Legislative Assembly of Ontario

[Report continued from volume A]

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LABOUR SPONSORED VENTURE CAPITAL CORPORATIONS ACT, 1991 / LOI DE 1991 SUR LES CORPORATIONS À CAPITAL DE RISQUE DE TRAVAILLEURS

Continuing the debate on the motion for second reading of Bill 150, An Act to provide for the Creation and Registration of Labour Sponsored Venture Capital Corporations to Invest in Eligible Ontario Businesses and to make certain other amendments / Projet de loi 150, Loi prévoyant la création et l'inscription de corporations à capital de risque de travailleurs aux fins d'investissement dans des entreprises ontariennes admissibles et apportant des modifications corrélatives.

Mr Sterling: First, I would like to thank the officials of the Ministry of Revenue who were kind enough to try to explain this bill to us. I say "try" because they were able to answer all our questions save and except for some of the inconsistencies, which were no doubt politically driven.

There are two reasons for a Conservative to perhaps support this kind of legislation. The first is that Conservatives generally believe that all people in the country should look at investing in different kinds of investments. We should not just think about investing in our homes and our cars, but we should try to spread the view of potential investments to include companies. So we find some positive aspects to this in terms of saying this will entice some people into investment, and perhaps after they go through this experience, if successful, they will look to another kind of investment.

The second reason we are tempted to support this legislation is because Bob White is against it. I understand Bob White and the Ontario Federation of Labour are against this legislation. If Bob White is against it, then there is probably some good reason for us to support it. For those two reasons we find the concept of the legislation somewhat attractive.

We have talked about some of the other provinces and what they have been doing. It is important to note there is perhaps some lack of clarity as to what other provinces are providing, but it is clear that in British Columbia not only unions but other groups of employees -- I think the definition within its act is "a group of people with a work-related affiliation" -- other than unions have the opportunity to participate in their investment program.

Therefore, we will be pushing and prodding and insisting that the legislation we have in front of us here contain a similar provision. It may mean that an investor who does not invest through a union-sponsored fund would only get a 20% grant from Ontario as opposed to a 40% grant, 20% from the province and 20% from the federal government, but at least it would provide an opportunity for those employees and people working in the same area to set up an investment fund and not have to be restricted by the fact that they are not members of a union.

There are two plans outlined in Bill 150. The first is a very complex plan. It is a plan which allows a group of workers to buy out a plant in their own area where they work. The people who are members of the corporation which buys out this plant must be employees of that corporation, so the people who are controlling it cannot come from outside. It is possible for other people to invest in this corporation, but they do not get the substantial tax breaks this legislation gives for the employee buyout option.

We are not talking small potatoes here. We are talking a significant amount of taxpayers' dollars that are going towards these employee buyout kinds of situations. In fact, a single employee can receive from this government upwards of $41,500 in taxpayers' money in order to allow him to invest in the company of which he is a member over a 10-year period. That is a significant amount of money.

We do not necessarily disagree with the government encouraging people to invest, but one thing we must remember is that in all of these situations where we have an employee buyout we are not creating new jobs. We are maintaining a job that is in existence, but the government is not necessarily going to get a new job by injecting taxpayers, dollars through this first plan. Therefore, we have some difficulty in saying this is necessarily a good thing.

The second part we object to very greatly is the setting up of a committee comprised, I believe, of a business representative, a labour representative and a government representative to look over the proposals brought forward under this scheme and to basically approve these proposals. The problem with that is that under the legislation, as with any kind of investment scheme where somebody off the street might start a company, a prospectus has to be prepared.

You have to prepare a prospectus so that the potential investors know what they are investing in. That has to be prepared. The shares in the employee company taking it over have to be bought through a registered stock salesperson. They have to go through the Ontario Securities Commission training or they have to go down and buy the stock from a broker.

So there is a prospectus and the safety of going through a broker or a trained person to advise the investor as to what he has invested in, but the government has injected a third step, some kind of quasi-government sanction of this investment that the investor is putting his hard-earned dollars into. He is being enticed by the government into making this investment, because he is getting back up to 30% of every dollar he is putting down.

Mr Chiarelli: On a point of order, Mr Speaker: Do we have a quorum in the House?

The Deputy Speaker: I will ask the table to find out.

Clerk Assistant: A quorum is not present, Mr Speaker.

The Deputy Speaker ordered the bells rung.

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Clerk Assistant: A quorum is present, Mr Speaker.

The Deputy Speaker: A quorum is present. The member for Carleton.

Mr Sterling: Maybe on a point of order, if there is not a quorum present, Mr Speaker, does that require me to go back to the beginning and start over again?

The Deputy Speaker: No.

Interjections.

Mr Chiarelli: You guys should stay. It's really a good speech.

Mr Sterling: I thank the member for Ottawa West for his confidence in my presentation.

Under this plan, the proposed investment by the employees to buy out the business must be reviewed and evaluated by a board representing labour, business and government. It is to be called the Employee Ownership Advisory Board. The board will report to and advise the Ministry of Industry, Trade and Technology on whether the proposed investment in the business is reasonably commercially viable over the period covered by the business plan. Qualifying proposals will be recommended by the Ministry of Industry, Trade and Technology for approval by the Lieutenant Governor in Council.

The problem with this is if the plan is set out to hit at investors who do not normally invest in this kind of investment, stocks, we are going to have fairly unsophisticated investors. We are going to entice them into putting out $15,000 a year, and they are going to get back up to $4,150 a year from the Ontario government to get into this plan, to invest.

I know from the experience I have had on both sides of this Legislature that there is a tendency for the public -- if the government gets involved in stamping its approval on a document or saying that it has licensed this mortgage broker or that it has in some ways approved the activity or the investment or the condition surrounding a particular idea, what happens if that investment goes sour? Guess whose door they knock at for reimbursement? It would not take the investors of this kind of corporation 10 minutes before they would be back at the door of the Ontario government saying: "You said this was a viable investment. You advised us to put our life savings into this investment."

I think that employees and workers who have put their money into this investment will look at it as a government-guaranteed investment, and it is all up sides. You put $15,000 down, get $4,150 back and it is a no-loss investment. Therefore, we have a great deal of problems with an advisory board and the Minister of Industry, Trade and Technology standing in his place or signing the document and having the Lieutenant Governor in Council approving the investment.

Interjection.

Mr Sterling: I do not care what is in writing. It does not matter what is in writing. People do not care what is happening in writing.

If you go back to the 1980-81 Astra/Re-Mor Trust situation, the people who lost their money in Re-Mor Trust did not care that there was not any guarantee on paper. They did not care that under the regulations they were not guaranteed their investment if they gave it to a mortgage broker. They cared that the government of Ontario licensed that mortgage broker, and they interpreted that licensing function to be a guarantee for their investment. This is what is basically going to be the spinoff of this kind of setup whereby the government is required to approve the investment.

I think that the government should not consider whether or not it is a viable business plan. I think the investors, as in any other kind of investment, should be required to look at the prospectus, get advice as to whether or not they should invest in this particular corporation and make their choice on the basis of that information. The government should have its hands out of the approval process in terms of the viability of the commercial proposal.

Let's take a for instance, because I believe this particular plan is set up for the Algoma situation. If people in Algoma invest their life savings in Algoma Steel, God forbid it should happen, but if the company fails and there is some indication, of course, that all things are not rosy with Algoma Steel, that the reason for any of these employee takeovers is -- well, it can be twofold. It can be (1) an employer trying to sell out his interest to a very viable buyer now because it is government subsidized or (2) a situation where the employer no longer can operate the business in a reasonable fashion.

If the latter is the case and if this happens in Algoma Steel and you have workers who put their life savings into the corporation which takes over Algoma Steel and Algoma Steel fails, do members not think those workers will be back at the doors of the Ontario government and asking for their investment back? They will not be asking just for the $4,150; they will be asking for the $15,000 they have invested. That is per year, and that investment could go up to as high as $150,000 per worker. So we have a great deal of difficulty with that approval function.

I guess the other area with regard to the first type of investment proposal in this plan, that is, the worker buyout of their own plant, is the approval process for setting this in motion. As we read section 4 of the act, it is either unclear to us what that approval process is or we are objecting to subsection 4(2) of that act on the basis of its not being democratic and not giving the workers who are involved in the process an opportunity to make their decision evenhandedly and in a manner where they would not necessarily be intimidated.

Clause 4(2)(a) of the act says a vote can be undertaken in accordance with prescribed rules. We are concerned about that because we do not know what the prescribed rules are. We asked that question at the briefing by the Ministry of Revenue and were told that there were no prescribed rules or that they might be referred to the Ontario Labour Relations Board as to what those prescribed rules might be. We want and will demand that a secret ballot be taken so that people will not be intimidated into buying into this plan and a serious decision like this, to go through the considerable expense of setting up the corporation before anything can be achieved, will be agreed to by 50% of the employees in the plant.

Members will notice under clause 4(2)(b) -- you only have to fulfil (a) or (b), but (b) says, "at least 50% of the eligible employees of the eligible business are represented by one or more employee organizations, at least 50% of the votes cast by the eligible employees, who are so represented, at a vote undertaken in accordance with prescribed rules," can set the venture capital corporation in motion. Therefore, we could have an employee organization which represents 50% plus one employee or 50% of the employees holding a meeting.

I am not certain of the notice requirements for this kind of meeting, but let's say they held a meeting and they got 50% of their employees there. Let's say the majority of them were in favour of going ahead with that particular plan. Let's say they voted even as high as 4 to 1 in favour of going ahead with that plan. Basically you will have 20% of the total employees of that business making the decision to go ahead with an employee buyout.

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Therefore, we will require that it be made absolutely mandatory that all employees of a corporation where this kind of buyout is going to be involved be involved in the vote, not only the union members who might represent 50% of the workers. We believe the other 50% are just as important and should be consulted as well, because it will mean something will be changing with regard to the ownership of the plant that is involved, and we are very much concerned, as I mentioned, how these votes shall be undertaken. We will demand that a secret ballot be taken with regard to any of the votes involved in this.

The third thing we are concerned about is the practicality of the whole investment plan as set out under the employee buyout plan, because as I mentioned before in my remarks, it is a very sophisticated kind of documentation that has to be prepared and gone through for this kind of corporation to be set up. First of all, there has to be a meeting with the employees making the decision to go ahead and set up this venture capital corporation. Next, a prospectus has to be prepared, as in any public offering in this province under the Ontario Securities Commission, to outline to employees who are investing in the corporation what is happening with regard to the corporation: what the corporation is offering, what its financial position will be when the money is put into the corporation -- like any other prospectus.

I am a little concerned about the time frame between the meeting when the employees are deciding they are going to buy out their own company and the time when they have to write the cheque to purchase their stock, because I believe it will take a long period of time to go from the genesis of the venture capital corporation to the actual time when the person writes the cheque for that stock in this employee buyout corporation.

I have pointed out the concern we have with regard to the structure of this particular employee-ownership labour-sponsored venture capital corporation. I have pointed out some problems with the process. We want to be sure all employees of the business are brought in. We do not want to see a hostile union takeover, which could occur under the way the legislation is set up at the present time, paid for by the taxpayers of Ontario.

We are also concerned with taxpayers' money ending up in the pockets of a corporation owner who can sell his corporation to his employees at an inflated price because the employees who are buying out the corporation are getting a significant tax advantage.

I would now like to proceed to the second part of this legislation, which deals with the smaller part of the plan, the second plan, which deals with what are called labour-sponsored investment funds or LSIFs. They are like a mutual fund, Mr Speaker, and I know you are experienced in the mutual fund business. You will be much interested in the second provision of the bill. Under this part of the bill, for some reason, to encourage employees and people of the province, anybody, to invest, we are going to give them a tax break of 20% federally and 20% provincially. A person in Ontario can invest only up to $3,500 a year, but that means you get $1,400 back immediately if you kick into this plan. I think it is a pretty enticing kind of situation to get involved in. There are no maximums on the number of times you can get into this. You could invest $3,500 this year, $3,500 next year, etc, and you go on.

There are some limits on what it can be invested in. It can be invested in a company that has $35 million in assets and up to 500 employees. It must have 50% of its salaries and wages paid in Ontario. That means, I guess, that a shrewd mutual fund operator would really have some enticing sales tools. You can promise your investors that they are immediately going to get 40% of their investment back. The range of investment is quite wide. They can invest in a public company. The venture corporation involved here can go down to the Toronto Stock Exchange and buy shares. Therefore, these LSIFs are going to be in direct competition with existing mutual funds that are now in place.

I believe the philosophy behind the federal and provincial tax bait is that you will have pools of capital from the average worker that will invest in various different businesses. People who have not previously invested in a stock market or mutual funds will find this an enticement to get their dollars into venture capital.

We favour the second venture idea much more than the original. We see some inherent traps in the original one, in that the government is going to be left on the hook in the long run. We have more support for this one, but if the philosophy of the government is to get as much venture capital out there investing in Ontario businesses as possible, why does it limit it to unions being the driving force behind the setup of these venture capital corporations? There is no reason or logic that has to be done.

The reason, we heard the minister respond to one of the previous speakers, is that the federal government has said that to get its 20%, it must be a union that sets up the venture capital corporation. That may be so, but as my leader has said, why do we have to follow in the footsteps of the federal government in this regard? Why should we discourage other employee groups from getting together and offering their employees the opportunity to set up a mutual fund and get 20%? I do not expect the provincial government to come forward with the other 20% the feds give to union groups under its legislation. All we want is fair treatment for all employee groups, whether they be unionized or non-unionized.

We do not understand the philosophy behind the act. If the philosophy, as delineated and drawn from this kind of legislation, is to get people who have not normally been involved in the investment business into the investment market, why not widen the scope of the investors as far as possible?

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I see the Treasurer is here. If his heart was in the right place, it would be possible to go ahead of the federal government. Why should the Treasurer of Ontario not give a 40% rebate to employee groups that are not unions?

Hon Mr Laughren: They do not have to be unions.

Mr Sterling: They have to be under the LSIFs. The Treasurer is now acknowledging that. He is right about the employee buyout, but we are talking about the second one. I talked about the first one. I can go back to that, because the Treasurer was not here.

Hon Mr Laughren: Spend, spend, spend.

Mr Sterling: The Treasurer is saying to me, "Spend, spend, spend."

The Deputy Speaker: Order, please. If there are to be any exchanges, they should be done from your seat, Treasurer.

Mr Sterling: We heard so often from the opposition benches about tax loopholes and people getting away from paying their taxes. All those tax loopholes, if we want to call them that, were put there with a reason: to try to get people to invest in businesses, to put their money out or put it back into their plant. It was an incentive so they would not take that money out and it was an incentive for people to put their money back in. Now we have the Treasurer walking across the floor from opposition -- he is walking out right now -- to government.

If we really wanted to be cruel about the interpretation of this legislation, we could say the Treasurer is supporting the corporate welfare bums. The first plan helps out the corporate welfare bums. It allows a corporate welfare bum to peddle his plan to his employees at an inflated price. Guess who is going to pay -- the taxpayers of Ontario. Here are the guys who said: "No tax loopholes. The corporate welfare bums are ripping everybody off." What do they do? They create a plan that allows somebody to fill up a truck with taxpayers' cash and take it home. This is a joke in that regard. That is why we have a lot of difficulty with the first plan.

The second plan, because it is not so restrictive, has some attraction to it. Quite frankly, I think a 40% rebate is excessive in terms of getting people involved in investing, period. If an investment is good, if the management of the funds is good, then people will invest with very little incentive. I think a small incentive is probably good to get people involved in investing for the first time, and therefore we have some support for it. I just think 40% is an excessive amount to rebate immediately to these people, having a view to the very open investment abilities of the venture corporation with regard to the LSIFs.

We used to have a program called the small business development corporations. They were very different from this particular investment corporation. You were very much restricted as to what you could invest that money in. I believe you were given 30% of your money back if you invested in a small business development corporation. It was so restricted, you could only invest in manufacturing, perhaps some tourism, and I think the capitalization of the company could be only $5 million, so it was basically startup businesses that could benefit from SBDCs.

The investment portfolio of this mutual fund can be very significant. The amount of work required to invest the money is going to be very much easier under this plan, because basically you can buy any public corporation. Some $35 million in assets and up to 500 employees is not necessarily a small company. So the restrictions on the mutual fund, as I call it, to invest are not that great.

I think there will be some significant takeup of the LSIFs. I believe the bait is too excessive on the part of the province and on the part of the federal government, and I think both of them leave the taxpayers holding the bag on this with regard to assuming most of the risk involved.

Earlier we had comments with regard to what was happening in other provinces. I thought it was interesting that a researcher in the Progressive Conservative caucus, Mac Penney, was able to assist the Ministry of Revenue's research and policy people by providing them with some information as to what was happening in other provinces. We are fortunate in having some of the sharpest researchers, and some of them with the most contacts in Canada, that members can imagine with regard to getting information.

British Columbia has offered a tax credit of 20% to those investing in a provincial employee venture capital corporation. It can be established by either a labour organization or a group of people with a work-related affiliation.

The second plan we are talking about was modelled after the British Columbia model, because the company in British Columbia, like the one in Ontario, can have up to $35 million in assets. The EVCCs in British Columbia will be eligible for a 20% tax credit for the first $10,000 they invest. The federal government will forward a reward of a 20% tax credit on the first $3,500 invested. Any one taxpayer is limited to a maximum investment of $50,000 in a lifetime.

They have changed the terms around a little bit, but the major term they have changed relates to the fact that in British Columbia not only a union can set up a venture capital corporation, but in Ontario only a union can set up one of these particular venture capital corporations.

Mr J. Wilson: Pretty fishy.

Mr Sterling: Yes, it is kind of fishy, as my colleague says.

Saskatchewan, as was said before, is the other province which has one of these kinds of venture capital corporations, and I understand from my colleagues that in that province as well, union as well as non-union employee groups can be involved in receiving the provincial rebate.

We in this party do not scoff at this legislation, because we think it is an attempt to get people thinking about investment. As I mentioned at the outset of my remarks, there are some positives to it.

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On the other hand, we have a great deal of difficulty with the exclusivity of the bill in giving all of the rights to organized labour versus those people who are not represented by organized labour. We oppose the parts of the bill which allow, in our view -- and we will be interested when we get in committee -- unions that control slightly more than 50% the right to control what happens to all of the company, really to the exclusion of the other employees who are not invited in to vote about this. I think that is a negative in terms of trying to get money for the corporation if it is set up and they are to go through a successful buyout. We are very concerned about the balloting process, the procedure involved in this. We think a secret ballot should be involved.

