brain.

Mr. Eves: Your mouth is going to get you into trouble. Perhaps it already has.

Mr. Speaker: Order. That sounded like a Churchillian withdrawal.

Mr. Jackson: I fear the minister is having trouble keeping track of his public statements as well, because in spite of his response I remind him that he told the Peterborough Examiner the Lindsay help centre would be getting those funds. Frankly, the minister should tell that to Olivia Hotner, the woman who has been providing free service to that community for six months based on the minister's promise. She has been driving 28 miles round trip, every day of the week, at her expense for the gas, the mileage and the time, based on the minister's promise. I am sure she will be quite encouraged to learn that he was more concerned to respond to something said by the member for Brantford than to take seriously the concerns in Lindsay.

Mr. Speaker: And the supplementary is?

Mr. Jackson: Now that the Lindsay help centre has received nothing, the Peterborough help centre is closed and London, Niagara and Hamilton have now been forced to borrow money to meet payroll, will the minister advise when he is going to honour a commitment to older unemployed workers in Ontario? When are we going to see that commitment from his government?

Mr. Speaker: Order.

Mr. Jackson: When is it going to be a priority? When is Lindsay going to get the funding?

Hon. Mr. Sorbara: There were a number of supplementaries there. I want to point out that I did not want to show any disrespect for Ed Norton or all the other people who work hard in sewers.

I say to my friend who is so concerned that I suspect I will be making an announcement about unemployed help centres within 10 days. There have been problems with community support in the two help centres he mentioned, in Peterborough and Lindsay, and there have been other staffing problems. If he suggests that I ought to close my eyes to these problems and provide funding, notwithstanding that there have been problems brought to my attention, that is not the kind of management our government likes to champion. That is why he is over there and we are over here.

1440

TECHNOLOGY FUND

Mr. Philip: I have a question for the Attorney General. If the minister were to receive a letter from the government of Ontario offering to commit on its behalf a startup grant for a particular project that he was in charge of, would he not consider that a pledge that he could take to the bank and borrow money on for his particular project?

Hon. Mr. Scott: As Attorney General, I am not able to give legal advice to private citizens.

Mr. Philip: Judging from past history, the Attorney General does not seem to be able to give very good advice to the government either.

The Premier (Mr. Peterson) has stated in this House that there was in fact no contract between the government of Ontario and Abe Schwartz, the president of Exploracom. Yet the Attorney General will be aware that on May 28, the Premier wrote: "Dear Abe...I am pleased to commit on behalf of the Ontario government a startup grant of $17.5 millions. Will the minister not agree this is an affirmative response to what is obviously an application for money by Abe Schwartz? Will he not agree that places a contractual obligation of some sort on the government of Ontario?

Hon. Mr. Scott: With respect to the second question, I do not agree.

STEEL EXPORTS

Mr. Pope: Back to the Minister of Industry, Trade and Technology, who has a responsibility to 46,000 steelworkers in this province and to the steel industry of this province. We would like to know specifically what suggestions our Premier (Mr. Peterson) had in Washington with respect to voluntary restraints on steel exports to the United States. What specific commitments did he make? Is the minister saying he consulted with the steel industry in making those submissions?

Hon. Mr. O'Neil: What I am saying is that the Premier was in Washington, he had some very interesting discussions, he put forward points on behalf of Ontario and the steel industry here and I think he did an excellent job in doing that.

Mr. Pope: On intergovernmental relations, this government has a clean slate. It has lost every single one, including the environmental one today. They are totally useless. The Attorney General (Mr. Scott) is useless. There are 46,000 steelworkers' jobs in jeopardy.

Mr. Speaker: Order.

Hon. Mr. Scott: Pat Carney speaks. When you have Pat Carney on your side --

Mr. Pope: And we have you on that side. It is a disgrace too.

Hon. Mr. Scott: It is a disgrace too, is it?

Mr. Pope: Yes.

Hon. Mr. Scott: It does not match Pat Carney.

Mr. Speaker: Order. It is time the members started thinking a little more about decorum. I am speaking to all members. It is time to think about a little more decorum. I ask the member who is going to place a supplementary to place it through the chair, and if he wishes to point, to point at the chair.

Mr. Pope: Thank you, Mr. Speaker. When he was willing to sell out the lumber industry, he had studies that showed between 500 and 1,000 jobs in northern Ontario would be lost. When he is willing to sell out the steel industry, what studies has he done to show what jobs would be lost in Ontario as a result of this sellout, unilateral, on behalf of the steelworkers of the province?

Mr. Fontaine: There was more lumber sold last month than any month before.

Hon. Mr. O'Neil: I am reminded by the member for Cochrane North (Mr. Fontaine) that there was more lumber --

Mr. Davis: I would be careful who I took advice from if I were you.

Hon. Mr. O'Neil: I would take advice from him any day because he was one of the best ministers we ever had.

FOOD LAND PRESERVATION POLICY

Mr. Hayes: My question is to the Minister of Agriculture and Food. The minister will be aware that the city of Thorold is proposing to rezone to industrial and commercial approximately 2,200 acres of agricultural land. The Minister of Municipal Affairs (Mr. Grandmaître) has indicated in a letter dated December 17 to the chairman of the regional municipality of Niagara that he supports this proposal and that he will be asking the Minister of Agriculture and Food to endorse this same proposal. What is the minister's position on having this agricultural land become commercial or industrial?

Hon. Mr. Riddell: When any of my colleagues confront me with land severances or trying to use agricultural land for other purposes, they come up against a pretty tough customer. When that proposal comes before my ministry, the honourable member can be assured that my ministry will be commenting in compliance with the food land guidelines, and the food land guidelines state quite emphatically that where other lands can be used, then the agricultural land must be kept for agricultural purposes.

Mr. Hayes: I am very pleased to hear the minister's remarks that he is really in favour of preserving agricultural land. The fact of the matter is that in this area and across this province there is a lot of other property that is maybe unsuitable for agriculture and would be more suitable for industrial and commercial development. I would like the minister to assure us -- he raised the issue of the provincial food land guidelines -- that he will not support this proposal from the Minister of Municipal Affairs and that he will explain to him how important it is to preserve agricultural land in this province.

Hon. Mr. Riddell: The Minister of Municipal Affairs agrees with me that, wherever possible, we should be preserving agricultural land. We will certainly have a look at the proposal when it comes before my ministry and we will be commenting. I will be consulting with the Minister of Municipal Affairs about the matter. We do try to preserve agricultural land wherever possible, and that is the reason the food land guidelines are there.

Mr. Brandt: I would like to ask a question of that tough customer, the Minister of Agriculture and Food (Mr. Riddell), but I feel compelled to ask a question of another tough minister, the Minister of Industry, Trade and Technology (Mr. O'Neil).

Hon. Mr. Riddell: Ask me.

Mr. Brandt: I would love to, but I have to move to the member's colleague today.

AUTO PACT

Mr. Brandt: My question for the Minister of Industry, Trade and Technology is to inquire about some of the conversations that went on in Washington with respect to the auto pact. As the minister is well aware, there are very few items that ever reach a degree of unanimity in this House. This is one issue on which all parties and all sides of the House are in agreement that we want the auto pact retained in its present form.

Can the minister give us some indication of some of the conversations that were held between the Premier (Mr. Peterson) and those with whom he came in contact in Washington, and his impressions of those conversations with the intent of preserving the status quo in the auto pact?

Hon. Mr. O'Neil: I have to agree with the honourable member. I also was here for the discussion that was put forward by the Leader of the Opposition (Mr. Grossman) concerning the importance of keeping the auto pact off the table. I can assure the member that many of the discussions the Premier had in Washington concerned this matter and that he put that point across very strongly.

1450

Mr. Brandt: The minister is aware that his ministry conducted some studies with respect to potential job losses that may occur as a result of some form of free trade agreement. Would the minister share with this House any studies or any numbers he might have with respect to potential job losses if, in fact, the auto pact is requested to be renegotiated or withdrawn by the US government?

Hon. Mr. O'Neil: As the member knows, our ministry did a great number of studies, and those studies, I understand, have been released or will be released for anyone who would like them. I will inquire into this matter, and if the member has not already received it I will make it available to him if it is there.

PENSION FUNDS

Mr. Mackenzie: I have a question of the Minister of Financial Institutions. The minister will be aware of the concerns I have brought to him about the regulation change we just had in terms of bridging in private pension plans if people are going to apply for the Canada pension plan early retirement benefit.

The new regulation states that a bridging supplement may not be reduced if a person is entitled to receive an early retirement benefit under the CPP. It does net say, as it does in the Quebec legislation, that a bridging supplement may not be reduced if a person is receiving an early retirement CPP benefit. This distinction is crucial, and the minister will know that in our questions to the office of the superintendent of insurance we have not been able to get a clear answer on that.

Can the minister tell us whether he has looked into the matter and whether he is prepared to make the changes necessary in the regulations?

Hon. Mr. Kwinter: I thank the member for the question. He is right. He broached the subject with me yesterday, and I am looking into it; but I want to say it is the intent of this government that those people who take early retirement are not in any way put in a negative position because of that provision. We are going to make provisions to see that does not happen.

Mr. Mackenzie: I thank the minister, if he is telling me he is prepared to make the changes, if necessary. He must be aware that a large number of the unions and a number of individuals who are facing retirement do not know whether they can make the move now; if they are already on an early retirement through a private plan, whether or not they can apply for CPP without the loss of some of that private plan. We hear, even from the Pension Commission of Ontario, that it does seem to be a potential loophole in that regulatory change. I hope the minister takes action to close that hole very quickly.

Hon. Mr. Kwinter: I want to assure the members of this House it is our intent to make sure that any employee who takes early retirement is not in any way put in a negative position because of those provisions.

OCCUPATIONAL HEALTH AND SAFETY

Mr. Martel: I have a question for the caretaker of the swamp, the Minister of Labour.

Interjections.

Mr. Speaker: Does the member have a question, and to which minister?

Mr. Martel: The Minister of Labour, pardon me, Mr. Speaker.

On May 22, 1986, there were orders issued at --

Mr. Gordon: On a point of order, Mr. Speaker: I understood it was the official opposition's turn to ask a question.

Mr. Speaker: With respect, my eyes go in rotation. I did not see anyone up, so I took the member for Sudbury East.

Mr. Martel: If they are asleep at the switch, that is not my fault.

Mr. Speaker: Once again, does the member have a question and to which minister?

Interjections.

Mr. Martel: To the Minister of Labour. I cannot even hear myself think, Mr. Speaker.

On May 22, 1986, there were orders issued at Lake Ontario Steel Co. in Whitby for silica and lead assessments to be complied with by June 13, 1986. These orders were not complied with by June 13, 1986. The inspector visited the plant on January 16, 1987, and noted, "The lead and silica assessments required by the Ministry of Labour are not yet completed;" eight months later. I would like to remind the minister that lead and silica were designated in 1981 and 1983.

Mr. Speaker: Question.

Mr. Martel: Can the minister tell me why this company has been allowed to violate the act with impunity, and has he requested a special action yet?

Hon. Mr. Wrye: To the permanent keeper of the quagmire, I am not aware of the specific instance, but I am very pleased that the honourable gentleman has addressed this question, because it shows that the compliance dates we have begun to put on these matters are bringing these matters to a head. I could not agree more with my honourable friend when he points out that the lead and silica regulations have been in place for a long time and yet apparently this company is not yet in compliance with them.

I will check immediately into the individual circumstances. I would only say, while I am on my feet, in answer to the other part of my honourable friend's question, that a special action request under section 37 of the act would be initiated if considered appropriate by the inspector who is involved in this investigation.

Mr. Martel: I find it difficult to understand how the minister can say this is coming to a head under his new policy, since this occurred last June. It is now eight months and nothing has happened.

But since he is so sure these things are working, to use just another example, I want to bring the minister up to date on the situation at Waferboard in Timmins, which started using the substance in July 1985. In the minister's letter to me of January 8, 1987, he states: "On July 7, 1986, an order was issued to develop a control program for isocyanates."

To date, that control program is not in place. Can he tell me when he is going to force the company, which has been required now for over a year, to comply and have that control program in place?

Hon. Mr. Wrye: I believe there has been a concern in terms of Waferboard as to whether it is in compliance. I do understand that notice of noncompliance has been issued and a special action request has been prepared. Certainly, I think the honourable gentleman would expect that in some instances, where the orders that our ministry writes are not complied with, and we are not always able at the end of the day to force compliance in the first instance, we will then take further action.

In the Waferboard situation, which has again dragged on for far too long, I note that the honourable gentleman acknowledges that that further action is being taken. We intend to get that company into compliance, because this matter is a very serious one at that company, as at so many others.

ROTATION OF QUESTIONS

Mr. Gordon: On a point of order, Mr. Speaker: In the past, we have had occasions where a Progressive Conservative member has been recognized by you, and then you have noticed that the member for Brampton (Mr. Callahan) has stood up and have insisted that under the orders of rotation, standing order 29(b), the Brampton member be allowed to pose his question in following the normal order of rotation. I would like to make the point here that I believe there has been an error in the decision you made.

Mr. Martel: On the same point of order, Mr. Speaker: I understand the Speaker's difficulty with these things, but surely the official opposition have to agree that their members have to stand up in their place so the Speaker can recognize someone.

Interjections.

Mr. Martel: No, you were not standing. Baloney.

Mr. Speaker: I have listened very carefully and I will certainly try to make certain that the standing orders are carried out as set out and approved by all members.

REPORTS BY COMMITTEES

STANDING COMMITTEE ON REGULATIONS AND PRIVATE BILLS

Mr. Callahan from the standing committee on regulations and private bills presented the following report and moved its adoption:

Your committee begs to report the following bills without amendment:

Bill Pr15, An Act respecting the City of Hamilton;

Bill Pr59, An Act respecting the City of Mississauga;

Bill Pr60, An Act to revive Williams Creek Gold Quartz Mining Co. Limited;

Bill Pr64, An Act respecting the Town of Wasaga Beach.