We have those considerable concerns about this bill. We look forward to it going to the committee and hearing what business and labour have to say about it. We hope the government will be conscious of our remarks, so much so that it will amend part of the bill, because otherwise we will have to dig in our heels even deeper on this bill. We will have difficulty voting for it on second reading because it is so slanted to the union movement and those workers representing somewhere between 60% and 65% of the labour force are not given equality in this bill. We will have to oppose it on second reading, but we will approach the subsequent discussions in a constructive manner.

Mr White: I wanted to commend my colleague on his excellent speech and for presenting a number of concerns. I do want to comment on a couple of points he raised.

On the issue of worker representatives and unions, it strikes me as passing strange to speak of representatives of unorganized workers. Who is representing a group that is not organized? Obviously no one is. The people who represent workers are people who are elected by them. People elected by them usually are part of what is called a collective. It is a contradiction in terms to be talking about someone who is representing unorganized workers.

My colleague is quite right that there are many workers who will not be represented here. They have the opportunity, through the collective bargaining process, through trade union organizations, of organizing their workplaces, of being able to democratically elect representatives who would be able to speak to their concerns and who would be able, of course, to participate wholeheartedly in such a structure as this bill offers.

Overall, however, I think my colleague has spoken extremely well. I think it is also a touch on the ironic side that he is asking us to dissociate ourselves and our government from one of the very few positive ventures which has come out of the federal government, which his party is in control of, and I guess he is asking us to be not quite so left wing as the federal government. I think that is a little passing strange too.

The Deputy Speaker: Member for Carleton, do you wish to reply for two minutes?

Mr Sterling: Yes, I will take the opportunity. I want to thank the member for listening to me. This is difficult legislation, it is complicated legislation and therefore it tends to be dry, but it is pretty important legislation as well.

I think it should be clear that I did not want to necessarily dissociate myself with the federal government with regard to the 20% grant it gives. I just think that the combined grant of the federal and provincial governments of 40% is perhaps a little too much and that the enticement does not need to be that great. If they each knocked off 10%, they could probably achieve the same thing and widen the basis of the number of groups that could set up venture capital corporations. They could achieve the same thing without costing the taxpayers as much money. That is my concern, that when you enter into all of these programs they are expensive and, in particular, you would have no way of predicting how expensive they might become.

That is all I have to say and I would again like to thank the member for responding.

The Deputy Speaker: Are there any other members who wish to participate in this debate? The member for Ottawa West.

Mr Chiarelli: First of all, I want to thank the member for Carleton for --

The Deputy Speaker: Order, please. On a point of order?

Mr White: No, I want to speak.

The Deputy Speaker: I had not seen you. Therefore, I would ask the member for Ottawa West to let the member for Durham Centre make his presentation and I will call on him afterwards.

Mr White: I will be brief.

Mr Chiarelli: Okay, that is fine.

Mr White: I rise with pleasure to speak on this bill. I think it is an essential piece of our legislation and our attempt to effect a real and viable economic renewal in this province, an economic renewal which is based not only on capital but on a diversity of capital, a diversity of investment, not just in terms of our moneys and our labour but also in terms of our full participation as a community in the economic life of our province.

The issue has been brought up about how this bill will create a new source of very much needed capital, and I think this form of legislation has worked very effectively in other provinces, as has been noted. I think in Ontario, however, we have been lax. We have been well off traditionally. We have relied upon the largess of history and the bounty of our economy without looking at how we as a community can become more innovative, more widely diversified in terms of investment and more in tune with the needs of the 21st century, which we will soon be entering.

Those laxities in our province have been brought to a jolting stop recently with the recession. This is a phenomenal time in our province where what we have counted upon for generations is no longer dependable. We have to look at new sources. The old sources for investment capital are no longer adequate to meet the increasing needs of this decade, and, even if they were, they would not be for much longer.

The opportunity for workers to make an effective investment in the community as a whole, for them to participate in a worker ownership plan, is something they are looking forward to and something whereby they will have the opportunity to become much greater participants in their community, also a tremendously greater form and diversity of investment, not a huge investment --

Mr Miclash: On a point of order, Mr Speaker: I have always been interested in what the member for Durham Centre has to say to the House, and I really do think there should be a quorum here. I believe there is not a quorum here in the House.

The Deputy Speaker ordered the bells rung.

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Clerk Assistant: A quorum is present, Mr Speaker.

Interjections.

The Deputy Speaker: Order. I ask the members to address the House from their seats and not from the gallery.

Mr White: I am very pleased the member for Kenora was paying such avid attention and that he brought to the attention of the House that he was doing so. It seems, however, that his attention span is somewhat shortened, because I do not see him any more.

The issue, as I was mentioning, in terms of investment is very crucial. We are drying up the sources of investment we have relied upon traditionally. I believe, for example, that out of the last recession consumers were able to invest heavily, and at the retail level, at the house purchasing level and at the car purchasing level we were able to revive our economy. But consumer indebtedness at this point is at such heights that this is no longer possible.

Small and medium-sized businesses have traditionally had problems and it is those companies that are the engine of economic growth in our community. Those companies have a traditional problem securing venture capital. They would be making direct moves in terms of growth and industrial investment in our province. Traditionally, they come across to banks and request some support and they are unable to get through the red tape that is involved there. We need a much greater diversity in terms of investment, but also a much wider scope of investment.

The issue of ownership is also an issue of participation, whereby workers at a plant that is self-selected -- not all plants and not all workers would want to participate in this, but regardless, many would have the opportunity of participating at a higher level. In others it would not be practical, nor would they want to, but in many places they would.

For those very significant reasons, I think this is a bill that well demands the support of our colleagues from all parties. I commend the members opposite who have spoken eloquently in support of this bill. I will sit now and allow my colleague the member for Ottawa East to speak when he is ready.

The Deputy Speaker: Are there any questions or comments?

Mr Grandmaître: Mr Speaker, the member said Ottawa East.

The Deputy Speaker: Please address the Chair.

Mr Grandmaître: Thank you.

The Deputy Speaker: You have to address the House from your seat, member for Ottawa East.

Mr Grandmaître: I am sorry.

The Deputy Speaker: Any questions or comments? If not, the member for Ottawa West.

Mr Chiarelli: As I started to say before, I want to thank the member for Carleton for taking some considerable time in his contribution to this debate. Quite frankly, I had read some briefing notes with respect to this legislation and it was not until tonight, when I started reading some particulars of this very technical bill, that I got some very serious concerns about how this legislation will work technically.

I see the Minister of Labour chuckling over there before he even hears what I have to say. I invite him to listen, because before I was elected to this Legislature I spent 17 years practising law, advising small business people and advising shareholders on shareholders' agreements and what can or cannot happen to their investments in small corporations. I want to point out several provisions to the minister, and hopefully some of his officials will also listen, because I have much concern about the share structure and how the provisions of the share structure will operate, probably to the detriment of many people.

I want to refer to some provisions in the act, in particular part III which deals with labour-sponsored investment fund corporations. I believe the same provisions apply in part II to the other type of corporation. I want to talk specifically about the transferability of shares that workers or investors will have in either of these types of corporations. I also want to talk about the mobility of shareholders and what happens to shareholders in this type of corporation should they be required --

Interjections.

Mr Chiarelli: Mr Speaker, I think Santa Claus is going to make an appearance in the Legislature.

The Deputy Speaker: Yes. We will give him a chance to go back to his reindeer and his sleigh. I notice he has now disappeared. You now have the floor.

Mr Chiarelli: As I was saying, I would like the Minister of Labour to address a couple of specific situations. Number one is the instance of a worker who has invested considerable dollars in a corporation and that particular worker has decided for one reason or another that he or she must leave the city or the workplace or the jurisdiction where the job is. I want the Minister of Labour to address the question of how that worker who has decided to move to another city or another location will be able to get his investment out of this corporation.

As well, I want to raise the question of someone who dies owning a particular class of shares in one of these corporations and how his estate might be able to realize on the investment.

I want to read some particulars of the legislation. In particular, clause 14(1)(c) in part III indicates "the articles of incorporation" -- that basically is the charter of this particular type of corporation -- "of the corporation provide that the authorized capital of the corporation shall consist only of, (i) class A shares that are issuable only to eligible investors and are redeemable or transferable only in the circumstances described in clause (e), (ii) class B shares that are issuable only to and may be held only by an employee organization."

If we look at clause (e), the circumstances under which shares may be transferred, as I mentioned, I have very significant concern. If I was practising and had a worker in front of me in my law office, and that worker was planning on investing $5,000, $10,000 or $15,000 -- in fact, the legislation provides that up to $150,000 can be invested in this type of corporation -- I would ask a number of questions of that individual. I would say to that individual: "What will happen if you decide you want to move, for example, from Sarnia, where the job and the workplace are, to Ottawa or to Toronto? You have $15,000 or $20,000 invested in that corporation. What will happen when you leave the workplace and move to the other place?"

There is no provision in this legislation that gives that worker any right to receive his equity back and convert it into another investment at another location. He would have to leave his money in that particular corporation in Sarnia. He would have to move to Toronto or Ottawa and he may never get that money back, because the legislation does not provide a right for him to get it back.

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I will be very specific and read the sections regarding transferability of these shares. This is clause 14(1)(e): "The articles of incorporation of the corporation provide that, (i) subject to subclause (ii), the corporation may" -- and that is very significant; that means it also may not, at its discretion -- "redeem a class A share in respect of which a tax credit certificate has been issued under this act only if the corporation is requested in writing by the holder of the share to redeem it and the holder of the share has satisfied all other prescribed conditions."

There are other provisions here, but I want to emphasize this point and say to the Minister of Labour, who is sitting over there pretending he is not listening, that he must listen, because a corporation may not redeem a share. A corporation may decide, because it is short of cash, to tell that worker who wants to move from Sarnia to Toronto or Ottawa that his or her capital has to sit in that corporation for two years, five years or 25 years because there is no right to a redemption.

This is not an investment you would buy at a bank. This is an investment in a closed corporation which is being managed by a board of directors in a closed situation where the people operating the company are probably going to want to retain the capital, and as workers want to leave and go to other jurisdictions, the management of the corporation may or may not decide to transfer the shares.

I want to emphasize that very significantly to the minister and I want to say to the minister that when the workers, if they are wise enough to go and get counsel before they invest in a purchase of shares -- and we heard other people here talking about risk and risk management and how the government is putting itself out on a limb because these workers have trust in the NDP government.

The NDP government is setting up a fund for them to retain their jobs, and it wants these workers to invest in corporations, but this legislation does not give the workers the right to get their investment back. It says that whoever the board of directors may be at the time may redeem, and that "may" is a very significant word, because what happens in point of fact is that a company is operating and it needs working capital; it must redeem shares out of working capital or it must go out and borrow money to redeem the shares that these people are requesting to be redeemed. How will a corporation which at the outset is probably going to be short of working capital redeem the shares of these particular workers?

I want to go on and read the particulars of the legislation as they apply to transferability and redemption of shales. It goes on to say:

"(A) if the share is held by the original purchaser, the corporation is notified in writing that the original purchaser,

"1. has retired from the workforce or has attained 65 years of age."

What does this say to me? The words are here; they are in black and white and they are very clear. Imagine a worker who is 45 or 50 years of age who is very concerned about retention of his or her job and therefore invests in the business to give the business working capital, and this particular worker continues for 10 or 15 years until retirement age, until age 65. The legislation says, yes, the worker must have given notice and the worker has a right to ask for a redemption if the worker has retired from the workforce, but it says that under those circumstances the corporation "may" redeem.

If we happen to be in a downturn for that particular industry or that particular company, or we happen to be in a recession, and we have a retired worker who simply says, "I'm up for retirement; I'm asking the company to redeem my shares," it says here the company may redeem it, and by implication the company may not. So we have a worker who has paid to keep a job until retirement, and retirement comes and the worker goes to cash in his chit and says, "I'm there, folks, give me my money back." The corporation says --

Mr Turnbull: On a point of order, Mr Speaker: I think this is a very important debate, and it is the duty of the government to keep a quorum in this House. I do not believe a quorum is present.

The Deputy Speaker ordered the bells rung.

1917

Clerk Assistant and Clerk of Journals: A quorum is now present, Speaker.

Mr Chiarelli: I was in the process of commenting on some particular technical considerations of this legislation, and I was indicating how concerned I am for individual worker investors in terms of their ability to transfer shares or request redemption of shares.

There is a general understanding on the part of a lot of people that if you have a share in a corporation there is a market for the share. That is not generally the case. That is the case for companies or corporations which are listed on the stock exchange or may be more broadly held corporations. But in the type of corporation contemplated by this legislation, there is no market for the shares. In other words, an individual worker may decide that he or she wants to try to sell this investment. That cannot happen in this particular provision. They are asking workers to lock in their investment to buy a job and then there is no assurance either that there is a market for the shares or that the worker can redeem the shares.

Not only can a worker not redeem the shares, but if one of these workers dies or is involved in a fatal accident of some type and leaves an estate that needs some semblance of an estate to continue, there is no provision in here which even provides the corporation the obligation to redeem the shares of that worker. These corporations will be managed by a board of directors. The board of directors will, in its option and discretion, decide, "Do we have the money or is it in our business plan to redeem the shares of this particular estate?" so this particular deceased's estate can have some money to carry on. There is no provision in here for it. I really believe this legislation was drafted by people who have not been in the field of dealing and working with closely held corporations, which is what we are creating here.

In order for this legislation to work, the government is going to have to amend this legislation. It is going to have to mandate that these corporations keep on hand a reserve or trust fund for redemption of shares in certain circumstances. What the government is doing is tying the hands of these small closely held corporations, because it is requiring them to have more working capital than the usual or average small closely held corporation.

We are trying to create a corporation which will have viability where in most circumstances there was no viability and we are saying, "Either you do damage to your worker-shareholders by having no transferability for an estate, even in the case of death or, on the other hand, you're required to maintain a higher level of capital reserves than the normal small company because you're going to have to be able to respond to the redemption of shares on the part of the estates of individuals who die or workers who retire."

More important, as I mentioned earlier, is the very simple provision of mobility. You may have a worker who decides he wants to move from city A to city B. He may have built up a nest egg of $25,000 or $30,000 in a particular corporation under part II or part III. He cannot just up and leave. What happens is that he leaves his shares in the other jurisdiction, in the other city, the other location. He loses a connection. He has very few reporting mechanisms back to the other particular place.

We are talking about businesses that might have only 25, 30, 50 or 100 shareholders. The managers of that business are working from day to day trying to make ends meet, trying to work on lines of credit with their bank managers, trying to collect receivables, maybe a lot of bad receivables. If they have three, four or five workers retire, transfer or die, and it happens consecutively, there will be tremendous demands to redeem on the working capital of that corporation.

Maybe the government knew what it was doing when it put in the words "subject to subclause (ii), the corporation may redeem." Maybe the government knew the corporations would not be able to honour their commitment to redeem these shares for somebody who is moving, somebody who is retiring or an estate of a deceased worker.

I am thinking. I am putting my mind set back into my law office. I am sitting there with a worker across the desk. The worker comes into me and asks, "Bob, do you think I should put $15,000 into this company?" I am going to ask a number of questions: "What happens to your investment in this company if you want to move? What happens if you die? What happens if you retire and there is no provision in this legislation to provide for the redemption of your shares?"

As I said at the beginning, I really read the technical aspects of this bill tonight. I put my lawyer's hat on and I was extremely concerned about the technical aspects of this legislation. I believe the government is going to have to seriously consider some of the concerns I am raising about this legislation.

When this legislation becomes law, which it eventually will, because the NDP has a majority government and it will eventually pass the legislation it wants, there will be a whole host of commercial lawyers out there advising workers. This legislation is going to have to pass the test of those commercial lawyers sitting in their offices advising the workers whether or not they should invest in this corporation.

The government is also going to have to account for all those workers who do not get that advice, who do not seek that advice, and invest money in a corporation and find that when workers move or retire or die, their estates cannot get the money out for a long, long time, if at all, because it simply says that the corporation "may" redeem their shares. There is no provision for selling these shares out in the open public as you can a public share.

Those are my only comments on the legislation tonight. Quite frankly, I am going to look at the rest of it very carefully. I have only looked at part III tonight, and the parts of part III I have seen have thrown up some really serious concerns about this legislation. I hope the government takes them seriously.

Ms S. Murdock: I have a couple of comments. First of all, this is not a Ministry of Labour bill, so the Ministry of Labour should not be expected to respond to it. It is, however, a Revenue bill and on that basis I would like to make a couple of comments.

I heard one concern of the member for Ottawa West, and that was on the redemption aspects of this bill. I would like to direct my comments specifically to the redemption provisions.

First of all, it is incorrect to say that it is not redeemable at all under any circumstances. All shares are redeemable, but if they are redeemed within five years, the tax credit must be paid back and that is fair. Why should you get a tax credit if you are investing in something that is not only an investment in yourself, but also an investment in the economic flavour of your own community? It is very touching to hear about the concerns of the workers from the other side, but the thing is that this is also helping the employers in our communities. "You still have the investment. You can still get your dollars back."

The other thing is that this legislation when passed is not isolated to the Business Corporations Act. The member opposite knows full well, since he has already told us he is a lawyer who worked in this area, that it prohibits anyone from redeeming into insolvency, with the exception of hardship cases. I would appreciate if he would listen, because the hardship cases listed under clause 6(1)(e) of the Business Corporations Act clearly states what those exceptions are, such as death and disability, but not voluntarily moving away.

Mr Callahan: I want to say a few words on the comments of my colleague. It is interesting that this bill is being brought forward at a time when the recession is as bad as it is, when we are talking about businesses disappearing for a whole host of reasons. Some of them are economic that are worldwide; some of them are a result of some of the proposals this government has made that have not come to fruition but simply have been announced in the House.

I like the thought of making entrepreneurs out of employees. If you make entrepreneurs out of employees, I think they become far more interested in the business they are involved in. Perhaps it might even eliminate the necessity of having to unite in unions. If you give people an entrepreneurial approach to business and they can do the job on the basis of seeing the fruits of their labour, you eliminate the old adage, way back when unions were important, of the big boss who was up in the head office and nobody could ever talk to him. I think in that respect the bill has merit.

1930

In addition, it has merit in terms of giving people out there who are looking to get themselves involved in business, or in corporations that are perhaps in difficulty, the ability to invest their capital in a way that made the United States the big giant it is, the fact that these people had risk capital. What we are doing here -- it was originally our bill and I think the parliamentary assistant would recognize that -- is recognizing that fact.

Mr Chiarelli: I want to respond to the comments of the member for Sudbury. I can only ask some questions on this legislation, in particular about paragraph 14(1)(e)(i), which talks about the redemption of shares. It indicates, "subject to subclause (ii), the corporation may redeem...." I simply ask the question, will they put the words "shall redeem" in there? If you put the words "shall redeem" in, it creates another set of problems; that is, the corporation has to be in a financial position to redeem all its shares at any one point. That is equally unacceptable.

I am suggesting the government look at some vehicles or amendments that may be possible under this legislation to require some sort of fail-safe protection for those workers who are forced into a mobility situation, who are retired or who are deceased. The way it is now, the legislation is open to tremendous abuse, because there is no right to redemption. It is totally discretionary. You can have a lot of workers with a lot of money tied up in these corporations and no vehicle for getting it out.

I understand the social and economic need for this legislation. The principle is good. There are a lot of technical provisions in this legislation that are very good. I am simply pointing out to the government that there are some technical matters in here that need refinement. This is a very significant problem with the legislation that I have pointed out and I hope the government will address it.

Mr Turnbull: Mr Speaker, I wish to participate in this debate, but I would point out once again that the government's responsibility is to keep a quorum. I do not believe a quorum is present.

The Deputy Speaker ordered the bells rung.

1935

Clerk Assistant and Clerk of Journals: A quorum is now present, Mr Speaker.

The Deputy Speaker: A quorum is now present. The member for York Mills.

Mr Turnbull: I am really pleased we have the appropriate number of people to listen to the words of benediction I am going to give to the government on this subject. I will start out by saying that the concept that drives this bill is indeed very sound. As a small businessman who has upon many occasions risked my own after-tax dollars to invest in companies, I think that as a society we would do well to encourage as broad a participation of investment in companies as possible.

But having said that, I have some concerns about this bill, and I would hope my concerns that I express tonight might be able to translate themselves into some improvements in this bill, because we know that this bill will pass. The government has a majority, from the 23% of the electorate that voted for it. Less of the popular vote, 37.1% of the popular vote, voted for them than for Frank Miller and we know what happened to Frank Miller. Nevertheless, we hope the government will listen to these suggestions.

Having said that, we have a bill that seeks to encourage the participation of workers in ownership. The Treasurer announced that the government's intention was to introduce a program to provide workers with an opportunity to invest in their own companies, and the bill has two very distinct forms. The whole of this legislation is very complex and requires a great airing, but the first one is called an EOLSVCC. It sounds like some Communist Party committee, but we know what is happening to the Communist Party. Employee ownership under this scheme may be formed by employees of an eligible business. An LSIF may only be formed, however, by eligible employee organizations, which are defined in the act to be a trade union or an association or federation of trade unions. However, any Ontario resident may purchase shares in the LSIF.

We immediately note that while approximately one third of all the labour of this province is unionized, this bill is only driven towards union ownership, which is rather curious, but I suppose not very curious when we consider that this is a government which is beholden to one very small segment of our economy. The Ontario LSIF proposal is model led on the federal LSIF program, which is also limited to unions.

The formation of an EOLSVCC requires either the consent of at least 50% of the eligible employees who participate in a vote or, in the case where at least 50% of the eligible employees are represented by one or more employee organizations, at least 50% of the employees represented by those organizations.

1940

My next problem is the fact that we may have, for example, a company with 1,000 employees and we may have something in the region of only 500 of them unionized. This organization can qualify for it. We know that within a union organization, a bare majority will carry the day and we know that the participation in votes of organized unions is rather small. We may have 50% or less of the union voting on any particular issue and only 50% of the organization unionized. So we lead ourselves to the position where we can have as few as 25% of the employees in that organization voting to take these steps, which leads one to have concerns about the coercion that can be impressed upon those unionized and non-unionized employees by the union which seeks to take over the company.

It does not have to be committed to paper. It can be quite subtle. We know that the NDP at times can be fairly subtle in its coercion. In so doing, they can just whisper gently in the ear of the employee, "You won't have a job unless you participate in this buyout of the company." An EOLSVCC will be required to obtain control and majority ownership of the business and will have a year in which to invest at least 80% of its share capital in the business. We have to have concerns about the level of information available to those employees. We must have some way of impressing upon those employees the magnitude of the business and environmental risks the company is involved in and any residual liabilities the company may have.

This brings me to the conclusion that the first scheme is quite clearly aimed at Algoma and companies of that nature. It is worth putting on record that Dofasco is considered to be one of the most enlightened employers in the country and has an exceedingly good relationship with its employees. Dofasco made an offer to the union which covers Algoma some 18 months before Algoma got itself into financial difficulties and Dofasco decided to pull the plug on it. The company suggested to the union that it needed to make reductions in the number of employees, hold the line on pay raises and cut out production of certain items which were not selling.

Dofasco has an extremely good track record as a corporate citizen and a good manager in Canada, as members well know. Notwithstanding that, Leo Gerard did not accept the suggestions of cuts in employees and did not accept the urgency of holding the line on pay and drove the employees into a strike. This strike is absolutely the genesis of Algoma going over the brink. Dofasco had paid many hundreds of millions of dollars for this company with the intent of turning it around. Not the workers but the leadership of that union decided they would not accept those terms. They wanted pay raises, they wanted job security for everybody there, and they would not cut any of the product lines.

Interestingly enough, the very person who precipitated the collapse of Algoma, Leo Gerard, is now coming to the table and suggesting there should be a union buyout of the company which involves holding the line on wages, reducing the number of employees and cutting certain product lines. Why? Because he went to a group of people who were used to buyouts in the United States and he asked what it takes to structure the deal. Indeed, the terms he has suggested should be the core of the buyout and the business plan for this company are very similar to the very proposals Dofasco made at the time the union went on strike. So I am concerned that the first of these two vehicles within this legislation is essentially a bailout of Leo Gerard and his absolutely failed ideas on union leadership which have destroyed the jobs of many employees of Algoma.

I cannot help looking at the tax breaks the employees will get. I seem to remember the NDP's federal brethren under the aegis of Ed Broadbent using the expression "corporate welfare bums." It certainly has a very interesting ring to it.

An hon member: David Lewis, too.

Mr Turnbull: And indeed David Lewis. The NDP cannot have it two ways. They either accept the fact that companies have to survive and have to have well-thought-out business plans which will carry them into the next century in a very competitive world -- and nobody would wish more than I that we did not have maybe the level of competition which will drive Ontario and Canadian companies out of business, but unfortunately there is no panacea. It is a fact of life. It is not just a question of losing jobs to the United States or Mexico. Many of these jobs are being lost to the Third World, to Brazil and to the Asian countries. We need to have a coming together of employees and management in a sensible way. It would be very reasonable to have the employees participating in a financial way in the ownership of the companies. I can only see that as a good idea. Indeed, when members look at the German model, which the NDP is so keen to cite, it works well at that level of co-operation. But in order for that level of co-operation to take off in Ontario, we will have to restructure the whole attitude of both management and unions. At the moment, unions seem to be intent on being paid off for their support for the NDP.

1950

I would just like to speak about some of the terms for the EOLSVCC.

"4(1) A group of individuals representing eligible employees of an eligible business may apply jointly to the minister, by filing the prescribed material in the prescribed manner, to be certified as the employee group for the purposes of this part in respect of the eligible business.

"(2) No group of individuals is eligible to be certified under this section in respect of an eligible business unless the minister is satisfied that,

"(a) at a vote undertaken in accordance with prescribed rules in which all eligible employees of the eligible business were entitled to vote, at least 50% of the votes cast were in favour of the establishment of an employee ownership labour-sponsored venture capital corporation; or

"(b) if at least 50% of the eligible employees of the eligible business are represented by one or more employee organizations, at least 50% of the votes cast by the eligible employees, who are so represented, at a vote undertaken in accordance with prescribed rules were cast in favour of the establishment of an employee ownership labour-sponsored venture capital corporation."

When I look at a prospectus which is issued with respect to the issuance of new shares in a corporation, it is somewhat complex and often requires a lawyer's opinion as to the validity of the statements that are made. I am concerned that not all of the employees but some of the employees in that union may have difficulty in establishing the risks attendant on the purchase of these shares. There should be a very full disclosure of any environmental liability the company has or potentially could have and liability with respect to any other pending or threatened court cases.

That leads me to the fact that these buyouts are to be sanctioned by the government after review by a committee of government, which implies that the government is blessing the purchase. It is my experience that when people put their life savings, as I suspect we would be looking at here, into a business which is on the margins -- and I go back once again to the example of Algoma -- if they put their money in and they are getting tax deductions with respect to their investment, if indeed that company fails, we create an expectation that the government will bail out these people who have lost their life savings.

Life savings are going to become more and more important. It is a fact that the Canada pension plan is nearly bankrupt. I think almost anybody who studies the financial underpinnings of the Canada pension plan has to come to the conclusion that only the very poorest people in the future -- and I do not know when that date is going to be, but at some point in the future -- are likely ever to receive any money from the Canada pension plan.

This all comes from the fact that governments of every political stripe in every part of this country have been spending beyond their means, and the people of this country and the people of this province are going to be hurt by the effects of this, so life savings are going to be very important.

How do we react when an employee has been induced to invest, potentially through coercion through a union which buys out the company, potentially because he simply feels that he wants to keep his job or potentially because of peer pressure, and loses his life savings?

I say very sincerely to my friends on the NDP benches that I am not telling them the idea of employee participation is wrong. I am telling them of the very real concerns I have in terms of the implications of this bill.

I would like to refer to a letter the Premier wrote to one of my constituents on November 26. An extract from it is:

"Our goal is sustainable prosperity. Wealth creation is crucial and we can't take it for granted. Attracting investment, rewarding innovation, encouraging markets to work, entrepreneurship, creating profits, these are things that have to happen in our society."

That is one of the very few things I can applaud the Premier for saying. It happens to be absolutely correct. Unless we create a society that says, "It's important that we create wealth," we will not be able to protect our citizens in old age.

This bill does not adequately address the problems. Let's look on the very best side of things. Let's say the scheme works and the company does not go bankrupt. This is legislation that is only extended to people who are union members. It seems to be fundamentally unfair to the vast majority of taxpayers. We should remember that one third of labour is organized; the other two thirds are not organized. Why is the NDP government discriminating against labour that is unorganized? That is number one.

Second is the concern I have about the coercion of workers within a union shop, that they must join in a company.

Third, I am concerned that union members may feel that in some way, because they get government blessing, it is a good investment to invest in companies like Algoma. We know the proposal the Steelworkers now have for the buyout of Algoma is not dissimilar to the proposal that was put on the table by Dofasco. Had they stuck to that plan, Algoma probably would not have gone under. Dofasco is a very responsible organization in terms of its relationship with labour, it has a great deal of respect for labour, but it simply said it would walk away from the hundreds of millions of dollars it had invested in Algoma. As the most reasonable and probably best-managed steel company in Canada, they walked away from it. They said, "We cannot make money under the set of circumstances the Steelworker have created for us as a result of the strike."

Here we have unions that will have some sort of imperative to hang tough in negotiations and potentially push companies under, because the union management is in a position to be able to grab all the perks it believes are attendant on ownership of a large corporation.

2000

Companies like Algoma have absolutely no guarantee they are going to survive. They are in a very competitive world. After employees have bought into a company, I think they are going to be somewhat reticent to relinquish the jobs they have literally paid for with their own life's savings. If the company gets into further difficulties, as is quite possible with an industry like steel, it needs to be able to restructure. They lose the ability to restructure under this type of ownership. If the company is not restructured quickly enough, loses money and goes into bankruptcy, those employees are undoubtedly going to look to the government for some kind of bailout.

I borrowed from one of my colleagues who is still a smoker, I am somewhat disgusted to say -- I noticed this big label on the bottom of cigarette packets; it says, "Smoking is a major cause of heart disease." This warning was mandated by the federal government after a lot of pressure was put on it to make sure people understood what the risk was when they bought and used a packet of cigarettes.

Mr Christopherson: Would you support that?

Mr Turnbull: I certainly would support it. As far as I am concerned, they can have the warning right across the whole of the front. It is a disgusting habit. Nevertheless, the reason that warning was put on there was because there is a serious risk. I am concerned this legislation does not contemplate sufficient warning to the employees who will buy shares. First, the government is giving them fairly generous tax credits, the kind of tax credits I have heard the NDP whining and snivelling in the past about corporations getting, the corporations that create jobs. They want to have the same and become union tax bums just like the corporate tax bums.

When a corporation goes bankrupt, the shareholders lose. In the same way, it is reasonable to expect that the union employees who have been induced to go into this type of ownership and have enjoyed the benefits of a tax holiday from a portion of it cannot look to the government for further bailout. They have enjoyed tax benefits much like the tax benefits corporations enjoy and eventually flow through to the shareholders. These same benefits would be accruing to the union members.

If that is what we want to do, that is okay, but we should make sure the legislation is broad enough that it is not available to just unions. It should be available to all workers in this province. As with cigarettes, we must put on a large warning that this purchase of shares may be very injurious to your fiscal health, a fiscal health that as I have said, needs to be maintained because of the almost certainty that by the time people who are in their 40s and 50s reach retirement age, they will probably never receive a penny from the Canada pension plan.

Let me turn now to the second scheme. It is called an LSIF. An LSIF will invest in shares issued by small and medium-sized Ontario businesses having not more than $35 million in assets and 500 employees. The LSIF will be required to maintain a minimum of 70% of its share capital and will be a mutual fund that will allow for the investment of not more than 10% in a company and the same type of tax deduction as the other scheme.

Once again, the concept is good, but I am concerned that it is aimed only at unions. The problem is that we are creating a world of unionized labour and all the rest of labour, which is fundamentally wrong. I have to assume that there is a reasonable number of people who are non-unionized labour who voted for the NDP in the last election. Those people are being shafted by the NDP. It is paying off its union paymasters. That is the bottom line. They want to make sure they pay Bob White and all those people. But the curious thing is that even Bob White is not so enamoured by what they have to say. I will just read a couple of extracts from a letter he wrote to Bob Christie, assistant deputy minister, Ministry of Treasury and Economics, taxation and intergovernmental finance:

"We do not understand why this issue, relative to other much more important issues, has suddenly been given such a priority and why time has not been allowed for serious analysis, research and discussion." Uncle Bob is speaking now, folks. "We want to emphasize our opposition to the worker-financed venture capital fund. There has been no research presented to indicate that a lack of venture capital is a principal problem in the province and, if it were, why workers -- rather than those with the capital and those who are in the business of risks -- should be placed at the centre of any solution."

The point of such funds is to get workers to buy into capitalism and the culture of tax breaks. So straightaway the government should be against it because it is encouraging people to buy into capitalism. This letter alone is the one reason I think I should vote for it, I must say. As somebody said before, anything Bob White thinks is bad is probably good. But be that as it may, I know he makes some good points in it.

We do need workers to buy into capitalism, and when they buy into capitalism they will be party to the same risks entrepreneurs are faced with and they will come to an understanding that there is a sawoff between the number of hours you work, the amount of money you make, the benefits you get and the profitability and viability of the business.

He goes on to say, "They mean playing at the margin of the economy and divert attention from the real (complex and difficult) problems of economic strategy."

There is a labour paper called the Labour Times and there are a couple of interesting comments that arc made.

"There are many reasons why companies in Ontario struggle and it is stretching it to believe that increased productivity from employee ownership will be enough to overcome them all."

It further goes on -- I think this goes to the very heart of the whole argument I am making:

"Instead of propping up fundamentally unsound businesses through employee investment or otherwise, the province and Ottawa should attack those things, taxation levels, insurance and licensing costs, interprovincial barriers and the rest, that led them to the brink in the first place."

This is from a labour paper called the Labour Times and it is dated November 1991. I think it is quite correct. Labour is correct in its analysis here. We have to start looking at the fundamental problems we have in Ontario. By propping up fundamentally unsound companies we are not going to address the problem. It looks like the province is going to pour in hundreds of millions of dollars into buying a position in the major aircraft maker of this city, de Havilland, and I assume the next step is to persuade the employees to invest in it.

We know the company has not prospered under the most successful aircraft maker in the world. They only bought it a relatively short time ago and they did not pay a big buck for it, and yet they want to bail out of it because they say it is not working. We have to change the whole environment in which labour says, "We want to participate with you, we don't want to overpower you," and, by the same token, management has got to say, "We want to work with you to create a prosperous company so that your jobs are secure and your pay raises are possible."

2010

There are my concerns. Two thirds of the province's labour is unorganized. They will not be able to participate in these schemes. We have comparable concepts in other parts of the country, where they allow non-organized labour to participate and get these same tax breaks, but this government does not believe in anything for unorganized labour. They only believe in paying off organized labour, and I am concerned.

As we move forward with this legislation, as I have said, there is no doubt that we have to get to the point where we have warnings to workers that they must fully understand what they are getting into. We should have very stringent requirements in terms of the prospectus. The wording of the prospectus has to be such that the average employee will be able to fully understand the document, and that is a significant challenge, because lawyers have difficulty in agreeing on the nuance of words.

Indeed, the very reason we have legislation which takes lawyers so long to plow through is the legalese, which lawyers have concluded they cannot find a better way around. They would like to write it in plain English, but there is a nuance to a word unless it is written in legalese, and there is the difficulty for workers.

In wrapping up, I will say that we have two proposals from the government which are only available to organized labour and do not adequately spell out the risks those people in organized labour will be going into in getting in these investment vehicles. They give very large tax benefits to these people over a period of years. In the case of one of the schemes, the first scheme I described, it will give a tax benefit of a little more than $41,000 over the maximum life of the scheme of $150,000. Built into it is the problem that workers who have so invested in a company which may already be unsound may in fact expect the government to bail it out when they have lost their life savings. With that, I conclude.

Mr Sterling: I would like to compliment the member for York Mills for pointing out some of the good parts and some of the bad parts of the legislation.

I think the salient point he has made is about this plan, the tax advantages that this government is willing to give out. I mean, they are willing to create tax advantages for the people who own companies. This is the party that talked about corporate welfare benefits and that kind of thing, tax loopholes and all the rest. What do we see in their first budget and in their legislation that is brought down after their first budget? The creation of tax loopholes and benefits for people who are going to own these companies.

I think the member for York Mills's most important point is that if you are going to create legislation like this, surely it has to be evenhanded. People who are members of an organization, specifically a union in this case, cannot in fairness be given an advantage over people who work in other workplaces.

Why does this government insist on discriminating against two thirds of the workers of Ontario by saying to these people: "You can't have these tax benefits. Only the people who work in an organized union workshop can have them." The answer of course is, as I think the member for York Mills has so accurately pointed out, it is a payoff. It can be nothing but a payoff. It is a payoff to the unions of Ontario for the election of the NDP government on September 6, 1990.