Motion agreed to.

1500

STANDING COMMITTEE ON THE OMBUDSMAN

Mr. McNeil from the standing committee on the Ombudsman reported the following resolution:

That supply in the following supplementary amount and to defray the expenses of the Office of the Ombudsman be granted to Her Majesty for the fiscal year ending March 31, 1987:

Office of the Ombudsman program, $100,000.

MOTION

COMMITTEE BUSINESS

Hon. Mr. Nixon moved that the estimates of the Ministry of Labour be transferred from the standing committee on resources development to the standing committee on social development, to be considered following completion of the estimates of the Ministry of Education.

Motion agreed to.

INTRODUCTION OF BILL

CANADIAN OPERA COMPANY ACT

Ms. Fish moved first reading of Bill Pr39, An Act respecting the Canadian Opera Company.

Motion agreed to.

ORDERS OF THE DAY

NURSING HOMES AMENDMENT ACT (CONTINUED)

Resuming the adjourned debate on the motion for second reading of Bill 176, An Act to amend the Nursing Homes Act.

Mr. Speaker: I believe the member for Windsor-Riverside was making some comments on Bill 176. Does the honourable member have any further comments?

Mr. D. S. Cooke: I just need a few more moments, after I get organized here or try to get organized. I want to make a few comments on profit versus nonprofit nursing homes in the province and then some comments about specific aspects of the bill that is before the Legislature today.

I can see that everybody in the assembly is very much interested in this legislation.

Mr. Speaker: I notice there are, and from what I hear I believe there are, a number of private conversations. I am certain they are very beneficial to the individuals who are participating, such as the member for Scarborough Centre (Mr. Davis) and the member for Sudbury East (Mr. Martel), but it is very distracting.

Mr. D. S. Cooke: I want to make a few comments about private versus nonprofit nursing homes in this province. I stated yesterday that currently in Ontario about 96 per cent of the nursing home beds are in the private profit sector. As the minister announced in the past few weeks, there will be 1,000 new nursing home beds allocated across this province, 600 of which have already been allocated to various communities.

It is my understanding, and I think it is accurate to say, that there is no active search and there are no active ministry officials in the communities who attempt to go out and search for nonprofit groups so we can realistically expand the nonprofit basis of nursing homes in this province.

If we are to be serious about nonprofit nursing homes, it seems to me the minister and the ministry are going to have to become active in the communities to encourage nonprofit groups. They are going to have to go and tell nonprofit groups about the apparent new emphasis on attempting to get nonprofit groups involved in the delivery of extended care services in the province.

At this point, one can only come to the conclusion that the ministry is using the appropriate rhetoric in saying it wants nonprofit groups, but when these 1,000 beds are allocated there will be, in my view, absolutely no change in the ratio of profit to nonprofit nursing homes beds in this province.

As I stated yesterday, there is no other sector of service to human beings in this province that uses the private profit sector to the same degree that care of our elderly does. It is a further reflection of the former government's attitude towards the elderly in this province and it is a reflection of the attitude of this minister and this government that it does not really matter whether it is the private profit sector when it comes to care of the elderly. Whether the care is adequate is insignificant to this government. It is about time that attitude changes and that we look at whether the private profit sector is providing appropriate care to our senior citizens.

The new 1,000 beds that will be in the system will cost the system, the taxpayers of this province and the residents of nursing homes about $18 million a year. As I said yesterday, that is equal to the total amount of money being spent on home care to the frail elderly in the 16 communities that have been designated so far.

There is nothing in this proposed legislation which takes care of or addresses the severe understaffing that occurs in the nursing homes of this province. Currently, the regulations attached to the legislation call for a minimum of one and a half hours of nursing care per day or a ratio of nursing care that meets the needs of the residents of the nursing homes.

It is fair to say that when inspectors go out to the nursing homes and figure out the ratio of staffing, they have no idea whatsoever what the needs of the residents are. Assessments of the residents are hit and miss. They are not regular and they are not done by the ministry on a very regular basis. There is no way for the inspectors to determine what the needs of the residents are. The reality is that the one and a half hours of nursing care per day become not the minimum but the minimum and the maximum and, therefore, the needs of residents are not being met.

There are many ways that nursing homes in this province get around the staffing regulations, and I will put one out. I have come across many nursing homes which use nursing staff in their laundries. While those staff members have absolutely no patient contact, they are still figured into the ratio. The one and a half hours of nursing care per day is meaningless. It does not reflect the needs of the residents of nursing homes in this province at all. That is a crucial issue in reforming the nursing home system that is not addressed by this bill.

We will look at amending the statement of principles, which we hope to turn into a bill of rights that will beef up the staffing requirements. I would have preferred that the minister introduce amendments of his own or additions to this bill that actually addressed the staffing problem. It is fair to say that this issue of staffing will be a focal point and an important aspect of this bill, which will be debated not only by members of the Legislature when we are out in committee, but also by the various consumer groups and residents' groups, all of which are very concerned and upset that nothing has been proposed to address the severe understaffing of our nursing homes across this province.

The enforcement of the Nursing Homes Act is very important in establishing whether the act has any meaning at all. Up to November 30, 1986, there were 108 charges against nursing homes. There were only two convictions, for a total of $407.50. In 1985, there were 41 charges and five convictions, for a total of $1,300. It is very hard for us in this party to believe this minister is serious about enforcing the Nursing Homes Act when the record since he has been minister is examined closely. In two years, there were 149 charges and seven convictions, which can hardly be considered a crackdown on the nursing home industry of this province.

1510

There is a proposal in the new legislation that the charges will result in higher penalties. The reality is that the proposal has no minimum fine whatsoever, so in the practical world the reality is that judges will continue to determine what the level of fines will be and it is very likely that the fines will continue to be minimal. Therefore, the violations of the Nursing Homes Act and any charges and subsequent convictions and the very low fines just become a cost of operation.

In fact, the way it has operated in this province for many years is that if you violate the act, the ministry writes up a compliance order. The ministry then comes back and decides whether you are in compliance. If you are not in compliance, it will write another compliance order, and that can go on for several months, if not years. Finally, the ministry might decide to lay a charge. Then the charges can take two or, in some cases, three years to be dealt with in the courts and you might get a $50 fine.

The reality of the situation is that it is much less expensive -- in fact, it is much more profitable -- to violate the act, because the actual convictions and fines are so low that if, for example, you cut back on staffing, the amount of money you save in one day from cutbacks in staff will more than pay the fine; so you can boost your profits by violating the act and then simply pay the fine after you are convicted, maybe two or three years down the road.

If the minister is serious about reforming the nursing home system, there has to be a completely different philosophy towards compliance with the act and violations of the act. If you are driving on Highway 401 or one of the freeways in our province and you are violating the speeding laws of this province, the police officer does not pull you over and say, "We would ask you to comply before we charge you." If you are violating the act you are charged, and there is an expectation that you are going to pay the fine.

It seems to me the same rules should apply to the nursing homes of this province. If they violate the Nursing Homes Act, they should be charged and they should be dealt with severely in the courts. The only way that can be done is by a different philosophy of enforcement by the Ministry of Health and by a different fine structure that has minimum fines that are substantial and make it costly to violate the Nursing Homes Act.

I would also like to spend a couple of minutes talking about the statement of principles that exists in the proposed legislation. I think it should be made very clear that this is not a bill of rights the minister is proposing. It is not a bill of rights; it is a statement of principles. There is no way of enforcing this statement of principles, and it seems to me, if we are to be serious about reform of the Nursing Homes Act, the statement of principles that is proposed has to be turned into a bill of rights.

We will be proposing amendments along those lines when we get out to committee so that there can be enforcement by the individual residents of nursing homes and enforcement by the nursing homes inspection branch. It seems to me the bill of rights can be expanded and improved so that some of the issues, like staffing, will be addressed by this bill.

Finally, I point out that we have some real concerns about the proposed residents' council, the residents' council advisory committee and the residents' council advisory committee adviser, which is the system of advocacy that is proposed in this legislation. It seems to me we can support the concept of recognizing in the legislation that there is a role for residents' councils, but it is not the responsibility of the residents to enforce the Nursing Homes Act. It is not the responsibility of residents to analyze the budget and the statement of profit and loss that will be required under this legislation.

If we are serious about advocacy, we will accept the recommendations of groups like Concerned Friends of Ontario Citizens in Care Facilities, who favour the proposal of Advocacy Ontario, an independent advocacy procedure that not only will be playing a role with residents of nursing homes but will also be playing a role of advocacy with other groups in our province as well: the physically disabled, the mentally disabled and other groups that are vulnerable in our society.

It seems to me this overall advocacy program would make a lot more sense and would have a real power of advocacy, since they would be at arm's length from the government and from the various ministries and would have a proper mandate, as opposed to the lack of any kind of mandate for the proposed residents' council and residents' council advisory committees and so forth.

We will want to listen very carefully to presentations that are made before the committee, try to present amendments to this section of the bill that will properly define the roles and properly accept the role for residents' councils and not try to use residents' councils to enforce the act or not try to co-opt either residents' councils or their advisers into the system. Instead, the government should allow them to play the important role they can, will and have played, but recognize that it is not the kind of advocacy that would provide for basic reform in the nursing home system.

As I said yesterday, we accept that these amendments that are being proposed are substantial reforms to the Nursing Homes Act. In our view, they do not go nearly far enough. When we have our public hearings later this month and in March, I suspect we will be able to come to a consensus for further amendments that will improve the Nursing Homes Act and, I hope, will improve the quality of life and care of residents in the nursing home system across the province.

We in the New Democratic Party are happy that some of the amendments, such as financial disclosure and controls on ownership that we have been advocating for many years, have been accepted as part of the accord. The accord did provide for nursing home reform.

We are quite upset that it has taken nearly two years for these short-term amendments to come forward. When the overall new extended care act comes forward in the near future, we hope the process of reform will not take nearly as long as this process has taken with the current minister.

We look forward to the public hearings and further improvements in these proposals.

Ms. Hart: I have a few brief comments in winding up the debate. First, I would like to take the opportunity to thank the critics who were involved in the debate. It is always interesting to hear the other sides of the issue, although we do not always agree, as in this case.

This legislation, Bill 176, is not the answer to all the problems of our seniors living in nursing homes in Ontario but, no doubt, the members will agree it is a significant first step in improving the quality of care and improving the quality of life for those nursing home residents.

In addressing the existing defects in the legislation, pending a comprehensive review which we talked about yesterday and today, I would like to respond very briefly to the members who have spoken.

The member for Lincoln (Mr. Andrewes) talked about his concerns on the enforceability of the statement of principles in the bill. I believe the member for Windsor-Riverside (Mr. D. S. Cooke) also alluded to that concern.

In fact, in my view, the statement of principles is fairly clearly set out in the amendments. I have dealt with judges and many cases in dealing with plain, ordinary meanings of words. I do not think they will have any difficulty coming up with what these words mean. Clearly, the rights of the residents can be enforced in several ways, as mentioned in the amendments.

First, the nursing homes that fail to operate in accordance with the principles will be in violation of the act and subject to fines of up to $5,000 on a first offence and $10,000 for subsequent offences.

Second, the residents' rights will be deemed to be part of the contract between the homes and residents and, therefore, individuals will be able to sue owners who fail to comply.

Finally, nursing homes that are in serious breach of these principles could have their licences revoked.

1520

The second aspect of concern the member for Lincoln mentioned was that there was an abdication of responsibility by the minister to the residents' councils. The enforcement system in the act will remain in place, of course. What we are doing is encouraging residents to become more involved in the process. Often the residents are the first to be aware of a possible violation, and the powers of the residents' council advisory committee and the residents' council will merely complement, not replace, the minister's authority in that regard.

The member for Lincoln also referred to the advocacy aspect of the residents' council. These amendments do not deal at all with advocacy. That is a separate topic altogether, which is currently being looked at by Father Sean O'Sullivan in his review of advocacy for vulnerable adults. At that time, it will be more appropriate for both members to deal with that subject.

The member for Windsor-Riverside had some concerns about staffing levels. He indicated that these amendments did nothing to help the problems of staffing levels in nursing homes in this province. In fact, the amendments authorize the minister to enter into contracts with specific nursing homes for extra services. This mechanism, rather than an across-the-board subsidy and a per diem for each home, allows us to target our resources so that additional money is available only where there is a proven need. We want to be certain that every new dollar results in improved care for residents, not more profit for owners.

The member for Windsor-Riverside was quite adamant in yesterday's debate that the whole thrust of the amendment did not have anything to do with reform in nursing homes in Ontario. I take great exception to that. In fact, these amendments deal primarily with the quality of life and the quality of care in nursing homes for the elderly in this province. This government has shown itself to be committed to a humane and dignified old age for the residents of this province. While this is an interim step, we are involved in a wholesale review of the extended care legislation. These amendments do go some way towards alleviating the problems in nursing homes in Ontario.

I am very pleased at the support of the two parties opposite for the amendments and look forward to the continuation of this lively debate in committee. I move second reading of the bill.

The Acting Speaker (Mr. Morin): Second reading of the bill should be moved by the minister. You did not introduce the bill.

Ms. Hart: That is right.

Hon. Mr. Elston: It is my privilege to add a few comments with respect to the bill as it has been introduced for second reading. I have to say I have a great deal of relief now that I know the bill will be supported on second reading by both the official opposition and the real opposition, the third party. We understand members opposite may have concerns of varying natures with respect to some of the proposals being brought forward, but the healthy discussion which I am sure will follow in committee will alleviate a number of their areas of concern, when they hear that in fact the concerns they have raised in large part have been addressed.

With respect to some of the doctrinaire statements, as I think they were predescribed by the member for Lincoln as he attributed some sort of what will we say -- as he indicated he felt the member for Windsor-Riverside would address --

Mr. Andrewes: Doctrinaire.

Hon. Mr. Elston: I am sorry -- doctrinaire statements that the member for Lincoln anticipated from the members of the third party.

With respect to the question of the ownership of nursing homes, I am sure the comments of the member for Windsor-Riverside are made from a deeply held conviction that there should not be any for-profit organizations involved in the nursing home business, and I accept his statements at face value.

It might be interesting, however, to note that a number of his colleagues in the New Democratic Party from time to time provide me advice that, in fact, private owners of nursing homes should be in receipt of a number of beds to complement or round out the number of beds currently owned and operated by those people.

I can think of one particular facility in Hamilton which gained the attraction of members of all parties who wrote to me encouraging me to increase the number of licensed beds in those facilities. I can also tell the member for Windsor-Riverside that I received a copy of correspondence which he directed to a previous minister. It came directly from the owner of a particular private nursing home in St. Thomas in those days. It was an indication that if the inspection records were appropriate the member for Windsor-Riverside would recommend that there be 10 beds added to that facility for a private operator.

That being the case, we know that everybody has an interest in providing suitable accommodation for people in Ontario. I take it that in those situations where there are facilities being operated in a manner which is in compliance with our act, people would choose to recommend that we add facilities to provide services for those people.

The member for Windsor-Riverside also made a large point of the fact that there might not be any other choices for people. I can agree with the honourable gentleman that there were not as many choices in days gone by as there ought to have been. As the case would result, we have moved to address that. We have moved to provide improvements in the home care program; we have moved to introduce the integrated homemaker program across the province and, in fact, have six of those programs up and operating. Ten more have been introduced for February of this year; and I think the honourable gentleman will know and, in fact, if he had not already spoken in such a low-key manner yesterday and today on this same topic, he would congratulate us for moving to provide those extra choices to people. Surely, our job is to provide people with the opportunity of choosing whether they live in nursing homes or in other accommodation.

Be that as it may, the choice is now being made available for people to do just that. However, under the current circumstances, we recognize that we must move to improve the lot of those people who do require nursing home attendants.

The amendments proposed here for all of us to consider, and which I presume will be considered at length in the committee stage, will increase the quality of life for those people who must have nursing assistance.

It seems to me we are moving in the right direction. I heard from members of the two opposition parties that they thought the steps were good and positive ones, although I also acknowledge that they do not always agree with the provisions contained therein. That is the privilege of the people who look at legislation. We will be going into committee to examine exactly what parts might be improved from their point of view.

I welcome the committee participation. I welcome the challenge of improving the benefits and the lot of the people of the province who require nursing home assistance. I think these amendments will go a long way towards unravelling some of the mysteries that surround the operational side of the nursing home business. I look forward to continuing to improve upon the benefits which are available to the senior citizens of Ontario.

Motion agreed to.

Bill ordered for standing committee on social development.

1530

HEALTH FACILITIES SPECIAL ORDERS AMENDMENT ACT

Hon. Mr. Elston moved second reading of Bill 177, An Act to amend the Health Facilities Special Orders Act, 1983.

Hon. Mr. Elston: There are very few comments to make on this piece of legislation except to say it is required as a companion piece to Bill 176, about which debate has just been completed on second reading. From my standpoint, it would be productive if the two bills were referred to the same committee to be dealt with in tandem as we go through the hearing process and to come back to us in the House together after having gone through the hearing process.

Mr. D. S. Cooke: Most of the comments were made by both critics when we were dealing with the previous bill. I appreciate what the minister said, and we also expect this bill will go to committee for public hearings. I have one major concern and that is the repeating of the philosophy in this bill, that nursing homes continue to be given the opportunity to comply with the Nursing Homes Act and that it has to be proved that they have been given several opportunities to comply with the act before the ministry can take the appropriate action of taking over a nursing home under this legislation.

It seems to me, as I said previously, that if the Nursing Homes Act is violated, we should not continue to follow the philosophy that nursing home operators continue to be given the opportunity to comply with the act. If you break a piece of legislation by speeding on the highway, the police officer does not stop you and say, "Slow down your speed and we will give you an opportunity to comply with the act." You are fined and given a ticket.

If a nursing home violates the Nursing Homes Act and if it violates it in such a way that the ministry has to consider taking over that nursing home, we know it is a very serious violation and that is the approach we should take. The nursing home should be taken over. In cases where they violate the act to the point where they are simply cited for a violation and fined if they go to court, we should be very strict. There is no reason why there should be an opportunity on a regular basis to comply.

If a nursing home breaks the act, it should suffer the consequences of breaking the act, especially when we understand that we are dealing with frail, vulnerable people in our society. I have a concern that this legislation perpetuates the philosophy that allows nursing homes not to comply with the act and gives them too many opportunities to come into compliance.

Mr. McClellan: This is important legislation that is being passed today, although it will be passed very quickly. In many respects, it is a very historic step that is being taken. I wanted an opportunity to participate at least briefly in the debate. We stand here in February 1987 with legislation that is finally going to be enforceable. I suppose this is an accomplishment of sorts, but it really has to be red-flagged that we have arrived at this late date in the 20th century and the Legislature of Ontario is finally bringing in nursing home legislation that, we think, hope and pray, can actually be enforced.

When I had the privilege of serving as Health critic for the New Democratic Party, we raised a number of cases of the most flagrant violations of the Nursing Homes Act and regulations. The minister of the day, the member for St. Andrew-St. Patrick (Mr. Grossman), who was, I think, impressed by the seriousness of the violation of the Nursing Homes Act and regulations, found to his absolute horror that the Nursing Homes Act was completely unenforceable; that the government did not have the authority to take away a nursing home licence from the Kentucky Fried Chicken operator who had purchased the nursing home in question in the Alliston area; and that the government, to enforce the law of Ontario, had to come before this assembly and ask for the emergency passage of additional legislation in order to be able to enforce an act that had been on the statute books literally for decades. This was as recently as 1983.

I cannot remember when the first nursing home act -- 1972 was the first legislation. The first attempt at serious enforcement, and by that I mean the removal of a licence from an unworthy operator who was putting his residents at risk, was in 1983-84. The ministry discovered that it completely lacked regulatory authority.

This minister has been in office now for some 19 months. We think it has taken a long time, quite frankly, to get to this stage, but we are confident that at least the government has armed itself with the regulatory powers that it needs. It remains to be seen whether the government has the will to enforce the legislation that will be passed here this afternoon.

It is still clear to us that there is an insufficiently large inspectorate, and it is still clear to us that the basic policy premise of the Ontario government is fundamentally flawed and that the reliance on private sector for-profit nursing homes is a dangerous policy.

It is a dangerous policy, and I stress that to the minister, because the search and quest for profit -- and it is a matter now of empirical observation and record -- in the nursing home industry has come and will continue to come at the expense of quality of care. It is as simple as that. Any business is based on cutting costs and enhancing profit. That is what business is all about. That is the basic law that businessmen live by or die by, and in the business sector it is entirely legitimate. It is equally illegitimate when it is applied to the field of human service, and it leads to the kinds of abuses -- I would say the kinds of atrocities -- that have been documented in this assembly time after time after time over the past 10 years.

We have two nursing home systems in this province. We have parallel systems. One, under the jurisdiction of the Ministry of Community and Social Services, is run on a nonprofit basis, which I believe provides quality of care. It certainly does in my own community of Metropolitan Toronto. We have another system, the free enterprise system, the for-profit system, for extended care patients, run under the jurisdiction of the Ministry of Health, paid for, ironically, 100 per cent by the taxpayers of this province, which I feel is a second-rate, second-class service which has demonstrated over the past 20 years that it is incompetent to provide quality of care; that the profit motive and quality of service are incompatible.

Mr. D. S. Cooke: Even Dorothea Crittenden said that.

1540

Mr. McClellan: My colleague points out that a distinguished former deputy minister, Dr. Dorothea Crittenden, studied the nursing home situation and came, quite independently, to precisely the same conclusion.

Sooner or later, the government of Ontario is going to have to face up to the fact, whether it is in the nursing home field, the education field or the field of day care, that there is no room for the business ethic or the laws of profit and loss, which apply so appropriately the business sector.

This is not to say we cannot insist and demand first-class administration, administrative competence and thrifty administration, but it is quite clear that when the laws of the marketplace and of profit and loss are applied in the field of human service delivery, the result is a disaster. The result puts vulnerable people at risk. The results, quite frankly, cannot be tolerated in a civilized society.

I put the government on notice that the passage of this legislation does not end the debate on nursing homes in Ontario. We will continue to monitor conditions in private sector for-profit nursing homes with as much vigilance as we have over the past 10 or 15 years. I have put the minister on notice that we will continue to raise violations and abuses of patients. We will continue to raise instances of failure of the regulatory branch of his ministry. I say to the minister with all sincerity that if he stays in this portfolio, his work is only beginning with the passage of this legislation.

Again, I stress the fundamental absurdity of a dual system under separate ministerial jurisdiction, one for-profit in the Ministry of Health, the other nonprofit in the Ministry of Community and Social Services; one a first-class system in the Ministry of Community and Social Services, the other a second-class system in the Ministry of Health. This situation cannot be tolerated and should not be tolerated. The kind of rationalization that the previous regime was incapable of achieving has to be achieved.

l know the difficulties of forcing bureaucracies to yield some of their power and privilege, to say nothing of their budget and staff and to say nothing of their jurisdiction and authority, but it has to be done. Heads have to be knocked together.

Perhaps the best way to do it is to look at a ministry for seniors. Perhaps one way of doing it is to take it out of both ministries and put it into a third ministry, where perhaps it can be rationalized. That is at least a suggestion I am sure the government is exploring, but it cannot continue. The services for seniors, whether institutional care or community-based care, are split between the two competing ministries of Health and Community and Social Services.

It has led to chaos in institutional care and chaos in community-based care, and the current compromises are not solutions. They are temporary; they are ad hoc; and they will not put in place either a quality residential care system for the frail elderly or a comprehensive community-based support system for those who are able to live in independence in their own homes.

Until these problems are solved, the Minister of Health (Mr. Elston), the Minister of Community and Social Services (Mr. Sweeney) and the Minister without Portfolio responsible for senior citizens' affairs (Mr. Van Horne) are going to be continuously firefighting, and we in the opposition will continue to be bringing forward examples of patient abuse, gaps in service and a great deal of human suffering that has resulted from the failure of our institutions in Ontario to respond adequately to the needs of the elderly in the latter part of the 20th century.

That is the challenge that is in front of this government, as it has been in front of each of the governments that have served this province over the last two decades. At least today I think we have the regulatory framework in place. As I say, we will wait and see how the government enforces it.

Hon. Mr. Elston: Might I thank my colleague the member for Bellwoods for his intervention, and for the intervention, of course, from the member for Windsor-Riverside (Mr. D. S. Cooke). I think all of us are quite well aware that with the passage of a piece of legislation the work is not at an end and, in fact, there is a great deal of work to be done. However, I can tell the honourable gentleman that I am pleased to share that work load with my colleagues, the Minister of Community and Social Services and the Minister without Portfolio responsible for senior citizens' affairs, as we approach some of the major issues about which he spoke.

I can tell the honourable gentleman that some of his comments are very much appreciated in terms of the description of the importance of this particular piece of legislation. Although debate has been short on it, I can assure him that we look on the importance of this in no lesser light because of the time spent on second reading.

We will be processing these two bills through committee for hearings, for the representations I am sure will be made with respect to these. The intervention of the member for Windsor-Riverside is very much noted, and I appreciate his advice with respect to the second reading of this bill.

With those few remarks, I am pleased to move second reading of Bill 177.

Motion agreed to.

Bill ordered for standing committee on social development.

SECURITIES AMENDMENT ACT (CONTINUED)

Resuming the adjourned debate on the motion for second reading of Bill 156, An Act to amend the Securities Act.

Mr. Charlton: Unfortunately, the last time this bill was being debated, my colleague the member for Welland-Thorold (Mr. Swart) was on his feet at the adjournment. I have been assigned the task of trying to pick up his speech in the middle and finish it, which will cause me some difficulty.

I will not run back through all of the comments he made in the first half of his comments, except to say that we are supporting this bill. We find all of the provisions of the bill supportable provisions, especially the provisions that will, for the first time, bring takeover bids out into the open and, in effect, force undesirable takeover bids especially into the public view for public scrutiny.

The other part is that the minister, for whatever reason, has not decided to call a provision of the bill, that we see as very important. It is the part that gives provisions governing illegal trading on inside information. I think it is a very important aspect of this piece of legislation.

As I said, we are supporting all of the provisions of this bill, but it has to be viewed in the context of the total package of changes that are happening in the securities sector, and that presents some problems for us. It does not in any way affect our support for this legislation, but this legislation also does not deal with a number of the other things that are happening as part of this package of changes in the securities sector.

1550

The minister is well aware, obviously, of the other changes; he announced them here in the House. They will not only change the relationship between financial institutions in this province and their ability to own securities but also dramatically change the question of foreign ownership of securities in Canada and Ontario. This legislation does nothing to stop what we are all concerned about in many areas of our economy; that is, corporate concentration. It does nothing to prevent takeovers and domination by foreign owners, specifically United States owners.

In this package of securities changes, I find it somewhat hard to understand some of the different comments that are coming from the government. Over the course of the last several weeks, we have listened to comments from the Minister of Consumer and Commercial Relations (Mr Kwinter), the Minister of Industry, Trade and Technology (Mr. O'Neil) and the Premier (Mr. Peterson) himself on the question of free trade, for example.

We had the Premier saying in the House that although he will veto any free trade package which has major detrimental effects on Ontario and jobs in Ontario, he is still hopeful that a free trade package which provides benefits to Ontario and Canada can be worked out. He said that in Washington and he said it again in this Legislature just last week.