We will make amendments to this bill which will make it equitable.

Mr Johnson: I listened very closely to the member's dialogue and I have to say --

Mr White: Monologue.

Mr Johnson: Yes, it was a monologue. That is right.

I have to say I was rather disappointed. I mean, to suggest for even a minute that this legislation was drafted in order to assist labour is incorrect. I want to suggest that the members opposite are scaremongering again. For them to stand up in this House and tell the people of Ontario that this is an advantageous thing for labour is wrong. The people of Ontario also have an opportunity to invest. If they want to invest in a labour-sponsored investment fund, they can have some tax advantages that will help them.

I want to say too that employees of companies who want to invest in their companies, who want to secure their futures, also have an opportunity to invest. That is something that is very advantageous. Without this opportunity these people would not have an opportunity to secure their future. They may in fact ultimately become unemployed.

For the members opposite to suggest that this legislation was devised in order to assist the unions in Ontario, for them to stand there and say that -- to the people who might be watching this evening, listen very carefully, because what the member was speaking about is wrong; this is not anything that was devised to be advantageous for unions in Ontario.

Mr Chiarelli: I appreciate the concerns of the member for York Mills, particularly the comments with respect to tax credits which are available to members of unions. We have to have concern here for any investor in this type of economy. There is no economic nirvana for anybody in this economy or in any economy, unless perhaps a government bond.

We know there has been a lot of salesmanship in the past for particular types of tax shelters or tax credits. The best example is the situation with respect to MURBs where a lot of people participated in MURBs and tax shelters in the real estate area because they were going to get tax credits. We have to have great caution with respect to this particular plan for workers because they may get an instant tax credit but, as I pointed out earlier in my comments, there is no right to redemption of their shares; there is no right to transfer their shares. The legislation particularly says a corporation "may" redeem its shares.

In those cases where people are being transferred to another city or jurisdiction, for whatever reason, in those circumstances where people retire or there is a downsizing of the business and there are a lot of people leaving the employ of the business, it says the corporation "may" redeem these shares.

There are a lot of people who are going to get stuck with these shares without being able to get their investments back or refunded. There are going to be a lot of situations akin to the MURBs, the multi-unit residential buildings, where people are trying to unload and there is no cash and there is no market. There is a real caution we have to give here for this investment for workers and I would ask the government to look into ways to address it.

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The Acting Speaker (Mr Villeneuve): We can accommodate one further participant.

Mr White: Like my colleague the member for Carleton, I would like to compliment the member for York Mills; however, I find that extremely difficult. The issues he brings up with regard to organized labour are the same as did his colleague the member for Carleton. Again, this is a mirage. How can he speak of representatives of unorganized labour if they are not organized?

As well, it is obviously clear within the legislation that this form of investment is available to all of us. To state that it is problematical, when this province is desperately in need of substantive industrial investments, indicates that rather than benefiting from full participation of all our community, my colleague would instead be ideologically blinded to the possibilities of economic renewal with fairness in our community and instead say, "No, no, we can only rely upon multinationals, upon American investors," perhaps upon those traditional sources that have dried up. We can no longer rely upon those sources, and I exhort my colleague to join with us in looking at a substantive renewal in our province, of which this piece of legislation is a keystone.

The Acting Speaker (Mr Villeneuve): This completes questions and/or comments. The honourable member for York Mills has two minutes to respond.

Mr Turnbull: I certainly thank my colleague the member for Carleton for his sage comments and his advice over the time since I have been elected, and particularly with this legislation. One would expect him to agree with me.

But the next comment was made by the member for Prince Edward-Lennox-South Hastings. Notwithstanding the fact that he very kindly brought me a glass of water during debate -- I trust he did not do anything with it -- his very argument undermined itself. He said this was not payoff time for unions because anybody could invest through labour-sponsored investment funds.

Yes, this is an investment fund you must invest in through a union. In point of fact, we have in Manitoba and Saskatchewan legislation which allows anybody, non-organized labour, to put together a co-operative of workers to invest through this type of vehicle. But this legislation under the NDP government in this province says: "No, that's not acceptable. We will only allow you to invest and get the tax credits if you invest through a union." Anybody who has read the legislation will know that is correct, and to misrepresent it is a grave sin.

I agree with my friend the member for Ottawa West too that this is very similar to MURBs and film productions where people are sucked into an investment where they have a set of expectations and in fact at the end of the day they are going to lose their money, and then they are going to come to the government and say: "Why did you bless this? We want our money back." It ain't going to happen, because we do not have any money.

The Acting Speaker (Mr Villeneuve): Further debate? Seeing none, would the honourable Minister of Revenue wish to wind up.

Hon Ms Wark-Martyn: There have been many concerns expressed that this legislation will allow only unionized workers to participate in the program. The legislation is clear, and there are two aspects to the program. The labour-sponsored investment fund, under which unionized employees can invest in Ontario's small to medium-sized businesses, will allow investment by other Ontario residents. The employees who are not unionized can invest in their own corporations by creating an employee ownership labour-sponsored venture capital corporation.

The program does not restrict investment to only financially troubled corporations. Investment can be made, and will probably be made, in other than financially troubled corporations, such as small businesses where the retiring owner wishes to give the employees the opportunity to purchase the business.

Employees will be able to obtain information about companies before they invest, as disclosure must be made in accordance with the Securities Act. It has been stated on many occasions that the provinces of British Columbia and Saskatchewan have programs that provide more generous opportunities for investors and that the federal government is matching the credits granted by the provincial governments. The federal government is providing matching tax credits for the Ontario program to the same extent as those of the other provinces.

Other concerns have centred on the possibility of an investor losing his investment because a company fails. This government has no plans for a bailout in those circumstances. We believe that because employees will control the companies and will be able to obtain advice before they make their investment, the risk of loss will be considerably reduced.

The Acting Speaker (Mr Villeneuve): Ms Wark-Martyn has moved second reading of Bill 150. Is it the pleasure of the House that the motion carry?

All those in favour will please say "aye."

All those opposed will please say "nay."

In my opinion the ayes have it.

I have received a note that reads: "Pursuant to standing order 27(g), I request that the vote on the motion by the Honourable Shelley Wark-Martyn for second reading of Bill 150, An Act to provide for the Creation and Registration of Labour Sponsored Venture Capital Corporations to Invest in Eligible Ontario Businesses and to make certain other amendments, be deferred until immediately following routine proceedings on Wednesday, December 18, 1991."

It is duly signed. The orders are accordingly deferred.

Vote deferred.

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RETAIL SALES TAX AMENDMENT ACT, 1991 / LOI DE 1991 MODIFIANT LA LOI SUR LA TAXE DE VENTE AU DÉTAIL

Resuming the adjourned debate on the motion for second reading of Bill 130, An Act to amend the Retail Sales Tax Act. / Projet de loi 130, Loi de 1991 modifiant la Loi sur la taxe de vente au détail.

The Acting Speaker (Mr Villeneuve): When we last debated Bill 130, the honourable member for Etobicoke West had the floor. Does the member wish to resume debate? Would any other member wish to participate? The honourable parliamentary assistant to the Minister of Revenue and member for Prince Edward-Lennox-South Hastings -- the honourable member has already spoken, I am sorry.

Mr Johnson: I apologize, Mr Speaker. I was not aware. It has been so long since we had this debate I had forgotten.

The Acting Speaker (Mr Villeneuve): That it has been, and it is late at night. The honourable member for Mississauga South.

Mr Callahan: Brampton South. It must be something about where I sit in the back bench that nobody can ever tell what my riding is, but the people in Brampton South know what my riding is.

It is classic in the Legislature that nobody ever debates tax bills.

Mr Sterling: On a point of order, Mr Speaker: I know the member for Brampton South has the tendency to carry on perhaps at some length, but is it the practice to time the speaker as he stands in his place?

The Acting Speaker (Mr Villeneuve): It is not a point of order.

Mr Sterling: I was just wondering why the clock indicated --

The Acting Speaker (Mr Villeneuve): The honourable member for Brampton South has the floor and he can resume debate.

Mr Callahan: Mr Speaker, you are doing a great job as Speaker, because you have just proved your impartiality.

Something that is really interesting in this place is that tax bills, during the seven or eight years I have been here, have just passed through this House like a fog over the heather in Scotland.

The people of this province are saying to every elected member of this Legislature, not just the government whose bill this happens to be: "We're hurting. Every nickel you take out of us has an impact in terms of how we can survive, in terms of looking after our mortgage, our taxes, even presents for our kids at Christmastime." I would be willing to bet if you did a survey of this province today you would find people who are doing without Christmas trees, perhaps doing without gifts for their children, because the politicians are taxing them to death.

Mr Abel: Yes, like 28 in the last five years.

Mr Callahan: The member from wherever -- the member from Hooterville; I do not know -- makes a statement that this has been done in the past. Wake up, Ontario. Realize the fact that I just said that in the past tax bills were passed through here -- without a word of a lie -- without anybody objecting, because Ontario was doing very well, thank you. There were jobs out there. There were not young people sitting around their television sets tonight who cannot get a job. I think it is very important and it deserves the impact and the importance of every member of this Legislature.

It is sad that even the minister who purports to present this bill is not here, that she has the audacity to tax people in Ontario further when in fact we are fast approaching Christmastime and there are people out there who cannot say to their children, "I have a job; we'll have a tree, we'll have some presents," because we have taxed them to death.

I have to say to members that although this bill deals with motor vehicles, motor vehicles are no longer a luxury. In some areas, for instance Brampton South, and I am sure up in the rural areas of Ontario, they are a necessity. You cannot get from point A to point B or you cannot get a job because you cannot drive to it or you cannot get there by public transit. In fact, what we are debating tonight is a bill that has a very significant impact on this province in terms of mobility.

We heard the Toronto Transit Commission today say it is going to save $30 million for the citizens of Toronto because it is going to cut down on the service at night on Spadina and a couple of other regular runs. I applaud them. But for the people in rural Ontario, the people who do not have the transit system they require to get from their homes to their jobs, a car becomes not a luxury but a necessity.

We saw the Treasurer bring in his budget. The Treasurer -- I love him dearly; he is a good guy -- brought in a budget that said at first that there would be a tax on certain types of cars that are gas guzzlers. Any young person out there in Ontario would have loved that, because he was saying we want to help our environment. In fact, it is described as an environmental tax, but as was said by a member the other night, does anybody see that money going into the environment?

We have seen the Minister of the Environment sit there and do absolutely zilch. She was the greatest advocate of looking after the environment for our children when she was in opposition, but now there is not one word from that minister. In fact, she brought in Bill 143, which is a sham. It will do nothing in terms of looking after the waste that is obviously multiplying day after day. She will do nothing for the young people of this province in terms of their desires, their aspirations, their wishes or in terms of what their world will look like when we have finished screwing it up.

Hopefully, some of those young people will eventually get into this Legislature and straighten us all out and tell us: "Enough is enough; I'm fed up. I don't want my environment screwed up. I want you to take money and spend it realistically to look after my world so that there is some of my world left for me to live in, in the same vein we have lived in it."

This is what the thought of the Treasurer was originally, to tax the gas guzzler vehicles. What happened? What was the next step? The next step was that Bob, Bob and Bob got together and decided we are going to lose jobs in our plants.

Hon Mr Philip: Bob, Bob, Bob, Bob, Bob, Bob.

Mr Callahan: We have the Minister of Industry, Trade and Technology, the man who is supposed to look after creating a better environment in economic terms for our province, and he is over there going, "Bob, Bob, Bob," which I find really interesting. He thinks it is funny.

Hon Mr Philip: No, I thought you were funny.

Mr Callahan: I may be funny. I have never thought of myself as being funny, I say to the minister, but I do tell him that there are a lot of young people out there who arc watching what is going on in this august chamber. I used to think it was august, but I do not any more. I think it is a crock, quite frankly. They are there expecting us, as adults, to look after their interests in terms of the environment.

The Treasurer started out with a plan that I think he believed in. I think the Treasurer is an honourable man and I have great admiration for him. He is a good friend. I think when he started out he had a good budget.

Mr Harnick: On a point of order, Mr Speaker: I do not believe we have a quorum.

The Acting Speaker (Mr Villeneuve): Is there a quorum?

Clerk Assistant and Clerk of Journals: A quorum is not present.

The Acting Speaker (Mr Villeneuve) ordered the bells rung.

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The Acting Speaker (Mr Villeneuve): A quorum now is present, I have been advised. The honourable member for Brampton South can resume his participation in the debate.

Mr Callahan: When they have a quorum call like that, I am liable to lose my place, but I remember that I was on young people. I was on my friend the Treasurer who came up with Bill 130, which in its former self as Bill 131 -- this is Bill 132 -- suggested that certain cars should be taxed.

What happened? The word went out to Bob White, Bob II. Bob II talked to Harrigan of Ford and Harrigan of Ford presented a very serious case, "If you bring this in, baby, you can forget about a lot of jobs for those people you purport to represent." Interestingly enough, there was a scurry, there was a great cloud of dust and a hearty "Hi ho, Silver" and into the back room they went where all things are done in this Legislature.

That is one of the things I would like to point out to the people of this province, who might ask, "Why would you denigrate this place by saying it's a crock?" Because it is a crock. They send members elected from 130 ridings across this province down here, hoping and trusting they will represent their specific ridings, and they do not do it. That is not an indictment of this government; it is an indictment of every government that has ever been through here. What they do is clap like a bunch of seals.

The member for Kitchener shakes his head, but he knows that is the way it is. The only alternative is that whenever any government that sits over there opposite the crown, which we are all told is where the government is, espouses a particular policy it has to be accepted by every member of the caucus simply because it is God-given.

I do not think the people out there who watch this show, if they are silly enough to, could believe that. They are saying that those people have been drummed, beaten and whipped into order, so their vote becomes a nullity. The government members are voting for what the government tells them or, more appropriately, they are voting for what the oligarchy tells them, which is the Premier, about four or five cabinet ministers who are in the know and about six spin doctors who never got elected to anything in their lives, who are down in that back office on the second floor and in the Premier's office, eating shrimp and God knows what, making the decisions.

The Acting Speaker (Mr Villeneuve): I want to remind the honourable member that we are on Bill 130. It has nothing to do with shrimp.

Mr Callahan: They are down there guzzling. If they are guzzling, that relates to Bill 130.

Every bill that relates to tax in this Legislature should be scrutinized to the ultimate. People have reached a stage in their lives, because of the recession -- I call it a depression. It is not a recession. We should all use the D-word. We are at a stage where, if we did not have the social programs in place, we would be jumping out of windows like they did in the 1930s. That is how bad it is.

What does this government do? It brings in tax measures such as this, which are literally going to slaughter the car industry. There will not be any cars sold, at least in the category included in here. I will not bore you with them, Mr Speaker. The member for Etobicoke West was quite eloquent the other night in telling you what kind of cars they were. They are small cars. They are not the cars of the rich, they are not the cars of the polluters, they are cars that are quite small -- cars you might drive, Mr Speaker, or many members of the Legislature other than the cabinet. Cabinet members, of course, probably drive the ultimate gas guzzler, because they are driven around at the expense of the taxpayers of this province, but I do not want to say that. That is unfair.

The people of this province, the people out there who are pinching their pennies, worrying about how they are going to look after the minimal costs, heating, rent, food, how are those people going to survive when this New Democratic --

Mr Harnick: On a point of order, Mr Speaker: I do not believe there is a quorum in this chamber.

The Acting Speaker (Mr Villeneuve) ordered the bells rung.

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The Acting Speaker (Mr Villeneuve): A quorum is now present. The honourable member for Brampton South can resume his participation in the debate.

Mr Callahan: Mr Speaker, I wish the government, which is responsible for keeping a quorum in this House, would do so, because every time I have to stop my debate I lose my train of thought. Some of those over there would say, "That's easy" or "Hurrah," but the government has a responsibility.

Interjection.

Mr Callahan: He has got it wrong. He just put his hand over his mouth. He was just told not to say that because if you say that you are muzzled or you lose your seat as chairman of a particular committee or parliamentary assistant, where you get extra money.

Interjection.

Mr Callahan: The whip is talking now.

The Acting Speaker (Mr Villeneuve): Please overlook the interjections. They are out of order. Please address your comments to the Chair.

Mr Callahan: I will do my absolute best. I notice that the spin doctors off in the wings underneath the press gallery are trying to pass messages furiously to the government: "Muffle, muffle, don't say anything, because if you do, they'll debate it." The whip is going off to check that out, to make sure the spin doctors under there are not doing that.

In any event, there are people out there who are purchasers, there are people out there in business to sell cars, there are people out there in business to lease cars, there are people out there to sell tires, there are people out there to repair cars, there are people out there to sell parts. There are people out there for a whole host of things.

This bill becomes particularly significant when we look at the headlines in the news tonight that Bob White is in Oshawa -- and I wish him luck -- furiously working to save the jobs of some 4,000 workers. What is the Treasurer doing? The Treasurer was unaware this would happen. Bob White is probably saying: "Hey, Floyd, why did you do that? Why don't you withdraw that tax? We're down here trying to negotiate a deal that will be made in Detroit, probably tomorrow morning, where 4,000 poor souls will be kaput, out of their jobs by 1995. Union people you say you represent will be out of work."

I will probably not be here in 1995 around Christmastime to debate the poverty these people will be in, where they cannot get a Christmas tree or gifts for their kids because they are out of work. But if I am not here in 1995 I will be out there as part of the citizens concerned about what the government is doing taxwise and saying to myself, "We told you so." I will think back to the Minister of Industry, Trade and Technology laughing about it.

Hon Mr Philip: Who's laughing about it? You don't need to tell lies to the House about other members.

The Acting Speaker (Mr Villeneuve): Please don't use those words.

Mr Callahan: It is interesting, Mr Speaker. We are here every day in the House dealing with the question of the Minister of Northern Development and the minute we say "liar" the House leader is up on his feet saying we cannot do it, yet the Minister of Industry, Trade and Technology can stand there and call me a liar. I find that objectionable. There must be separate standards. It is like the Premier; there are separate standards. The Premier has his guidelines that tell us everybody is going to be holier than thou, and when it comes time --

Mr White: On a point of order, Mr Speaker: The member for Brampton South had some very interesting discourses that have nothing to do with Bill 130.

The Acting Speaker (Mr Villeneuve): The honourable member for Brampton South, please stay on the subject.