At the same time, as a result of concerns raised by Canada's trade negotiator Mr. Reisman about the announced package of securities changes and how that was stealing a bargaining chip from the bargaining table, we have the Minister of Consumer and Commercial Relations saying, "That is okay, because we are not likely going to get a free trade package anyway."

It seems to me that with those kinds of mixed messages going out of this province and this country into the free trade negotiations, we are either ensuring that there will be no free trade package or that the overall Canadian position will be so confused that we will end up getting the shaft in that negotiating process.

It is a concern that I have and I think it is a concern that most of my colleagues have that this government appears to be inconsistent in the things it is saying, things which are obviously going to be assessed by both our own and the American negotiators. This securities package is one of those things which, in our view, provides a major inconsistency in the whole approach. Our view on the free trade question is fairly clear anyway, so if what this government does ensures that no detrimental free trade package is ever reached, then so be it.

What I am saying is that the confusing messages may put us in a position of ending up with a package, because of Mr. Mulroney's determination to get one somehow, that is going to be very detrimental to either this province or some other area of this country, just in order to achieve his determination to keep his promise on a free trade package.

With that, I will wrap up my comments by saying we do have very serious concerns about the totality of the securities package. Unfortunately, although the provisions it does set out are good ones, this bill does not deal with the other regulatory changes the minister has announced which we see as potentially very detrimental to Ontario.

Hon. Mr. Kwinter: I would like to comment briefly in reply to the member for Hamilton Mountain. He is correct that his comments do not refer to this particular bill, but I would still like to clarify the situation.

As the member may know, the day I announced that we were going to be small-l liberalizing the securities industry, there was a report out of Ottawa saying, in effect, that Mr. Reisman was the architect of Ontario's initiatives. It also stated that the Ontario Minister of Financial Institutions was opposed to this plan but that, under pressure from the federal government and Mr. Reisman, I conceded and allowed this proposal to go forward. Subsequent to that, there were reports that Mr. Reisman felt that our initiative was ill advised and was taking bargainingship away from him.

When the member talks about mixed signals, the mixed signals are not coming from Ontario; they are coming from Ottawa. I would like to put on the record, because it is important, that we have a situation where this is not a bilateral issue. It is a multilateral issue. We are not talking about opening the Ontario securities market to the Americans only. We have great interest and indications and we are looking at people coming from Japan, London, Germany and all the other markets. This is very critical to keeping Toronto's position at the top of the second tier of the capital markets of Canada.

The other situation in dealing with this issue is that we have to deal with it in a way that is going to respond to some internal problems we have. The member should know, and I am sure he does know, that Quebec has an open securities market and has had it for some time.

Motion agreed to.

Bill ordered for committee of the whole House.

House in committee of the whole.

SECURITIES AMENDMENT ACT

Consideration of Bill 156, An Act to amend the Securities Act.

Mr. Chairman: Are there any questions, comments or amendments that members have to Bill 156 and, if so, to what section?

Hon. Mr. Kwinter: I will be moving amendments to section 6a, section 8a, section 11a and subsection 12(1a).

Sections 1 to 6, inclusive, agreed to.

1600

Mr. Chairman: Hon. Mr. Kwinter moves that the bill be amended by adding thereto the following section:

"6a. Section 75 of the said act is repealed and the following substituted therefor:

"75(1) No person or company in a special relationship with a reporting issuer shall purchase or sell securities of the reporting issuer with the knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed.

"(2) No reporting issuer and no person or company in a special relationship with a reporting issuer shall inform, other than in the necessary course of business, another person or company of a material fact or material change with respect to the reporting issuer before the material fact or material change has been generally disclosed.

"(3) No person or company that proposes,

"(a) to make a takeover bid, as defined in part XIX, for the securities of a reporting issuer;

"(b) to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with a reporting issuer; or

"(c) to acquire a substantial portion of the property of a reporting issuer,

"shall inform another person or company of a material fact or material change with respect to the reporting issuer before the material fact or material change has been generally disclosed except where the information is given in the necessary course of business to effect the takeover bid, business combination or acquisition.

"(4) No person or company shall be found to have contravened subsection 1, 2 or 3 if the person or company proves that the person or company reasonably believed that the material fact or material change had been generally disclosed.

"(5) For the purposes of this section, `person or company in a special relationship with a reporting issuer' means,

"(a) a person or company that is an insider, affiliate or associate of,

"(i) the reporting issuer,

"(ii) a person or company that is proposing to make a takeover bid, as defined in part XIX, for the securities of the reporting issuer, or

"(iii) a person or company that is proposing to become a party to a reorganization, amalgamation, merger or arrangement or similar business combination with the reporting issuer or to acquire a substantial portion of its property;

"(b) a person or company that is engaging in or proposes to engage in any business or professional activity with or on behalf of the reporting issuer or with or on behalf of a person or company described in subclause (a)(ii) or (iii);

"(c) a person who is a director, officer or employee of the reporting issuer or of a person or company described in subclause (a)(ii) or (iii) or clause (b);

"(d) a person or company that learned of the material fact or material change with respect to the reporting issuer while the person or company was a person or company described in clause (a), (b) or (c);

"(e) a person or company that learns of material fact or material change with respect to the issuer from any other person or company described in this subsection, including a person or company described in this clause, and knows or ought reasonably to have known that the other person or company is a person or company in such a relationship.

"(6) For the purposes of subsection 1, a security of the reporting issuer shall be deemed to include,

"(a) a put, call, option or other right or obligation to purchase or sell securities of the reporting issuer; or

"(b) a security, the market price of which varies materially with the market price of the securities of the issuer."

Hon. Mr. Kwinter: I have no comment.

Mr. Charlton: Very briefly, it is on the comment that I raised during second reading debate that we support this section and the effort here to try to deal with the question of insider information.

Motion agreed to.

Section 6a agreed to.

On section 8a:

Mr. Chairman: Hon. Mr. Kwinter moves that the bill be amended by adding thereto the following section:

"8a.(1) Subsection 118(1) of the said act is amended by striking out `and on summary conviction is liable, in the case of a person, other than an individual, or company, to a fine of not more than $25,000 and, in the case of an individual, to a fine of not more than $2,000 or to imprisonment for a term of not more than one year, or to both' in the 21st, 22nd, 23rd, 24th and 25th lines and inserting in lieu thereof `and on conviction is liable to a fine of not more than $1 million or to imprisonment for a term of not more than two years, or to both;

"(2) Subsection 118(3) of the said act is repealed and the following substituted therefor:

"(3) Where a company or a person other than an individual is guilty of an offence under subsection 1, every director or officer of such company or person who authorized, permitted, or acquiesced in such offence is also guilty of an offence and on conviction is liable to a fine of not more than $1 million or to imprisonment for a term of not more than two years, or to both.

"(4) Where a person or company has contravened subsection 75(1), (2) or (3) and the person or company has made a profit by reason of the contravention, the fine to which the person or company is liable on conviction shall be not less than the profit made by the person or company by reason of the contravention and not more than the greater of,

"(a) $1 million; and

"(b) an amount equal to triple the profit made by such person or company by reason of the contravention,

"and subsection 1 does not apply in such circumstances.

"(5) For the purposes of subsection 4, `profit' means,

"(a) if the accused purchased securities in contravention of subsection 75(1), the average market price of the security in the 20 trading days following general disclosure of the material fact or material change less the amount that the accused paid for the security;

"(b) if the accused sold securities in contravention of subsection 75(1), the amount that the accused received for the security less the average market price of the security in the 20 trading days following general disclosure of the material fact or material change;

"(c) if the accused informed another person or company of a material fact or material change in contravention of subsection 75(2) or (3) and received any direct or indirect consideration for providing such information, the value of the consideration received."

Before we deal with this, perhaps we should carry section 7.

Sections 7 and 8, inclusive, agreed to.

Mr. Chairman: We are now dealing with section 8a, this new section that is added. Does the minister have comments?

Hon. Mr. Kwinter: No comments.

Mr. Charlton: I just have one brief question. Unfortunately, my colleague may have already asked this when he was briefed; I was not there for that. In subsection 4 of this amendment, where we are talking about the greater of $1 million or three times the profit, am I correct in understanding this says that if, as a result of a contravention, I make a profit of $500,000, the maximum fine I can pay is $1 million -- I do not pay $1.5 million in a fine; but if, by a contravention, I make a profit of $200,000, I am going to pay the full triple the profit, or $600,000, in a fine? Is that correct?

Hon. Mr. Kwinter: No, that is not the case. It is making provision that there will be a maximum fine of $1 million for any contravention under this section. But, and to give members an example, when we go to the Ivan Boesky case, where he made a profit of $100 million, the idea of this section is that if we said that the fine was to be a maximum of $1 million, that would be like a licence; that would be no deterrent at all. What we are saying in that case is that he could be liable to a fine of $300 million.

Mr. Charlton: That answers the question.

Hon. Mr. Kwinter: That is the basis for this.

Motion agreed to.

Section 8a agreed to.

Sections 9 to 11, inclusive, agreed to.

1610

Mr. Chairman: Hon. Mr. Kwinter moves that the bill be amended by adding thereto the following section:

"11a.(1) Subsections 131(1) and (2) of the said act are repealed and the following substituted therefor:

"(1) Every person or company in a special relationship with a reporting issuer who purchases or sells securities to the reporting issuer with knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed is liable to compensate the seller or purchaser of the securities, as the case may be, for damages as a result of the trade unless,

"(a) the person or company in the special relationship with the reporting issuer proves that the person or company reasonably believed that the material fact or material change had been generally disclosed; or

"(b) the material fact or material change was known or ought reasonably to have been known to the seller or purchaser, as the case may be.

"(2) Every,

"(a) reporting issuer,

"(b) person or company in a special relationship with a reporting issuer; and

"(c) person or company that proposes,

"(i) to make a takeover bid, as defined in part XIX, for the securities of a reporting issuer;

"(ii) to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with a reporting issuer, or

"(iii) to acquire a substantial portion of the property of a reporting issuer,

"and who informs another person or company of a material fact or material change with respect to the reporting issuer that has not been generally disclosed is liable to compensate for damages any person or company that thereafter sells securities of the reporting issuer to or purchases securities of the reporting issuer from the person or company that received the information unless,

"(d) the person or company who informed the other person or company proves that the informing person or company reasonably believed that the material fact or material change had been generally disclosed;

"(e) the material fact or material change was known or ought reasonably to have been known to the seller or purchaser, as the case may be;

"(f) in the case of an action against a reporting issuer or a person with a special relationship with the reporting issuer, the information was given in the necessary course of business; or

"(g) in the case of an action against a person or company described in subclause (c)(i), (ii) or (iii), the information was given in the necessary course of business to effect the takeover bid, business combination or acquisition.

"(2) Subsection 131(4) of the said act is repealed and the following substituted therefor:

"(4) Every person or company who is an insider, affiliate or an associate of a reporting issuer that,

"(a) sells or purchases the securities of the reporting issuer with knowledge of the material fact or material change with respect to the reporting issuer that has not been generally disclosed; or

"(b) communicates to another person, other than in the necessary course of business, knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed,

"is accountable to the reporting issuer for any benefit or advantage received or receivable by the person or company as a result of the purchase, sale or communication, as the case may be, unless the person or company proves that the person or company reasonably believed that the material fact or material change had been generally disclosed.

"(3) Subsection 131(7) of the said act is repealed and the following substituted therefor:

"(7) For the purpose of this section, `a person or company in a special relationship with a reporting issuer' has the same meaning as in subsection 75(5).

"(8) For the purposes of subsections (1) and (2), a security of the reporting issuer shall be deemed to include,

"(a) a put, call, option or other right or obligation to purchase or sell securities of the reporting issuer; or

"(b) a security, the market price of which varies materially with the market price of the securities of the issuer."

Hon. Mr. Kwinter: I have no comment.

Motion agreed to.

Section 11a agreed to.

On section 12:

Mr. Chairman: Hon. Mr. Kwinter moved that section 12 of the bill be amended by adding thereto the following subsection:

"(1a) The said section 139 is further amended by adding thereto the following paragraph:

"28a. respecting any matter necessary or advisable to carry out effectively the intent and purpose of sections 75 and 131, including, without restricting the generality of the foregoing, exempting any class or classes of persons and companies, trades or securities from any of the requirements of section 75 and from liability under section 131 and prescribing standards for determining when a material fact or a material change has been generally disclosed."

Motion agreed to.

Section 12, as amended, agreed to.

Sections 13 and 14 agreed to.

Bill, as amended, ordered to be reported.

On motion by Hon. Mr. Kwinter, the committee of the whole House reported one bill with certain amendments.

PENSION BENEFITS ACT

Hon. Mr. Kwinter moved second reading of Bill 170, An Act to revise the Pension Benefits Act.

Hon. Mr. Kwinter: This act brings many important and welcome reforms for pension plans. One of the significant reforms concerns expansion of eligibility for pension membership. Full-time employees will be eligible to join their pension plan after two years of service, regardless of age.

Part-time employees will be eligible to join after two years of service if they have earned at least 35 per cent of the Canada pension plan's year's maximum pensionable earnings for two consecutive years. Currently, part-time employees have no right to join a pension plan.

Vesting and locking in is another key area of change. Benefits accruing after the effective date of the legislation will be vested and locked in, provided a member has two years' membership in a pension plan irrespective of the employee's age. This replaces the current 45 and 10 rule.

Under the provision for minimum employer contribution, employers will be required to fund, at termination, retirement or death, at least one half of a member's benefits accrued after the effective date of the legislation.

Provision has also been made for prescribed rates of interest on employee contributions on termination of employment, death or retirement. This will ensure plan members will benefit from investment earnings.

As well, to permit early retirement, employees within 10 years of the normal retirement date will be permitted to take reduced pension upon early retirement.

Portability is a provision of immense benefit for those who, for any number of reasons, change jobs at a time during their working life. Those workers will be able to maintain and control their accumulated pension.

Pre- and post-retirement survivor benefits will also be provided, and this will be of particular significance to women. Women tend to outlive their spouses, and without survivor benefits there is a great chance that they could live without adequate incomes.

In addition, pension plans will preclude discrimination on the basis of sex and marital status with respect to future benefits and contributions made after the effective date of the legislation, and plan members and their spouses will have the right to reasonable and regular disclosure of information respecting their benefits and obligations under their plan.

1620

Members of the House will recall that when I introduced this act I gave January 1, 1987, as the target date for pension reform. It is still our intention to have as many provisions as are feasible effective on that date. As promised, the Pension Commission of Ontario has advised interested parties of the provisions, which will be effective as of January 1, 1987, including several which will be addressed by a change to regulations under the existing act. The provision of benefits payable to the surviving spouse upon the death of a plan member cannot be discontinued upon remarriage. It will be fully effective as of January 1, 1987.

The following provisions found in the new legislation have been addressed through a change in existing regulations and apply to all pension plans as of January 1, 1987: reasonable interest on employee contributions when they are refunded -- the initial rate has been set at 6.5 per cent, a moratorium on surplus withdrawals from active pension plans; the right of plan members and their spouses to reasonable and regular disclosure of information respecting their benefits and obligations under the plan. Reduction of pension benefits by old age security benefits will be prohibited. In addition, any reduction of pension benefits from the Canada pension plan must be restricted to the portion of CPP earned during the period the private pension was earned.

Other provisions that will apply, effective January 1, 1987, to members in the pension plan on the date of proclamation of the new Pension Benefits Act are: vesting and locking in of post-reform benefits after two years of plan membership; portability of all plan benefits on termination of employment or plan membership prior to retirement; minimum employer costs of 50 per cent of post-reform benefits; minimum pre-retirement spousal death benefits; and prohibition of discrimination on the basis of sex and marital status.

I believe this Pension Benefits Act to be a strong and socially responsive bill. It is based on the federal-provincial majority consensus and is the result of widespread consultation not only with governments across Canada but also with plan members, sponsors and industry.

In placing this bill before committee for public hearings and clause-by-clause review, which I recommend, we are providing full opportunity for members to debate the issues on their merits after hearing from those who may be affected.

I wish to remind members this government is committed to the introduction of mandatory inflation protection for pensions. To that end, we have established an external working group to determine the most appropriate formula and phase-in procedures for inflation protection. I remind members that during this working group's deliberations, the moratorium on surplus withdrawals will stay in place. It is important to recognize that the issue is not whether we will have inflation protection, but rather what is the best mechanism for implementing it.

As the province with the majority of pension members, and as the first province to commit to taking action on inflation protection for pensions, it is incumbent upon us to develop a good, well-reasoned implementation mechanism and to ensure a standard that is achievable. Indeed, we also have the opportunity to forge a new consensus with other governments advocating responsible and reasonable actions in this area. Any hasty, unknown and untested action in this regard could have a negative impact on current pensions and, further, it might discourage the establishment of new pension plans.

A balance must be reached between the goals of setting minimum standards for pensions and striving to expand the numbers of persons covered by private pensions. I therefore urge the members to support our strategy for the implementation of inflation protection. We must not take the risk of acting without adequate information, nor should this one issue delay the implementation of the many other significant and welcome reforms in the new bill. Reform of the rules governing pensions will affect over 1.8 million Ontarians. Provision of security for their retirement years is of major social and economic importance, so I urge the members to support the many important reforms represented in the proposed Pension Benefits Act.

Mr. McClellan: I have two questions of the minister at this point, and, of course, we will have dozens of questions when we get to committee stage.

First, the minister alluded to this in his second reading address, but will he state very clearly the way he intends to deal with the implementation date when this legislation is passed? The bill calls for a January 1, 1987, implementation date because of the lateness in having the bill introduced in the Legislature. It was not given first reading until December 9, 1986. We are already a month behind that deadline, and we have just begun to work on the bill.

Second, I wonder whether the minister can comment on the report by the Treasurer of Ontario in April 1984, particularly appendix C, which outlines the cost projections and the impact of inflation and inflation indexing on pension costs; whether he is familiar with that document; and since the same officials are in the Treasury now as were in the Treasury then whether he believes that an accurate set of projections is set out in the previous government's pension document.

Mr. Warner: I wonder whether the minister could point me to precisely the portion of the bill that protects against the withdrawal of surplus pension funds. I understand what he said about the moratorium, but this is a separate item. I want to know what protection is in the bill that would prevent the withdrawal of surplus pension funds.

In particular, as the minister knows there is a number of different circumstances. If it is of any help to him, I am thinking especially of the case where a company has been sold, the MAN Lepper company fiasco, for example, where the company was sold and the owner had it for one day, and because he had it for one day, withdrew the surplus of $1 million. I wonder what specific section of the bill provides protection against that kind of thievery.

Mr. Runciman: I think it might be interesting too if the minister could comment on why, after a year and a half in office, he has established a task force or a working group to look at how to implement mandatory indexation when he knew some time ago that both parties on this side of the House were supportive of mandatory indexation. I wonder why it has taken this long to come up with the establishment of a working group.

Hon. Mr. Kwinter: To address the concerns of the member for Bellwoods (Mr. McClellan) about the implementation date, what we expect to do and what we have done is we have informed the industry and we have informed everyone with private pension plans who will be affected that we are going to make many of these provisions effective as of January 1, 1987. They have been put on notice that these implementation concerns will be done. We will be bringing forward changes to the existing regulation, by regulation, very soon. This will give effect to that.

To address his concern about the report of 1984 from the Treasury, one of the reasons we have a problem is that report -- and I assume the thing the member is referring to is that it states it would be one per cent of payroll to provide mandatory inflation protection. I do not know whether it is in that report, but that certainly is the figure I have heard and that was what it was to be. The only problem with that is that when we have talked to industry and have talked to people, they say, "That might be so on average, but nobody can justify it."

What we want to do, and the reason for this working group, is to find out what the true cost is of providing mandatory inflation protection and how it is going to work.

The member for Scarborough-Ellesmere (Mr. Warner) talked to me about withdrawal. It is not in the act, but we have put a moratorium on withdrawal. But surplus withdrawals are covered in the act, and under the regulations of the pension commission, at present surplus withdrawals cannot be considered unless there is 125 per cent of the actuarially determined obligations to the fund and provided it is contemplated in the agreement.

1630

Mr. Runciman: I want to put a few comments on the record. Our party has what has been described as a stellar reputation for sound, comprehensive pension policy. We have always worked to ensure that the people of Ontario, through their governments, have an adequate income during retirement years.

I think it is important to note, and I think even our friends to the left will acknowledge, that the Leader of the Opposition (Mr. Grossman) is viewed by many Ontarians as the driving force in pension reform. He was the chairman of the federal-provincial committee and he chaired that meeting on pensions in June 1984. At that time --

Mr. D. S. Cooke: I think you have been smoking something illegal.

Mr. Runciman: The member's House leader referred to a report that has that gentleman's name upon it. In June 1984, consensus was reached in a number of problem areas, and legislation was in its final stages, but that consensus appears to be in jeopardy. I will quote from an article by David Stouffer, a principal with William M. Mercer Ltd.:

"The consensus achieved by the provincial and federal officials on changes to pension legislation was expressed in Ontario's draft Pension Benefits Act, Bill 170. It was hoped that this bill would be adopted as the standard for content and style. However, as we watch the other provinces put forward their legislation, it becomes apparent this was only wishful thinking. In fact, when all is said and done, the prospect of complete uniformity could be even more remote than it was originally."

I suspect the inflation protection initiatives now being undertaken will also have a direct effect on that consensus.

I mentioned, and obviously the minister did not have an opportunity to respond, that we are supportive of mandatory inflation protection and have been on the record with such support for a considerable period of time. We agree with his initiative in terms of establishing a working group. Our concern, which I expressed when it was announced, was the fact that it has taken them over a year and a half -- the time this government has been in office -- to take action, when they knew full well that both opposition parties were supportive of mandatory indexation. It is really inexcusable that the government has taken so long to bring in these vital reforms.

Moreover, we are disappointed to see that the government has failed to address adequately very real issues of pension reform: namely, ownership of surplus funds and indexation. The unprecedented growth of surplus assets in Canadian pension funds has set the stage for a classic confrontation between management and employees, and placing a moratorium on surplus withdrawals does little to solve the real problem facing unions, workers and management.

This issue of surplus funds is clouded by many things, not the least of which is the different ways in which surpluses can be defined. It is further complicated by the fact that at least four factors give rise to surpluses.

The first of these is an exceptionally high investment return, and a quick look at economic history reveals that only once in the past 50 years has a typical pension fund asset mix yielded a real return high as six per cent per annum over a 10-year period. This is in stark contrast to the mid-1970s, which witnessed some of the lowest real returns in the last half century.

The second factor contributing to the current spate of surpluses is the recent recession, which prompted many organizations to trim their work forces substantially. This has also meant leaner pension liabilities.

Deliberately cautious actuarial assumptions that were aimed at building a cushion against bad times is the third primary factor, just as work forces were trimmed during the recession that forced many companies to release these margins, a move that revealed hidden surpluses.

The fourth and final factor contributing to surpluses applies only to final average plans that are being wound up. In cases such as these, benefits are frozen to reflect current, rather than future, salaries. This does not apply to ongoing plans, from which surpluses are withdrawn, as their ongoing liabilities include salary projections.

The battle over surplus ownership that is being fought in the press and across the floor of this House rarely includes any realistic appraisal of exactly what a surplus is and where it comes from. This is unfortunate, as the issue that is really at stake involves defining liabilities. Not until that is done to the satisfaction of both employer and employee will the current debate be resolved.

On this side of the House, we are anxious to hear the government's plans. We would like to express our views on the topic in committee. As we sit here, developments in pension reforms are occurring in the business world that should be reflected in the legislation. I am referring specifically to the settlement announced earlier this week that roughly split a $60-million pension surplus between the pension plan members and Dominion Stores or Domgroup. I am not sure what the corporate name is.

Moving back into the area of indexation, there is the minister's appointment of yet another task force. We believe he has waffled on this issue for some time and has finally decided to take some action. If he had created this working group a year ago, perhaps the legislation we would all like to see in this House would be before us on this date. A number of times when we have issues of importance before the Legislature, we find, as we do in this situation, that all three parties are supportive of the initiative. We may have some difficulty with certain aspects of it, but all three parties support the principle of mandatory indexation.

There are a lot of organizations and individuals out there in society who have a great deal of difficulty with the concept of mandatory indexation. I am going to take this opportunity to put a few of those points on the record because it is appropriate that it be done at this stage. I hope they will also have the opportunity to appear before a committee of this House to explain their views on this very critical subject. I am quickly going to go through some of the concerns of the Canadian Manufacturers' Association which opposes mandatory inflation indexation for the following reasons as spelled out by it:

"Actuarial costs are estimated at one to four per cent of payroll annually. Ontario companies cannot afford cost increases of this magnitude in the face of global competition. Only retirees from companies with the best pension plans will benefit. Inflation indexation makes the rich richer and the poor poorer and does nothing for the 70 per cent of Ontario workers without private pension coverage.

"Supporting the national consensus, CMA member companies are already accepting considerable added costs. It is important that one system be implemented throughout Canada to provide uniform benefits for Canadians and minimize duplication of administrative costs. Many manufacturing industries are highly cyclical in nature and require the flexibility to top up their pension funds in highly profitable years while making smaller contributions in periods of losses. Inflation indexation funding requirements could exacerbate the downturns for many companies.

"Excessive costs of inflation indexation will deter companies from introducing new defined-benefits pension plans." That is a very important one that has to be given careful consideration as to how it can be overcome.

"Tax reform with potential shifts in the tax burden away from personal income tax to payroll, corporate and consumption tax could impose new and added cost burdens for Ontario business. Pension indexing must be studied in conjunction with the cost impact of tax reform. Offshore competitors, either in their home countries or in the transplanted Canadian operations do not face the same pension burdens as older, established Canadian operations.

"At a time of intense global competition, the CMA does not want to unnecessarily disadvantage established Canadian business. With current uncertainties about inflation protection and with the current low rate of inflation, the pension indexing issue should not proceed without further focused study to assess the need for and cost of this initiative in conjunction with the cost of other government priorities." I am not sure whether that particular aspect is part of the mandate of the working group.

1640

"This continued study should not delay the implementation in Ontario of the federal-provincial pension reform consensus. While disclosure requirements for surplus funds withdrawal might be tightened and minimum levels of funding codified, employers must retain the opportunity to withdraw surplus funds resulting from superior pension fund management.

"The CMA believes that once the federal-provincial consensus is implemented, the focus of pension reform legislation should be on broadening private pension coverage to include the majority of Ontario's workers rather than driving an economic wedge into our society through inflation indexation."

These are very valid concerns expressed by a very important group in our society. Obviously, they should be listened to carefully and given every opportunity to express their concerns. We hope, as members of this House, to be able to convince them of the merits of mandatory indexation and perhaps recognize some of their valid concerns in the final legislation that comes before this House.

It is important to Conservatives that any changes that are made to pension policy be fiscally responsible in terms of their costs to government and taxpayers, to employers and employees and to individual contributors. I believe the majority of people in Canada want the freedom and flexibility to manage their own affairs and their own money, to negotiate their own pensions with their employers and to plan for their own retirement in their own way. They do not want government to take away large portions of their income and determine all their pre-retirement and post-retirement priorities for them.