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Mr Callahan: I am really pleased; that is the first time the member has come up with a point of order that was correct. I agree, I am off the point. I am off the point because I am silly enough to respond to the comments made by the Minister of Industry, Trade and Technology, our paramount minister, who is supposed to be getting us industry for this province, making light and calling members in this House --

Mr White: On a point of order, Mr Speaker: Let me address that same issue. We are dealing with Bill 130, not with the issue of private members in their caucus.

The Acting Speaker (Mr Villeneuve): I have reminded the honourable member. Yes, he can deviate to some degree, but he must be addressing Bill 130. He has been advised of that and I think he is doing a good job.

Mr Harnick: On a point of order, Mr Speaker: I do not believe we have a quorum.

The Acting Speaker (Mr Villeneuve): I ask the Clerk to check if indeed we have a quorum.

Clerk Assistant: A quorum is present.

The Acting Speaker (Mr Villeneuve): A quorum is present. The honourable member for Brampton South can resume his participation in the debate on Bill 130.

Hon Mr Pouliot: On a point of order, Mr Speaker: I thank you very kindly and best wishes. I am appalled and shocked that people are asking whether the House is duly constituted.

The Acting Speaker (Mr Villeneuve): That is not a point of order.

Hon Mr Pouliot: Mr Speaker, with the highest of respect, I notice that the Conservatives have but one member here.

The Acting Speaker (Mr Villeneuve): That is not a point of anything.

Hon Mr Pouliot: Yet the government is represented by soldiers at their posts, just for the record.

Mr Harnick: On a point of order, Mr Speaker: It almost needs an apology to soldiers for the minister to come in here and degrade soldiers.

The Acting Speaker (Mr Villeneuve): That is not a point of order. To the honourable member for Brampton South, please address your remarks to the Chair -- interjections are out of order -- and please resume the debate.

Mr Callahan: I intend to do that. I have to speak about Bill 130 and I think it is an important issue, but I find it passing strange that a member of the Legislature, the Minister of Transportation, who has been around here for a long time, does not understand what a point of order is and attempts to rise to say that anybody other than the government has to maintain a quorum in this House. We all know, and the people out there now know, that the government has the responsibility to do that.

Getting back to Bill 130, because that is the subject of our debate, the Liberals had a bill that dealt with cars that used gas excessively because we were concerned about the environment of this province and concerned about truly looking after the environment for people coming after us. When we did it, it was only targeted to a minority of cars with the highest fuel inefficiency. In fact, when we were in power the government got rid of leaded gas, basically phased it out.

Mr Hope: How many jobs did it cost?

Mr Callahan: The member for Chatham-Kent asks how many jobs it cost. Let me tell him something, this gas -

Mr Hope: Tell me how many jobs. Don't tell me the preamble to all the stuff.

Mr Callahan: We are on the eve of Detroit telling General Motors, very sadly, that there are going to be something like 4,000 jobs lost. They are going to eliminate these jobs by 1995. How can members over there speak about how many jobs were lost? We are on the eve of 4,000 jobs, of the people they supposedly represent, possibly being lost. I find that absolutely sad and terrible. I think any member of the government who is not prepared to be led down the garden path by the ring through the nose is prepared to say that too. It is a very sad time.

For an honourable member of the government to ask how many jobs the suggestion of the Liberals cost -- it did not lose any. Members did not hear Ken Harrigan of Ford trying to get hold of somebody to change the tax, as he did with the Treasurer. They did not hear him saying, "Jobs will be lost because you're bringing in a tax that is so pervasive it is going to lose jobs." It was done in a very honest and fair way in that it achieved two objectives: ensuring that cars with inefficient fuel consumption were environmentally sound, and not interfering with the jobs of those people in the auto industry. We were very sensitive to that.

The members opposite, for some reason, are like an elephant in a living room with a china closet. They just go trampling through and say, "Hey, here's a great place we can get taxes from." They just charge through and do not worry about the people they supposedly represent on the side of jobs. On the other side of the coin --

Mr Elston: Here he is.

Mr Callahan: Floyd, come on in, join the party.

On the other side of the coin, you do not buttonhole the Treasurer, who is a good friend, and say, "All right, if you want to raise these taxes" -- because Bob White talked to the Treasurer and the Premier and suggested: "Here is what we should do. We should enlarge the number of cars affected by Bill 130 and spread it around. Let everybody pay it, not just those people with inefficient cars who are going to pollute our environment. Let everybody pay for it."

The Treasurer did not tackle him on that. He did not wrestle him to the ground, which I would have expected because I think he is an honourable person. I think he allowed Bob White to come forward and say, "Mr Harrigan is upset and we want you to change your tax and we want you to cover a whole host of vehicles."

When this bill is passed -- I am sure it will be because it will be rammed through with the arrogant majority the government has -- there will be people who might want to buy their wife a Honda Accord for Christmas or for New Year's, or there will be some young university student who has graduated and the father wants to buy him or her a Honda Accord or something along those lines. When he goes out to buy it he looks at the bill and says, "Holy cow, what is this?"

I suggest in all sincerity that there should be an amendment to this bill that would require every bill of sale to that wife getting a car, that young person getting it as a gift, or that young person who saved his or her dollars to get it, to have written on it "the Floyd Laughren tax" or "the NDP tax" so that these people are clear as to how that extra money got there. That money is going to be significant, big bucks. These people who have saved and worked hard to collect those dollars they thought they had to pay will now find they are going to have to pay just a bit more. That means when they go to the car dealer they cannot get it, they cannot drive it home, because they do not have that extra money. They can thank their New Democratic government for that. They can thank them for imposing a tax without thinking of the repercussions.

Unlike the Liberal government -- where it was a matter of trying to make certain that cars with the highest fuel inefficiency would be taxed to present that money to cover environmental problems -- they have not thought about that. This government, as the member from Etobicoke said, put all the money into what they call a consolidated revenue fund. I want everybody out there watching to understand what that is. It is a bottomless pit into which all the money goes.

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Mr Mills: I don't think there is anybody watching.

Mr Callahan: The member for Durham East says nobody is watching. There are a lot of people out there watching who are concerned about it to the extent that they now tune in because they want to be sure what is going on in this place. They are tired of this oligarchy. They are tired of this inefficiency in government. They are tired of being taxed to death. They are tired of being told afterwards that this debate went on, because nobody debated it in the past. It has become a time to debate every tax and expenditure of the government.

Their comment would be, "Why didn't the Liberals do it?" We were very fortunate; our time was when times in Ontario were good. Perhaps it was not that significant, but today it is. If my government were in power now I would be standing up and speaking exactly the same way I am now, as a member of the Liberal government.

Hon Mr Allen: Tell us another one. We remember.

Mr Callahan: Check my record. I will match my record against anybody's in this House. But I know what the government is going to do. It will say: "Who cares? It's tax. Let them eat cake." Remember Marie Antoinette? She purportedly did not say that, but I think that is the attitude when you get over on that side of the House, when the crown is facing you, when you get the power. It is, "I don't know those people who voted for me in Kitchener and" -- let me get some of those ridings out, because I think they are really important.

The member for Windsor-Riverside says: "Who are you? I don't know you."

The member for Etobicoke-Lakeshore, when she meets somebody on the street says: "I don't know you. I'm voting for this bill because the government wants me to." They say, "Ruth, we voted for you. We expected some environmental concerns. We expected moneys raised by this bill to be earmarked for that very concern, that this gas guzzler tax had a real meaning to it."

People meet the member for Lake Nipigon. They will say to him: "You know, the north is in trouble and we need money. Have you approached the Treasurer to earmark some of these new taxes to be allocated to the north?"

I could go through this whole list but I am not going to do that because I know there are other members in this House who wish to debate this bill. I am pleased there are people who wish to debate this bill because I will end the way I started.

Taxes, when it was fat-cat Ontario, that passed through this House like the fog or the dew over the heather, can no longer happen. It is important that not just members from the opposition but government members understand that and stand up, fight, debate and question every tax measure and expenditure that comes through this House; that they are interested and fight for the integrity of ministers being required to account to committee in this House, because they are the people who have access to the strings of government and to the strings of expenditures. It is time for the people of Ontario to be given returns for that sacred trust they gave each and every member of this Legislature on election day in 1990.

Mr Harnick: I have been sitting in this House and listening to the debate on Bill 130. We started this debate a week ago, I believe it was last Thursday, and I have yet to see a member on the government side stand up to tell us why this is a bill that is worthy of voting for. There has not been a single person on the government side stand up to defend this piece of legislation. The reason is that they know their constituents are tired of paying taxes. They cannot justify another tax, yet they all sit there on their hands, afraid to say anything and afraid to do anything and afraid to represent their constituents. That is why we all have the opportunity to come here and talk about these tax bills and have the opportunity to try to do something positive for our constituents, and that is why I am participating in the debate tonight.

In the riding of Willowdale, which is an urban riding in Metropolitan Toronto, my constituents are concerned about the amount of tax they have to pay. They are concerned every time the government raises taxes, because every time the government raises taxes they have more difficulty maintaining their businesses, their homes, their jobs, and that is what this bill is all about.

This is an insidious tax that is going to increase and has increased the cost of every vehicle being sold. It is very interesting that as the cost of vehicles goes up, the volume of sales goes down. We also see that the automobile industry in this country becomes less able to compete with manufacturers in the United States and in other parts of the world. The proof of that is the fact that General Motors is under siege, and as of tomorrow 4,000 unionized employees are going to lose their jobs. Their futures are at stake.

It is a sad, sad thing that this government, instead of recognizing the difficulty of the automobile industry to be competitive, has gone ahead and heaped one tax on top of another tax. It has done the same thing the Liberal government did: 33 tax increases; this government comes along and is doing the exact same thing. It is just piling it higher and deeper on top of the taxpayers and the workers of this province. At the same time, this government purports to represent working people. Well, the working people in my riding do not want to pay any more taxes, and they are tired of it.

Mr Winninger: How do you know? Do you ever talk to them?

Mr Harnick: As a matter of fact, I do speak to my constituents, and they do not want to pay any more taxes.

It is interesting that the members on that side of the House not have the guts to stand up and tell us why this is a good bill. I notice not one single person has attempted to do that, not one single person has stood up to try to explain to their constituents why this is a beneficial tax and why their constituents should be happy to pay it. Not one person on that side of the House has got off his or her duff since Thursday, when we started to debate this, and is prepared to talk about why this is a good tax and why his constituents should be happy. The reason none of them stands up is because every one of them is embarrassed. They are embarrassed because they promised certain things to their constituents and now they are breaking those promises. They are doing exactly what the Liberals did, they are raising taxes. Instead of looking at ways to stimulate the economy and have private industry create the wealth so that taxes can come down, they are prepared to make more people pay and pay and pay.

The people in Willowdale are not happy about that. They are not happy about taxes going up, they are not happy about paying more for gas, they are not happy about paying more for cars, they are not happy about paying 11.5% or 12.5% more for hydro. It makes it very difficult. Toronto is a difficult and expensive city to live in for my constituents. Every time they raise taxes, it makes it more difficult for my constituents to live comfortably, it makes it more difficult for my constituents to pay their mortgages, it makes it more difficult for my constituents to pay their taxes.

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The Treasurer sits and shakes his head at me and smiles. I am amused, because I know if it was appropriate the Treasurer would probably get up on his feet. Maybe eventually in this debate he will try to explain to us why the constituents of this province and his constituents should bc happy to pay this tax. As I have told government members, and I now have the ear of the Treasurer, not one single person on the NDP side of the House is prepared to stand and justify this tax to his or her constituents. I do not think (a) they talk to their constituents, because if they did they would know their constituents do not want to pay more taxes, and (b) they do not have the guts to stand here and say why this tax is needed. The reality is that it is not needed.

Mr Winninger: You would slash hospital beds.

Mr Harnick: The Liberals may have taxed hospital beds; you close hospital beds.

The Deputy Speaker: Speak to the Chair.

Mr Harnick: Every time the government runs into a crisis and every three months when the Treasurer has to come up with his statement to regulate or justify the Treasury policy, he goes ahead and closes beds, because that is the way he is saving money so he can come in at a $9.7-billion deficit. That is really something to be proud of. They close hospital beds to try to keep the deficit under the projected figure and they tell me people tax hospital beds.

This government has a long way to go if it is going to try to prove to people that this tax is for the benefit of the people in this province. It is not for the benefit of the people in Willowdale.

As I was saying before the member for London South decided to talk about the closure of hospital beds, my constituents are having great difficulty. They have great concern about the ability to maintain their jobs, the ability to pay their taxes, the ability to pay increased hydro rates, the ability to keep their businesses going, and this particular tax does nothing to help them. It only adds insult to them.

We have all heard the old adage that there are only two things that are certain in life, death and taxes. This government is going to kill this province and we are going to have death, or it is going to keep raising taxes, which it has been doing. I think it has done a masterful job of doing that.

They raise the tax on the price of basic transportation. The people in my riding which is a suburban riding, need their cars to go to work. In my particular constituency, the roads are overcrowded. We do not have a transit system that has grown with the population. We keep hearing from the Minister of Transportation that he is going to build a subway, but we never see any action. We heard from the Liberals about their $5-billion transportation plan and we heard from the NDP that they were going to continue that. I have not seen one single improvement in my riding because of anything this government has done.

Then they go ahead and raise the price of basic transportation. When people in my riding go out to buy the cheapest, most economic car, they pay extra for it, because the Treasurer allegedly wants to look after the environment. Not one cent will go towards the environment. This is just a tax grab.

The Treasurer is saying, "Charles, Charles, Charles," and I appreciate that the Treasurer is sensitive about this; he is sensitive about the things I am saying. Unfortunately, he does not have one single person on his side of the floor who is prepared to stand up and stick up for the tax he is levying on the people of Ontario. There is no one on his side of the floor who is prepared in any way to say that this tax is justifiable.

We are talking here about what this tax is doing to the car industry. It is interesting that tomorrow we are going to hear about a lot of jobs that are being lost. This tax has not helped make the car industry in Canada more competitive. It has made it less competitive, and therefore we are seeing jobs going south. They sure cannot say it has anything to do with free trade, because we have had the auto pact in this country since about 1962 or 1963.

Interjections.

Mr Harnick: No, it has nothing to do with free trade, not in the auto business. But this tax has not done anything to make the automobile business in this country any more competitive and therefore jobs are being lost. The government has done a number of other things to destroy the climate for doing business in this province. They have labour legislation that they are about to propose. It comes out in a leaked cabinet document so that everybody can see in advance what the government is planning to do, and they get upset. They see that here comes another blow to business in the province. They government has created a situation where it deliberately says: "We're not interested in developing labour legislation that is balanced and fair. We want to deliberately provoke confrontation and we deliberately want to tip the balance from being even to being union, one-sided."

What does that do for the business climate? It makes this province less competitive, and we lose more union jobs. I keep hearing the Minister of Labour stand up and say that the labour laws here have been marked by confrontation. The labour laws in Ontario have not been marked by confrontation. Granted, there are strikes and there are disagreements and there are contracts that have to be negotiated and sometimes that it is a difficult process but, by and large, labour legislation in this province has been among the most progressive of any jurisdiction in North America. We have not had the violent strikes they have had in Quebec. We have not needed the labour reforms that this government is about to propose.

But what is that labour legislation going to do? It is going to take supervisors and make them all union people. That is indicative of the fact that this government does not do the right things to make this province competitive. It goes back to labour legislation, it goes back to taxes, it goes back to the climate they are creating: the deficit, the labour legislation and increased taxes.

Everybody in this government is proud of raising taxes. I think that is a tragedy. That is absolutely the most ludicrous, backward way to try to make an economy strong I could ever imagine. This tax is just another example of that. It is a tax grab that hurts everybody. It is a tax grab that is not necessary. It is a tax grab that as of tomorrow will indicate to the Treasurer that it has hurt workers, has lost jobs, has hurt General Motors and has hurt Ford, and it has not done anything of a productive nature for this province.

The other thing is that we hear all of those nice things from this government. We hear that this tax is a tax that is going to help the environment, just like the tire tax and other taxes. None of it is going to the environment. It is nothing more than an out and out tax gouge. Again, all it does is create in this province a climate that makes it absolutely impossible for people to have jobs that are secure and for people to be able to pay the taxes that are already levied against them.

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I do not think this is a very good tax. I do not think it is going to help young people in this province. I represent a riding in the municipality of Metropolitan Toronto, and it has become virtually impossible for a young person to afford to purchase a home in the municipality of Metropolitan Toronto. The members of the government side laugh about that; they laugh about the fact that people are brought up in this municipality and then they get old enough and they get educated and they want to live in this municipality and they cannot.

Hon Mr Pouliot: Who paid for your education?

Mr Harnick: I paid for my own education. The Minister of Transportation wants to know who paid for my education. I can tell him two things: (a) that I got an education, unlike him, and (b) that I paid for it myself.

Interjections.

Mr Harnick: The levying of all of these taxes makes it virtually impossible --

Interjections.

The Deputy Speaker: Order. The member for Willowdale.

Mr Harnick: I suspect that education here really sparks a note. I suspect there are a whole lot of people on that side who wish they had one. But let me go back to young people. Young people today no longer can afford to live in the municipality of Metropolitan Toronto. They get an education here --

Interjections.

The Deputy Speaker: Order.

Mr Harnick: I really notice that the people on the other side of the House have a lot to say about taxes when they are sitting on their behinds, but I have not seen one of them spring to his or her feet to justify the taxes this government is levying.

Interjections.

Mr Harnick: Let me try again, because it is quite obvious that the government does not wish to hear about the difficulty that young people are having in my riding because of its policies.

Young people in my constituency, once they complete their educations, cannot afford to live in the community they have been raised in. They cannot afford it because they go out and get a job and they have to pay so much of their income towards taxes that they really cannot afford to continue to live in the community they were raised in. So they have to go far away. They probably have to move away from the municipality where they work and where their family hails from, and they need their cars. They need their cars and they have to pay for gas. This government has not made it any easier to afford basic transportation, nor has it made it any easier to afford gasoline.

I hear the Minister of Tourism and Recreation, a voice seldom heard in this Legislature, the minister who has probably about the third- or fourth-largest budget of any minister. I note every week hotels closing up, gas prices going up and fewer and fewer tourist dollars coming to Ontario. I hear very little from the Minister of Tourism and Recreation. I cannot recall the last time he made a statement of any significance in this Legislature, save and except for the time that he got rid of admission fees to Ontario Place. I really do not think that increased tourist dollars one iota. I do not think the Pinestone resort in Haliburton that closed up for the first time ever in the winter because it could not afford to stay open really benefited very much by Ontario Place's free admission fees. So I am waiting to hear what the Minister of Tourism and Recreation is going to tell us about what he is doing to attract tourist dollars.