This kind of pension reform, this kind of ability to respond to changing conditions and expectations, to improve the way in which government meets its obligations and responds to the changing needs and demands of its people with scope for individual freedom and commitment to fairness' has long been the key to the Progressive Conservative approach to pension policy.

Our stand on pension reform reflects those beliefs. Canadians want, and rightfully deserve, fundamental and far-reaching changes to Canada's pension system.

Mr. McClellan: We have been waiting a long time for this piece of legislation, and I want to take a minute to describe a little bit of the background. The previous speaker alluded to the rabbit-like speed -- l believe that was his very phrase -- of his leader in dealing with the pension issue. It is important that we remember how long the previous Tory government and the present Liberal government have been dragging their feet on the issue of private pension reform.

In 1980, the government received a report of the Royal Commission on the Status of Pensions in Ontario, which started by saying -- l do not have the document here, but I think I remember the first line verbatim -- that Ontario has no pension system in place. The situation was described as chaotic, and seven years later, we are finally seeing legislation that came out of the condemnation of our pension system by the royal commission.

Mr. Haggerty: Ten years after the Haley report.

Mr. McClellan: I am talking about the Haley report.

Mr. Haggerty: It was 10 years ago, in 1977.

Mr. McClellan: I think it was a little later than that, but be that as it may, I will not quibble over the amount of time.

The previous government responded to the Haley commission by establishing a select committee of the Legislature. One of the members of the select committee was the present Premier (Mr. Peterson). I had the opportunity to serve on that committee, along with a number of my colleagues. We made our first report in 1981 and our second and final report in March 1982.

We set out a program that any government could easily have implemented because it was, strangely enough, a three-party consensus with respect to the major areas of reform. I must say that the consensus extended beyond the members of this Legislature to virtually everybody who appeared before the committee, including many representatives from the business community and the finance industry.

One of those areas of consensus in 1981 and 1982 was on the need for mandatory inflation protection of private pension plans. We could have had legislation passed by this assembly in 1982, and the 1.8 million workers in this province that the minister referred to who have pension plans would have had inflation protection during the worst ravages of hyperinflation in 1983 and 1984.

No, we are just beginning to do the work that was set out by the royal commission and then by the select committee. The response of the government of the day was, "We cannot do it because the federal government is setting up its own task force." Then the federal government set out a green paper. Then there was a series of consultations on the task force on the green paper.

Then, when we got to 1984, the member for St. Andrew-St. Patrick (Mr. Grossman) announced the federal-provincial consensus and produced a very interesting document called Ontario Proposals for Pension Reform, which, I must say, in many respects still stands up very well in 1987. There are a lot of very sensible comments in that document. There are a number of very fine recommendations. I am going to be referring to some of the comments, some of the analysis and some of the recommendations.

The only thing the member did not do was take any action on this excellent series of recommendations. April 1984 was a full year before he and his colleagues were turfed out of office. If it was such an important agenda item for the member for St. Andrew-St. Patrick, one would have thought we would have seen draft legislation. In fact, we would have expected that it could have been passed.

That is all water under the bridge, but I intend to remind my Conservative colleagues of the very strong pro-pensioner sentiments that are contained in the former Treasurer's 1984 document and in the very strong arguments he marshalled in favour of inflation protection and in favour of an end to surplus pension fund withdrawals.

When we get to committee, I expect my Conservative colleagues to rally behind the sentiments expressed by their present leader when he was Treasurer in 1984 and to accept our amendments bringing in mandatory pension inflation protection and putting an end to the theft of workers' pension funds through surplus pension fund withdrawals.

I expect those amendments to carry when we get to committee, not because of weight of numbers in a minority parliament, but because of the weight of the logic of the argument of those who say: "Inflation protection is absolutely essential, and we are not going to wait for another task force. We have had the royal commission. We have had the select committee. We have had the federal task force. We have had the federal green paper. We have had the Ontario white paper. We do not need another task force. What we need is legislation that gives workers in this province the right to protection in their pension benefits against the ravages of inflation."

1650

The bill is before us now. I was not elected to deal with task force reports or to postpone, put off, stall or delay. The legislation is before this assembly now. We intend to do our job and to craft amendments that will bring inflation protection to the workers of this province and give them, for the first time, an unqualified right to all the money in pension funds. We want to get rid of the silly notion that moneys contributed in the form of deferred wages somehow can end up in the pockets of people like Conrad Black or the man who bought MAN Lepper to get hold of workers' pension funds.

Very simply, there is going to be an amendment to Bill 170 that deals with the issue of surplus pension fund skimming, the legalized theft of workers' pension funds, pension fund withdrawals or however we want to describe it. The minister knows as surely as he is sitting there that the kind of action that Conrad Black took in 1985 is morally wrong. Conrad Black went to the superintendent of insurance in 1975 and said, "Dear Superintendent, I would like to take $78 million out of the Dominion Stores workers' pension fund. I own Dominion Stores and the law says that anything in excess of actuarially valued funds plus 25 per cent is surplus and belongs to me."

The commission said: "No, Conrad, you cannot take $70 plus million out. You can only take $38 million out." This is the regulatory agency of Ontario operating with legislation that was so flimsy that it could not protect the Dominion Stores workers from a $38-million grab by Conrad Black. The money in that fund did not belong to Conrad Black. That money belonged to the Dominion Stores workers. It was their wages, and workers in this province have a right to pension legislation which simply says that money in pension funds belongs to those who own the pension funds, that is, the workers. It is workers' wages.

We can talk about reconciliation of accounts. If employers have annual service contribution liabilities that exceed contractual obligations, there are ways of making reconciliations, and the minister knows that. There are cyclical audits, I believe on a three-year cycle, and the opportunity for reconciliation if an employer has to pay an extraordinary amount of money over the short term. There are ways of reconciling that over the long term, and the minister knows that.

It is essential that the legislation clearly state the statutory entitlement of workers to sole and exclusive benefit, in the form of pension benefits or in the form of inflation protection. I want the attention of my Conservative colleague, if I can -- I may not get it -- because I am about to read from the sacred words of his leader set down in April 1984 on page 43 of the report. As Treasurer of the day, the member for St. Andrew-St. Patrick, said as follows:

"Ontario's proposed employment pension reforms encompass the view, held by the majority of Canadians, that pensions are deferred compensation. This concept means that pensions are a part of total compensation and belong to employees, regardless of whether they are short-service or long-service, or whether the plan is contributory or noncontributory. Also, inflation-induced investment earnings should be used to finance inflation protection for pension plan members."

What could be clearer than that? "Inflation-induced investment earnings" -- which is another way of saying money in surplus accounts -- "should be used to finance inflation protection for pension plan members."

Mr. Warner: Did Larry say that?

Mr. McClellan: He said that. He then went on to document the effects of inflation and the lack of mandatory inflation protection on retirees' income. I quote as follows, because it is very punchy stuff. The member has a way with words. He continues:

"Inflation erodes the purchasing power of pension benefits fixed in nominal terms and this can impose severe financial hardship on pensioners. During the 10-year period 1972 to 1981, prices increased by an average of 8.8 per cent annually, and the real value of a pension payable in 1972 declined by 57 per cent. Even at low rates of inflation, the value of fixed pensions will decline significantly. Over 10 years, a three per cent annual inflation rate will erode the value of a pension by 25.6 per cent."

Those are the views, not of a rabid socialist, but of a former Conservative Treasurer of Ontario. This is a wonderful document, and I know every Conservative is going to rush right out to the Ontario Government Bookstore and buy a copy of it. Apparently they have all been destroyed; they are no longer to be found in the Ontario Government Bookstore. I guess that is because it is such a revolutionary document, they did not want it corrupting the morals of Canadian youth. I have a dog-eared copy and will be pleased to make Xerox copies for anybody who wants to read further.

Mr. Runciman: Maybe you should read it.

Mr. McClellan: I am reading it.

Mr. Runciman: You have already misquoted it.

Mr. McClellan: What did I misquote? I will be glad to yield the floor if the member feels I have misquoted. This is permissible under the standing orders; I can yield the floor and the member can ask me a question.

Mr. Speaker: That is true. Does the member have a question?

Mr. Runciman: I thank the member for the opportunity. At the outset, he mentioned that our leader had endorsed the idea of turning over plan surpluses to the employees. I certainly have not studied this report at length, as he indicates he has, but, on page 51, it states, "Finally, subject to the approval of the Pension Commission of Ontario, the sponsors could withdraw surpluses from their plans." It seems quite clear to me the member for St. Andrew-St. Patrick was not endorsing what the member for Bellwoods suggested he was endorsing.

Mr. McClellan: I draw the member's attention to appendix C on page 87 of the report. I think that is the right section.

Mr. Breaugh: Could there be a small disagreement in the Tory ranks between the extreme right and the moderate pinko section? Is that possible?

Mr. McClellan: I do not know and I certainly do not want to misquote the former Treasurer. That would be very unfair. But I think it is also important to review the material set forward in appendix C having to deal with the impact of inflation protection formulae on pension costs. There is a discussion of long-term costs and short-term costs.

1700

It is quite fascinating that the Treasury and Treasury officials have done a cost projection of what would be the cost impact of mandatory inflation protection, indexed first at the level of 60 per cent and then at the level of 100 per cent. The cost impact of indexation at the rate of 60 per cent of the consumer price index is a negative impact. Even if inflation were to rise to hyperinflated levels of 12 per cent, the study indicates there would not be an increase from the cost at zero inflation.

If pensions were indexed at the level of 100 per cent of the CPI, there would be no increases in costs until after inflation had reached the level of six per cent. The explanation was quite simple: What we are looking at is the impact of inflation on pension fund earnings. These offsets have been documented by the Treasury officials and have been set out.

There are a number of options for the government to consider, and it does not need a task force to do that when it has the resources of the Ontario public service -- the Treasury and the minister's own ministry. We do not need a three-person task force to do this, unless we are anxious to postpone making a decision; unless we are trying to escape from having to do the kind of hard work that is necessary to come forward with an inflation protection amendment.

Between the Treasurer's old proposal of a 60 per cent indexed formula and what I think is an entirely reasonable 100 per cent inflation proposal, there is opportunity for discussion and dialogue and amendment, particularly when it is clear that even a 100 per cent cost-of-living formula based on the CPI would not begin to escalate costs until after inflation had exceeded six per cent. Those are long-term costs we are talking about.

The Treasury also has a number of suggestions about how to deal with the short-term cost impacts of extraordinary or unexpected liability and comes up with a number of very sensible suggestions, an eight per cent cap and a number of other suggestions that are set out in the document.

The minister is going to have to explain, either now or in committee -- since the basic work in preparing Bill 70 had already been done before he even assumed office and the detailed economic analysis and the cost impact studies had been done by the Treasury as long ago as April 1984 -- how it can possibly be that it took him from May 1985 to February 1987 to come in with a piece of legislation; why he still has not been able to come forward with an inflation protection proposal or a solution to the problem of surplus pension fund withdrawal, and why he found it necessary to appoint yet another task force to put off the process of reform for yet another year with no guarantee at all that at the end of that period there would be any legislation forthcoming.

I say to the minister and to my colleagues in this House that the only guarantee is the work we do while the Pension Benefits Act is before us now and in the spring. There is no assurance that this act will come back when it has been passed and taken away. There is no assurance that this minister will still be the minister. There is no assurance of anything in this crazy world of politics except that the bill is in front of us now and the job to rewrite the Pension Benefits Act is before us now.

The amendments should be forthcoming now. Since they have not been developed by the minister, I can tell him very simply yet again that we will put forward amendments. I expect to have the support of my colleagues in the Conservative Party because their leader is on record as being in favour of the principle of mandatory inflation indexing and the use of surplus pension funds for that purpose. It is as simple as that.

I say to the minister in all seriousness that between now and the middle of March or April, when we get down to the committee stage of this bill, he had better send his of finials back to work, because we are not going to wait for a year. In my view, that would be utterly irresponsible and a shirking of our responsibilities as legislators, so he should get his officials to work. He seems to have accepted, in principle, the idea of inflation protection. He had better start drafting his own amendments or counterproposals, because the amendments are coming down the pipe and the train is leaving the station today and will be crossing the minister's desk in about a month.

After all the work that has been done over the past decade, l think it is not beyond the wit of the members of this assembly and the officials of his ministry and the Ministry of Treasury and Economics to craft amendments that will guarantee social justice to retirees in this province and bring about mandatory inflation protection. I am confident that if we cannot do it with the minister, we can do it without him. It is as simple as that.

A number of other items in this Pension Benefits Act are the source of considerable disappointment and call into question the commitment of this Liberal government to the process of social reform. For example the minister mentioned in his leadoff that we are going to have two-year vesting. That means, according to the bill, and according to what most people understand, that after two years of service, workers will be entitled not only to their own share of pension contributions but also to the company share as well.

What most people do not realize -- I still get phone calls, and I have had phone calls as recently as this week, from people who do not realize this -- is that the two-year vesting rule does not take effect until January 1, 1987, and that all pension funds contributed prior to New Year's Day, 1987, will continue to be subject to the old rule of 10 years' service plus age 45. I bet most members of the Liberal caucus do not know that.

I bet most members of the Liberal caucus thought their government's pension reforms were bringing in two-year vesting that would be retroactive and that all members of a pension plan today would automatically be entitled, after two years' service, to receive the company's share of their pension contributions. Surprise, surprise. That is not the way it is at all. That is not the way the minister wrote the bill.

1710

The minister, the government and the cabinet have decided that vesting will start only for new contributions as of January 1, 1987. That means thousands of workers will not be able to receive the company's share of their contributions. We know from the work of the select committee that under the archaic 10-and-45 vesting rule, only a tiny fraction -- as low as 15 to 20 per cent -- of workers in this province ever collect a dime in pensions because of mobility, people moving from job to job. Every time they move, they lose the company's share.

That happens in my riding of Bellwoods, where most people work in the building trades and work usually for no more than three or four years with one contractor. Everybody pays into a pension plan, nobody contributes and this bill will not do a damned thing for them unless the minister makes two-year vesting apply to all pension members. I think that is an entirely reasonable position, as the minister knows; I have spoken to him about this. I would be very surprised if the government kept the 10-and-45 rule, because the minister knows as well as I do that when an unvested pension plan member leaves a company and receives his or her own contributions back, the company's share stays in the pot, ends up as actuarially surplus funds and can be siphoned off.

I know the minister also understands that the cost impact of putting two-year vesting on a universal basis is negligible.

For the life of me, I do not understand why it is in there. I am sure the minister will take it out. If he does not, I am sure my Conservative colleagues will want to move their own amendments to make two-year vesting apply to all pension members in Ontario. We would be happy to support those amendments when they come forward, because they would be so sensible, so progressive and so consistent with the spirit of the document written by the member for St. Andrew-St. Patrick in 1984 when he was Treasurer of Ontario.

Mr. Ferraro: Your guts must be churning.

Mr. McClellan: I do not think my guts are churning, but I wonder about the minister, because again I think there is a majority of members in this Legislature who believe the two-year vesting idea is very sensible. Perhaps it needs to be separated from locking in. We can talk about that. Maybe it does. I do not think it does, but maybe we will talk about it. I am sure we will have dialogue and discussion, but we want two-year vesting to be universal. The minister had better get used to the idea and perhaps even develop his own amendments, which we would be pleased to support.

A third area where the government promised reform and has failed to deliver is with respect to part-timers. I do not know why the government picked the figure it did to establish the eligibility of part-time workers of 35 per cent of the yearly maximum pensionable earnings of the Canada pension plan. That requires an income that is about 30 per cent above the minimum wage, an income of about $9,000 a year. It will exclude vast numbers of people and really makes no sense. We will be putting forward amendments that base coverage of part-timers on hours of work, not on some magic figure dreamed up in somebody's computer, which excludes more people than it covers.

The final area on which I want to put the minister on notice has to do with the management of pension funds. It surprises and amazes me that, at a time when everybody except the most reactionary Neanderthal understands that pension funds are deferred wages, the government has not made it possible for pension plan members, simply on request, to obtain joint administration, management or trusteeship of their pension funds.

I think the minister intends to leave that to the realm of collective bargaining, so the strength of a bargaining agent will determine whether a group of workers have some control over their own property. That is exactly what we are talking about. Who will control somebody else's property? I think there need to be provisions in the legislation that make it possible for any group of workers to enter into a joint trusteeship of a pension fund simply upon request and meeting whatever criteria the regulatory authority may wish to set down. It should not be a matter of bargaining strength versus bargaining weakness or the whim of this employer as opposed to the generosity of that employer.

I know, for example, that the Amalgamated Transit Union runs its own fund, sets its own contribution rates in consultation with management, makes its own investment decisions and decides, on a year-to-year basis, how much money needs to be put into the fund to provide decent pension benefits for future retirees and inflation protection for those who are already retired.

The minister needs to understand that if we are to get to a pension regime that truly builds in inflation protection, it will be essential to involve the owners of the property in the management of the property, to involve the workers in the management of the pension fund and in participating in decisions about contribution rates, rates of earnings and the distribution of benefits between current members and retired members.

The old days of semi-feudal paternalism, when the company would not even acknowledge that the pension money belonged to the workers, was workers' property, let alone permit them to join in the management of that property, are over. Goodbye to those days. If the minister does not understand that, perhaps he should be looking after another portfolio. I suspect the minister does understand that very clearly. I am sure one thing the minister understands is property and the rights of property.

It is very ironic that a socialist has to stand here and make this speech, because we are talking about property and the rights of property. We are talking about workers' property, the rights to that property and the right to control that property. It is so ironic that when it serves their purpose and their own special friends, the so-called defenders of private property, the free enterprise parties, ignore the rights of property entirely and pretend that what belongs to one group of people actually belongs to somebody like Conrad Black.

That is exactly what this is all about.

Mr. Haggerty: He is not in the red, is he?

Mr. McClellan: Conrad Black is the one who goes to the little tête-à-têtes and soirées of the Premier, as he did with the previous government. Conrad Black knows which side of the bread the butter is on. When they turn over the slice and butter the other side, Conrad Black slides over with it. That is what he has done. When it serves his purpose, the great defender of private property, who writes his monthly columns in the Globe and Mail about the sanctity of private property, is prepared to buy a company in order to get his hands on the workers' property invested in their pension funds.

We have had sufficient debate in this Legislature over the last 19 months that I do not think there is anybody in the House, and very few people in this province, who has not heard about the great pension debate. It all hinges on this question of who owns the money in the pension account.

1720

No matter how we slice it or dice it or how many task forces we appoint or how we try to dodge or try to escape or get off the hook, the minister is going to have to come to terms with the fact that this is not somebody else's money. This is not company money, this is not employers' money, this is not corporation money; these are wages that people have earned which have been put into an account on their behalf. That money and the earnings of that money, the interest earned by that money while it is in an account, belong solely and exclusively to the workers who own it. It is as simple as that.

If the government cannot deal with that simple, moral fact, then it has a serious political problem, because there is no one in this province from Kenora to Cornwall who does not understand the fundamental morality of what I have just said: Every dime in a pension fund is the property of the workers, every single dime, and it cannot be used for any other purposes except to provide them with pension benefits and inflation protection.

Despite the complexity of actuaries, the arguments are really very simple, very basic and very fundamental and, for a change, very black and white. This is one of the few issues that really is black and white. One either stands with the Conrad Blacks or the Sinclairs of this world or one does not. It remains to be seen where this minister stands, because he has been dancing around the issue now for 19 months.

I believe my colleagues in the Conservative Party, on this issue, understand the fundamental morality of the issue and are going to support the kinds of amendments my colleagues and I will be putting forward. They may even surprise the minister and beat us to the punch and put forward their own amendments. If they do that, we would be pleased and delighted to support those amendments. We will have to wait and see.

Finally, I want to say to the minister, to reassure him, that this item has flowed from the accord that was signed in May 1985. I think I even have my copy of the accord around here somewhere. Here it is. It just happens to be here, An Agenda for Reform, May 1985, document 3, "Private pension reform based on the recommendations of the Ontario select committee on pensions."

We are anxious to see this --

Mr. Barlow: Who wanted that, the NDP or the Grits?

Mr. McClellan: We wanted it. We wrote everything that is in the accord; I want the member to know that. There were no ideas that did not come from the New Democratic Party.

Mr. Callahan: The member is so modest.

Mr. McClellan: It is true. What can I say?

I want to assure the minister we are anxious to see this bill passed into law. We do not intend to delay it; we do not intend to hold it up. We have a schedule that the three party whips have already developed that will permit us to have public hearings in March and April. I can assure the minister there will be no undue delay, either at the hearing stage or in the clause-by-clause consideration.

I see no reason Ontario cannot have a new Pension Benefits Act passed into law by the end of April or the early part of May 1987. That is a thoroughly reachable target. I can also say to the minister he had better start getting used to the idea. Consistent with the spirit of reform the people of this province voted for in 1985, there are going to be some major amendments to Bill 170 and he had better accept it.

Mr. Speaker: Are there any comments or questions? If not, further debate?

Mr. Haggerty: I want to address myself to Bill 170, An Act to revise the Pension Benefits Act. I want to support the principle of the bill, take a good, close look at it and perhaps add a few of my concerns or comments in areas that I think the minister will consider.

I sat at negotiating tables a number of years ago as chief steward in an industry in Port Colborne. One of the main issues was to bargain for a good pension. It was tough back in those days, in the late 1940s and the early 1950s. When you went to the bargaining table, you often got a certain amount in wages. When it came to pensions, you could not get wages any higher than that because they said, "If we have to take into consideration a pension for employees, we have to take a look at the area of deferred wages," as they called them then. It still continues in that area.

I think about the tough times in the city of Port Colborne and its industries. People working in industry thought they had an exceptionally good pension plan. I think of the old government annuities. They said, "If you are earning $1,200 a year, your pension at the end of the government annuities would bring you $1,000." Everybody thought: "Oh boy, that is not too bad. I am losing only $200," but there was no figure for indexing in there. I suggest many persons working in industry got burned in that particular type of retirement program.

There were many private corporations, such as insurance companies, that provided some protection to employees in industry. Their plans were not that great either. I can think of one insurance company. People thought, "We have a good insurance plan here, a good protection plan, a good benefit plan," and they found out on retirement day they would be lucky to get $15 or $20 a month. That is the type of program we had in pensions back then. I am hoping to see major improvements and there are some major improvements here.

The member for Bellwoods (Mr. McClellan) talked about the Haley commission. That was appointed 10 years ago, in 1977. I think about the select committee on pensions, which suggested the vesting period should be reduced from 10 years to five years. In this bill, the period for vesting in a pension plan will go down to two years.

Looking at that, one would perhaps say the minister should consider saying, "Let us go back 10 years in this area for vesting purposes, back to the intent of the pension reform back in 1977." I suggest that is a reasonable approach to take. I do not think it would hurt industries that much, because many of them are paying into it now

I am glad the area of part-time workers is in the bill. It will give some pensions to persons who work part-time. With the way the industry is moving today and with the jobs that are being made available in the service sector, I think we will find there is always going to be part-time work for a great number of Ontario employees or persons working in industry.

I think of the moratorium the minister has put on the matter of -- I will use the word "stripping" because that comes to mind -- stripping pension funds. I sat as a member of the select committee that dealt with financial institutions in Ontario. I remember a question I raised with the president of Brascan. I asked, "What is your position on this matter of taking some of the surplus pension funds?" He said, "I call it" -- I guess one would not say stripping, but he used the word "stripping" anyway.

I said: "Perhaps that is a harsher word than I was thinking about in taking the surplus funds. Stripping is perhaps more like it, because that is what they are doing today. They are going into the pension funds where even in some cases they are showing a profit by stripping. You will find that not so much in Ontario but on the American side."

1730

There was a good message in this area of stripping. I said to him, "Does any of that money not belong to the employees?" He said, "Under the Pension Benefits Act, we have a right to take that." I hope there are going to be some changes made in this area so we can come back and say that at least they will get half of the share of the Dominion Stores pension fund, where finally there was agreement that each party receive $30 million. I guess one would call it a pension victory for both sides and bitter sweet to the winners.

I suggest that one should look at the interest these financial institutions are making and the profit they are making on the investment of pension funds. In fact, one of them said, "We have paid no corporation tax since 1972 in this area." I said: "What would you do without the insurance money available through the private sector? What would you do without the pension fund?" He said, "We would not have a leg to stand on."

Members can see the investment that is being made on private pensions and even on insurance policies in Ontario, that it is a good market for investment and the investment dealers in this area. But where there is a windfall in pensions, such as there was in the Dominion Stores case through investment, a big percentage of that should go back to the employees.

In fact, the select committee on pensions, dealing with the issue of indexing of pension funds to cover the cost of inflation over the years, recommended that "a benefit inflation adjustment be funded, using the excess interest approach." Again, that recommendation should help control the cost for employees.

I thought that was a reasonable approach for the employees and, ultimately, the taxpayers of Ontario. If they use some of that excess interest fund to build up these pension funds, if they went that route, it would not cost the employees anything and it would not cost the taxpayers any money either.

I suppose when one looks at the cost to the taxpayers, if one looks at the pension benefit guaranteed, subsection 83(4) of the bill states: "If at any time the amount standing to the credit of the guarantee fund is insufficient for the purpose of paying claims, the Lieutenant Governor in Council may authorize the Treasurer of Ontario to make loans out of the consolidated revenue fund to the guarantee fund on such terms and conditions as the Lieutenant Governor in Council directs."

There is a cushion there, a backup, one might say. If there is a default on pension funds or pension money available to employers, we can go to the consolidated revenue fund. As for the health and the wealth of some of these pension plans, I do not think we need that section in the act, if it is used in accordance with what the purpose is, that is, to provide a decent pension to persons working in Ontario in the private sector.

There is another area I have had some problems with, and I can relate it to a couple of industries that have wound up in Ontario and relocated in some other area and the windup of the pensions, where it takes four to five years to get the pensions for those employees who have worked there for a period of maybe 25 or 30 years. I suggest that someplace there should be some method to speed up this windup so these employees, when they are forced into early retirement, can get their pension fund to help them overcome the difficulties in losing their jobs.

The other area I am concerned about is the matter of the powers invested in the superintendent of insurance. I was fortunate enough to sit for a period of two or three weeks on the select committee dealing with pension reforms in Ontario. I was interested in listening to the Metropolitan Toronto Police on their pension program or plan. One force came in and said: "Do not touch our pension plan. We are happy with it because we have a right to say where that money is going to be invested."

I believe even in the teachers' superannuation fund they were a little hesitant for the government to move into this area, because they have some right to say where that money should be invested. I think the same relates to the Ontario municipal employees retirement system. They have a board or body of both government and employees to say where that pension money should be invested.

Under the private pension schemes here, we have no policy or directions where the employee working for a company in the private pension sector has a right to say where that money should be invested. He has no right to a say if the request is to dip into the surplus funds and the superintendent of insurance, based on his wisdom, says, "Yes, you can go this route." I believe those who contribute to a pension scheme should have some right and say where the money should be invested. They should have some say in the returns on that investment. If it has to be a two-way street where both parties share in the surplus, perhaps that is the area we should be looking at.

Again, I take a look at the two Supreme Court decisions on the matter of stripping of pension funds, where the court has said no to the industry or the corporation. They stopped it right there. The agreement finally with Dominion Stores between Black and the union was agreeable to the splitting of that $60 million -- $30 million, I guess, both ways. I suggest that is one of the concerns I have in the proposal before us now. Those persons who contribute to the plan should have some right to say how that money is to be invested.