I am still waiting to see how the Minister of Labour is going to tell us how his proposed labour legislation is going to create a better climate for workers and for employers in this province. I am still waiting for the Minister of Transportation to build the Sheppard subway in Willowdale, to complete that $5-billion plan that they promised, the one that they stole from the Liberals, who did not deliver. Those are all the interesting things I am waiting to see.

I think it is interesting that the Minister of the Environment is here. She is the big beneficiary from the tire tax and the gas guzzler tax, but I have not seen any of these dollars going into any environmental programs. These dollars go into general revenue. They just keep raising the taxes and raising the deficit. So I cannot see that any of this is helping anyone every time they raise the taxes.

It is interesting that after the gas guzzler tax was first announced, Ken Harrigan, the president of Ford Motor Co, said it was going to hurt the automobile manufacturers in the province of Ontario.

Mr Winninger: There's a guy who knows how to attract business to Ontario.

Mr Harnick: There is the member for London South talking about, "There's a guy who knows how to attract business to Ontario." What the president of Ford Motor Co said about two weeks ago was that in spite of the fact that he has no respect for this government because it does not know what it is doing, he is committed to continuing to spend money here because he has an allegiance to his employees, he has an allegiance to this province, despite this government, and he has so much money tied up in the Oakville assembly plants that he has no choice but to stay in Ontario.

I think the member for London South, who said something to the effect that there is a great person, in derision, when I mentioned Mr Harrigan's name, should be thankful that Mr Harrigan continues to work. I am rather shocked when I hear those remarks, those disparaging remarks about probably the biggest employer in southern Ontario. What do the members of the NDP government say? They say: "There's a great Ontarian, Ken Harrigan. What's he ever done for this province?" I will tell the members, he has created wealth and he pays a lot of taxes so that their deficit is not even higher than the $9.7 billion.

The Deputy Speaker: There are too many conversations going on. I have great difficulty in hearing your debate.

Interjections.

Mr Elston: Just while we have a break, and bearing in mind, Mr Speaker, that we have a couple of moments right now, could you repeat for us the matter at hand, so that the people here who have just come in and who have sort of disrupted our proceedings would be aware of exactly what it is that we are debating?

The Deputy Speaker: The member for Willowdale has been debating Bill 130, An Act to amend the Retail Sales Tax Act, and he has been following the bill fairly closely.

Mr Harnick: I have touched very briefly on the labour legislation that the Minister of Labour has proposed.

It is interesting when we talk about taxes, when we talk about competitiveness and when we talk about the climate in this province. I will just read the All Business Coalition press release of October 17, and it says: "Permanent job losses will accelerate dramatically if the Ontario government proceeds with its proposed revisions to the Ontario Labour Relations Act, according to a survey of 300 chief executives in the business community."

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We have high electrical costs, with power costs going up by 12.5%, and taxes going up, even for basic transportation, and labour laws do not create a great climate and they do not inspire a lot of confidence in the future, in so far as the people of Willowdale are concerned. The All Business Coalition did a survey of 300 executives which shows the economic and social needs of our citizens will not be satisfied until business confidence is restored and the province sends out a signal that Ontario is open for business.

What signal has this government sent out? They have sent out a signal that indicates they do not want to do business in Ontario. They do not want people to prosper. They just want people to pay higher taxes so they can keep their $9.7-billion deficit at what they said it was going to be. In the course of doing that, they are going to close up a few more hospital beds, but they are going to do their darndest to keep that deficit to $9.7 billion and recklessly -- three times the level of the deficit left by the Liberals, their $3-billion deficit.

I noticed that the provincial deficits, cumulatively, are going to be about $14 billion this year across the whole country, and almost $10 billion of that is right here in Ontario. I will say that that is something that is not going to satisfy the citizens of Willowdale.

The All Business Coalition did a survey and its most important conclusions were that 86% of Ontario firms surveyed expected the adoption of the proposed labour legislation would result in the loss of some or all of the jobs they currently provide in Ontario. For the economy as a whole, this could mean as many as 480,000 Ontario jobs are threatened -- and they are not threatened by free trade and not threatened by the GST; they are threatened by their proposed labour legislation.

What is the Minister of Labour's justification for that labour legislation? It is the terrible conflict between management and unions that he perceives. Well, there has been no such conflict, and when 480,000 jobs are at stake, it means taxes for everyone else have to go up. My constituents cannot live any longer with escalating taxes. They cannot do it, so this bill that raises the tax on basic transportation certainly is not helping my constituents, and I do not see anybody on the government side jumping up to tell me why it is a good and necessary tax.

The survey that talks about the business climate in Ontario goes on to say that 90% of respondents said the changes would affect their investment plans, with the result that $20 billion in future investment over the next five years is in jeopardy if the government's proposed changes are enacted.

Where are we going to get that money back? Are we going to get it back because the Treasurer is going to cut programs? Well, he cannot do that now. He is trying, but he cannot do that now. Are we going to get it back because he is going to stimulate the economy? Well, tax increases are not going to stimulate the economy. So the only place he is going to get any of this money back is by raising taxes even more. He is going to raise taxes even more, and the last person who leaves the province I hope turns out the light because the energy costs are going up 12.5% a year.

It always amazes me, but when you talk about $20 million -- $20 billion; I cannot even say it, but $20 billion; I cannot even conceive of it -- $20 billion, probably more than a third of the provincial budget, is going to go walking from this province, and the members across the way laugh. They laugh about that. They laugh about the fact that 480,000 jobs are in jeopardy. At the same time that they are laughing, what are they doing about it? They are raising taxes. They are raising taxes because they want to see if they can outdo the Liberals. They want to see if they can raise the taxes more than 33 times. Well, I can tell the members, they are on the road. They are right on track, because in the first year they are probably ahead of the Liberal pace. I think that they are just going to cruise along and make the Liberals look as if they were going slow. In one year they have tripled the deficit. The Liberals had a deficit of just over $3 billion, and the Treasurer came along and the deficit tripled. So I do not think that is something that the members of this House should be laughing about.

I do not think they should be laughing about the fact that nearly 80% of the firms surveyed believed that the proposed changes would seriously weaken the ability of their operations to compete. It is interesting, the Treasurer is now getting on his Mulroney horse. When you do not have anybody else to blame, blame Mulroney. Do not ever look at what you can be doing yourself. Go ahead and blame the feds. Blame the feds. Jump into bed with the feds and do the same

Interjections.

The Deputy Speaker: Order, order. The member for Oakville South, order.

Mr Harnick It is interesting that as soon as the government does not know what to do, it blames somebody else. It blames Ken Harrigan at Ford, and tomorrow it will be blaming Mr Peapples at General Motors, and it is going to blame Mulroney.

Hon Mr Laughren: You can't defend him, can you? We want to hear a defence of Mulroney. The people of Ontario want to hear a defence of Mulroney.

The Deputy Speaker: Order, Treasurer.

Mr Harnick: Every time this government gets into trouble it points its finger at somebody else, but then it jumps into bed with them and it does the exact same thing. I remember when this government came up with this brilliant budget, the big-spending budget, and now it is running around talking about fiscal restraint.

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Hon Mr Laughren: You would spend this province into bankruptcy just like the federal Tories did. Talk about what the feds did. What did Mulroney do to this country?

The Deputy Speaker: The member for Willowdale, I would suggest you should perhaps address the Chair.

An hon member: I'd suggest the Treasurer address the Chair.

Mr Harnick: I think that the Treasurer should also address the Chair, because he is shouting there. He is coming out of his seat. I feel sorry for him because he is the only person here who can defend or try to defend what the government is doing. The rest of the bozos sitting there behind him have never paid taxes so they do not know --

The Deputy Speaker: Order, I simply will not accept that type of language. I will not accept that. Please restrain yourself. Address your remarks to the bill and speak to the Chair. The member for Willowdale.

Interjection.

The Deputy Speaker: Treasurer, please.

Hon Mr Pouliot: I've never heard that kind of language in a pool hall. I am insulted.

The Deputy Speaker: The Minister of Transportation, please.

Mr Jackson: Whose pool room do you hang out in and how come I never see you there?

The Deputy Speaker: Order, the member for Burlington South.

Mr Jackson: Excuse me, Mr Speaker. You are right.

The Deputy Speaker: The member for Willowdale, please pay heed to what I have told you.

Hon Mr Laughren: Go ahead and make an ass of yourself.

Mr Carr: On a point of order, Mr Speaker: I wonder if you could rule if "ass" is an acceptable term from the Treasurer.

The Deputy Speaker: Order. The member for Oakville South, you are not in your seat. The member for Oakville South, this is unbecoming of a member of Parliament.

Mr Carr: Sorry, Mr Speaker. I will sit here and be quiet. Mr Speaker, the ruling is what?

Interjection.

The Deputy Speaker: The member for Oriole, please. The member for Oakville South, please take your seat.

Interjections.

The Deputy Speaker: Order, please. There is decorum to keep in this House and the procedures apply to all of us. I would ask your co-operation, please.

Mr Arnott: The Treasurer used foul language.

Hon Mr Laughren: An ass is a donkey.

Mr Jordan: That's your definition.

The Deputy Speaker: Order, the member for Lanark- Renfrew. The member for Willowdale, you have the floor.

Mr Jackson: On a point of order, Mr Speaker: The member for Oakville South, whether he was in his seat or not, did call upon you for a ruling. The Treasurer did clearly utter and reference a member as "an ass" and he was not referring to a member of his own caucus. I would ask Mr Speaker, in accordance with the House rules, that you rule on that point of order, and the House awaits your decision.

Interjections.

The Deputy Speaker: Order, please. This is getting out of control. I said very clearly, very succinctly, that the member for Oakville South was not in his seat. The ruling was made at that time and this is it. The member for Willowdale, please continue to debate. No point of order, please.

Mrs Sullivan: On a point of order, Mr Speaker: I think that all of us here are concerned about two things, and we recognize that you ruled appropriately that the member for Oakville South, my colleague, exhibited inappropriate behaviour in climbing over the seats to go back to his chair. However, the issue that the member raised when he was out of his seat related to the language that the Treasurer used referring to members opposite as "asses." He was not referring to the law, in the common expression, "The law is an ass." He was referring to people on benches opposite. We believe that expression to be unparliamentary. We ask that it be withdrawn.

The Deputy Speaker: Thank you. Let me explain what the role of the Speaker is all about. I sit in this chair trying to pay as close attention as possible to what goes on in the debate. When the House gets totally out of control, it is extremely difficult on my part to be able to render a judgement which will be satisfactory to everyone. Therefore, I would ask your co-operation to stop these points of order and let's continue with the debate. The member for Willowdale.

Interjections.

The Deputy Speaker: Order, please. Member for Oriole, you have a point of order?

Mrs Caplan: Yes. On the point that this Speaker raises, I believe that his concern about decorum in the House is justified, and I wanted to explain to him -- I have been sitting here, also paying attention to what has been happening in the House -- the Treasurer's comment has provoked some members in the House to the kind of behaviour which I believe is unbecoming, and that may be the reason that we have this problem.

The Deputy Speaker: Thank you. I think that we have gone --

Interjections.

The Deputy Speaker: Order, please. This is your House and I think we have debated long enough on that issue.

Mrs Caplan: The Treasurer should withdraw.

The Deputy Speaker: Order, please. Member for Willowdale, you have the floor.

Mr Harnick: I can understand the frustration that the Treasurer has. When we talk about these taxes and they cannot justify them, the only thing he can say is to call me an ass. He --

Hon Mr Laughren: No, a donkey.

Mr Jordan: You don't know the difference.

The Deputy Speaker: Order, please.

Mrs Caplan: This is conduct unbecoming a minister of the crown.

Interjections.

The Deputy Speaker: Order. I will ask you simply for your co-operation. The member for Willowdale.

Mr Harnick: I appreciate his frustration, because he gets no support from the people sitting there with him; they do not have any idea about what is going on. He is entitled to be a little bit defensive, because when he raises everybody's taxes in this province, he is not a very popular person.

He does not know whether to cut programs. He does not know how to do that. He does not know how he is going to come in with his $9.7-billion deficit. So he is inclined to call people names and he is inclined to lash out at people. He has to sit here with his bunch of backbenchers, none of whom gets up and takes any opportunity to join the debate, because these people do not have the gumption or the guts to stand up and represent their constituents -- or the ability, I might add; they do not have a scintilla of ability to represent their constituents. When taxes are being levied, they say: "We don't care what happens to our constituents. We don't care if they have to pay taxes. We don't care if we raise the deficit. We don't care who's going to be left with the burden of paying this deficit. We just do it and we hide. We hide in the Legislature at 10 o'clock, or almost 10 o'clock, at night." They do not have the guts to stand up and fight for their constituents. They just sit there like bumps on a log. The one person --

Interjections.

The Deputy Speaker: Order. I have great difficulty in understanding why you are promoting the ire of the whole House. The member can use other types of language which will not be offensive or provocative. I would ask you please to co-operate.

Mr Turnbull: On a point of order, Mr Speaker: Unless you are prepared to rule against the people on the government benches who are hurling insults, it is not surprising that our member who is debating will certainly express his disgust and concern with that kind of language.

The Deputy Speaker: Thank you. The role of the Speaker is to be sure that the debates are conducted in a dignified way.

Mr Turnbull: You are also responsible for making a ruling.

The Deputy Speaker: Order, please. I have ruled before that I ask for your total co-operation, and I know --

Some hon members: That's not a ruling.

Interjections.

The Deputy Speaker: And I know that you will give me that co-operation. The member for Willowdale.

Mr Harnick: I do not expect anything better from this group of misfits across the floor than to hurl insults at me.

Interjections.

The Deputy Speaker: Order, please.

Interjections.

The Deputy Speaker: Order.

Interjections.

The Deputy Speaker: Order, please. You give me no other alternative than to recess this House for 10 minutes. Thank you.

The House recessed at 2151.

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The Deputy Speaker: The member for Willowdale.

Mr Harnick: As I was saying, it is a sad thing that we try to debate and all the government can do to defend its position is call me names. That is very unproductive, but it is the tactic of this government. They try to justify high taxes; they cannot, so they call you names. They do the same thing when we are talking about what is going on in northern Ontario, dealing with health care. They send out a minister to defend a policy, and what does she do? She lies. She slanders, and that is the way this government --

Mr Johnson: On a point of order, Mr Speaker: I believe the debate is on Bill 130, and the member very obviously is not following that debate.

The Deputy Speaker: I have to apologize. I was consulting with the table. I did not hear the member starting his debate, but I will trust that he will debate Bill 130.

Mr Harnick: I appreciate that it is rather difficult for some of the people on the other side to understand what is going on here, so I will start again. Maybe I should start at the very beginning. I have been speaking here for probably a little over an hour and I have noticed that the government members do not have the ability or the wherewithal to stand up and justify their high tax policies and their constant tax increases. What they do, in order to try to justify those policies, because none of them has the guts to stand on his feet and fight for his constituents -- they call me names. The Treasurer comes in and swears at me because he cannot justify his policies -- the Treasurer and Deputy Premier. Then some of the little underlings, who use him as an example, do the same thing.

Hon Mrs Haslam: On a point of order, Mr Speaker: Under standing order 23(k), the language used to incite --

Interjections.

The Deputy Speaker: Order. Will the member for Willowdale please continue.

Mr Harnick: I do not know what can be more exciting than to have someone swear at you. I merely point out that this is the only way they can justify their tax policies, because none of them has the guts to stand up and fight for the policies his government is ramming down the throats of the people of Ontario. All they can do is swear at me. It is the same way they justify their northern health care policy. They send the minister out and she lies and slanders, but that is how they justify what they are doing in the area of doctor-government relations.

One member of their government, the member for Lincoln, goes ahead and on a tax matter stands up and fights for his constituents. I might tell you, Mr Speaker, that I have the greatest respect for that member. His constituents should be proud that they have him in the House because he stood up, unlike every other member on the government side, and fought for his constituents, and what did it get him? He got sent out to right field.

Mr Scott: He never said he was sorry.

Mr Harnick: He did not say he was sorry and they did not give him that nice, plum job as the Chairman of the standing committee on finance and economic affairs back. What did it get him? So the rest of the members, instead of following his lead and standing up for their constituents, what to they do? They follow the Treasurer's lead and sit in their seats, looking idle and swearing at me because I am standing up here fighting for my constituents. I can tell you, Mr Speaker, that this lot of people, representing 38% of the voters in the province, are the saddest lot of people I could ever imagine. They are proud to levy taxes on their constituents. They are proud to make the cheapest forms of transportation available more expensive. They are proud to raise the price of energy costs. They are proud of all the things that are hurting my constituents and, I hate to tell everybody, hurting their constituents too.

These people do not give anybody any credit if they are out trying to create wealth. All they do is make disparaging remarks about people who are trying to create wealth, trying to pay taxes, trying to create jobs. What do they say about those people? They have nothing but disparaging remarks. The reason is that they cannot justify a single, solitary policy their government is advocating. They all sit there and swear at the people who are trying to fight for their constituents because they do not have the guts to do so themselves. It is a pretty pathetic thing to see them sitting there ramming taxes down the throats of their own constituents. The only thing that gives me some comfort in watching them do that is the fact that I know, as they persist, none of them is going to be here after the next election.

It is interesting that Bob White was the first person to complain about the very tax we are debating. The government would not listen to Ken Harrigan, the president of Ford Motor Co, when he complained and said jobs would be lost, but they listened to Bob White. Bob White said, "If you persist in this tax, jobs are going to be lost." I can tell you, Mr Speaker, tomorrow 3,500 to 4,000 jobs are going to be leaving this province because this government --

Mr Owens: That's right. The fault is Brian Mulroney's.

Mr Harnick: Here we go with Brian Mulroney again.

Interjections.

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Mr Harnick: The animals are rattling their cages because they are going to talk about Brian Mulroney and they are going to talk about free trade. Let me tell the members opposite that the auto trade has been governed by the auto pact. It has been effect since 1960. It is a free trade agreement that has brought more wealth to this province than any agreement it has ever entered into.

What is this government going to do? It is going to make this province so uncompetitive that tomorrow we are going to lose 4,000 union jobs. They can all stand up and take a bow, because they have not done one thing to make anybody more competitive so we can protect and increase those jobs.

All those people do is make disparaging remarks. I wonder when I sit down whether one of them will have the guts to stand up and defend this tax. I will bet right now that not a single person on that side of the floor has the guts to stand up and defend this policy of the Treasurer. That is why I am going to move the adjournment of the House, so they can have half an hour to find a speaker who can come and speak about this tax and try to justify it.