It should not be a one-way street, because these financial institutions are playing the market the world over. I am concerned about the security they may have if someplace along the line something went belly up and the pension fund was not viable. The minister should take a close look at this, because we are dealing with worldwide financial institutions.

When we talk about indexing, one of the difficulties I find with a number of industries that have closed their doors and laid off a number of employees is that they have what they call the company pension plan and they have the Canada pension plan but they cannot stack those, as perhaps other pension plans are permitted to do, like the members of the Ontario Legislature who are permitted to stack both pensions. For example, when a person goes into early retirement or retires from certain industries, as soon as he reaches the age of 65 and gets the Canada pension plan, then the original pension is reduced considerably because he is able to get the Canada pension plan.

In that area alone, when we talk about indexation in the case of an inflationary spiral, by dovetailing both of them or stacking them, perhaps we may not have to have the index there. I do not know, but I am saying when persons are forced into early retirement or reach the age of 65 on a pension, their pension is reduced. We heard that today, for example, in the guaranteed annual income system program, where there was one transfer payment from the federal government and the other reduced because of getting a better handout from the federal government.

These are my concerns. I support the proposal put forward by the ministry. I am sure the minister may have some amendments. I am not sure, but I hope he does, so we can have a far better and workable pension reform bill before the Legislature. I support it in principle.

1740

Mr. McClellan: I cannot resist asking the member for Erie (Mr. Haggerty), who represents a labour constituency and still pays his checkoff, whether, as a member of the Liberal caucus, he was aware that the government's so-called reform bill and the two-year vesting provisions apply only for funds after January 1, 1987, and that the old 10-and-45 rule continues to apply to pension funds that have been vested up until New Year's Day, 1987? Did the member know that? Surely he does not support the continuation of the 10-and-45 rule for all the hundreds of thousands of workers who thought they were getting two-year vesting from this government when it turns out they are not?

Mr. Haggerty: I thought I mentioned in my opening remarks the background of the Haley commission, appointed in April 1977, and that I thought the vesting of pension funds should go back to that date.

Mr. Gillies: I will be brief with regard to this particular bill. There appears to be grave disorder in the House, but I will attempt to go ahead. The debate we are going through today is one I have anticipated for a long time, having served with my friend the member for Bellwoods (Mr. McClellan) on the select committee on pension reform in 1981. As I recall, we reported early in 1982. There were a number of recommendations, a number of studies, undertaken by that committee which, as a new member arriving in 1981, I found to be a thoroughly positive and engrossing experience.

I can share with the minister that at first blush, being appointed to a select committee on pensions when I was at that time the youngest member of the assembly did not particularly thrill me. As we got into it and found the various aspects of pension investment, pension payout -- all the aspects of the funds -- I actually found the subject to be rather engrossing and enjoyed the many hundreds of hours of work our committee put in during that year.

A number of the major issues that we on the select committee looked at when we were reviewing the report of the royal commission on pensions, which has been alluded to by previous speakers, are addressed in the bill we have before us. I believe there are certain deficiencies that have been referred to and certain areas where I think, with a couple of second looks and perhaps a couple of sage amendments, we could come up with an even better piece of legislation than that which we have before us.

The question of vesting has been raised. As I look back at the major issues before the select committee, I think of vesting, portability, contributions, the treatment of contributions, part-timers, surpluses and the question of inflation protection. Very quickly, I would like to touch on all those subjects.

As my friend the member for Bellwoods alluded to a few moments ago, yes, for new contributors, if you will -- for those covered in the period after January 1, 1987 -- we see the move to two-year vesting as a step in the right direction. As was alluded to earlier in the debate, it does go further than had even been suggested at the time of the select committee. I wish there were something we could do, and I wonder whether there is not something we could do, to try to improve the vesting situation for those persons who would predate that January 1 deadline.

Mr. McClellan: Abolish the deadline.

Mr. Gillies: My friend suggests abolishing the deadline. I think that could be looked at. We should look at the options to see if there is some improvement we could make for all those people.

On the question of portability, locking in, etc., perhaps later in the debate the minister can advise me where to look in the bill for those clauses that deal with portability, because I think it is a very important issue and one that should be addressed. In an increasingly mobile society, we have so many people who work in a number of different fields over a period of years. I believe the latest statistic I heard is that the average person in North America is likely to have seven full-time jobs during his working years.

Miss Stephenson: Eight.

Mr. Gillies: Pardon me. My friend the former Treasurer informs me it is now eight, which shows that the mobility of our work force is increasing at a steady rate.

A little mental arithmetic will show us that in a situation like that, many people could pay into pension funds, especially those structured some years ago, who, with the prospect of eight places of work and the possibility of a number of those being, let us say, for under five years at each, could in fact be big losers as they moved around and tried to keep track of their pension benefits. We all know of examples of that. We know of people who move on from various places of employment and take very little with them.

We have other situations. In my own riding, I am very familiar with the many hundreds of workers who over the years have been laid off or have become unemployed at the Massey-Ferguson company and all those who were affected by the shutdown of the White Farm Equipment company. Circumstances, and sometimes very minor circumstances, can affect in a major way the pension payout people will have. There are many nasty shocks for many people when their company winds down and they find themselves out on the street. I cannot tell members the number of examples I have had come into my office of two employees of the same age leaving a company that is winding down, and because of the difference in their years of service, sometimes of one year or two, there is a dramatic difference in the type of pension benefits those people take away with them.

I am glad the question of part-timers is addressed. I just say briefly -- and I believe again it was a recommendation of our select committee -- I have always believed that those part-time workers in our society who have a durable relationship with their employers should be entitled to prorated, or pro rata, if you will, benefits and pensions. I am not talking of all part-time workers, summer students and those whose type of employment is very mobile or transient. I am not suggesting that, because in many cases where there is a pension plan that is contributory, the obligation to contribute for some of those people would not work at all in their best interests. But for those where there is a durable relationship -- and there are ways to determine that -- I believe people working 15, 20 or 25 hours a week should be entitled to prorated benefits and pensions.

On the question of surplus, there was a disagreement earlier between my colleague the member for Leeds (Mr. Runciman) and my friend the member for Bellwoods as to the former Treasurer's pronouncements in the 1984 paper on the subject of surpluses. I have not recently had an opportunity to review that document, but I do believe there are two clauses within it that are subject to different interpretations.

Mr. McClellan: I have a synthesis. I will read it to you.

Mr. Gillies: Good. I hope that at the end of my speech my friend from Bellwoods will get up and offer me the synthesis of these two views. Regardless of what was said in 1984 by my leader, the former Treasurer, I will say this on the subject: I believe one very creative use of some of these pension surpluses would be to apply them to provide inflation protection. I want to assure my friend the member for Bellwoods, who spoke earlier, that in one form or another our party is dedicated to the prospect of inflation protection for pensions, and one way or another, we would anticipate amendments to this act to make that possible. We stood for it in 1984; we stand for it today.

1750

I believe the details can be worked out, I hope to the satisfaction of all three parties in the Legislature, so that we can go that extra mile to provide some sort of inflation protection at whatever percentage might be deemed reasonable to assist workers with the passage of years and the effect those years have on their pensions. I suggest again, these pension surpluses, which are legion -- and I will come back to that -- a portion of those funds can be used creatively to help provide that inflation protection.

I anticipate that the situation in pension plans in terms of surpluses as opposed to deficiencies would have improved since we were studying the subject back in the select committee days of 1981-82. I base that assumption on the fact that we went through a period of high inflation, which would have seen many pension plan investments, through the recession years, earning a much higher rate of return than those we would have studied and experienced back in 1981 at the time of our committee hearings.

At the time, the minister may be interested to know, we were critical of some of the investment policies, particularly of some of the public pension plans. We were not convinced at all, as a committee, that some of these plans were earning the rate of return they really could have earned with a little creative management. But I would have to anticipate that when we went through times of 15, 16, 20 per cent interest rates, some of those funds would have been reinvested during that time and would have enjoyed a rather high rate of return.

I stand to be corrected, but my feeling is that there would be higher percentages of pension plan surpluses now than there were in 1981. Let us use some of that money. Let us use some of that money for the benefit of the workers, perhaps through the excess-interest approach recommended by the select committee and touched on by Mrs. Haley in her report, or perhaps by some other method I am sure our very creative minister and his able staff could offer to the House.

I offer that, I hope in the sense of co-operation, and I try to offer it in a generous spirit. I think there has to be something in the area of inflation protection we could all agree on. I really hope we will be able to do that before this process is through.

In conclusion, I want to remind members that our select committee, made up of all three parties in this House, did endorse the concept that the moneys paid into pension plans by our workers and, indeed, by their employers are a deferred wage. It was our feeling as a committee that, if it were not bargained or otherwise agreed on in terms of applying these moneys towards pensions, in another part of the pay package, in another part of the benefit package for the employees, they would have been bargained elsewhere.

So we believe, naturally, with that in mind and with our feeling as a committee, that even those portions in the terms of contributory plans that were paid in by the employers have to be seen in a sense as part of the employees' wage packet. With that in mind, the argument for inflation protection becomes very compelling indeed, and I would hope we will all remember that as we continue the debate on Bill 170.

I know my leader, the former Treasurer of the province, will be looking forward to speaking on this bill when it next comes up for debate, and I look forward very much to the contribution he has to make at that time, because I guess, of all of us in the chamber, he would be one of perhaps five or six who has made quite a study in this area over a period of years and has an awful lot to contribute.

With those cautionary remarks and with those suggestions of changes we would perhaps like to see, I none the less congratulate the minister on bringing this bill forward, giving us the opportunity in this House to examine it and in one form or another pass it, which we will surely do.

Mr. McClellan: I want to try to achieve the synthesis that I had promised between contradictory sections of the Grossman report of 1984. In a number of places throughout the report, the former Treasurer, who is the present Leader of the Opposition, says unequivocally that pensions are deferred compensation that belongs to the employees and that inflation-induced investment earnings should be used to finance inflation protection.

His colleague rightly pointed out another section of the report that talks about the use of pension plan surpluses. They argue that unless pension managers are able to keep pension fund surpluses, there is a fear they would adopt minimum funding schedules and that the incentive to invest an increased funding investment would be reduced if the inducement of surplus pension fund withdrawal were removed.

This fails to acknowledge the logic of the first argument. Pensions are the property of employees. The logic of that leads you to say that the owners of the property should be managing the property. If the owners of the property are managing the pension funds, then you do not have to worry about the incentive of surplus pension fund skimming or about ensuring the kind of investment management that will result in the kinds of investment profits that permit inflation indexation. We get back to the property argument, which is the most compelling argument. This money belongs to workers.

Mr. Gillies: Briefly, of necessity, I accept my friend's argument. The Haley report, the select committee report and indeed the report offered by the former Treasurer in 1984 all subscribe to the view. I cannot imagine there is any disagreement on this in the House because the select committee was an all-party committee. The money we are talking about was a deferred wage and in that sense should accrue to the benefit of the employees.

With that in mind and without getting into specifics at this point, I want to assure my friend that the position of our party will be that, one way or another, inflation protection should be offered to workers' pensions. As I said earlier, I hope that we in this House can work out, in a co-operative fashion, how that can reasonably be done. I am far from being an expert in the area of pensions and I would hesitate to say at this point that in all cases all surplus should be dealt with in this fashion.

Maybe, after reflection and study, that would be the conclusion I would come to, but at this point the only commitment I would make is that probably -- if it is a legitimate surplus and if we are talking about a contributory plan where the workers and the accrued earnings of the workers' money and the accrued earnings thereof are the money we are talking about -- there has to be something we can do with at least some of that money to provide a form of inflation protection. I truly hope we can do so.

With that in mind, I wonder whether I should move the adjournment of the debate. Pardon me; I would be pleased to let my colleague next to us do it.

The Deputy Speaker: I am waiting to see what the actual time is. The member for Scarborough-Ellesmere (Mr. Warner) has about 45 seconds.

Mr. Warner: It would be rather uncharacteristic of me to deliver a 45-second speech. Not only that, but the members obviously were not informed I would be speaking this afternoon; thus, the sparse attendance in the House.

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

The House adjourned at 6 p.m.

February 4, 1987

SUPPLEMENTARY ESTIMATES

COMMISSIONERS OF ESTATE BILLS

MEMBERS' STATEMENTS

DOGSLED RACES

NORTHERN DEVELOPMENT

RIDING OF CORNWALL

PENSION FUNDS

VOLUNTEER FIREFIGHTERS

STATEMENT THE MINISTRY

NIAGARA RIVER WATER QUALITY

RESPONSES

NIAGARA RIVER WATER QUALITY

ATTENDANCE OF PREMIER

ORAL QUESTIONS

NIAGARA RIVER WATER QUALITY

ATTENDANCE OF PREMIER

STEEL EXPORTS

SALE OF LANDS

GUARANTEED ANNUAL INCOME SYSTEM

ATTENDANCE OF PREMIER

HELP CENTRES

TECHNOLOGY FUND

STEEL EXPORTS

FOOD LAND PRESERVATION POLICY

AUTO PACT

PENSION FUNDS

OCCUPATIONAL HEALTH AND SAFETY

ROTATION OF QUESTIONS

REPORTS BY COMMITTEES

STANDING COMMITTEE ON REGULATIONS AND PRIVATE BILLS

STANDING COMMITTEE ON THE OMBUDSMAN

MOTION

COMMITTEE BUSINESS

INTRODUCTION OF BILL

CANADIAN OPERA COMPANY ACT

ORDERS OF THE DAY

NURSING HOMES AMENDMENT ACT (CONTINUED)

HEALTH FACILITIES SPECIAL ORDERS AMENDMENT ACT

SECURITIES AMENDMENT ACT (CONTINUED)

SECURITIES AMENDMENT ACT

PENSION BENEFITS ACT