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The House divided on Mr Harnick's motion, which was negatived on the following vote:

Ayes 0; nays 80.

The Speaker: The member for Willowdale has the floor.

Mr Harnick: For the member for St George-St David, I am going to start all over, because he missed the first part of the speech.

Mr Drainville: On a point of order, Mr Speaker: I believe the member for Willowdale actually moved the adjournment of the House and then voted against his own motion. Is that parliamentary, Mr Speaker?

The Speaker: I appreciate the point of order raised by the member. There is not anything out of order. Members are entitled to have a change of heart as time goes by, and we did allow a 3-minute clock.

Mr Harnick: It is interesting. I have been watching the Premier change his mind, so I decided to do it myself. He did it on auto insurance. He did it on conflict of interest. He did it on -- well, look at the budget. One minute he was a big spender, and now he is trying to figure out how to be a big saver.

All of this escapes the members opposite. It was interesting. When we came back, one member said, "All we have done is waste the taxpayers, money." It is just a shame that the members of the government feel coming here to debate is a waste of the taxpayers, money. I think that really says an awful lot about the government, that coming here to debate the issues is a "waste of the taxpayers, money." The reason we are here tonight is to talk about the taxpayers, money.

Mr O'Connor: On a point of order, Mr Speaker: The member for Willowdale has mentioned many times that he would like to see some participation in debate from this side of the House. He has not spoken on Bill 130 in some time now, and he called for a 30-minute bell. I think we would like to participate in the debate. Perhaps he will sit down and allow us to participate.

The Speaker: Would the member take his seat.

Mr Elston: On a point of order, Mr Speaker: The honourable gentleman has raised a point about wishing to be involved in the debate, but it is quite clear that what is of concern to us in the opposition is that if the floor is given to the members opposite, we anticipate they will be trying to shut down the debate and, in fact, end it for all time.

In the interest of our being able to assert our right to defend the issues which we believe in most firmly, including the issue about which we are all most centrally focused in these last few days of the House before the Christmas break, we want the people here only to know that we have a right to make our points on this legislation, as well as having the right to ask for certain events to occur, like a resignation of the Minister of Northern Development. That is what this is about.

The Speaker: Would the member take his seat.

To the member for Durham-York, indeed the matter before the House currently is Bill 130, and naturally it would be helpful if two things would occur: if the member for Willowdale would address his remarks to the Chair, and if others would refrain from interjections. Then perhaps we can entertain some further debate on Bill 130.

Mr Harnick: Dealing with Bill 130 directly, Bill 130 is a gas guzzler tax that is being imposed across the board on every make and model of automobile sold in this province.

We can talk, for a moment, about what goes into the manufacture of an automobile. We have, first of all, the cost of the various components. We have steel, and the manufacture of steel employs people. We have the development of the various components of the automobile. We make tires. They are made out of rubber. The manufacturing of tires creates jobs. We have the mechanical components of the automobile: the engine, the electronics. Every one of those manufactured parts creates jobs. Every time the tax on the cost of that automobile is raised, we sell fewer automobiles and therefore there are fewer jobs being created.

We have a few places in Ontario that are primarily involved with the manufacturing of automobiles. Steel comes from Hamilton, and I know there are a number of members in the Legislature representing ridings in Hamilton.

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I appreciate the member for Halton Centre handing me a note telling me about a few more components of automobiles, and I would appreciate any more that anybody could provide me with so we do not miss anything.

We have the city of Hamilton, and when the number of cars being produced is reduced, we do not have as much steel being manufactured and sent to the car manufacturers for this production. Every time that happens, places such as Hamilton suffer. They do not have the jobs they need to maintain their economies, and when people lose their jobs, it is devastating for them, for their families and for their communities. People lose their dignity.

I know that does not mean too much to the people on the other side of the floor. It does not matter to them that they are adding taxes and increasing the cost of automobiles and that fewer automobiles are being sold, but that is what this tax --

Mrs Caplan: On a point of order, Mr Speaker: I believe members must be in their seats before they can either interject or hiss to create disorder in the House. I would point out that the member for Downsview is not in his seat and is causing disorder and disruption and is not listening intently to the speaker.

The Speaker: The member for Oriole indeed has a point of order. Members of course are not supposed to be making interjections, but if they should decide to do so, they must be in their rightful places in the chamber.

Mr Harnick: It is interesting -- just to digress for a moment -- that some people actually make witty interjections. Other people can only expel air from their bellies. I suspect that most of the people sitting here now only have the ability to expel air from their bellies.

Going back to Hamilton, it is an industrial city, and when the government raises the tax on automobiles, a place that provides the raw materials to build those automobiles suffers. I know that not many of the members across the way really care about that, because they are all supporting tax increases, but they are hurting the community of Hamilton and the people who live there. The people who live there are not happy about paying more money for taxes and for cars.

Hon Mr Pouliot: Tell us about free trade.

Mr Harnick: With all due respect to the Minister of Transportation, what we are dealing with when we are talking about automobiles is the auto pact, not the free trade agreement. The Minister of Transportation may think we are dealing with the free trade agreement, but we are dealing with the auto pact, which is in fact a form of free trade agreement, not very much different from the free trade agreement we have in this country.

The auto pact, I might tell the Minister of Transportation, has been probably the very greatest influence in creating a healthy automobile manufacturing industry in this country. The minister -- and I gather he has a ministry that may in fact peripherally deal with automobiles and the manufacture of automobiles -- should be well aware that the free trade agreement and the auto pact have been good for automobiles. As a matter of fact, I might mention to the minister, who seems to know all the answers when he is sitting on his butt, that the free trade agreement reduced the cost of automobiles.

That should have been a stimulant to the automobile trade in this country. But what did this government do? It decided to give back what the federal government took away. It decided to add to the price of automobiles by putting on the gas guzzler tax. What did that do for Hamilton? It meant that in the city of Hamilton, Stelco and Dofasco, and I suppose the Algoma Steel company in Sault Ste Marie, are now producing less steel for the production and manufacture of automobiles, and that has hurt the people who live in Hamilton. If that is something the members of the government are proud of, so be it, but I say to them that increasing taxes on automobiles is not going to help the economy of this province. It is nothing but a tax grab. It is nothing but pain to the citizens of this province.

In the production of automobiles, we also have the upholstery for seats -- leather, cloth, the stuffing that goes into the seats -- the glass, the windshield wipers, floor mats, instrumentation and electrical components. Every time the government raises the taxes and the price of automobiles goes up, what happens? We sell fewer cars. When we sell fewer cars, we hurt the people in Oshawa. When fewer cars are being sold, there are fewer people working on the shop floor at General Motors in Oshawa, and those people include the lowliest person who works in the pit.

I do not know if anybody from that side has ever been in an automobile manufacturing plant -- I suspect they may have -- but the plants have people who work in very difficult jobs. They work in the pit, with cars going over top of them, and they work very hard. They value that job and they need that job. The members of this government just shout at me, shout derision across the floor, but that does not help the people who lose their jobs because this government is raising the taxes.

It is a shame that so many members of the government had to get out of bed to come back here for the vote. Now they are going to have to listen to what they may be doing to hurt the people who live in Oshawa, because when they are selling fewer cars, it hurts the whole economy. The small businessmen who depend on the consumers who live in Oshawa can no longer operate their small businesses because they do not have the free flow of money to pay for the goods and services they are selling. The fact that this government has raised the tax on automobiles is a very detrimental thing not just to the people who work in the automobile plants. These people lose their jobs and it has an effect on the economy of the whole city of Oshawa.

We see this government paying lip service to workers. What is the lip service it pays? It is going to bring in all of these terrific labour law reforms. These terrific labour law reforms are going to be great for the big union leaders, but they are not going to be so great for the person who has to perform the work and who is looking for a secure future for himself or herself or their family.

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The idea of worrying about tipping the balance of the labour laws, that are now equal between union and management, to favour unions, so that management does not have the opportunity to be competitive, is something this government just does not understand. The result is that those proposed changes to the labour laws are going to hurt people, hurt the workers who have to work on the shop floor. They are going to hurt the people who have to try to get ahead, and they do that with dedication to the companies they work for. They do that with the sweat of their brow. What does this government do to support those workers? It raises their taxes. I do not think that is something that is helping the employees of this province.

I refer again to the All Business Coalition press release of October 17, 1991, where it states quite clearly: "More than 42 of our member companies have closed their doors in the past year alone," said Neil De Koker, president of the Automotive Parts Manufacturers' Association, whose members provide 380,000 direct and indirect jobs to Ontario workers. "Why isn't government out there looking for ways to help us lead the recovery, rather than aggravating an already very difficult situation?"

They have this idea that they have to raise the taxes. Why do they have to raise the taxes? They have to raise the taxes because they cannot cut the programs. They do not know what to do, so they raise the taxes because they have to keep that deficit under $9.7 billion. I might add, that is the deficit my children are going to have to pay for and the deficit that is going to prevent my children from finding jobs that give them a decent take-home pay at the end of the week.

The Minister of Housing is here and she thinks this is all very funny. I can tell her, I do not think it is very funny for my children and for children of their generation who want to grow up in the city in which they were born, who want to buy a home in the most expensive city in this country. They are not going to be able to do that because at the end of every week, even if they get good jobs, it does not take very long until more than 50% of their earnings are going to tax dollars. That is 50% of their earnings before we take into consideration taxes like the gas guzzler tax, which is going to cost people even when they buy the most basic forms of transportation. I do not think this government is moving in the right direction. If anything, it is making the burden much worse on the taxpayers in the province.

It is interesting that when Bill 130 came along, it was actually worse than it is now. It is a tax that is totally unnecessary. The government brought the tax in and Bob White decided it was a bad tax, so the government decided to revise the tax, and it has now kept it because it has to save face. The idea of maintaining a tax to save face rather than withdrawing it altogether is not going to help the people of Ontario and it is not going to help those who have to pay taxes. It is not going to help those who need to use their cars for their employment. It is not going to help those who have to go to and from work using their automobiles because they work outside of the city and they need their automobiles.

My riding is a suburban riding in Metropolitan Toronto. My constituents need their cars. My constituents are teachers, nurses, people who work in small businesses, and not every business is within walking distance of their homes and not every business permits them to saunter out to the corner and get on the bus and get direct access to their work site. They need their cars. They have to go to work every day because they have to pay the taxes this government is levying. Now they find that when they go out to buy even the most basic forms of transportation, they have to pay an increased tax.

I neglected to talk about the city of Windsor. There is a city that I am actually very familiar with, having lived there for a short time.

Mr Huget: They celebrated when you left.

Mr Harnick: The witty comment from the member across the way is that they celebrated the day I left. They may have celebrated the day I left, but they are going to celebrate the day they throw the NDP out an awful lot more than they celebrated the day I left. All of those people are saying: "Bob Rae, this honest guy, was going to restore integrity to government. He was going to ensure that we had good jobs, secure jobs. He was going to get us more money. He was going to lower the taxes. He was going to solve the garbage crisis. There weren't going to be any more environmental problems. There were going to be hospital beds, and nurses were going to have big raises and doctors were going to have big raises, and there was going to be fair taxation in the education system."

All those people in Windsor believed all that stuff and they went down to the ballot box and voted for the NDP.

Mr Turnbull: On a point of order, Mr Speaker: I believe the member for Downsview is once again heckling and he is not in his place.

The Speaker: There were a number of interjections. I did not notice that the member for Downsview contributed to that. If indeed he wishes to participate, then of course he should find his rightful place in the chamber.

Mr Hope: On a point of order, Mr Speaker: I would not want to see the member for Downsview get in trouble, but there are some of us who are sitting in our appropriate seats making sure the member is putting clear information across. I would just like to make sure the member for Downsview does not get in trouble, that some of us members are trying to make sure that the proper information is put across to the public.

The Speaker: That is certainly very helpful.

Mr Harnick: The member for St George-St David is back and wants me to start at the beginning again.

I was speaking about Windsor. Windsor is a border community. It is a border community that is becoming less competitive by the hour. It is becoming less competitive because this government keeps raising the taxes. It will not permit small businesses and merchants in Windsor to compete with businesses on the other side of the border. They pay lipservice to the problem of cross-border shopping. They permit Sunday shopping for three or four weeks a year, because you do not have to pause in December but you have to pause in the other 11 months. That does not make any sense to me.

At any rate, the city of Windsor is very much dependent on the automobile business primarily. The Chrysler car manufacturing company is located in the Windsor and, like all other car manufacturers, is having great difficulty. It is a company that has seen its share of the market very much diminished in the last few years, and the result of the diminution in the number of cars being sold by that manufacturer is that the city of Windsor is in a great deal of trouble. Because it is in a great deal of trouble, it needs a government to come along which recognizes the trouble it is in and it needs a government which is going to do something to stimulate the economy.

What has this government done to stimulate the economy in Windsor? They have raised the taxes on the price of automobiles. They have raised the taxes on the kind of automobiles that are built in Windsor, and those are automobiles geared to purchase by families who need jobs and who have no security because of what this government is doing. They have gone ahead and raised taxes so that the car market and car manufacturing in Windsor is dying. They have done absolutely nothing to stimulate the economy in that city. They have done absolutely nothing to help Chrysler in terms of being competitive. They can all sit there and shout across the floor, but not one of them can stand up and say that his or her government has done anything positive for the car manufacturing business in Windsor.

Taxes are now at an all-time high. Ontario is the most highly taxed jurisdiction in North America.

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There is an article that bears discussing in the Financial Post dated December 13,1991. It says:

"'Government should be helping small business climb out of the recession rather than holding them up for more taxes,' says Catherine Swift, vice-president and chief economist at the Canadian Federation of Independent Business. 'At least government should stop making things worse for the business community with initiatives that retard investment and employment creation.'

"Taxation is the number one complaint voiced by the Canadian Federation of Independent Business's 83,000 members, about half of whom are in Ontario."

One can see that businesses are crying out for government, if it is not going to do anything positive, to just leave them alone. The government should not raise taxes any more, because every time it raises taxes, the viability of those businesses becomes less and less, and every time that happens, every worker who is employed at any of those businesses is in jeopardy.

Does the government we are watching today do anything about that? No. They sit here and laugh. They have no concern whatsoever. They sold a bill of goods to the people of this province in order to get elected and now they sit here and laugh, enjoying the perks of office, enjoying giving jobs to their relatives, enjoying putting money into their furnishings, enjoying giving out $57,000-a-year jobs to people who are 22 years old, who have not graduated from anything other than a secondary school. What are they doing? They are ensuring that the Workers' Compensation Board is providing jobs to the tune of $57,000 a year. The government is $10 billion in debt and climbing. What is it doing for the small businessman who would be lucky if he could take home $57,000 a year after creating jobs for people? It is raising his taxes. That is what the government is doing for him.

What is the government doing to stimulate the economy? I have not seen anything.

Interjections.

Mr Harnick: I hear all the members over there who have yet to find their rightful seats shouting at me. The member for Yorkview, I believe, is the member who came in here the other day with his Workers' Compensation Board amendments. All of a sudden, he was very concerned about workers' compensation. Here they are giving away jobs at $57,000. Workers are living off a meat chart and at the same time they are hiring children to work for $57,000 a year. I bet there is not a single person on the government side of the House who started out in an employment capacity --

Mr Miclash: On a point of order, Mr Speaker: I would very much like Hansard to record the comments of people from across the House as they make comments, but for Hansard to record those they must be in their own seats. Mr Speaker, you have heard a good number of comments coming from across the House. I will not be able to find those comments because they are not in their own seats and Hansard cannot identify them. Would you please have them put themselves back in their own seats?

The Speaker: Would the member for Kenora take his seat, please.

Mr Miclash: The lady from Hansard is trying to record their comments --

The Speaker: I ask the member for Kenora to take his seat, please.

Interjection.

The Speaker: I ask the member for Kenora to take his seat immediately.

Interjection.

The Speaker: If the member for Kenora is a cause of disorder, he will be named.

Interjection.

The Speaker: The member for Kenora is being asked to take his seat. I am warning the member for Kenora that unless he comes to order, he will be named.

Interjections.

Mr Scott: Mr Speaker, if it makes you more comfortable, name me. I am used to it.

The Speaker: I appreciate the assistance of the member for St George-St David.

Interjections.

The Speaker: I ask the member for York Mills to take his seat. When the member for Kenora comes to order, I will then deal with the point of order which he raised.

Mr Miclash: I hope so. My God, why do we have to take this crap.

The Speaker: The member for Kenora has one last opportunity to come to order. If he refuses to do so, I will have no recourse but to name him.

It would be of great assistance to the House if, indeed, those members who feel compelled to make interjections, which I remind them are out of order, would occupy their rightful places in this chamber. Under those conditions --

Interjection.

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The Speaker: The member for Essex South, come to order.

I realize it is a difficult situation, but members are not assisting by making interjections when they are not in their rightful places. At the same time, it is not helpful if members contribute to the disorder. There are several members who are not currently occupying their rightful places. They can remain where they are now, provided that they do not contribute to the debate.

Interjection.

The Speaker: The member for Downsview.

Interjection.

The Speaker: The member for York Mills is asked to come to order. If we are to continue with the debate in this House, the House must come to order.

Mr Scott: Would you like me to go and talk to him, Mr Speaker?

The Speaker: The member for St George-St David could be of assistance.

Mr Scott: He has come to order now, Mr Speaker.

The Speaker: As you have been of such great assistance, I think we can continue. The member for Willowdale.

Mr Harnick: Just before the brief altercation we have just had, when all the NDP played musical chairs to go back and find their chairs, and they needed little maps to do it --

The Speaker: Perhaps the member could address his remarks to Bill 130.

Mr Harnick: Mr Speaker, I would only address my remarks to you, but it is very interesting. I received a note, I believe from the member for Downsview. Here we are in the middle of an important debate on taxes. I have to share with the House the note I just got from the member for Downsview.

Mr White: On a point of order, Mr Speaker: You have directed the member to address his remarks to Bill 130. He is going to start to tell jokes now.

Interjections.

The Speaker: The member for Willowdale.

Mr Harnick: As I indicated, I believe we are in the midst of an important and serious debate dealing with Bill 130.

Interjections.

The Speaker: Order. The member for Willowdale will continue with his comments on Bill 130.

Mr Harnick: As I said, and I have tried a few times, we are engaged in what I believe to be an important debate on an issue that is costing everybody in this province money. It is costing them tax money they can ill afford to pay in this economy.

In this midst of what I believe to be an important debate, I get a note from the member for Downsview, and I want to share this with the House. It is a riddle. I hope, Mr Speaker, you can help me answer this riddle, because he did not give me the answer, he only gave me the question. "What do you get when you play a western song backwards?" Can somebody provide me with that answer, because here we are in the midst of an important debate, and what does the member for Downsview think about? He is thinking about a western song backwards.

Mr White: On a point of order: Again, Mr Speaker, I direct your attention to the fact that the member is telling jokes and riddles in the midst of am important debate. He is degrading again and again the quality of this discourse.

Interjections.

The Speaker: To the member for Durham Centre, it is indeed the practice in this chamber that during second reading debate a fair bit of latitude is allowed to the participant in the debate. Of course from time to time the participant must bring himself or herself back to the principle of the bill, but it is certainly a long-standing practice that members have the opportunity for a great deal of latitude to be allowed in the debate. The member for Willowdale has the floor.

Mr Harnick: As I say, in the midst of this very important debate, I get a note --

Interjection.

Mr Harnick: Now we have the one-term member from Durham Centre, I believe. He is another interesting member, a guy who got bounced as a committee Chairman because he had no ability whatsoever.

The Speaker: The member for Willowdale will please take his seat. It is certainly not helpful to the atmosphere in this chamber to make disparaging remarks about other members. I would ask the member to direct his comments to Bill 130.

Mr Harnick: I withdraw that. At any rate, in the midst of what I consider to be a very important debate my good friend the member for Downsview sends me a note: "What do you get when you play a western song backwards?" I do not know what you get when you play a western song backwards. All I know is that the tax policies of this government are backwards and they are going to continue to be backwards until the government recognizes that people cannot pay any more taxes. That is what my constituents are telling me. I appreciate that the member for Downsview probably has a great sense of humour, but this is not a funny debate; this is not a joking matter.

Mr Peruzza: On a point of order, Mr Speaker: The note the member for Willowdale keeps referring to --

Interjections.

Mr Peruzza: Will you just give me a chance? The note I gave the member for Willowdale was meant to cause some reflection, because while he stands and talks at length people out there are losing their homes. The tax policies of his Conservative federal --

The Speaker: Would the member for Downsview take his seat. Far be it from me to decide what is humorous about a note and what is not. Would the member for Willowdale please direct his comments to Bill 130.

Mr Harnick: I am just a little bit miffed that in the midst of an important debate I am getting notes from the member for Downsview asking me what you get when you play a western song backwards. That is the level to which this government has sunk. They cannot debate their tax and fiscal policy, so they lash out at people, they make jokes, but they do not deal with the very grave consequences to the people of the province.

I would like to quote what the Oshawa Times said about the gas guzzler tax: "They couldn't get it right the first time, so they got it not quite so wrong the second time, and we're supposed to be happy about it. Ontario Treasurer Floyd Laughren took back a tax designed to discourage sales of Oshawa-built Buick Regals and Chevrolet Luminas and replaced it with a tax that will discorage sales of all domestically made cars and encourage sales of a few transplant models." That was an Oshawa newspaper, and that newspaper reflected exactly what the people of that city are thinking.

I might add that the member representing the Oshawa area is here tonight. I know he is concerned about this tax. He is one of the few members who has not shouted in derision at me for standing here trying to fight for the people of Ontario, trying to fight against improper taxes that are being levied against them, taxes that are nothing more than a tax grab by a government that cannot meet its obligations without gouging the people of the province.

The North Bay Nugget also talked about this tax. Obviously, people in northern Ontario are very much affected by increases in the price of cars. The North Bay Nugget said, "The only signal it sends is that the consumer will pay more for a new car," which I think is very important. That is one of the very clear signals it will send: The consumer will pay more for a new car.

It goes on to state: "It is another tax added with all the other taxes, and nothing more. At this rate, some day the taxes on a vehicle will be more than the cost of manufacturing it." Well, that really says it all from the people in North Bay.

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I might add that automobiles are very important to people in northern Ontario, because they do not have the TTC at the corner to take them wherever they want to go. They have to pay for automobiles, and those automobiles are exposed to the very toughest of climates, so those people have to go out and purchase vehicles with some regularity. Soon they are really going to need them, because every time they go to the doctor, they are going to have to do it somewhere south of Parry Sound and likely somewhere in the Toronto area. They are going to need their cars because at the rate this government is going, there will not be any doctors left in northern Ontario to look after people.

I do not have to talk about the attitude of this government towards doctors. I do not have to talk about the issue that has dominated this Legislature for almost two weeks now dealing with the comments of a minister who admittedly spread falsehoods about a doctor and besmirched his character.

The Speaker: Bill 130, to the member for Willowdale.

Mr Miclash: She lied.

Mr Harnick: I suppose I can bring myself to say it. She did lie, and she admitted it. That is the kind of thing this government is concerned about.

The Speaker: To the member for Willowdale, if he has more remarks to make on Bill 130, then of course he has the floor and can do so.

Mr Harnick: I indicated that people in northern Ontario need their cars, and they are going to need their cars to go to the doctor. They are going to have hundreds and hundreds of miles to travel, because they are not going to find any doctors much north of Huntsville. All the doctors are going to be in southern Ontario, except the ones who have gone to the United States.

The idea of seeing these people on the other side of the floor, the government, berating me tonight because I am standing here fighting for my constituents is part and parcel of what they have learned from their ministers, who berate everyone who does not agree with them. They go ahead and berate a doctor because that doctor is trying to make a living and serve his patients in northern Ontario, and they have a minister who goes out and lies and slanders the character of that doctor. That is the way this government defends and justifies its policies.

Not a single person in this government has stood on his feet for any of these tax bills and justified any of the new taxes being imposed in this budget, because they cannot; they cannot do it.

In the Hansard debates, a prominent member of this assembly, on December 7, 1988, made some very interesting comments about retail sales tax. This is what the member said, and he was referring now to the taxing policies of the Liberal government:

"How has this government been taxing? What is interesting about its approach is that it involves absolutely no significant reform of any kind directed at dealing with the major problems of our tax systems. The major problem in our tax system is that working people, working families, ordinary folks, pay too much and those who are more well-off and wealthier pay too little."

Well, wealthy, well-off people are not going to be hurt by this tax. People who are hardworking individuals of modest means are the people who are going to be hurt by this tax. Farmers who live in rural communities and need cars and trucks in their everyday lives are going to be hurt by this.

I might add that the prominent member who made these comments was none other than the Premier. That was in the days when the Premier was the opposition leader and purported to really care for people. He was a caring and concerned individual in those days, but that was then. We do not have a Premier who fits that mold any longer.

I just want to return to the article I began quoting some time ago, talking about tax concerns being at an all-time high. The article began by saying, "'Governments should be helping small business climb out of the recession rather than holding them up for more taxes,' says Catherine Swift, vice-president and chief economist at the Canadian Federation of Independent Business."

I do not know of anything this government is doing to help small business out of this recession. The article states:

"'We have been polling members for 15 years, and concerns about tax are at an all-time high across Canada,' she says. 'Most worried are small businesses in Ontario who fear the ballooning provincial deficit will lead to higher taxes and policies that do not support investment and job creation.'"

That is in fact exactly what is happening at this very moment, because the high deficit is what is provoking these taxes, and they are not leading to any policies that are supporting investment and job creation. In fact, this government has not yet provided one single policy to support investment and job creation in this province. There is not a member of this government who can stand and point to a single policy that has been job-supporting and investment-creating. There is not a single policy they can point to. It is just the opposite. They are doing everything in their power to create a climate that is not going to be conducive to supporting investment and job creation. It is rather sad.

They go on in this article to say, "Payroll taxes, property taxes at the municipal level and other inflexible taxes are a particular problem, as they do not vary as income varies." Neither do increases in sales taxes, such as this tax that is before the House tonight. Those taxes do not vary according to income.

As I said earlier, the government is hurting those who can least afford these increased taxes. Those are the people who need the most modest means of transportation to get to and from their jobs, to look after their families, to take their children to school and pick them up after school and take them to various lessons and the family activities that people engage in. I feel very sorry for families of those means today, because this government is making their lives much worse and is not helping to ensure that the jobs those families have are stable, long-lasting, real jobs.

Mr Mammoliti: Yes, but what is the answer to the riddle?

Mr Harnick: The member for Yorkview wants to know what the answer is to the riddle. He is sitting right beside the person who is the author of the riddle, so maybe, rather than waste the time of this House, he can whisper in his ear and ask him what the answer is. Quite frankly, I say to the member for Yorkview, the people of Ontario could not give a damn what the answer is to the member for Downsview's riddle. They could not give a damn because they are worried about their jobs and the taxes the government is raising. They could not give a damn about the answer to his riddle. They would like to see him representing them.

Mr O'Connor: On a point of order, Mr Speaker: Many times in the course of the debate tonight, the member across the floor has talked about jokes and conversed across the floor and not talked on the bill. I would like him to get back to the bill. When he is finished, perhaps he will allow us the courtesy of debating it as well, because we really want to debate this openly and not have them monopolize all the time.

The Speaker: I get the impression that the member for Durham-York is waiting patiently for his turn in the debate, and indeed there are members who would like to participate. Currently, however, the member for Willowdale has the floor, and I know he is about to address more remarks to Bill 130.

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Mr Harnick: As I was saying, I do not believe the people in Ontario are particularly interested in the honourable member's riddle. I think they are more concerned about the taxes they have to pay, about their increased energy costs and --

An hon member: Then why do you keep bringing it up?

Mr Harnick: I did not bring it up; it was the member for Yorkview who brought it up. If people are concerned about the riddle that continues to be brought up, they might have a word with the member for Yorkview and tell him to keep his mouth shut and the riddle will not recur in the course of this debate any longer -- although I have to admit that, deep down, I really would like to know the answer to that riddle.

Mr Miclash: Think about it.

Mr Harnick: I could think about it probably for the rest of my life, but my intellectual capacity is not quite as deep as the intellectual capacity of the people on the other side of the Legislature. I am sure they all know the answer to "What happens when you sing a western song backwards?" but I am not that philosophical a thinker.

Let's take a look at the general economic health of this province in October, November and December 1991. The government can retract taxes and it can help industry that is flagging. There are 135,000 fewer people employed in Ontario today than a year ago, and I think the government owes it to those people to at least appear to be concerned, to at least appear to be finding solutions to the problems. I do not think that raising taxes causes a lot of confidence in those people. It does not give those people who have lost their jobs an awful lot to look forward to, because they are insecure. They do not have jobs that are long-lasting. They are looking for a day of work here and a day of work there, and the idea of raising taxes to further slow down the economy rather than stimulate it is not causing them any joy in terms of their futures.

The unemployment rate in Ontario has increased over the course of the past year to the point where we are close to 10%. I have not seen the government do a single, solitary thing to stimulate jobs and the creation of jobs in this province. They have not done a single thing, and the numbers keep going up. If the Treasurer were here, he would be blaming the federal government, but there is still an obligation on this government to be doing something to help the people in the province, and I do not see it at all.

There are now 50,000 fewer manufacturing jobs in Ontario --

Interjections.

Mr Harnick: Mr Speaker, they are expelling air from their bellies again. The members across the floor have nothing witty to say, so they expend air from their bellies. That is because they are not interested in the fact that there are 50,000 fewer manufacturing jobs in Ontario, 42,000 fewer construction jobs, 81,000 fewer trade jobs and 4,000 fewer agricultural jobs. That affects a whole group of people who, if they had jobs, might be going out to buy cars, but those people are not able to work. They do not have the money to spend --

Mr Klopp: Tell Brian about the 88-cent dollar.

Mr Harnick: There we go again, blaming the federal government. They can blame the federal government all they like, but that is not going to help anybody in Ontario.

Mr Klopp: That's right. We have to get rid of that government.

Mr Harnick: We have to get rid of this government, too, and pointing the finger at other people is not creating any constructive solutions for the people in Ontario. They elected the New Democratic Party to form a government and solve these problems. They did not elect this government to point the finger at everybody else. They did not elect this government to yell at me when I stand up to fight for my constituents about lower taxes, not more tax increases. They elected them to find solutions and they are obligated, because they are in that position of trust, to try to find those solutions, not to continue to blame everybody but themselves. It is cold comfort to the family that cannot afford a turkey dinner at this festive season to see the members of the NDP blaming everybody else for the problems and not doing anything to help; cold comfort indeed. I do not think this government's rhetoric and blaming everybody else is at all a constructive solution to the problems that face this province today.

Interjections.

The Speaker: Order.

Mr Harnick: Mr Wiseman has now come back.

The Speaker: Order. Would the member for Willowdale please take his seat. I would remind the member, and indeed all members in the House, that it would be very helpful if we referred to one another by the name of the riding and not the name of the individual; the title "minister of," rather than using surnames.

Mr Harnick: I apologize for that. I notice that the member for Durham West is now back in the chamber. He is very agitated when we talk about taxes. I have not seen him stand in this chamber and I have not seen him --

Interjection.

The Speaker: Will the member for Durham West come to order.

Mr Harnick: I have not seen him fighting on behalf of his constituents to keep their taxes down and ensure that they have steady jobs, security and no tax increases. I have not seen the member for Durham West doing those things. The only thing I have heard the member for Durham West do in this chamber is deny the fact he is going to have a new dump site in his constituency some time between now and the next election. Accordingly, he will not be here after the next election.

Let's go back to taxes because that is really what this debate is all about. I know that talking about taxes is a very sore subject around the government because it likes to raise taxes and thinks that is going to be the instrument to stimulate the economy and create jobs. The government cannot extract money from people over and over again without people starting to hurt. The people in this province have now been hurting for five or six years. They come here and yell at me when I try to fight on behalf of my constituents, who do not want to pay any more taxes -- they cannot. My constituents are paying for modest homes with property taxes in excess of $2,000, some of them $3,000 and $4,000. I am not talking about people who live in mansions; I am talking about working people probably not a lot different than some of the members who sit across the floor. My constituents cannot afford to continue paying increased taxes. They just cannot do it.

The cavalier approach of this government and the uncaring way it perceives that taxpayers have to be treated just does not wash with the people in Willowdale. My constituents work hard. They are happy to pay their fair share of taxes, but you reach a point where it hurts. My constituents are hurting; they are hurting because this government is grabbing taxes indiscriminately because it is fighting to keep the deficit below $10 billion.

But the government is not going to do it because it just cannot its own spending under control. They cannot keep their own spending under control but ask my constituents to pay more by way of this retail sales tax bill, to pay more for their electricity costs and their energy costs, to pay more for gasoline at the pumps. That is something my constituents cannot live with. They cannot live with the fact that civil servants in this province received raises of in excess of 14.5% when other people trying to run small businesses or employees of small business were losing their jobs or where businesses were going bankrupt. They cannot accept and they cannot understand why the cost of living in Metropolitan Toronto is becoming so excessive.

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They can no longer afford to pay the taxes this government continues to levy upon them. They cannot pay any more. The members may not care about that. They may not care about it for their constituents, but I care about it for my constituents. My constituents pay their fair share and they are proud to do it, but they cannot pay any more. I think the investment climate they have created in this province is the death knell for my constituents. My constituents can see the handwriting on the wall.

I am going back to the article about small business in the Financial Post of December 13, 1991. It states, "Proposed changes in Ontario labour law were dubbed by the Canadian Federation of Independent Business the Union Leader's Welfare Act." Can you imagine that, the union leader's welfare act? "The New Democratic government is expected to tilt the new legislation in favour of labour and give unions incredible power to interfere with the operation of business. The government has issued a discussion paper and will hold hearings from January 8."

The very idea of legislating not to create a level playing field but to create an imbalance, the very idea of creating an imbalance and a climate that necessitates the government continuing to raise taxes to meet its obligations because it is creating a climate in which private industry can no longer create and generate the amount of wealth necessary is absolutely incredible. Every person in this province should be, and will be, appalled to see a government trying to take a process, which is an adversarial process at times between unions and labour, and deliberately, unashamedly saying it wants to create an imbalance.

That is absolutely, positively shameful. The fact that it is being done at a time when my constituents are having trouble meeting their obligations, when they are worried about their jobs, that the government is going to go ahead and deliberately create this imbalance which is going to cause a worsening of the investment climate in this province is absolutely shameful. I have grave concerns about that piece of legislation.

I notice, Mr Speaker, that you keep holding up Bill 130 to remind me that is what I should be talking about. I cannot separate those two issues, because the imposition of taxes and the increase in taxes, particularly of retail sales tax, becomes necessary when a government creates a climate in which it is impossible for the private sector to create the necessary wealth to generate the income a government needs to carry on. I appreciate, Mr Speaker, your concern that I stay on the bill but I have a great deal of trouble separating those two things.

I have the Hansard from November 24, 1988. Some comments about retail sales tax were made by the person who is now our very own Treasurer, described in this book as just plain Mr Laughren. He said:

"If I could quote from the present Premier" -- that would be Mr Peterson -- "who was then not the Premier but leader of his party, he said in 1982: 'What we saw in that budget was a change in the philosophy of taxation. We saw a move away from the progressive system which we, as Liberals, believe in passionately, taxation that is based on the ability to pay, and saw a major move toward flat consumption and regressive taxes. We saw a shift on to the poor, the lower-income families who have less capacity to deal with these taxes than people at higher income scales. As a party we chose, as a rather dramatic signal of our displeasure, not to show up to vote for a couple of days.'

"That was in opposition to increased sales taxes" -- this is the Premier, meaning David Peterson, and these are the words of Floyd Laughren criticizing him -- "and now we have the Premier putting his stamp of approval on this sales tax increase. I suppose nobody has ever accused a Liberal of consistency, and certainly this government is no different, no different at all."

He goes on to say:

"I see some of my learned friends here who will appreciate a quote from John Stuart Mill this afternoon. He said a very pithy thing" -- if the members are making fun of it, these are the words of their Treasurer. If they object to the word "pithy," if it is a little above them, they can take that up with the Treasurer at their next caucus meeting if he has time for them.

"He said a very pithy thing. He said: 'Equality in taxation means equality of sacrifice.' If you think of what that means, then surely you will conclude that this sales tax bill is not worthy of your support, because nobody ever pretended that sales tax means equality of sacrifice. It definitely does not. If you believe in the progressive tax system and equality of sacrifice, then you cannot support a retail sales tax."

That was the now Treasurer speaking and he is the very person who introduced the tax now before us. I do not understand why I have stood here for probably close to three and a half hours and been derided. I have had members on the other side swear at me and all I have been doing is fighting for my constituents.

The Speaker: Would the member for Willowdale take his seat. Perhaps this would be an appropriate moment for him to pause in his remarks. It being nearly 12 o'clock, this House stands adjourned.

The House adjourned at 2359.